Advanced Fluid Systems, Inc. v. Huber et al

Filing 280

ORDER denying AFS's motion 250 for sanctions against Huber & INSYSMA, & clarifying & amending Para 1 of stipulated order 63 of 5/22/14 w/ ct's alterations ID'd in italics... (see Para 2 of this order for specifics), & directing Hu ber & INSYSMA to exercise best efforts to come into compliance w/ stip order 63 as clarified in advance of 9/18/17 trial but in any event no later than 14 days after conc of trial w/ cnsl for AFS, INSYSMA & Huber to meet & confer & use best efforts to comply w/ instant order in manner acceptable to all parties & forensically verifiable. (See order for complete details.) Signed by Chief Judge Christopher C. Conner on 9/8/17. (ki)

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
ADVANCED FLUID SYSTEMS, INC., :
:
Plaintiff
:
:
v.
:
:
KEVIN HUBER, INSYSMA
:
(INTEGRATED SYSTEMS AND
:
MACHINERY, LLC), LIVINGSTON & :
HAVEN, LLC, CLIFTON B. VANN IV, :
and THOMAS AUFIERO,
:
:
Defendants
:

CIVIL ACTION NO. 1:13-CV-3087
(Chief Judge Conner)

ORDER
AND NOW, this 8th day of September, 2017, upon consideration of the
motion (Doc. 250) filed by plaintiff Advanced Fluid Systems, Inc. (“AFS”), seeking
sanctions against defendants Kevin Huber (“Huber”) and Integrated Systems and
Machinery, LLC (“Integrated Systems”), including but not limited to a contempt
finding and preclusion order under Federal Rule of Civil Procedure 37(b)(2), for the
alleged violation of the stipulated order (Doc. 63) approved by the court on May 22,
2014, and further upon consideration of the joint response (Doc. 274) thereto filed
by Huber and Integrated Systems, and following a hearing on the subject of AFS’s
motion on September 7, 2017, the court observing that a party seeking a sanction of
civil contempt must prove three elements, to wit: (1) that a valid court order existed,
(2) that the alleged contemnor had knowledge of that order, and (3) that the alleged
contemnor disobeyed the order, see Marshak v. Treadwell, 595 F.3d 478, 486 (3d
Cir. 2009) (quoting Roe v. Operation Rescue, 54 F.3d 133, 137 (3d Cir. 1995)), which

elements must be proven by clear and convincing evidence, id., and there being no
dispute sub judice that a valid court order dated May 22, 2014 exists and provides, in
pertinent part, that:
Kevin Huber (“Huber”) and INSYSMA agree, within
twenty (20) days of the entry of this Stipulation and
Order, to return to plaintiff all copies of all documents
and electronically stored information in their possession
that they obtained from plaintiff, and all documents and
electronically stored information in their possession that
incorporate or specifically reference plaintiff’s documents
and electronically stored information . . .
(Doc. 63 ¶ 1), and the court having found during the contempt hearing that Huber’s
testimony that he retained (and, indeed, continues to retain) documents and other
electronically stored information subject to the stipulated order on his Integrated
Systems email account establishes a violation thereof, satisfying the first and third
elements for a civil contempt finding, see Marshak, 595 F.3d at 486 (quoting Roe,
54 F.3d at 137), such that the only extant dispute is whether Huber and Integrated
Systems knew that the stipulated order required them to delete any residual copies
of the documents and information once turned over to AFS, and, mindful that any
ambiguity in the allegedly-violated order must be resolved in favor of the purported
contemnor, F.T.C. v. Lane Labs-USA, Inc., 624 F.3d 575, 582 (3d Cir. 2010) (quoting
John T. v. Del. Cty. Intermediate Unit, 318 F.3d 545, 552 (3d Cir. 2003)), the court
concluding that, although the circumstances leading to entry of the stipulated
order—viz., withdrawal of AFS’s preliminary injunction motion in exchange for
agreed return of documents—make the parties’ intent clear, the stipulated order

2

itself is less than pellucid as concerns Huber’s and Integrated System’s obligation
to divest themselves of any residual copies of AFS’s documents and information,
such that the court cannot conclude that AFS has shown by clear and convincing
evidence that Huber and Integrated Systems knew the stipulated order proscribed
retention and required deletion of all documents and information once turned over
to AFS, see Marshak, 595 F.3d at 486 (quoting Roe, 54 F.3d at 137), but the court
determining that clarification of the order for purposes of the balance of these
proceedings is both necessary and appropriate, and admonishing that any further
violation of the stipulated order as clarified herein will expose the party in violation
to the full contempt power of this court, it is hereby ORDERED that:
1.

AFS’s motion (Doc. 250) for sanctions against Huber and Integrated
Systems is DENIED.

2.

Paragraph 1 of the stipulated order (Doc. 63) of May 22, 2014 is
CLARIFIED and AMENDED, with the court’s alterations identified
in italics, to state as follows:
Without admitting liability, Kevin Huber (“Huber”) and
INSYSMA agree, within twenty (20) days of the entry of
this Stipulation and Order, to return to plaintiff all copies
of all documents and electronically stored information
in their possession that they obtained from plaintiff, and
all documents and electronically stored information in
their possession that incorporate or specifically reference
plaintiff’s documents and electronically stored information,
and thereafter divest themselves of any original or residual
copies of plaintiff’s documents, electronic or otherwise,
and electronically stored information. “Documents” and
“Electronically stored information” have the meaning
used in F.R.Civ.P. 34(a)(1)(A). This includes, inter alia,
all documents obtained from plaintiff’s “Quotes,” “Drawwork,” and “Draw-finished” files and folders, and all
documents and electronically stored information that
incorporate or specifically reference such documents
and electronically stored information.
3

3.

Huber and Integrated Systems shall exercise their best efforts to
come into compliance with the stipulated order (Doc. 63), as clarified
herein, in advance of trial on September 18, 2017, but in any event no
later than fourteen (14) days following the conclusion of trial. Counsel
for AFS, counsel for Integrated Systems, and Huber shall meet and
confer and shall use best efforts to comply with the instant order in
a manner that is acceptable to all parties and that is forensically
verifiable.

/S/ CHRISTOPHER C. CONNER
Christopher C. Conner, Chief Judge
United States District Court
Middle District of Pennsylvania