Daybreak Game Company LLC v. Takahashi

• Court: District Court, S.D. California
• Decided: June 18, 2025
• Docket: 3:25-cv-01489
• Status: Unknown

Opinion

l 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 |} DAYBREAK GAME COMPANY LLC, Case No. 25-cv-01489-BAS-BLM 12 Plaintiff, ORDER: 13 V. 14 |} KRISTOPHER TAKAHASHI, et al., (1) DENYING PLAINTIFF’S EX PARTE MOTION TO SEAL; 15 Defendants. AND 16 17 (2) DENYING PLAINTIFF’S EX 18 PARTE APPLICATION FOR TEMPORARY RESTRAINING 19 ORDER 20 21 22 Presently before the Court is Plaintiff Daybreak Game Company LLC’s 23 (“Daybreak”) Ex Parte Application for Temporary Restraining Order (“TRO”) and Order 24 Show Cause for a Preliminary Injunction, Motion for Expedited Discovery, and Motion 25 ||for Alternative Service (“TRO Application” or “TRO App.”). Daybreak initiated this 26 action by filing under seal the Complaint (““Compl.”), TRO Application, and Ex Parte 27 Motion for Leave to Exceed Page Limits, along with a Motion to Seal (“Mot.”), which was 28 filed ex parte. Having carefully considered Plaintiff's arguments, filings, and the law,

1 ||the Court DENIES Plaintiff's Motion to Seal and DENIES WITHOUT PREJUDICE 2 || Plaintiff's TRO Application. 3 BACKGROUND 4 Per the Complaint, Daybreak owns the intellectual property to EverQuest, including 5 ||trademarks and copyrights associated with the EverQuest franchise. (Compl. § 3.) 6 || EverQuest is a “massively multiplayer online role-playing game” that has achieved a 7 ||measure of commercial success. Ud. § 11.) Daybreak alleges that Defendants Kristopher 8 || Takahashi and Alexander Taylor, as well as yet to be identified Defendants Does 1-20, 9 ||collaborate to “create, develop, distribute, and promote an unauthorized and illegal 10 EverQuest emulator called ‘The Heroes’ Journey’” (“THJ’). (Ud. § 4.) Defendants 11 Takahashi and Taylor are the respective lead producer and developer of THJ and play 12 primary roles in promoting it through interviews and communications in online forums 13 |}such as Discord. (Ud. § 4(a)-(b)). By operating the emulator, Daybreak alleges that 14 || Defendants engage in “systematic and deliberate copyright and trademark infringement.” 15 □ 30.) 16 Daybreak filed this action on June 11, 2025, asserting, among other causes of action, 17 ||copyright infringement, violation of the Digital Millennium Copyright Act, trademark 18 || dilution under federal and California law, unfair competition under federal and California 19 and breach of contract. See generally Compl. Daybreak alleges that Defendants are 20 ||causing immediate and irreparable harm by infringing on its intellectual property. (TRO 21 || App. at 2:8-11.) As such, Daybreak seeks to file ‘tall documents in support of this action 22 ||temporarily under seal [] in light of Defendants’ infringing actions... .” (Mot. at 4:4—5.) 23 || Daybreak contends that “if Defendants learn of Daybreak’s TRO Application, they will 24 likely destroy relevant documentary evidence and hide or transfer assets to foreign 25 || jurisdictions, which would frustrate the purpose of the underlying federal laws and interfere 26 || with this Court’s power to grant relief if Daybreak ultimately prevails.” (qd. at 4:9-12.) 27 || None of the documents associated with this action were previously filed on the docket, and 28 || Defendants have not received notice or had an opportunity to oppose.

l MOTION TO SEAL 2 Legal Standard 3 “(T]he courts of this country recognize a general right to inspect and copy public 4 |/records and documents, including judicial records and documents.” Nixon v. Warner 5 ||Commce’ns, Inc., 435 U.S. 589, 597 (1978). “Unless a particular court record is one 6 || ‘traditionally kept secret,’ a ‘strong presumption in favor of access’ is the starting point.” 7 || Kamakana vy. City & Cty. of Honolulu, 447 F.3d 1172, 1178 (9th Cir. 2006) (citing Foltz v. 8 || State Farm Mut. Auto Ins. Co., 331 F.3d 1122, 1135 (9th Cir. 2003)). “The presumption 9 access is ‘based on the need for federal courts, although independent—indeed, 10 || particularly because they are independent—to have a measure of accountability and for the 11 || public to have confidence in the administration of justice.’” Ctr. for Auto Safety v. Chrysler 12 || Grp., LLC, 809 F.3d 1092, 1096 (9th Cir. 2016) (quoting United States v. Amodeo, 71 F.3d 13 || 1044, 1048 (2d Cir. 1995)). 14 A party seeking to seal a judicial record bears the burden of overcoming the strong 15 || presumption of access. Foltz, 331 F.3d at 1135. The showing required to meet this burden 16 ||depends upon whether the documents to be sealed relate to a motion that is “more than 17 tangentially related to the merits of the case.” Ctr. for Auto Safety, 809 F.3d at 1102. When 18 underlying motion is more than tangentially related to the merits, the “compelling 19 ||reasons” standard applies. Jd. at 1096-98. When the underlying motion does not surpass 20 || the tangential relevance threshold, the “good cause” standard applies. Jd. 21 “In general, ‘compelling reasons’ sufficient to outweigh the public’s interest in 22 || disclosure and justify sealing court records exist when such ‘court files might have become 23 ||a vehicle for improper purposes,’ such as the use of records to gratify private spite, promote 24 || public scandal, circulate libelous statements, or release trade secrets.” Kamakana, 447 25 || F.3d at 1179 (quoting Nixon, 435 U.S. at 598). “Under this stringent standard, a court may 26 || seal records only when it finds ‘a compelling reason and articulate[s] the factual basis for 27 ruling, without relying on hypothesis or conjecture.’” Ctr. for Auto Safety, 809 F.3d at 28 || 1096-97 (quoting Kamakana, 447 F.3d at 1179). Ultimately, the decision to seal

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1 || documents is “one best left to the sound discretion of the trial court” upon consideration of 2 || “the relevant facts and circumstances of the particular case.” Nixon, 435 U.S. at 599. 3 In addition, parties moving to seal documents must comply with the procedures set 4 || forth in this Court’s standing order for filing documents under seal. See Standing Order of 5 ||the Hon. Cynthia Bashant for Civil Cases § 5. The rule permits sealing “only those 6 || documents, or portions thereof, necessary to protect such sensitive information.” /d. Thus, 7 || although sometimes it may be appropriate to seal a document in its entirety, whenever 8 || possible a party must redact. See Kamakana, 447 F.3d at 1183 (noting a preference for 9 redactions so long as they “have the virtue of being limited and clear”); Murphy v. Kavo 10 || Am. Corp., No. 11—cv—00410-YGR, 2012 WL 1497489, at *2—3 (N.D. Cal. Apr. 27, 2012) 11 ||(denying motion to seal exhibits but directing parties to redact confidential information). 12 ||II. Analysis 13 Daybreak moves to temporarily seal this case in its entirety, asserting that sealing is 14 necessary “to prevent Defendants from learning of the proceedings prior to the service of 15 execution of any temporary restraining order.” (Mot. at 10:9-11.) Accordingly, 16 || Daybreak requests that the Court seal the Complaint, the TRO Application, the Ex Parte 17 || Motion for Leave to Exceed Page Limits, and the Motion to Seal. 18 As an initial matter, the Court notes that both the Complaint and the TRO 19 || Application are more than tangentially related to the merits of this case. “A complaint is 20 ||the document delineating what the merits of the case are.” Innovativ Media Grp., Inc. v. 21 || Beys, No. 2:22-cv-01362-CDS-VCF, 2022 WL 3701579, at *3 (D. Nev. Aug. 26, 2022). 22 ||And “[p]articularly relevant here, a motion for [temporary restraining order] frequently 23 ||requires the court to address the merits of a case, which often includes the presentation of 24 substantial evidence.” Ctr. for Auto Safety, 809 F.3d at 1099 (citing Stormans v. Selecky, 25 ||586 F.3d 1109, 1127 (9th Cir. 2009)). Thus, the “compelling reasons” standard applies. 26 Here, Daybreak’s assertions that Defendants “likely will destroy relevant 27 documentary evidence and hide or transfer assets to foreign jurisdictions,” (Mot. at 4:9- 28 || 10), are too speculative to overcome the strong presumption in favor of public access to

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1 judicial records. Absent concrete factual support, the Court would be required to “rely[] 2 ||on hypothesis or conjecture” to justify sealing the Complaint and TRO Application tn this 3 |;action. Kamakana, 447 F.3d at 1179. In support of its sealing request, Daybreak cites 4 || declarations from Nicholas B. Janda, counsel of record, and David Youssefi, Senior Vice 5 || President and General Counsel at Daybreak; however, these declarations merely reiterate 6 ||the same conclusory assertions without providing specific, substantiated facts. (Janda 7 || Decl. § 2; Youssefi Decl. {§| 4-5.) Daybreak also cites the TRO Application itself, but it 8 likewise offers nothing more than speculative predictions regarding Defendants’ 9 || hypothetical conduct if provided notice. (See generally TRO App.) 10 Moreover, Daybreak filed the Ex Parte Motion for Leave to Exceed Page Limits and 11 Motion to Seal under seal. Because these are non-dispositive, procedural motions that 12 not bear on the merits of the underlying claims, they fall below the threshold of “more 13 || than tangentially related to the merits of the case.” Ctr. for Auto Safety, 809 F.3d at 1102. 14 || Accordingly, the good cause standard governs whether they may be sealed and requires a 15 ||“particularized showing” that “specific prejudice or harm will result” if the information is 16 ||disclosed. Phillips v. Gen. Motors Corp., 307 F.3d 1206, 1210-11 (9th Cir. 2002); see 17 R. Civ. P. 26(c). “Broad allegations of harm, unsubstantiated by specific examples or 18 || articulated reasoning” will not suffice. Beckman Indus., Inc. v. Int’l Ins. Co., 966 F.2d 470, 19 (9th Cir. 1992). 20 Since Daybreak relies on the same assertions to justify its request to seal the entire 21 ||action—namely, generalized concerns that Defendants may destroy evidence or transfer 22 assets if made aware of the proceeding—it offers no separate or independent justification 23 || for sealing the Ex Parte Motion for Leave to Exceed Page Limits or the Motion to Seal. As 24 || discussed above, these assertions lack concrete factual support and are too conclusory to 25 satisfy the “compelling reasons” standard. They likewise fail to satisfy the less stringent 26 || good cause standard applicable here, as they do not provide a particularized showing of 27 || specific harm or prejudice that would result from public disclosure of the materials sought 28 || to be sealed.

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1 Because Daybreak has not demonstrated compelling reasons to justify sealing the 2 || Complaint and TRO Application, and has likewise failed to show good cause for sealing 3 ||the Ex Parte Motion for Leave to Exceed Page Limits and Motion to Seal, the Court 4 || DENIES the Motion to Seal in its entirety. 5 TEMPORARY RESTRAINING ORDER APPLICATION 6 || I. Legal Standard 7 Rule 65(b) governs the issuance of a temporary restraining order (“TRO”). The 8 standard for a TRO is identical to the standard for a preliminary injunction. See Stuhlbarg 9 || Sales Co. v. John D. Brush & Co., 240 F.3d 832, 839 n.7 (9th Cir. 2001). To obtain 10 |/either a TRO or a preliminary injunction, the moving party must show: (1) a likelihood of 11 ||success on the merits; (2) a likelihood of irreparable harm to the moving party in the 12 ||absence of preliminary relief; (3) that the balance of equities tips in favor of the moving 13 || party; and (4) that an injunction is in the public interest. Winter v. Nat. Res. Def: Council, 14 || Inc., 555 U.S. 7, 20 (2008). Alternatively, the Ninth Circuit “has adopted and applied a 15 || version of the sliding scale approach under which a preliminary injunction could issue 16 || where the likelihood of success is such that serious questions going to the merits were 17 ||raised and the balance of hardships tips sharply in [plaintiff's] favor.” A//. for the Wild 18 || Rockies v. Cottrell, 632 F.3d 1127, 1131 (9th Cir. 2011) (cleaned up). In either case, the 19 ||moving party has the burden of persuasion. Hill v. McDonough, 547 U.S. 573, 584 (2006). 20 Generally, a TRO is considered to be “an extraordinary remedy that may only be 21 ||}awarded upon a clear showing that the plaintiff entitled to such relief.” Winter, 555 U.S. 22 22. A TRO’s “underlying purpose [is to] preserve] the status quo and prevent[] 23 |/irreparable harm” until a preliminary injunction hearing can be held. See Granny Goose 24 || Foods, Inc. v. Bhd. Of Teamsters & Auto Truck Drivers, 415 U.S. 423, 439 (1974). 25 ||Furthermore, when a plaintiff seeks a TRO without providing notice to the defendant, 26 || Federal Rule of Civil Procedure 65(b)(1) imposes additional requirements, specifically: 27 28

1 The court may issue a temporary restraining order without written or oral notice to the adverse party or its attorney only if: (A) specific facts in an affidavit or a verified complaint clearly show that immediate and irreparable 3 injury, loss, or damage will result to the movant before the adverse party can 4 be heard in opposition; and (B) the movant’s attorney certifies in writing any efforts made to give notice and the reasons why it should not be required. 5 6 R. Civ. P. 65(b)(1). “The stringent restrictions imposed . . . by Rule 65[] on the 7 availability of ex parte temporary restraining orders reflect the fact that our entire 8 || jurisprudence runs counter to the notion of court action taken before reasonable notice and 9 || an opportunity to be heard has been granted both sides of a dispute.” Granny Goose Foods, 10 U.S. 438-39 (footnote omitted). 11 “Courts have [thus] recognized very few circumstances justifying the issuance of an 12 parte TRO.” Reno Air Racing Ass’n v. McCord, 452 F.3d 1126, 1131 (9th Cir. 2006). 13 example, an ex parte TRO may be appropriate ‘where notice to the adverse party is 14 impossible either because the identity of the adverse party is unknown or because a known 15 party cannot be located in time for a hearing.’” Jd. (quoting Am. Can Co. v. Mansukhani, 16 F.2d 314, 322 (7th Cir. 1984)). Alternatively, “[i]n cases where notice could have 17 ||been given to the adverse party, courts have recognized ‘a very narrow band of cases in 18 || which ex parte orders are proper because notice to the defendant would render fruitless the 19 || further prosecution of the action.’” /d. (quoting Am. Can Co., 742 F.2d at 322). Generally 20 ||speaking, this “narrow band” includes only situations wherein an ex parte order is 21 ||necessary “to preserve evidence or the court’s jurisdiction.” Am. Can Co., 742 F.2d at 323 22 |/n.11 (citing In re Vuitton et Fils S.A., 606 F.2d 1, 3, 5 (2d Cir. 1979) (per curiam)). 23 To justify an ex parte TRO on this ground, the plaintiff “must do more than assert 24 || that the adverse party would dispose of evidence if given notice.” Reno Air Racing Ass’n, 25 ||452 F.3d at 1131 (quoting First Tech. Safety Sys., Inc. v. Depinet, 11 F.3d 641, 650 (6th 26 || Cir. 1993). The plaintiff must “show that defendants would have disregarded a direct court 27 || order and disposed of the goods within the time it would take for a hearing . . . [and] must 28 support such assertions by showing that the adverse party has a history of disposing of

1 || evidence or violating court orders or that persons similar to the adverse party have such a 2 history.” /d. 3 Analysis 4 As previously discussed, Plaintiff offers only speculation regarding the potential 5 ||destruction of evidence or transfer of assets if Defendants are provided notice. This 6 || conclusory approach is exactly what the Ninth Circuit found insufficient as the basis of an 7 parte order. See Reno Air Racing Ass’n, 452 F.3d at 1131 (requiring that the plaintiff 8 more than assert that the adverse party would dispose of evidence if given □□□□□□□□ 9 || (internal citation omitted). The Ninth Circuit cautioned that “[w]ere a single conclusory 10 statement by counsel about infringers sufficient to meet the dictates of Rule 65, then ex 11 parte orders without notice would be the norm and this practice would essentially gut Rule 12 ||65’s notice requirements.” /d. at 1132. Civil Local Rule 83.3(g)(2) likewise prohibits ex 13 || parte motions unless supported by a declaration explaining why notice should not be 14 |}required. The rule provides: “A motion for an order must not be made ex parte unless it 15 ||appears by affidavit or declaration . . . that for reasons specified the party should not be 16 required to inform the opposing party or the opposing party’s attorney.” CivLR 83.3(g)(2). 17 Here, the TRO Application contains no allegation—let alone evidence—that 18 || Defendants have a history of destroying evidence or disobeying court orders. In □□□□□□□□□□□ 19 || Certificate Regarding Notice, counsel asserts that “[a]lthough Defendants Takahashi and 20 Taylor have been identified, no notice has been provided because . . . [inter alia] . . . 21 || Defendants have demonstrated their intent to evade legal accountability by operating under 22 || pseudonyms despite conducting a large-scale commercial operation.” (TRO App. at 38:3- 23 || 10.) 24 Even assuming the assertion is accurate, the Court remains unpersuaded that 25 || Defendants Takahashi, Taylor, and Does 1—20’s use of online pseudonyms in commercial 26 || activity—standing alone—establishes a likelihood that they will disregard court orders or 27 || destroy evidence, let alone demonstrates a history of such conduct. Daybreak has not 28 9]

1 || presented any evidence that Defendants, or that persons similarly situated, have previously 2 || destroyed evidence or violated court orders. 3 Accordingly, Daybreak has failed to make the showing required to justify 4 || proceeding without notice, and the Court therefore DENIES WITHOUT PREJUDICE 5 || Plaintiff's Application for an Ex Parte TRO and Order to Show Cause for a Preliminary 6 || Injunction. 7 Furthermore, the Court DENIES the Motion for Expedited Discovery WITHOUT 8 || PREJUDICE. Daybreak seeks expedited discovery to identify Defendants Does 1—20, 9 || again citing the alleged risk that these individuals may destroy evidence, transfer assets or 10 operations beyond the Court’s jurisdiction, and continue to cause escalating harm to 11 || Daybreak if THJ continues to operate. (/d. at 30:1—33:24.) Daybreak seeks to obtain, inter 12 domain and hosting information, platform account information, payments processing 13 records, and IP addresses and technical data from third parties since it “cannot be obtained 14 ||through traditional discovery directed at the remaining unknown defendants.” (/d. at 15 ||33:4- 24.) Nevertheless, given that named Defendants have yet to appear in—let alone 16 ||receive notice of—this action, the motion is premature. Further, this motion, when it is 17 ||timely filed, is appropriate before the magistrate judge. See CivLR 72.1(b) (setting non- 18 || dispositive pretrial motions before magistrate judges). 19 Furthermore, the Court DENIES the Motion for Alternative Service WITHOUT 20 || PREJUDICE. Plaintiff seeks to serve Defendants Does 1—20 via “[a]lternative service 21 ||through THJ’s operational platforms—including posting on their website, Discord server, 22 GitHub repository,” arguing that it is “reasonably calculated to provide notice because 23 ||these are the primary channels through which Defendants Does 1-20 conduct their 24 || infringing activities and communicate with users.” (TRO App. at 34:3-6.) 25 To authorize alternative service under Rule 4(f)(3), the Court must find that (1) the 26 || proposed method does not violate an international agreement; (2) it satisfies due process; 27 || and (3) it is necessary under the present circumstances. See Rio Props., Inc. v. Rio Intern. 28 || Interlink, 284 F.3d 1007, 1014-17 (9th Cir. 2002). The Ninth Circuit has emphasized that

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1 || it is within the district court’s “sound discretion” to determine when the “particularities and 2 necessities of a given case require alternate service.” /d. at 1017. Here, however, the Court 3 ||is not persuaded that Daybreak has demonstrated that alternative service is necessary at 4 || this juncture. Notably, despite knowing the identities of Defendants Takahashi and Taylor, 5 || Daybreak has not attempted service through traditional means. 6 Finally, the Court notes that Daybreak submitted an Ex Parte Motion for Leave to 7 || Exceed Page Limits for its TRO Application. The Court GRANTS the request; however, 8 || Daybreak is advised that any future requests will be subject to a more stringent showing of 9 || good cause. 10 CONCLUSION 11 In light of the foregoing, the Court DENIES Daybreak’s Motion to Seal, as 12 ||Daybreak has not demonstrated that sealing is warranted under the applicable legal 13 ||standards. Accordingly, the Court DIRECTS Daybreak to file the Complaint, TRO 14 || Application, Motion to Seal, and Ex Parte Motion for Leave to Exceed Page Limits on the 15 || docket. 16 Moreover, the Court DENIES WITHOUT PREJUDICE Daybreak’s TRO 17 || Application. Daybreak may refile its TRO as a regularly noticed motion. If Daybreak 18 |/elects to do so, it must ensure that all filings are served in compliance with the Federal 19 || Rules of Civil Procedure, the Civil Local Rules, and this Court’s Standing Order. 20 IT IS SO ORDERED. 21 22 DATED: June 14, 2025 Clue Bihan H n. Cynthia Bashant, Chief Judge United States District Court 25 26 27 28 an.