In United States v. Robinson, No. 22-10949 (11th Cir. Sept. 28, 2023), the Eleventh Circuit vacates the criminal contempt conviction of a former employee of an enjoined corporation, holding that former employees are not “employees” within the intendment of Fed. R. Civ. P. 65(d)(2) and that the government did not prosecute the defendant under the arguably correct theory (aiding and abetting a party in privity).
“In 2017, TASER International, Inc., obtained an injunction against ‘Phazzer [Electronics] and its officers, agents, servants, employees, and attorneys; and any other persons who are in active concert or participation with Phazzer Electronics or its officers, agents, servants, employees, or attorneys’ (the ‘2017 injunction’). The injunction prohibited Phazzer Electronics from distributing or causing to be distributed certain stun guns and accompanying cartridges that infringed on TASER’s intellectual property.”
Robinson was an employee of Phazzer who “answered the phones, shipped inventory, and responded to technical questions.” Following entry of the injunction, Phazzer Electronics became inactive and Robinson instead went to work for other entities with “Phazzer” in their names (e.g., Phazzer IP, Phazzer Global). Those companies in turn allegedly assisted another entity, Phazzer-USA, “in distributing stun guns that the 2017 injunction prohibited Phazzer Electronics from distributing.” Based on this shell-game-like activity, the government charged Robinson (and others) with criminal contempt.
“After trial, but before the district court made any factual findings, Robinson moved for a judgment of acquittal. She argued that she could not be guilty of contempt because she was a third party not bound by the injunction. As Robinson saw things, once Phazzer Electronics ceased operations following Phazzer IP’s termination of the IP license, Robinson was no longer an employee of Phazzer Electronics. And because she did not work in concert with Phazzer Electronics, Robinson reasoned, she couldn’t otherwise be bound by the injunction.” But the district court held that Robinson was an agent of Phazzer Electronics when it caused Phazzer-USA to trade in products subject to the injunction.
The Eleventh Circuit vacates the injunction. Rule 65(d)(2) provides that the following parties may be bound by an injunction: “(A) the parties; (B) the parties’ officers, agents, servants, employees, and attorneys; and (C) other persons who are in active concert or participation with anyone described in Rule 65(d)(2)(A) or (B).” Beyond these categories, the rule embraces the common-law conception of parties “identified with them in interest, in ‘privity’ with them, represented by them or subject to their control.”
The panel holds that Robinson fell within none of the categories pursued by the government below. Particularly, as a former employee of the enjoined corporation, Robinson did not fall within subsection (B) of the rule. “Rule 65(d) contains no category pertaining specifically to ‘former employees.’ Rather, it speaks of ‘employees.’” Moreover, the common law “does not allow for injunctions to capture former employees merely because they are former employees, either. In other words, under Rule 65(d) and the common law, a former employee can be bound exactly to the extent that a non-former employee, nonparty can be bound.”
Nor was Robinson liable as a nonparty under the government’s other theories. For instance, she did not aid and abet Phazzer Electronics at the time of the events because it was already defunct. Nor was she in privity with an enjoined party, either as a (1) “nonparty successors in interest” or a (2) nonparty “otherwise legally identified with the enjoined party.” There were no indicia that Robinson exercised such control over an enjoined entity. “The district court did not make factual findings about whether Robinson was a key employee. Nor did it determine whether she so controlled Phazzer Electronics and the litigation that resulted in the 2017 injunction that it would be fair to say she had her day in court on that injunction. Because the record lacks findings and relevant evidence on these important questions, we cannot conclude that Robinson was bound by the 2017 injunction on this basis.”
The panel notes one theory that might apply to the present facts: that Robinson aided and abetted a party in privity with Phazzer Electronics. But while recognizing that this theory was legally valid, the panel concludes that “the government did not pursue the theory that Robinson aided and abetted someone in privity with a party bound by the 2017 injunction, and the district court did not consider it.” The panel rejects the “notion that an appellate court should affirm a conviction on a theory that the government did not advocate and the factfinder did not consider in the district court.” This is true even when the bench was also the fact-finder (as opposed to a jury trial).
The panel notes the due process implications of allowing the government to pursue a different theory on appeal. “Defending against a claim of contempt when the government alleges the defendant is an employee of an enjoined company certainly implicates different evidence and arguments than defending against a claim of contempt when the government pursues the theory that the defendant aided and abetted someone or some entity in privity with a bound party.” Thus, the panel rejects the aiding-and-abetting theory as forfeited.
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