United States v. RaPower-3, 962 F.3d 1244

Background:

The Government sued Neldon Johnson, Gregory Shepard, and three related companies for promoting an abusive solar-tax scheme; district court entered injunction and $50M+ disgorgement after a bench trial.
The district court appointed R. Wayne Klein as receiver and issued a Receivership Order freezing defendants’ assets and authorizing the Receiver to investigate affiliates and their proceeds.
The Receiver recommended adding 13 affiliated entities (including six Appellant Entities: Solco, XSun, NPJFLP, Solstice, Black Night, Starlight) to the receivership; the district court entered a Receivership Expansion Order without a hearing.
The Expansion Order found the affiliates were controlled/commingled with defendants, granted the receiver exclusive control over their assets, and dismissed their corporate officers’ authority; the court also found they received notice and an opportunity to be heard.
The six Appellant Entities objected on due-process grounds and appealed, arguing the Expansion Order was immediately appealable under 28 U.S.C. § 1292(a)(2).
The Tenth Circuit dismissed the appeal for lack of jurisdiction, holding § 1292(a)(2) does not encompass the Expansion Order in these circumstances and stressing the narrow, non-piecemeal scope of interlocutory appeals.

Issues:

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the Receivership Expansion Order is immediately appealable under 28 U.S.C. § 1292(a)(2)	§1292(a)(2) applies because the Expansion Order effectively appointed the receiver over the Appellants’ assets	§1292(a)(2) must be narrowly construed; the original Receivership Order already appointed the receiver and gave control over the affiliates; allowing this appeal would permit piecemeal review	No jurisdiction under §1292(a)(2); appeal dismissed
Whether adding nonparty affiliates to the receivership without a hearing violated due process	Inclusion without being formally sued or given an adequate hearing denied them due process	The affiliates received notice and opportunity to be heard; they are deeply intertwined with defendants and subject to the original receivership control; could have intervened earlier	Merits not reached on appeal; district court had found notice adequate and Tenth Circuit declined review for lack of jurisdiction
Whether the Expansion Order constituted a new appointment or deprivation that §1292(a)(2) was meant to cover	The Expansion Order had the practical effect of appointing a receiver over these entities, triggering §1292(a)(2) review	The Expansion Order was a normal receivership step; original order already conferred control and froze assets; §1292(a)(2) cannot be expanded to chill normal receivership administration	Court refused to expand §1292(a)(2); narrow literal reading applies and bars this interlocutory appeal

Key Cases Cited

Comm’r v. Owens, 78 F.2d 768 (10th Cir. 1935) (authorizing receivership to preserve property involved in litigation)
S.E.C. v. Vescor Capital Corp., 599 F.3d 1189 (10th Cir. 2010) (explaining receivership purpose is to safeguard and administer assets)
Zacarias v. Stanford Int’l Bank, Ltd., 945 F.3d 883 (5th Cir. 2019) (receiver is an officer of the court, not parties’ agent)
Ritzen Grp., Inc. v. Jackson Masonry, LLC, 140 S. Ct. 582 (2020) (describing final-judgment rule for appellate jurisdiction)
Cal. Coastal Comm’n v. Granite Rock Co., 480 U.S. 572 (1987) (statutes authorizing appeals are to be strictly construed)
Gardner v. Westinghouse Broad. Co., 437 U.S. 478 (1978) (narrow exceptions to final-judgment rule to prevent piecemeal appeals)
In re Pressman-Gutman Co., 459 F.3d 383 (3d Cir. 2006) (construing §1292(a)(2) to permit only three discrete categories of receivership orders)
Netsphere, Inc. v. Baron, 799 F.3d 327 (5th Cir. 2015) (interpreting §1292(a)(2) narrowly and distinguishing normal receivership orders)
Hatten-Gonzales v. Hyde, 579 F.3d 1159 (10th Cir. 2009) (cautioning that §1292 exceptions are limited to avoid piecemeal appeals)