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Walters v. People's Republic of China

United States District Court, D. Columbia.

October 27, 2014

DEBBIE WALTERS, et al., Plaintiffs,


For UNITED STATES OF AMERICA, Interested Party: Daniel Schwei, LEAD ATTORNEY, U.S. DEPARTMENT OF JUSTICE, Civil Division, Washington, DC.

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DEBORAH A. ROBINSON, United States Magistrate Judge.

Plaintiffs Debbie Walters and Max Walters initiated this miscellaneous action requesting a judgment debtor examination of Defendant, the People's Republic of China, in order to identify assets within the United States to satisfy an outstanding judgment that Plaintiffs secured against Defendant in a civil action brought pursuant to the Foreign Sovereign Immunities Act (" FSIA" ) in the United States District Court for the Western District of Missouri. See Motion for Judgment Debtor Examination or, Alternatively, for Order Requiring Payment of Outstanding Judgment (Document No. 4). This action was referred to the undersigned United States Magistrate Judge to " consider this matter in its entirety." Order (Document No. 6) at 2.

In an Order (Document No. 24) filed on February 14, 2014, this court directed Defendant to " produce [certain] requested documents to counsel for Plaintiffs by no later than April 15, 2014" and to appear before the court for a judgment debtor examination on May 6, 2014.[1] At the May 6, 2014 hearing, counsel for Plaintiffs indicated that they served the court's order and Plaintiffs' request for production of documents on Defendant, see Plaintiffs' Exhibit 1, and that they received confirmation that it was delivered, see Plaintiffs' Exhibit 2. Defendant did not produce the requested documents, see Notice (Document No. 25), and did not appear for the May 6, 2014 hearing. Plaintiffs thus renewed their request that the court find

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Defendant in contempt, which the court previously stayed pending the scheduled judgment debtor examination. See Order at 3.

The court first notes that Plaintiffs' previous requests for a finding of civil contempt were predicated on Defendant's noncompliance with an Order (Document No. 8) filed by the court on March 6, 2012.[2] Shortly after entering the order, however, the court vacated it, see 04/26/2012 Minute Order, and it is thus not a proper basis upon which to request a finding of contempt.[3] Accordingly, the court will limit its consideration to Plaintiffs' request, stated on the record at the May 6, 2014 hearing, that the court find Defendant in contempt for failure to comply with the court's February 14, 2014 order.

Plaintiffs request that the court, pursuant to its inherent authority, find Defendant in civil contempt for its failure to comply with the court's February 14, 2014 order -- more specifically, for failing to produce the requested documents and for failing to appear for the judgment debtor examination, as ordered. Plaintiffs request sanctions in the amount of " $246,500 per day until the PRC satisfies its discovery obligations . . . or the Final Judgment has been paid in full." See Proposed Order (Document No. 22-1) at 3. In support of their request, Plaintiffs rely on Chabad v. Russian Federation, 915 F.Supp.2d 148 (D.D.C. 2013) and the CIA World Factbook's assessment of Defendant's economy. See Plaintiffs/Judgment Creditors Debbie Walters and Max Walters' Second Notice of New Relevant Authority Pertaining to Entry of Order of Contempt Against the People's Republic of China (Document No. 15) at 2 n.1, 3.

" [C]ourts have inherent power to enforce compliance with their lawful orders through civil contempt," and may do so when a party " has violated an order that is clear and unambiguous," and the violation is proved by " clear and convincing evidence." Armstrong v. Exec. Office of the President, Office of Admin., 1 F.3d 1274, 1289, 303 U.S.App.D.C. 107 (D.C. Cir. 1993) (citations omitted) (quoting other sources) (internal quotation marks omitted); see also Serv. Emps. Int'l Union Nat'l Indus. Pension Fund v. Artharee, No. 12-1233, 48 F.Supp.3d 25, 2014 WL 2580660, at *2 (D.D.C. June 10, 2014) (quoting Int'l Painters & Allied Trades Indus. Pension Fund v. ZAK Architectural Metal & Glass LLC,

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736 F.Supp.2d 35, 38 (D.D.C. 2010)) (" [A] party moving for civil contempt must show, 'by clear and convincing evidence, that: (1) there was a court order in place; (2) the order required certain conduct by the defendant; and (3) the defendant failed to comply with that order.'" ); Chabad, 915 F.Supp.2d at 151.

" Civil contempt, unlike the punitive remedy of criminal contempt, is designed to coerce compliance with a court order or to compensate a complainant for losses sustained." Chabad v. Russian Fed'n, 798 F.Supp.2d 260, 272 (D.D.C. 2011) (citation omitted) (quoting another source) (internal quotation marks omitted); see also United States v. Latney's Funeral Home, Inc., No. 11-2096, 41 F.Supp.3d 24, 2014 WL 1826732, at *3 (D.D.C. May 8, 2014) (citation omitted) (quoting another source) (internal quotation marks omitted) (" A civil contempt action is characterized as remedial in nature, used to obtain compliance with a court order or to compensate for damages sustained as a result from noncompliance." ). Thus, while the court has " broad" discretion in constructing civil contempt sanctions, the court's exercise of its discretion is guided by these goals. See, e.g., Latney's Funeral Home, 2014 WL 1826732, at *9 (citations omitted) (" Federal courts have broad equitable powers to ...

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