West Hills Farms, LLC v. ClassicStar, LLC et al
Filing
821
MEMORANDUM OPINION & ORDER: (1) Dfts Geostar Corporation, Ferguson, and Robinson's Emergency Motion to Vacate Temporary Injunction or, in the Alternative, Stay the Temporary Injunction and Hearing (818) in case 5:06-cv-00243-JMH-REW, (2528) in case 5:07-cv-00353-JMH-REW[DE 818] is GRANTED IN PART and DENIED IN PART; (2) That paragraphs 1, 2, and 3 of the Court's August 16, 2013, Order, (816) in case 5:06-cv-00243-JMH-REW, are VACATED; (3) That all post-judgment discovery disputes in this matter are REFERRED to Magistrate Judge Robert E. Wier for all necessary proceedings and orders for resolution. Signed by Judge Joseph M. Hood on 8/23/2013. Associated Cases: 5:07-cv-00353-JMH-REW, 5:06-cv-00243-JMH-REW(STC)cc: COR
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF KENTUCKY
CENTRAL DIVISION at LEXINGTON
WEST HILLS FARMS, LLC,
)
)
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)
)
)
)
)
)
Plaintiff,
v.
CLASSICSTAR, LLC, et al.,
Defendants.
Civil Case No.
06-cv-243-JMH
MDL NO. 1877
MEMORANDUM OPINION & ORDER
***
The
Court,
having
considered
Defendants
Geostar
Corporation, Tony Ferguson, and Thom Robinson’s Emergency Motion
to Vacate Temporary Injunction or, in the Alternative, Stay the
Temporary
Response
Injunction
to
Information
and
Plaintiffs’
and
Asset
Hearing
Emergency
Freeze
[DE
818]
Motion
Injunction
as
for
well
as
its
Post-Judgment
[820]
and
being
adequately advised, concludes that it has authority to enter the
injunctive relief requested by Plaintiffs if, ultimately, the
instant
case
demands
such
presented to the Court.
relief
on
the
facts
which
are
Accordingly, it declines to afford the
relief requested by Defendant’s Motion to Vacate, at least in
part, as set forth below.
First and foremost, this matter is sought and litigated
post-judgment.
Plaintiffs
are
Defendants are judgment debtors.
judgment
creditors,
and
The Court does not believe
that Plaintiffs’ most recent and post-judgment motion actually
1
asks this Court to substitute equitable relief for the money
judgment
it
equitable
sought
relief
and
obtained.
solely
on
the
Rather,
grounds
Plaintiffs
that
the
seek
means
of
obtaining the legal relief to which they are now entitled to by
virtue of this Court’s judgment -- execution on the judgment by
use
of
law
to
jurisdictions
reach
around
judgment
the
country
debtors’
–
are
point to afford them meaningful relief.
assets
in
insufficient
various
at
this
They argue that the
legal ability to execute on the judgment, alone, is insufficient
to afford them relief because they believe Defendants seek to
waste, dissipate, or secret their assets in order to frustrate
Plaintiffs’ ability to recover on the judgment obtained.
preliminary
injunction
that
they
seek
from
this
Court
The
would
serve as no more than a temporary stop-gap measure to insure
that no waste or dissipation of assets frustrates their efforts
to obtain any legal remedy to which they are due.
In this post-judgment context and on the request for relief
made by Plaintiffs, it is irrelevant whether Plaintiffs could
have obtained equitable relief on their claim instead of a money
judgment.
The fact of the matter is that the money judgment was
obtained,
and
this
Court
may
issue
effectuate that order of judgment.
all
necessary
orders
to
Clearly, this Court may not
have jurisdiction over the assets sought, depending on where
they are located, but it has jurisdiction over the defendants
2
who may waste, dissipate, or secret those assets.
the
Court
appreciates
Defendants’
Thus, while
well-articulated
position
against the imposition of equitable relief in the pre-judgment
phase
of
proceedings
based
arguments no longer apply.
upon
a
civil
RICO
claim,
those
The Court reaches no conclusion on
whether a pre-judgment equitable remedy in the form of an asset
freeze was available to Plaintiffs in this matter.
Ultimately, the Court concludes that it has authority to
issue
any
necessary
injunctive
jurisdiction” as set forth above.
relief
“in
aid
of
its
See, e.g., Meyers v. Moody,
723 F.2d 388 (5th Cir. 1984) (approving use of post-judgment
preliminary
injunction
to
freeze
assets
where
“waste,
dissipation, or transfer of assets by [judgment debtor had] a
direct
impact
on
appellee’s
potential
ultimate
recovery”).
Thus, the question for this Court is not whether it may enter a
preliminary injunction freezing assets, for the Court concludes
that it does, but whether it should do so in this instance.
Plaintiffs
must
bear
the
burden
required
for
entry
of
a
preliminary injunction under Fed. R. Civ. P. 65 and demonstrate
their “(1) likelihood of success on the merits; (2) whether
[they]
will
injunction;
suffer
(3)
irreparable
whether
issuance
injury
of
a
without
a
preliminary
preliminary
injunction
would cause substantial harm to others; and (4) whether the
public interest would be served by issuance of a preliminary
3
injunction.”
McNeilly v. Land, 684 F.3d 611, 615 (6th Cir.
2012) (citing American Imaging Services, Inc. v. Eagle–Picher
Indus., Inc. (In re Eagle–Picher Indus., Inc.), 963 F.2d 855,
858 (6th Cir.1992); Granny Goose Foods, Inc. v. Teamsters, 415
U.S. 423, 441 (1974).
At the end of the day or at least by the end of the hearing
scheduled in this matter, Plaintiffs must demonstrate to this
Court
on
Defendants
what
grounds
have
they
already
wish
the
Court
in
some
engaged
to
conclude
sort
of
that
waste,
dissipation, or secreting of assets or that there is a real
likelihood
detriment
that
of
they
the
will
ability
engage
of
in
actions
--
legal
the
such
process
to
to
the
afford
Plaintiffs’ the relief due under the judgment obtained from this
Court.
While the burden is on Plaintiffs to do so, Defendants
are welcome to short cut the process of litigating this matter
by providing some sort of assurance acceptable to Plaintiffs
that they will not waste, dissipate, or secret their assets,
whether through posting some sort of bond or voluntarily placing
assets in an appropriate account, etc.
Further, with respect to some parties’ failure to respond
adequately to post-judgment discovery requests, Defendants have
provided a response to the Plaintiffs’ argument that they have
failed
to
adequately
respond
to
4
post-judgment
discovery
–
indicating that they believe they are justified in responding as
they have.
The Court shall refer that and any other post-
judgment discovery dispute in this matter to Magistrate Judge
Robert E. Wier for all necessary proceedings and orders for
resolution in due time.
While the Court still expects that the
parties will engage in discovery in good faith, the Court shall
vacate paragraphs 1, 2, and 3 of its August 16, 2013, Order [DE
816], allowing the issue of Plaintiffs’ motion to compel raised
in their August 7, 2013, Order to remain pending until such time
as
the
parties
can
present
the
discovery
dispute
raised
by
Plaintiffs’ Motion and Defendant’s response to the Magistrate
Judge for resolution.
Accordingly, IT IS ORDERED:
(1)
and
Thom
That
Defendants
Robinson’s
Geostar
Emergency
Corporation,
Motion
to
Tony
Ferguson,
Vacate
Temporary
Injunction or, in the Alternative, Stay the Temporary Injunction
and Hearing [DE 818] is GRANTED IN PART and DENIED IN PART;
(2)
That paragraphs 1, 2, and 3 of the Court’s August 16,
2013, Order [DE 816] are VACATED;
(3)
That
all
post-judgment
discovery
disputes
in
this
matter are REFERRED to Magistrate Judge Robert E. Wier for all
necessary proceedings and orders for resolution.
This the 23rd day of August, 2013.
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