Quantum Production Services v. Steven Austin

MEMORANDUM

The Plaintiffs, Quantum Production Services, LLC and Terry E. Kennedy (collectively “Quantum”), appeal from a district court order dismissing their complaint with prejudice on sovereign immunity grounds. We disagree with the district court’s conclusion that the relief sought by Quantum would interfere with the government’s interest in the funds in a manner that implicates sovereign immunity, but affirm on other grounds.

1. As a preliminary matter, the appeal is moot as to the more than $5 million that the government has already distributed to victims. See Friends of the Earth, Inc. v. Bergland, 576 F.2d 1377, 1379 (9th Cir.1978). Quantum’s argument that a decision by this court can still provide effective relief is unpersuasive because it is dependant on adding the United States as a defendant on remand. The United States has not waived its sovereign immunity in this case, and there is no reason to believe that Quantum could add the United States as a defendant. Moreover, even if Quantum could add the United States as a defendant, the United States could not be held liable as a subsequent transferee when the facts indicate that “the United States, armed with its own…