NO, 09-1481

IN THE UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT YOUNG AGAIN PRODUCTS, INC. Plaintiff/Appellee, VS. JOHN ACORD AND MARCELLA ORTEGA, Defendants/Appellants

On Appeal From the District of Civil Docket Honorable

United States District Court Maryland (Greenbelt) No.: 8:03-cv-02441-RWT Judge Roger W Titus

APPELLANTS' OPENING BRIEF

JOE ALFRED IZEN, JRATTORNEY FOR APPELLANTS 5222 SPRUCE STREET BELLAIRE, TEXAS 77401 (713) 668-8815 (713) 668-5402 FAX ORAL ARGUMENT REQUESTED

CORPORATE DISCLOSURE STATEMENT

Appellants, Marcella Ortega and John Acord, are individual persons and not corporations or part of a corporation. f Joe Alfre Izen, Jr.

CERTIFICATE OF INTERESTED PERSONS

The undersigned counsel for Appellant, Joe Alfred Izen, an interJr., certifies that the following list of parties have are made est in the outcome of this case. These representations possible in order that the Judges of this Court may evaluate disqualification or recusal. Appellantsu Attorney for Appellants John Acord and Marcella Ortega Joe Alfred Izen, Jr. 5222 Spruce Street Bellaire, TX 77401 (713) 668-8815 Young Again Products, Inc. Thomas Freeman Freeman and Freeman 100 Park Ave, Suite 250 Rockville, MD 20850 (301.) 315-0200 TEL honorable Judge Roger W. Titus

Appellee; Attorney for Appellee:

Trial judge:

TABLE OF CONTENTS

PAGE CORPORATE DISCLOSURE STATEMENT,.,............,..............i CERTIFICATE OF INTERESTED PARTIES..,..... ..... ....,.....i

JURISDICITONAL STATMEMENT...,..,............,...,....viii STATEMENT OF RELATED

SUMMARY OF THE

1,

THE DISTRICT COURT ERRED IN IMPOSING DEATH PENALTY SANCTIONS FOR ALLEGED VIOLATIONS OF PRETRIAL AND/OR PRETRIAL ORDER PROCEDURE UNDER RULES 16, 26,

DISCUSSION OF THE 2. THE RECORD DID NOT CONTAIN SUFFICIENT EVIDENCE TO SUPPORT THE AWARD OF A $3,632,632.40 DEFAULT JUDGMENT..... 54 DISCUSSION OF THE 3. THE DISTRICT COURT ERRED IN GRANTING RULE 11 SANCTIONS BASED ON APPELLANT ACORD'S MOTION FOR CONTEMPT WHICH RAISED THE "GUBI" LETTER AS A VIOLATION OF THE TRIAL COURT'S PREVIOUS INJUNCTION ORDER ...................55
STANDARD OF REVIEW 55

DISCUSSION OF THE 4. THE DISTRICT COURT ERRED IN HOLDING APPELLANT ACORD IN CONTEMPT AND INCARCERATING APPELLANT ACORD FOR FAILURE TO PAY A RULE 11 SANCTION ......................0 DISCUSSION OF THE ISSUE ...................................61

5.

THE DISTRICT COURT ERRED IN REFUSING TO TRANSFER VENUE...,62 DISCUSSION OF THE

REQUEST FOR ORAL CERTIFICATE OF CERTIFICATE OF

TABLE OF AUTHORITIES PAGE CASES Aetna Cas. and Surety Co. v. Markarian, 114 F.3d 346, . 349 (1st dr. 1997) . Anderson,
supra

. 62
. ,

54

Anderson v. Advancement, Etc, of American Indians, 155 F,3d 500 (4th dir. 1998) Boards of Tr. of Ohio Belie. Pro. v. Environmental Affairs Mgmt,, S.D. Ohio, 8-16-2007 .

. 45

. 51 . 56 , 60 . 55

Bruce E. M. v, Dorothea A. M., 455 A. 2d 866(Del. 1983). In Re: Baltimore Emergency Services II, 432 F.3d 557, 559-560 (4th dir. 2005) . In Re: Bees, 562 F.3d 284, 286 (4th. dir. 2009) . In Re: Bryson, 406 F. 3d, 284, 288 (4th dir. 2005) . .

55 , 52

In Re: Central European and industr. Develop, Co., No. 1- 13-2009 (N.D.Cal.) In Re: Chateaudav Corp,, 126 B.R. 165 (6.D.N,Y, 1991) Combs v. Ey_an's Coal Co., 785 F.2d 970 (11th dir.) . Contractors Utility Sales v. Certain-Teed Products, 638 F.2d 1061 (7th dir. 1981) CPC Internatl. Inc. dir. 2000) .
V.

. 49 62 . 56 . 58 , 51

Skippy_, Inc., 214 F.3d 456 (4th . .

Daniels v. U.S., 54 F. 3d 290 (7th dir. 1995) Dove, 569 F.2d at 810 .

. 52 . 56 62 . 52 . 48

Eastern, Natural as Corp. v. Alcoa, 126 F, 3d 996 (7th dir. 1997) In Re: Estate of Bonham, 817 A.2d 192 (D.C. 2003) Garner v. Cuyahoga County Juvenile Court, 07-3602 .(6th dir. 1-22-2009) . Goforth v. Owens, 766 F.2d 1533 (11th dir. 1985)

Hathcock V. Navistar Internat'l, Transp, Corp, 53 F.3d 36, 40 (4th dr. 1995) Hil_Lis v. C.I,R., 916 F.2d 171 (4th dir. 1990) . Hunter, 281 F.3d at 151 . .

, 46 . 52 55 55 . 53

Hunter v. Earth Grains Co. Bakery, 281 F. 3d 144, 150 (4th Cir. 2002) . Jones v, Graham, 709 F.2d 1457 (11th dir. 1983) Kuncilig Jarn.vagsstyreisen V. Dexter and Carpenter, 32 F.2d 195 (2d dir.) cert. denied, 280 U.S. 579, 50 S. Ct 32, 74 L. Ed, 629 (1929) In Re: Kunstier, 914 F.2d 505 (4th Cir. 1990) Lolatchy v, Arthur Murray, Inc,, 816 F.2d 951 (4th dir. 1987) McCargo v. Hedrick, 545 F.2d 393 (4th dir. 1976) Michigan National Bank v. Kroger (F.D.Mich. 1985) 619 F. Supp. 1149

. 56 . GO . 46 52

. 50 . 48 . 61

Mutual Federal Savings and Loan v. Richards and Associates. , 872 F.2d 88 (4th dir. 1989) N,A, Sales Co. v. Chapman Industries Corp,, 736 F.2d . 854 (2d dir. 1984). Nichols v. G. D. Searle and Co., 991 F.2d 1195 (4th dir. 1993) . Nissan Motor Co. v. Nissan Computer Corp,, 378 F,3d 1002 (9th Cir. 2004) O'Connor v. Midwest Pipe Fabrication, Inc., 972 F.2d 1204 (10th Cir. 1992) Piper Aircraft Co, v. Rexpg, 454 U.S. 235 (1981) Raulie v United States . , 400 F.2d. 487 (10th dir. 1968) Reizakis v. Loy, 490 F.2d 1132 (4th dir. 1974) . Richmark Corp. v. Tenderfalling Consultants, 959 F,2d 1468 (9th dir. 1992) Rodeway Express Tnc. V. Piper, supra, 447 U.S. 752, 100 S. Ct. 2455, 65 L. Ed. 2d 488 (1980)

. 62 , 58 , 61 , 62 . 56 52, 53 62 . 50

In Re: Runnells,

815 F.2d 969

(4th Cir. Inc.,

1987)

62

Sanders v. John Nuveen and Co., (7th Cir. 1972).

463 F.2d 1075 , 49

Shea v. Donohoe Construction Co,, (D,C.Cir. 1986) . Shutfler v. Heritage Bank, 1983) State v. Emmanuel, In Re: Ruben, 825, Cir. 1987) 139 N.H.

795 F.2d 1071 . (9th Cir.

52

720 F.2d. 1141

62 51 50 62 59

57,

64 A.2d 53

(1994)

. .

985 F.2d 977 . 427 F.3d 271, 275

Saudi v, Nbrthrop Grumman Corp., dr. 2005) Turgeon v. Premark Internatl., (7th Cir. 1996) . United States v. Mineworkers, . 677 (1947)

(4th . 223

Inc.,

87 F.3d 218, . 258,

330 U.S.

67 S. Ct. . , 58 51

United States v. Wright, 845 F.Supp. 1041, 1073 (D.N.j. 1394) aff'd., 46 F.3d 1120 (3d dir. 1994) Verdi v, Kirby, No. 7-3-2008 (N.D. Ga., 7-3-2008) 561 F.2d 494 .

, 49 45, 48

Wilson v. Volkswagen of America, Inc,, (4th. Cir. 1977) STATUTES 28 U.S.C. fl963 RULES F.R.C,P, Rule 11 11 F,R,Civ.P MISCELLANEOUS

23

17, 17, . 38, 45,

18 18 38 46

37 F.R-Civ,P.

5 A. Wright and Milder, Federal Practice and Procedure, 336.2, 662-663 (3d Ed. 2004) . . vi.,

. 52

McCormick, Handbook of the Law of Evidencq, 633-34 (2d Ed. 1974) 8 Wright and Miller, Federal Practice and Procedure, , 2284 at 757-72 . Federal Rules of Civil Procedure. (JA Vol. 9, PP. 3303, . . . LL 12-23)

56 47 . 36

vii.

JURISDICTIONAL The present appeal arises out of Final. Orders and a Judgment entered by a United States District Court, This Court of Appeals has jurisdiction over this matter pursuant to 28 U * S.C. 1291. This is a suit involving alleged trademark infringement, a Rule 11 sanction in the amount of $24,357.00, a Finding and Order of Contempt for non-payment, incarceration of Appellant, John Acord, for ninety-seven days for failure to pay the Rule 11 sanction, and the District Court's entry of a Default Judgment against Appellants, John Acord and Marcella Ortega, for alleged "failure to cooperate" in the District Court's preparation of a Pretrial Order (Federal. Rules of Civil Procedure 1.6, 26, and 37.) The

District Court had jurisdiction over this controversy pursuant to 28 U.S.C. 1338 providing for original jurisdiction of any civil

case involving federal trademark (s)

(,)io Joe Alfred Izen,

OF RELATED CASES
Appellants state that there are no cases pending in this Court which are related to this case.

:Ho tt) ( ;).K 0 v4 Joe Alfred Izen, Jr.

viii.

STATEMENT OF THE

Issugs

I. WHETHER THE DISTRICT COURT ERRED IN IMPOSING . DEATH PENALTY SANCTIONS FOR ALLEGED VIOLATIONS OF PRETRIAL AND/OR PRETRIAL ORDER PROCEDURE UNDER RULES 16, 26, AND 37, F.R.Civ.P.? 2. 3, WHETHER THE RECORD CONTAINS SUFFICIENT EVIDENCE TO SUPPORT THE AWARD OF A $3,632,832,40 DEFAULT JUDGMENT? WHETHER THE DISTRICT COURT ERRED IN GRANTING RULE 11 SANCTIONS BASED ON APPELLANT ACORD'S MOTION FOR CONTEMPT WHICH RAISED THE "CUBI" LETTER AS A VIOLATION OF THE TRIAL COURT'S PREVIOUS INJUNCTION ORDER? WHETHER. THE DISTRICT COURT ERRED IN HOLDING APPELLANT ACORD IN CONTEMPT AND INCARCERATING APPELLANT ACORD FOR FAILURE TO PAY . A RULE 11 SANCTION? WHETHER THE DISTRICT COURT ERRED IN REFUSING TO TRANSFER VENUE?

4,

5,

NO. 09-1481 IN THE UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT YOUNG AGAIN PRODUCTS, INC, Plaintiff/Appellee, VS. .. JOHN ACORD AND MAR CELLA ORTEGA, Defendants/Appellants

On Appeal From the United States District Court District of Maryland (Greenbelt) Civil Docket No 8:03-cv-02441-RWT Honorable Judge. Roger W, Titus APPELLANTS OPENING BRIEF

TO THE HONORABLE UNITED STATES JUSTICES OF SAID COURT OF APPEALS: OF THE CASE

1,

Appellee, Young Again Products, Inc. ("YAP"), filed its

Original Complaint on August 20, 2003, (Joint Appendix ['JA") Vol. 1, PP, 40-61), 2, The District Court entered a paperless order granting

Appellant, John Acord ("ACORD"), an additional thirty days to respond to YAP'S Complaint on September 22, 2003. (JA Vol. 1, Docket Sheet), 3. Appellant filed a Motion to Dismiss for Lack of Juris-

diction and Improper Venue, on October 14, 2003. (JA Vol. 1, PP. 63-75). 4. Appellee YAP filed a response in Opposition to Appel-

lants' Motion. to Dismiss for Lack of Jurisdiction and Improper 1

Venue on November 14,. 2003. 5.

(JA Vol. 1, PP, 76-97).

. Appellant Acord filed a Reply to Appellee YAP'S Response

to Appellants' Motion to Dismiss for Lack of Jurisdiction and Improper Venue on December 1, 2003. 6. (JA Vol. 1, PP. 98-110),

Appellee YAP filed a Motion for Preliminary Injunction

with attached Exhibits on January 28, 2004. (JA Vol, 1, PP. 111167). 7. Appellee YAP filed a Reply to Appellant Acord's Response

to Appellee YAP's Motion for Preliminary Injunction on March 4, 2004, 8, ( jA Vol. 1, PP, 168-172), The District Court sent paperiess correspondence to

counsel advising counsel for both parties "that Judge Titus has decided to rule on the papers re: Defendants' Motion to Dismiss. Counsel is further advised that oral argument re: Plaintiff's Motion for Preliminary Injunction will be heard. March 22, 2004 at 10:00 a.m." Docket Sheet, 9, The District Court entered a Memorandum Opinion on

Defendants' Motion to Dismiss and Motion to Transfer Venue on March 12, 2004. 10. (JA Vol, 1, PP, 173-181).

Appellant Acord filed a Motion for Leave to File Oppo-

sition to Appellee YAP's Motion for Preliminary Injunction on March 15, 2004. 11. (JA Vol. 1, PP. 1.83-186),

Appellee YAP filed a Response in Opposition to Appel-

lant Acordfs Motion for Leave to File Opposition to Appellee YAP's Motion for Preliminary Injunction with attached Exhibits on March. 15, 2004. 12. (JA Vol. 1, PP. 187-250).

The District Court entered a paperiess order granting

Appellant Acord's Motion for Leave to File Opposition out of time on March 16, 2004, Docket Sheet, 13. The District Court signed an order denying a Motion to (JA Vol. 1, Bates No 251).

Continue on March 17, 2004, 14.

Appelaee YAP filed a Reply to Appellant Acord's Re-

sponse to the YAP's Motion for Preliminary Injunction on March 19, 2004. 15. (JA Vol. 1, PP. 252-297). The District Court held an evidentiary hearing on See

YAP's Motion for Preliminary Injunction on March 22, 2004, Appendix, Vol. 9, 16.

The District Court signed an order granting YAP's

Motion for Preliminary Injunction and setting a $300,000.00 bond as security for the payment of costs and damages on March 25, 2004. (JA Vol. 1, PP. 298-299). 17, Appellant Acord filed a Counter-Claim against Appellee

YAP, Roger Mason, and Ivey Mason, on March 29, 2006. (JA Vol. 1, PP. 300-307. 18, Appellant Acord filed an Answer to Appellee YAP's (JA Vol. 1, PP. 308-316),

Complaint on March 30, 2004.

19, The District Court issued a Scheduling Order on April 8, 2004. (jA Vol, 1, PP. 317-321). 20. The District Court issued a paperless order granting

Appellant Acord's Motion for Leave to File Counter-Claims and to join Roger Mason as a. Counter-Defendant on April 15, 2004. Docket Sheet. 21. Appellee YAP filed a Motion to Enforce Injunction and (JA Vol. 1,

Contempt with attached Exhibits on April 16, 2004.

PP. 322-345). 22. The District Court issued an order setting deadlines

for YAP's Motion to Enforce Injunction and Contempt on April 20, 2004. (JA Vol. 1, PP. 346-347). 23. The District Court signed an order referring the case

to Magistrate judge Charles Day for settlement on April 23, 2004, (CIA Vol. 1, PP, 348). 24. The District Court signed an. order advising counsel

that a settlement conference had been scheduled on April 26, 2004. (JA Vol. 1, PP. 349-350). 25. Appellant Acord filed a Response in Opposition to YAP's

Motion to Enforce Injunction with attached Exhibits on April 30, 2004. (JA Vol. 1, PP. 351-366). 26. Appellee YAP filed an Answer to Appellant Acord's

Counter-Claim on May 5, 2004. (JA Vol. 1, PP. 367-372), 27, Appellee YAP filed a Reply to Appellant Acord's

Response to YAP's Motion to Enforce Injunction and Contempt with attached Exhibits on May 12, 2004. 411). 28. The District Court held a hearing on YAP's Motion to Enforce Injunction and Contempt and granting YAP's motion "for reasons stated in Open Court" on May 19, 2004, See Volume 9. 29, The District Court issued correspondence concerning the consent injunction on May 24, 2004, 419). 30. Appellee YAP filed a Motion for Leave to File Amended Complaint and join. Parties with attached Exhibits on May 24, (JP, Vol, 1, PP. 412(JA Vol. 1, PP. 374-

2008.

(JA Vol, 1, PP. 420-422). 31. The District Court issued a paperless order granting

YAP's Consent Motion for Leave to Join Parties on May 25, 2004. Docket Sheet, 32. The District Court issued a papexless order approving a consent injunction on May 25, 2004, Docket Sheet, 33, The District Court issued a paperless order denying as

moot. YAP's Motion to Enforce the Court's Rulings on March 22, 2004, the Consent Injunction order of March 25, 2004, and the Preliminary Injunction Order dated March 25, 2004, and YAP's Motion for Contempt on May 26, 2004, Docket Sheet. 34, The District Court entered an order granting a Motion

for Extension of Time and extending deadlines on June 8, 2004. (JA Vol, 1, Bates No. 423), 35. Appellees, Ivey Mason and Roger Mason, filed an Answer to Appellant Acord's Counter-Claim on June 14, 2004. (JA Vol, 1, PP, 424-438). 36, Appellants Acord and Ortega filed an Answer to Appellee YAP's Amended Complaint on june. 15, 2004. 448), 37, Appellee YAP filed a Motion for Other Relief to Enforce (JA Vol. 1, PP. 449-475) (JA Vol. 1, PP. 439-

Injunction and for Contempt on June 21, 2004. 38,

Appellant Acord filed a Response in Opposition to

Appellee YAP's Motion for Other Relief and to Enforce Injunction for Contempt with attached. Exhibits on July 7, 2004. (CIA Vol. 1, PP. 476-490). 39, The District Court held a hearing on May 19, 2004 which

is noted on the Docket Sheet on July 14, 2004. See Volume 9. 40. Appellee YAP tiled a. Reply to Appellant Acord's Re-

sponse to YAP's Motion for Other Relief and to Enforce Injunction for Contempt, with attached. Exhibits, on July 20, 2004. 2, PP. 491-508). 41, The District Court signed and entered a Memorandum ( JA Vol.

Opinion on August 4, 2004. (JA Vol. 2, PP, 509-510). 42, The District Court signed an order granting in part and

denying in part YAP's Motion to Enforce Consent Injunction and directing the parties to confer in good faith on August 4. 2004. (JA Vol, 2, PP. 511). 43. The District Court entered Appellee YAP's proposed (JA Vol_ 2, PP.

Motion for Protective Order on August 16, 2004. 512-519). 44.

Appellee YAP filed a Motion for Reconsideration of the

District Court's August 16, 2004 Memorandum Opinion. on August 19, 2004. (JA Vol. 2, PP. 520-522), 45, The District Court entered a paperless order granting

the Motion to Enter a. Proposed. Stipulated Protective Order on August 24, 2004. Docket Sheet. 46, The District Court entered an Order granting the Motion

for Extension of Time and denying Appellee YAP's Motion for Reconsideration of the Court's August 4, 2004 Memorandum Opinion on August 24, 2004. (JA Vol, 2, PP. 523-525),

47. Appellant Aoord filed a Response in Opposition to Appellee YAP's Refiled Motion to Enforce Consent Injunction. for Contempt with attached Exhibits, on September 17, 2004_ ( A Vol_ 2,

PP. 548-570). 48, Appellee YAP filed a Reply to Appellant Acord's Re-

sponse to YAP's Refiled Motion to Enforce Injunction for Contempt with attached Exhibits on October 1, 2004. 580). 49. Appellee YAP filed a Supplemental Motion. to Enforce (JA Vol. 2, PP. 571-

Consent and Preliminary Injunction Orders with attached Exhibits on November 5, 2004. 50. (JA Vol. 2, PP. 581-610).

Appellant Acord filed a Response in Opposition to YAP's

Supplemental Motion to Enforce Consent and Preliminary Injunction with attached Exhibits on November 8, 2004. (JA Vol. 2, PP. 611620). 51. The District Court held a motion hearing on. YAP's Sup-

plemental Motion to Enforce Consent and Preliminary Injunction Orders on November 9, 2004. See Volume 9, 52, The District Court entered an oral order denying YAP's

Motion to Enforce Consent and Preliminary Injunction Orders without prejudice. on November 9, 2004. Docket Sheet. 53, The District Court signed an Order denying Appellee

YAP's Motion to Enforce Consent Injunction and granting Defendants' oral Motion to Remove Exhibit 6 on November 12, 2004. (JA Vol. 2, PP. 621-622). 54, Appellee YAP filed an Emergency Motion to Enforce

Consent Injunction and for Contempt with attached Exhibits on November 19, 2004. (JA Vol. 2, PP. 623-686).

55. The District Court issued a paperless order granting a consent Motion to Seal Defendants' Exhibits 7, 8, and 10, on

December 7, 2004, Docket Sheet, 56, The District Court entered a paperiess order granting

the joint Motion to Extend Deadlines and Amend Complaint on December 15, 2004. Docket Sheet. 57, Appellant Acord filed a Response in Opposition to YAP's Emergency Motion to Enforce Consent Injunction and for Contempt with attached Exhibits on December 16, 2004, (JA Vol. 2, PP. 6E37-694), 58, Appellee YAP filed a Reply to Defendant Acord's Re-

sponse to YAP's Emergency Motion to Enforce Consent Injunction and for Contempt with attached Exhibits on December 30, 2004. (JA Vol. 2, PP, 695-772), 59. The District Court held a motion hearing on February 3,

2005 on YAP's Emergency . Motion to Enforce Consent Injunction for Contempt. Docket Sheet, 60. Appellee YAP filed a Motion Hearing Exhibit List on (JA Vol. 2, PP. 773-774).

February 3, 2005, 61_

The Clerk filed a transcript of proceedings held on

February 3, 2005 on February . 8, 2005, See Volume 9. 62, The District Clerk filed a transcript of proceedings

held on November 9, 2004 on February 8, 2005, See Volume 9. 63, The District Court issued a paperless order granting

the Consent Motion. for Extension of Time to Complete Discovery and setting new motions deadlines on February 11, 2009, Docket Sheet, 64. Appellee YAP filed a Motion to Compel Production of

Documents Responsive to Plaintiff's document requests and Motion

for Expenses including attorney's fees with attached Exhibits on April 15, 2005, 65. (JA Vol. 2, PP, 775-844).

Appellant Acord filed a Response in Opposition to YAP's

Motion to Compel Production of Documents responsive to Plain.tiff's document Requests and Motion for Expenses including (JA

Attorney's Fees with attached Exhibits on April 15, 2005. Vol. 2, PP. 845-874). 66.

Appellee YAP filed a Reply to Appellant Acord's Re-

sponse to YAP's Motion to Compel Production of Documents Responsive to Plaintiff's Document Request and Motion for Expenses Including Attorney's Fees with attachments on April. 15, 2005. (JA Vol, 2, PP. 675-901). 67, The District Court signed an order referring the case to Magistrate Judge William Connelly for discovery proceedings on April 16, 2005. (JA Vol. 2, PP. 902).

68, The District Court signed an order granting YAP's Motion to Amend. / Correct Miscellaneous Correspondence on April 22, 2005, (Sealed Document-No Permission to View-Will Not Download). 69, The District Court signed an order granting YAP's (JA Vol,

Motion to Amend Consent Injunction on April 22, 2005, 2, PP. 903-904). 70,

The District Court, through its Magistrate, issued a

paperiess order scheduling a hearing on YAP's Motion to Compel Production of Documents on May 6, 2005, Docket Sheet, 71. The District Court, through its Magistrate, issued an order denying as moot YAP's Motion to Compel on May 12, 2005. (JA Vol. 2, PP. 905-907).

72,

The District Court, through its Magistrate, issued a.

paperless order granting the Joint Motion to Extend the Fact Discovery Deadline on May 31, 2005. Docket Sheet, 73, 22, 2005. 74. The District Court issued a Memorandum Opinion on July (JA Vol, 2, PP. 908-910). The District Court issued an order denying without (JA

prejudice YAP's Motion to Enforce Judgment on July . 22, 2005. Vol, 2, PP. 911-912). 75,

The District Court, through its Magistrate, issued an

Order further resolving YAP's Motion to Compel on August 241 2005. (JA Vol. 2, PP. 913-915). 76. The District Court, through its Magistrate, issued paperless correspondence scheduling a telephone conference concerning discovery on March 15, 2005. Docket Sheet. 77, The District Court, through its Magistrate, issued a

paperless order approving the order further resolving YAP's Motion to Compel on September 29, 2005, Docket Sheet. 78, The District Court issued an order staying all proceedings as to Appellant Acord and extending responsive pleadings to YAP's Amended Complaint for the remaining Defendants to November 4, 2005 on October 31, 2005. 79. (JA Vol. 2, PP. 91.6).

Appellants Acord and Ortega filed a Motion to Strike (JA Vol. 2, PP.

YAP's Amended Complaint on November 4, 2005. 917-921). 80.

Appellee YAP filed a Response in Opposition. to Appel-

lants Acord and Ortega's Motion to Strike Amended Complaint on November 14, 2005, (LTA Vol, 2, PP. 922-927).

10

61, Appellants Acord and Ortega filed a Stipulation of Unilateral Agreement. on November 15, 2005. 932). 82. The District Court, through its Magistrate, issued a paperless order granting consent Motion to Extend Deadlines with a new Scheduling Order on November 15, 2005, Docket Sheet, 63. Appellants Acord and Ortega filed a Reply to YAP's (JA Vol. 2, PP. 928-

Response to the Motion to Strike Amended Complaint on November 28, 2005. 84. (JA Vol. 2, PP. 933-935). The District Court signed an order denying Appellants

Acord and Ortega's Motion to Strike on January 11, 2006. (JA Vol. 2, PP. 936), 85. The District Court signed an Order granting the Joint

Motion for Extension of Time for Defendants' AnWer to Appellee YAP's Supplemental Complaint on January 27, 2006, PP. 937). 86, The District Court signed an order granting Appellee (JA Vol. 2,

YAP's Motion for Leave to File Supplemental Complaint on February 10, 2006. 87, ( JA Vol. 2, PP, 938). Appellee YAP filed a Supplemental Complaint against (JA Vol. 2,

Appellants Acord and Ortega on February 10, 2006. PP. 939-968). 88,

Appellants Acord and Ortega filed an Answer to YAP's (JA Vol. 2, PP. 969-

Amended Complaint an February 15, 2006. 979).

69. The District Court, through its Magistrate, issued a paperiess order granting the Joint Motion to Extend Deadlines on

11

February 17, 2006. Docket Sheet, 90, The District Court, through its Magistrate, issued a

paperless order scheduling a telephone conference call for Monday, April 24, 2006 on April 20, 2006, Docket Sheet, 91, The District Court, through its Magistrate, issued a

paperless order directing Defendants to provide Plaintiff with their final privilege log and setting discovery deadlines on March 24, 2006, Docket Sheet, 92. The District Court issued an order advising counsel

that a settlement conference had been scheduled on June 27, 2006, (JA Vol, 3, PP, 980-981), 93. Appellee YAP filed a Motion for Other Relief commanding

Defendants to comply with the Unilateral Non-Disclosure Agreement on July 7, 2006. 94. (JA Vol, 3, PP. 982-1007).

Appellants Acord and Ortega filed a Response in Opposi-

tion to Appellee YAP's Motion for Other Relief Commanding Defendants to Comply with the Unilateral Non-Disclosure Agreement on July 24, 2006, 95, (JA Vol. 3, PP. 1008-1011),

Appellee YAP filed a. Reply to Appellants Acord and

Ortega's Response to Appellee YAP's Motion for Other Relief Commanding Defendants to Comply with the Unilateral Non-Disclosure Agreement with attached Exhibits on August 7, 2006. PP, 1012-1023), 96, The District Court, through its Magistrate, issued a (JA Vol. 3,

paperless order scheduling a. telephone conference for Wednesday, August 16, 2006 at 400 p.m. on August 15, 2006. Docket Sheet. 97, A telephone conference was held before Magistrate judge.

12

William Connelly on August 16, 2006. Docket Sheet, 98. The District Court, through its Magistrate, William

Connelly issued a paperless order scheduling a follow up telephone conference for Friday August 18, 2006 at 2:00 p.m. on August 17, 2006). Docket Sheet, 99. The District Court through its Magistrate William

Connelly issued a paperless order scheduling a follow up telephone conference for Monday, August 21, 2006 at 2:00 p.m, on August 18, 2006. Docket Sheet. 100. The District Court through its Magistrate issued a

paperless order granting YAP's Motion for an Order Commanding Defendants to Comply with the Unilateral Non-Disclosure Agreement on August 21, 2006 and refused to impose a portion of the costs for the documents sought by YAP on Appellants Acord and Ortega. Docket Sheet, 101, The District Court issued a paperless

order granting

attorney Karen P. Severson's appearance as counsel for Appellants Acord and Ortega on September 12, 2006. Docket Sheet, 102
*

The District Clerk filed the transcript of the tele-

phone conference call held on August 18, 2006 and August 21, 2006, on September 29, 2006 103.
*

Audio Recording.

Appellants Acord and Ortega filed. a. Response to YAP's

Motion. for Reconsideration of the Order on Motion for Other Relief with attachments on October, 10, 2006, 1018-1023)* 104. The District Court entered an order staying all pro(CIA Vol_ 3, PP.

ceedings as to Defendant, Young Again Nutrients, LLC, pending

13

ry 4, 2007. resolution of its Chapter ll bankruptcy on Janua Vol. 3, PP. 1024).

(JA

the stay as 105. The District Court signed an order lifting ry 17, 2007, to Defendant, Young Again Nutrients, LLC, on Janua (JA Vol. 3, PP, 1025-1029). 106, d a The District Court, through its Magistrate, issue

January 29, 2007 paperless order scheduling a motions hearing for on January 22, 2007, Docket Sheet 107, d a The District Court, through its Magistrate, issue

Reconsideration paperless order denying- Defendants' request for 2006 order on and denying relief from the Court's August 21, January 29, 2007. See Docket Sheet, 108, ing The District Court issued a paperless order grant

on February 5, attorney Jeremy Mark Hoffman's Motion. to Withdraw 2007, Docket Sheet, 109. d a The District Court, through its Magistrate, issue

by telephone on paperless order scheduling a status hearing 5, 2007, Tuesday, March 13, 2007 at 10:00 a.m. on March Sheet, 110, ney Lawrence Laubscher's Motion to Withdraw as Attor Docket

its was filed for Young Again Nutrition, LLC, with attached Exhib on April 24, 2007. 111, (JA Vol. 3, PP. 1030-1036),

d a The District Court, through its Magistrate, issue

YAP's Amended paperiess order staying the May 21, 2007 date for of the documents Rule 26(a)(2) expert disclosures pending review , as ordered by the Court on May 18, 2007, Docket Sheet the "confi112. The District Court issued an Order striking

14

dential" attorney's "eyes only" designation on the DVD documents and admonishin
g

YAP's counsel concerning the sensitive customer

*

information contained on the DVD on July 19, 2 007 PP, 1037-1044).

(jA Vol. 3,

ILL

The District Court entered an order staying all pro-

ceedings as to Defendant, Young Again Nutrition, pending resolution of the Defendant's Chapter 11 Bankruptcy Petition on June 21, 2007. (JA Vol. 3, PP. 1045-1046). 114, The District Court signed an order granting Lawrence

Laubscher's Motion to Withdraw as Attorney on June 27, 2007. (JA Vol. 3, PP, 1047). 115, The District Court signed an order amending the Sche(JA Vol, 3, PP. 148-149)*

duling Order on July 11, 2007.

116. Appellant Acord filed a Motion to Stay Proceedings pending completion of criminal investigation. on November 8, 2007. (CIA Vol, 3, PP. 1050-1090). 117, The. District Court, through its Magistrate, issued an (JA

order amending the Scheduling Order on November 16, 2007, Vol, 3, PP, 1091-1092), 118,

The District Court issued a paperless order granting a

consent. Motion for Extension of Time on Nbvember 27, 2007. Docket Sheet, 119, Appellee YAP filed a. Response in Opposition to Appel-

lant Acord's Motion to Stay with attached Exhibits on November 30, 2007. 120, (JA Vol. 3, PP. 1093-1203). Appellant Acord reified another Motion to Enforce the

Consent injunction and for Order to Show Cause and For Expenses

15

Including Attorney's Fee and for Dismissal on December 7, 2007. (JA Vol. 3, PP, 1204-1392). 121, Appellant Acord filed. an Answer to Appellee YAP's Opposition to Acord's Motion for Stay of Proceedings and Request that YAP be held in contempt for numerous violations of the Consent Injunction on November 13, 2007. 1406). 122. The District Clerk filed the telephone conference held on November 16, 2007 on December 14, 2007. Docket Sheet, 123, The District Court issued a paperless order granting (JA Vol. 3, PP, 1393-

Motion for Extension of Time on December 18, 2007. Docket Sheet. 124, Appellants Acord and Ortega filed a Response in Op p o-

sition to Appellee YAP's Motion to Enforce Judgment, Motion for Order to Show Cause and Motion for Attorney's Fees with attached Exhibits on January 8, 2008. (JA Vol. 4, PP. 1407-1798).

125. Appellee YAP filed a Second Supplement to its Opposition to john Acord's Motion for Contempt on January 15, 2008. ( jA Vol, 4, PP, 1799-1850), 126, The District Court issued an Order scheduling a tele-

phone status conference for January . 23, 2008 on January 16, 2008. (JA Vol. 4, PP, 1851). 127, The District Court issued all Order withdrawing the

Motion to Stay Proceedings and Lifting the Stay as to Defendant, Young Again Nutrients, LLC, now known as Supplement Spot on January 24, 2008. (JA. Vol. 4, Pip . 1852),

128. Appellee YAP filed a. Motion for Sanctions Pursuant to FRCP Rule 11 on May 6, 2008. (JA Vol. 4, PP. 1854-1856).

129.

Appellant Ortega filed a Motion for Summary Judgment

with attached Exhibits on June 27, 2008. (JA Vol. 5, PP, 18571898). 130. Appellee YAP filed a Motion for Default Judgment or in

the Alternative Motion for Summary . Judgment on June 30, 2008, (JA Vol, , PP. 1899-1929). 131. Appellee YAP filed a Motion to Stay on Ruling on

Motion for Default Judgment against Defendant, Supplement Spot, EEC, or In the Alternative, Motion for Summary judgment, on July 1, 2008. 132, (JA Vol. 5, PP, 1930-1934). Appellant Acord filed a Supplemental. Motion to Enforce

a Consent Injunction as entered by the Court on May 25, 2004, and for an Order to Show Cause why Plaintiffs and Third Party Defendant Should Not Be Held in Contempt with attached "Lengthy Exhibits" on July 15, 2008. 133, (JA Vol. 5, PP, 1935-1939).

Appellees, YAP, Roger Mason., and Ivey Mason, filed a

Response in Opposition to Appellants' Motion for Summary Judgment and Cross-Motion for Summary Judgment with attached Exhibits on August 1, 2008. (JA Vol. 5, PP. 1940-2109),

134. Appellee YAP filed a Response in Opposition to Appellant Acord's Motion for Contempt and a Cross-Motion to Seal Certain Exhibits with attached Exhibits on August 1, 2008, Vol, 5, PP. 2110-2167). 135, Appellant Ortega filed a Reply to Appellee YAP's (JA

Response to the Motion for Summary Judgment and Opposition to Plaintiff's Cross-Motion on August 21, 2008, . 2168-2172), (JA Vol. 5, PP,

17

136.

The District Court issued a paperiess order granting

YAP's Motion to Stay on Ruling for Entry for Default Judgment on August 27, 2008. Docket Sheet, 137. The District Court entered a Memorandum Opinion on (CIA Vol. 5, PP, 2173-2175)*

August 27, 2008. 138,

The District Court issued an Order Denying Motion to

Enforce judgment, Motion for Order to Show Cause and Motion for Attorney's Fees on August 28, 2008. 139, (CIA Vol. 5, PP. 2176-2177).

Appellant Acord filed a Motion for Extension of Time

to File Response to Motion for Sanctions on September 19, 2008. (JA Vol. 5, PP. 2178-2182). 140. Appellee YAP filed a Response in Opposition to Appel-

lant Acord's Motion. for Extension of Time to File Response to Motion for Sanctions on September 23, 2008. LTA Vol. 5, PP. 2183-2205). 141. The District Court issued a paperlesS order denying

Appellant. Acord's Motion for Extension of Time to File Response on September 24, 2008. Docket Sheet. 142, Appellant Acord filed a Response in Opposition to YAP's Motion for Sanctions Pursuant to FRCP Rule 11 and Request for Reconsideration. of Court's Denial of Motion for Contempt against Plaintiff and Roger Mason with attached Exhibits on September 30, 2008, (JA Vol. 5, PP. 2206-2254). 143, Appellee YAP filed a Reply to Appellant Acord's Oppoand

sition to its Motion for Sanctions Pursuant to FRCP 11 Request for Reconsideration on October 10, 2008. 2255-2257),

(JA Vol. 5, PP.

18

144. The District Clerk issued a "filed in error" letter to Appellee YAP's counsel concerning its October 3, 2008, 145,

Response

in Opposition on

(JA Vol. 5, PP. 2259).

Appellee YAP filed a Supplement to its Opposition to

Marcella Ortega's Motion to Dismiss or in the Alternative Motion for Summary Judgment on November 13, 2008. (JA Vol. 5, PP. 2262-2301). 146, The District Court held a motions hearing on November

17, 2008. The items that the Clerk tiled and entered on November 17, 2008 can not be viewed on the docket. 147. A motion

hearing

was entered on the. docket by the

District Clerk. on November 17, 2008. The items filed by the Clerk can not be viewed on the docket and they are apparently sealed. 148, The District Court entered an order dismissing Appellee YAP's claims against Defendant, Supplement Spot, and Defendant, Supplement Spot's, claims against Appellee YAP on November 17, 2008. (JA Vol. 5, PP. 2303-2304), 149, The District Court entered an order granting Appellee

YAP's Motion. for Rule 11 Sanctions Against Appellant Acord in the amount of $24,357.00 on June 17, 2008. (JA Vol. 5, PP. 23052307). 150. The District Court entered an order confirming the (JA Vol. 5,

schedule "set in this case" on November 17, 2008. PP. 2308-2312). 151.

Appellees YAP, Roger Mason, and Ivey Mason, filed a

Motion in Limine and Memorandum of Points and Authorities on

19

December 15, 2008. 152.

(JA Vol, 5, PP. 2313-2336)*

Appellee YAP filed a Stipulation of Dismissal of (JA Vol, 6, PP.

Claims and Counter-Claims on December 29, 2008. 2337-2368) . 153.

The District Court signed an order approving a consent

motion injunction and Stipulation. of Dismissal on January 6, 2009. (JA Vol. 6, PP. 2369-2371). 154. Appellee YAP filed its Reply to Appellant Acord's

Failure to Respond / Oppose Motions in Limine on January 29, 2009, (JA Vol. 6, PP. 2372-2376). 155. Appellee YAP filed its Proposed Pretrial. Order with (JA Vol, 6, PP. 2377-2474).

attachments on March 2, 2009. 156.

Appellee YAP filed a Proposed Exhibit List to Pretrial

Order on March 2, 2009. (JA Vol, 6, PP. 2475-2493). 157, Appellee YAP filed its Proposed Jury Instructions on March 2, 2009, 158. (JA Vol. G, PP
*

2494-2498).

Appellee YAP filed additional Proposed Jury Instruc(JA Vol. 6, PP. 2499-2516),

tions on March 2, 2009. 159.

Appellee YAP filed a Motion for Default Judgment as to (JA Vol, 6,

Appellant Acord with attachments on March 2, 2009. PP. 2517-2553). 160.

Appellee YAP filed a Motion for Sanctions and for

Civil Contempt against Appellant Acord for Refusal to Pay Rule 11 Sanctions on March 16, 2009. 161. (CIA Vol, 6, PP
*

2554-2564).

Appellee YAP filed a. Motion for Default, Judgment (CIA Vol,

against Defendant, Marcella Ortega, on March 17, 2009. 6, PP, 2565-2601).

20

162,

The District Court issued a Memorandum Order reminding

the parties of the Pretrial Conference Scheduled for March 23, 2009 at 2:00 p.m- on March 19, 2009, 163, (JA Vol. 6, PP. 2602).

Appellant Ortega filed a Response in Opposition to

Appellee YAP's Motion for Default Judgment with Attachments on March 20, 2009. 164. (JA Vol. 6, PP. 2604-2614).

The District Court issued an Order granting Appellee

YAP's Motion for Sanctions directing Appellant Acord to Pay $24,357.00 in Rule 11 Sanctions, granting YAP's Motion in Limine as ''unopposed" as to Appellants Acord and Ortega; granting Appellee YAP's Motion. for Default Judgment Against Appellants Acord and Ortega, and granting YAP Default Judgment in the amount of $3,832,832.40 on March 25, 2009, 165. (JA Vol. 6, PP. 2615-2618).

Appellant Ortega filed. a Motion for New Trial with (JA Vol. 6, PP, 2619-2693).

attached Exhibits on April 7, 2009. 166.

Appellant Acord filed a Motion for New Trial with (JA Vol. 6, PP. 2694-2855),

attached Exhibits on April 17, 2009.

167, Attorney Lawrence Laubscher filed a Motion to Withdraw as Attorney of Record for Appellant Ortega with attached Exhibits on April 15, 2009. 168. (JA Vol. 7, PP. 2856-2873).

Appellee YAP filed an Emergency Motion for Extension

of Time to File a Response / Reply to Motion for New Trial on April 21, 2009. 169. (JA. Vol. 7, PP, 2874-2883),

Appellee YAP filed a Response in Opposition to Appel-

lant Acord's Motion for New Trial with attached EXhibits on April 22, 2009. 170. (JA Vol. 7, PP. 2884-2963). Appellee YAP filed a Response in Opposition to Appel-

21

lant Ortega 's Motion for New Trial on April 22, 2009. (JA Vol. 7, PP. 2964-2973), 171, The District Court entered an Order granting Appellee MP's Motion for Extension of Time to File Response to Motion for New Trial on April 24, 2009. (JA Vol. 7, PP. 2974-2975), 172, Appellants Ortega. and Acord filed a Notice of Appeal. on April 24, 2009. (JA Vol, 7, PP, 2976), 173, The Clerk noted the transmission of the Notice of

Appeal and the Docket Sheet to the United States Court of Appeals for the Fourth Circuit on April 24, 2009. 174_ (JA Vol, 7, PP. 2977),

The District Court entered an Order granting the

Motion to Withdraw of Attorney Lawrence Laubscher on April 29, 2009. (JA Vol. 7, PP. 2978). 175. Appellee YAP filed a Motion to Strike Response and

Hold Appellant Acord . in Civil Contempt and Order his Incarceration with attached Exhibits on May 1, 2009. 2979-3108), 176. Appellant Acord filed a Reply to Appellee MP's Re(JA Vol. (JA Vol. 7, PP.

sponse to Ortega's Motion for New Trial on May 6, 2009. 7, PP. 3109-3116), 177,

Appellant Acord filed a. Reply to Appellee YAP's Re(JA Vol.

sponse to Acord's Motion for New Trial on May 6, 2009, 7, PP_ 3117-3124), 178.

The Clerk filed a Jurisdictional Notice of premature (JA Vol, 7, PP,

filing of Notice of Appeal on May 8, 2009,

3125),
179. The District Court signed an Order allowing . Appellee

22

YAP to Register its Judgment in the Southern District of Texas on May 1.2, 2009. (JA Vol. 7, PP, 3126-3173),

180. The District Court signed an Order supplementing its Order allowing Appellee YAP to Register its judgment in the Southern District of Texas under 28 U.S.C. 1963 on May 12, 2009, (JA Vol. 7, PP, 3174-3175), 181, Appellant Acord's filed his Opposition to Appellee YAP's Motion to Strike Affidavit as Untimely and Non-Compliant and to Hold Acord in Contempt and Incarcerate Him. in Debtor's Prison, (JA Vol. 8, PP. 3176-3199),

182. Appellant Acord filed a Response in Opposition to Appellee YAP's Motion and Order Pursuant to 28 U.S.C. 1963 to allow Appellee YAP to Register its Judgment in the Southern District of Texas on April 29, 2009. 183, (JA Vol. 8, PP. 3200-3203).

Appellant Ortega filed her Response in Opposition to

YAP's Motion for an Order Pursuant to 28 U.S.C. 1963 allowing Plaintiff to Register its Judgment in the Southern. District of Texas on May 29, 2009. 184, (JA Vol. 8, PP, 3204-3206).

Appellee YAP filed a Sur Reply . to Reply to Response to

Appellee YAP's Motion to Strike Response and to Hold Defendant, John Acord, in Civil Contempt and Order his Incarceration on May 29, 2009, (JA Vol. 8, PP. 3207-3212).

185. The District Court entered an Order denying Appellant Acordis and Ortega's Motion for New Trial and Granting in Part and Denying in Part Appellee YAP's Motion to Strike. and Hold Appellant Acord in Civil Contempt and Order his Incarceration on June 8, 2009, (JA Vol. 8, PP. 3213-3215),

23

186, The District Court entered an. Order granting Appellee YAP's Motion to Allow Registration of YAP's Judgment in the Southern District of Texas on June 8, 2009. (JA Vol. 8, PP. 32163217) 167, Appellant Acord Filed a Motion. for Continuance for his Contempt Hearing on July 1, 2009. (JA Vol. 8, PP, 3218-3220),

168. Appellee YAP filed a Response in Opposition to Appellant Accrd's Motion to Continue on July 1, 2009. (JA Vol. 8, PP. 3221-3224). 189, The District Court signed an Order Denying Appellant

Acord's Motion to Continue and Dir4cting Defendant Acord to Appear in Person for the Show Cause Hearing on July 7, 2009 at 10:00 a.m. on July 6, 2009. 190, (JA Vol. 6, PP. 3225-3226).

The District Clerk filed an Order from the United

States Court of Appeals Denying Appellant Acord's Motion. for Stay on July 8, 2009. (JA Vol. 8, PP, 3227).

191, Appellee YAP filed a Response in Support of its Motion to Strike Response to Hold John Acard in Contempt on July 13, 2009. (JA Vol. 8, PP. 3228-3236). 192. Appellant Acord filed a Response to Appellee YAP's

Supplemental Memorandum in Support of YAP's Motion for an Order of Civil Contempt and Order of Arrest and Incarceration with attachments on July 28, 2009. 193. (JA Vol, 8, PP. 3237-3.240).

The District Court signed. an Order holding Appellant

Acord in Contempt for Alleged Violations of the Court's Order of March 25, 2009 and June 8, 2009; Providing that Appellee YAP was Authorized to File a Certified Copy of the Order with the Clerk

24

of the United States District Court for the Southern District of Texas and Request Issuance of an Arrest Order from the Court, and Directing the US Marshal's Service to Take Defendant Acord into Custody and Precluding Appellant Acord from any Further Use of the Court for Any Reason Until He Purged Himself of the Alleged Contempt on August 6, 2009. 194, (JA Vol. 8, PP, 3241-3242).

The District Court through its Magistrate issued a

paperless order scheduling an attorney inquiry hearing on September 25, 2009 on September 23, 2009. Docket Sheet, 195, The District Court through its Magistrate issued a

paperless order denying Appellee YAP's Request for Emergency Motion to Postpone Attorney . Inquiry Hearing on September 9, 2009. Docket Sheet, 196. Appellant Acord filed a Motion for Hearing to Expunge

Contempt Without Assistance of Counsel and cc Seek. Immediate Release for Medical Treatment on October 21, 2009, (JA Vol, 8, PP. 3243-3246). 197. The District Court signed an Order Scheduling a One

Hour Hearing on Appellant Acord's Motion for a Hearing on October 22, 2009. (JA Vol, 8, PP. 3247). 198. The District Court issued a Wilt of Habeas Corpus Ad (JA Vol. 8, PP. 3248).

Prosequendum on October 28, 2009. 199.

Appellee YAP filed its Response in Opposition to

Motion. for Hearing to Expunge Contempt Without Assistance of Counsel on October 28, 2009. 200. (JA Vol, 8, PP. 3250-32941.

The District Court signed an Order Denying Appellant

Acord's Motion for Hearing to Expunge Contempt Without Counsel

25

Acord's Motion for Hearing to Expunge Contempt Without Counsel and to Seek Immediate Release. for Medical Treatment on November 2, 2009. 201. (JA Vol. 8, PP. 3295), Appellant Acord filed a Notice of Appeal from the

g Order Denying his Motion for Hearing to Expun e Contempt on

November 4, 2009.

(JA Vol. 8, PP. 3296).

STATEMENT OF FACTS

RELEVANT FACTS WHICH ESTABLISH DISTRICT COURT'S ABUSE OF DISCRETION IN ENTERING DEFAULT JUDGMENT.
1. Although the District Court entered a default judgment

against Appellants Acord and Ortega based on Appellee YAP's claims that YAP was prejudiced in preparing the Pretrial Order due to the "non-cooperation" of Appellants, the District Court had scheduled jury trial for June 16, 17, 18, 19, 23, and 24, 2009. 2. (JA Vol. 5, PP. 2306). The District Court had over two months to reschedule the

pretrial conference, and enter a. lesser sanction against Appellants other than default. (JA Vol. 5, PP. 2306),

3, The District Court during the course of the proceedings leading up to its entry of default judgment entered or signed the following orders

ORDERS OF DISTRICT COURT DOCKET NO,

8 23 26 30 31 34

ORDER TYPE
Paperless Order Paperiess Order Order Denying Dismissal For Venue Paperless Order Order Order 26

NUMBER/LOCATION
Docket Sheet Docket Sheet 000182 Docket Sheet 000251 000298

41 42 44 46 47 54 56 57 58 62 70 76 77 11/09/04 87 95 98 108 120 121 122 124 125 127 131 133 136 138 143 148 149 151 154 157 161 163 164 169 173 174 175 176 178 183 185 186 187 189 190 193 195 196 198 203

Scheduling Order Paperless Order Order Setting Deadlines Order Referring to Order Adv. Con. Consent Injunction Paperiess Order Paperless Order Paperless Order Order Extending Time Order Paperiess Order Order Extending Time Oral Order Order Denying Motion Paperless Order Paperless Order Paperless Order Order Referring to Magistrate Order - No Permission to View Order Amending Paperless Order Order Paperiess Order Order Denying Order - Compel Paperless Order Paperless Order Order Staying Paperless Order Paperless Order Order Denying Order Order Paperless Order Paperless Order Paperless Order Order-Scheduling Conference Paperiess Order Paperless Order Paperless Order Paperless Order Paperless Order Order Order Paperless Order Paperless Order Paperless Order Paperless Order Order Order Order Order Order 27

000317 Docket Sheet 000346 000348 000349 000412 Docket Sheet Docket Sheet Docket Sheet 000423 000511 Docket Sheet 000523 Docket Sheet 000621 Docket. Sheet Docket Sheet Docket Sheet. 000902 Not on Docket 000903 Docket. Sheet 000905 Docket Sheet 000911 000913 Docket Sheet Docket Sheet. 000916 Docket Sheet Docket Sheet 000936 000937 000938 Docket Sheet Docket Sheet Docket Sheet. 000980 Docket Sheet Docket Sheet Docket Sheet Docket Sheet Docket Sheet 001024 001025 Docket Sheet Docket Sheet Docket Sheet Docket Sheet. 001037 001045 001047 001.048 001.091

205 212 218 219 230 232 235 244 246 249 260 264 271 277 291 292 295 298 301 303 306 310 317

Paperless Order Paperless Order Order Order Paperless Order Order Paperless Order Order Order Order Memorandum/Order Order Order Order Order Order Order Order Order Paperless Order Paperless Order Order Order

Docket Docket 001E51 001852 Docket 002176 Docket 002308 002308 002369 002602 002615 002974 002978 003213 003216 003225 003227 003241 Docket Docket 003.247 003295

Sheet Sheet Sheet Sheet

Sheet Sheet

Total 84 Orders 4. The initial Rule 11 sanction order merely states that. a sanctions judgment against Appellant Acord "shall" be entered. (JA Vol 5, PP. 2306), since the Rule 11 Sanction Order was interlocutory, Appellant Acord had no present duty to pay the Rule 11 sanctions to Appellee YAP and his failure to do so prior to the entry of default judgment can not be considered as a failure to obey a prior order of the District Court supporting the entry of default judgment even if Acord had sufficient financial resources to do so. 6. Counsel Lawrence Laubscher represented Appellant Ortega

on the date of the March 23, 2009 motions hearing which resulted in entry of default against her. 7. (JA Vol. 9, PP, 3320, LL 4-6).

The District Court entered default judgment against

28

Appellant Ortega based on Laubscher's failure to timely prepare and submit Ortega's portion of the proposed Pretrial Order. Vol. 9, PP. 3321, LL 11-25; P. 3322, LL 1-25). B. The District Court found that Laubscher submitted Appellant Ortega's portions of the pretrial order late and that The deadlines as set by this Court were not met. (GA Vol. 9, PP. 3323, LL 1-4). 9. Attorney Laubscher's late submission allowed Appellee YAP's counsel to claim that he could not adequately prepare the pretrial order because he could not finish his final exhibit list, jury instructions, or affirmative defenses without Ortega's input. (GA Vol. 9, PP, 3323, LL 8-16). (JA

10, Prior to the March 23, 2009 hearing, Appellant Ortega contacted her attorney Laubscher and inquired whether she should attend the proceeding. Laubscher told Ortega her appearance was not required. (GA Vol, 6, PP.2646).

11. After telling his client Ortega she did not have to show up, Laubscher proceeded to blame Ortega for his own procedural default. Laubscher claimed that he had received no payment from Appellant Ortega since a hearinsg "back in November" and apparently believed that non-payment excused his failure to competently represent his client, (GA Vol. 9, PP. 3324, LL 11-15).

12. Attorney Laubscher also attempted to excuse his default by claiming he had "received no instructions from Defendant Ortega." (GA Vol. 9, PP, 3324, LL 13-15).

13. At this point, the District Court allowed Laubscher to proceed with his own defense and to abandon the interest of his

29

client, Thereafter, attorney Laubscher acted in a clear conflict of interest which should have been recognized by the District Court. (JA Vol, 9, PP. 3324, LL 20-25; P. 3325, LL 1-16).

14. Attorney Laubscher did state, half heartedly: With regard to the default, I don't think that's an appropriate type of relief in this situation. (JA Vol. 9, PP. 3325, LL 17-19). 15. Attorney Laubscher also accurately stated that Appel-

lant Ortega had not disobeyed any of the orders of the Court for the past five years. (JA Vol. 9, PP. 3325, DI. 18-25).

16, When attorney Freeman falsely stated that: Mr. Laubscher indicated I think that the first thing . that he said was that since the last hearing in November, he has not had communication at all with Ms. Ortega, Laubscher quickly corrected him: I have spoken with her subsequent to filing the papers that I served on you, so if I said that I haven't spoke to her at all, I misspoke. I have spoken with her, (JA Vol. 9, PP, 3326, LL 1-12), 17. While attorney Laubscher claimed Appellant Ortega had

not "cooperated" with him in preparing her portion of the pre. trial order, the record of the March 23, 2009 motions hearing , at

which default judgment was entered, tells a different story. He was able to submit the pretrial order -- he just didn't do it

18.

Attorney Laubscher never explained why, he could pre-

pare and submit the pretrial order late, but could not do it timely. 19. Nor is there any indication in the record that the

30

portions of the pretrial order untimely submitted by Laubscher were in any way deficient or that any deficiency could be traced to lack of cooperation or input by Laubscher's 86 year old client Ortega21). In light of the record, the District Court's finding: So in acting on this motion, I am attributing what took place in this case directly to Marcella Ortega is clearly erroneous, (JA Vol. 9, PP. 3329, LL 17-19).

21. The District Court's finding: ...It's clearly his indifference to his obligations under this are because he was in effect disabled by his client from being able to perform the obligations that he had to this Court is likewise completely unsupported by the record. An attorney

has no legal or ethical right to exercise indifference to his obligations to the Court which he is required to pursue in order to competently represent a client even if the client is "indifferent" to the case. 22. Laubscher previously represented Appellant Acord and

then withdrew. In her Habeas Corpus Opinion, judge Atlas of the Southern District of Texas refused to find that Acord was pro se in the Maryland action and inferred that Laubscher continued to provide Acord "hybrid" representation after he withdrew. Vol. 8, PP. 3262-3272), 23. Based on Appellant Acord's constant contact and corre(JA

spondence with attorney Laubscher, Appellant Acord had a justified belief that he could adopt the pretrial filings of his coDefendant Ortega which Laubscher had prepared. 24. The record clearly indicates that neither Appellant

31

Acord nor Appellant Ortega received any prior warning from the District Court of its intention to enter default against them before default was actually entered on March 23, 2009, 25. Neither Appellant Acord nor Appellant Ortega committed any conduct before the District Court prior to entry of default, which would warrant that drastic remedy.

RELEVANT FACTS WHICH ESTABLISH DISTRICT COURT'S ABUSE OF DISCRETION IN IMPOSING RULE 11 SANCTIONS.
1. The Rule. 11 Sanction Order signed on November 17, 2008, was interlocutory and not a final judgment. (JA Vol. 5, PP, 23052307) 2. The Order did not direct Appellant Acord to immediately pay the $24,357,00 Rule 11 sanction. (JA Vol, 5, PP. 2306.) 3. The District Court's Sanction. Order states: Ordered that a judgment for sanctions under Rule 11 in the amount of $24,357.00 shall be entered for the Plaintiff, Young Again Products, Inc., against Defendant, John Acord...

(JA Vol. 5, PP. 2306).

4. The District Court's order fails to describe the "numerous factual allegations without evidentiary support" which were the stated basis of the Rule 11 sanction against Appellant Acord, (JA Vol, 5, PP. 2306). 5, In the Memorandum Opinion purportedly supporting the

District Court's denial of Appellant Acord's Motion for Contempt against Appellee YAP, the District Court stated: The individual Defendant, John Acord, whose compliance with orders of this Court has been spotty, at best, filed pro se rambling and almost incoherent pleadings. (JA Vol. 5, PP, 2174). 6.

A thorough review of all of the orders entered by the

32

District Court in this case, whether paperless, written, or entered through its Magistrate, fails to reveal. any order that Appellant Acord had violated, or failed to comply with, prior to the entry of the Rule 11 Sanction. 7, The District Court's statement: Mr. Acord comes before this Court with soiled hands, at best, seeking equitable relief is unsupported by any previous order or finding entered by the Court prior to ,the Memorandum Opinion of August 27, 2008 which was the purported basis for the entry of the Rule 11 sanction, (JA Vol. 5, PP. 2174). 8. claimed: This second motion refers to numerous attadhments,but no exhibits were filed with the Clerk of this Court, nor were any provided to this member of the Court. As with his first motion, the second motion is equally incoherent and unsupported by exhibits referenced therein. Accordingly, and for the reasons set forth in the Plaintiff's Opposition (Paper No. 228), Mr. Acord's second motion will, by separate order, also be denied. (JA Vel. 5, PP. 2175), This finding by the District Court -- that Appellant Acord did not submit attached exhibits to his Motions to Enforce the previous Consent Injunction (which enjoined Appellee YAP and its principal, Roger Mason, from disparaging or defaming the other parties to this case) is clearly erroneous and unsupported by the record. The record contains specific references to exhibits attached to Appellant Acord's motion and supplement which, apparently, were never reviewed or even seen by the District Judge who entered the Rule 11 sanctions. (SA Vol. 3, PP. 1221, Dkt. 208; Vol. 5, P. 1935; Dkt. No. 226). Appellee The District Court in its Memorandum Opinion also

33

YAP, through its counsel, admitted that such "emotionally charged" disparaging emaiis which were attached as Acord exhibits had been sent by Mason in their opposition to Acord's Motion for Stay. 9. (JA Vol. 3, PP. 1100),

Appellant Acord's first. Motion for Contempt brought

against Appellee YAP for the conduct of its principal, Roger Mason, presented attached exhibits which included disparaging letters sent by Roger Mason. The letter which
u

Gubi" received

from Roger Mason was sent by email on the date indicated. Roger Mason admitted authorship of the defamatory letter under oath in the Houston Bankruptcy proceedings Appellee continually refers to (JA Vol. 3, PP. 1308-1311, Vol. 5, PP, 1935; 2241-2242, Dkt, No, 226), 10. In an effort to counter Appellant Acord's Motion for a

Stay of the Maryland proceedings based on Roger Mason's threat to third parties, to have Appellant Acord incarcerated and/or criminally prosecuted, Appellee YAP filed a. response to Appellant A p ordts Motion for Stay in which Appellee YAP admitted that Mason had sent the "Gubi" letter and claimed that the letter was not sufficient ground to provide Appellant Acord with a basis to claim his Fifth Amendment privilege against self-incrimination or to obtain an abatement until the criminal threat was resolved, (JA Vol. 3, PP, 1057-1059; 1100) 11, The Consent Injunction which Appellant Acord sought to enforce by contempt against YAP and its principal., Roger Mason, specifically prohibited the correspondence Mason sent to third person disparaging and defaming Appellants, Acord and Ortega, and

34.

the dismissed. Defendant, Young Again Nutrients, LUC. (JA Vol, 1, PP * 414) 12. The Consent Injunction remained in force and effect, and binding on all parties, including YAP and its principal, Roger Mason, from the date of its entry until, at :least, the date the District Court entered final judgment on March 25, 2009. (JA Vol. 6, PP, 2615-2618). 13, The Consent Injunction that Appellant Acord moved to

enforce through the filing of his Motion for Contempt and Supplemental Motion. for Contempt was in force and effect throughout the pendency of the case irrespective of whether it was a preliminary Injunction order or a final judgment granting permanent injunction. (JA Vol. 1, PP. 414-418). 14. The "Gubi" letter and other exhibits which YAP's principal, Roger Mason, sent to third persons disparaging and defaming Appellants, Acord and Ortega, and their business clearly violated the terms of the Consent Injunction, 15, Acord's claim that Appellee YAP and its principal Mason had violated the terms of the Consent Injunction could not be frivolous or without any basis in law or fact. in light of Mason's and YAP's counsel's admissions that those "emotionally charged" disparaging emails attached to Acord's motions as exhibits were being sent to third parties and business associates. (JA Vol. 3, PP, 1100), 16. The disparaging letters violated the following terms on the face of the Consent Injunction: Further ordered, that all parties to this case including their respective officers, agents, servants, em35

ployees, and those acting in concert or participation with them are PERMANENTLY ENJOINED AND RESTRAINED from making any disparaging or defamatory remarks about one another their respective businesses to any third parties unless protected or privileged pursuant to legal proceedings. Mason's accusation of criminal conduct were both disparaging and defamatory. (CA Vol. 1, PP. 416),

RELEVANT FACTS WHICH ESTABLISH DISTRICT COURT'S ABUSE OF DISCRETION IN HOLDING APPELLANT ACORD IN CONTEMPT AND INCARCERATING HIM.
Appellee YAP and its counsel Freeman freely admitted that Appellant Acord had no assets and that his mother or brother had previously paid any sanctions imposed against him in discovery disputes "in other jurisdictions." 4-12), 2, Appellee YAP also admitted that Newtrients 21, a supple(CA Vol. 9, PP, 3316, LL

ment business similar to "Supplement Spot" which. Appellant Acord had worked for until he was terminated had been formed and started after the Supplement Spot Bankruptcy sale. (JA Vol. 9, PP. 3316, LL 21-25; P. 3317, LL 1).
. 3, The District court based its finding that Acord was able

to pay a $23,457 Rule 11 sanction on YAP's counsel supposition that if Acord could afford "to arrange for payment of his counsel in Texas," he could afford to pay the sanction. (CA Vol. 9, PP. 3317, Lb 23-25), 4. The District Court in finding Appellant Acord in contempt acted solely on YAP's counsel's representations. No evidence or sworn testimony was offered. The District Court failed to make its own findings of fact and "adopted" Attorney Freeman's statements, (CA Vol. 9, PP, 3317, LL 22-25; P. 3313, Lb 1-5). 36

5.

The District Court's statement:

The Court is painfully familiar over the years that this case has been pending in this Court and also aware as a result of the filings in other Courts that were just mentioned by Mr. Freeman that Mr. Acord, in spite of his claims of poverty, certainly has been able to get access to substantial sums of money for a variety of purposes through whatever means he may use including, but not limited to his mother, is totally unsupported by any sworn testimony or evidence admitted or offered at the March 23, 2009 hearing on Appellee YAP's Motion for Contempt. 1-25). 6. Appellant Acord eventually filed a financial affidavit (CA Vol. 9, PP. 3316, EL 6-25; P. 3319, EL

as the District Court ordered which remains under seal. The District Court held Appellant Acord in contempt in the absence of any direct testimony or other evidence refuting the affidavit. (CA Vol. 9, PP. 3319).

RELEVANT FACTS CONCERNING INSUFFICIENCY OF EVIDENCE TO SUPPORT $3,832,832.40 DEFAULT JUDGMENT:

1. Appellee YAP produced no evidence supporting the entry

of a $3,832,832.40 default judgment other than the statement of

. its counsel Freeman at the motions hearing on Monday, March 23,

2009, and the statements contained in Appellee YAP's expert witness reports. (JA Vol. 6, PP. 25826-2601; JA Vol. 9, PP. 3304, EL 9-19), 2. In addressing the District Court at the default judgment hearing, YAP 's attorney Freeman could point to no previous order which Appellant Acord had not complied with other than the interlocutory order stating that a. Rule 11 sanction judgment "shall" be entered against Appellant Acord. 37 (JA. Vol. 9, PP, 3308, LL 5-

13).
3, While the District Court imposed a default judgment against Appellant Acord based on claims that he failed to cooperate in the pretrial process, Appellant Acord announced his adoption of the portions of the Pretrial Order filed by Ortega's attorney, Lawrence Laubscher, The District Court refused to recognize Acord's right, under the civil rules, to adopt the pleadings of his co-Defendant which had been prepared, in a dilatory fashion, by Attorney Laubscher, (JA Vol. 9, PP. 3304, LL 23-25; P. 3305, LL 1-8), 4. Neither Appellee YAP nor the Court objected. to Appellant

Acord's telephonic appearance at the March 23, 2009 hearing. (JA Vol, 9, PP. 3299, LL 13-20). 5. The District Court purported to enter the default judg-

ment under Rules 16 and 37(b) (2) of the Federal Rules of Civil Procedure. (JA Vol, 9, PP. 3303, LL 12-23),

6, The District Court did not entertain or receive any sworn testimony. The District Court determined the amount of attorney's fees awarded to Appellee YAP based on submission of affidavits. 7, (JA Vol, 9, PP. 3309, LL 12-14). Attorney Freeman's representation to the District Court

that the previous interlocutory Rule 11 sanction order had become a final judgment was erroneous and not supported by the record. (JA Vol. 9, PP. 3312, LL 4-11). 8. Appellee YAP's counsel's comment: We have asked in our the sanction within so, that this Court to that contempt and Motion to Require Mr. Acord to pay five days, and if he fails to do issue a civil commitment relating hold Mr. Acord in custody until he 38

does pay that sanction that the Court has ordered admits that Appellant Acord had never been ordered to pay the Rule 11 sanction immediately prior to the date default judgment was announced or entered. 9. (JA Vol. 9, PP. 3313, LL 1-5).

The District Court relied solely on the remarks of

counsel, which are not. evidence, and the opinions of experts contained in the expert witness reports, in awarding. $3,832,832.40 in unliguidated trademark damages to Appellee YAP, 10. The pleadings and evidence do not support the

$3,832,632.40 awarded in the default judgment.

RELEVANT FACTS CONCERNING THE DISTRICT COURT'S ABUSE OF DISCRETION IN REFUSING THE TRANSFER OF VENUE:
1. At the time suit was filed Appellant Acord was the manager of Young Again Nutrition, LLC. (JA Vol. 1, PP. 00074). Appellant Acord resided at 9022 Deer Lodge Road, Magnolia, Texas 77354. (JA Vol. 1, PP. 00074).

2. Young Again Nutrition had its principal place of business at 7301 FM 1488, No. C, Magnolia, Texas 77354. (CIA Vol. 1; PP. 00074), 3. Prior to the formation of Young Again, Appellant Ortega

, entered into an individual agreement with Plaintiff, Young Again

Products, Inc., for the purchase and resale of :products which Young Again Products manufactured. 4. (JA Vol. 1, PP. 74).

Young Again Nutrition maintained several internet web

sites for its business including youngagain-com, youngagain2000.com , youngagainnutrients.com , and youngagain.info, (JA Vol. 1, PP. 74). 5. Young Again Nutrition did not offer retail sale of 39

products through a traditional "brick and mortar" establishment. (SA Vol. 1, PP. 0075). 6. Young Again Nutrition promoted its Internet retail

services through presence on the Internet and Internet search engines, (JA Vol. 1, PP. 000075). Through its Internet presence, Young Again Nutrition made sales to consumers in fifty states within the United Stales. (JA Vol. 1, PP ' . 000075). 8. Through its Internet presence Young Again Nutrition made

sales to consumers in sixty-three foreign countries, (JA Vol. 1, PP. 000075). 9. Only .02%- of Young Again Nutrition's total Internet

sales were conducted with and/or shipped to Maryland customers. (CIA Vol, 1, PP. 000075). 10. All commercial activity regarding Young Again. Nutri-

tion's Internet sales was conducted or transacted in the State of Texas, (JA Vol. 1, PP. 000075),

SUMMARY OF THE ARGUMENT

Aoord and Ortega participated in a lengthy discovery process and obeyed. all Court orders up to the date the District Court entered the default judgments. Appellant Acord was forced to represent himself pro se after his prior attorney, Lawrence. Laubscher, withdrew. Although the District Court entered a $23,457 Rule 11 sanction against Acord, the order was interlocutory and the District Court did not order immediate payment of the sanctions until

40

after entry of default. Attorney Laubscher continued to represent Appellant Ortega after he withdrew from representing Appellant Acord. Appellant Acord adopted the pretrial order submissions attorney Lawrence Laubscher submitted on behalf of Appellant Ortega. The District Court refused to recognize Appellant

Acord's right to dc so. Attorney Laubscher represented Appellant Ortega, an eightysix year old woman, throughout the District Court: proceedings. Appellant Ortega wrote an email to attorney Laubscher inquiring whether she should attend the May 23, 2009 motions hearing. Laubscher informed her that her presence was not needed. Appellant Acord attended the May 23, 2009 motions hearing by telephone. The District Court refused to recognize Appellant Acord's right to adopt attorney Laubscher's pretrial pleadings which Laubscher which submitted on behalf of Appellant Ortega. Citing Appellant Acord's alleged "non-cooperation" in the pretrial process, the District Court dismissed Acord's counter-claims against Appellees and entered default judgment against Acord in the amount of $3,832,832,40. Although he filed an opposition. to Appellee YAP's Motion for Default against Appellant Ortega (which blamed Appellant's counsel for his late filing of Appellant Ortega's portion of the pretrial order) when he appeared at the hearing, Attorney Laubscher blamed his own procedural default on Appellant Ortega 's non-payment and non-cooperation. The District Court ultimately found that Attorney Laubscher's indifference to his legal obi...1.ga-

41

tions were caused by Appellant Ortega's non-payment and failure to cooperate. The District Court then entered a default judgment against Appellant Ortega in the same amount as the default judgment against Appellant Acord, The District Court failed to warn Appellants Acord and Ortega that a default judgment would be rendered against them if theit portions of the pretrial order were not timely submitted, Ortega was not sanctioned by the District Court before entry of the default judgment, The District Court abused its discretion by imposing the harsh remedy of default judgment without any warning or imposition of lesser sanctions, The District Court entered a Consent Judgment which "permanently enjoined" all parties to the suit from making disparaging or defamatory remarks about the other parties or their businesses, Appellee YAP, through its principal, Roger Mason, ignored this injunction and sent disparaging and defamatory correspondence to third persons who were business associates of Appellant Acord, Appellant Acord filed a Motion to Stay the Maryland Civil proceedings based on the threats which Roger Mason inserted in the illicit and disparaging correspondence he sent to the third parties. Appellant Acord filed a Motion to Stay the Maryland litigation until the threat of criminal prosecution or incarceration which Mason made in the letters was resolved- In a response to Appellant Acord's Motion for Stay, Appellee Mason, through his counsel, admitted that he had authored and sent the "Gubi" letter and claimed that the disparaging and defamatory emails expressed

42

opinion rather than fact and that therefore they could not serve as a good faith basis for Appellant Acord's claim of Fifth Amendment privilege against further discovery. Appellant Acord then filed a Motion for Contempt and Enforcement of Consent Injunction against Appellee YAP, citing the violation of the injunction by YAP's principal, Mason, and an additional Supplemental Motion for Contempt. Both motions had

attached exhibits. The District Court erroneously found in its Memorandum Opinion that both motions lacked attached exhibits or any other support and were frivolous and filed for the purposes of harassment. The injunction prohibiting Appellee YAP and its principal Mason from disparaging Appellants was in force and effect at the time Appellee YAP's principal Mason, and Apbellee's attorneys admitted that the "Gubi" letter was sent. In light of Mason's disparaging and defamatory correspondence to Appellant Acord's third party business associates, in violation of the injunction Appellant Acord's Motion for Contempt could not be frivolous. The District Court's $24,357.00 sanction against Appellant Acord for filing his two Motions for Contempt was an abuse of discretion. The District Court's findings that both motions were unsupported by any exhibits or attachments was clearly erroneous in light of the record. When the District Court held Appellant Acord in contempt for failing to pay the Rule 11 sanction of $24,357.00, the District Court had no sworn testimony or reliable documentary evidence before it. The District Court found Acord was able to pay the

43

sanction. imposed because Appellee YAP's counsel Freeman claimed Accrd's mother and brother had always paid his previous sanctions and that Acord had arranged for payment of his Texas counsel's legal fees. The District Court relied on the statements of Appellee's counsel Freeman which were not evidence. The District Court relied solely on statements of Appellee's counsel Freeman and third party payments of Appellant Acord's alleged debts in the past in making a finding that Appellant Acord could afford to pay the $24,347.00 sanction. Neither the statements of Appellee's counsel nor the stale financial evidence submitted in Appellee's exhibits was sufficient evidence to support the District Court's findings of present ability to pay. The remedial contempt sanction in the amount of $24,347.00 is based on a Rule 11 sanction which must be reversed. Reversal of the Rule 11 sanction mandates reversal of the contempt finding against the Appellant. If the Rule 11 sanction is deemed invalid and set aside, the civil contempt finding based thereon can not stand and must be reversed. The District Court received no evidence in support of its default judgment in the amount of $3,832,832,40 other than the statements of Appel lee's counsel and statements contained in Appellee YAP's expert witness reports. Neither the statement of counsel nor the unsworn opinions of expert witness are competent evidence to prove a default judgment in the amount of $3,832,832.40. A default hearing on the amount of unliquidated damages should have been held and the Court's award of $3,832,832.40 must be reversed based on lack of sufficient evi-

44

dent iary support. Finally, the District Court erred when it denied Appellants' Motion to Transfer Venue. There was no proof, or even an allegation, that Appellee YAP was a Maryland corporation in good standing. YAP 's corporate principals resided in the Eastern District of North Carolina at the time of filing suit. Acord and Ortega resided in the Southern District of Texas. The evidence relating to YAP's claims was locate din Texas or North Carolina.

ARGUMENTS
IV.

1. THE DISTRICT COURT ERRED IN IMPOSING DEATH PENALTY SANCTIONS FOR ALLEGED VIOLATIONS OF PRETRIAL AND/OR PRETRIAL ORDER PROCEDURE UNDER RULES 16, 26, AND 37, F.R.Civ.P. STANDARD OF REVIEW
The Fourth Circuit reviews a District Court's grant of sanctions under Rule 37, including the imposition of a default judgment., for abuse of discretion_ Anderson v. Advancement, Etc. of American Indians, 155 F.3d 500 (4th Cir. 1998). Citing Wilson v. Volkswagen, of Am., Inc., 561 F.2d 494, 505-06 (4th Cir, 1977).

DISCUSSION OF THE ISSUE

The District Court relied on Rule 37 F.R.Civ.P, to enter default judgments under Rule 16. The Fourth Circuit has developed a four-part test for a District Court to use when determining what sanctions to impose under Rule 37. The Court must

determine: (1) whether the non-complying party acted in bad faith; (2) the amount of prejudice that non-compliance caused the adversary; (3) the need for deterrence of the particular sort of

45

non-compliance; and (4) whether less drastic sanctions would have been effective. Wilson at P. 503-05. The Panel in Anderson noted that; The District Court warned the foundation in no uncertain terms on both May 1, and again on May 21 that failure to comply with the Court's order would result in default judgment. thereby complying with the Fourth Circuit's requirement stated in Hathcock v. Navistar Internat'l. Trans2, Corp, 53 F.3d 36, 40 (4th Cir. 1995) that the District Court must make the threat of entry of default judgment clear. Anderson at P. 504. Although this Court of Appeals in Hathcock agreed with the general proposition that the default judgment power under Rule 37 F,R,Civ.P. applies to Rule 16, in limited circumstances the Court also observed; In the case of default, the 'range of discretion is more narrow' than when a Court imposes less severe sanctions... In. particular, .this Court has emphasized the significance of warning a Defendant about the possibility of default before entering such a harsh sanction. As was recently noted in a slightly different context, a party 'is entitled to he made aware of the drastic consequences of failing to meet the Court's conditions at the time the conditions are imposed, when he still has the opportunity to satisfy the conditions and avoid the sanction.' Hathcock at P. 40. The Panel cited Lolatchv v. Arthur Murray, Inc 816 F.2d 951 (4th Cir. 1987) which reversed a default sanction as an abuse of discretion and held that the failure to warn was a "salient fact" leading to the reversal. The Panel in Hathcock. also listed another factor to be considered -- the prejudice to the discovery party resulting from 46

the failure to produce or comply and whether such failure materially affected the substantial rights of the adverse party* Quoting 8 Wright and Miller, Federal Practice and Procedure, 2284 at 767-72. As a final factor, the Panel in Hathcock encouraged District Courts to Initially consider imposing sanctions less severe than default where a less severe sanctions had not yet been imposed. Here, as in Hathcook, the District Court imposed no lesser sanction as a preliminary deterrent before it entered default judgment. The record is devoid of any imposition of Sanctions prior to the entry of default, There were no specific orders compelling completion of the pretrial order before the harsh sanction of default was imposed. There was no incurable prejudice to the Appellee which the imposition of less severe sanctions could not have cured
* . The trial setting was over eighty (80) days away.

There was no showing that the pretrial hearing could not be rescheduled fax enough in advance to save the trial setting, Further, there was no proof that the trial setting itself could not be rescheduled, if necessary, without prejudice to the Appellee or other litigants scheduled to appear before the District Court, Appellant Ortega's statement that Ortega had "obeyed every Court order for five years" went unchallenged at the default hearing, Appellee YAP could point to only one interlocutory order which Appellant Acord had not yet complied with - the $24,3537 Rule 11 sanction -- and that order did not require im-

47

mediate payment. Neither Appellant received any form of specific warning that the Court was considering imposition of default judgment based on Attorney Laubscher's failure to timely prepare and file Appellant Ortega's portions of the pretrial order or Appellant Acord's efforts to adopt Ortega's submissions. The District Court's default judgment fails to satisfy any element of this Court's four-part test. Additional factors mandate reversal. The District Court's

default judgment discretion is more narrow than the discretion. accorded to other discovery orders. As this Court stated in.

Mutual Fed- aav. and Loan v. Richards and Assocs., 872 F.2d 88, 92 (4th Cir. 1989): When the sanction involved was judgment by default, the District Court's range of discretion is more narrow because the District Court's desire to enforce its discovery orders is confronted head-on by the party's rights to a trial by jury and a fair day in Court. As we recognized in Wilson v. Volkswagen of America i, Inc., 561 F.2d. 494, 503-04 (4th Cir. 1977), cert. denied, 434 U.S. 1020, 98 S,Ct. 744, 54 L.Ed.2d 768 (1978), those competing interests require the application of a tourpart test...such an evaluation will insure that only the most flagrant case where the party's non-compliance represents bad faith and callous disregard for the authority of the District Court and the Rules, would result in extreme sanction of dismissal or judgment by default. A careful analysis of the record contained in the Statement of
p Facts belies any claim that either Ap ellant acted in such a

manner that the imposition of default. judgment was warranted under the above-tests. As noted by other Courts, dismissal with prejudice for failure to obey a scheduling or other pretrial order is a sanction of last resort. Goforth V. Owens, 766 F.2d 1533, 1535 (11th Dir. 1985). Where pro se litigants are in-

48

volved, a dismissal for failure to comply with the District Court's pretrial scheduling order should not be granted unless the violation is wilful. Verdi v. ICiry, No. 7-3-2008 (N)D, Ga., 7-3-2008). Citing Goforth, supra. Although the factors and tests laboriously discussed in Hotach and Mutual, are more than sufficient to mandate reversal, examination of the entire record in this case reveals even more support for a new trial. The District Court denied. Appellant Acord his right under the Federal Civil Rules to adopt the pleadings of Appellant Ortega even though, at the time, a Habeas Court found that her Attorney Laubscher was providing "hybrid represen' tation." The District Court opined that it was "far too late to

allow such adoption," This legal ruling was clearly erroneous, A party to a civil case has the right to adopt the pleadings of a co-party where they are applicable to his own case and, though he may be bound thereby as to any deficiencies, he also has entitlement to any of the benefits. See Sanders v. John Nuveen and Co..., Inc., 463 F, 2d 1075, 1077 (7th Cir. 1972). (Bank's motions were not accompanied by any pleadings in the Rule 7(a) sense of complaints or answers, or by documents seeking to adopt pleadings already on file.) (S.D.N.Y. 1991). In Re; Chateaugay Corp., 126 B.R. 165, 169 (All Plaintiffs filed objections or adopted

pleadings with respect to the P.D.G.C. claims....") Compounding its error, the District Court allowed Ortega's Attorney haubscher to abandon his client's interest in the middle of a sanctions hearing and proceed, in gross conflict of interest, to blame Ortega for his own breach of his professional

49

obligations -- the timely preparation and filing of the Pretrial Order. Making the situation even more egregious, Attorney Laubscher had informed his client Ortega that her attendance at the hearing was not required. The Sixth Circuit in j,Ruben,

825, 985 5.2d 977 (6th dr. 1987) commenting on similar attorney efforts to shift the blame to their clients for their own incompetence cautioned: The imposition of attorney's fees against Rathbun must be reversed if only because she never had an adequate Rodeway opportunity for a hearing on the record_ 765-767, 752 Express, Inc. V. Piper . supra, 447 U.S. 100 S.Ct, 2455, 2463-65, 65 L.Ed.2d 488 (1980). While briefs were filed on Rathbun's behalf, she was clearly abandoned by her attorneys at the hearing itself. This points out an inherent problem in the sanction hearing addressed to both the Plaintiff and her attorneys, where the Plaintiff and attorneys are not separately represented. See Michigan National Bank v. Kroger Co., 619 F.Supp, 1149, 1162 (E.D.Mich- 1985). In this case, although Rathbun's attorneys advanced no argument for her at the hearing, at least their positions were essentially similar, to-wit, that the litigation, was factually justified. The attorneys did not attempt to blame Plaintiff; instead, Lester graciously tried to accept all responsibility for any problems with the case, Thus, while we express no opinion on the exact circumstances in which a party should be represented separately from her attorneys upon the consideration of sanctions, we nevertheless note that this is a problem to which District Judges should be alert. Here, unlike in Ruben, the worst fears of the Sixth Circuit have come to pass. Laubscher blamed his absent client for his own failure to comply with the Court's pretrial order and the legal and ethical standards governing competent federal practice. Those standards differ little irrespective of whether an attorney practices in Cincinnati or Richmond. Not only did the District Court tolerate this practice, it openly condoned it. Attorneys may not be permitted to act in

50

clear conflict of interest and abandon their clients at crucial hearings, allow the client to suffer a default based on their ineptitude., and then withdraw to the accolades of the Court. The conduct of Ms. Ortega, and because of her indifference to this case, her counsel who is a respectable member of the Bar of this Court, and I don't fault him* but it is clearly his indifference to his obligations under this or because he was in effect disabled by his client from being able to perform the obligations that he had to this Court. (JA Vol. 9, PP. 3329, LL 10-16), Attorney Laubscher and the District Court were apparently unmindful of the admonition that an attorney claiming that his client is non-cooperative should withdraw at the first opportunity. As stated in Boards of Tr
*

of Ohio Bene, Pro. v. Environ-

mental Affairs Mgmt., (S.D. Ohio, 8-16-2007): While the Court is sympathetic to Mr. Mastrantonio's circumstances, the Court notes that the trial date was set on February 9, 2007. This gave Mr. Mastrantonio at least six months to move to withdraw if his clients were failing to pay for their defense or difficult to communicate with. The affidavit does not indicate that these attorney-client problems are new to their relationship; rather, they appear to be on-going because they involve failing to pay for certain discovery costs. Nbr is a client's non-payment of fees a ground for excusing an attorney's failure to practice law consistent with the standards required of the legal profession. See Daniels v. U.S., 54 F. 3d 290 (7th Cir. 1995). (Non-payment of legal fees does not establish a conflict of interest of the type which would establish ineffective assistance; lawyers are required to provide zealous advocacy regardless of a criminal Defendant's failure to pay legal tees. United States v. Wright, 845 F.Supp, 1041, 1073 (D.N.J, 1994) aff'd- 46 F.3d 1120 (3d Cir. 1994). The right to

withdraw for non-payment by a client is limited. State v. Emma51

nuel, 139 N.H. 57, 64 A.2d 53 (1994).

A client should be given

an opportunity to be heard over any dispute with regard to fees. As the Sixth. Circuit noted in another case, Garner v. Cuyahoga County. Juvenile Court, 07-3602 (6th Cir, 1-22-2009): Courts must be particularly careful in conducting hearings to determine whether sanctions should imposed against both Plaintiffs and their attorneys for bringing frivolous claims. These situations are especially prone to raise conflicts of interest because each has an incentive to blame the other for bringing the frivolous claims at issue. In addition, such cases create an incentive for attorneys to abandon their clients in order to avoid personal liability, Citing Ruben at P. 985. When the offending conduct of an attorney concerns the scope or quality of the counsel's competence -especially when the material is beyond the understanding of the client or when the client is unaware of the attorney's wrongful conduct -- counsel alone should be sanctioned. 5 A. Wright and Miller, Federal Practice and Procedure, 1336.2, 662-663 (3d Ed, 2004). In Re: Central European and Industr. Develop. Co., No, 113-2009 (N,D.Cal,) This Court weighed in on the subject and

ruled in conformity with the Sixth Circuit in Ruben. in Hillig v. C.I.R., 916 F.2d 171 (4th Cir. 1990). In considering a similar

scenario to the one presented here, the Panel in Hillig opined: A dismissal sanction is usually inappropriate when it unjustly penalizes a blameless client for the attorney's behaviour. See Dove, 569 F.2d at 810; McCargo Hedrick, 545 F.2d 393, 396 (4th Cir. 1976); Reizakis, 490 F.2d at 1135; See also Shea v. Donohoe Constr, Co., 795 F.2d 1071, 1077-79 (D.C.Cir. 1986). There is no evidence in this record that the taxpayers were responsible for their attorney's non-compliance. Attorney Laubscher's efforts to shift the blame to his 86-year old client for his failure to timely prepare and circulate the pretrial order to opposing counsel was unethical as well as 52

ineffective, The record does not support Laubscher's claim, or any finding by the District Court, that Laubscher's 86-year old client had any ability to prevent Attorney Laubscher from preparing her portions of the pretrial order, much less, timely circulating or filing them. The fact that Laubscher was able to circulate the portions of the pretrial order late proves that he could have circulated them timely only five days earlier. The

gross conflict of interest displayed by this record is grounds, standing alone, to set aside the default judgment as to Appellant. Ortega. Hillig noted that a. dismissal under Rule 37(d) standards is even harder to uphold than other dismissals and requires a record of had faith. Appellant Ortega submitted a copy of the letter from Attorney Laubscher informing her that she was not required to attend the pretrial hearing as part of the evidence supporting her Motion for New Trial. If the District Court had any doubts concerning the fairness of Attorney Laubscher's representation or his conflict of interest at the March 23, 2009 default judgment hearing, they should have been dispelled after the Court reviewed this evidence and the Motion for New Trial should have been granted. The extreme circumstances required by this Court in Reizakis v. Loy, 490 F.2d 1132 (4th Cir, 1974) were not present
. with respect to either Appellant. See also Jones v .

Graham, 709

F.2d 1457 (11th Cir, 1983).

The default judgments entered

against Appellants Acord and Ortega must be reversed.

53

2.

THE RECORD DID NOT CONTAIN SUFFICIENT EVIDENCE TO SUPPORT THE AWARD OF A $3,832,832.40 DEFAULT JUDGMENT.

STANDARD OF REVIEW
The Fourth Circuit reviews a District Court's grant of sanctions under Rule 37, including the imposition of a default judgment for abuse of discretion. Wilson at P. 505-06.

Whether

the pleadings, record, and evidence, support the entry of a default judgment and whether the evidence is legally sufficient to support a default judgment are determined de novo.

DISCUSSION OF THE ISSUE

Here, as in Anderson, supra, the District Court entered a default judgment awarding over a million dollars in damages as a sanction for alleged pretrial misconduct, In Anderspn, one of the parties contended: That the District Court's decision to enter a default judgment was not supported by record evidence. Noting that the record and evidentiary references which could be derived therefrom might be insufficient to support such an award without a hearing, the Court of Appeals carefully examined the evidence and found admissions which cured any evidentiary deficiencies, The Court noted, however: We do, of course, recognize that in some circumstances the District. Court entering a default judgment may award damages ascertainable from the pleadings without holding a hearing, Here, no evidence supports the $3,832,832.40 default judgment other than statements of counsel, which are not evidence, and opinions in an expert witness report which were not under oath, The Appellee's Complaint does not state an amount of damages which could be admitted.
(JA

Vol, 2, PP. 939-967). 54

The expert witness report on which the District Court apparently relied to enter the $3,332,832.40 default judgment was hearsay and does not even qualify as sworn evidence since it is not verified. Underscoring its error, the District Court required Appellee's attorney Freeman to submit a sworn affidavit to support entry of judgment for attorney's fees. Since the underlying damages on which the attorney's fees are based must he reversed due to lack of any competent evidence, the attorney's fees, which are based on a finding of such damages must, likewise, be reversed. The $3,832,832.40 in damages granted against Appellants Ortega and Mord under the default judgment must be reversed since such amount is unsupported by the pleadings, record, and any competent evidence.

3.

THE DISTRICT COURT ERRED IN GRANTING RULE 11 SANCTIONS BASED ON APPELLANT ACORD'S MOTION FOR CONTEMPT WHICH RAISED THE "GUBI H LETTER AS A VIOLATION OF THE TRIAL COURT'S PREVIOUS INJUNCTION ORDER,

STANDARD OF REVIEW
This Court of Appeals reviews a District Court's imposition of Rule 11 sanctions for abuse of discretion. In Re: Bees, 562 F.3d 284, 286 (4th Cir. 2009). Citing Hunter v. Earth Grains Co. Bakery, 281 F.3d 144, 150 (4th Cir. 2002). A Rule 11 sanction

which is not imposed sua sponte must comply with Rule 11's 21-day safe harbor provision. Hunter, 281 7,3d at 151. Rule 11 sanction orders are clearly interlocutory. In Re: Bryson, 406 Fs3d, 284, 288 (4th Cir, 2005).

DISCUSSION OF THE ISSUE

We begin the Discussion of this Issue with the legal premise

55

that the parties statements in pleadings are evidence which may be binding or non-binding. The rule regarding treatment of prior statements in pleadings as evidence was described by the Seventh , Circuit in Contractors Utility Sales v. Certain-Teed Products 638 F.2d 1061, 1083 (7th Cit. 1981) as follows: Although prior pleadings cease to be conclusive judicial admissions, they are admissible in a civil action of the as evidentiary admissions. McCormick noted in Law of Evidence, 633-34 (2d Ed. 1974). It is Raulie v. United States, 400 F.2d. 467, 526 (10th Cit. 1968), quoting Kunglig Jarnvagsstyrelsen v. Dexter and Caxlaenter, 32 F.2d 195, 196 (2d Cir.) cert. denied, 260 U.S. 579, 50 S.Ct. 32, 74 L.Ed. 629 (1929): When a pleading is amended or withdrawn, the superseding portion ceases to be a conclusive judicial admission; but it still remains as a statement once seriously made by an authorized agent, and as such it is competent evidence of the facts stated, though controvertible, like any other extra-judicial admission made by a party or his agent. This rule has never been seriously challenged in any of the Federal Circuits, See also Eastern Natural Gas Corp. v. Alcoa, 126 F.3d 996 (7th. Cir. 1997) and Bruce E. M. v. Dorothea A. M 455 A,2d 866 (Del, 1983), The application of the above principle to this case is clear, Appellee YAP's statements in various pleadings are evidence which authenticate the statements of YAP's principal, Roger Mason, which, in turn, are binding on Appellee YAP in making the determination of whether Appellant Acord had reasonable grounds to believe that his Motion for Contempt brought to enforce the terms of the District Court's Consent Injunction mutually prohibiting disparaging and defamatory remarks by the parties were well grounded in fact and in law and non-frivolous. Rule 11 F.R.Civ,P, in its current form, states:

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(b) Representations to the Court. By presenting to the Court a pleading, or written motion, or other paper -whether by signing, filing, or submitting, or later advocating it -- an attorney or unrepresented party certifies that to the best of the person's knowledge, information, and belief, formed after an inouiry reasonable to the circumstances: (1) is not being presented for any improper purpose, such as to harass, cause unnecessary delay, or needlessly increase the cost of litigation; (2) The claims, defenses, and other legal contentions are warranted by existing lam or by a non-frivolous argument for extending, modifying, or reversing, existing law . , or for establishing new law; (3) The factual contentions have evidentiary support or, if specifically so identified, will likely have evidentiary support after a reasonable opportunity for further investigation or discovery; and (4) denials of factual contentions are warranted on the evidence or, if specifically so identified, are reasonably based on belief or a lack of information. The District Court entered a prior Consent Injunction. That

injunction prohibited the parties to the case from making disparaging or defamatory remarks about other parties or their businesses. Appellee. YAP's principal Mason sent disparaging letters to Appellant Acord and Ortega's business associate, Robert Cub!, and other third parties, accusing Appellant Acord of criminal conduct. Acord brought a Motion for Contempt and later filed a supplement to the Motion for Contempt seeking to enforce the terms of the District Court's Consent Injunction prohibiting such conduct. While the legality of that Consent Injunction may be doubted based on standing authority of this Court of Appeals, as well as that of the Supreme Court, the injunction was not appealed and was in full force and effect at the time Appellant

ACard filed. his Motion for Contempt which was the purported basis

for the District Court's sanction order. Injunctive orders of the District Courts, like contempt orders, irrespective of whether they are later held illegal or unconstitutional, must be obeyed until they are reversed. CPC internatl., Inc, v. Ski_gpv. Inc., 214 F.3d 456 (4th Cir. 2000) (Over breadth of injunction limiting speech raises serious First Amendment concerns.) Compare Nissan Motor Co. v. Nissan Computer Corp.., 378 F.3d 1002 (9th Cir. 2004). (Ninth and Fourth Circuits never adopted effect of commerce test on injunctions prohibiting disparaging remarks.)
, United States v. Mineworkers, 330 U.S. 258, 294 , 67 S.C.t. 677

(1947)

(Illegal or unconstitutional orders must be obeyed until

they are reversed on appeal.) Instead of appealing the contempt order, Appellee's principal Mason engaged in what his attorneys termed an "emotional" campaign of disparagement and defamation in clear violation of the District Court's injunction. While he flaunted the District Court's Injunction, his victim dutifully reported to jail and served ninety-seven days of illegal incarceration simply because he appealed to justice. When Acord claimed that the letters were subjecting him to a risk of criminal investigation and prosecution, Appellee YAP and its counsel admitted Mason wrote the letters and attempted to excuse Mason's actions by claiming that the disparaging stateT ments were true, but were insufficient grounds to warrant the imposition of a stay of civil discovery until the threat of criminal investigation or prosecution subsided, A disparaging remark is defined as one which discredits one's person or proper-

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ty.

Black's Law Dictionary, 5th Ed. 1979, P. 422. Accusations of

felony criminal conduct are defamatory per se. Mason's letters contained both disparaging remarks as well as defamatory accusations which violated the terms of the Consent Injunction. A party aggrieved by another party's violation of an injunction has a clear right to move for contempt and to enforce his rights under the Court order. Any arguments to the contrary are frivolous and have no basis in fact or law. As proven by the citations to the record contained in the Statement of Facts above, Appellant Acord's Motion for Contempt and Supplement which sought to prevent such remarks were factually supported by evidentiary exhibits containing the disparaging and defamatory remarks which were authenticated by the comments of Appellee YAP's own counsel. In summarily dismissing Acord's self-proving motions, the District Court was apparently oblivious to the Appellee's prior admissions, on the face of the record, the injunction had been violated_ The Court's imposition of Rule 11 sanctions against the victim of such conduct, Appellant Acord, and Acord's subsequent jailing leave the mistaken impression that a party like Acord can be sanctioned under Rule 11 for attempting to enforce the Court 'a orders, This Court should act decisively to correct this misimpression, reverse the sanctions order, and direct the District Court to properly review the record and, on remand, thereafter, impose the appropriate punishment against the Appellees and their principal. There was plainly no basis for the

Rule 11 sanctions entered here. Turqeon v. Premark internatl..

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Inc,, 87 F.3d. 216, 223 (7th Cir. 1996). Contrary to Appellee's disparaging, but unfounded accusafor tions, Appellant Acord's only purpose in bringing his Motion s Contempt was to vindicate his rights under the District Court' under injunction -- a proper purpose, not subject to sanctions Rule 11, The District Court, with its slavish reliance on Attorive, ney Freeman's unsupported, unsworn, and self-serving invect Judge was apparently unmindful of this Court's admonition that a ilwith no knowledge of the facts should not make Rule 11 credib strue ity determinations without a hearing. Nor should he miscon a or ignore the record and the supporting evidence on which determination of the proper purpose of a pleading must be based. In Re: Kunstler, 914 F.2d 505, 520 (4th Cir. 1990). Appellant for Acord did not file his Motion(s) for Contempt and then look the evidence. He compiled and attached the evidence and then filed his Motion(s) for Contempt. The District Court's Rule 11 sanctions should be reversed. g This cause should be remanded for a new trial and a full hearin on. Appellant Acord's Motion for Contempt.

4. THE DISTRICT COURT ERRED IN HOLDING APPELLANT ACORD IN CONTEMPT AND INCARCERATING APPELLANT ACORD FOR FAILURE TO PAY A RULE II SANCTION. STANDARD OF REVIEW
In considering a remedial civil contempt order on appeal, de this Court reviews the District Court's conclusions of law ting novo. Review of the District Court's tactual findings suppor tion. the civil remedial contempt order is under abuse of discre 0 In Re: Baltimore Emergency Services II, 432 F.3d 557, 559-56

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(4th Cir, 2005). See also N.A. Sales Co. v. Chapman Industries

Corp,, 736 F.2d 854, 857 (2d Cir. 1984). (Abuse of discretion, is
established if the District Court's adjudication of the contempt proceedings is based upon error of law or a clearly erroneous finding of fact.) DISCUSSION OF THE ISSUE The District Court's finding of contempt was based on the legal assumption that the Rule 11 sanction it imposed was lawful. Upon proper reversal of the Rule 11 sanction required by the facts and record of this case, the contempt finding must fall. Any remedial payments or benefits received by Appellees are, upon reversal, unlawful exactions which must be repaid with lawful interest, Appellant Acord spent ninety seven (97) days in unlawful confinement as a result of the District Court's illegal entry of the Rule 11 sanction at issue here and his own inability to raise or write a check for, the $24,357 amount imposed by the District Court at the urging of Appellee YAP's counsel. Here, unlike O'Connor v. Midwest Pipe Fabrication, Inc,, 972 D.2d 1204 (10th. Cir, 1992) Appellant Acord's requested stay was not granted. This allowed Appellee YAP and its counsel to utilize contempt incarceration as a tool to attempt to enforce a money judgment. What the Tenth Circuit found to be a "troublesome question," seemed only troublesome to Appellant Acord and no one else, Although the District Court claimed Acord's financial statements were inadequate, it made no specific findings of any records which Appellant Acord had withheld and which should. be

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produced. Nevertheless, unlike the Defendant in In Re: Runnells,

. 815 F.2d 969 (4th Cir . 1987), Appellant Acord was imprisoned,

nonetheless, even though he had produced all financial records and/or made all financial disclosures which the Court required. Substantial doubt exists as to whether the contempt powers of the Court can be utilized to collect a Rule 11 sanction. Almost all Courts considering the issue prohibit use of the contempt power to collect a money judgment. Combs v. Ryan's Coal Co., 785 F.25 970, 980 (11th Cir.) In Re; Estate of Bonham, 817 A.2d. 1.92, 195-96 (D.C. 2003); Aetna Cas, and Surety Co. v. Markarian, 114 F. 3d 346, 349 (1st Cir. 1997); Shuffler v. Heritage Bank, 720 F.2d 1141, 1147-48 (9th Cir. 1983); Richmark Corp. v. Tenderfalling Consultants, 959 F.2d 1468 (9th Cir. 1992). The District Court's finding of contempt should be reversed, Appellee YAP should be ordered to immediately repay any remedial sanctions to the party that paid same,

5.

THE DISTRICT COURT ERRED IN REFUSING TO TRANSFER VENUE.

STANDARD OF REVIEW
The District Court's denial of a Motion to Transfer of Venue is reviewed for abuse of, discretion. Saudi v. Northrop Grumman Corp., 427 F,3d 271, 275 (4th Cir. 2005), Citing Nichols

. D. Searle and Co.,991 F.2d 1195, 1200 (4th Cir ., 1993),

DISCUSSION OF THE ISSUE

The District Court in its Memorandum Opinion overruling Appellant Acord and Ortega's Motion to Transfer Venue purportedly relied on Piper Aircraft Co. v. Reyno, 454 U.S. 235, 266 (1981), (JA Vol, 1, PP. 000180). While purporting to
,

follow piper's

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rationale, that a Plaintiff's choice of forum is accorded strong deference, the District Court ignored Piper's limitation. While the District Court considered the Plaintiff, Young Again Products, Inc., to be a resident of the State of Maryland, there was no showing, on the record or in any of the venue papers, that Plaintiff was a corporation in good standing in the State of Maryland at the time of filing suit. YAP's corporate principals, Roger and Ivey Mason, were not residents of the State of Maryland as of the date the suit was filed. The residence of the principal shareholders of a defunct corporation which is not in good standing becomes the corporate residence for venue purposes. YAP's jurisdiction and venue allegations claim that it is a "business entity incorporated under the laws of Maryland," but fail to state that YAP was in good standing in that state at the time of filing of suit, (JA Vol, 1, PP. 000040-42).

The District Court's failure to properly transfer venue forced the Appellants to defend Plaintiff's claims in a jurisdiction where none of the witnesses or evidence were located. Appellee YAP's choice of venue was, apparently, taken solely for the convenience of its attorney Freeman, who offices in Maryland_ Upon reversal and remand of this case, this Court should enter an order directing the District Court to transfer venue to either
. the Southern District of Texas or Eastern District of North Caro-

lina, The venue opinion of the District Court makes no findings with regard to Appellee YAP's corporate status as of the date of filing suit.

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In light of the fact that all of the witnesses resided in the States of Texas and North Carolina and the parties' evidence was located in one of those two states, the Maryland Court erred by not transferring the case to the appropriate Federal District of Texas or North Carolina.

CONCLUSION
Based on all of the above legal arguments and authorities, the default judgment so of the District Court, the District. Court's Rule 11 sanctions, and the District Court's orders of contempt, should be reversed, and this cause should be remanded for a new trial.

REQUEST FOR ORAL ARGUMENT

PURSUANT to Rule 34(a) of the Federal Rules of Appellate Procedure, the Appellants' counsel, Joe Alfred Izen, Jfl, hereby informs this Court that he believes oral argument would be helpful to the Panel in resolving this case. Respectfully submitted, r hfil Labe Alfred Izen, Jr. Attorney for Appellants 5222 Spruce Street Bellaire, Texas 77401 (713) 668-8816 (713) 668-9402 FAX

CERTIFICATE OF COMPLIANCE
I certify that the foregoing brief was typed using a DOS Wordstar 6 program, is monospaced, and contains 14,309 words.
m

'

Joe

tred Izen, Jr,

id

'

f'.4.4.111A

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CERTIFICATE OF SERVICE
I certify that a true and correct copy of the foregoing 100 document was sent to Thomas Freeman, Freeman and Freeman PC, by U.S. Mail, postage prePark Ave Ste 250, Rockville, MD 20550 paid, on this the 9th day of December, 2009.

Joe Alfred
ACORIAJTA3-81/TK424

(4k6,41-(k. 4/tk" Izen, Jr,

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