John Hancock Life Insurance Company v. Wu

Background

On September 19, 2023, the court entered default judgment for John Hancock Life Insurance Company (U.S.A.) and John Hancock Variable Life Insurance Company. The plaintiffs asserted that non-party Martin Neely, as successor trustee of The Martin A. Neely and Connie Wu 1998 Family Trust, had information about possible assets against which the plaintiffs could enforce that judgment.

The plaintiffs served Neely with a subpoena on November 8, 2024, seeking documents in seven categories. The subpoena required a response by November 25, 2024. According to the opinion, Neely did not respond, object, move to quash the subpoena, seek a protective order, or produce the requested documents.

The plaintiffs moved to compel responses. On January 22, 2025, Magistrate Judge Thomas S. Hixson granted that motion and ordered Neely to produce the documents within 30 days. Neely was served with that order on January 28, 2025, but did not comply.

Civil contempt ruling

The plaintiffs then moved for an order of contempt and requested attorney’s fees and costs. Neely did not oppose the motion. The court explained that civil contempt requires clear and convincing evidence that a person violated a specific and definite court order. The person accused of contempt may then show why compliance was impossible. A willful violation is not required, although a person should not be held in contempt when the person acted in good faith based on a reasonable interpretation of the order.

Because the parties had not consented to magistrate-judge authority over the contempt proceeding, Judge Hixson explained that his authority was limited. Under 28 U.S.C. § 636(e)(6), a magistrate judge may investigate the alleged contempt, certify the facts to a district judge, and order the person to appear before that district judge to show cause. The magistrate judge does not issue the final contempt adjudication in that process.

Judge Hixson found that Neely had not taken all reasonable steps within his power to comply with the January 22 order. He therefore granted the plaintiffs’ motion, certified the facts, and found that Neely had committed an act constituting civil contempt. The order requires Neely to appear before Judge Richard Seeborg on May 29, 2025, at 1:30 p.m. to show cause why he should not be adjudged in contempt.

Recommended sanction

The plaintiffs requested $3,404 in attorney’s fees. Judge Hixson found the attorney’s hourly rates and hours generally reasonable but concluded that some requested fees were unrelated to the contempt of the January 22 order. Fees for preparing the earlier motion to compel predated that order, and the estimated time for attending a future hearing was speculative.

Judge Hixson determined that three hours spent on a February declaration and the contempt motion were related to the alleged contempt. At the stated 2025 billing rate, those hours totaled $1,158. The order recommends that, if Judge Seeborg adjudges Neely in contempt, Neely be sanctioned in the amount of $1,158 in attorney’s fees, payable to the plaintiffs and their counsel. The opinion does not state that Judge Seeborg had made that final contempt determination as of the order’s date.

Disposition

The court granted the plaintiffs’ motion for an order of contempt, certified the facts, ordered Neely to appear before Judge Seeborg to show cause, and recommended a $1,158 attorney’s-fee sanction if Neely is adjudged in contempt. The order was signed by Thomas S. Hixson, United States Magistrate Judge.