United States District Court, D. Nevada
Marquis Aurbach Coffing Terry A. Coffing, Esq. Nevada Bar No.
4949 Brian R. Hardy, Esq. Nevada Bar No.10068 Attorneys for
Plaintiff Gopher Protocol, Inc.
ORDER GRANTING MOTION FOR PRELIMINARY INJUNCTION [ECF
Gopher Protocol, Inc. (“Plaintiff”) having
submitted its Motion for Preliminary Injunction and Ex Parte
Application for Temporary Restraining Order [ECF No. 5], and
the Court having considered the pleadings, papers, evidence
and documents on file herein and being otherwise fully
advised following a hearing held on Friday, July 12, 2019,
hereby finds as follows:
December 3, 2018, a Securities Purchase Agreement
(“SPA”) was entered into between Plaintiff and
Defendant, pursuant to which Plaintiff granted a security
interest in all of Plaintiff's assets. The SPA clearly
identifies and sets forth the following relevant facts: (i)
Plaintiff (identified in the SPA as the
“Company”) is a Nevada corporation; (ii)
dispute, controversy, claim or action of any kind arising out
of, relating to, or in connection with the SPA, or in any way
involving the parties or their respective affiliates must be
resolved by final and binding arbitration before a retired
judge at JAMS in the Virgin Islands; and (iii) either party is
entitled to seek equitable and injunctive relief to prevent
any actual or threatened breach of the SPA or other
There is a dispute between Defendant and Plaintiff.
Consequently, and consistent with the express terms of the
SPA, Plaintiff filed its arbitration demand with JAMS on
Friday, June 7, 2019.
July 2, 2019 Honorable Philip Pro (Ret.) was appointed as
Arbitrator in Gopher Protocol, Inc. vs. Discovery Growth
Fund, LLC (JAMS Ref # 1260005395) following a selection
process in which all parties participated. As such,
currently there is a pending arbitration as contemplated
under the express terms of the SPA.
or about May 28, 2019, Defendant declared all amounts
immediately due and payable and scheduled the sale and
disposition of all of the assets of Plaintiff for 10:00 AM
Eastern Time on Monday, June 24, 2019 at Defendant's
offices in St. Thomas, Virgin Islands.
June 18, 2019, Plaintiff filed the instant action seeking
exclusively declaratory and injunctive relief. On that same
date, Plaintiff also filed its Motion for Preliminary
Injunction and Ex Parte Application for Temporary Restraining
Court granted the Ex Parte application for Temporary
Restraining Order temporarily enjoining the Defendant from
selling, foreclosing upon, encumbering, dissipating, or
otherwise transferring any of the Plaintiff's assets upon
the Plaintiff's posting of security in the amount of $5,
Thereafter, this Court set and conducted a hearing on
Plaintiff's Motion for Preliminary Injunction for July
IT IS HEREBY ORDERED, ADJUDGED and DECREED that, as of the
date of the hearing, there is jurisdiction and venue,
however, the Court will further review the question of
jurisdiction and venue as it considers the Defendant's
pending Motion to Dismiss Plaintiff's Verified
Complaint for Injunctive Relief [ECF No. 13].
FURTHER ORDERED that Plaintiff's Motion for Preliminary
Injunction is GRANTED as it has established “(1) a
likelihood of success on the merits, (2) that the plaintiff
will likely suffer irreparable harm in the absence of
preliminary relief, (3) that the balance of equities tip in
its favor, and (4) that the public interest favors an
injunction.” Wells Fargo & Co. v. ABD Ins.
& Fin. Servs., Inc., 758 F.3d 1069, 1071 (9th Cir.
2014), as amended (Mar. 11, 2014) (citing Winter v.
Natural Res. Def. Council, Inc., 555 U.S. 7, 22 (2008)).
In its Verified Complaint, GPI seeks a judicial determination
that, among other things, pursuant to the SPA, the parties
are required to attend arbitration to resolve any dispute,
controversy, claim or action.
Plaintiff enjoys a likelihood of success in prevailing on its
declaratory relief claims. Further, it appears that Plaintiff
would suffer irreparable harm absent injunctive relief.
Notably, any foreclosure sale of the Plaintiffs assets would
put the Plaintiff out of business rendering the pending
arbitration moot. Simply put, not only would allowing the
Defendant to sell off all of the Plaintiffs assets prior to
arbitration result in irreparable harm, but clearly evidences
the balance of equities favors Gopher where the injunction
will prevent shutting down Gopher's business.
“[w]hen the reach of an injunction is narrow, limited
only to the parties, and has no impact on non-parties, the
public interest will be at most a neutral factor in the
analysis rather than one that favor[s] in [granting or]
denying the preliminary injunction.” Stormans, Inc.
v. Selecky, 586 F.3d 1109, 1138-39 (9th Cir. 2009)
(internal quotation marks omitted). Here, among other things,
there is a public interest in the enforcement of contracts