Ángel Edgardo RODRÍGUEZ-MIRANDA, Plaintiff, Appellee, v. Malik BENIN; Coquico, Inc.; 18 Degrees North, LLC; Acquanetta M. Benin, Defendants, Appellants.
Nos. 14-1334, 14-1518
United States Court of Appeals, First Circuit.
July 13, 2016
Ortiz-Islas says that his sentence is unreasonable, both procedurally because of the district court‘s failure to explain the disparities adequately, and substantively because of the disparities themselves. As for procedure, the district court supplied sufficient reasons. In sentencing each conspirator, including Ortiz-Islas, the court expressly considered the need to avoid unwarranted disparity and discussed the conspirators’ differing roles, actions, and histories, as well as the facts that some of them pleaded, cooperated, and testified. With respect to roles in the conspiracy, for example, the court explained that Ortiz-Islas was perhaps most similarly situated to LeBlanc. The court accordingly thought it “a little harsh” when the Government sought a sentence for Ortiz-Islas that was over six years longer than the one received by LeBlanc, and the judge accordingly imposed a shorter one.
Nor has Ortiz-Islas carried his “heavy burden” to show that his within-range sentence was substantively unreasonable. See United States v. Carpenter, 781 F.3d 599, 622 (1st Cir. 2015) (internal quotation marks omitted) (quoting United States v. Madera-Ortiz, 637 F.3d 26, 30 (1st Cir. 2011)). The most obvious explanation for the fact that Ortiz-Islas was sentenced within the Guidelines range while Hallett, LeBlanc, Charles, and Rossignol were sentenced below is that the latter individuals all pleaded guilty and three of them testified against Ortiz-Islas. Ortiz-Islas, a principal cocaine suрplier for the conspiracy, by contrast, neither pleaded, cooperated, nor admitted responsibility. It was no abuse of discretion to reject his sentencing-disparity claim.
III
We have considered Ortiz-Islas‘s remaining subsidiary arguments and find no merit in them. The district court‘s judgment is AFFIRMED.
Jane A. Becker Whitaker for appellee.
Before TORRUELLA, LIPEZ, and THOMPSON, Circuit Judges.
THOMPSON, Circuit Judge.
This appeal represents yet another installment in the protracted employment dispute between two former colleagues—plaintiff-appellee Ángel Edgardo Rodríguez-Miranda (Rodríguez) and defendant-appellant Malik Benin (Benin). Here, we must contend with the apparent efforts of Benin to avoid paying a judgment entered against his company, Coquico, Inc. (Coquico), in favor of Rodríguez for $348,821.23. Benin evidently sought to avoid the judgment by transferring Coquico‘s assets to his mother, Acquanetta M. Benin (Acquanetta), and to a new company, 18 Degrees North, LLC (18 Degrees North). The prin
I. HOW WE GOT HERE
This case has an unusual, somewhat circuitous history; therefore, it is necessary for us to go into some detail in laying out its factual and procedural background.
The saga began in 2000 when Rodríguez left his position in the Puerto Rico Federal Affairs office in Philadelphia, Pennsylvania, and was subsequently recruited by Benin to join Benin‘s Pennsylvania-based1 start-up venture—Coquico.
Coquico manufactures and distributes plush-toy animals, including a line of toys designed to resemble a small brown tree frog that is adored in Puerto Rico—the coquí. Because the company was a start-up, Rodríguez, who oversaw the company‘s growth in Puerto Rico while Benin supervised from afar in Philadelphia, initially agreed to lend the company money (the record does not make clear what these loans were for) and to forego salary and incentive payments until the business got on its feet.
A. The Relationship Sours: A Tale of Two Lawsuits
Rodríguez worked for Coquico for four years, but became disgruntled when Benin continued to withhold compensation and loan repayments from him even as the company began making money. Eventually, Rodríguez left Coquico and filed a collection claim against the company in San Juan Superior Court for money owed.2 And that‘s not all. After filing suit, Rodríguez approached Coquico‘s suppliers and began to distribute apparently similar plush-toy coquís himself in Puerto Rico through his own company, Identiko, Inc. (Identiko). In response to this upstart venture, Coquico sued Identiko and Rodríguez in federal court in Puerto Rico for, among other things, copyright infringement, alleging that Rodríguez and Identiko had infringed Coquico‘s copyrights for the coquí plush-toys (more on this later). For the reader‘s ease, we refer to this as the “copyright action” from here on out.
After a preliminary injunction hearing in the copyright action, the district court entered an order enjoining Rodríguez and Identiko from continuing to market the plush-toy coquís.3 Coquico then sought contempt sanctions and damages before the district court.
In turn, Rodríguez dismissed, without prejudice, his collection claim, which had still been pending in San Juan Superior Court, and re-filed the action in federal court in Puerto Rico against Coquico, Benin, and Benin‘s wife, Phillipa Ashby, seeking payment of his promised wages and
Both cases moved forward in parallel proceedings before different district judges.5 In the copyright infringement action, the district court found that “Identiko and Rodríguez infringed [Coquico‘s] copyrights and that [Coquico was] therefore entitled to recover damages.” Coquico, Inc. v. Rodríguez-Miranda, No. 07-1432 JP, 2010 WL 3372388, at *3 (D.P.R. Aug. 24, 2010). But Coquico “elected to seek statutory damages in lieu of actual damages,” and, on August 24, 2010, the district court awarded Coquico $15,000 based on the evidence presented at the bench trial. Id. at *2-3.
As for the collection action, it went to trial, and, on July 27, 2011, a jury found for Rodríguez against Coquico only6 in the amount of $348,821.23.7 Coquico did not appeal, and, on September 19, 2011, the district court issued a writ of execution of judgment.
B. Post-Judgment Shenanigans
Nearly a year later, on August 21, 2012, Rodríguez, who had been unable to recover one dime on his judgment, electronically filed a motion asking the district court to order the sale of Coquico‘s assets to satisfy the judgment.8 Accordingly, on September 11, 2012, the district court approved the seizure and sale of Coquico‘s copyrights and trademarks to satisfy the debt.9
In June 2013, Coquico received notice from the district court that the sale of its intellectual property had been scheduled for July 11, 2013. On July 8, 2013, three days before the scheduled sale, Benin‘s mother, Acquanetta, who was not represented by counsel, sought to intervene in the collection action and to stay execution, claiming that she was the record owner of the property set for sale having previously purchased the relevant intellectual property from Coquico years before. Notably, in
In tandem with his mother‘s filing in the collection action, Benin moved pro se11 to likewise stay the sale12 of the intellectual property, arguing, for the first time, that Acquanetta was an “indispensable party to the action” because she, not Coquico, owned the property.13 In short, despite Benin‘s prior, consistent representations, not only in his copyright action but also in the collection action, that Coquico—not Acquanetta—was the owner of the copyrights, Benin now asserted that his mother had “purchased” the intellectual property
The district court denied both Acquanetta‘s motion to intervene and Benin‘s motion to stay by paper order, explaining that it would “not allow intervention on a matter concluded by judgment a long time ago,” especially when the public auction for the sale of the intellectual property was set for the next day.
At the time it docketed this order, on July 9, 2013, the district court was not aware that just that day Coquico, represented by counsel, had filed for bankruptcy under Chapter 7 of Title 11 of the United States Code,
C. A Detour to Bankruptcy Court
In its bankruptcy filings, Coquico, through Benin, claimed to have little to no
Rodríguez, who appeared in the bankruptcy action as a creditor of Coquico‘s, moved to dismiss the bankruptcy petition for lack of good faith pursuant to
Responding to Rodríguez‘s motion to dismiss, the bankruptcy court held a two-day evidentiary hearing on December 2, 2013, and January 13, 2014. Noteworthy
- Benin is the Chief Executive Officer, President, and principal shareholder of 18 Degrees North, as with Coquico;
- 18 Degrees North has the same mailing address as Coquico and manufactures and sells the same plush toys as Coquico;
- Acquanetta licensed her intellectual property exclusively to Coquico until 2016, and then (somehow) also licensed it to 18 Degrees North, effective August 31, 2009;
- 18 Degrees North‘s bank account and Pennsylvania registration are under the name “18 Degrees North, LLC, d/b/a Coquico;”
- 18 Degrees North‘s customers overlap with Coquico‘s customers and were derived from Coquico‘s customer lists;
- Orders made at Coquico‘s website are filled by 18 Degrees North, and Benin testified that “the front-end of [Coquico‘s] website [is] essentially the brand Coquico, but the transactions and the inventory [are] associated with 18 Degrees North;”
In a single year Coquico transferred approximately $45,000 to 18 Degrees North.
At the conclusion of the two-day evidentiary hearing, the bankruptcy court granted Rodríguez‘s motion to dismiss Benin‘s bankruptcy petition, finding it was filed in bad faith. See In re Coquico, Inc., 508 B.R. 929, 933 (Bankr. E.D. Pa. 2014). The bankruptcy court determined that Coquico‘s bankruptcy schedules “contain[ed] so many material falsehoods, inaccuracies, and omissions” that it was “shocking.” Highlighting that Coquico‘s bank accounts “reflected the commingling of funds,” “the payment of personal expenses,15 prepetition defalcations, [and] postpetition unauthorized transactions,” the bankruptcy court found that “virtually every bad faith criteria [was] met . . . without question.” See also In re Coquico, Inc., 508 B.R. at 944 (noting that “[t]he evidence established that Benin looted Coquico both prepetition and postpetition, and that he lied in multiple court filings as to Coquico‘s assets“).
The bankruptcy court further noted that 98 percent of Coquico‘s debt was held by Benin‘s family members—his wife, his father, and, of course, his mother, Acquanetta. What‘s more, the bankruptcy court found Benin‘s testimony to be “extremely evasive, not credible, contrived and, frankly, coached.”
Finally, the bankruptcy court found the timing of the filing suspicious, especially given Benin‘s own (striking) testimony “that the purpose of the bankruptcy filing was to stop the judicial sale.” The bankruptcy court concluded that Coquico‘s bankruptcy filing was “nothing more . . . than an attempt to relitigate the copyright lawsuit and the collection lawsuit,” and to “spirit away the only valuable asset . . .
D. Another Attempt to Collect the Judgment
After the bankruptcy case was dismissed, on January 29, 2014, Rodríguez filed yet another motion in the district court in Puerto Rico in the collection action seeking to compel payment of the judgment. The miscellaneous motion—titled “Motion Asking This Court To Order Defendant And Respondents To Pay the Judgment In This Case On Penalty Of Contempt“—invoked concepts of successor liability, veil piercing, and fraud and sought to join Benin, Acquanetta, and 18 Degrees North to the action and to hold them jointly and severally liable for the judgment. Rodríguez attached Coquico‘s bankruptcy schedules, the bankruptcy hearing transcript, and the bankruptcy judge‘s oral decision to the motion.
Rodríguez filed the motion electronically and also sent copies of the motion by regular mail to Coquico, 18 Degrees North, Benin, and Acquanetta. Upon receiving and reviewing Rodríguez‘s motion, the district court issued an electronic order setting the motion for hearing on February 28, 2014. The district court also or
Shortly before the hearing on Rodríguez‘s motion, Benin filed a letter, “as an officer of Coquico,” informing the district court that he did not have the resources to hire an attorney and that he would not be able to attend the hearing. Aside from perfunctorily mentioning that the judgment had been entered against Coquico “and no other parties,” Benin did not respond to the substance of Rodríguez‘s motion. Rodríguez replied to Benin‘s letter, informing the district court that Benin had, in fact, been able to hire two attorneys to represent him in the bankruptcy case. The district court denied Benin‘s motion (such as it was) and the hearing continued as scheduled.
Despite having been noticed and ordered to appear, Benin, Acquanetta, 18 Degrees North, and Coquico all failed to attend the district court hearing or to oppose Rodríguez‘s motion. But the hearing procеeded, and Rodríguez entered into evidence the transcript from the bankruptcy hearing, including Benin‘s testimony, and the bankruptcy court‘s findings of fact and conclusions of law.
On March 6, 2014, the district court entered an order that joined Benin, Acquanetta, and 18 Degrees North to the action pursuant to Rule 25(c) and held them liable for the judgment. The district court determined that all three were joinable under Rule 25(c), specifically concluding “that 18 Degrees North [] is a successor corporation and alter ego of Coquico” and, therefore, “is liable for [Coquico‘s] debts, including the judgment, costs, and interest award,” and that Benin and Acquanetta are alter egos of both Coquico and 18 Degrees North and, consequently, are also liable for the judgment.
The district court also held Coquico, Benin, Acquanetta, and 18 Degrees North in civil contempt for failure to appear at the hearing and ordered Benin to pay $5,000, “[g]iven the magnitude and the variety of the offenses” he committed to avoid paying thе judgment. The district court did not sanction Acquanetta but indicated that if she continued to violate the district court‘s orders it would do so.
Benin paid the contempt sanction, and appellants timely appealed.
II. DISCUSSION
On appeal, appellants challenge, in essence, (1) the district court‘s use of Rule 25(c) to join Benin, Acquanetta, and 18 Degrees North to the judgment and (2) the district court‘s order finding Benin in civil contempt and imposing a $5,000 sanction.
A. Rule 25(c)
1. Notice: Clearing the Underbrush
The heart of appellants’ argument on appeal, is that the district court erred in using Rule 25(c) to hold them liable for the judgment entered in favor of Rodríguez.16 But before tackling appellants’ primary Rule 25(c) arguments, we must first ad
But the relevant Rule 7 question is whether appellants were “prejudiced by a lack of particularity” and whether the district court could “comprehend the basis for the motion and deal with it fairly.” Cambridge Plating Co. v. Napco, Inc., 85 F.3d 752, 760 (1st Cir. 1996) (quoting Registration Control Sys., Inc. v. Compusystems, Inc., 922 F.2d 805, 807-08 (Fed. Cir. 1990)); see also 5 C. Wright & A. Miller, Fed. Prac. & Proc. Civ. § 1192 (3d ed.) (“[T]he niceties of specifying the relief or order sought by the motion are unimportant in some situations and can be disregarded by the court.“).
Rodríguez‘s motion clearly seeks to join Benin, Acquanetta, and 18 Degrees North as parties to the action and to hold them liable for the judgment entered against Coquico. In support of his requеst,
2. Application of Rule 25(c)
Having disposed of appellants’ notice arguments, we now turn to the merits of their Rule 25(c) challenge. Construed generously, appellants raise two Rule 25(c) arguments—one more substantive than the other. First, appellants seem to suggest that Rule 25(c) can only be invoked when a transfer of interest occurs during the pendency of the litigation, not after judgment has been entered. Next, they argue that the district court improperly relied on Rule 25(c) as a vehicle for joining them because the Rule 25(c) inquiry cannot include veil piercing and alter ego theories, which alter the parties’ substantive rights.
a) Clarifying the Standard of Review
In his opening salvo, Rodríguez argues that appellants waived any and all arguments by failing to raise them below. See Cochran v. Quest Software, Inc., 328 F.3d 1, 11 (1st Cir. 2003) (noting that “it is a virtually ironclad rule that a party may not advance [a new argument] for the first time on appeal“). We are inclined to agree. As discussed above, Coquico, Benin, Acquanetta, and 18 Degrees North had ample notice that the district court was considering joining them to the action and holding them “jointly аnd severally liable to pay the judgment.” They likewise had full opportunity to appear in the district court and to contest any aspect of Rodríguez‘s motion, yet they filed no written opposition, declined to attend the motion hearing, and raised not a single argument below that the district court should refrain from holding them liable for the judgment entered in favor of Rodríguez. As a result, they likely waived, or, at the very least, forfeited, their Rule 25(c) arguments. See United States v. Eisom, 585 F.3d 552, 556 (1st Cir. 2009) (explaining that “waiver implies an intention to forgo a known right, whereas forfeiture implies something less deliberate—say, oversight, inadvertence, or neglect in asserting a potential right“).
In response to Rodríguez‘s assertions of waiver, appellants simply rehash their notice argument, contending that they could not have raised a challenge to the district court‘s use of Rule 25(c) because “Rodríguez‘s motion below never recited [the rule].” But, as discussed above, appellants did know that Rodríguez‘s motion sought to join them to the action and to hоld them liable for the judgment and they made no argument—Rule 25(c) related or other
b) Rule 25(c) Primer
Rule 25. Substitution of Parties . . .
(c) Transfer of Interest. If an interest is transferred, the action may be continued by or against the original party unless the court, on motion, orders the transferee to be substituted in the action or joined with the original party.
c) Appellants’ Rule 25(c) Timing Argument
Disposing first of appellants’ suggestion—also referenced at oral argument—that Rule 25(c) is not available when the transfer occurs after judgment has been entered, we conclude that there was no error, much less plain error. See United States v. Jimenez, 512 F.3d 1, 3 (1st Cir. 2007) (“Plain-error review places a burden on an appellant to show (i) that an error occurred, (ii) which was clear and obvious, (iii) which affected his substantial rights, and (iv) which seriously impaired the fairness, integrity, or public perception of the proceeding.“).
Rule 25(c) applies to actions that are “pending,” but this does not preclude substitution during subsequent proceedings brought to enforce a judgment. See Negrón-Almeda, 579 F.3d at 52 (“Rule 25(c) governs substitution where a party to a lawsuit transfers an interest during the pendency of the lawsuit or after judgment has been rendered.“); Explosives Corp. of Am., 817 F.2d at 907 (“Substitution may be ordered after judgment has been rendered in the district court for the purpose of subsequent proceedings to enforce judgment.“); Panther Pumps & Equip. Co. v. Hydrocraft, Inc., 566 F.2d 8, 23 (7th Cir. 1977) (citing 3B Moore‘s Federal Practice P 25.03(1), at 25-101 (2d ed. 1977)) (explaining that Rule 25 applies in subsequent proceeding to enforce a judgment). A proceeding to enforce a judgment is “pending again, and Rule 25 applies.” Panther Pumps, 566 F.2d at 23.
It is also worth noting that in this case it is unclear when the relevant transfer of interest even occurred. To hear appellants tell it, the intellectual property was trans
d) Appellants’ Veil Piercing and Alter Ego Arguments
Appellants’ main argument—that the district court improperly relied on Rule 25(c) to alter the parties’ substantive rights by invoking the doctrines of veil piercing and alter ego—presents a more substantial question. After careful consideration, however, we cannot say that the district court‘s application of Rule 25(c) amounted to an error that was so “clear or obvious,” United States v. Duarte, 246 F.3d 56, 60 (1st Cir. 2001), that the district court should have “act[ed] even without an objection.” Bielunas v. F/V Misty Dawn, Inc., 621 F.3d 72, 78 (1st Cir. 2010).
As a reminder, the district court joined 18 Degrees North under Rule 25(c) as “a successor corporation and alter ego of Coquico,” and joined Benin and Acquanetta as alter egos of both Coquico and 18 Degrees North. And appellants do not appear to be challenging 18 Degrees North‘s joinder to the extent that it was only joined as “a successor corporation” of Coquico. In fact, in their briefing, appellants concede that a successor theory—as opposed to veil piercing or alter ego theories—is properly “within the ambit” of Rule 25(c), arguing only that “[w]here there is no successor
The distinction, at least as appellants interpret it, is the scope of their liability. They contend that under a successor-in-interest analysis, which they concede is appropriate under Rule 25(c), а party‘s joinder should be limited to reaching the “interest only.” In other words, they argue that under a proper application of Rule 25(c) the district court may join parties who have come to own or control a corporation‘s assets (i.e., the transferred interest), but only up to the value of those transferred assets. Here, because the district court also concluded that Coquico, 18 Degrees North, Benin, and Acquanetta are all alter egos of each other—and therefore legally a single entity—the district court did not limit their liability to the value of Coquico‘s transferred assets, but found them jointly and severally liable to Rodríguez for the entire $348,821.23 judgment (plus costs and interest). Appellants view this as, essentially, a substantive determination that is well beyond the scope of Rule 25(c).
Although not elegantly briefed, this is a thought-provoking argument. Unfortunately for appellants, “[p]lain error is one hard test to meet, particularly in civil litigation,” Bielunas, 621 F.3d at 78, and appellants cite no cases, in this circuit or оtherwise, that expressly limit Rule 25(c) joinder to the amount of the transferred assets. To the contrary, several other circuits have applied Rule 25(c) in almost exactly the same manner as the district court did here. See, e.g., Panther Pumps, 566 F.2d at 27-28 (allowing the substitution of a corporation‘s president
Of particular relevance, perhaps, is Minnesota Mining & Manufacturing Company. In that case, the plaintiff, Minnesota Mining and Manufacturing Co. (3M), obtained a default judgment against Eco Chem, Inc. (ECI) for patent infringement. 757 F.2d at 1258. After the suit against ECI was instituted, ECI‘s president, Stephanie Rynne, and her husband, George Rynne, who served as ECI‘s secretary-treasurer, set up a new corporation, Eco-Chem Limited (ECL), and transferred all of ECI‘s assets to thе new company. Id. at 1258-59. They exchanged their ECI shares for ECL shares, “converted all of ECI‘S assets to ECL, including the formulae, customer lists, trademarks and inventory,” deposited ECI‘S checks into ECL‘S accounts, and “informed their customers that ECL had succeeded ECI.” Id. (footnote omitted). 3M then moved to add the Rynnes and ECL as parties to their infringement action pursuant to Rule 25(c). Id. at 1259. After a hearing, the district court granted 3M‘s motion and joined “the Rynnes and ECL ‘as successors in interest and alter egos’ of ECI” and held them liable for the full damages and attorney‘s fees. Id. On appeal, the Rynnes and ECL challenged their joinder—mainly on jurisdictional grounds—but the Federal Circuit affirmed and held “that the district court reached the right result in rejecting [the
What this means for us is: when we have never expressly limited Rule 25(c) joinder to the amount of the transferred assets, and other circuits, especially on such similar facts, have sanctioned the use of Rule 25(c) to join parties as alter egos and hold them liable for the full judgment, “any error cannot be plаin or obvious.” United States v. Diaz, 285 F.3d 92, 96 (1st Cir. 2002). As such, we cannot say that the district court plainly erred in its application of the rule.
Application aside, appellants do not appear to challenge the district court‘s conclusion that Benin, 18 Degrees North, and Coquico “are all alter egos of one another.” However, they do seem to argue—in a single parenthetical—that the district court erred in concluding that Acquanetta was “the alter ego of a party.” Regardless, the district court did not err in finding any of the appellants to be alter egos of one another. Indeed, 18 Degrees North is, by nearly every measure, a mere continuation of Coquico.18 See Explosives Corp. of Am. v. Garlam Enters. Corp., 615 F. Supp. 364, 368 (D.P.R. 1985) (quoting Dayton v. Peck, Stow & Wilcox Co. (Pexto), 739 F.2d 690, 693 (1st Cir. 1984)) (describing key elements of continuation). It is registered under the name “18 Degrees North, LLC, d/b/a Coquico.” The compa
Likewise, the district court did not err in concluding that Benin and Acquanetta are alter egos of Coquico and 18 Degrees North. See United States v. JG-24, Inc., 331 F. Supp. 2d 14, 63 (D.P.R. 2004), aff‘d, 478 F.3d 28 (1st Cir. 2007) (listing factors courts should consider to determine whether to disregard the corporate form). Benin, as the sole shareholder and principal of Coquico, exercised total control оver Coquico (and then 18 Degrees North) and did not maintain Coquico‘s cor
In any event, even if the district court had erred, under plain error review, “we need not intervene unless the error . . . seriously impugn[ed] the ‘fairness, integrity, or public reputation of judicial proceedings.‘” Bielunas, 621 F.3d at 78 (quoting United States v. Roy, 506 F.3d 28, 30 (1st Cir. 2007)). Given appellants’ conduct, we cannot conclude that the district court‘s application of the rule—using it to hold appellants jointly and severally liable for Rodríguez‘s judgment—impugns the fairness of these proceedings. If anything, the opposite may be true as the record supports the district court‘s conclusion that Benin and Acquanetta engaged in the fraudulent transfer of Coquico‘s intellectual property from Coquico to Acquanetta—and from Acquanetta to 18 Degrees North—for the sole purpose of making Coquico judgment proof.20 To effectuate
Under these extraordinary circumstances, we cannot say that the district court plainly erred in joining 18 Degrees North, Benin, and Acquanetta to the action and holding them jointly and severally liable for the judgment pursuant to Rule 25(c). Further, as noted above, even if an error occurred, because it did not “seriously impair[] the fairness, integrity, or public perception of the proceeding,” Jimenez, 512 F.3d at 3, the district court did not plainly err, see United States v. Caraballo-Rodríguez, 480 F.3d 62, 70 (1st Cir. 2007) (explaining that a no-plain-error holding
3. The Remaining Jurisdictional Argument
Finally, here, appellants argue that the district court lacked personal jurisdiction over them because “they were not parties to the original judgment” and have insufficient contacts with the forum. But once personal jurisdiction is established over the original party, it “is retained over Rule 25(c) successors in interest,” Maysonet-Robles, 323 F.3d at 49, as long as “the substituted party had an opportunity to challenge its joinder or substitution.” Explosives Corp. of Am., 817 F.2d at 906 (citing Minn. Mining & Mfg. Co., 757 F.2d at 1262-63 and 7C C. Wright, A. Miller & M. Kane, Fed. Prac. & Proc. Civ. § 1958 at 559-60 (2d ed. 1986)). “Were this not so, the owners of the property could merely transfer legal ownership of the assets from one shell corporation to another in a different jurisdiction, putting a party whose initial suit satisfied the jurisdictional requirements to the immense burden of chasing the involved assets from courtroom to courtroom.” Minn. Mining & Mfg. Co., 757 F.2d at 1263. As we explained, appellants here had notice that Rodríguez sought to hold them liable for the judgment entered against Coquico and an opportunity to challenge their joinder before the district court. Accordingly, personal jurisdiction was properly acquired over appellants as Rule 25(c) successors in interest.
B. The Contempt Issue
Benin also argues that the district court erred in finding him in civil contempt and imposing a $5,000 sanction for failure to attend the hearing on Rodríguez‘s joinder motion. Specifically, Benin argues that
To determine whether the imposition of contempt sanctions is civil or criminal, we must “look to the purpose and character of the sanctions imposed, rather than to the label given to the proceeding by the court below.” In re Kave, 760 F.2d 343, 351 (1st Cir. 1985). “The purpose of a criminal contempt proceeding is the vindication of the court‘s authority by punishing for a past violation of a court order,” while “civil contempt is imposed to coerce present or future compliance with an order of the court.” Id. (emphasis omitted). But “[t]here is no dichotomous split between coercion and punishment . . . and a civil contempt sanction may evidence a punitive flavor.” AngioDynamics, 780 F.3d at 426.
Here, although Benin is correct that the contempt order was not reparative and that he was not given the opportunity to bring himself into compliance with the district court‘s order, both of which suggest a punitive purpose, the sanction imposed аlso seemed intended to coerce his future compliance with the district court‘s orders.
Indeed, in explaining its decision not to impose a sanction on Acquanetta, the district court stated that if Acquanetta continued to violate the district court‘s orders that she too could face sanctions in the future. The implication being, of course, that Acquanetta and Benin would face additional sanctions for continued noncompliance. This suggests that the district court was less concerned with punishment and more concerned with coercing Benin‘s and Acquanetta‘s future compliance with its orders. See Int‘l Union, United Mine Workers of Am. v. Bagwell, 512 U.S. 821, 829 (1994) (“A contempt fine . . . is considered civil and remedial if it . . . ‘coerce[s] the defendant into compliance with the court‘s order....‘” (citation omitted)). After careful consideration of the purpose and character of the sanction imposed in this case, therefore, we are satisfied that the district court acted within its discretion in imposing civil, not criminal, sanctions on Benin.
As we read appellants’ arguments, that ends the matter. They do not seem to challenge the district court‘s contempt finding beyond contesting the nature of the sanctions imposed. However, for the sake of completeness, to the extent that appellants do seek to challenge the merits of the district court‘s civil contempt finding, we will review in brief.
To prove civil contempt, the moving party—Rodríguez—must show by clear and convincing evidence that: “(1) the alleged contemnor had notice of the order, (2) ‘the order was clear and unambiguous,’
III. CONCLUSION
In sum, we conclude that the district court did not plainly err in joining Benin, Acquanetta, and 18 Degrees North under Rule 25(c) as alter egos of Coquico and holding them liable for the judgment entered in favor of Rodríguez. We likewise affirm the district court‘s order finding appellants in civil contempt and imposing a $5,000 sanction on Benin. Costs to Rodríguez.