Optronic Technologies, Inc. v. Ningbo Sunny Electronic Co., Ltd.
- Edward Davila
- 5:16-cv-06370
- U.S. District Court · Northern District of California
- 5
In Optronic Technologies v. Ningbo Sunny, Judge Davila granted Orion’s temporary restraining order blocking certain transfers while Celestron completed subpoena production.
Orion, Celestron, Ningbo Sunny, and the companies whose accounts payable were covered by the order were affected. Celestron could not transfer the specified funds out of the United States until it fully complied with Orion’s subpoena and certified compliance.
What happened
In Optronic Technologies, Inc. v. Ningbo Sunny Electronic Co., Ltd., Orion sought information from third-party Celestron during post-judgment discovery. Orion had a $52,030,371.73 partial judgment against Ningbo Sunny and argued that Celestron had not fully answered its subpoena.
Celestron had produced some transaction information but had not produced requested communications or documents from a subsidiary. Celestron said it expected to complete production shortly and argued that the subpoena was too broad. The court found that Celestron had not timely objected to producing the subsidiary’s communications.
The court granted Orion’s temporary restraining order and barred Celestron from transferring certain funds out of the United States until it fully complied with the subpoena and certified compliance. Judge Davila also ordered Orion and Celestron to appear and explain why the temporary relief should not continue as a preliminary injunction.
The detailed version
- Optronic Technologies, Inc. v. Ningbo Sunny Electronic Co., Ltd. · No. 5:16-cv-06370
- Edward Davila
- June 9, 2021
Background
The court had entered an amended partial judgment against Ningbo Sunny in the amount of $52,030,371.73 for damages under sections 1 and 2 of the Sherman Act, section 7 of the Clayton Act, and the California Cartwright Act. The court later reopened the case for post-judgment discovery.
Orion served third-party Celestron with a subpoena under Federal Rule of Civil Procedure 45. The subpoena sought communications and transaction documents concerning telescope products involving Ningbo Sunny and several other listed companies. Celestron objected on the subpoena’s compliance date, made a partial production of transactional data, and said that its communications production would follow. Celestron later stated that it was reviewing thousands of communications and expected to produce them by June 11, 2021.
Orion filed an emergency motion for a temporary restraining order. It asked the court to prevent Celestron from transferring out of the United States funds associated with amounts payable to the companies listed in the subpoena until Celestron fully complied and certified compliance. Orion also asked for an order requiring Celestron to explain why the temporary order should continue.
Legal standard
The court applied the same standard used for a preliminary injunction. Orion had to show a likelihood of success on the merits, likely irreparable harm without immediate relief, a balance of equities favoring the order, and that the public interest supported it. A temporary restraining order is an extraordinary remedy requiring a clear showing that relief is warranted.
Court’s analysis
The court found that Orion was likely to succeed on its claim that Celestron had not complied with the subpoena. Celestron acknowledged that it had not produced the requested communications. The court also found that Celestron had waived its objection concerning its subsidiary’s communications because Celestron served its objections 16 days after the subpoena, rather than before the compliance deadline or within the required 14-day period. Celestron did not dispute that it had missed the production deadline and had not asked the court to modify it.
The court found likely irreparable harm because Orion could be unable to collect its judgment against Ningbo Sunny if Celestron was covertly purchasing products from Ningbo Sunny to help it evade the judgment. The court acknowledged that part of Orion’s theory was speculative, but relied on prior conduct it had found, including a $4.2 million payment from Celestron to Ningbo Sunny outside the ordinary course of business and an earlier temporary order concerning assets, products, and receivables associated with telescopes manufactured by Ningbo Sunny.
The court also found that the balance of equities and the public interest supported relief. Celestron argued that the requested order could prevent it from obtaining inventory and halt its business. The court concluded that this burden could last as little as two days, based on Celestron’s representation that it would soon complete production, while Orion faced a greater risk of irreparable harm. The court said that the public interest favored enforcing antitrust laws and court judgments.
Order
Because all four required factors favored relief, the court granted Orion’s motion for a temporary restraining order. Until the court finds that Celestron has fully complied with the subpoena and certified that compliance, Celestron is enjoined from transferring out of the United States funds associated with accounts payable to Ningbo Zhanjing, ViewWay, Jiangsu Stuttgart, Homeinside, Ningbo Heming, Nantong Schmidt Opto-Electrical Technology Co., Ltd., and Suzhou Synta Optical Technology Co., Ltd.
The court directed Orion and Celestron to appear on June 17, 2021, to show why the temporary relief should not continue as a preliminary injunction and whether additional or different relief should issue. They could file responses by June 14, 2021, at noon.
Read the full 5-page opinion on CourtListener, the free public archive maintained by the Free Law Project.