Motion to Hold Defendants in Civil Contempt Denied Where No Unequivocal Mandate

On June 5. 2023, Justice Robert R. Reed of the New York County Commercial Division issued a decision in Cortlandt St. Recovery Corp. v. TPG Cap. Mgmt., L.P., 2023 N.Y. Misc. LEXIS 2734. The Court denied the plaintiff’s motion to hold certain defendants in civil contempt for allegedly filing a court order permitting plaintiff jurisdictional discovery, holding that the court order plaintiff alleged these defendants had violated did not contain an “unequivocal mandate” required by “[l]ongstanding New York Court of Appeals precedent” to establish civil contempt. The Court explained:

Longstanding New York Court of Appeals precedent requires that each element for contempt be satisfied by clear and convincing evidence (El-Dehdan v. El Dehdan, 26 NY3d 19, 29, 19 N.Y.S.3d 475, 41 N.E.3d 340 [2015]). Specifically, the movant must establish, by clear and convincing evidence, that: (1) "a lawful order of the court, clearly expressing an unequivocal mandate, was in effect"; (2) "it must appear, with reasonable certainty, that the order has been disobeyed"; (3) "the party to be held in contempt had knowledge of that court's order"; and (4) "prejudice to the right of a party to the litigation" (id.).

Concerning the first two elements required to establish contempt, there is no court order expressing an unequivocal mandate in effect that was disobeyed by the individual defendants. Justice Edmead indeed held that plaintiff was entitled to additional discovery with respect to the individual defendants, but that order, which was issued in October 2020, contained no directions specifying the timeframe for completing additional discovery. The exclusion of such specifications is understandable, considering that discovery timelines are rarely decided in the context of motions to dismiss, and are instead determined during discovery conferences, which plaintiff never requested. Moreover, Justice Edmead's exclusion of deadlines for completing additional discovery cannot be interpreted as an infinite authorization to serve additional discovery requests at any point that plaintiff wishes, no matter how many months have lapsed since the court's order. If plaintiff fails to act for a considerable amount of time, it is reasonable to assume, both for defendants as well as for this court, that plaintiff has abandoned the issue.

. . .

Justice Edmead's order and the discovery order in effect at the time of Justice Edmead's decision, therefore, whether taken individually or collectively, cannot be read as having unequivocally required the individual defendants to respond to plaintiff's untimely requests.

Contact the Commercial Division Blog Committee at commercialdivisionblog@schlamstone.com if you or a client have questions concerning a motion for civil contempt.