Batth et al v. Market 52, Inc. et al
Filing
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ORDER GRANTING plaintiffs' Motion for Ex Parte Temporary Restraining Order, document 3 . Hearing on Motion for Preliminary Injunction set for 11/15/2011 at 01:30 PM in Courtroom 2 (AWI) before Chief Judge Anthony W. Ishii with any response(s) to said motion due by 11/8/2011 at 10:00 AM and any reply to same due by 11/10/2011 at 10:00 AM; order signed by Chief Judge Anthony W. Ishii on 11/1/2011. (Rooney, M)
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IN THE UNITED STATES DISTRICT COURT FOR THE
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EASTERN DISTRICT OF CALIFORNIA
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Plaintiffs,
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v.
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MARKET 52, INC., a California
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corporation, JERALD D. DOWNS, and )
LYNDSEY C. DOWNS,
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Defendants.
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____________________________________)
CHARANJIT BATTH, and GAGAN
BATTH,
1:11-CV-1806 AWI SKO
ORDER ON PLAINTIFFS’
MOTION FOR EX PARTE
TEMPORARY RESTRAINING
ORDER
(Doc. No. 3)
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Before the Court is Plaintiffs’ ex parte motion for temporary restraining order (“TRO”)
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and for preliminary injunction against Defendant Market 52. Plaintiffs seek a TRO through the
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Perishable Agricultural Commodities Act (“PACA”).
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Rule 65 Framework
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Under Rule 65(b), a court may issue an ex parte temporary restraining order only if: (1) it
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clearly appears . . . that immediate and irreparable injury, loss, or damage will result to the
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applicant before the adverse party or that party's attorney can be heard in opposition, and (2) the
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applicant’s attorney certifies to the court in writing the efforts, if any, which have been made to
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give the notice and the reasons supporting the claim that notice should not be required. Fed. R.
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Civ. Pro. 65(b); Reno Air Racing Ass'n v. McCord, 452 F.3d 1126, 1130 (9th Cir. 2006). Rule
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65(b)’s requirements are “stringent,” and temporary restraining orders that are granted ex parte
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are to be “restricted to serving their underlying purpose of preserving the status quo and
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preventing irreparable harm just so long as is necessary to hold a hearing, and no longer.”
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Granny Goose Foods, Inc. v. Brotherhood of Teamsters, 415 U.S. 423, 438-39 (1974); McCord,
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452 F.3d at 1131.
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The substantive standard for granting a temporary restraining order is the same as the
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standard for entering a preliminary injunction. Bronco Wine Co. v. U.S. Dep't of Treasury, 997
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F.Supp. 1309, 1313 (E.D. Cal. 1996); Lockheed Missile & Space Co. v. Hughes Aircraft Co.,
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887 F.Supp. 1320, 1323 (N.D. Cal. 1995). A plaintiff seeking a preliminary injunction must
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establish: (1) that he is likely to succeed on the merits, (2) that he is likely to suffer irreparable
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harm in the absence of preliminary relief, (3) that the balance of equities tips in his favor, and (4)
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that an injunction is in the public interest. Winter v. Natural Res. Def. Council, Inc., 129 S.Ct.
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365, 374 (2008); Park Vill. Apt. Tenants Ass'n v. Mortimer Howard Trust, 636 F.3d 1150, 1160
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(9th Cir. 2011). “Injunctive relief . . . must be tailored to remedy the specific harm alleged.”
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Park Vill., 636 F.3d at 1160.
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Declaration of Gagan Batth
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Plaintiffs have submitted the declaration of Gagan Batth in support of their application
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for a TRO. In pertinent part, this declaration shows that: (1) Plaintiffs and Market 52 entered
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into a contract on August 19, 2011, whereby Plaintiffs would provide Market 52 with Flame
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variety table grapes at $2.75 per box; (2) payment to Plaintiffs were due on September 23 and
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October 2, 2011; (3) Market 52 took possession of the grapes on September 15, 2011; (4)
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Defendants had an outstanding balance of $178,936.25; (5) Market 52 did not make the
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September 23 or October 2 payments; (6) Plaintiffs made inquiries between October 7 and
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October 12 regarding payment and was told that Market 52 was courting new investors, was
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experiencing a “short term glitch,” and was tightening control measures to bring up cash
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accounts so that accounts such as Plaintiffs could be paid; (7) a temporary restraining order has
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been issued against Market 52 under PACA;1 (8) Market 52 have never disputed the debt owed to
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The TRO was issued on October 7, 2011, by this Court in case number 1:11-cv-1660 AW I DLB.
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Plaintiffs in any way; (9) Plaintiffs’ attorney sent Market 52 notice under 7 U.S.C. § 499e(c) on
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October 20, 2011, to preserve PACA trust benefits; and (10) Market 52 operates under a valid
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PACA license that was issued by the U.S. Department of Agriculture on July 29, 2011. See
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Court’s Docket Doc. No. 5.
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Resolution
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The Court will grant Plaintiffs’ application for an ex parte TRO. First, Table grapes
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qualify as a‘perishable agricultural commodity’ as defined by PACA. 7 U.S.C. § 499a(4)(A)
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(defining the term ‘perishable agricultural commodity’ as “Fresh fruits and fresh vegetables of
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every kind and character.”). Market 52 is a “dealer” under PACA since it holds a license from
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the Agriculture Department. See 7 U.S.C. §499a(6); Court’s Docket Doc. No. 5 at Ex. D.
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Plaintiffs sent a notice of intent to preserve PACA trust benefits to Market 52 on October 20,
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2011, and the representation is that Market 52 does not dispute that the debt is owed. See 7
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U.S.C. § 499e(c); Court’s Docket Doc. No. 5 at Ex. C. Thus, Plaintiffs have shown a high
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likelihood of success.
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With respect to irreparable harm, Plaintiffs are owed $178,936.25. Plaintiffs have been
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told by Market 52's principals that Market 52 is seeking new investors, is trying to take steps to
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bring up cash flow, and a previous TRO against Market 52 has been entered. Further, Plaintiffs’
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counsel has filed a certification that argues that notice to Defendants would allow Market 52 to
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dissipate the PACA trust. The Court is satisfied that Plaintiffs are threatened with irreparable
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harm in that PACA trust monies are in danger of dissipation. See Tanimura & Antle, Inc. v.
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Packed Fresh Produce, Inc., 222 F.3d 132, 140-41 (3rd Cir. 2000).
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Based on the evidence presented, the Court finds that Plaintiffs have a high likelihood of
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success on the merits and will likely suffer immediate irreparable injury unless a temporary
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restraining order is granted. Issuance of a TRO is therefore appropriate.
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Accordingly, IT IS HEREBY ORDERED that:
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Plaintiffs’ motion for an ex parte temporary restraining order is GRANTED;
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Plaintiffs shall serve a copy of the Complaint, Motion for Temporary Restraining Order,
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Motion for Preliminary Injunction, this Order, and all associated filings by personal
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service, including by facsimile transmission or federal express, on or before November 3,
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2011, at 2:30 PM;
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3.
Defendants shall file any and all responsive papers on or before November 8, 2011 at
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10:00 AM;
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4.
Plaintiffs may file reply papers on or before November 10, 2011, at 10:00 AM;
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A hearing on Plaintiffs’ motion for preliminary injunction will be held on November 15,
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2011, at 1:30 PM in Courtroom Two;
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6.
Defendants may apply to the Court for modification or dissolution of the instant Order
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upon two (2) days’ notice to Plaintiffs, or upon such shorter notice as the court may
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allow;
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7.
The $178,936.25 in PACA trust assets belonging to Plaintiffs and in the possession of the
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Defendants will serve as Plaintiffs’ security for this temporary restraining order as
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required by Fed. Rule Civ. Proc. 65(c);
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8.
Defendant Market 52, its officers, agents, factors, subsidiaries, assigns, and banking
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institutions (specifically including Defendants Jerald D. Downs and Lyndsey C. Downs)
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who receive actual notice of this Order are temporarily restrained and enjoined from
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dissipating, paying, transferring, assigning, or selling PACA trust assets up to a total of
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$178,936.25 whether held as receivables, cash on hand, hard assets, within bank
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accounts, or held in any other tangible or intangible form until further order of this Court;.
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If the Defendants pay Plaintiffs the sum of $178,936.25, Plaintiffs are required to
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immediately make a filing informing the Court of this fact so the temporary restraining
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order can be dissolved and the hearing vacated; and
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10.
This temporary restraining order is entered on November 1, 2011, at 2:30 PM.
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IT IS SO ORDERED.
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Dated:
0m8i78
November 1, 2011
CHIEF UNITED STATES DISTRICT JUDGE
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