McCaffrey v. Gatekeeper USA, Inc

Background

Timothy Andrew McCaffrey, proceeding without a lawyer, brought claims alleging securities fraud and negligent misrepresentation against Gatekeeper USA, Inc., Asgard International, Inc., Ares Ventures Inc., A. John Leontakianakos, and John Seetoo. On March 28, 2022, the court granted McCaffrey’s motion for summary judgment, a procedure allowing judgment when the record shows no genuine dispute over a material fact. The Clerk entered judgment on March 29, 2022.

The defendants later filed a motion asking the court to clarify the judgment, which the court denied. They then filed the motion addressed in this order, asking the court to vacate the judgment. Because the defendants did not identify a procedural basis for their request and were representing themselves, the court treated it as a motion under Federal Rule of Civil Procedure 60(b), specifically Rule 60(b)(6). That provision permits relief from a final judgment for a reason that justifies relief, but the court explained that such relief is extraordinary and generally requires exceptional circumstances.

Defendants’ Argument

The defendants argued that the court had based its summary-judgment decision on exhibits supplied by McCaffrey from an SEC order involving nonparty Howard Richards. The court rejected that characterization. It stated that the decision was based on the undisputed facts identified in the earlier summary-judgment order. The court also stated that the defendants had not properly addressed McCaffrey’s factual assertions as required by Rule 56, and that they did not dispute that the SEC had issued an order finding that Richards engaged in a manipulative scheme supporting the market price of Gatekeeper’s common stock. Instead, they challenged the implications or characterizations of that order.

The court emphasized that the SEC order was not necessary to its summary-judgment decision. It therefore concluded that the defendants’ arguments concerning that order were not highly convincing evidence supporting relief from the judgment.

Ruling

The court held that the defendants had not shown highly convincing evidence, good cause for failing to act sooner, or any reason to believe that leaving the judgment in place would cause undue hardship. It also determined that the motion was an improper attempt to relitigate the case. Exercising its discretion under Rule 60(b), the court denied defendants’ motion to vacate the judgment. The order also directed the Clerk to mail copies to McCaffrey and the individual defendants and reminded the parties of a previously ordered status conference.