THE BANKRUPTCY COURT LACKS JURISDICTION TO ENTERTAIN
THE RELIEF REQUESTED IN THE EMERGENCY MOTIONS
As set forth in accompanying Declaration of Gregory Grantham, Don R. Logan, (“DRL”) is not an employee or agent of Gregory Grantham. Gregory Grantham is not an owner, publisher, editor or In any way involved with the website, www.yagiscam.com. According to the motion, DRL is the person actually responsible for the website, but DRL is not a party to this adversary proceeding, nor is he creditor of Cobalis. DRL is a member of the public who
happens to own a website which publishes information and documents about the Defendants, including this bankruptcy case and adversary proceeding. Defendants have not brought DRL within the jurisdiction of this Court. They have not
even attempted to do so.
The orders sought would plainly affect him and curtail important freedoms which, as a citizen of this country, he possesses. It is dubious whether this Court would have jurisdiction over DRL even if the Defendants’ legal team filed an adversary proceeding against him, inasmuch as the subject matter does not relate to a case under Title 11, but rather to ‘speech’ about a case under Title 11.
If bankruptcy courts had jurisdiction over members of the public that post or publish information about bankruptcy cases, then every newspaper or news source reporting on bankruptcy cases would be under the general jurisdiction of the bankruptcy courts. That’s far astream of what Congress had in mind when it enacted Title 11. Even though the Defendants have the resources to employ attorneys from national firms who hire graduates of prestigious
law schools, many of whom clerked for federal appeals court justices, they act as if they don’t know the difference. Instead, they ask this Court to overstep its bounds on behalf of
defendants of questionable reputations in the securities markets by issuing orders on their clients’ behalf against a third party who has no connection to this case.
11 U.S.C. § 105 is not a roving commission to do equity or to do anything inconsistent with the Bankruptcy Code. Norwest Bank Worthington v. Ahlers, 485 U.S. 197, 206, 108 S.Ct. 963, 99 L.Ed.2d 169 (1988) (equity powers); Resorts Int'l, Inc. v. Lowenschuss (In re Lowenschuss), 67 F.3d 1394, 1402 (9th Cir.1995); Am. Hardwoods, Inc. v. Deutsche Credit Corp. In re Am. Hardwoods, Inc.), 885 F.2d 621, 624-26 (9th Cir.1989); Bear v. CoBen ( In re Golden Plan of Cal., Inc.), 829 F.2d 705, 713 (9th Cir.1986); In re Yadidi, 274 B.R. 843 (9th Cr. BAP 2002) at 848. It certainly does not authorize Bankruptcy Courts to address the contents of public websites that publish material concerning a case. Moreover, the language of § 105 fixes the limit at measures “necessary or appropriate to carry out the provisions of” the Bankruptcy Code. Golden Plan, 829 F.2d at 713; Yadidi, 274 B.R. at 848. Considering that the § 105 limit is to measures necessary or appropriate to carry out “the provisions of the Bankruptcy Code,” the fundamental problem is that it is difficult to haracterize a proctective order that seeks to take down a website and prohibit members of the public from asking government agencies to criminally prosecute the defendants in this case as carrying out the provisions of the Bankruptcy Code.
An “cease and desist” addressed to speech is more than filling in the interstices, which § 105 does not authorize. Cf. Yadidi, 274
B.R. at 848. Even if such an argument had some probative value, the 1st Amendment to the U.S. Constitution has supremacy and would appear to provide full protection to the website’s
content. A fundamental right of a citizen is to petition the government to redress grievances.
Defendants argument that § 105 authorizes this court to issue the requested protective order is not persuasive.
Similarly, F.R.B.P. 7026, (which incorporates F.R.C.P. 26) does not authorize the relief requested. The www.yagiscam.com website has nothing to do with the discovery process in this adversary proceeding. There is no discovery that is pending. When a new discovery request is made in this case, Defendants would have the right to seek a protective order as to the demanded documents or information, and that motion would rise or fall on the merits of
the arguments concerning the particular discovery items sought. There is no ripe issue before Case 8:09-ap-01705-TA Doc 72 Filed 01/14/11 Entered 01/14/11 12:59:52 Desc
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this court to resolve with a protective order. It would be unwise to issue a ‘look back’ protective order because it is impossible to know exactly the number of persons in possession
of or with copies or knowledge of documents previously produced, and which ones would or would not be bound by the protective order. Protective orders must be made before discovery
is produced or the plain implication is that any right to a protective order or relief is waived. A Court should not enjoin or restrict access to discovery documents after a long period has
passed since production, and where access had heretofore been unrestricted and dissemination may have been wide. There would be no purpose served in restricting parties and counsel from dissemination where the information is available from other sources. Plainly, at that point, confidentiality, if any existed, has been breached.
Defendants have not offered any evidence showing that documents posted at this website were subject to a protective order. Defendants make a claim of breach of confidentiality as to only one document posted on the website which Defendants claim is confidential – the redacted Sloan Securities account statement of Cornell Capital Partners from March and April, 2007, which was produced by Defendants in redacted form. However, this same document, in unredacted form, was produced by other parties in this and other cases.
The fact that this same document was available from other sources seriously undermines the notion that the ‘redacted’ version roduced by Defendants and or their counsel, would be ‘confidential’ at this juncture even if true.
Some of the depositions or transcripts and audio recordings osted on www.yagiscam.com available on the docket or available to the public. Hearings in court and documents in court files are public record. Absent a protective order or order sealing a file,
the mere fact that a critic of Defendants’ business practices has obtained a deposition or pleading available on PACER, and then made it available on a website for viewing is not against
any law and would appear to be well within the purview of the protections afforded to citizens under the 1st Amendment.
Case 8:09-ap-01705-TA Doc 72 Filed 01/14/11 Entered 01/14/11 12:59:52 Desc
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There is no competent evidence before this court that Cobalis or its attorneys are engaged in any of the conduct complained of in the motion. Indeed, based on the evidentiary objections to the Declaration of C. Luckey McDowell, Esq. and the attached exhibits, there is no evidence before this court if the objections are meritorious, (and they are). At best, Defendants could ask the Court to take judicial notice of the website and view it. The documents offered in support of the motion are not authenticated, are plainly hearsay, and exception would appear to apply.
II.
CONCLUSION
Respectfully, if the defendants or their principals do not like their pictures being displayed on yagiscam.com or the written requests to the SEC for investigation and prosecution of them, or the opinions stated on the website concerning their business practices, Plaintiff suggests that Defendants take these matters up directly with the owner of yagiscam.com and not through the misuse and suggested abuse of the rules governing discovery in adversary proceedings or the limited powers granted by Congress to Bankruptcy Courts in 11 U.S.C. § 105.
The Defendants have this individuals’ home address, phone number, or can reach him by e-mail at the address listed on the website, appropriately named:
Ineedtowhine@yagiscam.com
Dated: 1/14/201 LAW OFFICE OF GREGORY GRANTHAM
