UNITED STATES DISTRICT COURT 

EASTERN DISTRICT OF MICHIGAN 

SOUTHERN DIVISION 

 

U.S. SECURITIES AND EXCHANGE 

COMMISSION, 

 Plaintiff, 

 v. 

JOHN J. BRAVATA, RICHARD J. 

TRABULSY, ANTONIO BRAVATA, BBC 

EQUITIES, LLC and BRAVATA 

FINANCIAL GROUP, LLC, 

 Defendants, 

 and 

SHARI A. BRAVATA, 

 Relief Defendant. 

____________________________________/ 

 

 

CIVIL ACTION No. 2:09-cv-12950 

Hon. David M. Lawson 

Hon. Magistrate Judge Virginia M. Morgan 

PLAINTIFF U.S. SECURITIES AND EXCHANGE COMMISSION’S 

REPLY IN SUPPORT OF ITS MOTION FOR PROTECTIVE ORDER TO PRECLUDE 

BRAVATA DEFENDANTS FROM CALLING PLAINTIFF’S TRIAL COUNSEL AS 

WITNESS AT PRELIMINARY INJUNCTION HEARING AND FOR OTHER RELIEF 

 On September 15, 2009, the SEC filed the present motion to preclude the Bravata 

Defendants from calling SEC attorney Benjamin Hanauer as a witness at the preliminary 

injunction hearing now scheduled for October 21. (Docket No. 65). The SEC’s motion is 

grounded on the bedrock principle that opposing counsel should not be compelled to testify in 

the absence of extraordinary circumstances, which simply are not present in this case. 

Before calling Mr. Hanauer to testify, the Bravata Defendants must establish: (1) that 

no other means exist to obtain the information elicited from such testimony; (2) that the 

information sought is relevant and not privileged; and (3) that the information is crucial to the 

preliminary injunction hearing. Nationwide Mut. Ins. Co. v. Home Ins. Co., 278 F.3d 621, 628 

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(6th Cir. 2001) (affirming denial of attempts to depose arbitration panel); Iron Workers Local 

No.25 Pension Fund v. Watson Wyatt & Co., No. 04-40243, 2006 WL 1156723 (E.D. Mich. 

May 1, 2006) (affirming magistrate judge’s denial of motion to compel deposition of counsel). 

The Bravata Defendants have failed to establish any of these factors. First, Mr. 

Hanauer’s testimony is not necessary as to his interviews with several investors of BBC 

Equities, LLC (“BBC Equities”), because other witnesses are available to provide testimony 

regarding the circumstances of these interviews, such as the interviewees themselves and Ms. 

Luz Aguilar, an SEC Accountant. Ms. Aguilar participated in these interviews, along with Mr. 

Hanauer, and will be testifying at the evidentiary hearing and will be available to be crossexamined by opposing counsel. Second, the Bravata Defendants’ repeated claims that the 

information that they seek from Mr. Hanauer is not privileged does not make it so. Rather, they 

acknowledge in the memorandum in opposition that what they seek from Mr. Hanauer 

constitutes his attorney work product. Exhibit A to their filing states that the Bravata 

Defendants will seek to elicit from Mr. Hanauer information regarding his “knowledge of the 

events, discussions, and procedures.” (Docket No. 76-2, p. 3). Such information specifically 

falls within the purview of Mr. Hanauer’s impressions and strategies as one of the attorneys for 

the SEC and must be protected pursuant to the attorney work product doctrine. 

Lastly, Mr. Hanauer’s testimony is not crucial to the preliminary injunction hearing. 

The Bravata Defendants have focused their argument that Mr. Hanauer’s testimony is 

necessary because of its relevance to the issue of whether the TRO/Asset Freeze entered at the 

outset of this case was “improvidently granted” based on its purported ex parte nature and other 

alleged conduct by the SEC in filing this lawsuit and requesting the TRO/Asst Freeze, among 

other reasons. (Docket No. 76 at 4-5). 

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The Bravata Defendants’ present challenge to the propriety of the TRO/Asset Freeze is 

not new, as they raised the issue with the Court in no less than four previous filings. (See 

Docket Nos. 42, 45, 52, 70). The Bravata Defendants’ most detailed objection to the validity of 

the TRO/Asset Freeze is outlined John Bravata’s response to the Order to Show Cause (Docket 

No. 70), which devotes over 10 pages to arguing that John Bravata should not be held in 

contempt because of the SEC’s alleged impropriety in obtaining the TRO/Asset Freeze. 

 On October 1, 2009, the Court heard oral argument on the Show Cause Order. At that 

hearing, counsel for the Bravata Defendants made this concession regarding the TRO/Asset 

Freeze: “There is no question there is a valid order.” (See Ex. A, attached hereto, p. 1, lines 12-

13). On October 5, 2009, the Court issued an Order of Contempt, finding that John Bravata 

“willfully violated” the TRO/Asset Freeze. (Docket No. 82). In that Order, the Court squarely 

rejected the Bravata Defendants’ objection to the validity of the TRO/Asset Freeze, holding 

that their “challenge to the validity of the orders is misplaced” and that John Bravata “has not 

stated a defense that justifies his conduct.” (Id. at 3-4). Pursuant to the “law of the case” 

doctrine, this holding should not be revisited. See Sweeney v. Correctional Med. Servs., 2007 

U.S. Dist. LEXIS 75902, *2 (E.D. Mich. Oct. 12, 2007) (“Under the law of the case doctrine, 

litigants are generally precluded from seeking relief related to matters that the tribunal has 

already decided.” (citations omitted)) 

 As stated in the SEC’s Motion for Protective Order, the Bravata Defendants’ claimed 

reasons for eliciting Mr. Hanauer’s testimony did not, in the first instance, satisfy the high 

standards required to compel the testimony of opposing counsel. The Bravata Defendants’ 

dubious rationale has now disappeared entirely, given that the Court has ruled that the 

TRO/Asset freeze is a valid order – a prerequisite to a finding of contempt. Even the Bravata 

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Defendants’ counsel has conceded the validity of the TRO/Asset Freeze. (See Ex. A). 

Accordingly, since the validity of the TRO/Asset Freeze is no longer at issue, any need for the 

drastic step of forcing counsel to testify diminishes precipitously.1 

 WHEREFORE, for the foregoing reasons and the reasons cited in the SEC’s initial 

brief, the motion should be granted, a protective order should be issued barring the Bravata 

Defendants from calling plaintiff’s trial counsel as a witness at the preliminary injunction 

hearing, and the Court should issue an order striking the Bravata Defendants’ “unclean hands” 

and equitable estoppel affirmative defenses. 

Dated: October 8, 2009 

 Respectfully submitted, 

 s/ James G. Lundy _

 

Benjamin J. Hanauer 

James G. Lundy 

Jonathan S. Polish

Attorneys for Plaintiff 

Securities and Exchange Commission 

 175 West Jackson, Suite 900 

 Chicago, IL 60604 

 Telephone: (312) 353-8642 (Hanauer) 

Telephone: (312) 353-0878 (Lundy) 

Telephone: (312) 353-6884 (Polish) 

E-mail: HanauerB@sec.gov

 E-mail: LundyJ@sec.gov

 E-mail: PolishJ@sec.gov 

 

1

 The SEC’s Motion for Protective Order also seeks to strike the Bravata Defendants’ “unclean hands” and 

equitable estoppel affirmative defenses. Because those defenses are premised on the same alleged conduct by 

which the Bravata Defendants’ previously challenged the validity of the TRO/Asset Freeze, the defenses should be 

likewise be stricken for the reasons stated herein and in the SEC’s motion. 

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CERTIFICATE OF SERVICE

 James G. Lundy, an attorney, hereby certifies that on October 8, 2009, he caused 

the foregoing submission to be filed with the Clerk of Court using the CM/ECF system. 

 s/ James G. Lundy _

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Exhibit A 

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(EXCERPTS FROM HEARING)

***

(Mr. Bartko continuing): The Court is well aware,

as is counsel, what the burden is of the SEC today. We don't

disagree that the Court has virtually unlimited -- well,

somewhat limited -- powers to deal with violations of a

Court's order, but the request today to hold Mr. Bravata in

civil contempt cannot be accomplished unless the Commission

shows by clear and convincing evidence, it's a higher

standard than a civil burden of proof, clear and convincing

evidence that there was a valid order in place prohibiting

the conduct that Mr. Bravata is accused of. There is no

question there is a valid order; I think there is some

question in Mr. Bravata's mind and in my mind on whether or

not his judgment in accessing $36,000 was covered under the

policy.

THE COURT: You mean under the order.

MR. BARTKO: I'm sorry?

THE COURT: Under the policy or under the order?

MR. BARTKO: I'm sorry, order.

THE COURT: I'm just trying to understand.

MR. BARTKO: No, I misspoke. Thank you.

***

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