PRIOR RESTRAINT ON SPEECH: TEMPORARY INJUNCTION PROPERLY DENIED

Dibon Solutions, Inc. v. Jay Nanda and Bon Digital, Inc.
Dallas Court of Appeals, No. 05-12-01112-CV (July 29, 2013)
Justices Bridges (opinion), Lang, and Lewis

Jesse K. Shumway

The Court of Appeals affirmed the trial court’s denial of a temporary injunction that would have prohibited the defendants from contacting customers of the plaintiff “for the purpose of communicating disparaging information.” The Court of Appeals concluded the proposed injunction would be an improper prior restraint on speech; the Court found plaintiff was not entitled to invoke exceptions to the prior-restraint doctrine because plaintiff failed to establish that defendants had previously conveyed false information to plaintiff’s customers or that the defendants took an active part in persuading customers to breach their contracts.

Dibon Solutions was owned by two brothers, Jay and Atul Nanda. After disputes arose between the brothers, an arbitrator ordered Atul to buy Jay’s stake in the company. In the wake of the arbitrator’s order, Jay sent communications to several of Dibon’s customers, accusing Dibon of being under investigation by multiple government agencies, of verging on bankruptcy, of having multiple liens, and of forging documents, among other things. Dibon filed suit against Jay and his company for defamation, business disparagement, breach of fiduciary duty, and tortious interference. Dibon obtained a temporary restraining order against Jay’s communications, but the trial court denied Dibon’s request for a temporary injunction barring “Defendants from contacting those of Dibon’s customers who were customers while Jay was a director, officer or employee of Dibon for the purpose of communicating disparaging information to such customers.”

The Court of Appeals began by noting that the prior restraint of expression “bears a heavy presumption against its constitutional validity.” The Court concluded Dibon failed to show that a prior restraint would be appropriate in this case. The Court first rejected Dibon’s contention that Jay’s statements to customers were false, finding no support for that assertion in the record. Jay testified the statements were true, and Dibon’s vice president confirmed at least some were true, and that he was not certain others were false. The Court also rejected Dibon’s contention that Jay’s statements constituted willful and intentional interference with Dibon’s customer contracts. The Court found Jay’s communications with the customers insufficient to show he “took an active part in persuading” them to breach their contracts with Dibon. The Court therefore concluded Dibon’s proposed injunction would be an improper prior restraint and affirmed.