Case 2:14-cv JTF-dkv Document 20 Filed 05/07/14 Page 1 of 15 PageID 182

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1 Case 2:14-cv JTF-dkv Document 20 Filed 05/07/14 Page 1 of 15 PageID 182 IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TENNESSEE WESTERN DIVISION SHANE PRATT; JODI PRATT; CHRIS WHITE; PAM WHITE; JS&T, INC.; CWF ENTERPRISES, INC.; W&P ENTERPRISE, LLC; and W&P ENTERPRISE, INC., Plaintiffs, v. Case No. 2:14-cv JTF-dkv SERVICEMASTER RESIDENTIAL/ COMMERCIAL SERVICES, L.P. d/b/a SERVICEMASTER CLEAN and SM CLEAN L.L.C., Defendants. SERVICEMASTER RESIDENTIAL/ COMMERCIAL SERVICES, L.P. d/b/a SERVICEMASTER CLEAN and SM CLEAN L.L.C., Counter-Plaintiffs, v. SHANE PRATT; JODI PRATT; CHRIS WHITE; PAM WHITE; W&P ENTERPRISES, LLC; and W&P ENTERPRISES, INC., Counter-Defendants. ORDER GRANTING TEMPORARY RESTRAINING ORDER ORDER GRANTING PLAINTIFFS MOTION FOR LEAVE TO FILE REPLY Before the Court comes Plaintiffs/Counter-Defendants Shane Pratt, Jodi Pratt, Chris White, and their related entities W&P Enterprises, LLC, and W&P Enterprises, Inc. Motion for 1

2 Case 2:14-cv JTF-dkv Document 20 Filed 05/07/14 Page 2 of 15 PageID 183 Temporary Restraining Order, filed on April 23, (D.E. #2. Defendants/Counter- Plaintiffs ServiceMaster Residential/Commercial Services, L.P. d/b/a SERVICEMASTER CLEAN and SM Clean L.L.C. filed their Response in Opposition to the Motion on May 2, (D.E. #14. On May 4, 2014, Plaintiffs filed a Motion for Leave to File a Reply in support of their Motion for Temporary Restraining Order. (D.E. #15. On May 5, 2014, a hearing was held before this Court on Plaintiffs Motion for Temporary Restraining Order. (D.E. #18. At the hearing, Judge John T. Fowlkes, Jr. orally granted Plaintiffs Motion for Leave to File a Reply. For the following reasons, Plaintiffs Motion for Temporary Restraining Order is GRANTED. I. BACKGROUND Plaintiffs Shane Pratt, Jodi Pratt, Chris White, Pam White, and their related business entities, JS&T, Inc., W&P Enterprises, LLC ( WP LLC and W&P Enterprises, Inc. ( WP Inc. filed a Verified Complaint against Defendants ServiceMaster Residential/Commercial Services, L.P. d/b/a SERVICE MASTER and SM Clean LLC (collectively Defendants on April 23, 2014, alleging seven causes of action: (1 Declaratory Relief, pursuant to 28 U.S.C. 2201; (2 Breach of Contract and the Covenant of Good Faith and Fair Dealing; (3 Violation of the Missouri Franchise Act, pursuant to MO. Rev. Stat et seq.; (4 Breach of Fiduciary Duties Disclosure and Loyalty; (5 Constructive Fraud; (6 Missouri Merchandising Practices Act, pursuant to MO. Stat ; and (7 Oklahoma Consumer Protection Act, pursuant to Okl. Stat. Am. 751 et. seq. In addition, on April 23, 2014, Plaintiffs filed a Motion for Temporary Restraining Order, seeking to enjoin Defendants from selling franchises in their exclusive territory until an arbitration hearing on the merits resolves the dispute. This dispute arises from the September 6, 2012 Franchise Agreement between Plaintiff WP Inc. and Defendants, which created the Franchise No for a five (5 year term. The 2

3 Case 2:14-cv JTF-dkv Document 20 Filed 05/07/14 Page 3 of 15 PageID 184 Franchise Agreement stated that all matters would be submitted to arbitration for dispute and that Tennessee law would govern. On August 4, 2012, Plaintiff WP Inc. and Defendants signed an Addendum to the Franchise Agreement, which granted Plaintiff exclusive control over Tulsa and Creek counties in Oklahoma. Additionally, in this Addendum, the Minimum Gross Sales Growth Requirements 1 and termination terms were addressed. The termination clause reads as follows: 6. Termination. The Franchisor may terminate this Addendum: (a immediately if Franchisee fails to satisfy the Minimum Sales Growth Requirement in any given time period; (b if the Franchisee fails to adequately service the Franchisor s National Accounts and fails to cure such breach, if it is able to be cured, within ten (10 days following written notice from the Franchisor, or immediately if such breach is not able to be cured; or (c immediately if the Franchise Agreement terminated for any reason. Plaintiffs allege that Defendants intend to violate the exclusivity provision by selling rights to place other franchises in Plaintiff WP Inc. s exclusive territory. Plaintiffs argue that Defendants have no standing to terminate the Addendum to the Franchise Agreement. In their Response in Opposition to Plaintiffs Motion, Defendants contend that an order granting injunctive relief would require the Court to rule on issues the parties explicitly agreed would be decided by arbitration. However, in the alternative, Defendants argue that the termination of the exclusivity provision was within their rights because Plaintiffs have failed to satisfy the Minimum Sales Growth Requirement in both 2012 and Additionally, Defendants argue that Plaintiffs failed to adequately service the Franchisor s National Account, 1 The following is the Minimum Gross Service Sales Growth Requirements Schedule: (1 From August 4, 2012 to December 31, 2012 at least $75,000; (2 From January 1, 2013 to December 31, 2013 at least $350,000; (3 From January 1, 2014 to December 31, 2014 at least $700,000; (4 From January 1, 2015 to December 31, 2015 at least $1,400,000; (5 From January 1, 2016 to December 31, 2016 at least $1,610,000; and (6 From January 1, 2017 to the expiration of the Addendum at least $925,000. None of these numbers includes the Construction Services Gross Services Sales. 2 Specifically, Defendants argue that in 2012, Plaintiffs were required to meet a Minimum Gross Service Sales Growth Requirement of $75,000, but only achieved $73,504. In 2013, Defendants argue that Plaintiffs were to meet $350,000 but only achieved $325,181. 3

4 Case 2:14-cv JTF-dkv Document 20 Filed 05/07/14 Page 4 of 15 PageID 185 Farmer s Insurance, which resulted in Farmer s Insurance permanently removing Plaintiffs franchise from their national account program. On April 24, 2014, Defendants sent Plaintiffs a letter entitled, RE: Notice of Immediate Termination of Addendum to the Franchise Agreement dated August 4, 2012 ( Addendum relating to Franchise Agreement #8942 ( Franchise Agreement by and between ServiceMaster Residential/Commercial Services Limited Partnership ( Franchisor and W&P Enterprises, Inc. ( Franchisee. (D.E. #14. In the letter, Defendants set out the reasons as to why the Addendum had been terminated. Specifically, the letter states, Franchisor hereby terminates the Addendum... However, solely as a courtesy, and although not required by Franchisor, we will provide Franchisee 10 days (through May 6, 2014 to become reinstated in Farmer s national account program. (D.E. #14-2, at 2. In their Reply, Plaintiffs deny all of Defendants contentions. Plaintiffs argue, inter alia, that the Minimum Gross Sales Growth Requirements for 2012 and 2013 were met. 3 Additionally, Plaintiffs argue that Plaintiffs successful servicing of its other thirty-three (33 accounts have been overshadowed by the loss of Farmer s Insurance. 4 Plaintiffs contend that [t]he Addendum refers to a failure with regard to very many National Accounts. The word Accounts is a plural... No complaints about inadequate servicing have been made regarding the other 33 National Accounts. (D.E. #15-1, at 4. Lastly, Plaintiffs argue that they cured the alleged breach of inadequate servicing to the Farmer s Insurance account. In their April 28, 2014 letter in response to Defendants letter, Plaintiffs state that, [P]utting aside that my clients dispute [ServiceMaster s] false contention that they have not met their obligation to adequately 3 Plaintiffs argue that Defendants have miscalculated their Minimum Gross Service Sales Growth Requirements. Plaintiffs contend that in 2012 they achieved $95,448 and in 2013 achieved $451, This Court finds it important to note that Plaintiffs claim that the loss of Farmer s Insurance caused a twenty-five percent (25% windfall in their gross revenues. 4

5 Case 2:14-cv JTF-dkv Document 20 Filed 05/07/14 Page 5 of 15 PageID 186 (D.E. #15-2, at 8. service the Franchisor s national accounts, they offer the following, which, given the limited information regarding the alleged breach [ServiceMaster] has provided, resolves any concerns about services to be provided to Farmer s. Specifically, W&P Enterprises has determined that Mr. Shane Pratt will no longer have any responsibilities for or work on any files involving Farmer s. Please provide us with contact information for the person at Farmer s with whom we may communicate to explain the cure. II. LEGAL STANDARD A preliminary injunction is an extraordinary measure that is one of the most drastic tools in the arsenal of judicial remedies. ACLU v. McCreary County, 354 F.3d 438, 444 (6th Cir citing Hanson Trust PLC v. ML SCM Acquisition Inc., 781 F.2d 264, 273 (2d. Cir and Detroit Newspaper Publisher s Ass n v. Detroit Typographical Union No. 18, 471 F.2d 872, 876 (6th Cir Preliminary injunctions should not be granted when the outcome in a case is doubtful or does not fall within well-established principles of law. Id. District courts have discretion to grant preliminary injunctions, and a court s determination will be disturbed only if [it] relied upon clearly erroneous findings of fact, improperly applied the governing law, or used an erroneous legal standard. Connection Distribution Co. v. Reno, 154 F.3d 281, 288 (6th Cir and Moltan Co. v. Eagle-Picher, 55 F.3d 1171, 1175 (6th Cir. 1995(noting that the Sixth Circuit will reverse a district court s weighing and balancing of the equities only in the rarest of circumstances. Courts within this district have stated that, the same standard generally applies to the issuance of temporary restraining orders and preliminary injunctions. Midwest Retailer Associated, Ltd. v. City of Toledo, 583 F.Supp.2d 796 (N.D. Ohio 2008; See also Rios v. Blackwell, 345 F.Supp.2d 833, 835 (N.D. Ohio 2004 ( [a]s long as there is notice to the other 5

6 Case 2:14-cv JTF-dkv Document 20 Filed 05/07/14 Page 6 of 15 PageID 187 side and an opportunity to be heard, the standard for a preliminary injunction is the same as that for a temporary restraining order. Therefore, when considering a temporary restraining order and/or a preliminary injunction, the court must look to four factors: (1 whether the movant has a strong likelihood of success on the merits; (2 whether the movant would suffer irreparable injury without the injunction; (3 whether issuance of the injunction would cause substantial harm to others; and (4 whether the public interest would be served by the issuance of the injunction. Certified Restoration Dry Cleaning Network, L.L.C. v. Tenke Corp., 511 F.3d 535, 542 (6th Cir These four factors are not intended to be prerequisites that must be met but, instead, are factors that should be balanced. See Jones v. City of Monroe, MI, 341 F.3d 474, 476. The Sixth Circuit has stated that the district court need not make specific findings concerning each of the four factors used in determining a motion for preliminary injunction if fewer factors are dispositive of the issue. Id. III. ANALYSIS In this case, the parties are bound by mandatory arbitration for any and all claims in dispute. Because of the arbitration agreement between the parties, this Court finds it necessary to explain the boundaries of its jurisdiction in this matter before addressing Plaintiffs Motion for Temporary Restraining Order. The Sixth Circuit has stated that, [I]n a dispute subject to mandatory arbitration... a district court has subject matter jurisdiction under [Section 3 of the Federal Arbitration Act] to grant preliminary injunctive relief provided that the party seeking the relief satisfies the four criteria which are prerequisites to the grant of such relief. Performance Unlimited, Inc. v. Questar Publishers, Inc., 52 F.3d 1373, 1380 (6th Cir The Performance Unlimited, Inc. Court further states that, 6

7 Case 2:14-cv JTF-dkv Document 20 Filed 05/07/14 Page 7 of 15 PageID 188 [A] grant of preliminary injunctive relief pending arbitration is particularly appropriate and furthers the Congressional purpose behind the Federal Arbitration Act, where the withholding of injunctive relief would render the process of arbitration meaningless or a hollow formality because an arbitral award, at the time it was rendered, could not return the parties substantially to the status quo ante. Id (internal citation omitted. This Court recognizes that the arbitrator is the ultimate decision maker in this matter. Consequently, based on the above case law and the facts of this case, this Court finds that a temporary restraining order/preliminary injunction would be appropriate to issue in this case. However, despite the appropriateness of the restraining order, the Court must ensure that the four factors above are met in order to properly grant the restraining order. A. Plaintiffs Could Suffer Irreparable Harm A plaintiff s harm will be considered irreparable if it is not fully compensable by monetary damages. Overstreet v. Lexington-Fayette Urban Cnty. Gov t., 305 F.3d 566, 578 (6th Cir Additionally, if the damages would be difficult to calculate, then an injury is not fully compensable by money damages. Certified Restoration Dry Cleaning Network, L.L.C., 511 F.3d at 550 (quoting Basicomputer Corp. v. Scott, 973 F.2d 507, 511 (6th Cir Irreparable harm can be found when potential economic loss is so great as to threaten the existence of the movant s business. Nexteer Auto. Corp. v. Korea Delphi Auto. Sys. Corp., 2014 WL , No. 13-cv-15189, at *6 (E.D. Mich. Feb. 13, 2014 (quoting Performance Unlimited Corp., 52 F.3d at However, the Sixth Circuit has also stated that the temporary loss of income, ultimately to be recovered, does not usually constitute irreparable injury. Overstreet, 305 F.3d at 579 (internal citation omitted; See also JDC Mgmt., LLC v. Reich, 644 F.Supp.2d 905, 941 (W.D. Mich ( Even a company s substantial loss of 7

8 Case 2:14-cv JTF-dkv Document 20 Filed 05/07/14 Page 8 of 15 PageID 189 market share or complete dissolution or bankruptcy does not constitute irreparable harm for this purpose, because it too is considered compensable by money damages later. Here, Plaintiffs argue that they only seek to maintain status quo and demonstrate the irreparable harm to them if a temporary restraining order is not granted. Specifically, Plaintiffs argue that if an order is not issued, they will lose the goodwill of their customers and, in time, lose their business. They contend that money damages will not make them whole and that they do not want their business to survive on proceeds from a potential money damages award. Lastly, Plaintiffs contend that if Defendants are allowed to sell to other franchises before the start of arbitration, Plaintiffs could immediately lose incalculable business profits. Contrastingly, Defendants contend that Plaintiffs speculations are unfounded. Defendants argue that, because only the Addendum to the Franchise Agreement has been terminated and not the Franchise Agreement itself, Plaintiffs have no claim for irreparable harm. Defendants argue that money damages would be an appropriate remedy if Plaintiffs claims are found to be valid. The Sixth Circuit has stated that [t]he loss of customer goodwill often amounts to irreparable injury because the damages flowing from such losses are difficult to compute. Certified Restoration Dry Cleaning Network, L.L.C., 511 F.3d at 550. However, the courts have also stated that, [w]hether or not the loss of customer goodwill amounts to irreparable harm often depends on the significance of the loss of the plaintiff s overall economic well-being. Nexteer Auto. Corp., 2014 WL , at *10. In this case, this Court finds that Plaintiffs harm is irreparable. Although Plaintiffs operate 33 other accounts, the potential loss of customer goodwill and potential inclusion of other franchises in a once exclusive territory could affect Plaintiffs profits substantially. If 8

9 Case 2:14-cv JTF-dkv Document 20 Filed 05/07/14 Page 9 of 15 PageID 190 Defendants do open Tulsa and Creek counties to other franchises before the start of arbitration, it would be difficult for Plaintiff to ascertain the loss of customer goodwill, loss of potential new contracts, or other incalculable damages. Although Plaintiffs business may not be completely lost before the start of arbitration, it is apparent there are some possible irreversible damages for Plaintiffs. As the Performance Unlimited, Inc. court stated, the type of irreparable harm which [Plaintiff] is likely to suffer... is precisely the type of harm which necessitates the granting of preliminary injunctive relief pending arbitration, because the arbitration will be a meaningless or hollow formality unless the status quo is preserved pending arbitration. 52 F.3d at B. Issuance of a Temporary Restraining Order Would Cause Minimal Damage to Defendants Plaintiffs contend that maintaining the status quo before the start of arbitration would not significantly harm Defendants because Plaintiffs would continue to operate their business and pay royalties. Plaintiffs also argue that Defendants are in a better position to lose revenue and maintain profits than Plaintiffs would be. However, Defendants argue that the issuance of a temporary restraining order would cause substantial harm to Defendants. Defendants assert that the preclusion from opening new franchises in Creek and Tulsa counties would be harmful to them because, if Plaintiffs finances have collapsed as they claim they have, then Defendants need to retain additional revenue from other franchises. Here, the Court finds that there would be minimal damage to Defendants if a temporary restraining order were issued. Although Defendants will not be able to sell new franchises in this exclusive territory, there does not seem to be any evidence of immediate or serious impending damage to Defendants if the parties were to continue to operate as they did before the alleged breach. 9

10 Case 2:14-cv JTF-dkv Document 20 Filed 05/07/14 Page 10 of 15 PageID 191 C. Public Interest Would be Better Served By the Issuance of a Temporary Restraining Order Generally, enforcement of the parties duties under a contract is in the public interest. See Certified Restoration Dry Cleaning Network, L.L.C., 511 F.3d at 551 ( Enforcement of contractual duties is in the public interest. Additionally, the Sixth Circuit has held that there is a strong policy in favor of carrying out commercial arbitration when a contract contains an arbitration clause. Performance Unlimited, Inc., 52 F.3d at 1384 (internal citation omitted. More specifically, the Sixth Circuit has further explained that, [a]rbitration lightens courts workloads, and it usually results in a speedier resolution of controversies. Id (internal citations omitted. Plaintiffs assert that, D.E. #2-1, at 10. Public policy favors enforcement of contracts. And, unfair dealing by a franchisor is contrary to public policy. Public policy favors continuation of a local business that has existed for many years and the business continuation of providing services to the community. Public interest favors protection of a franchisee who has invested time and money into the operation of a franchise. Conversely, Defendants assert that the issuance would infringe upon public policy because it would signal to the public that valid contracts will not be enforced. D.E. #14, at 10. Defendants argue that issuance would prohibit Defendants from relying on and enforcing the termination provision in the Franchise Agreement Addendum. This Court does not agree with either party. The Court is unsure what, if any, case law Plaintiff has found to support their contentions of what public policy favors. Additionally, this Court does not believe issuing a temporary restraining order would force the parties to act 10

11 Case 2:14-cv JTF-dkv Document 20 Filed 05/07/14 Page 11 of 15 PageID 192 contrary to the Franchise Agreement. Instead, what this Court does intend to do is uphold public interest and maintain the status quo until the start of arbitration. D. It is Unclear Whether Plaintiff Has a Strong Likelihood of Success Courts in this Circuit have held that, [a] district court... need not analyze all four preliminary injunction factors when it determines that the movant has not established likelihood of success on the merits. Avery Dennison Corp. v. Alien Tech. Corp., 626 F.Supp.2d 693, (N.D. Ohio 2009; See also MRC Innovations, Inc. v. Hunter MFG., LLP, 2012 WL , No, 1:12-cv-684, at *2 (N.D. Ohio Jun. 7, Additionally, the Sixth Circuit has stated that, In balancing the four factors for injunctive relief, the moving party must show a strong likelihood of success on the merits if all other factors militate against granting a preliminary injunction. Similarly, the moving party need show less likelihood of success on the merits if the other facts indicate that the Court should issue a preliminary injunction. Performance Unlimited, Inc., 52 F.3d at 1385 (citing Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Grall, 836 F.Supp.428, 432 (W.D. Mich. 1993; See also PartyLite Gifts, Inc. v. Swiss Colony Occasions, 2006 WL , No. 3:07-cv-170, at *3 (E.D. Tenn. Aug. 15, 2006 ( The showing necessary to establish a likelihood of success on the merits varies inversely with the other three factors. Accordingly, where the other three factors strongly favor issuance of an injunction, the movant may make a lesser showing of a likelihood of success on the merits. In order for a plaintiff to establish that it could succeed on the merits, a plaintiff must show more than a mere possibility of success. Certified Restoration Dry Cleaning Network, L.L.C., 511 F.3d at 543 (quoting Six Clinics Holding Corp. v. Cafcomp Sys., Inc., 119 F.3d 939, 5 Courts have further stated that, [b]ecause, irrespective of relative or public harms, a movant must establish both a likelihood of success on the merits and irreparable harm..., the district court may deny a preliminary injunction based on the movant s failure to establish either of these two crucial factors without making additional findings respecting the other factors. Avery Dennison Corp., 626 F.Supp.2d at

12 Case 2:14-cv JTF-dkv Document 20 Filed 05/07/14 Page 12 of 15 PageID (6th Cir As the Certified Restoration Dry Cleaning Network, L.L.C. court further explains, it is ordinarily sufficient if the plaintiff has raised questions going to the merits so serious, substantial, difficult, and doubtful as to make them a fair ground for litigation and thus for more deliberate investigation. Id. At the time of Plaintiffs filing of their Motion for Temporary Restraining Order, on April 23, 2014, Defendants had not yet sent a letter of termination of the Addendum. Defendants did not send the letter until April 24, 2014, after the filing of the Motion for Temporary Restraining Order. Therefore, Plaintiffs initially argued in their Motion that they had a strong likelihood of success on the merits because Defendants did not give proper notice regarding the termination or cure of the Farmer s Insurance National Accounts. Plaintiffs contend that the alleged inadequate service of one of their thirty-three national accounts should not give rise to Defendants ability to terminate the Addendum. In their Reply, Plaintiffs also argue that Defendants legally and factually cannot terminate the Addendum, because they have met their Minimum Gross Service Sales Growth Requirements for both 2012 and In opposition, Defendants assert that Plaintiffs cannot show a strong likelihood of success on the merits because Plaintiffs did not meet their Minimum Gross Service Sales Growth Requirements and that they failed to adequately service a major National Account, Farmer s Insurance. Defendants point to the termination clause in the Addendum, which allows Defendants to immediately terminate the Addendum if Plaintiffs fail to satisfy their sales requirements. The Court finds it important to again note that the ultimate decision on the merits of this case will be left for the arbitrator to decide, and the Court s only duty is to determine whether Plaintiffs have a strong likelihood of success on the merits for purposes of granting a temporary 12

13 Case 2:14-cv JTF-dkv Document 20 Filed 05/07/14 Page 13 of 15 PageID 194 restraining order. In this case, it seems that there are numerous disputed facts. First, the calculation of the Minimum Gross Service Sales Growth Requirements is a source of dispute in this case. Because of the discrepancies in the calculations, the Court believes Plaintiffs have raised an important question that requires more investigation. If the arbitrator finds that Plaintiffs calculations of their Minimum Gross Service Sales Growth Requirements are correct, then Defendants would have improperly terminated the Addendum. However, if Defendants calculations are correct, then Plaintiffs claims of inappropriate immediate termination would be invalid. This is most undoubtedly an issue for the arbitrator to decide and most undoubtedly an issue that goes to the heart of the contract dispute. On this basis alone, this Court finds that a temporary restraining order should be issued because Plaintiffs could succeed on the merits on this issue. However, the Court will also look to the second issue. Second, the termination of the Addendum, due to the alleged inadequate service of the Farmer s Insurance account, also raises various issues as well. In Defendants April 24, 2014 Notice of Immediate Termination Letter to Plaintiffs, Defendants gave Plaintiffs until May 6, 2014 to cure their alleged breach of adequate service with Farmer s Insurance. Plaintiffs contend that they were not given an ample opportunity to cure the problems with Farmer s Insurance before they were removed from the account. Plaintiffs also assert that they cured the alleged breach when they sent the April 28, 2014 letter to Defendants stating that Plaintiff Shane Pratt would be removed from all work involving Farmer s Insurance. Again, the Court notes that this is an issue that will ultimately be decided by the arbitrator. If the arbitrator were to decide that Plaintiffs did fail to give adequate service to Farmer s Insurance and failed to cure the alleged breach, then Defendants termination of the Addendum would be valid. However, if the arbitrator accepts Plaintiffs facts as true and finds 13

14 Case 2:14-cv JTF-dkv Document 20 Filed 05/07/14 Page 14 of 15 PageID 195 that Defendants failed to allow Plaintiffs to cure their alleged breach, then Plaintiffs could prevail in their claims. Again, the Court finds that Plaintiffs have raised a serious question as to the merits on this issue. Although it is unclear whether Plaintiffs have a strong likelihood to succeed on the merits, it is apparent that Plaintiffs could succeed depending on how the facts of this case are interpreted by the arbitrator. Furthermore, because the other three factors demonstrate that this Court should issue a temporary restraining order, Plaintiffs need only show a lesser likelihood of success. This Court finds that Plaintiffs have met that showing. E. A Nominal Bond Is Required Fed. R. Civ. P. 65(c states that, The court may issue a preliminary injunction or a temporary restraining order only if the movant gives security in an amount that the court considers proper to pay the costs and damages sustained by any party found to be wrongfully enjoined or restrained. Although many circuits have found Rule 65(c to be mandatory, the Sixth Circuit has given district courts discretion as to whether a bond should be required or not. See Moltan Co. v. Eagle-Picher Indus., Inc., 55 F.3d 1171, 1176 (6th Cir ( While we recognize that the language of Rule 65(c appears to be mandatory, and that many circuits have so interpreted it, the rule in our circuit has long been that the district court possesses discretion over whether to require the posting of security ; and also Hinckley v. Kelsey-Hayes Co., 866 F.Supp. 1034, 1046 (E.D. Mich ( A district court must expressly consider the question of requiring a bond before issuing a preliminary injunction. Here, Plaintiffs request that the Court require a nominal bond if their Motion for Temporary Restraining Order is granted. Defendants do not address the issue of a bond in their Response to Plaintiffs Motion. Because the Court is simply issuing a temporary restraining 14

15 Case 2:14-cv JTF-dkv Document 20 Filed 05/07/14 Page 15 of 15 PageID 196 order to maintain the status quo of the parties before the start of arbitration, this Court finds there will be little or no harm to Defendants. However, the Court does believe that a nominal bond would be an appropriate and equitable remedy in this matter. Therefore, this Court orders Plaintiffs to post a $100 bond. IV. CONCLUSION Based on the above findings, this Court hereby GRANTS Plaintiffs Motion for Temporary Restraining Order and imposes a preliminary injunction is this matter. This Temporary Restraining Order shall remain in effect for fourteen (14 days from the entry of this order, or until May 21, 2014, unless an arbitrator is selected by the parties before that time. Additionally, a preliminary injunction shall remain in effect until an arbitrator is selected by consent of the parties. The parties are hereby ORDERED to notify the Court when an arbitrator is selected. IT IS FURTHER ORDERED that Plaintiffs are to post a nominal bond of $100 before the start of arbitration. IT IS SO ORDERED this 7th day of May, BY THIS COURT: s/ John T. Fowlkes, Jr. JOHN T. FOWLKES, JR. United States District Judge 15