Chucho Produce LLC v. Tonys Fresh Produce Incorporated

• Court: District Court, D. Arizona
• Decided: September 21, 2021
• Docket: 4:21-cv-00372
• Status: Unknown

Opinion

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

9 Chucho Produce LLC, No. CV-21-00372-TUC-RM

10 Plaintiff, ORDER

11 v.

12 Tonys Fresh Produce Incorporated, et al.,

13 Defendants. 14 15 On September 20, 2021, Plaintiff Chucho Produce LLC (“Chucho Produce”) filed 16 a Complaint against Defendants Tonys Fresh Produce Incorporated and Anthony Mendez 17 (collectively, “Defendants”). (Doc. 1.) On the same date, Plaintiff filed an Ex Parte 18 Motion for Temporary Restraining Order and Preliminary Injunction. (Doc. 2.) Plaintiff 19 alleges that Defendants are commission merchants, dealers, and/or brokers subject to the 20 provisions of the Perishable Agricultural Commodities Act (“PACA”). (Doc. 1 at 3 ¶ 7.) 21 Plaintiff further alleges that Defendants have failed to pay at least $112,466.74 for 22 perishable agricultural commodities that Plaintiff sold to Defendants between April 14, 23 2021 and May 18, 2021. (Id. at 3 ¶¶ 8-10.) Plaintiff asserts ten causes of action and 24 seeks compensatory and punitive damages as well as injunctive and declaratory relief. 25 (Id. at 3-17.) 26 In its Ex Parte Motion for Temporary Restraining Order and Preliminary 27 Injunction, Plaintiff seeks issuance of an ex parte temporary restraining order pending a 28 preliminary injunction hearing. (Doc. 2.) Plaintiff argues that notice to Defendants 1 should not be required because such notice would only give Defendants “time and 2 incentive” to dissipate PACA trust assets. (Id. at 4.) In support, Plaintiff attaches a 3 declaration by Alberto Cruz Elias Calles (“Calles”), the manager of Chucho Produce, 4 who avers that Defendants have failed to pay the balance due of $112,466.74 and have 5 indicated they will not pay. (Doc. 2-2 at 2.) Calles further avers: “Upon information and 6 belief, Defendants have failed to maintain the trust assets and keep them available to 7 satisfy Defendants’ obligations to Plaintiff in that said Defendants have indicated that 8 they will not pay.” (Id.) Plaintiff also attaches an attorney certification averring that 9 entry of a temporary restraining order without notice is necessary to prevent dissipation 10 of trust assets pending a hearing. (Doc. 2-3 at 2.) 11 I. Legal Standard 12 The standard for issuing a TRO is essentially the same as that for issuing a 13 preliminary injunction. Beaty v. Brewer, 791 F. Supp. 2d 678, 681 (D. Ariz. 2011). “A 14 preliminary injunction is an extraordinary remedy never awarded as of right.” Winter v. 15 Natural Res. Def. Council, 555 U.S. 7, 24 (2008). A plaintiff seeking a preliminary 16 injunction must show (1) that it is likely to succeed on the merits, (2) that it is likely to 17 suffer irreparable harm in the absence of a preliminary injunction, (3) that the balance of 18 equities tips in its favor, and (4) that a preliminary injunction is in the public interest. Id. 19 at 20. 20 A temporary restraining order can be issued without notice only if:

21 (A) specific facts in an affidavit or a verified complaint clearly show that immediate and irreparable injury, loss, or damage will result to the movant 22 before the adverse party can be heard in opposition; and 23 (B) the movant’s attorney certifies in writing any efforts made to give notice and the reasons why it should not be required. 24 25 Fed. R. Civ. P. 65(b)(1); see also LRCiv 65.1 (“Ex parte restraining orders shall only 26 issue in accordance with Rule 65, Federal Rules of Civil Procedure.”). 27 . . . . 28 . . . . 1 II. Discussion 2 PACA requires commission merchants, dealers, and brokers to hold all perishable 3 agricultural commodities received by the merchant, dealer, or broker, as well as all 4 “inventories of food or other products derived from” such commodities “and any 5 receivables or proceeds from the sale of such commodities or products . . . in trust for the 6 benefit of all unpaid suppliers or sellers” of such commodities, until full payment to the 7 suppliers or sellers. 7 U.S.C. § 499e(c)(2). Courts have found that the dissipation of 8 PACA trust assets may constitute irreparable harm for purposes of a request for 9 injunctive relief “if, absent such relief, ultimate recovery is rendered unlikely.” 10 Tanimura & Antle, Inc. v. Packed Fresh Produce, Inc., 222 F.3d 132, 140-141 (3d Cir. 11 2000). However, if there is no evidence that a defendant will likely be unable to pay 12 creditors’ claims, there is no showing of irreparable harm. JSG Trading Corp. v. Tray- 13 Wrap, Inc., 917 F.2d 75, 80 (2d Cir. 1990). 14 On the record currently before it, the Court cannot conclude that a temporary 15 restraining order should issue without notice to Defendants, because Plaintiff has failed to 16 present specific facts clearly showing that “immediate and irreparable injury, loss, or 17 damage will result” to Plaintiff before Defendants can be heard in opposition. Fed. R. 18 Civ. P. 65(b)(1)(A). There is no evidence of Defendants’ financial condition and no 19 concrete evidence that Defendants are dissipating PACA trust assets. Plaintiff merely 20 assumes that Defendants are dissipating PACA trust assets because Defendants said they 21 will not pay Plaintiff. 22 The Court will set a hearing on Plaintiff’s Motion for Temporary Restraining 23 Order and Preliminary Injunction, and will require Plaintiff to serve Defendants with a 24 copy of the Complaint and Motion for Temporary Restraining Order and Preliminary 25 Injunction in advance of the hearing. 26 IT IS ORDERED that a hearing on Plaintiff’s Motion for Temporary Restraining 27 Order (Doc. 2) is scheduled for September 29, 2021 at 11:30 a.m., before the Honorable 28 Rosemary Márquez at the United States District Court for the District of Arizona, Evo A. DeConcini U.S. Courthouse, 405 W. Congress Street, Tucson, AZ 85701. Plaintiff and 2|| Defendants shall attend the hearing. Counsel should refer to the Court’s lobby monitors 3 || to check on the location of this hearing. 4 IT IS FURTHER ORDERED that a preliminary injunction hearing is scheduled || for November 3, 2021 at 1:45 p.m., before the Honorable Rosemary Marquez. 6 IT IS FURTHER ORDERED that, within three (3) days of the date this Order is filed, Plaintiff shall serve Defendants the Summons and Complaint (Doc. 1), Motion for 8 || Temporary Restraining Order (Doc. 2), and a copy of this Order. 9 Dated this 21st day of September, 2021. 10 ll ff piles □□ 13 □□□ Honorable Rostsiary □□□□□□□ 14 United States District □□□□□ 15 16 17 18 19 20 21 22 23 24 25 26 27 28

-4-