DANNY C. REEVES, District Judge.
This matter is pending for consideration of Plaintiffs Raleigh Bruner and Wildcat Moving, LLC's (collectively, "Wildcat") motion for a temporary restraining order and preliminary injunction.
In Kentucky, individuals and companies involved in "moving" — that is, the intrastate transporting of personal effects and property used or to be used in a dwelling — are required by statute to obtain a Household Goods Certificate. KRS § 281.615 et seq. Wildcat admits that it has been a moving company since 2010; however, it did not submit an application for a Certificate until May 16, 2012. The Defendants — officials of the Kentucky Transportation Cabinet Division of Motor Carriers named in this action their official capacities — assert that Wildcat's application was returned because Wildcat failed to complete it properly. [Record No. 48, p. 4] Wildcat has been cited for, inter alia, failing to obtain a Certificate in accordance with the statute.
On August 21, 2012, Wildcat filed this action under 42 U.S.C. § 1983, alleging that the notice and protest procedure in KRS § 281.615 et seq. is unconstitutional under the Fourteenth Amendment. Its Complaint seeks both declaratory and injunctive relief. Under the statutory scheme under consideration, an applicant files an application for a hearing, which triggers the departments requirement to "fix the time and place for a hearing." KRS § 281.625. An applicant is required to give notice of its application in one of two ways: the applicant may publish notice in a local newspaper, or the applicant may e-mail notice to every existing Defendants without interfering with state court proceedings. certificate holder affected by the application. KRS § 281.6251. "If a protest is filed, the department shall hold an administrative hearing on the application. . . . Any person having an interest in the subject matter may, in accordance with the regulations prescribed therefor, file a protest to the granting, in whole or in part, of the application." KRS § 281.6251(2). In addition, if no protest is filed, the cabinet may cancel the hearing. 601 KAR 1:031, Section 1. If the hearing is canceled, the Cabinet may simply require the applicant to "submit evidence by affidavit showing that there is a need for the service and that it is fit, willing, and able to perform this service." Id. Wildcat argues that this notice, protest, and hearing procedure creates an unconstitutional procedure whereby existing moving companies are permitted to "veto" their competition.
By Memorandum Opinion and Order entered February 25, 2013, the Court denied the Defendants' motion to dismiss for lack of standing due to Wildcat's failure to submit to the full Certificate procedure. Following some discovery in this case, on June 7, 2013, the Defendants filed a separate action in the Franklin Circuit Court seeking a temporary injunction against Wildcat for operating as a moving company without first obtaining a Certificate, in violation of KRS § 281.615 et seq.
A preliminary injunction is an extraordinary equitable measure. It has been characterized as "one of the most drastic tools in the arsenal of judicial remedies." Am. Civ. Liberties Union of Ky. v. McCreary Cnty., Ky., 354 F.3d 438, 444 (6th Cir. 2003) (internal quotation marks and citation omitted). For this reason, it should not be extended to cases which are doubtful or do not come within well-established principles of law. See id.
The Sixth Circuit has identified the following factors to be considered in evaluating a motion for injunctive relief: (1) the likelihood of success on the merits; (2) whether the injunction will save the plaintiffs from irreparable injury; (3) whether the injunction would cause substantial harm to others; and (4) whether the public interest would be served by the injunction. Certified Restoration Dry Cleaning Network, L.L.C. v. Tenke Corp., 511 F.3d 535, 542 (6th Cir. 2007). None of these are prerequisites that must be met. Instead, they are interconnected factors that the Court must balance to determine if a preliminary injunction should be granted. See Jones v. City of Monroe, 341 F.3d 474, 476 (6th Cir. 2003). Additionally, there is no rigid formality required in applying these factors and they need not be given equal weight. They are simply meant to guide the Court in exercising its discretion. See Suster v. Marshall, 149 F.3d 523, 528 (6th Cir. 1998).
As an initial matter, the Plaintiffs bear the burden of proving that a preliminary injunction is proper. Overstreet v. Lexington-Fayette Urban Cnty. Gov't, 305 F.3d 566, 573 (6th Cir. 2002). "A preliminary injunction is customarily granted on the basis of procedures that are less formal and evidence that is less complete than in a trial on the merits." Certified Restoration, 511 F.3d at 542 (internal quotation marks omitted). While the Plaintiffs are not required to prove their case in full to obtain injunctive relief, the proof needed "is much more stringent than the proof required to survive a summary judgment motion." Leary v. Daeschner, 228 F.3d 729, 739 (6th Cir. 2000). However, "`it is ordinarily sufficient if the plaintiff has raised questions going to the merits so serious, substantial, difficult, and doubtful as make them fair ground for litigation and thus for more deliberative investigation.'" Certified Restoration, 511 F.3d at 542 (quoting In re DeLorean Motor Co., 755 F.2d 1223, 1229 (6th Cir. 1985)).
With this framework in mind, the Court turns to the propriety of issuing a preliminary injunction based on the following factors: 1) the likelihood of Wildcat's success on the merits; 2) whether the injunction will save Wildcat from irreparable injury; 3) whether the injunction would cause harm to others, particularly the public; and 4) whether the public interest would be served. Id. The first factor weighs heavily in favor of Wildcat. The level of scrutiny currently used to evaluate occupational licensing statutes and other economic regulations challenged under the Fourteenth Amendment is rational basis review. Craigmiles v. Giles, 312 F.3d 220, 223 (6th Cir. 2002). And under such review, an economic regulation will be upheld as long as it bears a rational relation to a legitimate state interest. Id. It is unlikely that the statutes challenged in the complaint — specifically, the protest and hearing procedure — are rationally related to a legitimate government interest. Even under the lowest level of scrutiny, the statutes in question are highly suspect from a constitutional standpoint.
The articulated basis for the protest and hearing procedure is to allow the department to receive outside "evidence" regarding the applicant at the Certificate hearing.
Other relevant factors also weigh in favor of granting a preliminary injunction to the Plaintiffs. If granted, the state injunction sought by the Defendants would irreparably injure Wildcat and for no legitimate purpose. Not only would Wildcat face the possibility of being barred from operating its business and suffer monetary loss, but such action would interfere with this Court's ability to adjudicate this case on the merits. Simply put, the Plaintiffs will be unable to pursue the legitimate claims asserted in this venue if they are required to aggressively defend themselves in a competing forum.
The Plaintiffs have adequately demonstrated that protecting the status quo can only be accomplished by enjoining the Defendants from enforcing the Certificate requirement against them until such time as this case is resolved.
Finally, issuing a preliminary injunction will not cause substantial harm to others. The injunction will not bar the enforcement of any public health and safety regulations. During oral argument, the Defendants made it clear that mechanisms exist outside of the Certificate procedures to ensure the health, safety, and welfare of the citizens of the Commonwealth.
Finally, the Plaintiffs request that the bond requirement of Rule 65(c) of the Federal Rules of Civil Procedure be waived or set at a nominal amount. Rule 65(c) provides that a court may issue a preliminary injunction "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 have been wrongfully enjoined or restrained." Fed. R. Civ. P. 65(c). The Sixth Circuit has long held that a district court "possesses discretion over whether to require the posting of security." Moltan Co. v. Eagle. Picher Indus., Inc., 55 F.3d 1171, 1176 (6th Cir. 1995). The security requirement has been waived where an injunction is not likely to result in harm to the party enjoined, where the exercise of constitutional rights is at issue, and where a suit is brought in the public interest. 13 Moore's Federal Practice, § 65.52 (3d Ed.). In addition, other circuits have held that in publicinterest litigation, the district court has the discretion to dispense with the security requirement or to require nominal security if requiring security would, in effect, deny access to judicial review. Save Our Sonoran, Inc v. Flowers, 408 F.3d 1113, 1126 (9th Cir. 2005).
The preliminary injunction sought here presents a rare situation where all — or nearly all — of these circumstances are present. This case involves the exercise of constitutional rights, because Wildcat asserts that being forced to undergo a Certificate requirement which appears to violate rights protected by the Fourteenth Amendment to the United States Constitution. In addition, it is brought in the public interest. Finally, requiring a substantial bond would effectively deny the Plaintiffs access to judicial review, as stated on the record during oral argument. Moreover, the Defendants have failed to shown that any harm will result if the requested relief is granted and they are enjoined from enforcing the Certificate requirement against Wildcat until such time as the merits can be reached in this case. Accordingly, the Court will waive the security requirement of Rule 65(c).
Injunctive relief is appropriate and necessary to bar the Defendants from enforcing the Certificate requirements in KRS § 281.615(1) et seq., against the Plaintiffs pending resolution of the constitutional issues presented. Further, the Court will not, at this time, limit the relief granted to the notice, protest, and hearing procedure of KRS § 281.625. Accordingly, pursuant to Rule 65 of the Federal Rules of Civil Procedure, it is
1. The Plaintiffs' First Motion for Temporary Restraining Order and Motion for Preliminary Injunction [Record No. 43] is
2. Effective immediately, and subject to subsequent orders from this Court, the Defendants, as well as their attorneys, agents, officers, representatives, and employees, are
3. The Court hereby
4. The Clerk of the Court is