E.I. DuPont de Nemours & Company-Benlate Litigation, In re

• Citation: 99 F.3d 363
• Decision Date: 17 October 1996
• Docket Number: No. 95-9059,COMPANY-BENLATE,95-9059
• Parties: , 36 Fed.R.Serv.3d 427, 27 Envtl. L. Rep. 20,432 In re E.I. DuPONT DE NEMOURS &LITIGATION. The BUSH RANCH, INC., William R. Lawson, individually, Yellow River Growers, C. Raker & Sons, Inc., a Michigan corporation, Petitioners-Counter-Defendants-Appellees, C. Neal Pope, a Georgia resident, Pope, McGlamry, Kilpatrick & Morrison, a Georgia partnership, Counter-Defendants, v. E.I. DuPONT DE NEMOURS & COMPANY, a Delaware corporation, Respondent-Counterclaimant, Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals (11th Circuit)

Page 363

99 F.3d 363

65 USLW 2320, 36 Fed.R.Serv.3d 427,

27 Envtl. L. Rep. 20,432

In re E.I. DuPONT DE NEMOURS & COMPANY-BENLATE LITIGATION The BUSH RANCH, INC., William R. Lawson, individually Yellow River Growers, C. Raker & Sons, Inc., a Michigan corporation Petitioners-Counter-Defendants-Appellees C. Neal Pope, a Georgia resident, Pope, McGlamry, Kilpatrick & Morrison, a Georgia partnership, Counter-Defendants, v. E.I. DuPONT DE NEMOURS & COMPANY, a Delaware corporation, Respondent-Counterclaimant, Appellant.

No. 95-9059.

United States Court of Appeals, Eleventh Circuit.

Oct. 17, 1996.

Edward W. Warren, Christopher Landau, Patrick F. Philbin, Kirkland & Ellis, Washington, DC, Arthur J. England, Jr., Greenberg, Taurig, Hoffman, Lipoff, Rosen & Quentel, P.A., Miami, FL, John K. Train, III, Alston & Bird, Atlanta, GA, for respondent-counterclaimant, appellant.

C. Neal Pope, Max R. McGlamry, & Wade H. Tomlinson, Pope McGlamry Kilpatrick & Morrison, Columbus, GA, William U. Norwood, Michael L. McGlamry, Pope McGlamry Kilpatrick & Morrison, Atlanta, GA, Richard H. Gill, Copeland, Franco, Screws & Gill, Montgomery, AL, for petitioners-counterdefendants-appellees.

Appeal from the United States District Court for the Middle District of Georgia.

Before DUBINA, and CARNES, Circuit Judges, and FARRIS ^*, Senior Circuit Judge.

DUBINA, Circuit Judge:

This case involves an appeal from a contempt order entered by the district court against the Defendant-Appellant E.I. Du Pont de Nemours & Company ("DuPont"). For the reasons that follow, we reverse the district court's order and remand the case for further proceedings.

I. Background

This appeal has its origins in four consolidated cases, known collectively as the Bush Ranch litigation, that were tried before the district court in 1993. The primary issue at trial was whether Benlate 50 DF--a fungicide manufactured by DuPont and sold to the plaintiffs for use at their nurseries--was contaminated with highly toxic herbicides known as sulfonylureas ("SUs"). After the case was submitted to the jury, the plaintiffs in the Bush Ranch litigation offered to settle their claims, and DuPont agreed. Accordingly, on August 16, 1993, the plaintiffs in the Bush Ranch litigation voluntarily dismissed their claims with prejudice.

After the settlement, the plaintiffs in a Hawaii Benlate case requested documents related to testing of Benlate 50 DF from the Bush Ranch litigation. DuPont resisted, but it eventually produced the documents pursuant to a court order. Among the test documents produced in the Hawaii Benlate case were certain raw test data (the "Alta data") that DuPont had not produced during the course of the Bush Ranch litigation. The Alta data included analytical findings which some experts would construe as evidence that Benlate 50 DF was contaminated with SUs.

As a result of the production of the Alta data in the Hawaii Benlate case, the Appellees ¹ returned to the district court--more than a year and a half after the settlement of the Bush Ranch litigation--with a petition seeking sanctions against DuPont. The Appellees charged that DuPont had intentionally withheld evidence of SU contamination which was in its possession and which the district court had ordered it to produce. Furthermore, the petition charged that DuPont had falsely represented to the district court and to the Appellees that the Alta data it withheld contained no evidence of SU contamination. In response to the petition, the district court set a hearing date and ordered DuPont to appear and show cause why it should not be sanctioned.

DuPont filed a motion to recuse under 28 U.S.C. §§ 144 and 455, a motion to vacate the show cause order, and a motion to dismiss the Appellees' petition. The district court denied each of these motions and also dismissed DuPont's counterclaims against the Appellees. Following the district court's denial of the motion to recuse, DuPont filed a motion to stay the proceedings to enable it to seek writs of prohibition and mandamus from this court. The district court denied the motion to stay the proceedings, and this court subsequently denied DuPont's emergency motion for a stay and its petitions for writs of prohibition and mandamus.

The show cause hearing began on May 2, 1995, and continued through May 12, 1995. On the basis of the evidence presented at the hearing, the district court issued an order finding that DuPont's failure to produce the Alta data had violated its discovery orders in the Bush Ranch litigation. The district court specifically found that "DuPont deprived [the Appellees], the [district court], and the jury of data and documents highly relevant to the issue which DuPont itself described as the most critical issue in the case." In re E.I. du Pont de Nemours & Co., 918 F.Supp. 1524, 1556 (M.D.Ga.1995). The district court also found that DuPont's conduct was "willful, deliberate, conscious, purposeful, deceitful, and in bad faith;" that this deceitful conduct "affected the rulings and the orders of [the district court] and interfered with the administration of justice;" and that this discovery abuse rendered the trial, which had lasted approximately six weeks, "a farce." Id.

Accordingly, the district court entered a sanctions order against DuPont consisting of the following four components:

(1) The district court directed DuPont to send copies of the sanctions order and the withheld documents to the Appellees and the rest of the plaintiffs in the Bush Ranch litigation.

(2) The district court found that the plaintiffs in the Bush Ranch litigation had together expended $6,843,837.53 in preparation for the trial and assessed a sanction in that amount against DuPont. The district court assessed another sanction for the same amount against DuPont to pay for the "wasted time, inconvenience, and waste of judicial resources inflicted upon [the district court] and the jury for the pretrial and trial of the consolidated cases." Id. at 1557. The district court ordered that the total sum--$13,687,675.06--be paid into the registry of the court.

(3) The district court partially vacated the order entered upon settlement of the Bush Ranch litigation, thereby reinstating several orders finding discovery abuses by DuPont during the course of the trial. The district court specifically reinstated a conditional $1 million sanction it had imposed upon DuPont during the trial. The district court also assessed a sanction of $100 million against DuPont for its conduct during the previous litigation and during the show cause hearing. The district court announced that it would permit DuPont to purge itself of the $1 million and $100 million sanctions by complying with all other sanctions orders and by publishing a full page advertisement in the Wall Street Journal and in the most widely circulated newspapers in Alabama, Georgia, and Michigan acknowledging its wrongdoing and giving notice of the district court's orders and sanctions. The form of the advertisement was to be submitted to the district court for its approval.

(4) The district court ordered DuPont to file, within 25 days, a certificate of compliance signed by DuPont's chief executive officer confirming that DuPont was in full compliance with the terms of the sanctions order. The district court warned DuPont that it would impose additional sanctions of $30,000 a day for each day after the termination of the 25-day grace period during which DuPont had not both fully complied with the sanctions order and filed the requisite certificate of compliance.

DuPont requested a stay of the sanctions order to enable it to appeal to this court. The district court granted the stay, and this appeal followed.

II. Issues Presented

In its effort to defeat the contempt order, DuPont presents three issues which we must discuss in order to decide this appeal. ² First, DuPont argues that the district court lacked jurisdiction to entertain the proceedings which culminated in the issuance of the contempt order. Second, DuPont contends that the district court erred in imposing criminal contempt sanctions in a civil proceeding. ³ Third, DuPont claims that its failure to produce the Alta data violated no order of the district court.

III. Standards of Review

We review the district court's assertion of jurisdiction de novo. See Mutual Assurance, Inc. v. United States, 56 F.3d 1353, 1355 (11th Cir.1995). We also review de novo the district court's characterization of these proceedings as civil, and not criminal, in nature. See International Union, United Mine Workers of America v. Bagwell, 512 U.S. 821, ----, 114 S.Ct. 2552, 2561-63, 129 L.Ed.2d 642 (1994); Martin v. Guillot, 875 F.2d 839, 845 (11th Cir.1989). As will be discussed infra, DuPont's challenge to the existence of an order requiring production of the Alta data presents a question of evidence sufficiency which we review de novo. See United States v. Keller, 916 F.2d 628, 632 (11th Cir.1990), cert. denied, 499 U.S. 978, 111 S.Ct. 1628, 113 L.Ed.2d 724 (1991).

IV. Discussion

A. Jurisdiction.

DuPont argues that the district court "lacked jurisdiction to entertain an independent civil action for sanctions based on alleged misconduct in the long-dismissed Bush Ranch litigation." DuPont's Br. at 17. We disagree. Every district court "has the power to conduct an independent investigation in order to determine whether it has been the victim of fraud." Chambers v. NASCO, Inc., 501 U.S. 32, 44, 111 S.Ct. 2123, 2132, 115 L.Ed.2d 27 (1991) (citing Universal Oil Prods. Co. v. Root Ref. Co., 328 U.S. 575, 66 S.Ct. 1176, 90 L.Ed. 1447 (1946)). In addition, the district court was free to vacate its earlier judgment, in whole or in part, and to resume proceedings on the same jurisdictional basis as it possessed in the underlying case. See Chambers, 501 U.S. at 44, 111 S.Ct. at 2132 ("Of particular relevance here, the inherent power also allows a federal court to vacate its own...