Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_12-cv-03237/USCOURTS-cand-5_12-cv-03237-48/pdf.json

Nature of Suit Code: 850
Nature of Suit: Securities, Commodities, Exchange
Cause of Action: 15:77 Securities Fraud

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Case No.: 5:12-cv-03237-EJD

ORDER DENYING AS MOOT PLAINTIFF’S MOTION FOR ADMINISTRATIVE RELIEF 

SEEKING RELEASE OF REAL PROPERTY FROM ASSET FREEZE AND INJUNCTIVE 

PROTECTION

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

SECURITIES AND EXCHANGE 

COMMISSION,

Plaintiff,

v.

SMALL BUSINESS CAPITAL CORP., et 

al.,

Defendants.

Case No. 5:12-cv-03237-EJD 

ORDER DENYING AS MOOT 

PLAINTIFF’S MOTION FOR 

ADMINISTRATIVE RELIEF SEEKING 

RELEASE OF REAL PROPERTY 

FROM ASSET FREEZE AND 

INJUNCTIVE PROTECTION

Re: Dkt. No. 1125

On January 15, 2016, Plaintiff Securities and Exchange Commission (the “SEC”) filed an 

administrative motion seeking an order excluding certain real property owned by Defendant Mark 

Feathers (“Feathers”) - specifically Feathers’ home located at 1520 Grant Road, Los Altos, 

California - from the stipulated preliminary injunction filed in this case on July 10, 2012. Dkt. No. 

1125. According to the SEC, the Los Altos home should not be subject to the injunction because 

any interest the agency may have had in preserving the property for the benefit of injured investors 

was dissolved by a 2015 bankruptcy court order removing the SEC’s lien. Feathers filed a 

response to the motion, which the court has considered.1 

Although not styled as such, the SEC’s motion raises whether a judicial clarification of the 

 

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Feathers suggested at the hearing on February 4, 2016, that the court should not consider this 

motion because the attorney who filed it on behalf of the SEC, Carol E. Schultze, is not admitted 

to the Northern District of California. This argument is misplaced in light of Civil Local Rule 11-

2 (“An attorney employed or retained by the United States government or any of its agencies may 

practice in this Court in all actions or proceedings within the scope of his or her employment or 

retention by the United States.”). 

Case 5:12-cv-03237-EJD Document 1146 Filed 02/05/16 Page 1 of 3
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Case No.: 5:12-cv-03237-EJD

ORDER DENYING AS MOOT PLAINTIFF’S MOTION FOR ADMINISTRATIVE RELIEF 

SEEKING RELEASE OF REAL PROPERTY FROM ASSET FREEZE AND INJUNCTIVE 

PROTECTION

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United States District Court

Northern District of California

asset freeze portion of the preliminary injunction should be made. “A court may clarify its order 

for any reason.” Wahl v. Am. Sec. Ins. Co., No. C 08-0555 RS, 2010 U.S. Dist. LEXIS 84878, at 

*9, 2010 WL 2867130 (N.D. Cal. July 20, 2010). This type of request “invite[s] interpretation, 

which trial courts are often asked to supply, for the guidance of the parties.” Bordallo v. Reyes, 

763 F.2d 1098, 1102 (9th Cir. 1985). “From this, it is apparent that the clarification process 

presumes some legitimate need supporting relief, such as the existence of ambiguity or confusion 

that can [be] corrected with further explanation.” Mohammed v. City of Morgan Hill, No. 5:10-

cv-05630 EJD, 2011 U.S. Dist. LEXIS 123496, at *4, 2011 WL 5085497 (N.D. Cal. Oct. 25, 

2011). 

Here, § VI of the injunction order provides:

IT IS FURTHER ORDERED that, except as otherwise ordered by 

this Court, an immediate freeze shall be placed on all monies and 

assets . . . in all accounts at any bank, financial institution or 

brokerage firm, all certificates of deposit, and other funds or assets, 

held in the name of, or for the benefit of, or over which account 

authority is held by defendants Feathers, SB Capital, IPF, and SPF, 

or any entity affiliated with any of them, including but not limited 

to, the accounts set forth below . . . .

See Prelim. Inj., Dkt No. 34. 

Given its broad language, the Los Altos home was undeniably subject to § VI. But in light 

of the bankruptcy court’s order, it is at most ambiguous or at least confusing as to whether or not 

the Los Altos home is still subject to the asset freeze. Accordingly, a clarification of the 

injunction is necessary. 

Upon removal of its lien, the SEC was left without a legal mechanism to enforce any

interest in the Los Altos home. At that time, the property was no longer an asset capable of

preservation for the benefit of injured investors. The court therefore clarifies based on this 

development that the Los Altos home is not subject to § VI of the preliminary injunction, and has 

not been subject to such order since April 7, 2015. 

With that, a ruling on the SEC’s motion is rendered unnecessary. It is DENIED AS 

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Case No.: 5:12-cv-03237-EJD

ORDER DENYING AS MOOT PLAINTIFF’S MOTION FOR ADMINISTRATIVE RELIEF 

SEEKING RELEASE OF REAL PROPERTY FROM ASSET FREEZE AND INJUNCTIVE 

PROTECTION

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United States District Court

Northern District of California

MOOT. 

IT IS SO ORDERED.

Dated: February 5, 2016

______________________________________

EDWARD J. DAVILA

United States District Judge

Case 5:12-cv-03237-EJD Document 1146 Filed 02/05/16 Page 3 of 3