High Court Lets Stand $1-Million Fine


The Supreme Court on Monday let stand a $1-million fine against a left-wing law firm, its lawyers and two journalists who filed a lawsuit alleging a broad conspiracy by U.S. government agents to cause them injury in Nicaragua.

Three days before the case was to go to trial in 1988, a federal judge in Miami threw out the lawsuit, concluding that it was based on a “deceptive” affidavit and “fabricated testimony.”

Disturbed by what he considered to be fraud by the Christic Institute and its chief lawyer, Judge James L. King imposed the $1.05-million fine so that the defendants could recoup costs incurred in rebutting the allegations.

A federal appeals court in Atlanta affirmed that judgment, and the high court Monday refused to hear a further appeal in the case (Christic Institute vs. Hull 91-617).


The fine was imposed on the institute, a nonprofit law firm, as well as on its general counsel, Daniel Sheehan, and journalists Tony Avirgan and Martha Honey, who is Avirgan’s wife. The appeals court said that the two journalists were “willful participants” in a litigation strategy that deceived the judge and prolonged the case.

On May 30, 1984, Avirgan was at a press conference in La Penca, Nicaragua, when a bomb exploded near Nicaraguan Contra leader Eden Pastora. After his injury in the explosion, Avirgan and his wife decided to investigate the bombing to find who was responsible for the attack.

Their lawsuit--seeking compensation for Avirgan’s injuries--alleged a conspiracy by CIA operatives, U.S. military personnel, Columbian drug lords and Central American arms merchants, all of whom it said were working together to overthrow the leftist Sandinista government of Nicaragua.

Sheehan filed an affidavit with the Miami judge hinting that the Christic Institute had specific evidence to support its claim that the defendants conspired to set off the explosion to assassinate Pastora.


It named an array of figures linked to the Iran-Contra scandal, including retired Air Force Maj. Gen. Richard V. Secord, arms merchant Albert A. Hakim, Contra leader Adolfo Calero and former CIA official Thomas G. Clines.

But the defendants contended that the Christic Institute had used the lawsuit as a means of raising money.

Both Judge King and the Atlanta-based appeals court concluded that the lawsuit was not only baseless but that “Sheehan could not have reasonably believed at the time of the filing of the complaint . . . that (it) was well-grounded in fact.”

Meanwhile, in other action, the court refused to hear an appeal by a small, Washington-based computer software company that contended it was driven into bankruptcy by the Justice Department (INSLAW vs. U.S. 91-591). But the case involving INSLAW Inc. is not over. Atty. Gen. William P. Barr recently appointed a retired federal judge to look into allegations that officials of the Ronald Reagan Administration conspired to steal INSLAW’s computer software system for tracking criminal cases.

A bankruptcy judge had ruled that INSLAW was due $7.8 million from the government; but a federal appeals court ruled last year that the bankruptcy judge had no jurisdiction to hear the complaint.