Broker Genius Inc. v. Seat Scouts LLC

Background

On January 28, 2020, the court granted Broker Genius’s request to have the Clerk certify a January 22, 2019 trial judgment and allowed Broker Genius to register that judgment in districts where Seat Scouts LLC and Drew Gainor had assets, under 28 U.S.C. § 1963. Broker Genius then sought the same treatment for a civil contempt judgment entered against Seat Scouts and Gainor on August 12, 2019, in the amount of $280,039.03.

Seat Scouts and Gainor opposed the new request. Their filing argued that the court had incorrectly stated that they did not dispute having no assets in New York and that the January 28 order violated the Constitution’s full-faith-and-credit clause by failing to give proper effect to a Nebraska court judgment. They also referred to the Nebraska court’s treatment of a transaction involving Pistol Enterprises LLC.

Reconsideration request

The court construed the defendants’ filing as a motion for reconsideration of the January 28 order. It explained that reconsideration is available only when the moving party identifies controlling decisions or information the court overlooked that could change the result, or shows a need to correct clear error or prevent manifest injustice. The court also noted that reconsideration is not a substitute for an appeal and that the defendants’ filing was untimely under Local Civil Rule 6.3 because it was filed 15 days after the court’s January 22 order.

The court rejected the defendants’ argument about New York assets. Although their attorney had written that Broker Genius was incorrect to say that no assets were in New York, the defendants provided no factual support for that assertion. Broker Genius had submitted a sworn declaration and exhibits indicating that the defendants had no assets in New York, and neither defendant submitted an affidavit or declaration under penalty of perjury addressing the existence or location of assets. The court therefore maintained its statement that the defendants’ opposition did not dispute that they had no New York assets.

The court also rejected the full-faith-and-credit argument. It stated that, to the extent the defendants claimed Pistol retained a perfected security interest in Seat Scouts’ assets, that issue could be raised in the district where Broker Genius registered the judgment. The court explained that whether an asset was encumbered was not part of the certification inquiry, which required Broker Genius to establish “good cause” under 28 U.S.C. § 1963. The court concluded that the reconsideration motion failed under the strict standard governing such motions.

Certification of contempt judgment

Alternatively, the court considered the filing as an opposition to Broker Genius’s motion to certify the contempt judgment under § 1963. It found that opposition unsuccessful, including because the defendants relied on arguments from their earlier opposition. For the reasons stated in the January 28 order, the court granted Broker Genius’s motion and directed the Clerk to certify the August 12, 2019 contempt judgment.

The court permitted Broker Genius to register the judgment in districts where the defendants had assets, including the District of Nebraska, the District of Delaware, the District of Massachusetts, the Eastern District of North Carolina, and the Northern District of California. The opinion did not decide whether any particular asset was subject to a security interest.