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Bank of Hope v. Chon

United States Court of Appeals, Third Circuit

September 17, 2019

BANK OF HOPE, as successor to Wilshire Bank
v.
MIYE CHON, also known as Karen Chon; SUK JOON RYU, also known as James S. Ryu; TAE JONG KIM; BERGENFIELD BAGEL & CAFE, doing business as Cafe Clair; MAYWOOD BAGEL INC.; UB'S PIZZA & BAGEL INC.; UB's BAGEL & CAFE INC.; UBK BAGELS CORP., doing business as Franklin Bagels & Cafe SUK JOON RYU, a/k/a James S. Ryu, Third Party Plaintiff
v.
KWON HO JUNG; JAE WHAN YOO; STEVEN S. KOH; LISA PAI, Third Party Defendants Suk Joon Ryu, Appellant

          Argued June 4, 2019

          On Appeal from the United States District Court for the District of New Jersey (D.C. No. 2-14-cv-01770) District Judge: Honorable Jose L. Linares (Retired)

          David V. Dzara Stephen G. Harvey [ARGUED] Steve Harvey Law Counsel for Appellant

          Michael M. Yi [ARGUED] Lee Anav Chung White Kim Ruger & Richter Counsel for Appellee Bank of Hope

          Before: JORDAN, BIBAS, and MATEY, Circuit Judges

          OPINION

          BIBAS, CIRCUIT JUDGE.

         Courts have inherent power to keep their proceedings fair and orderly. They can use that power to order the parties before them not to talk with each other, the press, and the public. But that power comes with limits. The First Amendment requires that we tread carefully when we restrict speech. A court must thus explain why restricting speech advances a substantial government interest, consider less-restrictive alternatives, and ensure that any restriction does not sweep too broadly.

         Here, Bank of Hope sued Suk Joon Ryu for embezzling money from its customers. As the case went on, Ryu began sending letters to the Bank's shareholders. Those letters alleged that the Bank's claims were baseless and were ruining his reputation. He hoped that the letters would pressure the Bank to settle. The Bank then asked the magistrate judge to ban Ryu from contacting its shareholders. The magistrate judge agreed, and the District Court affirmed. But the District Court marshaled no evidence that this restriction on speech was needed to protect this trial's fairness and integrity. And it considered no less-restrictive alternatives. So its order violates Ryu's First Amendment rights, and we will vacate and remand.

         I. Background

         A. The Bank accused Ryu of embezzlement

         Ryu helped found Wilshire Bank and worked there for decades as a high-level executive. Things changed in 2013: Wil-shire Bank went through a series of mergers and eventually became Bank of Hope. That same year, Ryu left to work for another bank.

         About a year later, the Bank found out that one of its employees, Miye Chon, had stolen money from dozens of customers. She had managed to embezzle more than a million dollars. The Bank fired her, and she later pleaded guilty.

         Chon tried to take Ryu down with her. She alleged that Ryu had taken part in the embezzlement and taken a sizable cut of the proceeds. The Bank believed her and jumped into action: It froze Ryu's personal account at the Bank. It shared its suspicions with Ryu's new employer, which then fired him. And it sued both Chon and Ryu to recover the embezzled funds.

         Ryu denied any wrongdoing, and the government never charged him. He also filed counterclaims against the Bank for various torts and breach of contract. Thus began this litigation.

         B. The District Court restrained Ryu's speech

         Litigation can take a long time. Ryu grew impatient, so he took matters into his own hands. He sent a letter to the Bank's chief executive, denying any role in the embezzlement and dis- paraging the evidence against him. He claimed that the litigation was ruining his professional ...


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