Reargued In Banc December 12, 1989 Appeal from order holding Appellants in Contempt (United States District Court for the Eastern District of Pennsylvania, Civil Action No. 88-7792, entered February 6, 1989).
On Reargument: Gibbons, Chief Judge, Higginbotham, Sloviter, Becker, Stapleton, Mansmann, Greenberg, Hutchinson, Scirica, Cowen, Nygaard, and Weis, Circuit Judges. Higginbotham, Circuit Judge, concurring. Sloviter, Circuit Judge, concurring in the judgment. Scirica, Circuit Judge, with whom Stapleton, Greenberg and Cowen, Circuit Judges join, dissenting.
After a witness was subpoenaed for a discovery deposition, his attorneys filed a motion to dismiss the underlying action and advised the witness not to appear. At a hearing to show cause why the witness should not be held in contempt, the district court absolved him but held his lawyers in criminal contempt. Because we find the evidence insufficient to show guilt beyond a reasonable doubt, we reverse the order of the district court.
In the underlying action, plaintiff Waste Conversion, Inc. alleged in its October 7, 1988 complaint that Rollins Environmental Services, Inc. had fraudulently misrepresented the nature of certain waste materials that it had delivered to plaintiff for transportation to and deposit in a Michigan landfill. An understanding of the issue on appeal requires an examination of the chronology of the underlying litigation.
On December 22, 1988 the parties stipulated that the time for Rollins to file a response would be extended to April 1, 1989. On December 29, 1988 plaintiff's lawyer served on Rollins' counsel a notice to take the discovery deposition of Rollins employee Steven Petner on January 10, 1989, and in addition, asked for the production of documents. Rollins refused to produce Petner until issue was joined, but offered to comply with the request for documents. Plaintiff countered by serving Petner with a subpoena on January 19 directing him to appear for a deposition on January 27, 1989.
On January 25, 1989 Rollins moved for dismissal of the suit asserting that it lacked merit and had been brought for the purpose of obtaining discovery for use in a state agency proceeding in New Jersey. In its memorandum of law filed in support of the motion, Rollins stated that it had notified plaintiff's counsel that Petner would not appear for a deposition. The memorandum included a footnote in which Rollins requested "that all discovery be stayed pending the outcome of this motion."
Two days later plaintiff filed a "Motion to Compel Compliance with a Testimonial Subpoena" asking that Steven Petner be compelled to appear, that he be adjudged in contempt pursuant to Federal Rule of Civil Procedure 45(f), that he "and/or his attorneys (who appear to have wrongfully counseled him not to appear)" reimburse plaintiff for its reasonable expenses including attorney's fees, and that he be fined $500 per day for any unexcused failure to comply with the requested court order.
On February 2, 1989 the district court denied without prejudice the motion to compel compliance, but directed that Petner appear at a hearing on February 6 to show cause why he should not be held in contempt for failing to obey the subpoena. The order did not mention Rollins' counsel in any way.
During the hearing Rollins' attorneys, Louis A. Minella (in-house lawyer) and Matthew P. Boylan, argued that Petner was not at fault in failing to honor the subpoena because he did so on their advice. Boylan stated that he and his associates considered whether they had grounds for a protective order under Fed.R.Civ.P. 26(c), but concluded that the situations listed in the Rule apparently did not apply to their case. It had not occurred to him that a motion to quash the subpoena under Rule 45 might be appropriate; Boylan relied instead on the request for a stay of discovery in Rollins' memorandum of law supporting dismissal.
Boylan explained that in New Jersey (where he had practiced for many years), filing a motion to dismiss generally was understood as staying discovery. He conceded that this local custom is not set out in the federal rules and that it is a "loose practice." But Boylan asserted, "There was no thought to be in contempt of this Court, your Honor, or to disobey any Order." After some further discussion, the district judge addressed Petner:
The Court: Mr. Petner, I can't find that you are at fault at all in this. You recognize that that was a command to appear.
The Court: And yet you, I take it, you felt that you had no choice but to follow your attorney's advice?
The Court: All right. I'm holding each of you [Minella and Boylan] in contempt of court and fining you each $500.00. Is there anything further that you wish to say?
Boylan protested that the court's contempt citation was not appropriate under the circumstances: "I think that we did not do this in any bad faith or willfulness. That we did not follow the Rules, you have made quite clear to us, but that it is not in any sense contumacious of this court. . . ." The district judge responded that he considered it "contumacious when a Member of the Bar advises a client to break the law; to disregard the law; to disregard lawful Orders of the Court." Boylan and Minella appeal.
Federal Rule of Criminal Procedure 42 governs criminal contempt proceedings. Rule 42(b) requires that notice and hearing be given in every case where the contempt may not be summarily punished. Boylan and Minella never received notice that they were the subjects of a criminal contempt proceeding, and consequently, Rule 42(b) was not observed.
Moreover, the order to show cause did not specify that the hearing was for criminal contempt, see United States v. North, 621 F.2d 1255, 1265 (3d Cir.) (in banc), cert. denied, 449 U.S. 866, 101 S. Ct. 199, 66 L. Ed. 2d 84 (1980), nor did the court arrange to have the matter prosecuted by the United States Attorney, or by a private special prosecutor other than counsel representing plaintiff, see Young v. United States ex rel. Vuitton et Fils S.A., 481 U.S. 787, 801-02, 804, 95 L. Ed. 2d 740, 107 S. Ct. 2124 (1987).
These deficiencies are troublesome and present questions of plain error as well as appellee's standing. But because Boylan and Minella in argument before a panel of this Court disavowed any reliance on procedural irregularities, and in view of our ...