### I N THE UNI TED STATES COURT OF APPEALS FOR THE FI F TH CI RCUI T

No. 12-10822

SECURITIES AND EXCHANGE COMMISSION,
Plaintiff
v. STANFORD INTERNATIONAL BANK, LTD, ET AL,
Defendants TRUSTMARK NATIONAL BANK, Intervenor-Appellant
v. RALPH S. JANVEY, Appellee

A ppeal from the United States District Court f or the Northern District of Texas USDC No. 3:09-CV-298

Before WIENER, DENNIS, and OWEN, Circuit Judges. PER CURIAM: * U n i t e d S t a te s C o u r t o f A p p e al s F i f t h C i rc u i t 

### F I L E D January 8, 2014 Ly l e W . Cay ce Clerk

* Purs uant to 5 T H C I R

. R. 47. 5, the court has determ ined that this op inion s hould not be p ublis hed and is not p reced ent excep t und er the lim ited circum s tances s et forth in 5 T H C I R

. R. 47. 5. 4. Case: 12-10822 Document: 00512492929 Page: 1 Date Filed: 01/08/2014No. 12-10822

As we stated the last time intervenor-appellant Trustmark National Bank (“Trustmark”) appeared before us in connection with this matter, “[t]his is one of many c ases stemming from the purported Stanford Financial Ponzi scheme.” SEC v
. Stanford Int’l Bank, Ltd. (“ Trustmark I ”), 465 F

. App’x 316, 317 (5th Cir. 2012) (per cu r i am) (unpublished). By way o f general b ackground, we have several times explained that these cases arise[] ou t o f an alleged multi-billion-dollar Ponzi scheme perpetrated by the S t anford companies (“Stanford”), a network of
some 130 e n t i ties in 14 countries controlled by R. Allen Stanford. According to the SEC, the companies’ core objective was to s ell certificates o f d eposit (“CD’s”) issued by Stanford In ternational Bank Limited in Antigua (“Stanford Bank”). Stanford a chieved and maintained a high volume of CD sales by promising above-market returns and f

alsely a ssuring investors t hat the CDs were backed by safe, liquid investments. For almost 15 years, the Bank r epresented that it consistently earned high returns on i t s investment of C D sales proceeds, ranging from 12.7% in 2007 to 13

. 9 3 % in 1 994. In fact, however, the Bank had to use new CD sales proceeds to make interest and redemption payments on pre-existing CDs, because it did not have sufficient assets, reserves and investments to cover its liabilities. Id. at 318 (quoting Janvey v. Adams , 588 F.3d 831, 833 (5th Cir. 2009)). The roots of the present appeal are in Trustmark’s “issu[ance] [of] letters of credit t o several companies conducting business with Stanford.” Id. Relevant here, Trustmark issued a l etter o f c r e d i t dated November 1, 2 007 to HP Financial Services V enezuela ( “ HPFS”) in the amount of $1,986,745 in connection with HPFS’s lease of computer equipment to Stanford. Trustmark’s liability on the letter of cred i t w a s secured by issuing a CD to Stanford and S t a n f o r d placing c ash collateral in a Trustmark deposit a ccount. Id. H P F S intervened in the underlying SEC act i o n “ t o clarify whether t h e Receivership O rder enjoins or otherwise applies to draws under letters o f credit issued b y Trustmark.” Id. Thereafter , T r u s tmark intervened to seek “ ‘an order modifying,

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clarifying, or enforcing [the Receivership Order ] a s necessary to grant Trustmark authority to exercise its rights as a secured creditor’ and ‘authority under

. . . the [Receivership Ord e r] to exercise its s e t-off rights against cash collateral.’” Id. at 318-19 (first and t hird alterations in original). “[T]he district court allow[ed] [HPFS] t o present [the] letter of c r e d i t t o Trustmark for payment, but refus[ed] to allow Trustmark to offset the funds from Stanford who is

curr e ntly under the receivership of Ralph S. Janvey (‘Janvey’ or ‘the Receiver[]’).” I

d

. at 317. We affirmed, holding that “the conclu s i o n reached by the district court [was] correct” because “ the tripartite nature of l etter o f credit transactions required Trustmark to p a y H PFS with Trustmark funds, not Receivership funds.” Id. at 320 (citing In re Comp t o n Corp. , 831 F .2d 586, 589 (5th Cir. 1987)). We reasoned that “honoring the letter of c r edit is exactly the position Trustmark put itself i n by issuing the letter of credit in the f irst p lace.” Id. We further stated: Trustmark may resent this ruling s i n c e it requires it to pay immediately, w h i l e requiring it to enter into a more contorted process for satisfying its secured claim. This, however, is the n a ture of receivership and does not prevent it from s e eking a settlement with the Receiver to avoid that potentially l e n g t h y process. Nor does it n ecessarily dictate the outcome of any future c laims Trustmark might have since this ruling is s t r i c t ly limited to t h e facts of this c ase as they stand at this t i m e in t he receivership process. Id. at 321. Subsequent to our decision in Trustmark I , t he Receiver on April 17, 2012 moved the district court to order Trustmark to deliver the cash collateral in the deposit account to the Receiver. On July 24, 2012, the district court granted the Receiver’s motion and “order[ed] Trustmark t o turnover [sic] the contents of the Account to the Receiver within seven (7) days.” Howeve r , T r u s t m ark instead

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moved t he district court on J uly 31 to m odify its order so as t o permit Trustmark to t ender the funds t o the district court registry rather than to the Receiver. On August 9, the district court issued an o r d e r denying that m otion and further advising Trustmark that “[b]ecause Trustmark has failed t o c o m p ly with the Court’s Turnover Order, [the Court] [ will] fine[] Trustmark $ 1,000.00 fo r e ach day it delays payment beginning the day after the date of this O rder, that fine doubling each day thereafter.” That same day , T r u s tmark filed a n otice of appeal as to these o rders. Trustmark u ltimately compli e d w i t h the turnover order on August 13, 2 012 a n d paid $15,000 in fines pursuant to the contempt order. In this appeal, Trustmark principally argues that the district court’s entry of the turnover order prior to the effectuation of a “secured claims distribution
p l a n ” c onstituted a deprivation of due p rocess by “destroy[ing]” Trustmark’s purportedly perfected secured creditor status w ithout sufficient procedural safeguards. 1 Trustmark a lso argues t hat t he turnover order violates 1 2 U.S.C. § 91, which proh ibits state courts from issuing an “ attachment, injunction, or execution” against a national bank “before final judgm e n t

. ” For the following reasons, we affirm the orders of the district court. We first address Trustmark’s procedural due process a r g u ment. Trustmark f

r ames its argument as raising the question o f “whether [the] district court[,] sitting

. . . in equity, has the power to deprive [Trustmark] of its security in the p ursuit of the broader interests of recouping funds to repay Stanford’s

1 Trus tm ark contend s that “[ i] t is und ip us ted that T rus tm ark has a p rop erly p erf ected
s ecurity interes t in the D ep os it Account. ” I n f act, the Receiver d oes d is pute this , as s erting that “[ it] has never conced ed and no court has ever held that Trus tm ark has a valid s ecurity interes t in the cas h collateral”; and that “ [ b ] e caus e the cas h collateral cons is ts of p roceed s f rom the s ale of fraud ulent CD s , Stanf ord Venezuela could not h a ve t r a n s f erred a valid
s ecurity interes t in that collateral to T rus tm ark

. ” For p urp os es of this ap p eal, w e as s um e w ithout d ecid ing that Trus tm ark has the s ecurity interes t it claim s
. Cf

. Trustm ark I

, 465 F. Ap p ’x at 318 ( “By is s uing [ letters of cred it] , Trus tm ark becam e a s ecured cred itor w ith s et- of f rights agains t cas h collateral that Stanf ord had p laced on d ep os it w ith T rus tm ark

. ”)

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‘putative victims’ ( i.e. , unsecured creditors).” Trustmark contends that e ventual participation in the S t a nford receivership claims d istribution process does not “constitute an adequate substitute for the immediate seizure of T r ustmark’s secured pr operty interest,” at least “until such t ime as a secured claims distribution p l a n has been proposed by the S tanford Receiver and finally approved by the D i s t r i c t Court.” T rustmark asks this court t o “ direct[] the Receiver to return the secured funds to Trustmark or post adequate substitute security for the taking of the Secured Funds.” W e conclude that Trustmark has failed to demonstrate a violation of procedural due process. “The Supreme Court h as adopted a two-step analysis to examine whether

an individual’s procedural due process rights have been v i olated. The first question ‘asks whether there exists a liberty or property interest which has been interfered with by t he [government]; the seco n d e x amines whether the procedures attendant u p o n that deprivation were constitutionally sufficient.’” Meza v. Livingstone , 607 F.3d 392, 399 (5th C ir. 2010). “Thre e f actors are considered in identifying the p rocess that is d ue: (1) the p rivate interest affected, ( 2 ) t h e r isk of an erroneous deprivation with the process supplied, and (3) the government’s interests.” W ilson v. Birnberg , 6 67 F.3d 591, 601 (5th Cir. 2012). This court has already a ffirmed that t he funds Trustmark turned over to the Receiver were Stanford property a nd thus properly p a rt of the receivership estate. T

rustmark I

, 465 F. App’x at 320-21. A ccordingly, t he turnover o rder did not effect any d eprivation from Trustmark as to those funds, and Tr u s t m a r k d o e s not argue otherwise. I n stead, Trustmark contends that its security interest in the d eposit funds constitutes a due process p roperty interest, distinct from the underlying Stanford funds, that has b een “destr o y [ e d ] ” by the turnover order. Trustmark acknowledges that t his court has not previously addressed the question of whether a b ank’s security interest in cash collateral on deposit constitutes a property interest for procedural due process purposes, and we need

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not decide that question in this appeal. Rather, a s s u m i n g that Trustmark’s security interest i s property within the m eaning of t he Due Process C lause of the Fifth Amendment, we conclude that Trustmark h as failed to “demonstrate that the ‘[district court] has deprived [it]” of that interest.” See Wilson , 667 F.3d at 601. As Trustmark itself repeatedly states in its briefing, it is well established that “a receiver appointed by a federal c ourt takes property subject to all liens, priorities, or privilege s e x isting or accruing under t he laws of the state.” Marshall v. New York , 254 U.S. 380, 385 (1920) (emphasis added). Trustmark
urges t h a t t h i s principle — repeatedly reaffirmed by subsequent courts 2

— exposes a c onstitutional infirmity in the district court’s orders. To the contrary,

we agree w ith Janvey that, as “a receive r a p p o i nted by a f ederal court,” his receipt o f the Stanford funds formerly on deposit with Trustmark i s s u b j e ct to whatever pre-existing security interest Trustmar k m a y h ave therein. See id. Indeed, T rustmark acknowledges that “[t]he Rec e i v e r t ook all o f Stanford’s claims, including i ts C ertificate of Deposit here, ‘subject to all lien s , p riorities,

or privileges existing

. . . u nder state laws.’” (quoting Marshall , 254 U

. S. at 385). In short, the very authorities that Trustmark c ites in support o f its argument that the T urnover Order “destroy[ed]” its security interest are directly contrary to that proposition. “The Receiver’s task t o ‘marshal, preserve and conserve the receivership estate is as much for [Trustmark’s] benefit a s f or the benefit of [Stanford’s] other

2 See SEC v. Credi t B ancorp , Ltd. , 386 F

. 3d 438, 446 ( 2d Cir. 2004) ( “[ A] f ed eral court receiver tak es p rop erty s ubject t o a p erf ected lien or other es tablis hed p riority right. ”) ; La nkena u v
. Coggesha l l & H i cks , 350 F. 2d 61, 66- 67 ( 2d Cir. 1965) ( “As sum ing that [ cred itor] ’s attachm ent ef

forts w ere s uf

f i c i e ntly p erf

ected und er the circum s tances und er s tate law to create s om e k ind of lien or p riority rights in their favor, ap pointm ent of a fed eral court receiver und er ord ers to tak e charge of all of [ the] p rop erty [ of the def end ant in the und erlying SEC action] d oes not d es troy thos e rights

. The receiver tak es cus tod y of the prop erty s ubject to any rights p revious ly acquired by the attachm ent. ” ( citation om itted ) )

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investors.” Trustmark I , 4 65 F

. App’x at 321 (first alteration in original) (quoting SEC v. Stanford Int’l Bank Ltd. , 424 F. App’x 338, 341 ( 5th Cir. 2011)). In the receive r s h ip claims process, Trustmark will have the opportunity to “advis[e] the receiver a n d t he c ourt as to

. . . the basis of [its] claim to

. . . priority.” See Commodity Futures Trading C omm’n v
. Chilcott Portfolio Mgmt. , 725 F.2d 584, 586 ( 1 0 t h C i r
. 1984) (quoting Ralph Ewing Clark, A Treatise on the Law a n d Practice of Receivers § 541(a) (3d ed. 1959)). Given the considerable s c o p e o f t h e a l l e g e d S t a n f o r d P o n z i scheme, the receivership process here m ay be “lengthy.” Trustmark I , 465 F. App’x at 321. “ This, however, is the nature of receivership.” Id. Seco n d , T r ustmark briefly c ontends that 12 U.S.C. § 91 precludes enforcement of t h e Turnover Order. Section 9 1 provides in p e rtinent part that “no attachment, injunction, or e xecution, s hall b e issued against [a national bank] or its property before final judgment in any suit, a ction, or proceeding, in
any State, county, or municipal court.” 12 U.S.C. § 91. Trustmark contends that
t h e turnover order amounts to an “injunction” against a national bank “before final j udgment” i n violation of the statute. See id. Further, although the statute by its terms applies only to state court actions, Trustmark argues that “the Supreme Court [ has] held t hat Section 91 applies ‘as well on t h e courts of the United States.’” (quoting Pac. Nat’l Bank v. Mixter , 124 U.S. 721 (1888)). However, Trustmark’s reliance on M ixter is misplaced. The S u p r e m e Court has since clarified that § 91’s “anti-injunction provision

. . . was meant to have a limited scope” and “that Congress intended o nly to prevent state judicial action, prior to final judgment, which would have the effect of seizing the bank’s property , ” as contrasted with “property belonging to others which happens to be in the hands of t he bank.” Third Nat’l Bank in Nashville v
. Impac Ltd., I nc. , 432 U.S. 3 12, 322-23 (1977) (emphasis added); see also id. at 324 ( “ [ T]he statute merely prevents pr e j u d g ment seizure of bank property by creditors of the

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bank.”). The d istrict c ourt’s order requiring Trustmark, as Stanford’s c reditor, to turn over r eceivership estate assets to the appointed r eceiver in this SEC action does not fall within the “limited s cope” of § 9 1. See id. at 322. I t does not constitute either “state judicial action,” s ee id. , or a “seizure of bank p roperty by creditors of the bank,” see id. at 324. A ccordingly, the turnover order does not violate 12 U.S.C. § 91. 3 Accordingly, we affirm the challenged orders of the district court.

3 Trus tm ark als o contend s , albeit in conclus ory f as hion, that the d is trict court abus ed its d is cretion by hold ing Trus tm ark in contem p t becaus e Trus tm ark ’s of f er to p ay the f

und s into the d is trict court’s regis try cons tituted a “good f aith ef f ort[ ] to com p ly w ith the Turnover O rd er. ” Trus tm ark w aived this argum ent by f ailing to cite any authority in its ap p ellate brief

. See U ni t ed S ta tes v
. D em m i tt , 706 F. 3d 665, 670 ( 5th Cir. 2013) ; Fed

. R

. A p p
. P. 28( a) (9)

. M oreover, Trus tm ark ’s argum ent w ould f ail even w ere it ad equately brief e d

. “ W e review contem p t ord ers and s anctions im p os ed thereund er f or an abus e of

d is cretion. ” Whi tcra

ft v
. Brow n , 570 F. 3d 268, 271 ( 5th Cir. 2009)

. “A p arty co m m i t s c o ntem p t w hen he violates a d ef inite and s p ecif

ic ord er of the court requiring him to p erf orm or ref

rain f rom p erf orm ing a p articular act or acts w ith k now led ge of the court’s ord er. ” Tra v el host, Inc. v
. Bl a ndf ord , 68 F. 3d 958, 961 (5th Cir. 1995)

. The term s of the turnover and contem p t ord ers w ere d ef inite and s pecif

ic, and Trus tm ark f

ailed to com p ly w ith their clear requirem ents

. “[ G ] ood f aith is not a d ef

ens e to a civil contem pt ord er[ ]

. . . . ” Whi tcra f t , 570 F. 3d at 272. 8 Case: 12-10822 Document: 00512492929 Page: 8 Date Filed: 01/08/2014