Unreported / Non-Citable
Background
This shareholder-derivative case grew out of a dispute among the founders of Jet Genius Holdings, Inc., a private-jet charter brokerage. Plaintiff Aaron Stanz alleges that his co-founder Jordan Brown and a network of related entities have engaged in self-dealing and have refused to comply with discovery orders. Discovery battles have been a recurring feature of the litigation.
In June 2025, the magistrate judge granted Stanz’s motion to compel production of documents and awarded reasonable attorney’s fees against the defendants. After fee briefing, the court entered an order on August 14, 2025, awarding $11,400 and giving the defendants 30 days to pay. The defendants did not pay. Stanz then filed a motion to enforce the fee award, requesting that the court initiate civil contempt proceedings, impose a coercive per-diem fine to compel payment, and order an additional award of attorney’s fees for the work of preparing the contempt motion. The defendants did not file an opposition.
The Court’s Holding
The magistrate judge issued a Report and Recommendation that the district judge initiate civil contempt proceedings against the defendants and impose a coercive per-diem fine, but recommended that the additional fee request be denied.
Magistrate judges in the federal system generally do not have direct civil-contempt authority. Under 28 U.S.C. § 636(e), when a magistrate judge concludes that contempt may be warranted, she must “certify the facts” to the district judge, who then conducts a contempt hearing and decides whether to enter a contempt order. The certified facts here are simple: the court ordered payment of $11,400 within 30 days; the defendants did not pay; counsel attests they still have not paid; and the defendants did not respond to the motion. Those certified facts establish a prima facie case of civil contempt.
The court also recommended a coercive per-diem fine. Coercive contempt sanctions — daily fines that increase as long as noncompliance continues — are designed to pressure the contemnor into compliance, in contrast to compensatory sanctions that punish past harm. Such fines must be set at a level reasonable in relation to the contemnor’s ability to pay and the seriousness of the contempt. The magistrate left the precise amount and structure to the district judge.
The court declined to recommend awarding additional attorney’s fees for preparing the contempt motion itself. Although fee-shifting is a common compensatory remedy in contempt proceedings, the magistrate concluded that adding more fees on top of the unpaid prior fee award and a coercive per-diem fine was not warranted at this stage.
Key Takeaways
- Federal magistrate judges in California cannot themselves hold a party in civil contempt; they must certify facts to the district judge under 28 U.S.C. § 636(e), who then conducts the contempt proceeding.
- Failure to pay a court-ordered attorney-fee award is a textbook trigger for civil contempt. A defendant who lets a fee-award deadline pass without paying or moving for relief invites coercive sanctions.
- Coercive per-diem fines — daily, escalating monetary sanctions until the contemnor complies — are an accepted remedy for ongoing noncompliance with court orders.
- Failing to oppose a contempt motion is itself a serious tactical mistake; the unrebutted record supplies the certified facts the district judge will rely on.
Why It Matters
This recommendation illustrates the federal courts’ ordinary toolkit for enforcing discovery orders and fee awards. The discovery dispute that started this dispute may seem small relative to a daily contempt fine, but the rule is the rule: parties must either pay, seek a stay, or formally challenge the order. Ignoring a fee-award order is the kind of conduct that turns a manageable cost into a serious risk of personal liability and ongoing daily sanctions.
For California civil litigators on either side of contentious discovery disputes, the case is a useful illustration of the magistrate judge’s role: even where the magistrate cannot impose contempt directly, she can lay the groundwork by certifying facts that the district judge will then rely on in deciding whether to issue contempt orders and how aggressive the sanctions should be.