RTI Connectivity PTE LTD v. Gateway Network Connections, LLC.

District Court, D. Guam·Decided March 30, 2023·No. 1:22-cv-00025·Unknown

Opinion

RTI CONNECTIVITY PTE. LTD., a Singapore CASE NO. 1:22-cv-00025 private limited company, and RUSSELL A. MATULICH, Plaintiffs, MEMORANDUM DECISION v. DENYING PLAINTIFFS’ MOTION FOR AN EXPEDITED ORDER TO FIND GATEWAY NETWORK CONNECTIONS, LLC, a Guam limited liability, DEFENDANT IN CONTEMPT, AND A FURTHER ORDER TO SHOW CAUSE Defendant.

I. INTRODUCTION On March 7, 2023, Plaintiffs RTI Connectivity PTE. Ltd. (“RTI-C”) and Russel A. Matulich (“Matulich”) (collectively “Plaintiffs”) filed a motion for expedited order to hold Defendant Gateway Network Connections, LLC (“GNC”) in contempt and a further order to show cause (Motion, ECF No. 44) along with supporting declarations and exhibits (ECF Nos. 45, 46, 47, 47-1, 47-2, 48, 48-1 – 48-8). The next day, GNC filed an interim response (Interim Opp’n, ECF No. 51), to which Plaintiffs filed a reply (Interim Reply, ECF No. 52). On March 10, 2023, the Court held a telephonic chambers conference with parties’ counsel and set a briefing schedule and hearing date for the motion. (ECF No. 55.) GNC filed its full opposition (Opp’n, ECF No. 56) with various declarations and exhibits (ECF Nos. 56-1 – 56-4), and Plaintiffs filed their reply (Reply, ECF No. 57) with numerous declarations and exhibits (ECF Nos. 58, 58- 1 – 58-5, 59, 59-1, 60). The matter came for a hearing on March 28, 2023, during which time the Court denied Plaintiffs’ motion for an order to show cause. (Mins., ECF No. 62.) Additionally, the Court took under consideration whether to sua sponte initiate the procedure for imposition of sanctions pursuant to Rule 11(c)(3) against Plaintiffs’ counsel for presenting frivolous arguments. (See id.) While Attorney Chase T. Tajima signed the motion and reply brief on behalf of Plaintiffs, he, as well as Attorneys Arthur Clark and Minakshi Hemlani advanced the arguments at the hearing. The Court issues this Memorandum Decision detailing its rationale for denying the motion and declining to pursue sanctions. The Court’s decision not to pursue sanctions does not diminish the undersigned’s serious concerns and disappointment. The parties are engaged in extensive litigation in numerous fora, but relevant to the instant case is the Dispute Prevention & Resolution, Inc. (“DPR”) arbitration in Hawaii (Arbitration No. 21-0272-A) involving RTI-C, Matulich, and GNC. The Arbitration Panel presiding over that arbitration issued an order on June 17, 2022 (“Arbitral TRO”) holding that: GNC . . . [is] expressly ordered to provide and not interfere with the providing of ‘customary access and service’ to RTI-C, its officers, directors, agents, servants, employees, independent contractors, and attorneys (hereafter, collectively RTI-C) until the final ruling in this case. The term customary access and service shall mean the level of access and service which RTI-C was receiving prior to December 31. 2020, including, without limitation: l. RTI-C shall have access to the Data Center during normal business hours from 9:00 am - 5 :00 pm, Monday to Friday for all of the following: routine maintenance, installation, and de-installation of RTI-C’s equipment . . . 2. RTI-C shall continue to have a non-exclusive license to the RTI-C’s Licensed Space (including any full cabinets, cages, suites, or rooms) licensed to RTI-C in the Data Center to install, operate, and maintain RTI-C’s equipment including necessary AC or DC power. 3. While RTI-C shall provide notice to GNC regarding the installation of RTI- C or its customers equipment and shall coordinate with GNC regarding delivery, timing and location of equipment, RTI-C shall be responsible for installing its own Equipment in the Licensed Space.” (Arbitral TRO 3, ECF No. 32-1 at 149.) The United States District Court of Hawaii issued an order on July 28, 2022 granting RTI-C’s and Matulich’s motion for expedited order to confirm and enforce the Arbitral TRO. (Haw. District Court Order, ECF No. 32-1 at 7.) Ultimately, the Hawaii District Court held that the Arbitral TRO “must be confirmed[.]” (Id. at 32.) On January 27, 2023, this Court held an order to show cause hearing in which it ordered GNC to to the GNC data center was not unfettered as this Court recognized that his access was limited by the Arbitral TRO – access was for the limited purpose of installing, operating, or maintaining RTI-C’s equipment. (Tr. 62, ECF No. 42.) This Court’s order enforced the Hawaii District Court’s Order, which confirmed the Arbitral TRO. (See id. at 56.) Further, this Court recognized that enforcement would be temporary as the Arbitration Panel’s final order was forthcoming; specifically, the undersigned stated that “[i]f during the interim from the filing of the motion, as well as the filing of the order to the time of the hearing there’s been a change that would moot any of this, then it’s no longer for me to enjoin or to find any, like basis for contempt.” (Id. at 10 (emphasis added).) On February 2, 2023, the Arbitration Panel issued its “Order on Claimants’ Status Quo Motions[.]” (ECF No. 56-2 at 48.) The next day, the Arbitration Panel issued its “Findings of Fact, Conclusions of Law, and Final Award[.]” (“Final Award,” ECF No. 56-2 at 6.) GNC, RTI-C, and Matulich filed motions to correct and/or clarify the Final Award. (Vukovic Decl. ¶¶ 11-12, ECF No. 56-2; Mots. Correct/Clarify, ECF No. 56-2 at 64, 93.) While the parties’ motions to correct or clarify the Final Award were pending, Plaintiffs filed the instant motion. On March 14, 2023, the Arbitration Panel denied the motions to clarify. (Vukovic Decl. ¶ 15, ECF No. 56-2.) III. LEGAL STANDARD Civil contempt “consists of a party’s disobedience to a specific and definite court order by failure to take all reasonable steps within the party's power to comply.” Reno Air Racing Ass’n, Inc. v. McCord, 452 F.3d 1126, 1130 (9th Cir. 2006) (citation omitted). Contempt proceedings begin with the issuance of an order to show cause “why a contempt citation should not issue and a notice of a date for the hearing.” Alcalde v. NAC Real Estate Invs. & Assignments, Inc., 580 F. Supp. 2d 969, 971 (C.D. Cal. 2008) (citation omitted). For the issuance of an order to show cause, a “plaintiff seeking to obtain the defendant’s compliance with the provisions of an injunctive order move[s] the court to issue an order requiring the defendant to show cause why he should not be held in contempt and sanctioned for his noncompliance.” Nuscience Corp. v. Henkel, No. CV 08-2661 GAF (FFMx), 2014 U.S. Dist. LEXIS 44978, at *6 (C.D. Cal. Feb. 12, 2014) (quoting In re Grand Jury Proceedings, 142 F.3d 1416, 1424 (11th Cir. 1998)). The plaintiff should cite “the provision(s) of the injunction he wishes to be enforced, alleges that the defendant has not complied with such provision(s), and asks the court, on the basis of his representation, to order the defendant to show cause why he should not be adjudged in contempt and sanctioned.” Id. (quoting In re Grand Jury Proceedings, 142 F.3d at 1424). “If the court is satisfied that the . . . motion states a case of non-compliance, the court orders the [enjoined party] to show cause why he should not be held in contempt and schedules a hearing for that purpose.” AT&T Intellectual Prop. II v. Toll Free Yellow Pages Corp., No. CV 09-5707 PSG (PJWx), 2009 U.S. Dist. LEXIS 137670, at *4-5 (C.D. Cal. Dec. 14, 2009) (quoting Reynolds v. Roberts, 207 F.3d 1288, 1298 (11th Cir. 2000)). In a civil contempt proceeding, “[t]he moving party has the burden of showing by clear and convincing evidence that the contemnors violated a specific and definite order of the court. The burden then sh

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RTI Connectivity PTE LTD v. Gateway Network Connections, LLC., (gud 2023).

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