1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 NORTHERN DISTRICT OF CALIFORNIA 9 10 JOHN HANCOCK LIFE INSURANCE Case No. 23-cv-02700-RS (TSH) COMPANY (UNITED STATES OF 11 AMERICA), et al., CERTFICATION OF FACTS AND 12 Plaintiffs, ORDER TO SHOW CAUSE RE SANCTIONS 13 v.
14 CONNIE MEI CHUAN WU, Re: Dkt. No. 44
15 Defendant.
16 17 18 I. INTRODUCTION 19 Pending before the undersigned is Plaintiffs’ motion for an order of contempt against non- 20 party Martin Neely for failure to comply with the undersigned’s Order, as well as a request for 21 sanctions. ECF No. 44 (Motion); see ECF Nos. 41 at 2 (January 22, 2025 Order). Neely has not 22 filed an opposition. For the reasons stated below, the undersigned GRANTS the motion and 23 ORDERS Neely to show cause why he should not be held in contempt for his failure to comply 24 with the undersigned’s January 22, 2025 order. 25 I. BACKGROUND 26 On September 19, 2023, the Court granted default judgment in favor of Plaintiffs John 27 Hancock Life Insurance Company (U.S.A.) and John Hancock Variable Life Insurance Company 1 and Trustee of their Family Trust, non-party Martin Neely, has relevant information regarding 2 potential assets against which Plaintiffs can enforce their judgment against Wu. Mot. at 3. On 3 November 8, 2024, Plaintiffs issued a subpoena containing seven document requests against Neely 4 as successor Trustee of The Martin A. Neely and Connie Wu 1998 Family Trust. Decl. of Misty 5 A. Murray in Support of Mot. (“Murray Decl.”) ¶¶ 5(a), 5(b), ECF No. 44-1.1 Neely was properly 6 served with the subpoena on November 8, 2024. Murray Decl. ¶ 5(b) & Ex. A to Murray Decl. 7 (ECF No. 44-1 at 11). Neely was required to comply with the subpoena by November 25, 2024. 8 Murray Decl. ¶ 6 & Ex. A to Murray Decl. (ECF No. 44-1 at 6). Neely did not comply with or 9 respond to the subpoena by that date. Murray Decl. ¶ 6. 10 On December 20, 2024, Plaintiffs moved to compel responses to their judgment debtor 11 discovery. ECF No. 37. The evidence showed Neely was served with the subpoena, did not serve 12 written objections, did not move to quash or seek a protective order, did not comply with the 13 subpoena, was served with the motion to compel, and did not file a response. ECF No. 41 at 2. 14 On January 22, 2025, the undersigned granted Plaintiffs’ motion to compel and ordered Neely to 15 produce the requested documents within 30 days. ECF No. 41 at 2. Neely was served with the 16 undersigned’s January 22, 2025 Order on January 28, 2025. ECF No. 42. 17 On April 4, 2025, Plaintiffs filed the instant motion, asking that the undersigned issue an 18 order re contempt and for an award of sanctions in the amount Plaintiffs’ attorneys’ fees and costs 19 incurred in compelling Neely’s compliance. Mot. at 3. Neely was served with the instant motion 20 on April 4, 2024. ECF No. 44-1 at 30–31. Neely has not filed a response. 21 II. LEGAL STANDARD 22 “[C]ourts have inherent power to enforce compliance with their lawful orders through civil 23 contempt.” Spallone v. United States, 493 U.S. 265, 276 (1990) (citation and quotation marks 24 omitted). Civil contempt is intended “to coerce the defendant into compliance with the court’s 25 order” or “to compensate the complainant for losses sustained” from the noncompliance. Shell 26 Offshore Inc. v. Greenpeace, Inc., 815 F.3d 623, 629 (9th Cir. 2016) (quoting United States v. 27 1 United Mine Workers of Am., 330 U.S. 258, 303-04 (1947)). “A court has wide latitude in 2 deciding whether there has been contemptuous defiance of its order.” Gifford v. Heckler, 741 F.2d 3 263, 266 (9th Cir. 1984). 4 III. DISCUSSION 5 A. Civil Contempt 6 Plaintiffs ask the undersigned to find Neely in contempt for his failure to comply with the 7 subpoena and Court’s January 22, 2025 Order. Motion at 3. To establish civil contempt, the 8 moving party must show by clear and convincing evidence that the alleged contemnors violated a 9 specific and definite order of the court. See FTC v. Affordable Media, 179 F.3d 1228, 1239 (9th 10 Cir. 1999). “The burden then shifts to the contemnors to demonstrate why they were unable to 11 comply.” Id. (quoting Stone v. City and County of San Francisco, 968 F.2d 850, 856 n.9 (9th Cir. 12 1992)). In the Ninth Circuit, the central question regarding contempt is whether the alleged 13 contemnor performed “all reasonable steps within [its] power to ensure compliance” with the 14 court’s orders. Stone, 968 F.2d at 856. A showing of willfulness is not necessary to establish civil 15 contempt, see Reno Air Racing Ass’n, Inc. v. McCord, 452 F.3d 1126, 1130 (9th Cir. 2006). 16 However, if an alleged contemnor’s actions were taken in good faith and based on a reasonable 17 interpretation of the court’s order, they should not be held in contempt. See id. 18 1. Magistrate Judge Authority 19 Absent consent by the parties, the authority of magistrate judges over civil contempt 20 proceedings is limited. See 28 U.S.C. § 636(e); Bingman v. Ward, 100 F.3d 653, 656–57 (9th Cir. 21 1996). A magistrate judge may investigate whether further contempt proceedings are warranted 22 and, if the magistrate judge so finds, certify such facts to a district judge. 28 U.S.C. § 636(e)(6); 23 see also Alcalde v. NAC Real Estate Invs. & Assignments, Inc., 580 F. Supp. 2d 969, 971 (C.D. 24 Cal. 2008). Specifically, upon finding an act constituting a civil contempt: the magistrate judge shall forthwith certify the facts to a district judge 25 and may serve or cause to be served, upon any person whose behavior is brought into question under this paragraph, an order requiring such 26 person to appear before a district judge upon a day certain to show cause why that person should not be adjudged in contempt by reason 27 of the facts so certified. The district judge shall thereupon hear the the same extent as for a contempt committed before a district judge. 1 2 28 U.S.C. § 636(e)(6)(B)(iii). Under this process, the magistrate judge functions to certify the 3 facts and not to issue an order of contempt. Bingman, 100 F.3d at 656-57. 4 2. Certification of Facts 5 The undersigned finds Neely did not take any reasonable steps within his power to comply 6 with the undersigned’s January 22, 2025 Order. Neely was properly served with Plaintiffs’ 7 subpoena on November 8, 2024. Murray Decl. ¶ 5(b) & Ex. A to Murray Decl. Neely was 8 required to comply with the subpoena by November 25, 2024. Murray Decl. ¶ 6 & Ex. A to 9 Murray Decl. (ECF No. 44-1 at 6). Neely did not comply with or respond to the subpoena by that 10 date. Murray Decl. ¶ 6. Plaintiffs’ counsel made attempts to meet and confer with Neely, which 11 were unsuccessful. Murray Decl. re Noncompliance with Discovery Order ¶ 7, ECF No. 43 (“Feb. 12 2025 Murray Decl.”).
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1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 NORTHERN DISTRICT OF CALIFORNIA 9 10 JOHN HANCOCK LIFE INSURANCE Case No. 23-cv-02700-RS (TSH) COMPANY (UNITED STATES OF 11 AMERICA), et al., CERTFICATION OF FACTS AND 12 Plaintiffs, ORDER TO SHOW CAUSE RE SANCTIONS 13 v.
14 CONNIE MEI CHUAN WU, Re: Dkt. No. 44
15 Defendant.
16 17 18 I. INTRODUCTION 19 Pending before the undersigned is Plaintiffs’ motion for an order of contempt against non- 20 party Martin Neely for failure to comply with the undersigned’s Order, as well as a request for 21 sanctions. ECF No. 44 (Motion); see ECF Nos. 41 at 2 (January 22, 2025 Order). Neely has not 22 filed an opposition. For the reasons stated below, the undersigned GRANTS the motion and 23 ORDERS Neely to show cause why he should not be held in contempt for his failure to comply 24 with the undersigned’s January 22, 2025 order. 25 I. BACKGROUND 26 On September 19, 2023, the Court granted default judgment in favor of Plaintiffs John 27 Hancock Life Insurance Company (U.S.A.) and John Hancock Variable Life Insurance Company 1 and Trustee of their Family Trust, non-party Martin Neely, has relevant information regarding 2 potential assets against which Plaintiffs can enforce their judgment against Wu. Mot. at 3. On 3 November 8, 2024, Plaintiffs issued a subpoena containing seven document requests against Neely 4 as successor Trustee of The Martin A. Neely and Connie Wu 1998 Family Trust. Decl. of Misty 5 A. Murray in Support of Mot. (“Murray Decl.”) ¶¶ 5(a), 5(b), ECF No. 44-1.1 Neely was properly 6 served with the subpoena on November 8, 2024. Murray Decl. ¶ 5(b) & Ex. A to Murray Decl. 7 (ECF No. 44-1 at 11). Neely was required to comply with the subpoena by November 25, 2024. 8 Murray Decl. ¶ 6 & Ex. A to Murray Decl. (ECF No. 44-1 at 6). Neely did not comply with or 9 respond to the subpoena by that date. Murray Decl. ¶ 6. 10 On December 20, 2024, Plaintiffs moved to compel responses to their judgment debtor 11 discovery. ECF No. 37. The evidence showed Neely was served with the subpoena, did not serve 12 written objections, did not move to quash or seek a protective order, did not comply with the 13 subpoena, was served with the motion to compel, and did not file a response. ECF No. 41 at 2. 14 On January 22, 2025, the undersigned granted Plaintiffs’ motion to compel and ordered Neely to 15 produce the requested documents within 30 days. ECF No. 41 at 2. Neely was served with the 16 undersigned’s January 22, 2025 Order on January 28, 2025. ECF No. 42. 17 On April 4, 2025, Plaintiffs filed the instant motion, asking that the undersigned issue an 18 order re contempt and for an award of sanctions in the amount Plaintiffs’ attorneys’ fees and costs 19 incurred in compelling Neely’s compliance. Mot. at 3. Neely was served with the instant motion 20 on April 4, 2024. ECF No. 44-1 at 30–31. Neely has not filed a response. 21 II. LEGAL STANDARD 22 “[C]ourts have inherent power to enforce compliance with their lawful orders through civil 23 contempt.” Spallone v. United States, 493 U.S. 265, 276 (1990) (citation and quotation marks 24 omitted). Civil contempt is intended “to coerce the defendant into compliance with the court’s 25 order” or “to compensate the complainant for losses sustained” from the noncompliance. Shell 26 Offshore Inc. v. Greenpeace, Inc., 815 F.3d 623, 629 (9th Cir. 2016) (quoting United States v. 27 1 United Mine Workers of Am., 330 U.S. 258, 303-04 (1947)). “A court has wide latitude in 2 deciding whether there has been contemptuous defiance of its order.” Gifford v. Heckler, 741 F.2d 3 263, 266 (9th Cir. 1984). 4 III. DISCUSSION 5 A. Civil Contempt 6 Plaintiffs ask the undersigned to find Neely in contempt for his failure to comply with the 7 subpoena and Court’s January 22, 2025 Order. Motion at 3. To establish civil contempt, the 8 moving party must show by clear and convincing evidence that the alleged contemnors violated a 9 specific and definite order of the court. See FTC v. Affordable Media, 179 F.3d 1228, 1239 (9th 10 Cir. 1999). “The burden then shifts to the contemnors to demonstrate why they were unable to 11 comply.” Id. (quoting Stone v. City and County of San Francisco, 968 F.2d 850, 856 n.9 (9th Cir. 12 1992)). In the Ninth Circuit, the central question regarding contempt is whether the alleged 13 contemnor performed “all reasonable steps within [its] power to ensure compliance” with the 14 court’s orders. Stone, 968 F.2d at 856. A showing of willfulness is not necessary to establish civil 15 contempt, see Reno Air Racing Ass’n, Inc. v. McCord, 452 F.3d 1126, 1130 (9th Cir. 2006). 16 However, if an alleged contemnor’s actions were taken in good faith and based on a reasonable 17 interpretation of the court’s order, they should not be held in contempt. See id. 18 1. Magistrate Judge Authority 19 Absent consent by the parties, the authority of magistrate judges over civil contempt 20 proceedings is limited. See 28 U.S.C. § 636(e); Bingman v. Ward, 100 F.3d 653, 656–57 (9th Cir. 21 1996). A magistrate judge may investigate whether further contempt proceedings are warranted 22 and, if the magistrate judge so finds, certify such facts to a district judge. 28 U.S.C. § 636(e)(6); 23 see also Alcalde v. NAC Real Estate Invs. & Assignments, Inc., 580 F. Supp. 2d 969, 971 (C.D. 24 Cal. 2008). Specifically, upon finding an act constituting a civil contempt: the magistrate judge shall forthwith certify the facts to a district judge 25 and may serve or cause to be served, upon any person whose behavior is brought into question under this paragraph, an order requiring such 26 person to appear before a district judge upon a day certain to show cause why that person should not be adjudged in contempt by reason 27 of the facts so certified. The district judge shall thereupon hear the the same extent as for a contempt committed before a district judge. 1 2 28 U.S.C. § 636(e)(6)(B)(iii). Under this process, the magistrate judge functions to certify the 3 facts and not to issue an order of contempt. Bingman, 100 F.3d at 656-57. 4 2. Certification of Facts 5 The undersigned finds Neely did not take any reasonable steps within his power to comply 6 with the undersigned’s January 22, 2025 Order. Neely was properly served with Plaintiffs’ 7 subpoena on November 8, 2024. Murray Decl. ¶ 5(b) & Ex. A to Murray Decl. Neely was 8 required to comply with the subpoena by November 25, 2024. Murray Decl. ¶ 6 & Ex. A to 9 Murray Decl. (ECF No. 44-1 at 6). Neely did not comply with or respond to the subpoena by that 10 date. Murray Decl. ¶ 6. Plaintiffs’ counsel made attempts to meet and confer with Neely, which 11 were unsuccessful. Murray Decl. re Noncompliance with Discovery Order ¶ 7, ECF No. 43 (“Feb. 12 2025 Murray Decl.”). 13 On January 22, 2025, the undersigned granted Plaintiffs’ motion to compel responses to 14 their judgment debtor discovery against Neely and ordered Neely to produce the requested 15 documents within 30 days. ECF No. 41 at 2. Neely was served with the January 22, 2025 Order 16 on January 28. ECF No. 42. Neely did not comply with the order. Murray Decl. ¶ 10; Feb. 2025 17 Murray Decl. ¶ 9. As such, the undersigned finds non-party Martin Neely has committed an act of 18 civil contempt and therefore ORDERS Neely to appear before Judge Seeborg on May 29, 2025 at 19 1:30 p.m. to show cause why Neely should not be adjudged in contempt by reason of these facts. 20 3. Recommended Sanction 21 Counsel for Plaintiffs, Misty A. Murray, offers a declaration detailing the attorneys’ fees 22 Plaintiffs incurred in bringing the motion to compel and instant motion for contempt and 23 sanctions. Murray Decl., ECF No. 44-1. Murray requests a total of $3,404.00. Murray Decl. 24 ¶ 11. 25 Murray’s 2024 billing rate is $368.50 per hour and her 2025 billing rate is $386.00 per 26 hour. Murray Decl. ¶ 11. Murray avers that she spent 4 hours drafting the Motion to Compel, her 27 declaration, notice and proposed order, which were filed in December 2024. Id. Murray spent 30 1 the instant Motion for Contempt, supporting declaration and proposed order. Id. The total 2 attorneys’ fees incurred through the filing of Plaintiffs’ motion for contempt thus total $2,632.00. 3 Id. Murray further anticipates she will spend at least 2 hours attending any hearing on the Motion 4 and preparing any further papers, bringing her total fees requested to $3,404.00. Id. 5 The undersigned finds Ms. Murray’s hourly rates and hours billed are reasonable. See 6 Ingram v. Oroudjian, 647 F.3d 925, 928 (9th Cir. 2011) (“judges are justified in relying on their 7 own knowledge of customary rates and their experience concerning reasonable and proper fees.”). 8 However, some of the claimed fees are not related to the contempt of the Court’s order. The fees 9 incurred in drafting the motion to compel predate the Court’s order. The fees related to the 10 February declaration do relate to the contempt, as do the fees in connection with the motion for 11 contempt. The Court took this matter under submission without oral argument, so Murray did not 12 spend any time attending the vacated May 8 hearing, and an estimate that Murray will spend at 13 least two hours attending the hearing before Judge Seeborg and preparing any further papers 14 seems speculative. Accordingly, the undersigned thinks the appropriate contempt sanction is the 15 three hours devoted to the February declaration and the present motion for contempt. Those hours 16 were all at Murray’s 2025 billing rate, so total to $1,158.00. 17 Accordingly, in the event Judge Seeborg adjudges Neely to be in contempt, the 18 undersigned recommends that Neely be sanctioned in the amount of $1,158.00 in attorney’s fees, 19 payable to Plaintiffs and their counsel. 20 IV. CONCLUSION 21 Pursuant to 28 U.S.C. § 636(e)(6)(B)(iii), the undersigned certifies the facts above and 22 finds non-party Martin Neely has committed an act constituting civil contempt. Accordingly, the 23 undersigned ORDERS Neely to appear before Judge Seeborg on May 29, 2025 at 1:30 p.m. at 24 450 Golden Gate Avenue, San Francisco, California, in Courtroom 3 on the 17th floor to SHOW 25 CAUSE why Neely should not be held in contempt for his failure to comply with the Court’s 26 January 22, 2025 Discovery Order. In the event Neely is adjudged in contempt, the Court 27 RECOMMENDS Neely be SANCTIONED in the amount of $1,158.00 in attorney’s fees, 1 Neely and to file a proof of service showing that they have done so. 2 IT IS SO ORDERED. 3 4 Dated: May 8, 2025 TAA. ly THOMAS S. HIXSON 6 United States Magistrate Judge 7 8 9 10 11 12
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