Rаlph S. JANVEY, in his capacity as Court-Appointed Receiver for the Stanford International Bank, Ltd., et al., Plaintiff-Appellee, v. DEMOCRATIC SENATORIAL CAMPAIGN COMMITTEE, INC.; National Republican Congressional Committee; Democratic Congressional Campaign Committee, Inc.; Republican National Committee; and National Republican Senatorial Committee, Defendants-Appellants.
No. 11-10704.
United States Court of Appeals, Fifth Circuit.
Oct. 23, 2012.
III
On appeal, Ghali does not argue that he is entitled to relief under the two-step analysis described in Garland. We therefore need not and do not resolve those issues. Because Garland prevents us from uniformly defining “proceeds” as “profits” across the money-laundering statute, we AFFIRM.19
Kevin M. Sadler, Scott Daniel Powers (argued), Baker Botts, L.L.P., Austin, TX, for Plaintiff-Appellee.
Before JOLLY, BENAVIDES and DENNIS, Circuit Judges.
DENNIS, Circuit Judge:
Ralph Janvey, the Receiver over Allen Stanford and his companies’ assets (collectively, the Stanford Defendants),1 brought this case under the Texas Uniform Fraudulent Transfer Act (“TUFTA“),
On appeal, the Committees advance three arguments. They are that (1) the Receiver may not stand in the shoes of the creditors of the Stanford Defendants as to the TUFTA claims, (2) the Receiver‘s action was untimely under TUFTA, and (3) federal campaign finance law preempts the Receiver‘s TUFTA claims. Because we conclude that (1) the Receiver may stand in the shoes of the creditors of the Stanford Defendants, (2) the Receiver‘s TUFTA claims were brought “within one year after the transfer[s] ... w[ere] or could reasonably have been discovered by the claimant,”
BACKGROUND
The Securities Exchange Commission (“SEC“) brought suit against the Stanford Defendants in 2009 for perpetrating an enormous Ponzi scheme. See Janvey v. Adams, 588 F.3d 831, 833 (5th Cir.2009). The district court appointed Janvey to be Receiver over the assets and the records of the Stanford Defendants (the Receivership Estate). The court “specifically directed and authorized [the Receiver] to ... [c]ollect, marshal, and take custody, control, and possession of all the funds, accounts, mail, and other assets of, or in the possession or under the control of, the Receivership Estate, or assets traceable to assets owned or controlled by the Receivership Estate, wherever situated.” The Receiver was also dirеcted to file “such actions or proceedings to impose a constructive trust, obtain possession, and/or recover judgment with respect to persons
On February 19, 2009 and pursuant to its directive, the Receiver filed the instant lawsuit to recover approximately $1.6 million worth of contributions made by the Stanford Defendants to the Committees. It is undisputed that the Stanford Defendants gave $950,500 to the DSCC; $238,500 to the NRCC; $200,000 tо the DCCC; $128,500 to the RNC; and $83,345 to the NRSC. The Receiver contends that the Committees have to disgorge the above funds because the contributions were fraudulent transfers, given “with actual intent to hinder, delay, or defraud” creditors of the Stanford Defendants. See
The Committees each filed a motion to dismiss, and the Receiver and the Republican Committees moved for summary judgment. The district court granted the Receiver‘s motion for summary judgment and denied the motions to dismiss and the Republican Committees’ motion for summary judgment. The court ruled that the Receiver stands in the shoes of the creditors of the Stanford Defendants and therefore may bring the TUFTA claims and determined that the Receiver‘s TUFTA actions were timely. The district court also concluded that federal campaign finance law2 does not preempt the Receiver‘s state law claim. On the merits, the district court determined that summary judgment in favor of the Receiver was warranted because he had demonstrated that the Stanford Defendants gave contributions to the Committees with actual intent to dеfraud, as required by TUFTA. The district court was unconvinced that the statutory defense available for contributions taken “in good faith and for a reasonably equivalent value,”
The Committees timely appealed, raising three issues: (1) whether the Receiver may stand in the shoes of the creditors of the Stanford Defendants as to the TUFTA claims; (2) whether the Receiver‘s action was untimely under TUFTA; and (3) whether federal campaign finance law preempts the Receiver‘s TUFTA claims.
STANDARD OF REVIEW
We review de novo a district court‘s disposition of motions to dismiss and motions for summary judgment. E.g., LeClerc v. Webb, 419 F.3d 405, 413 (5th Cir.2005).
DISCUSSION
A.
The Committees first dispute the district court‘s conclusion that the Receiver stands in the shoes of the creditors of the Stanford Defendants and that he is therefore empowered to bring the TUFTA claims. We disagree and conclude that the Receiver has the authority to pursue the instant action on behalf of the creditоrs.
The Committees highlight that the district court relied on language from Janvey v. Alguire, 628 F.3d 164 (5th Cir.2010) (Alguire I), in reaching its conclusion that the Receiver may bring claims on behalf of the creditors of the Stanford Defendants. The Committees correctly note that this
B.
1.
Given that the Receiver may represent the creditors in pursuit of the TUFTA claims, the next question we must answer is whether the Receiver filed the instant action “within one year aftеr the transfer[s] ... w[ere] or could reasonably have been discovered by the claimant.”
“A defendant moving for summary judgment on the affirmative defense of limitations has the burden to establish that defense conclusively.” Johnston v. Crook, 93 S.W.3d 263, 269 (Tex.App.2002) (citing KPMG Peat Marwick v. Harrison Cnty. Hous. Fin. Corp., 988 S.W.2d 746, 748 (Tex.1999)). “Thus, the defendant must (1) conclusively prove when the cause of action accrued, and (2) negate the discov-
“The discovery rule [in
2.
The Committees argue that the Receiver reasonably could have discovered the fraudulent transfers, at the very latest, by February 18, 2009.6 They contend that the existence of the donations was not “inherently undiscoverable” because records of the donations were avаilable online (for instance, on the websites of the Federal Election Commission (“FEC“) and Open Secrets) and because the donations were discussed in the media.
The Committees’ argument misses the mark. Even if the existence of the donations was discoverable, their fraudulent nature was not. Moreover, when the Receiver was first appointed on February 16, 2009, he had a number of duties to attend to, which involved the many Stanford offices, systems, and employees, and, because February 16, 2009 fell on Presidents’ Day, he was not able tо enter the Stanford offices until February 17, 2009. Given the extent of the Stanford enterprises, the Receiver‘s duties with regard to them, and the extent of the fraudulent transfers, it would not have been reasonable to expect him to immediately discover the fraud. Moreover, the Political Committees submitted no summary judgment evidence indicating that the Receiver actually discovered the transfers earlier than February 20, 2009. The burden is on the Committees to “(1) conclusively prove when the cause of action accrued, and (2) negаte the discovery rule, if it applies and has been pleaded or otherwise raised, by proving as a matter of law there is no genuine issue of material fact about when the plaintiff discovered, or in the exercise of reasonable diligence should have discovered, the nature of its injury.” Cadle, 136 S.W.3d at 352. Accordingly, we reject their argument and conclude that, based on the record made in support of summary judgment, the Receiver exercised reasonable diligence and thus brought the action within one year of when thе transfers reasonably could have been discovered.
3.
Finally, and related to their argument regarding to the discovery rule, the Committees assert that the district court abused its discretion in denying their discovery request (a motion to compel) and that they were prejudiced as a result. Specifically, the Committees requested
On appeal, the Committees do not dispute that the documents are privileged. Rather, the Committees contend that the Conkling exception applies because the materials sought will help determine when the Receiver discovered, or reasonably could have discovered, the contributions made to the Committees. However, the ultimate question is when the Receiver knew or should have known about the fraudulent nature оf the contributions, not just their existence. Thus, the district court would have been obliged to find the Conkling exception inapplicable if none of the sealed documents tended to show that the Receiver, prior to the crucial date, not only knew that the contributions had been made but also that they had been made with fraudulent intent.
Even if we assume, for the sake of argument, that the district court erred in not applying the Conkling exception, the Committees have failed to preserve this issue for appeal by failing to рrovide any meaningful way to review the disputed documents. Had the Committees wished to pursue this argument, they should have moved to have the documents, along with any metadata, made available for review. See, e.g., Miss. Pub. Employees’ Ret. Sys. v. Boston Scientific Corp., 649 F.3d 5, 30 n. 22 (1st Cir.2011). The district court examined the documents, determined that it was not necessary to look at the metadata they may have contained, and concluded that they did not fit the criteria for the Conkling exception to apply. Absent a meaningful way to review the disputed documents, it is not possible to examine whether the district court abused its discretion by denying the Committees’ discovery request as to the documents.
Furthermore, insofar as the Committees suggest that the district court‘s in camera review of the hardcopy documents was inadequate because it did not include the metadata itself, their argument is waived because they did not raise it until their reply brief. E.g., Medina Cnty. Envtl. Action Ass‘n v. Surface Transp. Bd., 602 F.3d 687, 702 (5th Cir.2010). Consequently, we cannot say that the district court abused its discretion in denying the Committees’ discovery request.
C.
The Committees’ third defense is that federal campaign finance law
1.
The Committees argue that FECA expressly preempts the Receiver‘s TUFTA claim because it preempts “any provision of State law with respect to election to federal office.”
TUFTA is a general state law that happens to apply to federal political committees in the instant case. In cases like this one, we have rejected express preemption arguments and construed § 453 narrowly. For instance, in Karl Rove & Co. v. Thornburgh, 39 F.3d 1273 (5th Cir.1994), we rejected a federal candidate‘s argument that FECA preempted a company‘s state law cause of action against him for the debts of his campaign committee:
Although Thornburgh attempts to stretch § 453 far enough to create a preemptive bar to applying state law to hold federal candidates personally liable, we cannot read FECA as extending that far. First, a “strong presumption” exists against preemption, and “courts have given section 453 a narrow preemptive effect in light of its legislative history.” In addition, nowhere in the text of FECA or accompanying regulations is the personal liability of a candidate addressed. Finally, the Federal Election Commission (“FEC“) has opined that state law supplies the answer to the question who may be held liable for campaign committee debts. Accordingly, in light of the FEC‘s view, the strong presumption against preemption, the historically narrow reading of § 453, and FECA‘s silence on the issue of candidate liability, we conclude that Thornburgh‘s argument for express preemption must fail.
Id. at 1280; see also Stern v. Gen. Electric Co., 924 F.2d 472 (2d Cir.1991) (holding that § 453 does not preempt a state law establishing a company‘s directors’ fiduciary duty to shareholders, including not wasting corporate assets, and explaining that “the narrow wording of [§ 453] suggests that Congress did not intend to preempt state regulation with respect to non-election-related activities“); Reeder v. Kans. City Bd. of Police Comm‘ers, 733 F.2d 543 (8th Cir.1984) (holding that § 453 did not preempt a state law prohibiting officers or employees of the Kansas City Police Department from making any political contribution); Friends of Phil Gramm v. Ams. for Phil Gramm in ‘84, 587 F.Supp. 769 (E.D.Va.1984) (holding that § 453 did not preempt a state law prohibiting unauthorized use of a person‘s name for advertising or commercial purposes).
The cases that the Committees cite are all inapposite because they pertain to state laws that specifically regulated federal campaign finance in contravention of FECA‘s preemption provision. See Teper v. Miller, 82 F.3d 989 (11th Cir.1996) (state law effectively prohibiting Georgia legislators from accepting donations for a federal campaign while the state General Assembly was in session); Bunning v. Ky., 42 F.3d 1008 (6th Cir.1994) (state law authorizing investigation of campaign expenditures of a federal political committee); Weber v. Heaney, 995 F.2d 872 (8th Cir.1993) (state law establishing system under which federal congressional candidates could agree to limit their federal expenditures in exchange for state funding for their campaigns).
Nor does TUFTA implicate the “core concerns” of FECA. As the Receiver correctly explains, he does not seek a refund of the contributions. Rather, the TUFTA claims are brought on behalf of the creditors of the Stanford Defendants and assert that the contributions should not have been made in the first place. Accordingly, § 453 does not expressly preempt the Receiver‘s TUFTA claims.
2.
The Committees next argue that field preemption applies. However, because Congress has not occupied the field with regard to claims like those brought under TUFTA and because courts have consistently indicated that FECA‘s preemptive scope is narrow in light of its legislative history, see, e.g., Karl Rove, 39 F.3d at 1281; Stern, 924 F.2d at 475 n. 3; Weber, 995 F.2d at 876, we conclude that field preemption does not apply.
First, the Committees contend that § 441a-k of FECA states a “comprehensive list” of illegal sources for campaign contributions8 and that TUFTA impermissibly designates another source of “illegal” contributions. This, the Committees argue, is consistent with “[t]he primary purpose of FECA, [which] ... is to regulate campaign contributions and expenditures in order to eliminate pernicious influence—actual or perceived—over candidates by those who contribute large sums.” Karl Rove, 39 F.3d at 1281. But, as the Receiver correctly observes, this appeal pertains to an impermissible source of funds for the contributor (the Stanford Defendants), not the Committees, and § 441a-k only pertains to the latter. Moreover, as the district court noted, neither Congress nor the FEC “has ever attempted to graft any of these potential uses of erstwhile campaign contributions onto the purportedly exclusive list of prohibited limitations on contributions and expenditures.” Finally, the Committees’ argument would lead to absurd results: under their interpretation, they would be allоwed to keep funds that were, for example, stolen by force or fraud so long as the contributions did not run afoul of § 441a-k.
Second, the FEC, in advisory opinions cited by the district court, has ruled that candidates and political committees remain subject to state contract law. FEC Adv. Op. 1989-02 at 2 (Apr. 25, 1989); FEC Adv. Op.1975-102 at 1 (Jan. 29, 1976). This suggests that Congress had no intention to “occupy the field” with regard to campaign finance such that state fraudulent transfer laws would be preempted. Given this, field preemption does not apply.
3.
Finally, we conclude that conflict preemption does not apply here. First, the Committees argue that because FECA does not designate fraudulent transfers as illegal, TUFTA must conflict with FECA. This is a rehashing of the Committee‘s argument regarding field preemption—namely, that because § 441a-k of FECA states a “comprehensive list” of illegal sources for campaign contributions, TUFTA impermissibly designates another source of “illegal” contributions by allowing the Receiver‘s claims—which we have already rejected. Accordingly, for the same reason that field preemption does not apply on this basis, neither does conflict preemption.
Second, the Committees maintain that the Receiver‘s TUFTA claims conflict with the BCRA‘s soft money provisions. They submit that because the BCRA requires them to dispose of all soft money, they may not be compelled, under state law, to return that money. We find this argument unpersuasive. It depends on characterizing the Receiver‘s TUFTA claim as a refund, which as previously discussed is inaccurate because the TUFTA claim is brought on behalf of the creditors of the Stanford Defendants and alleges that the contributions should not have been made in the first place. Furthermore, the Receiver does not seek recovery of the exact soft money funds that the Committees asserts have now been spent. See
CONCLUSION
For these reasons, we AFFIRM the district court‘s judgment.
JAMES L. DENNIS
UNITED STATES CIRCUIT JUDGE