Opinion
No. C 01-0686 MJJ
February 26, 2001
ORDER DENYING EX PARTE APPLICATION TO VACATE TEMPORARY PROTECTIVE ORDER
I. INTRODUCTION
Before the Court is Defendant Cho Yang Shipping Company, Ltd. ("Cho Yang") ex parte application to vacate the temporary protective order which was issued by this Court on February 14, 2001, against Plaintiff Florens Container, Inc. ("Florens"), pursuant to California Code of Civil Procedure §§ 485.010-486.030. Having considered the matter, based on the reasons set for below, the Court finds that Cho Yang's due process rights were not violated, and that Florens met its burden of proving that Cho Yang is "insolvent" within the meaning of California Code of Civil Procedure § 486.010(b)(2). Therefore, the temporary protective order stands.
II. ANALYSIS
The applicable law governing ex parte applications are the Civil Local Rules for the Northern District of California. Civil Local Rule 7-10 provides:
Cho Yang asserts that the California Rules of Court provide the procedural rules for these ex parte proceedings. However, California Rule of Court 301 states that, "[t]he rules in this division apply to proceedings in civil law and motion. . . . in superior and municipal courts and to discovery proceedings in family law and probate." Therefore, Rule 379 is inapplicable to ex parte proceedings in federal court.
Unless otherwise ordered by the assigned Judge, a party may file an ex parte motion, that is, a motion filed without notice to opposing party, only if a statute, Federal Rule, local rule or Standing Order authorizes the filing of an ex parte motion in the circumstances and the party has complied with the applicable provisions allowing the party to approach the Court on an ex parte basis.
Admiralty Rule B and Rule 64 of the Federal Rules of Civil Procedure authorize Florens to use California attachment remedies to obtain prejudgement security. Section 485.010 and Section 486.030 of the California Code of Civil Procedure provide for the filing of ex parte applications for writ of attachment, or in the alternative, for a temporary restraining order upon the showing of great or irreparable injury. Federal local rules do not require notice for an ex parte application. Florens was not required to give Cho Yang advance notice of its application, therefore, Cho Yang was not deprived of its due process rights.
Cho Yang also claims that Federal Rule of Civil Procedure, Supplemental Rules for Certain Admiralty and Maritime Claims, Rule B provides for notice to the defendant of any attachment proceeding, and that Rule E(4)(f) provides for a hearing in the case of such attachment. First, these rules only apply to attachment and garnishment, not to protective orders. See Rule B(1), Rule E(4)(f). Second, notice to the defendant, informing him of the process of attachment, is only required when the court enters a judgment by default. See Rule B(2). Therefore, Rules B and E do not apply to the facts of this case. Florens was not required to give notice of the ex parte application and Cho Yang is not entitled to a hearing.
Florens satisfied all the statutory requirements in seeking a temporary protective order against Cho Yang. Cho Yang argues that it is not "insolvent," within the meaning of California Code of Civil Procedure § 485.010(b)(2), however, the record indicates that Cho Yang is not paying its debts to Florens as they become due. Cho Yang asserts that it made a payment, in the amount of $50,000, to Florens on January 12, 2001 and that it remitted $100,000 on February 19, 2001, after the temporary protective order was issued. Cho Yang also asserts that it has agreed to a payment plan on the remainder of its debt. (Meadows Decl., Ex. B.) However, Cho Yang has failed to comply with payment plans in the past (Meadows Decl., Ex. A) and Cho Yang has failed to pay $70,000 per-month for the lease of the containers for some time now. (Pyke Decl., ¶ 3.) The $100,000 payment was made only after the Court issued the temporary protective order. Based on the foregoing, the Court finds that Cho Yang has been unable to pay its debts to Florens as they become due and, therefore, is "insolvent" within the meaning of California Code of Civil Procedure § 485.010(b)(2).
Section 485.010(b)(2) states that the showing of irreparable harm will be satisfied if, "[u]nder the circumstances of the case, it may be inferred that the defendant has failed to pay the debt underlying the requested attachment and the defendant is insolvent in the sense that the defendant is generally not paying his or her debts as those debts become due, unless the debts are subject to a bona fide dispute."
IV. CONCLUSION
Florens satisfied all the statutory requirements in seeking a temporary protective order against Cho Yang. The Court properly issued the Temporary Protective Order, therefore, the Court's Order stands.