Idona Wallace v. Kmart Corp ( 2012 )

PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_____________
No. 11-1541
_____________
IDONA WALLACE
v.
KMART CORPORATION
(D.V.I. No. 1-02-cv-00107)
ERROL STANLEY; NIGEL CHARLES; MELVIN NEAL;
JOSEPH SONNY; WRANDA DAVIS; RACHEL DAVIS
v.
ST. CROIX BASIC SERVICES, INC; HOVENSA LLC;
AMERADA HESS CORP.; BASIC INDUSTRIES INC.
(D.V.I. No. 1-03-CV-00055)
1
FORREST THOMAS
v.
CENTENNIAL COMMUNICATIONS; CENTENNIAL
PUERTO RICO WIRELESS; CENTENNIAL USVI
OPERATION; CENTENNIAL CARIBBEAN HOLDING
CORP.
(D.V.I. No. 1-03-cv-00163)
MARK VITALIS
v.
SUN CONSTRUCTORS INC.; HOVENSA LLC; RICHARD
LANGNER; EXCEL GROUP INC.
(D.V.I. No. 1-05-cv-00101)
PATRICE CANTON
v.
KMART CORPORATION
(D.V.I. No. 1-05-cv-00143)
2
GLENFORD RAGGUETTE
v.
PREMIER WINES AND SPIRITS LTD.
(D.V.I. No. 1-06-cv-00173)
TERRANCE ALEXIS
v.
HOVENSA LLC; HESS CORPORATION f/k/a AMERADE
HESS CORPORATION
(D.V.I. No. 1-07-cv-00091)
LEE ROHN, ESQ.*,
Appellant
*(Pursuant to Fed. R. App. P. 12(a))
______________
APPEAL FROM THE DISTRICT COURT
FOR THE VIRGIN ISLANDS
District Judge: Honorable Timothy J. Savage
______________
Argued December 6, 2011
______________
3
Before: FISHER, GREENAWAY, JR. and ROTH, Circuit
Judges.
(Opinion Filed: July 25, 2012 )
______________
OPINION
______________
Lee J. Rohn, Esquire (argued)
Lee J. Rohn & Associates
1101 King Street
Christiansted, VI 00820
Counsel for Appellant Lee Rohn
David J. Cattie, Esquire (argued)
Charles E. Engeman, Esquire
Ogletree, Deakins, Nash, Smoak & Stewart
1336 Beltjen Road
Suite 201
St. Thomas, VI 00802
Counsel for Appellees Sun Constructors, Richard
Langner and Excel Group, Inc.
GREENAWAY, JR., Circuit Judge.
Attorney Lee Rohn appeals a decision of the District
Court holding her in contempt, pursuant to Fed. R. Civ. P.
45(e), for failing to comply with a subpoena. The subpoena
was issued by Sun Constructors (“Sun”) as part of discovery
in the motion Ms. Rohn filed, seeking the recusal of the
District Judge in seven cases in which Ms. Rohn appeared as
4
counsel. The cases, all of which were in different procedural
postures, were consolidated for purposes of consideration of
the recusal motion. For the reasons set forth below, we
conclude that we have jurisdiction to hear this appeal, and
will remand for further proceedings consistent with this
opinion.
I. Facts and Procedural History
In the recusal motion, Ms. Rohn alleged that the
District Judge‟s “personal animosity” towards her was
creating an appearance of bias and prejudice against her
clients. (App. 104-05.) In support of the recusal motion, Ms.
Rohn submitted a declaration, relating her summary of the
facts that formed the basis for her allegation of personal
animosity. In response to the recusal motion and attached
declaration, Sun, who was a defendant in one of the seven
consolidated cases, sought discovery.1 Specifically, Sun
subpoenaed Ms. Rohn.2 The subpoena sought production of
1
While defendants in some of the other six cases opposed the
recusal motion, as well as engaged in discovery regarding that
motion, only Sun‟s subpoena and the actions associated with
it are under review at this time.
2
The subpoena was issued by Sun. However, the subsequent
litigation surrounding the subpoena involved Sun, Richard
“Doc” Langner and Excel Group, Inc. (collectively,
“Defendants”).
5
documents as well as scheduling her deposition.3
Ms. Rohn filed a mandamus petition in our Court
seeking to have us act on various discovery matters, including
vacating the order requiring her to appear for her deposition.
The petition was denied, but our Court directed that all
discovery be overseen by a Magistrate Judge, and not the
District Judge about whom the recusal motion was focused.
According to Defendants, Ms. Rohn did not comply
with the subpoena. She appeared for her deposition, but did
not produce any documents. As a result, Defendants moved
for contempt, pursuant to Fed. R. Civ. P. 45(e).4 The
Magistrate Judge granted the motion, held Ms. Rohn in
contempt, and awarded attorney‟s fees to Defendants as the
sanction for her contempt. Citing 28 U.S.C. § 636(e)(7), Ms.
3
Also attached to the motion for recusal were statements
from a variety of other people, including Ms. Rohn‟s clients
and other individuals not involved in any litigation before the
District Judge. Defendants sought discovery regarding these
persons as well, but those requests and their resolution are not
before us.
4
Rule 45(e) provides that the court issuing the subpoena
“may hold in contempt a person who, having been served,
fails without adequate excuse to obey the subpoena. A
nonparty‟s failure to obey must be excused if the subpoena
purports to require the nonparty to attend or produce at a
place outside the limits of Rule 45(c)(3)(A)(ii).”
6
Rohn appealed to the District Judge, who affirmed the finding
of contempt without holding a hearing.
Ms. Rohn now argues on appeal that (1) the Magistrate
Judge lacked the statutory authority to enter the contempt
order and (2) the District Judge failed to conduct a de novo
hearing, as required by 28 U.S.C. § 636(e).
II. Jurisdiction
In our order granting Ms. Rohn‟s emergency motion
seeking to stay the payment of the attorney‟s fees, we directed
the parties to address the issue of this Court‟s jurisdiction,
specifically focusing on the “„congruence of interests‟
distinctions outlined in Cunningham v. Hamilton County,
Ohio, 527 U.S. 198, 199 and 211 (1999), and whether
Appellant should be treated as a party for purposes of this
appeal.”5
In Cunningham, the petitioner had served as counsel
for the plaintiff in a civil rights action in federal court.
5
The order also cited U.S. Catholic Conference v. Abortion
Rights Mobilization, Inc., 487 U.S. 72 (1988). There, the
Supreme Court held that nonparty witnesses could challenge
a court‟s lack of subject matter jurisdiction when defending
against a civil contempt action. Reasoning that “[t]he right of
a nonparty to appeal an adjudication of contempt cannot be
questioned,” the Court extrapolated that this right
encompassed the ability to challenge the court‟s jurisdiction.
Id. at 76-77.
7
Petitioner flouted several discovery orders entered by the
magistrate judge overseeing discovery, resulting in the
magistrate judge imposing sanctions against counsel, pursuant
to Fed. R. Civ. P. 37. The magistrate judge who imposed the
discovery sanctions against counsel “took care to specify,
however, that he had not held a contempt hearing and that
petitioner was never found to be in contempt of court.”
Cunningham, 527 U.S. at 201.
In justifying why immediate appeal should be
available to her, the petitioner “posit[ed] that contempt orders
imposed on witnesses who disobey discovery orders are
immediately appealable and argue[d] that the sanctions order
in this case should be treated no differently.” Id. at 206. The
Supreme Court acknowledged that “[t]he effective
congruence of interests between clients and attorneys
counsels against treating attorneys like other nonparties for
purposes of appeal.” Id. at 207. That is, “[u]nlike witnesses,
whose interests may differ substantially from the parties‟
[interests], attorneys assume an ethical obligation to serve
their clients‟ interests.” Id. at 206. The Supreme Court, in
criticizing the petitioner‟s position, noted that her “argument
also overlook[ed] the significant differences between a
finding of contempt and a Rule 37(a) sanctions order.” Id. at
207. That is, “„[c]ivil contempt is designed to force the
contemnor to comply with an order of the court,‟ [while] a
Rule 37(a) sanctions order lacks any prospective effect and is
not designed to compel compliance.” Id. (quoting Willy v.
Coastal Corp., 503 U.S. 131, 139 (1992)). “[W]e have
repeatedly held that a witness subject to a discovery order, but
not held in contempt, generally may not appeal the order.”
Id. at 204 n.4.
8
The Third Circuit has also commented on the
difference between orders entered pursuant to Rule 37(a) and
contempt orders,6 as well as the impact of the “congruence of
interests” between an attorney and client. E. Maico Distrib.,
Inc. v. Maico-Fahrzeugfabrik, G.m.b.H., 658 F.2d 944, 949-
50 (3d Cir. 1981). In E. Maico, we examined several orders,
one of which imposed sanctions against defendant‟s counsel
in response to a discovery dispute. This Court concluded that
the congruence of interests between the attorney and client
was “so great that [counsel‟s] status as a non-party is
arguable.” Id. at 950. That is, counsel‟s “interest in
counseling the motion was nearly identical with [the client‟s]
interest in making it and his interest can be vindicated
following judgment as well as [the client‟s] can.” Id. at 950-
51.
6
We have distinguished between sanctions orders entered
pursuant to Fed. R. Civ. P. 37(a) and other discovery
sanctions. E. Maico Distrib., Inc. v. Maico-Fahrzeugfabrik,
G.m.b.H., 658 F.2d 944 (3d Cir. 1981). There, we stated that
“[w]e note that other types of discovery sanctions against
non-parties may be appealed immediately even when imposed
against a party‟s attorney. But those sanctions are unlike
Rule 37(a) penalties in both purpose and effect, in ways
directly relevant to the reasons for permitting an immediate
appeal. In civil contempt proceedings or Rule 37(b) sanctions
against a non-party, even against an attorney to or an officer
of a party, an appeal generally need not wait until final
judgment in the case as a whole.” Id. at 949.
9
In light of the distinction drawn both by our Court and
the Supreme Court between sanctions imposed pursuant to
Rule 37 and a finding of contempt imposed pursuant to Rule
45, the Magistrate Judge‟s action in holding Ms. Rohn in
contempt pursuant to Rule 45 is significant regarding whether
we have jurisdiction over this case. Third Circuit law is clear
— non-party witnesses who are held in contempt may
immediately appeal the contempt order. In re Flat Glass
Antitrust Litig., 288 F.3d 83, 88 (3d Cir. 2002) (“[W]e have
held nonparty witnesses must be held in contempt before
seeking appellate review.”).7
We must now determine whether Ms. Rohn should be
treated as a party based on the congruence of her interest with
the interests of her clients in bringing the recusal motion. We
conclude, based on the facts of this case, that Ms. Rohn was
being subpoenaed as a witness, rather than in her capacity as
counsel to the movants. By submitting her declaration, along
with letters she authored, personal travel information, and
other personal information, unrelated to any of the cases
pending before the District Judge, Ms. Rohn made herself a
witness in the recusal matter. She placed her credibility at
issue. The subpoena sought information related to these
questions, which is unrelated to the merits of any of the seven
cases in which the recusal motions were filed.
7
Similarly, legal commentators have observed that “[f]inal
contempt adjudications, imposing sanctions, are deemed
appealable as final decisions in all situations other than that of
civil contempt against a party to a pending proceeding.” 15B
Wright & Miller, Federal Practice & Procedure § 3917.
10
In our view, Ms. Rohn was a nonparty witness when
the Magistrate Judge held her in contempt for failing to
comply with the requirements of the subpoena. Based on this
determination, we have jurisdiction to review the finding of
contempt.8
III. Analysis
Defendants moved, pursuant to Fed. R. Civ. P. 45, to
hold Ms. Rohn in contempt for failing to comply with the
subpoena. Acting upon this motion, the Magistrate Judge
held Ms. Rohn in contempt. Magistrate judges are granted
contempt authority by statute.9 28 U.S.C. § 636(e).10 Citing
8
Parenthetically, we note that our precedent in Lazy Oil Co.
v. WITCO Corp., 166 F.3d 581, 585-87 (3d Cir. 1999),
allows an additional basis to assert jurisdiction over this
appeal, given the fact that the District Judge denied the
recusal motion on September 8, 2011. In Lazy Oil, we
affirmed our prior precedent that authorized our jurisdiction
in cases where a premature notice of appeal subsequently
ripened into a valid notice of appeal when a final judgment
was entered before our consideration of the case. Id. at 585-
86.
9
We note that the contempt authority set forth in Fed. R. Civ.
P. 45(e) does not expand a magistrate judge‟s authority to
hold Ms. Rohn in contempt for failing to comply with the
subpoena.
10
Section 636(e)(6) provides in pertinent part that upon
commission of an act that constitutes civil contempt, where
the magistrate judge is not sitting pursuant to the consent
provisions of 28 U.S.C. § 636(c),
11
28 U.S.C. § 636(e)(7), 11 Ms. Rohn appealed the Magistrate
Judge‟s contempt finding to the District Judge, who, without
holding a hearing, issued an order denying the appeal and
affirming the order of contempt.
Though arising in a criminal, rather than civil context,
the actions of the magistrate judge and district judge in
Taberer v. Armstrong World Indus., Inc., 954 F.2d 888 (3d
Cir. 1992) closely track the actions of the judges in the case
before us. In Taberer, we clarified the scope and extent of a
the magistrate judge shall forthwith certify the
facts to a district judge and may serve or cause
to be served, upon any person whose behavior
is brought into question under this paragraph,
an order requiring such person to appear before
a district judge upon a day certain to show
cause why that person should not be adjudged
in contempt by reason of the facts so certified.
The district judge shall thereupon hear the
evidence as to the act or conduct complained of
and, if it is such as to warrant punishment,
punish such person in the same manner and to
the same extent as for a contempt committed
before a district judge.
28 U.S.C. § 636(e)(6).
11
Section 636(e)(7) provides that “[t]he appeal of an order of
contempt under this subsection shall be made to the court of
appeals in cases proceeding under subsection (c) of this
section. The appeal of any other order of contempt issued
under this section shall be made to the district court.”
12
magistrate judge‟s contempt authority. We noted that “under
the statute, the magistrate judge‟s certification of facts seems
designed to serve the function of a charging instrument or
pleading for a trial to be held before the district judge.” Id. at
903. We further distinguished between the requirements of
section 636(b)(1)(B) which authorizes magistrate judges to
conduct hearings and “submit to [a district judge] proposed
findings of fact and recommendations for the disposition, by
[a district judge], of any motion excepted in subparagraph
(A),” 28 U.S.C. § 636(b)(1)(B), and the certification
procedure set forth in section 636(e)(6).
In addition to the difference in the procedure, we noted
the different role the district judge plays in each of these
situations. With respect to section 636(b)(1)(B), a district
judge makes a de novo determination, while under section
636(e)(6), a district judge conducts a de novo hearing.
Taberer, 954 F.2d at 904. That is,
[a] de novo determination requires the district
judge to “consider the record which has been
developed before the magistrate and make his
own determination on the basis of that record,
without being bound to adopt the findings and
conclusions of the magistrate.” In contrast, a de
novo hearing entails a new proceeding at which
the decision is based solely on the evidence
freshly presented at the new proceeding.
Id. (internal citations omitted) (quoting H.R. REP. NO. 94-
1609, at 3 (1976), reprinted in 1976 U.S.C.C.A.N. 6163 and
citing United States v. Raddatz, 447 U.S. 667, 673-76
(1980)).
13
In the present case, concluding that Rule 45 authorized
him to do so, the Magistrate Judge entered an order granting
the motion seeking to hold Ms. Rohn in contempt. The
Magistrate Judge did not certify any facts to the District
Judge, nor did the Magistrate Judge enter an order requiring
Ms. Rohn to show cause before the District Judge why she
should not be held in contempt. Ms. Rohn appealed this
finding to the District Court, citing 28 U.S.C. § 636(e)(7).
The District Judge then entered an order, without holding a
hearing, affirming the Magistrate Judge‟s order.
This procedure by both the Magistrate Judge and
District Judge clearly violated the procedural requirements set
forth in 28 U.S.C. § 636(e)(6). First, the Magistrate Judge did
not certify the facts to the District Judge. Second, the District
Judge did not hold a hearing. Ms. Rohn‟s appeal, filed
pursuant to 28 U.S.C. § 636(e)(7), did not change the
procedural requirements of § 636(e)(6). Although Ms.
Rohn‟s § 636(e)(7) appeal may have also been filed in error
procedurally, the first violation of § 636(e)(6) precedes her
error and must be rectified.
The language of the statute makes it clear that appeals
authorized by § 636(e)(7) are only available from contempt
orders entered by a magistrate judge. The instances where a
magistrate judge may enter a contempt order are set forth in
§ 636(e)(2), (3), and (4). Specifically, § 636(e)(2) authorizes
a magistrate judge “to punish summarily by fine or
imprisonment, or both, such contempt of the authority of such
magistrate judge constituting misbehavior of any person in
the magistrate judge‟s presence so as to obstruct the
administration of justice.” Section 636(e)(3) extends this
criminal contempt authority to include “any case in which a
United States magistrate judge presides with the consent of
14
the parties under subsection (c) of this section, and in any
misdemeanor case proceeding before a magistrate judge
under section 3401 of title 18,” by granting the magistrate
judge “the power to punish, by fine or imprisonment, or both,
criminal contempt constituting disobedience or resistance to
the magistrate judge‟s lawful writ, process, order, rule,
decree, or command.” Finally, § 636(e)(4) authorizes a
magistrate judge to “exercise the civil contempt authority of
the district court” in civil cases where the magistrate judge is
presiding by consent of the parties pursuant to 28 U.S.C.
§ 636(c) or in criminal cases where the magistrate judge is
presiding pursuant to the authority of 18 U.S.C. § 3401.
The facts adduced here do not fall within the ambit of
§ 636(e)(2), (3), or (4). Therefore, the Magistrate Judge‟s
contempt order was invalid and the District Judge erred in
affirming the order.
In 2000, subsequent to our decision in Taberer,
Congress amended § 636(e). The amendments to § 636(e),
while expanding magistrate judges‟ contempt authority, did
not impact the certification procedure we addressed in
Taberer. That procedure continues to be required in this case.
The statute does not grant the Magistrate Judge the authority
to enter a contempt order since the action complained of did
not fall within the definitions set forth in 28 U.S.C. §
636(e)(2), (3), or (4). Ms. Rohn‟s actions occurred outside of
the Magistrate Judge‟s presence, and not in a proceeding
where the Magistrate Judge was presiding with the consent of
the parties pursuant to § 636(c). Instead, the Magistrate
Judge was overseeing pretrial proceedings, pursuant to §
636(b)(1)(A). Therefore, the Magistrate Judge should have
certified the facts of the alleged contempt to the District
15
Judge, who in turn should have held a hearing to determine
those facts.
IV. Conclusion
For the reasons set forth above, we find that we have
jurisdiction to hear this case. We will remand the case so that
the Magistrate Judge and District Judge can proceed in
accordance with the requirements of 28 U.S.C. § 636(e)(6).12
12
Ms. Rohn urges us to reverse and remand with instructions
that contempt is inappropriate based on the facts of the case.
Neither the Magistrate Judge nor the District Judge found any
facts with respect to Ms. Rohn‟s alleged contempt. As such,
there are no facts upon which we may base a decision. We
simply cannot say, based on the scant record, what the
ultimate resolution of this matter could or should be. We can
only remand in order for the District Court to follow the
certification procedure set forth in 28 U.S.C. § 636(e)(6).
16