McNamara v. Intercept Corporation et al, No. 2:2018cv02281 - Document 59 (D. Nev. 2020)
Court Description: ORDER Granting 58 Stipulation to Stay Proceedings. Signed by Judge Gloria M. Navarro on 10/2/2020. (Copies have been distributed pursuant to the NEF - JQC)
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McNamara v. Intercept Corporation et al Doc. 59 Case 2:18-cv-02281-GMN-VCF Document 58 Filed 09/25/20 Page 1 of 6 1 2 3 4 5 6 7 8 3 3 Howard Hughes Parkway, Suite 6 Las Vegas, NV 6 9 Dan R. Waite (Nev. Bar # 4078) LEWIS ROCA ROTHGERBER CHRISTIE LLP 3993 Howard Hughes Parkway, Suite 600 Las Vegas, NV 89169 Tel: (702) 949-8200 Fax: (702) 949-8398 Email: dwaite@lrrc.com Richard Zack (Admitted Pro Hac Vice) TROUTMAN PEPPER HAMILTON SANDERS LLP 3000 Two Logan Square Eighteenth and Arch Streets Philadelphia, Pennsylvania 19103 Tele: 215-981-4084 Attorneys for Defendants Intercept Corporation, Bryan Smith, Craig Dresser, and Connie Mosier 10 UNITED STATES DISTRICT COURT DISTRICT OF NEVADA 11 12 13 14 15 16 17 18 19 20 21 22 THOMAS W. MCNAMARA, as the CourtAppointed Monitor for AMG Capital Management, LLC; BA Services LLC; Black Creek Capital Corporation; Broadmoor Capital Partners, LLC; Park 269, LLC; C5 Capital LLC; DF Services Corp.; DFTW Consolidated [UC] LLC; Impact BP LLC; Level 5 Apparel LLC; Level 5 Capital Partners LLC; Level 5 Eyewear LLC; Level 5 Motorsports, LLC; Level 5 Scientific LLC; NM Service Corp. (f/k/a/ National Money Service); PSB Services LLC; Real Estate Capital LLC (f/k/a/ Rehab Capital I, LLC); Sentient Technologies; ST Capital LLC; Westfund LLC; Eclipse Renewables Holdings LLC; Scott Tucker Declaration of Trust, dated February 20, 2015; West Race Cars, LLC; and Level 5 Management LLC; and their successors, assigns, affiliates, and subsidiaries, 23 24 25 INTERCEPT CORPORATION; BRYAN SMITH; CRAIG DRESSER; CONNIE MOSIER; DOES I-X; and ROE CORPORATIONS I-X, 27 28 STIPULATION AND (PROPOSED) ORDER TO STAY PROCEEDINGS Plaintiffs, v. 26 Case No. 2:18-cv-02281-GMN-VCF Defendants. Dockets.Justia.com 3 3 Howard Hughes Parkway, Suite 6 Las Vegas, NV 6 Case 2:18-cv-02281-GMN-VCF Document 58 Filed 09/25/20 Page 2 of 6 1 Plaintiff Thomas W. McNamara (“Monitor”), through his counsel, and Defendants 2 Intercept Corporation, Bryan Smith, Craig Dresser, and Connie Mosier (“Defendants”), through 3 their counsel (collectively the “Parties”), respectfully submit this Stipulation and (Proposed) 4 Order to Stay Proceedings (“Stipulation”). 5 The Monitor’s Position 6 The Monitor believes the case against Defendants is meritorious and should be allowed to 7 proceed. Both the Court’s order in the related case of Thomas W. McNamara v. Linda Hallinan, 8 et al. (“McNamara v. L. Hallinan”), Case No. 2:17-cv-02967-GMN-BNW (D. Nev.), and the 9 Court’s order in this case, denying in part and granting in part Defendants’ motion to dismiss (in 10 which the Court “conclude[d] that McNamara has the authority to bring his claims,” including 11 claims to recover fees paid to Defendants, see ECF No. 45 at 7), recognize the Monitor’s 12 authority to pursue the claims at issue here against Defendants. 13 The Monitor acknowledges, however, that the Court has stayed four related actions that he 14 has brought due to the United States Supreme Court’s review of the Court’s decisions in Federal 15 Trade Commission v. AMG Services, Inc., et al., Case No. 2:12-cv-00536-GMN-VCF (D. Nev) 16 — see, Thomas W. McNamara v. Charles Hallinan, et al., Case No. 2:17-cv-02966-GMN-NJK, 17 at ECF No. 154 (D. Nev. Aug. 11, 2020), Thomas W. McNamara v. Stealth Power, LLC, Case 18 No. 2:18-cv-01813-GMN-NJK, at ECF No. 60 (D. Nev. Sept. 3, 2020), McNamara v. L. Hallinan, 19 at ECF No. 156 (D. Nev. Sept. 14, 2020), and Thomas W. McNamara v. Gary Patten, et al. 20 (“McNamara v. Patten”), Case No. 2:17-cv-02968-GMN-NJK, at ECF No. 101 (Sept. 14, 2020). 21 Notwithstanding these orders, the Monitor believes that it would be beneficial to proceed 22 with discovery. This is because of the possibility of witnesses’ memories fading and documents 23 being lost or destroyed during a stay. When granting the motion to stay in McNamara v. Patten, 24 the Court cited the parties’ completion of fact discovery as a reason that the stay would not result 25 in prejudice to the Monitor. See id. at ECF No. 101 at 2. Here, the parties are in the midst of fact 26 discovery as to Count III (aiding and abetting breach of fiduciary duty) only – neither side has yet 27 deposed a witness, and the Monitor has issued several discovery requests to Defendants that are 28 still outstanding. -2- 3 3 Howard Hughes Parkway, Suite 6 Las Vegas, NV 6 Case 2:18-cv-02281-GMN-VCF Document 58 Filed 09/25/20 Page 3 of 6 1 Nonetheless, the Monitor recognizes the issues presented to the Supreme Court on appeal 2 directly affect the scope of the authorization provided to the Monitor in the underlying case (the 3 “Monitor Order.”) Those issues apply equally to each of the cases brought by the Monitor, and 4 consequently, the Monitor understands that the Court is likely to ultimately stay the instant case, 5 too. As the Monitor has not brought this case on a contingency fee basis (unlike a number of the 6 other actions that he has brought pursuant to the Monitor Order), proceeding with discovery here 7 will result in direct costs to the Monitorship Estate. Recognizing that the likely end result is a 8 stay, the Monitor has deemed it to be in the best interests of the Monitorship Estate to stipulate to 9 a stay of this action. 10 Defendants’ Position 11 Defendants do not believe this case is meritorious. While the Court previously found the 12 Monitor had authority generally to initiate this action, the Court dismissed the majority of the 13 claims set forth in the Monitor’s original complaint for lack of standing and failure to sufficiently 14 plead claims against the individual Defendants (ECF No. 45 at 17-22). The Monitor’s amended 15 complaint, which brings the same claims that were previously found to be lacking, should be 16 dismissed in its entirety for the reasons set forth in Defendants’ pending motion to dismiss (ECF 17 No. 54). 18 Defendants also disagree that proceeding with discovery would be beneficial under the 19 circumstances. The Monitor already has in his possession a vast amount of records and 20 information, including Defendant Intercept’s prior productions in response to the FTC’s 2012 21 subpoena and the Monitor’s 2018 subpoena in the AMG Services matter, and the possibility of 22 memories fading is not an issue given that many of the events in question were already a decade 23 old when the Monitor filed his original complaint against Defendants. 24 Defendants do agree with the Monitor, however, that a stay of this action is appropriate 25 pending resolution of AMG Capital Management, LLC v. Federal Trade Commission, No. 19- 26 508, a case which could, as this Court has explained in the Hallinan, Stealth Power, and Patten 27 cases, directly affect the Monitor’s scope of authority and, as a result, his ability to proceed in this 28 action. -3- Case 2:18-cv-02281-GMN-VCF Document 58 Filed 09/25/20 Page 4 of 6 Accordingly, IT IS HEREBY STIPULATED AND AGREED, by and between the 1 2 undersigned counsel for the Parties, as follows: 3 4 1. AMG Capital Management, LLC v. Federal Trade Commission, No. 19-508. 5 2. The Monitor and Defendants shall jointly file a status report every three months 6 beginning on November 2, 2020, addressing the status of AMG Capital Management, LLC v. 7 Federal Trade Commission, No. 19-508. 8 9 3 3 Howard Hughes Parkway, Suite 6 Las Vegas, NV 6 The case shall be stayed pending the United States Supreme Court’s decision in 3. Any motions currently pending before the Court in this matter will be addressed by the Court once the stay is lifted. 10 4. Pending motions do not need to be refiled with the Court. 11 5. Upon the United States Supreme Court’s decision, the Parties shall jointly petition 12 the Court to lift the stay within seven (7) days of the decision. 13 14 6. to complete fact discovery. 15 16 17 If and after the stay is lifted, the Parties will be given a reasonable amount of time 7. The Parties understand their obligations to preserve evidence while this matter is stayed. DATED this 25th day of September, 2020. 18 19 20 21 22 23 24 25 26 27 28 -4- Case 2:18-cv-02281-GMN-VCF Document 58 Filed 09/25/20 Page 5 of 6 1 2 3 4 5 6 7 8 3 3 Howard Hughes Parkway, Suite 6 Las Vegas, NV 6 9 10 11 12 13 14 15 16 17 MCNAMARA SMITH LLP LEWIS ROCA ROTHGERBER CHRISTIE LLP By: /s/ Andrew M. Greene Edward Chang (NV 11783) echang@mcnamarallp.com Cornelia J. B. Gordon (Pro Hac Vice) cgordon@mcnamarallp.com Andrew M. Greene (Pro Hac Vice) agreene@mcnamarallp.com MCNAMARA SMITH LLP 655 West Broadway, Suite 1680 San Diego, California 92101 Tel: 619-269-0400 Fax: 619-269-0401 By: /s/ Dan R. Waite Dan R. Waite (Nev. Bar # 4078) 3993 Howard Hughes Parkway, Suite 600 Las Vegas, NV 89169 Tel: (702) 949-8200 Fax: (702) 949-8398 dwaite@lrrc.com Michael F. Lynch (NV 8555) Michael@LynchLawPractice.com LYNCH LAW PRACTICE, PLLC 3613 S. Eastern Ave. Las Vegas, Nevada 89169 Tel: 702-684-6000 Fax: 702-543-3279 Richard Zack (Admitted Pro Hac Vice) Troutman Pepper Hamilton Sanders LLP 3000 Two Logan Square Eighteenth and Arch Streets Philadelphia, Pennsylvania 19103 Tel: 215-981-4084 Attorneys for Defendants Intercept Corporation, Bryan Smith, Craig Dresser, and Connie Mosier Attorneys for Court-Appointed Monitor IT IS SO ORDERED. Dated this 2 __ day of October, 2020. 18 19 20 21 Gloria M. Navarro, District Judge United States District Court 22 23 24 25 26 27 28 -5- Case 2:18-cv-02281-GMN-VCF Document 58 Filed 09/25/20 Page 6 of 6 1 2 CERTIFICATE OF SERVICE Pursuant to Fed. R. Civ. P. 5, I hereby certify that service of the foregoing “Stipulation (And 3 Proposed Order) To Stay the Proceedings” was made through the United State District Court’s 4 CM/ECF system on counsel of record. 5 6 DATED this 25th day of September, 2020. 7 8 3 3 Howard Hughes Parkway, Suite 6 Las Vegas, NV 6 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 /s/ Luz Horvath An Employee of Lewis Roca Rothgerber Christie LLP
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