Taggart Watch – District Court Discusses Contempt Against Third Parties Who Aid or Abet Contemnor

Taggart Watch – District Court Discusses Contempt Against Third Parties Who Aid or Abet Contemnor

The most recent case to cite Taggart v. Lorenzen, 139 S. Ct. 1795 (2019) is a non-bankruptcy case discussing the enforcement of an injunction against the defendant and against third parties conspiring to violate the injunction. This case is interesting as it raises the possibility of enforcing the discharge order against not only the creditor but other third parties who conspire with the creditor to violate the discharge order.

Empire (Plaintiff) is bathroom/kitchen manufacturer and distributor. Plaintiff contracted with a third-party (Fireclay) to manufacture special sinks exclusively for Plaintiff. Winslyn (Defendant 1), another distributor of bathroom/kitchen products, was sued for tortuously interfering with Plaintiff’s contract with Fireclay for seeking to distribute and sell the special sinks Fireclay was manufacturing exclusively for Plaintiff.

Plaintiff obtained a preliminary injunction that barred Defendant 1 and anyone affiliated or acting in concert with it, pending the trial or other disposition of this case, from purchasing, marketing, or selling sinks obtained from Fireclay identical or visually indistinguishable from Plaintiff’s special sink designs.

Plaintiff then amended its complaint to add Fireclay (Defendant 2), an associated entity Niko (Defendant 3). It also added Imperial (Defendant 4), another bathroom supplier, alleging that it participated in the conspiracy by purchasing Plaintiff’s sinks from either Defendant 1 or Defendant 2.

Plaintiff filed motions to show cause against Defendants 1, 2 and 4 why they should not be held in contempt of the preliminary injunction.

The Court reviewed the rules regarding holding parties and non-parties to an injunction in contempt.

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