Josephs v. Marzan

Background

Michaleen Josephs sued Alberto Jose Marzan and Press Media Group, Inc., doing business as VumaTV. Marzan did not appear in the case, and the court entered default judgment for Josephs. The court awarded more than $800,000 in damages, interest, and attorney’s fees.

The default judgment also imposed equitable relief, meaning non-monetary requirements. It required Marzan to divest himself of interests and involvement in Press Media Group and Jupiter Rising; disclose the court’s judgment, the complaint, the motion, and his 2014 guilty plea for insurance fraud to actual or potential investors, businesses, employees, and contractors; and obtain the court’s permission before forming new business entities.

Conduct Described in the Opinion

The court described evidence that Marzan continued to use Jupiter Rising and other business activities while failing to make the required disclosures. The opinion discusses five people whom Marzan employed, recruited, or sought to work with: Alexandra Weitzer, Dr. Niyi Coker, Lindsey Lambert, Giancarlo Ruiz, and Galina Semenova. According to the declarations cited by the court, Marzan did not provide the required disclosures to them. Several were also not paid for their work or reimbursed for expenses.

The court emphasized that Marzan appeared to know about the order. In communications with people who learned about the case, he characterized the matter as invalid or expected it to be vacated. The court stated that he could have asked the court to reconsider or change the order but was not entitled to disregard it on his own.

The court had ordered Marzan to appear and explain why he should not be held in contempt. Although he had nearly two months’ notice, he did not attend the hearing. He left a voicemail that morning saying he needed more time to obtain counsel.

Contempt Analysis

The court distinguished civil contempt from criminal contempt. Civil contempt uses imprisonment or monetary sanctions to pressure compliance with a court order or compensate an injured party. Criminal contempt is punishment for past disobedience and is treated as a crime.

The court concluded that compensatory civil contempt was not appropriate because Josephs had not been harmed by Marzan’s post-judgment conduct. It also concluded that coercive civil contempt would not be effective: fines would likely accomplish little because Marzan habitually ignored monetary judgments, and the court could not identify a workable prison term that would allow him to secure release by complying with an order largely requiring him to refrain from acting.

The court found that Marzan’s violations were willful and deliberate, that they furthered additional fraudulent schemes, and that he would not be deterred without meaningful consequences. It therefore decided that criminal contempt was the appropriate course.

Order

Pursuant to Federal Rule of Criminal Procedure 42(a)(2), the court requested that the United States Department of Justice prosecute Alberto Jose Marzan for criminal contempt. The Clerk of Court was directed to send the memorandum opinion to the United States Attorney’s Office for the District of Minnesota.

The court also directed the Clerk to send the opinion and materials concerning a letter from an attorney, Aaron C. Young, to the Minnesota Lawyers Professional Responsibility Board. The court stated that it did not have enough information to decide whether Young had engaged in misconduct but that state regulators could investigate the matters discussed in the opinion’s footnote.