S.E.C. v. BILZERIAN
729 F.Supp.2d 9 (2010)
United States District Court, District of Columbia.
November 1, 2010.
Mem. Op., 613 F.Supp.2d at 73-74. With regard to Robert Bleakley, this Court went on to state that:
Even if Bleakley was in contempt of this Court's order, the request for an order holding him in contempt is now moot. Bleakley represented Puma, Bicoastal, and OHLP in the Puma Case for 13 months. (Bleakley's Response  at 2.) However, Bleakley no longer represents any family member of Bilzerian or any entity controlled by a family member of Bilzerian as he withdrew from the Puma case in June 2008.
Id. at 76. Hammer argues that "[j]ust as Jack Rabbit limo Service, Inc. and Robert Bleakley were no longer in violation of this Court's orders on May 11, 2009, Hammer was no longer in violation of this Court's orders on July 13, 2010. Therefore, the Contempt Order and Contempt Memorandum Opinion should be vacated with respect to Hammer." First Mot. to Vacate 5, August 9, 2010, ECF No. 1099. This argument fails for several reasons.
First, the reasoning this Court applied in its refusal to hold Robert Bleakley in contempt does not apply to Hammer. For a court's injunction to bind a person, that person must have actual notice of the order. Fed.R.Civ.P. 65(d)(2). Moreover, this Court's 2001 Order independently states that it only binds those who have actual notice of it. Order 2, July 19, 2001, ECF No. 416. As this Court pointed out in its May 11, 2009, Memorandum Opinion, Bleakley did not have actual notice of the Court's 2001 Order at the time of his involvement in violative litigation. Mem. Op., 613 F.Supp.2d at 76-77. By the time he did receive notice of the Order on July 3, 2008, he had already withdrawn from the violative litigation. Id. Unlike Bleakley, Hammer clearly had actual notice of the 2001 Order. The fact that this Court has held Hammer in contempt for violating the same Order before is proof enough of that. Id. at 72-74. Because Hammer had notice of the Court's 2001 order and Bleakley did not, the Court's reasoning regarding Bleakley does not apply to Hammer.
The Court now turns to Hammer's argument regarding Jack Rabbit Limo Services, Inc. ("Jack Rabbit"). Although Jack Rabbit had actual notice of the 2001 Order, the Court is still not persuaded that its reasoning there applies to Hammer. As will be explained below, while holding Jack Rabbit in contempt could serve no coercive purpose, holding Hammer in contempt here serves a coercive purpose of primary importance.
Jack Rabbit was nothing more than a disguise Bilzerian and Hammer assumed in their ongoing mission to disrupt the judicial process. In a written opinion disposing of the Jack Rabbit litigation, Judge Cook stated that Jack Rabbit was Bilzerian's company and that Hammer represented him in litigation. See Docket 9, ECF No. 951. This Court had already held Bilzerian and Hammer—apart from their Jack Rabbit facade—in contempt in the same Order. Order 1-2, May 11, 2009, ECF No. 986. Thus, holding Jack Rabbit in contempt when it was really just a thinly veiled front for Bilzerian and Hammer, could serve no further coercive purpose.
Holding Hammer in civil contempt here, on the other hand, serves a coercive purpose of primary importance. The Court's 2001 Order was not aimed at stopping any single lawsuit. Rather, it was meant to put an end to Bilzerian, Hammer, and others' persistent and determined efforts to gum up the judicial works in this case by filing one frivolous lawsuit after another designed to thwart the receivership's progress. Their relative success in that endeavor explains—in large part—why this litigation has plodded along at a snail's
pace for more than two decades. If this Court were to vacate its Contempt Order against Hammer now, its 2001 Order would become a dead letter. Hammer's actions here would become the blueprint for continued foot-dragging. Hammer, Bilzerian, and their cohorts would file the same frivolous lawsuits again and again and wait for a show cause order. If one never comes, they have succeeded. If, on the other hand, they do receive a show cause order, they simply withdraw from the lawsuit in question before the Court is able to draft a contempt order. In this way, they thread the needle; they continue to stall the judicial process in this litigation by violating the 2001 order, but they avoid the contempt their actions merit. Such shell games will not defeat this Court's clear and unambiguous orders. This Court ordered Hammer not to pursue any lawsuits without its permission. Its Order was clear and unambiguous. Hammer had actual notice of the Order—he was even held in contempt of it once before. He blatantly violated it again. And he was rightly held in contempt for that violation.3