Post by sandi66 on Aug 3, 2010 15:10:34 GMT -5
morethanfishin provided her notes from transcribing the MP3... transcribed 8/3/10
AH: Good Afternoon your Honor, A. Clifton Hodges on behalf of the plaintiffs, two of whom are in the courtroom today, Mr. Hamilton and Mr. Treffery.
Judge: Good afternoon, welcome.
SEC; Good afternoon your Honor, this is U.S. Attorney Keith Staub on behalf of the Federal defense.
Judge: Good afternoon Have you had a chance to review the tentative?
Both say yes your honor
Judge: Mr. Hodges I think I would like to hear from you first please
AH: Your Honor, first of all let me concede the point raised in your tentative that this is not your usual Bivens case. That is clear for everyone I think. As a house keeping matter on page one there is a typographical error, in the middle paragraph the Administrative Law Judge’s finding was in 2005 not in 2010.
Judge: Thank you.
AH: Having said that, let me refer you to the second issue raised by the government first. It asks the question whether or not there are property rights at issue in this case. And very simply what we have alleged is, let me back up a second. We have alleged a scheme, in effect a sting operation, judged from the outside not from the inside. Basically the sting operation was an operation put into effect through the Office of Homeland Security, the Department of Justice, and the SEC Commissioners. What we have alleged is that the SEC Commissioners as opposed to the Agency itself, coordinated with these other institutions and at their request and in concert with them began a program, whereby, this company was raided. The SEC Commission was fully aware, at all times, of the amount of naked shorting going on in this company. The then Chairman of the commission has been quoted on several occasions as saying this was the most heavily naked shorted company in the history of the world. As we have alleged in our complaint one day, which I believe was in April 2005, some more than 90 billion shares of this company were traded in one day. I have testimony from, which is not alluded to in our current complaint, but I can provide testimony from registered NSASDA companies, that were in business at this time, who report that they were told “it’s free money”. You can sell as many shares as you can find buyers for and put all of the money in your pocket. You don’t ever have to buy the share. They were on a no borrow list to begin with, at that point in time, which was in 2005 primarily. And if you were going to borrow shares as a legitimate broker in that point in time, they had a $2.50 requirement for borrowing. You can imagine with some, I think they averaged during that time 17 billion shares a day being sold, this is an enormous amount of money for people to be borrowing shares to be sold into the market. They were being sold for nothing that is how they drove this company into the ground. They did it because there was evidence by the government, and by others, associated both directly and indirectly with the government, that this money was being sent offshore. It was being accumulated by hedge funds offshore, it was being sent to Iraq, and it was being sent to Iran, it was being sent to Afghanistan, it was being sent to Hezbollah, this was one of the means in which these terrorist organizations were utilizing them to fund their operations. Having said that, I recognized when I prepared this complaint at the time the company was being de-listed, and the time this original agreement was made, we did not have a basis to sue the SEC, the SEC commissioners, or anybody else. Because in fact, as the Court correctly points out, in regard to (quoted a case) it said the shareholders don’t have a right, they don’t have a property interest. If they did not have that right at the time the agreement was made, at the time the original ultra viral criminal acts by these Commissioners took place. However, what this complaint speaks to is at quite a later date after the company was de-listed in October of 2005, and they stipulated to that delisting, Then we go forward and what immediately happened was a Task Force, including one primary and past board of director members, Mr. Bob Mahue, who is no longer with us unfortunately, became the head of that Task Force. His appointed duties, and the Task Force appointed duties, were to have the shareholders pull copies of their shares, pull certificates for every share that was legitimately then owned because it had been bought and paid for, and based upon that share certificate pull, then turn around and liquidate the company. At the time the company decided it was going to liquidate itself and distribute its remaining assets to its shareholders the property rights attached to each of the shareholders because at that point in time, this was in early 2006, they had a right to believe that what was in their future was a distribution, a prorate per share distribution of the assets that the company then owned. The company then owned all of these monies that had been accumulated and put into trusts. The company also owned shares of stock in a company called Entourage and they had other assets. They did not have any substantial liabilities. So the share holders, from that point forward, had a property right that is protectable under the Constitution. It is that claim that we are basing our complaint. Having said that, once we get past the property rights issue, I certainly understand the Courts concern and I have reviewed my complaint, about, perhaps the use of some in artful language when I referred to the SEC rather than specifying that it was the SEC commissioners that we are aiming this at. The reason we are aiming only at the SEC commissioners is because under the statutory scheme that was set up after the Great Depression, the SEC commission and commissioners individually have the sole and exclusive right to make the decisions. For example with this firm, when this company was de-listed in October of 2005, it was pursuant to an Administrative Law Hearing that took place here in Los Angeles, a full day down in Federal Court, that I attended. The Administrative Law Judge then rendered a tentative decision. It was her decision but it was tentative in the sense that it had no power and had no effect. The only time that it became effective was when the company became de-listed on October 24th or 25th of that year when the Commission met and together agreed that this company should be de-listed. They are the only people who have the power to make these kinds of decisions. They are the people who spoke to the other governmental agencies and to the people representing, at least ostensibly the company at that point in time, with this agreement to utilize this company without knowledge to the shareholders as part of a sting operation to trap all of these hedge fund people. That started way back in 2004. But it was those commissioners acting in an improper and Ultra Viral and probably criminal way because their mandate under the law is to protect the shareholders. They were doing exactly the opposite. They were entering into an agreement they knew way going to damage the shareholders, it was going to drive this company out of business, which it did, and without notice in a big secret. It was only those commissioners who took that action that we are aiming this complaint at. We have named the commissioners that have sat since that time because it is our position that having denied these people payment these commissioners have signed on ratifying the acts of their fellow criminals or miscreants, at least, and at the end of the day refuse to release this money. Money that has been collected, we are not suing the SEC, we aren’t suing the government.
Judge: who, in your analysis, is the trustee of the funds? Who holds the funds?
AH: There are actually several trustees who hold the funds, one of whom is currently the DTCC. I only say that because I know the funds are on deposit with the DTCC.
Judge: OK spin that out for me.
AH: The depository trust & clearing corporation, they are the clearing house for all the financial transactions basically that they placed in Trust
Judge: Privately or publicly?
AH: They are a private company but they act as public one.
Judge: As opposed to governmental
AH: It is not a governmental agency in the same sense that the Federal Reserve Banks are not government.
Judge: What document governs the terms under which they hold those funds?
AH: A trust agreement.
Judge: Between?
AH: Between the people who provisionally set this up
Judge: Who are?
AH: One of whom was Bob Maheu.
Judge: As an employee of the SEC?
AH: Not as an employee of the SEC in any sense of the word, he was at one time on the Board of Directors of the company CMKX Diamonds.
Judge: right
AH: He never acted on behalf of the SEC.
Judge: What control does the sec have over this trust fund?
AH: They don’t have any direct control over the trust fund. The agreement, however, that was originally entered into, as I understand the testimony of my, what I have been able to accumulate without the opportunity to do actual discovery, my understanding is that Bob Maheu and several of his associates entered into a deal first with the Department of Justice, they got the SEC on board through the commissioners by talking to several of them. Primarily Christopher Cox.
Judge: Who is a defendant, a named defendant who used to be the Chairman?
AH: The essence of the agreement they made was that in order to make this sting effective the company would go and pump its stock, which it did, the government would assist in that operation, which it did
Judge: How?
AH: There is evidence that they paid for some of the expenses associated with a car, a drag racing car that had CMKX painted on the outside of it that was being very publicly bandied about the internet and raced in various jurisdictions. One of their ex-employees a gentleman named Roger Glenn, an attorney, he used to be an attorney in New York with the law firm Angell & Edwards signed on to increase the stock at the request of the SEC, I am told. He came on to or into CMKX in 2004. When he arrived there the number of authorized shares for the company some where of 100 or 200 billion, I forget exactly what, when he left some nine or ten months later the number of authorized shares had illegally and improperly, under every law that I am aware of at least, had been raised to 800 billion shares. And this company eventually sold some 700 billion shares of stock. And there is over that many outstanding shares, 703 billion plus.
Judge: Why isn’t your client against the clearing house acting as trustee for these funds?
AH: Because that would be like suing the escrow company.
Judge: Yeah but the escrow company has the funds.
AH: As I started to say, here is the simple answer, your Honor, as I started to say a few minutes ago and I probably did not finish. The original agreement, there was a war that ensued after the sting got under operation because what the sting always contemplated was that Mr. Maheu would collect all of these bad doers, the hedge fund people and people like T.D. Waterhouse and all the other stock brokerage houses around who were naked shorting this company, collect them all in a big room and offer them a deal for two reasons. First of all to collect money for CMKX for what had been done to them, and second of all to teach these people a lesson that there were people out there watching what was going on. Hopefully that would head them off from continuing in such illicit and illegal and improper behavior. That was in fact done and I have a witness that was there when it was done. They had a room about three times the size of your courtroom in which they had representative from all of these brokerages from all over the world. They watched a video presentation, because Mr. Maheu, as the court may be aware, was at one time closely associated with the CIA, Howard Hughes and all kinds of other people.
Judge: I was going to ask you whether that was the same Bob Maheu.
AH: It is indeed the same one, a gentleman I happened to make acquaintances with in the 70’s to my good fortune. At any rate all of these people were in this room and were shown a video and a slide presentation of all of the evidence of their wrongdoing and they were offered an opportunity to either step up and sign away your money and pay a reasonable amount for each transaction you did illegally and improperly or go walk out of here and get prosecuted and go to jail because what you did was criminal. Every single person in that room stepped up and made a deal. After that time there became a big conflict between the SEC commissioners and the other governmental entities who were supporting the SEC commissioners about who was going to have the right to release this money to the shareholders and when, My understanding is that it went on for some number of months but ultimately the SEC commissioners prevailed and convinced Mr. Maheu and his associates that it had to be their decision because only they and the rest of the government could determine when this sting had fulfilled its function. That was the basis on which he gave them the power to make this decision about when the money is to be released. It is my understanding that every trust that is currently being held for release of this money is being held by a person who is sworn to observe that requirement. That the SEC, the US government whoever is to make this payment, goes first. Since my information is that was the SEC commissioners that have this power, this is why they are the defendants in this case.
Judge: Let’s return to your Bivens theory, it is taking a head point
AH: this money was supposed to have been released within a year of the time the company was originally de-listed in October of 2005. This is now almost October of 2010, some 4 years past that time. It is taking only because they refuse, not withstanding information they have continued to give to the shareholders, they continue to refuse to release this money. If they don’t release they money then it is a taking. Because they are preventing what is rightfully ours for us to receive. That is why it is a taking.
Judge: Thank You
AH. You are welcome
Judge: Mr. Staub
SEC: Thank you your Honor. I have to admit most of what I just heard I heard for the first time because most of it wasn’t in the claim.
Judge: I found it very educational.
SEC: Indeed. True or not I don’t know but we are here to discuss what is in the complaint today. We’re not here to give oral argument and give testimony to facts no one has any idea about, certainly not myself. We are here to talk about what is in the complaint, whether it was properly pled under rule 8, the Bell decision and Twombly. As this Court pointed out in its tentative it is not properly pled.
Judge: Yeah I am satisfied with that in the tentative. The case would be for the plaintiff to dismiss the plead, to re-plead. I guess what I am really interested in is whether this is an appearance claim given the nature of the asset ad whether sovereign immunity applies.
SEC: Well I suppose they can sue a government official under Bivens for any violation of civil rights whether it has to do with money or not. I don’t know any distinguishing facts in this case that would prevent them from being sued individually under Bivens if there are sufficient facts.
Judge: Well if you concede in theory that a Constitution violation of the taking clause could be asserted against an individual an individual government worker.
SEC: Well I haven’t researched that so I don’t know the answer to that specifically. We asserted on our brief the original invest property because pursuant to the complaint the SEC had the discretion to release funds, if in fact there are these funds in existence, that discretion alone, under the case law that we cited suggests that they don’t have the property rights. But the answer to your question is I don’t know.
Judge: Well there are two questions I guess. One is there a property right and is the contingent asset, if you will, subject to distribution to the plaintiffs at the will of the commission. But there is a separate issue is whether the nature of the relief sought here is such that it can only be asserted against the commissioners in their official capacity.
SEC Well, I don’t think the government has a way of stopping the release in official capacity or in any way.
Judge: Well I understand that, the issue is, is there some manner which these crimes could be asserted against the individual defendants in their individual capacities or is the relief sought by definition relief that can only be sought in their official capacity in which case there can be no private claim they would be entitled to sovereign immunity in their official capacity
SEC That may be the case, I don’t know the answer to that. I think the court is inclined to be consistent with its tentative as far as the pleading requirements. I think the plaintiffs have an opportunity to re-plead to amend the complaint. We will certainly deal with the issue that the Court raised on further briefing; I imagine there will be an additional motion to dismiss in the future. But that being said clearly these are high level government officials, they don’t deserve to be sued and discovery taken of them. I am not specific; obligations have been made by some. And none have been made to a distant point. I hears some issues were addressed during oral argument that I didn’t see in the complaint, even assuming those are true there is nothing specific to these SEC commissioners other than the fact that they some how have the sole discretion to make every single decision at the SEC. I don’t buy that.
Judge: would you agree it might be easier to assess whether claims can be asserted against the commissioners as individuals if we have a complaint that complies with Bell.
SEC: That may be true, yes. If it’s in a fact complied and fitting the requirements of Bell and it can pass qualified immunity which also remains in the court obviously doesn’t need to address right now. But if and when the Court decides it’s been properly pled then I think qualified immunity should be addressed.
Judge: Well what I am going to do is dismiss with dicree to re-plead for failure to meet the Rule 8 requirements. Again not---And to dismiss the claims against them in their official capacity as a matter of sovereign immunity and leave the other issues until we have pleading that passes muster.
AH: Agree your Honor.
SEC I would only ask you honor the government have 30 days to respond and to AH: Agree your Honor.
SEC I would only ask you honor the government have 30 days to respond and to talk to my People. Thank you..
Judge: Mr. Hodges
AH: I certainly recognize, your Honor, the need to be more specific in the complaint and I appreciate the Courts willingness to give us the opportunity if that is the Courts
Judge: I understand you want
AH 45 days with the
Judge: any objections?
SEC None your Honor
Judge You have 30 days to respond by answering in a motion
AH; That is fine your Honor
Judge: OK we will modify the tentative accordingly
ty morethan
ty flips for filling in the "blanks"
AH: Good Afternoon your Honor, A. Clifton Hodges on behalf of the plaintiffs, two of whom are in the courtroom today, Mr. Hamilton and Mr. Treffery.
Judge: Good afternoon, welcome.
SEC; Good afternoon your Honor, this is U.S. Attorney Keith Staub on behalf of the Federal defense.
Judge: Good afternoon Have you had a chance to review the tentative?
Both say yes your honor
Judge: Mr. Hodges I think I would like to hear from you first please
AH: Your Honor, first of all let me concede the point raised in your tentative that this is not your usual Bivens case. That is clear for everyone I think. As a house keeping matter on page one there is a typographical error, in the middle paragraph the Administrative Law Judge’s finding was in 2005 not in 2010.
Judge: Thank you.
AH: Having said that, let me refer you to the second issue raised by the government first. It asks the question whether or not there are property rights at issue in this case. And very simply what we have alleged is, let me back up a second. We have alleged a scheme, in effect a sting operation, judged from the outside not from the inside. Basically the sting operation was an operation put into effect through the Office of Homeland Security, the Department of Justice, and the SEC Commissioners. What we have alleged is that the SEC Commissioners as opposed to the Agency itself, coordinated with these other institutions and at their request and in concert with them began a program, whereby, this company was raided. The SEC Commission was fully aware, at all times, of the amount of naked shorting going on in this company. The then Chairman of the commission has been quoted on several occasions as saying this was the most heavily naked shorted company in the history of the world. As we have alleged in our complaint one day, which I believe was in April 2005, some more than 90 billion shares of this company were traded in one day. I have testimony from, which is not alluded to in our current complaint, but I can provide testimony from registered NSASDA companies, that were in business at this time, who report that they were told “it’s free money”. You can sell as many shares as you can find buyers for and put all of the money in your pocket. You don’t ever have to buy the share. They were on a no borrow list to begin with, at that point in time, which was in 2005 primarily. And if you were going to borrow shares as a legitimate broker in that point in time, they had a $2.50 requirement for borrowing. You can imagine with some, I think they averaged during that time 17 billion shares a day being sold, this is an enormous amount of money for people to be borrowing shares to be sold into the market. They were being sold for nothing that is how they drove this company into the ground. They did it because there was evidence by the government, and by others, associated both directly and indirectly with the government, that this money was being sent offshore. It was being accumulated by hedge funds offshore, it was being sent to Iraq, and it was being sent to Iran, it was being sent to Afghanistan, it was being sent to Hezbollah, this was one of the means in which these terrorist organizations were utilizing them to fund their operations. Having said that, I recognized when I prepared this complaint at the time the company was being de-listed, and the time this original agreement was made, we did not have a basis to sue the SEC, the SEC commissioners, or anybody else. Because in fact, as the Court correctly points out, in regard to (quoted a case) it said the shareholders don’t have a right, they don’t have a property interest. If they did not have that right at the time the agreement was made, at the time the original ultra viral criminal acts by these Commissioners took place. However, what this complaint speaks to is at quite a later date after the company was de-listed in October of 2005, and they stipulated to that delisting, Then we go forward and what immediately happened was a Task Force, including one primary and past board of director members, Mr. Bob Mahue, who is no longer with us unfortunately, became the head of that Task Force. His appointed duties, and the Task Force appointed duties, were to have the shareholders pull copies of their shares, pull certificates for every share that was legitimately then owned because it had been bought and paid for, and based upon that share certificate pull, then turn around and liquidate the company. At the time the company decided it was going to liquidate itself and distribute its remaining assets to its shareholders the property rights attached to each of the shareholders because at that point in time, this was in early 2006, they had a right to believe that what was in their future was a distribution, a prorate per share distribution of the assets that the company then owned. The company then owned all of these monies that had been accumulated and put into trusts. The company also owned shares of stock in a company called Entourage and they had other assets. They did not have any substantial liabilities. So the share holders, from that point forward, had a property right that is protectable under the Constitution. It is that claim that we are basing our complaint. Having said that, once we get past the property rights issue, I certainly understand the Courts concern and I have reviewed my complaint, about, perhaps the use of some in artful language when I referred to the SEC rather than specifying that it was the SEC commissioners that we are aiming this at. The reason we are aiming only at the SEC commissioners is because under the statutory scheme that was set up after the Great Depression, the SEC commission and commissioners individually have the sole and exclusive right to make the decisions. For example with this firm, when this company was de-listed in October of 2005, it was pursuant to an Administrative Law Hearing that took place here in Los Angeles, a full day down in Federal Court, that I attended. The Administrative Law Judge then rendered a tentative decision. It was her decision but it was tentative in the sense that it had no power and had no effect. The only time that it became effective was when the company became de-listed on October 24th or 25th of that year when the Commission met and together agreed that this company should be de-listed. They are the only people who have the power to make these kinds of decisions. They are the people who spoke to the other governmental agencies and to the people representing, at least ostensibly the company at that point in time, with this agreement to utilize this company without knowledge to the shareholders as part of a sting operation to trap all of these hedge fund people. That started way back in 2004. But it was those commissioners acting in an improper and Ultra Viral and probably criminal way because their mandate under the law is to protect the shareholders. They were doing exactly the opposite. They were entering into an agreement they knew way going to damage the shareholders, it was going to drive this company out of business, which it did, and without notice in a big secret. It was only those commissioners who took that action that we are aiming this complaint at. We have named the commissioners that have sat since that time because it is our position that having denied these people payment these commissioners have signed on ratifying the acts of their fellow criminals or miscreants, at least, and at the end of the day refuse to release this money. Money that has been collected, we are not suing the SEC, we aren’t suing the government.
Judge: who, in your analysis, is the trustee of the funds? Who holds the funds?
AH: There are actually several trustees who hold the funds, one of whom is currently the DTCC. I only say that because I know the funds are on deposit with the DTCC.
Judge: OK spin that out for me.
AH: The depository trust & clearing corporation, they are the clearing house for all the financial transactions basically that they placed in Trust
Judge: Privately or publicly?
AH: They are a private company but they act as public one.
Judge: As opposed to governmental
AH: It is not a governmental agency in the same sense that the Federal Reserve Banks are not government.
Judge: What document governs the terms under which they hold those funds?
AH: A trust agreement.
Judge: Between?
AH: Between the people who provisionally set this up
Judge: Who are?
AH: One of whom was Bob Maheu.
Judge: As an employee of the SEC?
AH: Not as an employee of the SEC in any sense of the word, he was at one time on the Board of Directors of the company CMKX Diamonds.
Judge: right
AH: He never acted on behalf of the SEC.
Judge: What control does the sec have over this trust fund?
AH: They don’t have any direct control over the trust fund. The agreement, however, that was originally entered into, as I understand the testimony of my, what I have been able to accumulate without the opportunity to do actual discovery, my understanding is that Bob Maheu and several of his associates entered into a deal first with the Department of Justice, they got the SEC on board through the commissioners by talking to several of them. Primarily Christopher Cox.
Judge: Who is a defendant, a named defendant who used to be the Chairman?
AH: The essence of the agreement they made was that in order to make this sting effective the company would go and pump its stock, which it did, the government would assist in that operation, which it did
Judge: How?
AH: There is evidence that they paid for some of the expenses associated with a car, a drag racing car that had CMKX painted on the outside of it that was being very publicly bandied about the internet and raced in various jurisdictions. One of their ex-employees a gentleman named Roger Glenn, an attorney, he used to be an attorney in New York with the law firm Angell & Edwards signed on to increase the stock at the request of the SEC, I am told. He came on to or into CMKX in 2004. When he arrived there the number of authorized shares for the company some where of 100 or 200 billion, I forget exactly what, when he left some nine or ten months later the number of authorized shares had illegally and improperly, under every law that I am aware of at least, had been raised to 800 billion shares. And this company eventually sold some 700 billion shares of stock. And there is over that many outstanding shares, 703 billion plus.
Judge: Why isn’t your client against the clearing house acting as trustee for these funds?
AH: Because that would be like suing the escrow company.
Judge: Yeah but the escrow company has the funds.
AH: As I started to say, here is the simple answer, your Honor, as I started to say a few minutes ago and I probably did not finish. The original agreement, there was a war that ensued after the sting got under operation because what the sting always contemplated was that Mr. Maheu would collect all of these bad doers, the hedge fund people and people like T.D. Waterhouse and all the other stock brokerage houses around who were naked shorting this company, collect them all in a big room and offer them a deal for two reasons. First of all to collect money for CMKX for what had been done to them, and second of all to teach these people a lesson that there were people out there watching what was going on. Hopefully that would head them off from continuing in such illicit and illegal and improper behavior. That was in fact done and I have a witness that was there when it was done. They had a room about three times the size of your courtroom in which they had representative from all of these brokerages from all over the world. They watched a video presentation, because Mr. Maheu, as the court may be aware, was at one time closely associated with the CIA, Howard Hughes and all kinds of other people.
Judge: I was going to ask you whether that was the same Bob Maheu.
AH: It is indeed the same one, a gentleman I happened to make acquaintances with in the 70’s to my good fortune. At any rate all of these people were in this room and were shown a video and a slide presentation of all of the evidence of their wrongdoing and they were offered an opportunity to either step up and sign away your money and pay a reasonable amount for each transaction you did illegally and improperly or go walk out of here and get prosecuted and go to jail because what you did was criminal. Every single person in that room stepped up and made a deal. After that time there became a big conflict between the SEC commissioners and the other governmental entities who were supporting the SEC commissioners about who was going to have the right to release this money to the shareholders and when, My understanding is that it went on for some number of months but ultimately the SEC commissioners prevailed and convinced Mr. Maheu and his associates that it had to be their decision because only they and the rest of the government could determine when this sting had fulfilled its function. That was the basis on which he gave them the power to make this decision about when the money is to be released. It is my understanding that every trust that is currently being held for release of this money is being held by a person who is sworn to observe that requirement. That the SEC, the US government whoever is to make this payment, goes first. Since my information is that was the SEC commissioners that have this power, this is why they are the defendants in this case.
Judge: Let’s return to your Bivens theory, it is taking a head point
AH: this money was supposed to have been released within a year of the time the company was originally de-listed in October of 2005. This is now almost October of 2010, some 4 years past that time. It is taking only because they refuse, not withstanding information they have continued to give to the shareholders, they continue to refuse to release this money. If they don’t release they money then it is a taking. Because they are preventing what is rightfully ours for us to receive. That is why it is a taking.
Judge: Thank You
AH. You are welcome
Judge: Mr. Staub
SEC: Thank you your Honor. I have to admit most of what I just heard I heard for the first time because most of it wasn’t in the claim.
Judge: I found it very educational.
SEC: Indeed. True or not I don’t know but we are here to discuss what is in the complaint today. We’re not here to give oral argument and give testimony to facts no one has any idea about, certainly not myself. We are here to talk about what is in the complaint, whether it was properly pled under rule 8, the Bell decision and Twombly. As this Court pointed out in its tentative it is not properly pled.
Judge: Yeah I am satisfied with that in the tentative. The case would be for the plaintiff to dismiss the plead, to re-plead. I guess what I am really interested in is whether this is an appearance claim given the nature of the asset ad whether sovereign immunity applies.
SEC: Well I suppose they can sue a government official under Bivens for any violation of civil rights whether it has to do with money or not. I don’t know any distinguishing facts in this case that would prevent them from being sued individually under Bivens if there are sufficient facts.
Judge: Well if you concede in theory that a Constitution violation of the taking clause could be asserted against an individual an individual government worker.
SEC: Well I haven’t researched that so I don’t know the answer to that specifically. We asserted on our brief the original invest property because pursuant to the complaint the SEC had the discretion to release funds, if in fact there are these funds in existence, that discretion alone, under the case law that we cited suggests that they don’t have the property rights. But the answer to your question is I don’t know.
Judge: Well there are two questions I guess. One is there a property right and is the contingent asset, if you will, subject to distribution to the plaintiffs at the will of the commission. But there is a separate issue is whether the nature of the relief sought here is such that it can only be asserted against the commissioners in their official capacity.
SEC Well, I don’t think the government has a way of stopping the release in official capacity or in any way.
Judge: Well I understand that, the issue is, is there some manner which these crimes could be asserted against the individual defendants in their individual capacities or is the relief sought by definition relief that can only be sought in their official capacity in which case there can be no private claim they would be entitled to sovereign immunity in their official capacity
SEC That may be the case, I don’t know the answer to that. I think the court is inclined to be consistent with its tentative as far as the pleading requirements. I think the plaintiffs have an opportunity to re-plead to amend the complaint. We will certainly deal with the issue that the Court raised on further briefing; I imagine there will be an additional motion to dismiss in the future. But that being said clearly these are high level government officials, they don’t deserve to be sued and discovery taken of them. I am not specific; obligations have been made by some. And none have been made to a distant point. I hears some issues were addressed during oral argument that I didn’t see in the complaint, even assuming those are true there is nothing specific to these SEC commissioners other than the fact that they some how have the sole discretion to make every single decision at the SEC. I don’t buy that.
Judge: would you agree it might be easier to assess whether claims can be asserted against the commissioners as individuals if we have a complaint that complies with Bell.
SEC: That may be true, yes. If it’s in a fact complied and fitting the requirements of Bell and it can pass qualified immunity which also remains in the court obviously doesn’t need to address right now. But if and when the Court decides it’s been properly pled then I think qualified immunity should be addressed.
Judge: Well what I am going to do is dismiss with dicree to re-plead for failure to meet the Rule 8 requirements. Again not---And to dismiss the claims against them in their official capacity as a matter of sovereign immunity and leave the other issues until we have pleading that passes muster.
AH: Agree your Honor.
SEC I would only ask you honor the government have 30 days to respond and to AH: Agree your Honor.
SEC I would only ask you honor the government have 30 days to respond and to talk to my People. Thank you..
Judge: Mr. Hodges
AH: I certainly recognize, your Honor, the need to be more specific in the complaint and I appreciate the Courts willingness to give us the opportunity if that is the Courts
Judge: I understand you want
AH 45 days with the
Judge: any objections?
SEC None your Honor
Judge You have 30 days to respond by answering in a motion
AH; That is fine your Honor
Judge: OK we will modify the tentative accordingly
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