Piambino v. Bestline Products, Inc.

Decision Date30 September 1986
Docket NumberNo. 73-1230-CIV.,73-1230-CIV.
Citation645 F. Supp. 1210
PartiesPeter PIAMBINO, et al., Plaintiffs, v. BESTLINE PRODUCTS, INC., et al., Defendants. David Sylva, Compliance Officer of the Restitutionary Fund, Plaintiff-Intervenor.
CourtU.S. District Court — Southern District of Florida

Neal Morehart, pro se.

Lewis F. Hawkins, San Rafael, Cal., for Donald Omholt.

Robert Schuster, pro se.

Saul Tave, pro se.

Jerry J. Weiss, pro se.

Frank Ubhaus, Pitto, Ubhaus, Waite, Fedlei & Colonborg, San Jose, Cal., for Bestline, Brassfied, Colvin, Larkin & Soto.

Toro Ikeda, pro se.

Evelyn Langlieb Greer, P.A., Miami, Fla., for David Sylva.

David L. Eastis, pro se.

Smathers and Thompson, Miami, Fla., for Larry S. Huff.

James H. Joseph, P.C., Pittsburgh, Pa., pro se.

Robert C. Josefsberg, Miami, Fla., for Majority Class.

Frank Gafford, Lake City, Fla., for E.J. Beckman.

Ira Marcus, Ft. Lauderdale, Fla., for William Gelfound.

David P. Gibson, pro se.

Bert Hardcastle, pro se.

Larry D. Huff, pro se.

Bruce Rogow, Ft. Lauderdale, Fla., for Carl H. Hoffman.

James Herbert, pro se.

John Wolfe, pro se.

Kenneth Lutz, pro se.

Marvin Sternberg, pro se.

ORDER HOLDING CARL H. HOFFMAN & JAMES H. JOSEPH IN CONTEMPT OF COURT

MARCUS, District Judge.

Carl H. Hoffman and James H. Joseph, formerly lead counsel to the Plaintiff Majority Class have been ordered by this Court to pay into the Registry of the Court attorney's fees and reimbursed litigation expenses, with interest, which they received as part of an earlier, unsuccessful settlement of this cause. Upon their complete failure to meet that obligation, this Court conducted a civil contempt hearing on May 22 and 23, 1986. Having reviewed the evidence and arguments presented at that hearing, together with legal memoranda subsequently submitted by the parties, and having carefully considered the Opinion and Mandate of the United States Court of Appeals for the Eleventh Circuit Court in Piambino v. Bestline, 757 F.2d 1112 (11th Cir.1985) ("Piambino II"), the Court hereby finds Carl H. Hoffman and James H. Joseph to be in civil contempt of court. Carl H. Hoffman may purge himself of the contempt by the payment into the Court's Registry of $125,000 and James H. Joseph may purge himself of contempt by payment of $15,000. Both are directed to make such payment within seventy-five (75) days of the date of this Order.

I.

A detailed history of this lengthy and very troubled litigation is laid out by the Eleventh Circuit's Opinion in Piambino II. There the Circuit Court concluded that the settlement of this cause was manifestly unfair as it was accomplished at the expense of the minority members of the Plaintiff class, primarily to provide Hoffman and Joseph with attorney's fees. 757 F.2d at 1143-46. See also Piambino v. Bailey, 610 F.2d 1306, 1329 (5th Cir.), cert. denied, 449 U.S. 1011, 101 S.Ct. 568, 66 L.Ed.2d 469 (1980) ("Piambino I"). Upon reaching this conclusion the Circuit remanded the action to this Court for several express purposes, including the return of attorney's fees and expenses paid to Hoffman and Joseph. In this regard the Court explicitly held:

... Lead Counsel shall pay into the registry of the district court the attorney's fee and reimbursed litigation expenses they received in connection with the Bestline settlement, with interest at the legal rate from the date of this court's issuance of the mandate in Piambino I. Immediately upon its receipt of our mandate, the district court shall instanter, without a hearing, issue an order directing Lead Counsel to deposit such amount in the court's registry within thirty days of the date of its order. The order shall recite that Lead Counsel's failure to comply therewith shall subject them to the district court's contempt power.

Piambino I, 757 F.2d at 1146.

Pursuant to the Opinion and Mandate of the Circuit Court, this Court twice ordered Hoffman and Joseph to make the necessary reimbursement. An Order dated June 28, 1985 provided as follows:

Lead Counsel shall deposit into the Registry of this Court within thirty (30) days from the date of this Order the attorney's fee and reimbursed litigation expenses they received in connection with the Bestline settlement, with interest at the legal rate from the date of the issuance of the mandate in Piambino v. Bailey, 610 F.2d 1306 (5th Cir.) cert. denied, 449 U.S. 1011, 101 S.Ct. 568, 66 L.Ed.2d 469 (1980). Lead Counsel is herein advised that their failure to comply with the terms of this Order shall subject them to this Court's contempt power.

A second Order, dated December 13, 1985, explicitly directed Hoffman and Joseph to return their payment for attorney's fees and expenses to this Court.

Both Carl H. Hoffman and James H. Joseph are directed to pay into the Registry of this Court, by cash or check, the attorneys fees they received in connection with the Bestline settlement, no later than 5:00 p.m. on December 27, 1985. Counsel's obligation may not be satisfied by the assignment of receivables.

That Order, too, reminded lead counsel that their failure to comply with the terms of the Order would subject them to the Court's contempt power.

James Joseph and Carl Hoffman, on December 26th and 27th, respectively, notified the Court in writing of their asserted inability to comply with these Court Orders. Accordingly, on April 9, 1986, this Court issued an Order to Show Cause why Hoffman and Joseph should not be held in civil contempt for their failure to comply with this Court's Orders of June 28 and December 13, 1985. A hearing was commenced on May 22, wherein the contempt was ably prosecuted by counsel for Plaintiff-Intervenor.1 Both Hoffman and Joseph sought to avoid a finding of contempt by adducing evidence of their purported financial inability to comply with the Court Orders.

II.

Civil contempt is a remedial sanction designed and intended to obtain compliance with a court order or to compensate for damages sustained as a result of non-compliance. McComb v. Jacksonville Paper Co., 336 U.S. 187, 191, 69 S.Ct. 497, 499, 93 L.Ed. 599 (1948); National Labor Relations Board v. Blevins Popcorn Co., 659 F.2d 1173, 1184 (D.C.Cir.1981). The failure to comply need not be with the intent to disobey a court order; indeed, intent to disobey is not a prerequisite to a finding of civil contempt.

The absence of willfulness does not relieve from civil contempt. Civil as distinguished from criminal contempt is a sanction to enforce compliance with an order of the court or to compensate for losses or damages sustained by reason of noncompliance. See United States v. United Mine Workers, 330 U.S. 258, 303-304 67 S.Ct. 677, 701, 91 L.Ed. 884; Penfield Co. v. Securities & Exch. Commission, 330 U.S. 585, 590 67 S.Ct. 918, 921, 91 L.Ed. 1117; Maggio v. Zeitz, 333 U.S. 56, 68 68 S.Ct. 401, 407, 92 L.Ed. 476. Since the purpose is remedial, it matters not with what intent the defendant did the prohibited act. (footnote omitted) The decree was not fashioned so as to grant or withhold its benefits dependent on the state of mind of respondents. It laid on them a duty to obey specified provisions of the statute. An act does not cease to be a violation of a law and of a decree merely because it may have been done innocently.

McComb v. Jacksonville Paper Co., 336 U.S. 187, 191, 69 S.Ct. 497, 499, 93 L.Ed. 599 (1948). See also NLRB v. Blevins, 659 F.2d at 1183-84 (D.C.Cir.1981); NLRB v. Crown Laundry and Dry Cleaners Inc., 437 F.2d 290, 293 (5th Cir.1971).

Civil contempt hearings proceed in three stages:

Such proceedings involve (1) issuance of an order; (2) following disobedience of that order, issuance of a conditional order finding the recalcitrant party in contempt and threatening to impose a specified penalty unless the recalcitrant party purges itself of contempt by complying with prescribed purgation conditions; and (3) exaction of the threatened penalty if the purgation conditions are not fulfilled.

NLRB v. Blevins Popcorn Co., 659 F.2d at 1184. At the critical stages all parties are entitled to the guarantees of due process embodied in the Fourteenth Amendment. Shillitani v. United States, 384 U.S. 364, 370-371, 86 S.Ct. 1531, 1535-36, 16 L.Ed.2d 622 (1966); Skinner v. White, 505 F.2d 685, 690 (5th Cir.1974). A defendant in a civil contempt proceeding of course is not entitled to a jury trial. Shillitani v. United States, 384 U.S. at 371, 86 S.Ct. at 1536, citing Uphaus v. Wyman, 364 U.S. 388, 403-404, 81 S.Ct. 153, 155, 5 L.Ed.2d 148 (1960) (Douglas, J., dissenting). Nevertheless, notice given must be adequate to advise a party of the substance of the hearing.

A party petitioning for a civil contempt finding must prove by clear and convincing evidence that the respondent violated a court order. However, once the prosecuting litigant makes out a prima facie case, the burden of production shifts to the alleged contemnor, who may defend his failure on the grounds that he was unable to comply. To succeed on this defense, however, the respondent must go beyond a bald assertion of inability and satisfy his burden by introducing evidence in support of his claim. United States v. Hayes, 722 F.2d 723, 725 (11th Cir.1984); Combs v. Ryan's Coal Co., Inc., 785 F.2d 970, 984 (11th Cir.1986).

This burden is satisfied by making "in good faith all reasonable efforts to comply." United States v. Rizzo, 539 F.2d 458, 465 (5th Cir.1976). We construe this requirement strictly. "Even if the efforts he did make were `substantial,' `diligent' or `in good faith,' ... the fact that he did not make `all reasonable efforts' establishes that respondent did not sufficiently rebut the ... prima facie showing of contempt. The ... use of a `some effort' standard for measuring the strength of the defense would be an abuse of discretion." Hayes, 722 F.2d at 725 (citation omitted); Hodgson v. Hotard, 436 F.2d 1110, 1115 (5th Cir.1971).

Combs, 785 F.2d at 984.

Intervenor's burden of proof was easily met here. There can be no...

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