SATURN WIRELESS CONSULTING, LLC. v. AVERSA

Filing 213

OPINION. Signed by Judge Kevin McNulty on 9/30/2022. (ld, )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
SATURN WIRELESS CONSULTING,
LLC,
Plaintiff,
v.

Civ. No. 17-01637 (KM) (JBC)
OPINION

FRANK AVERSA,
Defendant.
KEVIN MCNULTY, U.S.D.J.:
This matter comes before the Court on the motion (DE 197)1 of Saturn
Wireless Consulting, LLC (“Saturn”) for an award of attorney’s fees, costs, and
other sanctions against Frank Aversa. Saturn is seeking (1) an award of
attorney’s fees and costs in the amount of $240,170.34; (2) an award of
disgorgement in the amount of $146,860.99 (or, in the alternative
$124,831.84); and (3) an order requiring Aversa to produce certain additional
documents. For the reasons set forth below, Saturn’s request for the
production of certain additional documents is GRANTED. Because I agree that
further discovery is needed, and because the preliminary injunction issues are
intertwined with the merits, as to the amount of attorney’s fees, costs, and
other sanctions, I will defer decision until the final disposition of this case.

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Certain citations to the record are abbreviated as follows:
DE = docket entry

Mot. = Saturn’s Brief in Support of Motion for Attorney’s Fees, Costs, and Other
Sanctions (DE 197-2)
Op. Br. = Aversa’s Brief in Opposition to Saturn’s Motion for Attorney’s Fees,
Costs, and Other Sanctions (DE 210)
Reply Br. = Saturn’s Brief in Further Support of Its Motion for Attorney’s Fees,
Costs, and Other Sanctions (DE 208)

I.

BACKGROUND
Aversa is a former employee of Saturn. After the conclusion of Aversa’s

employment, Saturn sued Aversa, alleging that he violated a non-compete
agreement. I granted a preliminary injunction prohibiting certain actions by
Aversa. (DE 33.) Then, Saturn learned of actions by Aversa which, it
contended, violated the injunction. I found Aversa in contempt of the
preliminary injunction and ordered Aversa to produce documents relevant to
the lost profits caused by his violation of the injunction, as well as documents
sufficient to establish the annual net profits of his business for the period
November 15, 2016, to the present. (DE 186.) I also permitted Saturn to make
a submission proposing an appropriate dollar amount of sanctions, including,
if appropriate, an award of disgorgement and documenting attorney’s fees and
costs associated with the contempt proceedings. (Id.) Thereafter, Saturn filed
its motion for an award of attorney’s fees, costs, and other sanctions. (DE 197.)
Aversa opposed the motion (DE 210), to which Saturn replied (DE 208.)
II.

DISCUSSION
Saturn asks the court to grant it an award of attorney’s fees in the

amount of $220,021.75 and costs in the amount of $20,148.59 in relation to
the contempt application. (Mot. pp. 4, 11.) Additionally, Saturn asks the court
to grant it an award for disgorgement in the amount of $146,860.99,
representing the revenue earned by Aversa from transactions that violated the
preliminary injunction. (Mot. p. 13.) Alternatively, if the court decides to award
Saturn disgorgement of profits instead of revenue, Saturn requests that the
court award $124,831.84. (Reply Br. 10.) In response, Aversa asks the court to
stay its decision on attorney’s fees, costs, and other sanctions until after final
disposition of this matter. (Op. Br. p. 3.) Should the court decide not to stay
Saturn’s motion, Aversa asks the court to award a reduced amount for
disgorgement and attorney’s fees and costs (Op. Br. 23.)
Having considered the parties’ arguments, I find that a determination of
the amount of attorney’s fees, costs, and other sanctions should be deferred
until after final disposition of this matter. See AMG Nat. Tr. Bank v. Ries, 319 F.
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App’x 90, 93 (3d Cir. 2008) (deferring the award of lost revenues resulting from
contempt until after a final determination of the merits); McKenna v. City of
Philadelphia, 649 F.3d 171, 173 n.1 (3d Cir. 2011) (finding the argument that
the district court erred in deferring a determination on the award of attorney’s
fees and costs was without merit). Contempt sanctions in the form of lost
revenues can be “speculative” and “intertwined with the merits” of the action;
therefore, it may be best to address such sanctions after a final determination
on the merits. See AMG Nat. Tr. Bank, 319 F. App’x at 93.
Indeed, Saturn itself acknowledges that its calculation of disgorgement is
based on an incomplete record and reserves its right to amend the amount
requested following the production of additional documents (which this court is
granting) or at trial after expert discovery is completed. (Mot. pp. 13–14.) Since
the attorney’s fees and costs sought also arise from the contempt application, I
find that it is best to address the awards for disgorgement and attorney’s fees
and costs at the same time. This is particularly applicable here, where Aversa
asks the court to reduce the amount of attorney’s fees and costs in proportion
to the amount of disgorgement awarded. (Op. Br. 14.) Therefore, I exercise my
discretion to defer judgment on Saturn’s motion until after final disposition of
this case, at which time Saturn may renew its motion and the parties may file
supplemental briefing.
Additionally, Saturn seeks an order requiring Aversa to produce the
following documents from November 15, 2017 to present:
•

Specific transactions placed through the prohibited AT&T sales
representatives and/or placed for the prohibited end users specifically
listed by the court in the preliminary injunction order (DE 33);

•

Official payroll records for income paid to Frank Aversa by Connected
Communications Group, LLC (“CCG”) or DFA Capital Holdings, LLC
(“DFA”);

•

Official payroll records for income paid to Shawna Aversa by CCG or
DFA;

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•

Any and all compensation, income, commissions, or other renumeration
paid to any contractor or employee by CCG in the form of official payroll
records; and

•

Any and all compensation, income, commissions, or other renumeration
paid to any contractor or employee by DFA in the form of official payroll
records.

(Reply Br. pp. 14–15.)
Federal Rule of Civil Procedure 26 governs the scope of discovery in
federal litigation and provides that:
Parties may obtain discovery regarding any nonprivileged matter
that is relevant to any party's claim or defense and proportional to
the needs of the case, considering the importance of the issues at
stake in the action, the amount in controversy, the parties’ relative
access to relevant information, the parties’ resources, the
importance of the discovery in resolving the issues, and whether
the burden or expense of the proposed discovery outweighs its
likely benefit. Information within this scope of discovery need not
be admissible in evidence to be discoverable.
Fed. R. Civ. P. 26(b)(1).
Saturn requests the above documents so that it may fully explore the
extent of Aversa’s “ill-gotten gains” resulting from his violation of the
preliminary injunction. (Mot. p. 12.) Saturn also requests this information so
that it may confirm Aversa’s claimed profit margin of about 16% and determine
whether he is able to pay additional damages awarded at trial. (Reply Br. 15.) I
find that the documents sought are relevant to the action and proportional to
the needs of the case. Therefore, I will grant Saturn’s request and order Aversa
to produce the documents listed above.

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III.

CONCLUSION
For the reasons set forth above, Saturn’s motion for attorney’s fees,

costs, and sanctions is stayed pending the final disposition of this matter.
Saturn’s request for the production of certain documents is granted. A separate
order will issue.
Dated: September 30, 2022
/s/ Kevin McNulty
___________________________________
Hon. Kevin McNulty
United States District Judge

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