1 2
3 4 5 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF WASHINGTON 6
7 ADM MILLING CO., NO. 2:20-CV-0343-TOR 8 Plaintiff, ORDER DENYING PLAINTIFF’S 9 v. MOTION FOR TEMPORARY RESTRAINING ORDER, MOTION 10 COLUMBIA PLATEAU TO SHORTEN TIME, AND MOTION PRODUCERS, L.L.C. d/b/a TO EXPEDITE DISCOVERY 11 SHEPHERD’S GRAIN,
12 Defendant. 13
14 BEFORE THE COURT are Plaintiff’s Motion for Temporary Restraining 15 Order (ECF Nos. 3, 10-1), Plaintiff’s Motion to Shorten Time on Temporary 16 Restraining Order and Motion to Expedite Discovery (ECF No. 8), and Plaintiff’s 17 Motion to Expedite Discovery and Preservation of Evidence (ECF No. 9). These 18 matters were submitted for consideration with oral argument on September 28, 19 2020. Robert J. Maguire, Arthur A. Simpson, Jordan Clark, and Sarah Baugh 20 appeared on behalf of Plaintiff. Bryce J. Wilcox, Sarah E. Elsden, Caleb A. Hatch, 1 and Mark Swenson appeared on behalf of Defendant. The Court has reviewed the 2 record and files herein, considered the parties’ oral argument, and is fully
3 informed. For the reasons discussed below, Plaintiff’s Motion for Temporary 4 Restraining Order (ECF No. 10-1), Plaintiff’s Motion to Shorten Time on 5 Temporary Restraining Order and Motion to Expedite Discovery (ECF No. 8), and
6 Plaintiff’s Motion to Expedite Discovery and Preservation of Evidence (ECF No. 7 9) are DENIED. 8 BACKGROUND 9 This case concerns Plaintiff’s ability to enforce an exclusive contract
10 regarding the milling of sustainable wheat. ECF No. 1. Plaintiff seeks a temporary 11 restraining order (“TRO”) enjoining Defendant from contracting with a third-party 12 competitor and enforcing Defendant’s contract with Plaintiff. ECF No. 10-1.
13 Plaintiff also seeks to shorten time on its motion to expedite discovery. ECF Nos. 14 8-9. The following facts are undisputed, except where noted. 15 Plaintiff ADM Milling Co. (“ADM”) operates flour mills throughout the 16 world. ECF No. 5 at 2, ¶ 2. ADM has two flour mills in Washington State, at
17 Spokane and Cheney. ECF No. 6 at 2, ¶ 4. Plaintiff’s facilities mill various types 18 of products, including flours, whole grains, dry sweeteners, and wheat starches. Id. 19 at 3. Defendant Columbia Plateau Producers, L.L.C., doing business as Shepherd’s
20 Grain (“CPP” or “SG”), is a Washington agricultural co-op comprised of thirty- 1 five farming families that focus on “farm-to-fork and sustainable agricultural 2 practices.” ECF No. 18 at 2; ECF No. 6 at 2, ¶ 5; ECF No. 17 at 3, ¶ 7. For the
3 last fourteen years, Defendant has exclusively sold grain to Plaintiff. ECF No. 10- 4 1 at 3. Plaintiff mills the grain and sells it to various distributors and businesses. 5 ECF No. 18 at 3. Plaintiff sells both sustainable and non-sustainable wheat from
6 Defendant, as well as from other sources. ECF No. 18 at 3. 7 On February 12, 2019, Plaintiff entered an exclusive milling contract with 8 Defendant for a period of three years, renewable in three-year increments. ECF 9 No. 10-1 at 3; ECF No. 5 at 3-4, ¶¶ 5-7. Either party could terminate the contract
10 with thirty-days prior written notice if the other party materially breached the 11 contract and failed to cure within the thirty-day period. ECF No. 5 at 4, ¶ 8. Of 12 note in this agreement, Plaintiff agreed to mill all Defendant’s grain as it had
13 capacity for, or in the event it lacked capacity, agreed to consent to a third-party 14 miller. ECF No. 5 at 3, ¶ 6; ECF No. 5-1. 15 In May 2020, Plaintiff notified Defendant that it was unable to process 16 Defendant’s wheat at its Los Angeles, California mill. ECF No. 18 at 3. Relying
17 on this mill to process a portion of its wheat, Defendant repeatedly requested that 18 Plaintiff mill at this location or consent to a third-party miller. Id.; ECF No. 17 at 19 13, ¶ 42. On June 30, 2020, Defendant requested a third party mill the excess
20 grain. ECF No. 18 at 4. Defendant alleges Plaintiff did not respond to this request 1 in thirty days. ECF No. 18 at 4. Plaintiff alleges that it orally consented, and then 2 provided written consent outside of the thirty-day window. ECF No. 5 at 7, ¶ 23.
3 On August 1, 2020, Defendant contacted customers to notify them that it 4 was switching to a third-party exclusive miller. ECF No. 10-1 at 4. The letter 5 states “[SG] is excited to announce we are partnering with [a third party] to mill
6 our World Class Wheat into our [SG] flour products, except for our semolina, 7 beginning on October 1, 2020.” ECF No. 5-2 at 5. In announcing the transition, 8 Defendant acknowledged “[ADM] has been a good partner for many years, but the 9 time has come for [SG] to take the next step towards reaching our growth
10 potential.” Id. 11 On August 4, 2020, Plaintiff received notice of contract termination from 12 Defendant, effective October 1, 2020, due to Plaintiff’s allegedly deficient
13 performances. ECF No. 6-2 at 2. On August 6, 2020, Plaintiff sent a letter to 14 Defendant to dispute the deficient performance and sought assurances of 15 performance. ECF No. 10-1 at 5; ECF No. 6-3 at 2. Between August and 16 September, two customers contacted Plaintiff regarding Defendant’s new milling
17 contract, expressing concern or considering canceling contracts. ECF No. 5 at 12, 18 ¶¶ 33, 35. 19 On September 11, 2020, Defendant notified Plaintiff of the following
20 allegedly deficient performances: 1 1. Closing of ADM’s Los Angeles Milling Facility, with request by CPP for consent to use-third party miller, not timely granted by ADM. CPP in 2 middle of planning major expansion in Southern California.
3 2. ADM not equipped to produce for CPP’s pizza flour, without a year’s delay, capital expenditures of over $600,000, and guarantees of CPP. 4 3. Label changes to replace “malted barley” with “enzyme,” resulting in 5 customer confusion, sizable reprinting costs, and lost customers.
6 4. A year’s delay in ADM finalizing the UNFI Distributor Contract, costing product sales and impacting distributor relationship. Same with KeHE 7 Distribution Contract, causing CPP to be the distributor for Town and Country Markets/Central Markets. Same with DPI Distribution Contract, 8 still no contract in place.
9 5. As to 5-pound bags of flour, CPP informed that DM Spokane is currently running at 90% capacity and for upcoming holiday season will be at 100% 10 capacity, meaning no capacity for CPP to increase product production of 5- pound bags of flour at ADM Spokane, with no plan presented by ADM to 11 accommodate CPP’s product growth in its market areas for this size bag of flour. ADM nonresponsive to CPP’s desire to sell for first of 2021 year and 12 product availability to fill orders for 5-pound bags of flour.
13 6. ADM recently asked for CPP to share its research data on no till farming practices, followed by an announcement by ADM of a new sustainable 14 farmer program, competitive with the CPP program. Without notice to CPP, ADM contacted farmers of CPP to participate in the ADM program. 15 7. All customer service, sales expenses, customer relationships, and product 16 growth are borne, in significant part, by CPP, with little to no assistance from ADM. 17 8. ADM’s inability to coordinate 5-pound bag orders with bag company with 18 actual customer orders, with little to no communication with CPP or customers, resulting in insufficient supply of 5-pound bags to fill customer 19 orders.
20 ECF No. 5-2 at 14. 1 Plaintiff disputes these characterizations and argues that these allegedly 2 deficient performances do not constitute material breaches of the contract. ECF
3 No. 5 at 7-11, ¶¶ 23-30; ECF No. 6 at 8-11, ¶¶ 23-33. Defendant maintains that 4 Plaintiff’s performances were so deficient as to be material to the contract. ECF 5 No. 17 at 7-17, ¶¶ 23-57.
6 DISCUSSION 7 A. TRO Standard 8 Pursuant to Federal Rule of Civil Procedure 65, a district court may grant a 9 TRO in order to prevent “immediate and irreparable injury.” Fed. R. Civ. P.
10 65(b)(1)(A).1 The analysis for granting a temporary restraining order is 11 “substantially identical” to that for a preliminary injunction. Stuhlbarg Int’l Sales 12 Co., Inc. v. John D. Brush & Co., 240 F.3d 832, 839 n.7 (9th Cir. 2001). It “is an
13 extraordinary remedy never awarded as of right.” Winter v. Nat. Res. Def. Council, 14 Inc., 555 U.S. 7, 24 (2008). 15 16
1 Plaintiff moved for a temporary restraining order but provided Defendant 17 notice who appeared and argued on this matter. Thus, this matter may more be 18 appropriately classified as a preliminary injunction under Fed. R. Civ. P. 65(a). As 19 the standard is the same, the classification is not dispositive for this motion. 20 1 To obtain this relief, a plaintiff must demonstrate: (1) a likelihood of success 2 on the merits; (2) a likelihood of irreparable injury in the absence of preliminary
3 relief; (3) that a balancing of the hardships weighs in plaintiff’s favor; and (4) that 4 a preliminary injunction will advance the public interest. Winter, 555 U.S. at 20; 5 M.R. v. Dreyfus, 697 F.3d 706, 725 (9th Cir. 2012). Under the Winter test, a
6 plaintiff must satisfy each element for injunctive relief. 7 Alternatively, the Ninth Circuit also permits a “sliding scale” approach 8 under which an injunction may be issued if there are “serious questions going to 9 the merits” and “the balance of hardships tips sharply in the plaintiff’s favor,”
10 assuming the plaintiff also satisfies the two other Winter factors. All. for the Wild 11 Rockies v. Cottrell, 632 F.3d 1127, 1131 (9th Cir. 2011) (“[A] stronger showing of 12 one element may offset a weaker showing of another.”). “[T]he district court ‘is
13 not bound to decide doubtful and difficult questions of law or disputed questions of 14 fact.’” Int’l Molders’ and Allied Workers’ Local Union No. 164 v. Nelson, 799 15 F.2d 547, 551 (9th Cir. 1986). In the same vein, the court’s factual findings and 16 legal conclusions are “not binding at trial on the merits.” Univ. of Tex. v.
17 Camenisch, 451 U.S. 390, 395 (1981). The moving party bears the burden of 18 persuasion and must make a clear showing of entitlement to relief. Winter, 555 19 U.S. at 22.
20 // 1 B. Likelihood of Success on the Merits 2 Plaintiff argues that it is likely to succeed on the merits of the breach of contract
3 and tortious interference claims.2 ECF No. 10-1 at 6. Defendant claims that (1) 4 the contract was properly terminated, (2) there was no tortious interference, and (3) 5 Plaintiff is not entitled to specific performance. ECF No. 18 at 4-7.
6 1. Breach of Contract 7 Plaintiff claims that Defendant breached the contract through early 8 termination without an opportunity to cure pursuant to the contract. ECF No. 10-1 9 at 6-7. Defendant counters that there was no breach of contract where Plaintiff
10 materially breached the contract, Defendant notified Plaintiff of the breaches, and 11 Plaintiff did not cure within the thirty-day window. ECF No. 18 at 4-5. 12 In a breach of contract action under Washington law, the plaintiff must show
13 (1) the existence of a valid contract, (2) breach of the contract, and (3) resulting 14 damages. Lehrer v. State, Dep’t of Social & Health Servs., 101 Wash. App. 509, 15 516 (2000). “Only a breach or nonperformance of a promise by one party to a 16 bilateral contract so material as to justify a refusal of the other party to perform and
2 Plaintiff does not address the breach of implied covenant of good faith and 18 fair dealing claim alleged in the complaint. ECF No. 1. As such, the Court will 19 not address it here. 20 1 contractual duty, discharges that duty.” DC Farms, LLC v. Conagra Foods Lamb 2 Weston, Inc., 179 Wash. App. 205, 220 (2014) (internal citation omitted). “A
3 material breach is one that substantially defeats a primary function of the contract.” 4 Line Builders, Inc. v. Bovenkamp, 179 Wash. App. 794, 808 (2014). Further, an 5 anticipatory breach occurs when a party to a bilateral contract either expressly or
6 impliedly repudiates the contract prior to performance. Wallace Real Estate Inv., 7 Inc. v. Groves, 124 Wash. 2d 881, 898 (1994). 8 Here, there are unresolved issues of fact that remain as to Plaintiff’s breach 9 of contract claim. It is undisputed that a valid contract existed between the parties
10 and that Defendant had to provide a 30-day notice to cure before termination for 11 material breach. ECF No. 10-1 at 7; ECF No. 18 at 5. Defendant claims that the 12 contract termination followed Plaintiff’s various material breaches, including
13 “failing ‘to accommodate [SG’s] needs’ and by failing to ‘consent to allowing 14 [SG] to contract with a third party to mill such [SG] brands and…’ by failing to 15 increase the exposure of the [SG] brand.” ECF No. 18 at 5. Defendant also claims 16 that Plaintiff was provided notice and a thirty-day opportunity to cure these alleged
17 breaches. Id. Plaintiff alleges that it orally consented, and then provided written 18 consent outside of the thirty-day window. ECF No. 5 at 7, ¶ 23. 19 As there is a question of whether there was a material breach by Plaintiff,
20 there is also a question of Defendant’s rights and obligations under the contract. 1 As the record before the Court is limited, the Court declines to resolve this factual 2 dispute, and accordingly finds that Plaintiff has failed to demonstrate a likelihood
3 of success on the merits of this claim. 4 2. Tortious Interference with Business Relationships 5 Plaintiff claims that Defendant tortuously interfered with its business
6 relationships when it communicated to both Plaintiff and its customers that a third 7 party would become Defendant’s exclusive miller effective October 1, 2020. ECF 8 No. 10-1 at 6-7. Defendant does not dispute that it made these communications; 9 however, Defendants argues it only communicated factual statements and there is
10 no evidence that there was any intentional interference for an improper purpose. 11 ECF No. 18 at 7. 12 In a tortious interference claim under Washington law, plaintiff must show
13 “(1) the existence of a valid … business expectancy; (2) that defendants had 14 knowledge of that [expectancy]; (3) an intentional interference inducing or causing 15 a breach or termination of the … expectancy; (4) that defendants interfered for an 16 improper purpose or used improper means; and (5) resultant damage.” Life
17 Designs Ranch, Inc. v. Sommer, 191 Wash. App. 320, 337 (2015). At issue here 18 are the last two elements. Under the fourth element, “the plaintiff must establish 19 the intentional interference was wrongful” through improper purpose or means. Id.
20 at 338 (citing Pleas v. City of Seattle, 112 Wash. 2d 794, 804 (1989)). Under the 1 fifth element, the plaintiff must “show resultant damage to its business 2 expectancy.” Id. The claims need specific evidentiary support; for example, in
3 Life Designs Ranch, Inc., the court found that the plaintiff’s conclusory claim of 4 harm to reputation lacked evidentiary support where “[n]o client, potential client, 5 or referral source submitted an affidavit establishing they can no longer trust
6 [plaintiff] or did not choose [plaintiff’s] designs because of [defendant’s] website.” 7 Id. 8 Here, there is an issue of fact as to the improper purpose of the 9 communication. Plaintiff contends the communication was improper because
10 Defendant reached out to Plaintiff’s customers to notify them of the new third- 11 party contract with Plaintiff’s competitor. ECF No. 10-1 at 4-5. However, 12 Defendant claims that this communication was not improper when it had a valid
13 basis to terminate the contract with Plaintiff. ECF No. 18 at 7. Moreover, 14 Defendant argues that the letter did not state or suggest that the customers stop 15 using ADM as a source for its needs. ECF No. 17 at 20-21, ¶ 71. 16 Although there is a question of fact as to the fourth element, the fifth
17 element is dispositive. Plaintiff alleges that some customers have expressed 18 confusion as to Defendant’s communication and argues that they are likely to lose 19 business from the loss of exclusive contract. ECF No. 10-1 at 9. Statements of
20 customer confusion does not amount to a loss of business or reputation, especially 1 where no customer sales have been lost or are shown to likely be lost from this 2 transition. ECF No. 18 at 7. Thus, Plaintiff has not demonstrated a likelihood of
3 success on the merits of this claim. 4 3. Specific Performance 5 Defendant also argues that Plaintiff is not entitled to specific performance
6 under its breach of contract claim. ECF No. 18 at 6. Plaintiff did not address this 7 argument in briefing or at oral argument. 8 If a Court cannot adequately compensate a party’s injury with money 9 damages, “a court may use its broad equitable powers to compel a party to
10 specifically perform its promise.” Crafts v. Pitts, 161 Wash. 2d 16, 23-24 (2007) 11 (internal citation omitted). To determine whether money damages would provide 12 adequate compensation, the court analyze “(i) the difficulty of proving damages
13 with reasonable certainty, (ii) the difficulty of procuring a suitable substitute, and 14 (iii) the likelihood that an award of damages could not be collected.” Id. at 24. 15 Additionally, specific performance may only be ordered “if there is a valid binding 16 contract; a party has committed or is threatening to commit a breach of its
17 contractual duty; the contract has definite and certain terms; and the contract is free 18 from unfairness, fraud, and overreaching.” Id. 19 Here, like the breach of contract claim, there are unresolved issues of fact as
20 to whether specific performance is the proper remedy. As discussed above, there 1 are issues of fact as to whether Defendant even breached or will breach the 2 contract to make specific performance appropriate. See supra at 9. While Plaintiff
3 argues that it will suffer intangible irreparable injuries, Defendant argues that 4 damages are calculable under the contract. ECF No. 18 at 8. Based on the current 5 record, the Court is not convinced that money damages could not provide adequate
6 compensation in this case. 7 C. Likelihood of Irreparable Injury 8 Plaintiff argues that it has incurred and will continue to incur irreparable 9 harm to its goodwill, reputation, and customer relationships as a result of
10 Defendant’s conduct in three principle ways: (1) customer solicitation, (2) lack of 11 access to sustainable wheat for approximately twelve months, and (3) employee 12 layoffs. ECF No. 10-1 at 8-11. Defendant argues that there is no irreparable harm
13 where there are only conclusory and speculative statements of injury, especially in 14 light of Plaintiff’s rejection of Defendant’s offer to supply Plaintiff with certified, 15 sustainable wheat for the next three years and delay in bringing a timely injunction. 16 ECF No. 18 at 7-9.
17 “Irreparable harm is traditionally defined as harm for which there is no 18 adequate legal remedy, such as an award of damages.” Arizona Dream Act Coal. 19 v. Brewer, 757 F.3d 1053, 1068 (9th Cir. 2014). “[I]ntangible injuries, such as
20 damage to recruitment efforts and goodwill, qualify as irreparable harm.” Rent-A- 1 Car, Inc. v. Canyon Television and Appliance Rental, Inc., 944 F.2d 597, 603 (9th 2 Cir. 1991). Deprivation of products that are unique or are not easily replaced may
3 constitute irreparable harm. Eastman Kodak Co. v. Collins Ink Corp., 821 F. Supp. 4 2d 582, 588 (W.D.N.Y. 2011). Finally, the threat of being driven out of business is 5 sufficient to establish irreparable harm. Am. Passage Media Corp. v. Cass
6 Commc’ns, Inc., 750 F.2d 1470, 1474 (9th Cir. 1985). 7 Under any theory of irreparable harm, the plaintiff must use provide 8 evidence more than conclusory or speculative statements to support its claims. Id. 9 at 1473. Additionally, there is less likely to be a finding of irreparable harm where
10 the plaintiff sleeps on its rights, demonstrating that there is not an urgent need for 11 “speedy action.” Citizens of the Ebey’s Reserve for a Healthy, Safe & Peaceful 12 Env’t v. U.S. Dep’t of the Navy, 122 F. Supp. 3d 1068, 1083-84 (W.D. Wash.
13 2015) (citing Lydo Enters. v. City of Las Vegas, 745 F.2d 1211, 1213 (9th Cir. 14 1984). 15 While Plaintiff alleges intangible injuries to support its claim for irreparable 16 injury, the Court finds none of the claims are supported with evidence beyond
17 conclusory or speculative assertions. See, e.g., ECF No. 10-1 at 10-11 (“may also 18 lead to ADM having to lay off Washington employees”). Moreover, based on this 19 record, it is unclear as to whether sustainable wheat constitutes a “unique” product.
20 ECF No. 18 at 6. Finally, Plaintiff’s stated harm for deprivation of access to 1 sustainable wheat is questionable where Plaintiff declined Defendant’s offer to 2 produce wheat for the next three years and where Plaintiff brought this action mere
3 days ahead of the October 1, 2020 deadline. ECF No. 18 at 6, 9. Thus, Plaintiff 4 has not clearly demonstrated irreparable harm. 5 D. Balance of the Equities
6 Plaintiff argues that the balance of the equities weighs in its favor where the 7 TRO will simply maintain “the status quo of supplying [Plaintiff] with sustainable 8 wheat as it has done for fourteen years and as it agreed to do through February 9 2022[,]” especially where it as increased retail sales by “approximately 600%” this
10 year. ECF No. 10-1 at 11. Defendant disputes this figure as only reflecting 5- 11 pound bag sales and claims an overall 3% reduction in annual bushels sold to 12 ADM this year. ECF No. 17 at 19-20. Defendant also points to the disparity in the
13 parties’ size, revenue, and access to other business, arguing that Defendant will 14 suffer the most harm if the injunction is granted and enforced. ECF No. 18 at 9-10. 15 The Supreme Court has recognized that courts must “balance the competing 16 claims of injury and must consider the effect on each party of the granting or
17 withholding of the requested relief.” Amoco Production Co. v. Village of Gambell, 18 AK, 480 U.S. 531, 542 (1987). Courts have found that the maintenance of the 19 “status quo” relevant to balance of the equities, however, it is not the only
20 consideration. See Flex-Plan Servs., Inc. v. Evolution1, Inc., No. C13-1986-JCC, 1 2013 WL 12092543, at *7 (W.D. Wash. Dec. 31, 2013); Tanner Motor Livery, Ltd. 2 v. Avis, Inc., 316 F.2d 804, 809 (9th Cir. 1963) (“We are not to be understood as
3 stating that the [status quo] principles are hard and fast rules, to be rigidly applied 4 to every case regardless of its peculiar facts.”). 5 Plaintiff argues that Flex-Plan Servs., Inc. is on-point; however, the case is
6 distinguishable. 2013 WL 12092543, at *7. There, the defending party stood to 7 lose a “substantial portion” of revenue if the injunction were granted. Id. On the 8 flip side, the party seeking the injunction undermined its injury with prior 9 statements and had “the backing” of its new provider for any fees. Id.
10 In contrast to this case, it does not appear that Plaintiff stands to lose a 11 “substantial portion” of its revenue. Rather, Plaintiff may lose approximately 0.1% 12 of the profits its claims. ECF No. 18 at 10. While the fact that Defendant is the
13 “smaller company” is alone not dispositive, Defendant points to an excess of un- 14 milled grain that results in “lost profits, lost sales, an inability to expand the 15 market…, and a continued decline in income.” ECF No. 18 at 10. Additionally, as 16 described at oral argument, the COVID-19 pandemic has fluctuated the need for
17 retail and commercial flour, which the Court is sympathetic to the adjustments and 18 needs of both parties. As such, the Court finds that the balance of the equities does 19 not sharply tip in Plaintiff’s favor.
20 // 1 E. Public Interest 2 Plaintiff argues that the public has an interest in holding Defendant to its
3 contractual commitments. ECF No. 10-1 at 11. To the contrary, Defendant argues 4 that the public interest is best served by robust competition and more sustainable, 5 environmentally friendly wheat distributed to the market. ECF No. 18 at 10-11.
6 The Court must consider whether a public interest is at jeopardy in a private 7 suit. See Mississippi Power & Light Co. v. United Gas Pipe Line Co., 760 F.2d 8 618, 625 (5th Cir. 1985). The public generally has an interest in holding parties to 9 contractual obligations. See Flex-Plan Servs., Inc., 2013 WL 12092543, at *8. On
10 the other hand, where the “public interest is not directly implicated in [a] private 11 party dispute over private contract and business rights … [the public interest] is 12 best served by a decision on the merits after trial….” Tiger Century Aircraft v.
13 Calspan Corp., No. 1:09-CV-0317 OWW GS, 2009 WL 3486360, at *3 (E.D. Cal. 14 Oct. 23, 2009). 15 Here, Plaintiff only asserts that the public is interested in holding Defendant 16 to its’ contractual obligations – the existence of which have been disputed based on
17 alleged material breaches. See supra at 9. Defendant argues that the public would 18 be best served in providing consistent and timely sustainable flour to the market 19 with the third-party distributor. ECF No. 18 at 11. Based on this record, the Court
20 finds that the public interest in this matter is tangential. It is unclear whether there 1 are contractual obligations to hold Defendant to, and regardless, the public will 2 receive Defendant’s sustainable flour either through distribution from Plaintiff or a
3 third-party. Thus, Plaintiff has failed to demonstrate that the public interest weighs 4 in its favor. 5 F. Expedited Discovery
6 Plaintiff seeks to conduct certain limited, expedited discovery in order to 7 support its request for a preliminary injunction and an order to preserve all 8 evidence. ECF No. 9. 9 Federal Rule of Civil Procedure 26(d) states that a party “may not seek
10 discovery from any source” prior to the conference required by Rule 26(f), which 11 must take place at least twenty-one days before the initial Case Management 12 Conference. Fed. R. Civ. P. 26(d), (f). Discovery may commence prior to the
13 Rule 26(f) meeting if allowed by court order or agreement of the parties. Fed. R. 14 Civ. P. 26(d)(1). Courts in the Ninth Circuit permit early discovery if the 15 requesting party demonstrates good cause. Rovio Entm’t Ltd. v. Royal Plush Toys, 16 Inc., 907 F. Supp. 2d 1086, 1099 (N.D. Cal. 2012); Semitool, Inc. v. Tokyo
17 Electron Am., Inc., 208 F.R.D. 273, 276 (N.D. Cal. 2002). “Good cause may be 18 found where the need for expedited discovery, in consideration of the 19 administration of justice, outweighs the prejudice to the responding party.” Id. In
20 determining whether good cause justifies expedited discovery, courts commonly 1 consider the following non-exhaustive factors: “(1) whether a preliminary 2 injunction is pending; (2) the breadth of the discovery requests; (3) the purpose for
3 requesting the expedited discovery; (4) the burden on the defendants to comply 4 with the requests; and (5) how far in advance of the typical discovery process the 5 request was made.” Am. LegalNet, Inc. v. Davis, 673 F. Supp. 2d 1063, 1067
6 (C.D. Cal. 2009) (citation omitted). 7 As discussed above, each party claims the other has breached the Exclusive 8 Milling Agreement. Because Plaintiff has not shown a likelihood of success, 9 Defendant having set forth serious and substantial allegations of breach by Plaintiff
10 and having invoked its option to terminate the contract, the Court does not find 11 good cause to expedite discovery. The parties contract appears irretrievably 12 broken and the remedy will be damages from one or the other. However, nothing
13 in the Rules of Civil Procedure prevent the parties from voluntarily exchanging 14 discovery or participating in mediation. 15 Although the Ninth Circuit has not precisely defined when the duty to 16 preserve is triggered, trial courts in this Circuit generally agree that, “[a]s soon as a
17 potential claim is identified, a litigant is under a duty to preserve evidence which it 18 knows or reasonably should know is relevant to the action.” Apple Inc. v. Samsung 19 Elecs. Co., 888 F. Supp. 2d 976, 991 (N.D. Cal. 2012) (citing cases). District
20 courts also possess inherent authority to impose sanctions against a party that 1 || prejudices its opponent through the destruction or spoliation of relevant evidence. See Glover v. BIC Corp., 6 F.3d 1318, 1329 (9th Cir. 1993); Fed. R. Civ. P. 37(e). 3|| Accordingly, there is no need for an additional preservation order at this time. 4 CONCLUSION 5 The Court finds that Plaintiff has failed to satisfy the requisite elements under either the Winter test or Cottrell sliding scale test. Therefore, Plaintiff is not entitled to the extraordinary remedy of injunctive relief. Consequently, there is no need for expedited discovery or additional preservation order at this time. 9|| ACCORDINGLY, IT IS HEREBY ORDERED: 10 1. Plaintiff's Motion for Temporary Restraining Order (ECF Nos. 3, 10-1) 11 is DENIED. 12 2. Plaintiff's Motion to Shorten Time on Temporary Restraining Order and 13 Motion to Expedite Discovery (ECF No. 8) is DENIED. 14 3. Plaintiff's Motion to Expedite Discovery and Preservation of Evidence 15 (ECF No. 9) is DENIED. 16 The District Court Executive is directed to enter this Order and furnish copies to counsel. 18 DATED September 29, 2020. 19 a yy Ug PA. ee livia 0 Kes 20 on Xe THOMAS O. RICE <=> United States District Judge ORDER DENYING PLAINTIFF’S MOTION FOR TEMPORARY RESTRAINING ORDER, MOTION TO SHORTEN TIME, AND MOTION