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Goldberg v. Barreca

United States District Court, D. Nevada

August 9, 2017

SHELDON F. GOLDBERG, et al., Plaintiff(s),
v.
JACK BARRECA, et al., Defendant(s).

          ORDER

         Presently before the court is an emergency motion for a temporary restraining order (TRO) and appointment of receiver or trustee filed by plaintiffs Sheldon F. Goldberg, Barbara A. Goldberg, and Beneficial Innovations, Inc. (ECF No. 4). Plaintiffs request this court to enjoin the defendants from their continued involvement in an alleged fraudulent business operation involving a margarita product. Id. Plaintiffs further request this court to appointment a receiver or trustee- namely, plaintiff Sheldon Goldberg himself-to take over control of the margarita product venture. Id. The motion is denied in its entirety.

         I. Facts

         This is a civil fraud and breach-of-contract case about margaritas. (ECF Nos. 1, 4). On August 4, 2017, plaintiffs filed a complaint against defendants in this court alleging nineteen causes of action. (ECF No. 1). On August 7, 2017, plaintiffs filed the instant emergency motion for a TRO and for the appointment of a receiver or trustee. (ECF No. 4).[1] On August 8, 2017, this court received defendants' ex parte response to plaintiffs' motion for a TRO. (ECF No. 6).

         In their motion, plaintiffs recite a detailed history of a business relationship between plaintiffs and defendants. In a nutshell, plaintiffs allege that they invested over $220, 000 in a joint business venture with defendants for the purpose of manufacturing and selling a margarita product with plans of creating a company for this purpose going forward. (ECF No. 4).

         Plaintiffs allege that the defendants encouraged the plaintiffs to continue investing in the venture with assurances that the plaintiffs were considered partners and would reap a share in the profits from the sale of the product. However, plaintiffs allege that when the time to bottle the product drew near, defendants changed their position and indicated an intent to treat plaintiffs' investments as a simple loan and not share the profits. Plaintiffs allege that a distillery in Florida is ready to bottle the margarita product as soon as August 7, 2017, and that if this court allows the Florida distillery to release the bottled product to the defendants thereafter, the defendants will then sell the product and “take the money and run-perhaps even skip town ([defendant] Jack has no family in Las Vegas).” (ECF No. 4 at 2, 15-16). Plaintiffs allege that their investment is “tied up” in the margarita product and if this court “does not intervene, all will be lost, ” and “. . . the only major asset of the Partnership (the margarita product) would be gone.” Id. at 15. Further, plaintiffs allege that the defendants intend to “traffic liquor” in violation of Nevada liquor law. (ECF No. 4 at 16). Furthermore, plaintiffs allege that allowing the defendants to receive the margarita product after bottling would mean that third parties “would likely get access to the margarita product and related intellectual property and trade secrets rightfully owned by the Partnership” of which the plaintiffs purport to be a part. (ECF No. 4 at 15).

         Accordingly, in the present emergency motion, the plaintiffs request that this court enter a twelve-paragraph order detailing the required and proscribed conduct of the defendants going forward in relation to this margarita product venture, including among other things, that the defendants “shall not in any manner sell, grant, transfer . . . or otherwise encumber . . . any product or other property attributable with any interest to . . . any or all of the Defendants, any or all of the Plaintiffs, the Partnership Agreement, and/or a partnership between [the parties] currently located at Florida Distillers' facilities”; that “Defendants shall allow product to be bottled by Caribbean Distillers . . . (‘Florida Distillers') . . . but any and all [of this product] . . . must remain and be stored at the Florida Distillers' facilities pending further order of the Court”; that defendants deposit into a trust account or with the court any proceeds from the sale of the margarita product; and that defendants shall somehow “allow” plaintiffs to enter the premises and facilities of the Florida Distillers-a non-party to this action. (ECF No. 4 at 13-14). Further, plaintiffs request that this court appoint one of the plaintiffs, Sheldon Goldberg, as either a receiver or trustee of the business venture. Id. at 24-26.

         II. Legal Standard

         Under Federal Rule of Civil Procedure 65, a court may issue a temporary restraining order when the moving party provides specific facts showing that immediate and irreparable injury, loss, or damage will result before the adverse party's opposition to a motion for preliminary injunction can be heard. Fed.R.Civ.P. 65. “Injunctive relief is an extraordinary remedy and it will not be granted absent a showing of probable success on the merits and the possibility of irreparable injury should it not be granted.” Shelton v. Nat'l Collegiate Athletic Assoc., 539 F.2d 1197, 1199 (9th Cir. 1976).

         “The purpose of a temporary restraining order is to preserve the status quo before a preliminary injunction hearing may be held; its provisional remedial nature is designed merely to prevent irreparable loss of rights prior to judgment.” Estes v. Gaston, No. 2:12-cv-1853-JCM-VCF, 2012 WL 5839490, at *2 (D. Nev. Nov. 16, 2012); see also Sierra On-Line, Inc. v. Phoenix Software, Inc., 739 F.2d 1415, 1422 (9th Cir. 1984). This court must consider the following elements in determining whether to issue a temporary restraining order and preliminary injunction: (1) a likelihood of success on the merits; (2) likelihood of irreparable injury if preliminary relief is not granted; (3) balance of hardships; and (4) advancement of the public interest. Winter v. N.R.D.C., 555 U.S. 7, 20 (2008); Stanley v. Univ. of S. California, 13 F.3d 1313, 1319 (9th Cir. 1994); Fed.R.Civ.P. 65 (governing both temporary restraining orders and preliminary injunctions). The party seeking the injunction must satisfy each element.

         Additionally, post-Winter, the Ninth Circuit has maintained its serious-question and sliding-scale test. See Alliance for the Wild Rockies v. Cottrell, 632 F.3d 1127 (9th Cir. 2011). “Under this approach, the elements of the preliminary injunction test are balanced, so that a stronger showing of one element may offset a weaker showing of another.” Id. at 1131. “Serious questions going to the merits and a balance of hardships that tips sharply towards the plaintiff can support issuance of a preliminary injunction, so long as the plaintiff also shows that there is a likelihood of irreparable injury and that the injunction is in the public interest.” Id. at 1135 (internal quotations marks omitted).

         Finally, to obtain injunctive relief, plaintiffs must show themselves to be “under threat of suffering ‘injury in fact' that is concrete and particularized; the threat must be actual and imminent, not conjectural or hypothetical; it must be fairly traceable to the challenged action of the defendant; and it must be likely that a favorable judicial decision will prevent or redress the injury.” Ctr. for Food Safety v. Vilsack, 636 F.3d 1166, 1171 (9th Cir. 2011) (quoting Summers v. Earth Island Inst., 555 U.S. 488 (2009)).

         III. Discussion

         A. Irreparable injury

          Plaintiffs have not convinced this court that the injunctive relief requested would prevent ...


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