Federal Trade Commission v. Automators LLC

• Court: District Court, S.D. California
• Decided: August 25, 2023
• Docket: 3:23-cv-01444
• Status: Unknown

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 FEDERAL TRADE COMMISSION Case No. 23-cv-1444-BAS-LSC

12 Plaintiff, ORDER GRANTING JOINT 13 v. MOTION TO EXTEND THE TEMPORARY RESTRAINING 14 AUTOMATORS LLC, et al., ORDER 15 Defendants, (ECF No. 33) 16

17 PEREGRINE WORLDWIDE, LLC, 18 Relief Defendant.

20 The Federal Trade Commission (“FTC”) filed an Ex Parte Motion for a Temporary 21 Restraining Order (“TRO”), with an asset freeze, appointment of a temporary receiver, and 22 other equitable relief, on August 8, 2023. It submitted its TRO Application under seal and 23 asked that the Court issue an order granting its Application under seal for five business 24 days or until service, whichever occurred first. (TRO App., ECF No. 5.) The Court issued 25 the TRO on August 11, 2023; the Clerk of Court unsealed the TRO five business days later, 26 on August 21. (TRO, ECF No. 8.) 27 In accordance with Federal Rule of Civil Procedure (“Rule”) 65(b)(2), the TRO 28 expires 14 days after its issuance—today, August 25, 2023. On August 22, 2023, the FTC 1 moved, ex parte, for an extension of the TRO. (Ex Parte App. to Extend, ECF No. 9.) It 2 notified counsel for Defendants and Relief Defendants twice of its intention to move for 3 an extension before so moving. (See id. at 2:6–18.) On August 25, 2023, the parties filed 4 a Joint Motion to extend the TRO through September 19, 2023. (Joint Mot., ECF No. 33.) 5 Rule 65(b)(2) provides, “Every temporary restraining order issued without notice . . 6 . expires at the time after entry—not to exceed 14 days—that the court sets, unless before 7 that time the court, for good cause, extends it for a like period or the adverse party consents 8 to a longer extension.” Fed. R. Civ. P. 65(b)(2). Courts routinely find that good cause 9 exists for an extension if the circumstances that supported the initial grant of the temporary 10 restraining order have not meaningfully changed so as to justify a refusal to extend. See, 11 e.g., Stryker Empl’t Co., LLC v. Abbas, No. 1:22-cv-531, 2022 WL 20515026, at *1 (W.D. 12 Mich. June 14, 2022) (extending emergency temporary restraining order on the basis that 13 plaintiffs “demonstrated that the circumstances justifying entry of the TRO in the first 14 instance have not changed”); Solis v. Hutcheson, No. 1:12-cv-236-EJL, 2012 WL 15 12899086, at *2 (D. Idaho May 30, 2012) (“The Court finds based on the circumstances 16 supporting the temporary restraining order still existing . . . [that] the temporary restraining 17 order should be extended for good cause[.]”); RA Glob. Servs., Inc. v. Apps, No. 3:07-CV- 18 1562-L, 2007 WL 9717686, at *1 (N.D. Tex. Sept. 20, 2007) (similar); SEC v. One or More 19 Purchasers of Call Options for Common Stock of CNS, Inc., Civ. No. 06-4540, 2006 WL 20 3004875, at *1 (E.D. Pa. Oct. 20, 2006) (similar). 21 The FTC has shown—and the Defendants and Relief Defendants concede through 22 the Joint Motion—that there have been no factual developments since the Court issued the 23 TRO that diminish the justifications underpinning entry of the TRO in the first instance. 24 (See Ex Parte App. to Extend TRO, ECF No. 9; Status Report of Temporary Receiver 25 (“Status Report”), ECF No. 29.) There are no new facts that alter this Court’s initial finding 26 that the FTC has a strong likelihood of succeeding on the merits of its case. Nor does it 27 appear Defendants’ customers—who are the victims of the scheme alleged in the 28 Complaint—are any less likely to suffer irreparable harm absent the TRO now than on the 1 ||day the TRO entered. Moreover, evidence proffered by the FTC demonstrates several 2 ||Defendants’ noncompliance with the TRO’s mandatory discovery provisions, which 3 further highlights the need for an extension. (See Status Report at 5:11—16 (stating 4 || Defendants have, to “varying degrees,” failed to comply with the TRO, namely by failing 5 ||to produce any or all (1) “financial disclosures, business records, Documents and Assets” 6 (2) “access to logins, passcodes, [and] online accounts’’).) Accordingly, good cause 7 || justifies an extension of the TRO. 8 Furthermore, although the requested extended TRO will span beyond the 14-day 9 || time limitation codified in Rule 65(b)(2), the Court still is within the bounds of that Rule 10 || 65(b)(2) to grant a lengthier extension because Defendants and Relief Defendants consent 11 it. (See Joint Mot.); see Fed. R. Civ. P. 65(b)(2). 12 Accordingly, the Court GRANTS the Joint Motion (ECF No. 33), EXTENDS the 13 until September 19, 2023, and TERMINATES AS MOOT the FTC’s Ex Parte 14 || Application (ECF No. 9). 15 IT IS SO ORDERED. 16 || DATED: August 25, 2023 ( yi uA (Hiphan 6 17 United States District Judge 18 19 20 21 22 23 24 25 26 27 28