An Introduction to Compensatory Contempt, the "Other" Contempt of Court
Contempt of court has been in the news recently, usually as a result of someone being punished for disrespecting the court. Examples here in Michigan include a restaurant owner fined $15,000 for violating a judge’s coronavirus-closure order. And a lawyer hit with a $3,000 fine for displaying the middle finger during a zoom hearing.
In addition to imposing punishment, contempt of court has two additional purposes: coercing compliance and compensating victims. The three purposes of contempt can be illustrated by the following hypothetical.
ABLE V. BAKER
Assume that Able and Baker both claim ownership of a unique 1954 Cadillac limousine. A court decides that Able owns the automobile and enjoins Baker from interfering with Able’s possession. By means of a spare key, Baker drives the automobile off and begins renting it out for wedding parties.
In response to these facts, the court could impose a fine against Baker (criminal contempt), or order Baker jailed until he reveals the whereabouts of the automobile (coercive contempt), or award Able damages for loss of or injury to the automobile (compensatory contempt).
(Contempt of court can also be classified as either direct or indirect depending on whether it occurred “in the immediate view and presence of the judge.” If it did—as with the contemptuous lawyer on zoom—the contempt can be punished summarily. Whereas the recalcitrant restaurant owner was entitled to notice and a hearing.)
Compensatory contempt is often useful to attorneys representing parties aggrieved by another’s failure to abide by a court order. Yet Remedies scholar Doug Rendleman has written that “few states possess a developed theory of compensatory contempt.” Here, in a nutshell, are the basics of compensatory contempt in Michigan.
COMPENSATORY CONTEMPT BASICS
Being equitable remedies, injunctions and compensatory contempt proceedings are within the jurisdiction of Circuit Courts, not District Courts.
Compensatory contempt proceedings are initiated by a motion, supported by affidavits. The affidavits should allege facts showing the contemptuous misconduct in detail, facts showing that the misconduct violated the rights of the complainant, and facts from which the court can determine what damages have been caused by the misconduct.
Again, compensatory contempt being equitable, there is no right to a jury trial. The judge who issued the order allegedly violated is the judge who tries the contempt proceeding. As with other actions tried without a jury, the judge is required to state findings of fact and conclusions of law, either on the record or in a written opinion.
The Court of Appeals entertains appeals of right from Circuit Court orders imposing sanctions for contempt of court.
To return to our hypothetical, Baker’s conduct caused Able to suffer loss of use of the automobile and may have caused some injury to it as well. Loss-of-use damages generally are measured by the rental value of the item or the cost to rent a substitute. Damages for repairable injury are measured by the cost of repair or diminution in value.
Recall that Baker used the automobile in a wedding-livery business. Perhaps Able could recover restitution of Baker’s profit in addition to or as an alternative to damages. The law of restitution generally requires one who benefits as a result of a wrong done to another to disgorge those benefits. This is in order to prevent the wrongdoer’s unjust enrichment.
Attorney fees incurred as a result the defendant’s contempt are also recoverable. This includes fees spent pursuing a finding of contempt and determining the amount of damages.
The sanctions available for contempt of court are both awesome and subject to misunderstanding. A Michigan survey found that the reversal rate in contempt cases is twice that of published opinions generally. It doesn’t help that only one of our law schools requires a course in Remedies. (Cooley grads know which school that is.)
This brief introduction should help when it comes to understanding the role of compensatory contempt in Michigan law. More details are provided by the Cooley Law Review article on which this post is based.
Otto Stockmeyer is a Distinguished Professor Emeritus at Cooley Law School. He taught Equity & Remedies at Cooley Law School and at two other law schools as a visiting professor, and also in our “Down-Under” program. He has shared his experience teaching the course in the Cooley Journal of Practical & Clinical Law.