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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. Just an aside, but regardless of the outcome, I 'm proud of Judge William Hughes. He was the original magistrate on the Home place issue. He ruled for Home Place, and was primaried by Brainard for it. Their tool Poindexter failed to unseat Hughes, who won support for his honesty and courage throughout the county, and he was reelected Judge of Hamilton County's Superior Court. You can still stand for something and survive. Thanks, Judge Hughes!

  2. CCHP's real accomplishment is the 2015 law signed by Gov Pence that basically outlaws any annexation that is forced where a 65% majority of landowners in the affected area disagree. Regardless of whether HP wins or loses, the citizens of Indiana will not have another fiasco like this. The law Gov Pence signed is a direct result of this malgovernance.

  3. I gave tempparry guardship to a friend of my granddaughter in 2012. I went to prison. I had custody. My daughter went to prison to. We are out. My daughter gave me custody but can get her back. She was not order to give me custody . but now we want granddaughter back from friend. She's 14 now. What rights do we have

  4. This sure is not what most who value good governance consider the Rule of Law to entail: "In a letter dated March 2, which Brizzi forwarded to IBJ, the commission dismissed the grievance “on grounds that there is not reasonable cause to believe that you are guilty of misconduct.”" Yet two month later reasonable cause does exist? (Or is the commission forging ahead, the need for reasonable belief be damned? -- A seeming violation of the Rules of Profession Ethics on the part of the commission) Could the rule of law theory cause one to believe that an explanation is in order? Could it be that Hoosier attorneys live under Imperial Law (which is also a t-word that rhymes with infamy) in which the Platonic guardians can do no wrong and never owe the plebeian class any explanation for their powerful actions. (Might makes it right?) Could this be a case of politics directing the commission, as celebrated IU Mauer Professor (the late) Patrick Baude warned was happening 20 years ago in his controversial (whisteblowing) ethics lecture on a quite similar topic: http://www.repository.law.indiana.edu/cgi/viewcontent.cgi?article=1498&context=ilj

  5. I have a case presently pending cert review before the SCOTUS that reveals just how Indiana regulates the bar. I have been denied licensure for life for holding the wrong views and questioning the grand inquisitors as to their duties as to state and federal constitutional due process. True story: https://www.scribd.com/doc/299040839/2016Petitionforcert-to-SCOTUS Shorter, Amici brief serving to frame issue as misuse of govt licensure: https://www.scribd.com/doc/312841269/Thomas-More-Society-Amicus-Brown-v-Ind-Bd-of-Law-Examiners

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