Paisley Park Enterprises, Inc. v. Boxill

Background

Plaintiffs Paisley Park Enterprises, Inc. and Comerica Bank & Trust, N.A., as personal representative for the estate of Prince Rogers Nelson, alleged that the defendants violated intellectual-property rights involving trademarks and copyrights. Sidebar Legal, PC had provided legal services to other defendants and was alleged to have participated in the conduct at issue.

Plaintiffs served Sidebar with a subpoena seeking documents. Sidebar objected and did not produce documents. Plaintiffs moved to compel compliance. On March 4, 2019, the court ordered Sidebar to comply within 45 days and considered Sidebar’s objections, finding them meritless. The court warned that noncompliance could lead to contempt, attorney’s fees and costs, and a referral of Wilson to the California State Bar.

Plaintiffs served Sidebar with the subpoena and the March 4 order. Sidebar did not comply or communicate with Plaintiffs. Sidebar also did not respond to the later order requiring it to appear and explain why it should not be held in contempt, and it did not attend the show-cause hearing. Matthew Wilson was Sidebar’s owner, officer, and agent.

Analysis

The court explained that civil contempt can be used to enforce a subpoena or discovery order. Plaintiffs had to prove by clear and convincing evidence that Sidebar violated a specific order of which it had actual notice. The evidence showed that Sidebar had not responded to the subpoena after the March 4 order and had offered no explanation for its noncompliance.

The court also concluded that Wilson could be held responsible because he was Sidebar’s sole owner, officer, and agent, and was the person responsible for acting for the company. Wilson had personal notice of the order requiring him to explain the noncompliance but did not appear.

The court considered the harm caused by the failure to produce documents, whether sanctions would encourage compliance, the financial burden of sanctions, and whether the conduct was willful. It found that the factors were neutral or favored contempt. The court recommended that Sidebar and Wilson be allowed to purge, or end, the contempt by complying with the subpoena within 90 days of the district judge’s order on the recommendation. It further recommended that a bench warrant for Wilson’s arrest be issued if they did not comply after that period.

Ruling and recommendation

Magistrate Judge Tony N. Leung ordered Sidebar to pay Plaintiffs $45,471 in reasonable attorney’s fees and costs incurred in trying to obtain compliance with the subpoena. The order also required Plaintiffs to serve the report and recommendation in specified ways, directed the clerk to send it to the California State Bar’s Office of Chief Trial Counsel for possible disciplinary proceedings concerning Wilson, and preserved prior consistent orders.

The report and recommendation found, based on clear and convincing evidence, that Sidebar and Wilson violated the March 4, 2019 order. It recommended that Sidebar and Wilson be found in constructive civil contempt, that the proposed bench warrant be stayed for 90 days to allow compliance, and that the warrant issue automatically if a later Plaintiffs’ declaration showed that they had not complied. The notice stated that the report and recommendation was not a final district-court order or judgment and could not be appealed directly to the Court of Appeals; objections could be filed under the local rules.