Janvey v. Democratic Senatorial Campaign Committee, Inc.
2013 U.S. App. LEXIS 5321
| 5th Cir. | 2013Background
- Janvey is appointed receiver over Stanford entities after the SEC suit in 2009 to preserve assets and pursue fraudulent conveyances.
- Stanford operated a Ponzi scheme using SIBL and related entities to sell CDs, using new investor funds to pay earlier investors.
- The scheme began as early as 1999 and collapsed in 2008-2009, raising over $7 billion through fraudulent CDs.
- The Receiver filed a TUFTA fraudulent-transfer action in 2010 against the DSCC, DCCC, RNC, NRSC, and NRCC to recover approximately $1.8 million.
- District court granted summary judgment for the Receiver; Committees appealed arguing untimeliness and preemption.
- The court analyzes standing, timeliness, and preemption under Scholes v. Lehmann and TUFTA, applying Texas law.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the Receiver have standing to sue third parties for fraudulent transfers? | Janvey asserts receiver standing to recover for the receivership entities. | Committees argue lack of standing or improper basis for claims. | Receiver has standing to sue on behalf of the receivership entities; error in district court is harmless. |
| Are TUFTA claims timely under discovery rules? | Discovery shows Ponzi scheme and fraudulent transfers; timely under discovery rule. | Knowledge imputed to entities could start clock earlier; untimely. | Under TUFTA, discovery rule applies; suit timely; no conclusive evidence showing >1-year delay. |
| Is TUFTA preempted by federal campaign-finance laws (FECA/BCRA)? | TUFTA claims do not seek FECA refunds and are not field; not preempted. | FECA preempts state fraudulent-transfer actions in this context. | Neither express nor field or conflict preemption applies; TUFTA is not preempted. |
Key Cases Cited
- Scholes v. Lehmann, 56 F.3d 750 (7th Cir. 1995) (receiver may sue to recover assets for receivership under UFTA)
- Donell v. Kowell, 533 F.3d 762 (9th Cir. 2008) (receiver standing where corporations are injured by fraud)
- Warfield v. Byron, 436 F.3d 551 (5th Cir. 2006) (UFTA/TUFTA interpretation; insolvency presumption in Ponzi contexts)
- Karl Rove & Co. v. Thornburgh, 39 F.3d 1273 (5th Cir. 1994) (preemption narrow; FECA not broad preemption of state law)
- Eberhard v. Marcu, 530 F.3d 122 (2d Cir. 2008) (Scholes framework cited regarding Ponzi-liquidation posture)