Commercial – Rental company denied TRO in dispute with Norfolk Airport Authority

Where a car rental company was unlikely to prevail on its claims that an airport authority was terminating its contact for unlawful reasons, its second motion for a temporary restraining order was denied.

Background

Plaintiff American Rent-A-Car asks the Court a second time for a temporary restraining order, or TRO, against defendant Norfolk Airport Authority, based on the theory that the defendant is relying on a pretext to terminate plaintiff’s contract, when its real reason is that plaintiff’s owner is Arab.

The new motion for a TRO relies exclusively on Counts Two and Five of the amended complaint. In Count Two, plaintiff seeks an injunction against the airport terminating plaintiff’s contract to operate at the Norfolk airport, as well as judgment declaring that (1) the defendant waived the insurance requirements, (2) the insurance requirements were impossible to perform, (3) the defendant waived the bond requirement, and (4) the liquidated damages the defendant seeks to collect are an illegal penalty.

Count Five asserts the defendant breached nondiscrimination and civil rights provisions in the contract, and an implied covenant of good faith and fair dealing, by using a pretext to oust plaintiff’s based on its owner’s ethnicity.

Likelihood of success

In denying the first motion for a TRO, the court explained that plaintiff did not show it is likely to prove the defendant waived the insurance requirement or that the insurance requirement was legally impossible to perform. That has not changed. Now, by alleging additional grounds the defendant relies on to terminate the contract, plaintiff creates an even tougher row for itself to hoe.

First, plaintiff claims the defendant waived the bond requirement, either implicitly by failing to enforce it earlier, or explicitly in a separate promise that conflicts with the written contract. Proving an implied waiver requires clear and convincing evidence, so mere nonenforcement is not enough. Here, the best additional evidence plaintiff points to is an alleged promise that it would not need to pay the bond until a new rental car facility is completed.

But plaintiff will not be able to rely on parol evidence to prove an implied waiver, made at the time the agreement was formed, that conflicts with the express provisions of the written contract. And for the same reason, plaintiff would not be permitted to rely on the alleged explicit waiver independently. Therefore, on the facts before the court at this juncture, plaintiff does not show it is likely to succeed on its theory regarding the bond requirement.

Plaintiff also contends the liquidated damages provision the defendant seeks to enforce is an unenforceable penalty, “because it is untethered to any reasoned estimate of actual harm,” and damages associated with failure to pay the bond are “not hard to calculate,” because the bond “had a specific value.” But plaintiff puts on no evidence—in the verified amended complaint or elsewhere—to prove that the liquidated damages bear no relationship to the defendant’s actual damages.
Moreover, plaintiff’s argument that the value of the defendant’s harm is necessarily equal to the value of the bond is unpersuasive, because the contract provides for liquidated damages for many types of breaches, not just failure to pay the bond. For these reasons, plaintiff does not demonstrate a likelihood of success on its liquidated damages theory either.
As to Count Five, plaintiff likewise does not demonstrate that it is likely to prevail on any of its theories about the defendant “manufacturing” a pretext to oust American. Plaintiff admits the conduct the defendant claims resulted in the default. Thus, plaintiff’s claims rely on the theories of excuse discussed above. And at this juncture, those theories appear tenuous.

The amended complaint also asserts that plaintiff’s appeal of the default notice was denied so quickly as to suggest that the decision was predetermined. While that allegation does support an inference that the cited reasons for terminating plaintiff’s contract were pretextual, it is not enough to swing the first factor in plaintiff’s favor

Plaintiff’s second motion for TRO denied.

American Rent-A-Car v. Norfolk Airport Authority, Case No. 2:26-cv-643, July 6, 2026. EDVA at Norfolk (Walker). VLW 026-3-294. 6 pp.

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