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Mary Ann Sussex, et al v. Turnberry/Mgm Grand

May 1, 2013

MARY ANN SUSSEX, ET AL., PLAINTIFFS,
v.
TURNBERRY/MGM GRAND TOWERS, LLC, ET AL.,
DEFENDANTS.



The opinion of the court was delivered by: Miranda M. Duunited States District Judge

I. SUMMARY

ORDER

(Plfs.' Motion for Leave to File -- dkt. no. 106; Plfs.' Application for Temporary Restraining Order -- dkt. no. 107; Plfs.' Motion for Preliminary Injunction -- dkt. no. 108)

Before the Court are Plaintiffs' Motion for Leave to File Under Seal (dkt. no. 106), Plaintiffs' Ex Parte Application for a Temporary Restraining Order (dkt. no. 107), and Plaintiffs' Motion for Preliminary Injunction (dkt. no. 108). For the reasons set forth below, the Motions are denied.

II. BACKGROUND

This matter arises from a long-standing dispute brought by purchasers of condominium units developed and sold by Defendant Turnberry/MGM Grand Towers, LLC ("Turnberry/MGM"). The factual background giving rise to the motions before the Court is summarized in the Court's March 2, 2010, Order. (See dkt. no. 63.) The case has proceeded in arbitration for over three years, and has grown to encompass not only Plaintiffs, but also other state court claimants who filed a similar suit against Turnberry/MGM. In recent months, a dispute has arisen between the parties to the arbitration as to the impartiality of the designated arbitrator, Brendan M. Hare.

Turnberry/MGM sought to have Arbitrator Hale removed, alleging that his creation of a litigation finance firm during the course of the arbitration renders him partial and unfit to arbitrate the action. On March 6, 2013, the American Arbitration Association ("AAA") denied Turnberry/MGM's request to remove Arbitrator Hale from the arbitration, and reaffirmed him as the designated arbitrator. After another request to reconsider the arbitrator, the AAA's Executive Administrative Review Committee again reaffirmed Arbitrator Hale as the arbitrator.

On April 24, 2013, Turnberry/MGM filed a motion to disqualify Hale in the state court proceeding where the state court claimants initially filed suit. A hearing on the motion is scheduled for May 6, 2013. Fearing that the motion before the state court will interfere with this Court's exclusive jurisdiction over their claim, Plaintiffs in this federal action filed an Application for an ex parte temporary restraining order ("TRO") and a Motion for a Preliminary Injunction seeking to enjoin the state court from issuing a decision in Turnberry/MGM's motion to disqualify.

III. LEGAL STANDARD

Federal Rule of Civil Procedure 65 governs preliminary injunctions and temporary restraining orders, and requires that a motion for temporary restraining order include "specific facts in an affidavit or a verified complaint [that] clearly show that immediate and irreparable injury, loss, or damage will result to the movant before the adverse party can be heard in opposition," as well as written certification from the movant's attorney stating "any efforts made to give notice and the reasons why it should not be required." Fed. R. Civ. P. 65(b). "If [a TRO] is issued without notice, the motion for a preliminary injunction must be set for hearing at the earliest possible time, . . . ." Fed. R. Civ. P. 65(b)(3).

Temporary restraining orders are governed by the same standard applicable to preliminary injunctions. See Cal. Indep. Sys. Operator Corp. v. Reliant Energy Servs., Inc., 181 F.Supp.2d 1111, 1126 (E. D. Cal.2001). A temporary restraining order "should be restricted to serving [its] underlying purpose of preserving the status quo and preventing irreparable harm just so long as is necessary to hold a hearing, and no longer." Granny Goose Foods, Inc. v. Bhd. of Teamsters & Auto Truck Drivers Local No. 70, 415 U.S. 423, 439 (1974).

Like a preliminary injunction, the Court may issue a temporary restraining order if a plaintiff establishes: (1) likelihood of success on the merits; (2) likelihood of 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 v. Natural Res. Def. Council, Inc., 555 U.S. 7, 20 (2008). "Injunctive relief [is] an extraordinary remedy that may only be awarded upon a clear showing that the plaintiff is entitled to such relief." Id. at 22.

IV. DISCUSSION

Before addressing the injunction motions, the Court finds Plaintiffs have not demonstrated compelling reasons to support sealing Exhibits 8 and 10-35 of the Blumenthal Declaration. "[A] party seeking to seal judicial records must show that compelling reasons supported by specific factual findings outweigh the general history of access and the public policies favoring disclosure." Pintos v. Pac. Creditors Ass'n, 605 F.3d 665, 678 (9th Cir. 2010) (internal quotations and ellipses omitted). Under the "compelling reasons" standard, a district court must weigh "relevant factors," base its decision "on a compelling reason," and "articulate the factual basis for its ruling, without relying on hypothesis or conjecture." Hagestad v. Tragesser, 49 F.3d 1430, 1434 (9th Cir. 1995). Plaintiffs have only identified a contractual provision in the operative Purchase and Sale Agreement which requires that arbitration proceedings be kept confidential "except in the course of judicial, regulatory, or arbitration proceeding." The carve-out for judicial proceedings appears to exempt the confidentiality clause's applicability in this situation. Even if it does not, Plaintiffs fail to articulate a specific factual basis supported by the appropriate factors to overcome the public's "general right to ...


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