## Facts

- A house fire led the Bradleys to sue American Household, Inc. (Sunbeam’s successor) in products liability, alleging a defective Sunbeam electric blanket caused the fire.
- In discovery, the Bradleys sought access to broad categories of returned electric blankets and related claim materials in Sunbeam’s possession.
- The district court ordered Sunbeam to produce certain returned blanket remnants and associated files and later found Sunbeam had willfully failed to comply.
- Before production was completed, the parties settled the underlying case for a substantial sum and agreed the discovery production order would be vacated.
- After settlement, the Bradleys moved to reopen the case, alleging Sunbeam continued processing and discarding returned blankets and thereby destroyed relevant evidence.
- The district court reopened the matter and imposed sanctions on Sunbeam and its counsel, including fixed monetary fines payable to the court and an attorneys’ fee award payable to the Bradleys.

## Issues

1. Whether the district court’s fixed, unconditional fines payable to the court were criminal in nature, requiring criminal contempt procedures and safeguards.
2. Whether, to the extent sanctions were civil (coercive or compensatory), the Bradleys waived or relinquished entitlement to them by settling the underlying case and vacating the discovery order.

## Decision

- The Fourth Circuit vacated the sanctions order and remanded.
- The court held the fixed fines ($200,000 against Sunbeam and $100,000 against counsel), payable to the court and not conditioned on compliance, were criminal sanctions imposed without required constitutional and statutory protections.
- The court further held that any sanctions properly characterized as civil (including attorneys’ fees as compensation) were barred because the Bradleys surrendered those claims by entering a comprehensive settlement that resolved the dispute and vacated the discovery order.

## Legal Principles

- The character of a sanction controls its classification; labels used by the trial court do not determine whether a sanction is civil or criminal.
- Civil sanctions are coercive (designed to compel compliance and typically purgeable) or compensatory (measured by the opposing party’s loss).
- Criminal sanctions are punitive and unconditional; fixed fines payable to the court and not contingent on future compliance are presumptively criminal.
- Criminal contempt sanctions require specified procedural and constitutional safeguards, including appropriate notice and protections associated with criminal adjudication.
- A settlement that globally resolves the litigation and vacates the underlying discovery order can waive later claims to civil sanctions tied to that discovery dispute.

## Conclusion

The Fourth Circuit set aside the district court’s post-settlement sanctions because the fines functioned as criminal contempt without required procedures, and any remaining civil components were unavailable after the parties’ settlement and agreed vacatur of the discovery order.


Bradley v. Am. Household, Inc., 378 F.3d 373 (4th Cir. 2004)