Certificates of Label Authority ("COLA's") issued to plaintiffs. Three of the COLA's were issued on July 24, 1989 and two were issued on June 8, 1992; all related to the sale of "Black Death Vodka." These COLA's were revoked by defendants on July 6, 1992. Plaintiffs claim that in doing so defendants violated their rights under the Administrative Procedure Act ("APA") and the First and Fifth Amendments to the United States Constitution.
As part of their complaint, plaintiffs moved for a preliminary injunction. The Court considered this motion in a July 10, 1992 hearing, at which George Weickhardt appeared for plaintiffs and Peter Modlin appeared for defendants.
Having considered the papers submitted and the arguments of counsel, and good cause appearing therefor, the Court GRANTS plaintiff's motion. In considering whether to issue a preliminary injunction, the Court must consider the likelihood that plaintiff will prevail on the merits and the possible harm to the parties from granting or denying the injunctive relief. See Arcamuzi v. Continental Air Lines, Inc., 819 F.2d 935, 937 (9th Cir. 1987); Sierra On-Line, Inc. v. Phoenix Software, Inc., 739 F.2d 1415, 1421 (9th Cir. 1984).
The Court finds that plaintiffs are likely to succeed on the merits of their claim that they were denied their procedural rights under the APA and the Fifth Amendment. The Court also finds it probable that defendants' decision to revoke the COLA's was arbitrary and capricious under the APA as defendants made the decision without any new evidence.
In addition to demonstrating a likelihood of success on the merits, plaintiffs have demonstrated a threat of irreparable injury. The Court finds that a decision by defendants to revoke the COLA's would effectively put plaintiffs out of business. Moreover, based on the representations of counsel at the hearing, the Court finds it unlikely that plaintiffs will be able to recover damages. Accordingly, the balance of the equities compels the Court to enjoin revocation of the COLA's.
Accordingly, the Court ENJOINS defendants from enforcing any order cancelling or revoking the five label approvals for "Black Death Vodka" attached hereto as Exhibits A, B, C, D and E.
The reasons for the Court's order given at the hearing and in this order will be supplemented in a forthcoming opinion.
IT IS SO ORDERED.
Dated: July 10, 1992.
D. Lowell Jensen
United States District Judge
[SEE EXHIBIT A IN ORIGINAL]
[SEE EXHIBIT B IN ORIGINAL]
[SEE EXHIBIT C IN ORIGINAL]
[SEE EXHIBIT D IN ORIGINAL]
[SEE EXHIBIT E IN ORIGINAL]
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