California Lacrosse, Inc. v. Lacrosse Unlimited, Inc., 3:16-cv-02111

Background

In Sept. 2014 California Lacrosse, Inc. (CLI) sold physical store assets, its internet retail business, and its Team Sales operations to Lacrosse Unlimited, Inc. (LUI) under an Asset Purchase Agreement (APA). LUI paid a fixed price, agreed to quarterly royalties on Team Sales (with minimums for Years 1–3), and purchase minimum volumes of Adrenaline and Team Apparel.
The APA required quarterly Team Sales revenue reports and allowed CLI access to LUI’s books with 60 days’ notice; it contained a 3‑year non‑compete restricting CLI from making Team Sales and an attorneys’ fees clause; the APA is governed by Delaware law.
CLI sued LUI alleging LUI defaulted on royalty payments, failed to provide reports, and did not meet purchase minimums. LUI answered and counterclaimed asserting fraudulent inducement, breach of the APA’s non‑compete (CLI made Team Sales), and related claims; LUI sought a declaration the APA is void but did not initially seek injunctive relief here.
LUI separately filed a substantively identical suit in New York and moved for a preliminary injunction there seeking to enjoin CLI’s Team Sales in violation of the non‑compete; that action was transferred and consolidated into this Southern District of California case and LUI filed the instant preliminary injunction motion.
LUI argues CLI breached representations about transferred Team Sales accounts and that CLI’s post‑closing Team Sales violate the APA; CLI contends its Team Sales began in 2016, after LUI stopped performing (mid‑2015), and that LUI cannot enforce continuing obligations while it was in breach.
The Court denied LUI’s motion for a preliminary injunction, finding LUI failed to show likelihood of success on the merits, irreparable harm, or that the equities tip in its favor; public interest was neutral.

Issues

Issue	Plaintiff's Argument (LUI)	Defendant's Argument (CLI)	Held
Likelihood of success on breach of non‑compete	CLI admitted making Team Sales; that admission supports LUI’s claim CLI violated the non‑compete	CLI says Team Sales began in 2016, after LUI stopped performing mid‑2015; also LUI seeks to void APA so non‑compete may not be enforceable	LUI did not show likelihood of success or raise serious questions—evidence indicates CLI’s sales occurred after LUI ceased performance and LUI may have sought to void the APA
Irreparable harm	Continued CLI sales will harm LUI’s goodwill and business beyond monetary loss	Harm is monetary (lost profits); damages are adequate; LUI delayed seeking injunction	No irreparable harm: monetary damages are adequate and LUI’s delay undermines urgency
Balance of equities	Injunction needed to protect LUI’s contractual rights	Equity disfavors LUI because it stopped performing under the APA and delayed enforcement	Equities favor CLI or are not tipped to LUI; LUI’s own non‑performance weighs against relief
Public interest	(implicit) enforcement of contract and market stability	Narrow private dispute; no significant public impact	Public interest is neutral and does not support injunction

Key Cases Cited

Winter v. Natural Res. Def. Council, Inc., 555 U.S. 7 (2008) (preliminary injunction standard requiring likelihood of success and irreparable harm)
Weinberger v. Romero‑Barcelo, 456 U.S. 305 (1982) (injunctive relief requires irreparable injury and inadequacy of legal remedies)
Alliance for the Wild Rockies v. Cottrell, 632 F.3d 1127 (9th Cir. 2011) (serious questions + balance of hardships framework for preliminary injunctions)
Garcia v. Google, Inc., 786 F.3d 733 (9th Cir. 2015) (delay in seeking injunction undercuts claim of irreparable harm)
Stormans, Inc. v. Selecky, 586 F.3d 1109 (9th Cir. 2009) (where injunction affects only parties, public interest is neutral)