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In the United States Court of Appeals for the Fifth Circuit ______ Case: 14-20128 Document: 00513281189 Page: 1 Date Filed: 11/20/2015 No. 14-20128 In the United States Court of Appeals for the Fifth Circuit ________________________________________ JUAN RAMON TORRES; EUGENE ROBISON Plaintiffs-Appellees, V. SGE MANAGEMENT, LLC; ET AL., Defendants-Appellants. ________________________________________ On Interlocutory Appeal from the United States District Court for the Southern District of Texas, Houston Division, No. 4:09-CV-02056 ________________________________________ PETITION FOR REHEARING EN BANC ________________________________________ Andrew Kochanowski Thomas C. Goldstein SOMMERS SCHWARTZ, P.C. Eric F. Citron One Towne Square, Suite 1700 GOLDSTEIN & RUSSELL, P.C. Southfield, MI 48076 7475 Wisconsin Avenue Telephone: (248) 355-0300 Suite 850 Facsimile: (248) 936-2140 Bethesda, MD 20814 Telephone: (202) 362-0636 Matthew J.M. Prebeg Facsimile: (888) 574-2033 Brent T. Caldwell PREBEG, FAUCETT & ABBOTT PLLC 8441 Gulf Freeway, Suite 307 Houston, TX 77017 Telephone: (832) 742-9260 Facsimile: (832) 742-9261 Jeffrey W. Burnett JEFFREY W. BURNETT PLLC 12226 Walraven Huffman, Texas 77336 Telephone: (281)324-1400 Facsimile: (713) 583-1221 Case: 14-20128 Document: 00513281189 Page: 2 Date Filed: 11/20/2015 CERTIFICATE OF INTERESTED PERSONS The undersigned counsel of record certifies that the following listed persons or entities as described in the fourth sentence of Fifth Circuit Local Rule 28.2.1 are known to have an interest in the outcome of this case. These representations are made in order that the judges of this Court may evaluate possible disqualification or recusal. Plaintiffs-Appellees Counsel for Plaintiffs-Appellees Juan Ramon Torres Thomas C. Goldstein Eric F. Citron Eugene Robison GOLDSTEIN & RUSSELL, P.C. 5225 Wisconsin Avenue, NW Suite 404 Washington, DC 20015 Telephone: (202) 362-0636 Facsimile: (888) 574-2033 Matthew J.M. Prebeg Brent T. Caldwell PREBEG, FAUCETT & ABBOTT PLLC 8441 Gulf Freeway, Suite 307 Houston, TX 77017 Telephone: (832) 742-9260 Facsimile: (832) 742-9261 Jeffrey W. Burnett JEFFREY W. BURNETT PLLC 12226 Walraven Huffman, Texas 77336 Telephone: (281)324-1400 Facsimile: (713) 583-1221 Andrew Kochanowski SOMMERS SCHWARTZ, P.C. One Towne Square, Suite 1700 Southfield, MI 48076 Telephone: (248) 355-0300 Facsimile: (248) 936-2140 i Case: 14-20128 Document: 00513281189 Page: 3 Date Filed: 11/20/2015 Defendants-Appellants Counsel for Defendants-Appellants SGE Management, LLC Robert C. Walters (whose parent company Defendants- James C. Ho Appellants represent to be PointHigh Prerak Shah Partners, LP) GIBSON, DUNN & CRUTCHER LLP 2100 McKinney Avenue, Suite 1100 Stream Gas & Electric, Ltd. Dallas, Texas 75201-6912 (whose parent company Defendants- Telephone: (214) 698-3100 Appellants represent to be SGE Manage- Facsimile: (214) 571-2934 ment, LLC) Michael K. Hurst Stream SPE GP, LLC John F. Guild (whose parent company Defendants- GRUBER HURST JOHANSEN HAIL SHANK LLP Appellants represent to be Stream Gas & 1445 Ross Avenue, Suite 2500 Electric, Ltd.) Dallas, Texas 75202 Telephone: (214) 855-6800 Stream SPE, Ltd. Facsimile: (214) 855-6808 (whose parent company Defendants- Appellants represent to be Stream Gas & Vanessa J. Rush Electric, Ltd.) STREAM ENERGY 1950 Stemmons Freeway, Suite 3000 Ignite Holdings, Ltd Dallas, TX 75207 (whose parent company Defendants- Telephone: (214) 800-4464 Appellants represent to be Stream Gas & Electric, Ltd.) SGE Energy Management, Ltd. SGE IP Holdco, LLC (whose parent company Defendants- Appellants represent to be Stream Gas & Electric, Ltd.) SGE Georgia Holdco, LLC SGE Serviceco, LLC SGE Consultants, LLC Stream Georgia Gas SPE, LLC ii Case: 14-20128 Document: 00513281189 Page: 4 Date Filed: 11/20/2015 (whose parent company Defendants- Appellants represent to be Stream Gas & Electric, Ltd.) Stream Texas Serviceco, LLC SGE Ignite GP Holdco, LLC SGE Texas Holdco, LLC SGE North America Serviceco, LLC (whose parent company Defendants- Appellants represent to be Stream Gas & Electric, Ltd.) PointHigh Partners, LP PointHigh Management Company, LLC Chris Domhoff Rob Snyder Pierre Koshakji Douglas Witt Steve Flores Michael Tacker Darryl Smith Trey Dyer Donny Anderson Steve Fisher Randy Hedge Brian Lucia iii Case: 14-20128 Document: 00513281189 Page: 5 Date Filed: 11/20/2015 Logan Stout Presley Swagerty Mark Dean La Dohn Dean A.E. “Trey” Dyer III Sally Kay Dyer Dyer Energy, Inc. Diane Fisher Kingdom Brokerage, Inc. Fisher Energy, LLC Susan Fisher Mark Florez The Randy Hedge Companies, Inc. Murlle, LLC Robert L. Ledbetter Greg McCord Heather McCord Rose Energy Group, Inc. Timothy W. Rose Shannon Rose LHS, Inc. Haley Stout iv Case: 14-20128 Document: 00513281189 Page: 6 Date Filed: 11/20/2015 Property Line Management, LLC Property Line, LP Swagerty Management, LLC Swagerty Energy, Ltd. Swagerty Enterprises, LP Swagerty Enterprises, Inc. Swagerty, Inc. Swagerty Power, Ltd. Jeannie E. Swagerty Sachse, Inc. Terry Yancey Paul Thies Respectfully submitted, /s/ Thomas C. Goldstein Thomas C. Goldstein Counsel of Record v Case: 14-20128 Document: 00513281189 Page: 7 Date Filed: 11/20/2015 TABLE OF CONTENTS CERTIFICATE OF INTERESTED PERSONS ......................................................... i TABLE OF AUTHORITIES .................................................................................. vii INTRODUCTION .....................................................................................................1 BACKGROUND .......................................................................................................5 REASONS FOR GRANTING REHEARING EN BANC ........................................ 9 I. This Decision Fundamentally Undermines Pyramid-Scheme Law ................ 9 II. The Majority’s Decision Is Irreconcilable With The Unanimous View In The Circuits Regarding Classwide Inferences Of Reliance. ........... 11 CONCLUSION ........................................................................................................15 ADDENDUM: PANEL OPINION CERTIFICATE OF SERVICE vi Case: 14-20128 Document: 00513281189 Page: 8 Date Filed: 11/20/2015 TABLE OF AUTHORITIES Cases Amchem Prods., Inc. v. Windsor, 521 U.S. 591 (1997) .............................................................................................................. 1 Beattie v. CenturyTel, Inc., 511 F.3d 554 (6th Cir. 2007) .............................................................................................15 CGC Holding Co. v. Broad & Cassel, 773 F.3d 1076 (10th Cir. 2014) ..........................................................................1, 3, 12, 13 FTC v. BurnLounge, Inc., 753 F.3d 878 (9th Cir. 2014) ............................................................................................... 9 Halliburton Co. v. Erica P. John Fund, Inc., 134 S. Ct. 2398 (2014) .......................................................................................................... 4 In re U.S. Foodservice Inc. Pricing Litig., 729 F.3d 108 (2d Cir. 2010) .................................................................................. 12, 13, 14 In re Koscot Interplanetary, Inc., 86 F.T.C. 1106 (1975) .............................................................................................. 3, 10, 11 In re Nassau Cnty. Strip Search Cases, 461 F.3d 219 (2d Cir. 2006) ...............................................................................................15 Klay v. Humana, Inc., 382 F.3d 1241 (11th Cir. 2004) .................................................................................. 12, 13 Minter v. Wells Fargo Bank, N.A., 274 F.R.D. 525 (D. Md. 2011) ..........................................................................................12 Nguyen v. FundAmerica, Inc., 1990 WL 165251 (N.D. Cal. Aug. 16, 1990)..................................................................... 1 Piambino v. Bailey, 610 F.2d 1306 (5th Cir. 1980) ............................................................................................. 2 Reyes v. Netdeposit, LLC, 802 F.3d 469 (3d Cir. 2015) ...............................................................................................12 vii Case: 14-20128 Document: 00513281189 Page: 9 Date Filed: 11/20/2015 Rikos v. Procter & Gamble Co., 799 F.3d 497 (6th Cir. 2015) .............................................................................................1 1 Sandwich Chef of Tex., Inc. v. Reliance Nat'l Indemnity Ins. Co., 319 F.3d 205 (5th Cir. 2003) ..............................................................................4, 5, 14, 15 SEC v. Int’l Loan Network, Inc., 968 F.2d 1304 (D.C. Cir. 1992) ........................................................................................... 9 United States v. Gold Unlimited, Inc., 177 F.3d 472 (6th Cir. 1999) ............................................................................................... 9 Waste Mgmt. Holdings, Inc. v. Mowbray, 208 F.3d 288 (1st Cir. 2000) ..............................................................................................15 Webster v. Omnitrition Int'l, Inc., 79 F.3d 776 (9th Cir. 1996) .................................................................................... 2, 3, 6, 9 viii Case: 14-20128 Document: 00513281189 Page: 10 Date Filed: 11/20/2015 In my professional judgment, the panel decision conflicts directly with recent de- cisions from other circuits—including CGC Holding Co. v. Broad & Cassel, 773 F.3d 1076 (10th Cir. 2014)—and raises the following important precedent-setting question: Can the victims
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