PEARLE VISION, INC., a Delaware corporation, AND PEARLE, INC., a Delaware corporation, Plaintiffs-Appellees, v. VICTOR ROMM, individually and d/b/a ROMM & CO., INC., ROMM VISION ENTERPRISES, INC., et al., Defendants-Appellants.
No. 07-2681
United States Court of Appeals For the Seventh Circuit
ARGUED JANUARY 23, 2008—DECIDED SEPTEMBER 3, 2008
Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 04 C 4349—Joan Humphrey Lefkow, Judge.
MANION, Circuit Judge. Pearle Vision, Inc. (“Pearle Vision“) filed suit against Victor Romm and three of his companies alleging violations of their franchise agreements. The district court entered a preliminary injunction directing Romm to make certain items, including patient
I.
Romm is an optometrist who, until 2004, operated four Pearle Vision stores pursuant to franchise agreements he had entered into with Pearle Vision. On June 29, 2004, Pearle Vision filed suit alleging that Romm had materially defaulted under those agreements.1 Romm‘s alleged infractions included incorrectly charging customers or charging them for services or products not received, poor record keeping, and abandoning at least one store for three or more days. Pearle Vision sought damages for Romm‘s violation of the franchise agreements, as well as a permanent injunction prohibiting Romm from further operating the stores and granting possession of them to Pearle Vision.
On October 5, 2004, Pearle Vision filed the first of three petitions for a rule to show cause alleging that Romm had failed to comply with the September 30 injunction. Pearle Vision alleged, among other things, that Romm had failed to make available to Pearle Vision‘s representative all of his patient records. These allegations were later verified by Franchise Manager Michael Maziarek who testified at a hearing that the only patient records he found at Romm‘s storage unit were three Tupperware trays containing records no more current than 1999. When Maziarek asked Romm about the remaining records, Romm stated that anything not in the unit was at the stores. Maziarek visited the stores the following day, but again did not find any records more current than 1999. He did find file drawers labeled “2003” and “2004,” but they were empty. At the hearing on Pearle Vision‘s petition, the court told Romm that it appeared he had violated the court‘s order and that he was going to be sanctioned, but that the sanction would be reduced if he complied by making the delivery to Pearle Vision in a timely fashion. The district court issued an order on October 6, 2004, directing Romm to show cause why he should not be held in contempt of court, and further directing him to deliver to Pearle Vision, by 2:00 p.m. that day at a Pearle Vision store in South Elgin, the equip-
Despite this clear direction, Romm failed to show up on October 6, prompting Pearle Vision to file its second petition the following day. The court issued another order, this time directing Romm to make delivery of the relevant items to Pearle Vision by 1:00 p.m. of that day, and again directing Romm to show cause why he should not be held in contempt of court. Romm was not present at the hearing on the second petition, but the district court judge informed his counsel, who was present, that there was “undoubtedly” going to be a sanction imposed on Romm for his conduct and that she was “shocked and appalled” by Romm‘s behavior.
On October 12, 2004, Pearle Vision filed its third petition for a rule to show cause. Pearle Vision alleged that Romm arrived as directed on October 7, but still failed to comply fully with the court‘s injunction. First, Pearle Vision claimed that Romm had failed to return the total amount of equipment that would have been present in fully equipped stores, and provided an itemized list of what it believed to be missing. More importantly, Pearle Vision alleged that Romm had failed to produce all of the patient records. It admitted that Romm delivered boxes of patient records which were later determined to cover the years following 1999. Romm also delivered three personal computers, but they contained no patient data. This was not unusual because Pearle Vision stated that the normal set-up in its stores was to have personal computer input terminals which relayed patient data to
A hearing on the third petition was held on October 14, 2004. While the hearing was not completed that day, the court believed it had sufficient information before it to establish Romm‘s non-compliance with its injunction order. Therefore, on that same day, the court entered an order sanctioning Romm at the rate of $1,000 per day until such time as he complied with the court‘s September 30 injunction order by producing the equipment and patient records in question. The court further stated that the sanction was subject to its ultimate findings after completing the hearing.
The court resumed the hearing on October 22, 2004, and heard testimony from Romm, Maziarek, and a computer analyst named Gary Wadhani, who had analyzed the computers received from Romm to determine their contents. Wadhani confirmed the allegations Pearle Vision made earlier that there was no patient data contained on the machines. Wadhani also testified that upon starting the computers, they attempted to connect to a server, and that they were therefore likely only workstations meant to connect to the machine that actually contained data. Romm testified that he did not want to be in contempt of court, and that he had returned everything he had to Pearle Vision. Moments later, however,
The court found that Wadhani‘s testimony, as well as Romm‘s admission that he kept patient data on computers, cast doubt on Romm‘s assertion that he had complied with the court‘s order to deliver all patient records to Pearle Vision.3 After noting its hope that the sanction amount would not turn into an actual judgment, the court expressed its belief that Romm was not in compliance with the injunction order. It stated that Romm had been given an opportunity to explain what happened to the data patient files and had failed to do so and that the $1,000 per day sanction would remain in place until Romm could establish compliance with the court‘s order.
On September 12, 2005, the district court entered summary judgment on the merits of the case in favor of Pearle Vision in the amount of $325,521.99. The court also directed Romm to show cause why $321,000 in sanctions should not be added to the judgment. This was the amount to which the $1,000 per day sanction had accumulated between October 14, 2004, and September 1, 2005, the date
Romm filed an affidavit on September 27, 2005, stating that he wished to avail himself of the second option put to him by the court regarding the patient records. He then proceeded to make the same arguments he had made in October 2004—that he had complied with the court‘s order by turning over all of the physical records, and that he was not in possession of any electronic files stored on computers or otherwise. At a hearing on October 6, 2005, the court said it would not revisit its earlier factual finding that Romm was not in compliance because he had failed to produce electronic patient files. The court then spelled out for Romm that since he was admitting an inability to produce the missing computer files, his only remaining option was to file his tax returns, and he was given another week within which to make that filing. Romm decided on another option and filed for bankruptcy on October 10, 2005. As a result, on October 13, 2005, the district court dismissed the action without prejudice and with leave to reinstate.
Following proceedings in the bankruptcy court, Pearle Vision filed a motion to reinstate proceedings and for an
The district court was informed that Romm attempted to file certain documents with the clerk‘s office on May 21, 2007, in response to the court‘s May 1 order. The documents included a copy of the court‘s order, a handwritten note stating that Romm had no bank accounts, interest in real property, or interest in any business, a completed in forma pauperis application, and an unsigned copy of Romm‘s 2005 tax returns. The clerk‘s office did not accept these documents because they contained no case caption. Romm filed no documents with Pearle Vision‘s counsel as he had been directed to do. Romm also failed to appear at the May 31, 2007, hearing. The court offered a final opportunity to Romm in an order entered the same day. Romm was directed to withdraw the documents from the clerk‘s office, serve them on defense counsel, complete compliance with the court‘s May 1 order, and to appear for a hearing on June 12, 2007. Romm did none of these things, and took no further action below.
On June 14, 2007, the district court entered its final memorandum opinion, providing a thorough recounting of the proceedings, and stating that it found no basis upon which it could discharge its earlier orders to show cause. The court restated its finding that Romm had failed to turn over all of the patient files as it had directed
II.
On appeal, Romm argues that he was not provided a full opportunity to purge the contempt by the means set forth in the court‘s September 12, 2005, order, that the district court‘s sanction award was excessive and unrelated to Pearle Vision‘s damages, and that he was not provided the leniency due a pro se litigator. For Romm to be held in civil contempt, “he must have violated an order that sets forth in specific detail an unequivocal command from the court.” United States v. Dowell, 257 F.3d 694, 699 (7th Cir. 2001). The court‘s power to enforce its order by civil contempt “rests in its inherent limited authority to enforce compliance with court orders and ensure judicial proceedings are conducted in an orderly manner.” Id. Such sanctions “are properly imposed for two reasons: to compel compliance with the court order and to compensate the complainant for losses caused by contemptuous actions.” Tranzact Techs., Inc. v. 1Source Worldsite, 406 F.3d 851, 855 (7th Cir. 2005). We will not reverse the district court‘s imposition of civil contempt sanctions unless the court abused its discretion. Dowell, 257 F.3d at 699.
did not take [the] computers or [the electronic] records. All of the computers from the three stores were either left in the stores or removed to a storage shed. Pearle Vision was given full access to the three (3) stores and the storage shed where those computers were located. The electronic patient records were stored to whatever extent, within those computers for Pearle Vision‘s review.
Romm argues that this statement is “critical” because it contradicts the testimony received by the court in October 2004. We do not see the significance of this argument. Romm, in essence, attempted to reargue findings made by the court almost a year before he filed his affidavit, namely that he was not being forthright about his possession of patient computer files, and that he had violated the court‘s order by not making these files available to Pearle Vision. The contents of Romm‘s affidavit were not as novel as he now argues because it was his position at least since the October 22, 2004, hearing that he was no longer in possession of any computer containing patient files. The court found against Romm then, and he provided no reason for the court to revisit that finding. Notably, Romm did
Furthermore, the court‘s finding was not based solely on Romm‘s admission that the computer files existed, and therefore could not be undercut merely by Romm‘s affidavit. In October 2004, the court expressly relied on Maziarek‘s testimony that patient information was normally stored on computers in the Pearle Vision stores he managed, and Wadhani‘s testimony that the computers recovered from Romm were searching for a server with which to connect. We do not believe the district court abused its discretion in making this finding in October 2004, nor in declining to revisit it when presented with Romm‘s affidavit. See In re Grand Jury Proceedings of December, 1989 (Freligh), 903 F.2d 1167, 1170 (7th Cir. 1990) (noting that the district court‘s findings in contempt proceedings are only disturbed when they are an abuse of discretion or clearly erroneous).
That being the case, we believe that if anything prevented Romm from purging his contempt under the September 12, 2005, order, it was his own insistence on continuing to argue that he had no files to produce, and disregarding the other option made available to him by the court. The district court‘s order presented him with two options—produce the files or submit his tax returns.
On this point, we turn briefly to Romm‘s argument that the district court failed to afford him the leniency normally given to pro se litigants. That courts are required to give liberal construction to pro se pleadings is well established. Kaba v. Stepp, 458 F.3d 678, 687 (7th Cir. 2006). However, it is also well established that pro se litigants are not excused from compliance with procedural rules. See McNeil v. United States, 508 U.S. 106, 113 (1993) (noting that the Supreme Court has “never suggested that procedural rules in ordinary civil litigation should be interpreted so as to excuse mistakes by those who proceed without counsel“).
Romm‘s repeated procedural violations, and not a lack of lenience by the district court, were the reason that a judgment for the full sanction amount was ultimately entered against him. As the record demonstrates, much of Romm‘s contumacious behavior occurred while he was represented by counsel. See nn. 2 and 5, supra. Once the case was reinstated following bankruptcy proceedings, Romm seems to have finally realized that rearguing the computer files issue was not an option. However, his attempt to produce his financial documents in response to the court‘s May 1, 2007, order was inadequate even by pro se litigant standards. Romm‘s production was incomplete, and he attempted to file the papers at the clerk‘s
Furthermore, if Romm had any doubt about what he should do, it could likely have been cleared up when he appeared before the court. Unfortunately, Romm did not appear at any hearings following the one held on April 19, 2007, even though the May 31, 2007, hearing was scheduled in Romm‘s presence at the April 19 hearing. The record establishes that the district court treated Romm fairly and repeatedly stated its desire that he not receive a judgment against him for the full sanction of $1,000 per day. A small level of cooperation from Romm, and certainly a level attainable by a pro se litigant, would have resulted in a different outcome for him. However, Romm‘s
Finally, regarding the judgment amount, Romm argues that it is excessive and not related to Pearle Vision‘s damages. Our review of the record indicates that Romm did not raise this argument before the district court. Romm argued repeatedly that he should not have to pay the sanction because he was not in possession of any computer patient files. He never argued that the $1,000 per day fine was unequal to Pearle Vision‘s actual loss, unrelated to the magnitude of his contempt, or out of proportion to his financial resources, which are our concerns when reviewing a contempt amount. See United States v. United Mine Workers of Am., 330 U.S. 258, 303-04 (1946). Accordingly, this argument is waived. See Metzger v. Ill. State Police, 519 F.3d 677, 681-82 (7th Cir. 2008).
III.
There was no basis for the district court to revisit its earlier factual finding regarding Romm‘s possession of the computer patient files and his failure to turn them over. Romm was therefore not denied an opportunity to purge his contempt as set forth in the district court‘s September 12, 2005, order. Additionally, the district court exhibited sufficient deference to Romm‘s pro se status when the case was reinstated following the bankruptcy proceedings. Finally, because Romm did not argue below that the contempt amount was excessive, he waived the argument
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