Advanced Cleanup Technologies, Inc. v. BP America, Inc. et al

Filing 98

ORDER FINDING PLAINTIFF IN CONTEMPT OF COURT by Judge Christina A. Snyder: The Court finds Plaintiff Advanced Cleanup Technologies, Inc. ("ACTI") in civil contempt of the 8/15/2017 Order. ACTI is ordered to pay a daily fine of $250.00 for each day it remains out of compliance with the August 15 Order 84 , beginning with the day following the date of this Order. ACTI's counsel, Andrew Callari, shall personally serve a copy of this Order, together with a copy of the 8/15/2017 Order, upon Ruben Garcia. (gk)

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UNITED STATES DISTRICT COURT

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CENTRAL DISTRICT OF CALIFORNIA

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ADVANCED CLEANUP
TECHNOLOGIES, INC.

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Plaintiff,

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v.

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BP America, Inc. et al

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Defendant.

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) Case No. 2:14-cv-09033-CAS(AJWx)
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) ORDER FINDING PLAINTIFF IN
) CONTEMPT OF COURT
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I.

INTRODUCTION & BACKGROUND
On October 16, 2014, plaintiff Advanced Cleanup Technologies, Inc. (“ACTI”)

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initiated this action against defendant BP America, Inc. in Los Angeles County Superior

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Court. Dkt. 1. On November 21, 2014, BP America removed this action to this Court on

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the basis of both federal question and diversity jurisdiction. Id. On June 7, 2016, BP

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filed a notice of settlement. Dkt. 62. Subsequently, two claimants, Cuda Enterprises,

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Inc.1 (“Cuda”) and Carmen M. Batriz (“Batriz”) filed notices of liens in this action

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Cuda assigned its judgment to HaYomYom, LLC in April 2015. Dkt. 87 at 1.

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against any recovery ACTI might obtain from BP America. On August 14, 2017, all

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interested parties signed a global settlement agreement, which was executed by the

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following individuals: Ruben Garcia, president of ACTI; Andrew Callari, counsel for

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ACTI; Steve Zipp, individually and as principal of HaYomYom, LLC; Glenn Johnson,

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individually and on behalf of the Law Office of Glenn Johnson; Roger Taylor,

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individually and on behalf of Michaels Andrews and Associates; and Carmen Batriz,

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individually and on behalf of CMB Professional Services. Dkt. 83. The Court issued an

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Order approving the stipulation on August 15, 2017. Dkt. 84.

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On November 17, 2017, Batriz filed a motion to set aside the Court’s August 15,

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2017 Order on the grounds that ACTI had failed to pay its settlement obligation under the

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terms of the global settlement. Dkt. 86. On November 27, 2017, ACTI filed an

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opposition, dkt. 88, and on the same day Johnson filed an opposition, dkt. 90. On

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December 4, 2017, Batriz filed a reply. Dkt. 91.

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The Court held a hearing on December 18, 2017, and requested that Johnson

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submit a proposed order to show cause why ACTI should not be held in contempt for

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failure to abide by the terms of the global settlement agreement. Dkt. 92. On December

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20, 2017, the Court ordered Ruben Garcia to appear before the Court on January 22,

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2018, and show cause why ACTI should not be found in contempt of Court and

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compelled to obey the August 15, 2017 Order. Dkt. 93.

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On January 19, 2018, ACTI filed a notice of deposit of its portion of the settlement

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agreement. Dkt. 94. The Court continued the hearing on the order to show cause to

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February 12, 2018. Prior to the February 12 hearing, ACTI’s counsel informed the Court

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that ACTI’s check did not clear and that it had been returned.

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On February 12, 2018, the Court held a hearing on the order to show cause. Garcia
failed to appear on behalf of ACTI.
Having carefully considered the parties’ arguments, the Court finds and concludes
as follows.

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II. LEGAL STANDARDS

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“[C]ourts have inherent power to enforce compliance with their lawful orders

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through civil contempt.” California Dep’t of Soc. Servs. v. Leavitt, 523 F.3d 1025, 1033

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(9th Cir 2008) (quoting Shillitani v. United States, 384 U.S. 364, 370 (1966)). A party’s

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conduct “need not be willful” to violate a court order, and there is “no good faith

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exception to the requirement of obedience.” In re Dual-Deck Video Cassette Recorder

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Antitrust Litigation, 10 F.3d 693, 695 (9th Cir. 1993). However, a party may avoid being

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found in contempt by demonstrating that its failure to comply with a court order was

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“based on a good faith and reasonable interpretation of the order.” Id. Additionally,

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“contempt is appropriate only when a party fails to comply with a court order that is both

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specific and definite.” Balla v. Idaho State Bd. of Corr., 869 F.2d 461, 465 (9th Cir.

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1989).

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“Sanctions for civil contempt may be imposed to coerce obedience to a court order,

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or to compensate the party pursuing the contempt action for injuries resulting from the

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contemptuous behavior, or both.” General Signal Corp. v. Donallco, Inc., 787 F.2d 1376,

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1380 (9th Cir. 1986). Coercive fines, or any portion thereof, are payable to the Court

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rather than to the opposing party. Id. When imposing a coercive civil contempt sanction,

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a court should consider: (1) the character and magnitude of the harm from continued

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noncompliance; (2) the probable effectiveness of any sanctions in achieving future

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compliance; (3) the amount of defendant’s financial resources; and (4) the willfulness of

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the violating party. See United States v. United Mine Workers of Am., 330 U.S. 258,

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303–04 (1946); General Signal Corp, 787 F.2d at 1380. The amount of a compensatory

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fine, on the other hand, should be based upon the movant’s actual losses suffered as a

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result of the violation. See Shuffler v. Heritage Bank, 720 F.2d 1141, 1148 (9th Cir.

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1983).

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III.

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DISCUSSION
As an initial matter, the Court’s August 15, 2017 Order is clear in its commands—

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the Order explicitly approved the global settlement agreement and ordered the signatory

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parties to consummate and perform the terms of the settlement. Dkt. 84. In particular,

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ACTI agreed that it would pay the “[confidential] settlement sum necessary to effectuate

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the global settlement to the ‘Callari & Summers Client Trust Account’ within five (5)

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business days of the date of this Order.”2 Dkt. 84 at 3.

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Because ACTI has failed to pay the $25,500.00 owed under the terms of the global
settlement agreement, the Court finds that ACTI has violated the Court’s August 15,

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2017 Order. ACTI purportedly deposited a $25,500.00 check into the Callari & Summers

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Client Trust Account on January 19, 2018, which was intended to satisfy ACTI’s

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obligation under the global settlement agreement. Dkt. 94. Yet, as ACTI’s counsel

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represented at the February 12, 2018 hearing, this check failed to clear and was returned.

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ACTI’s counsel also represented that, despite repeated assurances from Garcia, Garcia

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had yet to tender a settlement payment by the February 12 hearing date. In addition,

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Garcia failed to appear at the February 12 hearing in violation of the Court’s December

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20, 2017 Order. Accordingly, the Court finds that ACTI has failed to show cause why

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the Court should not find it in contempt for failing to obey the Court’s August 15, 2017

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Order.

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Because the Court finds that ACTI has failed to comply with the August 15, 2017

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Order, and because Garcia has failed to appear and thus has not explained ACTI’s failure

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to comply with the Court’s Order, the Court determines that a coercive fine is necessary

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to gain ACTI’s compliance. In light of ACTI’s $25,500.00 obligation under the terms of

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the global settlement, the Court finds that a coercive daily fine of $250.00 should be

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Though the global settlement’s payment terms were originally confidential,
ACTI’s “Notice of Deposit” provides that ACTI owes $25,500.00 under the terms of the
global settlement. Dkt. 94 at 1.

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imposed on ACTI for each day it remains out of compliance with the August 15, 2017

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Order. A fine of $250.00 a day payable to the Court is appropriate under the

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circumstances, given (1) the magnitude of the payment owed; (2) the multiple

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opportunities the Court has given ACTI to comply with the Court’s Order; (3) the 185

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days that ACTI has been out of compliance with the Court’s August 15, 2017 Order; and

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(4) Garcia’s repeated representations to his counsel that he would tender a settlement

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payment by the February 12, 2018 hearing date. Furthermore, a daily fine of $250.00 is

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within the range of coercive per diem fines issued by other district courts for civil

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contempt. See, e.g., Arabian Gas & Oil Dev. Co. v. Wisdom Marines Lines, S.A., No.

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16-CV-03801-DMR, 2017 WL 4390184, at *7 (N.D. Cal. Oct. 3, 2017) (finding a

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coercive daily fine of $500.00 was appropriate given the plaintiff’s failure to pay

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monetary sanctions in the sum of $31,017.26 in attorneys’ fees and costs, particularly in

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light of plaintiff’s substantial resources and access to significant assets necessary to fund

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its legal position); United States v. Wen-Bing Soong, No. C-13-4088 EMC, 2015 WL

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5168786, at *4 (N.D. Cal. Sept. 3, 2015) (imposing a coercive daily fine of $500.00 per

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spouse because the couple appeared to have significant financial resources, a lesser fine

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was unlikely to secure compliance due to the lengthy period of non-compliance, and

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further delay would prejudice the other party’s investigation); In re Chase Bank USA,

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N.A. Check Loan Contract Litig., No. 3:09-MD-2032 MMC, 2013 WL 772714, at *6

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(N.D. Cal. Feb. 28, 2013), aff’d in part, appeal dismissed in part, 607 Fed. Appx. 737 (9th

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Cir. 2015) (imposing a coercive daily fine of $300.00 against a class member for

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violating a court order enjoining class members from prosecuting released claims against

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the released parties in a class action settlement); United States v. Gillies, No. CV-11-

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3623 CW MEJ, 2013 WL 968244, at *2 (N.D. Cal. Feb. 22, 2013), report and

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recommendation adopted, No. 11-CV-03623-CW, 2013 WL 968231 (N.D. Cal. Mar. 12,

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2013) (imposing a coercive daily fine of $250.00 against an individual for failure to

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comply with court order for more than 300 days). Accordingly, the Court finds ACTI in

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civil contempt of the August 15, 2017 Order and concludes that a $250.00 coercive daily

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fine should be imposed for each day it remains out of compliance with the August 15,

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2017 Order.

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IV.

CONCLUSION

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In accordance with the foregoing, the Court finds ACTI in civil contempt of the

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August 15, 2017 Order. ACTI is ordered to pay a daily fine of $250.00 for each day it

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remains out of compliance with the August 15 Order, beginning with the day following

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the date of this Order.

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ACTI’s counsel, Andrew Callari, shall personally serve a copy of this Order,
together with a copy of the August 15, 2017 Order, upon Ruben Garcia.
IT IS SO ORDERED.

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DATED: February 16, 2018

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CHRISTINA A. SNYDER
UNITED STATES DISTRICT JUDGE

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