Raymond Potlongo, Jr. v. Herff Jones, LLC ( 2018 )

FILED
NOT FOR PUBLICATION
OCT 23 2018
UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
RAYMOND J. POTLONGO, JR.; No. 17-56815
GRADS R US, INC.,
D.C. No.
Plaintiffs-Appellees, 8:17-cv-01624-JLS-DFM
v.
MEMORANDUM*
HERFF JONES, LLC,
Defendant-Appellant.
Appeal from the United States District Court
for the Central District of California
Josephine L. Staton, District Judge, Presiding
Argued and Submitted August 8, 2018
Pasadena, California
Before: GRABER, WARDLAW, and CHRISTEN, Circuit Judges.
Herff Jones, LLC, appeals a district court order entering a preliminary
injunction in favor of Raymond J. Potlongo, Jr. and Grads R Us, Inc. We have
jurisdiction under 28 U.S.C. § 1292(a)(1), and we review for abuse of discretion.
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
Pimentel v. Dreyfus, 670 F.3d 1096, 1105 (9th Cir. 2012) (per curiam). We vacate
the injunction and remand.
Plaintiffs seeking preliminary injunctions must establish, among other
things, that they are “likely to suffer irreparable harm in the absence of preliminary
relief.” Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 20 (2008). We look to
federal law to determine whether a plaintiff has made such a showing. See Rent-A-
Center, Inc. v. Canyon Television & Appliance Rental, Inc., 944 F.2d 597, 600–03
(9th Cir. 1991) (applying federal standards to determine whether a preliminary
injunction should issue, but applying state law to the merits of the underlying
contract claim).
On this record, Potlongo and Grads did not establish a likelihood of
irreparable harm in the absence of a preliminary injunction for two reasons. First,
there is no evidence that the status quo would have changed if an injunction had
not issued. Potlongo avers that he is currently working for Herff Jones’s
competitor, and the record does not show that he will lose that position unless and
until Herff Jones secures and enforces a judgment against him. Second, Potlongo
and Grads present evidence of only economic injury, which does not qualify as
irreparable harm because it can be compensated by an award of money damages.
Rent-A-Center, 944 F.2d at 603. Although the loss of one’s business can constitute
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irreparable harm, see Am. Passage Media Corp. v. Cass Commc’ns, Inc., 750 F.2d
1470, 1474 (9th Cir. 1985), the record here does not demonstrate that the loss of
Potlongo’s business is likely. Moreover, this case does not present circumstances
similar to Arizona Dream Act Coalition v. Brewer, 757 F.3d 1053 (9th Cir. 2014),
Enyart v. National Conference of Bar Examiners, 630 F.3d 1153 (9th Cir. 2011),
or Chalk v. United States District Court, 840 F.2d 701 (9th Cir. 1988). Unlike
those cases, the record here demonstrates only a potential temporary job loss for
Potlongo, which he has not shown is likely to occur. The district court’s
conclusion as to irreparable harm thus lacked support from inferences that may be
drawn from facts in the record. Pimentel, 670 F.3d at 1105.
Because Potlongo and Grads did not establish a likelihood of irreparable
harm in the absence of preliminary relief, an injunction should not have issued.
Winter, 555 U.S. at 20.
VACATED and REMANDED. Costs on appeal are awarded to Herff
Jones, LLC.
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FILED
Potlongo v. Herff Jones, No. 17-56815
OCT 23 2018
WARDLAW, Circuit Judge, dissenting: MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
I respectfully dissent from the majority’s decision to vacate the injunction.
The majority concludes there is no irreparable harm because, first, the record does
not show that Potlongo would lose his job with Herff Jones’s competitor absent the
injunction, and second, Potlongo and Grads R Us, Inc. present evidence of
economic injury only. It reasons that although the loss of one’s business can
constitute irreparable harm, the “record does not demonstrate the loss of
Potlongo’s business is likely.”
But in reaching this conclusion, the majority fails to apply the correct
standards of review to the district court’s factual findings and conclusions of law.
We review the district court’s factual findings under the clearly erroneous
standard. United States v. Hinkson, 585 F.3d 1247, 1259–60 (9th Cir. 2009). We
review its legal conclusions de novo. Id. And we review the district court’s grant
of a preliminary injunction for abuse of discretion. Id.Turning first to the factual findings, the district court found “[a]fter
reviewing the Agreement and Herff Jones’ own plea for injunction in the Indiana
arbitration proceeding,” that the “restrictions would infringe on Potlongo’s
livelihood sufficiently to create a likelihood of irreparable injury.” Based on the
evidence before it, the district court found that an injunction would likely issue
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from the Indiana arbitration, which would result in Potlongo’s loss of livelihood
for four years. This finding is a mixed question of fact and law, and it is entitled to
deference on appeal unless the district court’s conclusion was based on clearly
erroneous factual findings. Hinkson, 585 F.3d at 1259; Darensburg v. Metro.
Transp. Comm’n, 636 F.3d 511, 518–19 (9th Cir. 2011).
But the majority does not even begin to explain why the district court’s
factual findings in this respect were clearly erroneous. Rather, the majority
engages in de novo review of the entire record, summarily concluding for itself
that “[o]n this record, Potlongo and [Grads R Us, Inc.] did not establish a
likelihood of irreparable harm.” The majority does not even attempt to explain
why it thinks an injunction is not likely to issue in the Indiana arbitration, nor does
it explain how the district court erred in concluding that the loss of Potlongo’s
livelihood and business are likely. Because the majority’s conclusions run
contrary to the district court’s factual findings, and those findings have not been
shown to be clearly erroneous, reversal is improper.
The district court concluded as a matter of law that such loss of livelihood
constitutes irreparable injury, as Potlongo “does not have an adequate remedy at
law.” In reaching this legal conclusion, the district court did not err. Our circuit’s
precedent is clear that loss of livelihood and the attendant effects of lost
employment may constitute irreparable harm. Am. Passage Media Corp. v. Cass
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Commc’ns, Inc., 750 F.2d 1470, 1474 (9th Cir. 1985); Drakes Bay Oyster Co. v.
Jewell, 747 F.3d 1073, 1092 (9th Cir. 2014); Nelson v. Nat’l Aeronautics and
Space Admin., 530 F.3d 865, 882 (9th Cir. 2008), petition for rehearing en banc
denied, 568 F.3d 1028 (9th Cir. 2009), rev’d on other grounds, 562 U.S. 134(2011).
Finally, nowhere does the majority identify just how the district court abused
its discretion in issuing the injunction. I would affirm the district court’s grant of a
preliminary injunction against Herff Jones.
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