## Facts

- Denver-area merchants bought and resold precious metals, coins, currency, jewelry, and similar goods, typically arranging near-immediate resale through teletype or other instantaneous communications.
- Their pricing depended on the then-prevailing market value of metal content, which could fluctuate rapidly.
- Under the trade rules governing these transactions, the merchants had to deliver the purchased items to the resale purchaser within 48 hours of the sales commitment.
- Colorado enacted a “valuable articles” statute regulating purchases of certain items to help law enforcement trace stolen property.
- The statute imposed, among other obligations, a 30-day holding period for certain purchases, detailed recordkeeping, and availability of records to law enforcement upon request.
- The merchants claimed the statutory requirements would disrupt their 48-hour turnover model, increase market-risk exposure, and effectively force them out of business.
- They challenged the statute as unconstitutional (including claims of vagueness, unlawful warrantless searches, and interference with federally regulated commerce).
- The merchants sought a preliminary injunction to stop enforcement during litigation; the trial court denied the motion.
- The denial was appealed; the appellate review concerned only whether denying interim relief was an abuse of discretion, not the statute’s ultimate constitutionality.

## Issues

1. Whether the district court abused its discretion in denying a preliminary injunction to enjoin enforcement of the valuable-articles statute during the constitutional challenge.

## Decision

- The Colorado Supreme Court affirmed the denial of a preliminary injunction.
- The court held the trial court did not abuse its discretion in finding the merchants failed to show a sufficient likelihood of success on the merits to justify enjoining enforcement of a presumptively valid statute.
- The court noted that preliminary injunctions are extraordinary, especially when they would suspend a legislative enactment adopted under the state’s police power.
- Although it affirmed the injunction ruling, the court disapproved the trial court’s refusal to set the case for a prompt trial on the merits while the interlocutory appeal was pending.

## Legal Principles

- A preliminary injunction is an extraordinary remedy; courts should exercise restraint, particularly where relief would block enforcement of a statute.
- Statutes are presumed constitutional; a party challenging a statute bears a heavy burden and must establish unconstitutionality beyond a reasonable doubt.
- To obtain a preliminary injunction, the movant must show, at minimum, a reasonable probability of success on the merits and a threat of immediate and irreparable injury for which there is no adequate remedy at law; courts also weigh equities and the public interest.
- Even where the movant shows serious economic harm, a court may deny interim relief if the likelihood of prevailing on a constitutional challenge has not been sufficiently demonstrated at the preliminary stage.
- Denial of a preliminary injunction is reviewed for abuse of discretion, not as a final adjudication of the underlying constitutional claims.

## Conclusion

The court refused to suspend enforcement of a newly enacted regulatory statute by preliminary injunction because the challengers did not make a sufficiently strong showing that they were likely to prove the statute unconstitutional beyond a reasonable doubt, while emphasizing that the constitutional challenge should proceed promptly to a full merits hearing.


Rathke v. MacFarlane, 648 P.2d 648 (Colo. 1982)