Motion for a preliminary injunction against former franchisees; Denial based on the “unclean hands” doctrine; The “irreparable harm” factor; Temporary restraining order (TRO)

[This appeal was from the ED-MI.] The court affirmed the district court’s ruling granting in part and denying in part plaintiff-Fetch! a motion for a preliminary injunction, concluding there was clear corroborated evidence that by “‘aggressively recruiting’” defendants-franchisees while failing to fully disclose “the true and full nature of the business and expected financial performance, Fetch! exhibited unclean hands.” Fetch! sued several of its former franchisees for allegedly attempting to exit their franchise agreements, and steal trade secrets and customers. Defendants argued that Fetch! “deceived them” regarding the types of franchises available, and cited issues with customer-service, professionalism, and availability, among other things. They asserted they learned that Fetch! had bought back other unprofitable franchises that could not make royalty payments, paying only “‘pennies on the dollar’” for them. Eventually, Fetch! shut defendants out of its system without notice. The district court granted in part and denied in part Fetch!’s motion for a TRO, allowing defendants to continue to operate their competing businesses with certain restrictions. It later denied in part and granted in part the motion for a preliminary injunction, reiterating “what its TRO had ordered: that defendants-appellees stop using Fetch!’s trademarks and cease further communication with any existing Fetch! franchisee.” The court held that the “district court’s application of unclean hands was within the bounds of its discretion.” It found that Fetch!’s actions could “fairly ‘be said to transgress equitable standards of conduct.’” This was enough for the district “court to deny Fetch! equitable relief.” Further, based on the district court’s findings, it concluded the same was true as to “Fetch!’s decision to cut the 1.0 franchisees off from its system . . . .” The court explained that its decision was based on the unclean hands doctrine and that it disagreed with the district court’s analysis of the “irreparable injury” factor. Clarifying its precedent, it held that it was error to require “a heightened showing of irreparable harm when a movant seeks a preliminary injunction on claims that shall ‘be resolved in a pending arbitration.’” It also held that the district court erred by applying the “clear-and-convincing standard to show irreparable harm.” Rather, district courts “should adhere to the federal standard[,]” which requires a movant to “show that ‘irreparable injury is likely in the absence of an injunction.’” Further, it erred in ruling “that Fetch!’s harms were either in the past or too speculative.” The court “has consistently held that competitive injuries like those alleged here qualify as irreparable harm precisely because they are ‘difficult to calculate.’”