Opinion ID: 8704911
Heading Depth: 3
Heading Rank: 1

Heading: The Court Has Authority to Issue Sanctions

Text: As this Court noted in Chabad III, “[Qederal courts enjoy inherent contempt power....” 798 F.Supp.2d at 272 (citing FG Hemisphere, 637 F.3d at 377-78). “Civil contempt ... is designed to coerce compliance with a court order....” Id. (quoting SEC v. Bilzerian, 613 F.Supp.2d 66, 70 (D.D.C.2009) (citing In re Fannie Mae Sec. Litig., 552 F.3d 814, 823 (D.C.Cir.2009))). To determine whether civil contempt is appropriate, the Court must evaluate whether “the putative contemnor has violated an order that is clear and unambiguous,” and whether such a violation has been “proved by clear and convincing evidence.” Id. (quoting Broderick v. Donaldson, 437 F.3d 1226, 1234 (D.C.Cir.2006)). The Court already concluded that defendants’ non-compliance with this Court’s July 30, 2010 Order has been “demonstrated ... ‘to a reasonable certainty,’ as required to warrant the entry of civil contempt sanctions.” Id. (quoting Bilzerian, 613 F.Supp.2d at 70). And, it already concluded that these sanctions were available in this case based on FG Hemisphere Associates, LLC v. Democratic Republic of Congo, in which the D.C. Circuit affirmed a district court’s issuance of sanctions against a foreign state for refusing to comply with a Court’s discovery orders. Id. (citing FG Hemisphere, 637 F.3d at 377-78). While the United States concedes that “Russia has not complied with the Court’s order,” it now insists that the FSIA “does not authorize the Court to-award relief’ in the form of contempt sanctions for this non-compliance — -notwithstanding this Court’s earlier statement to the contrary. U.S. Statement 3-4; cf. Chabad III, 798 F.Supp.2d at 272. Because the Court did not have the U.S. Statement when it issued its opinion in Chabad III, it will now inquire as to whether anything in that Statement requires it to reconsider any of the conclusions it reached in that earlier opinion. As this Court noted in Chabad III, the authority of district courts to issue civil contempt sanctions against foreign states under the FSIA was recently confirmed by the D.C. Circuit. Id. In FG Hemisphere, the circuit affirmed a district court’s order imposing civil contempt sanctions against defendant, the Democratic Republic of Congo (DRC), for failing to comply with discovery orders. 637 F.3d 373. The court squarely rejected the argument advanced by the United States in that case as Amicus Curiae that FSIA’s “carefully crafted execution scheme” precluded these sanctions, finding “not a smidgen of indication in the text [or legislative history] of the FSIA that Congress intended to limit a federal court’s inherent contempt power.” Id. at 378 (citing Autotech Techs. v. Integral Research & Dev., 499 F.3d 737, 744 (7th Cir.2007)); cf. Brief of the United States as Amicus Curiae in Support of Appellant, FG Hemisphere, 2010 WL 4569107 (D.C.Cir.2011). The United States now attempts to distinguish FG Hemisphere, which involved a foreign state’s non-compliance with a discovery order, from the present case, which involves a foreign state’s non-compliance with a final order compelling defendants to return the collection of expropriated materials to Chabad’s representatives. U.S. Statement 9-10. The distinction based on the subject of the underlying order matters, the United States insists, because of the FSIA’s distinct treatment of “jurisdictional immunity, on the one hand, and execution immunity, on the other.” Id. at 4-5 (quoting Walters v. Indus. & Comm’l Bank of China, 651 F.3d 280, 288 (2d Cir.2011)). The United States points out that “[t]he FSIA affords execution immunity for property held by a sovereign that sweeps more broadly than the jurisdictional immunity that the Act affords to the sovereign on the underlying claim itself.” Id. at 5 (citing cases). And, FSIA’s exceptions from execution immunity apply only to a foreign state’s “property in the United States,” and “even that property is subject to execution only in carefully circumscribed and extremely limited circumstances.” Id. at 6 (citing 28 U.S.C. § 1610(a)). Accordingly, the United States concludes, contempt sanctions may be available for non-compliance with a discovery order (as in FG Hemisphere) pursuant to FSIA’s broader waiver of jurisdictional immunity, but such sanctions are not available for non-compliance with an order compelling transfer of property held in a foreign state (as in the present case), because the latter would, in effect, unlawfully expand FSIA’s restricted waiver of execution immunity. Id. at 7-10. In the United States’ words: “Chabad asks the Court not simply to utilize its contempt power, but to create an alternative enforcement scheme that conflicts with the carefully defined, and limited, system of remedies authorized under the FSIA.” Id. at 10. This argument fails because it mistakenly conflates the entering of a sanction with its enforcement. “The government’s position is quite confusing, conflating a contempt order imposing monetary sanctions with an order enforcing such an award through execution.” FG Hemisphere, 637 F.3d at 377. But though the latter is carefully restricted by the FSIA, this restriction is irrelevant here because present matter concerns only the former. As the Court of Appeals explained -in FG Hemisphere, where the United States had similarly argued that “the FSIA does not permit a court to enforce a contempt sanction,” this was simply “not the issue” before the court, which concerned only the district court’s authority to issue a contempt sanction. 637 F.3d at 379 n. 2; see also id. at 375 (noting “there has been as yet no attempt to enforce the sanction” (emphasis added)). Because the present matter concerns only the court’s authority to issue sanctions, not enforce them, the United States’ argument fails and FG Hemisphere governs. 2 Accordingly, the Court reaffirms its pri- or holding that it possesses authority to issue contempt sanctions in this context. See Chabad III, 798 F.Supp.2d at 272-73.