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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

SECURITIES AND EXCHANGE 

COMMISSION,

Plaintiff,

v.

SAN FRANCISCO REGIONAL CENTER 

LLC, et al.,

Defendants.

Case No. 17-cv-00223-RS 

TEMPORARY PROTECTIVE ORDER

The Receiver recently moved under federal equity principles for a temporary restraining 

order and order to show cause re issuance of a preliminary injunction against former Relief 

Defendant Berkeley Healthcare Dynamics, LLC (“BHD”). That motion sought an “asset 

freeze,”—more specifically an order precluding BHD from encumbering or disposing of the net 

proceeds from a pending sale of certain real property that has been referred to in this litigation as 

“the 20th Street Warehouse,” or just “the Warehouse.” 

The motion was denied on grounds that such equitable relief is not available in 

circumstances where the moving party does not have some form of equitable interest in the assets 

subject to the requested freeze. The Receiver now moves instead for a right to attach order and 

writ of attachment under California state law, a remedy which is generally available in federal 

actions by virtue of Rule 64 of the Federal Rules of Civil Procedure (“At the commencement of 

and throughout an action, every remedy is available that, under the law of the state where the court 

is located, provides for seizing a person or property to secure satisfaction of the potential 
CASE NO. 17-cv-00223-RS

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judgment.”)

Although the Receiver has appropriately given notice of this application such that it is not 

“ex parte” in the strict sense, she seeks relief under California Code of Civil Procedure § 485.010

which governs what are popularly referred to as “ex parte writs of attachment.” Under that section 

the moving party must show, among other things, that “great or irreparable injury would result to 

the plaintiff if issuance of the order were delayed until the matter could be heard on notice.”

Alternatively, the Receiver seeks a temporary protective order under § 486.030, which provides 

such an order may issue in lieu of a right to attach order and writ of attachment if, in its discretion,

the court finds that “the issuance of the temporary protective order instead of the right to attach 

order and writ would be in the interest of justice and equity to the parties.”

The urgency of the present situation is largely of the Receiver’s own making, as had she 

proceeded under Rule 64 and state attachment law in the first instance, several additional days 

would have been available to entertain opposition and to have the matter heard and decided. 

Nevertheless, at this juncture the Receiver has made an adequate showing that imposition of a 

temporary protective order is appropriate.

Under § 486.030 a temporary protective order may issue only on a finding that the moving 

party has otherwise satisfied the requirements for an “ex parte” right to attach order. While this 

order reflects a conclusion that the Receiver has cleared those hurdles, (just barely in some 

instances), it is without prejudice to a contrary conclusion when the matter has been fully briefed.

First, the Receiver’s showing that “great or irreparable injury” will result before the matter 

could be heard on notice rests solely on the inference that because BHD is connected to the 

financial improprieties that gave rise to this action, the individuals associated with it now are 

likely to engage in similar monetary legerdemain. It does not automatically follow, however, that 

even if the current owners of BHD had some role in the improprieties of the original scheme, they 

will engage in similar conduct with the Warehouse sales proceeds, when they are represented by 

counsel and under scrutiny. Nevertheless, “under the circumstances of the case” there is at least 

some basis to infer “there is a danger that the property sought to be attached would be concealed, 
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substantially impaired in value.” Cal. Civ. Proc. Code § 485.010. Because “great or irreparably

injury” is not a requirement for writs of attachment issued on notice, it will not be necessary to 

revisit this issue in subsequent briefing.

It will be necessary, however, to give further consideration to the showing of “probable 

validity of the claim,” and BHD is invited to address that issue in its response. Additionally, the 

parties should address whether the California prejudgment scheme can properly be imported 

through Rule 64 in this particular setting, where the parties are not in the usual plaintiff-defendant 

relationship. No complaint per se has been filed against BHD, other than the original complaint to 

which it was only a “relief” defendant, and which has been reduced to judgment as against BHD.

Other issues warranting further consideration include the amount to be secured under any 

right to attach order. The Receiver has requested a right to attach order in the amount of the net 

sales proceeds from the Warehouse sale. The dollar amount, however, should be pegged to the 

claim, not to the asset. It may be that the claim will be greater than the net sales proceeds, in which

case attachment of all the proceeds might be available, but the point remains that the dollar 

amount of the proceeds is not the relevant figure.

Finally, the parties should also address whether “the proceeds” represent an asset that is 

subject to attachment as “the proceeds,” or whether the Receiver will instead have to obtain writs 

of attachment against specific bank accounts or other more tangible assets.

Good cause appearing, it is hereby ordered:

(1) BHD, its officers, managers, agents, employees, successors, attorneys, and all those in 

active concert or participation with it, are hereby restrained from directly or indirectly transferring, 

encumbering or disposing of the net proceeds from the sale of the 20th Street Warehouse after 

payment of costs of sale and all recorded liens and encumbrances pending further order of the 

court. Pursuant to California Code of Civil Procedure sections 489.210 and 489.220, this restraint 

shall take effect upon the Receiver’s filing of an undertaking in the amount of $10,000.

(2) The Receiver’s motion shall now be deemed one for issuance of a right to attach order 

and writ of attachment on notice. BHD may file a response within one week of the date of this 
CASE NO. 17-cv-00223-RS

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order, and the Receiver may file a reply within three court days thereafter. The matter will then be 

taken under submission, or set for hearing, in the court’s discretion.

IT IS SO ORDERED.

Dated: August 27, 2019

______________________________________

RICHARD SEEBORG

United States District Judge