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No.

11IN THE

Supreme Court of the United States

JOHN ACORD AND MARCELLA ORTEGA, Petitioners, v. YOUNG AGAIN PRODUCTS, A MARYLAND CORPORATION, Respondent.

ON PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF A PPEALS FOR THE FOURTH CIRCUIT

PETITION FOR A WRIT OF CERTIORARI

JOE A LFRED IZEN, JR. Counsel of Record 5222 Spruce Street Bellaire, Texas 77401 (713) 668-8815 jizen@comcast.net Attorney for Petitioners

241916

A
(800) 274-3321 (800) 359-6859

i QUESTIONS PRESENTED 1. WAS PETITIONER ACORDS INCARCERATION FOR FAILURE TO PAY RULE 11 (F.R.Civ.P.) SA NCTIONS IMPRISONMENT FOR DEBT WHICH VIOLATED THE TEXAS AND UNITED STAT ES CONST I T U T IONS A N D 2 8 U. S .C. SECTION 2007(a)? 2. MAY A FEDERAL COURT ETHICALLY PERMIT A CLIENTS ATTORNEY TO: (a) ADVISE HIS CLIENT THAT SHE NEED NOT APPEAR AT A HEARING WHERE A DEFAULT JUDGMENT IS THREATENED? (b) BLAME HIS CLIENT FOR HIS OWN CONDUCT WHICH IS THE BASIS OF A CLAIM FOR DEFAULT JUDGMENT WHILE SHE IS ABSENT FROM THE HEARING; AND (c) WITHDRAW AT THE HEARING WHILE HIS CLIENT IS ABSENT AND ALLOW EX PARTE ENTRY OF A J UDGMENT AGA INST THE CLIENT?

ii TABLE OF CONTENTS Page QUESTIONS PRESENTED . . . . . . . . . . . . . . . . . . TABLE OF CONTENTS . . . . . . . . . . . . . . . . . . . . . TABLE OF APPENDICES . . . . . . . . . . . . . . . . . . . TABLE OF CITED AUTHORITIES . . . . . . . . . . . OPINIONS BELOW. . . . . . . . . . . . . . . . . . . . . . . . . . STATEMENT OF JURISDICTION . . . . . . . . . . . . CONSTITUTIONAL AND STATUTORY PROVISIONS INVOLVED . . . . . . . . . . . . . . . . . . . . STATEMENT OF THE CASE . . . . . . . . . . . . . . . . REASONS FOR GRANTING THE PETITION. . I. PETITIONER ACORDS INCARCERATION FOR FAILURE TO PAY RULE 11 (F.R.Civ.P.) SANCTIONS WAS IMPRISONMENT FOR DEBT WHICH VIOLATED THE TEXAS AND UNITED STATES CONSTITUTION, AND 28 U.S.C. 2007(a) . . . . . . . . . . . . . . . . i ii iv v 1 1 1 1 4

iii Table of Contents Page II. F E D E R A L C O U R T S M A Y N O T ETHICALLY PERMIT A CLIENTS ATTORNEY TO: (a) ADVISE HIS CLIENT THAT SHE NEED NOT APPEAR AT A HEARING WHERE A DEFAULT JUDGMENT IS THREATENED; (b) BLAME HIS CLIENT FOR HIS OWN CONDUCT WHICH IS THE BASIS OF A CLAIM FOR DEFAULT JUDGMENT WHILE SHE IS ABSENT FROM THE H E A RI NG; A N D (c) W I T H DR AW AT T H E H E A RI NG W H I LE H I S CLIENT IS ABSENT AND ALLOW EX PARTE ENTRY OF A JUDGMENT AGAINST THE CLIENT . . . . . . . . . . . . . . . CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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iv Table of Contents Page APPENDIX A UNPUBLISHED OPINION OF THE UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT, FILED DECEMBER 23, 2011 . . . . . . . . . . . . . . . APPENDIX B ORDER OF THE UNITED STATES DISTRICT COURT FOR THE DI S T R IC T OF M A RY L A N D, F I L ED JUNE 8, 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . APPENDIX C ORDER OF THE UNITED STATES DISTRICT COURT FOR THE DI S T R IC T OF M A RY L A N D, F I L ED MARCH 25, 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . APPENDIX D ORDER OF THE UNITED STATES DISTRICT COURT FOR THE DI S T R IC T OF M A RY L A N D, F I L ED NOVEMBER 17, 2008 . . . . . . . . . . . . . . . . . . . . . . APPENDIX E ORDER DENYING PETITION FOR REHEARING EN BANC OF THE UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT, FILED FEBRUARY 14, 2012 . . . . . . . . . . . . . . . . . . . . . . .

1a

31a

35a

40a

43a

APPENDIX F RELEVANT CONSTITUTIONAL PROVISIONS, STATUTES AND RULES . . . . 44a

v TABLE OF CITED AUTHORITIES Page CASES Aetna Cas. and Surety Co. v. Markarian, 114 F. 3d 346 (1st Cir. 1997) . . . . . . . . . . . . . . . . . . BG & E v. Commercial Union, 113 Md. App. 540, 688 A.2d 496 (1997) . . . . . . . . . 4 12

Combs v. Ryans Coal Company, Inc., 785 F.2d 970, rehg denied, 791 F.2d 169 (11th Cir. 1986), cert. denied, 479 U.S. 853, 107 S. Ct. 187, 93 L. Ed. 2d 120 (1986) . . . . . . . . . . . . . . . . . . . . . . 4, 6 Cutting v. Van Fleet, 252 F. 100 (9th Cir. 1918) . . . . . . . . . . . . . . . . . . . . Daniels v. U.S., 54 F.3d 290 (7th Cir. 1995) . . . . . . . . . . . . . . . . . . . Edsall v. Penn Central Transportation Co., 479 F.2d 33 (6th Cir. 1973) . . . . . . . . . . . . . . . . . . . In Re: Estate of Bonham, 817 A.2d 1.92 (D.C. 2003) . . . . . . . . . . . . . . . . . . . . 6 13 17 4

Gibbs v. Lappies, 828 F. Supp. 6 (D.N.H. 1993) . . . . . . . . . . . . . . . . 15, 16 Industrial Building Materials, Inc. v. Interchemical Corp., 437 F.2d 1336 (9th Cir. 1970) . . . . . . . . . . . . . . . . .

17

vi Cited Authorities Page Matter of Morris, 12 B.R. 321 (Bankr.N.D.Ill. 1981) . . . . . . . . . . . . . Motta v. District Director, Immigration and Naturalization Service, 869 F. Supp. 80 (D.Mass. 1994) . . . . . . . . . . . . . . . Reitzakis v. Loy, 490 F.2d 1132 (4th Cir. 1974) . . . . . . . . . . . . . . . . . Richmark Corp. v. Tenderfalling Consultants, 959 F.2d 1468 (9th Cir. 1992) . . . . . . . . . . . . . . . . . RZS Holdings v. PDVSA Petroleo, 506 F.3d 350 (4th Cir. 2007) . . . . . . . . . . . . . . . . . . Saenz, 2009, U.S. Dist. Lexis 77274 . . . . . . . . . . . . . . . . . Shufer v. Heritage Bank, 720 F.2d 1141 (9th Cir. 1983) . . . . . . . . . . . . . . . . . State v. Emanuel, 139 N.H. 57, 649 A.2d 53 (1994) . . . . . . . . . . . . . . . Sturges v. Crowinshield, 17 U.S. 120, 4 L. Ed. 529 (1819) . . . . . . . . . . . . . . United States v. Wright, 845 F. Supp. 1041 (D.N.J. 1994), affd, 46 F.3d 1120 (3d Cir. 1994) . . . . . . . . . . . . . . . . . . . 5

14 17 4 8, 9 3 4 14 6

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vii Cited Authorities Page In Re: Virginia Information Systems Corp., 932 F.2d 338 (4th Cir. 1991) . . . . . . . . . . . . . . . . . . STATUTES U.S. Const. amend V . . . . . . . . . . . . . . . . . . . . . . . . . . 28 U.S.C. 1254(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . 1, 7 1 10

28 U.S.C. 2007. . . . . . . . . . . . . . . . . . . . . . . . . . . 1, 4, 6, 7 Tex. Const. art. I, 18 . . . . . . . . . . . . . . . . . . . . . . . 1, 5, 7 RULES Code of Judicial Conduct for United States Judges, Canon 3(A)(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Federal Rule of Civil Procedure Rule 11 . . . . . . . . 3, 4, 6 Federal Rule of Civil Procedure Rule 16 . . . . . . . . . 2

N.H. R. PROF. CONDUCT 1.16(b)(4) . . . . . . . . . . . 14, 15 Rule 1.16(b) of the Maryland Rules of Professional Conduct . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Maryland Local Rule 101.2 . . . . . . . . . . . . . . . . . . . . 11 10

1 OPINIONS BELOW The Opinion of the United States Court of Appeals for the Fourth Circuit which was not reported is set forth in Appendix A. STATEMENT OF JURISDICTION The Judgment of the Court of Appeals was entered on December 23, 2011. Petitioners timely led a Motion for Rehearing En Banc which was denied by the Fourth Circuit Court of Appeals on February 14, 2012. The jurisdiction of this Court is invoked under 28 U.S.C. 1254(1). CONSTITUTIONAL AND STATUTORY PROVISIONS INVOLVED The constitutional provisions involved are United States Constitution, Amendment V; and Texas Constitution, Article One, Section 18. The statutory provision involved is 28 U.S.C. 2007(a), imprisonment for debt. See Appendix F, P. 44a. STATEMENT OF THE CASE On August 20, 2003, Respondent, Young Again Products, Inc., (YOUNG AGAIN), sued Petitioners, John Acord (ACORD), and Marcella Ortega (ORTEGA), for trade mark infringement. Appendix A, PP. 2a - 3a. Young Again led a Motion for Preliminary Injunction seeking to enjoin Acord and Ortega from using Young Agains trademarks and the name of Young Agains President,

2 Roger Mason, and Masons copyright protected works. Appendix A, P. 3a. On April 16, 2004, Young Again led a Motion for Preliminary Injunction and for Contempt. Appendix A, P. 4a. On May 25, 2004, Young Again, Acord, and Ortega, entered into a consent injunction under which each would refrain from making disparaging remarks about the other. Appendix A, P. 4a. On September 3, 2004, Young Again led a third Motion for Contempt alleging violations of the consent injunction. Appendix A, P. 5a. When Acord received a disparaging email which Young Again later admitted having sent a customer, Robert Gubbi, Acord led a pro se Motion to Enforce the Consent Injunction against Young Again on December 7, 2007. Acords ling prompted Young Again to le a sanctions Motion against Acord under Federal Rule of Civil Procedure 11. Appendix A, P. 10a. The District Court denied Acords Motion to Enforce and awarded Young Again sanctions in the amount of $24,357.00. Appendix A, P. 11a; Appendix D, P. 41a. The District Court set the case for jury trial and directed the parties le a Pretrial Order by March 2, 2009. Appendix A, P. 11a. On March 23, 2009, the Trial Court held a pretrial hearing, allowed Ortegas attorney, Larry Laubscher, (LAUBSCHER), to withdraw as Ortegas counsel of record, and entered a default judgment against Ortega in the amount of $3,832,832.40 under Federal Rule of Civil Procedure 16. Appendix A, PP. 13a, 14a.

3 The Court of Appeals recited a litany of procedural defaults and malfeasances committed by Laubscher on which the Court of Appeals based its af rmance of the default judgment. Appendix A, PP. 11a, 12a, and 13a. The District Court ordered Acord to pay the $24,357.00 sanction within thirty days of March 25, 2009. Appendix A, P. 14a. On August 6, 2009, the District Court held Acord in contempt for failure to pay the Rule 11 sanction and issued a warrant for Acords arrest. Appendix A, P. 15a. The Court of Appeals Opinion admits that Acord was arrested under color of the Maryland District Courts arrest warrant process and con ned in the Southern District of Texas where he led and pursued a Writ of Habeas Corpus. Appendix P. 15a, fn. 7. Acord spent a combined ninety-seven days in jail in Texas and in the Districts of Maryland and Washington, D.C., where he was transferred and not released until November 17, 2009. See Saenz,, 2009, U.S. Dist. Lexis 77274. Neither this Court nor any other Federal Court of Appeals has ever held that payment of a monetary sanction imposed under the Federal Rules of Civil Procedure for the benet of a party to federal litigation may be enforced by incarceration. Yet, imprisonment for debt in the federal judicial system presided over by this Court has become pervasive and endemic. Neither this Court nor any other federal Court has approved a standard of judicial or legal ethics under which an attorney is allowed to fraudulently advise a client that a client need not appear at a hearing at which entry of a

4 default judgment based on misconduct of the attorney is threatened, blame the client, in the clients absence, for his own procedural defaults and malpractice and abandon his client at the same hearing by withdrawing as counsel of record, with the complicity or approval of the District Court prior to entry of default. This case presents both issues for this Courts consideration. REASONS FOR GRANTING THE PETITION I. PETITIONER ACORDS INCARCERATION FOR FAILURE TO PAY RULE 11 (F.R.Civ.P.) SANCTIONS WAS IMPRISONMENT FOR DEBT WHICH VIOLATED THE TEXAS AND UNITED STATES CONSTITUTION, AND 28 U.S.C. 2007(a).

Substantial doubt exists as to whether the contempt powers of the Federal Courts can be utilized to collect a Rule 11 sanction, or any other sanction, entered under the Federal Rules of Civil Procedure, for the benet of a party to litigation. Almost all Courts considering the issue prohibit use of the contempt power to collect a money judgment. Combs v. Ryans Coal Co., 785 F.25 970, 980 (11th Cir.) In Re: Estate of Bonham, 817 A.2d. 1.92, 195-96 (D.C. 2003); Aetna Cas. and Surety Co. v. Markarian, 114 F. 3d 346, 349 (1st Cir. 1997); Shufer v. Heritage Bank, 720 F.2d 1141, 1147-48 (9th Cir. 1983); Richmark Corp. v. Tenderfalling Consul-tants, 959 F.2d 1468 (9th Cir. 1992). Further, Title 28 U.S.C. 2007, Imprisonment for Debt, directs, in mandatory language, that:

5 A person shall not be imprisoned for debt on a writ of execution or other process issued from a court of the United States in any State wherein imprisonment for debt has been abolished. See Appendix F, P. 44a. Texas is such a state where imprisonment for debt has been abolished. Texas Constitution, Article One, Section 18. Appendix F, P. 45a. The Maryland District Courts warrant ordering Acords arrest in the State of Texas was the other process contemplated by Section 2007(a). Since the early days of this Republic, the Federal Tribunals, including the Justices of this Court, have uniformly expressed an abhorrence for imprisonment for debt -- yet litigants in the District and Bankruptcy Courts are being incarcerated for failure to pay monetary debts -- imposed in the guise of attorneys fees, costs, or sanctions, under the Federal Rules with increasing frequency. One Bankruptcy Judge, expressing his disgust that such tactics were not only still tolerated but embraced by Federal Courts as well as some state legislators noted in Matter of Morris, 12 B.R. 321, 329 Bankr.N.D.Ill. 1981): As an example of mans inhumanity to man, debtors prisons must rate high on the scale. In Sturges v. Crowinshield, [fn20] which will be discussed below, Chief Justice Marshall wrote: To punish honest insolvency, by imprisonment for life, and to make this a constitutional principle, would be an excess of inhumanity, which will not be imputed to the illustrious patriots who framed our constitution, nor to the people who adopted it.

6 See Sturges v. Crowinshield, 17 U.S. 120, 200 (4 Wheat. 120, 200), 4 L.Ed. 529 (1819). Imprisonment for debt violates the Due Process Clause of the Fifth Amendment. A conflict exists among the Circuits concerning whether or not Court Orders to pay money, in the form of sanctions, are debts which are precluded from enforcement under the Due Process Clause of the Fifth Amendment of the United States Constitution and 28 U.S.C. 2007(a) which statutorily precludes imprisonment for failure to pay money pursuant to a Federal Courts other process in any state where imprisonment for debt is prohibited. Here, the Rule 11 sanctions were imposed for Young Agains benet -- a party to the litigation. Where a sanction is imposed for the benet of a party to the litigation, the sanction is a debt and payment cannot be enforced through imprisonment. Cutting v. Van Fleet, 252 F. 100, 102 (9th Cir. 1918). The Eleventh Circuit has explicitly stated in Combs v. Ryans Coal Company, Inc., 785 F.2d 970, 980, rehg denied, 791 F.2d 169 (11th Cir. 1986), cert. denied, 479 U.S. 853, 107 S.Ct. 187, 93 L.Ed.2d 120 (1986): That when a party fails to satisfy a courtimposed money judgment the appropriate remedy is a writ of execution, not a nding of contempt. There is no indication, or supporting authority, for the proposition that this Court when it formulated the Federal Rules of Civil Procedure intended to set up a favored class of creditors/litigants who would be able to trample state and federal constitutional restrictions on imprisonment for debt with impunity.

7 Acords arrest and ninety-seven day incarceration was imprisonment for debt which violated the United States Constitution, Fifth Amendment, the Texas Constitution, Article One, Section 18, and 28 U.S.C. Section 2007(a). The contempt citation on which the warrant of arrest incarcerating Acord was based, should be reversed and rendered. II. FEDERAL COURTS MAY NOT ETHICALLY PERMIT A CLIENTS ATTORNEY TO: (a) ADVISE HIS CLIENT THAT SHE NEED NOT APPEAR AT A HEARING WHERE A DEFAULT JUDGMENT IS THREATENED; (b) BLAME HIS CLIENT FOR HIS OWN CONDUCT WHICH IS THE BASIS OF A CLAIM FOR DEFAULT JUDGMENT WHILE SHE IS ABSENT FROM THE HEARING; AND (c) WITHDRAW AT THE HEARING WHILE HIS CLIENT IS ABSENT AND ALLOW EX PARTE ENTRY OF A JUDGMENT AGAINST THE CLIENT. In its unreported Opinion dated December 23, 2011, the Fourth Circuit states: At that same hearing where the Trial Court entered default judgment against Appellant Or tega , Laubscher requested and was granted permission to withdraw from his representation of Ortega, citing Ortegas failure to communicate with him or pay him since November, 2008. The record contains three letters from Laubscher to Ortega dated December 29, 2008; February 23, 2009; and March 4, 2009, explaining his need for direction during the pretrial process. The first two

8 letters also gave Ortega notice that he would withdraw as counsel if not paid. The third informed Ortega that she was in violation of their Representation and Fee Agreement and that Laubscher would be moving to withdraw under Local Rule 101.2 for non-payment of fees and failure to cooperate in your defense. Laubscher also emailed Acord about his inability to continue representing Ortega without payment. Appendix A, P. 14a. Noticeably overlooked in the Fourth Circuits Opinion is any reference to Laubschers email to Acord concerning Ortega dated March 18, 2009, a mere ve days before the default judgment was granted, stating: You [sic] is not required to attend the hearing. See Petition for Rehearing En Banc, Appendix C. J.A. 2646. Noticeably absent from Laubschers email to Petitioners Acord and Ortega was any reference to Laubschers self-serving explanations which he intended to make to the District Court in his clients absence to avoid responsibility for his own malfeasances or any notice that Laubscher intended to withdraw in the middle of the default judgment hearing and leave his client Ortega defenseless. The Fourth Circuit ignored its prior precedent in RZS Holdings v. PDVSA Petroleo, 506 F.3d 350, 356 (4th Cir. 2007) in which it held: It is settled beyond peradventure that, in our system of Justice, ex parte judicial proceedings, such as that which occurred in the Non Adversarial Part of the April 28, 2006, hearing, are greatly disfavored. The conduct of such

9 proceedings presents substantial due process concerns and our Courts are necessarily and properly reluctant to participate in them. Indeed, under the Code of Judicial Conduct for United States Judges, Canon 3(A)(4), a Judge should ...neither initiate nor consider ex parte or other communications concerning a pending or impending proceeding. And, as our Court has aptly recognized, As a general rule, ex parte communications by an adversary party to a decision-maker in a judicatory proceeding are prohibited as fundamentally at variance with our conceptions of due process. Here, after allowing Laubscher to withdraw and leaving his client Ortega defenseless, the Trial Court proceeded ex parte with Young Agains counsel and entered a default judgment trying the issues on the merits. Clearly, the Unpublished Opinion in Young Again Products (YAP) is in gross ethical, as well as legal, con ict with the Fourth Circuits declarations in RZS. The Fourth Circuits unreported Opinion went on to state: We depart from our usual practice of treating counsels acts as acts of their clients in this case both because of Appellants attempt to blame the default judgment on Laubscher, and because the Court decided to proceed pro se for the latter part of this litigation. (Appendix A, P. 8a, fn 4) and then proceeded to do the very opposite citing numerous incidents of misconduct including failure to object to YAPs hearsay Exhibits

10 containing incompetent expert opinion on damages, and designating too many documents to the Trial Court as protected by attorney-client privilege, as the fault of Petitioner Ortega. The Fourth Circuits postulation that an eighty-seven (87) year old bedridden litigant should or even could make such arguments or objections and that her failure to do so was grounds for afrmance is factually implausible if not legally ludicrous. Far from being pristine and beyond reproach as suggested by the Fourth Circuits Opinion, Laubschers conduct was, as described by the Fourth Circuit in In Re: Virginia Information Systems Corp., 932 F.2d 338, 342 (4th Cir. 1991): Attorney malfeasance which actively misleads a client mandates grant of certiorari and reversal both on legal and factual, as well as ethical grounds. The Fourth Circuits unreported Opinion advances several rationales to justify its conclusion that Petitioner Ortega had sufcient notice that her attorney Laubscher intended to abandon her and that such betrayal was justied. The Opinions reference to Laubschers email, which supposedly informed Ortega that he would with withdraw under District of Maryland Local Rule 101.2 for non-payment of fees lends no support to the af rmance. That Rule, cited properly as Rule 101.2(a) Individuals makes no mention whatsoever of withdrawal for nonpayment or for failure to cooperate. Nor does the Panel reference any compliance by Laubscher with Rule 101.2(a)s requirement:

11 (b) That a written notice has been mailed to or otherwise served upon the client at least seven (7) days previously advising the client of counsels proposed withdrawal and notifying the client either to have new counsel enter an appearance or to advise the Clerk that the client will be proceeding without counsel. The Fourth Circuits District of Maryland has, under Rules of Professional Conduct, Rule 704, adopted and applied the Rules of Professional Conduct as they have been adopted by the Maryland Court of Appeals. Resort to those Maryland State rules reveals Rule 1.16 which placed limitations on Laubschers right to withdraw: Rule 1.16 . Declining or Ter minating Representation. (b) Except as stated in paragraph (c), a lawyer may withdraw from representing a client if: (1) Withdrawal can be accomplished without material adverse effect on the interests of the client; (5) The client fails substantially to ful ll an obligation to the lawyer regarding the lawyers services and has been given reasonable warning that the lawyer will withdraw unless the obligation is ful lled; Obviously, Laubschers instruction to his client Ortega not to appear at the Pretrial Hearing where a default

12 was threatened, without informing her of his intention to withdraw at the same hearing leaving her defenseless, was not reasonable and would subject a culpable attorney to disciplinary proceedings of the Maryland State Courts and Bar and any other Federal Bar that one could imagine. Laubschers conduct inspired one of YAPs attorneys to pronounce, mirthfully, at the conclusion of one of the bankruptcy hearings being held in the Southern District of Texas: They threw Marcella under the bus. The Fourth Circuits Opinion, if left undisturbed, will deprecate the standard of practice in the Federal Courts over which this Court presides to a level where ethical conduct and conformance with the standard of care of practice by reasonable and prudent attorneys must be purchased or they will cease to exist. What the Fourth Circuit has wrought is analogous to an Operating Room doctor who has previously informed his patient that there is a problem with the patients insurance who then abandons his patient in the middle of an operation when he is informed that the insurer has declined coverage. Similarly, the Fourth Circuits Opinion will substitute the morals of the marketplace for the ethical practice required under the Judicial Canons and Rules of Professional Conduct which this Court has attempted to foster in numerous carefully crafted Decisions. The Fourth Circuits attempted use of non-payment as a ground for lack of ethics in its unreported Opinion has no support under Maryland law or the Decisions of any other Federal Circuit. As stated in BG & E v. Commercial Union, 113 Md. App. 540, 688 A.2d 496, 577 (1997):

13 We are constrained to note that if, at the outset of the litigation, Commercial had provided BGE with counsel, as it had a duty to do, the attorney may have been obligated to continue representing BGE for the remainder of the trial, notwithstanding Commercials lack of any contractual duty to defend and indemnify. Under Rule 1.16(b) of the Maryland Rules of Professional Conduct, absent good cause, a lawyer may only withdraw from representing a client if the withdrawal can be accomplished without material adverse effect on the interests of the client. Moreover, under Rule 1.16(c), [w] hen ordered to do so by a tribunal, a lawyer shall continue representation notwithstanding good cause for terminating the representation. The concern for the interests of the client would have been especially salient in this case, because the change affecting the insurers duty to defend occurred on the eve of trial. Thus, had the insurer timely provided an attorney, consistent with its obligation, it would not, in all probability, have been permitted to withdraw at the eleventh hour, regardless of the change in allegations.[fn7] Thus, the Fourth Circuits Opinion nds no more ethical support in Maryland State law than it has in the Judicial Canons binding on this and other Federal Courts. Perhaps the Fourth Circuit Panel was ignorant of the cautionary ethical pronouncements of other Circuits such as that in Daniels v. U.S., 54 F.3d 290, 294 (7th Cir. 1995):

14 Motta v. District Director, Immigration and Naturalization Service, 869 F. Supp. 80, 89 (D.Mass. 1994) (attorneys dissatisfaction with fee arrangement not legitimate excuse for ling untimely appeal); but see United States v. Wright, 845 F. Supp. 1041, 1073 (D.N.J. 1994) (nonpayment of legal fees does not establish a con ict of interest of the type which would establish ineffective assistance; law yers are required to provide zealous advocacy regardless of a criminal defendants failure to pay legal fees), affd, 46 F.3d 1120 (3d Cir. 1994) (table). Maryland is not alone among the states in prohibiting the fee dumping, condemned by the Seventh Circuit, which occurred in this case. The New Hampshire Supreme Court in State v. Emanuel, 139 N.H. 57, 649 A.2d 53 (1994) requires that if any action be taken by the Court against a client based on alleged lack of payment of fees, the client must be given the opportunity to defend herself: Rule 1.16(b)(4) provides that a lawyer may withdraw if a client fails substantially to ful ll an obligation to the lawyer regarding the lawyers services. N.H. R. PROF. CONDUCT 1.16(b)(4). That right to withdraw has been limited to the extent that a lawyer shall not withdraw from employment until he has taken reasonable steps to avoid foreseeable prejudice to the rights of the client, including . . . allowing time for employment of other counsel. Id. (emphasis added). The New Hampshire Comments to this rule note that it has been

15 modied from the model rules to insure that a lawyer cannot withdraw for nonpayment of fees if the withdrawal would materially prejudice the rights of the client. Id. New Hampshire Comments. In this case, the trial court refused to consider the defendants reasons for failing to meet Attorney Sterns demands stating: Its not for me to interfere, for me to say youre paying too much, youre paying too little, hes not providing the services. The trial court simply informed the defendant that he could either pay his attorney or go forward unrepresented. Attorney Stern informed the trial court that his request for an additional $3500 retainer was not negotiable. The trial courts failure to explore the basis of the fee dispute was reversible error. In refusing to address the grounds for the dispute, the court was refusing to exercise its discretion over the matter. The trial court in this instance relied solely on the fact that the defendant had the resources to pay his attorney, failing to look further into the basis of the dispute. As a result, the trial court was unable to weigh properly the existence of good cause against the potential prejudice to the defendant. It is hard to imagine how the defendants rights could have been more prejudiced than by being forced to represent himself at his felony trial. Cf: Gibbs v. Lappies, 828 F. Supp. 6, 8 (D.N.H. 1993) (relying on Rule 1.16(b)(4) to deny withdrawal three months before trial as prejudicial to defendant despite

16 the fact that attorney had not been paid). This prejudice may have been mitigated had the court found that the fee dispute was solely a creation of the defendant or if a continuance had been granted, but as these events did not speculate as to their merits. [6, 7] A clients failure to pay legal fees may be a factor in determining whether good cause for withdrawal has been shown, but a good faith dispute over a fee agreement may not be sufcient, standing alone, to allow withdrawal. It is the attorneys responsibility to ensure that satisfactory nancial arrangements are made prior to appearing as counsel for a defendant. Gibbs, 828 F. Supp. at 8. As oft stated by the Bench of the Federal Courts when reviewing awards of fees to counsel: The practice of law is a profession and not a business.... Clients may not be forced to pay before ethical performance is required. The performing counsel who makes his appearance in a case must render ethical and competent services until he is discharged. The public condence in the integrity and honesty of the Courts, if not the legal profession, requires no less. There were no extreme circumstances here which justied entry of a default judgment because Ortegas counsel Laubscher had not been paid all of the fees he demanded or was not instructed by his client as to how he should practice law -- such as making hearsay objections or determining which documents were subject to attorney-

17 client privilege. See Appendix A, PP. 10a and 26a. See Reitzakis v. Loy, 490 F.2d 1132, 1135 (4th Cir. 1974): Rightfully, courts are reluctant to punish a client for the behavior of his lawyer. Edsall v. Penn Central Transportation Co., 479 F.2d 33, 35 (6th Cir. 1973). Therefore, in situations where a party is not responsible for the fault of his attorney, dismissal may be invoked only in extreme circumstances. Industrial Building Materials, Inc. v. Interchemical Corp., 437 F.2d 1336, 1339 (9th Cir. 1970). No reasonable Court of Appeals could nd in this record that Ortega was responsible for Laubschers procedural defaults and failure to object. Non-payment of fees, even if proven or assumed, does not obviate the requirement for ethical and competent legal practice. The morals and ethics of the Federal Courts are not those of the market place. Federal Courts may not permit an attorney to abandon the client in the middle of a hearing without notice after he insures, through his own fraudulent representations to his client, that the client is not before the Court with an opportunity to defend herself.

18 CONCLUSION Based on all of the above arguments and authorities and the record in this case, this Petition for Writ of Certiorari should be granted. The Order of Civil Contempt against Petitioner Acord should be reversed and rendered in Acords favor. The default judgment against Petitioners Acord and Ortega should be reversed and this cause remanded for a new trial. Respectfully submitted, JOE A LFRED IZEN, JR. Counsel of Record 5222 Spruce Street Bellaire, Texas 77401 (713) 668-8815 jizen@comcast.net Attorney for Petitioners

1a APPENDIX A Appendix A UNPUBLISHED OPINION OF THE UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT, FILED DECEMBER 23, 2011 UNPUBLISHED No. 09-1481 UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT YOUNG AGAIN PRODUCTS, INCORPORATED, A Maryland Corporation, Plaintiff-Appellee, v. JOHN ACORD, a/k/a John Livingston; MARCELLA ORTEGA, d/b/a Young Again Nutrients, d/b/a Young Again Nutrition, Defendants-Appellants. Appeal from the United States District Court for the District of Maryland, at Greenbelt. Roger W. Titus, District Judge. (8:03-cv-02441-RWT) Argued: October 26, 2011 Decided: December 23, 2011 Before WILKINSON, MOTZ, and DUNCAN, Circuit Judges.

2a Appendix A Af rmed by unpublished opinion. Judge Duncan wrote the opinion, in which Judge Wilkinson and Judge Motz concurred. Unpublished opinions are not binding precedent in this circuit. DUNCAN, Circuit Judge: This appeal arises from the district courts entry of default judg ment in the amount of $ 3, 832, 832 against John Acord and his mother, Marcella Ortega (collectively, the Appellants), pursuant to Federal Rules of Civil Procedure 16(f) and 37(b)(2)(A)(vi). In addition to appealing the default judgment, Acord appeals the district courts earlier award of Rule 11 sanctions against him in the amount of $24,357 and the order incarcerating him for civil contempt for his refusal to pay that amount. For the reasons that follow, we af rm. We nd that Appellants were adequately put on notice as to the consequences of their actions, and that their intransigence warranted no lesser sanctions. I. A. The Complaint and Counterclaims On August 20, 2003, Young Again Products, Inc. (Young Again) led a complaint in the U.S. District Court for the District of Maryland against Acord and

3a Appendix A Young Again Nutrition (Nutrition)1 for trademark and copyright infringement, as well as breach of contract and other state-law claims. 2 Acord and Nutrition led a motion to dismiss for lack of personal jurisdiction and for improper venue. In the alternative, they sought a transfer of venue to the Southern District of Texas. The court denied the motion, holding, in pertinent part, that venue was proper because the contract at the center of this dispute was entered into in Maryland and because Appellants company purposefully directed Internet trafc into and made sales in Maryland. Young Again Prods., Inc. v. Acord, 307 F. Supp. 2d 713, 718 (D. Md. 2004). Young Again filed a motion for a preliminary injunction to enjoin Appellants from using Young Agains trademarks, the name of Young Agains president, Roger Mason, and Masons copyright-protected works. The
1. There is some dispute about the proper name of the company, and the different courts involved in this case have alternated between Young Again Nutrition, see Young Again Prods., Inc. v. Acord, 307 F. Supp. 2d 713, 714 (D. Md. 2004), and Young Again Nutrients, LLC, see Acord v. Saenz, 2009 U.S. Dist. LEXIS 77274 at *1 (S.D. Tex. 2009). Acord operated this company with Ortega. 2. Although once friends, Appellants and Young Again pursued a scorched-earth policy for resolving this dispute and are now embroiled in litigation nationwide. Several previous decisions have set forth the history of their disagreement. See Young Again Prods., Inc., 307 F. Supp. 2d at 714, Dodart v. Young Again Prods., Inc., 2006 U.S. Dist. LEXIS 72122 (D. Utah 2006), Saenz, 2009 U.S. Dist. LEXIS 77274.

4a Appendix A court granted Young Agains motion on March 25, 2005. Thereafter, on March 29, 2005, Acord led counterclaims against Young Again and Mason for, inter alia, libel, defamation, and tortious interference with Appellants business. Young Again led an amended complaint on May 26, 2004 naming Ortega as an additional defendant. B. Young Agains Motions to Enforce the Injunction On April 16, 2004, Young Again led its rst motion to enforce the preliminary injunction and for contempt against Acord, alleging that he was continuing to use Young Agains trademarks and Masons name, despite the injunction. Thereafter, on May 25, 2004, the parties entered into a consent injunction in which Appellants agreed to cease using Young Agains trademarks and Masons name, both parties agreed to refrain from making disparaging remarks about the other, and Mason agreed not to interfere in Appellants business in any way. 3 Although it declined to sanction Appellants, the district court ordered Appellants to pay Young Agains costs and attorneys fees of $1,831.50 incurred in connection with [Young Agains] Motion To Enforce. J.A. 418. Young Again led a second motion to enforce and for contempt on Jun 21, 2004. This time, Young Again alleged
3. At oral argument, Appellants alleged that the consent injunction was something other than an agreement in an effort to discredit the district courts actions. We disagree. Through the consent injunction, the parties voluntarily agreed to bind themselves to certain court-enforced norms of behavior for the duration of the litigation.

5a Appendix A that Appellants violated the May 25 consent injunction by sending a memorandum to their distributors that Young Again had not approved and that contained derogatory remarks about Mason. Although the district court found that Appellants distribution of the unilaterally prepared memorandum did not violate the express terms of the consent injunction, it warned them that the memorandum was neither in form nor in substance what the court contemplated would have been sent in accordance with the applicable provision of the Consent Injunction. J.A. 509. On August 5, 2004, the district court entered an order instructing the parties to work together to draft a notice to the Appellants distributors explaining that they were permanently enjoined from using certain trademarks. As the litigation lurched forward, Young Again sought to have the district court reconsider its August 5th order and both parties moved to extend the discovery deadline. In an August 24, 2004 order, the district court denied Young Agains motion to reconsider, but since the parties had not agreed on a notice to Appellants distributors, did specify the notice that Appellants had to send to their distributors. The court also granted the joint motion to extend discovery deadlines, but in bolded, underlined, and italicized text, warned the parties that no further extensions will be granted. J.A. 523. On September 3, 2004, Young Again led its third motion to enforce and request for an order to show cause why [Appellants] should not be held in contempt for willful violation of the injunction and the decrees of this court, and for expenses, including attorneys fees. J.A. 526.

6a Appendix A Appellants responded that they had not received proper notice of the violations. Acord also submitted a declaration explaining how he and Nutrition had used [their] best efforts to remove all of the Young Again Products goods from the Internet web sites operated by Young Again Nutrition in order to comply with the injunction. Young Again maintained that the ongoing violations were too blatant to be oversights. J.A. 555-58. At a hearing on November 9, 2004, the court reluctantly denied Young Agains motion because Appellants did not have sufcient notice to correct the alleged violation. J.A. 3556. The court stated that it was not exactly pleased with [Appellants] approach to compliance with this injunction. J.A. 3555. The court complained that Appellants were playing the bubble game, pushing a bubble down one place that pops up in another. J.A. 3556. The court contemplated sanctions but noted instead that it did not think, though, because of the freshness of this particular aspect of non-compliance to the injunction that [it] can start imposing sanctions today, but--and it may very well be that if theres additional discovery that a serious violation could be addressed if this is not redressed immediately by the defendant. J.A. 3557-58. The court continued: But at this stage, with the record as limited as it is in developing the degree to which the [Appellants have] been circumventing the letter

7a Appendix A or the spirit of this injunction, Im not prepared to enter sanctions today, but I will make certain that its loudly and clearly on this record that I view the parameters of the existing injunction as more than adequate to address activities of the type that appear to have been identied in the hearing today. J.A. 3558-59. The court stated that the Appellants had seven days to x this problem and that if this stuff continues to happen then we will be back here and we will be talking about imposing sanctions, because I just dont think that this can go on any further. J.A. 3559. The courts November 12 order reiterated the frustration it expressed at the hearing. It stated that the court found that the Appellants compliance had been less than exemplary and that any failure by the [Appellants] to conform their on-line activities to the requirements of the consent injunction within seven days . . . may result in the levying of civil penalties against the [Appellants]. J.A. 621. Appellants ignored this seven-day deadline. On November 19, 2004, Young Again led its fourth motion to enforce and request for sanctions. The court held another hearing on February 3, 2005 to determine whether the Appellants or third-parties not under the Appellants control were responsible for the continued misuse of Young Agains intellectual property. Although concerned that some of the ongoing noncompliance was not innocent, but was the product of wink, wink; nod, nod relationships with some of the[] so-called retail customers, the court

8a Appendix A declined to impose sanctions. J.A. 3384. The court was nonetheless clear in its warning to the Appellants: I want to make sure that the [Appellants do not] feel real good about what Im saying. Im saying that when I get better information that presumably will come from deposition--live testimony from somebody from an internet search engine that indicates that through some devious means that this courts injunction has been violated, they better rue the day that I nd out . . . everybody can hear it loud and clear. If it turns out games have been played with search engines and relationships with other people are not what theyre claimed to be and this whole thing is a sham to get around your marks and your consent injunction, then they better start moving some money around to be able to respond for it. On the other hand, I need to be reasonably condent when Im using the contempt powers of the court that Im reasonably precise about it. And as I said, I see a lot of smoke in front of me. J.A. 3384 (emphasis added). The court then addressed Appellants counsel, Lawrence E. Laubscher,4 directly saying, I want to make sure . . . your client hears loud
4. We depart from our usual practice of treating counsels acts as acts of their clients in this case both because Appellants attempt to blame the default judgment on Laubscher, and because Acord decided to proceed pro se for the latter part of this litigation.

9a Appendix A and clear that Im not happy with how fast there was compliance with some aspects of this injunction. J.A. 3386. The court closed the hearing by reiterating that sanctions were coming if it discovered that Appellants had outed the injunction. The court did not rule on Young Agains motion at this hearing. C. The Discovery Process The discovery process progressed slowly at best. On April 15, 2005, Young Again led its rst motion to compel Appellants to produce documents. Although the parties reached an agreement resolving this first discovery dispute, the court had to intervene repeatedly. The court originally planned to rule on Young Agains fourth motion to enforce and request for sanctions after the completion of discovery on June 1, 2005. When the discovery deadline was extended into 2006, however, the court denied the motion without prejudice, citing Congresss disapprobation of stagnant motions that remain pending for an abnormally long time. J.A. 909. In the middle of discovery, on April 24, 2006, Laubscher moved to withdraw from representation of Acord and the court granted his motion. 5 On July 7, 2006, Young Again led a second motion to compel, this time alleging that the defendants were improperly designating
5. In his May 23, 2009, Motion to Withdraw from representing Ortega, discussed below, Laubscher explained that he withdrew from representing Acord and Young Again Nutrition after he was denied payment of $75,537.70 for services and disbursements.

10a Appendix A all documents they produced as condential, attorneys[] eyes only. J.A. 998-99. The court nally decided Young Agains July 7, 2006, motion on June 19, 2007. The court explained that it had spent 28 hours reviewing documents only to nd that many were blank, consisted of advertisements, or otherwise lacked any condential information, much less information warranting the attorneys eyes only designation. J.A. 1043-44. The order noted that Laubscher conceded that he has not reviewed all of the electronically stored documents because of the volume of the records, yet he let Acord, who was ostensibly proceeding pro se, designate them attorneys eyes only. J.A. 1043-44. The court struck Appellants designation. D. The Rule 11 Sanctions Not having an attorney did not deter Acord from vigorously litigating. In an email, he characterized his own conduct as ling numerous motions to quash, discovery requests on Mason, and other actions that will hopefully deplete his war chest. J.A. 1106A. On December 7, 2007, Acord led a pro se motion to enforce, requesting sanctions against Young Again, and seeking to dismiss the suit against him. In response, Young Again moved for sanctions against Acord under Federal Rule of Civil Procedure 11, stating that the purpose of Acords motion was harassment and delay. On August 28, 2008, the district court denied Acords motion, nding that he came before the court with, at

11a Appendix A best, unclean hands and that his motion was utterly devoid of any merit whatsoever. J.A. 2174. At a hearing on November 17, 2008, the district court ruled on Young Agains motion and ordered sanctions assessed against Acord in the amount of $24,357. The court found that his motion was led for an improper purpose of harassment, causing unnecessary delay, and/or needlessly increasing the costs of litigation, and that his pleading contained numerous factual allegations w ithout evidentiary support. J.A. 2306. Both Laubscher and Acord were present at the November 17, 2008, hearing. In addition to sanctioning Acord, the court scheduled a jury trial in the case and imposed a strict pretrial schedule for the parties to follow. The court told the parties: [Y]ou need . . . to read our rule on pretrial procedures. I take that very seriously . . . [T]he pretrial preparation process is one that involves a signicant level of joint endeavor with people operating in good faith with each other and not playing around. S.J.A. 118-19. The court instructed the parties to submit a pretrial order by March 2, 2009. E. The Default Judgment Despite the courts admonition about the need for the parties to cooperate and the local rules governing the pretrial process, Ortega did not respond to Young Agains efforts to make pretrial arrangements. Instead, Laubscher waited until one business day before the ling deadline for the pretrial order, a Friday, to begin emailing his proposals. Even then, he failed to attach anything to

12a Appendix A his email. The next Monday, he waited until 4:20 pm on the ling date to forward the remainder of his proposed joint pretrial order. Laubscher complained that Young Agains counsel did not notify him that the attachment was missing or respond to his emails on Saturday. Laubscher later testied that he had repeatedly attempted to contact Ortega but that she never responded, so he proceeded without guidance from his client. In any event, Laubschers belated ling left no time for the parties to negotiate the order. As a result, Young Again did not incorporate any material from Ortega into its order. On March 2, 2009, Young Again led a motion for default judgment against Acord, alleging that he failed to communicate in preparing for pretrial and that he had failed to pay the sanctions assessed against him. On March 17, 2009, Young Again led a motion for default judgment against Ortega, alleging that she too had failed to participate in the pretrial process. On March 19, 2009, the court sent the parties the following reminder about the pretrial proceedings: The Court wishes to remind the parties of the pretrial conference and hearing on all pending motions scheduled for Monday, March 23, 2009, at 2:00 p.m. At that time, the Court intends to hear argument on all pending motions--Paper Nos. 247, 256, 258, and 259. The Court notes that Paper No. 259 was filed on 3/17/09. If Defendant Ortega wishes to respond to that motion, she is directed to le a response by March 20, 2009, at 4:00 p.m.

13a Appendix A Despite the informal nature of this ruling, it shall constitute an Order of the Court, and the Clerk is directed to docket it accordingly. J.A. 2602 (emphasis in original). Relevant to this appeal, Paper No. 256 is Young Agains motion for default judgment against Acord; Paper No. 258 is Young Agains motion for sanctions and civil contempt against Acord; Paper No. 259 is Young Agains motion for default judgment against Ortega. At the scheduled pretrial hearing on March 23, 2009, the court heard extensive testimony about the failure of Appellants to cooperate in the pretrial process. Laubscher admitted that he knew that Appellants missed the deadline to comment on the pretrial order, but having not received any instructions from Ortega he made the 4:20 pm ling in an effort to preserve her rights. He maintained that Ortega wanted to defend the case, but the court disagreed. The court stated that it was attributing what took place in this case directly to Marcella Ortega and that he could not fault her counsel, Laubscher, because its clear[] his indifference to his obligations . . . are because he was in effect disabled by his client from being able to perform the obligations that he had to this court. J.A. 3329. Acord admitted that he had no excuse for his failure to participate in the pretrial process other than it just boggles my mind and I dont know how to do it. I dont have an attorney up here. J.A. 3305. The court found that both Acord and Ortega had failed to participate meaningfully in the litigation and granted default judgment against them in the amount

14a Appendix A of $3,832,832.40. 6 The court also dismissed Acords counterclaims. At that same hearing, Laubscher requested and was granted permission to withdraw from his representation of Ortega, citing Ortegas failure to communicate with him or pay him since November 2008. The record contains three letters from Laubscher to Ortega dated December 29, 2008, February 23, 2009, and March 4, 2009, explaining his need for direction during the pretrial process. The rst two letters also gave Ortega notice that he would withdraw as counsel if not paid. The third informed Ortega that she was in violation of their Representation and Fee Agreement and that Laubscher would be moving to withdraw under Local Rule 101.2 for nonpayment of fees and failure to cooperate in your defense. J.A. 2871. Laubscher also emailed Acord about his inability to continue representing Ortega without payment. F. Acords Incarceration The court ordered Acord to pay the sanctions against him--or explain the nancial circumstances that rendered him unable to pay--within thirty days of March 25, 2009. Acord did neither. Consequently, the court ordered him to appear at a hearing on July 7, 2009, to show cause why he should not be held in civil contempt and incarcerated. Acord moved for a continuance but the district court
6. The court based this number on the report of Young Agains expert, which estimated the revenue lost as a result of Appellants infringement. It also included contract damages and attorneys fees.

15a Appendix A denied his motion. Acord failed to appear as ordered. On August 6, 2009, the district court held Acord in contempt and ordered him incarcerated until he purged himself of the contempt.7 II. Appellants claim that the district court abused its discretion when it entered default judgment for $3,832,832.40 against them. In addition, Acord argues that the district court abused its discretion when it awarded Young Again sanctions pursuant to Federal Rule of Civil Procedure 11. Acord also appeals the district courts order holding him in civil contempt for failure to pay the sanction. Finally, Appellants claim that the district court erred in its March 14, 2004, order nding that venue in the District of Maryland was proper and denying their request to transfer venue. We will consider each issue in turn.

7. Acord led a petition for habeas corpus in the Southern District of Texas claiming that his continued incarceration violated his Due Process rights because he was unable to pay the sanction and thereby purge himself of the contempt. He also claimed that producing the documents requested by the Maryland district court would violate his Fifth Amendment privilege against self incrimination. The Southern District of Texas found neither argument persuasive and denied his motion. Saenz, 2009 U.S. Dist. LEXIS 77274, at *11-30. Acord did not pay the sanction, and was therefore not released, until November 17, 2009.

16a Appendix A A. We turn rst to the default judgment. This court reviews for abuse of discretion a district courts grant of sanctions under Rule 37, including the imposition of a default judgment. Anderson v. Found. for Advancement, Educ. and Empt of Am. Indians, 155 F.3d 500, 504 (4th Cir. 1998). In the case of default, the range of discretion is more narrow than when a court imposes less severe sanctions. Hathcock v. Navistar Intl Transp. Corp., 53 F.3d 36, 40 (4th Cir. 1995) (internal quotation marks omitted). 1. The district court imposed a default judgment on the defendants pursuant to Rules 16(f) and 37(b)(2)(A) (vi) based primarily on their failure to participate in the pretrial process. Under Rule 16(f)(1), [o]n motion or on its own, the court may issue any just orders, including those authorized by Rule 37(b)(2)(A)(ii)-(vii), if a party or its attorney: (A) fails to appear at a scheduling or other pretrial conference; (B) is substantially unprepared to participate-or does not participate in good faith--in the conference; or

17a Appendix A (C) fails to obey a scheduling or other pretrial order. Fed. R. Civ. P. 16(f)(1). Rule 37(b)(2)(A)(ii)-(vii) lists a variety of sanctions, including prohibiting the disobedient party from supporting or opposing designated claims, striking pleadings in whole or in part, staying further proceedings until the order is obeyed, dismissing the action or proceeding in whole or in part, and rendering a default judgment against the disobedient party. Fed. R. Civ. P. 37(b)(2)(A)(ii)-(vi). We have previously upheld default judgment as a sanction for discovery abuses under Rule 37. See Anderson, 155 F.3d at 504-05. We see no reason to treat misconduct during the pretrial process as different from misconduct during the discovery process. See Newman v. Metro. Pier & Exposition Auth., 962 F.2d 589, 590-91 (7th Cir. 1992) (holding that failure to participate in the pretrial process is a ground for default judgment). Recognizing the seriousness of the imposition of default judgment, we have instructed district courts to apply a four part test when determining appropriate sanctions under 37(b): (1) whether the noncomplying party acted in bad faith; (2) the amount of prejudice his noncompliance caused his adversary . . .; (3) the need for deterrence of the particular sort of noncompliance; and (4) the effectiveness of less drastic sanctions. Mut. Fed. Sav. & Loan Assn v. Richards & Assocs., Inc., 872 F.2d 88, 92 (4th Cir. 1989) (citing Wilson v. Volkswagen of Am., Inc., 561 F.2d 494, 503-05 (4th Cir. 1977)). In Mutual Federal Savings and Loan Association, we noted that the Wilson

18a Appendix A factors balance a district courts desire to enforce its discovery orders and a partys rights to a trial by jury and a fair day in court. 872 F.2d at 92. We emphasize, however, that our review of the district courts determination is a deferential one, in recognition that it is the district court judge who must administer (and endure) the proceedings. Lee v. Max Intl, LLC, 638 F.3d 1318, 1320 (10th Cir. 2011); see also id. (advising appellate courts not to draw from fresh springs of patience and forgiveness). This court has emphasized the signicance of warning a defendant about the possibility of default before entering such a harsh sanction. Hathcock, 53 F.3d at 40. However, in a similar context--the failure to prosecute a case--the Supreme Court has said [n]or does the absence of notice as to the possibility of dismissal or the failure to hold an adversary hearing necessarily render such a dismissal void. Link v. Wabash R.R., 370 U.S. 626, 632, 82 S. Ct. 1386, 8 L. Ed. 2d 734 (1962). Indeed, in the context of sanctions for abuse of discovery, the Supreme Court has warned that appellate courts tend[] . . . to be heavily inuenced by the severity of outright dismissal as a sanction . . . But here, as in other areas of the law, the most severe in the spectrum of sanctions . . . must be available to the district court. Natl Hockey League v. Metro. Hockey Club, 427 U.S. 639, 642-43, 96 S. Ct. 2778, 49 L. Ed. 2d 747 (1976). 2. Appellants Acord and Ortega argue that the district court abused its discretion when it entered the default

19a Appendix A judgment because it did not properly apply the Wilson factors and did not warn them that it was considering entering default judgment. Although the district court did not expressly articulate these factors, we will nevertheless uphold a default judgment when it is clear from the record that the district court did not abuse its discretion. See Mobil Oil Co. de Venezuela v. Parada Jimenez, 1993 U.S. App. LEXIS 4648 at *8 (4th Cir. March 9, 1993) (unpublished). In analyzing the Wilson factors on these facts, we nd such clarity here. a. First, the record reects a pattern of noncompliance suggesting bad faith. See Mut. Fed., 872 F.2d at 93. The district court was repeatedly compelled to admonish the Appellants, even after it warned them that it was going to take the pretrial process very seriously. J.A. 118. Appellants made no effort to acknowledge their obligations. 8 Acord did not even attempt to prepare for pretrial proceedings, led meritless motions and made little, if any, effort to comply with the district courts injunctions. He described his litigation strategy as hopefully deplet[ing] [Masons] war chest. J.A. 1106A. While Ortegas behavior may have been less egregious than Acords, it nevertheless manifested an identical posture of resistance. Moreover, her efforts to pin
8. We previously upheld default judgment after a mere 13 months of subterfuge. Mut. Fed., 872 F.2d at 94. Here, Ortega has disregarded the court for nearly 6 years.

20a Appendix A the blame on her former attorney are unpersuasive. The record contains three letters from Laubscher to Ortega, as well as emails from Laubscher to Acord, in which Laubscher explains that he needs both Ortegas cooperation and payment for his services. Laubscher continued to represent Ortega even after warning that he was going to withdraw if his date for payment came and went. Moreover, we have previously upheld a district courts entry of default judgment against defendants who so failed to communicate with their attorney that their attorney withdrew from the representation. Home Port Rentals, Inc. v. Ruben, 957 F.2d 126, 132 (4th Cir. 1992). On these facts, we cannot interpret Ortegas continued disregard for the district court as anything other than bad faith. b. Turning to the second Wilson factor, we believe there was prejudice here. The district court specically explained that Appellants noncompliance prejudiced Young Again: The concern that I have as a judge trying to try a case is that I cant try cases fairly to both sides if I dont have . . . meaningful participation in the signicant endeavors required to go to trial and to comply with the pretrial rules of this court. Those rules are designed to provide for a fair trial.

21a Appendix A J.A. 3329. Moreover, we note that this is an intellectual property case in which Appellants allegedly continued to use Young Agains property despite injunctions to the contrary. Given the impermanence of the internet, over which Appellants traded Young Agains work, each day of delay is a day over which evidence of the original infringement may degrade. Moreover, Acord himself stated that his goal was to force Mason to deplete his war chest defending this litigation. J.A. 1106(A) c. With respect to the third Wilson factor, we have previously found that stalling and ignoring the direct orders of the court with impunity is misconduct that must obviously be deterred. Mut. Fed., 872 F.2d at 93. Appellants behavior can only be described as ignoring the courts orders, even when the court took additional, non-required steps to ensure that they were aware of their obligations. For example, on March 19, 2009, the court sent a memorandum to the parties to remind [them] of the pretrial conference and hearing. J.A. 2602. As discussed above, Ortega refused to participate in the pretrial process with her attorney, despite the district courts orders. Instead, she left her attorney to make last minute lings aimed at preserving her rights, in consequence of which the case could not efciently move forward. Acord obstructed proceedings by making frivolous lings while ignoring mandatory lings. We nd this conduct, especially when taken with their other sloppy tactics, such as their overuse of the Attorneys Eyes Only designation, to be precisely the kind of behavior that courts need to deter.

22a Appendix A d. Turning to the fourth Wilson factor, since Acord and Ortega showed no interest in taking the steps necessary to defend this case, we see no effective lesser sanction. Looking rst at Acord, the court had already issued sanctions under Rule 11 to no avail. Acords statement that he did not participate in the pretrial process because it boggles [his] mind further suggests that lesser sanctions would be futile. J.A. 3305. Acord could have hired an attorney, but chose not to, then sought to effectively excuse himself from proceedings due to his pro se status. While we are sympathetic to the challenges faced by pro se litigants, we cannot exercise that sympathy unless they at least try to participate.9 And although the district court could indeed have imposed monetary sanctions against Ortega in the rst instance, given the pattern of resistance in which she engaged in concert with Acord, we cannot say that the district court abused its discretion in entering the default judgment against them both. 3. Appellants argue that default judgment is improper because the district court did not warn them of the possibility of default judgment. As an initial matter, we believe that the courts March 19, 2009, memorandum to
9. Acord claims that he intended to participate in the pretrial proceedings by adopting Ortegas pretrial submissions but he did not seek to do so until the pretrial hearing, well after the ling deadline. This is too late. The district court set deadlines, which he ignored.

23a Appendix A the parties in which it said that it planned to rule on Young Agains motions for default judgment, gave Appellants notice that default judgment was a possibility. While it is true that the district court did not explicitly warn Appellants that it would denitely enter a default judgment at the March 23 hearing, we nd that they surely had constructive notice that it might: the district court had expressed its displeasure about poor compliance with the injunctions;10 Young Again had repeatedly sought sanctions and the district court said it was on the verge of sanctioning Appellants several times;11 the district court then said that it took the pretrial process very seriously, even sending Appellants a memorandum telling them that it was going to rule on Young Agains motions for default judgment, and yet Appellants still took no steps to participate in this pretrial process. See Adams v. Trs. of the N.J. Brewery Emps. Pension Trust Fund, 29 F.3d 863, 871 (3d Cir. 1994) (nding that a party had adequate opportunity to defend itself against dismissal without such formal notice where the other party had moved for sanctions). Although the district court could have provided more specic notice of default, it certainly made the intent to act on its displeasure manifest.

10. For example, on August 3, 2004, the district court stated that Appellants compliance with the injunctions was neither in form nor substance what the court had contemplated. J.A. 509. 11. For example, on November 9, 2004, the district court explicitly contemplated sanctions saying, I just dont think that this can go on any further. J.A. 3559.

24a Appendix A While we believe that Ortega had sufcient notice of the possibility of default, it is even clearer that Acord did. On at least two additional occasions the district court warned Acord that it was unhappy with his behavior. The rst was the May 25, 2004, hearing at which the court departed from the traditional American rule of each side paying its own costs and ordered Acord to pay Young Agains costs and fees related to its rst motion to enforce.12 The second warning was the imposition of Rule 11 sanctions. For the foregoing reasons, we hold that the district court provided sufcient notice to support its entry of default judgment against Acord and Ortega. 4. Appellants contend that the award of $3,832,832.40 was improper. We disagree. The district court took this sum from Young Agains expert Richard S. Hoffman, whose report described Young Agains damages from Appellants infringement, and which Young Again included as an exhibit in its pretrial submissions. Appellants never objected to this report either during the March 23, 2009, hearing, during which Young Again presented it as evidence, or during the pretrial process during which the Appellants were supposed to be cooperating with Young Again. Appellants now contend that the report was hearsay and claim that the district court is relying on the statements of lawyers, which are not evidence. Appellants Br. 54. Federal Rule of Civil Procedure 26(a)(3) (B) dictates that a party waives any objections to pretrial
12. Ortega was not yet a party in the case when the district court entered this order.

25a Appendix A disclosures unless it raises them within 14 days. Since Appellants failed to object to the report within 14 days, they have waived any objections. Accordingly, we nd that the district court did not abuse its discretion when it awarded Young Again the sum specied in its experts report. B. We now turn to Acords contention that the district court erred when it entered Rule 11 sanctions against him and that it committed further error when it order him incarcerated for failure to pay these sanctions. Rule 11 provides that a court may sanction a party for presenting to the court a pleading, written motion, or other paper . . . presented for any improper purpose, such as to harass, cause unnecessary delay, or needlessly increase the cost of litigation, or for making factual contentions without evidentiary support. Fed. R. Civ. P. Rule 11(b). We review the imposition of Rule 11 sanctions for abuse of discretion. In re Bees, 562 F.3d 284, 287 (4th Cir. 2009). We review a district courts civil contempt order for abuse of discretion.13 Ashcraft v. Conoco, Inc., 218 F.3d 288, 301 (4th Cir. 2000).
13. Young Again argues that we lack jurisdiction to decide this issue since it was not explicitly included in the notice of appeal. We disagree. Rule 3 of the Federal Rules of Appellate Procedure requires a notice of appeal to designate the judgment, order, or part thereof being appealed. Fed. R. App. P. 3(c)(1)(B). This court liberally construe[s] Rule 3(c)s requirements concerning the sufciency of the notice of appeal to avoid technical impediments to appellate review. In re Spence, 541 F.3d 538, 543 (4th Cir. 2008) (internal quotation marks omitted). [A]n error in designating

26a Appendix A 1. The district court imposed sanctions both because it found that the purpose of Acords motion was to harass, delay, and increase the costs of litigation and because his motion contained numerous factual allegations without evidentiary support. J.A. 2306. Acord disagrees with the district courts assessment of his motion and contends that the allegations were true and that the motion was necessary to prevent Mason from defaming Acord. Acord points to no evidence in the record to support this contention. Furthermore, this does not appear to be a case like In re Bees, in which we found the imposition of Rule 11 sanctions to be reversible error because the erroneous factual assertions in the sanctioned partys lings were isolated, inadvertent, and in good faith. 562 F.3d at 288. Instead, the district court found Acords motion to be utterly devoid of any merit whatsoever, and Acord has not presented any argument on appeal that contradicts this assessment. J.A. 2174. On these facts, we cannot nd
the issue appealed will not result in a loss of appeal as long as the intent to appeal a specic judgment can be fairly inferred and the appellee is not prejudiced by the mistake. Hartsell v. Duplex Prods., Inc., 123 F.3d 766, 771 (4th Cir. 1997) (citation omitted). Whether an appellee is prejudiced is determined by considering whether the appellee had notice of the appeal and an opportunity to fully brief the issue. Id. We have previously held that arguing the merits of an improperly designated issue in an opening brief is sufcient to put the opposing party on notice. See, e.g., id.; Canady v. Crestar Mortg. Corp., 109 F.3d 969, 974-75 (4th Cir. 1997).

27a Appendix A that Acords meritless motion and other misdeeds were inadvertent lapses, or otherwise in good faith. For these reasons, we nd that the district court did not abuse its discretion when it sanctioned Acord. 2. The district court held Acord in contempt on August 6, 2009, when he skipped a hearing that the district court ordered him to attend after he failed to pay the Rule 11 sanctions within thirty days of March 25, 2009. To establish civil contempt, a movant must demonstrate: (1) the existence of a valid decree of which the alleged contemnor had actual or constructive knowledge; (2) . . . that the decree was in the movants favor; (3) . . . that the alleged contemnor by its conduct violated the terms of the decree, and had knowledge (at least constructive knowledge) of such violations; and (4) . . . that [the] movant suffered harm as a result. Ashcraft, 218 F.3d at 301 (citation omitted). All of these elements are clearly established here. The court assessed sanctions in the amount of $24,357.00 against the defendant on November 17, 2008. Acord had knowledge of these sanctions, and he not only violated the district courts order to pay, but also failed to appear at the show cause hearing regarding his civil contempt and incarceration. He harmed Young Again both by delaying payment and by continuing to delay the proceedings. In light of these agrant violations, we hold that the district court did not abuse its discretion when it held Acord in civil contempt.

28a Appendix A C. Finally, we turn to the sole non-sanctions issue in this appeal. Appellants claim that the district court erred in its March 14, 2004, order nding that venue in the District of Maryland was proper and denying their request to transfer. We review the district courts denial of a motion to transfer venue for abuse of discretion. Saudi v. Northrop Grumman Corp., 427 F.3d 271, 275 (4th Cir. 2005). We begin by noting that venue is a personal privilege of the defendant that may be waived. Leroy v. Great W. United Corp., 443 U.S. 173, 180, 99 S. Ct. 2710, 61 L. Ed. 2d 464 (1979). Acord led his motion to transfer before Young Again amended its complaint to include Ortega. Therefore, Ortega waived her objection to the venue when she admitted venue was proper in her answer to Young Agains amended complaint and thereby failed to object to venue in the district court. See Sucampo Pharms., Inc. v. Astellas Pharma, Inc., 471 F.3d 544, 549 (4th Cir. 2006) (Because a motion under Rule 12(b)(3) is a disfavored 12(b) motion, a defendant will have to raise the forum selection issue in her rst responsive pleading, or waive the clause.); United States v. Stewart, 256 F.3d 231, 238 (4th Cir. 2001) (If an objection to venue is not raised in the district court, the issue is waived on appeal.). As to Acord, we nd that venue in the District of Maryland was proper under 28 U.S.C. 1391(b)(2), which states that venue is proper in a judicial district in which a substantial part of the events or omissions giving rise

29a Appendix A to the claim occurred, or a substantial part of property that is the subject of the action is situated. Young Again argues that it entered into an agreement with Acord and Nutrition to resell its products. When ruling on Acords motion, the district court found that it must accept for purposes of this motion, the contract between the parties, which underlies the breach of contract claim, was entered into in Maryland, and Internet trafc was directed into Maryland and resulted in sales. Therefore, venue is proper in Maryland. Young Again, 307 F. Supp. 2d at 718. Acord has not contested the district courts nding that the parties formed the contract in Maryland. Indeed, Appellants now rest their venue argument entirely on the claim that Young Again was not a Maryland corporation in good standing when it led the original complaint. Since Acord has waived any argument that the parties did not enter into the contract in Maryland, and the injury to Young Again--both from the breach of contract and the intellectual property claims--has occurred in Maryland, we hold that the district court did not abuse its discretion in holding that venue is proper in Maryland. Cf. CIENA Corp. v. Jarrard, 203 F.3d 312, 318 (4th Cir. 2000) (nding venue to be proper in the district where the injury caused by the breach of contract would be felt); Du-Al Corp. v. Rudolph Beaver, Inc., 540 F.2d 1230, 1233 (4th Cir. 1976) (nding venue to be proper in the district in which partial performance occurred and where steps to form the contract were taken).

30a Appendix A III. For the reasons discussed above, we nd that the Appellants bad faith throughout this litigation process was sufciently egregious to justify the extraordinary sanctions imposed on them. Accordingly, we hold that the district court did not abuse its discretion. AFFIRMED

31a APPENDIX B Appendix OF THE UNITED ORDER B STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND, FILED JUNE 8, 2009 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND Civil No: RWT 03CV2441 YOUNG AGAIN PRODUCTS, INC. Plaintiff / Counter-Defendant, vs. JOHN ACORD a/k/a JOHN LIVINGSTON, et al. Defendants / Counter-Plaintiffs.

JOHN ACORD a/k/a JOHN LIVINGSTON, et al. Third-Party Plaintiff, vs. ROGER MASON and IVEY MASON Third-Party Defendants ORDER

32a Appendix B On November 17, 2008, this Court entered a judgment for sanctions under Rule 11 against Defendant John Acord in favor of the Plaintiff Young Again Products, Inc. (Young Again) in the amount of $24,357.00. [Paper No. 245]. Following a hearing on March 23, 2009, the Court found that Mr. Acord had not yet paid the sanctions imposed upon him by the Courts November 17 Order, and issued a second Order on March 25, 2009, granting Young Agains motion to nd Mr. Acord in civil contempt. [Paper No. 264]. In that Order, the Court directed Mr. Acord either to make full payment of the sanctions imposed against him within thirty days of the Order, or, [i]f Defendant Acord is unable to pay in full, he shall submit to the Court within thirty (30) days of this Order a highly detailed afdavit concerning the nancial circumstances that render him unable to pay. This afdavit shall include information about any assets, whether in his own or a third partys name, that Defendant Acord has had access to or use of in the past ve (5) years, as well as any transfers of assets Defendant Acord has made to others in the past ve (5) years. Id. To date, Defendant Acord has not made payment of the judgment for sanctions. On April 27, 2009 (more than 30 days after the Courts Order), Mr. Acord submitted an afdavit of less than two pages, and a two-page personal nancial statement that represented that Mr. Acords liabilities exceed his assets by over ve million dollars. [Paper No. 274]. The afdavit submitted by Mr. Acord was both untimely and inadequate. On May 1, 2009, Young Again led a motion to strike Mr. Acords afdavit,

33a Appendix B hold Mr. Acord in civil contempt, and order Mr. Acords incarceration until he makes full payment of the sanctions awarded against him. [Paper No. 278]. At a hearing held before the undersigned on March 23, 2009, the Court also entered default judgments against Defendants John Acord and Marcella Ortega in the amount of three million, eight hundred thirty-two thousand, eight hundred thirty-two dollars and forty cents ($3,832,832.40). Subsequently, Ortega and Acord each led pro se motions for new trial pursuant to Rule 59(b) of the Federal Ru1es of Civil Procedure. [Paper Nos. 265 & 266]. Upon consideration of the above motions and the responses and replies thereto, it is this 5th day of June, 2009, by the United States District Court for the District of Maryland, ORDERED, that Defendant Acords and Defendant Ortegas Motions for New Trial [Paper Nos. 265 & 266] are DENIED; and it is further ORDERED, that Young Agains Motion to Strike Response and to Hold Defendant John Acord In Civil Contempt and Order His Incarceration Until He Purges Himself of His Contempt [Paper No. 278] is GRANTED IN PART and DENIED IN PART; and it is further ORDERED, that the Court will conduct a hearing on July 7, 2009, at 10:00 a.m. at which Defendant Acord is DIRECTED to show cause why he should not be held

34a Appendix B in civil contempt and incarcerated for failure to comply with the Orders of this Court. The Defendant Acord is directed to appear in person at the hearing. /s/ ROGER W. TITUS UNITED STATES DISTRICT JUDGE

35a APPENDIX C Appendix OF THE UNITED ORDER C STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND, FILED MARCH 25, 2009 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND YOUNG AGAIN PRODUCTS, INC. Plaintiff / Counter-Defendant, vs. JOHN ACORD a/k/a JOHN LIVINGSTON, et al. Defendants / Counter-Plaintiffs.

JOHN ACORD a/k/a JOHN LIVINGSTON, et al. Third-Party Plaintiff, vs. ROGER MASON and IVEY MASON Third-Party Defendants Civil No: RWT 03CV2441 ORDER

36a Appendix C Upon consideration of Plaintiff and Third Party Defendants Motion for Contempt and Sanctions Against Defendant John Acord For Failure To Pay Rule 11 Sanctions In Violation of This Courts Order of November 17, 2008 [Paper No. 258], Plaintiff Young Again Products, Inc.s Motions in Limine [Paper No. 247], Plaintiffs Motion For Entry of Default Judgment Against Defendant John Acord Or In the Alternative For Summary Judgment Against Defendant John Acord [Paper No. 256], and Plaintiffs Motion For Entry of Default Judgment Against Defendant Marcella Ortega Or In the Alternative For Summary Judgment Against Defendant Marcella Ortega [Paper No. 259], the responses and replies thereto, and the arguments of counsel and Mr. Acord (who participated by telephone), presented at the hearing conducted before the undersigned today, it is, for the reasons stated on the record, this 24th day of March, 2009, by the United States District Court for the District of Maryland, ORDERED, that Plaintiff and Third Party Defendants Motion for Contempt and Sanctions Against Defendant John Acord For Failure To Pay Rule 11 Sanctions In Violation of This Courts Order of November I7, 2008 [Paper No. 258] is GRANTED; and it is further ORDERED, that within thirty (30) days of this Order, Defendant John Acord shall make full payment of the sanctions imposed against him and in favor of the Plaintiffs on November 17, 2008, in the amount of $24,357. If Defendant Acord is unable to pay in full, he shall submit to the Court within thirty (30) days of this Order a highly detailed afdavit concerning the nancial circumstances that render him unable to pay. This afdavit shall include

37a Appendix C information about any assets, whether in his own or a third partys name, that Defendant Acord has had access to or use of in the past ve (5) years, as well as any transfers of assets Defendant Acord has made to others in the past ve (5) years; and it is further ORDERED, that Plaintiff Young Again Products, Inc.s Motions in Limine [Paper No. 247] are DENIED AS MOOT as to Supplement Spot, LLC, and GRANTED AS UNOPPOSED as to Defendants Acord and Ortega; and it is further ORDERED, that Plaintiffs Motion For Entry of Default Judgment Against Defendant John Acord Or In the Alternative For Summary Judgment Against Defendant John Acord [Paper No. 256] is GRANTED, and Defendant Acord is adjudged to be in default; and it is further ORDERED, that Plaintiffs Motion For Entry of Default Judgment Against Defendant Marcella Ortega Or In the Alternative For Summary Judgment Against Defendant Marcella Ortega [Paper No. 259] is GRANTED, and Defendant Ortega is adjudged to be in default; and it is further ORDERED, that a default judgment in the amount of three million, eight hundred thirty-two thousand, eight hundred thirty-two dollars and forty cents ($3,832,832.40) shall be entered for the Plaintiff, Young Again Products, Inc. against Defendants John Acord and Marcella Ortega; and it is further

38a Appendix C ORDERED, that Young Again Products, Inc. (YAP) is the owner of all right and title in the valid trademarks Arthritis Free, Better Cholesterol, Beta Prostate, Better Immunity, Better Prostate, Fat Absorb, German Zyme, Miracle Cream, The Estrogen Alternative, The Osteoporosis Answer, Total Minerals, Total Vitamins, Skin Cure, and Vein Free; and it is further ORDERED, that Defendants Acord and Ortega have willfully infringed YAPs copyrights and trademarks as set forth in YAPs Supplemental Complaint; and it is further ORDERED, that Defendants Acord and Ortega be permanently enjoined from using the designations and/or names Maximum Prostate, Arthritis Relief, Healthy Cholesterol, Fat Trapper, Skin Care, and Multi-Minerals, which are confusingly similar to YAPs trademarks, or any other confusingly similar designation alone or in combination with other words, as a trademark, trade name, or service mark, component or otherwise, or otherwise referencing the names on websites and those of its af liates, placing the names in its HTML codes and metatags, and purchasing the names in pay-for-placement or pay-for-rank search engine advertising; and it is further ORDERED, that all of Defendant Acords counter and third party claims are DISMISSED WITH PREJUDICE; and it is further

39a Appendix C ORDERED, that the jury trial previously scheduled in this case for June 16, 17, 18, 19, 23, and 24, 2009 is CONTINUED; and it is further ORDERED, that the Clerk is directed to CLOSE the case. /s/ ROGER W. TITUS UNITED STATES DISTRICT JUDGE

40a Appendix OF APPENDIX D ORDER D THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND, FILED NOVEMBER 17, 2008 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND Civil No: RWT 03CV2441 YOUNG AGAIN PRODUCTS, INC. Plaintiff / Counter-Defendant, vs. JOHN ACORD a/k/a JOHN LIVINGSTON, et al. Defendants / Counter-Plaintiffs.

JOHN ACORD a/k/a JOHN LIVINGSTON, et al. Third-Party Plaintiff, vs. ROGER MASON and IVEY MASON Third-Party Defendants ORDER Upon consideration of Plaintiffs Motion for Rule 11 Sanctions [Paper No. 220], Defendant Marcella Ortegas Motion to Dismiss, or in the Alternative, for Summary

41a Appendix D Judgment [Paper No. 221], Plaintiffs Cross-Motion for Summary Judgment [Paper No. 227], and Plaintiffs Motion for Entry of Default Against Defendant Supplement Spot, LLC, or in the Alternative for Summary Judgment [Paper No. 222], the responses and replies thereto, and the arguments of counsel and Mr. Acord presented at the hearing conducted before the undersigned today, it is, for the reasons stated on the record, this 17th day of November, 2008, by the United States District Court for the District of Maryland, ORDERED, that, the Court concluding that Defendant John Acords Motion To Enforce The Consent Injunction As Entered By This Court On May 25, 2004, And For An Order To Show Cause Why Plaintiff And ThirdParty Defendants Should Not Be Held In Contempt For Wilful, Deliberate, Continuous and Egregious Violations Of The Injunction And Decrees Of This Court, And For Expenses, Including Attorney Fees And Dismissal Of Any And All Pending Actions Against Acord (Paper No. 208] was led for an improper purpose of harassment, causing unnecessary delay, and/or needlessly increasing the costs of litigation, and that his pleading contained numerous factual allegations without evidentiary support, Plaintiffs Motion for Rule 11 Sanctions [Paper No. 220] is GRANTED; and it is further ORDERED, that a judgment for sanctions under Rule 11 in the amount of $24,357 shall be entered for the Plaintiff, Young Again Products, Inc. against Defendant John Acord; and it is further

42a Appendix D ORDERED, that Defendant Marcella Ortegas Motion to Dismiss, or in the Alternative, for Summary Judgment [Paper No. 221] is DENIED; and it is further ORDERED, that Plaintiff s Cross-Motion for Summary Judgment [Paper No. 227] is DENIED; and it is further ORDERED, that, in light of the settlement described by Plaintiffs counsel in open court, Plaintiffs Motion for Entry of Default Against Defendant Supplement Spot, LLC, or in the Alternative for Summary Judgment [Paper No. 222] is TERMINATED pending the consummation of the accompanying Settlement Order; and it is further ORDERED, that a jury trial is hereby SCHEDULED in this case for June 16, 17, 18, 19, 23, and 24, 2009; and it is further ORDERED, that all pretrial motions and motions in limine shall be led on or before December 15, 2008; any oppositions to such motions shall be led on or before January 2, 2009; and any replies in support of such motions shall be led on or before January 16, 2009; and it is further ORDERED, that the Court shall hold a hearing on all pretrial motions, as well as a pretrial conference, in open court on March 23, 2009, at 10:00 a.m. /s/ ROGER W. TITUS UNITED STATES DISTRICT JUDGE

43a Appendix E APPENDIX E ORDER DENYING PETITION FOR REHEARING EN BANC OF THE UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT, FILED FEBRUARY 14, 2012 FILED: February 14, 2012 UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT No. 09-1481 (8:03-cv-02441-RWT) YOUNG AGAIN PRODUCTS, INCORPORATED, A Maryland Corporation Plaintiff - Appellee v. JOHN ACORD, a/k/a John Livingston; MARCELLA ORTEGA, d/b/a Young Again Nutrients, d/b/a Young Again Nutrition Defendants - Appellants ORDER The petition for rehearing en banc was circulated to the full court. No judge requested a poll under Fed. R. App. P. 35. The court denies the petition for rehearing en banc. For the Court /s/ Patricia S. Connor, Clerk

44a Appendix F APPENDIX F RELEVANT CONSTITUTIONAL PROVISIONS, STATUTES AND RULES U.S. CONSTITUTION, AMENDMENT V Amendment V. Criminal actions Provisions concerning Due process of law and just compensation. No person shall be held to answer for a capital or otherwise infamous crime, unless on a presentment or indictment of a grand jury, except in cases arising in the land or naval forces, or in the militia, when in actual service in time of war or public danger, nor shall any person be subject for the same offense to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use without just compensation. 28 U.S.C. 2007. IMPRISONMENT FOR DEBT (a) A person shall not be imprisoned for debt on a writ of execution or other process issued from a court of the United States in any State wherein imprisonment for debt has been abolished. All modications, conditions, and restrictions upon such imprisonment provided by State law shall apply to any writ of execution or process issued from a court of the United States in accordance with the procedure applicable in such State. (b) Any person arrested or imprisoned in any State on a writ of execution or other process issued from any court of the United States in a civil action shall have the same jail privileges and be governed by the same regulations as

45a Appendix F persons conned in like cases on process issued from the courts of such State. The same requirements governing discharge as are applicable in such State shall apply. Any proceedings for discharge shall be conducted before a United States magistrate judge for the judicial district wherein the defendant is held. CONSTITUTION OF THE STATE OF TEXAS 1876 ARTICLE I BILL OF RIGHTS 18. Imprisonment for debt Sec. 18. No person shall ever be imprisoned for debt. RULE 16. PRETRIAL CONFERENCES; SCHEDULING; MANAGEMENT (a) PURPOSES OF A PRETRIAL CONFERENCE. In any action, the court may order the attorneys and any unrepresented parties to appear for one or more pretrial conferences for such purposes as: (1) expediting disposition of the action; (2) establishing early and continuing control so that the case will not be protracted because of lack of management; (3) discouraging wasteful pretrial activities; (4) improving the quality of the trial through more thorough preparation; and

46a Appendix F (5) facilitating settlement. (b) SCHEDULING. (1) Scheduling Order. Except in categories of actions exempted by local rule, the district judgeor a magistrate judge when authorized by local rule must issue a scheduling order: (A) after receiving the parties report under Rule 26(f); or (B) after consulting with the parties attorneys and any unrepresented parties at a scheduling conference or by telephone, mail, or other means. (2) Time to Issue. The judge must issue the scheduling order as soon as practicable, but in any event within the earlier of 120 days after any defendant has been served with the complaint or 90 days after any defendant has appeared. (3) Contents of the Order. (A) Required Contents. The scheduling order must limit the time to join other parties, amend the pleadings, complete discovery, and le motions. (B) Permitted Contents. The scheduling order may:

47a Appendix F (i) modify the timing of disclosures under Rules 26(a) and 26(e)(1);

(ii) modify the extent of discovery; (iii) provide for disclosure or discovery of electronically stored information; (iv) include any agreements the parties reach for asserting claims of privilege or of protection as trial-preparation material after information is produced; (v) set dates for pretrial conferences and for trial; and (vi) include other appropriate matters. (4) Modifying a Schedule. A schedule may be modied only for good cause and with the judges consent. (c) ATTENDANCE AND M ATTERS PRETRIAL CONFERENCE.
FOR

CONSIDERATION

AT A

(1) Attendance. A represented party must authorize at least one of its attorneys to make stipulations and admissions about all matters that can reasonably be anticipated for discussion at a pretrial conference. If appropriate, the court may require that a party or its representative be present or reasonably available by other means to consider possible settlement.

48a Appendix F (2) Matters for Consideration. At any pretrial conference, the court may consider and take appropriate action on the following matters: (A) formulating and simplifying the issues, and eliminating frivolous claims or defenses; (B) amending the pleadings if necessary or desirable; (C) obtaining admissions and stipulations about facts and documents to avoid unnecessary proof, a nd r u l i ng i n adva nce on the admissibility of evidence; (D) avoiding unnecessary proof and cumulative evidence, and limiting the use of testimony under Federal Rule of Evidence 702; (E) determining the appropriateness and timing of summary adjudication under Rule 56; (F) controlling and scheduling discovery, including orders affecting disclosures and discovery under Rule 26 and Rules 29 through 37; (G) identify ing w itnesses and documents, scheduling the ling and exchange of any pretrial briefs, and setting dates for further conferences and for trial;

49a Appendix F (H) referring matters to a magistrate judge or a master; (I) settling the case and using special procedures to assist in resolving the dispute when authorized by statute or local rule; (J) determining the form and content of the pretrial order; (K) disposing of pending motions; (L) adopting special procedures for managing potentially difcult or protracted actions that may involve complex issues, multiple parties, difcult legal questions, or unusual proof problems; (M) ordering a separate trial under Rule 42(b) of a claim, counterclaim, crossclaim, thirdparty claim, or particular issue; (N) ordering the presentation of evidence early in the trial on a manageable issue that might, on the evidence, be the basis for a judgment as a matter of law under Rule 50(a) or a judgment on partial ndings under Rule 52(c); (O) establishing a reasonable limit on the time allowed to present evidence; and

50a Appendix F (P) facilitating in other ways the just, speedy, and inexpensive disposition of the action. (d) PRETRIAL ORDERS. After any conference under this rule, the court should issue an order reciting the action taken. This order controls the course of the action unless the court modies it. (e) FINAL PRETRIAL CONFERENCE AND ORDERS. The court may hold a nal pretrial conference to formulate a trial plan, including a plan to facilitate the admission of evidence. The conference must be held as close to the start of trial as is reasonable, and must be attended by at least one attorney who will conduct the trial for each party and by any unrepresented party. The court may modify the order issued after a nal pretrial conference only to prevent manifest injustice. (f) SANCTIONS. (1) In General. On motion or on its own, the court may issue any just orders, including those authorized by Rule 37(b)(2)(A)(ii)(vii), if a party or its attorney: (A) fails to appear at a scheduling or other pretrial conference; (B) is substantially unprepared to participate or does not participate in good faithin the conference; or

51a Appendix F (C) fails to obey a scheduling or other pretrial order. (2) Imposing Fees and Costs. Instead of or in addition to any other sanction, the court must order the party, its attorney, or both to pay the reasonable expensesincluding attorneys feesincurred because of any noncompliance with this rule, unless the noncompliance was substantially justied or other circumstances make an award of expenses unjust. RULE 11. SIGNING PLEADINGS, MOTIONS, AND OTHER PAPERS; REPRESENTATIONS TO THE COURT; SANCTIONS (a) SIGNATURE. Every pleading, written motion, and other paper must be signed by at least one attorney of record in the attorneys nameor by a party personally if the party is unrepresented. The paper must state the signers address, e-mail address, and telephone number. Unless a rule or statute specically states otherwise, a pleading need not be veried or accompanied by an afdavit. The court must strike an unsigned paper unless the omission is promptly corrected after being called to the attorneys or partys attention. (b) REPRESENTATIONS TO THE COURT. By presenting to the court a pleading, written motion, or other paperwhether by signing, ling, submitting, or later advocating itan attorney or unrepresented party certies that to the best of the persons knowledge, information, and belief, formed

52a Appendix F after an inquiry reasonable under the circumstances: (1) it is not being presented for any improper purpose, such as to harass, cause unnecessary delay, or needlessly increase the cost of litigation; (2) the claims, defenses, and other legal contentions are warranted by existing law or by a nonfrivolous argument for extending, modifying, or reversing existing law or for establishing new law; (3) the factual contentions have evidentiary support or, if specically so identied, will likely have evidentiary support after a reasonable opportunity for further investigation or discovery; and (4) the denials of factual contentions are warranted on the evidence or, if specically so identied, are reasonably based on belief or a lack of information. (c) SANCTIONS. (1) In General. If, after notice and a reasonable opportunity to respond, the court determines that Rule 11(b) has been violated, the court may impose an appropriate sanction on any attorney, law rm, or party that violated the rule or is responsible for the violation. Absent exceptional circumstances, a law rm must be held jointly responsible for a violation committed by its partner, associate, or employee.

53a Appendix F (2) Motion for Sanctions. A motion for sanctions must be made separately from any other motion and must describe the specific conduct that allegedly violates Rule 11(b). The motion must be served under Rule 5, but it must not be led or be presented to the court if the challenged paper, claim, defense, contention, or denial is withdrawn or appropriately corrected within 21 days after service or within another time the court sets. If warranted, the court may award to the prevailing party the reasonable expenses, including attorneys fees, incurred for the motion. (3) On the Courts Initiative. On its own, the court may order an attorney, law rm, or party to show cause why conduct specically described in the order has not violated Rule 11(b). (4) Nature of a Sanction. A sanction imposed under this rule must be limited to what sufces to deter repetition of the conduct or comparable conduct by others similarly situated. The sanction may include nonmonetary directives; an order to pay a penalty into court; or, if imposed on motion and warranted for effective deterrence, an order directing payment to the movant of part or all of the reasonable attorneys fees and other expenses directly resulting from the violation. (5) Limitations on Monetary Sanctions. The court must not impose a monetary sanction:

54a Appendix F (A) against a represented party for violating Rule 11(b)(2); or (B) on its own, unless it issued the show-cause order under Rule 11(c)(3) before voluntary dismissal or settlement of the claims made by or against the party that is, or whose attorneys are, to be sanctioned. (6) Requirements for an Order. An order imposing a sanction must describe the sanctioned conduct and explain the basis for the sanction. (d) INAPPLICABILITY TO DISCOVERY. This rule does not apply to disclosures and discovery requests, responses, objections, and motions under Rules 26 through 37.