Fang v. Merrill Lynch, Pierce, Fenner & Smith, Inc.

Filing 19

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)

1
2
3
4

UNITED STATES DISTRICT COURT

5

NORTHERN DISTRICT OF CALIFORNIA

6
7

WINNIE B. FANG,
Plaintiff,

8
9
10

United States District Court
Northern District of California

11

Case No.16-cv-06071-JD
ORDER RE MOTION FOR
TEMPORARY RESTRAINING ORDER

v.
MERRILL LYNCH, PIERCE, FENNER &
SMITH, INC.,
Defendant.

12
13

On October 23, 2016, plaintiff Dr. Winnie Fang filed a motion for a temporary restraining

14

order and/or preliminary injunction requesting that the Court dismiss the parties’ ongoing

15

Financial Industry Regulatory Authority (“FINRA”) arbitration and order the FINRA panel “to

16

comply with the FINRA rules.” Dkt. No. 8 at 11 (amended motion). The case was reassigned to

17

the Court on October 24, 2016. Dkt. No. 10. On October 26, 2016, the Court directed defendant

18

Merrill Lynch to respond to the motion. Dkt. No. 12. The motion is denied.

19

This case relates to the escheatment to the State of California of Peet’s Coffee and Tea

20

stock that Fang claims an ownership interest in. Fang’s husband died during a home robbery in

21

January 2000. Dkt. No. 8 at 4. Fang alleges that in October 2005, she delivered to Merrill Lynch

22

2,500 shares of Peet’s stock that her husband had held. Id. Merrill Lynch promised it would

23

update the stock contact information with her name and that the shares were in its custody, but in

24

2010 Fang received notice that the shares had escheated to the State. Id. at 4-5. Fang sued Merrill

25

Lynch in state court in 2013 and reached a partial settlement. Id. at 5. After new information

26

about the shares came to light following the settlement, Fang initiated a FINRA arbitration action

27

with Merrill Lynch in June 2014. Id.

28

1

Plaintiff alleges that there have been procedural missteps in the arbitration process,

2

including defendant’s failure to produce relevant documents in discovery. Id. at 6. On September

3

30, 2016, she moved for dismissal of the FINRA arbitration, which was denied. Id. at 6-7. On

4

October 20, 2016, she filed the complaint here for breach of fiduciary duty, breach of contract,

5

negligence, fraud, and unfair business practices. Dkt. No. 1. On October 23, 2016, she sought

6

injunctive relief to dismiss the ongoing arbitration. Dkt. No. 8.

7

Federal Rule of Civil Procedure 65 governs both temporary restraining orders and

8

preliminary injunctions. A temporary restraining order enjoins conduct pending a hearing on a

9

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

11
United States District Court
Northern District of California

10

preliminary injunction applies. See Stuhlbarg Int'l Sales Co., Inc. v. John D. Brush & Co., Inc.,

12

240 F.3d 832, 839 n. 7 (9th Cir. 2001).

13

“A plaintiff seeking a preliminary injunction must establish that he is likely to succeed on

14

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

15

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

16

Natural Res. Def. Council, Inc., 555 U.S. 7, 20 (2008). Alternatively, “a preliminary injunction

17

could issue where the likelihood of success is such that serious questions going to the merits were

18

raised and the balance of hardships tips sharply in plaintiff’s favor,” so long as the plaintiff

19

demonstrates irreparable harm and shows that the injunction is in the public interest. Alliance for

20

the Wild Rockies v. Cottrell, 632 F.3d 1127, 1131 (9th Cir. 2011) (internal quotation omitted).

21

Under either approach, “at an irreducible minimum,” the party seeking an injunction “must

22

demonstrate a fair chance of success on the merits, or questions serious enough to require

23

litigation.” Pimentel v. Dreyfus, 670 F.3d 1096, 1105-06 (9th Cir. 2012) (internal quotation

24

omitted).

25

Fang fails to meet this requirement. She seeks injunctive relief on the grounds that she

26

cannot be compelled to participate in arbitration pursuant to FINRA Rule 13200 (providing that no

27

claims shall be submitted to arbitration on a class-wide basis). Dkt. No. 8 at 10. But as defendant

28

points out, the motion has nothing to do with the claims in Fang’s complaint. Dkt. No. 14 at 8-9.
2

1

The complaint alleges breach of contract, fraud, negligence, and unfair business practices. Dkt.

2

No. 1. There is no link between the injunctive relief sought and the likelihood of success or

3

serious questions on the merits of the complaint’s claims. See Dkt. No. 8 at 9-11. That is enough

4

to deny the requested relief but the Court also notes that Fang made no showing of possible

5

irreparable harm she might suffer, how the balance of equities tips in her favor, or why injunctive

6

relief is in the public interest. See Winter, 555 U.S. at 20. Consequently, the motion is denied.

7
8

IT IS SO ORDERED.
Dated: November 10, 2016

9
10
JAMES DONATO
United States District Judge

United States District Court
Northern District of California

11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
3