United States Court of Appeals,
Fifth Circuit.
No. 93-1890.
FEDERAL DEPOSIT INSURANCE CORPORATION, as Receiver of Empire
Savings and Loan Association, Plaintiff-Appellee,
v.
Nora P. LeGRAND, et al., Defendants,
Andrew M. Roughton, Defendant-Appellant.
Jan. 26, 1995.
Appeal from United States District Court for the Northern District
of Texas.
Before GARWOOD, JOLLY and STEWART, Circuit Judges.
STEWART, Circuit Judge:
This case involves an appeal from an order of contempt
resulting from Andrew Roughton's failure to comply with a
postjudgment discovery order compelling the production of his
federal income tax returns. We affirm the civil portion of the
contempt order and vacate the criminal portion of the order.
Background
On July 18, 1991, the Federal Deposit Insurance Corporation
(FDIC) obtained a final judgment against defendants LeGrand and
Roughton in the amount of $846,879.59, plus $1,085,444.30 in
interest, plus $8,585.59 in attorney's fees. The judgment was
later amended on September 6, 1991, to provide for an additional
$81,589.92 in interest the FDIC had left out of the original
judgment. When post-judgment discovery disputes arose over the
production of Roughton's federal income tax returns for the years
1
1989, 1990, and 1991, Roughton filed a motion for protective order,
seeking in camera review of his federal income tax returns and a
ruling that FDIC not be permitted to obtain copies of the returns
or to inquire into their contents. Alternatively, Roughton sought
a confidentiality order prohibiting FDIC from disseminating the
returns or any information therein to third persons except as
required for the collection of the judgment against Roughton. The
FDIC also filed a motion to compel production of the returns. The
matter was referred to the federal magistrate. The magistrate
issued an order compelling disclosure of Roughton's income tax
returns to counsel for FDIC within ten days.1 Each party applied
to the district judge for relief from this order; both parties'
motions were denied on March 22, 1993.
On May 28, 1993, the FDIC filed its Motion for Contempt. The
matter was referred to the magistrate by the district judge.
Roughton objected to the reference, claiming that the magistrate
was without authority to conduct a hearing on the motion for
contempt because such power is not vested in a magistrate under the
1
The magistrate ruled that only the returns filed by
Roughton individually or jointly with his spouse Priscilla
Roughton were to be produced. Roughton's primary objection to
producing the returns was that they contained information
relating to his wife's separate income or property. The
magistrate addressed this concern in his order, noting that
Priscilla Roughton's separate returns, if any, would not have to
be produced. Additionally, the magistrate issued a
confidentiality order providing that, for any returns Roughton
filed jointly with his wife, disclosure of the contents of the
jointly-filed returns was to be limited to FDIC and its counsel
and experts.
2
Federal Magistrates Act.2 The magistrate conducted a hearing on
May 28, 1993, and issued a Report and Recommendation3 in which he
made numerous findings of fact, including generally that Roughton
had been ordered to produce the tax returns, but that he had not
done so, nor had he proffered the returns to the magistrate or
offered any evidence demonstrating his inability to comply with the
order, despite threats by FDIC that it would file a motion for
contempt if the returns were not produced. The magistrate's
recommendation stated as follows:
It is recommended that the District Court enter its order
directing Defendant Andrew M. Roughton to appear forthwith
before the District Court to show cause why he should not be
held in civil contempt for his failure to comply with the
order of the magistrate judge filed on February 24, 1993, and
in the event that Defendant fails to show cause for his
failure to comply or to produce at the hearing the subject tax
returns that the District Court hold him in civil contempt and
order that he be confined in a jail-type institution until he
purge [sic] himself of his contempt by producing his federal
tax returns, previously ordered, and by tendering the sum of
$909.00 to the FDIC. (Emphasis added.)
Roughton timely objected to the Report, reasserting his
objections to the magistrate's authority to make the factual
findings and also alleging a defect in the reference procedure.
2
28 U.S.C. § 636.
3
Although the order of reference purported to refer the
motion for contempt to the magistrate judge for determination,
the magistrate concluded that he lacked contempt powers and
instead was limited to making a report and recommendation on the
contempt motion. Roughton contends that because the order of
reference was one referring the contempt motion to the magistrate
for determination, the magistrate lacked proper authority to
issue only a report and recommendation. We disagree, finding
that the order of reference properly gave the magistrate
authority to issue a report and recommendation on the contempt
motion.
3
Roughton also alleged there was no testimony adduced at the hearing
to support the factual findings made by the magistrate.
On October 4, 1993, a show cause hearing was held before the
district judge. Counsel for FDIC stated in open court that
Roughton had not produced the returns to him as required by the
order. Counsel for Roughton did not object to FDIC's counsel's
comments regarding Roughton's noncompliance with the order. The
district court adopted the recommendation of the magistrate judge
and held Roughton in contempt. Accordingly, Roughton was
immediately taken into custody by the United States Marshal. The
order issued by the district judge stated that:
Defendant did not show just cause for his failure to comply
with the February 24, 1993 order directing him to produce to
the FDIC tax returns for the years 1989, 1990, and 1991.
Accordingly, the Court found Defendant in contempt and ordered
that he be taken into custody for a period of 72 hours and
until he produces the subject tax returns and pays attorneys'
fees in the amount of $909.00. (Emphasis added.)
Notwithstanding the literal wording of the order requiring
that Roughton be taken into custody for 72 hours and until he
produced the tax returns, Roughton was released from custody
immediately upon producing the returns and paying $909.00 to the
FDIC on the day of the hearing.
On appeal, Roughton alleges that the above order was one of
criminal contempt, and that he was found guilty without the
requisite protections which must be afforded to one in jeopardy of
a criminal sanction, including proper notice and the appointment of
an independent prosecutor. Roughton also alleges that no testimony
or other evidence was requested or received at either of the
4
hearings on the Motion for Contempt. Thus, even if the order was
one of civil contempt, Roughton alleges it is not supported by the
record. Roughton also alleges that the magistrate was without
authority to conduct the hearing on the motion for contempt.
We conclude that the district judge's order contained both a
civil element and a criminal element, but that the order was
executed as though it were entirely civil. We vacate the criminal
element of the contempt order and affirm the civil element.
Standard of Review
We review a contempt order for abuse of discretion, and we
review the district court's underlying factual findings under the
clearly erroneous standard. Martin v. Trinity Industries, Inc.,
959 F.2d 45, 46-47 (5th Cir.1992).
Analysis
Magistrate's Authority under 28 U.S.C. § 636 to enter a
postjudgment discovery order and submit a report and recommendation
concerning a contempt determination
As noted above, Roughton questions the sufficiency of the
district court's referrals to the magistrate and the statutory and
constitutional bases for the magistrate's authority. We conclude
that the district court properly referred the motions relating to
postjudgment discovery of the tax returns for determination. We
also conclude that the district court properly referred the motion
for contempt to the magistrate, who issued a postjudgment discovery
order and a report/recommendation on Roughton's contempt in
accordance with 28 U.S.C. § 636(b)(3).
5
The Federal Magistrates Act was passed to assist the
judiciary in its overload by permitting the assignment of various
judicial duties to magistrates. Several specific duties that may
be assigned to magistrates are outlined in the statute. To
encourage experimentation with delegations to magistrates, Congress
allowed district courts to assign magistrates "such additional
duties as are not inconsistent with the Constitution and laws of
the United States". 28 U.S.C. § 636(b)(3).
In this case, the district court referred Roughton's motion
for protective order and the FDIC's motion to compel to the
Magistrate for hearing and determination pursuant to 28 U.S.C. §
636(b) and Local Rule 1.3 of the Northern District Court of Texas.
Section 636(b) provides for the referral of various matters without
the parties' consent. The District Court's Local Rule incorporates
an order of that court, which delineates additional powers and
duties of Magistrates under § 636(b).4
This statutory provision and local rule provide a
jurisdictional basis for the magistrate's entry of a postjudgment
discovery order. See, Merritt v. Int'l Bhd. of Boilermakers, 649
F.2d 1013, 1018 (5th Cir.1981).
Roughton challenges Section 636(b)(3) as a basis for the
magistrate's jurisdiction, claiming that the grant of authority in
4
Miscellaneous Order No. 6, Rule 2(f) of that court provides
that upon entry of an order of reference by a district judge, or
when required to do so under the provisions of a local rule or
general order of this Court, a magistrate may perform "[a]ny
other duties assigned by the Court, or any Judge thereof, which
are not inconsistent with the Constitution and laws of the United
States."
6
(b)(3) cannot exceed specific jurisdictional grants in other
provisions of 28 U.S.C. § 636. Because no other provision of § 636
expressly authorizes a federal magistrate to issue postjudgment
discovery orders or to conduct a hearing and issue a report and
recommendation on a contempt motion in a discovery dispute,
Roughton contends that the magistrate acted without authority. He
relies upon Gomez v. United States, 490 U.S. 858, 109 S.Ct. 2237,
104 L.Ed.2d 923 (1989), Stockler v. Garratt, 974 F.2d 730 (6th
Cir.1992) and Olympia Hotels Corp. v. Johnson Wax, 908 F.2d 1363
(7th Cir.1990). These cases examine a magistrate's authorization
to conduct voir dire. Given the critical nature of voir dire and
its potentiality for affecting the outcome of a trial, these cases
should have little relevance to determining the applicability of 28
U.S.C. § 636(b)(3) in this case, where the issue is whether the
magistrate can conduct a nondispositive postjudgment discovery
motion in a collection proceeding, as FDIC correctly points out.
The legislative history of § 636 also illustrates that
Congress placed the "additional duties" clause in a separate
subsection of § 636 to emphasize that it was not tightly restricted
by other statutory grants of authority. H.R.Rep. No. 94-1609, 94th
Cong., 2d Sess. 12 (1976), U.S.Code Cong. & Admin.News 1976, 6162.
Gomez, supra, provided only that these additional duties reasonably
relate to the existing statutory scheme. Given the fact that the
discovery motions in this case are the types of nondispositive
discovery motions specifically authorized for pretrial
determination by a magistrate under § 636(b)(1)(A), jurisdiction to
7
decide these types of motions postjudgment bears a reasonable
relationship to the existing statutory scheme and should be found
under § 636(b)(3).
Roughton argues that the Magistrate was not authorized to
enter a final decision without the consent of the parties, citing
Jaliwala v. United States, 945 F.2d 221 (7th Cir.1991) and Parks by
and through Parks v. Collins, 761 F.2d 1101 (5th Cir.1985). As
FDIC points out, the Jaliwala case is inapposite because the
judgment in that case was an appealable, final judgment, whereas in
this case the magistrate's order as well as his report and
recommendation related to a nondispositive postjudgment discovery
motion which was reviewed by the district judge.
The Parks case involved a magistrate's determination on a Rule
60(b) motion to set aside a default judgment issued by the district
court. We declined to consider the application of § 636(b)(3) as
a source for the magistrate's jurisdiction in Parks because we
found that the district court never referred the motion to the
magistrate, nor had the parties consented to have the motion heard
by a magistrate. In the instant case, we have determined that both
the motion to compel/motion for protective order and the motion to
compel were properly referred to the magistrate. Thus, Roughton's
reliance on Parks is misplaced.
Roughton also challenges the constitutional basis for the
magistrate's authority to issue postjudgment discovery orders,
citing Northern Pipeline Const. Co. v. Marathon Pipe Line Co., 458
U.S. 50, 57-63, 102 S.Ct. 2858, 2864-67, 73 L.Ed.2d 598 (1982).
8
This and all other arguments forwarded by Roughton and pertaining
to the authority of the magistrate in this case are meritless. We
find that the matters involved herein were properly referred to the
magistrate, who had the requisite constitutional and statutory
authority pursuant to § 636(b)(3) to order the production of the
returns and to issue a report and recommendation on the motion for
contempt.
Civil or Criminal Contempt?
Having determined that the magistrate had the authority to
issue the Report and Recommendation in this case, the next issue is
whether the district court's order that Roughton be taken into
custody for a period of 72 hours and until he produced his tax
returns to the FDIC and paid to the FDIC attorneys' fees in the
amount of $909.00 amounts to civil or criminal contempt. Roughton
argues that the order was one of criminal contempt. FDIC argues
that the contempt order provided only civil relief.
A contempt order is characterized as either civil or criminal
depending on its primary purpose. Lamar Financial Corp. v. Adams,
918 F.2d 564, 566 (5th Cir.1990). If the primary purpose is to
punish the contemnor and vindicate the authority of the court, the
order is viewed as criminal. If the primary purpose of the
sanction is to coerce another party for the contemnor's violation,
the order is considered purely civil. A key determinant is whether
the penalty imposed is absolute or conditional on the contemnor's
conduct. When a contempt order contains both a punitive and a
coercive dimension, for purposes of appellate review it will be
9
classified as a criminal contempt order. Lamar, 918 F.2d at 566-
67.
The face of the order in this case does not indicate whether
it is civil or criminal in nature. However, the order contains
both a punitive element (the initial 72 hour imprisonment) and
coercive elements (the $909.00 attorney's fee award to FDIC and the
order that Roughton remain in custody until he produced the
returns). A civil contemnor remains imprisoned only until he
complies with an order or condition imposed by the court. In this
case, the 72 hour imprisonment imposed by the court reads as an
absolute punishment that would have to be served even if Roughton
immediately handed over the returns and paid the attorney's fees.
Thus, this portion of the order is punitive in nature. The
District Judge's order stated that Roughton was to serve 72 hours
and thereafter until he produced the returns and paid the money.
Thus, the face of the contempt order reflects both a punitive and
a coercive dimension and should be classified as a criminal
contempt order, notwithstanding the fact that the magistrate's
Report and Recommendation recommended that Roughton be held in
civil contempt. However, we find that the order was executed as
though it were civil.
In order for a notice of show cause hearing to be sufficient
for a hearing at which criminal contempt may be found, either the
offending conduct forming the basis for the hearing must be such
that it can only be punished by punitive or criminal sanctions, or
it must specifically state that the hearing will be a criminal
10
contempt proceeding. American Airlines, Inc. v. Allied Pilots
Ass'n, 968 F.2d 523, 530-531 (5th Cir.1992). Roughton argues that
the conduct described in the district court's order to show cause,
i.e., failure to produce tax returns, could have been punished with
purely coercive sanctions, of which Roughton might have been able
to purge himself through compliance. We agree. For example, the
contempt order could have provided for Roughton to be taken into
custody only until he complied with the magistrate's order, with no
absolute 72 hour imprisonment.5
The Show Cause Order does not reflect that a criminal
proceeding would be conducted. Rule 42(b) of the Federal Rules of
Criminal Procedure provides in relevant part:
A criminal contempt ... shall be prosecuted on notice. The
notice shall state the place and time of hearing, ... and
shall state the essential facts constituting the criminal
contempt charged and describe it as such. (Emphasis added.)
Because the offending conduct could have been eliminated by
coercive civil sanctions, notice was required if this was to be a
criminal contempt proceeding. American Airlines, supra. Because
the Order to Show Cause did not describe the proceeding as a
criminal contempt proceeding, the notice requirement of F.R.C.P.
42(b) was not followed, and Roughton's due process rights were
violated. Richmond Black Police Officers v. City of Richmond, Va.,
5
In fact, this is exactly how the order was actually
executed, notwithstanding the face of the contempt order, which
indicated that the 72 hour imprisonment was absolute. Once the
district judge learned that Roughton had complied with the order
to produce the returns and to pay the $909.00 attorney's fee, he
immediately signed an order granting Roughton's release, finding
that he had purged himself of contempt.
11
548 F.2d 123, 127 (4th Cir.1977). Moreover, no independent
prosecutor was appointed, which is another procedural defect.6
FDIC attempts to characterize the proceeding as civil in
nature based upon the fact that the magistrate had recommended in
his report that Roughton be held in civil contempt until the tax
returns were paid. It points out that Roughton was taken into
custody on the morning of October 4, 1993, and released later that
day after he "purged" the contempt by fulfilling the conditions of
the District Court's order. Thus, the district judge released
Roughton from the strict terms of the order, i.e., the absolute 72
hour sentence, once he produced the returns and paid the money to
FDIC. Nonetheless, the written order reads like a criminal
contempt order in that it imposes an absolute 72 hour sentence,
after which Roughton could then be released upon compliance.
Pursuant to the wording of the order, Roughton was placed in
criminal contempt, without notice. The fact that the district
judge actually released Roughton from custody immediately upon
Roughton's compliance with the court's orders means only that the
criminal portion of the order was not in fact executed, not that it
was not imposed. As far as Roughton or anyone else can tell from
a review of the written order, Roughton appears to have been held
in criminal contempt. Roughton seeks to have the criminal portion
of the order vacated in order to avoid any negative connotation
6
In a Rule 42(b) criminal contempt proceeding, the judge may
not prosecute the contempt and at the same time act as judge. To
do so deprives the defendant of an impartial decisionmaker.
American Airlines, supra, 968 F.2d at 531.
12
which might result from what appears on the face of the order to be
a conviction for criminal contempt.
FDIC also attempts to characterize the proceeding as civil
based upon the fact that the Court granted remedial relief to FDIC,
i.e., the attorney's fees, rather than a fine to be paid to the
Court. FDIC points out that typically a fine is punitive when paid
to the court and remedial when paid to the harmed party. The
contempt order in this case involves a true mixture of both
criminal and civil relief. Accordingly, it should be characterized
as criminal for purposes of appeal. Lamar, supra, 918 F.2d at 567.
This characterization permits the review of civil contempt orders
which would otherwise not be final and appealable. However, it
does not necessarily follow that, even if this is a true "mixed
relief" case, a Court must vacate and remand the whole proceeding
for failure to comply with criminal procedure. In Lamar, the
reviewing court vacated and remanded the criminal portion of the
order but affirmed the civil portion after finding the district
court had not abused its discretion in granting the civil relief.
Ibid.
Thus, as FDIC correctly points out, even though we find that
the 72 hours custody provision is a separate criminal sanction, we
need only vacate the criminal element of the order. A remand is
not necessary because the order has already been executed as though
it were one of civil contempt, with the criminal portion (the 72
hour sentence) of the order unimposed, and Roughton has been purged
of contempt via the district judge's order. We merely vacate the
13
criminal portion to clear Roughton's name and record and to avoid
any possible negative connotation that might inure by virtue of the
criminal element of the order.
Was there sufficient evidence for a finding of civil contempt?
Having determined that we should vacate the criminal portion
of the order, we next turn our attention to the civil aspects of
the order. Roughton argues that there was insufficient evidence to
support a finding of civil contempt, and that the civil contempt
order should be reversed. He claims that the FDIC did not present
sufficient evidence to satisfy the "clear and convincing"
evidentiary standard required for civil contempt. He argues that
the District Court erred in finding contempt in the absence of any
evidence, witnesses or documents demonstrating Roughton's violation
of the underlying order compelling production of tax returns. He
argues that he was denied the right to present witnesses and that
the underlying order compelling production of the returns was
"vague" and "ambiguous" and not susceptible to enforcement through
a contempt proceeding. We disagree with each of Roughton's
contentions.
In a civil contempt proceeding, the party seeking an order of
contempt need only establish (1) that a court order was in effect,
and (2) that the order required certain conduct by the respondent,
and (3) that the respondent failed to comply with the court's
order. Martin v. Trinity Industries, Inc., 959 F.2d 45, 47 (5th
Cir.1992). To determine compliance with an order, the court simply
asks whether the respondent has produced the documents. If he has
14
not, the burden shifts to the respondent to rebut this conclusion,
demonstrate an inability to comply, or present other relevant
defenses. United States v. Hayes, 722 F.2d 723, 725 (11th
Cir.1984); Star Brite Distributing, Inc. v. Gavin, 746 F.Supp.
633, 643 (N.D.Miss.1990).
There was no dispute that the order compelling production of
the returns was in effect at the time of the hearing. Despite
numerous attempts, Roughton failed to obtain a stay of the order
either from the district court or from this Court. At the show
cause hearing, counsel for FDIC notified the district court of the
denial of these stays. Second, the magistrate's order clearly
required the following:
Within ten days of the date of this order Defendant Roughton
will produce his federal tax returns for 1989, 1990 and 1991
to counsel for Plaintiff. (emphasis added.)
Roughton's assertions that this order is vague have no merit.
FDIC claims it established Roughton's violation of this order
through the representations of its counsel and documentary evidence
submitted to the Court. In the FDIC's motion for contempt hearing
before the magistrate and at the show cause hearing, FDIC counsel
advised the district court of Roughton's continuing violation of
the order. The FDIC's motion for contempt supplemented these
representations with various letters showing its efforts to secure
Roughton's tax returns and an affidavit supporting the $909.00
attorney's fee claim.
Roughton claims this information does not provide a sufficient
basis for the District Court's finding of contempt. He points to
15
the fact that argument of counsel during a hearing on a motion does
not constitute evidence. He also notes that the letters between
counsel regarding the returns were not authenticated nor offered
into evidence. Roughton claims it was an abuse of discretion for
the district judge to have made a finding of contempt without
adducing any evidence, relying instead upon statements of counsel
for FDIC that the returns had not been produced. FDIC counters by
pointing out that the attorney had personal knowledge of Roughton's
failure to comply. The magistrate's order required that the
documents be produced to counsel for FDIC. Moreover, the attorney
for FDIC signed the motion for contempt, which stated that the
returns had not been produced, thereby certifying under his Rule
117 duty that the statements therein were well-grounded in fact.
Roughton never opposed this allegation forwarded by FDIC,
either in a memorandum in opposition to the motion for contempt or
at the hearings. Roughton has never denied that, at the time of
the contempt hearing, he was in violation of the order compelling
productions. He points to nothing which would rebut the FDIC's
representations concerning his noncompliance. Until the show cause
hearing, Roughton presented no proffer of evidence to demonstrate
an inability to comply with the order. Roughton raised objections
at the show cause hearing only as to the jurisdiction and
7
Federal Rule of Civil Procedure 11 provides generally that,
in presenting a pleading, motion, etc., to the court, one is
certifying that to the best of that person's knowledge,
information, and belief, formed after reasonable inquiry, that
any factual contentions therein have evidentiary support.
Sanctions may be imposed for violations of Rule 11.
16
fact-finding of the magistrate and the purported vagueness and
ambiguity of the order compelling production of the returns.
Roughton has never offered any evidence or anything at all to rebut
the position of FDIC that the returns had not been produced. In
fact, evidence presented by Roughton at the show cause hearing
helps to establish that the returns had not been produced.
Roughton's wife, Pricilla Roughton, submitted to the district
court an affidavit asserting her sole possession and custody of
their joint tax returns and her unwillingness to deliver them to
her husband. This affidavit itself implicitly establishes as well
the fact that Andrew Roughton had not produced the returns to FDIC.
Although Pricilla Roughton's last-minute submission apparently was
found not to be credible in helping Roughton to avoid the contempt
ruling, it nonetheless is a part of the record and helps to
establish that the returns had not been produced.
Also, counsel for FDIC submitted an affidavit concerning the
attorneys' fees which had been incurred relative to the motion for
contempt. In the affidavit, counsel for FDIC reiterates that
defendant had failed to produce the returns. Thus, we squarely
reject Roughton's argument that there was not clear and convincing
evidence to support a finding that Roughton had not in fact
produced the returns.
Should Roughton have been ordered to produce the tax returns?
Roughton's final argument is that he should not have been
ordered to produce the tax returns in question. Accordingly, he
seems to request that we try to "unring the bell" and order the
17
return of all documents produced, all copies thereof, and that FDIC
be ordered to expunge from its files any information which may have
been derived from the production of the returns. We do not have to
attempt this impossible task. The tax returns were relevant to the
case, and the district judge and magistrate did not err in ordering
their disclosure.
Roughton erroneously argues that state procedural rules apply
to the determination of the post-judgment discovery issue.
F.R.C.P. 69(a) permits a party to obtain postjudgment discovery
from the judgment debtor "in the manner provided in these rules or
in the manner provided by the practice of the state in which the
district court is held." A judgment creditor thus has the choice
of which method to use. FDIC clearly indicated its intent to
pursue postjudgment discovery in the manner provided by the Federal
Rules of Civil Procedure, thus, Texas law does not apply to the
FDIC's discovery request. Instead, federal law will apply. Texas
cases cited by Roughton to establish that production of the tax
returns should not have been ordered are irrelevant. Tax returns
are not privileged. Moreover, state privilege laws should not be
relied upon where the documents in question are sought by a
governmental agency, like the FDIC. See, Linde Thomson Langworthy
Kohn & Van Dyke, P.C. v. RTC, 5 F.3d 1508, 1513-14 (D.C.Cir.1993)
The scope of postjudgment discovery is very broad to permit
a judgment creditor to discover assets upon which execution may be
made. Some courts have applied a two-part test in determining
whether returns should be produced. See United States v. Bonanno,
18
119 F.R.D. 625, 627 (E.D.N.Y.1988). The party seeking production
of the documents must show their relevance to the inquiry. Then,
the burden shifts to the party opposing production to show that
other sources exist from which the information contained in the
income tax returns may be readily obtained.
Under these facts, relevance of the tax returns to a judgment
creditor is virtually presumed. A tax return necessarily contains
information relating to a taxpayer's financial position, which is
highly relevant to a judgment creditor. The tax return can verify
the information provided by the judgment-debtor concerning his
assets and income, and it can reveal a judgment-debtor's attempts
to hide assets. We find that FDIC has met its burden of showing
relevance. However, we conclude that Roughton failed to carry his
burden since he apparently failed to present any evidence at the
hearing establishing other sources by which FDIC could have
obtained a copy of Roughton's returns or otherwise could have
verified the truth of the information Roughton had given FDIC
regarding his income and/or assets. Roughton misreads Bonanno as
requiring the party seeking the documents to prove both prongs of
the test. Roughton's other arguments with reference to the
discoverability of the tax returns lack merit as well.
Conclusion
We affirm the civil portion of the contempt order and vacate
the criminal portion of that order. Remand is not necessary
because the order was executed by the district court as though it
were civil. AFFIRMED in part and VACATED in part.
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