United States District Court, N.D. Texas, Dallas Division
ALL TECH REPAIRS, INC., MOBILE SOLUTIONS, INC., and MOBILE SOLUTIONS ONE, INC., Plaintiffs,
MMI-CPR, LLC, Defendant.
MEMORANDUM OPINION AND ORDER
KINKEADE UNITED STATES DISTRICT JUDGE.
the Court is Plaintiffs' Application for Temporary
Restraining Order and Preliminary Injunction and Brief in
Support (the “Application”) (Doc. No. 8). After
carefully considering the Application, the response, the
reply, Plaintiffs' Original Petition (Doc. No. 1), and
the law, the Court DENIES the Application as
to Plaintiffs' request for a temporary restraining order
because Plaintiffs have failed to clearly carry their burden
to establish that the substantial threat of injury is both
immediate and irreparable in this case.
Factual and Procedural Background
dispute in this case involves a contract between Plaintiff
All Tech Repairs, Inc. (“All Tech”) and Defendant
MMI-CPR, LLC (“CPR”) that is an Area
Representative Agreement (“ARA”) between the two
parties. CPR is the franchisor for cell phone and electronic
device retail stores in Dallas, Texas and other areas. All
Tech is an “Area Developer” for CPR. All
Tech's primary responsibilities are to open, and recruit
other interested parties to open, retail stores as
franchisees of CPR. Plaintiff Mobile Solutions, Inc.
(“MSI”) is a franchisee of CPR with several
stores. Plaintiff Mobile Solutions One, Inc.
(“MSO”) serves as the operating company for
MSI's stores. All Plaintiffs have common ownership.
Tech and CPR are parties to the ARA, which details the
responsibilities related to All Tech's position as an
Area Developer. Under the ARA, All Tech receives certain
payments for newly opened stores in its assigned geographic
territory, as well as 50% of “continuing monthly
[r]oyalty fees” collected from franchisee stores in the
January 2019, CPR sent All Tech a Notice of Termination of
the ARA based on alleged failures by All Tech to (1) develop
the required number of stores under the ARA and (2) conduct
surveys and provide support to the franchisees in its
territory. All Tech alleges that after this Notice of
Termination, CPR has failed to pay the royalty fees due to
All Tech under the ARA. All Tech alleges that because CPR
refuses to pay these fees to All Tech, All Tech is funding
some of MSI's stores from its reserves.
initiated the instant case in state court alleging two
claims. Plaintiffs first seek a declaration from the Court
that the Notice of Termination is invalid and that the ARA is
still in effect because CPR issued it without complying with
a provision of the ARA that requires CPR provide notice of
default and an opportunity to cure. Plaintiffs also allege
that CPR breached the ARA on three different grounds,
including a failure to pay royalty fees to All Tech. CPR
timely removed the case to this Court on May 1, 2019.
Plaintiffs filed the Application with this Court on May 17,
2019, and the Application is now fully briefed.
temporary restraining order is “simply a highly
accelerated and temporary form of preliminary injunctive
relief, ” meaning a movant seeking such relief must
establish the same four elements for obtaining a preliminary
injunction. Lee v. Verizon Commc'ns Inc., Civ.
Action No. 3:12-CV-4834-D, 2012 WL 6089041, at *1 n.2 (N.D.
Tex. Dec. 7, 2012) (Fitzwater, C.J.) (quoting Hassani v.
Napolitano, Civ. Action No. 3:09-CV-1201-D, 2009 WL
2044596, at *1 (N.D. Tex. July 15, 2009) (Fitzwater, C.J.))
To be entitled to a temporary restraining order, a movant
must demonstrate that it meets a four-prong test: (1) a
substantial likelihood of success on the merits; (2) a
substantial threat of immediate and irreparable harm for
which the movant has no adequate remedy at law; (3) that
greater injury will result from denying the temporary
restraining order than if it is granted; and (4) that a
temporary restraining order will not disserve the public
interest. Daniels Health Scis., L.L.C. v. Vascular Health
Scis., L.L.C., 710 F.3d 579, 582 (5th Cir. 2013).
“The decision to grant or deny a preliminary injunction
is discretionary with the district court.” Miss.
Power & Light Co. v. United Gas Pipe Line Co., 760
F.2d 618, 621 (5th Cir. 1985). Because a temporary
restraining order, like a preliminary injunction, is an
extraordinary remedy, it should not be granted unless the
movant has “‘clearly carried the burden of
persuasion' on all four requirements.”
Bluefield Water Ass'n v. City of Starkville, 577
F.3d 250, 253 (5th Cir. 2009) (quoting Lake Charles
Diesel, Inc. v. Gen. Motors Corp., 328 F.3d 192, 195-96
(5th Cir. 2003)). Failure to sufficiently establish any one
of the four elements requires this Court to deny the
movant's request for a temporary restraining order.
See Enter. Int'l, Inc. v. Corporacion Estatal
Petrolera Ecuatoriana, 762 F.2d 464, 472 (5th Cir.
Court turns first to the second requirement that Plaintiffs
must establish: a substantial threat of immediate and
irreparable harm for which they have no adequate remedy at
[movant] seeking to show irreparable harm must show that: (a)
harm to the [movant] is imminent; (b) the injury would be
irreparable; and (c) the [movant] has no other adequate legal
remedy.” Mannatech, Inc. v. Wellness Quest,
LLC, Civ. Action No. 3:14-CV-2497-K, 2014 WL 11515729,
at *1 (N.D. Tex. Nov. 4, 2014) (Kinkeade, J.) (citing
Conlay v. Baylor Coll. of Med., Civ. Action No.
H-08-1038, 2010 WL 774162, at *5 (S.D. Tex. Mar. 3, 2010)).
“For purposes of injunctive relief, an adequate remedy
at law exists when the situation sought to be enjoined is
capable of being remedied by legally measurable
damages.” Dresser-Rand Co. v. Virtual Automation
Inc., 361 F.3d 831, 848 (5th Cir. 2004). “Loss of
income, compensable after trial on the merits, or financial
distress, does not constitute irreparable injury.”
Dig. Generation, Inc. v. Boring, 869 F.Supp.2d 761,
781 (N.D. Tex. 2012) (Lindsay, J.) (citing Sampson v.
Murray, 415 U.S. 61, 90 (1974)). The “exception to
[this] general rule that damages cannot be compensable in
monetary relief . . . applies only in cases ‘where the
potential economic loss is so great as to threaten the
existence of the movant's business' or where a
business ‘would suffer a substantial loss of business
and perhaps even bankruptcy' absent injunctive
relief.” Id. (quoting Doran v. Salem Inn,
Inc., 422 U.S. 922, 932 (1975)). “[L]oss of
customers or goodwill” is only an irreparable harm when
the movant “show[s] that the loss cannot be measured in
money damages.” Id. at 778 (citing
Millennium Rests. Grp., Inc. v. City of Dallas, 181
F.Supp.2d 659, 666 (N.D. Tex. 2001) (Fish, J.)).
discussing their potential irreparable harm, Plaintiffs
describe much of the potential harm in terms of lost income,
lost customers, and financial distress. The Court only
considers these potential aspects of Plaintiffs' harm
“irreparable” to the extent they either (1) are
immeasurable in money damages or (2) demonstrate a
substantial threat to Plaintiffs' existence. See Dig.
Generation, Inc., 869 F.Supp.2d at 778, 781. Outside of
a few conclusory statements, Plaintiffs fail to demonstrate
why these potential losses would be immeasurable in money
damages, so the Court focuses its analysis on Plaintiffs'
argument concerning the potential threat to their existence.
interrelated reasons, the Court finds that Plaintiffs do not
clearly carry their burden to establish a substantial threat
of immediate and irreparable harm in arguing that Plaintiffs
face a substantial threat of having to close or file
bankruptcy. The Court first turns to the issue of
Plaintiffs' delay in seeking injunctive relief, an issue
CPR raises in its response. The dispute concerning the ARA
originated in January 2019, Plaintiffs filed for a temporary
injunction in state court on April 17, 2019, and, after
removal to this Court on May 1, 2019, Plaintiffs only
formally moved this Court for a temporary restraining order
and preliminary injunction on May 17, 2019. In their reply
brief, Plaintiffs explain that the delay in seeking
injunctive relief stems from good-faith negotiations with
opposing counsel in an effort to avoid litigation. Plaintiffs
support this contention with the declaration of Amin Lakhani
and certain letters from their counsel to CPR's general
counsel spanning from January 2019 to early April 2019. The
Court recognizes that unlike other cases in which movants
failed to sufficiently justify their delay in seeking
injunctive relief, Plaintiffs here do provide some
explanation for the delay. See Wireless Agents, L.L.C. v.
T-Mobile, USA, Inc., Civil Action No. 3:05-CV- 0094-D,
2006 WL 1540587, at *5 (N.D. Tex. June 6, 2006) (Fitzwater,
J.) (“Beyond these statements in its brief, however,
[the movant] does not direct the court to evidence that
defendants are responsible for the delay, nor does it seek
leave to file with its reply brief a supplemental appendix
containing such evidence.”) The Court credits
Plaintiffs' attempt to negotiate a solution between the
parties and recognizes that such attempt is justification for
some delay in pursuing injunctive relief; however, the Court
notes that this requested injunctive relief is only an
“emergency” because Plaintiffs claim they will
deplete their reserves by the end of May. In other words,
while the Court has no issue with Plaintiffs attempting to
negotiate a resolution without litigation, Plaintiffs were
aware of the harm posed by withheld royalties no later than
February 2019, the first time CPR withheld a regular royalty
payment, and Plaintiffs still chose to continue negotiations
rather than take measures to protect themselves from the
potential of lost ...