SEC v. Alpine Secs. Corp. ( 2019 )

18-2045-cv
SEC v. Alpine Secs. Corp.
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
Rulings by summary order do not have precedential effect. Citation to a summary order filed
on or after January 1, 2007, is permitted and is governed by Federal Rule of Appellate
Procedure 32.1 and this Court’s Local Rule 32.1.1. When citing a summary order in a
document filed with this Court, a party must cite either the Federal Appendix or an
electronic database (with the notation “summary order”). A party citing a summary order
must serve a copy of it on any party not represented by counsel.
At a stated term of the United States Court of Appeals for the Second Circuit, held at
the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York,
on the 28th day of May, two thousand nineteen.
PRESENT: JOHN M. WALKER, JR.,
JOSÉ A. CABRANES,
PETER W. HALL,
Circuit Judges.
UNITED STATES SECURITIES AND EXCHANGE COMMISSION,
Plaintiff-Appellee, 18-2045-cv
v.
ALPINE SECURITIES CORPORATION,
Defendant-Appellant.
FOR PLAINTIFF-APPELLEE: RACHEL M. MCKENZIE, Senior Counsel
(Daniel Staroselsky and Michael A.
Conley, on the brief), for Robert B. Stebbins,
General Counsel, Securities and Exchange
Commission, Washington, D.C.
FOR DEFENDANT-APPELLANT: MARANDA FRITZ, Thompson Hine LLP,
New York, N.Y.
Appeal from a July 11, 2018 order of the United States District Court for the Southern
District of New York (Denise Cote, Judge).
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UPON DUE CONSIDERATION WHEREOF, IT IS HEREBY ORDERED,
ADJUDGED, AND DECREED that the order of the District Court be and hereby is
AFFIRMED.
Defendant-Appellant Alpine Securities Corporation (“Alpine”) appeals an order of the
District Court granting the motion of plaintiff-appellee United States Securities and Exchange
Commission (“SEC”) to enjoin Alpine from prosecuting a separate action in the District of Utah.
The SEC filed the instant suit, a civil enforcement action, against Alpine on June 5, 2017. On June
22, 2018, after summary judgment proceedings in the case, Alpine and an affiliated entity, Scottsdale
Capital Advisors (“Scottsdale”), filed a new lawsuit against the SEC in the District of Utah
challenging the SEC’s statutory authority to bring the type of civil enforcement action at issue in this
case. The SEC moved in the instant case to enjoin Alpine and Scottsdale from litigating the Utah
action. The District Court granted the motion. Alpine filed an interlocutory appeal, contending that
the District Court erred in applying the “first-filed” rule. Scottsdale did not appeal. We assume the
parties’ familiarity with the underlying facts, the procedural history of the case, and the issues on
appeal.
We review a district court’s decision to dismiss, stay, or enjoin the prosecution of duplicative
proceedings for “abuse of discretion.” Curtis v. Citibank, N.A., 226 F.3d 133, 138 (2d Cir. 2000). A
district court may enjoin the prosecution of a suit that is duplicative of an extant federal court suit
“[a]s part of its general power to administer its docket.” Id. With limited exceptions, the first-filed
rule instructs that the first suit takes priority. See Emp’rs Ins. of Wausau v. Fox Entm’t Grp., Inc., 522
F.3d 271, 275 (2d Cir. 2008).
Alpine first contends that the District Court abused its discretion because the Utah action is
not a duplicative proceeding subject to the first-filed rule. This argument is unavailing. In the instant
action, the SEC moved for partial summary judgment, and Alpine cross-moved for summary
judgment, contending that the SEC lacks statutory authority to bring the enforcement action. In its
ruling on summary judgment, the District Court held that the SEC does have the authority to bring
the enforcement action. See United States Sec. & Exch. Comm’n v. Alpine Sec. Corp., 308 F. Supp. 3d
775, 781, reconsideration denied, 2018 WL 3198889 (S.D.N.Y. 2018). In the Utah action, Alpine and
Scottsdale sued the SEC, contending that it lacks the statutory authority to bring the enforcement
proceeding at issue in this case. Indeed, the Utah complaint discusses the New York action at length,
see App. 912–14, 928–29, and the relief sought includes “the issuance of a preliminary and
permanent injunction against the SEC’s continued unlawful attempts to” engage in the precise civil
enforcement action at issue here, id. at 932. The District Court did not abuse its discretion in
concluding that “[t]he Utah action is a transparent attempt to relitigate rulings in this action
unfavorable to Alpine” and applying the first-filed rule. United States Sec. & Exch. Comm’n v. Alpine
Sec. Corp., 2018 WL 3377152, at *1 (S.D.N.Y. 2018).
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Alpine next contends that the District Court abused its discretion by failing to consider
whether to depart from the first-filed rule based on the “balance of convenience” exception. This
argument fails, as well. The District Court properly considered and rejected the contention that the
balance of convenience favors prioritizing the Utah action, which was filed over a year after this suit
and filed only after the District Court rejected Alpine’s arguments at summary judgment.
Alpine further argues that even if the instant action should be prioritized under the first-filed
rule, the District Court abused its discretion by enjoining the parties from prosecuting the Utah
action instead of ordering the parties to transfer it to New York. But it is well established that a
district court, in its discretion, may enjoin parties from prosecuting a later-filed action. See AEP
Energy Servs. Gas Holding Co. v. Bank of Am., N.A., 626 F.3d 699, 722–23 (2d Cir. 2010). We conclude
that it was proper for the District Court to do so here, where Alpine had already litigated the issue of
the SEC’s enforcement authority.
Finally, Alpine contends that the District Court abused its discretion by enjoining Scottsdale,
a non-party to the instant case, from litigating the Utah action. But Scottsdale did not appeal the
injunction, even though it had the right to do so. See NML Capital, Ltd. v. Republic of Argentina, 727
F.3d 230, 239 (2d Cir. 2013) (holding that a non-party may appeal an injunction by which it is
bound). It is well-settled that “to have standing on appeal, a party must be aggrieved by the judicial
action from which it appeals.” Kass v. City of New York, 864 F.3d 200, 205 (2d Cir. 2017) (internal
quotation marks omitted); see also Penda Corp. v. United States, 44 F.3d 967, 971 (Fed. Cir. 1994) (“[A]
party is generally not aggrieved by, and thus lacks standing to appeal from, a judgment rendered
against a co-party.”). Alpine is, of course, aggrieved by the injunction because it prevents Alpine
from prosecuting the Utah action. But Alpine has not demonstrated that it will suffer any separate
cognizable injury stemming from Scottsdale’s inability to do so. Accordingly, Alpine has not
established Article III standing to challenge the injunction as to Scottsdale.
CONCLUSION
We have reviewed all of the arguments raised by Alpine on appeal and find them to be
without merit. For the foregoing reasons, we AFFIRM the July 11, 2018 order of the District Court.
FOR THE COURT:
Catherine O’Hagan Wolfe, Clerk of Court
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