Future Motion, Inc. v. Herbert et.al. ( 2020 )

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 SAN JOSE DIVISION 7 FUTURE MOTION, INC., 8 Case No. 3:20-cv-01647-EJD Plaintiff, 9 ORDER DENYING PLAINTIFF’S EX v. PARTE MOTION FOR A 10 TEMPORARY RESTRAINING ORDER STEPHEN HERBERT, 11 Re: Dkt. No. 6 Defendant. 12 13 On March 6, 2020, Plaintiff Future Motion, Inc. filed, ex parte, a motion for a temporary 14 restraining order against Defendant Stephen Herbert. Ex Parte Motion for TRO and Preliminary 15 Injunction (“TRO Mot.”), Dkt. No 6. On March 10, 2020 the case was reassigned to the 16 undersigned. Dkt. No. 17. For the reasons discussed below, the Court DENIES the motion. 17 This case arises under California contract law and the Lanham Act. Plaintiff creates and 18 sells the ONEWHEEL ®, which is a “self-balancing electric vehicle.” TRO Mot. at 6. Plaintiff 19 requires all of its distributors and dealers to sign an agreement that includes various restrictions on 20 pricing, advertising, and other dealer activities. Id. at 7. Dealers must agree to sell Plaintiff’s 21 products from brick-and-mortar stores—Plaintiff prohibits its dealers from selling the 22 ONEWHEEL ® online due to safety concerns. Id. Plaintiff’s “vehicles” use high-density lithium 23 ion batters, which can be damaged if stored or shipped improperly. Id. Improper storage or 24 shipping could lead to unexpected battery failure and result in rider injury or even death. Id. at 7– 25 8. 26 Defendant, doing business as “Tactical Sky,” signed a dealer agreement with Future 27 Case No.: 3:20-cv-01647-EJD 1 Motion in 2017. Id. at 2. Plaintiff alleges (and provides evidence) that Defendant has been selling 2 Plaintiff’s vehicles on Amazon.com through the storefront “AuthenticDirect.” Id. at 8; see also id. 3 at 8–9 (stating that Plaintiff repurchased from the “AuthenticDirect” online store front one of the 4 wheels Defendant bought from Plaintiff as part of Defendant’s wholesale-dealer); see also id. at 9 5 (stating that Defendant failed to respond to Plaintiff’s demand letter).1 Defendant is allegedly 6 using “AuthenticDirect” to disguise his online sales. Id. at 2. According to Plaintiff, these online 7 sales breach the dealer agreement and violate the Lanham Act. Id. at 8–9. Plaintiff now seeks a 8 temporary restraining order and for an order to show cause requiring Defendant to demonstrate 9 why the Court should not issue a preliminary injunction continuing the relief granted in the 10 temporary restraining order. See id. at 19–20. 11 “The same legal standard applies to a motion for a temporary restraining order and a 12 motion for a preliminary injunction.” Henry Schein, Inc. v. Cook, 191 F. Supp. 3d 1072, 1076 13 (N.D. Cal. 2016). “A plaintiff seeking either remedy must establish that he is likely to succeed on 14 the merits, that he is likely to suffer irreparable harm in the absence of preliminary relief, that the 15 balance of equities tips in his favor, and that an injunction is in the public interest.” Id. (internal 16 citation and quotation omitted). On a temporary restraining order, a plaintiff must demonstrate 17 that there exists a significant threat of irreparable injury. See, e.g., Baker DC v. NLRB, 102 F. 18 Supp. 3d 194, 198 (D.D.C. 2015). 19 Here, Plaintiff has failed to show that a significant threat of irreparable harm exists. 20 Plaintiff argues that they are harmed by: the loss of Future Motion’s exclusive trademark rights 21 resulting in consumer confusion about the material qualities of Future Motion’s products, 22 “immeasurable damage” to Future Motion’s standing as the only authorized online seller of its 23 products, and irreparable harm to Future Motion’s hard-earned goodwill and reputation among 24 consumers, when online purchasers discover that the products they purchased are not covered by 25 26 1 The Court notes that Plaintiff alleges Defendant Herbert controls Tactical Sky and 27 AuthenticDirect. Accordingly, for purposes of this TRO, the Court treats these parties the same. Case No.: 3:20-cv-01647-EJD 1 the Future Motion warranty, and were stored and shipped in uncontrolled conditions, which could 2 || cause the batteries to explode and cause injury. /d. at 15. The Court is unclear what 3 “immeasurable damage” or “market-share harm” Plaintiff refers to. By Plaintiff’s own admission, 4 || Defendant lawfully purchased the wheels from Plaintiff. See TRO Mot. at 2. Hence, Plaintiff has 5 |} not lost money or market share from Defendant’s online store—Defendant bought the wheel from 6 || Plaintiff, paid money to Plaintiff for the wheel, and then resold the wheel online, in violation of 7 the Parties’ contract. Plaintiff has thus suffered contractual harms, which can be remedied by 8 economic damages. Furthermore, Plaintiff controls the distribution of wheels. It can stop 9 Defendant’s online sales by ceasing to provide Defendant with products. 10 Additionally, Plaintiff provides this Court with no evidence that the lithium ion batteries 11 are actually imploding. Speculation does not meet the burden to show that a “significant threat of 12 || irreparable injury” exists. See Baker DC, 102 F. Supp. 3d at 198. Finally, goodwill and 13 reputational harm can be quantified and redressed through economic damages. Plaintiff has not 14 shown evidence to the contrary. For these reasons, Plaintiff has not met its burden and the Court 3 15 || DENIES Plaintiffs motion for a temporary restraining order. A 16 IT IS SO ORDERED. 2 17. || Dated: March 11, 2020 18 EDWARD J. DAVILA 19 United States District Judge 20 21 22 23 24 25 26 Case No.: 3:20-cv-01647-EJD 28 || ORDER DENYING PLAINTIFF’S EX PARTE MOTION FOR A TEMPORARY RESTRAINING ORDER .