Chucho Produce LLC v. Tonys Fresh Produce Incorporated

• Court: District Court, D. Arizona
• Decided: February 11, 2022
• 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 filed a Complaint against 16 Defendants Tonys Fresh Produce Incorporated and Anthony Mendez (Doc. 1), as well as 17 a Motion for Temporary Restraining Order and Preliminary Injunction (Doc. 2). Plaintiff 18 alleges that Defendants are commission merchants, dealers, and/or brokers subject to the 19 provisions of the Perishable Agricultural Commodities Act (“PACA”) and the regulations 20 promulgated pursuant to PACA by the United States Secretary of Agriculture. (Doc. 1 at 21 3 ¶ 7.) 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 The Court declined to issue a temporary restraining order without notice and 27 ordered Plaintiff to complete service of process. (Doc. 6.) After Plaintiff had made 28 several unsuccessful attempts at personal service, the Court authorized the alternative 1 methods of service by email and certified mail, finding that personal service on 2 Defendants had proven impracticable despite Plaintiff’s reasonable efforts. (Doc. 12.) 3 Plaintiff thereafter filed proof of service upon Tonys Fresh Produce Incorporated and 4 Anthony Mendez via the authorized alternative methods of service. (Docs. 13, 14, 15, 5 16.) 6 The Court held a hearing on Plaintiff’s Motion for Temporary Restraining Order 7 on December 15, 2021; Defendants failed to appear for the hearing. (Doc. 19.) The 8 Court thereafter issued a temporary restraining order and Ordered Defendants to respond 9 to Plaintiff’s Motion for Preliminary Injunction. (Doc. 20.) Defendants did not respond 10 to the Motion for Preliminary Injunction. The Court held a hearing on the Motion for 11 Preliminary Injunction on February 9, 2022; Defendants did not appear at the hearing. 12 (Doc. 21.) To date, Defendants have not appeared in this case. 13 I. Legal Standard 14 “A preliminary injunction is an extraordinary remedy never awarded as of right.” 15 Winter v. Natural Res. Def. Council, 555 U.S. 7, 24 (2008). A plaintiff seeking a 16 preliminary injunction must show (1) that it is likely to succeed on the merits of its 17 claims, (2) that it is likely to suffer irreparable harm in the absence of a preliminary 18 injunction, (3) that the balance of equities tips in its favor, and (4) that an injunction is in 19 the public interest. Id. at 20. 20 PACA requires commission merchants, dealers, and brokers to hold all perishable 21 agricultural commodities received by the merchant, dealer, or broker, as well as all 22 “inventories of food or other products derived from” such commodities “and any 23 receivables or proceeds from the sale of such commodities or products . . . in trust for the 24 benefit of all unpaid suppliers or sellers” of such commodities, until full payment to the 25 suppliers or sellers. 7 U.S.C. § 499e(c)(2). Courts have found that the dissipation of 26 PACA trust assets may constitute irreparable harm for purposes of a request for 27 injunctive relief “if, absent such relief, ultimate recovery is rendered unlikely.” 28 Tanimura & Antle, Inc. v. Packed Fresh Produce, Inc., 222 F.3d 132, 140-141 (3d Cir. 1 2000); see also CP Produce, LLC v. Quality Fresh Farms, Inc., No. 1-18-cv-00077- 2 DAD-EPG, 2018 WL 1980749, at *3 (E.D. Cal. Jan. 19, 2018) (collecting cases from 3 district courts within the Ninth Circuit). 4 II. Discussion 5 The Court previously granted a temporary restraining order upon review of 6 Plaintiff’s Complaint, Motion for Temporary Restraining Order and Preliminary 7 Injunction, the attachments to that Motion, and the averments of counsel at the December 8 15, 2021 hearing. (Doc. 20.) Specifically, the Court found that Plaintiff had established 9 a likelihood of success on the merits of its claims and a likelihood of irreparable injury in 10 the absence of temporary injunctive relief, and that both the balance of equities and the 11 public interest weighed in favor of temporary injunctive relief. (Id. at 3-4.) 12 The standard for issuing a temporary restraining order is essentially the same as 13 that for issuing a preliminary injunction. Beaty v. Brewer, 791 F. Supp. 2d 678, 681 (D. 14 Ariz. 2011). The Court finds, based on its prior analysis (Doc. 20), that the Winter 15 factors weigh in favor of the issuance of preliminary injunctive relief. Accordingly, the 16 Court will convert its previously issued temporary restraining order into a preliminary 17 injunction. 18 The Court may issue injunctive relief “only if the movant gives security in an 19 amount that the court considers proper to pay the costs and damages sustained by any 20 party found to have been wrongfully enjoined or restrained.” Fed. R. Civ. P. 65(c). 21 District courts are “afforded wide discretion in setting the amount of the bond, and the 22 bond amount may be zero if there is no evidence the party will suffer damages from an 23 injunction.” Connecticut Gen. Life Ins. Co. v. New Images of Beverly Hills, 321 F.3d 24 878, 882 (9th Cir. 2003) (internal citation omitted). Defendants have had an opportunity 25 to be heard in opposition to Plaintiff’s Motion for Preliminary Injunction, but they have 26 failed to make an appearance or present any argument or evidence concerning potential 27 harm that would result from the Court’s issuance of preliminary injunctive relief. 28 Therefore, the Court declines to require a bond. 1 IT IS ORDERED that Plaintiffs Motion for Preliminary Injunction (Doc. 2) is granted. 3 IT IS FURTHER ORDERED that, until further Order of the Court, Defendants and their employees, officers, agents, bankers, subsidiaries, successors, assignees, || principals, attorneys, and persons acting in concert with them, are enjoined from 6|| engaging in, committing, or performing directly and indirectly the following: 7 1. Removing, withdrawing, transferring, assigning, or in any other manner 8 dissipating PACA trust assets, including funds on deposit in banking 9 accounts held by or on behalf of Defendants, in the amount of $112,466.74; 10 and 11 2. Taking any other actions that violate 7 U.S.C. § 499e(c) and/or 7 U.S.C. § 12 499b(4). 13 || PACA trust assets include any perishable agricultural commodities received by 14|| Defendants, “all inventories of food or other products derived from perishable || agricultural commodities, and any receivables or proceeds from the sale of such 16 || commodities or products.” 7 U.S.C. § 499e(c)(2). 17 IT IS FURTHER ORDERED that no bond shall be required to be posted by 18 || Plaintiff pursuant to Federal Rule of Civil Procedure 65(c). 19 Dated this 11th day of February, 2022. 20 21 ff 22 — 4h’ □ Honorable Rostehary Mafquez 24 United States District □□□□□ 25 26 27 28

-4-