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Charanjit Batth, and Gagan Batth v. Market 52

November 1, 2011

CHARANJIT BATTH, AND GAGAN BATTH, PLAINTIFFS,
v.
MARKET 52, INC., A CALIFORNIA CORPORATION, JERALD D. DOWNS, AND LYNDSEY C. DOWNS,
DEFENDANTS.



ORDER ON PLAINTIFFS' MOTION FOR EX PARTE TEMPORARY RESTRAINING ORDER (Doc. No. 3)

Before the Court is Plaintiffs' ex parte motion for temporary restraining order ("TRO") and for preliminary injunction against Defendant Market 52. Plaintiffs seek a TRO through the Perishable Agricultural Commodities Act ("PACA").

Rule 65 Framework

Under Rule 65(b), a court may issue an ex parte temporary restraining order only if: (1) it clearly appears . . . that immediate and irreparable injury, loss, or damage will result to the applicant before the adverse party or that party's attorney can be heard in opposition, and (2) the applicant's attorney certifies to the court in writing the efforts, if any, which have been made to give the notice and the reasons supporting the claim that notice should not be required. Fed. R. Civ. Pro. 65(b); Reno Air Racing Ass'n v. McCord, 452 F.3d 1126, 1130 (9th Cir. 2006). Rule 65(b)'s requirements are "stringent," and temporary restraining orders that are granted ex parte are to be "restricted to serving their underlying purpose of preserving the status quo and preventing irreparable harm just so long as is necessary to hold a hearing, and no longer." Granny Goose Foods, Inc. v. Brotherhood of Teamsters, 415 U.S. 423, 438-39 (1974); McCord, 452 F.3d at 1131.

The substantive 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); Lockheed Missile & Space Co. v. Hughes Aircraft Co., 887 F.Supp. 1320, 1323 (N.D. Cal. 1995). A plaintiff seeking a preliminary injunction must establish: (1) that he is likely to succeed on the merits, (2) that he is likely to suffer irreparable harm in the absence of preliminary relief, (3) that the balance of equities tips in his favor, and (4) that an injunction is in the public interest. Winter v. Natural Res. Def. Council, Inc., 129 S.Ct. 365, 374 (2008); Park Vill. Apt. Tenants Ass'n v. Mortimer Howard Trust, 636 F.3d 1150, 1160 (9th Cir. 2011). "Injunctive relief . . . must be tailored to remedy the specific harm alleged." Park Vill., 636 F.3d at 1160.

Declaration of Gagan Batth

Plaintiffs have submitted the declaration of Gagan Batth in support of their application for a TRO. In pertinent part, this declaration shows that: (1) Plaintiffs and Market 52 entered into a contract on August 19, 2011, whereby Plaintiffs would provide Market 52 with Flame variety table grapes at $2.75 per box; (2) payment to Plaintiffs were due on September 23 and October 2, 2011; (3) Market 52 took possession of the grapes on September 15, 2011; (4) Defendants had an outstanding balance of $178,936.25; (5) Market 52 did not make the September 23 or October 2 payments; (6) Plaintiffs made inquiries between October 7 and October 12 regarding payment and was told that Market 52 was courting new investors, was experiencing a "short term glitch," and was tightening control measures to bring up cash accounts so that accounts such as Plaintiffs could be paid; (7) a temporary restraining order has been issued against Market 52 under PACA;*fn1 (8) Market 52 have never disputed the debt owed to Plaintiffs in any way; (9) Plaintiffs' attorney sent Market 52 notice under 7 U.S.C. § 499e(c) on October 20, 2011, to preserve PACA trust benefits; and (10) Market 52 operates under a valid PACA license that was issued by the U.S. Department of Agriculture on July 29, 2011. See Court's Docket Doc. No. 5.

Resolution

The Court will grant Plaintiffs' application for an ex parte TRO. First, Table grapes qualify as a'perishable agricultural commodity' as defined by PACA. 7 U.S.C. § 499a(4)(A) (defining the term 'perishable agricultural commodity' as "Fresh fruits and fresh vegetables of every kind and character."). Market 52 is a "dealer" under PACA since it holds a license from the Agriculture Department. See 7 U.S.C. §499a(6); Court's Docket Doc. No. 5 at Ex. D. Plaintiffs sent a notice of intent to preserve PACA trust benefits to Market 52 on October 20, 2011, and the representation is that Market 52 does not dispute that the debt is owed. See 7 U.S.C. § 499e(c); Court's Docket Doc. No. 5 at Ex. C. Thus, Plaintiffs have shown a high likelihood of success.

With respect to irreparable harm, Plaintiffs are owed $178,936.25. Plaintiffs have been told by Market 52's principals that Market 52 is seeking new investors, is trying to take steps to bring up cash flow, and a previous TRO against Market 52 has been entered. Further, Plaintiffs' counsel has filed a certification that argues that notice to Defendants would allow Market 52 to dissipate the PACA trust. The Court is satisfied that Plaintiffs are threatened with irreparable harm in that PACA trust monies are in danger of dissipation. See Tanimura & Antle, Inc. v. Packed Fresh Produce, Inc., 222 F.3d 132, 140-41 (3rd Cir. 2000).

Based on the evidence presented, the Court finds that Plaintiffs have a high likelihood of success on the merits and will likely suffer immediate irreparable injury unless a temporary restraining order is granted. Issuance of a TRO is therefore appropriate.

Accordingly, IT IS HEREBY ORDERED that:

1. Plaintiffs' motion for an ex parte temporary restraining order is GRANTED;

2. Plaintiffs shall serve a copy of the Complaint, Motion for Temporary Restraining Order, Motion for Preliminary Injunction, this Order, and all associated filings by personal service, including by facsimile transmission or ...


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