Inn Foods, Inc. v. White Oak Frozen Foods, LLC et al

Filing 13

ORDER Granting 7 Plaintiff's Exparte Application for TEMPORARY RESTRAINING ORDER, signed by Chief Judge Anthony W. Ishii on 4/18/2012. (Defendants shall file and serve an Opposition, if any, to Plaintiffs Motion for Preliminary Injunction on or before 4/26/2012, at 9:00 AM (PDT). Plaintiff shall file and serve a Reply to Defendants Opposition, if any, on or before 4/30/2012, at 1:00 PM (PDT). Hearing on Plaintiff's Motion for Preliminary Injunction is set for 5/1/2012 at 09:00 AM in Courtroom 2 (AWI) before Chief Judge Anthony W. Ishii.) (Gaumnitz, R)

1
2
3
4
5
IN THE UNITED STATES DISTRICT COURT FOR THE
6
EASTERN DISTRICT OF CALIFORNIA
7
8
9
10
11
12
13
14
15

INN FOODS, INC.,

)
)
Plaintiff,
)
)
v.
)
)
WHITE OAK FROZEN FOODS, LLC; )
DANFORTH R. WILKINSON;
)
HAROLD L. ARCHIBALD; PATRICK )
CERUTTI; and CERUTTI BROS., INC., )
)
Defendants.
)
____________________________________)

1:12-CV-00602 AWI DLB
ORDER GRANTING
PLAINTIFF’S EX PARTE
APPLICATION FOR
TEMPORARY RESTRAINING
ORDER
(Doc. No. 7)

16
17

Before this Court is Inn Foods, Inc.’s Ex Parte Motion for Temporary Restraining Order

18
19
20

pursuant to Rule 65(b) of the Federal Rules of Civil Procedure.
Pursuant to Rule 65(b), a temporary restraining order may be granted without notice to the

21

adverse party only if: (1) it clearly appears from specific facts shown by declaration or verified

22

complaint that immediate and irreparable injury, loss or damage will result before the adverse party

23

can be heard in opposition, and (2) the applicant's attorney certifies the reasons that notice should

24

not be required.

25

In this case, it clearly appears from the Declaration of Ronald E. Marker, Chief Financial

26

Officer of Inn Foods, Inc. (“Inn Foods”), that Inn Foods is a produce supplier and trust creditor of

27
28

Defendant, White Oak Frozen Foods LLC, under Section 5(c) of the Perishable Agricultural

1

Commodities Act (“PACA”), 7 U.S.C. §499e(c), and has not been paid, as required by PACA, for

2
3
4

produce in the total amount of $60,828.48 supplied to said Defendant. It is also clear from the same
Declaration and the certification of counsel that White Oak Frozen Foods LLC is in severe financial

5

jeopardy and the PACA trust assets are being dissipated or threatened with dissipation and that said

6

Defendant is not or may not be in a position to pay Inn Foods’ claim, thereby warranting the relief

7

requested by Inn Foods. See Frio Ice, S.A. v. Sunfruit, Inc., 918 F.2d 154 (11th Cir. 1990); JSG

8

Trading Corp. v. Tray-Wrap, Inc., 917 F.2d 75 (2d Cir. 1990).

9

On the basis of the pleadings, Declaration, and other submissions Inn Foods has filed in this

10

matter, Inn Foods will suffer immediate and irreparable injury due to said Defendant’s dissipation

11

of Inn Foods’ beneficial interest in the statutory trust created pursuant to 7 U.S.C. §499e(c), and that

12
such dissipation will continue in the absence of injunctive relief. Therefore, the Court is of the
13
14

opinion that a Temporary Restraining Order should be issued.

15

If notice is given to Defendants of the pendency of this motion, PACA trust assets will be

16

further threatened with dissipation before the motion is heard. As noted in the legislative history of

17

PACA, once dissipation has occurred, recovery of trust assets is all but impossible. See H.R. Rep.

18

No. 543, 98th Cong., 2d Sess. 4 (1983), reprinted in 1984 U.S. Code & Admin. News 405, 411; see

19

also J.R. Brooks & Son, Inc. v. Norman's Country Market, Inc., 98 B.R. 47 (Bkrtcy. N.D.Fla. 1989).

20

Entry of this Order without notice assures retention of the PACA trust assets under the control of this

21
22

Court, which is specifically vested with jurisdiction over the trust. See 7 U.S.C. §499e(c)(5). In
accord with Rule 65(b)(1)(B) of the Federal Rules of Civil Procedure, Inn Foods’ attorney has

23
24
25
26

certified why notice should not be required.
Based on the foregoing, the Court finds that Inn Foods will suffer immediate irreparable
injury in the form of loss of PACA trust assets unless this order is granted without notice.

27
28

2

1

Therefore, it is ORDERED that:

2
3
4

1. Defendant White Oak Frozen Foods LLC, its agents, officers, subsidiaries, assigns, and
others acting in concert or participation with them (including Defendants Danforth R. Wilkinson,

5

Harold L. Archibald, and Patrick Cerutti) who receive actual notice of this Order are temporarily

6

restrained and enjoined from dissipating, paying, transferring, assigning or selling PACA trust

7

assets (defined here and in all other parts of this Order as the proceeds of any or all existing or

8

future inventories of food or other products derived from perishable, including frozen,

9

agricultural commodities, and/or receipt of payment for such products sold prior to the date of

10
11

the issuance of this Order), up to a total of $60,828.48 whether held as receivables, cash on hand,
hard assets, within bank accounts, or held in any other tangible or intangible form.

12
2. The $60,828.48 in PACA trust assets belonging to Plaintiff and in the possession of the
13
14
15

Defendant will serve as Plaintiff’s security for this injunction as required by Rule 65(c) of the
Federal Rules of Civil Procedure.

16

3. This Temporary Restraining Order is entered on April 18, 2012, at 9:40 AM.

17

4. Plaintiff shall serve a copy of this Order, the Motion for Temporary Restraining Order

18

and associated filings, and the Motion for Preliminary Injunction and associated filings by

19

personal service, including by facsimile transmission or Federal Express, on or before April 20,

20

2012. Such service shall be deemed good and sufficient.

21
22

5. Defendants may apply to the Court for modification or dissolution of the instant Order
upon two (2) days’ notice to Plaintiff, or upon such shorter notice as the court may allow.

23
24
25

6. A hearing on Plaintiff’s Motion for Preliminary Injunction is set for May 1, 2012, at
9:00 AM in Courtroom Two.

26
27
28

3

1

7. Defendants shall file and serve an Opposition, if any, to Plaintiff’s Motion for

2
3
4
5

Preliminary Injunction on or before April 26, 2012, at 9:00 AM (PDT). Plaintiff shall file and
serve a Reply to Defendants’ Opposition, if any, on or before April 30, 2012, at 1:00 PM (PDT).

IT IS SO ORDERED.

6
7

Dated:
0m8i78

April 18, 2012
CHIEF UNITED STATES DISTRICT JUDGE

8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

4