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Keywords

lawsuitdefendantjurisdictionsubpoenainjunctionappealcompliance
plaintiffdefendantjurisdictioninjunctionmotion

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Gucci America, Inc. v. Weixing Li, 768 F.3d 122, 112 U.S.P.Q.2d 1445

Facts

Manufacturers of luxury goods, including Gucci and others, discovered that certain unauthorized parties were selling counterfeit versions of their products online. They filed a lawsuit against these parties and sought to freeze their assets, which led to a court order that the Bank of China comply with a document subpoena and asset freeze injunction. The Bank, however, argued that it could not comply due to Chinese law and was subsequently held in contempt by the district court for failing to do so.

Plaintiffs assert that in or around June 2010, they discovered that certain unauthorized parties, including the defendants in this action, were selling counterfeit versions of plaintiffs' products on the Internet.

Issue

Did the district court have personal jurisdiction over the Bank of China to enforce the asset freeze injunction and compel compliance with the subpoena?

The Bank argues first that pursuant to Dairy Queen, Inc. v. Wood, an accounting of profits is a legal remedy.

Rule

The court ruled that personal jurisdiction over the defendants was sufficient for the district court to restrain their assets, and that the district court had the equitable authority to issue a prejudgment asset freeze injunction.

We reject BOC's argument that personal jurisdiction over the Bank was required for the district court to issue the June 25, 2010 TRO and the subsequent Asset Freeze Injunction restraining the defendants' assets.

Analysis

The court determined that the district court did not need personal jurisdiction over the Bank to issue the asset freeze injunction against the defendants. It found that the Bank's arguments regarding jurisdiction were without merit, as the injunction was aimed at the defendants, who were subject to jurisdiction. However, the court also recognized that the Bank could not be held in contempt without establishing personal jurisdiction over it.

However, a district court can enforce an injunction against a nonparty such as BOC only if it has personal jurisdiction over that nonparty.

Conclusion

The court affirmed in part, reversed in part, and vacated in part the district court's orders, remanding the case for further proceedings to determine whether specific personal jurisdiction over the Bank could be established.

We conclude that both the August 23 Order, as it relates to the Asset Freeze Injunction, and the related May 28, 2012 order denying the Bank's motion to reconsider should be vacated and remanded for two reasons.

Who won?

The Bank of China prevailed in the appeal as the court reversed the contempt ruling against it, indicating that the district court had abused its discretion.

The court ultimately reversed the contempt ruling against the Bank and remanded for further proceedings regarding specific jurisdiction.

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