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February 2011

Los Angeles Team Secures Preliminary Injunction in Franchise Dispute

Los Angeles Partner Lisa Garner and Senior Counsel Aaron Rudin secured a preliminary injunction against a former real estate broker franchisee in the Eastern District of California. This was a hard fought case that originally began as a state court proceeding in Sacramento brought by the former franchisee alleging Gordon & Rees's franchisor client was in breach of contract for terminating the franchisee for failure to pay royalties.

Gordon & Rees removed the action to federal court where the parties then filed cross motions for preliminary injunction – Gordon & Rees sought to shut down the operations of the former franchisee while the franchise sought to remain in business using the franchisor's trademark.

After an initial hearing in which the judge expressed sympathy for the plight of the former franchisee, he ordered a full evidentiary hearing. This hearing was an all day mini trial with Lisa cross examining the former franchisees (without the benefit of depositions) to establish their breaches and the franchisor's  irreparable injury. The court entered its order granting our motion in full and denying the former franchisee's motion. The former franchisee subsequently filed an ex parte request to stay and/or modify the preliminary injunction, which was also denied.

Lisa K. Garner
Aaron P. Rudin