Natural Gas Pipeline Co. of America v. Energy Gathering, Inc. ( 1993 )

                             FOR THE FIFTH CIRCUIT
                                  No. 93-2283
                               Summary Calendar
         OF AMERICA, ET AL.,
         OF AMERICA,
         JOHN FOX,
          Appeal from the United States District Court for the
                       Southern District of Texas
                              September 21, 1993
    Before GARWOOD, JONES and EMILIO M. GARZA, Circuit Judges.
    GARWOOD, Circuit Judge:
         Appellant John Fox (Fox) is a Mississippi attorney who has
    been the longtime associate, legal counsel, and business partner of
    Navarro Crowson (Crowson), a judgment debtor who owes millions of
    dollars to appellees, whom he defrauded.           Thus far, Crowson has
    largely foiled his creditors' efforts to recover their judgments by
    concealing his assets and withholding documents that would reveal
    their extent and location.          When Fox was ordered to turn over all
    Crowson-related business or financial records, he persistently
    failed to do so.         The district court then ordered Fox to produce
    his personal tax returns for the last several years.                   Fox refused
    and was ultimately held in civil contempt pending compliance.                     Fox
    appeals, and we reverse in part and remand.
                             Facts and Proceedings Below
         Until     his      discharge    in   1985,       Crowson,   a    resident    of
    Mississippi, was an employee of appellees Mitchell Energy and
    Development Corp. (Mitchell Energy), Southwestern Gas Pipeline,
    Inc. (Southwestern Gas), and Winnie Pipeline Co. (Winnie Pipeline).
    It is alleged that while so employed Crowson took bribes and
    kickbacks    in    connection      with   the   negotiation      of   oil   and   gas
    contracts.        Following a grand jury investigation, Crowson was
    indicted in federal court in Texas.               Crowson's counsel in these
    criminal proceedings was Fox, an attorney and resident of Houston,
    Mississippi,      who    had    represented     and    had   extensive      business
    dealings with Crowson since at least 1985.                   Crowson eventually
    pleaded guilty to several counts of mail fraud.
         On September 14, 1988, appellees Texas Industrial Energy Co.
    (TICO), and South Gulf Energy, Inc. (South Gulf), sued Crowson in
    the United States District Court for the Southern District of
    Texas, Houston Division, to recover damages incurred as a result of
    the kickback scheme.           Crowson having filed no answer, on June 21,
    1991, appellees moved for a default judgment.                  On September 17,
    1991, Fox entered an appearance in the litigation on behalf on
    Crowson to oppose the entry of judgment.1               On September 23, 1991,
    default     judgment   was    awarded       to   TICO    and   South   Gulf   for
    approximately $1.28 million.2
         Having    obtained      their   judgment,      appellees     attempted    to
    discover     the   extent      and   location       of     Crowson's     assets.
    Interrogatories and requests for production of documents were
    served upon Fox as Crowson's attorney of record.                   However, no
    answers or responsive documents were supplied.                  On January 15,
    1992, the court ordered Crowson to respond to appellees' discovery
    requests.    This order, too, was ignored.          Finally, on June 8, 1992,
    the court held a show cause hearing at which Crowson was judged to
    be in contempt for failing to comply with post-judgment discovery
    and was incarcerated.
         To gain release from contempt, on June 15, 1992, Crowson
    signed, and the court approved, an "Agreed Order," in which Crowson
    pledged to produce all of his financial and business records.3                The
         Appellees assert that following his appearance on Crowson's
    behalf, Fox was served with all of the pleadings filed in the court
    below and received copies of all of the orders entered in the case.
    This is not denied by Fox and would be the normal course of
    proceeding in the court below.
         Appellees Mitchell Energy, Southwestern Gas, and Winnie
    Pipeline had also brought suit against Crowson in Texas state court
    and, on September 23, 1991, obtained a default judgment in excess
    of $4.75 million. After reaching a judgment collection agreement
    with TICO and South Gulf, these appellees intervened in the federal
    court action on January 15, 1993.
         The Agreed Order provided in part as follows:
         "Crowson agrees to immediately turnover, and hereby
         authorizes third-parties to turnover or release, all of
         Crowson's financial or business records . . . to the
         United States Marshal Service and the representatives of
         TICO and/or South Gulf . . . including but not limited to
         the following . . ."
    There followed twenty-five paragraphs describing in detail types of
    records to be produced, including:
         "(i) All documents that reflect, evidence, relate or
         pertain to Crowson's or MEC's [Mississippi Energy
         Corporation, a Crowson entity] participation or ownership
         in any partnerships, joint ventures, corporations or
         other business entities in which Crowson or MEC hold
         either a direct or beneficial interest in from January 1,
         1985 to the present.
         (j) All documents that reflect, evidence, relate or
         pertain to any transfer of assets of any nature by
         Crowson or MEC, or any business entity or affiliate with
         whom Crowson or MEC have been employed or in which
         Crowson or MEC owns or owned a financial interest from
         January 1, 1985 to the present, as the actual or
         beneficial owner.
         . . .
         (t) All documents that reflect, evidence, relate or
         pertain to Crowson's or MEC'S, or any business entity's,
         affiliate's or corporation's with whom Crowson or MEC
         have been employed, or in which Crowson or MEC owns or
         owned a financial interest from January 1, 1985 to the
         present, transfers of assets of any kind, including, but
         not limited to, monies, jewelry, furs, automobiles,
         boats, charge cards, furniture, homes, condominiums or
         apartments since January 1, 1985.
         . . .
         (v) All contracts of any nature, including commission
         agreements, under which Crowson or MEC owns a legal or
         equitable interest in from January 1, 1985 to the
         (w) Corporate records of any corporation that Crowson
         served as officer or director of from January 1, 1985 to
         the present.
         . . .
    Agreed Order also "authorize[d]" third parties to release such
    records.   Finally, the Agreed Order provided that Crowson would be
    reincarcerated in the event that he failed to comply with its terms
    or to cooperate fully with post-judgment discovery.        Crowson,
    however, evidently had no intention of complying with the Agreed
    Order and quickly began to violate it.   The record indicates that
    sometime after his release, Crowson removed financial records from
    his accountant's files.    In response, TICO and South Gulf applied
    for an ex parte order requiring the turnover of Crowson's assets
    and documents.   On July 14, 1992, the court ordered Crowson, his
    agents and attorneys, to turn over all of his assets to the United
    States Marshal Service.4     On July 21, 1992, the court held a
         (y) All documents that reflect, evidence, relate or
         pertain to brokerage and commodities accounts, whether
         currently open, active or closed, in the name of Crowson
         or MEC, or any business entity, affiliate or corporation
         in which Crowson or MEC owns or owned a financial
         interest from January 1, 1985 to the present . . . ."
         The order concluded by stating "ORDERED, that Defendants
    Navarro Crowson and Mississippi Energy Company shall comply with
    the terms and conditions of the agreed order."
         This order provided in part as follows:
              "ORDERED, that Crowson, MEC, their partners, agents,
         servants, employees, attorneys, and all other persons in
         active concert or participation with Crowson or MEC who
         receive notice of this temporary restraining order shall
         be, and are hereby, enjoined from selling, conveying,
         assigning or otherwise transferring any of Crowson's or
         MEC's real property, personal property, income or other
         . . .
              ORDERED, that Crowson and MEC shall immediately
         deliver all assets to the U.S. Marshal's service Houston
         Office until TICO's and South Gulf's judgment is fully
    hearing   to   determine   whether   to   revoke   Crowson's    conditional
    release from contempt for violating the Agreed Order.                At the
    hearing, the court ordered Crowson to produce all of his financial
    records and to direct his agents to do the same by August 18,
    1992.5    The court did not, however, have Crowson reincarcerated.
         . . .
              ORDERED, that all financial institutions, investment
         companies, securities brokers, commodities brokers,
         accountants, attorneys or other third-parties, that have
         or currently hold, maintain or receive assets or income
         for Crowson or MEC shall immediately turnover such assets
         or income and, all documents relating to such assets or
         income upon the service of this order."
         This order was predicated on a motion that invoked section
    31.002 of the Texas Civil Practice & Remedies Code, paragraph (b)
    of which provides in part:
         "The court may:
              (1) order the judgment debtor to turn over nonexempt
         property that is in the debtor's possession or is subject
         to the debtor's control, together with all documents or
         records related to the property, to a designated sheriff
         or constable for execution;
              (2) or otherwise apply the property                  to   the
         satisfaction of the judgment; or . . . ."
         With respect to Vernon's Tex. Ann. Civ. Stat. art. 3827a, the
    predecessor to section 31.002, it has been said that "[a]lthough a
    third party retains the property, if it is shown to be non-exempt,
    owned by a judgment debtor and subject to the debtor's possession
    or control, the trial court may issue and enforce its turnover
    order." Norsul Oil & Mining v. Commercial Equipment Leasing Co.,
    703 S.W.2d 345
    , 349 (Tex. App.SQSan Antonio, 1985, no writ).
    Accord Daniels v. Pecan Valley Ranch, Inc., 
    831 S.W.2d 372
    , 384
    (Tex. App.SQSan Antonio, 1992, no writ) (section 31.002).
         The court stated, among other things, "Hamilton, Fox, the
    trustee for the children's trust, those people are all your agents,
    and they are to produce everything that has anything to do with
    anything that you having [sic] interest [in] or Mississippi Energy
    Rather than complying with the various court orders requiring him
    to surrender his assets, Crowson repaired to Mississippi where he
    filed for bankruptcy and voluntarily committed himself to a mental
    hospital. Seeing through this ruse, the court ordered that Crowson
    be reincarcerated.
          At the same time that Crowson was engaged in this abuse of the
    discovery process, appellees were meeting with little more success
    with Fox.   On June 18, 1992, TICO and South Gulf representatives,
    accompanied by a United States Marshal, had the Agreed Order served
    upon Fox in his office in Houston, Mississippi.                   Fox, however,
    denied being in possession of any of Crowson's requested records
    and produced nothing.       On July 7, 1992, appellees and a marshal
    returned to Fox's office.        Fox again denied being in possession of
    any documents responsive to the Agreed Order.6
          Subsequently, appellees discovered that Fox was the trustee of
    a trust, established in 1990 by Crowson, known as the Crowson
    Children's 1990 Trust (the Children's Trust).                On September 14,
    1992, the court ordered Fox to turn over all of the trust's assets,
    all   documents   related   to    the       trust,   and   all   assets   in   his
    possession belonging to Crowson (the Trust Order).7               Fox responded
    to this order by filing an adversary proceeding in Crowson's
    has interest[in] since 1985."
         Fox apparently offered to produce a box containing copies of
    court records from the lawsuit underlying this appeal, which
    appellees declined to accept.
         By this time, however, Fox had already liquidated and
    disbursed the trust's only remaining asset, a life insurance policy
    with a cash value of approximately $26,000.
    bankruptcy action seeking a declaratory judgment that the Trust
    Order   was   null   and   void.   The   bankruptcy   was   subsequently
    transferred to the court below and dismissed.
         On January 21, 1993, the court on its own motion ordered Fox
    to file a pleading clearly designating his capacity in the instant
    litigation.    On February 5, 1993, Fox responded that he was not a
    party to the action and that, although he had made a brief
    appearance on Crowson's behalf in September 1991, he had since been
    replaced as Crowson's counsel by Bobby Mims, an attorney licensed
    in Texas.8    Unconvinced, the district ruled that Fox's response was
    "inadequate" and that he "remains attorney of record for Navarro
    Crowson in this action."
         On February 8, 1993, appellees filed a motion for sanctions
    against Fox, who was ordered to appear and show cause why he should
    not be sanctioned for failing to produce the Crowson records
    pursuant to the Agreed Order and for failing to turn over the
    assets of the Children's Trust pursuant to the Trust Order.          The
    show cause hearing was held on March 15, 1993.         At the hearing,
    appellees sought to expose the implausibility of Fox's earlier
    assertion that he had no documents responsive to the Agreed Order
         Mims had first represented Crowson at the show cause hearing
    on June 8, 1992. The court's order of contempt entered after that
    hearing recites that "Crowson appeared for the hearing with new
    counsel, Bobby D. Mims. Fox never withdrew as Crowson's counsel.
    There has been no motion to substitute."     The court added that
    "Crowson solicited new counsel to obstruct discovery and to dodge
    court orders." Mims also co-signed the Agreed Order with Crowson.
         Under the local rules of the district court, Fox, having been
    Crowson's only attorney, was counsel in charge, and could only
    withdraw "by motion and order, under conditions imposed by the
    court." S.D. Tex. Local R. 2(D).
    by informing the court, on the basis of evidence obtained in this
    case in discovery from other sources, of Fox's extensive business
    dealings with Crowson.      It was revealed, for example, that:              the
    two maintained a joint account at a brokerage firm and had actively
    traded stocks together as Fox-Crowson Investments; that the two
    shared an interest in a condominium in Crested Butte, Colorado; and
    that   Crowson   had   assigned    to   Fox   a   natural   gas   pipeline    in
    Jefferson County, Texas.9         The court also heard testimony about
    Fox's activities as Crowson's attorney.            Not only had Fox prepared
    the Children's Trust, but he had been Crowson's lawyer in a divorce
    settlement within the last few years.10           The evidence revealed that
    Fox's roles as attorney and business partner overlapped.                     For
    instance, Fox testified that Crowson had assigned him the gas
    pipeline as compensation for legal services, but that he (Fox) had
    forgotten about it.
           It appears that this showing of Fox's deep involvement with
    Crowson as the latter's attorney and business partner convinced the
    court below of several things: that an agency relationship existed
         In other hearings, the court heard testimony that Fox and
    Crowson: had bought and sold real estate together, with a third
    person, as the partnership of Holleman-Fox-Crowson; owned "the Coke
    building" in Houston, Mississippi; and owned an oil rig in Alabama.
         Despite having denied in June and July of 1992 that he was in
    possession of any of Crowson's records, Fox, appellees asserted
    without contradiction, had subsequently appeared at a hearing in
    Crowson's bankruptcy action in Mississippi with copies of a
    property settlement from this divorce but had there claimed he
    obtained the documents from an unidentified third party.
    between Fox and Crowson;11 that documents relating to their joint
    ventures must surely exist;12 that the disclosure of these documents
    would aid in the location of Crowson's assets;13 and, finally, that
    Fox   had     purposefully     withheld    documents      from    the    court.14
    Accordingly, the court ordered Fox to produce every document in his
    possession     relating   to   Crowson    or   business   he     had   done   with
    Crowson. The court in this connection also required Fox to produce
    all of his own personal tax returns and schedules from 1984 to the
         For example, the court stated: "Mr. Fox has been deemed by
    this Court to be an agent and alter ego of Mr. Crowson for the
    purposes of Crowson's records and activities.        I think that
    conclusion is inescapable. . . ." The court also observed that Fox
    was Crowson's "alter ego in any number of ways" and "is a surrogate
    for Crowson."
         The court stated: "it is inconceivable to me that out of this
    18-year relationship there are not a whole lot of records."
         The court stated: "it seems it's going to be necessary to
    reconstruct your life in order to find out how much of your life
    and how much of Mr. Crowson's overlap, and see if we can find some
          The court stated:
          "[Fox] is doing what is classic discovery stall, so when
          [appellees] . . . find out about something, he will
          explain it; but there is nothing produced or explained
          until they find something from a third source.
          . . .
               "And I thought the [Agreed] order made clear that
          you were to get the stuff if you didn't have copies.
          . . .
               "When I made the mistake of being nice and letting
          [Crowson] out [of jail] for a little while, he went out
          and, with the help of Mr. Fox and other people, he moved
          stuff all around and in violation of every duty he owed
    present.15 The court commented in this regard:
         "Your personal tax returns reflect income from Mr.
         Crowson, partnerships with Mr. Crowson, and I don't know
         what else.
              "But Mr. Zivley [appellees' counsel] is going to
         know what else, because your tax returns show the
         treatment of property given to or received from Mr.
         Crowson. . . .
         . . . .
              "He is going to get your tax returns that show all
         the deals, so he can satisfy himself that there are not
         some other things that you don't recall, like this gas
    The court ordered that the motion for sanctions against Fox be
    carried over until April 12, 1993, at which time, if Fox had not
    complied with the court's order, he would be held in contempt.
         Fox sought a stay from this Court.            On April 8, 1993, we
    denied   his   motion   on   the   ground   that   we   lacked   appellate
    jurisdiction.16   On April 12, 1993, Fox filed a motion to withdraw
    as Crowson's counsel.    The court had not ruled on this motion as of
    the preparation of the record on appeal.
         On April 13, 1993, the show cause hearing resumed.          As of that
         The court's minutes from the hearing contain an order that
    "Fox shall produce his personal tax returns and schedules for 1984
    to the present and all other documents relating to Crowson or
    business Fox did or could have done with Crowson."
         A discovery order, even one directed at a non-party, is not a
    final order and hence not appealable. Prior to appeal, the one to
    whom the order is directed must first defy it and risk being held
    in contempt.    If he is so sanctioned, the contempt order is
    appealable.   See, e.g., In re Grand Jury Subpoena, 
    926 F.2d 1423
    1430 (5th Cir. 1991); Corporacion Insular de Seguros v. Garcia, 
    876 F.2d 254
    , 256-58 (1st Cir. 1989); FTC v. Alaska Land Leasing, Inc.,
    778 F.2d 577
    , 578 (10th Cir. 1985); 8 C. Wright & A. Miller,
    Federal Practice & Procedure § 2006, at 30 (1970).
    time, Fox still had not produced any of the documents required of
    him.    At the hearing, Fox initially agreed to turn over every
    record in his possession pertaining to Crowson, including his
    personal tax returns.   After conferring with counsel, however, Fox
    recanted and declared that he would not produce his tax returns, at
    which point he was held in civil contempt.    On April 15, 1993, we
    granted Fox a stay of the coercive portions of the order.   Fox now
    appeals the court's judgment of contempt.17
           On appeal, Fox primarily argues that the contempt judgment
    against him must be reversed because the court below had no
    authority under the Federal Rules of Civil Procedure to order him
    to produce his tax returns.    Because this order was invalid, Fox
    maintains, its violation cannot constitute grounds for contempt.
    We will address this argument in Part I and Fox's other contentions
    in Part II.
         Fox attempted initially to notice an appeal on April 13, 1993.
    Realizing that the district court did not enter its judgment of
    contempt until April 14, 1993, Fox "re-noticed" his appeal on April
    26, 1993, to cure any jurisdictional defect. Under 28 U.S.C. §
    1826(b), an appeal from a judgment of contempt must be disposed of
    within thirty days. Although more than a month has passed, this
    appeal has been lawfully processed under established principles.
    First, eight circuits have held that time provisions of section
    1826(b) do not apply if the contemnor is at liberty during the
    appeal. See In re Grand Jury Proceedings (GJ90-2), 
    946 F.2d 746
    749 n.3 (11th Cir. 1991) (citing cases).        According to this
    authority, only one circuit holds a contrary view. We believe the
    majority rule is a sound one. Second, before the expiration of the
    thirty-day period we entered an order extending the time for
    disposition of this appeal.      This conforms to Fifth Circuit
    practice in section 1826(b) cases.         See In re Grand Jury
    Proceedings (Gavel), 
    605 F.2d 750
    , 752 n.1 (5th Cir. 1979) ("Where
    appropriate, we will enter an order extending the time within which
    the appeal must be decided.") (citing cases).
         Fox argues that, because he is a non-party and because the
    documents at issue are located in Mississippi, Federal Rules 34 and
    45 require that a subpoena for their production issue from a
    federal district court in Mississippi.        Our inquiry must begin,
    however, not with Rule 34 or Rule 45, but with Rule 69, which
    governs   the   procedure   for   post-judgment   discovery    in   federal
    courts.   Rule 69 provides in relevant part as follows:
         "In aid of the judgment or execution, the judgment
         creditor . . . may obtain discovery from any person,
         including the judgment debtor, in the manner provided in
         these rules or in the manner provided by the practice of
         the state in which the district court is held."
         Fed.R.Civ.P. 69(a).
    Thus, Rule 69 allows post-judgment discovery to proceed according
    to the federal rules governing pre-trial discovery, or according to
    state practice.
         Although Texas Civil Practice & Remedies Code § 31.002 has
    been construed to authorize turnover orders directed to third
    parties (see note 4 supra), the turnover contemplated thereby is
    only of property of the debtor and related records.           Rule 621a of
    the Texas Rules of Civil Procedure, like Federal Rule 69, makes
    post-judgment discovery coextensive with pre-trial discovery.18
    Texas Rule of Civil Procedure 167(4), which governs the pre-trial
         Rule 621(a) provides in relevant part:
         "At any time after rendition of judgment, . . . the
         successful party may, for the purpose of obtaining
         information to aid in the enforcement of such judgment,
         initiate and maintain . . . any discovery proceeding
         authorized by these rules for pre-trial matters." Tex.
         R. Civ. P. 621a.
    production of documents by non-parties, provides, among other
    things, that a court may order a non-party to produce documents.19
    As stated below, we conclude that Texas practice only partially
    justifies the court's orders as applied to Fox.           However, we first
    consider the federal rules and practice.
         Fox's primary contention is that the court's order was not in
    keeping with Federal Rules 34 and 45.       Rule 34 provides as follows:
         "A person not a party to the action may be compelled to
         produce documents and things or to submit to an
         inspection as provided in Rule 45."    Fed. R. Civ. P.
    Thus, under Rule 34 a non-party may be compelled to produce
    documents in accord with Rule 45.         That rule, which governs the
    issuance of subpoenas, contains the following key sentence:
         "If separate from a subpoena commanding the attendance of
         a person, a subpoena for production or inspection shall
         issue from the court for the district in which the
         production or inspection is to be made." Fed. R. Civ. P.
    Relying on this text, Fox argues that a district court in Texas
    cannot order him to produce his tax returns, which are located in
         We agree with Fox that a federal court sitting in one district
    cannot   issue   a   subpoena   duces   tecum   to   a   non-party   for   the
         Texas Rule 167(4) provides in relevant part:
         "The court may order a person, . . . not a party to the
         suit to produce in accordance with this rule. However,
         such order shall be made only after the filing of a
         motion setting forth with specific particularity the
         request, necessity therefor and after notice and hearing.
         All parties and the nonparty shall have the opportunity
         to assert objections at the hearing." Tex. R. Civ. P.
    production of documents located in another district.                      Cf. In re
    733 F.2d 634
    , 637 (4th Cir. 1984).                     The fact that the
    court could not subpoena Fox's records under Rule 45, however, does
    not necessarily compel Fox's conclusion that the order at issue was
    invalid.     After all, no subpoena was issued in this case; instead,
    the district court issued a direct order to Fox to produce his tax
    returns.     At the end of the day, Fox's argument merely establishes
    that   the    court's   order    must     be    justified      with    reference   to
    something other than Federal Rules 34 and 45.                   Appellees contend
    that the court order was a permissible exercise of the inherent
    power with which all federal courts are vested.
           For nearly as long as the federal courts have existed, it has
    been understood that "[c]ertain implied powers must necessarily
    result   to    our   courts     of   justice      from   the     nature   of   their
    institution," powers "which cannot be dispensed with in a court
    because they are necessary to the exercise of all others."                     United
    States v. Hudson, 7 Cranch 32, 34 (1812).                 See also Anderson v.
    6 Wheat. 204
    , 227 (1821).                The Constitution itself confers
    this authority upon all Article III courts as an incident to "The
    judicial Power." U.S.Const., Art. III, § 1; see Chambers v. NASCO,
    111 S. Ct. 2123
    , 2140 (1991) (Scalia, J., dissenting); 1 J.
    Moore, Moore's Federal Practice ¶ 0.60[6], at 637 (2d ed. 1988).
    The inherent powers of the federal courts are "governed not by rule
    or statute but by the control necessarily vested in courts to
    manage   their    own   affairs      so   as     to   achieve    the    orderly    and
    expeditious disposition of cases."              Link v. Wabash R. Co., 
    82 S. Ct. 15
    1386, 1389 (1962).         At the same time, however, these powers must
    be exercised "with restraint and discretion."                 Roadway Express,
    Inc. v. Piper, 
    100 S. Ct. 2455
    , 2463 (1980).                 As we have said,
    inherent authority "is not a broad reservoir of power, ready at an
    imperial hand, but a limited source; an implied power squeezed from
    the need to make the court function."             NASCO, Inc. v. Calcasieu
    Television & Radio, Inc., 
    894 F.2d 696
    , 702 (5th Cir. 1990), quoted
    with approval and aff'd, 
    111 S. Ct. 2123
    , 2131 (1991).                 In short,
    the   inherent    power    springs   from   the   well   of    necessity,    and
    sparingly so.
          Fox   in   essence    argues   that   the   Federal     Rules   of   Civil
    Procedure completely describe the federal courts' power over civil
    procedure, displacing any inherent authority in this area.                    We
    cannot agree. As Judge Posner remarked concerning the relationship
    of inherent powers to positive law: "The motto of the Prussian
    stateSQthat everything which is not permitted is forbiddenSQis not
    a helpful guide."     United States v. Torres, 
    751 F.2d 875
    , 880 (7th
    Cir. 1984).      A long line of cases establishes that the Rules are
    not always the exclusive source of a federal court's powers in
    civil cases.     In Link v. Wabash, supra, the Supreme Court held that
    a district court has inherent power to dismiss a case sua sponte
    for failure to prosecute, even though Federal Rule 41(b) only
    provides for such dismissal on a defendant's motion.               82 S.Ct. at
    1388-89.    In Chambers v. NASCO, supra, the Court held that the
    inherent power to impose sanctions for bad-faith conduct during
    litigation was not displaced by, and went beyond, such sanctioning
    mechanisms as Rule 11 and 28 U.S.C. § 1927.   111 S.Ct. at 2134-36.
    Supportive cases can also be found among the decisions of the
    courts of appeals.   In G. Heileman Brewing Co. v. Joseph Oat Corp.,
    871 F.2d 648
    , 650-53 (7th Cir. 1989) (en banc), the court held that
    a district court has inherent power to order litigants to appear at
    a pre-trial settlement conference despite the fact that Rule 16(a)
    provides only that a court may direct a party's attorneys to attend
    such a conference.   The court stated:
         "[T]he Federal Rules of Civil Procedure do not completely
         describe and limit the power of the federal courts. . .
              "The   concept   that   district   courts  exercise
         procedural authority outside the explicit language of the
         rules of civil procedure is not frequently documented,
         but valid nevertheless. . . .
         . . .
         ". . . [T]he mere absence of language in       the federal
         rules specifically authorizing or describing   a particular
         judicial procedure should not, and does not,   give rise to
         a negative implication of prohibition." Id.    at 651, 652.
    For similar statements, see, e.g., Aoude v. Mobil Oil Corp., 
    892 F.2d 1115
    , 1119 (1st Cir. 1989); Landau & Cleary, Ltd. v. Hribar
    Trucking, Inc., 
    867 F.2d 996
    , 1002 (7th Cir. 1989); HMG Property
    Investors, Inc. v. Parque Indus. Rio Canas, Inc., 
    847 F.2d 908
    , 915
    (1st Cir. 1988); Black Panther Party v. Smith, 
    661 F.2d 1243
    , 1281
    & n.4 (D.C. Cir. 1981) (MacKinnon, J., concurring in part and
    dissenting in part), vacated as moot, 
    102 S. Ct. 3505
         There is an apparent tension between the cited cases and
    Societe Internationale Pour Participations Industrielles et
    Commerciales, S.A. v. Rogers, 
    78 S. Ct. 1087
     (1958). In Rogers, the
    district court dismissed a complaint for failure to comply with a
    discovery order and the court of appeals affirmed. The district
         We note, however, that although a court may have inherent
    power to do that which is not specifically provided for in the
    Rules, it may not do that which the Rules plainly forbid.   Congress
    has the power to abrogate a lower court's inherent authority,
    although it must adequately express its intent to do so.        See
    Chambers, 111 S.Ct. at 2134; Link, 82 S.Ct. at 1389.   Where such an
    expression has been made, a court "may not exercise its inherent
    authority in a manner inconsistent with rule or statute."        G.
    Heileman Brewing, 871 F.2d at 652.     "That is, where the rules
    directly mandate a specific procedure to the exclusion of others,
    inherent authority is proscribed."   Landau & Cleary, 867 F.2d at
    1002.   See also United States v. One 1987 BMW 325, 
    985 F.2d 655
    661 (1st Cir. 1993); Strandell v. Jackson County, 
    838 F.2d 884
    , 886
    (7th Cir. 1987).21
    court relied upon Rule 37(b) and its inherent power, and the court
    of appeals affirmed on the basis of Rule 41(b) and inherent power.
    The Supreme Court reversed. Writing for the Court, Justice Harlan
    held that "whether a court has power to dismiss a complaint because
    of noncompliance with a production order depends exclusively on
    Rule 37," adding that "[r]eliance upon Rule 41 . . . or upon
    'inherent power,' can only obscure [the] analysis." Id. at 1093.
    As we read Rogers, however, the real issue was whether Rule 37 or
    Rule 41 applied to dismissals for discovery abuse, not whether the
    Rules limit inherent power.     Indeed, just four years later the
    Court in Link, again per Justice Harlan, held that the inherent
    power to dismiss a case for want of prosecution is broader than
    Rule 41(b). No justice in Link suggested it was inconsistent with
    Rogers. See also Chambers, 111 S.Ct. at 2135 & n.14 (arguing that
    "the inherent power of a court can be invoked even if procedural
    rules exist which sanction the same conduct" and that Rogers "is
    not to the contrary").
         Even where the exercise of inherent power would not violate an
    applicable rule, a court is not required to use that power where a
    party has failed to avail himself of the devices contained in the
    Rules. See McGill v. Duckworth, 
    944 F.2d 344
    , 353-54 (7th Cir.
    1991), cert. denied, 
    112 S. Ct. 1265
         Here, the court's order was not in violation of the relevant
    rules because those rules, as was the case with Rule 41(b) in Link,
    contain only "permissive language."      Link, 82 S.Ct. at 1388.    Rule
    69(a) provides that post-judgment discovery "may" be obtained in
    the manner provided in the Rules.      Similarly, Rule 34(c) provides
    that a non-party "may" be compelled to produce documents per the
    terms of Rule 45.   In sum, Rule 69(a) and Rule 34(c) do not purport
    to define the sole means of obtaining post-judgment document
    discovery or production from a non-party.
         Having concluded that the Rules of Civil Procedure do not
    foreclose   the   possibility   that   the   court's   orders   might   be
    justified as an exercise of inherent power, we now turn to whether
    the court in fact had such power.       We first consider whether the
    order fell within the ambit of those inherent powers possessed by
    the courts to conduct discovery not recognized by rule or statute.
    In the civil22 context, for example, it has been held (or stated in
    dicta) that courts have inherent power to issue such discovery
    orders as are necessary for a court to determine and rule upon its
    own jurisdiction,23 to permit the taking and filing of post-trial
    depositions,24 to subpoena witnesses for indigent civil litigants
         Criminal courts, too, possess some inherent discovery power.
    See, e.g., United States v. Nobles, 
    95 S. Ct. 2160
    , 2166-67 (1975)
    (both prosecution and defense can be compelled to produce the
    previously recorded statements of its witnesses).
         See United States Catholic Conference v. Abortion Rights
    Mobilization, Inc., 
    108 S. Ct. 2268
    , 2272 (1988); United States v.
    27 S. Ct. 165
    , 166 (1906).
         See United States v. Altech, Inc., 
    929 F.2d 1089
    , 1091-92 (5th
    Cir. 1991).
    who cannot tender fees,25 to issue letters rogatory to foreign
    courts,26 and to order some forms of discovery in extradition,27
    forfeiture,28 and habeas corpus29 proceedings.30
         We decline today to add to this list a broad, general power to
    order non-parties beyond the forum district to produce documents.31
    "Because   inherent   powers    are   shielded     from    direct   democratic
    controls, they must be exercised with restraint and discretion."
    Roadway Express, 100 S.Ct. at 2463.          Accordingly, an argument for
    the existence of such a power must be grounded on more than mere
    judicial convenience.      We    have      said   that    the   inherent   power
         See Gibbs v. King, 
    779 F.2d 1040
    , 1046-47 (5th Cir.), cert.
    106 S. Ct. 1975
     (1986); Lloyd v. McKendree, 
    749 F.2d 705
    707 (11th Cir. 1985); Estep v. United States, 
    251 F.2d 579
    , 580
    (5th Cir. 1958).
         See In re Letter Rogatory, 
    523 F.2d 562
    , 563 (6th Cir. 1975);
    United States v. Reagan, 
    453 F.2d 165
    , 173 (6th Cir. 1971), cert.
    92 S. Ct. 2049
     (1972); United States v. Staples, 
    256 F.2d 290
    , 292 (9th Cir. 1958); 8 Wright & Miller, supra, § 2083, at 351.
         See Koskotas v. Roche, 
    931 F.2d 169
    , 175 (1st Cir. 1991);
    Quinn v. Robinson, 
    783 F.2d 776
    , 817 n.41 (9th Cir.), cert. denied,
    107 S. Ct. 271
     (1986); First Nat'l City Bank of New York v.
    287 F.2d 219
    , 226 (2d Cir. 1960), vacated as moot, 
    84 S. Ct. 144
     (1963). But see In re Extradition of Singh, 
    123 F.R.D. 108
    , 115-16 (D.N.J.1987).
         See United States v. Porcelli, 1992 U.S. Dist. Lexis 17928
    (E.D.N.Y. Nov. 5, 1992) (third-party petitioner in forfeiture
    proceeding may obtain discovery of documents from defendant-
         See Harris v. Nelson, 
    89 S. Ct. 1082
    , 1086 (1969) (court may
    compel answers to interrogatories in habeas proceedings).
         But see Miner v. Atlass, 
    80 S. Ct. 1300
    , 1303 (1960) (admiralty
    courts have no inherent power to allow the taking of depositions).
         Nor should our compilation of this list be construed as an
    endorsement of any of those decisions that we are not bound to
    "doctrine is rooted in the notion that a federal court, sitting in
    equity, possesses all of the common law equity tools of a Chancery
    Court (subject, of course, to congressional limitation) to process
    litigation to a just and equitable conclusion."      ITT Community
    Development Corp. v. Barton, 
    569 F.2d 1351
    , 1359 (5th Cir. 1978)
    (citing Ex parte Peterson, 
    40 S. Ct. 543
     (1920)).32        One such
    chancery tool was the bill of discovery, which has been called the
    forerunner of all modern discovery procedures.     See Hickman v.
    67 S. Ct. 385
    , 395 (1947) (Jackson, J., concurring). Potent
    as it was, however, the bill of discovery could not be used to
    obtain documents (or other discovery) from someone who was not a
    party. See 6 J. Wigmore, Evidence § 1859f, at 594-95 (J. Chadbourn
    rev. ed. 1976); id. § 1856d, at 562 & n.1 (citations); G. Ragland,
    Discovery Before Trial 16 (1932); Welling, Discovery of Nonparties'
    Tangible Things Under the Federal Rules of Civil Procedure, 59
    Notre Dame L.Rev. 110, 134 & n.125 (1983); Crew v. Saunders, 2 Str.
    1005 (1735). Thus, although federal courts are vested with certain
    inherent discovery powers owing to the equitable power of Chancery
         Several other courts have quoted this language with approval.
    See In re Villa Marina Yacht Harbor, Inc., 
    984 F.2d 546
    , 548 (1st
    Cir.), petition for cert. filed (May 24, 1993); Aoude, 892 F.2d at
    1119; In re San Juan DuPont Plaza Hotel Fire Litigation, 
    859 F.2d 1007
    , 1011 n.2 (1st Cir. 1988); HMG Property, 847 F.2d at 915; Eash
    v. Riggins Trucking Inc., 
    757 F.2d 557
    , 563 (3d Cir. 1985) (en
    banc).   Cf. Hall v. Cole, 
    93 S. Ct. 1943
    , 1946 (1973) (inherent
    power to award attorney's fees "'is part of the original authority
    of the chancellor to do equity in a particular situation'")
    (quoting Sprague v. Ticonic Nat'l Bank, 
    59 S. Ct. 777
    , 780 (1939)).
    courts to issue bills of discovery,33 we conclude that there is no
    broad, general inherent power to order a non-party beyond the
    district to produce documents.34
         However, here, as the district court noted, "Fox is not a
    third party," but was rather Crowson's attorney of record in this
    very case, as well as his agent and attorney in other respects.
    See also note 11 supra.   In these circumstances, we hold that Texas
    practice and the court's inherent powers combined to authorize the
    court to require Fox to turn over Crowson-related records, as
    specified in the June 15 Agreed Order.     Fox argues that the Agreed
    Order only "authorizes" third parties to turn over Crowson's
    documents, but does not require them to do so.      This was plainly
    not the plaintiffs' or the district court's understanding of the
    Agreed Order, as it applied to Fox.     Crowson himself had testified
    at the July 21, 1992, hearing that, following the entry of the
    Agreed Order, "I called Mr. Fox the very first thing, and I told
    Mr. Fox that, as far as I was concerned, he needed to release any
    files that he had."   In any event, the district court subsequently
         See McMullen Lumber Co. v. Strother, 
    136 F. 295
    , 301 (8th Cir.
    1905) ("That bills for discovery and relief inhered in the ancient
    jurisdiction of courts of chancery in England at the time of the
    adoption of the federal judiciary act is beyond question. This
    being so, the like jurisdiction inheres in the federal courts,
    unless abolished by statutes, changed or modified by some rule
    adopted by the Supreme Court.").
         A court might well have inherent power to order a party to
    produce pertinent documents. See Producers Releasing Corp. de Cuba
    v. PRC Pictures, Inc., 
    176 F.2d 93
    , 95 (2d Cir. 1949) ("[I]t seems
    very reasonable to suppose that a court has inherent power to
    compel a party to produce, without the issuance of a subpoena,
    documentary evidence within his control and known to be
    made fully clear to Fox at the March 15, 1993, hearing that he was
    required to turn over all of Crowson's records responsive to the
    Agreed Order.35    Moreover, we conclude that the combined authority
    of Texas Civil Practice & Remedies Code § 31.002 (note 4 supra) and
    Texas Rule 167(4) (note 19 supra) empowered the court to so order
    Fox, and that, as applied to Fox, after March 15, 1993, any failure
    to comply with all the procedural requirements of those provisions
    was not substantially prejudicial.
          These considerations, however, do not suffice to sustain the
    district court's order that Fox produce his personal tax returns.
    This order, unlike the requirement that Fox produce Crowson's
    records, had never been requested by any of the parties and was
    ordered by the district court entirely sua sponte.              For this
    reason, it is not within Texas Rule 167(4).       Fox's own tax returns
    are not sufficiently related to his dealings with Crowson and thus,
    for the purposes of an order for their discovery, Fox would stand
    in the shoes of a non-party.       The order is therefore not within
    section 31.002, which applies only to the debtor's property and
          The district court may have ordered Fox to produce his tax
    returns as a sanction for refusing to comply with discovery orders.
    If possible and within reason, we will construe the district
    court's actions in a favorable (that is to say permissible) light.
    We   review   a   court's   imposition   of   sanctions   for   abuse   of
         Additionally, the court's July 14, 1992, turnover order (see
    note 4 supra) clearly required Fox to turn over Crowson's records
    (as did the July 21, 1992, order; see note 5 supra).
    discretion.    Chambers v. NASCO, Inc., 
    111 S. Ct. 2123
    , 2138 (1991).
         A review of the record persuades us that Fox's evasiveness and
    intransigence justified sanctions.    The district judge found that
    Fox had disobeyed three separate turnover orders, two of which were
    entered before the March 15, 1993, order to Fox to produce his
    personal tax returns.     The March 15, 1993, and April 13, 1993,
    hearings were noticed so as to include sanctions for failure to
    comply with the prior orders, including the Agreed Order of June
    15, 1992.     As previously noted, at least by the March 15, 1993,
    hearing, it was made plain to Fox by the court that the Agreed
    Order required him to turn over Crowson's records.     At the April
    13, 1993, hearing, Fox admitted that he still had not done this.
    Fox's failure to produce Crowson's records was a violation of the
    court's orders and of his duties as Crowson's attorney.       Fox's
    motion to withdraw as counsel, filed on April 12, 1993, the day
    before he was held in contempt, has not been granted by the court
    below and is too little too late.36   Fox remains an officer of the
    court until he is discharged or the litigation comes to an end.   It
    is clear that the district court was justified in concluding that
    Fox had been evasive37 and that, without some sanction, he could not
    be relied on to produce all the records of his extensive financial
    relationship with Crowson.     Based on Fox's status as Crowson's
         As also was his April 13 offer to produce Crowson's records.
         Fox claimed he did not understand the Agreed Order to refer to
    records such as deeds and the like, although it obviously did (see
    note 3, supra). The district court was also obviously concerned
    about Fox's having purportedly forgotten about certain of his
    transactions with Crowson.
    agent, as well as the unique position he occupied as Crowson's
    attorney, the trial court had reasonable grounds to sanction Fox
    for his failure to comply with the post-judgment discovery and
    turnover orders related to the Crowson documents and assets.
          When parties or their attorneys engage in bad faith conduct,
    a court should ordinarily rely on the Federal Rules as the basis
    for sanctions.   Chambers, 111 S.Ct. at 2136.       The Federal Rules do
    not explicitly provide an avenue to sanction attorneys who fail to
    comply with discovery orders. Rule 37(b)(2) is clearly directed to
    party failure to obey discovery orders, not attorney failure,
    although the attorney is subject to sanctions for obstructive
    advice.38    There is, however, no finding of such advice by Fox.
    Furthermore, Fox had signed no objectionable court papers or
    discovery objections that might give rise to Rule 11 or Rule 26(g)
    sanctions.    We find no sanction under the Federal Rules directly
    applicable to Fox's misconduct.
          It was therefore proper for the district judge to resort to
    his   inherent   powers   to   discipline   Fox's    intransigence   and
    complicity in his client's scandalous behavior. The inherent power
    to sanction bad faith conduct must extend to reach individuals and
    conduct not directly addressed by other mechanisms.       Chambers, 111
    S.Ct. at 2134.    Although it is unclear whether the inherent power
         "[T]he court shall require the party failing to obey the
    [discovery] order or the attorney advising that party or both to
    pay the reasonable expenses, including attorney's fees, caused by
    the failure, unless the court finds that the failure was
    substantially justified or that other circumstances make an award
    of expenses unjust." Fed. R. Civ. P. 37(b)(2).
    to sanction discovery abuses extends to abuses committed by non-
    parties,39 there is no doubt that this power may be applied to
    attorneys in the case.    "The inherent power of a court to manage
    its affairs necessarily includes the authority to impose reasonable
    and appropriate sanctions upon errant lawyers practicing before
    it."   Flaksa v. Little River Marine Constr. Co., 
    389 F.2d 885
    , 888
    n.10 (5th Cir.), cert. denied, 
    88 S. Ct. 2287
     (1968), cited with
    approval in Roadway Express, 100 S.Ct. at 2464 n.12; see also
    Roadway Express, 100 S.Ct. at 2464 ("The power of a court over
    members of its bar is at least as great as its authority over
           Although it was proper to invoke inherent powers to sanction
    Fox, the district judge abused his discretion by ordering Fox to
    produce his personal tax returns and schedules.   See Chambers, 111
    S.Ct. at 2132 (because of their potency, inherent powers must be
    exercised with restraint and discretion).   Income tax returns are
    highly sensitive documents; courts are reluctant to order their
         We have found no cases sanctioning non-parties for abusing the
    discovery process. In In re Rainbow Magazine, Inc., 
    136 B.R. 545
    553 (Bankr. 9th Cir. 1992), the court reversed the lower court's
    assessment of attorney's fees against a non-party because it had
    "uncovered no cases imposing sanctions against a non-party under
    th[e bad-faith] exception to the American Rule." In Pennwalt Corp.
    v. Durand-Wayland, Inc., 
    708 F.2d 492
    , 494-95 (9th Cir. 1983), the
    court seemed to accept that attorney's fees could be assessed
    against a non-party but reversed a lower court order doing so for
    failure to find bad faith on the part of the non-party. Finally,
    in Parkway Gallery Furniture, Inc. v. Kittinger/Pennsylvania House
    Group, Inc., 
    121 F.R.D. 264
     (M.D.N.C. 1988), although the court
    stated that "[t]he Court also has inherent power to impose
    sanctions on parties, non-parties or attorneys who violate
    discovery orders," id. at 267, the sanctions were being sought
    against a party, not a non-party, and were ultimately denied.
    routine disclosure as a part of discovery. SEC v. Cymaticolor, 
    106 F.R.D. 545
    , 547 (S.D.N.Y. 1985) (disclosure of tax returns for
    purposes of discovery ordinarily demands that the requesting party
    demonstrate relevancy and compelling need).       Not only are the
    taxpayer's privacy concerns at stake, but unanticipated disclosure
    also threatens the effective administration of our federal tax laws
    given the self-reporting, self-assessing character of the income
    tax system.    Commodity Futures Trading Commission v. Collins, 
    62 U.S.L.W. 2059
    , 2060 (7th Cir. July 7, 1993).
         The intrusive nature of the sanction is compounded by its
    novelty.   Although novel sanctions are not objectionable per se,
    they are subject to close examination on review simply because
    their reasonableness has not been demonstrated.
         Several factors contribute to the order's unreasonableness.
    The district judge ordered Fox to produce his tax returns sua
    sponte.    The judgment creditors had never included them in their
    discovery requests, a fact that suggests that the returns were
    believed inaccessible or irrelevant for the creditors' purposes.
    No evidence came to light in the sanction hearings that proved the
    particular usefulness of Fox's tax returns to indicate Crowson's
    financial position.    The court engaged in a fishing expedition.
    Fox could not have anticipated that his conduct would result in
    such a sanction.
         Further, the judge's order neither provided Fox with the
    opportunity to expunge sensitive or irrelevant portions of his
    returns before exposing them to opposing counsel, nor did it permit
    a review of the record in camera to protect their privacy.                Even
    with such protections, however, a sanction that penalizes errant
    lawyers by demanding their personal tax returns risks untoward
    consequences.     The threat of sanctions in the form of forced
    disgorgement     of    private   information     subjects     uncooperative
    attorneys to judicial bludgeoning and humiliation above and beyond
    the consequences of a monetary order or an order directly related
    to the court proceedings.
         The ultimate touchstone of inherent powers is necessity.
    Given the post-judgment posture of this case, the scandalous
    behavior of     Crowson,   and   the   evident   complicity   of   Fox,    his
    attorney, in the case, we concur that sanctions should have been
    imposed on Fox.       Necessity did not, however, compel a sua sponte
    order to produce Fox's personal tax returns. Traditional sanctions
    SQperhaps a monetary penalty that increased each day for Fox's
    noncompliance with the other post-judgment discovery ordersSQwould
    have accomplished the court's purpose more properly.40
         For these reasons, the portion of the district court's order
    of March 15, 1993, directing Fox to turn over his personal tax
    returns (and the schedules thereto) for the years 1984 to the
    present is reversed, and, likewise, so much of the Civil Contempt
         Fox challenges the court's order as based upon impermissible
    ex parte communications.    Fox was held in contempt only after
    receiving notice and two hearings on the record. At both hearings,
    Fox gave testimony and was represented by counsel. Fox received
    due process. Cf. Holcomb v. Allis-Chalmers Corp., 
    774 F.2d 398
    401 (10th Cir. 1985).
    Judgment signed April 14, 1993, as finds Fox in contempt for
    failing to turn over his said personal tax returns (and schedules),
    and as imposes confinement or other coercion until he does so, is
    also reversed.    We find no fault with the balance of the March 15,
    1993, order.     We remand the balance of the April 14, 1993, Civil
    Contempt Judgment for reconsideration in light of our ruling as to
    Fox's personal tax returns.41
                                           REVERSED in part and REMANDED
         Nothing in this opinion precludes sanctions against Fox (other
    than for his failure to produce his personal tax returns); nor is
    resort to subpoena from the appropriate United States District
    Court in Mississippi precluded.