Equal Employment Opportunity Commission v. CollegeAmerica Denver, Inc.

Filing 210

ORDER denying 202 EEOC's Motion for Preliminary Injunction, by Judge Lewis T. Babcock on 4/30/2019. (ebuch)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Lewis T. Babcock, Judge

Civil Action No. 14-cv-01232-LTB-SKC
EQUAL EMPLOYMENT OPPORTUNITY COMMISSION,
Plaintiff,
v.
COLLEGEAMERICA DENVER, INC., n/k/a CENTER FOR EXCELLENCE IN
HIGHER EDUCATION, INC., d/b/a COLLEGEAMERICA,
Defendant.
______________________________________________________________________________
ORDER
______________________________________________________________________________
This case is before me on Plaintiff the EEOC’s Motion for Preliminary
Injunction [Doc # 202]. After consideration of the motion, all related pleadings, and
the case file, as well as the arguments presented at the hearing held on April 30,
2019, I deny the EEOC’s motion as set forth below.
I. Background
1. On March 25, 2013, Defendant CollegeAmerica filed a state court action
(the “Larimer County Case”) against Debbi D. Potts, whose interests the EEOC
represents in this case, alleging that she breached her Separation Agreement and
demanding the return of $7,000 paid to her under the Agreement. The Larimer
County Case was stayed upon the filing of this action by the EEOC and remained so
until late 2018.
2. Prior to trial in this case, the Court dismissed the EEOC’s claim for
unlawful interference with statutory rights pursuant to § 7(f)(4) of the ADA. The
case proceeded to trial on the EEOC’s retaliation claim, and the jury returned a
verdict in favor of CollegeAmerica. The EEOC filed a post-trial appeal of the
dismissal of § its 7(f)(4) claim, and the Tenth Circuit reversed the dismissal based

on a new legal theory that CollegeAmerica presented at trial when it argued that
Ms. Potts breached the Separation Agreement by reporting adverse information to
the EEOC without first notifying CollegeAmerica. This case is currently set for a 3day court trial on the EEOC’s § 7(f)(4) claim commencing November 18, 2019.
3. The Larimer County Case is set for trial on May 13-14, 2019. On March
22, 2019, the Larimer County Court ordered that trial will proceed on that date
“with the exception of hospitalization or death of [a party], counsel, or counsel’s
immediate family.” The Larimer County Court further ordered that any filings
other than trial related materials will be stricken. In its statement of the case filed
in the Larimer County Case on March 26, 2019, CollegeAmerica stated that the
case involved Ms. Potts’ promise that she would not “intentionally with malicious
intent (publicly or privately) disparage the reputation of CollegAmerica or any of its
related entities” and that she breached this promise in statements made to former
CollegeAmerica employee, Ken Barnhart, through the social networking site
LinkedIn and in email.
4. By the motion filed March 26, 2019, the EEOC requests that
CollegeAmerica be preliminarily enjoined from asserting any breach of contract
claim under the Separation Agreement, or from otherwise using the Separation
Agreement to pursue a claim or judgment against Ms. Potts, including in the
pending Larimer County Case.
II. Analysis
5. A preliminary injunction serves to preserv[e] the relative positions of the
parties until a trial on the merits can be held.” DTC Energy Grp., Inc. v.

Hirschfeld, 912 F.3d 1263, 1269-70 (10th Cir. 2018). “A preliminary injunction is an
extraordinary remedy never awarded as of right.” Winter v. Natural Res. Def.

Council, 555 U.S. 7, 24 (2008). A party may be granted a preliminary injunction
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only when “the right to relief [is] clear and unequivocal.” Schrier v. Univ. of Colo.,
427 F.3d 1253, 1258 (10th Cir. 2005) (quotations omitted).
6. Under Fed. R. Civ. P. Rule 65, a party seeking a preliminary injunction
must show: “(1) the movant is substantially likely to succeed on the merits; (2) the
movant will suffer irreparable injury if the injunction is denied; (3) the movant’s
threatened injury outweighs the injury the opposing party will suffer under the
injunction; and (4) the injunction would not be adverse to the public interest.” Fish

v. Kobach, 840 F.3d 710, 723 (10th Cir. 2016) ).
7. “ ‘[B]ecause a showing of probable irreparable harm is the single most
important prerequisite for the issuance of a preliminary injunction, the moving
party must first demonstrate that such injury is likely before the other
requirements will be considered.” First W. Capital Mgmt. Co. v. Malamed, 874 F.3d
1136, 1141 (10th Cir. 2017) (quoting Dominion Video Satellite, Inc. v. Echostar

Satellite Corp., 356 F.3d 1256, 1260 (10th Cir. 2004) ). “Demonstrating irreparable
harm is ‘not an easy burden to fulfill.’” Id. (quoting Greater Yellowstone Coal. v.

Flowers, 321 F.3d 1250, 1258 (10th Cir. 2003)). “[T]he movant ‘must demonstrate a
significant risk that he or she will experience harm that cannot be compensated
after the fact by money damages.’” Id. (quoting Fish, 840 F.3d at 751).
8. The EEOC argues that Ms. Potts will suffer irreparable harm if the
Larimer County Case proceeds to trial before the trial in this case because she is
unable to pay a $7,000 judgment; would likely lose job opportunities if judgment is
entered against her; and could face exacerbated harms of wasted time, stress, and
reputational harm if the Larimer County Case had to be tried a second time based
on the outcome of trial in this case. The identified potential harms to Ms. Potts are
largely speculative and fairly typical of those faced by any defendant who has
judgment entered against them.
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9. The EEOC also argues that the Larimer County Case is likely to have a
chilling effect on other CollegeAmerica employees’ willingness to file charges or
cooperate with it. As reflected in CollegeAmerica’s Amended Complaint, its
statement of the case filed with the Larimer County Court, and representations
made on the record to this Court, CollegeAmerica’s claim against Ms. Potts in the
Larimer County Case is limited to the question of whether she breached the
Separation Agreement by making disparaging comments against it to its former
employee, Ken Barnhart, through the social networking site LinkedIn and in email.
By way or relief, CollegeAmerica seeks to recover the $7,000 it paid to Ms. Potts
under the terms of the Separation Agreement. It is highly unlikely and speculative
that resolution of this limited claim would have a chilling effect on other
CollegeAmerica employees or negatively impact the EEOC’s ability to pursue its §
7(f)(4) claim in this case. While the EEOC rightly notes that CollegeAmerica has
changed its position on the nature of its claim against Ms. Potts throughout the
history of this case, Ms. Potts is not without recourse from both this Court and the
Larimer County Court should it attempt to do so again in the trial of the Larimer
County Case.
10. Because the EEOC has failed to show that either the EEOC or Ms. Potts
would suffer irreparable harm if CollegeAmerica was to prevail on its claim in the
Larimer County Case before the merits of the EEOC’s claim in this case were
decided, it is not entitled to the extraordinary remedy of injunctive relief, and I need
not give further consideration to the other requisite factors for such relief. First W.

Capital Mgmt. Co., 874 F.3d at 1141.

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IT IS THEREFORE ORDERED that the EEOC’s Motion for Preliminary
Injunction [Doc #202] is DENIED.

Dated: April 30, 2019 in Denver, Colorado.
BY THE COURT:
s/Lewis T. Babcock
LEWIS T. BABCOCK, JUDGE

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