author: LASKER, District Judge.

text:
    UNITED STATES of America, ex rel. William STANBRIDGE, Reg. # 79750-158, Petitioner, v. Michael QUINLAN, Warden, Otisville Federal Correctional Institution, Respondent.
    No. 83 Civ. 6469(MEL).
    United States District Court, S.D. New York.
    Oct. 26, 1984.

      Donald H. Zuckerman, Pound Ridge, N.Y., for petitioner.
    Rudolph W. Giuliani, U.S. Atty., S.D. N.Y., New York City, for respondent; Denny Chin, Asst. U.S. Atty., New York City, of counsel.
   LASKER, District Judge.

Petitioner William Stanbridge moves for a writ of habeas corpus pursuant to 28 U.S.C. § 2241 (1982) on the grounds that his parole was wrongfully revoked and that his sentence has been erroneously calculated, resulting in continuing imprisonment beyond his proper release date. The petition is denied.

I.

In 1974, while on state parole from sentences imposed in 1962, Stanbridge was convicted of conspiracy to distribute narcotics and sentenced to seven years in federal custody. He was paroled to a state detain-er on September 29,1976 and spent 82 days in state custody for violation of his state parole due to the 1974 conviction. He was released from state custody in December, 1976 and remained on both federal and state parole until his August, 1979 arrest described below.

On July 8, 1979, Stanbridge was arrested on a federal narcotics charge. While on bail, he was arrested by the state authorities on August 29, 1979 for criminal possession of a deadly weapon. Stanbridge was ultimately acquitted of this charge but the weapons arrest nevertheless caused him to remain in state custody from his arrest in August of 1979 until April 15, 1983 for violation of state parole on the 1962 sentence.

On July 2, 1980, Stanbridge pled guilty to conspiracy to distribute narcotics in violation of 21 U.S.C. § 841 (1982) in connection with the July 1979 arrest and he was sentenced to eighteen months to be served consecutively to the state sentence.

On November 29, 1979, the United States Parole Commission (“Commission”) issued a parole violator warrant citing the August, 1979 weapons arrest as grounds for revocation of parole from the 1974 sentence. The warrant was supplemented in October of 1980 to add the narcotics conviction as grounds for revocation.

A federal parole revocation hearing was held on November 16, 1982 at which Stan-bridge was represented by retained counsel and several witnesses appeared on his behalf. The parole hearing officer recommended revocation based solely upon the 1980 narcotics conviction.

On March 2,1983, the Commission issued a Notice of Action to Stanbridge which stated that his parole was revoked and required that he serve the remainder of his 1974 sentence (1506 days) after his eighteen month 1980 sentence was completed. No credit was given for time spent on parole prior to the 1979 arrest, nor was credit given for time spent in state custody on state charges while Stanbridge was on federal parole.

Stanbridge’s counsel wrote to both the hearing officer and the United States Parole Commissioner immediately after the parole revocation hearing to assert that the conduct of the hearing violated due process. In a letter dated March 4, 1983, the Commission answered some of the attorney’s arguments and invited him to submit any additional mitigating information which he felt had not been presented at the hearing. Petitioner’s attorney responded by letter of March 31, 1983, in which he declined to submit additional information, repeated his due process objections, and requested that the letter be deemed a Notice of Appeal of the revocation.

On April 15, 1983, Stanbridge was released from state custody to federal custody to serve his remaining sentences.

II.

Petitioner argues: (1) that he has been improperly denied credit (a) on his 1974 sentence for the time spent in state custody and (b) for street time; (2) that the supplement to the parole violator warrant was improperly issued thereby invalidating the revocation of parole; and (3) that the parole revocation hearing was invalid for failure to follow minimum standards of due process.

Although Stanbridge failed to exhaust the administrative appeal procedures available under 28 C.F.R. § 2.25.27 (1984), the government conceded at oral argument that the doctrine of exhaustion is not applicable in a case such as this in which the petitioner’s claims involve questions of statutory interpretation of first impression in this circuit.

(1) Credit for time spent in state custody and on parole prior to the 1979 arrest

Stanbridge relies upon the terms of 18 U.S.C. § 3568 (1982) to argue that he is entitled to credit on his 1974 federal sentence for the approximately 44 months (August, 1979 to April, 1983) spent in state custody for violation of state parole on the weapons arrest.

. This reliance is misplaced; § 3568 provides that credit shall be given for “any days spent in custody in connection with the offense or acts for which sentence is imposed.” 18 U.S.C. § 3568 (1982). This provision does not provide credit for time spent in state custody for a separate and distinct offense unrelated to the offense or acts for which the federal sentence is imposed. Sherbicki v. United States, 366 F.Supp. 1290, 1293 (S.D.N.Y.1973) (time spent in state custody on assault charges not credited against federal narcotics sentence).

Stanbridge’s federal sentences were imposed for narcotics convictions in 1974 and in 1980; his time spent in state custody related to his 1962 state sentences and the 1979 arms arrest as a violation of parole. He is therefore not entitled to federal credit for the time spent in state custody.

Stanbridge also argues that 18 U.S.C. § 4210(b)(2) (1982) entitles him to credit for the approximately 34 months from his 1976 release from state to federal custody until his July, 1979 narcotics arrest. He bases this contention on two propositions: (1) that § 4210(b)(2), which authorizes revocation of parole for conviction of an offense committed while on parole, does not authorize the forfeiture of his street time (from his December, 1976 release on state and federal parole until his July, 1979 narcotics arrest); and (2) the § 4210(b)(2) forfeiture provision does not apply to time spent in state custody when the release on federal parole is pursuant to state detainer and the parolee goes immediately into state custody (in this case, the 82 days from his September, 1976 federal release on parole to a state detainer until his December, 1976 release from state custody on parole).

Stanbridge argues that both the plain meaning of the subsection and its legislative history do not authorize the forfeiture of street time. He states that time spent on parole is “time ... the parolee has previously served in connection with the offense” within the meaning of the subsection. He also contends that the omission of express street time forfeiture provisions in the 1976 Act, which were contained in the 1948 Act before its amendment, reflects Congress’ intent that street time is not subject to forfeiture under the Act as amended.

Notwithstanding petitioner’s argument, every court confronted with this question has concluded that § 4210(b)(2) does authorize forfeiture of street time upon conviction of a new offense while on parole, despite the lack of any express street time forfeiture provision in the amended act itself. See United States v. Newton, 698 F.2d 770, 772 (5th Cir.1983); Harris v. Day, 649 F.2d 755, 758-60 (10th Cir.1981); Frick v. Quinlan, 631 F.2d 37, 39 (5th Cir.1980); Lambert v. Warden, 591 F.2d 4, 8 (5th Cir.1979); United States ex rel. Del Genio v. United States Bureau of Prisons, 644 F.2d 585, 586-88 (7th Cir.1980), cert. denied, 449 U.S. 1084, 101 S.Ct. 870, 66 L.Ed.2d 808 (1981); Wilkerson v. United States Board of Parole, 606 F.2d 750, 751 (7th Cir.1979); see, also, Booze v. Thomas, 500 F.Supp. 327, 329 (S.D.N.Y. 1980) (dictum).

Moreover, § 4210(b)(2) also states that “the Commission shall determine, in accordance with the provisions of section 4214(b) or (c), whether all or any part of the unexpired term being served at the time of parole shall run concurrently or consecutively with the sentence imposed for the new offense ____” 18 U.S.C. § 4210(b)(2) (1982) (emphasis added). This language is evidence of an intent that the unexpired term begin to run upon the release on parole, and not upon the commission of the offense for which parole is revoked. See United States v. Newton, supra, 698 F.2d at 772 (parole violator forfeits his street time upon conviction of a new offense subsequent to his release on parole).

Moreover, the legislative history of § 4210(b)(2) does not support petitioner’s argument. The House Conference Report, referring to this subsection, states:

“This subsection also provides that an individual whose parole has been revoked upon conviction of any new criminal offense that is punishable by a term of detention, incarceration or imprisonment in any penal institution shall receive no credit for service of his sentence from the day he is released on parole until he either returns to federal custody following completion of any sentence or incarceration or upon the Commission determining that the sentence run concurrently with any new sentence that may have been imposed, pursuant to Section 4214(b) or (c) of this Act.”

Joint Explanatory Statement of the Committee of Conference, H.Conf.Rep. No. 838, 94th Cong., 2d Sess. 32 (1976), reprinted in 1976 U.S.Code Cong. & Ad.News 335, 351, 364. See also United States v. Newton, supra, 698 F.2d at 772. The Commission has issued regulations in accordance with this interpretation.

We therefore conclude that § 4210(b)(2) does authorize the forfeiture of street time upon conviction of an offense while on parole.

Stanbridge next contends that § 4210(b)(2), even if it does authorize the forfeiture of street time, does not allow forfeiture of time spent in state custody when the parolee is released on federal parole directly to the state authorities on a state detainer. He argues that release on a detainer is not “release on parole” within the meaning of the Parole Act, and that he is therefore entitled to credit for the 82 days spent in state custody from September to December, 1976.

The term “parole” is not expressly defined in the Parole Act. The Commission, however, has promulgated regulations which define “parole to a detainer” as “release to the ‘physical custody’ of the authorities who have lodged the detainer.” 28 C.F.R. § 2.32(c) (1984) (emphasis added).

Stanbridge’s argument ignores the dual sovereignty principle: as separate and distinct sovereigns, the state and federal governments each has the right to define offenses and impose sentences in the exercise of their independent sovereignty. Abbate v. United States, 359 U.S. 187, 194, 79 S.Ct. 666, 670, 3 L.Ed.2d 729 (1959) (citing, United States v. Lanza, 260 U.S. 377, 382, 43 S.Ct. 141, 142, 67 L.Ed. 314 (1922)). As a result, the federal parolee in state prison fulfills two separate obligations, each owed independently to the state or federal government. See Garafola v. Wilkinson, 721 F.2d 420, 424-25 (3rd Cir.1983) (holding that parole to a state detainer is in all respects parole within the meaning of the Parole Act. Id. at 426). To give a federal parolee federal sentence credit for his time spent in state custody on unrelated charges would effectively ignore the dual sovereignty concept. See id. at 424-25.

Accordingly, we hold that release on federal parole to a state detainer is release on parole within the meaning of the Parole Act. Stanbridge is not entitled to credit for the 82 days in state custody.

(2) Supplementation of the Parole Revocation Warrant

Stanbridge’s contention that his parole revocation is invalid because the revocation warrant was improperly supplemented is without merit. A supplement to an existing warrant issues when the Commission discovers additional grounds for revocation of parole. Its sole purpose is to give the parolee notice of the new charges. Here, the supplement merely cited the 1980 narcotics conviction as the additional ground for revocation.

Stanbridge maintains that the supplement was improper because it was not accompanied by a Notice of Action advising him of his rights of appeal. However, there is no right of appeal to a supplement, since it merely cites additional charges. The parolee may rebut these charges at his hearing. The original warrant advises the parolee of his procedural rights relating to a hearing. Stanbridge received copies of both the original warrant and its supplement and therefore had notice of all charges and of his right to rebut these charges. Accordingly, we conclude that the supplement was properly issued.

(3) Conduct of the Parole Revocation Hearing

Stanbridge argues that the parole revocation hearing is invalid because it failed to comply with the minimum due process requirements set forth in Morrissey v. Brew er, 408 U.S. 471, 92 S.Ct. 2593, 33 L.Ed.2d 484 (1972) and Gagnon v. Scarpelli, 411 U.S. 778, 93 S.Ct. 1756, 36 L.Ed.2d 656 (1973). Stanbridge argues that the hearing officer was not “neutral and detached” as required by Morrissey, and that the officer prevented Stanbridge’s counsel from effectively presenting mitigatin material on Stanbridge’s behalf.

Specifically, Stanbridge objects to: (1) the taking of unsworn testimony; (2) undue restriction upon counsel’s participation at the hearing through repeated interruptions by the hearing officer and by denial of counsel’s right to summation; and (3) alleged repeated stopping of the tape recording of the hearing by the hearing officer which prevented counsel from properly preserving issues for appellate review.

After listening to the tape recording of the hearing, we are satisfied that the hearing officer was neutral and detached within the meaning of Morrissey v. Brewer, supra. Although counsel was interrupted while questioning witnesses, in each instance he was permitted to comment and to question the witnesses after the hearing officer had completed questioning. Moreover, the hearing officer questioned all witnesses in a neutral and impartial manner, eliciting information to aid him in predicting whether or not Stanbridge could safely remain on parole. The admission of unsworn testimony did not prejudice Stan-bridge, since the witnesses that appeared did so voluntarily and in Stanbridge’s behalf. The hearing officer’s recommendation to revoke parole was a rational exercise of his discretion after a full and fair hearing.

Nor did the conduct of the hearing violate Stanbridge’s right to due process of law. The Supreme Court, in Morrissey v. Brewer, supra, held that due process, in the case of a final parole revocation hearing, requires the following elements:

(a) written notice of the claimed violations of parole; (b) disclosure to the parolee of evidence against him (c) opportunity to be heard in person and to present witnesses and documentary evidence; (d) the right to confront and cross-examine adverse witnesses (unless the hearing officer specifically finds good cause for not allowing confrontation); (e) a ‘neutral and detached’ hearing body such as a traditional parole board, members of which need not be judicial officers or lawyers; and (f) a written statement by the factfinders as to the evidence relied on and reasons for revoking parole.

Id., 408 U.S. at 489, 92 S.Ct. at 2604. In Gagnon v. Scarpelli, supra, the Court held that, in certain individual cases, due process may also require that the state provide counsel to indigent probationers or parolees. Id., 411 U.S. at 790, 93 S.Ct. at 1763.

In establishing due process requirements at final parole revocation hearings, the Court distinguished such events from criminal proceedings. A revocation hearing is not strictly adverserial; the state is represented by a parole officer rather than a prosecutor; formal procedures and rules of evidence do not apply; the members of the hearing body are familiar with the problems and practices of parole. Id. at 789, 93 S.Ct. at 1763.

In articulating the informal and non-adverserial nature of these hearings, and in denying the parolee an absolute right to counsel, the Supreme Court has indicated that certain procedural safeguards, such as the taking of sworn testimony or counsel’s right to summation, are within the discretion of the hearing officer, so long as he remains neutral and detached. See id. at 787-89, 93 S.Ct. at 1762-63.

Were we writing on a clean slate, we might be disposed to require that witnesses be sworn as a matter of course, and that, where counsel is present, he be permitted a reasonable right of summation. Procedural safeguards such as these can help guarantee a fair hearing with minimal interference with the informality and nonadverserial aspects of the hearing. However, as a matter of law, due process does not dictate such procedures, see Morrissey v. Brewer, supra, 408 U.S. 471, 92 S.Ct. 2593, 33 L.Ed.2d 484; Gagnon v. Scarpelli, supra, 411 U.S. 778, 93 S.Ct. 1756, 36 L.Ed.2d 656; nor, on the facts of this case, were petitioner’s due process rights infringed in any way by the conduct of the hearing in question.

We therefore conclude that Stanbridge’s parole revocation hearing complied with the minimum requirements of due process.

The petition for a writ of habeas corpus is denied. Certificate of probable cause is granted.

It is so ordered.

      . The state parole violation determination relating to the weapons arrest was upheld by the New York Court of Appeals. Stanbridge v. Hammock, 55 N.Y.2d 661, 431 N.E.2d 290, 446 N.Y.S.2d 929 (1981).

      . Petitioner’s claim involves interpretation of the forfeiture provisions contained in the Parole Commission and Reorganization Act of 1976, 18 U.S.C. § 4210(b)(2) (1982). A prisoner contesting a Commission order revoking parole must ordinarily exhaust available administrative remedies as a prerequisite to habeas relief. Guida v. Nelson, 603 F.2d 261, 262 (2d Cir.1979); Carmel v. Thomas, 510 F.Supp. 784, 788 (S.D.N.Y. 1981). However, failure to exhaust administrative relief procedures will not result in dismissal where the appeal to the court is based upon bona fide questions of statutory interpretation ' as these matters lie outside the expertise of the particular administrative body and are properly the subject of judicial review. See McKart v. United States, 395 U.S. 185, 89 S.Ct. 1657, 23 L.Ed.2d 194 (1969).

      . 18 U.S.C. § 3568 (1982) reads in pertinent part as follows:
      The sentence of imprisonment of any person convicted of an offense shall commence to run from the date on which such person is received at the penitentiary, reformatory, or jail for service of such sentence. The Attorney General shall give any such person credit toward service of his sentence for any days spent in custody in connection with the offense or acts for which sentence was imposed. As used in this section, the term ‘offense’ means any criminal offense, other than an offense triable by court-martial, military commission, provost court, or other military tribunal, which is in violation of an Act of Congress and is triable in any court established by Act of Congress.

        Id.

      . Section 4210(b)(2) reads as follows:
      (b) Except as otherwise provided in this section, the jurisdiction of the Commission over the parolee shall terminate no later than the date of the expiration of the maximum term or terms for which he was sentenced, except that — .
      (2) in the case of a parolee who has been convicted of a Federal, State or local crime committed subsequent to his release on parole, and such crime is punishable by a term of imprisonment, detention or incarceration in any penal facility, the Commission shall determine, in accordance with the provisions of section 4214(b) or (c), whether all or any part of the unexpired term being served at the time of parole shall run concurrently or consecutively with the sentence imposed for the new offense, but in no case shall such service together with such time as the parolee has previously served in connection with the offense for which he was paroled, be longer than the maximum term for which he was sentenced in connection with such offense.
      18 U.S.C. § 4210(b)(2) (1982).

      . Former § 4205 reads as follows:
      § 4205. Retaking parole violator under warrant; time to service undiminished
      A warrant for the retaking of any United States prisoner who has violated his parole, may be issued only by the Board of Parole or a member thereof and within the maximum term or terms for which he was sentenced. The unexpired term of imprisonment of any such prisoner shall begin to run from the date he is returned to the custody of the Attorney
      General under said warrant, and the time the prisoner was on parole shall not diminish the time he was sentenced to serve.
      18 U.S.C. § 4205 (1970) (repealed as part of the general revisions enacted by the Parole Commission and Reorganization Act, 18 U.S.C. §§ 4201-18 (1982)).

      . The Commission has issued the following regulation

        If the parolee has been convicted of a new offense committed subsequent to his release on parole, which is punishable by a term of imprisonment, forfeiture of the time from the date of such release to the date of execution of the warrant shall be ordered, and such time shall not be credited to service of the sentence____
      28 C.F.R. § 2.52(c)(2) (1984).

      . Petitioner relies upon Garafola v. Wilkinson, 555 F.Supp. 1002 (M.D.Pa.1983), which held that release to a detainer is not release on parole. Garafola has since been reversed. See id., 721 F.2d 420 (3d Cir.1983).

      . Stanbridge also contends that the hearing officer failed to consider that his 1980 plea was nolo contendere. This is irrelevant as Stan-bridge pled guilty pursuant to North Carolina v. Alford, 400 U.S. 25, 91 S.Ct. 160, 27 L.Ed.2d 162 (1970); the plea was not nolo contendere.


source: Caselaw Access Project

author: FORD, Judge.

license: Public Domain

text:
    FUJI ELECTRIC CO., LTD., et al., Plaintiffs, v. UNITED STATES, Defendant.
    Court No. 83-7-00965.
    United States Court of International Trade.
    May 2, 1984.
   Memorandum To Accompany Order

FORD, Judge.

Hitachi, Ltd. and Hitachi America Ltd., hereinafter referred to as Hitachi, has moved pursuant to Rule 24(a) of the Rules of this Court for leave to intervene as party plaintiffs and file a proposed complaint attached to its motion. The proposed intervenor urges it has an unconditional right to intervene under the provisions of Section 516(a) of the Tariff Act of 1930, as amended by the Trade Agreements Act of 1979, 19 U.S.C. § 1516(a) since it was an interested party who participated in the administrative proceeding.

Plaintiff, Westinghouse Electric Corp., and defendant, the United States, have filed partial opposition, not to the intervention but to paragraphs III, IV, V and VI of the complaint. The opposition is based upon the fact that said paragraphs set forth claims not covered by the original complaint and hence beyond the scope of this proceeding. Although Hitachi could have been a party to the action by the timely filing of a summons and complaint, it chose to participate in this action as an intervenor.

These consolidated actions are the result of a determination on June 8, 1983 by the International Trade Administration (“ITA”) of the Department of Commerce covering an antidumping review of large transformers from Japan, 48 Fed.Reg. 26498. The determinations were made pursuant to Section 751 of the Tariff Act of 1930 as amended by the Trade Agreements Act of 1979, 19 U.S.C. § 1675. The findings of its review related to exports of Fuji Electric Co., Ltd., Hitachi Ltd., and Tokyo Shibaura Electric Co. Ltd. and covered entries of merchandise through June 30, 1980.

After the results were published in the Federal Register several interested parties commenced actions in this Court. Fuji Electric Corporation of America (hereinafter referred to as Fuji), on July 7, 1983, filed a summons in Court No. 83-7-00965. A complaint was thereafter filed on August 5, 1983.

On July 7, 1983 Toshiba Corporation and Toshiba International Corporation (hereinafter referred to as Toshiba) filed a summons in Court No. 83-7-00980. The complaint to its action was filed on August 5, 1983.

Westinghouse Electric Corporation, a domestic producer of power transformers and shunt reactors instituted this anti-dumping proceeding and filed its summons in Court No. 83-7-00981 on July 8, 1983 and its complaint on August 8, 1983.

Inasmuch as the three actions involve similar questions of law and fact, defendant moved for consolidation pursuant to Rule 42(a), which was granted on September 8, 1983. Defendant has answered the complaints in each of these actions.

On January 20, 1984 Hitachi filed the present motion for leave to intervene in these consolidated actions. Hitachi based its right to appear as an intervenor since it was a party to the administrative proceeding. Attached to its motion Hitachi filed a nine-paragraph complaint, including five claims which raise matters not previously set forth in the pleadings filed in these consolidated actions.

The five claims involved challenge the following:

(1) The ITA’s decision to utilize postdated home market sales for comparison with sales to the United States.

(2) The ITA’s determination that a home market sale may be properly dated from date of the “letter of intent” pertaining to the sale.

(3) The ITA’s calculation of packing cost adjustments.

(4) The ITA’s holding that shunt reactors are within the scope of the dumping finding and the decision of the Secretary of the Treasury that shunt reactors were or were likely to be sold at less than fair value.

(5) The ITA’s decision to omit dollar additions in the price calculations for one home market customer.

Hitachi invokes Section 516(a) of the Tariff Act of 1930, supra, as a basis for jurisdiction. Said section provides for time limitations on the challenging of the ITA’s determinations. A party challenging a final determination under the foregoing section must do so within thirty days of publication of the determination. Hitachi permitted seven months to elapse from the date of publication, June 8,1983 to January 20, 1984, before interposing a challenge. As indicated supra the challenge was based upon its status as an intervenor rather than as a party to the action.

In Nakjima All Co., Ltd. v. United States, et al., 2 C.I.T. 170 (1981), an intervenor sought to amend its answer to interpose a cross claim which was not presented to the court by either plaintiff or defendant. The court held it lacked jurisdiction over the proposed cross claim since it was asserted after the statutory time limitation imposed by the statute.

The court concluded therein that, while interested parties have a right to appear and be heard, they may not do so in contravention of the time limitation imposed by the statutory provisions.

The Supreme Court in Chandler & Price Co. v. Brandtjen & Kluge, Inc., 296 U.S. 53, 56 S.Ct. 6, 80 L.Ed. 39 held “[Ijssues tendered by or arising out of plaintiff’s bill may not by the intervenor be so enlarged. It is limited to the field of litigation open to the original parties”. The court further stated “The purpose for which permission to intervene may be given is that the applicant may be put in the position to assert in that suit a right of his in respect of something there in dispute between the original parties.”

Accordingly, Hitachi, appearing as intervenor, takes the action as it has been framed by the parties therein. It appears Hitachi may intervene as a matter of right, and accordingly that portion of said motion is granted. However, that part of the motion to strike paragraphs III, IY, V, YII of Hitachi’s proposed complaint is granted.


author: FORD, Judge:

text:
    PEUGEOT MOTORS OF AMERICA, INC., Plaintiff, v. UNITED STATES, Defendant.
    Court No. 80-9-01400.
    United States Court of International Trade.
    Sept. 13, 1984.
    Paul, Weiss, Rifkind, Wharton & Garrison, New York City (Lewis R. Clayton, New York City, on the briefs; Steven B. Rosenfeld and Lee J. Dobkin, New York City, of counsel; and Alan S. Hays, New York City), for plaintiff.
    Richard K. Willard, Acting Asst. Atty. Gen., David M. Cohen, Director, Commercial Litigation Branch, Washington, D.C. (A. David Lafer, Francis J. Sailer, New York City, on the brief; Edward N. Maurer, Washington, D.C., of counsel), for defendant.
   FORD, Judge:

This action contests Customs’ appraisal of plaintiff’s automobiles for the model year 1974. Entries were made at New York, Norfolk, Portland and Los Angeles. The automobiles are included in the “Final List”, T.D. 54521, and were appraised on the basis of cost of production (COP) pursuant to section 402a(f) of the Tariff Act of 1930, as amended, 19 U.S.C. § 1402(f). There is no dispute that cost of production is the proper basis of appraisement. However, plaintiff asserts the value arrived at by customs is erroneous.

The liquidation based upon the erroneous appraisal should be set aside, according to plaintiff, since Customs applied “retroactively” a “new” interpretation of section 402a(f), supra, contrary to the general principles of administrative and constitutional law. Plaintiff also urges that an “unreasonable and wrongful delay” of the liquidation, in violation of the Administrative Procedure Act and Customs Regulations, requires the liquidation be set aside.

Plaintiff has moved pursuant to Rule 56(a) of the Rules of this Court for summary judgment. Defendant has cross-moved for summary judgment under Rule 56(b).

The statutory provisions involved provide as follows:

Final list published by the Secretary of the Treasury pursuant to section 6(a), Public Law 927, 84th Congress.

T.D. 54521:

Every article specified in such final list which is entered, or withdrawn from warehouse, for consumption on or after the thirtieth day after the date of publication of such final list in the Federal Register, shall be appraised in accordance with the provisions of section 402a of the Tariff Act of 1930, as amended.

19 U.S.C. § 1402:

1402. Value (alternative). — (a) Basis.— For the purposes of this Act [§ 1202 et seq. of this title] the value of imported articles designated by the Secretary of the Treasury as provided for in section 6(a) of the Customs Simplification Act of 1956 [not to this section] shall be—
(3) If the appraiser determines that neither the foreign value, the export value, nor the United States value can be satisfactorily ascertained, then the cost of production;
(f) Cost of production. — For the purposes of this title the cost of production of imported merchandise shall be the sum of—
(1) The cost of materials of, and of fabrication, manipulation, or other process employed in manufacturing or producing such or similar merchandise, at a time preceding the date of exportation of the particular merchandise under consideration which would ordinarily permit the manufacture or production of the particular merchandise under consideration in the usual course of business;
(2) The usual general expenses (not less than 10 per centum of such cost) in the case of such or similar merchandise;
(3) The cost of all containers and coverings of whatever nature, and all other costs, charges, and expenses incident to placing the particular merchandise under consideration in condition, packed ready for shipment to the United States; and
(4) An addition for profit (not less than 8 per centum of the sum of the amounts found under paragraphs (1) and (2) of this subdivision) equal to the profit which ordinarily is added, in the case of merchandise of the same general character as the particular merchandise under consideration, by manufacturers or producers in the country of manufacture or production who are engaged in the production or manufacture of merchandise of the same class or kind.

Section 315(d) of the Tariff Act of 1930, as amended, 19 U.S.C. § 1315(d):

(d) No administrative ruling resulting in the imposition of a higher rate of duty or charge than the Secretary of the Treasury shall find to have been applicable to imported merchandise under an established and uniform practice shall be effective with respect to articles entered for consumption or withdrawn from warehouse for consumption prior to the expiration of thirty days after the date of publication in the Federal Register of notice of such ruling; but this provision shall not apply with respect to the imposition of antidumping duties or the imposition of countervailing duties under section 1303 of this title.

Plaintiff’s position, that the appraisement should be set aside since it is “retroactively” applied by virtue of a “new” interpretation of the COP statute, is without merit. Under the statutory provisions covering importations, duties can never be collected prospectively. At the time of importation “estimated” duties are deposited with Customs. The merchandise is thereafter appraised, classified and liquidated in accordance with 19 U.S.C. 1500. The liquidation is the final computation and ascertainment of duties due on the merchandise covered by the entries. It is therefore apparent that the final collection of duties must be “retroactive” since any increase or decrease of duties as a result of liquidations can only take place at a time subsequent to the time of entry. The question of retroactive assessment of duty was considered by the Court of Customs and Patent Appeals in Dart Export Corp., et al. v. United States, 43 CCPA 64, C.A.D. 610 (1956), cert. denied 352 U.S. 824, 77 S.Ct. 33, 1 L.Ed.2d 48 (1956), wherein the Court made the following comment:

The importer also argues that the imposition of additional duties under the statute at the time of liquidation is a “case of retroactivity so arbitrary, capricious, and unreasonable as to violate the requirement of due process.” It is our view that this argument is not well founded. We cannot see where the imposition of additional duties at the time of liquidation is retroactive in an arbitrary manner, as urged by appellant, because the statute itself gives ample notice that there may be a change from the duties assessed at entry at the time of liquidation.”

The question of whether the appraisement herein violated the principle of “established and uniform practice” must also be resolved in favor of defendant. Plaintiff contends the change in interpretation of the COP statute would nullify the liquidation as a violation of an established and uniform practice. The basis of this position is the ambiguity of the statute and the right of an importer to rely upon a long standing practice. The cases of Henry Clay and Bock & Co. Ltd. v. United States, 41 CCPA 45, C.A.D. 527 (1953), Commonwealth Oil Refining Company, Inc. v. United States, 60 CCPA 162, 480 F.2d 1352 (1973), and United States v. Electrolux Corporation, 46 CCPA 143, C.A.D. 718 (1959), relied upon by plaintiff, relate to ambiguous statutes. The cases of United States v. H. Bayersdorfer & Co., 16 Ct.Cust.Appls. 43, T.D. 42717 and Benrus Watch Co. Inc., et al. v. United States, 53 Cust.Ct. 28, C.D. 2469 (1964), relied upon by plaintiff, relate to long-established administrative practice concerning classification. Reference to ascertaining the cost of production goes back as far as the Tariff Act of 1883 (section 9) and has continued throughout the various tariff acts. The question of ambiguity has not been satisfactorily established and in fact need not be considered under the circumstances of this case.

It is noted that the statutory provision covering uniform practice (19 U.S.C. 1315(d)) begins with “No administrative ruling resulting in the imposition of a higher rate of duty or charge____” This relates to the imposition of a rate of duty which is imposed under the classification provisions of 19 U.S.C. § 1500 and not the appraisement provisions of 19 U.S.C. § 1500 and § 1402. Uniformity in classification, as indicated by the Bayersdorfer and Benrus cases, supra, was intended to be covered by section 1315(d). Appraisement is conceptually different from classification. In appraisement every transaction stands independently. The same merchandise from the same manufacturer sold to a different purchaser may result in an entirely different appraisement, as well as the basis of appraisement, depending upon the terms, conditions, and restrictions, etc. of the sale. Consequently, a uniform practice of appraisement is not possible, nor was the law intended to encompass appraisement under the uniformity provisions. Hensel, Bruckmann & Lorbacher, Inc., For A/C Verona Dyestuffs v. United States, 44 Cust.Ct. 722, Reap.Dec. 9709 (1960) , aff’d. 46 Cust.Ct. 779, A.R.D. 130 (1961), aff'd 49 CCPA 15, C.A.D. 787 (1962). This being so, the fact that Customs had accepted (with some changes) plaintiffs COP figures from 1958 to 1970 does not endow upon plaintiff the right to expect the formula utilized to remain unchanged.

Plaintiffs contention that the time of liquidation was unreasonably delayed in violation of the APA and the Customs Regulations is untenable. Under the present statutory provisions, 19 U.S.C. § 1504, (not in effect at the time the involved merchandise was entered) the entry is deemed liquidated as entered if Customs had not liquidated the entry within one year from the date of entry or withdrawal from warehouse. Congress had not prescribed a time period within which to liquidate entries prior to this provision as is evident from the statement of Reason for Change contained in S.Rep. No. 95-778 at 832, U.S.Code Cong. & Admin.News 1978, pp. 2211, 2243, which contains the following:

Reason for change. —The provisions adopted by the committee [section 209] would increase certainty in the customs process for importers, surety companies, and other third parties with a potential liability relating to a customs transaction. Under the present law, an importer may learn years after goods have been imported and sold that additional duties are due, or may have deposited more money for estimated duties than are actually due but be unable to recover the excess for years as he awaits liquidation. Surety companies, which are jointly liable with importers for additional duties, would be better able to control their liabilities. Sureties would also be better protected against losses resulting from the dissolution of their principals in instances where there has been undue delay in liquidating entries. [Emphasis supplied.]

Plaintiffs citation of section 159.51 of the Customs Regulations does not support its position that said regulation was violated by the delay in liquidation. Section 159.51, supra, refers to suspensions of liquidation, which are entirely different than delay. The term suspension is a term of art utilized in Customs jurisprudence which permits the action to remain in a hiatus until a final judicial determination is made. The delay occasioned by the overseas investigation did not amount to a suspension nor did it violate any customs regulations in existence at the time of entry.

Neither did the delay result in a violation of the Administrative Procedure Act nor was the delay a result of conduct which was arbitrary, capricious, an abuse of discretion and otherwise not in accordance with laws as prescribed by § 706(2)(A) of the Administrative Procedures Act. The process of appraising the merchandise pursuant to 19 U.S.C. § 1500, including a foreign investigation, is in the nature of a fact-finding activity and not a rule or rule-making process as defined in 5 U.S.C. § 551(4)(5). American Express Company v. United States, 60 CCPA 86, C.A.D. 1087, 472 F.2d 1050 (1973). In any event Customs was not, at the time involved herein, required to liquidate entries within any particular time period. In Dart the court, considering this contention, made the following observation:

The importer has presented still another argument as follows: “If the collector may liquidate more than 60 days .from the date of entry, he may not delay indefinitely but must liquidate within a ‘reasonable time.’ Two years was not a reasonable time in the present case.” Appellant argues that the reason two years between the time of entry and the date of liquidation was unreasonable in this case was because there was very little investigative work done by the collector during this period, and that the intervening delays were entirely unexplained. However, appellant has not shown that there was any departure from the usual administrative practice as defined by the applicable statutes. While the testimony in the recoTd shows that any delays which occurred prior to liquidation were not a result of the importer’s action, this is far from a showing that there were unreasonable delays on the part of the collector, as appellant would have us believe. It is our opinion that the facts of the present case show that liquidation occurred in the due course of events after entry, and therefore not at an unreasonable time after entry. Furthermore, the reasonableness of the time of liquidation is not a-factor to be considered in this class of cases since, according to the interpretation given previous tariff statutes, there is no time limit within which the collector shall make his original liquidation, Vitelli & Son v. United States, supra; United States v. DeRivera, supra [73 F. 679]. This, as far as we know, is still the law under the Tariff Act of 1930.

In view of the foregoing, plaintiff’s motion for summary judgment is denied' and defendant’s cross-motion for summary judgment is granted. The action is, therefore, dismissed.

Judgment will be entered accordingly.

      . Repealed by Pub.L. 96-39, 93 Stat. 144, 201.

      . 19 U.S.C. § 1500:
      § 1500. Appraisement, classification, and liquidation procedures.
      The appropriate customs officer shall, under rules and regulations prescribed by the Secretary-
      fa) appraise merchandise in the unit of quantity in which the merchandise is usually bought and sold by ascertaining or estimating the value thereof by all reasonable ways and means in his power, any statement of cost or costs of production in any invoice, affidavit, declaration, or other document to the contrary notwithstanding;
      (b) ascertain the classification and rate of duty applicable to such merchandise;
      (c) fix the amount of duty to be paid on such merchandise and determine any increased or additional duties due or any excess of duties deposited;
      (d) liquidate the entry of such merchandise; and
      (e) give notice of such liquidation to the importer, his consignee, or agent in such form and manner as the Secretary shall prescribe in such regulations.

      . § 706. Scope of review
      To the extent necessary to decision and when presented, the reviewing court shall decide all relevant questions of law, interpret constitutional and statutory provisions, and determine the meaning or applicability of the terms of an agency action. The reviewing court shall—
      (2) hold unlawful and set aside agency action, findings, and conclusions found to be—
      (A) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law;

      . § 551. Definitions
      (4) "rule” means the whole or a part of an agency statement of general or particular applicability and future effect designed to implement, interpret, or prescribe law or policy or describing the organization, procedure, or practice requirements of an agency and includes the approval or prescription for the future of rates, wages, corporate or financial structures or reorganizations thereof, prices, facilities, appliances, services or allowances therefor or of valuations, costs, or accounting, or practices bearing on any of the foregoing; (5) "rule making" means agency process for formulating, amending, or repealing a rule.


author: JOHN GARRETT PENN, District Judge.

text:
    SECURITIES AND EXCHANGE COMMISSION v. DIVERSIFIED GROWTH CORP., et al.
    No. CA 81-84.
    United States District Court, District of Columbia.
    April 9, 1984.
    On Motion For Order of Contempt Aug. 29, 1984.
    As Amended Oct. 1, 1984.

      Neil Lang, Lewis J. Mendelson, Washington, D.C., for plaintiff.
    O. Jackson Cook, Atlanta, Ga., Theodore A. Howard, Washington, D.C., for Diversified Growth Corp.

      William T. Hangley, Philadelphia, Pa., Leonard C. Greenebaum, Washington, D.C., for Eastern Empire Corp.
    Thomas R. Todd, Jr., Atlanta, Ga., for Fitzgerald.
   MEMORANDUM

JOHN GARRETT PENN, District Judge.

Before the Court are three motions: (1) Motion of the Securities and Exchange Commission for a Judgment Against Thomas C. Fitzgerald, Jr. Assessing Fines Previously Imposed for Failure to comply with this Court’s Judgment of Permanent Injunction (“SEC motion”); (2) Motion of Defendant Eastern Empire Corporation for Order of Civil Contempt and Sanctions against Thomas C. Fitzgerald, Jr., Diversified Growth Corporation, and American Diversified Corporation (“Eastern motion”); and (3) Motion of Thomas C. Fitzgerald, Jr. for Relief from Findings, Orders, and Judgment of this Court (“Fitzgerald motion”). Upon consideration of the entire record, the Court grants the SEC’s and Eastern’s motions and denies Fitzgerald’s motion. Background

In January 1981, the Securities and Exchange Commission (“SEC”) commenced this action against Diversified Growth Corporation (“DGC”), American Diversified Corporation (“ADC”), and Eastern Empire Corporation (“EEC”) alleging, among other things, violations of the reporting requirements of Section 13(a) of the Securities Exchange Act of 1934 (“Exchange Act”), 15 U.S.C. § 78m(a), and Rules 13a-1 and 13a-13 thereunder, 17 CFR §§ 240.13a-1 and 240.13a-13. The Complaint specifically alleged that DGC, ADC, and EEC had failed to file their annual reports (10-Ks) for the fiscal years 1976 through 1979 (ADC and EEC) and 1977 through 1980 (DGC), and quarterly reports (10-Qs) for the fiscal quarters ended June 30, 1977 through September 30, 1980 (DGC) and March 31, 1978 through September 30, 1980 (ADC and EEC).

On June 8, 1983, after hearing and argument, this Court entered a Permanent Injunction (“Injunction”) against DGC, ADC, and EEC. The Injunction ordered, inter alia, DGC and ADC to file their delinquent 10-K and 10-Q reports on or before June 10, 1983, to file in timely fashion all required reports in the future, and to provide EEC with iall information and documents necessary to enable EEC to prepare its annual and quarterly reports.

Neither DGC nor ADC complied with the Court’s Injunction. On June 18, 1983, after negotiations with the SEC’s staff, DGC, ADC, and Fitzgerald consented to findings of civil contempt and entry of an order requiring the reports to be filed on or before July 15, 1983. In addition, Thomas C. Fitzgerald, Jr., the Chief Executive Officer and Chairman of the boards of DGC and ADC, consented to entry of an order imposing coercive fines of $1,000 per day on him personally should DGC and ADC fail to file the delinquent reports by the July 15 deadline. This order was entered on June 20, 1983 (“June 20 Order”).

On July 15, 1983, DGC filed documents which purported to be 10-Ks for the fiscal years ended March 31, 1977 through 1983, and ADC filed documents which purported to be 10-Ks for the fiscal years ended December 31,1976 through 1982,10-Qs for the quarters ended March 31, June 30, and September 30, 1976 through 1982, and 10-Qs for the quarters ended March 31, and June 30, 1982. DGC did not file any 10-Qs until July 18, 1983.

On July 18, 1983, counsel for the SEC telephoned counsel for DGC, ADC, and Fitzgerald to advise them that the documents submitted were deficient. On July 19, 1983, counsel for the SEC wrote a follow-up letter advising the defendants that although a thorough review had not yet been completed, a preliminary examination showed that the 10-Ks were deficient for their failure to include audited financial statements, and that further deficiencies might surface. The letter also advised the defendants that it was the position of the SEC that neither the June 20 Order nor the Injunction had been complied with and that the $1,000 per day fines were running. The SEC received no response.

On September 9, 1983, EEC filed its own motion to hold DGC, ADC, and Fitzgerald in contempt and to impose sanctions for their failure to provide EEC the corporate records specified in the Injunction.

On September 19, 1983, the SEC, taking the position that the July 15 filings did not comply with the Court’s orders, moved to enforce the June 20 Order. The motion sought, inter alia, an order reducing the fines to judgment and an order permitting the SEC to execute against Mr. Fitzgerald’s assets and/or property.

On November 1, 1983, the parties appeared before the Court to announce a tentative settlement. The parties, with Mr. Fitzgerald present, represented to the Court that a settlement had been reached, and that the only unresolved matter was agreement on the name (but not the concept) of a special agent to examine the defendants’ books and prepare the delinquent reports. It is the unrebutted assertion of the SEC that on November 16,1983, defendants advised the SEC that one of the suggested candidates was acceptable. However, on November 17, 1983, Mr. Fitzgerald refused to sign the settlement. See Plaintiff’s Motion for Oral Argument at 3, and transcript of the December 5, 1983 hearing (“Transcript”) at 55-56.

Oral argument on the SEC’s and Eastern’s motions was set down for December 5, 1983. Approximately eight minutes before the hearing, counsel for Fitzgerald filed an affidavit in opposition to Eastern’s September 9 motion for contempt. This was the first time Fitzgerald had responded to Eastern’s motion. In addition, Fitzgerald submitted a motion for relief from findings, orders, and judgment of the Court, arguing lack of personal jurisdiction, and amendments to the July 15 filings. The Court heard oral argument on all three motions and took under advisement the SEC’s and Fitzgerald’s motions. With regard to Eastern’s motion, the Court ruled from the bench that since the motion had not been responded to in timely fashion, the motion would be deemed conceded pursuant to the Local Rules. Transcript at 57.

The Motions

A. Eastern’s Motion

Local Rule 1 — 9(d) provides that if an opposing statement to a motion is not filed within the prescribed time — thirteen days if the motion was mailed — the court may treat the motion as conceded. In this case, the opposition was filed nearly three months late. No excuse for this delay has been offered. Accordingly, the Court holds by its earlier ruling and deems the motion conceded.

In his opposition to Eastern’s motion, Fitzgerald asserts that all of EEC’s documents have been turned over to EEC and therefore that there has been compliance with the Injunction. The Court is unpersuaded. Counsel for EEC has pointed out to the Court that Fitzgerald has made this same assertion several times in the past in response to document requests and subsequently found the requested documents to exist. More significantly, counsel for EEC has argued that certain financial statements contained in a settlement disclosure in a prior action involving the defendants could not have been made without EEC documents which EEC has not received. Transcript at 52-54. This argument has not been rebutted by defendants.

For the foregoing reasons Eastern’s motion is granted. DGC, ADC, and Fitzgerald are hereby found in contempt for failing to furnish records to EEC as required by this Court’s Injunction. Compensatory and coercive sanctions have been imposed according to terms set forth in the Order accompanying this Memorandum.

B. Fitzgerald’s Motion

Fitzgerald has made a motion for relief from this Court’s June 20 Order, November 2, 1983 Order, and Judgment of Permanent Injunction. The motion is accompanied by a document entitled “Withdrawal of Admission to the Jurisdiction of this Court and Withdrawal of Consent to Findings and Order of June 20,1983”. The basis for the motion is that the Court lacks personal jurisdiction over Mr. Fitzgerald. Fitzgerald argues that he is not a party to the lawsuit and was not served with a copy of the complaint, summons, or injunction.

Simply put, Fitzgerald’s motion is frivolous and factually incorrect. The SEC has provided the Court with copies of the U.S. Marshals Process Receipt and Return which show that Mr. Fitzgerald was personally served with a copy of the summons and complaint on January 27, 1981. Fitzgerald’s own consent, dated June 18, 1983, acknowledges receipt of the Injunction.

Fitzgerald’s argument that the Court lacks personal jurisdiction over him, and his attempt to withdraw his consent to the jurisdiction of this Court and to the entry of prior orders are both unavailing. Fed.R. Civ.P. 65(d) provides that “[e]very order granting an injunction ... is binding only upon the parties to the action, their officers, agents, servants, employees, and attorneys, and upon those persons in active concert or participation with them who receive actual notice of the order by personal service or otherwise’’ (emphasis added). See also Wilson v. United States, 221 U.S. 361, 376, 31 S.Ct. 538, 542, 55 L.Ed. 771 (1911); SEC v. VTR, Inc., 410 F.Supp. 1309, 1314 (D.D.C.1975); U.S. v. Greyhound Corp., 363 F.Supp. 525, 571 (N.D.Ill.), aff'd, 508 F.2d 529 (7th Cir.1974). Fitzgerald was an officer of the defendant corporations — Chief Executive Officer and Chairman of the board — and received notice of the Injunction.

Moreover, Fitzgerald expressly consented to the personal jurisdiction of the Court over him. The “Consent of Thomas C. Fitzgerald, Jr. to Findings of Civil contempt and Order Imposing Fines” (signed by Fitzgerald) states at paragraph 3: “Fitzgerald admits to the jurisdiction of this Court over him and over the subject matter of this action”. The language of this consent is unequivocal.

Fitzgerald is himself a lawyer. He has been at all times pertinent to this motion represented by counsel. He voluntarily, knowingly, and expressly consented to the jurisdiction of this Court over him, to the finding of contempt, and to the imposition of fines. Transcript at 57. Mr. Fitzgerald’s motion is merely the latest in a long line of frivolous attempts to delay and avoid the inevitable: contempt, sanctions, and inquiry into the affairs of the corporations he managed. The motion is denied.

C. SEC’s Motion

The SEC has filed a Motion for a Judgment Against Thomas C. Fitzgerald, Jr. Assessing Fines Previously Imposed for Failure to Comply with this Court’s Judgment of Permanent Injunction. The SEC alleges that although DGC and ADC did submit some filings purporting to be 10-Ks and 10-Qs on July 15, 1983, the filings were so materially deficient that they did not comply with the SEC’s Rules and Regulations or the Court’s June 20 Order. The SEC requests, inter alia, that the coercive fines specified in the June 20 Order be assessed against Mr. Fitzgerald and that a money judgment in the amount of the fines be entered for execution against Fitzgerald’s property and/or assets. In addition, the SEC has requested that a special agent be appointed to prepare and complete accurate filings for DGC and ADC.

Mr. Fitzgerald expressly consented to the June 20 Order finding him and the parties in civil contempt and imposing fines on him personally should DGC and ADC fail to make the requisite filings by July 15, 1983. Consequently, there is no issue as to whether Fitzgerald is in contempt. The only issues are: (1) whether the July 15 filings complied with the June 20 Order and (2) if not, whether the December 5, 1983 amendments rectified the problem. After careful review of the SEG’s pleadings, their lengthy and well-documented declarations of the specific deficiencies, the opposing papers, the Court’s own review of the filings, and the entire record herein, the Court concludes that neither the July 15 nor the December 5 filings complied with the June 20 Order.

(i) The July 15 Filings

The SEC does not allege a few, superficial deficiencies. Rather it cites a host of omissions, mistakes, and inconsistencies which are so fundamental that the filings are rendered virtually useless as reporting and disclosure documents.

Foremost in the deficiencies cited is the lack of adequate financial statements. First, DGC’s and ADC’s 10-Ks fail to contain audited financial statements as required by Regulation S-X, 17 CFR § 210.1-01 et seq. Indeed the 10-Ks contain no financial statements as such. Certain financial statements are included in the 10-Qs. However, there is no cross-reference in the 10-Ks to direct the reader to the 10-Qs and, more critically, the financials in the 10-Qs are not audited as is required for 10-Ks. 17 CFR § 210.3-01 et seq.

The failure to provide audited financial statements is not a mere technical matter. As the court stated in SEC v. Beisinger Industries Corp., 421 F.Supp. 691, 694-95 (D.Mass.1976), aff'd, 552 F.2d 15 (1st Cir. 1977) (citations omitted):

it is also clear that the registrant’s annual reports were inadequate to meet the periodic reporting requirements because of their failure to provide fully audited financial statements. These were not mere technical deficiencies but rather were serious violations of the periodic reporting requirements. The failures to provide timely reports and adequate financial information are offensive to the central purpose of the periodic reporting system Congress established through the Exchange Act. For the system to work properly the information reported must be both current and adequate.

Defendants argue that they are relieved of the requirement of furnishing audited financials by 17 CFR § 210.3-11 which exempts “inactive entities”, and by 17 CFR § 240.12b-21 which creates an exemption where there would be “unreasonable effort or expense”. Both exemptions are inapplicable.

In order to claim the exemption as an “inactive entity”, expenditures for all purposes for a fiscal year must not have exceeded $100,000. § 210.3-ll(c). The financial information which was provided by ADC indicates that ADC had general and administrative expenses in excess of $100,000 in 1975, 1976, 1979, 1980, 1981 and 1982. In addition, to qualify as an inactive entity there must have been no material change in the business of the company, § 210.3-11(d). An affidavit submitted by Mr. Fitzgerald for other purposes states that “[a]s the regular accountant doing in-house work was experienced in life insurance accounting, but not in oil and gas, as the nature of DGC’s and ADC’s business changed, the independent CPA ... was more and more called upon to contribute to the accounting effort” . In addition, during the years in question EEC was divested by DGC and ADC, the insurance assets were sold or disposed of in large part, and the corporations moved into the oil and gas business.

It is true that Fitzgerald has submitted affidavits stating that there have been no material changes and that the companies are inactive. His declarations, however, are conclusory, unsupported by any proof whatsoever, and contrary to the evidence found in Fitzgerald’s own papers. Clearly neither DGC nor ADC meets the test of an inactive company for purposes of § 210.3-11.

Defendants’ second argument, that they are exempt from filing audited financials because of the “unreasonable effort or expense” involved, is similarly without merit. Subparagraph (b) to § 240.12b-21 states that this exemption may be claimed only if the registrant includes a statement showing what unreasonable effort or expense would be involved. This is an express precondition to claiming this exemption. No such statement was included in the filings. Even in their pleadings defendants have given no account of the expenses or effort that would be involved other than the most general and unspecific statements. Moreover, the SEC permits the filing of unaudited financials only in the most unusual circumstances. See SEC Release No. 34-9660, June 30, 1972. In conclusion, neither DGC nor ADC are exempt from filing audited financials.

The failure to provide audited financials is so material that even if this were the only problem it would render the filings inadequate for purposes of the June 20 Order. See SEC v. Beisinger Industries Corp., supra. But in fact the deficiencies do not end here. With regard to the 10-Ks, almost every item is incomplete and superficial. The business discussion, particularly the discussion of the oil and gas operations, is incomplete and does not comply with § 229.101. Item 3 of the 10-Ks (properties) contains only a one sentence discussion of the lease of the executive offices of the companies. There is no discussion in this section of the oil and gas properties despite the explicit instructions in § 229.102 that such be included, and in spite of the fact that such properties appear to constitute the principal assets of the companies. Item 5 (legal proceedings) omits any mention of this lawsuit which has been pending since 1981. While 17 CFR § 229.303 calls for a thorough discussion and analysis of the results of operations, liquidity, and capital resources in the Management Discussion and Analysis Section, ADC’s 10-Ks only provide one sentence expressing a decrease in general and administrative expenses. Even this one sentence fails to provide any meaningful explanation for the decrease. Finally, the documents were not even signed by all the proper officers and directors as required by General Instruction D to Form 10-K. This list of deficiencies is not exhaustive.

In addition to the aforementioned omissions and lack of information, the filings are replete with inconsistencies, typographical errors, and misinformation. To mention only a few: the 10-Ks state that certain financial statements and an accountant’s report are included when they are not (see Item 10 of the 10-Ks); the first sentence of DGC’s 1983 10-K Summary of Operations section states “[t]he preceding pages [plural] present a thirteen year consolidated summary of earnings (loss) to the Registrant”, when in fact the preceding page [singular] only goes back seven years; the financial statements in ADC’s 10-Ks have the brackets which represent losses in the wrong places so that the statements indicate a profit where there should be a loss and vice versa; the ADC 1982 10-K lists Fitzgerald as being 58 years old in Item 8 but 57 years old in Item 12; Item 6 of ADC’s 1982 10-K lists the number of shares of Class A Common Stock outstanding for 1974 as 3,540,625 while Item 6 of ADC’s 198110-K puts the number for 1974 at 3,540,625; the cover page to ADC’s 10-Ks states that the common stock has no par, yet Item 6 notes a par value of 10 cents and 1 cent; the business discussion in DGC’s 1983 10-K is identical to the discussion in DGC’s 1982 10-K and to the oil and gas discussion in ADC’s 1981 10-K; and finally, the general and administrative expenses are reported as being $36,000 for 1977 through 1983, i.e. no change whatsoever.

The inconsistencies and misinformation not only render the reports useless for reporting and disclosure purposes, but also reveal an almost willful lack of attention and diligence in the preparation of the filings. Indeed it is hard to imagine that the filings are the product of two years of concentrated work as Fitzgerald has contended. Moreover, these errors, which have been discovered only where an inconsistent piece of information happened to be noticed, make the Court — and the investor — question the accuracy of the entire report.

As with the 10-Ks, the purported 10-Qs are materially deficient. First, the financial statements do not contain quarterly comparisons as is required by 17 CFR § 210.10-01. In addition, the financial statements contain footnote references which do not exist. For example, note 3 to ADC’s financials refers to a note 9 which does not exist. No financials for Jackson Life were contained in the July 15 filings.

The SEC’s allegations are amply supported by detailed Declarations. The Court’s own review of the July 15 filings confirms that they are wholly inadequate. Moreover, except for the allegations of unaudited financials, defendants have not specifically responded to any of the detailed allegations. Rather, defendants have made blanket statements that: (1) the filings were adequate for a first time filing ; (2) the accepted practice with periodic filings is for the registrant to submit, the SEC to comment, and the registrant to respond; and (3) the Court’s Injunction did not specify certified financials or letter perfect filings. These arguments are without merit. First, the filings were not adequate for a first time filing; second, it is not and should not be the accepted practice for the SEC to accept “bed-bug” material and make corrections — especially when a company has been delinquent in its reporting obligations for seven years and is under both an injunction and a contempt order. Finally, the Court’s Injunction Order meant filings which would substantially comply with the SEC’s Rules and Regulations. Any other interpretation would ignore the purposes of the Injunction and the reporting and disclosure purposes of periodic filings.

(ii) The December 5 Filings

The only issue remaining is whether the December 5 amendments corrected the deficiencies in the July 15 filings. After careful consideration of the detailed declarations of the SEC the statements of SEC counsel in Court, and the Court’s own review of the documents, the Court holds that the December 5, 1983 filings are materially deficient and do not come close to correcting the deficiencies in the July 15 filings. Many of the deficiencies which were noted in the SEC’s September 19 motion remain uncorrected and unaddressed. Mr. Fitzgerald’s statement that the corrective filings address themselves to the specific comments made in the SEC affidavits is patently incorrect. In addition there has been no response to the SEC’s Declarations which list the deficiencies in the December 5 filings. Because the allegations of the deficiencies have not been responded to, they should be deemed conceded under Local rule 1—9(d).

(iii) Relief

Having concluded that the July 15, 1983 filings did not comply with the June 20 Order, the Court assesses fines of $1,000 per day from July 16, 1983 through December 5, 1983. This amounts to 143 days and $143,000. Judgment in this amount for execution against Mr. Fitzgerald’s assets and/or property is granted.

Having concluded that the December 5 filings did not comply with the June 20 Order or correct the July 15 filings, the fines should still be running. The Court, however, will not penalize Mr. Fitzgerald for the time taken by the Court to resolve the matter. Accordingly, the Court will not, at this time, assess fines after December 5, 1983. The Court notes, however, that DGC, ADC, and Fitzgerald are still in contempt and not in compliance with the Injunction or the June 20 Order.

In addition to the assessment of coercive fines, the Court grants the SEC’s request for the appointment of a special agent to review the books of DGC, ADC, and Fitzgerald, to prepare and file the delinquent reports, and to take any other action in furtherance of these tasks. The appointment of a special agent is necessitated at this point not only by the failure of defendants to comply with the June 20 Order, not only by their failure to file for the last seven years, but also by defendants’ continued inability to file timely reports. Even as Fitzgerald has been arguing that DGC and ADC have complied, DGC and ADC continue to file out of time. The June 30, 1983 10-Qs, which were due August 15, 1983, and the September 30, 1983 10-Qs due November 15, 1983, were not filed until December 5, 1983. As of February 17, 1984 DGC had not filed its December 31, 1983 10-Q. Clearly the appointment of a special agent is in order. See SEC v. Beisinger Industries Corp., supra.

The special agent and any other personnel employed by him or her will be compensated out of the fines assessed. In addition, Mr. Fitzgerald will be required to compensate the SEC, the special agent, and any other personnel, for fees and expenses which exceed the amount of the fines assessed. Mr. Fitzgerald is required to cooperate fully with the SEC and the special agent. Any further contumacy will result in the further assessment of coercive civil fines of $1,000 per day until compliance. Fitzgerald is further admonished to heed the provisions of the Permanent Injunction requiring him to cause ADC and DGC to file timely and adequate periodic reports in the future.

Finally, Fitzgerald will be required to compensate the SEC for their costs and counsel fees incurred as a result of the contempt.

. An Order consistent with this Memorandum has been entered.

ON MOTION FOR ORDER OF CONTEMPT

This matter comes before the Court on a motion of the Securities and Exchange Commission (SEC) to hold Thomas C. Fitzgerald, Jr. (Fitzgerald) in civil contempt for his refusal to obey an April 9 Order of this Court. On June 18, 1983, Fitzgerald consented in writing to a finding of civil contempt and the entry of an order which provided for the imposition of coercive fines of $1,000 per day should he fail to comply with a previously entered injunction. On April 9, 1984, this Court entered a Memorandum and Order (April 9 Order) finding that Fitzgerald had not complied with the prior injunction and orders. Pursuant to the June 18 consent, the Court assessed accrued fines of $143,000. The April 9 Order required Fitzgerald to pay these fines into the registry of the Court. Fitzgerald has refused to pay the fines or otherwise obey the April 9 Order. In order to coerce Fitzgerald to comply with the April 9 Order and pay the $143,000, the SEC requests the Court to hold Fitzgerald in civil contempt and order him committed until he complies.

After careful consideration of the motion, the opposition thereto, and the arguments of counsel for both sides at a hearing to show cause, the Court concludes that Fitzgerald has not obeyed the April 9 Order, has expressly refused to plead inability to comply, and has raised no legally sufficient excuse for his noncompliance. The Court also concludes, after review of the relevant statutory and common law, that it has the power to grant the relief requested. Accordingly, Fitzgerald is hereby held in civil contempt for refusing to obey the April 9 Order and is ordered committed until he purges himself of the contempt by paying the $143,000 into the registry of the Court.

Background

A review of the history of this action reveals a steady pattern of delay, avoidance, and refusal to comply. In January, 1981, the SEC commenced this action against three corporations run by Fitzgerald for their failure to file annual (10-K) and quarterly (10-Q) reports . In some cases the failure to file went as far back as 1976. On June 8, 1983, this Court entered a Permanent Injunction (Injunction) against the corporations. The Injunction ordered two of the corporations, inter alia, to file their delinquent reports by June 10, 1983. The corporations failed to comply. On June 18, 1983, after negotiating with the SEC’s staff, the two corporations in question and Fitzgerald himself consented to findings of civil contempt and the entry of an order which provided that: (a) the delinquent reports would be filed by July 15, 1983; and (b) in the event the reports were not filed by that date, coercive fines of $1,000 per day would be assessed against Fitzgerald personally until the reports were filed. Fitzgerald’s consent was unambiguous and in writing.

On July 15, 1983, the corporations filed some documents purporting to comply with the Court’s orders. Additional documents were filed on July 18, 1983, and again on December 5, 1983. The documents were shams. See April 9 Memorandum. Accordingly, on April 9, 1984, this Court ordered, inter alia, that Fitzgerald pay $143,000 in accrued fines into the registry of the Court and further ordered that a special agent be appointed to examine the books of the corporations and prepare their periodic reports. The Order intended that the fines would be used to fund the special agent.

Fitzgerald took an appeal from the April 9 Order but did not request a stay. Nonetheless, Fitzgerald has refused to pay the $143,000 as ordered. The SEC attempted to depose Fitzgerald for the purpose of executing against his assets. Fitzgerald, however, refused to answer all questions relating to his assets on Fifth Amendment grounds,. Only at this point did the SEC make the instant motion to hold Fitzgerald in contempt and have him committed until he pays the $143,000.

On June 22, 1984, the Court issued an order directing Fitzgerald to show cause why he should not be held in civil contempt and imprisoned for his failure to obey the April 9 Order. Fitzgerald first moved for reconsideration of the issuance of the show cause order, which motion the Court rejected. On July 18, 1984, this Court held a full hearing.

Fitzgerald’s Opposition

Fitzgerald opposes the motion to find him in contempt and imprison him until he complies with the April 9 Order on three grounds:

1. The appeal of the April 9 Order divested this Court of jurisdiction.
2. The remedy sought by the SEC would violate Fitzgerald’s Fifth Amendment Due Process rights.
3. Civil Contempt and imprisonment may not be used to enforce payment of a money judgment; such action .would amount to imprisonment for debt.

The Court will address each of these points in turn.

1. The District Court’s Jurisdiction Pending Appeal

Fitzgerald argues that the appeal of the April 9 Order divested the Court of jurisdiction to take any further action regarding matters on appeal except to aid the appeal or correct clerical errors. The Court has already rejected this argument. See July 17, 1984 Memorandum Order. Where no stay pending appeal has been granted the district court retains the power to enforce its judgment and to take steps in aid of execution. Avoyelles Sportsmen’s League, Inc. v. Marsh, 715 F.2d 897, 928 (5th Cir.1983); Farmhand, Inc. v. Anel Engineering Industries, 693 F.2d 1140, 1146 (5th Cir.1982); Deering Milliken, Inc. v. F.T.C., 647 F.2d 1124, 1129 (D.C.Cir. 1978); International Paper Co. v. Whitson, 595 F.2d 559, 562 (10th Cir.1979); 9 Moore’s Federal Practice ¶¶ 203.11 & 208.03 (2d ed. 1983). A primary means of enforcing its unstayed judgment is contempt. Farmhand, Inc. v. Anel Engineering Industries, 693 F.2d at 1146; Brown v. Braddick, 595 F.2d 961, 965 (5th Cir.1979); Gullet v. Gullet, 174 F.2d 531, 533 (D.C. Cir.1949). The eases cited by Fitzgerald are wholly inapposite as they involved action by the district court which was not for the purpose of enforcing an unstayed judgment, aiding execution, aiding the appeal, or correcting clerical errors.

2. Fitzgerald’s Fifth Amendment-Due Process Rights

Fitzgerald next argues that the remedy sought here would “deprive [him] of his liberty and property without due process of law” in contravention of the Fifth Amendment. Fitzgerald’s argument is as follows: (1) the original complaint in this case did not name Fitzgerald as a party but only named the corporations as party defendants; (2) although Fitzgerald was personally served with a copy of the complaint and summons (which sought an injunction against the officers of the corporations as well as against the corporations), Fitzgerald was never served with a complaint in which he was named a party defendant; (3) a court may not render a judgment of any sort against a person not named and served as a formal party; (4) as such, the prior judgments of this court against Fitzgerald are void; (5) contempt cannot be predicated on a void judgment; (6) therefore, any contempt involving fines or imprisonment would cause a deprivation of liberty and property without due process.

This is essentially a rehash, with a Fifth Amendment twist, of an earlier argument Fitzgerald made in his opposition to the motion to assess fines. See Motion of Thomas C. Fitzgerald, Jr. for Relief from Findings, Orders and Judgments of this Court filed December 5, 1983. In the April 9 Memorandum, the Court dismissed this argument as frivolous. See April 9 Memorandum at 6-8. The argument has not acquired any new merit in the intervening four months. Indeed, this Circuit has recently rejected an identical argument under probably even less persuasive facts. See Securities & Exchange Commission v. Ormont Drug & Chemical Company, Inc., 739 F.2d 654, 656 n. 4 (D.C.Cir.1984).

In the case at bar, the complaint sought an injunction against the officers of the corporations. See complaint at 11. Fitzgerald was personally served with a copy of the summons and complaint. His own consent dated June 18, 1983, acknowledges receipt of the Injunction which was directed at him as well as the corporations. He has actively participated through counsel in every facet of this case since 1981. He has never denied, nor could he, adequate notice and actual knowledge of every motion and proceeding in this action. He personally consented to the contempt order and expressly consented to the personal jurisdiction of this Court over him. See April 9 Memorandum at 6-8. In conclusion, Fitzgerald was for all intents and purposes a party to this action. Service was more than adequate for notice and jurisdiction.

3. Power of this Court to Order Confinement to Compel Obedience to the April 9 Order.

Fitzgerald’s final argument is that the Court may not order his committed for contempt of the April 9 Order which ordered him to pay $143,000 into the registry of the Court. Fitzgerald argues that such a measure would amount to imprisonment for debt in violation of 28 U.S.C. § 2007(a), D.C.Code § 15-320(c), and the common law. The Court rejects Fitzgerald’s argument and holds that civil contempt fines are not “debts” for purposes of 28 U.S.C. § 2007(a), and that confinement until such fines are paid is not “imprisonment for debt”. D.C.Code § 15-320(c) is therefore not applicable. The three common law cases cited by Fitzgerald are not controlling, not persuasive, and not on point.

The starting point for such an argument is 28 U.S.C. § 2007(a). The statute provides that:

A person shall not be imprisoned for debt on a writ of execution or other process issued from a court of the United States in any State wherein imprisonment for debt has been abolished. All modifications, conditions, and restrictions upon such imprisonment provided by State law shall apply to any writ of execution or process issued from a court of the United States in accordance with the procedure applicable in such State.

In other words, federal courts are instructed to follow state law to determine when and to what extent imprisonment for debt is permitted. However, whether an obligation to pay constitutes a “debt”, and whether confinement to compel payment amounts to “imprisonment for debt” is a matter of federal law. Only if the obligations are “debts” and the confinement “imprisonment for debt” within the meaning of 28 U.S.C. § 2007(a) do we turn to state law.

The overwhelming weight of authority holds that civil contempt fines are not debts, and that confinement to coerce payment of previously assessed contempt fines is not imprisonment for debt. These courts sanction the practice as being within a court’s civil contempt power to coerce obedience to a lawful order. See Oriel v. Russell, 278 U.S. 358, 366, 49 S.Ct. 173, 175, 73 L.Ed. 419 (1928). SEC v. Moss, 644 F.2d 313, 316 (4th Cir.1981); Usery v. Fisher, 565 F.2d 137, 139-40 (10th Cir.1977); Atlas Corporation v. DeVilliers, 447 F.2d 799, 803 (10th Cir.1971); Parker v. United States, 153 F.2d 66, 70-71 (1st Cir.1936); Parker v. United States, 126 F.2d 370, 380 (1st Cir.1942); Raymor Ballroom Co. v. Buck, 110 F.2d 207, 210-12 (1st Cir.1940); Cutting v. Van Fleet, 252 F. 100, 101-02 (9th Cir.1918); In re Mann, 126 F.Supp. 709, 710 (D.Mass.1954); 17 Am.Jur.2d, Contempt, § 112, p. 98; 16A Am.Jur.2d, Constitutional Law, §§ 619-620, pp. 569-71; 31 ALR 3d 926, 930; Note, Imprisonment for Nonpayment of Fines and Costs: A New Look at the Laws and the Constitution, 22 Vand.L.Rev. 611, 620, 640-41 (1969). As the Supreme Court stated in Oriel v. Russell, 278 U.S. at 366, 49 S.Ct. at 175:

Actual or virtual imprisonment for debt has ceased, but imprisonment to compel obedience to a lawful judicial order (if it appear that obedience is being willfully refused) has not yet ceased and ought not to cease, unless it should be thought expedient to destroy all respect for the courts by stripping them of power to enforce their lawful decrees.

The civil contempt fines in this case are not debts or money judgments in the usual sense of the. words. A contempt order committing Fitzgerald for the purpose of compelling compliance to the April 9 Order would be primarily just that — an order to compel compliance with a lawful order of the court — and only secondarily an order to compel payment of a money judgment. This is within the Court’s contempt power. To conclude that a court may not order commitment to enforce its lawful orders would be to render a court powerless to vindicate its authority in many situations.

Nor is execution a viable or appropriate alternative in this case. First, as a general principle, it flies in the face of fairness and justice to require the party injured by the contempt and disobedience to spend years and countless dollars trying to execute on the contemnor’s assets. Such a result seems particularly wrong where, as here, the contemnor has stonewalled execution by refusing to answer questions at deposition and by possibly transferring assets out of his name. The Court rejects Fitzgerald’s last argument.

Conclusion

Fitzgerald has raised no legally sufficient defense to the relief requested here. It is undisputed that he has refused to pay the $143,000. The Order requiring him to pay remains unstayed. The Court went to great lengths to question Fitzgerald’s counsel as to Fitzgerald’s ability to comply with' the April 9 Order since Fitzgerald did not raise this as a defense. The Court was told that Fitzgerald was aware that he could make such an assertion and had decided not to do so. See transcript at 13-16. Accordingly, the Court must conclude that Fitzgerald is able to comply but refuses to do so.

Imprisonment should be a sanction of last resort. We have reached that point in this case. For the foregoing reasons Thomas C. Fitzgerald, Jr. is hereby found in civil contempt of this Court’s April 9, 1984 Order. Fitzgerald is ordered to pay the sum of $143,000 into the registry of this Court by 4:00 p.m. September 21,1984. Should Fitzgerald fail to comply with this order by that date, Fitzgerald is ordered to report to the United States Courthouse for the District of Columbia, Courtroom 17, at 10:00 a.m. on September 25, 1984 for commitment until he purges himself of the contempt by complying with the April 9 Order.

Fitzgerald is further ordered to compensate the SEC for their costs and fees incurred as a result of this contempt. The SEC shall submit an accounting to the Court for the Court’s approval.

So Ordered.

      . DGC, ADC and EEC were formerly under common control with Mr. Fitzgerald acting as Chief Executive Officer of all of the entities. Then, some time in 1981, as a result of a settlement of a shareholders derivative action, EEC became independent and under new management. EEC, although delinquent in its reports, has claimed that it is unable to file because DGC and ADC will not provide it with certain necessary documentation of financial transactions and accounts.

      . The delinquent reports which were ordered to be filed were: DGC’s 10-Ks for the fiscal years ended March 31, 1977 through 1982; DGC's 10-Qs for the fiscal quarters ended June 30, September 30, and December 31, 1977 through 1982; ADC’s 10-Ks for the fiscal years ended December 31, 1976 through 1983; and ADC’s 10-Qs for the fiscal quarters ended March 31, June 30, and September 30, 1976 through 1982, and for the quarter ended March 31, 1983.

      . The cover letter to these documents stated that ADC 10-Qs for the quarters ended September 30, 1982 and March 31, 1983 were also included. The SEC asserts, however, that it never received these reports.

      . Indeed Mr. Cook, counsel for the corporations and formerly counsel for Mr. Fitzgerald as well, was given an opportunity to respond to this statement of the events and declined to do so. Transcript at 56.

      . Accompanying the motion was a document purporting to withdraw Fitzgerald’s prior admission to the jurisdiction of the Court and his prior consent to the findings of contempt and Order of June 20, 1983. Supplemental affidavits in opposition to the SEC’s motion were also submitted.

      . Eastern’s motion was filed on September 9, 1983. Fitzgerald’s affidavit in opposition was not filed until December 5, 1983.

      . The Court is unable to determine which order Fitzgerald is referring to as no November 2 Order was entered.

      . In addition, Fitzgerald’s lengthy participation in this lawsuit, without once raising this objection, has conferred personal jurisdiction on the Court.

      . Counsel for Fitzgerald stated at the December 5 hearing that Fitzgerald was not represented by counsel when he signed the consent. The Court's records belie this assertion. See Transcript at 57.

      . In addition to the deficiencies in the reports filed, it is conceded that DGC failed to file any of its 10-Qs until July 18, 1983, three days late.

      . See Opposition to Plaintiff’s Motion for a Judgment Against Thomas C. Fitzgerald ("Opposition”), Exhibit C, ¶ (8).

      . See Transcript at 5.

      . The 1982 Balance Sheet shows that in that year oil and gas holdings comprised $2.5 million of $3.2 million total assets.

      . See Opposition at 4.

      . Id. at 5-6.

      . See Transcript at 28.

      . See Supplemental Memorandum in Support of Motion for a Judgment Against Thomas C. Fitzgerald, filed December 19, 1983.

      . See Transcript at 3, 6, 9, and 14.

      . See Supplemental Affidavit of Thomas C. Fitzgerald, Jr., filed December 5, 1983.

      . The Court does, however, have serious doubts as to the good faith of Mr. Fitzgerald's motion and the December 5 filings.

      . For a more detailed history of this action, see the April 9 Memorandum of this Court.

      . The appeal is pending as of the date of this Memorandum Order.

      . At the show cause hearing counsel for Fitzgerald indicated that the failure to seek a stay was intentional and not an oversight,

      . The Court has not been asked to rule on the validity of Fitzgerald’s invocation of the Fifth Amendment.

       As an interesting aside, on the day of the deposition, Fitzgerald caused the corporations to file for bankruptcy in the hopes of staying this action. See June 8, 1984 Order.

      . Fitzgerald contends that D.C.Code § 15-320(a) makes Section 320(c) applicable to the federal district courts. The Court thinks Fitzgerald’s counsel misreads the statute. The language of the statute only makes Section (a) applicable to the District Court.

      . See transcript of the July 18, 1984 hearing ("transcript”) at 32.

      . The burden of raising and proving an impossibility defense lies with Fitzgerald. See S.E.C. v. Ormont, 739 F.2d 654, 657 n. 7 (D.C.Cir.1984).

      . With regard to Fitzgerald’s financial ability to comply, the Court notes that while Fitzgerald has caused the corporations which he manages to file for bankruptcy, Fitzgerald has not similarly availed himself of the bankruptcy laws.