UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
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GUANTANAMERA CIGAR CO., )
Plaintiff, )
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v. ) Civil Action No. 08-721 (RCL)
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CORPORACION HABANOS, S.A., )
Defendant. )
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_______________________________________)
MEMORANDUM AND ORDER
On August 5, 2010, this Court ordered, inter alia, that plaintiff show cause within ten
days of the order “as to why it should not be held in civil contempt for violating the Court’s
order [71] Dec. 10, 2009.” (Order at 1, Aug. 5, 2010, ECF No. 136.) Plaintiff filed its response to
the Court’s order on August 16 (ECF No. 138), and defendant replied to plaintiff’s response on
September 2 (ECF No. 141).
This show cause order stemmed from two pending motions: (1) Plaintiff’s Motion for
Enlargement of Time to Comply with the Court’s December 10, 2009 Order, or Aletrnatively
[sic] Relief from and Modification of the Order (Apr. 1, 2010, ECF No. 82), and (2) Defendant’s
Motion for Civil Contempt and for Sanctions (Apr. 9, 2010, ECF No. 107).
Upon consideration of Defendant’s Motion for Civil Contempt and for Sanctions (ECF
No. 107), the opposition thereto (ECF No. 112), and the reply brief (Notice of Filing, ECF No.
121), the Court will grant the motion for the reasons stated below.
Upon consideration of Plaintiff’s Motion for Enlargement of Time to Comply with the
Court’s December 10, 2009 Order, or Aletrnatively [sic] Relief from and Modification of the
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Order (ECF No. 82); the opposition thereto (ECF No. 107), and reply brief (ECF No. 112), the
Court will deny the motion for the reasons stated below.
Based upon the representations in all of these motions, and both parties’ responses to the
Court’s show cause order, the Court will hold plaintiff in civil contempt and order plaintiff to
pay the remaining balance of the sanction forthwith. Furthermore, if plaintiff does not file proof
of compliance with this order in thirty days, the Court will dismiss this case and vacate its
previous summary judgment order (ECF No. 136).
I. BACKGROUND
The Court set out the facts of this case in more detail in its August 5 order, so the Court
will repeat only the relevant facts here. On August 18, 2009, the Court granted defendant’s
Motion to Preclude, to Compel and for Sanctions (ECF No. 19), ordering plaintiff to pay
“defendant’s reasonable expenses for depositions of up to 15 of the listed witnesses, up to $500
per deposition,” and to “pay defendant’s reasonable attorney’s fees and costs for bringing this
motion.” (Order at 2–3, Aug. 18, 2009, ECF No. 49.) The Court later ordered that reasonable
attorney’s fees consisted of “$16,615.00 plus $439.79 in expenses,” thus totaling $17,054.79.
(Order at 1, Dec. 10, 2009, ECF No. 71.) The Court conditioned payment on approval by the
Office of Foreign Assets Control of the United States Department of Treasury (OFAC) and set
the deadline for payment at thirty days after the defendant filed notice of OFAC approval. (Id.)
Defendant filed notice of OFAC’s approval on March 1, 2010, giving the plaintiff until March
31, 2010, to tender payment. (Def.’s Notice at 1, Mar. 1, 2010, ECF No. 78.) In this notice,
defendant indicated that plaintiff was also responsible for payment of $1,000 for the costs
associated with two depositions. (Id. at 2.) In total, plaintiff was thus responsible for paying
$18,054.79 to defendant.
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On March 31, defendant’s counsel received a personal check from plaintiff’s counsel in
the amount of $5,000. (Def.’s Mot. for Civil Contempt at 5, Apr. 9, 2010, ECF No. 107.) On
April 1, plaintiff filed a Motion for Enlargement of Time to Comply with the Court’s December
10, 2009 Order, or Aletrnatively [sic] Relief from and Modification of the Order. (Apr. 1, 2010,
ECF No. 82.) The motion proposed a payment plan consisting of four equal monthly payments
of $2,600 and a final payment of $2,654.79, which would pay off the remaining $13,054.79
balance. (Id. at 2.) On April 9, defendant filed a Motion for Civil Contempt and for Sanctions.
(Apr. 9, 2010, ECF No. 107.)
Since this time, despite tailoring a custom payment plan, plaintiff has failed to make any
monthly payments. (Def.’s Reply Mem. Supp. Mot. Civil Contempt at 2.) In its Court-ordered
response, plaintiff now concedes its failure to make any payments and proposes a new payment
plan, which would consist of payments of “the remaining balance in 10 equal monthly
installments with the first one being September 1, 2010.” (Aug. 18, 2010, ECF No. 138.) In its
September 2 filing, defendant did not indicate whether plaintiff had paid the promised September
1 installment. (Def.’s Opp’n, Sept. 2, 2010, ECF No. 141.) In the absence of any filings
indicating that plaintiff has begun making payments, the Court must assume that plaintiff has not
yet made a payment. Furthermore, on October 18, counsel for defendant orally confirmed that
plaintiff has not made a payment since March.
II. LEGAL STANDARD
“[C]ourts have the inherent power to enforce compliance with their lawful orders through
civil contempt.” Shillitani v. United States, 384 U.S. 364, 370 (1966); see also Broderick v.
Donaldson, 437 F.3d 1226, 1234 (D.C. Cir. 2006). This power is “essential to the enforcement of
the judgments [and] orders . . . of the courts,” Broderick, 437 F.3d at 1234 (citations omitted),
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and it includes enforcement of Court-imposed deadlines, In re Fannie Mae Sec. Litig., 552 F.3d
814, 823 (D.C. Cir. 2009).
The sole purpose of civil contempt sanctions is to “coerce compliance or compensate a
complainant for losses sustained,” not to punish. Fannie Mae, 552 F.3d at 823. “Although one
may be held in civil contempt for refusing to comply with a court order, a sanction for one’s past
failure to comply with an order is criminal in nature.” Cobell v. Norton, 334 F.3d 1128, 1146–47
(D.C. Cir. 2003).
To satisfy the requirements of contempt, the contemnor must have “violated an order that
is clear and unambiguous,” and the movant must prove the violation “by clear and convincing
evidence.” Broderick, 437 F.3d at 1234. “[C]ontempt may be inappropriate when a party in good
faith substantially complies with a court order.” Fannie Mae at 822.
A court has the “inherent power to protect its integrity and prevent abuses of the judicial
process,” including “the use of dismissal or default judgment as a sanction for misconduct.”
Webb v. Dist. of Columbia, 146 F.3d 964, 971 (D.C. Cir. 1998) (citations omitted). There are
three justifications for this use of a dismissal:
First the court may decide that the errant party’s behavior has severely hampered the
other party’s ability to present his case—in other words, that the other party has been so
prejudiced by the misconduct that it would be unfair to require him to proceed further in
the case. Second, the court may take account of the prejudice caused to the judicial
system when the party’s misconduct has put an intolerable burden on a district court by
requiring the court to modify its own docket and operations in order to accommodate the
delay. And finally, the court may consider the need to sanction conduct that is
disrespectful to the court and to deter similar misconduct in the future.
Id. (citing Shea v. Donohoe Constr. Co., 795 F.2d 1071 (D.C. Cir. 1986)). A dismissal or default
judgment must be “a sanction of last resort, to be used only when less onerous methods . . . will
be ineffective or obviously futile.” Id. (citations omitted). Before dismissing a case, a court must
“fully consider[] whether harm caused by a party’s misconduct may be rectified by sanctions
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short of default” or dismissal. Id. at 972. The court must consider dismissal “under the
framework set out in Shea.” Id.
III. ANALYSIS
The Court noted previously that “it is concerned that the plaintiff—the architect of the
payment plan—has not made one progress payment to date.” (Mem. Opp. at 11, Aug. 5, 2010,
ECF No. 137.) Plaintiff has done nothing to alleviate that concern. In its response to the Court’s
show cause order, plaintiff agrees that it has not made a single payment. (Pl.’s Resp. at 1.)
Because plaintiff fully agrees, defendant has proven the violation by clear and convincing
evidence. Furthermore, because it has not made a payment other than the $5,000 payment in
March, plaintiff has not “substantially” complied with the Court’s order.
Plaintiff proposes a new schedule of payments, but the Court is not convinced that
plaintiff will comply with that schedule. First, plaintiff’s previous failure to pay in this case leads
the Court to believe that plaintiff will not pay in the future. Defendant has not alleged any change
of circumstances that would facilitate payment of the sanction in the future. Second, plaintiff is
not very reassuring when it anticipates the (albeit “highly unlikely”) possibility that the checks
that it provides to defendant may not clear. (Id. at 13.)
Plaintiff’s primary concern is that it simply does not have the money to pay this sanction
in one payment. Although the Court sympathizes with this concern, plaintiff has had ample time
and opportunity to find the funds to pay this sanction. Plaintiff originally had warning of this
sanction in August 2009, and the Court confirmed the exact amount of the sanction in December
2009. This Court’s order was both clear and unambiguous. Plaintiff then moved for an extension
of time to repay the sanction at the beginning of April 2010, promising that the money would be
paid in full by August 31, 2010. Defendant failed to comply with this proposal. Thus, despite
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plaintiff’s full knowledge for more than a year that this money was due, plaintiff still claims an
inability to find funds. The Court cannot wait any longer for plaintiff to find the funds, so
plaintiff must pay the remaining balance forthwith. The Court will hold plaintiff in civil
contempt of Court until it has paid the sanction in full.
Furthermore, if plaintiff does not pay the remaining sanction in thirty days, the Court will
vacate its prior summary judgment order (ECF No. 136) and order the case dismissed. Applying
the framework set forth in Shea and Webb, the Court finds that dismissal will be proper under the
first and third justifications set forth in Webb. 146 F.3d at 971. First, plaintiff’s “behavior has
severely hampered [defendant’s] ability to present his case.” See id. It is unfair to defendant if
plaintiff selectively follows this Court’s orders. Plaintiff cannot enjoy the benefit of this Court’s
order granting summary judgment to plaintiff and denying summary judgment to defendant,
while also ignoring the detriment of this Court’s order granting sanctions to defendant. Second,
dismissal is necessary “to sanction conduct that is disrespectful to the court and to deter similar
misconduct in the future.” See id. Although dismissal is a sanction of last resort, it is proper here.
First, the Court imposed a sanction on plaintiff. Now, plaintiff is in civil contempt of Court, and
the Court has threatened plaintiff with dismissal. Hopefully, that civil contempt sanction and
threat of dismissal will enforce compliance. But if it does not, then it will be clear that less
onerous sanctions are futile and that plaintiff’s misconduct cannot be rectified by a sanction short
of dismissal. See id. at 972. Plaintiff’s failure to follow this Court’s order is disrespectful,
particularly in light of the fact that plaintiff knew about the sanction more than a year ago and
has had ample opportunity to pay it.
IV. CONCLUSION
Accordingly, for the reasons stated above, it is hereby
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ORDERED that Defendant’s Motion for Civil Contempt and for Sanctions is
GRANTED; and it is furthermore
ORDERED that Plaintiff’s Motion for Enlargement of Time to Comply with the Court’s
December 10, 2009 Order, or Aletrnatively [sic] Relief from and Modification of the Order is
DENIED; and it is furthermore
ORDERED that the Court holds plaintiff Guantanamera Cigar Co. in civil contempt of
Court; and it is furthermore
ORDERED that plaintiff will remain in contempt of Court until the $18,054.79 sanction
is paid in full; and it is furthermore
ORDERED that plaintiff pay the remaining $13,054.79 sanction forthwith; and it is
furthermore
ORDERED that plaintiff must show proof of compliance with this order within thirty
days, proving that it has paid the remaining sanction in full. If plaintiff fails to file this proof of
compliance within thirty days, the Court will dismiss plaintiff’s case and vacate its previous
order granting summary judgment to plaintiff and denying summary judgment to defendant.
SO ORDERED.
Signed by Royce C. Lamberth, Chief Judge, on November 5, 2010.
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Guantanamera Cigar Co. v. Corporacion Habanos, S.A.
Combined Opinion