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`USCA11 Case: 21-13059 Date Filed: 10/18/2021 Page: 1 of 70
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`UNITED STATES COURT OF APPEALS
`FOR THE ELEVENTH CIRCUIT
`
`CASE NO. 21-13059-H
`
`
`
`DEL MONTE INTERNATIONAL GMBH,
`
`
`
`Appellant,
`
`vs.
`
`INVERSIONES Y PROCESADORA TROPICAL INPROTSA, S.A.,
`JORGE LUIS GURRIA HERNANDEZ, AND MANUEL GURRIA
`ORDONEZ
`
`Appellees.
`
`
`Appeal from the United States District Court
`for the Southern District of Florida
`Case No. 1:16-cv-24275-FAM
`
`
`APPELLANT’S INITIAL BRIEF
`
`
`Brian J. Stack, Esq.
`Robert Harris, Esq.
`Denise Crockett, Esq.
`STACK FERNANDEZ & HARRIS, P.A.
`1001 Brickell Bay Drive, Suite 2650
`Miami, Florida 33131
`Telephone: 305-371-0001
`Facsimile: 305-371-0002
`
`Attorneys for Appellant, Del Monte International GmbH
`
`
`
`USCA11 Case: 21-13059 Date Filed: 10/18/2021 Page: 2 of 70
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`CERTIFICATE OF INTERESTED PERSONS
`
`Pursuant to Rule 26.1-1 of the Eleventh Circuit Rules, Appellant, DEL
`
`
`
`MONTE INTERNATIONAL GMBH (“Appellant”), sets forth the trial judge,
`
`attorneys, persons, associations of persons, firms, partnerships, or corporations that
`
`may have an interest in the outcome of this appeal and the case below, including
`
`subsidiaries, conglomerates, affiliates and parent corporations, including publicly
`
`held corporations that own 10% or more of any party’s stock and other identifiable
`
`legal entities related to a party:
`
`Congelas Del Monte
`
`Corporacion Bandeco C.R., S.A.
`
`Corporacion de Desarrollo Agricola Del Monte, S.A.
`
`Crockett, Denise B., of Stack Fernandez & Harris, P.A.
`
`Del Monte Fresh Produce Company
`
`Del Monte Fresh Produce International Inc.
`
`Del Monte Fresh Produce N.A., Inc.
`
`Del Monte International GmbH
`
`Espana, Alejandro Ogarrio Ramirez, Arbitrator
`
`1.
`
`2.
`
`3.
`
`4.
`
`5.
`
`6.
`
`7.
`
`8.
`
`9.
`
`10. Fernandez, Jr., Lazaro, of Stack Fernandez & Harris, P.A.
`
`11. Fresh Del Monte Produce Inc., a publicly traded company on the New
`York Stock Exchange under ticker symbol “FDP”.
`
`
`12. Graham, Luis Enrique, of Hogan Lovells US LLP
`
`i
`
`
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`USCA11 Case: 21-13059 Date Filed: 10/18/2021 Page: 3 of 70
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`International Chamber of Commerce, International Court of Arbitration
`
`Inversiones y Procesadora Tropical, S.A. (INPROTSA)
`
`
`13. Gurria Hernandez, Jorge Luis
`
`14. Gurria Ordonez, Manuel
`
`15. Harris, Robert, of Stack Fernandez & Harris, P.A.
`
`16. Hogan Lovells US LLP
`
`17. Homer, William, of Hogan Lovells US LLP
`
`18.
`
`19.
`
`20. Lindsay, Alvin F., of Hogan Lovells US LLP
`
`21. Lorenzo, Richard C., of Hogan Lovells US LLP
`
`22. Louis, Honorable Lauren Fleischer, United States Magistrate Judge
`
`23. Massey, David, of Hogan Lovells US LLP
`
`24. Moreno, Honorable Federico A., United States District Judge
`
`25. Naon, Horacio Grigera, Arbitrator
`
`26. Ocariz, Humberto, Arbitrator
`
`27. Productora y Exportadora de Frutas Verduras Fruver S.A.
`
`28. Stack, Brian J., of Stack Fernandez & Harris, P.A.
`
`29. Stack Fernandez & Harris, P.A.
`
`30. Steinberg, Marty, of Hogan Lovells US LLP
`
`
`
`ii
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`
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`USCA11 Case: 21-13059 Date Filed: 10/18/2021 Page: 4 of 70
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`
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`CORPORATE DISCLOSURE STATEMENT
`
`Appellant, Del Monte International GmbH, hereby discloses that it is an
`
`indirect subsidiary of, and its ultimate parent corporation is, Fresh Del Monte
`
`Produce Inc., a publicly traded company on the New York Stock Exchange under
`
`ticker symbol “FDP.”
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`
`
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`
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`iii
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`USCA11 Case: 21-13059 Date Filed: 10/18/2021 Page: 5 of 70
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`STATEMENT REGARDING ORAL ARGUMENT
`
`
`
`Pursuant to Fed. R. App. P. 34(a)(2) and 11th Cir. R. 28-1(c), Appellant
`
`respectfully submits that the decisional process will be significantly aided by oral
`
`argument and a robust discussion of the issues. Furthermore, oral argument will
`
`allow the Court to clarify its understanding of the facts and explore Appellant’s
`
`contentions in greater detail.
`
`
`
`
`
`
`
`iv
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`
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`USCA11 Case: 21-13059 Date Filed: 10/18/2021 Page: 6 of 70
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`TABLE OF CONTENTS
`
`CERTIFICATE OF INTERESTED PERSONS
`
`CORPORATE DISCLOSURE STATEMENT
`
`STATEMENT REGARDING ORAL ARGUMENT
`
`TABLE OF CITATIONS
`
`I.
`
`JURISDICTIONAL STATEMENT
`
`INTRODUCTION
`II.
`III. STATEMENT OF THE ISSUES
`IV. STATEMENT OF THE FACTS AND COURSE OF
`PROCEEDINGS
`Events Prior to Del Monte’s Motion to Show Cause
`A.
`B.
`INPROTSA’s Violation of the Destruction Injunction and
`Sales Injunction
`Del Monte Moves to Hold INPROTSA and the Gurrias in
`Contempt
`Del Monte’s Motion to Show Cause Is Referred to the
`Magistrate Judge for a Report and Recommendation
`The District Court Adopts the First R&R in Its Entirety
`INPROTSA’s and the Gurrias’ Response to District Court’s
`Order to Show Cause
`Del Monte’s Renewed Motion for Entry of Final Judgment
`of Contempt
`
`E.
`F.
`
`G.
`
`
`
`C.
`
`D.
`
`Page
`
`
`i
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`
`
`
`
`
`iii
`
`iv
`
`viii
`
`1
`
`2
`5
`6
`
`6
`8
`
`9
`
`10
`
`12
`13
`
`13
`
`v
`
`
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`USCA11 Case: 21-13059 Date Filed: 10/18/2021 Page: 7 of 70
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`TABLE OF CONTENTS
`
`H.
`
`
`
`
`I.
`
`J.
`K.
`
`Del Monte’s Renewed Motion for Entry of Final Judgment
`of Contempt Is Referred to Magistrate Judge for a Report
`and Recommendation
`The Magistrate Judge Issues a Report and Recommendation
`on Del Monte’s Renewed Motion for Final Judgment of
`Contempt
`The Parties File Objections to the Second R&R
`The District Court Adopts, in Part, the Second R&R and
`Issues an Order to Show Cause to INPROTSA and the
`Gurrias Why They Should Not Be Held in Contempt
`The District Court Holds INPROTSA in Contempt
`L.
`M. Del Monte Files Its Notices of Appeal
`STATEMENT OF THE STANDARD OR SCOPE OF REVIEW
`V.
`VI. SUMMARY OF ARGUMENT
`
`VII. ARGUMENT
`Disgorgement of INPROTSA’s Ill-Gotten Gains Is a Proper
`A.
`Compensatory Remedy for Violation of the Sales Injunction
`1. Disgorgement Is a Recognized Contempt Remedy
`2. F.T.C. v. Leshin Authorizes Disgorgement
`3. INPROTSA Must Disgorge Gross Revenues with No
`Setoff For Expenses Incurred
`4. Because Del Monte Showed that It Was Harmed by
`INPROTSA’s Violation of the Sales Injunction,
`Disgorgement Was Proper
`
`Page
`
`
`15
`
`16
`
`17
`17
`
`18
`20
`20
`21
`23
`23
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`23
`31
`33
`
`38
`
`vi
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`
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`USCA11 Case: 21-13059 Date Filed: 10/18/2021 Page: 8 of 70
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`TABLE OF CONTENTS
`
`
`
`
`B.
`
`5. The Contempt Order Should Be Reversed with
`Directions to Award Disgorgement
`Del Monte Is Also Entitled to a Disgorgement Award for
` Wrongful Sales between the Date of the Final Award and
`
`the Date the Final Judgment Was Entered
`
`
`C.
`
`INPROTSA’s Officers, Jorge Gurria and Manuel Gurria,
`Should Be Held in Contempt
`VIII. CONCLUSION
`IX. CERTIFICATE OF COMPLIANCE WITH TYPE-VOLUME
`LIMIT, TYPEFACE REQUIREMENTS, AND TYPE-STYLE
`REQUIREMENTS
`X. CERTIFICATE OF SERVICE
`
`
`Page
`
`
`41
`
`42
`
`50
`
`52
`54
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`55
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`
`
`vii
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`
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`
`
`USCA11 Case: 21-13059 Date Filed: 10/18/2021 Page: 9 of 70
`
`TABLE OF CITATIONS
`
`Cases
`
` Page(s)
`
`* Citations marked with an asterisk are those upon which Appellee
`principally relies.
`
`Abbott Labs. v. Unlimited Beverages, Inc.,
`218 F.3d 1238 (11th Cir. 2000) *
`
`AIG Baker Sterling Heights, LLC v. Am. Multi-Cinema, Inc.,
`579 F.3d 1268 (11th Cir. 2009)
`
`American Airlines, Inc. v. Allied Pilots Assoc.,
`228 F.3d 574 (5th Cir. 2000)
`
`Campbell’s Foliage, Inc. v. Fed. Crop Ins. Corp.,
`562 F. App’x 828 (11th Cir. 2014)
`
`Canterbury Belts Ltd. v. Lane Walker Rudkin, Ltd.,
`1990 WL 106846 (S.D.N.Y. Jul. 23, 1990)
`
`Certified Midwest, Inc. v. Local Union No. 738,
`Int’l Brotherhood of Teamsters,
`1987 WL 17470 (N.D. Ill. Sep. 18, 1987) *
`
`Chicago Truck Drivers v. Bhd. Lab. Leasing,
`207 F.3d 500 (8th Cir. 2000)
`
`Citronelle-Mobile Gaterhin, Inc. v. Watkins,
`943 F.2d 1297 (11th Cir. 1991)
`
`Clairson Int’l Corp. v. Master Tool Co., Inc.,
`1986 WL 84374 (S.D. Fla. Feb. 4, 1986)
`
`CVS Health Corp. v. Vividus, LLC,
`878 F.3d 703 (9th Cir. 2017)
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`passim
`
`43
`
`51
`
`48
`
`26
`
`46
`
`52
`
`24
`
`25
`
`20
`
`viii
`
`
`
`USCA11 Case: 21-13059 Date Filed: 10/18/2021 Page: 10 of 70
`
`TABLE OF CITATIONS
`
`Cases
`
` Page(s)
`
`Electrical Workers Pension Trust Fund of Local
`Union #58 v. Gary’s Electric Service Co.,
`340 F.3d 373 (6th Cir. 2003)
`
`ePlus Inc. v. Lawson Software, Inc.,
`946 F. Supp. 2d 449 (E.D. Va. 2013)
`
`F.T.C. v. Garden of Life, Inc.,
`516 F. App’x 852 (11th Cir. 2013)
`
`F.T.C. v. Leshin,
`618 F.3d 1221 (11th Cir. 2010) *
`
`F.T.C. v. Leshin,
`2011 WL 13134194 (S.D. Fla. Nov. 15, 2011),
`adopted, 2012 WL 12892784 (S.D. Fla. Feb. 16,
`2012), aff’d, 719 F.3d 1227 (11th Cir. 2013)
`
`F.T.C. v. Natl. Urological Group, Inc.,
`786 F. App’x 947 (11th Cir. 2019)
`
` F.T.C. v. RCA Credit Servs., LLC,
`2011 WL 5924969 (M.D. Fla. Oct. 5, 2011)
`
`F.T.C. v. Wash. Data Res., Inc.,
`704 F.3d 1323 (11th Cir. 2013)
`
`Falls Stamping & Welding Co. v. Int’l Union, United
`Automobile, Aircraft & Agriculture Implement Workers
`of America,
`1978 WL 14034 (N.D. Ohio Sep. 18, 1978), aff’d,
`667 F.2d 1026 (6th Cir. 1981)
`
`Garmon Corp. v. Healthypets, Inc.,
`2018 WL 4944865 (C.D. Cal. Oct. 10, 2018)
`
`
`ix
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`51, 52
`
`40
`
`24
`
`passim
`
`27
`
`20
`
`25, 34
`
`34
`
`46
`
`26
`
`
`
`USCA11 Case: 21-13059 Date Filed: 10/18/2021 Page: 11 of 70
`
`TABLE OF CITATIONS
`
`Cases
`
` Page(s)
`
`Gen’l Star Indem. Co. v. Triumph Hous. Mgmt., LLC,
`855 F. App’x 599 (11th Cir. 2021)
`
`Guyana Tel. & Tel. Co., Ltd v. Melbourne Int’l Comms., Ltd.,
`329 F.3d 1241 (11th Cir. 2003) *
`
`Howard Johnson Co., Inc. v. Khimani,
`892 F.2d 1512 (11th Cir. 1990) *
`
`HPC US Fund 1, LP v. Wood,
`2015 WL 11667590 (S.D. Fla. Feb. 23, 2015)
`
`In re Chase & Sanborn Corp.,
`872 F.2d 397 (11th Cir. 1989)
`
`Inversiones y Procesadora Tropical INPROTSA, S.A.
`v. Del Monte Int’l GmbH,
`921 F.3d 1291 (11th Cir. 2019), cert. denied, 140 S. Ct.
`124 (2019)
`
`Inversiones y Procesadora Tropical INPROTSA, S.A.
`v. Del Monte Int’l GmbH,
`2016 WL 10568064 (S.D. Fla. Dec. 6, 2016)
`
`Inversiones y Procesadora Tropical INPROTSA, S.A.
`v. Del Monte Int’l GmbH,
`783 F. App’x 972 (11th Cir. 2019)
`
`Klein-Becker USA, LLC v. Englert,
`711 F.3d 1153 (10th Cir. 2013)
`
`Leman v. Krentler-Arnold Hing Last Co.,
`284 U.S. 448 (1932) *
`
`Liu v. S.E.C.,
`140 S. Ct. 1936 (2020) *
`
`x
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`2
`
`29, 30
`
`25, 40, 41
`
`25
`
`39
`
`1, 6, 7
`
`8
`
`8
`
`36
`
`passim
`
`passim
`
`
`
`USCA11 Case: 21-13059 Date Filed: 10/18/2021 Page: 12 of 70
`
`TABLE OF CITATIONS
`
`Cases
`
` Page(s)
`
`
`Manhattan Indus., Inc. v. Sweater Bee by Banff, Ltd.,
`885 F.2d 1 (2d Cir. 1989) *
`
`Marcus v. Allied World Ins. Co.,
`384 F. Supp. 3d 115 (D. Me. 2019)
`
`Marion Mfg. Co. v. Long,
`588 F.2d 538 (6th Cir. 1978) *
`
`Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc.,
`473 U.S. 614 (1985)
`
`Montage Grp., Ltd. v. Athle-Tech Computer Sys., Inc.,
`889 So. 2d 180 (Fla. 2d DCA 2004)
`
`Parsons & Whittemore Alabama Mach. and Services
`Corp. v. Yeargin Const. Co., Inc.,
`744 F.2d 1482 (11th Cir. 1984)
`
`Reynolds v. Roberts,
`207 F.3d 1288 (11th Cir. 2000)
`
`Robert Lewis Rosen Assocs., Ltd. v. Webb,
`2005 WL 1308942 (S.D.N.Y. Jun. 1, 2005), aff’d, 473
`F.3d 498 (2d Cir. 2007)
`
`Root v. Railway Co.,
`105 U.S. 189 (1882)
`
`S.E.C. v. AmeriFirst Funding, Inc.,
`2008 WL 1959843 (N.D. Tex. May 5, 2008)
`
`S.E.C. v. Calvo,
`378 F.3d 1211 (11th Cir. 2004)
`
`
`xi
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`passim
`
`27
`
`46
`
`48
`
`30
`
`43
`
`23
`
`46
`
`29, 33
`
`37
`
`41
`
`
`
`USCA11 Case: 21-13059 Date Filed: 10/18/2021 Page: 13 of 70
`
`TABLE OF CITATIONS
`
`Cases
`
` Page(s)
`
`S.E.C. v. Fowler,
`6 F.4th 255 (2d Cir. 2021)
`
`S.E.C. v. JT Wallenbrock & Assocs.,
`440 F.3d 1109 (9th Cir. 2006)
`
`S.E.C. v. Liu,
`2021 WL 2374248 (C.D. Cal. June 7, 2021)
`
`S.E.C. v. Liu,
`851 F. App’x 665 (9th Cir. 2021)
`
`S.E.C. v. Luna,
`2014 WL 2960451 (D. Nev. Jun. 27, 2014)
`
`Sheet Metal Workers Int’l Assoc., Local No. 18
`v. Household Utils., Inc.,
`638 F. Supp. 177 (E.D. Wisc. 1986)
`
`Stryker Corp. v. Prickett,
`2016 WL 4433679 (W.D. Mich. Jul 22, 2016),
`adopted, 2016 WL 4415041 (W.D. Mich. Aug. 19, 2016)
`
`THI of New Mexico at Hobbs Ctr., LLC v. Patton,
`741 F.3d 1162 (10th Cir. 2014)
`
`Talk Fusion, Inc. v. Burling,
`2016 WL 4527361 (M.D. Fla. Aug. 10, 2016),
`adopted, 2016 WL 4507981 (M.D. Fla. Aug. 29, 2016)
`
`Tom James Co. v. Morgan,
`141 F. App’x 894 (11th Cir. 2005) *
`
`U.S. Commodity Futures Trading Comm’n v. Tayeh,
`848 F. App’x 827 (11th Cir. 2021) *
`
`
`xii
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`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`37
`
`34
`
`28
`
`27
`
`37
`
`46
`
`26, 37
`
`48
`
`25
`
`passim
`
`33, 34, 36
`
`
`
`USCA11 Case: 21-13059 Date Filed: 10/18/2021 Page: 14 of 70
`
`TABLE OF CITATIONS
`
`Cases
`
`U.S. Commodity Futures Trading Comm’n v. Escobio,
`946 F.3d 1242 (11th Cir. 2020)
`
`U.S. v. City of Miami,
`195 F.3d 1292 (11th Cir. 1999)
`
`U.S. v. Fleischman,
`339 U.S. 349 (1950)
`
`U.S. v. RaPower-1, LLC,
`960 F.3d 1240 (10th Cir. 2020)
`
`Wartsila Finland OY v. Duke Capital LLC,
`518 F.3d 287 (5th Cir. 2008) *
`
`Zeiler v. Deitsch,
`500 F.3d 157 (2d Cir. 2007) *
`
`
`
`
` Page(s)
`
`
`
`
`
`
`
`
`
`
`
`
`
`1
`
`24
`
`51
`
`34
`
`44
`
`44
`
`Statutes and Other Authorities
`
` Page(s)
`
`§ 78u(d)(5) of the Securities Exchange Act of 1934
`
`9 U.S.C. § 13 *
`
`9 U.S.C. § 203
`
`9 U.S.C. § 205
`
`28 U.S.C. § 1291
`
`28 U.S.C. § 2107(a)
`
`Federal Arbitration Act, 9 U.S.C. § 1, et seq.
`
`
`xiii
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`28
`
`passim
`
`1
`
`1
`
`1
`
`1
`
`passim
`
`
`
`USCA11 Case: 21-13059 Date Filed: 10/18/2021 Page: 15 of 70
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`Statutes and Other Authorities
`
` Page(s)
`
`Fed. R. App. P. 34(a)(2)
`
`Fed. R. App. P. 4(a)(1)(A)
`
`Fed. R. Civ. P. 65(d)(2)(B)
`
`11th Cir. R. 28-1(c)
`
`Florida Deceptive and Unfair Trade Practices Act, §§ 501.201-213
`Fla. Stat.
`
`§ 51 of the Restatement (Third) of Restitution and Unjust
`Enrichment (2010) *
`
`
`
`
`
`
`
`
`
`
`
`
`
`iv
`
`1
`
`50
`
`4
`
`30
`
`passim
`
`xiv
`
`
`
`
`
`
`
`USCA11 Case: 21-13059 Date Filed: 10/18/2021 Page: 16 of 70
`
`I.
`
`JURISDICTIONAL STATEMENT
`
`The District Court had subject matter jurisdiction over this action pursuant to
`
`9 U.S.C. § 203 and 9 U.S.C. § 205. See Inversiones y Procesadora Tropical
`
`INPROTSA, S.A. v. Del Monte Int’l GmbH, 921 F.3d 1291, 1300 (11th Cir. 2019).
`
`
`
`Appellant, Del Monte International GmbH’s (“Del Monte”), notices of appeal
`
`filed on September 7, 2021, ECF-305,1 and September 8, 2021, ECF-307,
`
`concerning the District Court’s August 10, 2021 Order Adopting Remaining
`
`Portions of Magistrate Judge Louis’s July 16, 2020 Report and Recommendation
`
`and Order Finding Petitioner in Contempt, ECF-304 & 306, were timely under Fed.
`
`R. App. P. 4(a)(1)(A) and 28 U.S.C. § 2107(a) because they were filed within 30
`
`days of entry of the August 10, 2021 order. This Court has appellate jurisdiction
`
`pursuant to 28 U.S.C. § 1291 because the August 10, 2021 final order of contempt
`
`under review, ECF-304, 306, involves both a finding of contempt and the imposition
`
`of a noncontingent contempt sanction. U.S. Commodity Futures Trading Comm’n
`
`v. Escobio, 946 F.3d 1242, 1248-49 (11th Cir. 2020).
`
`
`
`The notices of appeal concerning the District Court’s March 18, 2019 Order
`
`Adopting Magistrate Judge’s Report and Recommendation and Notice to Appear,
`
`
`1 References to the docket entries in the District Court shall be abbreviated
`“ECF-___.”
`
`1
`
`
`
`USCA11 Case: 21-13059 Date Filed: 10/18/2021 Page: 17 of 70
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`
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`ECF-200, were timely because the March 18, 2019 Order was non-final and non-
`
`appealable when it was entered and did not become subject to appellate review until
`
`it merged into the District Court’s order of contempt entered on August 10, 2021
`
`final. Gen’l Star Indem. Co. v. Triumph Hous. Mgmt., LLC, 855 F. App’x 599,
`
`601-02 (11th Cir. 2021) (“when a district court enters a final judgment, ‘all prior
`
`non-final orders and rulings which produced the judgment’ are merged into the
`
`judgment and subject to review on appeal.”). See also Del Monte’s Brief on
`
`Jurisdiction filed on October 15, 2021.
`
`II.
`
`INTRODUCTION
`
`
`
`This appeal involves Del Monte’s continuing effort over the last eight years
`
`to hold Appellee, Inversiones y Procesadora Tropical INPROTSA, S.A.
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`(“INPROTSA”), accountable for its blatant refusal to comply in any manner with
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`the restrictive covenants of a 2001 Pineapple Sales Agreement (“Agreement”), two
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`injunctions imposed by an arbitral Tribunal enforcing the restrictive covenants, and
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`a final judgment of the District Court adopting the two injunctions.
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`
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`Pursuant to the Agreement, Del Monte provided INPROTSA with
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`approximately 61 million scarce and expensive “MD-2” variety pineapple seeds
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`(valued in excess of $25 million) and extensive technical expertise to transition
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`INPROTSA’s Costa Rican pineapple plantation from an obsolete variety called
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`2
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`
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`USCA11 Case: 21-13059 Date Filed: 10/18/2021 Page: 18 of 70
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`
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`“Champaka” to an extra sweet variety developed by Del Monte called the “MD-2”
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`that is sold in supermarkets throughout the world today. In exchange for Del
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`Monte’s $25 million investment, INPROTSA agreed that, after the Agreement
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`expired, it would either return to Del Monte or destroy all MD-2 vegetative materials
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`(including all MD-2 pineapples) on its plantations derived from Del Monte’s MD-2
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`seeds, and it would not sell any of the pineapples grown from the MD-2 vegetative
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`material to third parties until it complied with its obligation to destroy or return the
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`MD-2 plant stock.
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`
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`The Agreement expired by its terms in December 2013. Despite reaping
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`approximately $200 million in sales revenue from Del Monte’s MD-2 seeds over the
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`life of the Agreement and receiving the benefit of its bargain, INPROTSA never
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`complied with the Agreement’s post-termination restrictive covenants, thereby
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`denying Del Monte the benefit of its bargain.
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`
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`Del Monte sued INPROTSA in arbitration and obtained a Final Arbitral
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`Award in June 2016 (“Final Award”) requiring INPROTSA, inter alia, to destroy
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`93% of the MD-2 vegetative material on its plantations (the “Destruction
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`Injunction”), enjoining INPROTSA from selling 93% of its MD-2 pineapple
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`production to third parties (the “Sales Injunction”), and ordering INPROTSA to
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`disgorge $26 million in gross revenues that INPROTSA received from sales in
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`violation of the Agreement’s restrictive covenant prohibiting sales of MD-2
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`3
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`USCA11 Case: 21-13059 Date Filed: 10/18/2021 Page: 19 of 70
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`pineapples to third parties.
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`
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`Instead of complying with the two injunctions imposed by the arbitral
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`Tribunal, INPROTSA, at the direction of its executive officers, Jorge Luis Gurria
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`Hernandez (“Jorge Gurria”) and Manuel Gurria Ordonez (“Manuel Gurria”), made
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`the strategic decision to continue selling Del Monte’s MD-2 pineapples to third
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`parties and pocketing all of the ill-gotten gains.
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`
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`After the District Court rejected INPROTSA’s frivolous petition to vacate the
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`Final Award and its equally frivolous opposition to the Award’s confirmation and
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`sanctioned INPROTSA for raising bad faith arguments, which this Court affirmed
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`in all respects, INPROTSA continued to sell pineapples cultivated from Del Monte’s
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`MD-2 plant stock to third parties in violation of the Sales Injunction. INPROTSA
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`pocketed $39,732,469 in ill-gotten revenues from prohibited pineapple sales since
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`the Final Award was entered and more than $126 million since the Agreement
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`expired.
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`
`
`Which brings us to this appeal. Del Monte moved to hold INPROTSA and
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`the Gurrias in contempt for, inter alia, blatantly violating the Sales Injunction. The
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`District Court held INPROTSA in contempt, but held that it was without legal
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`authority to (i) award damages or disgorgement to Del Monte arising from
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`INPROTSA’s improper sales of MD-2 pineapples after the issuance of the Final
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`Award but before entry of the Final Judgment confirming the Award or (ii) require
`
`4
`
`
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`
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`INPROTSA and the Gurrias to disgorge to Del Monte the ill-gotten revenues derived
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`from their violation of the Sales Injunction after the District Court entered Final
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`Judgment, finding disgorgement would constitute improper “punishment” for
`
`INPROTSA’s contempt as opposed to lawful compensation to Del Monte.
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`
`
`The District Court’s refusal to impose any compensatory fines against
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`INPROTSA and the Gurrias was error. The District Court’s holding is in
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`contravention of the Federal Arbitration Act and the binding precedent from this
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`Court and the Supreme Court, and rewards INPROTSA’s and the Gurrias’ contempt
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`of a federal court’s injunctions and final judgment. The District Court’s refusal to
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`impose a compensatory fine or award damages against INPROTSA and the Gurrias
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`has allowed them to keep $39.7 million in sales revenue collected in violation of the
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`Sales Injunction since the issuance of the Final Award. The District Court’s order
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`should be reversed, and INPROTSA and the Gurrias should be required to disgorge
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`their ill-gotten gains and permit Del Monte to receive the benefits of its bargain, its
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`arbitration victory, and the Final Judgment.
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`III.
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`STATEMENT OF THE ISSUES
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`
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`1. Whether the District Court erred, after holding INPROTSA in
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`contempt, by refusing to require INPROTSA to disgorge $16,373,684 in ill-gotten
`
`5
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`
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`USCA11 Case: 21-13059 Date Filed: 10/18/2021 Page: 21 of 70
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`
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`revenues collected on sales of MD-2 pineapples made in violation of the Sales
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`Injunction after entry of the District Court’s Final Judgment.
`
`
`
`2. Whether the District Court erred, after holding INPROTSA in
`
`contempt, by refusing to require INPROTSA to disgorge $23,358,785 in ill-gotten
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`revenues collected on sales of MD-2 pineapples in violation of the Sales Injunction
`
`between the date of Final Award and the date of the Final Judgment.
`
`
`
`3.
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` Whether the District Court erred by failing to expressly hold
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`INPROTSA’s executive officers, Jorge Gurria and Manuel Gurria, in contempt for
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`orchestrating INPROTSA’s violation of the Sales Injunction.
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`IV.
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`STATEMENT OF THE FACTS AND COURSE OF PROCEEDINGS
`
`A.
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`Events Prior to Del Monte’s Motion to Show Cause
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`This Court is no stranger to the parties’ dispute, which has involved four
`
`
`
`
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`separate appeals to this Court, including this one. For brevity’s sake, Del Monte will
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`not repeat the full history of the parties’ dispute leading up to Del Monte’s Motion
`
`to Show Cause, which is the subject of this appeal. Rather, Del Monte refers the
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`Court to its April 23, 2019 opinion, Inversiones y Procesadora Tropical INPROTSA,
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`S.A. v. Del Monte Int’l GmbH, 921 F.3d 1291 (11th Cir. 2019) cert. denied, 140 S.
`
`Ct. 124 (2019), and highlights the following facts:
`
`•
`
`On June 10, 2016, an arbitral Tribunal (hereinafter, “Tribunal”) of the
`
`6
`
`
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`USCA11 Case: 21-13059 Date Filed: 10/18/2021 Page: 22 of 70
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`
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`International Chamber of Commerce issued the Final Award in favor of Del Monte
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`and against INPROTSA. ECF-1, Ex. 6. The Final Award enforced the
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`post-termination restrictive covenants of a Pineapple Sales Agreement that Del
`
`Monte bargained for in exchange for providing INPROTSA with approximately 61
`
`million scarce and expensive “MD-2” variety pineapple seeds (worth in excess of
`
`$25 million). Inversiones, 921 F.2d at 1294-95; ECF-1, 90-140.
`
`•
`
`Summarizing the Final Award, this Court noted that the Tribunal
`
`awarded Del Monte specific performance, injunctive relief, damages,
`interest, costs, and attorney’s fees. More specifically, it required
`INPROTSA to either return or destroy 93% of the MD-2 vegetative
`materials on its plantation – which the tribunal found were attributable
`to the seeds provided by Del Monte. It also enjoined INPROTSA from
`selling 93% of its MD-2 pineapples to third parties until it complied
`with its obligation to destroy or return the MD-2 plant stock.2 With
`respect to damages, the tribunal determined that, under Florida law,
`Del Monte was entitled to disgorgement of the money [$26.133
`million] INPROTSA received by selling the MD-2 pineapples to third
`parties in breach of the Agreement.
`
`Inversiones, 921 F.2d at 1296 (emphasis added).
`
`•
`
`The District Court denied INPROTSA’s petition to vacate the Final
`
`Award, ECF-24, confirmed the Final Award, ECF-47, entered Final Judgment in
`
`favor of Del Monte, ECF-52, and sanctioned INPROTSA for filing a frivolous
`
`
`2 The District Court referred to the Tribunal’s specific performance mandate to
`return or destroy MD-2 plant stock as the “Destruction Injunction” and the
`Tribunal’s permanent injunction against sales as the “Sales Injunction.” ECF-304,
`at 2. Del Monte will use the same shorthand references in this brief.
`
`7
`
`
`
`USCA11 Case: 21-13059 Date Filed: 10/18/2021 Page: 23 of 70
`
`
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`petition to vacate and objections to confirmation. Inversiones y Procesadora
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`Tropical INPROTSA, S.A. v. Del Monte Int’l GmbH, 2016 WL 10568064 (S.D. Fla.
`
`Dec. 6, 2016); ECF-161.
`
`•
`
`This Court affirmed the District Court’s rulings in all respects.
`
`Inversiones, 921 F.3d at 1306; Inversiones y Procesadora Tropical INPROTSA, S.A.
`
`v. Del Monte Int’l GmbH, 783 F. App’x 972, 974 (11th Cir. 2019) (affirming
`
`imposition of sanctions).
`
`•
`
` The Costa Rican Supreme Court confirmed the Final Award on
`
`December 19, 2020. ECF-240, 240-1.
`
`
`
`
`
`
`B.
`
`
`INPROTSA’s Violation of the Destruction Injunction and Sales
`Injunction
`
`Rather than comply with the Final Award or the Final Judgment, INPROTSA
`
`elected deliberately to violate the Sales Injunction and Destruction Injunction and
`
`wrongfully collected more than $39.7 million in sales revenues between the issuance
`
`of the Final Award and the entry of Final Judgment. ECF-136, Table 6. INPROTSA
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`also refused to destroy or return 93% of Del Monte’s MD-2 “vegetative materials
`
`existing on INPROTSA’s farm.” ECF-191, at 24, ¶¶ 6-9.
`
`
`
`After the Final Award was entered, and one week before INPROTSA filed its
`
`frivolous petition to vacate the Final Award, INPROTSA entered into a series of
`
`sham agreements with Productora y Exportadora de Frutas Verduras Fruver S.A.
`
`(“Fruver”), pursuant to which INPROTSA continued to cultivate MD-2 pineapples
`
`8
`
`
`
`USCA11 Case: 21-13059 Date Filed: 10/18/2021 Page: 24 of 70
`
`
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`in violation of the Destruction Injunction and “sold its pineapples exclusively to
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`Fruver” in Costa Rica in violation of the Sales Injunction, which in turn sold the
`
`pineapples to INPROTSA’s customers, while INPROTSA received from Fruver the
`
`same income it would have received had it sold the fruit to INPROTSA’s customers
`
`directly. Fruver is owned by “a close family friend of Inprotsa’s officers, who
`
`purchased Fruver after being notified of the opportunity by [Jorge] Gurria
`
`Hernandez.” Id. at 24, ¶ 11; ECF-142, at 7 n.10; ECF-137, at 6-14. INPROTSA’s
`
`decision to violate the Sales and Destruction Injunctions was made knowingly by
`
`and with the approval of Jorge Gurria and Manuel Gurria. ECF-191, at 22, 26.
`
`
`
`
`
`
`C. Del Monte Moves to Hold INPROTSA
`
`and the Gurrias in Contempt
`
`On March 26, 2018, Del Monte moved for the entry of an order to show cause
`
`why INPROTSA, Jorge Gurria and Manuel Gurria should not be held in contempt
`
`(hereinafter, “Motion to Show Cause”) for willfully violating the Destruction and
`
`Sales Injunctions and, inter alia, for the imposition of “a compensatory fine in the
`
`amount of INPROTSA’s gross earnings from those sales.” ECF-137.
`
`
`
`INPROTSA’s sales records produced in discovery showed that it made
`
`millions of dollars of MD-2 pineapple sales in violation of the Sales Injunction.
`
`INPROTSA received $23,358,785 in revenues from improper sales of pineapples in
`
`excess of 7% of production from June 2016 to May 2017 (the date of the Final Award
`
`to the date of Award confirmation) and $16,373,684 in revenues from improper sales
`
`9
`
`
`
`USCA11 Case: 21-13059 Date Filed: 10/18/2021 Page: 25 of 70
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`
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`of pineapples in excess of 7% of production from May 2017 through September
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`2018 (when 93% of the MD-2 vegetative stock was destroyed). ECF-179, ¶¶ 2-3,
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`Table 7; First R&R, at 25, ¶ 13, ECF 191. INPROTSA does not dispute – and has
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`conceded – these sales figures. June 2, 2020 Hr’g Tr., at 55:17-24, ECF-273.
`
`
`
`
`
`Jorge Gurria, INPROTSA’s President, testified that INPROTSA was violating
`
`the Sales Injunction because INPROTSA “‘needed to sell the fruit that Inprotsa was
`
`producing to comply with the commitments Inprotsa has in the operation it has in
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`Costa Rica.’” First R&R, at 22, ECF-191 (quoting March 2018 Jorge Gurria Dep.,
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`ECF-142-4 at 244:9-23).
`
`
`
`
`
`
`D. Del Monte’s Motion to Show Cause Is Referred to the
`
`Magistrate Judge for a Report and Recommendation
`
`On April 5, 2018, the District Court referred Del Monte’s Motion to Show
`
`Cause to the Magistrate Judge. ECF-131. After conducting an evidentiary hearing,
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`the Magistrate Judge issued a Report and Recommendation on January 24, 2019
`
`(hereinafter, “First R&R”), ECF-191 finding, inter alia, that:
`
`(i)
`
`INPROTSA violated the Destruction and Sales Injunctions from the
`
`time the Final Award was entered and continually thereafter, First
`
`R&R, at 21; 24-25, ¶¶ 5-14, ECF-191;
`
`(ii)
`
`the evidence presented by Del Monte was “sufficient to show violation
`
`of the [District] Court’s Final Judgment by proof that sales continued
`
`after the Court’s entry of Final Judgment in violation of the sales
`
`10
`
`
`
`USCA11 Case: 21-13059 Date Filed: 10/18/2021 Page: 26 of 70
`
`
`
`injunction,” id. at 22;
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`(iii) “Inprotsa had been making sales on pineapples since June 10, 2016,”
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`id. at 22;
`
`(iv) “from May 2, 2017 to September 30, 2018 ... Inprotsa made
`
`$16,373,684 in excess sales over the 7% maximum” allowed under the
`
`Sales Injunction, id. at 21;
`
`(v)
`
`“Inprotsa’s violation of the Award constitutes contempt of the Court’s
`
`Final Judgment,” id. at 22; and,
`
`(vi) INPROTSA and the Gurrias should be required to show cause why they
`
`should not be held in contempt “for failing to comply with the Court’s
`
`Final Judgment by making sales of MD-2 pineapples in violation of the
`
`[Sales Injunction].” Id. at 26.
`
`With respect to the compensatory disgorgement fine that Del Monte requested
`
`to be imposed against INPROTSA, the Magistrate Judge rejected INPROTSA’s
`
`argument “that contempt sanctions are not available … where Del Monte has not
`
`shown that it has sustained any actual losses,” First R&R, at 19, ECF-191:
`
`Here, Del Monte was damaged by loss of the benefit of its bargain
`with Inprotsa. The arbitration panel found that Inprotsa was supposed
`to have returned or destroyed all vegetative materials following the
`termination of the Agreement, and, because they breached this
`contractual provision, Inprotsa “must now account for the monies it
`improperly received” (Award at ¶ 108). To the same extent, Inprotsa’s
`continued sales of fruit after it was enjoined from keeping the
`contested fruit resulted in monies improperly received to the
`
`11
`
`
`
`USCA11 Case: 21-13059 Date Filed: 10/18/2021 Page: 27 of 70
`
`
`
`detriment of Del Monte. Accordingly, Del Monte’s contempt motion
`seeks relief available under this Court’s contempt powers.
`
`First R&R, at 20, ECF-191 (emphasis supplied).
`
`With regard to Del Monte’s request for an award of disgorgement damages
`
`caused by INPROTSA’s sale of MD-2 pineapples between the date of the Final
`
`Award (June 10, 2016) and the date of the Final Judgment (May 17, 2017), the
`
`Magistrate Judge recommended that Del Monte’s request be denied:
`
`This Court’s authority to enforce the Award’s injunction provisions is
`rooted in the fact that it confirmed the Award and entered Final
`Judgment subsuming the award on May 17, 2017. Del Monte relies on
`a series of cases for the proposition that a court has the discretion to
`enforce its judgments by awarding damages for conduct occurring after
`entry of an arbitral award; notably, however, none of these cases [cited
`by Del Monte] involve a court awarding damages for violation of an
`injunction that occurred prior to confirmation [of] the award and entry
`of final judgment.... Accordingly, the undersigned recommends
`denying Del Monte’s request for an award of post-award damages.
`
`
`First R&R, at 26, ECF-191.
`
`E.
`
`The District Court Adopts the First R&R in Its Entirety
`
`On March 18, 2019, the District Court
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