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C/F International, Inc. v. Classic World Productions

February 16, 2006


The opinion of the court was delivered by: Martini, District Judge



Plaintiff C/F International, Inc. ("C/F") brings this post-judgment motion for contempt against Defendant Darryl Payne for violating the Court's order to produce documents, falsely certifying before the Court that all responsive documents had been produced, and violating the Court's permanent injunction prohibiting sales of certain CDs. For the reasons stated below, C/F's motion is GRANTED.


As the facts and procedural history have been set forth in the Court's July 28, 2004 opinion granting partial summary judgment for C/F, a brief recitation will suffice for the purposes of this Opinion. C/F brought suit against Defendants Classic World Productions, Inc. ("Classic World"), IMG International Inc. ("IMG"), and Darryl Payne*fn1 for failure to pay royalties for the use and exploitation of the Tom Jones musical variety shows (the "Shows"), to which Plaintiff owns the exclusive distribution rights. During discovery, C/F requested from Defendants copies of any licensing or other agreements between Defendants and third-parties involving the Shows. When Defendants failed to produce the full scope of documents requested, in or around March 2003, Magistrate Judge Hedges ordered production of the documents. When Defendants still failed to comply, C/F moved to compel production. In response, Defendants produced some additional documents, and during the motion hearing, Payne submitted a signed certification to the Court, stating he had turned over all responsive documents.

On July 28, 2004, the Court granted summary judgment in favor of Plaintiff as to the liability of Defendants and issued a permanent injunction against any future sales of the Shows at issue in the case. On December 29, 2004, the Court entered judgment in favor of Plaintiff, finding Classic World and Payne jointly and severally liable for $1,030,446; IMG and Darryl Payne jointly and severally liable for $30,000; and IMG, Classic World and Darryl Payne jointly and severally liable for $2,775. On July 30, 2005, Classic World filed a Petition in Bankruptcy under Chapter 11 in the Northern District of Illinois.*fn2 On January 27, 2005, Defendants filed a notice of appeal with the Third Circuit.*fn3

Acting pursuant to the judgment, C/F levied upon Classic World's personal property at Classic World's offices in Aurora, Illinois. Among Classic World's business records, C/F alleges it found numerous documents responsive to its prior document request that Defendants had not turned over during discovery. Specifically, C/F claims to have found ten licensing agreements worth $398,313.52 in royalties. C/F further claims to have found thirty-two contracts for sales of Tom Jones CDs that post-dated the Court's injunction. C/F now asks that Payne be held in contempt of court and further requests damages for the abovementioned amounts as well as attorney's fees and other punitive sanctions.

On December 20, 2005, the Court held a hearing on an order to show cause why Payne should not be held in contempt. Payne failed to appear. Nevertheless, the Court gave Payne a final opportunity to submit additional affidavits or exhibits in opposition to C/F's motion. In response, Payne sent the Court a letter stating he intended to waive his opportunity to testify before the Court. (December 21, 2005 Payne Letter.) He further stated his intention to rest his opposition solely on his previously-filed affidavit. Id.


Judicial sanctions in civil contempt proceedings may, in a proper case, be employed for either or both of two purposes: to coerce the defendant into compliance with the court's order, and to compensate the complainant for losses sustained. U.S. v. United Mine Workers of America, 330 U.S. 258, 304-05 (1947). Where compensation is intended, a fine is imposed, payable to the complainant. Id. at 305.

Violation of a court order constitutes contempt where: 1) a valid court order exists; 2) the defendant had knowledge of the order; and 3) the defendant disobeyed the order. Harris v. City of Philadelphia, 47 F.3d 1311, 1326 (3d Cir. 1995). Perjury consists of four elements: (1) a false statement; (2) given under oath; (3) made knowingly and willfully; (4) that concerns a material matter. See 18 U.S.C.A. § 1621. Perjury constitutes contempt if the perjury also obstructs the court in the performance of its duties. In re Michael, 326 U.S. 224, 228 (1945). Civil contempt must be proven by clear and convincing evidence. U.S. v. Pozgai, 999 F.2d 719, 735 (3d Cir. 1993).


In support of its motion, C/F has submitted copies of ten licensing agreements it alleges it found among Classic World's property. Payne does not deny he failed to turn over the documents. His central defense is that he diligently searched for them but could not find them due to misfiling.*fn4 Other than his own self-serving affidavit, Payne has failed to put forth any support for his claim, either from his assistant, who Payne claims conducted the search, or from someone else who might have familiarity with the search effort. In contrast, C/F has submitted, along with copies of the agreements, the certification of a paralegal working for C/F. In her certification, the paralegal states that, at least with respect to six of the agreements, she found the agreements in Classic World's file cabinets; the agreements were in clearly labeled three-ring binders; and she found each agreement within one minute of looking through the relevant binder. (Aug. 2, 2005 Earle Certification ¶ 3; Sept. 30, 2005 Earle Certification ¶ 4.)

Even if the Court were inclined to believe Payne, Payne's defense amounts to little, since willfulness is not a necessary element of civil contempt. Harley-Davidson, Inc. v. Morris, 19 F.3d 142, 148 (3d Cir. 1994). Because damages assessed in civil contempt cases are compensatory, the mental state of the alleged violator does not impact a finding of liability. Robin Woods Inc. v. Woods, 28 F.3d 396, 400 (3d Cir. 1994). Based on the record before it, the Court concludes that Payne either did not conduct a reasonable search in spite of the Court order or deliberately withheld the files. In either case, Payne is liable for violating the Court discovery order, and C/F is entitled to compensation for damages it suffered as a result.*fn5

To this end, C/F has submitted copies of the following ten agreements:

(1) March 1, 2000, between Classic World, Inc. and 32 Records, LLC. for a licensing fee of $30,000

(2) March 1, 2000, between BMG Entertainment International UK & Ireland Limited and IMG International for an advance of $185,000

(3) December 1, 1999, between BMG Entertainment International UK & Ireland Limited and IMG International for an advance of $100,000

(4) January 7, 1999, between Classic World Productions, Inc. and L.D.L. Corporation, ...

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