NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS MAR 7 2022 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT U.S. SECURITIES & EXCHANGE No. 20-17419 COMMISSION, D.C. No. 3:17-cv-00223-RS Plaintiff-Appellee, v. MEMORANDUM* PRITZKER LEVINE LLP, Appellant, ______________________________ SUSAN L. UECKER, Receiver-Appellee. Appeal from the United States District Court for the Northern District of California Richard Seeborg, Chief District Judge, Presiding Argued and Submitted October 21, 2021 San Francisco, California Before: WATFORD and HURWITZ, Circuit Judges, and BAKER,** International Trade Judge. Dissent by Judge BAKER. * This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** The Honorable M. Miller Baker, Judge for the United States Court of International Trade, sitting by designation. In 2015, Allan Young, represented by Pritzker Levine LLP (“Pritzker”), sued Thomas Henderson and the San Francisco Regional Center, LLC (“SFRC”) in California state court, alleging mismanagement of EB-5 qualifying business entities and misappropriation of investor funds.1 Pritzker obtained the appointment of a receiver and assisted the receiver in identifying nearly $29 million in assets that were taken into the receivership estate. The firm spent approximately 2,000 hours litigating the state court proceedings. Two years later, the SEC sued Henderson and SFRC in federal court. The state court litigation was stayed, a receiver was appointed in the federal case, and roughly $25 million from the state receivership was turned over to the federal receiver. After the district court approved the receiver’s proposed plan of distribution, Pritzker unsuccessfully sought an award of attorney fees for its role in securing a “common fund” for investors. Pritzker appeals the denial of its fee application. 1. Under the “common fund” doctrine, “a private plaintiff, or his attorney, whose efforts create, discover, increase or preserve a fund to which others also have a claim is entitled to recover from the fund the costs of his litigation, including 1 The Employment-Based Immigration Fifth Preference Program (“EB-5”) offers legal permanent residency to foreign nationals who make a “direct investment of at least $1 million in a new commercial enterprise that creates at least ten full- time jobs for U.S. workers.” SEC v. Hui Feng, 935 F.3d 721, 725 (9th Cir. 2019) (citing 8 U.S.C. § 1153(b)(5)). 2 attorneys’ fees.” Vincent v. Hughes Air W., Inc., 557 F.2d 759, 769 (9th Cir. 1977). Pritzker’s efforts in the state court litigation—which included filing the case, obtaining the appointment of a receiver, working closely with the receiver in amassing the receivership fund, and defending the fund against various claims— undeniably caused the creation, discovery, increase, or preservation of a common fund that benefited investors at the conclusion of the federal action. See Indep. Living Ctr. of S. Cal., Inc. v. Kent, 909 F.3d 272, 285 (9th Cir. 2018). The state receiver, who later became the federal receiver, stated “Pritzker Levine undeniably rendered services that resulted in a benefit to the Federal receivership estate (investors and creditors),” and that “[a]bsent the actions taken by …
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