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Judges uphold $600k sanction for contempt

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After initially vacating a District judge’s $600,000 sanction against SonCo Holdings for contempt of court and remanding it to the lower court for more proceedings, the 7th Circuit Court of Appeals upheld the sanction Friday.  

Securities and Exchange Commission v. First Choice Management Services Inc., et al., 12-3308, comes before the federal appellate court for a second time in less than a year. In May 2012, the Circuit judges ruled Judge Robert L. Miller didn’t fully explain why he imposed the $600,000 sanction against SonCo, so they vacated the sanction. They sent the matter back to the judge to impose the sanction he imposed upon demonstration that it is a compensatory remedy for a civil contempt after all; impose a different or even no sanction, whether for civil contempt or for misconduct not characterized as contempt; or proceed under the rules governing criminal contempts.

As part of a settlement SonCo entered into with the receiver of First Choice Management Services, SonCo agreed to replace ALCO Oil & Gas Co.’s $250,000 cash bond with the Texas Railroad Commission. ALCO operated oil and gas leases in Texas, and SonCo claimed to have a valid legal interest in the leases that were obtained through a sham organization that defrauded victims out of millions.

SonCo never obtained the bond to replace ALCO’s bond and did not obtain the railroad commission’s authorization to operate the wells by a final deadline imposed by Miller. SonCo had paid the receiver the $600,000 for a quitclaim assignment of the leases, which Miller allowed the receiver to keep as a sanction.

In Friday’s decision, the judges found Miller explained and ALCO and the receiver were able to demonstrate that $600,000 is a “gross underestimate of the harm caused by SonCo’s contempt.” A plausible estimate of the total harm is actually closer to $2 million, Judge Richard Posner wrote, meaning SonCo has gotten off lightly.

“The district judge remarked SonCo’s ‘record of truly brazen intransigence’ in this protracted proceeding. That is an understatement. SonCo will be courting additional sanctions, of increasing severity, if it does not desist forthwith from its obstructionist tactics,” he wrote.

 

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  1. Such things are no more elections than those in the late, unlamented Soviet Union.

  2. It appears the police and prosecutors are allowed to change the rules halfway through the game to suit themselves. I am surprised that the congress has not yet eliminated the right to a trial in cases involving any type of forensic evidence. That would suit their foolish law and order police state views. I say we eliminate the statute of limitations for crimes committed by members of congress and other government employees. Of course they would never do that. They are all corrupt cowards!!!

  3. Poor Judge Brown probably thought that by slavishly serving the godz of the age her violations of 18th century concepts like due process and the rule of law would be overlooked. Mayhaps she was merely a Judge ahead of her time?

  4. in a lawyer discipline case Judge Brown, now removed, was presiding over a hearing about a lawyer accused of the supposedly heinous ethical violation of saying the words "Illegal immigrant." (IN re Barker) http://www.in.gov/judiciary/files/order-discipline-2013-55S00-1008-DI-429.pdf .... I wonder if when we compare the egregious violations of due process by Judge Brown, to her chiding of another lawyer for politically incorrectness, if there are any conclusions to be drawn about what kind of person, what kind of judge, what kind of apparatchik, is busy implementing the agenda of political correctness and making off-limits legit advocacy about an adverse party in a suit whose illegal alien status is relevant? I am just asking the question, the reader can make own conclsuion. Oh wait-- did I use the wrong adjective-- let me rephrase that, um undocumented alien?

  5. of course the bigger questions of whether or not the people want to pay for ANY bussing is off limits, due to the Supreme Court protecting the people from DEMOCRACY. Several decades hence from desegregation and bussing plans and we STILL need to be taking all this taxpayer money to combat mostly-imagined "discrimination" in the most obviously failed social program of the postwar period.

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