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Diskriter, Inc. v. Alecto Healthcare Services Ohio Valley LLC

United States District Court, N.D. West Virginia

January 25, 2018

DISKRITER, INC., a Pennsylvania corporation, Plaintiff,
v.
ALECTO HEALTHCARE SERVICES OHIO VALLEY LLC, a Delaware limited liability company, ALECTO HEALTHCARE SERVICES WHEELING LLC, a Delaware limited liability company and ALECTO HEALTHCARE SERVICES MARTINS FERRY LLC, a Delaware limited liability company, Defendants.

          MEMORANDUM OPINION AND ORDER DENYING PLAINTIFF'S REQUEST FOR PRELIMINARY INJUNCTION

          FREDERICK P. STAMP, JR. UNITED STATES DISTRICT JUDGE.

         I. Procedural History

         This civil action arises out of a verified request and complaint for injunction. ECF 1-2 at 7. Pursuant to 28 U.S.C. § 1441 and § 1446, defendants Alecto Healthcare Services Ohio Valley LLC, Alecto Healthcare Services Wheeling LLC, and Alecto Healthcare Services Martins Ferry LLC (“defendants, ” and collectively, “Alecto”), removed this action from the Circuit Court of Ohio County, West Virginia to the United States District Court for the Northern District of West Virginia. ECF No. 1.

         Defendants then filed a motion to dismiss or, in the alternative, to compel arbitration and stay this civil action pending arbitration. ECF No. 2. Plaintiff filed a response in opposition to defendants' motion and, pursuant to Rule 65(a) of the Federal Rules of Civil Procedure and Local Rule of Civil Procedure 78.01, requested a hearing on plaintiff's motion for a preliminary injunction and in opposition to defendants' motion to dismiss. ECF No. 4. Defendants filed a reply in opposition to plaintiff's request for preliminary injunction. ECF No. 11.

         Pursuant this Court's order (ECF No. 12), a hearing was held on the plaintiff's motion requesting a preliminary injunction on January 4, 2018. At the hearing, the parties acknowledged that the dispute over the contract arising out of the Medical Transcription Services Agreement (“the Agreement”) is subject to arbitration and that the arbitration has already been initiated. During the hearing on the motion for preliminary injunction, the parties elicited witness testimony, and this Court admitted certain exhibits into evidence. The parties then represented that they would both request a copy of the hearing transcript and stated that setting a deadline to submit a supplemental memorandum regarding the plaintiff's motion for preliminary injunction one week after receipt of the transcript was agreeable.

         Further, as indicated at the conclusion of the hearing, defendants' motion to dismiss (ECF No. 2) was denied and defendants' motion to compel arbitration and stay pending arbitration was granted. Per this Court's previous order confirming the pronounced order of the Court during the hearing (ECF No. 15), this civil action has been stayed pending arbitration, with the exception of the Court's consideration of, and ruling upon plaintiff's motion for preliminary injunction. The parties were then each directed to file a supplemental memorandum as to plaintiff's motion for preliminary injunction. ECF No. 15.

         Defendants filed a supplemental brief in opposition to plaintiff's request for preliminary injunction (ECF No. 18) and plaintiff filed a supplemental memorandum of law in support of request for preliminary injunction (ECF No. 19).

         The plaintiff's motion for preliminary injunctive relief is now fully briefed, has been argued by the parties at the evidentiary hearing, and is ripe for decision. For the reasons set forth below, this Court finds that Diskriter has failed to make a ‘clear showing' that it is entitled to such relief under the four factor test and that Diskriter's motion for preliminary injunctive relief should be denied.

         II. Background

         Plaintiff Diskriter filed this action in the Circuit Court of Ohio County, West Virginia, requesting the court enter a preliminary injunction and then permanent injunction enjoining the defendants Alecto Healthcare Services Ohio Valley LLC, Alecto Healthcare Services Wheeling LLC and Alecto Healthcare Services Martins Ferry LLC from utilizing the transcription services of any other person or entity during the term of the Agreement. ECF No. 1-2 at 9.

         Defendants removed this action to the United States District Court for the Northern District of West Virginia. ECF No. 1.

         Defendants then filed a motion to dismiss plaintiff's complaint or, in the alternative, to compel arbitration and stay pending arbitration. ECF No. 2. The defendants assert the Court must dismiss plaintiff's complaint, contending that all issues contained in the complaint are arbitrable under the Agreement. Alternatively, the defendants assert the Court should compel plaintiff to submit this matter to arbitration and stay the proceeding pending arbitration.

         Plaintiff Diskriter filed a response (ECF No. 4) to the defendants' motion to dismiss or, in the alternative, to compel arbitration and stay pending arbitration, and requested a hearing on the motion for a preliminary injunction. Plaintiff clarifies in its response, “[b]y the express terms of the Complaint, Plaintiff advises that the merits of its claim for breach of contract are to be resolved at arbitration” and that “[t]he present action involves one issue, the request for this Court to issue first a preliminary injunction followed by a permanent one while the arbitration process is pending.” ECF No. 4 at 2. Plaintiff seeks an injunction pursuant to Federal Rule of Civil Procedure Rule 65 “to protect the status quo and avoid plaintiff from incurring irreparable harm, primarily related to the termination of twenty-seven (27) full-time employees and loss of revenue and capital investment in the performance of the Agreement, while the arbitration process is pending.” ECF No. 4 at 3. Plaintiff asserts, “[t]he Complaint seeks not a resolution by this Court as to whether Defendants violated the Agreement or owe any damages, but an injunction requiring Defendants to perform under the Agreement until the substantive breach and damages can be addressed by the parties in Arbitration” and is only asking “that this Court protect the status quo during the arbitration process.” ECF No. 4 at 3.

         Defendants filed a reply in opposition (ECF No. 11) to plaintiff's request for preliminary injunction hearing and assert that plaintiff is not entitled to the extraordinary relief it seeks because plaintiff is unable to prove that it is likely to succeed on the merits, prove irreparable harm, prove that the balance of equities tips in its favor, and unable to prove that a preliminary injunction is in the public interest. Defendants assert that the Court should deny plaintiff's request for preliminary injunction and permit the ...


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