Butler v. Motiva Performance Eng'g, LLC
Background
- Creig Butler sued Motiva Performance Engineering, managed by William Ferguson, over a failed vehicle upgrade; a jury found Motiva liable and awarded Butler $292,000.
- After the verdict, Ferguson (also an attorney) transferred Motiva’s Ferrari to a separate LLC he controlled, then used it as collateral for a loan without court disclosure.
- The district court issued sanctions against Ferguson, including requiring payment of the judgment and a $50,000 donation to charity, citing remedial contempt, inherent court powers, and Rule 11.
- Ferguson appealed, arguing the court imposed punitive contempt without affording him required criminal-level due process protections.
- The Court of Appeals upheld the sanctions under the court’s inherent powers and Rule 11; Ferguson petitioned the Supreme Court on due process and preservation grounds.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a motion to reconsider was needed to | Ferguson: Issues only apparent after order, not required. | Butler: Ferguson had to use that route. | Motion to reconsider not required; issues were preserved for appeal. |
| preserve appeal issues | |||
| Whether punitive contempt can be affirmed under | Ferguson: Criminal-level due process needed for punitive | Butler: Sanctions proper on other | Sanctions cannot be affirmed as contempt or inherent powers without due |
| inherent powers or Rule 11 without due process | sanctions, not satisfied here. | grounds if justified. | process, but can be under Rule 11 with lesser procedural requirements. |
| Whether district court’s inherent powers allowed | Ferguson: Sanctions punitive; inherent powers also require | Butler: Inherent powers allow for | Inherent powers cannot be used to impose punitive monetary sanctions |
| for the punitive sanctions without full process | full due process. | alternative sanctioning authority. | without full due process. |
| Whether Rule 11 can serve as alternative basis | Ferguson: Same due process required under Rule 11 as for | Butler: Rule 11 has separate goals | Rule 11 permits monetary sanctions with less rigorous due process; |
| for sanctions without criminal-level procedures | contempt. | and standards. | sanctions sustained only for willful misstatements in court-filed documents. |
Key Cases Cited
- State ex rel. CYFD v. Mercer-Smith, 434 P.3d 930 (N.M. 2019) (distinguishes between remedial and punitive contempt and necessary due process)
- Chambers v. NASCO, Inc., 501 U.S. 32 (1992) (outlines the scope of courts’ inherent sanction powers)
- Goodyear Tire & Rubber Co. v. Haeger, 581 U.S. 101 (2017) (compensatory vs. punitive sanctions under inherent powers and procedural safeguards)
- Roadway Express, Inc. v. Piper, 447 U.S. 752 (1980) (contempt is the most prominent inherent judicial sanction)
- Mathews v. Eldridge, 424 U.S. 319 (1976) (balancing test for procedural due process requirements)