Terry et al v. Register Tapes Unlimited, Inc. et al

Filing 185

FINDINGS and RECOMMENDATIONS signed by Magistrate Judge Allison Claire on 7/8/2020 RECOMMENDING that plaintiff's 181 motion for temporary restrainingorder be denied. In light of the time-sensitive nature of the motion, the period for objections to these Findings and Recommendations will be 24 hours. Motion referred to Judge William B. Shubb. Objections to F&R due within 24 hours. (Zignago, K.)

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UNITED STATES DISTRICT COURT

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FOR THE EASTERN DISTRICT OF CALIFORNIA

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ROBERT TERRY,

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No. 2:16-cv-0806 WBS AC

Plaintiff,
v.

FINDINGS AND RECOMMENDATIONS

REGISTER TAPES UNLIMITED, INC., a
Texas corporation, et al.,
Defendants.

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This case was recently referred to the undersigned for all pre-trial proceedings in light of

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plaintiff’s pro se status. ECF No. 180. Now before the court is plaintiff Robert Terry’s motion

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for a temporary restraining order. ECF No. 181. Defendants have filed an opposition. ECF No.

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183. The undersigned recommends that the motion be DENIED.

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I.

RELEVANT FACTUAL AND PROCEDURAL HISTORY

This action was removed from California State Court on the basis of diversity and federal

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question jurisdiction on April 19, 2016. ECF No. 1. On May 16, 2017, Terry filed a Second

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Amended Complaint (“SAC”). ECF No. 36. The SAC is the operative complaint in this matter.

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According to the SAC, plaintiff Robert Terry was, at all relevant times, an employee of defendant

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Register Tapes Unlimited, Inc. (“RTUI”) and a citizen of California. ECF No. 36 at 2.

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From 1998 to 2004, Terry alleges to have entered into contracts with RTUI to sell

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advertising space and negotiate grocery store servicing contracts on RTUI’s behalf, assign

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grocery store servicing contracts he had previously obtained to RTUI, and provide sales training

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to RTUI staff. Id. at 5-7. As relevant, an October 1999 written agreement (“1999 Safeway

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Contract”) between plaintiffs and RTUI provided that RTUI would pay plaintiffs 10% of its gross

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profit, defined as “profit after cost of tape and total paid commissions at 35% fixed. Tape cost to

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be calculated presently at $1.50 per roll delivered for printed tape and .94 per roll for blank tape

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but subject to price fluctuations based on the cost of thermal paper in the future.” ECF No. 36.6

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(Ex. F) at 2. Plaintiff alleges that he has not been properly compensated under the contracts, and

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that RTUI has regularly failed or refused to provide proof of profits necessary for plaintiffs to

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ascertain whether proper payments have been made. ECF No. 36 at 7-8.

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II.

MOTION FOR TEMPORARY RESTRAINING ORDER

Plaintiff now brings an emergency motion seeking to prevent defendants from terminating

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his employment, and requiring the payment of monies owed. ECF No. 181 at 1. Defendants

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asked plaintiff to sign an independent contractor agreement on June 18, 2020. Id. at 12. Plaintiff

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asserts that he has been misclassified as an independent contractor by defendants for over 22

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years. Id. at 14. If plaintiff fails to co complete the agreement by July 10, 2020, he will no longer

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be able to sell for defendants or collect commissions on any new or renewal contract. Id. at 8.

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Plaintiff states that he will be irreparably harmed if defendants fire him because he is nearly 64

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years old and due to the COVID-19 pandemic, his disability, and his age, it would be difficult if

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not impossible for him to obtain other employment. Id. at 12.

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III.

STANDARDS

A temporary restraining order is an extraordinary measure of relief that a federal court

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may impose without notice to the adverse party only if, in an affidavit or verified complaint, the

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movant “clearly show[s] that immediate and irreparable injury, loss, or damage will result to the

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movant before the adverse party can be heard in opposition.” See Fed. R. Civ. P. 65(b)(1)(A).

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Local Rule 231 requires a party seeking a TRO to file several documents, including a complaint

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and “an affidavit detailing the notice or efforts to effect notice to the affected parties or counsel or
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showing good cause why notice should not be given ....” E.D. Cal. R. 231(c). Local Rule 231(a)

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states that “[e]xcept in the most extraordinary of circumstances, no temporary restraining order

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shall be granted in the absence of actual notice to the affected party and/or counsel[.]” In the

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absence of such extraordinary circumstances, the court construes a motion for temporary

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restraining order as a motion for preliminary injunction. See, e.g., Aiello v. One West Bank, No.

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2:10–cv–0227 GEB EFB, 2010 WL 406092, at *1-2 (E.D. Cal. Jan. 29, 2010).

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The party requesting preliminary injunctive relief must show that “he is likely to succeed

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on the merits, that he is likely to suffer irreparable harm in the absence of preliminary relief, that

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the balance of equities tips in his favor, and that an injunction is in the public interest.” Winter v.

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Natural Res. Def. Council, 555 U.S. 7, 20 (2008). The propriety of a request for injunctive relief

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hinges on a demonstrated threat of irreparable injury that must be imminent in nature. Caribbean

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Marine Servs. Co. v. Baldrige, 844 F.2d 668, 674 (9th Cir. 1988).

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IV.

DISCUSSION

Having considered the submissions of the parties, the undersigned concludes that no

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hearing is necessary because it is clear from the face of the motion that plaintiff is not entitled to

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the relief he seeks.

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A failure to demonstrate irreparable harm is fatal to an application for preliminary

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injunctive relief. Caribbean Marine, 844 F.2d at 674. Plaintiff’s allegations regarding irreparable

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harm describe the personal hardship he will experience if he loses his income from defendants.

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Defendants confirm that all independent contractors, including plaintiff, are required to sign an

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“IC Agreement” by Friday, July 10, 2020 or they will no longer be able to sell advertising for

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defendants going forward. ECF No. 183-1 at 4. In light of plaintiff’s refusal to sign such an

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agreement, termination of the relationship (whether characterized as an employment relationship

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or as an independent contractor relationship) does indeed appear to be imminent. However, the

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severity of imminent harm is not the measure of entitlement to emergency or other preliminary

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relief. In the injunctive relief context, “irreparable harm” means harm that cannot be remedied by

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money damages or otherwise. Sampson v. Murray, 415 U.S. 61, 90 (1974). The harm that

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plaintiff alleges here is not irreparable, no matter how keenly it may be felt.
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Economic harm is generally not considered irreparable. Los Angeles Memorial Coliseum

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Comm’n v. Nat’l Football League, 634 F.2d 1197, 1202 (9th Cir. 1980). If the termination of

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employment or a contractual relationship is proven to be unlawful, damages can compensate for

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the loss after the fact. By definition, therefore, such purely economic harm is not irreparable. See

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Rent-A-Center, Inc. v. Canyon Television & Appliance Rental, Inc., 944 F.2d 597, 603 (9th Cir.

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1991) (“It is true that economic injury alone does not support a finding of irreparable harm,

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because such injury can be remedied by a damage award.”). The U.S. Supreme Court has held

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that the loss of earnings does not generally constitute irreparable injury, because lost income can

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be recovered. See Sampson, 415 U.S. at 90 (overturning preliminary injunction issued to prevent

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plaintiff from losing her job, for failure to demonstrate irreparable harm).
As to plaintiff’s alleged imminent injury from the anticipated non-payment of monies

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owed him for past sales, that harm appears to be entirely speculative. Speculative harm cannot be

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considered irreparable. See Caribbean Marine, 844 F.2d at 674. Moreover, defendants have

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committed themselves to paying what is owed. See ECF 183 at 5; ECF No. 183-1 (Declaration of

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Peter J. Most) at 4. Their representation on this point makes harm not just speculative, but

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unlikely. Should defendants fail to satisfy their commitment, the injury to plaintiff would be one

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that is purely monetary and thus compensable—and therefore not irreparable as a matter of law.

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There being no showing of irreparable harm, it is recommended that the motion for a
temporary restraining order be denied.
V.

CONCLUSION

Accordingly, IT IS RECOMMENDED that plaintiff’s motion for temporary restraining

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order (ECF No. 181) be DENIED. In light of the time-sensitive nature of the motion, the period

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for objections to these Findings and Recommendations will be 24 hours.

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These findings and recommendations are submitted to the United States District Judge

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assigned to the case, pursuant to the provisions of 28 U.S.C. § 636(b)(l). Within 24 HOURS

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after being electronically served with these Findings and Recommendations, plaintiff may file

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written objections with the court and serve a copy on all parties. Such a document should be

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captioned “Objections to Magistrate Judge’s Findings and Recommendations.” Plaintiff is
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advised that failure to file objections within the specified time may waive the right to appeal the

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District Court’s order. Martinez v. Ylst, 951 F.2d 1153 (9th Cir. 1991).

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DATED: July 8, 2020

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