IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF OREGON 

MEDFORD DIVISION 

COOPERATIVE REGIONS OF 

ORGANIC PRODUCER POOLS, a 

Wisconsin Cooperative, 

Plaintiff, 

v. 

NOBLE DAIRY, an Oregon 

business entity of unknown 

form; JERRY NOBLE, 

individually, as trustee for 

the Jerry Noble Trust, and 

doing business as Noble 

Dairy; SANDRA NOBLE, 

individually, as trustee for 

the Jerry Noble Trust, and 

doing business as Noble 

Dairy; ORGANIC WEST MILK, INC., 

a California Corporation; 

GAGE STUEVE; LEONARD C. 

VANDENBURG; DOES 1-50, inclusive, 

Defendants. 

1 - -ORDER 

1:15-cv-00187-PA 

ORDER 

Case 1:15-cv-00187-PA Document 50 Filed 02/23/15 Page 1 of 13
FANNER, District Judge: 

This matter comes before the Court on Plaintiff Cooperative 

Regions of Organic Producer Pools' Motion for a Preliminary 

Injunction (#6). Plaintiff seeks to continue the temporary 

injunction already in place requiring Defendants Jerry Noble, 

Sandra Noble, and N6ble Dairy (collectively "the Noble Dairy 

Defendints") to deliver all of their organic milk products to 

Plaintiff and forbidding them from selling organic milk produGtS 

to any other parties. Plaintiff's motion is GRANTED. 

Background 

Plaintiff in this action is a large agricultural cooperative 

based in Wisconsin. As a cooperative, Plaintiff assembles, packs, 

processes, and sells the produce of its member farms. A large 

part of Plaintiff's operations involve the marketing and 

distribution of organic milk from its member farms. 

The demand for organic milk has increased substantially in 

recent years, but the process of turning an existing dairy farm 

ihto an organic dairy farm-is both expensive and time-consuming. 

As a consequence, the supply of organic milk is limited relative 

to the, growing demand. 

The Noble Dairy Defendants own and operate a large organic 

dairy farm in Josephine County, Oregon. On July 22, 2014, the 

Noble Dairy Defendants signed a Letter of Intent indicating their 

interest in becoming one of Plaintiff's m~mber farms, On August 

14, 2014, the Noble Dairy Defendants ~igned a Dairy Member 

Agreement ("Member Agreement") with -Plaintiff. 

2 - ORDER 

Case 1:15-cv-00187-PA Document 50 Filed 02/23/15 Page 2 of 13
Under the terms of the Member Agreement, th'e Noble Dairy 

Defendants "agree[d] to be bourid by both the ~ooperative bylaws 

and this'agreement." The Noble Dairy Defendants "pledge[d] all 

organic dairy production" to Plaintiff and appointed Plaintiff "as 

its exclusive agent in the marketing of organic milk/dairy 

products." In return, Plaintiff pledged to pay the Noble Dairy 

Defendants "for their ·certified orgapic milk according to the 

rates and programs established· by the Dairy Executive Committee 

and the Board of Directors for the Member's region." 

The Member Agreement was to be "in effect continuously from 

date hereof," subject to termination by either party at any time 

by giving 180 days .notice in writing. The Noble Dairy Defendarits 

were to begin providing organic milk to Plaintiff on February 1, 

2015. 

In early January 2015, the Noble Dairy Defendants began to 

negotiate with Defendant Organic West Milk, Inc. ("Organic West"), 

a California corporation that competes directly with Plaintiff in 

. the organic milk market. On January 12, 2015, the Noble Dairy 

Defendants entered into a contract with Organic West promising to 

provide all of Noble Dairy Defendants' organic milk t6 Organic 

West. Under the terms of the January 12 contract, the Noble Dairy 

Defendants were to begin supplying organic milk to Organic West on 

February 1, 2015. 

On January 22, 2015, the Noble Dairy Defendants notified 

Plaintiff by letter that they were terminating the Member 

Agreement effective immediately. The letter indicated that the 

Noble Dairy Defendants were unaware that the Member Agreement was 

3 - ORDER 

Case 1:15-cv-00187-PA Document 50 Filed 02/23/15 Page 3 of 13
not a letter of intent. 

On January 30, 2~15, Plaintiff sent a cease-and-desist letter 

to Organic West, informing it of Plaintiff's Member Agreement with 

the Noble Dairy Defendants and demanding that Organic West refrain 

from purchasing organic milk from the Nobl~ Dairy Defendants. 

Plaintiff also sent the Noble Dairy Defendants a formal letter on 

January 30, 2015, stating its position that the August 14 Member 

Agreement was binding and that the Noble Dairy Defendants could 

not'withdraw from the cooperative without 180 days notice, 

Plaintiff indicated that it intended to send a truck to pick up 

the first shipment of organic milk from Noble Dairy on February 1, 

2015. 

On February 1, ~015, Plaintiff sent a milk truck to the Noble 

Dairy Defendants. Plaintiff's milk truck was turned away and the 

Noble Dairy Defendants ~elivered their organic milk to Organic 

West. On February 2, 2015, Plaintiff filed this action (#1). On 

February 4, 2015, Plaintiff filed an Ex Parte Motion for Temporary 

Restraining Order and Order to Show Cause re Preliminary 

Injunction (#6). On February 5, 2015, I granted a Temporary 

Restraining Order requiring the Noble Dairy Defendants to deliver 

their entire organic milk production to Plaintiff pursuant to the 

Member Agreement. 

Legal Standard 

The Ninth Circuit.has laid out the factors used to determine 

whether a preliminary injunction should be granted: 

The factors we traditionally consider in determining 

whether to grant a preliminary injunction in this, 

circuit are (1) the likelihood of plaintiff's suctess on 

4 - ORDER 

Case 1:15-cv-00187-PA Document 50 Filed 02/23/15 Page 4 of 13
the merits; (2) the possibility of plaintiff's suffering 

irreparable injury if relief is not granted; ( 3) the 

extent to which the balance of hardships favors the · 

respective parties; and (4) in certain cases whether the 

p~blic iriterest will be advanced by the -provision of 

preliminary relief. Dollar Rent A Car of Wash., Inc. v. 

Travelers Indemnity Co., 774 F.2d _1371, 1374 (9th Cir .. 

1985). To obtain a preliminary injunction, the moving 

party must show either (1) a combination of probable 

success on the merits and the possibility of irreparable 

injury or (2) that serious questions are raised and the 

balance of hardships tips in its favor. Benda v. Grand 

Lodge of Int'l Ass'n of Machinists & Aerospace Workers, 

584 F.2d 308, 314-315 (9th Cir. 1978) ,'cert dismissed, 

441 U.S. 937, 99 S. Ct. 2065, 20 L. Ed. 2d 667 (1979). 

These two formulations represent two points on a sliding 

scale in which the required degree of irreparable harm 

increases as the probability of success decreases. 

Oakland Tribune, Inc. v. Chronicle Publishing Co., 762 

F.2d 1374, 1376 (9th Cir: 1985). 

United States v. Odessa Union Warehouse, 833 F.2d 172, 174 (9th 

Cir. 1987). 

~ 

Thus, "the elements of the preliminary injunction test are 

balanced, so that a stronger showing of one element may offset a 

weaker showing of another. For example, a stronger showing of 

irreparable harm to plaintiff might offset a lesser showing of 

likelihood of success on the merits." Alliance for the Wild 

Rockies v. Cottrell, 632 F.3d 1127, 1131 (9th Cir. 2011) (citing -

Winter v.· Natural Res. Def. Council, Inc., 555 U.S. 7 (2008)). 

The moving party must show, at an irreducible minimum, that 

they have a fair chance of success on the merits. Stanley v. 

Univ. of S. Cal., 13 F.3d-1313, 1319 (9th Cir. 1994) (quoting 

Martin v. Int'l Olympic Comm., 740 F.2d 670, 674-75 (9th Cir. 

1994)); Comm. Of Cent. Am. Refugees v. INS, 795 F.2d 1434, 1437 

(9th Cir. 1986). 

5 - ORDER 

Case 1:15-cv-00187-PA Document 50 Filed 02/23/15 Page 5 of 13
Discussion 

Plaintiff seeks an injunction requiring the Noble Dairy 

Defendants to comply with the terms of the Member Agreement by 

delivering their entire organic milk production to Plaintifr ~nd 

refraining from selling their organic milk to any other party, 

including Organic West. Such an injunction would last until 

August 4, 2015. 1 

I. Likelihood of Success on the Merits 

The Ninth Circuit has adopted an analytical approach to the 

"likelihood of success" factor which considered whether "serious 

questions going to the merits [are] raised and the balance of 

hardships tips sharply in plaintiff's favor." Cottrell, 632 F.3d 

at 1131. This test is also referred to as the "serious questions" 

test. Id. "In other words, 'serious questions going to the 

merits' and a hardship balance that tips sharply toward the 

plaintiff can support the issuance of an injunctio~, assuming the 

other two elements of the Winter test are met." Id. at 1132. 

Under Oregon law, a claim for breach of contract requi~es 

that the plaintiff plead and prove the existence of a contract, 

its relevant terms, the plaintiff's full performance and lack of 

breach, and the defendant's breach resulting in damage 'to 

plaintiff. Slover v. Or. State Bd. Of Clinical Soc. Workers, 144 

Or. App. 565; 570 (1996). 

Aug~~t 4, 2015, is 180 days after the date of the Temporary 

Restraining Order issued in this case (#12). I accept 

Plaintiff's argument that th.e 180 notice period should not begin 

to run until the date ·Of the Noble Dairy Defendant's actual 

compliance with the Member Agreement, as opposed to the date of 

their notice of termination, January 22, 2015. 

6 - ORDER 

Case 1:15-cv-00187-PA Document 50 Filed 02/23/15 Page 6 of 13
Plaintiff contends that it has shown a likelihood of success 

on the merits based on the terms of the August 14 Member Agreement 

signed by the Noble_ Dairy_Defendants and the undisputed fact that 

the Noble Dairy Defendants refused to deliver organic_milk to 

-Plaintiff until ordered to do so by this Court. 

Defendants do not dispute that the Noble Dairy Defenaants 

signed the Member Agreement. Rather, Defendants contend that 

Larry Hansen, Plaintiff's sales representative, told the Noble 

Dairy Defendants that the Member Agreement was not binding until 

the Noble Dairy Defendants made their first delivery of milk to 

Plaintiff. Defendants characterize the Member Agreement as a 

letter of intent, rather than a binding contract. 

I do not find Defendants' arguments persuasive. First, I 

note that the Noble Dairy Defendants signed a Letter of Intent 

with Plaintiff in July 2014. That document was clearly labeled as 

a letter of intent and contained language limiting its binding 

power. The subsequent Member Agreement, by-contrast, states that 

the signatory agrees to be bound by Plaintiff's bylaws and- the 

agreement itself. It lists the right§ and obligations of both 

parties. The plain language of the Member Agreement indicates 

that it -constituted a binding contract. It is not necessary at 

this stage to determine what, if any, representations were made by 

Larry Hansen to the Noble Dairy Defendants or what significance 

those representations might have for the ultimate enforceabil~~y 

of the Member Agreement. 

The Noble Dairy Defendants separately argue that the Member 

Agree~ent did not co~tain pricing information for' the organic milk 

7 - ORDER 

Case 1:15-cv-00187-PA Document 50 Filed 02/23/15 Page 7 of 13
and that, as such, _the Member Agreement lacked an essential term. 

I note, however, that the Member Agreement does contain a term 

concerning the price to be paid for the organic milk', which 

explains how the price will be set. 

Based on the record, I conclude that Plaintiff has 

demonstrated a sufficient likelihood of success on the merits to 

justify the issuance of a preliminary injunction. 

II. Irreparable Harm 

A plaintiff seeking a preliminary injunction must show a 

likelihood that the party will suffer irreparable harm in the 

absence of preliminary relief. Winter, 555 U.S. at 20. Typically, 

monetary harm does not constitute irreparable harm. Los Angeles 

Mem'l Coliseum Comm'n v. Nat'l Football League, 634 -F.2d 1197, 

1202 (9t1_;l Cir. 1980). The Ninth Circuit has recognized,_ however, 

that "intangible injuries, such as damage to ongoing recruitment 

efforts and goodwill, qualify as irreparable harm." Rent-ACenter, Inc. v. Canyon Television and Appliance Rental, Inc., 944 

F.2d 597, 603 (9th Cir. 1991); see also Stuhlbarg Int'l Sales Co., 

Inc. v. John D. Brush and Co., Inc., 240 F.3d 832, 841 (9th Cir. 

2 001) (holding that, in the context of trademark' cases, " [ e] vidence 

of threatened loss of prospective customers or goodwill certainly 

supports a finding of the possibility of irreparable harm."). 

In this case, Plaintiff has provided_a declaration of Louise 

Hemstead, Plaintiff's Chief Operating Officer. Hemstead's 

responsibilities include direction and oversight of Plaintiff's 

supply chain. Hemstead~s Declaration explains that Plaintiff used 

Noble dairy's production figures in calcu~ating its available 

8 - ORDER 

Case 1:15-cv-00187-PA Document 50 Filed 02/23/15 Page 8 of 13
supply of organic m{lk for the coming months. Plaintiff's 

forecasted supply is, in turn, used to make commitments to third 

party customers. Plaintiff argues that if the Noble Dairy 

Defendants are allowed to iefuse to delivery organic milk as 

required by the Member Agreement, Plaintiff will be unable to meet 

its "downstream" commitments. Failure to meet i-ts commitments 

would result. in the loss of customer goodwill and future business 

opportunities as customers look elsewhere for more reliable 

sources of organic milk. 

Plaintiff also asserts that, due to the limited supply of 

organic milk relative to demand and the constraints of its status 

as a cooperative, it is unable to procure replacement product to 

cover the loss of the Noble Dairy milk. 

Defendants contend that the milk Plaintiff has received from 

Noble Dairy since the February 5 TRO has been sent by Plaintiff to 

be processed into powdered milk and cheese. Defendants ·contend 

Plaintiff's use of the Noble Dai~y milk for ~heese artd powdered 

miJk indicates that the milk is "excess" product and that, as the 

product is excess, Plaintiff will not be irreparably harmed by its 

loss. 

The Hemstead .Declaration provides a plausible explanation for 

Plaintiff's decision to use Noble Dairy's milk for cheese and 

powdered milk, however. According to the Hemstead Declaration, 

Plaintiff's 2015 milk plan called for a large portion of Northwest 

milk to be made into less perishable products like ch-eese, butter, 

and powdered milk. Those less-perishable products can then be 

9 - ORDER 

Case 1:15-cv-00187-PA Document 50 Filed 02/23/15 Page 9 of 13
shipped to other regions of the country, freeing Plaintiff to use 

the milk produced by member farms in those regions for bottling. 

In light of the Hemstead Declaration, I conclude that Plaintiff's 

decision to allocate the Noble Dairy milk to cheese and powdered 

milk production does not undermine Plaintiff's showing of 

irreparable harm. 

I conclude that Plaintiff has made a sufficient showing of 

irreparable harm to justify the issuance of a preliminary 

injunction. 

III. Balance of Equities 

In considering a motion.£or a preliminary injunction, "a 

court must balance the competing claims of injury and must 

consider the effect on each party of the granting or withholding 

of the requested relief." Amoco Prod. Co. v. Vill. of Gambell, 

AK, 480 U.S. 531, 542 (1987); see also Univ. of Hawai'i Prof'l 

.. 

Assembly v. Cayetano, 183 F.3d 1096, 1108 (9th Cir. 1999) ("To 

determine which way the balance of the hardships tips, a court 

must identify the possible' harm caused by the preliminary 

injunction against the possibility of harm caused by not issuing 

it. If) • 

Althou~h I recognize that under the terms of the injunction, 

Defendants will be de~rived of the benefit of their January 12 

contract, that deprivation will only endure for the limited period 

of this injunction. The harm to the Noble Dairy Defendants is 

also limited by the fact that Plaintiff will _continue to pay the 

Noble Dairy Defendants £or the organic milk a the rate provided 

10- ORDER 

Case 1:15-cv-00187-PA Document 50 Filed 02/23/15 Page 10 of 13
for by the Member Agreement. 2 

I conclude that the balance of equities tips in favor of an 

injunction. 

IV. Public Interest 

Generally speaking, the public has an interest in enforcement 

of valid contracts to which the parties have voluntarily agreed. 

Giftanqo, LLC v. Rosenberg, 925 F. Supp. 2d 1128, 1141 (D. Or. 

2013) . The Oregon legislature has enacted laws for the express 

purpose of protecting cooperatives in the event of the breach or 

threatened breach of cooperative contrcacts. ORS 62.365. The 

Oregon Supreme Court has also recognized the importance of 

enforcing agricultural cooperative member contracts: 

[An agricultural cooperative's] success, therefore, and 

the benefits to be derived by the members thereof, is 

wholly dependent upon the performance, by all of the 

contracting parties, with the terms and conditions of 

their respective ~ontracts. In order to carry o~t the 

objects and purposes for which it was organized, it.is 

necessary for the association to enter into contracts 

for the disposal of the products of its members. Before 

it can safely make such contracts, it must be assured 

that it will obtain the products contracted for. It must 

also be able to form a reasonable estimate, in advance, 

of the amount of products which will be grown on the 

acreage stipulated~ and maintain a sufficient 

organization and force to prepare the same for market. 

It is also necessary to secure the capital or credit 

required to discharge its obligations to the growers and 

to conduct ~nd carry on its business. The perishable 

nature of the products handled; the uncertainty' of the 

market conditions and prices, its inability to buy these 

products from nonmembers, and the limited time in which 

its business for each season must be conducted and 

2

The record indicates that Plaintiff's projections were that 

it would pay its member farms $35 .. 99 per hundredweight of organic 

milk. Defendants' January 12 contract contemplated a rate of 

$36.60 per hundredweight. 

11- ORDER 

Case 1:15-cv-00187-PA Document 50 Filed 02/23/15 Page 11 of 13
completed, makes it essential that each member of the 

association should perform his contract according to its 

terms. From these considerations, it must be obvious 

that an action at law to recover th~ stipulated damages 

would not ~fford to the plaintiff a full, adequate, and 

complete,remedy for the wrong done to the.association, 

and indirectly to it~ members by a member's breach of 

his contract. · 

Or. Growers' Co-op. Ass'n v. Lentz, 107 Or. 561, 580-81 (1923) 

In light of the steps t~ken by the Oregon legislature to 

protect and support agricultural cooperatives, combined with the 

general public interest in the enforcement of valid contracts, I 

conclude that an.injunctiori is in the public interest. 

V. ORS 62.365 

Plaintiff argues that it is entitled to an injunction 

pursuant to ORS 62~365, which provides that: 

In the event of a breach or threatened breach of a 

cooperative contract authorized by ORS 62.355, the 

cooperative is entitled to an injunction to prevent the 

breach or any further breach thereof, arid to a judgment 

of specific performance thereof. Upon filing of a 

verified complaint showing the breach or threatened 

breach, and, upon filing a sufficient bond, the 

cooperative is entitled to a temporary restraining 

order. 

ORS 62.365(1) 

Defendants contend that Federal Rule of Civil Procedure 65 

and not ORS 62.365 is the appropriate standard for the issuance of 

a preliminary injunction in this case. It is not necessary to 

resolve the issue of whether ORS 62.365 applies, as I have 

concluded that flaintiff is entitled to a preliminary injunction 

under Rule 65. 

12- ORDER 

Case 1:15-cv-00187-PA Document 50 Filed 02/23/15 Page 12 of 13
Conclusion 

Plaintiff's Motion for a Preliminary Injunction (#6) is 

GRANTED. The injunction previously ordered by this Court (#12) on 

February 5, 2015, is continued on the same terms through August 4, 

2015. The Nbble Dairy Defendants are hereby enjoined from selling 

organic milk to any third parties, including Defendant Organic 

West Milk, Inc. The Noble Dairy Def~ndants are hereby required to 

deliver all the organic milk they produce to Plaintiff, pursuant 

to the terms of the August 14, 2014, Marketing Agreement between 

the parties. Plaintiff shall pay the Noble Dairy Defendants for 

the organic milk as provided by the Marketing Agreement. As 

security, Plaintiff shall maintain the bond previously entered in 

' this case. 

IT IS SO ORDERED. 

DATED this ~~day of February, 2015. 

OWEN M. PANNER 

U.S. DISTRICT JUDGE 

13- ORDER 

Case 1:15-cv-00187-PA Document 50 Filed 02/23/15 Page 13 of 13