Global NAPs, Inc. v. Verizon New England, Inc.
2013 U.S. App. LEXIS 1354
| 1st Cir. | 2013Background
- GNAPs sued Verizon over interconnection fees; Verizon prevailed on the dispute and a district-court judgment of $57.7 million remained unpaid.
- A receiver was appointed to marshal GNAPs' assets and conduct a sale to satisfy the judgment, targeting GNAPs' alter egos BroadVoice and Convergent.
- Gangi, GNAPs' former principal, appealed to challenge an injunction tied to the sale; the appeal is part of a decade-long series of appeals.
- A stalking-horse APA required broad protections against Gangi and his agents, including an injunction to safeguard the Purchased Assets during sale.
- The receiver secured QS as the winning bidder for BroadVoice and Convergent; district court approved the sale and later entered a supplemental injunction restricting Gangi.
- Gangi argues the injunction is overbroad, potentially anti-competitive, and lacking adequate factual findings; the panel reviews the injunction under abuse-of-discretion standards with de novo legal review.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the injunction was properly issued under equity standards | Gangi contends the injunction is warranted to prevent asset interference. | Receiver/QS argue the injunction is necessary to preserve asset value and ensure payment. | Yes; injunction upheld as proper exercise of equitable power. |
| Whether the injunction improperly encroaches on competition | Gangi claims it bars him from reentering VoIP market and violates Massachusetts law. | Injunction targets misappropriation and wrongful actions, not legitimate competition. | Injunction does not prohibit legitimate competition; narrowly construed. |
| Whether the findings supporting the injunction were adequate | Gangi asserts the district court failed to provide sufficient findings. | Earlier orders and related proceedings provide adequate basis for the injunction. | Findings were sufficient given related orders and the circumstances. |
| Whether the public interest supports the injunction | Gangi argues relief serves private interests rather than public interests. | Public interest favors enforcing judgments and ensuring creditors are paid. | Public interest supports permanent injunction. |
| Whether the issue is moot or demands jurisdictional treatment | Gangi raises mootness due to completion of sale while appeal pending. | Mootness not dispositive; merits resolve appeal; jurisdictional issues can be bypassed. | Court chooses to resolve on merits; declines to decide mootness. |
Key Cases Cited
- eBay, Inc. v. MercExchange, L.L.C., 547 U.S. 388 (Supreme Court 2006) (establishes four-factor test for permanent injunctions)
- Esso Standard Oil Co. v. López-Freytes, 522 F.3d 136 (1st Cir. 2008) (informs irreparable injury/content of irreparable harm in equity)
- CoxCom, Inc. v. Chaffee, 536 F.3d 101 (1st Cir. 2008) (supports use of earlier findings to sustain injunction)
- Regal Knitwear Co. v. NLRB, 324 U.S. 9 (Supreme Court 1945) (interpretation/clarification of injunctions under Rule 65)
- Register.com, Inc. v. Verio, Inc., 356 F.3d 393 (2d Cir. 2004) (limits on how an injunction can affect customers and competition)
- NML Capital, Ltd. v. Republic of Argentina, 699 F.3d 246 (2d Cir. 2012) (public interest in debtor compliance with judgments)
- United States v. Greyhound Corp., 508 F.2d 529 (7th Cir. 1974) (interpretation and clarity of injunctions; need for actionable expectations)
- Sorrell v. IMS Health Inc., 131 S. Ct. 2653 (Supreme Court 2011) (commercial speech considerations in regulatory actions)