Optional Capital, Inc. v. DAS Corp., No. 19-55128 (9th Cir. 2021)Annotate this Case
In 2004-2005, the government filed forfeiture actions against a Credit Suisse account, owned by a corporation organized by Kim’s sister . The government alleged the $15 million account included proceeds of fraudulent activities involving Kim’s control of Optional. The district court ordered the seizure of the Account. The putative owners (Kim Claimants) contested the forfeiture. Optional, no longer under Kim's control, and DAS, an alleged victim of Kim's fraud, filed competing claims.
In 2011, after years of parallel litigation, the Swiss Attorney General’s Office unfroze the Account and ordered the bank to wire $12.6 million to DAS, which filed a “Notice of Withdrawal of Claims” in the forfeiture proceeding. The court ordered that no party disturb money remaining in the Credit Suisse accounts and requested that the government investigate how the transfer to DAS was accomplished. The court declined to hold DAS in contempt, concluded that it “cannot compel DAS to surrender the funds,” then granted DAS’s opposed motion to be dismissed from the forfeiture proceedings.
Optional, the sole remaining claimant, submitted a 2013 proposed final judgment, which the district court adopted. Five years later, Optional sought to hold DAS in contempt for allegedly violating that judgment because DAS failed to surrender the money transferred in 2011; the 2013 judgment had awarded Optional all funds in the Account as of August 2005. The Ninth Circuit affirmed the denial of the contempt motion. The 2013 judgment did not require DAS to turn over $12.6 million to Optional. At the 2013 trial, the court did not have before it, and did not undertake to decide, the competing claims to the transferred money. In awarding Optional “all funds” the district court unmistakably was referring only to the remaining funds.
Court Description: Contempt. The panel affirmed the district court's post-judgment order denying Optional Capital, Inc.’s contempt motion on the ground that a May 2013 judgment did not require DAS Corporation to turn over $12.6 million to Optional. At the end of a complex civil forfeiture proceeding that was litigated for nearly nine years, Optional was left as the sole remaining claimant. After the competing claimants, including DAS, settled or were dismissed, Optional submitted a 2013 proposed final judgment, which the district court adopted, even though it could be construed as effectively reversing a 2011 ruling in which DAS had obtained a victory over Optional. Five years later, Optional filed this action seeking to hold DAS in contempt for allegedly violating the 2013 judgment simply because DAS failed to do what the district court’s 2011 order explicitly refused to order DAS to do. The district court discharged its order to show cause, concluding that Optional failed to meet * The Honorable Gregory A. Presnell, United States District Judge for the Middle District of Florida, sitting by designation. OPTIONAL CAPITAL V. DAS CORPORATION 3 its burden to show that DAS violated the 2013 final judgment. Optional contended that because the 2013 judgment awarded it all funds in a Credit Suisse Account “as of August 8, 2005” or “when the Government served its warrant on or about August 8, 2005,” the judgment could only be understood as extending to the entirety of the funds that were in the account on that earlier date, including the funds that had been transferred to DAS before the bench trial in the matter. The panel concluded that the district court’s use of the term “all funds” was ambiguous. Turning to the record before the district court at the time it issued the judgment, the panel concluded that Optional’s construction of the judgment was incorrect. The panel held that the district court at the 2013 trial did not have before it, and did not undertake to decide, the competing claims of DAS and Optional to the $12.6 million that DAS had received from the Credit Suisse account in 2011. In awarding Optional “all funds” from the account, the district court unmistakably was referring only to the funds that were at issue at that point in the trial, which did not include the $12.6 million that had previously been transferred to DAS. The panel further held that by construing the judgment as it did, the panel avoided saddling it with other potential defects. Because the 2013 judgment did not address Optional’s and DAS’s competing rights to the funds DAS had received from the Credit Suisse account in 2011, and did not award those funds to Optional, DAS did not violate the judgment by failing to turn over those funds to Optional. The district court properly concluded that DAS could not be held in contempt on this basis. 4 OPTIONAL CAPITAL V. DAS CORPORATION
The court issued a subsequent related opinion or order on February 3, 2022.