ClearOne v. Chiang
20-4105
| 10th Cir. | Jul 9, 2021Background
- ClearOne sued former Massachusetts-company principals (including Lonny Bowers) in 2007 for trade-secret misappropriation; a jury verdict and permanent injunction were entered and affirmed on appeal.
- Donald Bowers (father of Lonny) was later found to have aided continued misuse, was added to the injunction, held in contempt, prosecuted for criminal contempt, imprisoned, and released in 2017 on conditions including ongoing cooperation with postjudgment discovery about his finances.
- In 2019 ClearOne requested bank statements showing deposits of Bowers’s Social Security benefits; Bowers said his benefits were deposited into his wife’s account, to which he claimed no access.
- The district court issued an "order of admonishment" reaffirming release conditions and, as part of that order, compelled Bowers to produce account statements from January 1, 2017, to present; Bowers appealed that order (No. 20-4108).
- Separately, ClearOne moved to renew an December 2011 contempt-related money judgment for an additional eight years; the court renewed the judgment (subtracting $1,400 applied to Bowers’ individual share) and Bowers appealed that renewal (No. 20-4105).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Appealability of postjudgment discovery/admonishment order | Order is effectively a "trap for contempt" and immediately reviewable because it compels impossible compliance | No immediate appeal; jurisdiction lacks until contempt is found for disobedience | Dismissed appeal for lack of jurisdiction; postjudgment discovery orders not immediately appealable absent contempt finding |
| Validity of renewing joint-and-several contempt judgment | Utah abolished joint-and-several liability; renewal should apportion judgment | Contempt awards rest on federal/inherent court power, not state law; prior appellate mandate controls | Affirmed renewal; joint-and-several liability valid here and district court bound by prior mandate |
| Credits for prior payments (bankruptcy recovery and Chiang settlement) | ClearOne misapplied recovered funds and should have allocated differently | Arguments raised too late and lack supporting authority | Arguments waived for untimely presentation (raised in reply to Rule 59(e)); court did not consider them |
| Recusal of district judge | Judge showed bias; prior 2014 recusal denial should preserve the issue | Prior recusal denial long ago; issue not timely preserved; plain-error standard not argued | Court declined to reach claim: no jurisdiction to revisit 2014 denial and appellant failed to press plain-error standard |
Key Cases Cited
- ClearOne Commc’ns, Inc. v. Bowers, 643 F.3d 735 (10th Cir. 2011) (affirming jury verdict and injunction in the original trade-secret suit)
- ClearOne Commc’ns, Inc. v. Bowers, 651 F.3d 1200 (10th Cir. 2011) (affirming contempt-related rulings and sanctions)
- ClearOne Commc’ns, Inc. v. Bowers, [citation="509 F. App'x 798"] (10th Cir. 2013) (affirming additional contempt-fee judgment)
- Cent. States, Se. & Sw. Areas Pension Fund v. Express Freight Lines, Inc., 971 F.2d 5 (7th Cir. 1992) (postjudgment discovery orders not immediately appealable; appealable only after contempt)
- Richmark Corp. v. Timber Falling Consultants, Inc., 937 F.2d 1444 (9th Cir. 1991) (same rule on non-appealability)
- Rouse Constr. Int’l, Inc. v. Rouse Constr. Corp., 680 F.2d 743 (11th Cir. 1982) (same)
- Childs v. Kaplan, 467 F.2d 628 (8th Cir. 1972) (same)
- United States v. Fabric Garment Co., 383 F.2d 984 (2d Cir. 1967) (same)
- United States v. Riewe, 676 F.2d 418 (10th Cir. 1982) (district courts have broad contempt-discretion)
- Huffman v. Saul Holdings Ltd. P’ship, 262 F.3d 1128 (10th Cir. 2001) (mandate rule requires district courts to follow appellate mandates)
- FDIC v. Noel, 177 F.3d 911 (10th Cir. 1999) (issues not raised below are waived on appeal)
- United States v. Kimball, 73 F.3d 269 (10th Cir. 1995) (plain-error review applicable where recusal not timely raised)
- Richison v. Ernest Grp., Inc., 634 F.3d 1123 (10th Cir. 2011) (failure to argue plain error on appeal forfeits the claim)
- In re Motor Fuel Temp. Sales Practices Litig., 872 F.3d 1094 (10th Cir. 2017) (issues omitted from opening brief are waived)