The government sought reverse veil piercing to collect a disgorgement order against Badger. The district court ruled Utah law does not recognize reverse piercing and that debt collection efforts were time barred. The panel reversed. It predicted that the Utah Supreme Court would recognize reverse veil piercing claims here given the dicta about the issue in recent opinions and the application of the doctrine in Utah Court of Appeals opinions. It also noted the Utah Supreme Court very recently approved reverse piecing though it denied the particular claim in that case. The panel also held that the federal debt collection statute did not apply here as disgorgement orders are not debt for purposes of the statute as the disgorgement is a means to disincentivize securities violations and not an amount owed to the government like a loan or a settlement amount.
Mendoza appealed the denial of motion to suppress. The panel affirmed. It held Mendoza’s consent was valid as the officer had reasonable suspicion that illegality was afoot given Mendoza’s alleged travel plans made no sense under the circumstances and Mendoza was extremely nervous. The panel held the prying open of the lining of one ice chest was within the scope of consent as Mendoza gave general permission to search and did not object to the prying. It finally held the search of the other ice chest (which resulted in the destruction of the chest) was justified by probable cause given the marijuana found in the first chest.