I. INTRODUCTION AND SUMMARY

*1 Plaintiff The Wittern Group, Inc. sues Defendant Noufal Babu Palliparamban—its former employee—for misappropriation of trade secrets, breach of contract, and breach of fiduciary duties. ECF No. 1. The Court entered a Preliminary Injunction Order on May 24, 2024, requiring, in part, that Palliparamban and Defense Counsel Zubair Khan preserve and disclose: computers, phones, and other data storage devices; email and cloud storage accounts; and access credentials, passwords, etc., for such devices and accounts. ECF No. 29.[1] The Preliminary Injunction Order also requires the disclosure of a fulsome accounting of The Wittern Group's data obtained or transferred by Palliparamban as well as the means through which such data were accessed or transferred and the equipment, accounts, and persons involved in such activity. Id. On June 28, 2024, following a show cause hearing, the Court entered a Contempt Order finding Palliparamban and Attorney Khan in Contempt of Court and in non-compliance with the May 24, 2024 Preliminary Injunction Order. ECF No. 54. The Contempt Order imposed, jointly and severally upon Palliparamban and Attorney Khan, a coercive fine of $500 per day of non-compliance starting on June 26, 2024. Id. The Contempt Order also awarded attorneys fees and costs to The Wittern Group for their efforts and expense at obtaining Palliparamban's compliance.

Now before the Court is The Wittern Group's motion alleging ongoing non-compliance with the Preliminary Injunction Order and the Contempt Order and seeking an increase in the coercive fine to $2,000 per day along with the ongoing reimbursement of attorneys fees and expenses. ECF No. 56. The Wittern Group alleges the discovery of multiple non-disclosed accounts, the discovery of at least one non-disclosed device, an incomplete accounting of data obtained by Palliparamban, and false representations regarding the contents of an iPhone. The Wittern Group also alleges Palliparamban is failing to cooperate, communicate effectively, or provide credentials necessary to access accounts—specifically, accounts protected by multi-factor authentication. Id.

Also before the Court is a motion by Attorney Khan seeking permission to withdraw as defense counsel. ECF No. 70. The motion to withdraw characterizes client communication challenges and Palliparamban's alleged inability to pay Attorney Khan's bills as the reasons for seeking withdrawal. Id.

After entry of a Show Cause Order, ECF No. 64, and a subsequent, August 12, 2024 in-person hearing, the Court grants The Wittern Group's motion in part and denies Attorney Khan's motion to withdraw. In the Show Cause Order, the Court ordered Palliparamban “to show cause why he should not be held in contempt of Court for violating paragraph 3 of the preliminary injunction order by failing to ensure The Wittern Group's access to his email and cloud-based storage accounts.” ECF No. 64. The Court now finds Palliparamban and Attorney Khan clearly in continuing contempt of Court and in non-compliance with the Preliminary Injunction Order and the Contempt Order. The Court also finds Palliparamban's contempt willful. Palliparamban and Attorney Khan, jointly and severally, currently owe the accrued amount of $26,000 on the initial coercive fine as of the filing of this Order, August 16, 2024. Because the original Contempt Order has not yet been complied with, the original coercive fine continues to accrue at the rate of $500 per day. Palliparamban and Attorney Khan also owe attorneys fees and costs to The Wittern Group pursuant to the Contempt Order.

*2 Over two months have passed since the Court issued the Preliminary Injunction Order and more than a month has passed since the Court issued the Contempt Order. Rather than demonstrating meaningful efforts at compliance, Palliparamban and Attorney Khan have provided a trickle of information, often after learning of The Wittern Group's discovery of undisclosed accounts, email addresses, or undisclosed information through The Wittern Group's own efforts. There has been no respect for the urgency and deadlines expressed in the Court's prior Orders. Rather, Palliparamban and Attorney Khan have delayed and evaded disclosure and offered transparently insufficient excuses for noncompliance such as time-zone related scheduling complications and noncredible technical difficulties.

As an additional means of coercion, therefore, the coercive fine will increase to $2,000 per day starting on August 23, 2024, if Palliparamban and Attorney Khan fail to demonstrate full compliance with the account disclosure and access requirements as set forth in Preliminary Injunction Order, the Contempt Order, the Show Cause Order, and the additional and specific requirements of this Order.

The Court specifically orders Palliparamban and Attorney Khan to immediately: 1) disable multi-factor authentication on all disclosed or discovered accounts and devices for the purpose of granting The Wittern Group meaningful access; 2) provide to The Wittern Group's counsel such devices as are necessary to satisfy multi-factor authentication; or 3) appear in person at The Wittern Group's counsel place of business to provide effective in-person assistance granting such account access.

Attorney Khan's motion to withdraw is complicated by the fact that he is a subject of the Contempt Order and the current Order. The Court must consider this fact as well as the continuing needs to ensure: 1) effective service upon Palliparamban, and 2) attempted protection of The Wittern Group from irreparable harm as described in the Preliminary Injunction Order. See ECF No. 29. Pursuant to Local Rule 83 (d)(6) leave of the Court for an attorney's withdrawal requires a showing of good cause. In the context presented, specifically with outstanding joint and several liability for past and ongoing contempt, the Court rejects Attorney Khan's assertion that his client's affidavit, his own unpaid bills, or alleged client-communication difficulties constitute good cause. The motion to withdraw is denied without prejudice.

II. BACKGROUND

The following facts are evidenced by the procedural record, exhibits filed with the Court, or representations of counsel at the August 12, 2024 show cause hearing and prior hearings. See Chi. Truck Drivers v. Bhd. Labor Leasing, 207 F.3d 500, 504 (8th Cir. 2000) (noting a finding of civil contempt is warranted by clear and convincing evidence). The Court has repeatedly set forth descriptions of the present dispute, prior evidence, and prior conclusions as to non-compliance with Court orders and contempt of Court. The Court will not repeat those matters here. Prior orders remain in full effect, including the detailed requirements of disclosure and production imposed by prior orders and the accrued and still-accruing per diem sanction.

The Wittern Group supports its pending motion with: declarations from The Wittern Group's lead counsel, ECF Nos. 56-2, 63-1; copies of several email communications between The Wittern Group's counsel and Attorney Khan, ECF Nos. 56-3, 56-7 (sealed), 56-8, 57, 63-2, 63-3; letters from The Wittern Group's lead counsel to Attorney Khan, ECF Nos. 56-4, 56-5, 56-6; a declaration from The Wittern Group's additional counsel and screenshots regarding rental listings for Palliparamban's home, ECF Nos. 56-9, 56-10, 56-11; a declaration from The Wittern Group's computer forensics expert Christopher Lester, ECF No. 56-12; a declaration from The Wittern Group's Vice President of Engineering Andres Martinez, ECF No. 56-13; and a declaration from John Van Horn, the Vice President of Intelligent Dispensing Solutions, a division of one of The Wittern Group's wholly-owned subsidiaries, ECF No. 56-14.

*3 Through this evidence, as addressed in court and in The Wittern Group's briefing, The Wittern Group describes a partial forensic analysis of an iPhone Palliparamban produced. ECF No. 56-12. The absence of multi-factor authentication access prevented complete analysis given the inability to access associated accounts. Id. The partial analysis revealed electronic files, including videos of computer screens showing The Wittern Group's proprietary source code, pricing information, various machine component configuration and operation descriptions, and other confidential business information recorded with the iPhone's camera close in time to when Palliparamban downloaded other data onto thumb drives. Id.; ECF Nos. 56-13, 56-14. Palliparamban had not previously disclosed the video as having been acquired and, in fact, expressly denied the existence of any propriety information on the iPhone. ECF Nos. 56-7, 37. The Wittern Group describes these newly discovered files as evidence of Palliparamban's non-compliance with the two prior orders' disclosure and accounting requirements. ECF No. 56-7. The Wittern Group's forensic expert describes the use of videos to capture and store information (such as source code) from another device's screen as surreptitious and somewhat effective at concealing the captured information from discovery—the video format serves as a less easily searchable and atypical format for such data. ECF No. 56-12.

The Wittern Group also explains that Palliparamban provided passwords for several accounts, some of which Palliparamban had not initially acknowledged but The Wittern Group nevertheless discovered. At least one password provided to The Wittern Group worked on an account different than the account identified. ECF No. 56-12. As to all such accounts, The Wittern Group emphasizes that, although Palliparamban eventually provided some passwords, he has not cooperated in the time-sensitive process of facilitating and coordinating multi-factor authentication access. Id. Finally, the letters and email chains detailing correspondence between counsel demonstrate a clear picture of delay, a lack of cooperation, and inconsistent representations by Attorney Khan about whether he had or had not already taken action to attempt scheduling Palliparamban to aid in accessing the accounts. ECF Nos. 56-3, 56-4, 56-5, 56-6, 56-7 (sealed), 56-8, 61-1, 63-2, 63-3.

With specific reference to the issue of multi-factor authentication, Attorney Khan represented to the Court at the August 12, 2024 hearing that the particular phone needed for responding to multi-factor authentication is not in Palliparamban's personal possession. In this regard, Palliparamban has left the United States for India. He has listed his home in the United States for rent, suggests a lease term of one year, and seemingly indicates the lack of an intent to return. Attorney Khan represents that the phone in question is the United States whereas Palliparamban is in India. The Wittern Group's counsel and The Wittern Group's computer forensics expert, however, indicate that caller i.d. or other similar technology has shown Palliparamban seemingly communicating with them on that same phone. Attorney Khan counters that the phone must be set to forward calls. Attorney Khan also cites the time zone differences between the United States and India to strictly limit when Palliparamban might be made available to provide assistance. Viewed against the balance of the evidence, Palliparamban and Attorney Khan's assertions are noncredible. Further, and perhaps most importantly, Palliparamban and Attorney Khan offer no meaningful explanation as to why multi-factor authentication could not simply be deactivated on a temporary basis.

This description of violations of the prior orders' disclosure requirements through misrepresentations and nondisclosure is not intended to be exhaustive.

III. DISCUSSION

Several sources of authority empower the Court to ensure compliance with its own orders. See, e.g., Monterey Dev. Corp. v. Lawyer's Title Ins. Co., 4 F.3d 605, 610 (8th Cir. 1993) (citing 18 U.S.C. § 401). The Court is also vested with the “inherent power to enforce compliance with its lawful orders and mandates by awarding civil contempt damages, including attorneys fees.” Fisher v. Marubeni Cotton Corp., 526 F.2d 1338, 1340 (8th Cir. 1975). “Civil contempt may be employed to either coerce the defendant into compliance with a court order or to compensate the complainant for losses sustained, or both.” Chi. Truck Drivers, 207 F.3d at 505 (citing United States v. United Mine Workers, 330 U.S. 258, 303–04 (1947)). “Either incarceration or a fine may accomplish the purpose of coercion.” Id. “With compensatory contempt, the court attempts to compensate the plaintiff for the damage that the offending party has caused by its contempt.” Coleman v. Espy, 986 F.2d 1184, 1190 (8th Cir. 1998).

*4 When a party moves for a finding of civil contempt, the movant “has the burden of demonstrating by clear and convincing evidence that an Order of the Court was in effect, that Defendants knew of the Order, and that Defendants failed to comply with the Order.” C. Line, Inc. v. City of Davenport, 957 F. Supp. 2d 1012, 1027 (S.D. Iowa 2013); see also Chi. Truck Drivers, 207 F.3d at 504. It is not necessary, however, to establish the violating party intended to violate the Court's order. “The absence of willfulness does not relieve from civil contempt.... Since the purpose is remedial, it matters not with what intent the defendant did the prohibited act.” McComb v. Jacksonville Paper Co., 336 U.S. 187, 191 (1949); accord Cedar Rapids Lodge & Suites, LLC v. JFS Dev., Inc., No. 09-CV-175-LRR, 2011 WL 4625661, at *3 (N.D. Iowa Oct. 3, 2011).

Based on the evidence described above, the Court concludes Palliparamban and Attorney Khan are in clear and ongoing violation of paragraph 3 of the preliminary injunction order, of which they had full knowledge, by failing to ensure The Wittern Group's access to Palliparamban's email and cloud-based storage accounts. Cf. C. Line, Inc., 957 F. Supp. 2d at 1027. The requirement to provide credentials for accounts unambiguously requires cooperation in permitting access across multi-factor authentication protections. The failure to disclose all electronic accounts and the ongoing failure to cooperate with permitting multi-factor authentication, establish this contempt of Court by clear and convincing evidence. Id.

Moreover, the Court finds Palliparamban's contempt willful. The express denial that the iPhone contained The Wittern Group's confidential information stands as an unambiguous misrepresentation. Mere inadvertence might explain some degree of incompleteness in the disclosure of electronic accounts, given their proliferation in modern life. The express denial that the iPhone contained valuable target information, however, when viewed in light of the described videos, lacks the support of alternative or innocent explanation. And as counsel for The Wittern Group and The Wittern Group's forensic investigator convincingly assert, use of the video format for capturing source code is highly suggestive of an intent to conceal. The format presents search challenges and differs from the format normally containing source code or bulk data.

The Court understands Palliparamban and Attorney Khan to be unmoved by the present per diem sanction and finds an increased coercive sanction as requested by The Wittern Group necessary to induce compliance with the Court's orders.

The original fine of $500 remains in place and continues to accrue, as compliance with the Preliminary Injunction remains incomplete. ECF No. 54. The fine will increase to $2,000 per day on August 23, 2024, if Palliparamban and Attorney Khan have not provided access to accounts as described below.

Accordingly, IT IS ORDERED that Plaintiff The Wittern Group, Inc.'s Motion for Increased Contempt Sanctions, ECF No. 56, is GRANTED IN PART.

IT IS FURTHER ORDERED that Defendant Noufal Babu Palliparamban and his lead counsel Zubair Khan must grant immediate and effective access to Plaintiff The Wittern Group, Inc. by disabling multifactor authentication protections on all accounts and devices identified in The Wittern Group's briefing to the court, including but not limited to the accounts described substantially as follows: