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United States Court of Appeals for the Ninth Circuit
February 9, 2022, Argued and Submitted, San Francisco, California; February 23, 2022, Filed
Defendants Randall Letcavage and Premier Holding Corporation appeal a summary judgment entered in favor of the Securities and Exchange Commission and the district court's subsequent imposition of civil remedies. We have jurisdiction under 28 U.S.C. § 1291, and affirm.
We review a summary judgment de novo, with all facts and inferences being drawn in favor of the non-moving party. See Slayman v. FedEx Ground Package Sys., Inc., 765 F.3d 1033, 1041 (9th Cir. 2014). Evidentiary rulings made in connection with a summary judgment, including orders precluding evidence, are reviewed for abuse of discretion. See Nationwide Life Ins. Co. v. Richards, 541 F.3d 903, 909 (9th Cir. 2008). A district court's determination of appropriate remedies is also reviewed for abuse of discretion. [*2] See SEC v. Platforms Wireless Int'l Corp., 617 F.3d 1072, 1096 (9th Cir. 2010); SEC v. First Pac. Bancorp, 142 F.3d 1186, 1190 (9th Cir. 1998).
1. Letcavage challenges the district court's preclusion order that prevented him from introducing certain evidence in opposition to the SEC's motion for summary judgment. The district court's order was based on Letcavage's failure to meaningfully answer the SEC's questions during depositions and his blanket invocation of the Fifth Amendment during the enforcement proceeding. Even when a defendant is entitled to invoke the Fifth Amendment in a civil proceeding, "a district court has discretion in its response to a party's invocation of the Fifth." SEC v. Colello, 139 F.3d 674, 677 (9th Cir. 1998). Here, Letcavage refused to meaningfully answer any questions about the WePower note, the TPC assets, or his employment agreement—the three central issues of this case. Therefore, the district court's preclusion order was a reasonable response to Letcavage's decision and not an abuse of discretion.
2. Defendants challenge the district court's finding of scienter, which here "refers to a mental state embracing intent to deceive, manipulate, or defraud." Ernst & Ernst v. Hochfelder, 425 U.S. 185, 193 n.12, 96 S. Ct. 1375, 47 L. Ed. 2d 668 (1976). The district court did not abuse its discretion in making this determination. The district court can infer scienter based on a defendant's invocation of the Fifth Amendment when "independent evidence exists of the fact to which [*3] the party refuses to answer." Doe ex rel. Rudy-Glanzer v. Glanzer, 232 F.3d 1258, 1264 (9th Cir. 2000). The SEC offered ample independent evidence to justify an adverse inference of scienter in this case, including numerous public and private statements by Letcavage.
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2022 U.S. App. LEXIS 4816 *; 2022 WL 541194
U.S. SECURITIES & EXCHANGE COMMISSION, Plaintiff-Appellee, v. PREMIER HOLDING CORPORATION; RANDALL LETCAVAGE, Defendants-Appellants, and JOSEPH GREENBLATT, Defendant.
Notice: PLEASE REFER TO FEDERAL RULES OF APPELLATE PROCEDURE RULE 32.1 GOVERNING THE CITATION TO UNPUBLISHED OPINIONS.
Prior History: [*1] Appeal from the United States District Court for the Central District of California. D.C. No. 8:18-cv-00813-CJC-KES. Cormac J. Carney, District Judge, Presiding.
SEC v. Premier Holding Corp., 2021 U.S. Dist. LEXIS 11533, 2021 WL 1048565 (C.D. Cal., Jan. 20, 2021)
district court, remedies, abuse of discretion, summary judgment, disgorgement, invocation, scienter, independent evidence, burden of proof, no abuse, meaningfully, injunctive, preclusion, questions