United States v. Bowers

847 F.3d 1280, 2017 WL 540976, 2017 U.S. App. LEXIS 2402
CourtCourt of Appeals for the Tenth Circuit
DecidedFebruary 10, 2017
Docket16-4008
StatusPublished
Cited by4 cases

This text of 847 F.3d 1280 (United States v. Bowers) is published on Counsel Stack Legal Research, covering Court of Appeals for the Tenth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States v. Bowers, 847 F.3d 1280, 2017 WL 540976, 2017 U.S. App. LEXIS 2402 (10th Cir. 2017).

Opinion

BRISCOE, Circuit Judge.

Defendant Donald Bowers was previously involved in a civil trade secret misappropriation case that was litigated in the United States District Court for the District of Utah. During the course of that litigation, Bowers willfully and repeatedly violated a permanent injunction issued by the district court presiding over the case, and also refused to purge himself of civil contempt. His actions resulted in findings of civil contempt against him, judgments against him for the plaintiffs attorneys’ fees, and, ultimately; a criminal referral to the Unit *1282 ed States Attorney for the District of Utah. A federal grand jury subsequently indicted Bowers on two counts of contempt, in violation of 18 U.S.C. § 401(3). The case proceeded to trial, where a jury found Bowers guilty of both counts. Bowers was sentenced to a term of imprisonment of fifteen months, to be followed by a thirty-six month term of supervised release. He was also directed, as a condition of supervised release, to make monthly payments on the outstanding amount owed by him to the plaintiff in the underlying civil case.

Bowers now appeals, arguing that the district court erred in (1) imposing a special condition of supervised release requiring him to make monthly payments on the outstanding judgments owed to the plaintiff in the civil case, (2) denying his motion for disclosure of the criminal referral, and (3) sentencing him to a term of imprisonment that exceeded six months. Exercising jurisdiction pursuant to 28 U.S.C. § 1291, we affirm in all respects.

I

This criminal case has roots in an earlier civil case, ClearOne Communications, Inc. v. Bowers, 643 F.3d 735 (10th Cir. 2011) (Bowers I). The complete factual and procedural history of that civil case is detailed in Bowers I and will not be repeated here. Instead, we proceed to outline only the facts necessary to understand how the criminal charges arose against Bowers.

The filing of ClearOne’s lawsuit against the WideBand defendants

In early 2007, ClearOne Communications, Inc. (ClearOne) filed suit in Utah state court seeking relief for alleged misappropriation of its trade secrets. Those trade secrets, which ClearOne put to use in audio teleconferencing equipment, “allegedly included an acoustic echo cancella-

tion algorithm and sub-algorithms, in both source and object code form, nicknamed the Honeybee Code.” ClearOne Commc’ns, Inc. v. Bowers, 651 F.3d 1200, 1203 n.1 (10th Cir. 2011) (Bowers II). Ultimately named as defendants in the suit were WideBand Solutions, Inc. (Wide-Band), which was a Massachusetts corporation, and Andrew Chiang, Jun Yang, and Lonny Bowers (hereinafter Lonny), all of whom served as officers of Wide-Band. Collectively, these defendants will be referred to as the WideBand defendants. ClearOne’s lawsuit also named two additional corporations: Versatile DSP, Inc., and Biamp Systems (Biamp). “Chiang, Yang and WideBand removed the case to federal district court [in Utah] on the basis of diversity jurisdiction.” 1 Bowers I, 643 F.3d at 744.

Donald Bowers’ initial involvement in the lawsuit

The defendant in the instant case, Bowers, is the father of Lonny. After ClearOne initiated its lawsuit against the WideBand defendants, Bowers began “loaning money to the WideBand defendants to pay a portion of the legal fees they were incurring.” Bowers II, 651 F.3d at 1203. Further, in June 2008, “Bowers and a Georgia-based company he founded called WideBand Solutions, Inc. (WideBand Georgia), entered into an agreement with” the WideBand defendants “pursuant to which WideBand would transfer its assets to WideBand Georgia.” Id. “ClearOne, upon learning of the asset transfer agreement, filed a motion for a temporary restraining order (TRO) and preliminary injunction to prevent any transfer of its alleged trade secrets.” Id. at 1204.

“The district court held a hearing on ClearOne’s motion on June 18, 2008, during which attorney Randolph Frails ap *1283 peared by telephone as the legal representative for ... Bowers.” Id. “Frails represented during the hearing that the language of the asset transfer agreement excluded the trade secrets that the Wide-Band defendants had purportedly misappropriated from ClearOne.” Id. “Nevertheless, the district court ordered Frails and ... Bowers to provide counsel for ClearOne and the WideBand defendants with copies of the asset transfer agreement.” |d.

On “June 19, 2008, ClearOne filed a renewed motion for a TRO and preliminary injunction alleging that, contrary to Frails’ representations, the terms of the asset transfer agreement included Wide-Band’s intellectual property, most notably the Honeybee Code.” Id “ClearOne that same day also filed with the district court a separate lawsuit against WideBand Georgia and ... Bowers alleging fraudulent transfer.” Id. (citing ClearOne Commc’ns, Inc. v. WideBand Sols., Inc., No. 2:08-CV-00474-TS (D. Utah June 19, 2008)).

On June 26, 2008, the district court held a hearing “to address the asset transfer agreement.” Id. “Frails again appeared by telephone on behalf of ... Bowers and WideBand Georgia.” Id “During the hearing, the district court issued a TRO prohibiting the WideBand defendants from transferring the Honeybee Code.” Id. The district court also, as part of its TRO, “expressly prohibited the transfer of any related items, including all of the various codes that Yang had allegedly derived from the Honeybee Code while working for WideBand, and it directed the Wide-Band defendants to make a full disclosure and production of all documents relating to the asset transfer agreement.” Id

“On July 10, 2008, the district court, prompted by another TRO motion filed by ClearOne, held a ... hearing concerning the asset transfer agreement.” Id. Frails appeared by telephone on behalf of Bowers and WideBand Georgia, and stated that the asset purchase agreement had been rescinded because Bowers “felt that he was buying nothing.” Id. (internal quotation marks omitted). “Frails argued that ClearOne’s TRO motion was moot because no assets had been transferred and the asset transfer agreement had been rescinded.” Id The district court, relying on Frails’ representations, “denied ClearOne’s TRO motion as moot.” Id

“In October 2008, the district court granted ... Bowers’ motion to dismiss ClearOne’s case against him and Wide-Band Georgia without prejudice on the basis that the claims, all of which concerned the purportedly rescinded asset transfer agreement, were moot.” Id. at 1205.

The trial of ClearOne’s case against the WideBand defendants

ClearOne’s case against the WideBand defendants ultimately proceeded to trial in October 2008. “After hearing eleven days of evidence, the jury returned a special verdict finding in favor of ClearOne on each of its claims against the defendants.” Bowers I, 643 F.3d at 745.

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847 F.3d 1280, 2017 WL 540976, 2017 U.S. App. LEXIS 2402, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-bowers-ca10-2017.