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F.T. Produce, Inc. D/B/A Family Tree v. Agwa

January 21, 2011

F.T. PRODUCE, INC. D/B/A FAMILY TREE PRODUCE, PLAINTIFF,
v.
AGWA, INC. D/B/A NORTH PARK CHULA VISTA; JAMIL A. NEHME; SHELDEN J. NEHME; ROSETTE
J. SOWELL, DEFENDANTS.



The opinion of the court was delivered by: Honorable Janis L. SammartinoUnited States District Judge

ORDER: (1) GRANTING TEMPORARY RESTRAINING ORDER WITHOUT NOTICE; (2) SETTING HEARING ON PLAINTIFF'S EX PARTE APPLICATION FOR PRELIMINARY INJUNCTION PRODUCE (Doc. No. 4)

Presently before the Court is Plaintiff's ex parte application for a temporary restraining order (TRO) without notice and for a preliminary injunction hearing. (Doc. No. 4.) For the reasons stated herein, Plaintiff's application is GRANTED.

BACKGROUND

Plaintiff is a California corporation "engaged in the business of buying and selling wholesale quantities of perishable agricultural commodities . . . in interstate commerce." (Doc. No. 1 (Compl.)

¶ 3.) Defendants are a California limited liability corporation "engaged in the business of buying wholesale quantities of produce in interstate commerce" and its officers. (Id. at ¶¶ 4(a), (b).) According to Plaintiff, between November 6, 2010 and December 18, 2010, Plaintiff sold and delivered to Defendants, in interstate commerce, wholesale amounts of produce in the amount of $66,425.33. (Id. at ¶ 6; Doc. No. 4-2 (Guzman Decl. ISO Appl.) ¶ 7.) Plaintiff alleges that the entire amount remains outstanding. (Compl. ¶ 6.) Plaintiff further alleges that, in response to a demand letter, Defendants advised that they are unable to pay the $66,425.33 owed because of cash flow problems. (Guzman Decl. ISO Appl. ¶ 10.) Defendant Jamil Nehme advised Plaintiff's president that "the only way he could pay [Plaintiff] is if [Plaintiff] agreed to allow him to pay the debt off over" one year. (Id.) Plaintiff's president informed Mr. Nehme that the proposed payment schedule "was not acceptable and demanded full payment." (Id.)

LEGAL STANDARD

TROs are governed by the same standard applicable to preliminary injunctions. See New Motor Vehicle Bd. of Cal. v. Orrin W. Fox Co., 434 U.S. 1345, 1347 n.2 (1977) (Rehnquist, J.). "A plaintiff seeking a preliminary injunction must establish that he is likely to succeed on the merits, that he is likely to suffer irreparable harm in the absence of preliminary relief, that the balance of equities tips in his favor, and that an injunction is in the public interest." Winter v. Natural Res. Def. Council, Inc. (NRDC), - U.S. -, 129 S. Ct. 365, 374 (2008) (citing Munaf v. Geren, 553 U.S. 674, 128 S. Ct. 2207, 2218--19 (2008)); see also Am. Trucking Ass'ns, Inc. v. City of L.A., 559 F.3d 1046, 1052 (9th Cir. 2009). This is an "extraordinary remedy that may only be awarded upon a clear showing that the plaintiff is entitled to such relief." NRDC, 129 S.Ct. at 376. This "clear showing" requires Plaintiff to show more than a mere "possibility" of irreparable harm, but instead he must "demonstrate that irreparable injury is likely in the absence of an injunction." Id. at 375 (emphasis in original); Am. Trucking Ass'ns, 559 F.3d at 1052.

When a plaintiff has not provided notice of her application to the defendant, Federal Rule of Civil Procedure 65(b)(1) imposes additional requirements prior to the issuance of a TRO:

The court may issue a temporary restraining order without written or oral notice to the adverse party or its attorney only if: (A) specific facts in an affidavit or a verified complaint clearly show that immediate and irreparable injury, loss, or damage will result to the movant before the adverse party can be heard in opposition; and (B) the movant's attorney certifies in writing any efforts made to give notice and the reasons why it should not be required.

Fed. R. Civ. P. 65(b)(1). "The stringent restrictions imposed . . . by Rule 65[] on the availability of ex parte temporary restraining orders reflect the fact that our entire jurisprudence runs counter to the notion of court action taken before reasonable notice and an opportunity to be heard has been granted both sides of a dispute." Granny Goose Foods, Inc. v. Bhd. of Teamsters, 415 U.S. 423, 438--39 (1974) (footnote omitted).

Accordingly, "courts have recognized very few circumstances justifying the issuance of an ex parte TRO." Reno Air Racing Ass'n v. McCord, 452 F.3d 1126, 1131 (9th Cir. 2006). "For example, an ex parte TRO may be appropriate 'where notice to the adverse party is impossible either because the identity of the adverse party is unknown or because a known party cannot be located in time for a hearing.'" Id. (quoting Am. Can Co. v. Mansukhani, 742 F.2d 314, 322 (7th Cir. 1984)). Alternatively, "[i]n cases where notice could have been given to the adverse party, courts have recognized a 'very narrow band of cases in which ex parte orders are proper because notice to the defendant would render fruitless the further prosecution of the action.'" Id. (quoting Am. Can Co., 742

F.3d at 322).

ANALYSIS

Plaintiff contends that Defendants are in violation of their statutory duties under the Perishable Agricultural Commodities Act (PACA), 7 U.S.C. ยงยง 499a--499t. (See generally Compl.) Plaintiff further contends that a TRO is necessary to prevent dissipation of PACA trust assets pending a ...


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