Hunt v. Enzo Biochem, Inc.
Hunt v. Enzo Biochem, Inc.
Opinion of the Court
OPINION AND ORDER
I. INTRODUCTION
Dan Brecher, former counsel for plaintiff Paul Lewicki, brings this motion for an Order pursuant to Rule 71 directing non-party Lawrence Glaser to return confidential documents. On October 12, following an evidentiary hearing at which Brecher and Lewicki — but not Glaser — were present and testified, I granted a motion for sanctions brought by defendants Enzo Bio-chem, Inc., Heiman Gross, Barry Weiner, Elazar Rabbani, Sharim Rabbani, John Delucca, Dean Engelhardt, and John Does
II. BACKGROUND
A. Undisputed Facts
In 2001, Lewicki signed a retainer agreement with attorney Michael Rovell with a view towards filing a series of lawsuits against the Enzo Defendants.
In 2006, Lewicki and other plaintiffs commenced this action, making similar allegations against Enzo. Plaintiffs were initially represented by Rovell; when he died, plaintiffs replaced him with Brecher.
On October 2, 2009, Lewicki and Glaser removed boxes of files, some of which were confidential, from Breeher’s office in New York City.
In January 2011, Glaser filed a motion pursuant to Rule 60 in the Virginia District Court seeking to reopen his original case. Attached to Glaser’s motion were the three confidential files reviewed at the rest stop.
Enzo moved in this Court for an Order directing Brecher and Lewicki to: (1) obtain the return of the Confidential Documents for Glaser; (2) pay Enzo for its litigation costs.
B. Glaser’s Assertions
Glaser is not a party to this action, has never resided in New York, and has had no contact with New York other than to help Lewieki remove the case files from Brecher’s office.
III. APPLICABLE LAW
A. Personal Jurisdiction and Due Process
A court may not assert personal jurisdiction over a party if doing so would deny that party due process under the Fourteenth Amendment.
[T]he plaintiff first must show that his claim arises out of or relates to defendant’s contacts with the forum state. The plaintiff must also show that the defendant purposefully availed himself of the privilege of doing business in the forum state and that the defendant could foresee being haled into court there.34
If a party’s contacts with the forum state rise to this minimum level, a party may defeat jurisdiction only by presenting “a compelling case that the presence of some other considerations would render jurisdiction unreasonable.”
B. Protective Orders
1. Generally
It is well-established that courts have inherent equitable powers to grant confidentiality orders.
“[T]he expanded scope of discovery under the Federal Rules and the increased amounts of information they generated created side effects outside the adjudicatory system — it posed a threat to privacy and confidentiality. To meet this new problem, the discovery rules contain provisions, such as the authorization for protective orders in Rule 26(c), to limit the discovering party’s use of information beyond the litigation context.”39
Thus, “[protective orders serve essential functions in civil adjudications, including
2. Court Authority to Enforce Protective Orders
Courts have inherent power to enforce their orders. “[T]he power of a court to make an order carries with it the equal power to punish for a disobedience of that order.”
A court may not “enjoin the entire universe of potential violators of its orders”; it has no power to enjoin “those who are acting independently of the enjoined party and whose own rights have not been adjudged.”
This language gives force to injunctions and prevents parties from violating them by proxy. “[Defendants may not nullify a decree by carrying out prohibited acts through aiders and abettors, although they were not parties to the original proceeding.”45 This is as true for orders created under Rule 26(c) as it is for injunctions issued under Rule 65.46 Moreover, a court has jurisdiction over those who aid and abet the violation of its discovery orders, regardless of their location.47
C. Collateral Estoppel
Collateral estoppel bars re-litigation of an issue where “(1) the identical issue was raised in a previous proceeding; (2) the issue was actually litigated and decided in the previous proceeding; (3) the party had a full and fair opportunity to litigate the issue; and (4) the resolution of the issue was necessary to support a valid
IY. DISCUSSION
A. Brecher’s Leave to File This Motion
This Court’s individual rules require that prior to filing a motion, a party must “write to Chambers, with a copy to opposing counsel, to request a pre-motion conference.”
B. Nature of the Relief Sought
Brecher asserts that he is moving pursuant to Rule 71.
C. Personal Jurisdiction
Glaser argues that it would offend due process for this Court to exercise jurisdiction over him because his contacts with New York fall well short of the minimum contacts required by International Shoe and its progeny. Because Glaser’s contacts with New York indisputably fall short of that required for general jurisdiction, the question is whether this Court may exercise specific jurisdiction over Glaser “arising out of or related to [his] contacts with the forum.”
Glaser admits the following: (1) he knew that the Protective Order existed;
In Eli Lilly & Co. v. Gottstein, a recent and closely-analogous case, the Second Circuit stated that a non-party’s “aiding and abetting the breach of [a Protective Order] gives the issuing court jurisdiction over the nonparty aider and abettor to enjoin him from continuing those actions.”
If courts cannot bind third parties who aid and abet the violation of their pro*347 tective orders, then any party, agent, attorney or expert who comes into possession of material he wanted to use against the producing party could simply disseminate the information quickly, then deal with the damages issue after the fact. We understand that the threat of a sizable damages award may deter this action in some cases, but [appellantl’s proposed rule would eviscerate courts’ ability to manage discovery and, hence, litigation.66
Accordingly, the Second Circuit held that the district court’s injunction was “a perfectly appropriate device to foreclose further dissemination of the confidential documents produced under the protective order.”
Glaser is a “[nonparty] who reside[s] outside the territorial jurisdiction” of this Court, yet he is “subject to [this] court’s jurisdiction [because he had] actual notice of the court’s order, [and] actively aid[ed] and abetfted] a party in violating that order.”
D. Damages/Sanctions
While this Court has jurisdiction to order Glaser to return the confidential documents, it is less clear whether this Court has jurisdiction to sanction him for his past actions or otherwise find him “liable.” Moreover, because I am not holding that Glaser has violated any order of this Court, neither sanctions nor damages are appropriate. This distinction was key to the Second Circuit’s decision in Eli Lilly. In rejecting the appellant’s assertions that the district court had tried to enforce its protective order against him, the Second Circuit clarified that:
[T]he district court did not enforce [the protective order] against [appellant] — an order to which [he] was not privy. [Appellant] seems to miss the fact that the injunction against which he appeals merely “enjoined him from further disseminating” the “documents produced by Eli Lilly and Company subject to [the protective order]” and required him “forthwith [to] return any such documents and copies still in his ... possession ...” It did not purport to bind [him] to the provisions of the protective order. Thus, [Appelant]’s assertion that the court “enforce[d] a protective order under Rule 26(c)” against him is wholly mistaken. Nor, as [he] contends, did the court impose aiding-and-abetting “liability.” The district court made this abundantly clear, observing that “this is not a contempt proceeding, and the court is not now punishing anyone for*348 any alleged violation of court orders. Rather, this proceeding seeks to prevent irreparable harm to Lilly by enjoining those persons whose actions threaten such harm.”69
Similarly, I am not holding that Glaser violated any provisions of the Protective Order, nor am I imposing aiding and abetting “liability” or “punishing” him for violating this Court’s orders.
It is also unclear whether Brecher is entitled to any damages. I ordered Brecher to obtain the return of the confidential documents from Glaser and pay Enzo for its litigation costs because I found him in contempt under Rule 37 for his failure to comply with a Protective Order.
E. Collateral Estoppel
In March, 2011, Enzo moved in the Eastern District of Virginia for sanctions against Glaser stemming from his use of the confidential documents in an attempt to reopen his case.
Enzo’s motion for sanctions against Glaser was: (1) an attempt to vindicate Enzo’s interests; and (2) premised on the incorrect assumption that Glaser was bound by the Protective Order. Collateral estoppel does not apply to Brecher’s motion because Brecher is not attempting to relitigate Judge Lee’s determination that the Protective Order does not apply to
V. CONCLUSION
Brecher’s motion is granted in part and denied in part. Glaser is hereby enjoined from further disseminating all confidential documents obtained from Brecher and all materials derived therefrom. Glaser shall forthwith return any such documents and copies still in his possession or control to Enzo. Brecher’s motion for damages is denied.
SO ORDERED.
. See Hunt v. Enzo Biochem, Inc. (Hunt II), Nos. 06 Civ. 170, 06 Civ. 213, 06 Civ. 6347, 2011 WL 4840713 (S.D.N.Y. Oct. 12, 2011).
. Id. at *7-8.
. Because Glaser was not a party to — and did not testify at — the evidentiary hearing in this matter, my prior factual findings cannot apply to him. In fact, I specifically declined to consider materials that Glaser submitted to the Court in connection with Enzo's motion for sanctions. See id. at *1 n. 6. As such, I will only consider the facts that Glaser does not dispute.
. See Hunt v. Enzo Biochem, Inc. (Hunt I), Nos. 06 Civ. 170, 06 Civ. 213, 06 Civ. 6347, 2009 WL 1683990, at *1 (S.D.N.Y. June 15, 2009) (citing 4/11/01 Retainer Letter Agreement between Michael Rovell and Paul Lewicki).
. See id. at *1.
. See id.
. See id. at *2 (citing Deposition Transcript of Larry Glaser).
. See Motion for an Order Directing Non-Party Lawrence F. Glaser to Turn Over Documents ("Brecher Mem.”) ¶ 9.
. See Glaser v. Enzo Biochem, Inc., No. 02 Civ. 1242, 2005 U.S. Dist. LEXIS 44188 (E.D.Va. July 14, 2005), aff'd, 464 F.3d 474 (4th Cir. 2006).
. See Brecher Mem. ¶ 10.
. See Docket No. 85; Hunt II, 2011 WL 4840713, at *2.
. Hunt II, 2011 WL 4840713, at *2 (quoting 4/11/09 E-mail Exchange Between Brecher and Lewicki).
. See id.
. See Hunt I, 2009 WL 1683990, at *10.
. See Brecher Mem. ¶ 11.
. Id.
. See Hunt II, 2011 WL 4840713, at *3.
. See id.
. See Brecher Mem. ¶ 14.
. See Glaser v. Enzo Biochem, Inc., No. 02 Civ. 1242 (E.D.Va. Apr. 7, 2011).
. See Glaser v. Enzo Biochem, Inc., 448 Fed.Appx. 324 (4th Cir. 2011), cert. denied, - U.S. -, 132 S.Ct. 2376, 182 L.Ed.2d 1026 (2012).
. See Hunt II, 2011 WL 4840713, at *7-8.
. See Brecher Mem. ¶ 16.
. In the declarations he has submitted to this Court, Glaser makes the following assertions, none of which directly dispute the above facts.
. See Declaration of Lawrence Glaser in Opposition to the Motion for Sanctions ("Glaser Decl.”), ¶¶ 1, 2. Brecher disputes this and asserts that Glaser has had additional contact with New York. See Reply to Opposition to Motion for an Order Directing Non-Party Lawrence F. Glaser to Turn Over Documents ("Brecher Reply Mem.”), ¶ 6.
. See Glaser Decl. ¶ 7; Sur-Reply Declaration of Lawrence Glaser in Further Opposition to the Motion for Sanctions ("Glaser Sur-Reply Decl.”), ¶ 5.
. See id. V 9.
. See id. ¶ 10. Brecher asserts that he personally placed these files in red welds marked "confidential.” See Brecher Reply Mem. ¶¶ 3, 4. Further, Glaser’s assertions are undercut by e-mails from Glaser to Brecher indicating Glaser's awareness that he could not utilize certain files that were marked "confidential” and subject to the confidentiality order. See Declaration of Dan Brecher in Support of Motion for an Order Directing Non-Party Lawrence F. Glaser to Turn Over Documents.
. See Glaser Sur-Reply Decl. ¶ 6.
. See U.S. Const. amend. XIV, § 1.
. International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945) (quoting Milliken v. Meyer, 311 U.S. 457, 463, 61 S.Ct. 339, 85 L.Ed. 278 (1940)).
. Stolt Tankers B.V. v. Geonet Ethanol, LLC, 591 F.Supp.2d 612, 616 (S.D.N.Y. 2008) (quoting Afloat in France, Inc. v. Bancroft Cruises Ltd., No. 03 Civ. 917, 2003 WL 22400213, at *5 (S.D.N.Y. Oct. 21, 2003)).
. Burger King v. Rudzewicz, 471 U.S. 462, 475, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985) (quotations omitted).
. Chew v. Dietrich, 143 F.3d 24, 28 (2d Cir. 1998).
. Burger King, 471 U.S. at 477, 105 S.Ct. 2174.
. See, e.g., Bank Brussels Lambert v. Fiddler Gonzalez & Rodriguez, 305 F.3d 120, 129 (2d Cir. 2002).
. See Seattle Times Co. v. Rhinehart, 467 U.S. 20, 35, 104 S.Ct. 2199, 81 L.Ed.2d 17 (1984) (“[W]e have no question as to the court’s jurisdiction to [enter protective orders] under the inherent equitable powers of courts of law over their own process, to prevent abuses, oppression, and injustices.”) (quotation omitted); International Prods. Corp. v. Koons, 325 F.2d 403, 407-08 (2d Cir. 1963) (”[W]e have no question as to the court's jurisdiction to [forbid the publicizing, in advance of trial, of information obtained by one party from another by use of the court's processes] under the inherent ‘equitable powers of courts of law over their own process, to prevent abuses, oppression, and injustices.' ”) (quoting Gumbel v. Pitkin, 124 U.S. 131, 144, 8 S.Ct. 379, 31 L.Ed. 374 (1888)).
. See Pansy v. Borough of Stroudsburg, 23 F.3d 772, 785 (3d Cir. 1994) (rejecting the argument “that the district court lacked the power to enter an order of confidentiality over a document which is not in the court file nor incorporated into an order of the court”).
. In re Zyprexa, 474 F.Supp.2d 385, 414 (E.D.N.Y. 2007) (quoting Arthur R. Miller, Confidentiality, Protective Orders, and Public Access to the Courts, 105 Harv. L. Rev. 427, 447 (1991)).
. Id.
. In re Debs, 158 U.S. 564, 594, 15 S.Ct. 900, 39 L.Ed. 1092 (1895). Accord In re Lafayette Radio Elec. Corp., 761 F.2d 84, 93 (2d Cir. 1985) ('‘[Ajncillary jurisdiction is recognized as part of a court's inherent power to prevent its judgments and orders from being ignored or avoided with impunity.”).
. See Arkadelphia Milling Co. v. St. Louis Sw. Ry. Co., 249 U.S. 134, 146, 39 S.Ct. 237, 63 L.Ed. 517 (1919) (“It is one of the equitable powers, inherent in every court of justice so long as it retains control of the subject-matter and of the parties, to correct that which has been wrongfully done by virtue of its process.”); In re Lafayette Radio Elec. Corp., 761 F.2d 84, 92-93 (2d Cir. 1985) ("[I]t is established that a federal court sitting in equity that has jurisdiction to issue a decree necessarily has ancillary and supplemental jurisdiction to enter orders and judgments designed to effectuate that decree.... [Ajncillary jurisdiction is recognized as part of a court’s inherent power to prevent its judgments and orders from being ignored or avoided with impunity.”).
. Eli Lilly & Co. v. Gottstein, 617 F.3d 186, 195 (2d Cir. 2010) (citing Regal Knitwear Co. v. NLRB, 324 U.S. 9, 13-14, 65 S.Ct. 478, 89 L.Ed. 661 (1945)).
. Id. (quoting Fed.R.Civ.P. 65(d)(2)).
. Id. (quoting Regal Knitwear, 324 U.S. at 14, 65 S.Ct. 478).
. See id.
. See Waffenschmidt v. MacKay, 763 F.2d 711, 714 (5th Cir. 1985) ("Nonparties who reside outside the territorial jurisdiction of a district court may be subject to that court’s jurisdiction if, with actual notice of the court’s order, they actively aid and abet a party in violating that order.”); Stiller v. Hardman, 324 F.2d 626, 628 (2d Cir. 1963) (“Violation of an injunctive order is cognizable in the court which issued the injunction, regardless of where the violation occurred.”).
. Boguslavsky v. Kaplan, 159 F.3d 715, 720 (2d Cir. 1998).
. See Parklane Hosiery Co. v. Shore, 439 U.S. 322, 330-31, 99 S.Ct. 645, 58 L.Ed.2d 552 (1979).
. Individual Rules and Procedures of Judge Shira A. Scheindlin, Rule IV.A.
. See Non-Party Respondent Lawrence Glaser’s Memorandum of Law in Opposition to Dan Brecher’s Motion for Sanctions ("Glaser Mem.”), at 8.
. See 9/11/12 Letter from Simon Kogan to the Court.
. See Brecher Mem. ¶ 7.
. Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 n. 8, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984).
. Similarly, because Glaser was never a parly to this action, none of my prior factual findings are binding on him.
. See Glaser Sur-Reply Decl. ¶ 5. Glaser asserts that while he knew of the Protective Order's existence, he never saw it and remains unaware of its provisions. See id.
. See id. Glaser argues that the files at issue are not "confidential'' because they were responsive to subpoenas issued in connection with Glaser's bankruptcy. See Glaser Mem. at 2. I have no authority to determine whether these documents should have been turned over to Glaser in a different litigation in a different court.
. Glaser might — in an evidentiary hearing— argue that when he retrieved the files from Brecher’s office, he was unaware that he was retrieving confidential documents. Even if this was so, there can be no doubt that Glaser is now aware that he possesses documents covered by the Protective Order.
. See Eli Lilly & Co. v. Gottstein, 617 F.3d 186 (2d Cir. 2010).
. Id. at 195. Despite the close parallels and clear relevance of Eli Lilly, neither Glaser nor Brecher cited it or made arguments relating to it.
. See id.
. See In re Zyprexa, 474 F.Supp.2d at 429-30. In re Zyprexa was the district court opinion that Eli Lilly affirmed.
. Eli Lilly, 617 F.3d at 195 (quoting Fed.R.Civ.P. 65(d)(2)).
. Id.
. Id. at 196.
. Waffenschmidt, 763 F.2d at 714. The Second Circuit’s opinion in Eli Lilly cited Waffenschmidt in its jurisdictional analysis.
. Eli Lilly, 617 F.3d at 194 (quoting In re Zyprexa, 474 F.Supp.2d at 426, 430).
. That said, should Glaser refuse to comply with this Opinion and Order, contempt and sanctions may be the next step.
. See Hunt II, 2011 WL 4840713, at *6-7.
. See Glaser Decl., Ex. C.
. See id., Exs. D, E.
. Glaser Mem. at 8.
. Glaser Sur-Reply Mem. at 4.
. Glaser’s repeated accusations that Brecher is advancing Enzo’s interests and has become a "shill” for defendants appears to stem from a gross misunderstanding of an attorney’s role. While attorneys should vigorously pursue their client's interests, they are also officers of the court and must not act in bad faith or willfully violate court orders. See United States v. Seltzer, 227 F.3d 36, 40-41 (2d Cir. 2000). Brecher's current efforts to undo the damage caused by his violation of the Protective Order is fully in accordance with his role as an officer of the court and well within the bounds of his professional responsibility.
. Eli Lilly, 617 F.3d at 195.
Reference
- Full Case Name
- Francis Scott HUNT and Shundra Cheri Hunt, individually and as Trustee for Ian Christopher Hunt, Lawrence A. McMahon and Judith J. McMahon, Paul D. Cavanagh individually and as Trustee for the Paul D. Cavanagh Trust, and Virginia Pope v. ENZO BIOCHEM, INC., Heiman Gross, Barry Weiner, Elazar Rabbani, Sharim Rabbani, John Delucca, Dean Engelhardt, and John Does 1-50, Defendants Ken Roberts v. Enzo Biochem, Inc., Defendants Paul Lewicki v. Enzo Biochem, Inc.
- Cited By
- 5 cases
- Status
- Published