Weston v. PT Bank Mutiara ( 2018 )

16-1178-cv; 17-668-cv(L)
Weston v. PT Bank Mutiara
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
Rulings by summary order do not have precedential effect. Citation to a summary order filed
on or after January 1, 2007, is permitted and is governed by Federal Rule of Appellate
Procedure 32.1 and this Court’s Local Rule 32.1.1. When citing a summary order in a
document filed with this Court, a party must cite either the Federal Appendix or an
electronic database (with the notation “summary order”). A party citing a summary order
must serve a copy of it on any party not represented by counsel.
At a stated term of the United States Court of Appeals for the Second Circuit, held at
the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York,
on the 25th day of June, two thousand eighteen.
PRESENT: JOSÉ A. CABRANES,
GERARD E. LYNCH,
SUSAN L. CARNEY,
Circuit Judges.
WESTON CAPITAL ADVISORS, INC.,
Petitioner-Appellant, 16-1178-cv; 17-668-cv (L),
17-1227-cv (con)
JOHN LIEGEY, WESTON INTERNATIONAL CAPITAL
MANAGEMENT (LUXEMBOURG) S.A., WESTON
INTERNATIONAL CAPITAL (MAURITIUS) LTD.,
WESTON INTERNATIONAL CAPITAL LTD., WESTON
CAPITAL SERVICES LTD., FIRST CAPITAL
MANAGEMENT LTD., FIRST GLOBAL FUNDS LTD.
PCC, WESTON INTERNATIONAL INVESTMENTS
LIMITED, ARLINGTON ASSETS INVESTMENTS LTD.,
WESTON INTERNATIONAL ASSET RECOVERY CO.
LTD., WESTON INTERNATIONAL ASSET RECOVERY
CORPORATION INC.,
Appellants,
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v.
PT BANK MUTIARA, TBK,
Respondent-Appellee.
FOR PETITIONER-APPELLANT
& APPELLANTS: CHARLES B. MANUEL, JR., Manuel &
Associates, New York, NY.
FOR RESPONDENT-APPELLEE: MARC L. GREENWALD (Daniel R.
Koffman, Andrew P. Marks, on the brief),
Quinn Emanuel Urquhart & Sullivan,
LLP, New York, NY.
Appeals from orders of the United States District Court for the Southern District of New
York (Paul A. Crotty, Judge).
UPON DUE CONSIDERATION WHEREOF, IT IS HEREBY ORDERED,
ADJUDGED, AND DECREED that the orders of the District Court be and hereby are
AFFIRMED.
Petitioner-Appellant Weston Capital Advisors, Inc., along with ten affiliated corporate
Appellants (“the Weston entities”) and its principal, Appellant John Liegey (collectively, “Weston”),
appeal from a series of orders of the District Court in which the Court awarded attorneys’ fees to
Respondent-Appellee PT Bank Mutiara, Tbk (“Bank Mutiara”), and acted to enforce a prior
contempt order so as to compel Weston to return an improperly collected money judgment. We
assume the parties’ familiarity with the underlying facts, the procedural history of the case, and the
issues on appeal.
BACKGROUND
Weston has resisted court orders to return $3.6 million to Bank Mutiara since Weston was
first held in contempt over four years ago. In that time, the District Court has taken various steps to
compel Weston to pay the money owed, including a September 8, 2015, order that imposed
escalating fines of $1,000 per day, to be doubled monthly, until the judgment was paid.1
On February 13, 2017, the District Court entered a new order scheduling the imposition of
additional sanctions in the event that Weston continued to refuse to repay the money owed (“the
Additional Sanctions Order”). Twenty-one days after the entry of the Additional Sanctions Order,
1 That order was affirmed on appeal as to Liegey and each of the Weston entities other than Weston Capital Advisors,
Inc. See Weston Capital Advisors, Inc. v. PT Bank Mutiara, Tbk, 667 F. App’x 15, 16 (2d Cir. 2016).
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the District Court entered an order divesting Weston of Mauritian judgments it held against Bank
Mutiara and vesting them in Bank Mutiara. Forty-two days after the entry of the Additional
Sanctions Order, the District Court entered an order divesting Weston of certain securities held by
Weston and vesting them in Bank Mutiara. Finally, the District Court entered another order sixty-
three days after the Additional Sanctions Order vesting in Bank Mutiara 100 percent of the equity
interests in the corporate Weston entities.2 The District Court made clear that Weston could moot
these sanctions at any time either by repaying Bank Mutiara or by showing with reasonable
plausibility that they were close to reaching an agreement that would allow for repayment. Weston
did not make any such representations to the District Court, and all of Weston’s assets subject to the
District Court’s orders have since been vested in Bank Mutiara. Bank Mutiara claims that these
assets are worth far less than what is owed. Appellee’s Br. (Nos. 17-668 & 17-1227) at 5. (“[T]he
market value of the assets revested in Bank Mutiara is effectively zero . . . .”).
Weston now argues that these “revesting” orders were an unlawful exercise of power by the
District Court. We disagree.3
DISCUSSION
Generally, appeals over civil contempt orders issued against parties are not final orders
within the meaning of 28 U.S.C. § 1291, and thus must await a final order before an appeal may be
taken. OSRecovery, Inc. v. One Groupe Int’l, Inc., 462 F.3d 87, 89–90 (2d Cir. 2006). However, “civil
contempts against non-parties are immediately appealable because the appeal does not interfere with
the orderly progress of the main case.” Id. at 92 (quoting Int’l Bus. Machs. Corp. v. United States, 493
F.2d 112, 115 n.1 (2d Cir. 1973)). Because the Weston entities and Liegey are non-parties, we have
jurisdiction to consider their appeals. Furthermore, because Weston Capital Advisors, Inc., the
2 The District Court identified two bases for these “revesting” orders. First, it held that the orders were authorized by
Rule 70 of the Federal Rules of Civil Procedure, which states that, where “a party fails to comply” with “a judgment
requir[ing] a party to convey land, to deliver a deed or other document, or to perform any other specific act,” the court
“may enter a judgment divesting any party’s title” to “the real or personal property [if it] is within the district.” Fed. R.
Civ. P. 70(a), (b). Second, it held that the Additional Sanctions Order was “appropriate pursuant to its general and
inherent equitable powers to coerce compliance with its lawful orders.” Weston Capital Advisors, Inc. v. PT Bank Mutiara,
Tbk, No. 13-cv-6945, 2017 WL 571511, at *3 (S.D.N.Y. Feb. 13, 2017) (internal quotation marks omitted). Weston
argues that Rule 70 is not a viable means of enforcing the prior orders in this case for a number of reasons, including
that the Additional Sanctions Order attempts to “revest” property that was not subject to the prior orders. But we need
not and do not reach that issue because we hold that the Additional Sanctions Order was permissible under the District
Court’s inherent power to enforce its own orders.
3 In the appeal docketed as No. 16-1178, Weston also challenges the District Court’s award of nearly $600,000 in
attorneys’ fees to Bank Mutiara. See Summary Order [Doc. 155], Weston Capital Advisors, Inc. v. PT Bank Mutiara, Tbk, No.
13-cv-6945 (S.D.N.Y. Mar. 16, 2016). That appeal was premised in substantial part on Weston’s introduction of “newly
discovered evidence” purporting to show wrongdoing on the part of Bank Mutiara and its counsel. Appellants’ Br. (No.
16-1178) at 2. After both another panel of this Court and the District Court denied Weston’s motion to supplement the
record with that evidence, yet another panel of this Court granted Bank Mutiara’s motion to strike most of Weston’s
appendix and brief. As Weston acknowledged in its reply brief, those actions “remove[d] the issue upon which the
appeal depended.” Reply Br. (No.16-1178-cv) at 1. Because Weston no longer offers any basis for challenging the
District Court’s award of attorneys’ fees, we AFFIRM that order.
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petitioner in the underlying action, has since voluntarily dismissed its case, it is no longer a party.4
We thus have jurisdiction over the appeals of each of the eleven Appellants, as well as the Petitioner-
Appellant Weston Capital Advisors, Inc.
The power to punish parties for contempt is inherent in all courts, and “[a] sanction
imposed to compel obedience to a lawful court order or to provide compensation to a complaining
party is civil” in nature. N.Y. State Nat'l Org. for Women v. Terry, 886 F.2d 1339, 1351 (2d Cir. 1989).
Orders of contempt are reviewed for abuse of discretion. OSRecovery, 462 F.3d at 93. However,
“because the power of a district court to impose contempt liability is carefully limited, our review of
a contempt order for abuse of discretion is more rigorous than would be the case in other situations
in which abuse-of-discretion review is conducted.” Id. (internal quotation marks omitted).
To justify a civil contempt order, “a movant must establish that (1) the order the contemnor
failed to comply with is clear and unambiguous, (2) the proof of noncompliance is clear and
convincing, and (3) the contemnor has not diligently attempted to comply in a reasonable manner.”
King v. Allied Vision, Ltd., 65 F.3d 1051, 1058 (2d Cir. 1995). There is no question that the District
Court’s prior orders clearly and unambiguously directed Weston to return the $3.6 million plus
interest to Bank Mutiara. There is no evidence that Weston has complied with those orders or made
reasonable attempts to do so.
A district court may use its civil contempt powers “to enforce compliance with an order of
the court or to compensate for losses or damages sustained by reason of noncompliance.” McComb v.
Jacksonville Paper Co., 336 U.S. 187, 191 (1949). Coercive sanctions must account for “(1) the
character and magnitude of the harm threatened by the continued contumacy; (2) the probable
effectiveness of any suggested sanction in bringing about compliance; and (3) the contemnor’s
financial resources and the consequent seriousness of the burden of the sanction upon him.” Dole
Fresh Fruit Co. v. United Banana Co., 821 F.2d 106, 110 (2d Cir. 1987). “Compensatory sanctions
should reimburse the injured party for its actual damages,” Terry, 886 F.2d at 1353, though there
need not be a one-to-one ratio between actual damages and the value of the assets subject to civil
contempt, see Paramedics Electromedicina Comercial, Ltda v. GE Med. Sys. Info. Techs., Inc., 369 F.3d 645,
658 (2d Cir. 2004) (“[W]here a fine is paid directly to the other party rather than the court, the
4 Weston Capital Advisors, Inc., filed a notice of voluntary dismissal pursuant to Rule 41(a)(1)(A)(i) of the Federal Rules
of Civil Procedure. See Notice of Voluntary Dismissal [Doc. 185], Weston Capital Advisors, Inc. v. PT Bank Mutiara, No. 13-
cv-6945 (S.D.N.Y. Jan. 31, 2017). Because the notice did not specify that the dismissal was with prejudice, it is deemed
to be without prejudice. See Fed. R. Civ. P. 41(a)(1)(B). Though a voluntary dismissal without prejudice generally does
not render appealable adverse decisions on other issues in the case, see Rabbi Jacob Joseph Sch. v. Province of Mendoza, 425
F.3d 207, 210 (2d Cir. 2005), a party may nevertheless appeal civil contempt orders that remain payable despite the
dismissal and that do not affect and are not affected by resolution of the dismissed merits issues, see N.Y. Tel. Co. v.
Commc’ns Workers of Am., AFL-CIO, 445 F.2d 39, 45 (2d Cir. 1971). Accordingly, we have appellate jurisdiction over the
appeals by all the Weston parties.
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sanction should correspond at least to some degree with the amount of damages.” (internal
quotation marks omitted)).
The District Court determined that the Additional Sanctions Order was necessary “to coerce
compliance” and “to compensate Bank Mutiara.” Weston Capital, 2017 WL 571511, at *3. Weston
argues that the sanctions were excessive because the Mauritian judgments, securities, and equity
subject to the Additional Sanctions Order have “a value between $500 million and $2.2 billion,” or
perhaps “as much as $10 billion.” Appellants’ Br. (Nos. 17-668 & 17-1227) at 1, 32. But those
assertions are contradicted by Weston’s apparent inability over the course of five years to sell any of
its assets or use them as security to obtain a loan to repay the $3.6 million to Bank Mutiara. Nor has
Weston offered any evidence supporting its likely inflated estimates of the value of the property
subject to the Additional Sanctions Order.
We therefore hold that the District Court did not abuse its discretion when it exercised its
inherent powers to enforce its own orders and issued the Additional Sanctions Order and the
subsequent orders divesting Weston of the Mauritian judgments, security instruments, and equity
and vesting that property in Bank Mutiara.
CONCLUSION
We have reviewed Weston’s remaining arguments and find them to be without merit. For
the foregoing reasons, we AFFIRM the orders of the District Court.
FOR THE COURT:
Catherine O’Hagan Wolfe, Clerk
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