New Hartford v. Ct. Resources Recovery Auth., No. 17879.

• Decision Date: 19 May 2009
• Docket Number: No. 17879.
• Citation: 970 A.2d 570,291 Conn. 489
• Court: Connecticut Supreme Court
• Parties: TOWN OF NEW HARTFORD et al. v. CONNECTICUT RESOURCES RECOVERY AUTHORITY et al.

970 A.2d 570

291 Conn. 489

TOWN OF NEW HARTFORD et al. v. CONNECTICUT RESOURCES RECOVERY AUTHORITY et al.

No. 17879.

Supreme Court of Connecticut.

Argued October 16, 2008.

Decided May 19, 2009.

Louis R. Pepe, with whom were Richard F. Wareing, Richard H. Goldstein, Daniel J. Klau and Joseph J. Chambers, Hartford, for the appellant (named defendant).

David S. Golub, with whom were Jonathan M. Levine, Stamford, Joseph V. Meaney, Jr., Hartford, and, on the brief, Marilyn J. Ramos and Craig N. Yankwitt, Stamford, for the appellees (plaintiffs).

ROGERS, C.J. and DiPENTIMA, McLACHLAN, GRUENDEL and ROBINSON, Js.^*

McLACHLAN, J.

This appeal¹ stems from a certified class action brought by the plaintiffs, a group of seventy municipalities,² against the named defendant, Connecticut Resources Recovery Authority,³ following its ill-fated loan of $220 million to Enron Power Marketing, Inc., a subsidiary of Enron Corporation (collectively Enron).⁴ The principal issue in this appeal is whether the trial court violated the defendant's right to due process⁵ when it found the defendant in civil contempt of its November 20, 2006 order restricting the defendant's communications with the plaintiffs. The defendant claims that the trial court violated its due process right to fair and adequate notice sufficient to afford it a meaningful opportunity to prepare a defense. We agree with the defendant and, accordingly, reverse the judgment of the trial court.⁶

Additionally, the defendant claims that a second gag order imposed by the court on February 9, 2007, following the finding of contempt, was unjustified and unconstitutional. Specifically, the defendant argues that the trial court: (1) abused the discretion afforded by Practice Book § 9-10⁷ when it entered the gag order; (2) violated the defendant's first amendment rights by imposing an overly broad gag order; and (3) irreparably harmed the defendant by preventing it from complying with its statutory disclosure obligations. See General Statutes § 22a-263. The record, however, shows that the trial court entered the gag order as a sanction for the contempt finding.⁸ Because our reversal of the judgment of contempt necessarily vacates the associated sanction, it is unnecessary to address this claim.⁹

The record reveals the following facts and procedural history. During the course of this litigation, the plaintiffs filed a motion for relief for improper communications, alleging that a member of the defendant's board of directors (board) had sent to the plaintiffs, via a November 15, 2006 letter and a November 16, 2006 e-mail, misleading information suggesting that the plaintiffs "ha[d] the power to bring this suit to a halt and avert this situation." The plaintiffs' motion requested, inter alia, that the court restrain the defendant and its officers and directors from further communication, without approval of the court, with the plaintiffs regarding the litigation. On November 20, 2006, the court ordered that "[the defendant] and its officers and directors shall desist from any further communications with [the plaintiffs] regarding this lawsuit except upon prior approval of the court." Upon request, the court clarified that it was "trying to tailor the relief as narrowly as possible" and if the parties "have to conduct other business, that's between them, but nothing is to be mentioned or said about this [litigation]." The defendant did not appeal from the court's November 20, 2006 order.

A court trial was held between November, 2006, and January, 2007. On February 1, 2007, prior to the court rendering judgment, the defendant posted on its web-site a statement entitled "UPDATE ON NEW HARTFORD v. [CONNECTICUT RESOURCES RECOVERY AUTHORITY]—FEBRUARY 1, 2007," which included a discussion of the three year lawsuit, and statements such as "[t]he suit was originally filed because the [named plaintiff] didn't like the fact that [the defendant] had to raise disposal fees after the Enron bankruptcy," and "[t]his lawsuit boils down to the conflict between prudence and recklessness. ... It's hard to imagine that the couple of first selectmen who are driving this case would run their towns as recklessly as they want us to run [the defendant]." The website posting also included and contested three "claims" that it attributed to the plaintiffs' attorney.¹⁰ The plaintiffs filed a motion for contempt on February 8, 2007, which the defendant's attorneys did not receive until nearly 5 p.m. The motion for contempt alleged that the defendant's website posting was an improper attempt to contact the plaintiffs in violation of the November 20, 2006 order and that Paul Nonnenmacher, the defendant's director of public affairs, had admitted as much in an e-mail to a representative of the named plaintiff.¹¹

When the parties appeared before the court on February 9, 2007, less than one day after the defendant had received the motion, for a previously scheduled hearing,¹² the court indicated that it recently had received the plaintiffs' motion for contempt. Counsel for the plaintiffs stated that the defendant's attorney "indicated that he needs time to respond to [the motion for contempt]. We wanted to get that in front of the court, but we don't object to scheduling that for a hearing at a subsequent date if the court wishes to do that." The court responded that it was "concerned about what's transpired, so the court wishes to address that." After discussing other issues, including another allegedly improper communication sent to the plaintiffs by the defendant around January 26, 2007,¹³ the court indicated that it wanted to address the motion for contempt. When the court asked defense counsel about the web-site posting, he responded: "Your Honor, we didn't get these papers until almost 5 o'clock last night, and it's just not fair to have any hearing on that. We haven't had a chance to talk to ... Nonnenmacher [the author of the communications at issue] ... [Thomas] Kirk [the defendant's president] or anybody else about [anything] raised in the motion for contempt. We saw this issue for the first time last night at almost 5 [p.m.]." Defense counsel admitted that the plaintiffs' counsel had brought the website posting to his attention earlier in the week, but stated that he was unaware that it would be viewed as a contemptuous act until he received the motion for contempt and that he had not had a chance to read the entire website posting. Defense counsel stated that "frankly, I was busy last night getting ready for this hearing [on other matters], and I still haven't read all three pages of this, and it's just unfair to go forward on a motion for contempt."

The court responded: "Well, isn't it unfair to the court when the court has entered an order that there be no communication between the parties regarding the lawsuit to have something posted on the website that goes point by point regarding the very lawsuit? ... [I]t's pretty obvious to the court that it's a blatant violation of the court order." At that point, the attorneys and the court discussed the merits of the motion for contempt. During that discussion, defense counsel stated that the website posting was "a mistake in my view. I'd like to have a chance to look at it and talk to ... [Nonnenmacher] about why he did this." The court did not respond directly to defense counsel's request. The court stated that the website posting "talks about the trial. It talks about the witnesses testifying. It contradicts testimony. ... What if we had a jury case on this and some jurors saw it? We'd probably have to start all over again."¹⁴ Defense counsel stated that both parties had been contacted by the press, and the court replied that it was "going to take care of that today." The court stated: "The court finds that certainly the website posting is in direct contravention of the [November 20, 2006] court order. The [January 26, 2007] letter is right on the edge.¹⁵ It is also in violation of the court order. So the court finds [the defendant] in contempt of the prior court order. The court is going to order that the posting on the website be removed immediately, and if not removed, the court will impose a fine of $5000 per day for every day it is on the website.

The court is further going to order that ... from this day forward there is a gag order as to all parties in this case. There is to be no discussion of anything remotely relating to payments to the [plaintiffs], the lawsuit, anything that could be conceived other than between counsel and their clients in private, which is not to be released to the press or any other entity, only within attorney-client privilege."¹⁶

After further discussion on other matters, the court stated: "Just to be clear on the motion for contempt, the court finds [the defendant] in contempt of its order of November 20, 2006. [The defendant] is ordered to remove the [website] posting ... dated February 1, 2007, by closing of business today, Friday, February 9, 2007. There will be a $5000 fine imposed upon [the defendant] for each day said posting is on the website after today, February 9, 2007. ...

"The court further imposes upon all parties a gag order. They are not to have any communication. There will be no communication between [the plaintiffs and the defendant] ... regarding this litigation, or any ramification of this litigation, or what to do with proposed settlement funds that are coming in. That includes any and all communication on a website, letters, e-mails, any type of communication between the parties.

"The court wants to make it very clear. This is not a close call. This was a direct violation of the court order. Further violations, the court will not hesitate to bring the person in who violates and [will recommend that] further actions in the form of fines or ... criminal proceedings take place against that person."¹⁷ The court also clarified that the board could still function in public and try to carry...