Washington Metropolitan Area Transit Commission v. Reliable Limousine Service, LLC

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued October 23, 2014 Decided January 13, 2015
No. 13-7072
WASHINGTON METROPOLITAN AREA TRANSIT COMMISSION,
APPELLEE
v.
RELIABLE LIMOUSINE SERVICE, LLC AND
PAUL BENJAMIN RODBERG,
APPELLANTS
Consolidated with 13-7161
Appeals from the United States District Court
for the District of Columbia
(No. 1:12-cv-00576)
Elyse L. Strickland argued the cause for the appellants.
Maurice B. VerStandig was with her on brief.
Jeffrey M. Lehmann argued the cause for the appellee.
William S. Morrow Jr., was with him on brief.
Before: HENDERSON and PILLARD, Circuit Judges, and
WILLIAMS, Senior Circuit Judge.
Opinion for the Court filed by Circuit Judge HENDERSON.
2
KAREN LECRAFT HENDERSON, Circuit Judge:
The Wise do at once what the Fool does at last.
— Baltasar Gracián
The Art of Worldly Wisdom, cclxviii
Paul Rodberg operated a limousine business in the District of
Columbia metropolitan area (District) for many years without
authorization from the Washington Metropolitan Area Transit
Commission (WMATC). WMATC eventually sued Rodberg
and his company in district court, seeking an injunction to
shut down his illegal limousine operation. After Rodberg
failed to participate in discovery, the district court entered
default judgment against him. Not to be outfoxed, Rodberg
ignored the default judgment and continued operating his
limousine business under a different name. The district court
issued yet another order, making perfectly clear that all of
Rodberg’s companies were enjoined from transporting
passengers in the District without a license. Rodberg now
appeals the default judgment and the subsequent order. We
affirm the district court’s default judgment and lack
jurisdiction to consider the subsequent order.
I. BACKGROUND
Rodberg is in the limousine business. He has owned
several iterations of a company providing limousine service in
the District. From 1996 to 2009, Rodberg operated Reliable
Limousine, Inc. (RLI). RLI repeatedly failed to pay its
federal taxes. The Internal Revenue Service eventually
caught up with Rodberg but, instead of paying the taxes owed,
Rodberg shifted his limousine business to a new company:
Reliable Limousine Service, LLC (RLS). RLS operated from
2009 to 2011 but it too failed to pay taxes. The IRS again
pursued and Rodberg again shifted his business to a new
3
company: Reliable Limousine and Bus Service, LLC (RLBS).
The United States sued Rodberg, RLI, RLS and RLBS in the
District of Maryland, seeking injunctive relief to force their
compliance with the tax laws. At one point in the litigation,
the district court held Rodberg in contempt for “willfully and
deliberately” refusing to participate in discovery. See Order
of Contempt at 1, United States v. Reliable Limo. Serv., LLC,
No. 8:11-cv-03383 (D. Md. Oct. 22, 2012). Rodberg and the
United States ultimately settled.
Rodberg’s legal woes did not end there. His limousine
companies not only failed to pay their taxes but also
transported passengers within the District without a license.
In April 2012, WMATC sued Rodberg and RLS in the district
court here, seeking an injunction to shut down Rodberg’s
limousine operation. (Notably, RLBS was not a party to the
lawsuit.) The district court originally set the discovery
deadline for November 2012. In October 2012, WMATC
served Rodberg with interrogatories and document requests.
Rodberg never responded. In December, the district court
ordered Rodberg to participate in discovery, extended the
discovery deadline to January 2013 and set the case for trial in
March 2013. Rodberg remained non-compliant. He claimed
he was not participating in discovery because he was at that
point applying for a WMATC license. 1 In February 2013, the
district court rejected Rodberg’s excuse and sanctioned him
by awarding WMATC a default judgment. See WMATC v.
Reliable Limo. Serv., LLC, No. 1:12-cv-00576, 2013 WL
1
WMATC ultimately rejected Rodberg’s application and the Fourth
Circuit affirmed its decision. See In re Reliable Limo. & Bus Serv., LLC,
Nos. AP-2012-183, AP-2012-184, Order No. 13,775 (WMATC Feb. 28,
2013), aff’d sub nom. Reliable Limo. & Bus Serv., LLC v. WMATC, 553 F.
App’x 343 (4th Cir. 2014). The Fourth Circuit, like this Court, has
jurisdiction to review WMATC orders. See Pub. L. No. 101–505, tit. II,
art. XIII, § 5(a), 104 Stat. 1300, 1311–12.
4
461355, at *1 (D.D.C. Feb. 6, 2013). The default judgment
included a permanent injunction that prohibited Rodberg and
RLS from transporting passengers for hire in the District. 2
But WMATC’s victory was short-lived. It soon
discovered what the IRS knew all too well: pursuing Rodberg
was like playing whack-a-mole. Rodberg continued to
provide limousine service in the District via RLBS, not RLS.
This prompted WMATC to return to district court to seek a
contempt citation. Instead, the district court decided to
“clarify” its February injunction. WMATC v. Reliable Limo.
Serv., LLC, 985 F. Supp. 2d 23, 31–32 (D.D.C. 2013). In
October 2013, it issued an order expressly placing RLBS
under the February 2013 injunction’s prohibition on
transporting passengers for hire. 3
2
The February 2013 injunction provides, in relevant part:
ORDERED, ADJUDGED, AND DECREED that defendants
Rodberg and Reliable Limousine Service, LLC, are
permanently enjoined from transporting passengers for hire
between points within the Metropolitan District unless and until
properly authorized by the Washington Metropolitan Area
Transit Commission (“WMATC”) . . . .
Order and Default Judgment at 1, WMATC v. Reliable Limo. Serv., LLC,
No. 1:12-cv-00576 (D.D.C. Feb. 6, 2013).
3
The October 2013 order states, in full:
For the reasons stated in the accompanying Memorandum
Opinion, the Court clarifies the scope of its February 6, 2013
Order. It is hereby:
ORDERED AND DECREED that because Reliable
Limousine and Bus Service, LLC (“RLBS”) is “in privity” with
defendant Paul Rodberg, RLBS is also permanently enjoined
from transporting passengers for hire between points within the
Metropolitan District unless and until properly authorized by
the Washington Metropolitan Area Transit Commission
(“WMATC”). RLBS must comply with this Order by Friday,
November 8, 2013; it is further
5
Rodberg 4 appealed both the February injunction and the
October order. We ex mero motu consolidated Rodberg’s two
appeals.
II. ANALYSIS
Although Rodberg’s appeals are consolidated, we analyze
them separately. See FED. R. APP. P. 3(b) advisory
committee’s note (1998) (“consolidated appeals . . . do not
merge into one”); D.C. CIRCUIT HANDBOOK OF PRACTICE AND
INTERNAL PROCEDURES 24 (2013) (“Each [consolidated] case
retains some of its individual identity . . . .”). In Case No. 13-
7072, Rodberg challenges the February 2013 injunction,
which the district court issued via the default judgment. In
Case No. 13-7161, Rodberg challenges the district court’s
October 2013 order, which expressly made RLBS subject to
the February 2013 injunction.
ORDERED that pursuant to Fed. R. Civ. P. 65(d),
Rodberg’s agents, servants, employees, and attorneys, as well
as any other persons or entities who are in active concert or
participation with Rodberg or anyone described above, are
permanently enjoined from transporting passengers for hire
between points within the Metropolitan District unless and until
properly authorized by the WMATC; and it is further
ORDERED that, subject to the limitations of Rule 65(d),
any entity created or controlled, directly or indirectly, by
Rodberg, now or in the future, is permanently enjoined from
transporting passengers for hire between points within the
Metropolitan District unless and until properly authorized by
the WMATC.
Order at 1–2, WMATC v. Reliable Limo. Serv., LLC, No. 1:12-cv-00576
(D.D.C. Oct. 18, 2013).
4
For convenience, we refer to appellants Rodberg and RLS collectively as
“Rodberg.”
6
A. Case No. 13-7072
(Default Judgment/Injunction)
Rodberg contests the district court’s entry of default
judgment as a sanction for his discovery lapse. Although he
does not dispute that his conduct was sanctionable, Rodberg
argues that the punishment does not fit the crime.
We review the district court’s imposition of discovery
sanctions, including a default judgment award, for abuse of
discretion. See NHL v. Metro. Hockey Club, Inc., 427 U.S.
639, 642 (1976); Webb v. Dist. of Columbia, 146 F.3d 964,
971 (D.C. Cir. 1998). The abuse-of-discretion standard,
however, is “a verbal coat of many colors.” Henry J.
Friendly, Indiscretion About Discretion, 31 EMORY L.J. 747,
763 (1982) (internal alteration omitted). “[D]efining the
proper scope of review . . . requires considering in each
situation the benefits of closer appellate scrutiny as compared
to those of greater deference.” Id. at 756. With a default
judgment, our review is more “thorough” because the
“drastic” sanction “deprives a party completely of its day in
court.” Webb, 146 F.3d at 971. Moreover, there are
limitations on the district court’s ability to enter default
judgment as a discovery sanction. A default judgment is
inappropriate unless the litigant’s misconduct is accompanied
by “willfulness, bad faith, or fault.” Founding Church of
Scientology v. Webster, 802 F.2d 1448, 1458 (D.C. Cir. 1986)
(internal alterations omitted). The district court also has a
“duty to explain” its decision to award default judgment
instead of a lesser sanction. Webb, 146 F.3d at 971. We then
conduct an independent review to determine whether the
district court abused its discretion. See id. at 972. Because
the parties do not dispute Rodberg’s willfulness, we turn to
the district court’s choice of sanction.
7
To determine whether the district court abused its
discretion by entering default judgment as a discovery
sanction, we evaluate the following factors: (1) prejudice to
the opposing party, (2) prejudice to the judicial system and (3)
the need for punishment and deterrence. See Shea v. Donohoe
Constr. Co., 795 F.2d 1071, 1074–79 (D.C. Cir. 1986). These
factors are non-exhaustive and we must consider “all the
relevant circumstances” surrounding the entry of default
judgment. Bristol Petrol. Corp. v. Harris, 901 F.2d 165, 167
(D.C. Cir. 1990) (R.B. Ginsburg, J.). Still, we pay “great
deference” to the district court’s decision because it has “a
better ‘feel’ . . . for the litigation and the remedial actions
most appropriate under the circumstances presented.”
Founding Church of Scientology, 802 F.2d at 1457; see also
Bristol Petrol. Corp., 901 F.2d at 167 (appellate court should
be “hesitant to type the exercise of a district court’s dismissal
authority as an abuse of discretion” because district court has
“front-line responsibility for operating the judicial system”
(citations omitted)). After a careful review of the Shea
factors, we are convinced that the district court did not abuse
its discretion by entering default judgment against Rodberg.
Prejudice to the Opposing Party: Rodberg’s
recalcitrance prejudiced WMATC in a direct and obvious
manner. Each day of delay was another day that Rodberg
illegally operated his limousine business. Granted, delay that
merely prolongs litigation “is not a sufficient basis for
establishing prejudice.” Berthelsen v. Kane, 907 F.2d 617,
621 (6th Cir. 1990) (quoting Davis v. Musler, 713 F.2d 907,
916 (2d Cir. 1983)). But, here, there was more: in
transporting passengers in the District without a license,
Rodberg jeopardized the public safety. See generally Pub. L.
No. 101–505, tit. II, art. XI, 104 Stat. 1300, 1304–09
(outlining requirements WMATC licensees must follow); see
also New York v. Green, 420 F.3d 99, 110 (2d Cir. 2005)
8
(finding prejudice from delay that “endanger[ed] the public
health and safety”). The first Shea factor weighs in favor of
the district court’s decision.
Prejudice to the Judicial System: Rodberg also interfered
with the district court’s ability to manage its docket. In
February 2013—one month before trial—Rodberg had not
responded to any of WMATC’s requested discovery. The
district court was thus faced with a choice: enter default
judgment or postpone the trial. We have described such a
choice as “intolerable.” Shea, 795 F.2d at 1075; see also
Bristol Petrol. Corp., 901 F.2d at 168 n.5 (“[I]n several cases
affirming pre-trial dismissals, courts have featured the fact
that the party’s delay occurred close to the time of trial and
threatened to upset the court’s carefully planned calendar.”).
Litigants do not exist in a vacuum; misconduct like Rodberg’s
can reverberate throughout the judicial system. See Perkinson
v. Gilbert/Robinson, Inc., 821 F.2d 686, 691 (D.C. Cir. 1987)
(“Litigants who are willful in halting the discovery process . .
. in this era of crowded dockets . . . deprive other litigants of
an opportunity to use the courts as a serious dispute-
settlement mechanism.”). This is not a case in which the
district court could have addressed Rodberg’s misconduct by
simply granting a continuance. Cf. Webb, 146 F.3d at 974–
75. The district court had already moved the discovery
deadline twice—first, from November to December and, then,
from December to January. The district court had no reason
to expect that, if it granted yet another continuance, Rodberg
would meet his discovery responsibilities. See Automated
Datatron, Inc. v. Woodcock, 659 F.2d 1168, 1170 (D.C. Cir.
1981) (“[I]t was not an abuse of discretion to rule that two
weeks short of trial was too late [to take certain action] . . .
when the court had directed the litigant to take that action half
a year earlier.”); Lee v. Max Int’l, LLC, 638 F.3d 1318, 1321
(10th Cir. 2011) (“[T]hree strikes are more than enough to
9
allow the district court to call a litigant out.”). Accordingly,
the second Shea factor also weighs in favor of the district
court’s decision.
Deterrence and Punishment: Discovery sanctions serve
two purposes: punishing disobedient parties and deterring
others from emulating their behavior. See NHL, 427 U.S. at
643; Jankins v. TDC Mgmt. Corp., 21 F.3d 436, 445 (D.C.
Cir. 1994). On the spectrum of discovery misconduct,
Rodberg’s behavior was egregious. See NHL, 427 U.S. at 643
(approving default judgment where litigant exhibited “flagrant
bad faith” and “callous disregard” of discovery obligations);
Jackson v. Beech, 636 F.2d 831, 836 (D.C. Cir. 1980)
(“default judgments were designed to handle[] a totally
unresponsive party”). His refusal to participate in discovery
was not only willful but appeared to be a calculated move to
delay for the sake of delay. See Butera v. Dist. of Columbia,
235 F.3d 637, 661 (D.C. Cir. 2001) (“[Discovery sanctions]
ensure that a party will not be able to profit from its own
failure to comply with the rules.”); H.F. Livermore Corp. v.
Aktiengesellschaft Gebruder Loepfe, 432 F.2d 689, 691 (D.C.
Cir. 1970) (“[T]he possibility of a default is a deterrent to
those parties who choose delay as part of their litigative
strategy.”). This factor weighs most strongly in favor of the
district court’s decision.
Notably, Rodberg has yet to offer a plausible excuse for
his failure to participate in discovery. He claimed in district
court that he was not participating because he first wanted to
hear from WMATC about his license application. The district
court correctly rejected this excuse. Litigants cannot pick and
choose the legal proceedings they want to participate in at any
given time. See Harrington v. City of Chicago, 433 F.3d 542,
547 (7th Cir. 2006) (“the pendency of [other] cases . . . did
not justify the [litigant’s] failure to respond to . . . written
10
discovery requests throughout the discovery period”).
Rodberg’s non-excuse suggests that his motivation was far
from bona fide and thus deserving of harsh sanctions. See
Bristol Petrol. Corp., 901 F.2d at 168 (affirming default
judgment because litigant exhibited “lack of any effort to
comply with the court’s order” and offered “no colorable
explanation”); Automated Datatron, 659 F.2d at 1170
(affirming default judgment because litigant exhibited
“prolonged” and “conspicuous disregard of the trial court’s
order” and provided “[n]o special circumstances” to explain
misconduct); Hughes v. Holland, 320 F.2d 781, 782 (D.C.
Cir. 1963) (affirming default judgment because litigant made
“no showing of diligence” and “offered no adequate legal
excuse for her neglect”).
In addition, Rodberg is a discovery repeat offender. In
2012, the District of Maryland held Rodberg in contempt for
deliberately ignoring the IRS’s discovery requests. Rodberg’s
history of discovery misconduct indicates that his lawlessness
needs the harshest sanction to make him comply. See
Johnson v. CIR, 289 F.3d 452, 457 (7th Cir. 2002)
(“[D]ogged good-faith persistence in bad conduct becomes
sanctionable once [the guilty party] learns or should have
learned that it is sanctionable.”); Moody v. Miller, 864 F.2d
1178, 1181 (5th Cir. 1989) (“[M]indful of [the litigant’s] past
history with the federal courts, the imposition of [dismissal as
a] sanction[] was a valid exercise of the court’s discretion.”).
Moreover, Rodberg ignored his discovery obligations in the
IRS litigation while he was represented by different counsel,
manifesting that Rodberg himself is the person responsible for
his discovery delicts. This is not a case in which “an
unwitting litigant [is] made to suffer for the sins of her
attorney.” Bristol Petrol. Corp., 901 F.2d at 167; cf. also
Shea, 795 F.2d at 1078 (“We look disfavorably upon
dismissals as sanctions for attorney misconduct or delay
11
unless the client himself has been made aware of the problem,
usually through notice from the trial court.” (emphasis in
original)). Rodberg’s history of self-directed discovery
misconduct plainly supports the district court’s sanction of
default judgment in this case.
Rodberg offers two responses, both unpersuasive. He
claims that the district court violated two hard-and-fast rules
in entering default judgment against him. Neither “rule,”
however, exists under our case law.
First, Rodberg argues that the district court had a duty to
impose a lesser sanction before opting for default judgment.
We have repeatedly rejected this proposition. See, e.g., Webb,
146 F.3d at 971 (“we do not require a district court . . . to
exhaust lesser sanctions before turning to default”); Shepherd
v. Am. Broad. Cos., 62 F.3d 1469, 1479 (D.C. Cir. 1995)
(“[A] district court need not exhaust other options before . . .
imposing a default judgment.”); Founding Church of
Scientology, 802 F.2d at 1459 n.15 (“Prior resort to lesser
remedies is not . . . required regardless of the circumstances
presented.”). Although the district court must explain why a
lesser sanction is inadequate, it has no duty to impose it first,
entering default judgment only after the lesser sanction fails.
Second, Rodberg contends that the district court
erroneously entered default judgment based on a single
violation of the discovery rules. Rodberg is mistaken, both
legally and factually. We have never held that a district court
cannot enter default judgment based on a single discovery
violation. Granted, we have said that “under certain
circumstances, dismissal may be an unduly severe sanction
for a single episode of misconduct.” Bristol Petrol. Corp.,
12
901 F.2d at 167. 5 But we have also affirmed a dismissal
based on “a single incident of misconduct” if a “disruption of
the judicial system” or “clear client responsibility for the
misconduct” occurred. Ripalda v. Am. Operations Corp., 977
F.2d 1464, 1467 (D.C. Cir. 1992) (citing, as examples,
Automated Datatron, 659 F.2d 1168 and Bristol Petrol.
Corp., 901 F.2d 165). As noted, both factors—disruption of
the judicial system and clear client responsibility—are present
here. See supra pp. 8, 10–11.
In any event, Rodberg wrongly argues that he has
committed only one discovery violation. Rodberg violated
the discovery rules in January 2013 when he ignored the
district court’s order compelling discovery. See FED. R. CIV.
P. 37(b)(2). Two months earlier, however, Rodberg also
violated the discovery rules by failing to respond to
WMATC’s interrogatories. See FED. R. CIV. P.
37(d)(1)(A)(ii). A litigant can be sanctioned for failing to
respond to interrogatories even without a court order. See
Dellums v. Powell, 566 F.2d 231, 235 (D.C. Cir. 1977).
Indeed, we have emphasized the heightened need for a
sanction that bites in this context:
If parties are allowed to flout their [discovery]
obligations, choosing to wait to make a response [to
interrogatories] until a trial court has lost patience
with them, the effect will be to embroil trial judges
in day-to-day supervision of discovery, a result
5
We once said that “a single act of misconduct seldom if ever can justify
dismissal.” Camps v. C & P Tel. Co., 692 F.2d 120, 123 (D.C. Cir. 1981)
(emphasis added). But that statement—to the extent that it may articulate
a rule—is dictum. See Trakas v. Quality Brands, Inc., 759 F.2d 185, 190
(D.C. Cir. 1985) (Scalia, J., dissenting) (“The expansive dictum in Camps
. . . is plainly an exaggeration insofar as the ‘if ever’ is concerned.”).
13
directly contrary to the overall scheme of the federal
discovery rules.
Id. at 235–36. Additionally, as noted, Rodberg previously
committed discovery violations in the IRS litigation. The
district court properly took his earlier misconduct into
account, even though it occurred in a different case and in a
different federal court. See Thibeault v. Square D Co., 960
F.2d 239, 246 (1st Cir. 1992) (“The totality of the
circumstances [when reviewing discovery sanctions] can
include events which did not occur in the case proper but
occurred in other cases and are, by their nature, relevant to the
pending controversy.”); see also FED. R. CIV. P. 11 advisory
committee’s note (1993) (in considering sanctions, court can
weigh “whether the person has engaged in similar conduct in
other litigation”).
For these reasons, we conclude that the district court did
not abuse its discretion when it entered default judgment
against Rodberg as a sanction for his total discovery lapse.
We therefore affirm the district court’s February 2013 order
awarding permanent injunctive relief.
B. Case No. 13-7161
(Clarification Order)
Rodberg next challenges the district court’s October 2013
order, which detailed the scope of its February 2013
injunction. Originally, the parties did not contest our
jurisdiction but we must nonetheless assure ourselves that we
have it. See Arbaugh v. Y&H Corp., 546 U.S. 500, 514
(2006). And, after asking them to address our jurisdiction at
oral argument, WMATC now challenges it. We are
convinced that we lack jurisdiction in Case No. 13-7161 and
therefore do not reach the merits of Rodberg’s challenges to
the October 2013 order. See Steel Co. v. Citizens for a Better
14
Env’t, 523 U.S. 83, 94 (1998) (“Jurisdiction is power to
declare the law, and when it ceases to exist, the only function
remaining to the court is that of announcing the fact and
dismissing the cause.” (quoting Ex parte McCardle, 74 U.S.
506, 514 (1868))).
We have jurisdiction to hear appeals from “final
decisions” of the district court. 28 U.S.C. § 1291. A “final”
order under section 1291 “terminates the litigation between
the parties on the merits of the case, and leaves nothing to be
done but to enforce by execution what has been determined.”
United States v. Philip Morris USA Inc., 686 F.3d 839, 846
(D.C. Cir. 2012) (quoting St. Louis, IM & S. Ry. Co. v. S.
Express Co., 108 U.S. 24, 28–29 (1883)). Applying this
description, we conclude that the October 2013 order is not a
final, independently appealable order. The district court did
not hold Rodberg in contempt, as WMATC requested, and
plainly did not “terminate[] the litigation . . . on the merits.”
See id.; accord Mamma Mia’s Trattoria, Inc. v. Original
Brooklyn Water Bagel Co., 768 F.3d 1320, 1325 (11th Cir.
2014).
To allow us to consider Rodberg’s challenges to the
October 2013 order, he must identify an exception to section
1291’s finality requirement. 6 Only one exception is relevant
here. Section 1292(a)(1) gives us jurisdiction over appeals of
“[i]nterlocutory orders . . . modifying . . . injunctions.” 28
U.S.C. § 1292(a)(1). We construe this exception “narrowly,”
lest we “turn the barrier against piecemeal appeals into Swiss
6
See, e.g., 28 U.S.C. § 1292(b) (certification by district court); id. § 1651
(writ of mandamus); FED. R. CIV. P. 54(b) (partial final judgment in multi–
claim/party proceeding); Cohen v. Beneficial Indus. Loan Corp., 337 U.S.
541, 546 (1949) (collateral order doctrine); Cobell v. Norton, 334 F.3d
1128, 1140 (D.C. Cir. 2003) (criminal contempt).
15
cheese.” Salazar ex rel. Salazar v. Dist. of Columbia, 671
F.3d 1258, 1261 (D.C. Cir. 2012). An order that merely
clarifies an injunction does not “modify[]” it under section
1292(a)(1). See Philip Morris, 686 F.3d at 844–45. To
distinguish between a clarification and a modification, we
look at the “actual effect” of the order, not its “form.” Id. at
844; see also United States v. W. Elec. Co., 777 F.2d 23, 29
(D.C. Cir. 1985) (because “clarification and modification may
be virtually indistinguishable . . . appealability depends not on
terminology but on the substantive effect of the order”
(citations and internal quotation marks omitted)). An order
“modifies” an injunction only if it “actually changes the legal
relationship of the parties.” Philip Morris, 686 F.3d at 844.
Here, the February 2013 injunction originally prohibited
Rodberg and RLS from transporting passengers for hire in the
District without a license. The October 2013 order expressly
included RLBS in that prohibition. Thus, the clarification-
versus-modification question turns on whether RLBS was
already bound by the February injunction. 7 If so, the October
order is a clarification because it did not “actually change[]
the legal relationship of the parties.” Philip Morris, 686 F.3d
at 844.
Under Federal Rule of Civil Procedure 65(d)(2), an
injunction automatically applies to “(A) the parties; (B) the
parties’ officers, agents, servants, employees, and attorneys;
and (C) other persons who are in active concert or
participation with . . . (A) or (B).” FED. R. CIV. P. 65(d)(2).
An injunction covers these persons/entities even if they are
not expressly mentioned in the text of the order. See 11A
7
We need not tarry over the rest of the October 2013 order. The other
provisions merely incorporate the language of Rule 65(d)(2). See supra
note 3.
16
WRIGHT & MILLER § 2956 (3d ed. 2014). Rule 65(d)(2)
incorporates the common-law principle that an injunction “not
only binds the parties defendant but also those identified with
them in interest, in ‘privity’ with them, represented by them
or subject to their control.” Golden State Bottling Co. v.
NLRB, 414 U.S. 168, 179 (1973); see also 11A WRIGHT &
MILLER § 2956 (Rule 65(d) does not expand or contract the
pre-1938 practice in the courts of equity). The Rule ensures
that a defendant cannot “nullify” an injunction “by carrying
out prohibited acts through aiders and abettors” who “were
not parties to the original proceeding.” Regal Knitwear Co. v.
NLRB, 324 U.S. 9, 14 (1945).
Rodberg contends that he is merely RLBS’s employee or
agent. Cf. Doctor’s Assocs., Inc. v. Reinert & Duree, P.C.,
191 F.3d 297, 304 & n.5 (2d Cir. 1999) (“[T]he mere fact of
an employer/employee . . . or principal/agent relationship,
without more, does not necessarily satisfy [Rule 65(d)(2)], at
least where the consequence would be to extend the
injunction to cover the dominant party.” (emphasis added)).
He invokes the Wizard-of-Oz defense, hoping we “pay no
attention to that man behind the curtain.” THE WIZARD OF OZ
(Metro-Goldwyn-Mayer 1939). But Rule 65 requires us, like
Toto, to pull back the curtain to expose the reality. Once we
do, it is plain that Rodberg and RLBS are so related that an
injunction binding the former also binds the latter. 8 On this
record, Rodberg completely controls RLBS: He is the
President and sole shareholder. RLBS operates for Rodberg’s
benefit and he can cease its operation at any time. See
8
For the same reason, Rodberg cannot plausibly claim that RLBS lacked
“actual notice” of the injunction. FED. R. CIV. P. 65(d)(2); see Ex parte
Lennon, 166 U.S. 548, 554 (1897) (“To render a person amenable to an
injunction, it is neither necessary that he should have been a party to the
suit in which the injunction was issued, nor to have been actually served
with a copy of it, so long as he appears to have had actual notice.”).
17
Jefferson Sch. of Soc. Sci. v. Subversive Activities Control
Bd., 331 F.2d 76, 83 (D.C. Cir. 1963) (finding privity between
two entities where one was “substantially dominated, directed
and controlled” by other and “operate[d] primarily to achieve
[its] objectives”); Drier v. Tarpon Oil Co., 522 F.2d 199, 200
(5th Cir. 1975) (“president and major stockholder” who made
“ultimate decisions” for corporation in privity with it).
Moreover, RLBS simply carries on the business of the now-
defunct RLS—an entity expressly named in the February
injunction. See Regal Knitwear, 324 U.S. at 14 (injunctions
also bind “successors and assigns who operate as ‘merely a
disguised continuance of the old employer’ . . . whether [the
business was transferred] as a means of evading the judgment
or for other reasons” (citations omitted)); Vacco v. Operation
Rescue Nat’l, 80 F.3d 64, 71 (2d Cir. 1996) (finding successor
organization bound by injunction because its leadership, goals
and activities were identical to enjoined predecessor). Given
the identity of interest among Rodberg and his limousine
companies, the February injunction forbad RLBS—and any
similar company that Rodberg creates—from operating a
limousine business in the District without a license. See G. &
C. Merriam Co. v. Webster Dictionary Co., 639 F.2d 29, 38
(1st Cir. 1980) (if “the same person continu[es] to do
essentially the same thing with the same high degree of
practical control, discretion and responsibility, before and
after the injunction, with knowledge of the injunction, and
after participating in the enjoined firm’s corporate
decisionmaking regarding its position in the injunction
proceedings,” then “corporations founded by him are also
subject to it”).
Rodberg asks us to respect the separate corporate identity
of RLBS. But identity—of the corporate or the flesh-and-
blood variety—is not determinative under Rule 65(d)(2). See
Elec. Workers Pension Trust Fund v. Gary’s Elec. Serv. Co.,
18
340 F.3d 373, 386 (6th Cir. 2003) (piercing corporate veil is
not required to apply Rule 65(d)(2)). The Rule plainly
contemplates that an injunction against one person can bind
entirely separate persons. See FED. R. CIV. P. 65(d)(2)(C)
(injunction automatically binds “persons who are in active
concert or participation” with enjoined party); see also Roe v.
Operation Rescue, 919 F.2d 857, 871 (3d Cir. 1990) (“The
law does not permit the instigator of contemptuous conduct to
absolve himself of contempt liability by leaving the physical
performance of the forbidden conduct to others.”). In
essence, Rodberg wants to use RLBS to do indirectly—
operate without a license—what he is enjoined from doing
directly. “The bald statement of this contention is its own
refutation.” United States v. Schine, 260 F.2d 552, 556 (2d
Cir. 1958); see also Beck v. City of Pittsburgh, 89 F.3d 966,
974 (3d Cir. 1996) (Rosenn, J.) (“Formalism is often the last
refuge of scoundrels . . . .”).
We conclude that the district court’s October 2013 order
did not modify the February 2013 injunction because RLBS
was already bound by the earlier order as a matter of law. See
Pimentel & Sons Guitar Makers, Inc. v. Pimentel, 477 F.3d
1151, 1154–55 (10th Cir. 2007) (order clarified, rather than
modified, earlier injunction because it “was nothing more
than . . . an explanation of its application to [an additional
party] within the parameters of Rule 65 of the Federal Rules
of Civil Procedure”). Accordingly, we are without
jurisdiction to review the October 2013 order. 9
9
That we lack jurisdiction to consider the October 2013 order does not
mean that Rodberg is free to violate it. Our holding necessarily moots
Rodberg’s challenges to the October 2013 order because, as we have
determined, the February 2013 injunction already bound RLBS.
19
For the foregoing reasons, we affirm the district court’s
entry of default judgment in Case No. 13-7072 and dismiss
Case No. 13-7161 for want of jurisdiction.
So ordered.