Petition for Writ of Certiorari — Carey Canada, Inc. v. Hinely

Supreme Court brief1987

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Y FILED

8? “3 00 AUG 21 19897

JOSEPH F. SPANIOL, JR,

NO. CLERK

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM 1987

CAREY CANADA, INC.

Petitioner

VS:

JAMES E. HINELY, ET AL

Respondents

ON PETITION FOR WRIT OF CERTIORARI

TO THE SUPREME COURT OF GEORGIA

PETITION FOR CERTIORARI

E. FREEMAN LEVERETT

HEARD, LEVERETT, ADAMS &

PHELPS, P.C.

COUNSEL OF RECORD FOR PETITIONER

P. O. DRAWER 399

ELBERTON, GEORGIA 30635

404/283-2651

JOHN D. JONES

GREENE, BUCKLEY, DERIEUX & JONES

SUITE 1300, THE HURT BUILDING

ATLANTA, GEORGIA 30303

404/522-3541

DARLENE Y. ROSS

BRANNEN, WESSELS & SEARCY

P. O. BOX 8002

SAVANNAH, GEORGIA 31412

912/234-8875

OF COUNSEL

NO.

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM 1987

CAREY CANADA, INC.

Petitioner

VS:

JAMES E. HINELY, ET AL

Respondents

ON PETITION FOR WRIT OF CERTIORARI

TO THE SUPREME COURT OF GEORGIA

PETITION FOR CERTIORARI

QUESTIONS PRESENTED

(1) Whether, in an asbestos products

liability case, sanctions for failure to

make discovery of documents under a

request for production relating to

jurisdictional and sales issues are

violative of due process of law when the

sanctions exceed the scope of discovery

sought and adjudicate issues such as a

finding that (a) Defendant failed to

warn plaintiffs of the dangers of

asbestos-containing products (b)

Defendant is guilty ef negligence per se

knowledge of the dangers of asbestos in

order to maximize corporate profit in

disregard of adverse health effects upon

persons exposed to such products?

(2) Whether the trial court denied

defendant Canadian corporation due

process of law by imposing sanctions of

default and contempt for non-production

of documents which defendant was unable

to produce because prohibited from doing

so by the law of Canada?

PARTIES

The Petitioner, defendant in the

trial court below, is Carey Canada, Inc.,

oil in

a Canadian corporation, (hereinafter

Carey Canada). The named Respondent,

plaintiff below, is James E. Hinely.

This case, in all courts below, actually

involved twenty-six (26) similar cases

involving twenty-six (26) different

groups of plaintiffs.?

1. In the trial court, the cases were

treated as having been consolidated for

purposes of all pretrial rulings.

~iii-

TABLE OF CONTENTS

PAGE NO.

QUESTIONS PRESENTED... cccccccccccee il

PARTIES .ccccccccccccccccccccccccccces Ll

TABLE OF AUTHORITIES... -cceeccccceess vi

OPINIONS BELOW... ccccccccccccscceses 1

JURISDICTION... cccccccccccccccccccee L

STATUTORY AND CONSTITUTIONAL

PROVISIONS RELIED UPON....-eeeeceees 2

(a) Statute Involved........22-2- 2

(b) Constitutional Provision

Relied UpOn..ccccccccccccccs 3

STATEMENT OF THE CASE... cccccccccssee 4

FEDERAL QUESTIONS RAISED...-.-eeee4e- 9

REASONS FOR GRANTING THE WRIT OF

CERTIORARI .cccccccccccccccccccseccces Ld

(1) Imposition of Discovery

Sanctions Unrelated To The

Discovery Sought Violates Due

Process And Is Contrary To

Prior Decisions of This

Court ccccccccccccccccccccce 12

(2) Petitioner Carey Canada,

As A Canadian Corporation,

Was Denied Due Process

Of Law By The Adjudication

Of Default And Contempt For

-iv-

Failing To Produce Records

Which It Was Unable To

Produce Because Of

Prohibition Of Canadian

PPPvrrrererrerererrrrrrerrrrr 26

CONCLUSION. «cc ccccccccccece a 40

INDEX TO APPENDIX

APPENDIX

CERTIFICATE OF SERVICE

TABLE OF AUTHORITIES

CASES

Application of Chase

Manhattan Bank, 297 F2d 611

C2 GES. ZOE) 66 whee seb dKsKeaee

Bailey v. Alabama, 219 U.S.

219, 239, 55 L.Ed 191, 200

CiDRs) ob ocesuees e*eeee#8s: eeees#e a. a a ae

Carey Canada, Inc. v.

Hinely et al, 181 Ga. App.

364, 352 S.E.2d 398 (1986)......

Carey Canada, Inc. v.

Hinely, et al, 257 Ga. 150,

356 S.E.2d 202 (1987) .c.ccecceeee

Cine Forty-Second Street

Theatre v. United Artists,

602 F2d 1062 (2nd Cir. 1979)....

Dorsey v. Academy Moving &

Storage, 423 F2d 858 (5th

ad BOO l eek se eens 6% eoeeesee?#e#e?#s?

Emerick v. Fenick

Industries, 539 F2d 1379

(Sth Cir. 1976) .ccccccvcccccccee

English v. 2lst Phoenix

Corp., 590 F2d 723 (8th

Cir. 1979), cert. den. 444

U.S. 832 (1979) cc cccccccccccccce

Federal Maritime Commission

vy. Desmedt, 366 F2d 464,

467 (ZOE Cif. APSCl 6 osc ct ccveces

PAGE NO.

eee 34

coe 19

eee 19

eee 18

eee 34

ee to. we ae ae ay ee PI eo gp ee ay a TP ee eae ier eo ao ee ae Ty. a same” Do ot ag D ae

1 o- 4

Feingold v. Walworth Bros.,

144 N.E. 675, 238 N.W. 446

Ol >’ > err TT irre rere Re ee ee 18

First National Bank v. IRS,

271 F2d 616, 619 (2nd Cir.

1959), cert. den. 361 U.S.

948 (1960) ccc cere eee eereeeecerccees 34

Fjelstad v. American Honda

Motor Co., 762 F2d 1334

‘ (9th se fee . . ) e*evnseeses e*eeee#ee#e«# 19

Ford Motor Co. v. Carter,

239 Ga. 657, 662, 238

eB SR pg Pe eee ee 22

FTC v. Compagnie de

Saint-Gobain-Pont-A-Mousson,

636 F2d 1300, 1325 (D.C.

oy El: RR 36,38

Garner v. Louisiana, 368

O.8. 237s F mas 2G 267 (1961)... 40

Garrett v. Royal Bros. Co.,

(1969) -cccccces ROS OC OO Cee ereseeeres 22

Gipson Lumber Co. v.

Schickling, 56 Wis. 2d 164,

201 H.W. 24 SOO (1972) ccccccscccces 18

Gordon v. FTC, 427 F2d 578

9 ng TO 1970). e*eeeeseese#*#e#eee#ee#*e#¢t€## 37

Hammond Packing Co. v.

Arkansas, 212 U.S. 322

Se Depa GEPOOEl cccccccccess vcaw Bp bdekde

-vVii-

Re ee eee ee soe eA. ae ee Z

: 4

’

‘

; -

Harrah Independent School

District v. Martin, 440 U.S.

194, 59 L-EBd.2d 248 (1979) .cccccces

Harrigan v. Mason &

Winograd, Inc., 397 A2d 514,

121 make 209 eo >. > ae eoeenevensveneeete 18»

Hovey v. Elliott, 167 U.S.

409, 42 L.Ed. 215 (1897)......... 12,17,

In re Grand Jury Subpoena to

Continental Illinois National

Bank, 96 A2d 480, 464 N.Y.S.

2G 192 CASED casasccseseseseseccane

In re Oil Spill by Amoco

Cadez, 93 F.R.D. 840 (D.C.

Tide SOB ccccescccesssesceiccesses

In re Rubin, 769 F2d 611 (9th

Cie. SOG s ewanee ee cseaces ‘. ora £e eae

In Re Westinghouse Elecric

Corp. Uranium Contracts

Litigation, 563 F2d 922

CEUGR GEE s BEIT! 6 RS coo eee Reece ee es

In the Matter of Equitable

Plan Co., 185 F. Supp. 57

(DeCw Wak s BPGGP crccccvccaveccceses

Ings v. Ferguson, 282 F2d

14D CE2AG CLE « TOG oc cccccrcessccse 34

Insurance Corporation of

Ireland v. Compagnie Des

Bauxites de Guinea, 456 U.S.

694, 72 L.Ed.2d 492

C1 9GS) cc ceeede Sees hedecesocsacees 8,12

Levy v. Louisiana, 391 U.S.

68, 72, 20 L.Ed.2d 436 (1968)

Logan v. Zimmerman Brush Co.,

455 0.8. 422, 71 L.Ed.2d

265 (1982). e@eeoe#2s eeseeentee2ees3se#2e8e#e#€e#

Massey v. Hilton Heights

Park, Inc., 121 Ga. App. 214,

173 S.E.2d 396 (1970)........

Motorship Lines Ltd. v.

Federal Maritime Board, 295

Munoz-Santana v. U.S.

Immigration and

Nationalization Service, 742

P2G 561 (Sth Cir. 1984)......

National Hockey League v.

Metropolitan Hockey Club,

Inc., 427 U.S. 639, 49

Demee ee £47 CIDTE) ccccccceccce

O'Toole v. William J. Meyer

Co., 243 F2d 765 (Sth Cir.

LOST iswes rr rrry Ketheaweses

Pacquete Habana, The, 175

U.S. 677, 44 L.Ed. 320,

BOG APOE) cc scecss SESS CROC dees

Professional Seminar

Consultants v. Sino American

Technology, 727 F2d 1470 (9th

oy ee GS 2 rs

Regents of University of

Michigan v. Ewing, 474 U.S.

, 88 L.Ed.2d 523 (1985)..

-ix-

eeccee 40

bennee 22

ccccee 19

coves 42

coccee 18

ce ccce 37

ceccece i$

Tre te 40

Roadway Express Inc. v.

Piper, 447 U.S. 752, n. 14,

65 L.Ed.2d 488 (1980).........2.20.

Schulze v. Coy Kendall, 545

P2d 392, 218 Kan. 653 (1976).......

Sears Roebuck & Co. v.

Walker, 127 Ariz. 432, 621

P2d 938 (1980) .cccccccccccccccccece

Serwitz v. General Electric

Credit Corp., 174 Ga. App.

747, 331 S.E.2d 95 (1985)..........

Shelton v. Tucker, 364 U.S.

479, 5 L.Ed.2d 231 (1960)..........

Societe International v.

Rogers, 357 U.S. 197, 2

L.Ed.2d 1255 (1958).....--. 12,15,17,30,41

Societe Nationale v. U.S.

District Court, 482 U.S. P

96 L.Ed.2d 41 (1987) ..cccccccccccce

Speiser v. Randall, 357 U.S.

513, 2 L.Ed.2d 1460 (1958)...

The Pacquete Habana, 175 U.S.

677, 44 L.Ed. 320, 328 (1900)

Thompson v. Louisville, 362

U.S. 199, 206, 4 L.Ed.2d 654

CaP debate ae oe e@eeeeeee#ee#eegege#es#es

Tot v. United States, 319

U.S. 463, 87 L.Ed. 1519

(1943) .cccccccece Terrrrrrrrree es See

Trade Development Bank v.

Continental Ins. Co., 469 F2d

35 (2nd Git. yy | a

Trustees of Dartmouth College

v. Woodward, 4 Wheat. 518,

4 L-Ed. 629 (1819) .ccccccccee

United States v. First

National Bank of Chicago, 699

F2d 341 (7th Cir. 1983)......

United States v. First

National City Bank, 396 F2d

$94 (2nd Cic. 1968) ccccccccecs

United States v. Meyer, 398

F2d 66, (9th Cir. 1968)......

United States v. Standard Oil

Co. of New Jersey, 23 FRD 1

(D.C. N.Y. Toe céeseee e*eee#ee#se#feee?

United States v. Vetco, Inc.,

691 F2d 1281 (9th Cir. (1981).....

Vachon v. New Hampshire, 414

U.S. 478, 38 L.Ed.2d 666

(1974) wcccceccsccce eccccccccce

Vincent v. Ateliers de la

Motobecane, S.A., 193 N.J.

Super 716, 475 A2d 686 (1984)

Volkswagenwerk A. v. Superior

Court, 123 Cal. App. 3rd 840,

176 Cal. 874 (1981) .cccccecce

Vonderheyt v. Rogers, 251 F2d

17 (D.C. Cir. 1958) .ccccccccccccces

ayia

Weber v. Aetna Casualty &

Surety Co., 406 U.S. 164,

31 L.Ed.2d 768 (1972)........

Wyle v. R. J. Reynolds

Industries, Inc., 709 F2d 585

(Sth Circ. 1983) cccccccccceccece

STATUTES AND CONSTITUTIONAL

PROVISIONS

2B UGCA 1257 (Sd ccccccccccecs

0O.C.G.A. §9-11-37 (b) eeersreeeer

Rule 37-6 PRuPecaesccesoeseseees

Constitution of Georgia, Art.

VI, Sec. VI, Par. Westeooecees

Province of Quebec Business

Concerns Records Act, 1964,

Que. Rev. Stat. C. 278 (1964)

MISCELLANEOUS

Agnor, Use of Discovery Under

The Georgia CPA, §12-7, p.

265 (3rd Tit tceenbeebesétseosé

Note, Emerging Deterrence

Orientation In The Imposition

of Discovery Sanctions, 9l

Harv. L.R. 1033 (1978).......

Note, Foreign Nondisclosure

Laws and Domestic Discovery

Orders In Antitrust

Litigation, 88 Yale L.J. 612,

GiG (i979) cccses see eececsces

-xii-

r ! i * 7

Var at = a” a-S .

> = 4 pal aa 5 . . a 4

- aa he (a

Se eore Mg) lg

Fi ee ay

e Se ‘a —

7 ee ok

7 =

te : 4

Fe meh

is Woke a bh lie SIN i, eo

: - 2 - :

7 , [_ BN eat

“ a DLR Liste, 70 _w €

- : : a on :

- a ] i -

“ee " ; i

Pe I

us :

7 if

Note, Limitations On The

Federal Judicial Power To

Compel Acts Violating Foreign

Law, 63 Col. L.R. 1443 (1963)

Note, Ordering Production of

Documents From Abroad In

Violation of Foreign Law, 31

U. Chi. LR. 791 (1964) ......

Note, Standards for

Imposition of Discovery

Sanctions, 27 Maine L.R. 247,

CROFT OS 666d ChEeOKEROKE ORE OR ERES

Onkelinx, Conflict of

International Jurisdiction:

Ordering The Production of

Documents In Violation of the

Law of the Situs, 64

N.W.U.L.R. 487 (1969)........

Restatement (Second) of the

Foreign Relations Law of the

United States, SEGcccccccecces

8 Wright & Miller, Federal

Practice and Procedure, §2284

(SQOD. dD ecccesosnes cabeeeeeers

4A Moore's Fed. Prac., §37.03

(BOS) < esac oeeeeeereee eeeeeveeee

27 CJS 268-269, §86 ..... cee.

35A CJS 1048, §750...-eeeeeee

-xlii-

OPINIONS BELOW

The order of the State Court of

Chatham County adjudging defendant in

contempt and imposing sanctions is

unreported (R. 580).* The decision of

the Court of Appeals of Georgia, the

intermediate appellate court, is reported

as Carey Canada, Inc. v. Hinely et al,

181 Ga. App. 364, 352 S.E.2d 398 (1986).

(Appendix, p. 1). The decision of the

Supreme Court of Georgia is reported as

Carey Canada, Inc. v. Hinely, et al, 257

Ga. 150, 356 S.E.2d 202 (1987).

(Appendix, p. 42).

JURISDICTION

Jurisdiction is based on 28 USCA

1257(3), defendant having set up in the

courts below, a right, privilege and

immunity with respect to the sanctions

* References to the record refer to the

record transmitted to the Court of

Appeals of Georgia.

-l|-

imposed, under the Due Process Clause of

the Fourteenth Amendment to the

Constitution of the United States. The

order of the trial court was entered

December 31, 1984 (R. 584). Notice of

Appeal was timely filed on January 29,

1985 (R. 1). The decision of the Court

of Appeals of Georgia was rendered

November 20, 1986, rehearing denied

December 19, 1986. The decision of the

Supreme Court of Georgia was rendered May

27, 1987, rehearing denied June 17, 1987.

STATUTORY AND CONSTITUTIONAL

PROVISIONS RELIED UPON

(a) STATUTE INVOLVED

0.C.G.A. §9-11-37(b), in pertinent

part provides:

"Tf a party .. . faidis to

obey an order to provide or permit

discovery. . . the Court in which

the action is pending may make such

orders in regard to the failure as

are just and, among others, the

following:

-2-

(A) An order that the

matters regarding which the

order was made or any other

designated facts shall be

taken to be established for

the purposes of the action in

accordance with the claim of

the party obtaining the order;

(B) An order refusing to

allow the disobedient party to

Support or oppose designated

claims or defenses, or

prohibiting him from

introducing designated matters

in evidence;

pleadings or parts thereof, or

staying further proceedings

until the order is obeyed, or

dismissing the action or

proceeding or any part

thereof, or rendering a

judgment by default against

the disobedient party;

(D) In lieu of any of the

foregoing orders, or in

addition thereto, an order

treating as a contempt of

court the failure to obey any

orders except an order to

submit to a physical Or mental

examination;. ..

(b) CONSTITUTIONAL PROVISION RELIED UPON

Fourteenth Amendment to the

Constitution of the United States:

-3-

", . » Nor shall any State

deprive any person of life, liberty

Or property, without due process of

law. . .”

STATEMENT OF THE CASE

On May 30, 1980, James E. Hinely

filed Civil Action No. 80-3141 in the

State Court of Chatham County, Georgia,

against 22 defendants, including

Petitioner Carey Canada, claiming that

plaintiff was a carpenter who became

exposed to asbestos products either mined

Or manufactured by defendants, resulting

in injuries. The complaint asserted 4

causes of action based on negligence,

implied warranty, knowledge and

conspiracy to deprive, and strict

liability in tort (R. 17-21). Defendant

Carey Canada filed defensive pleadings

denying the essential allegations of the

complaint (R. 24). Susequently thereto,

the 25 other asbestos products liability

cases referred to in the contempt order

were filed in which Carey Canada was

named as a defendant.

Interrogatories, Requests for

Admission and Requests For Production of

Documents were filed by plaintiffs, the

latter, which are the only thing in issue

here, having been filed on December 21,

1982 (R. 262; Appendix, p. 46). Defen-

dant Carey Canada filed objections,

including the objection that production

would be contrary to the Canadian

Business Concerns Records Act of 1964,

which governed defendant as a Canadian

Corporation whose corporate offices were

located in Canada (R. 272).

The objections were overruled on

November 16, 1983, and defendant was

ordered to respond by December 9, 1983.

After defendant had exhausted a number of

proceedings challenging the order in the

state superior court and appellate

-5-

courts, and the filing of a further

response by defendant stating that

certain documents would be produced (R.

573), the State Court entered its order

of sanctions on December 31, 1984 which:

(1) Imposed a fine of $500 per day

from the date of the order requiring

discovery (Dec. 9, 1983) until the date

of the sanctions order, or $193,500;

(2) Relying on O.C.G.A.

§9-11-37(b), ordered as follows:

"1. The following facts,

matters and condition (sic)

established as true for purposes of

the above-referenced lawsuit:

(a) That Defendant Carey

Canada, Inc. did sell asbestos

containing products;

(b) That Plaintiffs were

exposed to the asbestos

containing products sold by

Defendant Carey Canada, Inc.;

suffered personal injury

and/or death as a result of

being exposed to the asbestos

containing products sold by

Defendant Carey Canada, Inc.;

-§-

(d) That the Defendant

Carey Canada, Inc., failed to

warn the Plaintiffs and each

of them of the dangerous

characteristics of their

asbestos-containing products

and is, therefore, guilty of

negligence as a matter of law;

(e) That the Defendant

Carey Canada, Inc. knowingly

suppressed and -overed up

knowledge of the dangers of

asbestos in order to maximize

corporate profits in complete

and utter disregard of the

adverse health effects upon

persons exposed to asbestos

products manufactured and sold

by Defendant Carey Canada,

Inc.;

2. That Defendant Carey

Canada, Inc. is prohibited from

submitting or offering any evidence

or testimony to contradict any facts

alleged by Plaintiffs or to support

any defenses alleged by Defendant

Carey Canada on any issues of

liability." (R. 584)

On appeal, the Court of Appeals of

Georgia rejected defendant's contention

that the contempt fine was criminal

contempt and hence in excess of the

statutory maximum of $500 per violation.

-7-

Second, the Court further recognized the

general principle, both as a matter of

statutory construction and due process,

that a sanction "must be specifically

related to the particular claim which was

at issue in order to provide discovery",

citing Insurance Corporation of Ireland

v. Compagnie Des Bauxites de Guinea, 456

U.S. 694, 707, 72 L.Ed.2d 492 (1982), and

that the sanction must "Support the

presumption that the refusal to produce

evidence. . . was but an admission of the

want of merit in the asserted defense",

citing Hammond Packing Co. v. Arkansas,

212 U.S. 322, 351, 53 L.Ed. 530 (1909)

(181 Ga. App. at 368-369). Based on

this, the Court of Appeals held that

sanction l(c) was error as it did not

"correlate with any documents requested",

and that Sanction 2, insofar as it

precluded defendant from contesting any

-8-

issue of liability, was also "beyond the

scope of the discovery requested" (181

Ga. App. at 369). The Court of Appeals

also rejected defendant's Fourteenth

Amendment due process claim that it was

improperly sanctioned for refusing to do

what the law of its sovereign forbade it

to de. (181 Ga. App. at 373).

The Supreme Court of Georgia granted

certiorari, and set aside the contempt

fine, but did not consider or disturb the

other holdings of the Court of Appeals.

257 Ga. 150; Appendix, p. 42.

FEDERAL QUESTIONS RAISED

In the trial court below, defendant

resisted all sanctions on the ground that

it was not in default (R. 554, 567). In

Plaintiffs' Brief in Support of their

Motion For Sanctions, plaintiffs conceded

that any sanction imposed could not

exceed the scope of the discovery sought,

declaring that the sanctions authorized

by Georgia law (0.C.G.A. §9-11-37[b] [2])

"[Mlay only relate to the matters and

issues on which discovery is being

frustrated", citing Agnor on Discovery,

§12-7. (R. 482). However, the trial

judge's order disregarded this admission

by plaintiffs and imposed the sanctions

complained of, going far beyond what was

authorized by law, or what plaintiffs

conceded was proper. Defendant thereupon

raised its due process question at the

earliest practical time, by enumeration

of errors on appeal to the Court of

Appeals (Enumeration Nos. 9, 13).

In defendant's objections to

plaintiffs' Requests for Production,

defendant also urged that the Request

was "in contravention of the Province of

Quebec's Business Concerns Records Act,

-10-

1964, Que. Rev. Stat. C. 278 (1964) and

expose the Defendant to liability for

contempt for violation of the Act" (R.

277, 278). When the trial court rejected

these objections and imposed sanctions

going beyond anything reasonably

anticipated,defendant at the first

opportunity asserted its due process

constitutional objection in its

Enumeration of Errors in the Court of

Appeals of Georgia.°

The Court of Appeals decided the due

process federal questions by rejecting

same (181 Ga. App. at 373, Divisions 7

and 9). The Supreme Court of Georgia,

whose review of decisions of the Court of

Appeals is discretionary, Constitution of

Georgia; Art. VI, Sec. VI, Par. V,

granted certiorari stating that it was

2. Enumeration Nos. 9, 13.

-ll-

particularly concerned only with the

criminal contempt fine (Order of February

25, 1987), and the Court in fact

addressed only this issue. 257 Ga. 150.

REASONS FOR GRANTING THE

WRIT OF CERTIORARI

(1) Imposition of Discovery Sanctions

Unrelated-To The Discovery Sought

Violates Due Process And Is Contrary

To Prior Decisions Of This Court

The due process challenge rejected

by the Court of Appeals of Georgia below

is one previously addressed by this Court

in Hovey v. Elliott, 167 U.S. 409, 42

L.Ed. 215 (1897); Hammond Packing Co. v.

Arkansas, 212 U.S. 322, 53 L.Ed.2d 530

(1909); Societe Internationale v. Rogers,

357 U.S. 197, 209, 2 L.~Ed2d 1255 (1958),

and Insurance Corp. of Ireland, Ltd. v.

Compagnie Des Bauxites De Guinea, 456

U.S. 694, 705, 72 L.Ed.2d 492 (1982).

~12-

Hovey v. Elliott held that it was a

denial of due process for a Court to

strike a party's answer and declare him

in default as punishment for contempt in

failing to obey a prior order of court,

for "The fundamental conception of a

court of justice is condemnation only

after hearing. To say that courts have

inherent power to deny all right to

defend an action and to render decrees

without any hearing whatever is, in the

very nature of things, to convert the

court exercising such an authority into

an instrument of wrong and oppression,

and hence to strip it of that attribute

of justice upon which the exercise of

judicial power necessarily depends." (167

U.S. at 414). Hammond Packing Company v.

Arkansas, supra, modified Hovey by

upholding an adjudication of default and

the imposition of penalties sought by the

-~l|3-

| ieeeneecmmeanaiii

me ;

complaint when the defendant had refused

to submit to depositions and produce

records relating to all issues, including

liability. Hovey was distinguished on the

reasoning that:

"In a sense, of course, the

striking out of the answer and

default was a punishment, but it was

only remotely so, as the generating

source of the power was the right to

create a presumption flowing from

the failure to produce. The

difference between mere punishment,

as illustrated in Hovey v. Elliott,

and the power exerted in this, is as

follows: In the former, due process

of law was denied by the refusal to

hear. In this, the preservation of

due process was secured by the

presumption that the refusal to

produce evidence material to the

administration of due process was

but an admission of the want of

merit in the asserted defense. The

want of power in the one case and

its existence in the other are

essential to due process, to

preserve in the one and to apply and

enforce in the other. In its

ultimate conception, therefore, the

power exerted below was like the

authority to default or to take a

bill for confessed because of a

failure to answer, based upon a

presumption that the material facts

alleged or pleaded were admitted by

-14-

ee Si a BTR tet SHB IR CEI wel:

not answering, and might well also be

illustrated by reference to many other

presumptions attached by the law to the

failure of a party to a cause to

specially set up or assert his supposed

rights in the mode prescribed by law."

(212 U.S. at 351).

In Societe Internationale, supra,

dealing with Rule 37, FRCP, on which the

Georgia statute is based, the Court, in

holding that the district court had erred

in dismissing a complaint by a foreign

corporation seeking to recover property

seized under the Trading With The Enemy

Act, based upon its refusal to produce

documents, declared that "The provisions

of Rule 37 which are here involved must

be read in light of the provisions of the

Fifth Amendment that no person shall be

deprived of property without due process

of law, and more particularly against the

opinions of this Court in Hovey v

Elliott, 167 US 409, . . . and Hammond

Packing Co. v. Arkansas, 212 US 322,...

=} $=

wir oe

7 :

y 7. = = :

+ ues

“

These decisions establish that there are

constitutional limitations upon the power

of courts, even in aid of their own valid

processes, to dismiss an action without

affording a party the opportunity for a

hearing on the merits of his cause. The

authors of Rule 37 were well aware of

these constitutional considerations. See

Notes of Advisory Committee on Rules,

Rule 37, 28 USC (1952 ed.), p. 4325."

(357 U.S. at 209). Insurance Company of

Ireland, supra, upheld application of

Rule 37(b) (2) to the establishment of

jurisdictional facts where the defendants

had refused to produce business records

bearing on the jurisdictional question,

declaring that the "application of a

legal presumption to the issue of

personal jurisdiction does not itself

violate the Due Process Clause. . ."

(456 U.S. at 709). The Court recognized

-16-

the due process implications of adjudging

facts as established when there was no

connection between the discovery sought

and the facts found, referring to Hovey,

Hammond and Societe Internationle and the

proposition that "Due Process is violated

only if the behavior of the defendant

will not support the Hammond Packing

presumption" (456 U.S. at 705-706). The

Court further concluded that "a proper

application of Rule 37(b)(2) will, as a

matter of law, support such a presump-

tion" (Id., p. 706), and that "Rule

37(b) (2) contains two standards--one

general and one specific-- that limit a

district court's discretion. First, any

sanction must be "just"; second, the

sanction must be specifically related to

the particular "claim" which was at issue

in the order to provide discovery. While

the latter requirement reflects the rule

-l7-

of Hammond Packing, supra, the former

represents the general due process

restrictions on the court's discretion."

(456 U.S. at 707).

These rules have uniformly been

followed by the authorities. United

States v. Meyer, 398 F2d 66, 77 (9th Cir.

1968); O'Toole v. William J. Meyer Co.,

243 F2d 765 (5th Cir. 1957); Gipson

Lumber Co. v. Schickling, 56 Wis. 2d 164,

201 N.W. 2d 500 (1972); Sears Roebuck &

Co. v. Walker, 127 Ariz. 432, 621 P2 938,

942 (1980); Feingold v. Walworth Bros.,

144 N.E. 675, 238 N.Y. 446 (1924);

Harrigan v. Mason & Winograd, Inc., 397

A2d 514, 517, 121 R.I. 209 (1979);

Schulze v. Coy Kendall, 545 P2d 392, 397,

218 Kan. 653 (1976); English v. 21st

Phoenix Corp., 590 F2d 723 (8th Cir.

1979), cert. den. 444 U.S. 832 (1979);

Agnor, Use of Discovery Under The Georgia

-18-

PES

CPA, §12-7, p. 265 (3rd Ed.); 27 CJS

268-269, §86; 35A CJS 1048, §750; 4A

Moore's Fed. Prac., §37.03 (2-3); Logan

Vv. Zimmerman Brush Co., 455 U.S. 422,

429, 71 L.Ed.2d 265 (1982); Emerick v.

Fenick Industries, 539 F2d 1379 (5th Cir.

1976); Roadway Express Inc. v. Piper, 447

U.S. 752, n. 14, 65 L.Ed.2d 488 (1980);

Dorsey v. Academy Moving & Storage, 423

F2d 858, 860 (5th Cir. 1980); In re

Rubin, 769 F2d 611 (9th Cir. 1985); Wyle

v. R. J. Reynolds Industries, Inc., 709

F2d 585 (9th Cir. 1983); Munoz-Santana v.

U.S. Immigration and Nationalization

Service, 742 F2d 561 (9th Cir. 1984);

Professional Seminar Consultants v. Sino

American Technology, 727 F2d 1470 (9th

Cir. 1984); Fjelstad v. American Honda

Motor Co., 762 F2d 1334 (9th Cir. 1985).

In this case, the refusal of

defendant does not support the sanctions

-19-

imposed. In their Motion To Compel,

plaintiffs characterized the scope of the

Requests For Production as being related

to sales, solicitation, and "relevant

jurisdictional evidence” (R. 327).

3. The requests for production relate to

these matters: Records retrievable

system for sales (No. 1); names and

addresses of Georgia purchasers (Nos. 2,

3), and companies to whom defendant sent

mailings (No. 4); ledgers, journals,

etc., relating to Georgia companies

making payments to Carey Canada for

asbestos products (No. 5); information as

to orders or requests to purchase from

Georgia customers (No. 6); information as

to shipments into Georgia of products

(No. 7); information as to shipments of

asbestos products to any persons anywhere

after July, 1970 (No. 8); information as

to invoices for sales both in Georgia and

elsewhere (Nos. 9, 10); travel expense

records for travel by officials to

Georgia (Nos. ll, 12, and 13); records

relative to participation by Carey Canada

in any meetings or conventions in Georgia

(No. 14); directories maintained by

defendant (No. 15); employee lists and

adddresses of company employees (No. 16);

records of telephone calls to Georgia

(No. 17); and records relating to

advertisements placed by defendant in any

-20-

Oca tials Baer ies

Yet, the sanctions in question are not

related at all to the Requests. Sanction

l1(d) first establishes that defendant

failed to warn plaintiffs of the

dangerous characteristics of asbestos

products. While advertising matter may

have failed to disclose any warnings, the

more pertinent aspect is the unsupported

assumption that defendant knew of the

dangers of asbestos, and none of the

Requests sought this type of evidence at

all. The second part of sanction l(d) is

even more remote, for it adjudicated that

defendant "is therefore guilty of

negligence as a matter of law" (R. 584).

None of the Requests dealt with

liability, as the Court of Appeals itself

(Footnote 3 continued...

publication (No. 18). (R. 262).

Appendix, p. 46. In plaintiffs' motion

to compel, referred to above, plaintiffs

grouped and characterized the Requests

substantially the same as set forth in

this note.

-2li-

recognized with respect to Sanctions l(c)

and (2) (181 Ga. App. at 369), and this

sanction is even more far-fetched because

under Georgia law, ". . .[T]he conduct of

a party cannot be declared to be

negligence per se unless it has been so

declared by a lawmaking body." Ford

Motor Co. v. Carter, 239 Ga. 657, 662,

238 S.E.2d 361 (1977); Garrett v. Royal

Bros. Co., 225 Ga. $33, 170 S.E. 2d 294

(1969). No statute or other law declares

that failure to warn is negligence or

otherwise illegal. This is a jury

question under the facts of each case for

the jury to resolve. Massey v. Hilton

Heights Park, Inc., 121 Ga. App. 214,

217-219, 173 S.E.2d 396 (1970).

Sanction l(e), that defendant

"knowingly suppressed and covered up the

dangers of asbestos in order to maximize

corporate profits in complete and utter

-22-

disregard of the adverse health effects

upon persons exposed. . ." (R. 584),

assumes (1) That defendant knowingly

Selb tee le Lio a ial ir a

Wh AS e ee erento Sexe Sehr oe Tio A il

suppressed, etc., (2) In disregard of

health effects, (3) For the purpose of

sb TglRGR Ae ahaa oe

maximizing corporate profits (R. 584).

None of the documents sought related to

company or other documents Showing tht

defendant had knowledge during the period

in question that asbestos was dangerous.

The Requests did not seek discovery of

chemical test results, inter-company

memos ordering that such information not

be divulged, nor any company records

stating that information had to be

Suppressed in order to avoid a reduction

in sales and corresponding reduction in

profits. The sanction here presumes not

only a deliberate act, and technical

Knowledge, but also a specific state of

aes

. sy

ona

Rs,

sah

Fe.

“«

..9

‘3

Me ag Pee mentee

EARS ee

mind, and none of this is supported by

any documents sought by the Requests.

The proposition here is similar to

the due process rule governing a

statutory presumption, under which "a

statutory presumption cannot be sustained

if there be no rational connection

between the fact proved and the ultimate

fact presumed, if the inference of the

one from proof of the other is arbitrary

because of lack of connection between the

two in common experience." Tot v. United

States, 319 U.S. 463, 467, 87 L.Ed. 1519

(1943). "It is apparent that a

constitutional prohibition cannot be

transgressed indirectly by the creation

of a statutory presumption any more than

it can be violated by direct enactment.

The power to create presumptions is not a

means of escape from constitutional

restrictions." Bailey v. Alabama, 219

-24-

U.S. 219, 239, 55 L.Ed 191, 200 (1911);

Speiser v. Randall, 357 U.S. 513, 526, 2

L.Ed.2d 1460 (1958). The adjudication of

facts against a party to a case without

any evidence or lawful presumption

arising from a default from which an

evidentiary inference logically can be

derived, strikes at the very heart of due

process. "By the law of the land is most

clearly intended the general law; a law

which hears before it condemns; which

proceeds upon inquiry, and renders

judgment only after trial. The meaning

is, that every citizen shall hold his

life, liberty, property, and immunities,

under the protection of the general rules

which govern society." (Argument of

Daniel Webster in Trustees of Dartmouth

College v. Woodward, 4 Wheat. 518, 581, 4

L.Ed. 629 [1819]).

-25-

“ad o as * sx Fs

ie” bee ; a5 ;

Be i 7 ate

vn .

AES DAE See eos See tte Sees

The Section 37(b)(2) finding here is

inexplicable in the face of the Court of

Appeals' holding that a declaration of

liability could not be supported. See

181 Ga. App. at 369. One Count of the

complaint asserted as a separate cause of

action, "knowledge and conspiracy to

deprive” (R. 17-21). Consequently,

plaintiffs may attempt to use this

adjudication not only as an adjudication

of liability, but also as a basis for

punitive damages in 26 asbestos products

liability cases. Plaintiffs also may

attempt to use it as an admission or

estoppel in other similar cases for the

proposition that Carey ‘Canada has been

found guilty of know:sgiy suppressing the

harmful effects of asbestos, for the

express purpose of increasing corporate

profits "in complete and utter disregard

of the adverse health effects upon ‘

-26-

persons exposed to asbestos products. .

." (R. 584). Yet there has been no trial

and no evidence to this effect, only a

judicial edict unsupported by anything

except a presumption having no valid

basis whatever.

(2) Petitioner Carey Canada, As A

Canadian Corporation, Was Denied Due

Process Of Law By The Adjudication

Of Default And Contempt For Failing

To Produce Records Which It Was

Unable To Produce Because Of

Prohibition of Canadian Law.

Petitioner, as a Canadian

Corporation, objected to the Request For

Production of Documents on grounds that

production was prohibited by the law of

Canada, specifically, the Province of

Quebec Business Concerns Records Act (R.

273), which declares:

"2. Subject to section 3, no

person shall, pursuant to or under

any requirement issued by any

legislative, judicial or adminis-

trative authority outside the

-27-

Province, remove or cause to be

: removed, or send or cause to be

\ sent, from any place in the Province

; to a place outside the Province, any

document or resume or digest of any

document yelating to any concern."

(R. 282).

Section 3 makes exceptions for

Situations where documents are sent to a

4. Respondents urged below that since

documents were found to be in the United

States, petitioner could not be heard to

urge the Canadian law as a defense.

However, the order of production and the

sanctions order were not limited to

documents in the United States (R. 370,

581). Indeed, Petitioner had agreed with

Respondents to make those documents

available, but Respondents, apparently

anticipating a favorable order on the

sanctions motion, notified Petitioner

that they would not proceed with the

agreed on inspection, but would rest on

their motion so as not to "waive any

rights" (R. 608). Subsequently, the

documents were furnished to plaintiffs'

co-counsel. The trial judge also was

incorrect in stating in the contempt

order that defendant had not disclosed

the existence of the records in the

United States. This was not correct, as

the Court was advised in a letter, and a

disclosure also had been made at a

hearing.

-28-

‘

branch or affiliate outside the Province

in the ordinary course of business (R.

282); Section 4 authorizes the Attorney

General to apply for injunction to

prevent removal of records (R. 283); and

Section 5 provides criminal penalties (R.

283-4). Provision is made by a separate

act for examination of witnesses and

production of documents in Canada

pursuant to Court order (R. 285). <A copy

of the order of a Canadian Court, dated

July 21, 1982, responding to an order in

South Carolina litigation affecting

Petitioner was also submitted, enjoining

petitioner from removing or sending out

any documents (R. 295), as well as an

affidavit of defendant's Florida counsel

testifying to the events in the Canadian

Court on the application brought by the

Attorney General, in which he stated "I

was told that if Carey Canada, Inc.

-29-

allowed the inspection to take place, the

officers and directors of Carey Canada

would be fined and/or jailed if they

allowed the inspection to take place” (R.

297).

The trial court overruled these

objections (R. 370) and subsequently held

petitioner in contempt, fining it

$193,500, and imposing the sanctions

under Section 37 of the Georgia Civil

Practice Act previously challenged in

Part 1 hereof (R. 584). These rulings

were enumerated as error on due process

grounds (Enumeration Nos. l, 2, 9, 10,

11), and rejected by the Court of

Appeals. (181 Ga. App. at 373). In

dealing with this very question in

Societe Internationale v. Rogers, 357

U.S. 197, 210, 2 L.Ed.2d 1255 (1958), in

a case where the plaintiffs’ complaint

for recovery of property under the

-30-

Trading With The Enemy Act was dismissed

for refusal to make production contrary

to the law of Switzerland, this Court

held:

"These two decisions (Hovey v.

Elliott and Hammond Packing Co.)

leave open the question whether

Fifth Amendment due process is

violated by the striking of a

complaint because of a plaintiff's

inability, despite good-faith

efforts, to comply with a pretrial

production order. The presumption

utilized by the Court in the Hammond

Case might well falter under such

circumstances. Cf. Tot v United

States, 319 US 463, 87 L ed 1519, 63

S Ct 1241. Certainly substantial

constitutional questions are

provoked by such action."

;

}

Ate SL

Sala Ais Jetn ited

In Societe, the Court held that it

was not error to overrule the foreign law

objection in that case, dealing with a

public law question, since the question

more properly could be resolved on motion

for sanctions, and of course, in Societe,

the sanctions were set aside:

(Wle think that Rule 37 should not be

Bik hai

Maiteldtte’ As Saulad ia cei S

construed to authorize dismissal of this

complaint because of petitioner's

noncompliance with a pretrial production

order when it has been established that

failure to comply has been due to

inability, and not to willfulness, bad

faith, or any fault of petitioner." (357

U.S. at 212). Even so, the Court

recognized that a different rule might

also apply at the objection stage in

cases not involving laws having strong

public interest implications:

"We do not say that this ruling

would apply to every situation where

a party is restricted by law from

producing documents over which it is

otherwise shown to have control.

Rule 34 is sufficiently flexible to

be adapted to the exigencies of

particular litigation. The

propriety of the use to which it is

put depends upon the circumstances

of a given case, and we hold only

that accommodation of the Rule in

this instance to the policies

underlying the Trading with the

Enemy Act justified the action of

the District Court in issuing this

production order." (357 U.S. at

205).

-32-

—

These due process limitations have

been referred to in other cases. See

Roadway Express Inc. v. Piper, 447 U.S.

752, n. 14, 65 L.Ed.2d 488 (1980); Logan

v. Zimmerman Brush Co., 455 U.S. 422,

429, 71 L.Ed.2d 265 (1982); Emerick v.

Fenick Industries, 539 F2d 1379 (5th Cir.

1976); Harrigan v. Mason & Winograd,

Inc., 121 R.I. 215, 397 A2d 514, 517

(1979); Sears Roebuck & Co. v. Walker,

127 Ariz. 432, 621 P2d 938, 942 (1980).

Other cases have followed Societe,

as a matter of interpretation of the

Federal Discovery Rules, and refused to

impose sanctions where a party's

production of records would subject it to

the penal laws of its country of origin,

without necessarily invoking due process

considerations. In Re Westinghouse

Electric Corp. Uranium Contracts

Litigation, 563 F2d 922, 997 (10th Cir.

-33-

1977); In re Oil Spill by Amoco Cadez, 93

F.R.D. 840 (D.C. Ill. 1982); Vincent v.

Ateliers de la Motobecane, S.A., 193 N.J.

Super 716, 475 A2d 686 (1984); Federal

Maritime Commission v. Desmedt, 366 F2d

464, 467 (2nd Cir. 1966); Cine

Forty-Second Street Theatre v. United

Artists, 602 F2d 1062, 1066 (2nd Cir.

1979); Volkswagenwerk A. v. Superior

Court, 123 Cal. App. 3rd 840, 176 Cal.

874 (1981); Application of Chase

Manhattan Bank, 297 F2d 611 (2nd Cir.

1962); First National Bank v. IRS, 271

F2d 616, 619 (2nd Cir. 1959), cert. den.

361 U.S. 948 (1960); In the Matter of

Equitable Plan Co., 185 F. Supp. 57 (D.C.

N.Y. 1960), mod. sub nom. Ings v.

Ferguson, 282 F2d 149, 152 (2nd Cir.

1960); United States v. First National

City Bank, 396 F2d 894 (2nd Cir. 1968);

-34-

| eee a eee

Trade Development Bank v. Continental

Ins. Co., 469 F2d 35 (2nd Cir. 1972).

Independently of other

considerations, a Court of the United

States should not, as a matter of

international law and comity, order a

party to violate the law of his country.

Ings v. Ferguson, supra (282 F2d 149,

152-3); Application of Chase Manhattan

Bank, Supra (297 F2d at 613); United

States v. First National Bank, supra (396

F2d at 902); Volkswagenwerk, A. v.

Superior Court, supra (123 Cal. App. 3rd

at 881); Note, "Ordering Production of

Documents From Abroad In Violation of

Foreign Law", 31 U. Chi. L.R. 791, 792

(1964). "The cases exhibit general

agreement that it is improper for a

United States Court to order disclosure

that would violate foreign law." Note,

"Limitations On The Federal Judicial

-35-

Power To Compel Acts Violating Foreign

Law", 63 Col. L.R. 1443, 1464 (1963).

"From the many protests against the

attempts of United States courts to

secure documents which are located

abroad, one thing seems quite clear:

every foreign government considers this

attempt as an infringement upon

sovereignty and as beyond the

jurisdiction of the United States

according to international law".

Onkelinx, Conflict of International

Jursidiction: Ordering The Production of

Documents In Violation of the Law of the

Situs", 64 N.W.U.L.R. 487, 499 (1969).

Such orders as entered below have

always engendered international

controversies. FTC v. Compagnie de

Saint-Gobain-Pont-A-Mousson, 636 F2d

1300, 1325 (D.C. Cir. 1980).

"International Law is part of our law,

-36-

and must be ascertained and administered

by the courts of appropriate jurisdiction

as often as questions of right depending

upon it are duly presented for their

determination." The Pacquete Habana, 175

0.8. 677, 760, 44 Lb.B@. 320, 328 (1960).

Less drastic alternatives to

sanctions should be resorted to. Shelton

vy. Tucker, 364 0.8. 479, 481, 5 L.Ba.20

231 (1960); Gordon v. FTC, 427 F2d 578

(D.C. Cir. 1970); Vonderheyt v. Rogers,

251 F2d 17 (D.C. Cir. 1958); Serwitz v.

General Electric Credit Corp., 174 Ga.

App. 747, 749, 331 S.E.2d 95 (1985);

Note, "Standards for Imposition of

Discovery Sanctions", 27 Maine L.R. 247,

265 (1975). The Court might order the

party to apply to the Courts of his

country for leave to produce the

documents. Motorship Lines Ltd. v.

Federal Maritime Board, 295 F2d 147, 156

a3J

(D.C. Cir. 1961); Trade Development Bank

v. Continental Ins. Co., 469 F2d 35,

40-41 (2nd Cir. 1972); United States v.

Standard Oil Co. of New Jersey, 23 FRD l,

4 (D.C. N.Y. 1958); In re Grand Jury

Subpoena to Continental Illinois National

Bank, 96 A2d 480, 464 N.Y.S. 2d 792

(1983); United States v. First National

Bank of Chicago, 699 F2d 341 (7th Cir.

1983); Note, "Foreign Nondisclosure Laws

and Domestic Discovery Orders In

Antitrust Litigation", 88 Yale L.J. 612,

626 (1979); Note, “Ordering Production of

Documents From Abroad In Violation of

Foreign Law", 31 U. Chi. L.R. 791, 801

(1964). Another alternative would be to

apply the balancing test of the

Restatement (Second) of the Foreign

Relations Law of the United States, §40.

Federal Trade Commission v. Compagnie De

Saint-Gobain-Pont-A-Mousson, 636 F2d

-38-

1300, 1326 (D.C. Cir. 1980); United

States v. Vetco, Inc., 691 F2d 1281, 1288

((9th Cir. 1981); "Foreign Nondisclosure

Laws and Domestic Discovery Orders In

Antitrust Litigation", 88 Yale L.J. 612,

619 (1979); Onkelinx, supra (64 N.W.U.

L.R. 487 at 501); United States v. First

National City Bank, supra, or, the Court

below could have entered an order limited

to a finding of the specific facts to

which the Request For Production was

directed.

Resort to the Hague Convention would

be appropriate with respect to countries

which have signed that agreement. See

Societe Nationale v. U.S. District Court,

482 U.S. __—, - 96 L.~Ed.2d 461 (1987).

(Canada has not). Conviction of contempt

and imposition of sanctions under the

discovery laws clearly raises due process

implications. "Just as ‘conviction upon

-39-

a charge not made would be sheer denial

of due process', so is it a violation of

due process to convict and punish a man

without evidence of his guilt." Thompson

v. Louisville, 362 U.S. 199, 206, 4

L.Ed.2d 654 (1960); Garner v. Louisiana,

368 U.S. 157, 163, 7 L.Ed.2d 207 (1961);

Vachon v. New Hampshire, 414 U.S. 478,

480, 38 L.Ed.2d 666 (1974). Substantive

due process protects the citizen as well

as procedural due process. Harrah

Independent School District v. Martin,

440 U.S. 194, 197, 59 L.Ed.2d 248 (1979);

Regents of University of Michigan v.

Ewing, 474 U.S. ___, 88 L.Ed.2d 523

(1985). Condemnation because of

circumstances beyond the control of a

person has been held to deny equal

protection. Weber v. Aetna Casualty &

L.Ed.2d 768 (1972); Levy v. Louisiana,

-40-

391 U.S. 68, 72, 20 L.Ed.2d 436 (1968).

That same proposition was recognized in

Societe Internationale, quoted above,

supra (357 U.S. at 210), the Court

declaring:

"In view of the findings in this

case, the position in which

petitioner stands in this

litigation, and the serious

constitutional questions we have

noted, we think that Rule 37 should

not be construed to authorize

dismissal of this complaint because

of petitioner's noncompliance with a

pretrial production order when it

has been established that failure to

comply has been due to inability,

and not to willfulness, bad faith,

or any fault of petitioner." (357

U.S. at 212).

a Fen ed He

| CONCLUSION

Both issues presented here, that the

scope of discovery sanctions should be

germane to the discovery sought, and that

a party should not be sanctioned for

refusing to produce what he is unable to

produce by the law of his origin and

-4]-

~A . ~ A 8 ee eer ae ~~ eer a ee lL LR lh e

citizenship, are most often addressed by

this Court in construing the Federal

Rules of Civil Procedure and applying

rules of federal common and international

law. In this case, however, the sanc-

tions were imposed by a state court, and

this fact compels an adjudication on due

process grounds. Because of the

importance of the questions, they should

be resolved definitively by this Court.

The Court specifically declined to

consider the constitutional issue in

Societe, preferring instead to resolve it

on the basis of federal rules interpre-

tation (357 U.S. at 212). In National

Hockey League v. Metropolitan Hockey

Club, Inc., 427 U.S. 639, 49 L.Ed.2d 747

(1976), however, there is dicta

Supporting a punitive approach which

‘seems contrary to the doctrines of Hovey

and Hammond Packing Co., a fact which has

-42-

created some confusion. See 8 Wright &

Miller, Federal Practice and Procedure,

§2284 (Supp.) and some criticism, see

Note, The Emerging Deterrence Orientation

In The Imposition of Discovery Sanctions.

91 Harv. L.R. 1033 (1978). The decision

below will have an immediate effect upon

the outcome of these 26 cases by the

default adjudication of such liability

and punitive damage issues as knowing

suppression, concealment, and failure to

warn. Equally, if not more significant,

however, is the potential precedential

impact on many other asbestos products

liability cases throughout the United

States. The petition for certiorari

should be granted.

-43-

Respectfully Submitted,

}

E. FREEMAN LEVERETT

HEARD, LEVERETT, ADAMS &

PHELPS, P.C.

COUNSEL OF RECORD

P. O. Drawer 399

Elberton, GA 30635

Tel: 404/283-2651

DARLENE Y. ROSS

BRANNEN, WESSELS & SEARCY

OF COUNSEL

P. O. Box 8002

Savannah, GA 31412

Tel: 912/234-8875

JOHN D. JONES

GREENE, BUCKLEY, DERIEUX

& JONES

OF COUNSEL

Suite 1300

The Hurt Building

50 Hurt Plaza

Atlanta, GA 30303

Tel: 404/522-3541

ATTORNEYS FOR PETITIONER

—-44-

PERNT ES NNT LEN IANA TR HEI NTS RNY TE TERETE NUE MAS NYC BO SIRT TAME SEM IRCCS IPCC 2 HATE AAR MM SAP RED EN ee seeueeneememens

(1)

(2)

(3)

INDEX TO APPENDIX

Decision Of The Court of Appeals of

Georgia - Carey Canada, Inc. v.

Hinely, et al, No. 72278-72303, 181

Ga. App. 364, 352 S.E.2d 398 (1987)

Decision of Supreme Court of Georgia

Carey Canada, Inc. v. Hinely, et al,

No. 44246, 257 Ga. 150, 356 S.E.2d

202 (1987)

Plaintiff's Requests For Production

RESPIR NENT ya UN Pa ots Ne ICE TT IF nee BT ray Sera et ce nee eee SOP, IN FH ARETE YN me On

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OSES SURE PTY APE em tetas a By Camara

(1) Decision Of The Court of Appeals of

Georgia - Carey Canada, Inc. v.

Hinely, et al, No. 72278-72303, 181

Ga. App. 364, 352 S.E.2d 398 (1987)

POPE, Judge.

Defendant Carey Canada, Inc. brings

these 26 appeals (f.n. 1, list of cases,

omitted) from an order entered in each

case imposing sanctions pursuant to OCGA

§9-11-37(b). As the issues raised in

these appeals are the same, we have

consolidated them for the purpose of

review.

On May 30, 1980 plaintiffs brought

the first of these 26 actions for

asbestos products liability against

defendant and others in the State Court

of Chatham County. These cases were

consolidated for the purpose of

discovery, and special discovery

-l|-

procedures were established by order

dated July 23, 1982. The trial court

directed that because of the special

nature of asbestos litigation, the July

23 order "shall be deemed to be an order

compelling discovery." On December 21,

1982 plaintiffs sought the production of

certain company records or documents from

defendant. On January 11, 1983 defendant

objected to this request on a variety of

grounds, including the constraints of the

Province of Quebec's Business Concerns

Records Act, Que. Rev. Stat. c. 278

(1964). This act provides that business

concerns in Quebec (such as defendant)

may not send business-related documents

outside the province, subject to certain

exceptions. On February 8, 1983

plaintiffs filed a motion to compel the

production of documents; this mation was

also opposed by defendant on the basis of

-2-

the Business Concerns Records Act. On

April 8, 1983 plaintiffs filed a motion

for letters rogatory (see OCGA

§9-11-28(b)) which, as counsel for all

parties agreed, could be utilized to

legally circumvent the obstacles posed by

the Business Concerns Records Act. On

August 5, 1983 the trial court ordered

its clerk to issue letters rogatory to

the appropriate authority in Canada.

This order was objected to by defendant

and, following a hearing on the matter,

appears to have been abandoned. On

November 17, 1983, after notice and

hearing, the trial court overruled all of

defendant's objections to production of

documents and directed defendant to

produce said documents no later than

December 9, 1983. Defendant then

instituted a variety of legal maneuvers

in an unsuccessful attempt to obtain

-3-

relief from or interlocutory review of

the November 17 order. On October 3, 1984

plaintiffs moved for the imposition of

sanctions pursuant to OCGA § 9-11-37(b).

A hearing on this motion was held on

October 22, 1984 and on December 31, 1984

the trial court entered the order here

appealed.

1. Defendant's fifteenth

enumeration cites as error the entry of

the December 31, 1984 order because the

judge who made the order, Hon. James W.

Head, had taken the oath of office as

judge of the Chatham County Superior

Court on December 27, 1984. The record

discloses that Judge Head was elected as

judge of the superior court for a term

beginning January 1, 1985 and that he

resigned as judge of the state court

effective on that date. We are aware of

no constitutional or statutory bar to

-4-

Judge Head's continuing to serve as judge

of the state court until the effective

date of his resignation from that office,

notwithstanding his having taken the oath

of office of judge of the superior court

a few days before his term of office was

to begin. See Ga. Const. 1983, Art. VI,

Sec. VII, Par. I; OCGA § 15-6-6. It

follows that Judge Head was authorized to

enter the subject order on December 31,

1984.

2. Defendant's first and

eighth enumerations attack plaintiff's

request for production of documents as

"too broad." The trial court found that

the documents sought by plaintiffs were

"relevant and necessary to the discovery

process calculated to lead to the

discovery of admissible evidence in the

litigation which is complicated, which

involves multiple parties with various

-5-

business relationships in mining,

producing, manufacturing, and

distributing products containing

asbestos."

Discovery is "an integral

necessary element of our civil

Wide latitude is given to make

discovery possible. The broad

the discovery rules, under the

Practice Act, is to enable the

prepare for trial so that each

and

practice.

complete

purpose of

Civil

parties to

party will

know the issues and be fully prepared on

the facts. Discovery is specifically

designed to fulfill a two-fold

purpose:

issue formulation and factual revelation.

The use of the discovery process has been

held to be broadly construed.

[(Cits]"

Travis Meat, etc., Co. v. Ashworth, 127

Ga. App. 284, 285-86, 193 S.E.2d 166

(1972). "There is no territorial

limitation in our discovery statutes as

-6-

to location of witnesses, documents,

assets, etc. [Cits]" Thrift v. Vi-Vin

Prods., 134 Ga. App. 717, 718, 215

S.Ed.2d 709 (1975). "Discovery is

available under the CPA to any party in

any court regarding any matter, not

privileged, which is relevant to the

subject matter involved in the pending

action; it is not a ground for objection

that the information sought will be

inadmissible at the trial if the

information sought appears reasonably

calculated to lead to the discover of

admissible evidence. [Cit.]" Morton v.

Gardner, 242 Ga. 852, 857, 252 S.Ed.2d

413 (1979).

"Good cause for the issuance of a

protective order designed to frustrate

discovery must be clearly demonstrated.

[OCGA § 9-11-26(c).] Such cause

necessarily is not established by

-7-

stereotyped or conclusional statements,

bereft of facts. The trial court does

have a wide discretion in the entering of

orders permitting or preventing the use

of . . . discovery which [is] oppressive,

unreasonable, unduly burdensome or

expensive, harassing, harsh, insulting,

annoying, embarrassing, incriminating or

directed to wholly irrelevant and

immaterial or privileged matters, or as

to matter concerning which full

information is already at hand. [Cit.]"

Young v. Jones, 149 Ga. App. 819, 824,

256 S.Ed.2d 58 (1979). See Sorrells v.

Cole, 111 Ga. App. 136(2a), 141 S.Ed.2d

193 (1965). "It is contemplated that the

trial [court] will exercise a sound and

legal discretion in the grant or denial

of protective orders. Such are intended

to be protective--not prohibitive--and,

until such time as the court is satisfied

-8-

by substantial evidence that bad faith or

harassment motivates the [discoveror's]

action, the court should not intervene to

limit the scope of pretrial discovery."

Travis Meat, etc., Co. v. Ashworth,

Supra, 127 Ga. App. at 288-89, 193 S.W.2d

166.

We will not burden this opinion with

a lengthy factual analysis of plaintiffs'

request for production. In view sf the

standards set forth above, suffice it to

say that we have reviewed said request in

light of defendant's objections thereto

and find no abuse of discretion in the

trial court's overruling same. Cf. E.H.

Siler Realty, etc., v. Sanderlin, 158 Ga.

App. 796 (2), 282 S.E.2d 381 (1981),

wherein a request for "all documents"

intended for use as evidence at the trial

of the case was found to be outside the

permissible scope of discovery, but a

=Q--

request for "all documents” relied upon

to demonstrate and support facts relevant

to the litigation would be within the

permissible scope (sic) discovery;

Bullard v. Ewing, 158 Ga. App. 287, 279

S.Ed.2d 737 (1981), wherein a request for

the name, address and telephone number of

every individual, corporation or company

for wnom the defendant performed

construction or building repair work

Since 1975 was found to be unreasonably

broad and too general. See generally

Vaughn & Co. v. Saul, 143 Ga. App. 74(4),

237 S.Ed.2d 622 (1977).

3. Defendant's second and

forth enumerations challenge the

imposition of sanctions adjudicating

liability in this case as not relating to

the issues made by the request for

production. Pursuant to OCGA § 9-11-37

(b) (2) (A, B, C) the trial court imposed

-10-

the following sanctions: "l. The

following facts, matters and conditions

are established as true for purposes of

[these lawsuits]: (a) That Defendant

Carey Canada, Inc. did sell asbestos

containing products; (b) That Plaintiffs

were exposed to t”e asbestos containing

products sold by Defendant Carey Canada,

Inc.; (c) That Plaintiffs have suffered

personal injury and/or death as a result

of being exposed to the asbestos

containing products sold by Defendant

Carey Canada, Inc.; (d) That the

Defendant Carey Canada, Inc., failed to

warn the Plaintiffs and each of them of

the dangerous characteristics of their

asbestos-containing products and is,

therefore, guilty of negligence as a

matter of law; (e) That the Defendant

Carey Canada, Inc., Knowingly suppressed

and covered up knowledge of the dangers

-ll-

of asbestos in order to maximize

corporate profits in complete and utter

disregard of the adverse health effects

upon persons exposed to asbestos products

manufactured and sold by Defendant Carey

Canada, Inc.; 2. That Defendant Carey

Canada, Inc. is prohibited from

submitting or offering any evidence or

testimony to contradict any facts alleged

by Plaintiffs or to support any defense

alleged by Defendant Carey Canada on any

issues of liability."

The question here is not whether

this court as an original matter would

have applied these sanctions; it is

whether the trial court abused its

discretion in so doing. Insurance Corp.

of Ire. v. Compagnie Des Bauxites de

Guinea, 456 U.S. 694, 707, 102 S.Ct.

2099, 2106, 72 L.Ed.2d 492 (1982); see

Dean v. Gainesville Stone Co., 120 Ga.

-12-

App. 315, 170 S.Ed.2d 348 (1969). OCGA §

9-11-37(b) (2) "contains two standards--

one general and one specific--that limit

a [trial] court's discretion. First, any

sanction must be 'just'; second, the

sanction must be specifically related to

the particular 'claim' which was at issue

in the order to provide discovery." Ins.

Corp. of Ire., supra, 456 U.S. at 707,

102 S.Ct. at 2106. See Agnor, Use of

Discovery Under the Ga. Civil Practice

Act (3rd ed.), §12-6.

As to the "justice" of the sanctions

imposed, the trial court in its order

noted that plaintiffs filed their request

for production of documents on December

21, 1982. The court found that "[elvery

effort by this Court to effect discovery

without any order to compel was made by

this Court only to meet (sic) with a direct

refusal to discovery. Following the

-|3-

futile efforts of this Court to effect

discovery voluntarily by said Defendant

Carey Canada this Court ordered the

production of the documents in its Order

of November 16, 1983. Defendant Carey

Canada to date [December 31, 1984] has

failed to produce the documents ordered

by this Court. . . As to the production

of documents, in every hearing held by

this Court prior to the order compelling

discovery defendant steadfastly refused

to produce any documents requested under

the claim that the documents were (1) in

Canada and (2) the Canadian laws

prohibited disclosure of such records.

An interesting event occurred in Chatham

County in the Hall of Justice in the

Federal District Court, Southern

District, Savannah Division prior to this

Court issuing its orders to compel on

November 16, 1983. A disclosure was made

-1|4-

to the Federal Judge presiding in the

asbestos cases pending for trial in that

forum, that Defendant Carey Canada

possessed relevant documents to the

asbestos litigation in the State of

Florida, U.S.A. The Defendant Carey

Canada did not disclose this information

to the Court nor has the Defendant to

this date disclosed to this Court that

such documents exist.

"(Tlhis Court after notice and

hearing to all parties heard Plaintiffs'

Motion for Sanctions against said

Defendant Carey Canada for failing to

produce the documents requested. The

hearing of the sanctions was held after

all decisions were rendered by the

Appellate Courts of this State. Based

upon the record of these asbestosis (sic)

cases, based upon the efforts of the

presiding Judge in these cases to

-15-

effectuate meaningful discovery without

orders compelling discovery, based upon

Defendant Carey Canada's refusal to

[provide] discovery until ordered to

discover by this Court not only as to the

production of documents but also as to

the other methods of discovery initiated

by Plaintiffs, the Court can arrive at no

other finding but that the Defendant

Carey Canada, willfully and intentionally

refused to discover prior to and

subsequent to the order of this Court

compelling discovery. The Defendant has

failed to comply with the Order of this

Court to produce the documents ordered to

be produced. The refusal to produce the

documents by Defendant Carey Canada was

and is a continuing willful and

intentional evasion of the discovery

process as well as the orders of this

Court. Defendant has totally abused the

-16-

discovery process provided under the Laws

of Georgia." These factors amply

demonstrate the "justice" of the trial

court's order. Accord Ins. Corp. of

Ire., supra at 707-08, 102 S.Ct. at

2106-07. See Swindell v. Swindell, 233

Ga. 854(3), 213 S.£.2d 697 (1975); Rubin

v. Cindyreal, 171 Ga. App. 45, 318

S.Ed.2d 520 (1984).

As to the second standard--

that the sanction must be specifically

related to the particular claim which was

at issue in the order to provide

discovery--only two of the sanctions

imposed give us pause, numbers l(c) and

2. The remaining sanctions are clearly

related to the claims at issue. As to

sanction l(c)--that plaintiffs have

suffered personal injury and/or death as

a result of being exposed to the asbestos

containing products sold by defendant--

-l7-

plaintiffs concede that this finding does

not correlate with any of documents

requested. This sanction therefore does

not support "'the presumption that the

refusal to produce evidence. . . was but

an admission of the want of merit in the

asserted defense.' Hammond Packing [Co.

v. Ark., 212 U.S. 322, 351 (29 SC 370

[380], 53 LE 530) (1909)]." Ins. Corp.

of Ire., supra, 456 U.S. at 709, 102

S.Ct. at 2107. It follows that sanction

number 2--prohibiting defendant from

contesting any issue of liability--is

likewise beyond the scope of the

discovery requested. Sanctions 1(a),(b),

(d) and (e) are affirmed; sanction l(c)

is reversed. To the extent sanction 2

relates to sanctions 1l(a),(b),(d) and

(e), it is affirmed; to the extent it

purports to go further, it is reversed.

-18-

4. Defendant's third and fifth

enumerations of error assert that the

trial court exceeded its powers by

imposing a fine of $500 per day for

failure to comply with the order

compelling production of documents. The

trial court imposed the following fine

for contempt of court: "Under 0O.C.G.A.

9-11-37(b) (2) (D) in addition to the other

sanctions issued herein the Court finds

the said Defendant Carey Canada in

willful contempt of this Court for each

day it has failed to comply with the

order of this Court requiring it to

produce records to the Plaintiffs, which

Defendant knowingly had in its control

and custody in the United States of

America. Under [0.C.G.A. 15-7-4(5)] the

Court fines said Defendant Carey Canada

the sum of $500.00 for each day

commencing and including December 9,

-19-

1983, and each day thereafter as a

continuing contempt to the date of this

order. And upon failure of said Defendant

Carey Canada to comply with said Order of

November 16, 1983, upon notice and

hearing the Court shall consider further

fines. The Defendant, Carey Canada, may

produce said records and purge itself of

further fines for non compliance with the

orders of this Court."

OCGA § 15-7-4(5) limits the

jurisdiction of state courts to "[tlhe

punishment of contempts by fine not

exceeding $500.00 or by imprisonment not

exceeding 20 days, or both. . ."

Defendant contends that the citation for

contempt in this case is criminal in

nature, rather than civil, in that the

record shows but one violation of the

discovery order, regardless of the number

of days the violation continues.

=20«

Defendant thus asserts that the trial

court's authority to punish therefor is

limited to a one-time imposition of the

sanctions provided in the statute. In

other words, the thrust of defendant's

argument is that the trial court exceeded

its jurisdiction in treating each day of

defendant's violation of the order

compelling discovery as a separate

contempt for the purpose of imposing

sanctions.

"Proceedings for contempt are

of two classes, punitive [criminal] and

remedial [civil]. A proceeding of the

former class is intended to punish the

offender for a past act of omission or

commission which has disturbed the

regular proceedings of the court,

interfered with its proper functioning,

resisted its authority, or reflected

contempt upon it, and the authcrized

wR «

penalty in such a case is that prescribed

by [statute]; the latter or remedial

proceeding is instituted to preserve and

enforce the rights of private parties,

and may be resorted to as a means of

compelling obedience to such court orders

or duties as the offenders may wilfully

or fraudulently fail or refuse to

perform; and in such cases of continuing

contempt it is within the power of

competent courts to imprison the

refractory party until he shall have

obeyed the precept. [Cits.]" Hancock v.

Kennedy, 22 Ga. App. 144(1), 95 S.E. 735

(1918); Davis v. Davis, 138 Ga. 8(1), 74

S.E.830 (1912). As a practical matter a

corporation may not be imprisoned, but it

may be fined. State v. Shepherd Constr.

Co., 248 Ga. 1, 5, 281 S.E.2d 151, cert.

den., 454 U.S. 1055, 102 S.Ct. 601, 70

L.-Ed.2d 591 (1981). It follows that

-22-

where imprisonment cannot be utilized, a

per diem fine may be imposed, within

statutory limits, until the recalcitrant

party performs the decree of the court.

17 C.J.S. Contempt §98. See Kenimer v.

State of Ga., 81 Ga. App. 437(6), 59

S.E.2d 296 (1950). See also In re

Pruitt, 249 Ga. 190, 193, 288 S.E.2d 208

(1982). Thus, whether or not a fine or

imprisonment is imposed is not a

distinguishing test for determining to

which class a contempt proceeding

belongs. 17 C.J.S. Contempt §5(2).

"In all contempts, it is true, there

is an element of criminality, involving

as they do the willful disobedience of

orders or decrees made in the

administration of justice, but a contempt

proceeding is not always a criminal

proceeding." Drakeford v. Adams, 98 Ga.

722, 724, 25 S.E. 833 (1896). "Generally

-23-

the classification as to 'civil' or

‘criminal' contempt is one depending on

the facts of each case." City of Macon v.

Massey, 214 Ga. 589, 590, 106 S.Ed.2d 23

(1958). ""'A major factor in determining

whether a contempt is civil or criminal

is the purpose for which the power is

exercised.'" Ensley v. Ensley, 239 Ga.

860, 861, 238 S.Ed.2d 920 (1977). "TAI

contempt is considered civil when the

punishment is wholly remedial, serves

only the purposes of complainant, and is

not intended chiefly as a deterrent to

offenses against the public. The polar

concepts are ‘'punitive' versus

‘remedial.'" 17 C.J.S. Contempt § 5(2),

at p. 13.

Applying the foregoing legal

precepts to the facts in this case, we

are persuaded that the contempt charged

and adjudicated was not criminal, but

-24-

civil. In levying the fine the trial

court was not acting sua sponte or at the

instance of the government through a

prosecuting officer; rather, it lent a

helping hand to a civil litigant, a

Suppliant for aid. Compelling discovery

to an obstructed litigant, not

vindication of the public justice, was

the apparent purpose of the fine, and of

the fine in all its parts. What is plain

from the trial court's contempt order is

the fact that the assessment was made in

a genuine endeavor to coerce defendant

into providing the discovery ordered

without any further obstruction and

delay. See, e.g., Fox v. Capital Co.,

299 U.S. 105, 108-09, 57 S.Ct. 57, 59, 81

L.Ed. 67 (1936). Moreover, the trial

court treated the violation of the order

compelling discovery as a continuing

contempt which defendant had the power to

-25-

rectify, rather than a single, completed

act of contempt. Compare Warner v.

Martin, 124 Ga. 387 (4), 52 S.E. 446, 4

Am. Ann. Cas. 180 (1905). Under these

circumstances, OCGA § 15-7-4(5) provides

no basis for reversal of the judgment

entered. Cf. Hancock v. Kennedy, supra,

22 Ga. App. 144 at (2), 95 S.E. 735.

5. The fine imposed by the

trial court totals $193,500. Defendant's

sixth enumeration of error asserts that

the punishment imposed constitutes cruel

and unusual punishment under federal and

state constitutional provisions.” The

action of a trial court in punishing a

party for contempt will not be controlled

2. Defendant's argument in these appeals

makes no distinction between the state

and federal constitutional provisions

cited. Accordingly, for our purposes

here, we need not address any substantive

differences (if, indeed, there are any)

between them.

-26-

absent an abuse of discretion. Howard v.

Durand, 36 Ga. 346 (2), 91 Am. Dec. 767

(1867). "The punishment can not be

cruel, unusual, or excessive, but must be

reasonable in view of the particular

facts and circumstances." Brooks v.

Sturdivant, 177 Ga. 514, 516, 170 S.E.

369 (1933). Where the purpose of a fine

is to compel compliance with the court's

order, the court must consider "the

character and magnitude of the harm

threatened by continued contumacy, and

the probable effectiveness of any

suggested sanction in bringing about the

result desired. It is a corollary of the

above principles that a court which has

returned a conviction for contempt must,

in fixing the amount of a fine to be

imposed as a... . means of securing

future compliance, consider the amount of

defendant's financial resources and the

-27-

ECO EEE Oe re ———eEVOoOOUTL eee

consequent seriousness of the burden to

that particular defendant." United

States v. United Mine Workers of America,

330 U.S. 258, 304, 67 S.Ct. 677, 701, 91

L.Ed. 884 (1947).

In light of the foregoing

principles, we think the record clearly

warrants the fine imposed. According =o

its own advertisement, defendant is an

international corporation which is "one

of the world's largest producers of

asbestos fibre." It is doubtful that a

nominal fine would prove effective in

ending defendant's continuing contumacy,

particularly in light of the history of

this case which provides a factual

predicate ee the trial court's finding

of “willful” contempt. Moreover, there

is no evidence that defendant is unable

to pay the fine or that the assessment is

unduly burdensome. We agree with

-28-

defendant that the fine imposed is

substantial, but we find no basis in the

record for concluding that

this constitutes cruel and unusual punishment.

The holdings in Kenimer v. State of

Ga., 83 Ga. App. 264, 63 S.E.2d 280

(1951), and its prior appearance, 81 Ga.

App. 437 (7), supra, do not require a

result different from that reached here.

Those cases, involving criminal contempt,

are limited to the facts therein stated.

Curtis v. State, 102 Ga. App. 790,

799-800, 118 S.Ed.2d 264 (1960).

Moreover, "'where the [punishment]

imposed by the trial court is within the

limit fixed by the statute, it will not

be set aside. . . on the ground that the

sentence imposed is excessive and the

punishment cruel and unusual, and,

therefore, in violation of the

Constitution of this State. ..'" Id. at

-29-

800, 118 S.E.2d 264. As is apparent from

our holding in Division 4, supra, the

fine imposed in this case is within

statutory limits, and thus, is not

violative of state constitutional

provisions.

Nor are we persuaded by defendant's

contention that the fine here is dispro-

portionate to the offense. Defendant

argues that as a Canadian corporation

subject to the laws of Canada, it

justifiably declined to produce the

requested documents because to do so

would place it in violation of Canadian

law. However, the fine imposed here