THE WITTERN GROUP, INC., Plaintiff, v. NOUFAL BABU PALLIPARAMBAN, Defendant No. 4:24-cv-00151-RGE-SBJ United States District Court, S.D. Iowa, Central Division Filed August 02, 2024 Ebinger, Rebecca G., United States District Judge ORDER I. INTRODUCTION *1 This case concerns Defendant Noufal Babu Palliparamban's alleged misappropriation of trade secrets owned by Plaintiff The Wittern Group among other claims. Compl. 10–14, ECF No. 1. In June 2024, the Court found Palliparamban and his counsel in contempt for violations of provisions of the preliminary injunction issued in this case. Am. Order Re: Def.'s and Counsel for Def.'s Civil Contempt 7, 9, ECF No. 54. Now before the Court is The Wittern Group's motion to increase sanctions for alleged continuing violations of the preliminary injunction. Pl.'s Mot. Increase Sanctions, ECF No. 56. As set forth more fully below, an increase in sanctions would require a new finding of contempt. For this reason, the Court orders Palliparamban to show cause why he should not be held in contempt. The Court orders the parties to appear at a show cause hearing on Thursday, August 8, 2024. The Court also denies in part The Wittern Group's request to increase sanctions and withholds ruling in part until the show cause hearing is held. On May 24, 2024, the Court issued a preliminary injunction. Prelim. Inj., ECF No. 29. On June 28, 2024, the Court found Palliparamban and his counsel had violated that injunction by: 1) failing to send his phone to The Wittern Group's forensic analyst until two weeks after the deadline set by the injunction; 2) failing to provide an adequate accounting of the “manner and location” in which he accessed The Wittern Group's Confidential Information and Trade Secrets, as of the June 25, 2024 hearing; and 3) failing to provide The Wittern Group's counsel with the credentials necessary to access Palliparamban's laptop as of June 28, 2024, the date the sanctions order was filed. ECF No. 54 at 7, 9. Palliparamban filed an accounting on June 26, 2024, but the Court withheld ruling on whether this filing cured the second violation. Id. at 8. Based on the third listed violation, the Court found Palliparamban in contempt of Court. Id. at 10. To coerce Palliparamban to cure the continuing violation, the Court ordered that Palliparamban pay a “contempt fine of $500 for every day on which Palliparamban continues to fail to satisfy his obligations under the preliminary injunction, starting on June 26, 2024.” Id. The Court also ordered Palliparamban to pay The Wittern Group's attorney's fees and costs related to its motion concerning these violations. Id.; see also Pl.'s Mot. Order Show Cause, ECF No. 34. On July 17, 2024, The Wittern Group filed a motion to increase Palliparamban's contempt sanctions. ECF No. 56. In that motion, The Wittern Group acknowledged—and submitted an exhibit showing—that Palliparamban sent The Wittern Group the password to his laptop on the afternoon of June 26, 2024. Pl.'s Ex. 1 Supp. Mot. Increase Sanctions 1–2, ECF No. 56-3. After accessing Palliparamban's laptop, The Wittern Group's forensic expert, Christopher Lester, was able to complete a forensic analysis of the laptop. Lester Decl. Supp. Pl.'s Mot. Increase Sanctions ¶ 18, ECF No. 56-12; accord Pl.'s Br. Supp. Mot. Increase Sanctions 6, ECF No. 56-1. These filings were the first indication provided by either party, following the June 25, 2024 show cause hearing, that Palliparamban had cured his prior failure to provide his laptop password to The Wittern Group. See generally ECF No. 54; Def.'s Submission Re: Prelim. Inj., ECF No. 50. *2 The Wittern Group, however, in support of its present motion, argues Palliparamban has continued to violate the preliminary injunction in two other ways. First, it argues Palliparamban's accounting of the manner and location in which he accessed The Wittern Group's confidential information continues to be inadequate. ECF No. 56-1 at 9–10. Second, it alleges that as of August 1, 2024, Palliparamban had failed to provide Lester access to all of his email and cloud-based storage accounts because he had not successfully assisted Lester in proceeding through the multi-factor authentication process securing those accounts. Pl.'s Reply Supp. Mot. Increase Sanctions, 2–3, ECF No. 63; ECF No. 56-1 at 9. Due to these continuing violations of the preliminary injunction, The Wittern Group has asked the Court to 1) find that Palliparamban remains in contempt of the preliminary injunction; 2) increase Palliparamban's daily fine to an amount “in the range of $2,000/day”; and 3) order Palliparamban to immediately pay the fines incurred thus far. ECF No. 56-1 at 13; ECF No. 56 ¶ 15. On July 26, 2024, Palliparamban filed a response. Pl.'s Resist. Def.'s Mot. Increased Sanctions, ECF No. 61. In that response, he argues his accounting filed on June 26, 2024, complies with his accounting obligations under the preliminary injunction. Id. at 7 (citing ECF No. 50). He also argues he should not be held in contempt for his failure to ensure access to his email and cloud-based storage accounts because he has acted in good faith to achieve compliance with the aspects of the preliminary injunction related to those accounts. Id. at 3–7. As to Palliparamban's accounting, the Court finds his submission filed on June 26, 2024, satisfied his obligation under paragraph 2 of the preliminary injunction order to “account for and deliver to The Wittern Group” a description of the “manner and location in which The Wittern Group's Confidential Information and Trade Secrets has been accessed, sent to, transferred, stored, saved, and/or downloaded or uploaded to ... cloud-based storage locations ... and webmail.” ECF No. 29 at 11–12. The Wittern Group's brief and exhibits raise questions about the accuracy of Palliparamban's accounting. See ECF No. 56-1 at 6–9. But the preliminary injunction does not require Palliparamban to file a supplemental accounting to correct inconsistencies between the accounting and evidence discovered in this case. See ECF No. 29 at 11–12. Such supplementation is unnecessary as it would duplicate the litigation of the merits of The Wittern Group's claims as this case proceeds through discovery and towards trial. See Fed. R. Civ. P. 1. On these grounds, The Wittern Group's motion is denied as to Palliparamban's accounting. As to Palliparamban's alleged failure to assist Lester in proceeding through multi-factor authentication to access Palliparamban's accounts, these are allegations of contempt not previously addressed by the Court. See ECF No. 56-1 at 9. In the Court's previous order on contempt sanctions, the Court reiterated a ruling issued at the show cause hearing, stating that if any confidential information accessed by Palliparamban “was saved on a cloud-based storage facility when accessed, the account utilizing that facility must be identified––along with the device or devices used to access that facility––and any credentials required to access the account and facility must be provided.” ECF No. 54 at 8. Palliparamban, at the time, denied that any data was accessed through or sent to a cloud-based storage facility, and the Court's findings of contempt were not premised on a failure to provide credentials for email or cloud-based storage accounts. ECF No. 50 ¶ 4; see ECF No. 54 at 9. The Wittern Group now argues Palliparamban's actions from June 26, 2024, through at least August 1, 2024, during which Palliparamban has failed to ensure access to email accounts and an iCloud account, demonstrate contempt of paragraph 3 of the preliminary injunction. ECF No. 56-1 at 6–10; ECF No. 63 at 2–3.[1] That paragraph states in part: “To the extent necessary or applicable, Palliparamban shall contemporaneously provide ... password and login information for any email account and cloud-based storage accounts to which he has access.” See ECF No. 29 at 12. Before the Court can rule on whether Palliparamban is in contempt of this provision, the Court must provide Palliparamban an opportunity to be heard and to show cause why he is not in contempt. See Mercer v. Mitchell, 908 F.2d 793, 766–67 (11th Cir. 1990). The Court thus withholds ruling on the remaining aspect of The Wittern Group's motion to increase sanctions until the Court has held a show cause hearing on these new allegations of contempt. Cf. id. *3 The Court has the “power to punish [contempt of court] by fine or imprisonment, or both, at its discretion” when individuals violate a lawful order. 18 U.S.C. § 401(3). “One of the overarching goals of a court's contempt power is to ensure that litigants [or their attorneys] do not anoint themselves with the power to adjudge the validity of orders to which they are subject.” Chi. Truck Drivers v. Brotherhood Labor Leasing, 207 F.3d 500, 504 (8th Cir. 2000) (citing United States v. United Mine Workers, 330 U.S. 258, 290 n.56 (1947)); see also id. at 507 (“[A] court's contempt power extends to non-parties who have notice of the court's order and the responsibility to comply with it.”). Palliparamban is ordered 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. In addition to filing a response to The Wittern Group's allegations, which he has already done, Palliparamban and The Wittern Group shall appear for a show cause hearing at 10:30 a.m. on Thursday, August 8, 2024. This hearing will also serve as a forum for oral argument on the aspect of The Wittern Group's motion that remains pending. Palliparamban's local counsel, Adam Junaid, is not required to attend the August 8, 2024 hearing. IT IS SO ORDERED. Dated this 2nd day of August, 2024. Footnotes [1] In his resistance, Palliparamban alleges that, as of July 26, 2024, he had successfully assisted Lester in accessing his Gmail account but had been unable to ensure Lester's access to his iCloud account, in part because “his phone was in Iowa” and he is in India. ECF No. 61 at 6, 9.