Federal Trade Commission v. Automators LLC et al

Filing 34

Order Granting Joint Motion to Extend the Temporary Restraining Order (ECF No. 33 ). the Court extends the TRO until 9/19/23, and terminates as moot the FTC's Ex Parte Application (ECF No. 9 ). Signed by Judge Cynthia Bashant on 8/25/23. (jmo)

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UNITED STATES DISTRICT COURT

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SOUTHERN DISTRICT OF CALIFORNIA

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FEDERAL TRADE COMMISSION
Plaintiff,

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Case No. 23-cv-1444-BAS-LSC
ORDER GRANTING JOINT
MOTION TO EXTEND THE
TEMPORARY RESTRAINING
ORDER

v.
AUTOMATORS LLC, et al.,
Defendants,

(ECF No. 33)

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PEREGRINE WORLDWIDE, LLC,
Relief Defendant.

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The Federal Trade Commission (“FTC”) filed an Ex Parte Motion for a Temporary

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Restraining Order (“TRO”), with an asset freeze, appointment of a temporary receiver, and

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other equitable relief, on August 8, 2023. It submitted its TRO Application under seal and

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asked that the Court issue an order granting its Application under seal for five business

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days or until service, whichever occurred first. (TRO App., ECF No. 5.) The Court issued

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the TRO on August 11, 2023; the Clerk of Court unsealed the TRO five business days later,

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on August 21. (TRO, ECF No. 8.)

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In accordance with Federal Rule of Civil Procedure (“Rule”) 65(b)(2), the TRO

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expires 14 days after its issuance—today, August 25, 2023. On August 22, 2023, the FTC
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moved, ex parte, for an extension of the TRO. (Ex Parte App. to Extend, ECF No. 9.) It

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notified counsel for Defendants and Relief Defendants twice of its intention to move for

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an extension before so moving. (See id. at 2:6–18.) On August 25, 2023, the parties filed

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a Joint Motion to extend the TRO through September 19, 2023. (Joint Mot., ECF No. 33.)

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Rule 65(b)(2) provides, “Every temporary restraining order issued without notice . .

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. expires at the time after entry—not to exceed 14 days—that the court sets, unless before

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that time the court, for good cause, extends it for a like period or the adverse party consents

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to a longer extension.” Fed. R. Civ. P. 65(b)(2). Courts routinely find that good cause

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exists for an extension if the circumstances that supported the initial grant of the temporary

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restraining order have not meaningfully changed so as to justify a refusal to extend. See,

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e.g., Stryker Empl’t Co., LLC v. Abbas, No. 1:22-cv-531, 2022 WL 20515026, at *1 (W.D.

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Mich. June 14, 2022) (extending emergency temporary restraining order on the basis that

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plaintiffs “demonstrated that the circumstances justifying entry of the TRO in the first

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instance have not changed”); Solis v. Hutcheson, No. 1:12-cv-236-EJL, 2012 WL

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12899086, at *2 (D. Idaho May 30, 2012) (“The Court finds based on the circumstances

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supporting the temporary restraining order still existing . . . [that] the temporary restraining

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order should be extended for good cause[.]”); RA Glob. Servs., Inc. v. Apps, No. 3:07-CV-

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1562-L, 2007 WL 9717686, at *1 (N.D. Tex. Sept. 20, 2007) (similar); SEC v. One or More

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Purchasers of Call Options for Common Stock of CNS, Inc., Civ. No. 06-4540, 2006 WL

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3004875, at *1 (E.D. Pa. Oct. 20, 2006) (similar).

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The FTC has shown—and the Defendants and Relief Defendants concede through

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the Joint Motion—that there have been no factual developments since the Court issued the

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TRO that diminish the justifications underpinning entry of the TRO in the first instance.

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(See Ex Parte App. to Extend TRO, ECF No. 9; Status Report of Temporary Receiver

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(“Status Report”), ECF No. 29.) There are no new facts that alter this Court’s initial finding

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that the FTC has a strong likelihood of succeeding on the merits of its case. Nor does it

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appear Defendants’ customers—who are the victims of the scheme alleged in the

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Complaint—are any less likely to suffer irreparable harm absent the TRO now than on the
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day the TRO entered. Moreover, evidence proffered by the FTC demonstrates several

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Defendants’ noncompliance with the TRO’s mandatory discovery provisions, which

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further highlights the need for an extension. (See Status Report at 5:11–16 (stating

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Defendants have, to “varying degrees,” failed to comply with the TRO, namely by failing

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to produce any or all (1) “financial disclosures, business records, Documents and Assets”

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and (2) “access to logins, passcodes, [and] online accounts”).) Accordingly, good cause

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justifies an extension of the TRO.

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Furthermore, although the requested extended TRO will span beyond the 14-day

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time limitation codified in Rule 65(b)(2), the Court still is within the bounds of that Rule

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65(b)(2) to grant a lengthier extension because Defendants and Relief Defendants consent

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to it. (See Joint Mot.); see Fed. R. Civ. P. 65(b)(2).

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Accordingly, the Court GRANTS the Joint Motion (ECF No. 33), EXTENDS the

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TRO until September 19, 2023, and TERMINATES AS MOOT the FTC’s Ex Parte

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Application (ECF No. 9) .

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IT IS SO ORDERED.
DATED: August 25, 2023

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