P. KEVIN CASTEL, District Judge.
Petitioner Jolen, Inc. ("Jolen") moves for an order finding respondents Kundan Rice Mills Ltd. and Kundan Care Products, Ltd. (the "Kundan Entities") in civil contempt. Jolen asserts that respondents violated this Court's anti-suit injunction order, dated April 9, 2019.
Set forth below are the Court's Findings of Fact and Conclusions of Law. Considering Jolen's submissions and the evidence of record, the Court finds by clear and convincing evidence that the respondents violated the Court's Orders and the respondents are adjudged to be in contempt of Court. Jolen's motion is granted.
On or about November 1, 2004, Jolen entered into an Exclusive Trademark License Agreement (the "Agreement") with the Kundan Entities.
The ICC Court appointed a sole Arbitrator to decide the issues of jurisdiction and liability. (Deutsch Decl. of 3/26/2019 Ex. 3 ¶¶ 17-18). Both parties appeared and participated at the arbitration proceedings. (
In May 2016, one month after Jolen filed its Request for Arbitration, the Kundan Entities sought declaratory and injunctive relief through an ex parte suit in the courts of the Republic of India to prevent Jolen from proceeding with the arbitration. (
On April 9, 2019, this Court and issued an anti-suit injunction against the Kundan Entities (the "Injunction Order"). (Doc 21.) The Court ordered:
Doc 21 at 11-12. On April 10, 2019 this Court confirmed the Partial Award of the arbitrator (the "Confirmation Order). (Doc 22.)
On April 11, 2019, Jolen served copies of the Injunction Order and the Confirmation Order on Kevin J. Lennon and Prithu Garg—counsel for the Kundan Entities in the arbitration proceeding and then counsel in the ongoing Indian action, respectively. (Declaration of Jeremy E. Deutsch of May 10, 2019 at ¶ 8; Doc 32.) On April 23, Lennon "confirm[ed] that [the] letters ha[d] been forwarded to [the] client" and stated that "our firm does not act for any Kundan entity which is a party in the Indian High Court proceedings . . . ." (
In contravention of this Court's Injunction Order, counsel for the Kundan Entities appeared in hearings before the Indian court on April 22, 2019 (
Jolen petitioned this Court on May 10, 2019 to hold the Kundan Entities in civil contempt of the Injunction Order and issue sanctions to induce compliance with the Injunction Order (Doc 30.) Pursuant to the Court's Order of May 9, 2019, the Kundan Entities had fourteen days to respond (Doc 28.) Jolen served copies of its motion papers on the former counsel of record on May 14, 2019 (Doc 33 at 1), pursuant to the Court's Order granting alternative service (Doc 12.) On June 3, 2019, Jolen again served copies of the motion papers on Kundan's known counsel and present counsel of record for the Kundan Entities in the Indian proceedings, Mr. Ajaivir Singh (Doc 39), pursuant to the Court's Amended Order granting alternative service on the additional counsel (Doc 38.) The Kundan Entities have not responded to Jolen's motion.
"A party may be held in civil contempt for failure to comply with a court order if `(1) the order the contemnor failed to comply with is clear and unambiguous, (2) the proof of noncompliance is clear and convincing, and (3) the contemnor has not diligently attempted to comply in a reasonable manner.'"
"[A] clear and unambiguous order is one that leaves `no uncertainty in the minds of those to whom it is addressed.'"
As to the requirement for clear and convincing proof, courts requires "a quantum of proof adequate to demonstrate a `reasonable certainty' that a violation occurred."
The Injunction Order is clear and unambiguous. The Injunction Order is plainly addressed to "Kundan Rice Mills, Ltd. and Kundan Care Products, Ltd., their officers, agents, servants, employees, attorneys, and other persons. . . ." It required the Kundan Entities to withdraw any pending Indian action intended to modify or vacate the Partial Award and cease appearing before the courts of India. The Injunction Order is facially clear. There are no provisions of the Injunction Order that leave uncertainty as to what acts are forbidden.
Jolen has presented clear and convincing evidence that the Kundan Entities have violated the Injunction Order. Counsel for the Kundan Entities has appeared before the High Court of Punjab and Haryana in the State of Chandigarh in the pending action on multiple occasions, most recently on May 8, 2019. Counsel has not withdrawn the Indian action as required by the Injunction Order or stopped participating in the action as further required by the Injunction Order. Finally, Kundan has not diligently attempted to comply with the Injunction Order in a reasonable manner. The Kundan Entities have not appeared before this Court and have not asserted that compliance was impossible. The Kundan Entities are adjudged to be in civil contempt.
"The power to punish parties for contempt is inherent in all courts."
Civil contempt sanctions serve a dual purpose: "to secure future compliance with court orders and to compensate the party that has been wronged."
For compensatory sanctions, a court "should reimburse the injured party for its actual damages."
Coercive sanctions are warranted. Continued noncompliance with the Injunction Order by the Kundan Entities exposes Jolen to unnecessary cost and expense through a vexatious action in a foreign forum and harms the integrity of the Injunction Order. Monetary sanctions are an efficacious means of enforcing the Injunction Order. Finally, the Kundan Entities have not demonstrated that imposition of monetary sanctions would represent any financial burden on the Kundan Entities. The Court may impose a conditional fine so long as the Kundan Entities have a reasonable time to bring themselves in compliance of with the Injunction Order. Jolen requests a daily fine in some multiple of $3,000, the amount of the security it posted in connection with the Injunction Order. (Deutsch Decl. of 5/10/2019 ¶ 17; Doc 32.) Although Jolen has not made a request for compensatory sanctions, the Court reserves the right to award compensatory sanctions to Jolen from any sum deposited by the Kundan Entities into the Court's Registry.
For the foregoing reasons, Jolen's motion for an order of contempt and a coercive fine against the Kundan Entities is GRANTED. It is hereby ORDERED, ADJUDGED, and DECREED that:
If, within fourteen (14) days of this Order, the Kundan Entities fail to fully comply with the Injunction Order, including by withdrawing any and all proceedings in the Republic of India relating to the Partial Award issued on or about July 13, 2018, they shall be fined in the amount of three thousand dollars ($3,000) without further proceeding or order of this Court. For every seven (7) days thereafter that the Kundan Entities remain in noncompliance with the Injunction Order, the three-thousand-dollar ($3,000) fine shall double until fully compliance is achieved. The Kundan Entities shall pay all fines imposed by this Order into the Registry of this Court.
Counsel for Jolen shall serve this Order forthwith upon the Kundan Entities. The Clerk is directed to terminate the motion. (Doc 30.)
SO ORDERED.