Ralph Janvey v. James Alguire ( 2013 )

Case: 11-10838 Document: 00512359436 Page: 1 Date Filed: 08/30/2013
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
August 30, 2013
No. 11-10838 Lyle W. Cayce
Clerk
RALPH S. JANVEY,
Plaintiff–Appellee,
v.
JAMES R. ALGUIRE; VICTORIA ANCTIL; TIFFANY ANGELLE; SYLVIA
AQUINO; JONATHAN BARRACK; ALAN BROOKSHIRE; JAMES C.
CHANDLEY; DAVID BRAXTON GAY; GREGORY C. GIBSON; JOHN
GREAR; JASON LIKENS; KALE OLSON; TIMOTHY D. ROGERS; NICK
SHERROD; SUSAN GLYNN; JOHN WHITFIELD WILKS; STEVE
SLEWITZKE; BRAD BRADHAM; NOLAN FARHY; VIRGIL HARRIS; LOUIS
SCHAUFELE; ERIC URENA; BIANCA FERNANDEZ; NANCY J.
HUGGINS, ET AL.,
Defendants–Appellants.
Appeals from the United States District Court
for the Northern District of Texas
USDC No. 3:09-CV-724
Before BENAVIDES, OWEN, and SOUTHWICK, Circuit Judges.
PER CURIAM:*
Ralph S. Janvey (the Receiver), acting in his capacity as receiver for
Stanford Group Company and related entities (the Stanford Entities), filed suit
*
Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR.
R. 47.5.4.
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against former employees (the Employee Defendants) of the Stanford Entities,
claiming that the Employee Defendants received fraudulent transfers in
violation of the Texas Uniform Fraudulent Transfer Act (TUFTA) and were
unjustly enriched at the expense of the creditors of the receivership estate. The
Employee Defendants moved to compel arbitration in the district court. The
district court denied the motions, holding that the Receiver brought the claims
on behalf of creditors of the Stanford Entities, rather than the Stanford Entities
themselves, and was therefore not bound by the arbitration agreements relied
upon by the Employee Defendants. We reverse the district court’s denial of the
motions to compel because a federal equity receiver may not pursue claims on
behalf of creditors.
The current action arises out of a suit by the Securities and Exchange
Commission (SEC) against R. Allen Stanford, his associates, and the Stanford
Entities, which alleged securities law violations in connection with a Ponzi
scheme perpetrated by Stanford. The extensive background facts of this
proceeding have been recounted by this court in previous decisions,1 and we
repeat only those facts that are relevant to this appeal.
During the course of the SEC suit, the district court appointed the
Receiver and authorized him to commence any actions necessary to recover
receivership assets. Acting in this capacity, the Receiver filed the present action
and named hundreds of defendants, including the Employee Defendants. In
response, the Employee Defendants filed motions to compel arbitration, arguing
that their agreements with the Stanford Entities compelled the Receiver to
arbitrate his claims.
Before it addressed the motions to compel arbitration, the district court
granted a preliminary injunction freezing certain assets of the Employee
1
Janvey v. Alguire (Alguire II), 647 F.3d 585, 590-91 (5th Cir. 2011); Janvey v. Adams,
588 F.3d 831, 833-34 (5th Cir. 2009).
2
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Defendants. On appeal of that order, a panel of this court initially held that the
Receiver’s claims were not subject to arbitration.2 However, the panel
subsequently withdrew that opinion, substituted a new opinion which concluded
that this court lacked jurisdiction to address the motions to compel, and
remanded so that the district court could rule on the motions in the first
instance.3 On remand, the district court denied the motions to compel
arbitration, holding that the Receiver had standing to bring claims on behalf of
creditors and therefore was not bound by the arbitration agreements. This
appeal followed.
The primary issue in this appeal is whether the Receiver has standing to
bring claims on behalf of Stanford’s creditors. “Th[is] court reviews questions of
jurisdiction, and specifically standing, de novo.”4 Additionally, “[w]e review de
novo a district court’s denial of a motion to compel arbitration.”5
The Receiver argues that he has standing to bring suit on behalf of
creditors and, therefore, that he is a stranger to the arbitration agreements
between Stanford and the Employee Defendants. However, this argument is
foreclosed by this court’s recent decision in Janvey v. Democratic Senatorial
Campaign Committee, Inc. (DSCC II),6 in which we held that “a federal equity
receiver has standing to assert only the claims of the entities in receivership.”7
2
Janvey v. Alguire (Alguire I), 628 F.3d 164, 182-85 (5th Cir. 2010), withdrawn, Alguire
II, 647 F.3d 585.
3
Alguire II, 647 F.3d at 603-04.
4
Nat’l Fed’n of the Blind of Tex., Inc. v. Abbott, 647 F.3d 202, 208 (5th Cir. 2011) (citing
Arguello v. Conoco, Inc., 330 F.3d 355, 361 (5th Cir. 2003)).
5
Sherer v. Green Tree Servicing LLC, 548 F.3d 379, 381 (5th Cir. 2008) (citing JP
Morgan Chase & Co. v. Conegie, 492 F.3d 596, 598 (5th Cir. 2007)).
6
712 F.3d 185 (5th Cir. 2013).
7
Id. at 190.
3
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In that case, the same receiver who is a party to this case sued a number
of national political committees, alleging that political contributions made by
Stanford to the committees were fraudulent transfers.8 The panel originally held
that the Receiver “represent[ed] the creditors, via the Stanford corporations, in
pursuing the TUFTA claims.”9 Acting on its own motion, the panel withdrew
that opinion and issued a substitute opinion to “confront and correct errors of
law pertaining to standing and imputed knowledge” contained in the original
opinion.10 The corrected opinion, relying on the Seventh Circuit’s decision in
Scholes v. Lehmann,11 concluded that because federal receivers have standing
only to assert claims of the entities in receivership, the Receiver did not have
standing to bring TUFTA claims on behalf of the creditors, but he did have
standing to bring those claims on behalf of the Stanford Entities.12
In this case, as he did in the DSCC case, the Receiver purports to bring
fraudulent-transfer claims on behalf of Stanford’s creditors rather than on behalf
of the Stanford Entities. Under DSCC II, he is not permitted to bring such a
suit. In DSCC II, we affirmed the district court despite its error in
misidentifying the basis for the Receiver’s standing because that error was
ultimately immaterial to the outcome of the case.13 This case, however, raises
an issue not implicated in DSCC II: namely, whether the Receiver is required to
arbitrate his claims. In bringing the claims on behalf of Stanford’s creditors, the
8
Id. at 189.
9
Janvey v. Democratic Senatorial Campaign Comm., Inc. (DSCC I), 699 F.3d 848, 853
(5th Cir. 2012), withdrawn, DSCC II, 712 F.3d 185.
10
DSCC II, 712 F.3d at 189-90.
11
56 F.3d 750 (7th Cir. 1995).
12
DSCC II,712 F.3d at 192.
13
Id. at 192-93, 202.
4
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Receiver has sought to avoid arbitration of his claims pursuant to the arbitration
clauses in the agreements between the Stanford Entities and the Employee
Defendants. The district court below relied on its erroneous conclusion that the
Receiver was authorized to sue on behalf of creditors in denying the motions to
compel arbitration, reasoning that the creditors were “not party to the
arbitration agreements.”
On appeal, the parties have focused primarily on whether the Receiver has
standing to sue on behalf of creditors and not on whether he is bound by the
arbitration clauses if he sues, as he must, on behalf of the Stanford Entities.
The district court did not address this issue. We therefore remand to allow the
district court to consider that question in the first instance.
* * *
For the foregoing reasons, we REVERSE the district court’s denial of the
motions to compel arbitration and REMAND for further proceedings consistent
with this opinion.
5