Lokosky v. Hon. gass/ruffino

NOTICE: NOT FOR OFFICIAL PUBLICATION.
UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL
AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.

IN THE
ARIZONA COURT OF APPEALS
DIVISION ONE

MELAYNA LOKOSKY, Petitioner,

v.

THE HONORABLE DAVID GASS, Judge of the SUPERIOR COURT OF
THE STATE OF ARIZONA, in and for the County of MARICOPA,
Respondent Judge,

RUSSELL RUFFINO, a married man; CLIENTS ON DEMAND, L.L.C., a
California limited liability company, Real Parties in Interest.

No. 1 CA-SA 18-0101
FILED 6-28-2018

Petition for Special Action from the Superior Court in Maricopa County
No. CV2015-009252
The Honorable David B. Gass, Judge

JURISDICTION ACCEPTED; RELIEF GRANTED

COUNSEL

Jackson White PC, Mesa
By Michael R. Pruitt, Nathaniel J. Hill
Counsel for Petitioner

Kelly/Warner, PLLC, Scottsdale
By Daniel R. Warner
Counsel for Real Parties in Interest
 LOKOSKY v. HON. GASS/RUFFINO
Decision of the Court

MEMORANDUM DECISION

Presiding Judge Maria Elena Cruz delivered the decision of the Court, in
which Judge Jennifer B. Campbell and Judge James P. Beene joined.

C R U Z, Presiding Judge:

¶1 Petitioner Melayna Lokosky seeks special action relief from
the superior court’s order imposing a temporary restraining order on the
parties. Because Lokosky lacks an “equally plain, speedy, and adequate
remedy by appeal,” we accept special action jurisdiction. Ariz. R.P. Spec.
Act. 1(a); see generally Sw. Gas Corp. v. Irwin ex rel. County of Cochise, 229 Ariz.
198, 201, ¶¶ 5-7 (App. 2012) (accepting special action jurisdiction “when a
party cannot obtain justice by other means”). For the following reasons, we
accept special action jurisdiction and grant relief.

FACTUAL AND PROCEDURAL HISTORY

¶2 In December 2015, Respondents Russell Ruffino and Clients
on Demand, L.L.C. (collectively, “Respondents”) filed an action for false
advertising and unfair competition under the Lanham Act § 43(A)(1)(B), 15
U.S.C. § 1125; defamation and defamation per se; false light invasion of
privacy; tortious interference with current and prospective business
relationships; aiding and abetting; and conspiracy. They sought, in part, a
preliminary and permanent injunction compelling Lokosky to remove from
the internet all material pertaining to Respondents and their business and
from publishing any false statements or defamatory material to any third
party. Respondents obtained a default judgment in late 2016, including
approximately $250,000.

¶3 In January 2017, Respondents compelled the transfer of
ownership of Lokosky’s website to Respondents. Lokosky then applied for
a restraining order seeking to have ownership of her website returned to
her and simultaneously moved to vacate or set aside the judgment. The
superior court granted the temporary restraining order, which directed the
return of the website to Lokosky pending the outcome of a preliminary
injunction hearing. It additionally ordered Lokosky to “remove any and all
material and/or references pertaining to each Plaintiff” on her website and
“refrain from publishing or republishing on the Internet any and all
materials and/or references pertaining to each Plaintiff.”

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¶4 In March 2017, the superior court held the first day of an
evidentiary hearing on Lokosky’s motion to vacate judgment. During the
month in between hearing days the superior court placed both parties
under an order forbidding the parties from engaging in speech regarding
each other, counsel, and the instant lawsuit. The superior court said,
“nobody is posting anything about this case online about the other party,
[or] the other party’s attorneys.” In April 2017, the superior court held the
second day of the evidentiary hearing and vacated the default judgment
against Lokosky. The court indicated it would consider a motion to
dissolve the temporary restraining order but that the restraint on speech
would remain in place pending further action by the court. It reiterated that
the order applied to both parties:

The injunction remains in place on both of you. Neither of
you is putting the other one down online. The things stay
offline only because I’m trying to — whichever way this goes
because if there are counterclaims, I’m just trying to limit the
damages and what happens in this case.

¶5 In May 2017, Respondents filed a notice of appeal regarding
the superior court’s decision to vacate the default judgment.1 A month
later, Lokosky filed a motion to dissolve the temporary restraining order
because there was no longer a default judgment to justify the restraint on
her speech. In August 2017, the superior court ruled that it would not make
any decision on the motion to dissolve the temporary restraining order until
the Court of Appeals revested jurisdiction in the superior court.

¶6 In September 2017, Lokosky filed a separate notice of appeal
regarding the superior court’s decision not to decide the motion to set aside
the temporary restraining order. This Court determined it did not have
jurisdiction over the appeal.2 A month later, Lokosky requested this Court
dissolve the temporary restraining order, but she did so by way of a filing
in Respondents’ separate appeal. This Court denied the motion, deciding
that Lokosky’s request was more appropriately raised as a special action.
Lokosky then filed the special action petition at issue in this decision.

1 This Court initially stayed the appeal pending the superior court’s
signature of the order being appealed. This Court later reinstated the
appeal upon receiving Respondents’ notice of filing the signed ruling.

2 Lokosky later obtained a judicial signature on the order in question.

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Decision of the Court

DISCUSSION

¶7 Lokosky argues the temporary restraining order is an
unconstitutional governmental restraint on speech that is unsupported by
a clear finding that the speech is not entitled to the First Amendment’s
protection. She also asserts that the temporary restraining order and the
instructions provided by the court are invalid under Arizona’s
constitutional free speech provisions. Because we conclude the order
constitutes an impermissible prior restraint under the United States
Constitution, we do not address Lokosky’s arguments regarding the
Arizona Constitution.

¶8 We review the lawfulness of the superior court’s order de
novo. Phx. Newspapers, Inc. v. Otis, 243 Ariz. 491, 495, ¶ 12 (App. 2018). A
prior restraint is an administrative or judicial order “forbidding certain
communications . . . issued in advance of the time that such
communications are to occur.” Alexander v. United States, 509 U.S. 544, 550
(1993) (emphasis removed). “Temporary restraining orders and permanent
injunctions . . . are classic examples of prior restraints.” Id. “[P]rior
restraints on speech and publication are the most serious and the least
tolerable infringement on First Amendment rights.” Neb. Press Ass’n v.
Stuart, 427 U.S. 539, 559 (1976). “Although not all prior restraints are
invalid, they come with a heavy presumption against constitutional
validity.” Nash v. Nash, 232 Ariz. 473, 481-82, ¶ 32 (App. 2013). Moreover,
the temporary nature of a restraint does not make it less objectionable or
reduce the burden on the government to justify it. Neb. Press Ass’n, 427 U.S.
at 559. “[A]n injunction issued before an adequate determination that it is
unprotected by the First Amendment presents the special vice of a prior
restraint.” Overstreet v. United Bhd. of Carpenters & Joiners of Am., Local Union
No. 1506, 409 F.3d 1199, 1218 (9th Cir. 2005) (internal quotations omitted);
State ex rel. Corbin v. Tolleson, 160 Ariz. 385, 396 (App. 1989).

¶9 The temporary restraining order at issue in this action is a
prior restraint on the parties’ speech because it forbids the parties from
speaking about each other online in the future, thereby “forbidding certain
communications . . . issued in advance of the time that such
communications are to occur.” Alexander, 509 U.S. at 550. Although
Respondents argue that the temporary restraining order is not a prior
restraint because Lokosky agreed to the order, we are unpersuaded. In her
request for a temporary restraining order, Lokosky only sought the return
of her website. She did not seek the restraints placed on her or
Respondents’ speech, therefore it is inaccurate to say that Lokosky agreed
to the speech restriction provisions of the temporary restraining order.

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Decision of the Court

Compare with Snepp v. United States, 444 U.S. 507, 509 n.3 (1980) (concluding
that agreement that Central Intelligence agent was required to complete
upon employment and that expressly obligated agent to submit any
proposed publication for prior review was not an impermissible restraint
on protected speech); Charter Commc’ns., Inc. v. County of Santa Cruz, 304
F.3d 927, 935 n.9 (9th Cir. 2002) (stating party had waived its right to claim
that denial of a transfer of a franchise violated its First Amendment rights
when party voluntarily entered into an agreement under which the county
had to approve any transfer); Nash, 232 Ariz. at 481-83, ¶¶ 29-36
(determining court did not abuse its discretion in entering order barring
both parties from disparaging each other by way of social media when
parties had entered into joint-custody agreement that placed certain
restrictions on their speech). “The purpose of a temporary restraining order
is to preserve the status quo before a preliminary injunction hearing may
be held . . . .” Estes v. Gaston, No. 2:12-CV-1853, 2012 WL 5839490, at *2 (D.
Nev. Nov. 16, 2012). However, before a temporary restraining order
enjoining future speech may issue, the court must determine whether such
future speech falls outside of the protections of the First Amendment.
“Absent a clear finding supported by the evidence that a given expression
is unentitled to First Amendment protection, a prior restraint should not
issue and cannot stand.” Tolleson, 160 Ariz. at 396. The temporary
restraining order issued against Lokosky was an impermissible prior
restraint because it is not supported by “an adequate determination that
[the speech in question] is unprotected by the First Amendment[.]”
Overstreet, 409 F.3d at 1218. Although the superior court indicated its intent
to prevent the parties from engaging in speech which might later increase
their own liability in this litigation, the record is devoid of any support for
the notion that Lokosky’s speech is not protected. If a party in this action
engages in libelous conduct, it does so at its own peril.

¶10 Respondents argue, among other things, that Lokosky’s
speech was properly restrained because Lokosky is Respondents’
competitor and her speech, in this context, is commercial speech. The
United States Supreme Court has recognized a distinction between
commercial and noncommercial speech. See generally Cent. Hudson Gas &
Elec. Corp. v. Pub. Serv. Comm’n of N.Y., 447 U.S. 557 (1980). “The
Constitution . . . accords a lesser protection to commercial speech than to
other constitutionally guaranteed expression.” Id. at 562-63. Commercial
speech that is misleading is not protected under the First Amendment. Id.
at 563-64. “To whatever extent a commercial message is deceptive or
proposes an illegal transaction, it may constitutionally be banned.”
Tolleson, 160 Ariz. at 390. Assuming without deciding that Lokosky’s

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Decision of the Court

statements fall under the umbrella of commercial speech, said speech has
not been determined to be misleading. Without such a determination
Lokosky’s speech may not be restrained, even temporarily.

¶11 Lokosky seeks her attorneys’ fees and costs pursuant to
Arizona Special Action Rule of Procedure 4(g) and ARCAP 21(a). However,
because Lokosky does not “specifically state the statute, rule, decisional
law, contract, or other authority for an award of attorneys’ fees” pursuant
to ARCAP 21(a), we decline her request.

CONCLUSION

¶12 For the reasons stated, we accept special action jurisdiction
and grant relief. We reverse and vacate the temporary restraining order in
so far as it enjoins the parties from engaging in speech about this action on
any forum, or about the parties involved herein.

AMY M. WOOD • Clerk of the Court
FILED: AA

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