                                                                                                                           Opinions of the United
2008 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


5-21-2008

J&S Dev Corp v. Montrose Global
Precedential or Non-Precedential: Non-Precedential

Docket No. 06-3800




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                                                NOT PRECEDENTIAL

       UNITED STATES COURT OF APPEALS
            FOR THE THIRD CIRCUIT




          Nos. 06-3800/4635/4636/4637/4919


     J&S DEVELOPMENT CORPORATION;
BRADFORD WELDING & TRUCK EQUIPMENT, INC.

                             v.

       MONTROSE GLOBAL ASSETS, INC.;
      ST. CROIX RENAISSANCE GROUP INC.

             St. Croix Renaissance Group, LLP,

                                Appellant in 06-3800/4636/4637

        (Division of St. Croix No. 06-cv-00094)

                          and

       MONTROSE GLOBAL ASSETS, INC.;
      ST. CROIX RENAISSANCE GROUP, LLP.

               Montrose Global Assets, Inc.

                                  Appellant in 06-4635 and 4919




 On Appeal from the District Court of the Virgin Islands
                 (Division of St. Croix)
           (District Court No. 06-cv-00094)
     Chief District Judge: Hon. Raymond L. Finch
                            Argued on December 10, 2007


               Before: SMITH, NYGAARD and ROTH, Circuit Judges

                               (Opinion filed: May 21, 2008)

Joseph B. Arellano, Esquire (Argued)
Campbell, Arellano & Rich
4 A & B Kongens Gade
P. O. Box 11899
Charlotte Amalie, St. Thomas
USVI 00801

                   Counsel for Appellee J & S Development Corporation




Joseph P. Klock, Jr. Esquire (Argued)
JuanCarlos Antorcha, Esquire
Epstein, Becker & Green, P. C.
200 South Biscayne Boulevard
Suite 4300, Wachovia Financial Building
Miami, FL 33131

Joel H. Holt, Esquire
Law Offices of Joel H. Holt
2132 Company Street, Suite 2
Christiansted, St. Croix
USVI, 00820

                   Counsel for Appellant St. Croix Renaissance Group, LLLP




                                            2
Francis J. D’Eramo
Nichols, Newman, Logan & D’Eramo
1131 King Street, Suite 204
Christiansted, St. Croix
USVI, 00820

                     Counsel for Appellant St. Croix Renaissance Group, LLP


Kenneth A. Novikoff, Esquire
Rivkin Radler, LLP
Christiansted, St. Croix
USVI, 00820

Warren B. Cole, Esquire
Hunter, Cole & Bennett
1138 King Street, Suite 301
Christiansted, St. Croix
USVI, 00820

                     Counsel for Appellant Montrose Global Assets




                                      OPINION


ROTH, Circuit Judge:

       St. Croix Renaissance Group, LLP (SCRG) appeals the imposition of a "Preservation

of Evidence" Order (Preservation Order) that they claim constituted a preliminary injunction.

The Preservation Order does appear to be an invalid preliminary injunction. At this point,

however, the Preservation Order has accomplished its intended purpose.




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I. BACKGROUND

       Because we write primarily for the parties, we will only briefly revisit the facts here.

The Preservation Order was issued in a suit concerning the dismantling of an aluminum

processing plant located on property owned by SCRG. J & S Development Corporation and

their co-plaintiff, Bradford Welding & Truck Equipment, Inc. (J & S), claim that they were

retained to conduct the dismantling and that SCRG then reneged on the deal. The damages

created by the alleged breach of contract depend on the value of the scrap metal that could

be recovered from the plant.

       J & S filed a complaint for damages against SCRG on July 18, 2006. On July 26,

2006, the District Court issued the Preservation Order requiring that an inventory be

performed of the former aluminum plant that was the subject of the lawsuit and requiring that

no dismantling, modification, demolition or removal of any structures within the plant be

conducted until the inventory was completed.

       SCRG sought an emergency stay of the Preservation Order in this Court. We granted

the motion on November 3, 2006, and ordered the matter remanded to the Magistrate Judge

to oversee the completion of the inventory within thirty days. The parties had a conference

with the Magistrate Judge on November 9 at which they agreed on the company to perform

the inventory and on a splitting of the costs of the inventory. The Magistrate Judge issued

an order confirming this arrangement on November 13. SCRG did not contest the Magistrate

Judge's order, and the inventory was timely completed. SCRG continues to pursue this



                                              4
appeal of the grant of the Preservation Order, arguing that it is an improper injunction.

       We have jurisdiction over this appeal pursuant to 28 U.S.C. § 1291(a)(1) because we

find that the Preservation Order was an injunction, albeit an improperly constituted one.1

II. DISCUSSION

       The central question in this case is whether the Preservation Order was an injunction.

The rule in the Third Circuit is that an order is an injunction if it is directed to a party,

enforceable by contempt, and designed to accord or protect some or all of the substantive

relief sought by a complaint in more than a temporary fashion. Cohen v. Bd. of Trs. of the

Univ. of Med. & Dentistry of N.J., 867 F.2d 1455, 1465 n. 9 (3d Cir.1989) (en banc); see also

Saudi Basic Industries Corp. v. Exxon Corp., 364 F.3d 106, 110 (3d Cir. 2004).

       The Preliminary Order was directed at a party and enforceable (and in fact enforced)

by contempt. It was aimed at preserving the plaintiffs’ ability to calculate damages, the

central component of the relief sought. Its open-ended nature made it more than temporary.

Accordingly, the Preliminary Order was in fact intended to be an injunction.

       In order to have been properly issued as an injunction, however, the Preservation

Order would have to have certain infirmities remedied. Most notably, no security was given

as is required by Rule 65(c) of the Federal Rules of Civil Procedure (“The court may issue

a preliminary injunction or a temporary restraining order only if the movant gives security




  1
   If the Preservation Order had been merely a non-injunctive evidence preservation order,
then it would not be eligible for interlocutory appeal.

                                             5
in an amount that the court considers proper to pay the costs and damages sustained by any

party found to have been wrongfully enjoined or restrained”).

       Nevertheless, we conclude that there is no need to cure the deficiencies because the

Preservation Order is no longer in effect on its own terms as the inventory it required has

been completed. Moreover, because the taking of the inventory has been completed, we will

vacate the Orders of the District Court of September 8, 2006 (two orders), and of October

23, 2006, because these orders are no longer necessary to accomplish the taking of the

inventory. In particular, we will vacate the sanctions imposed by these orders.

III. CONCLUSION

       For the foregoing reasons, we will vacate the Preservation Order of July 26, 2006, and

the Orders of September 8 and October 23, 2006, and remand this case to the District Court

for further proceedings.




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