Court Opinion

ID: 9408819
Source: CourtListenerOpinion
Date Created: 2023-07-13 20:01:20.228069+00
Date Added: 2024-06-11T17:20:47.363508
License: Public Domain

USCA11 Case: 21-13059    Document: 80-1     Date Filed: 07/13/2023   Page: 1 of 9

                                                  [DO NOT PUBLISH]
                                   In the
                United States Court of Appeals
                        For the Eleventh Circuit

                          ____________________

                                No. 21-13059
                          ____________________

       INVERSIONES Y PROCESADORA TROPICAL INPROTSA, S.A.,
       a Costa Rican Corporation,
                                                      Plaintiﬀ-Appellee,
       versus
       DEL MONTE INTERNATIONAL GMBH,
       a Swiss Corporation,

                                                  Defendant-Appellant.

                          ____________________

                 Appeal from the United States District Court
                     for the Southern District of Florida
                    D.C. Docket No. 1:16-cv-24275-FAM
                          ____________________
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       2                      Opinion of the Court                 21-13059

       Before WILSON, NEWSOM, and LAGOA, Circuit Judges.
       PER CURIAM:
               This appeal requires us to determine whether Del Monte is
       entitled, as a contempt sanction, to disgorgement of money that
       INPROTSA made selling pineapples to third parties in violation of
       a district court’s order expressly enjoining it from doing so. The
       district court rejected Del Monte’s disgorgement request. For the
       reasons that follow, we hold that the district court did not abuse its
       discretion in doing so.
                                         I
                                         A
              Del Monte played a major role in developing the so-called
       “MD-2” pineapple in Hawaii back in the 1980s, and today the MD-
       2 is the most popular variety of pineapple in the world. In 2001,
       Del Monte and INPROTSA entered into a unique contract. Pursu-
       ant to the agreement, Del Monte gave INPROTSA (for free) ap-
       proximately 61 million MD-2 seeds to plant, produce, and package
       on a Costa Rican pineapple plantation. In return, INPROTSA
       agreed to sell the pineapples exclusively to Del Monte and to de-
       stroy or return any leftovers upon the contract’s expiration or ter-
       mination.
             Over the course of the 12-year agreement, Del Monte pur-
       chased more than $200 million in pineapples from INPROTSA.
       When the agreement expired in 2013, though, INPROTSA didn’t
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       21-13059              Opinion of the Court                        3

       comply with its obligation to destroy or return the pineapples to
       Del Monte. Instead, it sold the pineapples to a third party.
                                        B
               Del Monte initiated arbitration proceedings against
       INPROTSA in Miami, alleging that INPROTSA breached the
       agreement and seeking specific performance, injunctive relief, and
       damages. On June 10, 2016 the arbitral tribunal issued a final award
       in Del Monte’s favor, concluding that INPROTSA had breached
       the agreement by selling to a third party, rather than returning or
       destroying the MD-2 pineapples derived from Del Monte’s seeds.
       The tribunal ordered INPROTSA to return or destroy all MD-2
       pineapples derived from Del Monte’s seeds and enjoined it from
       selling the pineapples to third parties until it complied with that
       mandate. The tribunal further concluded that Del Monte was en-
       titled to damages in the amount of $26.133 million to compensate
       it for INPROTSA’s breach, along with arbitral costs, attorneys’
       fees, and pre- and post-judgment interest. The district court con-
       firmed the arbitral award on May 2, 2017 and entered final judg-
       ment on May 17, 2017.
              As it turns out, though, INPROTSA didn’t return or destroy
       the pineapples, but rather continued to sell them to third parties.
       According to Del Monte, “INPROTSA received $23,358,785 in rev-
       enues from improper sales of pineapples” from June 2016 to May
       2017 (the date of the Final Award to the date of the Award Confir-
       mation).” And so Del Monte initiated contempt proceedings
       against INPROTSA and its non-party executive officers Jorge and
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       4                      Opinion of the Court                21-13059

       Manuel Gurria, claiming that INPROTSA had failed to comply
       with the order to return or destroy the pineapples and the injunc-
       tion prohibiting it from selling them to third parties. The district
       court referred the contempt motion to a magistrate judge, but be-
       fore the magistrate could issue an R&R, INPROTSA sold even more
       pineapples to third parties. This time, according to Del Monte,
       INPROTSA received “$16,373,684 in revenues from improper sales
       of pineapples” from “May 2017 through September 2018 (when
       93% of the MD-2 vegetative stock was destroyed).”
              The magistrate judge subsequently issued two separate
       R&Rs recommending (1) that the district court order INPROTSA
       and its officers to show cause as to why they should not be held in
       contempt for failing to comply with the order but (2) that the court
       deny Del Monte’s request for disgorgement of INPROTSA’s gross
       revenues from the sales of the contested pineapples on the ground
       that Del Monte sought the award as a punishment, rather than to
       compensate it for injury.
               The district court adopted the magistrate judge’s R&Rs and
       issued an order to show cause as to why INPROTSA and its officers
       should not be held in contempt. The district court ultimately
       found INPROTSA in contempt but said nothing about its officers.
       It did, however, determine that the magistrate judge was correct
       to conclude that disgorgement was improper. Contempt awards,
       the district court explained, may be used only (1) to coerce compli-
       ance with a court order or (2) to compensate a party for losses it
       sustained. There is no dispute that the first of these two reasons is
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       21-13059               Opinion of the Court                          5

       inapplicable here given that the pineapples have now been de-
       stroyed. And as to the second rationale, the district court agreed
       with the magistrate judge that “Del Monte did not pay monies to
       INPROTSA which should now be returned.” The district court
       did, though, award Del Monte attorneys’ fees.
              Del Monte noticed an appeal of the district court’s orders
       adopting the magistrate’s R&Rs. We issued a jurisdictional ques-
       tion regarding whether the district court’s order—which found
       INPROTSA in contempt but didn’t address the Gurrias—was final
       and appealable.
              In the meantime, Del Monte filed its opening brief, arguing
       that the district court improperly denied disgorgement, that the
       Gurrias—who the district court acknowledged were responsible
       for the injunction violations—should be held liable, and that its fail-
       ure to expressly hold them in contempt was error.
               After receiving Del Monte’s initial brief and both parties’ re-
       sponses to the jurisdictional question, we issued a limited remand
       to the district court for clarification whether it had fully resolved
       all of the issues raised below. The district court held a hearing to
       address whether it had jurisdiction to hold the Gurrias in contempt
       given that they are non-parties. Following the hearing, the district
       court issued an order clarifying that the Gurrias “are also held in
       contempt as the corporate representatives for INPROTSA.”
       INPROTSA immediately appealed that order.
              We then issued an order allowing the appeal to proceed be-
       cause the district court’s limited remand order demonstrated that
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       6                        Opinion of the Court                     21-13059

       there is a final order as to the contempt issue and, therefore, that
       appellate jurisdiction is proper in this case. Because Del Monte had
       already filed its initial brief, we treated INPROTSA’s appeal as a
       cross appeal. 1
              In its response brief / initial cross-appeal brief, INPROTSA
       contends that the district court’s order denying disgorgement
       should be affirmed because Del Monte failed to show that it suf-
       fered any actual loss and, therefore, that such an award would be
       punitive.
              In its reply brief / response cross-appeal brief, Del Monte re-
       iterates its argument that disgorgement is the proper remedy here.
              In sum, then, we must decide whether the district court
       erred in denying Del Monte’s request for disgorgement.
                                            II
             “The district court’s judgment of civil contempt will be af-
       firmed unless we find that the court abused its discretion.” Howard
       Johnson Co. v. Khimani, 892 F.2d 1512, 1516 (11th Cir. 1990).

       1We can quickly dispose of INPROTSA’s cross-appeal of the district court’s
       order holding the Gurrias in contempt. The Notice of Appeal was filed by
       INPROTSA, was signed by the attorneys representing INPROTSA, and ex-
       pressly states that INPROTSA is challenging the district court’s contempt or-
       der. It makes no mention of the Gurrias. In the unique circumstances of this
       particular case, we think that is reason enough not to consider it.
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       21-13059                   Opinion of the Court                                7

                                             III
               “Judicial sanctions in civil contempt proceedings may, in a
       proper case, be employed for either or both of two purposes; [1] to
       coerce the defendant into compliance with the court’s order, and
       [2] to compensate the complainant for losses sustained.” United
       States v. United Mine Workers, 330 U.S. 258, 303–04 (1947). Signifi-
       cantly, “[s]uch fine must of course be based upon evidence of com-
       plainant’s actual loss . . . .” Id. at 304 (emphasis added). Given that
       the pineapples have now been destroyed, there is no dispute that
       the first purpose is inapplicable here. That leaves the second one—
       to compensate for actual losses.
              But in the peculiar circumstances of this case, Del Monte
       hasn’t produced sufficient evidence of any actual losses. 2 Unfair as
       the outcome may seem—given that INPROTSA indisputably
       breached its agreement with Del Monte and unquestionably vio-
       lated the district court’s injunction—Del Monte failed to prove that
       it incurred any out-of-pocket loss. And although Del Monte relies
       on F.T.C. v. Leshin, 618 F.3d 1221 (11th Cir. 2010), for its assertion
       that disgorgement is proper here, that case actually underscores

       2 That is true under either the clear-and-convincing-evidence standard that
       both the magistrate judge and district court applied, see Doc. 287 at 13; Doc.
       304 at 14, or a preponderance standard, see, e.g., McGregor v. Chierico, 206 F.3d
       1378, 1387 (11th Cir. 2000) (recognizing that in civil contempt actions liability
       must be shown by clear and convincing evidence, but associated damages
       need only be proven by a preponderance of the evidence). Because the stand-
       ard-of-proof issue makes no difference to the resolution of this appeal, we
       won’t pursue the matter further.
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       8                     Opinion of the Court                21-13059

       our reasoning. In Leshin, the contemnors were ordered to disgorge
       and return funds to consumers that had been fraudulently taken
       from them. Id. at 1237. Here, Del Monte didn’t pay money to
       INPROTSA that it is now entitled to get “back,” so disgorgement
       is not the proper remedy.
              This, we emphasize, is a unique case arising out of a unique
       contract. Pursuant to the parties’ agreement, after its expiration,
       INPROTSA was to either destroy or return the pineapples to Del
       Monte, but was not to sell them to third parties. So during the time
       that Del Monte claims to have suffered damages—namely, after
       the contract had expired—it wasn’t actually entitled to anything. If
       INPROTSA hadn’t violated the agreement, Del Monte wouldn’t
       have been in a better situation financially. So ordering INPROTSA
       to disgorge the revenues from the pineapple sales would put Del
       Monte in a better position than if INPROTSA had complied with
       the agreement. In other words, ordering disgorgement under
       these unique circumstances would simply serve to punish
       INPROTSA, which would violate the Supreme Court’s instruction
       that “a wrongdoer should not be punished by paying more than a
       fair compensation to the person wronged.” Liu v. S.E.C., 140 S. Ct.
       1936, 1943 (2020) (quotation marks omitted and alteration ac-
       cepted).
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       21-13059                  Opinion of the Court                      9

              Accordingly, we hold that the district court did not abuse its
       discretion in refusing Del Monte’s request for disgorgement as a
       contempt sanction.3
                AFFIRMED.

       3   INPROTSA’s Motion for Limited Remand is denied.