United States District Court, E.D. Louisiana
INTERNATIONAL MARINE, L.L.C. ET AL
FDT, LLC, f/k/a DELTA TOWING, L.L.C., Section
ORDER AND REASONS ON MOTION
JOSEPH C. WILKINSON, Jr., Magistrate Judge.
This a maritime contract case in which the court has entered a judgment in favor of FDT, L.L.C., f/k/a Delta Towing, L.L.C. ("Delta"), against affiliated corporate entities, International Marine, L.L.C., and International Offshore Services, L.L.C. (jointly "International"), in the principal amount of $8.25 million. The total amount due to Delta from the two judgment creditors rises to about $12 million when previously awarded interest, attorney's fees and costs are added. International has failed to pay the judgment.
Delta has commenced judgment enforcement efforts, including a judgment debtor examination and document discovery pursuant to the court's order. Record Doc. No. 390. Delta's Motion for Contempt and Sanctions, Record Doc. No. 464, for International's alleged failure to comply with that order is currently pending before me. Plaintiff filed a timely opposition memorandum. Record Doc. No. 468. Defendant was granted leave to file a reply. Record Doc. Nos. 470, 471, 472.
Although its title refers exclusively to contempt and sanctions, Delta's motion also seeks other relief in the form of additional discovery in aid of judgment execution, including production of additional materials responsive to the order, compelled deposition testimony from additional witnesses and an award of attorney's fees and costs, payable by both the judgment debtors and their lawyers.
Having considered the record, the applicable law and the written submissions of counsel, IT IS ORDERED that the motion is GRANTED IN PART AND DENIED IN PART for the following reasons.
Fed. R. Civ. P. 69(a) provides that "[t]he procedure on [judgment] execution - and in proceedings supplementary to and in aid of judgment or execution - must accord with the procedure of the state where the court is located.... In aid of the judgment or execution, the judgment creditor or a successor in interest whose interest appears of record may obtain discovery from any person - including the judgment debtor - as provided in these [federal] rules [of civil procedure] or of the state where the court is located." (Emphasis added).
The judgment debtor examination is a judgment enforcement procedure authorized by La. Code Civ. P. arts. 2451-2456. Specifically, "[i]n aid of execution the judgment creditor may examine the judgment debtor, his books, papers, or documents, upon any matter relating to his property.... [T]he judgment creditor may also examine any person upon any matter relating to the judgment debtor's property...." La. Code Civ. P. art. 2451 (emphasis added). As Delta did in this case, "[o]n ex parte written motion of the judgment creditor, personally or through his attorney, the court shall order the judgment debtor to appear in court for examination at a time fixed by the court, ... and to produce any books, papers, and other documents relating to the judgment debtor's property described in the motion." Id . art. 2453. In addition, "[c]ourt costs in connection with the examination shall be taxed against the judgment debtor.... If... the judgment debtor refuses to appear for the examination or to produce his books, papers, or other documents when ordered to do so, or if he refuses to answer any question held pertinent by the court, the judgment debtor may be punished for contempt." Id . arts. 2455, 2456 (emphasis added).
As the leading commentators on federal procedure have outlined, in federal judgment enforcement proceedings like those in this case,
[a] judgment creditor may obtain discovery from any person, including the judgment debtor, in aid of the judgment or execution.... The judgment creditor is allowed discovery to find out about assets on which execution can issue or about assets that have been fraudulently transferred or are otherwise beyond the reach of execution.... As the Supreme Court has said [in Republic of Argentina v. NML Capital, Ltd., 134 S.Ct. 2250, 2254 (2014)], "[t]he rules governing discovery are quite perimissive [sic]." A judgment creditor may use the discovery devices provided in Civil Rules 26 to 37 or may obtain discovery in the manner provided by the practice of the state in which the district court is held. The scope of examination is very broad, as it must be if the procedure is to be of any value. Ordinarily third persons can be examined only about the assets of the judgment debtor... although probing questioning is allowed with regard to third parties with close ties to the judgment debtor.
12 C. Wright, A. Miller, M. Kane, R. Marcus & A. Steinman, Federal Practice and Procedure § 3014, text accompanying nn. 1-8 (and cases cited therein) (2d ed. 1997), on Westlaw at FPP § 3014 (updated Sept. 2014) (emphasis added) (hereinafter "Wright & Miller"). In federal judgement enforcement proceedings, "as is customary, the examination is made pursuant to [Federal] Civil Rules 26 to 37 rather than state practice." Id., text accompanying n.20 (and cases cited therein).
As to contempt, the United States Court of Appeals for the Fifth Circuit has stated that
[f]ederal courts have the inherent power to punish for contempt. Roadway Express, Inc. v. Piper, 447 U.S. 752, 764 (1980). The availability of that power promotes "the due and orderly administration of justice" and safeguards the court's authority. Id . (quoting Cooke v. United States, 267 U.S. 517, 539 (1925)). "Because inherent powers are shielded from direct democratic controls, " [however, ] the Supreme Court instructs that "they must be exercised with restraint and discretion." Id . Rather than stemming from a "broad reservoir, " they are "implied power[s, ] squeezed from the need to make the court function." Crowe v. Smith, 151 F.3d 217, 226 (5th Cir. 1998).
Hornbeck Offshore Servs., L.L.C. v. Salazar, 713 F.3d 787, 792 (5th Cir. 2013) (emphasis added).
The movant in a civil contempt proceeding bears the burden of establishing by clear and convincing evidence that: (1) a court order was in effect; (2) the order required certain conduct by the respondent; and (3) the respondent failed to comply with the court order. In the contempt context, "clear and convincing evidence" is that weight of proof which produces in the mind of the trier of fact a firm belief or conviction as to truth of the allegations sought to be established, evidence so clear, direct, weighty and ...