1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 NORTHERN DISTRICT OF CALIFORNIA 9 PASSION LABS, LLC, et al., 10 Case No. 25-cv-06672-RS Plaintiffs, 11 v. ORDER DENYING MOTION FOR EX 12 PARTE TEMPORARY RESTRAINING STEPHANE GERVAIS, et al., ORDER 13 Defendants. 14
15 I. INTRODUCTION 16 Plaintiffs Passion Labs LLC and AiMi, Inc. seek a temporary restraining order (“TRO”) 17 against Defendants Stephane Gervais and 9245-4628 Quebec, Inc. over allegations of contractual 18 breaches and the hacking of important business and technological accounts. For the reasons 19 explained below, the motion for a TRO is denied. 20 II. BACKGROUND 21 In 2019, Plaintiff AiMi contracted with Quebec Inc. for the services of Gervais, a computer 22 programmer. See Compl., Ex. A, Dkt. No. 1-1 (“Project Agreement”). According to a declaration 23 filed by AiMi’s founder, president and CEO, Edward Balassanian, Defendants agreed to expand 24 the scope of the services Gervais provided starting in 2020, “as shown through the parties’ course 25 of dealing.” Balassanian Decl., Dkt. No. 5 ¶ 5. The Project Agreement attached to the complaint 26 states that Gervais would be paid a fee set forth in an “Exhibit A” that Plaintiffs did not include 27 with their filings, so it is unclear how much Plaintiffs agreed to pay Defendants for their services. 1 might have inured to Defendants, those rights were transferred to Plaintiffs. Project Agreement 2 ¶ 3. The contract also provides that “monetary damages would not be an adequate remedy if 3 [Gervais] breaches any provision of this Agreement which protects [Plaintiffs’] intellectual 4 property and other proprietary rights” such that Plaintiffs are entitled “to a stipulated temporary 5 restraining order, and shall thereafter be entitled to apply for a preliminary injunction” or other 6 equitable relief, id. ¶ 11, with venue appropriate in the Northern District of California federal 7 court, id. ¶ 17. 8 One project Defendants were hired to produce is called “VJ Live” or “Storyboard,” a 9 program which incorporates AiMi’s music-generating capabilities with AI-generated visual art 10 that synchronizes the two elements. Storyboard is intended for use on smaller platforms like 11 phones, but it can also suit live theater settings, including a “Passion Theater” that Plaintiffs built 12 specifically for its use. See generally, Ex Parte App., Dkt. No. 5 at 2. 13 As recently as last month, Storyboard “was functioning as intended,” despite still being in 14 developmental stages. Id. Plaintiffs could demonstrate the program remotely over Zoom with 15 prospective customers and in person at the Passion Theater. Defendants confirmed to Plaintiffs 16 that Storyboard was working as intended on July 19, and Plaintiffs anticipated demonstrating it for 17 a prospective client on July 28, 2025. 18 On July 26, things went sideways. Gervais texted Balassanian, stating “Financial situation 19 came out and is known. So it’s pretty much over for me. Everything will cancel on my side. This 20 also means I am also done. I will have to close our books and it’s time to pull the trigger.” Id. at 21 3. Over the next two days, Defendants allegedly “sabotaged the pitch meeting, hacked AiMi and 22 Passion Labs’ accounts and changed their passwords and account emails, disabled their access to 23 important accounts, and disabled Storyboard.” Compl. ¶ 25. Although Plaintiffs were able to 24 restore access to some of the accounts, they remain unable to access the account they use for cloud 25 computing through Amazon Web Services (“AWS”). Without that access “Storyboard does not 26 function.” Id. ¶ 33. 27 In a termination email sent July 28, Gervais told Balassanian that “[d]espite a verbal 1 agreement for monthly compensation, only a single payment of $5,000 has been received, making 2 continued involvement unsustainable.” See Compl., Ex. B, Dkt. No. 1-2 (“Termination Email”). 3 Gervais also represented that “[a]s a final professional courtesy, and to leave the system in a 4 working state, I am providing access for you to use the currently deployed versions.” Id. At the 5 end of the letter, Defendants claimed that “all intellectual property, source code, and unreleased 6 developments remain my sole property.” Id. 7 Balassanian declares that Defendants were paid monthly based on invoices they submitted. 8 Payments went to Quebec Inc., which he believed to be Gervaise’s corporate alias. Balassanian 9 Decl. ¶ 7. AiMi also paid Gervais in stock options starting in August 2023. Id. ¶ 8. In May 2025, 10 Gervais assigned his entire worldwide right, title and interest (to the extent not already owned by 11 Plaintiffs) in the Storyboard technology to Passion Labs. See Balassanian Decl., Ex. 1 12 (“Assignment”). 13 The scheduled July 29 meeting “was an embarrassing disaster.” Balassanian Decl. ¶ 24. 14 “However, that potential client has agreed to give [Plaintiffs] another opportunity if we are able to 15 have Storyboard up and running by August 20 . . . In order to get Storyboard functioning for this 16 demo, [Plaintiffs] need immediate access to our AWS account and the code and servers restored to 17 the way they were immediately before Gervais sabotaged them.” Id. Apparently, the program 18 currently runs “a constant non-sensical loop showing images of green witches standing around a 19 kettle.” Id. ¶ 16. 20 Plaintiffs subsequently filed this lawsuit, averring claims of breach of contract, breach of 21 the implied covenant of good faith and fair dealing, intentional interference with prospective 22 economic advantage, unfair competition, and unauthorized access to computer data and systems. 23 Without a temporary restraining order, Plaintiffs claim they will suffer immediate and irreparable 24 harm in the form of “a loss of potential customers and potentially the loss of the first-to-market 25 advantage.” Ex Parte App. at 8–9. “Having the Storyboard application non-operational will set 26 Plaintiffs’ development back a month or more, and will certainly result in irreparable harm to 27 Plaintiffs and their position in the marketplace.” Id. at 9. 1 III. LEGAL STANDARD 2 The standard for issuing a temporary restraining order effectively mirrors the standard for 3 issuing a preliminary injunction. See Washington v. Trump, 847 F.3d 1151, 1159 n.3 (9th Cir. 4 2017). “A plaintiff seeking [such relief] must establish that [1] he is likely to succeed on the 5 merits, [2] that he is likely to suffer irreparable harm in the absence of preliminary relief, [3] that 6 the balance of equities tips in his favor, and [4] that an injunction is in the public interest.” Winter 7 v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 21 (2008). “[I]f a plaintiff can only show that there are 8 ‘serious questions going to the merits’—a lesser showing than likelihood of success on the 9 merits—then a preliminary injunction may still issue if the ‘balance of hardships tips sharply in 10 the plaintiff's favor and the other two Winter factors are satisfied.’” All. for the Wild Rockies v. 11 Peña, 865 F.3d 1211, 1217 (9th Cir. 2017) (quoting Shell Offshore, Inc. v. Greenpeace, Inc., 709 12 F.3d 1281, 1291 (9th Cir. 2013)). 13 While the standards are similar, a temporary restraining order operates on a different 14 timeframe than a preliminary injunction. The latter remains in effect pending final resolution of 15 the dispute, whereas “a TRO ‘should be restricted to . . . preserving the status quo and preventing 16 irreparable harm just so long as is necessary to hold a [preliminary injunction] hearing and no 17 longer.’” E. Bay Sanctuary Covenant v.
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1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 NORTHERN DISTRICT OF CALIFORNIA 9 PASSION LABS, LLC, et al., 10 Case No. 25-cv-06672-RS Plaintiffs, 11 v. ORDER DENYING MOTION FOR EX 12 PARTE TEMPORARY RESTRAINING STEPHANE GERVAIS, et al., ORDER 13 Defendants. 14
15 I. INTRODUCTION 16 Plaintiffs Passion Labs LLC and AiMi, Inc. seek a temporary restraining order (“TRO”) 17 against Defendants Stephane Gervais and 9245-4628 Quebec, Inc. over allegations of contractual 18 breaches and the hacking of important business and technological accounts. For the reasons 19 explained below, the motion for a TRO is denied. 20 II. BACKGROUND 21 In 2019, Plaintiff AiMi contracted with Quebec Inc. for the services of Gervais, a computer 22 programmer. See Compl., Ex. A, Dkt. No. 1-1 (“Project Agreement”). According to a declaration 23 filed by AiMi’s founder, president and CEO, Edward Balassanian, Defendants agreed to expand 24 the scope of the services Gervais provided starting in 2020, “as shown through the parties’ course 25 of dealing.” Balassanian Decl., Dkt. No. 5 ¶ 5. The Project Agreement attached to the complaint 26 states that Gervais would be paid a fee set forth in an “Exhibit A” that Plaintiffs did not include 27 with their filings, so it is unclear how much Plaintiffs agreed to pay Defendants for their services. 1 might have inured to Defendants, those rights were transferred to Plaintiffs. Project Agreement 2 ¶ 3. The contract also provides that “monetary damages would not be an adequate remedy if 3 [Gervais] breaches any provision of this Agreement which protects [Plaintiffs’] intellectual 4 property and other proprietary rights” such that Plaintiffs are entitled “to a stipulated temporary 5 restraining order, and shall thereafter be entitled to apply for a preliminary injunction” or other 6 equitable relief, id. ¶ 11, with venue appropriate in the Northern District of California federal 7 court, id. ¶ 17. 8 One project Defendants were hired to produce is called “VJ Live” or “Storyboard,” a 9 program which incorporates AiMi’s music-generating capabilities with AI-generated visual art 10 that synchronizes the two elements. Storyboard is intended for use on smaller platforms like 11 phones, but it can also suit live theater settings, including a “Passion Theater” that Plaintiffs built 12 specifically for its use. See generally, Ex Parte App., Dkt. No. 5 at 2. 13 As recently as last month, Storyboard “was functioning as intended,” despite still being in 14 developmental stages. Id. Plaintiffs could demonstrate the program remotely over Zoom with 15 prospective customers and in person at the Passion Theater. Defendants confirmed to Plaintiffs 16 that Storyboard was working as intended on July 19, and Plaintiffs anticipated demonstrating it for 17 a prospective client on July 28, 2025. 18 On July 26, things went sideways. Gervais texted Balassanian, stating “Financial situation 19 came out and is known. So it’s pretty much over for me. Everything will cancel on my side. This 20 also means I am also done. I will have to close our books and it’s time to pull the trigger.” Id. at 21 3. Over the next two days, Defendants allegedly “sabotaged the pitch meeting, hacked AiMi and 22 Passion Labs’ accounts and changed their passwords and account emails, disabled their access to 23 important accounts, and disabled Storyboard.” Compl. ¶ 25. Although Plaintiffs were able to 24 restore access to some of the accounts, they remain unable to access the account they use for cloud 25 computing through Amazon Web Services (“AWS”). Without that access “Storyboard does not 26 function.” Id. ¶ 33. 27 In a termination email sent July 28, Gervais told Balassanian that “[d]espite a verbal 1 agreement for monthly compensation, only a single payment of $5,000 has been received, making 2 continued involvement unsustainable.” See Compl., Ex. B, Dkt. No. 1-2 (“Termination Email”). 3 Gervais also represented that “[a]s a final professional courtesy, and to leave the system in a 4 working state, I am providing access for you to use the currently deployed versions.” Id. At the 5 end of the letter, Defendants claimed that “all intellectual property, source code, and unreleased 6 developments remain my sole property.” Id. 7 Balassanian declares that Defendants were paid monthly based on invoices they submitted. 8 Payments went to Quebec Inc., which he believed to be Gervaise’s corporate alias. Balassanian 9 Decl. ¶ 7. AiMi also paid Gervais in stock options starting in August 2023. Id. ¶ 8. In May 2025, 10 Gervais assigned his entire worldwide right, title and interest (to the extent not already owned by 11 Plaintiffs) in the Storyboard technology to Passion Labs. See Balassanian Decl., Ex. 1 12 (“Assignment”). 13 The scheduled July 29 meeting “was an embarrassing disaster.” Balassanian Decl. ¶ 24. 14 “However, that potential client has agreed to give [Plaintiffs] another opportunity if we are able to 15 have Storyboard up and running by August 20 . . . In order to get Storyboard functioning for this 16 demo, [Plaintiffs] need immediate access to our AWS account and the code and servers restored to 17 the way they were immediately before Gervais sabotaged them.” Id. Apparently, the program 18 currently runs “a constant non-sensical loop showing images of green witches standing around a 19 kettle.” Id. ¶ 16. 20 Plaintiffs subsequently filed this lawsuit, averring claims of breach of contract, breach of 21 the implied covenant of good faith and fair dealing, intentional interference with prospective 22 economic advantage, unfair competition, and unauthorized access to computer data and systems. 23 Without a temporary restraining order, Plaintiffs claim they will suffer immediate and irreparable 24 harm in the form of “a loss of potential customers and potentially the loss of the first-to-market 25 advantage.” Ex Parte App. at 8–9. “Having the Storyboard application non-operational will set 26 Plaintiffs’ development back a month or more, and will certainly result in irreparable harm to 27 Plaintiffs and their position in the marketplace.” Id. at 9. 1 III. LEGAL STANDARD 2 The standard for issuing a temporary restraining order effectively mirrors the standard for 3 issuing a preliminary injunction. See Washington v. Trump, 847 F.3d 1151, 1159 n.3 (9th Cir. 4 2017). “A plaintiff seeking [such relief] must establish that [1] he is likely to succeed on the 5 merits, [2] that he is likely to suffer irreparable harm in the absence of preliminary relief, [3] that 6 the balance of equities tips in his favor, and [4] that an injunction is in the public interest.” Winter 7 v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 21 (2008). “[I]f a plaintiff can only show that there are 8 ‘serious questions going to the merits’—a lesser showing than likelihood of success on the 9 merits—then a preliminary injunction may still issue if the ‘balance of hardships tips sharply in 10 the plaintiff's favor and the other two Winter factors are satisfied.’” All. for the Wild Rockies v. 11 Peña, 865 F.3d 1211, 1217 (9th Cir. 2017) (quoting Shell Offshore, Inc. v. Greenpeace, Inc., 709 12 F.3d 1281, 1291 (9th Cir. 2013)). 13 While the standards are similar, a temporary restraining order operates on a different 14 timeframe than a preliminary injunction. The latter remains in effect pending final resolution of 15 the dispute, whereas “a TRO ‘should be restricted to . . . preserving the status quo and preventing 16 irreparable harm just so long as is necessary to hold a [preliminary injunction] hearing and no 17 longer.’” E. Bay Sanctuary Covenant v. Trump, 932 F.3d 742, 779 (9th Cir. 2018) (quoting 18 Granny Goose Foods, Inc. v. Brotherhood of Teamsters & Auto Truck Drivers Local No. 70, 415 19 U.S. 423, 439 (1974)). 20 Under Federal Rule of Civil Procedure 65(b)(1), a TRO may issue without notice to the 21 opposing party (i.e., ex parte) only if “specific facts in an affidavit or a verified complaint clearly 22 show that immediate and irreparable injury, loss, or damage will result to the movant before the 23 adverse party can be heard in opposition” and “the movant’s attorney certifies in writing any 24 efforts made to give notice and the reasons why it should not be required.” 25 IV. DISCUSSION 26 Plaintiffs have not satisfied the requirements for issuing an ex parte temporary restraining 27 order. To be sure, Counsel’s submissions demonstrate substantial efforts to give notice of this 1 case and TRO request to Defendants, satisfying Rule 65(b)(1)(B). Indeed, it appears that 2 Defendants were properly served with the court’s order requiring responsive briefing by August 3 14, 2025. See Dkt. No. 11 (counsel declaration stating, under penalty of perjury, that on August 4 12 a process server had given notice that it personally served on Defendants the summons, 5 complaint, TRO pleadings, and the August 8 order on Defendants).1 August 14 has come and 6 gone, suggesting Defendants are not going to respond in a timely matter. 7 Based on the averments in the complaint and the motion, however, it is not sufficiently 8 clear that immediate and irreparable injury, loss, or damage will result to Plaintiffs without 9 imminent court action. See Rule 65(b)(1)(A). The sought-after injunctive relief is for an order 10 directing, inter alia, Defendants to return all of Plaintiffs’ property, reinstate Plaintiffs’ control of 11 all passwords (including as to the AWS account), and restore the product so that it will function as 12 it did prior to the challenged conduct that began on July 28. Yet, Plaintiffs’ claimed imminent 13 injury is the potential loss of a first-to-market advantage related to an upcoming client meeting. 14 Therein lies a disconnect—even if the requested injunctive relief is granted, it does not necessarily 15 mean the claimed injury will be prevented. To the contrary, Plaintiffs could secure all the 16 injunctive relief they seek and still lose out on first-to-market advantages or the potential business 17 of a client. In this respect, Plaintiffs’ bid for relief is quite unlike the standard TRO motion. The 18 immediate and irreparable harm asserted here appears as likely to occur regardless of the 19 imposition of injunctive relief, which means the causal nexus is insufficient to meet the relevant 20 standard. See Rule 65(b)(1) (permitting ex parte TROs “only if . . . specific facts in an affidavit or 21 a verified complaint clearly show that immediate and irreparable injury, loss, or damage will result 22 to the movant before the adverse party can be heard in opposition”) (emphasis added). Because 23 the facts averred do not clearly show that the necessary degree of injury, loss, or damage will 24
25 1 Counsel’s declaration stated that proof of service would be filed upon receipt of the affidavit of service from the process server. No proof has yet been filed, and Plaintiffs are advised to do so at 26 the earliest opportunity. Considering counsel’s sworn declaration, it is peculiar that three days have passed with no affidavit of service appearing on the docket. In any event, no affidavit having 27 been filed, the analysis here remains under the rubric of Rule 65(b). 1 result without immediate court intervention, an ex parte order in this case is inappropriate. 2 V. CONCLUSION 3 Plaintiffs’ motion for a temporary restraining order is denied. Plaintiffs’ request for a 4 preliminary injunction shall be heard on September 4, 2025, at 2:30 pm via remote proceedings on 5 Zoom. An opening brief may be filed on or before August 22, and a responsive brief, if any, may 6 be filed on or before August 29. A reply brief, if any, may be filed on or before September 2. 4 8 IT IS SO ORDERED. 9 10 Dated: August 15, 2025 11 RICHARD SEEBORG 12 Chief United States District Judge
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Z 18 19 20 21 22 23 24 25 26 27 98 ORDER DENYING MOTION FOR TRO CASE No. 25-cv-06672-RS