Rebecca Bamberger Works, LLC v. Bamberger

District Court, S.D. California·Decided April 30, 2024·No. 3:24-cv-00706·Unknown

Opinion

REBECCA BAMBERGER WORKS, Case No.: 24-CV-706 JLS (DDL) LLC d/b/a BAM COMMUNICATIONS, a Delaware limited liability company; ORDER GRANTING IN PART AND LLORENTE & CUENCA USA, INC., a DENYING IN PART: (1) Delaware corporation; and LLORENTE & PLAINTIFFS’ EX PARTE CUENCA MADRID S.L., a foreign APPLICATION FOR ISSUANCE OF corporation, TEMPORARY RESTRAINING ORDER, SEIZURE ORDER, ORDER Plaintiffs, TO SHOW CAUSE FOR v. PRELIMINARY INJUNCTION, ORDER FOR EXPEDITED REBECCA BAMBERGER, an individual; DISCOVERY, AND RBW HOLDCO, INC., a California PRESERVATION ORDER; AND (2) corporation; BAM BY BIG LLC, a PLAINTIFFS’ EX PARTE MOTION California limited liability company; AND TO FILE DOCUMENTS UNDER DOES 1 through 20, Defendants.

Presently before the Court is an Ex Parte Application for Issuance of Temporary Restraining Order, Seizure Order, Order to Show Cause for Preliminary Injunction, Order for Expedited Discovery, and Preservation Order (“Appl.”) filed by Plaintiffs Rebecca Bamberger Works, LLC (“BAM”), Llorente & Cuenca USA, Inc. (“LLYC USA”), and Llorente & Cuenca Madrid S.L. (“LLYC Madrid”) (collectively, “Plaintiffs”). Plaintiffs accompany the Application with an Ex Parte Motion to File Documents Under Seal (“Seal Mot.”), and declarations by Luisa Garcia (“Garcia Decl.”), Todd Renner (“Renner Decl.”), and Gregory A. Nylen (“Nylen Decl.”). Having carefully considered Plaintiffs’ arguments, filings, and the law, the Court GRANTS IN PART AND DENIES IN PART Plaintiffs’ Application and Plaintiffs’ Seal Motion. Per the Complaint (“Compl.,” ECF No. 1), LLYC USA is a subsidiary of Llorente & Cuenca S.A., “a publicly traded global communications, digital marketing, and public affairs firm located in Spain.” Compl. ¶ 33.1 LLYC Madrid—also affiliated with Llorente & Cuenca S.A.—own “trademark Registration No. 6,066,337 with the United States Patent and Trademark Office” for the mark “LLYC.” See id. ¶ 53. BAM is a San-Diego-based public relations and marketing company that works with venture capital brands and venture-backed start-ups. Id. ¶¶ 10, 25. Since 2006, BAM has used the mark “BAM” in connection with its services. Id. ¶ 26 In March of 2023, LLYC USA acquired 80% of BAM’s equity from BAM Chief Executive Officer (“CEO”) (and Defendant) Rebecca Bamberger (“Bamberger”). Id. ¶¶ 1, 34. Bamberger’s corporation—Defendant RBW Holdco, Inc. (“RBW”)—retained a 20% stake in BAM. See id. ¶ 35. As part of the purchase, RBW and Bamberger agreed to comply with a series of restrictive covenants. Id. ¶¶ 38–39. Bamberger also agreed to stay on as CEO subject to an employment agreement. Id. Finally, BAM, LLYC USA, RBW, and Bamberger executed an operating agreement stating that BAM would be operated by a three-member board. Id. ¶¶ 40–41. The board would include Bamberger and two LLYC representatives. Id. / / / 1 As Plaintiffs have requested that the Garcia Declaration be filed under seal, the Court refers to allegations After the purchase, LLYC USA incorporated the LLYC Mark into the BAM branding to create a new mark: “BAM by LLYC.” Id. ¶ 52. BAM used this mark in its “digital footprint and documents.” Id. Beginning in late 2023, however, relations soured between Bamberger and LLYC USA. The issues began when LLYC USA sought to transition BAM’s bank account from Chase Bank to HSBC. Id. ¶ 59–60. Rather than transition the funds as ordered by the board, however, Bamberger withdrew hundreds of thousands of dollars from BAM’s account. Id. ¶¶ 67–71, 79–81. At least some of these funds were transferred to Bamberger’s personal account. Id. Around the same time, Bamberger created two California companies—VC Comms Con LLC and Big Magical Events LLC. Id. ¶ 82. BAM performed at least $252,000 worth of services for these companies. Id. ¶¶ 85–86. Bamberger then dissolved both companies in February of 2024, and neither company has paid BAM. Id. ¶¶ 88–91. BAM’s board members pressured Bamberger to explain these actions across multiple meetings between February 14 and April 1, 2024. Id. ¶¶ 72–78, 92–100. Bamberger assured the board she would resolve the issues, but nevertheless continued to transfer funds from BAM’s account to her personal account until at least March 14. See id. ¶¶ 72–100. Separately from these suspect transactions, Bamberger began working on a plan to take back BAM from LLYC USA. Bamberger first informed the board’s chairman that she wanted to “end LLYC’s equity interest in BAM” on December 3, 2023. Id. ¶ 63. BAM responded that “there was no basis for a unilateral termination of LLYC’s interest in BAM.” Id. ¶ 65. Undeterred, Bamberger—through counsel—sent a March 5, 2024 letter to BAM stating that she was “interested in unwinding the acquisition of BAM by LLYC.” Id. ¶ 101. BAM responded on March 15, stating that the “[b]oard had ultimate discretion with regard to the operation of [BAM],” id. ¶ 102, and Bamberger replied that “every member at BAM [was] aware of th[e] coming transition and [they] ha[d] started a detailed change management plan internally,” id. ¶ 103 (alterations in original). BAM’s board then told Bamberger that until they received a proposal regarding a potential repurchase, Bamberger should not implement any changes to BAM or inform BAM employees of any change in ownership. Id. ¶ 104. The board’s warning came too late. Bamberger created—and shared among BAM employees—an internal document mapping out a transition away from LLYC USA. Id. ¶ 117. As part of this plan, Bamberger formed Defendant BAM by BIG LLC (“BIG”). Id. ¶ 114. She also registered a new domain name and created a webpage that “copied BAM’s website word for word.” Id. ¶¶ 115, 139. Then, in mid-March of 2024, Bamberger executed the transition. Working with BAM employees, she (1) redirected all traffic from BAM’s website to BIG’s website, (2) transferred BAM’s internal documents and client files to BIG’s new Google Drive, (3) emailed clients to inform them that BAM was ending its relationship with LLYC, and (4) sent new invoices with BIG’s bank information to clients and directed them to ignore old invoices from BAM. Id. ¶¶ 117–149. BIG’s website retains the “BAM by LLYC” mark. See id. ¶ 113. Plaintiffs discovered Bamberger’s efforts on April 4, 2024, when one of BAM’s clients contacted LLYC USA to inquire about a duplicate invoice it received from BIG. Id. ¶ 109. This email “made it clear to BAM, the [b]oard, and LLYC [USA] . . . that Bamberger was in the process of completely decimating BAM by stealing clients and redirecting payments away from BAM.” Id. ¶ 151. Plaintiffs filed this action on April 19, 2024, asserting, among other causes of action, misappropriation of trade secrets, conversion, fraud, breach of contract, and trademark infringement. See generally Compl. The instant Application and Seal Motion followed one week later. I. Temporary Restraining Order A. Legal Standard Federal Rule of Civil Procedure 65(b) governs the issuance of a temporary restraining order (“TRO”). The standard for a TRO is identical to the standard for a preliminary injunction. Frontline Med. Assocs., Inc. v. Coventry Healthcare Worker’s Comp., Inc., 620 F. Supp. 2d 1109, 1110 (C.D. Cal. 2009). A plaintiff seeking preliminary injunctive relief 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 v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 20 (2008). Injunctive relief is “an extraordinary remedy that may only be awarded upon a clear showing that the plaintiff is entitled to such relief” and

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