LOUISE W. FLANAGAN, District Judge.
This matter returns to the court's attention on a number of motions including: 1) motion for relief under the All Writs Act, 28 U.S.C. § 1651, ("AWA") and Rule 60 of the Federal Rules of Civil Procedure (DE 809-5) by plaintiff and judgment creditor SAS Institute Inc. ("SAS"); 2) oral motion for modification of injunction made in open court March 4, 2019, by defendant and judgment debtor World Programming Limited ("WPL'); and 3) unopposed motions to seal (DE 860, 868, 872) by WPL. For the following reasons, SAS's motion is granted, WPL's oral motion is denied as moot, and its motions to seal are granted. Reasoning for the court's February 15, 2019, order that no sum collected or to be collected by the judgment creditor in the United States is subject to payment to the judgment debtor on the basis of the United Kingdom Protection of Trading Interests Act 1980 ("PTIA"), also is set forth herein.
Reference is made to prior orders of this court and the opinion of the United States Court of Appeal for the Fourth Circuit in
On November 9, 2016, this court granted WPL's emergency motion for temporary stay of execution of the court's judgment pending resolution of motion for stay pending appeal, premised in part upon WPL's deposit into an escrow account maintained in the United States of "80% of all revenues received by WPL in relation to licensing of WPS in the [US]." (DE 633-1;
In December 2017, SAS commenced execution upon the judgment by initiating enforcement proceedings in California and the United Kingdom. The court highlights below activities in each forum and continuing developments impacting the case before this court.
On December 28, 2017, SAS commenced a judgment enforcement action in the United States District Court for the Central District of California (hereinafter, the "California court"), by registering the judgment, and the California court thereafter issued a writ of execution against WPL.
(
On September 11, 2018, WPL filed notice of appeal of the September 5, 2018, assignment order to the United States Court of Appeals for the Ninth Circuit. In the California case, WPL also filed that day motion to stay that part of the assignment order pertaining to customers outside of both the United States and the United Kingdom. WPL filed a similar motion before this court to stay execution of the judgment for customers outside of both the United States and the United Kingdom pending completion of United Kingdom judgment-recognition proceedings.
Two days later, on September 13, 2018, the California court "defer[red] to the Eastern District of North Carolina to rule on this matter." (California case, Docket 111). This court denied WPL's motion to stay execution of the judgment holding: "[WPL] has not demonstrated a meritorious argument in support of stay of all non-[United States] execution of the judgment pending [United Kingdom] judgment-recognition proceedings." (Order (DE 786)).
On September 13, 2018, the California court entered an amended assignment order, directing WPL to assign its rights to payments to SAS from all customers worldwide, except those in the United Kingdom. (
On October 12, 2018, the California court denied SAS's ex parte application for an order directing WPL to turn over all income received from customers located worldwide, except in the United Kingdom, due to lack of jurisdiction pending appeal. (
SAS then moved for limited remand based upon the California court's two indicative rulings. Decision on that motion by the United States Court of Appeals for the Ninth Circuit was stayed upon request of SAS, acting at the command of the court in the United Kingdom upon penalty of fine, asset seizure, and/or arrest. SAS also was forbidden by the United Kingdom High Court of Justice, Business and Property Courts of England and Wales Commercial Court (QBD) (the "UK court") to communicate reason for its stay request. This is discussed more particularly below.
While the California enforcement proceedings were ongoing, United Kingdom enforcement proceedings initiated by SAS also were developing. As pertinent here, WPL defensively advanced several motions and positions in the United Kingdom enforcement proceedings to stop or limit judgment enforcement relief sought by SAS.
On January 31, 2018, WPL filed a defense and counterclaim in which it advanced that "SAS should not be permitted to `enforce' its [United States] judgment," where "it would be contrary to public policy to permit enforcement" and "an abuse of process, inconsistent with earlier English judgments," and where "the [United States] judgment is impeachable for lack of natural/substantial justice in the proceedings." (DE 747-3 at 2-3).
On December 13, 2018, the UK court entered judgment in favor of WPL (hereinafter the "UK judgment"), "refus[ing] enforcement [of this court's judgment] on the grounds of public policy because of conflict with the [European Union] Software Directive." (UK judgment (DE 816-1) ¶ 190). The UK court also concluded that SAS's action in this court was a "collateral attack" on a prior "English judgment" in favor of WPL. (
The UK judgment also granted relief to WPL on a counterclaim asserted under Section 6 of the PTIA to claw back two-thirds (2/3) of all amounts SAS collects in satisfaction of this court's judgment. The court held that the PTIA entitles WPL to recover against SAS "two-thirds of any amount which [WPL] may have paid," representing the multiple damages portion of the judgment. (
The UK court noted the possibility that an appropriation could be "made at the time of payment" by a creditor, "so as to make the payment one in respect of the compensatory element only." (
Eight days after entry of the UK judgment, on December 21, 2018, based upon an ex parte application of WPL, the UK court entered an ex parte injunction and order ("UK injunction") which commences with the following notice to SAS:
1) "Pursue, continue, or take any further steps . . . for the purposes of seeking the in personam relief identified in the . . . First and Second Limited Remand Motions" that SAS had filed in the Ninth Circuit (
2) "Seek to obtain from the [California court], or any other court of the USA (state or federal), the orders foreshadowed by and/or contemplated in (i) the [California court's indicative ruling 1] and (ii) the [California court's indicative ruling 2], or any similar orders." (
3) "[C]ommence, bring, continue, pursue or take any steps in, any claims, proceedings, applications, or motions before any court of the USA (state or federal)" to seek:
(
4) "[C]ommence, bring, continue, pursue or take any steps in, any claims, proceedings, applications, or motions before any court of the USA (state or federal)" to "[p]revent or restrain, or seek to prevent or restrain, WPL from:"
(
The UK injunction commanded SAS to take affirmative action to halt proceedings before the United States Court of Appeals for the Ninth Circuit and the California court. In particular, the UK court commanded SAS not to file a brief due that day in connection with SAS's motion to remand to the California court for entry of indicative ruling. (
The UK injunction provides for a "Return Date" at which the UK court "will consider whether [the UK injunction] shall be continued and/or what further order shall be made." (UK injunction (DE 816-2) ¶ 13). At present, the UK court is scheduled to reconvene proceedings March 22, 2019, for this purpose. A statement by WPL's United Kingdom counsel, Alexander Carter-Silk ("Carter-Silk"), filed in the UK court on January 14, 2019, recites that WPL seeks, in part, "a mandatory order that SAS
During the time enforcement proceedings as described were ongoing before the California and UK courts, the following additional activities were taking place before this court pertinent to the instant motions. On October 5, 2018, SAS filed a notice of partial satisfaction of judgment reporting that on January 5, 2018, SAS received $2,191,770.00, and on March 2, 2018, SAS received $2,110,144.00, which it applied to interest and compensatory damages awarded in the court's judgment. (Notice (DE 790) at 1-2). These amounts, which should have been credited earlier under applicable North Carolina law,
On January 11, 2019, SAS filed ex parte the instant motion for relief under the AWA and Rule 60 of the Federal Rules of Civil Procedure, for an order amending the judgment in this case to enjoin WPL from future sales of its software products for use within the United States until it satisfies the court's judgment. SAS requests, in the alternative, to enjoin WPL from future sales of its software products to new customers for use within the United States until it satisfies the court's judgment. (
The instant motion was accompanied by and contained within an ex parte motion to file motions under seal, (DE 809), along with an emergency motion under the AWA to preserve the court's jurisdiction, with reference to the declaration of Millen in support thereof (DE 809-1 to 809-4). That same day, the court entered an order granting SAS's emergency motion, providing:
(DE 810). WPL filed a memorandum in opposition to the instant motion, together with a motion for prompt dissolution of the ex parte injunction. WPL relies upon a declaration of its attorney, Wayne F. Dennison ("Dennison"), in conjunction with: 1) the UK judgment, injunction, and directions order; as well as 2) declaration of Oliver R. Robinson ("Robinson"), a company director of WPL.
On January 28, 2019, the court set a schedule for briefing and noticed hearing on the motions then pending for February 15, 2019.
SAS filed reply in support of the instant motion combined with a response to the motion for dissolution. In support thereof, SAS relies upon a second declaration of Millen, in conjunction with: 1) correspondence between WPL customers and Millen in September and October 2018; 2) correspondence between Millen and WPL counsel; 3) California case docket; 4) WPL filings and witness statements in the UK proceedings; and 5) excerpts of WPL's supplemental objections and responses to SAS's first post-judgment interrogatories.
WPL filed reply in support of its motion for prompt dissolution on February 6, 2019, accompanied by declaration of WPL counsel, James A. Barta ("Barta"), in conjunction with: 1) prior filings made in the instant case; 2) correspondence between counsel for SAS and WPL in 2017 and 2018; 3) declaration of WPL UK counsel, Carter-Silk; 4) declaration of WPL California counsel, Joel S. Miliband ("Miliband"), and correspondence between counsel attached thereto; and 5) filings made by SAS in UK proceedings in December 2017 and October 2018.
SAS filed notice on February 13, 2019, containing additional documents: 1) additional witness statements by Carter-Silk and Miliband filed in UK proceedings; 2) filings in the California case; and 3) a WPL press release, dated December 17, 2018.
With benefit of all these materials, the court held hearing February 15, 2019. Certain orders were made and supplemental submissions directed to be filed in advance of continued hearing set for March 4, 2019, as briefly summarized below:
1) The court held in abeyance SAS's instant motion, pending receipt of certain accounting information;
2) The court ordered WPL to file under seal an accounting of all sums received from and after September 5, 2018, from all customers, without geographical limitation, specifying the name and invoice address of each customer;
3) The court ordered WPL to pay by February 22, 2019, to SAS all sums the judgment debtor had received from customers invoiced in the United States from and after September 5, 2018;
4) The court ordered SAS to timely file notice of receipt of any sum paid, to be credited to the judgment in accordance with North Carolina General Statute § 1-239(c);
5) The court ordered that no sum previously collected or to be collected by SAS in the United States is subject to payment to WPL on the basis of the PTIA;
6) The court denied the judgment debtor's motion to strike satisfaction of judgment (DE 791);
7) The court denied the judgment debtor's motion for prompt dissolution of ex parte injunction (DE 771).
Supplemental filings have been made also to include, on behalf of SAS: 1) declaration of forensic accountant Samuel Hewitt ("Hewitt"), with attached schedules and exhibits, 2) further declaration of Millen, and 3) declaration of John Boswell, Chief Legal Officer of SAS. WPL also relies upon declaration of Barta, in conjunction with: 1) declaration of Robinson; 2) Hewitt Schedule 1-1 filed in the California case; 3) December 13, 2018, order by the UK court entering judgment in favor of WPL on its counterclaim in the sum of $2,867,922.67, with 8% interest; 4) letter from WPL's UK counsel to SAS's counsel regarding the UK proceedings; and 5) UK civil procedure rules.
On March 3, 2019, WPL filed notice regarding inadvertent issuance of a license and free licenses, in violation of this court's injunction, and corrective measures taken and proposed. On March 4, 2019, the date of hearing, SAS filed notice containing customer invoices from WPL and a list of WPL's active software licenses as of February 25, 2019. That same date WPL filed notices containing: 1) WPL customer correspondence and invoices; 2) declaration of Robinson attaching charts showing US monthly receipts and revenues; 3) a March 2018 order of the UK court; and 4) letters from counsel for WPL to counsel for SAS dated March and April 2018.
With benefit of these additional materials, on March 4, 2019, the court heard further arguments of counsel. The judgment debtor made oral motion to modify the current injunction to state "no new licensing to U.S. customers," as opposed to enjoining licensing for use in the US. (Tr. (DE 874) at 93). The court took under advisement the oral motion and the instant motion.
The court memorializes here the reasoning for its February 15, 2019, order that "no sum previously collected or to be collected by the judgment creditor in the United States is subject to payment to the judgment debtor on the basis of the United Kingdom Protection of Trading Interests Act of 1980." (Order (DE 848) at 2).
The AWA provides that "[t]he Supreme Court and all courts established by Act of Congress may issue all writs necessary or appropriate in aid of their respective jurisdictions and agreeable to the usages and principles of law." "This Court has repeatedly recognized the power of a federal court to issue such commands under the All Writs Act as may be necessary or appropriate to effectuate and prevent the frustration of orders it has previously issued in its exercise of jurisdiction otherwise obtained."
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"Such authorization, however, does not control where a statute specifically addresses the particular issue at hand."
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Based upon foregoing established law, the AWA provides authority for this court to enter an injunction "to effectuate and prevent the frustration of orders it has previously issued in its exercise of jurisdiction otherwise obtained."
In particular, WPL's advancement of a counterclaim in UK proceedings to claw back amounts already paid to SAS as part of supersedeas bond and escrow account directly frustrate the court's February 9, 2017, order. In setting bond and escrow amounts to be paid over to SAS upon successful appeal, the court addressed in detail evidence and arguments regarding WPL's ability to pay a bond and fund an escrow account. The court considered and relied upon, as part of its motion for stay pending appeal, WPL's representation that the judgment debtor would place "
(Robinson Decl. (DE 673) ¶¶ 17-18) (emphasis added).
The clawback sought by WPL in proceedings in the United Kingdom also frustrates the court's orders and judgment in a broader sense. SAS, as creditor of a judgment entered in the United States District Court for the Eastern District of North Carolina, affirmed by the United States Court of Appeals for the Fourth Circuit, where the Supreme Court of the United States declined to consider WPL's petition for a writ of certiorari, is entitled to collect the entire amount of the judgment. There is no equivalent provision in United States law for return to a judgment debtor of two-thirds (2/3) of any sum because damages were trebled.
Thus, any action by WPL in the United Kingdom seeking relief in the form of a clawback is in
Justification for the court's clawback order is most acute where it relates to sums collected in the United States — circumstances currently before this court. Such circumstances relating to sums received to date originating in this country, and any future United State- originated revenues, involve monies without
WPL's actions in pursuing clawback in the United Kingdom also are in conflict with representations it has made to this court. At hearing on February 15, 2019, WPL represented that it would "hand[] over to [SAS]
The end result, as a practical matter, is that WPL represents that it has paid and will pay over 100 % of revenues derived from sales to United States based licensees, but in the same action represents that it can take two-thirds (2/3) of it back. At the same time, as discussed in more detail below, SAS is prevented by the UK injunction from seeking relief from this court to preserve its ability to keep amounts collected under this court's judgment.
There are not otherwise statutory or common law remedies available to SAS to obtain the relief granted by this court in the anti-clawback portion of its February 15, 2019, order.
Accordingly, for the foregoing reasons, "no sum previously collected or to be collected by the judgment creditor in the United States is subject to payment to the judgment debtor on the basis of the United Kingdom Protection of Trading Interests Act of 1980." (Order (DE 848) at 2).
Both the AWA and Rule 60, independently and in combination, authorize and compel issuance of the injunction SAS requests. The court sets forth herein the court's authority to issue an injunction under each basis in turn, including discussion of the nature and scope of the specific injunction and alternative injunction sought by SAS.
The AWA provides authority to the court to enter the requested injunction "to effectuate and prevent the frustration of orders it has previously issued in its exercise of jurisdiction otherwise obtained," "to achieve the rational ends of law," and "to achieve the ends of justice entrusted to it."
WPL has taken a variety of actions that "frustrate the enforcement of American law in American courts against [the judgment debtor] doing business in America."
First and foremost, the UK injunction reaches directly into proceedings in the United States to prevent SAS from enforcing this court's judgment to the extent permitted by the laws of this country. It prevents SAS from seeking the full panoply of judgment collection tools, which the California court already has forecasted in indicative rulings are available to SAS, including:
1) "[T]he in personam relief identified in the . . . First and Second Limited Remand Motions" that SAS had filed in the United States Court of Appeals for the Ninth Circuit ((UK Injunction (DE 816-2) ¶ 3.a.);
2) "[O]rders
3) Moving for or briefing relief raised in its remand motions before the court of appeals, as well as "[a]ny motion or request to the [California court] to make the order contemplated" in its indicative rulings. (
The UK injunction also prevents SAS from seeking from any United States court relief of "similar nature and/or effect" or relief that "purports to impose" any "requirements on WPL to assign or transfer to SAS" and receivables or sums. (
The practical impact of these components of the UK injunction on collections in this country, the country of origin of the judgment at issue, is extraordinary. Indeed the UK injunction has already prevented SAS from seeking from this court the basic, reasonable, relief in the form of directing WPL to pay to SAS United States receivables that WPL had already received from United States-based customers, which sums include amounts subject to unchallenged portions of the California court's assignment order. At the time of February 15, 2019, hearing, WPL had not shown any justification as to why it had not already turned over such receivables already paid to WPL to SAS. It was only after this court,
Indeed, prior to filing of the instant motion and imposition of AWA relief by this court, with the UK injunction in place, SAS had at its disposal
The UK injunction also prevents SAS from obtaining the type of relief from United States courts that otherwise would be available to the judgment creditor to counteract the judgment debtor's efforts to "escape" enforcement of this court's judgment. It prevents SAS from seeking an injunction to stop the clawback provisions of the UK judgment, or even briefing this court on issues associated with such an injunction. (UK Injunction (DE 816-2) ¶ 6). While this court now has entered an order addressing the clawback provisions,
The UK injunction also prevents SAS from seeking an anti-anti-suit injunction against WPL to attempt to free up restraints that WPL has placed on SAS's ability to use the tools normally available to a judgment creditor in United States courts, particularly in the California court and the United States Court of Appeals for the Ninth Circuit. (UK Injunction (DE 816-2) ¶ 6). And the UK injunction, by design and effect, prevents SAS from seeking from this court the most direct form of AWA relief that would be appropriate under the circumstances of this case, in the form of an anti-anti-suit injunction to prevent all the aforementioned aspects of the UK injunction from paralyzing SAS's collection activities in the United States.
Finally, the UK injunction is an absolute interference with SAS's ability to seek appropriate judgment enforcement relief in United States courts because of the criminally punitive consequences it imposes upon SAS's officers, employees, and agents, many of whom work and reside in the United Kingdom. SAS has a substantial presence in the United Kingdom, with operations there since 1980, a "physical headquarters in Buckinghamshire," "637 employees," and "bank accounts" in the UK. (Boswell Decl. (DE 852-14) ¶¶ 2-3).
As an independent and additional ground for AWA relief, WPL is "attempting to relitigate decided issues" and engage in "collateral attack of [this court's] judgments" through its pursuit of the UK judgment.
Here, WPL raised as a defense to the breach of contract claim in this case that comity and collateral estoppel required this court to give "preclusive effect" to the earlier determination by the UK court that breached terms in the license agreement were void.
Before the United States Court of Appeals for the Fourth Circuit, WPL argued "that the proceedings below never should have moved forward, as this action was barred by res judicata due to the U.K. litigation."
WPL also sought to raise again before this court and the California court that "international comity considerations weigh in favor of a stay" of execution of the judgment on non-U.S. assets. (DE 784 at 9). WPL reasoned that "WPL has taken the position that the enforceability of the U.S. judgment outside of the United States is constrained by the prior judgment of the U.K. High Court," in turn providing a basis for moving to stay enforcement proceedings in the California court. (
Having failed to halt judgment enforcement activities in courts of this country, WPL turned to courts in its native land to achieve the same result. The UK court accepted the very arguments that courts in this country had rejected, holding that the "US Proceedings were put forwards as a collateral attack on the English judgment," where the UK court had "already determined the position [of SAS] as a matter of North Carolina law (subject to the overlay of the Software Directive)." (UK Judgment (DE 816-1) ¶ 126). The UK court thus concluded that SAS is "precluded by issue estoppel or by . . . abuse of process from enforcing the judgment on the Fraud Claim and the UDPA claim." (
In this respect, WPL has subjected both the court's judgment and enforcement thereof in the United States to collateral attack. For all the reasons discussed in memorandum opinion herein, the UK judgment is an affront to this court's judgment by clawing back bond and escrow account sums already disbursed in the United States in accordance with the court's judgment and February 9, 2017, order, and by inviting clawback of all sums to be collected before SAS has received even a fraction of compensatory damages due.
In such circumstances, injunctive relief under the AWA is necessary to protect the court's judgment and orders, and United States enforcement thereof, from collateral attack and frustration.
As noted above, SAS moves to enjoin WPL from all future sales of its software products for use within the United States until it satisfies the court's judgment. SAS requests, in the alternative, to enjoin WPL from future sales of its software products to "new customers" for use within the United States under the same condition. (
Having determined that the court is authorized to issue an AWA injunction under present circumstances to protect this court's judgment and orders from frustration, the court turns now to considering the scope and nature of an injunction necessary to accomplish this objective. The most direct and proportional form of AWA injunction where foreign proceedings frustrate Unites States litigation is an anti-anti-suit injunction, which could command WPL to cease and undo its efforts in the United Kingdom to stay judgment enforcement proceedings in United States courts and thus allow the California court to command the execution relief it has forecasted in its indicative rulings.
However, because of the breadth of the UK injunction, SAS has been unable to advance in arguments in this court in favor of such an anti-anti-suit injunction. Moreover, because of WPL's limited presence in the United States, on the one hand, and SAS's substantial presence, assets, and operations in the United Kingdom, on the other hand, it is doubtful that SAS would prevail in a protracted conflict between competing punitive injunctions issued by United States and United Kingdom courts. The practical outcome of an anti-anti-suit injunction is far from clear.
Moreover, the court finds more in keeping with its own jurisdiction and principles of international comity, as recognized by United States courts, to award injunctive relief that focuses on conduct in the United States and touching upon United States based transactions and commerce, rather than an injunction that focuses on litigation activity in courts in the United Kingdom.
Due to all the circumstances addressed herein, including considerations discussed below with respect to Rule 60, the court determines that an injunction prohibiting future sales of WPL software products to new customers for use within the United States achieves the goals of preventing the frustration of this court's orders and ensuring the ends of justice in providing due relief to SAS for its claims under United States law.
In so holding, the court has considered WPL's argument that a more effective alternative to any injunction at this juncture is to allow WPL to continue unfettered in licensing its product for use in the United States, such that it can continue making payments from such revenues towards the court's judgment through collection efforts pursuant to the California court's September 5, 2018, assignment order. For all the reasons set forth herein, this alternative approach is unacceptable while all aspects of the UK judgment and UK injunction remain in force. At bottom, merely providing a means for the judgment creditor to continue collection on the judgment debtor's terms, in reliance upon voluntary acquiescence by the judgment debtor to refrain from taking evasive or counteractive measures, without giving the judgment creditor any avenue to assert its interests as a judgment creditor as allowed under United States law,
While the court has taken into account evidence offered by WPL at hearing that it is not presently taking measures to reduce customer license payments or otherwise shelter or reduce United States receivables, the court finds it more significant that WPL did not recognize any amount of the judgment entered against it in the United States as due in its annual report, and it made no attempt to quantify the amount of revenues that it would be turning over to SAS in accordance with the judgment. (DE 853-4 at 5). Instead, it expressly noted the $2.6 million it was awarded as clawback recovery payable from SAS to WPL. (
In the same vein, WPL suggests, and reiterates through its instant oral motion advanced at March 4, 2019, hearing, that the court should limit an injunction to provide for "no new licensing
In sum, the alternatives proposed by WPL all suffer from the same fundamental defect in that they are dependent upon voluntary cooperation by the judgment debtor, all while the judgment creditor is severely restricted in the tools available to it to enforce this court's judgment.
The court also recognizes the evidence WPL presents of the current and potential injury and interference such an injunction inflicts upon its ability to attract new customers and retain existing customers globally. However, there must be some degree of impact upon WPL's operations for it to have any practical coercive effect under the circumstances presented. The court addresses further below factors bearing upon an injunction under Rule 60, including the balance of injury, which factors the court incorporates herein by reference also in support of an AWA injunction.
The court has also weighed the propriety of the injunction sought in the instant motion (prohibiting sales to existing and new customers for use in the United States) versus the alternative injunction argued for by SAS and presently in force through the court's February 15, 2019, order (prohibiting sales to new customers for use in the United States). The court finds, in conjunction with its analysis of Rule 60 injunction factors, discussed further below, that an injunction prohibiting sales of WPL software products to "new customers" for use within the United States, (Mem. (DE 809-6 at 28)), is appropriate to achieve the purposes of the AWA and Rule 60, and the balance of the equities presented, instead of an injunction applied to all existing and new customers.
In sum, the AWA authorizes the court to issue an injunction to protect its orders and judgment from collateral attack and frustration, and to serve interests of justice and the law in the United States. In addition, the alternative injunction requested by SAS provides the most effective mechanisms for serving these goals under the circumstances of this case.
"The consideration of Rule 60(b) motions proceeds in two stages.
Fed. R. Civ. P. 60(b). Under present circumstances, subsection 6 is the broadest and best fit for relief from the court's prior judgment. "While this catchall reason includes few textual limitations, its context requires that it may be invoked in only `extraordinary circumstances' when the reason for relief from judgment does not fall within the list of enumerated reasons given in Rule 60(b)(1)-(5)."
All the reasons discussed above justifying imposition of an AWA injunction provide extraordinary circumstances requiring relief from that part of the court's judgment denying injunctive relief. Moreover, circumstances pertaining to injunctive relief in this case have changed substantially since the time of the court's judgment and appeal thereof, further justifying relief from that part of the court's judgment. Indeed, as set forth below, several critical points relied upon by the United States Court of Appeals for the Fourth Circuit in analysis of injunction factors now have changed to the contrary to support injunctive relief.
To be entitled to an injunction as a part of the court's judgment, a plaintiff must demonstrate:
With respect to the first factor, the court of appeals held that SAS had not demonstrated an irreparable injury. But changed circumstances shed new light on the court's reasoning regarding this factor. For example, the court of appeals reasoned:
The second
The prior observation by the court of appeals that an "injunction . . . would frustrate, rather than facilitate WPL's ability to pay damages" now must be viewed from a different perspective. 874 F.3d at 387. The issue now is no longer so much WPL's ability to pay damages but rather the conditions under which it will pay the damages, i.e., whether it will pay damages under terms that it sets voluntarily and under its desired terms enforced through a coercive UK judgment and injunction, or whether it will pay damages under terms set by US judgment collection law. Where WPL has removed most tools available under US collection law, and where the UK judgment and injunction persist, SAS must resort to its own more extraordinary and coercive measures such as the instant injunction to compel relief from WPL.
In the same vein, the balance of the hardships now also has changed. Equities have shifted now that WPL has taken actions to obtain the UK injunction and clawback. While it will suffer harm from lost revenues resulting from the injunction, its own actions play a role in bringing about that harm. SAS has returned to this court seeking injunction only in the face of counter-offensive maneuvers by WPL to reach into the US and alter ongoing US proceedings and collections.
As noted above, WPL suggests that in order to ensure its continued viability, any injunction must be limited to prohibit new customers in the US rather than new licenses for use in the US. However, WPL has not demonstrated that the injunction sought will prevent it from maintaining operations outside of the US and serving customers outside of the US. WPL cites, for example, customers based outside of the US who may wish to have the option of having employees take a laptop with WPS in or through the US, even if only rarely or occasionally, without having to worry about violating terms of a license. (
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While the court recognizes these concerns and customer preferences as represented by WPL, these are not sufficiently concrete demonstrations of irreparable harm to tip the balance of equities in favor of WPL under present circumstances. Emphasized terms above demonstrate new business challenges and risks, but they do not demonstrate insurmountable obstacles to operations globally outside the US. WPL has not demonstrated that an injunction prohibiting new licenses for use in the US necessarily will deter and hinder non-US business permanently, rather than requiring an adjustment in licensing terms and marketing approach to non-US customers.
Finally, the public interest factor has changed in light of WPL's activities in securing the UK injunction and judgment. Previously, the court of appeals observed that "the public interests weighing in favor of an injunction rely upon broad, abstract rule of law concerns. While these interests are certainly legitimate, the award of compensatory and punitive damages in this case already serves them well." 874 F.3d at 388. Recent circumstances have demonstrated how much these public interest considerations now have flipped in favor of SAS. For all the reasons set forth in support of an AWA injunction, "rule of law concerns" now have become paramount. The ability of US courts to enforce their own laws and to allow litigants to pursue freely rights accorded to them under US law have been significantly eroded through WPL's conduct in seeking the UK injunction and clawback relief in the UK judgment. For the same reason, "the award of compensatory and punitive damages in this case" no longer serve well the rule of law concerns.
WPL argues nonetheless that other factors identified by this court in denying injunctive relief have not changed, and that such factors remain in place to compel denying injunctive relief now. For example, WPL points to this court's determination that in the absence of a copyright violation injunctive relief to deter future sales of a non-infringing product is not warranted. (
In sum, no factor or factors in combination identified in the court's prior order overcomes the clear balance of the equities now weighing in favor of the injunction presently in place and sought through the instant motion. Accordingly, SAS has demonstrated a basis for amending the court's judgment to include a component of injunctive relief until WPL has paid over the full value of this court's award of damages.
WPL moves to seal multiple filings related to the instant motion that contain highly confidential, proprietary, and commercially sensitive information of WPL. The public has received adequate notice of the motions to seal, and no less drastic alternative to sealing is available because the confidential information appears throughout the filings sought to be sealed. WPL's interest in preserving the confidentiality of its assets and financial information outweighs any public interest in disclosure, where filing such documents in the public record would disclose information not generally known to the public. Therefore, WPL's motions to seal are granted, and the clerk is directed to file documents DE 853, 854, 856-859, 864, 867, under seal.
Based on the foregoing, the motion for relief under the AWA and Rule 60 (DE 809-5) is GRANTED on the terms set forth herein. In accordance therewith, the court AMENDS its judgment to include the following injunction:
The clerk is DIRECTED to enter an amended judgment in accordance with the foregoing. Oral motion for modification of injunction (March 4, 2019) is DENIED AS MOOT. Motions to seal (DE 860, 868, 872) are GRANTED, and the clerk is DIRECTED to file documents DE 853, 854, 856-859, 864, 867, under seal.
SO ORDERED.
