S.E.C. v. Stewart

Background

The Securities and Exchange Commission brought the underlying case against Allen B. Gottlieb and others in 1998. In 2003, the court entered judgment against Gottlieb requiring disgorgement and other payments. The judgment became final after the Court of Appeals affirmed it and the Supreme Court denied review.

Gottlieb later filed a separate action, No. 05 Civ. 2401, challenging the underlying judgment. The court treated that filing as a request for relief from the judgment under Federal Rule of Civil Procedure 60(b), denied the request, and terminated that case. The Court of Appeals affirmed, and the Supreme Court denied review.

In 2010, after additional motions seeking reconsideration, the court barred Gottlieb from filing papers in either case because of his repeated and disjointed filings. The Court of Appeals affirmed that restriction, and the Supreme Court denied review. The court later denied further requests to lift or reconsider the filing bar.

In 2021, the SEC sought to hold Gottlieb in civil contempt for violating the 2003 judgment. The court granted that request at a hearing and later entered an order memorializing the contempt ruling. Gottlieb then filed multiple notices, motions, supplements, and responses concerning the contempt order and his request for relief from it. The court denied those requests. In March 2022, after another filing seeking permission to submit additional papers, the court ordered Gottlieb to explain why it should not bar him from filing further papers except those directed to the Court of Appeals.

Court’s reasoning

The court applied the All Writs Act, a federal law that allows courts to issue orders necessary to protect their proceedings. Courts considering filing restrictions examine the litigant’s history of litigation, motive, representation by counsel, burdens imposed on other parties and the court, and whether lesser sanctions would be adequate.

The court found that Gottlieb’s responses to the show-cause order repeated complaints and legal theories that had already been rejected. It characterized his papers as vexatious, harassing, and duplicative. Because his arguments had been rejected many times, the court found that he did not have an objective good-faith expectation of prevailing. It also found that his filings caused needless expense to the SEC and unreasonable burdens on the court and its personnel.

The court recognized that Gottlieb was proceeding without a lawyer, but stated that he was a trained lawyer and that his status did not excuse the repetitive filings. The court concluded that no sanction other than a filing bar would deter the continued filings and protect the court’s docket, time, and resources.

Disposition

Judge Loretta A. Preska barred Gottlieb from filing any further papers in No. 05 Civ. 2401 and No. 98 Civ. 2636 unless the papers were expressly ordered by the court or addressed to the Court of Appeals. The clerk was directed to mail a copy of the order to Gottlieb. This order addressed filing restrictions rather than the merits of the underlying SEC claims or the contempt dispute.