United States Court of Appeals
For the First Circuit
No. 00-1503
MICROSYSTEMS SOFTWARE, INC., ET AL.,
Plaintiffs, Appellees,
v.
SCANDINAVIA ONLINE AB, ET AL.,
Defendants, Appellees.
____________________
WALDO JAQUITH, LINDSAY HAISLEY, AND BENNETT HASELTON,
Appellants.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Edward F. Harrington, U.S. District Judge]
_____________________
Before
Selya, Circuit Judge,
Wallace,* Senior Circuit Judge,
and Tauro,** District Judge.
Christopher A. Hansen, with whom Sarah R. Wunsch, David L.
Sobel, and Jessica Litman were on brief, for appellants.
Charles R. Nesson, Lawrence Lessig, Jonathan L. Zittrain,
and Diane Cabell on brief for themselves as amici curiae.
Andrew Grosso on brief for Association for Computing
Machinery Committee on Law and Computing Technology, amicus
curiae.
Irwin B. Schwartz, with whom William C. Nystrom, Colleen C.
Cook, and Schwartz and Nystrom, LLC were on brief, for
plaintiffs-appellees.
September 27, 2000
________________
*Of the Ninth Circuit, sitting by designation.
**Of the District of Massachusetts, sitting by designation.
SELYA, Circuit Judge. This appeal trails in the wake
of a permanent injunction entered by the United States District
Court for the District of Massachusetts that restrained the
named defendants — Eddy L.O. Jansson, Matthew Skala, and the
companies that host their respective web pages (Scandinavia
Online AB and Islandnet.com) — and "their agents, employees, and
all persons in active concert or participation" with them from
publishing or otherwise using a bypass code known as
"cp4break.zip" or "cphack.exe." The named defendants stipulated
to the entry of the injunction, but three nonparties — Waldo
Jaquith, Lindsay Haisley, and Bennett Haselton — now attempt to
appeal. They claim to have copied the proscribed code from the
named defendants' web pages and assert that the injunction
impermissibly interferes with their right to continue posting it
on their "mirror sites."
Although this proceeding takes place against the
futuristic backdrop of cyberspace, its resolution lies in
traditional principles of standing. Application of those
principles requires us to terminate the attempted appeal.
Consequently, we have no occasion to reach the tangled issues of
copyright and First Amendment law that simmer beneath the
surface of the appellants' plaints.
I. BACKGROUND
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The plaintiffs, Microsystems Software, Inc. and Mattel,
Inc. (collectively, Microsystems), developed and distributed
"Cyber Patrol" — a blocking device coveted by parents who wish
to prevent their children from roaming into salacious Internet
venues. This software program contains a secret list of
objectionable web sites and, once installed, prevents computer
users from accessing those sites.
It is said that every action produces an equal, yet
opposite, reaction. So it was here: shortly after Microsystems
introduced Cyber Patrol, Jansson and Skala reverse-engineered it
and wrote a bypass code that enabled users not only to thwart
the program but also to gain access to the list of blocked
sites.1 They then posted the bypass code on their own web sites
and gave blanket permission for others to copy it. The
appellants took advantage of this offer.
Microsystems was not pleased. On March 15, 2000, it
brought suit seeking injunctive relief against the defendants
1
"Reverse engineering" involves gaining access to the
functional elements of a software program. Methods of reverse
engineering include observing the program in operation,
performing a static or dynamic examination of the individual
computer instructions contained within the program, and using a
program known as a disassembler to translate the binary machine-
readable object code that runs on the computer into the human-
readable words and symbols known as source code. See generally
Sony Computer Entertainment, Inc. v. Connectix Corp., 203 F.3d
596, 599-600 (9th Cir. 2000), petition for cert. filed, 69
U.S.L.W. 3023 (U.S. June 30, 2000) (No. 00-11).
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and "those persons in active concert or participation with
them." Microsystems complained that it was suffering
irreparable injury because "[m]ultiple individuals throughout
the United States and the world . . . have downloaded, copied
and created 'mirror' Web sites" revealing the bypass code. When
the district court issued a temporary restraining order two days
later, Microsystems e-mailed copies of it, along with sundry
supporting documents, to various persons (including the
appellants). Its cover letter stated in pertinent part:
On March 17, 2000, United States District
Judge Edward Harrington entered a temporary
restraining order . . . prohibiting any
further publication of "CP4break.sip" or
cphack.exe" or any derivative thereof, which
likely violate United States copyright laws
. . . It has come to our attention that
your Web hosting service or Web site is
publishing one or both of those prohibited
files. This letter and the enclosed Word
documents and *uni files will place you on
notice of Judge Harrington's order.
Microsystems also served the appellants with subpoenas directing
them to disclose information concerning the identity of "[e]ach
and every person who produced, received, viewed, downloaded or
accessed [the bypass code] or any derivative thereof from your
Web site or Web site hosting service."
The appellants promptly removed the bypass code from
their web sites. They then filed special appearances in the
pending case and, without submitting to the court's
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jurisdiction, moved to quash the subpoenas. They also proffered
oppositions to the pending motion for preliminary injunction.
Notably, however, they did not move to intervene.
On March 24, the district court granted the motion to
quash. Three days later, the court held a hearing on the motion
for preliminary injunction. At that session, Microsystems
advised the court that it had reached an accord with the named
defendants and proffered a proposed final decree that purported
to prohibit the defendants and those persons "in active concert"
with them from posting the bypass code. Notwithstanding the
appellants' nonparty status, the district court allowed them to
argue in opposition to the entry of the injunction and to file
a supplemental memorandum. The appellants submitted this
memorandum on March 28. Later that day, the court entered the
permanent injunction, accompanying it with findings of fact and
conclusions of law.2
Microsystems lost no time in furnishing the appellants
with notice of the injunction. The appellants unsuccessfully
sought a stay — the district court denied it, declaring that
they had "no standing to pursue any appeal . . . in view of the
2
The permanent injunction, together with certain comments of
the district court, appears in the official reporter. See
Microsystems Software, Inc. v. Scandinavia Online AB, 98 F.
Supp. 2d 74 (D. Mass. 2000). The court's findings of fact and
conclusions of law are not reported.
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fact that they ha[d] never intervened in the case" — and
simultaneously filed a notice of appeal.
II. ANALYSIS
The existence vel non of appellate standing calls for
a quintessentially legal judgment, to be made without deference
to the trial court's view. See In re Cusumano, 162 F.3d 708,
713 (1st Cir. 1998); see also New Hampshire Right to Life
Political Action Comm. v. Gardner, 99 F.3d 8, 12 (1st Cir. 1996)
(applying de novo review to trial court's standing
determination). Because standing is a sine qua non to the
prosecution of a suit in a federal court, the absence of
standing sounds the death knell for a case. See Sea Shore Corp.
v. Sullivan, 158 F.3d 51, 54 (1st Cir. 1998). The same holds
true for appeals: if the putative appellants lack standing to
appeal, the only role for the appellate court is to memorialize
that fact and simultaneously terminate the proceeding. See
Warth v. Seldin, 422 U.S. 490, 498-99 (1975); United States v.
AVX Corp., 962 F.2d 108, 113 (1st Cir. 1992).
As a general rule, only parties to a civil action are
permitted to appeal from a final judgment. See Marino v. Ortiz,
484 U.S. 301, 304 (1988) (per curiam). The Supreme Court, in
its most recent pronouncement on the subject, has described this
rule as "well settled." Id. History confirms the accuracy of
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that description. See, e.g., Karcher v. May, 484 U.S. 72, 77
(1987); United States ex rel. Louisiana v. Jack, 244 U.S. 397,
402 (1917); Ex parte Leaf Tobacco Bd. of Trade, 222 U.S. 578,
581 (1911) (per curiam); Ex parte Cockcroft, 104 U.S. (14 Otto)
578, 578-79 (1882); Ex parte Cutting, 94 U.S. (4 Otto) 14, 20-21
(1877); Dopp v. HTP Corp., 947 F.2d 506, 512 (1st Cir. 1991).
For purposes of the "only a party may appeal" rule, the
term "party" includes not only those who are parties in the case
when judgment is entered, but also those who properly become
parties (as, say, by intervention). See Marino, 484 U.S. at
304. The term sometimes encompasses those who "have acted or
been recognized as parties," but by some oversight were not
formally made parties. Ex parte Cutting, 94 U.S. at 20-21; see
also Sangre de Cristo Community Mental Health Serv. v. United
States (In re Vargas), 723 F.2d 1461, 1464 (10th Cir. 1983).
Finally, the term also extends, in limited circumstances, to
those who were parties "to some earlier judgment called into
question by the appeal." Dopp, 947 F.2d at 512. The appellants
plainly do not qualify as parties under any of these
definitions.
Of course, exceptions exist to virtually every rule,
and courts, from time to time, have endeavored to craft
exceptions to the rule that only parties may appeal from an
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adverse judgment. By and large, the Supreme Court has been
inhospitable to these endeavors. Marino illustrates the point.
In the underlying case, the Second Circuit had dismissed an
appeal taken by nonparties, but suggested in dictum that there
were several exceptions to the rule that only parties may appeal
from an adverse judgment. See Hispanic Soc'y of New York City
Police Dep't v. New York City Police Dep't, 806 F.2d 1147, 1152
(2d Cir. 1986). Although the Marino Court subsequently affirmed
the judgment, it took pains to add a caveat:
The Court of Appeals suggested that there
may be exceptions to this general rule,
primarily "when the nonparty has an interest
that is affected by the trial court's
judgment." 806 F.2d at 1152. We think the
better practice is for such a nonparty to
seek intervention for purposes of appeal . .
. .
484 U.S. at 304.
We believe that this message is reasonably clear.
While there is an exception to the "only a party may appeal"
rule that allows a nonparty to appeal the denial of a motion to
intervene, see id., the situation differs when intervention is
readily available. In that event, courts are powerless to
extend a right of appeal to a nonparty who abjures intervention.
See Felzen v. Andreas, 134 F.3d 873, 874 (7th Cir. 1998), aff'd
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sub nom. by an equally divided Court, California Pub. Employees'
Retirement Sys. v. Felzen, 525 U.S. 315 (1999).3
The appellants labor to convince us that, Marino
notwithstanding, we ought to recognize a long string of
exceptions to the rule mandating party status as a prerequisite
to an appeal. We are not persuaded. Marino, as we read it,
teaches that if any exceptions to the rule exist, those
exceptions are few and far between.
Turning from the general to the specific, we address
the appellants' principal arguments. First, they venerate our
statement that "when a lower court specifically directs an order
at a non-party or enjoins it from a course of conduct," the
nonparty may enjoy a right to appeal. Dopp, 947 F.2d at 512
(dictum). They then note that the injunction in this case
purports to bind not only the named defendants but also "those
persons in active concert or participation" with them. Using
this phrase as a springboard, they jump to the conclusion that
the injunction was specifically directed at them, and claim that
it therefore fits within the Dopp dictum. We reject this
construct.
3An affirmance by an equally divided court denies
precedential force to the opinion in question. See Rutledge v.
United States, 517 U.S. 292, 304 (1996). It does not, however,
tarnish earlier opinions.
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To state the obvious, a dictum is not a holding — and
the Dopp dictum may be no more than mere buzznacking. We need
not probe that point too deeply, however, because, even if we
assume for argument's sake that the Dopp dictum has some force,
the resultant exception, narrow in all events, see id.
(describing exception as "isthmian"), would not apply at all in
this case. The boilerplate terminology contained in the instant
injunction merely parrots the language of Federal Rule of Civil
Procedure 65(d).4 So phrased, the injunction in no way attains
the degree of specificity necessary to open the gates to the
potential exception that Dopp envisioned. Cf. Keith v. Volpe,
118 F.3d 1386, 1391 n.7 (9th Cir. 1997) (holding that a nonparty
who was haled into court to respond to a show-cause order had
appellate standing in a subsequent appeal of that order).
In a related vein, the appellants assert that the lower
court's findings of fact propel them into a safe harbor. In
particular, they note the court's finding that "multiple
individuals throughout Massachusetts and the United States
downloaded, copied and created 'mirror' sites on the internet,
4
That rule provides in pertinent part that all orders
granting injunctive relief shall bind "the parties to the
action, their officers, agents, servants, employees, and
attorneys, and . . . those persons in active concert or
participation with them who receive actual notice . . . ." Fed.
R. Civ. P. 65(d).
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which replicated the Bypass Code," and that "many . . . did so
for the avowed purpose of seeking to prevent [the district
court] from awarding meaningful relief." This finding, they
say, specifically directs the injunction at them. But this line
of argumentation elevates hope over reason. The description
"multiple individuals throughout the United States" is
breathtakingly broad. There is nothing in the record that
limits its application to the appellants or that aims the
court's ukase in their direction.5
The appellants next attempt to lure us into weighing
the equities of the case, asseverating that it is unfair to
force them into a judicial proceeding and then prevent them from
prosecuting an appeal. We have two rejoinders, either of which
is fully dispositive of the matter.
First and foremost, the appellants' asseveration is a
doctrinal misfit. Although it draws some sustenance from the
case law, see, e.g., Commodity Futures Trading Comm'n v.
Topworth Int'l, Ltd., 205 F.3d 1107, 1113 (9th Cir. 2000), the
asseveration overlooks the abecedarian principle that a court
5
In mounting this argument, the appellants place great
weight on Microsystems's statements and its transmission of a
copy of the injunction to the appellants. But the direction of
the injunction is for the district court to determine, and the
statements and actions to which the appellants advert are in no
way attributable to the court.
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that lacks adjudicatory power has no authority over a case. See
Steel Co. v. Citizens for a Better Environment, 523 U.S. 83, 94
(1998); Ex parte McCardle, 74 U.S. (7 Wall.) 506, 514 (1868).
Since standing is jurisdictional in nature, that principle
dictates that where, as here, the putative appellants lack
standing, the court lacks power to assay and reconcile the
equities of the case. See Felzen, 134 F.3d at 877-78.
Consequently, equitable considerations are immaterial to our
determination of the standing issue.
Second — and equally devastating to the appellants'
position — the equities do not favor permitting them to appeal.
After entering the proceedings in a successful effort to quash
the subpoenas that had been served upon them, the appellants did
not quit the field victorious, but, rather, elected to expand
their role and contest the merits of the case before the
district court. At the same time, they made a strategic choice
not to intervene in the proceedings. By intervening, see Fed.
R. Civ. P. 24, the appellants could have become parties,
entitled to both that status's benefits (including the right to
appeal an unfavorable judgment) and its burdens.
In our view, the decision to forgo intervention works
a forfeiture of any claim to appellate standing. Those who
aspire to litigate issues cannot have it both ways: they cannot
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evade potential liability by declining to seek party status and
still expect to be treated as parties for the purpose of testing
the validity of an ensuing decree.6 Cf. United States v.
Tierney, 760 F.2d 382, 388 (1st Cir. 1985) ("Having one's cake
and eating it, too, is not in fashion in this circuit.").
Moving ahead, the appellants maintain that they should
be permitted to appeal because they have an interest that is
affected by the district court's judgment and they were
permitted to vindicate that interest by participating in the
proceedings below. Some courts have recognized exceptions to
the "only a party may appeal" rule in analogous cases. See,
e.g., Kaplan v. Rand, 192 F.3d 60, 66-67 (2d Cir. 1999). To the
extent that these cases are authority for the appellants'
position, we respectfully decline to follow them. A mere
interest in the outcome of litigation will not suffice to confer
6 To be sure, the appellants complain that they were put
between a rock and a hard place because intervention would have
forced them to waive their jurisdictional defenses and submit to
the district court's jurisdiction. But this seems to be another
way of saying that they made a calculated decision that the
injunction sought by Microsystems would not aggrieve them enough
to warrant taking whatever risks were attendant to intervention.
There is nothing remotely unfair about being put in that
position. Litigation strategies almost always involve balancing
of risk and reward, and the fundamental rationale behind the "no
intervention, no appeal" rule counsels in favor of holding the
appellants to the predictable consequences of their strategic
choice. See Dopp, 947 F.2d at 512; Kenny v. Quigg, 820 F.2d
665, 667 (4th Cir. 1987).
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standing upon a nonparty. See Marino, 484 U.S. at 304; Felzen,
134 F.3d at 874; J.A. Shults v. Champion Int'l Corp., 35 F.3d
1056, 1060 (6th Cir. 1994); see also Guthrie v. Evans, 815 F.2d
626, 627 (11th Cir. 1987). As we have said, "the fact that an
order has an indirect or incidental effect on a non-party does
not confer standing to appeal. If the rule were otherwise,
Pandora's jar would be open, and strangers to a litigated case
could pop in and out of the proceedings virtually at will."
Dopp, 947 F.2d at 512.
By the same token, mere participation in the
proceedings below will not suffice to confer standing upon a
nonparty. After all, the officers who became the nonparty
appellants in Hispanic Society participated in the proceedings
before the district court, see 806 F.2d at 1152, but the Supreme
Court found that they lacked standing to appeal, see Marino, 484
U.S. at 304; see also Croyden Assocs. v. Alleco, Inc., 969 F.2d
675, 679 (8th Cir. 1992) (noting that the Marino Court did not
perceive the Marino appellants' participation in the proceedings
below as warranting an exception to the general rule). Thus, we
reject the appellants' claim that participation below, even if
coupled with an indirect interest in the judgment sought to be
appealed, confers standing.
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Ably represented, the appellants take yet another tack.
They remonstrate that if they are not permitted to appeal at
this juncture, they will forfeit any opportunity to contest the
injunction on the merits. In their view, this would deprive
them of due process.
This argument has a certain superficial allure, because
"the validity and terms of an injunction [ordinarily] are not
reviewable in contempt proceedings." G. & C. Merriam Co. v.
Webster Dictionary Co., 639 F.2d 29, 34 (1st Cir. 1980). This
rule applies both to those who were parties to the underlying
case, see, e.g., NLRB v. Union Nacional de Trabajadores, 611
F.2d 926, 928 n.1 (1st Cir. 1979), and to nonparties in active
concert or participation with the enjoined party, see, e.g., NBA
Props., Inc. v. Gold, 895 F.2d 30, 33-34 (1st Cir. 1990).
The attractiveness of the appellants' argument
diminishes rather rapidly, however, when one recalls that the
appellants filed two memoranda with the district court and
contested the merits of the injunction at a hearing. More
importantly, they had every opportunity to intervene and
purposefully declined to do so. In these circumstances,
whatever predicament they envision is of their own construction.
Even if more were needed — and we doubt that it is —
the adjudicative framework surrounding contempt proceedings
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fully protects nonparties' constitutional rights. If contempt
proceedings are in fact undertaken, the forum court will resolve
the fact-specific question of whether the cited nonparty was in
active concert or participation with the named defendant. If
so, the named defendant will be deemed the nonparty's agent, and
the nonparty's right to due process will have been satisfied
vicariously. See Merriam, 639 F.2d at 35; Alemite Mfg. Corp. v.
Staff, 42 F.2d 832, 832-33 (2d Cir. 1930) (L. Hand, J.). If,
however, the party prosecuting the contempt proceeding fails to
show active concert or participation, a finding of contempt will
not lie. See Zenith Radio Corp. v. Hazeltine Research, Inc.,
395 U.S. 100, 112 (1969); Merriam, 639 F.2d at 35.
We explain briefly why, in either of these events, due
process is not at risk. Contempt proceedings operate to ensure
that nonparties have had their day in court. In order to hold
a nonparty in contempt, a court first must determine that she
was in active concert or participation with the party
specifically enjoined (typically, the named defendant). See
Merriam, 639 F.2d at 35; Alemite, 42 F.2d at 832-33. This
means, of course, that the nonparty must be legally identified
with that defendant, or, at least, deemed to have aided and
abetted that defendant in the enjoined conduct. See Merriam,
639 F.2d at 35; Alemite, 42 F.2d at 832-33. The existence of
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such a linkage makes it fair to bind the nonparty, even if she
has not had a separate opportunity to contest the original
injunction, because her close alliance with the enjoined
defendant adequately assures that her interests were
sufficiently represented. See NBA Props., 895 F.2d at 33;
Merriam, 639 F.2d at 37; cf. Regal Knitwear Co. v. NLRB, 324
U.S. 9, 14 (1945) ("[D]efendants may not nullify a decree by
carrying out prohibited acts through aiders and abettors,
although they were not parties to the original proceeding.").
The coin, however, has a flip side. A nonparty who has
acted independently of the enjoined defendant will not be bound
by the injunction, and, if she has had no opportunity to contest
its validity, cannot be found in contempt without a separate
adjudication. See id.; see also Alemite, 42 F.2d at 832
(declaring that a decree which purports to enjoin nonparties who
are neither abettors nor legally identified with the defendant
"is pro tanto brutum fulmen," and may safely be ignored). This
tried and true dichotomy safeguards the rights of those who
truly are strangers to an injunctive decree. It does not offend
due process.
III. CONCLUSION
To summarize, we hold that nonparties who have had the
opportunity to seek intervention, but have eschewed that course,
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lack standing to appeal. See Marino, 484 U.S. at 304; Dopp, 947
F.2d at 512. While there may be isolated exceptions to this
rule — a matter on which we take no view — the instant appeal
falls comfortably within the mainstream. Because the appellants
lack standing, we can go no further.
Appeal dismissed. Costs in favor of plaintiffs-
appellees.
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