WILLIAM M. CONLEY, District Judge.
Still before the court following the court's entry of judgment (dkt. #235), is defendant Spectrum's motion to stay enforcement of the permanent injunction for violations of the Consumer Product Safety Act ("CPSA"), with the exception of ¶ B of that injunction, with which Spectrum represents it has already complied. (See dkt. #236 at 1-2, dkt. #237 at 5.) Recognizing that defendant's criticism of the permanent injunction may have merit — particularly in light of Spectrum's assertion that it had already taken affirmative steps to improve its compliance procedures — the court "direct[ed] Spectrum to provide written notice . . . detailing what specific improvements it has already made" and provided the government an opportunity to respond. (Dkt. #243 at 3-4.) Between the request for a stay and the court's order of November 13, 2017, Spectrum filed a notice of appeal. (See dkt. ##240-242.) Convinced that the court's permanent injunction fell short of the detail and specificity requirements of Rule 65(d)(1)(B) & (C), the court issues this opinion modifying the injunction to (1) clarify Spectrum's specific obligations to ensure compliance for the parties and (2) partially stay its enforcement to maintain the status quo during the appeal before the Seventh Circuit Court of Appeals.
As noted above, Spectrum's pending motion requests a stay pending appeal. (See dkt. #236.) Because an appeal is currently pending, this court's jurisdiction is constrained. See Ced's v. U.S. EPA, 745 F.2d 1092, 1095 (7th Cir. 1984) ("[T]here is a general rule that the filing of a notice of appeal divests the district court of jurisdiction over the matters appealed." (internal citations omitted)). Indeed, "[s]everal circuits have held that the district court may not alter the injunction once an appeal has been filed except to maintain the status quo of the parties pending the appeal." United States v. Power Eng'g Co., 10 F.Supp.2d 1165, 1170 (D. Colo. 1998) (citing cases from the Second, Fourth, Fifth and Ninth Circuits).
Although the Seventh Circuit has not weighed in on this question, it would seem, at minimum, that "any injunctive action taken [by this court] pursuant to Rule 62(c) `must be designed to aid the appeal and, accordingly, may not materially alter the status of the case on appeal.'" Id. at 1171 (quoting Allan Ides, The Authority of a Federal District Court to Proceed After a Notice of Appeal Has Been Filed, 143 F.R.D. 307, 321-22 (1992)); see also S & S Sales Corp. v. Marvin Lumber & Cedar Co., 457 F.Supp.2d 903, 905-06 (E.D. Wis. 2006) ("Construed narrowly, Rule 62(c) only authorizes district courts to issue orders designed to preserve the status quo or, perhaps somewhat more liberally, to preserve the integrity of the case on appeal. . . . [J]udicial authority `must be designed to aid the appeal and, accordingly, may not materially alter the status of the case on appeal.'" (quoting Ides, supra, 143 F.R.D. at 320) (other internal citations omitted)).
In issuing this opinion, therefore, the court is very cognizant of the limitations on its authority. As the government notes, however, "[t]he parties appear to agree that the Court retains jurisdiction, despite the ongoing appeal, to make . . . a minor clarification [of the permanent injunction]." (Dkt. #254 at 7 (citing dkt. #250 at 3 (citing Meinhold v. U.S. Dep't of Def., 34 F.3d 1469, 1480 n.14 (9th Cir. 1994); Wash. Metro. Area Transit Comm'n v. Reliable Limousine Serv., LLC, 985 F.Supp.2d 23, 29 (D.D.C. 2013) (each finding the district court had jurisdiction to issue amended order clarifying its original injunction in order to supervise compliance))).) More importantly, the Supreme Court has expressly recognized that the district court's
Sys. Fed. No. 91, Ry. Emp. Dept., AFL-CIO v. Wright, 364 U.S. 642, 647 (1961).
Given that the court agrees with the thrust of Spectrum's motion to stay — that the injunction as written is too vague and overly broad in light of Spectrum's own actions to ensure future compliance with the CPSA — the court will modify it to preserve the status quo during the pending appeal and clarify the injunction's specific requirements. See Wash. Metro. Area Transit Comm'n, 985 F. Supp. 2d at 29 ("The district court's power to modify an injunction to preserve the status quo necessarily includes the lesser power to clarify the injunction to supervise compliance."); Power Eng'g Co., 10 F. Supp. 2d at 1172 (granting plaintiff's request for order requiring defendants provide a specified form of financial assurance following earlier issuance of preliminary injunction directing defendants provide assurance in a form permitted by state law); see also Advent Elec., Inc. v. Buckman, No. 95 C 0305, 1995 WL 683833, at *1 (N.D. Ill. Nov. 16, 1995) (recognizing that plaintiff's motion to "clarif[y] the precise parameters of the preliminary injunction" was "merely a petition for clarification" that did "not call for the court to consider new issues or arguments not previously raised, nor . . . have the effect of changing the relationship between the parties that was [previously] established").
Having considered the parties' helpful submissions, therefore, the court will modify the injunction to include the following, specific requirements — all of which Spectrum represents are already in place (see dkt. #250 at 8-9, 11-12) — in an effort to ensure compliance while preserving the status quo as the appeal pends:
All of these requirements are consistent with the spirit of the court's original permanent injunction, if not its letter. Although substantially more specific, now that the court has benefited from further information and briefing by the parties, the intent of the court's modifications are "to make explicit what is already implicitly so" pursuant to Fed. R. Civ. P 65(d)(1)(B) & (C). See Wash. Metro. Area Transit Comm'n, 985 F. Supp. 2d at 30 ("Because a court's authority to modify or clarify an injunction while on appeal is limited to preserving the status quo or otherwise supervising compliance, its power to clarify to make explicit which non-parties are bound by the injunction is necessarily as broad as (though no broader than) the non-party provisions in Fed. R. Civ. P. 65(d)(2)(B)-(C).")
The government objects that "Spectrum's response largely recycles statements by Mr. Schoem and Mr. Mihlbauer and other evidence that all was previously considered by the Court" and "presented at the February hearing." (Dkt. #254 at 3.) However, this argument misses the point: the question is whether following Spectrum's prior misconduct, which justified a permanent injunction, its now-improved compliance programs "ensure compliance with the CPSA and the regulations enforced by the CPSC" as the permanent injunction requires. (Dkt. #235 at 1.) As the party under the injunction's strictures, Spectrum is unquestionably entitled to clarification as to whether its undertakings to date are "appropriate improvements" required by that injunction. See Motorola, Inc. v. Computer Displays Int'l, Inc., 739 F.2d 1149, 1155 (7th Cir. 1984), reh'g denied ("A true interpretation . . . does not change the parties' original relationship, but merely restates that relationship in new terms."); see also Advent Elec., 1995 WL 683833 at *1 ("To determine whether or not an order is a clarification, or a modification, the court must look to the actual effect of the order. If the motion calls for a court to consider[] a question or issue not previously considered, then it is calling for a modification as opposed to a clarification.").
For its part, the government argues that "[t]he injunction entered against Spectrum meets the requirements of Rule 65," but suggests that "the Court should modify the injunction to direct Spectrum to retain an independent, outside expert to help the company create a robust CPSA compliance program." (Dkt. #254 at 1.) The government is correct that the aforementioned improvements may not be sufficient to "ensure compliance" and "avoid a repetition of the violations discussed [in the court's earlier] opinion and order." (Dkt. #235 at 1-2.) As the government explains, such "[a] professional outside consultant. . . could confidentially delve into the details of relevant corporate procedures, candidly discuss operations with pertinent employees, and assist in designing detailed, effective enhancements," as well as "design employee training necessary to make the revised program work." (Dkt. #254 at 8-9.)
The government's points are well taken. Hiring an outside consultant to review its procedures is a straightforward, specific way for Spectrum to ensure its good faith compliance with the permanent injunction, rather than continuing to live under the vagueness of the admonition to "obey-the-law" currently contained in the permanent injunction. Keeping in mind its narrow authority because of the pending appeal, the court will further clarify its permanent injunction with the following provisions:
As noted, these additional changes are also intended to provide specific guidance to Spectrum to ensure compliance. Unlike paragraphs 1-6 above, however, implementation of paragraph 7 would go beyond the status quo, as paragraph 7 requires Spectrum to do more than simply maintain the status quo. As such, the court will stay enforcement of that paragraph pending appeal, as the Seventh Circuit is in the best position to resolve whether this particular provision is an appropriate clarification by this court both as a matter of jurisdiction and on the merits.
IT IS ORDERED that:
A. The permanent injunction (dkt. ##234, 235) is amended to read as follows: