United States v. N.Y. Fish, Inc.

• Decision Date: 30 March 2014
• Docket Number: No. 13–CV–2909 RRM.,13–CV–2909 RRM.
• Court: U.S. District Court — Eastern District of New York
• Parties: UNITED STATES of America, Plaintiff, v. N.Y. FISH, INC., a corporation, New York City Fish, Inc., a corporation, Maxim Kutsyk, an individual, Pavel Roytkov, an individual, Leonid Staroseletsky, an individual, and Steven Koyfman, an individual, Defendants.

10 F.Supp.3d 355

UNITED STATES of America, Plaintiff

v.N.Y. FISH, INC., a corporation, New York City Fish, Inc., a corporation, Maxim Kutsyk, an individual, Pavel Roytkov, an individual, Leonid Staroseletsky, an individual, and Steven Koyfman, an individual, Defendants.

No. 13–CV–2909 RRM.

United States District Court, E.D. New York.

Signed March 30, 2014.

Adrienne E. Fowler, U.S. Department of Justice, Office of Consumer Litigation, Washington, DC, Elliot M. Schachner, United States Attorneys Office, Brooklyn, NY, for Plaintiff.

Stephen R. Foreht, Foreht Associates, LLP, Robert Y. Lewis, Freeman Lewis LLP, New York, NY, for Defendants.

MEMORANDUM AND ORDER ON BENCH TRIAL AND MOTION FOR INJUNCTIVE RELIEF

ROSLYNN R. MAUSKOPF, District Judge.

The United States seeks to enjoin two seafood production companies and their senior management from producing food products at a facility in Brooklyn alleged to be noncompliant with the federal Food, Drug, and Cosmetic Act (“FDCA”), 21 U.S.C. § 301 et seq. The government filed its complaint on May 17, 2013, alleging that defendants had violated 21 U.S.C. § 331(a) and (k) by introducing adulterated food into interstate commerce and by causing food to become adulterated while held for sale after the shipment of one or more components in interstate commerce. (See Doc. No. 1.) At that time, the government requested a preliminary injunction prohibiting defendants from further violations of those provisions. (See Doc. No. 2.)

On May 23, 2013, this Court ordered defendants to show cause why the government's application for preliminary injunctive relief should not be granted.¹ After briefing by the parties and with their consent, the Court consolidated the motion for a preliminary injunction with a bench trial on the merits. See Fed.R.Civ.P. 65(a)(2). Trial was held from July 9–10, 2013, during which the Court heard testimony from Peter M. Trunk, the FDA investigator who inspected the Chester Street facility in February 2013; Mary E. Losikoff, a Consumer Safety Officer in the Division of Seafood Safety at the FDA; Frank Costanzo, a seafood safety and regulatory compliance consultant retained by defendants; defendant Roytkov; and defendant Kutsyk. For the reasons that follow, the government's motion for injunctive relief is granted, with a directive to modify the proposed order of permanent injunction consistent with this opinion.²

BACKGROUND

As the findings of fact recounted below demonstrate, from about January 2006 through September 2012, defendant N.Y. Fish, Inc. (“N.Y.Fish”), a New York corporation, had its principal place of business at 738 Chester Street in Brooklyn, New York (“the Chester Street facility”). N.Y. Fish had a troubled history with the U.S. Food and Drug Administration (“FDA”). Between 2006 and 2012, the FDA conducted six inspections of the Chester Street facility and discovered violations of the FDCA each time. (See generally Decl. of Ronald M. Pace (“Pace Decl.”) (Doc. No. 13).)³ Most significantly, during that period environmental samples collected from various locations within the facility and from finished fishery products tested positive for Listeria monocytogenes (“L.mono” ).⁴ Several of the L. mono strains isolated at the Chester Street facility were found to persist from inspection to inspection.

N.Y. Fish ceased operations sometime in September 2012, leaving behind its processing logs, Hazard Analysis and Critical Control Point (“HACCP”)⁵ and Sanitation Standard Operating Procedure (“SSOP”)⁶ plans, records, fixtures, and equipment. Throughout October 2012, the Chester Street facility apparently sat vacant. During that month, however, defendant Kutsyk incorporated New York City Fish, Inc. (“N.Y.C. Fish”), which then leased the Chester Street facility and began operations on or about November 1, 2012. Like N.Y. Fish before it, N.Y.C. Fish prepares, processes, packs, holds, and distributes ready-to-eat smoked and cured fishery products, including salmon, mackerel, and herring. To staff his new company, Kutsyk hired a number of former N.Y. Fish employees.

In February 2013, an FDA inspection again documented significant HACCP and Current Good Manufacturing Practices (“CGMP”)⁷ violations. Kutsyk then retained Costanzo to provide advice concerning the procedures and systems necessary for the proper operation of a seafood factory. (Decl. of Frank Costanzo (“Costanzo Decl.”) (Doc. No. 15) ¶ 22.) Costanzo inspected the facility, observed the current practices at N.Y.C. Fish, and reviewed the documents from the February 2013 and August 2012 inspections. Kutsyk asserts that, in consultation with Costanzo, he made a number of beneficial changes at the Chester Street facility.⁸ The government maintains that these changes—if they were made at all—are insufficient to allay the FDA's concerns.

After briefing had been submitted on the issues in this case, the parties consented to a consolidation of the motion for preliminary relief with a bench trial on the merits. See Fed.R.Civ.P. 65(a)(2). Following trial, the parties submitted proposed findings of fact and conclusions of law, along with post-trial memoranda on all relevant issues. With the benefit of the record established at trial and the parties' submissions, the Court issues the following Findings of Fact and Conclusions of Law based on a preponderance of the evidence. See Fed.R.Civ.P. 52(a)(1) (“In an action tried on the facts without a jury ... the court must find the facts specially and state its conclusions of law separately. The findings and conclusions ... may appear in an opinion or a memorandum of decision filed by the court.”).

FINDINGS OF FACT⁹

In a bench trial, the Court “acts both as a determiner of whether a case meets the legal requirements for decision by a fact-finder and as a fact-finder.” Cabrera v. Jakabovitz, 24 F.3d 372, 380 (2d Cir.1994). “As the fact[-]finder, the [C]ourt is under a duty to weigh the evidence, determine the credibility of witnesses and draw whatever reasonable inferences the established facts may warrant.” United States v. Beigel, 254 F.Supp. 923, 932 (S.D.N.Y.1966), aff'd, 370 F.2d 751 (2d Cir.1967) ; see also Krist v. Kolombos Rest. Inc., 688 F.3d 89, 95 (2d Cir.2012) (“It is within the province of the district court as the trier of fact to decide whose testimony should be credited.”). “The obligations of the [C]ourt as the trier of fact are to determine which of the witnesses it finds credible, which of the permissible competing inferences it will draw, and whether the party having the burden of proof has persuaded it as fact[-]finder that the requisite facts are proven.” Cifra v. G.E. Co., 252 F.3d 205, 215 (2d Cir.2001).

Upon due consideration and examination of the developed factual record, including the parties' declarations and affidavits, the testimony of witnesses at trial, and the exhibits introduced into evidence, the Court makes the following findings of fact:

1. Defendant N.Y. Fish is a New York corporation. From at least January 2006 to at least October 2012, N.Y. Fish's principal place of business was located at 738 Chester Street, Brooklyn, New York. During that time period, N.Y. Fish prepared, processed, packed, held, and distributed ready-to-eat smoked and cured fishery products, including salmon, mackerel, and herring, in the Chester Street facility.

2. Defendant N.Y.C. Fish is a New York corporation, with its principal place of business at the Chester Street facility. N.Y.C. Fish was incorporated in October 2012 and entered into a lease of the Chester Street facility in November 2012. N.Y.C. Fish prepares, processes, packs, holds, and distributes ready-to-eat smoked and cured fishery products, including salmon, mackerel, and herring, in the Chester Street facility.

3. N.Y.C. Fish began operating at the Chester Street facility on or about November 1, 2012. Prior to that date, the facility sat vacant following the cessation of business by N.Y. Fish.

4. N.Y.C. Fish hired and currently employs individuals who formerly worked at N.Y. Fish. Eight of N.Y.C. Fish's fourteen employees were formerly employed by N.Y. Fish.

5. Defendant Kutsyk, an individual, is the President of N.Y.C. Fish. He is responsible for all of N.Y.C. Fish's business operations and oversees all aspects of the firm, including purchasing raw materials and making final decisions regarding employees, equipment, and business matters. He performs his duties at the Chester Street facility.

6. Defendant Pavel Roytkov, an individual, is the Vice President of N.Y.C. Fish, and former Vice President of N.Y. Fish. In his capacity as Vice President of N.Y.C. Fish, Roytkov reports directly to Kutsyk, oversees the purchase of raw materials and other supplies needed for the manufacturing operations, and oversees certain aspects of the manufacturing operations. In his capacity as Vice President of N.Y. Fish, he reported directly to the president of N.Y. Fish, oversaw the purchase of raw materials and other supplies needed for the manufacturing operations, and oversaw certain aspects of the manufacturing operations. Additionally, Roytkov was responsible for conducting the official HACCP review of all critical control point and process schedule monitoring records to ensure that values were within critical limits. His duties at both N.Y. Fish and N.Y.C. Fish were and are performed at the Chester Street facility. Roytkov failed to inform his new employer of the longstanding problems the FDA found in N.Y. Fish's HACCP records, which N.Y.C. Fish continued to use.

7. Defendant Leonid Staroseletsky, an individual, is the Plant Manager of N.Y.C. Fish, and former Plant Manager of N.Y. Fish. In his capacity as Plant Manager of N.Y.C. Fish, he reports directly to Kutsyk, oversees all manufacturing operations including monitoring production of all batches from raw material to finished product, processing methods and cooking/smoking ovens, plant sanitation, and product labeling, oversees employee management, and manages all sanitation

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