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Ametek CTS US, Inc. v. Advanced Test Equipment Corp.

United States District Court, S.D. California

January 13, 2020

AMETEK CTS US, Inc. and AMETEK CTS GmbH, Plaintiffs,
v.
Advanced Test Equipment Corp., Defendant.

          ORDER DENYING PLAINTIFFS' MOTIO9N FOR PRELIMINARY INJUNCTION AND A TEMPORARY RESTRAINING ORDER [DOC. NO. 10.]

          MARILYNL. HUFF, DISTRICT JUDGE UNITED STATES DISTRICT COURT.

         On December 9, 2019, Plaintiffs AMETEK CTS US, Inc. and AMETEK CTS GmbH (“Plaintiffs” or “AMETEK”) filed a complaint alleging violations of the Lanham Act among other state law causes of action. (Doc. No. 1.) Presently before the Court is Plaintiffs' Motion for Preliminary Injunction filed December 9, 2019. (Doc. No. 2.) The Court held a telephonic hearing on the Motion for a Temporary Restraining Order on December 18, 2019 at 10:30 am. Jason White along with other representatives, appeared for the Plaintiffs. John M. Billy made a special appearance to request a continuance so that ATEC could obtain counsel for the corporation. James P. Berg and Jamison Berg, nonlawyer representatives for ATEC, also were telephonically present for the hearing. At the hearing Mr. Berg represented to the Court that “the press release with the allegedly false statements at issue in the complaint had been taken down from ATEC's website and that ATEC would not disseminate similar statements.” (Doc. No. 19 at 2.) The Court granted Defendant's request for a continuance and continued the hearing on the Motion for a Preliminary Injunction and Temporary Restraining Order to January 10, 2020 at 11am. On January 6, 2020, Defendant opposed the motion. (Doc. No. 20.) On January 9, 2020, Plaintiffs replied. (Doc. No. 21.) The Court held a hearing on the motion on January 10, 2020. Jacon C. White appeared for Plaintiffs and Jacob T. Spaid appeared for the Defendant. For the following reasons the Court denies the motion for a preliminary injunction and temporary restraining order without prejudice.

         Background

         Plaintiffs AMETEK CTS US, Inc. and AMETEK CTS GmbH (collectively, “AMETEK”) seek a preliminary injunction and a temporary restraining order against Defendant Advanced Test Equipment Corp. (“ATEC”).[1]

         AMETEK is a manufacturer of sophisticated electronic instruments in the automotive, telecommunications, energy, aerospace, power, research, medical and industrial markets. (Doc. No. 2, Ex. 2. ¶ 1.) AMETEK sells directly to consumers and also distributes its products through commercial partners. (Id. ¶ 4.) Defendant ATEC has been a distributor of AMETEK's products. (Id.) Specifically ATEC has been a purchaser of AMETEK's TESTEQ, IFI, Milmega and EM Test lines of products for use in rental pools. Id. AMETEK and ATEC have been doing business in this manner for nearly 15 years with approximately $17 million in sales between the two companies. (Doc No. 20-4 at 2.)

         On September 7, 2019, AMETEK informed ATEC that it would have to “decline the opportunity for non-warranty service requests on behalf of ATEC going forward.” (Doc. No. 2, Ex. 3.) Defendant responded negatively to this development. (Id. at 4.) In a September 17, 2019 email, Jim Berg, CEO of ATEC, wrote that it “is very clear that Ametek is no longer going to support the many millions of dollars of equipment that ATEC has purchased from them over the years.” (Id.) The same day, Rick Powell, Director of Sales for the Americas, wrote back to Mr. Berg, informing him that AMETEK would “continue to repair anything that is still under warranty.” (Id.)

         On December 4, 2019, Defendant issued a press release titled “AMETEK CTS No Longer Calibrating or Repairing Equipment After The Warranty Expires.” (Id. at Ex. 1.) This press release was also simultaneously disseminated over ATEC's LinkedIn, Facebook, and Twitter accounts as well as Defendant's website and through email. (Id.) The body of the press release stated that “AMETEK CTS has notified them [ATEC] that they would no longer be supporting their products after the warranty period has expired.” (Id.) Following the issuance of this press release, AMETEK began to receive inquiries from its various customers and distributors about whether AMETEK would continue to support its products after the end of their warranty. (Doc. Nos. 10. Ex.7, 8, and 12.)

         On December 4, 2019, AMETEK, through its counsel, sent a letter to Mr. Berg demanding that “ATEC immediately remove the press release from its website, as well as all other locations . . . .” (Id. Ex. 17.) Two days later, on December 6, 2019, Mr. Berg responded indicating that ATEC would deliver “an appropriate response to your request” within 10 business days. (Id. Ex. 18.) On December 9, 2019, ATEC offered to publish a retraction, prepared by AMETEK, of the press release. (Doc. No. 20 at 3.) Instead, later that same day, December 9, 2019, AMETEK filed their complaint with this Court. (Doc. No. 1.)

         On December 18, 2019 the Court held a telephonic hearing on the motion for a Temporary Restraining Order. At the hearing Mr. Berg represented to the Court that “the press release with the allegedly false statements at issue in the complaint had been taken down from ATEC's website and that ATEC would not disseminate similar statements” during the course of this litigation. (Doc. No. 19 at 2.)

         Discussion

         I. Legal Standard

         A preliminary injunction is “an extraordinary remedy never awarded as of right.” Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 24 (2008); see Earth Island Inst. v. Carlton, 626 F.3d 462, 469 (9th Cir. 2010) (“[P]laintiffs seeking a preliminary injunction face a difficult task in proving that they are entitled to this ‘extraordinary remedy.'”) (quoting Winter, 555 U.S. at 24). It is “a device for preserving the status quo and preventing the irreparable loss of rights before judgment.” Sierra On-Line, Inc. v. Phoenix Software, Inc., 739 F.2d 1415, 1422 (9th Cir. 1984). “The grant or denial of a motion for a preliminary injunction lies within the discretion of the district court.” Johnson v. California State Bd. of Accountancy, 72 F.3d 1427, 1429 (9th Cir. 1995).

         In Winter, the Supreme Court held that a plaintiff seeking a preliminary injunction must establish “[1] that he is likely to succeed on the merits, [2] that he is likely to suffer irreparable harm in the absence of preliminary relief, [3] that the balance of equities tips in his favor, and [4] that an injunction is in the public interest.” Winter, 555 U.S. at 20. The Ninth Circuit balances these “Winter factors” using a “sliding scale” approach, where “a stronger showing of one element may offset a weaker showing of another.” All. for the Wild Rockies v. Cottrell, 632 F.3d 1127, 1131 (9th Cir. 2011). However, Winter “requires the plaintiff to make a showing on all four prongs.” Id. at 1135.

         II. ...


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