Int’l Franchise Ass’n v. City of Seattle

In order to obtain a preliminary injunction, on must show: (1) the claim is likely to succeed on the merits; (2) the plaintiff is likely to suffer irreparable harm without preliminary relief; (3) the balance of hardships tips in the plaintiff’s favor; and (4) a preliminary injunction is in the public interest.

The Income Inequality Advisory Committee (IIAC) of Seattle proposed an ordinance that would raise the minimum wage to $15 per hour in stages according to the amount of employees that a business had. The ordinance unanimously passed, including two schedules for large and small employers for raising wages, which classified franchisees as large employers. The International Franchise Association (IFA) filed suit seeking a preliminary injunction to preventing Seattle from enforcing the wage bumps with regard to franchisees because of the steeper incremental wage increases they are subjected to under this ordinance. The IFA alleged that the franchisee classification violated the Commerce Clause, the Equal Protection Clause, and the First Amendment of the Constitution. On appeal, the Ninth Circuit held that the IFA did not show that they were likely to succeed on the merits, and that the preliminary injunction was not in the public interest. Additionally, the IFA did not demonstrate that the ordinance would burden interstate commerce, or that interstate firms would be excluded from the market, earn less profit, or reduce stores. With regard to the claim on the Equal Protection Clause violation, the panel held that there existed a legitimate purpose in the franchisee classification, and that there was a rational relationship between franchisees and their classification as a large employer. Finally, the panel rejected the First Amendment claim after determining that the ordinance was not intended to suppress speech. There was no evidence showing that the public interest would suffer as a result of the ordinance, and IFA failed to show that an injunction on the ordinance would be best for the public interest. AFFIRMED.