Professional Documents
Culture Documents
Saffon Fees
Saffon Fees
17 respectfully moves the Court for attorneys’ fees and expenses, pursuant to the Court’s Civil
18 Contempt Order (“Contempt Order,” ECF No. 51) against Defendants David Gilbert Saffron
19 (“Saffron”) and Circle Society, Corp. (“Circle Society”) (collectively, “Defendants”) and
20 instructions at the January 24, 2020 contempt hearing. This Motion arises from Defendants’
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multiple, unjustified, and continuous violations of the Court’s October 3, 2019 Temporary
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Restraining Order (“TRO,” ECF No. 9) and December 6, 2019 Preliminary Injunction Order (“PI
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Order,” ECF No. 31), including “failing to provide an accounting of their assets” and “refusing
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25 to permit inspection and copying of their books and records.” Contempt Order at p. 5, ECF No.
26 51. The Court found that the “CFTC has established by clear and convincing evidence that
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Case 2:19-cv-01697-JAD-DJA Document 56 Filed 01/31/20 Page 2 of 7
Saffron and Circle Society have violated multiple terms and conditions of the injunction order
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2 and that the CFTC is entitled to relief in the form of coercive sanctions against each defendant.”
3 Contempt Order at pp. 1-2, ECF No. 51. As described in more detail below and in the
10 of this Court’s lawful orders, which have made discovering the full extent of Defendants’ fraud
11 more difficult and ultimately more expensive and time consuming for Plaintiff.
12 I. FACTUAL BACKGROUND
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As a result of Defendants’ violations of the Court’s TRO and PI Order:
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(1) Plaintiff was required to expend significant time and resources over a period
15 of nearly four months in an attempt to obtain Defendants’ compliance, including
making multiple demands on Defendants to comply and sending emails to
16 Defendants and Circle Society’s former counsel regarding their obligations to
comply, among other things;
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19 (3) Plaintiff prepared for and traveled from Washington, D.C. to Las Vegas,
Nevada to participate in three hearings to address Defendants’ contempt; 2 and
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21
1
See Motion for Issuance of an Order to Show Cause as to Why Defendant Circle Society
22 Should Not Be Held in Civil Contempt for Violation of the Court’s October 3, 2019 TRO
(“Show Cause Motion I,” ECF No. 24); Motion for Issuance of Order to Show Cause as to
23
Why Defendants David Saffron and Circle Society Should Not Be Held in Civil Contempt for
24 Violations of the Court’s December 6, 2019 PI Order (“Show Cause Motion II,” ECF No. 40).
25 2
See Minutes of Proceedings (Dec. 2, 2019), ECF No. 30; Minutes of Proceedings (Jan. 10,
26 2020), ECF No. 47; Minutes of Proceedings (Jan. 24, 2020), ECF No. 53; CFTC’s
Compensatory Damages Worksheet, attached to Declaration of Danielle Karst in support of
27 this Motion.
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Case 2:19-cv-01697-JAD-DJA Document 56 Filed 01/31/20 Page 3 of 7
1 (4) Plaintiff expended further time and resources to prepare this Motion for
2 Attorneys’ Fees and Expenses, including reviewing and calculating (and
substantially reducing) timesheets, conducting legal research, and preparing the
3 appropriate attorney affidavit and compensatory damages worksheet in support of
this Motion.
4
There have been three Court hearings in connection with Defendants’ contempt. On
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6 December 2, 2019, the Court held a motion hearing, converted the TRO to a PI Order, heard
7 representations regarding Plaintiff’s Show Cause Motion I, and continued the show-cause
8 hearing. Minutes of Proceedings, ECF No. 30. Saffron, the sole corporate officer of Circle
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Society, did not appear at the December 2, 2019 hearing. On January 10, 2020, the Court held a
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show-cause hearing, heard representations regarding Plaintiff’s Show Cause Motion II, and
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issued an Order granting Plaintiff’s Show Cause Motion II. 3 Minutes of Proceedings, ECF No.
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47; Order, ECF No. 48 (ordering Defendants to appear and show cause on January 24, 2020).
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14 On January 24, 2020, Saffron appeared at the hearing and “offered excuses and promises, but he
15 failed to show cause why he and Circle Society should not be held in contempt for violating the
16 PI Order.” Contempt Order at p. 4, ECF No. 51. At the contempt hearing, Plaintiff requested
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compensatory damages incurred in the investigation and prosecution of Defendants’ contempt.
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The Court stated that it would entertain a motion by Plaintiff for such damages.
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II. ARGUMENT
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21 The Court has “inherent power to enforce compliance with [its] lawful orders through
22 civil contempt.” Shillitani v. United States, 384 U.S. 364, 368 (1966) (civil contemnors are
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25 3
At the January 10, 2020 hearing, the Court determined that Plaintiff’s Show Cause Motion I
26 was moot given that the TRO had been converted to a PI Order. See Tr. Show Cause Hearing
Jan. 10, 2020 at 8:13-24 (ECF No. 50). Defendants never complied with the TRO provisions
27 requiring access to Defendants’ documents.
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Case 2:19-cv-01697-JAD-DJA Document 56 Filed 01/31/20 Page 4 of 7
imprisoned only until they comply with the orders of the court and “carry ‘the keys of their
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2 prison in their own pockets’”) (quoting In re Nevitt, 117 F. 448, 461 (9th Cir. 1902)). Civil
3 contempt sanctions serve “to coerce obedience to a court order, or to compensate the party
4 pursing the contempt action for injuries resulting from the contemptuous behavior.” CFTC v.
5 Emerald Worldwide Holdings, 2:03-cv-8339, 2004 WL 3186580, at *2 (C.D. Cal. July 29, 2004)
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(quoting General Signal v. Donallco, Inc., 787 F.2d 1376, 1380 (9th Cir. 1986)).
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A district court has broad authority to fashion appropriate relief in civil contempt
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proceedings, so long as that relief is reasonably calculated to compel obedience with a prior court
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10 order. See McComb v. Jacksonville Paper Co., 336 U.S. 187, 193 (1949) (“The measure of the
11 court’s power in civil contempt proceedings is determined by the requirements of full remedial
12 relief.”); see also Perry v. O’Donnell, 759 F.2d 702, 704-05 (9th Cir. 1985) (finding a court may
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award attorney’s fees and expenses to the prevailing party in civil contempt actions without a
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showing of willfulness). Among those equitable powers a court inherently possesses to compel
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compliance with its orders is the authority to “award fees and expenses in civil contempt.”
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Innovation Ventures, LLC v. Distrib., Inc., 8:12-cv-00717, 2015 WL 5319815, at *2 (C.D. Cal.
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18 Apr. 29, 2015) (citing Perry v. O’Donnell, 759 F.2d at 706); see also Sheet Metal Workers Int’l
19 Ass’n v. EEOC, 478 U.S. 421, 444, n. 23 (1986) (noting award of attorney fees and expenses
20 compensated litigant for other party’s contemptuous conduct). It is also well settled that such
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awards may be made not only to private plaintiffs but to governmental agencies as well. CFTC
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v. Premex, Inc., 655 F.2d 779, 786 (7th Cir. 1981).
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Courts in similar cases have awarded compensatory damages to the CFTC for contempt
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25 proceedings. See, e.g., Emerald Worldwide Holdings, 2004 WL 3186580, at *11 (finding
26 defendants in contempt for TRO violations and awarding compensatory damages for expenses
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Case 2:19-cv-01697-JAD-DJA Document 56 Filed 01/31/20 Page 5 of 7
and attorneys’ fees incurred in investigation and prosecution of contempt); CFTC v. Premex,
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2 Inc., 655 F.2d at 786 (affirming award of fees and expenses to CFTC for costs of prosecuting
3 contempt proceedings following violation of injunction; “limited relief was compensatory rather
4 than punitive and was well within the discretion of the district court”); CFTC v. Sirras, 1984
5 Comm. Fut. L. Rep. (CCH) ¶ 22,103 (S.D.N.Y. April 25, 1984) (granting CFTC’s request for
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attorney’s fees and costs in connection with contempt proceeding even though court did not find
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defendant in contempt).
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The fees and expenses that Plaintiff seeks are limited to those incurred in demanding
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10 Defendants’ compliance with the TRO and PI Order, collecting evidence of the violations,
11 preparing two show-cause motions, and participating in three hearings before the Court to
12 address Defendants’ violations. In calculating the fees incurred, Plaintiff is claiming only
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twenty-four (24) hours in connection with each court hearing, which includes the day prior to the
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hearing, the day of the hearing, and the day following the hearing. 4 See Declaration of Danielle
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Karst in Support of Plaintiff’s Motion for Fees and Expenses and Compensatory Damages
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Worksheet, attached as Exhibit 1. Plaintiff substantially reduced the total number of hours spent
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18 in bringing its two show-cause motions and preparing for and attending the three court hearings.
19 Plaintiff also requests reasonable expenses incurred in traveling from Washington, D.C. to Las
20 Vegas, Nevada, for the three hearings in connection with Defendants’ contempt. See id. Here,
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there is ample evidence on the record that Defendants engaged in sufficiently unreasonable and
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burdensome conduct to warrant the imposition of attorneys’ fees and expenses.
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24
4
As explained in the Declaration of Danielle Karst, CFTC Trial Attorney Karst attended all
25 three hearings, and CFTC Investigator George Malas attended the December 2, 2019 hearing.
26 Accordingly, the CFTC requests: (1) seventy-two (72) hours of attorney time in connection
with three hearings at a value of $6,840; and (2) twenty-four (24) hours of investigator time in
27 connection with the December 2, 2019 hearing at a value of $1,937.28.
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Case 2:19-cv-01697-JAD-DJA Document 56 Filed 01/31/20 Page 6 of 7
CONCLUSION
1
2 For the foregoing reasons, Plaintiff requests that the Court grant its motion and issue
3 an order requiring Defendants to compensate Plaintiff for its fees and expenses incurred due
4 to Defendants’ contempt.
5 Dated: January 31, 2020 Respectfully submitted,
6
By: /s/ Danielle E. Karst
7 Danielle E. Karst
Timothy J. Mulreany
8 COMMODITY FUTURES TRADING
COMMISSION
9 Three Lafayette Centre
1155 21st Street, N.W.
10 Washington, D.C. 20581
Telephone: (202) 418-5000
11 Facsimile: (202) 418-5523
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Case 2:19-cv-01697-JAD-DJA Document 56 Filed 01/31/20 Page 7 of 7
CERTIFICATE OF SERVICE
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2 I certify that on January 31, 2020, I filed a copy of the foregoing Plaintiff CFTC’s Motion For Fees
3 and Expenses Caused By Defendants’ Contempt with the Clerk of the Court using the CM/ECF system. I
4 also certify that on January 31, 2020, I sent hard copies of the same to Defendants David Gilbert Saffron
5 and Circle Society, Corp. via U.S. Postal Service First-Class mail and electronic mail at the
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following addresses:
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David Gilbert Saffron
8
Los Angeles, CA
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via (1)USPS First-Class Mail; and (2) Electronic Mail to:
10 [email protected]; [email protected]
16 /s/Danielle Karst
Danielle Karst
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Case 2:19-cv-01697-JAD-DJA Document 56-1 Filed 01/31/20 Page 1 of 7
Exhibit 1
Declaration of Danielle E. Karst and CFTC’s
Compensatory Damages Worksheet
Case 2:19-cv-01697-JAD-DJA Document 56-1 Filed 01/31/20 Page 2 of 7
18 “CFTC”) in this action and have personal knowledge of the facts stated herein.
19 2. I submit this Declaration to verify and claim fees and expenses incurred by the
20 CFTC in connection with the contempt of Defendants David Saffron (“Saffron”) and Circle
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Society, Corp. (“Circle Society”).
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3. The CFTC filed two motions in order to address Defendants’ failures to comply
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with the Court’s October 3, 2019 Temporary Restraining Order (“TRO,” ECF No. 9) and
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25 December 6, 2019 Preliminary Injunction Order (“PI Order,” ECF No. 31): Motion for Issuance
26 of an Order to Show Cause as to Why Defendant Circle Society Should Not Be Held in Civil
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Case 2:19-cv-01697-JAD-DJA Document 56-1 Filed 01/31/20 Page 3 of 7
Contempt for Violation of the Court’s October 3, 2019 TRO (“Show Cause Motion I,” ECF No.
1
2 24), and Motion for Issuance of Order to Show Cause as to Why Defendants David Saffron and
3 Circle Society Should Not Be Held in Civil Contempt for Violations of the Court’s December 6,
4 2019 Preliminary Injunction Order (“Show Cause Motion II,” ECF No. 40).
5 4. In connection with the CFTC’s Show Cause Motions I and II, CFTC Investigator
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George H. Malas and I expended time and the CFTC incurred expenses in investigating whether
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Defendants violated this Court’s TRO and PI Order, collecting evidence of the violations, and
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preparing for and participating in three hearings before the Court. 1 See Minutes of Proceedings,
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12 connection with the CFTC’s Show Cause Motions I and II for Defendants’ contempt. To
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calculate this value, I multiplied the number of attorney hours worked by the hourly rate the
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CFTC expends for my work time. 2 Although I spent hundreds of hours making demands on
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Defendants to comply with the TRO and PI Order, conducting legal research, and drafting the
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Show Cause Motions I and II, the CFTC is requesting only seventy-two (72) hours for my work
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18 in connection with Defendants’ contempt, which includes the day prior to each court hearing, the
19 day of each court hearing, and the day following each hearing. See CFTC’s Compensatory
20 Damages Worksheet, attached to this Declaration. The following is a description of work I
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performed in connection with the CFTC’s Show Cause Motions I and II:
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23 1
There were three court hearings in connection with Defendants’ contempt: December 2,
24 2019, January 10, 2020, and January 24, 2020. CFTC Investigator George H. Malas prepared
for and attended the first hearing on December 2, 2019. I prepared for and attended all three
25 hearings in connection with Defendants’ contempt.
26 2
My hourly rate is $95 per hour, which is calculated by dividing my annual gross salary by
27 2087 work hours per year.
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2
Case 2:19-cv-01697-JAD-DJA Document 56-1 Filed 01/31/20 Page 4 of 7
a. Prepared for and traveled to/from Las Vegas, NV for December 2, 2019 hearing:
1 Reviewed documents, case law, newly-filed motion by defense counsel and order
2 (ECF Nos. 28, 29), and Show Cause Motion I; attended hearing . . . . . . . . . . 24 hours
3 b. Prepared for and traveled to/from Las Vegas, NV for January 10, 2020 hearing:
Reviewed documents, case law, correspondence from Defendant, and Show Cause
4 Motion II; attended hearing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 hours
5 c. Prepared for and traveled to/from Las Vegas, NV, for January 24, 2020 hearing:
6 Reviewed documents, case law, and Show Cause Motion II; drafted proposed
contempt order with recommended sanctions; attended hearing . . . . . . . . . . . 24 hours
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6. CFTC Investigator George H. Malas expended twenty-four (24) hours of
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investigator time at a value of $1,937.28 in connection with the CFTC’s Show Cause Motion I
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10 for Defendants’ contempt. To calculate this value, he multiplied the number of investigator
11 hours worked by the hourly rate the CFTC expends for his work time. 3 Although Mr. Malas
12 spent over one-hundred (100) hours, investigating, collecting evidence, and reviewing customer
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correspondence, the CFTC is requesting only twenty-four (24) hours for his work in connection
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with Defendants’ contempt, which includes the day prior to the December 2, 2019 court hearing,
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the day of the December 2, 2019 court hearing, and the day following the December 2, 2019
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hearing. See CFTC’s Compensatory Damages Worksheet, attached to this Declaration. The
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18 following is a description of work CFTC Investigator Malas performed in connection with the
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26 3
Mr. Malas’ hourly rate is $80.72 per hour, which is calculated by dividing his annual gross
27 salary by 2087 work hours per year.
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Case 2:19-cv-01697-JAD-DJA Document 56-1 Filed 01/31/20 Page 5 of 7
I and II for Defendants’ contempt. See CFTC’s Compensatory Damages Worksheet, attached to
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4 a. Round trip airfare between Washington, D.C. and Las Vegas, Nevada for Danielle
Karst and George Malas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,359.19
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6 b. Lodging for Danielle Karst and George Malas for the nights of December 1-2, 2019
in Las Vegas, Nevada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $787.24
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c. Government per diem allowance for Danielle Karst and George Malas for December
8 1-3, 2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $366.00
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d. Taxis in Washington, D.C. and Las Vegas, Nevada for December 1-3, 2019
10 (including to/from airports and courthouse) . . . . . . . . . . . . . . . . . . . . . . . . . . . $311.63
12 a. Round trip airfare between Washington, D.C. and Las Vegas, Nevada for Danielle
Karst . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $604.60
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14 b. Lodging for Danielle Karst for the nights of January 9-10, 2020 in Las Vegas, Nevada
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $333.54
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c. Government per diem allowance for Danielle Karst for January 9-11, 2020 . . . . . . . . .
16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $152.50
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d. Taxis in Washington, D.C. and Las Vegas, Nevada for January 9-11, 2020 (including
18 to/from airports and courthouse) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $149.01
22 b. Lodging for Danielle Karst for the nights of January 23-24, 2020 in Las Vegas,
Nevada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $414.21
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c. Government per diem allowance for Danielle Karst for January 23-25, 2020 . . . . . . . .
24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $152.50
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d. Taxis in Washington, D.C. and Las Vegas, Nevada for January 23-25, 2020
26 (including to/from airports and courthouse) . . . . . . . . . . . . . . . . . . . . . . . . . . . $140.82
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Case 2:19-cv-01697-JAD-DJA Document 56-1 Filed 01/31/20 Page 6 of 7
1 8. Based on the above-listed fees and expenses, the CFTC claims a total amount of
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$14,279.30 as compensatory damages for Defendants’ failures to comply with this Court’s
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October 3, 2019 TRO and December 6, 2019 PI Order.
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I declare under penalty of perjury that the foregoing is true and correct.
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STAFF HOURS WORKED CALCULATION
EMPLOYEE DATES HOURS WORKED VALUE DESCRIPTION
Airfare $604.60
Travel from Washington, DC to Las Vegas, NV
Lodging $401.12
for the December 2, 2019 Court Hearing re: the
12/1/2019 - 12/3/2019 Per Diem $213.50
CFTC's Motion for Issuance of Order to Show
Taxis $135.74
Cause, ECF No. 24 (Show Cause Motion I)
Subtotal $1,354.96
Airfare $604.60
Travel from Washington, DC to Las Vegas, NV
Lodging $333.54
C Trial Attorney for the January 10, 2020 Court Hearing re: the
1/9/2020 - 1/11/2020 Per Diem $152.50
anielle Karst CFTC's Motion for Issuance of Order to Show
Taxis $149.01
Cause, ECF No. 40 (Show Cause Motion II)
Subtotal $1,239.65
Airfare $730.78
Lodging $414.21 Travel from Washington, DC to Las Vegas, NV
1/23/2020 - 1/25/2020 Per Diem $152.50 for the January 24, 2020 Contempt Hearing, EC
Taxis $140.82 Nos. 40, 48
Subtotal $1,438.31
TOTAL $5,502.02
GRAND TOTAL $14,279.30
Case 2:19-cv-01697-JAD-DJA Document 56-2 Filed 01/31/20 Page 1 of 2
3
COMMODITY FUTURES TRADING Case No. 2:19-cv-1697-JAD-DJA
4 COMMISSION,
5 Plaintiff,
6 v.
12 This matter comes before the Court on Plaintiff Commodity Futures Trading
20 money shall be sent by U.S. postal money order, certified check, bank cashier’s
21 check, or bank money order, made payable to the Commodity Futures Trading
22
Commission and sent to the address below:
23
MMAC/ESC/AMK326
24 Commodity Futures Trading Commission
Division of Enforcement
25 6500 S. MacArthur Blvd.
HQ Room 181
26
Oklahoma City, OK 73169
27 (405) 954-6569 (office)
28
1
Case 2:19-cv-01697-JAD-DJA Document 56-2 Filed 01/31/20 Page 2 of 2
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IT SO ORDERED:
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___________________________________
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UNITED STATES DISTRICT JUDGE
14 DATED: _________________________
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