Court Opinion

ID: 6496268
Source: CourtListenerOpinion
Date Created: 2022-06-29 16:00:30.497998+00
Date Added: 2024-06-11T08:48:49.091953
License: Public Domain

Appellate Case: 21-4141             Document: 010110703166   Date Filed: 06/29/2022   Page: 1
                                                                                     FILED
                                                                         United States Court of Appeals
                           UNITED STATES COURT OF APPEALS                        Tenth Circuit

                                  FOR THE TENTH CIRCUIT                          June 29, 2022
                              _________________________________
                                                                             Christopher M. Wolpert
                                                                                 Clerk of Court
  FEDERAL TRADE COMMISSION;
  UTAH DIVISION OF CONSUMER
  PROTECTION,

          Plaintiffs,

   v.                                                              No. 21-4141
                                                      (D.C. No. 2:19-CV-00713-DAK-DAO)
  ZURIXX; CARLSON DEVELOPMENT                                       (D. Utah)
  GROUP UTAH; CJ SEMINAR
  HOLDINGS; ZURIXX FINANCIAL
  UTAH; CHRISTOPHER A. CANNON;
  JAMES M. CARLSON; JEFFREY D.
  SPANGLER; BRAND MANAGEMENT
  HOLDINGS; CAC INVESTMENT
  VENTURES; CARLSON
  DEVELOPMENT GROUP PUERTO
  RICO; DORADO MARKETING AND
  MANAGEMENT; JSS INVESTMENT
  VENTURES; JSS TRUST; ZURIXX
  FINANCIAL PUERTO RICO; GERALD
  D. SPANGLER,

          Defendants.

   ------------------------------

  DAVID K. BROADBENT,

          Receiver - Appellee,

   v.

  DAVID EFRON; EFRON DORADO SE,

          Interested Parties - Appellants.
Appellate Case: 21-4141     Document: 010110703166         Date Filed: 06/29/2022      Page: 2

                          _________________________________

                              ORDER AND JUDGMENT*
                          _________________________________

 Before TYMKOVICH, Chief Judge, MORITZ and EID, Circuit Judges.
                  _________________________________

        David Efron and Efron Dorado, SE (collectively, Efron), appeal for the second

 time from a civil contempt order entered against them by the district court. For reasons

 we recently explained in Efron’s previous appeal, see FTC v. Zurixx (Zurixx I), 26 F.4th

 1172, 1177-78 (10th Cir. 2022), we dismiss this appeal for lack of jurisdiction because

 the challenged contempt order is not a final decision.

                                              I

        This appeal stems from a consumer protection suit initiated in the district court by

 the Federal Trade Commission and the Utah Division of Consumer Protection against

 Zurixx, LLC and related entities. During those proceedings, the district court entered a

 preliminary injunction freezing Zurixx’s assets wherever located and directing that any

 person or business in possession of such assets preserve them for a court-appointed

 receiver. The injunction directed the receiver to “[t]ake exclusive custody, control, and

 possession of all [a]ssets and [d]ocuments of, or in the possession, custody, or under

        *
         After examining the briefs and appellate record, this panel has determined
 unanimously that oral argument would not materially assist in the determination of
 this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is therefore
 ordered submitted without oral argument. This order and judgment is not binding
 precedent, except under the doctrines of law of the case, res judicata, and collateral
 estoppel. It may be cited, however, for its persuasive value consistent with
 Fed. R. App. P. 32.1 and 10th Cir. R. 32.1.
                                              2
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 control of, any [Zurixx] Entity, wherever situated.” Aplee. App., vol. 1 at 188; see also

 28 U.S.C. § 754 (“A receiver appointed in any civil action or proceeding involving

 property, real, personal or mixed, situated in different districts shall . . . be vested with

 complete jurisdiction and control of all such property with the right to take possession

 thereof.”). Absent leave of court, the injunction prohibited “[p]ersons seeking to

 establish or enforce any claim, right, or interest against . . . [Zurixx] . . . from taking

 action that would interfere with the exclusive jurisdiction of [the] Court over the [a]ssets

 or [d]ocuments of [the Zurixx] Entities, including” by “[c]ommencing . . . a judicial . . .

 action or proceeding against the [Zurixx] Entities” or engaging in “acts of self-help.”

 Aplee. App., vol. 1 at 195-96.

        The receiver filed a copy of the consumer-protection complaint and the injunction

 in federal court in Puerto Rico, where Zurixx leased office space from Efron. The office

 contained Zurixx’s computers, furniture, and other assets. The receiver notified Efron of

 the receivership and gave him actual notice of the injunction. Efron initially permitted

 the receiver to recover some assets, but he later denied the receiver access to the office

 and instituted eviction proceedings in a Puerto Rico court.

        Given these events, the receiver moved the district court in Utah to hold Efron in

 contempt for violating the injunction. The district court granted the motion and found

 Efron in contempt, but it gave him an opportunity to purge the contempt, either by

 allowing the receiver to recover the assets or by compensating the receiver for the value

 of the assets. Efron appealed, and in Zurixx I, we dismissed for lack of jurisdiction,

 explaining that a nonparty contemnor like Efron may take an immediate appeal from a

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 final decision holding him in contempt, but to qualify as a final decision under 28 U.S.C.

 § 1291, the district court must both make a finding of contempt and impose a specific,

 unavoidable sanction. 26 F.4th at 1177-78. Because the district court imposed no

 sanction and allowed Efron to purge the contempt, we dismissed for lack of a final

 decision. See id. at 1178.

        Meanwhile, Efron continued to deny the receiver access to the assets.

 Consequently, the receiver moved for a second order of contempt, arguing that Efron

 continued to defy the injunction and obstruct his efforts to recover the assets. Efron

 responded that the assets had since been turned over to the receiver, who acknowledged

 as much but pointed out that he recovered the assets only after incurring considerable

 delay and expense. The receiver also argued that Efron repeatedly violated the

 injunction, not only by wrongfully retaining the assets and filing the eviction proceeding,

 but also by filing an intervenor complaint in the federal court in Puerto Rico.

        The district court agreed with the receiver and issued a second contempt order,

 stating:

                The court finds Efron and Efron Dorado in contempt of court for
        their continued defiance of the Preliminary Injunction and this court’s prior
        Contempt Order. The court awards the Receiver reasonable attorney’s fees
        and costs incurred in this contempt litigation and the unnecessary cases in
        Puerto Rico, including the Receiver’s fees. The Receiver may file
        documents demonstrating those fees and costs within thirty days of the date
        of this Order.

 Aplt. App., vol. 1 at 202. Before the receiver filed a statement of fees and costs,

 Efron filed his notice of appeal, designating the second contempt order. Additional

 proceedings ensued, although they are not the subject of this appeal. Indeed, the

                                              4
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 receiver subsequently filed a statement of fees and costs, which a magistrate judge

 granted. The district court eventually entered judgment on the fee award, and Efron

 filed yet another notice of appeal, which was docketed as Appeal No. 22-4042. Efron

 also contemporaneously filed in this court a motion to stay execution of the judgment

 on the fee award pending the outcome of this appeal. That stay motion is pending

 before us.

                                              II

        Under 28 U.S.C. § 1291, our jurisdiction generally extends only to “final

 decisions” of the district court. See Amazon, Inc. v. Dirt Camp, Inc., 273 F.3d 1271,

 1275 (10th Cir. 2001).1 In Zurixx I, we recognized that nonparties need not await entry

 of final judgment in the underlying action to appeal a civil contempt order, but we

 explained that the contempt order must still qualify as a final decision. See 26 F.4th at

 1177. To constitute a final decision, a contempt order must include both (1) a finding of

 contempt and (2) a specific, unavoidable sanction. Id. at 1177-78. “Without imposition

 of a specific, unavoidable sanction, [a] contempt order [is] not a final, appealable

 decision under § 1291, and we lack jurisdiction to consider it.” Id. at 1178.

        Efron, as a nonparty, was entitled to take an immediate appeal from the second

 contempt order. But that order was not a final decision. The second contempt order

 found Efron in contempt and it awarded the receiver reasonable attorney’s fees and costs

        1
         Efron summarily reasserts a number of alternative jurisdictional theories that
 we rejected in Zurixx I. See 26 F.4th at 1176-77. We decline to repeat that analysis
 here.
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Appellate Case: 21-4141      Document: 010110703166           Date Filed: 06/29/2022       Page: 6

 incurred in the contempt proceedings and the two Puerto Rico cases. Yet the contempt

 order did not indicate what the specific sanction would be. Rather, the district court

 merely directed the receiver to file a statement of fees and costs within thirty days, after

 which it would be required to issue another order to specify the amount of the sanction.

 Efron nevertheless filed his notice of appeal, even though several more procedural steps

 remained before the district court imposed a specific sanction. Thus, because the second

 contempt order did not impose a specific, unavoidable sanction, it was not a final

 decision. See id.; see also 15B Charles Alan Wright et al., Federal Practice & Procedure

 § 3917 (2d ed. June 2022 Update) (“A determination that contempt has occurred is not

 final if the question of sanctions is postponed. . . . Finality . . . requires determination of

 both liability and sanction . . . .”); accord Am. Soda, LLP v. U.S. Filter Wastewater Grp.,

 Inc., 428 F.3d 921, 924 (10th Cir. 2005) (“An award of attorneys’ fees is not final and

 appealable within the meaning of 28 U.S.C. § 1291 until it is reduced to a sum certain.”).

 Accordingly, we dismiss this appeal for lack of jurisdiction. And given the dismissal, we

 deny Efron’s stay motion without prejudice to him refiling it in Appeal No. 22-4042.

                                                III

        This appeal is dismissed. Efron’s motion for stay is denied without prejudice to

 him refiling it in Appeal No. 22-4042.

                                                            Entered for the Court

                                                            Allison H. Eid
                                                            Circuit Judge

                                                6