Plainte enregistrée le 29 octobre 2012
Conditions de Participation
Conditions de participation type en 2007.
Audition 1er novembre 2012
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IN THE SUPERIOR COURT OF THE STATE OF WASHINGTON
IN AND FOR THE COUNTY OF THURSTON
JZK, INC., a Washington corporation,
Plaintiff,
vs.
VIRGINIA COVERDALE,
JOHN DOES 1-20 and JANE DOES 1-20,
also known as ENLIGHTEN ME FREE,
Defendants.
No. 12 – 2 – 02241 – 8
______________________________________
VERBATIM REPORT OF PROCEEDINGS
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BE IT REMEMBERED that on the 1st day of November, 2012, the above-entitled and numbered cause came on for hearing before the Honorable James J. Dixon, Judge, Thurston County Superior Court, Olympia, Washington.
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A P P E A R A N C E S
For the Plaintiff: Andrea H. McNeely
Attorney at Law
– and –
Eric Daniel Gilman
Attorney at Law
Gordon Thomas Honeywell, LLP [adresse]
– and –
Jeffrey C. Grant
Attorney at Law [adresse]
For the Defendant Virginia Coverdale:
Shawn Newman
Attorney at Law [adresse]
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I N D E X
Case Introduction
Court addresses request of media
Court advises counsel of previous association with Mr. Flick (JZ Knight)
Argument by Mr. Grant
Argument by Ms. McNeely
Argument by Mr. Newman
Rebuttal by Mr. Grant
Oral Ruling of the Court
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November 1, 2012 Olympia, Washington
MORNING SESSION
Department 8 Hon. James J. Dixon, Presiding
APPEARANCES:
Virginia Coverdale, Defendant, with her Counsel, Shawn Newman, Attorney at Law;
client representative of JZK, Inc., Michael Wright; Jeffrey C. Grant, Andrea H. McNeely, and Eric Gilman, Attorneys at Law, representing the Plaintiff, JZK, Inc.
Kathryn A. Beehler, Official Reporter
–o0o–
THE COURT: Let’s go on the record now, please. The matter before the court is JZK, Inc., a Washington corporation, as Plaintiff, v. Virginia Coverdale, John Does 1 through 20, Jane Does 1 through 20, AKA Enlighten Me Free. This is Thurston County Superior Court Cause No. 12-2-02241-8. I would appreciate the parties identifying themselves for purposes of the record and, furthermore, advising the court as to the identity of their respective clients.
Mr. Newman?
MR. NEWMAN: Your Honor, Shawn Newman. I represent the Defendant Virginia Coverdale.
THE COURT: Thank you. And who is on your left?
MR. NEWMAN: Virginia Coverdale.
THE COURT: Thank you. And Mr. Grant?
MR. GRANT: Good morning, Your Honor. Nice to meet you. Jeffrey Grant of Skellenger Bender. I am here on behalf of JZK, Inc. Seated at counsel today with us today is a client representative, who is Michael Wright.
THE COURT: Thank you. And Ms. McNeely?
MS. MCNEELY: Andrea McNeely, Gordon Thomas Honeywell, representing JZK, Inc. And to my right is Eric Gilman with my firm.
THE COURT: Thank you. There are and a couple of preliminary matters that are worthy of and, in fact, need attention. The first is, as a preliminary matter, there has been a request of the court to allow still photographs. I had advised the gentleman who made the request that I would confer with counsel. What is the position of the parties? Mr. Grant?
MR. GRANT: No objection to that, Your Honor. Thank you.
THE COURT: Ms. McNeely?
MS. McNEELY: No objection.
THE COURT: Thank you. Mr. Newman?
MR. NEWMAN: No objection, Your Honor.
THE COURT: To the gentleman who made that request, you are on the other side of the bar, so you are allowed to take photographs as long as you stay on that side of the bar. And « the bar » is that long separating fence between the pews and the well of the courtroom.
MR. GRANT: Your Honor, there’s only one —
THE COURT: Thank you for asking, by the way.
MR. GRANT: Thank you, Your Honor. There is only one condition on that. The still pictures of me they use have to be flattering.
THE COURT: And the second issue that needs to be at least placed on the record is that I asked my judicial assistant to advise counsel in writing of a relationship that I previously had with a close associate of the plaintiffs. And I see from a letter in the file that she did so, or at least attempted to do so. And before I turn to the parties to get their input or response to that letter, I will place the issue on the record. The parties have now been advised or are in the process of being advised that in June of 2008, I represented a close associate of Ms. Knight’s in Yelm Municipal Court. That was in June of 2008. And during my representation of that individual, whose name is « James Flick, » and if my memory serves me correctly or my brain power serves me correctly,
Mr. Flick is present in court. Is that accurate?
MR. WRIGHT: No, sir.
THE COURT: You look almost like him. He’s not here. I apologize for misidentifying you.
Mr. Flick is not present.
I represented Mr. Flick in a misdemeanor case. During my representation of Mr. Flick, I met with Ms. Knight for 45 minutes, at most, probably closer to a half an hour. And my meeting with her was in preparation for a motion to dismiss that we, « we » meaning the defense, filed in that misdemeanor case. And that motion was later granted without Ms. Knight’s testimony or further participation required. So I turn first to counsel for plaintiffs. Do either Mr. Grant or Ms. McNeely have any objection to my presiding over this case?
MR. GRANT: No, Your Honor. We received the letter this morning timely. Thank you. And we did respond in writing and indicated that we have no objection.
THE COURT: Thank you. Ms. McNeely?
MS. McNEELY: No, Your Honor. No objection.
THE COURT: Thank you. Mr. Newman?
MR. NEWMAN: Your Honor, we did receive the letter. We have no objection.
THE COURT: Okay. Thank you, all. And the court does not find any independent basis to recuse. I do not believe this is a conflict of interest. But as the lawyers know, it is incumbent upon the court to at least place that issue on the record to allow the parties an opportunity to confer with their respective clients and to ultimately make a decision whether they wish to exercise their statutory right to file an affidavit of prejudice.
Okay. Moving on to the merits of this case, the court is in receipt of and has reviewed, over the past 24 hours or so, certain pleadings, specifically, the complaint for breach of contract and injunctive relief filed October 29 and a response to the motion for temporary restraining order that I believe was filed some time this morning, Mr. Newman. Yes. It was filed very early this morning at 8:07. I received a bench copy of that responsive pleading shortly thereafter, and I have had an opportunity to review its contents. So the matter before the court is the plaintiff’s motion for injunctive relief, specifically, a temporary injunction. And I will turn first to Mr. Grant.
MR. GRANT: Thank you, Your Honor. And shall I come —
THE COURT: Would you, please?
MR. GRANT: I would be happy to.
THE COURT: Thank you.
MR. GRANT: Thank you, Your Honor. Good morning. Jeffrey Grant on behalf of JZK, Inc. First, let me start by acknowledging and thanking the court for it’s sensitivity with respect to the issue with Mr. Flick. It was helpful to note that that was an issue, but clearly it is not, as the parties have indicated.
You’re right. We’re here for the plaintiff’s request that the court issue a temporary restraining order. There are a couple of items about the request that we’ve made that I think are worth highlighting. First, it’s a very narrow and limited remedy that we’re seeking. It’s narrow in time, of course by the rule not to exceed 14 days. And all we’re really asking the court to do is to impose the equivalent of a timeout.
We’re asking the court to tell everybody that they should just take a timeout and go to the place where they were before the wrongful conduct that we’ve identified in the complaint in the motion began to occur. The timeout relief that we’re asking for, I think, is predicated on two things, both of which have been established by any level of proof with which we are supposed to present to the court today.
First, the defendant has promised in writing not to distribute the materials that she received from the Ramtha School of Enlightenment, RSE. It’s one of the exhibits to the declaration that was submitted in support of the motion. She promised not to distribute the materials that she received from RSE.
The second thing is, she has. It appears to have begun in late September of this year. It’s continued through October. And as the information continues to unfold on a daily basis, it’s clear that the defendant will continue to breach her written promise not to distribute this information unless the court intervenes and has the parties go back to where they were before this wrongful conduct started.
So as a consequence of that, because of our concern about the irreparable harm that will occur by this continued distribution of materials, we’re asking the court to put a temporary hold on everything.
It’s now apparent to us, in looking at the written response to the motion that I received from counsel a few minutes before the hearing started, that there are a number of defenses that they intend to raise to the written promise of not to do this. We are prepared to deal with those, and we will deal with those at the motion for preliminary injunction. We’re suggesting that that occur sometime during the week of November 12th.
In the meantime, there are a couple of other things that we would like the court to allow us to do. We’d like the court to, first of all, enter an order that I guess I would characterize as a spoliation order; that is, that the defendant would not destroy or distribute further any of the materials that she already has that would be covered by the agreement that she has with the school.
Second, we would like to be able to take the deposition of Ms. Coverdale, the defendant, on an expedited basis — and I might add, Your Honor, without prejudice to our ability to conduct her deposition after the preliminary injunction hearing, in the event we need to question about other information that might go more to the merits of the case.
THE COURT: So the purpose of the deposition you are requesting to be conducted prior to the next hearing would be limited to questions with respect to the propriety or request of temporary relief?
MR. GRANT: Yes, sir.
THE COURT: Is that accurate?
MR. GRANT: Yes, sir. That’s — that is a good summary.
THE COURT: Okay.
MR. GRANT: There’s another person not a party, Elizabeth Rule, R-U-L-E, or Ann Ketterer, K-E-T-T-E-R-E-R. And I’m not sure which is the correct name. But I believe it is the same person. That is a nonparty witness, but somebody that we think is — may have information relevant to the case that we have.
And other than that, Your Honor, it seems to us that what we have presented to the court is reasonably straightforward. There are really two things that we have: One, a written promise not to do something, and then since then, a reasonably clear and I think uncontested breach of that agreement.
As I said, there may be defenses to that. But at the moment, there are no valid ones that would allow this conduct to continue. And fortunately, the civil rules provide a remedy when we have this situation where it may need further briefing, further testimony, further analysis to make decisions longer term. But in the immediacy of what we have now, there is a clear demonstrated violation of a right, with an express intent to continue to do so, until the court tells her to stop. And we’re asking you to do that today.
I was — I think « intrigued » would be the word, in reading the end of Mr. Newman’s brief. His quotation of Mr. Burke, I think, applies quite well to what it is that we’re asking the court to do today. Edmund Burke, of course, said, « The only thing necessary for the occurrence of evil is for good men to do nothing. »
And what we’re asking the court today is to do something, even on a temporary basis, on a limited basis, to return us to where we were back before the middle of September of this year, and then set a hearing — and make this stop for now, and then give us a chance, all, to come back on the time period prescribed by the rule and have a more developed hearing to see whether the injunctive relief should continue beyond 14 days.
And unless you have any other questions,
Your Honor, I have nothing further to say.
THE COURT: I do not. Thank you, Mr. Grant.
MR. GRANT: Very well. Thank you.
THE COURT: Ms. McNeely, do either you or Mr. Gilman want to weigh in on this issue?
MS. McNEELY: Just very briefly, Your Honor.
THE COURT: Yes.
MS. McNEELY: Mr. Grant mentioned the harm. And I think here the harm is, we have a proprietary material. And if it’s allowed to continue to be disseminated, you can’t at this point put the horse back in the barn. So, you know, what we’re asking the court to do is what Mr. Grant mentioned, which is to put us back to where we were before the horse was let out of the barn. And we can’t continue to let more proprietary material out without harming the school in releasing proprietary information to the public.
THE COURT: Thank you.
MS. McNEELY: Thank you.
THE COURT: Mr. Newman?
MR. NEWMAN: Your Honor, Shawn Newman for the Defendant, Virginia Coverdale. She is not part of nor do I represent this entity called « Enlighten Me Free. » I only represent Ms. Coverdale for the purposes of this hearing.
With respect to Mr. Grant’s comments, I think it is appropriate to ask, what are they looking for. They are looking to have the court retaliate against a whistleblower who has — based on her own paperwork, has reported numerous fire, health, and safety violations. That’s what they are here for.
They want to retaliate. They want to slap my client down, which as illustrated in my response brief is a violation of a very specific statute in the State of Washington, which protects people like my client and others who have the temerity to stand up to power, especially to an institution — let’s put it that way — like this school, which according to the evidence, spews hate.
The — the disk, the CD they want you to — they’ve showed to you has the following quotes. You’ll see this. They have JZ Knight saying the following:
« Mexicans breed like rabbits. They are poison. Every God damned Mexican family is a Catholic. All the Mexicans are not worthy of conscious thought. All gay men were once Catholic women. We will » — and then she says, « We will come on you in a terror. »
Now, they base their TRO on this agreement. A couple of things. First of all, my client did not receive this information from the school. Secondly, if you look at the agreement, it is — it’s quite interesting. But it has a very broad definition that says, « Anything you believe you received from Ramtha, whether in a dream, a vision, or from some disciple, or any other source, you cannot communicate. »
Now, what would that mean? If you think about it, what about these fire safety and health violations? Would that be — should the court allow this multimillion dollar for-profit entity to come in and gag people that are reporting legitimate violations, not only of health, safety, and fire violations, but employment security issues and things like that.
Let me add, Your Honor, I got this case yesterday. And I know Mr. Grant has talked about the need to properly prepare for the hearing and things like that. And we haven’t — we’ve not waived any defenses.
I would also add that the — that their request for a — to put this on a rocket docket for a deposition is — is intended to intimidate. It’s part of the — it’s part of the standard bag of tricks that bullies use in litigation. And as you may — I’m sure you are aware, the anti-slap statute was intended to stop that activity.
That is what this is about, Your Honor. As co-counsel indicated, the cat’s already out of the bag. The problem here and why this is such an emergency for the plaintiff is because you have politicians stumbling all over themselves to give back the money. This has caused a huge embarrassment for the school and for Ramtha’s followers. That’s done. That’s out. And that’s the 600-pound gorilla in the room. And that’s the reality.
They wouldn’t be here. You ask yourself, why would you want to take on someone who — and — who is a former member of the school, who is pointing out these health, safety violations? Why would you do that?
You know, and the other thing, Your Honor, this isn’t an emergency. You look at their own paperwork. This — this activity’s been going on for quite a while. They cite — the first exhibit is a September 10th, 2012, posting that they consider offensive. And what’s on the top of that posting? It’s about health, safety, and fire violations.
That’s what it’s about. So what he’s asking you to do today is not simply protect what they characterize as some sort of a proprietary interest, which we disagree with. What they are asking you to do today is shut down a whistleblower who has the guts to point out problems at the school. And I have a stack of complaints they filed over time — I didn’t have time to submit it to the court; I just got it from my client — everything from issues concerning children to issues concerning health issues and fire issues.
Your Honor, the burden is on — obviously on the plaintiffs to make this TRO. And as you are aware and I put in my briefing, they have to show that there is a — a threat of immediate and irreparable injury, loss, or damage, right now. They can’t do that. They — in fact, they say we can’t calculate it. We don’t know what the damage is until we get engaged in this rocket docket intimidation game with my client. That’s, to me, a — they lose on that alone. They cannot prove any threat of imminent irreparable damage or loss.
Moreover, Your Honor, as part of the TRO, you look at the likelihood that the plaintiff will ultimately prevail at trial, whether they have a clear and equitable legal right. I’ve cited case law about the contract itself is unconscionable. Any contract, Your Honor — think about it.
Any contract that would compel an employee or follower to shut their mouth about illegal activity or perceived — or for right or wrong, you know? Whether — at the end of the day, if the person is correct or incorrect, any contract that gags employees or followers like that — and this is what this contract does. Very broad. Very broad. That’s an unconscionable contract in violation of public policy. So I think they lose on that ground.
To say it’s okay is going to gag all — anybody else. You could put this in a contract. This is not — we can’t — this is — we are in a civil society. We live in a society that wants to promote people who have the guts to complain to government about illegal activity. You know, we live in a society that should not tolerate these kind of bigoted statements by the school and the leader of the school.
Now, you know, you ask yourself, what is this proprietary information they’re protecting? You know, I look at the contract. And it talks about — it uses the term « information and techniques. » That’s what the contract talks about.
So they’re upset that it’s been disclosed that the information and techniques that they are talking about include these threats against almost every group you could name, Catholics, Jews, vegans, you know? And these are — these are — should be taken very seriously, you know? Do you have a right — would you gag a person who is aware of a threat — of a terrorist threat based on a contract? And I suggest, absolutely not. That’s a violation of our state slap law, violation of our right to free speech. Because that’s what this is about.
This is about prior restraint. They want you to shut this — these people down, because they are in political hot water. Finally, the politicians who have benefitted from the largess of the school and JZ Knight are realizing who she really is. And they want to disassociate from her as fast as possible. And what they are here to do is to put a lid on that. They want to retaliate for that.
As co-counsel indicated here, the cat’s out of the bag. There is no threat of imminent, immediate harm. There’s no threat of imminent immediate harm. There’s no reason this case has to be put on a rocket docket to have these intimidating depositions. Because I want to take JZ Knight’s deposition. You want to do that? Let’s do it. Let’s do it. I’ll take her deposition. But let’s do it per the rules, so that it’s done in a timely, conscientious manner. I would just add, Your Honor, that as you know, the TRO is an extraordinary remedy. I’ve already outlined in my briefing that there is — that this disclosure — that they’re thinking is going to happen or may happen or has happened, the cat’s out of the bag. Whatever damage they claim has occurred is already done.
But this is — this is clearly an effort to intimidate a whistleblower under — and this is prohibited by the state constitution, by the First Amendment, and by our state’s anti-slap law.
Your Honor, if you have any questions, again, I can answer any questions that you may have.
THE COURT: I don’t. Thank you, Mr. Newman. Mr. Grant, you represent the moving party, so I’ll allow you an opportunity to offer any rebuttal argument you may have.
MR. GRANT: Thank you. I appreciate that, Your Honor. Thank you. So a couple of things. Mechanically or procedurally, let’s be clear about the state of the record. The evidentiary record before the court is limited to the declaration of Mr. Wright with the exhibits that were attached to that. There’s no evidence that’s been submitted by the defendant that would contradict that. So to that extent, the factual determinations for this court are relatively easy.
A couple of points have been raised, and if I may, I’ll probably just try to run down the order that I was listing them, as opposed to some more attractive quilt weaving them together. There have been a number of arguments raised about potential contractual defenses to this particular agreement. That may be. We are prepared to address those. I think it’s helpful to recollect, though, that the contract that’s before the court in the record has been signed by thousands of people, probably tens of thousands of people, and it has never been challenged, has never been questioned, has never been tipped over. So this agreement is well in place and has been very effective for both sides of the party on that particular document.
I think it’s important to remember, too, that what we’re talking about here is information of the school, not the speech of the defendant. We’re not trying to shut the defendant down. We’re not trying to make her limit her ability to say things, her ability to use social media or newspapers, letters to the newspaper editorials. She can continue to say what she wants to say. What she can’t do is use the material that has come from the school. That’s what the agreement is about.
So if the defendant wants to complain about health and safety violations or be critical of the school or call it out or bring it down or whatever her agenda might be, she’s free to do that. And an order by this court will not limit her ability to say what she wants.
What we’re asking the court to protect is speech of somebody else, the school, which the defendant agreed not to use. And she’s doing that. Now, I — it’s been mentioned that, well, the cat’s out of the bag. There are more cats. This is part of the problem.
THE COURT: And that would — I suspect you are about to answer a question from the court — a question the court intends to ask you, which is, What is the substantial harm that would result in continued disclosure of this sort?
MR. GRANT: Well, first of all, it isn’t continued disclosure — the continued disclosure isn’t limited to what’s already been released. The particular segment that we’re talking about, I think, where the smaller version came from, the one that counsel likes to discuss the details of, is about a 20-minute clip of what really is an 11-hour video.
So we’re trying to limit the continued disclosure of other materials. And I think the record is clear that the defendant continues to do that through the use of the electronic voices that she’s been able to land on.
So it isn’t just the one that’s been out. It’s the one that it — it would be continued footage from the same session. And other materials. I mean, we don’t really know exactly what it is that she has and what she intends to release. We know that she’s disseminated information that’s covered by the agreement that she promised not to distribute. We know that she claims to have more and wants to distribute it. And we are trying to stop that.
I think it’s also helpful to point out that an order from this court, at least temporarily, recognizing the validity of the claims that the information may not be used is of assistance in working with the ISP entities like YouTube in having the information taken down from the internet that’s already been posted. So this is another reason why this is important.
This injunctive relief helps us historically, and more importantly, helps us going forward, until at least we can have the opportunity for the preliminary injunction.
Did that answer your question, Your Honor?
THE COURT: It does.
MR. GRANT: All right. But, you know, back to the theme of this is the school’s information. We’re not talking about dreams here. We’re talking about tactile, actual documents and web material and video that has been released. This is tangible information and tangible product that we’re trying to stop. This is where the agreement comes into play in this particular situation.
The idea that it’s necessary for the defendant to use this information and that she should be excused from her promise not to disclose it because of the health and safety violations that she claims to report is not well taken. If the plaintiff wants to complain — pardon me.
If the defendant wants to complain about safety issues, health issues, employment violations, then she needs to go to the governmental agencies that are responsible for that, not the internet, not YouTube.
That’s not what this is about. She’s not trying to report anything other than to disclose this information and try to embarrass the school and to try to embarrass JZ Knight. And these are — she has other opportunities to do that if she wants. What the agreement says is that you can’t use the information that comes from the school that you’ve agreed to keep confidential.
And on the alleged violations, let me just point out that to the extent that there have been allegations made, the respective municipalities and governmental agencies have all responded to that.
And if we need to get into that particular issue, we’re prepared to demonstrate to the court the responses from the regulating agencies, not the YouTube audience.
As I said at the beginning, this is not really an attempt to stop the defendant from saying what she wants to say of her own accord. All we’re asking is that she not be allowed to use information that she has promised not to do. And that type of relief — that type of notion is not particularly unique.
There is a very wide avenue through the law that protects the ability of people and entities like the school to have information that they distribute, that they make, that they market, that they sell to others, and then have a limitation on its use.
Here, the defendant agreed to do that. If I can get the benefit of the product this school has, then I promise not to distribute it, forever. And she’s breached that.
We’re asking the court not to impair her speech but to protect ours. Let’s have a temporary timeout TRO, and then let’s come back in 14 days and address the defenses that have been raised this morning.
THE COURT: Thank you.
MR. GRANT: Thank you.
THE COURT: I’m ready to rule. There is, of course, some applicable law that applies to the immediate issue before the court, and that applicable law includes the civil rules, specifically Civil Rule 65(b), and the state law which is codified in RCW 7.40.020. And I make those references not necessarily to the lawyers involved in this case, because the lawyers are well familiar with the purposes behind that law and the specific language in that law. So I make those references and place this information on the record really for the purpose of, (A) creating a record on this case, and equally importantly, at least to the court, (B) to advise the public, not necessarily the people who are here in court this afternoon, but to the public in general, that the issue before the court is not the merits of this case.
I’m not asked to decide at this particular hearing whether the complaint filed by the plaintiff is dispositive – of course it’s not – whether it is more valuable or more persuasive than any responsive pleading from the defendant. That issue, of course, is not before the court. This is a lawsuit that was filed within a matter of days ago.
I fully anticipate, based upon the nature of the lawsuit, the one pleading that the court has received in response to the complaint, and what the parties are stating verbally to the court this afternoon, that this case will be hotly litigated and contested and argued by very competent, capable lawyers from both sides, and perhaps also from sides that have yet to weigh in, and that this case will not resolve any time in the immediate future.
The issue before the court is whether the court should maintain the status quo until the merits of this case can be heard. That is the language of decisions that have been reached by our higher courts, the Courts of Appeal and the State Supreme Court. And the reason I say that is, despite the lines drawn in the sand here from the lawyers, this is a pretty simple issue, to me. And frankly, with no disrespect to the defendants here, I haven’t really wrestled with the issue. It is pretty straightforward.
In the court’s opinion, the plaintiff is entitled to temporary relief, is entitled to a temporary injunction, solely for the purpose of maintaining the status quo until these issues can be fully resolved, until all of the sides have an adequate, ampleopportunity to be heard, until all sides have adequate, ample opportunity to present evidence and to argue the law.
Mr. Newman has ably argued on behalf of his client that there are constitutional issues here that his client may have that constitute a constitutional defense to the complaint. That may or may not be so. And Mr. Newman, on behalf of his client, asserts that the intention or goal of the plaintiff is some sort of retaliation against a whistleblower. That may or may not be the case. That is not for me to determine today.
I am not taking into consideration any position set forth or argued today by the defendant that the entry of an order establishing temporary relief would constitute some sort of restraint or prohibition against what he refers to as a whistleblower. That is not the court’s intention. That is not what I am going to do. But my interpretation of the statute that I’ve cited, the court rule that I’ve cited, and the language set forth by our State Supreme Court in cases cited by at least one of the parties, specifically, Northwest Gas Association at 141 Wn. App., the Tyler Pipe case, which is a seminal case, frankly, on this type of an issue, more specifically, the issues that the court is required to take into consideration when a party is requesting temporary relief, weigh in the favor of the plaintiff.
Prior to entering an order granting temporary relief, this court is required to make a finding that, There is a likelihood that the plaintiff will eventually prevail at a trial on the merits by first showing that the plaintiff has a clear legal or equitable right. Clearly the plaintiff does in this case;
That the plaintiff reasonably fears that that right would be invaded continued disclosure. Clearly, in the court’s mind, that applies, as well; And that the disclosure would result in substantial harm. The last factor I had some questions about, and Mr. Grant answered those questions to my satisfaction. And specifically, Mr. Grant has argued persuasively to this court that there is more information potentially available to the defendant here that could be posted on an internet site. And if so, that that posting or distribution would result in substantial harm to the plaintiff. So I disregard. To a certain extent. The arguments made by the defendant that the cat is out of the bag. And I accept, in the alternative, the argument from the plaintiff that about 1/20th of the cat is out of the bag, or at least that there is some argument in support of that consideration.
So I will grant the request asking for a temporary restraining order. And I will grant the request of the plaintiff to enter what is commonly referred to as a spoliation order that precludes the defendant from destroying or further distributing any items that may be considered as evidence in this case.
I am not convinced that there is any immediate need for the plaintiff to conduct any deposition of the defendant, so I will deny that request. And I further deny any request of an expedited deposition of Ms. Rule and/or Ms. Ketterer.
I will ask the parties to consult with my judicial assistant to come up with a date sometime within the next 14 days for a hearing on the merits on this case. My calendar is controlled by my judicial assistant; otherwise, I would set a date here in court. And I will sign an order to that effect.
MR. GRANT: Your Honor, I have a proposed order. It is similar to the order that was submitted with our papers. May I hand it up?
THE COURT: Would you provide Mr. Newman with an opportunity to review it?
MR. NEWMAN: Your Honor, I —
MR. GRANT: Yes, I would. And let me just make a couple of comments about the proposed order, if I may, while we are waiting to land on a date. If we turn to page 3 —
THE COURT: By the way — and I apologize for interrupting, Mr. Grant. I am not requiring the plaintiff to post a bond. I do not see any need —
MR. GRANT: Very well.
THE COURT: — for the imposition of a bond. And I make that decision based upon the court rule that I reviewed prior to taking the bench this afternoon.
MR. GRANT: Yes, sir. And that would be paragraph No. 4 on page 3. That was one of the items that I wanted to address. In paragraph 5, I believe that the court has denied our request for the relief in paragraph 5(a), the deposition of the defendant.
THE COURT: Yes.
MR. GRANT: I would like to at least address specifically the issue of the relief requested in paragraph 5(b), which is a document production. We didn’t address that specifically. The court didn’t address that specifically. But we’ve asked the defendant to at least make a document production. And we can be sensitive to the date.
MR. NEWMAN: Your Honor, I would just say that this should proceed pursuant to the court rules, and if they want to make a formal request for production of records, they can do that. I will respond per the court rules. You don’t make the request in open court.
THE COURT: And even if you do make the request in open court, I am inclined to deny that request. I think that the discovery in this case may occur, for lack of a better term, on a normal discovery route and schedule.
MR. GRANT: Yes, sir.
THE COURT: But I also make that decision taking into consideration that this order will preclude the defendant and/or her agents, I assume — yes, agents, employees, and all other persons in concert with them from destroying or otherwise disseminating any of the tangible items or intangible items that are included in paragraph 2 of the order. I hope that makes sense to the lawyers.
MR. GRANT: It does, Your Honor. Thank you. So I think the only changes that we’ve talked about so far — the court is lining out or striking paragraph 4 on page 3, all of paragraph 5, which covers pages 3 and 4 —
THE COURT: Correct.
MR. GRANT: — and then I believe —
THE COURT: And a show cause date; right?
MR. GRANT: Yes, sir. Well, I believe, Your Honor, if I may —
THE COURT: Yes.
MR. GRANT: — just to go back to the beginning, page 1, as a matter of completeness, it’s probably appropriate for the court to write in a third item, which would have been — and I forget the exact title, but the written submission that came from counsel.
THE COURT: Yes. And I appreciate you bringing that to my attention. So one more time, as I mentioned earlier, I would appreciate the lawyers having a joint conversation with my judicial assistant for the sole purpose of establishing a show cause date for this issue to be fully considered. And I will hand down the order that I have signed for filing.
MR. GRANT: And is it the last page that just needs to be completed, Your Honor, with the date?
THE COURT: It is.
MR. GRANT: Okay. Thank you very much, Your Honor. And thank you for considering our motion during what is normally court time, particularly for the staff. We know how important that is.
THE COURT: And before we go off the record, I wish to further extend my appreciation to the lawyers involved in this case who — I don’t want to say too much, especially at this stage in the proceedings. But the briefings and the pleadings submitted by all the lawyers involved in this case are directly on point, responsive, illustrative, and very helpful to the court. Thank you.
MR. GRANT: Thank you, Your Honor.
MR. NEWMAN: Thank you, Your Honor.
THE COURT: You are welcome, and we are in recess.
(Conclusion of the November 1, 2012, Proceedings.)
Audition du 14 novembre 2012
Suite Affaire No. 12 – 2 – 02241 – 8
I N D E X
Description
Plaintiff’s motion for preliminary injunction:
Argument by Mr. Grant
Argument by Mr. Newman
Rebuttal by Mr. Grant
Oral Ruling of the Court
.
November 14, 2012 Olympia, Washington
AFTERNOON SESSION
Department 8 Hon. James J. Dixon, Presiding
APPEARANCES:
Virginia Coverdale, Defendant, with her Counsel, Shawn Newman, Attorney at Law;
client representative of JZK, Inc., Michael Wright; Jeffrey C. Grant, Andrea H. McNeely, and Eric Gilman, Attorneys at Law, representing the Plaintiff, JZK, Inc.
Kathryn A. Beehler, Official Reporter
–o0o–
THE COURT: Be seated, please. Good afternoon.
MR. GRANT: Hello, Your Honor.
THE COURT: Welcome. The matter before the court is Thurston County Superior Court Cause No. 12-2-02241-8. JZK, Inc., Plaintiff, vs. Virginia Coverdale, Jane Does, AKA Enlighten Me Free. Specifically, the motion before the court is the plaintiff’s motion for injunctive relief, preliminary injunction.
In anticipation of this motion, the court has reviewed the memorandum in support of the preliminary injunction filed by the plaintiffs. A bench copy was provided to the court early yesterday morning. I have reviewed that pleading. I also received as an attachment some declarations or affidavits. I have reviewed those, as well.
Yesterday afternoon, the defendant filed a responsive pleading, which I have here in my possession. It was filed at 4:09. A bench copy was not provided for me until this morning. I have been in trial today, but I did have an opportunity to review the responsive pleading filed by Mr. Newman on behalf of his client, and I did that during a break in my trial.
I then received the response to the defendant’s pleading, entitled, « Plaintiff’s memorandum regarding restraints on speech. » That was filed at some point today. I received it at about noon and reviewed that pleading about 20 minutes ago.
So, as the parties are aware, the issue before the court is the plaintiff’s motion for preliminary injunction. And because it is the plaintiff’s motion, I’ll hear from Mr. Grant and/or Ms. McNeely, whomever wishes to proceed first.
Mr. Grant, good afternoon.
MR. GRANT: If I may, Your Honor, good afternoon to you. And if I may just take a moment to make sure that our team over here is introduced to the court. Seated at the end, of course, is Mr. Wright who is here on behalf of our client. And then my co-counsel —
MS. MCNEELY: Andrea McNeely and Eric Gilman.
MR. GRANT: Who are still panting from the pace of the paper that the court has been experiencing by the small fraction of the effort on — by both sides.
THE COURT: Yes. I appreciate that.
MR. GRANT: Thank you, Your Honor. If I may. So indeed, like Yogi Berra once equipped, this seems like déjà vu all over again. We are here less than three weeks from when the court initially considered this matter, and I requested at that time for a temporary restraining order. It was granted for the same reasons that apply today. And in terms of the evidentiary record, Your Honor, I think things are unchanged from when we were here before seeking the more temporary relief.
Today we’re simply seeking to extend the relief to the time we have a trial on the merits. And by the same evidentiary record — I guess I would like to recap what I think are the highlights. And the highlights are important that way, I think, for two reasons.
First, the record is both unambiguous and undisputed; that is, that the defendant has signed the contract that contains the conditions of participation wherein she acknowledged the fact that she could receive material from the school, and if she did, she would agree to keep it to herself, to not distribute it to others. She agreed not to distribute it to others, and she has. In addition, she has indicated that she continues to intend to do so unless this court issues the relief that we’ve sought today.
And with respect to what she has expressed that she intends to do, I think there’s at least two things that are important to us. First, the material that she’s already released. It’s clear that she intends to release that again, if she can.
And secondly, there’s material we know that she has that she has not yet released, and as near as we can tell by her statements, it’s a rather substantial volume of material, between 25 and 30 hours of information that she also intends to release.
We also know, at this stage of the process, that it will be difficult for our client to measure or calculate its damages if the damage doesn’t stop here today. We may be able to address that later. We may be able to calculate the loss. But we know that, at least as of today, that’s going to be difficult for us to do. And it’s one reason why injunctive relief is such an appropriate remedy.
Now, I said that those three undisputed facts, unequivocal facts, are important, not only because they are undisputed, but because they help lead us to where it is that the court needs to take us. Those facts tell us and establish that our client, JZK, Inc., has a clear legal or equitable right. It’s also quite clear that there’s been a breach of the right, an invasion of and an injury to that right by the defendant’s brazen conduct in releasing publicly, through all of the tools of the social media at her disposal, to breach that agreement.
As of today, we know that damages may not be impossible to measure, but they are certainly difficult. And we know that injunctive relief is both appropriate and necessary. It’s appropriate, because it is specifically provided for by our system. It’s necessary, because the defendant has unequivocally indicated her desire to continue to release this information if the court doesn’t stop her.
We think it’s also important, that is, injunctive relief as an appropriate and necessary remedy, because the defendant herself has agreed with that. And this is yet another promise that she made with our client that she’s attempting to get around, to avoid, to break, and to not live up to; the promise that if something like this happens and there is a dispute about the release of the material or a breach of the agreement in general, that injunctive relief would be an appropriate remedy.
But irrespective of her agreement, the path is clear. The court has the right and the duty here, we think, given the undisputed record, that this contract should be enforced.
Now, if I may just for a moment delve into a couple of other items, because they have been raised as what I consider to be defenses to the claim that we’ve established.
There have been a number of legal arguments raised about the contract, unconscionability, you know, that it’s ambiguous, it’s an adhesion contract. And indeed, these are sort of the boilerplate list of defenses that can be raised to a contract action.
But what is missing from the argument — and there has been substantial volume by the defendant — is the fact that she considered it to be an adhesion contract. She thought it was unconscionable. She didn’t understand. She wasn’t given a choice. Nobody explained it to her.
There’s been not one word from her mouth on those topics that I didn’t understand or it was unfair to me or anything of that nature. That evidentiary record, in fact, demonstrates that none of those concepts apply here.
There’s been an argument about the First Amendment. And I — I think it’s important that we at least be clear about what we’re talking about with respect to the relief that we’re asking for today. Obviously, the First Amendment is incredibly important, as we’ve seen from some of the evidence that’s been presented in this case and otherwise.
But absent from the defendant’s argument are a couple of key factors:
One, this is a private deal in the stream of commerce that we’re talking about. This is not political campaign contributions. This is not political speech. This is not in that area at all. Rather, what we’re talking about in this case — that’s not to say that the parties before the court don’t have other protected First Amendment speech that revolves around their disputes or their various interests. Clearly they do. But that’s not the dispute before the court.
The dispute before the court concerns a contract that was entered into by private citizens, freely and voluntarily, about a commercial transaction.
There is no state action involved here. This is not Thurston County against the defendant or the State of Washington against the defendant or the United States against the defendant. This is no state action here. This is something that was — came into being as a result of a — essentially a private discussion between private citizens about a private transaction.
The other thing that we would like to emphasize here on the free speech issue is that the motion for preliminary injunction does not attempt to repress or suppress or limit the defendant’s speech, her words. She is continued — she will continue to be free to say what she will using her words.
The limitation is, she can’t use our words. Why? Because that’s the deal. The agreement says that the defendant or any of the tens of thousands of people that have signed this exact promise over decades, across more than ten countries, has made the identical promise. And we’re only asking that she not take our words, which of course are important to the enterprise. I mean, the school, at some level, is a business. And as part of the business aspect of the school, it is to protect the message. And they have done that.
I think we’ve demonstrated that it’s a fairly common and standard practice within the commercial stream of commerce for companies, organizations, and even individuals to try to protect what it is that they put out there in the marketplace. And it could be the secret patent for Coke Zero; or it could be the — what is the seemingly endless variety of self-help and build-your-career lectures that happen throughout the country; or here in Yelm where we have the Ramtha School of Enlightenment that offers a service, sometimes coming with a product that’s given to its students, and sometimes to others who are customers. And when that happens, there’s an agreement that there will be a limitation on what’s used, based on what’s provided at the presentations.
There is no limitation in the agreement on what the defendant wants to say. If she wants to say I didn’t get what I bargained for, if I think there are fire code violations, if there are safety code violations, if I want to petition my elected representatives, if I want to petition this court, she’s free to do that. All we’re asking is that she live up to her promise to not disseminate our speech.
I’ll go briefly — about the SLAPP issue. A counterclaim has now been filed by the defendant. We too received that yesterday. That is certainly no reason for the court to not grant the relief that we’re asking for today that — in part because the issue of whether this is a SLAPP suit or not isn’t really before the court. If we’re going to go forward with that, obviously, there will be the need for a schedule or a noting date or something of that nature. You just don’t sort of walk in and drop that kind of a bomb on somebody’s lap.
We’re confident, given the way the statute, RCW 24 reads, that this defensive measure will soon evaporate. And then we can move forward and have a trial on the merits, to have a trial on that issue, have a trial on whether it was unconscionable. We are prepared to have that.
What we have today is a trial on whether our client has demonstrated that it has a clear legal right that has been breached and will be breached unless this court enforces the promise that was made twice in this case. We have demonstrated that there’s a likelihood of success on the merits for this eventual claim. We’ve done that once.
Today we’re simply trying to move to the next step and to have it extended for the date before a trial. And we are prepared to have that trial happen either at the convenience of the court or the need of the defendant. Whether it needs to be sooner or later, we’re prepared to deal with that. But until we can have that happen, what we’re asking is that the defendant not distribute any of the additional information that’s covered by this agreement until we have a trial on the merits.
We’re also asking that this court, as part of its order of injunctive relief, direct that the defendant go to the ISP providers, the internet service providers that she has made these postings, and take these postings down. There has to be some measure of relief to our client to address not only what she wants to do but what she has done in the past.
The brakes were put on it on October 31st when this court signed that order. We want that limitation to continue for the period of time until the trial. But we’re also looking for the opportunity to have her undo the damage that she did when she breached the promise that she made to us.
Given the volume of information that’s been provided to the court, I think we can all agree that I’ve touched only briefly on most of the topics. If there are some specific questions I can help you with, Your Honor, or at least try to answer, I would like to.
THE COURT: No. I appreciate that. Thank you, Mr. Grant.
MR. GRANT: All right.
THE COURT: And because you represent the moving party, I will allow you and/or Ms. McNeely an opportunity to rebut the arguments made by Mr. Newman on behalf of his client.
MR. GRANT: All right. Thank you so much.
THE COURT: Thank you. Good afternoon, Mr. Newman.
MR. NEWMAN: Good afternoon, Your Honor. Shawn Newman for Virginia Coverdale. In listening to Mr. Grant’s argument, I took note that he asked the question, « What is missing. » Well, what is missing from this argument is the fact that his client, JZ Knight, Inc., does not own the proprietary materials. This is critical, Your Honor. Because they are here today to tell you, we need to protect our proprietary materials, our proprietary rights.
Quite frankly, I really owe it to his co-counsel, Andrea McNeely, who was quoted in the « Nisqually Valley News » and asked about the copyright issues. And quite frankly, when I read the contract, section 2 talks about these are copyrighted materials — section 2 of the contract says, « The materials provided to you at the school are subject to the copyright laws. You are not authorized to copy, reproduce, prepare adaptations, publicly distribute, publicly perform, or publicly display any of the materials without prior consent of the school. »
That’s in section 2 and on page 2 of my response.
Now, here’s the 800-pound gorilla in the room, Your Honor. And again, I want to get back to thanking Ms. McNeely for bringing this to my attention. Because in « Nisqually Valley News, » she was asked about the case, and she said, « Copyright is a separate issue. » She goes on to state, « That’s certainly something we’re looking at, as well, whether the school has copyright claims. » « Whether the school has copy right claims, » she said, but she added that would be in addition to the contract claims.
And so that struck me, Your Honor. I said to myself, wow. Doesn’t the school own the copyright? Because it would seem to me, based on the contract, they are letting the public and myself and my client conclude that they do. Well, thank God for the internet and my research abilities. I went to the U.S. Patent and Trademark Office copyright and trademark section. And lo and behold, they don’t own it, Your Honor. It’s still owned by JZ Knight, the individual. Now, if you ignore the corporate veil, you could say that the corporation owns it. But for purposes of this lawsuit, the corporation has no standing to assert protections for property it does not own.
Now, when you asked this — you asked this question, Your Honor, at our TRO hearing. You asked Mr. Grant this question. And you wanted — you wanted Mr. Grant to explain the substantial harm that’s caused. This is on page 2 of my response. You wanted him to explain what the harm is. And I note today, he has difficulty explaining the harm, the damages. And he said — and I quote Mr. Grant here. He says, « The particular segment that we’re talking about, I think, where the smaller version came from, the one that counsel liked to discuss the details of, is about a 20-minute clip of what really is an 11-hour video. »
And, you know, in their own memorandum in support of the preliminary injunction, they perpetuate this falsehood that they only seek to prevent the dissemination of its own proprietary materials. They don’t own it. This is explained in my Exhibit B to my — and what they have is, they have a license, Your Honor. And there’s a big difference between a license and an assignment.
I actually teach this. For example, in my classes, I can use books and materials, videos from publishers, but I don’t have standing to sue somebody for violating the publisher’s copyright. And that’s — I don’t have that right. I have a limited license. And I detailed this. This is well established in the law of intellectual property where a big difference between assignment — had JZ Knight, Judy Zebra Knight, assigned her rights to the school, no problem. They would have a right to claim proprietary interest. She never did that.
I mean, I was surprised. When I found this in the — in the U.S. Patent and Trademark Office materials, all she got — all the school got was the right to use it, like I use materials from a publisher. And what’s interesting, the last part of it says, « This license shall be nonexclusive, and except for the permission expressly granted herein, the licensor » — in this case it was Judy Knight — « reserves to herself all right, title, and interest in the trademarks, including the right to use trademark personally as well as authorize other persons and entities to use the trademarks provided so that it does not cause confusion. »
So bottom line, Your Honor, they don’t own it. They are here to assert ownership in claiming my client somehow acquired materials. She never acquired materials from the school in the first place — in the first case. So Mr. Grant’s representation in that regard is incorrect. Moreover, the — so this goes to the fundamental question that’s before the court that wasn’t brought to your attention the first go-around. As you know, you got the lawsuit a couple of days before the TRO. I got it about 24 hours before the TRO. Had I had time, I probably would have found this out and would have told you that at the first go-around.
This is what was raised — a similar issue was raised in judge — before Judge Berschauer in this case, JZK, Inc., vs. Glandon, where in the findings of fact and conclusions, Judge Berschauer found that copyright, the trademark, was owned by the individual, Judy Z. Knight, not the corporation. So it’s really a fundamental issue of standing.
Now, if they brought Judy Zebra Knight into this courtroom and made her a plaintiff, no problem. She’s the owner. You can’t assert ownership and sue somebody for what, in essence, is a trademark violation. And that’s what they’re — because what — what Judy Knight owns is not only the name « Ramtha, » the image, the whole shooting match. She owns it. They don’t own it. It has not been assigned to them. Therefore, they cannot claim that they’re — as they have claimed, that they’re — that somehow that it is their property or proprietary interest.
So it begs the question, Your Honor, What are the proprietary interests they are asserting here. What’s left? If you strip away the veil, the corporate veil, and strip away all the trademark, the other information that’s owned by Judy Z. Knight, what are they here to assert ownership over? And apparently it’s the bigoted statements made by Ms. Knight or Ramtha in these rantings that have been — that have received quite a bit of attention. If they want to claim ownership of that, great. But that’s free speech. When my client brings that out to the public and points that out, that’s free speech.
So it does beg the question, What is the proprietary materials that they are talking about here? I don’t know. Given section 2 of their own contract says it’s copyrighted — and it’s somewhat misleading — but they don’t own the copyright. They don’t own the trademark. They don’t own the image. They don’t own squat, other than these — if they want to take ownership for these bigoted words, again, that’s their choice.
Let me just quickly remark about the First Amendment thing. I’ve provided you a declaration from a constitutional law scholar, UCLA Law Professor, Eugene Volokh, who has — and they’ve provided a response to that issue. But as you know, the court decisions are clear. Where there’s a constitutional issue involved, the standard is elevated before you can grant a preliminary injunction.
But the bottom line here is that there is no clear legal or equitable right that they are asserting, because it’s — they don’t own it. They don’t own the materials, number one. Number two, as such, there is — they can’t have fear of immediate violation of that right, because they have none. And their claim of any actual or threatened injury falls apart, because my client did not receive the material from the school.
So Your Honor, I think — you know, I think it’s curious how Mr. Grant continues to say in his argument that they want to protect all — and this is his quote — « our words, our speech. » Well, it’s not their property. The proprietary rights they are trying to assert here, they don’t own them. The speech they do own, if they want to, again, is this bigoted hate speech. If they want to own that, that’s fine. As for his request to direct my client to take down — or to communicate with IP providers to take the material down, what they want to do, Your Honor — and this was actually discussed by Ms. McNeely in the « Nisqually Valley News » article. They are trying to get her on the fair use doctrine. That is what they are trying to do, via this contract scheme. And they can’t do it, because the law is very clear. Only the owner of the intellectual property can assert that right. It’s a bundle of rights. We learned this in law school; remember? Remember property law? It is a bundle of rights. And one of the rights is exclusion of others to use it, determining the licenses, that sort. She never gave that right away. She needs to assert it. She needs to be in this case, not the corporation. If you have any questions, I’ll answer.
THE COURT: Thank you, Mr. Newman.
Mr. Grant or Ms. McNeely?
MR. GRANT: Thank you, Your Honor. I won’t promise to be brief, but I will try to be direct. The contract and the issue of who owns the material that is at issue here and is covered, as I have referred to earlier, the tens of thousands of these documents — pardon me, these contracts that have been signed, it’s tempting to call this argument a red herring. But it’s hard to resist that temptation, because it seems to be nothing more than it is. There are, I think, two threshold questions that should be emphasized with respect to that argument. One, we’re talking about the contract that is before the court, the contract between the defendant on the one hand and JZK, Inc., on the other. And that’s the agreement we’re attempting to enforce here. She promised our client that she would not do what she has done.
THE COURT: And your client being JZK, Inc. —
MR. GRANT: Yes, sir.
THE COURT: — as opposed to Ms. Knight?
MR. GRANT: As opposed to Ms. Knight, as opposed to any of the other individuals connected with the entity. But JZK, Inc., as the entity — as the umbrella entity that covers the variety of the acts that they do.
THE COURT: And JZK, Inc., the entity, is a party to the contract.
MR. GRANT: It is.
THE COURT: Okay.
MR. GRANT: And so that’s the agreement, between the defendant and JZK, Inc. The other part of the contract that I think is worth emphasizing is that JZK, Inc., has another promise, not to the defendant but to the enterprise, to try to protect the property that we’re now here in front of the court trying to protect. JZK, Inc., as the umbrella corporate entity for the enterprise that we know as the Ramtha School of Enlightenment has been tasked with the responsibility of enforcing these particular student contracts. And that is entirely appropriate.
You know, the details of the legal contracts and the names that go with the relationship, say, between the owner of something and somebody licensed or assigned to carry out certain tasks, we can deal with later. I can represent to the court that JZK, Inc., is authorized to enforce this contract and is authorized to take this legal action against the defendant for the use of the proprietary material which is at issue. I don’t know exactly what to make of the idea about the corporate veil that was raised or piercing it. It’s not in the answer as an affirmative defense. It hasn’t been raised as a legal argument with respect either to the motion before the court or the pleadings that have been filed in the form of the complaint. And so maybe it needs no more discussion at this point. It’s sort of irrelevant to the issue of whether the corporate veil gets pierced or not, at least at this stage of the day.
The fellow from the law school is interesting. The idea that a gadfly from that law school can come here and tell this court how the Washington State Constitution should be applied or how this contract should be enforced is curious, at least, and I think it should be recognized as little more than an argument that’s made about legal issues that, with all due respect to the Bruins, this court would be better equipped to address.
Leaving aside the fact, I guess, that when the statement is made that the court decisions are clear, we couldn’t agree more. As our colleague from California observed, his idea that no prior restraint should occur because of the preliminary injunction, I think, is clearly indicated to be what he thinks, what he wants, his aspirations for the law. I think he’s been quite candid that his idea hasn’t gotten much traction, not here on the west coast in the ninth circuit, not in the second circuit. And it just doesn’t really apply. I’m not so sure there’s much more to really say about his declaration than that.
The record, then, really — to kind of step back to where we began, because I think it’s important that we stay focussed on the issue at hand, that is, what is the clear legal right; and is there evidence that it has been damaged; and is there a likelihood that we will be able to prevail at trial; and will we — are we now at risk that if we don’t get some immediate relief from the court, it will be very difficult for us, later, to go back and try to calculate or measure the damage that has been done.
There is no unfair prejudice to the defendant, and none has been particularly raised, except other than this sort of amorphous, well, I don’t want to be limited in using what you said, even though I promised not to do that. That is not an adequate reason for the court to deny the relief that we requested.
So for the reasons that we’ve put before the court in terms of the factual record and the arguments, we’re asking that you simply extend the date of it — where we started back on October 31 and issue a preliminary injunction.
THE COURT: Thank you.
MR. GRANT: Thank you.
THE COURT: I’m ready to rule. Let me preface my ruling by making a couple of comments. And I make these comments not for the benefit of or the sake of or to enlighten the lawyers in this room, but I make it to the members of our community. This is a court of law. And when parties bring a lawsuit in a court of law and they ask for temporary relief, or for that matter final relief, whether it be legal relief or equitable relief, they ask the court to make legal decisions. The parties don’t come to court to ask the court to make a political ruling or a social ruling or a moral ruling or an ethical ruling.
This is a court of law, and I am bound by the rules of law. And my job as a judge is to apply the facts to the law. I say that because I am going to say something that I said back on November 1, or a corollary thereof, and that is that this is a simple issue. I know and appreciate the fact that many people believe that this is a complicated issue. And when I say « the issue, » I mean the issue before this court today.
There may be issues with respect to whether or not there is a SLAPP action or whether or not the contract allegedly signed by the defendant is an adhesion contract or is unconscionable or whether there are legal defenses. I am not asked to make that decision today.
The only decision that I am asked to make today is to decide whether the facts in this case support the request from the plaintiff to continue the preliminary injunction that I entered back on November 1st. And I am going to do that. This is not a difficult decision for the court to make. The law is very clear. RCW 7.40.010 provides, « When during the litigation, it appears that the defendant is doing, or threatened, or is about to do . . . some act to be done in violation of the plaintiff’s rights respecting the subject of the action, tending to render the judgment ineffectual . . . an injunction may be granted to restrain such act or proceedings until further order of the court. The purpose of a temporary restraining order or a preliminary injunction is to preserve the status quo until the trial court can conduct a full hearing on the merits. ‘The status quo’ means the last actual peaceable, noncontestable condition which preceded the pending controversy. »
In the case at hand, the evidence before me includes the allegations, if not the fact, that the defendant, Ms. Coverdale, signed a contract with JZK, Inc. And as part of that contract, she acknowledged, on at least two separate occasions, that she would not disseminate or distribute any of the materials, essentially, at issue in this particular case.
It appears to the court that there is evidence to support the fact that she did disseminate that material. As part of the contract that she signed, she is acknowledging, « By signing these conditions of participation, you agree not to teach or otherwise disseminate, through speeches, books, articles, media, interviews, or other forms of mass or group distribution, nor will you assist or facilitate other persons in doing so without the prior written consent of the school. » She signed that contract. She acknowledged every paragraph of that contract, and she signed it on two separate occasions. It is, at the risk of overstating it, disingenuous for her now to come to court and argue, through the very passionate argument of her lawyer, that this is an adhesion contract or an unconscionable contract, when clearly the evidence shows that she had ample opportunity to ask questions, which she didn’t, or to challenge any provision in that contract, which evidently she didn’t. And there is no question, at least in the court’s mind, that the information that has been disseminated thus far allegedly by the defendant is of proprietary value to the plaintiff.
This is simply a contract issue. There are two parties to this lawsuit, essentially, JZK, Inc., as a corporation, and Ms. Coverdale. These parties entered into a contract. And they did so, arguably, and at least from the evidence in the record thus far, did so at arm’s length. Like any contract, you get something; you give up something. And that is what both of these parties did.
So it is the obligation of this court, in applying the facts to the law, to insure that the status quo remain in place, that the preliminary injunctionremain in place until the parties have their day in court to argue the merits of their respective positions.
I will say one thing further in response to the interesting and educated argument made by Mr. Newman, whose opinion I respect and whose knowledge I respect. He argues on behalf of his client that the plaintiff has no ownership interest in the materials at issue. Now, that may or may not be the case. But the contract here was entered into between his client and JZK. And I am asked on behalf of JZK, the plaintiff, to enjoin or prohibit the defendant from further distributing or disseminating the information that she was provided or had access to as a result of her participation in the educational programs sponsored by the plaintiff.
The argument that this is an action brought by Ms. Knight is interesting and perhaps an issue, ultimately, for the trier of fact to decide. But I find that JZK, Inc., certainly has standing in the action before the court today. It is JZ Knight who is asking the court to extend the preliminary injunction. I am going to do that on behalf of JZ Knight, Inc.
I will not order the defendant to contact the ISPs and require ISPs to take down the material that allegedly has already been posted. I don’t think that that would be appropriate in this case. Essentially, the cat’s out of the bag in that regard, and I don’t think that any entity that she would contact would necessarily be subject to this court’s order. So I am not going to require her to do that.
MR. GRANT: Your Honor, at the risk of interrupting, may I just address that part briefly?
THE COURT: Yes.
MR. GRANT: Because I don’t think I was particularly clear. On that issue what I meant to request is that the defendant be asked to contact the providers to take down posts she’s made —
THE COURT: Yes.
MR. GRANT: — not those of others, but the posts that she’s made, which she has control over. And while I’m certainly not much of an expert with her relationship with the ISPs she’s contacted, I believe it is the case that she has the power to make them take down what she asked them to do.
THE COURT: She has the power to do that, and I will order that she do that.
MR. GRANT: Thank you. And sorry I was unclear on that.
THE COURT: No. I appreciate that. Do the parties have an order?
MR. GRANT: Your Honor, not at the moment. What I would like to request — partly because this — we weren’t exactly sure how this issue would play out with the court. We can have an order in writing within 30 minutes. We would have it sent electronically if we knew who to have that sent to so it could be printed.
THE COURT: Of course it will have to be agreed upon from the defendant.
MR. GRANT: Yes, sir.
THE COURT: If it is not agreed upon, then you will have to note it up for presentation.
MR. GRANT: Understood.
THE COURT: And I am in the middle of a trial right now. If it is an agreed upon order, you can present it to the clerk here at any time this afternoon. If you want to go back to your respective offices, talk about the language to be included, that is another option.
MR. GRANT: Thank you. And we want to be respectful to Mr. Newman’s time and his client’s, as well. Perhaps it is obvious, but just to be clear, I guess I would like to confirm, Your Honor, that the TRO, at least the court’s verbal order, is that it is extended until entry of a written order.
THE COURT: Until further order of the court.
MR. GRANT: Thank you very much, Your Honor.
MR. NEWMAN: Thank you, Your Honor.
THE COURT: We’ll be in recess.
(Conclusion of the November 14, 2012, Proceedings.)
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