Court Rejects Sealing and TRO in EverQuest Lawsuit

From Daybreak Game Co. v. Takahashi, decided Wednesday by Judge Cynthia Bashant (S.D. Cal.):

Per the Complaint, Daybreak owns the intellectual property to EverQuest, including trademarks and copyrights associated with the EverQuest franchise. EverQuest is a “massively multiplayer online role-playing game” that has achieved a measure of commercial success. Daybreak alleges that Defendants Kristopher Takahashi and Alexander Taylor, as well as yet to be identified Defendants Does 1-20, collaborate to “create, develop, distribute, and promote an unauthorized and illegal EverQuest emulator called ‘The Heroes’ Journey’” (“THJ”). Defendants Takahashi and Taylor are the respective lead producer and developer of THJ and play primary roles in promoting it through interviews and communications in online forums such as Discord. By operating the emulator, Daybreak alleges that Defendants engage in “systematic and deliberate copyright and trademark infringement.” …

The court denied Daybreak’s attempt to seal the case:

Daybreak moves to temporarily seal this case in its entirety, asserting that sealing is necessary “to prevent Defendants from learning of the proceedings prior to the service of and execution of any temporary restraining order.” Accordingly, Daybreak requests that the Court seal the Complaint, the TRO Application, the Ex Parte Motion for Leave to Exceed Page Limits, and the Motion to Seal.

As an initial matter, the Court notes that both the Complaint and the TRO Application are more than tangentially related to the merits of this case. “A complaint is the document delineating what the merits of the case are.” And “[p]articularly relevant here, a motion for [temporary restraining order] frequently requires the court to address the merits of a case, which often includes the presentation of substantial evidence.” Thus, the “compelling reasons” standard applies.

Here, Daybreak’s assertions that Defendants “likely will destroy relevant documentary evidence and hide or transfer assets to foreign jurisdictions” are too speculative to overcome the strong presumption in favor of public access to judicial records. Absent concrete factual support, the Court would be required to “rely[ ] on hypothesis or conjecture” tojustify sealing the Complaint and TRO Application in this action. In support of its sealing request, Daybreak cites declarations from Nicholas B. Janda, counsel of record, and David Youssefi, Senior Vice President and General Counsel at Daybreak; however, these declarations merely reiterate the same conclusory assertions without providing specific, substantiated facts. Daybreak also cites the TRO Application itself, but it likewise offers nothing more than speculative predictions regarding Defendants’ hypothetical conduct if provided notice.

Moreover, Daybreak filed the Ex Parte Motion for Leave to Exceed Page Limits and the Motion to Seal under seal. Because these are non-dispositive, procedural motions that do not bear on the merits of the underlying claims, they fall below the threshold of “more than tangentially related to the merits of the case.” Accordingly, the good cause standard governs whether they may be sealed and requires a “particularized showing” that “specific prejudice or harm will result” if the information is disclosed. “Broad allegations of harm, unsubstantiated by specific examples or articulated reasoning” will not suffice.

Since Daybreak relies on the same assertions to justify its request to seal the entire action—namely, generalized concerns that Defendants may destroy evidence or transfer assets if made aware of the proceeding—it offers no separate or independent justification for sealing the Ex Parte Motion for Leave to Exceed Page Limits or the Motion to Seal. As discussed above, these assertions lack concrete factual support and are too conclusory to satisfy the “compelling reasons” standard. They likewise fail to satisfy the less stringent good cause standard applicable here, as they do not provide a particularized showing of specific harm or prejudice that would result from public disclosure of the materials sought to be sealed.

And the court denied the TRO:

As previously discussed, Plaintiff offers only speculation regarding the potential destruction of evidence or transfer of assets if Defendants are provided notice. This conclusory approach is exactly what the Ninth Circuit found insufficient as the basis of an ex parte order….

Here, the TRO Application contains no allegation—let alone evidence—that Defendants have a history of destroying evidence or disobeying court orders. In Plaintiff’s Certificate Regarding Notice, counsel asserts that “[a]lthough Defendants Takahashi and Taylor have been identified, no notice has been provided because … [inter alia] … Defendants have demonstrated their intent to evade legal accountability by operating under pseudonyms despite conducting a large-scale commercial operation.”

Even assuming the assertion is accurate, the Court remains unpersuaded that Defendants Takahashi, Taylor, and Does 1–20′s use of online pseudonyms in commercial activity—standing alone—establishes a likelihood that they will disregard court orders or destroy evidence, let alone demonstrates a history of such conduct. Daybreak has not presented any evidence that Defendants, or that persons similarly situated, have previously destroyed evidence or violated court orders.

The court did, however, allow the redaction of a few specific items:

Daybreak seeks to redact internal data, including engagement metrics—such as monthly and daily active user statistics—and internal financial analyses. Daybreak contends that, inter alia, disclosure of this information would impair its ability to manage communications with investors, partners, and users concerning the future of EverQuest. As discussed in the Court’s June 14, 2025 Order, such a request is subject to the “compelling reasons” standard, as it pertains to a motion that is more than tangentially related to the merits of the case.

In this instance, the Court finds that Daybreak has presented compelling, factually supported reasons for sealing, and that public disclosure of the identified information could harm its competitive standing. Moreover, the proposed redactions are narrowly tailored.

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