United States Securities and Exchange Commission v. Collector's Coffee Inc.

Background

On March 10, 2025, the court had granted in part and denied in part the United States Securities and Exchange Commission’s request for remedies against Collector’s Coffee Inc. and Mykal Kontilai, and against Veronica Kontilai as a relief defendant. The court ordered Veronica Kontilai to disgorge $332,522 and pay $56,154.09 in prejudgment interest, jointly and severally with the defendants.

Veronica Kontilai then sought leave to file a proposed motion to alter or amend the judgment under Federal Rule of Civil Procedure 59(e). The court construed her request as a Rule 59(e) motion. She also sought leave to file additional briefing concerning SEC v. Jarkesy, 603 U.S. 109 (2024).

Rule 59(e) motion

The court explained that reconsideration under Rule 59(e) is an extraordinary remedy generally limited to an intervening change in controlling law, newly available evidence, or the need to correct a clear error or prevent manifest injustice. It denied the motion without further briefing because it clearly lacked merit.

The court found that Veronica Kontilai largely repeated arguments previously presented and rejected in connection with the remedies decision. Those arguments included that the SEC had presented no evidence against her at trial; that disgorgement was a penalty because she had spent the funds before the action began; that the court had incorrectly ruled on marital privilege; that Jacqueline Moessner was an incompetent witness and that the court improperly relied on her declaration; and that the court should have considered a January 29, 2025 submission concerning business expenses in a report by Vranca.

The court also rejected her reliance on SEC v. Ahmed, 72 F.4th 379 (2d Cir. 2023), explaining that the nominee doctrine discussed in that case was not relevant to the theory on which the SEC sought disgorgement from her. The court concluded that the motion sought to relitigate issues already decided and that Veronica Kontilai had not met the demanding standard for reconsideration.

Request for additional Jarkesy briefing

The court separately denied Veronica Kontilai’s request for additional briefing on Jarkesy. It said additional briefing would be futile because the remedies decision had already explained why the defendants and Veronica Kontilai were not entitled to a jury trial at the remedies stage under Jarkesy. The court had concluded that the Seventh Amendment did not apply to the court’s determination of remedies. The court further stated that disagreement with its interpretation of Jarkesy was not an adequate basis for reconsideration.

Disposition

Judge Victor Marrero denied Veronica Kontilai’s Rule 59(e) motion and denied her request for leave to file additional briefing regarding SEC v. Jarkesy. The clerk was directed to close the two related docket entries.