Millennium Funding, Inc. v. 1701 Management, LLC., 1:21-cv-20862

Background:

Copyright holders and trademark owner 42 sued LiquidVPN and individuals (1701 Management LLC, AUH2O LLC, Muszynski, Gamache) alleging VPN service marketed to hide Popcorn Time piracy and facilitating widespread copyright infringement.
Plaintiffs contend defendants use shell companies, aliases, and foreign entities (Orchid crypto, PayPal) to receive proceeds and conceal identity; seek to treat entities as alter egos for liability and asset restraint.
Plaintiffs filed a First Amended Complaint asserting copyright, contributory and vicarious infringement, DMCA, Lanham Act, unfair competition, unjust enrichment, and sought injunctive relief and damages.
Plaintiffs moved ex parte for a TRO to freeze PayPal/Orchid/related U.S. financial accounts, lock liquidvpn.com domain, convert TRO to preliminary injunction, and get expedited discovery from PayPal and Orchid.
The Motion was filed without giving defendants notice; plaintiffs relied on counsel’s affidavit asserting dissipation risk but had delayed months after earlier notice and initial complaint before seeking emergency relief.
The Court denied the ex parte Motion, finding plaintiffs failed to comply with Rule 65(b)(1) (no adequate justification for proceeding without notice) and failed to prove imminent, irreparable harm given the delay.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether ex parte TRO without notice is justified under Fed. R. Civ. P. 65(b)(1)	Notice would cause defendants to transfer funds/domain and frustrate relief; past concealment and evasive tactics show necessity	Plaintiffs did not show notice was impossible or that giving notice would render relief futile; no attempt to notify	Denied — plaintiffs failed to satisfy Rule 65(b)(1); no adequate justification for proceeding ex parte
Whether plaintiffs showed immediate, irreparable harm to justify asset freeze	Freezing accounts/domains necessary to prevent dissipation of ill-gotten gains and preserve status quo	Alleged dissipation was speculative; plaintiffs delayed seeking emergency relief despite earlier notice to defendants	Denied — plaintiffs did not demonstrate actual and imminent irreparable harm; delay undermined claim
Whether an asset freeze is proper absent established equitable interest	Plaintiffs claim proceeds of infringement and seek freeze to preserve recovery	Court notes asset freezes require claim and establishment of equitable interest and are drastic remedies	Not reached on merits because TRO denied for procedural and irreparable-harm failures; asset-freeze standards highlighted (Grupo Mexicano)
Whether expedited third-party discovery (PayPal/Orchid) should be allowed	Limited discovery needed to locate funds/accounts and quantify profits	Discovery request tied to ex parte relief and was premature given lack of TRO and notice failures	Denied as part of the ex parte motion; discovery not authorized in absence of TRO

Key Cases Cited

Tefel v. Reno, 180 F.3d 1286 (11th Cir. 1999) (factors for preliminary injunction/TRO)
Siegel v. Lepore, 234 F.3d 1163 (11th Cir. 2000) (injury must be actual and imminent for TRO)
Grupo Mexicano de Desarrollo, S.A. v. Alliance Bond Fund, Inc., 527 U.S. 308 (1999) (asset freezes require established equitable interest)
Granny Goose Foods, Inc. v. Brotherhood of Teamsters, 415 U.S. 423 (1974) (ex parte TROs are extraordinary and limited to preserving status quo)
Wreal, LLC v. Amazon.com, Inc., 840 F.3d 1244 (11th Cir. 2016) (delay undermines finding of irreparable harm)
Sampson v. Murray, 415 U.S. 61 (1974) (irreparable harm and inadequacy of legal remedies underpin injunctive relief)
Schiavo ex rel. Schindler v. Schiavo, 403 F.3d 1223 (11th Cir. 2005) (same four-factor framework for injunctions)