Eric Kwan v. City of Los Angeles ( 2021 )

NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS MAR 10 2021
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
TURO INC., No. 20-55729
Plaintiff-counter- D.C. No.
defendant, 2:18-cv-06055-CAS-GJS
v.
MEMORANDUM*
CITY OF LOS ANGELES,
Defendant-counter-claimant-
Appellee,
v.
ERIC KWAN; et al.,
Counter-defendants-
Appellants.
TURO INC., No. 20-55731
Plaintiff-counter- D.C. No.
defendant-Appellant, 2:18-cv-06055-CAS-GJS
v.
CITY OF LOS ANGELES,
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
Defendant-counter-claimant-
Appellee,
and
ERIC KWAN; et al.,
Counter-defendants.
Appeal from the United States District Court
for the Central District of California
Christina A. Snyder, District Judge, Presiding
Argued and Submitted January 13, 2021
Pasadena, California
Before: CALLAHAN and WATFORD, Circuit Judges, and RAKOFF,** District
Judge.
Turo Inc., an online car-sharing platform, and Eric Kwan, Andras
Smulovics, and Andrey Kornakov, individuals who rent out their vehicles through
Turo, appeal from the district court’s issuance of a preliminary injunction
prohibiting them from arranging or conducting any vehicle handoffs at Los
Angeles International Airport (“LAX”) without first obtaining authorization from
the City of Los Angeles (the “City”). We have jurisdiction over the appeal from
the issuance of the preliminary injunction under 28 U.S.C. § 1292(a)(1), and we
reverse the order granting the injunction, vacate the injunction, and remand for
**
The Honorable Jed S. Rakoff, United States District Judge for the
Southern District of New York, sitting by designation.
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further proceedings.
1. Turo, Kwan, Smulovics, and Kornakov contend that the district court
erred in entering a preliminary injunction against them. To be entitled to a
preliminary injunction, the moving party must establish “that he is likely to
succeed on the merits, that he is likely to suffer irreparable harm in the absence of
preliminary relief, that the balance of equities tips in his favor, and that an
injunction is in the public interest.” Winter v. Nat. Res. Def. Council, Inc., 555
U.S. 7, 20 (2008). “We review the district court’s determination that the plaintiff
satisfied each of these four factors for abuse of discretion.” Perfect 10, Inc. v.
Google, Inc., 653 F.3d 976, 979 (9th Cir. 2011). “A district court abuses its
discretion when its decision relies ‘on an erroneous legal standard or clearly
erroneous finding of fact.’” Arc of Cal. v. Douglas, 757 F.3d 975, 983 (9th Cir.
2014) (quoting All. for the Wild Rockies v. Cottrell, 632 F.3d 1127, 1131 (9th Cir.
2011)).
We hold that the district court erred in determining that the City met its
burden to establish that it was likely to suffer irreparable harm in the absence of a
preliminary injunction. To establish a likelihood of irreparable harm, the moving
party must provide more than conclusory or speculative allegations. Herb Reed
Enter., LLC v. Fla. Ent. Mgmt., Inc., 736 F.3d 1239, 1250 (9th Cir. 2013).
“Issuing a preliminary injunction based only on a possibility of irreparable harm is
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inconsistent with our characterization of injunctive relief as an extraordinary
remedy that may only be awarded upon a clear showing that the plaintiff is entitled
to such relief.” Winter, 555 U.S. at 22.
Here, the district court based its determination that the City would likely
suffer irreparable harm on its finding that, as of 2018, “approximately 127 vehicles
were handed off at LAX as a result of Turo every day” and that Turo’s “operations
are in fact specifically impacting traffic flow at LAX—at least to some degree.”
But the record also shows that, during the same period, there were more than
30,000 pickups and drop offs at LAX per day by transportation network companies
(like Uber and Lyft), taxis, and limousines. Counting all forms of traffic, the City
alleges that approximately 100,000 vehicles pass through LAX’s central terminal
area per day. Turo also presented expert opinion testimony, unrebutted by the
City, stating that “Turo user handoff volumes are immaterial and essentially
unnoticeable in the context of overall traffic volumes at LAX.” On this record, we
conclude that the City has not adequately shown that Turo’s 127 transactions at
LAX per day impact traffic conditions at the airport to such a degree that the City
will be irreparably harmed in the absence of immediate relief.
Having determined that the City has not made an adequate showing of the
likelihood of irreparable harm on this record, we need not address the parties’
arguments regarding the remaining elements of the preliminary injunction test. See
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DISH Network Corp. v. F.C.C., 653 F.3d 771, 782 (9th Cir. 2011).
2. Turo also seeks review of the district court’s denial of Turo’s motion
to dismiss the City’s counterclaims on the ground that they are barred by Section
230 of the Communications Decency Act, 47 U.S.C. § 230. Turo asserts that the
issues presented in the motion to dismiss are “inextricably intertwined” with the
review of the merits of the preliminary injunction, which this court separately has
jurisdiction to review under 28 U.S.C. § 1292(a)(1). Arc of Cal., 757 F.3d at 992–
93 (quoting Melendres v. Arpaio, 695 F.3d 990, 996 (9th Cir. 2012)). Because we
do not address the City’s likelihood of success on the merits in the context of its
request for a preliminary injunction, we decline to exercise pendent jurisdiction
over Turo’s appeal from the denial of the motion to dismiss. See Perfect 10, Inc.,
653 F.3d at 982 n.3.
We therefore REVERSE the district court’s order granting the City’s
motion for a preliminary injunction, VACATE the preliminary injunction, and
REMAND for further proceedings consistent with this disposition.
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