SingularDTV GmbH v. LeBeau

Background

The court had previously granted SingularDTV GmbH’s request for a temporary restraining order and entered a consent order requiring Zachary LeBeau and Kimberly Jackson to transfer cryptocurrency held in a cold wallet, along with physical possession of the device storing the wallet and related charging devices, authorizations, log-in information, and passwords, to an escrow agent. SingularDTV then moved for expedited discovery, asserting that the defendants were violating the consent order by continuing to possess a physical device associated with the cold wallet.

SingularDTV requested immediate production of nonprivileged documents responsive to specified requests and asked that LeBeau sit for a deposition within seven days after document production. LeBeau opposed the motion. The court noted that Jackson had not joined LeBeau’s opposition or filed her own opposition.

Legal standard

The court applied a flexible standard requiring reasonableness and good cause. It considered four factors: possible irreparable harm, some likelihood of success on the merits, a connection between expedited discovery and preventing that harm, and whether the harm without expedited discovery would be greater than the harm to the opposing party from complying.

Court’s analysis

The court found that a violation of the consent order could cause SingularDTV irreparable harm because the company’s assets could remain under another party’s control. It rejected the argument that the possibility of harm was eliminated merely because certain cryptocurrency had been transferred. LeBeau’s attorney asserted that no physical device existed and that LeBeau had provided the escrow agent with a paper key, but LeBeau himself had not submitted an affidavit supporting that assertion. The court also considered LeBeau’s earlier sworn statement that he had the wallet file on an offline hard drive.

The court concluded that SingularDTV had shown a likelihood of success on the merits relevant to the requested discovery. If discovery showed that the defendants had withheld a physical device in violation of the consent order, SingularDTV could likely pursue claims seeking return of the asset and could seek civil-contempt remedies.

The court held that the document requests in Exhibit A were appropriately limited to the immediate issue. It did not yet decide whether LeBeau’s deposition was needed because the documents might support his claim that no physical device existed. The court also found that the balance of potential harm favored expedited document production.

Disposition

The court granted in part and denied in part SingularDTV’s motion. It ordered the defendants to immediately produce all nonprivileged documents responsive to the requests in Exhibit A. Within one week after document production was completed, the parties had to meet and confer about whether LeBeau’s deposition was necessary. If they could not agree, SingularDTV had to inform the court whether it was renewing its request for an expedited deposition, after which the court would set a schedule for the defendants’ response. The request for a deposition was denied without prejudice to being raised again under those circumstances. The clerk was directed to close the motion.