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`Case 2:20-cv-02010-TLN-DMC Document 21 Filed 05/04/21 Page 1 of 7
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`UNITED STATES DISTRICT COURT
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`EASTERN DISTRICT OF CALIFORNIA
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`JOHN P. BAIRD; BRET KURIHARA; OS
`NEW MEXICO, LLC; BNS RD, LLC;
`SEAN SIMPSON; CHARLA SIMPSON;
`MARY JO MCHENRY; and K& L
`WELLNESS, LLC,
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`No. 2:20-cv-02010-TLN-DMC
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`
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`ORDER
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`Plaintiffs,
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`v.
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`OSTEOSTRONG FRANCHISING, LLC;
`KYLE ZAGRODZKY; and JOHN
`JAQUISH,
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`Defendants.
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`This matter is before the Court on Plaintiffs John P. Baird, Bret Kurihara, OS New
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`21
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`Mexico, LLC, BNS RD, LLC, Sean Simpson, Charla Simpson, Mary Jo McHenry, and K&L
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`22
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`Wellness, LLC’s (collectively, “Plaintiffs”) Motion for Preliminary Injunction.1 (ECF No. 4.)
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`Defendants OsteoStrong Franchising, LLC (“OsteoStrong”) and Kyle Zagrodzky (“Zagrodzky”)
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`(collectively, “Defendants”) have filed an opposition.2 (ECF No. 9.) Plaintiffs have filed a reply.
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`1
`Plaintiffs originally filed their motion as a Motion for a Temporary Restraining Order but
`the Court, in its November 6, 2020 Order, denied the Motion for a Temporary Restraining Order
`and instead construes it as a Motion for Preliminary Injunction. (ECF No. 5.)
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` 2
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`This action involves three named Defendants. Defendant John Jaquish (“Jacquish”) did
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`not join in this opposition.
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`Case 2:20-cv-02010-TLN-DMC Document 21 Filed 05/04/21 Page 2 of 7
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`(ECF No. 12.) For the reasons set forth herein, Plaintiffs’ motion is DENIED.
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`I.
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`FACTUAL AND PROCEDURAL BACKGROUND
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`OsteoStrong is a company that sells franchises for bone density improvement centers that
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`utilize osteogenic loading equipment.3 (ECF No. 1 at ¶ 22.) The equipment is branded as
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`“Spectrum equipment” pursuant to a non-exclusive license from Performance Health Systems.
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`(Id. at ¶¶ 19, 20.) OsteoStrong claims Spectrum equipment increases bone density, prevents
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`osteoporosis, and “diagnose[s], cure[s], mitigate[s], treat[s], or prevent[s] medical diseases.” (Id.
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`at ¶¶ 16, 89.)
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`Plaintiffs are small business owners and franchisees of OsteoStrong centers throughout the
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`United States. (ECF No. 4 at ¶¶ 1, 2.) Plaintiffs allege that OsteoStrong “intentionally omit[s]
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`certain information, mak[es] affirmative misrepresentations, and intentionally convey[s] false
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`information prior to executing the [franchise agreement] in an effort to induce potential
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`franchisees into signing the agreement.” (Id. at ¶ 35.) Specifically, Plaintiffs were harmed by
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`Defendants’ intentional omission of information regarding known bankruptcies and lawsuits in
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`Defendants’ Franchise Disclosure Document (“FDD”),4 their affirmative misrepresentation of the
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`patent rights and proprietary nature of OsteoStrong’s equipment, and their intentional
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`misrepresentation of their organizational relationship with motivational speaker Tony Robbins.
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`(Id. at ¶¶ 36, 42–47, 48–58, 59–65.)
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`Plaintiffs further allege that OsteoStrong also “create[s] an impossibility of performance
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`under the [franchise agreement] and negligently expos[es] franchisees to criminal and civil
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`liability.” (Id. at ¶ 35.) Specifically, OsteoStrong “violates [f]ederal law by marketing its system
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`3
`“Osteogenic loading” exercises are defined in the Complaint as equipment “intended to
`measure forces on bone and muscle, and through the application of force, or loads, foster
`strengthening of both bone and muscle tissue.” (ECF No. 1 at ¶ 17.)
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` 4
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`As Plaintiffs note, in accordance with the Federal Trade Commission’s Franchise Rule, 16
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`C.F.R. Parts 436 and 437, a franchisor is required to serve a complete and accurate FDD on each
`potential franchisee at least 14 days before entering into a Franchise Agreement (“FA”) with the
`potential franchisee. (Id. at ¶ 23.) Plaintiffs also note that they received and relied upon FDDs
`issued by OsteoStrong. (Id. at ¶¶ 37–41.)
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`Case 2:20-cv-02010-TLN-DMC Document 21 Filed 05/04/21 Page 3 of 7
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`as a medical treatment,” and further fails to comply with the Federal Food, Drug, and Cosmetic
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`Act (“FDCA”) and the U.S. Food and Drug Administration (“FDA”) regulations for medical
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`devices. (Id. at ¶¶ 67, 68–88.) Additionally, OsteoStrong “requires franchisees to use these same
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`marketing materials and practices” and “may unilaterally terminate the FA with the [f]ranchisee
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`for failure to do so.” (Id. at ¶¶ 67, 110.) Plaintiffs also allege that the FAs require them to
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`comply with “all applicable laws, regulations, codes, and ordinances including, without
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`limitation, all governmental regulations relating to sales and marketing, which includes the FDA.”
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`(Id. at ¶ 113.) However, Plaintiffs believe that performance under the FA is impossible because
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`OsteoStrong mandates the usage of marketing materials and practices that “[do] not comply with
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`all applicable laws, regulations, codes and ordinances.” (Id. at ¶ 114.) Plaintiffs assert that had
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`they been aware the marketing materials and practices provided to them were not in compliance
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`with local and federal laws, they would not have signed the FAs. (Id. at ¶ 120.)
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`On October 7, 2020, Plaintiffs filed a Complaint in this Court, alleging claims for: (1)
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`common law fraud; (2) common law fraudulent inducement; (3) common law negligent
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`misrepresentation by OsteoStrong; (4) common law negligent misrepresentation by Zagrodzky
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`and Jaquish in their individual capacity; (5) unjust enrichment; (6) violations of the California
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`Unfair Competition Law (“UCL”) (Cal. Bus. & Prof. Code §§ 17200–17210); (7) violations of
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`the California Corporations Code; (8) violations of 15 U.S.C. § 52; (9) violations of 35 U.S.C. §
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`292; (10) declaratory judgment that the franchise agreements are void as contracts for an illegal
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`purpose or otherwise contrary to public policy; and (11) preliminary and permanent injunctive
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`relief. (See ECF No. 1 at 36–50.)
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`On November 4, 2020, Plaintiffs filed the instant Motion for a Temporary Restraining
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`Order. (See ECF Nos. 4.) In its November 5, 2020 Order, the Court denied Plaintiffs’ Motion,
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`construing it instead as a Motion for Preliminary Injunction. (See ECF No. 5.) The Court found
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`the length of time between the first instance of alleged harm and Plaintiffs’ motion contradicts
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`Plaintiffs’ allegation of immediate, irreparable injury. (ECF No. 5 at 5 (citing ECF No. 1 at 12
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`(noting the years when Plaintiffs “received and relied upon an FDD” as 2013, 2014, 2015, and
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`2017)).) The Court also noted Plaintiffs failed to make a showing of immediate, irreparable
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`Case 2:20-cv-02010-TLN-DMC Document 21 Filed 05/04/21 Page 4 of 7
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`injury because they have not pleaded in their Complaint or demonstrated in their motion any
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`specific dates or times to signify that relief is urgently needed. (Id. at 6.) On December 3, 2020,
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`Defendants filed an opposition. (ECF No. 9.) On December 10, 2020, Plaintiffs filed a reply.
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`(ECF No. 12.)
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`II.
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`STANDARD OF LAW
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`Injunctive relief is “an extraordinary remedy that may only be awarded upon a clear
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`showing that the plaintiff is entitled to such relief.” Winter v. Nat. Res. Def. Council, Inc., 555
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`U.S. 7, 22 (2008) (citing Mazurek v. Armstrong, 520 U.S. 968, 972 (1997) (per curiam)). “The
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`purpose of a preliminary injunction is merely to preserve the relative positions of the parties until
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`a trial on the merits can be held.” Univ. of Tex. v. Camenisch, 451 U.S. 390, 395 (1981); see also
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`Costa Mesa City Emps. Ass’n v. City of Costa Mesa, 209 Cal. App. 4th 298, 305 (2012) (“The
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`purpose of such an order is to preserve the status quo until a final determination following a
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`trial.”); GoTo.com, Inc. v. Walt Disney, Co., 202 F.3d 1199, 1210 (9th Cir. 2000) (“The status quo
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`ante litem refers not simply to any situation before the filing of a lawsuit, but instead to the last
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`uncontested status which preceded the pending controversy.”).
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`“A plaintiff seeking a preliminary injunction must establish [1] that he is likely to succeed
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`on the merits, [2] that he is likely to suffer irreparable harm in the absence of preliminary relief,
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`[3] that the balance of equities tips in his favor, and [4] that an injunction is in the public interest.”
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`Winter, 555 U.S. at 20. A plaintiff must “make a showing on all four prongs” of the Winter test
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`to obtain a preliminary injunction. Alliance for the Wild Rockies v. Cottrell, 632 F.3d 1127, 1135
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`(9th Cir. 2011). In evaluating a plaintiff’s motion for preliminary injunction, a district court may
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`weigh the plaintiff’s showings on the Winter elements using a sliding-scale approach. Id. A
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`stronger showing on the balance of the hardships may support issuing a preliminary injunction
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`even where the plaintiff shows that there are “serious questions on the merits . . . so long as the
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`plaintiff also shows that there is a likelihood of irreparable injury and that the injunction is in the
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`public interest.” Id. Simply put, plaintiffs must demonstrate, “that [if] serious questions going to
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`the merits were raised [then] the balance of hardships [must] tip[ ] sharply” in [p]laintiffs’ favor
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`in order to succeed in a request for preliminary injunction. Id. at 1134–35.
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`Case 2:20-cv-02010-TLN-DMC Document 21 Filed 05/04/21 Page 5 of 7
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`III. ANALYSIS
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`Plaintiffs specifically request Defendants be enjoined from the following:
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`• Representing that their Spectrum equipment or the OsteoStrong system is able
`to diagnose, treat, or cure any medical condition or using claims like “reversing
`Osteoporosis” or “reversing type 2 Diabetes;”
`• Representing that OsteoStrong owns any patented technology;
`• Representing that the equipment is safe;
`• Representing that Tony Robbins is a Partner in OsteoStrong;
`• Ceasing to provide access to services and support as required under the
`Franchise Agreement and as established by regular practice for the operation of
`the franchises.
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`(ECF No. 4.)
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`In opposition to the instant motion, Defendants argue Plaintiffs cannot show immediate,
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`irreparable harm for three reasons: (1) Plaintiffs’ motion is now moot because they have
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`permanently ceased operating their businesses, meaning Plaintiffs seek an injunction “based on
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`alleged past wrongs only because they cannot now be wronged again”; (2) Plaintiffs do not allege
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`any evidence to show actual harm has been threatened against them or is imminent, nor do they
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`explain why injunctive relief is necessary after years of operating under the FAs; and (3)
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`Defendants do not engage in the conduct Plaintiffs seek to enjoin. (ECF No. 9 at 10–15
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`(emphasis removed).)
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`In reply, Plaintiffs assert their businesses are not permanently closed, as Plaintiffs still “(1)
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`have active agreements with OsteoStrong, (2) have active leases with landlords regarding
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`franchise space, (3) have clientele, (4) own the equipment, and (5) have continuing liability for
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`past and future conduct.” (ECF No. 12 at 3–4.) Plaintiffs maintain there has been no rescission
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`of the agreements, as they seek an injunction “based on continuing, present adverse harms.” (Id.
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`at 4–5.) Plaintiffs note the FDD and FA require them “to use marketing and advertising materials
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`which contain misrepresentations and falsities regarding the patented nat ure of the OsteoStrong
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`equipment, the degree of physical benefit consumers can receive from the equipment, the injury-
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`free nature of the equipment, and the diagnostic, treatment, and curative effects of the
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`equipment.” (Id. at 6.) Plaintiffs maintain these are misrepresentations because OsteoStrong’s
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`Case 2:20-cv-02010-TLN-DMC Document 21 Filed 05/04/21 Page 6 of 7
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`equipment has not been reviewed or approved as a medical device by the FDA and FDCA even
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`though OsteoStrong markets the equipment as a medical device, OsteoStrong does not own the
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`patent to the equipment in its facilities, and OsteoStrong’s equipment is not injury-free since
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`Plaintiffs and their clientele have experienced injuries. (Id.)
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`“An irreparable harm is one that cannot be redressed by a legal or equitable remedy
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`following trial.” Premier Nutrition, Inc. v. Organic Food Bar, Inc., 475 F. Supp. 2d 995, 1007
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`(C.D. Cal. 2007) (quoting Optinrealbig.com LLC v. Ironport Sys., 323 F. Supp. 2d 1037, 1051
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`(N.D. Cal. 2004); Public Util. Comm’n v. FERC, 814 F.2d 560, 562 (9th Cir. 1987)). Plaintiffs
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`seeking injunctive relief must prove that irreparable harm is likely, not just possible, in its
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`absence. Winter, 555 U.S. at 22; Alliance for the Wild Rockies, 632 F.3d at 1131. “Issuing a
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`preliminary injunction based only on a possibility of irreparable harm is inconsistent with [the
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`Supreme Court’s] characterization of injunctive relief as an extraordinary remedy . . .” Winter,
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`555 U.S. at 22. Speculative injury is insufficient to demonstrate irreparable injury. Goldie’s
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`Bookstore, Inc. v. Superior Court of Cal., 739 F.2d 466, 472 (9th Cir. 1984) (district court’s
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`finding that sublessee of commercial property would lose goodwill and “untold” customers was
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`speculative, as it was not based on any factual allegations); Center for Food Safety v. Vilsack, 636
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`F.3d 1166, 1172–73 (9th Cir. 2011) (district court abused its discretion in granting a preliminary
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`injunction with only past examples of harm and no mention of “continuing, present adverse
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`effects”).
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`Here, the Court need not address all of the parties’ arguments on imminent, irreparable
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`injury because it finds Defendants’ argument regarding Plaintiffs’ failure to demonstrate actual
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`harm persuasive. Despite the Court explicitly noting in its November 5, 2020 Order that
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`Plaintiffs have not pleaded in their Complaint or demonstrated any specific dates or times to
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`signify that relief is urgently needed (see ECF No. 5 at 5–6), Plaintiffs surprisingly once again fail
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`to convince the Court that any concrete harm is forthcoming in their reply. (See ECF No. 12.)
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`The crux of Plaintiffs’ argument is that they are currently being forced to choose between
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`continuing to abide by the FDD and FA and violating the law, or suffering the injury of obeying
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`the law and losing their businesses. (Id. at 4.) However, Defendants note that “Plaintiffs do not
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`Case 2:20-cv-02010-TLN-DMC Document 21 Filed 05/04/21 Page 7 of 7
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`cite any action that has been taken against them individually or against OsteoStrong by the FDA”
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`and that “[i]n OsteoStrong’s entire existence, OsteoStrong has never received a complaint from
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`the FDA.” (ECF No. 9 at 13 (emphasis in original).) The Court finds this point convincing as
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`evidence of lack of harm. Although Plaintiffs note that they and their clientele “have experienced
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`injuries all while OsteoStrong actively fails to record, report, or publish these incidents of injury”
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`(see ECF No. 12 at 6), Plaintiffs do not contend that OsteoStrong is required to do so through any
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`law or contractual obligation. Additionally, Plaintiffs do not provide any information about
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`complaints from their clientele or employees threatening civil action against them, nor do they
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`provide information about any impending criminal investigation or action. Based on the
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`foregoing, Plaintiffs’ contention is that irreparable harm is possible, not likely, which is
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`insufficient for injunctive relief. See Winter, 555 U.S. at 22; Alliance for the Wild Rockies, 632
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`F.3d at 1131. If there is evidence of actual imminent, irreparable harm in the future, Plaintiffs
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`may refile their motion.
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`As stated in its November 6, 2020 Order, if the Court finds that Plaintiffs have not met
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`their burden as to one Winter prong, then the Court need not address the remaining prongs as
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`Plaintiffs have not met their burden for injunctive relief. (ECF No. 5 at 5); see also Alliance for
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`the Wild Rockies, 632 F.3d at 1135 (stating that the Winter test requires a plaintiff to “make a
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`showing on all four prongs”). The Court once again finds Plaintiffs have failed to make a
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`showing of immediate, irreparable injury and therefore declines to address the remaining Winter
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`elements with respect to Plaintiffs’ Motion for Preliminary Injunction. (ECF No. 4.)
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`IV. CONCLUSION
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`For the foregoing reasons, the Court DENIES Plaintiffs’ Motion for a Preliminary
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`Injunction. (ECF No. 4.)
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`IT IS SO ORDERED.
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`DATED: May 3, 2021
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` Troy L. Nunley
` United States District Judge
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