UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

____________________________________ ) STERLING COMMERCIAL ) CREDIT — MICHIGAN, LLC, ) ) Plaintiff, ) ) v. ) Civil Action No. 10-2332 (PLF) ) PHOENIX INDUSTRIES I, LLC d/b/a ) PHOENIX INDUSTRIES, LLC, et al., ) ) Defendants. ) ____________________________________)

OPINION

This matter is before the Court on plaintiff’s motion for a temporary restraining

order and preliminary injunction “with notice.” Plaintiff’s title notwithstanding, it is far from

clear whether any of the defendants have in fact received notice of this motion. Accordingly,

although no opposition has been filed, the Court does not treat plaintiff’s motion as unopposed.

Upon consideration of plaintiff’s arguments, the relevant legal authorities, and the entire record

in this case, the Court will deny plaintiff’s motion.1

1 The papers reviewed in connection with the pending motion include the following: plaintiff’s complaint (“Compl.”); the Factoring and Security Agreement (attached as Exhibit 1 to Compl.) (“Agreement”); the Letter from Dannette Wright to Michigan Commercial Credit, LLC, Nov. 8, 2010 (attached as Exhibit 2 to Compl.) (“Letter from Ms. Wright to MCC”); the Guaranty (attached as Exhibit 3 to Compl.) (“Guaranty”); the Bill of Sale (attached as Exhibit 4 to Compl.) (“Bill of Sale”); plaintiff’s emergency motion for a temporary restraining order and preliminary injunction, with notice (“Mot.”); the Affidavit of William Edwin Small in support of plaintiff’s Mot. (“Small Aff.”); Exhibits 1 through 4 to Small Aff. (the same four Exhibits as those attached to plaintiff’s Compl., but in a different order); and plaintiff’s Rule 65.1 certificate (“Rule 65.1 Certificate”). I. BACKGROUND

Plaintiff Sterling Commercial Credit — Michigan, LLC, “specializes in providing

businesses with asset-based lending solutions by purchasing credit-worthy accounts receivable.”

Small Aff. ¶ 3. In other words, plaintiff is in the business of “factoring.” See id. In this

commercial practice, a “factor” or factoring company — here, plaintiff — enters into a factoring

agreement with a business, whereby the factor “buys accounts receivable [from a business] at a

discount, the [business] obtains immediate operating cash, and the factor profits when the face

value of the account is collected.” 32 AM . JUR. 2D FACTORS AND COMMISSION MERCHANTS § 2

(2010); see, e.g., Staff, IT, Inc. v. United States,

(5th Cir. 2007). This case

arises from alleged breaches of a factoring agreement executed in 2008 and purportedly assigned

to plaintiff in 2010.

Defendant Phoenix Industries I, LLC (“Phoenix”) “provides building maintenance

and facility support services.” Compl. ¶ 13. On March 13, 2008, Phoenix entered into a

factoring agreement — the Agreement at issue here — with Michigan Commercial Credit, LLC

(“MCC”), another factoring company. See Agreement at 1; Small Aff. ¶ 4. In brief, the

Agreement provides that Phoenix will sell its accounts receivable to MCC and that Phoenix will

grant to MCC a security interest in other assets belonging to Phoenix. See Agreement §§ 2.1, 8;

Small Aff. ¶ 4. Phoenix’s president, defendant Dannette Wright, later entered into a Guaranty

with MCC, whereby Ms. Wright, in her individual capacity, guaranteed “all [of Phoenix’s]

present and future obligations” to MCC. See Guaranty §§ 1.7, 2.1; Small Aff. ¶¶ 20-22.

On November 20, 2008, MCC purportedly assigned all of its rights in this

Agreement and any guaranty agreement to Midstates Capital LLC (“Midstates”). See Small Aff.

2 ¶ 6. Subsequently, on August 24, 2010, Midstates purportedly assigned all of its rights in the

Agreement and any guaranty agreement to plaintiff. See id. ¶ 7. Thus, plaintiff asserts that, as of

August 24, 2010, “all contractual provisions at issue in this matter pertain to [plaintiff].” Id.

Pursuant to the Agreement, plaintiff alleges that Phoenix is currently indebted to

plaintiff in the amount of $908,009.64. Small Aff. ¶ 26. Plaintiff, however, “has received no

payments toward satisfaction of” this debt, and plaintiff contends that Phoenix and Ms. Wright

have failed to perform their duties under the Agreement and the Guaranty, respectively. See id.

¶¶ 30, 35, 38. Specifically, plaintiff alleges that Phoenix has violated the Agreement by

“wrongfully diverting accounts from which [plaintiff] is to receive payments.” Id. ¶ 24; see Mot.

at 3. And Ms. Wright has allegedly violated the Guaranty by failing to make any payments

toward satisfaction of Phoenix’s outstanding debt. Mot. at 4; see Small Aff. ¶¶ 20-22, 27-30.

Plaintiff alleges that Phoenix further violated the Agreement when, on October

30, 2010, Phoenix unilaterally, and without plaintiff’s consent, executed a Bill of Sale with

defendant United Concepts International LLC (“United”) and its president, defendant Melvin

Woodard. See Mot. at 5; Small. Aff. ¶¶ 13-19. Pursuant to the Bill of Sale, Phoenix sold its

accounts receivable and assets to United for $1.5 million. See Bill of Sale at 1. All of the cash

proceeds from this sale were to be paid by United to Phoenix on January 1, 2011. Bill of Sale at

1; see Small Aff. ¶ 32. Plaintiff contends that this sale violated the express terms of the

Agreement and again diverted accounts that were payable exclusively to plaintiff. See Small Aff.

¶¶ 13, 16. Plaintiff further contends that “all or part of the cash proceeds due under the Bill of

Sale may have been paid into an escrow account of an unknown third party and may be disbursed

to other third parties, including a relative of [Ms.] Wright.” Id. ¶ 33.

3 Accordingly, on December 30, 2010, plaintiff filed a complaint against Phoenix,

Ms. Wright, United, and Mr. Woodward. See generally Compl. Plaintiff sets forth six separate

claims in its complaint: (1) breach of contract against Phoenix; (2) breach of contract against Ms.

Wright; (3) common law conversion against all defendants; (4) statutory conversion against

Phoenix, United, and Ms. Wright; (5) temporary restraining order against all defendants; and

(6) preliminary injunction against all defendants. See generally id. On January 6, 2011, plaintiff

filed the pending motion for a temporary restraining order and preliminary injunction. See

generally Mot. Plaintiff requests, among other things, that the Court enjoin defendants from

collecting any further payments purportedly subject to the Agreement; enjoin defendants from

disposing of the cash proceeds and any other assets associated with the sale of Phoenix to United;

and order that all of the disputed money and assets be paid into the Court pending the final

disposition of this case on its merits. See id. at 10-11.

II. LEGAL STANDARD

A preliminary injunction is “‘an extraordinary remedy that should be granted only

when the party seeking the relief, by a clear showing, carries the burden of persuasion.’”

Chaplaincy of Full Gospel Churches v. England,

(D.C. Cir. 2006) (quoting

Cobell v. Norton,

(D.C. Cir. 2004)). To warrant preliminary injunctive relief,

a moving party must show: (1) that there is a substantial likelihood that it will succeed on the

merits of its claims; (2) that it will suffer irreparable harm in the absence of an injunction;

(3) that an injunction would not substantially harm the defendant or other interested parties

(balance of harms); and (4) that the public interest would be furthered, or at least not adversely

4 affected, by the injunction. See id.; Davis v. Pension Benefit Guar. Corp.,

(D.C. Cir. 2009); Serono Labs., Inc. v. Shalala,

(D.C. Cir. 1998). “The

same standard applies to both temporary restraining orders and to preliminary injunctions.” Hall

v. Johnson,

, 3 n.2 (D.D.C. 2009).

These four factors must be viewed as a continuum, with more of one factor

compensating for less of another. Davis v. Pension Benefit Guar. Corp.,

.

“If the arguments for one factor are particularly strong, an injunction may issue even if the

arguments in other areas are rather weak.” CityFed Fin. Corp. v. Office of Thrift Supervision,

, 747 (D.C. Cir. 1995). An injunction may be justified “where there is a particularly

strong likelihood of success on the merits even if there is a relatively slight showing of

irreparable injury.” Id. Conversely, when the other three factors strongly favor interim relief, a

court may grant injunctive relief when the moving party has merely made out a “substantial” case

on the merits. The necessary level or degree of likelihood of success that must be shown will

vary according to the Court’s assessment of the other factors. Washington Metro. Area Transit

Comm’n v. Holiday Tours, Inc.,

(D.C. Cir. 1977). An injunction may be

issued “with either a high probability of success and some injury, or vice versa.” Cuomo v. U.S.

Nuclear Regulatory Comm’n,

, 974 (D.C. Cir. 1985).

Despite this flexibility, however, “a movant must demonstrate ‘at least some

injury’ for a preliminary injunction to issue,” and “[a] . . . failure to show any irreparable harm”

constitutes grounds for denying the motion for a preliminary injunction, “even if the other three

5 factors entering the calculus merit such relief.” Chaplaincy of Full Gospel Churches v. England,

(quoting CityFed Fin. Corp. v. Office of Thrift Supervision, 58 F.3d at 747, and

citing Sea Containers Ltd. v. Stena AB,

(D.C. Cir. 1989)) (emphasis

added).

III. DISCUSSION

A. Notice to Defendants

Although the same substantive standard generally applies to both temporary

restraining orders and preliminary injunctions, see Hall v. Johnson,

n.2,

there is an important procedural distinction between the two: a temporary restraining order may

in some defined circumstances be issued without notice, whereas a preliminary injunction may

not. Compare FED . R. CIV . P. 65(b)(1) (“The court may issue a temporary restraining order

without written or oral notice to the adverse party or its attorney . . . .”), with FED . R. CIV . P.

65(a)(1) (“The court may issue a preliminary injunction only on notice to the adverse party.”)

(emphasis added); see also Laster v. District of Columbia,

(D.D.C.

2006) (“Because a preliminary injunction may be unlimited in duration, notice to adverse parties

is required.”). The Local Civil Rules of this Court are more stringent, requiring “proof

satisfactory to the court” of actual notice or efforts made to give such notice; an ex parte

application for a temporary restraining order will be considered only “in an emergency.” See

LOC. CIV . R. 65.1(a).

Plaintiff titles its motion as one “with notice.” Mot. at 1. Moreover, plaintiff

clearly states that it “gave Defendants notice prior to filing the subject Motion.”

at 1 n.1.

6 Plaintiff’s Rule 65.1 Certificate, however, paints a different picture. At best, plaintiff provided

notice by e-mail to Phoenix and by voicemail to United but even that is unclear. The Court

describes below plaintiff’s notification efforts with respect to each defendant, as stated in

plaintiff’s Rule 65.1 Certificate:

1. Phoenix — On January 5, 2011, plaintiff e-mailed its motion papers to

Phoenix. Rule 65.1 Certificate at 1. Plaintiff explains that the e-mail was “successful,” though it

is unclear to the Court what that actually means.

2. Ms. Wright — On January 5, 2011, plaintiff e-mailed its motion papers to Ms.

Wright. Rule 65.1 Certificate at 1. The e-mail, however, “was rejected.”

Thus, that same

day, plaintiff attempted to deliver its papers by courier to Ms. Wright at what was believed to be

her home address, as listed on the Guaranty, but this attempt at notice also failed: “The address

listed on the Guaranty did not designate a specific apartment number and the property manager

would not provide [Ms.] Wright’s apartment number or confirm whether she resides there.” Id.

at 1-2.

3. United — On January 5, 2011, plaintiff sent its motion papers via courier to

what was believed to be United’s business address but “was informed by a security guard that no

business by [United’s] name . . . has an office at that address.” Rule 65.1 Certificate at 2. That

same day and the following day, January 6, 2011, plaintiff’s counsel attempted to call what was

believed to be United’s business number but no one answered. See id. at 2. Plaintiff’s counsel

therefore left a message identifying plaintiff’s counsel and contact information. Id. Plaintiff did

not receive a response. Id.

7 4. Mr. Woodard — On January 6, 2011, plaintiff’s counsel attempted to call Mr.

Woodard on what was believed to be his cell phone but no one answered. See Rule 65.1

Certificate at 2. Because no voicemail was set up, plaintiff could not leave a message. Id.

As the court of appeals has explained, “[t]he purpose of Rule 65(a)(1)’s notice

requirement is to allow the opposing party a fair opportunity to oppose the preliminary injunction

. . . , and compliance is mandatory . . . .” United States v. Microsoft Corp.,

(D.C. Cir. 1998) (internal quotations and citations omitted) (emphasis added); see also Beierle v.

Zavares, Nos. 99-1383, 99-1530,

, at *6 (10th Cir. June 12, 2000)

(“Compliance with this notice requirement [pursuant to Rule 65(a)(1)] is mandatory, and the rule

has constitutional as well as procedural dimensions.”). This notice requirement “reflect[s] the

fact that our entire jurisprudence runs counter to the notion of court action taken before

reasonable notice and an opportunity to be heard has been granted both sides of a dispute.”

Granny Goose Foods, Inc. v. Bhd. of Teamsters & Auto Truck Drivers,

(1974). Thus, “[p]reliminary injunctions entered without notice to the opposing party are

generally dissolved.” United States v. Microsoft Corp.,

.

Upon review of plaintiff’s Rule 65.1 Certificate, the Court cannot be certain that

any of the defendants have in fact been provided with notice of the pending motion. On the

contrary, what is clear to the Court is that neither Ms. Wright nor Mr. Woodard has been

provided with such notice. Although plaintiff concludes that it “has taken all reasonable steps to

notify all Defendants,” see Rule 65.1 Certificate at 2, the Court disagrees. The Court finds

plaintiff’s efforts — taken over the span of only two days and, in the case of Mr. Woodard,

amounting to one unanswered phone call — rather minimal.

8 The Court’s conclusion on the matter of notice is, by itself, sufficient to deny

plaintiff’s request for a preliminary injunction, FED . R. CIV . P. 65(a)(1), as well as — under the

Local Rules — to deny plaintiff’s request for a temporary restraining order. See LOC. CIV . R.

65.1(a). Nevertheless, the Court will turn to the merits of plaintiff’s motion.

B. Irreparable Harm

The court of appeals “has set a high standard for irreparable injury.” Chaplaincy

of Full Gospel Churches v. England,

. This factor thus “erects a very high bar for

a movant.” Coalition for Common Sense in Gov’t Procurement v. United States,

(D.D.C. 2008). To make the required showing of irreparable harm, a moving party

must establish that its injury satisfies a two-part test. See Chaplaincy of Full Gospel Churches v.

England,

.

“First, the injury ‘must be both certain and great; it must be actual and not

theoretical.’” Chaplaincy of Full Gospel Churches v. England,

(quoting

Wisconsin Gas Co. v. FERC,

, 674 (D.C. Cir. 1985)). Thus, “[t]he moving party

must show ‘[t]he injury complained of is of such imminence that there is a ‘clear and present’

need for equitable relief to prevent irreparable harm.’” Id. (quoting Wisconsin Gas Co. v. FERC,

758 F.2d at 674) (emphasis in original); see Coalition for Common Sense in Gov’t Procurement

v. United States,

(“[T]he alleged injury must be certain, great, actual, and

imminent.”). “Bare allegations of what is likely to occur are of no value since the court must

decide whether the harm will in fact occur.” Wisconsin Gas Co. v. FERC, 758 F.2d at 674

(emphasis in original); see TD Int’l, LLC v. Fleischmann & Tertium Datur Int’l, LLC,

9 Supp. 2d 46, 48 (D.D.C. 2009) (“Injunctive relief ‘will not be granted against something merely

feared as liable to occur at some indefinite time.’”) (quoting Wisconsin Gas Co. v. FERC, 758

F.2d at 674)). Instead, “[t]he movant must provide proof that the harm has occurred in the past

and is likely to occur again, or proof indicating that the harm is certain to occur in the near

future.” Wisconsin Gas Co. v. FERC, 758 F.2d at 674. Moreover, “the movant must show that

the alleged harm will directly result from the action which the movant seeks to enjoin.” Id.

“Second, the injury must be beyond remediation.” Chaplaincy of Full Gospel

Churches v. England,

. Thus, “‘[t]he possibility that adequate compensatory or

other corrective relief will be available at a later date, in the ordinary course of litigation weighs

heavily against a claim of irreparable harm.’”

at 297-98 (quoting Wisconsin Gas Co. v.

FERC, 758 F.2d at 674). The Court finds that plaintiff has failed to demonstrate that, in the

absence of injunctive relief, it will suffer irreparable harm for which there is no adequate remedy

at law.

1. Plaintiff’s Economic Harm Argument

Plaintiff contends:

Defendant Phoenix is currently indebted to [plaintiff] in the amount of $908,009.64 . . . . All Defendants have converted assets owned by [plaintiff] and monies owed to it, and the Sales Proceeds have and/or may be distributed to third parties other than [plaintiff]. Once the cash proceeds are gone, that source of money will be extinguished and [plaintiff’s] rights will be hindered further.

Mot. at 6. In sum, plaintiff alleges economic harm in the amount of $908,009.64. But the

“general rule [is] that economic harm does not constitute irreparable injury.” Davis v. Pension

10 Benefit Guar. Corp.,

; see Wisconsin Gas Co. v. FERC, 758 F.2d at 674 (“It is

. . . well settled that economic loss does not, in and of itself, constitute irreparable harm.”). As

the court of appeals has stated:

The key word in this consideration is irreparable. Mere injuries, however substantial, in terms of money, time and energy necessarily expended in the absence of a stay are not enough. The possibility that adequate compensatory or other corrective relief will be available at a later date, in the ordinary course of litigation weighs heavily against a claim of irreparable harm.

Chaplaincy of Full Gospel Churches v. England,

-98 (quoting Wisconsin Gas Co.

v. FERC, 758 F.2d at 674) (emphasis in original). Although there appear to be two exceptions to

this general rule, plaintiff has failed to establish that either applies.

First, economic harm may qualify as irreparable where a plaintiff establishes that

the harm “is so severe as to cause extreme hardship to the business or threaten its very

existence.” Coalition for Common Sense in Gov’t Procurement v. United States,

(internal quotations omitted); see Toxco Inc. v. Chu,

(D.D.C.

2010); TD Int’l, LLC v. Fleischmann & Tertium Datur Int’l, LLC, 639 F. Supp. 2d at 48. The

critical consideration under this exception is the effect that the purported economic harm will

have on a movant’s business or its very existence — not any monetary amount per se. Plaintiff

plainly does not allege that it will sustain a harm of this nature. Indeed, plaintiff provides no

information whatsoever as to what effect, if any, this purported economic harm will have on its

business. See TD Int’l, LLC v. Fleischmann & Tertium Datur Int’l, LLC, 639 F. Supp. 2d at

48-49, 49 n.3 (holding that plaintiff failed to establish irreparable harm because, even assuming

plaintiff’s alleged economic loss of over one million dollars in damages were true, “[t]his alleged

11 loss . . . [was] never placed in the context of the financial condition of [plaintiff’s] business”);

see also Isong v. Apex Petroleum Corp.,

(D.D.C. 2002) (“The only harm

plaintiff alleges he will suffer is the loss of $95,000, which he can recover when and if he

establishes that there was a valid contract . . . between the parties and it was breached by the

defendant.”).

Second, courts have also held, under some circumstances, that economic harm

may qualify as irreparable “where a plaintiff’s alleged damages are unrecoverable.” Clarke v.

Office of Fed. Hous. Enter.,

(D.D.C. 2004); see Bracco Diagnostics, Inc.

v. Shalala,

(D.D.C. 1997) (“While the injury to plaintiffs is admittedly

economic, there is no adequate compensatory or other corrective relief that can be provided at a

later date, tipping the balance in favor of injunctive relief.”) (internal quotations and citation

omitted). Even unrecoverable losses, however, must have a “serious” effect on a plaintiff in

order to be considered irreparable for purposes of a preliminary injunction. See Toxco Inc. v.

Chu,

; Mylan Pharms., Inc. v. Shalala,

(D.D.C. 2000)

(“Because [plaintiff] is alleging a non-recoverable monetary loss, it must demonstrate that the

injury [is] more than simply irretrievable; it must also be serious in terms of its effect on the

plaintiff.”) (internal quotations and citation omitted). Compare LG Elecs., USA, Inc. v. Dep’t of

Energy,

(D.D.C. 2010) (“Even assuming [the plaintiff] will not be able

to recover monetary damages from [defendant] . . . the financial impact [plaintiff] claims it will

suffer does not rise to the level of irreparable harm” because that impact represents only “a

minuscule portion of the company’s worldwide revenues . . . .”); Sandoz, Inc. v. FDA,

(D.D.C. 2006) (“A loss of less than 1 percent total sales” — in that case,

12 amounting to nearly $31 million — “is not irreparable harm . . . nor would it threaten the

company’s very existence.”) (internal quotations and citation omitted).

Perhaps in an attempt to invoke this exception, plaintiff states:

If Phoenix, Wright, United and Woodard are not ordered to refrain from releasing the funds at issue to any party other than [plaintiff], and from continuing to divert funds owed to [plaintiff] from its accounts under the . . . Agreement, [plaintiff] will be irreparably harmed because, among other things, Phoenix has sold all of its assets and will likely not remain in business and the funds may be disbursed outside of the District of Columbia and may become unable to be recovered.

Small Aff. ¶ 38 (emphasis added). Plaintiff’s “[b]are allegations of what is likely to occur,”

couched as they are here in mere possibilities, however, “are of no value since the court must

decide whether the harm will in fact occur.” Wisconsin Gas Co. v. FERC, 758 F.2d at 674

(emphasis in original). Moreover, plaintiff has not demonstrated that the harm would be serious

in terms of its effect on the plaintiff’s business or its existence. See Toxco Inc v. Chu,

; Mylan Pharms., Inc. v. Shalala,

. As discussed, plaintiff has

provided no information as to what effect the purported economic harm will have on its business.

Thus, plaintiff has provided no reason for this Court to depart from the established rule “that

economic harm does not constitute irreparable injury.” See Davis v. Pension Benefit Guar.

Corp.,

.

2. Plaintiff’s Multiplicity of Suits Argument

Plaintiff presents a second irreparable harm argument. Plaintiff contends that it

will suffer irreparable harm because it may be forced to pursue a “multiplicity of suits” to recover

damages. See Mot. at 7. Plaintiff states: “The effect of Defendants’ continued wrongful

13 diversion of accounts and proceeds that belong to [plaintiff] under the . . . Agreement is

subjecting all account debtors from which payments are made to become subject to further

lawsuits . . . .”

Relying on the Delaware Uniform Commercial Code, plaintiff asserts that “in

each and every instance that one or more of the Defendants’ actions cause account debtor

payments to be misappropriated and misdirected to their dominion, control and use; each account

debtor becomes exposed to litigation . . . .”

(citing DEL. CODE ANN . tit. 6, § 9-406(a)).2 Thus,

plaintiff concludes, because “[t]he law provides that a party may seek equitable relief if a

multiplicity of suits will otherwise result,” injunctive relief is warranted here. Id. (citing

Oppenheimer v. Philadelphia, Baltimore, & Washington R.R. Co.,

(D.C. Cir.

1912)).

The one case that plaintiff cites for this proposition, Oppenheimer, simply noted

that “[a court of equity] will . . . give its aid to prevent oppressive or interminable litigation, or a

multiplicity of suits, or where the injury is of such nature that it cannot be adequately

compensated by damages at law . . . .” Oppenheimer v. Philadelphia, Baltimore, & Washington

R.R. Co.,

(quoting Parker v. Winnipiseogee Lake Cotton and Woolen Co.,

(1862)) (alteration in original). Plaintiff has not cited any case

holding that a movant established irreparable harm for purposes of a temporary restraining order

2 Plaintiff asserts that, because the District of Columbia’s choice of law rules “provide that the law governing perfection and priority of security interests is the law where Phoenix is registered,” Delaware’s Uniform Commercial Code applies to this case. See Mot. at 1 n.1.

14 or preliminary injunction simply by showing that it would be required to pursue a multiplicity of

suits to gain relief.3

The problem with plaintiff’s argument is that plaintiff again provides no more

than “[b]are allegations of what is likely to occur.” Wisconsin Gas Co. v. FERC, 758 F.2d at

674. As discussed “[t]he movant must provide proof that the harm has occurred in the past and is

likely to occur again, or proof indicating that the harm is certain to occur in the near future.” Id.

Here, plaintiff has simply asserted a “likelihood of protracted or multiple lawsuits” sometime in

the future, see Mot. at 7 (emphasis added), without any discussion of how many accounts may

have been wrongfully diverted or how many parties may be subject to liability. These bare

allegations, without more, do not establish an injury that is “certain, great, actual, and imminent,”

for which legal remedies are inadequate. See Coalition for Common Sense in Gov’t

Procurement v. United States,

.

The Court therefore concludes that plaintiff has failed to show any irreparable

harm. The economic harm that plaintiff alleges — indebtedness in the amount of $908,009.64 —

can be recovered “when and if [plaintiff] establishes that there was a valid contract . . . between

the parties and it was breached by the defendant[s].” Isong v. Apex Petroleum Corp.,

. Because “[a] . . . failure to show any irreparable harm” constitutes grounds for

denying plaintiff’s motion, “even if the other three factors entering the calculus merit such

relief,” Chaplaincy of Full Gospel Churches v. England,

(citing Sea Containers

3 On its own review of the case law, the Court has found some limited support for this proposition. See Lynch Corp. v. Omaha Nat’l bank,

(8th Cir. 1981); Ashland Oil, Inc. v. Gleave,

(W.D.N.Y. 1982).

15 Ltd. v. Stena AB,

) (emphasis added), the Court finds that plaintiff is not

entitled to injunctive relief.

C. The Merits

Absent any showing of irreparable harm, the Court need not address the remaining

factors. See Chaplaincy of Full Gospel Churches v. England,

. The Court,

however, briefly discusses one issue regarding the merits. Plaintiff contends that it “is not only

likely to but will most definitely succeed on the merits . . . .” Mot. at 9. Plaintiff’s argument on

this point is essentially that defendants have clearly breached their contractual obligations,

whereas plaintiff has honored all of its obligations. See

The first element of a breach of

contract claim, however, is “a valid contract between the parties.” See, e.g., Edmond v. Am.

Educ. Servs., Civil Action No. 10-0578,

, at *2 (D.D.C. Oct. 28, 2010). Apart

from the affidavit in support of plaintiff’s motion, the Court has found nothing in the record

actually linking plaintiff to the two contracts at issue in this case.

The Agreement is between Phoenix and MCC. See Agreement at 1. The

Guaranty is between Ms. Wright and MCC. See Guaranty at 1. Plaintiff states that, by

assignment — first, from MCC to Midstates; then, from Midstates to plaintiff — “all contractual

provisions at issue in this matter pertain to [it].” Small Aff. ¶ 7. Neither of the two assignment

documents, however, are in the record. Plaintiff further states that “Sterling [i.e., plaintiff]

received a letter dated November 8, 2010 from [Ms.] Wright, on behalf of Phoenix, in which

[Ms.] Wright represented that any outstanding debts to Sterling would be paid in full.” Small

Aff. ¶ 27 (emphasis added). But this letter is neither addressed to plaintiff nor does it mention

16 plaintiff — like the Agreement and the Guaranty, it is addressed to MCC. See Letter from Ms.

Wright to MCC, Nov. 8, 2010. Thus, even if plaintiff had established irreparable harm, plaintiff

would not be entitled to injunctive relief on the record now before the Court. Although the Court

has no basis at this stage in the litigation to doubt the veracity of plaintiff’s statements regarding

the assignments, it is plaintiff’s burden to establish “by a clear showing” that it is entitled to

injunctive relief. See Chaplaincy of Full Gospel Churches v. England,

(internal

quotations and citation omitted). Without showing that it is in fact a party to the contracts at

issue, plaintiff cannot come close to establishing that there is a substantial likelihood that it will

succeed on the merits of its claims.

IV. CONCLUSION

For the foregoing reasons, plaintiff’s motion for a temporary restraining order and

preliminary injunction [Dkt. Nos. 3 and 4] will be DENIED. An Order consistent with this

Opinion shall issue this same day.

SO ORDERED.

/s/ PAUL L. FRIEDMAN DATE: January 28, 2011 United States District Judge

17