251 A.3d 13
Vt.2020Background
- Richard Howell invented a ski-binding and was a minority shareholder/employee of Kneebinding, Inc.; he signed a 2008 severance agreement containing a broad release, confidentiality, and non‑disparagement provisions.
- In March 2009 parties stipulated to a permanent injunction barring Howell from publishing communications about Kneebinding to customers, vendors, investors, etc.
- Trial court found Howell violated that injunction and other claims; in 2017 the court vacated the injunction but then entered a narrower modified injunction (Aug. 10, 2017) pending appeal.
- Howell sent emails to vendor Progressive Plastics (Feb–Mar 2018) and a letter (Nov. 15, 2018) asserting he owned the patents; Judge Bryan found contempt (May 23, 2018) for the emails but deferred sanctions; the Vermont Supreme Court in Kneebinding II restored the 2009 permanent injunction on appeal.
- On remand Judge Teachout (Aug. 2019) awarded additional attorney’s fees, issued a declaration sanction tied to the May 23 finding, found Howell in contempt for the Nov. 15, 2018 letter violating the restored 2009 injunction, and imposed fees and a coercive future fine schedule.
Issues
| Issue | Plaintiff's Argument (Kneebinding) | Defendant's Argument (Howell) | Held |
|---|---|---|---|
| Whether an injunction was in effect when Howell sent Feb–Mar 2018 emails | The Aug. 10, 2017 modified injunction remained in effect pending appeal | The Supreme Court’s denial to restore the 2009 injunction vacated the Aug. 2017 order, so no injunction applied | Aug. 2017 injunction remained in force; contempt finding stands |
| Whether Howell had due‑process notice of the Aug. 3, 2017 hearing | Notices were mailed and court later gave Howell a full emergency hearing | Howell received no notice of the Aug. 3 hearing, so due process violated | No due‑process violation: notice was sent and Howell had a later meaningful hearing |
| Transcript‑fraud challenge to Judge Bryan’s proceedings | Transcripts are accepted absent timely motion to correct; prior transcript correction proceedings were terminated | Howell alleges transcript fraud invalidates the record | Court will not consider new transcript‑fraud claim because no timely motion to correct record below and prior proceedings were terminated |
| Validity/constitutionality of Aug. 2017 injunction (and ability to collaterally challenge) | Injunction is valid and enforceable; Howell contractually waived speech and related economic claims | Injunction unconstitutionally interferes with right to earn a living and public policy; collateral‑bar rule should not apply | Collateral‑bar rule’s adequate‑remedy exception applies here; injunction is constitutional and enforceable because Howell knowingly waived rights in the severance agreement |
| Ambiguity of Judge Teachout’s sanction rulings | Orders clearly identify which injunctions applied and which violations were sanctioned | Orders ambiguous as to which injunction was violated, voiding sanctions | No ambiguity: Teachout specified Bryan’s contempt related to Aug. 2017 order and her sanctions related to the Nov. 2018 violation of the restored 2009 injunction |
| Exclusion of testimony about effect on Howell’s right to work | Evidence was irrelevant to the focused remand issues; collateral‑bar bars substantive re‑litigation | Excluding testimony denied ability to show injunction impaired his earning capacity | No abuse of discretion: testimony was peripheral to remand issues and relevance was insufficient |
| Patent‑ownership defense to contempt (does Howell own or reasonably expect to own the patents?) | Patents were assigned to Kneebinding; prior rulings and releases resolve ownership | Howell contends assignments were cancelled by "entire agreement" clause or other corporate defects | Court declines to revisit ownership: law‑of‑the‑case controls earlier findings; alternative ownership theories inadequately briefed |
Key Cases Cited
- Kneebinding, Inc. v. Howell, 201 A.3d 326 (Vt. 2018) (prior Supreme Court decision restoring the 2009 permanent injunction and addressing waiver of First Amendment rights)
- In re Carpenter, 197 A.3d 865 (Vt. 2018) (discusses collateral‑bar rule and adequate‑remedy exception)
- In re Duckman, 898 A.2d 734 (Vt. 2006) (explains collateral‑bar rule and narrow exceptions)
- Allen v. Iowa Dist. Court for Polk Cty., 582 N.W.2d 506 (Iowa 1998) (adequate‑remedy exception where no timely appellate review available)
- United States v. Sussman, 709 F.3d 155 (3d Cir. 2013) (transcript accepted as accurate absent motion to correct the record)
- Miles v. Klein, [citation="250 F. App'x 739"] (7th Cir. 2007) (federal appellate court will not entertain first‑time claims that a certified transcript is "tainted" without prior motion to correct)