WASHINGTON — Former Miami, Fla. budget director Michael Boudreaux is seeking a rehearing before a full federal appeals court after a three-judge panel earlier this year denied his claim of immunity from a Securities and Exchange Commission lawsuit.
Boudreaux filed a motion on Monday with the U.S. Court of Appeals for the Eleventh Circuit in Atlanta seeking an "en banc" rehearing in the hope that the full court will decide the matter differently.
His action follows a three-judge appeals court panel's Sept. 5 affirmation of a federal district court's dismissal of Boudreaux's claim that he was immune from SEC charges on the grounds that he was acting within the scope of his official duties when he signed off on fund transfers the SEC said were designed to mask financial shortcomings in Miami's general fund and help obtain better bond ratings.
Boudreaux's attorneys argued that he was entitled to "qualified immunity" from the lawsuit, which seeks to levy financial penalties against both him and the city in connection with what the SEC alleges was a fraudulent 2009 bond offering. Both the city and Boudreaux have denied any wrongdoing.
In this latest filing, Boudreaux's attorney argued that the lower court erred when it limited the scope of the qualified immunity defense. Qualified immunity protects government officials performing discretionary functions when their actions do not clearly violate someone's established statutory or constitutional rights. The district court dismissed Boudreaux's argument, saying the SEC is seeking monetary penalties that would be paid to the U.S. Treasury rather than traditional civil damages.
The appeals court stated in its opinion that no appeals court has previously decided whether municipal officials are entitled to qualified immunity in an SEC enforcement action. It also noted that while the defense has been applied to officials brought to civil court, "there is no history at common law of civil immunities being applied as a defense to federal enforcement actions."
Boudreaux's attorney Benedict Kuehne wrote that an en banc hearing is crucial to provide future guidance to courts considering the question of qualified immunity for public officials.
"Because this court's order denying qualified immunity to public officials is a matter of first impression having impact far beyond the particular facts of this case, especially in its application to public officials who have not violated clearly established law, en banc consideration will provide guidance to the courts, regulators, and public officials throughout the United States concerning the allowable scope and impact of government enforcement actions against municipal and public officials by all regulatory enforcement agencies," Kuehne wrote.
En banc rehearing petitions are rarely granted. The only other body capable of reversing the three-judge appeals court panel's decision is the Supreme Court. The SEC has placed the case against both Boudreaux and the city on hold pending the results of Boudreaux's appeals, and will continue to press the suit at the district level if his appeals efforts fail.
