Securities and Exchange Commission v. Champion-Cain

Opinion

10 SECURITIES A` ND EXCHANGE Case No. 3:19-cv-01628-LAB-AHG COMMISSION, 11 ORDER: 12 Plaintiff, 1) DENYING MOTION TO 13 v. APPROVE ADAMS SETTLEMENT [Dkt. 628] 14 GINA CHAMPION-CAIN and ANI 15 DEVELOPMENT, LLC, 2) GRANTING MOTION FOR LEAVE TO FILE JOINDER IN 16 Defendants, RECEIVER’S MOTION [Dkt. 642] 18 INVESTMENTS, INC., 3) GRANTING MOTION FOR LEAVE TO FILE JOINDER IN 19 Relief Defendant. RECEIVER’S REPLY [Dkt. 656] 20 21 Court-appointed Receiver, Krista L. Freitag (the “Receiver”) filed a 22 Motion for Approval seeking approval of a settlement between, on the one 23 hand, Defendant ANI Development, LLC, Relief Defendant American National 24 Investments, Inc., and their subsidiaries and affiliates, and on the other, 25 William Adams, William Adams, APC, and Norton Moore & Adams LLP 26 (collectively, the “Adams Parties”). (Dkt. 628). The Receivership Entities were 27 part of a scheme whereby Defendant Gina Champion-Cain fraudulently raised 1 allegedly conspired with Champion-Cain, lending the scheme his credibility as 2 an attorney in exchange for payment. (See Dkt. 650-3, Ex. B at 6). 3 The settlement hinges on the Court’s entry of a bar order providing that 4 “all Persons and Entities are forever enjoined and barred from [pursuing 5 claims] against any of the Adams Parties or [their] Insurer [Greenwich 6 Insurance Company (“Greenwich”)] . . . related to or involving any of the facts 7 and matters described” in this action. Non-parties Chicago Title Company and 8 Chicago Title Insurance Company object to the proposed bar order and 9 oppose the Motion for Approval, arguing that such an order would preclude 10 too broad a category of claims against Greenwich. 11 The Court agrees with the Non-parties’ arguments. The requested bar 12 is too broad and, as such, is unjustified. The Court won’t approve a settlement 13 barring claims against Greenwich relating to the facts and matters described 14 in this action unless the bar is limited to claims related to Adams’ conduct 15 only.1 See In re U.S. Oil and Gas Litig., 967 F.2d 489, 496 (11th Cir. 1992) 16 (“The propriety of the settlement bar order should turn upon the 17 / / / 18 / / / 19 / / / 20 / / / 21 / / / 22

1 The parties disagree over whether the Court can issue a bar order at all 23 without first ensuring that a proportionate share offset rule is applied to any 24 judgments against non-settling defendants, but the only case any party cites on that point is Renfrew v. Toms, 109 Fed. Appx. 143, 146 (9th Cir. 2004). 25 The Court can’t rely on unpublished Ninth Circuit cases predating January 1, 2007. Circuit Rule 36-3. If the Receiver and Adams renew their motion and 26 seek a bar order, they should be prepared to fully brief the propriety of such 27 an order where cases against non-settling defendants are proceeding in other venues in which the applicable offset rule is beyond the Court’s control. 1 |interrelatedness of the claims it precludes.”). 2 The Motion is DENIED. The Adams parties’ related motions to join in 3 | the Receiver’s Motion and Reply are GRANTED. (Dkt. 642; Dkt. 656). 5 | Dated: March 18, 2022 lau At 6 Hon. Larry A. Burns 7 United States District Judge 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28