Case 2:18-cv-00525-RSL Document 482 Filed 08/09/22 Page 1 of 10
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`The Honorable Robert S. Lasnik
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`UNITED STATES DISTRICT COURT
`WESTERN DISTRICT OF WASHINGTON
`AT SEATTLE
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`ADRIENNE BENSON and MARY
`SIMONSON, individually and on behalf of all
`others similarly situated,
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`Plaintiffs,
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`v.
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`DOUBLEDOWN INTERACTIVE, LLC, a
`Washington limited liability company,
`INTERNATIONAL GAME TECHNOLOGY,
`a Nevada corporation, and IGT, a Nevada
`corporation,
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` Defendants.
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`Case No. 18-cv-00525-RSL
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`PLAINTIFFS’ MOTION FOR
`TEMPORARY RESTRAINING
`ORDER
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`ORAL ARGUMENT REQUESTED
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`NOTING DATE: August 9, 2022
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`PLS.’ MOTION FOR TRO
`CASE NO. 18-CV-525-RSL
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`EDELSON PC
`350 N LaSalle Street, 14th Floor, Chicago, IL 60654
`Tel: 312 589 6370 • Fax: 312 589 6378
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`Case 2:18-cv-00525-RSL Document 482 Filed 08/09/22 Page 2 of 10
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`INTRODUCTION AND FACTUAL BACKGROUND
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`For years, DoubleDown has made incremental moves toward making itself judgment-
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`proof in this Court. Starting in 2018, it began terminating the bulk of its Seattle-based employees
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`(and permanently deleting their emails, to boot), and through the present day DoubleDown
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`continues to shift its workforce and its leadership abroad. More recently, DoubleDown began
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`liquidating on-hand cash: between the end of 2021 and the second quarter of 2022, for example,
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`DoubleDown’s balance sheet reflects a $67 million reduction of cash and equivalents.
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`Now, on the brink of class certification and a potential preliminary injunction,
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`DoubleDown upped the ante on its judgment-proofing efforts. Specifically, on July 21, under the
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`cover of a litigation stay demanded and obtained under the guise of an interest in mediating,
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`DoubleDown announced an “extraordinary meeting” of its shareholders, scheduled for August
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`25—the day before the Parties’ August 26 follow-up mediation session.1 During the
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`extraordinary meeting, DoubleDown intends to hold a vote on removing more than $50 million
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`of cash from its “capital reserve,” apparently to pay overseas investors a first-ever (and
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`“unanticipated”) dividend.2 In other words, while DoubleDown’s lawyers have represented that
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`DoubleDown “has mediated in good faith and intends to continue to do so,” Dkt. #480, and
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`while they ask the Court to refrain from making any rulings on pending motions, id.,
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`DoubleDown’s management appears to be stalling the litigation so that it can abscond with
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`money that is owed to the Class.
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`DoubleDown’s lawyers never disclosed the capital reduction plan to Plaintiffs. In fact,
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`DoubleDown’s lawyers stated in writing that—notwithstanding the August 26 mediation date—
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`DoubleDown’s management kept the lawyers completely in the dark about the August 25 capital
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`reduction vote.3 Yet when Plaintiffs’ counsel discovered it and offered DoubleDown’s lawyers a
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`1
`See Declaration of Todd Logan (“Logan Decl.”) ¶¶ 2-3; Ex. 1 (July 21 Form 6-K) at ECF-3. (As of the date
`of this filing, 70,000,000,000 KRW is worth approximately $53,759,755.00 USD.)
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`Logan Decl. ¶ 3; Ex. 1 at ECF-3; see also Logan Decl. ¶ 6, Ex. 4 (2021 Annual Report) at ECF-80
`(showing that two Korean entities own 87% of common shares); id. at ECF-30 (stating on April 4, 2022: “We
`currently do not intend to pay any dividends to holders of our common shares for the foreseeable future.”).
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`See Logan Decl. ¶ 4; Ex. 2 (Emails Between Counsel) at ECF-4, ECF-7.
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`PLS.’ MOTION FOR TRO
`CASE NO. 18-CV-525-RSL
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`EDELSON PC
`350 N LaSalle Street, 14th Floor, Chicago, IL 60654
`Tel: 312 589 6370 • Fax: 312 589 6378
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`Case 2:18-cv-00525-RSL Document 482 Filed 08/09/22 Page 3 of 10
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`chance to explain, they quickly adopted the company line: the capital reduction has “nothing to
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`do” with this lawsuit.4
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`That isn’t true. The Class’s out-of-pocket damages exceed $2 billion.5 DoubleDown’s
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`market capitalization currently hovers around $500 million, including about $175 million in cash
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`and equivalents, down from more than $242 million just three months before.6 Whether this case
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`resolves through a judgment, a class action settlement, or through bankruptcy, all of that $175
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`million in cash (and more of DoubleDown’s liquid assets, which DoubleDown has zealously
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`been spending its cash on) must be returned to the Class. And DoubleDown knows this: in its
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`most recent annual report, it disclosed a loss contingency for this case exceeding $200 million.7
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`Consequently, an eleventh-hour handout of more than $50 million in cash from DoubleDown’s
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`(limited) treasury—likely to its investors—absolutely has something to do with this lawsuit; it is
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`an outright robbery of the Class’s likely recovery.
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`When Plaintiffs’ counsel explained this, DoubleDown’s lawyers retreated to the position
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`that the capital reduction vote has “nothing to do” with this case because the vote is being
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`conducted by DoubleDown Interactive Co. Ltd. (“DDI-Korea”), a different entity than the
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`DoubleDown Interactive, LLC (“DDI-US”) that is the named defendant in this lawsuit.8 That is
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`outrageous. DDI-Korea is DoubleDown’s parent company, and its only business is owning and
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`operating DoubleDown’s apps (ultimately, through DDI-US).9 All financial activity associated
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`with the DoubleDown social casino apps is routed up through DDI-Korea’s books, and DDI-
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`Korea holds the DoubleDown assets that must be used to fund a settlement or judgment in this
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`Id. at ECF-7 (“We inquired on this and have been told that the securities filing has nothing to do with our
`case. We were not aware of it, which is not surprising given that fact.”).
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`See, e.g., Logan Decl. ¶ 6; Ex. 4 (2021 Annual Report) at ECF-54, ECF-60.
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`See Logan Decl. ¶ 5; Ex. 3 (May 11 Form 6-K) at ECF-7.
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`See Logan Decl. ¶ 6; Ex. 4 (2021 Annual Report) at ECF-13.
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`See Logan Decl. ¶ 4; Ex. 2 (Emails Between Counsel) at ECF-11 (“Our statement below was based on the
`fact that Double Down Interactive Co., Ltd. (which I take to be the ‘DDI’ you are referencing) is a Korean entity and
`is not a defendant in this pending litigation. What that DDI chooses to do is not germane to this litigation.”)
`(emphasis added).
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`See Logan Decl. ¶ 7; Ex. 5 (Registration Statement) at ECF-86 (Technically, DDI-Korea is the 100% owner
`of a Delaware LLC named “DoubleUDiamond LLC,” which is in turn the 100% owner of DDI-US.).
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`PLS.’ MOTION FOR TRO
`CASE NO. 18-CV-525-RSL
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`EDELSON PC
`350 N LaSalle Street, 14th Floor, Chicago, IL 60654
`Tel: 312 589 6370 • Fax: 312 589 6378
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`Case 2:18-cv-00525-RSL Document 482 Filed 08/09/22 Page 4 of 10
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`case.10 Indeed it is DDI-Korea that has repeatedly disclosed to its shareholders that “[w]e have
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`incurred and expect to continue to incur significant expense defending the Benson lawsuit” and
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`that “[t]he resolution of the Benson lawsuit . . . could have a material adverse effect on our
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`operating results and financial condition.”11 That renders absurd DoubleDown’s lawyers’
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`argument that the capital reduction has “nothing to do” with this lawsuit because the shareholder
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`vote is being conducted by DDI-Korea. And while Plaintiffs do not (yet) ask the Court to
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`exercise jurisdiction over or enjoin DDI-Korea, there is no serious question that the Court could:
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`DDI-Korea acts through its director Joe Sigrist, here in this District, at its office on Fifth Avenue.
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`As just one example, Mr. Sigrist signed DDI-Korea’s recent Form 6-K announcing the capital
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`reduction plan, listing the Seattle office as his contact address, and attaching a DDI-Korea press
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`release emanating from “Seattle, Washington.”12 DDI-Korea also undoubtedly acts in “active
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`concert” with DDI-US (its wholly owned subsidiary), with the officers shared between the two
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`entities (including Sigrist), and with the attorneys shared between the two entities. See Fed. R.
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`Civ. P. 65(d)(2)(C) (authorizing injunctive relief against non-parties)
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`Fortunately, Washington law provides a remedy for DoubleDown’s chicanery.
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`RCW 7.40.020 provides that the Court may enter appropriate injunctive relief when either of the
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`following conditions is present: (i) “when during the litigation, it appears that the defendant is
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`doing, or threatened, or is about to do, or is procuring, or is suffering some act to be done in
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`violation of the plaintiff's rights respecting the subject of the action tending to render the
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`judgment ineffectual,” or (ii) “where it appears . . . by affidavit, that the defendant threatens, or is
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`about to remove or dispose of his or her property with intent to defraud his or her creditors, a
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`temporary injunction may be granted to restrain the removal or disposition of his or her
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`property.” More plainly, when there is reason to believe a defendant is trying to make itself
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`judgment proof, Washington law provides the Court injunctive powers to preserve the status quo.
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`See generally id.
`Logan Decl. ¶ 6; Ex. 4 (2021 Annual Report) at ECF-12 (emphasis added)
`Logan Decl. ¶ 2; Ex. 1 at ECF-2-3.
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`PLS.’ MOTION FOR TRO
`CASE NO. 18-CV-525-RSL
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`EDELSON PC
`350 N LaSalle Street, 14th Floor, Chicago, IL 60654
`Tel: 312 589 6370 • Fax: 312 589 6378
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`Case 2:18-cv-00525-RSL Document 482 Filed 08/09/22 Page 5 of 10
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`The Court should exercise those powers here. First, the Court should compel Joe Sigrist,
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`who resides in this District and is both the General Manager of DDI-US and the CFO of DDI-
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`Korea,13 to attend the hearing on this Motion for Temporary Restraining Order. Second, at that
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`hearing, the Court should order Mr. Sigrist to exercise all available powers to ensure that the
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`August 25 capital reduction vote does not move forward, and more broadly to ensure that no
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`DoubleDown entity makes any extraordinary expenditures of cash pending further order of the
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`Court.14 Finally, the Court should enjoin DDI-US from making any transfers to or from its bank
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`accounts, including the bank accounts Leslie Keddie testified to,15 other than for the purpose of
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`funding routine day-to-day operations of the DoubleDown apps.16 All of this relief can be
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`revisited again upon Plaintiffs’ forthcoming motion for a preliminary injunction, at which time
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`Plaintiffs intend to request that the Court enter a preliminary injunction preventing any
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`dissipation of DoubleDown’s assets through the final resolution of this litigation.
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`LEGAL STANARD
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`This Court, sitting in diversity, may issue temporary injunctive relief to preserve the status
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`quo when it appears that a defendant is taking steps to make itself judgment proof. See
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`RCW 7.40.020; see also Sims Snowboards, Inc. v. Kelly, 863 F.2d 643, 646 (9th Cir. 1988) (state
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`law controls whether injunctive relief is appropriate); Fed. R. Civ. P. 64 (state law remedies “to
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`secure satisfaction of the potential judgment” are available in federal court absent a statute to the
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`contrary).
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`See Logan Decl. ¶ 7; Ex. 5 (Registration Statement) at ECF-106.
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`See, e.g., Erkan v. New England Compounding Pharmacy Inc., No. 12-cv-12052, 2012 WL 5896530, at *3
`(D. Mass. Nov. 21, 2012) (finding it appropriate to impose a “limited restraint of assets . . . to prevent any
`extraordinary transfer of cash out of the company to avoid future judgments” and enjoining defendant “from issuing
`any dividends to its stockholders, paying any officer or employee bonuses not awarded in the ordinary course of
`business prior to the date of this order, or making any extraordinary transfer of cash or assets, other than in the
`ordinary course of business, pending further order of the Court.”).
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`See Dkt. #298-2 (Ex. 4, Deposition of Leslie Keddie) at ECF 63-66.
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`See, e.g., IRIS Mgmt. Grp., LLC v. Malan, 329 F. App’x 112, 113-14 (9th Cir. 2009) (upholding, in contract
`action concerning cosmetic surgery practice, injunction requiring defendant to place income beyond $25,000/month
`into escrow pending resolution of plaintiff’s claims).
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`PLS.’ MOTION FOR TRO
`CASE NO. 18-CV-525-RSL
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`EDELSON PC
`350 N LaSalle Street, 14th Floor, Chicago, IL 60654
`Tel: 312 589 6370 • Fax: 312 589 6378
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`Case 2:18-cv-00525-RSL Document 482 Filed 08/09/22 Page 6 of 10
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`The purpose of a TRO is “preserving the status quo and preventing irreparable harm just
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`so long as is necessary to hold a hearing [on the preliminary injunction application], and no
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`longer.” Granny Goose Foods, Inc. v. Brotherhood of Teamsters & Auto Truck Drivers, 415 U.S.
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`423, 439 (1974); see also Reno Air Racing Ass’n v. McCord, 452 F.3d 1126, 1130–31 (9th Cir.
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`2006). A plaintiff seeking preliminary injunctive relief—whether through a TRO or a
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`Preliminary Injunction—“must establish that he is likely to succeed on the merits, that he is
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`likely to suffer irreparable harm in the absence of preliminary relief, that the balance of equities
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`tips in his favor, and that an injunction is in the public interest.” Winter v. Nat. Res. Def.
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`Council, Inc., 555 U.S. 7, 374 (2008). The Court then “balance[s] the competing claims of injury
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`and consider[s] the effect of granting or withholding the requested relief, paying particular regard
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`to the public consequences.” Id. at 367.
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`The Ninth Circuit continues to apply one manifestation of the “sliding scale” approach to
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`injunctions in which “a stronger showing of irreparable harm to plaintiff might offset a lesser
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`showing of likelihood of success on the merits.” All. for the Wild Rockies v. Cottrell, 632 F.3d
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`1127, 1131 (9th Cir. 2011). “In other words, ‘serious questions going to the merits’ and a
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`hardship balance that tips sharply toward the plaintiff can support issuance of an injunction,
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`assuming the other two elements of the Winter test are also met.” Id. at 1131-32.
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`I.
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`Plaintiffs Are Likely to Succeed on the Merits.
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`ARGUMENT
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`To be entitled to a TRO, Plaintiffs must demonstrate a likelihood of success on the
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`merits. The Parties have previously briefed this issue at length, and Plaintiffs respectfully request
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`that the Court incorporate by reference that briefing here. See Dkt. #164 (Plaintiffs’ Motion for
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`Preliminary Injunction); Dkt. #281 (DoubleDown’s Opposition); Dkt. #298 (Plaintiffs’ Reply).
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`In brief: the last four years of orders from both this Court and the Ninth Circuit, along with the
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`evidence Plaintiffs have adduced in this case, establish Plaintiffs have, at a minimum, a
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`likelihood of success on the merits of their claims here.
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`PLS.’ MOTION FOR TRO
`CASE NO. 18-CV-525-RSL
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`EDELSON PC
`350 N LaSalle Street, 14th Floor, Chicago, IL 60654
`Tel: 312 589 6370 • Fax: 312 589 6378
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`Case 2:18-cv-00525-RSL Document 482 Filed 08/09/22 Page 7 of 10
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`Absent a TRO, Plaintiffs and Class Members Will Suffer Irreparable Harm Because
`DDI Will Permanently Dissipate Assets that Belong to the Class.
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`II.
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`DoubleDown will likely argue that injunctive relief is inappropriate because the only
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`harm claimed in this motion is economic loss, which typically is not an irreparable harm. But
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`“while it is true that preliminary relief is unnecessary when the plaintiff’s economic injury can be
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`remedied by a damage award,” preliminary injunctive relief is appropriate where, absent the
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`relief, “defendants may diminish their assets thereby rendering ineffective any subsequent
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`judgment in [plaintiffs’] favor.” Dargan v. Ingram, No. C08-1714, 2009 WL 1437564, at *3
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`(W.D. Wash. May 22, 2009) (Lasnik, J.).
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`That is the case here. The Class’s out-of-pocket damages exceed $2 billion, meaning a
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`verdict or contested judgment would be many multiples of DoubleDown’s market capitalization
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`(around $500 million), and a settlement in line with other social casino settlements recently
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`approved by the Court would require DoubleDown to contribute all of the cash it has on hand
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`(and more). Consequently, Plaintiffs are “likely to become entitled . . . upon final judgment” to
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`the $50 million DoubleDown is now trying to dissipate. Id. at *3. Further, because
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`DoubleDown’s lawyers have not denied that DoubleDown intends to use the $50 million to pay a
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`dividend or make some other extraordinary distribution, Plaintiffs “will probably be unable to
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`recover those funds” absent a TRO. Id. Moreover, any dividend DoubleDown issues will likely
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`be paid to foreign bank accounts, placing the money even further from this Court’s reach. Two
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`Korean-based entities own the vast majority of DDI-Korea’s common shares,17 so it is
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`reasonable to assume that the “reduction of capital reserve in the amount of KRW
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`70,000,000,000”18 will result in the transfer of money overseas.
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`These circumstances establish irreparable harm here. See Dargan, 2009 WL 1437564, at
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`*6 (finding irreparable harm where solely economic loss was threatened and granting preliminary
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`Logan Decl. ¶ 6; Ex. 4 (2021 Annual Report) at ECF-80 (showing that two Korean entities own 87% of
`common shares)
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`Logan Decl. ¶ 2; Ex. 1 at ECF-4.
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`PLS.’ MOTION FOR TRO
`CASE NO. 18-CV-525-RSL
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`EDELSON PC
`350 N LaSalle Street, 14th Floor, Chicago, IL 60654
`Tel: 312 589 6370 • Fax: 312 589 6378
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`Case 2:18-cv-00525-RSL Document 482 Filed 08/09/22 Page 8 of 10
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`injunctive relief “to prevent the consumption, dissipation, or fraudulent conveyance” of the
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`defendant’s assets); see also Panyanouvong v. Aphay, No. 2:14-CV-00275 RSM, 2014 WL
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`2986507, at *6 (W.D. Wash. July 1, 2014) (granting preliminary injunctive relief where defendant
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`had demonstrated “substantial disrespect for the authority of the Court” and the defendant’s “own
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`conduct establishes that is likely that in the absence of [injunctive relief], Plaintiffs [would] not be
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`able to recover the funds”).
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`III. The Balance of Equities and Public Interest Favor Plaintiffs.
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`The final two factors, the balance of equities and the public interest, favor Plaintiffs.
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`In weighing equities, “the Court considers each party’s claimed injury, as well as the effect that
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`granting or denying Plaintiff’s motion would have on the parties.” Quinault Indian Nation v.
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`Kempthorne, 09-cv-5064 RBL, 2009 WL 734682, at *3 (W.D. Wash. Mar. 18, 2009). Issuance
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`of this TRO would have very little practical effect on DoubleDown. DoubleDown would simply
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`be prevented, on a temporary basis, from an extraordinary dissipation of its assets.
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`For Plaintiffs and the proposed class, on the other hand, DoubleDown’s dissipation of
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`assets threatens disaster. DoubleDown already has limited means with which to pay a market-
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`rate settlement or contested judgment. Worse, DoubleDown has, over the years, been marching
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`itself toward a judgment-proof position, first by moving its key personnel and IP assets overseas
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`and—now—by starting the process of dissipating its assets. The Court should not permit
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`DoubleDown to maneuver itself out of this lawsuit, and there is a strong public interest in
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`ensuring that litigation judgments have consequences for the parties those judgments are entered
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`against.
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`IV.
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`The Court Should Not Require Plaintiffs to Post a Bond.
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`Finally, the Court should not require Plaintiffs to post a bond. See Jorgensen v. Cassiday,
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`320 F.3d 906, 919 (9th Cir. 2003) (Fed. R. Civ. P. 65 makes a bond discretionary). The Court
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`“may dispense with the filing of a bond when it concludes there is no realistic likelihood of harm
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`to the defendant from enjoining his or her conduct.” Id. Here, Plaintiffs’ requested relief would
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`PLS.’ MOTION FOR TRO
`CASE NO. 18-CV-525-RSL
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`EDELSON PC
`350 N LaSalle Street, 14th Floor, Chicago, IL 60654
`Tel: 312 589 6370 • Fax: 312 589 6378
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`Case 2:18-cv-00525-RSL Document 482 Filed 08/09/22 Page 9 of 10
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`do no more than temporarily bar DoubleDown from dissipating assets that likely belong to the
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`Class. That does not harm Defendant, and consequently the Court should exercise its discretion
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`not to order Plaintiffs to post a bond.
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`Should the Court require a bond, it should be in a nominal amount. Plaintiffs are unable
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`to post more than a nominal amount, at least in part due to the financial harm DoubleDown has
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`caused them. And denying Plaintiffs injunctive relief because DoubleDown’s actions have
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`prevented them from affording more than a nominal bond would be inequitable.
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`The Court should:
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`CONCLUSION
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`(1) Set a hearing on this motion at the earliest convenient time for the Court; (Plaintiffs’
`counsel note that (i) they are already scheduled to appear before the Court in person
`on Friday, August 12 for another matter (Reed v. Scientific Games), and (ii)
`DoubleDown’s Seattle-based Davis Wright Tremaine lawyers could easily attend a
`hearing on that day);
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`(2) Order Joe Sigrist to attend the hearing;
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`(3) At the hearing, order Joe Sigrist to employ all available measures and powers to
`ensure that (i) the August 25, 2022 capital reduction vote does not move forward, and
`(ii) no DoubleDown entity makes any extraordinary expenditures of cash pending
`further order of the Court;
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`(4) After the hearing, enter the attached [Proposed] Temporary Restraining Order;
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`(5) Enter a briefing schedule on Plaintiffs’ forthcoming preliminary injunction motion, to
`proceed after the entry of a Temporary Restraining Order preserving the status quo.
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`Dated: August 9, 2022
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`Respectfully submitted,
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`ADRIENNE BENSON and MARY SIMONSON
`individually and on behalf of all others similarly
`situated,
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`By: /s/ Todd Logan
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`Rafey S. Balabanian*
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`PLS.’ MOTION FOR TRO
`CASE NO. 18-CV-525-RSL
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`EDELSON PC
`350 N LaSalle Street, 14th Floor, Chicago, IL 60654
`Tel: 312 589 6370 • Fax: 312 589 6378
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`Case 2:18-cv-00525-RSL Document 482 Filed 08/09/22 Page 10 of 10
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`rbalabanian@edelson.com
`Todd Logan*
`tlogan@edelson.com
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`Brandt Silver-Korn*
`bsilverkorn@edelson.com
`EDELSON PC
`150 California Street, 18th Floor
`San Francisco, California 94111
`Tel: 415.212.9300/Fax: 415.373.9435
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`By: /s/ Alexander G. Tievsky
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`Jay Edelson*
`jedelson@edelson.com
`Alexander G. Tievsky, WSBA #57125
`atievsky@edelson.com
`Amy B. Hausmann*
`abhausmann@edelson.com
`EDELSON PC
`350 N LaSalle Street, 14th Floor
`Chicago, IL 60654
`Tel: 312.589.6370 / Fax: 312.589.6378
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`By: /s/ Cecily C. Jordan
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`Cecily C. Jordan, WSBA #50061
`cjordan@tousley.com
`TOUSLEY BRAIN STEPHENS PLLC
`1200 Fifth Avenue, Suite 1700
`Seattle, Washington 98101
`Tel: 206.682.5600
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`*Admitted pro hac vice
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`Attorneys for Plaintiffs and the Proposed Class
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`PLS.’ MOTION FOR TRO
`CASE NO. 18-CV-525-RSL
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`EDELSON PC
`350 N LaSalle Street, 14th Floor, Chicago, IL 60654
`Tel: 312 589 6370 • Fax: 312 589 6378
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