WILLIAM Q. HAYES, District Judge.
The matters before the Court are (1) the Motion to Dismiss First Amended Counterclaim ("Motion to Dismiss"), filed by Counter-Defendants IK Tech and Igor Kazhdan (ECF No. 41); and (2) the Motion for Temporary Restraining Order and Preliminary Injunction ("Motion for Preliminary Injunction"), filed by Counterclaimant B.I.P. Corporation (ECF No. 45).
On March 30, 2012, Plaintiff Norsat International, Inc. ("Norsat") initiated this action by filing a Complaint against Defendant B.I.P. Corporation ("B.I.P."). (ECF No. 1). The Complaint alleged that B.I.P. sold satellite and cable communication equipment that was falsely labeled with Norsat's trademarks. Id. ¶ 11.
On October 3, 2012, B.I.P. filed a Counterclaim against Norsat, IK Tech and Igor Kazhdan. (ECF No. 12).
On November 13, 2012, IK Tech and Igor Kazhdan (collectively, "IK Tech parties") filed a Counterclaim against B.I.P., Actox Corporation ("Actox") and Nikita Hatset. (ECF No. 19). On December 3, 2012, the IK Tech parties filed an Amended Counterclaim against B.I.P., Actox and Nikita Hatset. (ECF No. 23). The IK Tech parties allege that Kazhdan worked as an employee of B.I.P. and Actox from 2004 through "late 2010 to early 2011." Id. ¶ 11. The IK Tech parties allege: "In 2007, B.I.P. and Actox, on the direction of their principal owner Al Hatset, forced Kazhdan to incorporate IK Tech for the purpose of intentionally misclassifying Kazhdan as a 1099 independent contractor. B.I.P. and Actox forced Kazhdan to accept payment for work performed for B.I.P. and Actox through IK Tech so that B.I.P. and Actox could save money and avoid paying taxes." Id. ¶ 13. The IK Tech parties allege: "In early 2011, after Kazhdan had left the employ of B.I.P./Actox, Nikita Hatset began contacting IK Tech clients and making false and derogatory comments and written communications that [Nikita] Hatset knew to be untrue regarding IK Tech and Kazhdan." Id. ¶ 15. The IK Tech parties assert the following causes of action against B.I.P., Actox and Nikita Hatset: (1) violation of Fair Labor Standards Act, 29 U.S.C. § 201, et seq.; (2) overtime violations (Cal. Labor Code § 510); (3) failure to provide itemized wage statements (Cal. Labor Code § 226); (4) failure to provide and/or authorize meal periods (Cal. Labor Code § 512); (5) defamation (Cal. Civ. Code § 46(1)); and (6) unfair competition (Cal. Bus. & Prof. Code § 17200).
On January 25, 2013, the Court granted a joint motion to dismiss filed by Norsat and B.I.P., dismissing all of Norsat's claims against B.I.P. with prejudice and dismissing all of B.I.P.'s counterclaims against Norsat with prejudice. (ECF No. 29).
On May 24, 2013, B.I.P. filed a First Amended Counterclaim against IK Tech and Igor Kazhdan. (ECF No. 38).
A. Allegations of the First Amended Counterclaim
B.I.P. specializes in reselling and distributing components used in the satellite and telecommunications industry. Id. ¶ 10. Kazhdan "worked for B.I.P from 2004 to 2010, " and Kazhdan "incorporated his company, IK Tech, in 2007." Id. ¶ 12. "In 2010, B.I.P. cut ties with Kazhdan. IK Tech and Kazhdan began to sell Norsat products to B.I.P. customers. Many of those same customers stopped buying products from B.I.P." Id. ¶ 13. "On information and belief, B.I.P. believes that IK Tech and Kazhdan made false and derogatory comments about B.I.P. to its former customers to gain their business." Id. "IK Tech and Igor Kazhdan are using B.I.P. created customer lists to lure customers away from B.I.P. to purchase their satellite needs with IK Tech instead." Id. ¶ 14. "Despite B.I.P.'s repeated requests, [IK Tech and Kazhdan] have and continue to use B.I.P.'s customer lists in an attempt to usurp all of B.I.P.'s clientele." Id. ¶ 15.
B.I.P. asserts the following causes of action against IK Tech and Kazhdan: (1) unfair competition under 15 U.S.C. §1125(a); (2) defamation (Cal Civ. Code § 46(1)); (3) unfair competition (Cal. Bus. & Prof. Code § 17200); (4) misappropriation in violation of the California Uniform Trade Secrets Act ("CUTSA"); and (5) intentional interference with economic advantage.
B. Motion to Dismiss
On June 14, 2013, the IK Tech parties filed the Motion to Dismiss. (ECF No. 41). The IK Tech parties contend that the first, second, third and fifth causes of action should be dismissed pursuant to Federal Rule of Civil Procedure 12(b)(6). The IK Tech parties contend that B.I.P.'s defamation claim should be dismissed because it "is not pled with the required specificity." (ECF No. 41-1 at 5). The IK Tech parties contend that the "first, third and fifth claims are preempted by the... CUTSA." Id.
On July 3, 2013, B.I.P. filed an opposition to the Motion to Dismiss. (ECF No. 42). B.I.P. contends that the First Amended Counterclaim alleges sufficient facts to state a claim for defamation, and none of the claims are preempted by the CUTSA.
On July 11, 2013, the IK Tech parties filed a reply. (ECF No. 43).
C. Motion for Preliminary Injunction
On August 15, 2013, B.I.P. filed the Motion for Preliminary Injunction. (ECF No. 44). B.I.P. contends that the IK Tech parties, "without B.I.P.'s consent or authorization, have engaged and continue to engage in a course of conduct consisting of using B.I.P.'s confidential customer and supplier lists for its own purpose. [The IK Tech parties]' conduct is causing, and will continue to cause, irreparable harm to B.I.P.'s reputation and goodwill." Id. at 6. B.I.P. requests that the Court issue: "(i) a temporary restraining order and preliminary injunction against [the IK Tech parties] enjoining the use of any B.I.P. customer lists, supplier lists or other trade secrets without B.I.P.'s authorization; (ii) an injunction prohibiting [the IK Tech parties] from soliciting B.I.P. customers; and (iii) return of all B.I.P. confidential documents, including but not limited to documents showing customer names, supplier names, prices, and contact information." Id.
In support of the Motion for Preliminary Injunction, B.I.P. submits two declarations and two exhibits. B.I.P.'s attorney, David L. Skilling, submits a declaration stating that, at a July 2013 deposition, Khatset "produced a document showing a detailed customer list of B.I.P., complete with customer names, order information and pricing. B.I.P. Corporation did not produce these documents in this suit nor have they allowed [the IK Tech parties] access to these documents at any given point in time." (Skilling Decl. ¶ 4, ECF No. 44-1). The document, which ...