brown memo in opposition to contempt motion

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF SOUTH CAROLINA

FLORENCE DIVISION

HOWARD K. STERN, as Executor of the ) C.A. No. 4:08-CV-2753-TLW Estate of Vickie Lynn Marshall, a/k/a Vickie ) Lynn Smith, a/k/a Vickie Lynn Hogan, a/k/a ) Anna Nicole Smith, ) ) Plaintiff, ) NON-PARTY SUSAN M. BROWN’S ) MEMORANDUM IN OPPOSITION TO vs. ) PLAINTIFF’S MOTION FOR CONTEMPT ) AND SANCTIONS STANCIL SHELLEY, a/k/a Ford Shelley, ) G. BEN THOMPSON, and John or Jane ) Doe 1-12 whose true names are unknown, ) ) Defendants. ) ) This matter is before the Court on the motion of Plaintiff Howard K. Stern for an order

holding Defendant G. Ben Thompson and his attorney, Susan M. Brown, in contempt of court for

allegedly violating a Consent Order Entering Preliminary Injunction [Doc. 39] and sanctioning both

Thompson and Brown. Susan M. Brown submits this memorandum on her own behalf in

opposition to the motion.

FACTS

This motion seeks to hold Brown in violation of a Preliminary Injunction that she agreed to

based on disclosures she voluntarily made without Court intervention. Moreover, there is no

evidence that Brown transferred any materials after the Consent Order was entered or that Plaintiff

has been damaged in any way by the acts of Brown.

I. OWNERSHIP OF HORIZONS

Defendant Ben Thompson was a social acquaintance of Deceased Plaintiff, Anna Nicole

Smith. Defendant Thompson met Smith in July of 2005. Smith developed a relationship with

4:08-cv-02753-TLW -TER Date Filed 11/24/09 Entry Number 86 of 13

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Defendant Thompson and Defendant Thompson’s family, including Defendant Ford Shelley

(Thompson’s son-in-law), Gina Shelley (Thompson’s daughter), Riley Shelley (Thompson’s

granddaughter), Gaither Thompson (Thompson’s son), and Melanie Thompson (Thompson’s

daughter-in-law). For the following two years, Defendant Thompson and his family not only

welcomed Smith as a member of their family but also allowed Smith and Plaintiff Howard Stern to

stay at several houses owned by Defendant Thompson in Myrtle Beach, South Carolina, the Florida

Keys, and the Bahamas for months at a time.

On October 5, 2006 Defendant Thompson purchased a house in the Bahamas known as

“Horizons.” Deed, Exhibit No. 1. Defendant Thompson provided the funds for this purchase and

had the property deeded in his name. Defendant Thompson was originally going to have it deeded

to Smith on the condition that she sign a mortgage back to him. When Smith refused to sign the

note and mortgage, the property was deeded in Thompson’s name and recorded as such. This is the

only recorded deed on the property for the related parties.

Because Smith had refused to sign the note and mortgage and was not the owner of

Horizons, Tracy Ferguson, a Bahamian attorney, provided Smith with an Eviction Notice on

October 20, 2006. Ferguson Letter, Exhibit No. 2. On November 28, 2006, counsel for Defendant

Thompson sought and obtained a judgment finding that Defendant Thompson should have

possession of Horizons. Default Judgement, Exhibit No. 3. Although Smith had earlier obtained an

Order barring Defendant Thompson from interfering with her possession of Horizons, Smith Order,

Exhibit No. 4, this was an ex parte order never served on Defendant Thompson. More importantly,

the Smith Order was dated November 20, 2006 and thus presumably superseded by Thompson’s

Default Judgement. Finally, since the Smith Order was in favor of Ms. Smith, who is now

deceased, it is of questionable effect following her death. Affidavit of Susan Brown, Paragraphs 4-


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7, Exhibit No. 5.

In short, Defendant Thompson 1) paid for Horizons, 2) was the deeded owner of Horizons,

and 3) had the right to possession of Horizons as of November 26, 2006.

II. ACTIONS FOLLOWING PLAINTIFF SMITH’S DEATH

Smith passed away on February 8, 2007. Immediately following Smith’s death, Defendant

Shelley was informed by Bahamian attorney Ferguson that persons were gathering at Horizons, that

someone had removed or attempted to remove items, and that someone needed to come secure the

property.1

When they arrived, there were several people at the gate, most notably a local attorney for

Plaintiff Stern. Defendant Shelley had keys to the property and informed those present, including

the attorney for Plaintiff Stern, that he was going to secure the property. Defendant Shelley invited

Plaintiff Stern’s counsel to enter the property with them, but the attorney declined.

Defendant Shelley attempted to contact Plaintiff Stern regarding the need to secure the

property but could not get through to Stern or leave a message. Defendant Shelley, who was in

Florida at the time, flew down to the Bahamas with his wife, Gina, and Gaither and Melanie

Thompson. They then went to Horizons and met attorney Ferguson there.

Defendant Shelley and the others did not “break into” Horizons, but rather entered the

property owned by his father-in-law with a key in his possession. Upon entering Horizons, it was

discovered that property had indeed been removed from the premises, including all furniture for the

baby. While at Horizons, Shelley and the others discovered liquid methadone in the refrigerator and

alerted the local authorities to the presence of these drugs at that time. The local authorities declined

to appear at that time.

Defendant Shelley and the others did remove items from Horizons to insure that they were

1 This information and the remaining information in this section have been provided to Brown by Defendants Shelley and Thompson. Brown had no involvement with the activities of that day.


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not removed by unknown persons. Among those items were two computers, a hard drive, some

paintings and drawings by Plaintiff Smith, tapes, and documents. The originals of all of these

materials have been turned over to the Plaintiff or to police.

Although Plaintiff Stern apparently filed a police report regarding the entry to Horizons, no

charges were ever brought against the Thompsons or Shelleys, and no investigation has been

commenced. Brown Affidavit, Paragraphs 8-16, Exhibit No. 5.

III. DEFENDANT SUSAN BROWN’S INVOLVEMENT

Susan Brown entered a representation agreement with Defendant G. Ben Thompson in

October of 2006 wherein she agreed to represent him and several entities he owned with regards to

his dispute with Smith regarding Horizons. Brown was asked to act as a liaison between Thompson

and his Bahamian attorneys. At the same time, Brown verbally agreed to represent other members

of Defendant Thompson’s family on this one matter. Prior to October 2006, Brown had not

represented Defendants or their family. Brown Affidavit, Paragraph 2, Exhibit No. 5.

Following Smith’s death, Brown received a call from Gaither Thompson, Defendant

Thompson’s son. At the time, Gaither was in transit to Horizons to secure the property with

Defendant Ford Shelley, Gina Shelley, and Melanie Thompson (Gaither’s wife). Gaither informed

Brown that he had been in contact with both the Bahamian attorneys and the Bahamian court and

had been told that someone needed to get to Horizons immediately to secure the property. Gaither

communicated to Brown that they had authority from the attorneys and from the court to secure the

property. They undertook this action without consulting Brown or seeking her approval. In later

conversations with Tracy Ferguson, the Bahamian attorney, Ms. Ferguson informed Brown that a

Bahamian Judge had indeed approved the entry into Horizons. Brown Affidavit, Paragraphs 8-16,

Exhibit No. 5.


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At this point in time, Brown had never met or even spoken to Defendant Shelley and had no

involvement whatsoever with the effort to secure Horizons. Brown Affidavit, Paragraph 10, Exhibit

No. 5.

HANDLING OF MATERIAL PRIOR TO ENTRY OF CONSENT ORDER

Brown’s involvement with the materials possibly removed from Horizons and belonging to

the Plaintiff Estate is extremely limited. She has never had possession of the computers removed

from Horizons, and she has never disbursed any pictures, videos, or the like for public use or

display. Defendant Shelley turned over the original computers he had removed from Horizons to

the Horry County Sheriff upon advice of other counsel. Brown Affidavit, Paragraphs 17-18,

Exhibit No. 5.

In late 2007 Brown was contacted by the California Department of Justice, which informed

Brown that they were sending an investigator to retrieve the original material that had been removed

from Horizons and interview all involved regarding Smith’s death. Throughout this process none of

the original computers were ever in Brown’s possession. Brown Affidavit, Paragraph 19, Exhibit

No. 5.

In October of 2007, after the incident at Horizons, Brown met Defendant Shelley for the

first time in Myrtle Beach, South Carolina. At this meeting, Defendant Shelley gave Brown two

external hard drives for safe keeping. He showed Brown some of the pictures on the hard drives,

which were of Anna Nicole Smith. Some of these pictures were taken by Defendant Shelley, Gina

Shelley, and Melanie Thompson, and Brown assumed that those photographs belonged to those

individuals and were not taken from Smith’s computer. There may have been photographs taken

from Smith’s computer, but Defendant Shelley did not make this clear to Brown. Brown Affidavit,

Paragraph 20, Exhibit No. 5.


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Defendant Shelley also had a garbage bag full of documents, including emails and legal

papers. Some of this material was clearly from Defendant Shelley himself, i.e. emails to and from

Defendant Shelley. Brown does not know the precise origins of all the contents of the garbage bag.

Brown Affidavit, Paragraph 21, Exhibit No. 5.

Defendant Shelley asked Brown to keep the materials safe, and Brown kept them in her safe

at work. Defendant Shelley later provided Brown with photographs he took of himself turning over

Smith’s paintings to Larry Birkhead. Brown Affidavit, Paragraphs 22-23, Exhibit No. 5.

In November of 2007, Lin Wood, counsel for Plaintiff, asked that Defendant Shelley give

the external hard drives to him. Defendant Shelley initially agreed to turn over the hard drives but

wanted to remove his personal information from them first. Since Defendant Shelley was Brown’s

client, and Brown was under no legal compulsion to send the hard drives to Plaintiff, Brown

followed her client’s instructions and returned the hard drives to Defendant Shelley. A few weeks

later, Defendant Shelley returned two hard drives to Brown but did not authorize Brown to give

them to counsel for Plaintiff. Brown Affidavit, Paragraphs 24-25, Exhibit No. 5.

In 2008, Defendant Shelley started talking with Texas attorney Neil McCabe regarding a

possible legal action against Plaintiff. Defendant Shelley called Brown and told Brown to cooperate

fully with Mr. McCabe and provide him anything he wanted. Mr. McCabe subsequently asked

Brown for Defendant Shelley’s hard drives. Brown Affidavit, Paragraph 26, Exhibit No. 5.

Before sending McCabe the hard drives, Brown demanded an agreement from Mr. McCabe

that he would not disseminate the material on the hard drives. Mr. McCabe and Brown entered a

Common Interest and Confidentiality Agreement that provided:

Confidential information shared as part of the defense effort shall be held in strict confidence by the Parties. Should a Party elect to disclose Confidential Information beyond the terms of this paragraph, it is the burden of the disclosing Party to establish prior receipt of such information or other grounds for disclosure.


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Such information may be disclosed only to those outside and inside counsel, consultants and experts and other representatives for the purposes of advancing the Parties’ common interests in connection with the Actions. Each of the Parties shall take appropriate measures to maintain the confidentiality of all Confidential Information, and shall not disclose such information to any person, firm or entity except as provided herein.

Common Interest and Confidentiality Agreement, Exhibit No. 6. After this agreement was entered

Brown provided Defendant Shelley’s two external hard drives to Mr. McCabe in May of 2008.

Brown Affidavit, Paragraph 27-28, Exhibit No. 5.

Later in 2008, Mr. McCabe sent Brown back the original hard drives with stickers on them

indicating that they had been examined by BKD, LLP, the forensics firm retained by Mr. McCabe

to examine the hard drives. Picture of Hard Drives, Exhibit No. 7. Mr. McCabe also provided an

affidavit confirming that he returned all material in his possession and never disbursed any materials

found on the hard drives. Affidavit of Neil McCabe, Exhibit No. 8; Brown Affidavit, Paragraph 29-

30, Exhibit No. 5.

This is the only time Brown provided any materials that could possibly have come from

Horizons to any person other than the production in this case. Brown provided the material to other

potential counsel for Defendant Shelley at the request of Defendant Shelley as part of Brown’s

representation of him. Brown Affidavit, Paragraph 31, Exhibit No. 5. This was all before the

Consent Order entered in this case.

In 2008, Defendant Shelley received a subpoena from the defendant in Stern v. Cosby, the

lawsuit that Plaintiff brought against Rita Cosby, the author of Blond Ambition: The Untold Story

Behind Anna Nicole Smith’s Death. Brown first provided Plaintiff’s counsel the documents she

intended to produce in response to the subpoena to see if Plaintiff had any objections. Plaintiff’s

counsel claimed that some of the documents were property of the Estate and that they not be

produced. Plaintiff did not ask Brown to destroy the documents or otherwise accuse Brown of


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wrongfully holding same at that time. Brown Affidavit, Paragraph 32, Exhibit No. 5.

HANDLING OF MATERIAL AFTER ENTRY OF CONSENT ORDER

In January of 2009, this Court entered a Consent Order Entering Preliminary Injunction.

The Order required Brown to turn over the two hard drives and any other material in her possession

or custody that belonged to the Estate and was removed from Horizons after the death of Smith.

Brown and all parties consented to the Order.

In compliance with the Consent Order, Brown turned over the two external hard drives that

Defendant Shelley had given her and that had earlier been provided to Mr. McCabe. The hard

drives still had stickers on them indicating that they had been examined by BKD, LLP. Brown also

confirmed with Defendant Shelley that he did not have any material left that belonged to the

Plaintiff Estate. Brown did not disburse or copy any material belonging to the Plaintiff Estate

following entry of the Consent Order other than to her own attorneys for production to Plaintiff.

Brown Affidavit, Paragraphs 34-37, Exhibit No. 5.

At some point in 2009, Brown discovered some photographs and videos on her laptop that

she did not know were there and had never seen before. This was a relatively small amount of

photographs in comparison to what was on Defendant Shelley’s hard drives. Some of the

photographs were taken by Defendant Shelley, but some might have been property of the Plaintiff

Estate. Brown does not know how these photographs got on her laptop, but she does know that she

did not share the contents of her laptop with anyone other than her own attorneys to produce to

Plaintiff’s counsel. Brown Affidavit, Paragraph 38-40, Exhibit No. 5.

In response to a subpoena from Plaintiff, Brown copied the photographs on her laptop to

two flash drives and sent same to Plaintiff’s counsel on September 22, 2009. Brown also provided

Plaintiff’s counsel with the documents she had provided them earlier in response to the Cosby


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subpoena. She subsequently made three more flash drives containing the same photographs as well

as some videos taken by Defendant Shelley that did not come from the Plaintiff’s Estate. She also

created a sixth flash drive containing all the photographs and videos, so that she and her counsel

could maintain a copy of the subpoena production. This was kept in a sealed envelope at Hawkins

& Parnell, counsel for Brown, and was never opened. Counsel for Plaintiff was informed of this

additional flash drive. Affidavit of Teresa Lazzaroni, Esquire, Exhibit No. 9; Brown Affidavit,

Paragraphs 41-42, Exhibit No. 5.

In September of 2009, Plaintiff’s counsel called Brown and demanded that Brown withdraw

from the Common Interest Agreement with Mr. McCabe and demand that Mr. McCabe return any

copies of the hard drive. Brown did this by letter of September 25, 2009, again without any Court

intervention. Brown Letter, Exhibit No. 10; Brown Affidavit, Paragraph 43, Exhibit No. 5.

At Brown’s deposition on October 5, 2009, Brown willingly revealed that she had

maintained a copy of the subpoena response on her laptop. Counsel for Plaintiff demanded that

Brown produce the laptop for destruction, which Brown did without court intervention. Plaintiff

then arranged to have the hard drive from the laptop destroyed, including Brown’s personal

materials and photographs. Brown Affidavit, Paragraph 44, Exhibit No. 5.

LEGAL ARGUMENT

As pointed out at the start of this brief, Brown not only consented to the preliminary

injunction she is now accused of violating, but she also voluntarily complied with that injunction in

all respects. There is not one bit of evidence that she intentionally violated the Consent Order.

Rather, at most she interpreted the Consent Order differently from Plaintiff, believing that she was

entitled to maintain copies of documents and pictures produced to Plaintiff in discovery. When

Plaintiff objected to that retention, Brown not only turned over all remaining copies of previously


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produced material, she voluntarily destroyed her own laptop in an effort to satisfy Plaintiff.

Predictably, Plaintiff wants more.

To establish civil contempt, a movant must show each of the following elements by clear

and convincing evidence:

(1) the existence of a valid decree of which the alleged contemnor had actual or constructive knowledge; (2) ... that the decree was in the movant's “favor”; (3) ... that the alleged contemnor by its conduct violated the terms of the decree, and had knowledge (at least constructive) of such violations; and (4) ... that [the] movant suffered harm as a result.

Ashcraft v. Conoco, Inc., 218 F.3d 288, 301 (4th Cir.2000). Similarly, the purpose of civil

contempt is “to coerce obedience to a court order or to compensate the complainant for losses

sustained as a result of the contumacy.” Cromer v. Kraft Foods North America, Inc., 390 F.3d 812,

821 (4th Cir. 2004).2

Plaintiff’s request for sanctions against Brown fails on a number of grounds. First, Plaintiff

has utterly failed to demonstrate that there is any need to coerce Brown to comply with the Consent

Order. Brown has voluntarily complied with the Consent Order ever since it was issued. Brown

voluntarily turned over the originals of every bit of material she believed belonged to the Plaintiff

Estate. In response to a subpoena and at her deposition, Brown willingly disclosed that she

maintained copies of the material she had only just discovered. When Plaintiff’s counsel demanded

that Brown not even maintain copies of discovery responses, Brown not only turned over her own

copies, she also agreed to have her own laptop destroyed. Brown did all of this without any Court

intervention. Clearly, there is no need to coerce Brown to comply with the Consent Order because

Civil contempt is an appropriate sanction only if the Court can point to an

order that sets forth in specific detail an unequivocal command that a party has violated. In re

General Motors Corp., 61 F.3d 256, 258 (4th Cir. 1995).

2 The purpose of criminal contempt is to vindicate the authority of the court and punish the violator. Bradley v. American Household, Inc., 378 F.3d 373, 378 (4th Cir. 2004). Plaintiff does not seek a finding of criminal contempt.


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she has voluntarily complied with it at every step.

Second, Plaintiff has utterly failed to demonstrate any losses as a result of any alleged

violation of the Consent Order by Brown. Civil contempt remedies include ordering the contemnor

to reimburse the complainant for losses sustained and for reasonable attorney's fees. In re General

Motors, 61 F.3d at 258. However, the remedies and sanctions must be remedial and compensatory

and, unlike criminal contempt, non-punitive. Id. Generally, a compensatory sanction may not

exceed the actual loss to the complainant caused by the actions of respondent, lest the contempt fine

become punitive in nature, which is not appropriate in a civil contempt proceeding. Id. (quoting In

re Tetracycline Cases, 927 F.2d 411, 413 (8th Cir.1991); NLRB v. Laborers' Int'l Union, 882 F.2d

949, 955 (5th Cir.1989).

Following the issuance of the Consent Order, Brown simply kept a copy of her prior

productions to Plaintiff, did not disburse those copies to anyone, and turned over her own copies

and destroyed her own computer when Plaintiff objected to her keeping any copies. The only

person damaged in this process was Brown, not Plaintiff. Brown has done everything asked of her

by Plaintiff without any Court intervention.

Indeed, the only damages claimed by Plaintiff in this motion are attorneys fees for this

pending motion and the deposition of Brown. However, Plaintiff did not have to seek Court relief

to coerce compliance with the Consent Order, did not have to depose Plaintiff to coerce compliance

with the Consent Order, and did not have to bring this motion to coerce compliance with the

Consent Order. As such, Plaintiff has expended no attorney fees in an effort to enforce the Consent

Order.

Finally, there is no clear and convincing evidence that the material in Brown’s possession

belonged to the Plaintiff Estate or was removed from Horizons. The Consent Order covers property


12

that belonged to the Estate of Ms. Smith and was removed from Horizons following Ms. Smith’s

death. The Consent Order does not cover material that was derived from other sources or that

“belonged” to third parties. The Consent Order is ostensibly directed toward insuring that valuable

property of the Estate was not disseminated or published in any way that would devalue the

property or damage the Estate. No such dissemination occurred nor is any alleged by Plaintiff.

Similarly, the Consent Order implies, as it necessarily must, that it covers only material that

Brown knew belonged to the Estate and was removed from Horizons. See Ashcraft, 218 F.3d at

301 (Movant must show that “the alleged contemnor by its conduct violated the terms of the

decree, and had knowledge (at least constructive) of such violations.” (emphasis added)). Much

of the material in question, such as the photographs and videos shot by Brown’s own clients, is not

ostensibly material removed from Horizons or belonging to the Estate. Further, since Brown has

never been to Horizons, much less removed any material from Horizons, her only knowledge

regarding the origin of the material comes from her former clients, in particular Defendant Shelley.

As such, she must necessarily rely upon information provided by her former client to determine the

origin of the materials and whether they were covered by the Consent Order.

Thus, until Plaintiff produces evidence that the material in question belongs to the Estate and

was removed from Horizon’s following Ms. Smith’s death, there is no basis for even considering

this motion. Indeed, it is impossible for Brown and her counsel to respond in full to this and

other pending motions in that that motions concern documents and photographs that Brown’s

counsel has never seen and are no longer in Brown’s possession. Until Brown and her counsel

have an opportunity to review the materials in question, Brown does not concede that 1) any of

the materials were removed from Horizons following Ms. Smith’s death, 2) that the materials are

property “belonging” solely to the Estate, 3) that the materials have any value whatsoever, or 4)


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that Brown was aware that the materials were removed from Horizons and “belong” to the Estate

and have any value. In order to make such determinations, Brown and her counsel must see the

property in question.

CONCLUSION

Based on the foregoing, Brown would ask that the Court deny Plaintiff’s motion for

sanctions or continue it until Plaintiff produces the material that Brown allegedly disbursed in

violation of the Consent Order.

RESPECTFULLY SUBMITTED,

/S/ JOSEPH C. WILSON, IV Carl E. Pierce, II (Fed. ID#3062) Joseph C. Wilson, IV (Fed. ID#5886) Pierce, Herns, Sloan, & McLeod, LLC P.O. Box 22437 Charleston, SC 29413 (843) 722-7733 (843) 722-7732 [email protected] ATTORNEYS FOR SUSAN M. BROWN AND THE LAW OFFICES OF SUSAN M. BROWN, PC

November 24, 2009 Charleston, South Carolina


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