Contempt Looms for China on $10M Judgment

     MANHATTAN (CN) – China faces contempt charges on the $10 million judgment it owes a couple whose teenage son was killed by a defective rifle, a federal judge warned.
     Debbie and Max Walters sued China in 1993 over their 13-year-old son Kale’s tragic death in a hunting accident three years earlier.
     The family blamed Kale’s death on an alleged malfunction in the Chinese-manufactured rifle Kale was carrying.
     China claimed immunity and never entered an appearance in the Missouri action, but the court found that it had jurisdiction over China under a commercial exception to the Foreign Sovereign Immunities Act.
     A 1996 bench trial ended with a $9.8 million default judgment against China, but the Walters have been unsuccessful to date in collecting on that judgment.
     The Walters had registered the judgment in Washington, D.C., in 2001, but China ignored their requests to document its American-held commercial assets.
     With April 2012 deadlines looming for China to produce those documents and appear in court, the U.S. federal government issued a statement of interest in the case that characterized the court’s discovery order as “broad and far-reaching.”
     Uncle Sam feared that such legal sanctions would tip the scales of fairness as to how other countries execute legal actions involving the United States.
     “Such treatment encourages other nations to treat the United States similarly within their judicial systems,” the government argued in court papers.
     U.S. Magistrate Judge Deborah Robinson set April 2014 deadlines for production by China this past February, and the Walters moved to hold China in contempt when China ignored those demands.
     Robinson stopped short of issuing the sanction of civil contempt Monday, despite finding that China’s actions indicate that “it does not intend to participate in the litigation, or comply with orders of the court.”
     China has until New Year’s Eve to produce the requested documents or face $246,500 daily fines for failing to comply, the eight-page order states.
     Such a delayed move would be “prudent” to give China a chance to comply and an “opportunity to be heard,” Robinson said.
     If China doesn’t respond by then, the Walters have until Jan. 7, 2015, to pursue their civil contempt sanctions.
     An attorney representing the family did not respond to a request for comment.

The 2nd Circuit back in 2011 affirmed dismissal of an attempt by the Walters to collect China‘s assets from various banks.

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