Court Opinion

ID: 9001882
Source: CourtListenerOpinion
Date Created: 2022-11-27 13:13:06.090427+00
Date Added: 2024-06-11T17:11:12.291340
License: Public Domain

FERNANDEZ, Circuit Judge,
concurring:
I concur in Judge Reinhardt’s fine opinion. I write separately to express only one reservation and to underscore one limitation.
My reservation is simply that I do not read the authorities regarding freeze orders quite as expansively as Judge Reinhardt does. Lanham Act cases, like this one, are very similar to traditional tort cases sounding in unfair competition. I think that the Supreme Court’s concern about the use of freeze orders was very well taken. The expression of that concern appears in the quotation from De Beers, which is set forth in Judge Reinhardt’s opinion. The danger that people will start seeking what amount to attachment orders in simple tort cases is substantial. Nevertheless, it is true that we have made it clear that freeze orders are proper where some form of equitable relief is sought. See Republic of the Philippines v. Marcos, 862 F.2d 1355, 1361 (9th Cir.1988) (en banc), cert. denied, 490 U.S. 1035, 109 S.Ct. 1933, 104 L.Ed.2d 404 (1989). An accounting is a form of equitable relief and an accounting is proper in this kind of case. That, however, leads to the limitation that I wish to underscore.
In Marcos we allowed a freeze of “certain assets” in order to preserve them because those assets were, arguably, subject to the imposition of a constructive trust. 862 F.2d at 1364.
Here there is no pretense of freezing particular assets which are subject to some sort of constructive trust. This is a prejudgment freeze of everything the appellants own — it is sweeping, general, and very broad. It is the kind of order that could drive an opponent to the wall regardless of the ultimate merits of the action. It is a frightening example of the reach of the court’s injunctive power, and that in a case where an attachment would not lie and an insubstantial bond was required. At least in FTC v. World Wide Factors, Ltd., 882 F.2d 344, 346 (9th Cir.1989), the owner of the fraudulent enterprise had already been found guilty of fraud and had already agreed to pay restitution of over $1 million. The freezing of the assets of his corporation at the behest of the Federal Trade Commission was not very shocking. And in SEC v. Manor Nursing Centers, Inc., *564458 F.2d 1082, 1088, 1105-06 (2d Cir.1972), the case had already been adjudicated after a five-day trial and the temporary freeze, which troubled the court, was designed to preserve assets which were to be paid to a trustee for defrauded consumers. Neither of those cases is like the case at hand.
However, as Judge Reinhardt points out, the appellants have not properly raised any appellate issue regarding the scope of the freeze order. They have only attacked the district court’s power to ever issue such an injunction in a Lanham Act case. Thus, all we need to hold is that in this kind of case a district court can in some instances issue a freeze of some assets for some period of time. That, as I see it, is all we do hold. That alone is fatal to the appellants’ case because of the form in which they have chosen to present it to us.