Opinion ID: 813681
Heading Depth: 1
Heading Rank: 3

Heading: Merits of M&C’s Contempt Claim

Text: We next address M&C’s argument that Deutsche, Schmelt, and Hoetzel should be held in contempt for their role in liquidating Behr. When a district court orders or denies a contempt citation based on a violation of the court’s injunction, we review its decision for abuse of discretion. See NLRB v. Cincinnati Bronze, Inc., 829 F.2d 585, 590 (6th Cir. 1987). An analysis of whether a district court has authority to hold nonparties in contempt for violating its injunction must begin with Federal Rule of Civil Procedure 65(d)(2). The Rule provides three categories of persons that an injunction may bind. The first, of course, is the parties themselves. Fed. R. Civ. P. 65(d)(2)(A). The second is the parties’ officers, agents, servants, employees, and attorneys. Fed R. Civ. P. 65(d)(2)(B). The third is “persons who are in active concert or participation” with a party or its officers, agents, servants, employees, or attorneys. Fed. R. Civ. P. 65(d)(2)(C). The party seeking contempt sanctions bears the threshold burden of placing its target within one of these categories. Moreover, where a party seeks to hold nonparties in civil contempt, it must also show that the nonparties are “aware of the injunction and know that their acts violate the injunction.” Additive Controls & Measurement Sys., Inc. v. Flowdata, Inc., 154 F.3d 1345, 1353 (Fed. Cir. 1998) (citing Waffenschmidt v. MacKay, 763 F.2d 711 (5th Cir. 1985)). Taking these rules together, a party seeking contempt sanctions against a nonparty must prove that the nonparty knew of the injunction and knowingly aided and abetted an enjoined party or its agents to violate the injunction. This showing must be made by clear and convincing evidence. Elec. Workers Pension Trust Fund of Local Union #58, IBEW v. Gary’s Elec. Serv. Co., 340 F.3d 373, 379 (6th Cir. 2003). -7- No. 11-2167 M&C Corp. v. Erwin Behr GmbH & Co., KG, et al. It is readily apparent that M&C has failed to meet these standards. The district court structured the presentation of proof in a very definite fashion. After M&C first asked for sanctions, the district court’s December 2007 order required M&C to submit clear and convincing evidence alongside any subsequent prayer for contempt. When M&C returned to ask for contempt sanctions in 2010, information in its motion tending to satisfy the nonparty contempt standards was limited to bare allegations that were similar to those found in the earlier, deficient motion. Apparently the district court excused M&C from failing to satisfy its 2007 order and required the respondents to show cause. In its prehearing order, the district court announced that no live testimony would be heard, but that the parties could submit, as appendices to their briefs, documentary evidence in support of their arguments. M&C submitted no documentary evidence, but instead appeared at the hearing with a number of binders that it claimed to prove the respondents’ contempt. It was well within the district court’s discretion to reject a presentation of evidence that disobeyed its previous order. And having no evidentiary basis for a contempt finding, the district court was correct to dismiss M&C’s claim on the merits. M&C attempts to compensate for its failing by attacking the district court’s procedures as “at complete odds with law.” Reply Br. at 7. M&C argues that it was legally entitled to a contempt hearing at which it was permitted to take live testimony, present evidence, and conduct prehearing discovery. For this argument it cites the Benchbook for U.S. District Court Judges and Sanders v. Monsanto Company, 574 F.2d 198 (5th Cir. 1978). The Benchbook is not binding authority and does not convince us that the district court’s procedures were an abuse of discretion. M&C’s citation to Sanders is somewhat more persuasive. -8- No. 11-2167 M&C Corp. v. Erwin Behr GmbH & Co., KG, et al. That case held that a civil contempt proceeding is of the nature of a trial rather than a motion hearing, and that a full evidentiary hearing is required. Sanders, 574 F.2d at 199–200. At least one other circuit agrees with this approach. See Pennwalt Corp. v. Durand-Wayland, Inc., 708 F.2d 492, 495 (9th Cir. 1983). The Sixth Circuit does not appear to have definitively addressed the question. See Kendrick v. Bland, 845 F.2d 326 (6th Cir. 1988) (unpublished) (summarily holding that Fed. R. Civ. P. 43 did not require the district court to hold a hearing on a motion for civil contempt). Even were we to accept, as a general proposition of law, that a claim of civil contempt requires a full-blown trial, we would not require that the district court hold one here. Not only did M&C fail to object to the district court’s procedures until appeal; it sought to deny discovery to the respondents because it considered a contempt hearing to be “summary in nature, and not some form of ‘trial’ with the panoply of pretrial proceedings.” R. 751, Mot. to Quash and/or Suspend Disc. at 2. Fundamental fairness prevents us from giving to M&C what it sought to deny its opponents. The district court did not abuse its discretion by dismissing the respondents for lack of evidence showing them in contempt. The district court’s order also applied to another respondent, Dietmar Klaube. Klaube did not respond to M&C’s appellate brief. Because our conclusion applies equally to him, he will also be dismissed from the proceedings. Though the district court had personal jurisdiction over Deutsche and Schmelt by virtue of their attorneys’ general appearances, M&C did not make a proper showing that the respondents were in contempt of the district court’s 1996 injunction. As far as Deutsche, Schmelt, and Hoetzel are concerned, this case has come to an end. Accordingly, the judgment of the district court dismissing the contempt proceeding is affirmed. -9- No. 11-2167 M&C Corp. v. Erwin Behr GmbH & Co., KG, et al.