The opinion of the court was delivered by: Lechner, District Judge.
Currently before the court is the application of plaintiff
Driscoll Potatoes, Inc. ("Driscoll") for a preliminary
injunction pursuant to Fed.R.Civ.P. 65.*fn1 Driscoll seeks a
preliminary injunction directing defendants N.A. Produce, Inc.
("N.A. Produce") and Nestor Balocos, also known as Nestor
Baloco, ("Balocos") (collectively, "Defendants"), to comply
with the statutory trust provision of the Perishable
Agricultural Commodities Act ("PACA"), 7 U.S.C. § 499a, et seq.
Specifically, Driscoll seeks an order directing Defendants to
place in an interest-bearing account at a particular nationally
chartered banking institution the amount of $11,068.50. For the
reasons set forth below, Driscoll's application is denied.
Because no opposition has been received, the facts as alleged
by Driscoll are not disputed. Driscoll, located in Idaho, is a
dealer, broker and/or commission merchant of fresh potatoes.
Davis Affidavit at ¶ 2. N.A. Produce, located in New Jersey, is
a dealer, broker and/or commission merchant licensed under
PACA. Id. at ¶ 3. Balocos is an officer, director and
shareholder of N.A. Produce. Id. at ¶ 4.
On 18 January 1991, Driscoll sold N.A. Produce a wholesale
lot of potatoes, a perishable agricultural commodity, for the
price of $11,068.50. Id. at ¶ 5. This transaction, involving
interstate commerce, is apparently governed by certain
provisions of PACA, namely 7 U.S.C. § 499e(c).*fn2
Under PACA, a dealer, broker or commission merchant of
perishable agricultural commodities must hold all proceeds from
the sale of such commodities in trust for the unpaid suppliers
of the commodities. 7 U.S.C. § 499e(c)(2). The unpaid supplier
will be entitled to the benefit of the trust only if it
provides written notice of its intent to preserve the benefits
of the trust to the dealer, broker or commission merchant who
sold the commodities. Id. at § 499e(c)(3). Furthermore, the
notice of intent must be filed with the Secretary of
Agriculture. Id. Assuming the notice of intent has been
properly given and filed, PACA provides "[t]he several district
courts of the United States are vested with jurisdiction
specifically to entertain (i) actions by trust beneficiaries to
enforce payment from the trust, and (ii) actions by the
Secretary [of Agriculture] to prevent and restrain dissipation
of the trust." Id. at § 499e(c)(4).
Driscoll has not been paid for the potatoes sold to N.A.
Produce. Davis Affidavit at ¶ 9. Therefore, under PACA,
Defendants are required to hold any proceeds from the sale of
potatoes supplied by Driscoll in trust for Driscoll. On 27
February 1991, and pursuant to PACA, Driscoll filed a notice of
intent to preserve its rights in the trust with the Secretary
of Agriculture. Davis Affidavit at ¶ 7. On the same day,
Driscoll sent a copy of its notice of intent to Defendants. Id.
On 11 April 1991, Driscoll filed a complaint against
Defendants. By its complaint, Driscoll seeks to enforce the
trust provisions of PACA and to recover the $11,068.50 owed to
Driscoll for the potatoes sold to N.A. Produce. The summons and
complaint was served on 15 April 1991. No answer has yet been
On 19 April 1991, Driscoll filed a motion for a preliminary
injunction directing Defendants to place the price of the
potatoes in trust, pursuant to PACA. Driscoll believes
Defendants have been dissipating the assets of the trust.
Id. at ¶ 10. Driscoll also contends Defendants have been using
the proceeds from the sale of the potatoes to pay other
creditors and suppliers of N.A. Produce. Id. at ¶¶ 8 & 10. As
noted above, no opposition to this motion has been received.
To prevail on its application for a preliminary injunction,
the moving party must show:
(1) the probability of irreparable injury to the
moving party in the absence of relief; (2) the
possibility of harm to the nonmoving party if
relief were granted; (3) the likelihood of success
on the merits; and (4) the public interest [in
granting preliminary relief].
Alessi v. Pennsylvania, Dept. of Pub. Welfare, 893 F.2d 1444,
1447 (3d Cir. 1990); see Instant Air Freight Co. v. C.F. Air
Freight, Inc., 882 F.2d 797, 800 (3d Cir. 1989); Fechter v. HMW
Indus., Inc., 879 F.2d 1111, 1116 (3d Cir. 1989); CPC Int'l,
Inc. v. Caribe Food Distrib., 731 F. Supp. 660, 664 (D.N.J.
1990); Bascom Food Prod. Corp. v. Reese Finer Foods, Inc.,
715 F. Supp. 616, 624 (D.N.J. 1989). Significantly, a "grant of
injunctive relief is an extraordinary remedy which should ...