Court Opinion

ID: 2652270
Source: CourtListenerOpinion
Date Created: 2014-02-05 15:05:20.392473+00
Date Added: 2024-06-11T12:36:01.354242
License: Public Domain

13-4622
     SEC v. Daspin

                          UNITED STATES COURT OF APPEALS
                              FOR THE SECOND CIRCUIT

                                           SUMMARY ORDER

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED
ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE PROCEDURE
32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS
COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE
NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY
PARTY NOT REPRESENTED BY COUNSEL.

             At a stated term of the United States Court of Appeals for the Second Circuit, held
     at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New
     York, on the 5th day of February, two thousand fourteen.

     PRESENT:
                     José A. Cabranes,
                     Susan L. Carney,
                     Christopher F. Droney,
                           Circuit Judges.
     _________________________________________

     United States Securities and Exchange Commission,

                     Plaintiff-Appellee,

                     v.                                                  13-4622

     Edward M. Daspin, AKA Edward Michael,
     AKA Ed Michael,

                 Defendant-Appellant.
     _________________________________________

     FOR APPELLANT:                 Steven David Feldman, Herrick, Feinstein LLP, New York,
                                    NY.

     FOR APPELLEE:                  Dominick V. Freda, United States Securities and Exchange
                                    Commission, Washington, D.C.
 1          Appeal from a December 5, 2013 order of the United States District Court for the

 2   Southern District of New York (Richard M. Berman, Judge).

 3          UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED,

 4   AND DECREED that the order of the district court is AFFIRMED.

 5          Appellant Edward Daspin appeals from an order of the district court directing him

 6   to be deposed in compliance with an investigative subpoena issued by the United States

 7   Securities and Exchange Commission (“SEC”). Daspin has moved to stay his deposition

 8   pending the outcome of this appeal. The SEC has cross-moved for summary affirmance of

 9   the district court’s order. We assume the parties’ familiarity with the underlying facts,

10   procedural history of the case, and issues on appeal.

11   I.     Daspin’s Stay Motion

12          In deciding whether to grant a stay pending appeal, we consider: (1) whether the

13   movant has demonstrated a “strong showing that he is likely to succeed on the merits”;

14   (2) whether the movant will suffer irreparable injury absent a stay; (3) whether the non-

15   moving party will suffer substantial injury if a stay is issued; and (4) the public interests

16   that may be affected. See In re World Trade Ctr. Disaster Site Litig., 503 F.3d 167, 170

17   (2d Cir. 2007). The degree to which a factor must be present varies with the strength of the

18   others; “more of one [factor] excuses less of the other.” Thapa v. Gonzales, 460 F.3d 323,

19   334 (2d Cir. 2006) (citation and quotation marks omitted). The first two—likely success

20   on the merits and irreparable injury—are the “most critical.” Nken v. Holder, 129 S. Ct.
21   1749, 1761 (2009). We will uphold the district court’s findings of fact in a ruling on a

22   motion for a stay unless they are clearly erroneous; we review the lower court’s legal

23   conclusions de novo. See Fed. R. Civ. P. 52(a).

                                                    2
 1          Daspin cannot show that he is likely to succeed on the merits of his appeal. Daspin

 2   contends that the district court abused its discretion when it declined to order further

 3   medical investigation and failed to heed his physician’s affidavit regarding Daspin’s

 4   medical condition. Federal Rule of Civil Procedure 26(c) allows a district court to control

 5   a deposition by means of a protective order. “The grant and nature of protection is

 6   singularly within the discretion of the district court and may be reversed only on a clear

 7   showing of abuse of discretion.” Gallela v. Onassis, 487 F.2d 986, 997 (2d Cir. 1973).

 8          Daspin fails to make that showing. His physician conceded that it might be

 9   possible to safeguard against risk to Daspin by making the modifications contained in the

10   district court’s order, and Daspin had previously agreed to be deposed under these

11   conditions.

12          Nor may Daspin succeed on his claim that the SEC must compensate his physician.

13   Both parties cite F.T.C. v. Rockefeller, 591 F.2d 182, 191 (2d Cir. 1979), which explained

14   that a district court may, in its discretion, order the government to pay the costs of

15   compliance with an administrative subpoena, but only if the costs are “not reasonably

16   incident to the conduct of (a respondent’s) business” (internal citation and quotation

17   omitted). In other words, the government may be responsible if the respondent is not the

18   target of the investigation, but rather, a “mere repositor[y] of information performing a

19   service for the government in complying with the subpoenas.” Id. Here, as the target of

20   the investigation, Daspin is responsible for the costs of compliance, and the district court

21   did not err in ruling that he must pay his physician’s fee. Consequently, Daspin cannot

22   show that he is likely to succeed on the merits, and this factor supports denying a stay.

                                                    3
 1          Daspin also cannot show that he will be irreparably harmed absent a stay.

 2   Irreparable harm is defined as “certain and imminent harm for which a monetary award

 3   does not adequately compensate.” See Wisdom Imp. Sales Co. v. Labatt Brewing Co., 339

 4 F.3d 101, 114 (2d Cir. 2003) (citations omitted). Irreparable harm exists “where, but for

 5   the grant of equitable relief, there is a substantial chance that upon final resolution of the

 6   action the parties cannot be returned to the positions they previously occupied.” Brenntag

 7   Int’l Chem., Inc. v. Bank of India, 175 F.3d 245, 249-50 (2d Cir. 1999) (evaluating a

 8   preliminary injunction).

 9          Requiring Daspin to pay his physician’s fee does not qualify as irreparable harm, as

10   it would be adequately compensated by a monetary award. To be sure, a serious health

11   complication could qualify as irreparable harm. However, the harm must be truly

12   imminent, and not “mere possible injury,” or “remote and speculative” injury. See Jackson

13   Dairy, Inc. v. H. P. Hood & Sons, Inc., 596 F.2d 70, 72 (2d Cir. 1979). The safeguards

14   ordered or considered by the district court are appropriate and reasonable.

15          Daspin also argues that, absent a stay, he would be compelled to testify, effectively

16   mooting his appeal and causing irreparable harm by depriving him of his appellate rights.

17   A stay may be used to preserve a possibly meritorious appeal. See In re Agent Orange

18   Product Liability Litig., 804 F.2d 19, 20 (2d Cir. 1986). However, Daspin’s appeal is

19   unlikely to succeed. Consequently, denying a stay would not deprive him of significant

20   rights. Thus, this factor supports denying a stay.

21          Inasmuch as Daspin cannot show that he is likely to succeed on the merits and that

22   he will be irreparably harmed absent a stay, the balance of factors weighs against granting

23   a stay; we need not address the remaining factors. See Nken, 556 U.S. at 435.

                                                    4
 1   II.     Motion for Summary Affirmance

 2           Summary affirmance is “a rare exception to the completion of the appeal process

 3   . . . [and] is available only if an appeal is truly ‘frivolous.’” United States v. Davis, 598

 4 F.3d 10, 13 (2d Cir. 2010). An appeal is frivolous if it presents an “indisputably meritless

5    legal theory” or “factual contentions [that] are clearly baseless.” Neitzke v. Williams, 490

6 U.S. 319, 327 (1989). A case for which the outcome “seems obvious” is distinguishable

 7   from a frivolous case that is “inarguable or fanciful.” Davis, 598 F.3d at 13-14.

 8           The outcome of Daspin’s appeal “seems obvious,” but his arguments are not

 9   “fanciful.” Therefore, summary affirmance is inappropriate.

10           That said, because Daspin is not entitled to a stay pending appeal, and will therefore

11   be compelled to testify, his appeal will soon be moot. Moreover, we already have the

12   information necessary to decide this appeal, and, in the interest of judicial economy, we

13   may take this opportunity to dispose of the appeal on the merits. We affirm the district

14   court’s order of December 5, 2013, for the reasons described above.

15           For the foregoing reasons, the judgment of the district court is hereby AFFIRMED.

16           The Mandate shall issue forthwith.

17                                                   FOR THE COURT:
18                                                   Catherine O’Hagan Wolfe, Clerk

19

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