Reis v. Iowa Dist. Court For Polk County

• Decision Date: 14 July 2010
• Docket Number: No. 08-1087.,08-1087.
• Citation: 787 N.W.2d 61
• Parties: Jan REIS and Dean Stowers, Plaintiffs,v.IOWA DISTRICT COURT FOR POLK COUNTY, Defendant.
• Court: Iowa Supreme Court

787 N.W.2d 61

Jan REIS and Dean Stowers, Plaintiffs,v.IOWA DISTRICT COURT FOR POLK COUNTY, Defendant.

No. 08-1087.

Supreme Court of Iowa.

May 7, 2010.

Rehearing Denied July 14, 2010.

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Dean Stowers of Stowers Law Firm, West Des Moines, for plaintiff Dean Stowers.

Mari Culver of Duncan, Green, Brown & Langeness, P.C., Des Moines, for plaintiff Jan Reis.

Randall D. Armentrout, Scott A. Sundstrom, and Mitchell R. Kunert of Nyemaster, Goode, West, Hansell & O'Brien, P.C., Des Moines, for defendant.

STREIT, Justice.

Jan Reis and Dean Stowers were held in contempt of court for violation of a protective order. They argue the district court lacked jurisdiction to enforce the protective order and lacked substantial evidence to support a finding of contempt. We hold the court properly exercised jurisdiction to enforce the protective order and there was substantial evidence to support the finding of contempt with regard to Stowers. We reverse the district court's finding that Reis be held in contempt.

I. Background Facts and Prior Proceedings.

Jan Reis filed an employment-related lawsuit against her previous employer, Care Initiatives. As part of that litigation, Reis's attorneys and Care Initiatives' attorneys agreed to a protective order, which was entered by the court. Reis and her attorney spouse, Dean Stowers, were designated as parties in the protective order and, according to its terms, were permitted to see discovery designated as confidential upon signing an Undertaking To Be Bound By Protective Order. The protective order requires counsel to maintain these signed undertakings. The signed undertakings are not in the record, although Reis and Stowers received confidential documents during the course of the litigation and admit they signed the undertakings.¹

The protective order provides that documents designated as confidential shall be used “only for the purposes of this litigation and for no other purpose, except as otherwise provided in this Stipulation and Protective Order.” The protective order further states:

All persons who are afforded access to any documents or information subject to this Stipulation and Protective Order shall not use or disclose such documents or information for purposes of business or competition, or for any purpose other than the preparation for and the conducting of this proceeding, or any appellate review thereof, and then solely as contemplated herein, and shall keep the documents and information secure and confidential in accordance with the purposes and intent of this Stipulation and Protective Order.

The parties eventually reached a confidential settlement agreement and release in November 2007, which was signed by Reis but not by Stowers. This settlement agreement addressed the discovery exchanged during the litigation:

Reis agrees to return to Care attorneys any and all documents in her or her attorneys' possession including copies in any form, that pertain to Care, Reis's employment at Care, or Reis's lawsuit against Care including but not limited to materials taken from Care prior to her termination and company documents produced during discovery, including electronic documents and emails, except documents protected by Reis's attorney client privilege or work product, payroll records, and her personnel file. Care's attorneys will return all medical and mental health records obtained in the litigation, including copies in any form, to Reis's attorneys.

During the litigation, Reis was represented by Paige Fiedler and Thomas Newkirk, of the law firm Fiedler & Newkirk. In December 2007, Newkirk sent an email to Randall Armentrout, counsel to Care Initiatives, stating they had culled out all of their documents and that 6-8 bankers boxes were ready for Armentrout to pick up. However, prior to Care Initiatives picking up the documents, Reis, through Stowers, terminated Fiedler and Newkirk as her attorneys and requested that her file and all documents be sent to her. Fiedler and Newkirk complied with this request and sent all of the documents to Reis. In January 2008, Fiedler and Newkirk informed Care Initiatives' counsel that they no longer represented Reis or Stowers, Reis had taken possession of all documents, and communications regarding the documents should be directed to Reis or Stowers.

Reis testified she then began to sort through the documents to ensure none of her own medical records, which apparently had been produced in voluminous amounts, were contained in the boxes to be returned to Care Initiatives. She testified she found her own medical records in the boxes of Care Initiatives' documents.²

While Reis was in possession of these documents, Stowers sent a string of emails to Care Initiatives' employees, agents, and counsel. On February 12, Stowers sent an email to Care Initiatives' Chief Financial Officer (CFO) George Michael McDaniel which “afforded [McDaniel] the opportunity to quietly tender [his] resignation” from Care Initiatives based on “information known and that disclosed publicly.” On February 13, Stowers sent an email to Care Initiatives' board member Richard Thornton, requesting that Thornton “resolve [his] dilemma” by making a “personal cash donation to a charitable cause” in Reis's name and by resigning. On February 14, Randall Armentrout, counsel to Care Initiatives, sent a letter to Reis and Stowers referencing the protective order and settlement agreement and requesting the return of Care Initiatives' documents. On February 17, Stowers replied to Armentrout and suggested he would not be comfortable turning over documents to Care Initiatives because of a potential investigation by Senator Grassley and the need to safeguard evidence from destruction.

Care Initiatives filed an application for contempt and to enforce the settlement agreement, asking the court to order Reis, Stowers, Fiedler, and Newkirk to show cause why they should not be held in contempt. After an evidentiary hearing, the court held Reis and Stowers in contempt. On writ of certiorari, the court of appeals reversed the finding of contempt against both Reis and Stowers. Care Initiatives sought further review.

II. Scope of Review.

On writ of certiorari, this court's review is at law, and “we may examine only the jurisdiction of the district court and the legality of its actions.” Christensen v. Iowa Dist. Ct., 578 N.W.2d 675, 678 (Iowa 1998). The district court acts illegally when the court's factual findings lack substantial evidentiary support. Id. Since proof beyond a reasonable doubt must be established for a finding of contempt, substantial evidence to support such a finding is “ ‘such evidence as could convince a rational trier of fact that the alleged contemnor is guilty of contempt beyond a reasonable doubt.’ ” In re Marriage of Jacobo, 526 N.W.2d 859, 866 (Iowa 1995) (quoting Ervin v. Iowa Dist. Ct., 495 N.W.2d 742, 744-45 (Iowa 1993)). We review the district court's conclusions of law for errors at law. State v. Lipcamon, 483 N.W.2d 605, 606-07 (Iowa 1992). We review a district court's decisions regarding discovery for an abuse of discretion. Comes v. Microsoft Corp., 775 N.W.2d 302, 305 (Iowa 2009). However, we review interpretation of our rules of civil procedure for errors at law. Hasselman v. Hasselman, 596 N.W.2d 541, 543 (Iowa 1999).

III. Merits.

A. Jurisdiction. Stowers and Reis challenge the district court's jurisdiction on essentially two grounds. First, they challenge the court's jurisdiction to hold the parties in contempt based on the protective order. Second, they challenge the court's jurisdiction to hold the parties in contempt based on the settlement agreement.

Stowers and Reis argue the district court lacked jurisdiction to enforce the protective order because the case pending before the district court had already been dismissed and the protective order did not stipulate that the parties would continue to be subject to the court's jurisdiction to enforce the order after dismissal of the case.

We find the district court did not err in holding it had jurisdiction to enforce the protective order. Generally, a district court's jurisdiction ends with dismissal of the pending case. See Horrabin v. City of Iowa, 160 Iowa 650, 656-57, 142 N.W. 212, 213 (1913) (supplemental opinion) (“ ‘But the case, as we have seen, is ended. The injunction proceedings must end with the case.... This court will not determine questions unless there be pending cases in which the questions arise.’ ” (quoting Chicago, R.I. & P. Ry. v. Dey, 76 Iowa 278, 280, 41 N.W. 17, 18, (1888))). Courts do retain jurisdiction to enforce those orders that remain in effect. “It is axiomatic that the power of a court to enforce its orders, in the absence of a stay, is essential to the discharge of its duties.” Shedlock v. Iowa Dist. Ct., 534 N.W.2d 656, 658-59 (Iowa 1995) (holding court had authority to enforce protective order even though merits of case were on appeal); cf. LaRue v. Burns, 268 N.W.2d 639, 642 (Iowa 1978) (the court has inherent power to punish disobedience to its orders).

Other jurisdictions have held courts retain the authority to enforce protective orders. See United Nuclear Corp. v. Cranford Ins. Co., 905 F.2d 1424, 1427 (10th Cir.1990) (“As long as a protective order remains in effect, the court that entered the order retains the power to modify it, even if the underlying suit has been dismissed.”); Pub. Citizen v. Liggett Group, Inc., 858 F.2d 775, 782 (1st Cir.1988) (“We note that the courts and commentators seem unanimous in finding such an inherent power to modify discovery-related protective orders, even after judgment, when circumstances justify.”); Factory Mut. Ins. Co. v. Insteel Indus., Inc., 212 F.R.D. 301, 303 (M.D.N.C.2002) (“A final judgment or stipulation of dismissal does not diminish the district court judge's right to lift or to modify such orders.”).

Reis and Stowers correctly note that courts may not enforce...