Axia NetMedia Corp. v. Mass. Technology Park Corp.

United States Court of Appeals

For the First Circuit

No. 17-1607

AXIA NETMEDIA CORPORATION,

Plaintiff, Appellant,

v.

MASSACHUSETTS TECHNOLOGY PARK CORPORATION,

d/b/a Massachusetts Technology Collaborative,

Defendant, Appellee.

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Timothy S. Hillman, U.S. District Judge]

Before

Lynch, Circuit Judge,

Souter, Associate Justice,*

and Kayatta, Circuit Judge.

Brian P. Voke, with whom Adam A. Larson and Campbell Campbell

Edwards & Conroy PC were on brief, for appellant.

Robert J. Kaler, with whom Edwin L. Hall and Holland & Knight

LLP were on brief, for appellee.

April 25, 2018

* Hon. David H. Souter, Associate Justice (Ret.) of the

Supreme Court of the United States, sitting by designation.

KAYATTA, Circuit Judge. This appeal arises out of the

efforts of the Massachusetts Technology Park Corporation ("MTC")

to provide broadband network access in western and north central

Massachusetts. An independent public instrumentality of the

Commonwealth of Massachusetts, MTC entered into two contracts

relevant to this appeal. Under one contract, Axia NGNetworks

U.S.A., which later changed its name to KCST, Inc. ("KCST"), agreed

to operate the network that MTC would build. Under a second

contract, KCST's parent company, Axia NetMedia Corporation

("Axia"), guaranteed KCST's performance. With the network now

constructed and operating, MTC on the one hand and KCST and Axia

on the other hand have lodged claims against each other, and KCST

has filed for bankruptcy. By the parties' agreement, those claims

will be resolved, perhaps in the coming months, by arbitration.

In the meantime, MTC secured from the United States District Court

a preliminary injunction ordering Axia, as guarantor of KCST, to

perform various obligations of KCST while the parties' substantive

disputes remain unresolved. Axia appeals and, for the following

reasons, we affirm on all but one narrow issue, for which we

remand.

I.

We begin with the contract between MTC and KCST pursuant

to which MTC agreed to build and KCST agreed to operate the new

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network. We call this contract the "NOA" (for "network operator

agreement").

Under the NOA, KCST agreed to be "responsible for all

aspects of the management, sales, monitoring, operations, support,

and maintenance of the MTC network." KCST also agreed to pay all

costs of operating the network and an annual oversight fee to MTC.

In return, KCST retained the network's revenue up to a defined

threshold, above which it agreed to share the revenue with MTC.

Article 11 of the NOA calls for binding arbitration of

any disputes that the parties are unable to resolve on their own.

Key to this appeal is the final provision of this article. Titled

"Continued Performance," Article 11.2 states:

The Parties agree to continue performing their

respective obligations under the Agreement

(including the Wholesale Customer contracts

and SLAs) while the dispute is being resolved

unless and until such obligations are

terminated or expire in accordance with the

provisions of this Agreement, or unless

otherwise directed by MTC.

On February 25, 2011, the same day that KCST and MTC

inked the NOA, Axia and MTC entered into an agreement under which

Axia guaranteed KCST's obligations in the NOA (we call this

contract the "Guaranty"). In the Guaranty, Axia promised that,

"should Network Operator default in any of its payment or

performance obligations under the Network Operator Agreement,"

then Axia would "make all such payments and perform all such

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obligations of the Network Operator," and "fully and punctually

pay and discharge, as the same become due and payable, any and all

costs, expenses and liabilities for or in connection with the

Guaranteed Obligations." That promise, though, is limited: "This

guaranty is limited to and capped at the amount of Four Million

($4,000,000) US Dollars, and should Guarantor advance to MTC funds

up to said amount, Guarantor shall have no further obligation or

liability under this Agreement."

The Guaranty also addresses dispute resolution. Under

the heading "Governing Law, Jurisdiction, Venue and Forum," the

Guaranty allows MTC, at its sole election, to file a demand for

arbitration to resolve any dispute that the parties fail to resolve

through mediation. The Guaranty contains no express statement

about what, if anything, Axia must do pending the resolution of

any dispute. It does, though, state: "All other provisions

relating to dispute resolution or arbitration contained in the

Network Operator Agreement are herein incorporated by reference."

MTC and KCST's relationship soured by the time MTC began

turning over the network to KCST in late 2013. KCST claimed that

the network MTC delivered was not the one it had been promised.

KCST's specific grievance was that the number of "Community Anchor

Institutions," dubbed "CAIs," that had been built was too small.

CAIs are facilities such as schools and municipal buildings that,

according to Axia, are directly connected to the network, serve as

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hubs of connectivity for extending the network to other customers,

and are critical to the network's financial viability (and thus to

KCST's net revenues). As the dispute sharpened in July of 2014,

KCST notified MTC that, pending the resolution of the dispute,

KCST would be "withholding all fees and payments to or on behalf

of MTC." This notification led MTC to obtain an injunction from

a Massachusetts state court requiring KCST, in accord with the

NOA's continued performance provision, to continue performing its

obligations (including making payments) during the dispute.

During the following two years, the dispute simmered, but neither

party pushed it toward resolution by arbitration.

In 2016, a Swiss investment firm acquired a controlling

position in Axia. Because the Federal Communications Commission

had granted authorization to KCST to operate the network, and this

authorization could not be transferred without FCC approval,

KCST's operation of the network, as a wholly-owned subsidiary of

Axia, apparently would have added a hurdle to the acquisition's

regulatory approval. Therefore, to facilitate the acquisition,

Axia transferred the stock of KCST into a trust. The FCC approved

this transaction. MTC, which had not participated in the FCC

proceeding, filed for reconsideration, which the FCC denied.

According to MTC, KCST then made a number of changes to

the website KCST maintained for the broadband network. Claiming

the website changes to be a breach of the NOA's continued

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performance provision, MTC went to Massachusetts state court to

enforce the previously issued preliminary injunction. The next

day, KCST declared bankruptcy. Under section 362(a) of the

Bankruptcy Code, the filing of Chapter 11 bankruptcy stayed MTC's

state court action. See 11 U.S.C. § 362(a).

KCST apparently continued to perform what it viewed as

its operational obligations, but ceased to make many of the

payments that it was obligated to make under the NOA. Anticipating

a claim against it as guarantor, Axia preemptively filed suit in

federal district court, seeking a declaratory judgment that MTC

had materially breached the NOA by failing to build sufficient

CAIs, and that, because of that breach, Axia had no responsibility

under the Guaranty. We will refer to this disagreement between

MTC and Axia as "the underlying dispute." MTC has since

successfully demanded arbitration of the underlying dispute, to be

held in the coming months. MTC also filed in this lawsuit

commenced by Axia a motion for a temporary restraining order and

preliminary injunction requiring Axia as guarantor to perform

KCST's obligations under the NOA while the arbitration of the

underlying dispute is pending. We will call this disagreement and

its ancillary issues the "continued performance dispute."

After conducting evidentiary hearings and hearing

argument concerning the continued performance dispute, the

district court issued a preliminary injunction. In its order

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implementing the preliminary injunction, the district court

imposed a series of requirements on Axia. It required Axia both

to pay KCST's unmet payment obligations and to continue to provide,

through Axia's affiliates, the "same level" of services to the

network that those affiliates were currently providing. The order

also required Axia to provide assistance in transferring the

services provided by Axia's affiliates to a new network operator,

should MTC so request. As part of this transfer assistance, the

order required Axia to provide to MTC all information concerning

the broadband network in Axia's control. Axia opposed issuance of

the order, and now asks that we set it aside in toto.

II.

The district court employed the familiar four-factor

test for a preliminary injunction, analyzing the likelihood of

success on the merits, the presence of irreparable harm absent

relief, the balance of the equities, and the public interest. See

Arborjet, Inc. v. Rainbow Treecare Sci. Advancements, Inc., 794

F.3d 168, 171 (1st Cir. 2015). Although we review the district

court's decision to grant a preliminary injunction for abuse of

discretion, we review its findings of fact for clear error and its

conclusions of law de novo. See OfficeMax, Inc. v. Levesque, 658

F.3d 94, 97 (1st Cir. 2011).

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A.

1.

Axia's lead argument on appeal is that the district court

focused on the wrong dispute in assessing the likelihood of success

on the merits. In evaluating this first prong of the test for

preliminary injunctive relief, the district court trained its

focus on whether MTC was likely to succeed in its argument that

the Guaranty imposed an obligation on Axia to continue performing

during the dispute resolution process. In other words, the court

assessed the likely outcome of the continued performance dispute.

Axia contends that the district court should have instead

determined whether MTC was likely to succeed in the parties'

underlying dispute about whether MTC's alleged breaches of the NOA

freed Axia of any obligations under the Guaranty.

Axia's argument misapprehends the substance of the

contractual undertaking that MTC seeks to enforce. MTC alleges

that Axia promised to continue performance under the Guaranty even

while a dispute exists as to whether MTC has breached the NOA. In

the face of such a claim, MTC's success does not hinge on

establishing that it will prevail in the underlying dispute.

Rather, to succeed, it need prevail in establishing that Axia bound

itself to perform pendente lite. The district court therefore

quite properly focused its likelihood of success analysis upon the

likelihood that MTC would succeed in the continued performance

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dispute, i.e., on its claim that Axia must perform until the

underlying dispute is resolved, however it might be resolved. See

Guinness-Harp Corp. v. Jos. Schlitz Brewing Co., 613 F.2d 468, 471

n.1 (2d Cir. 1980) (noting the "adverse consequences [that] would

occur" should, "for the purpose of assessing probable success on

the merits, the merits were incorrectly considered to be the

ultimate issue of contract termination," when that issue was

subject to arbitration (internal citation omitted)); see also

Peabody Coalsales Co. v. Tampa Elec. Co., 36 F.3d 46, 47-48 (8th

Cir. 1994) (granting injunctive relief pending the resolution of

a dispute in arbitration based on a similar contractual provision).

To conclude otherwise would be to turn a promise to perform while

a dispute is pending into a lesser promise, specifically, one to

perform while a dispute is pending only if the promisor is likely

to lose the dispute. And in this case, it would require the

district court to opine on the merits of a dispute that will be

decided by an arbitrator.

Of course, one can imagine a case in which the line

between deciding whether a party has promised to perform and

deciding the merits of the parties' underlying dispute might not

be so sharp. When a court orders a party to perform, it must

define "performance." In so doing, it might run into a dispute

about what performance is. In this very case, for example, we

address, infra, whether performance by Axia includes making

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expenditures in excess of $4 million. As we will explain, we

accept Axia's argument that any order to spend in excess of that

amount does indeed need to be justified (and is not) by an analysis

of the underlying merits of the parties' positions on that issue.

But that issue is ancillary to the merits of the parties' pending

arbitration and, as became clear at oral argument, the parties do

not dispute the meaning of the $4 million cap. We therefore need

not -- and do not -- decide how a court asked to enforce a promise

to perform pending arbitration should proceed in assessing the

likelihood of success on the merits if presented with a material

dispute concerning what performance in ordinary course entails.

Rather, we conclude more narrowly that, on the record in this case,

the district court did not err by training its likelihood of

success analysis on the question of whether Axia promised to

continue performance until the arbitrator resolves the dispute.

In so concluding, we do not overlook Axia's argument

that we must assess the merits of the underlying dispute because

Axia seeks rescission as a result of MTC's alleged breaches.

Axia's reasoning seems to be that if its rescission claim is likely

to prevail, then it is relieved of all its promises -- including

any promise to perform pendente lite. In rejecting this argument,

we rely on the case law rejecting identical arguments aimed at

avoiding promises to arbitrate. In brief, this case law recognizes

that even claims for rescission based on fraud do not nullify an

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agreement to arbitrate unless the arbitration agreement itself

(rather than the contract as a whole) was procured by fraud. See

Farnsworth v. Towboat Nantucket Sound, Inc., 790 F.3d 90, 96 (1st

Cir. 2015) (citing, among other cases, Prima Paint Corp. v. Flood

& Conklin Mfg. Co., 388 U.S. 395, 402-04 (1967)); see also Rent-

A-Ctr., W., Inc. v. Jackson, 561 U.S. 63, 71 (2010) ("[E]ven

where . . . the alleged fraud that induced the whole contract

equally induced the agreement to arbitrate[,] . . . we nonetheless

require the basis of the challenge to be directed specifically to

the agreement to arbitrate before the court will intervene.");

Dialysis Access Ctr., LLC v. RMS Lifeline, Inc., 638 F.3d 367, 383

(1st Cir. 2011) (affirming the district court's decision to compel

arbitration because, "[a]lthough Appellants have challenged the

validity of the [agreement] as a whole, they have not specifically

challenged the validity of the Arbitration Clause itself"). In

this contract, the promise to perform while arbitration proceeds

qualifies easily as a term of the agreement that describes the

manner in which the parties' dispute will proceed to arbitration.

See Peabody Coalsales Co., 36 F.3d at 48 (citing the Federal

Arbitration Act's requirement that a court order the parties "to

proceed to arbitration in accordance with the terms of the

agreement," 9 U.S.C. § 4). So, since there is no claim by Axia

that its dispute resolution promise was itself obtained by fraud

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or is otherwise invalid, the fact that Axia will ask the arbitrator

to rescind the Guaranty is of no moment in this particular case.

2.

Having thus confirmed that the district court trained

its "likelihood of success" assessment on the proper question, we

turn next to the merits of that question. But before doing so, we

must address a threshold issue relevant to our review.

Although the injunction in this case is styled as

"preliminary," once arbitration is completed, any possible need to

compel performance pendente lite disappears. For that reason,

some appellate courts review such preliminary injunctions as

either permanent injunctions or orders for specific performance.

See Nemer Jeep-Eagle, Inc. v. Jeep-Eagle Sales Corp., 992 F.2d

430, 433-34 (2d Cir. 1993); Guinness-Harp Corp., 613 F.2d at 471.

This can matter in some cases because a preliminary injunction

rests on the reasonableness of a prediction concerning the final

outcome while a permanent injunction, or order granting a request

for specific performance, rests on the correctness of the final

outcome.

Nevertheless, in this particular case we need not decide

whether the order should be treated as a permanent injunction.

For one, no party raises or challenges the district court's

decision to proceed with the motion as a request for a preliminary

injunction. More importantly, as we will explain, in this case

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the pivotal question is a question of law, i.e., how to interpret

a written contract concerning which neither party relies on any

relevant extrinsic evidence. See OfficeMax, Inc., 658 F.3d at 97.

We decide that question of law de novo, even in reviewing a

preliminary injunction. Id. So, in short, our answer would not

differ depending on whether we treat the injunction as preliminary

or final.

We therefore turn our attention to that question of law:

Does the Guaranty require Axia to perform its obligations as

guarantor while the underlying dispute is being resolved? The

last sentence of the Guaranty incorporates by reference "[a]ll

other provisions relating to dispute resolution or arbitration

contained in the Network Operator Agreement." As we have noted,

the NOA does indeed contain an article titled "Dispute Resolution."

Article 11.1.1 states: "Any dispute between the Parties either

with respect to the interpretation of any provision of the

Agreement or with respect to the performance by Network Operator

or by MTC hereunder shall be resolved as specified in this

Article 11 . . . ." Article 11.2 then clearly states that the

"Parties agree to continue performing their respective obligations

under the Agreement . . . while the dispute is being resolved."

So, a straightforward incorporation of Article 11.2 into the

Guaranty would seemingly mean that the "Parties" to the Guaranty

(i.e., MTC and Axia) "agree to continue performing."

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Axia nevertheless argues that Article 11.2 of the NOA

only imposes a continued performance obligation on the "Network

Operator," and because Axia is not operating the network,

incorporation of Article 11.2 does not impose any such obligation

on Axia. This argument makes no sense. Article 11.2 imposes a

continuing obligation requirement on the "Parties." In other

words, like every other provision in the NOA (or in pretty much

any contract), it imposes obligations on the parties to that

contract. By incorporating that provision of the NOA into the

Guaranty, the drafters of the Guaranty effectively adopted the

provision as their own, at which point the "Parties" would

obviously mean the parties to the Guaranty. For example, suppose

the NOA stated that "the parties will keep any dispute

confidential," and the Guaranty said it incorporated this

confidentiality clause. As incorporated, such a clause would not

simply state in the Guaranty what the parties to the NOA will do.

Rather, it would become a promise of the parties to the Guaranty.

Similarly, here, when the parties to the Guaranty agree that they

incorporate a clause saying that the "Parties agree to perform

their respective obligations under the Agreement . . . while a

dispute is being resolved," then that incorporation plainly means

that the parties to the incorporating contract (i.e., the Guaranty)

agree to perform their obligations under that contract pending

resolution of any dispute. Otherwise, the incorporation would do

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no work. See McMahon v. Monarch Life Ins. Co., 186 N.E.2d 827,

830 (Mass. 1962) ("[A] contract is to be construed to give a

reasonable effect to each of its provisions.").

For the foregoing reasons, we find that the district

court did not err in finding that MTC will likely prevail on its

claim that Axia is obligated to continue performing its obligations

as guarantor until the parties' underlying dispute is resolved.1

B.

In addition to challenging the decision to issue a

preliminary injunction, Axia also presents a litany of challenges

to the substance of the injunction. We address each challenge in

turn.

1.

Axia first contends that only KCST has FCC authorization

to operate the network, hence the district court cannot order Axia

to do so without violating FCC regulations. The premise behind

this argument does not fit the facts as the parties describe them.

KCST, while in bankruptcy, has not rejected the NOA and continues

as network operator. Under a Transitional Services Agreement, two

Axia affiliates, Axia SuperNet Ltd. and Axia Connect Ltd., provide

essential services for operating the network. That arrangement

was itself disclosed to the FCC at the time FCC approval was

1

We address, below, the possibility that the district court

may have overshot the mark on the $4 million cap.

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obtained, when Axia told the FCC that KCST would "continue to use

the technical, security, and customer support services currently

provided to [KCST] by such affiliates of Axia." The district

court's order simply requires Axia to maintain this status quo by

continuing "to provide, through its affiliates Axia SuperNet Ltd.

and Axia Connect Ltd., the same level of service to MTC's Network

that those affiliates are currently providing, including all the

technical, administrative, and operational support services they

are currently providing for the 123 Network." The injunction also

requires Axia as guarantor to make payments that KCST previously

made under the NOA, but Axia makes no argument that the making of

payments would constitute an activity prohibited by the FCC. To

the contrary, the payments would seem to facilitate maintenance -

- rather than interruption -- of the FCC-approved arrangement while

the underlying dispute is resolved.

Axia posits that much of this might change if KCST were

to stop performing at all as network operator. Why this would be

so is not readily apparent. In any event, KCST apparently now

continues to serve as network operator. The bankruptcy court has

also lifted the automatic stay of actions seeking relief involving

KCST with regard to any action or order "as may be necessary to

enforce the preliminary injunction and any related orders." And

any lack of funds that might otherwise keep KCST from continuing

to serve as network operator would seem to be taken care of by the

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compelled payments of Axia. On such a record, we see no need to

accept Axia's invitation to speculate about a hypothetical change

to the status quo in the short time remaining before the

arbitration is completed. This is especially so where that change

to the status quo could take many forms, the differences among

which could be dispositive to our resolution. And it is even more

so where the parties point us to little substantive law that would

govern our resolution of these hypothetical situations.

We similarly see no merit in Axia's contention that the

FCC's decision denying reconsideration sought by MTC precludes MTC

"from conducting any further litigation challenging KCST's

operation of MTC's Network" on the basis of issue or claim

preclusion. Issue preclusion would only apply in this case if

Axia could show, among other things, that the two proceedings

involved "the same issue of law or fact." See Vargas-Colón v.

Fundación Damas, Inc., 864 F.3d 14, 26 (1st Cir. 2017) (quoting

Robb Evans & Assocs. v. United States, 850 F.3d 24, 32 (1st Cir.

2017)). But the issues in the FCC's reconsideration -- the

procedural propriety of MTC's motion and whether reconsideration

of the FCC's prior decision "is required in the public interest"

-- are squarely different than the issues in this appeal. And if

Axia instead intends its argument to sound in claim preclusion, it

fares no better. MTC's motion for reconsideration before the FCC

and its current attempt to enforce the Guaranty's contractual

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provisions are not "causes of action . . . sufficiently identical

or related for claim preclusion purposes." Airframe Sys., Inc. v.

Raytheon, Co., 601 F.3d 9, 15 (1st Cir. 2010).

2.

Axia next contends that the district court's order

imposes on it a greater financial burden than permitted by the

Guaranty. Axia's liability under the Guaranty is expressly

"limited to and capped at" $4 million. The Guaranty thus states

that, "should [Axia] advance to MTC funds up to said amount, [Axia]

shall have no further obligation or liability under this

Agreement." The parties appear to have no dispute concerning the

meaning of this cap. Rather, they disagree about whether the

district court's order respects that cap. The order certainly

acknowledges the cap by providing that, once Axia's payments under

the Guaranty reach $4 million, the order's provisions requiring

Axia to "pay all invoices" and provide affiliate services "shall

no longer have effect." But, the order also requires Axia to

provide commercially reasonable transfer assistance, should MTC so

request. And in connection with those services, the order requires

Axia to provide MTC with all information concerning the network in

Axia's possession. These latter two requirements are not subject

to the order's $4 million limitation. Rather, they are limited

only in their duration. The order provides that Axia's obligations

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under these two requirements will cease after providing transfer

assistance for one year.

Axia contends that complying with the order could

therefore require Axia to expend more than $4 million in total.

This might occur, for example, should Axia hit the $4 million cap

but have remaining transfer assistance obligations.

We agree with Axia that, under certain circumstances,

without any change to the status quo, the district court's order

could subject Axia to burdens that exceed the cap. MTC argues

that the unlimited obligation to provide transfer assistance and

information for a specific period of time is justified by the fact

that the NOA so obligates KCST, and Axia as guarantor must perform

KCST's obligations. But, as we have explained, and as MTC

acknowledges, the Guaranty comes with an express cap. So, on this

issue, the order modifies rather than merely enforces Axia's

promise to perform during the dispute.

Therefore, we remand to the district court with

instructions to amend the order so as to make clear that Axia's

obligations terminate once it has properly expended $4 million in

complying with the Guaranty.2 For the sake of clarity, we note

that only Axia's net costs properly attributed to its performance

2 We express no opinion on what application, if any, the cap

would have to a liability arising from a source other than properly

complying with the Guaranty.

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under the Guaranty count toward the $4 million cap, but leave it

to the district court to resolve, should the issue arise, the

precise contours of this requirement.

3.

Axia also argues that the injunction fails to abide by

the requirements imposed by Rule 65 of the Federal Rules of Civil

Procedure. Axia contends that the court both failed to order a

sufficient bond under Rule 65(c), and failed to state the terms of

the order "specifically," as required by Rule 65(d)(1)(B).

Under Rule 65(c), a court may issue a preliminary

injunction "only if the movant gives security in an amount that

the court considers proper to pay the costs and damages sustained

by any party found to have been wrongfully enjoined." Fed. R.

Civ. P. 65(c). The purpose of such a bond is to ensure that the

enjoined party may readily be compensated for the costs incurred

as a result of the injunction should it later be determined that

it was wrongfully enjoined. See Global NAPs, Inc. v. Verizon New

England, Inc., 489 F.3d 13, 20-21 (1st Cir. 2007). The bond also

serves to provide notice to the moving party as to the "maximum

extent of its potential liability, since the amount of the bond

'is the limit of the damages the [enjoined party] can obtain for

a wrongful injunction.'" Id. at 21 (quoting Continuum Co. v.

Incepts, Inc., 873 F.2d 801, 803 (5th Cir. 1989)). By providing

that the bond should be "in an amount that the court considers

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proper," Fed. R. Civ. P. 65(c), the Federal Rules of Civil

Procedure vest the district court with "wide discretion," Ferguson

v. Tabah, 288 F.2d 665, 675 (2d Cir. 1961).3 In this case, after

holding a hearing, the district court required MTC to post a $4

million bond.

Axia first argues that the district court abused its

discretion because Axia could plausibly expend more than $4 million

in complying with the order. But, because we remand on this aspect

of the order, as explained above, this challenge is now moot. And

even if it were not, Axia does not point us to any authority, nor

are we aware of any, that establishes the proposition that it is

not within the district court's discretion to require a bond for

less than the upper bound of what the enjoined party could, in

theory, expend. We also note that the bond is only intended to

protect the enjoined party pending the outcome of the underlying

dispute. See Global NAPs, Inc., 489 F.3d at 21-22. Thus, the

district court need only require "an amount that the court

considers proper," Fed. R. Civ. P. 65(c), for the time between

when it issues the injunction and when the arbitration will likely

3 The Second Circuit in Ferguson considered a version of the

rule that read, "in such sums as the court deems proper." The

rule has been amended to now read, "in an amount that the court

considers proper." We do not think that these minor changes alter

the discretion granted to the district court.

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conclude. The sum is not intended to cover the enjoined party's

contractual liability beyond the scope of the injunction.

Axia further argues that it was an abuse of discretion

for the district court not to account for the possibility that,

after handing over the network passwords to MTC, as the district

court later required, Axia could be liable should something happen

to the network. We do not think this argument gets off the ground.

For one, Axia has not explained how it might incur liability as a

result of giving the passwords to MTC beyond what it would risk as

a result of KCST's normal operation of the network. And if Axia's

argument is simply that it might incur liability from its own

conduct, or that of KCST, we do not see how the court could

plausibly be required to take such contentions into account in

calculating a bond. For example, should a court require a

distributor to perform its distribution obligations during a

dispute, we do not think that the district court would be obligated

to require the moving party to post a bond that covers the

potential liability that might be incurred should the

distributor's drivers cause an accident on the job.

Axia next contends that the order's requirement that

Axia "continue to provide, through its affiliates . . . the same

level of service that those affiliates are currently providing"

runs afoul of the requirement in Rule 65(d)(1)(B) that an

injunction "state its terms specifically." Fed. R. Civ.

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P. 65(d)(1)(B). The order, Axia argues, is too vague to pass

scrutiny under this standard, and renders Axia vulnerable to

contempt proceedings. We disagree.

The "specificity requirements are not 'merely technical'

but are 'designed to prevent uncertainty and confusion and to avoid

basing a 'contempt citation on a decree too vague to be

understood.'" NBA Props. v. Gold, 895 F.2d 30, 32 (1st Cir. 1990)

(alterations omitted) (quoting Schmidt v. Lessard, 414 U.S. 473,

476 (1974)). The purpose of the specificity requirement is to

protect "the elementary due process requirement of notice." Scott

v. Schedler, 826 F.3d 207, 212 (5th Cir. 2016) (per curiam)

(quoting U.S. Steel Corp. v. United Mine Workers of Am., 519 F.2d

1236, 1246 (5th Cir. 1975)). An "injunction must simply be framed

so that those enjoined will know what conduct the court has

prohibited." Meyer v. Brown & Root Constr. Co., 661 F.2d 369, 373

(5th Cir. 1981) (citing Int'l Longshoremen's Ass'n v. Phila. Marine

Trade Ass'n, 389 U.S. 64, 75 (1967)). Thus, an order that

"judgment . . . is entered in accordance" with an opinion that

merely states that the plaintiff is "entitled to . . . injunctive

relief," without more, fails the test. Mass. Ass'n of Older Ams.

v. Comm'r of Pub. Welfare, 803 F.2d 35, 40 (1st Cir. 1986)

(alteration in original) (quoting Schmidt, 414 U.S. at 474). But,

conversely, "elaborate detail is unnecessary." Islander E. Rental

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Program v. Barfield, 145 F.3d 359, 1998 WL 307564, at *4 (5th Cir.

Mar. 24, 1998) (per curiam) (unpublished).

This order passes muster. We see no reason why Axia

does not know, or could not readily discern, the precise level of

services its affiliates had been providing. Nor has Axia advanced

any reason as to why it may be in the dark. Further, we note that

the affiliates' responsibilities to KCST are spelled out in a

thirty-two page "Transitional Services Agreement." And, to the

degree that Axia's concern stems from a worry that its good faith

attempts to comply with the order nevertheless render it vulnerable

to contempt proceedings, our case law accounts for such concerns

by cautioning courts against finding contempt when faced with

genuine ambiguities about an order's scope. See NBA Props., 895

F.2d at 32 ("[W]e must read any 'ambiguities' or 'omissions' in

such a court order as 'redound[ing] to the benefit of the person

charged with contempt.'" (quoting Ford v. Kammerer, 450 F.2d 279,

280 (3d Cir. 1971) (per curiam))).

4.

Axia's remaining challenges fare no better. Axia argued

in its briefs that the order runs afoul of the automatic bankruptcy

stay's prohibition on actions that "exercise control over property

of the estate." 11 U.S.C. § 362(a)(3). On January 18, 2018,

however, the bankruptcy court lifted the stay to allow the district

court to take any actions necessary to enforce the preliminary

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injunction. This action moots Axia's challenge under the

bankruptcy stay.

To the degree that Axia contends that the district court,

in granting MTC's motion for a preliminary injunction, abused its

discretion in finding irreparable harm to MTC or in its balance of

equities analysis, Axia has simply pointed us to nothing that would

cause us to conclude that the district court went beyond the bounds

of its discretion. The district court conducted several days of

hearings before reaching its conclusions, during which it

considered many of the same arguments Axia now advances on appeal.

We see no abuse of discretion in the district court's conclusions.

We have considered the remaining arguable challenges

sprinkled without any development through Axia's brief, and find

them likely without merit, and certainly waived. See United States

v. Zannino, 895 F.2d 1, 17 (1st Cir. 1990) ("[I]ssues adverted to

in a perfunctory manner, unaccompanied by some effort at developed

argumentation, are deemed waived.").

III.

For the foregoing reasons, we affirm the district

court's judgment as modified by this opinion, and remand to the

district court for the limited purpose of amending the order to

make clear that Axia's obligations terminate once Axia itself has

properly expended $4 million in complying with the Guaranty.

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