Sensitech, Inc. v. LimeStone FZE

United States District Court

District of Massachusetts

___________________________________

)

Sensitech Inc., )

)

Plaintiff, )

)

v. ) Civil Action No.

) 20-11043-NMG

LimeStone FZE and Samer Alwash )

)

Defendants. )

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Memorandum & Order

GORTON, J.

In June, 2020, this Court entered a preliminary injunction

against LimeStone FZE (“LimeStone”), Samer Alwash (“Mr. Alwash”)

and LinkedIn Corporation (“LinkedIn”) (collectively

“defendants”) in response to allegations of plaintiff Sensitech,

Inc. (“Sensitech” or “plaintiff”) that LimeStone and Mr. Alwash

have engaged in a variety of activities designed solely to harm

Sensitech’s business. Soon thereafter, LinkedIn was voluntarily

dismissed from the case. The preliminary injunction requires

defendants to comply with eight conditions. The two most

pertinent to the pending motion can be summarized as requiring

defendants:

to refrain from posting (or assisting others in

posting) on any social media, including but not

limited to LinkedIn, Twitter, Instagram, and

Facebook, any matters that refer in any way to

Sensitech, Carrier and/or any of their employees,

representatives, affiliates, or agents.

Preliminary Injunction, ¶¶ 7 and 8.

In response to the entry of the preliminary injunction,

defendants have filed a motion to dissolve or modify the

original order (Docket No. 41). Defendants assert that: 1) the

injunction was entered against unrepresented parties, 2) the

injunction did not include findings of fact and conclusions of

law required of interlocutory orders and 3) it contains a broad

prior restraint prohibited by the First Amendment, i.e.,

particularly the provisions of Paragraphs 7 and 8. The Court

held a hearing on the motion on September 16, 2020.

II. Background

Sensitech is a Delaware corporation that manufactures and

sells products and services to monitor the quality, integrity

and security of its customers’ products during their transport

across a state or around the world. Mr. Alwash is an individual

who resides in Amsterdam, Netherlands and who is the Managing

Director, owner and sole-decision-maker of LimeStone. LimeStone

is a Dubai-based company that assists customers in the Middle

East by providing them with various devices to monitor their

products while they are being shipped.

In or about 2015, Sensitech and LimeStone executed a

Distributor Agreement (“the Agreement”), pursuant to which

LimeStone would buy products from Sensitech on credit, re-sell

them to end-users and then reimburse Sensitech. During the

business relationship, Sensitech submits that it disclosed

confidential information to LimeStone, including customer-

specific pricing, price lists, product development roadmaps and

Professional Services trade secrets, plans and documents.

The business relationship was terminated by Sensitech in

2018. It alleges that, at that time, LimeStone owed it

approximately $115,000 for products LimeStone had purchased on

credit. Sensitech contends that LimeStone has failed to pay its

debt or return the confidential information of Sensitech that

remains in the possession, custody or control of LimeStone.

In May, 2020, Sensitech brought an action in the

Massachusetts Superior Court to collect the debt and have its

confidential information returned. It also sought to enjoin

LimeStone from continuing to represent that LimeStone was an

authorized distributor of Sensitech’s products after the

Agreement expired and from attempting to sell Sensitech’s

products to end-users.

Sensitech alleged that Mr. Alwash and LimeStone engaged in

a variety of other activities designed solely to harm

Sensitech’s business. For example, Mr. Alwash allegedly posted

on LinkedIn a secretly recorded dinner conversation with a

Sensitech representative during which a variety of Sensitech’s

confidential information was discussed. Sensitech also asserts

that since it filed the action, Mr. Alwash published at least

three additional posts to his LinkedIn page stating that

Sensitech and its parent, Carrier, “is a criminal organization.”

Sensitech contends that the alleged conduct constitutes:

Breach of Contract by Limestone (Count I); Breach of Implied

Covenant of Good Faith and Fair Dealing by LimeStone (Count II);

Conversion (Count III); Violation of the Massachusetts Trade

Secrets Act M.G.L. Ch. 93 § 42A (Count IV); Tortious

Interference (Count V); Common Law Misappropriation (Count VI);

Violation of M.G.L. Ch. 93A (Count VII); and Defamation (Count

VIII).

The case was removed to this Court on diversity grounds in

late May, 2020.

A. Plaintiff’s Motion for a Preliminary Injunction

In June, 2020, Sensitech moved this Court to enter a

Temporary Restraining Order (“TRO”) and Preliminary Injunction

to prevent defendants Limestone and Mr. Alwash from 1) using or

disclosing any of Sensitech’s confidential information,

2) representing that either LimeStone or Mr. Alwash is an

authorized distributor of Sensitech’s products, or 3) attempting

to sell any Sensitech products; and to direct LimeStone and Mr.

Alwash 4) to return to Sensitech any of the company’s

confidential information in their control and 5) to remove any

postings of a recorded conversation involving a representative

of Sensitech on LimeStone’s LinkedIn page.

This Court held a hearing on Sensitech’s motion on June 4,

2020 (“the June hearing”). At that hearing, Mr. Alwash appeared

without counsel and presented no rebuttal in opposition to

Sensitech’s allegations or to the entry of a preliminary

injunction. He simply declared that this Court did not have

personal jurisdiction over him. After considering the written

and oral arguments, the Court found that 1) Sensitech had shown

a likelihood of success on the merits of its claims,

2) Sensitech will likely suffer irreparable harm in the absence

of injunctive relief, 3) the balancing of the harms weighs in

its favor and 4) a preliminary injunction would not have a

detrimental effect on the public interest, citing Jean v. Mass.

State Police, 492 F.3d 24, 26-27 (1st Cir. 2007). The Court

thereafter entered the preliminary injunction against

defendants.

III. Defendant’s Motion to Dissolve or Modify the Preliminary

Injunction Order

Defendants assert three grounds for vacating or modifying

the preliminary injunction entered against them: 1) the

injunction did not include findings of fact and conclusions of

law required of interlocutory orders, 2) the injunction was

entered against unrepresented parties and 3) it contains a broad

prior restraint prohibited by the First Amendment.

1. The Court’s Factual Findings

The Court agrees with defendants that, pursuant to Fed. R.

Civ. P. 52(a)(2), the order allowing the preliminary injunction

should more definitively spell out the reasons for its entry in

the first place. Accordingly, the Court adopts the

uncontradicted reasoning provided by Sensitech in its supporting

papers filed with its original motion, namely that it has shown

a likelihood that it can prove that defendants have:

1) breached the Distributor Agreement by

misappropriating Sensitech’s confidential

information, disclosing it publicly and refusing to

return it to Sensitech,

2) continued to represent to the public in the Middle

East that LimeStone was an authorized distributor of

Sensitech’s products after the expiration of their

Distributor Agreement,

3) posted on LimeStone’s LinkedIn page a

surreptitiously recorded conversation containing

confidential information of Sensitech and

4) published, or caused to be published, additional

posts on LinkedIn calling Sensitech “a criminal

organization” in an attempt to harass, defame and

tortuously interfere with Sensitech’s business.

The Court also concludes that Sensitech has demonstrated

that if LimeStone and Mr. Alwash are not enjoined, they would be

free to continue to use and disseminate Sensitech’s confidential

information and post clearly untruthful and defamatory

statements relating to Sensitech, making manifest and

significant the risk of irreparable harm to Sensitech if no

injunction is entered.

Finally, the Court agrees with Sensitech’s unrebutted claim

that LimeStone would not suffer any irreparable harm if enjoined

because the requested injunction simply prevents it from

wrongfully using or disseminating Sensitech’s confidential

information.

2. Unrepresented Parties

With respect to defendants’ argument that this Court should

dissolve the preliminary injunction on the ground that it was

issued against unrepresented parties, the Court is underwhelmed.

Pro se defendants are not immune from preliminary injunctions,

especially where, as here, the court held a hearing on the

injunction and gave defendants ample notice of that hearing and

an opportunity to be heard. Cf. Cok v. Family Court of Rhode

Island, 985 F.2d 32, 34 (1st Cir. 1993) (vacating a preliminary

injunction entered against a pro se litigant because the court,

without providing notice to the litigant that an injunction

could be entered against him, had sua sponte enjoined the

litigant from filing any pro se actions in the district court).

3. Prior Restraints on Speech

Although there is a “strong presumption that prior

restraints on speech are unconstitutional,” a prior restraint

may be imposed when it furthers “the essential needs of the

public order.” Sindi v. El-Moslimany, 896 F.3d 1, 31-32 (1st

Cir. 2018) (quoting Carroll v. President & Comm’rs of Princess

Anne, 393 U.S. 175, 183 (1968)); see Kingsley Books, Inc. v.

Brown, 354 U.S. 436, 441 (1957) (“The phrase ‘prior restraint’

is not a self-wielding sword.”).

To further the essential needs of the public, the prior

restraint must be “precisely tailored both to meet the

exigencies of the particular case and to avoid censoring

protected speech.” Id. at 32. If the party seeking the

injunction can establish that

the evil that would result from [the offending

publication] is both great and certain and cannot be

mitigated by less intrusive measures,

a prior restraint may be imposed. CBS, Inc. v. Davis, 510 U.S.

1315, 1317 (1994); see Sindi, 896 F.3d at 32.

To correct any undue censorship imposed upon defendants by

Paragraphs 7 and 8 of the original preliminary injunction and

yet maintain protection of Sensitech from irreparable harm, the

Court will modify those paragraphs to restrain the defendants

from posting on social media matters that

are clearly false, defamatory or designed to inflict

harm on Sensitech, including statements that

represent Limestone as an authorized distributor of

Sensitech’s products, that imply Sensitech is a

“criminal organization” and/or that disclose any

confidential information of Sensitech or Carrier.

ORDER

In accordance with the foregoing, defendants’ motion to

dissolve or modify the preliminary injunction order (Docket No.

41) is ALLOWED, in part, and DENIED, in part.

The preliminary injunction entered by the Court on June 5,

2020, (Docket No. 23) is hereby vacated and replaced by the

“Amended Preliminary Injunction” entered this date.

So ordered.

/s/ Nathaniel M. Gorton

Nathaniel M. Gorton

United States District Judge

Dated September 17, 2020