AngioDynamics, Inc. v. Biolitec AG

United States Court of Appeals
For the First Circuit
No. 15-1645
ANGIODYNAMICS, INC.,
Plaintiff, Appellee,
v.
BIOLITEC AG; BIOMED TECHNOLOGY HOLDINGS, LTD.;
and WOLFGANG NEUBERGER,
Defendants, Appellants.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Michael A. Ponsor, U.S. District Judge]
Before
Lynch, Stahl, and Barron,
Circuit Judges.
Edward Griffith, with whom The Griffith Firm, Michael K.
Callan, and Doherty, Wallace, Pillsbury & Murphy, P.C., were on
brief, for appellants.
William E. Reynolds, with whom Nixon Peabody LLP was on
brief, for appellee.
May 6, 2016
STAHL, Circuit Judge. Defendants, who violated a
preliminary injunction, appealed the resulting civil contempt
order entered by the district court. The contempt order
included a civil arrest warrant and an escalating fines
provision. Defendants persisted in their defiance as the unpaid
coercive fines continued to accumulate. We affirmed the
contempt order and remanded "only to direct the district court
to amend the sanction order so that the fines cease to accrue at
some total amount." AngioDynamics, Inc. v. Biolitec AG
(Biolitec II), 780 F.3d 420, 428 (1st Cir.), cert. denied, 136
S. Ct. 535 (2015).
The district court dutifully followed our
instructions, and Defendants promptly appealed the revised
contempt order. In this appeal, Defendants argue that the
underlying preliminary injunction expired by its own terms and
so the district court can no longer coerce compliance with it.
Because Defendants failed to raise this argument at any time
prior to the present appeal, we DENY the appeal.
I. Facts & Background
One does not need to venture far back into our
catalogue of decisions to find a recitation of facts for this
case. This is Defendants' fourth appeal. See AngioDynamics,
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Inc. v. Biolitec AG (Biolitec I), 711 F.3d 248 (1st Cir. 2013);
Biolitec II, 780 F.3d 420 (1st Cir. 2015); AngioDynamics, Inc.
v. Biolitec AG (Biolitec III), 780 F.3d 429 (1st Cir. 2015).
For the convenience of the reader, however, we take a moment to
trace the travel of the case.
In 2012, AngioDynamics, Inc. ("ADI" or "Plaintiff")
obtained a $23 million judgment in New York against Biolitec,
Inc. ("BI") based on an indemnification clause in an agreement
between the two entities. Biolitec I, 711 F.3d at 250.
Plaintiff sought to secure payment on that judgment by bringing
suit against BI's President and CEO, Wolfgang Neuberger, and its
corporate parents, Biomed Technology Holdings ("Biomed") and
Biolitec AG ("BAG") (collectively, "Defendants"), which,
according to Plaintiff, had looted BI of over $18 million in
assets in order to render it judgment-proof. Biolitec III, 780
F.3d at 432. As it turns out, this would be but the first in a
series of attempts to evade payment to ADI and to elude the
power of the courts.
During discovery, Defendants refused to produce
documents and key witnesses, including Neuberger. Id. at 432-
33. More importantly, Plaintiff soon learned that BAG, based in
Germany, intended to effectuate a downstream merger with its
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Austrian subsidiary. Id. at 433. This, Defendants conceded,
would transfer BAG's assets to Austria, precluding ADI from
enforcing its judgment. Biolitec I, 711 F.3d at 252.
On September 13, 2012, the district court issued a
preliminary injunction barring Defendants from carrying out the
merger. On December 14, 2012, the district court denied
Defendants' motion for reconsideration. Id. at 250. Defendants
appealed the preliminary injunction to this Court, which
affirmed on April 1, 2013. Id. at 252. While that appeal was
pending, however, Defendants decided to go forward with the
merger anyway in direct violation of the injunction. Id. at 250
n.1. Defendants effectuated the merger on March 15, 2013,
despite repeated assurances to the district court that they
would comply with the order. AngioDynamics, Inc. v. Biolitec
AG, 946 F. Supp. 2d 205, 211-12 (D. Mass. 2013).
Plaintiff, understandably, moved for the district
court to hold Defendants in contempt. Id. at 211. In response,
the district court ordered Neuberger to appear in person at an
April 10, 2013 hearing to show cause why he should not be held
in civil or criminal contempt. Id. at 212. Neuberger defied
that order as well, notifying the district court that he would
not attend the show-cause hearing. Id.
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On April 11, 2013, the district court issued a
coercive civil contempt order authorizing escalating, monthly
fines against Defendants and an arrest warrant for Neuberger.
Id. at 215-16. The decision ordered Defendants to "return
Biolitec AG to the status quo ante," which Defendants conceded
was possible, albeit through a process that would be "lengthy,
burdensome, and onerous." Id. at 214-15. The district court
held that "fines and incarceration for civil contempt will
continue until Defendants effectively restore the status quo
existing prior to the violation of the court's order." Id. at
216. After a few months, Defendants filed another round of
motions to revoke the contempt order and vacate the underlying
injunction, which the district court denied. Biolitec II, 780
F.3d at 424. Defendants appealed.
While the contempt order and, once again, the
injunction were pending appeal, Defendants persisted in
stonewalling the district court. Not only did Defendants
unequivocally state that they had no intention of complying with
the contempt order, Defendants also disregarded the court's
warnings that continued defiance of its orders could result in a
default judgment. Biolitec III, 780 F.3d at 433, 436. With few
tools left at its disposal, the court eventually entered a
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default judgment as a sanction for violating its discovery
orders and awarded ADI approximately $75 million in damages.
Id. at 436. A default judgment entered on January 14, 2014, and
a final judgment entered on March 18, 2014. Id. at 433. Again,
defendants appealed.
On March 11, 2015, this Court issued decisions in two
companion cases. In Biolitec II, we affirmed the district
court's civil contempt sanctions as well as the district court's
denial of Defendants' motion to vacate the preliminary
injunction. 780 F.3d at 429. We recognized, however, that
Defendants' unyielding contumacy, paired with the accumulating
fine model imposed by the district court, had resulted in a fine
that "far exceed[ed] the amount of the original judgment ADI
[was] attempting to collect." Id. at 428. This was,
admittedly, Defendants' own doing since the power to purge the
contempt resided with--and continues to reside with--Defendants.
Id. Regardless, we decided that the district court should amend
its sanction order "so that the fines cease to accrue at some
total amount," and we remanded "for the sole purpose of
directing the district court to take action with respect to the
total accruing fine amount." Id. at 428, 429. In Biolitec III,
issued that very same day, we also affirmed the district court's
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decision to enter a default judgment against Defendants as a
sanction for discovery violations and to award damages in the
amount of approximately $75 million. 780 F.3d at 436-37.
On April 24, 2015, the district court complied with
our instructions and revised the contempt order by adding a cap
to Defendants' total contempt liability. The district court
observed that we had "affirmed the [contempt] decision . . . in
all substantive respects" and "remand[ed] only for a
clarification with regard to the total amount of the ultimate
coercive fine." The court "cap[ped] the fine Defendants will be
liable for at a total amount of $70 million, or approximately
three times the amount of Plaintiffs' original New York judgment
against Defendant Biolitec, Inc."
True to form, Defendants now appeal the district
court's revised contempt order. Defendants point to the
preliminary injunction, which states, "This Order shall be in
effect until this Court enters a final judgment in this action."
Alleging that the preliminary injunction therefore "expired" on
March 18, 2014, the date on which the district court entered a
final judgment in favor of ADI, Defendants now claim that the
district court was without authority to enter a "new" contempt
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decision on April 24, 2015 to coerce compliance with an
"expired" order.
II. Analysis
Our decision starts and ends with Defendants' failure
to raise the argument in their prior appeals. United States v.
Arreguin, 735 F.3d 1168, 1178 (9th Cir. 2013) ("We need not and
do not consider a new contention that could have been but was
not raised on the prior appeal."); In re Cellular 101, Inc., 539
F.3d 1150, 1155 (9th Cir. 2008) ("By failing to raise the . . .
issue in the prior appeal, [the party] waived its right to
assert the defense in subsequent proceedings."). Simply put,
Defendants' window of opportunity to make this argument closed
with our twin decisions in Biolitec II and Biolitec III. As we
stated in Biolitec III, "[w]e will not revisit legal rulings
'explicitly or implicitly decided by an earlier appellate
decision in the same case.'" 780 F.3d at 434 (emphasis added)
(quoting Remexcel Managerial Consultants, Inc. v. Arlequin, 583
F.3d 45, 53 (1st Cir. 2009)). "[T]he law of the case doctrine
forecloses reconsideration of issues that were decided--or that
could have been decided--during prior proceedings." United
States v. Williams, 475 F.3d 468, 471 (2d Cir. 2007) (emphasis
added).
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It is unclear whether the Defendants' failure to
raise this argument in their prior appeals was the result of
inadvertence or tactical reserve and procedural gamesmanship.
Either way, we decline to address their challenge now. During
Defendants' prior appeals, they simultaneously challenged the
contempt order, the entry of default judgment, the final
judgment award, and--again--the preliminary injunction itself.
All of the ingredients for the present appeal were at hand, and
yet Defendants declined to make their argument at that time.
Perhaps, they opted to await our decisions and see how they
fared, and when they realized that their original recipe had
failed to impress, they used the very same ingredients to cook
up a collateral challenge to those decisions by appealing an
order entered at our behest.
Whether or not Defendants intentionally delayed making
this argument, the argument was available only because of
Defendants' default and continued intransigence in the District
Court. We thus decline to allow them to profit from that
conduct, given that they are raising this argument only at this
late date. See In re Cellular, 539 F.3d at 1155 ("Permitting a
case to proceed to a decision on the merits before asserting a
previously available defense undermines the integrity of the
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judicial system, wastes judicial resources, and imposes
substantial costs upon the litigants." (internal quotation marks
and citations omitted)); 18B Wright & Miller, Fed. Prac. & Proc.
Juris. § 4478.6 (2d ed.). Although the present challenge might
have posed a question for our consideration had Defendants
raised it in a timely manner, its current deployment reeks of an
attempt at re-litigation.
Defendants seek to circumvent this straightforward
result in two ways. First, they contend that they had to wait
until the revised contempt order issued before raising this
argument because only then was contempt entered to coerce
compliance with an expired order. Second, they argue that the
issue is a "jurisdictional" one and, therefore, may be raised at
any time. Arbaugh v. Y & H Corp., 546 U.S. 500, 514 (2006)
("[S]ubject-matter jurisdiction, because it involves a court's
power to hear a case, can never be forfeited or waived."
(quoting United States v. Cotton, 535 U.S. 625, 630 (2002))).
We find neither justification persuasive.
Defendants' first parry misses the mark. During
Defendants' prior set of appeals, they were subject to a
contempt order and continuously escalating fines even though the
underlying preliminary injunction had "expired" as a result of
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their default. We affirmed the contempt order and remanded "for
the sole purpose of directing the district court" to set a total
cumulative liability figure. Biolitec II, 780 F.3d at 429
(emphasis added). Thus, the Defendants' "expired order"
argument was as available to them at the time of their prior
appeals as it was after the district court capped the escalating
fines, per our direction. Nothing about the disposition of the
prior appeal could change that simple fact. Defendants had both
the incentive and the opportunity to raise that issue with this
Court and failed to do so.1
Defendants' second, "jurisdictional" argument is
equally unavailing. "'Jurisdiction,' it has been observed, 'is
a word of many, too many, meanings.'" Steel Co. v. Citizens for
a Better Env't, 523 U.S. 83, 90 (1998) (quoting United States v.
Vanness, 85 F.3d 661, 663 n.2 (D.C. Cir. 1996)). The problem is
that "[c]ourts--including [the Supreme Court]--have sometimes
1
Nor do we imagine the Supreme Court would be particularly
impressed with this argument. In petitioning the Court to
review our decision in Biolitec II, Defendants raised precisely
this point. Petition for a Writ of Certiorari, No. 15-69, 2015
WL 4319585, at *15 n.21 (July 1, 2015) ("Biolitec has appealed
the Remand Order on the ground that the Preliminary Injunction
expired by its own terms upon entry of the Default Judgment and
was no longer in effect when the Remand Order was entered on
April 24, 2015."). That petition failed. 136 S. Ct. 535.
- 11 -
mischaracterized claim-processing rules or elements of a cause
of action as jurisdictional limitations, particularly when that
characterization [is] not central to the case, and thus [does]
not require close analysis." Reed Elsevier, Inc. v. Muchnick,
559 U.S. 154, 161 (2010). Such "drive-by jurisdictional
rulings" can confuse the distinction between "true
jurisdictional conditions" and "nonjurisdictional limitations on
causes of action." Id; see also Arbaugh, 546 U.S. at 511
("Subject matter jurisdiction in federal-question cases is
sometimes erroneously conflated with a plaintiff's need and
ability to prove the defendant bound by the federal law asserted
as the predicate for relief--a merits-related determination."
(quoting 2 J. Moore et al., Moore's Federal Practice § 12.30[1],
p. 12–36.1 (3d ed. 2005)).
To curb this practice, the Supreme Court has
"evince[d] a marked desire to curtail" such flippant use of the
term in recent years. Reed, 559 U.S. at 161. Courts (and
litigants) have been encouraged to use the term jurisdictional
"only when it is apposite." Id. Heeding this admonition, we
must proceed with caution and take care not to indulge any
party's mere self-serving characterization.
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The question of contempt jurisdiction is a complex
one. But while the boundary between a court's jurisdiction to
order contempt and the merits of that court's contempt order may
be difficult to discern at times, Defendants' argument fails to
qualify as jurisdictional under any fair reading of the law.
The Supreme Court has explained that "'[j]urisdiction'
refers to 'a court's adjudicatory authority.' Accordingly, the
term 'jurisdictional' properly applies only to 'prescriptions
delineating the classes of cases (subject-matter jurisdiction)
and the persons (personal jurisdiction)' implicating that
authority." Id. at 160-61 (emphasis added) (internal citations
omitted) (quoting Kontrick v. Ryan, 540 U.S. 433, 455 (2004));
see also Bowles v. Russell, 551 U.S. 205, 212-13 (2007);
Scarborough v. Principi, 541 U.S. 401, 414 (2004).
Accepting this premise, Defendants' argument would
appear to be a challenge to the legal propriety of the revised
contempt order, not the district court's jurisdiction to issue
that revision. This is because the court's jurisdiction to hold
a party in civil contempt would spring from its jurisdiction
over the action itself. "A district court's authority to issue
a contempt order derives from its inherent power to 'sanction
. . . litigation abuses which threaten to impugn the district
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court's integrity or disrupt its efficient management of [case]
proceedings." Biolitec II, 780 F.3d at 426 (alterations in
original) (quoting United States v. Kouri–Perez, 187 F.3d 1, 7
(1st Cir. 1999)). While "a proceeding in criminal contempt is a
separate and independent proceeding at law, with the public on
one side and the respondent on the other," "[p]roceedings in
civil contempt are between the original parties and are
instituted and tried as a part of the main cause." Parker v.
United States, 153 F.2d 66, 70 (1st Cir. 1946) (emphasis added);
see also Ramos Colon v. U.S. Atty. for Dist. of P.R., 576 F.2d
1, 5 (1st Cir. 1978) ("Strictly a remedial action, civil
contempt arises out of the main suit and . . . is aimed at
restoring the parties to the positions they would have held had
the order been obeyed." (emphasis added)).2
In other words, the court's jurisdiction to impose
civil contempt would run concurrent with the court's subject-
matter jurisdiction over the action. Cf. Lewis v. S.S. Baune,
534 F.2d 1115, 1121 (5th Cir. 1976) ("[A]ll courts . . . have
inherent power, within certain limits, to control the conduct of
2
Criminal contempt, on the other hand, is a "crime in the
ordinary sense." United Mine Workers of Am. v. Bagwell, 512
U.S. 821, 826 (1994) (quoting Bloom v. State of Illinois, 391
U.S. 194, 201 (1968)).
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the parties who have subjected themselves to the jurisdiction of
the courts. . . . However, merely because the court has power,
it does not necessarily follow that any and all exercises of
such power are proper."). Although a movant would need to
demonstrate the elements of civil contempt, such as the
contemnor's "ability to comply with the order" or the fact that
the contemnor actually "violated [an] order," Hawkins v. Dep't
of Health & Human Servs., 665 F.3d 25, 31 (1st Cir. 2012), these
requirements would mark the proper exercise of the contempt
authority, not count as jurisdictional prerequisites.
This view recognizes the contempt power as an inherent
aspect of the federal courts' authority over cases. In
establishing the lower federal courts, the Judiciary Act of 1789
confirmed this power and necessarily vested the courts with it.
See Green v. United States, 356 U.S. 165, 179 (1958), overruled
in part on other grounds by Bloom v. State of Illinois, 391 U.S.
194, 201 (1968); Anderson v. Dunn, 19 U.S. 204, 227 (1821)
("Courts of justice are universally acknowledged to be vested,
by their very creation, with power to impose . . . submission to
their lawful mandates . . . ."). "The moment the courts of the
United States were called into existence and invested with
jurisdiction over any subject, they became possessed of [the
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contempt] power." Ex parte Robinson, 86 U.S. 505, 510 (1873).
Thus, if the court possesses subject-matter jurisdiction over an
action, it would seem that it must possess civil contempt
jurisdiction in equal measure to see that action through.
The trouble arises in attempting to categorize the
statutory limitations that Congress has imposed upon that power.
"In 1831, Congress first enacted the statute that restricted the
circumstances under which contempt sanctions could be employed--
restrictions that today are embodied in 18 U.S.C. § 401 . . . ."
Armstrong v. Guccione, 470 F.3d 89, 106 (2d Cir. 2006). With
§ 401, Congress limited the contempt power to three classes of
cases, including disobedience to the court's "lawful writ,
process, order, rule, decree, or command." See Robinson, 86
U.S. at 511; 18 U.S.C. § 401(3) ("A court of the United States
shall have power to punish . . . such contempt of its authority
. . . as . . . [d]isobedience or resistance to its lawful writ,
process, order, rule, decree, or command.").3 The question is
3
"[Section] 401's use of the term 'punish' must be viewed
in the context of its predecessor statutes, which plainly
included within the meaning of 'punish' a court's coercive civil
contempt power, as well as the power to sanction a contemnor
criminally." Armstrong, 470 F.3d at 105.
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whether, and to what extent, these statutory limitations are
jurisdictional in nature.
On the one hand, the Supreme Court occasionally has
referred to § 401 in jurisdictional terms. See, e.g., Cammer v.
United States, 350 U.S. 399, 405 (1956) ("We see no reason why
the category of 'officers' subject to summary jurisdiction of a
court under § 401(2) should be expanded beyond the group of
persons who serve as conventional court officers and are
regularly treated as such in the laws."). Indeed, in Ex parte
Robinson, the Supreme Court vacated a contempt order that
disbarred the contemnor, and the Court stated that "the question
. . . [was] not whether the court erred, but whether it had any
jurisdiction to disbar [the contemnor] for the alleged
contempt." 86 U.S. at 511. Because the statute limited the
implements available to the court to fines or imprisonment, the
Supreme Court held that disbarment exceeded the district court's
jurisdiction. See id. at 512-13.
On the other hand, the Supreme Court has cautioned in
more recent years that Congress must clearly express that a
limitation is jurisdictional in order for the federal courts to
interpret it as such. Reed, 559 U.S. at 163. And, in rare
exceptions to that rule, a statute will only be "ranked as
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jurisdictional absent an express designation" if the statutory
limitation is "of a type that [the Supreme Court] ha[s] long
held [does] 'speak in jurisdictional terms' even absent a
'jurisdictional' label." Id. at 168. Any of the Supreme
Court's "unrefined dispositions" of jurisdiction "should be
accorded 'no precedential effect' on the question whether the
federal court ha[s] authority to adjudicate [a] claim."
Arbaugh, 546 U.S. at 511 (quoting Steel Co., 523 U.S. at 91).
Here, the statute does not speak in explicitly
jurisdictional terms and only Robinson examines the nature of
the limitations in any meaningful measure. As such, it might be
more appropriate to read § 401 as setting limits upon the proper
exercise of the court's contempt power rather than as setting
limits upon the court's underlying contempt jurisdiction.
Yet, we need not resolve this difficult question today
because Defendants' appeal would fail to qualify as
jurisdictional even if we were to assume that § 401 sets out
jurisdictional limits. There is no question that the district
court had (and retains)4 jurisdiction over the present action.
4
The district court retains jurisdiction over the action so
long as its judgment remains unexecuted. Fafel v. DiPaola, 399
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In addition, there is no question that the alleged contempt
falls within one of the three classes delineated by § 401 (the
alleged violation of a lawful order) and that the court's
coercive sanctions fall within the category of sanctions
permitted by § 401 (fines and imprisonment). The only question
raised by Defendants' appeal is whether the elements necessary
to sustain a finding of civil contempt--namely, the ongoing,
actual violation of a lawful order--were satisfied. But this is
a question about the merits of the order, not whether it fell
outside § 401's purview altogether. See Robinson, 86 U.S. at
511 (distinguishing between the question of "whether the court
erred" in finding that "contempt was committed" and the question
of "whether [the court] had any jurisdiction" to use disbarment
as a sanction). Such a challenge does not become
"jurisdictional" just because Defendants call it so.
Defendants' cited authorities do not hold otherwise.
In Shillitani v. United States, for example, a witness was
confined in order to coerce him into answering questions for a
grand jury. 384 U.S. 364, 370 (1966). Once the grand jury was
discharged, however, the "contumacious witness c[ould] no longer
F.3d 403, 411 (1st Cir. 2005) ("[E]nforcement jurisdiction . . .
extends . . . as far as required to effectuate a judgment.").
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be confined since he then ha[d] no further opportunity to purge
himself of contempt." Id. at 371. Having lost "the ability
. . . to comply with the court's order, . . . the rationale for
civil contempt vanishe[d]." Id. at 371-72. This challenges the
merits of continued contempt, not the court's jurisdiction. See
also FTC v. Verity Int'l, Ltd., 443 F.3d 48, 70 (2d Cir. 2006)
("The district court . . . no longer requires [the defendants]
to do the act that the contempt sanctions coerce them do to.
Thus, the sanctions must be vacated."); Consol. Rail Corp. v.
Yashinsky, 170 F.3d 591, 596 (6th Cir. 1999) (holding that,
because the coercive order "no longer serves a purpose," the
contumacious party was "no longer . . . in active contempt of
court for refusing to comply"). Whether a party violated an
order, whether coercion continues to serve its purpose, and
whether the party retains the ability to purge5 are all questions
about the merits of the court's contempt decision.
In fact, the only case cited by Defendants that
analyzes the question in clearly jurisdictional terms bolsters
5
In order to remain coercive rather than punitive, the
contemnor must retain the ability to purge the violation so that
he "carries the keys of his prison in his own pocket." Bagwell,
512 U.S. at 828 (quoting Gompers v. Buck's Stove & Range Co.,
221 U.S. 418, 442 (1911)).
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our view. In EEOC v. Local 40, Int'l Ass'n of Bridge,
Structural & Ornamental Iron Workers, the Second Circuit held
that "[a] court does not have inherent power to enforce an order
that has expired." 76 F.3d 76, 80 (2d Cir. 1996). In that
case, however, the "order" was a consent decree. Id. The
decree, entered in 1980, expired in three years unless the Equal
Employment Opportunity Commission ("EEOC") moved for an
extension within that time. Id. at 81. Thus, after three years
without EEOC intervention, the purpose of the decree was
satisfied and the parties were "released from the court's
continuing jurisdiction." Id. In other words, "the court's
enforcement authority expired when the decree expired." Id. at
80 (emphasis added). Because the court no longer possessed
jurisdiction over the action at all, it is no surprise that the
court lacked any "inherent power" to hold one of the parties in
contempt based on a "violation" a decade later. Id. at 78.
The case at bar bears no resemblance. In this case,
the district court continues to maintain jurisdiction over the
action, Defendants violated the terms of the underlying order
prior to its "expiration," and the court took action to rectify
the situation within the context of an ongoing case. We
affirmed, and Defendants now raise a belated challenge
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implicitly foreclosed by our prior decisions. In such
circumstances, Defendants' appeal must fail.6
III. Conclusion
"The procedure to enforce a court's order commanding
or forbidding an act should not be so inconclusive as to foster
experimentation with disobedience." Maggio v. Zeitz, 333 U.S.
56, 69 (1948). Defendants in this case, who have repeatedly
thumbed their nose at the district court, "are not unwitting
victims of the law. . . . They knew full well the risk of
crossing the forbidden line." McComb v. Jacksonville Paper Co.,
336 U.S. 187, 193 (1949). Defendants cannot now hang their hat
on a theory borne of their own defiance and delay. For the
foregoing reasons,7 we DENY the appeal.8
6
Defendants raise a last-ditch argument in the event we
find, as we do, that the issue is not jurisdictional and that
they are deemed to have had the opportunity to raise the issue
earlier. Defendants argue that waiver is a matter of
discretion, and they urge us to make an exception in this case.
In re Net-Velázquez, 625 F.3d 34, 41 (1st Cir. 2010). Needless
to say, this is not a case where "the equities heavily
preponderate in favor of such a step," id. (quoting Nat'l Ass'n
of Soc. Workers v. Harwood, 69 F.3d 622, 627 (1st Cir. 1995)),
and so we would decline to exercise our discretion to hear the
appeal regardless.
7
Although we need not reach the merits of Defendants'
appeal, we do regard their theory--which they base on
Shillitani, Verity, and Yashinky--with some skepticism. The
injunction set out a temporal limit ("in effect until . . .
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final judgment"), but it also assumed compliance with its
substantive terms ("Defendants shall not carry out the proposed
'downstream merger'"). The order as a whole served one purpose:
keeping assets available to satisfy a judgment. United States
v. Christie Indus., Inc., 465 F.2d 1002, 1007 (3d Cir. 1972)
("The language of an injunction must be read in the light of the
circumstances surrounding its entry . . . [such as] the mischief
that the injunction seeks to prevent."); see also Ohr ex rel.
Nat'l Labor Relations Bd. v. Latino Exp., Inc., 776 F.3d 469,
480 (7th Cir. 2015) ("[A]ny other interpretation . . . would
eviscerate the effect of [preliminary injunctions], as a party
could simply continue its violation . . . long enough that the
district court order expire[s] by its own terms.").
Nor need we delve deeply into other equitable grounds upon
which the appeal might be barred. Sapoundjiev v. Ashcroft, 376
F.3d 727, 729 (7th Cir. 2004) ("Someone who cannot be bound by a
loss has warped the outcome in a way prejudicial to the other
side; the best solution is to dismiss the proceeding.").
8
Because the order stands, we do not decide here what
Defendants might owe even if the contempt order expires by law
or by purge. The liability cap was not a fixed, determinate
fine set out in advance, but rather a ceiling on accumulated,
past due fines. When a court imposes ongoing fines at regular
intervals, these fines--like civil imprisonment--"exert a
constant coercive pressure." Bagwell, 512 U.S. at 829. "[O]nce
the jural command is obeyed, the future, indefinite, [monthly]
fines are purged." Id. (emphasis added). Presumably,
Defendants' uninterrupted disregard of the contempt order cannot
render collectable past due amounts punitive. See id. at 840
n.* (Scalia, J., concurring) ("The per diem fines . . . were in
most relevant respects like conditional prison terms[,] . . .
the penalty continued until the contemnor complied, and
compliance stopped any further punishment but of course did not
eliminate or restore any punishment already endured." (emphasis
added)). Of course, the district court may still "reassess the
fine amount if Defendants come into compliance." See Biolitec
II, 780 F.3d at 428.
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