1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 MUSEUM OF HANDCAR Case No. 24-cv-08598-EKL TECHNOLOGY LLC, 8 Plaintiff, ORDER GRANTING IN PART 9 MOTION TO VACATE v. PRELIMINARY INJUNCTION 10 TRANSPORTATION AGENCY FOR Re: Dkt. No. 84 11 MONTEREY COUNTY, Defendant. 12 13 The Museum of Handcar Technology LLC (the “Museum”) operates a successful handcar 14 tour business on the historic Monterey Branch Line railway. The Transportation Agency for 15 Monterey County (the “TAMC”) decided not to renew the Museum’s lease, then brought an 16 unlawful detainer action to evict the Museum. The TAMC asserted that it needed to evict the 17 Museum to begin construction on the SURF! Busway and Bus Rapid Transit Project (the 18 “Project”). The Museum sought a preliminary injunction. The Museum claimed that the TAMC 19 was retaliating against it for exercising its First Amendment rights to oppose the Project. 20 After receiving extensive evidence and argument, the Court found that the Museum 21 demonstrated a likelihood of success on its First Amendment retaliation claim. Order Granting 22 Prelim. Inj. in Part at 7-13, ECF No. 71 (the “PI Order”). The Museum submitted significant 23 evidence of retaliation, whereas the TAMC’s evidence confirmed that the Project was not ready to 24 begin construction. Id. at 12-13, 15. The Court found that the Museum established a likelihood of 25 irreparable harm, and that the balance of hardships and the public interest favored an injunction 26 because the Museum’s continued operations were not delaying the Project. Id. at 13-17. Thus, on 27 April 14, 2025, the Court enjoined the TAMC “from seeking, requesting, or applying for a writ of 1 The Court acknowledged that the balance of hardships may “shift if and when the Project 2 is ready to begin construction.” Id. at 19. In that event, the Museum’s continued operations might 3 prevent construction of the Project, thereby delaying “important public benefits to Monterey 4 County, including a low-cost public transit option for many who live and work there.” Id. at 17. 5 To account for this possibility, the Court instructed that: 6 [T]he TAMC may file a motion to vacate th[e] injunction if it can demonstrate that construction work for the Project will commence imminently, and that the Museum 7 must be evicted before construction can begin. If the TAMC files such a motion, the 8 Court will expect a detailed evidentiary showing that the Project is fully funded; that all required permits and approvals have been obtained; that all pre-construction 9 conditions have been met; and that construction cannot begin unless the Museum is 10 evicted. 11 Id. at 19. 12 On May 12, 2025, the TAMC filed a motion to vacate the preliminary injunction. Mot. to 13 Vacate, ECF No. 84. On June 23, 2025, after briefing concluded, the Court held an evidentiary 14 hearing and heard argument. At the hearing, the Court received testimony from Lisa Rheinheimer, 15 Deputy Chief Executive Officer of the Monterey-Salinas Transit District (“MST”), who serves as 16 MST’s “primary project manager” for the Project. 6/23/25 Hr’g Tr. 13:17-24, ECF No. 110 17 (“Hr’g Tr.”). In light of this testimony and other new evidence, the Court finds that the TAMC 18 and MST soon will be ready to move forward with important work on the Project. This upcoming 19 work will require the Museum to vacate the leased premises. 20 Accordingly, for the reasons set forth below, the Court GRANTS in part the TAMC’s 21 motion to vacate the preliminary injunction. 22 I. EVIDENTIARY OBJECTIONS 23 The TAMC and the Museum each object to certain evidence offered by the other party. 24 Because the motion to vacate relates to a preliminary injunction order, the Court applies the 25 evidentiary standards that govern at the preliminary injunction stage. “[G]iven the haste that is 26 often necessary” at this stage, the Court may rely on “procedures that are less formal and evidence 27 that is less complete than in a trial on the merits.” Flathead-Lolo-Bitterroot Citizen Task Force v. 1 390, 395 (1981)). “[T]he Federal Rules of Evidence do not strictly apply” here. Id. at 1189. 2 Instead, evidentiary issues typically “go to weight rather than admissibility.” WeRide Corp. 3 v. Kun Huang,

(N.D. Cal. 2019) (quoting Go Daddy Operating Co. 4 v. Ghaznavi, No. 17-cv-06545-PJH,

, at *14 (N.D. Cal. Feb. 28, 2018)). The 5 Court may consider hearsay. Johnson v. Couturier,

(9th Cir. 2009) (citing 6 Republic of the Philippines v. Marcos,

(9th Cir. 1988) (en banc)). 7 A. The TAMC’s Objections 8 The TAMC submitted 30 pages of evidentiary objections as a separate document from its 9 reply brief. See ECF No. 101. This violates Civil Local Rule 7-3(c), which requires that “[a]ny 10 evidentiary and procedural objections to the opposition must be contained within the reply brief or 11 memorandum.” Through this maneuver, the TAMC essentially tripled the length of its reply brief. 12 See Civil L.R. 7-3(c) (“[T]he reply brief or memorandum may not exceed 15 pages of text.”). The 13 TAMC offers no good reason for violating Local Rule 7-3(c). The TAMC should have withdrawn 14 its improper objections when asked to do so by the Museum, but instead, it downplayed the 15 violation as a “formatting mistake.” Gentry Decl. Ex. B, ECF No. 106-1. 16 The Court GRANTS the Museum’s motion to strike the TAMC’s improper objections. 17 See Mot. to Strike, ECF No. 106. The Museum properly included its own evidentiary objections 18 within its opposition brief, so it would be unfair for the Court to consider the TAMC’s extensive 19 improper objections. However, the Court has independently assessed evidentiary issues to the 20 extent they are relevant to the Court’s ruling on the motion to vacate. See Hennighan v. Insphere 21 Ins. Sols., Inc.,

(N.D. Cal. 2014). 22 B. The Museum’s Objections 23 The Museum objects to two aspects of the Muck Declaration dated May 12, 2025. First, 24 the Museum objects that Mr. Muck lacks personal knowledge regarding certain details of the 25 Project’s funding. See Opp. at 9-10, ECF No. 98. This objection is overruled because Mr. Muck 26 has personal knowledge of these details. See Muck Reply Decl. ¶ 6, ECF No. 103. Second, the 27 Museum objects to the relevance of Mr. Muck’s statement that the Project is not “dead” and that 1 portion of the Muck Declaration in ruling on the motion to vacate. 2 The Museum also objects to two aspects of the Rheinheimer Declaration dated May 12, 3 2025. First, the Museum claims that Ms. Rheinheimer lacks personal knowledge that the Museum 4 is “out of compliance” with California Coastal Commission requirements. See Rheinheimer Decl. 5 ¶ 38, ECF No. 86. This objection is moot because the issue is immaterial to the Court’s ruling on 6 the motion to vacate. Second, the Museum objects that Ms. Rheinheimer lacks knowledge and 7 foundation for her claim that soil and seed collection may require “track removal.” See 8 Rheinheimer Decl. ¶ 22. This objection is also moot because the TAMC no longer relies on this 9 point, as Ms. Rheinheimer testified that seed and soil collection did not require track removal. 10 Hr’g Tr. 48:16-49:2 (testifying that MST’s “biologists have been able to go out and collect seeds . 11 . . while handcars are still operating”); see also 68:1-5 (TAMC’s counsel confirming the same). 12 Finally, the Museum objects to certain statements and exhibits as improper reply evidence. 13 See Pl.’s Objs., ECF No. 105. The objections are overruled with respect to paragraphs 8 and 9 of 14 the Rheinheimer Reply Declaration, and Exhibits E, F, and I to that declaration. This evidence is 15 proper rebuttal to points made by the Museum in its Opposition. In all other respects, the 16 Museum’s objections are sustained. 17 II. LEGAL STANDARD1 18 The purpose of a motion to vacate, dissolve, or modify a preliminary injunction is “to 19 relieve inequities that arise after the original order.” Credit Suisse First Boston Corp. v. 20 Grunwald,

(9th Cir. 2005) (quoting Favia v. Ind. Univ. of Pa.,

, 21 338 (3d Cir. 1993)). Such a motion “is based on new circumstances that have arisen after the 22 district court granted the injunction.” Id. “A district court has inherent authority to modify a 23 preliminary injunction in consideration of new facts.” A&M Recs., Inc. v. Napster, Inc.,

(9th Cir. 2002). 25 26 1 The TAMC styled its motion as both a motion for reconsideration and a motion to vacate or 27 dissolve the preliminary injunction. At the hearing, the TAMC acknowledged that this is more appropriately considered a motion to vacate. Hr’g Tr. 90:6-19. Accordingly, the Court does not 1 III. DISCUSSION 2 When the Court issued the preliminary injunction in April, it was “not clear when the 3 Project [would] be construction-ready, or whether and when the Museum must be evicted for 4 construction to proceed.” PI Order at 15. The TAMC had obtained a coastal development permit 5 from the California Coastal Commission (the “CCC”), but it was subject to several conditions that 6 had to be met before construction could begin. Id. at 15. Those conditions had not been met, id. 7 at 16, and there was no evidence that the TAMC could proceed with any part of the Project while 8 compliance efforts were still underway. The evidence before the Court indicated that work would 9 not begin in earnest until at least Summer 2025. See id. at 16-17. 10 Circumstances have changed. The TAMC has produced evidence that the Project is fully 11 funded, and construction is authorized to begin in the City of Marina. See, e.g., Rheinheimer 12 Decl. ¶¶ 11, 13, 24.2 The TAMC has also shown that the Project soon will be ready to proceed 13 with work that requires the Museum to cease operations and to vacate the leased premises. The 14 operative Project timeline (dated April 23, 2025) provides that railroad track removal must begin 15 by September 9, 2025. See Rheinheimer Decl. Ex. A, ECF No. 88-1. Ms. Rheinheimer testified 16 that track removal is a “critical path item” for the Project, meaning that “if the tracks aren’t 17 removed, [MST] can’t move forward with the [P]roject.”3 Hr’g Tr. 56:7-18, 58:4-23. Any delays 18 will cause a “cascading effect on everything else in the schedule.” Id. 54:18-55:6. And delaying 19 the track removal work would jeopardize or delay the public benefits of the Project. See 20 Rheinheimer Decl. ¶¶ 2, 11, 18, 27. Thus, the TAMC has shown that the balance of hardships and 21 the public interest favor vacating the preliminary injunction by September 2025. 22 23 2 The Museum argues that the Project’s funding is insufficient. Opp. at 10-12. Ms. Rheinheimer’s 24 testimony adequately resolves this concern. See Hr’g Tr. 42:10-21, 45:10-22, 46:4-14 (testifying that the current Project budget includes funding for a retaining wall), 44:14-45:9 (testifying that 25 removing contaminated material is “unlikely” to increase costs), 46:20-47:6 (testifying that the construction contract already covers the costs of removing ballast material). 26 3 The September start date for this work is roughly consistent with earlier Project timelines that were created before the Court issued the preliminary injunction. See PI Order at 17 (noting that 27 the November 2024 Project timeline contemplated that track removal would begin by August 28, 1 However, the TAMC has not shown that the balance of hardships requires the Museum to 2 cease operations immediately. The TAMC argues that certain pre-construction work has been 3 delayed, including tree removal and environmental mitigation work – specifically, seed and soil 4 collection. The TAMC also claims that it could begin construction in the City of Marina now, but 5 for the Museum’s operations. These arguments lack evidentiary support. 6 First, the tree removal work has been underway since April 2025. Hr’g Tr. 23:3-8. The 7 TAMC identified a single tree that it has been unable to remove because the tree is behind a 8 locked gate that the Museum controls. Id. 23:9-14. Another tree in the same area also needs to be 9 removed at some point, but TAMC has not attempted removal yet because it is “waiting for the 10 birds to fledge.” Id. 28:7-19. In any event, the MST has not asked the Museum whether it could 11 access the area to remove the trees. See id. 23:15-24:12. Although the TAMC claims that it will 12 incur an additional $15,000 in tree removal costs, this cost is not directly attributable to the one or 13 two trees at issue. Rather, $15,000 is the total cost of monitoring “all the trees” for birds. Id. 14 50:20-52:12. This monitoring is required for tree removal any time outside of the “September to 15 January 31[] timeframe,” id. 52:4-9, and thus the expense would be incurred regardless of the 16 Museum’s current operations. 17 Second, seed and soil collection has been underway since May 19, 2025. Id. 49:3-5. The 18 MST’s hired biologists have been able to collect seeds on Tuesdays and Wednesdays, when the 19 Museum is not operating. Id. 40:21-41:10. Although this schedule is “limiting,” Ms. Rheinheimer 20 could not say that the seed and soil collection process will be materially delayed. See id.; see also 21 id. 49:21-50:6. The TAMC’s counsel also confirmed that the biologists have been able to conduct 22 their work and comply with the injunction by collecting on “on Tuesdays and Wednesdays, when 23 the handcars are not operating.” Id. 65:1-7. And, as with tree removal, TAMC and MST have not 24 made efforts to cooperate with the Museum to conduct this work while it continues operating. 25 Id. 49:15-20. 26 Third, the TAMC claims that it is ready to begin construction on the Palm/Del Monte 27 station in the City of Marina, where the Museum operates its ticket booth, but this is an 1 Marina today but for the handcar and this particular situation with the injunction.” Id. 54:8-13; 2 see also id. 29:19-30:5. But she later conceded that construction cannot actually begin “today” 3 because the Project’s general contractor still needs to obtain and submit insurance, bonds, and 4 other requirements to MST. Id. 59:10-60:6. These requirements must be satisfied before “a 5 shovel gets into the ground and [before MST] starts construction in earnest.” Id. 32:15-33:4 6 (testifying that the contractor should meet these requirements “over the next month or two”).4 7 The Museum argues that the TAMC changed the Project timeline to “facilitate the 8 modification” of the preliminary injunction and “possibly . . . to further retaliate against the 9 [M]useum for its exercise of First Amendment rights.” Id. 85:19-86:2. On the current record, the 10 Court cannot conclude that retaliation was a substantial or motivating factor in the changes to the 11 Project timeline. The TAMC produced evidence supporting a plausible non-retaliatory 12 explanation for advancing work in the area where the Museum operates. Ms. Rheinheimer 13 testified that “the only places that were available [to begin work] were the areas within [C]ity of 14 Marina” where the Museum operates.5 Id. 29:19-30:5; see also id. 33:5-22 (confirming that the 15 City of Marina has provided permission to proceed with the Project within the City). “[I]n order 16 for MST to deliver the [P]roject on time and within budget, [MST] needed to be able to advance 17 work in areas where the conditions were cleared.” Id. 20:9-21:11. Moreover, the current timeline 18 to begin track removal on September 9, 2025, is generally consistent with timelines that predate 19 the preliminary injunction. See id. 78:19-25 (Museum’s counsel acknowledging that track 20 removal has been planned for “the fall of 2025 in virtually every iteration of the schedule”). The 21 consistent target date for track removal undermines an inference of retaliatory motive.6 22

23 4 The Museum argues that U.S. Fish and Wildlife Service (“FWS”) needs to issue a finalized set of mitigation measures to address material changes to the Project. See id. 34:23-35:21. FWS expects 24 to reissue a finalized set of mitigation measures “in early to mid July.” Id. 36:2-37:12, 39:9-17. This process is not expected to delay any work. Id. 37:13-38:12, 38:18-25, 60:7-18. 25 5 The MST recently received approval to proceed with construction in Sand City – after the Project 26 timeline was updated to prioritize work in the City of Marina. See id. 30:6-15, 31:17-19 (approval received on June 9, 2025). 27 6 At this preliminary stage, the record is incomplete. The Court is not prejudging whether 1 In sum, the TAMC has shown that the balance of hardships and public interest will soon 2 || favor vacating the preliminary injunction, even though currently the Museum’s operations are not 3 delaying the Project. In balancing the hardships, the Court finds that it is appropriate to provide 4 || the Museum time to wind down its operations and vacate the leased premises. The Museum 5 || requests 60 days’ notice, citing to its need to notify its customers and employees, to honor 6 commitments to its customers, and to remove its equipment, perimeter fencing, museum artifacts, 7 and improvements that it made to the railroad tracks. See Clark Decl. Ex. I, ECF No. 99-9. The 8 || Museum’s request is reasonable. The Court will delay vacating the injunction by approximately 9 60 days. 10 || IV. CONCLUSION 11 For the foregoing reasons, the Court ORDERS that the preliminary injunction issued on 12 April 14, 2025, shall automatically VACATE on August 29, 2025, at 11:59 p.m. PDT. The Court 5 13 expects that the Museum will cease operations and vacate the leased premises by the time the 14 || injunction expires so the TAMC is not required to obtain a writ of possession and evict the 3 15 Museum. 16 As indicated on the record at the evidentiary hearing, the Court expects the TAMC to 3 17 dutifully comply with court orders and the Civil Local Rules, and to litigate this case 18 cooperatively and with respect for judicial and party resources. See Hr’g Tr. 6:3-17, 7:6-8:19, 19 10:11-22, 94:17-25. The Court will not repeat the admonishments here, but notes that failure to 20 || comply with any court order, Federal Rule of Civil Procedure, or Civil Local Rule may result in 21 sanctions. See, e.g., Civil L.R. 1-4. 22 IT IS SO ORDERED. 23 Dated: June 30, 2025 24 Gi0oK— umi K. Lee 25 United States District Judge 26 27 28