Admiral Insurance Company v. Blue Lake Rancheria Tribal Court et al

Filing 13

Order by Hon. Lucy H. Koh denying without prejudice 8 Motion for TRO.(lhklc1, COURT STAFF) (Filed on 3/20/2012)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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SAN JOSE DIVISION

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United States District Court
For the Northern District of California

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ADMIRAL INSURANCE COMPANY,

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Plaintiff,
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v.
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BLUE LAKE RANCHERIA TRIBAL COURT; )
LESTER J. MARSTON, Chief Judge of the
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BLUE LAKE RANCHERIA INDIAN TRIBE; )
WOOD’S ROOFING INC., a California
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Corporation; DOES 1-10.
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Defendants.
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Case No.: 5:12-cv-00576-LHK
ORDER DENYING WITHOUT
PREJUDICE EX PARTE APPLICATION
FOR TEMPORARY RESTRAINING
ORDER

Plaintiff Admiral Insurance Company (“Admiral”) filed this ex parte application for a

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temporary restraining order (“TRO”) and order to show cause why a preliminary injunction should

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not be issued against Defendant Blue Lake Rancheria Tribal Court (“Tribal Court”); the Honorable

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Lester J. Marston, Chief Judge of the Blue Lake Rancheria Tribe (“Judge Marston”); Wood’s

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Roofing Inc. (“WRI”); and Does 1-10 (collectively “Defendants”). Admiral’s Ex Parte Appl. for

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TRO and Order to Show Cause Why Prelim. Inj. Should Not Be Issued (“TRO Appl.”), ECF No.

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10. Admiral’s counsel certified in writing its efforts to give notice of the ex parte application in

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accordance with Federal Rule of Civil Procedure 65(b)(1)(B). Declaration of Lynn H. Trang

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(“Trang Decl.”), ECF No. 1, ¶ 4. Defendants have not filed an opposition. The case was

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reassigned to the undersigned judge on March 19, 2012. ECF No. 12. For the reasons set forth

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below, Admiral’s ex parte application is DENIED WITHOUT PREJUDICE.

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Case No.: 5:12-cv-01266-LHK
ORDER DENYING EX PARTE APPLICATION FOR TEMPORARY RESTRAINING ORDER

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I.

BACKGROUND FACTS
The following facts are alleged in Admiral’s complaint, TRO application, and the

declaration supporting the application.

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Admiral, a Delaware Corporation, doing business in Cherry Hill, New Jersey, is an

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insurance company. TRO Appl. at 2. Admiral is currently a Cross-Defendant in Mainstay

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Business Solutions v. Wood’s Roofing, Inc., Case No. C-09-0612-LJM, a civil action pending

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before the Tribal Court (the “Tribal Action” or “underlying case”). The plaintiff in the underlying

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case is Mainstay Business Solutions (“MBS”), a division of Blue Lake Rancheria Economic

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Development Corporation, a federally chartered corporation pursuant to Section 17 of the Indian

United States District Court
For the Northern District of California

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Reorganization Act (25 U.S.C. § 477), wholly owned by Blue Lake Rancheria, a federally

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recognized Indian tribe. Id. at 2. The defendant in the underlying case is WRI, a California

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corporation, doing business in San Jose, California. Compl., ECF No. 1, ¶ 9. WRI holds a

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commercial general liability insurance policy with Admiral (“the insurance policy”). TRO Appl. 2

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The Tribal Action involves a contract and negligence dispute between MBS, a tribal entity,

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and WRI, a non-tribal building contractor. MBS and WRI entered into an agreement in 2007 (“the

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agreement”), wherein MBS assigned its employees to WRI to work at various WRI jobsites. TRO

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Appl. 2. Three MBS employees suffered workplace injuries, and, pursuant to the agreement, MBS

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provided workers compensation benefits to those employees. Id. On June 23, 2011, MBS filed its

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complaint in Tribal Court against WRI seeking to recover, under the agreement, the benefits MBS

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paid to the injured WRI employees. Compl. Ex. A.

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WRI in turn sought to be defended in the underlying case and indemnified by Admiral

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pursuant to the insurance policy, but Admiral declined coverage on the ground that the insurance

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policy does not cover injured employees. See TRO Appl. 2; see also Compl. ¶ 17. As a result,

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WRI filed a cross-complaint against Admiral in the underlying case, seeking, among other things,

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the following: (1) attorney’s fees and costs incurred in the defense of the underlying action; (2)

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indemnification for the amount to be paid in settlement or satisfaction of a judgment in the

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underlying action; and (3) general damages. Compl. ¶ 18; Ex. D.

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Case No.: 5:12-cv-01266-LHK
ORDER DENYING EX PARTE APPLICATION FOR TEMPORARY RESTRAINING ORDER

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On October 27, 2011, the Tribal Court ordered the parties to file cross-motions for

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summary judgment on the following issues: “(1) does the [Tribal] Court have personal jurisdiction

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over [Admiral]; (2) does the [Tribal] Court, as a matter of tribal law, have subject matter

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jurisdiction over [Admiral]; (3) does the [Tribal] Court, as a matter of federal law, have subject

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matter jurisdiction over [Admiral]; and (4) do[es] [Admiral] have an obligation to tender a defense

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on behalf of [WRI] in this case pursuant to policies of insurance entered into between [WRI] and

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[Admiral].” Id. at 4; Ex. F, at 2. The Tribal Court ordered the parties to file their cross-motions for

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summary judgment by March 15, 2012, and stated that failure to comply with the order “may result

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in the imposition of sanctions.” TRO Appl. 5; Ex. I. On March 12, 2012, the Clerk of the Tribal

United States District Court
For the Northern District of California

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Court notified the parties to file their cross-motions for summary judgment by March 17, 2012.

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TRO Appl. 1, 7; Ex. M.1 The Tribal Court also postponed until April 6, 2012 the hearing on

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Admiral’s earlier filed motion to dismiss the cross-complaint for lack of personal and subject

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matter jurisdiction. TRO Appl. 6.

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Admiral seeks a TRO enjoining the Defendants from exercising tribal court jurisdiction

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over Admiral and conducting any further proceedings against Admiral. Proposed Order, ECF No.

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10-4. Admiral argues that a TRO “is needed in order to preserve the status quo so that the

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jurisdictional issues can be determined first. If this request is not granted, Admiral is forced to

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submit to the jurisdiction of the Tribal Court without due process or be subject to sanctions for

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failing to file a substantive motion on whether Admiral owes a duty to defend and indemnify WRI

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and have a motion for summary judgment be pending against it to which it cannot oppose, since an

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opposition would be viewed as subjection to the Tribal Court’s jurisdiction.” TRO Appl. 7

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II.

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LEGAL STANDARD

An ex parte TRO may be granted upon a showing “that immediate and irreparable injury,

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loss, or damage will result to the movant before the adverse party can be heard in opposition.”

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Fed. R. Civ. P. 65(b)(1)(A). A request for a TRO is evaluated by the same factors that generally

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Although the application states that the cross-motions were due March 15, 2012, Exhibit M
suggests that the cross-motions were due March 17, 2012. In any event, both dates have now
passed.
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Case No.: 5:12-cv-01266-LHK
ORDER DENYING EX PARTE APPLICATION FOR TEMPORARY RESTRAINING ORDER

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apply to a preliminary injunction. See Stuhlbarg Int’l Sales Co. v. John D. Brushy & Co., 240 F.3d

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832, 839 n.7 (9th Cir. 2001). Thus, a TRO, like a “preliminary injunction[,] is an extraordinary and

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drastic remedy.” Munaf v. Geren, 553 U.S. 674, 689 (2008). A district court may enter a TRO

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only “upon a clear showing that the plaintiff is entitled to such relief.” See Winter v. Natural Res.

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Def. Council, Inc., 555 U.S. 7, 21 (2008).

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To obtain a TRO, a plaintiff generally must show that: (1) he is likely to succeed on the

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merits; (2) he is likely to suffer irreparable harm in the absence of preliminary relief; (3) the

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balance of equities tips in his favor; and (4) an injunction is in the public interest. See id. at 24-25;

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accord Stormans, Inc. v. Selecky, 586 F.3d 1109, 1126-27 (9th Cir. 2009). A TRO may also be

United States District Court
For the Northern District of California

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appropriate where the plaintiff raises “serious questions going to the merits and a balance of

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hardships that tips sharply towards the plaintiff . . . so long as the plaintiff also shows that there is a

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likelihood of irreparable injury and that the injunction is in the public interest.” Alliance for the

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Wild Rockies v. Cottrell, 632 F.3d 1127, 1135 (9th Cir. 2011). To succeed on its motion for a

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preliminary injunction, a plaintiff must satisfy its burden of proving all four elements of the Winter

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test. Id.

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III.

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DISCUSSION

The Court DENIES Admiral’s ex parte application for a TRO because Admiral fails to

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show that “immediate and irreparable injury, loss, or damage will result to the movant before the

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adverse party can be heard in opposition.” Fed. R. Civ. P. 65(b)(1)(a)(emphasis added). Even if

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this were not an ex parte application, however, the Court would deny the application for failure to

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satisfy all four elements of the Winter test. Given that Admiral fails to “clearly show” that it is

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likely to suffer immediate and irreparable harm absent a TRO, the Court “need not address . . . the

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remaining elements of the [Winter test] . . . .” Ctr. for Food Safety v. Vilsack, 636 F.3d 1166, 1174

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(9th Cir. 2011).

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Admiral’s irreparable harm argument hinges on the fact that on March 15 or 17, 2012, it

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would be forced either to submit to the Tribal Court’s jurisdiction or face sanctions. See TRO

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Appl. 14. These dates have passed, even before the case was reassigned to the undersigned judge

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on March 19, 2012. Thus, it is possible that any alleged irreparable harm to Admiral has already
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Case No.: 5:12-cv-01266-LHK
ORDER DENYING EX PARTE APPLICATION FOR TEMPORARY RESTRAINING ORDER

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occurred and that the Court is unable to offer Admiral any relief. Moreover, to the extent

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Admiral’s choice of action on March 15 or 17, 2012 subjects it to any future harm, on this record

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there appears to be sufficient time for the Court to revisit the merits of Admiral’s motion with the

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benefit of Defendants’ views.

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Thus, Admiral has not made a “clear showing” that it is likely to face “immediate” and
“irreparable harm” in the absence of a TRO, Winter, 555 U.S. at 21, let alone that it will face

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“immediate and irreparable injury . . . before [Defendants] can be heard in opposition.” Fed. R.

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Civ. P. 65(b)(1). Failure to show irreparable harm is alone sufficient to deny Admiral the

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extraordinary and drastic remedy of an ex parte TRO. Ctr. for Food Safety, 636 F.3d at 1174.

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United States District Court
For the Northern District of California

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Accordingly, Admiral’s ex parte application for a TRO is DENIED WITHOUT PREJUDICE.

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IV.

CONCLUSION
For the reasons set forth above, the Court DENIES WITHOUT PREJUDICE Admiral’s ex

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parte application for a TRO. By 5:00 p.m. on March 21, 2012, Admiral shall personally serve a

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copy of this Order on all Defendants and file a proof of service with the Court. By 5:00 p.m. on

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March 22, 2012, Admiral may file and personally serve on all Defendants a renewed motion and

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declaration informing the Court whether its TRO application was mooted on March 15 or 17, 2012,

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or any time since then. If Admiral serves and files a renewed TRO application, Admiral shall file a

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proof of service by March 22, 2012, and Defendants will have until 5:00 p.m. on March 27, 2012

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to file and personally serve an opposition, and file a proof of service. If the matter is not suitable

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for determination on the papers, the Court will set a hearing at the earliest possible time. In the

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meantime, the parties are encouraged to resolve this matter without this Court’s intervention.

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IT IS SO ORDERED.

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Dated: March 20, 2012

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_________________________________
LUCY H. KOH
United States District Judge

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Case No.: 5:12-cv-01266-LHK
ORDER DENYING EX PARTE APPLICATION FOR TEMPORARY RESTRAINING ORDER