The opinion of the court was delivered by: Hon. Jeffrey T. Miller United States District Judge
ORDER DENYING MOTION FOR TEMPORARY RESTRAINING
On December 18, 2007 Plaintiffs, two Mexican labor unions, commenced an action against Defendant Credit Managers Association of California ("CMA") alleging breach of contract and seeking accounting and equitable relief. (Doc. No. 1.) Pending before the Court is Plaintiffs' motion for a Temporary Restraining Order ("TRO") to restrain CMA from paying out $896,389.81 to certain creditors, to a temporary receiver appointed by a California Family Law Court, or to anyone else that may have a claim to the funds. The Court decides the matter on the papers submitted and without oral argument. See S.D. Cal. Civ. R. 7.1(d.1). For the following reasons, the Court DENIES Plaintiffs' motion for a TRO.
Plaintiffs are two Mexican labor unions whose constituent members are the employees of two Mexican companies, Alissimo S.A. de C.V. ("Alissimo") and Resinas Laguna, S.A. de C.V. ("Resinas"). (Mot. for TRO 2-4.) Both Alissimo and Resinas did substantial business with two American companies, FlexTrim California, Inc. and FlexTrim North Carolina, Inc. (collectively, "FlexTrim"). (Id.) Plaintiffs allege that FlexTrim owes Alissimo and Resinas $896,389.81 for their products and/or services. (Mot. for TRO 3.) According to Plaintiffs, FlexTrim is now insolvent.*fn1 (Mot. for TRO 2.)
Allen and Mary Kay Jones are two formerly married individuals currently involved in property dissolution proceedings in California Family Law Court ("California Court"). (Id. 3.) The California Court appointed Dennis Murphy ("Murphy") temporary receiver of certain entities and affiliates which were alleged to form part of the Jones' marital estate. Allen Jones is for purposes of this litigation the owner of FlexTrim. (Richman Decl. Ex. F 2-3.)
Defendant CMA is a non-profit corporation which appears to assist companies, like FlexTrim, in managing assets and satisfying creditors. (Richman Decl. Ex. A.) On or about May 21, 2007 FlexTrim assigned all its business assets to CMA for liquidation and payment of creditor claims. (Mot. for TRO 2.)
On May 22, 2007 Plaintiff alleges that Alissimo and Resinas were joined in the marital dissolution proceedings "without notice, opportunity to object, or any due process." (Mot. for TRO 3.) Apparently, Alissimo's and Resinas's bank accounts were frozen and their assets seized.*fn2 (Id.) It is unclear when Alissimo and Resinas learned about the asset freeze and seizure, but it appears to be shortly after the May, 22 2007 order. (Jose Corral Decl. ¶ 15; Francisco Elorza Decl. ¶ 15.) Although Plaintiffs' motion fails to connect the dots, Alissimo/Resinas both seem to insinuate that they are separately owned companies (i.e., not part of the marital estate) and the California court should not have been put them under the stewardship of receiver Murphy. (Jose Corral Decl. ¶ 11-14; Francisco Elorza Decl. ¶ 12-14.)
On July 6 and 13, 2007 Alissimo and Resinas made respective claims to CMA for the monies owed to them by FlexTrim. (Richman Decl. Ex. C.) Plaintiffs allege that these monies have not yet been paid. (Mot. for TRO 5.)
Plaintiffs, the two Mexican labor unions, are allegedly owed significant sums for unpaid wages and benefits by Alissimo and Resinas. On December 13, 2007 Plaintiffs (litigating in the state labor court of Baja California in Tijuana [hereinafter, "Mexican Court]) received an order temporarily freezing both companies' assets in order to satisfy the payment of wages. (Mot. for TRO 4.) According to Plaintiffs, under the Mexican Constitution and Labor Code employees have preferential rights over all other creditors. (Id.) However, it is unclear whether Alissimo and/or Resinas are actually insolvent. (See Quijano Decl. ¶ 6.) Presumably, Plaintiffs assume they have standing to pursue this suit because they should be able to "step into the shoes" of their creditor-employers and recoup assets from CMA.
On December 19, 2007 Plaintiffs moved for a TRO because on December 21, 2007 the California Court is scheduled to hear receiver Murphy's motion to approve a "letter agreement" between CMA and Murphy to distribute the marital estate.*fn3 (Mot. for TRO 5.) Plaintiffs fear that the letter agreement's terms do not satisfy Alissimo's or Resinas's open claims and shifts the balance of FlexTrim's assets (assigned to CMA) to Murphy. (Id.) Plaintiffs fear that if Alissimo/Resinas do not get paid by CMA, Alissimo/Resinas will be unable to pay Plaintiffs. (Id.) Thus, Plaintiffs seek an order restraining CMA from paying $896,389.81 to FlexTrim creditors, receiver Murphy, or anyone else claiming an interest. On December 20, 2007-after Plaintiffs provided an extremely brief notice period-Defendant CMA opposed the TRO.
The Federal Rules of Civil Procedure outline the procedures a federal court must follow when deciding whether to grant a temporary restraining order. See Fed. R. Civ. P. 65. The standard for granting a temporary restraining order is the same as the standard for entering a preliminary injunction. Bronco Wine Co. v. U.S. Dep't of Treasury, 997 F. Supp. 1309, 1313 (E.D. Cal. 1996); Franklin v. Scribner, Civil No. 07-0438 BTM (LSP), 2007 WL 1491100, at *3 (S.D. Cal. May 21, ...