# Opposition Brief — National Democratic Policy Committee v. United States

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Opposition Brief
- **Published:** January 1, 1989
- **Citation:** 493 U.S. 918

## Text

Bry OQ eT-- -*

K

= FILED
SEP 21 1989

JOSEPH F. SRANICL. JR.

—

In the Supreme Court of the Gnited States
OctToBER TERM, 1989

NATIONAL Democratic Poticy CoMMITTEE, PETITIONER

Vv.

Unitep STATES OF AMERICA

ON PETITION FOR A WRIT OF CERTIORARI TO
THE UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT

BRIEF FOR THE UNITED STATES IN OPPOSITION

-

KENNETH W. STARR
Solicitor General

Epwarp S.G. Dennis, Jr.
Assistant Attorney General

Patry Merkamp STEMLER
Attorney

Department of Justice
Washington, D.C. 20530
(202) 633-2217

QUESTION PRESENTED

Whether the court of appeals correctly upheld the
district court’s imposition of civil contempt sanctions
against petitioner for refusing to comply with grand jury
subpoenas.

;

. "tas aPeiy Fre ss ae ee oS Pe ee ae ee

TABLE OF CONTENTS

Page
os ome Wars 66 00 0s ee EE ee 1
GEES oe ee oe ee ee ee l
eg es 2 ae ea a 2
EE ee re eee ee ee 9
eee aa a ee ea a ON a oR eS 16
TABLE OF AUTHORITIES
Cases:
Balla v. Idaho State Bd. of Corrections, 869 F.2d
es G55 6. see wee eee 13
Celotex Corp. v. Catrett, 477 U.S. 317 (1986)... . 11-12
Commodity Futures Trading Comm'n v. Premex, Inc.,
ee ES re 11

Grand Jury Impaneled Jan. 21, 1975, In re, 529 F.2d
543 (3d Cir.), cert. denied, 425 U.S. 992 (1976) . 15
Grand Jury Proceedings, In re, 795 F.2d 226 (lst Cir.
1986), cert. denied, 479 U.S. 1064 (1987) .... 2,3
4-5, 10, 11, 14
Grand Jury Witness, In re, 835 F.2d 437 (2d Cir.
EMER aaa wid % b5660b 6 2 6 Ob ew = 14, 15
International Business Machines Corp. v. United States,
493 F.2d 112 (2d Cir. 1973), cert. denied,

gE a 15
Kitchen, In re, 706 F.2d 1266 (2d Cir. 1983) ..... 11
McNeil v. Director, 407_U.S. 245 (1972) ........ 11
NAACP vy. Claiborne Hardware Co., 458 U.S. 886

ee a ee ee we 13

ee, nee, ee SP RUOOD ww ct we ee 11

eee

pe es se ae ee se el le ee ee

iv

Cases—Continued: Page

Perfect Fit Industries, Inc. vy. Acme Quilting Co.,

673 F.2d 53 (2d Cir.), cert. denied, 459 U.S. 832

Pr as ee a ae ae 15
Shillitani v. United States, 384 U.S. 364 (1966) ... 15-16
Stotler & Co. v. Able, 870 F.2d 1158 (7th Cir. 1989) 13
United States v. City of Yonkers, 856 F.2d 444 (2d Cir.

sf 1988), cert. denied, 109 S. Ct. 1527 (1989) ... 15

United States v. Danenza, 528 F.2d 390 (2d Cir. 1975) 11
United States v. United Mine Workers, 330 U.S. 258

CHD Keene oe Te oe Ree awe es 14
Washington-Baltimore Newspaper Guild v. Washington
Post Co., 626 F.2d 1029 (D.C. Cir. 1980) ..... 13

Statutes and rule:

I 6a date ain ate dia ie elbhels a Z,
I ee Sk ea ler Te ewe 2
Se OE oa. os ag eh 0k es eb Waa 8 7

In the Supreme Court of the Gnited States
OcToBER TERM, 1989

No. 89-320
NatTionaL Democratic Poticy ComMITTEE, PETITIONER
v.

Unitep STaTEs OF AMERICA

ON PETITION FOR A WRIT OF CERTIORARI TO
THE UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT

BRIEF FOR THE UNITED STATES IN OPPOSITION

OPINIONS BELOW

The opinion of the court of appeals (Pet. App. la-15a)
is reported at 871 F.2d 156. The opinion of the district
court (Pet. App. 16a-19a) is unreported.

JURISDICTION

The judgment of the court of appeals (Pet. App. 22a)
was entered on March 29, 1989. A petition for rehearing
was denied on May 30, 1989 (Pet. App. 23a-24a). The
petition for a writ of certiorari was filed on August 24,
1989. The jurisdiction of this Court is invoked under 28
U.S.C. 1254(1).

2

STATEMENT

1. Petitioner was the subject of a criminal investigation
launched several years ago by a federal grand jury sitting
in the District of Massachusetts. The grand jury was
investigating possible violations of federal law, including
credit card fraud and mail fraud, in violation of 18 U.S.C.
1029 and 1341. The investigation related to the activities
of petitioner and others in connection with soliciting
political campaign contributions for Lyndon LaRouche and
other candidates. Petitioner and others were suspected of
fraudulently altering credit card donations to reflect charges
for larger sums in order to obtain and keep the accrued
interest from issuing banks; once the donors informed those
banks that the larger charges were unauthorized, petitioner
and others would return the principal but retain the accrued
interest. See Jn re Grand Jury Proceedings, 795 F.2d 226,
227-228 (ist Cir. 1986), cert. denied, 479 U.S. 1064 (1987);
note 4, infra; Gov’t C.A. Br. 2.

On February 6, 1985, one week after service was first
refused, petitioner was served with a grand jury subpoena
calling for specific documents covering a certain time
period related to the criminal investigation. The subpoena
directed petitioner, through a representative, to appear before
the grand jury on February 7 and produce “[a]ny and all
records relating to fundraising by, through, or on behalf of
[petitioner], including “records and/or correspondence
relating to the use of credit card accounts and/or charges
for fundraising purposes.” C.A. App. 343, 345. Peti-
tioner’s representative did not appear before the grand jury
on February 7, nor did petitioner produce the subpoenaed
records. As a result, petitioner’s grand jury appearance was
rescheduled for February 14. Once again, however, peti-

i

3

tioner ignored the subpoena. /n re Grand Jury Proceed-
ings, 795 F.2d at 227-228; Gov’t C.A. Br. 3.'

On the government’s motion, the district court issued
an order directing petitioner to show cause why it should
not be held in contempt. The court scheduled a hearing for
March 29, 1985. Petitioner did not appear at that hearing.
After finding that petitioner had been served with the
subpoena and that its failure to comply was without just
cause, the district court adjudged petitioner in contempt.
The court ordered petitioner “to pay the sum of $10,000 per
day to the Clerk of the United States District Court for
Massachusetts until such time as [petitioner] shall fully
comply with said subpoena.” Jn re Grand Jury Proceed-
ings, 795 F.2d at 228 (internal quotation marks omitted).
The co stayed its order until April 2. /bid.

On April 3, 1985, petitioner filed a motion to vacate
the contempt order and quash the subpoena. After a |
hearing, the district court denied that motion. In re Grand
Jury Proceedings, 795 F.2d at 228.?

With the coniempt fine mounting for each day of
violation, petitioner in early April suggested that it finally
would appear before the grand jury and comply with the
subpoena. On April 9, the district court therefore deferred:
ruling on petitioner’s motion to purge its contempt pending

‘The grand jury had also issued subpoenas to three other firms
suspected of fraud in connection with soliciting campaign contributions
for Lyndon LaRouche and other candidates. Those firms, Campaigner
Publications Inc., Fusion Energy Foundation, and Caucus Distributors,
Inc., likewise refused to comply with the subpoenas and also were
ultimately subjected to civil contempt sanctions. See generally /n re
Grand Jury Proceedings, 795 F.2d 226 (1st Cir. 1986), cert, denied, 479
U.S. 1064 (1987).

? Petitioner did not file a timely notice of appeal from the

contempt order; that order therefore became final in 1985. Seé In re
Grand Jury Proceedings, 795 F.2d at 229. .

4

its expected appearance before the grand jury, bui petitioner
failed to make arrangements to appear. As a result, the
district court on -April 22 entered an order of partial
summary judgment in the amount of $70,000 against
petitioner for its failure to comply with the grand jury
subpoena from April 2 through April 8. Jn re Grand Jury
Proceedings, 795 F.2d at 229; Gov’t C.A. Br. 4.

In spite of that order, petitioner persisted in its non-
compliance. On May 21, 1985, the district court held a
hearing to determine whether petitioner had started to
comply. The government told the court that petitioner had
produced some, but not all, of the responsive documents
and explained that petitioner had failed to send to the grand
jury a representative capable of verifying that it was in fact
turning over all fundraising records demanded by the
subpoena. The court then directed petitioner to designate
an official who could testify before the grand jury as to
whether petitioner had fully complied with the subpoena.
Petitioner refused to heed the court’s directive and did not
send any official to testify. Accordingly, on July 19 the
district court denied petitioner’s motion to purge its con-
tempt and quash the subpoena. /n re Grand Jury Proceed-
ings, 795 F.2d at 229; Gov’t C.A. Br. 5.

2. On August 2, 1985, with the contempt fine mount-
ing each day in light of petitioner’s continued noncom-
pliance, petitioner appealed from the district court’s initial
contempt order, its partial summary judgment order, and its
most recent order refusing to purge the contempt or quash
the subpoena. In an order dated December 5, 1985, the
court. of appeals dismissed petitioner’s appeal from the
initial contempt order, since petitioner had not filed a timely
notice of appeal from that order. In addition, the court held
that the district court’s denial of the motion to quash was
a nonappealable order. See Jn re Grand Jury Proceedings,

5

795 F.2d at 229. Finally, on July 3, 1986, the court of
appeals affirmed the $70,000 partial summary judgment -
order. /d. at 228-230. _

3- On July 9, 1986, the government contacted petition-

| er in an effort to obtain compliance with the subpoena. By
September 1, however, petitioner still had not acted. The
government therefore filed a second motion for partial
summary judgment in the amount of $5,110,000 against
petitioner for its failure-to comply with the grand jury
subpoena from April 9, 1985, through September 1, 1986.
Petitioner opposed the motion, claiming ti ‘t had fully
complied with the subpoena; petitioner also asked the court
to order the government to produce its evidence of noncom-
pliance at a hearing. Gov't C.A. Br. 9-10.

On October 6, 1986, federal agents executed search
warrants at offices in Quincy, Massachusetts, and Leesburg,
Virginia, that were associated with the suspected illicit
fundraising for Lyndon LaRouche. The agents seized a .
substantial number of documents that had been demanded
by the grand jury subpoena served on petitioner.’ There-
after, on November 12, the government filed an affidavit by
FBI Special Agent Martha Wilkes, substantiating its claim
of petitioner’s noncompliance. Specifically, Agent Wilkes

»

\

> That same day, the federal grand jury returned a 117-count
indictment against Lyndon LaRouche and individuals and firms asso-
ciated with his activities. See Gov't C.A. Br. 10.

On January 27, 1989, LaRouche and six other individuals were
convicted and sentenced to terms of imprisonment for federal criminal
offenses committed in connection with frauduient fundraising activities
in the Eastern District of Virginia. United States v. LaRouche, Crim.
No. 88-243-A (E.D. Va.), appeal pending (4th Cir.). As a result of the
successful prosecution in the Eastern District of Virginia, the govern-
ment has ‘not pursued similar charges in the District of Massachusetts

¢ against those defendants who were convicted in the Virginia criminal
case. ;

ee ee

6

attested that thousands of index cards, which catalogued and
tracked individual donors in order to coordinate fundraising,
were found in those offices; a number of those cards
contained notations to petitioner. Agent Wilkes further
stated that many of the cards contained notations predating
the issuance of petitioner’s subpoena, and that none of the
index cards had previously been produced before the grand
jury. Pet. App. 5a; Gov’t C.A. Br. 10-12; see C.A. App.
482, 487 (samples of cards with notations to petitioner
attached to Agent Wilkes’ affidavit).

On December 12, 1986, the district court denied
petitioner’s motion to stay proceedings on the government’s
partial summary judgment motion, but gave petitioner 20
days (later extended to January 9, 1987) within which to
respond to the government’s proof. On January 19, 1987,
petitioner filed a supplementary memorandum in opposition
to the governmeni’s motion, together with a supporting
affidavit, claiming that it had already “‘produced a wealth
of material,’” and that “no one has ever contended that the
[index] cards belonged to [petitioner].” C.A. App. 512; see
Pet. App. 6a; Gov’t C.A. Br. 14-15.

On February 24, 1987, after reviewing the submissions
filed by both the government and petitioner, the district
court found that “the uncontroverted record shows that the
critical index cards called for by the subpoena were not
produced, although clearly available for production to the
grand jury.” Pet. App. 18a-19a.* The court further found
that “[w]hile a supplemental memorandum in opposition [to
the government’s partial summary judgment motion] was
filed * * * on behalf of [petitioner] * * *, no factual issue

_ “As the district court further noted, “the record * * * shows
that many of the index cards were burned.” Pet. App. 19a.

7

material to this matter was put in dispute.” Jd. at 19a.°
Accordingly, the district court “accept[ed] the verified and
undisputed facts of the Wilkes affidavit,” ibid., and thus
granted the government’s motion for partial summary
judgment against petitioner in the amount of $5,110,000.
Id. at 21a.

Petitioner then moved for reconsideration or, in the
alternative, a stay pending appeal. Petitioner claimed,
among other things, that it could no longer be held in
contempt for failing to comply with the original subpoena
since the term of the grand jury had expired in January
1986. C.A. App. 579-583. On May 31, 1987, the district
court denied petitioner’s motion. /d. at 595.

4. On appeal, petitioner contended that the district
court erred in assessing massive contempt fines in its
February 26, 1987, order, since the government had already
seized the subpoenaed records and the original grand jury
investigation had ended. After finding that petitioner
“overlooks prior history [of this case],” Pet. App. 7a, the
court of appeals rejected that claim, holding that the district
court’s action “was not the imposition of a punitive fine but
the recognition and liquidation of the debt accumulated
during the period of noncompliance.” Jd. at 8a. As the

* The district court also concluded that petitioner’s opposition
to the government’s motion did not comply with the procedure
mandated by Local Rule 18, specifying that “[o)ppositions to motions
for summary judgment shall include a concise statement of the material
facts as to which it is contended that there exists a genuine issue to be
tried, with page references to affidavits, depositions, and other documen-
tation” (D. Mass. R. 18). Pet. App. 19a.

* To the extent that petitioner challenged the aggregate fine as
excessive, the court of appeals concluded that petitioner could not
“tnundle[ } out [that issue] for the first time on this appeal.” Pet. App.
7a. Petitioner had not raised the argument at the appropriate time,
namely, “when the daily rate was set” in the district court’s initial

8

court of appeals. observed, ibid.:

{[T]o allow [petitioner] to avoid the consequences of
[its] civil contempt solely because, at the date of
reckoning, compliance is impossible would only
encourage stonewalling.

The court of appeals also rejected petitioner’s conten-
tion that the Wilkes affidavit was insufficient proof of
petitioner’s noncompliance with the grand jury subpoena.
First, the court noted that petitioner had not raised this
argument before the district court. Second, the court found
that the Wilkes affidavit itself contained assertions that
petitioner had not produced the index cards under subpoena
before the agents seized them, and petitioner had not
submitted any responsive pleading or affidavit contradicting
those assertions. Indeed, as the court of appeals noted,
petitioner had not submitted “any disavowal of references
to [petitioner] in the [index] cards attached to the Wilkes
affidavit.” Pet. App. 9a.

For that reason as well, the court of appeals dismissed
petitioner’s claim that the district court erred in deciding
the government’s summary judgment motion without a
hearing. As the court of appeals concluded, “[{uJnder these
circumstances we see no abuse of discretion or violation of
due process in proceeding, after such an absence of invited
factual response, to decision without an evidentiary hearing.”
Pet. App. 9a.

Finally, the court of appeals agreed with petitioner’s
claim that “a judicial order imposing a continuing per diem

March 29, 1985, order. /bid. Moreover, petitioner had not filed a
timely appeal from the district court’s initial order, and as the court of
appeals observed, petitioner had not even sought to contest the amount
of the contempt fine in its aborted appeal from that order. /bid.

9

fine does not have a longer life than the grand jury for
which the order was issued.” Pet. App. 10a. Since the
grand jury that issued the underlying subpoena to petitioner
expired sometime in January 1986, the court of appeals
vacated the $5,110,000 total judgment against petitioner and
remanded the case to the district court “for computation of
the aggregate fine[].” Jd. at 15a.

5. On April 27, 1989, while a petition for rehearing
was pending in the court of appeals, the government filed
a motion in the district court to compute petitioner’s
aggregate contempt fines in the amount of $2.77 million.
On May 30, the court of appeals denied the petition for
rehearing. Pet. App. la. On June 6, the court of appeals
denied petitioner’s request to stay the mandate pending the
filing of a petition for a writ of certiorari. Appl. App. C1.’
The court issued its mandate on the following day. On
June 23, the government renewed its motion in the district
court to compute petitioner’s fine on remand. Appl. App.
Hl. |
Petitioner then filed an application for a stay of the
court of appeals’ judgment pending the filing and dispos-
ition of a petition for a writ of certiorari. On June 30,
1989, Justice Brennan, sitting as Circuit Justice, denied the
application for a stay.*

ARGUMENT

The court of appeals’ decision correctly applies settled
law and procedures governing the imposition of civil
contempt fines for failing to comply with grand jury

7 “Appl. App.” refers to the appendix filed with petitioner's
application for a stay in this Court.

* The government’s motion to compute petitioner’s fine remains
under advisement in the district court.

10

subpoenas. As the court of appeals recognized, the proced-
ural history of this case itself renders petitioner’s claims
insubstantial. At bottom, petitioner seeks to this day to
avoid responsibility for the consequences of its longstanding
and unjustified refusal to comply with valid grand jury
process.

1. Petitioner first contends (Pet. 6-7) that the court of
appeals’ decision affirming the imposition of contempt
sanctions without requiring a hearing conflicts with settled
law. Petitioner’s contention stems from a misreading of
both the record and relevant case law.

First, the district court adjudged petitioner in contempt
on March 29, 1985, only after holding a hearing in which
it was established that petitioner had been served with the
subpoena and that its failure to comply was without just
cause. Petitioner’s belated challenge rings hollow where the
record shows that despite specific notice, it chose not even
to attend that scheduled show cause hearing. /n re Grand
Jury Proceedings, 795 F.2d at 228.

Moreover, before ultimately rendering its judgment in
February 1987, the district court specifically directed
petitioner to present material evidence contradicting the
government’s Wilkes affidavit, since that affidavit showed
that, by withholding the index cards, petitioner had not fully
complied with the subpoena. Nevertheless, petitioner did
not submit any responsive pleading or affidavit contradicting
the government’s proof. As the court of appeals noted,
petitioner did not submit “any disavowal of references to
[petitioner] in the [index] cards attached to the Wilkes affidavit.”
Pet. App. 9a. Accordingly, while petitioner was given the
opportunity to have a hearing, it in effect chose not to have
one.

Second, although a contemnor is generally entitled to
a hearing before being adjudged in civil contempt, see, é.g.,

11 Ke

In re Oliver, 333 U.S. 257, 275 (1948), that procedure is
not required where the contemnor himself has not alleged
that there is a genuine issue as to any material fact, see,
e.g., In re Grand Jury Proceedings, 795 F.2d at 234-235;
Commodity Futures Trading Comm'n v. Premex, Inc., 655
F.2d 779, 782 n.2 (7th Cir. 198i); United States v.
Danenza, 528 F.2d 390, 392-393 (2d Cir. 1975); see also
In re Kitchen, 706 F.2d 1266, 1273 (2d Cir. 1983) (district
court may require an offer of proof before conducting a
hearing).® Indeed, as this Court has recognized in a related
context, “district courts are widely acknowledged to possess
the power to enter summary judgments sua sponte, so long
as the losing party was on notice that she had to come
forward with all of her evidence.” Celotex Corp. v.

* In the Kitchen case, 706 F.2d at 1273, the Second Circuit
recognized that a district court need not conduct an evidentiary hearing
if there are no material facts in dispute surrounding the contempt
motion. Thus, petitioner’s claim of conflict (Pet. 6) between the court
of appeals’ decision and the decision in Kitchen is illusory.

Petitioner’s reliance (Pet. 6-7) on decisions of this Court and other
courts of appeals is also misplaced. None of those decisions remotely
suggests that a court must hold a hearing before adjudging a recalcitrant
witness in civil contempt and imposing coercive sanctions where the
witness has not rebutted the government’s proof that he has not
complied with a court order or grand jury process and has no just cause
for such contumacious conduct.

Petitioner's reference to McNeil v. Director, 407 U.S. 245 (1972),
is particularly far afield. In that case, the State of Maryland asserted
the power to confine a “defective delinquent” indefinitely, even after his
sentence expired, “without ever obtaining a judicial determination that
such confinement is warranted.” 407 U.S. at 249. In rejecting the
State’s effort to ground that power on a “theory of civil contempt,” the
Court made clear that “due process requires a hearing to determine
whether [the inmate] has in fact behaved in a manner that amounts to
contempt.” /d. at 251. The Court thus had no occasion to address the
issue petitioner seeks to present—the neéd for such a hearing where the
record contains uncontradicted proof that contumacious conduct has
occurred.

F

12

Catrett, 477 U.S. 317, 326 (1986).

Here, as mentioned above, the government’s proof
showed that petitioner, over a substantial period of time,
withheld from the grand jury index cards used in connection
with the fundraising activities under investigation. See Pet.
App. 2a-4a; Gov’t C.A. Br. 10-12; C.A. App. 482, 487
(samples of cards with notations to petitioner attached to
Agent Wilkes’ affidavit). Despite the district court’s
invitation, petitioner did not contradict a single allegation in
the Wilkes affidavit. To the contrary, petitioner raised only
immaterial claims, namely, that it had already “‘produced
a wealth of material,’” and that “no one has ever contended
that the [index] cards belonged to [petitioner].” (C.A. App.
512." On this record, the district court was compelled to
grant the government’s motion for summary judgment since
there was no factual dispute regarding petitioner’s actions.
Pet. App. 18a-19a. Accordingly, the court of appeals
correctly held that “[u]nder these circumstances we see no
abuse of discretion or violation of due process in proceed-
ing, after such an absence of invited factual response, to
decision without an evidentiary hearing.” Jd. at 9a.

2. Petitioner next contends (Pet. 8-9) that the court of
appeals sanctioned a contempt adjudication without first

‘© Rather than addressing these points, petitioner cites (Pet. 3-
4) a supplemental affidavit that, as both the district court and the coun
of appeals found, does not contradict any material facts regarding
petitioner’s failure to comply with the grand jury subpoena.

Petitioner also suggests (Pet. 2-3) that the grand jury subpoena
itself did not call for the production of the index cards used for
fundraising purposes, and that this omission may have excused
petitioner’s contemptuous conduct. That suggestion is frivolous. The
grand jury subpoena specifically commanded petitioner to produce
“{aJny and all records relating to fundraising by, through, or on behalf
of [petitioner].” C.A. App. 343. The index cards fall within the plain
language of the subpoena.

13

requiring “clear and convincing” evidence, and that this
decision conflicts with other circuits’ decisions."' Petitioner,
however, misconstrues the court of appeals’ decision. The
court of appeals did initially state that petitioner had waived
its challenge to the sufficiency of the Wilkes affidavit. Pet.
App. 8a.” But the court proceeded to review the entire
record to hold that petitioner did not present any evidence
contradicting the government’s proof of failure to comply
with the subpoena. /d. at 8a-9a. The court of appeals
upheld the contempt citation only after concluding that
petitioner had not rebutted the government’s factual submis-
sion, a submission that Gn this record certainly meets the
“clear and convincing” evidence standard."* The court thus
in effect applied that standard, and its decision is therefore
consistent with the decisions of other courts of appeals.

" Stotler & Co. v. Able, 870 F.2d 1158, 1163 (7th Cir. 1989);
Balla v. Idaho State Bd. of Corrections, 869 F.2d 461, 466 (9th Cir.
1989); Washington-Baltimore Newspaper Guild v. Washington Post Co.,
626 F.2d 1029 (D.C. Cir. 1980). ,

" As the court of appeals stated (Pet. App. 8a):

We dispose first of arguments that the affidavit was defective
because of hearsay and because it did not constitute clear and
convincing proof. These arguments were not made in the district
court and we therefore do not deal with them here.

Petitioner suggests that the court of appeais effectively adopted a
new pleading requirement — that “an alleged contemnor [must] specifi-
cally mention that [the clear and convincing standard] is the applicable
standard of proof” (Pet. 8). To the contrary, the court of appeals was
only applying an esiablished principle to the facts, namely, that
petitioner could not challenge defects in the affidavit for the first time
on appeal. Application of that principle does not at all suggest that the
court of appeals ignored an independent legal rule with respect to the
matter of the appropriate burden of proof.

'’ For that reason as well, NAACP v. Claiborne Hardware Co.,
458 U.S. 886 (1982), cited by petitioner (Pet. 8-9), is inapposite.

14

3. Petitioner further contends (Pet. 9-10) that the court
of appeals erred in upholding the contempt sanction without
first requiring the district court to consider petitioner’s
financial resources. But that issue is not presented here.
As the coust of appeals found, petitioner raised this chal-
lenge “for the first time on this appeal.” Pet. App. 7a.
Petitioner did not raise the argument at the appropriate time,
namely, “when the daily rate was set” in the district court’s
initial March 29, 1985, order. Ibid. See In re Grand Jury
Witness, 835 F.2d 437, 442-443 (2d Cir. 1987). Moreover,
petitioner did not file a timely appeal from that initial order,
see Jn re Grand Jury Proceedings, 795 F.2d at 229, and, as
the court of appeals observed, petitioner did not even
contest the amount of the contempt sanction in its aborted
appeal from that order. Pet. App. 7a. As the aggregate
amount of the fine was increasing over a substantial period
of time, petitioner never asked the district court to recon-
sider the fine in light of its financial resources. Under
these circumstances, petitioner is in no position to contest
the amount of that fine now.

In any event, petitioner’s claim is meritless. In
exercising its discretion with respect to civil contempt
sanctions, the district court must consider “the character and
magnitude of the harm threatened by continued contumacy,”
“the probable effectiveness of any suggested sanction in
bringing about the result desired,” and “the amount of
defendant’s financial resources and the consequent serious-
ness of the burden to that particular defendant.” United
States v. United Mine Workers, 330 U.S. 258, 304 (1947).
Here, petitioner’s persistent refusal to comply with the
grand jury subpoena threatened to thwart an ongoing
criminal investigation."* And the imposition of a per diem

“Indeed, although noticeably absent from petitioner’s statement

15

fine, designed only to coerce petitioner to honor the grand
jury subpoena, is an accepted practice well within the
bounds of the district court’s discretion. See, e.g., United
States v. City of Yonkers, 856 F.2d 444, 460 (2d Cir. 1988),
cert. denied, 109 S. Ct. 1527 (1989); In re Grand Jury
Witness, 835 F.2d at 440; In re Grand Jury Impaneled Jan.
21, 1975, 529 F.2d 543, 550-551 (3d Cir.), cert. denied, 425
U.S. 992 (1976).

Finally, the $10,000 per diem fine is not excessive on
this record. By its own earlier admission,'* petitioner raises
at least $400,000 in contributions annually, and thus is not
an insubstantial organization. And petitioner never sought
to show, before either the district court or the court of
appeals, that the daily fine would be unduly burdensome.
Cf. United States v. City of Yonkers, 856 F.2d at 460 (fine
of $1 million per day after 15 days of City’s noncom-
pliance); In re Grand Jury Witness, 835 F.2d at 440 (fine
of $5,000 per day imposed on individual); /nternational
Business Machines Corp. v. United States, 493 F.2d 112,
115-116 (2d Cir. 1973) (fine of $150,000 per day imposed
on corporation), cert. denied, 416 U.S. 995 (1974).
Furthermore, petitioner is in no position to complain now
since it “was given the power to avoid the fine entirely or
to end its accrual.” Perfect Fit Industries, Inc. v. Acme
Quilting Co., 673 F.2d 53, 58 (2d Cir.), cert. denied, 459
U.S. 832 (1982).

4. Lastly, petitioner contends (Pet. 11-12) that the
court of appeals’ decision conflicts with Shillitani v. United

of the case, petitioner never fully complied with the grand jury
subpoena. The grand jury was able to obiain the index cards used for
fundraising, and thus to complete its investigation, only after the
government executed search warrants.

'S See petitioner’s Application For Stay, No. A-1049, at 3.

16

States, 384 U.S. 364 (1966), since “there will be no time
limit on contempt proceedings in connection with a grand
jury whose work has ended.” Pet. 11. That contention is
groundless. The district court’s order granting summary
judgment “was not the imposition of a punitive fine but the
recognition and liquidation of the debt accumulated during
the period of noncompliance” when compliance was still
possible. Pet. App. 8a."© Thus, the court of appeals’
decision is wholly consistent with Shillitani. Indeed, as the
court of appeals succinctly stated, “to allow [petitioner] to
avoid the consequences of [its] civil contempt solely
because, at the date of reckoning, compliance is impossible
would only encourage stonewalling.” bid.

CONCLUSION

The petition for a writ of certiorari should be denied.
Respectfully submitted.

KENNETH W. STARR
Solicitor General

Epwarp S.G. Dennis, Jr.
Assistant Attorney General

Patry MERKAMP STEMLER
Attorney

SEPTEMBER 1989

‘* In making this claim, petitioner appears to overlook that part
of the court of appeals’ judgment vacating the imposition of the daily
fine for the period after the grand jury expired. See Pet. App. 10a-!Sa.

*y U.S. GOVERNMENT PRINTING OFFICE: 1989—241-699/00516

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385020_0205%3A2. Public record. Not legal advice.