This order and judgment is not binding precedent, except under the *

doctrines of law of the case, res judicata and collateral estoppel. It may be cited,

however, for its persuasive value consistent with Fed. R. App. P. 32.1 (eff. Dec.

1, 2006) and 10th Cir. R. 32.1 (eff. Jan. 1, 2007).

The Honorable Phillip S. Figa, United States District Judge for the **

District of Colorado, sitting by designation.

F I LED

United States Court of Appeals

Tenth Circuit

December 20, 2006

Elisabeth A. Shumaker

Clerk of Court

UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

PHONE DIRECTORIES COMPANY,

INC.,

Plaintiff-Appellee,

v.

KELLY CLARK, an individual; THE

LOCAL PAGES, INC., a Utah

corporation,

Defendants-Appellants.

No. 05-4257

(District of Utah)

(D.C. No. 2:00-CV-468-TS)

ORDER AND JUDGMENT

*

Before HENRY, MURPHY, Circuit Judges, and FIGA, District Judge . 

**

After examining the briefs and the appellate record, this panel has

determined unanimously to grant the parties’ request for a decision on the briefs

without oral argument. Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is,

therefore, ordered submitted without oral argument.
-2-

I. Introduction

Phone Directories Company, Inc. (“PDC”) filed a motion for an order

requiring The Local Pages, Inc. and Kelly Clark, its owner and president,

(collectively “The Local Pages”) to show cause why they should not be held in

contempt of court for violating a previously entered Stipulated Judgment. The

United States District Court for the District of Utah granted the motion and, after

an evidentiary hearing, entered an order of contempt against The Local Pages. 

The district court concluded The Local Pages had violated four provisions of the

Stipulated Judgment. The Local Pages appeals this order of contempt, arguing (1)

the district court lacked jurisdiction to enter the order; (2) there was insufficient

evidence to support the district court’s conclusion that The Local Pages violated

the Stipulated Judgment; and (3) the district court erroneously rejected The Local

Pages’ defense of substantial compliance. This court has jurisdiction pursuant to

28 U.S.C. § 1291 and affirms the district court’s order of contempt.

II. Background

PDC and The Local Pages are competing publishers of telephone

directories. Clark is the owner and president of The Local Pages. The two

companies often compete directly for yellow page advertising contracts in several

areas throughout the United States, including Vernal, Utah.

In a previous lawsuit, PDC filed an amended complaint against The Local

Pages, alleging violations of the Lanham Act under 15 U.S.C. § 1125(a) and other
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deceptive business practices. The claim was settled pursuant to a Settlement

Agreement entered into by the parties and the entry of a Stipulated Judgment. 

Under the Stipulated Judgment, both parties were enjoined from engaging in a

number of deceptive business practices. As relevant to this appeal, the parties

were enjoined from the following: 

1. Falsely representing to Customers that they are associated

with, affiliated with, or in any way represent a Competing Entity.

2. Falsely representing or deceptively passing off or referring to

the Competing Entity’s telephone directory, or any part thereof, as their

own.

3. Falsely representing to Customers that the Competing Entity

will no longer publish a telephone directory in a Geographical Area.

4. Falsely representing to Customers that the Party is replacing

the Competing Entity as the publisher of telephone directories in a

Geographical Area.

Stipulated Judgment at 4-5.

This dispute arises out of the alleged breach of the Stipulated Judgment by

The Local Pages. For approximately twenty years, PDC had published a

telephone directory in Vernal, Utah, entitled the “Basin Phone Directory,” without

competition from The Local Pages. The Local Pages, however, decided to

publish a competing directory in the area and began selling yellow page

advertising for its directory. Shortly thereafter, PDC filed a motion for an order

requiring The Local Pages to show cause why they should not be held in contempt

for violating the injunction set forth in the Stipulated Judgment. PDC alleged a

sales agent of The Local Pages had contacted one of PDC’s customers and
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claimed she represented Basin Directories, asked to schedule an appointment to

renew the customer’s advertisement, and stated she was the new Basin

Directories’ agent. The court granted the motion and held an evidentiary hearing.

At the evidentiary hearing, PDC presented four witnesses to testify

regarding the alleged violations. These witnesses all worked for businesses that

were PDC customers at the time of the acts in question. The witnesses testified

The Local Pages’ sales representatives stated or implied they represented the

Basin Directory and began their sales pitch by offering to renew the customers’

advertisements. Specifically, there was evidence that one representative, Bonnie

Ball, carried a PDC directory with her to sales meetings, and that another

representative faxed copies of an existing PDC ad to a customer in an effort to

confirm the content of the new ad. One witness testified Ball falsely told her

Basin Phone Directory would no longer service the area.

In response, The Local Pages offered the testimony of Ball, who denied she

had ever made a false statement or intended to deceive PDC’s customers. It also

presented evidence of a company policy, which required all employees to read

and agree to comply with the Stipulated Judgment. Ball, however, testified she

had not read the Settlement Agreement or the Stipulated Judgment. In addition,

The Local Pages presented evidence of a Code of Conduct in its sales manual,

which included restrictions on activities not prohibited by the Stipulated

Judgment. It further presented evidence Ball had been warned for violating the
-5-

Code of Conduct by bringing a competitor’s directory to sales meetings with

potential customers.

Following the evidentiary hearing, the district court entered an order of

contempt, concluding PDC had proved violations of the Stipulated Judgment by

clear and convincing evidence. It found The Local Pages’ sales representatives

had engaged in conduct that violated each of the four provisions of the Stipulated

Judgment listed above. Because it concluded PDC had not presented sufficient

evidence of damages, it awarded PDC only costs and attorneys’ fees in the

amount of $15,763.00. The Local Pages now appeals the order of contempt and

the order awarding PDC its costs and attorneys’ fees.

III. Analysis

A. Jurisdiction

This court must first address The Local Pages’ argument that the district

court did not have jurisdiction over the contempt proceedings because PDC failed

to comply with the procedure in the Settlement Agreement before seeking judicial

intervention. Pursuant to the Settlement Agreement, the party alleging breach

must notify the other party in writing and allow ten business days for the other

party to investigate and propose a remedy. The Agreement provides, “[i]f the

parties cannot resolve an alleged breach [through these means], they may then

seek court intervention.” Because PDC initially filed its motion for order to show
In support of its argument, The Local Pages cites Morris v. City of Hobart,

1

39 F.3d 1105 (10th Cir. 1994), for the proposition that a district court must

expressly retain jurisdiction to enforce a settlement agreement. Morris is

inapposite, however. The district court in this case did not exercise jurisdiction

over the Settlement Agreement, but instead exercised its inherent power to

enforce the terms of the Stipulated Judgment. As such, the court’s jurisdiction

over the contempt proceeding was proper, regardless of any express retention of

jurisdiction to enforce compliance. 

-6-

cause without notifying The Local Pages of the alleged breach, The Local Pages

contends the district court did not have jurisdiction to consider the motion.

This court reviews jurisdictional questions de novo. In re Special Grand

Jury 89-2, 450 F.3d 1159, 1170 (10th Cir. 2006). In this case, the court need not

decide whether PDC adequately complied with the Settlement Agreement because

the district court’s jurisdiction was not contingent on the Agreement or the

parties’ compliance with its procedures. It is well-established that a court retains

ancillary jurisdiction over subsequent proceedings to enforce its own orders and

judgments. Peacock v. Thomas, 516 U.S. 349, 356 (1996). “Without jurisdiction

to enforce a judgment entered by a federal court, the judicial power would be

incomplete and entirely inadequate to the purposes for which it was conferred by

the Constitution.” Id. Because the contempt order was based solely on violations

of the injunction set forth in the Stipulated Judgment, the district court had

jurisdiction, independent of any provisions in a private agreement. Thus, PDC’s 1
Significantly, the Stipulated Judgment did not incorporate the procedural 2

provisions of the Settlement Agreement. Thus, if The Local Pages has a claim

against PDC at all, it is one for breach of contract, which it has not properly

raised on appeal. See Consumers Gas & Oil, Inc. v. Farmland Indus., Inc., 84

F.3d 367, 370 (10th Cir. 1996) (“Standing alone, a settlement agreement is

nothing more than a contract . . . .”).

-7-

alleged failure to comply with the Settlement Agreement could not divest the

court of its inherent jurisdiction to enforce its own orders. 

2

B. Finding of Contempt

This court reviews a district court’s determination of civil contempt for

abuse of discretion. FTC v. Kuykendall, 371 F.3d 745, 756 (10th Cir. 2004). A

district court has abused its discretion when its “adjudication of the contempt

proceedings is based upon an error of law or a clearly erroneous finding of fact.” 

Id. The district court’s factual findings are clearly erroneous only if they are

“without factual support in the record or if the appellate court, after reviewing all

the evidence, is left with a definite and firm conviction that a mistake has been

made.” Manning v. United States, 146 F.3d 808, 812 (10th Cir. 1998).

To prevail in the district court, a plaintiff must prove, by clear and

convincing evidence: (1) a valid court order existed; (2) the defendant had

knowledge of the order; and (3) the defendant disobeyed the order. Reliance Ins.

Co. v. Mast Constr. Co., 159 F.3d 1311, 1315 (10th Cir. 1998). The Local Pages

does not dispute the validity of the Stipulated Judgment or its knowledge of the
As owner and president of The Local Pages, Clark had the obligation to 3

prevent the corporation’s violation of the Stipulated Judgment. See FTC v.

Kuykendall, 371 F.3d 745, 759 (10th Cir. 2004). Thus, the district court’s

determination that employees of The Local Pages violated the Stipulated

Judgment is sufficient to support an order of contempt against Clark as well.

-8-

order. Therefore, the contempt order is proper if there is clear and convincing

evidence the Stipulated Judgment was violated.

The district court did not abuse its discretion in finding clear and

convincing evidence The Local Pages violated the Stipulated Judgment. Three 3

witnesses, all customers of PDC, testified at the contempt hearing that employees

of The Local Pages had represented themselves as affiliated with PDC when

making sales calls. Lisa Preece stated a Local Pages employee told her he was

with the Basin Directory and asked her to renew her yellow pages listing. Joelle

Martinsen testified Ball entered her store carrying a PDC directory and

confirmed, in response to Martinsen’s question, that it was time for renewal. 

Brad Hafen explained he also was asked to renew his subscription and was faxed

a copy of his PDC ad by The Local Pages caller. In addition to providing

evidence of false representations of affiliation, the testimony of these witnesses

supports the district court’s finding that employees of The Local Pages falsely

passed off the PDC directory as their own. It was reasonable for the district court

to find that by asking for renewals rather than new subscriptions, The Local Pages

employees implied they worked for the PDC directory, in which the customers

already had placed advertisements. In addition, Brandy Johnson’s testimony is
-9-

direct evidence of false representations that PDC would no longer publish a

directory in the region and The Local Pages would be replacing it. In her

testimony, Johnson stated Ball explicitly told her the Basin Phone Directory

would no longer be serving the Uintah Basin and The Local Pages would now

serve the region.

In challenging the sufficiency of the evidence, The Local Pages attempts to

discount the witnesses’ testimony by noting contradictions between their

testimony at trial and at deposition. It is well-settled that determinations of

witness credibility are for the district court, and this court “will therefore not

reexamine the credibility of a witness’ testimony on appeal.” United States v.

Silvers, 84 F.3d 1317, 1328 (10th Cir. 1996). Recognizing this principle, The

Local Pages attempts to characterize its claim as a challenge to the strength of the

evidence, not its credibility. This distinction is unconvincing, however, as

challenges to the witnesses’ faulty assumptions, confusion, and contradictions go

directly to credibility. Because the district court chose to believe the witnesses’

testimony and explanations for the alleged contradictions, this court will not

disrupt the district court’s finding. Likewise, The Local Pages’ reliance on Ball’s

testimony to controvert PDC’s witnesses is misplaced, because the district court

explicitly found Ball was not believable.

The Local Pages also argues the hearing testimony, even if accepted as

true, does not provide sufficient evidence the Stipulated Judgment was violated. 
In its brief, The Local Pages challenges the validity of PDC’s right to 4

“Basin Directory” as a protectable trademark. Appellant Br. at 17-18. This issue

was not argued before the district court and this court will not consider it on

appeal. See Chavez v. City of Albuquerque, 402 F.3d 1039, 1047 (10th Cir. 2005)

(“Absent extraordinary circumstances not present here, we do not address

arguments raised for the first time on appeal.” (citation omitted)). In any event,

The Local Pages agreed in the Settlement Agreement and Stipulated Judgment not

to falsely represent its affiliation with PDC, so the trademark’s legal protection is

irrelevant.

-10-

It first points out that no provision of the Stipulated Judgment prohibits Local

Pages employees from taking a competitor’s directory into a sales meeting or

sending a copy of the customer’s ad in a competing directory. This argument

misses the point. While these acts are not alone violations of the Stipulated

Judgment, they are evidence of an intent to pass off PDC’s directory as their own. 

The Local Pages also argues its employee’s statement that he was with the Basin

Directory was not a false statement because Basin Directory is a generic name

which can describe any directory in the region, including that of The Local

Pages. The district court, however, determined false representations of 4

affiliations were made. Given The Local Pages’ awareness of the Basin

Directory, this finding was not clearly erroneous. Finally, this court rejects the

argument that representations to employees without purchasing power do not

amount to representations to customers. Because these employees interacted with

The Local Pages salespeople regarding the purchase of yellow pages ads, it was

not clearly erroneous for the district court to determine false representations to

these employees constituted false representations to customers.
To the extent The Local Pages argues the district court applied the wrong 5

legal standard, this argument directly contradicts the court’s written conclusions

of law, in which it twice states PDC proved a violation of the injunction by clear

and convincing evidence. The district court first states, “PDC met its burden of

proving by clear and convincing evidence . . . that defendants disobeyed the

order.” It continues, “Specifically, PDC proved by clear and convincing evidence

that defendants violated Subparagraphs 1,2,3, and 4 of the injunction . . . .” 

Based on these statements and the sufficiency of the evidence discussed above,

(continued...)

-11-

The Local Pages makes two additional challenges to the district court’s

findings, which this court also rejects. First, The Local Pages’ contention that the

district court based its finding of contempt solely on its disbelief of Ball’s

testimony is belied by the court’s oral ruling. In its ruling, the court explained its

findings were based on the testimony of PDC’s witnesses. It only noted its

disbelief of Ball to acknowledge, and discount, the competing evidence. This

court also concludes the district court’s findings were sufficient under Rule 52(a)

to allow for meaningful appellate review. The court’s oral ruling indicated which

testimony supported its findings as to each violation. Based on this reference,

this court was able to examine the witnesses’ testimony to determine whether

those findings were clearly erroneous.

Thus, the evidence presented at the hearing adequately supported the

district court’s determination that PDC proved, by clear and convincing evidence,

The Local Pages violated the Stipulated Judgment. This court therefore concludes

the district court did not abuse its discretion in holding The Local Pages in

contempt.5
(...continued) 5

this court concludes the district court fully understood the evidentiary standard it

was required to apply.

This court has recognized a defense when a defendant shows by clear and 6

convincing evidence that he was “plainly and unmistakably” unable to comply

with the court order. Donovan v. Burgett Greenhouses, Inc., 759 F.2d 1483, 1486

(10th Cir. 1985). Although this defense is related to the substantial compliance

defense argued by The Local Pages, it is a separate defense, focusing on the

impossibility of compliance rather than the level of compliance achieved. The

Local Pages does not argue it was unable to comply with the Stipulated Judgment. 

-12-

C. Substantial Compliance

While some courts have recognized substantial compliance as a defense in a

contempt proceeding, this court has not previously recognized the defense in a

published opinion. In those courts that have recognized the defense, a defendant 6

who has violated a court order may avoid liability for contempt “by showing by

clear and convincing evidence that ‘all reasonable steps’ were taken in good faith

to ensure compliance with the court order and that there was substantial

compliance.” Bauchman v. W. High Sch., 906 F. Supp. 1483, 1494 (D. Utah

1995). The Local Pages argues it took such reasonable steps by (1) ensuring all

sales representatives received and reviewed a copy of the Stipulated Judgment

and (2) establishing and enforcing a Code of Conduct for employees that went

beyond the standards set forth in the Stipulated Judgment. 

This court need not decide whether to recognize substantial compliance as a

defense in this circuit. Assuming the defense exists, The Local Pages has failed

to prove it should apply in this case. The district court concluded that although
The Local Pages argues this finding conflicts with testimony by Clark that 7

all employees were provided copies of the Stipulated Judgment and Settlement

Agreement. The district court’s findings indicate, however, it found a difference

between the company policy, as testified to by Clark, and the application of that

policy in this instance. Further, Ball’s written certification that she received the

Stipulated Judgment and Settlement Agreement does not make this finding clearly

erroneous because her hearing testimony directly contradicts this certification. 

-13-

some steps were taken to ensure compliance with the Stipulated Judgment, these

steps were insufficient to constitute a defense. Specifically, the court noted

Ball’s testimony that she was never presented the Settlement Agreement or the

Stipulated Judgment for her review. Because the question of whether The Local 7

Pages substantially complied with the court order is part of the determination of

contempt, this court reviews the district court’s conclusion for abuse of

discretion. See Hallett v. Morgan, 296 F.3d 732, 750 (9th Cir. 2002). 

Given Ball’s testimony and The Local Pages’ failure to further investigate

Ball’s behavior after the alleged misconduct, the district court’s conclusion as to

the steps taken by The Local Pages was not an abuse of discretion. Contrary to

The Local Pages’ assertions, the district court did not abuse its discretion in

concluding the existence of a policy did not alone constitute all reasonable steps

to ensure compliance. This is especially true in light of evidence the policy was

insufficient to ensure employees actually read the Stipulated Judgment. Further,

the numerous violations of the Stipulated Judgment discussed above undermine

The Local Pages’ contention that it in fact substantially complied with the court
The Local Pages’ reliance on Bauchman v. West High School, 906 F. Supp. 8

1483 (D. Utah 1995), is misplaced. In that case, the court found school

authorities had substantially complied with a court order enjoining the singing of

two religious songs at high school graduation, even though students and audience

members defied the authorities and sang the songs nevertheless. The Local Pages

attempts to liken this case to Bauchman by arguing the violation by Ball was

similarly out of its control. This case is distinguishable, however, because the

violations were not committed by unrelated third parties, as in Bauchman, but by

The Local Pages’ own employee.

-14-

order. Thus, the district court did not abuse its discretion in denying The Local

Pages’ substantial compliance defense. 

8

IV. Conclusion

For the foregoing reasons, this court affirms the district court’s order of

contempt against The Local Pages and the order requiring The Local Pages to pay

PDC’s costs and attorneys’ fees.

ENTERED FOR THE COURT

Michael R. Murphy

Circuit Judge