Bestway (USA), Inc. et al v. SGROMO et al
Filing
124
ORDER GRANTING 113 PRELIMINARY INJUNCTION. Signed by Judge Haywood S. Gilliam, Jr. on 9/27/2018. (ndrS, COURT STAFF) (Filed on 9/27/2018)
1
2
3
4
UNITED STATES DISTRICT COURT
5
NORTHERN DISTRICT OF CALIFORNIA
6
7
BESTWAY (USA), INC., et al.,
Plaintiffs,
8
9
10
11
v.
Case No. 17-cv-00205-HSG
ORDER GRANTING PRELIMINARY
INJUNCTION
Re: Dkt. No. 113
PIETRO PASQUALE-ANTONI SGROMO,
et al.,
United States District Court
Northern District of California
Defendants.
12
13
On September 12, 2018, Plaintiffs Bestway (USA) Inc., Bestway (Hong Kong)
14
International Ltd., and Bestway Inflatables and Material Corporation’s (collectively “Bestway”)
15
filed a motion for a temporary restraining order and preliminary injunction. See Dkt. No. 113.
16
Bestway asked this Court to enjoin Defendant Pietro Pasquale-Antoni Sgromo (“Sgromo”) from
17
continuing to pursue the arbitration before JAMS captioned Sgromo, et al. v. Bestway (USA), Inc.,
18
et al., Reference No. 1210035345, contrary to this Court’s July 2 order. See id.; Dkt. No. 90. The
19
Court granted Bestway’s motion for a temporary restraining order on September 13, 2018. See
20
Dkt. No. 114. Sgromo has not responded. The Court held a show cause hearing on September 26,
21
at which Sgromo did not appear.
22
23
For the reasons articulated below, the Court GRANTS Bestway’s motion for a preliminary
injunction.
24
A preliminary injunction is “an extraordinary remedy that may only be awarded upon a
25
clear showing that the plaintiff is entitled to such relief.” Winter v. Nat. Res. Def. Council, 555
26
U.S. 7, 22 (2008). To receive a preliminary injunction prior to a full adjudication on the merits, a
27
plaintiff “must establish [1] that he is likely to succeed on the merits, [2] that he is likely to suffer
28
irreparable harm in the absence of preliminary relief, [3] that the balance of equities tips in his
1
favor, and [4] that an injunction is in the public interest.” Id. at 20. The Ninth Circuit has held
2
that “a ‘likelihood’ of success per se is not an absolute requirement.” Drakes Bay Oyster Co. v.
3
Jewell, 747 F.3d 1073, 1085 (9th Cir. 2014). “Rather, serious questions going to the merits and a
4
hardship balance that tips sharply toward the plaintiff can support issuance of an injunction,
5
assuming the other two elements of the Winter test are also met.” Id. (internal quotation marks
6
omitted). However, under either the Winter test or the “serious questions” test, the court may not
7
issue a preliminary injunction unless it finds that “a certain threshold showing is made” as to each
8
of the four elements. Leiva-Perez v. Holder, 640 F.3d 962, 966 (9th Cir. 2011).
First, Bestway is likely to prevail on the merits of its claims that Sgromo’s motion to
10
compel arbitration was properly denied and that the status quo should be maintained pending
11
United States District Court
Northern District of California
9
resolution of the appeal in the Ninth Circuit regarding that issue. This Court found that Sgromo
12
waived his right to arbitrate by his litigation conduct because “[i]n short, Sgromo has spent more
13
than 16 months litigating this case . . . and only now—on the eve of summary judgment—does he
14
seek to compel arbitration.” Dkt. No. 90 at 8. In his appeal to the Ninth Circuit, Sgromo advances
15
no new legal or factual arguments as to why he should not have been found to have waived his
16
right to arbitration. See Appellant’s Informal Brief at 12–13, Bestway (USA), Inc., et al. v. Pietro
17
Sgromo, et al., No. 18-16228 (9th Cir. Aug. 29, 2018), ECF No. 6.
18
Second, Bestway would be likely to suffer irreparable injury absent a preliminary
19
injunction, in the form of inconsistent or contradictory rulings from a JAMS arbitrator and the
20
expense of irrecoverable resources. See AT & T Mobility LLC v. Bernardi, No. C 11-03992 CRB,
21
2011 WL 5079549, at *10 (N.D. Cal. Oct. 26, 2011) (“being forced to defend an improper
22
arbitration demand requires expending human and monetary capital for which there is no adequate
23
remedy at law”).
24
Third, the balance of equities favors Bestway because the preliminary injunction simply
25
preserves the status quo by enforcing the Court’s prior orders that ruled in Bestway’s favor and
26
against Sgromo. See Morgan Stanley & Co. LLC v. Couch, 659 F. App’x 402, 406 (9th Cir. 2016)
27
(“If arbitration proceedings were not enjoined, [defendant’s] extended delay in asserting his
28
arbitration right would force [plaintiff] to re-litigate claims it likely has no duty to arbitrate at all”
2
1
and “no reason why preliminarily enjoining arbitration proceedings would impair [defendant’s]
2
claims”); Morgan Stanley & Co., LLC v. Couch, 134 F. Supp. 3d 1215, 1233 (E.D. Cal. 2015)
3
(“majority of federal appellate courts to address the issue have held explicitly” that a federal
4
district court “may enjoin arbitration if necessary to enforce its orders”); see also In re American
5
Exp. Fin. Advisors Securities Litig., 672 F.3d 113, 141 (2d Cir. 2011) (“If the parties to this appeal
6
have not consented to arbitrate a claim, the district court was not powerless to prevent one party
7
from foisting upon the other an arbitration process to which the first party had no contractual
8
right.”).
9
Finally, the requested relief is in the public interest because it conserves judicial and party
resources, while enforcing this Court’s orders and preserving the Ninth Circuit’s jurisdiction to
11
United States District Court
Northern District of California
10
hear Sgromo’s pending appeal.
12
TO DEFENDANT PIETRO PASQUALE-ANTONIO SGROMO (“SGROMO”):
13
You, your officers, agents, servants, employees, and attorneys, and any other persons or
14
corporate entities who are in active concert or participation with you ARE HEREBY
15
RESTRAINED AND ENJOINED from:
16
1. Prosecuting or continuing to prosecute the arbitration before JAMS captioned
17
Sgromo, et al. v. Bestway (USA), Inc., et al., Reference No. 1210035345, until
18
resolution of the appeal in the U.S. Court of Appeals for the Ninth Circuit
19
captioned Sgromo, et al. v. Bestway (USA), Inc., et al., Case No. 18-16228.
20
21
22
23
24
IT IS SO ORDERED.
Dated: 9/27/2018
______________________________________
HAYWOOD S. GILLIAM, JR.
United States District Judge
25
26
27
28
3
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?