Appellate Case: 18-4038 Document: 01019969195 Date Filed: 04/03/2018 Page: 1 SECURITIES AND EXCHANGE COMMISSION, UNITED STATES COURT OF APPEALS FOR THE TENTH CIRCUIT Plaintiff-Appellee, Case No.: 18-4038 v. TRAFFIC MONSOON, LLC, a Utah Limited Liability Company, and CHARLES DAVID SCOVILLE, an individual, Defendants-Appellants. MOTION TO CONSOLIDATE APPEAL WITH CASE NO. 17-4059, OR ALTERNATIVELY, MOTION FOR STAY OF APPEAL PENDING RESOLUTION OF CASE NO. 17-4059 Marquis Aurbach Coffing Micah S. Echols, Esq. Nevada Bar No. 8437 Tom W. Stewart, Esq. Nevada Bar No. 14280 10001 Park Run Drive Las Vegas, Nevada 89145 Telephone: (702) 382-0711 Facsimile: (702) 382-5816 mechols@maclaw.com tstewart@maclaw.com Smith Correll, LLP D. Loren Washburn, Esq. Utah Bar No. 10993 8 East Broadway, Suite 320 Salt Lake City, UT 84111 Telephone: (801) 584-1800 Facsimile: (866) 584-1820 dwashburn@smithcorrell.com Attorneys for Appellants, Charles David Scoville, individually and on behalf of Traffic Monsoon, LLC
Appellate Case: 18-4038 Document: 01019969195 Date Filed: 04/03/2018 Page: 2 I. INTRODUCTION Defendants-Appellants, Traffic Monsoon, LLC and Charles David Scoville ( Scoville ) (collectively Traffic Monsoon ), hereby move this Court to consolidate this appeal with pending Case No. 17-4059 pursuant to FRAP 3(b)(2), or alternatively, stay this entire appeal pending the outcome of Case No. 17-4059. Counsel for Traffic Monsoon has conferred with counsel for the SEC, and all parties agree that this Court should consolidate the instant appeal with Case No. 17-4059 because the instant appeal will not require any additional briefing. Alternatively, the parties agree that the Court should stay this appeal because the Court s determination of the issues in Case No. 17-4059 will dictate the outcome of the instant appeal. Prior to the March 21, 2018 oral argument in Case No. 17-4059, Traffic Monsoon filed a motion to supplement the record under FRAP 10(e)(3), or alternatively, motion to take judicial notice under FRE 201(b). 1 Traffic Monsoon filed this motion to notify the Court that the District Court had clarified Scoville s standing as it relates to the issues involving Traffic Monsoon. See Exhibit 1. The District Court s second amended order appointing receiver, nevertheless, still provides the receiver with overbroad powers that should either be eliminated or 1 A copy of Traffic Monsoon s motion to supplement the record under FRAP 10(e)(3), or alternatively, motion to take judicial notice under FRE 201(b) is attached for the Court s reference as Exhibit 1. Page 1 of 6
Appellate Case: 18-4038 Document: 01019969195 Date Filed: 04/03/2018 Page: 3 limited based upon the same legal issues already presented to this Court in Case No. 17-4059. Id. at attached Exhibit 1. In Case No. 17-4059, Traffic Monsoon has appealed from the injunction and receivership orders previously entered by the District Court. Id. at attached Exhibit 1, pg. 2. As such, the Court s determination of the securities, Ponzi, and Morrison issues in Case No. 17-4059 will likewise determine the scope of the appealed order in the instant appeal. Therefore, Traffic Monsoon moves this Court to consolidate the instant appeal with Case No. 17-4059. Alternatively, the Court should stay this entire appeal because no further briefing is required, and the Court s determination of the issues in Case No. 17-4059 will dictate the outcome of the instant appeal. II. LEGAL ARGUMENT Pursuant to FRAP 3(b)(2), this Court has the authority to consolidate appeals: When the parties have filed separate timely notices of appeal, the appeals may be joined or consolidated by the court of appeals. The District Court s second amended order appointing receiver is appealable according to 28 U.S.C. 1292(a)(2): [T]he courts of appeals shall have jurisdiction of appeals from:... Interlocutory orders appointing receivers.... When similar arguments are made in separate appeals, this Court has discretion to consolidate the appeals. See U.S. v. Cook, 794 F.2d 561, 562 n.1 (10th Cir. 1986). This is particularly true in the Page 2 of 6
Appellate Case: 18-4038 Document: 01019969195 Date Filed: 04/03/2018 Page: 4 instant appeal which requires no new briefing beyond what has already been filed in Case No. 17-4059. If the Court believes that some of the issues in the instant case may need to be briefed, despite the parties joint urging that no further briefing is required, the Court should, alternatively, stay this entire appeal pending the outcome of Case No. 17-4059. In other words, the Court s decision in Case No. 17-4059 will control the outcome of the identical issues in the instant appeal as they apply to the District Court s recent second amended order appointing receiver. Traffic Monsoon has appealed the District Court s second amended order appointing receiver, which is the subject of the instant appeal, out of an abundance of caution to avoid differing results from the various receivership orders. See generally In re Otasco, Inc., 18 F.3d 841 (10th Cir. 1994) (imposing a duty upon litigants to move to vacate potentially moot orders to avoid incongruous results from orders with similar issues). Therefore, the Court should either consolidate these related appeals, or alternatively, stay the entire instant appeal pending the outcome of Case No. 17-4059. III. CONCLUSION For the foregoing reasons, Traffic Monsoon respectfully moves this Court to consolidate the instant appeal with Case No. 17-4059 and resolve the issues of both appeals in a single decision. Alternatively, if the Court believes that some issues Page 3 of 6
Appellate Case: 18-4038 Document: 01019969195 Date Filed: 04/03/2018 Page: 5 of the instant appeal may need to be briefed separately, the Court should stay this entire appeal pending the outcome of Case No. 17-4059. Dated this 3rd day of April, 2018. MARQUIS AURBACH COFFING By s/ Micah S. Echols Micah S. Echols, Esq. Nevada Bar No. 8437 Tom W. Stewart, Esq. Nevada Bar No. 14280 10001 Park Run Drive Las Vegas, Nevada 89145 SMITH CORRELL, LLP By s/ D. Loren Washburn D. Loren Washburn, Esq. Utah Bar No. 10993 8 East Broadway, Suite 320 Salt Lake City, UT 84111 Attorneys for Appellants, Charles David Scoville, individually and on behalf of Traffic Monsoon, LLC Page 4 of 6
Appellate Case: 18-4038 Document: 01019969195 Date Filed: 04/03/2018 Page: 6 CERTIFICATE OF COMPLIANCE 1. This document complies the word limit of FRAP 27(d)(2)(A) because, excluding the parts of the document exempted by FRAP 32(f) and FRAP 27(a)(2)(B), this document contains 711 words. 2. This document complies with the typeface requirements of FRAP 32(a)(5) and the type style requirements of FRAP 32(a)(6) because this document has been prepared in a proportionally spaced typeface using WORD 2007 in Times New Roman, 14-point font. 3. Further, the undersigned certifies that all required privacy redactions have been made in accordance with FRAP 25(a)(5), no paper copies are required by the Court, and this document was scanned for viruses with Malwarebytes Anti- Malware 1.75.0.1300, Version 2018.03.27.08, updated March 27, 2018. Dated this 3rd day of April, 2018. MARQUIS AURBACH COFFING By s/ Micah S. Echols Micah S. Echols, Esq. Nevada Bar No. 8437 Tom W. Stewart, Esq. Nevada Bar No. 14280 10001 Park Run Drive Las Vegas, Nevada 89145 SMITH CORRELL, LLP By s/ D. Loren Washburn D. Loren Washburn, Esq. Utah Bar No. 10993 8 East Broadway, Suite 320 Salt Lake City, UT 84111 Attorneys for Appellants, Charles David Scoville, individually and on behalf of Traffic Monsoon, LLC Page 5 of 6
Appellate Case: 18-4038 Document: 01019969195 Date Filed: 04/03/2018 Page: 7 CERTIFICATE OF SERVICE I hereby certify that I electronically filed the foregoing MOTION TO CONSOLIDATE APPEAL WITH CASE NO. 17-4059, OR ALTERNATIVELY, MOTION FOR STAY OF APPEAL PENDING RESOLUTION OF CASE NO. 17-4059 with the Clerk of the Court for the United States Court of Appeals for the Tenth Circuit by using the appellate CM/ECF system on the 3rd day of April, 2018. I further certify that all participants in the case are registered CM/ECF users and that service will be accomplished by the appellate CM/ECF system. I further certify that some of the participants in the case are not registered CM/ECF users. I have mailed the foregoing document by First-Class Mail, postage prepaid, or have dispatched it to a third party commercial carrier for delivery within 3 calendar days to the following non-cm/ecf participants: s/leah Dell an employee of Marquis Aurbach Coffing Page 6 of 6
Appellate Case: 18-4038 Document: 01019969195 Date Filed: 04/03/2018 Page: 8 Exhibit 1
Appellate Case: 17-4059 18-4038 Document: 01019961534 01019969195 Date Filed: 03/19/2018 04/03/2018 Page: 19 SECURITIES AND EXCHANGE COMMISSION, UNITED STATES COURT OF APPEALS FOR THE TENTH CIRCUIT Plaintiff-Appellee, v. Case No.: 17-4059 TRAFFIC MONSOON, LLC, a Utah Limited Liability Company, and CHARLES DAVID SCOVILLE, an individual, PEGGY HUNT, Defendants-Appellants. Amicus Curiae. MOTION TO SUPPLEMENT THE RECORD UNDER FRAP 10(e)(3), OR ALTERNATIVELY, MOTION TO TAKE JUDICIAL NOTICE UNDER FRE 201(b) Marquis Aurbach Coffing Micah S. Echols, Esq. Nevada Bar No. 8437 Tom W. Stewart, Esq. Nevada Bar No. 14280 10001 Park Run Drive Las Vegas, Nevada 89145 Telephone: (702) 382-0711 Facsimile: (702) 382-5816 mechols@maclaw.com tstewart@maclaw.com Smith Correll, LLP D. Loren Washburn, Esq. Utah Bar No. 10993 8 East Broadway, Suite 320 Salt Lake City, UT 84111 Telephone: (801) 584-1800 Facsimile: (866) 584-1820 dwashburn@smithcorrell.com Attorneys for Appellants, Charles David Scoville, individually and on behalf of Traffic Monsoon, LLC
Appellate Case: 18-4038 17-4059 Document: 01019969195 01019961534 Date Filed: 04/03/2018 03/19/2018 Page: 10 2 I. INTRODUCTION Defendants-Appellants, Traffic Monsoon, LLC and Charles David Scoville (collectively Traffic Monsoon ), hereby move this Court under FRAP 10(e)(3) to supplement the record, or alternatively, under FRE 201(b) to take judicial notice of the District Court s second amended order appointing receiver 1 from which Traffic Monsoon has recently appealed. 2 Traffic Monsoon has conferred with counsel for the SEC and provided the substance of this motion to counsel, but was unable to obtain a definitive response as to any objection to the purpose of this motion prior to filing with this Court. 3 The District Court s second amended order appointing receiver clarifies that although the receiver has assumed control of the receivership assets and the business operations of Traffic Monsoon, Scoville is granted authority to appeal and advance arguments on behalf of Traffic Monsoon in the appeal presently pending in the United States Court of Appeals [for] the Tenth Circuit. Exhibit 1, pg. 2, 5. The District Court s order also prohibits the 1 The District Court s second amended order appointing receiver is attached as Exhibit 1. 2 Traffic Monsoon s notice of appeal from the District Court s second amended order appointing receiver (docketed in this Court as Case No. 18-4038) is attached as Exhibit 2. 3 Counsel for the parties have also conferred regarding a stay of Case No. 18-4038, and Traffic Monsoon will file a separate motion in that case to stay that case pending the outcome of the instant appeal since the Court s decision in this case will be determinative of the issues in Case No. 18-4038. Page 1 of 7
Appellate Case: 18-4038 17-4059 Document: 01019969195 01019961534 Date Filed: 04/03/2018 03/19/2018 Page: 11 3 receiver from present[ing] arguments on the merits of the Securities and Exchange Commission s claims against Traffic Monsoon and Scoville in the above captioned case (Case Number 2:16-cv-00832-JNP) or in any appeals from the orders or judgments of this court. Exhibit 1, pgs. 2 3. Traffic Monsoon brings the District Court s second amended order appointing receiver to this Court s attention since the order resolves the issues raised by the receiver in the proposed amicus brief. The effect of the District Court s order is for this Court to deny the receiver s pending motion for leave to file amicus brief, which was reserved for a final decision in the Court s November 6, 2017 order filed in the instant appeal. 4 Therefore, Traffic Monsoon moves this Court to supplement the record and take notice of the District Court s second amended order appointing receiver in deciding this appeal, particularly with respect to the standing issues raised by the receiver in the proposed amicus brief. II. LEGAL ARGUMENT A. THIS COURT SHOULD TAKE NOTICE OF THE DISTRICT COURT S SECOND AMENDED ORDER APPOINTING RECEIVER. Traffic Monsoon moves this Court to take notice of the District Court s second amended order appointing receiver on the basis of either FRAP 10(e)(3) or FRE 201(b). FRAP 10 generally discusses the preparation of the record on appeal. 4 The Court s order reserving final ruling on the receiver s motion for leave to file amicus brief is attached as Exhibit 3. Page 2 of 7
Appellate Case: 18-4038 17-4059 Document: 01019969195 01019961534 Date Filed: 04/03/2018 03/19/2018 Page: 12 4 Specifically, FRAP 10(e)(3) provides, All other questions as to the form and content of the record must be presented to the court of appeals. This Court has recognized that FRAP 10(e) allows parties to supplement the record. See Anthony v. United States, 667 F.2d 870, 875 (10th Cir. 1981) (citations omitted). During the pendency of this appeal, the receiver asked the District Court to clarify Scoville s ability to argue on behalf of Traffic Monsoon in this appellate proceeding. The result of the receiver s inquiry to the District Court was the District Court s clarifying order. See Exhibit 1. Even though the District Court s second amended order appointing receiver was filed during the pendency of this appeal, this Court has recognized its inherent equitable power to supplement the record on appeal. United States v. Balderama-Iribe, 490 F.3d 1199, 1202 n.4 (10th Cir. 2007). Accordingly, this Court should grant Traffic Monsoon s motion to take notice of the District Court s order on the basis of FRAP 10(e)(3). Alternatively, FRE 201(b) provides a basis for the Court to take judicial notice of the District Court s second amended order appointing receiver. FRE 201(b) authorizes courts to take judicial notice of a fact that is not subject to reasonable dispute. FRE 201(d) explains, The court may take judicial notice at any stage of the proceeding. This Court has previously held, Judicial notice may be taken at any time, including on appeal. United States v. Burch, 169 F.3d 666, 671 (10th Cir. 1999) (citations omitted). As such, FRE 201(b) provides an Page 3 of 7
Appellate Case: 18-4038 17-4059 Document: 01019969195 01019961534 Date Filed: 04/03/2018 03/19/2018 Page: 13 5 alternative basis for this Court to take judicial notice of the District Court s second amended order appointing receiver. Therefore, Traffic Monsoon moves this Court to grant this request and take notice of the District Court s order. B. THE DISTRICT COURT S SECOND AMENDED ORDER APPOINTING RECEIVER RESOLVES THE ISSUES RAISED BY THE RECEIVER IN THE PROPOSED AMICUS BRIEF IN TRAFFIC MONSOON S FAVOR. The purpose of the District Court s second amended order appointing receiver was to remove the receiver s arguments on standing. Notably, the receiver has not taken the position in the proposed amicus brief that Scoville, individually, lacks standing to raise all of the issues presented in this appeal. Instead, the receiver suggests that Traffic Monsoon cannot make arguments due to the expansive scope of the receivership orders. However, the District Court was concerned that this Court may construe the receiver s arguments to deprive any party of standing to present the substantive issues in this appeal. The District Court s second amended order appointing receiver now confirms that both Scoville and Traffic Monsoon have standing to present the substantive issues in this appeal. Exhibit 1, pg. 2, 5. The District Court s order also clarifies that the receiver cannot take a position on the merits of the dispute between the SEC and Traffic Monsoon/Scoville. Id., pgs. 2 3. These two clarifications from the District Court now make the receiver s proposed amicus brief moot, and the Court should deny the receiver s motion for leave to file amicus brief. Page 4 of 7
Appellate Case: 18-4038 17-4059 Document: 01019969195 01019961534 Date Filed: 04/03/2018 03/19/2018 Page: 14 6 III. CONCLUSION In summary, the Court should take notice of the District Court s second amended order appointing receiver on the basis of FRAP 10(e)(3), or alternatively, FRE 201(b). Once the Court takes notice of this order, it should also deny the receiver s proposed amicus brief. The District Court s order clarifies that Scoville and Traffic Monsoon, indeed, have standing to present the issues in this appeal, and the receiver is not permitted to take a position on the merits of the substantive issues presented to this Court. Dated this 19th day of March, 2018. MARQUIS AURBACH COFFING By s/ Micah S. Echols Micah S. Echols, Esq. Nevada Bar No. 8437 Tom W. Stewart, Esq. Nevada Bar No. 14280 10001 Park Run Drive Las Vegas, Nevada 89145 SMITH CORRELL, LLP By s/ D. Loren Washburn D. Loren Washburn, Esq. Utah Bar No. 10993 8 East Broadway, Suite 320 Salt Lake City, UT 84111 Attorneys for Appellants, Charles David Scoville, individually and on behalf of Traffic Monsoon, LLC Page 5 of 7
Appellate Case: 18-4038 17-4059 Document: 01019969195 01019961534 Date Filed: 04/03/2018 03/19/2018 Page: 15 7 CERTIFICATE OF COMPLIANCE 1. This document complies the word limit of FRAP 27(d)(2)(A) because, excluding the parts of the document exempted by FRAP 32(f) and FRAP 27(a)(2)(B), this document contains 1,073 words. 2. This document complies with the typeface requirements of FRAP 32(a)(5) and the type style requirements of FRAP 32(a)(6) because this document has been prepared in a proportionally spaced typeface using WORD 2007 in Times New Roman, 14-point font. 3. Further, the undersigned certifies that all required privacy redactions have been made in accordance with FRAP 25(a)(5), no paper copies are required by the Court, and this document was scanned for viruses with Malwarebytes Anti- Malware 1.75.0.1300, Version 2018.03.19.05, updated March 19, 2018. Dated this 19th day of March, 2018. MARQUIS AURBACH COFFING By s/ Micah S. Echols Micah S. Echols, Esq. Nevada Bar No. 8437 Tom W. Stewart, Esq. Nevada Bar No. 14280 10001 Park Run Drive Las Vegas, Nevada 89145 SMITH CORRELL, LLP By s/ D. Loren Washburn D. Loren Washburn, Esq. Utah Bar No. 10993 8 East Broadway, Suite 320 Salt Lake City, UT 84111 Attorneys for Appellants, Charles David Scoville, individually and on behalf of Traffic Monsoon, LLC Page 6 of 7
Appellate Case: 18-4038 17-4059 Document: 01019969195 01019961534 Date Filed: 04/03/2018 03/19/2018 Page: 16 8 CERTIFICATE OF SERVICE I hereby certify that I electronically filed the foregoing MOTION TO SUPPLEMENT THE RECORD UNDER FRAP 10(e)(3), OR ALTERNATIVELY, MOTION TO TAKE JUDICIAL NOTICE UNDER FRE 201(b) with the Clerk of the Court for the United States Court of Appeals for the Tenth Circuit by using the appellate CM/ECF system on the 19th day of March, 2018. I further certify that all participants in the case are registered CM/ECF users and that service will be accomplished by the appellate CM/ECF system. I further certify that some of the participants in the case are not registered CM/ECF users. I have mailed the foregoing document by First-Class Mail, postage prepaid, or have dispatched it to a third party commercial carrier for delivery within 3 calendar days to the following non-cm/ecf participants: s/leah Dell an employee of Marquis Aurbach Coffing Page 7 of 7
Appellate Case: 18-4038 17-4059 Document: 01019969195 01019961534 Date Filed: 04/03/2018 03/19/2018 Page: 17 9 Exhibit 1
Case 2:16-cv-00832-JNP Document 120 Filed 02/16/18 Page 1 of 7 Appellate Case: 17-4059 18-4038 Document: 01019961534 01019969195 Date Filed: 03/19/2018 04/03/2018 Page: 10 18 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF UTAH SECURITIES AND EXCHANGE COMMISSION, Plaintiff, v. TRAFFIC MONSOON, LLC and CHARLES D. SCOVILLE, SECOND AMENDED ORDER APPOINTING RECEIVER Case No. 2:16-cv-00832-JNP District Judge Jill N. Parrish Defendants. IT IS HEREBY ORDERED: 1. Mary Margaret Hunt of Dorsey & Whitney LLP is hereby appointed to serve without bond as receiver (Receiver) for the purpose of marshaling and preserving all assets of Traffic Monsoon, LLC and all assets of Charles D. Scoville (Scoville) that were obtained directly or indirectly from Traffic Monsoon (Receivership Assets). 2. From the date of the entry of this Order until further notice is provided by this court, the Receiver shall have the following general powers and duties. I. General Powers and Duties of Receiver 3. Except for the powers reserved for Scoville described in paragraph 5 below, the Receiver shall have all powers, authorities, rights and privileges heretofore possessed by the officers, directors, managers and general and limited partners of Traffic Monsoon, and any affiliated entities owned or controlled by Traffic Monsoon or Scoville (Receivership Defendants) under applicable law, by the governing charters, by-laws, articles and/or agreements in addition to all powers and authority of a receiver at equity, and all powers conferred upon a receiver by
Case 2:16-cv-00832-JNP Document 120 Filed 02/16/18 Page 2 of 7 Appellate Case: 17-4059 18-4038 Document: 01019961534 01019969195 Date Filed: 03/19/2018 04/03/2018 Page: 11 19 the provisions of 28 U.S.C. 754, 959 and 1692, and Rule 66 of the Federal Rules of Civil Procedure. 4. The trustees, directors, officers, managers, employees, investment advisors, accountants, attorneys and other agents of Traffic Monsoon shall have no authority with respect to Traffic Monsoon s operations or assets, except to the extent as may hereafter be expressly granted by the Receiver. The Receiver shall assume control of the Receivership Assets and the operation of Traffic Monsoon and any affiliated entities owned or controlled by the Receivership Defendants and shall pursue and preserve all of their claims. 5. Scoville is granted authority to appeal and advance arguments on behalf of Traffic Monsoon in the appeal presently pending in the United States Court of Appeals of the Tenth Circuit pursuant to the Notice of Interlocutory Appeal [Dkt. 85] or any further appeal seeking to modify the following Orders of this court: a. Order granting Motion to Appoint Receiver [Dkt. 11] and Amended Order Appointing Receiver [Dkt. 81]; b. Temporary Restraining Order and Order Freezing Assets [Dkt. 8] and Amended Temporary Restraining Order and Order Freezing Assets [Dkt. 56]; c. Memorandum Decision and Order Granting A Preliminary Injunction and Denying The Defendants Motion To Set Aside The Receivership [Dkt. 79]; and d. Preliminary Injunction [Dkt. 80]. If Scoville wishes to make arguments on behalf of Traffic Monsoon upon remand to this court, he may petition the court to do so. Scoville and his counsel shall have no right to payment or reimbursement from the Receivership Assets for any fees, expenses, or costs incurred in this action or any appeal therefrom. The Receiver must obtain prior approval from this court before 2
Case 2:16-cv-00832-JNP Document 120 Filed 02/16/18 Page 3 of 7 Appellate Case: 17-4059 18-4038 Document: 01019961534 01019969195 Date Filed: 03/19/2018 04/03/2018 Page: 12 20 using Receivership Assets to present arguments on the merits of the Securities and Exchange Commission s claims against Traffic Monsoon and Scoville in the above captioned action (Case Number 2:16-cv-00832-JNP) or in any appeals from the orders or judgments of this court. II. Access to Information 6. The Receivership Defendants and the past and/or present officers, directors, agents, managers, general and limited partners, trustees, attorneys, accountants, agents, including those maintaining and/or hosting servers or websites, and employees of the entity Receivership Defendants, as well as those acting in their place, are hereby ordered and directed to immediately preserve and turn over to the Receiver forthwith all paper and electronic information of, and/or relating to Traffic Monsoon and/or all property interests of Traffic Monsoon; such information shall include but not be limited to books, records, documents, accounts and all other instruments and papers. 7. The Receivership Defendants and their agents shall provide any passwords and execute any documents required to access any computer or electronic files of Traffic Monsoon in any medium, including but not limited to electronically stored information stored, hosted or otherwise maintained by an electronic data host. III. Access to Books, Records and Accounts 8. The Receiver is authorized to take immediate possession of all assets, bank accounts or other financial accounts, books and records and all other documents or instruments relating to Traffic Monsoon or the Receivership Assets. All persons and entities having control, custody or possession of any Receivership Assets are hereby directed to turn such property over to the Receiver. 9. The Receivership Defendants, as well as their agents, servants, employees, attorneys, 3
Case 2:16-cv-00832-JNP Document 120 Filed 02/16/18 Page 4 of 7 Appellate Case: 17-4059 18-4038 Document: 01019961534 01019969195 Date Filed: 03/19/2018 04/03/2018 Page: 13 21 accountants any persons acting for or on behalf of the Receivership Defendants, and any persons receiving notice of this Order by personal service, facsimile transmission or otherwise, having possession of Receivership Assets or books, records, or accounts of Receivership Assets are hereby directed to deliver the same to the Receiver, her agents and/or employees. IV. Access to Real and Personal Property 10. The Receiver is authorized to take immediate possession of all personal property of Traffic Monsoon, wherever located, including but not limited to electronically stored information, computers, laptops, hard drives, servers, external storage drives, and any other such memory, media or electronic storage devices, books, papers, data processing records, evidence of indebtedness, bank records and accounts, savings records and accounts, brokerage records and accounts, certificates of deposit, stocks, bonds, debentures, and other securities and investments, contracts, mortgages, furniture, office supplies and equipment. 11. The Receiver is authorized to take immediate possession of all real property of Traffic Monsoon, wherever located. Upon receiving actual notice of this Order by personal service, email or facsimile transmission or otherwise, all persons other than law enforcement officials acting within the course and scope of their official duties, are (without the express written permission of the Receiver) prohibited from: (a) entering such premises; (b) removing anything from such premises; or, (c) destroying, concealing, disposing of, transferring, or erasing anything on such premises. 12. In order to execute the express and implied terms of this Order, the Receiver is authorized to change door locks to the premises described above. The Receiver shall have exclusive control of the keys. The Receivership Defendants, or any other person acting or purporting to act on their behalf, are ordered not to change the locks in any manner, nor to have 4
Case 2:16-cv-00832-JNP Document 120 Filed 02/16/18 Page 5 of 7 Appellate Case: 17-4059 18-4038 Document: 01019961534 01019969195 Date Filed: 03/19/2018 04/03/2018 Page: 14 22 duplicate keys made, nor shall they have keys in their possession during the term of the receivership. 13. The Receiver is authorized to open all mail directed to or received by or at the offices or post office boxes of the Traffic Monsoon, and to inspect all mail opened prior to the entry of this Order, to determine whether items or information therein fall within the mandates of this Order. V. Notice to Third Parties 14. The Receiver is authorized to instruct the United States Postmaster to hold and/or reroute mail which is related, directly or indirectly, to the business, operations or activities of Traffic Monsoon (Receiver s Mail), including all mail addressed to, or for the benefit of, Traffic Monsoon. The Postmaster shall not comply with, and shall immediately report to the Receiver, any change of address or other instruction given by anyone other than the Receiver concerning the Receiver s Mail. The Receivership Defendants shall not open any of the Receiver s Mail and shall immediately turn over such mail, regardless of when received, to the Receiver. The foregoing instructions shall apply to any proprietor, whether individual or entity, of any private mail box, depository, business or service, or mail courier or delivery service, hired, rented or used by the Receivership Defendants. The Receivership Defendants shall not open a new mailbox, or take any steps or make any arrangements to receive mail in contravention of this Order, whether through the U.S. mail, a private mail depository or courier service. VI. Liability of Receiver 15. Until further order of this court, the Receiver shall not be required to post bond or give an undertaking of any type in connection with her fiduciary obligations in this matter. 16. The Receiver, her counsel, and her agents, acting within scope of such agency 5
Case 2:16-cv-00832-JNP Document 120 Filed 02/16/18 Page 6 of 7 Appellate Case: 17-4059 18-4038 Document: 01019961534 01019969195 Date Filed: 03/19/2018 04/03/2018 Page: 15 23 (Retained Personnel) are entitled to rely on all outstanding rules of law and orders of this court and shall not be liable to anyone for their own good faith compliance with any order, rule, law, judgment, or decree. In no event shall the Receiver or Retained Personnel be liable to anyone for their good faith compliance with their duties and responsibilities as Receiver or Retained Personnel, nor shall the Receiver or Retained Personnel be liable to anyone for any actions taken or omitted by them except upon a finding by this court that they acted or failed to act as a result of malfeasance, bad faith, gross negligence, or in reckless disregard of their duties. VII. Fees and Expenses 17. Subject to paragraphs 18 19 immediately below, the Receiver need not obtain court approval prior to the disbursement of receivership funds for expenses in the ordinary course of the administration and operation of the receivership, including but not limited to costs associated with communications with potential claimants and securing electronic information. 18. The Receiver is authorized to employ professionals to assist her in carrying out the duties and responsibilities described in this Order. The Receiver shall not engage any professionals without first obtaining an order of the court authorizing such engagement. The Receiver is authorized to retain Dorsey & Whitney LLP, a firm in which the Receiver is a partner, as the Receiver s counsel in this matter. 19. The Receiver and Retained Personnel are entitled to reasonable compensation and expense reimbursement from the receivership estate as described in the Billing Instructions for Receivers in Civil Actions Commenced by the U.S. Securities and Exchange Commission agreed to by the Receiver. Such compensation shall require the prior approval of the court. DATED February 16, 2018 6
Case 2:16-cv-00832-JNP Document 120 Filed 02/16/18 Page 7 of 7 Appellate Case: 17-4059 18-4038 Document: 01019961534 01019969195 Date Filed: 03/19/2018 04/03/2018 Page: 16 24 Jill N. Parrish United States District Judge 7
Appellate Case: 17-4059 18-4038 Document: 01019961534 01019969195 Date Filed: 03/19/2018 04/03/2018 Page: 17 25 Exhibit 2
Case 2:16-cv-00832-JNP Document 124 Filed 03/13/18 Page 1 of 3 Appellate Case: 17-4059 18-4038 Document: 01019961534 01019969195 Date Filed: 03/19/2018 04/03/2018 Page: 18 26 D. Loren Washburn (#10993) lwashburn@smithcorrell.com SMITH CORRELL, LLP 8 East Broadway, Suite 320 Salt Lake City, UT 84111 Telephone: (801) 584-1800 Facsimile: (866) 584-1820 Attorneys for Defendant Charles Scoville IN THE UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF UTAH SECURITIES AND EXCHANGE COMMISSION, Plaintiff, NOTICE OF APPEAL v. TRAFFIC MONSOON, LLC, a Utah Limited Liability Company, and CHARLES DAVID SCOVILLE, an individual, Civil No.: 2:16-cv-00832-JNP Judge: Jill N. Parrish Defendants. {00052371 1 }
Case 2:16-cv-00832-JNP Document 124 Filed 03/13/18 Page 2 of 3 Appellate Case: 17-4059 18-4038 Document: 01019961534 01019969195 Date Filed: 03/19/2018 04/03/2018 Page: 19 27 NOTICE OF APPEAL Defendant Charles Scoville, individually and on behalf of Defendant Traffic Monsoon, hereby appeals to the United States Court of Appeals for the Tenth Circuit from [ECF No. 120] Second Amended Order Appointing Receiver entered in this action on February 16, 2018. DATED: March 13, 2018. SMITH CORRELL, LLP /s/ D. Loren Washburn D. Loren Washburn {00052371 1 } 1
Case 2:16-cv-00832-JNP Document 124 Filed 03/13/18 Page 3 of 3 Appellate Case: 17-4059 18-4038 Document: 01019961534 01019969195 Date Filed: 03/19/2018 04/03/2018 Page: 20 28 CERTIFICATE OF SERVICE I hereby certify that on March 13, 2018, the foregoing NOTICE OF APPEAL was served upon the person(s) named below, at the address set out below by Electronic Filing: Daniel J. Wadley Amy J. Oliver Alison J. Okinaka Cheryl M. Mori SECURITIES EXCHANGE COMMISSION 351 South West Temple, Suite 6.100 Salt Lake City, Utah 84101 Peggy Hunt Michael F. Thomson John Jeffrey Wiest Nathan S. Seim DORSEY & WHITNEY LLP 111 South Main Street, 21 st Floor Salt Lake City, UT 84111 /s/ Melina Hernandez {00052371 1 } 2
Appellate Case: 17-4059 18-4038 Document: 01019961534 01019969195 Date Filed: 03/19/2018 04/03/2018 Page: 21 29 Exhibit 3
Appellate Case: 17-4059 18-4038 Document: 01019961534 01019969195 01019896443 Date Filed: 03/19/2018 04/03/2018 11/06/2017 Page: 22 30 1 FILED United States Court of Appeals UNITED STATES COURT OF APPEALS Tenth Circuit SECURITIES AND EXCHANGE COMMISSION, Plaintiff - Appellee, FOR THE TENTH CIRCUIT November 6, 2017 Elisabeth A. Shumaker Clerk of Court v. TRAFFIC MONSOON, LLC; CHARLES D. SCOVILLE, No. 17-4059 (D.C. No. 2:16-CV-00832-JNP) (D. Utah) Defendants - Appellants. PEGGY HUNT, Amicus Curiae. ORDER Before MATHESON and BACHARACH, Circuit Judges. This matter comes on for consideration of the Receiver s Motion for Leave to File Amicus Brief, the opposition filed thereto, and the reply filed. Upon consideration thereof, the motion is provisionally granted, with the final decision to be made by the merits
Appellate Case: 17-4059 18-4038 Document: 01019961534 01019969195 01019896443 Date Filed: 03/19/2018 04/03/2018 11/06/2017 Page: 23 31 2 panel. It is further ordered that the appellants request for additional time to file their reply brief is granted. The appellants reply brief is due by November 27, 2017. Entered for the Court ELISABETH A. SHUMAKER, Clerk by: Ellen Rich Reiter Jurisdictional Attorney 2