Saffron Rewards, Inc. v. Rossie

[3] 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA [6] 7 SAFFRON REWARDS, INC., Case No. 22-cv-02695-DMR 8 Plaintiff, ORDER DENYING MOTION FOR EX 9 v. PARTE TEMPORARY RESTRAINING ORDER WITHOUT PREJUDICE 10 ALEX ROSSIE, Re: Dkt. No. 20 11 Defendant. [12] 13 Plaintiff Saffron Rewards (“Saffron”) alleges that its co-founder Defendant Alex Rossie 14 breached his contractual and legal obligations to Saffron after Rossie left the company. According 15 to Saffron, the company was co-founded by Rossie and non-party Saumil Nanavati to democratize 16 co-branded reward cards for businesses of every size. Declaration of Saumil Nanavati ¶ 3 [Docket 17 No. 20-5.] Rossie and Nanavati served as members of Saffron’s board of directors. Rossie was 18 specifically responsible for various technical aspects of the company. Id. ¶¶ 3-4. On November 19 10, 2021, Saffron and Rossie entered into a Technology Assignment Agreement in which Rossie 20 assigned, among other things, all technology and intellectual property rights to Saffron. Id. ¶ 5. 21 From that date until February 23, 2022, Rossie created numerous online business accounts through 22 third-party vendors that Saffron requires to conduct its business, including software development, 23 communications, website development, and finance (the “Company Accounts”), assigning himself 24 sole ownership and administrator access rights. Id. ¶¶ 6-8. On February 23, 2022, Rossie stopped 25 providing services to Saffron and terminated his engagement with the company, although he 26 remained on the board of directors until April 29, 2022. Id. ¶ 9. Over the ensuing weeks, Rossie 27 refused to comply with Saffron’s requests to return company property and continued to withhold 1 lawsuit against Rossie on May 4, 2021 alleging (1) breach of the Technology Assignment 2 Agreement; (2) breach of the fiduciary duty of loyalty; (3) breach of the implied covenant of good 3 faith and fair dealing; (4) a violation of the federal Computer Fraud and Abuse Act (“CFAA”), 18 4 U.S.C. § 1030 , and (5) conversion. [Docket No. 1.] Rossie has since moved to dismiss the claims 5 against him. [Docket No. 14.] 6 On July 11, 2022, Saffron filed this ex parte application for temporary restraining order 7 and for an order to show cause why a preliminary injunction should not be issued, with supporting 8 declarations from Nanavati and Saffron’s counsel April Sun. [Docket No. 20.] Saffron seeks an 9 immediate order requiring Rossie to return administrator access to the Company Accounts. 10 [Docket No. 20-10.] 11 Federal Rule of Civil Procedure 65(b) authorizes a temporary restraining order only when 12 the moving party can satisfy the following strict criteria: 13 (A) specific facts in an affidavit or a verified complaint clearly show that immediate and irreparable injury, loss, or damage will result to 14 the movant before the adverse party can be heard in opposition; and 15 (B) the movant’s attorney certifies in writing any efforts made to give notice and the reasons why it should not be required. [16] 17 Fed. R. Civ. P. 65(b)(1); see Civ. L.R. 65-1. The “circumstances justifying the issuance of an ex 18 parte order are extremely limited,” given that “our entire jurisprudence runs counter to the notion 19 of court action taken before reasonable notice and an opportunity to be heard has been granted 20 both sides of a dispute.” Reno Air Racing Ass’n, Inc. v. McCord, 452 F.3d 1126, 1131 (9th Cir. 21 2006) (quoting Granny Goose Foods, Inc. v. Teamsters, 415 U.S. 423, 94 (1974)). 22 Saffron’s application for a TRO is denied. Saffron addresses irreparable harm, but not its 23 immediacy. [See Docket No. 20-1 at 12.] It fails to establish that immediate and irreparable 24 injury will occur before Rossi can be heard in opposition, as required by Rule 65(b). Saffron filed 25 the complaint on May 4, 2021. As demonstrated by the evidence proffered in support of this 26 application, the facts have not materially changed in the months since this lawsuit was filed, 27 except that Saffron acknowledges that access issues have now been resolved with respect to one of 1 Saffron waited over two months since filing the complaint to move for a temporary restraining 2 || order further demonstrates that the harm is not so immediate that action must be taken before both 3 sides have a full opportunity to be heard. See Rovio Entm’t Ltd. v. Royal Plush Toys, Inc., 907 F. 4 ||} Supp. 2d 1086, 1097 (N.D. Cal. 2012) (finding that “Plaintiff’s delay in requesting a TRO 5 militates against its issuance. Parties spurred on by the threat of or actual immediate irreparable 6 || harm file for TROs as quickly as possible to head or stave it off.”). 7 Accordingly, Saffron’s application is denied without prejudice to its ability to seek other 8 || forms of preliminary relief if appropriate. DIST) p y pprop KES RIG □ oC 9 > IT IS SO ORDERED ay □ 10 . 11 || Dated: July 12, 2022 rh “ 12 , 2 AD 7 Oe = □□ se Bort a, IN RyM. | | 13 ON NS wigs © i cs Neeetrate Judge □□ □□ □□□ ES VOISTRICS © [16] = 17 Z 18