Court Opinion

ID: 70560
Source: CourtListenerOpinion
Date Created: 2010-04-26 07:04:43+00
Date Added: 2024-06-11T14:59:30.073401
License: Public Domain

HILL, Senior Circuit Judge, concurring, dubitante:

      The court today affirms contempt sanctions against a lawyer

for doing what he knew the judge had ordered him not to do.               I am

not   attracted      to   this   lawyer's   conduct.   The    problem    arose,

however, because the party who petitioned for and obtained the TRO

stood       silent   while   the   order    inadvertently    expired    without

counselling the court of the requirements for its extension.               One

would expect more from the agency appearing here.             It has obtained

temporary restraint before.1         I am not pleased with the performance

of any of our cast of characters.

      An ex parte temporary restraining order is an extreme remedy

to be used only with the utmost caution.          Rule 65(b) of the Federal

Rules of Civil Procedure imposes strict restrictions on its scope

and specific time constraints for its duration:

        Every temporary restraining order granted without notice
        . . . shall expire by its terms within such time after
        entry, not to exceed 10 days, as the court fixes, unless
        within the time so fixed the order, for good cause shown,
        is extended for a like period or unless the party against
        whom the order is directed consents that it may be
        extended for a longer period.2

Fed. R. Civ. P. 65(b).

        1
       An electronic search using only the words "Securities and
Exchange Commission" and "temporary restraining order" or "TRO"
yielded 11,541 cases. We are not suggesting that all these cases
are similar to the instant situation, nor are we implying we have
read each case. We would suggest that counsel representing the SEC
are likely to have explored the requirements for effective
extension of TROs from time to time.
            2
         The district court found that Grossman consented to the
extension of the TRO.     The majority opinion, however, accepts
without comment Grossman's contention that he did not. I concur in
this conclusion and note that, if Grossman had consented to the
extension,   the   TRO  would   have   remained   an  unappealable
interlocutory order. Fernandez-Roque v. Smith, 671 F.2d 426, 430
(11th Cir. 1982).
       The importance of these restrictions was emphasized by the

Supreme   Court    in   Granny   Goose       Foods,   Inc.    v.   Brotherhood   of

Teamsters & Auto Truck Drivers, Local No. 70, 415 U.S. 423 (1974).

In Granny Goose, a state court issued a temporary restraining order

to enjoin the local union from striking.              Two days later, the case

was removed to federal court.            The union moved to dissolve the

restraining order.      After a hearing, the court denied the union's

motion.   The union went on strike some months later.                The district

court held the union in contempt for violating the TRO.                 The Ninth

Circuit reversed, and the Supreme Court affirmed the appellate

court.

       The Court held that the union violated no order when it

resumed its strike because no order was in effect at that time.

The Court rejected the employer's argument that the district

court's hearing on the union's motion to dissolve the restraining

order was a hearing on a preliminary injunction, or that its order

denying the motion should be construed as a grant of a preliminary

injunction.       Regardless of the district court's intent in the

hearing, the TRO did not survive the expiration of the Rule 65(b)

time   limits   because    the   district       court   did    not   follow      the

appropriate procedure.      The Supreme Court held:

           Where a hearing on a preliminary injunction
           has been held after issuance of a temporary
           restraining order, and where the District
           Court decides to grant the preliminary
           injunction, the appropriate procedure is not
           simply to continue in effect the temporary
           restraining order, but rather to issue a
           preliminary injunction, accompanied by the
           necessary findings of fact and conclusions of
           law.

                                         2
415 U.S. at 443 (emphasis added); see also Hudson v. Barr, 3 F.3d
970, 975 (6th Cir. 1993) (indefinite continuation of TRO held

improper; government's consent to TRO, pending hearing on motion

for preliminary injunction, ended on day hearing was supposed to

occur); Fed. R. Civ. P. 52(a) (" . . . and in granting or refusing

interlocutory injunctions the court shall similarly set forth the

findings of fact and conclusions of law which constitute the

grounds of its action.").

     Our panel's opinion today purports to accept Granny Goose but

characterizes its holding as ". . . where there has been no notice

to the parties and no hearing on the various factors involved in

considering a preliminary injunction, a TRO continued past the Rule

65 limit falls of its own weight."       This interpretation reads out

of Rule 65(b) any requirement for consent to validate any extension

of a TRO beyond the twenty-day limit.      See Connell v. Dulien Steel

Products, Inc., 240 F.2d 414, 417 (5th Cir. 1957).              Under the

Rules, it is not just notice and a hearing that allows a TRO to

become   a   preliminary   injunction,    but   findings   of   fact   and

conclusions of law which adjudicate the property right involved

thereby satisfying due process.

     Granny Goose also emphasizes the safeguards built into Rule 65

to prevent the serious penalties imposed when one is found to be in

contempt for violating court injunctions:

     [O]ne basic principle built into Rule 65 is that those
     against whom an injunction is issued should receive fair
     and precisely drawn notice of what the injunction
     actually prohibits.

                               * * * *

                                   3
     It would be inconsistent with this basic principle to
     countenance procedures whereby parties against whom an
     injunction is directed are left to guess about its
     intended duration. Rule 65(b) provides that temporary
     restraining orders expire by their own terms within 10
     days of their issuance.      Where a court intends to
     supplant such an order with a preliminary injunction of
     unlimited duration pending a final decision on the merits
     or further order of the court, it should issue an order
     clearly saying so. And where it has not done so, party
                                                       a
     against whom a temporary restraining order has issued may
     reasonably assume that the order has expired within the
     time limits imposed by Rule 65(b).
415 U.S. at 444-45 (emphasis added)(footnote omitted).

     No case is cited to us in which the imposition of contempt for
violation   of   an   indefinitely-extended   TRO   has   been   upheld.

Nevertheless, we hold today that "[f]or Grossman just to disregard

the district court's order based on his personal belief that it was

invalid, is conduct that warrants a determination of contempt."       I

do not concur in this, but I do not view it as a basis for the

judgment.   The opinion seems to say that, notwithstanding        Granny

Goose, it was not "reasonable" for Grossman to assume that the TRO

had expired as Rule 65(b) prescribes.3

     3
       I believe that this conclusion denies Grossman the benefit
of that to which he is entitled under Granny Goose. Rule 65(b) is
clear that no TRO may be extended beyond the twenty days without
the consent of the party restrained. On May 27, 1994, after the
expiration of twenty calendar days, Grossman requested the return
of some of his client's funds from the Receiver who had custody of
them.   The Receiver disagreed about the calculation of time,
stating that the time would expire on June 1. On June 3, Grossman
inquired of the district court whether a preliminary injunction had
issued. The staff advised that no order had been issued. On June
6, Grossman again inquired of the Clerk of Court and of the
district court's chambers whether any injunction had issued.
Informed that no order had issued nor was any order forthcoming,
Grossman transferred his client's retainer from a trust fund to
Grossman's law firm operating account in partial payment of his
fees. As far as the record reveals, Grossman did what Rule 65(b)
permitted him to do, and as his client instructed him to do with

                                   4
     This holding is based upon          Sampson v. Murray , 415 U.S. 61

(1974).   In     Sampson, a government employee sought a temporary

injunction against her dismissal from employment as a probationary

employee.       The district court granted a temporary restraining

order.    Later, after an adversary hearing at which the government

declined to produce the discharging official as a witness to

testify as to the reasons for the dismissal, the district court

ordered   the    temporary   restraint    continued   until   the   witness

appeared.   In considering the issue of appellate jurisdiction over

the order the Supreme Court wrote:

     A district court, if it were able to shield its orders
     from appellate review merely by designating them as
     temporary restraining orders, rather than as preliminary
     injunctions would have virtually unlimited authority over
     the parties in an injunctive proceeding. In this case,
     where an adversary hearing has been held, and the court's
     basis for issuing the order strongly challenged,
     classification of the potentially unlimited order as a
     temporary    restraining   order    seems    particularly
     unjustified. Therefore, we view the order at issue here
     as a preliminary injunction.

Id. at 87-88.

     An order extending a TRO beyond the statutory twenty-day

limit, therefore, is treated as a preliminary injunction.              One

might well conclude that the conversion of an indefinitely-extended

TRO into a preliminary injunction would be for purposes of appeal

only, conferring jurisdiction on the court of appeals for the sole

purpose of voiding the invalidly extended TRO.4

the client's funds.
     4
       As noted earlier, until today there has never been a case
affirming sanctions for contempt for violation of an
indefinitely-extended TRO.

                                    5
     This was exactly the approach of the Court of Appeals for the

District of Columbia Circuit in National Mediation Bd. v. Air Line

Pilots Association, Int., 323 F.2d 305 (D.C. Cir. 1963).    In that

pre-Sampson case, the Court of Appeals held that an order extending

a TRO beyond the twenty days allowed by Rule 65(b) is tantamount to

the grant of a preliminary injunction, thus conferring jurisdiction

on the court of appeals.    The court further held, however, that

since the restraining order was not supported by findings of fact

and conclusions of law as required by Rule 55(a), it was not a

valid preliminary injunction and remanded the case to the district

court with directions to dissolve the void order.    Id. at 305-06.5

     This result was later endorsed by Justice Marshall in his

dissent in Sampson.   In Sampson, the Supreme Court went beyond the

mere exercise of appellate jurisdiction and considered the merits

of the application for a preliminary injunction.    This appeared to

be a significant extension to Justice Marshall who wrote:

          It is suggested that if an indefinitely extended
     temporary restraining order remained unappealable, the
     District Court would have virtually unlimited authority

      5
        An earlier approach adopted by two circuits upon finding
that temporary restraining orders had expired by virtue of the Rule
65(b) limitations, was to hold that there was no existing order to
review and dismiss the appeals as moot.    Benitez v. Anciani, 127
F.2d 121 (1st Cir. 1942), cert. denied, 317 U.S. 699 (1943) and
Southard & Co. v. Salinger, 117 F.2d 194 (7th Cir. 1941).
Subsequent courts have distinguished these cases where, as here, a
district court has ordered an indefinite extension of the TRO. See
Pan American World Airways, Inc. v. Flight Engineers' Int'l Ass'n,
306 F.2d 840, 842 (2d Cir. 1962)
("In the present case, because the district judge extended the
order beyond the twenty day period, we consider that the temporary
restraining order became an appealable preliminary injunction.").

                                 6
     over the parties in an injunctive action. At the outset,
     this cannot justify this Court's reaching the merits of
     Mrs. Murray's claim for a preliminary injunction. Even
     if the order entered by the District Court is appealable,
     it should be appealable only for the purposes of holding
     it invalid for failure to comply with Rule 52(a). This
     was the precise course taken by the Court of Appeals for
     the District of Columbia Circuit in National Mediation
     Board, supra, on which the majority relies.

                             * * * *

          Here, instead, we find the Supreme Court determining
     that although the District Court had jurisdiction to
     grant injunctive relief, the equities of Mrs. Murray's
     case did not support a preliminary injunction, when
     neither the District Court nor the Court of Appeals has
     yet confronted the latter issue. I do not believe this
     makes for sound law.

Sampson, 415 U.S. at 957 (footnote omitted).

     I recognize that this reasoning was rejected by the Court in

Sampson.   Justice Rehnquist, for the Court, wrote:

          Our Brother Marshall, in his dissenting opinion,
     nevertheless suggests that a district court can totally
     or partially impede review of an indefinite injunctive
     order by failing to make any findings of fact or
     conclusions of law. It would seem to be a consequence of
     this reasoning that an order which neglects to comply
     with one rule may be saved from the normal appellate
     review by its failure to comply with still another rule.
     We do not find this logic convincing. Admittedly, the
     District Court did not comply with Fed. Rule Civ. Proc.
     52(a), but we do not think that we are thereby foreclosed
     from examining the record to determine if sufficient
     allegations or sufficient evidence supports the issuance
     of injunctive relief.

Id. at 951 n. 58.

     By reviewing the merits, the Supreme Court appears to have

held that the TRO cum preliminary injunction is a valid restraining

order.     Otherwise, the review on the merits would be a mere

                                 7
intellectual exercise which the Court is not wont to do.6   So, I am

instructed by the Court that the indefinite extension of a TRO not

only transforms the TRO into a preliminary injunction for purposes

of appeal, but also into a valid injunction.7

     Clearly, some problems emerge. We uphold the contempt imposed

for violation of an expired TRO in this case at the expense of

making unclear the duration of emergency orders that deprive a

party of the free use of his or her property.          This is not

appealing in a free society.        Furthermore, we eviscerate the

protection afforded by Rule 65(b).    If a TRO can metamorphose into

a preliminary injunction by the expiration of the very time limits

imposed as safeguards against the indefinite restraint over one's

         6
          Upon review of the merits, the Court analyzed whether
petitioner had adequately demonstrated the irreparable harm
necessary to secure injunctive relief, concluded that she had not
done so. Therefore, although     valid, the Court found the TRO
unlawful in that it was incorrectly granted. The Court reversed
the decision of the court of appeals which had upheld the district
court's grant of the TRO.

     7
       This determination is part of what is required in order for
this court to uphold the contempt imposed upon Grossman in this
case. Unlike criminal contempt, civil contempt may be upheld only
if the disobeyed order was valid and lawful. Smith v. Sullivan,
611 F.2d 1050, 1052-54 (5th Cir. 1980).
     Having been persuaded that the indefinitely extended TRO
becomes a valid preliminary injunction, the second step would be to
consider the injunction on the merits to determine whether it was
granted according to law, i.e., whether the applicant demonstrated
the requisite irreparable harm and inadequate legal remedies.
     In this case, however, Grossman does not appear to challenge
the injunction on its merits, choosing to argue only that the TRO
was void after the expiration of the statutory time limits.
Therefore, my inquiry is limited to the validity of the order
disobeyed.

                                8
property, then Rule 65(b) provides no protection         at all.8   As the

Second Circuit has observed:

     It is because the remedy is so drastic and may have such
     adverse consequences that the authority to issue
     temporary restraining orders is carefully hedged in Rule
     65(b) by protective provisions. And the most important
     of these protective provisions is the limitation on the
     time during which such an order can continue to be
     effective.

Pan American World Airways, Inc. v. Flight Engineers' Int'l Ass'n,

306 F.2d 840, 843 (2d Cir. 1962) (holding, however, that a TRO

indefinitely extended by a district court becomes a preliminary

injunction so that it may be reviewed).

     I   confess   to   a   temptation   to   conclude that   Sampson   is

overruled by Granny Goose, or that, at least, because the restraint

imposed in Sampson was found to be unlawful, the implications from

the merits review are dicta.     I do not undertake, however, to limit

Supreme Court precedent.      If our reading of Sampson is correct, it

requires that, for the first time, we affirm a contempt imposed for

violating a TRO extended beyond the statute's limit.

     Not without doubt as to this conclusion, I CONCUR.

     8
       This approach does, however, have the virtue of easing the
burden on over-worked district judges. It appears that now they
may avoid the time-consuming chore of finding facts and making
conclusions of law, and simply allow the passage of time to
accomplish what many cases say they may not do--turn a TRO into a
preliminary injunction without going to this trouble.

                                    9