Antitrust Law Daily Wrap Up, FRANCHISING & DISTRIBUTION—C.D. Cal.: 911 Restoration ‘cleans up’ in request for injunctive relief against former franchisees, (Nov 19, 2015)

By Michael Menzhuber, J.D., LL.M.

The federal district court in Los Angeles entered a permanent injunction against former 911 Restoration Franchise franchisees, prohibiting them from continuing to operate their franchise businesses or continuing to use any trademarks belonging to the franchisor. The court also entered a final monetary judgment against the franchisees (911 Restoration Franchise, Inc. v. Blakeney, November 17, 2015, Real, M.).

911 Restoration, a franchisor of water damage repair businesses, obtained a default judgment against former franchisees for trademark infringement. After obtaining the judgment, Restoration brought an action for a final judgment and permanent injunction against the defendants.

The court entered a final judgment in the principal amount of $239,926, plus attorney’s fees and costs, against each of the defendants. It also granted a permanent injunction against the defendants after determining that Restoration had a likelihood of success on the merits; there was a potential for irreparable harm to Restoration; a balancing of hardships favored Restoration; and the public interest favored granting relief.

The court determined that there was a likelihood of success on the merits because Restoration’s registration of the trademark was prima facie evidence of its exclusive right to use it and Restoration had sufficiently demonstrated the likelihood of confusion and had proffered evidence of the defendants’ continued use of its trademark.

The defendants’ continued use of the Restoration trademark created the potential for irreparable harm to Restoration’s goodwill because Restoration would be unable to oversee and control the defendants’ work and customer service.

The balance of hardships was found to favor Restoration because the franchisor would likely suffer injury to its goodwill in the absence of injunctive relief and the defendants were not faced with any risk if injunctive relief was granted, other than not being able to continue to benefit from Restoration’s trademark recognition.

Finally, the public interest favored granting relief because, in the absence of injunctive relief, there was a high likelihood of confusion and there is a strong public interest in preventing customer confusion and fraud.

The case is No. 2:15-cv-00629-R-SH.

Attorneys: Ethan O. Michael (Lebedev Michael and Helmi) for 911 Restoration Franchise Inc.

Companies: 911 Restoration Franchise Inc.; 911 Restoration of Cleveland Ohio, Inc.

Cases: FranchisingDistribution CaliforniaNews