Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_20-cv-00047/USCOURTS-azd-2_20-cv-00047-14/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 15:0045 Federal Trade Commission Act

---

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Federal Trade Commission,

Plaintiff,

v. 

James D Noland, Jr., et al.,

Defendants.

No. CV-20-00047-PHX-DWL

AMENDED ORDER 

On April 2, 2020, the Court granted Defendants’ former counsel’s motion to 

withdraw. (Doc. 124.) The next day, Daryl M. Williams and Daniel B. Mestaz of the law 

firm Williams|Mestaz, LLP (“New Counsel”) entered a notice of appearance on behalf of 

certain individual defendants plus the two corporate defendants, Success by Media 

Holdings, Inc., and Success by Media, LLC. (Doc. 126.)

It is unclear to the Court whether New Counsel’s appearance was proper as to the 

two corporate defendants. Both entities comprise the Receivership Entities that are 

currently under the control of the Court-appointed receiver. (Doc. 109 at 3, 12.) Per an 

earlier order, the receiver has “[a]ssume[d] full control of [the] Receivership Entities” and

has the authority to remove “any director, officer, independent contractor, employee, 

attorney, or agent” of the Receivership Entities. (Id. at 12-13.)

“As an officer of the court, the receiver’s powers are coextensive with [her] order 

of appointment.” Liberte Capital Grp., LLC v. Capwill, 462 F.3d 543, 551 (6th Cir. 2006). 

See also Fed. Home Loan Mortg. Corp. v. Tsino, 854 F. Supp. 113 (E.D.N.Y. 1994) (“The 

Case 2:20-cv-00047-DWL Document 129 Filed 04/06/20 Page 1 of 3
- 2 -

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

court that appoints the receiver determines the scope of that receiver’s authority.”). Here, 

the order appointing the receiver gave her broad control over the Receivership Entities, 

including the ability to remove the Receivership Entities’ attorneys. The notice of 

appearance does not address whether the receiver was involved in selecting and retaining 

New Counsel and the Court suspects she was not involved—in a notice filed one day 

earlier, the receiver stated that she “is not aware of a good faith basis to oppose most aspects 

of the FTC’s complaint against the corporate defendants” and thus does “not anticipate 

spending the Receivership Estate’s limited resources [following the withdrawal of former 

counsel] to fight a losing battle.” (Doc. 123 at 2-3.) If the retention and appearance of 

New Counsel occurred without the receiver’s approval—if, for example, New Counsel 

were chosen unilaterally by the individual defendants—there may be a problem. Finally, 

separate from the issue of appointment authority, the receiver likely possesses the power 

to waive the attorney-client privilege on behalf of the Receivership Entities,1so New 

Counsel’s simultaneous representation of the individual and corporate defendants may 

raise ethical concerns. See Ariz. S. Ct. R. 42, ER. 1.7(a) (“[A] lawyer shall not represent a 

client if the representation involves a concurrent conflict of interest. A concurrent conflict 

of interest exists if . . . there is a significant risk that the representation of one or more 

clients will be materially limited by the lawyer’s responsibilities to another client.”). 

Accordingly, IT IS ORDERED that New Counsel confer with the receiver 

concerning the propriety of New Counsel’s recent appearance on behalf of the 

Receivership Entities. 

...

...

...

...

...

1 See, e.g., United States v. Plache, 913 F.2d 1375, 1381 (9th Cir. 1990) (“Because 

the privilege was held by the corporation, any right to assert the attorney-client privilege 

on behalf of the corporation passed when the receiver . . . was appointed by the court.”).

Case 2:20-cv-00047-DWL Document 129 Filed 04/06/20 Page 2 of 3
- 3 -

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

IT IS FURTHER ORDERED that if New Counsel and the receiver cannot reach 

agreement over the propriety of New Counsel’s appearance on behalf of the Receivership 

Entities, they must submit separate briefs on the issue (not to exceed seven pages each) no 

later than April 17, 2020 setting forth their respective positions. 

Dated this 6th day of April, 2020.

Case 2:20-cv-00047-DWL Document 129 Filed 04/06/20 Page 3 of 3