United States District Court, E.D. Texas, Sherman Division
MEMORANDUM OPINION AND ORDER
L. MAZZANT, UNITED STATES DISTRICT JUDGE
before the Court is Non-Party John R. Weber's Motion for
Relief (Dkt. #201). After reviewing the relevant pleadings
and motion, the Court finds the motion should be denied.
14, 2015, the Court granted the Securities and Exchange
Commission's (“SEC”) emergency ex parte
request and issued a temporary restraining order, asset
freeze, and other injunctive relief against Sethi Petroleum,
LLC (“Sethi Petroleum”) and Sameer Sethi (Dkt.
#11). The Court also appointed a receiver over Sethi
Petroleum (Dkt. #12). On May 26, 2015, the Court issued an
Agreed Order Granting Preliminary Injunction, Asset Freeze,
and Other Relief (Dkt. #23).
22, 2016, the SEC filed its Emergency Motion for Show Cause
Hearing to Hold Defendant and Others in Contempt (Dkt. #138).
On June 29, 2016, John Weber (“Weber”) filed a
response to the motion for show cause hearing (Dkt. #147). On
July 1, 2016, the SEC filed a reply to Weber's response
(Dkt. #149). The Court granted the SEC's motion and set a
show cause hearing for August 1, 2016 (Dkt. #153). On August
1, 2016, the Court held a hearing and ordered the parties to
provide further briefing on the issue of whether the
interests that Cambrian Resources LLC
(“Cambrian”) sold were, in fact, securities. On
August 2, 2016, all parties filed briefs on the issue (Dkt.
#161; Dkt. #163; Dkt. #164; Dkt. #165).
August 9, 2016, the Court issued a Memorandum Opinion and
Order (the “Order”) and found that “the SEC
established by clear and convincing evidence that Sameer
Sethi, Praveen Sethi, and John Weber each were aware of the
Preliminary Injunction and nevertheless violated the terms of
the Preliminary Injunction by directly or indirectly engaging
in the offer, issuance, or sale of securities through
Cambrian Resources LLC” (Dkt. #169 at pp. 29-30).
to the show cause hearing, Weber interviewed former Cambrian
employee Ontario Rowe (“Rowe”) about his
communications with Cambrian investors. Weber specifically
asked Rowe about all of his conversations with Beverlyn
Jorman (“Jorman”). Rowe told Weber about several
telephone conversations, but did not mention any email
communications. Based on Rowe's statements, Weber
believed that the telephone conversations were the full
extent of Rowe's communications with Jorman.
after the show cause hearing, Rowe informed Sameer Sethi that
Jorman emailed Rowe several times. Sameer later informed
Weber of the emails and Weber immediately began trying to
gain access to them. Julissa Martinez accessed Rowe's
email account on August 29, 2016, and found the emails
between Rowe and Jorman.
October 10, 2016, Weber filed a Motion for Relief asking the
Court to reconsider the Order under Federal Rule of Civil
Procedure 60(b)(2) (Dkt. #201). On October 7, 2016, the SEC
filed its response (Dkt. #210). On October 12, 2016, Weber
filed a reply (Dkt. #212).
motion seeking “reconsideration” may be construed
under either Federal Rule of Civil Procedure 59(e) or 60(b).
Shepherd v. Int'l Paper Co., 372 F.3d 326, 328
n.1 (5th Cir. 2004); see also Milazzo v. Young, No.
6:11-cv-350-JKG, 2012 WL 1867099, at *1 (E.D. Tex. May 21,
2012). Such a motion “‘calls into question the
correctness of a judgment.'” Templet v.
HydroChem Inc., 367 F.3d 473, 478 (5th Cir. 2004)
(quoting In re Transtexas Gas Corp., 303 F.3d 571,
581 (5th Cir. 2002)).
a motion for reconsideration is filed within 28 days of the
judgment or order of which the party complains, it is
considered to be a Rule 59(e) motion; otherwise, it is
treated as a Rule 60(b) motion.” Milazzo, 2012
WL 1867099, at *1; see also Shepherd, 372 F.3d at
328 n.1; Berge Helene Ltd. v. GE Oil & Gas,
Inc., No. H-08-2931, 2011 WL 798204, at *2 (S.D. Tex.
Mar. 1, 2011)). Weber filed his motion almost two months
after the Court's Order. Therefore it will be treated as
a Rule 60(b) motion.
60(b)(2) provides that a court may relieve a party from final
judgment based on “newly discovered evidence that, with
reasonable diligence, could not have been discovered in time
to move for a new trial under Rule 59(b).” Fed.R.Civ.P.
60(b). To succeed on a motion for relief from judgment based
on newly discovered evidence, the Fifth Circuit requires a
movant to demonstrate: (1) that the movant exercised
diligence in obtaining the information; and (2) the evidence
is material and controlling and clearly would have produced a
different result if present before the original judgment.
Hesling v. CSX Transp., Inc., 396 F.3d 632, 639 (5th
Cir. 2005) (quoting Goldstein v. MCI WorldCom, 340
F.3d 238, 257 (5th Cir. 2003)). The newly discovered evidence
must be in existence at the time of trial and not be
discovered until after trial. Longden v. Sunderman,
979 F.2d 1095, 1102 (5th Cir. ...