Cooperative Regions of Organic Producer Pools v. Stueve's Certified Organic Dairy et al

Filing 10

ORDER signed by Judge Garland E. Burrell, Jr. on 7/25/2014 ORDERING 7 that Plaintiff's Motion for an Ex Parte Temporary Restraining Order is DENIED. (Reader, L)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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COOPERATIVE REGIONS OF
ORGANIC PRODUCER POOLS, a
Wisconsin Stock Cooperative,
Plaintiff,

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No. 1:14-cv-01123 GEB SKO

ORDER DENYING MOTION FOR AN EX
PARTE TEMPORARY RESTRAINING
ORDER

v.
STUEVE’S CERTIFIED ORGANIC
DAIRY, a California business
entity of unknown form; LLOYD
L. STUEVE, individually and
doing business as Stueve’s
Certified Organic Dairy;
GAGE STUEVE, individually and
doing business as Stueve’s
Certified Organic Dairy; and
DOES 1 through 50, inclusive,
Defendants.

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Plaintiff moves ex parte for a temporary restraining

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order

(“TRO”)

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section[] . . . 54265, and alternatively, pursuant to Federal

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Rule

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. . .

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requiring Defendants to deliver all the organic milk they produce

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to

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contract. (TRO i:16-17, 6-9, ECF No. 7.)

of

Civil

from

under

Procedure

selling

[Plaintiff]”

“California

as

Food

[(‘Rule’)]

organic

milk

prescribed
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in

and

65”
to
an

Agriculture

“enjoining

any

third

Defendants

parties

agricultural

Code

and

marketing

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A threshold issue is whether section 54265 or Rule

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65 governs Plaintiff’s TRO motion. “When a state law directly

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conflicts with a federal rule of civil procedure, courts apply

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the test set forth in Hanna v. Plumer, 380 U.S. 460, 460 (1965).”

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Kane v. Chobani, Inc., No. 12-cv-02425-LHK, 2013 WL 3776172, at

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*2 (N.D. Cal. July 15, 2013). “[Under Hanna] courts apply ‘the

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Federal

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Committee, [the Supreme Court], and Congress erred in their prima

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facie judgment that the Rule is within the scope of the Rules

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Enabling Act and the Constitution.” Id. (quoting Hanna, 380 U.S.

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at

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prescribes: “Pending the adjudication of [a breach of agriculture

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marketing contract] action and upon filing a verified complaint

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which shows the breach or threatened breach, and upon filing a

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sufficient bond, [a movant] shall be entitled to a [TRO] . . . .”

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This statute conflicts with Rule 65(b), which prescribes: “The

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court

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affidavit or verified complaint clearly show that immediate and

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irreparable injury will result to the movant before the adverse

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party

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“[c]ourts have held that [] Rule 65 is both constitutional and

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within the scope of the Rules Enabling Act,” Rule 65 applies.

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Chobani, 2013 WL 3776172 at *3.

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Rule,

471).

may

can

and

can

California

issue

be

The

a

refuse

Food

[TRO]

heard

in

following

to

and

do

only

Agriculture

. . .

only

opposition.”

facts

so

averred

if

if

Code

specific

(emphasis

in

the

Advisory

section

facts

added).

Plaintiff’s

54265

in

an

Since

Verified

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Complaint are germane to the TRO motion. “[O]n July 3, 2014,

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Defendant Gage Stueve sent an e-mail to [Plaintiff] which stated,

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in pertinent part: ‘Our last day shipping milk to [Plaintiff]

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will be Monday, July 7, 2014.’” (Ver. Compl. ¶ 42, ECF No. 1.)
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“On July 8 and 9, 2014, [Plaintiff] dispatched the same milk

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hauler who regularly handles acceptance of [Defendants’] organic

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milk to the farm; however, Defendants turned the milk hauler away

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on both dates, refusing to transfer any of [Defendants’] milk to

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[Plaintiff].” (Id. ¶ 43.)

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Plaintiff’s

Chief

Financial

Officer

declares

the

following concerning immediate and irreparable injury:
The impact from the loss of organic milk from
[Defendants] is significant[, and, as a
result,] . . . [Plaintiff] has been unable to
build its supply due to the loss of milk from
[Defendants]. The supply of inventory is
critical because milk sales are lower in the
summer and this is the time period during
which [Plaintiff] is able to ensure that it
has sufficient stock for the upcoming fall to
meet its commitments. . . . [O]nce dairy
sales
start
increasing
in
September,
[Plaintiff] will lack sufficient daily supply
to meet its commitments and will have to
short its customers.

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(Decl. of Mike Bedessem ¶ 6, ECF No. 7-2.) This “will lead to

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harm to [Plaintiff]’s business and reputational harm.” (Id. ¶ 5.)

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Plaintiff

filed

its

TRO

motion

on

July

24,

2014,

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twenty-one days (or three weeks) after Plaintiff avers Defendants

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notified Plaintiff on July 3, 2014 of their intention to breach.

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Local Rule 231(b) prescribes: “In considering a motion for a

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[TRO], the Court will consider whether the applicant could have

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sought relief by [a] motion for [a] preliminary injunction at an

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earlier date without the necessity for seeking last-minute relief

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by [a] motion for [a] [TRO].” Here, Plaintiff has not explained

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why it did not seek injunctive relief earlier. This failure of

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explanation for Plaintiff’s three-week delay in seeking a TRO

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implies that, under the circumstances, its delay has contributed
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to part of the irreparable injury it avers it is enduring, and

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that it should proceed by an expedited preliminary injunction

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proceeding, rather than an ex parte TRO proceeding. This would

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provide

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request for injunctive relief, as contemplated by the equitable

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principles embodied in the above referenced rules under these

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circumstances.

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Defendants

an

opportunity

respond

to

Plaintiff’s

Therefore, Plaintiff’s motion for an ex parte TRO is

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DENIED.

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Dated:

July 25, 2014

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