Cole et al v. Spartanburg, City of et al

Filing 27

OPINION and ORDER denying 5 Motion for TRO; denying 5 Motion for Permanent Injunction; denying 5 Motion for Preliminary Injunction. Signed by Honorable A Marvin Quattlebaum, Jr on 6/4/18.(alew, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF SOUTH CAROLINA
GREENVILLE DIVISION
) Civil Action No.: 7:18-00980-AMQ
)
)
Plaintiffs, )
)
OPINION AND ORDER
)
v.
)
)
City of Spartanburg, Spartanburg City Council,
Ed Mermmott, in his individual and official
)
capacity, Does 1-10,
)
)
Defendants. )
__________________________________ )
Christopher M. Cole and Cole Towing and
Recovery, LLC,

This matter is before the Court on Plaintiffs’ Motion for a Temporary Restraining Order
and Preliminary Injunction. (ECF No. 5.) Plaintiffs seek an order prohibiting Defendants from
interfering and/or suspending Plaintiffs’ operation of its towing business in the City of
Spartanburg, State of South Carolina; and postponing and/or suspending any pending
administrative hearings seeking to revoke Plaintiffs’ permit and/or business license in the City of
Spartanburg, State of South Carolina. (ECF No. 5 at 1.) This matter has been fully briefed and a
hearing on this motion was held on May 1, 2018. For the reasons set forth in this order, the Court
denies Plaintiffs’ motion.
BACKGROUND
This case arises out of dispute involving the Defendant City of Spartanburg’s towing
ordinance and suspension of Cole Towing and Recovery, LLC’s (“Plaintiffs” or “Cole Towing”)
nonconsensual towing permit. Cole Towing and Recovery, LLC is a company which allegedly
offers tow, wrecker and impound services in the City of Spartanburg, South Carolina and

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surrounding areas. (ECF No. 5-1 at 1.) One of the types of services Cole Towing provides to its
customers is known as “nonconsensual towing,” which occurs when a towing company removes
a vehicle at the behest of a landowner without the consent of the vehicle’s owner. Id.
On April 10, 2017, the ordinance governing nonconsensual towing within the City was
amended (“the Ordinance”) to prevent certain predatory towing practices. (ECF No. 18 at 1.)
Predatory practices included instances where vehicles were towed from locations without
sufficient notice, vehicles being towed despite the driver offering to pay a “drop fee” as the
vehicles were being towed, towing vehicles to temporary staging lots where the owners could not
access or pickup their vehicles and excessive fees. Id. at 2. On April 27, 2017, Plaintiffs’
received a license and a towing permit in accordance with the requirements of the amended
ordinance. Id. at 1. On the same day, Plaintiffs filed a state court action against the City of
Spartanburg and the Spartanburg City Council (Cole Towing and Recovery, LLC v. The City of
Spartanburg, et. al. Civil Action No. 2017-CP-42-01468), challenging the constitutionality and
legality of the Ordinance. Id. In that action, Plaintiffs moved for temporary injunctive relief,
which was denied for failure to show irreparable harm or lack of an adequate remedy sufficient
to justify an injunction. Id. at 1-2. The case was ultimately dismissed by South Carolina Circuit
Court Judge Durham Cole on December 5, 2017, and, at the time of the hearing of Plaintiffs’
Motion in this case, was pending on an appeal brought by Plaintiffs in the South Carolina Court
of Appeals. Id.
On December 29, 2017, the City Manager for the City of Spartanburg, Ed Memmott, sent
Plaintiffs a letter informing them that Cole Towing and Recovery, LLC’s towing permit had
been temporarily suspended and that a hearing had been set for January 16, 2017, pursuant to the
Ordinance. (ECF No. 5-3.) The letter further set out the grounds for suspension of the permit,

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including multiple violations of the Ordinance. Id. Specifically, the letter informed Plaintiffs of
improper staging incidents on August 24, 2017, and September 1, 2017, refusing “drop
payments” on September 1, 2017, and December 23, 2017, and a violation of the two-mile
storage facility requirement in the Ordinance. Id. Shortly thereafter, Plaintiffs requested that the
administrative hearing be delayed to allow Defendants to comply with Plaintiffs’ FOIA request.
(ECF No. 18-1 ¶ 10.) The parties agreed and the hearing was re-set for March 27, 2018. (ECF
No. 18 at 2.)
The administrative hearing began on March 27, 2018, but did not conclude at that time.
(ECF No. 5-1 at 5.) The hearing was reconvened on April 12, 2018, at which time testimony was
concluded. (ECF No. 18 at 3.) After reviewing an appointed hearing officer’s findings and
recommendations as to whether Plaintiffs’ permit should be revoked, the City Manager issued a
final, appealable decision on May 3, 2018. (ECF No. 25-1.) In the decision, the City Manager
found that the permit issued to Plaintiffs was properly suspended on December 29, 2017, and
declined to reinstate Plaintiffs’ permit. Id. Per the City Manager’s decision, Plaintiffs may apply
for a new permit to provide nonconsensual towing in the City so long as Plaintiffs’ application
meets the requirements of the Ordinance. Id.
STANDARD OF REVIEW
A preliminary injunction is an extraordinary remedy that will be issued only upon a
showing by a plaintiff of four requirements: (1) that he is likely to succeed on the merits, (2) that
he is likely to suffer irreparable harm in the absence of preliminary relief, (3) that the balance of
equities tips in his favor, and (4) that an injunction is in the public interest. Real Truth About
Obama, Inc. v. FEC, 575 F.3d 342, 346 (4th Cir. 2009), vacated on other grounds, 130 S.Ct.
2371, 176 L.Ed.2d 764 (2010) (citing Winter v. NRDC, Inc., 555 U.S. 7, 129 S.Ct. 365, 374, 172

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L.Ed.2d 249 (2008) and redefining the Fourth Circuit's previous preliminary injunction standard
articulated in Blackwelder Furniture Co. of Statesville v. Seilig Manufacturing Co., 550 F.2d 189
(4th Cir.1977)). Because of the extraordinary nature of injunctive relief, the Supreme Court has
admonished that interlocutory injunctions “may only be awarded upon a clear showing that the
plaintiff is entitled to such relief.” Winter, S.Ct. 365 at 376.
DISCUSSION
A. Likelihood of Success on the Merits
The Supreme Court in Winter, recognizing that a preliminary injunction affords relief
before trial, requires that the plaintiff make a clear showing that it will likely succeed on the
merits at trial. (Real Truth About Obama, Inc. 342 at 346) (citing Winter 129 S.Ct. at 374, 376).1
Plaintiff must “ ‘clear[ly] show [ ]’ that [he] is likely to succeed on the merits.” Dewhurst v.
Century Aluminum Co., 649 F.3d 287, 290 (4th Cir. 2011) (citing Winter, 555 U.S. at 22, 129
S.Ct. 365).
Plaintiffs argue that they are likely to succeed on the merits because the City’s suspension
of their towing permit constituted an unlawful deprivation of a protected property right without
due process. (ECF No. 5-1 at 8.) While Plaintiffs make multiple arguments about the
circumstances and hearing regarding their towing permit, Plaintiffs’ arguments center on their
assertion that the City wrongfully removed a constitutionally protected property right when it
suspended Plaintiffs’ license and towing permit. In support, Plaintiffs rely heavily upon the
Fourth Circuit Court of Appeals case of Pritchett v. Alford, 973 F.2d 307 (4th Cir. 1992). In
Pritchett, the operator of a wrecker service filed a motion for summary judgment, arguing that

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See also Amoco Production Co., 480 U.S., at 546, n. 12, 107 S.Ct. 1396 (“The standard for a
preliminary injunction is… that the plaintiff must show a likelihood of success on the merits
rather than actual success”).
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his procedural due process rights under the Fourteenth Amendment were violated when his
business was removed from a wrecker-referral list administered by the South Carolina Highway
Patrol without any notice, opportunity to be heard or other process. On appeal, Fourth Circuit
held that the operator had a “constitutionally protected property right under the Fourteenth
Amendment not to be removed from the wrecker-list summarily, without any prior notice,
opportunity to be heard, or other process.” Id. at 317.
The Court does not read Pritchett to stand for the proposition that a suspension followed
by a hearing is in of itself improper. Other decisions seem to suggest that a suspension following
a hearing is permissible. For example, in Battersby v. Carew et al., this Court found that
defendants lawfully suspended a chiropractor’s license when the chiropractor was provided
notice of suspension and an opportunity to be heard before an administrative board. No. 8:14–
761–HMH, WL 4269109 (D.S.C. Aug. 28, 2014) (unpublished). Further, in this case, Plaintiffs
were notified of the suspension and informed of the administrative hearing at which they had the
opportunity to be heard. The City sent Plaintiffs a letter on December 29, 2017, explaining
Plaintiffs’ violations of the ordinance and notifying them of an administrative hearing. (ECF No.
5-3.) Plaintiffs then had an opportunity to be heard at two hearings which gave Plaintiffs the
opportunity to argue, present evidence, and cross-examine witnesses. (ECF No. 18 at 4.) Of
course, Plaintiffs also have the right to appeal the result of the hearing. (ECF No. 25-1.) While
Plaintiffs criticize the sufficiency of the due process afforded by these procedures, Plaintiffs have
received the procedural protections described above. Accordingly, the Court finds that Plaintiffs,
at this stage of the proceeding, have failed to make a “clear showing” that they have a likelihood
to prevail on the merits of their case.
B. Irreparable harm

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Pursuant to the second factor in Winter, Plaintiffs assert that they have suffered, and
continue to suffer, irreparable harm in the absence of a preliminary relief. (ECF No. 5-1 at
6.) The Fourth Circuit requires that the party seeking the injunction make a clear showing that it
will likely suffer irreparable harm without an injunction. Real Truth About Obama, Inc. v. Fed.
Election Comm'n, 575 F.3d 342, 347 (4th Cir. 2009) (citing Winter, 129 S.Ct. at 374–76).
“[W]hen the failure to grant preliminary relief creates the possibility of permanent loss of
customers to a competitor or the loss of goodwill, the irreparable injury prong is satisfied.”
Multi–Channel TV Cable Co. v. Charlottesville Quality Cable Operating Co., 22 F.3d 546, 552
(4th Cir. 1994) (citing Merrill Lynch, Pierce, Fenner & Smith v. Bradley, 756 F.2d 1048, 1055
(4th Cir. 1985)). However, when the record indicates that a plaintiff’s loss is matter of simple
mathematical calculation, the plaintiff fails to establish irreparable injury for preliminary
injunction purposes.

Multi–Channel TV Cable Co. at 552. See also MicroAire Surgical

Instruments, LLC v. Arthrex, Inc., 726 F.Supp.2d 604, 636–39 (W.D. Va. 2010) (finding no
irreparable harm to goodwill when it was “logically and factually unclear” how introduction of a
competing product would injure the plaintiff's goodwill when the plaintiff did not demonstrate
more than the potential for lost sales or give a reasonable basis for its conclusion that its training
programs would lose value).
Plaintiffs argue that the irreparable injury prong is satisfied because Plaintiffs will
continue to lose employees, customers and business goodwill in the absence of preliminary
relief. (ECF No. 5-1 at 6-7.) Specifically, Plaintiffs allege that the structural health of their
business has declined due to a loss of employees to competitors and that the company has lost
legitimacy in the eyes of the public due to Plaintiffs’ inability to operate and fulfill contracts
within the City of Spartanburg. Id. Plaintiffs also claimed that Cole Towing lost sixty percent of

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its business, approximately $150,000 in revenue and a number of employees as a result of
Defendants’ suspension of their license. In response, Defendants point out that Plaintiffs have
not provided the Court with any names, affidavits or evidence for their assertions. (ECF 18 at 67.) Further, Defendants contend Plaintiffs have not introduced evidence of permanent loss of
customers, employees or goodwill as a result of the City’s temporary suspension of Plaintiffs’
towing license that cannot be remedied through money damages.
Based on the Record presented to the Court at this time, the Court finds that Plaintiffs
have failed to make a clear showing of irreparable harm. Plaintiffs’ allegations of harm are not
supported by sufficient evidence at this early stage of this case to meet this requirement from
Winter. Further, the harm about which Plaintiffs’ complain appears to be capable of being
satisfied by money damages. Thus, Plaintiffs have failed to meet their burden of making a “clear
showing” that they are likely to suffer irreparable harm in the absence of a preliminary
injunction.
C. Balance of Equities and Public Interest
The balance of the equities and the public interest are the third and fourth Winter factors
to be considered for a preliminary injunction. Winter, 555 U.S. at 20. In order to prove these
factors, Plaintiff must show the balance of the equities tip in their favor and that preliminary
injunctive relief is in the public interest. Id. The Court “must balance the competing claims of
injury and must consider the effect on each party of the granting or withholding of the requested
relief.” Id. at 24.
Plaintiffs argue that the economic hardship caused by Defendants’ conduct tips the
balance of the equities in their favor and that it is in the public’s interest to allow Plaintiffs to
provide an economic benefit to their customers under principles of an open marketplace. (ECF

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No. 5-1 at 9.) More specifically, Plaintiffs argue private property holders have a vested interest in
keeping their properties free of unauthorized vehicles. Plaintiffs also claim that there is an
associated business and economic benefit to private property owners being able to reserve
parking for customers and that this public interest assists in property values being protected from
waste. Id.
In response, Defendants assert that Plaintiffs violated the City’s ordinance on multiple
occasions and that such violations are in direct opposition to the interest of the public and the
City of Spartanburg. (ECF No. 18 at 8-9.) Defendants argue that there is nothing in the record to
indicate that the private property owners in the City of Spartanburg are unable to locate another
towing company to keep their properties free and clear of unwanted vehicles. Id. Nor is there any
indication in the record that the suspension of Plaintiffs’ license has diminished free trade or the
marketplace in Spartanburg according to Defendant. Id. Furthermore, Defendants claim that
Plaintiffs violated a number of provisions in the ordinance in direct opposition to the public
interest. Id. Specifically, on August 24, 2017, and September 1, 2017, Defendants contend
Plaintiffs towed vehicles from a parking lot and temporarily stored them at locations other than
the designated storage facility. (ECF No. 18-9.) On September 1, 2017, and December 23, 2017,
Defendants contend Plaintiffs refused to accept payment from the drivers of vehicles that were in
the process of being towed. Defendants also claim Plaintiffs failed to maintain a storage facility
within two miles of the City, charged “dolly fees” when no dolly was used and charged drivers
for storage fees after refusing to allow them to pick up their vehicles on the days requested. (ECF
No. 18 at 8-9.)
After reviewing the pleadings and submissions of both parties, the Court finds that
Plaintiffs have failed to make a clear showing that they will prevail on both factors. In addition to

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the arguments of Defendants discussed above, the Ordinance has been found to be constitutional
by the Spartanburg County Court of Common Pleas. Furthermore, Plaintiffs have not exhausted
their administrative remedies. Plaintiffs may appeal the City’s written administrative decision to
suspend Plaintiffs’ towing license and/or apply for a new permit after May 31, 2018. Therefore,
for these additional reasons, the balance of the equities and public interest Winter factors for a
preliminary injunction do not cut in favor of Plaintiffs’ motion.

D. Abstention Doctrines under the Anti-Injunction Act
The City has raised other issues concerning the Court’s jurisdiction under various
abstention doctrines and under the Anti-Injunction Act. Since the Court has found that Plaintiffs
have not met their burden of proof for a preliminary injunction, the Court declines to address
these issues.
CONCLUSION

For the reasons set forth above, Plaintiffs’ Motion for a Temporary Restraining Order and
Preliminary Injunction (ECF No. 5) is DENIED.
IT IS SO ORDERED.
/s/ A. Marvin Quattlebaum, Jr.
United States District Judge
June 4, 2018
Greenville, South Carolina

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