Court Opinion

ID: 4155766
Source: CourtListenerOpinion
Date Created: 2017-03-27 16:01:23.484995+00
Date Added: 2024-06-11T14:03:02.175087
License: Public Domain

Case: 16-12976   Date Filed: 03/27/2017   Page: 1 of 6

                                                          [DO NOT PUBLISH]

             IN THE UNITED STATES COURT OF APPEALS

                     FOR THE ELEVENTH CIRCUIT
                       ________________________

                             No. 16-12976
                         Non-Argument Calendar
                       ________________________

                  D.C. Docket No. 0:01-cv-07874-DTKH

SECURITIES AND EXCHANGE COMMISSION,

                                                               Plaintiff-Appellee,

                                   versus

PAUL R. JOHNSON,

                                                          Defendant-Appellant.

                       ________________________

                Appeal from the United States District Court
                    for the Southern District of Florida
                      ________________________

                             (March 27, 2017)

Before MARCUS, WILSON, and FAY, Circuit Judges.

PER CURIAM:
                 Case: 16-12976       Date Filed: 03/27/2017        Page: 2 of 6

       Paul R. Johnson appeals the denial of a 2015 motion to reduce a

disgorgement award in a 2007 judgment.1 We affirm the denial of Johnson’s

motion, pursued under Rules 60(b)(4), (5) and 60(d)(1), Federal Rules of Civil

Procedure.

                                                 I.

       We review de novo the denial of a Rule 60(b)(4) motion. Burke v. Smith,

252 F.3d 1260, 1263 (11th Cir. 2001). Under Rule 60(b)(4), a court can relieve a

party from a void judgment, which is “one so affected by a fundamental infirmity

that the infirmity may be raised even after the judgment becomes final. . . . A

judgment is not void, for example, simply because it is or may have been

erroneous. Similarly, a motion under Rule 60(b)(4) is not a substitute for a timely

appeal.” United Student Aid Funds, Inc. v. Espinosa, 559 U.S. 260, 270, 130 S. Ct.
1367, 1377 (2010) (citations omitted). Moving under Rule 60(b)(4), Johnson

argues only that the disgorgement amount was based on an incorrect factual

finding that the investors affected by Johnson’s securities violations lost 100% of

       1
         In addition to arguing for a reduction of the disgorgement award, Johnson argues for an
evidentiary hearing to investigate a violation by his former counsel of the district court’s “asset
freeze order.” However, Johnson fails to explain why he needs to re-open a case that the district
court closed in 2007—and that the SEC filed against Johnson—to assert claims against his
former counsel.
                                                 2
                Case: 16-12976       Date Filed: 03/27/2017       Page: 3 of 6

their investments. 2 This argument, better suited for a direct appeal, fails to

establish a “fundamental infirmity.” See id.

                                               II.

       We review for abuse of discretion the denial of a motion under any

subsection of Rule 60(b) other than subsection (4). Burke, 252 F.3d at 1263. Thus

we review for abuse of discretion the district court’s denial of Johnson’s motion

under Rule 60(b)(5), which allows a court to relieve a party from a judgment

whose prospective application is “no longer equitable.” This language—“no

longer equitable”—requires the movant to establish a change in circumstance. See

Horne v. Flores, 557 U.S. 433, 447, 129 S. Ct. 2579, 2593 (2009) (“The party

seeking relief bears the burden of establishing that changed circumstances warrant

relief . . . .”). Also, a Rule 60(b) motion “must be made within a reasonable time.”

Fed. R. Civ. P. 60(c)(1).

       Johnson fails to explain, with a change in circumstance or other reason, the

eight-year delay after the 2007 judgment in moving under Rule 60(b)(5).

Johnson’s only relevant retort is that in 2009 this circuit denied his motion to

appeal in forma pauperis based on a determination that his appeal was frivolous.

       2
         Johnson argues that he was “deprived of due process” because the district court used
“summary judgment to set an inflated disgorgement amount that contravenes the estoppel of the
criminal judgment.” In less convoluted terms, Johnson argues that he was “deprived of due
process” because of an inconsistent factual finding in parallel criminal and civil proceedings.
Such inconsistency alone does not implicate due process. Johnson fails to identify a due process
concern.
                                               3
               Case: 16-12976     Date Filed: 03/27/2017    Page: 4 of 6

See SEC v. Johnson, No. 08-10473, slip op. at 1 (11th Cir. Jan. 15, 2009); SEC v.

Johnson, No. 0:01-cv-7874, Doc. 358, slip op. at 1 (S.D. Fla. Feb. 25, 2008)

(denying Johnson’s motion in district court to appeal in forma pauperis). The

correct method of seeking relief then would have been to pay the appellate docket

fee or to move for reconsideration of the denial of his motion to appeal in forma

pauperis. And Johnson fails to explain the six-and-a-half-year delay in moving for

Rule 60(b) relief after the district court’s and this circuit’s denials of motions to

appeal in forma pauperis. The district court did not abuse its discretion by denying

Johnson’s Rule 60(b)(5) motion.

                                          III.

      We review for abuse of discretion the denial of a motion under Rule 60(d),

which states in subsection (1) that Rule 60 “does not limit a court’s power to . . .

entertain an independent action to relieve a party from a judgment, order, or

proceeding.” An “independent action” is “reserved for those cases of injustices

which, in certain instances, are deemed sufficiently gross to demand a departure

from rigid adherence to the doctrine of res judicata.” Aldana v. Del Monte Fresh

Produce N.A., Inc., 741 F.3d 1349, 1359 (11th Cir. 2014) (citing United States v.

Beggerly, 524 U.S. 38, 46, 118 S. Ct. 1862, 1867 (1998)); see also Bankers Mortg.

Co. v. United States, 423 F.2d 73, 81 n.7 (5th Cir. 1970) (“Where the adverse party

                                            4
                 Case: 16-12976       Date Filed: 03/27/2017        Page: 5 of 6

is not prejudiced . . . a 60(b) motion may be treated as the institution of an

independent action.”). 3

       In identifying a gross injustice, we review for the existence of these factors:

               (1) a judgment which ought not, in equity and good
               conscience, to be enforced; (2) a good defense to the
               alleged cause of action on which the judgment is
               founded; (3) fraud, accident, or mistake which prevented
               the defendant in the judgment from obtaining the benefit
               of his defense; (4) the absence of fault or negligence on
               the part of defendant; and (5) the absence of any remedy
               at law.

Aldana, 741 F.3d at 1359 (citations omitted). Moving under Rule 60(d), Johnson

again argues that the disgorgement amount was based on an incorrect factual

finding that the investors lost 100% of their investments. Disputing a district

court’s factual finding satisfies none of the five factors that help establish a gross

injustice. The remainder of Johnson’s arguments in support of his Rule 60(d)

motion functions only to support his dispute of this factual finding. Each is an

argument better suited for a direct appeal; none establish a gross injustice to

Johnson. The district court did not abuse its discretion by denying Johnson’s

Rule 60(d) motion.

                                               IV.

       3
         See Bonner v. City of Prichard, 661 F.2d 1206, 1207 (11th Cir. 1981) (en banc)
(holding that all decisions of the “old Fifth” Circuit handed down prior to the close of business
on September 30, 1981, are binding precedent in the Eleventh Circuit).
                                                 5
              Case: 16-12976     Date Filed: 03/27/2017   Page: 6 of 6

      Accordingly, we affirm. See SEC v. J&J Management Consulting,

No. 15-14628, slip op. at 2 (11th Cir. Oct. 3, 2016) (affirming for a similar reason

the denial of a Rule 60(b) motion by Caterina Johnson, who is Paul Johnson’s

co-defendant and mother, and J&J Management Consulting, which is Caterina

Johnson’s company).

      AFFIRMED.

                                          6