Primo Broodstock, Inc. v. American Mariculture, Inc. et al

Filing 25

OPINION AND ORDER denying 21 Plaintiff's Motion for Temporary Restraining Order; taking under advisement 21 Plaintiff's Alternative Motion for Preliminary Injunction. Defendants shall file a response to 21 Plaintiff's Alte rnative Motion for Preliminary Injunction on or before 5 p.m. on Tuesday, February 7, 2017. A hearing on the Alternative Motion for Preliminary Injunction is set for Friday, February 10, 2017 at 9:30 a.m. in Fort Myers Courtroom 6A before Judge John E. Steele. Signed by Judge John E. Steele on 1/29/2017. (KP)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
PRIMO BROODSTOCK, INC.,
Texas corporation,

a

Plaintiff,
v.

Case No: 2:17-cv-9-FtM-29CM

AMERICAN MARICULTURE, INC.,
a
Florida
corporation,
AMERICAN PENAEID, INC., a
Florida
corporation,
ADVANCED
HATCHERY
TECHNOLOGY,
INC.,
ROBIN
PEARL, and CHARLES T. TUAN,
Defendants.
OPINION AND ORDER
This matter comes before the Court on Plaintiff's Renewed
Motion

for

Temporary

Restraining

Order

or,

Alternatively,

Preliminary Injunction (Doc. #21) filed on January 26, 2017.

For

the reasons set forth below, Plaintiff’s Motion for Temporary
Restraining

Order

is

denied,

and

Plaintiff’s

Motion

for

Preliminary Injunction is taken under advisement.
I.
This

case

arises

out

of

Defendants’

allegedly-unlawful

marketing, breeding, and overseas distribution of live, diseaseresistant
engineered

shrimp
by

(the

Plaintiff

Primo
Primo

Shrimp)

that

Broodstock,

were
Inc.

genetically
The

factual

allegations

relevant

to

Plaintiff’s

request

for

ex

parte

injunctive relief are as follows: 1
On

January

1,

2015,

Plaintiff

and

Defendant

American

Mariculture, Inc. (AMI) entered into an agreement (the Grow Out
Agreement) (Doc. #20-2) under which Plaintiff was permitted to use
AMI’s large shrimp growing facility located in St. James City,
Florida

to

study

and

worldwide distribution. 2

breed

its

“superior”

Primo

Shrimp

for

In exchange, AMI was allowed to “grow

out” the animals and then, once they had reached a certain weight,
AMI would sell them back to Plaintiff at fixed prices.

AMI was

prohibited from selling or transferring live Primo Shrimp to others
without Plaintiff’s permission, but AMI could kill and sell any
Primo Shrimp that Plaintiff did not repurchase.
Agreement

stated

that

intellectual property, 3

all

Primo

Shrimp

were

The Grow Out
Plaintiff’s

and that all live Primo Shrimp were

Plaintiff’s physical property.

1

Plaintiff’s nine-count Amended Complaint (Doc. #20) asserts
claims for breach of contract; conversion; defamation; trade
secret misappropriation under the Defend Trade Secrets Act; trade
secret misappropriation under the Florida Trade Secrets Act;
unfair competition under the Lanham Act; unfair competition under
Florida common law; violation of the Florida Unfair and Deceptive
Trade Practices Act; and unjust enrichment.
2

Prior to entering into the Grow Out Agreement, Plaintiff and AMI
signed a non-disclosure agreement (Doc. #20-1).
3

The Complaint alleges that Plaintiff successfully guarded against
intellectual property theft by never providing purchasers with a
“breeding pair” (i.e. a male and a female shrimp from the same
genetic family).
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The business relationship subsequently broke down.

According

to the Amended Complaint, in January 2016, Defendants threatened
to kill all live Primo Shrimp that were at the AMI facility, and
Plaintiff filed suit in state court seeking a temporary restraining
order.

The parties subsequently agreed to settle the dispute out

of court and signed a one-page handwritten “Term Sheet” (Doc. #203) providing Plaintiff until April 30, 2016 (three months) to
remove its live shrimp from AMI’s facility.

Ultimately, Plaintiff

left approximately 46,000 adult shrimp at the facility because it
could not afford to repurchase them, as well as 650,000 young
shrimp that were too small to buy back.

Plaintiff claims the

parties understood that, consistent with the terms of the Grow Out
Agreement, Defendants could kill and sell the dead shrimp, but
could not breed or sell live shrimp.
In late July 2016, Plaintiff learned that AMI’s newly-formed
wholly-owned subsidiary, Defendant American Peneaid, Inc. (API),
was attempting to attract buyer interest for live Primo Shrimp,
particularly in China.

At the time, live Primo Shrimp were

available for purchase in China only through Plaintiff’s exclusive
distributor, Haimao Group.

Plaintiff’s attorney sent AMI a cease

and desist letter on August 30, 2016 (Doc. #20-5).

The response

sent by AMI’s attorney on September 16, 2016 (Doc. #20-6) rebuffed
Plaintiff’s claim of continued rights in the Primo Shrimp left
behind and stated that the animals were instead AMI’s to sell.

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Despite this clear pronouncement as to Defendants’ view of
their

ownership

rights

over

the

Primo

Shrimp

left

at

AMI’s

facility, and even after learning that Defendants were going to
hold (or had held) a Primo Shrimp sales presentation in China on
November 3, 2016, Plaintiff waited until January 9, 2017 to file
its original Complaint (Doc. #1) and first ex parte Motion for
Temporary Restraining Order (Doc. #2).

The Motion for TRO sought

to

of

enjoin

Defendants,

for

a

period

fourteen

days,

“from

shipping, selling or otherwise removing or relocating any shrimp
broodstock in their possession or under their control, whether
directly or indirectly, pending determination of whether such
broodstock are descended or derived from Primo’s broodstock.”
(Id. p. 36.)

The Court denied the Motion without addressing

Plaintiff’s likelihood of success on its three claims, because the
materials filed with the Complaint indicated that the imminent,
irreparable harm Plaintiff alleged – unauthorized shipment of live
Primo

Shrimp

for

breeding

to

China

–

had

seemingly

already

occurred, and since there was no indication that future shipments
were imminent. 4 (Doc. #9, pp. 4-5.)
On January 26, 2017, Plaintiff filed the Renewed Motion for
Temporary Restraining Order and Alternative Motion for Preliminary

4

The Motion for TRO also failed to “set forth facts” allowing the
Court to determine an appropriate bond amount. See M.D. Fla. R.
4.05(b)(4)(ii).
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Injunction (Doc. #21) that is now before the Court. 5

The Motion

claims that “plaintiff urgently needs the protections of a TRO to
stop

Defendants

increase

in

from

implementing

shipments

of

Primo

their

breeder

planned
shrimp

exponential

following

the

conclusion of the Chinese Spring Festival [on February 2, 2017].”
(Doc. #21, ¶¶ 13, 51.)

Plaintiff specifically requests an order

enjoining Defendants from, inter alia, selling, soliciting the
sale of, or marketing Primo Shrimp.
II.
Having reviewed Plaintiff’s Amended Complaint, the Renewed
Motion for TRO, and the various Exhibits and Affidavits attached
to each, the Court must deny Plaintiff’s second request for a
temporary restraining order. While the Court fully appreciates
that there are significant legal rights, and perhaps billions of
dollars, at stake, Plaintiff has once again failed to convincingly
articulate its entitlement to the extraordinary remedy of ex parte
injunctive

relief.

Thousands

already arrived in China.

of

Primo

Shrimp

breeders

(Docs. ## 20, ¶ 44; 21-5.)

have

At the same

time, there is no plausible indication that additional shipments

5

While the Amended Complaint and the Renewed Motion for TRO have
been served on counsel for Defendants AMI, API, and Robin Pearl,
it does not appear that Defendants Advanced Hatchery Technology,
Inc. and Charles T. Tuan have been properly served under Rule 4.
(Docs. ## 19, 22.)
Counsel for Defendants AMI, API, and Robin
Pearl entered their appearance on January 17, 2017 (Doc. #16.)
- 5 -

will occur before Defendants have the opportunity to be heard on
this matter. 6
More importantly, even if there is an emergency, it is one
Plaintiff should have sought to prevent months ago.

Plaintiff

knew since at least as early as mid-September that Defendants
believed the live Primo Shrimp were their property to sell after
being left at AMI’s facility.

Plaintiff also had evidence that

Defendants had been actively looking (even if not yet “attempting”)
to sell Primo Shrimp breeders to the market since at least as early
as July 2016.

Yet Plaintiff did not act to protect any continued

legal rights in the animals. 7

Having failed to do so, Plaintiff

is not now entitled to ex parte injunctive relief.

Mission Power

Eng'g Co. v. Cont'l Cas. Co., 883 F. Supp. 488, 492 (C.D. Cal.
1995) (“What showing is necessary to justify ex parte relief?
First, the evidence must show that the moving party's cause will

6

Plaintiff’s contention that an ex parte injunction is needed
because Primo Shrimp breeders will be distributed throughout China
in early February is based on an English translation of a January
18, 2017 article in a Chinese aquaculture trade publication (Doc.
#20-8).
Rather than contain any such statement, however, the
translated document says that Defendants predict the Primo Shrimp
already in China “will have the baby shrimp after the Spring
Festival.” (Id. p. 13; see also Doc. #20, ¶ 76.)
7

Plaintiff’s failure to act is particularly inexplicable in light
of the parties’ contentious relationship and prior litigation
history. In his affidavit, Vice President Randall Aungst explains
that Primo delayed seeking injunctive relief because, until
recently, there was insufficient evidence showing that AMI was
attempting to sell live Primo Shrimp. (Doc. #21-2, ¶¶ 31, 49.)
Maybe so, but that does not mean Primo could not have sought
declaratory relief as to the parties’ rights and obligations under
the Term Sheet, after receiving the letter from AMI’s attorney.
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be

irreparably

prejudiced

if

the

underlying

motion

is

heard

according to regular noticed motion procedures. Second, it must be
established that the moving party is without fault in creating the
crisis that requires ex parte relief, or that the crisis occurred
as a result of excusable neglect.”); Allstate Ins. Co. v. Gardner,
No. 6:14-CV-681-ORL-31GJK, 2014 WL 12575828, at *2 (M.D. Fla. May
2, 2014) (“Delay in seeking a TRO undercuts the proposition that
there is a threat of irreparable injury.”).
The Court does, however, find it appropriate to expedite
Defendants’ response to, and a hearing on, Plaintiff’s Alternative
Motion for Preliminary Injunction.

Defendants are hereby ordered

to respond to Plaintiff’s Motion for Preliminary Injunction on or
before 5 p.m. Tuesday, February 7, 2017.

A hearing on the Motion

for Preliminary Injunction is set for Friday, February 10, 2017 at
9:30 a.m. in Fort Myers Courtroom 6A before Judge John E. Steele.
Accordingly, it is hereby
ORDERED:
1.

Plaintiff's Renewed Motion for Temporary Restraining

Order (Doc. #21) is DENIED.
2.

Plaintiff’s

Alternative

Motion

Injunction (Doc. #21) is taken under advisement.

for

Preliminary

Defendants shall

file a response thereto on or before 5 p.m. on Tuesday, February
7, 2017.

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3.

A hearing on the Motion for Preliminary Injunction is

set for Friday, February 10, 2017 at 9:30 a.m. in Fort Myers
Courtroom 6A before Judge John E. Steele.
DONE and ORDERED at Fort Myers, Florida, this 29th day of
January, 2017.

Copies:
Counsel and Parties of Record

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