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United States Court of Appeals,
Fifth Circuit.
No. 93-1936.
WESTERN WATER MANAGEMENT, INC., Plaintiff-Appellee,
v.
Charles P. BROWN, et al., Defendants-Appellants.
Dec. 15, 1994.
Appeal from the United States District Court for the Northern
District of Texas.
Before POLITZ, Chief Judge, GOLDBERG and DUHÉ, Circuit Judges.
DUHÉ, Circuit Judge:
After having been enjoined from manufacturing certain
products, Defendants were found to be in contempt of that
injunction. After another finding of contempt and a modification
of the injunction, Defendants ask this Court to vacate the modified
injunction and both contempt orders or to vacate and remand for a
more specific injunctive order. For the following reasons, we
affirm the contempt orders, vacate the modification to the
injunction, reinstate the Amended Injunction, and remand.
I. BACKGROUND
Western Water Management originally sued Chem Craft
Corporation and its officers, Charles Brown, Richard Hornack, and
J.B. Rivers, alleging a conspiracy to steal Western's formulas for
manufacturing water treatment products. Western proved that
Defendants used formulas misappropriated from Western to make and
sell waste treatment products under the Chem Craft name. The court
issued a permanent injunction requiring Defendants to surrender all
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copies of Western's formulas (introduced at trial as "Exhibit 58")
and prohibiting Defendants from using or modifying Western's
formulas to manufacture any products. As amended and affirmed by
this Court, the injunction (the "Amended Injunction") provides as
follows:
IT IS, THEREFORE ORDERED that Defendants ... be and the
same hereby are ordered to return to Western Water Management
any and all copies of (1) Plaintiff's Trial Exhibit 58, the
listing of Western Water Management, Inc.'s chemical product
formulations, (2) Western Water formula No. 9715, and (3) any
and all copies made therefrom....
... [Defendants] are directed forthwith to desist and
refrain from disclosing the contents of Plaintiff's Trial
Exhibit 58, the Western Water Management chemical product
formulations, or Western Water formula No. 9715 to any
individuals or entities ...;
... [Defendants] are restrained and enjoined from
utilizing the formulations contained on Plaintiff's trial
Exhibit 58, or Western Water formula No. 9715, or their
modifications of those formulations, in Defendants' trade or
business. This Order shall not preclude Defendants from
utilizing formulations based upon or derived from other
sources, or from selling single ingredient products or
dilutions of single ingredient products, unless those
dilutions are derived from Trial Exhibit 58.
7 R. at 1558-59.
Defendants formed a new entity known as Clearwater Industries,
which began selling products formulated in violation of the Amended
Injunction. Plaintiff moved for enforcement of the Amended
Injunction and for contempt. A magistrate judge found that
Clearwater was incorporated in an effort to hide Defendants'
continuing contemptuous formulation and sales of water-treatment
products, found Defendants in contempt, and recommended an order
for production of business documents showing Defendants' sales
revenues to determine the propriety of further monetary sanctions.
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The court adopted the magistrate judge's recommendation in May
1992. Defendants moved for relief from and now appeal the May 1992
finding of contempt.
In August 1992 Western filed a second motion for contempt
alleging Defendants' continued use of proprietary formulas and
failure to produce documents. In September 1993 the court granted
Western's second motion for contempt, denied Defendants' motion for
relief from the first contempt order, and sua sponte modified the
Amended Injunction (the "Modification"). The Modification deleted
that portion of the injunction which stated,
This Order shall not preclude Defendants from utilizing
formulations based upon or derived from other sources, or from
selling single ingredient products or dilutions of single
ingredient products, unless those dilutions are derived from
Trial Exhibit 58.
11 R. 2737. From this September 1993 order and the May 1992
contempt order, Defendants appeal.1
II. CONTEMPT FINDINGS
A. Specificity of the Injunction
Defendants first complain that the findings of contempt are
erroneous because the Amended Injunction is unenforceable. The
collateral attack on an injunction during contempt proceedings is
1Though a contempt decision is not final and appealable
until the appropriate sanction for contempt has been ordered,
Petroleos Mexicanos v. Crawford Enterprises, Inc., 826 F.2d 392,
398 (5th Cir.1987), the modification of the injunction which is
independently appealable makes the contempt order appealable as
well. 28 U.S.C. § 1292(a)(1) (jurisdiction over interlocutory
order modifying injunction); Mercury Motor Express, Inc. v.
Brinke, 475 F.2d 1086, 1091 (5th Cir.1973) (court with
interlocutory jurisdiction over injunctive order may decide other
aspects of the order).
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prohibited if earlier review of the injunction was available. See
United States v. Ryan, 402 U.S. 530, 532 n. 4, 91 S.Ct. 1580, 1582
n. 4, 29 L.Ed.2d 85 (1971); see also NLRB v. Union Nacional de
Trabajadores, 611 F.2d 926, 928 n. 1 (1st Cir.1979).
In their previous appeal, Defendants argued that the Amended
Injunction improperly imposed "an overbroad blanket prohibition"
against their use of Western's product formulas. Defendants claim
that despite their previous attack on the Amended Injunction via
appeal, they may now in these contempt proceedings collaterally
attack the Amended Injunction as vague or overbroad.2 We disagree.
We see no reason to reopen consideration of the issue.3
B. The First Contempt Order
In the first contempt order the court found that Defendants
failed to return all copies of Western's formulas and made formulas
copied from Western in violation of the injunction. Defendants
moved for relief from this contempt order under Rule 60(b)(5) on
the basis of equitable reformation. Rule 60(b)(5) authorizes
relief from a final judgment or order when "it is no longer
equitable that the judgment should have prospective application."
In reviewing a request for relief under Rule 60(b)(5), "We are not
framing a decree. We are asking ourselves whether anything has
2Fed.R.Civ.P. 65(d) provides, "Every order granting an
injunction ... shall be specific in its terms; [and] shall
describe in reasonable detail, and not by reference to the
complaint or other document, the act or acts sought to be
restrained."
3See Union Nacional de Trabajadores, 611 F.2d at 928 n. 1
(allowing no exception to the rule against collateral attacks
where the injunction has already been appealed).
4

happened that will justify us now in changing a decree." United
States v. Swift & Co., 286 U.S. 106, 119, 52 S.Ct. 460, 464, 76
L.Ed. 999 (1932). Defendants have not met their burden of
establishing this equitable ground for relief. See id. ("The
inquiry ... is whether the changes are so important that dangers,
once substantial, have become attenuated to a shadow."); see also
11 Charles A. Wright & Arthur R. Miller, Federal Practice and
Procedure § 2863 (1973) ("It is clear that a strong showing is
required before an injunction or other prospective judgment will be
modified.").
C. The Second Contempt Order
Defendants contend that the second contempt order is based on
clearly erroneous findings or evidentiary errors. The court found,
contrary to Defendants' evidence at the second contempt hearing,
that certain formulas originated with Plaintiff rather than other
competitors in the industry. Defendants first complain of the
district judge's remark that Defendants did not argue before the
magistrate judge that formulas were derived from other sources.
The court considered the failure to present the argument earlier
only in making its credibility determination, not in refusing to
admit evidence. See Sept. 1993 contempt order, 11 R. 2727. Using
a belated assertion in making credibility determinations is not an
improper evidentiary ruling.
Defendants also assert error in the court's consideration of
rebuttal evidence of other sources, namely, Plaintiff's belatedly
submitted affidavits. After an evidentiary hearing, the court gave
5

the parties the opportunity to make "further written submission" to
the court, and Western's affidavits from the competitors (attesting
that Defendants' use of their formulas was not permitted) followed.
These affidavits were cumulative to impeach the credibility of
Defendants' evidence suggesting new sources of formulas.
Considering that the affidavits were both cumulative and
uncontroverted, the court's consideration of the affidavits was not
an abuse of discretion. See Hoffman ex rel NLRB v. Beer Drivers &
Salesmen's Local Union No. 888, 536 F.2d 1268, 1277 (9th Cir.1976)
(uncontroverted affidavits may be treated as true).
Defendants also contend that the court clearly erred in
finding Defendants' noncompliance with the order to surrender
documents and in finding that they wrongfully used formula numbers
CC 1105 and CC 6190. These issues were decided as a matter of fact
by the court, and Defendants have not demonstrated that such
findings are clearly erroneous.
III. MODIFICATION OF THE AMENDED INJUNCTION
Defendants also complain of the district court's sua sponte
modification of the Amended Injunction, tightening restrictions on
Defendants' actions without prior notice. Although a district
court retains jurisdiction to modify an injunction to the
defendants' detriment under certain circumstances,4 we find no
authority allowing such a modification to be made without notice.
4E.g., Exxon Corp. v. Texas Motor Exchange of Houston, Inc.,
628 F.2d 500, 503 (5th Cir.1980) (recognizing that an injunction
may be modified to impose more stringent requirements on the
defendant when the original purposes of the injunction are not
being fulfilled in any material respect).
6

Rule 65 provides stringent notice requirements for issuance of
injunctive relief.5
Though Defendants had requested relief from the injunction,
they were not on notice of the modification imposed on the court's
own motion. Not having notice of any broader scope of the hearing
than the notice they sent and Plaintiff's notice on the second
contempt motion, "they were therefore unprepared and not on notice
to oppose the [modified] injunction issued at that hearing."
Williams v. McKeithen, 939 F.2d 1100, 1005 (5th Cir.1991) (vacating
court's sua sponte issuance of second order injoining defendants at
hearing held on notice of defendants' motion to vacate first
injunction because of lack of notice of the court's intended
action); see also Spangler v. Pasadena City Bd. of Educ., 537 F.2d
1031, 1036 n. 8 (9th Cir.1976) (Wallace, J., dissenting) ("[E]ven
if the district court had power to modify the injunction sua
sponte, it could not do so without providing prior notice."). We
hold that the district court abused its discretion in modifying the
5See Fed.R.Civ.P. 65(a) (forbidding issuance of preliminary
injunction without notice) and (b) (allowing for issuance of
temporary restraining order without notice only under exceptional
circumstances); see also Parker v. Ryan, 960 F.2d 543, 544 n. 1
(5th Cir.1992) (recognizing that Rule 65(a)'s notice requirement
is constitutionally required).
Notice requirements for permanent injunctions are also
stringent. See Nationwide Amusements, Inc. v. Nattin, 452
F.2d 651, 652 (5th Cir.1971) (requiring notice of court's
consolidation pursuant to Rule 65(a)(2) of the trial of
permanent injunction with the hearing of preliminary
injunction); Puerto Rican Farm Workers ex rel. Vidal v.
Eatmon, 427 F.2d 210, 210-11 (5th Cir.1970) (same); see
also United States v. Crusco, 464 F.2d 1060, 1062-63 (3d
Cir.1972) (holding that permanent injunction is not
available without notice to the adverse party).
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Amended Injunction, because the Modification was not preceded by
appropriate notice and an opportunity for hearing.
The Modification to the Amended Injunction is vacated, and the
Amended Injunction reinstated. The contempt orders are in all
other respects affirmed. The matter is remanded for such further
proceedings as necessary on the modification after due notice.
AFFIRMED IN PART; VACATED IN PART; Amended Injunction
REINSTATED; REMANDED.

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