Absolute Nevada, LLC v. Grand Majestic Riverboat Company LLC

Background

Absolute Nevada, LLC sued Grand Majestic Riverboat Company LLC over a failed charter agreement for the riverboat M/V Americana and sought emergency injunctive relief. On January 6, 2020, the court entered a stipulation and order resolving Absolute Nevada’s claims for injunctive relief against Grand Majestic.

The court later found by clear and convincing evidence that Joseph L. Baer, Grand Majestic’s president, owner, and sole member, violated that order. The court found that Baer brought a claim related to the failed charter outside arbitration, encumbered the vessel with a lien related to the failed charter, and placed a lien on the vessel for a related claim. Baer did not appear at the August 4, 2020 contempt hearing, although the opinion states that he had actual notice.

Baer’s Motion

Baer moved to reconsider and vacate the September 1, 2020 civil-contempt ruling and also described his request as one for a new trial. Absolute Nevada argued that the motion was late. The court agreed that the motion was untimely under both Local Civil Rule 6.3 and Federal Rule of Civil Procedure 59(e). Because Baer was representing himself, however, the court gave him special consideration and treated the motion as timely.

The court explained that reconsideration is available only under a strict standard, such as an intervening change in controlling law, genuinely new evidence, or a need to correct a clear error or prevent serious unfairness. It is not an opportunity to make arguments that could have been made earlier.

Arguments and Analysis

Baer first argued that the court lacked subject-matter jurisdiction, meaning authority over the type of dispute. The court held that the case arose from a charter-party agreement, which it described as a maritime contract, and therefore fell within federal maritime jurisdiction.

Baer next argued that the court lacked authority over him personally because he was not a party to the case. The court rejected that argument, explaining that courts may exercise authority over nonparties in contempt proceedings when those nonparties allegedly assist in violating an order that binds a party over whom the court has authority. The court concluded that it had personal jurisdiction over Baer for the contempt proceedings.

Baer also challenged service of the July 8, 2020 order requiring him to appear and explain why he should not be held in contempt. The court stated that Federal Rule of Civil Procedure 4 allowed service under New York law and concluded that he was properly served. The court further held that attempts to serve Baer at his Kentucky home satisfied the required diligence for New York’s “nail and mail” method of service. The court also rejected his objection to a process server described as a constable, stating that the federal rule permits service by a person who is at least 18 years old and is not a party.

Baer argued that the court overlooked facts, including Grand Majestic’s status as a limited liability company rather than a sole proprietorship and the existence of a personal lien for unpaid seaman’s wages. The court said it had not found that Grand Majestic was a sole proprietorship and had considered the seaman’s-wage lien. It had concluded that the lien was substantively the same as Baer’s earlier claim for personal services related to the failed charter and was covered by the January 6 order.

Finally, Baer sought sanctions against Absolute Nevada’s counsel and asked the court to hold counsel in contempt. The court found those arguments without merit.

Absolute Nevada’s Cross-Motions

Absolute Nevada asked for attorney fees incurred in pursuing the civil-contempt matter and asked the court to issue a warrant for Baer’s arrest because of his continued noncompliance. The court denied the attorney-fee motion at that time but stated that it could be renewed at the conclusion of the action. The court also denied the arrest request because it did not find civil confinement to be an appropriate sanction on the record before it. In its conclusion, the court stated that Absolute Nevada’s cross-motions were denied without prejudice.

Disposition

The court denied Baer’s motion to reconsider and vacate and adhered to the September 1, 2020 contempt ruling in its entirety. The court denied Absolute Nevada’s cross-motions without prejudice and directed the clerk to terminate the motions. Absolute Nevada was ordered to serve the order on Baer and file proof of service within 14 days.