Securities and Exchange Commission v. Joseph Cole Barleta

[DO NOT PUBLISH]
In the
United States Court of Appeals
For the Eleventh Circuit
____________________
No. 23-11927
Non-Argument Calendar
____________________
SECURITIES AND EXCHANGE COMMISSION,
Plaintiff-Appellee,
ALAN J. CANDELL, et al.,
Intervenor Plaintiffs,
RYAN K. STUMPHAUZER,
Court Appointed Receiver for Complete Business Solutions, Inc.
and other receivership entities,
Interested Party-Appellee,
versus
COMPLETE BUSINESS SOLUTIONS GROUP, INC.,
d.b.a. Par Funding, et al.,
Defendants,
JOSEPH COLE BARLETA,
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2 Opinion of the Court 23-11927
a.k.a. Joe Cole,
Defendant-Appellant,
FRED A. SCHWARTZ,
Consol. Defendant,
LEAD FUNDING II, LLC, et al.,
Intervenors.
____________________
Appeal from the United States District Court
for the Southern District of Florida
D.C. Docket No. 9:20-cv-81205-RAR
____________________
Before J ILL PRYOR , NEWSOM , and B RANCH, Circuit Judges.
PER CURIAM:
Joseph Cole Barleta (“Cole”) appeals the district court’s con-
tempt order and the accompanying sanctions levied against him.
That order emerged from a discovery dispute between Cole and
the Receivership created to control an entity for which Cole previ-
ously worked and served as an officer. On appeal, Cole makes two
main arguments challenging the contempt order and related sanc-
tions. First, he contends that the Receivership ceased to exist dur-
ing the litigation due to provisions in the Federal Debt Collection
Procedures Act and, accordingly, did not “have standing” to ask for
the contempt order and sanctions at issue here on appeal. Second,
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23-11927 Opinion of the Court 3
he asserts that the discovery dispute between him and the Receiv-
ership became “stale” before the district court granted the con-
tempt order. In the event we disagree, Cole also asks us to reduce
the sanctions amount imposed on him by the district court. After
careful review, we conclude that all of Cole’s arguments fail and
we thus affirm the district court’s order and sanctions.
I
The narrow issues presented in this appeal stem from a
broader securities fraud litigation involving Par Funding and asso-
ciated companies. At the outset of the litigation, the SEC asked the
district court to appoint a receiver to preserve the assets and rec-
ords of Par Funding and affiliated entities. The district court
granted this request and authorized the Receiver—among other
things—to collect financial records relating to the entities falling
under its purview. In the same order, the district court ordered
past and present officers and employees of the entities covered by
the Receivership to turn over such financial information.
Cole is one of those covered individuals. After Cole repeat-
edly refused to turn over documents sought by the Receiver—in-
cluding information requested pursuant to a granted motion to
compel—the district court held Cole in contempt. The district
court also found Cole’s reluctance to hand over the requested in-
formation sufficiently obstinate to issue sanctions against him.
On appeal, Cole challenges the validity of the contempt or-
der and the sanctions levied against him. First, he argues that the
Receivership ceased to exist before the district court issued the
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4 Opinion of the Court 23-11927
contempt order because of provisions in the FDCPA. Second, he
contends the discovery requests giving rise to the Receiver’s mo-
tion to compel were “stale,” and thus, the ensuing contempt order
was void. Third, he argues that the sanctions accompanying the
contempt order were invalid for similar reasons, and even if we
disagree, he asks us to reduce the sanctions awarded by the district
court.
II
We review the district court’s civil contempt findings under
an abuse of discretion standard. Citronelle-Mobile Gathering, Inc. v.
Watkins, 943 F.2d 1297, 1301 (11th Cir. 1991). “A district court
abuses its discretion if it applies an incorrect legal standard, applies
the law in an unreasonable or incorrect manner, follows improper
procedures in making a determination, or makes findings of fact
that are clearly erroneous.” Citizens for Police Accountability Pol.
Comm. v. Browning, 572 F.3d 1213, 1216–17 (11th Cir. 2009). We
review a district court order of sanctions under that same standard
of review. Barnes v. Dalton, 158 F.3d 1212, 1214 (11th Cir. 1998).
Cole first argues that the contempt order was invalid be-
cause provisions in the FDCPA effectively ended the Receivership.
For support, he points us primarily to 28 U.S.C. § 3103, which says
that “[a] receivership shall not continue past the entry of judg-
ment.” This argument is without merit. As other provisions in the
Act demonstrate, the FDCPA lays out procedure rules for debt col-
lection. 28 U.S.C. § 3001(a). The Receivership was not created to
collect a debt from Cole or, for that matter, anyone else on behalf
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23-11927 Opinion of the Court 5
of the United States. Instead, the district court appointed the Re-
ceiver at the request of the SEC to preserve assets and records be-
longing to companies subject to an ongoing enforcement action.
Accordingly, the FDCPA’s rules for ending a receivership after “en-
try of judgment” in § 3103 are irrelevant to this appeal, and Cole’s
argument that the Receivership lacked “standing” fails.
Cole next argues that the contempt order was illegitimate
because the discovery dispute giving rise to the contempt finding
was “stale.” In brief, Cole argues that the Receiver “abandoned”
its discovery requests. This argument likewise fails. The Receiver
initially requested documents and interrogatories on January 12,
2021. Cole never responded to the Receiver or objected to this re-
quest. The Receiver then asked Cole’s counsel for relevant infor-
mation again on February 21, 2022. Cole refused. After more back
and forth with Cole’s counsel, the Receiver filed a motion to com-
pel Cole to produce requested materials on March 19, 2022, which
the district court granted on April 29, 2022. The discovery saga
wore on, ultimately ending with the district court holding Cole in
contempt of court. We see no evidence in this timeline that the
Receiver ever “abandoned” its discovery requests.1 If anything, the
1 Cole’s references to district court decisions do not help his argument on this
front. In those cases, the discovery deadline was near or had passed, or the
requesting party had failed to move to compel. Here, by contrast, Cole does
not argue that the discovery end date was immediate or that it had passed.
And, given the facts of this case, it is clear that the Receivership had moved to
compel Cole to produce the relevant documents.
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record suggests any delays in the production of documents are due
to Cole’s recalcitrance.
Finally, Cole challenges the validity of the sanctions accom-
panying the district court’s contempt order as well as the amount
of sanctions awarded. While difficult to discern, Cole’s attack on
the legitimacy of the district court’s sanctions order appears to rely
mainly on his argument about the FDCPA’s applicability. For rea-
sons already explained, we conclude this argument lacks merit. In
any event, Cole fails to appreciate that the district court sanctioned
him for his broader practice of ignoring the court’s orders during
discovery, not just for making his FDCPA argument. Accordingly,
he has given us no reason to conclude that the district court abused
its discretion when it issued sanctions, either concerning its deci-
sion to issue sanctions in the first place or the specific amount of
attorneys’ fees awarded.
AFFIRMED.
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