## Facts

- A federal grand jury in the Southern District of New York issued a subpoena duces tecum to Marc Rich & Co. A.G., a Swiss corporation, seeking documents relating to foreign and domestic oil transactions in 1980–1981.
- The company refused to produce the documents, citing barriers arising from Swiss law and Swiss governmental actions.
- The district court held the company in civil contempt and imposed a coercive fine of $50,000 per day until compliance.
- After earlier proceedings addressing the contempt order, the company entered an August 1983 agreement to comply, withdraw an appeal with prejudice, and not raise in any court any claim that Swiss law prevented production; the agreement was incorporated into a court order.
- Swiss authorities later issued directives not to comply and seized various subpoena-responsive documents on August 13, 1983, November 22, 1983, and February 9, 1984.
- The company moved to terminate continuing contempt fines, arguing that Swiss law and the seizures made compliance impossible; the district court denied relief.
- The company appealed from the denial of its motion to terminate the continuing contempt sanctions.

## Issues

1. Whether the company proved “plainly and unmistakably” that compliance with the grand jury subpoena was impossible, warranting relief from civil-contempt sanctions.
2. Whether the company’s August 1983 waiver and prior proceedings precluded reliance on Swiss law and Swiss governmental actions as an impossibility defense to continued contempt.
3. Whether events on or after the February 9, 1984 seizure created a new factual basis for an impossibility defense requiring further proceedings.

## Decision

- The Second Circuit affirmed the district court in substantial part, leaving the contempt finding and ongoing fines in place for the period before February 9, 1984.
- The court held the company did not demonstrate impossibility of compliance before the February 9, 1984 seizure, including by failing to provide adequate factual submissions (such as detailed affidavits) showing inability despite good-faith efforts.
- The court held the August 1983 agreement operated as a binding waiver of reliance on Swiss law as a defense and, together with claim-preclusion principles, barred renewed reliance on Swiss law and related Swiss actions for the earlier period.
- The court remanded for a limited evidentiary hearing on whether, after the February 9, 1984 seizure, the documents were no longer within the company’s possession or control such that compliance had become genuinely impossible, and whether sanctions should be modified accordingly.

## Legal Principles

- A contemnor asserting impossibility in civil contempt bears the burden to show “plainly and unmistakably” that compliance is impossible and must show good-faith use of all available resources; inability that is not adequately supported or is self-induced does not excuse contempt.
- A negotiated stipulation incorporated into a court order can constitute a broad waiver barring later assertion of a foreign-law prohibition as a defense to compliance.
- Res judicata and law-of-the-case principles limit repeated attempts to relitigate defenses to the same contempt order when the factual basis existed or could have been raised earlier.
- International comity concerns and foreign sovereign objections do not, without more, defeat enforcement of a federal grand jury subpoena where the contemnor has waived the foreign-law defense and has not proven actual impossibility.

## Conclusion

The court enforced coercive civil-contempt sanctions for continued noncompliance with a grand jury subpoena, holding that the company’s foreign-law-based impossibility defense was barred and unproven for the period before the final Swiss seizure, while requiring a focused factual hearing on whether post-seizure events rendered compliance genuinely impossible going forward.


In re Marc Rich & Co. A.G., 736 F.2d 864 (2d Cir. 1984)