11-3872
Cameron International Trading Co., Inc. v. Hawk Importers, Inc.


                                  UNITED STATES COURT OF APPEALS
                                      FOR THE SECOND CIRCUIT

                                                SUMMARY ORDER

Rulings by summary order do not have precedential effect. Citation to a summary order filed on or
after January 1, 2007, is permitted and is governed by Federal Rule of Appellate Procedure 32.1 and
this court’s Local Rule 32.1.1. When citing a summary order in a document filed with this court, a
party must cite either the Federal Appendix or an electronic database (with the notation “summary
order”). A party citing a summary order must serve a copy of it on any party not represented by
counsel.

    At a stated Term of the United States Court of Appeals for the Second Circuit, held at the
Daniel Patrick Moynihan United States Courthouse, at 500 Pearl Street, in the City of New York,
on the 25th day of October, two thousand twelve.

Present: PIERRE N. LEVAL,
         ROBERT A. KATZMANN,
         DEBRA ANN LIVINGSTON,
                     Circuit Judges.
____________________________________________________________

CAMERON INTERNATIONAL TRADING CO., INC., dba Carson Optical, LEADING
EXTREME OPTIMIST INDUSTRIES LTD.,

                                 Plaintiffs-Appellees,

                                 -v-                              No. 11-3872-cv

HAWK IMPORTERS, INC., SHYAM BAHETI, RAM BAHETI,

                     Defendants-Appellants.
____________________________________________________________

For Plaintiffs-Appellees:                  ROBERT J. DEBRAUWERE (Eric D. Dowell, on the brief), Pyror
                                           Cashman LLP, New York, N.Y.

For Defendants-Appellants:                 J. CURTIS EDMONDSON, Law Offices of J. Curtis Edmondson,
                                           Beaverton, Or. (Scott D. Frendel, Braunfotel & Frendel, LLC,
                                           New City, N.Y., Lawrence S. Cohen, Law Office of Lawrence
                                           S. Cohen, Los Angeles, Cal., on the brief)
       Appeal from the United States District Court for the Eastern District of New York
(Seybert, J.).

       ON CONSIDERATION WHEREOF, IT IS HEREBY ORDERED, ADJUDGED,

AND DECREED that the judgment of the district court is AFFIRMED.

       Defendants Hawk Importers, Inc., Shyam Baheti, and Ram Baheti (collectively “Hawk”

or “defendants”) appeal from a November 2, 2010, memorandum and order of the United States

District court for the Eastern District of New York (Seybert, J.), granting the motion of Cameron

International Trading Co., Inc., dba Carson Optical, Leading Extreme Optimist Industries Ltd.

(collectively “Cameron” or “plaintiffs”) to enforce a settlement agreement, and denying

defendants’ motion to dismiss for lack of subject matter jurisdiction. We assume the parties’

familiarity with the underlying facts and procedural history of this case.

       On appeal Hawk principally argues that the district court erred by: (1) finding that it had

subject matter jurisdiction to decide this case; (2) concluding that Hawk breached the September

21, 2004, Settlement Agreement (the “Agreement”); (3) failing to perform the requisite factual

analysis before entering an injunction; and (4) entering an injunction that is impermissibly vague

and ambiguous. We consider each of Hawk’s arguments in turn.

       Whether this Court has jurisdiction to decide a case is a question of law that is reviewed

de novo. Rogers v. Petroleo Brasileiro, S.A., 673 F.3d 131, 136 (2d Cir. 2012). Relying

principally on Kokkonen v. Guardian Life Insurance of America, 511 U.S. 375 (1994), and its

progeny, Hawk contends that the district court lost subject matter jurisdiction to enforce the

Agreement when it so-ordered the Stipulation of Dismissal with Prejudice on January 10, 2005.

Alternatively, defendants contend that there is no subject matter jurisdiction because Cameron

failed to demonstrate a sufficient “nexus” between the infringement addressed by the Agreement

and that alleged in the motion to reopen. We are not persuaded by either of these arguments.

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       We join both the magistrate judge and the district court in concluding that this case

differs from Kokkonen in several critical respects. Here, the district court so-ordered not only

the Stipulation of Dismissal, but also the Agreement, which expressly provided for continued

exclusive federal jurisdiction. Thus, when Hawk breached its contract with Cameron, it violated

a court order over which the district court expressly retained authority to enforce pursuant to its

“inherent power.” See Kokkonen, 511 U.S. at 377, 380 (subject matter jurisdiction lacking

where “the only order . . . was that the suit be dismissed” and this order “did not reserve

jurisdiction in the District Court to enforce the [oral] settlement agreement; indeed, it did not so

much as refer to the settlement agreement”). Additionally, unlike in Kokkonen, the Stipulation

of Dismissal entered in this case expressly referenced the Agreement providing, in pertinent part,

that the parties “having entered into [the Agreement] that has been ‘so ordered’ by this Court . . .

IT IS HEREBY STIPULATED AND AGREED . . . that the [Litigation] be dismissed with

prejudice to all parties.” J.A. 174-75.

       Also based on Kokkonen, Hawk asserts that federal courts lack ancillary jurisdiction to

grant a motion to enforce unless it is adequately connected to the initial phase of the litigation.

This argument, however, misunderstands the law. Kokkonen did not hold that there are two

elements that must be established in order for a federal court to retain jurisdiction to enforce a

settlement agreement. Instead, it held that ancillary jurisdiction may be asserted for two

purposes: (1) “to permit disposition by a single court of claims that are, in varying respects and

degrees, factually interdependent”; or, (2) “to enable a court to function successfully, that is, to

manage its proceedings, vindicate its authority, and effectuate its decrees.” Kokkonen, 511 U.S.

at 379-80. In this case, ancillary jurisdiction over Cameron’s motion to enforce is appropriate


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because it is necessary for the district court to effectuate its order, that is, the Agreement that

Judge Seybert so-ordered. Accordingly, whether the claims are “factually interdependent” is

irrelevant. Id.

       Next, Hawk argues that even if the district court had jurisdiction to decide Cameron’s

motion, it erred in finding that Hawk breached the Agreement. Consent decrees and their

underlying stipulations are generally governed by regular contract law. Doe v. Pataki, 481 F.3d

69, 75 (2d Cir. 2007). Contract interpretation is a question of law that we review de novo.

Phillips v. Audio Active Ltd., 494 F.3d 378, 384 (2d Cir. 2007). Here, for substantially the

reasons articulated by the magistrate judge and the district court, we find that Hawk breached the

Agreement. On appeal, Hawk contends that the district court should not have found that its

products “wholly copied [Cameron’s] mold.” Appellant’s Br.at 34-35. However, as Hawk

failed to raise this argument before the district court, we decline to consider it for the first time

on appeal. See Bogle-Assegai v. Connecticut, 470 F.3d 498, 504 (2d Cir. 2006).

       Hawk’s third and fourth claims relate to the injunction entered by the district court. First,

Hawk asserts that the district court did not make the findings necessary for the issuance of an

injunction, including findings regarding irreparable injury, available remedies at law, the balance

of hardships, and the public interest. But pursuant to the Agreement, the district court was

empowered to issue an injunction upon a simple showing that Hawk violated its terms. J.A. 166

(“Upon demonstrating to the Court that the allegedly noncomplying parties have violated the

terms of this Stipulation of Settlement and Order, the complaining parties will be entitled to

temporary, preliminary and permanent injunctive relief and to recover, in addition to their actual

damages and the noncomplying parties’ profits from such violation, their costs and expenses.”).


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       Finally, Hawk claims that the injunction entered by the district court is overly broad

because its use of the term “intellectual property” renders it so “vague that it does not have a

reasonably specific meaning.” Appellant’s Br. at 41. This claim was waived when Hawk failed

to object to the Report and Recommendation of the magistrate judge in a timely manner.

“Where parties receive clear notice of the consequences, failure timely to object to a magistrate’s

report and recommendation operates as a waiver of further judicial review of the magistrate’s

decision.” Mario v. P & C Food Markets, Inc., 313 F.3d 758, 766 (2d Cir. 2002). Hawk

received clear notice of the consequences of such a failure in the Report and Recommendation.

While Hawk argues that it timely objected by noting that the proposed order was “much broader

than the terms stipulated to in the parties [sic] previous settlement agreement,” this objection did

not raise the issue of specificity. J.A. 369.

       We have considered the defendants’ remaining arguments and find them to be without

merit. Accordingly, for the foregoing reasons, the judgment of the district court is hereby

AFFIRMED.

                                                  FOR THE COURT:
                                                  CATHERINE O’HAGAN WOLFE, CLERK




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