Blockowicz v. Williams

Decision Date27 December 2010
Docket NumberNo. 10–1167.,10–1167.
Citation630 F.3d 563
PartiesDavid BLOCKOWICZ, Mary Blockowicz, and Lisa Blockowicz, Plaintiffs–Appellants,v.Joseph David WILLIAMS and Michelle Ramey, Defendants,andEd Magedson and Xcentric Ventures, LLC, Third Party Respondents–Appellees.
CourtU.S. Court of Appeals — Seventh Circuit

OPINION TEXT STARTS HERE

Cameron M. Nelson (argued), Attorney, Greenberg Traurig, Chicago, IL, for PlaintiffsAppellants.Maria Crimi Speth (argued), Attorney, Jaburg & Wilk, P.C., Phoenix, AZ, for Third Party RespondentsAppellees.Before CUDAHY, FLAUM, and WOOD, Circuit Judges.FLAUM, Circuit Judge.

David, Mary, and Lisa Blockowicz received an injunction ordering Joseph David Williams and Michelle Ramey to remove defamatory comments they posted about the Blockowiczs on www. ripoffreport. com (“ROR”), among other websites. Williams and Ramey never responded to the injunction, prompting the Blockowiczs to contact the websites on which the statements were posted to secure compliance with the injunction. Every website complied, except for ROR. The Blockowiczs asked the district court that issued the injunction to enforce it against Xcentric Ventures, LLC, (Xcentric) the host of ROR, and Ed Magedson, the website's manager, pursuant to Rule 65(d)(2)(C). The district court declined, and the Blockowiczs appeal the district court's decision. They argue that Xcentric and Magedson fit within Rule 65(d)(2)(C), and thus should be bound by the injunction, because they had “actual notice” of the injunction, and they were “in active concert or participation” with the defendants in violating the injunction by failing to remove the defamatory statements. We affirm: Xcentric and Magedson were not “in active concert or participation” with the defendants pursuant to Rule 65(d)(2)(C).

I. Background

The Blockowiczs filed a civil suit against Williams and Ramey (“the defendants) on June 30, 2009, alleging defamation per se based on statements regarding one or more of the Blockowiczs that the defendants allegedly posted on ROR and other websites. Two of the statements at issue were posted in 2003; the third was posted in 2009. After the defendants failed to respond, the district court entered a default judgment and issued a permanent injunction that required the defendants to remove the defamatory statements from ROR, among other websites. The Blockowiczs sent notice of the injunction via email to an email address believed to belong to the defendants. The record does not confirm who owns the email account, but the Blockowiczs assert that the defendants implicitly acknowledged receipt by posting comments on the internet related to the lawsuit. The defendants never responded to or complied with the injunction. So the Blockowiczs contacted the operators of the websites on which the defendants posted the defamatory statements and requested that they remove the statements from their respective websites. Every website complied, except for ROR.

ROR is a website on which users post comments about bad business practices. It is operated by Xcentric and managed by Magedson. In order to post on ROR, users must enter into a contractual relationship with Xcentric by signing Xcentric's Terms of Service. The Terms of Service have a number of relevant provisions. First, they prohibit users from posting defamatory information:

You will NOT post on ROR ... any defamatory, inaccurate, abusive, obscene, profane, offensive, threatening, harassing, racially offensive, or illegal material, or any material that infringes or violates another party's rights (including, but not limited to, intellectual property rights, and rights of privacy and publicity). You will use ROR in a manner consistent with any and all applicable laws and regulations. By posting information on ROR, you warrant and represent that the information is truthful and accurate.

Next, the Terms of Service state that users “will defend, indemnify, and hold harmless Xcentric ... for any losses, costs, liabilities and expenses (including reasonable attorneys' fees) relating to or arising out of your use of ROR, including, but not limited to, any breach by you of the terms of this Agreement.”

Third, they state: “By posting information on ROR, you understand and agree that the material will not be removed even at your request. You shall remain solely responsible for the content of your postings on ROR.”

Fourth, the Terms of Service provide that when users post information on ROR, they “automatically grant ... to Xcentric an irrevocable, perpetual, fully-paid, worldwide exclusive license to use, copy, perform, display and distribute such information and content....”

ROR also provides information to parties considering suing the website:

[A]lthough our Terms of Service prohibit users from posting false information, we simply cannot serve as the judge or jury in disputes between two parties. If you contact us and demand that we remove information because you contend that it's false and therefore a violation of our TOS, we have no way to determine if this is true, of [sic] if the information is really accurate. These issues have to be determined in court, not by us.

The Blockowiczs eventually filed a Motion for Third Party Enforcement of Injunction,” asking the district court to compel Xcentric to remove the defamatory postings by enforcing the injunction against Xcentric and Magedson pursuant to Federal Rule of Civil Procedure 65(d)(2)(C), in spite of the fact that Xcentric and Magedson were not parties to the suit that resulted in the injunction. Rule 65(d)(2)(C) authorizes courts to enforce injunctions against third parties who have “actual notice” of the injunction, and “who are in active concert or participation” with the parties who are bound by the injunction. Xcentric contested the Blockowiczs' motion. The district court held that Rule 65(d)(2)(C) did not authorize it to enforce the injunction against Xcentric and Magedson. The Blockowiczs timely appeal.

II. Analysis
A. Personal Jurisdiction Defense Is Waived

Xcentric and Magedson argue that the district court lacked personal jurisdiction over them. But even when a valid personal jurisdiction defense exists, the defense is waived if the objecting party fails to timely raise it, Fed.R.Civ.P. 12(h)(1); Ins. Corp. of Ir., Ltd. v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 705, 102 S.Ct. 2099, 72 L.Ed.2d 492 (1982), or if the objecting party proceeds to litigate the case on its merits, see Cont'l Bank, N.A. v. Meyer, 10 F.3d 1293, 1296–97 (7th Cir.1993).

In its initial response to the Blockowiczs' motion to enforce the injunction against Xcentric and Magedson, Xcentric wrote that it “contests that the [district court] has personal jurisdiction over it and does not waive any arguments it has pursuant to Fed.R.Civ.P. 12(b)(2).” Even if this footnote adequately raised their defense, Xcentric and Magedson waived it by participating in the district court proceedings, which included both briefing and oral arguments addressing the merits of the Blockowiczs' claim. See Meyer, 10 F.3d at 1296–97 (“The defendants did raise the defense in their answer, and therefore the waiver provided for by Rule 12(h) did not occur. However, the privileged defenses referred to in Rule 12(h)(1) may be waived by formal submission in a cause, or by submission through conduct.” (internal quotation marks and citations omitted)); ECHO, Inc. v. Whitson Co., Inc., 52 F.3d 702, 707 (7th Cir.1995) (“The parties consented to personal jurisdiction simply by participating in the proceedings before the district court without protest.”). Other than their one footnote, we find no indication in the record that Xcentric or Magedson ever pursued their personal jurisdiction defense before this appeal. Their defense is waived.

B. Xcentric and Magedson Are Not Bound By The Injunction Pursuant To Rule 65(d)

As a preliminary issue, we note that the Blockowiczs' motion asked the district court to enforce the injunction against third parties Xcentric and Magedson. At the core of their case below and on appeal, the Blockowiczs argue that Xcentric and Magedson assisted the defendants in violating the injunction. Accordingly, we view this case as one for contempt, the usual context for enforcing injunctions against third parties who assist enjoined parties in violating an injunction. See Regal Knitwear Co. v. N.L.R.B., 324 U.S. 9, 14, 65 S.Ct. 478, 89 L.Ed. 661 (1945) (“Successors and assigns may, however, be instrumentalities through which defendant seeks to evade an order or may come within the description of persons in active concert or participation with them in the violation of an injunction. If they are, by that fact they are brought within scope of contempt proceedings by the rules of civil procedure.”); Illinois v. U.S. Dep't of Health & Human Servs., 772 F.2d 329, 332 (7th Cir.1985) ([Rule 65(d) ] is a codification of the common-law rule allowing a non-party to be held in contempt for violating the terms of an injunction when a non-party is legally identified with the defendant or when the non-party aids or abets a violation of an injunction.”). Whether we consider this a suit for contempt or simply a motion to enforce an injunction against third parties, however, our analysis under Rule 65(d)(2)(C) is the same.1

We review a district court's adjudication of civil contempt for abuse of discretion. Badger Meter, Inc. v. Grinnell Corp., 13 F.3d 1145, 1154–55 (7th Cir.1994). In doing so, we review the district court's legal conclusions de novo and its findings of fact for clear error. Id.

Federal Rule of Civil Procedure 65(d)(2) provides that an injunction binds “the following who receive actual notice of it by personal service or otherwise: (A) the parties; (B) the parties' officers, agents, servants, employees, and attorneys; and (C) other persons who are in active concert or participation with anyone described in Rule 65(d)(2)(A) or (B).” ...

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