2:25-cv-575-APG-BNW MOTION HEARING - ROUGH DRAFT - DO NOT CITE!!!
85 it a deadline to comply. The defendants refused to extend the briefing in this case, and now they've asked me to enjoin Kalshi from doing anything further. That creates a credible threat of imminent prosecution for a State law violation that appears to conflict with Federal law, and that can constitute irreparable harm under the case of Valle Del Sol, Inc., vs. Whiting , 732 F.3d 1006 at 1029. Yes, Kalshi is, in some sense, proceeding at its own risk and creating its own harms. Things might turn out differently with the election contracts if the D.C. Circuit rules against it or if the CFTC takes actions on the sports contracts, but, again, right now I'm going to preserve the status quo, which is that these contracts are legal under Federal law, so requiring Kalshi to stop altogether and lose the good will or damage its reputation and to spend millions of dollars that may not be recoverable and potentially lose its designation as a CFTC-approved market, again, is enough for a short-term injunction, in my mind, based upon the irreparable harm it would face. In terms of the balance of hardships, those tip in Kalshi's favor, given that it's facing substantial monetary expenditures, reputational damage, and civil or criminal prosecution based upon demands that defendants likely cannot make because they're preempted. In contrast, the defendants are not facing much harm
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UNITED STATES DISTRICT COURT Judy K. Moore, RMR, CRR
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