Reply Memorandum by Michael Lauer to Response to Motion to Strike

Apr 28 2006 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA CASE NO. 03-80612-CIV-MARRA SECURITIES AND EXCHANGE COMMISSION, Plaintiff, vs. MICHAEL LAUER, LANCER MANAGEMENT GROUP, L.L.C. and LANCER MANAGEMENT GROUP II, L.L.C., Defendants and LANCER OFFSHORE, INC., LANCER PARTNERS, L.P., OMNIFUND, LTD., LSPV, INC. AND LSPC, LLC, Relief Defendants. ___________________________________________/ DEFENDANT MICHAEL LAUER’S REPLY MEMORANDUM IN SUPPORT OF MOTION TO STRIKE PLAINTIFF SECURITIES AND EXCHANGE COMMISSION’S LIMITED JOINDER TO RECEIVER’S (I) MOTION TO COMPEL MICHAEL LAUER, HEIDI CARENS, AND JUDITH BRISMAN TO TURN OVER PAST DISTRIBUTIONS FROM MILLENNIUM 3 OPPORTUNITY FUND LLC; AND (II) MOTION TO DIRECT MILLENNIUM 3 OPPORTUNITY FUND LLC TO DISTRIBUTE TO RECEIVER ALL FUTURE DISTRIBUTIONS DUE MICHAEL LAUER Defendant Michael Lauer (“Lauer” or the “Defendant”), by and through his undersigned counsel, hereby files this reply memorandum in further support of his motion to strike Plaintiff Securities and Exchange Commission’s limited joinder (the “SEC’s Joinder” to the Receiver’s motions to (1) compel Lauer, Heidi Carens, and Judith Brisman to turn over past distributions from Millennium 3 Opportunity Fund LLC (“Millennium”); and (2) to direct Millennium to distribute to 1 of 11 1412/gp the Receiver all future distributions due Lauer and states as follows: 1. To the Extent that the SEC’s “Joinder” Goes Beyond Merely Expressing an Intent to Join in the Receiver’s Motion and Contains Additional Substantive Arguments, It Must Be Stricken. It is patently improper for the SEC to file a brief designated a “joinder” of the Receiver’s motion and then for the SEC to make substantive arguments in that brief relating to the motion at issue. A “joinder” in motion ought to state only that the party is joining another’s motion and must not contain further or additional substantive argument. See, e.g., Liveops, Inc. v. Teleo, Inc., 2006 WL 83058 at n.2 (N.D. Cal. January 9, 2006) (attached hereto as Exhibit A) (Court struck substantive portion of defendant’s “joinder” in another defendant’s motion to dismiss finding that it was “not a true joinder in motion,” as it contained additional substantive arguments and did not conform with the notice and timing requirements of local rules). If the SEC chooses to submit further substantive argument relating to the Court’s prior ruling relating to the Millennium dividends, then it should file its own motion for relief rather than attempt to ride the coattails of the Receiver’s motion.1 1The SEC contends that Lauer suffers no prejudice from its “joinder” and that “the SEC expressly told Lauer that it would not object to Lauer making a substantive response to the SEC’s Limited Joinder . .” SEC’s Response [DE 1389] at 3. But after fully briefing the Receiver’s motion, there is no reason that Lauer should be put to the expense and burden of still further briefing simply because the SEC has elected to file an improper “joinder” in that motion that requires a further substantive response. Given Lauer’s lack of access to funds — directly attributable to the SEC’s efforts to freeze all of his funds indefinitely — Lauer is suffering substantial prejudice as a result of the SEC’s and the Receiver’s repeated efforts to force him to defend duplicative litigation and motions. 2 2 of 11 2. There Is No “Law of the Case” Establishing that the SEC’s “Joinder” Is Proper The SEC contends that “the law of this case is that joinders have been allowed” and argues that “twelve other joinders have been filed and accepted by this Court.” SEC’s Response [DE 1389] at 2. While the SEC does not offer any discussion as to whether those other “joinders” contained improper substantive argument similar to that presented by the SEC in its “joinder” to the Receiver’s motion, there is no “law of the case” establishing any right by the SEC to submit a plainly improper “joinder” to motions filed by the Receiver. Further, the SEC’s response demonstrates a fundamental misunderstanding of the “law of the case” doctrine. Under the “law of the case” doctrine, “the findings of fact and conclusions of law by an appellate court are generally binding in all subsequent proceedings in the same case in the trial court or on a later appeal.” This That and The Other Gift and Tobacco, Inc. v. Cobb County, 439 F.3d 1275, 1283 (11th Cir. 2006). See also Schiavo ex rel. Schindler v. Schiavo, 403 F.3d 1289, 1291 (11th Cir. 2005) (law of the case doctrine “operates to preclude courts from revisiting issues that were decided explicitly or by necessary implication in a prior appeal”). Thus, the “law of the case” doctrine is simply inapplicable to the issue of whether the SEC’s “joinder” is proper in the present circumstances because there has been no prior appellate decision in this case that either explicitly or implicitly resolved the question. Furthermore, simply because the Court has permitted “joinder” to motions in the past — when there has been no objection to such joinder — does not constitute authority for the continuation of that practice when timely objection is made to a patently improper “joinder” filed by the SEC. 3 3 of 11 CONCLUSION The SEC’s “joinder” in the Receiver’s motion relating to the Millennium dividends should be stricken because it improperly contains substantive argument and fails to comply with local rules governing the filing of briefs relating to motions. Dated: April 28, 2006 Respectfully submitted, Boca Raton, Florida s/ Carl F. Schoeppl, Esq. Carl F. Schoeppl, Trial Counsel Florida Bar No. 818518 Counsel for Defendant Michael Lauer SCHOEPPL & BURKE, P.A. 4651 North Federal Highway Boca Raton, Florida 33431-5133 Telephone: (561) 394-8301 Facsimile: (561) 394-3121 E-Mail: [email protected] 4 4 of 11 CERTIFICATE OF SERVICE I HEREBY CERTIFY that on April 28, 2006, I electronically filed the foregoing with the Clerk of the Court by using the CM/ECF system which will send a notice of electronic filing to the following: Christopher Martin, Esq., counsel for the United States Securities and Exchange Commission, and Jeffrey Bast, Esq., Hunton & Williams LLP, counsel for the Receiver, and I further certify that a true and correct copy of the foregoing was served in the manner provided upon the persons listed below on this 28th day of April, 2006. s/ Carl F. Schoeppl, Esq. Carl F. Schoeppl. Esq. Counsel for Defendant Michael Lauer Method of Name, Address, Telephone, and Party Service Facsimile of Party’s Counsel Securities and Exchange United States Mail Christopher Martin, Esq. Commission Senior Trial Counsel Securities and Exchange Commission 801 Brickell Avenue, Suite 1800 Miami, FL 33131 Telephone: (305) 982-6386 Facsimile: (305) 536-4154 Marty Steinberg, United States Mail Jeffrey Bast, Esq. Receiver, Hunton & Williams LLP Plaintiff 1111 Brickell Avenue, Suite 2500 Miami, Florida 33131 Telephone: (305) 810-2500 Facsimile: (305) 810-2460 F:\Lauer-SEC\Pleadings\ReplyMotiontoStrikeSECResponsereMilleniumDividends.04.09.06.wpd 5 5 of 11 6 of 11 7 of 11 8 of 11 9 of 11 10 of 11 11 of 11.

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