Ares Collective Group LLC v. National Labor Relations Board

• Court: District Court, D. Arizona
• Decided: October 25, 2024
• Docket: 4:24-cv-00517
• Status: Unknown

Opinion

1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA

9 Ares Collective Group LLC, et al., No. CV-24-00517-TUC-SHR

10 Plaintiffs, Order Denying TRO

11 v.

12 National Labor Relations Board, et al.,

13 Defendants. 14 15 16 Pending before the Court is Plaintiffs’ “Application for Temporary Restraining 17 Order and Preliminary Injunction” (“TRO Motion”) filed pursuant to Federal Rule of Civil 18 Procedure 65. (Doc. 2.) For the reasons stated below, the Court denies Plaintiffs’ TRO 19 Motion. 20 I. BACKGROUND 21 Plaintiffs are two Arizona limited liability companies and one organization that 22 operate eateries and a grocery facility in Tucson. (Doc. 1 at 7.) On September 2, 2021, 23 one of Plaintiffs’ former employees filed an unfair labor practice charge with the National 24 Labor Relations Board (NLRB) against Plaintiff Flora’s Market Run. (Doc. 1 at 7.) On 25 October 23, 2024, the Regional Director of Region 28 of the NLRB filed a Consolidated 26 Complaint against Plaintiffs as well as a Notice of Hearing. (Doc. 1 at 8.) On September 27 24, 2024, the Regional Director issued a Second Amended Consolidated Complaint with 28 notice that a hearing on the former employee’s claims would be held before an 1 Administrative Law Judge (ALJ) on October 28, 2024. (Doc. 1-2 at 3, 24.) The NLRB’s 2 amended complaint seeks “payment for consequential economic harm” Plaintiffs’ former 3 employee incurred as a result of Plaintiffs’ alleged illegal conduct. (Doc. 1-2 at 22.) 4 Plaintiffs answered the second amended complaint, asserting, among other things, 5 affirmative defenses challenging the constitutionality of the scheduled hearing and 6 NLRB’s structure. (Doc. 1-2 at 30.) 7 On October 23, 2024, Plaintiffs filed a Complaint for Declaratory and Injunctive 8 Relief, asking this Court to enjoin Defendants from subjecting them to “unconstitutionally 9 structured administrative proceedings pending the final resolution of this action” and to 10 “[p]ermanently enjoin[] Defendants from implementing or carrying out the 11 unconstitutional removal-protection provisions” insulating NLRB ALJs and Board 12 Members. (Doc. 1 at 17.) Also on October 23, Plaintiffs filed the instant TRO Motion 13 seeking an order “enjoin[ing] unconstitutional administrative proceedings” against them. 14 (Doc. 2 at 2.) Plaintiffs argue: (1) “the NLRB’s quest for compensatory monetary damages 15 in an administrative proceeding violates Plaintiffs’ Seventh Amendment right to trial by 16 jury”; 2) “the ALJ assigned to conduct the hearing will unconstitutionally exercise 17 substantial executive power while being insulated from Presidential control through two 18 layers of for-cause removal protection in violation of Article II of the United States 19 Constitution”; and (3) “the NLRB Board Members are likewise unconstitutionally 20 protected from the President’s removal power and, more generally, Presidential control.” 21 (Doc. 2 at 2.) 22 II. LEGAL STANDARD 23 A TRO is “an extraordinary remedy that may only be awarded upon a clear showing 24 that the plaintiff is entitled to such relief.” Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 25 7, 22 (2008); see also Stuhlbarg Int’l Sales Co. v. John D. Brush & Co., 240 F.3d 832, 839 26 n.7 (9th Cir. 2001) (TROs are analyzed in substantially the same way as preliminary 27 injunctions). A plaintiff seeking a TRO must establish: (1) he is likely to succeed on the 28 merits; (2) he is likely to suffer irreparable harm in the absence of preliminary relief; (3) 1 the balance of equities tips in his favor; and (4) an injunction is in the public interest. 2 Winter, 555 U.S. at 20. When the government is a party, the last two of the four factors— 3 the balance of the equities and the public interest—merge. Drakes Bay Oyster Co. v. 4 Jewell, 747 F.3d 1073, 1092 (9th Cir. 2014). The first factor, likelihood of success on the 5 merits, is “the most important Winter factor.” Disney Enters., Inc. v. VidAngel, Inc., 869 6 F.3d 848, 856 (9th Cir. 2017) (“[I]f a movant fails to meet this threshold inquiry, the court 7 need not consider the other factors.”). However, in the Ninth Circuit, a temporary 8 restraining order is warranted where “serious questions going to the merits” exist and a 9 “hardship balance . . . tips sharply toward the plaintiff”—provided the other two elements 10 of the Winter test are also met. All. for the Wild Rockies v. Cottrell, 632 F.3d 1127, 1132 11 (9th Cir. 2011); see also Shell Offshore, Inc. v. Greenpeace, Inc., 709 F.3d 1281, 1291 (9th 12 Cir. 2013) (describing serious questions going to the merits as “a lesser showing than 13 likelihood of success on the merits”). Regardless of which standard applies, the movant 14 “carries the burden of proof on each element of either test.” Env’t. Council of Sacramento 15 v. Slater, 184 F. Supp. 2d 1016, 1027 (E.D. Cal. 2000). 16 III. DISCUSSION 17 Plaintiffs contend (1) the scheduled proceeding before an NLRB ALJ will violate 18 their Seventh Amendment right to a jury trial (Doc. 2 at 6–8), and (2) the NLRB ALJs and 19 Board Members are unconstitutionally insulated from removal by the President by two 20 layers of “for cause” employment protection. (Doc. 2 at 3, 10.) Even assuming Plaintiffs 21 are likely to succeed on the merits of these claims, the Court finds they fail to show 22 irreparable harm and are therefore not entitled to a TRO enjoining the NLRB proceeding. 23 See Winter, 555 U.S. at 20. 24 Plaintiffs claim they will suffer irreparable harm without the Court’s intervention 25 because they “will be forced to undergo an unconstitutional proceeding before an 26 insufficiently accountable ALJ and NLRB, without the jury trial to which [they are] 27 entitled.” (Doc. 2 at 12.) Further, Plaintiffs argue, the “economic burdens” associated with 28 preparing for and participating in the hearing “separately constitute irreparable harm.” (Id. at 13.) These arguments fail to meet the standard that the Supreme Court has established 2|| and the Ninth Circuit has reiterated: “[t]he key ... is demonstrating that the □□ unconstitutional provision actually caused the plaintiff harm.” Decker Coal Co. v. 4|| Pehringer, 8 F.4th 1123, 1137 (9th Cir. 2021); see Collins v. Yellen, 594 U.S. 220, 260 □□ (2021) (shareholders needed to show the unconstitutional removal restriction—not simply 6|| the agency’s actions—‘“cause[d] harm” to be entitled to retrospective relief); see also YAPP 7\| USA Auto. Sys., Inc. v. NLRB, 2024 WL 4489598, *2-3 (6th Cir. 2024) (plaintiff not 8 || entitled to preliminary injunction where it failed to show the removal protections for NLRB 9|| officials would cause harm). 10 Here, even assuming the alleged constitutional infirmities exist, Plaintiffs fail to 11 || show how this Court’s failure to grant temporary relief will cause irreparable harm. First, 12} nothing about the NLRB proceedings will permanently deprive Plaintiffs of their Seventh 13} Amendment right. Rather, as detailed in the NLRA, Plaintiffs can seek review of the || NLRB’s decision in the court of appeals. Second, merely highlighting the fact there is a 15 || two-layer removal system in place does not establish the causal link between the removal 16 || restrictions and their impact on the upcoming proceeding. Even assuming the two-layer 17 || removal system could cause a per se harm to Plaintiffs, this harm can be completely 18 || extinguished by the court of appeals vacating an ALJ’s decision. Lastly, the timing of this 19|| TRO Motion undermines Plaintiffs’ irreparable harm argument. For nearly a year, || Plaintiffs were on notice of the nature of the remedy sought and the fact that the NLRB ALJ would hold a hearing. As Plaintiffs admitted at today’s hearing, it was a strategic || decision to wait until two business days before the NLRB’s scheduled hearing to file this 23 || Motion. The Court finds this delay weighs against granting the TRO Motion. 24 IV. CONCLUSION 25 IT IS ORDERED Plaintiffs’ TRO Motion (Doc. 2) is DENIED. 26 Dated this 25th day of October, 2024. Ai ted Honorable Scott H. Rash 28 _/ United States District Judge

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