Securities and Exchange Commission v. Champion-Cain

Opinion

1 2 3 4 5 6 7 10 SECURITIES AND EXCHANGE Case No. 3:19-cv-01628-LAB-AHG 12 ORDER: Plaintiff, 13 1) VACATING STATUS v. CONFERENCE; 14 GINA CHAMPION-CAIN and ANI 2) DENYING NON-PARTY 15 DEVELOPMENT, LLC, CALPRIVATE BANK’S EX 16 PARTE APPLICATION FOR Defendants, LEAVE TO APPEAR AS MOOT 17 [Dkt. 786]; and AMERICAN NATIONAL 18 INVESTMENTS, INC., 3) DIRECTING RECEIVER TO Relief Defendant. 20

22 The Court set a status conference in this matter for May 23, 2022 for 23 the purpose of permitting the Receiver, Chicago Title Company, and Chicago 24 Title Insurance Company (together with Chicago Title Company, “Chicago 25 Title) to inform the Court of the status of the remaining disputes in this action 26 and related actions. Non-party CalPrivate Bank then filed an ex parte 27 application for leave to appear and be heard at that conference and to file a 1 between the Receiver and Chicago Title [that] would severely impact 2 CalPrivate.” (Dkt. 786 at 2). The Receiver and Chicago Title oppose that 3 motion, acknowledging that, no later than May 23, 2022, they intend to move 4 jointly for approval of a “Global Settlement” that, if approved, would resolve all 5 remaining state court litigation related to the fraudulent scheme that forms the 6 core of this action. They state, too, that they intend to seek a bar order 7 enjoining certain interested parties from pursuing state court actions against 8 Chicago Title in connection with that scheme. The Receiver further states that 9 she intends to file a motion for approval of claims, resolution of disputed 10 claims, and approval of a distribution plan no later than May 31, 2022. 11 This briefing has obviated the need for a status conference, so the May 12 23, 2022 status conference is VACATED, and CalPrivate’s motion seeking to 13 appear at and submit a statement in connection with that hearing is DENIED 15 Both the Receiver and Chicago Title have previously relied on Zacarias 16 v. Stanford Int’l Bank, Ltd., 945 F.3d 883 (5th Cir. 2019), in support of the 17 proposition that the Court has authority to bar non-parties’ claims against an 18 alleged non-party tortfeasor in order to facilitate that alleged tortfeasor’s 19 settlement with entities in receivership. (See Dkt. 706 at 7 n.3; Dkt. 377 at 17). 20 In that case, the Fifth Circuit Court of Appeals approved a bar order based in 21 part on a determination that the trial court had “afforded the [objectors] all the 22 process due: notice and opportunity to be heard on the proposed settlement 23 and bar orders.” Id. at 903. Notice consistent with due process must be 24 “reasonably calculated, under all the circumstances, to apprise interested 25 parties of the pendency of the action and afford them an opportunity to present 26 their objections . . . and it must afford a reasonable time for those interested 27 to make their appearance.” Mullane v. Central Hanover Bank & Trust Co., 339 1 To ensure proper notice, the trial court in Zacarias required the receiver 2 | to propose a plan to give adequate notice to potential objectors. See Zacarias |v. Willis Group Holdings Public Co. Ltd., 2017 WL 6442190 at *2 (N.D. Tex. 2017).' And to provide ample time to appear, the court scheduled the hearing 5 the bar order motion for a date three months after it approved the notice 6 | procedures. /d. Following the lead of that case, and to ensure that the due 7 | process rights of any potential objectors are protected, the Court ORDERS: 8 1) The Receiver and Chicago Title may file a joint motion for approval 9 of a settlement agreement and bar order, and the Receiver may file 10 a motion for approval of claims and approval of a distribution plan 11 (together, the “Motions”), without securing a hearing date; 12 2) The Receiver must propose a plan to provide notice “reasonably 13 calculated under all the circumstances to apprise interested parties 14 of the pendency of the [motions] and afford them an opportunity to 15 present their objections” no later than May 26, 2022; 16 3) The Court intends to set a hearing date and a deadline for objections 17 to the Motions upon issuing an order approving a notice plan. Absent 18 a showing that an earlier date is consistent with due process, the 19 Court intends to set that hearing for a date no sooner than 90 days 20 after such an order. 22 | Dated: May 18, 2022 (auf At Zul 23 Hon. Larry A. Burns United States District Judge 25 26 97 | ' Acopy of the order describing the notice plan deemed reasonable under the circumstances of that case—which may differ materially from the 28 | circumstances in this case—is attached as Exhibit 1.