UNITED STATES SECURITIES AND EXCHANGE COMMISSION, Plaintiff-Appellee, v. Edward M. DASPIN, AKA Edward Michael, AKA Ed Michael, Defendant-Appellant.
No. 13-4622.
United States Court of Appeals, Second Circuit.
Feb. 5, 2014.
Although there is evidence that Khitrinov was Empire‘s sole shareholder and that Empire never had a board of directors or, apparently, a company treasurer or secretary, it is nevertheless clear from the record that Empire is distinct from Khitrinov. There is no evidence whatsoever that Empire conducted Khitrinov‘s business as opposed to its own business. More specifically, Garant-S fails to point to any evidence of intermingling of personal and corporate funds, of failure to maintain adequate records, or of Empire conducting business for Khitrinov‘s personal benefit. The lack of corporate formalities that Garant-S presses here as key evidence of Empire being Khitrinov‘s alter ego is unpersuasive because, “with respect to small, privately-held corporations, ‘the trappings of sophisticated corporate life are rarely present,’ and we must avoid an over-rigid ‘preoccupation with questions of structure, financial and accounting sophistication or dividend policy or history.‘” Bridgestone/Firestone, Inc. v. Recovery Credit Servs., Inc., 98 F.3d at 18 (quoting William Wrigley Jr. Co. v. Waters, 890 F.2d 594, 601 (2d Cir.1989)).
We have considered Garant-S‘s remaining arguments and reject them as without merit. Accordingly, the judgment of the district court is AFFIRMED.
Steven David Feldman, Herrick, Feinstein LLP, New York, NY, for Appellant.
Dominick V. Freda, United States Securities and Exchange Commission, Washington, D.C., for Appellee.
PRESENT: JOSÉ A. CABRANES, SUSAN L. CARNEY, CHRISTOPHER F. DRONEY, Judges.
SUMMARY ORDER
I. Daspin‘s Stay Motion
In deciding whether to grant a stay pending appeal, we consider: (1) whether the movant has demonstrated a “strong showing that he is likely to succeed on the merits“; (2) whether the movant will suffer irreparable injury absent a stay; (3) whether the non-moving party will suffer
Daspin cannot show that he is likely to succeed on the merits of his appeal. Daspin contends that the district court abused its discretion when it declined to order further medical investigation and failed to heed his physician‘s affidavit regarding Daspin‘s medical condition.
Daspin fails to make that showing. His physician conceded that it might be possible to safeguard against risk to Daspin by making the modifications contained in the district court‘s order, and Daspin had previously agreed to be deposed under these conditions.
Nor may Daspin succeed on his claim that the SEC must compensate his physician. Both parties cite F.T.C. v. Rockefeller, 591 F.2d 182, 191 (2d Cir.1979), which explained that a district court may, in its discretion, order the government to pay the costs of compliance with an administrative subpoena, but only if the costs are “not reasonably incident to the conduct of (a respondent‘s) business” (internal citation and quotation marks omitted). In other words, the government may be responsible if the respondent is not the target of the investigation, but rather, a “mere repositor[y] of information performing a service for the government in complying with the subpoenas.” Id. Here, as the target of the investigation, Daspin is responsible for the costs of compliance, and the district court did not err in ruling that he must pay his physician‘s fee. Consequently, Daspin cannot show that he is likely to succeed on the merits, and this factor supports denying a stay.
Daspin also cannot show that he will be irreparably harmed absent a stay. Irreparable harm is defined as “certain and imminent harm for which a monetary award does not adequately compensate.” See Wisdom Imp. Sales Co. v. Labatt Brewing Co., 339 F.3d 101, 114 (2d Cir.2003) (citations omitted). Irreparable harm exists “where, but for the grant of equitable relief, there is a substantial chance that upon final resolution of the action the parties cannot be returned to the positions they previously occupied.” Brenntag Int‘l Chem., Inc. v. Bank of India, 175 F.3d 245, 249-50 (2d Cir.1999) (evaluating a preliminary injunction).
Requiring Daspin to pay his physician‘s fee does not qualify as irreparable harm, as it would be adequately compensated by a monetary award. To be sure, a serious health complication could qualify as irreparable harm. However, the harm must be truly imminent, and not “mere possible injury,” or “remote and speculative” injury. See Jackson Dairy, Inc. v. H.P. Hood & Sons, Inc., 596 F.2d 70, 72 (2d Cir.1979). The safeguards ordered or considered by
Daspin also argues that, absent a stay, he would be compelled to testify, effectively mooting his appeal and causing irreparable harm by depriving him of his appellate rights. A stay may be used to preserve a possibly meritorious appeal. See In re Agent Orange Product Liability Litig., 804 F.2d 19, 20 (2d Cir.1986). However, Daspin‘s appeal is unlikely to succeed. Consequently, denying a stay would not deprive him of significant rights. Thus, this factor supports denying a stay.
Inasmuch as Daspin cannot show that he is likely to succeed on the merits and that he will be irreparably harmed absent a stay, the balance of factors weighs against granting a stay; we need not address the remaining factors. See Nken, 556 U.S. at 435, 129 S.Ct. 1749.
II. Motion for Summary Affirmance
Summary affirmance is “a rare exception to the completion of the appeal process ... [and] is available only if an appeal is truly ‘frivolous.‘” United States v. Davis, 598 F.3d 10, 13 (2d Cir.2010). An appeal is frivolous if it presents an “indisputably meritless legal theory” or “factual contentions [that] are clearly baseless.” Neitzke v. Williams, 490 U.S. 319, 327, 109 S.Ct. 1827, 104 L.Ed.2d 338 (1989). A case for which the outcome “seems obvious” is distinguishable from a frivolous case that is “inarguable or fanciful.” Davis, 598 F.3d at 13-14.
The outcome of Daspin‘s appeal “seems obvious,” but his arguments are not “fanciful.” Therefore, summary affirmance is inappropriate.
That said, because Daspin is not entitled to a stay pending appeal, and will therefore be compelled to testify, his appeal will soon be moot. Moreover, we already have the information necessary to decide this appeal, and, in the interest of judicial economy, we may take this opportunity to dispose of the appeal on the merits. We affirm the district court‘s order of December 5, 2013, for the reasons described above.
For the foregoing reasons, the judgment of the district court is hereby AFFIRMED.
The Mandate shall issue forthwith.