FEDERAL TRADE COMMISSION et al v. HEALTH RESEARCH LABORATORIES LLC et al

Filing 52

ORDER denying 21 Motion for Order to Show Cause; denying 22 Motion for Order to Modify Judgment ; denying as moot 31 Motion Stay Briefing Relating to Plaintiffs' Motion for an Order to Show Cause By JUDGE JON D. LEVY. (aks)

UNITED STATES DISTRICT COURT
DISTRICT OF MAINE
FEDERAL TRADE
COMMISSION, et al.,
Plaintiffs,
v.
HEALTH RESEARCH
LABORATORIES, LLC, et al.,
Defendants.

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ORDER

The Federal Trade Commission and the State of Maine (collectively,
“Plaintiffs”) bring this civil contempt proceeding against Health Research
Laboratories, LLC, Kramer Duhon, and Whole Body Supplements, LLC (collectively,
“Contempt Defendants”), for alleged violations of Section II.H of the Stipulated Final
Judgment and Order previously entered in this action (“the Judgment”). In addition
to moving for an Order to Show Cause (ECF No. 21), the Plaintiffs move to modify
the Judgment (ECF No. 22). Health Research Laboratories and Duhon cross-move to
modify the Judgment (ECF No. 30), and the Contempt Defendants move to stay the
contempt proceedings until the cross-motions to modify the Judgment are resolved
(ECF No. 31). For the reasons that follow, I deny the Plaintiffs’ motion for an Order
to Show Cause and the Plaintiffs’ motion to modify the Judgment; I deny as moot the
Contempt Defendants’ motion to stay; and I grant the Plaintiffs the opportunity to
file a motion seeking leave to file an amended motion for an Order to Show Cause.

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I. LEGAL STANDARD
“Civil contempt may be imposed to compel compliance with a court order or to
compensate a party harmed by non-compliance.” United States v. Saccoccia, 433 F.3d
19, 27 (1st Cir. 2005) (citing McComb v. Jacksonville Paper Co., 336 U.S. 187, 191
(1949)). “To prove civil contempt, a movant must show that (1) the alleged contemnor
had notice of the order, (2) ‘the order was clear and unambiguous,’ (3) the alleged
contemnor ‘had the ability to comply with the order,’ and (4) the alleged contemnor
violated the order.” Hawkins v. Dep’t of Health & Human Servs., 665 F.3d 25, 31 (1st
Cir. 2012) (quoting Saccoccia, 433 F.3d at 27). When evaluating whether a court
order is “clear and unambiguous,” the question is “not whether the order is clearly
worded as a general matter.” Saccoccia, 433 F.3d at 28. Instead, the “clear and
unambiguous” prong “requires that the words of the court’s order have clearly and
unambiguously forbidden the precise conduct on which the contempt allegation is
based.” Id. (emphasis omitted) (citing Perez v. Danbury Hosp., 347 F.3d 419, 424 (2d
Cir. 2003)). Indeed, the language of the order must leave “no reasonable doubt” that
the allegedly contumacious conduct is prohibited. Id. (quoting Project B.A.S.I.C. v.
Kemp, 947 F.2d 11, 17 (1st Cir. 1991)).
II. DISCUSSION
On July 31, 2020, I issued an Order holding that Section II.H of the Judgment
was facially ambiguous. See FTC v. Health Research Labs., LLC, No. 2:17-cv-00467JDL, 2020 WL 4431497, at *7 (D. Me. July 31, 2020). The Order left open the question
of whether the Plaintiffs may introduce extrinsic evidence for the purpose of showing
that Section II.H of the Judgment “clearly and unambiguously” prohibited “the
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precise conduct” on which their contempt allegations are based. Id. at *4 n.2 (quoting
Saccoccia, 433 F.3d at 28). Thus, the Order did not finally resolve whether Section
II.H of the Judgment was “clear and unambiguous” for civil contempt purposes. Id.
On August 10, 2020, a video status conference was held to establish the
framework for addressing the pending motions. At the conference, the Plaintiffs
maintained their position that extrinsic evidence is admissible for purposes of
determining whether Section II.H is clear and unambiguous, but indicated that in
any event, they lacked sufficient extrinsic evidence to specifically prove that Section
II.H clearly and unambiguously prohibits the conduct on which their contempt
allegations are based. Thus, the Plaintiffs consented to a final ruling on the “clear
and unambiguous” prong with respect to Section II.H without further briefing or
hearing on that issue.
Because I have previously determined that Section II.H is facially ambiguous,
and because the Plaintiffs do not seek a hearing at which to offer extrinsic evidence
to cure the ambiguity, I conclude that Section II.H does not “clearly and
unambiguously” prohibit the Contempt Defendants’ allegedly contumacious conduct.
Accordingly, I conclude as a matter of law that the allegations in the Plaintiffs’ motion
for an Order to Show Cause fail to support a finding of civil contempt under Section
II.H, and the Plaintiffs’ motion for an Order to Show Cause is denied. Additionally,
because the Plaintiffs have represented that their motion to modify the Judgment “is
predicated on Defendants’ contempt” under Section II.H, ECF No. 42 at 2, their
motion to modify the Judgment is denied.

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At the status conference, the Plaintiffs expressed their intent to proceed on an
alternative theory—that the Contempt Defendants violated Section III, not Section
II.H, of the Judgment—and orally moved for leave to file an amended motion for an
Order to Show Cause accordingly. The Contempt Defendants opposed the Plaintiffs’
request for leave to file an amended motion. I declined to rule on the Plaintiffs’
motion without the benefit of briefing by the parties on the same.
III. CONCLUSION
For the foregoing reasons, it is ORDERED that the Plaintiffs’ motion for an
Order to Show Cause (ECF No. 21) and the Plaintiffs’ motion to modify the Judgment
(ECF No. 22) are DENIED, and the Contempt Defendants’ motion to stay briefing
relating to the Plaintiffs’ motion for an Order to Show Cause (ECF No. 31) is
DENIED as moot. Additionally, it is ORDERED that the Defendants shall notify
the Court within 7 days whether they intend to withdraw their cross-motion to modify
the Judgment (ECF No. 30). Finally, it is ORDERED that the Plaintiffs shall file
any motion for leave to file an amended motion for an Order to Show Cause,
accompanied by the proposed amended motion, by October 31, 2020, after which
briefing will proceed according to the schedule set forth in D. Me. Local R. 7.

SO ORDERED.
Dated: August 12, 2020
/s/ JON D. LEVY
CHIEF U.S. DISTRICT JUDGE

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