Fang v. Merrill Lynch, Pierce, Fenner & Smith, Inc.
Filing
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ORDER re 8 Motion for Temporary Restraining Order and/or Preliminary Injunction. Signed by Judge James Donato on 11/10/2016. (jdlc1S, COURT STAFF) (Filed on 11/10/2016)
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UNITED STATES DISTRICT COURT
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NORTHERN DISTRICT OF CALIFORNIA
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WINNIE B. FANG,
Plaintiff,
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United States District Court
Northern District of California
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Case No.16-cv-06071-JD
ORDER RE MOTION FOR
TEMPORARY RESTRAINING ORDER
v.
MERRILL LYNCH, PIERCE, FENNER &
SMITH, INC.,
Defendant.
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On October 23, 2016, plaintiff Dr. Winnie Fang filed a motion for a temporary restraining
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order and/or preliminary injunction requesting that the Court dismiss the parties’ ongoing
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Financial Industry Regulatory Authority (“FINRA”) arbitration and order the FINRA panel “to
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comply with the FINRA rules.” Dkt. No. 8 at 11 (amended motion). The case was reassigned to
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the Court on October 24, 2016. Dkt. No. 10. On October 26, 2016, the Court directed defendant
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Merrill Lynch to respond to the motion. Dkt. No. 12. The motion is denied.
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This case relates to the escheatment to the State of California of Peet’s Coffee and Tea
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stock that Fang claims an ownership interest in. Fang’s husband died during a home robbery in
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January 2000. Dkt. No. 8 at 4. Fang alleges that in October 2005, she delivered to Merrill Lynch
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2,500 shares of Peet’s stock that her husband had held. Id. Merrill Lynch promised it would
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update the stock contact information with her name and that the shares were in its custody, but in
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2010 Fang received notice that the shares had escheated to the State. Id. at 4-5. Fang sued Merrill
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Lynch in state court in 2013 and reached a partial settlement. Id. at 5. After new information
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about the shares came to light following the settlement, Fang initiated a FINRA arbitration action
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with Merrill Lynch in June 2014. Id.
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Plaintiff alleges that there have been procedural missteps in the arbitration process,
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including defendant’s failure to produce relevant documents in discovery. Id. at 6. On September
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30, 2016, she moved for dismissal of the FINRA arbitration, which was denied. Id. at 6-7. On
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October 20, 2016, she filed the complaint here for breach of fiduciary duty, breach of contract,
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negligence, fraud, and unfair business practices. Dkt. No. 1. On October 23, 2016, she sought
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injunctive relief to dismiss the ongoing arbitration. Dkt. No. 8.
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Federal Rule of Civil Procedure 65 governs both temporary restraining orders and
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preliminary injunctions. A temporary restraining order enjoins conduct pending a hearing on a
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preliminary injunction. See Fed. R. Civ. P. 65(b). But where notice of a motion for a temporary
restraining order is given to the adverse party, the same legal standard as a motion for a
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United States District Court
Northern District of California
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preliminary injunction applies. See Stuhlbarg Int'l Sales Co., Inc. v. John D. Brush & Co., Inc.,
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240 F.3d 832, 839 n. 7 (9th Cir. 2001).
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“A plaintiff seeking a preliminary injunction must establish that he is likely to succeed on
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the merits, that he is likely to suffer irreparable harm in the absence of preliminary relief, that the
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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, Inc., 555 U.S. 7, 20 (2008). Alternatively, “a preliminary injunction
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could issue where the likelihood of success is such that serious questions going to the merits were
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raised and the balance of hardships tips sharply in plaintiff’s favor,” so long as the plaintiff
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demonstrates irreparable harm and shows that the injunction is in the public interest. Alliance for
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the Wild Rockies v. Cottrell, 632 F.3d 1127, 1131 (9th Cir. 2011) (internal quotation omitted).
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Under either approach, “at an irreducible minimum,” the party seeking an injunction “must
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demonstrate a fair chance of success on the merits, or questions serious enough to require
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litigation.” Pimentel v. Dreyfus, 670 F.3d 1096, 1105-06 (9th Cir. 2012) (internal quotation
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omitted).
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Fang fails to meet this requirement. She seeks injunctive relief on the grounds that she
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cannot be compelled to participate in arbitration pursuant to FINRA Rule 13200 (providing that no
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claims shall be submitted to arbitration on a class-wide basis). Dkt. No. 8 at 10. But as defendant
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points out, the motion has nothing to do with the claims in Fang’s complaint. Dkt. No. 14 at 8-9.
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The complaint alleges breach of contract, fraud, negligence, and unfair business practices. Dkt.
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No. 1. There is no link between the injunctive relief sought and the likelihood of success or
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serious questions on the merits of the complaint’s claims. See Dkt. No. 8 at 9-11. That is enough
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to deny the requested relief but the Court also notes that Fang made no showing of possible
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irreparable harm she might suffer, how the balance of equities tips in her favor, or why injunctive
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relief is in the public interest. See Winter, 555 U.S. at 20. Consequently, the motion is denied.
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IT IS SO ORDERED.
Dated: November 10, 2016
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JAMES DONATO
United States District Judge
United States District Court
Northern District of California
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