FI LED U. S . COURT OF AP PE ALS E L E V E N T H C IR C U IT A pr i l 13, 2006 T HOM AS K. KAHN CL E RK [ P UB L I S H] I N THE UN I TE D STATE S C OU RT OF APPE ALS F O R T H E E L E V E N T H C IR C U IT

________________________ N o. 05- 13401

________________________ D . C . D ocketN o. 01 -026 82 -C V -V E H -S S E R R A C H E V R O L E T , I N C ., P la in tif f- A p p e lle e , v ersu s G E N E R A L M O T O R S C O R P ., D e fe n d a n t- A p p e lla n t, E D W A R D S C H E V R O L E T E A S T , I N C ., S U S A N S C H E I N C H E V R O L E T , I N C ., D e fe n d a n ts .

________________________ A pp ea l fr om the U ni t ed S t at es D i stri ctC ou rt fo rth e N o r th e r n D i s tr i c to f A l a b a ma

_________________________ ( A p r i l 13, 2006)Honora ble Lloyd D. Georg e, United States District Judge f or the District of Nevada , * sitti ngby desig nation. 2 B efore T JO F L A T , P R Y O R , C i rc ui tJudg es , and G E O R G E , D i stri ctJudg e. * P R Y O R , C i rc ui tJudg e: T hi s a ppe a l by G e ne r a l M ot or s of a n or de rof

s a nc t i ons tha ti m pos e d af i ne of $7 00 , 00 0 and struck the af fi rm ati ve defens es of G M re gardi ng re s j ud i ca t a, c ol l a t e r a l e s t oppe l , a nd othe rdoc tr i ne s of i s s ue pr e c l us i on pr e s e nt s t w o i s s ue s : ( 1) w h e th e rit w a s a n a b u s e o f d is c r e tio n to f

in d th a t G M d is o b e y e d a n o r d e rto pr oduc e doc um e nt s r e l a t i ng t o ve hi c l e a l l oc a t i on a nd s a t e l l i t e de a l e r s hi ps ; a nd ( 2) w h e th e rth e s a n c tio n s v io la te d th e D u e P r o c e s s C la u s e o f th e F if th A m e n d m e n t. A l tho ug h the di stri ctcourtdi d n otabuse i t s di sc re t i on w hen i tfoun d thatG M had vi ol at ed an order t o p rodu ce i nform ati on abou ti t s s at el l i t e dea l er shi ps, the di stri ct c o u r t v io la te d th e d u e p r o c e s s r ig h ts o f G M b y fa ilin g to p r o v id e a n y r a tio n a l b a s is forthe s a nc t i ons i ti m pos e d. W e a f f i r m i n par t , r e ve r s e i n pa r t , va c a t e i n pa r t , a nd r e m a n d th is m a tte rto th e d is tr ic t c o u r t. I . B AC KG RO UN D T o e x p la in th e c o n te x t o f th is a p p e a l, w e a d d r e s s th r e e m a tte r s . W e b e g in w i th a shortdi sc ussi on of the controvers y thatl ed t o l i t i gat i on i n st at e a nd fe dera l co u rt s b et w een S erra an d G M . W e th en ad d ress th e st at e co u rtl i t i g at i o n . F i n al l y,3

w e di sc uss the fe dera l l i t i gat i on , i ncl ud i ng the di sc ov er y di sput es and o rder s that le d to th is a p p e a l. A . Fac ts L e adi ng to L i t i gat i on S erraC hevrol etop er at es a C hevrol etdeal er shi p i n C ent erpo i nt , A l abam a. S erraal l eges thatG M encouraged S errat o o pen a “ sa t el l i t e dea l er shi p, ” a t e m por a r y l oc a t i on w he r e C he vr ol e tve hi c l e s c a n be s ol d, be c a us e S e rr ac oul d not ef fe cti vel y provi de se rvi ce i n o ne l ocati on t o the l ar ge geog raph i c are a S erraw as a s s i gne d by G M . O n J ul y 18, 1988, G M a nd S e rr ae xe c ut e d as a t e l l i t e a gr e e m e nt thatcr ea t ed a new fa ci l i ty i n G ar dend al e, A l abam a. A f te rth e s a te llite d e a le r s h ip o p e n e d , S e rr as u rp a s s e d E d w a r d s C h e v r o le t, a n o th e rC h e v r o le t d e a le rin B ir m in g h a m , to b e c o m e th e le a d in g C h e v r o le t d e a le rin the B i r m i ngha m a r e a . S e rr aa l l e ge s tha tL e on E dw a r ds , the ow ne rof E dw a r ds C hevrol et , and the N ati on al A ut om ob i l e D ea l er s A ss oci ati on (N A D A ) c om pl ai ned to G M e x e c u tiv e s a b o u t S e rr a ’s s a te llite d e a le r s h ip in G a r d e n d a le . S erraal l eges thatbeca use of these com pl ai nt s, G M began t o al l ocat e f ew eraut om ob i l es t o S erra an d m o re au t o m o b i l es t o E d w ard s C h ev ro l eti n a d i scri m i n at o ry fash i o n . A s a r e s u lt o f th e a lle g e d d is c r im in a to r y a llo c a tio n , E d w a r d s C h e v r o le t in c r e a s e d its sal es, w h i l e S erra l o stsal es.4 B . T he State C our tL i t i gat i on O n A pr i l 6, 1998, S e rr af i l e d ac om pl a i nti n s t a t e c our ta ga i ns tL e on E dw a r ds , E dw a r ds C he vr ol e t , N A D A , a nd s e ve r a l r e pr e s e nt a t i ve s of G M . T he co m p l ai n tal l eg ed th atth e d efen d an t s h ad v i o l at ed th e M o t o r V eh i cl e F ran ch i se A c t ( M V F A ) u n d e rA lab a m ala w . S e e S e rr aC h e v r o le t, I n c . v . E d w a r d s C h e v r o le t, I n c ., 8 5 0 S o .2 d 2 5 9 , 2 6 1 ( A la . 2 0 0 2 ) . S e rr ac o n te n d e d th a t th e d e fe n d a n ts conspi re d t o i nt er fe re w i th the re l ati on shi p b et w ee n S erraand G M and t o res tri ct u n l a wf u l l y th e a l l o c a t i o n o f

v e h i c l e s t o S e rr a . S e e i d . On Oc t o b e r1 8 , 1 9 9 8 , GM f i l e d am ot i on t o i nt e r ve ne w i th both a n a ns w e rt o the c om pl a i nta nd a c o u n t e r c l a i m a g a i n s tS e rr afo rad e c l a r a t o r y j u d g m e n t , s e e i d . a t2 6 2 , th a tGM c oul d l e ga l l y t e r m i na t e the s a t e l l i t e a gr e e m e ntbe t w e e n G M a nd S e rr a . A f t e rthe tr i a l c o u r tg r a n t e d th e m o t i o n t o i n t e r v e n e , S e rr aa m e n d e d i t s c o m p l a i n tt o a d d GM a s ad e fe n d a n t, a n d a lle g e d , a m o n g o th e rth in g s , m is a llo c a tio n o f v e h ic le s in v io la tio n o f

th e M V F A . S e e id . G M ul t i m a t e l y pr e va i l e d on both the c om pl a i ntby S e rr aa nd the c o u n t e r c l a i m . Wi th r e g a r d t o th e c o u n t e r c l a i m , th e tr i a l c o u r tc o n c l u d e d th a tGM c o u l d l a w f

u l l y t e r mi n a t e th e s a t e l l i t e a g r e e me n t . Th e Su p r e me Co u r to f A l a b a ma af fi rm ed thatdeci si on w i tho utop i ni on . A s for the com pl ai ntfi l ed by S erra , a l though the j ur y r e tur ne d ave r di c ti n fa vorof S e rr aon i t s m i s a l l oc a t i on c l a i m , the5

S upr e m e C our tof

A l a ba m ar e ve r s e d a nd he l d tha tthe c l a i m w a s ba rr e d by the s ta tu te o f lim ita tio n s . I d . C . T he F e de ralL i t i gat i on O n S e p te m b e r1 2 , 2 0 0 1 , G M te r m in a te d th e s a te llite a g r e e m e n t w ith S e rr a . O n O ct ob er23 , 20 01 , S errafi l ed the i nst antcom pl ai ntagai nstG M and o ther defe nd ant s a nd al l eged thatG M vi ol at ed the A ut om ob i l e D ea l erD ay i n C ou rtA ct ( A D D C A ) w h e n it te r m in a te d th e s a te llite a g r e e m e n t. B oth the i ni t i al and a l at er am ended com pl ai ntal l eged thatthe t er m i nat i on w as i n res po nse t o the st at e c ou rt l i t i g at i o n an d t o d em an d s b y S erra’s com p et i t o r, E d w ard s C h ev ro l et . A d d i t i o n al l y, S erraal l eged thatG M engaged i n a di sc ri m i nat ory c ou rs e of c on du ctthatfa vo re d E d w a r d s C h e v r o le t a n d m is a llo c a te d v e h ic le s f r o m S e rr ato E d w a r d s C h e v r o le t. T h e c o m p l a i n twa s o r i g i n a l l y a s s i g n e d t o J u d g e S h a r o n L o v e l a c e B l a c k b u r n . GM m ove d t o di s m i s s the c om pl a i nton s e ve r a l gr ounds i nc l udi ng r e s j udi c a t aa nd c ol l a t e r a l e s t oppe l . G M a r gue d tha tthe A l a ba m ac our t s ha d r ul e d tha tG M ha d the r i ghtt o t e r m i na t e the S a t e l l i t e A gr e e m e nt . T he di s tr i c tc our tde ni e d the m ot i on. G M m ove d t o r e c ons i de ror , i n the a l t e r na t i ve , t o c e r t i f y the l e ga l que s t i on for i nt e r l oc ut or y a ppe a l , butthe di s tr i c tc our tde ni e d the m ot i on w i thoutopi ni on. O n O ct ob er17 , 20 03 , the ca se w as re as si gn ed t o Jud ge R . D avi d P roct or. O n A pr i l 12, 2004, S e rr af i l e d athi r d a m e nde d c om pl a i nta nd a dde d ac ountfor6

w rong ful al l ocati on i n v i ol ati on of the M V F A un der A l abam a l aw . S erraal l eged th a tGM wr o n g f

u l l y m i s a l l o c a t e d v e h i c l e s i n fa v o ro f E d war d s C h e v r o l e t . GM m ov ed t o d i sm i ss thi s c l ai m base d i n p ar ton the precl usi ve ef fe ctof the earl i er s ta te c o u r t ju d g m e n t. S e rr ar e s p o n d e d th a t its a llo c a tio n c la im w a s lim ite d to w r ongf ul a l l oc a t i ons m a de a f

t e rthe s t a t e c our tl i t i ga t i on, ora f t e rA pr i l 16, 2001, w he n the j udgm e ntw a s e nt e r e d i n s t a t e c our t . W hi l e thi s m ot i on w a s pe ndi ng, on J u n e 2 8 , 2 0 0 4 , th e c a s e w a s r e a s s ig n e d to J u d g e V ir g in iaE . H o p k in s . O n F eb ru ary 1 6 , 2 0 0 5 , th e d i stri ctco u rtd en i ed th e m o t i o n t o d i sm i ss, w i thoutpr e

j udi c e t o the r i ghtof

G M t o r a i s e i t s de fe ns e s of i s s ue pr e c l us i on i n a la te rm o tio n fo rs u m m a r y ju d g m e n t. A f te rth is d e n ia l, G M f

ile d a n a n s w e rto a ll thr e e c om pl a i nt s . T he a ns w e ri nc l ude d 31 a f f i r m a t i ve de fe ns e s , i nc l udi ng the fol l ow i ng thr e e de fe ns e s , r e l e va ntt o thi s a ppe a l , w hi c h a r e ba s e d on the pr e c l us i ve e f fe c t o f th e e a r lie rlitig a tio n in s ta te c o u r t: FI R ST D EFEN SE [ : ] P l a i nt i f f ’ s c l a i m s a r e ba rr e d by the doc tr i ne s of r e s j udi c a t a/ c l a i m pr e c l us i on a nd/ orc ol l a t e r a l e s t oppe l/i s s ue p r e c l u s i o n . Fa i l u r e b y th e c o u r tt o d i s mi s s th e p l a i n t i f f ’ s c l a i ms v io la te s th e U n ite d S ta te s C o n s titu tio n in th a t av a lid e n fo r c e a b le s ta te courtj ud gm entprec l ud es the pl ai nt i ff ’ s c l ai m s i n thi s a cti on . F ai l ure t o gi ve tha tj udgm e ntpr e c l us i ve e f fe c tvi ol a t e s the F ul l F a i th a nd C r e di tC l a us e of

the U ni t e d S t a t e s C ons t i tut i on.

. . . EI G H TH D EFEN SE [ :] P la in tif f ’s c la im s in th is a c tio n a r e b a rr e d , in w ho l e or i n p ar t , by the l aw of the ca se do ctri ne.

. . .7

TEN TH D EFEN SE [ : ] T he c l a i m s i n thi s a c t i on a r e ba rr e d unde rthe d o ctri n es o f j u d i ci al est o p p el an d / o r i n co n si st en tp o si t i o n s.

1. T he D i sc ov er y D i sput es O n January 9, 20 04 , S erraand G M subm i tt ed a r eportt o the di stri ctcourt tha tpr opos e d s c he dul i ng de a dl i ne s a nd apl a n r e ga r di ng the s c ope a nd m a nne rof d i sco v ery. W i th resp ectt o th e sco p e o f d i sco v ery, th e p art i es d i sag reed sh arp l y. O n January 28 , 20 04 , the di stri ctcourtordere d d i sc ov er y t o p roce ed on the t op i cs pr opos e d by S e rr a , i nc l udi ng “ G M ’ s m i s a l l oc a t i on of ve hi c l e s s i nc e 2001” a nd the

“ course of deal i ng s bet w ee n S erraand G M . ” A l tho ug h the courtordered di sc ov er y on thos e t opi c s , i ta l l ow e d G M t o obj e c tt o the e xt e nttha tS e rr aope r a t e d “ out s i de o f th e b o u n d s o f

p e r m is s ib le d is c o v e r y a s o u tlin e d b y th e F e d e r a l R u le s o f C iv il P r oc e dur e a nd the c a s e l a w unde rthe A D D C A ” a nd t o s e e k the a s s i s t a nc e of the courti f di sput es ar ose. O n F e br ua r y 23, 2004, S e rr as e r ve d G M w i th i t s f i r s ti nt e rr oga t or i e s a nd r e que s t s forpr oduc t i on, w hi c h pr oduc e d t w o di s put e s r e l e va ntt o thi s a ppe a l . T he fi rs tdi sput e i nv ol ved the fol l ow i ng re qu es t s for do cum ent s r egar di ng C hevrol et sat el l i t e d eal ersh i p s: 2 . A n y and a l l doc um e nt s , i n ha r d c opy ore l e c tr oni c for m a t , r e ga r di ng G e n e r a l M o to r s ’ S a te llite P r o g r a m , in c lu d in g b u t n o t lim ite d to its i m p l em ent ati on , w hen i tw as fi rs tm ade a vai l abl e t o the C hevrol et8

de a l e r s body , the purpos e of the progr a m , the pa r a m e t e r s of the p r o g r a m , a n d th e n a m e , a d d r e s s , a n d t e l e p h o n e n u m b e ro f th e GM o f f ic ia ls w h o w e r e r e s p o n s ib le fo r th e im p le m e n ta tio n a n d o v e r a ll o v e r s ig h t o f

th e p r o g r a m to d a te . 3 . A c o m p l e t e lis t o f

a n y a n d a ll C h e v r o le t d e a le r s w h o p a r tic ip a te d in and/ or w er e a w ar ded sat el l i t e fac i l i t ies u n d erthe sa m e or s i m i l ar te rm s as th e t erm s o f th e sat el l i t e faci l i ty aw ard ed S erra C h ev r o le t, a nd the s t a tus of

e a c h of the s e s a t e l l i t e fa c i l i t i e s ( i . e. o p en , f ul l poi nt o rte r m in a tio n , e tc .) . 4. A ny and al l stud i es , survey s, re po rt s, or other docum ent s i n h ar d copy or el ec troni c form at , re l ati ng or re fe re nci ng th e s at el l i t e program a s im p le m e n te d b y G M . T he se cond di sput e i nv ol ved the re qu es tfor a l l ocati on dat a for al l C hevrol et d e a le r s in th e B ir m in g h a m a r e af r o m 1 9 9 8 fo r w a r d . O n M ay 1 7 , 2 0 0 4 , G M o bj ect ed t o th e d i sco v ery req u est s. A s to th e r e q u e s ts for produ cti on re gardi ng the sa t el l i t e i nform ati on , G M obj ec t ed t o the re qu es t s a s “o v e r ly b r o a d , u n d u ly b u r d e n s o m e , u n lim ite d in tim e a n d s c o p e , irr e le v a n t, i m m a t e r i a l , a nd notr e a s ona bl y c a l c ul a t e d t o l e a d t o the di s c ove r y of r e l e va ntor adm i ss i bl e e vi dence. ” G M r e fe rr e d S e rr ato th e d o c u m e n ts p r o d u c e d in th e s ta te c our tl i t i ga t i on. A s t o the r e que s tr e ga r di ng the a l l oc a t i on da t a , G M obj e c t e d t o the re qu es tas “ ov er l y broad, un du l y burdensom e, un l i m i t ed i n t i m e a nd sc op e, i rr e l e va nt , i m m a t e r i a l , a nd notr e a s ona bl y c a l c ul a t e d t o l e a d t o the di s c ove r y of r e le v a n t o ra d m is s ib le e v id e n c e ” a n d d id n o t p r o d u c e a n y r e s p o n s iv e d o c u m e n ts .

2. T he F i rs tM ot i on t o C om pel D i sc ov ery9

On J u n e 2 3 , 2 0 0 4 , S e rr af i l e d i t s f i r s tm o t i o n t o c o m p e l d i s c o v e r y . On A u g u s t 2 7 , 2 0 0 4 , th e d is tr ic t c o u r t h e ld ah e a r in g o n th e m o tio n . A s to th e r e q u e s ts for produ cti on re gardi ng the sa t el l i t e dea l er shi ps, the courtordered G M t o p rodu ce a l l doc um e nt s “ [ c ] r e a t i ng, e vi de nc i ng, t e r m i na t i ng, i m pl e m e nt i ng, [ a nd] c ont i nui ng” the s a t e l l i t e pr ogr a m . T he c our ts tr e s s e d tha t“ [ i ] f i tha s t o do w i th the sa t el l i t e program , and i t ’ s ado cum ent , then you need t o p rodu ce i t . ” G M i nform ed the courtthatt o acc om pl i sh thi s t as k, i tw ou l d h ave “ t o l oo k throu gh , t o sort throu gh al l se ven tho usand d ea l er s a cr oss the coun try ” or “ cont ac t [] the hu nd re d a nd f i f ty ors o z one m a na ge r s a c r os s the c ountr y a nd a s k[ ] the m t o do i t . ” T he c o u r t r e s p o n d e d ,“I s u g g e s t y o u c o n ta c t y o u rh u n d r e d a n d f if ty z o n e m a n a g e r s ,” and “ then you prod uce the do cum ent s . . . thatre l at e t o the sa t el l i t e. ” T he court g a v e G M 6 0 d a y s to p r o d u c e th e r e q u e s te d d o c u m e n ts . A s t o the re qu es tfor produ cti on re gardi ng al l ocati on dat a for al l C hevrol et d eal ers i n th e B i rm i n g h am area fro m 1 9 9 8 fo rw ard , th e co u rtl i m i t ed th e req u est fr om 20 01 forw ar d, consi st entw i th the Ja nu ar y 28, 20 04 , order. W hen the court as ked w hy G M had n otprod uced thi s dat a, G M expl ai ned thatun der A l abam a l aw th e d o c u m e n ts w e r e c o n f id e n tia l a n d G M c o u ld n o t le g a lly p r o d u c e th e d o c u m e n ts w i tho utei ther the consentof the other deal er s or acourtorder. T he courtthen or de r e d G M t o pr oduc e the doc um e nt s w i thi n 60 da y s . O n A ugus t30, 2004, the10

d is tr ic t c o u r t e n te r e d aw r itte n o r d e rg r a n tin g th e m o tio n to c o m p e l d is c o v e r y in a c c o r d a n c e w ith th e te r m s d e s c r ib e d in th e h e a r in g . S ix ty d a y s a f

te rth e h e a r in g , o n O c to b e r2 7 , 2 0 0 4 , G M f ile d am o tio n to r e c o n s id e rr e g ar d in g th e a llo c a tio n d a taa n d a r g u e d th a t th e r e w a s n o fa c tu a l b a s is forthe c l a i m . T ha ts a m e da y , G M pr oduc e d m onthl y a l l oc a t i on da t a , w hi c h a r e the m on thl y det er m i nat i on of the nu m ber a nd type of vehi cl es ea ch deal erearned (“ F i l e A ” dat a) . A l tho ug h G M prod uced the dat a, G M as ked S erra“ no tt o p rodu ce or di sc l ose i tt o anyon e, i ncl ud i ng the pl ai nt i ff, expert s/consul t ant s a nd thi rd parti es , un t i l the C ou rtorders thatsa i d p rodu cti on and d i sc l osure i s app ropri at e. ” T he di s tr i c tc our tde ni e d the m ot i on t o r e c ons i de ron N ove m be r14, 2004, w i thout e x p la n a tio n . B ec ause G M re t ai ned F i l e A do cum ent s for on l y 36 m on ths i n the no rm al course of bu si ness , i tprod uced the m on thl y a l l ocati on dat a for al l B i rm i ng ham de a l e r s f r om J une 1, 2001, for w a r d. B a s e d on al i t i ga t i on e xc e pt i on t o i t s r e t e nt i on pol i c y , G M ha d r e t a i ne d the m onthl y a l l oc a t i on doc um e nt s forS e rr aa nd E dw a r ds C h e v r o le t f

r o m J a n u a r y 1 , 2 0 0 1 , fo r w a r d a n d p r o d u c e d a ll th o s e d o c u m e n ts . O n O c t obe r29, 2004, c ouns e l forS e rr ar e s ponde d by l e tt e rt o c ouns e l for G M r e g a r d in g th e d o c u m e n ts p r o d u c e d . C o u n s e l fo rS e rr as ta te d th a t G M fa ile d to prod uce w ee kl y a l l ocati on dat a, w hi ch ar e dat a r egar di ng the w ee kl y proce ss used11

t o de t e r m i ne how the c om m i tt e d vol um e of ve hi c l e s a r e de l i ve r e d a nd r e c e i ve d by the de a l e r s hi p ( “ F i l e B ” da t a ) . C ouns e l forS e rr ar e que s t e d the i nfor m a t i on im m e d ia te ly . O n O c t obe r29, 2004, G M pr oduc e d al i s tof 23 de a l e r s hi ps a c r os s the c ountr y tha tha d a c t i ve s a t e l l i t e a gr e e m e nt s . T hi s l i s tw a s c om pi l e d thr ough a se ar ch of a com pu t erdat abas e thatst ored i nform ati on re l ati ve t o al l C hevrol et deal er s nati on w i de. A f

t e rS e rr aa dvi s e d G M tha tthe pr oduc t i on di d noti nc l ude te r m in a te d s a te llite a g r e e m e n ts , o n N o v e m b e r1 1 , 2 0 0 4 , G M s u p p le m e n te d its r e s p o n s e w ith a n a d d itio n a l lis t o f 1 2 d e a le r s h ip s th a t h a d te r m in a te d s a te llite a g r e e m e n ts . 3. F i r s ta nd S e c ond M ot i ons forS a nc t i ons O n N ov em ber 15, 20 04 , S errafi l ed i t s f i rs tm ot i on for s ancti on s. S erra a r gue d tha tthe r e s pons e s pr ovi de d by G M w e r e de f i c i e ntr e ga r di ng both the al l o cat i o n d at a an d th e sat el l i t e ag reem en t s. S erra ask ed fo r m o n et ary san ct i o n s, a tt or ne y s fe e s , or , i n the a l t e r na t i ve , ade fa ul tj udgm e nt . O n D e c e m be r2, 2004, S e rr aw ith d r e w its m o tio n fo rs a n c tio n s b e c a u s e th e p a r tie s w e r e a tte m p tin g to re sol ve the di sput e. O n J a n u a r y 2 7 , 2 0 0 5 , S e rr ar e n e w e d its m o tio n fo rs a n c tio n s . S e rr aa g a in a r gue d tha tG M pr ovi de d i nc om pl e t e a l l oc a t i on da t aa nd i nfor m a t i on a boutthe12

s a t e l l i t e de a l e r s hi ps . O n F e br ua r y 3, 2005, the di s tr i c tc our the l d ahe a r i ng by t e l e phone on the r e ne w e d m ot i on fors a nc t i ons . T he c our tf i r s ta ddr e s s e d the m ot i on re gardi ng the al l ocati on dat a. B ec ause of up com i ng depo si t i on s, the court de e m e d thi s i s s ue pr e m a tur e a nd de ni e d the m ot i on i n tha tr e ga r d. T he c our tne xt a ddr e s s e d the s a t e l l i t e de a l e r s hi p i nfor m a t i on. T he c our tdi s a gr e e d w i th the a r gum e ntof G M tha tthe A ugus t27, 2004, order r equi re d G M t o p rodu ce on l y al i stof sa t el l i t e dea l er s. T he courtre i t er at ed th a t it h a d o r d e r e d G M to p r o d u c e a n y d o c u m e n t th a t “h a s to d o w ith th e s a te llite prog ra m ” a nd foun d thatG M vi ol at ed i t s orderi n thatre gard. T hen, the court a g a in o r d e r e d G M to p r o d u c e a ll d o c u m e n ts r e la tin g to s a te llite d e a le r s h ip s w ith in 1 4 d a y s . T h e c o u r t f

u r th e rs ta te d th a t “s ta r tin g o n th e 1 5 th d a y , if [ G M is ] n o t in ful l com pl i ance w i th m y order , I a m go i ng t o fi ne your cl i ent$5 0, 00 0 a day. If y o u a r e n o t [ in ] f

u ll c o m p lia n c e a f

te r1 4 d a y s , I a m g o in g to s ta r t s a n c tio n in g a s to your deci si on i n the ca se . ” T he courtdi d n otprov i de a r ati on al e a s t o ei ther p o te n tia l s a n c tio n . O n F e br ua r y 7, 2005, the di s tr i c tc our te nt e r e d aw r i tt e n or de r , c ons i s t e nt w i th the r ul i ngs s t a t e d dur i ng the t e l e phone he a r i ng. T he c our tgr a nt e d i n pa r ta nd de ni e d i n pa r tthe m ot i on fors a nc t i ons . T he di s tr i c tc our tde ni e d a s pr e m a tur e the m ot i on fors a nc t i ons r e ga r di ng the a l l oc a t i on da t a . A s forthe i nfor m a t i on a bout13

th e s atelli te ag re em en ts, th e d istrict co u rt fo u n d “th at G M v io lated th is C o u rt’s O r de rc om pe l l i ng pr oduc t i on, e nt e r e d A ugus t28, 2004 [ s i c ] , by fa i l i ng t o pr ovi de d o c u m e n ts in its p o s s e s s io n a n d c o n tr o l r e la tin g to s p e c if ic s a te llite d e a le r s h ip s .” T he di s tr i c tc our tdi r e c t e d G M “ t o pur ge i t s nonc om pl i a nc e by pr ovi di ng, by the e n d o f b u s in e s s o n T h u r s d a y , F e b r u a r y 1 7 , 2 0 0 5 , a ll d o c u m e n ts r e s p o n s iv e to [ S e rr a ]’s r e q u e s ts .” T h e d is tr ic t c o u r t w a r n e d th a t “fa ilu r e to c o m p ly f u lly w ith its pr oduc t i on obl i ga t i ons a nd thi s C our t ’ s or de r s w i l l r e s ul ti n the i m pos i t i on of s a n c t i o n s a g a i n s tGe n e r a l Mo t o r s i n th e a m o u n to f $ 5 0 , 0 0 0 fo re v e r y d a y th a tGM re m ai ns ou tof com pl i ance . If G M re m ai ns ou tof com pl i ance there af t er , the C ou rt w i l l begi n stri ki ng G M ’ s def ense s. ” A s i n the t el epho ne confere nce, the di stri ct co u rtd i d n o tp ro v i d e an y rat i o n al e fo r th e th reat en ed san ct i o n s. O n F ebruary 17 , 20 05 , G M fi l ed a not i ce of com pl i ance w i th the di stri ct c our t . G M r e pr e s e nt e d tha ti tha d pr oduc e d ac opy of the c urr e ntfor m of a g r e e m e n t b e tw e e n G M a n d G M d e a le r s w ith r e s p e c t to a p p r o v e d s a te llite l o cat i o n s an d a cu rren tan d ex p i red v ersi o n o f a m an u al th ato u t l i n ed th e p ro cess for app roval of sa t el l i t e l ocati on s. G M al so i nform ed the di stri ctcourtthati thad perform ed t w o searc hes of i t s s at el l i t e dea l er shi p agreements : fi rs t , G M had s e a r c he d the de a l e rc ontr a c tf i l e s of the de a l e r s hi ps tha ti tha d i de nt i f i e d i n the pr e vi ous c om put e rs e a r c h a nd pr oduc e d the s a t e l l i t e a gr e e m e nt s a nd14

c o rr e s p o n d e n c e r e la te d to th e s e 3 5 lo c a tio n s ; a n d s e c o n d , G M h a d a s k e d f ie ld p e r s o n n e l a c r o s s th e n a tio n to id e n tif y c u rr e n t a n d fo r m e rC h e v r o le t s a te llite deal er shi ps and t o l ocat e a ny do cum ent s m ai nt ai ned b y the re gi on al offi ce s r e g a r d in g th o s e lo c a tio n s . T hese se ar ches prod uced three sa t el l i t e dea l er shi ps that ha d notbe e n i de nt i f

i e d i n the e a r l i e rc om put e rs e a r c h. G M pr oduc e d the na m e s of the s e de a l e r s hi ps , a l ong w i th a l l s uppor t i ng doc um e nt a t i on. A ft erthi s produ cti on , S erracont i nu ed t o al l ege thatG M had n otdi sc l osed i nfor m a t i on a bouta l l s a t e l l i t e de a l e r s hi ps be c a us e de pos i t i ons a nd othe rt e s t i m ony o f G M o f f ic ia ls r e fe rr e d to s e v e r a l s a te llite d e a le r s h ip s th a t G M h a d n o t id e n tif ie d . T hr oughoutF e br uar y a nd the be gi nni ng of M a r c h, S e rr aa dvi s e d G M thr ough w r i tt e n c orr e s ponde nc e tha tG M ha d fa i l e d t o pr oduc e i nfor m a t i on a bouta l l the sa t el l i t e dea l er shi ps. In thatcorr es po nd ence , S erragave exam pl es of t es t i m on i es of se vera l em pl oyee s of G M w ho had t es t i fi ed abou tsa t el l i t e dea l er shi ps thathad n o t b e e n d is c lo s e d .

4 . T h i rd M o t i o n fo r S an ct i o n s an d O rd er t o S h o w C au se On Ap r i l 1 , 2 0 0 5 , S e rr af i l e d ath i r d m o t i o n fo rs a n c t i o n s th a ta l l e g e d GM fa ile d to p r o d u c e e ith e rc o m p le te s a te llite d e a le r s h ip in fo r m a tio n o ra llo c a tio n d a ta for a l l B i rm i ng ham -are a C hevrol etdeal er shi ps. O n M ay 9, 20 05 , the courti ss ued15

an order t o sho w ca use thatdi re ct ed G M t o exp l ai n w hy i tshou l d n otbe sa nct i on ed forfa i l ur e t o c om pl y w i th the or de r s e nt e r e d A ugus t30, 2004, a nd F e br ua r y 7, 2005, r e ga r di ng s a t e l l i t e i nfor m a t i on a nd a l l oc a t i on da t a . T he or de rs e tahe a r i ng fo rM a y 1 6 , 2 0 0 5 , a n d in s tr u c te d G M to p r e s e n t te s tim o n y f r o m a n y w itn e s s w ith p e r s o n a l k n o w l e d g e r e g a r d i n g th e s a t e l l i t e p r o g r a m. I n r e s p o n s e t o th e o r d e rt o s h o w c a u s e , o n Ma y 1 2 a n d 1 3 , 2 0 0 5 , GM c onduc t e d am a nua l r e vi e w of the doc um e nt s i n the 4100 c ontr a c tf i l e s of C h e v r o le t d e a le r s . G M h ir e d 1 4 p a r a le g a ls to s e a r c h th e d o c u m e n ts c o n ta in e d in ea ch fi l e m anual l y t o asc er t ai n w hether the deal erhad a sa t el l i t e dea l er shi p thathad been m i ss ed i n the t w o ear l i erse ar ches . T he se ar ch yi el ded n i ne addi t i on al s a te llite d e a le r s h ip s , a n d G M p r o d u c e d th o s e d o c u m e n ts to S e rr a . O n M a y 16, 2005, the di s tr i c tc our the l d ahe a r i ng on the or de rt o s how cau se. A ft er so m e d i scu ssi o n b et w een th e co u rtan d co u n sel fo r b o th p art i es, Wi l l i a m Mi d d l e k a u f

f , G e n e r a l D i r e c t o ro f

th e D e a l e rC o n tr a c tu a l G r o u p o f G M, te s tif ie d . A m o n g o th e rth in g s , M id d le k a u f f te s tif ie d r e g a r d in g th e s a te llite i nfor m a t i on a nd the s e a r c he s pe r for m e d by G M t o obt a i n a nd pr oduc e the in fo r m a tio n to S e rr a . O n M a y 2 0 , 2 0 0 5 , th e d is tr ic t c o u r t e n te r e d a n o r d e rth a t fo u n d G M in c ont e m pt , f

i ne d G M $700, 000, a nd s tr uc k the a f f i r m a t i ve de fe ns e s r e ga r di ng the16

pr e c l us i ve e f

fe c tof the s t a t e j udgm e nt . T he c our ta ddr e s s e d t w o i s s ue s i n the s a nc t i on or de r . A f

t e rbr i e f l y r e c i t i ng the hi s t or y of the di s c ove r y di s put e s a nd courtac t i on , the courtfi rs taddres se d the sa t el l i t e i nform ati on . T he courtre coun t ed tha tthi s i nfor m a t i on w a s or de r e d t o be pr oduc e d by O c t obe r27, 2004, a nd tha t , on F e br ua r y 3, 2005, the c our t“ ve rba l l y he l d G M i n c ont e m pt ” fornotpr oduc i ng the s e doc um e nt s a nd or de r e d G M t o pur ge i t s e l f of the c ont e m ptby F e br ua r y 17, 2005. T he c our tfoc us e d on the t e s t i m ony of M i ddl e ka uf

f a nd found the fol l ow i ng: ( 1 ) M id d le k a u f

f d id n o t d is p u te th a t G M h a d n o t s e a r c h e d fo rth is in fo r m a tio n u n til e a r ly N o v e m b e r2 0 0 4 ; ( 2 ) o n F e b r u a r y 1 1 , 2 0 0 5 , M id d le k a u f f s e n t a n e - m a il to re gi on al m anagers re qu es t i ng sa t el l i t e i nform ati on , and h e l earned thatthree sa t el l i t e dea l er shi p h ad no tbeen di sc l osed; (3) before thi s e -m ai l , the se ar ch had b e e n lim ite d to ac o m p u te rs e a r c h ; ( 4 ) G M d id n o t p e r fo r m am a n u a l s e a r c h o f its f ile s u n til M a y 1 2 a n d 1 3 , 2 0 0 5 , a n d th is s e a r c h id e n tif ie d n in e a d d itio n a l s a te llite deal er shi ps; and (5) the deal er shi p fi l e produ ce d t o S erraon the V aden, G eorgi a, lo c a tio n la c k e d d o c u m e n ts th a t s h o u ld b e in e v e r y s a te llite f ile . S e c ond, the c our ta ddr e s s e d the a l l oc a t i on da t a . T he c our tfound tha tthe fa i l ur e of G M t o r e t a i n F i l e B , orw e e kl y a l l oc a t i on, da t abe for e N ove m be r7, 2001, th e d a t e o n wh i c h GM f i r s tb e g a n r e t a i n i n g s u c h d a t a , wa s n o td i s c o v e r y a b u s e . As t o the F i l e A , or m on thl y a l l ocati on , dat a, the courtst at ed thatthe di sc ov er y order17

da t e d J a nua r y 28, 2004, w hi c h l i s t e d a s a n a r e aof di s c ove r y “ G M ’ s a l l oc a t i on of v e h ic le s s in c e 2 0 0 1 ,” r e q u ir e d G M to p r o d u c e v e h ic le a llo c a tio n d a taf r o m a ll B i r m i n g h a m d e a l e r s , a n d n o to n l y E d war d s C h e v r o l e t , a s a r g u e d b y GM. GM ret ai n ed an d p ro d u ced al l F i l e A d at a fo r S erra an d E d w ard s C h ev ro l et , b u tb ecau se of i t s pol i c y on doc um e ntr e t e nt i on, G M r e t a i ne d a nd pr oduc e d the F i l e A da t afor the othe rB i r m i ngha m de a l e r s f r om J une 2001 for w a r d. T he c our tfound tha t“ a ny de s tr uc t i on of

F i l e A da t aforthe pe r i od e a r l i e rtha n 36 m onths pr i ort o [ the Ja nu ar y 28, 20 04 ] O rderw as a vi ol ati on of such O rder . ” T he courtconcl ud ed “ that G M ha s m a de apr a c t i c e thr oughoutthi s a c t i on of unr e a s ona bl y na rr ow i nt erpret ati on s of di sc ov er y r equest s a nd courtO rder s. ” T he di s tr i c tc our tfound tha t“ G M ha s e nga ge d i n apa tt e r n of di s r e ga r di ng di s c ove r y obl i ga t i ons , notr e s pondi ng t o di s c ove r y r e que s t s unt i l or de r e d t o do s o, a n d e v e n th e n to ta lly d is r e g a r d in g th is c o u r t’s d e a d lin e s fo rc o m p ly in g w ith its O r de r s . ” T he c our thi ghl i ght e d the fa c ttha t“ G M kne w tha ti tha d notpe r for m e d a m a n u a l s e a r c h o f

its [ d e a le r ] f

ile s ,” b u t “c h o s e to r e ly o n its c o m p u te rs e a r c h u n til s ix ( 6 ) d a y s b e fo r e th e e n d o f th e p e r io d a llo w e d G M to p u r g e its e lf o f c o n te m p t, before s endi ng an e- m ai l t o regi on al m anagers . ” T he courtal so st at ed that“ [e ] ven af t erthe re spon se s t o the e- m ai l es t abl i shed thatthe com pu t erse ar ch w as i nc om pl e t e , G M de l a y e d a ppr oxi m a t e l y one ( 1) m onth be for e i tunde r t ook the18

m a nua l s e a r c h. ” F i na l l y , the c our tr e a s one d tha t“ M i ddl e ka uf f ’ s t e s t i m ony tha tthe V ad en , G eo rg i a d eal ersh i p fi l e l ack ed d o cu m en t s th at‘ w o u l d b e’ i n ‘ ev ery’ s a t e l l i t e de a l e r s hi p f

i l e , c a l l s i nt o que s t i on the c om pl e t e ne s s of G M ’ s pr oduc t i on even atthi s l at e dat e. ” T he c our tc onc l ude d tha tG M di d notpur ge i t s e l f of c ont e m ptunt i l M a y 16, 20 05 , the dat e on w hi ch the l at es tsa t el l i t e i nform ati on w as prod uced. T he court c a l c ul a t e d tha t , unde rthe or i gi na l c ont e m ptor de r , G M w a s s ubj e c tt o s a nc t i ons of $4 , 90 0, 00 0 for the 98 days of cont em pt . W i tho utexpl anati on , the courtthen l i m i t e d the m one t a r y s a nc t i ons t o $700, 000, the e qui va l e ntof four t e e n da y s of c o n te m p t. A d d itio n a lly , th e c o u r t s ta te d th a t “in lie u o f m o n e ta r y s a n c tio n s , it is m or e a ppr opr i a t e t o i m pos e non- m one t a r y s a nc t i ons . ” A ga i n, w i thoute xpl a na t i on, the c our ts tr uc k the a f

f i r m a t i ve de fe ns e s of

r e s j udi c a t a , c ol l a t e r a l e s t oppe l , a nd othe rr e l a t e d doc tr i ne s of i s s ue pr e c l us i on. T he or de ra l s o s t a t e d tha t“ G M w i l l not be perm i tt ed t o chal l enge any as pectof S erra ’ s e xp er t ’ s r eport. . . t o the ext entthat s u c h c h a lle n g e is b a s e d . . . o n s u c h e x p e r t’s la c ko f in fo r m a tio n r e g a r d in g s a te llite d e a le r s h ip s .” G M f i l e d a n i nt e r l oc ut or y a ppe a l tha tc ha l l e nge d the s a nc t i ons i m pos e d by th e d is tr ic t c o u r t. G M m o v e d to s ta y th e p r o c e e d in g s w h ile it a p p e a le d to th is C our t , butthe di s tr i c tc our tde ni e d the m ot i on a nd s t a t e d tha t“ [ t ] he S a nc t i ons19

O r d e ri s , u n fo r tu n a t e l y , mu n d a n e i n aw o r l d w h e r e d i s c o v e r y a b u s e h a s b e c o me co m m o n , an d refu sal t o co m p l y w i th d i sco v ery req u est s, o r ev en d i sco v ery O rd ers, of t e n a ppe a r s t o be at a c t i c a l de c i s i on m a de a f t e rac os t/be ne f

i ta na l y s i s by the l i t i gant s. ” T he di stri ctcourtconcl ud ed that“ [t ] he sa nct i on s i m po se d w er e nei ther h arsh n o r an ab u se o f d i scret i o n u n d er th e ci rcu m st an ces. In o th er w o rd s, th i s i s a garden vari ety di sc ov er y abu se ca se , and g ra nt i ng the M ot i on t o S t ay w ou l d p l ac e an i m pri m atur of i m po rt ance thatthe i ss ues, and fact s, do no tw arra nt . ” O n Jun e 28, 20 05 , G M depo si t ed $7 00 , 00 0 w i th the cl erk o f the di stri ct c our t , a nd the l i t i ga t i on c ont i nue d. I I . STA N D A R D O F R EVI EW

“ [ T ] he s t a nda r d of

r e vi e w fora n a ppe l l a t e c our ti n c ons i de r i ng a n a ppe a l of s a nc t i ons unde r[ R ] ul e 37 i s s ha rpl y l i m i t e d t o as e a r c h fora n a bus e of di s c r e t i on a nd ade t e r m i na t i on tha tthe f i ndi ngs of

the tr i a l c our ta r e f

ul l y s uppor t e d by the r e c o r d .” B a n k A tla n tic v . B ly th e E a s tm a n P a in W e b b e r , 1 2 F .3 d 1 0 4 5 , 1 0 4 8 ( 1 1 th C i r . 1994) ( quot i ng P e s a pl a s t i c C . A . v. C i nc i nna t i M i l a c r on C o. , 799 F . 2d 1510, 15 19 (11th C i r. 19 86 )) . “ A di stri ctcourtabuses i t s di sc re t i on w hen i tm i sc on strues its p r o p e rr o le , ig n o r e s o rm is u n d e r s ta n d s th e r e le v a n t e v id e n c e , a n d b a s e s its d e c i s i o n u p o n c o n s i d e r a t i o n s h a v i n g l i tt l e fa c tu a l s u p p o r t . ” A r l o o kv . S. L i c ht e nbe r g & C o. , 952 F . 2d 367, 374 ( 11th C i r . 1992) . W e r e vi e w de novo the20

a r g u m e n t th a t th e s a n c tio n s im p o s e d b y th e d is tr ic t c o u r t v io la te d d u e p r o c e s s . B ankA t l ant i c, 12 F . 3d at10 50 (11th C i r. 19 94 ). I I I . DI S CUS S I ON

“ Iti s bey on d p er adventure thatal l fe dera l court s have the po w er , by st atut e, by r ul e , a nd by c om m on l a w , t o i m pos e s a nc t i ons a ga i ns tr e c a l c i tr a ntl a w y e r s a nd parti es l i t i gant . ” C ar l ucci v. P i per A i rc ra ftC orp. , 77 5 F . 2d 14 40 , 14 46 (11th C i r. 19 85 ). U nd erF eder al R ul e of C i vi l P roce du re 37 , “ [i ] f aparty . . . fa i l s t o o bey a n or de rt o pr ovi de orpe r m i tdi s c ove r y . . . , the c our ti n w hi c h the a c t i on i s pe ndi ng m a y m a k e s u c h o r d e r s in r e g a r d to th e fa ilu r e a s a r e ju s t.” F e d . R . C iv . P . 3 7 ( b ) ( 2 ) . N o tw ith s ta n d in g th e c le a ra u th o r ity o f afe d e r a l c o u r t to e n fo r c e its o r d e r s , th is appeal pres ent s s er i ou s i ss ues abo utw hether the di sc ov er y order s of the di stri ct c o u r t w e r e v io la te d a n d , if s o , w h e th e rth e s a n c tio n s a g a in s t G M w e r e ju s t. O urdi s c us s i on i s di vi de d i nt o t w o pa r t s . W e f i r s ta ddr e s s w he the rthe d is tr ic t c o u r t ab u s e d its d is c r e tio n w h e n it fo u n d th a t G M h a d d is o b e y e d o r d e r s to p ro d u ce d o cu m en t s rel at i n g t o v eh i cl e al l o cat i o n an d sat el l i t e d eal ersh i p s. B ecau se th e d is tr ic t c o u r t d id n o t ab u s e its d is c r e tio n in f in d in g th a t G M v io la te d a n o r d e rto pr oduc e i nfor m a t i on a bouts a t e l l i t e de a l e r s hi ps , w e the n a ddr e s s w he the rthe s a n c tio n s e n te r e d a g a in s t G M v io la te d th e D u e P r o c e s s C la u s e .

A . Whe the rthe D i s t r i c tC our tA bus e d Its D i s c r e t i on

to Imp o se S a n ct i o n s?21

“ R ul e 37(b), F eder al R ul es of C i vi l P roce du re , prov i des thata di stri ctcourt m a y i m pos e s a nc t i ons forfa i l ur e t o c om pl y w i th di s c ove r y or de r s . ” I ns . C orp. of I r e l a nd v. C om pa gni e de s B a uxi t e s de G ui né e , 456 U . S . 694, 695, 102 S . C t . 2099, 21 00 (198 2); se e F ed. R . C i v. P . 37 (b). O ne of the sa nct i on s adi stri ctcourtm ay im p o s e u n d e rR u le 3 7 is “a n o r d e rtr e a tin g a s ac o n te m p t o f c o u r t th e fa ilu r e to obe y a ny or de r s . ” I d. T he c our tm a y a l s o “ pe na l i z e unc oope r a t i ve a tt or ne y s or p a r tie s litig a n t in d is c o v e r y p r o c e e d in g s b y r e q u ir in g th e p a y m e n t o f ‘r e a s o n a b le e xpe ns e s , i nc l udi ng a tt or ne y ’ s fe e s , c a us e d by the fa i l ur e . . . . ’ ” C a r l uc c i , 775 F . 2d at14 53 (quo t i ng F ed. R . C i v. P . 37 (b)) .

“ C ou rt s . . . have em brac ed an i nh er entcont em ptautho ri ty” that encom pass es the abi l i ty t o i m po se ci vi l and cri m i nal cont em pt . Int ’ l U ni on , U ni t ed M i ne W or ke r s of

A m . v. B a gw e l l , 512 U . S . 821, 831, 114 S . C t . 2552, 2559 ( 1994) . “ [ A ] c ont e m pts a nc t i on i s c ons i de r e d c i vi l i f i t‘ i s r e m e di a l , a nd forthe b e n e f it o f th e c o m p la in a n t. B u t if it is fo rc r im in a l c o n te m p t th e s e n te n c e is puni t i ve , t o vi ndi c a t e the a uthor i ty of the c our t . ’ ” I d. a t827- 28, 114 S . C t . a t2557 ( quot i ng G om pe r s v. B uc ks S t ove & R a nge C o. , 221 U . S . 418, 441, 31 S . C t . 492, 498 ( 1911) ) . C i vi l c ont e m pt“ m a y be i m pos e d i n a n or di na r y c i vi l pr oc e e di ng u p o n n o tic e a n d a n o p p o r tu n ity to b e h e a r d .” I d . A f in d in g o f afa ilu r e to c o m p ly w i th di s c ove r y or de r s i s af i ndi ng of c i vi l c ont e m pt . I d. a t833, 114 S . C t . a t2560.22

T h e d i s tr i c tc o u r tfo u n d GM i n c o n t e m p tfo rfa i l u r e t o p r o d u c e t wo ca t egori es of di sc ov er y. T he di stri ctcourtfoun d thatG M fa i l ed t o p rodu ce a llo c a tio n d a taf

r o m a ll B ir m in g h a m d e a le r s f r o m J a n u a r y 2 0 0 1 fo r w a r d in vi ol ati on of i t s order s on A ug ust27 , 20 04 , and F ebruary 3, 20 05 . T he di stri ctcourt a l s o fo u n d th a tG M fa i l e d t o p r o d u c e s a t e l l i t e i n fo r ma t i o n i n v i o l a t i o n o f th e s a me o r d e r s . W e f

ir s t a d d r e s s th e a llo c a tio n d a taa n d th e n a d d r e s s th e s a te llite i nfor m a t i on. 1 . A llo c a tio n D a ta T h e d is tr ic t c o u r t h e ld G M in c iv il c o n te m p t a n d s a n c tio n e d G M fo rits fa i l ur e t o obe y the or de rof the c our tt o pr oduc e “ F i l e A , ” orm onthl y a l l oc a t i on, da t af r om C he vr ol e tde a l e r s i n the B i r m i ngha m a r e a , e xc l udi ng S e rr aa nd E dw a r ds C hevrol et , fr om Ja nu ar y 1, 20 01 , un t i l June 1, 20 01 . G M ar gu es thatthe di stri ct courtabused i t s di sc re t i on beca use ( 1) the dat a i s noti m po rt antand G M w as j us t i f i e d fornotr e t a i ni ng the i nfor m a t i on, ( 2) the di s tr i c tc our tm a de a n i m por t a nt fa ctual error, and (3) the i ss ue i s r ea l l y one of spol i ati on , no tvi ol ati on of a d i s c o v e r y o r d e r . We a g r e e th a tth e d i s tr i c tc o u r ta b u s e d i t s d i s c r e t i o n fo rt wo reaso n s. F ir s t, th e f

in d in g o f th e d is tr ic t c o u r t th a t th e p r o d u c tio n w a s d e f ic ie n t b y s ix m onths i s not“ f

ul l y s uppor t e d by the r e c or d. ” B a nkA t l a nt i c , 12 F . 3d a t104823

( c ita tio n o m itte d ) . T h e d is tr ic t c o u r t ig n o r e d th e a d m is s io n b y S e rr ath a t lim ite d its m i sa l l ocati on cl ai m t o the peri od begi nn i ng A pri l 16 , 20 01 , w hen the st at e c ou rt litig a tio n b e tw e e n S e rr aa n d G M e n d e d . S e rr as t a t e d tha t“ G M ’ s a c t s a nd o mi s s i o n s a f

t e rth e s t a t e c o u r tl i t i g a t i o n a r e th e b a s i s fo ri t s mi s a l l o c a t i o n c l a i m” (e m ph as i s a dd ed). A l tho ug h the di stri ctcourt , i n i t s J anuary 28 , 20 04 , order, p e r m itte d d is c o v e r y o n th e m is a llo c a tio n o f v e h ic le s s in c e 2 0 0 1 , S e rr as p e c if ic a lly l i m i t ed i t s m i sa l l ocati on cl ai m i n an adm i ss i on on June 2, 20 04 , al m ostthree m onths be for e the A ugus t27, 2004, he a r i ng. T he a dm i s s i on r e nde r e d i rr e l e va nt a ny a l l oc a t i on da t af

r om J a nua r y 1, 2001, thr ough A pr i l 16, 2001. S e e F e d. R . C i v. P . 26 (b)( 1). T he prod uct i on by G M , there fore , w as defi ci entby si x w ee ks of dat a, n o t s ix m o n th s . S ec on d, the di stri ctcourtm i squo t ed the Ja nu ar y 28, 20 04 , order that p e r m itte d d is c o v e r y o n c e r ta in o u tlin e d to p ic s . T h e s a n c tio n o r d e rin c o rr e c tly st at ed thatthe courtordered di sc ov er y on “ G M ’ s a l l ocati on of vehi cl es si nce 2 0 0 1 ,” w h en , i n fa ct, th e J an u ar y 2 8 , 2 0 0 4 , o rd erp er m itted d isco v er y o n “G M ’s m i s a l l oc a t i on of

ve hi c l e s s i nc e 2001. ” T he di s t i nc t i on be t w e e n “ a l l oc a t i on” a nd

“ m i sa l l ocati on ” i s m at er i al beca use the m i sa l l ocati on cl ai m re l at ed t o an al l eged fa v o r itis m s o le ly to w a r d s E d w a r d s C h e v r o le t o v e rS e rr a . G M obj ec t ed t o the re qu es tby S errafor a l l ocati on dat a for other C hevrol et24

deal er s. G M cont ended thatthe “ m i sa l l ocati on ” dat a i n the di sc ov er y order r e qui r e d the pr oduc t i on of onl y the a l l oc a t i on da t aforS e rr aa nd E dw a r ds , notfor o th e rC h e v r o le t d e a le r s in B ir m in g h a m . T h e J a n u a r y 2 8 , 2 0 0 4 , d is c o v e r y o r d e rd id no tfore cl ose thatar gu m entby G M and i nstruct ed the parti es t o see k ass i st ance fr om the courti f di sput es ar ose. A ft er G M o bj ect ed , S erra fil ed a m o t i o n t o co m p el d i sco v ery, an d G M l o st the a r gum e nt . O n A ugus t27, 2004, the di s tr i c tc our tor de r e d G M t o pr oduc e the al l ocati on dat a for al l B i rm i ng ham deal er s f rom Ja nu ar y 200 1 forw ar d, bu tun der the r e t e nt i on pol i c y of

G M , the da t af

r om J a nua r y 2001 unt i l J une 2001 r e ga r di ng o th e rC h e v r o le t d e a le r s in B ir m in g h a m h a d b e e n d e s tr o y e d . W h e n o r d e r e d to pr oduc e the da t aon A ugus t27, 2004, G M c om pl i e d a nd pr oduc e d a l l tha ti tha d— a l l oc a t i on da t af

r om J une 2001 for w a r d. G M c oul d notpr oduc e w ha ti tdi d not pos s e s s . A l though the de s tr uc t i on of the doc um e nt s by G M m a y ha ve r e qui r e d the di stri ctcourtt o eng age i n a spol i ati on anal ys i s und erA l abam a l aw , se e W al -M ar t S t ores , Inc. v. G oo dm an, 78 9 S o. 2d 16 6, 17 6 (A l a. 20 00 ), the di stri ctcourtabused i t s di s c r e t i on w he n i the l d G M i n c i vi l c ont e m pta nd i m pos e d s a nc t i ons forthe fa ilu r e b y G M to o b e y th e o r d e ro f th e d is tr ic t c o u r t to p r o d u c e d o c u m e n ts G M d id notpos s e s s . S e e P e s a pl a s t i c C . A . , 799 F . 2d a t1520 ( “ A pa r ty he l d i n c ont e m pt25

m a y d e fe n d h is fa ilu r e to o b e y ac o u r t’s o r d e ro n th e g r o u n d s th a t h e w a s u n a b le to com pl y. ”) . W e a ls o n o te th a t th e p a r tie s n o w a g r e e th a t th e s p o lia tio n is s u e is m o o t. A f te rth is a p p e a l w a s f

ile d , o n S e p te m b e r2 , 2 0 0 5 , G M f ile d in th e d is tr ic t c o u r t a no t i ce of prod uct i on , w hi ch i nform ed the di stri ctcourtthatthe al l ocati on dat a, dat ed Ja nu ar y 1, 20 01 , un t i l June 1, 20 01 , tho ug htt o h ave been destroye d, had a c tua l l y be e n r e t a i ne d by athi r d pa r ty . G M pr oduc e d the da t at o S e rr aon S e p te m b e r1 , 2 0 0 5 . 2. S a t e l l i t e I nfor m a t i on T h e d is tr ic t c o u r t a ls o h e ld G M in c iv il c o n te m p t fo rth e fa ilu r e b y G M to o b e y th e A u g u s t 2 7 , 2 0 0 4 , o r d e rto p r o d u c e d o c u m e n ts r e la tin g to a ll s a te llite de a l e r s hi ps . G M c ont e nds tha tthe di s tr i c tc our ta bus e d i t s di s c r e t i on be c a us e ( 1) G M p e r fo r m e d r e a s o n a b le s e a r c h e s in r e s p o n s e to th e o r d e rb y th e d is tr ic t c o u r t, ( 2) the or de rw a s nots uf f i c i e nt l y c l e a rt o s uppor taf i ndi ng of c ont e m pt , a nd ( 3) the f i ndi ng w a s ba s e d i n pa r ton c l e a r l y e rr one ous fa c tua l f i ndi ngs . A f

t e rathor ough r e vi e w of

the r e c or d, w e r e

j e c tthe a r gum e nt s m a de by G M a nd c onc l ude tha tthe d is tr ic t c o u r t d id n o t ab u s e its d is c r e tio n w h e n it h e ld G M in c iv il c o n te m p t fo rits fa i l ur e t o pr oduc e the s a t e l l i t e i nfor m a t i on a s or de r e d on A ugus t27, 2004, a nd F e b r u a r y 3 , 2 0 0 5 .26

O n A ug ust27 , 20 04 , the di stri ctcourtcl earl y order ed G M t o p rodu ce a l l doc um e nt s “ [ c ] r e a t i ng, e vi de nc i ng, t e r m i na t i ng, i m pl e m e nt i ng, c ont i nui ng” the s a te llite p r o g r a m . T h e c o u r t w a s u n a m b ig u o u s : “I f it h a s to d o w ith th e s a te llite prog ra m , and i t ’ s ado cum ent , then you need t o p rodu ce i t . ” W hen G M sugg es t ed thatthe order re qu i re d G M t o “ cont ac t [] the hu nd re d and fi fty or s o zon e m anagers ac ross the coun try , ” the di stri ctcourtre pl i ed, “ I s ug gestyou con t ac tyour hu nd re d a n d f if ty z o n e m a n a g e r s . . . . A n d th e n y o u p r o d u c e th e d o c u m e n ts . . . th a t r e la te t o th e s a t e l l i t e . ” T h e d i s tr i c tc o u r ts tr e s s e d th a tGM m u s tp r o d u c e “ a n y GM sa t el l i t e a s t o any do cum entthat ’ s w i thi n the sc op e of thei r r equest . ” T he court g av e G M 6 0 d ays t o p ro d u ce th e d o cu m en t s. G M fa i l e d t o pr oduc e a ny doc um e nt s r e l a t i ng t o s a t e l l i t e a gr e e m e nt s by the de a dl i ne pr e s c r i be d by the c our t . I ns t e a d, on O c t obe r29, 2004, 62 da y s a f t e rthe or de rby the di s tr i c tc our tt o pr oduc e the i nfor m a t i on, G M pr oduc e d al i s tof 23 deal er shi ps thathad acti ve sa t el l i t e a gree m ent s a nd thei r l ocati on s. O n N ov em ber 11, 2004, G M s uppl e m e nt e d i t s r e s pons e s w i th 12 a ddi t i ona l na m e s a nd l oc a t i ons of de a l e r s hi ps w i th t e r m i na t e d s a t e l l i t e a gr e e m e nt s . E ve n thi s l a t e pr oduc t i on by G M di d notc om pl y w i th the A ugus t27, 2004, or de r . G M di d notpr ovi de a ny

“ do cum ent s . . . thatre l at e[ d] t o the sa t el l i t e” deal er shi ps, as ordered by the di stri ct c o u r t. I n s te a d , it p r o d u c e d alis t o f th e n a m e s a n d lo c a tio n s o f th e s a te llite27

d eal ersh i p s. G M a r g u e s th a t th e A u g u s t o r d e ra n d d is c o v e r y r e q u e s ts r e q u ir e d it to prod uce onl y al i stof sa t el l i t e dea l er shi ps. G M cont ends thatthe di stri ctcourt or de r e d i tt o pr oduc e doc um e nt s w i thi n the s c ope of the di s c ove r y r e que s t s , a nd the o n l y r e q u e s t s th a ta s k e d fo rd o c u m e n t s r e fe r e n c e d a“ s a t e l l i t e p r o g r a m , ” wh i c h GM co n t en d s d o es n o tex i st . G M arg u es th ati tp ro d u ced th e l i sto f sat el l i t e d eal ersh i p s, a s r e que s t e d, butdi d notpr ovi de a ny doc um e nt s be c a us e G M ha s ne ve rha d a “s a te llite p r o g r a m .” T h e p r o b le m fo rG M is th a t it d id n o t m a k e th is a r g u m e n t to the di stri ctcourtdu ri ng the A ug ust27 , 20 04 , hear i ng and the di stri ctcourtre j ec t ed th is a r g u m e n t in th e F e b r u a r y 3 , 2 0 0 5 , h e a r in g . T h e d is tr ic t c o u r t u n a m b ig u o u s ly in s tr u c te d G M to p r o d u c e a ll d o c u m e n ts in i t s posse ss i on thatre l at ed t o sat el l i t e dea l er shi ps. M oreover, the re cord i s c l ear that G M un ders t oo d, atthe A ug ust27 , 20 04 , and the F ebruary 3, 20 05 , hear i ng s, w hat th e d is tr ic t c o u r t o r d e r e d it to p r o d u c e . A n y a r g u m e n t to th e c o n tr a r y is u n s u p p o r te d b y th e r e c o r d . A f t e rG M pr oduc e d the doc um e nt s found i n the s e a r c h f r om the t e l e phone ca l l s, coun se l for S errare peat edl y c on t ac t ed coun se l for G M re gardi ng the fa i l ure t o p rodu ce i nform ati on re gardi ng sa t el l i t e dea l er shi ps thatG M re pres ent ati ves t es t i fi ed exi st ed i n thei r deposi t i on s. A l tho ug h S erraou t l i ned al l eged defi ci enci es28

i n th e p ro d u ct i o n , th e reco rd d o es n o trefl ectth atG M t o o kan y act i o n i n resp o n se t o th ese al l eg ed d efi ci en ci es. W h en th e d i stri ctco u rti ssu ed an o rd er t o sh o w cau se w h y G M sh o u l d n o tb e san ct i o n ed fo r th e fai l u re t o co m p l y w i th th e earl i er o rd ers, G M fi nal l y und er t oo k a m anual se ar ch of i t s 410 0 C hevrol etdeal erfi l es , w hi ch yi el ded n i ne un di sc l osed sa t el l i t e dea l er shi ps and, on M ay 16 , 20 05 , prod uced th o s e a d d i t i o n a l d o c u m e n t s . On l y a f t e rth i s m a n u a l s e a r c h c o u l d GM h a v e k n o wn thatthe l i stw as fi nal l y c om pl et e— se ven and a hal f m on ths af t erG M w as ordered to p r o d u c e th e d o c u m e n ts . A l tho ug h G M ar gu es thatthe di stri ctcourtsa nct i on ed G M beca use i tfa i l ed to p e r fo r m am a n u a l s e a r c h in th e f ir s t in s ta n c e , th e fa c tu a l r e c o r d b e lie s th is as se rti on . G M cont em pl at ed thata m anual se ar ch w ou l d b e nec es sary t o i dent i fy the re qu es t ed do cum ent s duri ng the A ug ust27 , 20 04 , hear i ng . If G M w as un cl ear abou tthe sc op e of the di sc ov er y r equestor the A ug ust27 , 20 04 , order, G M w as ob l i ged t o requestcl ar i fi ca t i on fr om the court ; i tw as “ no tfr ee t o i gn ore the O rder [ o f th e d is tr ic t c o u r t] a n d to im p o s e [ its ] o w n ” in te rp r e ta tio n o f th e o r d e r . C a r lu c c i, 7 7 5 F .2 d a t 1 4 4 8 ( c ita tio n s o m itte d ) . A l tho ug h G M shou l d h ave und er st oo d the sc op e of the di sc ov er y order fol l ow i ng the A ugus t27, 2004, he a r i ng, a ny doubt s G M ha d a boutthe s c ope of di sc ov er y s ho ul d h ave di sapp eare d b y F ebruary 3, 20 05 , w hen the di stri ctcourt29

found the pr oduc t i on w a s de f i c i e nta nd thr e a t e ne d s a nc t i ons for“ fa i l i ng t o pr ovi de do cum ent s i n i t s posse ss i on and con trol re l ati ng t o speci fi c s at el l i t e dea l er shi ps. ” T he di s tr i c tc our tga ve G M 14 da y s t o c ur e the de f i c i e nc i e s , butG M di d not perform a m anual se ar ch un t i l m ore than three m on ths l at er , on M ay 12 , 20 05 . It w a s nota n a bus e of

di s c r e t i on forthe di s tr i c tc our tt o c onc l ude tha tthe fa i l ur e of G M t o p rodu ce do cum ent s abo utsa t el l i t e dea l er shi ps w as du e t o con tum ac y r ather tha n good fa i th m i s i nt e rpr e t a t i on.

B . Wh e th e rth e S a n c tio n s I m p o s e db y th e D is tr ic t C o u r t Vi o l a tedD u e P ro cess? A l tho ug h the di stri ctcourtdi d n otabuse i t s di sc re t i on i n d et er m i ni ng that G M ha d vi ol a t e d the or de r s t o pr oduc e s a t e l l i t e i nfor m a t i on, the m or e s e r i ous q u e s tio n a b o u t ju s t s a n c tio n s r e m a in s . W h e th e rad is tr ic t c o u r t h a s th e p o w e rto i m pos e s a nc t i ons foravi ol a t i on of adi s c ove r y or de r“ de pe nds e xc l us i ve l y upon R ul e 37, w hi ch address es i t se l f w i th p ar t i cul ar i ty t o the consequences of afa i l ure t o m ake di sc ov er y by l i sti ng a var i ety of r em edi es w hi ch a c ou rtm ay em pl oy. ” S oc i é t é I nt e r na t i ona l e pourP a r t i c i pa t i ons I ndus tr i e l l e s e tC om m e r c i a l e s , S . A . v. R og er s, 35 7 U . S . 19 7, 20 7, 78 S . C t . 10 87 , 10 93 (195 8). “ T he di stri ctcourthas br oa d di s c r e t i on [ t o i m pos e s a nc t i ons ] , a nd thi s i s ‘ e s pe c i a l l y tr ue w he n the im p o s itio n o f

m o n e ta r y s a n c tio n s is in v o lv e d .’” B a n k A tla n tic , 1 2 F .3 d a t 1 0 4 8 .

“ D e e pl y r oot e d i n the c om m on l a w tr a di t i on i s the pow e rof a ny c our tt o ‘ m a na ge30

i t s a f fa i r s [ w hi c h] ne c e s s a r i l y i nc l ude s the a uthor i ty t o i m pos e r e a s ona bl e a nd a ppr opr i a t e s a nc t i ons upon e rr a ntl a w y e r s ’ ” a nd pa r t i e s tha ta ppe arbe for e the c our t . M a l a ut e av. S uz uki M ot orC o. , 987 F . 3d 1536, 1545 ( 11th C i r . 1993) ( q u o tin g C a r lu c c i, 7 7 5 F .2 d a t 1 4 4 7 ) . T h e b r o a d d is c r e tio n o f th e d is tr ic t c o u r t to m a na ge i t s a f

fa i r s i s gove r ne d, of

c our s e , by the m os tf

unda m e nt a l s a fe gua r d of fa i r ne s s : the D ue P r oc e s s C l a us e of the F i f th A m e ndm e nt . S e e I ns . C o. of I r e l a nd, 4 5 6 U .S . a t 7 0 7 , 1 0 2 S . C t. a t 2 1 0 6 - 0 7 . T o c o m p ly w ith th e D u e P r o c e s s C la u s e , a c our tm us ti m pos e s a nc t i ons tha ta r e both “ j us t ” a nd “ s pe c i f

i c a l l y r e l a t e d t o the pa r t i c ul a r‘ c l a i m ’ w hi c h w a s a ti s s ue i n the or de rt o pr ovi de di s c ove r y . ” I d. a t707, 1 0 2 S . C t. a t 2 1 0 7 . G M a ppe a l s t w o s a nc t i ons i m pos e d by the di s tr i c tc our t : ( 1) the $700, 000 fi ne, and (2) the stri ki ng of the af fi rm ati ve defense s of r es j ud i ca t a a nd other doc tr i ne s of

i s s ue pr e c l us i on. N e i the rs a nc t i on s a t i s f i e s the ba s i c s t a nda r d of due p r o c e s s . W e a d d r e s s e a c h s a n c tio n in tu r n . 1. T he $700, 000 F i ne G M a r gue s tha tthe f

i ne i m pos e d by the di s tr i c tc our ti s unj us ta nd outof pr opor t i on w i th the ha r m c a us e d t o S e rr aby the pr oduc t i on de l a y . A l though the

“ ‘ i m po si t i on of coer ci ve sa nct i on s by w ay of fi nes i s gener al l y a n are a i n w hi ch ap p ellate co u rts m u st re ly h ea v il y o n th e in fo rm ed ex er cise o f th e d istrict co u rt’s31

d is c r e tio n ,’” I n r e G r a n d J u r y S u b p o e n aD u c e s T e c u m , 9 5 5 F .2 d 6 7 0 , 6 7 3 ( 1 1 th C i r . 1992) ( c i t a t i on om i tt e d) , tha tdi s c r e t i on i s notunbr i dl e d, D or e y v. D or e y , 609 F .2 d 1 1 2 8 , 1 1 3 5 ( 5 th C ir . 1 9 8 0 ) . “[ I ]n c a s e s in v o k in g th e s a n c tio n p o w e ro f R u le 37 [, ] the di stri ctcourtm ust‘ cl earl y s t at e i t s r ea sons so thatm ea ni ng ful re vi ew m ay be ha d on a ppe a l . ’ ” C a r l uc c i , 775 F . 2d a t1453 ( quot i ng W i l s on v. V ol ks w a ge n of A m . , Inc. , 56 1 F . 2d 49 4, 50 5 (4th C i r. 19 77 )) . I n C a r l uc c i , w e e xpl a i ne d tha taf i ne form i s c onduc tm us tbe ba s e d on a re cord of evi dence and a ra t i on al e. W e r evi ew ed sa nct i on s i m po se d b y adi stri ct c our ta ga i ns ta n a tt or ne y forgr os s m i s c onduc ta nd r e c a l c i tr a nc e . I d. a t1442. T he d is tr ic t c o u r t fo u n d th a t th e a tto r n e y h a d a c te d in b a d fa ith a n d f in e d h im $ 1 0 ,0 0 0 . I d. T he c our ts t a t e d fourgr ounds forthe s a nc t i ons , i nc l udi ng the na tur e of the m i sc on du ct , bu rden on the court , det erre nce, and the fe e the l aw ye r had ear ned thr ough hi s m i s c onduc t . I d. a t1453. O n appe a l , w e e xpl a i ne d tha t“ [ t ] he m a g n itu d e o f

s a n c tio n s a w a r d e d is b o u n d e d u n d e rR u le 3 7 o n ly b y th a t w h ic h is

‘ r e a s ona bl e ’ i n l i ghtof

the c i r c um s t a nc e s , ” a nd s tr e s s e d tha tw e c oul d notuphol d a f i ne “ unl e s s the r e i s of

fe r e d on the r e c or d both aj us t i f i c a t i on forthe s a nc t i on a nd an ac coun t i ng by the [di stri ct ] court . ” I d. B ec ause “ the courtbel ow fa i l ed t o set fo r th a n a c c o u n t i n g a d e q u a t e t o j u s t i f y th e f i g u r e a d o p t e d , ” we c o n c l u d e d th a t“ we s i m pl y a r e i n no pos i t i on t o r e s ol ve ” w he the rthe s a nc t i ons w e r e j us t . I d. a t1453-32

54. A c c or di ngl y , w e r e ve r s e d a nd r e m a nde d “ s o tha tthe di s tr i c tc our t[ c oul d] cr ea t e are cord acc ou nt i ng for c ost s a dequ at e t o sust ai n w hat eversa nct i on that c our tul t i m a t e l y de c i de s i s j us t i f i e d i n l i ghtof

the r e pe a t e d r e f

us a l . . . t o a bi de by tha tc our t ’ s di s c ove r y di r e c t i ve s . ” I d. a t1454. H e r e , th e d is tr ic t c o u r t p r o v id e d e v e n le s s o f ar e c o r d a n d r a tio n a le fo rits f in e o f $ 7 0 0 ,0 0 0 th a n th e d e f

ic ie n t r e a s o n s a r tic u la te d b y th e d is tr ic t c o u r t in C ar l ucci . T he di stri ctcourtoffe re d n o rati on al e w hat soeverfor the $5 0, 00 0 a day s a nc t i on. A l though the c our tfound tha tG M w a s i n c ont e m ptfor98 da y s , w hi c h, a t $ 5 0 ,0 0 0 ad a y , w o u ld a m o u n t to $ 4 .9 m illio n , th e c o u r t lim ite d th e s a n c tio n to $700, 000, or14 da y s of c ont e m pt , a nd the di s tr i c tc our tpr ovi de d no e xpl a na t i on fo rits d e c is io n to lim it th e f in e to 1 4 d a y s . I t is im p o s s ib le fo rth is C o u r t to pr ovi de m e a ni ngf

ul r e vi e w on a ppe a l w he n the di s tr i c tc our tfa i l s t o gi ve a ny j us t i f i c a t i on fori t s de c i s i on. S e e i d. a t1453. W e c a nnote va l ua t e w he the rthe f i ne w a s “ju s t” a n d “s p e c if

ic a lly r e la te d to th e p a r tic u la r‘c la im ’ w h ic h w a s a t is s u e in the order t o p rovi de di sc ov er y. ” I ns. C o. of Ir el and, 46 5 U . S . at70 7, 10 2 S . C t . at 2 1 0 7 . O n r e m a nd, the di s tr i c tc our tm us tpr ovi de ar a t i ona l e fora ny f i ne . T he c o s ts to th e c o u r t o f

th e n u m e r o u s m o tio n s , h e a r in g s , a n d o r d e r s a r e a n a p p r o p r ia te c ons i de r a t i on. S e e C a r l uc c i , 775 F . 2d a t1453. A s w e e xpl a i ne d i n C a r l uc c i , the33

di s tr i c tc our t“ m a y a l s o f i nd tha tthe f

i ne i s be tt e rde e m e d c os t s t o be pa i d i n f ul l or i n pa r tt o” S e rr aori t s a tt or ne y s forthe i rl i t i ga t i on e xpe ns e s i n c om pe l l i ng the re l evantdi sc ov er y. Id. at14 54 . W hat everthe courtdeci des, i tm ustcr ea t e are cord o f its r e a s o n s fo rth e im p o s itio n o f a n y f in e to a f fo r d m e a n in g f

u l r e v ie w b y th is C o u r t. S e e id . a t 1 4 5 3 . 2. T he A ff i rm ati ve D ef

ense s T he r e m a i ni ng s a nc t i on r a i s e s the s a m e ki nd of pr obl e m . G M a r gue s tha tthe di stri ctcourtvi ol at ed du e proces s bec ause “ there i s absol ut el y no n exus bet w ee n the doc um e nt s tha tthe di s tr i c tc our tor de r e d pr oduc e d i n i t s di s c ove r y or de r s a nd the c our t ’ s s a nc t i on s tr i ki ng G M ’ s a f f i r m a t i ve de fe ns e s of

r e s j udi c a t a , i s s ue prec l usi on , j ud i ci al es t op pel , or l aw of the ca se do ctri ne. ” W e a gree . I n I ns ur a nc e C o. of

I r e l a nd, the S upr e m e C our ta ddr e s s e d w he the rthe d is tr ic t c o u r t v io la te d d u e p r o c e s s w h e n th e c o u r t o v e rr u le d a n o bje c tio n to pe r s ona l j ur i s di c t i on a s as a nc t i on forthe fa i l ur e by the de fe nda nt s t o pr ovi de do cum ent s r egar di ng pers on al j uri sdi cti on , as re qu i re d b y adi sc ov er y order . Id. at 69 5, 10 2 S . C t . at21 01 . T he S up re m e C ou rtup hel d the sa nct i on and exp l ai ned thatbeca use of the fa i l ure of the defendant s t o p rovi de di sc ov er y, the pl ai nt i ff w as una bl e t o de t e r m i ne the e xt e ntof c ont a c t s be t w e e n the de fe nda nt s a nd the for um st at e. Id. at70 9, 10 2 S . C t . at21 07 . T he C ou rtconcl ud ed thatthe sa nct i on w as34

“ s pe c i f i c a l l y r e l a t e d” t o the di s c ove r y a bus e , be c a us e the i m pos i t i on of the s a nc t i on

“ t o o kas est ab l i sh ed th e fact s . . . th at[th e p l ai n t i ff] w as seek i n g t o est ab l i sh thr ough di s c ove r y . ” I d. a t709, 102 S . C t . a t2107- 08. H er e, the di stri ctcourtstruck three defe nses re gardi ng the precl usi ve ef fe ct of the e a r l i e rl i t i ga t i on i n the s t a t e c our t s , butthos e de fe ns e s ha d no a ppa r e nt r e l a t i ons hi p w i th the di s c ove r y a bus e . T he di s c ove r y or de r s c om pe l l e d the pr oduc t i on of

doc um e nt s r e ga r di ng s a t e l l i t e a gr e e m e nt s be t w e e n G M a nd C h e v r o le t d e a le r s n a tio n w id e a n d v e h ic le a llo c a tio n d a tafo rC h e v r o le t d e a le r s in the B i r m i ngha m a r e a , butthos e doc um e nt s w e r e unr e l a t e d t o the e a r l i e rl i t i ga t i on in th e s ta te c o u r ts . A s w ith th e m o n e ta r y s a n c tio n s , th e d is tr ic t c o u r t fa ile d to s ta te a ny r e a s ons fors tr i ki ng the s e de fe ns e s . B e c a us e the l e ga l de fe ns e s w e r e not “s p e c if ic a lly r e la te d to th e p a r tic u la r‘c la im ’ w h ic h w a s a t is s u e in th e o r d e rto pr ovi de di s c ove r y , ” i d. a t707, 102 S . C t . a t2107, the s a nc t i ons vi ol a t e d the due p r o c e s s r ig h ts o f

G M . I V . CONCL US I ON B e c a us e the di s tr i c tc our ta bus e d i t s di s c r e t i on, w e r e ve r s e the f i ndi ng of c ont e m ptr e ga r di ng the pr oduc t i on of a l l oc a t i on da t a . W e a f

f i r m the f i ndi ng of c ont e m ptr e ga r di ng the fa i l ur e t o pr oduc e the s a t e l l i t e i nfor m a t i on. B e c a us e the s a n c t i o n s i m p o s e d b y th e d i s tr i c tc o u r tv i o l a t e d th e d u e p r o c e s s r i g h t s o f GM, we35

vaca t e the sa nct i on s a nd re i nst at e the af fi rm ati ve defense s of G M thatw er e s truck by the di stri ctcourt . W e r em and thi s a cti on t o the di stri ctcourtfor f urther pr oc e e di ngs c ons i s t e ntw i th thi s opi ni on. A FFI R M ED i n pa r t , R EVER SED i n pa r t , VA C A TED i n pa r t , a nd RE MAND E D.