Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_20-cv-02102/USCOURTS-cand-3_20-cv-02102-0/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Breach of Contract

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

CCSAC, INC., et al.,

Plaintiffs,

v.

PACIFIC BANKING CORP, et al.,

Defendants.

Case No. 20-cv-02102-JD 

ORDER GRANTING EX PARTE 

TEMPORARY RESTRAINING ORDER

AND SETTING PRELIMINARY 

INJUNCTION HEARING

Re: Dkt. No. 12

Plaintiffs CCSAC, Inc. and CANN Distributors, Inc. have filed a complaint and an ex parte 

motion for a temporary restraining order (“TRO”) against defendants Pacific Banking Corp. 

(“PBC”), Justin Costello and GRN Funds, LLC. Dkt. Nos. 1, 12.

Plaintiffs state that they deposited in excess of $2.8 million with PBC pursuant to Capital 

Management Agreements. Dkt. No. 1 ¶¶ 2-4. They allege that PBC has “failed to execute the 

financial transactions required of it by the Agreements and by the directions of plaintiffs,” and has 

instead “unilaterally transferred some or all of plaintiffs’ funds to accounts held by GRN Funds, 

LLC (‘GRN’), an entity controlled by its chief executive officer, Costello.” Id. ¶¶ 5-6. Plaintiffs 

have sued defendants for breach of contract, fraud, negligence, injunctive relief and declaratory 

relief regarding indemnification. Id. ¶¶ 34-71. They seek to preserve the cash deposits pending 

resolution of these claims. 

Under Federal Rule of Civil Procedure 65(b), a court may issue an ex parte TRO if: (1) it 

clearly appears that immediate and irreparable injury, loss, or damage will result to the movant 

before the adverse party can be heard in opposition; and (2) the movant’s attorney certifies to the 

court in writing any efforts made to give notice and the reasons why it should not be required. 

Fed. R. Civ. Pro. 65(b); Reno Air Racing Ass’n v. McCord, 452 F.3d 1126, 1130-31 (9th Cir.

2006). Notice may be excused when “a known party cannot be located in time for a hearing.” 

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United States District Court

Northern District of California

McCord, 452 F.3d at 1131. Temporary restraining orders granted ex parte are to be “restricted to 

serving their underlying purpose of preserving the status quo and preventing irreparable harm just 

so long as is necessary to hold a hearing, and no longer.” Granny Goose Foods, Inc. v. 

Brotherhood of Teamsters, 415 U.S. 423, 438-39 (1974); McCord, 452 F.3d at 1131.

The facts adduced in plaintiffs’ affidavits demonstrate a threat of immediate and 

irreparable injury, as required by Rule 65(b)(1)(A). See Dkt. No. 12-3 (Declaration of John Oram, 

CEO of CANN Distributors and CCSAC); 12-4 (Declaration of Ed Ng, CFO of CANN and 

CCSAC). The declarations lay out in detail the factual basis of the concern that PBC may 

immediately “divert [plaintiffs’] remaining $2.8 million to other accounts, companies or 

individuals.” Dkt. No. 12-3 ¶ 13; Dkt. No. 12-4 ¶ 16. Plaintiffs’ attorney has also certified in 

writing the multiple attempts made to give notice of the TRO application, and established that 

defendants could not be located in time for a hearing. Dkt. No. 12-2 (Declaration of Steven M. 

Morger).

Consequently, upon receiving actual notice of this order by personal service or otherwise, 

defendants and their officers, agents, servants, employees and attorneys, and any other persons in 

active concert or participation with them, are prohibited and enjoined from:

1. Using, drawing down, transferring or in any way reducing the funds deposited with 

PBC by CCSAC, Inc. or CANN Distributors, Inc. without their express consent; and

2. Deleting, destroying, editing, or in any way altering any records relating to plaintiffs’ 

deposits, including without limitation all transaction and deposit balance records.

Given the nature of the case and the relief ordered, a bond need not be posted under 

Federal Rule of Civil Procedure 65(c). See Jorgensen v. Cassiday, 320 F.3d 906, 919-20 (9th Cir. 

2003); Barahona-Gomez v. Reno, 167 F.3d 1228, 1237 (9th Cir. 1999).

This order was issued at 12:00 p.m., California time, on April 8, 2020, and will expire on 

April 22, 2020. A preliminary injunction hearing is set for April 22, 2020, at 1 p.m. The hearing 

will proceed telephonically pursuant to instructions the Court will provide in advance of the 

hearing. Plaintiffs are directed to file a preliminary injunction motion by April 13, 2020, and to 

continue all reasonable efforts to serve defendants with the complaint, associated filings, this 

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United States District Court

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order, and the preliminary injunction motion. Pursuant to Rule 65(b)(4), defendants may apply to 

the Court for modification or dissolution of this order upon two days’ notice to plaintiffs.

IT IS SO ORDERED.

Dated: April 8, 2020

JAMES DONATO

United States District Judge

Case 3:20-cv-02102-JD Document 13 Filed 04/08/20 Page 3 of 3