Toffoloni v. LFP Publishing Group, LLC

Filing 102

TRANSCRIPT of Motions Proceedings held on February 17, 2010, before Judge Thomas W. Thrash, Jr. Court Reporter/Transcriber Susan C. Baker, Telephone number 404-215-1558. Transcript may be viewed at the court public terminal or purchased through the Court Reporter/Transcriber before the deadline for Release of Transcript Restriction. After that date it may be obtained through PACER. Redaction Request due 4/1/2010. Redacted Transcript Deadline set for 4/12/2010. Release of Transcript Restriction set for 6/9/2010. (Attachments: # 1 Notice of Filing Transcript) (kac)

Toffoloni v. LFP Publishing Group, LLC

Doc. 102

1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 On behalf of the Defendant: 18 19 20 21 22 23 24 25 SUSAN C. BAKER, RMR, CRR 2194 U.S. COURTHOUSE 75 SPRING STREET, S.W. ATLANTA, GA 30303 [phone] Proceedings recorded by mechanical stenography and computer-aided transcript produced by S. Derek Bauer McKenna Long & Aldridge APPEARANCES OF COUNSEL: On behalf of the Plaintiff: Richard P. Decker Decker Hallman Barber & Briggs TRANSCRIPT OF THE MOTIONS HEARING BEFORE THE HONORABLE THOMAS W. THRASH, JR., U.S. DISTRICT COURT JUDGE MAUREEN TOFFOLONI, as Administrator ) and Personal Representative of the ) Estate of Nancy E. Benoit, ) ) Plaintiff, ) ) -vs) ) LFP PUBLISHING GROUP, LLC, doing ) business as Hustler Magazine, ) ) Defendant. ) ____________________________________ ) IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF GEORGIA ATLANTA DIVISION

Docket No. 1:08-CV-421-TWT February 17, 2010 Atlanta, Georgia 10:01 a.m.

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 (Proceedings held in Atlanta, Georgia, February 17, 2010, 10:01 a.m., in chambers.) THE COURT: All right. This is the case of Maureen

Toffoloni versus LFP Publishing Group, Case Number 08-CV-421. First let me ask counsel for the parties to identify yourselves for the record and the parties you represent. MR. DECKER: Good morning, Your Honor. Rick Decker

for Maureen Toffoloni, the Plaintiff. MR. BAUER: Publishing, LLC. THE COURT: All right. This is a hearing on the And Derek Bauer for Defendant LFP

Defendant's motion for protective order which is our Docket Number 73 and the Plaintiff's motion to compel which is our Docket Number 75. Mr. Decker, I'll hear from you first. MR. DECKER: Thank you, Judge.

Judge, unfortunately, we are back, I'm back requesting assistance from the Court concerning a discovery dispute. In essence, I am on behalf of the Plaintiff seeking

financial information from Hustler and its parent companies concerning their economic activity for four years, including the year in which they published the images that we are upset about for the purpose not only of establishing a baseline for punitive damages which is, I think, a legitimate claim to the case but also for our compensatory damages. And I'd like to

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 take just a couple of minutes to explain where I'm coming from on that. First of all, Judge, with respect to the information that we are seeking not only from LFP Publishing doing business as Hustler which is the primary entity involved but according to the Defendant's certificate of interested persons Hustler is owned by something called LE Advisors, LLC. LLC, is in turn owned by LFP, Inc. And LE Advisors,

So there's LFP Publishing

doing business as Hustler, then there's LE Advisors that owns that company, and then LFP owns both companies. So my point being that any dime, any dime that's made by Hustler on these images or anything else ultimately redounds to the benefit of the ultimate parent LFP, Inc.. And that is

the reason for which I requested financial information because of the parent relationship. So when we got down to damages discovery, I requested monthly operating statements for 2006, '7, '8 and '9 from Hustler Advisors and LFP, Inc., for the purpose of showing not only their worldly circumstances for purposes ultimately of punitive damages, Judge, but even if this were not a punitive damages case, all of the cases, the Georgia cases, the 11th Circuit in the Toffoloni case and the Douglas case which the 11th Circuit quoted from extensively all say that the measure of damage, of compensatory damage in this case is the benefit to the appropriator of the images, the name, whatever it is

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 that was misappropriated to that entity. So the measure, the

primary measure of damage in this case will be how Hustler benefitted financially from using these images without compensation and without permission. As I said, any dime that Hustler made from the use of these images without permission, without compensation redounded to the benefit of Hustler but then its parent and then its parent's parent. So that is the reason why I requested

financial information in the form of monthly operating statements and net worth statements from each of those entities for the four years which I felt would establish a trend. And

my experts when I get this information and when I hire them will be trying as they said in the Douglas case, the 7th Circuit said in the Douglas case to separate out how from that information how Hustler -- and that was also a Hustler case -benefitted from its unlawful use of these images. And if you look for a bump, you look for a blip, you try to say, well, this is what they made the month before, this is what they made the month of the publication of the unlawful images, you can establish a trend. You can see how they -- how

these images benefitted the company financially. And so quite apart from the issue of punitive damages there's the issue of compensatory damages that the only -- and the benefit to Hustler of its use of these images. And the

only way that I could possibly ever get anywhere close to

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 case. discerning that information is if I had their financial information for the months and years surrounding this publication. And as I think the Court knows and I know and I'm

sure Derek Bauer knows, all of this stuff is maintained on a computer and it would take about 30 seconds to print out four years' worth of financial information. The stack of paper So it's not a

probably wouldn't be any higher than an inch.

giant burden we are talking about or a huge amount of paper that we're talking about. It's just monthly operating

statements for these entities for essentially four years. We also, Judge, have a confidentiality order in this So that there's no way that the information is going to

get outside this case to injure -- somehow injure Hustler with its competitors in any way. concern. So that's not a legitimate

As I understand Hustler's position in this case, it

is that because I couched my request in terms -- I prefaced my request by saying, you know, to support the Plaintiff's claim for punitive damages please give us the following information when I didn't have to do that. why I did it. But even if this Court were to say somewhere down the road that this is not a punitive damages case which I don't think you will, I think that's a jury question, it's a compensatory damages case at the very least. information. I think I am entitled to it. And I need the I did it -- I don't really know

I won't do anything

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 with it except try to develop a damage claim in this case, and it's something I think that I'm entitled to without having to come to court to get it. Clearly, if and when a jury is asked to pass on the question of punitive damages, then the worldly circumstances of Hustler will be appropriate. But in this case, this particular

case, since the measure of damage is the benefit to the Defendant you really can't separate it out. You can't say to

the jury, you know, just look at this for purposes of compensatory damages 'cause they're going to look at it. They're going to see what Hustler is worth, what Hustler has made over the four years in question. unfortunate fact. And that's just an

But I don't think still in all when it's all

said and done that the Court is going to take a punitive damages case away from the jury. If I may read just briefly, Judge, from a couple of cases, the Georgia case says -- this is cited in our brief, the Alonso case -- the measure of damage in an unsanctioned appropriation case such as this is the value of the benefit derived by the person appropriating the other's name or likeness. Very simple. It's the value of the benefit to them.

That was in turn cited by the Toffoloni case by the 11th Circuit who said: We are guided by the 7th Circuit's opinion

in Douglas versus Hustler to conclude that LFP may be held liable in damages for violation of a right of publicity when it

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 publishes images of Benoit that had economic value without her permission, let alone without compensating her estate. Quoting the 7th Circuit and Judge Posner in the 7th Circuit case, the Douglas versus Hustler said: Before a court

can gauge the award of punitive damages -- he was talking in this instance about punitive damages -- it must first gauge the financial position of the wrongdoer. profitable. Hustler is immensely

An award of punitive damages reduced to $100,000

would have little effect on its propensity well documented in several of the cases we have cited to invade people's legal rights. And so, Judge, I mean, it seems clear to me that for both purposes, actual and punitive damages, this financial information is appropriate. And I ask the Court to pass an

order requiring Hustler to provide it. Thank you. THE COURT: MR. BAUER: Mr. Bauer? Thank you, Judge.

Well, if I may, let's start with the easy one; and that is Plaintiff's effort to serve discovery that 's targeted towards non-parties, distinct corporations that aren't parties to this case by serving discovery on the Defendant LFP Publishing Group, LLC. Notwithstanding the issue of whether

the actual discovery requests that Plaintiff has -- is attempting to obtain, the discovery Plaintiff is attempting to

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 obtain from these non-parties is actually relevant to any issue or valid claim in the case, it's not appropriate for him, for Plaintiff, rather, to obtain this discovery through a discovery request directed to the Defendant when these corporations are separate and distinct entities and aren't parties and are subject to appropriate process. Simply put, if Plaintiff wants to seek discovery from non-parties, he's got to issue subpoenas to do it; and we're going to insist that he follow the right protocol and process. And those entities will ostensibly get representation and protect their rights accordingly under that process. And this

is important to the Defendant because obviously once you start pretending that legal distinctions and separations of corporations aren't formal distinctions then you have the possibility of losing them and waiving them. So the Defendant absolutely is going to insist on corporate formalities, and it's appropriate that they do so. really am kind of baffled by the fact that Plaintiff hasn't addressed that particular issue at all in any of her papers and hasn't attempted to serve these entities appropriately, but we think that one is pretty plain and would ask the Court to preclude Defendant from the obligation of having to provide discovery of non-parties. The issue with respect to the financial information -- and if the Court wants me to address the relevancy of the I

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 punitive damages discovery to the non-parties, I'm happy to. But I intend to just deal with it for the Defendant who is my only client here if that pleases the Court. But the issue for

the Defendant with respect to the financial information that Plaintiff seeks isn't one of burden or confidentiality. Mr. Decker's quite correct that, you know, I don't believe that producing the stuff that he has requested would be inordinately burdensome to the Defendant; and we have absolute confidence in the protective order that the Court has entered in this case. The issue is one of relevancy. And if it -- for what

it's worth, I think Plaintiff made quite clear what she perceives the relevancy of this information to be when she couched it in terms of this is my punitive damages discovery when it was issued. And that's also consistent with the

position Plaintiff took when she filed her motion for summary judgment right after remand saying the only issue left for this Court is damages and I just need to do my discovery on punitive damages. With respect to her suggestion that the information is relevant to the calculation of compensatory damages, let me just say this. The language that Mr. Decker read to you about

the value of actual damages in a case such as this is absolutely correct. And the benefit to the appropriator is the

same as an unjust enrichment calculation, and that's what the courts in Georgia have said about how actual damages in a ripe

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 publicity case are calculated. The unjust enrichment to the Defendant in this case if there was one would be what value LFP Publishing or Hustler would have paid for these images but didn't by virtue of its alleged appropriation. We have provided to Mr. Decker and to

Plaintiff the discovery that's necessary for that calculation. We gave him several years' worth of sales figures for Hustler Magazine which includes the revenues. That's several years

before and through the current date of his request which was last fall, I believe. So he's got all the information that he

could possibly need to analyze trends in the sales of Hustler Magazine that could arguably be associated with the publication of these specific images. And let me just say that, you know, I've looked at those figures. And there will be no trend that is discernible;

and, if anything, sales figures have consistently gone down for Hustler Magazine. I think it's going to be supremely difficult

for any expert that Mr. Decker might hire to look at those sales figures and say that somehow the publication of these particular images provided a sales boost to Hustler. that's far down the road. We've also given Plaintiff the amounts that Hustler has paid to models, both amateurs and professionals, and celebrities for the last several years, the years that he requested, so that he can also use if he chooses to the amount But

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 that Hustler has actually paid for the right and privilege to publish models' photos to calculate compensatory damages. What LFP's revenues are based on anything other than the sales of the magazine or what revenues its parents have generated from other products other than the magazine are, simply put, entirely irrelevant under the standard that Plaintiff has argued to you for the calculation of compensatory damages. And so it's our position, Your Honor, that the only

relevancy that the discovery that's at issue in our protective order motion and Mr. Decker's motion to compel is punitive damages. And if I might, as the Court knows, it's our position that Plaintiff's complaint fails to state a valid claim for punitive damages. Now, we recognize that the procedural

posture of this issue coming before the Court is somewhat unusual. And I submit that that is because of the unusual

circumstance of the 11th Circuit reversal in this case which as you know we believe to be manifest constitutional error. And

so while ordinarily this issue might have been dealt with on a 12(b)(6) motion to dismiss or on summary judgment, it's unfortunate that we're here now in the framework of a discovery dispute to deal with what we admit and acknowledge is effectively a dispositive issue with respect to Plaintiff's punitive damages claim. The problems with the claim, though, are pretty

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 straightforward. First -- and Plaintiff hasn't addressed any

of these issues in her briefing, and Mr. Decker didn't mention it in his argument; I'm sure he will when he gets to speak again in a minute -- but there's a pleading problem. Rule 8

governs the standard of pleading and requires that you actually plead facts, specific facts in support of every claim. they haven't done that. And

They haven't done that not because it

was an oversight or omission but because in these circumstances the fact is that they don't have the facts, they don't exist in this case, that could support any allegations that are sufficient to state a claim for punitive damages. And for that reason, Plaintiff can't even in good faith amend her complaint to cure a pleading deficiency because in the circumstances we find ourselves in we submit that it's not only inappropriate on the facts but I think it would be unconstitutional because we have a media Defendant here to ask a jury to decide whether the requisite intent and aggravating circumstances that are required to support a punitive damages claim are present where I think it's manifest that the belief that this publication was privileged was at least at a minimum a reasonable belief. And punitive damages as the Court knows requires something far more, and I don't know that we unless the Court would like need to go through the facts again. just briefly touch on them. But if I might

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 By the time the Plaintiff brought her complaint to the attention of Hustler, the images had already been published. By the time suit was filed the images were already Notwithstanding that fact, once Hustler

off the shelves.

received Plaintiff's complaint it immediately pulled the images out of potential internet circulation from all foreign licensees so there was absolutely no chance of future publication. And, of course, as Hustler represented to

Mr. Decker immediately upon receipt of his initial complaint and as we've briefed thoroughly to the Court, Hustler always believed that what it was doing was lawful and it had a constitutional privilege to publish the images. submit preclude an award of punitive damages. There are three elements required under Georgia law to sustain a claim for punitive damages for a right of publicity violation. They've got to prove that it was These Those facts we

premeditated -- and these aren't alternative elements. are all required elements. The violation's got to be

premeditated, it has to have been a conscious appropriation, and it has to be continued after the violation is brought to the attention of the appropriator. Now, I don't think the Court needs to go beyond the third element, continuation to dispose of any illusion about the validity of the punitive damages claim. There are only two

Georgia cases that we've found that shed any light on how the

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 continuation element of a punitive damages claim for a violation of right of publicity must be -- how it can be met and satisfied from an evidentiary standard. The first is the Cabaniss case which we've cited, the Court's very familiar with I'm sure. This is the gay Atlanta

publication where the Plaintiff's image was used in an advertisement that was published within the publication, and it was as Mr. Decker has argued many times a case of mistaken identity. However, in explaining what continuation requires in

order to sustain a claim for punitive damages the Cabaniss court said that aggravating circumstances are required and mere negligence is not enough. This means that the appropriator not

just should have known that what it was doing was a violation of the right of publicity but they have to have known for certainty that the publication was unlawful. In that particular case, with respect to the continuation element of a punitive damages claim, the Cabaniss court said that the jury would have to find that the Playboy Club kept using the ad with Plaintiff's likeness after realizing that there was a mistake of identity and that it had no right to publish them and the violation would, therefore, continue. So the Cabaniss court tells us that to satisfy the

element of continuation Plaintiff has to show that after the awareness of the violation occurred in the Defendant's mind the Defendant continued the publication anyway unlawfully.

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 Obviously, that's not present here; and the fact that Hustler has pulled those images isn't in dispute. The second case that addresses what might satisfy the element of continuation to support a claim for punitive damages is the case that is preferred authority of Mr. Decker and Plaintiff; and that's the Alonso versus Parfet case, a Supreme Court case in Georgia from 1985. In that case the Court held

that there was a question of fact as to whether a continuation sufficient to support punitive damages occurred where the Defendants "admit that they used Plaintiff's name on various documents unrelated to his employment even after he complained of that use." And the issue in that case was whether a

physician who was formerly employed by a physician practice could sustain a claim for punitive damages against the physician practice for continuing to use his name in marketing materials and directories and information provided to patients long after his employment had been terminated and in this case after he had complained that they were continuing to use his name. So here Plaintiff has not alleged, nor could she, the type of continuation that the Georgia courts have said is required to sustain a punitive damages claim. And, of course,

in this case we submit there could not possibly be any aggravating circumstances present where there really can't be a legitimate question about Hustler's intent to violate the law

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 where a belief that the First Amendment protected the publication was manifestly reasonable. And really that's the more interesting issue, I think, in our motion for protective order; and that is would the Constitution permit and does the Georgia right of publicity punitive damages standard permit a jury to find that there was malicious intent by Hustler to violate this woman's right of publicity where it was clear to Hustler's lawyers and to the Court with respect that the prevailing constitutional principles and law in effect protected that information from any tort liability for publication. And we don't believe that particularly where, you know, a media Defendant is the one doing the publishing that the First Amendment can permit a jury to make a decision after the fact that where there's a close call and legitimate disagreement among learned legal professionals about whether the First Amendment protected the publication -THE COURT: I don't think the 11th Circuit thought I

was particularly learned in my decision in this case, Mr. Bauer. MR. BAUER: Well, Judge, you're right. I know that.

And you know how we feel about the 11th Circuit's decision, and we'll see what the U.S. Supreme Court has to say about it. We're actually quite hopeful that they'll take that up soon. And if not, I'm convinced the Defendants will wait and try

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 again later in this case. But let me say this with respect to that. I have not

found a single case that permits punitive damages where the District Court first found that the First Amendment privilege applied to the publication at issue. And following that, I'm

unaware of any case where a Circuit Court of Appeals has ever reversed such a finding. And, you know, I'm convinced that

that ruling's not ultimately going to stand. But it still, I think, illustrates the point that, yes, the 11th Circuit disagreed with you and with me; but clearly there's room for disagreement. And under such

circumstances where a media Defendant is charged with the responsibility before publication to determine whether it's got a lawful privilege for the publication if there's truly a legitimate disagreement among judges, among courts, among lawyers as to whether something's privileged or not, there couldn't possibly be the requisite intent in those circumstances necessary to justify an award of punitive damages. Now, this is not a defamation case. false-light case. It's not a

It's not a publication-of-private-facts case And

notwithstanding the 11th Circuit's efforts to make it one. so actual malice isn't a standard that's required here.

If any

one of those claims were at issue, the law is quite crystal clear that Plaintiff couldn't even obtain compensatory damages

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 unless she proved that the violation was conscious, premeditated and intentional. We don't have that standard here, and we concede that Plaintiff under the 11th Circuit's rule can sustain apparently until the Supreme Court says otherwise a claim for compensatory damages based on the 11th Circuit's pretext argument. But we

do submit that in these circumstances where actual malice isn't required to sustain a claim for compensatory damages something more absolutely must be present, and this is consistent with the Georgia law requiring aggravating circumstances. But

something more must be present before you can subject a media Defendant to punitive damages for a publication. The chilling effect, I think, if a jury was allowed to make a punitive damages decision in this case, the chilling effect on the media, I think, is plain and would be profound. No media outlet could publish in a good-faith belief that its actions were constitutionally protected or rely on the advice of their counsel to that effect without fear that they would be exposed not just to compensatory damages for the value of the images that they didn't pay for but for punitive damages that could potentially be fatal to their business. I mean, we all know that Hustler's revenues, notwithstanding the media at large, is suffering in this economy more than even most industries. And allowing this

punitive damages claim to go to a jury doesn't just have an

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 impact on Hustler, it's got an impact on all media who have to be able to rely on the constitutional privilege to conduct their business. And that's why we think that as a matter of

First Amendment jurisprudence and even beyond the requirements of the clear Georgia elements required to sustain a punitive damages claim that it's unreasonable in this case and would be unconstitutional to allow a jury to even make that determination. So, in short, our argument is if there's any legitimate question as to whether the publication is privileged as we submit clearly exists and existed here we do submit that no reasonable jury could find that the publication was made with the requisite premedication and conscious appropriation required to sustain a claim for punitive damages. And with that I would just like to make one last point before I cede the floor to Mr. Decker again. much of the 7th Circuit's Douglas case. against Hustler. He makes

That was a case The 11th

He has quoted it again here today.

Circuit quoted it.

That case is very different from this one. There was no news correlation In

That was an actual malice case.

to the publication of the model's images in that case.

other words, Hustler just came into possession of a Playboy model's pictures and decided to publish them in the absence of any connection whatsoever to any newsworthy event, whether it was her getting a new job or dying or being involved in some

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 discovery. matter of public interest. That's a major distinction

obviously between this case and the Douglas case. But, more importantly, the facts in that case showed that Hustler knew that Playboy had a license to publish the images and that it did not, published them anyway. And, even

more importantly, there was evidence that there were forged documents presented by Hustler in support of its right to publish the photos. Those are clearly facts that sustain an actual malice in a punitive damages threshold. are present here. None of those types of facts And we submit

It's a very different case.

that the Douglas case really doesn't provide any guidance on this issue to the Court. Thank you. THE COURT: Mr. Decker, you're the one seeking the

I'll give you the last word. MR. DECKER: Thank you, Judge.

First of all, there's no pleading requirement that we have violated. When this case was filed in state court, we We understand that we have

made a claim for punitive damages.

to provide evidence to support the claim for it to go to the jury, but we intend to do that. there will be evidence. For one thing, I told Hustler not to do this on January the 16th. And the question will be what could they And there's no doubt that

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 have done on January the 17th to see that these images did not run. And if they decided to roll the dice as they did in the

Robin Douglas case and make the contention after the fact that it was newsworthy just as in the Douglas case, in this case they said these nude images are newsworthy. In the Robin

Douglas case, when she refused to allow them to run pictures for which she had posed nude for Playboy -- she was no shrinking violet, but she didn't want her pictures appearing in Hustler -- they published them anyway and said they were part of her career, part of about a news article on her career, the same newsworthiness nonsense that they have raised in the Toffoloni case. The 11th Circuit has said that they're not entitled to that defense. And until the -- unless and until the Supreme So there

Court says otherwise, that's the law of this case.

will be evidence, Judge, to support the claim for punitive damages. And we need -- Mr. Bauer is getting the cart before He is asking for summary judgment on a claim and

the horse.

without having filed summary judgment, without discovery being finished, without there being any briefing on the subject or affidavits or otherwise. But there will be evidence in this

case that Hustler intentionally went forward publishing these images when they knew the family objected and tried to defend their doing so after the fact. Now, they're going to say that their lawyer told them

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 numbers. it was okay. Well, he was wrong. Their lawyer was wrong. And

if he is going to come into court and testify that I told them it was okay, then he will be subject to cross-examination. But

unless and until all of that happens, what we're talking about now is discovery. We are entitled to discovery of this

financial information. I want to dispute what Mr. Bauer said about the sales They gave us sales numbers for this particular run of They gave us no

the magazine for the March 2008 edition. revenue figures.

They certainly didn't give us any comparative

revenue figures for years and months prior to this edition. But what we need are actual dollars. We need to know what

Hustler made off of this publication and what they made off publications before and after this publication to see if they had to the extent to which they did benefit. That is exactly what the 7th Circuit said which the 11th Circuit adopted in saying if you can discern what the bump was and as a result of their use of these images without permission then that's what your damages are, the benefit to the Defendant. Should it prove infeasible to disentangle the

various factors that contributed to the profitability of the January issue of the magazine and to determine the effect that it may have had on the profitability of subsequent issues, the profit of the entire issue might be a reasonable starting point for assessing damages in this case.

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 So all we're asking for is what the Court has already said is the way you try to establish your actual damages. And

there will be plenty of evidence, Judge, at the appropriate time to support the claim for punitive damages; but right now all we're asking for is the right to complete our discovery. Thank you. THE COURT: All right. I'm going to grant in part

and deny in part the Plaintiff's motion to compel discovery. I'm going to grant the motion to compel with respect to Interrogatory Number 7 and Request for Production of Documents Number 2. I'm going to deny the motion to compel with respect

to Interrogatory Number 8, Interrogatory Number 9 and Request for Production of Documents 3, 4, 6 and 7. I'll also grant the

motion to compel with respect to Request for Production of Documents Number 5. There is a claim for punitive damages in the case, and I am extremely reluctant to rule on a very fact-specific question such as whether such a claim should be submitted to the jury or whether summary judgment should be granted as to that claim in the context of a discovery dispute. there now. the claim. The claim is

No motion to dismiss has been filed with respect to There's no motion for summary judgment with respect And I think the Plaintiff is entitled to the

to the claim.

discovery that it seeks with respect to the Defendant's worldly circumstances which might be relevant to a claim for punitive

24 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 damages if such a claim survives a motion for summary judgment, motion for judgment as a matter of law, whatever future procedural posture might affect that claim. I don't think that the Plaintiff is entitled to discovery as to non-parties. I don't think that the Plaintiff

can seek that discovery simply by filing interrogatories or requests for production in this case as to non-parties. But

putting that aside, it has not -- I'm not persuaded that that discovery would be relevant even if those parties had been properly served with the subpoenas. The fact that parent

companies may benefit in some fashion from the profit and loss of Hustler I don't believe makes their worldly circumstances relevant to any claim for punitive damages. With respect to the Defendant's motion for protective order, I couldn't find a response to that, Mr. Decker. I'm

going to treat your motion to compel as a response with respect to the interrogatories and requests for production for which I have granted your motion to compel. Otherwise, I'm going to

grant the motion for a protective order with respect to the interrogatories and requests for production where I denied your motion to compel and your Rule 30(b)(6) deposition notice with respect to those topics -- wait a minute. I say granting or denying? Let me start over. With respect to the Rule 30(b)(6) notice, I'm What did I say? Did

25 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 granting the motion for protective order with respect to the topics for which I denied the motion to compel. MR. DECKER: MR. BAUER: THE COURT: I understand. The non-party discovery. The non-party discovery. And I'm denying

the motion for protective order with respect to those topics for which I granted the motion to compel. MR. DECKER: THE COURT: I understand. And, Mr. Bauer, if you'll prepare a

written order incorporating those rulings, get Mr. Decker's approval as to form and present it to me, I'll be glad to sign it. MR. BAUER: MR. DECKER: THE COURT: Thank you, Judge. Thank you, Judge. All right.

(Proceedings adjourned at 10:43 a.m.)

26 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 Susan C. Baker, RMR, CRR Official Court Reporter United States District Court I hereby certify that the foregoing pages, 1 through 25, are a true and correct copy of the proceedings in the case aforesaid. This the 11th day of March, 2010. UNITED STATES DISTRICT COURT: NORTHERN DISTRICT OF GEORGIA: CERTIFICATE