Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_08-cv-00122/USCOURTS-cand-5_08-cv-00122-1/pdf.json

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

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28 This disposition is not designated for publication and may not be cited. 1

Case No. C 08-00122

ORDER GRANTING PLAINTIFFS’ REQUEST FOR A PRELIMINARY INJUNCTION

(JFLC1)

**E-Filed1/29/2008**

NOT FOR CITATION

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

ASA FARMS, INC., a California corporation and

BRAGA RANCH,

 Plaintiffs,

 v.

FRESH ‘N HEALTHY, INC. A Delaware

corporation, et al.,

 Defendant.

Case Number C08-00122 JF

ORDER GRANTING PLAINTIFFS’ 1

MOTION FOR PRELIMINARY

INJUNCTION

[re: docket no. 2]

ASA Farms, Inc. and Braga Ranch (“Plaintiffs”) allege that Fresh ‘N Healthy, Inc.

(“Fresh”) owes them $302,756.84 for produce purchased in a series of transactions between

November 9, 2007 and December 28, 2007. Plaintiffs seek a preliminary injunction enjoining

Fresh, its agents, officers, directors, shareholders, subsidiaries, assigns and all persons in active

concert or participation with them who receive actual notice of this Order from dissipating the

assets of a Perishable Agricultural Commodities Act (“PACA”) statutory trust. 7 U.S.C. §

499e(c)(5) invests courts with the authority to provide injunctive relief to prevent dissipation of a

Case 5:08-cv-00122-JF Document 19 Filed 01/29/08 Page 1 of 4
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 Without citing any authority, Fresh argues that this Court cannot enjoin banking 2

institutions because Fresh has no control over its banking institutions and those institutions are

not parties to this case. However, where a PACA debtor deposits PACA assets into a bank

account, courts may enjoin the bank from distributing those funds. Cont’l Fruit Co. v. Gatziolis

& Co., 774 F. Supp. 499 (N.D. ill. 1991). Defendants bear the burden of proving that a particular

asset is not a PACA asset. Fresh has not made any argument that the assets controlled by any

particular banking institutions are not PACA assets. 

2

Case No. C 08-00122

ORDER GRANTING REQUEST FOR A PRELIMINARY INJUNCTION

(JFLC1)

PACA trust. Although it has not filed opposition to the motion, Fresh did raise certain objections

to Plaintiffs’ proposed order. Notwithstanding these objections, Fresh consents to entry of a

preliminary injunction. 

IV. ORDER

Good cause therefor appearing, IT IS HEREBY ORDERED that:

1. Defendant Fresh, its agents, officers, directors, subsidiaries, assigns and banking

institutions and all persons in active concert or participation with them who 2

receive actual notice of this Order, are enjoined and restrained from dissipating,

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

to the trust provisions of the PACA without agreement of the parties or until

further order of this Court. Under § 499e(c)(2) of PACA, the assets subject to this

Order include all assets of Fresh, unless Fresh can prove that a particular asset is

not derived from perishable agricultural commodities, inventories of food or other

products derived from perishable agricultural commodities or receivables or

proceeds from the sale of such commodities or products. See In re Kornblum &

Co., 81 F.3d 280 (2d Cir. 1996) (holding that the burden is on the defendant to

demonstrate that dissipated assets were not purchased with PACA trust assets).

2. This Order shall be binding upon the parties to this action, their officers, agents,

employees, banking institutions or attorneys and all other persons or entities who

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

3. Plaintiffs shall not be required to post a bond.

Case 5:08-cv-00122-JF Document 19 Filed 01/29/08 Page 2 of 4
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Case No. C 08-00122

ORDER GRANTING REQUEST FOR A PRELIMINARY INJUNCTION

(JFLC1)

DATED: January 29, 2008.

 

JEREMY FOGEL

United States District Judge

Case 5:08-cv-00122-JF Document 19 Filed 01/29/08 Page 3 of 4
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Case No. C 08-00122

ORDER GRANTING REQUEST FOR A PRELIMINARY INJUNCTION

(JFLC1)

This Order has been served upon the following persons:

Kelly McCarthy Sutherland kelly@lomgil.com

James Washburn Sullivan jim@lomgil.com

Kenneth Gorman ken@lomgil.com

Robert Anthony Franklin rfranklin@murraylaw.com

Case 5:08-cv-00122-JF Document 19 Filed 01/29/08 Page 4 of 4