Case 1:25-cv-01283-ABA Document 29 Filed 05/19/25 Page 15 of 17
significant reputational harm. Morales v. Trans World Airlines, Inc. , 504 U.S. 374, 381 (1992). Loss of goodwill alone can constitute irreparable harm. Multi-Channel TV Cable Co. v. Charlottesville Quality Cable Operating Co., 22 F.3d 546, 552 (4th Cir. 1994). Defendants do not dispute—and thus concede—that Kalshi would suffer harm in the absence of a preliminary injunction that could not be recouped through damages due to Eleventh Amendment immunity. Defendants instead claim (at 26) that Kalshi is not entitled to relief because any harm it may suffer is “of its own making.” The same argument was made in Hendrick and Flaherty , and both courts rejected it. Since the CFTC approved Kalshi as a DCM in 2020, Kalshi has sought to comply with the CFTC’s core principles. Kalshi “enact[s] and enforce[s] rules to ensure fair and orderly trading, including rules designed to prevent price manipulation, cornering and other market disturbances.” Am. Agric. Movement , 977 F.2d at 1150-51. It “make[s] public daily information on settlement prices, volume, open interest, and opening and closing ranges” for contracts, 17 C.F.R. § 38.450; it keeps records of most transactions for at least 5 years, id. §§ 38.950, 1.31(b)(1); it offers “impartial access” to its platform, id. § 38.151(b); it makes its records “open to inspection by any representative of the” CFTC or DOJ, id. § 1.31(d)(1); and it maintains financial resources to “cover its operating costs for a period of at least one year,” id. § 38.1101(a)(2). These are the only regulations Kalshi had any reason to believe apply to it. The harm in this case arose when Defendants chose to issue a cease-and-desist letter purporting to subject Kalshi to preempted state laws and threatening Kalshi with civil and criminal action for noncompliance. C. The Other Equitable Factors Favor A Preliminary Injunction. As the Districts of Nevada and New Jersey held, “[t]he balance of hardships tips in Kalshi’s favor given that it is facing substantial monetary expenditures, reputational damage, or civil and criminal prosecution based on the defendants’ demands that the defendants likely
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