Opinion ID: 187362
Heading Depth: 2
Heading Rank: 1

Heading: Subsidiaries

Text: First, Defendants object to the inclusion of their subsidiaries among the persons bound by the remedial order. Rule 65 of the Federal Rules of Civil Procedure indicates that an injunction binds only the parties; their officers, agents, servants, employees, and attorneys; and other persons who are in active concert or participation with the aforementioned persons. FED. R. CIV. P. 65(d)(2). The rule derives from the common law doctrine that an injunction not only binds the parties defendant but also those identified with them in interest, in `privity' with them, represented by them or subject to their controlany person or entity through whom the defendants might carry out enjoined activity and so nullify the order. Regal Knitwear Co. v. NLRB, 324 U.S. 9, 14, 65 S.Ct. 478, 89 L.Ed. 661 (1945). A subsidiary corporation is in privity with its parent in respect to the common corporate business to the extent it is so identified in interest with [the parent] that [it] represents precisely the same legal right in respect to the subject matter involved in the injunction. Jefferson Sch. of Soc. Sci. v. Subversive Activities Control Bd., 331 F.2d 76, 83 (D.C.Cir. 1963). The term subsidiaries in the remedial order cannot expand the scope of the injunction beyond that defined by Rule 65(d); however, subsidiaries of Defendants may be personally bound by the order to the extent that they are agents of or in privity with Defendants in the common corporate business of manufacturing, designing, marketing, or selling cigarettes. (Like any person with actual notice of the injunction, subsidiaries that act in concert with Defendants to violate the order would also be subject to contempt.) The record on appeal does not reveal facts sufficient for us to evaluate over which subsidiaries, if any, Defendants exercise sufficient control or with which they so identify in interest regarding cigarettes that they would legitimately fall within the purview of the injunction order. We therefore vacate the order to the extent that it binds all Defendants' subsidiaries and remand to the district court for proceedings to determine whether inclusion of Defendants' subsidiaries, and which subsidiaries, satisfies Rule 65(d).