Kahala Franchising, LLC v. Real Faith, LLC et al, No. 2:2021cv08115 - Document 44 (C.D. Cal. 2022)
Court Description: ORDER DENYING PLAINTIFF'S MOTION FOR PRELIMINARY INJUNCTION 14 by Judge Otis D. Wright, II. (lc)
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Kahala Franchising, LLC v. Real Faith, LLC et al Doc. 44 O 1 2 3 4 5 6 7 United States District Court Central District of California 8 9 10 11 KAHALA FRANCHISING, LLC, 12 13 14 15 16 Plaintiff, Case 2:21-cv-08115-ODW (SKx) ORDER DENYING PLAINTIFF’S MOTION FOR PRELIMINARY INJUNCTION [14] v. REAL FAITH, LLC, et al., Defendants. 17 I. 18 INTRODUCTION 19 Plaintiff Kahala Franchising, Inc., the owner of the trademarks associated with 20 the Pinkberry frozen yogurt brand, sues Defendants Real Faith, LLC and D’Mari 21 Jackson for continuing to operate a Pinkberry franchise as a terminated holdover 22 franchisee. Kahala now seeks a preliminary injunction by way of a fully briefed 23 Motion. (Mot. Prelim. Inj. (“Motion” or “Mot.”), ECF No. 14; Opp’n, ECF No. 35; 24 Reply, ECF No. 38.) Having carefully considered the papers filed in connection with 25 the Motion, the Court deemed the matter appropriate for decision without oral 26 argument. Fed. R. Civ. P. 78; C.D. Cal. L.R 7-15. For the following reasons, the Court 27 DENIES Kahala’s Motion. 28 Dockets.Justia.com II. 1 BACKGROUND 2 Plaintiff Kahala is the owner of the trademarks associated with the Pinkberry 3 frozen yogurt brand, which was founded in Los Angeles in 2005 and has expanded to 4 over 100 locations. (Compl. ¶ 5, ECF No. 1.) As a franchisor, Kahala licenses its 5 trademarks to franchisees who use the marks in connection with the operation of their 6 franchises. (See id. ¶¶ 9–10.) As with most restaurant franchise operations, Kahala 7 provides its franchisees with business methods, technical knowledge, marketing 8 concepts, recipes, processes, information on supply sources, business forms, trade dress, 9 employee training techniques, and other types of business assistance. (Decl. Kim Lane 10 (“Lane Decl.”) ¶ 4, ECF No. 14-5.) In exchange, each franchisee pays Kahala royalty 11 payments and contributions based on a percentage of the franchise’s gross revenue. (Id. 12 ¶ 7.) 13 On February 15, 2019, Defendant Real Faith, a limited liability company 14 franchisee, entered into a written franchise agreement with Kahala to operate a 15 Pinkberry frozen yogurt franchise in Beverly Hills, California.1 (Id. ¶ 8.) On April 19, 16 2019, Bernadine Y. Jackson, then the managing member of Real Faith, passed away. 17 In accordance with the parties’ agreement, Mrs. Jackson’s son, Defendant D’Mari 18 Jackson (herein, “Jackson”), continued Real Faith’s operation of the Pinkberry 19 franchise. (Lane Decl. ¶ 13; Decl. D’Mari Jackson (“Jackson Decl.”) ¶ 5, ECF No. 35- 20 1.) Jackson spoke to a Kahala representative about the transfer process, which, under 21 the parties’ franchise agreement, had to be completed during the ninety-day period 22 following Mrs. Jackson’s passing. (Lane Decl. ¶ 14.) The parties did not complete the 23 transfer process because the transfer cost was, in Jackson’s estimation, too high. 24 (Jackson Decl. ¶ 5.) 25 During this ninety-day period, Real Faith, acting through Jackson, executed a 26 promissory note with Kahala, agreeing to pay Kahala a principal sum of $181,223.68 27 1 28 That same day, Real Faith entered an additional, separate sublease with Pinkberry, Inc. to lease the premises at which Real Faith’s Pinkberry franchise would operate. (Id. ¶ 11.) The parties’ rights and obligations under the sublease are not directly at issue in the present case. 2 1 plus interest by way of twenty-four monthly payments of approximately $7,500 each. 2 (Lane Decl. ¶ 15, Ex. D.) The balance constituted amounts due from past rents, 3 royalties, advertising fees, and transfer fees. (Id.) Real Faith never made any payments 4 on this promissory note. (Id. ¶ 18.) Moreover, since August 2020, Real Faith has not 5 made any royalty payments under its franchise agreement with Kahala, and since 6 October 2020, it has not made any rent payments to Pinkberry, Inc. (Id.) 7 On June 18, 2021, Kahala sent Jackson a Notice of Termination, terminating the 8 parties’ franchise agreement for failure to pay royalties, advertising fees, and rent 9 despite repeated notice and opportunity to cure. (Id. ¶ 19.) Pursuant to the terms of the 10 parties’ franchise agreement, this terminated Defendants’ license to use Kahala’s 11 Pinkberry trademarks. 12 franchise. On October 1, 2021, Kahala’s attorney visited the franchise location and 13 noted “long lines of customers” and employees “busy serving customers with 14 PINKBERRY products.” (Decl. Jennifer Y. Ro (“Ro Decl.”) ¶ 4.) Jackson, for his part, 15 wants to continue to operate the franchise location and has applied for emergency loans 16 from the Small Business Administration in order to, among other things, pay any money 17 it may owe to Kahala or to Pinkberry, Inc. (Jackson Decl. ¶ 11.) (Id.) Nevertheless, Defendants continue to operate their 18 On October 12, 2021, Kahala filed this action, setting forth claims for and related 19 to trademark infringement under federal and state law. (Compl., ECF No. 1.) Kahala’s 20 central allegation is that Defendants improperly continue to use the Pinkberry 21 trademarks in breach of the parties’ license agreement and are therefore infringing those 22 trademarks. (Id. ¶¶ 43–44.) After Kahala filed this Motion, Defendants defaulted, but 23 the Court set aside the default and allowed Defendants to oppose. (Min. Order, ECF 24 No. 34.) 25 III. LEGAL STANDARD 26 A preliminary injunction is an “extraordinary remedy” courts may grant to 27 preserve the status quo pending trial to prevent immediate and irreparable injury. 28 Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 22 (2008); Fed. R. Civ. P. 65(a); see 3 1 Univ. of Tex. v. Camenisch, 451 U.S. 390, 395 (1981) (“The purpose of a preliminary 2 injunction is merely to preserve the relative positions of the parties until a trial on the 3 merits can be held.”). To obtain a preliminary injunction, the plaintiff must clearly 4 establish: (1) a likelihood of success on the merits; (2) that the plaintiff will suffer 5 irreparable harm if the preliminary relief is not granted; (3) that the balance of equities 6 tips in the plaintiff’s favor; and (4) that the injunction is in the public interest. See 7 Winter, 555 U.S. at 20. Under 15 U.S.C. § 1116(a) as modified by the Trademark 8 Modernization Act of 2020, a plaintiff seeking an injunction to prevent trademark 9 infringement is entitled to a rebuttable presumption of irreparable harm upon a finding 10 of likelihood of success on the merits. Cisco Sys., Inc. v. Wuhan Wolon Commc’n Tech. 11 Co., No. 5:21-cv-04272-EJD, 2021 WL 4962661, at *7 (N.D. Cal. July 23, 2021) 12 (quoting Pub. L. No. 116-260 (2020)); Vineyard House, LLC v. Constellation Brands 13 U.S. Operations, Inc., No. 4:19-cv-01424-YGR, 2021 WL 254448, at *14, n. 16 14 (N.D. Cal. Jan. 26, 2021); cf. Vision Sports, Inc. v. Melville Corp., 888 F.2d 609, 612 15 n.3 (9th Cir. 1989) (“In trademark infringement or unfair competition actions, once the 16 plaintiff establishes a likelihood of confusion, it is ordinarily presumed that the plaintiff 17 will suffer irreparable harm if injunctive relief is not granted.”). 18 The party moving for the preliminary injunction bears the burden of establishing 19 its need. Traeger Pellet Grills, LLC v. Dansons US, LLC, 421 F. Supp. 3d 876, 882 20 (D. Ariz. 2019). The moving party must meet this burden with a “clear showing” that 21 the preliminary injunction is warranted. Conn. Gen. Life Ins. Co. v. New Images of 22 Beverly Hills, 321 F.3d 878, 881 (9th Cir. 2003). Moreover, in ruling on an application 23 for preliminary injunction, the court may consider evidence that would not be 24 admissible at trial. See, e.g., Johnson v. Couturier, 572 F.3d 1067, 1083 (9th Cir. 2009) 25 (“A district court may . . . consider hearsay in deciding whether to issue a preliminary 26 injunction.”). 27 28 4 IV. 1 DISCUSSION 2 For the following reasons, although Kahala has shown some measure of 3 likelihood of success on the merits of its claims, thus entitling it to a presumption of 4 irreparable harm, Defendants rebut this presumption in at least equal measure. 5 Moreover, the balance of equities tips somewhat in Defendants’ favor. 6 preliminary injunctive relief is not appropriate. 7 A. Thus, Likelihood of Success on the Merits 8 “In the trademark context, ‘state common law claims of unfair competition and 9 actions pursuant to the California Business and Professions Code § 17200 are 10 substantially congruent to claims made under the Lanham Act.’” Alixir Co. v. Qué Onda 11 Beverage, Inc., No. 2:20-cv-08368-RGK-RAO, 2021 WL 971057, at *6 (C.D. Cal. 12 Jan. 6, 2021) (quoting Cleary v. News Corp., 30 F.3d 1255, 1262–63 (9th Cir. 1994)). 13 Both sides indicate they generally agree with this principle by arguing about trademark 14 infringement, and the effects thereof, without tethering the arguments to any particular 15 cause of action. The Court thus proceeds by focusing on Kahala’s primary claim for 16 trademark infringement under the Lanham Act. 17 infringement, a plaintiff must show: (1) that it has a valid, protectable trademark, and 18 (2) that defendant’s use of the mark is likely to cause confusion. Applied Info. Scis. 19 Corp. v. eBay, Inc., 511 F.3d 966, 969 (9th Cir. 2007) (citing Brookfield Commc’ns v. 20 W. Coast Entm’t Corp., 174 F.3d 1036, 1047, 1053 (9th Cir. 1999)). 21 demonstrates a moderately strong likelihood of success on the merits of its trademark 22 infringement claim. Defendants do not dispute that they owe money to Kahala due to 23 unpaid rents, royalties, and advertising contributions and are therefore in default. 24 Defendants also do not dispute that in the event of a default, the operative franchise 25 agreement allows Kahala to terminate the franchise agreement, including Defendants’ 26 right to use the Pinkberry trademarks. Further, Defendants do not dispute that Kahala 27 actually exercised its right of termination. Real Faith is therefore a terminated holdover 28 franchisee, and it is “well settled doctrine that a terminated franchisee’s continued use 5 To prove a claim of trademark Kahala 1 of its former franchisor’s trademarks, by its very nature, constitutes[] trademark 2 infringement.” Burger King Corp. v. Majeed, 805 F. Supp. 994, 1006 (S.D. Fla. 1992); 3 Century 21 Real Estate LLC v. All Prof’l Realty, Inc., 600 F. App’x 502, 508 (9th Cir. 4 2015) (finding trademark infringement where franchisee continued to use franchisor’s 5 mark without consent following termination of franchise agreements and noting 6 likelihood of confusion that would arise from holdover franchisee’s use of mark); Gen. 7 Motors LLC v. W. Covina Motors, Inc., No. CV 15-705-JFW (AGRx), 2015 WL 8 12762063, at *13 (C.D. Cal. Apr. 13, 2015). 9 1. Force majeure clause defense to nonpayment 10 The case, however, is not open-and-shut; Defendants present defenses which, if 11 meritorious, could imply that Kahala’s termination of the franchise agreement was 12 improper, which in turn would mean that Real Faith never lost its license to use the 13 Pinkberry trademarks, thus defeating Kahala’s claim of trademark infringement. First, 14 Defendants point to the force majeure clause in the franchise agreement, which excuses 15 either party from performance when the failure is due to certain losses created by 16 government orders and regulations or “acts of God.” (Jackson Decl. Ex. A (“Franchise 17 Agreement”) § 16.19, ECF No. 35-2.) Defendants argue that the COVID-19 pandemic 18 and the civil authority orders issued in connection therewith fall under the purview of 19 this force majeure clause, thus excusing Real Faith in whole or part from payment of its 20 obligations. (Opp’n 7–9.) 21 Admittedly, there are weaknesses in this defense. For example, Defendants 22 suggest that the force majeure clause applies when a government order causes any sort 23 of loss of profits that leads to an inability to pay. (Opp’n 8.) But this does not appear 24 to be the proper reading of the force majeure clause. Instead, the first part of the force 25 majeure clause applies when the government order creates a “transportation shortage[]” 26 or an “inadequate supply of equipment, merchandise, supplies, labor, material[,] or 27 energy,” which in turn creates an inability to pay. (Id.) Defendants submit no evidence 28 suggesting that any of these particular conditions occurred. 6 1 Nevertheless, it is possible that some COVID-19-related loss of profits could be 2 found to result from “acts of God” (the second part of the force majeure clause), which 3 in turn would “excuse performance, in whole or part, as may be reasonable,” under the 4 franchise agreement. (Id.) This defense thus has some cognizable merit. 2. 5 Waiver and reasonableness defenses to failure to transfer ownership of franchise 6 7 Nonpayment is not the only basis on which Kahala terminated the franchise 8 agreement; it also terminated for Jackson’s failure to transfer the franchise following 9 the passing of Ms. Jackson. (Lane Decl. Ex. E (“Notice of Default”) § A, ECF No. 14- 10 10.) In response, Defendants raise the defense of waiver. Specifically, Defendants 11 argue Kahala waived its right to terminate the franchise agreement on the basis of failure 12 to transfer because, for over a year after any breach of the transfer terms, Kahala 13 continued to accept payments from Real Faith and allow it to operate the franchise. 14 (Opp’n 10.) 15 This argument has substantial merit. “[W]aiver may be either express, based on 16 the words of the waiving party, or implied, based on conduct indicating an intent to 17 relinquish the right.” See Wind Dancer Prod. Grp. v. Walt Disney Pictures, 10 Cal. App. 18 5th 56, 78 (2017). Thus, courts applying California law2 “will find waiver when a party 19 intentionally relinquishes a right or when that party’s acts are so inconsistent with an 20 intent to enforce the right as to induce a reasonable belief that such right has been 21 relinquished.” Old Republic Ins. Co. v. FSR Brokerage, Inc., 80 Cal. App. 4th 666, 678 22 (2000); cf. Wyler Summit P’ship v. Turner Broad. Sys., 135 F.3d 658, 662 (9th Cir. 1998) 23 (noting that waiver of a contractual provision “is a well-established principle of 24 California law”). Here, by allowing Real Faith to continue to operate the franchise for 25 over a year despite knowing that Jackson had not completed the transfer process, Kahala 26 clearly indicated that it intended not to terminate the franchise agreement on the sole 27 28 2 Neither party disputes that Defendants’ waiver argument should be applied and analyzed under California law. 7 1 basis of Jackson’s failure to transfer, and Jackson could have reasonably believed 2 Kahala had relinquished the right to do so.3 3 The Court could find, on this basis, that terminating the franchise agreement on 4 the basis of failure to transfer was inappropriate. Nevertheless, as discussed above, 5 Defendants do not as strongly rebut Kahala’s other reason for terminating the franchise 6 agreement: nonpayment. 7 likelihood of succeeding at demonstrating trademark infringement. 8 B. Overall, Kahala appears to have a moderately strong Irreparable Harm 9 Given that Kahala demonstrates a likelihood of success on its trademark 10 infringement claim, Kahala is statutorily entitled to a presumption of irreparable harm 11 for the purposes of its request for a preliminary injunction. 15 U.S.C. § 1116(a). This 12 presumption is rebuttable, meaning that Defendants may, upon a proper showing, 13 overcome it and demonstrate a lack of irreparable harm. Vital Pharms. v. PhD Mktg., 14 Inc., No. CV 20-6745-RSWL (JCx), 2021 WL 6881866, at *5 (C.D. Cal. Mar. 12, 15 2021). Such a showing might consist of a demonstration that the plaintiff delayed in 16 seeking the preliminary injunction, that the alleged injuries are purely pecuniary, or that 17 the non-movant has ceased or will soon cease the infringing activities. Id. 18 Defendants meet this burden. Defendants demonstrate that Real Faith’s franchise 19 is continuing to operate as a successful franchise, with many customers visiting the store 20 and no indication that Real Faith is running the franchise in a way that fails to meet 21 Kahala’s standards and expectations regarding the Pinkberry brand, such as by, for 22 example, selling inferior yogurt or allowing the premises to fall into disrepair. Thus, 23 while there may be confusion in the minds of the public (i.e., while the public might 24 think that Real Faith’s Pinkberry is a franchise authorized by the company that owns 25 26 27 28 3 The franchise agreement also provides that Kahala “shall not unreasonably withhold or delay [its] consent to a Transfer.” (Franchise Agreement § 12.4(c).) The Court could find that unreasonably high transfer fees constitute unreasonably withholding or delaying consent to a transfer. Neither party provided the Court with information about the actual amount of fees, though, so the Court is unable to determine the strength of this defense fully and fairly. 8 1 the Pinkberry marks), Kahala nevertheless fails to show how this confusion is causing 2 it any actual or potential harm. 3 The contrast between this case and Wetzel’s Pretzels, LLC v. Johnson, 797 F. 4 Supp. 2d 1020 (C.D. Cal. 2011), is instructive. The Wetzel’s Pretzels case also involved 5 a terminated holdover franchisee. The franchisor moved for a preliminary injunction to 6 stop the franchisee’s infringement of its trademarks in the Wetzel’s Pretzels brand. The 7 franchisor obtained a preliminary injunction, but the key distinguishing fact was that 8 the franchisor had submitted evidence showing that the franchisee had not complied 9 with upkeep and maintenance of the store so as to conform to standards set forth in the 10 franchise agreement. Id. at 1022. If a consumer was confused, believing that the owner 11 of the Wetzel’s Pretzels brand had given authorization to the franchise, the public would 12 associate an unmaintained, unkempt franchise with the Wetzel’s Pretzels brand, thus 13 harming the brand’s reputation. Id. at 1026–28 (discussing, at length, multiple visits 14 the franchisor made to the franchise, and the “deficiencies in the store’s upkeep and 15 maintenance” noted each time). Here, by contrast, Kahala makes no suggestion that 16 Defendants are running their franchise in an inferior manner, and if anything, as 17 discussed, the evidence from both sides suggests that the franchise is a popular location 18 that is representing the Pinkberry brand in a satisfactory manner. Without any evidence 19 indicating that Defendants are running the franchise in a deficient manner, the Court 20 cannot conclude that the harm arising from Defendants’ continued use of the Pinkberry 21 trademarks is irreparable or otherwise more than merely pecuniary. 22 Undeterred, Kahala argues that it has lost the ability to control Defendants’ use 23 of its marks, thus creating the potential for damage to its reputation, and it cites 24 CytoSport, Inc. v. Vital Pharms., Inc., 617 F. Supp. 2d 1051, 1080 (E.D. Cal. 2009) for 25 the proposition that “[p]otential damage to reputation constitutes irreparable injury for 26 the purpose of granting a preliminary injunction in a trademark case.” (Mot. 19.) 27 However, CytoSport was not a franchisor/franchisee case; instead, it was a suit by one 28 beverage maker against a different beverage maker who was marketing a completely 9 1 different beverage in a way that was causing confusion about its origin. Id. at 1060– 2 1062. The difference between the two products is what caused the “potential” for 3 damage to reputation. Id. at 1080–81. Moreover, in CytoSport, there was evidence that 4 customers believed the infringing product came from the mark holder and that the 5 product was inferior. Id. at 1063 (“One customer contacted plaintiff to complain that 6 he did not like the new formula for plaintiff’s . . . product; however, the customer had 7 actually purchased defendant’s . . . product and mistaken it for plaintiff’s product.”). 8 Here, there is no such difference between two products, or any cited difference for that 9 matter; the evidence indicates that Defendants are running the franchise like any other 10 Pinkberry franchise and are representing the brand in a satisfactory manner while doing 11 so.4 12 While Kahala might, after eventual trial of this matter, be entitled to a trademark 13 injunction prohibiting Defendants from continuing to use the Pinkberry marks, Kahala 14 is only entitled to the expedited, trial-less remedy of preliminary relief if it can show 15 that it is necessary to prevent irreparable harm. The Trademark Modernization Act of 16 2020 did not eliminate the irreparable harm requirement; it simply shifted which party 17 bears the ultimate burden of production on the issue. PhD Mktg, 2021 WL 6881866, 18 at *5 (“The presumption of irreparable harm acts as a procedural device which places 19 the ultimate burden of production on the question of irreparable harm onto the alleged 20 infringer.” (quoting Polymer Techs., Inc. v. Bridwell, 103 F.3d 970, 974 (Fed. Cir. 21 1996)) (cleaned up)). Here, Defendants meet their burden of production, thereby 22 23 4 24 25 26 27 28 Kahala’s principal legal error is that it repeatedly conflates case law regarding when a final trademark injunction is appropriate with case law regarding when a preliminary injunction in a trademark dispute is appropriate. The difference, of course, is the irreparable harm requirement. This is not, by any means, Kahala’s only legal error. Kahala’s briefs are once again laden with the sort of imprecise argumentation and inaccurate summarizing of cases that is anathema to sound legal reasoning and the orderly administration of justice. (See, e.g., Reply 8 (asserting that continued use of a trademark after termination of a franchise agreement “invariably” causes irreparable injury, followed by a series of citations, none of which states or suggests that this connection is “invariable”).) 10 1 rebutting the presumption of irreparable harm. Given that the presumption is rebutted, 2 the potential for irreparable harm is, in this case, too weak to support injunctive relief. 3 C. Balance of Equites; Public Interest 4 To prevail on a motion for preliminary injunction, a plaintiff must show that the 5 balance of equities tips in its favor. All. for the Wild Rockies v. Cottrell, 632 F.3d 1127, 6 1131 (9th Cir. 2011) (quoting Winter, 555 U.S. at 20). “In each case, a court must 7 balance the competing claims of injury and must consider the effect on each party of 8 the granting or withholding of the requested relief.” United Artists Corp. v. United 9 Artist Studios LLC, No. CV 19-828-MWF (MAAx), 2019 WL 3293650, at *13 (C.D. 10 Cal. June 3, 2019) (quoting Amoco Prod. Co. v. Village of Gambell, 480 U.S 531, 542 11 (1987)). Courts may consider the relative sizes of the respective businesses in balancing 12 the hardships. See Sardi’s Rest. Corp. v. Sardie, 755 F.2d 719, 726 (9th Cir. 1985) 13 (observing that “the relative size of the respective businesses . . . is certainly relevant to 14 the potential hardship” of complying with an injunction); see also Int’l Jensen, Inc. v. 15 Metrosound U.S.A., Inc., 4 F.3d 819, 827 (9th Cir. 1993) (providing that, in analyzing 16 the balance of hardships, “the relative size and strength of each enterprise may be 17 pertinent”). 18 In this case, the balance of equities slightly favors Defendants. If the Court grants 19 the Motion, Defendants will have to cease doing business as a Pinkberry franchise. 20 While Kahala suggests that such an injunction would not stop Defendants from selling 21 frozen yogurt, the Court is unconvinced by the contention that Defendants would be 22 able to continue to sustainably run an unbranded yogurt store with none of the assistance 23 it had previously received from Kahala regarding sourcing, training, branding, and 24 marketing. Thus, the Court can reasonably assume that granting the Motion will cause 25 business at the franchise location to cease, at least temporarily. This would have 26 negative consequences on both Kahala and Defendants: Kahala, because it would no 27 longer earn any royalties or other compensation from operation of the location, and 28 Defendants, because it would effectively eliminate most or all of their business income. 11 1 It would also have a negative impact on the public interest, which generally favors 2 continuity of business operations, especially when the business is a successful franchise 3 of a popular yogurt brand in a prime location. Moreover, Kahala, a large business, 4 would ostensibly be able to absorb the loss engendered by ceasing operations at the 5 franchise, whereas Real Faith, whose entire business is the franchise, would not. See 6 PhD Mktg., 2021 WL 6881866, at *8. 7 By contrast, denying the Motion will facilitate continuity of business operations. 8 Defendants could continue to operate the franchise, generating profits for themselves 9 and royalties for Kahala, while the parties work out their differences and Defendants 10 work toward complying with their contractual obligations to Kahala. (Cf. Jackson 11 Decl. ¶ 11 (noting Jackson’s intent “to work with Kahala and determine and pay what, 12 if any, amounts are owed”).) For the reasons noted above, any additional harm Kahala 13 might incur in this process is not irreparable and is instead compensable by way of 14 money damages. Nothing suggests that Defendants’ operation of the franchise is 15 deficient, and everyone stands to gain some sort of benefit by allowing operations to 16 continue, at least for the moment. Thus, the balance of equities tips somewhat in favor 17 of Defendants. The final consideration, the public interest, also tips slightly in Defendants’ favor, 18 19 for these same reasons. 20 Given that Defendants successfully rebut the presumption of irreparable harm 21 and the balance of equities and consideration of the public interest both weigh slightly 22 in Defendants’ favor, the Court finds that Kahala does not clearly demonstrate 23 entitlement to a preliminary injunction. Cf. PhD Mktg., 2021 WL 6881866, at *8 24 (“Under the facts of this case, a preliminary injunction is unwarranted because it may 25 work to alter the status quo more than it would to preserve it.”). 26 /// 27 /// 28 /// 12 V. 1 2 3 CONCLUSION For the reasons discussed above, the Court DENIES Kahala’s Motion for Preliminary Injunction. (ECF No. 14.) 4 5 IT IS SO ORDERED. 6 7 May 20, 2022 8 9 10 ____________________________________ OTIS D. WRIGHT, II UNITED STATES DISTRICT JUDGE 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 13
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