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Securities and Exchange Commission v. Toups

United States District Court, M.D. Florida, Tampa Division

October 7, 2019

SECURITIES AND EXCHANGE COMMISSION, Plaintiff,
v.
MICHAEL P. TOUPS and LONGWEI PETROLEUM INVESTMENT HOLDING LIMITED, Defendants.

          ORDER

          JAMES D. WHITTEMORE, UNITED STATES DISTRICT JUDGE

         BEFORE THE COURT is Defendant Michael P. Toups' Motion and Memorandum of Law for Relief from Order and Judgment, Per Rule 60 and the SEC's opposition (Dkts. 57, 60). Upon consideration, Toups' motion is DENIED.

         Procedural Background

          The SEC sued Toups for violating Section 17(a) of the Securities Act, Section 10(b) of the Exchange Act, Rule 10b-5, and Section 13(a) of the Exchange Act, Rules 13a-l, 13a-13 and 12b-20, seeking injunctive relief, disgorgement, and civil penalties. (Dkt. 1). After extensive negotiations, the parties reached a bifurcated settlement. (Dkt. 32). Toups waived findings of fact and conclusions of law, consented to entry of a judgment enjoining him from violating federal securities laws, and agreed that the Court would determine, on the SEC's motion, whether disgorgement and civil penalties were appropriate, and the amounts. (Dkt. 32-1). Judgment was entered accordingly. (Dkt. 34).

         On March 27, 2019, the SEC filed its Motion for Final Judgment as to Civil Remedies Against Defendant Michael P. Toups and served a copy on his counsel. (Dkt. 45). A response to the motion was due April 10, 2019. See Local Rule 3.01(b). SEC counsel certified that before filing the motion, he conferred with Toups' counsel twice, on January 29, 2019 and again on March 19, 2019, regarding the motion and "Defendant's counsel indicated that [he] would relay the proposed relief that the SEC hereby seeks in order to determine if Toups would agree to such civil remedies." (Dkt. 45, p. 24).

         On June 25, 2019, the SEC was directed to provide an updated conferral notice and the parties were directed to advise of the status of the settlement. (Dkt. 48). The SEC reported that it had, with the consent of Toups' counsel, contacted Toups by email on August 6, 2019 in an attempt to confer and provided him with a courtesy copy of the motion. Toups' counsel of record and his current counsel, who represented him in other litigation, were included as recipients of the email. (Dkt. 54, ¶ 7).[1] And on August 7 and 8, 2019, SEC counsel discussed the motion, relief sought, and a settlement framework with Toups' current counsel, who relayed the information to Toups. (Id., ¶¶ 8-10).

         On August 11, 2019, the SEC's Motion for Final Judgment as to Civil Remedies Against Michael Toups was granted and final judgment entered. (Dkt. 55). The motion was deemed unopposed because Toups had not responded to it. (Id., p. 1). Almost a month later, on September 9, 2019, Toups filed the instant motion, seeking reconsideration and relief under Rule 60 (b) (1) and (6), Fed. R. Civ. P., contending that "[he] was not aware of the motion to impose penalties as his counsel of record, James Patterson, Esq. ..., did not inform him of the motion or respond, ", and as a result, "he did not have an opportunity to respond." (Dkt. 57, p. 2).[2] He also contends that "[t]he imposed judgment is unwarranted and excessive . ..." (Id. at p. 4).

         Reconsideration

         Reconsideration is not warranted since Toups, who was represented by counsel, had the opportunity to respond to the SEC's motion but failed to do so. He offers no explanation for why he did not respond to the motion or at least seek an extension of time to respond after being notified of the motion by his attorney. Moreover, the purported defenses he raises could have been raised in a timely response to the motion.

         A motion for reconsideration cannot be used to "raise argument or present evidence that could have been raised prior to the entry of judgment." Michael Linet, Inc. v. Vill. of Wellington, Fla., 408 F.3d 757, 763 (11th Cir. 2005). This includes new arguments that were "previously available, but not pressed." Stone v. Wall, 135 F.3d 1438, 1442 (11th Cir. 1998) (per curiam); Wilchombe v. TeeVee Toons, Inc., 555 F.3d 949, 957 (11th Cir. 2009). Accordingly, reconsideration is not warranted.

         Rule 60(b)

         Rule 60 provides six grounds for relief from judgment, two of which Toups invokes. According to the introductory paragraph of his motion, he seeks relief "pursuant to Rule 60(b)(1) and (6) of the Federal Rules of Civil Procedure." (Dkt. 57, p. I).[3]

         1. Rule 60(b)(1)

         Under Rule 60(b)(1), a party may be relieved from judgment due to "mistake, inadvertence, surprise, or excusable neglect." See SEC v. Simmons, 241 Fed.Appx. 660, 662 (11th Cir. 2007). Essentially, Toups seeks relief because of counsel's excusable neglect. However, an attorney's negligent failure to respond to a motion does not constitute excusable neglect. Solaroll Shade & Shutter Corp. v. Bio-Energy Sys., Inc.,803 F.2d 1130, 1132 (11th Cir. 1986). And this Circuit "has demonstrated its wariness of grants of Rule 60(b)(1) relief ...


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