Case 2:22-cv-00370-ODW-SK Document 13 Filed 01/24/22 Page 1 of 5 Page ID #:660

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88 United States District Court 99 Central District of California

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1111 INTRIVO DIAGNOSTICS, INC., Case No. 2:22-cv-00370-ODW (SKx)

1122 Plaintiff, ORDER DENYING EX PARTE 1133 v. APPLICATION FOR TEMPORARY

RESTRAINING ORDER [9]; AND

1144 ACCESS BIO, INC. et al.,

ORDER TO SHOW CAUSE RE

1155 Defendants. PRELIMINARY INJUNCTION

1166 1177 I. INTRODUCTION & BACKGROUND 1188 On January 19, 2022, Plaintiff Intrivo Diagnostics, Inc. initiated this action 1199 against Defendant Access Bio, Inc., asserting claims for breach of contract, intentional 2200 interference, and unlawful business practices. (See Notice of Removal, Ex. A 2211 (“Compl.”), ECF No. 1-1.) Intrivo alleges it contracted with Access Bio in 2222 October 2021 for Access Bio to produce and supply Intrivo with millions of over-the- 2233 counter COVID-19 rapid tests (“On/Go Tests”). (Id. ¶¶ 27–28.) Intrivo alleges 2244 Access Bio failed to supply more than half the tests promised and instead diverted its 2255 resources to producing its own COVID-19 tests for its own profit. (Id. ¶ 33.) 2266 On January 19, 2022, Intrivo filed an ex parte application for a temporary 2277 restraining order (“TRO”), primarily seeking an order prohibiting Access Bio from 2288 using its production resources for anyone except Intrivo until Access Bio has fulfilled Case 2:22-cv-00370-ODW-SK Document 13 Filed 01/24/22 Page 2 of 5 Page ID #:661

1 Intrivo’s promised test quantities. (TRO 5, ECF No. 9.) Access Bio opposes, 2 asserting that the parties never agreed that Access Bio would dedicate 100% of its 3 production capacity to only Intrivo’s brand of COVID-19 tests, and that any shortfalls 4 in supply to Intrivo have been caused by Intrivo or by production challenges resulting 5 from the pandemic. (Opp’n Ex Parte Appl. (“Opp’n TRO”) 18–20, ECF No. 12.) 6 For at least the reasons that follow, the Court DENIES Intrivo’s TRO, but 7 orders the parties to show cause why a preliminary injunction should not be granted. 8 II. LEGAL STANDARD 9 A temporary restraining order is an “extraordinary remedy that may only be 10 awarded upon a clear showing that the plaintiff is entitled to such relief.” Winter v. 11 Nat. Res. Def. Council, 555 U.S. 7, 22 (2008); see Earth Island Inst. v. Carlton, 12 626 F.3d 462, 469 (9th Cir. 2010) (discussing that plaintiffs “face a difficult task in 13 proving that they are entitled to this ‘extraordinary remedy’”). The standard for 14 issuing a temporary restraining order is “substantially identical” to that for issuing a 15 preliminary injunction. Stuhlbarg Int’l Sales Co. v. John D. Brush & Co., 240 F.3d 16 832, 839 n.7 (9th Cir. 2001). Pursuant to Federal Rule of Civil Procedure 17 (“Rule”) 65, a court may grant preliminary injunctive relief to prevent “immediate and 18 irreparable injury.” Fed. R. Civ. P. 65(b). To obtain this relief, a plaintiff must 19 establish the “Winter” factors: (1) the plaintiff “is likely to succeed on the merits”; 20 (2) the plaintiff “is likely to suffer irreparable harm in the absence of preliminary 21 relief”; (3) “the balance of equities tips in [the plaintiff’s] favor”; and (4) “an 22 injunction is in the public interest.” Am. Trucking Ass’ns, Inc. v. City of Los Angeles, 23 559 F.3d 1046, 1052 (9th Cir. 2009) (quoting Winter, 555 U.S. at 20). 24 Courts in the Ninth Circuit evaluate the Winter factors on a sliding scale: 25 “serious questions going to the merits[] and a balance of hardships that tips sharply 26 towards the plaintiff can support issuance of a preliminary injunction, so long as the 27 plaintiff also shows that there is a likelihood of irreparable injury and that the 28

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1 injunction is in the public interest.” All. for the Wild Rockies v. Cottrell, 632 F.3d 2 1127, 1135 (9th Cir. 2011) (internal quotation marks omitted). 3 III. DISCUSSION 4 The Court finds that the requested temporary restraining order is inappropriate. 5 It is not in the public interest and the Court is not persuaded that the alleged harm is 6 irreparable. Nor does the alleged harm appear immediate, meaning there is time to 7 develop the record before making a final determination on the propriety of a 8 preliminary injunction. 9 First, the requested injunction would not serve the public interest. Intrivo seeks 10 an order prohibiting Access Bio from using its resources to produce COVID-19 tests 11 other than for Intrivo. (TRO 5.) This prohibition would not significantly increase the 12 number of On/Go Tests being produced, but instead would reduce overall production 13 and availability of COVID-19 tests in the market. (See Opp’n 11–12.) Significantly, 14 to increase production of Intrivo’s On/Go Tests would require a mandatory, rather 15 than a prohibitory, injunction, directing Access Bio to reallocate and reassign 16 resources from other production lines to produce Intrivo’s On/Go Tests. Intrivo’s 17 requested injunction does not go that far. Rather, Intrivo seeks an injunction 18 prohibiting Access Bio from producing COVID-19 tests other than for Intrivo. The 19 public needs more tests, not fewer, and increasing Intrivo’s market share to the 20 detriment of the public’s access to COVID-19 rapid testing is against the public 21 interest. 22 Next, the Court is not persuaded that Intrivo’s alleged harm is irreparable. 23 Intrivo asserts injury in the form of unfulfilled purchase orders, lost customers, and 24 damaged business reputation and goodwill. (TRO 15–17.) The injuries that arise 25 from unfulfilled purchase orders are lost profits and related consequential damages, all 26 of which are typically compensable with monetary damages. “Consequently, courts 27 rarely grant preliminary injunctions for breach of contract claims.” P & H Indus., 28 LLC v. P & H Casters Co., Inc., No. EDCV 20-16 JGB (KKx), 2020 WL 4258789,

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1 at *4 (C.D. Cal. May 5, 2020). And while some courts have found certain types of 2 injury to goodwill and reputation to be possibly irreparable, the risk of irreparable 3 harm must be “likely, not just possible,” (contrary to Intrivo’s arguments based on 4 cases applying an out-of-date, lesser standard). All. for the Wild Rockies, 632 F.3d 5 at 1131. Here, Intrivo fails to show that the harm to its reputation and goodwill is 6 likely, not just possible. 7 Moreover, the cases Intrivo cites where courts found damage to goodwill and 8 reputation to be irreparable involve claims for trademark infringement and trade secret 9 misappropriation, not breach of contract. See, e.g., Stuhlbarg Int’l Sales Co., 240 F.3d 10 at 841; First Found. Inc. v. Giddings, 2020 WL 2095810, No. SA CV 20-00359- 11 DOC-KES, at *4 (C.D. Cal. Feb. 28, 2020). In any event, the Court is not persuaded 12 that goodwill and reputational harm are the true injuries here, as opposed to injury 13 from unfulfilled purchase orders, which can be remedied with money damages under 14 contract principles. 15 Finally, the Court notes that, to the extent there is any threat of irreparable harm 16 to Intrivo’s reputation or goodwill, Intrivo does not show that threat to be immediate. 17 Therefore, it is appropriate to provide the parties with time to develop a more fulsome 18 record before making a final determination on the propriety of an injunction. 19 Even under the sliding scale approach, a plaintiff must still show “there is a 20 likelihood of irreparable injury and that the injunction is in the public interest.” See 21 All. for the Wild Rockies, 632 F.3d at 1135. As the Court is not persuaded that Intrivo 22 has done so here, the Court does not reach the elements of likelihood of success on the 23 merits or balance of equities. 24 IV. CONCLUSION 25 The Court finds that Intrivo fails to meet the high burden of establishing that it 26 is entitled to the extraordinary remedy of an emergency TRO. Accordingly, the Court 27 DENIES Intrivo’s application for a TRO. (ECF No. 9.) The Court believes that a 28 more developed record may be beneficial, however, and therefore Orders the parties

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1 || to Show Cause on February 14, 2022, at 1:30 p.m. via Zoom, why a preliminary 2 || injunction for Intrivo’s requested relief should not issue. Intrivo may supplement its 3 || application for a preliminary injunction no later than January 28, 2022. Access Bio 4 || may supplement its Opposition no later than February 4, 2022. 6 IT IS SO ORDERED. 8 January 24, 2022 ss 9 Géed □□□ 11 OTIS D. WRIGHT, II

D UNITED STATES DISTRICT JUDGE

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