5810 SCATTERFIELD ROAD, LP v. MOTEL 6 OPERATING L.P.

Filing 45

ORDER on Motion to Stay (Dkt. 15): The motion to stay (Dkt. 15) is DENIED IN PART AND GRANTED IN PART as provided in the discussion above. The court will apply Ind. Code § 32-30-3-1 et seq. in determining the question of preliminary possession ***SEE ORDER FOR ADDITIONAL INFORMATION***. Signed by Magistrate Judge Debra McVicker Lynch on 6/27/2014. (DW)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
INDIANAPOLIS DIVISION
5810 SCATTERFIELD ROAD, LP,
A Nevada Limited Partnership,
Plaintiff,
vs.
MOTEL 6 OPERATING, L.P. ,
A Texas Limited Partnership,
Defendant.

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No. 1:14-cv-00327-RLY-DML

Order on Motion to Stay (Dkt. 15)
Plaintiff 5810 Scatterfield Road, LP (“5810”) originally filed this action in the
Madison Circuit Court against Motel 6 Operating L.P. (“Motel 6”). 5810, the owner
of commercial real estate in Madison County,1 alleges that Motel 6, its lessee, has
breached the lease by failing to maintain the property in the condition required by
the lease and by refusing 5810 access to the property so it could perform the work
necessary to bring the property to the condition required by the lease.
Along with the filing of the complaint, 5810 filed a motion for preliminary
determination of possession under Ind. Code § 32-30-3-1 et seq., and the Madison
Circuit Court set that motion for hearing.
Before the scheduled hearing, Motel 6 removed the case to this court on the
basis of the parties’ diversity of citizenship. 5810 then requested this court to set its

1

Motel 6 challenges 5810’s standing to seek relief.

motion for preliminary determination of possession for an expedited hearing. The
court did so, and following two continuances, now has the hearing set for July 10,
2014, and, if necessary, July 15, 2014.
Motel 6 filed a motion to stay the expedited hearing (Dkt. 15) for two reasons.
First, it maintains that 5810 lacks standing to seek relief in this case. The parties
have briefed the standing issue and have also advised the court that they have
additional relevant facts to present on the standing issue. The court DENIES IN
PART the motion to stay to the extent it seeks a determination of standing in
advance of the hearing. The court will hear any further evidence and argument on
the standing issue at the scheduled hearing. The second basis for Motel 6’s motion
to stay is to give the parties the opportunity to brief and obtain a ruling on the law
that will apply to 5810’s motion for preliminary determination of possession. The
motion is GRANTED IN PART to the extent that the court has in fact delayed the
hearing to permit the briefing and the decision that follows.
The substantive question presented by the second ground for Motel 6’s
motion to stay is whether the standard established by Ind. Code § 32-30-3-1 et seq.
(which the court will refer to simply as “the Indiana statute”) will govern the court’s
determination of 5810’s right to preliminary possession or whether, as Motel 6
urges, 5810 must establish the right to preliminary injunctive relief under the fourfactor balancing test generally employed under Fed. R. Civ. P. 65. The parties

2

maintai that the resolution of that iss will aff
in
n
sue
fect the sco of evide
ope
ence for the
e
hearing and the co
g
ourt’s analy
ysis of that evidence.2
t
.
Having care
H
efully consi
idered the parties’ ar
rguments a author
and
rities, the c
court
concludes that it will apply the Indiana statute in determin
w
t
a
n
ning 5810’s right to
prelimin
nary possession. The parties ha argued their resp
e
ave
d
pective posi
itions with
hin
the fram
mework of Erie Railro Co. v. Tompkins, 304 U.S. 6 (1938), b the cou
E
oad
T
64
but
urt
finds as a threshol matter that the problem add
s
ld
t
dressed by E
Erie and it progeny is
ts
not pres
sented here Moreove an anal
e.
er,
lysis within the Erie f
n
framework would
k
neverth
heless yield the conclu
d
usion that the Indian a statute s
t
should appl Finally
ly.
y,
and imp
portantly, the Indiana statute permits the court to co
t
a
p
e
onsider a b
broad
spectrum of eviden in mak
m
nce
king its determination of prelim
n
minary poss
session and is
d
thus not markedly different from the general prel
t
y
g
liminary in
njunction s
standard.
A.

The state law and fe
T
l
ederal law are not in conflic
w
ct.
The parties’ positions are based on the assu
T
umption th federal law,
hat
l

specifica Fed. R. Civ. P. 65 would su
ally
R
5,
upply a diff
ferent stan
ndard for preliminary
y
relief th the Ind
han
diana statu thus im
ute,
mplicating t need to determin whether the
the
o
ne
Indiana statute is procedura (and wou therefor give way to Rule 6 or wheth
a
al
uld
re
y
65)
her
it is sub
bstantive (a would therefore be applied in lieu of t standar that
and
b
the
rd
prevails under Ru 65). Tha assumpt
s
ule
at
tion is inco
orrect.3

But counsel should no as explained in se
B
l
ote,
ection C be
elow, that t court does
the
not who embrac that view
olly
ce
w.
2

And it is too simplistic a descript
A
o
c
tion of the Erie princ
ciple. See, e
e.g., Guara
anty
Trust Co. of New York v. Yor 326 U.S 99 (1945)
C
Y
rk,
S.
).
3

3

Federal Rule of Civil Procedure 65 has these requirements for a preliminary
injunction: notice (subsection (a)(1)), a hearing (subsection (a)(2)), and security
(subsection c). The balancing test to which the parties refer (likelihood of success on
the merits, irreparable harm, balance of equities, public interest) is not part of the
federal rule; it is a standard applied by federal courts (and state courts for that
matter) in most preliminary relief contexts. But the federal courts have recognized
that the applicable standard to apply to requests for preliminary relief may be
altered when a statute supplies a different standard.
The United States Supreme Court has expressly recognized this principle in
Mac’s Shell Service, Inc. v. Shell Oil Products Co. LLC, 559 U.S. 175, 193 n. 12
(2010) (a statute can substantially relax the normal standard for obtaining
preliminary-injunctive relief). See also eBay Inc. v. MercExchange, L.L.C., 547 U.S.
388, 391-93 (2006) (acknowledging the possibility that a statute may alter the
general preliminary injunction standard but ultimately determining that the
statutory standard at issue there was not different). A Ninth Circuit decision also
illustrates the principle that the generally applied preliminary injunction standard
may give way to a more relaxed standard supplied by statute. See MHC, Inc. v.
Oregon Dept. of Revenue, 66 F.3d 1082, 1086-87 (9th Cir. 1995). Indeed this court,
though not expressly addressing the principle, has grafted the standard supplied by
the Indiana statute onto the preliminary relief inquiry. Kinko’s Graphics Corp. v.
Townsend, 803 F.Supp. 1450 (S.D. Ind. 1992).

4

In briefing this issue, the parties have pitted the gen
n
t
s
neral standard for
obtainin a prelim
ng
minary inju
unction in federal cour against the standa
f
rt
ard
accompa
anying the Indiana st
e
tatute and have iden
ntified a con
nflict requi
iring Erie
analysis But beca
s.
ause the co
ourt finds no Erie con
n
nflict, the standard se out in th
et
he
Indiana statute sh
a
hould inform the cour determ ination of t preliminary
rt’s
the
possessi issue.
ion
B.

on.
An Erie an
A
nalysis wo
ould yield the same conclusio
e
In Hanna v. Plumer, 380 U.S. 46 (1965), t Suprem Court fu
n
3
60
the
me
urther refin
ned

and exp
plained the rationale and application of the Erie prin
a
nciple. Han is
nna
particul
larly instru
uctive here because it addressed the application of a Federal R
e
t
d
Rule
of Civil Procedure in light of a conflicting state la
f
aw.
As a preliminary matt Hanna explains t
A
ter,
a
that when the questio is the
on
applicab
bility of a Federal Ru of Civil Procedure, it is not th Erie tes but rath
F
ule
,
he
st,
her
the Rule Enablin Act that governs.4 Hanna inv
es
ng
volved a cle conflict between t
ear
t
the
provisio of a fed
ons
deral rule (R
Rule 4(d)(1 and stat law. Bu as explai
1))
te
ut
ined in the
precedin section, Rule 65 do not include any la
ng
oes
anguage th would c
hat
create a
conflict with the In
ndiana statute, so thi court wi ll move to the primar
is
ry
consider
rations Ha
anna direct the lower courts to apply in th Erie ana
ts
r
he
alysis.
First, the Court explai
F
ined that the Erie ru le “is roote in part in a realiza
t
ed
ation
that it would be un
w
nfair for th characte or result of a litigation mater
he
er
t
rially to dif
ffer
because the suit had been br
e
h
rought in a federal co
ourt.” Id. a 467. If th court
at
he
Under that test, state law must yield to the Federal R
U
e
Rule of Civ Procedu
vil
ure
in most circumstances.
4

5

assumes for a mom
ment—as the parties do—that p
preliminary possessio will be
y
on
significa
antly more difficult fo 5810 to obtain if th Indiana statute do not app
e
or
o
he
oes
ply,
then the fact that this case is now pend
e
s
ding in fede
eral court w alter t “charac
will
the
cter
or resul of the lit
lt”
tigation.
Second, Han directs courts to consider w
S
nna
s
whether the failure to apply stat
e
o
te
law wou influence choice of forum. Id Would t choice o an owne of proper
uld
d.
the
of
er
rty
in India to file in federal court or for a tenant d
ana
i
c
r
defendant t remove the case to
to
o
federal court be in
nfluenced by federal courts’ rejec
b
c
ction of the prelimina possess
e
ary
sion
remedy afforded by the India statute This cou thinks that is ver likely.
b
ana
e?
urt
ry
For these re
F
easons, the court find that refu
e
ds
usal to apply the Indi
iana statut
te
would be inimical to the prin
b
nciples of Erie and its progeny.
E
s
C.

The Indian statute permits a broad s cope of in
T
na
e
nquiry by the court at
t
th prelim
he
minary pos
ssession hearing.
h
All this said the court cautions the parties that it wo
A
d,
t
t
s
ould be a m
mistake to

assume that the preliminary possession standard supplied b the Indi
y
n
d
by
iana statut is
te
d
rom the gen
nerally app
plicable sta
andard for preliminar injunctiv
ry
ve
wholly different fr
relief or is, in Motel 6’s estim
r
mation, “flim
msy.” (See Dkt. 15 at 6.) First, the statut
e
t
,
te
permits the tenant “to show cause” why it should not be rem
s
y
d
moved from the prope
m
erty.
And as the Indian Supreme Court has recently e
t
na
e
s
emphasized, the tena may assert
ant
as a def
fense “‘any state of fac which would invo the aid of equity f relief
cts
w
oke
for
against the claim.’” Morton v. Ivacic, 898 N.E.2d 1196, 1200 (Ind. 200 (quoting
8
08)
g
Olds v. Hitzemann 220 Ind. 300, 42 N. 35 (194
n,
.E.
42)).

6

Second, in light of the issues presented by the claims of breach in this case,
the “reasonable probability” of entitlement to possession inquiry will likely
implicate a broad range of evidence and considerations.

Conclusion
The motion to stay (Dkt. 15) is DENIED IN PART AND GRANTED IN PART
as provided in the discussion above. The court will apply Ind. Code § 32-30-3-1 et
seq. in determining the question of preliminary possession.
So ORDERED.
____________________________________
Debra McVicker Lynch
United States Magistrate Judge
Southern District of Indiana

06/27/2014
Date: __________________

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