Benthos Master Fund, Ltd. v. Etra

Background

The court stated that, on December 14, 2022, it held Aaron Etra in contempt of court, jailed him as a coercive sanction, and ordered him to provide his laptop computer and cellphones to Benthos Master Fund, Ltd. for a forensic examination. The examination was intended to locate materials that Benthos had subpoenaed but Etra had not produced. The court had also ordered Benthos to propose a procedure allowing Etra to claim attorney-client privilege before device contents were produced to Benthos.

On March 20, 2023, Etra moved for compassionate release because of an eye condition. At a March 28 status conference, he asserted the Fifth Amendment privilege against compelled self-incrimination as to producing funds and third-party records that he had been ordered to provide to comply with Benthos’s subpoenas and purge his contempt, as well as all records and information on his devices.

Fifth Amendment ruling

The court explained that the Fifth Amendment can protect a person from disclosures that the person reasonably believes could be used in a criminal prosecution or could lead to evidence used in such a prosecution. It also explained that a blanket assertion is insufficient; the person must make a particularized showing that the act of producing specific materials could be incriminating. Because Etra had not been ordered to create materials, the court understood his claim to concern the potentially incriminating act of producing existing documents or devices.

The court overruled Etra’s objection, based on the Fifth Amendment, to being required to pay an amount equal to the amount Benthos had proved Etra received and did not remit to Benthos in violation of Benthos’s restraining notice.

The court did not finally resolve Etra’s Fifth Amendment claim concerning further records held by third parties or the devices. It ordered Etra to file, by April 11, 2023, a brief identifying particular documents or information for which he maintained that production could be incriminating. Supporting factual assertions had to be made in a sworn declaration under penalty of perjury. The court permitted Etra to request a supplemental private submission for the judge to review if he could not make a particularized showing without incriminating himself.

The court also ordered Etra to show cause by April 11 why, if the court agreed that the Fifth Amendment protected production of documents held by third parties, he should not compensate Benthos for expenses incurred in issuing subpoenas to obtain records he refused to produce. Benthos’s response was due April 25, and any reply was due May 2.

Other rulings

The court denied Etra’s motion for compassionate release.

The court appointed Harvey Fishbein, Esq., to represent Etra only concerning Etra’s incarceration for civil contempt. The appointment authorized Fishbein to make appropriate motions based on a good-faith claim that Etra had cured his contempt or that the incarceration was no longer coercive. The appointment did not cover the underlying dispute with Benthos, Etra’s current Fifth Amendment claim, or assistance in gathering materials needed to purge the contempt.

The court also directed Benthos to email its filings to Marc Sklar, who had Etra’s power of attorney and was helping him comply with the court’s orders. Sklar was not permitted to communicate with the court on Etra’s behalf.