(Updated at 2:10 p.m.): Santa Monica Patch confirmed the news about the temporary restraining order, and that the suit was filed in civic court in downtown Los Angeles—not the Santa Monica courthouse.

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(Updated Thursday at 7:24 a.m.): On Wednesday, in light of the lawsuit, Judge Robert H. O'Brien issued a temporary restraining order stopping the city from implementing its recent change to the municipal code, The Los Angeles Times reports.

Attorneys for the city have until Jan. 7 to prove to the judge why the preliminary injunction shouldn't be granted, according to the paper.

The Los Angeles Times also reports that the suit was filed by the Taxi Drivers Assn. of Santa Monica in civic court in downtown Los Angeles.

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Nearly 100 cab drivers gathered at the Santa Monica Courthouse on Tuesday morning as five Armenian-owned and operated Santa Monica taxi companies filed suit against the city, alleging ethnic discrimination and a violation of due process.

The lawsuit follows a recent change to the municipal code that would terminate the companies' rights to operate within the city, a response to the recommendation of a years-long City Council study of the local taxi industry. The study found that a franchising system, and a reduced number of cars and companies, would improve service.

Earlier this year, the council awarded franchises to five of the 13 companies that applied and capped the total number of taxis in Santa Monica at 300. Now, according to one of the lawyers representing the five companies, nearly 300 drivers are out of a job—most of them Armenian.

"We hope to enjoin the city from enforcing this discriminatory municipal code, which is completely and totally discriminatory to Armenian-Americans," said Tamar Arminak, a lawyer with Geragos and Geragos, the firm representing the five companies.

Arminak noted that although 80 percent of Santa Monica's cab drivers are Armenian, not a single Armenian-owned or operated company was awarded a franchise.

Kate Vernez, assistant to the city manager, said that the city has been anticipating this legal action.

"Given the holiday schedule, this procedural action is understandable," Vernez said.

On Wednesday, the taxi companies were granted a temporary restraining order on the municipal code change, but are seeking a permanent injunction on the grounds that the council "manufactured a selection system from franchise licenses" to discriminate against Armenian companies, according to the court summons.

"[The companies] were afforded no appellate rights, no review rights, no rights to even ask any questions," Arminak said.

A staff report from a Nov. 9 council meeting shows that correspondence between the selection committee and the applicants did occur, with at least two taxi companies receiving clarification memos on the criterion. But the president of plaintiff company VIP Yellow Cab, Elen Poghosyan, believes the council went back on its word.

"They were saying give priority to local companies, and they changed the rules," Poghosyan said, referring to the three L.A.-wide companies that were awarded franchises over her own local company. "We put our whole investment into [meeting the criteria]. They have to be responsible for that," Poghosyan said.

Companies were ranked based on a scoring system that also awarded points in categories such as business viability, computerized dispatch systems and sustainability, but the categories were not all weighted the same. Poghosyan said the different weights weren't made known until after the franchises were awarded.

"It's completely unfair," Poghosyan said. "You are making double [the non-local taxi companies'] jobs, but you are taking my job."

Agenda notes from the Nov. 9 City Council meeting say that council members were unaware of the race, ethnicity and nationality of the companies' owners and employees until after the selection process.

Vernez said she doesn't believe the city has anything to worry about. "The city did not discriminate in any way," she said. "[The process] was very transparent, and we're very comfortable with our legal position on this."