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I am sorry but it is legal for a lawyer to threaten to cite a party for contempt, so I do not see this as a violation of Rule 5-100. I see it as pretty sleazy but my opinion is that the Bar would not discipline the lawyer for having done this.
I am not out to protect lawyers; I hate them as much as anyone. But it would be unfair to you, and unprofessional of me, not to give you my honest opinion.
For an example of a case where a demand letter did cross the line, see
I hope this information is helpful.
Your understanding is correct but threatening to have a party cited for contempt is an exception to the general rule. Threatening to file criminal charges is generally not allowed, but civil contempt is in its own category.
It is always BS when a lawyer says do this or we will have no choice but to do X. There is always a choice. The threat is borderline, and you can complain to the State Bar if you want, but I doubt that it will discipline the lawyer for this.
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