United States District Court, N.D. California, San Jose Division
ORDER DENYING MOTION FOR RELEASE OF FUNDS OR STAY OF
PROCEEDINGS, RE: DKT. NO. 1235
J. DAVILA United States District Judge.
before the court is Defendant Mark Feathers'
(“Defendant”) motion for an order releasing
certain funds held in receivership so that Defendant
“may retain and pay private counsel for his defense in
his pending criminal case.” Dkt. No. 1235. In the
alternative, Defendant “requests a stay of distribution
of set-aside funds until resolution of his criminal
motion is suitable for decision without oral argument and the
hearing scheduled for June 29, 2017, is VACATED. Civ. L.R.
7-1(b). As to Defendant's requests, the court finds,
concludes and orders as follows:
instant motion, by its own terms, “is brought under the
Sixth Amendment of the Due Process Clause.” “The
Sixth Amendment requires effective assistance of counsel at
critical stages of a criminal proceeding.”
Lafler v. Cooper, 566 U.S. 156, 165 (2012) (emphasis
added). Consequently, mention to it is unusual in a civil
action like this one because “it is well established
that there is generally no constitutional right to counsel in
civil cases.” United States v. Sardone, 94
F.3d 1233, 1236 (9th Cir. 1996). Rather, “‘[a]
civil litigant's right to retain counsel is rooted in
fifth amendment notions of due process.” Anderson
v. Sheppard, 856 F.2d 741, 747-48 (6th Cir. 1988).
Nonetheless, Defendant “requests initial consideration
of his motion for release of funds under the Sixth
Amendment” in light of a reference to United States
v. Spiegel, 995 F.2d 138 (9th Cir. 1993), made by Judge
Koh in an order filed within Defendant's criminal action.
In relevant part, the Ninth Circuit observed in
Spiegel that a district court's authority over a
case is vested in the district itself; that is, authority to
issue orders resides in all of the judges assigned to preside
in the district, rather than in any one particular judge. 995
F.2d at 141 (citing United States v. Unimex, Inc.,
991 F.2d 546 (9th Cir. 1993)). For Spiegel, this meant he
could properly raise Sixth Amendment issues from his criminal
case in a civil action before another judge of the same
district, since an injunction issued in the latter case
placed significant limitations on his ability to pay for
retained counsel with his own funds. Id.
Though the undersigned has no quarrel with the basic premise
for which Defendant cites Spiegel, there are
significant differences between the facts of that action and
the circumstances presented here. First, unlike the judge
assigned to Spiegel's civil action, the undersigned is
unable to consider any of the issues properly dedicated to
the criminal case due to the recusal order filed on November
7, 2016. Dkt. No. 84 in Case No. 5:14-cv-00531-LHK. Being
disqualified for cause on its own motion, it would be
“incurable error” for this court to now proceed
on an aspect of the criminal case and adjudicate
Defendant's Sixth Amendment claim. Stringer v. United
States, 233 F.2d 947, 948 (9th Cir. 1956). Again, the
Sixth Amendment does not govern issues of Defendant's
representation in the civil action, and could only be
applicable in the criminal case.
Second, Defendant does not persuasively explain why the
undersigned has not been divested of jurisdiction to issue
the order he requests, even if he brought this motion under
the due process clause of the Fifth Amendment. “Once a
notice of appeal is filed, the district court is divested of
jurisdiction over the matters being appealed.” Nat.
Res. Def. Council Inc. v. Sw. Marine Inc., 242 F.3d
1163, 1166 (9th Cir. 2001). It retains jurisdiction during
the pendency of an appeal only to act to preserve the status
quo. Id. Defendant has filed numerous notices of
appeal, including one from the order granting the Securities
and Exchange Commission's summary judgment motion, by
which the court essentially determined that Defendant did not
own the funds he now seeks, and was not entitled to
indemnification under certain provisions of the Funds'
operating agreement. Dkt. No. 593. As such, distributing the
funds to Defendant at this juncture would arguably represent
a significant deviation from the status quo, if not
completely undermine the findings that are on appeal.
Furthermore, Defendant's request for an order staying
distribution of the set-aside funds is moot in light of the
order filed on February 10, 2017, which requires the Receiver
to continue to maintain the funds until resolution of the
appellate proceedings. Dkt. No. 1238.
these reasons, Defendant's motion is DENIED.
 The criminal case is United States
v. Feathers, Case No. 5:14-cv-00531-LHK. Defendant filed
a motion similar to this one in the criminal case, which has