Court Opinion

ID: 4125165
Source: CourtListenerOpinion
Date Created: 2017-02-10 17:01:07.389622+00
Date Added: 2024-06-11T14:37:30.047995
License: Public Domain

FILED
                                                               United States Court of Appeals
                                                                       Tenth Circuit

                                                                    February 10, 2017
                                       PUBLISH                     Elisabeth A. Shumaker
                                                                       Clerk of Court
                        UNITED STATES COURT OF APPEALS

                                   TENTH CIRCUIT

 UNITED STATES OF AMERICA,

          Plaintiff - Appellee,
 v.                                                          No. 16-4008
 DONALD BOWERS,

          Defendant - Appellant.

             APPEAL FROM THE UNITED STATES DISTRICT COURT
                        FOR THE DISTRICT OF UTAH
                      (D.C. No. 2:13-CR-00413-DB-BCW-2)

Submitted on the briefs:*

Stephen R. McCaughey, Attorney at Law, Salt Lake City, Utah, for Defendant-Appellant.

John W. Huber, United States Attorney, District of Utah; Jason R. Burt, Assistant United
States Attorney, Salt Lake City, Utah, for Plaintiff-Appellee.

Before BRISCOE, MATHESON and PHILLIPS, Circuit Judges.

BRISCOE, Circuit Judge.

      *
        After examining the briefs and appellate record, this panel has determined
unanimously that oral argument would not materially assist in the determination of this
appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is, therefore,
submitted without oral argument.
       Defendant Donald Bowers was previously involved in a civil trade secret

misappropriation case that was litigated in the United States District Court for the District

of Utah. During the course of that litigation, Bowers willfully and repeatedly violated a

permanent injunction issued by the district court presiding over the case, and also refused

to purge himself of civil contempt. His actions resulted in findings of civil contempt

against him, judgments against him for the plaintiff’s attorneys’ fees, and, ultimately, a

criminal referral to the United States Attorney for the District of Utah. A federal grand

jury subsequently indicted Bowers on two counts of contempt, in violation of 18 U.S.C.

§ 401(3). The case proceeded to trial, where a jury found Bowers guilty of both counts.

Bowers was sentenced to a term of imprisonment of fifteen months, to be followed by a

thirty-six month term of supervised release. He was also directed, as a condition of

supervised release, to make monthly payments on the outstanding amount owed by him to

the plaintiff in the underlying civil case.

       Bowers now appeals, arguing that the district court erred in (1) imposing a special

condition of supervised release requiring him to make monthly payments on the

outstanding judgments owed to the plaintiff in the civil case, (2) denying his motion for

disclosure of the criminal referral, and (3) sentencing him to a term of imprisonment that

exceeded six months. Exercising jurisdiction pursuant to 28 U.S.C. § 1291, we affirm in

all respects.

                                              I

       This criminal case has roots in an earlier civil case, ClearOne Communications,

                                              2
Inc. v. Bowers, 643 F.3d 735 (10th Cir. 2011) (Bowers I). The complete factual and

procedural history of that civil case is detailed in Bowers I and will not be repeated here.

Instead, we proceed to outline only the facts necessary to understand how the criminal

charges arose against Bowers.

              The filing of ClearOne’s lawsuit against the WideBand defendants

       In early 2007, ClearOne Communications, Inc. (ClearOne) filed suit in Utah state

court seeking relief for alleged misappropriation of its trade secrets. Those trade secrets,

which ClearOne put to use in audio teleconferencing equipment, “allegedly included an

acoustic echo cancellation algorithm and sub-algorithms, in both source and object code

form, nicknamed the Honeybee Code.” ClearOne Commc’ns, Inc. v. Bowers, 651 F.3d
1200, 1203 n.1 (10th Cir. 2011) (Bowers II). Ultimately named as defendants in the suit

were WideBand Solutions, Inc. (WideBand), which was a Massachusetts corporation, and

Andrew Chiang, Jun Yang, and Lonny Bowers (hereinafter Lonny), all of whom served

as officers of WideBand. Collectively, these defendants will be referred to as the

WideBand defendants. ClearOne’s lawsuit also named two additional corporations:

Versatile DSP, Inc., and Biamp Systems (Biamp). “Chiang, Yang and WideBand

removed the case to federal district court [in Utah] on the basis of diversity jurisdiction.”1

Bowers I, 643 F.3d at 744.

                      Donald Bowers’ initial involvement in the lawsuit

       The defendant in the instant case, Bowers, is the father of Lonny. After ClearOne

       1
           The action was assigned the following case number: 2:07-cv-00037-TC.

                                              3
initiated its lawsuit against the WideBand defendants, Bowers began “loaning money to

the WideBand defendants to pay a portion of the legal fees they were incurring.” Bowers

II, 651 F.3d at 1203. Further, in June 2008, “Bowers and a Georgia-based company he

founded called WideBand Solutions, Inc. (WideBand Georgia), entered into an agreement

with” the WideBand defendants “pursuant to which WideBand would transfer its assets to

WideBand Georgia.” Id. “ClearOne, upon learning of the asset transfer agreement, filed

a motion for a temporary restraining order (TRO) and preliminary injunction to prevent

any transfer of its alleged trade secrets.” Id. at 1204.

       “The district court held a hearing on ClearOne’s motion on June 18, 2008, during

which attorney Randolph Frails appeared by telephone as the legal representative for . . .

Bowers.” Id. “Frails represented during the hearing that the language of the asset

transfer agreement excluded the trade secrets that the WideBand defendants had

purportedly misappropriated from ClearOne.” Id. “Nevertheless, the district court

ordered Frails and . . . Bowers to provide counsel for ClearOne and the WideBand

defendants with copies of the asset transfer agreement.” Id.

       On “June 19, 2008, ClearOne filed a renewed motion for a TRO and preliminary

injunction alleging that, contrary to Frails’ representations, the terms of the asset transfer

agreement included WideBand’s intellectual property, most notably the Honeybee Code.”

Id. “ClearOne that same day also filed with the district court a separate lawsuit against

WideBand Georgia and . . . Bowers alleging fraudulent transfer.” Id. (citing ClearOne

Commc’ns, Inc. v. WideBand Sols., Inc., No. 2:08–CV–00474–TS (D. Utah June 19,

                                               4
2008)).

       On June 26, 2008, the district court held a hearing “to address the asset transfer

agreement.” Id. “Frails again appeared by telephone on behalf of . . . Bowers and

WideBand Georgia.” Id. “During the hearing, the district court issued a TRO prohibiting

the WideBand defendants from transferring the Honeybee Code.” Id. The district court

also, as part of its TRO, “expressly prohibited the transfer of any related items, including

all of the various codes that Yang had allegedly derived from the Honeybee Code while

working for WideBand, and it directed the WideBand defendants to make a full

disclosure and production of all documents relating to the asset transfer agreement.” Id.

       “On July 10, 2008, the district court, prompted by another TRO motion filed by

ClearOne, held a . . . hearing concerning the asset transfer agreement.” Id. Frails

appeared by telephone on behalf of Bowers and WideBand Georgia, and stated that the

asset purchase agreement had been rescinded because Bowers “felt that he was buying

nothing.” Id. (internal quotation marks omitted). “Frails argued that ClearOne’s TRO

motion was moot because no assets had been transferred and the asset transfer agreement

had been rescinded.” Id. The district court, relying on Frails’ representations, “denied

ClearOne’s TRO motion as moot.” Id.

       “In October 2008, the district court granted . . . Bowers’ motion to dismiss

ClearOne’s case against him and WideBand Georgia without prejudice on the basis that

the claims, all of which concerned the purportedly rescinded asset transfer agreement,

were moot.” Id. at 1205.

                                              5
              The trial of ClearOne’s case against the WideBand defendants

       ClearOne’s case against the WideBand defendants ultimately proceeded to trial in

October 2008. “After hearing eleven days of evidence, the jury returned a special verdict

finding in favor of ClearOne on each of its claims against the defendants.” Bowers I, 643
F.3d at 745. The verdict included substantial compensatory damages against all of the

defendants, as well as punitive damages against Chiang and Yang. Id. (detailing the

damages award).

                         Donald Bowers’ reemergence in the case

       “On January 16, 2009, ClearOne filed a motion for an order to show cause why the

WideBand defendants and . . . Bowers should not be held in contempt of the district

court’s June 26, 2008 TRO.” Bowers II, 651 F.3d at 1205. In support of its motion,

ClearOne alleged that on November 6, 2008, the day after the jury returned its verdict in

ClearOne’s case against the WideBand defendants, Bowers filed a statement in

Massachusetts purporting to perfect a security interest in all of WideBand’s assets,

including all of its software and intellectual property, pursuant to Article 9 of the Uniform

Commercial Code. Id.

       “On January 26, 2009, the district court issued an order to show cause directing the

WideBand defendants and . . . Bowers to appear before the court on February 10, 2009,

and show cause why they should not be held in contempt for the reasons alleged in

ClearOne’s motion.” Id. Although the evidence indicated that Bowers was properly

served with the district court’s show cause order, he “failed to appear at the February 10,

                                              6
2009 show cause hearing.” Id.

       On February 24, 2009, the district court issued a written order concluding that

Bowers was effectively subject to the district court’s June 26, 2008 TRO because he had

acted in concert or participation with the WideBand defendants. Id. The district court

also found that on November 6, 2008, Bowers had filed a UCC statement in

Massachusetts listing WideBand as a debtor and describing the relevant collateral as all of

WideBand’s assets, including its intellectual property. Id. Despite these findings and

conclusions, however, the district court “‘continued’ the issue of whether Bowers should

be held in contempt of the district court’s June 26, 2008 TRO, and directed Bowers to

appear in person before the court on March 13, 2009, ‘to show cause why [he] should not

be held in contempt for violating the June 26, 2008 Order.’” Id. (citation omitted). “On

March 5, 2009, the district court vacated its February 24, 2009 show cause order and

ordered that a show cause hearing regarding . . . Bowers would be rescheduled at a future

date.” Id.

                                The permanent injunction

       “On April 9, 2009, the district court issued a permanent injunction against all of

the defendants.” Bowers I, 643 F.3d at 745. The injunction permanently enjoined the

WideBand defendants from disclosing, using or transferring in any way ClearOne’s trade

secret Honeybee Code, as well as “product development documentation for the Honeybee

Code or any other documentation that reveal[ed] the contents of the Honeybee Code.” Id.

(internal quotation marks omitted). The injunction also prohibited the WideBand

                                             7
defendants from marketing, selling, manufacturing, developing, modifying, duplicating,

transporting or delivering any technology that contained the Honeybee Code or any

product that was substantially derived from the Honeybee Code. Id. at 745–46.

                 Continued contempt proceedings against Donald Bowers

       “On April 28, 2009, the district court issued an order rescheduling for June 3,

2009, the show cause hearing regarding . . . Bowers.” Bowers II, 651 F.3d at 1206. “In

its order, the district court directed both . . . Bowers and . . . Frails to appear and testify by

telephone at the June 3, 2009 hearing.” Id. Both men “appeared by telephone at the June

3, 2009 hearing.” Id. At the conclusion of the hearing, the district court “took the matter

of . . . Bowers’ contempt under advisement.” Id.

       Three months later, on September 3, 2009, the district court issued a memorandum

decision and order of contempt based on the evidence presented at the June 3, 2009 show

cause hearing. Id. at 1207. The district court specifically found “Bowers in contempt for

the post-verdict act of filing a UCC financing statement encumbering WideBand’s assets,

as well as for failing to appear at the February 10, 2009 contempt hearing.” Id. “Based

on these findings, the district court directed . . . Bowers to take actions to assure the court

that he had removed any encumbrances he had placed on WideBand’s assets and to pay

ClearOne’s attorneys’ fees and costs associated with the contempt proceedings against

him.” Id.

       “On September 17, 2009, . . . Bowers filed a personal Chapter 7 bankruptcy

petition in Georgia.” Id. “The automatic stay entered in connection with the filing of that

                                                8
bankruptcy petition prevented ClearOne from collecting on the contempt judgment for

fees and costs and prevented, for a period of time, the district court’s consideration of

ClearOne’s subsequent allegations that . . . Bowers was committing additional

contemptuous acts.” Id.

               Violation of the permanent injunction and issuance of a TRO

       “On July 16, 2009, ClearOne moved to enforce the permanent injunction and for

contempt.” Bowers I, 643 F.3d at 746–47. In support of its motion, ClearOne alleged

that the defendants had transferred the assets of WideBand to a new, sham company

called DialHD, Inc. (DialHD). Id. at 747. According to ClearOne, DialHD was

registered to Bowers, was operating out of the same Connecticut office that WideBand

previously occupied, and was continuing the same business as WideBand, including

selling products that incorporated the Honeybee Code. Id. ClearOne also alleged that the

defendants, Bowers, “and WideBand employee David Sullivan ha[d] conspired and

transferred, hidden, and claimed to destroy, the very Wide[B]and assets that th[e] Court

ordered to be preserved in at least three orders, in addition to the Permanent Injunction.”

Id. (internal quotation marks omitted) (brackets in original).

       On July 17, 2009, the district court issued a show cause order directing the

WideBand defendants, Bowers, DialHD, and David Sullivan to appear before the court on

July 31, 2009. At the show cause hearing, the WideBand defendants and Bowers

appeared on their own behalf by telephone. The district court heard testimony from three

ClearOne witnesses and received exhibits submitted by ClearOne. At the conclusion of

                                              9
the hearing, the district court issued a TRO in favor of ClearOne.

       On August 5, 2009, the district court issued a written TRO memorializing its

findings and conclusions. The district court found that ClearOne had established a

substantial likelihood of success on the merits of its claim that certain DialHD products

illegally utilized the Honeybee Code. Id. at 747–48. Accordingly, the district court held

that the DialHD infringing products would be subject to the same restrictions as set forth

in the permanent injunction order regarding WideBand’s infringing products. Id. at 748.

The district court also ordered Bowers and DialHD not to transfer, encumber, pledge,

alienate, or try to dispose of or hide any DialHD assets until further order of the court. Id.

                  Violation of the TRO and issuance of a contempt order

       “On October 22, 2009, ClearOne moved for an order to show cause for violation of

the August 5, 2009 TRO.” Bowers II, 651 F.3d at 1207. ClearOne alleged in its motion

that the WideBand defendants, DialHD, Sullivan and Bowers “had failed to remove from

the market certain offending products, and that a sham Chinese company was utilizing the

Honeybee Code to manufacture offending products for DialHD.” Id.

       The district court held a hearing on ClearOne’s motion on November 9, 2009. Id.

Ten days later, on November 19, 2009, the district court issued an order finding Lonny

Bowers, Yang, WideBand and DialHD in contempt of court for selling a WideBand

offending product in the guise of two DialHD products, and that all of these products

contained the Honeybee Code. Id. The district court’s order did not include Bowers

because, at that time, the automatic stay issued in connection with his Chapter 7

                                             10
bankruptcy proceedings had not yet been lifted.

       The district court also, in pertinent part, (a) expanded its TRO and permanent

injunction to include the offending DialHD products using the Honeybee Code, (b)

directed DialHD and all those working in connection with it to immediately halt all

development, sale and marketing of all DialHD products, including in China, and (c)

directed the contemnors to arrange for delivery to ClearOne of all code and other design

materials and intellectual property covered by the permanent injunction and TRO.

Bowers I, 643 F.3d at 749.

                             Additional contempt proceedings

       “On February 11, 2010, ClearOne filed an ex parte motion for the addition of

. . . Bowers to the district court’s November 19, 2009 contempt order and amended

permanent injunction.” Id. ClearOne alleged in support “that on December 29, 2009, the

bankruptcy court overseeing . . . Bowers’ Chapter 7 bankruptcy proceedings ‘lifted the

automatic stay, specifically to allow the contempt proceedings against . . . Bowers to go

forward.’” Id. (citation omitted). “The district court denied ClearOne’s motion, but

issued a show cause order on April 7, 2010 directing . . . Bowers to ‘appear personally or

through counsel before the court on . . . May 27, 2010[,] . . . to show cause . . . why he

should not be held in contempt of the court’s August 5, 2009 TRO.” Id.

       The district court held the scheduled show cause hearing on May 27, 2010. Id.

Bowers appeared by counsel at the hearing, but did not personally attend. Id. The district

court subsequently issued a memorandum decision and civil contempt order on August

                                             11
13, 2010. Id. The district court found “Bowers ‘in contempt of court for his acts

violating the court’s prohibition on possession, disclosure, use, marketing, or selling

products containing ClearOne’s stolen trade secrets and the court’s prohibition on

diversion of Defendant WideBand[’s] . . . assets.’” Id. (citation omitted) “More

specifically, the district court found that . . . Bowers ‘surreptitiously re-packag[ed] and

s[old] products containing the stolen trade secret’ and ‘participated in the diversion of

WideBand[’s] . . . assets in an attempt to avoid the WideBand Defendants’ obligation to

pay a multi-million dollar judgment to ClearOne.’” Id. (citation omitted). The district

court also “found that . . . Bowers ‘ha[d] committed fraud on the court by making false

statements to the court and withholding material information from the court in a manner

obstructing the court’s ability to enforce its orders and final judgment against the

WideBand Defendants.’” Id. at 750 (citation omitted).

       Based upon these findings, the district court (a) expanded its August 5, 2009 TRO

to expressly include Bowers, (b) modified its amended permanent injunction to reflect

these findings, (c) directed Bowers, and all those working in active concert or

participation with him, to immediately halt all development, sales, and/or marketing of all

DialHD products, including in China, (d) directed Bowers to deliver to ClearOne or its

designated agent all code and other design materials and intellectual property covered by

the amended permanent injunction, (e) directed Bowers to self-surrender to the court on

October 13, 2010, for incarceration unless and until he proved that he had complied with

the court’s directives, and (f) directed Bowers to pay ClearOne’s reasonable attorneys’

                                              12
fees and costs in pursuing the contempt order against him. Id.

       “On that same date, August 13, 2010, the district court also issued a second

amended permanent injunction against all of the defendants in the case, as well as

. . . Bowers.” Id. The injunction prohibited Bowers and the defendants

       from disclosing, using or transferring in any way the . . . Honeybee Code
       (including its unique algorithms or sub-algorithms that [we]re not in the
       public domain), whether in the form of source code, object code, or any
       other form, and any code or product substantially derived from the
       Honeybee Code, as well as from disclosing, using, or transferring in any
       way the product development documentation for the Honeybee Code or any
       other documentation that reveal[ed] the contents of the Honeybee Code.

Id. (quotation marks omitted).

       “On October 13, 2010, the district court held a hearing to determine whether

. . . Bowers ‘had purged himself of contempt by disclosing and providing [the] specified

information and infringing products.’” Id. (citation omitted). Bowers did not appear at

the hearing despite being ordered to do so by the district court. At the conclusion of the

hearing, “the district court found ‘that . . . Bowers ha[d] not purged himself of contempt

and [wa]s subject to arrest and incarceration in an attempt to coerce his compliance with

the court’s Contempt Order.’” Id. (citation omitted). “Consequently, that same day the

district court issued a bench warrant for . . . Bowers for failure to appear before the

court.” Id.

                                   Bowers’ civil appeals

       In Bowers I, Bowers challenged the district court’s exercise of personal

jurisdiction over him. More specifically, he argued “that the district court could not have

                                              13
properly exerted personal jurisdiction over [hi]m at the July 31, 2009 contempt hearing

because ClearOne had never filed ‘an actual complaint’ against [hi]m.” Id. at 775. This

court rejected that argument, concluding that Bowers was “subject to the district court’s

orders because [he] had actual notice of the district court’s original permanent injunction

and wa[s] found by the district court to have acted in concert with the WideBand

defendants in violating that injunction.” Id. at 776.

       In Bowers II, Bowers appealed from the district court’s contempt orders, arguing

that the district court erred (1) in holding him in contempt of its injunctive orders, (2) in

determining that it could exercise personal jurisdiction over him, (3) in directing him to

appear in person at the July 31, 2009 show cause hearing, and in turn denying him the

opportunity to present evidence and cross-examine ClearOne’s witnesses due to his

failure to appear at that hearing, and (4) in refusing to recuse itself from the case filed by

ClearOne. This court rejected Bowers’ arguments and affirmed the district court’s

contempt orders. Bowers II, 651 F.3d at 1203, 1219.

             Summary of the civil judgments entered against Donald Bowers

       On April 21, 2010, the district court entered a civil judgment ordering Bowers to

pay ClearOne $57,188.61 in attorneys’ fees. This judgment was the result of the district

court’s September 3, 2009 order holding Bowers in civil contempt for violating its pretrial

order enjoining the encumbrance or transfer of the Honeybee Code.

       On December 8, 2011, the district court entered a civil judgment ordering Bowers

to pay ClearOne costs and fees totaling $207,250.40 (of this amount, Bowers was

                                              14
personally liable for $22,743.88 and jointly and severally liable with other civil case

defendants for $184,506.52). This judgment was the result of the district court’s August

13, 2010 order finding Bowers in civil contempt for his role in violating the permanent

injunction prohibiting any further use of the Honeybee Code and products that unlawfully

incorporated the Honeybee Code.

       On May 13, 2013, the district court entered a civil judgment ordering Bowers to

pay ClearOne $8,648 in appellate attorneys’ fees in connection with the appeal in

Bowers I.

       According to the record in this case, those judgments remain unpaid.

                                   The criminal referral

       On December 2, 2010, the district court judge who presided over the civil

proceedings sent to the United States Attorney for the District of Utah a memo titled

“Referral of Criminal Contempt Proceedings Against Lonny Bowers, Donald Bowers,

and Jun Yang under Fed. R. Crim. P. 42.” Supp. ROA, Vol. 3 (Memo at 1). The memo

outlined what had transpired in the civil case and asserted that the conduct of Bowers,

Lonny and Yang had prevented the district court from providing effective relief to

ClearOne and threatened to undermine the autonomy and effectiveness of the federal

court system. The memo outlined the elements of a criminal contempt charge and

expressed the district judge’s belief that those elements were satisfied. Ultimately,

however, the memo acknowledged that the decision whether to criminally prosecute the

three individuals was a discretionary one to be made solely by the United States

                                             15
Attorney’s office.

                                              II

       The criminal proceedings at issue in this appeal were initiated on June 5, 2013,

when a federal grand jury returned a four-count indictment against Bowers, Lonny

Bowers, and Yang. As relevant to this appeal, Count 1 of the indictment charged all three

defendants with willfully disobeying the district court’s April 2009 permanent injunction

order, in violation of 18 U.S.C. § 401(3). Count 4 of the indictment charged Bowers with

willfully disobeying the district court’s August 13, 2010 civil contempt order, also in

violation of 18 U.S.C. § 401(3).

       On March 13, 2015, Bowers, through counsel, filed a motion asking the district

court to compel the government to provide him with “a copy of the criminal referral”

made by the district court judge who presided over the civil proceedings. ROA, Vol. 4 at

81. On June 12, 2015, Bowers filed a similar pleading again seeking disclosure of the

criminal referral. Bowers argued in that pleading that “the criminal referral [wa]s in the

nature of a police report or written complaint and [he] [wa]s entitled to a copy of that

referral.” ROA, Vol. 5 at 74. Bowers also argued that “[d]ue process and fundamental

fairness require[d] that [he] receive a copy of that referral.” Id. The district court denied

Bowers’ motions in an oral ruling issued on June 18, 2015. On July 13, 2015, the district

court issued a written order memorializing its ruling.

       The case proceeded to trial on September 21, 2015. The jury, after hearing three

days of testimony, found Bowers guilty of Counts 1 and 4 as charged in the indictment.

                                             16
       On December 10, 2015, the district court sentenced Bowers to a term of

imprisonment of fifteen months, to be followed by a three-year term of supervised

release. The district court also ordered Bowers, as a condition of his term of supervised

release, to make monthly payments to ClearOne on the outstanding civil judgments, with

the monthly payment amount subject to review by the probation office.

       The district court entered final judgment on January 11, 2016. The final judgment

memorialized and effectively revised the special condition of supervised release imposed

by the district court:

       The defendant shall pay any civil obligations to ClearOne . . . as ordered in
       civil case 2:07-cv-00037[–]TC at a minimum rate of $200 a month or as
       directed by the probation officer.

ROA, Vol. 6 at 584. Bowers filed a notice of appeal on January 12, 2016.

       On March 28, 2016, the district court entered an amended judgment in order to

remove an entry in the original judgment that erroneously directed Bowers to pay a

certain amount of restitution to ClearOne. On April 1, 2016, Bowers filed an objection to

the amended judgment, arguing for the first time that the district court lacked “jurisdiction

to order [him] to pay obligations owed to Clear One stemming from civil case 2:07-cv-

00037[–]TC, in that he was not a party to that case and that there [wa]s no other basis to

require [him] to pay the money ordered.” Supp. ROA, Vol. 1 at 1. Bowers asked the

district court to delete this special condition of supervised release from the amended

judgment. Bowers also filed an amended notice of appeal on April 8, 2016.

       On June 21, 2016, the district court issued an order overruling Bowers’ objection

                                             17
to the amended judgment. In its order, the district court noted that at the time of

sentencing it “explained that . . . Bowers would be required to pay down his civil

judgment as a condition of his supervised release.” Supp. ROA, Vol. 2 at 1. The district

court also noted that the probation office “received the specific amount relating to . . .

Bowers’ outstanding judgments owed to ClearOne based on his conduct during the [civil]

litigation.” Id. Lastly, the district court noted that it exercised its discretion to require

Bowers “to pay those judgments, at the rate of $200 a month, as a special condition of

supervised release,” and that “[t]his special condition did not involve a greater

deprivation of liberty than reasonably necessary, . . . was consistent with pertinent policy

statements of the Sentencing Commission, and was reasonably related to the factors

outlined in 18 U.S.C. §§ 3553(a) and 3583(d).” Id. at 2.

                                               III

       Bowers asserts three issues in this appeal. First, he argues that the district court

abused its discretion by ordering him, as a special condition of supervised release, to

make monthly payments to ClearOne. Second, he argues that the district court abused its

discretion by denying his motion to compel the government to disclose the criminal

referral. Third, he argues that his sentence is illegal because 18 U.S.C. § 402 limits

sentences for crimes such as those he committed to no more than six months. As we

discuss in greater detail below, all of these issues lack merit.

                        Challenge to condition of supervised release

       In his first issue on appeal, Bowers challenges the special condition of supervised

                                               18
release imposed by the district court that requires him to pay any civil obligations to

ClearOne at a rate of $200 per month or as otherwise directed by his probation officer.

According to Bowers, “it appears that the district court was under the mistaken belief that

there was a ‘verdict’ and a judgment in the underlying civil case against Donald Bowers

that he ‘needed to pay.’” Aplt. Br. at 20. Although Bowers concedes that it is

“appropriate for a court to order, as part of a condition for supervised release, that a

defendant make payments as ordered by another court,” he argues that “the problem here

is that [he] was not a litigant in the underlying civil case and there was never any civil

verdict or judgment against him.” Id. at 20–21. In sum, Bowers argues that he “was

never a party to the [civil] matter, the court ordered no civil obligations to be paid by him,

and therefore, it is inappropriate for the district court [in this case] to now order [him] . . .

to pay on a civil obligation for which he was not found liable or been otherwise ordered

[to pay].” Id.

       We review the imposition of a special condition of supervised release for an abuse

of discretion. United States v. Munoz, 812 F.3d 809, 817 (10th Cir. 2016). Notably, we

have held that “[d]istrict courts have broad discretion to impose special conditions of

supervised release.” United States v. Bear, 769 F.3d 1221, 1226 (10th Cir. 2014). As we

noted In Bear,

       [t]he limits of that discretion are prescribed by 18 U.S.C. § 3583(d), which
       requires the conditions (1) be reasonably related to the nature and
       circumstances of the offense, the defendant’s history and characteristics, the
       deterrence of criminal conduct, the protection of the public from further
       crimes of the defendant, or the defendant’s educational, vocational,

                                               19
       medical, or other correctional needs; (2) involve no greater deprivation of
       liberty than is reasonably necessary to achieve the purpose of deterring
       criminal activity, protecting the public, and promoting the defendant’s
       rehabilitation; and (3) be consistent with any pertinent policy statements
       issued by the Sentencing Commission.

Id.

       The central premise of Bowers’ challenge to the special condition imposed upon

him—that the district court in the civil action never ordered any civil obligations to be

paid by him—is patently false. In fact, the district court in the civil action (Case No.

2:07-cv-00037-TC) entered three separate judgments against Bowers and in favor of

ClearOne: (1) the April 21, 2010 judgment for $57,188.61; (2) the December 8, 2011

judgment for $207,250.40; and (3) the May 13, 2013 judgment for $8,648.00. The

purpose of all three judgments was to direct Bowers to reimburse ClearOne for attorneys’

fees and costs expended in connection with the civil contempt proceedings and related

appeal. All three of the judgments are now final and, according to the record on appeal,

remain unpaid.2

       Moreover, we conclude that this special condition of supervised release otherwise

satisfies the requirements of 18 U.S.C. § 3583(d). To begin with, the special condition is

reasonably related to the nature and circumstances of Bowers’ offenses of conviction

because it seeks to remedy the expenses that were incurred by ClearOne as a direct result

       2
        ClearOne’s CEO, Zee Hakimoglu, appeared at the sentencing proceeding and
gave a statement to the district court. In particular, Hakimoglu stated that Bowers had not
returned the Honeybee Code to ClearOne and had not paid “a penny” to ClearOne on the
outstanding judgments. ROA, Vol. 8 at 1080.

                                             20
of Bowers’ contemptuous conduct. It is also reasonably related to Bowers’ history and

characteristics because the monthly amount directed to be paid was specifically tied to

Bowers’ financial circumstances. And, we note, it effectively affords the probation

officer with discretion to review that amount as necessary. Further, the special condition

does not impose any deprivation of liberty upon Bowers because it simply requires him to

make payments on already existing legal obligations. See United States v. Mitchell, 429
F.3d 952, 952–53 (10th Cir. 2005) (“[B]ecause Ms. Mitchell was already legally

obligated to pay the restitution from her previous convictions, the challenged condition of

supervised release” requiring her to remain current on her restitution payments “is not a

‘deprivation of liberty.’”). Lastly, there is no assertion by Bowers that the special

condition is inconsistent with any pertinent policy statements issued by the United States

Sentencing Commission.

       In sum, we conclude that the district court did not abuse its discretion in requiring

Bowers, as a special condition of supervised release, to pay a set minimum monthly

amount towards the judgments entered against him and in favor of ClearOne in the

underlying civil action.

                     Denial of motion to disclose the criminal referral

       In his second issue on appeal, Bowers challenges the district court’s denial of his

motion to disclose the criminal referral. We review for abuse of discretion the denial of a

motion for discovery in a criminal case. United States v. Apperson, 441 F.3d 1162, 1191

(10th Cir. 2006).

                                             21
       After examining the record on appeal, including the criminal referral filed under

seal, we conclude that the district court did not abuse its discretion in denying Bowers’

motion to disclose the criminal referral. To begin with, nothing in the criminal referral

rendered it discoverable under Federal Rule of Criminal Procedure 16. More specifically,

the criminal referral did not include oral or written statements made by Bowers, reports of

examinations or tests, or any expert witness testimony or opinions. Fed. R. Crim. P.

16(A), (B), (F), (G). Further, nothing therein was “material to preparing the defense,”

used in the government’s case-in-chief, or “obtained from or belong[ed] to” Bowers. Fed.

R. Crim. P. 16(E).

       Nor did Brady v. Maryland, 373 U.S. 83 (1963) (requiring prosecution to disclose

material exculpatory evidence to the defendant), or Giglio v. United States, 405 U.S. 150

(1972) (holding that prosecution is obligated to disclose information bearing on a

witness’s credibility where that evidence may be material to the defendant’s guilt or

punishment) require disclosure of any part of the criminal referral. That is because

nothing in the referral was exculpatory in nature, nor did anything therein concern the

credibility of any witness who appeared at trial.

       Finally, the Jencks Act, 18 U.S.C. § 3500, which requires the government to

disclose to criminal defendants any statement made by a government witness that is in the

possession of the United States once that witnesses has testified, is inapplicable. That is

because the criminal referral contained only information from the district court judge who

presided over the civil proceedings, and that judge did not testify as a witness at Bowers’

                                             22
criminal trial.

       In sum, nothing in the criminal referral rendered it discoverable by Bowers.

                                   Legality of his sentence

       In his appellate reply brief, Bowers argues for the first time that his fifteen-month

term of imprisonment is “illegal” under 18 U.S.C. § 402. Aplt. Reply Br. at 3. Where, as

here, “an appellant raises an issue for the first time in his reply brief, we generally deem it

waived.” United States v. Henry, 839 F.3d 1271, 1275 n.1 (10th Cir. 2016); But see

United States v. Courtney, 816 F.3d 681, 684 (10th Cir. 2016) (“[W]hen an error is

obvious enough and satisfies Rule 52(b), an appellate court, in its discretion, may

recognize the error notwithstanding briefing deficiencies.”).

       Even if we were to exercise our discretion and review the issue under the plain

error standard, it is clear that Bowers is not entitled to relief. As we have noted, Bowers

was charged with and convicted of violating 18 U.S.C. § 401(3). That statute provides:

       A court of the United States shall have the power to punish by fine or
       imprisonment, or both, at its discretion, such contempt of its authority, and
       none other, as––
       ***
       (3) Disobedience or resistance to its lawful writ, process, order, rule, decree,
       or command.

Id. As the Seventh Circuit recently noted, one of the “unusual feature[s]” of § 401 is that

it “carries no statutorily authorized maximum punishment.” United States v. Trudeau,

812 F.3d 578, 585 (7th Cir. 2016) (affirming ten-year term of imprisonment imposed for

conviction under § 401(3)); see United States v. Halliday, 665 F.3d 1219, 1226 (10th Cir.

                                              23
2011) (affirming ten-month term of imprisonment imposed for criminal contempt

conviction under § 401 arising out of defendant’s refusal to testify before a grand jury);

United States v. Voss, 82 F.3d 1521, 1527–28 (10th Cir. 1996) (affirming sentences

ranging from twelve to twenty-four months’ imprisonment imposed on three defendants

convicted of violating § 401(3) for refusing to produce subpoenaed documents). Notably,

the revised presentence report (PSR) in this case properly advised Bowers of this fact and

Bowers made no objection to the revised PSR. See ROA, Vol. 7 at 844 (stating that “18

U.S.C. § 401(3) does not contain a statutory maximum penalty”).

       The statute that Bowers now cites in his appellate reply brief, § 402, is entitled

“Contempts constituting crimes” and provides, in pertinent part:

       Any person, corporation or association willfully disobeying any lawful writ,
       process, order, rule, decree, or command of any district court of the United
       States or any court of the District of Columbia, by doing any act or thing
       therein, or thereby forbidden, if the act or thing so done be of such character
       as to constitute also a criminal offense under any statute of the United
       States or under the laws of any State in which the act was committed, shall
       be prosecuted for such contempt as provided in section 3691 of this title and
       shall be punished by a fine under this title or imprisonment, or both.

       Such fine shall be paid to the United States or to the complainant or other
       party injured by the act constituting the contempt, or may, where more than
       one is so damaged, be divided or apportioned among them as the court may
       direct, but in no case shall the fine to be paid to the United States exceed, in
       case the accused is a natural person, the sum of $1,000, nor shall such
       imprisonment exceed the term of six months.

       This section shall not be construed to relate to contempts committed in the
       presence of the court, or so near thereto as to obstruct the administration of
       justice, nor to contempts committed in disobedience of any lawful writ,
       process, order, rule, decree, or command entered in any suit or action
       brought or prosecuted in the name of, or on behalf of, the United States, but

                                              24
       the same, and all other cases of contempt not specifically embraced in this
       section may be punished in conformity to the prevailing usages at law.

18 U.S.C. § 402.

       Bowers argues that § 402 “proscribes the penalties for contempts” and thus

prohibited the district court in this case from sentencing him to a term of imprisonment

greater than six months. Aplt. Reply Br. at 5. We disagree. By its plain language, § 402

governs only those acts of contempt that are “of such character as to constitute also a

criminal offense under any statute of the United States or under the laws of any State in

which the act was committed.” 18 U.S.C. § 402. This point is confirmed by the very last

line of the statute, which states that “all other cases of contempt not specifically embraced

in this section may be punished in conformity to the prevailing usages at law.” Id.

       Bowers was not charged with or convicted of violating § 402, and there is no

allegation that the acts of disobedience that he committed were “of such character as to

constitute also a criminal offense under any statute of the United States or under the laws

of any State.” Id. Instead, Bowers was charged with and convicted of violating § 401(3).

All of which means that the penalty provisions of § 402 are inapplicable to Bowers’ case,

and the district court was not otherwise bound by any statutory maximum sentence.

                                             IV

       The judgment of the district court is AFFIRMED.

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