United States District Court, D. Utah
[SEALED ENTRY, SEALED ORDER] MEMORANDUM DECISION AND
ORDER DENYING EX PARTE MOTION FOR TEMPORARY RESTRAINING ORDER
AND ASSET FREEZE
N. Parrish United States District Court Judge
the court is ZooBuh, Inc.'s (“ZooBuh”) sealed
ex parte motion for a Temporary Restraining Order
(“TRO”) and asset freeze (ECF No. 77) against DG
International. For the following reasons, the motion is
is a Utah corporation with its principal place of business in
Utah County, Utah. ZooBuh provides email services to its
customers, and it owns all of the servers, routers, and
switches on its network. Every ZooBuh email account is
registered, hosted, and serviced through ZooBuh's
International is a foreign company located in Basseterre, St.
Kitts. DG International contracted with DG International
Limited, LLC (“DGI LLC”), a Delaware limited
liability company, to send emails to persons on DG
International's customer lists. The customer list at
issue in this case contained email addresses for persons who
had supposedly registered for the dating website xdating.com.
and its customers have received thousands of email
advertisements for xdating.com. But, according to ZooBuh,
neither it nor its customers elected to receive email
advertisements for xdating.com. ZooBuh alleges that all of
the emails at issue violate at least one or more provisions
of the Controlling the Assault of Non-Solicited Pornography
and Marketing Act of 2003 (CAN-SPAM Act), 15 U.S.C.
§§ 7701, et seq. ZooBuh alleges that it has
suffered harms to its business, including financial harm,
lost time, and server crashes.
filed suit against DG International and DGI LLC (collectively
“Defendants”) for their alleged violations of the
CAN-SPAM Act on September 29, 2017. After a year and a half of
litigation, on March 8, 2019 and April 3, 2019, respectively,
the court entered default judgment against Defendants in
favor of ZooBuh in the amount of $3, 003, 600.00. Final
judgment against Defendants was entered on April 4, 2019.
learning of this lawsuit, DG International closed its U.S.
operations and moved its assets overseas to avoid
collectability. DG International's only assets in the
United States are certain Web Domains currently registered
with Godaddy.com. See Ex Parte Mot. TRO at ¶ 4. ZooBuh
intends to seek Writs of Execution against the Web Domains.
But, in the meantime, ZooBuh's pending ex parte motion
seeks a temporary restraining order to lock DG
International's web domains in place and prohibit their
transfer until they can be auctioned for sale by the U.S.
Marshal in order to satisfy Plaintiff's judgment. ZooBuh
asserts that without an asset freeze, DG International will
merely transfer its Web Domains to a third party, thereby
rendering its assets untouchable.
TRO is not an Appropriate Remedy at this Stage in the
Litigation Where Final Judgment has now been Entered
not a typical preliminary injunction motion.
“Preliminary injunctions are extraordinary equitable
remedies designed to ‘preserve the relative positions
of the parties until a trial on the merits can be
held.'” See Westar Energy, Inc. v. Lake,
552 F.3d 1215, 1224 (10th Cir. 2009). But in this case, the
court has already entered final judgment against defendants,
DG International and DG International Limited (“DG
Defendants”). Thus, the merits of the case have been
resolved and the court has already determined that ZooBuh is
entitled to a monetary judgment of $3, 003, 600.00 against
both defendants. The court fails to see, and ZooBuh has
failed to explain how the court could enter preliminary
injunctive relief after final judgment.
District Court May Not Have Authority to Issue an Ex Parte
Asset Freeze in this Case
had final judgment not been entered, ZooBuh failed to
establish that the district court has authority freeze
Defendant's assets through a TRO or preliminary
injunction. While Fed.R.Civ.P. 65 “governs the
procedure for the issuance of a preliminary injunction: the
authority for [an asset freeze preliminary injunction] must
arise (if at all) elsewhere.” Reebok Int'l,
Ltd. v. Marnatech Enterprises, Inc., 970 F.2d 552, 558
(9th Cir. 1992) (emphasis in original). In its motion, ZooBuh
cites to the following cases for its proposition that the
court may order an asset freeze: Levi Strauss & Co.
v. Sunrise Intl Trading Inc.,51 F.3d 982, 987 (11th
Cir. 1995); Federal Trade Commission v. United States Oil
and Gas Corp.,748 F.2d 1431, 1433-34 (11th Cir. 1984);
Commodity Futures Trading Comm'n v.Kimberlynn Creek Ranch, Inc.,276 F.3d 187, 193 (4th
Cir. 2002); Grupo Mexicano de ...