have intentionally avoided service of the Show Cause Order, knowing that the SEC had applied for such an order on August 26, 1975.
CONCLUSIONS OF LAW
The Court need not decide at this time whether the Marshal's attempts to serve the Order to Show Cause on VTR and Jordan amounted to adequate service, for the SEC's motion for an order adjudging VTR and Jordan in contempt provides a sufficient basis for issuance of such an order even without prior service of a show cause order. This conclusion rests on Rule 7(b)(1), Federal Rules of Civil Procedure, which provides that "An application to the Court for an order shall be by motion . . . ." Courts have consistently interpreted this rule as permitting motions and notices thereof to substitute for orders to show cause once the court has acquired in personam jurisdiction over the person to whom the motion is addressed.
If a motion is appropriate, service by mail on the party or the attorney of record is all that the Federal Rules require.
Service by mail is complete upon mailing.
Service of the motion by mail on VTR and its attorney of record was clearly proper. In the Final Judgment of Permanent Injunction, this Court expressly retained jurisdiction over VTR and this lawsuit. Accordingly, by mailing the motion for an order adjudging VTR in contempt to VTR at its principal offices and to VTR's attorney of record, the SEC effectuated valid service on VTR.
Moreover, as established by the affidavit of Mr. Phil Gross, VTR, through its president, received actual notice of the motion. The fact that VTR may not have received actual notice of the date of the hearing does not suggest that the requirements of due process were not satisfied, for VTR could itself have requested a date convenient to it for the hearing or could at least have filed a response to the SEC's motion which put it on notice that action was sought. VTR's failure to avail itself of these opportunities does not alter the fact that it received "suitable notice and adequate opportunity to appear and be heard,"
which is all that due process requires.
Accordingly, the Court finds that VTR's failures to comply with the Permanent Injunction issued in 1973 amount to civil contempt of that Injunction.
As to Mr. Jordan, the fact that he was not named as a codefendant in the case against VTR clouds the issue of his susceptibility to a judgment of contempt. It might be argued that the Court never obtained in personam jurisdiction over Jordan and for this reason cannot hold Jordan in contempt unless he has been properly served with an order to show cause.
The Court recognizes that the preferable practice would have been for the SEC either to sue Mr. Jordan and VTR initially,
or to obtain service of the order to show cause on Mr. Jordan. However, on facts similar to those of this case, the Second Circuit in National Labor Relations Board v. Hopwood Retinning Co.,10 held the president of the defendant company in contempt even though the president had apparently not been named in the original NLRB proceeding or the enforcement action in federal court.
As in this case, the Court's order in the initial enforcement proceeding had run to the company, "its officers, agents, [etc.]."
Moreover, the contempt proceedings had been initiated by motion served on the corporate defendant's attorney of record.
The Court held that the contempt proceeding against the company was a proper means of enforcing the prior judgment.
Although the corporate president in Hopwood demonstrated by filing papers in opposition to the contempt motion that he had actual notice thereof, Mr. Gross' affidavit also indicates in this case that Mr. Jordan had actual notice of this motion.
Mr. Jordan has at all times been on notice of the Permanent Injunction entered by this Court in 1973. That Injunction was issued pursuant to a consent to judgment that was signed by Mr. Jordan himself. As president of VTR, Jordan is and has been an officer of VTR and therefore subject to the terms of the Final Injunction. The mailing of the motion for judgment of contempt to the attention of Mr. Jordan at his office address and to VTR's counsel of record constituted adequate service for purposes of this motion. Since Mr. Jordan received actual notice of these proceedings, the requirements of due process have been met. Accordingly, Mr. Jordan will be held in contempt of the Final Injunction.
A further hearing will be scheduled in order to determine the sanctions to be imposed.
Oliver Gasch / Judge
Date: October 22, 1975
Upon consideration of the record herein and the plaintiff's motion for an order adjudging VTR, Inc., and David E. Jordan, VTR's president, in contempt of the Permanent Injunction issued in this case in 1973, and for the reasons set forth in the attached Findings of Fact and Conclusions of Law, it is by the Court this 22nd day of October, 1975,
DECREED, DECLARED and ADJUDGED, pursuant to 18 U.S.C. § 401, that VTR, Inc., and David E. Jordan are in civil contempt of this Court's Final Judgment of Permanent Injunction, filed April 19, 1973.
A further hearing is hereby scheduled for OCTOBER 31, 1975, at 2:00 P.M., in Courtroom 21 of this Court, at which the Court will determine the sanctions to be imposed on the contemnors. VTR, Inc., David E. Jordan, and the SEC are hereby directed to appear at that hearing.
The Clerk of this Court is hereby ordered to serve this ORDER and the attached FINDINGS OF FACT and CONCLUSIONS OF LAW by certified mail, return receipt requested, on VTR, Inc., One Lincoln Plaza, New York, New York 10023, and, by separate cover, on Mr. David E. Jordan, President, VTR, Inc., at the same address. The Clerk is also ordered hereby to serve this ORDER and FINDINGS OF FACT and CONCLUSIONS OF LAW by United States Marshal on VTR, Inc., and David E. Jordan at the aforesaid address, and by mail on William J. Davis, Esq., Schulman, Gasarch & Scheichet, 90 Broad Street, New York, New York 10004.
Oliver Gasch, Judge