United States District Court, D. Nevada
DIAMOND RESORTS CORPORATION, a Maryland corporation; DIAMOND RESORTS HOLDINGS, LLC, a Nevada limited liability company; and DIAMOND RESORTS INTERNATIONAL, INC., a Delaware corporation, Plaintiffs,
KYLE BROWN, an individual; MARTIN BROWN, an individual; EXCHANGE POINTS CLUB, LLC, a Florida and Missouri limited liability company; PREMIER REWARDS LLC, a Missouri limited liability company; VMG RESORTS LLC, a Missouri limited liability company; VACATION MANAGEMENT GROUP, LLC, a Missouri limited liability company; and OWNER EXTRAS LLC, a Missouri limited liability company, Defendants.
ORDER GRANTING IN PART AND DENYING IN PART
PLAINTIFFS' MOTION FOR A PRELIMINARY INJUNCTION [ECF NO.
P. GORDON UNITED STATES DISTRICT JUDGE
matter came before me on July 18, 2019 on the Motion for a
Preliminary Injunction (ECF No. 2) filed by plaintiffs
Diamond Resorts Corporation, Diamond Resorts Holdings, LLC,
and Diamond Resorts International, Inc. (collectively, the
TO OBTAIN PRELIMINARY INJUNCTIVE RELIEF
injunctive relief is warranted where the moving parties
shows: (1) a likelihood of success on the merits, (2) that
they are likely to suffer irreparable harm in the absence of
such relief, (3) that the balance of equities tips in their
favor, and (4) that granting an injunction would be in the
public interest. Winter v. Natural Res. Def. Council,
Inc., 555 U.S. 7, 20 (2008).
Diamond Entities are a collection of interrelated businesses
that market and sell timeshare interests, manage resorts and
multi-resort trusts, and operate points-based vacation clubs.
tandem with their hospitality and management services, the
Diamond Entities' core business is the marketing and sale
of timeshare interests.
purchasers of those timeshare interests (“Collection
Members”) acquire, through their purchase,
“Points, ” which act as currency that is
exchangeable for occupancy rights in accommodations at
resorts within the Collection Members' timeshare programs
and at other Diamond-affiliated resorts (collectively, the
Points that Collection Members purchase are personal to each
Collection Member. Under the terms governing the Diamond
Entities' timeshare programs, Collection Members are not
permitted to employ their Points for a commercial use,
including by renting them out for use by non-Collection
Collection Members typically reserve their Resort
accommodations online, applying their Points to the purchase
of reservations at the Resorts through their unique
username-and-password-protected Collection Members'
portal account (“Member Portal Account”), which
is hosted and managed by the Diamond Entities.
Diamond Resorts Holdings, LLC is the owner of multiple marks
(the “Diamond Marks”), which the Diamond Entities
use in coordination with each other to market, and
communicate with the public and their Collection Members
about, the Diamond Entities' various products and
Diamond Marks include the marks DIAMOND RESORTS
INTERNATIONAL®, DIAMOND RESORTS®, DIAMOND PLUS
POINTS®, and The Club®.
Diamond Entities filed their Motion for a Preliminary
Injunction in response to a scheme in which some or all of
the Defendants are selling unauthorized access to the Resorts
to their customers. That scheme involves three steps:
a. First, Defendants have gained control of Points that have
been sold to Collection Members. They have done this by
calling Collection Members and using the Diamond Marks and
other deceptive means to suggest affiliation with the Diamond
Entities. The Defendants' sales agents have induced
Collection Members to permit some or all of the Defendants to
rent use of their Points. As part of this transaction, the