Antitrust Law Daily Wrap Up, ANTITRUST—M.D.N.C.: Expanded permanent injunction and civil contempt in bid-rigging case for injunction violations, (Mar 26, 2025)

By Seth Abrams, J.D., M.A.

Defendant was subject to an additional order that found him in civil contempt for failure to abide by a receivership order.

The federal district court in Greensboro, North Carolina held defendant Craig Brooksby in civil contempt for violation of a permanent injunction preventing him from acting with others to buy foreclosed real property. This holding of civil contempt for violation of the permanent injunction was in addition to a separate order finding Brooksby and other defendants in civil contempt for violation of a receivership order. The court, after holding Brooksby in civil contempt, expanded and extended the permanent injunction to force compliance. The court also imposed additional monthly reporting requirements on Brooksby (Williams v. Estates LLC, No. 1:19-cv-01076-CCE-JLW (M.D.N.C. Mar. 24, 2025)).

Background. Plaintiffs originally filed this action which alleged a bid-rigging conspiracy in violation of the Sherman Act. The conspiracy involved the purchase of foreclosed properties by members of The Estates, a limited liability company founded and run by Brooksby. In April 2022, a jury returned a verdict in favor of plaintiffs. In June 2022, the court entered a $1.2 million judgment against the defendants as well as a permanent injunction against Brooksby and other defendants. The injunction provided that, among other things, “Brooksby was prohibited from acting together or with any other person or entity to bid on, buy, or sell directly or indirectly any property obtained through a public real estate foreclosure auction anywhere in the United States for eight years.”

In October 2022, plaintiffs filed a motion for contempt against Brooksby. They contended that Brooksby had sold five properties in violation of the injunction. The court directed Brooksby to show cause as “why he should not be held in civil contempt.” In December 2022, the court found by clear and convincing evidence that Brooksby had violated the permanent injunction by “acting with others to sell real property bought at foreclosure auctions.” As a result, it held him in civil contempt and ordered Brooksby to produce the closing documents for the sales that were in violation of the injunction. The court also at this time appointed a receiver and directed him to take control of several defendants’ assets.

In August 2024, the plaintiffs filed another motion asking that Brooksby be held in civil contempt because of new violations of the permanent injunction. Plaintiffs relied on pleadings and evidence in a lawsuit filed by Soren LLC against Tomas Leal in Texas. The court held hearings in November 2024 and January 2025.

Civil contempt. Brooksby was found to be in violation of the permanent injunction in at least two ways. First, he “acted on behalf of Soren, LLC and with others... to buy real property... obtained by a third party through a public real estate foreclosure auction.” Second, he has acted with Soren to “buy real estate from other third parties who obtained the real property through a foreclosure sale.” In 2023, Brooksby spent “substantial time in Texas acting on behalf of Soren” and his W-2 showed a Texas address and that he earned at least $27,500 for his work with Soren. The court noted that the facts showed by clear and convincing evidence that Brooksby “violated the permanent injunction in his work with Soren.” Brooksby acted together with Soren in efforts to buy “property that had been obtained through a public real estate foreclosure auction.” Brooksby worked with Soren in “all parts of its business, including matters concerning foreclosed real property, in violation of the injunction.” It prohibits Brooksby from acting with others to buy property obtained through a foreclosure auction, “regardless of its purpose.” The court also noted that the injunction was broad, prohibiting both indirect and direct acts. It also found that Brooksby “exercised substantial decision-making authority at Soren” and that Brooksby knew he was violating the injunction. The court concluded that his work with Soren violated the permanent injunction, and it found Brooksby in contempt of court.

Remedy. The court noted that “finding an appropriate remedy to force compliance is challenging.” It found that incarceration does not fit these violations. The court concluded that extending and expanding the permanent injunction along with adding additional reporting requirements is the best way to force compliance considering Brooksby’s repeated and ongoing contempt. It first extended the duration of the relevant paragraphs of the permanent injunction from eight years to ten years. This was due to Brooksby’s repeated violations of the injunction during its first two years. It next expanded the injunction to prohibit Brooksby from “working for or with any other person or entity who is involved in any way with the purchase or sale of real property, including any family members.” The court also expanded the injunction by prohibiting “providing any services of any kind to or on behalf of person or entities who have had their homes or other real property foreclosed or are in the foreclosure process. Finally, it prevented Brooksby from “serving as a member, manager or organizer of any limited liability company, as an officer or director of any corporation, or otherwise holding any organizational position with any entity of any kind.” The court also removed limited exceptions to Brooksby’s participation in public real estate foreclosure auctions. The court also updated the reporting requirement providing that Brooksby make monthly declarations under oath to plaintiff’s counsel “identifying any income, gifts, or financial support of any kind.”

The Case is No. 1:19-cv-01076-CCE-JLW.

Judge: Eagles, C.

Attorneys: Dhamian A. Blue (Blue LLP) and James C. White (J.C. White Law Group, PLLC) for Brian C. Williams.

Companies: The Estates LLC; The Estates (Ut), LLC; The Estates Real Estate Group, LLC; Timbra of North Carolina, LLC; Versa Properties, LLC

Cases: Antitrust NorthCarolinaNews