Nicholas Malfitano Apr. 6, 2016, 1:34pm


PHILADELPHIA – On March 10, the U.S. Court of Appeals for the Third Circuit determined a federal court did not err in denying a motion for a preliminary injunction to Checker Cab Philadelphia, Inc., in its lawsuit against Uber Technologies, Inc.

In a published opinion and writing on behalf of colleague judges Theodore A. McKee and Thomas M. Hardiman, Judge D. Brooks Smith said Checker Cab failed to show irreparable harm, and thus the U.S. District Court for the Eastern District of Pennsylvania did not err in denying the preliminary injunction motion.

“Checker Cab sued Uber in the District Court, alleging violations of Pennsylvania unfair competition laws, false advertising under the Lanham Act and several violations of the federal Racketeer Influenced and Corrupt Organizations (RICO) Act,” Smith said.

According to the plaintiffs’ allegations, the Uber defendants are “operating an illegal gypsy cab operation in the City of Philadelphia in violation of law and regulation” and that they are being harmed daily by it, because “Uber is taking away customers from the medallion cabs and is thus causing damage to their business, reputation, and goodwill.”

A separate lawsuit was recently filed by the Philadelphia Taxi Association against Uber on similar grounds.

Subsequently, Checker Cab filed a motion for a preliminary injunction, which asserted irreparable harm through medallion cabs losing customers resulting from Uber’s operations in Philadelphia. According to court records, this injunction motion was denied by the District Court for failure to show both a likelihood of success on the merits and irreparable harm.

Checker Cab appealed this decision to the Third Circuit.

Smith said, “In order to demonstrate irreparable harm the plaintiff must demonstrate potential harm which cannot be redressed by a legal or an equitable remedy following a trial. The preliminary injunction must be the only way of protecting the plaintiff from harm,” citing a prior Third Circuit decision from Campbell Soup Co. v. ConAgra.

Smith added Checker Cab did not illustrate this harm in their allegations.

Smith said, “Checker Cab fails to carry this heavy burden. The only harm Checker Cab alleges in its motion for a preliminary injunction is the loss of customers. ‘Irreparable harm can be shown by the fact that Uber is taking away customers from the medallion cabs, a harm that can be shown but not quantified – the definition of irreparable harm.’ This, however, is a purely economic harm that can be adequately compensated with a monetary award following adjudication on the merits.”

Smith continued that Checker Cab raised additional allegations of irreparable harm in a separately-filed motion to reconsider and on appeal – but these arguments were forfeited, since they were not raised in Checker Cab’s motion for a preliminary injunction and there are no grounds for granting a good cause exception.

“Accordingly, we conclude that the District Court did not abuse its discretion in denying Checker Cab’s motion for a preliminary injunction,” Smith said.

Smith also concluded because Checker Cab’s motion failed to allege an irreparable harm, there was no need to discuss their second basis on which the District Court dismissed Checker Cab’s motion, lack of likely success on the merits.

The plaintiffs are represented by Michael S. Henry of Salaman Henry, in Philadelphia.

The defendants are represented by A. Scott Bolden, Carolyn P. Short, Nipun J. Patel and Shannon Elise McClure of Reed Smith, plus David P. Temple and James Hickey of the Law Offices of John J. Gallagher, all in Philadelphia.

U.S. Court of Appeals for the Third Circuit case 15-1834

U.S. District Court for the Eastern District of Pennsylvania case 2:14-cv-07265

From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at nickpennrecord@gmail.com

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