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Keyoni Enterprises, LLC v. County of Maui

United States District Court, District of Hawaii

March 30, 2015

KEYONI ENTERPRISES, LLC and MAUI KAI ENTERPRISES LLC dba Tresor-Rare and GRATiAE, Plaintiffs,
v.
COUNTY OF MAUI, a municipal corporation, Defendant.

ORDER DENYING PLAINTIFFS’ MOTION FOR TEMPORARY RESTRAINING ORDER OR, IN THE ALTERNATIVE, FOR PRELIMINARY INJUNCTION

Derrick K. Watson United States District Judge

Keyoni and Maui Kai Enterprises, LLC (the “Enterprises”) seek a temporary restraining order or, in the alternative, a preliminary injunction prohibiting the County of Maui from enforcing Maui County Code § 19.52.090(E) against their Tresor-Rare and GRATiAE stores in Lahaina, Maui. Because the Enterprises have failed to show a likelihood of success on the merits of their claims or that they would be irreparably harmed without a temporary restraining order or preliminary injunction, the motion is denied.

BACKGROUND

The Enterprises lease commercial property on Front Street in Lahaina, Maui, where they operate two high-end cosmetic stores, Tresor-Rare and GRATiAE (the “Stores”). Both businesses are owned by individuals of Israeli descent.

The Enterprises’ business model relies on a strategy of “[s]tore employees speak[ing] to passersby, greeting them and asking them if they would be interested in free samples or a demonstration of the store’s products.” The Stores obtain approximately 75% of their customers through this method. Complaint ¶¶ 29–30; Decl. of Victor Mazliah (“Mazliah Decl.”) ¶¶ 7–8.

Over the past year, the LahainaTown Action Committee has “received multiple complaints from business owners and residents in Lahaina regarding the hawking taking place on Front Street.” Decl. of Lynn Donovan ¶ 3. These complaints have focused primarily on three cosmetic stores, including Tresor-Rare and GRATiAE. The complaints alleged, among other things, that an employee from GRATiAE “was standing on the sidewalk with his arms outstretched and said ‘Let me give you a hug and a sample, ’” and that an “employee from Tresor[-]Rare approach[ed] several people on the side walk and handed them sample packets.” Decl. of Conklin Wright (“Wright Decl.”), Ex. D at 1, 3. In August of 2014, these complaints were referred to Conklin Wright, an inspector for the County of Maui’s Department of Planning, Zoning Administration and Enforcement Division. Wright Decl. ¶ 4.

Inspector Wright began investigating the complaints by visiting the Tresor-Rare and GRATiAE store locations and observing the store employees’ conduct. Inspector Wright personally observed the following:

- Two male employees physically pull[ing] a lady from the sidewalk into the GRATiAE store at 752 Front Street;
- Sales people walking after people on the sidewalk trying to get them to turn around and walk back to their GRATiAE store;
- Sales people handing out samples of their product to people on the sidewalk trying to get them to go back into the GRATiAE store;
- Sales people speaking to people on the sidewalk about their products and trying to get them back into the GRATiAE store;
- Sales people walk[ing] out of the store after people on the sidewalk to try and get them into the Tresor-Rare store at 709 Front Street;
- Sales people hand[ing] out samples and speak[ing] to people on the sidewalk in front of the Tresor-Rare store;
- Sales people hold[ing] the hand of a potential customer on the side walk and walk them into the Tresor-Rare store at 709 Front Street.

Wright Decl. ¶ 6.

Following these observations, Inspector Wright advised the Stores’ employees that they could not pass out samples or solicit customers on the sidewalk outside of their stores. When Inspector Wright continued to observe similar conduct, he issued Notices of Warning, dated December 12, 2014, to the landlords of the property where the Stores were operating. Wright Decl. ¶ 7; see Mazliah Decl., Ex. 2. The warnings were issued “[f]or soliciting in a public area” in violation of Maui County Code § 19.52.090(E). Mazilah Decl., Ex. 2.

Inspector Wright conducted follow-up inspections on the Stores subsequent to issuing the Notices of Warning. Because the same conduct continued on the sidewalks fronting the Stores, Wright advised the landlords that Notices of Violations (“NOV”) would be sent out if the conduct did not stop. Wright also met with Mazliah, one of the owners of the Stores. Wright Decl. ¶¶ 7–8.

As a result of the initial complaints, Wright’s observations, and the fact that there was no observed change in the employees’ conduct outside of the Stores, Wright issued NOVs on February 6, 2015 on three stores, two of which were Tresor-Rare and GRATiAE. The NOVs were for violations on November 28, 2014 of Maui County Code § 19.52.090(E), and included an initial fine of $1, 000, plus a daily civil fine of $1, 000 until the soliciting in public places ceased. Mazliah Decl., Exs. 3, 5. According to Inspector Wright, “[a]s recently as Monday[, ] March 23, 2015, I again observed salespeople at both stores soliciting customers on the sidewalk.” Wright Decl. ¶ 11.

Maui County Code § 19.52.090(E) (the “ordinance”) provides, in relevant part:

Selling in public places. It is unlawful for any person to carry on or solicit business in any location on any street, highway, or sidewalk. The same is also unlawful in any location, in any park or open space that is owned or maintained by a government agency without the approval of the cultural resources commission, and the responsible government agency having administrative authority over the park or open space.

On March 19, 2015, the Enterprises filed a complaint, asserting the following claims against the County of Maui: a 42 U.S.C. § 1983 claim for violation of the Enterprises’ First Amendment (commercial speech) rights; a 42 U.S.C. § 1983 claim for violation of the Enterprises’ Fourteenth Amendment (due process) rights; a 42 U.S.C. § 1983 claim for violation of the Enterprises’ Fourteenth Amendment (equal protection) rights; and corresponding free speech, due process, and equal protection claims under the Hawai'i Constitution. Complaint ¶¶ 61–118. In conjunction with the ...


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