Inventory Generation Inc. v. Silverline Services Inc.

Background

The plaintiffs are Inventory Generation Inc., doing business as Coast to Coast Dispatch, and Earl David, individually and on behalf of similarly situated people. The complaint concerns several merchant cash advance agreements that the plaintiffs contend are actually usurious loans violating New York law.

The plaintiffs filed an emergency motion under Federal Rule of Civil Procedure 65, which governs temporary restraining orders and preliminary injunctions. They asked the court to stop MCA Receivables, LLC, doing business as United Fund USA, and Yisroel C. Getter—collectively, the “MCA defendants”—from issuing levies against their bank accounts. They also asked the court to stop TD Bank NA from enforcing or applying any levies issued by the MCA defendants, including levies involving the TD Bank account in Inventory Generation Inc.’s name ending in 6401 and the account in Earl David’s name ending in 1178.

Earlier Proceedings

On December 20, 2022, after finding that the defendants had been served and notified of the hearing, the court granted a temporary restraining order. It ordered TD Bank NA to immediately return money withdrawn from the two identified accounts as a result of a prejudgment levy by MCA Receivables, LLC, doing business as United Fund USA. The court later allowed the plaintiffs to serve the MCA defendants by certified mail because they had refused service through a process server.

At the January 3, 2023 hearing on the preliminary-injunction request, counsel appeared for the plaintiffs and for Silverline Services Inc. and Shmuel Brummell. No other defendants appeared, and no other defendants submitted papers opposing the motion. The court found that the MCA defendants had been properly served under the court’s prior orders.

Court’s Analysis

The court stated that a party seeking a preliminary injunction must show either a likelihood of success on the merits or sufficiently serious legal questions that warrant litigation combined with a strongly favorable balance of hardships. The party must also show likely irreparable harm without an injunction, a favorable balance of hardships, and that the public interest would not be harmed by the injunction.

Because the MCA defendants did not appear at the hearing or submit opposition papers, the court found that the plaintiffs had satisfied the requirements for a preliminary injunction. The opinion grants interim relief; it does not state that the court made a final determination whether the merchant cash advance agreements were usurious loans.

Ruling

The court converted the previously granted temporary restraining order into a preliminary injunction pending the determination and outcome of the case. It preliminarily enjoined MCA Receivables, LLC, doing business as United Fund USA, and Yisroel C. Getter from issuing levies against any of the plaintiffs’ bank accounts, including the two identified TD Bank accounts. It separately preliminarily enjoined TD Bank NA from enforcing or applying any levies issued by the MCA defendants against those accounts.