The opinion
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
MARCHELLA OF NY INC. No. 22-cv-551 (JS)(ST)
and NORTHEAST BANANA CORP.,
MEMORANDUM & ORDER
Plaintiffs, Re: Motion for Contempt
- against -
MEJIA TROPICAL PRODUCTS LLC
and MARVIN E. MEJIA,
Defendants.
APPEARANCES
For Plaintiffs: Gregory A. Brown, Esq.
McCarron & Diess
576 Broadhollow Road, Suite 105
Melville, New York 11747
For Defendants: No appearance.
SEYBERT, District Judge:
Presently before the Court is the unopposed Motion for
Contempt (hereafter, the “Motion”) of Plaintiffs Marchella of NY
Inc. (“Marchella”) and Northeast Banana Corp. (“Northeast”; together
with Marchella, the “Plaintiffs”) seeking an order (1) holding
defendants Mejia Tropical Products LLC (“Mejia Tropical”) and Marvin
E. Mejia (“Mejia”; together with Mejia Tropical, the “Defendants”)
in civil contempt, (2) directing the U.S. Marshals Service hold
Mejia in custody pending the purging of the Defendants’ contempt,
and (3) awarding Plaintiffs the fees and expenses incurred in
bringing this Motion. (See Motion, ECF No. 20; see also Support
Memo, ECF No. 22; Brown Support Decl., ECF No. 21.) For the
following reasons, the Motion is GRANTED to the extent articulated
herein.
BACKGROUND
The Court presumes familiarity with the facts underlying
this case, but provides the following summary for the reader’s
convenience, with the facts being drawn primarily from Attorney
Brown’s Support Declaration (see ECF No. 21).
Marchella commenced this action on January 31, 2022,
seeking to recover monies from Defendants, jointly and severally,
pursuant to the trust provisions of the Perishable Agricultural
Commodities Act, 7 U.S.C. § 499a, et seq. (“PACA”) for wholesale
quantities of produce it delivered to Defendants. (See Compl.,
ECF No. 1.)
Together with its Complaint, Marchella also sought an
emergency temporary restraining order against Defendants (see ECF
No. 2), which was granted; thus, on January 31, 2022, this Court
entered its “Temporary Restraining Order & Order to Show Cause Why
a Preliminary Injunction Should Not Be Issued Under Fed. R. Civ.
P. 65(b)” (hereafter, the “TRO”). (See ECF No. 9.) Among other
things, the TRO scheduled a February 10, 2022 hearing on
Marchella’s motion for a preliminary injunction against
Defendants. (See Prelim. Inj. Mot., ECF No. 3.)
On February 7, 2022, Northeast joined in this action
with the filing of an amended complaint (See Am. Compl., ECF No.
11). In aggregate, the Plaintiffs seek $209,252.50 in PACA trust
assets from Defendants. Northeast also joined Marchella’s request
for a preliminary injunction. (See Am. Mot. Prelim. Inj., ECF No.
12.)
At the February 10, 2022 preliminary injunction hearing,
no one appeared for the Defendants. (See Feb. 10., 2022 Min.
Entry, ECF No. 16; see also Brown Support Decl. ¶ 7 (“Despite
Defendants having been served twice, they failed to appear at the
February 10 preliminary injunction hearing.”).) Upon a showing
that Plaintiffs were entitled to a preliminary injunction under
PACA, the Court granted the amended preliminary injunction motion.
(See Minute Entry, ECF No. 16.) In its Preliminary Injunction
Order (hereafter, the “PI Order”), the Court directed, in relevant
part, that Defendants and others, including Defendants’
successors, “deliver to Plaintiffs’ counsel the sum of $209,252.50
by bank check or wire transfer” and:
that within five business days of the date of
this Order, Defendants shall supply to
Plaintiffs’ counsel the following documents
regarding the assets of Mejia Tropical, its
successors, subsidiaries and related
companies: (1) most recent balance sheets and
profit/loss statements; (2) all accounts
receivable records showing all funds collected
by or on behalf of Defendants in the last sixty
days in addition to all records showing
accounts receivable currently outstanding,
including names, addresses, amounts and other
documentation such as invoices and account
statements necessary for collection purposes;
(3) all documents related to funds owed to
Defendants on behalf of credit/debit card
processors and any other electronic funds
transfers due Defendants; and (4) all
financial records, such as income tax returns,
bank account statements, checking account
registers and cash receipt records, showing
transfer of funds to or from Mejia Tropical in
the last six months; and . . . .
Defendants shall take such steps as are
necessary to preserve all of Mejia Tropical’s
books and records, whether electronic or
otherwise, and are required to fully cooperate
with Plaintiffs’ attorneys’ efforts to effect
collection of the accounts receivable of Mejia
Tropical, its successors, subsidiaries and
related companies by, among other things,
providing Plaintiffs’ attorneys with any and
all documents and things, including but not
limited to computers, software, usernames,
passwords and documents, reasonably requested
by Plaintiffs’ counsel in connection with
their collection efforts.
(PI Order, ECF No. 18, at 4, 5 (emphases added).) The PI Order
“was served on Defendants in the same manner as required by the
Federal Rules for service of a summons. Plaintiffs caused a copy
of the PI Order to be left with a person of suitable age and
discretion at Mejia’s home and by delivering a copy of the PI Order
to the New York State Secretary of State.” (Brown Support Decl.
¶ 10 (citing ECF Nos. 17 and 19, respectively).) Further,
Plaintiffs’ counsel “personally sent a text message to . . .
Mejia’s last known cell phone number providing a link Mejia could
use to view a PDF of the PI Order.” (Id. ¶ 11.) However,
“[d]espite Plaintiffs’ efforts to ensure Defendants received a
copy of the PI Order, Defendants have not contacted [Plaintiffs’
counsel’s] office or either of the Plaintiffs since the
commencement of this action.” (Id. ¶ 12.)
To date, Plaintiffs’ counsel has collected $10,522.00 of
the aggregate $209,252.50 due the Plaintiffs from the PACA trust
assets held by Defendants. (See Brown Support Decl. ¶¶ 3, 15.)
Plaintiffs’ counsel has not received any documentation from
Defendants. (See id. ¶ 12 (“Defendants have not produced a single
document to my office, turned over so much as a penny, nor have
they participated in any way with my office’s efforts to collect
Mejia Tropical’s accounts receivable.”).) Further, a review of
the Case Docket comports with Plaintiffs’ counsel’s averment that
“Mejia has completely ignored this action and has not taken any
steps to comply with the clear provisions of the PI Order.” (Id.;
cf. Case Docket, in toto.)
DISCUSSION
I. Applicable Law
A party or nonparty may be held in civil
contempt for failure to comply with a court
order if (1) the order the contemnor failed to
comply with is clear and unambiguous, (2) the
proof of noncompliance is clear and
convincing, and (3) the contemnor has not
diligently attempted to comply in a reasonable
manner.
CF Fresh, LLC v. Carioto Produce, Inc., No. 20-CV-0884, 2022 WL
247743, at *4 (N.D.N.Y. Jan. 27, 2022) (quoting Fox v. Lee, No.
15-CV-0390, 2018 WL 1187404, at *3 (N.D.N.Y. Feb. 5, 2018); further
citation omitted). “A party who violates an injunction entered by
the district court faces the threat of both civil and criminal
contempt.” Paramedics Electromedicina Comercial, Ltda v. GE Med.
Sys. Info. Techs., Inc., 369 F.3d 645, 657 (2d Cir. 2004); see
also 18 U.S.C. § 401 (“A court of the United States shall have
power to punish by fine or imprisonment, at its discretion, such
contempt of its authority, and none others as . . . [d]isobedience
or resistance to its lawful writ, process, order, rule decree, or
command.”); Leser v. U.S. Bank Nat’l Ass’n, No. 09-CV-2362, 2011
WL 1004708, *6 (E.D.N.Y. Mar. 18, 2011) (“[C]ourts have inherent
power to enforce compliance with their lawful orders through civil
contempt.” (citations omitted)).
“The imposition of civil contempt sanctions may serve
dual purposes: to secure future compliance with court orders and
to compensate the party that has been wronged.” Paramedics
Electromedicina, 369 F.3d at 657 (citation omitted). “A district
court has ‘considerable discretion in determining whether a
coercive sanction is necessary and, if so, the form it will take.’”
Leser, 2011 WL 1004708, *14 (quoting Leadsinger v. Cole, No. 05-
CV-5606, 2006 WL 2266312, at *21 (S.D.N.Y. Aug. 4, 2006), and
collecting cases). Factors a court should consider when
determining whether civil contempt sanctions should be imposed
are: “(1) the character and magnitude of the harm threatened by
continued contempt, (2) the probable effectiveness of the proposed
sanction, and (3) the financial consequences of that sanction upon
the contemnor [(hereafter, the “Contempt Sanction Factors”)].” In
re Grand Jury Witness, 835 F.2d 437, 443 (2d Cir. 1987) (citing
United States v. United Mine Workers of Am., 330 U.S. 258, 304
(1947); further citation omitted)). “Arrest is an appropriate
sanction for civil contempt as long as the confinement is
conditioned upon compliance.” Leser, 2011 WL 1004708, at *14
(quoting Leadsinger, 2006 WL 2266312, at *21, and collecting
cases). However, “in selecting contempt sanctions, a court is
obligated to use the ‘least possible power adequate to the end
proposed.’” Id. at *11 (quoting Shillitani v. United States, 384
U.S. 364, 371 (1966); further citation omitted).
II. Application
The record in this action convincingly supports finding:
(1) Defendants had notice of the PI Order (see, e.g., Affs. of
Serv., ECF Nos. 17, 19; see also Brown Support Decl. ¶¶ 10-11,
18); (2) the PI Order is clear and unambiguous, especially as to
the Defendants’ obligations to, inter alia, “deliver any and all
PACA trust assets held on Defendants’ behalf, up to $209,252.50,
to counsel for Plaintiffs” (PI Order at 4), and turn over to
Plaintiffs’ counsel various documents regarding the assets of
Mejia Tropical (see id.; see also id. at 5.); (3) Defendants
clearly are in noncompliance with the PI Order having failed to
deliver to Plaintiffs’ counsel the subject PACA trust assets, with
counsel having been able to recover only $10,522.00 of the
$209,252.50 owed to Plaintiffs (see, e.g., Brown Support Decl.
¶ 13); and (4) the Defendants have not diligently attempted to
comply in a reasonable manner with the PI Order (see, e.g., id.
¶¶ 12-14).
More specifically as to Defendants’ lack of diligence in
compliance: To the extent Mejia has formed a new entity, i.e.,
Island Banana Corp., as a means of avoiding the consequences of
the PI Order (see, e.g., id. ¶¶ 16-18; see also Ex. D, ECF No. 21-
1 at ECF pp.14-17), that effort is unavailing. As Plaintiffs
astutely argue, “Island Banana Corp. is run by the same
principal[], out of the same location, and sells produce to the
same customers” and “appears to be a clear successor to Mejia
Tropical, [which] is thus subject to the PI Order, and is also
subject to Mejia Tropical’s PACA liability.” (Support Memo at 4
(citing S. Katzman Produce, Inc. v. JAT Bev. Inc., No. 17-CV-7930,
2018 WL 6437058, at *4 (S.D.N.Y. Dec. 7, 2018)).) Indeed, the
Court clearly states at several points in the PI Order that it
also applies to the Defendants’ successors. (See PI Order at 4
(unnumbered Decretal ¶¶ 2-3); id. at 5 (unnumbered Decretal ¶¶ 5-
6).) This, together with the Court’s findings delineated above,
warrants holding Defendants in civil contempt for willfully
failing to comply with their obligations under the PI Order.
Given the Defendants’ civil contempt, Plaintiffs request
the Court issue an order directing the U.S. Marshals Service hold
Mejia in custody pending Defendants purging of that contempt;
Plaintiffs further seek an award of their legal fees and expenses
incurred in bringing this Motion. (See Motion at 5.) Despite the
evidence that (i) Defendants know of the PI Order and are
deliberately violating it, (ii) Mejia Tropical’s successor, Island
Banana Corp., is also in noncompliance of the PI Order, to which
it is subject, and (iii) Defendants are on notice of this Motion,
including the relief sought by Plaintiffs (see Affs. Serv., ECF
Nos. 23, 24); and, notwithstanding (iv) this Court’s discretion to
fashion a coercive remedy, which may include detention, see, e.g.,
EEOC v. Local 28 of the Sheet Metal Workers Int’l Ass’n, 247 F.3d
333, 336 (2d Cir. 2001); N.Y. State Nat’l Org. for Women v. Terry,
886 F.2d 1339, 1353 (2d Cir. 1989), and (v) the likelihood that
(a) the subject trust assets have been dissipated, and (b) that
Defendants cannot or will not comply with a monetary sanction, the
Court will afford Defendants a final, short opportunity to come
into compliance with the PI Order and, thus, voluntarily purge
their contempt before imposing the draconian condition of
detention to coerce said compliance. However, DEFENDANTS ARE ON
NOTICE: Failure to turn over to Plaintiffs’ counsel within five
(5) business days from the date of service of this Memorandum &
Order either the balance of the trust assets or the requested
documents will result in the Court directing the U.S. Marshals
Service to hold Mejia in custody pending the perjuring of
Defendants’ contempt. This interim approach strikes a balance
between the Court’s consideration of the Contempt Sanction Factors
and the relief requested by Plaintiffs; by providing Defendants
with a final, short time within which to comply with the PI Order
before issuing an order for Mejia’s detention, this Order is
intended to impact Defendants using the “least possible power
adequate to the end proposed.”
CONCLUSION
Accordingly, IT IS HEREBY ORDERED:
A. Plaintiffs’ Motion (ECF No. 20) is GRANTED, with the Court
finding the Defendants are in contempt of the PI Order;
B. Defendant shall have five (5) business days from the date of
service of this Memorandum & Order to turn over to Plaintiffs’
counsel either (1) the balance of the trust assets or (2) the
requested documents as more fully detailed in the PI Order
(see PI Order at 4 (unnumbered Decretal ¶ 3), and at 5
(unnumbered Decretal ¶7));
C. If Defendants fail to timely turn over to Plaintiffs’ counsel
either the balance of the trust assets or the requested
documents, then upon the filing of an affidavit by Plaintiffs
that Defendants are also in noncompliance with this
Memorandum & Order, the Court WILL issue a further order
directing the U.S. Marshals Service to hold Mejia in custody
pending the purging of Defendants’ contempt;
D. Plaintiffs shall have until July 29, 2022 to move for an award
of their legal fees and expenses incurred in bringing this
Motion; and
E. Plaintiffs are to serve Defendants with a copy of this Order,
either personally or by an express, overnight delivery
service (e.g., Federal Express) by no later than 6:00 p.m.
(E.S.T.) on Friday, June 24, 2022 and file proof of said
service forthwith.
SO ORDERED.
/s/ JOANNA SEYBERT
Joanna Seybert, U.S.D.J.
Dated: June 22, 2022
Central Islip, New York