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. I have a degree at law, recent MS in regulatory studies. Licensed in KS, admitted b4 S& 7th circuit, but not to Indiana bar due to political correctness. Blacklisted, nearly unemployable due to hostile state action. Big Idea: Headwinds can overcome, esp for those not within the contours of the bell curve, the Lego Movie happiness set forth above. That said, even without the blacklisting for holding ideas unacceptable to the Glorious State, I think the idea presented above that a law degree open many vistas other than being a galley slave to elitist lawyers is pretty much laughable. (Did the law professors of Indiana pay for this to be published?)

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  3. Joe, you might want to do some reading on the fate of Hoosier whistleblowers before you get your expectations raised up.

  4. I had a hospital and dcs caseworker falsify reports that my child was born with drugs in her system. I filed a complaint with the Indiana department of health....and they found that the hospital falsified drug screens in their investigation. Then I filed a complaint with human health services in Washington DC...dcs drug Testing is unregulated and is indicating false positives...they are currently being investigated by human health services. Then I located an attorney and signed contracts one month ago to sue dcs and Anderson community hospital. Once the suit is filed I am taking out a loan against the suit and paying a law firm to file a writ of mandamus challenging the courts jurisdiction to invoke chins case against me. I also forwarded evidence to a u.s. senator who contacted hhs to push an investigation faster. Once the lawsuit is filed local news stations will be running coverage on the situation. Easy day....people will be losing their jobs soon...and judge pancol...who has attempted to cover up what has happened will also be in trouble. The drug testing is a kids for cash and federal funding situation.

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