Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_19-cv-02692/USCOURTS-cand-5_19-cv-02692-0/pdf.json

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

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

SALINAS VALLEY PRODUCE, INC.,

Plaintiff,

v.

GOLDEN RULE PRODUCE, INC., et al.,

Defendants.

Case No. 19-cv-02692-BLF 

ORDER GRANTING PLAINTIFF’S EX 

PARTE APPLICATION FOR 

TEMPORARY RESTRAINING ORDER

WITHOUT NOTICE; ISSUING ORDER 

TO SHOW CAUSE FOR 

PRELIMINARY INJUNCTION

[Re: ECF 9]

Before the Court is Plaintiff’s Ex Parte Application for Temporary Restraining Order 

Without Notice (“Application for TRO”). ECF 9. Also pending before the Court is Plaintiff’s 

Motion for Preliminary Injunction. ECF 10. The Court finds the Application for TRO suitable for 

submission without oral argument. For the reasons that follow, Plaintiff’s Application for TRO is 

GRANTED, and Defendants are hereby ORDERED TO SHOW CAUSE why a preliminary 

injunction should not issue. 

I. BACKGROUND

On May 17, 2019, Plaintiff Salinas Valley Produce, Inc. filed suit against Defendants 

Golden Rule Produce, Inc. and Dimitrios Tsigaris, alleging violation of the Perishable Agricultural 

Commodities Act (7 U.S.C. §§ 499a et seq.) (“PACA”), failure to pay PACA trust assets, breach 

of contract, breach of fiduciary duty, and conversion and unlawful retention of PACA trust assets. 

See generally Compl., ECF 1. Plaintiff holds a PACA license and sells wholesale quantities of 

perishable agricultural commodities in interstate commerce. See Compl. ¶ 2. Defendant Golden 

Rule Produce is also licensed under PACA and is a wholesale distributor of produce. See id. ¶ 3. 

Defendant Tsigaris is a principal of Defendant Golden Rule Produce. See id.

Plaintiff alleges that it sold $275,178.00 worth of fresh produce to Defendants between 

October 16, 2017, and March 19, 2019. See Compl. ¶ 6. Plaintiff further alleges that Defendants 

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have failed to pay for this produce despite repeated demands, and that under PACA Plaintiff “is a 

beneficiary of a statutory trust res designated as a fund from which it can be assured payment.” 

See id. ¶ 8. Plaintiff asserts that the trust became effective at the time Defendants began accepting 

shipments of produce. Id. 

II. LEGAL STANDARD

Under Federal Rule of Civil Procedure 65(b), a court may grant a temporary restraining 

order without notice to the adverse party if:

(1) specific facts in an affidavit or a verified complaint clearly show that immediate and 

irreparable injury, loss, or damage will result to the movant before the adversary party 

can be heard in opposition; and 

(2) the movant’s attorney certifies in writing any efforts made to give notice and the 

reasons why it should not be required.

Fed. R. Civ. P. 65(b). 

The substantive standard for issuing a temporary restraining order is identical to the 

standard for issuing a preliminary injunction. See Stuhlbarg Int’l Sales Co., Inc. v. John D. Brush 

& Co., 240 F.3d 832, 839 n.7 (9th Cir. 2001); Lockheed Missile & Space Co. v. Hughes Aircraft, 

887 F. Supp. 1320, 1323 (N.D. Cal. 1995). An injunction is a matter of equitable discretion and is 

“an extraordinary remedy that may only be awarded upon a clear showing that the [moving party] 

is entitled to such relief.” Winter v. Natural Resources Defense Council, Inc., 555 U.S. 7, 22 

(2008). 

A party seeking preliminary injunctive relief must establish “[1] that he is likely to succeed 

on the merits, [2] that he is likely to suffer irreparable harm in the absence of preliminary relief, 

[3] that the balance of equities tips in his favor, and [4] that an injunction is in the public interest.” 

Winter, 555 U.S. at 20. Alternatively, an injunction can issue where “the likelihood of success is 

such that serious questions going to the merits were raised and the balance of hardships tips 

sharply in [the moving party’s] favor,” provided that the moving party can also demonstrate the 

other Winter factors. Alliance for the Wild Rockies v. Cottrell, 632 F.3d 1127, 1131 (9th Cir. 

2011) (citation and internal quotation marks omitted). Showing “serious questions going to the 

merits” requires more than establishing that “success is more likely than not;” rather, it requires 

the moving party to demonstrate a “substantial case for relief on the merits.” Leiva–Perez v. 

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Holder, 640 F.3d 962, 967 (9th Cir. 2011). Under either standard, the moving party bears the 

burden of making a clear showing on these elements and on entitlement to this extraordinary 

remedy. Earth Island Inst. v. Carlton, 626 F.3d 462, 469 (9th Cir. 2010). 

III. DISCUSSION 

Plaintiff’s Application for TRO “seeks to enjoin Golden Rule and its officers, agents, 

servants, employees, successors, banking institutions, attorneys, and all other persons in active 

concert or participation with them (including defendant, Dimitrios Tsigaris), from using,

consuming or otherwise dissipating trust assets under PACA, or making payment of any PACA 

trust asset to any creditor, person, or entity until full payment of $275,128.00, plus interest, costs, 

and attorneys’ fees to [Plaintiff], further order of this Court or [Plaintiff’s] agreement.” See

Application for TRO at 1–2. Plaintiff argues that absent this relief, “[Plaintiff] will suffer

immediate and irreparable injury, loss, and damage due to Golden Rule’s continued dissipation of

[Plaintiff’s] interest in the statutory trust until judgment can be granted on the merits.” See id. at 

2. In support, Plaintiff submits a Memorandum of Points and Authorities (ECF 9-4), the 

Declaration of Alejandro Aguilar (ECF 9-1), the Declaration of Kaipo Young (ECF 9-2), and an 

Attorney Certification Why Notice Should Not Be Required (ECF 9-3). As discussed below, the 

Court GRANTS Plaintiff’s Application for TRO. 

A. Likelihood of Success on the Merits 

Plaintiff has demonstrated a likelihood of success on the merits because Plaintiff submits 

evidence that Defendants have not paid for the produce they received from Plaintiff and sets forth 

that PACA provides for the relief requested. Specifically, Plaintiff’s declarations demonstrate that 

(1) Plaintiff is a licensed dealer under PACA; (2) Golden Rule is licensed under PACA; 

(3) between October 16, 2017, and March 19, 2019, Plaintiff sold and delivered $275,128.00 

worth of fresh produce to Defendants; (4) Golden Rule received and accepted the produce without 

objection; (5) each shipment was invoiced according to PACA requirements; and (6) Golden Rule 

failed to pay the invoices within the agreed payment terms and the cumulative amount of 

$275,128.00 remains overdue and unpaid. See Aguilar Decl. ¶¶ 5–9, 11–18; Young Decl. ¶¶ 16, 

17; see also Ex.’s A–D to Aguilar Decl.; Ex.’s A–C to Young Decl. Accordingly, Plaintiff has 

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shown a strong likelihood of success on the merits. 

B. Irreparable Harm 

Plaintiff asserts that Golden Rule (1) is in severe financial jeopardy; (2) has either 

dissipated or threatened to dissipate the trust assets subject to PACA, 7 U.S.C. § 499e(c)(2); and 

(3) is not or may not be in a position to pay Plaintiff’s PACA trust claim. See Memorandum 

at 7–8, ECF 9-4. Plaintiff submits evidence that multiple checks from Golden Rule to Plaintiff 

were returned by the bank for insufficient funds. See Aguilar Decl. ¶ 15; see also Ex. C to Aguilar 

Decl. In March 2019, Plaintiff received two additional checks from Golden Rule but did not 

attempt to cash them because Plaintiff was informed that the Golden Rule bank account contained 

insufficient funds. See Aguilar Decl. ¶ 16. Plaintiff has continued to demand payment from 

Defendants, to no avail. See id. ¶¶ 13–14, 18. In the meantime, Defendants have made payments 

to other creditors or owe significant sums to other creditors that jeopardize Plaintiff’s ability to 

recover. See Young Decl. ¶¶ 6–10, 12–13. Based upon the pleadings, declarations, and other 

submissions Plaintiff has filed in this action, the Court concludes that Plaintiff will suffer 

immediate and irreparable injury due to Golden Rule’s dissipation of Plaintiff’s beneficial interest 

in the statutory trust created under PACA, 7 U.S.C. §499e(c), and that this dissipation will 

continue in the absence of injunctive relief. 

C. Remaining Winter Factors 

The Court finds that the balance of equities tips in Plaintiff’s favor, and Congress has 

found that the public interest is served by the enforcement of these trusts. See 7 U.S.C. 

§ 499e(c)(1). Thus, the remaining Winter factors are in Plaintiff’s favor. 

D. Notice

The Court concludes that if notice is given to Golden Rule during the pendency of 

Plaintiff’s Application for TRO, trust assets under PACA, 7 U.S.C. §499e(c), will be further 

threatened with dissipation before the Application for TRO is heard. As noted in the legislative 

history of PACA, once dissipation has occurred, recovery of trust assets is all but impossible. See

H.R. Rep. No. 543, 98th Cong., 2d Sess. 4 (1983), reprinted in 1984 U.S. Code Cong. & Admin. 

News 405, 411; see also Chula Brand CA, Corp. v. Martinez, 2017 WL 107672, at *3 (S.D. Cal. 

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Jan. 11, 2017). Entry of the instant order without notice assures retention of the trust assets under 

the control of this Court, which is specifically vested with jurisdiction over the trust. 7 U.S.C. 

§ 499e(c)(5). In accord with Rule 65(b)(1), Plaintiff’s attorney has certified why notice should not 

be required. See Attorney Certification Why Notice Should Not Be Required, ECF 9-3. 

E. Bond 

Plaintiff requests that no bond be required. See Application for TRO at 10. The Court 

agrees. It would appear that Defendants already possess $275,178.00 worth of trust assets from 

Plaintiff as security for the issuance of injunctive relief. 

F. Conclusion

In conclusion, the Court hereby GRANTS Plaintiff’s Application for TRO. 

IV. ORDER

For the foregoing reasons, the Court finds that Plaintiff will suffer immediate and 

irreparable injury in the form of a loss of trust assets unless the instant order is granted without 

notice. Accordingly, IT IS HEREBY ORDERED that: 

1. This Temporary Restraining Order is entered this 20th day of June, 2019. 

2. Pending hearing on the Order to Show Cause scheduled below, Defendant Golden Rule 

Produce, Inc. and its officers, agents, servants, employees, attorneys, subsidiaries, 

assigns, banking and financial institutions, and all persons in active concert or 

participation with Golden Rule Produce, Inc. (including Defendant Dimitrios Tsigaris) 

are enjoined and restrained from dissipating, paying, transferring, encumbering, 

assigning or selling any and all assets covered by or subject to the PACA trust 

provisions until further order of the Court. 

3. Under PACA, 7 U.S.C. §499e(c)(2), the assets subject to this order include all of 

Golden Rule Produce, Inc.’s assets, unless it or a third party can prove to this Court 

that a particular asset is not derived from perishable agricultural commodities, 

inventories of food, other products derived from perishable agricultural commodities, 

receivables or proceeds from the sale of such commodities or products, or purchased 

with funds from a comingled account containing proceeds from the sale of such 

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commodities or products. However, Golden Rule Produce, Inc. may sell perishable 

agricultural commodities or products derived from perishable agricultural commodities 

for fair compensation, without right of set-off, on the condition that Golden Rule 

Produce, Inc. accounts for and maintain the proceeds of any sale subject to this Order.

4. Plaintiff shall serve Defendants, or their registered agent, or their counsel, with a copy 

of this Order no later than June 24, 2019. 

5. Golden Rule Produce, Inc. shall serve a copy of this Order on all banking or financial 

institutions with which it conducts business, or any person or entity who may be 

holding assets for or on its behalf. 

6. This Order is binding upon the parties to this action, banking and financial institutions, 

and all other persons or entities receiving actual notice of this Order by personal 

service, including email, facsimile transmission, priority mail, or Federal Express.

7. The $275,178.00 in PACA trust assets allegedly belonging to Plaintiff and in Golden 

Rule Produce, Inc.’s possession will serve as Plaintiff’s security for this injunction as 

required by FRCP 65(c). 

8. A hearing on Plaintiff’s Motion for Preliminary Injunction (ECF 10) is set for June 27, 

2019, at 9:00 A.M., in Courtroom 3, 5th Floor, U.S. District Court, 280 South 1st 

Street, San Jose, CA 95113. 

9. Defendants are ORDERED TO SHOW CAUSE why a preliminary injunction should 

not issue enjoining them from distributing PACA trust funds as set out in Plaintiff’s 

Motion for Preliminary Injunction. Defendants’ opposition shall be filed no later than 

June 25, 2019. 

10. Defendants may apply to the court for modification or dissolution of this Temporary 

Restraining Order on two days’ notice, or such shorter notice as the court may allow. 

See Fed. R. Civ. P. 65(b). 

11. The parties may stipulate to a later hearing date on the Motion for Preliminary 

Injunction upon agreement that this TRO will remain in effect until the hearing date. 

Motions are heard on Thursdays at 9:00 A.M. Due to the Court’s unavailability, no 

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motions will be heard from June 28 to July 15, 2019. 

IT IS SO ORDERED.

Dated: June 20, 2019 

 ______________________________________

BETH LABSON FREEMAN

United States District Judge

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