United States Securities and Exchange Commission v. Carebourn Capital, L.P.

Background

The court had previously granted the Securities and Exchange Commission’s motion for summary judgment on liability. Summary judgment is a decision resolving issues without a trial when the court determines that there is no genuine dispute requiring a trial. This order addressed only how the remedies phase would be decided.

After a status conference, the court asked the parties to address whether the remedies issue should be decided by the court or a jury. The SEC argued that the court should decide. The defendants argued that a jury should decide the remedies and, alternatively, asked the court to use an advisory jury under Federal Rule of Civil Procedure 39(c). The defendants also raised concerns about possible new witnesses and evidence from the SEC.

Ruling

The court held that the remedies issue was for the court to decide. It relied on Eighth Circuit decisions stating that a defendant may have a right to a jury determination of liability in a Securities and Exchange Commission enforcement action but does not have a right to have the jury determine the remedies available to the agency. The court found that the defendants’ reliance on the parties’ jury demands did not change that conclusion.

The court also declined to use an advisory jury. It found that the circumstances did not present the reasons that have led other courts to use advisory juries, such as uncertainty about the right to a jury or a combination of jury and non-jury claims. The court stated that it would not give an advance ruling on the defendants’ concerns about undisclosed evidence because those concerns were speculative, but noted that either party could seek relief under applicable procedural rules concerning evidence.

Next steps and disposition

The court noted that similar cases had addressed remedies through written briefs and documentary evidence. It said it was open to that approach, with oral argument or a limited evidentiary hearing if necessary. The parties were ordered to meet and confer within 14 days of the order and, within 30 days, submit a proposed briefing schedule. If they could not agree on a procedure, each side was required to submit a letter of no more than three pages explaining its proposed procedures and supporting authority.

The defendants’ request for a jury trial concerning remedies was DENIED. The court stated that it would decide the remedies issue. The order did not determine what remedies, if any, the SEC would receive.