TradeComet.Com LLC v. Google, Inc.

Filing 8

FORM D, on behalf of Appellant TradeComet.Com LLC, FILED. Service date 03/29/2010 by CM/ECF.[18124] [10-911]

UNITED S T A T E S C O U R T O F A P P E A L S F O R T H E SECOND C I R C U I T C I V I L A P P E A L T R A N S C R I P T I N F O R M A T I O N ( F O R M D)
N O T I C E T O C O U N S E L : C O U N S E L F O R T H E A P P E L L A N T M U S T F I L E T H E O R I G I N A L O F T H I S FORM W I T H T i l E C L E R K O F T H E S E C O N D C I R C U I T IN A L L C I V I L A P P E A L S W I T H I N 14 C A L E N D A R D A YS A F T E R F I L I N G A N O T I C E O F A P P E A L .

T H I S S E C T I O N MUST BE C O M P L E T E D BY C O U N S E L F O R APPELLA1\'T CASE T I T L E
TradeComet.com, L l C , Plaintiff/Appellant

DISTRICT S.D.N,Y.
JUDGE

DOCKET NUMBER

09-ev·1400
APPELLANT TradeComet.com, L L C
COUNSEL FOR A P P E L L A N T

,.
Google, Inc.,
DefendanVAppeltee

Sidney H. Stein
COURT REPORTER

Cadwalader, W i c k e r s h a m & Taft LLP
P R O V I D E A D E S C R I P T I O N , I N C L U D I N G DATES, O F T i l E P R O C E E D I N G S F O R W H I C H A T R A N S C R I P T IS R E Q U I R E D (i.e., oral argument. order from the bench. CIC.)

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Chetk the applicable

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am o r d e r i n g a t r a n s c r i p t .

a m not o r d e r i n g a t r a n s e r i p t

Reason f o r not o r d e r i n g a t r a n s c r i p t :

See attached Transcript o f Civil C a u s e for Conference (3117109)

[l) Copy is already available

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D

No t r a n s c r i b e d p r o c « d i n l : s O t h e r (Specify in the space below): METHOD OF PAYMENT DFunds

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C J A V o u c h e r ( C J A 21)

INSTRUCTIONS TO COURT REPORTER: D P R E t ' A R E T R A N S C R I P T OF" PRE-TRIAL PROCU:D1NCS I ' R E P A R E T R A N S C R I P T OF" T R I A L P R E P A R E T R A N S C R I P T OF" OTIIER POST-TRIAL PROCEEDINGS O T I I E R (Specify in t h e space below):

D E L I V E R T R A N S C R I P T T O : ( C O U N S E L ' S N A M E , ADDRESS, T E L E P H O N E )

D
D

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I certify that I have made satisfactory arrangements with the court reporter for payment of the cost oflhe transcript.

See F R A P IO(b). I u n d e n l a n d t h a t u n l e s s I h a v e a l r e a d y o r d e r e d t h e t r a n s c r i p t , I s h a l l o r d e r i t s p r e p a r a t i o n a t t h e
t i m e r e q u i r e d by F R A P a n d t h e L o c a l R u l e s .
COUNSi:L'S SIGNATURE DATE

l s I Charles F. Rule

M a r c h 29, 2 0 1 0

COURT REI'ORTi:R ACKJ'OOWLi:DGMEI'o"T: Tbl-s seelion is to bf: c o m p k l N by Ibe court reporleT. Relurn one copy 1 0 lbe Clerk o r the SKond Cin:uil.

D , n E OROER RECi:IVED SIGNATURE OF COURT REPORTlil)

ESTIMATED COMPLETION DATE

ESTIMATi:D NUMBER 0.- PAGF-S DATE

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UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YDRK
------------------------------x TRADECOMET.COM LLC,
Plaintiff

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DOCKET N O . , C V - 0 9 - 1 4 0 0 (SHSI
-vsNew Y o r k , N e w Y o r k March 17, 2009

· ·
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GOQGLE INC.
Defendant

------------------------------x
TRANSCRIPT OF C I V I L CAUSE FOR CONFERENCE

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BEFORE THE HONORABLE SIDNEY H. STEIN
U N I T E D STfI.TES D I S T R I C T J U D G E

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A P P E A RAN C E S, For the Plaintiff: CHARLES F . RULE. ESQ. JOSEPH J . B I A L , ESQ. JONATHAN KANTER, ESQ. Cadwalader Wickersham & 1 2 0 1 F S t r e e t N.W.
Washington, D.C. 20004

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For the Defendant:

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JONATHAN M. JACOBSON, ESQ. SARA C . WALSH. ESQ. CHUL PAK. ESQ. Wilson Sonsini Goodrich & Rosati P.C. 1301 Avenue of the Americas New Y o r k , NY 1 0 0 1 9

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Audio Operator:

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P r o c e e d i n g s R e c o r d e d b y E l e c t r o n i c Sound R e c o r d i n g
Transcript Produced by Transcription Service
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KRISTIN M. RUSIN

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217 Pine Meadows C i r c l e H i c k o r y NC 2 8 6 0 1 [e-mail]

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THE CLERK: 2
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TradeComet.com versus Google, zero nine

civil fourteen hundred.
Counsel, please s t a t e your names for the Court.
MR. RULE: Charles F. Rule, Cadwalader, on behalf of A n d w i t h me a r e J o e S i a l a n d

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T r a d e C o m e t . c o m LLC, Y o u r H o n o r .

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Jonathan Kanter.
THE COURT: MR. RULE: Hi. Good a f t e r n o o n t o a l l t h r e e o f
YOll.

Good a f t e r n o o n t o y o u , Y o u r H o n o r .
And f r o m W i l s o n S o n s i n i , J o n J a c o b s o n ,

MR. JACOBSON:

representing Google.
Pak.

And I ' m j o i n e d by Sarah Walsh and Chul

THE COURT:

All right.

Good a f t e r n o o n t o a l l o f y o u .

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Please be seated.

This is being recorded.
Did you - -

Mr. Rule, your name i s very f a m i l i a r . were you formerly a t Fried Frank in Washington?

MR. RULE:
THE COURT:

Yes, Your Honor, I was.
I b e l i e v e y o u w o r k e d w i t h my d a u g h t e r ,

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who i s E l i z a b e t h S t e i n . MR. RULE: THE COURT: I believe t h a t ' s correct, Your Honor. All right. So t h e r e ' s a d i s c l o s u r e . I

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d i d n ' t - - I d i d n ' t r e a l i z e t h a t u n t i l I saw your name. MR. RULE: Kanter did as well. THE COURT: All right. She's - - and for disclosure And j u s t f o r t h e r e c o r d , Your Honor, Mr.

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purposes,

s h e ' s no longer at Fried Frank.

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MR. RULE:
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Correct, Your Honor.
I have t h e l e t t e r s i n f r o n t of me, and There's

THE COURT:

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t h e defendant wants t o move on 12(b) (3) grounds.

always some back and forth i n the Second C i r c u i t as to where improper venue r e a l l y i s , whether i t ' 5 under 12 (b) (3) o r
12 (b) (6),

and I ' v e written on that as well.

But for analysis

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purposes, l e t ' s assume what the - - what the request i s i s
simply to move t o dismiss for improper venue.

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And t h e d e f e n d a n t p o i n t s t o P e r s o n v . G o o g l e , w h i c h
I ' v e read, t r a n s f e r r i n g the case - - t h a t case to California on

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t h e b a s i s o f a - - w h a t was c o n s t r u e d a s a m a n d a t o r y f o r u m selection clause. The p l a i n t i f f , I t h i n k , i s s a y i n g l e t ' s g e t

- - i f t h e r e ' s going to be a motion to dismiss, l e t ' s have i t a l l b r i e f e d , not only 12(b) (3) but a l s o f a i l u r e to s t a t e a claim, i f t h a t ' s what defendant i s saying. Mr. Rule, do I have the back and f o r t h p r e t t y much correct? MR. RULE: THE COURT: That's correct, Your Honor. All right. is that - - do I - - from your

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And f o r Google I n c ,

standpoint, do I have i t p r e t t y much c o r r e c t ? MR. JACOBSON: THE COURT: Yes, Your Honor.

All right.

So, Mr. Rule, the question then i s in l i g h t of Person v. Google, i t looks like you've got a high hurdle to clear, or

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mountain to scale, or whatever the image should be. clause different?

Is the

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I think in one of your l e t t e r s you say i t

is, but without any support for that. MR. RULE: Your Honor, i f I m i g h t j u s t g i v e you a

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l i t t l e background, and then THE COURT: MR. RULE: Sure. - - try to answer your question, I think i t

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was F e b r u a r y 2 7 t h we h a d a d i s c u s s i o n w i t h G o o g l e ' s c o u n s e l w h e r e G o o g l e i n d i c a t e d t h a t t h e y w a n t e d a n e x t e n s i o n , w h i c h we agreed to, of twenty-eight days. THE COURT: MR. RULE: THE COURT: NO, I s a w t h a t , a n d y o u - Right. - - f e l t somewhat abused by the fact that

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IS

MR. RULE: THE COURT:

Right. -- after they asked for the extension,

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o n l y now d o t h e y corne a n d s a y l e t ' s g e t t h i s - - w h a t t h e y c h a r a c t e r i z e a s a - - a s a w i n n i n g a r g u m e n t o u t o f t h e way s o t h a t we d o n ' t h a v e t o d o a l l t h a t w o r k , a n d y o u come b a c k a n d s a y w e l l , h e y , g u y s , why d i d y o u d o t h a t t o me, i f y o u knew t h i s , you should have done i t e a r l i e r . r i g h t , b u t we a r e w h e r e we a r e . MR. RULE: Okay. And I s h o u l d a l s o p o i n t o u t , i n t h e And y o u ' r e p r o b a b l y

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Person case, there was a similar argument, and they f i l e d both t h e i r 12(b) (6) and what t h e y ' r e c a l l i n g a 12(b) (3) motion a t

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the same time, and,

interestingly, led at that point in that

case with t h e i r 12(b) (6) motion. We b e l i e v e t h a t t h i s i s a v e r y d i f f e r e n t c a s e . The

most glaring difference i s that TradeComet i s a competitor of Google's, competitor that's been put out of business. Person

i n v o l v e d a n i n d i v i d u a l who w a s t r y i n g t o r u n f o r t h e a t t o r n e y general, I b e l i e v e , o f t h e s t a t e o f New Y o r k a n d r e a l l y w a s as a customer. But with respect to the specific question of what a g r e e m e n t w a s i n e f f e c t , we b e l i e v e t h a t ' s n o t a t a l l c l e a r . I t ' s also t r u e t h a t Person was decided before the P h i l l i p s case. A n d we a s s u m e t h a t t h e d e f e n d a n t i s g o i n g t o a r g u e b a s e d

suing as a

on Phillips that venue should be transferred under t h a t standard. And a t l e a s t t h e t h i r d p r o n g o f t h e P h i l l i p s

standard suggests that the language of the venue clause i s important. Google has cited in i t s l e t t e r to Your Honor a venue clause that, frankly, He're not sure whether i t applies to us. We h a v e s e e n v a r i o u s want

We f r a n k l y d o n ' t t h i n k i t d o e s .

agreements, and basically what happens i s i f you are a to use t h e i r Adwords, you go to Adwords. to sign up, click through the license.

You h a v e t o , i n o r d e r You c l i c k i t t h r o u g h .

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You d o n ' t a c t u a l l y g e t , n e c e s s a r i l y , t h e t e x t o f t h a t agreement. And then you get t o the - THE COURT: No, b u t y o u s e e i t . You s e e i t t h e r e .

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MR. RULE:
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You do - - you do s e e i t , but - And then you c l i c k

THE COURT' MR. RULE,
'THE COURT:

--

there are --

I t ' s kind of like shrink wrap.

Is that

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the idea?

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MR. RULE, THE COURT,
bound.

Yes, Your Honor. As s o o n a s y o u o p e n i t , y o u ' v e - - y o u ' r e

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MR. RULE' THE COURT' MR. RULE,

Y e s , Your H o n o r .
Okay.
I f you click through.

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Now, we - - I t h i n k

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a s we g e t i n t o t h i s , we h a v e ,

f r o m o u r p o s i t i o n , some a r g u m e n t s

about what - - and the significance of the contract, but suffice

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i t f o r t h i s moment t o s a y t h a t i t ' s o u r u n d e r s t a n d i n g - - b u t
frankly, t h i s i s s o m e t h i n g - - we w o u l d l i k e t o g e t s o m e because the agreements are in the possession of

discovery,

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Google, not in the possession of our client.

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B u t f r o m w h a t we c a n t e l l , b a s e d o n t h e a c c o u n t s t h a t
were set up by TradeComet, there was a provision - - a venue

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provision d i f f e r e n t from the one t h a t Mr. Jacobson quoted in
his letter. I f you look a t Person, the court in that case

really did 'not spend any time trying to parse through the language of the venue clause to decide whether or not those p a r t i c u l a r claims came within t h a t venue c l a u s e . But we t h i n k t h a t t h e - - t h a t t h e venue c l a u s e t h a t

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a t l e a s t applied t o some of the agreements a t the time s a i d 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21
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that this agreement shall be adjudicated in Santa Clara County, I think i t is, California. Honor. This i s not a contract claim, Your

T h i s i s - - a n d t h i s i s n o t a c a s e w h e r e we h a v e It's j u s t n o t a b o u t a

artfully pled around a contract claim. contract. I t ' s a Section 2 claim.

The a l l e g a t i o n s are that

G o o g l e v i o l a t e d S e c t i o n 2 u n i l a t e r a l l y , a n d we d o n ' t b e l i e v e that, frankly, under either provision, but certainly under that agreement, shall be - - this agreement shall be adjudicated in Santa Clara County - - requires that venue be shifted, p a r t i c u l a r l y i n l i g h t of the f a c t t h a t - - you know, I mean, the

venue - - clearly, in the absence of a provision, venue would lie in this court. Frankly, all the witnesses are here, all the factors of convenience that you would normally think are relevant here. S o y o u know - - b u t a g a i n , we w o u l d l i k e t o g e t s o m e - - a l i t t l e b i t o f d i s c o v e r y o n t h a t q u e s t i o n , a n d we d o n ' t b e l i e v e t h a t the provision that has been cited is the one t h a t ' s
relevan~.

And b e y o n d t h a t , i n P e r s o n , t h e c o u r t d i d n ' t a c t u a l l y a d d r e s s the question of interpreting the contract. THE COURT: little. All right. B u t h e l p me - - h e l p me a

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I u n d e r s t a n d y o u r a r g u m e n t i s - - i t s e e m s t o me t h e

i n i t i a l p a r t o f y o u r a r g u m e n t i s w e ' r e n o t s u r e w h a t we a g r e e d t o , s o we n e e d s o m e d i s c o v e r y t o s e e w h e t h e r we c l i c k e d w h a t i t

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was t h a t we w e r e a g r e e i n g t o . 2 3
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Is that correct?

MR. ROLE:

Well, there were four - - I think there I t h i n k i t may h a v e b e e n f o u r t e e n And e a c h t i m e y o u s e t u p Now, o n c e

were something over ten

different accounts that were set up.

an account, you would click through on t h i s license.

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y o u ' v e done t h a t , and once y o u ' v e s i g n e d up, you d o n ' t c l i c k through again. The agreement s a y s t h a t t h a t agreement s u r v i v e s

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even a termination.

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So t h e r e a r e f o u r t e e n d i f f e r e n t s i g n - u p s , i f y o u
w i l l , Your Honor, t h a t a r e a t i s s u e . THE COURT: All right. And i f l i f e i s - - i f l i f e i s

simple, which i t never is, those fourteen different clicks will a l l c l i c k on one forum selection clause. that But we'll see.
Or

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y o u ' r e a s k i n g - - y o u ' r e s a y i n g we d o n ' t know, s o y o u

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want to find out. MR. RULE, THE COURT: MR. RULE, We d o n ' t know, b u t b a s e d - Okay.
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o n when G o o g l e h a s l i t i g a t e d t h i s i s s u e

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previously, and they routinely l i t i g a t e this issue, the agreements that they've produced indicate a variety of different formulations of their forum clause. THE COORT: All right. These companies - - a l l

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companies are always sort of tinkering with their language to get closer to what they want to do. So a g r e e w i t h me f o r t h e s e p u r p o s e s t h a t y o u r f i r s t

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aim i s to find out what i t i s you've agreed to.
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Okay.

MR. RULE: THE COURT:

Correct. Is part of your argument
tha~

our claims

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a l t h o u g h we d o n ' t k n o w w h a t w e a g r e e d t o , we b e l i e v e s o m e o f

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o u r c l a i m s , o r maybe a l l o f o u r c l a i m s , a r e n ' t g o v e r n e d b y t h a t

forum s e l e c t i o n c l a u s e ?
MR. RULE'
I think I would put i t , Your
Hono~,

none

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o f o u r c l a i m s a r e g o v e r n e d by t h a t f o r u m THE COURT' MR. RULE' THE COURT, MR. RULE: contract. None o f t h e m . None o f t h e m .
Okay.

B e c a u s e we a r e n o t s u i n g u n d e r t h e

W h a t we a r e c l a i m i n g i s t h a t G o o g l e h a s e s s e n t i a l l y to exclude

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used i t s market power, which i t obtained unlawfully,

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us as a competitor from the marketplace.
through

Part of that has been

THE COURT:

But the vehicle of the exclusion i s this

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Adwords contract.
MR. mean, RULE: Not exactly, Your Honor, and j u s t - - I

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I ' d l i k e t o see Mr. Jacobson's arguments t o respond to

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them, but I will say that I chink their position i s a l i t t l e b i t l i k e you go to t h e i r s i t e , you c l i c k on the - - on the license, which you have to get to before you can actually, in effect, communication with the machine that i s Google, and once you've clicked i t though and you've signed the venue or forum

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selection clause, apparently you s t i l l have to sue them in 2 California even i f at t h a t point they refuse to deal with you
at all,

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because you clicked i t , and, a f t e r a l l , i t a r i s e s

t h r o u g h t h a t a g r e e m e n t , b e c a u s e p a r t o f w h a t we a r e a r g u i n g here is i t amounts to a refusal to deal of a sort in the sort
of Aspen Skiing s o r t .
But there are other elements of our claim, including

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a n a g r e e m e n t t h a t we a l l e g e i s a n t i - c o m p e t i t i v e t h a t t h e y h a d
with a competitor

a direct competitor of ours, Business.com.
this i s a situation where

All of those things -- so in effect,

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in order to even t a l k to them, you have to sign this license.
And they can r e f u s e t o deal with you, and apparently, I think,

t h e i r a r g u m e n t w o u l d b e i f y o u - - i f we r e f u s e t o d e a l w i t h you, because you clicked that license you've got to sue in Santa Clara County_ Or t h e y ' r e saying THE COURT: again. MR. RULE: I f you go to t h e i r website and click in Wait, say that -- say that last part

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order to be told that they're going to refuse to deal with you, because you have clicked the license - - t h a t your only resource is to sue them in Santa Clara County, California. THE COORT: Okay, but t h a t ' s not you, right?

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MR. RULE: THE COURT:

Your Honor, That's not you.

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MR. RULE:

- - they - - what our allegations are - - are t h a t we - - t h e r e w a s a

t h a t we h a v e n o t b e e n d e a l t w i t h , relationship.

The r e l a t i o n s h i p , in e f f e c t , a f t e r they came t o

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- - we h a d m e e t i n g s i n New Y o r k , a n d t h e y f o u n d o u t w h a t o u r business plans were. Their approach to TradeComet changed

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because they saw and understood the competitive t h r e a t presented by vertical search engines. And a t t h a t p o i n t , they engaged i n v a r i o u s conduct, including refusing to send traffic to us - - I understand that they will likely claim that that's because of landing quality page or something, but the fact i s that whereas before the - our c l i e n t was able to obtain words, afterwards they weren't. And - - and i t - - and i t - - I t h i n k t h e r e a r e a l s o the fact t h a t you have an agreement t h a t i s a click-through a g r e e m e n t b y w h a t we a r g u e i s a m o n o p o l i s t c a n n o t b e a l l o w e d t o p u t e v e r y b o d y , n o m a t t e r how s m a l l , n o m a t t e r h o w m u c h t h e y ' r e p u t o u t o f b u s i n e s s , t o t r a v e l La t h e forum f o r G o o g l e ' s convenience based on any claim you bring against Google. And i t ' s very hard t h e s e days not t o deal with Google. I t ' s very hard to imagine any claim against Google But I

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where t h e r e i s n ' t some place in the record an agreement. think,

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Your lionor, you know, i f - - i f we're allowed t o b r i e f under Phillips, the

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t h i s i s s u e , we c a n p o i n t o u t t o y o u w h y ,

language of the agreement, even the one quoted, doesn't extend to these claims

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THE COURT: MR. RULE: All right. - - a n d why t h e o t h e r p r o n g s o f P h i l l i p s

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4

suggest that i t ought to be interpreted narrowly, because

o t h e r w i s e , y o u know, i t w o u l d s e e m t o b e i n a p p r o p r i a t e a n d

5 6
7 8
9
10

i n c o n s i s t e n t w i t h w h a t p a r t i e s who w e r e d e a l i n g w i t h G o o g l e
h a v e a r i g h t t o e x p e c t when t h e y c l i c k o n t h a t l i c e n s e .
THE COURT: All right. Of course, you know, I'll

I ' l l l e t you make t h a t argument.

They h a v e n ' t even made the

motion, so, you know, y o u ' l l have a f u l l opportunity to make
that.

11

You k n o w , I ' v e d e a l t w i t h t h e s e i s s u e s b e f o r e i n a

12 13 14
15 16
17

variety of different contexts, and i f the claim i s that the contract says all claims arising out of or relating to -- very
broad.

I f t h a t were an a r b i t r a t i o n clause, for example, t h a t ' s
But I understand your

j u s t about as broad as you can get. argument.

You 1 r e t e l l i n g me t h e r e ' s c a s e l a w t h a t s a y s t h a t

broad language should be construed narrowly, and you may not even have to get there, because you're not sure what you signed. I understand. MR. RULE: THE COURT: MR. RULE: All right. just --

18

'9
20

And, Your Honor, i f I might,
Yeah.

21

22 23 24 25

- - I mean, for example, the language that

w a s i n e f f e c t o n A p r i l 1 9 t h , 2 0 0 5 a n d , we b e l i e v e , i n May 2 0 0 6 when s e v e r a l o f these accounts were signed up f o r , read the

a g r e e m e n t - - l e t me t a k e my g l a s s e s o f f h e r e f o r a m i n u t e - -

13

must be construed as i f both parties j o i n t l y wrote i t , governed

2
3 4

by California law, except for i t s conflicts of law, principles,
and adjudicated in Santa Clara County, California. $0

basically, the sentence reads the agreement must be adjudicated

5
6
7 8

in Santa Clara, California.

T h a t i s much d i f f e r e n t l a n g u a g e f r o m - - r e l a t e d t o
the language t h a t i s quoted in Mr. J a c o b s o n ' s l e t t e r , and we believe i s clearly applicable to a number, i f not a l l , of the

9
10
11

c o n t r a c t s or the accounts t h a t TradeComet b a s i c a l l y signed up
for here.

THE COURT:
Thank you.

Okay.

I think I have your argument.

12
13

Mr.

Jacobson,

i t s e e m s t o me t h e y ' r e e n t i t l e d t o k n o w

14
15
16 17

what they clicked on.

I would think that - - you'd have a great

i n t e r e s t in showing them what they clicked on.

MR. JACOBSON:
to that point.
it.
I

Your Honor,

I absolutely consent to --

There's - - t h e r e ' s no - - t h e r e ' s no issue with

,.
18

do want t o p o i n t out, because I t h i n k - - you know, "e

w i l l - - we w o u l d b e b a c k h e r e a g a i n o n t h i s , b u t t h e l a w i s
f a i r l y clear that breach of a forum selection clause i s a
breach of contract.
I t gives rise to damages,

20

21 22

and the damages

are the costs incurred in invoking that clause to effect the dismissal or transfer. S o y o u k n o w , we w i l l g o t h r o u g h t h i s d i s c o v e r y a s M r .
R u l e r e q u e s t s , a n d we w i l l r e a s o n a b l y r e s p o n d c o i t . But I do

23
24

25

14
want everyone to be on notice to recognize t h a t t h a t ' s our

2
3
4

p o s i t i o n a n d t h a t t h i s i s n o t , y o u know, a c o m p l e t e l y f r e e r i d e on Google's expense. THE COURT: All right. Mr. i f I could just
~-

5

MR. JACOBSON: indulge

I would like

you

6
7
8 9

THE COURT:

You've thrown - - you've put --

MR. JACOBSON: THE COURT:

- - me f o r a s e c o n d . t h a t s h o t a c r o s s h i s bow, o r o v e r h i s
and he understands that i s what i t

10

shoulder, based on where you s i t , you're going
~o

l'
12
13
14

be moving for a t t o r n e y ' s fees,

sounds like,
MR.

JACOBSON:

Yes.

THE COURT:
MR.

i f you prevail.
Your Honor,

Go a h e a d .
just briefly,
in

15
16
17

JACOBSON:

just

t h e i n i t i a l c a l l we h a d , we h a d n o t a t t h a t p o i n t

--

first of

a l l , w e d i d n ' t know t h a t t h e c a s e w a s g o i n g t o b e b e f o r e Y o u r
Honor. We d i d k n o w t h a t i t w a s n o l o n g e r b e f o r e - - w h o w a s t h e

18

19
20

prior judge?

before Judge Buchwald.

We d i d n ' L k n o w w h o i t

was going to be before. THE COURT:
Oh, did she - - iL was assigned t o her,

21

22
23 24

and then t r a n s f e r r e d Łor some reason t o me? MR. JACOBSON:
THE COURT:

She recused.

All right. So - - and during t h a t conversation, r

25

MR. JACOBSON:

15
did i n d i c a t e t o Mr. Rule t h a t t h e r e was an i s s u e with venue,

2
3
4

a n d we h a d n o t e i e d i t d o w n a t t h a t p o i n t .

A.nct - -

THE COURT:

You h a d n o t - We h a d n o t t i e d i t d o w n a t t h a t p o i n t .

MR. JACOBSON:

5
6

THE COURT:

All right.

t-1R. JACOBSON:

Since

the~,

and - - and before I wrote

7

my l e t t e r , w e d i d c o n f i r m t h a t - - t h a t M r . S a v a g e . t h r o u g h h i s

B e - m a i l a d d r e s s d a n @ s o u r c e t o o l . c o m , c l i c k e d o n w h a t i s now t h e
9
10
11

current terms and conditions for Adwords.

He c l i c k e d o n i t o n

A u g u s t 2 9 t h , 2 0 0 6 , a n d we w i l l p r o v i d e t h i s i n f o r m a t i o n t o t h e
p l a i n t i f f , a n d t h o s e a r e t h e t e r m s q u o t e d i n my l e t t e r , a n d I
g a v e Y o u r H o n o r a n d c o u n s e l f o r T r a d e C o m e t t h e ORL.

12
13

And t h a t - - t h a t agreement provides very c l e a r l y t h a t

14
15

all claims arising out of or relating to the -- the language
t h a t you r e a d - - t h i s agreement o r t h e Google programs s h a l l be litigated exclusively in Santa Clara County. The agreement

16
17

also provides that i t supersedes and replaces a l l prior agreements. S o we b e l i e v e a t t h e e n d o f t h e d a y t h a t t h e r e ' s n o t going to be any issue that this is the governing agreement for
- - f o r a l l o f t h e a c c o u n t s i n - - ~n q u e s t i o n .

18
19

20
21

22

Having - - having said that,
is,

the -- the question today

23
24

y o u k n o w , s h o u l d we b r i e f v e n u e o n l y f i r s t , o r s h o u l d we
A n d l e r me j u s t t e l l y o u t h e p r a c t i c a l

brief everything.

25

r e a s o n s t h a t l e d u s t o s e n d y o u t h e l e t t e r r h a t we d i d , w h i c h

16

i s we d i d g o t h r o u g h t h i s w i t h M r . P e r s o n - - M r . P e r s o n - - w h o , 2
3

c o n t r a r y t o what Mr. Rule t o l d you, did a l l e g e t h a t he was a competitor of Google. this one. The case was ultimately i d e n t i c a l t o We w i l l a r g u e t h a t

4

They will disagree with t h a t .

5
6
7

that's the case.

And - - and you w i l l - - you w i l l look a t t h a t

at an appropriate time. B u t we w e n t t h r o u g h t h i s . We b r i e f e d t h e m e r i t s .

8

Judge Paterson looked only at the venue at the end of the day. We w e n t o u t t o C a l i f o r n i a . We b r i e f e d t h e m e r i t s a g a i n .
We

9
10 11

The

complaint was dismissed without prejudice.

wound up

briefing the merits a third time a f t e r the complaint had been amended. So the only purpose for t h i s i s t o reduce the amount of briefing of the merits from - T H E COURT:
MR.

12
13
14

15
16
17

Well, you - - you d o n ' t have from three to two. t o c o n v i n c e me t h a t w h a t your

JACOBSON:

THE COURT:

18

motion should be only based on the venue clause, and you should do i t under 12 (b) (3), i t seems t o me.
MR.

19

20
21

JACOBSON: Oh,

Or 12{b)(1l,

I

think you s a i d , - -

THE COURT:

I'm -- - in C.F. First Class (phonetic].

22
23
24

MR. JACOBSON: THE COURT: but i t ' s really --

sorry, have -- I've been saying three,

25

MR. JACOBSON:

Yeah.

17

THE COURT:
2

one,

is that it?

Okay.

MR. JACOBSON:

It -- it's actually either -- either

3 4

one.

Your opinion in C. f i r s t Class [phonetic} says 12 (b) (1) .

The Second C i r c u i t ' 5 opinion affirms dismissal under: 12 (bl (3) .

5
6
7

THE COURT:

That's
I believe
in t h a t same in C. F i r s t Class Is that --

MR. JACOBSON:

THE COURT:
[phonetic)?

8
9

That was the a i r l i n e case, I think.

MR. JACOBSON:
last year.
THE COURT: decision?

T h a t was - - t h a t was y o u r c a s e f r o m

10
11

And t h e y a f f i r m e d i t ?

They affirmed

~y

12
13

You c i t i n g a n o t h e r s e c t i o n , o r - MR. JACOBSON: I have not tracked che subsequent

14
15
16

l , i s t o r y of your case, but the case t h a t Mr. Rule was c i t i n g to

you from the Second C i r c u i t 2007 was a 12 (b) (3) case.
THE COURT: A n d I u s e d 12 ( b ) ( I ) ?

17
18

MR. JACOBSON: THE COURT:

You u s e d 1 2 ( b ) ( 1 )

Okay.

19
W
21

MR. JACOBSON:
THE COURT: a district court.

i n C. F i r s t C l a s s [ p h o n e t i c } .
I am

Well, they are the Second Circuit.

So go with them.

22
23

Y o u d o n ' t h a v e t o c o n v i n c e me o f t h a t , b u t M r . R u l e

now s h o u l d t r y t o c o n v i n c e me o t h e r w i s e .
I t s e e m s t o me t h a t t h e w a y we s h o u l d g o i s y o u should get your discovery, limited to what's your agreement

24 25

18

w i t h t h e m , s o l e t h i m know, i f y o u c a n , w h a t d a y s y o u c l i c k e d ,
2
3
4

and h e ' l l t e l l you what his website said on those days at those

times.

I t s e e m s t o me t h a t - - t h a t ' s w h a t y o u w a n t , c o r r e c t ?

MR. RULE:
know,

Your Honor, yes, and again,

I j u s t - - you

5 6 7
8 9
10

we w o u l d l i k e t h e o p p o r t u n i t y t o - - t o i n d i c a t e t h a t

something seems amiss when, you know, Google can e s s e n t i a l l y t h r e a t e n p e o p l e w i t h f e e s , a s M r . J a c o b s o n d i d t o my a s s o c i a t e

THE COURT:
you now

Threaten with what?

He j u s t t h r e a t e n e d

11

MR. RULE: THE COURT:

Right. I wouldn't use t h a t word, but he put you

12

13
14
15

on notice that he believes they have a right to a t t o r n e y ' s fees

for these

MR. RULE: THE COURT:

Right.

16
17

-- unwarranted and untoward actions.

I

heard that.
MR. RULE: THE COURT: MR. RULE:
But

18

--

but --

19 20 21 22

But what

--

....' h a t a r e y o u s a y i n g ?

W e l l , my c o n c e r n i s , Y o u r H o n o r

--

you

know, G o o g l e ' s a v e r y l a r g e c o m p a n y , v e r y w e l l e n d O ' . . ; e d . F r a n k l y , we d o n ' t w a n t a s i t u a t i o n w h e r e a t e v e r y t u r n , e v e r y place they can, they try to drag this case out. t h a t we a r e r i g h t o n t h e v e n u e q u e s t i o n .
THE COURT:

23 24
25

We b e l i e v e

I understand.

We a l s o b e l i e v e t h a t we

19
are right on the 12{b) (6) question.
2
3

i1e t h i n k - -

THE COURT: MR. RULE: claim.

I understand that, but -t h a t we h a v e s t a t e d we h a v e s t a t e d a

4
5

And f r a n k l y , we - - i f h e b i f u r c a t e s i t t h i s w a y ,

they've just dragged this out further.

6
7 8
9

THE COURT:

No.

I certainly understand your point,

a n d I c e r t a i n l y u n d e r s t a n d how y o u ' r e a b i t s u s p e c t g i v e n t h e
r e q u e s t e a r l y o n , a n d y o u ' r e t h i n k i n g a s w e l l i f t h e y knew t h e y

w e r e g o i r . g t o d o t h i s , why i n t h e w o r l d w o u l d t h e y h a v e u s e d sought the sought the adjournment. I understand that.

10
11

But i t i s certainly easier from a management

12
13

s t a n d p o i n t f o r me t o l o o k a t t h e v e n u e i s s u e f i r s t , e s p e c i a l l y in l i g h t of Person v. GQQole, so - - and I understand your point
i s t h a t i t ' s a d i f f e r e n t c a s e , b u t i t t e l l s me t h a t I - - r h a v e

14

15
16 17
18

the ability here, end i t ' s logical, to kind of cauterize that i s s u e f r o m t h e r e s t a n d f o r me t o l o o k a t t h a t i s s u e a l o n e . ahead.
MR. RULE:
And, Your Honor, I d o n ' t disagree that you

Go

19 20

may w a n t t o l o o k a t i t . i t and you agree Hith us,

My o n l y c o n c e r n i s t h a t i : y o u l o o k a t
the problem that.
T. . . .

i l l :,e facing us i s And

21

we t h e n w i l l h a v e - - h e ' l l h a v e a n o t h e r b i t e a t t h e a p p l e . throughout--

n
23 24 25

THE COURT:

If you're right, he will have another

b i t e a t the apple, but I'm t e l l i n g you t h a t I'm s e n s i t i v e to your concern, and t h i s b r i e f i n g schedule w i l l be p r e t t y much

20

what y o u w a n t , w i t h i n r e a s o n .
2
3

In o::.her words,

! 'm not going to
{l}

have a six-week b r i e f i n g schedule on e i t h e r a 12 (0)
12 (b) (3) motion.

or a

4

MR. RULE:

Well, I certainly hope i t ' s not going to

5 6 7
8

be any longer than he already has, which i s April 7th.

But I

w o u l d c e r t a i n l y a l s o h o p e t h a t i f w e ' r e r i g h t t h a t we a r e g o i n g
to get discovery.

I m e a n , t h e o t h e r p r o b l e m we h a v e i s t h a t

even with respect to the discovery on the issues t h a t we've
talked abollt on venue, we've t r i e d to be reasonable with

9

10 11
12 13
14
15

G o o g l e , a n d t h e r e s p o n s e we g o t w a s I c a n ' t g i v e y o u a n y t h i n g b e c a u s e my c l i e n t w i l l f i r e me i f I g i v e y o u a n y d i s c o v e r y .
A n d t h e p r o b l e m - - we d o n ' t w a n t t o r u n i n t o a situation where this i s just dragged
ou~

forever.

I

do

u n d e r s L a n d w h y G o o g l e d o e s n ' t w a n t a n y o n e LO s e e t h e i r documents. And 1 u n d e r s t a n d t h a t t h e y ' r e g o i n g t o f i g h t a s

16
17

long as they can for that. And a l l we're asking Your Honor t o do i s t o help us o u t , r e c o g n i z i n g who w e ' r e g o i n g a g a i n s t , a n d n o t - - n o t helping them a t every turn block the a b i l i t y of a p l a i n t i f f

18

19 20
21

like this to get to court and have i t s day in court.
THE COURT: Okay.
I

can g i v e you - - r c a n ' t adopt

22 23
24 25

the characterizations you've j u s t made, but I can assure you that the case will be adjudicated efficiently and promptly.
MR. RULE: That's a l l I can ask, Your Honor, a t the

end of the day.

21

THE COURT:

Now - - b u t l e t ' s - - I w a n t t o a v o i d

2
3

discovery issues here on the

on the venue point.

So put

your request in writing as soon as you can
MR. RULE: Okay.

·
5

THE COURT:

- - t o Mr. J a c o b s o n .

I f you f e e l you're

6
7

b e t t e r protected by doing i t as a formal docunent demand, do
it.

I'll let it

~e

returnable on - - well,
thi~k

i t depends upon - ~etu=nable

8

i f i t ' s as narrow as I

i t should be, i t can be

9
10
11

Mr. J a c o b s o n , t e n d a y s ?

Can y o u d o t h a t ?

MR. JACOBSON:

Y o u r H o n o r , we h a d t a l k e d a b o u t a n
Because i t ' s

.l\pril 7th date for the motion.

just going to be

12
13

limited to venue, what I would propose i s to advance that a
'Neck t o

March 3 l .

The problem, candidly, i s t h a t next week a l l

"
15
16

o f t h e a r . t i t r u s t 1 a ....· y e r s a r e a t t h e A3A c o n v e n t i o n , a n d ! ' m speaking. I b e l i e v e Mr. Rule i s speaking as well a t t h a t .
S o i f we c o u l d h a v e

again,

1'11 advance i t a week Then once they have

17
18

t i l l March 31, and get the motion on f i l e . the motion,

then they can formulate the discovery, and we'll

19
20

respond to their request within three business days. THE COURT: thought you
~anted

S o u n d s a l l r i g h t t o me, a l t h o u g h I
If

21 22 23
2'

to get your request out now.

you want to

wait t i l l h i s motion, Mr. Jacobson i s saying t h e y ' l l respond i n three business days. That's pretty good.
this is St.

And w e ' r e t a l k i n g - - now w e ' r e t a l k i n g

25

P a t r i c k ' s Day, so you're talking about two weeks to make your

22

motion, and then a
2
3
no~ice.

docume~t

demand returnable on three days'

Mr. R u l e ? MR. RULE: Well, Your Honor, I - - I guess, since I

4

5 6

b e l i e v e t h e r e q u e s t t h a t we a r e g o i n g t o m a k e i s p r e t t y n a r r o w , a n d we d i s c u s s e d r e a l l y m o s t o f t h e i s s u e s h e r e ,
i~

s t r i k e s me

7

t h a t i t ' s b e t t e r f o r u s t o g e t t h a t r e q u e s t o u t now.
THE COURT: All right.
Get:t out .
J

·
9

MR. RULE:

Right.

S o we w i l l - - we w i l l d o t h a t .

10
11 12

don't think we'll wait for his motion.
THE COURT:

I don't mind.

MR. JACOBSON:

Y o u r H o n o r , i t d o e s n ' t make a n y s e n s e ,

13

b e c a u s e we h a v e n ' t d e c i d e d w h o t h e d e c l a r a n t i s g o i n g t o b e o n

14
15

t h e d e c l a r a t i o n t o s u p p o r t when Mr. S a v a g e c l i c k e d o n t h e - - o n
t h e w e b s i t e , s o how - THE COURT: No, b u t h e h a s

I.
,.
19

17

MR. JACOBSON: THE COURT:

-- are they going to - own v i e w - - h e h a s h i s own v i e w a s t o

when h i s p e o p l e c l i c k e d o n c h e w e b s i t e , I t a k e i t .
Is that correct?

20
21

MR. RULE:

T h a t ' s absolu e l y c o r r e c t , Your nonor.
But t h a t ' s not discovery from us.

MR. JACOBSON,
23

T h a t ' s o u r d i s c o v e r y i f we e l e c t e d t o t a k e i t f r o m h i m .
- - l e t me - - l e t me b e c l e a r .

So I ' m

24
25

THE COURT:

Well - - go ahead.

23

1

MR. JACOBSON:

We w a n t t o r e s p o n d t o h i s v e n u e - b a s e d When I s a y t h a t I ' l l g e t

2

discovery as promptly as possible.

3
4

back to him in three days, I d o n ' t mean t h a t I ' l l produce
everything in three days. I will --

,
6

THE COUR:-:

Oh.

tom.

JACOBSON:

I will

p~oduce

everythir.g as

7 8
9
10

absolutely as quickly as I can.

But I w i l l get back to him on

what's possible, what's not possible, and what - - i f i t is - -

is

ove~

broad, and what I thi k i s appropriate, and - -

THE COURT:
that I 5 fine.

Okay.

B u t why - - I u n d e r s t a n d t h a t , a n d

11

I misinterpreted your offer.

But what's

w~ong

12

with h i s r i g h t now t e l l i n g you what he wants?

13
14
, tnat , s f'

MR. JACOBSON:
~.lne.

If he - - i f he wants to do that,

!

suspect h e ' l l want to do i t again when he sees

5
16

our venue motion, but i f he wants t o l e t us know what he wants
in the way o f discovery r e l a t i n g t o the venue i s s u e now, forward i t to the client and, as I said, a s q u i c k l y a s we c a n . THE C O U R T : All right. L e t ' s - - Hr. Rule, you can I can

17
18

I will get back to him

19 20 21 22 23 24 25

make a document demand returnable on ten d a y ' s notice whenever you wish. MR. RULE: Okay, Your Honor, and obviously, i f Google

s u b m i t s a d e c l a r a t i o n a s o p p o s e d t o t h e a c t u a l a g r e e m e n t s , we w o u l d w a n t t o r e s e r v e t h e r i g h t - - we m a y w a n t t o d e p o s e t h e declarant., depending on what t.hey, in facc, : i l e a t t.he t i n e of

24

the motion,

but --

2 3
4

MR. JACOBSON: here.

If he wants the agreement, i t ' s right

I t ' s right on the website that I cited in the l e t t e r .

It's--

5

THE COURT:

Well, but he's - - what he's saying i s

6 7 8
9
10
11

t h e r e a r e c l i c k s a t d i f f e r e n t times, and t h e r e may be d i f f e r e n t wording. He w a n t s t o s e e how t h a t d e v e l o p e d . MR. JACOBSON: And t h a t ' s a b s o l u t e l y t r u e , and - - but

not relevant for the reasons that I indicated earlier.
THE COURT:

No, I t h i n k y o u r r e a s o n s a r e y o u r w e b s i t e

says the l a s t one clicked on i s the operative one.
MR. JACOBSON:
THE COURT:

12

Correct.

13

That -- we're talking about discovery.

14
15

We're talking about relevant
law sui t .

things that are relevant to the
He d o e s n ' t

He h a s t h e a b i l i t . y t o t r a c k e a c h o n e .

16
17

have to r e l y on your statement that because i t says i t , i t ' s true. MR. JACOBSON:
THE C O U R T ;

18
t9 20

I couldn't agree with that more. [Pause] All right.

All right.

Ms. B l a k e l y , t h e p r e t r i a l c o n f e r e n c e h a v i n g b e e n h e l d
today, i t ' s hereby ordered
tha~

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25

p l a i n t i f f may send a document

demand to defendant returnable on ten days' notice.

Defendant

may m o v e t o d i s m i s s t h e c o m p l a i n t f o r i m p r o p e r v e n u e o r l a c k o f j u r i s d i c t i o n based on improper venue.
I'lr. Jacobson,

i s t h a t t h e 'day t o p h r a s e i t i n 1 i g h t

2S

of 12(0) (1)
2

and 12(b) (3)?

MR.

ACOBSON:

Yes.

One would be j u r i s d i c t i o n a l , and

3

three would be venue.
THE COURT: you were saying? MR. JACOBSON: Yes, Your Honor. All right.

·
5
6
7

By M a r c h 3 1 - - i s t h a t w h a t

THE COURT:

~r.

R u l e , when d o y o u w a n t t o r e s p o n d ?
i~ ~oving

8
9
10
11

Again. you're interested
.... a n t .

this, so i t ' s whenever

yo~

HR.

RULE:

.'e can respond in two weeks.
.~ll r i g h t .
About. A p r i l 1 5 t h .

THE: COURT: MR.

12

RULE:

just to pick a date.
April 15t.h i s two

13

THE: COURT:

That makes i t .l:l,.pril
That.'s

"
15

weeks anc one day.

all right..

Mr. Jacobson, a week to reply?

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17

MR. JACOBSON: THE COURT:

That's fine, Your Honor.

A p r i l 22 t o r e p l y .

18

I f there are any discovery disputes, which there

19 20
21
~

s h o u l d n o t b e o n t h i s n a r r o w i s s u e , w r i t e me a l e t t e r , a n d t h e o t h e r s i d e s h o u l d r e s p o n d w i t h i n a few d a y s , a n d I ' l l h a n d l e
it.
But!

i t seems

~o ~e

~here

shouldn't be any dispute.

You c a n b e r e l a t i v e l y t a r g e t e d i n y o u r d o c u m e n t r e q u e s t h e r e , Mr. R u l e . MR. RULE:
TH~

23

2'
25

Yes, Your Honor. All right. This case does not have the

COURT:

26

vibrations t h a t !
2

want in a l i t i g a t i o n .

T h e r e s e e m t o b e some
fo~ward.

post.uring.

But l e t ' s - - l e t ' s move i t

LeL's test i t

3
4

on the venue.

Anything else I can do for the parties?

5 6

Plaintiff?
MR. RULE:
THE COURT:

Not today, Your Honor.
All right.

7
8 9

Defendant?

MR. JACOBSON,
y o u t h a t Mr.

No, Y o u r H o n o r .

And I w i l l a s s u r e

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11
12

Rule and I will cooperate t o the maximum extent

possible within the bounds of representing our clients, and - -

THE COURT:
to seek
a~torney's

Right, as long as he knows you're going
1

13
\4

fees i f you win.

understand.

(LaL:ghter)

15

THS COURT:

Gentlemen, I understand completely
I

I was

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17
18

a lawyer a l o t more than - - longer than I was a judge.
understand.

MR. JACOBSON:

And i f I d o n ' t put t h a t on t h e r e c o r d ,

19

i t ' s not -- i t ' s not -- i t ' s a reality that i f I don't put i t on the record now,

20 21
22
23
24 25

we're goir.g to be told,
And t h e r e ' s

you know,
lo~

why d i d n ' t

y o u t e l l me t h a t l a t e r .

there's a

more
and

behind t h i s case than - - than i s before Your Honor today, hopefully you will never have to be beset with i t . But there

--

there's a l o t going on here,

and

hopefully i t will be the province of a c o - j u r i s t in San Jose,

27
California to confront those issues.
2

THE COURT:

1 have an a n t i t r u s t lawsuit here.

I have

3 4
5

a nascent motion to dismiss on the grounds tha governed by a mandatory forum selection clause.
handle that.

the dispute is

I think I can

6
7

Thank you a l l .

MR. JACOBSON:

~hank

you, Your Honor.

·
9

MR. RULE:

T h a n k y o u , Your H o n o r .

-'-

·

·

·

·

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I, KRISTIN M. RUSIN. court approved transcriptionist, certify that the foregoing is a correct transcript from t h e official electronic sound recording o f the proceedings in the above-entitled matter. Transcript is certified origin}ll o~ly ,~i s i g n e d in green ink.
-.:..~--_
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