Seiko Epson Corp. v. Startech International Computer Supplies

MEMORANDUM * 1. In the event of a breach, the Settlement Agreement states that “the Court in the Federal Action shall retain jurisdiction over this Settlement Agreement.... Epson may promptly file a declaration in the Federal Action requesting that the Court reinstate the Federal Action to active status.” (Emphasis added.) [ER 43.] This does not limit Epson’s remedy to reinstatement, and so the district court did not err in using contempt proceedings. 2. Overwhelming evidence suggested that Startech had failed to deliver the counterfeit cartridges, which were listed by model number. Startech’s failure to do so cost Epson sales and goodwill. The district court thus did not err in determining that compensatory damages amounted to $38,252. See United States v. Ayres, 166 F.3d 991, 995-96 (9th Cir.1999) (no evidentiary hearing required when “overwhelming evidence” supports contempt finding). 3. Startech was required under the Settlement Agreement to pay $14,000 in *759 addition to delivering the counterfeit cartridges. Because the $38,252 was compensation for Startech’s failure to deliver the cartridges, the district court properly refused to apply a $14,000 offset. 4. The district court did not err in refusing to consider Startech’s inability to pay this compensatory fine because in compensatory contempt proceedings, courts need only consider appropriate compensation. See United States v. United Mine Workers of Am., 330 U.S. 258, 303-04 , 67 S.Ct. 677 , 91 L.Ed. 884 (1947). 5. Because Startech could not comply with the order to deliver the inkjet cartridges, the per diem fine was a coercive fine that enforced the award of $38,252. Federal courts may not “enforce a money judgment by contempt ... except in cases where established principles so warrant.” Shuffler v. Heritage Bank, 720 F.2d 1141, 1148 (9th Cir.1983) (internal quotations omitted). Startech’s prior failures to pay do not warrant the use of a coercive fine. See id. at 1143 . We AFFIRM the district court’s imposition of a compensatory fine of $38,252. We REVERSE the district court’s imposition of a coercive fine of $500 per day. The parties shall bear their own costs. This disposition is not appropriate for publication and is not precedent except as provided by 9th Cir. R. 36-3.