The People of the State of California vs Sunseeker Enterprises Inc et al

Case Number

19CV04083

Case Type

Hearing Date / Time

Mon, 11/13/2023 - 10:00

Nature of Proceedings

Motion: Preliminary Injunction

Tentative Ruling

The People of the State of California v. Sunseeker Enterprises, Inc., etc., et al. 

Case No. 19CV04083

           

Hearing Date: November 13, 2023                                                    

HEARING:              Motion of Plaintiff for Issuance of Preliminary Injunction

ATTORNEYS:        For Plaintiff People of the State of California: John T. Savrnoch, Christopher B. Dalbey, Morgan S. Lucas, Office of the Santa Barbara County District Attorney; Hydee Feldstein Soto, Kathleen A. Kenealy, William R. Pletcher, Miguel J. Ruiz, Louisa O. Kirakosian, Office of the Los Angeles City Attorney

                                    For Defendant Sunseeker Enterprises, Inc., dba Sun Firedefense: Michael N. Sofris, Action Legal Team

                                    For Defendant James E. Moseley: Self-represented  

                                   

TENTATIVE RULING:

(1)       To the extent set forth herein, the motion of plaintiff People of the State of California for issuance of a preliminary injunction is granted. Pending entry of judgment or further order of the court, defendants Sunseeker Enterprises, Inc., dba Sun Firedefense, and James E. Moseley are enjoined and prohibited from making false and misleading statements regarding the product known as SPF 3000 as set forth herein. Plaintiff shall present to the court an order consistent with this ruling.

(2)       Appearances of counsel are required for this hearing. In addition to addressing issues regarding the scope of the injunction as set forth herein, counsel are to be prepared to discuss the status of documents lodged with the court provisionally under seal.

Background:

On August 5, 2019, plaintiff People of the State of California (plaintiff or People) filed their complaint in this action asserting three causes of action against defendants Sunseeker Enterprises, Inc., dba Sun Firedefense (Sunseeker) and James E. Moseley (Moseley) (collectively, defendants): (1) violation of the False Advertising Law (Bus. & Prof. Code, § 17500 et seq.) (FAL); (2) false environmental representations (Bus. & Prof. Code, § 17580.5); and (3) violation of the Unfair Competition Law (UCL) (Bus. & Prof. Code, § 17200 et seq.). These claims arise out of the marketing, advertising, and sale of Sunseeker’s product, SPF 3000 Clear Spray (SPF 3000), in which it is alleged that Sunseeker makes various representations that SPF 3000 protects homes from fire and is safe and non-toxic. The People allege that these claims are false and misleading.

On October 21, 2019, defendants filed their answer to the complaint, admitting and denying the allegations thereof and asserting 13 affirmative defenses. On November 5, 2019, defendants filed their first amended answer to the complaint, admitting and denying the allegations thereof and asserting one affirmative defense, failure to state a cause of action.

On September 26, 2023, the People filed their motion for preliminary injunction. The People seek an order enjoining defendants from:

“Marketing, selling, or attempting to sell Defendants’ product ‘SPF 3000 Clear Spray’ (the Product) anywhere in California with any advertising statements regarding the efficacy, durability, or toxicity of the Product, without competent and reliable scientific evidence supporting any efficacy, durability, or toxicity claims.” (Notice of Motion, at p. 2.)

The motion is opposed by defendants.

(Note: The following discussion of evidence is intended only to highlight particular items in order to provide context and explanation for the court’s ruling and is not intended as a complete summary of the evidence. The court has considered all of the admissible evidence and arguments presented by the parties in reaching this ruling.)

(1)       Evidence of Plaintiff

Plaintiff provides evidence that, as of July 31, 2018, Sunseeker’s website included claims regarding SPF 3000:

“SPF 3000 Clear Spray is an innovative long-lasting fire retardant that provides protection against heat and burning embers up to 3000°F. The silicone-based ceramic formula penetrates and bonds with wood and other building materials insulating against heat transfer and creating a self-extinguishing reaction when hit by flame. This prevents the ignition and spread of dangerous flames to treated surfaces. It is typically professionally applied to the exterior of a structure, or to framing or roofing, using an airless sprayer. SPF 3000 offers Class A fire protection to cedar shake shingles, open-air roof systems, decking, and structural lumber.” (Shin decl., ¶ 19 & exhibit K [Ruiz decl., vol. 4, p. 15, PPL00959].)

Additional claims from this same webpage include:

“5+ Years of fire protection from a single application”

“Safe and non-toxic once applied so applications are not dangerous to humans or pets handle”

“Rated Class ‘A’ for ASTM E84 Standard for Construction Materials, with a Flame Spread Index of 15 applied to wood*”

“*Tested by NGC Testing Services, a NVLAP Accredited, IAS Accredited and California State Fire Marshal Approved laboratory. Ratings 25 and under are ‘Class A’ and are considered the most fire resistant building materials. The Flame Spread Index goes from 0 to 200+ with lower scores having less combustion risk. For example: reinforced concrete is rated a 0, and oak plywood is rated approximately 150). SPF 3000 Clear Spray’s rating test was performed with a single coating on unsealed Douglas Fir.” (Shin decl., ¶ 19 & exhibit K [Ruiz decl., vol. 4, p. 16, PPL00960].)

“It cures and become effective in a matter of hours, providing 5+ years of exterior fire protection on treated surfaces and 10+ years of fire protection on interior surfaces.” (Shin decl., ¶ 19 & exhibit K [Ruiz decl., vol. 4, p. 17, PPL00961].)

As of February 11, 2022, the Facebook account for Sunseeker include the following claims:

“SPF 3000 Clear Spray Fire Retardant

“> Class A Fire Protection

“Provides a CLASS A rating to treated wood, fiberglass and common building materials

“> Long Lasting

“A single exterior application provides 5+ years of external fire protection

“> Safety First

“Non-toxic, non-carcinogenic, and contains no PBDE’s” (Shin decl., ¶ 20 & exhibit L [Ruiz decl., vol. 4, p. 23, PPL07175].)

Plaintiff also provides similar evidence of claims stated in screenshots of archived web pages before and between September 21, 2018, and February 11, 2022. (Shin decl., ¶¶ 21-31 & exhibits M-W [Ruiz decl., vol. 4, pp. 26-79, PPL07329-07418].)

As of May 29, 2022, Sunseeker’s website included claims regarding SPF 3000:

“Intumescent

“Coatings

“Developed using aerospace technology to protect rockets against extreme heat during re-entry into Earth’s atmosphere

“Class A Rated 30 Minute Accredited Test Report

“Prevents ignition and spread of fire on treated surfaces

“Years of fire protection from a single application [¶] … [¶]

“Non-toxic and environmentally friendly.” (Shin decl., ¶ 32 & exhibit X [Ruiz decl., vol. 4, p. 81, PPL07419].)

“Sun FireDefense [¶] Test Report: [¶] Bonneville Power Station

“Lightning strike simulation test passed by Bonneville Power Administration and The Department of Energy on utility poles using 30 minute rating coating.” (Shin decl., ¶ 32 & exhibit X [Ruiz decl., vol. 4, p. 83, PPL07421].)

As of January 6, 2023, Sunseeker’s website included claims regarding SPF 3000:

“What is the Class A Flame Spread rating?

“Fire ratings rank a material’s surface burning characteristics according to how fast flames spread and how much smoke they produce, according to ASTM (American Society for Testing and Materials). The most common test for determining a fire rating is the Test Method E-84, or the tunnel test, which measures how far and fast flames spread across the surface of a given sample material. The results are then classified into three flame spread rating (FSR) groups, Class A-C. Cement would be considered Class A with 0-25 FSR, and oak plywood ranks at class C with 125-185 FSR. [¶] … [¶] Lumber treated with SUN FireDefense earned a Class A ( )”. (Shin decl., ¶ 34 & exhibit Z [Ruiz decl., vol. 4, p. 95, PPL07431].)

“Is SPF 3000 toxic?

“The SPF 3000 solution is non-toxic once it is dry. There is no chemical smell when it burns. Just like a painter, users are required to wear gloves and masks. The solution also contains acetone, which irritates the skin and is flammable in its liquid state.

“Turner Maclane (environmental consulting agency) 2018 – conducted an evaluation of wood treated with the patented formula (SPF 3000) to determine if it would pose an environmental or health threat. Additionally, it was tested to define if a normal treatment process would render the treated material to be classified as ‘hazardous waste’ by State or Federal regulatory standards. All results were ‘non-detect’ for Volatile Organic Chemicals (VOCs), indicating that there are no VOCs present at concentrations above the laboratory reporting limits. The results also showed that the wood products treated with the solution did not exhibit properties of hazardous waste and do not show any evidence of posing an environmental threat to the structure to which they are applied. ( )” (Shin decl., ¶ 34 & exhibit Z, [Ruiz decl., vol. 4, p. 96, PPL07432].)

“How often should someone treat their home with SPF 3000?

“Sun FireDefense should be applied once every 5 years.” (Shin decl., ¶ 34 & exhibit Z, [Ruiz decl., vol. 4, p. 97, PPL07433].)

“Sun FireDefense is one of the only companies to provide products and services that saved structures in California’s deadly Skirball and Woolsey fires. A revolutionary provider of advanced fire-retardant products, the line was inspired by and engineered in partnership with some of the most influential experts and institutions in aerospace, fire prevention and electric power generation. Sun FireDefense delivers long-lasting, high-temperature fire protection that inhibits the ignition and spread of fire for years (versus minutes or hours), with one application. Tested by California Department of Forestry and Fire Protection (CalFire)-approved facilities, Sun FireDefense coatings are a game-changer for wildfire protection.” (Shin decl., ¶ 34 & exhibit Z, [Ruiz decl., vol. 4, p. 98, PPL07434].)

Plaintiff presents evidence regarding the meaning, effect, and truth of these claims.

With respect to the claim as to the “Class A Flame Spread rating,” plaintiff presents evidence that the ASTM E84 rating in inapplicable to the protection of home exteriors. (Jones depo., at pp. 85-86, 96-98 [Ruiz decl., vol. 1, ¶ 3(PP) & exhibit PP, vol. 2, pp. 15-19].) The tests upon which defendants rely for this claim were on structural lumber or power poles rather than materials used on the exterior of residences. (Ruiz decl., vol. 1, ¶ 3(II) & exhibit II.) When SPF 3000 is applied to exterior materials of the type used in residences, testing by plaintiff’s experts found that SPF 3000 failed testing for flame penetration of exterior wall assemblies (ASTM E2707) with cedar shake siding and provided no enhanced protection for stucco or T1-11 siding. (Pickett decl., ¶¶ 9-15 & exhibits B, C, D [Ruiz decl., vol. 5, pp. 156-157, 164-205, PPL07271-07310].)

With respect to the claim that SPF 3000 is durable for five years, plaintiff presents evidence that no traces of SPF 3000 coating existed on samples of siding within five years of testing, including one sample treated one year prior. (Perkins decl., ¶¶ 3-7 [Ruiz decl., ¶ 12, vol. 5, exhibit 9, p. 152]; Chafe decl., ¶¶ 8-15 [Ruiz decl., ¶ 6, vol. 5, exhibit 3, pp. 27-28]; Harris decl., ¶¶ 7-13 & exhibits B, C [Ruiz decl., ¶ 15, vol. 5, exhibit 5, pp. 54-55, 61-80, PPL00001-00026]; Burmeister decl., ¶¶ 6-13 & exhibit 1 [Ruiz decl., ¶¶ , vol. 5, exhibit 12, pp. 231-243, PPL07254-07263].)

With respect to the claim that SPF 3000 is non-toxic, plaintiff presents evidence that component chemicals in SPF 3000 are toxic and identified by Sunseeker as such. (Parmelee decl., ¶¶ 3-7, 11 & exhibit 1 [Ruiz decl., ¶ 11, vol. 5, exhibit 8, pp. 142—49, PPL07184-07187]; Pierri decl., ¶¶ 7-14 & exhibit A [Ruiz decl., ¶ 14, vol. 5, exhibit 11, pp. 208-228. PPL07238-07253]; Shin decl., ¶ 8 & exhibit C [Ruiz decl., vol. 3, exhibit C, pp. 32, 36, PPL00503, 00507]; Ruiz decl., ¶ 3(NN), exhibit NN, vol. 1, pp. 362-365, PPL00275-00278.)

(2)       Evidence of Sunseeker

In opposition to the motion, Sunseeker presents the declaration of James Moseley, the CEO of Sunseeker. (Moseley decl., ¶ 2.) Moseley declares that he received a call from plaintiff around June 2019 in which plaintiff had problems with statements made about SPF 3000 that (1) it protected against embers burning up to 3,000° and (2) the product was non-toxic and bio-degradable. (Moseley decl., ¶¶ 3-4.) Prior to the filing of this lawsuit, in August 2019, Moseley changed the statements to state that (1) the product was non-toxic once dry and that (2) the product “protects from burning embers.” (Moseley decl., ¶ 5.) Moseley obtained a patent which has been assigned to Sunseeker. (Moseley decl., ¶ 6; Defendant’s Request for Judicial Notice [DRJN], exhibit 1.) Moseley further states that if a preliminary injunction is issued it will bankrupt Sunseeker. (Moseley decl., ¶ 7.)

Sunseeker also presents the declaration of Jason Deal, an aerospace engineer. (Deal decl., p. 1.) Deal presents his opinion that the test discussed by Brent Pickett, one of plaintiff’s testing experts, in his declaration in support of the motion “does not have the resolution and/or the requirements to use this test to make meaningful claims related to a surface ignition resistant material that is intended to reduce flame spread.” (Deal decl., p. 3.) Deal concludes: “In my opinion the testing performed per CSFM Standard 12-7A-1, Materials and construction methods for exterior wildfire exposure-exterior wall siding and sheathing is not an appropriate test to determine the performance of Sun FireDefense and SPF 3000 Clear Spray and the conclusions drawn from the test are therefore invalid. Tests were performed per 2019 CSFM Standard 12-7A-5, Ignition Resistant Material, showing that Sun FireDefense and SPF 3000 Clear Spray met the performance requirements of the extended E84 test and therefore meeting the requirements of SFM chapter 7A section 703A.7 standard of quality, per SFM standard 12-7A-5 version 2019 (Exhibit C). In review of the information presented, in my opinion, Sun Seeker Defense has met the intent of chapter 7A SMF which was the accepted standard at the time of testing.” (Deal decl., pp. 4-5.)

Sunseeker also presents the declaration of Dale Walsh, the product manager of Sunseeker. (Walsh decl., ¶ 2.) Walsh states that on November 9, 2019, at 7:00 a.m., during the Woolsey wildfire, he and another Sunseeker employee applied SPF 3000 to the exterior backside of a house in Malibu and put treated blankets in the vents. (Walsh decl., ¶¶ 3-5.) They left at 1:00 p.m. (Walsh decl., ¶ 5.) They came back four days later to find the house completely unaffected while all the houses in the tract had been destroyed. (Walsh decl., ¶ 6.)

Analysis:

A preliminary injunction is available “[w]hen it appears by the complaint or affidavits that the commission or continuance of some act during the litigation would produce waste, or great or irreparable injury, to a party to the action.” (Code Civ. Proc., § 526, subd. (a)(2).)

“The trial courts consider two interrelated questions in deciding whether to issue a preliminary injunction: 1) are the plaintiffs likely to suffer greater injury from a denial of the injunction than the defendants are likely to suffer from its grant; and 2) is there a reasonable probability that the plaintiffs will prevail on the merits. [Citations.] ‘[By] balancing the respective equities of the parties, [the court] concludes that, pending a trial on the merits, the defendant should or that he should not be restrained from exercising the right claimed by him.’ [Citations.]” (Robbins v. Superior Court (1985) 38 Cal.3d 199, 206.)

(1)       Requests for Judicial Notice

In support of the motion, plaintiff requests that the court take judicial notice of: (Plaintiff’s Request for Judicial Notice [PRJN], exhibit 1) the California Fire Marshal’s List of Approved Testing Laboratories, dated October 3, 2022; and (exhibit 2) California Residential Code, title 24, part 2.5, chapter 7 (Wall Covering), table R703.3(1), Siding Minimum Attachment and Minimum Thickness. The court will grant these requests for judicial notice. (See Evid. Code, § 452, subd. (c).)

In opposition to the motion, Sunseeker requests that the court take judicial notice of: (DRJN, exhibit 1) United States Patent No. 11,441,076; (exhibit 2) United States Patent Application Publication No. 2022/0389324 A1, dated December 8, 2022; (exhibit 3) United States Patent Application Publication No. 2016/0222225 A1, dated August 4, 2016; (exhibit 4) CalFire Approved Inspection Agencies for Products Listed for Wildland Urban Interface (WUI) Areas, dated April 20, 2022; (exhibit 5) CalFire Description of Listing Category and Applicable Standard, dated March 8, 2022; (exhibit 6) 2022 California Building Code, title 24, section 703A.7; (exhibit 7) 2022 California Building Code, title 24, section 704A.1-704A.4; (exhibit 8) 2022 California Building Code, title 24, section 2302.2; (request 9) 2019 California Building Code, title 24, section 703A.7; (exhibit 10) 2019 California Building Code, title 24, section 704A.1-704A.4; (exhibit 11) State of California, Building Standards Commission, Initial Statement of Reasons for Proposed Building Standards, dated July 23, 2021; (exhibit 12) NGC Testing Services Test Report, attached as exhibit II to Ruiz declaration; (exhibit 13) Guardian Fire Testing Laboratories Fire Test Report, attached as exhibit JJ to Ruiz declaration; (exhibit 14) Turner Maclane Environmental Consulting, Inc., Letter Report, attached as exhibit NN to the Ruiz declaration; and (exhibit 15) Bonneville Power Administration Report, attached as exhibit OO to the Ruiz declaration.

The court grants the request as to exhibits 1 through 8, 10, and 11. (See Evid. Code, § 452, subd. (c).) Request 9 does not correspond to exhibit 9, which contains section 03AA Standards of Quality. The request as to request 9 is therefore denied. (See Evid. Code, § 453, subd. (b).) The request as to exhibits 12 through 15 is granted as court records, but only to the extent of the fact that such documents have been filed with the court. (See Evid. Code, § 452, subd. (d)(1).) Judicial notice does not extend to the truth of matters set forth in publications or records. (Poseidon Development, Inc. v. Woodland Lane Estates, LLC (2007) 152 Cal.App.4th 1106, 1117.)

(2)       Likelihood of Success on the Merits

Plaintiff asserts claims under the FAL and UCL. For purposes of the analysis of this motion, liability under these statutes is essentially the same. The FAL provides:

“It is unlawful for any person, firm, corporation or association, or any employee thereof with intent directly or indirectly to dispose of real or personal property or to perform services, professional or otherwise, or anything of any nature whatsoever or to induce the public to enter into any obligation relating thereto, to make or disseminate or cause to be made or disseminated before the public in this state, or to make or disseminate or cause to be made or disseminated from this state before the public in any state, in any newspaper or other publication, or any advertising device, or by public outcry or proclamation, or in any other manner or means whatever, including over the Internet, any statement, concerning that real or personal property or those services, professional or otherwise, or concerning any circumstance or matter of fact connected with the proposed performance or disposition thereof, which is untrue or misleading, and which is known, or which by the exercise of reasonable care should be known, to be untrue or misleading, or for any person, firm, or corporation to so make or disseminate or cause to be so made or disseminated any such statement as part of a plan or scheme with the intent not to sell that personal property or those services, professional or otherwise, so advertised at the price stated therein, or as so advertised.” (Bus. & Prof. Code, § 17500.)

A violation of section 17500 is expressly also a violation of the UCL. (Bus. & Prof. Code, § 17200.) Similarly, “It is unlawful for a person to make an untruthful, deceptive, or misleading environmental marketing claim, whether explicit or implied. For the purpose of this section, ‘environmental marketing claim’ shall include any claim contained in the ‘Guides for the Use of Environmental Marketing Claims’ published by the Federal Trade Commission.” (Bus. & Prof. Code, § 17580.5, subd. (a).) The remedy of an injunction is available by statute. (Bus. & Prof. Code, § 17203.)

There is no dispute between the parties, and the evidence demonstrates, that though its advertising on its website, Sunseeker intends to sell personal property, namely, the SPF 3000 product, or a service, namely, application of the SPF 3000 product. This element of the FAL claim is therefore not at issue. The remaining elements are whether the advertising concerning SPF 3000 is untrue or misleading, and whether the defendant knew, or in the exercise of reasonable care should have known, was untrue or misleading. (Bus. & Prof. Code, § 17500.) For purposes of an injunction, knowledge of deception is not an element when considered as a UCL claim. (Committee On Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 211 [“for injunctive relief, it is necessary only to show that ‘members of the public are likely to be deceived.’].)

“[T]hese laws prohibit ‘not only advertising which is false, but also advertising which [,] although true, is either actually misleading or which has a capacity, likelihood or tendency to deceive or confuse the public.’ [Citation.] Thus, to state a claim under either the UCL or the false advertising law, based on false advertising or promotional practices, ‘it is necessary only to show that “members of the public are likely to be deceived.” ’ [Citations.]” (Kasky v. Nike, Inc. (2002) 27 Cal.4th 939, 951.) The court applies the “reasonable consumer” test to determine whether there is a violation of the FAL or UCL. (Salazar v. Target Corporation (2022) 83 Cal.App.5th 571, 578.)

“ ‘A “reasonable consumer” is ‘[an] ordinary consumer acting reasonably under the circumstances’ [citation].’ [Citation.] Such a consumer ‘need not be “exceptionally acute and sophisticated,” ’ nor must they ‘necessarily be wary or suspicious of advertising claims.’ [Citation.] Rather, to meet the ‘reasonable consumer’ standard, ‘a plaintiff need only show that members of the public are likely to be deceived’ by the defendant’s advertising. [Citation.]” (Skinner v. Ken’s Foods, Inc. (2020) 53 Cal.App.5th 938, 948.)

Because injunctions act prospectively, the court focuses on current advertising and public statements rather than on past allegedly false advertising that may give rise to other remedies. The evidence presented by plaintiff demonstrates it is likely to succeed in showing a violation of the FAL and UCL for each of the three types of claims at issue in this motion, namely, efficacy, durability, and toxicity claims.

Plaintiff presents evidence that Sunseeker claims that SPF 3000 prevents ignition and spread of fire on treated surfaces and that SPF 3000 is Class A Rated. Viewing these claims in the context of a reasonable consumer considering the advertisements and claims as a whole, these claims falsely and misleadingly imply that an application of SPF 3000 on the exterior of a residence would prevent ignition and spread of wildfire on treated exterior surfaces. Plaintiff presents evidence that this claim is untrue and that SPF 3000 has no apparent fire prevention or fire spreading effect on exterior surfaces. Defendant’s evidence regarding SPF 3000’s effects on structural lumber or power poles is not persuasive. Defendant’s advertising focuses on exterior surface applications of SPF 3000. Indeed, Defendant’s anecdotal evidence with respect to the Woolsey fire was an exterior surface application of SPF 3000, demonstrating the practical effect of defendant’s marketing of SPF 3000. The anecdote itself is not persuasive of the efficacy of SPF 3000, however, in that multiple factors existed that could have affected why the house was not burned in the fire relative to the neighboring destroyed houses, including geography, landscaping, and fire conditions, and the anecdote itself shows that the application of SPF 3000 was only partial as to the backside of the house (so that other conditions would necessarily have been involved in avoiding fire). The court concludes that plaintiff is likely to succeed on the merits as to this claim.

Plaintiff presents evidence that Sunseeker claims that SPF 3000 provides years of fire protection from a single application. Viewing this claim in the context of a reasonable consumer considering the advertisement and claims as a whole, this claim falsely and misleadingly implies that SPF 3000 is durable. Plaintiff presents evidence that this claim is untrue, specifically, that treated surfaces show no traces of SPF 3000 one or more years after application. Sunseeker does not present any persuasive evidence that SPF 3000 is durable in any way consistent with its advertised claims. The court concludes that plaintiff is likely to succeed on the merits as to this claim.

Plaintiff presents evidence that Sunseeker claims that SPF 3000 is non-toxic and environmentally friendly. Plaintiff presents evidence that SPF 3000, even after it dries, contains toxic chemicals. Sunseeker, citing evidence presented by plaintiff, identifies a test report concluding that “the data indicates that the cured wood products treated with Sun Fire Defense SPF 3000, do not exhibit properties of a hazardous waste, and by the data developed in this study, do not show any evidence of posing an environmental threat to the structures to which they are applied.”

Viewing this claim in the context of a reasonable consumer considering the advertisement and claims as a whole, the court concludes that the plaintiff is likely to succeed on the merits in showing that the claim that SPF 3000 is non-toxic and environmentally friendly is misleading. Among other things, the evidence shows that SPF 3000 contains toxic chemicals subject to reporting as such.

(3)       Greater Harm

In support of the motion, plaintiff argues that it is entitled to a presumption of harm to the public.

“[O]nce a trial court has determined that the governmental entity will probably succeed at trial in proving a statutory violation, the court is justified in presuming that public harm will result if an injunction is not issued. The reasoning underlying this argument is sound. Where a legislative body has enacted a statutory provision proscribing a certain activity, it has already determined that such activity is contrary to the public interest. Further, where the legislative body has specifically authorized injunctive relief against the violation of such a law, it has already determined (1) that significant public harm will result from the proscribed activity, and (2) that injunctive relief may be the most appropriate way to protect against that harm.” (IT Corp. v. County of Imperial (1983) 35 Cal.3d 63, 70.)

In this case, the court’s determination that the plaintiff will likely succeed in showing that the claims at issue are false and misleading to the consuming public also demonstrates significant harm in consumer confusion and deception regarding qualities of SPF 3000. Because of the nature of the product, the potential harm from the deception is not merely the purchase of unwanted product but in inappropriately elevated expectations regarding the safety of their homes that may negatively impact risk-reducing activities these consumers may otherwise take.

Sunseeker presents the declaration of its CEO stating that the granting of the injunction will bankrupt Sunseeker. (Moseley decl., ¶ 7.) Taken at face value, this statement is not persuasive. The injunction as it is sought by plaintiff is to prevent false advertising; the proposed injunction does not prevent either truthful advertising or sales of SPF 3000. To the extent that Sunseeker’s business depends upon false advertising, harm to Sunseeker is insignificant compared with the harm to the public by false advertising. Because Moseley’s statement is conclusory, there is no evidence presented that preventing specific types of advertising claims during the pendency of this action would cause measurable harm in terms of lost sales. The harm that may occur for an erroneously issued preliminary injunction is further limited by the time through trial and judgment. Trial is now set for March 2024.

Based upon the evidence and argument presented by the parties, the court concludes that plaintiff, representing the public, would suffer the greater harm by the erroneous denial of an injunction as compared with the harm from the erroneous grant of an injunction.

(4)       Defenses

In opposition to the motion, Sunseeker raises several issues as complete or partial defenses. One such defense is laches. (Opposition, at pp. 8-9.)

“ ‘ “Laches is based on the principle that those who neglect their rights may be barred, in equity, from obtaining relief.” ’ [Citations.] ‘ “The defense of laches requires unreasonable delay plus either acquiescence in the act about which plaintiff complains or prejudice to the defendant resulting from the delay.” ’ [Citations.]” (RAR2 Villa Marina Center CA SPE, Inc. v. County of Los Angeles (2023) 91 Cal.App.5th 1050, 1071.) “ ‘Prejudice is never presumed; rather it must be affirmatively demonstrated by the defendant in order to sustain his burdens of proof and the production of evidence on the issue.’ [Citations.]” (Ibid.)

Sunseeker has presented no evidence that delay in seeking this preliminary injunction has caused prejudice. The court concludes on the evidence presented that laches is not a defense to the granting of a preliminary injunction.

Another asserted defense is that the injunction would interfere with Sunseeker’s patent rights in the patent acquired from Moseley. A patent grants to the patent holder exclusive rights to make, use, offer for sale, or sell a patented invention. (35 U.S.C. § 154(a)(1).) As noted above, the proposed injunction does not limit the ability of Sunseeker sell or to offer for sale SPF 3000, only that Sunseeker may not make false or misleading statements that would be likely to deceive the public. Sunseeker cites no authority, and the court is aware of no authority, that the patent law permits false or misleading statements about patented inventions or preempts state law prohibiting false or misleading advertising. (See Farm Raised Salmon Cases (2008) 42 Cal.4th 1077, 1088 [consumer protection laws including UCL and FAL are subject to presumption against preemption].) “It is well established that the party who asserts that a state law is preempted bears the burden of so demonstrating.” (Ibid.) Sunseeker has not met its burden to show that any aspect of patent law would preclude or limit the injunction sought here. Additionally, Sunseeker has not even shown that SPF 3000 includes a patented invention. (See

Moseley depo., at pp. 208-214 [Ruiz decl., ¶ 28 & exhibit 23, vol. 6, pp. 47-48].)

Sunseeker also makes some interconnected arguments that issuance of an injunction would violate its First Amendment rights. The case of People ex rel. Gascon v. HomeAdvisor, Inc. (2020) 49 Cal.App.5th 1073 (HomeAdvisor) is instructive.

In HomeAdvisor, the defendant companies provided a network of service professionals specializing in home renovation projects to homeowners. (HomeAdvisor, supra, 49 Cal.App.5th at p. 1079.) The companies advertised that the service professionals were subject to a background check. (Ibid.) The plaintiff San Francisco District Attorney filed a complaint against the defendants alleging that the advertisements were false and misleading because they were likely to deceive consumers into believing that all service professionals hired through the network who come into their homes have passed criminal background checks, when only the owner of the service professional company underwent the background check. (Id. at p. 1077.) The plaintiff sought a preliminary injunction which was granted by the trial court. (Id. at pp. 1080-1082.)

On appeal in HomeAdvisor, the plaintiff argued, among other things, that the preliminary injunction was an unconstitutional restriction on commercial speech. The HomeAdvisor court disagreed:

“Under the First Amendment, commercial speech is entitled to less protection from governmental regulation than other forms of expression. [Citations.] When evaluating restrictions on commercial speech, the first inquiry is ‘whether the expression is protected by the First Amendment. For commercial speech to come within that provision, it at least must concern lawful activity and not be misleading. Next, we ask whether the asserted governmental interest is substantial. If both inquiries yield positive answers, we must determine whether the regulation directly advances the governmental interest asserted, and whether it is not more extensive than is necessary to serve that interest.’ [Citation.]” (HomeAdvisor, supra, 49 Cal.App.5th at p. 1085.)

“ ‘With regard to misleading commercial speech, the United States Supreme Court has drawn a distinction between, on the one hand, speech that is actually or inherently misleading, and, on the other hand, speech that is only potentially misleading. Actually or inherently misleading commercial speech is treated the same as false commercial speech, which the state may prohibit entirely. [Citations.] By comparison, “[s]tates may not completely ban potentially misleading speech if narrower limitations can ensure that the information is presented in a nonmisleading manner.” ’ [Citation.]” (HomeAdvisor, supra, 49 Cal.App.5th at p. 1085.) “ ‘[T]here can be no constitutional objection to the suppression of commercial messages that do not accurately inform the public about lawful activity. The government may ban forms of communication more likely to deceive the public than to inform it.’ [Citation.] If ‘advertising is inherently likely to deceive or where the record indicates that a particular form or method of advertising has in fact been deceptive,’ the speech is unprotected. [Citation.] Once it is determined that commercial speech is inherently likely to deceive, our inquiry ends because there is no First Amendment interest at stake.” (Ibid.)

The HomeAdvisor court also found that, as a preliminary injunction, the trial court’s order was not an unlawful prior restraint: “We recognize that ‘a court must tread lightly and carefully when issuing an order that prohibits speech.’ [Citation.] ‘ “An order issued in the area of First Amendment rights must be couched in the narrowest terms .... [It] must be tailored as precisely as possible to the exact needs of the case.” [Citations.]’ [Citation.] An injunction may not be ‘broader than necessary to provide relief to plaintiff while minimizing the restriction of expression.’ [Citation.]” (HomeAdvisor, supra, 49 Cal.App.5th at p. 1089.) The court found the order in HomeAdvisor was narrowly tailored and therefore not an invalid prior restraint. (Id. at p. 1090.)

As discussed above, the court finds that the plaintiff is likely to succeed on the merits in showing that Sunseeker’s advertised claims as to efficacy, durability, and non-toxicity are false and misleading. These false claims are therefore not protected speech. This argument does, however, have implications for the scope of an injunction that may be issued, as discussed below.

(5)       Balance of Equities and Scope of Injunction

Based upon a full consideration of the arguments and evidence presented by the parties, the court concludes that the balance of the equities falls strongly in favor of granting a preliminary injunction. The court will therefore grant the motion for a preliminary injunction, subject to limitations on the scope of the injunction as discussed herein.

The injunction proposed by plaintiff is to enjoin defendants from: “Marketing, selling, or attempting to sell Defendants’ product ‘SPF 3000 Clear Spray’ (the Product) anywhere in California with any advertising statements regarding the efficacy, durability, or toxicity of the Product, without competent and reliable scientific evidence supporting any efficacy, durability, or toxicity claims.” (Notice, at p. 1.)

This language is too broad. As explained above in the quotations from HomeAdvisor, only false or misleading commercial speech is not protected speech. Truthful speech, whether or not supported by competent and reliable scientific evidence, is protected speech. The proposed preliminary injunction is not narrowly tailored and is therefore problematic.

Based on the evidence presented in support of this motion for preliminary injunction, the court has finds permissibly narrow an injunction that orders defendants, pending resolution of the merits of this matter, not to make claims that:

(1)       The Product provides protection against heat and burning embers up to 3000°F, or to any specific temperature; but, claims that the product is intended or designed to provide protection from fire, are not prohibited except as otherwise provided in this order.

(2)       The Product prevents ignition and spread of fire on treated exterior surfaces of cedar shake, T1-11 siding, or stucco.

(3)       The Product is Class A Rated without a disclaimer that the Class A Rating applies to treated structural lumber and not to treatment of exterior siding.

(4)       The Product maintains its advertised qualities for more than one year; and,

(5)       The Product is non-toxic or environmentally friendly; but, claims that treated surfaces do not exhibit properties of a hazardous waste, and do not show any evidence of posing an environmental threat to the structures to which they are applied, are not prohibited except as otherwise provided in this order.

The court notes that with respect to item 1, there is evidence presented that SPF 3000 provides some fire protection consistent with its testing reports. Consequently, for purposes of this preliminary injunction, the court finds that a complete prohibition on statements regarding fire protection would be too broad. However, Sunseeker may not make claims that mislead the consuming public as to the scope of the claimed fire protection. Items 1 and 2 attempt to address this issue consistent with the evidence presented. The court would consider further argument from the parties as to how all these items may be further refined so as to avoid false or misleading claims while permitting Sunseeker to exercise its commercial speech rights as to truthful and not misleading claims. The court will not require any pre-clearance of claims, but would also consider including an optional safe harbor pre-clearance procedure to provide Sunseeker a mechanism to limit disputes over compliance with the injunction.

(6)       Lodged Materials

In addressing this motion, the court noted that plaintiff lodged provisionally under seal non-redacted versions of the motion and of the declaration of Miguel Ruiz (six volumes) on September 26, 2023. The documents were lodged pursuant to the stipulated protective order entered by the court on November 30, 2021. That order provides as follows:

“Where any Confidential Materials, or Information derived from Confidential Materials, is included in any motion or other proceeding governed by California Rules of Court, Rules 2.550 and 2.551, the party shall follow those rules.” (Order, filed Nov. 30, 2021, § 17.)

“Rules 2.550-2.551 apply to records sealed or proposed to be sealed by court order.” (Cal. Rules of Court, rule 2.550(1).) “These rules do not apply to discovery motions and records filed or lodged in connection with discovery motions or proceedings. However, the rules do apply to discovery materials that are used at trial or submitted as a basis for adjudication of matters other than discovery motions or proceedings.” (Cal. Rules of Court, rule 2.550(3).)

Because the Ruiz declaration is submitted as a basis for adjudication of this motion for preliminary injunction, and not in a discovery motion or proceeding, rules 2.550 and 2.551 apply both directly and under the terms of the protective order.

“A record must not be filed under seal without a court order. The court must not permit a record to be filed under seal based solely on the agreement or stipulation of the parties.” (Cal. Rules of Court, rule 2.551(a).)

“A party that files or intends to file with the court, for the purposes of adjudication or to use at trial, records produced in discovery that are subject to a confidentiality agreement or protective order, and does not intend to request to have the records sealed, must:

            “(i)       Lodge the unredacted records subject to the confidentiality agreement or protective order and any pleadings, memorandums, declarations, and other documents that disclose the contents of the records, in the manner stated in (d);

            “(ii)      File copies of the documents in (i) that are redacted so that they do not disclose the contents of the records that are subject to the confidentiality agreement or protective order; and

            “(iii)    Give written notice to the party that produced the records that the records and the other documents lodged under (i) will be placed in the public court file unless that party files a timely motion or application to seal the records under this rule.” (Cal. Rules of Court, rule 2.551(b)(3)(A).)

“If the party that produced the documents and was served with the notice under (A)(iii) fails to file a motion or an application to seal the records within 10 days or to obtain a court order extending the time to file such a motion or an application, the clerk must promptly transfer all the documents in (A)(i) from the envelope, container, or secure electronic file to the public file. If the party files a motion or an application to seal within 10 days or such later time as the court has ordered, these documents are to remain conditionally under seal until the court rules on the motion or application and thereafter are to be filed as ordered by the court.” (Cal. Rules of Court, rule 2.551(b)(3)(B).)

No notice of lodging was filed with the court. However, the proof of service of plaintiff’s documents in support of the motion includes service of a notice of lodging unredacted documents pursuant to California Rules of Court, rule 2.551. It is unclear whether the notice required by rule 2.551(b)(3)(A)(iii) has been given. Plaintiff will be required to report to the court whether such notice was given, and, if so, file such notice with the court. If notice was given, the court will order the documents lodged with the court provisionally under seal to be filed in the public file. If notice was not given, then, unless Sunseeker or Moseley files a motion to seal such records within 10 calendar days of the hearing on this motion for preliminary hearing, the documents lodged with the court provisionally under seal to be filed in the public file.