U.S. v. Henry, Case No. 08-003 (W.D. Va. July 1, 2008)

Alleging interference with a fair housing lawsuit pending in the Eastern District of Virginia, intervening plaintiffs served a subpoena on the defendant seeking production of electronic information and computers used by the defendant in connection with the alleged interference. The defendant sought to quash the subpoena, but the court denied the motion to quash and ordered the computers produced to a court appointed expert for imaging and analysis. The expert found that over 53,000 files had been deleted three weeks after service of the subpoena. A motion for sanctions and contempt followed, which in turn was followed by the defendant’s filing for bankruptcy. The question before the court was whether the stay provisions of the Bankruptcy Act stays the motion. If the contempt proceeding is civil in nature it does. If it is criminal it does not.

Magistrate Judge Michael F. Urbanski had no trouble concluding that the proceeding was criminal in nature. The court noted that whether a contempt proceeding is civil or criminal is determined by examining the “character and purpose of the sanction involved,” not by the manner in which the contempt proceeding is labeled. A civil contempt proceeding is remedial and either “coerces the defendant into compliance with the court's order” or “compensates the complainant for losses sustained.” A criminal contempt proceeding is punitive and seeks to “vindicate the authority of the court.” “As such, penalties associated with criminal contempt are imposed ‘retrospectively for a completed act of disobedience’ and without any provision for purge of the contempt.” Slip Opinion at 6.

The court leaned heavily on In re Rook, 102 B.R. 490, 494 (Bankr. E.D. Va. 1989), aff’d, 929 F.2d 694 (4th Cir. 1991), which upheld a state court contempt conviction rendered after Rook had filed for bankruptcy. The court held that the contempt order “was issued solely to uphold the dignity of the prior circuit court orders.” Rook was no longer able to bring himself into compliance with the 1983 contempt order, thus “converting a contempt citation, civil and remedial in nature, into a citation criminal and punitive in nature.”

The court’s analysis was succinct:

Like Rook, White is no longer able to bring himself into compliance with the subpoena which the contempt proceedings concern. The files were deleted, some of which cannot be recovered. The thrust of the motion is to punish the underlying alleged deletion of computer files in the face of federal court subpoenas for production of those files. As such, the relief sought in the contempt proceeding is not remedial, but punitive in nature, and would be issued to uphold the dignity of the subpoenas issued under the authority of the court under the Federal Rules of Civil Procedure.

Slip Opinion at 7. The petition seeks to punish the defendant for deletion of documents subject to a subpoena, actions which cannot now be remedied. Thus, it is essentially criminal in nature.

The court went on to appoint the United States Attorney to prosecute the contempt allegation. The prosecution is to include not only the alleged destruction of computer files, but also the defendant’s “emailing of a derogatory and inflammatory email to the court's law clerk on June 18, 2008.” The court characterized the email as “vile, contumacious and laced with expletives” that “was communicated directly to the court's law clerk.”

Read the Opinion