Securities and Exchange Commission v. Champion-Cain
- Proceeding
- district
- Area
- civil
- On appeal
- Ussec v. Chicago Title Company (2025-02-20) — affirmed; Ussec v. Chicago Title Company (2025-04-28) — affirmed — the Ninth Circuit's later ruling on this docket
- Panel
- Larry Alan Burns (author)
Analysis
The Receiver moved for approval of a settlement with the Adams Parties that included a bar order enjoining all persons from pursuing claims against the Adams Parties and their insurer, Greenwich, related to the facts of the action. The Court denied the motion to approve the settlement because the proposed bar order was too broad, but granted the Adams Parties' motions for leave to file joinder documents.
| What the court decided | The model |
|---|---|
Denial of the Receiver's Motion for Approval of Settlement“The Motion is DENIED.” | agree with court The court correctly identified that a bar order extending to an insurer (Greenwich) for all claims related to the 'facts and matters described' in the action was overbroad, particularly given the objections from non-parties (Chicago Title) and the lack of a limitation to the specific conduct of the settling party (Adams). The court's requirement that any future bar order be limited to claims related to Adams' conduct only is a reasonable application of the principle that bar orders should be tailored to the interrelatedness of claims and the conduct of the settling parties. |
Granting of the Adams Parties' Motion for Leave to File Joinder in Receiver's Motion“The Adams parties’ related motions to join in the Receiver’s Motion and Reply are GRANTED. (Dkt. 642; Dkt. 656).” | agree with court Granting leave to file joinder documents is a procedural matter within the court's discretion. Since the Adams Parties are directly affected by the settlement and the bar order, allowing them to join the motion to present their position is procedurally appropriate. |
The order itself: sound — The order is concise but logically sound. It addresses the core objection (overbreadth of the bar order regarding the insurer) and cites a relevant circuit court case (11th Cir.) to support the standard of 'interrelatedness.' It also correctly identifies a procedural barrier to relying on a specific unpublished 9th Circuit case, demonstrating awareness of local rules. The reasoning directly answers the motion by explaining why the specific relief requested (the broad bar order) is unjustified.
How this analysis was made · dispute it
unusual dispositionOpinion
8 UNITED STATES DISTRICT COURT
9 SOUTHERN DISTRICT OF CALIFORNIA
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] 17 AMERICAN NATIONAL 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). 4 IT IS SO ORDERED. 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