Claim dismissed due to eight-year delay

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Where the plaintiffs waited at least eight years before moving to hold the defendant in contempt for violating a prior injunction, the contempt claim was dismissed because the significant delay prejudiced the defendant.

Background

Before the court is defendant i-TV’s motion to dismiss plaintiffs’ contempt claim, which plaintiffs oppose. In its motion, i-TV makes three arguments: (1) plaintiffs’ attempt to hold i-TV in contempt is barred by the law-of-the-case doctrine; (2) i-TV never violated the October 2006 injunction and (3) plaintiffs’ contempt claim is barred by laches.

Even accepting plaintiffs’ arguments that i-TV violated the 2006 order and the 2007 judgment, and that the law of the case doctrine does not apply, the doctrine of laches still bars the relief plaintiffs seek.

Lack of diligence

i-TV alleges the delay in this case amounted to more than 10 years, starting when plaintiffs filed their first contempt motion in October 2006. Plaintiffs instead measure the lapsed time from DIGI Kft.’s 2008 acquisition of i-TV, which they assert violated the 2007 default judgment order.

Even on plaintiffs’ more generous timeline, the result is a delay longer than eight years between when they “discover[ed] . . . the facts giving rise to [their] cause of action” and when they brought that cause of action before the court in May 2017. Courts have found far shorter delays to be unreasonable.

Plaintiffs contend that the delay, even if unreasonable, should be excused by the obstacles they anticipated in enforcing their judgment against i-TV abroad. They cite that the American Embassy in Hungary warned them “that a lawsuit would likely be futile” and that they faced a “lack of options and money after spending years litigating the first phase of this lawsuit.”

Whether or not plaintiffs were in a better financial position to succeed in their action in 2017 than they were in 2008 is beside the point; that a delay potentially improved plaintiffs’ chances of victory when they eventually brought an action does not excuse their delay in bringing it.

Prejudice

As i­-TV correctly argues, Laszlo Borsy – a key witness to i-TV’s conduct in 2007 and 2008 – was an active participant in the litigation when plaintiffs’ cause of action first accrued, but his unknown whereabouts render him inaccessible now. On top of prejudicing i-TV’s ability to litigate effectively, plaintiffs’ long delay in enforcing their judgment has also given rise to economic prejudice against i-TV and the dismissed respondents.

Plaintiffs respond that any economic prejudice that i-TV’s parent companies may suffer is the result of their failure to comply with the court’s default judgment order, rather than plaintiffs’ unreasonable delay. That argument runs counter to the purpose of the doctrine of laches, which is designed to limit the recovery of those who have slept on their rights even when their claim may otherwise have been well-founded. Moreover, even if plaintiffs’ original investments are responsible for some portion of the growth that i-TV has experienced in the intervening years, plaintiffs’ extended delay has made it difficult, if not impossible, to tease out how much of i-TV’s successes trace back to plaintiffs’ contribution.

Defendant i-TV’s motion to dismiss plaintiffs’ contempt claim granted.

Hawkins v. Borsy, Case No. 05-cv-1256, Aug. 27, 2020. EDVA at Alexandria (Brinkema). VLW 020-3-439. 11 pp.