Johnson et al v Couturier, Jr. et al

Filing 794

ORDER to SHOW CAUSE signed by Chief Judge Ralph R. Beistline on 7/24/12 ORDERING that Mr. Couturier is hereby ORDERED TO SHOW CAUSE why the Court should not compel him to authorize communication between Mr. Saakvitne and the IRS with regard to Couturier's Palm Desert property tax refund claim. Couturier shall file his stated reasons by on or before August 24, 2012. If the Court requires any further briefing from the parties, it will issue another order at that time. (Matson, R)

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF CALIFORNIA
GREGORY JOHNSON, et al.,
2:05-cv-02046-RRB-KJN

Plaintiffs,
vs.

ORDER TO SHOW CAUSE

CLAIR R. COUTURIER, JR., et
al.,
Defendants.

On May 31, 2012, Nicolas L. Saakvitne, the court-appointed
ESOP fiduciary, sent a letter to Judge Kimberly Mueller. Because
Judge Mueller previously assisted in this case as a settlement
judge, Mr. Saakvitne appears to have mistakenly assumed that she
had

continuing

jurisdiction

over

the

case.

In

his

letter,

Mr. Saakvitne expressed his concern that the ESOP was at risk of
failing

to

receive

certain

compensation

provided

for

in

the

settlement agreement; namely, the amount of any tax refund received
by Defendant Clair Couturier, Jr. for the return of the Palm Desert
real

property

that

he

had

previously

received

as

employment

compensation. According to Mr. Saakvitne, “Almost 2-1/2 years post
settlement, Plaintiffs have received nothing with respect to the
promised consideration and have been kept in the dark regarding

ORDER TO SHOW CAUSE - 1
2:05-CV-02046-RRB-KJN

what Mr. Couturier and his counsel are doing to comply with their
contractual obligations.”
Mr. Saakvitne proposes that the Court require Mr. Couturier to
authorize communication between the I.R.S. and Mr Saakvitne, on
behalf of the ESOP. He believes that this action is necessary to
ensure that the ESOP receives its due compensation under the
settlement.
Christopher J. Rillo, counsel for Couturier, sent his own
letter to Judge Mueller on June 6, 2012. Mr. Rillo voiced a concern
that Mr. Saakvitne was engaging in improper ex parte communication
with

the

Court.

He

also

argued

that

the

remedy

sought

by

Mr. Saakvitne was overly intrusive and that Couturier’s efforts to
obtain a tax refund for the return of the Palm Desert property had
not yet been resolved.
The Court will note first that there is no ethical problem
with Mr. Saakvitne’s letter. He is not a party to this litigation,
but is rather serving as an officer of the Court. The rules against
ex parte communications do not apply.
Next, the Court takes the issues raised by Mr. Saakvitne
seriously. There is no reason to doubt the credibility of his
concern regarding the disposition of the possible tax refund.
Mr. Rillo outlined in his letter some reasons why he believes that
communication between the IRS and the ESOP fiduciary is unnecessary

ORDER TO SHOW CAUSE - 2
2:05-CV-02046-RRB-KJN

and excessively intrusive. He also said, “Should your Honor desire
any further information, we stand ready to assist the Court.” Given
the

large

amount

of

potential

funds

and

the

gravity

of

the

fiduciary’s concerns, the Court would like to hear this additional
information.
Therefore, the Court rules as follows:
Mr. Couturier is hereby ORDERED TO SHOW CAUSE why the Court
should

not

compel

him

to

authorize

communication

between

Mr. Saakvitne and the IRS with regard to Couturier’s Palm Desert
property tax refund claim. Couturier shall file his stated reasons
by on or before August 24, 2012.

If the Court requires any further

briefing from the parties, it will issue another order at that
time.
IT IS SO ORDERED this 24th day of July, 2012.
S/RALPH R. BEISTLINE
UNITED STATES DISTRICT JUDGE

ORDER TO SHOW CAUSE - 3
2:05-CV-02046-RRB-KJN