## Facts

- A PRC corporation, Beijing Ever Bright Industrial Co. (Beijing), contracted to purchase lumber from Richmark Corp., and Richmark retained Timber Falling Consultants, Inc. (TFC) to procure timber.
- The transaction failed, leading Richmark to sue TFC; TFC counterclaimed and cross-claimed against Richmark and other parties, including Beijing, alleging fraud and breach of contract.
- Beijing was served but did not appear, and the district court entered default against Beijing.
- The district court later entered final judgment against Beijing for $2,194,419.59.
- To execute the judgment, TFC pursued post-judgment discovery seeking information about Beijing’s assets worldwide.
- Beijing refused to provide discovery, asserting that PRC state secrecy laws barred disclosure and could subject it to criminal liability in China.
- The district court compelled discovery and, after continued noncompliance, imposed sanctions, held Beijing in civil contempt, and ordered per diem contempt fines of $10,000.
- Beijing appealed the discovery order, sanctions, contempt order, and refusal to vacate contempt.

## Issues

1. Whether PRC state secrecy laws excused noncompliance with a federal court’s post-judgment discovery orders about worldwide assets.
2. Whether Beijing waived the secrecy-law objection by failing to timely raise it in response to discovery requests and motions to compel.
3. Whether the district court abused its discretion in imposing discovery sanctions and holding Beijing in civil contempt for noncompliance.
4. Whether the contempt fines could be made payable to the judgment creditor rather than to the court.

## Decision

- The Ninth Circuit held that PRC secrecy laws did not excuse Beijing’s failure to comply with the discovery orders.
- The court found Beijing waived its foreign-law objection by not timely asserting it in discovery responses or in opposition to the motion to compel, raising it only later in contempt proceedings.
- The court affirmed the district court’s order compelling discovery, the sanctions, and the civil contempt finding as within the district court’s discretion.
- The court modified the contempt order to require that contempt fines be payable to the court rather than to TFC.
- Disposition: affirmed as modified.

## Legal Principles

- Post-judgment discovery orders, discovery sanctions, and civil contempt findings are reviewed for abuse of discretion; determinations of foreign law are reviewed de novo.
- A party generally waives objections to interrogatories and document requests, including foreign-law objections, if not timely raised under the procedural rules governing discovery.
- Foreign secrecy or blocking statutes do not automatically bar U.S. discovery; courts may compel compliance after weighing comity considerations, including the U.S. interest in enforcement, the importance of the information, the clarity and severity of the foreign prohibition, and the resisting party’s good-faith efforts to obtain permission or a waiver.
- Coercive civil contempt fines aimed at compelling compliance are generally payable to the court, not directly to the opposing party.

## Conclusion

The Ninth Circuit enforced broad post-judgment discovery against a PRC government-linked entity, holding that untimely reliance on PRC secrecy laws was waived and, even on the merits, did not justify defiance of court orders; it upheld sanctions and contempt while requiring coercive contempt fines to be paid to the court.


Richmark Corp. v. Timber Falling Consultants, 959 F.2d 1468 (9th Cir. 1992)