Great Ocean Capital Holding, LLC v. Zhang et al

Filing 9

ORDER denying Plaintiff's 2 Ex Parte Motion for TRO. This case is dismissed. Signed by Judge Ricardo S Martinez. (PM) cc: James Ware and Courtney Bhatt via first class mail

1
2
3
4
5

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF WASHINGTON
AT SEATTLE

6
7
8
9
10
11

GREAT OCEAN CAPITAL HOLDING,
LLC, a Washington State Limited Liability
Company and United States designate
Regional Center,
Plaintiff,

12
13
14
15
16
17
18

Case No. C17-1578 RSM
ORDER DENYING MOTION FOR
TEMPORARY RESTRAINING ORDER

v.
PENG ZHANG and ZHONGYUAN PAN
(aka “Bonnie Pan”), husband and wife
residing in Ontario, Canada,
Defendants.

19
20

THIS MATTER comes before the Court on Plaintiff’s ex parte Motion for Temporary

21

Restraining Order (“TRO”). Dkt. #2. Plaintiff asks the Court to enter an Order enjoining

22
23

Defendants from “engaging in supplemental proceedings that effectively withdraw or further

24

interfere with funds to be used for job creation and promotion of commerce.” Id. For the

25

reasons set forth below, the Court DENIES the motion.

26
27

A federal court may issue a TRO “with or without written or oral notice to the

28

adverse party” only if “specific facts in the affidavit . . . clearly show that immediate and

29

irreparable injury, loss, or damage will result to the movant before the adverse party can be

30
ORDER– 1

1
2

heard in opposition” and the moving party “certifies in writing any efforts made to give
notice and the reasons why it should not be required.” Fed. R. Civ. P. 65(b). “Motions for

3
4
5
6

temporary restraining orders without notice to and an opportunity to be heard by the adverse
party are disfavored and will rarely be granted.” Local Rules W.D. Wash. LCR 65(b). The
Court finds several reasons to deny the instant motion.

7
8
9
10

First, Plaintiff has not provided an adequate explanation as to its efforts to give notice
to Defendants and why such notice should not be required. Indeed, Plaintiff fails to address
this Courts Local Rule or the requirements of the Federal Rules of Civil Procedure at all. See

11
12
13
14

Dkt. #2.

In a Declaration accompanying this motion, Plaintiff’s counsel asserts that

Defendants are thought to be proceeding pro se. Dkt. #5 at ¶ 4. Plaintiff then goes on to
state that copies of this motion were provided to Defendants’ counsel in the subject

15
16
17
18

concurrent state court proceeding, but counsel does not know whether those same attorneys
would represent Defendants in this action. Id. at ¶ ¶ 5 and 7. Plaintiff’s counsel states that
she has a mailing address for Defendants in Canada, but because she only has that address

19
20
21
22

she is unable to effect service. Id. at ¶ 8. Confusingly, counsel does not mention the Hague
Convention, of which Canada is a member, its procedures for service of process on Canadian
residents, or any efforts to comply with those procedures. See Dkts. #2 and #5.

23
24
25
26

Further, Plaintiff fails to meet the substantive standard for the issuance of a TRO.
The Ninth Circuit has described the standards for deciding whether to grant a motion for a
preliminary injunction:

27
28
29
30

To obtain a preliminary injunction, the moving party must show either
(1) a combination of probable success on the merits and the possibility
of irreparable injury, or (2) that serious questions are raised and the
balance of hardships tips sharply in its favor. These formulations are not
different tests but represent two points on a sliding scale in which the
ORDER– 2

1
2
3
4

degree of irreparable harm increases as the probability of success on the
merits decreases. Under either formulation, the moving party must
demonstrate a significant threat of irreparable injury, irrespective of the
magnitude of the injury.
Big Country Foods, Inc. v. Bd. of Educ. of Anchorage Sch. Dist., 868 F.2d 1085, 1088 (9th

5
6
7
8

Cir. 1989) (citations omitted). The speculative risk of a possible injury is not enough; the
threatened harm must be imminent. Caribbean Marine Services Co., Inc. v. Baldrige, 844
F.2d 668, 674 (9th Cir. 1988); Fed. R. Civ. Proc. 65(b)(1)(A). The standards for issuing a

9
10
11
12

TRO are similar to those required for a preliminary injunction. Lockheed Missile & Space
Co., Inc. v. Hughes Aircraft Co., 887 F.Supp. 1320, 1323 (N.D. Ca. 1995).
Plaintiff fails to demonstrate irreparable harm in this case, particularly because the

13
14
15
16

state court proceedings that it seeks to enjoin have apparently been proceeding for the last
two years. Dkt. #2 at ¶ 9. Plaintiff provides few facts describing the procedural posture of
the state court proceedings at this time.

Plaintiff notes that the state court issued a

17
18
19
20

preliminary injunction, which it apparently disputes, on December 18, 2015, which froze
certain assets of Plaintiff’s. Id. at ¶ 11. Plaintiff also states that in September of 2017, the
state court issued an Order to Show Cause to the “Judgment Debtor” in those proceedings,

21
22
23
24

but Plaintiff fails to identify the “Judgment Debtor” or what the Show Cause Order arises
from or directs. See id. at ¶ 15. On these facts, there is no way for the Court to determine
imminent harm, much less any harm, to Plaintiff should the Court fail to issue a TRO.

25
26
27
28

Finally, Plaintiff fails to address the Younger doctrine, which would typically
preclude this Court from interfering with ongoing state court proceedings. Indeed, absent
extraordinary circumstances, not present here, federal courts should abstain from enjoining

29
30

ongoing state court proceedings. See Younger v. Harris, 401 U.S. 37, 91 S. Ct. 746, 27 L.

ORDER– 3

1
2

Ed.2d 669 (1971). In Younger, the Supreme Court “‘espouse[d] a strong federal policy
against federal court interference with pending state judicial proceedings.’” H.C. v. Koppel,

3
4
5
6

203 F.3d 610, 613 (9th Cir. 2000) (quoting Middlesex County Ethics Comm. v. Garden State
Bar Ass’n, 457 U.S. 423, 431, 102 S. Ct. 2515, 73 L. Ed.2d 116 (1982)). The “principles of
equity, comity, and federalism . . . must restrain a federal court when asked to enjoin a state

7
8
9
10

court proceeding.” Mitchum v. Foster, 407 U.S. 225, 243, 92 S. Ct. 2151, 32 L. Ed.2d 705
(1972).
Under Younger, a federal court must abstain if four requirements are met:

11
12
13
14
15
16

(1) a state-initiated proceeding is ongoing; (2) the proceeding implicates
important state interests; (3) the federal plaintiff is not barred from
litigating federal constitutional issues in the state proceeding; and (4)
the federal court action would enjoin the proceeding or have the
practical effect of doing so, i.e., would interfere with the state
proceeding in a way that Younger disapproves.
San Jose Silicon Valley Chamber of Commerce Political Action Comm. v. City of San Jose,

17
18
19
20

546 F.3d 1087, 1091-92 (9th Cir. 2008).
Here, the first criteria is met because, as best the Court can tell, the Washington State
action is still pending. According to Plaintiff’s brief, an Order to Show Cause was issued on

21
22
23
24

September 12, 2017. Dkt. #2 at ¶ 15. Plaintiff provides no evidence that the proceedings
have concluded, and indeed seeks to stay them by way of this motion. The second criteria is
also met because of the state’s important interest in actions involving alleged violations of

25
26
27
28

the Washington State Securities Act. See Dkt. #2 at ¶10. The third criteria is satisfied
because Plaintiff has not presented any argument demonstrating why the Washington state
courts would not provide it with an adequate opportunity to litigate its federal and state

29
30

claims. Finally, the fourth requirement, that the federal court action would enjoin the state

ORDER– 4

1
2

proceeding, is met because the relief Plaintiff seeks is to enjoin Washington courts from
proceeding with the action currently pending there. This type of interference has been

3
4
5
6

described as “the most offensive and intrusive action that a federal court can take with
respect to a state court proceeding.” Gilbertson v. Albright, 381 F.3d 965, 977 (9th Cir.
2004) (en banc).

7
Because Younger applies, this Court must abstain from enjoining the state court case,

8
9
10

and should dismiss the action entirely. “When an injunction is sought and Younger applies,
it makes sense to abstain, that is, to refrain from exercising jurisdiction, permanently by

11
12
13
14

dismissing the federal action because the federal court is only being asked to stop the state
proceeding.” Gilbertson, 381 F.3d at 981. Furthermore, “[o]nce it is determined that an
injunction is not warranted on Younger grounds, there is nothing more for the federal court to

15
16
17
18

do. Hence, dismissal (and only dismissal) is appropriate.” Id.; see also H.C., 203 F.3d at
613.
IT IS THEREFORE ORDERED that Plaintiff’s ex parte motion for a TRO (Dkt. #2)

19
20
21
22
23
24

is DENIED and this case is DISMISSED.
The Clerk SHALL send a copy of this Order to attorneys James Ware and Courtney
Bhatt c/o MDK Law, 777 108th Ave NE, Suite 2000, Bellevue, WA 98004.
DATED this 25th day of October 2017.

25

A

26

RICARDO S. MARTINEZ
CHIEF UNITED STATES DISTRICT JUDGE

27
28
29
30
ORDER– 5