United States Small Business Administration v. Rocket Ventures II, L.P. et al

Filing 175

ORDER DENYING 173 Ex Parte Application for Temporary Restraining Order and Order to Show Cause re Preliminary Injunction. If Plaintiff files motion for preliminary injunction motion due by 4/7/2014; opposition due by 10:00 a.m.; and reply due by 10:00 a.m. on 4/17/2014. Placeholder Motion Hearing set for 4/25/2014 09:00 AM in Courtroom 5, 2nd Floor, Oakland before Hon. Jeffrey S. White. Signed by Judge Jeffrey S. White on April 2, 2014. (jswlc3, COURT STAFF) (Filed on 4/2/2014)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA
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For the Northern District of California

United States District Court

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UNITED STATES SMALL BUSINESS
ADMINISTRATION, in its capacity as
Receiver for Rocket Ventures II SMIC, L.P.,

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No. C 10-04425 JSW

Plaintiff,
v.

ORDER DENYING PLAINTIFF’S
EX PARTE APPLICATION FOR A
TEMPORARY RESTRAINING
ORDER

ROCKET VENTURES II, L.P., et al.,
Defendants.
/

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Now before the Court is the ex parte application for a temporary restraining order

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(“TRO”) filed by the United States Small Business Administration (“SBA”) to enjoin

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Defendants from transferring, dissipating, moving or encumbering their assets pending the trial.

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In order to obtain a TRO or preliminary injunctive relief, Plaintiff “must establish that [it] is

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likely to succeed on the merits, that [it] is likely to suffer irreparable harm in the absence of

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preliminary relief, that the balance of equities tips in [its] favor, and that an injunction is in the

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public interest.” Winter v. Natural Resources Defense Council, 555 U.S. 7, 129 S. Ct. 365, 374

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(2008) (citations omitted). The Winter court also noted that because injunctive relief is “an

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extraordinary remedy,” it “may only be awarded upon a clear showing that the plaintiff is

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entitled to such relief.” 129 S.Ct. at 375-76 (citing Mazurek v. Armstrong, 520 U.S. 968, 972

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(1997) (per curiam)). Thus “[i]n each case, courts ‘must balance the competing claims of injury

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and must consider the effect on each party of the granting or withholding of the requested

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relief.’” Id. at 376 (citing Amoco Production Co. v. Gambell, 480 U.S. 531, 542 (1987)). An ex

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parte application for a TRO may only be granted if “specific facts in an affidavit or a verified

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complaint clearly show that immediate and irreparable injury, loss, or damage will result to the

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movant before the adverse party can be heard in opposition.” Fed. R. Civ. Proc. 65(b)(1)(A).

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SBA fails to meet this standard. Although the Court finds that SBA may be able to

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demonstrate a likelihood of success on the merits, SBA has not demonstrated that the

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Defendants’ assets are imminently at risk of being transferred, dissipated, moved or

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encumbered. Accordingly, it has not shown that it would suffer irreparable injury that would

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warrant a TRO. Therefore, the Court HEREBY DENIES SBA’s ex parte application for a

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TRO.
However, this Order is without prejudice to SBA filing a motion for a preliminary

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For the Northern District of California

United States District Court

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injunction. The Court notes that SBA will need to make a stronger showing of imminent

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irreparable harm if it intends to move for a preliminary injunction. SBA asserts that Rocket

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Ventures II, L.P. (“RVII”) is the only defendant with any assets and that the one remaining

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active and ongoing investment of RVII, Activa, was sold “in or around December 2013.”

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(Declaration of Richard Moser.) Mr. Moser declares that “In or around December 2013, it has

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come to the Receiver’s attention that Activa was acquired, sold or otherwise liquidated.

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Consequently, RVII has received cash in the amount of approximately $1.4 million, following

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liquidation of its equity ownership in Activa stock.” (Id., ¶ 19.) He further states that “the Receiver

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understands that RVII currently maintains a cash balance of approximately $300,000.” (Id., ¶ 20.)

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That is all of the evidence SBA submits regarding the assets that are purportedly at risk. SBA

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does not proffer any facts that would substantiate a reasonable concern that RVII will transfer,

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dissipate, move or encumber its assets before the trial. Nor it is clear why SBA waited until

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April to move for a TRO when it discovered at some point in December of 2013 that Activa was

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sold.

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In light of the Court’s schedule and the upcoming trial, the Court will set an expedited

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schedule on a motion for a preliminary injunction. Any motion for a preliminary injunction

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shall be filed by no later than April 7, 2014. Defendants’ opposition shall be filed by no later

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than 10:00 a.m. on April 14, 2014. SBA’s reply, if any, shall be filed by no later than 10:00
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a.m. on April 17, 2014. If SBA files a motion for a preliminary injunction, the hearing for such

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motion will be held at 9:00 a.m. on April 25, 2014.

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IT IS SO ORDERED.

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Dated: April 2, 2014
JEFFREY S. WHITE
UNITED STATES DISTRICT JUDGE

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For the Northern District of California

United States District Court

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