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U.S. 9th Circuit Court of Appeals
No. 95-56393
D.C. No.


G.M.L., INC., a Missouri
corporation; HIGHLAND MUSIC, INC.,

No. 97-55599
D.C. No.
Jerden Industries, Inc., dba Great OPINION
Northwest Music Company,
BBDO Worldwide Inc., dba
BBDO Worldwide Network,



No. 97-55597

D.C. No.



Appeals from the United States District Court
for the Central District of California
William D. Keller, District Judge, Presiding

Argued and Submitted
February 3, 1998--Pasadena, California

Filed April 10, 1998

Before: Betty B. Fletcher, Frank J. Magill,* and
Thomas G. Nelson, Circuit Judges.

Opinion by Judge Fletcher




Scott A. Edelman, Los Angeles, California; Jeannette M.
Bazis, Minneapolis, Minnesota, Robert Besser, Pacific Pali-
sades, California, for the plaintiffs-appellants.

Robert Besser, Pacific Palisades, California, for the

Scott A. Edelman, Los Angeles, California; Jeannette M.
Bazis, Minneapolis, Minnesota, for the defendants-appellees.



FLETCHER, Circuit Judge:

This case involves an attempt by the Kingsmen, a musical
group, to secure a rescission of the contract by which they
assigned to others the rights to their popular recording of the
hit song, "Louie, Louie." We review three actions consoli-
dated on appeal. In the first, the parties litigated the right to
rescind. In the second, the defendants sought a declaratory
judgment to limit the effect of the judgment of rescission.1 In
the third, the district court imposed contempt sanctions upon
the defendants for their refusal to comply with the judgment
of rescission. We affirm the district court in all respects.


The facts of this procedurally convoluted case are relatively
simple. The members of the Kingsmen seek to secure their
rights to the master recordings (the "Masters") of their hit
song, "Louie, Louie." The group made the recording over
thirty years ago. They then sold the Masters to one Specter
Records (first through their agent, Jerden Records, but ulti-
mately on their own behalf) in return for nine per cent of any
profits or licensing fees that the recording might generate. The
Kingsmen and Specter entered into their contract in 1968.
Specter's interest in the Masters was eventually transferred to
Gusto Records and GML, who were the named defendants in
the rescission action. The parties do not dispute that the
Kingsmen have never received a single penny of the consider-
able royalties that "Louie, Louie" has produced over the past
thirty years.

In 1993, the Kingsmen brought suit in federal district court
in California for rescission of the contract, basing their claim
entirely on actions (or inactions) by the defendants that fell
within the four-year statutory limitations period. After a full
trial, the district court ruled in plaintiffs' favor and granted the
rescission, restoring possession of the Masters to the Kings-
men. Defendants refused to comply with that judgment, how-
ever, instead filing a declaratory action in federal district court
in Tennessee. In the Tennessee action, defendants asked for
a declaration that plaintiffs were not entitled to any of the
income that continued to be generated by those licenses that
pre-existed the rescission. In the meantime, defendants stead-
fastly refused to comply with the first judgment and to return
possession of the Masters to the Kingsmen.

The district court in Tennessee transferred the declaratory
action to the Central District of California, returning it to the
district judge who had handled the original action. The judge
ruled, on summary judgment, that the rescission enforced in
the original action was effective as of the date when the
Kingsmen formally declared their intention to rescind -- the
date of the filing of the complaint -- and that defendants must
pay to the Kingsmen any royalties or profits that accrued
thereafter, whether from licenses entered into after the date of
rescission or from licenses that preexisted that date. The dis-
trict court also issued an order in aid of enforcement of its
first judgment, commanding defendants to turn over the Mas-
ters to plaintiffs forthwith. Finally, on plaintiffs' motion, the
district court found defendants in contempt of court for hav-
ing flagrantly violated the first judgment by refusing to turn
over the Masters in a timely fashion, and also by continuing
to misappropriate profits from the Masters by holding them-
selves out as the owners of the Masters and entering into
unauthorized licenses. Defendants appeal all of these rulings.

Highland Music and Stephen Hawkins (Highland's presi-
dent and sole shareholder) are also parties to this appeal.
Highland negotiated and managed many of the licenses issued
by GML and Gusto for "Louie, Louie" and was a party to the
declaratory action. Highland and Hawkins were both cited for
contempt by the district court for aiding and abetting GML
and Gusto in entering into the unauthorized, post-judgment
licenses. They appeal these rulings.

This action fell within the district court's diversity jurisdic-
tion. See 28 U.S.C. S 1332. The judgment of rescission, the
declaratory judgment, and the contempt order are all appeal-
able final orders. See 28 U.S.C. S 1291.

II. The Rescission Action


Gusto and GML's primary contention on appeal in the
rescission action is that the district court in California
exceeded its authority under the Due Process Clause of the
Federal Constitution in exercising personal jurisdiction over
the defendants.2 We review a district court's exercise of per-
sonal jurisdiction de novo. See Sinatra v. National Enquirer,
854 F.2d 1191, 1194 (9th Cir. 1988).

Defendants' claim comes to us in a rather odd posture.
Defendants filed a motion to dismiss for lack of personal
jurisdiction at the outset of the proceedings below. The dis-
trict court denied that motion, finding that plaintiffs had made
out a prima facie case that an exercise of jurisdiction was
proper. Defendants then failed to contest the issue of personal
jurisdiction any further in the proceedings before the district
court. They did not raise the issue in their responsive plead-
ings, nor in any motion for summary judgment, nor at trial.
Nonetheless, defendants argue on appeal that the judgment
below must be vacated because the present state of the record
is insufficient to support a finding, by a preponderance of the
evidence, that defendants were subject to the personal juris-
diction of the courts of California. This claim raises three
issues: (1) Did defendants completely waive their right to
appeal the district court's exercise of personal jurisdiction; (2)
If not, against what evidentiary standard should that exercise
of personal jurisdiction be judged on appeal, given the present
posture of this case; and (3) Measured against the applicable
standard, was the district court's conclusion that it could exer-
cise jurisdiction over defendants correct?


[1] The federal rules of civil procedure provide that "A
defense of lack of jurisdiction over the person . . . is waived
. . . (B) if it is neither made by motion under this rule nor
included in a responsive pleading . . . ." Fed. R. Civ. P. 12(h)
(1). The negative converse of this rule would thus suggest that
it is not waived if raised by motion. Other circuits have
reached this conclusion, holding that a defendant's motion to
dismiss for lack of personal jurisdiction, without more, is suf-
ficient to avoid the waiver provision embodied in Rule 12.
See Brownlow v. Aman, 740 F.2d 1476, 1483 n.1 (10th Cir.
1984); Adden v. Middlebrooks, 688 F.2d 1147, 1156-57 (7th
Cir. 1982). However, Rule 12 does not say that there are no
other means of waiving a defense of lack of jurisdiction over
the person. Plaintiffs argue that, even though defendants con-
tested the exercise of jurisdiction at the outset of the trial,
their failure to raise the issue again at any point in this vigor-
ously litigated proceeding should be construed as an acquies-
cence to suit in California and hence a waiver of any right to
contest the court's in personam jurisdiction on appeal.

[2] Plaintiffs' argument has some force. Rule 12(h)(1)
specifies the minimum steps that a party must take in order to
preserve a defense. It does not follow, however, that a party's
failure to satisfy those minimum steps constitutes the only cir-
cumstance under which the party will be deemed to have
waived a defense. Most defenses, including the defense of
lack of personal jurisdiction, may be waived as a result of the
course of conduct pursued by a party during litigation. See
Continental Bank, N.A. v. Meyer, 10 F.3d 1293, 1296-97 (7th
Cir. 1993) (affirming district court's finding that defendants'
conduct during litigation constituted waiver of personal juris-
diction); Yeldell v. Tutt, 913 F.2d 533, 538-39 (8th Cir. 1990)
(finding waiver where defendant raised personal jurisdiction
defense in manner that was technically timely, but late in trial
proceedings). For example, if a defendant were to engage in
"sandbagging" by raising the issue of personal jurisdiction on
a motion to dismiss, deliberately refraining from pursuing it
any further when his motion is denied in the hopes of receiv-
ing a favorable disposition on the merits, and then raising the
issue again on appeal only if he were unhappy with the dis-
trict court's ultimate decision, then we would not hesitate to
find that the defendant had waived any right to pursue the
defense. See Yeldell, 913 F.2d at 539. In the present case,
however, plaintiffs have not argued, or even suggested, that
defendants engaged in such deliberate, strategic behavior, nor
did the district court make any such finding. Nonetheless,
plaintiffs ask us to hold that defendants' inaction on the issue
of personal jurisdiction after the denial of their motion to dis-
miss, without more, constitutes a waiver of the issue for pur-
poses of appeal in this case.

The rule that plaintiffs urge upon us could have the conse-
quence that filing a motion under Rule 12 not only would not
necessarily suffice to preserve an objection to personal juris-
diction on appeal, but that it would never suffice in a case that
proceeds to a decision on the merits. We hesitate to adopt
such an unyielding rule, which might derogate from the base-
line standard that Rule 12 itself establishes. In most cases
where courts of appeals have found a defendant to have
waived its right to pursue a defense of personal jurisdiction on
appeal, even though the defendant raised the issue in a motion
or responsive pleading, other factors have been present that
militated in favor of such a finding. See, e.g., Rice v. Nova
Biomedical Corp., 38 F.3d 909, 915 (7th Cir. 1994)
("fiduciary shield" defense to personal jurisdiction found to
be waived where defendant failed to make evidentiary argu-
ments of any sort and declined to renew issue when invited
to do so by court); Continental Bank, N.A. v. Meyer, 10 F.3d
1293, 1296-97 (7th Cir. 1993) (affirming district court's
explicit finding that defendants' conduct during litigation
amounted to waiver of personal jurisdiction defense); Yeldell
v. Tutt, 913 F.2d 533, 539 (8th Cir. 1990) (finding waiver
where defendants failed to raise personal jurisdiction defense
in motion, raised issue for first time in answer, and then failed
to pursue issue any further).

We decline to adopt such a rule. Rather, we simply join our
sister circuits, see Brownlow v. Aram, 740 F.2d 1476, 1483
n.1 (10th Cir. 1984); Adden v. Middlebrooks, 688 F.2d 1147,
1156-57 (7th Cir. 1982), in finding that the minimum require-
ments of Rule 12 are satisfied when a defendant raises the
issue of personal jurisdiction in a timely motion to dismiss. In
the absense of other factors militating in favor of a finding of
waiver, this suffices to preserve the issue of personal jurisdic-
tion for appeal. Since there are no such additional factors in
this case, we find that defendants did not waive their right to
appeal the issue.


We must now determine what evidentiary standard the dis-
trict court's exercise of personal jurisdiction should be mea-
sured against, given the posture in which the claim reaches us
on appeal. As will be apparent, our conclusion that defendants
have not completely waived the defense of personal jurisdic-
tion does not mean that no adverse consequences flow from
their failure to contest the issue following the denial of their
motion to dismiss.

Defendants correctly point out that plaintiffs, in opposing
the motion to dismiss, were only required to make, and only
made, a prima facie showing that personal jurisdiction was
proper. Defendants also point out, correctly, that plaintiffs
would have borne the heavier burden of prevailing on the
jurisdictional issue by a preponderance of the evidence if the
issue had been contested at trial. See Rano v. Sipa Press, 987
F.2d 580, 587 n.3 (9th Cir. 1993); Sinatra v. National
Enquirer, 854 F.2d 1191, 1194 (9th Cir. 1988). From these
two solid premises, however, defendants reach an erroneous
conclusion. They claim that, despite their failure at trial to put
plaintiffs to the test of meeting a preponderance standard on
the jurisdictional issue, defendants can prevail on appeal if the
existing record does not support a finding, by a preponderance
of the evidence, that jurisdiction is proper. That is, defendants
claim that the burden rested with the plaintiffs to pursue the
jurisdictional issue proactively during trial in order to develop
a record that could satisfy a preponderance standard, despite
defendants' failure to contest the issue further after losing
their motion. This is incorrect.

[3] The rule that a party must raise a defense at trial or
waive the right to pursue it on appeal is based on the proposi-
tion that parties should develop a full record on all contested
issues and afford the district court an opportunity to rule on
those issues before they may enjoy the benefit of appellate
review. See Hormel v. Helvering,
312 U.S. 552
, 557-59
(1941); Romain v. Shear, 799 F.2d 1416, 1419 (9th Cir. 1986)
(declining to reach new issue where "facts relevant to [ques-
tion at issue] are not fully developed"). In this case, none of
the parties developed a record on the issue of personal juris-
diction beyond the few submissions each made in litigating
the defendants' motion to dismiss. From the plaintiffs' per-
spective, there must have seemed little reason to do so: Plain-
tiffs prevailed on the personal jurisdiction question on pre-
trial motion, and defendants did not contest the issue any fur-
ther. Defendants cannot now capitalize upon the plaintiffs'
early victory. Rather, defendants may seek appellate review
only of the issue that they actually contested below: whether
or not plaintiffs made out a prima facie case for personal
jurisdiction, and whether the district court was correct in
granting the motion to dismiss. This rule has been implicit in
cases, in this circuit and others, where a defendant has
appealed an adverse decision on personal jurisdiction after
contesting the issue only in the context of a motion to dismiss.
See, e.g., Rano v. Sipa Press, 987 F.2d 580, 587 n.3 (9th Cir.
1993); Brownlow v. Aman, 740 F.2d 1476, 1483 (10th Cir.
1984). We now adopt that rule explicitly. Having failed to
contest the issue further after losing their motion to dismiss,
defendants may appeal only the district court's holding that
plaintiffs made out a prima facie case sufficient to support an
exercise of personal jurisdiction.


[4] Having thus narrowed the issue before us, we now
affirm the district court's exercise of personal jurisdiction
over the defendants. In order to support an exercise of specific
personal jurisdiction, plaintiffs must demonstrate that defen-
dants had purposeful contacts with California, that the present
cause of action arose out of those contacts, and that exercising
jurisdiction over defendants would not be unreasonable. See
Roth v. Garcia Marquez, 942 F.2d 617, 620 (9th Cir. 1991);
Sinatra v. Nat'l Enquirer, 854 F.2d 1191, 1195 (9th Cir.
1988). In support of their position before the district court,
plaintiffs offered a series of licensing agreements that defen-
dants entered into during the 1980s and early -90s with War-
ner Special Products ("Warner") that granted Warner
permission to use the "Louie, Louie" Masters, and documents
suggesting that defendants made similar agreements with
Rhino Records. The licensing agreements and some accompa-
nying letters describe Warner as being "of . . . Burbank, CA,"
and the Rhino documents describe Rhino's location as "Santa
Monica, CA." These documents give rise to a strong inference
that defendants engaged in negotiations with California com-
panies that resulted in the granting of licenses for the use of
"Louie, Louie," that they probably wrote letters and made
telephone calls to the California offices of these companies in
conducting their negotiations, that they quite possibly traveled
to California as a part of these negotiations, and that the
licenses may actually have been granted (i.e. the contracts
formed) in California.

[5] If these purposeful contacts did occur, then they would
suffice to support an exercise of specific personal jurisdiction.
Contract negotiations are classic examples of the sort of con-
tact that can give rise to in personam jurisdiction, see Burger
King Corp. v. Rudzewicz,
471 U.S. 462, 473
(1985); McGee
v. International Life Ins.,
355 U.S. 220, 222
-23 (1957);
Corporate Invest. Bus. Brokers v. Melcher, 824 F.2d 786, 789
(9th Cir. 1987), and the Kingsmen's cause of action "arises
out of" those contacts, as it is the failure of the defendants to
provide royalties on these and other licensing agreements that
serves as the basis for plaintiffs' suit. There is nothing excep-
tional on the face of this case that would suggest that exercis-
ing jurisdiction over defendants in a forum where they took
actions that allegedly constituted a breach of the contract at
issue in the case would unduly burden either the parties or the
interests of any forum. See Roth, 942 F.2d at 623. Thus, the
district court was correct in concluding that the licensing
agreements suffice to make out a prima facie case supporting
the exercise of personal jurisdiction over defendants for pur-
poses of this suit.

Had defendants pursued their defense further after losing
their motion to dismiss, perhaps they could have rebutted, by
a preponderance of the evidence, the inferences to which the
licenses give rise. Having failed to pursue the issue below,
however, defendants may not now enjoy the benefits of this
higher evidentiary standard on appeal. We therefore affirm
the district court's exercise of in personam jurisdiction over


[6] Defendants also contend that the district court erred in
holding that the statute of limitations does not bar a remedy
of rescission in this case. In California, the statute of limita-
tions for an action seeking rescission of a contract is four
years. See Cal. Code Civ. Proc. S 337. Specifically, the statute
provides that an aggrieved party must commence such an
action within four years "from the date upon which the facts
that entitled the aggrieved party to rescind occurred." Id. Both
parties agree that the period of limitations has long since run
with respect to the first occasions on which defendants
breached their agreement. Both parties also agree that defen-
dants have breached their agreement repeatedly over the
course of the past thirty years, and did so, repeatedly, within
four years of the time that plaintiffs commenced this action.
Defendants' claim is that, even in the face of multiple and
continuing breaches of the agreement, the California statute
should be read to bar any action that is not commenced within
four years of the first occasion on which an aggrieved party
could have requested rescission. Defendants cite no authority
for this proposition, and we reject it.

[7] In analyzing requests for rescission where there have
been multiple breaches under an installment contract, Califor-
nia courts have held that each breach starts the clock afresh
for statute of limitations purposes. In Conway v. Bughouse,
Inc., 105 Cal. App. 3d 194 (1980), for example, a California
appeals court looked to the manner in which money would be
paid under a pension contract in determining how a party's
failure to make any given payment should affect the tolling of
the statute of limitations.

[T]he total amount of money to be paid to[the pen-
sioner] is not a fixed sum which is to be paid out
over a period of time. To the contrary, the total
amount owed is unascertainable until the date of[the
pensioner's] death because each payment is separate
and contingent upon [the survival of the pensioner
and his adherence to the terms of the contract]. As
each payment is separable from the others and is not
a part of a total payment, the agreement should logi-
cally be considered an installment contract for pur-
poses of determination of the application of the
statute of limitations.

Id. at 199-200. The same holds true in the present case: There
is no fixed amount to be paid out over time under the Kings-
men's contract, but rather a continuing obligation to pay a
portion of the profits and royalties on "Louie, Louie" as the
recording gets used over time.

[8] The district court in this case made it clear that, in
determining whether rescission was warranted and appropri-
ate, it was relying upon breaches that had occurred within the
limitations period. To find for defendant under these circum-
stances would be to hold that California law forever bars a
party from seeking a remedy of rescission after it has once
passed up the opportunity to do so, regardless of the nature of
any future breaches of the other party's obligations. We have
found no authority that would support such a reading of Cali-
fornia law. We therefore affirm the district court's conclusion
that the statute of limitations does not bar rescission of the
contract in this case.


Defendants have raised a host of arguments on appeal con-
cerning prejudice they claim they will suffer as a result of the
rescission, alleged threats to the rights of third parties, and
actions allegedly taken by the Kingsmen's former agent that,
defendants claim, raise an equitable bar to rescission. They
failed to raise any of these arguments before the district court.

We apply a "general rule" against entertaining arguments on
appeal that were not presented or developed before the district
court. Bolker v. Commissioner of Internal Revenue, 760 F.2d
1039, 1042 (9th Cir. 1985). There are three exceptions to this
rule: (1) "in the `exceptional' case in which review is neces-
sary to prevent a miscarriage of justice or to preserve the
integrity of the judicial process," (2) "when a new issue arises
while appeal is pending because of a change in the law," or
(3) "when the issue presented is purely one of law and either
does not depend on the factual record developed below, or the
pertinent record has been fully developed." Id. (citations omit-
ted). None of these exceptions apply to the instant case.
Defendants' newly minted arguments are all inherently fac-
tual in nature; none depends upon a change in the law applica-
ble to this dispute; and none must be heard in order to prevent
a miscarriage of justice. We therefore find that defendants
have waived these arguments, and we will not consider them.

III. The Declaratory Action

The district court issued a declaration that the judgment of
rescission entitles plaintiffs to all post-rescission licensing
income from the Masters, even post-rescission income from
licenses originally granted before the date of rescission.
Defendants claim that the district court's ruling violates the
principle of res judicata. At first blush, this claim seems
somewhat unusual, as it was defendants who initiated this
declaratory action, asking for a declaration, on the merits, that
plaintiffs were not entitled to the licensing income. Ordinar-
ily, it is the party resisting a claim for relief, rather than the
party initiating the claim, who asserts that his opponent is
barred from recovering because the disputed matter is res
judicata. Res judicata is a waivable defense. See Fed. R. Civ.
Proc. 8(c). Thus, as an initial matter, we must decide whether
defendants have waived any res judicata objections.

[9] In a declaratory action, of course, the definitions of
"claimant" and "respondent" are effectively reversed. Fre-
quently, the point of a declaratory action is to assert a defense
anticipatorily, and a defense of res judicata may serve as the
basis for a declaratory action as well as any other affirmative
defense. If defendants had styled this action as a request for
a declaration that any claim of right the Kingsmen might
assert to the disputed licensing income is barred by the doc-
trine of res judicata and cannot be heard on the merits by any
court, then they would not face any problem of waiver. But
that is not what defendants did. Defendants requested a decla-
ration affirmatively asserting that they had a right to the dis-
puted licensing income and that plaintiffs had no right to that
income. They raised their res judicata argument only in
response to plaintiffs' motion for summary judgment. Thus,
rather than saying, "we wish the court to declare that the judg-
ment of rescission bars it from making any ruling on the
licensing income because the matter is res judicata, " defen-
dants said, "we wish the court to declare that the licensing
income belongs to us, and, incidentally, you have no choice
but to grant us such a declaration, because res judicata bars
plaintiffs from opposing the merits of our position. " This they
cannot do. By requesting a declaration, on the merits, that
they are entitled to the very licensing income that is in dis-
pute, defendants have waived the right to assert any defense
of res judicata that they might have had.

[10] Moreover, even if defendants had not waived the right
to assert the defense, their res judicata argument would fail on
the merits. California employs a doctrine of "primary rights"
in administering the doctrine of res judicata. See Slater v.
Blackwood, 15 Cal.3d 791, 795 (1975); Eichman v. Fotomat
Corp., 759 F.2d 1434, 1438 (9th Cir. 1985)."Under Califor-
nia law, [a] claim arises from the harm suffered, as opposed
to the particular theory of the litigant. Even when multiple
legal theories for recovery exist, one injury gives rise to only
one claim for relief." Eichman, 759 F.2d at 1438. In their
attempt to fit their claim within the California res judicata
doctrine, defendants characterize the disputed licensing
income as "consequential damages" that plaintiffs "could
have sought" in the original action for rescission, arguing that
the two actions involved the same "primary rights." This is
incorrect. The first suit involved the Kingsmen's primary
contractual rights, which defendants violated by not paying
them royalties; the second suit involved the Kingsmen's
(newly-acquired) primary ownership rights, which defendants
violated by continuing to appropriate (and hence, by misap-
propriating) the licensing income from the Masters. The dis-
puted licensing income does not constitute "consequential
damages;" it is a part of the property rights enjoyed by the
owner of the Masters, an incident of the ownership rights that
plaintiffs were awarded in the first action. The doctrine of res
judicata is no bar to the declaratory judgment entered by the
district court.3

[11] On the merits, the district court found that the rescis-
sion of the Kingsmen's contract was effective as of the date
of the filing of the Kingsmen's complaint. We agree. Under
California law, "a party to a contract [can ] rescind it and . . .
such rescission [can] be accomplished by the rescinding party
by giving notice of the rescission and offering to restore
everything of value which [the rescinding party has]
received." Runyan v. Pacific Air Indus., 2 Cal.3d 304, 311
(1970); see also id. at 311-13. When a party gives notice of
rescission, it has effected the rescission, and any subsequent
judicial proceedings are for the purpose of confirming and
enforcing that rescission. See id. at 311-12. Thus, when the
Kingsmen filed suit in 1993, they rescinded the contract and
became owners of the Masters. The lawsuit that followed con-
firmed that their rescission was a proper one and resulted in
an order enforcing that rescission. The district court correctly
ruled that, as the owners of the Masters, the Kingsmen are
entitled to all income derived from the exploitation of the
recordings following September 29, 1993, the date of the
notice of rescission.

IV. The Contempt Proceedings


Defendants object to the contempt citation issued by the
district court. First, they claim that the district court erred in
finding that contempt was warranted at all. We review the dis-
trict court's order for abuse of discretion. See In re Dual-Deck
Video Cassette Recorder Antitrust Litig., 10 F.3d 693, 695
(9th Cir. 1993). Beyond finding contempt, the district court
may impose a sanction for the contempt only if it finds that
the party requesting the sanction has proven contempt by
clear and convincing evidence. See id.; Vertex Distrib. v. Fal-
con Foam Plastics, 689 F.2d 885, 889 (9th Cir. 1982).

We address first the contempt citation. An appellate court
should not reverse a finding of contempt "unless[it has] a
definite and firm conviction that the district court committed
a clear error of judgment after weighing the relevant factors."
In re Dual-Deck, 10 F.3d at 695. The district court found that
two aspects of defendants' conduct warranted the contempt
citation. First, it found that GML and Gusto had not returned
the Masters to the Kingsmen within thirty days of the date of
judgment, as the judgment requires, nor had they taken any
reasonable steps whatsoever to comply with that requirement.
Second, the court found that GML, Gusto, Highland and
Hawkins had continued to pursue, negotiate and enter into
licenses for the use of the Masters, despite the clear import of
the judgment that they no longer owned the rights to the Mas-
ters and should cease such activities. It also found that they
had refused to provide an accounting of these activities to the
Kingsmen when asked. Indeed, the court found that the defen-
dants had made no good faith efforts to comply with the
demands of the judgment at all, but rather had deliberately
and contemptuously flouted the court's authority.

[12] The district court did not abuse its discretion in arriv-
ing at these conclusions. Far from it. Defendants do not even
attempt to dispute that they failed to return the Masters for
more than a year following the judgment, nor that they
entered into various third-party licenses after the district court
ordered the rescission. Rather, they offer various excuses as
to why their repeated refusals to comply with the judgment
were not their fault and should be excused. But "there is no
good faith exception to the requirement of obedience to a
court order," In re Dual-Deck, 10 F.3d at 695, nor, indeed, is
there evidence in this case of good faith on the part of defen-
dants in any event. The district court offered convincing rea-
sons, supported by the record, for finding all of the
defendants' excuses entirely unconvincing. Defendants'
excuse for not returning the Masters promptly, for example,
was a professed concern for not shipping the fragile tapes in
a manner that would expose them to rough handling or
extreme temperatures that might jeopardize their safety. How-
ever, when the district court finally ordered the defendants to
deliver the Masters forthwith, defendants simply put them in
a cardboard box and shipped them via standard UPS, despite
the plaintiffs willingness to make any reasonable accommoda-
tions to ensure the Masters' safety during shipping and stor-
age. Defendants' other explanations for their actions are
similarly unconvincing.

[13] Nor did the district court abuse its discretion in apply-
ing its contempt citation to Highland and Hawkins. Highland
and Hawkins were not parties to the underlying action. How-
ever, Federal Rules of Civil Procedure 70 and 71 provide for
the enforcement of judgments against non-parties in limited
circumstances. "Rule 71 was intended to assure that process
be made available to enforce court orders in favor of and
against persons who are properly affected by them, even if
they are not parties to the action." Westlake North Property
Owners Ass'n v. Thousand Oaks, 915 F.2d 1301, 1304 (9th
Cir. 1990). "[T]o be held liable in contempt, it is necessary
that a non-party respondent must either abet the defendant [in
violating the court's order] or be legally identified with him,"
NLRB v. Sequoia District Council of Carpenters, 568 F.2d
628, 633 (9th Cir. 1977) (quotation omitted), and that the non-
party have notice of the order, see id. See also Stotler & Co.
v. Able, 870 F.2d 1158, 1164 (7th Cir. 1989); Quinter v.
Volkswagen of America, 676 F.2d 969, 972-73 (3d Cir. 1982).
Highland and Hawkins certainly had notice of the contents of
the judgment for rescission, a fact they do not deny, and evi-
dence concerning their licensing activities amply supports a
finding that they flagrantly and deliberately aided and abetted
GML and Gusto in violating the express terms of the judg-
ment, granting licenses when they had previously stipulated
that GML would transfer no rights to Highland pending the
outcome of the dispute and continuing to do so following the
judgment, when, as Highland knew, GML and Gusto no lon-
ger owned the rights to the Masters. This evidence is suffi-
cient to support a finding of contempt against Highland and
Hawkins, even though they were not parties to the underlying


Defendants next argue that the district court employed
improper procedures in imposing its contempt sanctions. The
district court initiated the contempt proceedings by issuing an
order to show cause why defendants should not be sanctioned.
It then elicited affidavits and extensive briefing on the issue
from all parties. It did not, however, hold a full-blown eviden-
tiary hearing at which the parties could present live testimony
(a step that neither of the parties requested); rather, the district
court issued its contempt sanctions at the close of the hearing
at which the parties argued the order to show cause. Defen-
dants claim that the failure to hold a full-blown hearing is a
denial of due process that invalidates the sanctions the district
court imposed against them.

[14] Defendants are correct that a district court ordinarily
should not impose contempt sanctions solely on the basis of
affidavits. See Hoffman et al. v. Beer Drivers & Salesmen's,
536 F.2d 1268, 1276-77 (9th Cir. 1976). However, where, as
here, the affidavits offered in support of a finding of contempt
are uncontroverted, we have held that a district court's deci-
sion not to hold a full-blown evidentiary hearing does not vio-
late due process. "A trial court may in a contempt proceeding
narrow the issues by requiring that affidavits on file be con-
troverted by counter-affidavits and may thereafter treat as true
the facts set forth in uncontroverted affidavits. That is what
the trial court did here." Hoffman, 536 F.2d at 1277. Indeed,
in Thomas, Head and Greisen Employees Trust v. Buster, 95
F.3d 1449 (9th Cir. 1996), we rejected arguments very similar
to the ones defendants raise.

[Appellants] argue that the [district] court merged
into one action [ -- an order-to-show-cause hearing
-- ] what should have been a five-step process: (1)
deciding whether to grant plaintiffs' motion to show
cause; (2) issuing the show cause order; (3) provid-
ing a hearing; (4) making a finding of contempt on
the basis of affidavits and other evidence; and (5)
determining and imposing sanctions.

Id. at 1458. As we explained, the procedural steps that the
appellants in Thomas, Head requested, and that defendants
demand here, were not requirements whose elimination would
violate due process.

We find that [appellants] had ample notice and an
opportunity to respond to the possibility that the
court would find them in contempt. The district court
expressly requested briefing in response to . . .
[appellees' motion, and appellants] presented no
admissible evidence to support their claim that they
could not comply with the injunction. Although the
district court did not set an evidentiary hearing on
the contempt issue, the record reflects that [appel-
lants did not ask] for such a hearing . . . . Given these
facts and the overwhelming evidence supporting [a
finding of contempt,] we think it is clear that the dis-
trict court's actions did not constitute a denial of due

Id. Defendants have not described any new evidence that they
could present at a hearing, nor any existing evidence that they
would challenge, if such a hearing were to be ordered. The
district court's decision not to hold a full-blown evidentiary
hearing before imposing sanctions did not deny due process
of law to the defendants.


Finally, Hawkins argues that he never received adequate
notice that he was being placed in personal jeopardy in the
contempt proceedings against Highland, GML and Gusto.
Rather, he argues that the first mention that anyone made of
Hawkins being personally bound by the contempt proceedings
was when the district court issued its proposed findings of fact
and law in support of a finding of contempt and requested
comments and objections from the parties. Hawkins argues
that it would deprive him of due process of law to hold him
in contempt or to sanction him personally without having
afforded him notice that not only his company, but he person-
ally, was being placed in jeopardy.

[15] Whatever merits Hawkins' claim might have, he failed
to raise this objection in the district court. It is not disputed
that Hawkins was present throughout the proceedings and par-
ticipated actively in Highland's defense. When the district
court named Hawkins in the proposed findings of fact and
conclusions of law made as the foundation of its contempt
order, Hawkins could and should have objected to the district
court's failure to give him notice that he would be personally
bound by the proceedings. He failed to do so, even though
Highland and the other defendants submitted objections to the
proposed findings that repeatedly argued, on the merits, that
"Mr. Hawkins, as an individual," should not be held in con-
tempt. Neither Hawkins nor, indeed, the defendants offered
any excuse for failing to raise the argument of lack of notice
to Hawkins.

[16] Infirmities to the notice afforded a defendant in a civil
action are waivable. See Fed. R. Civ. Proc. 12(h)(1) ("A
defense of . . . insufficiency of process . . . is waived . . . if
it is neither made by motion under this rule nor included in
a responsive pleading.") In the unusual situation presented
here, we find the most sensible application of Rule 12 to
require that Hawkins have raised any objection of lack of
notice in the extensive objections to the proposed findings of
fact and conclusions of law that defendants filed before judg-
ment was entered, which was, functionally, a "responsive
pleading" to the district court's expressed intention to bind
Hawkins personally to the contempt proceeding. While defen-
dants raised a wide variety of arguments on their own and
purportedly on Hawkins' behalf in their objections, they made
no mention of Hawkins' claims of lack of notice that he
would be personally bound by the contempt proceedings. We
therefore find that Hawkins has waived any objections on that


The district court's rulings in these consolidated actions are
well-reasoned and supported by ample evidence in the record.
We affirm in all respects._______________________________________________________________


*Honorable Frank J. Magill, Senior United States Circuit Judge for the
Eighth Circuit, sitting by designation.
1 For simplicity's sake, we will refer to the Kingsmen as "plaintiffs" and
Gusto et al. as "defendants" throughout this opinion, although the parties
technically switched roles in the declaratory action.
2 California's "long-arm" statute extends as far as federal due process
limitations allow. See Cal. Civ. Proc. CodeS 410.10; Sinatra v. National
Enquirer, 854 F.2d 1191, 1194 (9th Cir. 1988). Thus, we need not conduct
a separate inquiry to determine whether the exercise of jurisdiction
exceeded any statutory limitations.
3 Defendants also claim that a material issue of fact exists as to whether
plaintiffs, in the action for rescission, waived the right to recover the
"consequential damages" of the disputed licensing income. The district
court correctly found that no issue of material fact exists on this question.
Furthermore, as our holding makes clear, the licensing income is not
"damages" and so could not have been comprised in any "waiver of a right
to seek damages" in any event.