Court Opinion

ID: 8996835
Source: CourtListenerOpinion
Date Created: 2022-11-27 12:46:13.466996+00
Date Added: 2024-06-11T17:11:05.108319
License: Public Domain

BOWMAN, Circuit Judge.
The Secretary of Agriculture and two employees of the Department of Agriculture appeal an order of the District Court finding them in civil contempt and awarding compensatory damages, attorney fees, and costs. We affirm in part and reverse in part.
I.
This proceeding is ancillary to a nationwide class action, Coleman v. Block, which challenged the Farmers Home Administration’s (FmHA) loan liquidation foreclosure procedures on statutory and constitutional grounds.1 The District Court’s nationwide preliminary injunction in Coleman v. Block was filed on November 14, 1983 and required the FmHA, inter alia, to give at least thirty days notice of its loan deferral program, see 7 U.S.C. § 1981a (1988), before demanding voluntary conveyance by a farmer or depriving a farmer of property in which the agency has a security interest. Coleman v. Block, 580 F.Supp. 192, 193-94 (D.N.D.1983). The injunction was made permanent in Coleman v. Block, 580 F.Supp. 194, 210-12 (D.N.D.1984), and was vacated as moot (because of the enactment of the Agricultural Credit Act of 1987) in Coleman v. Lyng, 864 F.2d 604 (8th Cir.1988), cert. denied, 493 U.S. 953, 110 S.Ct. 364, 107 L.Ed.2d 351 (1989).
During 1973 and 1974, Patrick and Sonya McBride decided to enter the poultry farming business in Maine. They located a suitable farm and began planning for construction of a broiler barn. In order to finance these plans, the McBrides went to Skowhe-gan Savings Bank (the Bank) and received a $40,000.00 real estate loan that was secured by a first mortgage on the realty. The FmHA also agreed to provide the McBrides with a $94,000.00 construction loan and a $29,000.00 operating loan for equipment. The FmHA received a second mortgage on the realty.2 When completed, the farm contained such amenities as a swimming pool and a horse barn.
In 1981, the poultry business in Maine collapsed. Although the McBrides ceased making payments on their loans, neither the Bank nor the FmHA foreclosed immediately. Ultimately, by certified letter dated June 4, 1982, the Bank informed the McBrides that it was necessary to proceed with foreclosure. Although the record indicates that Sonya McBride’s mother had a sum of money sufficient to pay off the mortgage to the Bank, and offered it to the McBrides for that purpose, the McBrides did not avail themselves of her offer, at least in part because of certain assurances, which we will come to momentarily, given them by one of the defendants.
The couple arranged a meeting at their home on June 11, 1982 with various FmHA officials, including Dwight Sewell, the State Director of the FmHA in Maine, and Steve Taylor, the McBrides’ FmHA county agent. While those present discussed a number of possible options, ultimately nothing was resolved. The next meeting took place in Taylor’s office on June 29, 1982. When again nothing was resolved, the McBrides contacted Sewell to discuss their financial situation. Sewell directed them to work with Taylor.
The McBrides met with Taylor a third time on July 22, 1982 and notified him that *574the Bank intended to proceed with the foreclosure. While the parties dispute the events of the meeting, the McBrides claim that Taylor advised them to allow the Bank to continue with the foreclosure procedure and assured them that the FmHA would purchase the mortgage and thereafter would work with them. The McBrides say that based on these assurances they declined to use the money then available from Sonya McBride’s mother to pay off the Bank mortgage. In any event, after this meeting the McBrides instructed the Bank to proceed with foreclosure.
The Bank filed an action for foreclosure on October 13, 1982 and obtained a judgment of foreclosure on January 14, 1983, at which time the statutory one-year period of redemption began to run. In February 1983, with Taylor’s knowledge, the McBrides began growing replacement chickens on their farm for Dorothy Egg Farms.
As previously noted, the District Court’s nationwide preliminary injunction in Coleman v. Block issued on November 14, 1983. Coleman v. Block, 580 F.Supp. 192 (D.N.D.1983). On November 23, 1983, Se-well began a program of notice to field officers regarding that order. The injunction was made permanent on February 17, 1984.
The McBrides again visited Taylor on February 16, 1984. At this meeting, Taylor explained to the McBrides that they could either voluntarily convey the property to the FmHA and extinguish their debt or be foreclosed and owe any unliquidated balance. He also mentioned the possibility of refinancing upon proof of the McBrides’ arrangement with Dorothy Egg Farms. The McBrides contacted Sewell, who confirmed these suggestions and referred them back to Taylor.
Shortly thereafter, the McBrides telephoned Taylor and directed him to prepare the conveyance documents. Taylor did so, and, on February 21, 1984, the McBrides executed an offer for a voluntary conveyance to the FmHA.3 Taylor says that a pretermination notice package prepared in response to the Coleman v. Block injunction was included with the conveyance documents; the McBrides say they have no recollection of any such notice.
After the documents were signed, the state FmHA office added a notation to the effect that the FmHA would accept the McBrides’ offer of voluntary conveyance if it received marketable title. On or about February 27, 1984, Taylor informed the McBrides that their offer was rejected as the impending judicial sale of their property prevented the FmHA from receiving marketable title. The Bank’s foreclosure sale was held March 1, 1984, at which time the FmHA as junior lienholder bought the land for $51,875.37. On July 2, 1984, the FmHA sold the business fixtures for $8,990.00 and the real estate for $60,000.00.
On April 25, 1986, the McBrides filed a motion to find contempt against the United States Department of Agriculture, the Secretary of Agriculture, and various FmHA officials, including Taylor and Sewell. Following an evidentiary hearing, the District Court, in a memorandum and order filed January 4, 1989, concluded that Taylor and Sewell had violated the Coleman v. Block injunction by failing to give the McBrides adequate and meaningful notice of the loan deferral program before depriving them of property in which the FmHA had only a security, not a possessory, interest and before demanding voluntary conveyance. It further found the Secretary of Agriculture to be in contempt based upon a respondeat superior theory.4
In reaching its decision, the District Court recognized that actions that occurred prior to the issuance of its preliminary injunction in Coleman could not be in violation of the injunction. It also took the view, however, that such “actions may be relevant as coloring or confirming actions taken or statements made after [the is*575suance of the preliminary injunction].” McBride v. Lyng, No. A1-83-47-09, slip op. at 12 (D.N.D. Jan. 4, 1989) (hereinafter “Memorandum and Order”). Upon examining the conduct of Taylor and Sewell both before and after the issuance of the preliminary injunction in Coleman, the court concluded that they not only had violated the injunction, but “elemental principles of contract law” as well. Memorandum and Order at 15. In addition, the court also found that in demanding that the McBrides make a voluntary conveyance Taylor and Sewell-had “clearly committed the tort of duress.” Memorandum and Order at 16.
Turning to the question of damages, the court found that the McBrides, “although traumatized by the destruction of the chicken raising business by factors beyond their control, were further and severely traumatized by the misconduct of Taylor and Se-well.” Memorandum and Order at 16-17. The court then proceeded to award damages of $131,143.04 (plus interest) based on the “unjustified failure to forgive the balance of the debt upon the McBrides’ offer to convey.” Memorandum and Order at 17. An additional $50,000.00 was awarded for the McBrides’ “extended emotional distress, inconvenience, and embarrassment,” Memorandum and Order at 17, along with attorney fees and costs in an amount yet to be determined.
On appeal to this Court the government’s main points, buttressed by various supporting arguments, are: (1) the District Court exceeded its jurisdiction when it considered the McBrides’ contract and tort claims, as these claims were not based on the injunction, which was the predicate for the McBrides’ contempt motion; (2) even if Taylor and Sewell violated the injunction the McBrides are not entitled to any relief; and (3) the District Court erred in entering its finding of contempt.5
II.
We first address the issue of whether the District Court erred in finding that the actions of Taylor and Sewell6 were contumacious of the Coleman v. Block injunction. The nationwide preliminary injunction in Coleman v. Block issued on November 14,1983. We quote the relevant language thereof:
3. That the defendants, their agents, subordinates, and employees, are enjoined until further order of this court from
(c) Demanding voluntary conveyance by the plaintiffs, or
(d) Repossessing chattels of the plaintiffs or in any way proceeding against or depriving the plaintiffs of property in which the defendants have a security interest,
until defendants shall have given any plaintiffs against whom the defendants propose to proceed at least 30 days notice [of the FmHA loan deferral program].
*576Coleman v. Block, 580 F.Supp. at 193-94.7 The District Court found that Taylor and Sewell violated the injunction by failing to give the McBrides adequate and meaningful notice of their rights before depriving them of property in which the FmHA had only a security, not a possessory, interest, and before demanding from them voluntary conveyance. Memorandum and Order at 13. Because we conclude that these findings are not clearly erroneous, see Fed.R.Civ.P. 52(a), the District Court’s contempt citation was not an abuse of discretion. See Hartman v. Lyng, 884 F.2d 1103, 1106 (8th Cir.1989) (reviewing a contempt holding by an abuse of discretion standard); see also Davis v. Bowen, 894 F.2d 271, 272 (8th Cir.1989) (“Our review of the denial of a contempt motion is limited to determining whether the district court abused its discretion.”), cert. denied, 495 U.S. 904, 110 S.Ct. 1922, 109 L.Ed.2d 286 (1990).
On February 16, 1984, the McBrides met with Taylor. Taylor informed the McBrides at that meeting that they could either convey the farm to the FmHA and get a release of their debt or be foreclosed and owe any unliquidated balance. As Taylor gave the McBrides these “limited options of selling [their] land or facing foreclosure,” Hartman, 884 F.2d at 1105, we would agree that his actions “constituted a demand [for voluntary conveyance].” Hartman, 884 F.2d at 1105. Although the record shows that the parties also discussed the possibility of refinancing based upon the McBrides’ dealings with Dorothy Egg Farms, there is some dispute as to the precise language used, and we cannot say the District Court was clearly erroneous in finding that such refinancing was never a real possibility.
Based upon this record, the District Court did not commit clear error in finding that Taylor and Sewell failed to comply with the notice provisions of the Coleman injunction and thus failed to give the McBrides adequate notice of their rights. The contempt finding therefore was factually supported and was not an abuse of discretion.
III.
Although the District Court’s contempt finding was not an abuse of discretion, we cannot sustain the court’s award of damages. The government argues strenuously that sovereign immunity precludes an award against the government of compensatory damages, indistinguishable from those that might be awarded in a contract or tort action, in a civil contempt proceeding. This is a weighty argument, and we regard it very seriously. It does strike us as being a dubious proposition that by filing a contempt motion a claimant can be positioned to recover an unlimited amount of compensatory damages from the United States without being bound by the strictures of either the Tucker Act or the Federal Tort Claims Act, which are express (but carefully limited) waivers by the United States of its sovereign immunity with respect to contract and tort claims. Absent an express waiver of sovereign immunity, money awards cannot be imposed against the United States. See United States v. Mitchell, 463 U.S. 206, 212, 103 S.Ct. 2961, 2965, 77 L.Ed.2d 580 (1983); Block v. North Dakota, 461 U.S. 273, 280, 103 S.Ct. 1811, 1816, 75 L.Ed.2d 840 (1983). See also Barry v. Bowen, 884 F.2d 442, 443-44 (9th Cir.1989) (holding that district court’s award of monetary sanctions for contempt violated the sovereign immunity of the United States, but also reversing on other grounds). There does not appear to be any express waiver of sovereign immunity applicable to this case.8 We therefore have grave doubts that the contempt power can be carried as far as it has been carried *577against the United States in the present litigation.
We need not decide that question, however, for as is apparent from the language of the District Court’s opinion, the damages that it awarded did not flow from the defendants’ violation of the notice provision of the Coleman injunction. Instead, as the government contends, the damages the court awarded flow from conduct that antedated the Coleman injunction or that otherwise is not encompassed by that injunction. This is crystal clear from the court’s statement that it was awarding the McBrides damages of $131,143.04 resulting from the defendants’ “unjustified failure to forgive the balance of the debt upon the McBrides’ offer to convey_” Memorandum and Order at 17. This statement posits the existence of a duty to forgive the balance of the McBrides’ debt — a duty that is nowhere to be found in the Coleman injunction and that could only arise from conduct or undertakings not covered by that injunction. Indeed, in reviewing the record we are struck by the McBrides’ total failure to show a causal connection between the defendants’ failure to give timely notice as required by the injunction and the damages alleged. As a factual matter, they have not shown that the course of events would have played out any differently had the required notice been given in a timely manner. For example, the McBrides have made no factual showing that if the required notice had been given in a timely manner they would have applied for the loan deferral program, nor have they made even an attempt to show that if they had applied for the program they would have qualified for it and received a loan deferral.
The District Court understandably and properly was troubled by what it found to be misconduct by Taylor and Sewell in their course of dealing with the McBrides. In a related action by the McBrides against Taylor and Sewell another court has called the defendants’ conduct “deceitful,” a characterization with which we have no quarrel. See McBride v. Taylor, 924 F.2d 386, 387 (1st Cir.1991) (rejecting the McBrides’ Bivens-type claims, based on the same facts as the present case, on the ground that Taylor and Sewell had not violated any clearly established constitutional right and thus were entitled to qualified immunity). Although it is quite tempting to use the defendants’ violation of the Coleman injunction as a reason for compensating injuries that actually flow from other wrongs, “judicial discretion must not yield to such impulses.” Barry, 884 F.2d at 444. As the McBrides have failed to show that their losses were caused by the defendants’ failure to give the notice required by the Coleman injunction — rather than by other circumstances and conduct that do not implicate the Coleman injunction, and therefore cannot be a basis for relief in this contempt action — the award of damages is clear error and is not sustainable. See Hartman, 884 F.2d at 1106 (“The district court’s finding with respect to damages is reversible only if clear error.”).
A special word is in order regarding the award of $50,000.00 for emotional distress. Even assuming arguendo a causal relationship between the violation of the injunction and the harm suffered, we do not believe civil contempt to be an appropriate vehicle for awarding damages for emotional distress, see In re Walters, 868 F.2d 665, 670 (4th Cir.1989). But see Powell v. Ward, 487 F.Supp. 917 (S.D.N.Y.1980), aff'd as modified, 643 F.2d 924 (2nd Cir.), cert. denied, 454 U.S. 832, 102 S.Ct. 131, 70 L.Ed.2d 111 (1981). The problems of proof, assessment, and appropriate compensation attendant to awarding damages for emotional distress are troublesome enough in the ordinary tort case, and should not be imported into civil contempt proceedings. Although in some circumstances an award of damages to a party injured by the violation of an injunction may be appropriate, see, e.g., Welch v. Spangler, 939 F.2d 570, 572-73 (8th Cir.1991); In re Tetracycline Cases, 927 F.2d 411, 413 (8th Cir.1991), the contempt power is not to be used as a comprehensive device for redressing private injuries, and it does not encompass redress for injuries of this sort.
*578Our disposition of the damages issue makes it unnecessary for us to address the government’s other arguments. In conclusion, the District Court’s finding that a contempt occurred is affirmed, but the award of damages is reversed. The case is remanded to the District Court for further consideration of the issue of attorney fees and costs.

. The factual and procedural history of the Coleman litigation is set forth in Coleman v. Lyng, 864 F.2d 604 (8th Cir.1988), cert. denied, 493 U.S. 953, 110 S.Ct. 364, 107 L.Ed.2d 351 (1989).

. The FmHA also obtained the only security interest in the equipment purchased with the operating loan.

. The McBrides signed a conveyance document and deed to effectuate the real estate transfer and a bill of sale to convey the equipment.

. The District Court dismissed the charges against the Department of Agriculture and the other defendants.

. In its brief and also in a post-argument submission filed November 18, 1991, the government suggests that because the Coleman litigation has ended and the Coleman injunction has been vacated, see Coleman, 864 F.2d at 612, this case is moot and the contempt finding should be vacated. We disagree. Although our opinion in Coleman ordering the injunction vacated was announced on December 28, 1988 and the contempt finding in the present case was filed a week later, on January 4, 1989, the petition for rehearing in Coleman was not denied until February 1, 1989, and our mandate did not issue until after that had occurred. The District Court thereafter, in keeping with our mandate, dismissed the Coleman case. See Coleman, Civil No. A1-83-47 (D.N.D. Feb. 21, 1989). Thus the injunction was still in place when the District Court entered the contempt finding, and the contumacious conduct occurred during the time the injunction was in force. In these circumstances, we do not believe the present case is moot. If the injunction no longer had been in force when the District Court entered its contempt finding, a different case would be presented, and we express no opinion as to the jurisdictional question in such a case.

. The litigants have not suggested any distinctions among the three parties the District Court found in contempt. Although it is not clear that the Secretary of Agriculture can be held in contempt on a theory of respondeat superior, " '[qjuestions not raised, briefed or argued will ordinarily be given no consideration by an appellate court.’ ” Jasperson v. Purolator Courier Corp., 765 F.2d 736, 741 (8th Cir.1985) (citations omitted).

. Nearly identical language appears in the permanent injunction issued February 17, 1984. Coleman v. Block, 580 F.Supp. at 211.

. We note that the Agricultural Credit Act of 1987, Pub.L. No. 100-233, 101 Stat. 1568 (1987), the enactment of which mooted the Coleman litigation, see Coleman, 864 F.2d at 612, does not even provide an implied private right of action for farmer-borrowers, see Zajac v. Federal Land Bank of St. Paul, 909 F.2d 1181, 1183 (8th Cir.1990), much less any sort of express waiver of the sovereign immunity of the United States.