F OR P UBLICATION



### UNIT E D ST AT E S CO URT O F APPE AL S FO R T H E NINT H CIRCUIT

T H E P E O P L E O F T H E S T A T E O F C A L I F O R

N I A , Plaintiff-Appellee

,

v

.

I N T E L L I G E

N D E R , L L C, Defendant-Appellant

. N o. 13-56806

D.C. No. 2:10-cv-04210- AB C-VB K

OPI NI ON

A ppeal from the United States District Court for the Central District of California Audrey B . Collins, District J udg e, Presiding

Arg ued and Submitted Aug ust 4, 2014—Pasadena, California

F iled November 7, 2014

B efore: Stephen Reinhardt, Kim McL ane W ardlaw, and Consuelo M. Callahan, Circuit J udg es.

Opinion by

J udg e W ardlawS T A T E O F C A L I F O R N I A V

. I N T E L L I G E

N D E R 2

SUMMARY *

Class Action F airness Act / Res Judicata

The panel affirmed the d istrict court’s denial o f I ntelliGender, L L C’s motion to e njoin an entire enforcement action broug ht by the S t a te of California under the State’s Unfair Competition and F alse A dvertising L aws, but reversed the denial of I ntelliGender’s motion to enjoin only the State’s restitution claims in the State’s action seeking relief f or some individuals who were bound by a Class Action F airness A ct class action settlement conc erning a nationwide class o f disappointed purchasers of the I ntelliGender Prediction Test, which purported to predict a fetus’s g e n d er.

The panel held that the district c ourt c o r r e c tly denied I ntelliGender’s motion to enjoin the State’s enforcement action in its entirety

. The p anel held that a Cl ass Action F airness Act (“CAF A”) class action, thoug h approved by the district c ourt, did not a c t as res judicata ag ainst the State in its sovereig n capacity

, even thoug h many of the same c laims

were included in both the CAF A action and the enforcement action. The panel further h e l d that because the State action

was broug ht on behalf of the p eople, it implicated the p ublic’s interest as w ell as private interests, and therefore the remedial provisions swept much more deeply

.

The panel held that the district c ourt erred in deny ing I ntelliGender’s motion to enjoin the State’s clai m s for restitution b ecause the State’s action, insofar as it s o u gh t

* T h is su m m ary co n stitu

tes n o part o f th e o p in io n o f th e co u rt. It h as b een p rep ared b y

co u rt staf

f f o r th e co n v en i en ce o f

th e read er.S T A T E O F C A L I F O R N I A V

. I N T E L L I G E

N D E R 3

restitution for individual members of t h e settlement c lass, could be enj o i ned under the district court’s continuing jurisdiction to e nforce and administer the class action settlement. The panel held that the State, having chosen not
to participate in the CAF A action, w as precluded from seeking the same relief soug ht in the CAF A c lass act i on b y operation of the principles of res judicata.

COUNSEL

Doug las J

. Collodel (arg

u ed ), Sedg w ick L L P, L os Ang eles, California; Paul J effrey Riehle, Nora W e tz el, Sedg w ick L L P, San F rancisco, California, for Defendant-Appellant.

Kristine A

. L orenz (arg ued), San D ieg o City Attorney ’s Office, San Dieg o, California, for Plaintiff-Appellee.S T A T E O F C A L I F O R N I A V

. I N T E L L I G E

N D E R 4

OP INION

W A RDL AW , Circuit J udg e:

T h i s case sits squarely at the intersection of the Cl a s s Action F a irness Act ( “CAF A”) and a s o v ereig n’s rig h t to bri n g a n enforcement action to protect its citiz ens from unscrupulous, fraudulent, or h armful business practices. The district court approved a CAF A settlement betw een a nationwide certified class of di s appointed purchasers of the I ntelliGender Prediction Test and defendant I ntelliGender, which sold and advertised the T est as an accurate predictor o f

a f e tus’s g ender using the mother’s urine sample. Subsequently

, t h e People of the State of California filed an enforcement action ag ainst I ntelliGender un d e r the State’s Unfair Competition and F al s e Advertising L aws, larg ely based on the same claims a sserted in the CAF A class action. The State seeks civil penalties, inju n ctive relief, a nd restitution f

or some individuals who w ere b ound b y the CAF A class action settlement. I ntelliGender initially moved for an injunction ag a inst the State’s entire a ction, which the di strict court denied. I ntelliGender nex t moved for an injunction ag ainst only the State’s restitution claims, p ositing that the State’s action und e r m i n es the finality of the CAF A settlement, which the court also denied. B e cause the State’s action is desig n ed to vindicate broader g overnmental interests than the class action, the settlement ag reement in the CAF A class action does n ot create p r i v i t y sufficient to warrant enjoining the e ntire action. While w e r ecog niz e the Stat e ’s strong interest in protecting its citiz ens throug h enforcementS T A T E O F C A L I F O R N I A V

. I N T E L L I G E

N D E R 5

actions, we n ote that CAF A e x p r e s sly provides that the defendant in a class action must pro v i d e n o tice to the appropriate state official of any proposed s e t t lement, presumably

so that the state may

comment upon or object to
t h e settlement’s approval, if the State believes the t e r m s inadequately p rotect state citiz ens. Here, the appropriate State officials were notified, but they c hose not to p articipate in the settlement approval p r o c e s s

. The State cannot n ow obtain a duplicate recovery i n t h e f o rm of restitution on behalf o f th o s e individual citiz ens who are bound b y the ba rga i ned for restitution in the CAF A class settlement. According ly we aff

i r m t he district court’s denial of the motion to enjoin the entire State action, b ut reverse its denial of the motion to enjoin only restitution claims.

I

.

A.

Earlier this y ear, the Supreme Court ex plained:

Cong re s s enacted CAF A in order to amend
t h e procedures that apply to consideration o f interstate class actions. I n doing so, Cong ress recog niz e d t h at class action lawsuits are an important a

nd v aluable part of t h e leg al
sy stem. I t was c oncerned, h o w ever, that certain r equirements of federa l diversity jurisdiction, 28 U.S.C. § 1332, had functioned
to k eep cases of national importance i n s t ate courts rather than federal courts.

Miss. ex rel. Hood v. A U Optronics Corp.
, 134 S. Ct. 7 3 6, 739 (2014) (citations omitte d ) (internal quotation marksS T A T E O F C A L I F O R N I A V

. I N T E L L I G E

N D E R 6

omitted )

. The Senate stated its c oncerns more bluntly : “[ M] ost class actions are currently adjudicated in state courts, where the g o verning rules are applied incon s istently (frequently in a manner that c o n t r avenes basic fairness a nd due process c o n s i d erations) and where there is often inadequate supervision over litig ation proc e d u res a nd proposed settlements.” S. Rep. No. 1 09-14, at 4 (2005), 2005 W L 627977, at *5. I n a n effort to curb th e s e p e rceived abuses, C ong ress loosened the requirements for diversity jurisdiction by adding 28 U .S.C. § 1332(d)(2), which “replac e d t h e o rdinary requirement of complete diversity o f citiz en s h i p among a ll plaintiffs and defendants, with a requirement of minimal d iversity .” A U Optronics
, 134 S. Ct.
at 7 40 (cita t i on omitted). Under CAF A, therefore, a federal
court may ex ercise jurisdiction so long as “any member of a class of p laintiffs is a cit i z e n of a State different f r om any defendant” and the amount in controversy ex ceeds $5 million. 28 U.S.C. § 1332(d)(2).

C o m p lementing the ex pansion of federal jurisdiction to

ensure uniformity a n d f a irness is CAF A’s class action settlement notice requirement, 28 U .S.C. § 1715, which was intended to “provide a check ag ainst inequitable settlements.” S. Rep. No. 109-14, a t 35 (2005), 2005 W L 627977, at *34;

see In re Uponor, Inc., F1807 Plumbing Fittings Prods. Liab. Litig.
, 716 F

. 3d 1057, 1064–65 (8th Cir. 2013). Section 1715 require s n o t i ce of a p roposed settlement to be served on the “appropriate” federal and state o fficials—ty pically the Attorney General o f the United States and “the person in the State who h as t h e primary reg ulatory or supervisoryS T A T E O F C A L I F O R N I A V

. I N T E L L I G E

N D E R 7

responsibility with r e s p e ct to the d efendant.” 28 U .S.C. § 1715(a). I n addition, § 1715 prohibits a court from ordering final approval of a proposed settlement until 90 day s after the
ap p ropriate g overnment officials were notified. Id. § 1 7 1 5 ( d )

. The statute is equally clear that it shall not “be construed to ex pand the authority of, or impose any oblig ations, duties, or responsibilities upon, F ederal or State officials.” Id. § 1715(f). These requirements are intended to g ive states a role in e n suring that citiz ens are e quitably compensated in class a ction sett l em e n t s, but states are free
not to participate, leaving that task to the co u r t s , w h ich ultimately r etain discretion to approve or disapprove any settlement, reg ardless of a state’s intervention.

Aside from securing c o mpensation for citiz ens, state

en fo r c ement actions serve other interests such as protecting citiz ens f rom f uture harm, and these interests m i gh t n ot be served by intervention in ong oing set t l e m ent proceeding s. Thus, althoug h the role o f potential o bjec t o r to a proposed settlement under CAF A serves important interests, a sovereig n’s ability to bring enforcement acti ons ag ainst private parties that violate the law serves equally if not more important public interests. No t hing in CAF A’s notification requirements could b e read to interfere wit h the p ower o f
states or the federal g overnment to bring e nforcement a ctions.S T A T E O F C A L I F O R N I A V

. I N T E L L I G E

N D E R 8

B

.

California’s B usiness and Professions Code prohibits false advertising under § 17500 1 and creates causes of action for unfair competition under §§ 17203-04. 2

California’s u nfair c o m petition law (UCL ) (§ 1 7200 et seq.) d efines “ unfair c ompetition”

1 Sectio n 1 7 5 0 0 p ro v i d es: “I t i s u n law f u l f o r an y p erso n , f

irm

, co rp o ratio n o r asso ciatio n , o r an y em p lo y ee th ereo f w ith in ten t d irectly or in d ir e c t l y t o d i sp o se o f real o r p erso n al p ro p erty o r to p erf o rm serv ices,
p ro f essio n al o r o th erw ise, o r an y th in g o f an y n atu re w

h atso ev er o r to in d u ce th e p u

b lic to en ter in to an y o b lig atio n relatin g th ereto , to m ak e or d issem i n ate o r cau se to b e m ad e o r d issem in ated b ef o re th e p u blic in th is state, or to m ak e o r d issem i n ate o r cau se to b e m ad e o r d issem in ated f ro m th is state b e fo r e t h e p u

b lic in an y state, in an y n ew sp ap er o r o th er p u b lic a t io n , o r an y ad v ertisin g d ev ice, o r b y p u blic o u t cry or p ro clam atio n , o r in

an y o th er m an n er o r m ean s w h atev er, in clu d in g o v er t h e In tern et, an y statem en t, co n cern in g t h at real o r perso n al p ro p erty or th o se serv ices, pro f

essio n al o r o th erw ise, o r co n cern in g an y circu m stan ce

o r m atter o f f

act co n n ected w i th th e p ro p o sed p erf o rm an ce o r d isp o sitio n th ereo f , w h ich is u n tru e o r m islead in g , an d w h ich is k n o w n , o r w h ich b y th e ex ercise o f reaso n ab le ca r e s ho u l d b e k n o w n , t o be u n tru e or

m i slead in g , o r f

o r an y p erso n , f

irm

, o r co rp o ratio n to so m ak e or d issem i n ate or cau se to b e so m ad e o r d issem in ated an y su ch statem en t as p art o f a p lan o r sch em e w ith

th e in ten t n o t to sell th at p erso n al p ro p erty

o r th o se serv ices, p r o fessio n al o r o th erw ise, so ad v ertised at t h e p rice stated th erein

, o r as so ad v ertised

. A n y v io l atio n o f th e p ro v i sio n s o f th is sectio n is a m isd em ean o r p u n ish ab le b y i m p ri s o n m en t in th e co u n ty j ail

n o t ex ceed in g six m o n th s , o r b y a f in e n o t ex ceed in g tw o th o u san d f iv e h u n d red d o llars ($ 2 ,5 0 0), o r b y b o th th at im p riso n m en t an d f

in e.”

2 Sectio n 1 7 2 0 0 d ef

in es u n f air co m p etitio n as “ an y u n law f

u l, u n f air or f rau d u l en t b u sin ess act o r practice a n d u n f air, decep tiv e, u n tru e or

m islead i n g ad v ertisin g an d an y act p ro h ib ited b y Ch ap ter 1 (co m m en cin g

w ith Secti o n 1 7 50 0 ) o f P art 3 o f D iv isio n 7 o f th e B u sin ess an d P ro f essio n s Co d e.”S T A T E O F C A L I F O R N I A V

. I N T E L L I G E

N D E R 9

to mean a nd include “any unlawful, unfair o r fraudulent business act or practice and unfair, deceptive, untrue or mislea d ing advertising and any act prohibited by [ the false

a d v er t i s i n g law(§ 17500 et seq.) ]

. ” (§ 1 7200.) The UCL ’s purpos e i s to protect both consumers a

n d c o m p e titors by promoting fair competi t i on in commercial markets for
g oods and services.

Kasky v. Nike, Inc.
, 45 P.3d 243, 249 (Cal. 2 002); see Anunziato v. eMach i n e s , I nc. , 402 F

. Supp. 2d 1133, 1137 (C.D. Cal. 2 005) (“The g oal of both the UCL a nd the [ false advertising law (F AL )] is the protection of consumers.”); see also H auk v. JP Mor

g a n C hase Bank

, 552 F .3d 1114, 1122 (9th Cir. 2009) (noting that the “broad scope” of California’s UCL “allows for violations of other l a w s t o be treated a s unfair c ompetition that is independently actionable” (internal quotation marks omitted)).

U n d e r the enforcement provisions of the UCL
, publ i c prosecutors as well as any “person who h as suffered injury in fact and has lost money or property as a result of the unfair competition” may b ring an action. Cal. B us

. & P rof. Code § 17204. Section 17535 allows th o s e same parties to bring

s u i t f o r violations of the F A L

. 3 B ut not all suits are crea t e d equal. A public prosecutor bring ing an a ction under the UCL
may seek civil penalties, perm anent injunctive r elief, a nd

r e s itution, whereas suits b r oug ht b y private individuals a r e

3 “ B u sin ess an d P ro f

essio n s Co d e sectio n 1 75 3 5
, w h ich pertain s to certain f o rm s of m i slead i n g ad v ertisin g , p ro v id es essen tially th e sam e

rem ed ies as th e UCL u n d er B u sin ess an d P ro f essio n s Co d e sectio n 1 7 2 0 3 .” S ta te v. Altu s Fin ., S .A. , 3 6 Cal. 4 th 1 2 8 4 , 1 3 0 6 n .9 (2 0 0 5 ).S T A T E O F C A L I F O R N I A V

. I N T E L L I G E

N D E R 10

l i m ited to injunctive relief and restitution. Id. § 1720 3 (allowing courts to make such orders as “ may be n ecessary to restore to any person in interest any money o r p r o p e rty

. . . wh i c h m ay have been a cquired by means of such unfair

com petition”); 4 id. § 17204 (allowing private individuals o r public prosecutors to seek injunctive r elief); id. § 17206 (allowing only public prosecutors to seek civil penalties); see Kasky

, 45 P.3d a t 2 49 (“I n a s u i t under the UCL
, a public prosecutor may collect civil penalties, b ut a private plaintiff’s remedies are g enerally limited to injunctive relief and restitu t i o n.” (internal quotation marks omitted)). I ndeed, “[ t] he v o ters restricted p rivate enforcement o f t h e U CL in 2004, by approving Proposition 64

. . . . According ly

, to bring

a UCL action

, a private plaintiff must be able to show economic injury caused by unfair competition.” Y anting Zhang v. Superior Court
, 3 0 4 P

. 3d 1 63, 168 ( Cal. 2013). Despite the importance of private e n fo r cement of the UCL and F AL
, such private suits do not a nd cannot substi t u te for public e nforcement actions, which serve as a far g reater deterrent and thus a g reater protection. S ee People v. Pac. Land Research Co. , 569 P.2d 125, 129 (1977) (“[ A] n action by the People lacks the fundamental attributes of a consumer class action filed by a private p a r ty

. The Attorney General o r other g overnmental official who files the action is ordinarily
not a member of the class, his role as a protector of the public
may be inconsistent with the welfare of the class . . . .”).

4 Sectio n 1 7 2 0 3 p erm its ei t he r a p u b lic pro secu to r o r an in d iv id u al to seek restitu tio n , so lo n g as th e restitu tio n so u g h t g o es to t h e i n d i v id u al

w h o lo st m o n ey or p ro p erty as a resu lt o f th e u n f air co m p etitio n

. See, e.g

. , Ru b i o v

. Ru s h C

a rd

, No

. No

. 1 :1 3

– cv

– 1 4 7 0 A W I– GSA
, 2 0 1 4 W L 2 7 1 8 8 0 4 (E.D. Cal., J u

n e 1 6 , 2 0 1 4 ).S T A T E O F C A L I F O R N I A V

. I N T E L L I G E

N D E R 11

C.

I ntelliGender, L L C owns and manufacture s the I ntelliGender Prediction Test. I t ad v e r tises on its website: “I ntelliGender’s Gender Prediction Test is an a ffordable, simple-to-use urine test that pr o vides immediate g ender results in the p rivacy and comfort of the home. I n minutes, the I ntelliGender Gender Prediction Test i ndicates y our g ender result based upon an easy to r ead color match. Green indicates b oy and orang e indicates g irl!” I N T E L L I G E

N D E R , http://www.intellig ender.com (last visited Aug

. 13, 2014). On J u n e 7
, 2010, J u lie Gram filed a nationwide class action
ag ainst I ntelliGender in federal d i s trict c ourt, invoking CAF A’s jurisdiction unde r 2 8 U.S.C. § 1332(D)(2)(A). On April 23, 2012, the d istrict c o u rt issued an order g ranting final approval in Gram v. IntelliGender to a c lass action settlement between I ntelliGender and a certified class composed of “ all individual s who personally purchased a Test b etween November 1, 2006 a

nd J anuary 31, 2011, in the United States and personally used th e Te st.” The court f o und that I ntelliGender provided notice of the proposed settlement to th e appropriate state and federal officials pursuant to 28 U.S.C. § 1715, that the ninety day period for comment o r objection had elapsed, and that no o bjectio n s o r c omments

w e r e received. The Gram complaint alleg ed numerou s

causes of action, including v iol at i o n s of California’s UCL and F AL
, as well as the California Consumers L eg al Remedies Act. Throug h the settlement ag r eement, I ntelliGender a g reed to pay $ 1 0

. 0 0 f or e ach approved claim submitted by a class member and to make a cy pres donation of $40,000 worth of product. I n addition, it ag reed to chang e its webs i te’s advertising as well as the Test’s product insertS T A T E O F C A L I F O R N I A V

. I N T E L L I G E

N D E R 12

and box

. 5 To receive the $10.00 restitution pay ment, a class member must submit a valid claim form, which requires her
to swear under penalty of perjury that the Test result w a s inaccurate as to her child’s g ender.

D.

O n November 9, 2012, the People of the State o f California, by and throug h the San Dieg o City Attorney
, filed

an action in California state court ag ainst I ntelliGender, L L C and its owners for v iolations of California’s U C L a n d F AL

. The State soug ht to “enjoin [ I ntelliGender] from eng ag ing in unfair competition and untrue or mi s l eading advertising

. . . [ and soug ht] to o btain civil penalties, restitution, and other remedies for the Defendants’ violations of law.”

I ntelliGender r emoved the action t o the F ederal District Court f o r the Southern D istrict of California. The d i strict
court subsequently g ranted I n telliGender’s motion to chang e

venue to the Central District of California pur s uant to 28 U.S.C. § 1404(a) over the objection of the State. The case

was assig ned to J udg e A udrey Collins, who had p r esided over the related Gram v. IntelliGender CAF A class action.

O n A u gust 26, 2013, I ntelliGender moved in the Gra m action for a permanen t o r p reliminary injunction to e nforce the c ourt’s final o r der and judg ment b y enjoining the State

5 Ch an g es to th e p ro d u ct w eb site i nc l ud e d clarif y in g th at th e “ No b el P rize w in n in g ch em ist [w h o] w as ad d ed to th e research team ,” w as actu ally “ a g rad u ate stu d en t ” w h o w as m erely “ part o f a 1 9 9 6 No b el Prize

w i n n i n g r e s e a r c h t e a m i n c h e m i s t r y

. ” I N T E L L I G E N D E R , h ttp ://w w w .in tellig en d er.co m

/ab o u t- in tellig en d er.h tm l (last v isited Au g

. 2 1
, 2 0 1 4 ). T h e co m

p an y also ag reed to ad d a d isclaim er “ th at th e T est is

n o t (an d is n ot req u ired to b e) FDA ap p ro v ed .”S T A T E O F C A L I F O R N I A V

. I N T E L L I G E

N D E R 13

from prosecuting the enforcement action. I t arg ued that an i n j u nction was “necessary in aid of preserving the Court ’s jurisdiction pursuant to the All W rits Act, 28 U.S.C. § 1651,” because allowing the Stat e ’ s s u it to g o forward would undermine the ability

of the district court to enforce its final order and judg ment in the Gram class action. On September 19, 2013, the district court remanded the State’s enforcement action t o t h e Superior Court for the County of San Dieg o reasoning

, in part, that it w as broug ht in the State’s sovereig n capacity to protect its citiz enr y f r om unscrupulous business practices. T he following day

, the district court denied I ntelliGender’s request for injunctive relief ag ainst the State’s enforcement action.

I ntelliGender n ex t moved in t h e G ram action for an injunction ag ainst the Stat e’s restitution claims only

. I ntelliGender arg u ed that insofar as t h e State soug ht restitution on behalf of members of the settlement class, such relief should be enjoined because allowing the c laims to g o forward w ould amount to a double recovery and run afoul o f the doctrine o f res judicata. I n short, a llowing the restitution claims to proceed would undermine the finality o f the class action settlement. On October 1 6
, 2 0 13, the district court also denied this motion.

I I

.

“W h e t h e r an injunction may issue u n der the AntiI njunctio n Act is a question of law reviewed de novo.” California v. Randtron

, 284 F .3d 969, 9 74 (9th Cir. 2002). I f an injunction falls within the purview of the Anti-I njunction Act, then we review for abuse of discretion the district court’s decision whether to g rant the injunction. Id

.S T A T E O F C A L I F O R N I A V

. I N T E L L I G E

N D E R 14

The A nti-I njunction Act, 28 U.S.C. § 2283, limits the All W r its Act by prohibiting federal courts from enjoining state court actions ex cept in three n arrow c ircumstances. One o f these, the “relitig ation ex ception,” allows a court to issue an injunction where necessary “to protect or effectuate the federal court’s judg ments.” Randtron

, 2 8 4 F .3d at 974. That

ex c e ption “empowers a d istrict court to issue i n j u n c tions to enforce judg ments and to reinforce the effects of the doctrines of res judica t a a nd collateral estoppel.” Leon v. IDX S ys. Corp. , 464 F .3d 951, 961 (9th Cir. 2006) (internal quotation marks o mitted). “Res judicata applies w hen the earlier suit: (1) reached a final ju d g ment on the merits; ( 2) involved the

same c ause of action or claim; and (3) involved identical parties or privies.” I

d. at 962. 6

There is no doubt that the first two elements are met with respect to both of I

ntelliGender’s motions. F irst, the district
court entered a final judg ment in th e G r a m class action. Second, the Gram class action included t h e same c auses o f action or claims now broug ht b y the State o f California. Specifically

, the S t a t e alleg es c auses of action f o r: (1) v iolation of California B usiness and P r ofessions Code § 17500 for untrue o r misleading statement s to the public about services based on the compan y ’s statements a bout its product, including that it has “[ p] roven over 90% accurate in laboratory tests,” and ( 2 ) violation of B usiness a nd Profess i o n s Code § 1 7200 f or unfair competition based on their violation o f § 1 7 500 and commission of theft by false

6 B ecau se th e case w a s b rief ed an d arg u ed b o th to u s an d th e d istrict

co u rt o n th e assu m

p tio n th at f ed eral res j u d icata law

co n tro ls, w e d ecid e t h e ap p eal o n th at b asis. We reserv e f o r f u tu re d ecisio n , h o w ev e r , t h e q u estio n w

h eth er state or f

ed eral law u ltim ately i s ap p licab le t o th e issu es in q u estio n

.S T A T E O F C A L I F O R N I A V

. I N T E L L I G E

N D E R 15

pretenses in violati o n of Penal Code §§ 484 and 532. The Gram class a ction also included c laims ag ainst I ntelliGender based upon California’s UCL and F A L

.

The third ele m e nt, whether sufficient privity ex ists between th e State and the class members to warrant the application of r es judicata, is the crux o f this case. See United States v

. Bhatia

, 545 F .3d 757, 759 (9th Cir. 2008) (noting th at the doctrine of res judicata “require[ s] privity b etween parties”). “Privity is a leg al c onclusion d esig n a ting a person

s o identified in interest with a party to former litig ation tha t he represents precisely the same rig ht in r espect to the subject
matter involved.” Id

. (internal quotation marks omitted). And, a s the Supreme Court recentl y c a u t ioned, “issuing an injunction under the relitig a tion ex ception is resorti n g to heavy artiller y

. For that r eason, e very benefit of the doubt
go es t oward the state court; an injunction can issue o nly i f preclusion is clear b e y ond p eradventu r e

. ” Smith v

. Bayer Corp.
, 131 S. Ct. 2 368, 2375–76 (2011) ( f o o t note omitted) (citation omitted).

A.

The district court correctly denied I ntelliGender’s motion to enjoin the State’s enforcement action in its entirety

. 7 The

7 In telliGen d er in itially arg u ed t h at th i s is n o t a State en f

o rcem en t actio n b eca us e it w as b ro u g h t b y th e City o f San Dieg o

. In telliGen der

m isap p reh en d s th at it w as th e City o f San Dieg o t h at f iled t h e actio n o n b eh a lf o f th e Peo p le o f th e S ta te o

f Ca lifo rn i a , a n d it is th eref o re a state

en f o rcem en t actio n rath er th an an actio n bro u g h t b y th e City f or i n d iv id u al relief

. N o n eth eless, In telliGen d er p u rsu es th is l in e o f arg u m en t in i ts rep ly b rief

, assertin g th at u n d er Calif orn ia Go v ern m en t Co d e § 7 2 1 9 3 th e City lack s au th o rity to b rin g a la w s u i t o n b eh alf o f th e p eo p l e o f th e State of Calif o rn ia b ecau se th e C ity ’ s reach is lim ited to th e l o cal lev el. T h e clearS T A T E O F C A L I F O R N I A V

. I N T E L L I G E

N D E R 16

court reasoned that I ntellig ender had not met its burden o f showing that the CAF A class action settlement could bind the State in its sovereign c apacity

, where it asserted both public and private interests. I n telliGender failed to carry that burden because it is an impossible one to bear.

I n Herman v. South Carolina National Bank

, 140 F .3d 1413 (11th Cir. 1998), the Eleventh Circuit held that the federal g overnment’s enforcement acti o n s eeking to vindicate both private and public concerns was not barred by the prior settlement of a p rivate class action on those s a m e claims. Rely ing on several Supreme Court cases, the Eleventh Circuit

e x plained that “[ t] hese ERI SA c ases are consistent with the well-established g e n eral principle that the g overnment is not bound by private litig ation w h en the g overnment’s action seeks to enforce a federal s t a t ute that implicates both public and p rivate interests.” Id. at 1425; see Hathorn v. Lovorn
, 457 U.S. 255, 268 n.23 (1982) (holding t h a t gi ving a state court authority to adjudicate Voting Ri gh t s Act § 5 issues arising in disputes between p r ivate parties does not “frustrate the Att o r n ey General’s enforcement of the Act” because “[ t] he A ttorney General is not bound by the resolution of § 5 issues in cases to which he w as n ot a party ,” and, more broadly

, “[ c] ommon n o tions of collateral es t o p pel sug g e st that the state proceeding s similarly would n o t b i nd other interested persons who did n ot p a r t i ci p ate in them”). The E l e v enth Circuit r easoned that Cong r ess g ranted the Secreta r y of L abor a

n independent r ig ht to sue and seek r edress for

statu to ry tex t o f Calif

o rn ia B u sin ess an d P ro f

essio n s Co d e § 17 5 3 5
, w

h ich
p ro v id es, “ [a]ctio n s f

o r in j u n ctio n u n d er th i s sectio n m ay b e p ro secu ted b y th e A t to rn ey G en eral o r an y

. . . city a tto rn ey

. . . in th is state in th e

n am e o f th e p eo p le o f

th e State of

Calif o rn i a,” p reclu d es In telliGen d er’ s

n o v el arg u m en t.S T A T E O F C A L I F O R N I A V

. I N T E L L I G E

N D E R 17

ERI SA v i o lations because such plans affect the n ational public interest. Her m a n , 140 F

. 3d a t 1423. As such, the Secretary ’ s action was not barr ed b y the actions of private pl aintiffs who soug ht to r edress individual g rievances, even when the Secretary ’s action also soug h t to recoup plan losses. Id. ; see W

ilmington Shipping Co. v

. N e w Eng. Life I

ns. , 496 F .3d 326, 340 (4th Cir. 2007) (ag reeing with “a number of our si s t e r c i r cuits [that] have held that, in lig ht of the overarching national interest in ensuring the financial s t a b i l i t y of pension p lans and the inability of private plaintiffs to adequately represent this interest, the Secretary o f L abor is
not bound b y the results reached by private litig ants in ERI SA suits”). W e a gree that a CAF A class action settlement, thoug h approved by the district court, does n o t ac t as res judicata ag ainst the State in its sovereig n capacity

, even thoug h many of the same claims are included in both a ctions. B ecause the State action is broug ht on behalf of the peop le, it implicates the public’s interest as well as private interests,

a n d therefore the remedial provisions sweep much more broadly

.

F or ex ample, California B usi n e s s and Professions Code § 17206(a) specifically provides that individuals who eng ag e in u nfair competition “shall b e liable for a civil penalty not to

ex c e ed two thousand five h undred d o llars ($2,500) for e ach violation

. . . .” I n this action, the State r equested penalties o f $2,500 for “each and e very untrue o r misleadin g s t a tement made o r caused to b e made b y [ I ntelliGender] to e ach potential o r actual consumer, as proven at trial, in an amount not less than five million d ollars” pursuant to § 17536 as w ell

as civil penalties in the amount of $2,500 for every violation of § 17200 pursuant to § 1 7206. Section 17204 also a llows public prosecutors to seek injunctive relief, and § 1 7 2 03 permits p ublic prosecutors to seek restituti o n for allS T A T E O F C A L I F O R N I A V

. I N T E L L I G E

N D E R 18

individuals who purc hased the p roduct, not only those w ho used it and received an incorrect result.

The cases relied upon b y I ntelliGender for its contrary arg uments actually under c u t its position. I n Leon v. IDX Systems Corp.
, for ex ampl e , w e found privity and enjoined the Department of L abor’s ( “DOL ”) a ction ag ainst a company because “[ w] hen the Secretary of L abor is suing for employ e e-specific rig h ts of precisely t h e sort p laintiff has already p ursued then the requisite closeness of the inte rests for privity is present.” Leon
, 464 F .3d at 962 (alterations omitted) (citation omitte d ) ( i n t e r n a l q u o t a t i o n m a r k s omitted). L eon had sue d h is employ er after b eing placed on unpaid leave, a lleg ing violations o f the anti-retaliation provision o f the F alse Claims A ct, T i t l e VI I
, the Americans with Disabilities Act, and state laws. I d. at 95 5

. He also filed a complaint w ith the DOL

. Id. A ft e r t h e d istrict court dismissed all of L eon’s claims with prejudice because he h ad “despoiled evidence,” his employ er moved the district court to enjoin, on res judicata g rounds, the DOL ’s action as well. Id. The district court denied the m o t i o n to enjoin, and we reversed, reasoning that the district c ourt had erred in not finding privity between L eon and the DOL

. Id

. at 961–62. B ecause the D O L ’s action a rose under the whistleblowerp r o t e c tion provision o f the Sarbanes-Ox ley Act, the o nly remedies available we r e “ i n d i v i d u a l c o m p e n s a t o ry remedies.” Id. at 962. On that basis, we concluded that “ the private
nature of t h e r emedy soug ht b y the DOL demonstrates that the ag ency is in privity with L eon.” Id. at 963. Similarly

, in Chao v. A–One Medical Services, Inc.
, 346 F. 3 d 908, 923 (9th C i r

. 2 0 0 3), we affirmed the g rant of injunctive relief bec au s e the Secretary o f L abor w as not try ing to “vindicate broader g overnmental inte r e s t s by

, for e x ample, seeking anS T A T E O F C A L I F O R N I A V

. I N T E L L I G E

N D E R 19

injunction,” b ut was i nstead try ing to recoup plaintiff’s personal economic loss.

F inally

, I n t e l liGender’s arg ument that the State’s enforcement action should be enjoined because of its failure
to object to the propo s e d settlement after receiving CAF A ’s required notice is simply incorrect. The three district court

cases cited by I ntelliGender in support of its position stand for little more than the proposition that the failure to o bject

can be considered in assessing the fairness of a proposed class action settlement—precisely what the CAF A notification requirements were desig ned to accomplish. The notification requirement, by its own terms, d oes not “impose any oblig ations, duties, or responsibilities upon, F ederal or State officials.” 28 U.S.C. § 1715(f). I ntelliGender’s arg uments to the contrary ar e u n a v ailing

, contradict the plain tex t of the statute, and would undermine CAF A’s purpose.

B

.

W h ether the d istrict court erred in d e n y i n g I n telliGender’s motion to enjoin the State’s claims for restitution is an entirel y separate question. T h e same considerations o f CAF A’s purpose and the impor tance of state enforcement actions once a g a i n g o vern our analy sis, but this time lead to

a different result: the State’s action, insofar as it seeks restitution f

or individual members of the Gram s e t tlement class, may be e n

j o ined under its continuing jurisdiction to enforce and a d m i n i ster the Gram c lass action settlement. “[ I ] t g oes witho u t s ay ing that the courts can a nd should preclude double recovery by an individual.” EEOC v. W affle House, Inc.
, 534 U .S. 279, 297 (2002) (internal quo t a t ion marks omitted). To the ex tent that the State seeks restitutionS T A T E O F C A L I F O R N I A V

. I N T E L L I G E

N D E R 20

for individual members of the G ram certified class, it may be enjoined from doing so.

W h en a g overnment entity sues for the same relief t h at “plaintiff [has] already pursu e d then the requisite closeness of interests f

or p rivity is present.” Leon
, 464 F .3 d a t 9 62 (emphasis a dded) (citation omitted) (internal quotation marks omitted); see also Chao

, 346 F .3d at 923 (enjoining an action by the Secretary of L abor because it soug ht simply to r ecoup plaintiff’s personal economic l o ss r ather than “vindicate broader g overnmental interests by

, for ex ample, s e eking an inju nction”). Sufficient privity ex ists b etween Gram class members and the State with respect to claims for restitution. The district court’s sug g estion that privity did not ex ist 8 relied
upon two mistaken premises: that t h e individuals on whose behalf restitution was soug h t a re different from the c ertified class and that the amounts soug ht are different. The f ormer is factually incorrect, and the latter has no bearin g o n the question of privity

.

I n its order deny ing the motion t o enjoin claims for restitution only

, the court relied upon the fact that “the class certified in this case is l i mited only to those who purchased Defendant’s product and rece i v e d a n inaccurate result

, whereas the People are s e e k i ng restitution on behalf o f all California purchasers of the product—reg ar d l ess of the

8 I t i s u n c l e a r w

h eth er th e district co u rt’ s erro n eo u s f in d in g s led it to

co n clu d e th at an in

j u n ctio n in th is case w o u ld b e b a r r e d u n d er th e A n t iIn j u n ctio n A ct, o r w

h eth er it th o u g h t it co uld issu e an in j u n ctio n b u t ch ose in its d iscretio n

n o t to d o so . Fo r ex am

p le, th e d istrict co u rt stated b o th

,
“ D ef en d an t h as n o t m et its b u rd en o f d em o n stratin g th at an in

j u n ctio n is

wa rra n t ed in th is case,” an d “ th e restitu tio n claim asserted in th e P eo p le’ s A ctio n is d i f

f eren t

. . . su ch th at t h e s e t t l em en t h ere sh o u ld n o t p reclu d e th e P eo p le’ s claim

f o r restitu t io n .”S T A T E O F C A L I F O R N I A V

. I N T E L L I G E

N D E R 21

results they received f

rom the product.” This is incorrect. I n its approval of the class settlement in Gram
, the district court “certifie[ d] thi s A c tion for settlement p urposes as a nationwide class action o n t h e behalf o f the following : all individuals who p ersonally purchased a Test b e t w een November 1
, 2006 and J a nuary 31, 2011, in the United States and personally used the Test.” W h ile only those individuals who obtained an incorrec t Test result are elig ible for compensation under the terms of the settlement, this does not neg ate the f

act that the certified class covered any one w ho purchased and use d the Test—substantially the same indi v i d uals for whom the State now seeks restitution. That compensation was limited to those who obtained an incorrect result is a r e fle ction of the barg a ining and c ompromise inherent in settling disputes. I ndividual G ram class members who b o ug ht a Test and used it b ut did not obtain an incorrect result r emain b ound by the settlement, even thoug h they will
not r eceive any c ompensation. I f the State w ished t o secure compensation for those class members, it had an opportunity
to do so by intervening after receiving notice of the proposed settlement pursuant to 18 U .S.C. § 1715(a). T h i s is the method CAF A established for states to seek eq u i table compensation for c lass members. The State c hose n ot to use its authority

, and t

h e s ettlement was approved. Compensation is res judicata.

The district court’s reliance upon the different amount o f restitution soug ht 9 in deny ing the motion i s a l so misplaced. I t is irrelevant for questions of privity a nd m e r e l y confirms

9 In telliGen d er settled f

o r $ 1 0.0 0 p er cl a i m a nt w h o su b m itted a claim f o rm s w earin g th at sh e receiv ed an in accu rate resu lt, w h ile th e S t ate

so u g h t restitu t io n

o f th e f u ll p u rch ase p rice, $ 3 0 .0 0 , f o r ev ery in d iv id u al

w h o p u rch ased th e test.S T A T E O F C A L I F O R N I A V

. I N T E L L I G E

N D E R 22

that the State is essentially seeking a double (or at least better) r ecovery

. I ndeed, even the d istrict court “ a g r e e [d] ” with the State’s co nclusion that some individuals w ho received restitution in this case would be inelig ible for

r e c overy in the Gram a ction. Moreover, as our decisi o n i n Leon c onfirms, the appropriate inquiry is not what relief was ultimately g ranted, b u t whether the g overnment is suing for the same r elief already pursued by the plaintiff. 464 F

. 3d at 962 (emphasis a d ded). Here, the class pursued restitution, and the go v e r nment n ow seeks the same. B ecause the requirements of res judicata have been met with r espect to the claims for restitution, an injunction may issue under the A n ti-I njunction Act. S ee Randtron

, 284 F .3d at 9 7 4 (“W hether a

n injunction may issue under the Anti-I njunction Act is a question of law reviewed de novo.”).

“However, the fact that an injunction may issue u nder the Act d oes not mean that it must issue.” Q u a c k enbush v

. Allstate Ins. Co.
, 121 F .3d 1 372, 1377 (9th Cir. 1997). “The decision whether to issue an injunction that do es not violate the Act is reviewed for an abuse of d i s c r etion.” Id. ; see Randtron

, 284 F .3d at 974. “A district c ourt a buses its discretion when it rests i t s c o n clusions on clearly erroneous factual find i n gs o r o n i n c o r r e ct l e ga l standards.” Q u a c k e n bush

, 121 F .3d at 1377. Althoug h the decision to g rant an injunction is discretionary

, discretionary decisions o f district courts must be “ex e r cised not arbitrarily or willfully

, but with r e ga rd to what is rig h t and equitable under the circumstances and the law, and directed by the re a s o n a nd conscience of the judg e to a just result.” Langnes v

. Green
, 282 U.S. 531, 541 (1931).

As d iscussed, supra , the district court r ested its conclusion that an injunction was not warranted on a clearlyS T A T E O F C A L I F O R N I A V

. I N T E L L I G E

N D E R 23

erroneo u s fa ctual finding

— that the classes were not the same—and a mistaken b e lief that the amount of restitution
soug h t affects the p ropriety of issuing an injunction. This alone is enoug h to conclude that the district court abused its discretion in failing to g rant the injunction. These errors a re compounded, a

nd our conviction that the district court abused its discretion stre n gt h ened, when we ex amine “what is rig ht and equitable under the circumstances and the law.” Id.

I t is ax iomatic that final, court-approved settlements preclude class members from seeking the same relief for the

same c laims a second time. “A f undamental p r e c e pt o f common-law adjudication, embodied in the related doctrines of collateral estoppel and res judicata, is that a rig ht, question

or fact d i s t inctly put in issue and directly determined by a court of compe t ent jurisdiction

. . . cannot be disputed in a subsequent suit between the same par t i e s or their privies

. . . .” Montana v. United States
, 440 U .S. 147, 15 3 (1 9 7 9 ) (internal quotation marks omitted). A bsent such a g uarantee, d e f e ndants would h ave little incentive to ag r ee to any settlement, and plaintiffs would b e left with no leverag e. A s the Court ex plained, “[ t] o preclu d e parties from contesting
matters that they have had a full and fair o p p o r t unity to litig ate protects their adversaries from the ex pense a n d

v e x a tion attending multiple lawsuits, conserves judicial
resources, and fosters reliance on judici a l a ction b y minimiz ing the possibility of inconsistent decisions. ” Id. at 153–54; se e T

a y lor v. Sturgell

, 553 U.S. 880, 892 (2008) (quoting the same ). Allowing the State’s claims for restitution to g o forward in state court would undermine this central g uarantee of our leg al sy stem and undercut C A F A ’s
pur p o s e of increasing the fairness a nd consistency of class action settlements.S T A T E O F C A L I F O R N I A V

. I N T E L L I G E

N D E R 24

The Court has recog niz ed that “ class actions raise special problems of relitig ation,” w hich Cong ress soug ht to address in part throug h passag e o f CAF A. Bayer
, 131 S. Ct. at 2381. Althoug h in B a

yer , the Court ex amined the issue o f relitig ation of class certification, 1 0 the principles it espoused

are applicable to other questions of relitig ation. The Court noted that Cong ress’s c hosen remedy

, C A F A, “does not involve departing f

rom the usual r

u les o f preclusion.” Id. at 2382. Rather, CAF A function s t o prohibit relitig a tion b y “enabl[ ing ] defendants to remove to f ederal court any siz able class action involving minimal diversity of citiz enship.” Id. Once re m oval takes place, the c o n solidation of multiple overlapping suits allows o ne leg al standard to g overn the

case. “Cong ress’ s d e cision to address the relitig ation

concern s a s s o c i a

t e d with c lass actions throug h the mechanism of removal provides y et another reason for federal courts to adhere in this contex t to long standing pr inciples o f preclusion.” Id.

A l l o w ing the State’s claims for restitution to advance would u n dermine those “long standing pr inciples o f preclusion,” which we and other courts have recog niz ed time and ag a i n u n d e r the basic r ule that when the g overnment

s e e k s individual relief o n behalf of an already defeat e d litig ant, re s j u d icata usually applies. See W right & Miller

, F ed. Prac. & Proc. J uris. § 4458.1 & nn. 26–29 (2d e d. 2 014) (collecting cases and noting “c l ass-action proceeding s may preclude t h e g overnment from pursuing independent

10 Ba yer also ad d ressed a case in w h i ch t h e o rig in al actio n h ad b een f iled
p rio r to CA FA ’ s en actm en t, lead in g th e Co u rt to co n clu d e: “ CA FA m ay b e co l d co m f

o rt t o B ay er w ith resp ect to su its lik e th is o n e b eg in n in g b ef o re its en actm en t.” 1 31 S. Ct. at 2 3 8 2.S T A T E O F C A L I F O R N I A V

. I N T E L L I G E

N D E R 25

proceeding s that see k o n l y to win advantag es for the same class”).

I n In re American Investors Life Insurance Co. A nn uity Marketing and Sales P ractices Litigation
, No. 05-MD-1712, 2013 W L 3 463503 ( E.D. Pa. J uly 10, 2013), the district court confronted a factual situation similar to the one presented here. That court g ranted the defendant companies’ r e q u e st for an injunction to prevent the State Attorney General from seeking restitution for individuals under Pennsy lvania’s Consumer Protection L aw. The individuals o n whose behalf the Attorney General soug ht res t i t u tion were members o f a

s e t t l e ment c lass that had already entered into an ag reement with the def

e n d a n t companies. The court, rely ing upon Supreme Court and Third Circuit EEOC c ases, c o ncluded that allowing the Attorney General to move forward with individual restitution claims would undermine the settlement
ag reement. 1 1 Id. at *8. The court also noted that the Attorney

11 Related ly

, in New Mexico v. Ca p i ta l On e Ba n k

, 9 8 0 F. Su p p

. 2d 1 3 4 6 (2 0 1 3), t h e d istrict co u rt “ b arred [th e New Mex ico A tto rn ey Gen eral] f ro m b rin g in g a claim

f o r co m p en satio n o n b eh alf o f

th e co n su

m ers w h o w ere class m em

b ers in th e [p rev i o u s ly settled class] actio n .” Id

. at 13 5 6. T h e p o stu re o f th at case w as d if

f eren t th an h ere b ecau se th e d ef en d an t s m ov ed
to d ism iss t

h e A tto rn ey Gen eral’ s claim s rath er th an en j o in th em p u rsu an t to th e A ll W rits A ct, b u t th e reaso n in g w i t h r e s p ect to p riv ity an d
p rev en tin g a “ d ou

b le reco v ery ” f

o r class m em

b ers b o u n d b y th e settlem en t is th e sam e. Id

. T h e co u

rt also ex p licitly n o ted

, “ th e T en th Circu it h as n o t
y et ru led o n th e issu e o f p riv i ty b etw een citizen s w h o h av e a l read y litig ated th eir claim s an d s t a t e ag en cies w h ich seek to v in d icate th e citizen s’ rig h ts in su

b seq u en t actio n s.” Id

. at 1 3 5 2 n

. 3

. A n o th er P en n sy lv an ia d istrict co u rt n o t ed sim ilar co n s id eratio n s i n its ap p ro v al of

a n atio n w id e class actio n settlem en t an d co n clu d ed

, “ th e A Gs m a y

co n tin u e to b rin g claim s b elo n g in g to th eir resp ectiv e states, su ch as state crim in al an d reg u la t o ry actio n s. Ho w ev er, th e A Gs are p reclu d ed f ro m b rin g in g claim s in

a d e f acto o r d e j u re rep resen tativ e cap acity o n b eh alfS T A T E O F C A L I F O R N I A V

. I N T E L L I G E

N D E R 26

G e n e ral could pursue other remedies, including injunction s and civil penalties. Id. These c o n siderations are equally present here. As in American Investors
, the “claims for restitution are in effect post-neg otiation ‘collateral attacks’ on the settlement,” which “would undeniably deter similar settlements in the future

. ” I d

. Moreover, allowing such claims to g o forward undermines CAF A by in effect sending the same claims CAF A envisioned as removab l e b a ck to be “adjudicated i n state courts, w here the g overning rules a re applied inconsistently .” S. Rep. No. 109-14, a t 4 (2 0 0 5), 2005 W L 627977, at *5.

Our decision does n ot d eprive th e S tate of the ability to protect its c itiz ens—quite the c ontrary

. As ex plained, supra , the State may seek civil penalties and broad injunctive relief
ag ainst I ntelliGender. I n addition, CAF A’s notification requirement, § 1715, safeg u ards t h e S t ate’s a

bility to participate, comment, or object duri n g t he Rule 23 class

a c t i on settlement a

pproval process, fulfilling CAF A ’s
purpose to “provide a check ag ainst inequitable settlements.” Uponor
, 7 1 6 F .3d a t 1064 (quoting the Senate Report on CAF A). Here, I ntelliGender prov i d e d notice to the appropriate parties, including the A t t orney General of the United States a

nd the CAF A coordinator for the Office of the At t o r ney General of California. Having chosen n ot to participate, the State is precluded from seek i n g the same relief soug ht in the CAF A class action. This is so not because § 1715 imposes any oblig ation on the State, but by operation of principles of res judicata. I ndeed, while § 1 7 1 5 does not

o f th e p lain tif

f s in th is class actio n , b ecau se d o i n g so w o u l d a l lo w Class

m em b ers t o d o u

b le reco v er.” Esslin g er v. HS BC Ba n k Neva d

a , N.A.
, CIV.A

. No

. 1 0

- 3 2 1 3, 2 0 1 2 W L 5 8 66 0 74
, * 7 n .2 (E.D. P a. No v

. 2 0
, 20 1 2) (in t ern al q u o tatio n

m ark s o m i tted ).S T A T E O F C A L I F O R N I A V

. I N T E L L I G E

N D E R 27

i m p ose a ny oblig ations, responsibilities, or duties on th e State, § 1715(f) a lso makes clear that it does not “ex pand the authori t y of” the State, for ex ample, by ex cepting the State from long standing principles of res judicata.

I I I

.

F or the foreg oing reasons, w e a f firm the district court’s order deny ing the injunction o f t he State’s action writ larg e , but w e reverse the distric t co u rt’s order deny ing the injunction with respect to restitution and enjoin those claims. Each party

shall bear its own costs.

AF F IRMED in part; REVERSED in part.