Case 1:25-cv-14723 Document 1 Filed 08/19/25 Page 23 of 28 PageID: 23
G. Robinhood Has Suffered Irreparable Harm and Will Continue To Suffer Irreparable Harm Without Injunctive Relief. 57. Robinhood is suffering irreparable harm as a result of the Division’s refusal to acknowledge that the Court’s KalshiEx Order is equally applicable to Robinhood’s facilitation of sports-related event contracts offered through the Kalshi exchange. Because Robinhood has restored access to sports-related event contract trading for its New Jersey customers, Robinhood faces the imminent threat of potential civil liability and criminal prosecution. The sanctions for violation of the New Jersey statute include civil and criminal penalties, including “a fine of not more than $100,000” and “any other appropriate disposition,” including imprisonment for corporate representatives. N.J.S.A. §§ 5:12A-11(c), 2C:43-2. The threat of prosecution, articulated in the Division’s cease-and-desist letter, is actual and imminent, especially because the Division has refused to discuss with Robinhood a negotiated path forward. A credible threat of prosecution under a preempted state statute causes irreparable harm. See Morales , 504 U.S. at 381. 58. Further, the harm to Robinhood’s reputation caused by the threat, the uncertainty surrounding the cease-and-desist demand, and potential enforcement proceedings by the Division is also irreparable, because it cannot be easily or quickly repaired. KalshiEx , 2025 WL 1218313, at *7; see also Kos Pharms., Inc. v. Andrx Corp. , 369 F.3d 700, 726 (3d Cir. 2004). Robinhood also stands to lose the goodwill of its customers, including its over 48,000 customers in New Jersey. This goodwill, once lost, cannot easily or quickly be regained, even if Robinhood ultimately prevails in litigation, and the risk to goodwill therefore also constitutes irreparable harm. KalshiEx , 2025 WL 1218313, at *7; see also GlaxoSmithKline LLC v. Boehringer Ingelheim Pharms., Inc. 484 F. Supp. 3d 207, 226-28 (E.D. Pa. 2020) (holding that company was entitled to preliminary injunction to avoid reputational harm and loss of goodwill).
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