Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_07-cv-00649/USCOURTS-cand-3_07-cv-00649-0/pdf.json

Nature of Suit Code: 891
Nature of Suit: Agricultural Acts
Cause of Action: 07:499 Agricultural Commodities Act

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States District C

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For the Northern District of California

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

INN FOODS INC,

Plaintiff,

 v.

TURNER MEAD LLC, and PAUL STEVEN

MEAD, III,

Defendants.

 /

No. C 07-00649 SI

TEMPORARY RESTRAINING ORDER

AND ORDER TO SHOW CAUSE

This matter is before the Court upon Plaintiff’s Ex-Parte Motion for Temporary Restraining

Order. Plaintiff has also filed a motion for issuance of preliminary injunction and to consolidate the trial

on the merits with the hearing on preliminary injunction. Pursuant to Rule 65(b), a temporary restraining

order may be granted without notice to the adverse party only if: (1) it clearly appears from specific facts

shown by Affidavits or verified complaint that immediate and irreparable injury, loss or damage will

result before the adverse party can be heard in opposition, and (2) the applicant’s attorney certifies the

reasons that notice should not be required.

In this case, it appears from the affidavits of Hilda Anaya, Accounts Receivable Clerk and

Veronica Solis, Accounts Receivable Collection Assistant of Inn Foods, that Plaintiff Inn Foods, Inc.

is a produce dealer and trust creditor of Defendant Turner Mead, LLC under Section 5(c) of the

Perishable Agricultural Commodities Act (PACA), 7 U.S.C. § 499e(c), and has not been paid for

produce in the total amount of $68,103.49 supplied to said Defendant as required by the PACA. It is

also clear from the same Affidavits and the certification of counsel that said Defendant is in severe

financial jeopardy and the PACA trust assets are being dissipated or threatened with dissipation, see Frio

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Ice, S.A. v. Sunfruit, Inc., 918 F.2d 154 (11th Cir. 1990), and that said Defendant is not or may not be

in a position to pay creditor’s claim, see JSG Trading Crop. v. tray-Wrap, Inc., 917 F.2d 75 (2d Cir.

1990), thereby warranting the relief requested by Plaintiff. On the basis of the pleadings, Affidavits and

other submissions Plaintiff has filed in this matter, it appears Plaintiff will suffer immediate and

irreparable injury due to said Defendant’s dissipation of Plaintiff’s interest in the statutory trust created

pursuant to 7 U.S.C. § 499e(c) and that such dissipation will continue in the absence of injunctive relief.

Therefore, the Court is of the opinion that a Temporary Restraining Order should be issued.

If notice is given to Defendant of the pendency of this motion, trust assets will be further

threatened with dissipation before the motion is heard. As noted in the legislative history of PACA,

once dissipation has occurred, recovery of trust assets is all but impossible. H.R. Rep. No. 543, 98th

Cong., 2d Sess. 4 (1983), reprinted in 1984 U.S. Code & Admin. News 405, 411. See J.R. Brooks &

Son, Inc., v. Norman’s Country Market, Inc., 98 B.R. 47 (Bkrtcy. N.D. Fla. 1989). Entry of this Order

without notice assures retention of the trust assets under the control of this Court which is specifically

vested with jurisdiction over the trust. See 7 U.S.C. § 499e(c)(5). In accord with Rule 65(b)(2), the

applicant attorney has certified why notice should not be required.

Based on the foregoing, the Court finds that Plaintiff and other PACA trust creditors, if any, will

suffer immediate irreparable injury in the form of a loss of trust assets unless this order is granted

without notice. Therefore, it is hereby ORDERED:

1. Defendant Turner Mead, LLC, its agents, officers, subsidiaries, assigns, banking and

financial institutions, and all persons in active concert or participation with said

Defendant, including Defendant Paul Steven Mead, III, are enjoined and restrained from

dissipating, paying, transferring, or assigning any and all assets covered by or subject to

the trust provisions of the PACA without agreement of Plaintiff, or until further order of

this Court. Said assets include the proceeds from the sales of any or all existing or future

inventories of food or other products derived from perishable agricultural commodities

as defined in PACA, 7 U.S.C. § 499a(b), or receipts of payments for such agricultural

commodities sold prior to the date of this order, provided, however, Defendants may sell

perishable agricultural commodities or products derived from perishable agricultural

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commodities for fair compensation, without right of set-off, on the condition that Turner

Mead maintains the proceeds of such sale subject to this Order.

2. This Order shall be binding upon the parties to this action and all other persons or entities

who receive actual notice of this Order by personal service or otherwise.

3. The $68,103.49 in PACA trust assets belonging to Plaintiff and in the possession of the

Defendants will serve as Plaintiff’s security for this injunction as required by Rule 65(c)

of the Federal Rules of Civil Procedure.

4. This Temporary Restraining Order is entered on this 9th day of February, 2007, at 7:10

p.m., and is effective until the date of hearing on preliminary injunction specified below.

5. Plaintiff shall forthwith serve Defendants, or their resident agent, or their counsel, with

a copy of this Order, Plaintiff’s Complaint, and all papers submitted by Plaintiff in

association with its Temporary Restraining Order application and motion for preliminary

injunction.

Defendants are further ORDERED to show cause why they should not be preliminarily enjoined

from distributing PACA trust funds as set out in this Temporary Restraining Order. Defendants shall

file a written response, if any, to this Order to Show Cause and Plaintiff’s motion for preliminary

injunction, on or before February 21, 2007. 

Plaintiff’s motion for preliminary injunction will be heard by the Court on February 23, 2007,

at 9:00 a.m. Plaintiff’s motion to consolidate the trial on the merits with hearing on preliminary

injunction is DENIED without prejudice. Because Defendants have not been served with the complaint

or any other papers filed by Plaintiff, Defendants could be unfairly prejudiced if trial on the merits were

held on such short notice. 

IT IS SO ORDERED.

Dated: February 9, 2007 

SUSAN ILLSTON

United States District Judge

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