Import Motors II, Inc. v. National Labor Relations Board

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

IMPORT MOTORS II, INC., Case No. 25-cv-07284-RFL

Plaintiff,

ORDER DENYING MOTION FOR

v. TEMPORARY RESTRAINING

ORDER AND PRELIMINARY

WILLIAM B. COWEN, et al., INJUNCTION

Defendants. Re: Dkt. No. 5

After Import fired one of its employees in December 2023, the union representing him

filed an unfair labor practice charge with the National Labor Relations Board (the “NLRB”). In

January 2025, the NLRB issued an administrative complaint against Import and scheduled a

hearing before an Administrative Law Judge (“ALJ”) to occur on September 9, 2025 (which was

recently rescheduled for September 10). Import now moves for a temporary restraining order

and preliminary injunction staying that long-scheduled hearing because the agency’s proceedings

allegedly violate the Constitution. (See Dkt. No. 5 (the “Motion”).) It raises three claims:

(1) that the two-layer for-cause removal scheme required by Congress improperly insulates

NLRB ALJs and Board Members from the President’s Article II authority; (2) that any tort-like

damages awarded by the presiding ALJ would deprive Import of its Seventh Amendment right to

a jury trial; and (3) that awarding tort-like damages through a quasi-judicial proceeding before an

ALJ would transgress the Constitution’s separation-of-powers regime.

To obtain a temporary restraining order or preliminary injunction, a movant must

demonstrate, among other things, that it “is likely to suffer irreparable harm in the absence of

preliminary relief.” See Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 20 (2008) (citations

omitted); see also Stuhlbarg Int’l Sales Co. v. John D. Brush & Co., 240 F.3d 832, 839 n.7 (9th

Cir. 2001) (“[O]ur analysis is substantially identical for the injunction and the TRO . . . .”).

Having considered the briefs submitted by the parties and intervenor, as well as the argument at

the hearing earlier this afternoon, the Court DENIES the Motion because Import fails to

demonstrate that any of its enumerated, alleged violations of the Constitution would cause

irreparable harm.

Two-Layer Removal and Causation. Under binding Ninth Circuit authority, a party

challenging agency action on the basis of allegedly unconstitutional removal provisions must

show that those removal provisions caused actual harm by affecting the proceedings at issue.

See Kaufmann v. Kijakazi, 32 F.4th 843, 849 (9th Cir. 2022); Decker Coal Co. v. Pehringer, 8

F.4th 1123, 1137-38 (9th Cir. 2021). This requirement originates from the Supreme Court’s

decision in Collins v. Yellen, 594 U.S. 220 (2021). There, the Court held that an unlawful

removal provision does not automatically “inflict compensable harm,” and cannot be the basis to

seek relief, unless there is an additional showing that the inability to remove the officer actually

caused some harm to the proceedings. See id. at 259-60. Such harm could be shown, for

example, if “the President had attempted to remove [the officer at issue] but was prevented from

doing so” because the President “did not have ‘cause’ for removal.” See id. at 259. In so

holding, the Court reasoned that, unlike an unlawful appointment, an unlawful removal provision

“does not strip” the officer of the “power to undertake” the responsibilities at issue and does not

automatically render all of the officer’s actions void ab initio. See id. at 257-58 & nn.23-24.

Although the Supreme Court did not discuss this causation requirement in the context of

a request for prospective injunctive relief, courts have overwhelmingly held that the “reasoning

in Collins applies with equal force regardless of the relief sought.” Cortes v. NLRB, No. 23-cv-

02954-JEB, 2024 WL 1555877, at *6 (D.D.C. Apr. 10, 2024) (quotation marks omitted)

(collecting cases), aff’d, 145 F.4th 57 (D.C. Cir. 2025). This Court agrees. There is no

principled basis for applying Collins’ causation requirement only to requests for retrospective

relief and not to requests for prospective relief. Accordingly, Import must demonstrate that the

NLRB’s removal provisions would cause harm. It has not done so. Indeed, it offers no

explanation whatsoever of how restrictions on the President’s ability to remove NLRB ALJs or

Board Members would affect the upcoming hearing, and it appeared to concede as much at oral

argument on the Motion. Nor is there any basis to conclude that the President has been thwarted

in efforts to remove NLRB ALJs or Board Members. Therefore, as dictated by binding

precedents from the Supreme Court and Ninth Circuit, Import fails to satisfy the irreparable harm

requirement with respect to its two-layer for-cause removal objection.

Import nonetheless suggests that the Supreme Court’s decision in Axon Enterprise, Inc. v.

FTC, 598 U.S. 175 (2023), overruled Collins’ causation requirement sub silentio and abrogated

the Ninth Circuit’s post-Collins decisions. Specifically, it asserts that “being subjected to

unconstitutional agency authority . . . is a here-and-now injury because it is a proceeding, led by

an illegitimate decisionmaker,” even if there is no proof that the purported constitutional

infirmity would actually cause injury. (See Motion at ECF Page 21 (citing Axon, 598 U.S. at

191) (quotation marks omitted).) In Axon, however, the Court did not address questions of

injury, relief, or irreparable harm. Instead, the question there was whether parties to agency

proceedings could challenge statutory removal provisions for ALJs in federal district court,

despite a statutory scheme allowing those proceedings to be reviewed only after their conclusion

by the federal courts of appeals. The Court applied the three-part Thunder Basin test to evaluate

whether this statutory appellate-review scheme had stripped the district courts of jurisdiction.

See Thunder Basin Coal Co. v. Reich, 510 U.S. 200 (1994). The first part of the test asks

whether “precluding district court jurisdiction [could] foreclose all meaningful judicial review of

the claim.” See Axon, 598 U.S. at 186 (citation and quotation marks omitted). In answering that

prong in the affirmative, the Court explained:

The claim, again, is about subjection to an illegitimate proceeding, led by an

illegitimate decisionmaker. And as to that grievance, the court of appeals can do

nothing: A proceeding that has already happened cannot be undone. Judicial

review of . . . structural constitutional claims would come too late to be

meaningful.

Id. at 191; see also id. (attending unconstitutional proceedings constitutes “a here-and-now

injury”). The Court thus concluded (after also applying the second and third Thunder Basin

prongs) that the “statutory review scheme does not preclude a district court from entertaining

these [structural constitutional] claims.” See id. at 180.

Although the Ninth Circuit has not expressly considered the argument that Axon

overruled Collins, this Court is persuaded by the reasoning of the Sixth and Tenth Circuits, and

other district courts both within and outside the Ninth Circuit, that have held that similar

challenges to removal provisions do not present irreparable harm warranting the extraordinary

remedy of preliminary injunctive relief, absent a causal showing.1 As those courts reasoned,

Axon did not address issues of relief or injury, and instead limited itself to the jurisdictional

question of “where” challenges could be brought. See also Axon, 598 U.S. at 180 (“The question

presented is whether the district courts have jurisdiction . . . .”). Axon also did not discuss

Collins or otherwise indicate that it was overruling Collins’ causation requirement.

Import relies on a recent decision from a split panel of the Fifth Circuit reaching the

opposite conclusion. See Space Expl. Techs. Corp. v. NLRB, No. 24-50627, 2025 WL 2396748

(5th Cir. Aug. 19, 2025). The lynchpin of that decision is an assumption that Axon “cannot be

squared” with a requirement of causal harm, because Axon describes “being hauled before an

unlawful tribunal” as a “here-and-now injury” that is “inflicted the instant the proceeding

begins.” See id. at *13 n.114. But there is nothing irreconcilable about this passage in Axon and

the causal harm requirement. A properly appointed ALJ is not illegitimate, and the hearing

conducted is not unlawful, unless there is some reason to believe that the removal restrictions

have tainted the ALJ’s ability to serve in that role. “The mere existence of an unconstitutional

1 See Leacho, Inc. v. CPSC, 103 F.4th 748 (10th Cir. 2024); Yapp USA Auto. Sys., Inc. v. NLRB,

No. 24-1754, 2024 WL 4489598 (6th Cir. Oct. 13, 2024); Amazon.com Servs. LLC v. NLRB, No.

24-cv-09564-SPG, 2025 WL 466262 (C.D. Cal. Feb. 5, 2025); HonorHealth v. NLRB, No. 24-

cv-03009-PHX, 2024 WL 4769772 (D. Ariz. Nov. 13, 2024); Spring Creek Rehab. & Nursing

Ctr. LLC v. NLRB, No. 24-cv-09016-JKS, 2024 WL 4690938 (D.N.J. Nov. 6, 2024); Ares

Collective Grp. LLC v. NLRB, No. 24-cv-00517-TUC, 2024 WL 4581436 (D. Ariz. Oct. 25,

2024); Kerwin v. Trinity Health Grand Haven Hosp., No. 24-cv-00445-RJJ, 2024 WL 4594709

(W.D. Mich. Oct. 25, 2024).

removal provision . . . generally does not automatically taint Government action by an official

unlawfully insulated.” Collins, 594 U.S. at 267 (Thomas, J., concurring). Thus, there is no here-

and-now injury from moving forward with a hearing that has not been shown to be tainted in any

way by the challenged removal provisions. See id. at 270-71 (Thomas, J., concurring) (“I

seriously doubt that the shareholders can demonstrate that any relevant action by [the challenged

official] violated the Constitution. And, absent such an unlawful act, the shareholders are not

entitled to a remedy.”). By contrast, if Import had shown that the President tried to remove the

ALJ but was stymied by unconstitutional removal provisions, a proceeding before that ALJ

would be illegitimate, and Import would thus have shown a here-and-now injury caused by those

removal provisions if required to submit to such a hearing.

This Court declines to extend Axon to conclude that it overruled Collins and created a

sweeping new “entitlement on the merits to a preliminary injunction in every case where

[collateral] constitutional challenges [to administrative proceedings] are raised.” Leacho, 103

F.4th at 759. Nothing in Axon indicates the Supreme Court’s intention to adopt such a major

shift, in which litigants are entitled to a per se finding of irreparable harm whenever they

challenge an agency’s adjudicative processes. Axon simply holds that parties may have an

opportunity to bring those challenges, and make the required causal showing, in district court

before the administrative proceedings begin. See Alpine Sec. Corp. v. FINRA, 121 F.4th 1314,

1336 (D.C. Cir. 2024) (“Axon at most says that, as a matter of statutory jurisdiction, a federal-

court challenge to an unconstitutional appointment can begin before the agency acts. It does not

say that every agency proceeding already underway must immediately be halted because of an

asserted constitutional flaw.”), cert. denied, No. 24-904, 2025 WL 1549780 (U.S. June 2, 2025).

Indeed, the Supreme Court implicitly rejected this extension of Axon when it recently

denied an emergency application in Yapp USA Automotive Systems, Inc. v. NLRB, No. 24A348,

2024 WL 4508993 (U.S. Oct. 15, 2024). There, the Court declined to enjoin NLRB proceedings

following the Sixth Circuit’s refusal to enjoin those proceedings in a materially identical case

concerning the same removal provisions challenged by Import here. The Ninth Circuit has done

the same. See Amazon.com Servs., LLC v. NLRB, No. 25-886 (9th Cir. June 30, 2025) (Dkt. No.

40.1) (denying motion to stay NLRB proceedings pending appeal). “Although [a higher court’s]

interim orders are not conclusive as to the merits, they inform how a court should exercise its

equitable discretion in like cases.” Trump v. Boyle, 145 S. Ct. 2653, 2654 (2025).

In sum, binding authority requires Import to demonstrate how the allegedly

unconstitutional two-layer for-cause removal provisions would cause the complained-of harm. It

has not done so, and it therefore fails to show the irreparable harm necessary to obtain the

extraordinary relief of a preliminary injunction halting its long-scheduled NLRB hearing.

The Seventh Amendment and Separation of Powers. The same reasoning applies to

Import’s claims alleging violations of the Seventh Amendment and separation of powers. Both

claims assert, in essence, that the ALJ would be acting beyond their constitutional authority if

they issued a tort-like damages award against Import. The Seventh Amendment claim alleges

that only juries could award such damages, and the separation-of-powers claim asserts that the

NLRB’s interpretation of its own authority to allow its ALJs to award such damages invades the

province of the judiciary and exceeds the bounds set by Congress. Even assuming those claims

could be heard in district court now rather than in an appeal of the agency proceedings, and even

assuming the validity of the claims, Import has not shown an immediate threatened injury

constituting irreparable harm. Neither of those claims would render NLRB proceedings void ab

initio, as in the case of an unlawful appointment. See Collins, 594 U.S. at 257-58. Rather, just

as an unlawful removal provision would inflict harm only if it thwarts removal of the

adjudicator, an unlawful authorization of the ALJ to award tort-like damages would inflict harm

only if it thwarts attempts to exclude a claim for such relief from the hearing. In other words, as

with its removal provisions challenge, Import must demonstrate causation.

Import has made no such causal showing here. In its administrative complaint, the

NLRB does not purport to pursue damages. (See Dkt. No. 5-1, Ex. A ¶ 11 (enumerating relief

sought).) Nor does Import provide evidence indicating that the NLRB intends to pursue

damages in its proceedings against Import. Instead, Import points solely to an administrative

decision where the NLRB “clarif[ied] that [its] traditional make-whole remedy should also

include compensation for direct or foreseeable pecuniary harms.” See Thryv, Inc., 372 NLRB

No. 22, at *14 (Dec. 13, 2022). But nothing indicates that the NLRB seeks such remedies

against Import in its current proceedings, let alone that Import has been thwarted in an attempt to

exclude such remedies from being sought. Indeed, it is not clear how tort-like damages might

apply to an administrative proceeding, like this one, about an employee allegedly terminated in

retaliation for union activity. In the end, Import’s assertion that such damages might be sought

and that Import might be thwarted in precluding their pursuit is wholly speculative. Import thus

falls far short of showing the “immediate threatened injury” required for preliminary injunctive

relief. See Caribbean Marine Servs. Co. v. Baldrige, 844 F.2d 668, 674 (9th Cir.1988); see also

id. (“Speculative injury does not constitute irreparable injury sufficient to warrant granting a

preliminary injunction.” (citation omitted)).

Moreover, even upon issuance of an award for such damages, it is difficult to see how the

harm would be irreparable. A requirement to pay money is quintessentially non-irreparable;

cancellation of the award in an appeal, as permitted by the applicable statutory scheme, would

afford complete relief. See 29 U.S.C. § 160(f); see also HonorHealth, 2024 WL 4769772, at *4

(appellate review guards against irreparable harm stemming from alleged violation of Seventh

Amendment); Ares, 2024 WL 4581436, at *2 (same). And, to the extent that Import would lose

time and money by preparing for and attending administrative proceedings concerning tort-like

damages, that kind of harm is not irreparable either. See Nationwide Biweekly Admin., Inc. v.

Owen, 873 F.3d 716, 735 n.20 (9th Cir. 2017) (“[M]ere litigation expense, even substantial and

unrecoupable cost, does not constitute irreparable injury.” (citation omitted)). Indeed, courts

routinely treat damage awards erroneously issued in violation of constitutional requirements as

being fully redressable on appeal, and they therefore decline to find irreparable harm based on

the threat of such an award. See Ponte v. FDIC, No. 24-cv-02379-APM, 2024 WL 4730602, at

*8 (D.D.C. Oct. 11, 2024) (observing that it is “well-established” that such a harm “can be

remedied on appeal”). The same reasoning applies here.

Furthermore, as to each claimed constitutional violation, “the timing of [Import’s] TRO

request undermines the irreparability and imminency of its alleged harms.” HonorHealth, 2024

WL 4769772, at *4 (citation omitted). The NLRB gave notice to Import of the September

hearing more than seven months before Import commenced this action. Import also waited

another six days after it filed the lawsuit to seek emergency relief. Despite multiple

opportunities to do so, including direct questioning at oral argument, Import has cited no reason

for its delay, beyond its desire to wait for more favorable case law. That, of course, is not a basis

for a failure to assert legal rights. To be sure, “[d]elay by itself is not a determinative factor,” but

it nevertheless “implies a lack of urgency and irreparable harm.” Cuviello v. City of Vallejo, 944

F.3d 816, 833 (9th Cir. 2019) (citations omitted).

In sum, Import does not demonstrate that any alleged constitutional violations would

cause irreparable harm. Accordingly, the Court DENIES the Motion.”

IT IS SO ORDERED.

Dated: September 8, 2025

ALE

RITA F. LIN

United States District Judge

> Because failure to satisfy the irreparable harm requirement mandates denial of the Motion, this

Order does not reach any other issue presented in the Motion or the Parties’ briefing.