Chong's Produce, Inc. v. El Mercadito Latino, LLC et al

Filing 9

ORDER GRANTING 2 EX PARTE APPLICATION FOR TRO AND SETTING CASE MANAGEMENT CONFERENCE TO DISCUSS SCHEDULING OF HEARING ON PRELIMINARY INJUNCTION AND TRIAL. Signed by Judge Jeremy Fogel on 12/10/2010. (jflc2, COURT STAFF) (Filed on 12/10/2010)

Chong's Produce, Inc. v. El Mercadito Latino, LLC et al

Doc. 9

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**E-Filed 12/10/2010**

IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA SAN JOSE DIVISION

CHONG'S PRODUCE, INC., Plaintiff, v. EL MERCADITO LATINO, LLC, et al., Defendants.

Case Number 5:10-cv-05564-JF ORDER1 GRANTING EX PARTE APPLICATION FOR TRO AND SETTING CASE MANAGEMENT CONFERENCE TO DISCUSS SCHEDULING OF HEARING ON PRELIMINARY INJUNCTION AND TRIAL [re: doc. no. 2]

On December 8, 2010, Plaintiff Chong's Produce, Inc. ("Plaintiff") filed the complaint in this action, alleging several claims under the Perishable Agricultural Commodities Act ("PACA"), and a claim for breach of contract. Plaintiff seeks a temporary restraining order ("TRO") and a preliminary injunction enjoining Defendants from dissipating the assets of a PACA statutory trust. The application for TRO is supported by the declaration of Andy Chong, the president of Plaintiff, stating that: Defendant El Mercadito Latino, LLC, which is owned

This disposition is not designated for publication in the official reports.

C a s e No. 5:10-cv-05564-JF O R D E R GRANTING EX PARTE APPLICATION FOR TRO ETC. ( JF L C 2 )

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and/or managed by Defendants Joel and Carla Villareal (collectively, "Defendants"), purchased fruits and vegetables from Plaintiff for a total amount of $245,932.04 during the period 2008 to June, 2009; while Defendants initially paid the invoices as they came due, Defendants stopped paying at some point and owe an outstanding balance of $13,886.68 for produce that was delivered and accepted; Plaintiff has contacted Defendants weekly about the outstanding invoices and sent a written demand for payment, but Defendants have not made further payments. PACA imposes a statutory trust on all produce-related assets held by agricultural merchants, dealers, and brokers. 7 U.S.C. § 499e(c). Plaintiff alleges that Defendant is a dealer under PACA. Complt. ¶ 7. A district court may issue an order for injunctive relief to preserve the assets of the statutory trust. See Frio Ice, S.A. v. Sunfruit, Inc., 918 F.2d 154, 158-59 (11th Cir. 1990). The standard for issuing a TRO is the same as that for issuing a preliminary injunction. Brown Jordan Int'l, Inc. v. Mind's Eye Interiors, Inc., 236 F. Supp. 2d 1152, 1154 (D. Hawaii 2002); Lockheed Missile & Space Co., Inc. v. Hughes Aircraft Co., 887 F. Supp. 1320, 1323 (N.D. Cal. 1995). "A plaintiff seeking a preliminary injunction must establish that he is likely to succeed on the merits, that he is likely to suffer irreparable harm in the absence of preliminary relief, that the balance of equities tips in his favor, and that an injunction is in the public interest." Winter v. Natural Res. Def. Council, Inc., --- U.S. ----, 129 S.Ct. 365, 374 (2008). A TRO may be issued without notice to the adverse party only if "(A) specific facts in an affidavit or a verified complaint clearly show that immediate and irreparable injury, loss, or damage will result to the movant before the adverse party can be heard in opposition; and (B) the movant's attorney certifies in writing any efforts made to give notice and the reasons why it should not be required." Fed. R. Civ. P. 65(b)(1). Moreover, in this district an applicant for a TRO must give notice to the adverse party "[u]nless relieved by order of a Judge for good cause shown." Civ. L.R. 65-1(b). Andy Chong states in his declaration that Defendants initially paid their bills but have stopped doing so; that Defendants have failed to respond to weekly demands for payment; and that in his experience when collection efforts regarding produce-related receivables reach this 2
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point, the entity charged with maintaining the PACA trust generally has to be liquidated. Plaintiff that the Court enjoin and restrain Defendants, their agents, subsidiaries, assigns, and banking institutions, and all persons in active concert or participation with Defendants, from the following conduct: dissipating, paying, transferring, assigning or selling any and all assets covered by or subject to the trust provisions of PACA without Plaintiff's agreement, or until further order of this Court. For good cause shown, the Court will issue the requested TRO restraining Defendants from the above conduct pending disposition of Plaintiff's motion for preliminary injunction. The assets subject to this order include all of Defendants' assets unless Defendants can prove to the Court that a particular asset is not derived from perishable commodities, or receivables or proceeds from the sale of such commodities. However, Defendants may sell perishable commodities for fair compensation on the condition that Defendants maintain the proceeds of such sales subject to this Order. Plaintiff requests that the Court consolidate the hearing on the motion for preliminary injunction with the trial. The Court will set a case management conference for the purpose of discussing this request with counsel. ORDER (1) (2) Plaintiff's ex parte application for TRO is GRANTED. Defendants are HEREBY RESTRAINED from the conduct described above; a case management conference is HEREBY SET for December 17, 2010, at 10:30 a.m.; the TRO shall remain in place until midnight on December 24, 2010 or until other order of the Court.

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Dated: 12/10/2010

__________________________ JEREMY FOGEL United States District

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