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Angiodynamics, Inc. v. Biolitec AG

United States Court of Appeals, First Circuit

May 6, 2016

ANGIODYNAMICS, INC., Plaintiff, Appellee


Edward Griffith, with whom The Griffith Firm, Michael K. Callan, and Doherty, Wallace, Pillsbury & Murphy, P.C., were on brief, for appellants.

William E. Reynolds, with whom Nixon Peabody LLP was on brief, for appellee.

Before Lynch, Stahl, and Barron, Circuit Judges.

STAHL, Circuit Judge.

Defendants, who violated a preliminary injunction, appealed the resulting civil contempt order entered by the district court. The contempt order included a civil arrest warrant and an escalating fines provision. Defendants persisted in their defiance as the unpaid coercive fines continued to accumulate. We affirmed the contempt order and remanded "only to direct the district court to amend the sanction order so that the fines cease to accrue at some total amount." AngioDynamics, Inc. v. Biolitec AG (Biolitec II), 780 F.3d 420, 428 (1st Cir.), cert. denied, 136 S.Ct. 535');">136 S.Ct. 535 (2015).

The district court dutifully followed our instructions, and Defendants promptly appealed the revised contempt order. In this appeal, Defendants argue that the underlying preliminary injunction expired by its own terms and so the district court can no longer coerce compliance with it. Because Defendants failed to raise this argument at any time prior to the present appeal, we DENY the appeal.

I. Facts & Background

One does not need to venture far back into our catalogue of decisions to find a recitation of facts for this case. This is Defendants' fourth appeal. See AngioDynamics, Inc. v. Biolitec AG (Biolitec I), 711 F.3d 248 (1st Cir. 2013); Biolitec II, 780 F.3d 420 (1st Cir. 2015); AngioDynamics, Inc. v. Biolitec AG (Biolitec III), 780 F.3d 429 (1st Cir. 2015). For the convenience of the reader, however, we take a moment to trace the travel of the case.

In 2012, AngioDynamics, Inc. ("ADI" or "Plaintiff") obtained a $23 million judgment in New York against Biolitec, Inc. ("BI") based on an indemnification clause in an agreement between the two entities. Biolitec I, 711 F.3d at 250. Plaintiff sought to secure payment on that judgment by bringing suit against BI's President and CEO, Wolfgang Neuberger, and its corporate parents, Biomed Technology Holdings ("Biomed") and Biolitec AG ("BAG") (collectively, "Defendants"), which, according to Plaintiff, had looted BI of over $18 million in assets in order to render it judgment-proof. Biolitec III, 780 F.3d at 432. As it turns out, this would be but the first in a series of attempts to evade payment to ADI and to elude the power of the courts.

During discovery, Defendants refused to produce documents and key witnesses, including Neuberger. Id. at 432-33. More importantly, Plaintiff soon learned that BAG, based in Germany, intended to effectuate a downstream merger with its Austrian subsidiary. Id. at 433. This, Defendants conceded, would transfer BAG's assets to Austria, precluding ADI from enforcing its judgment. Biolitec I, 711 F.3d at 252.

On September 13, 2012, the district court issued a preliminary injunction barring Defendants from carrying out the merger. On December 14, 2012, the district court denied Defendants' motion for reconsideration. Id. at 250. Defendants appealed the preliminary injunction to this Court, which affirmed on April 1, 2013. Id. at 252. While that appeal was pending, however, Defendants decided to go forward with the merger anyway in direct violation of the injunction. Id. at 250 n.1. Defendants effectuated the merger on March 15, 2013, despite repeated assurances to the district court that they would comply with the order. AngioDynamics, Inc. v. Biolitec AG, 946 F.Supp.2d 205, 211-12 (D. Mass. 2013).

Plaintiff, understandably, moved for the district court to hold Defendants in contempt. Id. at 211. In response, the district court ordered Neuberger to appear in person at an April 10, 2013 hearing to show cause why he should not be held in civil or criminal contempt. Id. at 212. Neuberger defied that order as well, notifying the district court that he would not attend the show-cause hearing. Id.

On April 11, 2013, the district court issued a coercive civil contempt order authorizing escalating, monthly fines against Defendants and an arrest warrant for Neuberger. Id. at 215-16. The decision ordered Defendants to "return Biolitec AG to the status quo ante, " which Defendants conceded was possible, albeit through a process that would be "lengthy, burdensome, and onerous." Id. at 214-15. The district court held that "fines and incarceration for civil contempt will continue until Defendants effectively restore the status quo existing prior to the violation of the court's order." Id. at 216. After a few months, Defendants filed another ...

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