The Facebook, Inc. v. Connectu, Inc et al

Filing 596

Declaration of I. Neel Chatterjee in Support of 595 Memorandum in Opposition, filed byMark Zuckerberg, The Facebook, Inc.. (Attachments: # 1 Exhibit A, # 2 Exhibit B, # 3 Exhibit C, # 4 Exhibit D, # 5 Exhibit E, # 6 Exhibit F, # 7 Exhibit G, # 8 Errata H, # 9 Exhibit I, # 10 Exhibit J, # 11 Exhibit K)(Related document(s) 595 ) (Chatterjee, I.) (Filed on 8/4/2008)

EXHIBIT H

1 1 2 3 4 5 6 7 TRANSCRIPT OF MOTION HEARING 8 UNITED STATES DISTRICT COURT DISTRICT OF MASSACHUSETTS ------------------------------x CONNECTU, INC. : DOCKET NUMBER CA0710593 PLAINTIFF : versus : UNITED STATES COURTHOUSE : FACEBOOK, INC., ET AL DEFENDANTS : BOSTON, MASSACHUSETTS ------------------------------x JUNE 2, 2008 2:30 p.m.

UNSEALED HEARING ONLY
9 BEFORE: 10 11 APPEARANCES: 12 ATTORNEYS FOR THE PLAINTIFF: 13 FINNEGAN HENDERSON FARABOW GARRETT & DUNNER LLP 14 BY: 15 16 17 18 19 20 21 22 23 24 25 PROCEEDINGS REPORTED USING MACHINE STENOGRAPHY. TRANSCRIPT PRODUCED EMPLOYING COMPUTER-AIDED TECHNOLOGY. DIANE M. MOLAS, RPR, DE CSR, and NJ CCR USDC - MAD OFFICIAL COURT REPORTER OFFICIAL COURT REPORTER DIANE M. MOLAS, RPR, DE CSR, AND NJ CCR OFFICIAL COURT REPORTER UNITED STATES DISTRICT COURT - DISTRICT OF MASSACHUSETTS ONE COURTHOUSE WAY THIRD FLOOR - SUITE 3200 BOSTON, MA 02210 TELEPHONE: [phone] E-MAIL: [e-mail] JOHN F. HORNICK, ESQUIRE 901 NEW YORK AVENUE, NW WASHINGTON, DC 20001-4413 TELEPHONE: [phone] E-MAIL: [e-mail] FAX: [phone] THE HONORABLE DOUGLAS P. WOODLOCK UNITED STATES DISTRICT JUDGE

2 1 2 3 4 5 6 BY: 7 8 9 10 BY: 11 12 13 14 15 16 17 AND 18 PRO-HAC-VICE-PENDING ATTORNEY FOR THE PLAINTIFF: 19 BOIES, SCHILLER & FLEXNER LLP 20 BY: 21 22 23 24 25 DIANE M. MOLAS, RPR, DE CSR, and NJ CCR USDC - MAD OFFICIAL COURT REPORTER D. MICHAEL UNDERHILL, ESQUIRE, PRO HAC VICE PENDING 5301 WISCONSIN AVENUE, N.W. WASHINGTON, DC 20015 TELEPHONE: [phone] E-MAIL: [e-mail] FAX: [phone] BY: DANIEL P. TIGHE, ESQUIRE 176 FEDERAL STREET BOSTON, MA 02110-2214 TELEPHONE: [phone] E-MAIL: [e-mail] FAX: [phone] MEREDITH H. SCHOENFELD, ESQUIRE 901 NEW YORK AVENUE, NW WASHINGTON, DC 20001-4413 TELEPHONE: [phone] FAX: [phone] SCOTT R. MOSKO, ESQUIRE 3300 HILLVIEW AVENUE PALO ALTO, CA 94304-1203 TELEPHONE: [phone] E-MAIL: [e-mail] FAX: [phone] BY: APPEARANCES (CONTINUED): AND TOM JENKINS, ESQUIRE 901 NEW YORK AVENUE, NW WASHINGTON, DC 20001-4413 TELEPHONE: [phone] FAX: [phone]

3 1 2 3 4 5 6 7 8 9 10 11 AND 12 PROSKAUER ROSE LLP 13 BY: 14 15 16 17 18 19 20 21 22 23 24 25 DIANE M. MOLAS, RPR, DE CSR, and NJ CCR USDC - MAD OFFICIAL COURT REPORTER BY: STEVEN M. BAUER, ESQUIRE ONE INTERNATIONAL PLACE BOSTON, MA 02110-2600 TELEPHONE: [phone] E-MAIL: [e-mail] FAX: [phone] AND JEREMY P. OCZEK, ESQUIRE ONE INTERNATIONAL PLACE BOSTON, MA 02110-2600 TELEPHONE: [phone] E-MAIL: [e-mail] FAX: [phone] BY: THERESA A. SUTTON, ESQUIRE 1000 MARSH ROAD MENLO PARK, CA 94025-1015 TELEPHONE: [phone] E-MAIL: [e-mail] FAX: [phone] APPEARANCES (CONTINUED): ATTORNEYS FOR THE ALL DEFENDANTS, EXCEPT EDUARDO SAVERIN: ORRICK, HERRINGTON & SUTCLIFFE LLP BY: I. NEEL CHATTERJEE, ESQUIRE 1000 MARSH ROAD MENLO PARK, CA 94025-1015 TELEPHONE: [phone] E-MAIL: [e-mail] FAX: [phone]

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 DIANE M. MOLAS, RPR, DE CSR, and NJ CCR USDC - MAD OFFICIAL COURT REPORTER BY: ATTORNEYS FOR THE WITNESS, JEFFREY PARMET: GESMER UPDEGROVE LLP BY: LEE T. GESMER, ESQUIRE AND JOSEPH LAFERRERA 40 BROAD STREET BOSTON, MA 02109 TELEPHONE: [phone] E-MAIL: [e-mail] FAX: [phone] AND CHRISTOPHER SHEEHAN, ESQUIRE 40 BROAD STREET BOSTON, MA 02109 TELEPHONE: [phone] FAX: [phone] HELLER EHRMAN LLP BY: ROBERT B. HAWK, ESQUIRE 275 MIDDLEFIELD ROAD MENLO PARK, CA 940252116 TELEPHONE: [phone] E-MAIL: [e-mail] FAX: [phone] APPEARANCES (CONTINUED): ATTORNEYS FOR THE DEFENDANT, EDUARDO SAVERIN: HOLLAND & KNIGHT LLP BY: DANIEL K. HAMPTON, ESQUIRE 10 ST. JAMES AVENUE ELEVENTH FLOOR BOSTON, MA 02116 TELEPHONE: [phone] E-MAIL: [e-mail] FAX: [phone] AND

5 1 2 3 4 5 6 7 8 9 10 11 12 13 14 PROCEEDINGS 15 16 17 18 19 20 21 22 23 24 25 THE DEPUTY CLERK: All rise. OFFICIAL COURT REPORTER: DIANE M. MOLAS, RPR, DE CSR, and NJ CCR OFFICIAL COURT REPORTER UNITED STATES DISTRICT COURT - DISTRICT OF MASSACHUSETTS ONE COURTHOUSE WAY THIRD FLOOR - SUITE 3200 BOSTON, MA 02210 TELEPHONE: [phone] E-MAIL: [e-mail]

This Honorable Court is now in session. You may be seated. Calling the case, Civil Action 07-10593, ConnectU, Inc. versus Facebook, Inc., et al. THE COURT: Well, at the outset, I do have a motion

to move this case in camera. My general view is, unless there is some showing of specific necessity beyond the generalized discussion, then, I won't do that. DIANE M. MOLAS, RPR, DE CSR, and NJ CCR USDC - MAD OFFICIAL COURT REPORTER

UNSEALED HEARING 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

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of having an interview with Mr. Parmet, it may make it easier for the court to see what the relevance is. THE COURT: Why would -- why would I do that?

Let me place it in a somewhat different context. Let's assume that the parties entered into an agreement with the understanding that there were unresolved Discovery disputes, but they, nevertheless, entered into the agreement, and, then, there's an agonizing reappraisal of whether it was a good agreement to enter into, and, they're executing the various kinds of initiatives to try to undo it. Isn't the first step to say: If, on the basis of

this settlement; at least, as contended by Facebook, the parties entered into it with the knowledge of unresolved matters, then, the first thing for Judge Ware to do is to decide whether or not to permit some further more open Discovery? I'm not -- I don't find compelling the kind of Whitman Sampler of three or four cases regarding settlement representations. There were no settlement representations; at least, as I can see it, in the settlement sheet. Parties chose to do what they did on the basis of imperfect knowledge about what the outcome of the case would be. Uncertainty isn't one of the greatest drivers of DIANE M. MOLAS, RPR, DE CSR, and NJ CCR USDC - MAD OFFICIAL COURT REPORTER

UNSEALED HEARING 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 him -MR. UNDERHILL: THE COURT: Right.

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settlement, of course, and, so, it seems to me the first thing to do is simply say Judge Ware can decide this case on the basis of what he has there. Why should I look at these documents? If he wants me to look at the documents, I'll look at them, or if he wants to look at the documents. MR. UNDERHILL: Your Honor, I'm Mike Underhill, and

I am lead counsel in the California case with ConnectU. May I respond to that question? THE COURT: Sure. I appreciate it.

MR. UNDERHILL:

First of all, Judge Ware doesn't have any of these issues in front of him. issues. THE COURT: And whose fault is that? Well, it's just happening now, He's not really become aware of these

MR. UNDERHILL: Your Honor.

It's not anybody's fault. And, so, if you want to raise this with

THE COURT:

-- then, you can. Right; but here's the issue,

MR. UNDERHILL: Your Honor:

Judge Ware, presumably, is not going to have any

interest in diving into the protocol, which is a Massachusetts order, in trying to get to the bottom of whether -DIANE M. MOLAS, RPR, DE CSR, and NJ CCR USDC - MAD OFFICIAL COURT REPORTER

UNSEALED HEARING 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 COURT:

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Do you want me to rule on the protocol,

whether or not Mr. Parmet was authorized to disclose anything other than the code? MR. UNDERHILL: THE COURT: No, Your Honor.

I mean, I'll rule on that. I'm not looking at that issue,

MR. UNDERHILL: Your Honor.

What I am looking at, however, is, we believe, under the facts as we know them now, is very, very serious attorney misconduct in this case and a violation of This Court's orders by Facebook's attorneys, and that is an issue -THE COURT: Let me see.

What does in a mean? Does it mean that they willfully withheld documents that should have been disclosed; that is, they had an obligation to disclose the documents and they didn't disclose them? MR. UNDERHILL: Your Honor. THE COURT: Now, how do I deal with that when it is That is, in fact, the case,

a moving target; that is to say, it was rolling Discovery, and they have not come to the concluding point at which they were obligated to make that disclosure? MR. UNDERHILL: Well, we believe that they were,

DIANE M. MOLAS, RPR, DE CSR, and NJ CCR USDC - MAD OFFICIAL COURT REPORTER

UNSEALED HEARING 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. HORNICK:

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May I ask The Court's permission to

submit these documents to the California court? They're under seal in This Court. THE COURT: Only if Judge Ware asks me for them.

You can ask him to ask me, if you think that he'll find that compelling. I'm not sure I would in his position,

but they're here, and the way I'm perceiving this now -- and I think the next stage is that I have to go into in camera proceedings with simply Facebook's attorneys and Mr. Parmet's attorneys, just to clarify matters a bit, but the way I see it is -- I will preserve the basis for this issue. You can argue the issue to Judge Ware. I've made

no ruling, with respect to whether or not they're relevant, or not, because I'm not even going to look at them, because I don't think, at this stage, it is necessary for me to look at them, particularly when there is outstanding the question of whether or not there is an enforcement agreement that would obviate that altogether. MR. HORNICK: Well, Your Honor, these -- the

subject of whether there is a settlement, it seems to me, is, obviously, before Judge Ware, but there is still the question of whether the two cases that are in This Court are alive, and there is nothing, at all, to indicate that they're not, and, in fact, all of the communications that have been given to This Court about whether those two cases are alive -DIANE M. MOLAS, RPR, DE CSR, and NJ CCR USDC - MAD OFFICIAL COURT REPORTER

UNSEALED HEARING 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 COURT: I'll tell you, my view is, if

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Judge Ware says that this is an enforceable agreement; that is, the term sheet and settlement agreement's enforceable, these cases were dead on the day that this agreement was entered into or the day after. If it's not, then, you're right, they're over, and that's the whole gist of the question, but it seems to me an undue waste of judicial resources, and the parties have their own and have been making their own choices about the expenditure of theirs, to litigate this in a parallel fashion, particularly when nobody's asking me to enforce this agreement. I will take my direction from Judge Ware and his resolution. If this isn't an enforceable agreement, then, the case is still on -- cases are still on. MR. HORNICK: Your Honor, the way that you've

phrased that point several times today makes me wonder whether This Court would entertain a motion to open the settlement, based upon misconduct of the plaintiffs or their counsel in failing to produce documents that they should have produced before; in other words, you've asked me and I'm asking you -THE COURT: Not, until after Judge Ware -- I'd

ask -- not until Judge Ware rules on this. I've asked you in a large fashion, whether you want DIANE M. MOLAS, RPR, DE CSR, and NJ CCR USDC - MAD OFFICIAL COURT REPORTER

UNSEALED HEARING 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 at this. me to rule on the question of the enforceability of the settlement agreement.

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I'll tell you that I would do it more or less in the same fashion and proceed in more or less the same fashion Judge Ware is doing it, but I don't even think I have the authority to do that. He has the authority -- first, he has the first cut Parties wanted him to have jurisdiction to enforce

the agreement. It's kind of a fine nuance to say that that's not an exclusive choice of jurisdiction, although I frankly find that meretricious, but the way in which I think this has to be dealt with is to say: Judge Ware's going to decide it on the

basis of the parties' submissions, and he'll decide whether or not it's necessary to -- in order to rule on it, to -- have further proceedings in This Court, and I stand ready to do whatever is necessary, or he can decide that it's not an enforceable agreement, and, then, we're off to the races again. MR. HORNICK: Your Honor, the reason that we were

asking you to review these documents is because, if Judge Ware does find that it's an enforceable agreement, then, the logical, one of the logical, places to file a new lawsuit and to reopen this matter, under Rule 60 or based upon fraud on the court or based upon fraud on the parties, would be right DIANE M. MOLAS, RPR, DE CSR, and NJ CCR USDC - MAD OFFICIAL COURT REPORTER

UNSEALED HEARING 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 view. My general view is: judgment.

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here, because this is the court that knows about these issues. THE COURT: you ask for. (Laughter.) THE COURT: So -- but we do that step by step. Well, you know, always be careful what

We don't have a 60B motion, until we have a final

We don't have a final judgment yet, because it is tied up in this issue of the enforceability of this agreement, as to which a variety of issues have been raised here, but I will be bound by whatever Judge Ware decides, concerning enforceability of this agreement, and I'll deal with whatever follow-on that leads to, either that he finds it to be an enforceable agreement or he doesn't. MR. HORNICK: Well, Your Honor, the risk is that we

will ask Judge Ware to order the production of these documents, and he'll say: that's before him. THE COURT: Well, you know, you'll just have to -And that they belong here. They're not relevant to the case

MR. HORNICK: THE COURT:

Right.

Okay; so, then, we'll go step by step. I suspect he won't do that. That's my general

He'll look at all the facts

DIANE M. MOLAS, RPR, DE CSR, and NJ CCR USDC - MAD OFFICIAL COURT REPORTER