Mm Dev. Co., Inc. v. Tryke Companies So Nv, Llc ( 2022 )


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  •                           IN THE SUPREME COURT OF THE STATE OF NEVADA
    MM DEVELOPMENT COMPANY, INC.,                          No. 81938
    D/B/A PLANET 13, A NEVADA
    CORPORATION,
    Appellant,                                              FILED
    vs.                                                  - APR 27 2022
    TRYKE COMPANIES SO NV, LLC, A
    NEVADA LIMITED LIABILITY
    COMPANY,
    Respondent.
    ORDER OF REVERSAL
    This is an appeal from a district court order granting a
    preliminary injunction. Eighth Judicial District Court, Clark County;
    James Crockett, Judge.
    Appellant MM Development Company, Inc. and respondent
    Tryke Companies SO NV, LLC are competitors in the Las Vegas cannabis
    industry, operating dispensaries located across the street from each other.
    MM Development operates a dispensary known as "Planet 13" and Tryke
    operates a dispensary known as "Reef."
    Tryke sued MM Development for civil conspiracy, aiding and
    abetting, and intentional interference with economic advantage, taking
    issue with Planet 13's policy of paying, as relevant here, rideshare drivers
    to bring passengers to its dispensary. Tryke alleged MM Development was
    working with rideshare drivers to unlawfully divert passengers from Reef
    to Planet 13. Tryke based these allegations on word of mouth and a "secret
    shopper" investigation, in which it found that some rideshare drivers were
    taking passengers to Planet 13 instead of their original intended
    destination, Reef.
    SUPREME COURT
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    (01 1947A asata,                                                                  2,-   13320
    „
    After the district court denied MM Development's motion to
    dismiss, Tryke moved for a preliminary injunction, which the district court
    granted. Under the preliminary injunction, (1) "Planet 13 is enjoined from
    paying any fee or commission to rideshare service drivers in exchange for
    bringing passengers to Planet 13 rather than another cannabis dispensary;
    and" (2) "Planet 13 is enjoined from advertising to rideshare drivere that it
    will pay them for such actions. MM Development appeals this preliminary
    injunction order.
    MM Development contends the district court erred by issuing
    the preliminary injunction because it argues that Tryke is not likely to
    succeed on the merits of its claims and that Tryke is not threatened by
    irreparable harm. MM Development also asserts the district court erred by
    not holding an evidentiary hearing and by issuing an injunction with overly
    broad terms.
    We review a district court's order granting a preliminary
    injunction for an abuse of discretion. Labor Comm'r v. Littlefield, 
    123 Nev. 35
    , 39, 
    153 P.3d 26
    , 28 (2007). A district court can abuse its discretion if it
    disregards controlling law. Shores v. Global Experience Specialists, Inc.,
    
    134 Nev. 503
    , 505, 
    422 P.3d 1238
    , 1241 (2018).
    Pursuant to NRS 33.010, a court may grant a preliminary
    injunction when the moving party proves "a reasonable probability of
    success on the merits and that the defendanes conduct, if allowed to
    continue, will result in irreparable harm for which compensatory damage is
    an inadequate remedy." Dixon v. Thatcher, 
    103 Nev. 414
    , 415, 
    742 P.2d 1029
    , 1029 (1987). This court has "determined that acts committed without
    just cause which unreasonably interfere with a business or destroy its credit
    or profits, may do an irreparable injury." State, Dep't of Bus. & Indus., Fin.
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    tO)   1947A    agEbe)
    Insts. Div. v. Nev. Assn Servs., Inc., 
    128 Nev. 362
    , 370, 
    294 P.3d 1223
    , 1228
    (2012) (internal quotation marks omitted). Such a situation may arise when
    a business creates a situation for a competitor that causes "public confusion,
    infring[es] on goodwill, and damag[es] reputation in the eyes of creditors."
    See Sobol v. Capital Mgmt. Consultants, Inc., 
    102 Nev. 444
    , 446, 
    726 P.2d 335
    , 337 (1986).
    The district court concluded Tryke was likely to succeed on the
    merits of its claims and that Tryke was faced with irreparable harm if the
    court did not issue the preliminary injunction. The court determined that
    Planet 13's practice of paying rideshare drivers was "causing substantial
    damage and irreparable harm to Tryke's sales and customer acquisitions
    that cannot be fully ascertained or redressed solely through money
    damages." It further concluded that Planet 13's business practices, if
    allowed to cont.inue, would "lead to irremediable loss of Tryke's brand value,
    consumer loyalty, and inherent goodwill of the dispensary itself."
    Both parties presented evidence to the district court to
    demonstrate that many other dispensaries and businesses in Las Vegas
    engage in this practice of paying rideshare drivers to bring passengers to
    their locations. As this court has stated, "[p]erhaps the most significant
    privilege or justification for interference with a prospective business
    advantage is free competition." Crockett v. Sahara Realty Corp., 
    95 Nev. 197
    , 199, 
    591 P.2d 1135
    , 1136 (1979); see also Restatement (Second) of Torts
    § 767 cmt. a (Am. Law Inst. 1979) ([T]here is a requirement that the
    interference be both intentional and improper."); Restatement (Second) of
    Torts § 768(1) & cmt. a (Am. Law Inst. 1979) (recognizing that "competition
    is not an improper basis for interference with a prospective relationship
    when certain conditions are present). Businesses are free to compete for
    3
    potential customers through all fair and reasonable means. Crockett, 95
    Nev. at 199, 
    591 P.2d at 1136
    .
    However, we need not resolve the issue of whether the district
    court erred in determining Tryke was likely to succeed on the merits of its
    tort claims because we conclude Tryke failed to meet its burden to prove
    that it will, absent injunctive relief, suffer irreparable harm for which
    compensatory damages would be an inadequate remedy. Notably, Tryke
    did not present evidence of harm from actual or prospective customers to
    prove any alleged irreparable harm. Mere conjecture about possible loss of
    business and reputation due to a competitor engaging in a business practice
    that is common in the local industry is insufficient to prove irreparable
    harm.   See Dixon, 103 Nev. at 415, 
    742 P.2d at 1029
     (providing that a
    plaintiff must prove that "the defendanes conduct, if allowed to continue,
    will result in irreparable harm for which compensatory damage is an
    insufficient remedy') (emphasis added). Thus, we conclude Tryke failed to
    show that any alleged harm could not be remedied by monetary damages.
    We additionally conclude Tryke failed to prove monetary
    damages would be difficult to calculate. See Dixon, 103 Nev. at 415, 
    742 P.2d at 1029
    ; see also Basicomputer Corp. v. Scott, 
    973 F.2d 507
    , 511 (6th
    Cir. 1992) ("[A]n injury is not fully compensable by money damages if the
    nature of the plaintiffs loss would make money damages difficult to
    calculate."). During oral argument, this court inquired as to how Planet
    13's actions created irreparable harm that could not be remedied by
    calculable monetary damages. Tryke could not identify any specific
    difficulty in how it could calculate damages, and instead continued to
    speculate that it might suffer generalized harm to its reputation for which
    monetary damages would be insufficient. In its rebuttal, MM Development
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    (0) 1947A    116 Nev. 455
    , 469, 
    999 P.2d 351
    , 360 (2000) (explaining that "a
    party seeking damages may utilize an expert economist to assist in the
    calculation of the total damages sustained" and "that damages need not be
    proven with mathematical exactitude," so long as the calculations are based
    on facts known to the expert).
    Any potential harm here is compensable and MM
    Development's tax records, under the circumstances presented here, are
    both discoverable and form an adequate basis to calculate damages. See
    NRCP 26(b)(1); NRCP 34; see also Hetter v. Eighth Judicial Dist. Court, 
    110 Nev. 513
    , 519, 
    874 P.2d 762
    , 765 (1994) (noting that there are various
    circumstances in which tax records may be discoverable). Therefore, we
    conclude the district court abused its discretion by issuing the preliminary
    injunction, and we
    ORDER the judgmer4 of the district court REVERSED.
    , J.
    Hardesty
    aire,
    , J.                                             J.
    Stiglich                                  Herndon
    1Because we conclude the district court incorrectly determined that
    Tryke will suffer irreparable harm and therefore abused its discretion in
    issuing the preliminary injunction, we need not consider MM
    Development's remaining arguments.
    5
    %.6
    cc:   Chief Judge, Eighth Judicial District Court
    Ara H. Shirinian, Settlement Judge
    Kemp Jones, LLP
    Hone Law
    Conant Law Firm
    Eighth District Court, Department 24
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    401 i947A    4VAD
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