Court Opinion

ID: 619767
Source: CourtListenerOpinion
Date Created: 2011-12-23 19:57:37+00
Date Added: 2024-06-11T17:50:49.609139
License: Public Domain

UNPUBLISHED

                  UNITED STATES COURT OF APPEALS
                      FOR THE FOURTH CIRCUIT

                             No. 09-1481

YOUNG AGAIN PRODUCTS, INCORPORATED, A Maryland Corporation,

                Plaintiff - Appellee,

           v.

JOHN ACORD, a/k/a John Livingston; MARCELLA ORTEGA, d/b/a
Young Again Nutrients, d/b/a Young Again Nutrition,

                Defendants - Appellants.

Appeal from the United States District Court for the District of
Maryland, at Greenbelt. Roger W. Titus, District Judge. (8:03-
cv-02441-RWT)

Argued:   October 26, 2011                 Decided:   December 23, 2011

Before WILKINSON, MOTZ, and DUNCAN, Circuit Judges.

Affirmed by unpublished opinion.        Judge Duncan wrote         the
opinion, in which Judge Wilkinson and Judge Motz concurred.

ARGUED: Joe Alfred Izen, Jr., Bellaire, Texas, for Appellants.
Mark A. Freeman, FREEMAN & FREEMAN PC, Rockville, Maryland, for
Appellee.   ON BRIEF: Thomas R. Freeman, FREEMAN & FREEMAN PC,
Rockville, Maryland, for Appellee.

Unpublished opinions are not binding precedent in this circuit.
DUNCAN, Circuit Judge:

      This      appeal    arises     from   the    district      court’s    entry   of

default judgment in the amount of $3,832,832 against John Acord

and       his     mother,        Marcella        Ortega        (collectively,       the

“Appellants”),       pursuant      to    Federal       Rules   of   Civil   Procedure

16(f) and 37(b)(2)(A)(vi).              In addition to appealing the default

judgment, Acord appeals the district court’s earlier award of

Rule 11 sanctions against him in the amount of $24,357 and the

order incarcerating him for civil contempt for his refusal to

pay that amount.          For the reasons that follow, we affirm.                    We

find that Appellants were adequately put on notice as to the

consequences      of     their    actions,       and   that    their   intransigence

warranted no lesser sanctions.

                                            I.

                         A. The Complaint and Counterclaims

      On    August     20,   2003,      Young    Again    Products,    Inc.   (“Young

Again”) filed a complaint in the U.S. District Court for the

District of Maryland against Acord and Young Again Nutrition

(“Nutrition”) 1 for trademark and copyright infringement, as well

      1
       There is some dispute about the proper name of the
company, and the different courts involved in this case have
alternated between Young Again Nutrition, see Young Again
(Continued)
                                            2
as breach of contract and other state-law claims. 2                    Acord and

Nutrition   filed    a    motion   to    dismiss    for    lack   of    personal

jurisdiction and for improper venue.               In the alternative, they

sought a transfer of venue to the Southern District of Texas.

The court denied the motion, holding, in pertinent part, that

venue was proper because the contract at the center of this

dispute was entered into in Maryland and because Appellants’

company   purposefully     directed     Internet    traffic   into     and   made

sales in Maryland.        Young Again Prods., Inc. v. Acord, 307 F.

Supp. 2d 713, 718 (D. Md. 2004).

     Young Again filed a motion for a preliminary injunction to

enjoin Appellants from using Young Again’s trademarks, the name

of Young Again’s president, Roger Mason, and Mason’s copyright-

protected   works.       The   court    granted    Young   Again’s     motion   on

March 25, 2005.          Thereafter, on March 29, 2005, Acord filed

counterclaims against Young Again and Mason for, inter alia,

Prods., Inc. v. Acord, 307 F. Supp. 2d 713, 714 (D. Md. 2004),
and Young Again Nutrients, LLC, see Acord v. Saenz, 2009 U.S.
Dist. LEXIS 77274 at *1 (S.D. Tex. 2009).  Acord operated this
company with Ortega.
     2
       Although once friends, Appellants and Young Again pursued
a scorched-earth policy for resolving this dispute and are now
embroiled in litigation nationwide.   Several previous decisions
have set forth the history of their disagreement.     See  Young
Again Prods., Inc., 307 F. Supp. 2d at 714, Dodart v. Young
Again Prods., Inc., 2006 U.S. Dist. LEXIS 72122 (D. Utah 2006),
Saenz, 2009 U.S. Dist. LEXIS 77274.

                                        3
libel,       defamation,       and   tortious        interference       with     Appellants’

business.           Young Again filed an amended complaint on May 26,

2004 naming Ortega as an additional defendant.

                 B. Young Again’s Motions to Enforce the Injunction

         On April 16, 2004, Young Again filed its first motion to

enforce       the    preliminary         injunction      and     for    contempt      against

Acord,       alleging       that   he    was     continuing      to    use    Young   Again’s

trademarks           and      Mason’s        name,       despite        the      injunction.

Thereafter, on May 25, 2004, the parties entered into a consent

injunction          in   which     Appellants        agreed    to     cease    using      Young

Again’s       trademarks       and      Mason’s      name,    both     parties    agreed     to

refrain from making disparaging remarks about the other, and

Mason agreed not to interfere in Appellants’ business in any

way. 3       Although it declined to sanction Appellants, the district

court        ordered       Appellants       to    pay    Young      Again’s      “costs     and

attorneys’ fees of $1,831.50 incurred in connection with [Young

Again’s] Motion To Enforce.”                   J.A. 418.

         Young      Again    filed      a   second      motion    to    enforce       and   for

contempt on Jun 21, 2004.                   This time, Young Again alleged that

         3
       At oral argument, Appellants alleged that the consent
injunction was something other than an agreement in an effort to
discredit the district court’s actions.   We disagree.   Through
the consent injunction, the parties voluntarily agreed to bind
themselves to certain court-enforced norms of behavior for the
duration of the litigation.

                                                 4
Appellants violated the May 25 consent injunction by sending a

memorandum     to    their       distributors         that    Young    Again     had      not

approved     and    that    contained       derogatory        remarks       about    Mason.

Although the district court found that Appellants’ distribution

of    the   unilaterally     prepared       memorandum        did     not    violate      the

express terms of the consent injunction, it warned them that the

memorandum was “neither in form nor in substance what the court

contemplated        would    have    been       sent    in    accordance        with     the

applicable provision of the Consent Injunction.”                           J.A. 509.       On

August 5, 2004, the district court entered an order instructing

the    parties      to    work    together       to     draft    a     notice       to    the

Appellants’ distributors explaining that they were permanently

enjoined from using certain trademarks.

       As the litigation lurched forward, Young Again sought to

have the district court reconsider its August 5th order and both

parties moved to extend the discovery deadline.                             In an August

24, 2004 order, the district court denied Young Again’s motion

to reconsider, but since the parties had not agreed on a notice

to    Appellants’        distributors,       did       specify       the    notice       that

Appellants had to send to their distributors.                          The court also

granted the joint motion to extend discovery deadlines, but in

bolded, underlined, and italicized text, warned the parties that

“no further extensions will be granted.”                     J.A. 523.

                                            5
        On September 3, 2004, Young Again filed its third motion to

enforce and request for an “order to show cause why [Appellants]

should not be held in contempt for willful violation of the

injunction       and    the     decrees      of       this    court,    and    for      expenses,

including attorney’s fees.”                   J.A. 526.               Appellants responded

that    they     had    not    received      proper          notice    of   the    violations.

Acord     also    submitted        a       declaration          explaining        how    he   and

Nutrition had “used [their] best efforts to remove all of the

Young Again Products goods from the Internet web sites operated

by     Young     Again        Nutrition”      in        order     to    comply       with      the

injunction.        Young Again maintained that the ongoing violations

were too blatant to be oversights.                      J.A. 555-58.

       At a hearing on November 9, 2004, the court “reluctantly”

denied    Young        Again’s    motion      because          Appellants      did      not   have

sufficient notice to correct the alleged violation.                                  J.A. 3556.

The     court     stated       that    it     was        “not    exactly       pleased        with

[Appellants’]          approach       to    compliance          with    this      injunction.”

J.A. 3555. The court complained that Appellants were “playing

the bubble game, pushing a bubble down one place that pops up in

another.”         J.A.    3556.        The    court          contemplated      sanctions       but

noted instead that it did not

       think, though, because of the freshness of this
       particular aspect of non-compliance to the injunction
       that [it] can start imposing sanctions today, but--and
       it may very well be that if there’s additional

                                                  6
     discovery that a serious violation could be addressed
     if this is not redressed immediately by the defendant.

J.A. 3557-58.    The court continued:

     But at this stage, with the record as limited as it is
     in developing the degree to which the [Appellants
     have] been circumventing the letter or the spirit of
     this injunction, I’m not prepared to enter sanctions
     today, but I will make certain that it’s loudly and
     clearly on this record that I view the parameters of
     the existing injunction as more than adequate to
     address activities of the type that appear to have
     been identified in the hearing today.

J.A. 3558-59.     The court stated that the Appellants had “seven

days to fix this problem” and that “if this stuff continues to

happen then we will be back here and we will be talking about

imposing sanctions, because I just don’t think that this can go

on any further.”    J.A. 3559.

     The court’s November 12 order reiterated the frustration it

expressed at the hearing.        It stated that the court found that

the Appellants’ compliance had been “less than exemplary” and

that “any failure by the [Appellants] to conform their on-line

activities to the requirements of the consent injunction within

seven days . . . may result in the levying of civil penalties

against the [Appellants].”       J.A. 621.

     Appellants ignored this seven-day deadline.              On November

19, 2004, Young Again filed its fourth motion to enforce and

request   for   sanctions.   The     court   held   another   hearing   on

February 3, 2005 to determine whether the Appellants or third-

                                     7
parties not under the Appellants’ control were responsible for

the    continued    misuse    of   Young       Again’s   intellectual   property.

Although concerned that some of the ongoing noncompliance was

not innocent, but was the product of “‘wink, wink; nod, nod’

relationships with some of the[] so-called retail customers,”

the court declined to impose sanctions.                  J.A. 3384.     The court

was nonetheless clear in its warning to the Appellants:

       I want to make sure that the [Appellants do not] feel
       real good about what I’m saying. I’m saying that when
       I get better information that presumably will come
       from deposition--live testimony from somebody from an
       internet search engine that indicates that through
       some devious means that this court’s injunction has
       been violated, they better rue the day that I find out
       . . . everybody can hear it loud and clear.      If it
       turns out games have been played with search engines
       and relationships with other people are not what
       they’re claimed to be and this whole thing is a sham
       to get around your marks and your consent injunction,
       then they better start moving some money around to be
       able to respond for it.

       On the other hand, I need to be reasonably confident
       when I’m using the contempt powers of the court that
       I’m reasonably precise about it. And as I said, I see
       a lot of smoke in front of me.

J.A.       3384   (emphasis    added).           The     court   then   addressed

Appellants’ counsel, Lawrence E. Laubscher, 4 directly saying, “I

want to make sure . . . your client hears loud and clear that

       4
       We depart from our usual practice of treating counsel’s
acts as acts of their clients in this case both because
Appellants attempt to blame the default judgment on Laubscher,
and because Acord decided to proceed pro se for the latter part
of this litigation.

                                           8
I’m   not    happy       with   how   fast    there      was   compliance        with       some

aspects of this injunction.”                 J.A. 3386.            The court closed the

hearing      by    reiterating        that     sanctions           were     coming     if    it

discovered        that    Appellants    had       flouted      the       injunction.        The

court did not rule on Young Again’s motion at this hearing.

                                  C. The Discovery Process

      The discovery process progressed slowly at best.                               On April

15,   2005,       Young     Again     filed       its    first       motion     to     compel

Appellants to produce documents.                   Although the parties reached

an agreement resolving this first discovery dispute, the court

had to intervene repeatedly.

      The    court       originally     planned         to   rule     on    Young     Again’s

fourth motion to enforce and request for sanctions after the

completion of discovery on June 1, 2005.                             When the discovery

deadline was extended into 2006, however, the court denied the

motion without prejudice, citing Congress’s “disapprobation of

stagnant     motions       that    remain     pending        for    an     abnormally       long

time.”      J.A. 909.

      In the middle of discovery, on April 24, 2006, Laubscher

moved to withdraw from representation of Acord and the court

granted his motion. 5           On July 7, 2006, Young Again filed a second

      5
       In his May 23, 2009, Motion to Withdraw from representing
Ortega, discussed below, Laubscher explained that he withdrew
(Continued)
                                              9
motion to compel, this time alleging that the defendants were

improperly     designating     all      documents     they     produced      as

“confidential, attorneys[’] eyes only.”           J.A. 998-99.

     The    court   finally   decided     Young   Again’s     July   7,   2006,

motion on June 19, 2007.       The court explained that it had spent

28 hours reviewing documents only to find that many were blank,

consisted     of    advertisements,        or     otherwise     lacked      any

confidential information, much less information warranting the

“attorneys’ eyes only” designation.             J.A. 1043-44.        The order

noted that Laubscher “conceded that he has not reviewed all of

the electronically stored documents because of the volume of the

records,” yet he let Acord, who was ostensibly proceeding pro

se, designate them “attorneys’ eyes only.”             J.A. 1043-44.        The

court struck Appellants’ designation.

                          D. The Rule 11 Sanctions

     Not having an attorney did not deter Acord from vigorously

litigating.    In an email, he characterized his own conduct as

“filing numerous motions to quash, discovery requests on Mason,

and other actions that will hopefully deplete his war chest.”

J.A. 1106A.

from representing Acord and Young Again Nutrition after he was
denied payment of $75,537.70 for services and disbursements.

                                     10
       On    December      7,     2007,       Acord      filed     a    pro    se     motion      to

enforce, requesting sanctions against Young Again, and seeking

to dismiss the suit against him.                        In response, Young Again moved

for    sanctions         against     Acord         under     Federal          Rule    of     Civil

Procedure 11, stating that the purpose of Acord’s motion was

harassment and delay.               On August 28, 2008, the district court

denied Acord’s motion, finding that he came before the court

“with, at best, unclean hands” and that his motion was “utterly

devoid of any merit whatsoever.”                         J.A. 2174.        At a hearing on

November 17, 2008, the district court ruled on Young Again’s

motion      and   ordered       sanctions          assessed       against      Acord        in   the

amount of $24,357.              The court found that his motion “was filed

for    an    improper      purpose        of    harassment,            causing       unnecessary

delay, and/or needlessly increasing the costs of litigation, and

that his pleading contained numerous factual allegations without

evidentiary support.”             J.A. 2306.

       Both Laubscher and Acord were present at the November 17,

2008, hearing.            In     addition      to       sanctioning      Acord,       the    court

scheduled a jury trial in the case and imposed a strict pretrial

schedule for the parties to follow.                       The court told the parties:

“[Y]ou need . . . to read our rule on pretrial procedures.                                        I

take   that       very    seriously       .    .    .     [T]he    pretrial          preparation

process      is    one    that     involves         a    significant       level       of    joint

endeavor with people operating in good faith with each other and

                                               11
not playing around.”        S.J.A. 118-19.         The court instructed the

parties to submit a pretrial order by March 2, 2009.

                             E. The Default Judgment

     Despite    the    court’s     admonition      about    the    need    for    the

parties to cooperate and the local rules governing the pretrial

process, Ortega did not respond to Young Again’s efforts to make

pretrial    arrangements.         Instead,     Laubscher      waited      until   one

business day before the filing deadline for the pretrial order,

a Friday, to begin emailing his proposals.                 Even then, he failed

to attach anything to his email.               The next Monday, he waited

until 4:20 pm on the filing date to forward the remainder of his

proposed joint pretrial order.              Laubscher complained that Young

Again’s    counsel    did   not    notify    him   that    the    attachment      was

missing or respond to his emails on Saturday.                     Laubscher later

testified that he had repeatedly attempted to contact Ortega but

that she never responded, so he proceeded without guidance from

his client.     In any event, Laubscher's belated filing left no

time for the parties to negotiate the order.                 As a result, Young

Again did    not     incorporate    any     material   from      Ortega    into   its

order.

     On March 2, 2009, Young Again filed a motion for default

judgment against Acord, alleging that he failed to communicate

in preparing for pretrial and that he had failed to pay the

sanctions assessed against him.             On March 17, 2009, Young Again

                                       12
filed a motion for default judgment against Ortega, alleging

that she too had failed to participate in the pretrial process.

       On March 19, 2009, the court sent the parties the following

reminder about the pretrial proceedings:

       The Court wishes to remind the parties of the pretrial
       conference   and  hearing    on all   pending  motions
       scheduled for Monday, March 23, 2009, at 2:00 p.m. At
       that time, the Court intends to hear argument on all
       pending motions--Paper Nos. 247, 256, 258, and 259.
       The Court notes that Paper No. 259 was filed on
       3/17/09.   If Defendant Ortega wishes to respond to
       that motion, she is directed to file a response by
       March 20, 2009, at 4:00 p.m.

       Despite the informal nature of this ruling, it shall
       constitute an Order of the Court, and the Clerk is
       directed to docket it accordingly.

J.A.    2602    (emphasis    in     original).        Relevant     to   this    appeal,

Paper    No.    256    is   Young    Again’s    motion       for   default     judgment

against       Acord;   Paper      No.   258    is    Young    Again’s     motion    for

sanctions and civil contempt against Acord; Paper No. 259 is

Young Again’s motion for default judgment against Ortega.

       At the scheduled pretrial hearing on March 23, 2009, the

court heard extensive testimony about the failure of Appellants

to cooperate in the pretrial process.                   Laubscher admitted that

he knew that Appellants missed the deadline to comment on the

pretrial order, but having not received any instructions from

Ortega he made the 4:20 pm filing in an effort to preserve her

rights.        He maintained that Ortega wanted to defend the case,

but     the    court   disagreed.         The       court    stated     that   it   was

                                          13
“attributing what took place in this case directly to Marcella

Ortega”    and    that    he   could   not       fault    her    counsel,      Laubscher,

because “it’s clear[] his indifference to his obligations . . .

are because he was in effect disabled by his client from being

able to perform the obligations that he had to this court.”

J.A. 3329.       Acord admitted that he had no excuse for his failure

to   participate     in    the   pretrial        process        other   than    “it   just

boggles my mind and I don’t know how to do it.                          I don’t have an

attorney up here.”         J.A. 3305.

        The court found that both Acord and Ortega had failed to

participate meaningfully in the litigation and granted default

judgment against them in the amount of $3,832,832.40. 6                         The court

also dismissed Acord’s counterclaims.

      At that same hearing, Laubscher requested and was granted

permission to withdraw from his representation of Ortega, citing

Ortega’s     failure      to   communicate         with   him     or    pay    him    since

November 2008.       The record contains three letters from Laubscher

to Ortega dated December 29, 2008, February 23, 2009, and March

4, 2009, explaining his need for direction during the pretrial

process.     The first two letters also gave Ortega notice that he

would     withdraw   as    counsel     if    not    paid.        The    third    informed

      6
      The court based this number on the report of Young Again’s
expert, which estimated the revenue lost as a result of
Appellant’s infringement. It also included contract damages and
attorneys’ fees.

                                            14
Ortega that she was in violation of their Representation and Fee

Agreement and that Laubscher would be moving to withdraw under

Local     Rule    101.2     for    nonpayment      of   fees    and     “failure      to

cooperate in your defense.”               J.A. 2871.     Laubscher also emailed

Acord     about    his    inability       to    continue      representing     Ortega

without payment.

                               F. Acord’s Incarceration

      The court ordered Acord to pay the sanctions against him--

or explain the financial circumstances that rendered him unable

to   pay--within      thirty       days   of    March   25,    2009.      Acord      did

neither.      Consequently, the court ordered him to appear at a

hearing on July 7, 2009, to show cause why he should not be held

in   civil       contempt    and     incarcerated.         Acord       moved   for    a

continuance but the district court denied his motion.                           Acord

failed to appear as ordered.                On August 6, 2009, the district

court held Acord in contempt and ordered him incarcerated until

he purged himself of the contempt. 7

      7
       Acord filed a petition for habeas corpus in the Southern
District of Texas claiming that his continued incarceration
violated his Due Process rights because he was unable to pay the
sanction and thereby purge himself of the contempt.      He also
claimed that producing the documents requested by the Maryland
district court would violate his Fifth Amendment privilege
against self incrimination.     The Southern District of Texas
found neither argument persuasive and denied his motion. Saenz,
2009 U.S. Dist. LEXIS 77274, at *11-30.

(Continued)
                                           15
                                           II.

        Appellants    claim       that    the     district      court     abused      its

discretion when it entered default judgment for $3,832,832.40

against them.        In addition, Acord argues that the district court

abused    its    discretion   when        it    awarded   Young   Again       sanctions

pursuant to Federal Rule of Civil Procedure 11.                           Acord also

appeals the district court’s order holding him in civil contempt

for failure to pay the sanction.                 Finally, Appellants claim that

the district court erred in its March 14, 2004, order finding

that venue in the District of Maryland was proper and denying

their request to transfer venue.                 We will consider each issue in

turn.

                                           A.

    We turn first to the default judgment.                      This court reviews

for abuse of discretion a district court’s grant of sanctions

under Rule 37, including the imposition of a default judgment.

Anderson    v.    Found.    for    Advancement,       Educ.     and     Emp’t    of   Am.

Indians, 155 F.3d 500, 504 (4th Cir. 1998).                       “In the case of

default, the range of discretion is more narrow than when a

court    imposes     less   severe       sanctions.”       Hathcock      v.     Navistar

     Acord did not pay the sanction,                      and   was   therefore       not
released, until November 17, 2009.

                                           16
Int’l Transp. Corp., 53 F.3d 36, 40 (4th Cir. 1995) (internal

quotation marks omitted).

                                             1.

      The    district       court     imposed      a   default    judgment   on    the

defendants       pursuant     to     Rules   16(f)     and    37(b)(2)(A)(vi)     based

primarily        on   their    failure       to   participate     in   the   pretrial

process.     Under Rule 16(f)(1),

      [o]n motion or on its own, the court may issue any
      just orders, including those authorized by Rule
      37(b)(2)(A)(ii)-(vii), if a party or its attorney:

      (A) fails to appear at a scheduling or other pretrial
      conference;

      (B) is substantially unprepared to participate--or
      does not participate in good faith--in the conference;
      or

      (C) fails        to     obey    a   scheduling     or    other   pretrial
      order.

Fed. R. Civ. P. 16(f)(1).                 Rule 37(b)(2)(A)(ii)-(vii) lists a

variety     of    sanctions,       including       “prohibiting    the   disobedient

party from supporting or opposing designated claims,” “striking

pleadings in whole or in part,” “staying further proceedings

until the order is obeyed,” “dismissing the action or proceeding

in whole or in part,” and “rendering a default judgment against

the disobedient party.”               Fed. R. Civ. P. 37(b)(2)(A)(ii)-(vi).

We have previously upheld default judgment as a sanction for

discovery abuses under Rule 37.                   See Anderson, 155 F.3d at 504-

05.   We see no reason to treat misconduct during the pretrial

                                             17
process       as     different          from      misconduct      during        the    discovery

process.          See Newman v. Metro. Pier & Exposition Auth., 962 F.2d

589, 590-91 (7th Cir. 1992) (holding that failure to participate

in the pretrial process is a ground for default judgment).

       Recognizing the seriousness of the imposition of default

judgment, we have instructed district courts to apply a four

part test when determining appropriate sanctions under 37(b):

“(1) whether the noncomplying party acted in bad faith; (2) the

amount of prejudice his noncompliance caused his adversary . .

.;    (3)    the     need        for    deterrence        of    the    particular       sort   of

noncompliance;             and    (4)       the    effectiveness          of    less    drastic

sanctions.”          Mut. Fed. Sav. and Loan Ass’n v. Richards & Assoc.,

Inc.,       872     F.2d    88,        92   (4th    Cir.       1989)   (citing        Wilson   v.

Volkswagen of Am., Inc., 561 F.2d 494, 503-05 (4th Cir. 1977)).

In Mutual Federal Savings and Loan Association, we noted that

the Wilson factors balance a “district court's desire to enforce

its discovery orders” and a “party’s rights to a trial by jury

and a fair day in court.”                   872 F.2d at 92.

       We    emphasize,          however,         that    our   review     of    the    district

court’s determination is a deferential one, in recognition that

“it    is     the     district         court      judge    who     must    administer      (and

endure)” the proceedings.                   Lee v. Max Int'l, LLC, 638 F.3d 1318,

1320 (10th Cir. 2011); see also id. (advising appellate courts

not “to draw from fresh springs of patience and forgiveness”).

                                                   18
This     court    has    “emphasized          the       significance         of    warning       a

defendant about the possibility of default before entering such

a harsh sanction.”          Hathcock, 53 F.3d at 40.                         However, in a

similar context--the failure to prosecute a case--the Supreme

Court has said “[n]or does the absence of notice as to the

possibility of dismissal or the failure to hold an adversary

hearing    necessarily      render       such       a    dismissal        void.”         Link    v.

Wabash R.R., 370 U.S. 626, 632 (1962).                          Indeed, in the context

of    sanctions    for    abuse    of    discovery,            the       Supreme    Court       has

warned    that    appellate       courts          “tend[]     .     .    .   to    be    heavily

influenced by the severity of outright dismissal as a sanction .

. . But here, as in other areas of the law, the most severe in

the    spectrum    of    sanctions       .    .     .    must      be    available       to     the

district court.”         Nat'l Hockey League v. Metro. Hockey Club, 427

U.S. 639, 642-43 (1976).

                                              2.

       Appellants Acord and Ortega argue that the district court

abused    its    discretion       when       it    entered         the    default       judgment

because it did not properly apply the Wilson factors and did not

warn them that it was considering entering default judgment.

Although the district court did not expressly articulate these

factors, we will nevertheless uphold a default judgment when it

is clear from the record that the district court did not abuse

its    discretion.        See   Mobil        Oil        Co.   de    Venezuela       v.    Parada

                                              19
Jimenez, 1993 U.S. App. LEXIS 4648 at *8 (4th Cir. March 9,

1993) (unpublished).              In analyzing the Wilson factors on these

facts, we find such clarity here.

                                            a.

       First,       the     record   reflects    a     pattern      of    noncompliance

suggesting bad faith.                See Mut. Fed., 872 F.2d at 93.                     The

district       court        was   repeatedly     compelled         to     admonish      the

Appellants, even after it warned them that it was going to take

the pretrial process “very seriously.”                      J.A. 118.        Appellants

made no effort to acknowledge their obligations. 8                        Acord did not

even       attempt     to     prepare      for   pretrial         proceedings,       filed

meritless motions and made little, if any, effort to comply with

the district court's injunctions.                    He described his litigation

strategy as “hopefully deplet[ing] [Mason's] war chest.”                               J.A.

1106A.

       While Ortega’s behavior may have been less egregious than

Acord’s,      it     nevertheless       manifested     an    identical      posture      of

resistance.          Moreover,       her   efforts    to    pin    the    blame   on    her

former attorney are unpersuasive.                     The record contains three

letters      from     Laubscher      to    Ortega,     as   well     as    emails      from

Laubscher to Acord, in which Laubscher explains that he needs

       8
       We previously upheld default judgment after a mere 13
months of “subterfuge.”     Mut. Fed., 872 F.2d at 94.  Here,
Ortega has disregarded the court for nearly 6 years.

                                            20
both     Ortega’s     cooperation      and     payment      for        his   services.

Laubscher continued to represent Ortega even after warning that

he was going to withdraw if his date for payment came and went.

Moreover, we have previously upheld a district court’s entry of

default judgment against defendants who so failed to communicate

with    their   attorney      that    their    attorney      withdrew        from   the

representation.       Home Port Rentals, Inc. v. Ruben, 957 F.2d 126,

132    (4th   Cir.   1992).      On    these    facts,      we    cannot     interpret

Ortega’s continued disregard for the district court as anything

other than bad faith.

                                         b.

        Turning to the second Wilson factor, we believe there was

prejudice here.        The district court specifically explained that

Appellants’ noncompliance prejudiced Young Again:

       The concern that I have as a judge trying to try a
       case is that I can’t try cases fairly to both sides if
       I don’t have . . . meaningful participation in the
       significant endeavors required to go to trial and to
       comply with the pretrial rules of this court.    Those
       rules are designed to provide for a fair trial.

J.A.    3329.      Moreover,    we    note    that   this    is       an   intellectual

property case in which Appellants allegedly continued to use

Young    Again’s     property   despite       injunctions        to    the   contrary.

Given the impermanence of the internet, over which Appellants

traded Young Again’s work, each day of delay is a day over which

evidence of the original infringement may degrade.                           Moreover,

                                         21
Acord   himself     stated   that   his    goal   was    to     force   Mason   to

“deplete his war chest” defending this litigation.                J.A. 1106(A)

                                     c.

       With respect to the third Wilson factor, we have previously

found that “stalling and ignoring the direct orders of the court

with    impunity”     is     “misconduct”     that      “must     obviously     be

deterred.”    Mut. Fed., 872 F.2d at 93.          Appellants’ behavior can

only be described as ignoring the court’s orders, even when the

court took additional, non-required steps to ensure that they

were aware of their obligations.              For example, on March 19,

2009, the court sent a memorandum to the parties “to remind

[them] of the pretrial conference and hearing.”                  J.A. 2602.     As

discussed above, Ortega refused to participate in the pretrial

process with her attorney, despite the district court's orders.

Instead, she left her attorney to make last minute filings aimed

at preserving her rights, in consequence of which the case could

not efficiently move forward.             Acord obstructed proceedings by

making frivolous filings while ignoring mandatory filings.                      We

find this conduct, especially when taken with their other sloppy

tactics, such as their overuse of the “Attorneys’ Eyes Only”

designation, to be precisely the kind of behavior that courts

need to deter.

                                     22
                                           d.

     Turning to the fourth Wilson factor, since Acord and Ortega

showed no interest in taking the steps necessary to defend this

case, we see no effective lesser sanction.                         Looking first at

Acord, the court had already issued sanctions under Rule 11 to

no avail.        Acord’s statement that he did not participate in the

pretrial    process      because      it    “boggles           [his]    mind”    further

suggests    that    lesser    sanctions         would    be    futile.     J.A.       3305.

Acord    could    have   hired   an    attorney,         but    chose    not    to,    then

sought to effectively excuse himself from proceedings due to his

pro se status.       While we are sympathetic to the challenges faced

by pro se litigants, we cannot exercise that sympathy unless

they at least try to participate. 9                     And although the district

court    could     indeed    have     imposed      monetary       sanctions      against

Ortega in the first instance, given the pattern of resistance in

which she engaged in concert with Acord, we cannot say that the

district court abused its discretion in entering the default

judgment against them both.

     9
       Acord claims that he intended to participate in the
pretrial proceedings by adopting Ortega’s pretrial submissions
but he did not seek to do so until the pretrial hearing, well
after the filing deadline.     This is too late.  The district
court set deadlines, which he ignored.

                                           23
                                                  3.

       Appellants argue that default judgment is improper because

the    district         court   did    not       warn       them     of    the   possibility       of

default judgment.               As an initial matter, we believe that the

court’s March 19, 2009, memorandum to the parties in which it

said    that      it     planned      to    rule       on    Young        Again’s     motions     for

default judgment, gave Appellants notice that default judgment

was a possibility.

       While it is true that the district court did not explicitly

warn    Appellants         that       it    would       definitely           enter     a     default

judgment at the March 23 hearing, we find that they surely had

constructive           notice    that       it    might:        the       district     court      had

expressed         its     displeasure           about        poor     compliance           with   the

injunctions; 10 Young Again had repeatedly sought sanctions and

the    district         court   said       it    was    on     the    verge      of   sanctioning

Appellants several times; 11 the district court then said that it

took        the   pretrial         process         very       seriously,            even     sending

Appellants a memorandum telling them that it was going to rule

on     Young      Again’s       motions          for        default       judgment,        and    yet

       10
       For example, on August 3, 2004, the district court stated
that Appellant’s compliance with the injunctions was “neither in
form nor substance what the court had contemplated.” J.A. 509.
       11
        For example, on November 9, 2004, the district court
explicitly contemplated sanctions saying, “I just don’t think
that this can go on any further.” J.A. 3559.

                                                  24
Appellants still took no steps to participate in this pretrial

process.       See Adams v. Trs. of the N.J. Brewery Emps. Pension

Trust Fund, 29 F.3d 863, 871 (3d Cir. 1994) (finding that a

party       “had     adequate    opportunity      to    defend     itself    against

dismissal without such formal notice” where the other party had

moved for sanctions).            Although the district court could have

provided more specific notice of default, it certainly made the

intent to act on its displeasure manifest.

       While we believe that Ortega had sufficient notice of the

possibility of default, it is even clearer that Acord did.                         On

at    least    two    additional      occasions   the    district    court    warned

Acord that it was unhappy with his behavior.                     The first was the

May   25,     2004,    hearing   at    which   the     court   departed     from   the

traditional American rule of each side paying its own costs and

ordered Acord to pay Young Again’s costs and fees related to its

first motion to enforce. 12           The second warning was the imposition

of Rule 11 sanctions.            For the foregoing reasons, we hold that

the district court provided sufficient notice to support its

entry of default judgment against Acord and Ortega.

       12
       Ortega was not yet a party in the case when the district
court entered this order.

                                          25
                                          4.

      Appellants    contend       that    the    award    of     $3,832,832.40     was

improper.      We disagree.        The district court took this sum from

Young Again’s expert Richard S. Hoffman, whose report described

Young Again’s damages from Appellant’s infringement, and which

Young Again included as an exhibit in its pretrial submissions.

Appellants never objected to this report either during the March

23,   2009,    hearing,    during    which      Young    Again    presented   it    as

evidence,     or   during    the    pretrial       process      during   which     the

Appellants were supposed to be cooperating with Young Again.

Appellants now contend that the report was hearsay and claim

that the district court is relying on the statements of lawyers,

which “are not evidence.”           Appellant’s Br. 54.            Federal Rule of

Civil Procedure 26(a)(3)(B) dictates that a party waives any

objections to pretrial disclosures unless it raises them within

14 days.      Since Appellants failed to object to the report within

14 days, they have waived any objections.                  Accordingly, we find

that the district court did not abuse its discretion when it

awarded Young Again the sum specified in its expert’s report.

                                          B.

      We now turn to Acord’s contention that the district court

erred when it entered Rule 11 sanctions against him and that it

committed     further     error    when   it     order    him    incarcerated      for

failure to pay these sanctions.                 Rule 11 provides that a court

                                          26
may sanction a party for “presenting to the court a pleading,

written motion, or other paper . . . presented for any improper

purpose,     such   as   to     harass,      cause   unnecessary   delay,   or

needlessly    increase    the    cost     of   litigation,”   or   for   making

factual contentions without evidentiary support.               Fed. R. Civ.

P. Rule 11(b).      We review the imposition of Rule 11 sanctions

for abuse of discretion.           In re Bees, 562 F.3d 284, 287 (4th

Cir. 2009).     We review a district court’s civil contempt order

for abuse of discretion. 13         Ashcraft v. Conoco, Inc., 218 F.3d

288, 301 (4th Cir. 2000).

     13
        Young Again argues that we lack jurisdiction to decide
this issue since it was not explicitly included in the notice of
appeal. We disagree. Rule 3 of the Federal Rules of Appellate
Procedure requires a notice of appeal to “designate the
judgment, order, or part thereof being appealed.” Fed. R. App.
P. 3(c)(1)(B).    This court “liberally construe[s] Rule 3(c)’s
requirements concerning the sufficiency of the notice of appeal
to avoid technical impediments to appellate review.”      In re
Spence, 541 F.3d 538, 543 (4th Cir. 2008) (internal quotation
marks omitted).   “[A]n error in designating the issue appealed
will not result in a loss of appeal as long as the intent to
appeal a specific judgment can be fairly inferred and the
appellee is not prejudiced by the mistake.” Hartsell v. Duplex
Prods., Inc., 123 F.3d 766, 771 (4th Cir. 1997) (citation
omitted).   Whether an appellee is prejudiced is determined by
considering “whether the appellee had notice of the appeal and
an opportunity to fully brief the issue.”         Id.   We have
previously held that arguing the merits of an improperly
designated issue in an opening brief is sufficient to put the
opposing party on notice.     See, e.g., id.; Canady v. Crestar
Mortg. Corp., 109 F.3d 969, 974-75 (4th Cir. 1997).

                                        27
                                              1.

     The district court imposed sanctions both because it found

that the purpose of Acord’s motion was to harass, delay, and

increase     the     costs    of      litigation     and     because        his    motion

“contained       numerous     factual         allegations     without       evidentiary

support.”    J.A. 2306.          Acord disagrees with the district court’s

assessment of his motion and contends that the allegations were

true and that the motion was necessary to prevent Mason from

defaming Acord.           Acord points to no evidence in the record to

support this contention.

     Furthermore, this does not appear to be a case like In re

Bees, in which we found the imposition of Rule 11 sanctions to

be reversible error because the erroneous factual assertions in

the sanctioned party’s filings were isolated, inadvertent, and

in good faith.        562 F.3d at 288.             Instead, the district court

found   Acord’s      motion      to      be    “utterly     devoid    of     any    merit

whatsoever,” and Acord has not presented any argument on appeal

that contradicts this assessment.                  J.A. 2174.        On these facts,

we cannot find that Acord’s meritless motion and other misdeeds

were inadvertent lapses, or otherwise in good faith.                          For these

reasons,    we     find   that     the    district   court     did    not    abuse    its

discretion when it sanctioned Acord.

                                              28
                                             2.

       The     district    court     held    Acord    in     contempt      on   August    6,

2009, when he skipped a hearing that the district court ordered

him to attend after he failed to pay the Rule 11 sanctions

within       thirty    days   of   March     25,     2009.        To   establish      civil

contempt, a movant must demonstrate: “(1) the existence of a

valid    decree       of   which   the      alleged    contemnor          had   actual    or

constructive knowledge; (2) . . . that the decree was in the

movant's ‘favor’; (3) . . . that the alleged contemnor by its

conduct violated the terms of the decree, and had knowledge (at

least constructive knowledge) of such violations; and (4) . . .

that [the] movant suffered harm as a result.”                              Ashcraft, 218

F.3d    at     301    (citation    omitted).         All     of    these    elements     are

clearly established here.              The court assessed sanctions in the

amount of $24,357.00 against the defendant on November 17, 2008.

Acord had knowledge of these sanctions, and he not only violated

the district court’s order to pay, but also failed to appear at

the     show     cause     hearing     regarding       his        civil    contempt      and

incarceration.           He harmed Young Again both by delaying payment

and by continuing to delay the proceedings.                         In light of these

flagrant violations, we hold that the district court did not

abuse its discretion when it held Acord in civil contempt.

                                             29
                                       C.

       Finally, we turn to the sole non-sanctions issue in this

appeal.      Appellants claim that the district court erred in its

March 14, 2004, order finding that venue in the District of

Maryland was proper and denying their request to transfer.                       We

review the district court’s denial of a motion to transfer venue

for abuse of discretion.         Saudi v. Northrop Grumman Corp., 427

F.3d 271, 275 (4th Cir. 2005).

       We begin by noting that venue is a personal privilege of

the defendant that may be waived.                 Leroy v. Great W. United

Corp., 443 U.S. 173, 180 (1979).                 Acord filed his motion to

transfer before Young Again amended its complaint to include

Ortega.      Therefore, Ortega waived her objection to the venue

when   she   admitted    venue   was   proper      in   her   answer   to   Young

Again’s amended complaint and thereby failed to object to venue

in the district court.           See Sucampo Pharm., Inc. v. Astellas

Pharma, Inc., 471 F.3d 544, 549 (4th Cir. 2006) (“Because a

motion    under   Rule   12(b)(3)   is      a   disfavored    12(b)    motion,   a

defendant will have to raise the forum selection issue in her

first responsive pleading, or waive the clause.”); United States

v. Stewart, 256 F.3d 231, 238 (4th Cir. 2001) (“If an objection

to venue is not raised in the district court, the issue is

waived on appeal.”).

                                       30
      As to Acord, we find that venue in the District of Maryland

was proper under 28 U.S.C. § 1391(b)(2), which states that venue

is proper in “a judicial district in which a substantial part of

the events or omissions giving rise to the claim occurred, or a

substantial part of property that is the subject of the action

is   situated.”       Young   Again     argues    that    it    entered   into    an

agreement with Acord and Nutrition to resell its products.                      When

ruling on Acord’s motion, the district court found that it “must

accept for purposes of this motion, the contract between the

parties,   which      underlies   the    breach    of    contract      claim,    was

entered into in Maryland, and Internet traffic was directed into

Maryland and resulted in sales.              Therefore, venue is proper in

Maryland.”      Young Again, 307 F. Supp. 2d at 718.

      Acord has not contested the district court’s finding that

the parties formed the contract in Maryland.                   Indeed, Appellants

now rest their venue argument entirely on the claim that Young

Again was not a Maryland corporation in good standing when it

filed   the   original    complaint.         Since      Acord    has   waived    any

argument that the parties did not enter into the contract in

Maryland, and the injury to Young Again--both from the breach of

contract and the intellectual property claims--has occurred in

Maryland, we hold that the district court did not abuse its

discretion in holding that venue is proper in Maryland.                          Cf.

CIENA   Corp.    v.   Jarrard,    203   F.3d     312,    318    (4th   Cir.   2000)

                                        31
(finding venue to be proper in the district where the injury

caused by the breach of contract would be felt); Du-Al Corp. v.

Rudolph    Beaver,     Inc.,   540    F.2d     1230,   1233    (4th    Cir.     1976)

(finding venue to be proper in the district in which partial

performance occurred and where steps to form the contract were

taken).

                                       III.

     For    the      reasons   discussed        above,    we    find     that    the

Appellants’    bad    faith    throughout      this    litigation      process    was

sufficiently      egregious    to    justify    the    extraordinary     sanctions

imposed on them.        Accordingly, we hold that the district court

did not abuse its discretion.

                                                                          AFFIRMED

                                        32