PRISCILLA R. OWEN, Circuit Judge.
This appeal arises from a contempt proceeding ancillary to the merits of the underlying case. Michael A. Moore, the attorney for Dean Kattler, the defendant in the proceedings below, appeals the imposition
In the underlying litigation, Waste Management, Inc. (WM) sued Kattler, a former employee, for misappropriating confidential business information, and for violating the terms of his employment agreement by accepting a job with Emerald Services, Inc. (Emerald), an alleged WM competitor.
Shortly after the onset of litigation, WM sought a temporary restraining order (TRO) to enjoin Kattler from disclosing WM's confidential information, and requiring Kattler to produce images of all electronic devices that might contain such information. On December 12, 2012, the district court issued a TRO directing Kattler to "produce to Waste Management images of all electronic devices used by Kattler... except for the electronic devices used and/or owned by Kattler at Emerald," and to "produce to a third-party forensics expert, to be agreed upon by the Parties, images of all electronic devices used by Kattler ... at Emerald." Eight days later, the district court issued a preliminary injunction that modified the TRO by requiring Kattler to produce all personal devices to WM within two days (by December 22), and expanded the definition of "personal devices" to include all of Kattler's devices, except those devices "provided to Mr. Kattler by Emerald." This enlargement occurred despite the fact that the parties had discussed with the court the importance of preventing the disclosure of attorney-client-privileged information present on devices that were now to be produced directly to WM.
Because the order failed to address the attorney-client-privilege concerns, Moore argued that Kattler should not be compelled to produce certain devices. Moore also disputed, based on Kattler's representations, the existence of a certain SanDisk-brand USB thumb drive sought by WM. After it became clear Kattler would not produce those devices, WM moved for a show-cause hearing as to why Kattler should not be held in contempt. The district court granted this motion and ordered "that Defendant appear for a hearing" to be held on January 22, 2013.
At the hearing, one of the issues was whether Kattler was required to produce his iPad for inspection. Moore argued that Kattler complied with the court's orders despite not producing the iPad because it was a personal device and because it contained information protected by the attorney-client privilege. The district court disagreed that the iPad could be considered "personal" under the preliminary injunction, and ordered that the device be produced to WM. Notably, the court spoke in terms of the device itself, rather than an image of its content. The court recognized Moore's valid privilege concerns and stated Kattler would not waive the privilege by producing the iPad, but indicated Kattler still had to produce it. Moore also represented to the court that Kattler could not produce the SanDisk thumb drive WM was requesting because Kattler had never owned such a drive. The court declined to hold Kattler in contempt but did issue an order requiring that all parties comply with his orders, "whether written or pronounced from the Bench."
Following the hearing, Kattler informed Moore that he now recalled owning at least one SanDisk thumb drive. Moore consulted a professional responsibility expert and,
Kattler, now represented by new counsel, produced the image of the iPad to WM, but the image contained no relevant information. The responsive documents were stored in a restricted portion of the iPad's memory that was not included in the image because that portion of the memory was technologically inaccessible at the time the device was imaged. WM demanded Kattler produce the iPad itself so that recently-developed "jailbreaking" software could be used to access the device's restricted memory. After Kattler refused to do so on grounds that the restricted memory contained privileged information, WM filed a renewed motion for Kattler to show cause as to why he should not be found in contempt for refusing to produce the iPad itself. The district court granted this motion and issued a notice of setting providing that a hearing would take place on March 4. The notice stated only that a hearing was to be held to address docket entry "# 84," which was WM's show-cause motion. This motion listed Kattler as the sole potential contemnor whose liability was to be addressed at the hearing.
Following this hearing, the district court found both Kattler and Moore in contempt on grounds that they: (1) misled the court as to the existence of a SanDisk-brand USB thumb drive, (2) failed to produce an image of Kattler's iPad, and (3) failed to produce the iPad device itself. Moore contends on appeal that, while he was aware he might be the subject of a future contempt hearing, he was not provided with adequate notice that a contempt finding could be entered against him after the show-cause hearing. He further argues that, on the merits, he did not aid or abet any attempt to mislead the court as to the existence of the thumb drive, and that his failure to comply with the court's orders concerning the iPad is excusable because he was attempting to assert the attorney-client privilege.
"We review contempt findings for abuse of discretion, but `review is not perfunctory.'"
In general, due process requires "that one charged with contempt of court be advised of the charges against him, have a reasonable opportunity to meet them by way of defense or explanation, have the right to be represented by counsel, and have a chance to testify and call
Moore's allegedly contumacious conduct occurred outside the courtroom. While his conduct was discussed at the second show-cause hearing, the district court did not find him in contempt based on any disruptive behavior occurring at that particular proceeding. Therefore, the district court's contempt finding cannot stand if Moore was not afforded adequate notice.
WM contends its pleadings provided Moore with sufficient notice he might be held in contempt at the second show-cause hearing. It argues this court's decisions in American Airlines, Inc. v. Allied Pilots Association
Adequate notice typically takes the form of a show-cause order and a notice of hearing identifying each litigant who might be held in contempt.
We also conclude that the district court abused its discretion by finding Moore in contempt. "A party commits contempt when he violates a definite and specific order of the court requiring him to perform or refrain from performing a particular act or acts with knowledge of the court's order."
The district court held Moore in contempt for misleading it as to the existence of the SanDisk thumb drive. In its December 20, 2012 preliminary injunction, the district court ordered Kattler and Moore to produce to WM images of all personal electronic devices within two days. The SanDisk thumb drive was a personal electronic device, and Moore, with knowledge of the court's order, failed to produce it by December 22. Therefore, the prima facie elements of contempt were present.
But an alleged contemnor may defend against a prima facie showing of contempt by demonstrating a present inability to comply with a court order.
The record reveals Kattler misled Moore as to the existence of the thumb drive and, as a consequence, Moore was unware the thumb drive existed until after the first show-cause hearing. Prior to and during the first show-cause hearing, Kattler repeatedly denied to Moore that he had used any other electronic devices to download WM documents besides a certain Western Digital hard drive and a generic (non-SanDisk) thumb drive. Neither WM nor the district court cited any record evidence to the contrary.
Instead, WM defends this ground for contempt by arguing that, even if Moore "unknowingly repeated Kattler's representations to the district court," he still had a duty to correct those statements after he determined that Kattler did in fact possess the SanDisk drive, and his continued silence at that point made him complicit in the deception. In support of this contention, WM cites In re Rosenthal,
Viewing the record as a whole, there is abundant evidence that Kattler deceived Moore as to the existence of the SanDisk thumb drive until late January and no evidence that Moore knew of its existence until that time. We therefore conclude that the district court's finding that Moore participated in an attempt to mislead the court as to the existence of the SanDisk thumb drive is clearly erroneous. Accordingly, the district court abused its discretion by finding Moore in contempt on this ground.
The district court also held Moore in contempt for violating its order to produce directly to WM an image of Kattler's iPad. In Maness v. Meyers,
Here, it is clear that the iPad contained privileged information. Indeed, at the December 18 preliminary-injunction hearing the parties and the district court agreed upon a framework for screening
Lastly, the district court found Moore in contempt because of his failure to produce the iPad itself. However, no contempt liability may attach if a party does not violate a "definite and specific order of the court."
Further, even if the order had been definite and specific, Moore would have been entitled to raise renewed concerns about the presence of attorney-client-privileged-documents in the restricted portion of the iPad's memory.