LegalZoom.com Inc v. Rocket Lawyer Incorporated

Filing 162

REPLY MOTION to Supplement Factual Record in Opposition to Defendant Rocket Lawyer Incorporated's Motion for Summary Judgment 143 filed by Plaintiff LegalZoom.com Inc. (Attachments: # 1 Declaration of Fred D. Heather)(Heather, Fred)

i PATRICIA L. GLASER -State Bar No. 55668
pglaser glaserweil.com
FRED .FEATHER -State Bar No. 110650
2
fheather~a,glaserweil.com
3 AARONZ'. ALLAN -State Bar No. 144406
aallan glaserweil.com
4 GLAS R WEIL FINK HOWARD
AVCHEN & SHAPIRO LLP
10250 Constellation Boulevard, 19th Floor
5
Los Angeles, California 90067
6 Telephone: [phone]
Facsimile: 310 556-2920
Attorneys for Plaintiff
LegalZoom.com,Inc.
s
9

UNITED STATES DISTRICT COURT

l0

CENTRAL DISTRICT OF CALIFORNIA

it

WESTERN DIVISION

;~
_F

~~ ~.
~' o

o ~a
~~ ~
ra
--,s
~:E ,:~~
~~ ~
~~~
_:„
'~' >
~~~
~~ o

I2
13

LEGALZOOM.COM,INC., a Delaware
corporation,

~a

Plaintiff,

> s Iv.
t6 ROCKET LAWYER INCORPORATED,
a Delaware corporation,

~~_
Defendant.
ig

CASE NO.: CV 12-9942-GAF(AGE)
Hon. Gary A. Feess
Courtroom: 740
DECLARATION OF FRED
HEATHER IN SUPPORT OF
REPLY MEMORANDUM OF
POINTS AND AUTHORITIES IN
SUPPORT OF
LEGALZOOM.COM,INC'S
MOTION TO SUPPLEMENT
FACTUAL RECORD

19

20

October 27, 2014
Date:
Time:
9:30 a.m.
Courtroom: 740

zi
22

Complaint Filed: November 20, 2012

23
24
25
26
27
28
DECLARATION OF FRED HEATHER RE REPLY 1N SUPPORT OF MOTION TO SUPPLEMENT FACTUAL
RECORD
953908

DECLARATION OF FRED HEATHER
2

I, FRED HEATHER,declare as follows:

3

1.

4

I am an attorney admitted to practice in this Court, and a partner with the

law firm Glaser Weil Fink Howard Avchen &Shapiro LLP, counsel of record for the

s plaintiff LegalZoom.com, Inc. If called to testify as a witness, I could and would
6

truthfully and competently testify to the following of my own personal knowledge.
2.

Attached hereto as Exhibit A is a true and correct copy of rough

s transcript excerpts from the deposition of Charles Moore,taken by me on October 9,
9 2014, in San Francisco, California.
3.

Attached hereto as Exhibit B is a true and correct copy of rough

transcript excerpts from the deposition of Alisa Weiner, which I attended on
~, o

is September 23, 2014, in San Francisco, California.

o'
'a
~'? ~
~i~
—+

13

~ c
u'!~

14

c/~
~'.~s

v

~` >
~~~
~' L

a~ ~
~' 3
'~ ` o
C7E2

4.

Attached hereto as Exhibit C is a true and correct copy of rough

transcript excerpts from the deposition of Pete Franco, which I attended on October 3,

>s 2014, in Los Angeles, California.
16

5.

Attached hereto as Exhibit D is a true and correct copy of a letter from

]7

Rocket Lawyer's counsel, Michael Jones, which was emailed and received by my

18

office on October 10, 2014.

19

6.

Attached hereto as Exhibit E is a true and correct copy of a letter which

Zo my partner Aaron Allan sent in response to M. Jones on October 13, 2014.
2~
22
23

I declare under penalty of perjury under the laws of the United States of
~ America and the state of California that the foregoing is true and correct.
Executed this 13th day of October, 2014, at Los Angeles, California.

24
25
26

Fred D. Heather

27
28
l
DECLARATION OF FRED HEATHER RE REPLY IN SUPPORT OF MOTION TO SUPPLEMENT FACTUAL
RECORD
953908

EXHIBITS A – C
ARE REDACTED IN THEIR ENTIRETY
AND FILED UNDER SEAL

EXHIBIT D

GOODWIN ~ PROCTER

Michael T.lones
650.752.3279
mjQnes~goodwin r~ rode r.ca m

Goodwin Procter uP
Counselors at Law
135 Commonwealth Drive
Menlo Park, CA 94025-1105
T: 650.752.3100
F: 650.853.7038

October 10, 2014
VGA E MAIL
Aaron 1'. Allan ([e-mail])
Glaser Weil Fink Jacobs Howard Avchen &Shapiro L~,P
10250 Constellation Boulevard, 19th Floor
Los Angeles, CA 40067
Re:

LegalZoom.com,Inc. a Rocket Lawyer Incorporated

Dear Aaron:
We are in receipt of your October 8, 2014, response to our October 6letter regarding your
nonproduction ofthe WTR Surveys and your noncompliance with the Protective Order.
Despite your assertions to the contrary, LegalZoom has not complied with its discovezy
obligations, LegalZoom's production of approximately 2,000 doctunents-half of which were
produced in June and July 2014, including after summary judgment briefing began— is
incomplete. Because you insist that your discovery is complete and we are mot entitled to certain
relevant documents that were not made known to us until the recent depositions, we intend to
move in limine to preclude you from introducing evidence.
Based on the depositions of Mr. MacDonell, Mr. Liu, and Mr. Quispe, we have identified the
following categories of documents that are absent from your document productions:
• WTR/MPS studies;
• ~'ermissions from consumers to use their W'I'R/MPS respons$s in advertising;
• Usability studies or reports from focus groups;
• Periodic awareness studies;
• Payments to LegalSpring.com, Own Vision, and/or Mr. Giggy;
• Other agreements with LegaISpring.com, Own Vision, and/or Mr. Giggy;
• Performance of arxd analytics related to your advertising; and

GOODWIN I~ PROCTER
Aaron P. Allan
October 10, 2014
Page 2

• Evidence relating to your disclosure of state fees in business formation ads, including the
pricing disclosures for incorporation on your website.
See e.g, MacDonell Tr. at 54:7-56:24, 57:21-58:4; 131:3-135:22, 164:20-165:5; Liu Rough Tr, at
70:3-71:2; 88:24-91:23; Quispe Rough Tr. at 12:7-16, 19:2-22:15; 54:4-57:10.
Unless you reverse your position, we intend to include the above categories of documents and
additional categories we identify in our motion in limine to exclude evidence based on your
discovery deficiencies. This includes, for example, precluding LegalZoom from introducing any
evidence relating to the WTR.surveys, such as evidence on whether the WTR surveys were the
source of reviews LegalZoom posted on LegalSpring.com, whether LegalZoom had permission
to use the WTR survey responses in marketing, and whether LegalZoom's ads and complaints
regazding those complaints support Rocket Lawyer's unclean hands defense.
Furthermore, because you are maintaining that LegalZoom need not supplement its document
productions to address the above-referenced deficiencies given that the discovery cut-off has
passed, Rocket Lawyer intends to adopt the same position and not produce any additional
documents in response to your recent demands. As you are aware, Rocket Lawyer searched for
documents based on an agreed upon list of custodians and search terms that included a majority
of the terms proposed by LegalZoom, and produced documents after a review process. This
resulted in Rocket Lawyer producing over 38,000 documents, including the usability studies,
documents relating to such studies, and significant data pulls relating to Rocket Lawyer's ads
and their performance. We have made every effort to meet and believe that we have met our
discovery burden, and will no longer be subject to a double standard where LegalZoom refuses
to meet its own burden while demanding more from Rocket Lawyer. Furthermore, as you state
in your letter, the discovery cut-off has passed, and LegaIZoom has waived any further response.
In addition, Rocket Lawyer reserves the right to move to preclude evidence based on
LegalZoom's apparent failure to issue a litigation hold. As you are awaze, Mr. Liu —designated
to testify on behalf of LegalZoom regarding document retention policies and the collection and
production of documents in this matter —testified that he had no knowledge of a litigation hold
memorandum being sent out or any other preservation efforts in connection with this litigation.

GOODWiN N PROCTER
Aaron P. Allan
October 10,2014
Page 3
Regarding confidentiality, your response does not suffice. You have not made clear whether you
have shared the usability studies or any other Attorneys' Eyes Only documents or information
with your clients, including any derivative products such as your Rule 11 motion. As such, we
reserve all rights to proceed with a motion based on your violation{s} of the Protective Order,
including but not limited to seeking additional discovery into this question.

Sincerely,
/~qv
ich
cc:

T. Jones
Fred Heather([e-mail])
Barak Vaughn ([e-mail]}
Forrest A. Hainline III
Hong-An Vu
Brian W. Cook

EXHIBIT E

~~

~

•
~'

10250 Constellation Blvd.
19th Floor
Los Angeles, CA 90067
310.553.3000 TEL
310.556.2920 FAX
Aaron P. Allan

October 13, 2014

Direct Dial
310.282.6279
Direct Fax
310.785.3579

VIA EMAIL

Email
[e-mail]

Michael T. Jones
([e-mail])
Goodwin Procter LLP
135 Commonwealth Drive
Menlo Park, CA 94025

Re:

LegalZoom.com,Inc. v. Rocket Lawyer Incorporated —Document Productions and
Motions in Limine

Dear Michael,
I am in receipt of your October 10, 2014 letter, which appears to rest on several false premises.
With respect to the documents that you have identified as "absent from [our] document
productions," you are incorrect in claiming that we failed to produce documents showing
payments to and agreements with Legalspring.com, Own Vision and/or Mr. Giggy (see e.g. LZ
001622-34; LZ 006832-41; LZ000883). As to the other identified categories, such as WTR/MPS
studies, there was never an agreement by LegalZoom to produce such documents. We have
reviewed the discovery requests, responses, supplemental responses, and meet and confer letters,
and it appears that such documents were never identified by LegalZoom or by Rocket Lawyer as
being documents for which there was an agreement that LegalZoom needed to produce them.
This is in great contrast to the survey evidence that Rocket Lawyer agreed to produce, and yet
largely withheld from production and concealed from the Court. If you believe that I am
mistaken, and that there was in fact an agreement by LegalZoom to produce such documents,
then I invite you to point out that agreement in the discovery record and we would reconsider.
For similar reasons, we do not understand the basis for your threatened motions in limine.
Indeed, references to the WTR surveys were made by LegalZoom employees and an exemployee during recent depositions in response to questioning by your firm, and it would seem
unfair and improper to prevent LegalZoom from making reference to such surveys and similar
evidence elicited by Rocket Lawyer if LegalZoom chooses to do so.
With regard to supplementation of prior discovery responses, you have acknowledged that
Rocket Lawyer previously produced "usability studies" and "documents relating to such studies."
III MERITAS LAW FIRMS WORLDWIDE

953811.1

Michael T. Jones
Goodwin Procter LLP
October 13, 2014
Page 2

That production was pursuant to our discovery agreements regarding Rocket Lawyer's
production. Because we have now learned that Rocket Lawyer breached those prior discovery
agreements by failing to produce several studies that were referenced by Rocket Lawyer
witnesses in deposition, videotapes relating to such studies, and other related documents, we
have appropriately asked Rocket Lawyer to correct the breach by producing fully and fairly what
it previously agreed to produce. Indeed, it was so clear that Rocket Lawyer had previously
agreed to produce these documents, that you stated, on the record during the deposition of Pete
Franco (pp. 127-28), that these documents would be searched for and, if located, produced. By
now reneging in your letter on that deposition agreement, Rocket Lawyer appears to be
desperately seeking to hide the contents of these studies from both LegalZoom and from the
Court. Moreover, without any ground or basis, Rocket Lawyer is engaging in sharp litigation
practices that we do not believe the Court will tolerate. There is no "double standard" being
employed by LegalZoom in refusing to produce the documents that Rocket Lawyer is now
demanding. In contrast to Rocket Lawyer's withholding of documents that it previously agreed
to produce, LegalZoom is simply adhering to the past agreements that it reached with Rocket
Lawyer about what it would, and would not, have to produce,-and it would be unfair to force
LegalZoom to produce more than those agreements contemplated when the discovery cut-off has
now passed.
With regard to the issuance of a litigation hold, I have confirmed that LegalZoom did in fact
issue a litigation hold letter. Mr. Liu's testimony on behalf of LegalZoom on this subject was
mistaken, and will be corrected when he has an opportunity to review his transcript. We
understand that you may comment on the correction at trial.
Finally, with regard to confidentiality, my prior letter made absolutely clear that we have adhered
to the requirements of the protective order in this case. The one mistaken court filing was
immediately corrected, with no known disclosure to our client, and no harm to Rocket Lawyer.
To specifically respond to your new allegations, we have not shared the usability studies or any
other Attorneys' Eyes Only documents or information with our clients, including any derivative
products such as our Rule 11 motion.
We would very much like to put an end to these time wasting disputes about document
discovery, and move forward with the business of trying this case based on the agreed upon
evidence. Your concealment of documents which are obviously material, and your letters, which
are unnecessarily vitriolic, are counterproductive to that goal.

953811.1

Michael T. Jones
Goodwin Procter LLP
October 13, 2014
Page 3

If there are particular documents you wish LegalZoom had previously agreed to produce, and
that you would now like to see, I would invite you to pick up the telephone and call me to
discuss the matter. Without waiving any rights, I can promise that we would meet and confer
about that subject in a reasonable manner.

Sincerely yours,

AARON P. ALLAN
of GLASER WEIL FINK HOWARD AVCHEN & SHAPIRO LLP

APA:cc

953811.1