UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA
UNITED STATES OF AMERICA, Plaintiff,


### v. TWO GENERAL ELECTRIC AIRCRAFT ENGINES, WITH ENGINE SERIAL NUMBERS 695244 AND 705112, AND ALL RECORDS PERTAINING THERETO Defendant. Civil Action No. 14-2213 {GK)

Memorandum Opinion and Order
I . Background This case began onDecember 30, 2014, when the United States filed a Verified Complaint for Forfeiture in·Rem against two General Electric aircraft engines with engine serial numbers 695244 and 705112 (the "Defendant Engines"). See Unopposed Order to Repatriate the Defendant Properties ("Repatriation Order") [Dkt. No. 32] (describing the history of this case). At the time of the Government's Complaint, these engines were located in Antalya, Turkey. Id. Subsequently, Evans Meridians, Ltd. ("Evans," "Claimant"), fileda verifiedclaimtotheDefendantEngines.. Id. Afterfiling this claim, and unbeknownst to the Court or the Government, Evans 1transported the Defendant Engines from Turkey to Shanghai, China,
on or about July 27, 2015. Id. Inresponse, andpursuanttotheGovernment'sMotionforOrder to Repatriate, [Dkt. No. 31], on January 27, 2016, the Court ordered Evans to either repatriate the Defendant Engines to the United States or post a bond of $6,000,000 by March 31, 2016. Repatriation Order. To date, Evans has done neither. 1 Accordingly, the Government filed a Motion for Order to Show Cause why Evans should not be held in contempt for violating the Repatriation Order. Mot. for Order to Show Cause [Dkt. No. 41]. The Court granted the Government's Motion, scheduled a contempt hearing, and ordered that Evans' director or another representative with authority to direct the affairs of the corporation attend. Order ("Show Cause Order") [Dkt. No. 47]. On October24, 2016, the contempthearingwas held. Pursuant to the Court's ShowCause Order, EugenyBespalov, anattorneyfrom Russia with a power of attorney to bind Evans, attended and testified.

1 Evans' counsel candidly admits that Evans has not complied with the Court's Repatriation Order. Response to Mot. for Order to Show Cause ("Response") at p. 3-4 [Dkt. No. 44]; Unofficial Transcript of Show Cause Hearing ("Unofficial Transcript") at p. 17**~~** 9-10. An unofficial transcript of the Show Cause Hearing was preparedby the Court Reporter and will be filed on ECF. 2'>
II. Legal Standard "The Court has both an inherent and a statutory power to enforce compliancewithits orders andmayexercise that authority through a civil contempt proceeding." SEC v. Bankers Alliance, Corp., 881 F. Supp. 673, 678 (D.D.C. 1995) (citing 

### inter alia Shillitani v. United States, 384 U.S. 364, 370 (1966); United States v. United Mine Workers of America, 330 U.S. 258, 330-32 (1947); 18 

## u.s.c. § 401). "A party commits contempt when it violates a definite and specific court order requiring him to perform or refrain from performing a particular act or acts with knowledge of that order." Id. (internal citations and quotations omitted). "[T]he moving party has the burden of showing by clear and convincing evidence that (1) a court order was in effect, (2) the order required certain conduct by the respondent, and (3) the respondent failed to comply with the court's order." Id. The respondent "mayasserta presentinabilitytocomplywiththeorder in question" as an affirmative defense, but in doing so, has the burdenofproduction. U.S. v. Rylander, 460 U.S. 752, 757 (1983); Tinsely v. Mitchell, 804 F.2d 1254, 1256 (D.C. Cir. 1986) ("impossibility of performance constitutes a defense to a charge of contempt"). To meet this burden, the respondent "must demonstrate his inability to comply categorically and in detail."

3Bankers Alliance, 881 F. Supp. At 678; SEC v. Showalter, 227 F. Supp. 2d 110, 120 (D.D.C. 2002) (defendant cannot merely assert inability, butmust 

### "establishthat shehasmade
...allreasonable efforts" to comply (emphasis added)). Even if the respondent cannot demonstrate that she is unable tocomplywiththe court'sorder, thecourtisrequiredtoconsider her "good-faith efforts to comply with [the] order in mitigation of anypenalty" the courtmight impose. Tinsely, 804 F.2dat 1256. "To show good faith, the [respondent's] duty includes the obligation to be reasonably diligent and energetic in attempting to comply with [the] court's order, and to paywhat he can toward the judgment." Showalter, 227 F. Supp. 2d at 120. A respondent attempting to demonstrate that she has acted in good faith to complymust provide "adequate detailedproof." Id. Civil contempt is a remedial device, utilized to achieve compliance with a court's order. Id. Therefore, the sanction imposed is designed to secure compliance, not to punish. Bankers Alliance, 881 F. Supp. at 678; UnitedMineWorkers ofAmerica, 330 U.S. at 304 (the sanction imposed may be employed "to coerce the defendant into compliance with the court's order").

4III. Analysis A.Evans Is in Contempt of the Repatriation Order Here, there is no question that Evans has failed to comply with the Court's Repatriation Order, as Evans readily conceded that it has not. Response at p. 3-4; Unofficial Transcript of Show Cause Hearing ("Unofficial Transcript") at p. 17**~~** 9-10. Instead, Evans raises two arguments as towhy the Court shouldnot hold it in contempt. First, Evans argues that it is impossible to comply with either prong of the Court's Order. Response at 5-6. Evans forthrightly admitted that it has produced no evidence, whatsoever, demonstrating that it is unable to either repatriate the engines orpost a $6,000,000 bond. Id.; Unofficial Transcript at p. 18**~~** 3-10. Consequently, as Evans has not produced even one shredof evidence in support of its argument that it isunable to comply with the Court's Repatriation Order, it is obvious that Evans cannot meet its burden to demonstrate impossibility. 2 Second, Evans argues that it is making good faith efforts to complywiththe RepatriationOrder. Response at 7. In support of

2 The only evidence presented at the Show Cause Hearing was the testimony of Mr. Bespalov. When asked what assets Evans has, information that would be necessary for the Court to determine whether Evans has the ability to comply with the Repatriation Order, Mr. Bespalov stated that he did not have any information regarding Evans' assets. Unofficial Transcript at p. 44**~** 4. 5this argument, Evans asserts that it has an ownership interest in
an entirely different set of engines that are located in Miami (the "Miami Engines") and that it is currently attempting use its stakeinthoseengines tomeetthetermsof theRepatriationOrder. Id. The Government responds that the Miami Engines have nothing to do with this case and argues that Evans' conduct regarding those engines does not constitute a good faith effort to comply withtheRepatriationOrder. ReplytoMot. forOrdertoShowCause ("Reply") at 3-4. The Court agrees with the Government. Taken at face value, Evans' offer is not a concrete step towards compliance with the Court's Repatriation Order, but a mere proposal with anuncertain chance of success. Evans asserts that it can sell the Miami Engines, and use the funds to pay some indeterminate portion of the $6,000,000 bond, or alternatively, post the Miami Engines themselves as substitutecollateral for the $6,000,000bond. Yet, byEvans' owns admission, itlacksphysicalpossessionoftheMiami Engines, and the thirdpartythat does havepossessionof themhas
some sortofmonetaryclaimagainstEvanswhichcloudsEvans' title to them. Thus, Evans presently lacks the ability to either sell the Miami Engines or post them as substitute collateral, and it is wholly uncertain whether Evans will ever have the ability to do

6so. All Evans has is a questionableplan for future action. That plan does not constitute an effort at compliance, but is at best,
a proposal to make future efforts that, if successful, might produce assets that would then enable Evans to make a good faith effort at compliance. Indeed, when Evans' conduct is viewed in its entirety, it is abundantly clear that it has not met its burden to demonstrate that it made "all reasonable efforts to comply" with the Court's Repatriation Order. Showalter at 120. A showing of good-faith efforts by a contemnor requires her to bring forward evidence of her ability to comply, so that the court may evaluate the efforts shehas actuallymade againstthose shehadthecapabilitytomake. Here, Evans' refusal to put forward such evidence dooms its argument that it is making good faith efforts, just as surely as it doomed its argument of impossibility. Because Evans has failed to present any evidence of howmuch it would cost to repatriate the Defendant Engines or what assets Evans holds, the Court cannot conclude that Evans made all reasonable efforts to repatriate the Defendant Engines. Similarly, the absence of any evidence of Evans' financial state makes it impossible for the Court to conclude that Evans has done all it reasonably can to post the $6,000,000 bond. To show good faith, Evans must demonstrate that it is "paying what [it] can."

7 ' )Showalterat 120. Yet, the Court has nowayof knowingwhat Evans "can" pay. The sole piece of evidence before the Court is the testimony of Mr. Bespalov. However, he failed to identify any steps that Evans has taken to repatriate the Defendant Engines to the United States beyond a single inquiry to the Chinese company that ! ,- allegedly possesses them, asking for their return. Unofficial Transcript at p. 46**~~** 17-20. Given the absence of meaningful evidence, the Court does not consider Evans' single request to have the Defendant Engines returned a reasonable effort at compliance. In sum, Evans has failed topresent anyevidence showingthat it was "reasonably diligent and energetic in attempting to comply with this [C]ourt's order." Id. Therefore, the Court holds that Evans has not made a good faith effort to comply with the Repatriation Order. As Evans admits that it has failed to comply with the Repatriation Order and has failed to offer any evidence suggesting that it is unable to comply or has made a good faith effort to do so, the Court finds Evans in civil contempt. B.The Goverrunent's Proposed Sanction is Appropriate The Court nowturns to the questionof what sanctionwouldbe sufficient to coerce Evans to comply with the Repatriation Order. UnitedMineWorkers ofAmerica, 330U.S. at 304. At the ShowCause 8Hearing, the Government sought a sanctionof $15,000perdayuntil Evans complies with the Repatriation Order. In determining what constitutes an effectively coercive sanction, the court "consider[s] the character and magnitude of the harm threatened by continued contumacy, and the probable effectiveness of any suggested sanction in bringing about the result desired. /1 Id. In doing so, the court "consider[s] the amount of [thecontemnor1s] financial resources andthe consequent seriousness of the burden to that particular [contemnor]
./1 Id. Where, as here, "the contemnor is the only one who possess the relevant financial information, and chooses not to disclose 

### it, 11 the Court's inability to consider the contemnor1s financial
resources is not a bar to imposing sanctions. See Richmark Corp.
v. Timber Falling Consultants, 959 F.2d 1468, 1481-82 (9th Cir. 1992) (internal quotationmarks and citations omitted). In this case, the harm created by Evans 1 continuing failure to repatriate the Defendant Engines is substantial. The Government's Complaint alleges that the Defendant Engines were destined for Iran, and more specifically, the Islamic Revolutionary Guard Corps-Qods Force, a designated Foreign Terrorist Organization. See Complaint. If correct, eachdaythat the Defendant Engines remain outside the United States increases

9the risk that they will arrive at their intended destination, and thereby benefit a hostile organization. In addition, the Government's proposed sanction of $15,000 per day appears reasonably calculated to coerce compliance with the RepatriationOrder. If Evans were to refuse to comply for one year, the sanctionwouldtotal roughly $5.5 milliondollars. This amount is less than the $6,000,000 bond contained in the RepatriationOrderandfallsbetweenthedisputedestimatedvalues of the Defendant Engines. See Response at 2, 4 n.3 (noting that Evans values the engines at roughly $4,000,000, while the Government likelyvalues them at roughly $6,000,000). Therefore, to the extent that Evans has any assets, which remains an open question, the proposed sanctionpresents Evans with the choice of repatriating Defendant Engines within a year or risk forfeiting assets roughly equivalent to the value of Defendant Engines. Thus, the Government's proposed sanction is reasonably calculated to coerce Evans' compliance with the Repatriation Order.3

3 A sanction of roughly equivalent size was held reasonable under similar circumstances. See Richmark, 959 F.2d 1468 (upholding sanctionof $10,000perdayagainsta foreigndefendantwhorefused to provide information about its assets) 10.:-.

IV. Conclusion For the foregoing reasons, the Court holds Claimant Evans Meridian in civil contempt of its Repatriation Order, and imposes
a sanction of $15,000 per day until Evans complies with the Repatriation Order. It is hereby ORDERED, thatEvansMeridians, Ltd., shallbeheldincontempt of Court for violating the Repatriation Order; and it is further ORDERED, that the Court shall sanctionEvansMeridians, Ltd., by requiring that it pay a fine of $15,000 per day, from the day this Order issues until it complies with the Repatriation Order, to the Registry of the Court.

GladySK:Sler November 2, 2016 United States District Judge

Copies via ECF to all counsel of record

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