Claim of Ignorance Can’t Save Party from Sanctions for Contempt

(Update August 24, 2012): As previously predicted by Minnesota Litigator, Camtek challenged the order for $1.2 million in sanctions. On Camtek’s motion for relief from judgment under Fed. R. Civ. Pro. 60(b), U.S. District Court Judge John Tunheim (D. Minn.), the newly assigned judge in the case (U.S. District Chief Judge Michael Davis (D. Minn.), recused himself ), gave Camtek a massive sanctions-reducing haircut.

As a refresher, back in March, Chief Judge Davis held that Camtek had flagrantly flouted court orders and ordered it to pay $645,946 for contempt of court.  To discourage future similar misconduct and “as a stern warning to a party which has shown a clear lack of respect” to the court, the judge awarded double damages and increased the sanctions to over $1.2 million. Thereafter, Camtek sought relief from the imposition of sanctions and the holding that it was in contempt.

Judge Tunheim reduced the sanctions because double damages were not imposed to compensate August Technology and, because Chief Judge Davis doubled damages to validate the court’s authority, the punitive nature of the sanctions required stepped up due process protections. According to International Union, United Mine Workers of America v. Bagwell, contempt sanctions are considered criminal if they are punitive or to “to vindicate the authority of the court.”  As such, criminal sanctions are afforded “the protections that the Constitution requires of criminal proceedings.   Continue reading