Zoom Video Communications, Inc v. Ringcentral, Inc. ( 2021 )

NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FILED
FOR THE NINTH CIRCUIT
OCT 14 2021
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
ZOOM VIDEO COMMUNICATIONS, No. 21-15792
INC.,
D.C. No. 5:21-cv-01727-EJD
Plaintiff-counter-
defendant-Appellee,
MEMORANDUM*
v.
RINGCENTRAL, INC.,
Defendant-counter-claimant-
Appellant.
Appeal from the United States District Court
for the Northern District of California
Edward J. Davila, District Judge, Presiding
Argued and Submitted October 7, 2021
San Francisco, California
Before: THOMAS, Chief Judge, and HAWKINS and FRIEDLAND, Circuit
Judges.
RingCentral, Inc. (RingCentral) appeals the district court’s denial of a
preliminary injunction against Zoom Video Communications, Inc. (Zoom) arising
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
out of an agreement between the companies. We have jurisdiction under 28 U.S.C.
§ 1292(a)(1), and we affirm.
We review the denial of a preliminary injunction for abuse of discretion.
All. for the Wild Rockies v. Cottrell, 632 F.3d 1127, 1131 (9th Cir. 2011). A
district court abuses its discretion when its decision is based on “an erroneous legal
standard or clearly erroneous finding of fact.” Id. (citations omitted). To obtain a
preliminary injunction, the moving party must “make a showing on all four
prongs” of the preliminary injunction test: (1) a likelihood of success on the merits;
(2) a likelihood of irreparable harm in the absence of the requested relief; (3) a
balance of hardships that tips in the movant’s favor; and (4) a public interest in the
issuance of an injunction. Id. at 1135. In our Circuit, where a party is unable to
show a likelihood of success on the merits but can at least demonstrate that there
are serious questions going to the merits, we may grant preliminary injunctive
relief so long as the balance of hardships tips sharply in favor of the movant and
there is a showing on the other two elements. See id.The district court concluded “neither party ha[d] shown a likelihood of
success on the merits[,] but only serious questions on the merits.” Under
California law, a contract is to be interpreted by looking at the “whole of [the]
contract . . . so as to give effect to every part.” Cal. Civ. Code § 1641. Both
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parties offer plausible constructions of their agreement, interpreting it as a whole.
The district court also indicated that it had not favored one party’s interpretation
over the other at least in part because the case presented “serious factual
questions.” The existing record suggests that the contractual provisions at issue
may be, in fact, ambiguous, and that determining their correct construction may
require extrinsic evidence. See Dore v. Arnold Worldwide, Inc., 139 P.3d 56, 60
(Cal. 2006) (“An ambiguity arises when language is reasonably susceptible of
more than one application to material facts.”).
Given these circumstances, the district court was entitled to defer
determination of this disputed question until further development of the record at
trial. See Int’l Molders’ & Allied Workers’ Loc. Union No. 164 v. Nelson, 799
F.2d 547, 551 (9th Cir. 1986) (“In deciding a motion for a preliminary injunction,
the district court is not bound to decide doubtful and difficult questions of law or
disputed questions of fact.” (citations and internal quotation marks omitted)).
The district court also concluded that even if RingCentral had established it
would suffer irreparable harm, a preliminary injunction would not be warranted
because the balance of hardships did not sharply tip in RingCentral’s favor. Given
the record before it, the district court did not abuse its discretion in making this
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determination. Nor did it abuse its discretion in concluding that the public interest
was not implicated in a commercial dispute.
In sum, given our very deferential standard of review of preliminary
injunction orders, we conclude that the district court did not abuse its discretion in
denying the preliminary injunction motion and directing that the case proceed to
trial. We need not—and do not—reach any other issue urged by the parties, nor do
we express any view as to the merits of the disputed contractual issues.
AFFIRMED.
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