A federal judge recently issued an order to deny San Diego-based Arctic Zero Inc., makers of lactose and gluten free frozen desserts, their motion for a preliminary injunction and order against the now defunct cookie dough manufacturer Aspen Hill that closed due to a Listeria outbreak.
“As a whole, this case is unpersuasive,” U.S. District Judge Anthony Battaglia of the U.S. District Court
for the Southern District of California stated in his April 30 ruling.
Arctic Zero filed a complaint against Aspen Hill in March and April of 2017, alleging “negligence; (2) express indemnity; (3) breach of contract; (4) declaratory relief only as to Aspen Hills; and (5) fraudulent transfers," claiming that the Lundeens, the owners of Aspen Hills, transferred over $1 million to their personal bank account, leaving the company insolvent. Aspen Hills supplied Arctic Zero, as well as other companies and fundraisers, with cookie dough and other products, the suit said.
In 2016, Aspen Hills voluntarily recalled “287 cases of allegedly negligently manufactured brownie dough,” court documents said. The former company is currently in a receivership case in Iowa due to the more than 11 million claims against them and their limited assets.
Arctic claimed that the proceedings in Iowa will “threaten this court’s litigation,” but Battaglia dismissed the argument, stating that this argument is based on what the Iowa court might do and is too speculative. “An order from this court asking the Lundeens to withdraw their contempt application and a preliminary declaration that states that plaintiff can proceed with this action is premature and an improper application of the All Writs Act,” he said. “The court finds that there is doubt as to the propriety of a federal injunction against a state court proceeding and such doubts should be resolved in favor of permitting the state courts to proceed in an orderly fashion to finally determine the controversy.”
Arctic also claimed that if the court does not enter for a preliminary injunction, they will “suffer irreparable harm ... and that an injunction is in the public interest,” noting in their complaint that Arctic should not have to appear in the Iowa courts.
Battaglia stated that “simply being asked to appear in Iowa isn’t irreparable harm,” and that Arctic “has not demonstrated that it is likely to succeed on the merits or that it would suffer irreparable harm if the injunction is not issued”.
The motions for preliminary injunction, to show cause, and declaratory relief was denied without prejudice.
U.S. District Court for the Southern District of California, Case Number 3:17-cv-00459-AJB-JM