Moody v. Metal Supermarket Franchising America, Inc.

Filing 15

ORDER by Judge Hamilton denying 11 Ex Parte Application (pjhlc2, COURT STAFF) (Filed on 11/8/2013)

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UNITED STATES DISTRICT COURT
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NORTHERN DISTRICT OF CALIFORNIA
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TERRANCE A MOODY,
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Plaintiff,

No. C 13-5098 PJH

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v.
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METAL SUPERMARKET FRANCHISING
AMERICA, INC.,

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For the Northern District of California

United States District Court

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ORDER DENYING APPLICATION FOR
TEMPORARY RESTRAINING ORDER

Defendant.
_______________________________/

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Before the court is plaintiff’s “ex parte application for temporary restraining order and

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order to show cause re: preliminary injunction,” filed on November 7, 2013. Though the

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request is styled as an “ex parte” request, the declaration of plaintiff’s counsel indicates that

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he “contacted defense counsel by phone and informed him that plaintiff was filing this

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motion.” Dkt. 11-1 at 3. Thus, plaintiff is not requesting that the temporary restraining

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order be issued without notice, and the requirements of Federal Rule of Civil Procedure

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65(b)(1) do not apply.

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This case arises out of a contractual dispute between plaintiff Terrance Moody

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(“plaintiff”) and defendant Metal Supermarkets Franchising America, Inc. (“defendant”). In

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2003, the parties entered into a franchising agreement for a term of ten years. Under the

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terms of the agreement, defendant has the option to purchase the assets of plaintiff’s

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franchise at the end of the ten-year term, on November 14, 2013. Defendant has indicated

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its intent to exercise that purchase option, and the parties now disagree as to the proper

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formula to calculate the purchase price. Plaintiff filed suit in state court on October 7, 2013,

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seeking a declaration as to the purchase price of the franchise’s assets. Defendant

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removed the case to this court on October 31, 2013. However, before filing the notice of

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removal, defendant filed a demand for arbitration with the American Arbitration Association

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(“AAA”) in Washington, D.C. Plaintiff now seeks a temporary restraining order prohibiting

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defendant from proceeding with the arbitration, arguing that the relevant franchise

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agreement provides for disputes to be resolved in court, and further arguing that any

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arbitration provision in the agreement is unconscionable and unenforceable.

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Requests for temporary restraining orders are governed by the same general

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standards that govern the issuance of a preliminary injunction. See New Motor Vehicle Bd.

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v. Orrin W. Fox Co., 434 U.S. 1345, 1347 n.2 (1977); Stuhlbarg Int’l Sales Co., Inc. v. John

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D. Brush & Co., Inc., 240 F.3d 832, 839 n. 7 (9th Cir. 2001).
A plaintiff seeking a preliminary injunction must establish that he is likely to succeed

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For the Northern District of California

United States District Court

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

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

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Winter v. Natural Resources Defense Council, Inc., 129 S.Ct. 365, 374 (2008).

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Alternatively, the plaintiff may demonstrate that serious questions going to the merits

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were raised and that the balance of hardships tips sharply in the plaintiff's favor, “so long

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as the plaintiff also shows that there is a likelihood of irreparable injury and that the

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injunction is in the public interest.” Alliance for Wild Rockies v. Cottrell, 632 F.3d 1127,

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1135 (9th Cir. 2011). A “serious question” is one on which the plaintiff has “a fair chance of

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success on the merits.” Sierra On-Line, Inc. v. Phoenix Software, Inc., 739 F.2d 1415,

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1421 (9th Cir. 1984).

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An injunction is a matter of equitable discretion” and is “an extraordinary remedy that

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may only be awarded upon a clear showing that the plaintiff is entitled to such relief.”

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Winter, 129 S.Ct. at 376, 381.

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In this case, the court finds that plaintiff has failed to adequately allege any

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irreparable harm that would result from the failure to issue a temporary restraining order,

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and thus DENIES plaintiff’s request. Plaintiff argues that, if the arbitration were to go

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forward, he would “be required to pay substantial amounts of money, thousands of dollars,

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to AAA in ‘administrative fees’ in Washington, D.C.,” that he would be “required to pay tens
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Washington, D.C. counsel to defend the AAA arbitration, again amounting to tens of

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thousands of dollars,” and that he would “be forced to incur significant travel and housing

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expenses to go to Washington, D.C. to defend himself.” Dkt. 11 at 7-8. None of these

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alleged harms are irreparable – on the contrary, it is well-established that “monetary injury

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is not normally considered irreparable” because money can be replaced. See, e.g., Los

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Angeles Memorial Coliseum Commission v. National Football League, 634 F.2d 1197, 1202

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(9th Cir. 1980). Plaintiff also claims that he “has been notified by the AAA that his response

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to [defendant’s] demand for arbitration is due Monday, November 4th,” but that deadline

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passed before the filing of this request, so the court does not consider it. Finally, plaintiff

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For the Northern District of California

of thousands of dollars to the arbitrator in the action,” that he would be “required to retain

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United States District Court

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argues that “[t]here may be conflicting decisions between this court and the arbitrator in the

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AAA arbitration.” Id. at 8. While plaintiff is correct about the possibility of conflicting

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decisions, any harm that would result from conflicting decisions would again be in the form

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of monetary loss. If plaintiff is correct regarding the enforceability of the arbitration

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provision, he may seek damages for any harm incurred. However, plaintiff has not

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demonstrated the irreparable harm needed to satisfy the Winter test, and thus his request

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for a temporary restraining order and for an order to show cause re: preliminary injunction

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is DENIED.

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IT IS SO ORDERED.
Dated: November 8, 2013
______________________________
PHYLLIS J. HAMILTON
United States District Judge

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