Opinion ID: 2708942
Heading Depth: 4
Heading Rank: 1

Heading: The Julius Baer account

Text: Adam Swiech owned one of these accounts, a Bank Julius Baer account in Switzerland. This was the account flagged for the plaintiffs by Polish prosecutors, who provided doc‐ uments showing money flowing into the account from KBP accounts. Through a subpoena, the plaintiffs obtained wire 6 No. 13‐2435 transfer records from American accounts held by Lewicki that showed additional transfers into the Julius Baer account. Swiech did not turn over any records, and he refused to acknowledge he owned the account (he claimed it belonged to his minor son). By the end of 2011, Swiech had produced nothing, despite multiple discovery requests, and claimed the records were not within his control. The magistrate was unconvinced by Swiech’s story and ordered production of the records by January 6, 2012. Throughout January and February of 2012, Swiech made a few halfhearted efforts to obtain the records. On January 6, the defendants’ counsel sent the plaintiffs a copy of a letter that Swiech supposedly sent to Julius Baer. The letter did not, however, request any specific records or provide an ac‐ count number or other identifying information. The magis‐ trate judge then instructed Swiech about the form that a proper records request should take—i.e., that the letter should include sufficient identifying information. Swiech sent another letter on January 16, but again failed to include an account number. The defendants’ lawyer apparently called Julius Baer on February 2, and was told that an ac‐ countholder could acquire information by appearing in per‐ son or by requesting it in writing. Still, Swiech produced nothing. Finally, at the end of February, the plaintiffs moved for sanctions and sought to have Swiech held in contempt. The magistrate found Swiech’s behavior sanctionable, but declined to hold him in contempt. Instead, she sanc‐ tioned Swiech with a potential adverse jury instruction: if Swiech failed to produce the records by the close of discov‐ ery, the jury would be instructed that the records would have been adverse to him. No. 13‐2435 7 The plaintiffs objected to this ruling in the district court, and the district judge found the sanction unreasonably leni‐ ent in light of Swiech’s repeated discovery violations. In an August 13, 2012 order, the district judge held Swiech in con‐ tempt, citing a need to leave “escalating sanctions … on the table in order to ensure compliance with court orders.” She noted that the magistrate’s adverse jury instruction gave Swiech the option of continued delay by allowing him to produce the documents at the close of the discovery—when they would be less useful to the plaintiffs—while still avoid‐ ing the sanction. Swiech could also opt not to produce the records at all—say, if they turned out to be very damaging— and live with the adverse instruction. Swiech argues that the magistrate judge did not clearly err and that it was therefore an abuse of discretion for the district court to hold him in contempt. We disagree. Swiech’s efforts to comply with the magistrate’s production orders were minimal, at best. He did not disclose the account’s ex‐ istence and then denied owning it. Once he got around to requesting records, he sent patently inadequate letters to Jul‐ ius Baer that did not comply with the magistrate judge’s or‐ ders. Indeed, both judges agreed that Swiech had disobeyed several explicit production orders. Given that, the district judge’s decision to stiffen the pen‐ alty was sensible. She noted that the records at issue were central to the case (the plaintiffs suspected that the Julius Baer account was a clearinghouse for money being looted from KBP), and that an adverse jury instruction was insuffi‐ cient impetus for Swiech to comply. She discussed Swiech’s history of discovery violations and explained her reasoning for imposing tougher sanctions. Moreover, contempt was a 8 No. 13‐2435 reasonable sanction. District courts must support a contempt finding with clear and convincing evidence that the court’s clear order has been violated. See Autotech Techs. LP v. Inte‐ gral Research & Dev. Corp., 499 F.3d 737, 751 (7th Cir. 2007). Swiech’s overtly noncompliant behavior in response to the magistrate’s production orders certainly qualifies. Thus, the district judge’s decision to hold Swiech in contempt was not an abuse of discretion.