     Case: 13-20356   Document: 00512901553       Page: 1   Date Filed: 01/14/2015




        IN THE UNITED STATES COURT OF APPEALS
                 FOR THE FIFTH CIRCUIT    United States Court of Appeals
                                                   Fifth Circuit

                                                                         FILED
                                                                     January 14, 2015
                                   No. 13-20356
                                                                      Lyle W. Cayce
                                                                           Clerk
WASTE MANAGEMENT OF WASHINGTON, INCORPORATED,

             Plaintiff–Appellee,

v.

DEAN KATTLER, ET AL.,

             Defendants,

MICHAEL A. MOORE,

             Appellant.




                Appeal from the United States District Court
                     for the Southern District of Texas


Before JOLLY, HIGGINBOTHAM, and OWEN, Circuit Judges.
PRISCILLA R. OWEN, Circuit Judge.
      This appeal arises from a contempt proceeding ancillary to the merits of
the underlying case. Michael A. Moore, the attorney for Dean Kattler, the
defendant in the proceedings below, appeals the imposition of sanctions
following a finding that Moore was in civil contempt. Moore contends that he
was not afforded procedural due process and that the district court abused its
discretion by finding him in contempt. We vacate the contempt finding and
sanctions.
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                                  No. 13-20356

                                        I
      In the underlying litigation, Waste Management, Inc. (WM) sued
Kattler, a former employee, for misappropriating confidential business
information, and for violating the terms of his employment agreement by
accepting a job with Emerald Services, Inc. (Emerald), an alleged WM
competitor.
      Shortly after the onset of litigation, WM sought a temporary restraining
order (TRO) to enjoin Kattler from disclosing WM’s confidential information,
and requiring Kattler to produce images of all electronic devices that might
contain such information. On December 12, 2012, the district court issued a
TRO directing Kattler to “produce to Waste Management images of all
electronic devices used by Kattler . . . except for the electronic devices used
and/or owned by Kattler at Emerald,” and to “produce to a third-party
forensics expert, to be agreed upon by the Parties, images of all electronic
devices used by Kattler . . . at Emerald.” Eight days later, the district court
issued a preliminary injunction that modified the TRO by requiring Kattler to
produce all personal devices to WM within two days (by December 22), and
expanded the definition of “personal devices” to include all of Kattler’s devices,
except those devices “provided to Mr. Kattler by Emerald.” This enlargement
occurred despite the fact that the parties had discussed with the court the
importance    of   preventing   the   disclosure    of   attorney-client-privileged
information present on devices that were now to be produced directly to WM.
      Because the order failed to address the attorney-client-privilege
concerns, Moore argued that Kattler should not be compelled to produce
certain devices. Moore also disputed, based on Kattler’s representations, the
existence of a certain SanDisk-brand USB thumb drive sought by WM. After
it became clear Kattler would not produce those devices, WM moved for a show-
cause hearing as to why Kattler should not be held in contempt. The district

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court granted this motion and ordered “that Defendant appear for a hearing”
to be held on January 22, 2013.
      At the hearing, one of the issues was whether Kattler was required to
produce his iPad for inspection. Moore argued that Kattler complied with the
court’s orders despite not producing the iPad because it was a personal device
and because it contained information protected by the attorney-client privilege.
The district court disagreed that the iPad could be considered “personal” under
the preliminary injunction, and ordered that the device be produced to WM.
Notably, the court spoke in terms of the device itself, rather than an image of
its content. The court recognized Moore’s valid privilege concerns and stated
Kattler would not waive the privilege by producing the iPad, but indicated
Kattler still had to produce it. Moore also represented to the court that Kattler
could not produce the SanDisk thumb drive WM was requesting because
Kattler had never owned such a drive. The court declined to hold Kattler in
contempt but did issue an order requiring that all parties comply with his
orders, “whether written or pronounced from the Bench.”
      Following the hearing, Kattler informed Moore that he now recalled
owning at least one SanDisk thumb drive. Moore consulted a professional
responsibility expert and, on January 28, informed Kattler he would no longer
serve as counsel.
      Kattler, now represented by new counsel, produced the image of the iPad
to WM, but the image contained no relevant information. The responsive
documents were stored in a restricted portion of the iPad’s memory that was
not included in the image because that portion of the memory was
technologically inaccessible at the time the device was imaged. WM demanded
Kattler produce the iPad itself so that recently-developed “jailbreaking”
software could be used to access the device’s restricted memory. After Kattler
refused to do so on grounds that the restricted memory contained privileged

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information, WM filed a renewed motion for Kattler to show cause as to why
he should not be found in contempt for refusing to produce the iPad itself. The
district court granted this motion and issued a notice of setting providing that
a hearing would take place on March 4. The notice stated only that a hearing
was to be held to address docket entry “#84,” which was WM’s show-cause
motion. This motion listed Kattler as the sole potential contemnor whose
liability was to be addressed at the hearing.
      Following this hearing, the district court found both Kattler and Moore
in contempt on grounds that they: (1) misled the court as to the existence of a
SanDisk-brand USB thumb drive, (2) failed to produce an image of Kattler’s
iPad, and (3) failed to produce the iPad device itself. Moore contends on appeal
that, while he was aware he might be the subject of a future contempt hearing,
he was not provided with adequate notice that a contempt finding could be
entered against him after the show-cause hearing. He further argues that, on
the merits, he did not aid or abet any attempt to mislead the court as to the
existence of the thumb drive, and that his failure to comply with the court’s
orders concerning the iPad is excusable because he was attempting to assert
the attorney-client privilege.
                                          II
      “We review contempt findings for abuse of discretion, but ‘review is not
perfunctory.’” 1 Facts will be accepted as true unless clearly erroneous, but
questions of law concerning the contempt order are reviewed de novo. 2 A
factual finding is “clearly erroneous only if, viewing the evidence in light of the
record as a whole, we are left with the ‘definite and firm conviction that a



      1  Hornbeck Offshore Servs., L.L.C. v. Salazar, 713 F.3d 787, 792 (5th Cir. 2013)
(quoting Crowe v. Smith, 151 F.3d 217, 226 (5th Cir. 1998)).
      2   Id.
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mistake has been committed.’” 3 Whether an alleged contemnor was afforded
due process is a question of law we review de novo. 4
                                               III
      In general, due process requires “that one charged with contempt of court
be advised of the charges against him, have a reasonable opportunity to meet
them by way of defense or explanation, have the right to be represented by
counsel, and have a chance to testify and call other witnesses.” 5 A “narrow
exception” to these requirements exists when a litigant engages in courtroom
conduct that “disturbs the court’s business.” 6 Under this exception, the court
may issue a sanction without notice when “all of the essential elements of the
misconduct are under the eye of the court, are actually observed by the court,
and where immediate punishment is essential to prevent ‘demoralization of
the court’s authority . . . before the public.’” 7
      Moore’s allegedly contumacious conduct occurred outside the courtroom.
While his conduct was discussed at the second show-cause hearing, the district
court did not find him in contempt based on any disruptive behavior occurring
at that particular proceeding. Therefore, the district court’s contempt finding
cannot stand if Moore was not afforded adequate notice.
      WM contends its pleadings provided Moore with sufficient notice he
might be held in contempt at the second show-cause hearing. It argues this
court’s decisions in American Airlines, Inc. v. Allied Pilots Association 8 and


      3  In re Grand Jury Proceedings, 55 F.3d 1012, 1013 (5th Cir. 1995) (quoting United
States v. United States Gypsum Co., 333 U.S. 364, 395 (1948)).
      4See Am. Airlines, Inc. v. Allied Pilots Ass’n, 228 F.3d 574, 583-84 (5th Cir. 2000);
Thomas, Head & Greisen Emps. Trust v. Buster, 95 F.3d 1449, 1458 (9th Cir. 1996).
      5   In re Oliver, 333 U.S. 257, 275 (1948).
      6   Id. (quoting Cooke v. United States, 267 U.S. 517, 536 (1925)).
      7   Id.
      8   228 F.3d 574 (5th Cir. 2000).
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Alizadeh v. Safeway Stores, Inc. 9 stand for the proposition that a movant’s
pleadings alone put all potential contemnors on notice that their liability could
be adjudicated at a show-cause hearing, not just those named in the show-
cause motion. We are not persuaded. In American Airlines, we concluded that
the defendants had sufficient notice based on the opposing party’s motion for
contempt, “[c]ouple[d] with the district court’s Show Cause Order,” which
individually named all parties whom the movant sought the court to hold in
contempt. 10 Similarly, in Alizadeh, we held that the imposition of attorneys’
fees against the plaintiff “could not have come as a surprise” because the
defendant had repeatedly requested such fees in its pleadings, and because the
court itself had issued a “Joint Pretrial Order” which provided that the parties
were to litigate at the hearing the issue of whether “Safeway [was] entitled to
recover reasonable attorney’s fees and costs from the Plaintiff.” 11
       Adequate notice typically takes the form of a show-cause order and a
notice of hearing identifying each litigant who might be held in contempt. 12
But, rather than issue a show-cause order naming Moore and Kattler as
alleged contemnors, the court published a notice of an evidentiary hearing to
address WM’s “Motion for Hearing – #84.” Docket entry #84 referred to WM’s
request that “Defendant Dean Kattler should again be ordered to show cause
as to why he is not in contempt of the Court’s orders.” This notice did not signal
to Moore that he could be found in contempt because it identified Kattler alone



       9   910 F.2d 234 (5th Cir. 1990).
       10   American Airlines, Inc., 228 F.3d at 584 (emphasis added).
       11   Alizadeh, 910 F.2d at 236.
       12 See, e.g., McGuire v. Sigma Coatings, Inc., 48 F.3d 902, 907 (5th Cir. 1995) (“At the
time sanctions were rendered against him, [the contemnor] had not been served with any
document that would satisfy the requirement of formal process. . . . The district court had not
issued a show cause or similar order or process that would have put [the contemnor] on notice
that sanctions were being considered against him personally.” (emphasis added)).
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as the party whose contempt liability was to be adjudicated. We therefore
vacate the contempt order as it pertains to Moore.
                                                    IV
          We also conclude that the district court abused its discretion by finding
Moore in contempt. “A party commits contempt when he violates a definite
and specific order of the court requiring him to perform or refrain from
performing a particular act or acts with knowledge of the court’s order.” 13 To
hold a party in civil contempt, the court must find such a violation by clear and
convincing evidence. 14 Evidence is clear and convincing if it “produces in the
mind of the trier of fact a firm belief . . . so clear, direct and weighty and
convincing as to enable the fact finder to come to a clear conviction, without
hesitancy, of the truth of precise facts of the case.” 15 “The contemptuous
actions need not be willful so long as the contemnor actually failed to comply
with the court’s order.” 16             The district court found Moore in contempt on
grounds that he: (1) crafted his response to the Court in a manner to lead the
Court to believe that a certain SanDisk-brand USB thumb drive did not exist,
(2) failed to timely produce an image of Kattler’s iPad, and (3) failed to produce
the iPad itself in violation of the judge’s oral directive at the first show-cause
hearing. We address each of these grounds.
                                                    A
          The district court held Moore in contempt for misleading it as to the
existence of the SanDisk thumb drive. In its December 20, 2012 preliminary
injunction, the district court ordered Kattler and Moore to produce to WM


          13   Hornbeck Offshore Servs., L.L.C. v. Salazar, 713 F.3d 787, 792 (5th Cir. 2013).
          14   Id.
          15   Id. (quoting Shafer v. Army & Air Force Exch. Serv., 376 F.3d 386, 396 (5th Cir.
2004)).
          16   Am. Airlines, Inc. v. Allied Pilots Ass’n, 228 F.3d 574, 581 (5th Cir. 2000).
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images of all personal electronic devices within two days. The SanDisk thumb
drive was a personal electronic device, and Moore, with knowledge of the
court’s order, failed to produce it by December 22. Therefore, the prima facie
elements of contempt were present.
      But an alleged contemnor may defend against a prima facie showing of
contempt by demonstrating a present inability to comply with a court order. 17
      The record reveals Kattler misled Moore as to the existence of the thumb
drive and, as a consequence, Moore was unware the thumb drive existed until
after the first show-cause hearing. Prior to and during the first show-cause
hearing, Kattler repeatedly denied to Moore that he had used any other
electronic devices to download WM documents besides a certain Western
Digital hard drive and a generic (non-SanDisk) thumb drive. Neither WM nor
the district court cited any record evidence to the contrary.
      Instead, WM defends this ground for contempt by arguing that, even if
Moore “unknowingly repeated Kattler’s representations to the district court,”
he still had a duty to correct those statements after he determined that Kattler
did in fact possess the SanDisk drive, and his continued silence at that point
made him complicit in the deception. In support of this contention, WM cites
In re Rosenthal, 18 an unpublished district court decision in which a lawyer was
sanctioned for failing to disclose immediately that his client had deleted
relevant, subpoenaed e-mails. 19 But this court reversed Rosenthal in Ibarra v.
Baker because the lawyer, upon discovering that his client had deleted the
responsive e-mails, took immediate steps to recover the lost information and



      17  Petroleos Mexicanos v. Crawford Enters., Inc., 826 F.2d 392, 401 (5th Cir. 1987)
(citing United States v. Rylander, 460 U.S. 752, 757 (1983)).
      18  No. H-04-186, 2008 WL 983702 (S.D. Tex. Mar. 28, 2008), aff’d in part and vacated
in part sub nom. Ibarra v. Baker, 338 F. App’x 457, 472 (5th Cir. 2009)).
      19   Id. at *10-11.
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informed opposing counsel of the conduct after the extended Thanksgiving
weekend. 20 Here, Moore contacted a professional responsibility expert the day
he learned of Kattler’s deception. He took steps to withdraw from representing
Kattler within three days. Within a week, Kattler had declared, in a sworn
statement, that he now remembered owning at least one SanDisk thumb-drive
device.     Although this case differs from Ibarra because Moore played a
somewhat less proactive role in alerting the court to the deceptive conduct, he
did take immediate steps to distance himself from Kattler, and the court and
opposing counsel did learn of Kattler’s refreshed recollection within one week.
Accordingly, we conclude that here, as in Ibarra, Moore’s conduct “did not
amount to assisting a fraudulent act.” 21
      Viewing the record as a whole, there is abundant evidence that Kattler
deceived Moore as to the existence of the SanDisk thumb drive until late
January and no evidence that Moore knew of its existence until that time. We
therefore conclude that the district court’s finding that Moore participated in
an attempt to mislead the court as to the existence of the SanDisk thumb drive
is clearly erroneous. Accordingly, the district court abused its discretion by
finding Moore in contempt on this ground.
                                               B
      The district court also held Moore in contempt for violating its order to
produce directly to WM an image of Kattler’s iPad. In Maness v. Meyers, 22 the
Supreme Court “recognized that ‘[w]hen a court during trial orders a witness
to reveal information . . . [c]ompliance could cause irreparable injury because
appellate courts cannot always “unring the bell” once the information has been



      20   Ibarra, 338 F. App’x at 471.
      21   Ibarra, 338 F. App’x at 471.
      22   419 U.S. 449 (1975).
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released.’” 23 Accordingly, “a person to whom such an order is directed may
resist the order, and yet not be guilty of contempt if the order is declared
invalid on appeal.” 24 We have explicitly held that the Maness rule applies to
an order that requires an attorney to violate the attorney-client privilege: “We
hold the rule applicable to orders requiring the surrender of other rights or
privileges, such as the attorney-client privilege and the attorney-work-product
doctrine, where disclosure would cause irreparable injury and the rationale of
Maness, supra, is equally compelling.” 25 Therefore, a party’s good-faith claim
of attorney-client privilege can serve as a valid defense to a finding of contempt.
       Here, it is clear that the iPad contained privileged information. Indeed,
at the December 18 preliminary-injunction hearing the parties and the district
court agreed upon a framework for screening out such information. Further,
the privilege was not waived; Moore vigorously asserted it on behalf of Kattler
at every opportunity. To the extent Kattler himself may have shared one
privileged e-mail with a third party, the privilege was only waived with respect
to that particular communication. 26 Accordingly, while Moore clearly failed to
comply with the terms of the December 20 preliminary injunction by not
producing the iPad image directly to WM by December 22, this failure is
excusable because the order required Moore to violate the attorney-client
privilege.




       23  In re Grand Jury Proceedings, 601 F.2d 162, 169 (5th Cir. 1979) (alterations in
original) (quoting Maness, 419 U.S. at 460).
       24   Id.
       25   Id.
       26See Nguyen v. Excel Corp., 197 F.3d 200, 207 (5th Cir. 1999) (“When relayed to a
third party that is not rendering legal services on the client’s behalf, a communication is no
longer confidential, and thus it falls outside the reaches of the privilege.”).
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                                               C
      Lastly, the district court found Moore in contempt because of his failure
to produce the iPad itself. However, no contempt liability may attach if a party
does not violate a “definite and specific order of the court.” 27 Prior to the first
show-cause hearing, the parties only discussed producing images of the
devices, not the devices themselves. It was not until the first show-cause
hearing, when the parties were the applicability of the preliminary injunction
to the iPad, that they discussed production of the device itself, rather than an
image of its content. After the district judge determined that the iPad was a
personal device that should have been produced to WM by December 22, Moore
stated, “if you want that device turned over directly to Waste Management,
we’ll do it tomorrow.” The court responded, “I think that’s what the order said.”
The court was mistaken: the order required Kattler to produce an image of the
device only, not the device itself. Several days later, after WM determined the
image did not contain the relevant information, WM moved to hold Kattler in
contempt because he had failed to produce the device itself in accordance with
the court’s alleged order from the bench.                   But Moore was under the
understandable impression that the only order in place was to produce an
image of the device. Therefore, given the degree of confusion surrounding
whether the district court ordered production of the physical device, we
conclude that Moore did not violate a definite and specific order of the court.
      Further, even if the order had been definite and specific, Moore would
have been entitled to raise renewed concerns about the presence of attorney-
client-privileged-documents in the restricted portion of the iPad’s memory. 28
Kattler routinely used the device to communicate about litigation strategy with



      27   Hornbeck Offshore Servs., L.L.C. v. Salazar, 713 F.3d 787, 792 (5th Cir. 2013).
      28   In re Grand Jury Proceedings, 601 F.2d 162, 169 (5th Cir. 1979).
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his attorney. Moore also did not waive the defense in this context: the presence
of attorney-client-privileged information in the restricted portion of the iPad’s
memory was irrelevant until late January of 2013 when it became clear that
the image of the device was insufficient. Even if the privilege concern had been
relevant prior to that time, Moore would not have had occasion to raise it
because the privileged documents were technologically inaccessible until the
new jailbreaking software was developed in February of 2013. Therefore,
regardless of whether the court’s order was definite and specific, the district
court abused its discretion by finding Moore in contempt because the order
required him to violate the attorney-client privilege.
                                *      *       *
      For the foregoing reasons, we VACATE the judgment of the district court
as to Moore. Moore’s motion to remove Waste Management as appellee in this
appeal is DENIED.




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