Asia Economic Institute et al v. Xcentric Ventures LLC et al

Filing 87

EX PARTE APPLICATION to Continue the determination of, or denying, Defendants' Motion for Summary Judgment from July 12, 2010 to At the Court's discretion Re: MOTION for Summary Judgment as to Entire Case 40 , EX PARTE APPLICATION to Enforce Order to Compel Continued Deposition of Defendant Edward Magedson, EX PARTE APPLICATION for Sanctions Local Rule 83.7, Local Rule 37-4, and this Court's inherent authority filed by Plaintiffs Asia Economic Institute, Iliana Llaneras, Raymond Mobrez. (Attachments: # 1 Exhibit 1 to Declaration of Lisa J. Borodkin, # 2 Exhibit 2 to Declaration of Lisa J. Borodkin, # 3 Exhibit 3 to Declaration of Lisa J. Borodkin, # 4 Exhibit 4 to Declaration of Lisa J. Borodkin, # 5 Exhibit 5 to Declaration of Lisa J. Borodkin, # 6 Exhibit 6 to Declaration of Lisa J. Borodkin, # 7 Exhibit 7 to Declaration of Lisa J. Borodkin, # 8 Exhibit 8 to Declaration of Lisa J. Borodkin, # 9 Exhibit 9 to Declaration of Lisa J. Borodkin, # 10 Exhibit 10 to Declaration of Lisa J. Borodkin, # 11 Exhibit 11 to Declaration of Lisa J. Borodkin, # 12 Exhibit 12 to Declaration of Lisa J. Borodkin, # 13 Exhibit 13 to Declaration of Lisa J. Borodkin, # 14 Exhibit 14 to Declaration of Lisa J. Borodkin, # 15 Exhibit 15 to Declaration of Lisa J. Borodkin, # 16 Exhibit 16 to Declaration of Lisa J. Borodkin, # 17 Exhibit 17 to Declaration of Lisa J. Borodkin, # 18 Exhibit 18 to Declaration of Lisa J. Borodkin, # 19 Exhibit 19 to Declaration of Lisa J. Borodkin, # 20 Exhibit 20 to Declaration of Lisa J. Borodkin, # 21 Exhibit 21 to Declaration of Lisa J. Borodkin, # 22 Exhibit 22 to Declaration of Lisa J. Borodkin, # 23 Exhibit 23 to Declaration of Lisa J. Borodkin, # 24 Exhibit 24 to Declaration of Lisa J. Borodkin, # 25 Exhibit 25 to Declaration of Lisa J. Borodkin, # 26 Exhibit 26 to Declaration of Lisa J. Borodkin, # 27 Exhibit 27 to Declaration of Lisa J. Borodkin, # 28 Exhibit 28 to Declaration of Lisa J. Borodkin, # 29 Exhibit 29 to Declaration of Lisa J. Borodkin, # 30 Exhibit 30 to Declaration of Lisa J. Borodkin, # 31 Exhibit 31 to Declaration of Lisa J. Borodkin, # 32 Exhibit 32 to Declaration of Lisa J. Borodkin, # 33 Exhibit 33 to Declaration of Lisa J. Borodkin, # 34 Exhibit 34 to Declaration of Lisa J. Borodkin, # 35 Exhibit 35 to Declaration of Lisa J. Borodkin, # 36 Exhibit 36 to Declaration of Lisa J. Borodkin, # 37 Exhibit 37 to Declaration of Lisa J. Borodkin)(Borodkin, Lisa)

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Asia Economic Institute et al v. Xcentric Ventures LLC et al Doc. 87 Att. 1 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 UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA --- THE HONORABLE STEPHEN V. WILSON, U.S. DISTRICT JUDGE PRESIDING ) ) ) Plaintiffs, ) ) vs. ) ) ) XCENTRIC VENTURES, LLC, et al. ) ) Defendants. ) _______________________________) ASIA ECONOMIC INSTITUTE, LLC, et al., No. CV 10-1360-SVW REPORTER'S TRANSCRIPT OF PROCEEDINGS LOS ANGELES, CALIFORNIA MONDAY, APRIL 19, 2010 _____________________________________________________________ DEBORAH K. GACKLE, CSR, RPR United States Courthouse 312 North Spring Street, Room 402A Los Angeles, California 90012 (213) 620-1149 UNITED STATES DISTRICT COURT, CENTRAL DISTRICT OF CALIFORNIA COURT REPORTER DEBORAH K. GACKLE Dockets.Justia.com 2 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 ----LAW OFFICES OF DAVID S. GINGRAS BY: DAVID S. GINGRAS 4072 E. Mountain Vista Drive Phoenix, Arizona 85048 For the Defendant: ASIA ECONOMIC INSTITUTE BY: LISA J. BORODKIN BY: DANIEL F. BLACKERT 11766 Wilshire Boulevard, Suite 260 Los Angeles, California 90025 For the Plaintiff: APPEARANCES OF COUNSEL: UNITED STATES DISTRICT COURT, CENTRAL DISTRICT OF CALIFORNIA COURT REPORTER DEBORAH K. GACKLE 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 THE CLERK: Item 14, CV 10-1360-SVW, Asia Economic LOS ANGELES, CALIFORNIA; MONDAY, APRIL 19, 2010; 2:15 P.M. ----- Institute, et al. versus Xcentric Ventures, LLC, et al. Counsel, please state your appearances. MR. GINGRAS: Good afternoon, Your Honor. David Gingras on behalf of defendants Xcentric Ventures, LLC, and imagine in son. MS. BORODKIN: Good afternoon, Your Honor. Lisa Borodkin for the plaintiffs. MR. BLACKERT: Good afternoon, Your Honor. Daniel Blackert for the plaintiffs. THE COURT: The court has thoroughly considered the defendants' anti-SLAPP motion, and the court has prepared a very elaborate order which is quite comprehensive, and that order will issue in a day or so and will more fully explain why the motion is denied. Having said that, the next matter is the defense motion for a RICO statement, and given the relative straightforwardness of the allegations, I don't think that's necessary. So I'm going to deny that motion. How are they proceeding by I'll set a trial Let me ask the parties: way of discovery? Is there a trial date set? date, but what do you -- plaintiff I'll ask first -- envision UNITED STATES DISTRICT COURT, CENTRAL DISTRICT OF CALIFORNIA COURT REPORTER DEBORAH K. GACKLE 4 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 presenting as you -- take the lectern, if you would, sir -- by way of evidence, realizing that you haven't had discovery which may shape some of your approaches. you expect to present your case? MR. BLACKERT: discovery. THE COURT: I didn't ask you that. I said what would As of now, we would like to do But as of now, how would you do knowing what you know now? In other words, the basic allegation is that the defendant had this website, ripoff.com, in which it posted comments by parties who had views, critical views, of companies, among those are your client; and your position, in its broadest sense, is that the defendant then approached you, your client, and said, Join our program. If you join our program for a fee, we will post a notice on the part of our site which was critical of your company that you have joined this program and are in some sense of rehabilitation, something like that, and you're claiming that you're being compelled to join that program is an act of extortion. MR. BLACKERT: THE COURT: Correct, Your Honor. Yes. So is there a dispute as to what was posted? MR. BLACKERT: posted, Your Honor. THE COURT: Is there a dispute that -- or do you There is not a dispute as to what was UNITED STATES DISTRICT COURT, CENTRAL DISTRICT OF CALIFORNIA COURT REPORTER DEBORAH K. GACKLE 5 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 envision a dispute as to whether the defendant asked you to join this CAP program? MR. BLACKERT: dispute -THE COURT: Is there any documentary or written I do believe there would be a communications regarding your being asked to join this CAP program? MR. BLACKERT: Yes, Your Honor. There are several emails between my client and defense -- the defendant Edward Magedson, where Magedson is -- explicitly refers to the CAP program and breaks it down and asks my client to join the CAP program. More specifically, there is a very specific email from Mr. Magedson to my client where he is verbally upset at my client for not joining the program and not submitting the proper paperwork for the program. So, yes, there is clear evidence of that issue. THE COURT: And so if there is clear evidence of that fact, what other evidence do you have now regarding that being an act of extortion? Isn't there another spin that could be placed on that request? MR. BLACKERT: Yes. It's our position that the defendant had done this under -- put our client in a position of duress, basically, that these posts would not be investigated, these posts would not be looked at, nothing would be resolved at all until money was paid. So he put our client UNITED STATES DISTRICT COURT, CENTRAL DISTRICT OF CALIFORNIA COURT REPORTER DEBORAH K. GACKLE 6 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 in a position to -THE COURT: Is that what was said in the emails, or is that something that would be the subject of oral testimony? MR. BLACKERT: Honor, yes. THE COURT: In other words, you say that you have That was said in the emails, Your emails where the defendant said to your client, Unless you join the CAP program, defendant won't investigate these postings, which are critical? MR. BLACKERT: THE COURT: That's correct. He said -Why And so let's say that that is fact. does that equal extortion? MR. BLACKERT: Well, because the -- we feel that our client was compelled to pay the money or basically suffer the damage of having these posts up for the rest of -- however they may exist indefinitely -THE COURT: Why couldn't the defendant say that, We We don't have this business where we allow these postings. investigate whether these postings are true or false, but if these postings are adverse and you want us to investigate, you have to join this program? Isn't that sort of the essence of -- you're shaking your head. Is that a yes? MR. GINGRAS: agreement. Yes, Your Honor. I'm nodding in To some extent, I'm agreeing with you. UNITED STATES DISTRICT COURT, CENTRAL DISTRICT OF CALIFORNIA COURT REPORTER DEBORAH K. GACKLE 7 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 me? MR. GINGRAS: Well, because I think the program THE COURT: To what extent are you not agreeing with involves a heck of a lot more than just posting something favorable on top of something negative. THE COURT: But the defendant is in business, and the defendant is saying, We have this business where we allow postings, and we don't create the postings, correct? MR. GINGRAS: THE COURT: Correct. They're created by third parties. Right. MR. GINGRAS: THE COURT: or false, correct? MR. GINGRAS: THE COURT: We don't pass upon whether they're true Correct. And then if they're on and you -- if the company who was the subject of the posting wants us to investigate, something like, I would say, public advocate, but you're sort of like a private advocate, correct? MR. GINGRAS: THE COURT: Correct. You would do it, but you want to be compensated because it takes time and effort. MR. GINGRAS: position -THE COURT: Is that what the CAP program is? Yes. And our position would be, Your Right, and that would -- our MR. GINGRAS: UNITED STATES DISTRICT COURT, CENTRAL DISTRICT OF CALIFORNIA COURT REPORTER DEBORAH K. GACKLE 8 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 Honor, that there are multiple options available to people that are in the plaintiffs' position. The CAP program is only one of them, and that is the only one that has any -THE COURT: Let me get to that in a minute. Sure. MR. GINGRAS: THE COURT: So at this point, your principal evidence is contained in these -- in what is not in dispute, that is, these postings and the emails, correct -MR. BLACKERT: THE COURT: Correct -- -- at this point? At this point, and also there is some MR. BLACKERT: other evidence that the defendants on their website encourage people to make these posts as defamatory as possible. They tell people to craft the post to make them as damning as possible to put the business in the worse light. THE COURT: Where does that come from? That appears right on their website -- MR. BLACKERT: THE COURT: What is the specific language? The specific language is -- it is in MR. BLACKERT: our motion papers. but it is in there. THE COURT: lie, are they? MR. BLACKERT: believe so. I don't have it off the top of my head now, I believe they offer to help -But they're not telling these people to Oh, no, Your Honor. No, I do not UNITED STATES DISTRICT COURT, CENTRAL DISTRICT OF CALIFORNIA COURT REPORTER DEBORAH K. GACKLE 9 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 question. THE COURT: its position was. Well, I mean I asked the plaintiff what phonetic. THE COURT: Maybe they're telling them to be as graphic as they can, correct? MR. BLACKERT: THE COURT: Correct. I see. Let me hear from you, Mr. -MR. GINGRAS: Your Honor, I'll help you with the It's "Gin" like the drink and grass like you mow but only one "s," and you say it just that way, Gingras. THE COURT: Gingras. Tell me what your position is beyond that which we've already discussed. MR. GINGRAS: I'm not sure if I understand your They're relying on the emails and the postings, and I've suggested to the plaintiff that there could be a very business-oriented reason for what the plaintiff claims is extortion, that is, that defendant doesn't pass upon the truth or accuracy or intention of the posting. MR. GINGRAS: THE COURT: Right. And then if there's an adverse posting, it approaches the company or party and says, If you want us to investigate this posting, you can join this program, which, in effect, as I understand it, compensates you for that effort. MR. GINGRAS: Right. UNITED STATES DISTRICT COURT, CENTRAL DISTRICT OF CALIFORNIA COURT REPORTER DEBORAH K. GACKLE 10 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 be -THE COURT: Is there something I'm missing? So far you're doing pretty well. It THE COURT: relationship. MR. GINGRAS: Right. And, Your Honor, I think to So that sounds like a business MR. GINGRAS: gets a little more complicated. THE COURT: complication is. MR. GINGRAS: The complications are the fact that Go ahead and tell me what the we've been focusing on -- what I just heard Your Honor talking about -- was this extortion/RICO component of the case, which I think is a very, very small component of this case. cases identical to this one in the past. We've had Every single one of those times the plaintiff dropped the RICO claims from the case either voluntarily or as a result of the court ordering them to file a RICO case statement. here but regardless -THE COURT: There's still summary judgment. Sure, absolutely, but the RICO claims I understand that is not happening MR. GINGRAS: we've seen in other cases have gone away; they've never been litigated, they've never been, sort of, more fully investigated. So to some degree I'm writing on a blank slate and I'm not sure where we'll go with it. But the reason I say it's more complicated is this UNITED STATES DISTRICT COURT, CENTRAL DISTRICT OF CALIFORNIA COURT REPORTER DEBORAH K. GACKLE 11 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 case has a lot of other aspects to it. There are defamation claims, and I understand the plaintiff doesn't want to talk about those because that would get back into the issue of the Communications Decency Act and whether they can even impose liability on a website for statements that we didn't write. As -THE COURT: But the defamation was not something you created, it was just something you posted on your site. MR. GINGRAS: I would agree with that, but I don't They've argued -- and I've think they would agree with that. seen this in other cases that we've prevailed on summary judgment, if the claim is a third party wrote something, and I want to hold the website responsible for it, everyone knows the Communications Decency Act bars that claim, and we've won that argument so many times that what's happened is plaintiffs have tried to get more creative; and this is exactly what the Ninth Circuit cautioned about in the recent Roommates Two case. You sort of see creative lawyering coming into play as far as what the plaintiff claims happened. This case is extremely simple, Your Honor. The plaintiff approached us, approached ripoffreport, and said I have the four reports -- or how many at the time -- what can be done about them? site -THE COURT: Is that in writing? And Mr. Magedson, who is the editor of the UNITED STATES DISTRICT COURT, CENTRAL DISTRICT OF CALIFORNIA COURT REPORTER DEBORAH K. GACKLE 12 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 MR. GINGRAS: THE COURT: Yes, yes. In other words, you have writings that would support your argument that the plaintiff approached the defendant and said, in words or effect, How can we remove or temper the effect of these postings? MR. GINGRAS: Exactly. It begins with the plaintiff sending an email to rippoffreport saying, I contacted your office by phone. I wasn't able to speak to anybody. What can be done about these reports? And then Mr. Magedson follows up to that inquiry with this kind of 10-page-long email which talks about his philosophies on life and a lot of other things I've asked him not to get into. But in any event, there's a reference in this long response email -- which is a form email that goes to everybody -- there is a reference in there to the corporate advocacy program, and plaintiff is trying to characterize that as a threat of extortion. our head and demanded money. They put a gun to Your Honor, the evidence is just not going to bear that out in any way. So to some degree, I think if you're talking about the extortion, the facts that give rise to it, I believe are going to be undisputed to the extent that they're based on these emails. There also was one or two or maybe more phone calls. I don't know -- because I haven't taken any discovery yet, I don't know that the plaintiff is going to claim was said in UNITED STATES DISTRICT COURT, CENTRAL DISTRICT OF CALIFORNIA COURT REPORTER DEBORAH K. GACKLE 13 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 those calls. So there may be some factual disputes about that. But then the other part of the case that relates to these defamation claims and then this also tortious interference claims and an unfair business practices claim, that is a very different and fact-intensive issue to deal with, Your Honor. There's always the issue of truth. I always investigate whenever anyone sues the ripoffreport for defamation, we try to defend on the CEA and say it's not our responsibility at all, but to err on the side of caution, we also investigate the truth of the statements. So we need to expect there would be discovery on those issues. THE COURT: I have enough of a sense from your presentation where you think the case is going. When will you be ready to try the case? MR. BLACKERT: THE COURT: As soon as possible, Your Honor. Stand up when you address the court. You would be ready to try the case next month? MS. BORODKIN: Absolutely, Your Honor. We'd be happy We to try as soon as possible. We just want our day in court. That would have not exchanged initial disclosures yet. definitely hasten our ability. THE COURT: You have to do that. So I'm going to order you within 10 days of today to arrange a meeting to do that. UNITED STATES DISTRICT COURT, CENTRAL DISTRICT OF CALIFORNIA COURT REPORTER DEBORAH K. GACKLE 14 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 time. MS. BORODKIN: THE COURT: Very good. Thank you. And given the arguments, it seems to me that the extortion aspect of the case is very straightforward, and what I intend to do is bifurcate the case. So we'll only address extortion, RICO extortion, and I'll set a trial on the RICO extortion case, and we'll go from there. So to be realistic, understanding that the parties are anxious for a trial, I'll set the case for trial, unless I hear some objection, beginning of August. MS. BORODKIN: THE COURT: Very good. Summary judgment motions can be filed any In other words, you can file a summary judgment motion Based on what you've two, three weeks, four weeks from now. said, I suspect you will. MR. GINGRAS: Your Honor, first of all, I've been involved in, like I said before last week, dozens and dozens of these cases. I've never seen one that was resolved in less I realize that than 12 to 18 months in terms of discovery. what Your Honor just did in terms of the bifurcation makes that a lot simpler, but I have no idea what the plaintiffs' extortion claim is based on in terms of verbal allegations, and I also -THE COURT: Hold on. Tell you what I'm going to do: I want you to prepare declarations of -- how many witnesses are actually involved in this extortion aspect of the case from UNITED STATES DISTRICT COURT, CENTRAL DISTRICT OF CALIFORNIA COURT REPORTER DEBORAH K. GACKLE 15 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 correct? MR. BLACKERT: THE COURT: That's correct, Your Honor. your side? I'm not talking about the other side. In other words, who is going to say that they were in a conversation that had an extortion flavor? MR. BLACKERT: I believe it would just be the two individuals in the conversation. THE COURT: Who are they? My client and Ed Magedson. Raymond Mobrez. Raymond Mobrez. MR. BLACKERT: MS. BORODKIN: MR. BLACKERT: THE COURT: That would be the defendant, right? One of the plaintiffs and the MR. BLACKERT: defendant Edward Magedson. THE COURT: From your side, there's only one witness, So I want you within two weeks to file a declaration wherein your client describes each and every meeting that he had with any representative of the defendant to state in specifics when the meeting occurred, who was present, what the plaintiff said, what the defendant said; and I want it to be set forth in a way that doesn't incorporate conclusions. In other words, I don't want the witness to then say, He said this to me, and I interpreted it to mean this. It was a meeting, how the meeting started, who called whom, if there are notes that relate to the meeting, if there are emails that UNITED STATES DISTRICT COURT, CENTRAL DISTRICT OF CALIFORNIA COURT REPORTER DEBORAH K. GACKLE 16 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 claim. claims. THE COURT: But that's not relevant to the extortion relate to the meeting, if there are emails that exist aside from the meetings, all that, okay? And then once you have that, then I want you to do the same with your client, respond. And then if after looking -- now, in terms of discovery, what kind of discovery would you be looking towards? You want a quick trial date so you don't want a lot of discovery, correct? MS. BORODKIN: THE COURT: Correct. Your Honor, and -- In other words, the way I'm understanding it -- and don't let me put words in your mouth -- from your standpoint, you're pretty well ready to go based upon what you think you have. MS. BORODKIN: We're willing and ready to call witnesses and examine them in front of the court and ask them what's the basis of the defense. In other words, the minimum discovery -- he's saying they didn't write it, so who did? We'd like them to identify -THE COURT: Didn't write what? The posts that are the subject of the MS. BORODKIN: The defendant is not going to say that they didn't They're in a business. Here's a site, And then their write the postings. post what you want, that's their business. business is, If you want us to investigate the accuracy of UNITED STATES DISTRICT COURT, CENTRAL DISTRICT OF CALIFORNIA COURT REPORTER DEBORAH K. GACKLE 17 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 these things, then you join our program. program; they didn't investigate. You didn't join the That's their position. So what is it that you are going to seek by way of discovery? MS. BORODKIN: Well, Your Honor, I would just take issue with the characterization that their business is post what you want. it's negative. THE COURT: But how would you argue that? From what We would say it's post what you want as long as evidence that you know of now? MS. BORODKIN: We would say that we know of evidence that has come to light in other cases in which there's been testimony that the defendant has encouraged negative postings particularly targeted at profitable companies. In other words, to identify selectively businesses that would be a good target -THE COURT: what they do. Well, let's say, for example, that that's Let's say that they say, You know, we're going to have a site and we're going to find out if there's some negative stuff that exists out there about otherwise successful companies. Is that actionable? I mean isn't that what happens all the time? I mean isn't that at the heart of journalism? Isn't that what American journalism is about? MS. BORODKIN: THE COURT: Yes and no, Your Honor. Did the L.A. Times ever write an article UNITED STATES DISTRICT COURT, CENTRAL DISTRICT OF CALIFORNIA COURT REPORTER DEBORAH K. GACKLE 18 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 that Luftansa landed safely at 7:47 yesterday at L.A.? a story? MS. BORODKIN: THE COURT: Your Honor -Is that I mean journalists are constantly looking to find stuff that is of interest that sort of goes against the grain, and if that's what they're doing, in other words, if they're interested in having people talk about negative experiences they had with -- I don't know -- doctors, companies, whatever, I mean so what? MS. BORODKIN: Well, Your Honor, we don't think We don't think they play the same The that's what they're doing. role as the L.A. Times. They are not objective. difference is people have tried to report their own business -THE COURT: I suppose the newspapers are objective? You're correct, Your Honor. MS. BORODKIN: THE COURT: Why don't you sue the L.A. Times? Because the L.A. Times is not offering MS. BORODKIN: to change the content that they distribute if we pay them. THE COURT: Well, that is at the heart of the case. I mean, in other words, the fact that they may be in the business of trying to find some negative things about otherwise successful companies, that doesn't strike me, unless I'm persuaded by other evidence, that that is inherently bad. And if they then say under the guise of investigating, Pay me a certain amount to join my club, maybe you get closer to UNITED STATES DISTRICT COURT, CENTRAL DISTRICT OF CALIFORNIA COURT REPORTER DEBORAH K. GACKLE 19 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 motions? MS. BORODKIN: Some of them we do and some of them we them? MS. BORODKIN: THE COURT: judgment motions? MS. BORODKIN: THE COURT: Correct. Not that I know of. correct? MS. BORODKIN: THE COURT: Correct. extortion, but that's why I wanted to ask you what is it that you want to pursue in terms of discovery? You want to depose -- what is the gentleman's name, the defendant? Starts with an "M," is it? Yes, we did Edward Magedson. Is he MS. BORODKIN: THE COURT: Who else do you want to depose? the principal person at the company? MS. BORODKIN: MR. GINGRAS: THE COURT: Yes, he is. Yes. And so it seems to me you probably know a lot about the company's position and their business approaches, because there have been other lawsuits, right? MS. BORODKIN: THE COURT: Correct. And you're aware there's other lawsuits, Have those lawsuits gone to trial, any of And have they been the subject of summary Do you have those summary judgment UNITED STATES DISTRICT COURT, CENTRAL DISTRICT OF CALIFORNIA COURT REPORTER DEBORAH K. GACKLE 20 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 don't. THE COURT: Mr. Magedson -MS. BORODKIN: We don't, Your Honor, because each So you probably already know what this case is different on the facts. THE COURT: general notion. MS. BORODKIN: THE COURT: trial date in August. MS. BORODKIN: THE COURT: Absolutely not. We embrace it. Yes, Your Honor. All right. Well, at least you have some And so you're not objecting, then, to the I see. Unless there's -- they have the burden here, and the case is bifurcated, and unless you can show me why you need more time -- obviously, you're going to take his deposition. weeks. You're going to have his position in two So that certainly should make your deposition more I'm trying to make it as helpful to you and to the meaningful. defendant -- the plaintiff by giving your side of the story to them. You do that within 10 days of your getting his, okay? And then unless something comes up that puts this off track, I would suspect that at some point, given what I've heard, you're going to test their case with a summary judgment motion. MR. GINGRAS: Correct. But, Your Honor, could I go UNITED STATES DISTRICT COURT, CENTRAL DISTRICT OF CALIFORNIA COURT REPORTER DEBORAH K. GACKLE 21 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 them. back to something else? I think I would be remiss if I didn't explain to you my clear and strong objection to what the plaintiffs are proposing in terms of an August trial date is just totally and completely unrealistic, and let me tell you why. I don't think this is a declaratory relief case; I think that they're looking for damages. I don't know what those damages are because it seems undisputed that the plaintiffs paid nothing to ripoffreport. THE COURT: Can I help you for a moment on that? Yes. MR. GINGRAS: THE COURT: I'm also bifurcating damages. Okay. So if the issue for trial, then, MR. GINGRAS: is did extortion occur, the only -- the removal of damages from that is helpful, but I don't think it's necessarily the only simplification that matters because, Your Honor, I am certain, I just know in my heart that the argument that plaintiffs are going to make is going to be an emotional one based on these statements are false. It is an entirely different case if they -- I understand we're not litigating the defamation claims, but they're going to use them anyway. THE COURT: They're not. MR. GINGRAS: THE COURT: If the plaintiffs -I'm the Well, look, they're not going to use They are not going to use them. UNITED STATES DISTRICT COURT, CENTRAL DISTRICT OF CALIFORNIA COURT REPORTER DEBORAH K. GACKLE 22 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 judge here, and not the plaintiffs, and I don't see any way that these -- the truth or falsity of these statements gets into the case because -- unless the plaintiff can show that you knew they were false, and that's not their premise. Their premise is that you encourage people to come out of the woodwork to say bad things -- to paraphrase the great book about good people, you know, the book, Why Bad Things Happen to -MR. GINGRAS: that book, Your Honor. THE COURT: And so anyway, I'm going to keep the But, you I think I was personally featured in dates, and then we'll be flexible if we have to. know, I'll know more when you make your summary judgment motion, and I'll react accordingly. So the date is when again, Paul? THE CLERK: THE COURT: August 3rd at 9:00 a.m. And the pretrial the day before. And the And you trial is bifurcated, RICO extortion only, no damages. can set a motion any time that you feel you have the wherewithal to make it. MR. GINGRAS: It almost sounds like I could ask for clarification if I need to move in limine to exclude the plaintiff from referring to the statements as false or how are we going to deal with that? THE COURT: I would think you just make the motion UNITED STATES DISTRICT COURT, CENTRAL DISTRICT OF CALIFORNIA COURT REPORTER DEBORAH K. GACKLE 23 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 and then respond. limine. Thank you. MS. BORODKIN: Thank you, Your Honor. And for I don't think you have to make any motion in clarification, you're ordering that the parties meet and confer about initial disclosures? THE COURT: have to do. MS. BORODKIN: THE COURT: THE CLERK: August 2nd. THE COURT: And it is true you have to meet and Thank you, Your Honor. I don't clarify. I told you what you Thank you. Pretrial conference will be at 3:30, confer within 10 days and don't forget the schedule about the declarations. MR. BLACKERT: THE COURT: Yes, Your Honor. Thank you. Thank you, Your Honor. Thank you, Your Honor. MR. GINGRAS: MR. BLACKERT: (Proceedings concluded at 2:45 p.m.) ----- UNITED STATES DISTRICT COURT, CENTRAL DISTRICT OF CALIFORNIA COURT REPORTER DEBORAH K. GACKLE 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 CERTIFICATE I hereby certify that the foregoing is a true and correct transcript from the stenographic record of the proceedings in the foregoing matter. May 4, 2010 __________________________ Deborah K. Gackle Official Court Reporter CSR No. 7106 ___________________________ Date UNITED STATES DISTRICT COURT, CENTRAL DISTRICT OF CALIFORNIA COURT REPORTER DEBORAH K. GACKLE

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