FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
UNITED STATES OF AMERICA, No. 19-55128
Plaintiff,
D.C. Nos.
and 2:04-cv-02788-
ABC-PLA
OPTIONAL CAPITAL, INC., AKA 2:04-cv-03386-
Optional Ventures, ABC-PLA
Claimant-Appellant, 2:05-cv-03910-
ABC-PLA
v.
OPINION
DAS CORPORATION,
Respondent-Appellee,
and
475 MARTIN LANE, BEVERLY HILLS,
CALIFORNIA, Real Property, Located
at, et.al.,
Defendants.
Appeal from the United States District Court
for the Central District of California
Virginia A. Phillips, Chief District Judge, Presiding
Argued and Submitted April 15, 2020
Pasadena, California
Filed November 19, 2021
2 OPTIONAL CAPITAL V. DAS CORPORATION
Before: Daniel P. Collins and Kenneth K. Lee, Circuit
Judges, and Gregory A. Presnell, * District Judge.
Opinion by Judge Collins
SUMMARY **
Contempt
The panel affirmed the district court's post-judgment
order denying Optional Capital, Inc.’s contempt motion on
the ground that a May 2013 judgment did not require DAS
Corporation to turn over $12.6 million to Optional.
At the end of a complex civil forfeiture proceeding that
was litigated for nearly nine years, Optional was left as the
sole remaining claimant. After the competing claimants,
including DAS, settled or were dismissed, Optional
submitted a 2013 proposed final judgment, which the district
court adopted, even though it could be construed as
effectively reversing a 2011 ruling in which DAS had
obtained a victory over Optional. Five years later, Optional
filed this action seeking to hold DAS in contempt for
allegedly violating the 2013 judgment simply because DAS
failed to do what the district court’s 2011 order explicitly
refused to order DAS to do. The district court discharged its
order to show cause, concluding that Optional failed to meet
*
The Honorable Gregory A. Presnell, United States District Judge
for the Middle District of Florida, sitting by designation.
**
This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
OPTIONAL CAPITAL V. DAS CORPORATION 3
its burden to show that DAS violated the 2013 final
judgment.
Optional contended that because the 2013 judgment
awarded it all funds in a Credit Suisse Account “as of
August 8, 2005” or “when the Government served its
warrant on or about August 8, 2005,” the judgment could
only be understood as extending to the entirety of the funds
that were in the account on that earlier date, including the
funds that had been transferred to DAS before the bench trial
in the matter. The panel concluded that the district court’s
use of the term “all funds” was ambiguous. Turning to the
record before the district court at the time it issued the
judgment, the panel concluded that Optional’s construction
of the judgment was incorrect. The panel held that the
district court at the 2013 trial did not have before it, and did
not undertake to decide, the competing claims of DAS and
Optional to the $12.6 million that DAS had received from
the Credit Suisse account in 2011. In awarding Optional “all
funds” from the account, the district court unmistakably was
referring only to the funds that were at issue at that point in
the trial, which did not include the $12.6 million that had
previously been transferred to DAS. The panel further held
that by construing the judgment as it did, the panel avoided
saddling it with other potential defects.
Because the 2013 judgment did not address Optional’s
and DAS’s competing rights to the funds DAS had received
from the Credit Suisse account in 2011, and did not award
those funds to Optional, DAS did not violate the judgment
by failing to turn over those funds to Optional. The district
court properly concluded that DAS could not be held in
contempt on this basis.
4 OPTIONAL CAPITAL V. DAS CORPORATION
COUNSEL
Ralph Rogari (argued), Rogari Law Firm P.C., Los Angeles,
California; Mary Lee, Law Offices of Mary Lee, Los
Angeles, California; for Claimant-Appellant.
Prashanth Chennakesavan (argued), James M. Lee, Joe H.
Tuffaha, and Kevin B. Kelly, LTL Attorneys LLP, Los
Angeles, California, for Respondent-Appellee.
OPINION
COLLINS, Circuit Judge:
We expect parties and their counsel to be vigorous in
pursuing and defending their interests in court, especially
when (as here) the other side behaves very badly. But even
then, sometimes litigation maneuvers can go too far. This is
such a case.
Towards the end of complex civil forfeiture proceedings
that had been vigorously litigated for nearly nine years,
Appellant Optional Capital, Inc. (“Optional”) was ultimately
left as the sole remaining claimant after the last set of
competing claimants settled with Optional in the midst of a
bench trial to fix the parties’ rights in the remaining res.
(Additional competing claimants had previously been
voluntarily or involuntarily dismissed, including DAS
Corporation (“DAS”).) Optional completed the remainder
of the then-uncontested bench trial, and it drafted and
presented to the district court in 2013 a proposed final
judgment. The literal terms of that proposed judgment,
taken out of context, could potentially be construed as
effectively reversing a 2011 ruling in which, prior to its
OPTIONAL CAPITAL V. DAS CORPORATION 5
departure from the case, DAS had obtained a significant
victory against Optional. The district court did not catch the
potential discrepancy, and it adopted the relevant language
without modification. Five years later, Optional instituted
the current proceedings in which it now seeks to exploit the
potential discrepancy: it seeks to hold DAS in contempt for
allegedly violating the 2013 judgment simply because DAS
failed to do what the district court’s 2011 order explicitly
refused to order DAS to do. Optional claims that, in
enforcing the judgment, the district court at this point could
not consider the 2011 order and that the court instead was
limited to examining only the four corners of the 2013
judgment and enforcing it in accordance with its literal
terms—even if that was directly contrary to the 2011 order.
The district court declined to go along with this remarkable
argument, and it instead construed the 2013 judgment in a
manner that rendered it consistent with the 2011 order. We
affirm.
I
We set forth at some length the complex history of this
bitter and protracted litigation, because it bears importantly
on the issues presented in this appeal.
A
Between 2004 and 2005, the United States filed a series
of three related forfeiture actions that were consolidated in
the district court and that all arose from alleged fraudulent
activities committed by Christopher Kim (“Kim”), “a United
States citizen working in South Korea,” and others working
in concert with him. United States v. Real Prop. Located at
475 Martin Lane (Real Prop. I), 545 F.3d 1134, 1139 (9th
Cir. 2008). The particular property at issue in this appeal
consists of “[a]ll funds in Credit Suisse Private Banking
6 OPTIONAL CAPITAL V. DAS CORPORATION
account no. 0251-844548-6 in the name of Alexandria
Investment, LLC,” a California corporation organized by
Kim’s sister, Erica Kim (the “Credit Suisse Account”).
According to the Government’s forfeiture complaint, the
more than $15 million in this account constituted, or were
derived from, proceeds of fraudulent activities involving
Kim’s management and control of Optional Ventures Korea,
Inc., whose successor is Optional. At the time it filed the
relevant complaint, the Government had already sent a
request in 2004 to Swiss authorities, pursuant to the
applicable Mutual Legal Assistance Treaty (“MLAT”), to
seize the Credit Suisse Account. On August 8, 2005, at the
Government’s request, the district court also ordered the
seizure and arrest of the Credit Suisse Account.
The putative owners of the various properties sought to
be forfeited—Kim, his sister Erica Kim, his wife Bora Lee,
his parents, First Stephora Avenue, Inc. (“First Stephora”),
and Alexandria Investments, LLC (“Alexandria”)
(collectively, “the Kim Claimants”)—contested the
forfeiture actions. Real Prop. I, 545 F.3d at 1139. Optional,
which by that time was no longer under control of the Kim
Claimants, filed competing claims to the property, as did
DAS, another South Korean company and an “alleged
corporate victim of Kim’s fraud.” Id.
In September 2005, the district court partially dismissed,
as untimely filed, the Government’s forfeiture proceedings
with respect to some of the properties (but not the Credit
Suisse Account), and the district court subsequently held
that, as a result, it “no longer had jurisdiction to adjudicate
competing claims to the dismissed properties.” Id. at 1140.
We reversed both rulings on appeal. Id. at 1141–47.
In March 2007, while that appeal remained pending and
undecided, the district court granted summary judgment to
OPTIONAL CAPITAL V. DAS CORPORATION 7
the Kim Claimants as to the Credit Suisse Account and the
other remaining properties in the forfeiture action,
concluding that the Government had failed to present
“admissible evidence that could support a finding that Kim
carried out the fraud and embezzlement scheme that the
Government describes” and that the evidence presented by
Optional and DAS in support of the Government’s position
was likewise inadequate. On appeal, we affirmed the district
court’s grant of summary judgment against the Government
and in favor of the Kim Claimants. United States v. Real
Prop. Located at 475 Martin Lane (Real Prop. II), 298 F.
App’x 545, 549 (9th Cir. 2008) (decided the same day as
Real Prop. I). We nonetheless rejected the Kim Claimants’
cross-appeal, which had sought to challenge the district
court’s assertion of jurisdiction over the Credit Suisse
Account. Id. at 551. As we explained, under United States
v. Approximately $1.67 Million, 513 F.3d 991 (9th Cir.
2008), “actual or constructive control over defendant
property located in a foreign country is not required” in order
to obtain in rem jurisdiction in a forfeiture action. Real
Prop. II, 298 F. App’x at 551.
During the proceedings on remand from our decisions in
Real Prop. I and Real Prop. II, the Government informed the
district court at a November 2008 status conference that, in
light of the dismissal of its claims, the Government was no
longer in a position to ask the Swiss Government to continue
to freeze the Credit Suisse Account pursuant to the earlier
MLAT request. The Government noted, however, that an
ongoing Swiss criminal investigation (which had been
triggered by a criminal complaint from DAS) might result in
the freeze continuing.
In October 2009, the district court granted motions filed
by the Kim Claimants and dismissed all claims asserted by
8 OPTIONAL CAPITAL V. DAS CORPORATION
DAS and Optional against the subject properties in the
forfeiture proceedings. United States v. DAS Corp., 406 F.
App’x 154, 157 (9th Cir. 2010). In December 2010, we
reversed those rulings as to DAS and Optional, concluding
that, notwithstanding the dismissal of the Government’s
forfeiture claims, the competing claims of DAS and Optional
had not been addressed or resolved by our prior rulings. Id.
at 159. We therefore remanded the case “for the district
court to adjudicate DAS’s and Optional’s claims against” the
properties that had been subject to the Government civil
forfeiture action, including the Credit Suisse Account. Id.
B
While the forfeiture action was ongoing, Optional and
DAS each took additional steps to secure their positions. In
2004, Optional sued its former directors—Kim, Erica Kim,
and Bora Lee—as well as First Stephora and Alexandria
(collectively, “the Kim Defendants”) in the Central District
of California, and that case was assigned to the same district
judge as the forfeiture proceedings. See Optional Cap., Inc.
v. Kim, 414 F. App’x 12, 13 (9th Cir. 2011). At the trial of
Optional’s suit against the Kim Defendants, a jury awarded
Optional (1) 37.1 billion South Korean won (around $31.8
million today) based on a claim for conversion; and (2) an
additional $31,000,000 (denominated in dollars), with half
of that amount resting on one of two fraud claims and the
other half resting on the other fraud claim. The district court,
however, granted the Kim Defendants’ motion for judgment
as a matter of law on all three claims. Id. On appeal, we
affirmed as to the fraud claims, but we reversed the grant of
judgment as a matter of law on the conversion claim and
directed the district court to reinstate the jury’s award of
37.1billion won. Id. at 15–16. The district court did so on
February 7, 2011.
OPTIONAL CAPITAL V. DAS CORPORATION 9
Meanwhile, in 2003, DAS sued Kim, Erica Kim, Bora
Lee, and others in California state court. See DAS Corp. v.
Kim, 2008 WL 4901097, at *1 (Cal. Ct. App. Nov. 12,
2008). 1 That action was dismissed on the pleadings, but the
California Court of Appeal partially reversed that dismissal
in 2008. Id. at *6. In 2007, DAS also filed a criminal
complaint in Switzerland against Kim for money laundering,
which (as noted earlier) led to the Swiss government’s
freezing of the Credit Suisse Account. In late 2010,
however, DAS confidentially reached a settlement with the
Kim-related parties. Pursuant to that settlement, DAS
dropped its California lawsuit and sought to withdraw its
Swiss money laundering criminal complaint. In response to
DAS’s request to withdraw that criminal complaint, and with
Alexandria’s consent, the Swiss Attorney General’s Office
on February 1, 2011 unfroze the Credit Suisse Account and
ordered the Swiss bank to wire $12.6 million from that
account to DAS’s account in Korea.
Remarkably, DAS did not initially inform the district
court (or Optional) that it had taken these steps. Instead, on
April 4, 2011, DAS filed a one-sentence “Notice of
Withdrawal of Claims” in the federal forfeiture proceedings
stating, without explanation, that it was withdrawing its
claims in those proceedings. The court only found out when,
after ordering the Government (even though a non-party) to
file a status report concerning the Credit Suisse Account, the
Government on April 11, 2011 informed the court that “its
undersigned counsel learned for the first time on April 8,
2011” that the Swiss authorities apparently had lifted the
freeze on the Credit Suisse Account and that funds may have
been released from the account “to whereabouts unknown.”
1
The state court decision erroneously refers to Erica Kim as Kim’s
wife and to Bora Lee as his sister. See 2008 WL 4901097, at *1 n.1.
10 OPTIONAL CAPITAL V. DAS CORPORATION
One week later DAS filed a court-ordered status report
disclosing for the first time that its California suit had been
dismissed, that the Swiss criminal proceeding had been
concluded, and that “certain funds” had been transferred
from the Credit Suisse Account “to an account of DAS.” In
response to this disclosure, the district court expressed its
understandable “dismay[]” that, despite the court’s retention
of in rem jurisdiction over the Credit Suisse Account, DAS
had been “silent on this crucial issue” until the court-ordered
reports had brought the matter to light. The court ordered
DAS to be prepared to “fully explain” the matter at the
upcoming May 2011 status conference, and it warned that, if
DAS did not do so, the court might, inter alia, hold DAS in
contempt and refer its counsel to the state bar.
After that status conference, the district court issued an
order stating that “no party is to interfere with or disturb
whatever monies remain in the Credit Suisse accounts,” and
it invited Optional to file appropriate motions “seeking
action from the Court with respect to the Credit Suisse
accounts and/or monies received by DAS” and “moving for
an order of contempt against parties and/or counsel based on
the developments in Switzerland.” The court also formally
requested that “the Government investigate the transaction
in Switzerland” by which the transfer to DAS had been
accomplished.
On May 16, 2011, Optional proceeded to file a motion
seeking to have DAS held in contempt for assertedly
violating prior orders of the court, and it simultaneously
moved to compel DAS to deposit with the clerk of court the
$12.6 million DAS had received. In a June 2011 order, the
district court denied both of Optional’s motions. As to the
contempt motion, the district court found that none of its
prior orders “were sufficiently specific or clear to support a
OPTIONAL CAPITAL V. DAS CORPORATION 11
finding of contempt.” Although DAS’s actions had
“disregarded the spirit” of a prior court order, the court could
not “say that DAS violated the letter of any order issued by
th[e] Court.” As to the motion to compel, the district court
noted that, despite its in rem jurisdiction, the court lacked
actual control over the account and that DAS had obtained
the funds through lawful “processes in Switzerland, the
jurisdiction that did have actual control over the accounts.”
In the absence of such control, the court concluded that it
“cannot compel DAS to surrender the funds.” The court
acknowledged that, as a technical matter, it still had
“jurisdiction to decide the competing claims” of DAS and
Optional, but it noted that DAS’s reduction of “the value of
the res” threatened “to render any such decision a merely
academic exercise.” Optional filed a petition for a writ of
mandamus challenging the district court’s June 2011 order,
but we denied the petition without comment.
In November 2011, the district court granted DAS’s
opposed motion to be dismissed from the forfeiture
proceedings. The court concluded that most of Optional’s
arguments against DAS’s dismissal had already been
rejected by the court in its June 2011 order: “As the Court
stated in that order, there appears to be no ground for
ordering DAS to surrender the funds to this Court’s custody
in light of the fact that DAS obtained those funds through
the legal process of an authority that had both jurisdiction
and actual control over the account from which they came”
and DAS’s conduct in doing so did not violate any court
order. The court explained that its task at this point was to
“adjudicate the remaining competing claims to the
property,” and it noted that DAS had withdrawn its claims
as to that remainder. The court concluded that, “[g]iven that
DAS has withdrawn its claims, and that the Court is not
going to order DAS to surrender the funds, DAS’s presence
12 OPTIONAL CAPITAL V. DAS CORPORATION
in this case is superfluous.” The court therefore dismissed
DAS from the forfeiture proceedings with prejudice.
Optional filed a notice of appeal challenging both the
November 2011 dismissal order and the June 2011 order
declining to order DAS to return the funds, but we dismissed
those appeals for lack of jurisdiction on the grounds that
there was no final judgment in the forfeiture proceedings.
C
In May 2012, Optional moved for summary judgment in
the forfeiture proceedings, asking the district court to reject
the competing claims of the Kim Claimants and to release to
Optional, inter alia, “all remaining funds” in the Credit
Suisse Account. The district court denied Optional’s
motions, as well as the Kim Claimants’ cross-motion,
concluding that neither Optional nor the Kim Claimants had
shown their entitlement to the properties as a matter of law.
On April 30, 2013, the case proceeded to a bench trial.
In its pretrial “Memorandum of Contentions of Law and
Fact,” Optional described all of the property at issue, and, as
to the Credit Suisse Account, it stated that “[t]he Claimants
to any money left in this account are Optional, [Christopher]
Kim and Bora Lee” (emphasis added). On the second day of
trial, Optional reached a sealed settlement with the Kim
Claimants. Under that settlement, Optional withdrew its
claims to certain property claimed by Kim’s parents, and the
Kim Claimants withdrew their claims as to all other
properties, including the Credit Suisse Account. In their
subsequently filed formal withdrawal, the Kim Claimants
stated that they withdrew their claims to, inter alia, “[a]ll
funds remaining” in the Credit Suisse Account (emphasis
added). After the settlement was placed on the record, the
district court allowed Optional to proceed to present
additional evidence “tracing the funds the Kim Claimants
OPTIONAL CAPITAL V. DAS CORPORATION 13
converted from Optional to the properties to which Optional
had outstanding claims.” Optional did so, and it rested on
the second day of trial.
Although Optional’s and the Kim Claimants’ papers had
made clear that the trial only involved the funds “left” or
“remaining” in the Credit Suisse Account, Optional’s post-
trial proposed findings of fact and proposed judgment
described the relevant property more vaguely as either “[a]ll
funds in Credit Suisse Private Banking Account No. 0251-
844548-6 in the name of Alexandria Investment, LLC when
the Government served its warrant on or about August 8,
2005” or “[a]ll funds in Credit Suisse Private Banking
Account No. 0251-844548-6 in the name of Alexandria
Investment, LLC as of August 8, 2005.” The only objections
to the proposed findings and judgment were filed by the
Government and a bank, but the district court rejected their
objections because the two objectors were only asserting
“liens” and not “claims.” On May 23, 2013, the court
entered its findings of fact and conclusions of law, holding
that, because Optional was “the only claimant” to the
properties at issue, “Optional is entitled to them by default”
(emphasis added). In both its findings and its final judgment,
the court followed verbatim Optional’s descriptions of the
Credit Suisse Account funds that were awarded to Optional.
The district court retained jurisdiction “for the purpose of
ensuring prompt and complete compliance.” No one filed
an appeal from the district court’s judgment.
D
In December 2011, shortly after DAS’s dismissal from
the civil forfeiture case, Optional sued DAS in California
superior court. As later amended, DAS’s complaint alleged
conversion, fraudulent transfer, and receipt of stolen
property with respect to the $12.6 million transferred from
14 OPTIONAL CAPITAL V. DAS CORPORATION
the Credit Suisse Account to DAS. See First Amended
Complaint, Optional Cap., Inc. v. DAS Corp., No.
BC474472, 2014 WL 12889308 (L.A. Super. Ct. Mar. 24,
2014). In 2016, Optional moved for summary adjudication
on its claims, asserting that, because the May 2013 judgment
in the federal forfeiture proceedings extended to “[a]ll funds
in Credit Suisse Private Banking Account No. 0251-844548-
6 in the name of Alexandria Investment, LLC as of August
8, 2005,” that judgment conclusively established that
Optional was entitled to the $12.6 million that DAS had
received from that account in February 2011. The state court
denied the motion. Noting that “at the time judgment was
entered, DAS was not a party to the forfeiture action” or “in
privity with any party,” the court concluded that Optional
had failed to establish “that the judgment in the forfeiture
action has any res judicata or collateral estoppel effect.”
The case proceeded to trial in 2019, and the jury issued
a verdict for DAS as to Optional’s conversion and fraudulent
transfer claims, but it awarded Optional $2 million on its
claim that DAS had received stolen property from
Alexandria. See Optional Cap., Inc. v. DAS Corp., 2021 WL
5176215, at *5–6 (Cal. Ct. App. Nov. 8, 2021). As to the
stolen-property claim, the California Court of Appeal
reversed and directed entry of judgment for DAS,
concluding that there was “no evidence that DAS knew that
all the funds in Alexandria’s Swiss account belonged to
Optional.” Id. at *8. The state appellate court rejected
Optional’s reliance on the May 2013 judgment in the federal
forfeiture proceedings, holding (inter alia) that a “fair
reading of the 2013 judgment is that notwithstanding the
court’s reference to funds in the Swiss account ‘as of’ 2005,
the judgment included only funds currently in the account,
i.e., as of 2013.” Id. at *9 (emphasis added).
OPTIONAL CAPITAL V. DAS CORPORATION 15
E
On July 23, 2018, more than five years after the May
2013 forfeiture judgment was entered, Optional filed an
application with the district court for an order directing DAS
to show cause why it should not be held in contempt for
failing to comply with that judgment’s asserted requirement
to deliver to Optional the $12.6 million DAS obtained from
the Credit Suisse Account. The case had by then been
reassigned to a new district judge, and the court issued an
order to show cause and set a briefing schedule. After
receiving that briefing, the district court on December 28,
2018 discharged the order to show cause, concluding that
Optional had “failed to meet its burden to show that DAS
violated the Court’s May 23, 2013 final Judgment.”
In reaching that conclusion, the district court held that
the terms of the May 2013 judgment should be evaluated in
the context of the forfeiture proceedings. Although DAS
asked the court to take judicial notice of a number of
documents from the forfeiture case and other related
proceedings, the court took judicial notice only of the May
2013 judgment, the June 2011 order, and the transcript of the
May 2011 status conference. Noting that the June 2011
order had specifically declined to require DAS to deposit the
$12.6 million with the court, the district court held that,
“based on the plain reading of the Judgment,” the May 2013
judgment “did not require DAS to return any funds it
received from the Credit Suisse account in 2011.”
Optional’s contrary reading, the court concluded,
“require[d] a tortured reading” of the 2013 judgment. The
court also concluded that, because the transferred funds were
no longer in the Credit Suisse Account at the time of the
2013 judgment, it was unreasonable to read the judgment as
extending to those funds. Accordingly, the court discharged
16 OPTIONAL CAPITAL V. DAS CORPORATION
the order to show cause and declined to hold DAS in
contempt. The court also denied Optional’s subsequent
motion for reconsideration.
Optional timely appealed, and we have jurisdiction under
28 U.S.C. § 1291. See Sanders v. Monsanto Co., 574 F.2d
198, 199 (5th Cir. 1978) (“[I]f a motion for civil contempt is
denied after the entry of the judgment which was the subject
of the contempt, the denial is final and reviewable because
no further district court action is necessary to give life to the
denial.”); see also Sportmart, Inc. v. Wolverine World Wide,
Inc., 601 F.2d 313, 316 (7th Cir. 1979) (similar);
Stringfellow v. Haines, 309 F.2d 910, 911 (2d Cir. 1962)
(similar); cf. Shuffler v. Heritage Bank, 720 F.2d 1141, 1145
(9th Cir. 1983) (“Where the contempt proceeding is the sole
proceeding before the district court, an order of civil
contempt finding a party in contempt of a prior final
judgment and imposing sanctions is a final decision under
section 1291.”).
II
Civil contempt “consists of a party’s disobedience to a
specific and definite court order by failure to take all
reasonable steps within the party’s power to comply.” In re
Dual-Deck Video Cassette Recorder Antitrust Litig., 10 F.3d
693, 695 (9th Cir. 1993). To succeed on its request to hold
DAS in civil contempt, Optional was required to show, by
“‘clear and convincing evidence,’” that (1) DAS had
violated the terms of the May 2013 judgment; (2) that DAS’s
conduct went beyond the sort of technical violation that
would be consistent with “‘substantial compliance’”; and
(3) that DAS’s violation was “‘not based on a good faith and
reasonable interpretation of the order.’” Labor/Cmty.
Strategy Ctr. v. L.A. Cnty. Metro. Transp. Auth., 564 F.3d
1115, 1123 (9th Cir. 2009) (quoting In re Dual Deck Video
OPTIONAL CAPITAL V. DAS CORPORATION 17
Recorder Antitrust Litig., 10 F.3d at 695). The district court
determined at the first prong that DAS did not violate the
May 2013 judgment because “the Judgment did not require
DAS to return any funds it received from the Credit Suisse
account in 2011.” Although we ordinarily review a district
court’s decision to deny a motion for contempt for abuse of
discretion, Hallett v. Morgan, 296 F.3d 732, 749 (9th Cir.
2002), a “district court by definition abuses its discretion
when it makes an error of law,” Koon v. United States,
518 U.S. 81, 100 (1996), and the interpretation of a judgment
presents a question of law that we review de novo. See
Lowenschuss v. Selnick (In re Lowenschuss), 170 F.3d 923,
929 (9th Cir. 1999); SEC v. United Fin. Grp., 576 F.2d 217,
222 (9th Cir. 1978). Accordingly, we review de novo
whether the district court properly denied Optional’s
contempt motion on the ground that the May 2013 judgment
did not require DAS to turn over the $12.6 million to
Optional. We hold that the court did not err.
A
When construing a judgment, we look to the “natural
reading of its text.” Ruiz v. Snohomish Cnty. Pub. Util. Dist.
No. 1, 824 F.3d 1161, 1167 (9th Cir. 2016). “If the judgment
is unambiguous, the court may not consider ‘extraneous’
evidence to explain it.” Narramore v. United States,
852 F.2d 485, 490 (9th Cir. 1988) (quoting Gila Valley
Irrigation Dist. v. United States, 118 F.2d 507, 510 (9th Cir.
1941)). Invoking these principles, Optional contends that
because the May 2013 judgment awards it “[a]ll funds” in
the Credit Suisse Account “as of August 8, 2005” or “when
the Government served its warrant on or about August 8,
2005,” the judgment can only be understood as extending to
the entirety of the funds that were in the account on that
18 OPTIONAL CAPITAL V. DAS CORPORATION
earlier date, including the funds that had been transferred to
DAS before the bench trial in the matter. We disagree.
As the judgment reflects, the “August 8, 2005” limitation
is significant because it fixes the discrete pool of funds that
were the subject of the Government’s “warrant” in
connection with its forfeiture complaint. Those particular
funds residing in that account on that date were alleged
proceeds of fraudulent activity, according to the
Government, and funds not in that account as of that date
were not at issue. But when, eight years after the
Government’s original warrant, the language of the district
court’s judgment indiscriminately awarded Optional “all”
such funds, was it referring to “all” of the funds from that
pool that were then at issue, “all” of the funds then in that
pool, or all of the funds originally in that pool (even if they
were no longer in the account)? Optional thinks that the
mere use of the word “all,” coupled with the August 8, 2005
date unambiguously settles this issue in favor of the third
option, but that is wrong. On its face, the judgment contains
an express recital that its award of property rights rests on
the “claims” that “were tried” by the court, and that crucial
reference makes it at least equally plausible—if not more
plausible—to construe the ensuing award of “all” such funds
as referring only to those funds at issue in the referenced
trial. The resulting ambiguity in the use of the term “all
funds,” in the context of this judgment, is underscored by the
fact that, in contrast to the judgment’s more generic
description of this one item concerning the Credit Suisse
Account, every other item of property awarded by the
judgment uses highly specific descriptions that include exact
dollar amounts or that otherwise describe physical items of
property with notable particularity (e.g., providing exact
VIN numbers for vehicles).
OPTIONAL CAPITAL V. DAS CORPORATION 19
Because we conclude that the judgment is ambiguous in
this respect, our obligation is to “‘construe [the] judgment so
as to give effect to the intention of the issuing court,’”
considering “‘the entire record before the issuing court,’”
including “‘findings of fact.’” Ruiz, 824 F.3d at 1167
(quoting Muckleshoot Tribe v. Lummi Indian Tribe, 141 F.3d
1355, 1359 (9th Cir. 1998)). Because the inquiry focuses on
“the intention of the court as expressed in the decree,” we do
not consider any evidence that is extrinsic to the record
before that court. Gila Valley, 118 F.2d at 510 (extrinsic
evidence concerning negotiation of consent decree could not
be considered); cf. Narramore, 852 F.2d at 490–91 (extrinsic
evidence, outside the original record, may be received in
evaluating whether a party’s subsequent actions differ from
what was contemplated by the decree). Turning to the record
before the district court at the time it issued the judgment,
we have little difficulty concluding that Optional’s
construction of the judgment is incorrect.
In contending that the May 2013 judgment should be
construed to extend to the $12.6 million that DAS received
from the Credit Suisse Account in February 2011, Optional
relies heavily on the fact that, in defending against
Optional’s May 2011 contempt motion, DAS told the district
court that the transfer of funds did not divest the court “of in
rem jurisdiction” over the funds and did not affect the court’s
ability to “decide the claims before it.” DAS’s position at
that time was that the district court could proceed to
adjudicate the parties’ competing claims of ownership, but
that the court continued to lack control over the funds and
therefore lacked authority to order the funds to be transferred
to the U.S. The problem with Optional’s reliance on these
May 2011 comments is that the record of the subsequent
proceedings makes unambiguously clear that the district
20 OPTIONAL CAPITAL V. DAS CORPORATION
court did not undertake to decide the parties’ competing
ownership interests in the $12.6 million.
In particular, Optional overlooks what the district court
did when it ruled on DAS’s November 2011 motion to be
dismissed from the forfeiture proceedings. The district court
expressly acknowledged that, in opposing that motion,
Optional “argue[d] that because DAS obtained funds from
the seized Swiss account, DAS should be kept in the case”
so that the court could “adjudicate the remaining claims over
the res now in DAS’s custody” (emphasis added). However,
the court rejected these arguments, stating that it had already
held that there was “no ground for ordering DAS to
surrender the funds,” and it reiterated in no uncertain terms
that it was “not going to order DAS to surrender the funds.”
In response to Optional’s argument that “the Ninth Circuit
mandate” in U.S. v. DAS Corp. “order[ed] the Court to
adjudicate competing claims to the property,” the district
court concluded that it could “still adjudicate the remaining
competing claims to the property even though the value of
the account has been diminished.” Thus, while the court
acknowledged that it theoretically had “jurisdiction” to
decide the parties’ competing claims to the $12.6 million that
had been transferred to DAS from the Credit Suisse Account,
the court made clear that it was not going to decide that issue.
Given that DAS had formally withdrawn its claims to the
remaining res, there was “no reason why DAS must remain
in this case,” and the court therefore dismissed DAS from
the forfeiture proceedings.
Thereafter, the remaining parties to the forfeiture
proceedings, including Optional, proceeded on the same
basis. When Optional moved for summary judgment against
the Kim Claimants in May 2012, it asked the court to reject
their claims to “all remaining funds in Credit Suisse Private
OPTIONAL CAPITAL V. DAS CORPORATION 21
Banking Account 0251-844548-6” (emphasis added). And
after summary judgment was denied and the case proceeded
to trial, Optional’s trial brief explicitly stated that what was
at issue in that trial was “any money left in this account”
(emphasis added).
Given this record, it is quite clear that the district court
at the 2013 trial did not have before it, and did not undertake
to decide, the competing claims of DAS and Optional to the
$12.6 million that DAS had received from the Credit Suisse
Account in 2011. In awarding Optional “all funds” from that
account, the district court unmistakably was referring only
to the funds that were at issue at that point in the trial, which
did not include the $12.6 million that had previously been
transferred to DAS.
B
If we had any residual doubt on this point—and we do
not—we would be compelled to construe the judgment the
same way in order to preserve its validity. See 46 AM. JUR.
2D JUDGMENTS § 67 (2021) (“In construing a judgment, it
may be presumed that the court intended to render a valid,
and not a void, judgment.”). Had the district court
undertaken to decide DAS’s rights to the $12.6 million after
DAS was no longer a party to the proceedings—as Optional
contends—that would have raised serious due process
concerns that would cast doubt on the judgment’s validity
and enforceability. Cf. Taylor v. Sturgell, 553 U.S. 880, 892
(2008) (“A person who was not a party to a suit generally
has not had a ‘full and fair opportunity to litigate’ the claims
and issues settled in that suit.” (citation omitted)).
Moreover, were we to agree with Optional that (1) by
adopting Optional’s wording of the res at issue in its
judgment and findings, the district court thereby must be
understood as having adjudicated the competing rights of
22 OPTIONAL CAPITAL V. DAS CORPORATION
DAS and Optional to the $12.6 million, and (2) the
overwhelming contrary evidence in the record must be
disregarded because it is not within the four corners of the
judgment, we would be upholding a judgment as to which
there was at least a substantial question whether it was
procured by a fraud on the district court. 2 Cf. Chambers v.
NASCO, Inc., 501 U.S. 32, 44 (1991) (stating that a court’s
“inherent power . . . allows a federal court to vacate its own
judgment upon proof that a fraud has been perpetrated upon
the court”). By construing the judgment as we have done,
we avoid saddling it with these potential defects.
III
Because the May 2013 judgment did not address
Optional’s and DAS’s competing rights to the funds DAS
had received from the Credit Suisse Account in 2011, and
did not award those funds to Optional, DAS did not violate
that judgment by failing to turn over those funds to Optional.
The district court therefore properly concluded that DAS
could not be held in contempt on this basis. In reaching this
conclusion, we have not been called upon to address, and
have not addressed, any question concerning whether the
various orders that merged into the May 2013 judgment were
2
We do not decide whether any such fraud on the court did or did
not occur. We merely observe that, given the significant contradiction
between the district court’s pretrial rulings and what Optional now
contends is the meaning of the judgment, a substantial question would
be raised as to whether Optional intentionally submitted a proposed
judgment that could potentially mislead the court into unwittingly
adopting language that was contrary to its prior rulings. Where, as here,
an alternative reading of the judgment is available that avoids raising that
sort of serious question as to the judgment’s validity, we should and do
adopt that construction.
OPTIONAL CAPITAL V. DAS CORPORATION 23
or were not correct. As noted earlier, that judgment was
never appealed, and no such issue is before us.
AFFIRMED.