U.S. v. Troxler Hosiery Co., Inc., 78-1066

• Decision Date: 16 February 1982
• Docket Number: No. 78-1066,78-1066
• Citation: 672 F.2d 365
• Parties: UNITED STATES of America, Petitioner, v. TROXLER HOSIERY CO., INC., Respondent.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 365

672 F.2d 365

UNITED STATES of America, Petitioner, v. TROXLER HOSIERY CO., INC., Respondent.

No. 78-1066.

United States Court of Appeals,

Fourth Circuit.

Argued Jan. 5, 1982.

Decided Feb. 16, 1982.

John R. Fleder (J. Patrick Glynn, Gerald C. Kell, Winston-Salem, N. C., Robert B. Nicholson, Dept. of Justice, Washington, D. C., on brief), for petitioner.

Edwin E. Boone, Jr., Greensboro, N. C., Robert C. Cone, J. Howard Coble, Greensboro, N. C., for respondent.

Edward Boone, Jr., Robert Cone, J. Howard Cable, Greensboro, N. C. (Norman B. Smith, Smith, Patterson, Follin, Curtis, James & Harkavy, Greensboro, N. C., on brief), for appellees.

Before WINTER, Chief Judge, WIDENER, Circuit Judge, and WILKINS, ^* District Judge.

PER CURIAM:

In this proceeding, Troxler Hosiery Co., Inc. (Troxler) has been charged with criminal contempt for willfully disobeying an order of this court in a case styled United States of America v. Articles of Hazardous Substance and Troxler Hosiery Co., Inc., No. 78-1066, in violation of 18 U.S.C. § 401(3). The court designated Honorable John A. Field, Jr. to consider and decide preliminary motions of the parties, to conduct any pretrial conferences, to conduct an evidentiary hearing and to report to the court for its consideration proposed findings of fact and recommendations for disposition of the matter. Judge Field has carried out the functions delegated to him and has filed a Report and Proposed Findings of Fact recommending that Troxler be found guilty as charged. The matter is now before us on exceptions to the Report and Proposed Findings of Fact. The government filed no exceptions. Troxler Hosiery Co., Inc. filed thirty exceptions. The exceptions have been fully briefed and argued.

We have considered the report, the exceptions thereto, and the written and oral arguments with respect to the exceptions. In addition we have made an independent examination of the record made before Judge Field. We are satisfied that Judge Field found the facts correctly and we adopt his findings, a copy of which is appended to this opinion, as our own. ^** We are further satisfied that Judge Field made a correct legal determination of this case in recommending what we should decide. Based upon our findings and our perception of the applicable law, we conclude that Troxler is guilty of criminal contempt as a result of its willful disobedience of the order of this court entered on March 8, 1978 (continuing an order of Judge Winter filed February 6, 1978), in violation of 18 U.S.C. § 401(3).

There remains only the question of the appropriate penalty to be imposed. We request the government to make a recommendation in writing in that regard within thirty days from the date that this opinion is filed. Troxler shall have the right to respond thereto within fifteen days after service of the government's recommendation on its counsel. If requested by Troxler, we will hear oral argument before pronouncing sentence.

IT IS SO ORDERED AND ADJUDGED.

APPENDIX

UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT

No. 78-1066

UNITED STATES OF AMERICA, PETITIONER,

versus

TROXLER HOSIERY CO., INC., RESPONDENT.

TO: Honorable Harrison L. Winter, Chief Judge.

Honorable H. Emory Widener, Circuit Judge.

REPORT AND PROPOSED FINDINGS OF FACT

Pursuant to your designation I took evidence in this proceeding in Greensboro, North Carolina on September 1, 1981, and based upon the testimony of the witnesses together with the exhibits, I recommend the following findings of fact.

1.

Troxler Hosiery Co., Inc., (Troxler) is a corporation organized under the laws of North Carolina with its principal place of business being located in Greensboro, North Carolina. From the time of its incorporation until, at least, the latter part of the year 1979, Robert Andrew Troxler was president of the corporation and made all of its policy decisions.

2.

On November 11, 1977, Troxler entered into a written agreement to buy Tris-treated merchandise from the Greensboro Manufacturing Company. The contract provided that Troxler purchased these goods with full knowledge that they had previously been subjected to a ban order by the Consumer Product Safety Commission and might be subjected to a similar ban at some future date. However, Troxler was aware that the United States District Court for the District of South Carolina had enjoined the Commission from enforcing the regulation banning such Tris-treated goods because the Commission had failed to follow the statutory requirements incident to the adoption of its regulation. Under its purchase agreement Troxler paid a total of $200,000 and received 29,890.75 dozen units of Tris-treated sleepwear. The sleepwear was ultimately recorded as inventory on Troxler's books and all transactions relating to the sleepwear were recorded on Troxler's records. With the exception of this transaction, Troxler obtained no other Tris-treated sleepwear or children's garments.

3.

On January 18, 1978, the United States filed a complaint for forfeiture pursuant to Section 6(a) of the Federal Hazardous Substances Act, 15 U.S.C. § 1265(a), against articles of Tris-treated children's sleepwear, asking the United States District Court for the Middle District of North Carolina to decree the condemnation of these goods. United States v. Articles of Hazardous Substance, etc., 444 F.Supp. 1260, (M.D.N.C.). On the same day, the Clerk of the District Court issued a warrant of seizure and monition directing the United States Marshal to seize the goods described in the complaint.

Pursuant to the warrant of seizure, on January 18, 1978, the Marshal placed under seizure 117,284 units (or 9,7332/3 dozen) of children's sleepwear located inside the warehouse of Troxler Hosiery Co. and in the possession of Troxler. The articles seized consisted of sleepwear for babies, small girls and boys. On the date of the seizure, there were additional Tris-treated garments owned by Troxler and located in trailers in Troxler's parking lot; the additional garments were not seized.

4.

On January 27, 1978, the Honorable Eugene A. Gordon, United States District Judge for the Middle District of North Carolina, granted a motion filed by Troxler which sought to quash the warrant of seizure. The court ordered the Marshal forthwith to restore the seized articles to Troxler. Pursuant to the court's order, the Marshal's office entered Troxler's warehouse on January 27, 1978, and released the seized articles by removing signs and notices which had evidenced the seizure.

5.

On August 17, 1979, Judge Gordon directed the Marshal to enter Troxler's business premises in Greensboro and take an inventory to determine which, if any, of the articles previously seized were still located on the premises. In accordance with that directive, on August 20, 1979, personnel from the Marshal's office went to Troxler's premises, entered the warehouse, and determined that none of the previously seized goods were on the premises. Deputy Marshal Rich observed the area where the seized goods had been and determined that the goods were no longer there.

6.

On January 31, 1978, an appeal by the United States from the district court's January 27, 1978 Order was docketed with this Court, No. 78-1066. The United States filed a motion which sought a stay pending appeal of the district court's Order. The government also sought an injunction prohibiting Troxler, pending appeal, from selling The government's motion was actually submitted to Judge Winter on January 30, 1978, the day before the appeal was docketed in the clerk's office, as was Troxler's response and an affidavit of Robert Andrew Troxler. Mr. Troxler stated in his affidavit that the company, the owner of the seized sleepwear, intended to export all of the merchandise to foreign countries.

or otherwise disposing of the previously seized garments.

On February 2, 1978, Judge Winter issued a Memorandum and Order addressing the government's motion. A copy of the Memorandum and Order was sent on that date to Norman Smith, Esquire, counsel for Troxler. Judge Winter's Memorandum and Order was filed in the Fourth Circuit clerk's office on February 6, 1978.

In his Memorandum and Order, Judge Winter granted the United States' motion for stay under the terms and conditions set forth in the Memorandum and Order, with the stay to continue in effect until oral argument of the appeal. The Order read in pertinent part:

2. Troxler, its officers, servants and employees may negotiate a sale of the seized goods with a foreign purchaser, but no binding contract for a sale shall be made, nor may the sale be consummated until further order of court.

3. Troxler, its officers, servants and employees may place the seized goods in shipping packages for the purpose of exporting it to foreign countries, and to brand and label said packages in accordance with the specification of a foreign purchaser, the law of the foreign countries to which said goods are intended to be shipped, and to indicate on the outside of the shipping packages that they are intended for export. Troxler, however, may not remove said goods from the jurisdiction of the district court until further order of court, and in no event may Troxler sell any of said goods in the domestic market.

Within a day or two after entry of Judge Winter's Order, a copy of the Order was received by Troxler's counsel, Norman Smith. Mr. Smith thereafter communicated the order to Robert Andrew Troxler, and had discussions with Mr. Troxler regarding the Order.

7.

In his Memorandum and Order, Judge Winter also partially remanded the seizure action to the district court, requesting Judge Gordon's views as to whether Troxler should be permitted to export the seized goods in the event that the goods were condemned pursuant to the Federal Hazardous Substances Act. In this regard, Judge Winter noted that Troxler's counsel had advised him that Troxler would offer no proof to show that the...