4818-6549-3529.

8
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
CDMO, INC. AND CDET, INC.
Plaintiffs,
v.
COMFORT DENTAL GROUP, INC.,
Defendant.
CASE NO. 1:14-cv-00871-RPM-MJW
PLAINTIFFS MEMORANDUM OF LAW IN SUPPORT OF
PLAINTIFFS MOTION FOR PRELIMINARY INJUNCTION
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TABLE OF CONTENTS
I. Introduction........................................................................................................................ 1
II. FACTUAL BACKGROUND............................................................................................ 3
A. Master Franchisor Agreements.............................................................................. 4
B. Mandatory Laboratory Referral Program (MLRP) ............................................ 8
C. Gold Plan Program............................................................................................... 11
III. Argument ......................................................................................................................... 13
A. Relevant State Laws and Regulations.................................................................. 14
1. Corporate Practice of Dentistry and Control of Professional
Judgment .................................................................................................. 14
2. Insurance Laws Related to Discount Medical Plans and Prepaid
Dental Plans ............................................................................................. 17
B. Legal Standard for Issuance of a Preliminary Injunction. ................................... 19
C. The Court Should Grant Injunctive Relief Because Plaintiffs Have
Established All Four Factors Authorizing A Preliminary Injunction .................. 20
1. Plaintiffs Have a Substantial Likelihood of Success on the Merits
with Respect to the Specifically Identified Provisions of the
Contract.................................................................................................... 20
2. Plaintiffs Will Suffer Irreparable Harm to Plaintiffs if the MLRP
and Gold Plan Provisions Were Enforced. .............................................. 27
3. The Balance of Harms and the Public Interest Favors Issuing a
Preliminary Injunction. ............................................................................ 31
IV. CONCLUSION................................................................................................................ 32
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TABLE OF AUTHORITIES
FEDERAL CASES
Bd. of Regents of the Univ. Of Okla. v. Nat'l Collegiate Athletic Ass'n,
546 F. Supp. 1276 (W.D. Okl. 1982).................................................................................... 22
Big O Tires, Inc. v. Bigfoot 4X4, Inc.,
167 F. Supp. 2d 1216 (D. Colo. 2001).................................................................................. 20
Bray v. QFA Royalties LLC,
486 F. Supp. 2d 1237 (D. Colo. 2007).................................................................................. 32
Century 21 Real Estate Corp. v. Meraj Int'l Inv. Corp.,
315 F.3d 1271 (10th Cir. 2003) ............................................................................................ 14
Dominion Video Satellite, Inc. v. EchoStar Satellite Corp.,
269 F.3d 1149 (10th Cir. 2001) ............................................................................................ 34
Doubleclick, Inc. v. Paikin,
402 F. Supp. 2d 1251 (D. Colo. 2005).................................................................................. 21
Entek GRB, LLC v. Stull Ranches, LLC,
885 F. Supp. 2d 1082 (D. Colo. 2012).................................................................................. 21
Fairfield Cnty. Med. Ass'n v. United Healthcare of New England,
No. 3:13 CV 1621 SRU, 2013 WL 6334092 (D. Conn. Dec. 5, 2013) ................................ 34
Gas Co. v. FERC,
758 F.2d 669 (D.C. Cir. 1985) .............................................................................................. 21
Greater Yellowstone Coal. V. Flowers,
321 F.3d 1250 (10th Cir. 2003) ............................................................................................ 21
Heideman v. S. Salt Lake City,
348 F.3d 1182 (10th Cir. 2003) ............................................................................................ 21
Hobby Lobby Stores, Inc. v. Sebelius,
723 F.3d 1114 (10th Cir. 2013) ............................................................................................ 20
Housworth v. Glisson,
485 F. Supp. 29 (N.D. Ga. 1978) .......................................................................................... 34
In re OCA, Inc.,
552 F.3d 413 (5th Cir. 2008) ................................................................................................ 26
Mason v. Orthodontic Crs. of Colo., Inc.
516 F. Supp. 2d at 1205 (D. Colo. 2007)................................................ 23, 24, 25, 28, 29, 36
Moore v. Subaru of Am.,
891 F.2d 1445 (10th Cir. 1989) ............................................................................................ 14
Multi Channel TV Cable Co. v. Charlottesville Quality Cable Operating Co.,
22 F.3d 546 (4th Cir. 1994) .................................................................................................. 35
N.L.R.B. v. Express Pub. Co.,
312 U.S. 426 (1941).............................................................................................................. 37
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O'Toole v. Northrop Grumman Corp.,
305 F.3d 1222 (10th Cir. 2002) ............................................................................................ 14
Pac. Radiation Oncology, LLC v. Queen's Med. Ctr.,
861 F. Supp. 2d 1170(D. Haw. 2012) ................................................................................... 33
Penny v. Orthalliance, Inc.,
255 F. Supp. 2d 579 (N.D. Tex. 2003) ............................................................... 17, 18, 25, 26
RoDa Drilling Co. v. Siegal,
552 F.3d 1203 (10th Cir. 2009) ............................................................................................ 31
Roso Lino Beverage Distrib., Inc. v. Coca Cola Bottling Co. of N.Y., Inc.,
749 F.2d 124 (2d Cir. 1984).................................................................................................. 33
SMC Corp., Ltd. v. Lockjaw, LLC,
481 F. Supp. 2d 918 (N.D. Ill. 2007) .................................................................................... 35
Winter v. NRDC,
555 U.S. 7 (2008).................................................................................................................. 20
Wojciechowski v. Amoco Oil Co.,
483 F. Supp. 109 (E.D. Wis. 1980)....................................................................................... 33
Wright v. Martek Power, Inc.,
314 F. Supp. 2d 1065 (D. Colo. 2004).................................................................................. 14
STATE CASES
Am. Ass'n of Orthodontists v. Yellow Book USA, Inc.,
277 S.W.3d 686 (Mo. Ct. App. 2008)................................................................................... 27
Com. v. Goodman,
No. 2001 CA 000694 MR, 2001 CA 000775 MR, 2003 WL 1255695 (Ky. Ct.
App. Feb. 7, 2003) .................................................................................................... 16, 25, 27
Dawson v. Woodhams,
53 P. 238 (Co. App. 1898) .................................................................................................... 20
Denver & R. G. R. Co. v. Warring,
86 P. 305 (Colo. 1906).......................................................................................................... 15
Equitex, Inc. v. Ungar,
60 P.3d 746 (Colo. App. 2002) ............................................................................................. 26
F.D.I.C. v. Am. Cas. Co. of Reading, Pa.,
843 P.2d 1285 (Colo. 1992)............................................................................................ 21, 22
Hansen v. GAB Business Servs., Inc.,
876 P.2d 112 (Colo. App. 1994) ........................................................................................... 14
Kendall v. Beiling,
175 S.W.2d 489 (1943)................................................................................................... 15, 28
Metro. Life Ins. Co. v. Roma,
50 P.2d 1142 (Colo. 1935).................................................................................................... 21
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Newton v. Nationwide Mut. Fire Ins. Co.,
594 P.2d 1042 (Colo. 1979).................................................................................................. 22
R.P.T. of Aspen, Inc. v. Innovative Commc'ns, Inc.,
917 P.2d 340 (Colo. App. 1996) ..................................................................................... 21, 23
Russell v. Courier Printing & Pub. Co.,
95 P. 936 (Colo. 1908).......................................................................................................... 33
Trotter v. Nelson,
684 N.E.2d 1150(Ind. 1997) abrogated ................................................................................ 27
U.S. Fid. & Guar. Co. v. Indus. Comm'n.,
61 P.2d 1033 (Colo. 1936).................................................................................................... 14
STATE STATUTES
Ind. Code Ann. 27 13 34......................................................................................................... 28
Ind. Code Ann. 27 17 12, sec. 1,2........................................................................................... 28
Ind. Code Ann. 25 14............................................................................................. 15, 16, 25, 27
Ind. Code Ann. 27 17......................................................................................................... 18, 19
Ind. Code Ann. 27 17 12.......................................................................................................... 19
Ind. Code Ann. 27 17 14.......................................................................................................... 19
KY. Rev. Stat. Ann. 313.010(11)............................................................................................. 16
Ky. Rev. Stat. Ann. 313.070.................................................................................................... 25
Ky. Rev. Stat. Ann. 313.070(1) (West 2014)........................................................................... 15
Ky. Rev. Stat. Ann. 313.080 (West 2014) ............................................................................... 25
Mo. Ann. Stat. 354.702(1) ...................................................................................................... 28
Mo. Ann. Stat. 376.1502(1) .................................................................................................... 28
Mo. Ann. Stat. 332.071................................................................................................ 16, 25, 27
Mo. Ann. Stat. 332.071(11) (West 2014) ................................................................................ 15
Mo. Ann. Stat. 332.071(ii) ....................................................................................................... 24
Ok. Stat. 332.081 ..................................................................................................................... 25
Ok. Stat. 332.111 ..................................................................................................................... 25
Ok. Stat. 332.321 ..................................................................................................................... 15
Ok. Stat. 354.702(1)................................................................................................................. 18
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I. INTRODUCTION
Plaintiffs CDMO, Inc. (CDMO) and CDET, Inc. (CDET) (collectively, Plaintiffs)
submit this Memorandum of Law in support of their Motion for Preliminary Injunction
(Motion). Plaintiffs Motion seeks to preliminarily enjoin Defendant Comfort Dental Group,
Inc. (Comfort Dental) from improperly enforcing illegal components in the Subfranchisor
Agreements between the parties, including: 1) a Mandatory Laboratory Referral Program
(MLRP), which mandates that all laboratory referrals from Plaintiffs dentists in Missouri,
Kentucky and Indiana be sent to Comfort Dentals Colorado dental laboratory; and 2) a
mandatory Gold Plan marketing program (Gold Plan Program), in which Comfort Dental
demands that Plaintiffs and their dentists all sell and advertise discount medical plans even
though such plans are unregistered and potentially illegal. Because Comfort Dental continues to
demand that Plaintiffs engage in these potentially illegal practices, Plaintiffs seek to immediately
enjoin enforcement of these provisions, and enjoin Comfort Dental from terminating Plaintiffs
franchises or otherwise penalizing them for failing to comply with Comfort Dentals illegal
demands.
Comfort Dental should be enjoined from enforcing the MLRP because it impermissibly
interferes with, and exerts control over, dentists independent medical judgment and forces
Comfort Dental dentists to place the financial interests of Comfort Dentals owners over the best
interests of their dental patients. The MLRP threatens irreparable harm by threatening to
terminate Plaintiffs franchise, and by demanding that they engage in potentially illegal conduct
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which could expose them to penalties, professional licensure actions and damage to their patient
relationships and reputations.
Comfort Dentals enforcement of Gold Plan sales should be enjoined because, by
Comfort Dentals own admission, the Gold Plan has not been registered in any jurisdiction, and
because sales of unregistered and improperly implemented dental plans are potentially illegal.
Comfort Dental should be enjoined from forcing Plaintiffs to choose between engaging in illegal
activity and losing their franchises.
Plaintiffs will likely succeed on the merits because Comfort Dental has clearly demanded
that Plaintiffs either engage in potentially illegal conduct or risk losing their franchises. Because
Comfort Dentals continuous and recent demands are undisputed, and because the conduct
Comfort Dental demands clearly exposes Plaintiffs to legal risk, Plaintiffs are likely to succeed
on the merits.
Comfort Dentals illegal conduct exposes Plaintiffs to immediate and irreparable harm.
Comfort Dentals demands that Plaintiffs participate in the MLRP and sell the Gold Plan force
Plaintiffs to make an impossible choice: lose their 25-year franchise or violate the laws of
multiple jurisdictions.
Balanced against drastic harm to Plaintiffs lies only the improper economic benefit
Comfort Dentals affiliated labs
1
receive from mandatory referrals, and through improper sales
of the Gold Plan. Balancing these relative harms clearly favors entry of an injunction. Likewise,

1
Because revenues for laboratory services are paid to Budge Dental Lab, LLCa corporation separate from
Comfort Dentalit is unclear what, if any, benefits Comfort Dental receives from the MLRP.
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the public interest in avoiding illegality, especially acts that pose risks to dentists, patients, and
consumers, favors entry of an injunction.
Accordingly, because Plaintiffs are likely to succeed on the merits, and because the
irreparable harm imposed by enforcement of the MLRP and Gold Plan programs far outweighs
any harm Comfort Dental would suffer if an injunction were issued, Plaintiffs Motion should be
granted. Plaintiffs, therefore, respectfully request that this Court enter a preliminary injunction
as set forth in its Motion.
II. FACTUAL BACKGROUND
2
Plaintiff CDMO is a Missouri corporation with its principal place of business in Kansas
and CDET is a Wyoming corporation also with its principal place of business in Kansas.
[Declaration of Craig Bahr (Bahr Decl.), at 2, 3 attached hereto as Ex. 1]. Carl and Craig
Bahr (Bahrs) are brothers and licensed orthodontists. [Bahr Decl., 4]. Dr. Carl Bahr,
through his controlled entity, BBROS, LLC, is the principal shareholder of Plaintiff CDMO;
Drs. Carl and Craig Bahr are the principal shareholders of CDET. [Bahr Decl., 5, 6].
Defendant Comfort Dental is a Colorado corporation with its principal place of business in
Lakewood, Colorado. [Bahr Decl., 7].
The Bahrs began their relationship with Dr. Rick Kushner, founder of Comfort Dental, in
2000, while still in dental school. [Bahr Decl., 8]. In December 9, 2003, the Bahrs entered into
a Franchise Agreement with Comfort Smile, which they believed to be a sister corporation of

2
The full factual background regarding the relationship between Plaintiffs and Comfort Dental is outlined in the
Complaint (Dkt. # 1). In an effort to avoid unnecessary duplication, for purposes of this Motion for Preliminary
Injunction, which seeks only limited relief related to two provisions within the contract between the parties, only the
background relevant to those provisions is offered in this Memorandum.
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Comfort Dental, to operate three franchises in the Denver metropolitan area. [Bahr Decl., 9].
Subsequently, in 2008, CDMO entered into an initial franchisor agreement with Comfort Dental
to open Comfort Dental franchises in Missouri. [Bahr Decl., 10].
A. Master Franchisor Agreements
CDMO entered into the Master Franchise Agreement at issue here (the CDMO
Agreement) in February 2011. [Dkt. # 1, Ex. A]. CDET began its relationship with Comfort
Dental when it entered into its Master Franchise Agreement (the CDET Agreement) in July
2011. [Dkt. # 1, Ex. B]. Pursuant to the CDMO and CDET Agreements (collectively,
Subfranchisor Agreements), Comfort Dental granted CDMO and CDET the right to offer
subfranchises for the operation of Dental Offices using the Marks and the Licensed Methods
within defined geographic areas pursuant to the terms and conditions of the relevant respective
Agreements. The geographical area for CDMO was Missouri and the geographical areas for
CDET were Kentucky and Indiana. [Dkt. # 1, Ex. A, 1.3; Ex. B, 1.3; Bahr Decl., 11, 12.]
CDMO and CDET began offering subfranchises to various subfranchisees in their
respective geographical areas per the terms of the Subfranchisor Agreements. Bahr Decl., 13.
CDMOs first subfranchisee in Missouri opened in February 2009, and CDETs first
subfranchisees in Kentucky and Indiana opened in May 2011. [Bahr Decl., 14, 15]. Pursuant
to the form agreements prepared by Comfort Dental that Comfort Dental contractually mandated
that Plaintiffs use, CDMO entered into five (5) subfranchise agreements in the State of Missouri.
[Dkt. # 1, Ex. C. Bahr Decl., 16]. CDET entered into one (1) subfranchise agreement in the
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State of Kentucky and one (1) subfranchise agreement in the State of Indiana. [Dkt. # 1, Ex. C.
Bahr Decl., 17].
The Subfranchisor Agreements contain various terms that govern the rights and
obligations of the parties. Section 13.2 of the Subfranchisor Agreements provides that Comfort
Dental reserves the right to approve and/or designate, from time to time, manufacturers,
vendors, distributors, suppliers, service providers and producers (collectively, Vendors), terms
and distribution methods for any services and products (which include, but are not limited to,
services, products, insurance, supplies, equipment and materials). [Dkt. # 1, Ex. A, 13.2, Ex. B
13.2]. This section states CDMO and CDET shall purchase all of the services and products
required for the operation of the Subfranchisor Business . . . only from such approved Vendors
under terms and in the manner designated by [Comfort Dental] or any of its affiliates. [Id,
Dkt. # 1, Ex. D].
The Subfranchisor Agreement contains a number of provisions by which Comfort Dental
seeks to control virtually all aspects of the practice of dentistry engaged in by Comfort Dental
dentists, including, among others, requirements that Comfort Dental approve all new
subfranchisees [Dkt. # 1, Ex. A, 4.4, Ex. B, 4.4], that Comfort Dental Forms be used for all
subfranchisee agreements [Dkt. # 1, Ex. A, 4.2, Ex. B, 4.2], that the subfranchisor undergo
three days of Comfort Dental training (including 1 day in Master Franchisors affiliates lab)
[Dkt. # 1, Ex. A, 7.1, Ex. B, 7.1], that the subfranchisees comply with all standards and
specifications for services and products offered by [subfranchisors] and the equipment and
supplies used, [Dkt. # 1, Ex. A, 13.1, Ex. B, 13.1], that the subfranchisor ensure that no
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subfranchisees offer any good or service that is not expressly authorized in writing by Comfort
Dental [Dkt. # 1, Ex. A, 13.4, Ex. B, 13.4], and that each of the subfranchisors allow Comfort
Dental to enter its premises, without notice, to inspect, audit and copy any records [Dkt. # 1,
Ex. A, 14.1, Ex. B, 14.1].
In addition to the Manual and various contractual provisions, Comfort Dental, through
continual written and oral directives and written and verbal training programs, attempts to direct
the activities of Comfort Dental subfranchisees, including through the Lean and Mean
instructions and testing, which all dentists are required to review and obey. [Dkt. # 1, Ex. E];
Bahr Decl., 20. The Lean and Mean system consists of a number of publicly available
lectures given by Dr. Kushner over the past 15 to 20 years about how he thinks a dental office
should be run. Id.
Comfort Dental requires in the Subfranchisor Agreements that Subfranchisor shall
comply with all applicable federal, state and local laws and regulations relating to the offering
and sale of subfranchise opportunities within the Territory. [Dkt. # 1, Ex. A, 13.5, Ex. B,
13.5]. The Subfranchisor Agreements further state that CDMO and CDET:
shall ensure that all Subfranchisees in the Territory secure and maintain in force
all required licenses, permits and certificates relating to the operation of the
Dental Offices and shall operate the Dental Offices in full compliance with the
Manual, all applicable laws, ordinances and regulations, including, without
limitation, all government regulations relating to health and safety, occupational
hazards and health, workmens compensation insurance, unemployment insurance
and withholding and payment of federal and state income taxes, social security
taxes and sales and use taxes.)
Id.
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The Subfranchisor Agreements may be terminated by Comfort Dental if one of the events
listed in section 17.2 of the Subfranchisor Agreements occurs. [Dkt. # 1, Ex. A, 17.2, Ex. B,
17.2]. Notably, Comfort Dental may terminate the Subfranchisor Agreements if it determines
that CDMO or CDET has fail[ed] to comply with any other provision of this Agreement or any
mandatory specification, standard or operating procedure prescribed by [Comfort Dental] unless
such failure is cured within thirty days of Comfort Dental providing notice of such failure. [Dkt.
# 1, Ex. A, 17.2(e), Ex. B, 17.2(e)]. The Agreements provide that either the Master
Franchisor or Subfranchisor may seek injunctive relief in appropriate cases to prevent
irreparable harm. [Dkt. # 1, Ex. A, 20.4, Ex. B, 20.4].
Pursuant to the Subfranchisor Agreements, Comfort Dental requires use of a standard
subfranchise contract. [Dkt. # 1, Ex. A, 2.5, 4.2, Ex. B, 2.5, 4.2]. The form subfranchise
agreement mandated by Comfort Dental includes a provision that, among other things, makes
Comfort Dental a third-party beneficiary to such Subfranchisee Agreement and gives Comfort
Dental the right, at its option, to independently enforce any term, condition or provision of the
Subfranchise Agreement. [Dkt. # 1, Ex. C, 12.10].
The prescribed Subfranchisee Agreement provides for immediate termination (without
advance notice or right of cure) if the subfranchisee fails to purchase all items (e.g. . . . lab
services) . . . from approved Vendors, including Budget Dental Lab[.] [Dkt. # 1, Ex. C,
9.1(a)(8).]
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B. Mandatory Laboratory Referral Program (MLRP)
Section 13 of the Subfranchisor Agreements mandates participation in the MLRP. [Dkt.
# 1, Ex. A, 13, Ex. B, 13]. In the MLRP, Comfort Dental has mandated that Plaintiffs and all
Comfort Dental dentists utilize its Comfort Dental Labs, which are owned and controlled by
Comfort Dentals principals and referenced in the Subfranchisor Agreements as affiliated
labs.
3
Id.
Dental laboratories such as the Comfort Dental Labs manufacture or customize various
products relating to the treatment of dental patients, including dentures, bridges, crowns and
related devices. [Bahr Decl., 21]. Dental laboratories play an integral part in the provision of
dental care, and are important to patients oral health, physical comfort and appearance. [Bahr
Decl., 21]. Problems with the quality, appearance, fit and timeliness of dental devices prepared
by these laboratories adversely affects patients dental health and damages dentists relationships
with their patients. [Bahr Decl., 21].
Pursuant to Section 13.2 of the Subfranchisor Agreements, Comfort Dental mandates that
all Comfort Dental dentists referin all 11 statesall dental laboratory work to the Comfort
Dental Labs. [Dkt. # 1, Ex. A, 13.2, Ex. B, 13.2]. Comfort Dental has repeatedly
emphasized that mandated lab referrals and revenues from the Comfort Dental Labs are critical
to the Comfort Dental business, and that Comfort Dental does not survive without the lab[s].
[Bahr Decl., 23].

3
Budget Dental Lab, LLC, is a Colorado corporation based in Lakewood, Colorado and owned by MKNIB
Company, which in turn, is owned by Comfort Dental CEO Rick Kushner, Barry Kushner, Roy Martin, Neil Norton,
C. Michael Bloss, and Bruce Irick. Budget Dental Lab, LLC, is a Colorado corporation based in Lakewood,
Colorado and owned by MKNIB Company, which in turn, is owned by Comfort Dental CEO Rick Kushner, Barry
Kushner, Roy Martin, Neil Norton, C. Michael Bloss, and Bruce Irick. [Dkt. #1, 54].
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On multiple occasions, Comfort Dental has sent written directives and warnings to
CDMO and CDET and/or affiliated dentists demanding that they refer only to the Comfort
Dental Labs, and regularly threatens and intimidates dentists who sought to exercise their own
independent judgment by referring to other, higher quality laboratories. [Bahr Decl., 20]. For
example, on July 31, 2012, Dr. Kushner warned Plaintiffs and their dentists about not referring to
the Comfort Dental Labs, and about acting independently:
I was recently made aware of your franchise violation regarding sending
unapproved lab work out of the organization. I expect that the violation was
relatively minor[.] Nevertheless, I would like to add my disappointment in your
actions. It always saddens and concerns me when a Comfort partner acts like any
other hot dog dentist and feels he/she can act independently of the
organization . . . I am confident that all of our parties understand that Comforts
mandatory in-house lab concept is one of a tiny few massive difference makers for
us . . . In addition to the legal penalties for your violation, I feel an obligation to
show this example to all of our partners for their edification. Additionally, your
partnership will be scrutinized going forward for additional franchise violations.
[Dkt. # 1, Ex. E-1]
On August 30, 2012, Graig Bears, corporate counsel for Comfort Dental, warned
Plaintiffs and Comfort Dental dentists as follows: [R]ight now the corporate office is dealing
with an office that has been using a non-Budget/Premier dental lab. It is not a one-time or even
sporadic use but rather continued, extensive use. The punishment is going to be severe. Please,
if any of you are using an outside lab, stop now. The money saved is not worth losing your
franchise. [Dkt. # 1, Ex. F].
Comfort Dentals exclusive referral mandate has continued throughout 2013 and 2014, as
have the public and intimidating threats made by Comfort Dental that referrals to superior labs
could lead to the termination of their franchise or other severe punishments. As recently as
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February 21, 2014, Comfort Dental CEO Kushner again e-mailed Plaintiffs and their dentists,
demanding they use Comfort Dental Labs (Kushner Demand Letter), stating:
[I]n order to avoid violating your franchise agreement and the
enforcement that would have to follow, you must continue to honor all of
your obligations, including use of the labs, Gold Plan and accounting
services for your business.
(emphasis added) [Dkt. # 1, Ex. G].
Comfort Dental not only has threatened, intimidated and/or terminated dentists for
exercising independent medical judgment as to referrals of lab services, Comfort Dental
also penalizes dentists who use their independent clinical judgment to request remakes of
defective work performed by the Comfort Dental Labs. Indeed, Comfort Dental fines
and penalizes dentists for ordering too many remakes and refers to this penalty as a
remake fine or lab penalty. [Dkt. # 1, Ex. H]. Indeed, Dr. Kushner stated as follows:
Please see the enclosed remake report and my message of July, 2010. As you can
see, two (2) offices . . . failed to meet my remake requirement of 12% for the third
quarter. Therefore, they are subject to a 10% penalty on their lab bill for October,
November and December. Other offices, as you can see, were very close to being
penalized. This penalty will be billed . . . under lab penalty. [T]hese ridiculous
remake levels will no longer be tolerated. You were warned and apparently some
of you ignored me.
Id.
Comfort Dentals imposition of remake penalties continues unabated. In December
2013, Comfort Dentals Executive Vice President warned all Comfort Dental dentists about
record remake percentages and that 21 offices exceeded the 10% remake limit set by RK
[Rick Kushner]. You are all flirting with FIRE . . . If you dont take action, PENALTIES will
ensue, and your life will continue to be frustrating. [Dkt. # 1, Ex. I].
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Comfort Dentals ongoing demands that Plaintiffs and their dentists refer exclusively
to the Comfort Dental Labsand its ongoing imposition of severe penalties such as remake
fines and franchise termination, are supported not only by threats from its CEO and senior
management, but also by the drastic remedy in the Subfranchisee Agreement which permits
Comfort Dental to immediately terminate such agreement, without any right to cure. [Dkt. # 1,
Ex. C, 9.1(a)(8)].
C. Gold Plan Program
Comfort Dental offers, and directs CDMO, CDET and their dentists to offer and sell a
Gold Plan to its dental patients. The Gold Plan, as set forth on Comfort Dentals website and
in a form Gold Member Agreement, is described as reduced fee dental membership plans that
allow individuals and groups to receive quality dental care at reduced prices. [Dkt. # 1, Ex. K].
Under the Gold Plan, members pay a monthly fee in exchange for free dental
examinations, the providers lowest fee rate, and a capitation. [Bahr Decl., 31]. Comfort
Dental mandates that CDMO, CDET and their dentists in all states in which they operate, sell
and advertise the Gold Plan to their patients using only approved advertising copy, all of which
has been prepared by Comfort Dental and all of which advertises the Gold Plan. [Bahr Decl.,
32, Ex. K-1]. Comfort Dental directs CDMO, CDET and Comfort Dental dentists to sell the
Gold Plan by various written and oral demands, which come in the form of direct e-mail or other
written communications, through office visits, and through demands that Gold Plan materials be
included in all advertising copy. Id.
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Nothing in Comfort Dentals website, advertising, or marketing materials provided by
Comfort Dental states whether the Gold Plan is registered in any state, or compliant with state
laws. [Dkt. # 1, Ex. K]. Starting in November 2013, Plaintiffs and their counsel began making
inquiries with Comfort Dental about the legality of the Gold Plan. [Bahr Decl., 33].
On November 13, 2013, after Plaintiffs counsel preliminarily discussed the Gold Plan
with Comfort Dentals counsel, Graig Bears, Dr. Kushner emailed Plaintiffs counsel, directing
them not to speak to Mr. Bears, and stating that, because of [Mr. Bears] actions in this matter,
his future is quite in jeopardy and it is likely that by the time you do speak with me in person,
Graig will no longer be my employee. [Bahr Decl., 33, Ex. L]
In December 2013, CDMO and CDET asked Comfort Dentals general counsel, Graig
Bears, to provide assurances that Comfort Dentals Gold Plan could be sold and marketed in
compliance with Missouri law. [Dkt. # 1, Ex. J]. Despite further requests to Mr. Bears, neither
he nor Comfort Dental has, to date, provided any such assurances.
To the contrary, on February 21, 2014, Comfort Dental circulated to CDMO, CDET and
other Comfort Dental dentists, a letter reviewing the Gold Plan which had been prepared by its
legal counsel, Brent Haden (Haden Letter). [Dkt. # 1, Ex. G]. In the Haden Letter, Mr. Haden
stated that Comfort Dental is currently in discussions with the Missouri Department of
Insurance regarding the appropriate registration classification for the Gold Plan. Id. The Haden
Letter continued: The Gold Plan will now be registered as a discount medical plan under state
law, per our discussions with the Department of Insurances regulators. Id. The Haden Letter
stated Comfort Dental was working to submit all information to Missouri by the end of February,
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but conceded that the Gold Plan had not been registered in Missouri during the time Comfort
Dental had been requiring Plaintiffs and their dentists to market it. Id. It did not indicate
whether the Gold Plan had been registered in any other state, nor did it or Comfort Dental advise
whether the Gold Plan conformed with Indiana or Kentucky law. Id.
Although Comfort Dentals lawyer admitted the Gold Plan was not registered, Comfort
Dental still demanded it be sold. Id. Indeed, in the very e-mail message transmitting the Haden
Letter to Plaintiffs, Dr. Kushner, on February 21, 2014, demanded in writing that CDMO,
CDET, and all Comfort Dental dentists continue selling the Gold Plan. Id. Dr. Kushner not only
demanded the unregistered Gold Plan be sold, but threatened that failure to do so would violate
your franchise agreement[.] Id.
On February 24, 2014, Dr. Craig Bahr, on behalf of CDMO and CDET, responded to the
Kushner Demand Letter, again inquiring whether and when the Gold Plan would be registered in
any state. [Bahr Decl., 38]. Despite this further written request for information, neither
Comfort Dental nor Mr. Haden has ever informed Plaintiffs whether the Gold Plan has been
registered in Missouri or any other state. [Bahr Decl., 38]. Plaintiffs believe the Gold Plan
remains out of compliance with, and/or unregistered as, a discount medical plan in Missouri and
Indiana, among other states.
III. ARGUMENT
Plaintiffs seek a preliminary injunction prohibiting Comfort Dental from enforcing the
illegal terms of the MLRP or Gold Plan Program, prohibiting Comfort Dental from demanding
that Plaintiffs engage in potentially illegal conduct, or penalizing Plaintiffs through monetary
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fines, franchise termination or other sanctions. Because Comfort Dentals enforcement demands
are both illegal and against public policy, they threaten immediate, ongoing, serious, and
irreparable harm and should be preliminarily enjoined.
A. Relevant State Laws and Regulations
1. Corporate Practice of Dentistry and Control of Professional Judgment
Missouri dental practice laws prohibit licensed dentists from surrendering their
independent professional judgment, by contract or otherwise, to a person not licensed to practice
dentistry in the state. See Mo. Am. Stat. 332.081(4) (West 2014) (A dentist shall not enter into
a contract that allows a person who is not a dentist to influence or interfere with the exercise of
the dentists independent professional judgment.).
4
Missouri law under which CDMO operates,
provides, in relevant part, that one who [c]ontrols, influences, attempts to control or influence,
or otherwise interferes with the dentists independent professional judgment regarding the

4
In actions in which jurisdiction is based on diversity of citizenship, the substantive law of the forum state applies,
including its choice of law rules. O'Toole v. Northrop Grumman Corp., 305 F.3d 1222, 1225 (10th Cir. 2002);
Moore v. Subaru of Am., 891 F.2d 1445, 1448 (10th Cir. 1989). Colorado has adopted the most significant
relationship approach of the Restatement (Second) of Conflict of Laws for resolving choice of law questions in
contract actions. Wright v. Martek Power, Inc., 314 F. Supp. 2d 1065, 1067-68 (D. Colo. 2004). Under this
approach, the law of the state chosen by the contracting parties to govern their contractual rights and duties will be
applied unless: (1) the chosen state has no substantial relationship to the parties or the transaction and there is no
other reasonable basis for the parties' choice, or (2) application of the law of the chosen state would be contrary to a
fundamental policy of a state whose law would govern the parties' dispute in the absence of an effective choice of
law by the parties. Id. (citing Restatement (Second) of Conflict of Laws 187(2); see Century 21 Real Estate
Corp. v. Meraj Intl Inv. Corp., 315 F.3d 1271, 1281 (10th Cir. 2003); Hansen v. GAB Business Servs., Inc., 876
P.2d 112, 113 (Colo. App. 1994)). Colorados choice of law rules do not affect the illegality or unlawfulness of the
actions in the states of operation. Principles of comity require that Colorado courts give effect to a sister states
construction of its own statutes. U.S. Fid. & Guar. Co. v. Indus. Commn., 61 P.2d 1033, 1034 (Colo. 1936)
(Texas has construed her own law and comity binds us.); Denver & R. G. R. Co. v. Warring, 86 P. 305, 306 (Colo.
1906).
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diagnosis or treatment of a dental disease, disorder, or physical condition engages in the
practice of dentistry. Mo. Ann. Stat. 332.071(11) (West 2014).
5
Indiana dental practice laws likewise provide that a person or entity engages in the
prohibited, unlicensed practice of dentistry by directing or controlling the use of dental
equipment or dental material while the equipment or material is being used to provide dental
services or directs, controls, or otherwise interferes with a dentists clinical judgment. Ind. Code
Ann. 25-14-1-23(11) and (12) (West 2014).
Kentucky law operates to prohibit corporations or other non-licensed persons from
attempting to dictate or influence dentists independent medical judgment and clinical practice.
See Kendall v. Beiling, 175 S.W.2d 489, 493 (1943) (neither a corporation nor any other
unlicensed person or entity may engage, through licensed employees, in the practice of medicine
or surgery, dentistry, or any of the limited healing arts). Corporations, such as Comfort Dental,
cannot be licensed in Kentucky, and therefore, cannot practice dentistry in that state. See Ky.
Rev. Stat. Ann. 313.070(1) (West 2014) (A person who is not licensed or registered to do
so . . . shall not practice as a dentist, dental hygienist, or dental assistant). Comfort Dental,
through the control it exerts over the Plaintiffs is practicing dentistry without a license and is
therefore in violation of Kentucky law. At a minimum, corporations cannot dictate or influence
dentists clinical practice (see KY. Rev. Stat. Ann. 313.010(11); Com. v. Goodman,
No. 2001-CA-000694-MR, 2001-CA-000775-MR, 2003 WL 1255695 (Ky. Ct. App. Feb. 7,

5
See also Mo. Ok. Stat. 332.321 (West 2014) (listing disciplinary actions available to the Missouri board of
Dentistry).
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2003) (affirming a dental boards decision that only a licensed dentist can perform tasks which
require the professional judgment and skill of a dentist).
These state laws forbid licensed dentists from entering into certain types of contracts, and
prohibit unlicensed persons or corporations from doing so as well. The essential prohibition is
directed at outside control of a dentists clinical judgment: the dentist may not surrender control
of his/her judgment, and the non-licensed person may not exert such control. The law in all
states in which Plaintiffs conduct their businesses prohibits a dental licensee from surrendering
his/her clinical judgment to another, and forbids a non-licensee (such as Comfort Dental) from
exerting such control. Mo. Ann. Stat. 332.071; Ind. Code Ann. 25-14-1-23(11) and (12)
Although no courts in Missouri, Indiana or Kentucky have construed these provisions of
their dental practice law, several Texas courts have interpreted Texas nearly identical Dental
Practices Act. For example, in Penny v. Orthalliance, Inc., 255 F. Supp. 2d 579, 583 (N.D. Tex.
2003) the district court analyzed an orthodontic dental franchises contractual relationship to
determine whether it illegally granted excessive control to the franchisor, thereby allowing it to
practice dentistry without a license. In Penny, the court first noted that:
A person practices dentistry if, among other things, he or she owns, maintains,
or operates an office or place of business in which the person employs or engages
under any type of contract another person or persons to practice dentistry . . . A
person without a valid license issued by the Texas Board of Dental Examiners
cannot own, maintain, or operate an office in which the person employs under any
type of contract another person to practice dentistry. The language of the TDPA
is clear and broad. Owns, maintains, or operates are well defined and
commonly understood terms, and the legislatures use of the disjunctive or
signifies that engaging in any of the three actions violates the provision. Further,
the unambiguous language of the statute prohibits a dentists employment or
engagement under any type of contract at an office owned, maintained, or
operated by non-licensed persons . . . The Court finds the use of the word any to
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be significant . . . The legislatures deliberate wording of the TDPA indicates its
intent to broadly prohibit a dentists employment or engagement by a
non-licensed person.
Id. at 581-82 (emphasis added.)
The court further described that, under the Texas statute:
To operate is defined as to control the functioning of; run or to conduct the
affairs of; manage. Id. In the [Franchise] Agreements, Orthalliance contracted to
provide the Practice Groups with comprehensive practice management. As part
of this comprehensive management, Orthalliance controls the functioning of, runs,
conducts the affairs of, and manages the orthodontic offices . . . Indeed, the
express purpose of the Service Agreements is to allow Orthalliance to control the
functioning of . . . the orthodontic offices.
Id. at 582-83 (emphasis added.) After construing the various franchise agreements at issue, the
court in Penny concluded that The Agreements, when construed together, result in [franchisor]
engaging or obtaining the services of the [Plaintiffs] and declared those agreements void and
illegal in their entirety. Id. at 583. Like the franchise agreements at issue in Penny, the mandates
imposed by Comfort Dental under its MLRP attempt impermissibly to control the Plaintiffs
practices, interfere with the dentists independent professional judgment and medical treatment
of their patients and, as such, are contrary to the laws of Missouri, Indiana, and Kentucky.
2. Insurance Laws Related to Discount Medical Plans and Prepaid Dental
Plans
6
As noted, Comfort Dental demands that Plaintiffs and their Comfort Dental dentists
advertise and sell the Gold Plan in Missouri and Indiana, among others. Those states require

6
While there has been no formal determination that the Gold Plan is either a discount medical plan or a prepaid
dental plan . . . or other insurance product, Comfort Dentals counsel represented to Plaintiffs that it was a discount
medical plan. [Dkt. # 1, Ex. G] In any event, whether the Gold Plan is a discount medical plan or a prepaid dental
plan, Comfort Dental should have registered, but did not register, with the state to advertise and market the Gold
Plan. Mo. Ok. Stat. 376.1502; Ind. Code Ann. 27-17-2-1.
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registration of the Gold Plan as a discount medical plan, and penalize unregistered sales.
Missouri law provides that: It is unlawful to transact business in this state as a discount
medical plan organization, unless the organization . . . is registered as a discount medical plan
organization with the director or duly authorized by the director as an insurance company,
licensed health maintenance organization, licensed group health service organization, or licensed
third-party administrator. Mo. Ok. Stat. 376.1502 (West 2014). (emphasis added) Likewise,
A prepaid dental plan may not be established or operated in this state, nor may membership be
solicited in such a plan unless the plan is offered by a prepaid dental plan corporation licensed
under sections 354.700 to 354.723. Mo. Ok. Stat. 354.702(1) (West 2014). Penalties for
violations include monetary penalties per violation of $1000, up to an aggregate annual penalty
of $50,000. Mo. Ok. Stat. 376.1532, 374.049 (West 2014).
In Indiana, [a] discount medical card program organization may not transact business in
Indiana unless the discount medical card program organization is (1) authorized to transact
business in Indiana; and (2) registered under this chapter. Ind. Code Ann. 27-17-2-1 (West
2014). (emphasis added). Marketers in Indiana face even more hurdles. With regard to
marketers, [a] discount medical card program organization (1) shall enter into a written
agreement with a marketer before the marketer may begin marketing, promoting, selling, or
distributing the discount medical card program; and (2) is responsible and financially liable for
any acts of the discount medical card program organizations marketers that do not comply with
this article. Ind. Code Ann. 27-17-12-2. Violations of the Discount Medical Plan statutes
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authorize civil penalties of at least five hundred dollars and not more than fifty thousand dollars
per violation. Ind. Code Ann. 27-17-14-1.
B. Legal Standard for Issuance of a Preliminary Injunction.
As an equitable remedy, a preliminary injunction invokes the sound discretion of the
district court. Big O Tires, Inc. v. Bigfoot 4X4, Inc., 167 F. Supp. 2d 1216, 1221 (D. Colo. 2001).
Under the traditional four-prong test for a preliminary injunction, the party moving for an
injunction must show: (1) a likelihood of success on the merits; (2) a likely threat of irreparable
harm to the movant; (3) the harm alleged by the movant outweighs any harm to the non-moving
party; and (4) an injunction is in the public interest. Hobby Lobby Stores, Inc. v. Sebelius, 723
F.3d 1114, 1128 (10th Cir. 2013) (citing Winter v. NRDC, 555 U.S. 7, 20 (2008)).
With respect to irreparable harm, the claimed injury must be certain, great, actual and
not theoretical. Heideman v. S. Salt Lake City, 348 F.3d 1182, 1189 (10th Cir. 2003) (quoting
Wisc. Gas Co. v. FERC, 758 F.2d 669, 674 (D.C. Cir. 1985). To satisfy the irreparable harm
requirement, a plaintiff must demonstrate a significant risk that he or she will experience harm
that cannot be compensated after the fact. Entek GRB, LLC v. Stull Ranches, LLC, 885 F.
Supp. 2d 1082, 1095 (D. Colo. 2012) (quoting Greater Yellowstone Coal. V. Flowers, 321 F.3d
1250, 1258 (10th Cir. 2003)). The moving party must demonstrate that denying the injunction
would cause it greater harm than would be caused the non-moving party were the injunction
granted. Doubleclick, Inc. v. Paikin, 402 F. Supp. 2d 1251, 1260 (D. Colo. 2005).
[W]here the remedy at law is inadequate, an injunction will issue in a proper case to
restrain the performance or enforcement of contracts that are illegal or against public policy. A
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temporary injunction may issue against the enforcement of a contract while the contracts
validity is in dispute. 42 Am. Jur. 2d Injunctions 117. See The Bd. of Regents of the Univ. Of
Okla. v. Natl Collegiate Athletic Assn, 546 F. Supp. 1276 (W.D. Okl. 1982) (granting
injunctive relief forbidding implementation of contracts that were void in violation of antitrust
laws); Dawson v. Woodhams, 53 P. 238, 239 (Co. App. 1898) (The contract itself is wholly
illegal and void, and a judgment of permanent injunction preventing its execution should have
been entered.).
C. The Court Should Grant Injunctive Relief Because Plaintiffs Have
Established All Four Factors Authorizing A Preliminary Injunction
1. Plaintiffs Have a Substantial Likelihood of Success on the Merits with
Respect to the Specifically Identified Provisions of the Contract
Comfort Dental has repeatedly sought, through threatened termination and severe
penalties under the Subfranchisor Agreements, to force Plaintiffs to engage in illegal acts in
multiple states, or compel their subfranchisees to engage in such acts. Because enforcement of
these provisions would require Plaintiffs to engage in or demand illegal activity, it is clear that
Plaintiffs will prevail on the merits.
[I]f the contract whose enforcement is here sought is contrary to public policy, it is
illegal and void and the courts will have nothing to do with it. Metro. Life Ins. Co. v. Roma, 50
P.2d 1142, 1143 (Colo. 1935) (citing 13 C. J. 342, p. 412; 6 R. C. L. 123, p. 715). [I]t is
immaterial whether information of such illegality comes from plaintiff or defendant, or is
disclosed by pleadings or evidence. Id. See also F.D.I.C. v. Am. Cas. Co. of Reading, Pa., 843
P.2d 1285, 1290 (Colo. 1992). (It is a long-standing principle of contract law that a contractual
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provision is void if the interest in enforcing the provision is clearly outweighed by contrary
public policy); R.P.T. of Aspen, Inc. v. Innovative Commcns, Inc., 917 P.2d 340, 342 (Colo.
App. 1996) (Contracts in violation of statutory prohibitions are void); Mason v. Orthodontic
Crs. of Colo., Inc., 516 F. Supp. 2d 1205, 1219 (D. Colo. 2007) (finding portions of a contract
that required non-dentist proprietors to engage in fee sharing with dentists, and thus to engage in
the practice of dentistry, to be void as against public policy). We have not hesitated to apply
this principle to terms and conditions of insurance contracts which undermine legislatively
expressed policy. F.D.I.C. v. Am. Cas. Co. of Reading, Pa., 843 P.2d 1285, 1290 (Colo. 1992)
(household exclusion in automobile liability policy held invalid as contrary to public policy
expressed in Colorado Auto Accident Reparations Act); Newton v. Nationwide Mut. Fire Ins.
Co., 594 P.2d 1042, 1046 (Colo. 1979) (insurance policy provision which permitted insurer to
subtract PIP payments from uninsured motorist coverage so as to reduce that coverage to less
than statutory minimum violative of public policy in Colorado Auto Accident Reparations Act).
In determining whether a contract is void as against public policy, Colorado courts
consider the following factors from the Restatement of Contracts: (i) the parties justified
expectations; (ii) any forfeiture that would result if enforcement were denied; (iii) any special
public interest in the enforcement of a particular term; (iv) the strength of the public policy at
issue; (v) the likelihood that refusal to enforce the agreement will further that interest; (vi) the
seriousness of the misconduct involved and its willfulness; and (vii) the directness of the
connection between the misconduct and the agreement. Mason v. Orthodontic Ctrs. of Colo.,
Inc., 516 F. Supp. 2d 1205, 1215 (D. Colo. 2007).
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In the Mason case, a group of dentists and corporations entered into an agreement to
supply various dental office management services . . . to the Plaintiffs in exchange for a
percentage of the offices profits. Id at 1208. Eventually the dentists filed suit, seeking to void
the agreement as against public policy. Employing the Restatement test, Judge Krieger held that
contract provisions allowing fee-sharing were void as against public policy. Id. at 1210-1219.
After examining the relevant agreements under the Restatement test, the court declared the
contracts void: The public interest is a strong one, and the conduct contemplated by the
Agreement directly contravenes the purposes that the public policy advances. Although voiding
the contract works some degree of inequity upon the Defendants, they are not unreasonably
prejudiced, as the law likely permits them to recover the reasonable value of the services they
have provided to the Plaintiffs. Mason, 516 F. Supp. 2d at 1217. [C]ontracts in violation of
statutory prohibitions are void R.P.T. of Aspen, Inc. v. Innovative Commcns, Inc., 917 P.2d
340, 342 (Colo. App. 1996) (reversing and remanding an affirmation of arbitrators award that
contained a finding that the contract was not illegal to the District Court to determine whether a
contract provision violated Colorado antitrust laws).
In Penny v. Orthalliance, Inc., described above, the United States District Court for the
Northern District of Texas reached a similar conclusion. 255 F. Supp. 2d 579, 582 (N.D. Tex.
2003). Based on the finding that the franchisor effectively controlled the individual orthodontists
under their franchisor agreements, the court held [t]he Agreements, when construed together,
result in Orthalliance engaging or obtaining the services of the Individual Plaintiffs, and found
the contracts to be illegal in their entirety and void. Id. at 583. See also In re OCA, Inc., 552
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F.3d 413 (5th Cir. 2008) (because OCA was committing an illegal act by practicing dentistry
without a license according to Texas statutes and the business services agreement, the Fifth
Circuit affirmed the BSAs were illegal and void)
Because the Subfranchisor Agreements contravene the laws of Missouri and Indiana, and
there is a strong likelihood the Subfranchisor Agreements will be found void.
7
a. There is a Strong Likelihood the MLRP Provision Will Be Found
Void as Illegal and/or as Against Public Policy
The provisions of the Subfranchisor Agreements related to the MLRP are illegal and/or
unlawful and thus void. Because Comfort Dental seeks through these agreements to control the
independent judgment of its dentists, these provisions are illegal.
(1) The MLRP Provision Will Be Found Void as Illegal
Section 13.2 of the Subfranchisor Agreements mandates that all Comfort Dental dentists
refer all dental laboratory work to the Comfort Dental Labs. [Dkt. # 1, Ex. A, 13.2; Ex. B,
13.2]. Other provisions seek to control virtually all aspects of the practice of dentistry [Bahr.
Decl. 20]. These mandates seek to remove the individual practitioners professional clinical
judgment and control and surrender it contractually to Comfort Dental. Comfort Dental exerts
additional control by imposing remake penalties or fines when dentists exercise their
independent clinical judgment to reject a defective Comfort Dental Lab device that could harm
their patient.

7
Although Kentucky law does not contain a comparable registration requirement for prepaid dental plans, the
Subfranchisor Agreements between CDET and Comfort Dental, which grant franchises in Kentucky and Indiana, are
nevertheless illegal because: 1) both Kentucky and Indiana law prohibit the MLRP program, 2) Indiana law requires
registration of the Gold Plan, 3) Plaintiffs operate under one Subfranchisor Agreement for both Indiana and
Kentucky and the MLRPs illegality as to one state renders the provision illegal and void as to all states.
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In the states where Plaintiffs operate, the Subfranchisor Agreements and Comfort
Dentals enforcement of same are illegal. See e.g. Mo. Ann. Stat. 332.071(ii) (one who
[c]ontrols, influences, attempts to control or influence, or otherwise interferes with the dentists
independent professional judgment regarding the diagnosis or treatment of a dental disease,
disorder, or physical condition engages in the practice of dentistry); See, Ind. Code Ann.
25-14-1-23(11) and (12) (a person or entity engages in the prohibited, unlicensed practice of
dentistry by directing or controlling the use of dental equipment or dental material while the
equipment or material is being used to provide dental services or directs, controls, or otherwise
interferes with a dentists clinical judgment; Com. v. Goodman, No. 2001-CA-000694-MR,
2001-CA-000775, 2003 WL 1255695 (Ky. Ct. App. Feb. 7, 2003) (affirming a dental boards
decision that only a licensed dentist can perform tasks which require the professional judgment
and skill of a dentist)).
8
Under the above-referenced laws, enforcement of the MLRP would be illegal, because it
seeks to require Plaintiffs to surrender their professional judgment and relinquish control to
Comfort Dental. For the same reason, Comfort Dentals enforcement of the MLRP may also
constitute the practice of dentistry without a license by Comfort Dental. See Ky. Rev. Stat. Ann.
313.070; Mo. Ok. Stat. 332.081; Ind. Code Ann. 25-14-1-1. Therefore, the Subfranchisor
Agreements are void.

8
Missouri law provides that [a]ny person who practices dentistry as defined in section 332.071 . . . who is not duly
registered and currently licensed in Missouri as hereinafter provided is guilty of a class A misdemeanor. Mo. Ok.
Stat. 332.111 (West 2014). Similarly, Indiana law states [i]t is a Class D felony for a person to . . . [p]ractice
dentistry not being at the time a dentist duly licensed to practice as such in this state under this chapter[.] Ind. Code
Ann. 25-14-1-25. Kentucky likewise provides [a] person who violates subsection (1)(a), (b), (c), or (d) of this
section [relating to the unlawful practice of dentistry] shall be guilty of a Class B misdemeanor for a first offense
and a Class A misdemeanor for each subsequent offense. Ky. Rev. Stat. Ann. 313.080 (West 2014).
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(2) The MLRP Provision Is Also Void as Against Public
Policy
The Subfranchisor Agreements would be also void as against public policy under the
Colorado Restatement (Second) test articulated in Mason, 516 F. Supp. 2d at 1215. Analysis of
these factors compels the conclusion that the challenged provisions would frustrate public policy
in numerous particulars.
Examination of the first two Restatement factorsthe parties expectations and any
forfeiture
9
from denying enforcement of the agreementweighs in favor of voiding the
Subfranchisor Agreements. As the court held in Mason, even assuming the parties may have
legitimately expected performance, there would be no forfeiture if the contracts were voided
sinceassuming Comfort Dental [could] show [its] own conduct was properit could seek
recovery for work actually performed. Id. at 1215.
Review of the remaining Restatement factors confirms that the Subfranchisor
Agreements here should be void. First, Colorado public policy relating to the dental profession
supports avoiding non-professional interference in professional decision-making. 516 F. Supp.
2d at 1216-17. (The public interest is a strong one, and the conduct contemplated by the
Agreement directly contravenes the purposes that the public policy advances.) As has been
shown, the Subfranchisor Agreements directly interfere in dentists decision-making not only as
to referrals for laboratory services, but in a range of other professional decisions affecting dental

9
A court will not enforce a contract that violates public policy even if the failure to do so is unfair to one of the
parties: Countless instances might be cited where because of the refusal to enforce contracts which are against
public policy one of the parties is left in a peculiarly advantageous position, or the contrary. Equitex, Inc. v.
Ungar, 60 P.3d 746, 750 (Colo. App. 2002).
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patients. [Dkt.# A, 4.2, 4.4, 7.1, 13.1, 13.4, 14.1; Ex. B 4.2, 4.4, 7.1, 13.1, 13.4, 14.1].
That public policy interest exists under Colorado law, but also under the laws of Missouri,
Indiana and Kentucky where CDMO and CDET dentists practice and hold their licensure. [See,
Mo. Ann. Stat. 332.071; Am. Assn of Orthodontists v. Yellow Book USA, Inc., 277 S.W.3d
686, 695 (Mo. Ct. App. 2008)(finding statute regulating dentists to be a public policy of the state
of Missouri); Ind. Code Ann. 25-14-1-23(11) and (12); Trotter v. Nelson, 684 N.E.2d 1150,
1152-53 (Ind. 1997) abrogated on other grounds by Liggett v. Young, 877 N.E.2d 178 (Ind.
2007) (In the past, Indiana courts have noted that we first look to the Constitution, the
legislature, and the judiciary for explicit declarations of public policy); Com. v. Goodman,
No. 2001-CA-000694-MR, 2001-CA-000775-MR, 2003 WL 1255695 (Ky. Ct. App. Feb. 7,
2003) (affirming a dental boards decision that only a dentist can perform tasks which require the
professional judgment and skill of a dentist).] Because refusal to enforce the Subfranchisor
Agreements would further these states interests in maintaining the independence of clinical
decision-making and protecting the dental health of patients, these provisions, should be voided
as against public policy.
b. There is a Strong Likelihood the Gold Plan Provision Will be
Found Void
The Subfranchisor Agreements require Plaintiffs to comply with . . . all mandatory
specifications, standards and operating procedures[.] [Dkt.# 1, Ex. A, 13.4; Ex. B 13.4].
One such mandatory specification is the Gold Plan.
The Gold Plan, as described above, is a reduced fee dental membership plan[] that
allow[s] individuals and groups to receive quality dental care at reduced prices. [Dkt.# 1,
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Ex. K]. Such a plan implicates the insurance laws of the states in which Plaintiffs operate. In
states in which Plaintiffs operate under the Subfranchisor Agreements, the Gold Plan must be
registered.
10
However, as noted above, Comfort Dental admittedly has failed to register with any
state, while at the same time threatening to terminate their franchises if Plaintiffs do not sell the
Gold Plan to their patients. [Dkt.# 1, Ex. G]. By forcing Plaintiffs and their dentists to market
the Gold Plan, Comfort Dental seeks to compel Plaintiffs to commit potentially illegal acts.
Because requiring Plaintiffs to comply with sections 13.2 and 13.4 of the Subfranchisor
Agreements would require Plaintiffs to commit illegal acts, the Subfranchisor Agreements are
void as illegal and as against public policy.
2. Plaintiffs Will Suffer Irreparable Harm to Plaintiffs if the MLRP and Gold
Plan Provisions Were Enforced.
Irreparable harm represents harm that could not be adequately compensated by damages,
or averted by a decision on the merits, at the permanent injunction stage, or limited by other
available relief. 1 Dan B. Dobbs, Dobbs v. Law of Remedies 2.11(2), (2d ed. 1993) We have
previously held that a plaintiff satisfies the irreparable harm requirement by demonstrating a
significant risk that he or she will experience harm that cannot be compensated after the fact by
monetary damages. RoDa Drilling Co. v. Siegal, 552 F.3d 1203, 1210 (10th Cir. 2009). (In
determining whether a plaintiff has made the requisite showing, we further assess whether such
harm is likely to occur before the district court rules on the merits.) Id. Absent a preliminary
injunction, Plaintiffs would suffer immediate irreparable injury, including termination of their

10
See Mo. Ann. Stat. 376.1502(1); Mo. Ann. Stat. 354.702(1); Ind. Code Ann. 27-17-12, sec. 1,2; Ind. Code
Ann. 27-13-34-8; Kendall v. Beiling, 175 S.W.2d 489, 493 (Ky. 1943).
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25-year franchises, irreparable harm to their relationships with patients, damage to their
reputations and risk to their professional and licensure and standing.
Courts have recognized that the threatened loss of a franchise business before the
lawfulness of a termination can be determined constitutes irreparable harm sufficient to warrant
injunctive relief. Bray v. QFA Royalties LLC, 486 F. Supp. 2d 1237, 1247 (D. Colo. 2007). In
the Bray case, [e]ight sandwich shop franchisees filed [a] lawsuit . . . alleging wrongful
termination of their franchise agreements by QFA Royalties LLC (Quiznos). Id. at 1239.
The sandwich shop owners were members of the Toasted Subs Franchise Associate (TFSA),
and the TFSA posted a note regarding the suicide of a former Quiznos franchisee after protracted
litigation with Quiznos. In determining whether the franchisees were entitled to a preliminary
injunction, the District of Colorado determined that the: immediate terminations ordered by
Quiznos would effectively close Plaintiffs stores completely pending trial, resulting in a loss of
customer base and community goodwill going beyond simple economic loss. Id. at 1249.
Thus, the court therefore found the franchisees had made a strong showing of irreparable harm.
Id. See also (Wojciechowski v. Amoco Oil Co., 483 F. Supp. 109, 112 (E.D. Wis. 1980) (The
law is very clear that the loss of a franchise is an irreparable harm, and thus legal remedies are
inadequate); Roso-Lino Beverage Distrib., Inc. v. Coca-Cola Bottling Co. of N.Y., Inc., 749 F.2d
124, 125-26 (2d Cir. 1984) (The loss of Roso-Linos distributorship, an ongoing business
representing many years of effort and the livelihood of its husband and wife owners, constitutes
irreparable harm).
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In this action, Comfort Dental has repeatedly, and recently, threatened to terminate
Plaintiffs franchise for failing to follow Comfort Dentals improper demands. [Dkt.# 1, Ex. F,
G, H, I]. Because loss of a franchise cannot be compensated by an award of damages, the harm
promised by Comfort Dental is irreparable.
11
Damage to the physician/patient relationship also constitutes irreparable harm. See Pac.
Radiation Oncology, LLC v. Queens Med. Ctr., 861 F. Supp. 2d 1170, 1187-88 (D. Haw. 2012)
affd, No. 12-15624, 2014 WL 689748 (9th Cir. Feb. 24, 2014) (harm to the doctor-patient
relationship, relationships with referring physicians through whom the doctor establishes a client
base, and the deprivation of the opportunity to compete for potential patients are all harms that
cannot be remedied through an award of damages and thus constitute irreparable harm). See also
Fairfield Cnty. Med. Assn v. United Healthcare of New England, No. 3:13-CV-1621 SRU, 2013
WL 6334092 at *7 (D. Conn. Dec. 5, 2013) affd as modified sub nom. Fairfield Cnty. Med.
Assn v. United Healthcare of New England, Inc., No. 13-4608-CV, 2014 WL 485933 (2d Cir.
Feb. 7, 2014) (disruption of the physician-patient relationship can cause irreparable harm that
justifies issuing preliminary injunctive relief). Here, Comfort Dental threatens patient
relationships not only by interfering with the dentists clinical judgments, but also by threatening
termination of Plaintiffs franchise. Such harm cannot be remedied and is therefore irreparable.

11
Nothing herein shall prevent . . . Subfranchisor from seeking injunctive relief in appropriate cases to prevent
irreparable harm.; [Dkt. #1, Ex. A, 20.4]; Ex. B, 20.4]. Therefore, Subfranchisee agrees . . . that if
Subfranchisee or its affiliates are in default of this Agreement, or in the event of threatened breach by Subfranchisee
or its affiliates of any of the provisions of this Agreement, Master Franchisor and Subfranchisor shall have the
immediate right, without notice to Subfranchisee or its affiliates, to secure an order enjoining any such default or
threatened breach[.] [Dkt.#1, Ex. C, 12.6].
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Negative publicity and damage to reputation associated with licensure sanctions or other
adverse actions represents irreparable harm. See Housworth v. Glisson, 485 F. Supp. 29, 35
(N.D. Ga. 1978) (plaintiffs showed irreparable harm specifically from the injury to their
businesses caused by the publicity attending business license revocations)See also Dominion
Video Satellite, Inc. v. EchoStar Satellite Corp., 269 F.3d 1149, 1157 (10th Cir. 2001) (no
remedy could repair the damage to Dominions reputation and credibility from Defendants
refusal to comply with contract terms related to activating satellite customers). Because potential
regulatory sanctions and attendant adverse publicity would be caused by enforcement of the
Subfranchisor Agreements, that harm is irreparable.
Finally, loss of goodwill often constitutes irreparable harm. See Multi-Channel TV Cable
Co. v. Charlottesville Quality Cable Operating Co., 22 F.3d 546, 552 (4th Cir. 1994) (when the
failure to grant preliminary relief creates the possibility of permanent loss of customers to a
competitor or the loss of goodwill, the irreparable injury prong is satisfied); SMC Corp., Ltd. v.
Lockjaw, LLC, 481 F. Supp. 2d 918, 928 (N.D. Ill. 2007) (finding irreparable harm where
manufacturer attempted to terminate an exclusive distributor agreement and finding, it is
virtually impossible to ascertain the precise economic consequences of intangible harms, such as
damage to reputation and loss of goodwill . . . [t]hus, these type of injuries are presumed
irreparable). Comfort Dentals conduct here threatens not only damage to Plaintiffs reputation,
but loss of the goodwill of their respective businesses and professions if regulatory action were
taken as a result of Comfort Dentals demands under the Subfranchisor Agreements, or if
Comfort Dental terminated them.
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Clearly, the Plaintiffs will suffer irreparable harm if the Court does not enjoin
enforcement of the Subfranchisor Agreements. If Comfort Dental were allowed to enforce
adherence to the MLRP and Gold Plan provisions, Plaintiffs would be forced to engage in
potentially illegal acts in the states in which they operate. Regulatory agencies could potentially
sanction or prohibit Plaintiffs and/or their subfranchisee dentists from practicing dentistry. The
threat to the continuing operation of Plaintiffs business operations is real and imminent.
Plaintiffs have demonstrated a likely threat of irreparable harm and the Court should grant the
motion for a preliminary injunction.
3. The Balance of Harms and the Public Interest Favors Issuing a
Preliminary Injunction.
The balance of harms strongly supports entry of an injunction. On the one hand, if
Comfort Dentals conduct continued, Plaintiffs would likely suffer civil penalties, permanent
damage to their patient relationships, potential physical harm to their patients, and loss of their
professional reputations and franchises. Entry of an injunction, at most, might cause Comfort
Dental to suffer minor financial loss resulting from the cessation of its illegal activities, the
Comfort Dental Labs thereby being required, for the first time, to compete for business on the
basis of quality and cost with other dental laboratories (rather than being able to rely on a stream
of compulsory referrals). Although denial of an injunction could cause permanent, irreparable
harm to Plaintiffs, granting the injunction would cause Comfort Dental little if any harm that is
irreparable.
12
The balance of harms indisputably favors granting a preliminary injunction.

12
As Judge Krieger noted in Mason, any harm a party to a voided agreement suffers would be minimal. 516 F.
Supp. 2d at 1216.
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The public interest would be strongly served by preventing illegal or unlawful activities
and by promoting the public policies requiring independent medical judgment and
state-regulated sales of dental plans. A federal court has broad power to restrain acts which are
of the same type or class as unlawful acts which the court has found to have been committed or
whose commission in the future unless enjoined, may fairly be anticipated from the defendants
conduct in the past. N.L.R.B. v. Express Pub. Co., 312 U.S. 426, 435, (1941). Public policy,
with respect to the administration of the law, is that rule of law which declares that no one can
lawfully do that which tends to injure the public, or is detrimental to the public good. Russell v.
Courier Printing & Pub. Co., 95 P. 936, 938 (Colo. 1908). Preventing the enforcement of
Agreements that require illegal and/or unlawful actions would prevent actions that tend to injure
the public or are detrimental to the public good.
IV. CONCLUSION
Plaintiffs have established a likelihood of success on the merits and have shown they will
suffer immediate and irreparable harm from the continued enforcement of the Subfranchisor
Agreements. Therefore, the Court should issue a preliminary injunction.
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4818-6549-3529.8
Dated this 4th day of April, 2014.
Respectfully Submitted
By: /s/ Neil L. Arney
Neil L. Arney
KUTAK ROCK LLP
1901 California Street, Suite 3000
Denver, CO 80202
(303) 297-2400
Thomas J. Kenny, NE Bar #20022
Edward M. Fox, II, NE Bar #24601
KUTAK ROCK LLP
The Omaha Building
1650 Farnam Street
Omaha, NE 68102-2186
(402) 346-6000
Attorneys for Plaintiffs CDMO, INC. and
CDET, INC.
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4818-6549-3529.8
CERTIFICATE OF SERVICE
I hereby certify that on April 4, 2014 I electronically filed the foregoing with the Clerk of
the Court using the CM/ECF system and served such filing to the following email addresses:
William F. Jones, Esq,
MOYE WHITE LLP
16 Market Square 6th Floor
1400 16th Street
Denver CO 80202-1486
EMAIL: [email protected]
Attorney for Defendant
s/ Edna Slagle
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