Opinion ID: 786548
Heading Depth: 2
Heading Rank: 2

Heading: Other Corporate Defendants

Text: 40 Contrary to the district court's ruling, finding that DMS's actions were contrary to the promises it made in the Permanent Injunction does not necessarily mean that every defendant who signed the Permanent Injunction is jointly and severally liable for that conduct. The FTC also sought contempt sanctions against National Marketing Service, Inc.; NPC Corporation of the Midwest, Inc.; and Magazine Club Billing Service, Inc. It is axiomatic that each defendant is entitled to an individualized determination of his interests. de la Llana-Castellon v. INS, 16 F.3d 1093, 1096 (10th Cir.1994). The district court's only acknowledgment of this requirement is the conclusory statement that [e]ach individual defendant, during the applicable time period, controls or has authority to control one or more of the corporate defendants. App. at 557. 41 Neither the court nor the FTC pointed us to any evidence that any corporate defendant other than DMS engaged in any of the conduct outlined above in Part IV.A, nor has our review of the record revealed any. Indeed, from all that appears in the record, the complaining customers seem only to have dealt with DMS employees. See App. at 1099-1249. The FTC has also failed to provide us with any reason to believe the other corporate defendants could control DMS, or that the corporate structure was nothing more than an effort to conceal the assets of DMS and not a legitimate liability-limiting arrangement. Cf. Donovan v. Burgett Greenhouses, Inc., 759 F.2d 1483, 1486 (10th Cir.1985) (engaging in a piercing-the-corporate-veil analysis and finding owner liable where the record supports the district court's finding that the defendant had engaged in a deliberate effort to hide his assets). Their only apparent relationship to the activities at DMS appears to have been in receiving payment for ancillary services, such as equipment leasing, billing, and collecting provided to DMS, and sharing some common ownership interests with DMS. App. at 760-61, 1054-55. 42 Although there may be reason to believe the other corporate defendants were part of a common enterprise to fraudulently sell magazines, the FTC failed to put evidence of such activity in the record to satisfy the clear and convincing evidence standard. Because the FTC provided no clear evidence that any corporation other than DMS failed to comply with any specific provision of the Permanent Injunction or could have controlled the activities at DMS, they cannot be held vicariously in contempt, and the district court abused its discretion in so holding them. 7