Securities And Exchange Commission v. Detroit Memorial Partners, LLC et al

Filing 134

OPINION AND ORDER granting #118 Motion to File Redacted Documents. Signed by Judge William S. Duffey, Jr on 12/2/2015. (anc)

I. BACKGROUND
This is a motion seeking sanctions against Tarek M. Baydoun, Jeffrey R.
Hicks, The Meridian Law Group, Abdul K. Charara, and Waad Charara (the
“Respondents”) for violating this Court’s Order Appointing Receiver (the
“Appointment Order”). In the Appointment Order the Court appointed Jason
Alloy as the Receiver for Detroit Memorial Partners, LLC (“Detroit Memorial”).
The Court also barred any present or future litigation against Detroit Memorial
Partners, LLC and against Detroit Memorial’s past and present officers, directors,
and agents.
The Respondents, on or about July 31, 2015, filed an action in Michigan
State Court against Detroit Memorial, and two of its principals—David Shipper
and Mark Morrow (the “Michigan Action”). Before the Michigan Action was
filed, the Receiver provided Respondent Baydoun with a copy of the Appointment
Order. Baydoun acknowledged he read the Order and represented he would first
seek leave of the Receiver before the Michigan Action was filed. The Receiver
advised Baydoun that should he request consent to file the action, he would not
consent to it. He told Baydoun: “If you or anyone else violates the Court order,
we will move for contempt.” Contempt Motion, Ex. B [126.2] at 4. Despite this

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warning, the Michigan Action was filed. The Receiver promptly filed the
Contempt Motion.
On August 28, 2015, the Respondents moved for additional time to respond
to the Contempt Motion. As of the date of this Order, none of the Respondents
have filed a response.
II. DISCUSSION
To establish civil contempt, a movant must show by clear and convincing
evidence that: (1) the order was valid and lawful; (2) the order was clear and
unambiguous; and (3) the alleged violator had the ability to comply. Ga. Power
Co. v. NLRB, 484 F.3d 1288, 1291 (11th Cir. 2007); Riccard v. Prudential Ins.
Co., 307 F.3d 1277, 1296 (11th Cir. 2002). The movant bears the initial burden of
producing evidence that establishes “by clear and convincing evidence that the
alleged contemnor violated the court’s earlier order.” United States v. Roberts,
858 F.2d 698, 700-01 (11th Cir. 1988). The burden then “shifts to the alleged
contemnor to produce detailed evidence specifically explaining why he cannot
comply.” Id. at 701. To satisfy this burden, a contemnor cannot merely assert an
inability to comply, but must show that it has made “‘in good faith all reasonable
efforts to comply.’” Id. (quoting United States v. Rizzo, 539 F.2d 458, 465 (5th

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Cir. 1976)). An order of civil contempt may be issued to coerce the defendant into
compliance and compensate the complainant for losses suffered.
Mercer v. Mitchell, 908 F.2d 763, 768 n.8 (11th Cir. 1990)
(citing United States v. United Mine Workers, 330 U.S. 258, 303-04 (1947)).
Under the circumstances here, and before deciding whether contempt
sanctions will be imposed and, if so, upon whom, the Court concludes that a
hearing is required. At the hearing, the Receiver is required to present clear and
convincing evidence that Respondents violated the Appointment Order. If the
Receiver meets this burden, each of the Respondents shall show cause why they
should not be held in contempt and, if found in contempt, why a contempt sanction
should not be imposed.
III. CONCLUSION
For the reasons stated in this Order,
IT IS HEREBY ORDERED that Respondents Tarek M. Baydoun, Jeffrey
R. Hicks, The Meridian Law Group, Abdul K. Charara, and Waad Charara shall
appear at a hearing to be conducted on January 4, 2016, at 2:00 pm in Courtroom
1705, United States Courthouse, Richard Russell Building, 75 Ted Turner Drive,
Atlanta, Georgia. At the hearing, the Receiver shall present clear and convincing
evidence to show Respondents violated the Appointment Order. If the Receiver

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satisfies this burden, each Respondent shall show cause what they should not be
held in contempt of the Appointment Order and, if found in contempt, why a
contempt sanction should not be imposed.
IT IS FURTHER ORDERED that the Receiver’s Unopposed Motion to
File Redacted Documents [118] is GRANTED.

SO ORDERED this 2nd day of December, 2015.

_______________________________
WILLIAM S. DUFFEY, JR.
UNITED STATES DISTRICT JUDGE

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