Raymond Heck v. Kenneth Buhler, 775 F.3d 265

Background

Ken Buhler formed Antique Investment Group, LLC (AIG) and used a prospectus (the "AIG pool document") to raise ~$325,000 from five private investors; the document promised investors that their loans would be secured by AIG inventory.
Buhler was heavily indebted to First Bank; Buhler and Triche (a CPA and shareholder at First Bank) met with bank officers about restructuring and were told more collateral was required.
Triche helped prepare portions of the AIG prospectus, advised Buhler, attended bank meetings, and instructed Buhler to pledge AIG inventory (including investor-purchased inventory) as collateral to First Bank.
First Bank (later State Bank & Trust) foreclosed after Buhler defaulted; investors sued Buhler and Triche for securities fraud under federal Rule 10b-5 and the Louisiana Securities Law (La. Rev. Stat. § 51:712 et seq.).
The jury found Buhler and Triche liable and apportioned 60%/40% damages; district court ultimately entered judgment holding Triche liable under Louisiana law (not federal law), awarded prejudgment interest, denied joint-and-several liability, and taxed damages accordingly.
On appeal, Triche challenged denial of JMOL, jury instructions, and sufficiency of evidence as to his status as a seller or control person; plaintiffs sought reinstatement of a federal-Rule-10b-5 theory but did not file a cross-appeal.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Was Triche's appeal timely?	Plaintiffs: appeal clock ran from July 2, 2013 order; later fee motions were ministerial and did not toll.	Triche: district court's Rule 58(e) stay and later February 4, 2014 amended judgment tolled appeal deadline; his Feb 14, 2014 notice is timely.	Appeal timely: court held the Rule 58(e) order valid to toll pending a timely fee motion and that final disposition (Feb 4, 2014) controlled.
Were jury instructions deficient as to state-law claim or federal claim?	Plaintiffs: verdict supports liability under both federal Rule 10b-5 and Louisiana law.	Triche: district court erred by failing to give state-law instructions and by incomplete federal instructions.	Court: Triche invited the erroneous instruction strategy (he proposed treating state law as identical to Rule 10b‑5) and thus waived the objection; final judgment rests on Louisiana law, not Rule 10b‑5.
Did evidence suffice to find Triche a seller or control person under La. Rev. Stat. § 51:712/714?	Plaintiffs: Triche controlled Buhler, approved the prospectus language, directed pledging of investor collateral, and had motive (bank ties) — sufficient for control-person liability.	Triche: he was only an advisor/CPA, did not solicit investors, and did not exercise control; insufficient evidence.	Held: district court's implied finding that Triche was a control person is not clearly erroneous; evidence reasonably supports control-person liability under state law.
May plaintiffs obtain Rule 10b‑5 liability/remedy on appeal without cross-appeal?	Plaintiffs: jury verdict supports federal liability; reinstatement would permit joint-and-several recovery.	Triche: plaintiffs failed to cross-appeal district court's limitation to state law; court must not enlarge appellee's recovery.	Held: plaintiffs cannot enlarge the judgment on appeal without a cross-appeal; federal liability not reinstated.

Key Cases Cited

Foradori v. Harris, 523 F.3d 477 (5th Cir. 2008) (standard of review for JMOL challenges and jury verdict deference)
Hiltgen v. Sumrall, 47 F.3d 695 (5th Cir. 1995) (JMOL challenges test)
Flowers v. S. Reg'l Physician Servs., Inc., 247 F.3d 229 (5th Cir. 2001) (deference to jury verdict)
Budinich v. Becton Dickinson & Co., 486 U.S. 196 (U.S. 1988) (effect of attorney-fee motions on finality)
Ray Haluch Gravel Co. v. Cent. Pension Fund, 134 S. Ct. 773 (U.S. 2014) (FRAP 4(a)(4) and Rule 58 context)
Osterneck v. Ernst & Whinney, 489 U.S. 169 (U.S. 1989) (prejudgment interest as part of compensation; Rule 59 tolling)
Pinter v. Dahl, 486 U.S. 622 (U.S. 1988) (defining "seller" under Securities Act models)
Greenlaw v. United States, 554 U.S. 237 (U.S. 2008) (appellate courts may not enlarge appellee's rights absent cross-appeal)