Case 2:18-cv-06055-CAS-GJS Document 89-1 Filed 03/17/20 Page 1 of 54 Page ID #:730
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`DAVID W. KESSELMAN (#203838)
`dkesselman@kbslaw.com
`AMY T. BRANTLY (#210893)
`abrantly@kbslaw.com
`KESSELMAN BRANTLY
`STOCKINGER LLP
`1230 Rosecrans Avenue, Suite 400
`Manhattan Beach, CA 90266
`Tel: (310) 307-4555 | Fax: (310) 307-4570
`
`MICHAEL N. FEUER, City Attorney (#111529)
`mike.feuer@lacity.org
`RAYMOND ILGUNAS, General Counsel (#105874)
`rilgunas@lawa.org
`LOS ANGELES CITY ATTORNEY’S OFFICE
`Airport Division, 1 World Way
`Los Angeles, CA 90045
`Tel: (424) 646-5010 | Fax: (424) 646-9212
`SCOTT P. LEWIS (Pro Hac Vice)
`slewis@andersonkreiger.com
`DAVID S. MACKEY (Pro Hac Vice)
`dmackey@andersonkreiger.com
`MELISSA C. ALLISON (Pro Hac Vice)
`mallison@andersonkreiger.com
`CHRISTINA MARSHALL (Pro Hac Vice)
`cmarshall@andersonkreiger.com
`50 Milk Street, 21st Floor
`Boston, MA 02109
`Tel: (617) 621-6500 | Fax: (617) 621-6600
`Attorneys for Defendant and Counterclaim-Plaintiff
`CITY OF LOS ANGELES
`UNITED STATES DISTRICT COURT
`CENTRAL DISTRICT OF CALIFORNIA – WESTERN DIVISION
`TURO INC.,
`Case No. 2:18-CV-06055-CAS-GJS
`Judge: Honorable Christina A. Snyder
`MEMORANDUM OF POINTS AND
`AUTHORITIES IN SUPPORT OF
`CITY OF LOS ANGELES’S MOTION
`FOR PRELIMINARY INJUNCTION
`Hearing Date:
`April 27, 2020
`Time:
`10:00 a.m.
`Place:
`Courtroom 8D
`
`Plaintiff,
`
`v.
`CITY OF LOS ANGELES,
`Defendant.
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`MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF CITY OF
`LOS ANGELES’S MOTION FOR PRELIMINARY INJUNCTION
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`

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`Case 2:18-cv-06055-CAS-GJS Document 89-1 Filed 03/17/20 Page 2 of 54 Page ID #:731
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`CITY OF LOS ANGELES, on its own
`behalf and on behalf of the People of
`the State of California,
`Counterclaim-Plaintiff,
`
`v.
`TURO INC., ERIC KWAN, ANDRAS
`SMULOVICS, and ANDREY
`KORNAKOV D/B/A 101 CAR
`RENTAL,
`Counterclaim-Defendants.
`
`Complaint filed: July 12, 2018
`Trial Date: November 3, 2020
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`MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF CITY OF
`LOS ANGELES’S MOTION FOR PRELIMINARY INJUNCTION
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`TABLE OF CONTENTS
`INTRODUCTION ................................................................................................ 1
`I.
`II. FACTS .................................................................................................................. 2
`A. Background. ..................................................................................................... 2
`B. Turo’s Operations at LAX. .............................................................................. 5
`C. The High Volume Hosts’ Operations at LAX. ................................................ 6
`D. The City’s Attempts to Regulate Turo. ........................................................... 7
`III. PROCEDURAL HISTORY ................................................................................. 8
`IV. ARGUMENT ................................................................................................... 8
`A. To Prevail on this Motion, the City is Only Required to Show A Likelihood
`of Success on the Merits and that the Balance of Equities Tips in Its Favor. . 8
`B. The City is Likely to Prevail on the Merits of its Counterclaims. ................ 10
`1. The City is Likely to Prevail on Its Claims in Count I, that Turo and the
`High Volume Hosts are Violating the Los Angeles Municipal Code and
`the Ground Transportation Rules and Regulations. ................................. 11
`2. The City is Likely to Prevail on Its Claims Against the High Volume
`Hosts in Count II, that They Are Trespassing at LAX. ............................ 13
`3. The City is Likely to Prevail on Its Claim in Count III, that Turo is
`Aiding and Abetting the Trespass By the High Volume Hosts. .............. 15
`C. The Balance of Equities Tips Decidedly in the City’s Favor ........................ 17
`D. Even Under the Four-Part Injunction Standard Requiring Irreparable Harm
`and Consideration of the Public Interest, the City is Entitled to Preliminary
`Relief.............................................................................................................. 19
`V. CONCLUSION ................................................................................................... 21
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`Case No. 2:18-CV-06055-CAS-GJS
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`MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF CITY OF
`LOS ANGELES’S MOTION FOR PRELIMINARY INJUNCTION
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`
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`TABLE OF AUTHORITIES
`
`Page(s)
`
`
`Cases
`
`Arc of Cal. v. Douglas,
`757 F.3d 975 (9th Cir. 2014) .................................................................. 20
`Bank of Stockton v. Church of Soldiers,
`44 Cal. App. 4th 1623 (Cal. Ct. App. 1996) .......................................... 14,20
`Boldface Licensing + Branding v. By Lee Tillett, Inc.,
`940 F. Supp. 2d 1178 (C.D. Cal. 2013) .................................................. 18
`Cassinos v. Union Oil Co.
`14 Cal. App. 4th 1770 (Cal. Ct. App. 1993) .......................................... 13, 14
`City of Los Angeles v. Belridge Oil Co.,
`42 Cal. 2d 823 (1954), appeal dismissed, 348 U.S. 907 (1955) ............ 9
`City of N.Y. v. Golden Feather Smoke Shop,
`597 F.3d 115 (2d Cir. 2010) ................................................................... 1, 9
`Cuviello v. City of Vallejo,
`944 F.3d 816 (9th Cir. 2019) .................................................................. 20
`Disney Enters., Inc. v. Vidangel, Inc.,
`224 F. Supp. 3d 957 (C.D. Cal. 2016) .................................................... 20
`Donahue Schriber Realty Grp., Inc. v. Nu Creation Outreach,
`232 Cal. App. 4th 1171 (Cal. Ct. App. 2014) ........................................ 13, 14,20
`Drakes Bay Oyster Co. v. Jewell,
`747 F.3d 1073 (9th Cir. 2014) ................................................................ 21
`eBay v. Bidders’ Edge, Inc.,
`100 F. Supp. 2d 1058 (N.D. Cal. 2000).................................................. 14,18
`Federal Trade Comm’n v. Consumer Def. LLC,
`926 F.3d 1208 (9th Cir. 2019) ................................................................ 1,9,10,17
`Ferrone v. Rossi,
`311 Mass. 591 (Mass. 1943)................................................................... 20
`General Motors Corp. v. Urban Gorilla, LLC,
`500 F.3d 1222 (10th Cir. 2007) .............................................................. 18
`iv
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`LOS ANGELES’S MOTION FOR PRELIMINARY INJUNCTION
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`Hensley v. San Diego Gas & Elec. Co.,
`7 Cal. App. 5th 1337 (Cal. Ct. App. 2017)............................................. 13,16
`IT Corp. v. County of Imperial,
`35 Cal.3d 63 (Cal. 1983) ........................................................................ 9 n.3
`King v. City Council of Augusta,
`277 U.S. 100 (1928) ............................................................................... 10
`Massachusetts Port Auth. v. Turo, Inc.,
`No. 1984-CV-01773-BLS-1, 2020 WL 1028822 (Mass. Super. Ct.
`Jan. 24, 2020) .......................................................................................... passim
`Miller v. National Broadcasting Co.,
`187 Cal. App. 3d 1463 (Cal. Ct. App. 1986) .......................................... 13
`Navel Orange Admin. Comm. v. Exeter Orange Co.,
`722 F.2d 449 (9th Cir. 1983) .................................................................. 9
`New York v. BB’s Corner,
`No. 12 Civ. 1828 (KBF), 2012 WL 2402624 (S.D.N.Y. Jun. 25,
`2012) ....................................................................................................... 9
`Novartis Consumer Health, Inc. v. Johnson & Johnson-Merck Consumer
`Pharm. Co., 290 F.3d 578 (3d Cir. 2002) .............................................. 18
`Ralph’s Grocery Co. v. Victory Consultant’s Inc.,
`17 Cal. App. 5th 245 (Cal. Ct. App. 2017)............................................. 13
`Register.com, Inc. v. Verio, Inc.,
`126 F. Supp. 2d 238 (S.D.N.Y. 2000) .................................................... 19
`Ride the Ducks of Phila., LLC v. Duck Boat Tours, Inc.,
`138 Fed. App’x 431 (3d Cir. 2005) ........................................................ 18
`Saunders v. Superior Ct.,
`27 Cal. App. 4th 832 (Cal. Ct. App. 1994)............................................. 15, 17 n.5
`S.E.C. v. Capital Cove Bancorp LLC,
`No. SACV 15-980-JLS (JCx), 2015 WL 9704076 (C.D. Cal. Sep. 1,
`2015) ....................................................................................................... 9
`
`Segundo v. Rancho Mirage City,
`873 F.2d 1277 (9th Cir. 1989) ................................................................ 10
`
`Case No. 2:18-CV-06055-CAS-GJS
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`MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF CITY OF
`LOS ANGELES’S MOTION FOR PRELIMINARY INJUNCTION
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`
`
`United States v. Chemicals for Research & Indus.,
`10 F. Supp. 2d 1125 (N.D. Cal. 1998).................................................... 9
`United States v. Hayes Int’l Corp.,
`415 F.2d 1038 (5th Cir. 1969) ................................................................ 9
`United States v. Odessa Union Warehouse Co-op,
`833 F.2d 172 (9th Cir. 1987) .................................................................. 1,9
`Usrey v. Chen,
`No. CV 14-1134-GW (AJWx), 2014 WL 12570232 (C.D. Cal. May
`29, 2014) ................................................................................................ 18
`Winter v. Natural Res’s. Def. Council,
`555 U.S. 7 (2008) ................................................................................... 9
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`Page(s)
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`Page(s)
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`Page(s)
`Statutes
`Cal. Gov. Code § 50474(f) ................................................................................ 2,9,11,13
`Communications Decency Act, 47 U.S.C. § 230 et seq. .................................. 7
`
`Rules
`
`Fed. R. Civ. P. 65 .............................................................................................. 1
`
`Municipal Charters and Regulations
`
`Los Angeles City Charter § 605(a) ................................................................... 3
`Los Angeles City Charter § 631 ....................................................................... 3,13
`Los Angeles City Charter § 632(b) ................................................................... 3
`Los Angeles Municipal Code § 171.02 ............................................................ passim
`LAWA Ground Transportation Rules and Regulations § 1.37 ........................ 4,12
`LAWA Ground Transportation Rules and Regulations § 3.2.1.1 .................... passim
`LAWA Ground Transportation Rules and Regulations § 3.2.1.3 .................... passim
`LAWA Ground Transportation Rules and Regulations § 5.3 .......................... 3,4,10,11
`LAWA Ground Transportation Rules and Regulations § 12.1 ........................ 3, 10
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`LOS ANGELES’S MOTION FOR PRELIMINARY INJUNCTION
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`Other Authorities
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`Black’s Law Dictionary 1410 (9th ed. 2009) .................................................. 12
`Restatement (Second) of Torts § 876 (1979) ................................................... 15
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`I.
`
`INTRODUCTION
`Pursuant to Fed. R. Civ. P. 65, the defendant and counterclaim-plaintiff, the City
`of Los Angeles (the “City”), submits this memorandum of points and authorities in
`support of its motion for a preliminary injunction. The City seeks to enjoin Turo, Inc.
`(“Turo”), Eric Kwan, Andras Smulovics, and Andrey Kornakov d/b/a 101 Car Rental
`(collectively the “High Volume Hosts”) from operating an unauthorized car rental
`business at Los Angeles International Airport (“LAX”).
`It is well settled that when the government moves for a preliminary injunction to
`enforce a law that authorizes injunctive relief, it need not make a showing of
`irreparable harm. United States v. Odessa Union Warehouse Co-op, 833 F.2d 172,
`175-176 (9th Cir. 1987); City of N.Y. v. Golden Feather Smoke Shop, 597 F.3d 115,
`120-121 (2d Cir. 2010). Instead, the courts only require the moving party to
`demonstrate that it is likely to prevail on the merits and that the balance of hardships
`tips in its favor. Federal Trade Comm’n v. Consumer Def. LLC, 926 F.3d 1208, 1212-
`1214 (9th Cir. 2019) (“Consumer Defense”). The City meets that standard here.
`The City is likely to prevail on the merits of Count I of its Second Amended
`Answer and Counterclaims (“Counterclaims”), that Turo and the High Volume Hosts
`are violating the Los Angeles Administrative Code and the Ground Transportation
`Rules and Regulations in effect at LAX. Infra pp. 11-13. Those provisions forbid
`Turo and the High Volume Hosts from conducting commercial activity at LAX
`without authorization from the City, and Turo and the High Volume Hosts have neither
`sought nor received the City’s permission to operate their rental car business at LAX.
`The City is also likely to prevail on Count II against the High Volume Hosts, that they
`are trespassing at LAX, and on Count III against Turo, that it is aiding and abetting
`their trespass. Infra pp. 13-17. A Superior Court judge in Massachusetts recently
`addressed these same claims and concluded that Turo hosts are “undoubtedly”
`trespassing at Logan Airport in Boston, and concluded “without difficulty” that Turo is
`aiding and abetting that trespass. Massachusetts Port Auth. v. Turo, Inc., No. 1984-
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`MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF CITY OF
`LOS ANGELES’S MOTION FOR PRELIMINARY INJUNCTION
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`
`CV-01773-BLS-1, 2020 WL 1028822, at *6-7 (Mass. Super. Jan. 24, 2020)
`(“Massachusetts Port Authority”) (attached as Exhibit A).1
`The balance of equities also tips decidedly in the City’s favor. Without an
`injunction, the City will be required to endure the High Volume Hosts’ trespass
`throughout the litigation, which will result in harm to the City’s property rights and its
`ability to enforce its regulatory power over the roads and terminal curbs at LAX,
`resulting in additional congestion and delays and potential public safety issues. Turo
`and the High Volume Hosts, on the other hand, have not received any permission to
`operate at LAX, and have violated the requirements applicable to rental car companies
`operating there. In short, Turo has built its business on trespass at LAX, and it has no
`basis to claim hardship if it is ordered to stop. Infra pp. 17-20. This Court should
`enter the requested injunctive relief.
`FACTS
`II.
`A. Background.
`The City is a municipal corporation that owns and operates LAX through its
`Department of Airports, known as Los Angeles World Airports (“LAWA”).
`Counterclaims ¶ 127.2 Pursuant to Cal. Gov. Code § 50474(f), the City, through
`LAWA, is empowered to “[r]egulate the use of the airport and facilities and other
`property or means of transportation within or over the airport.” In turn, pursuant to the
`Los Angeles Municipal Code (“LAMC”) § 171.02(b), “no person shall engage in any
`business or commercial activity of any kind whatsoever on the Airport without first
`having applied for and obtained the appropriate license, lease or permit therefor.”
`(Pertinent portions are attached as Exhibit B). According to § 171.02(o), any person
`
`
`1 Turo has filed a Notice of Appeal from this ruling and is seeking a stay of the
`injunction pending appeal.
`2 The allegations of the Counterclaims have been verified in the accompanying
`Declaration of Michelle A. Irwin.
`
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`Case No. 2:18-CV-06055-CAS-GJS
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`MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF CITY OF
`LOS ANGELES’S MOTION FOR PRELIMINARY INJUNCTION
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`violating that provision “may be promptly removed from the Airport and deprived of
`its use.”
`The Los Angeles City Charter (“Charter”) delegates to LAWA the authority to
`enforce these regulations on airport property. The Charter gives LAWA’s Board of
`Airport Commissioners “the possession, management and control of all airports,
`airport sites and all equipment, accommodations and facilities for aerial navigation,
`flight, instruction and commerce belonging to the City.” Los Angeles City Charter
`§ 631. The Charter also grants to LAWA the authority to “make and enforce all
`necessary rules and regulations governing the use and control of City owned or
`controlled airports located inside and outside of the City,” id. § 632(b), and to “grant
`and set the terms and conditions for any franchise, concession, permit, license, or lease
`concerning any property under its control.” Id. § 605(a).
`Pursuant to its authority under the Charter, LAWA has promulgated Ground
`Transportation Rules and Regulations (“GT Rules and Regulations”) for LAX.
`(Pertinent portions are attached as Exhibit C). Section 3.2.1.1 of the GT Rules and
`Regulations provides that “[p]ursuant to LAMC § 171.02, no person shall be engaged
`in any business or commercial activity of any kind whatsoever on the Airport without
`first having applied for and obtained the appropriate operating authority, and/or permit
`therefore.” In order to operate at LAX, ground transportation entities must “maintain
`current and valid Airport Operating Authority and Permits.” Id. § 3.2.1.3.
`“[V]iolations of the above rules and regulations may lead to the temporary suspension
`of the right to operate on the Airport on a per Operator or per vehicle basis. Repeated
`violations may lead to longer suspensions…. The immediate suspensions of vehicles
`will result from violations of safety and authorization rules.” Id. § 12.1.
`The GT Rules and Regulations govern rental car company operations at LAX.
`Under GT Rules and Regulations § 5.3, rental car companies that have not entered into
`an agreement with the City are “prohibited from causing [their] drivers, employees,
`agents, contractors, or licensees to load Rental Car Company customers at the
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`MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF CITY OF
`LOS ANGELES’S MOTION FOR PRELIMINARY INJUNCTION
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`Airport.” There is no doubt that Turo and the High Volume Hosts are covered by these
`regulations. Since 2015, the GT Rules and Regulations have specifically included
`“peer to peer car rental businesses and car sharing businesses” as “rental car”
`companies. GT Rules and Regulations § 1.37.
`Pursuant to LAMC § 171.02(b) and GT Rules and Regulations §§ 3.2.1.1,
`3.2.1.3 and 5.3, rental car companies operating at LAX must enter into either a Rental
`Car Concession Agreement or a Non-Exclusive License Agreement (“NELA”) with
`LAWA. On-Site Rental Car Concessionaires have the privilege of operating their
`shuttle buses in the Central Terminal Area (“CTA”), and in exchange must pay a gross
`receipts fee equal to 10% of all gross receipts the rental car company generates at
`LAX, subject to a Minimum Annual Guarantee (“MAG”) which is at least $730,000
`annually. Counterclaims ¶ 150. On-Site Rental Car Concessionaires will move to and
`occupy space in a planned Consolidated Rent-A-Car facility (“CONRAC”) once it
`opens in 2023. Id. As a result, they are also required to collect Customer Facility
`Charges (“CFCs”) from their customers and remit the CFCs to LAWA. Id. The CFCs
`are dedicated to construction costs and debt service for the CONRAC. Id.
`By contrast, rental car companies operating under a NELA are not permitted to
`operate shuttles in the CTA, but instead their customers take a LAWA-operated bus to
`the remote Rental Car Depot. They do not pay a gross receipts fee or collect CFCs, but
`instead must pay a flat monthly amount of $6,120 (which has increased 2% since the
`filing of the Counterclaims). Id. ¶ 151. Turo has not sought nor received a Rental Car
`Concession Agreement or a NELA, nor any other form of authorization to operate at
`LAX. Id. ¶¶ 211, 218.
`Traffic congestion at LAX, and particularly within the CTA and at the terminal
`curbs, is a pervasive and increasingly challenging problem. Id. ¶ 157. During peak
`periods, airport traffic often backs up onto neighborhood streets, causing delays off-
`airport in adjoining communities. Id. Construction at LAX of the Landside Access
`Modernization Program (“LAMP”) has increased these delays. Id. ¶ 160. As a result,
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`LAWA has taken significant steps to diminish airport vehicle traffic. On-site Rental
`Car Concessionaires are required to transport their passengers to their facilities by
`shuttle bus, and TNC and taxicab customers are required to walk or take a shuttle bus
`from the terminals to a lot known as “LAX-it.” Id. ¶ 161. Turo’s unauthorized,
`curbside vehicle hand-offs work directly at cross-purposes with these initiatives, and
`give Turo a significant operational advantage over car rental competitors operating
`lawfully.
`Turo’s Operations at LAX.
`B.
`Turo is a web-based rental car company that allows rental car businesses and
`individuals to list vehicles for rent that customers can pick up at various locations
`throughout the country, including airports nationwide. Counterclaims ¶ 162.
`Although Turo does not own any of the cars available for rent on its website, it is
`heavily involved in the rental process and provides a number of services to both car
`owners and car rental customers. Id. ¶ 163. It “enables” rental car transactions
`through agreements between Turo and vehicle owners, on the one hand, and Turo and
`vehicle renters, on the other. Id. ¶¶ 164-165. Specifically, Turo posts rental car
`listings from vehicle owners like the High Volume Hosts and allows customers to
`search for specific cars filtered by location and other factors. Id. ¶ 166. Turo collects
`the payment from customers, retains a portion of the payment, and remits the
`remainder to the vehicle owner. Id. ¶ 165. Turo provides vehicle owners with
`$1 million in liability insurance for each rental car, imposes “rigorous eligibility
`standards” for its vehicles, offers 24/7 roadside service and emergency support to its
`customers, and screens renters before allowing them to rent vehicles. Id. ¶¶ 167-168.
`Turo arranges for professional photographs of vehicles available for rent, displays
`them on its website, retains all rights to the photographs and can use them for any
`purpose. Id. ¶ 170. Turo sets the rental price for each car “based on market value,
`location, time of year, and other data sets.” Id. ¶ 171. Finally, Turo has a number of
`standardized policies applicable to all rentals, including a cancellation policy, a
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`cleaning policy, a late return policy, a fuel policy, a daily pricing policy, a smoking
`policy and a pet policy. Id. ¶ 172.
`Turo makes no effort to disguise the fact that it is a rental car company. Turo’s
`Los Angeles page on its website is entitled “Car Rental/Los Angeles, CA,” and it
`promotes its business in Los Angeles with statements such as “get yourself a sweet Los
`Angeles car rental,” and “Los Angeles is perfectly situated to book a car rental on
`Turo.” Id. ¶ 173.
`A large portion of Turo’s business comes from vehicles available to rent at
`airports. Id. ¶¶ 174-179. In promoting vehicles available for pick up at airports, Turo
`advertises that owners can “deliver to nearby airports,” id. ¶ 174, that customers can
`“[s]kip the rental counter,” id. ¶ 175, and instead pick up their cars directly at an
`airport terminal or an airport parking lot. Id. ¶ 176. Turo’s website promotes the
`availability of “Top cars in Los Angeles International Airport,” and boasts that there
`are “200 cars available for delivery to Los Angeles International Airport.” Id. ¶ 177.
`C.
`The High Volume Hosts’ Operations at LAX.
`Although Turo markets itself as a “peer-to-peer” car rental service focused on
`students and retirees, a great many of the vehicles available for rent at LAX on Turo’s
`platform are from individuals or rental car companies that own (or lease) and rent to
`customers large fleets of vehicles. Counterclaims ¶ 180. The City has named three of
`these High-Volume Hosts as counterclaim-defendants, each of whom is listed as an
`“All-Star Host” on Turo’s website, and has a large number of cars available for rent at
`LAX. Taken together, these three High Volume Hosts have made nearly 40,000 car
`rentals through Turo, and upon information and belief, a large number of those rentals
`have taken place at or near LAX. Id. ¶ 181.
`Counterclaim-defendant Eric Kwan has made more than 32,000 car rentals
`through Turo since 2016. Id. ¶ 182. On his Turo page, he advertises a “fleet” of over
`280 vehicles which, upon information and belief, are all available to rent at LAX. Id.
`Counterclaim-defendant Andras Smulovics has made more than 5,000 car rentals
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`through Turo since 2015. Id. ¶ 185. On his Turo page, Mr. Smulovics advertises 33
`vehicles available for rent, all of which may be picked up at LAX for a $35 surcharge.
`Id. Counterclaim–defendant Andrey Kornakov, d/b/a 101 Car Rental, has made more
`than 2,300 car rentals through Turo since 2017. 101 Car Rental currently lists 58
`vehicles available to rent which, upon information and believe, are all available for
`delivery to renters at LAX. Id. ¶ 187. In addition to its Turo page, 101 Car Rental
`maintains its own website, www.101carrental.com. Id. ¶ 188. On that page, 101 Car
`Rental describes itself as “a premium car rental company based in Los Angeles.” Id.
`101 Car Rental offers its vehicles to rent directly from its website as well as through
`Turo. Id. On its website, 101 Car Rental offers car delivery at LAX. Id. ¶ 187.
`D. The City’s Attempts to Regulate Turo.
`LAWA first became aware of Turo’s operations at LAX, and the fact that Turo’s
`hosts were picking up and dropping off customers in the CTA, in 2016. Counterclaims
`¶ 192. On November 7, 2016, LAWA sent Turo a letter notifying Turo that it could
`not conduct business in the CTA without a license, notifying Turo that it could seek
`either a Rental Car Concession Agreement or a NELA, and explaining that LAWA
`classified Turo as a rental car company. Id. ¶ 193.
`On November 17, 2016, Turo responded to LAWA’s letter, stating that
`“[b]ecause [Turo is] not operating a ‘vehicle rental business’ at Los Angeles
`International Airport we will not be seeking a concession agreement or a Non-
`Exclusive License Agreement for a remote off-airport rental car business at this time.”
`Id. ¶ 194. Turo continued to operate at LAX, and on January 30, 2017, LAWA sent a
`second letter reiterating that rental car operations included peer to peer vehicle sharing,
`and that Turo was required to have an agreement to operate at LAX. Id. ¶¶ 195-196.
`Turo ignored the letter and continued to operate at LAX. Id. ¶ 197.
`On April 3, 2017, LAWA sent the first of its cease and desist letters. Id. ¶ 198.
`Turo did not comply, and asserted for the first time that the Communications Decency
`Act, 47 U.S.C. § 230 et seq., immunized Turo from regulation. Id. ¶ 199. LAWA sent
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`a second cease and desist letter on June 27, 2017. Id. ¶ 200. Again, Turo failed to
`comply. Id. ¶ 202. Turo continues to operate at LAX to this day, and its business at
`LAX has grown dramatically. Turo generated $3.5 million in revenue from
`transactions at LAX in 2017, and its business doubled in 2018 and was projected to do
`the same in 2019. Id. ¶ 190.
`III. PROCEDURAL HISTORY
`On July 12, 2018, Turo filed this lawsuit against the City. Notwithstanding that
`Turo had no permission to conduct business on LAWA’s property, Turo took the
`position that the fees associated with LAWA’s Rental Car Concession Agreements and
`NELAs were excessive and violated various provisions of California law and the U.S.
`Constitution. On December 30, 2019, the City filed a motion to file counterclaims
`against Turo and three “High Volume Hosts,” which this Court granted on February
`19, 2020. The City filed its counterclaims on February 21, 2020, and now seeks this
`preliminary injunction.
`Turo has argued that the City’s Counterclaims are “nearly identical” to the claims
`the Massachusetts Port Authority (“Massport”), the owner of Logan Airport in Boston,
`filed against Turo in Massachusetts state court. Plaintiff Turo, Inc.’s Opposition to
`Defendant City of Los Angeles’ Motion to Modify Scheduling Order and File Second
`Amended Answer and Counterclaims, at 11. The Massachusetts court recently granted
`a preliminary injunction prohibiting Turo and vehicle owners advertising on Turo’s
`platform from conducting commercial operations at Logan. Massachusetts Port
`Authority, 2020 WL 1028822. This Court should do the same thing.
`IV. ARGUMENT
`A. To Prevail on this Motion, the City is Only Required to Show A
`Likelihood of Success on the Merits and that the Balance of Equities
`Tips in Its Favor.
`In a case like this, “involving statutory enforcement where the applicable statute
`authorizes injunctive relief, the traditional irreparable injury showing is not required.”
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`MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF CITY OF
`LOS ANGELES’S MOTION FOR PRELIMINARY INJUNCTION
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