Federal Court Declines to Issue Harassment Restraining Order Related to Crypto Litigation

From Judge Maame Ewusi-Mensah Frimpong’s Dec. 26 opinion in Thomson v. Persistence Technologies BVI PTE Ltd.; Thomson is apparently a “[b]illionaire publishing heiress” and part owner of Thomson Reuters, and the lawsuit claims over $24+M in damages, related to Thomson’s investment in the XPRT altcoin:

Thomson alleges, in summary, that Richardson and other Defendants conspired to target Thomson and induce Thomson to invest in a certain cryptocurrency, and made a series of false statements to both Thomson and the public in furtherance of this. Richardson alleges in turn, via her counterclaims, that she and Thomson were friends, that Thomson demanded that Richardson invest in cryptocurrency on Thomson’s behalf, that Thomson made rude statements to Richardson and called on Richardson at all hours with requests, and that Thomson eventually made defamatory statements about Richardson….

An order prohibiting a party from harassing another party is appropriate in at least some circumstances. Courts in this district and elsewhere have recognized that it may be permissible and necessary to enjoin a litigant from harassing another party. See, e.g., Beyond Blond Prods., LLC v. Heldman (C.D. Cal. 2022) (issuing an injunction against “threatening or harassing emails” and other conduct); United Artists Corp. v. United Artist Studios LLC (C.D. Cal. 2019) (issuing an injunction against certain conduct that “constitute[s] harassment and would be performed with the intention of intimidation”); see also Test Masters Educ. Servs., Inc. v. Singh (5th Cir. 2005) (upholding a portion of the district court’s injunction prohibiting Defendant “from threatening or harassing” plaintiff, plaintiff’s counsel, or other associated individuals). These courts generally recognize that injunctions against harassing conduct are, to some extent, in tension with the First Amendment’s protections on free speech, but nevertheless hold that such injunctions are constitutional in some circumstances, as “courts have rejected arguments that the First Amendment allows a person to make harassing or threatening communications.” Beyond Blond; see also United Artists (“even under the First Amendment, courts do have the power to enjoin harassing communication”); Test Masters (“Courts have made a distinction between communication and harassment … The difference is one between free speech and conduct that may be proscribed.”).

Although these opinions are not binding, the Court is aware of no precedent pointing the other way on the general question of whether orders of the nature Thomson requested are at times permissible. The Court finds that if Thomson could show sufficient harassment, then it would be appropriate for the Court to grant the Application. But given the Ninth Circuit’s guidance cautioning courts regarding injunctions that control litigants’ behavior, and given the First Amendment concerns that such injunctions implicate, the Court will not grant such an injunction absent a strong showing.

Here, Thomson has failed to make a sufficient showing to justify the order she seeks. In support of her Application, Thomson points to a number of text messages sent by Richardson on one day—October 13, 2024. In her text messages, Richardson threatened to “speak to the press,” with “receipts,” which would be a “major liability.” Richardson further wrote “tell your[ ] lawyers to respond to my requests” and “Please settle this [explicative], or kill me or have me arrested, I’m [explicative] done.” The messages continued along similar lines. Richardson also sent similar messages to Thomson’s daughter. Thomson notes that these are particularly concerning because from previous conversations, Thomson is aware that Richardson possesses a firearm. {For the purposes of this Order, the Court will assume that Thomson’s descriptions of Thomson’s behaviour are true. The Court makes no definitive finding on whether the descriptions are actually true.}

But Thomson has already obtained a Temporary Restraining Order from the Monterey Superior Court based upon the same October 13 conduct. That order (once properly served) prohibits Richardson from harassing Thomson, contacting her, or attempting to determine her location. In addition, the order prohibits Richardson from owning or possessing a firearm and requires her to sell, store, or turn into law enforcement any firearms she possesses. Thomson’s Application does not explain why this TRO is insufficient and certainly does not explain how she can meet the requirement of irreparable harm in light of this TRO. {The Court notes that it appears that the Superior Court TRO may have expired as of the date of this Order. The Court’s determination is based on the posture of the Application at the time it was filed (when the TRO was still active).} Furthermore, it appears that in her request to the Monterey Superior Court, Thomson requested that the TRO also prohibit contact with her daughter, and that request was denied by the court. According to the Application, Thomson’s daughter now has her own request pending. This Court is reluctant to grant Thomson a form of relief that she can seek from the Superior Court, has sought from the Superior Court, and has not yet been granted.

As discussed above, TROs against litigants in federal court are permissible but uncommon. In contrast, the state courts of California are familiar with handling these matters and there is a robust body of substantive law and procedural protections in the Superior Court which this Court is reluctant to disturb without good cause. Thomson has failed to show that good cause. Denying this Application is unlikely to cause harm, much less irreparable harm, given the remedies she has available to her in the Superior Court.

Even if the Court was inclined to ignore the Superior Court’s TRO and issue its own, these text messages, although not civil, are not threats or harassment that this Court finds sufficient to justify the order Thomson seeks. Richardson has not threatened Thomson with physical violence. Although Richardson threatened to go to the press with evidence, this is significantly distinct, Thomson has provided no authority suggesting a court may enjoin a litigant against making threats to speak to the press, which would likely implicate greater First Amendment concerns than an injunction against threats of physical violence. Richardson’s statements that Thomson should settle the case or kill Richardson are disturbing, but they are not threats of violence against Thomson. Furthermore, the record suggests that this conduct was limited to one specific day, and that it is not an ongoing pattern of harassing behavior.

This conduct is significantly distinct from the conduct in the cases discussed above where courts issued injunctions. In Beyond Blond, the party seeking the injunction presented evidence that the other party’s counsel had sent a series of emails over the course of a month, including insults based on race and other offensive statements, and including statements that there will be a “lifetime war between us” and “I can’t wait to meet you in person.”

In United Artists, the party seeking the injunction presented evidence that one defendant had engaged in a long pattern of harassing conduct, including an incident at the courthouse, a phone call, a series of emails, and then posts on the internet. These incidents—which the defendant did not deny occurred but argued were not harassment—included references to counsel’s children and statements like “you’ve been warned.”

In Test Masters, the district court found that defendants had “had called [Plaintiff's office] dozens of times a day, including seventy-one times on one day.” All of these courses of conduct are significantly distinct from the conduct alleged here. Thomson has provided no authority suggesting that the conduct she alleges—a series of non-civil but not physically threatening text messages, sent on one specific day—is sufficient for an injunction.

In sum, the Court finds that the evidence submitted is not sufficient to grant the Application. Thomson has, at minimum, failed to make a strong showing that she is likely to succeed on the merits as to a permanent injunction, or even raised serious questions, because she has not shown that Richardson’s conduct is sufficient to justify the Court enjoining Richardson’s speech. Although a temporary restraining order as to harassment by litigants is warranted in some circumstances, the Court will not issue one here.

For copies of Richardson’s alleged texts, see here and here.

The post Federal Court Declines to Issue Harassment Restraining Order Related to Crypto Litigation appeared first on Reason.com.