United States of America v. Chapa

Filing 13

ORDER to SHOW CAUSE why Respondent should not be held in Civil Contempt,signed by District Judge Dale A. Drozd on 09/7/17. Show Cause Hearing set for 10/17/2017 at 09:30 AM in Courtroom 5 (DAD) before District Judge Dale A. Drozd. Show Cause Response due by 10/3/2017. (Martin-Gill, S)

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UNITED STATES DISTRICT COURT

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FOR THE EASTERN DISTRICT OF CALIFORNIA

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UNITED STATES OF AMERICA,

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No. 1:16-cv-01699-DAD-SKO

Petitioner,
v.
JULIAN C. CHAPA,

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Respondent.

ORDER TO SHOW CAUSE WHY
RESPONDENT SHOULD NOT BE HELD IN
CIVIL CONTEMPT
(Doc. No. 10, 11)

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On August 31, 2017, petitioner United States of America, filed a petition seeking an order

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directed to respondent requiring him to show cause why he should not be found in civil contempt

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for failing to comply with the court’s order of March 23, 2017. (Doc. No. 10) Petitioner also

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submitted a memorandum of points and authorities in support of a finding of civil contempt and a

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proposed order. (Doc. No. 11.) Specifically, petitioner contends that respondent should be

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incarcerated and subject to daily fines until he complies with the court’s prior order. (Doc. No.

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10 at 1, ¶ 1.)

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The court’s March 23, 2017 order adopted the assigned magistrate judge’s findings and

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recommendations recommending the enforcement of an IRS summons issued to respondent.

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(Doc. No. 9.) Therein, respondent was ordered to appear before Revenue Officer, Lisa R. Lopez,

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at the Internal Revenue Service office located at 2525 Capitol Street, Suite 206, Fresno, CA
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93721 on March 24, 2017. (Id. at 2, ¶ 2.) Respondent was ordered to provide testimony and

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produce for examination and copying “the books, checks, records, paper, and other data

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demanded by the summons . . . .” (Id. at ¶ 3.) The order further provided that examination of

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these items would continue until compliance is fully achieved. (Id.) This court retained

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jurisdiction pursuant to its contempt power to enforce that order. (Id. at ¶ 5.)

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On March 24, 2017, respondent Chapa appeared before Revenue Officer Lopez, but failed

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to produce the required items for examination. (Doc. No. 10 at 2, ¶ 4.) Instead, respondent

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requested additional time to produce these items, indicating that he was having difficulty securing

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an IRS Form 1099 in order to prepare a tax return. (Id.) Revenue Officer Lopez explained to

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respondent that the summons and enforcement proceedings were not for purposes of compelling

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him to file tax returns, but for the IRS to determine whether respondent could satisfy the assessed

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liabilities. (Id.) Officer Lopez further explained to respondent that his financial records were

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needed to prepare a Collection Information Statement for Wage Earners and Self-Employed

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Individuals, or an IRS Form 433-A. (Id.) Respondent indicated that he would bring the

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necessary documents to Revenue Officer Lopez the following week. (Id.) Although that meeting

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was postponed to March 31, 2017, respondent failed to appear and made no further contact with

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Revenue Officer Lopez. (Id.)

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As a result of respondent’s failure to appear and/or contact Revenue Officer Lopez,

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petitioner’s counsel mailed a letter to respondent re-setting a compliance appointment for May

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19, 2017 and warning him of petitioner’s intent to seek a contempt finding in the event

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respondent did not appear on that day and produce the required materials for examination. (Doc.

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No. 10-2, Ex. A.) While respondent did appear for the compliance appointment on May 19,

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2017, he once again failed to produce any of the required documents. (Doc. No. 10 at 2, ¶ 5.)

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Petitioner maintains that respondent’s testimony, books, and records are still needed to

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continue the investigation and that petitioner has failed to comply with the court’s enforcement

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order. (Id. at ¶¶ 6–7.) Petitioner brings this request on the grounds that incarceration is needed to

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coerce respondent’s compliance and that the court should impose all other remedies for civil

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contempt including imprisonment and/or compensatory and coercive daily fines. (Id. at ¶ 8.)
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In contempt proceedings, “the contemnor is entitled to notice and a reasonable time to

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prepare a defense.” United States v. Powers, 629 F.3d 619, 628 (9th Cir. 1980) (citing United

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States v. Hawkins, 501 F.2d 1029, 1031 (9th Cir. 1974)). Regardless of whether the contempt

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proceedings are civil or criminal, the safeguards of Federal Rules Criminal Procedure 42(a) shall

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apply. See Hawkins, 501 F.2d at 1031.1 Rule 42(a) provides that the court must give the

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contemnor notice of the initiated proceedings “in open court, in an order to show cause, or in an

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arrest order.” In addition, “the notice must: (a) state the time and place of the trial; (b) allow the

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defendant a reasonable time to prepare a defense; and (c) state the essential facts constituting the

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charged criminal contempt and describe it.” Fed. R. Crim. P. 42(a).

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While the proceedings cannot be conducted summarily, a reasonable time for a contemnor

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to prepare a defense is left to the discretion of the court and will vary according to the

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circumstances of each particular case. United States v. Alter, 482 F.2d 1016, 1023–24 (9th Cir.

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1973). The Ninth Circuit has found a minimum of five days sufficient “when the alleged

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contemnor’s defense raises legal issues of some complexity or there is an indication that an

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evidentiary hearing may be required.” Id. at 1023; accord Hawkins, 501 F.2d at 1031.

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Additionally, a civil contempt proceeding is considered “a trial within the meaning of Fed. R.

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Civ. P. 43(a), rather than a hearing on a motion within the meaning of Fed. R. Civ. P. 43(e)

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(citations) and that the issues may not be tried on the basis of affidavits.” Hoffman for & on

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Behalf of N.L.R.B. v. Beer Drivers & Salesmen's Local Union No. 888, Int'l Bhd. of Teamsters,

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Chauffeurs, Warehousemen & Helpers of Am., 536 F.2d 1268, 1277 (9th Cir. 1976); see Nikko

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Materials USA v. R.E. Serv. Co., No. C 03-2549 SBA, 2006 WL 1749550, at *3 (N.D. Cal. June

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22, 2006) (“[C]ivil contempt may not be tried on the basis of affidavits alone.”). However, the

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court need not hold a “full-blown” evidentiary hearing if affidavits are submitted and are

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uncontroverted. Peterson v. Highland Music, Inc., 140 F.3d 1313, 1324 (9th Cir. 1998), as

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amended on denial of reh’g and reh’g en banc (June 15, 1998) (“[A] district court’s decision not

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to hold a full-blown evidentiary hearing does not violate due process.”).

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The notice procedures of Rule 42(a) were previously codified under Rule 42(b).
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Accordingly, in a civil contempt proceeding the contemnor should be “(1) be informed,

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through a show-cause order, of his purportedly contumacious conduct, and (2) be given a hearing

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at which he can be represented by counsel, call witnesses, and testify in order to show cause why

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he should not be held in contempt.” Nikko Materials USA, 2006 WL 1749550, at *3 (quoting

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Mercer v. Mitchell, 908 F.2d 763, 768 (11th Cir. 1990)). As also noted by petitioner here, due to

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the possibility of incarceration, the contemnor is entitled to appointed counsel in the event he is

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found to be indigent. See Alter, 482 F.2d at 1024, n.11 (noting that in the prosecution of

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contempt, due process of law requires and includes “ ‘the assistance of counsel, if requested, and

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the right to call witnesses to give testimony, relevant either to the issue of complete exculpation

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or in extenuation of the offense and in mitigation of the penalty to be imposed.’”) (quoting Cooke

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v. United States, 267 U.S. 517, 537 (1925)); but see In re Grand Jury Proceedings, 468 F.2d

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1368, 1369 (9th Cir. 1972) (recognizing circumstances in which the Due Process Clause does not

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automatically require the provision of counsel in civil contempt proceedings).

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For the reasons set forth above and as requested by petitioner (Doc. No. 11 at 1–2), the
court hereby orders the following:

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1. Respondent is required to show cause in writing by October 3, 2017, supported by

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affidavits signed under penalty of perjury if appropriate, as to:

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a. Why he should not be held in civil contempt due to his failure to comply with the
court’s March 23, 2017 order;

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b. Why he should not be incarcerated and/or ordered to pay coercive fines until he
complies with the court’s March 23, 2017 order;

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2. Respondent shall also include in his written response to this order to show cause a list of

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the witnesses or other evidence, if any, he intends to present at the evidentiary hearing and

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shall address whether he requires the assistance of counsel and is unable to afford such

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counsel;
3. Petitioner shall respond to respondent’s response to the order to show cause, if any, by

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October 10, 2017; and
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4. The hearing on this order to show cause and, if necessary, civil contempt proceeding is

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now set for October 17, 2017 at 9:30 a.m. in the Robert E. Coyle United States

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Courthouse, 2500 Tulare Street, Fresno, California 93721, Courtroom 5 (7th Floor).

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Respondent Chapa is ordered to personally appear at that date and time.2

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IT IS SO ORDERED.

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Dated:

September 7, 2017
UNITED STATES DISTRICT JUDGE

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If, prior to the scheduled hearing date, the court is informed by petitioner’s counsel that
respondent has fully complied with the court’s March 23, 2017 order, this hearing may be
vacated.
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