Cygnus Systems, Inc. v. Microsoft Corporation, et al

Filing 177

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Cygnus Systems, Inc. v. Microsoft Corporation, et al Doc. 177 1 2 3 4 5 6 7 8 9 Gallagher & Kennedy, P.A. 2575 East Camelback Road Phoenix, Arizona 85016-9225 (602) 530-8000 Robert J. Itri (Bar No. 10938) GALLAGHER & KENNEDY, P.A. 2575 East Camelback Road Phoenix, Arizona 85016-9225 Telephone: (602) 530-8000 Facsimile: (602) 530-8500 Email: Attorneys for Plaintiffs UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA Health Information Services, Inc., an Arizona corporation; Frank C. Yaconis; and Barry W. Neel, Plaintiffs, v. DigiStor, Inc., an Arizona corporation; and Vincent J. Burr, Defendants. Rather than simply acknowledging their failure to comply with the Court's February 1, 2007 Order regarding the production of the ACT! Database, the Defendants spend much of their response blaming Plaintiffs for their non-compliance. First, Defendants blame their non-compliance on Plaintiffs' failure to respond to Defendants' invitation to arrange a time to review the ACT! Database contained in a February 2, 2007 No. CV06-2181-PHX-FJM REPLY IN SUPPORT OF MOTION FOR CIVIL CONTEMPT FOR FAILURE TO COMPLY WITH COURT'S ORDER OF FEBRUARY 1, 2007, RE ACT! DATABASE 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 1512330/16945-0010 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 letter to Plaintiffs--a letter that Defendants admit was never mailed to Plaintiffs.1 Response at 2. The absurdity of such contention is self-evident. Defendants also go on to blame Plaintiffs for failing to undertake any action to "promote" the production process. Response at 4. However, the Court's Order is clear and unequivocal: "Defendants shall, no later than February 9, 2007 produce for joint inspection by the parties, their lawyers and Plaintiffs' IT expert the ACT! Database . . ." The onus was on Defendants, not Plaintiffs, to undertake the steps necessary to initiate and produce the ACT! Database. Moreover, other than the phantom February 2, 2007 letter, Defendants made no effort--not a phone call, not an email, not a fax--to contact Plaintiffs to arrange for production of the ACT! Database. It was not until February 20, 2007, eleven days after the original production date ordered by the Court and eight days after Plaintiffs filed their motion for contempt, that Defendants ultimately made a copy of the ACT! Database available to Plaintiffs for inspection.2 Defendants also spend considerable time in their Response and supporting declaration of counsel discussing their "good faith" acts in "voluntarily" producing to Plaintiffs two CDs containing what they contend are "insignificant" business records of HIS. Response at 2; Declaration of James Mackinlay at 2,3. Aside from the lack of relevance to the instant motion, these purportedly "insignificant" materials are comprised of numerous HIS customer contracts and employee files, which, when printed, generated a paper stack 12 inches high. These materials are anything but "insignificant" and are the exact records Defendants were ordered to produce to Plaintiffs under the October 6, 2006 Injunction (Doc. 15), the non-production of which formed the basis for Plaintiffs' original Motion for Contempt (Doc. 19). 2 1 The original ACT! Database is located in Ohio and resides on the computer of DigiStor sales representative, Keith Anderson. Response at footnote 1. The February 20, 2007 2 1519771/16945-0010 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Finally, Defendants attempt to chalk up their non-compliance with the Court's Order to human error. Response at 3. This, however, is not the first time that Defendants claim to have failed to comply with an order of this Court due to human error. As the Court will recall, during the January 17, 2007, evidentiary hearing on Plaintiffs' Motion for Civil Contempt, Defendants contended that their failure to timely file with the Court a notice outlining the steps they had taken to comply with the October 6, 2006 Order of Injunction was due to a calendaring oversight. Although the Court chose to accept Defendants' excuse and not find them in contempt for such "oversight," it appears that such repeated instances of non-compliance with this Court's orders cannot be attributed to mere "human error", but are due to Defendants' failure to respect the authority of this Court and its orders. However, whatever the case may be, the burden of ensuring Defendants' compliance with this Court's Order should not be made to continue to fall upon the shoulders (and pocketbook) of Plaintiffs. As the evidence of Defendants' non-compliance with the Courts' February 1, 2007 Order is indisputable, the Court should find Defendants in contempt and impose upon inspection of the copy of the ACT! Database revealed that there are approximately 1,900 contacts contained in the customer database. See Declaration of Robert J. Itri at 7. In addition, the database reflects numerous historical contacts made to existing HIS customers and prospective customers that were not disclosed to Plaintiffs on the Excel spreadsheet of customer contacts produced to Plaintiffs by Defendants after entry of the October 6, 2006 Injunction (submitted as Plaintiffs' Exhibit No. 2 at January 17, 2007 Contempt Hearing ). Id at 8. For example, the database discloses 159 historical contacts to the Mayo Clinic between April 2001 and June 29, 2006, none of which were disclosed on the spreadsheet. Id. 1519771/16945-0010 3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Defendants such sanctions as to ensure future compliance with its orders and to compensate Plaintiffs for their efforts to enforce Defendants' compliance including (1) an award to Plaintiffs' of their costs, expenses and attorneys' fees in prosecuting this motion; (2) an award to Plaintiffs' of their costs, expenses and attorneys' fees in attending the February 20, 2007 production of the ACT! Database; (3) an order directing Defendants to produce to Plaintiffs on or before February 28, 2007, an unredacted copy of the ACT! Database currently in their possession; and 4) such other relief as the Court deems proper. DATED this 21st day of February, 2007. GALLAGHER & KENNEDY, P.A. By s/Robert J. Itri Robert J. Itri 2575 East Camelback Road Phoenix, Arizona 85016-9225 Attorneys for Plaintiffs I hereby certify that on February 21, 2007, I electronically transmitted the attached Document to the Clerk's Office using the CM/ECF System for filing and transmittal of a Notice of Electronic Filing to the following recipients: James N. MacKinlay, Esq. Warnock MacKinlay & Associates PLLC 1019 South Stapley Mesa, Arizona 85204 Attorneys for Defendants s/Lori M. Lucas 1519771/16945-0010 4

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