United States District Court, E.D. Louisiana
ORPHEUM PROPERTY, INC.
COSCINA, ET AL.
ORDER AND REASONS
E. FALLON, United States District Judge
before the Court is Defendants Alfred Coscina and AF Coffee
Inc.'s motion for reconsideration, Rec. Doc. 19, of this
Court's March 28, 2018 Order and Reasons, which denied
Defendants' motion to dismiss for lack of jurisdiction
and request to transfer venue. In the alternative, Defendants
also request a certification for interlocutory appeal to the
Fifth Circuit on the issue of jurisdiction. Plaintiff Orpheum
Property, Inc. opposes Defendants' motion. Rec. Doc. 21.
Having considered the parties' arguments, submissions,
and applicable law, the Court now issues this Order and
derivative action arises from allegations of corporate
mismanagement and fraudulent activities, inter alia,
asserted by Plaintiff Orpheum Property, Inc.
(“Orpheum”) against Defendants Alfred F. Coscina
(“Coscina”) and Mr. Coscina's individual
company, AF Coffee, Inc. (“AF Coffee”). Plaintiff
Orpheum is a Delaware corporation with its principal place of
business in New Orleans, Louisiana. Rec. Doc. 1 at 2. Orpheum
appears as a derivative plaintiff as the sole member of
Coscina Brothers Coffee Company, LLC (“Coscina
Brothers”). Rec. Doc. 1 at 2. Defendant Alfred Coscina
is a resident of Hawaii and was President/Chief Operating
Officer of Coscina Brothers before his termination in 2016.
Rec. Doc. 1 at 2. Mr. Coscina's company, AF Coffee, is a
Hawaii corporation with its principal place of business in
Hawaii, and has been named as a defendant in the instant
litigation. Rec. Doc. 1 at 2.
chronicle began seven years ago. In January 2011, Defendant
Alfred Coscina formed Coscina Brothers, a company that
produced coffee products, in Honolulu, Hawaii. Rec. Doc. 1 at
3. In March 2011, Rampant Leon Financial Corporation
(“RLFC”), a Louisiana corporation with offices in
New Orleans purchased Coscina Brothers from Mr. Coscina.
Id. As part of the transaction, Mr. Coscina agreed
to continue working at Coscina Brothers as its
President/Chief Operating Officer. Id. In March
2013, RLFC sold Coscina Brothers to Orpheum, a Louisiana
corporation and the Plaintiff in this case. Id. Once
again, Mr. Coscina agreed to stay with the company as its
President/Chief Operating Officer. Id.
the 2011 transaction, however, Plaintiff asserts that
Defendant Mr. Coscina began to undermine the business and
finances of Coscina Brothers. Id. at 4. According to
Plaintiff, in June 2011, Mr. Coscina formed his own company,
AF Coffee, to import and export coffee products. Id.
Plaintiff claims that Mr. Coscina never informed it of this
action. Moreover, Plaintiff alleges that Mr. Coscina began
using his new company to broker green (raw) coffee beans that
Coscina Brothers had previously purchased directly from local
vendors. Id. Plaintiff further asserts that Mr.
Coscina then directed Coscina Brothers to purchase the green
coffee beans directly from AF Coffee at a higher price.
Plaintiff claims that Mr. Coscina wrongfully used Coscina
Brothers' funds to benefit AF Coffee. Id.
According to Plaintiff, Mr. Coscina opened a new bank account
in January 2015-in the name of Coscina Brothers-without
informing Orpheum. Id. at 5. Plaintiff asserts that
this account was in fact used to pay invoices for AF Coffee.
Id. Plaintiff further claims Mr. Coscina began
sending invoices in November 2015 from AF Coffee to customers
of Coscina Brothers for products sold by Coscina Brothers.
Id. Plaintiff represents that these customers were
unaware that the companies-Coscina Brothers and AF
Coffee-were separate and unrelated, and therefore sent their
payments to AF Coffee instead of Coscina Brothers.
Id. In late-2015, Plaintiff became aware that Mr.
Coscina was allegedly selling coffee beans from AF Coffee to
Coscina Brothers' customers in order to deprive the
company of income. Id. at 6.
spring 2016, Plaintiff avers that Coscina Brothers was unable
to pay its operating expenses and rent. Id. Mr.
Coscina was subsequently terminated from his position as
President/Chief Operating Officer of Coscina Brothers.
Id. Plaintiff asserts that due to the actions of Mr.
Coscina, Coscina Brothers stopped operating in June 2016.
Rec. Doc. 1 at 6. Nonetheless, Plaintiff states that Mr.
Coscina continues to take advantage of Coscina Brothers'
business and reputation. Rec. Doc. 1 at 6. For instance,
according to Plaintiff, Mr. Coscina took over Coscina
Brothers' website and rebranded it for AF Coffee. Rec.
Doc. 1 at 6. Therefore, on July 5, 2017, Plaintiff filed the
instant derivative action as the sole shareholder and member
of Coscina Brothers Coffee Company, LLC, seeking to recover
damages it suffered as a result of Mr. Coscina's alleged
fraudulent scheme. Rec. Doc. 1 at 1.
response to this lawsuit, Defendants filed a motion to
dismiss for failure to join a necessary party, lack of
subject matter jurisdiction, lack of personal jurisdiction,
improper venue, and failure to file a Rule 23.1 verification
required for a derivative action. See Rec. Doc. 9.
March 28, 2018, the Court denied Defendants' motion on
all grounds. Rec. Doc. 16. First, the Court agreed with
Defendants that Coscina Brothers, a Louisiana citizen, should
be a defendant for jurisdictional purposes. Nonetheless, the
Court recognized that joinder of Coscina Brothers as a
defendant would destroy diversity jurisdiction under U.S.C.
§ 1332(c)(1) because both Orpheum and Coscina Brothers
are Louisiana citizens. The imperative question then became
whether Coscina Brothers was an indispensable party that must
be joined under Rule 19(b). After examining the contours of
Rule 19(b), the Court found that Coscina Brothers need not be
joined as a party because none of the existing parties would
be prejudiced in its absence. Thus, diversity jurisdiction
and pertinent to Defendants' instant motion for
reconsideration, the Court held that it has personal
jurisdiction over Defendants Mr. Coscina and AF Coffee.
Applying Fifth Circuit jurisprudence on personal
jurisdiction, the ...