Koninklijke Philips Elect. v. Kxd Technology
| Citation | 539 F.3d 1039 |
| Decision Date | 20 August 2008 |
| Docket Number | No. 07-15310.,07-15310. |
| Parties | KONINKLIJKE PHILIPS ELECTRONICS, N.V., a Netherlands corporation, Plaintiff-Appellee, v. KXD TECHNOLOGY, INC.; Astar Electronics, Inc.; Shenzhen KXD Multimedia Co., Ltd.; Shenzhen Kaixinda Electronics Co. Ltd.; KXD Digital Entertainment, Ltd.; and Jingyi Luo, a/k/a James Luo, Defendants-Appellants, and Sungale Group, Inc.; Sungale Electronics (Shenzhen), Ltd.; Amoi Electronics, Inc.; Amoi Electronics Co., Ltd.; Amoi Electronics, Ltd.; China Electronics Corporation; Amoisonic Electronics, Inc.; International Norcent Technology, Inc.; Norcent Holdings, Inc.; Shanghai Hongsheng Technology Co., Ltd.; Shenzhen Newland Electronic Industry Co., Ltd.; Desay A & V(USA) Inc.; Desay A & V Science & Technology Co., Ltd.; Desay Holdings Co., Ltd.; Xoro Electronics (Shanghai), Ltd.; Shenzhen Xoro Electronics Co., Ltd.; Mas Electronik AG Corporation; and Shenzhen Oriental Digital Technology Co., Ltd., Defendants. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Anton N. Handal, at argument, and Pamela C. Chalk and Gabriel G. Hedrick, on the briefs, Handal & Associates, San Diego, CA, for the defendants-appellants.
Jeffrey K. Joyner, at argument, and David C. Caplan and Jan Jensen, on the briefs, Keats McFarland & Wilson LLP, Beverly Hills, CA, for the plaintiff-appellee.
Appeal from the United States District Court for the District of Nevada; Roger L. Hunt, District Judge, Presiding. D.C. No. CV-05-01532-RLH.
Before: MARY M. SCHROEDER, JOHN M. WALKER, JR.,* and N. RANDY SMITH, Circuit Judges.
Defendants-Appellants KXD Technology, Inc., Astar Electronics, Inc., Shenzen KXD Multimedia, Inc., Shenzhen Kaixinda Electronics Co., Ltd., KXD Digital Entertainment, Ltd., and Jingyi Luo, a/k/a James Luo, appeal from an order of the United States District Court for the District of Nevada (Hunt, J) imposing monetary sanctions for civil contempt. Because we lack appellate jurisdiction, the appeal is dismissed.
Plaintiff-Appellee, Koninklijke Philips Electronics N.V. ("Philips") sued the above-named defendants, alleging that they had infringed Philips's registered trademark and had knowingly offered counterfeited Philips goods for sale in the United States. On January 5, 2006, the district court issued an amended temporary restraining and seizure order that was immediately served on the defendants at the Consumer Electronics Show in Las Vegas, Nevada. The following day, because defendants' principal place of business and warehouse was in California, Philips sought and was granted a temporary restraining and seizure order by the United States District Court for the Central District of California. That order was served at defendants' California warehouse, where the Marshals Service found and confiscated counterfeit products bearing the Philips trademark.
On March 14, 2006, the district court issued a preliminary injunction that principally enjoined defendants from dealing in any product that infringed Philips's trademarks. The district court also ordered defendants to file a report setting forth their inventory of counterfeit Philips products by April 13, 2006 and a report describing in detail their compliance with the preliminary injunction by May 15, 2006. Before these reports were due, on April 10, 2006, the district court issued another seizure order, which resulted in the confiscation of additional counterfeit Philips products at locations controlled by the defendants.
By February of 2007, it became clear to the district court that the defendants had no intention of complying with its orders. The district court noted that there was "abundant evidence of the Defendants' non-compliance and active violations of both the TRO and preliminary injunction." In fact, the defendants had failed to file any reports, required or otherwise, showing that they had complied in any way with the district court's orders. This failure continued even after the plaintiff moved for sanctions on October 11, 2006. At the sanctions hearing, the district court granted plaintiff's motion for civil contempt sanctions, holding the defendants jointly and severally liable to the plaintiff for: (1) $353,611.70 in attorney's fees; (2) $37,098.14 in seizure and storage costs; (3) $1,284,090.00 in lost royalties; and (4) $10,000.00 per day until the reports were filed. In addition, the court ordered defendants to post a $2 million bond.
The defendants now appeal the district court's imposition of sanctions. The plaintiff contends that such an interlocutory appeal is impermissible and that we lack jurisdiction to hear it.
We review questions of our own jurisdiction de novo. Toumajian v. Frailey, 135 F.3d 648, 652 (9th Cir.1998).
"The rule is settled in this Court that except in connection with an appeal from a final judgment or decree, a party to a suit may not review upon appeal an order fining or imprisoning him for the commission of a civil contempt." Fox v. Capital Co., 299 U.S. 105, 107, 57 S.Ct. 57, 81 L.Ed. 67 (1936); see also Bingman v. Ward, 100 F.3d 653, 655 (9th Cir.1996) (). This court "do[es] have jurisdiction[, however,] to hear appeals from criminal contempt orders because they are appealable when entered." Bingman, 100 F.3d at 655 (internal quotation marks and citation omitted).
Thus, to ascertain its jurisdiction, a court of appeals "must decide whether the order before [it] [i]s one for civil contempt or one for criminal contempt." Id. As we have noted, the United States v. Armstrong, 781 F.2d 700, 703 (9th Cir.1986); see also Plastiras v. Idell (In re Sequoia Auto Brokers Ltd.), 827 F.2d 1281, 1283 n. 1 (9th Cir.1987).
Although this explanation of the "dichotomy between civil and criminal contempt is helpful, it is not quite complete." Bingman, 100 F.3d at 655. Often it is necessary to explore other aspects of the contempt order to determine its character. For example, the Supreme Court has found it useful to ascertain to whom the fine is payable, suggesting that a fine "is remedial when it is paid to the complainant, and punitive when it is paid to the court." Hicks ex rel. Feiock v. Feiock, 485 U.S. 624, 632, 108 S.Ct. 1423, 99 L.Ed.2d 721 (1988); see also Bingman, 100 F.3d at 655. Also instructive is whether the fine imposed is conditional in nature. In this regard, the Supreme Court has stated that Hicks, 485 U.S. at 633, 108 S.Ct. 1423 (internal quotation marks and citation omitted).
Taking all of these considerations into account, the Supreme Court has stated that:
A contempt fine accordingly is considered civil and remedial if it either "coerce[s] the defendant into compliance with the court's order, [or] . . . compensate[s] the complainant for losses sustained." Where a fine is not compensatory, it is civil only if the contemnor is offered an opportunity to purge.
United Mine Workers v. Bagwell, 512 U.S. 821, 829, 114 S.Ct. 2552, 129 L.Ed.2d 642 (1994) () (citation omitted). Thus, an otherwise criminal contempt order (i.e., an order not intended to be compensatory) will nevertheless be categorized as civil, and thus not appealable on interlocutory review, when the defendant is given an opportunity to comply with the order before payment of the sanction becomes due.
The contempt order here is plainly civil under the above test. The attorney's fees, lost royalties, and storage costs were assessed in order to compensate the plaintiff for losses sustained. Furthermore, the per diem fine was not to be assessed until fourteen days after the entry of the order, and the defendants could avoid the fine by complying with the terms of the injunction. Because the per diem fine allowed the defendants the opportunity to purge the contempt before payment became due, it was a civil sanction. We also note that the district court was cognizant of the distinction between the two types of contempts. Although the district court warned the defendants that it "may desire to impose criminal sanctions next time," it limited itself "this time to civil sanctions." Appellant's Excerpts of R. at 356 (emphasis added).
Moreover, the defendants make no argument that the contempt order was not civil. Their sole argument is that a civil contempt order is reviewable when it provides for payment of the sanction on a "date certain" without providing the contemnor the opportunity to purge. The orders pertaining to attorney's fees, seizure and storage costs, and lost royalties fall into this category. Supreme Court precedent, however, makes clear that contempt orders that are compensatory are not reviewable on interlocutory appeal; if a contempt order "compensate[s] the complainant for losses sustained," it "is considered civil," and may only be reviewed upon final appeal. Bingman, 100 F.3d at 656 (alteration in original). The defendants attempt to glean their purported "date certain" exception to the general rule of non-appealability from certain cases that, while permitting immediate appeals, do not announce the rule defendants urge upon this court. Each case is unique to its circumstances and all are inapposite.
Defendants argue that our opinion in Hoffman ex rel. NLRB v. Beer Drivers &...
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