United States of America v. Nichols

Filing 26

ORDER Finding Respondent in Contempt. Purge contempt by 5/13/2015 at 10:00 a.m. If contempt not purged, Respondent must present to the United States Marshal Service on 5/13/2015 at 4:00 p.m. Signed by District Judge David M. Lawson. (SPin)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
UNITED STATES OF AMERICA,
Petitioner,
Case Number 14-50455
Honorable David M. Lawson

v.
JAMES D. NICHOLS,
Respondent.
___________________________________/

ORDER FINDING RESPONDENT IN CONTEMPT
The government filed a petition on April 11, 2014 to enforce a summons for records issued
by a revenue officer of the Internal Revenue Service to respondent James D. Nichols. On October
30, 2014, the Court filed an opinion and issued an order granting the government’s motion to
enforce the IRS summons, overruling the respondent’s objections, and ordering the respondent to
comply with the summons. Mr. Nichols appeared before the revenue officer on November 12, 2014
as ordered, but failed to produce for examination and copying the books, records, papers and other
data demanded by the summons that was served upon him on September 18, 2013. The government
filed a motion to hold Nichols in contempt for failing to comply with this Court’s order. The
respondent has not filed a response timely explaining why he did not comply, but he did appear at
a hearing today on the motion. His explanation addressed the propriety of the summons, but it did
not include a valid reason for his noncompliance.
It is axiomatic that “all orders and judgments of courts must be complied with promptly.”
Maness v. Meyers, 419 U.S. 449, 458 (1975). “The orderly and expeditious administration of justice
by the courts requires that ‘an order issued by a court . . . must be obeyed . . . .’” Id. at 459 (quoting
United States v. United Mine Workers, 330 U.S. 258, 293 (1947)).

“When a court seeks to enforce its order or supervise its judgment, one weapon in its arsenal
is contempt of court.” Elec. Workers Pension Trust Fund of Local Union # 58, IBEW v. Gary’s
Elec. Serv. Co., 340 F.3d 373, 378 (6th Cir. 2003); see also United States v. Conces, 507 F.3d 1028,
1041 (6th Cir. 2007) (“A district court unquestionably has the power to hold a litigant in civil
contempt for failure to comply with a discovery order.”) (quoting Int’l Union, United Mine Workers
v. Bagwell, 512 U.S. 821, 833 (1994)). “[T]he objective of any contempt determination is to enforce
the message that court orders and judgments are to be taken seriously.” Elec. Workers, 340 F.3d at
385 (citing NLRB v. Cincinnati Bronze, Inc., 829 F.2d 585, 590 (6th Cir.1987)).
The Court’s authority to impose civil contempt is both “inherent,” United States v. Mitchell,
556 F.2d 371, 384 (6th Cir. 1977), and statutory, see 18 U.S.C. § 401 (authorizing the federal courts
to “punish by fine or imprisonment, or both,” a party’s “[d]isobedience or resistance to [a] lawful
. . . order”). Section 7604 of Title 26 of the United States Code provides that a court may hold a
party in contempt for refusing to produce books, papers, records, or other data, or to give testimony
for the purpose of ascertaining the correctness of any tax return. 26 U.S.C. § 7604.
In order to hold a litigant in contempt, the moving party “must prove by clear and convincing
evidence that the party to be held in contempt violated a court order.” Conces, 507 F.3d at 1041-42.
“The order in question must be ‘definite and specific,’ and ‘ambiguities must be resolved in favor
of persons charged with contempt.’” Id. at 1042 (quoting Grace v. Ctr. for Auto Safety, 72 F.3d
1236, 1241 (6th Cir. 1996)). The “test is not whether [the respondent] made a good faith effort at
compliance but whether ‘[he] took all reasonable steps within [his] power to comply with the court’s
order.’” Glover v. Johnson, 934 F.2d 703, 708 (6th Cir. 1991) (quoting Peppers v. Barry, 873 F.2d
967, 969 (6th Cir. 1989)).

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The Court’s October 30, 2014 order is definite and specific and there is no evidence that the
respondent did not understand what was required of him. The order required the respondent to
“appear before revenue officer Lisa Seely or her designated representative on November 12, 2014
at 10:00 a.m., at 22600 Hall Road, Suite 102, Clinton Township, Michigan, to give testimony, and
to produce for examination and copying the books, records, papers, and other data demanded by the
summons that was served upon the respondent on September 18, 2013.” Although Nichols appeared
for the examination as ordered, he did not produce any of the requested books, records, or papers
that the summons demanded. Because Nichols failed to produce any of the requested records, the
government has established a prima facie case that the respondent failed to comply with the Court’s
order.
Nichols has not provided a satisfactory explanation for his failure to comply. He has never
indicated previously that he does not have the requested information or documents. Instead, he has
consistently maintained that he is not required to comply with the Court’s order. “Persons who
make private determinations of the law and refuse to obey an order generally risk” being placed in
contempt. Meyers, 419 U.S. at 458-59 (citing Howat v. Kansas, 258 U.S. 181, 189 (1887)). Nichols
has run that risk here and lost.
Accordingly, it is ORDERED that James D. Nichols is adjudged in civil contempt of this
Court. He may purge himself of that contempt by appearing before revenue officer Lisa Seely or
her designated representative on May 13, 2015 at 10:00 a.m., at 22600 Hall Road, Suite 102,
Clinton Township, Michigan, or at an earlier time and place agreed in writing by the parties, to
give testimony, and to produce for examination and copying the books, records, papers and other

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data demanded by the summons that was served upon the respondent on September 18, 2013. The
examination shall continue from day to day until completed.
It is further ORDERED that if the respondent fails to purge himself of his contempt, he shall
present himself to the United States Marshal for this district in the Theodore Levin United States
Courthouse, 231 West Lafayette Boulevard, Detroit, Michigan on May 13, 2015 at 4:00 p.m., to
be committed to the custody of the United States Marshal for confinement at a suitable place. Such
confinement is to continue until such time as James D. Nichols purges himself of the contempt by
complying with the Internal Revenue Summons in the manner described above. Such confinement
under this order may not exceed 18 months.
It is further ORDERED that the petitioner shall personally serve the respondent with a
copy of this order on or before May 8, 2015, and file proof of service on the docket.
s/David M. Lawson
DAVID M. LAWSON
United States District Judge
Dated: May 6, 2015

PROOF OF SERVICE
The undersigned certifies that a copy of the foregoing order was served
upon each attorney or party of record herein by electronic means or first
class U.S. mail on May 6, 2015.
s/Susan Pinkowski
SUSAN PINKOWSKI

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