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

Filing 270

EXCERPT Transcript of Motion Hearing held on June 2, 2008, before Judge Woodlock. Court Reporter: Diane M. Molas at 267/977-2909. The Transcript may be purchased through the Court Reporter, viewed at the public terminal, or viewed through PACER after it is released. Redaction Request due 8/17/2009. Redacted Transcript Deadline set for 8/25/2009. Release of Transcript Restriction set for 10/23/2009. (Scalfani, Deborah) Modified on 7/28/2009 (Scalfani, Deborah).

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

Doc. 270

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
Dockets.Justia.com

THE HONORABLE DOUGLAS P. WOODLOCK UNITED STATES DISTRICT JUDGE

JOHN F. HORNICK, ESQUIRE 901 NEW YORK AVENUE, NW WASHINGTON, DC 20001-4413 TELEPHONE: [phone] E-MAIL: [e-mail] FAX: [phone]

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]

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

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If the party has a particular issue that believes we're touching on a particular issue, apart from the general topic, then, you can make a motion at that time, and I'll see whether or not it justifies going into, you know, some sort of in camera session, but I don't find, on its face, that, at least, all of the discussion that we have today should be dealt with in camera. Now, I guess I just want to be sure I understand fully, Mr. Hornick. At the time of the settlement agreement, or, at least, the term sheet -- we'll call it the term sheet -- was executed, was ConnectU aware that there was some sort of a dispute concerning the products of the Parmet inquiries? MR. HORNICK: Your Honor, at the time that the term

sheet was signed, ConnectU was aware that Mr. Parmet was in some kind of dispute with the Facebook attorneys. The -- the counsel for ConnectU asked Facebook, on a couple of occasions, to tell what the subject of that dispute was, and they wouldn't tell us, so all we knew was that there was a dispute. THE COURT: Okay; and, then, aware that there was a

dispute, as to which Facebook would not disclose the substance. Nevertheless, the term sheet was entered into? MR. HORNICK: I'm not sure the two were necessarily

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

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connected, but, yes, the term sheet was signed, and there was knowledge that there was some kind of a dispute with Mr. Parmet. THE COURT: Okay; and, in that connection, there

were a number of unresolved Discovery matters at that point? MR. HORNICK: Well, it was known that -- it was

known by ConnectU that Facebook had documents that they had not yet produced, but the importance of those document, we didn't know; I mean, Facebook hadn't said we have -- have any material documents that we're going to produce. say. THE COURT: Were they under an obligation to tell They didn't

you how material they viewed the documents? MR. HORNICK: THE COURT: I'm sorry?

Were they under an obligation to tell

you how material they viewed the documents? MR. HORNICK: No, I would say that they were not

under an obligation to tell us, per se, but I believe they were under an affirmative obligation to produce the documents. THE COURT: exercise, I take it? MR. HORNICK: Well, at some point in time it was Which was suspended by that settlement

suspended, Your Honor, but the defendants knew from Mr. Parmet that these documents had been identified on December 14. We said in our brief that it was no later than 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 56F? MR. HORNICK:

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January 7; in fact, it was December 14, so they actually had five weeks before the mediation even became a possibility, during which those documents should have been produced, and, after the remediation became a possibility, there was another three weeks during which they could have produced them before mediation was actually scheduled, which was on February 11, and, then, on February 11, there was another week, or so, before the mediation actually occurred. Somewhere in there, there was a decision that parties would hold up. It's in my notes, I can provide it to

you, but the point is that there was a period of, somewhere in the neighborhood of, eight weeks, during which the case was business as usual, and, in fact, in mid-February -- I believe it was the day after the parties scheduled the mediation -the day after the parties scheduled the mediation, Facebook filed a Motion for Summary Judgment on the copyright claim, and they, therefore, even as of the day the mediation had been scheduled, believed the case was alive, and, if these documents were, in any way material to that motion, they should have been produced. THE COURT: And you filed a renewed motion under

There was a renewed motion under 56F,

Your Honor, but it related to the Summary Judgment motion on the contract, which was filed in August of last year. DIANE M. MOLAS, RPR, DE CSR, and NJ CCR USDC - MAD OFFICIAL COURT REPORTER

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Shortly after the motion for Summary Judgment was filed, the parties did put things on hold. I'm sorry, shortly after the copyright Summary Judgment motion was filed in February, the parties put things on hold, so there wasn't a Rule 56 related to that. THE COURT: I see.

Now, turning to the order for Discovery on computer-memory devices, Document Number 103, in this case, is it your understanding that the matters to which Mr. Parmet referred are not matters as to which he was properly positioned to bring them to your attention? MR. HORNICK: Your Honor. I can surmise, from what he said to me, that it wasn't code, and the subject to protocol is code. THE COURT: Mm-hmm. But, other than what we put into our Well, I don't really know for sure,

MR. HORNICK:

brief about the subject matter of those documents, I don't really know what they are. THE COURT: Well, is there any other mechanism by

which Mr. Parmet would properly have access to these documents? Let's assume that we're still in the Discovery phase of the case, or they're clearly in the Discovery phase of the case. 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 is: Yes. I should add that I make no judgment about settlement or not settlement. I'm more concerned with compliance with court orders here than the question of settlement.

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That's a matter, it seems to me, for Judge Ware to deal with, but let's assume that we're still actively pursuing this issue. Is there any basis on which Mr. Parmet could disclose matters beyond code? MR. HORNICK: Your Honor, when you first asked the

question, you asked about access and, now, you're asking about disclosure. I'd like -THE COURT: I'd like --- to answer for both.

MR. HORNICK: THE COURT:

Yes. With respect to access, the answer

MR. HORNICK:

Mr. Parmet had the ability and the right to access everything, everything that was on those hard drives, and the reason was the very subject of the September 13 hearing. When we came into the September 13 hearing before Judge Collings, the parties had not agreed, at that point, on a couple of remaining issues in the protocol, and one of them was the scope of the search that he could perform. 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 simply: Now, the defendants took the position that he should only be able to search for code, and I explained to Judge Collings that you don't know it's code, necessarily,

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until you find it, so, therefore, he had to have the ability to search everything. He had to have access to everything on those hard drives, and I think that's clear in the protocol. I think

it's clear in the transcript of the September 13 hearing. With respect to disclosure, if he were to find information that was not code, under the protocol, technically, he was not supposed -- he could not disclose it to ConnectU, but he could -- there were a couple of mechanisms by which that information could have come out. One was, in our view, he could have called or E-mailed Facebook's counsel and ConnectU's counsel and suggested there be a conference call. During that conference call, he could have said, I found information, found documents, that weren't

code; may be relevant. That's all he had to say. THE COURT: do that, though? MR. HORNICK: In Paragraph 3 of the protocol, Where do I find that he's authorized to

Your Honor, it gives them -- it simply says that, if there is any communication by telephone with ConnectU's counsel, DIANE M. MOLAS, RPR, DE CSR, and NJ CCR USDC - MAD OFFICIAL COURT REPORTER

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regarding work under the protocol, Facebook's counsel needs to be on the call, so he wasn't prevented from talking to us, talking to ConnectU's counsel. Under the protocol, he was only prevented from talking to ConnectU's counsel without Facebook's counsel also being on the line. THE COURT: I'm just looking at this fairly

carefully, I think, and the operative language that I'm concerned about is the language that says that he may not discuss with ConnectU's counsel or with anyone else any information obtained from the Facebook hard drives, except, with respect to program -- produced program code. Wasn't it a condition of his involvement that he was not to discuss with anyone else anything other than produced program code? MR. HORNICK: Yes, Your Honor.

Technically, that is correct under the protocol. THE COURT: Okay; so -Now, I can't speak for what

MR. HORNICK: Mr. Parmet was thinking. THE COURT:

No, I understand.

I'm just trying to understand what the provisions of the arrangement are. (Pause.) THE COURT: Okay.

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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Your Honor, we contemplated before

the protocol was signed that there could possibly be situations that would arise where you don't know what to do or Mr. Parmet didn't know what to do, and ConnectU, obviously, wanted the situation where Mr. Parmet could approach us about that. Through negotiation, we came to the point where the protocol says that, if there is any communication between Mr. Parmet and ConnectU's counsel, if it's in writing, it has to be approved, first, by defendant's counsel. If it is by telephone, everyone has to be present. THE COURT: No, but the scope of the discussions

that he could have were limited to produce program code. MR. HORNICK: Yes, they were.

It was impossible at the time to conceive of every possible problem that could have arisen. THE COURT: But that's the one that's in play here. Yes.

MR. HORNICK: THE COURT:

That's the, apparently, operative

position; so is there any other mechanism that you can conceive of that Mr. Parmet would be permitted to disclose to ConnectU's counsel, or anyone else, any information he obtained from the Facebook hard drives? MR. HORNICK: Well, there was a mechanism for

disclosing it to The Court, and not to ConnectU's counsel, and 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 that's Paragraphs 7 through 9 of the protocol. THE COURT: Right. Under -- the way those work is,

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MR. HORNICK:

essentially, Mr. Parmet provides a report on what he has found, and, then, the Facebook attorneys and Mr. Zuckerberg's attorney, look at that report, and they can identify things that they think don't belong there, because they're privileged, or they're private material, or they're not code, or they're not relevant somewhere, and, then, they send that along with their reasoning to Mr. Parmet, and he reviews that, and, if he agrees with them, then, he takes it off of his list of things that should be provided to ConnectU. If he doesn't agree with them, then, Facebook is required to submit to The Court, within fifteen days, not only their reasoning for why these things should be removed from the list, but, also, Mr. Parmet's actual reasoning for why they should be included on the list, and, if you read our brief and if you read the defendant's brief, it appears likely, very likely, that that was in play, that that was actually happening, that process was playing itself out. Now, on March 7, Mr. Parmet would have submitted to Facebook a report in which he would have said: with you. I do not agree

These things need to be considered by the judge,

essentially. Now, if they weren't code, then, maybe they 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 there? MR. HORNICK: No, what I'm saying is:

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shouldn't have been in there, but it was a mechanism by which he could have brought the situation to the judge's attention. THE COURT: Well, let's assume it was not code,

that it was not what's covered by Paragraph 3. So, if it's not code, then, he's not authorized to pursue this. If he doesn't, in good faith, believe that it's

code, he's not authorized to pursue it. Is he under these provisions -- is it 7 through 9 -- or -- yes, 7 through 9? MR. HORNICK: I think there is some ambiguity in

Paragraphs 7 and 8 about whether the information that Facebook had the right to exclude from the list had to be privileged and not relevant and not code or whether it could be privileged or not relevant or not code. I think that there is some room there by which -THE COURT: Well, let's assume that it's not

privileged, it's not irrelevant, but it's, also, not computer program code. Your position is: It could be, then, included

There is so

much ambiguity in this paragraph, so that, if Facebook were to delete from Mr. Parmet's list information that they believed shouldn't be on the list because it didn't meet all three of those requirements, that they may be wrong in doing that, and, DIANE M. MOLAS, RPR, DE CSR, and NJ CCR USDC - MAD OFFICIAL COURT REPORTER

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therefore, Mr. Parmet may have concluded -- and he had counsel advising him, he may have concluded -- that he could -THE COURT: Well, I guess, at some point, I think

we'll hear from Mr. Parmet or his counsel, but I just want to understand what your reading of this provision is, because he -- to some degree, Mr. Parmet is the subcontractor to you, and let's assume a circumstance in which Mr. Parmet discovers something that is not code, and everybody concedes it's not code. I don't know if that's the case here. It's just

simply setting a hypothetical, but whether he assumes it's not code, but, nevertheless, he thinks it's, for whatever reason, important, something he would like to learn about, does he have any authorization under this to initiate that process of back-and-forth? MR. HORNICK: Your Honor, I'd like to address the

issue whether or not it could have been code separately, but, to answer your question specifically, in Paragraph 8, about midway down Page 12 of the protocol, it says that, just to paraphrase, Facebook has to provide notice and objection to the list that Mr. Parmet has provided, quote, along with an explanation of why the Facebook defendants believe the objected-to materials are not computer program code, are not relevant, and/or are privileged or protected, and I think that it's possible to read that and to conclude that they may -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 relevant. THE COURT: -- entirely disjunctive? The point is, that, if it were Facebook may -- not have the right to take them off of the list, unless they meet all three of those requirements, so it's possible that -THE COURT: and/or means just and? MR. HORNICK: Or that it could mean or. How would I read it that way, that

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If it means only or as opposed to and, then, it's possible that, if it was -THE COURT: Alright. We'll do it a different way.

Take the and off and the slash, and that is -MR. HORNICK: The point is that it could be

MR. HORNICK:

entirely disjunctive, then, it could be relevant information. If it were relevant information, then, it would be relevant to take it off the list, or to argue that it should be taken off the list, but I'd like to address the question of whether -THE COURT: Alright; so that, you suggest, is some

sort of ambiguity in this language? MR. HORNICK: I believe the ambiguity occurs in

another place, Your Honor, which I'll try to find while we're talking, but, as I said, I'd like to address the question of whether these documents that Mr. Parmet found could be code. 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 Now, I don't know what they are, but reasonable

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minds might be able to differ about whether they are code, or not, for two reasons. One is that Mr. Zuckerberg was known -- and the reason I know this is because defendants' counsel told me this during meet-and-confer in Texas, Mr. Zuckerberg was known -to write code in text files, so it would be a Word document, for example. He was writing code in a text file, so it might be difficult to determine and to decide, and reasonable minds might differ as to whether that is code or whether that is a document that is not code. THE COURT: Well, then, we're back to the point of

which, if it's code, there was a known dispute about code, and nevertheless, the settlement term agreement was entered into. MR. HORNICK: Well, again, Your Honor, I don't

think they are necessarily connected, because, for example, Mr. Parmet is saying that these documents should be included on the list, and Facebook is saying they can't be included on the list because they're not code, and he thinks: Well, they

are really, arguably, code, and there is another reason why they could have been, and that's because we believe that the documents that are the subject of Mr. Parmet's documents that he found, we believe that they are Instant Message logs, and they, as I understand it -- and Mr. Parmet would be a better DIANE M. MOLAS, RPR, DE CSR, and NJ CCR USDC - MAD OFFICIAL COURT REPORTER

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person to ask, but as I understand it, they -- were rendered as HTML files. THE COURT: are IM logs? MR. HORNICK: I'm sorry. What is the basis for saying that they

Exhibit 14 to Mr. Chatterjee's declaration. Do you have it? (Pause.) MR. HORNICK: If you turn to the next-to-the-last

page of this exhibit, it's Number 2 at the bottom. This is Exhibit 14 to Mr. Chatterjee's declaration. THE COURT: I have it. And you refer to the E-mail from

MR. HORNICK:

Mr. Parmet to Mr. Chatterjee, dated, December 14, 2007. The last paragraph says: The logs can be found on

Device 371-01 in the Windows -- Windows partition that we were able to image, and I -- and, I believe your forensic experts were previously able to image the paths to the -- and, then, it's blacked out R, and, then, the path is blocked out. Now, the word, "logs," there, I believe it's referring to Instant Messaging logs. The reason that I believe that is because, at the time, right around the same time that this was all happening, a dispute with Mr. Parmet, the defendants did produce some other Instant Message logs, and this is commonly how they're 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 referred to. Also, 37101, very important number. Mr. Zuckerberg's hard drive. That is the hard drive that Mr. Zuckerberg used while he was at Harvard. That's

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That means that these are logs, some

kind of something, that came up on Mr. Zuckerberg's hard drive. Now, whether it was Instant Message logs or some other kind of log, it was still a computer log, and, for this reason, I think there is an argument, or, at least, reasonable minds might differ, as to whether this was code, or not, and, therefore, Mr. Parmet might have been totally within the protocol to include it, but, if Facebook takes the position that, no, you can't, and it's not code, then, they can make the argument that he's in violation of the protocol. THE COURT: Okay; so let me just see if I can

recapitulate a bit on your theory here. One is that there could have been code in this disputed material that was going on. The second is that there is potentially ambiguity to be read into the agreement or the order, I should say, here that would permit Mr. Parmet to raise the question of something that's not code but is arguably relevant. Is that -- that it? Now, if the latter, why would there even need to be DIANE M. MOLAS, RPR, DE CSR, and NJ CCR USDC - MAD OFFICIAL COURT REPORTER

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an order; that is to say, Mr. Parmet is exposed to all of this material. Presumably, he can, if he's not under some sort of limitation, can disclose that, as well. MR. HORNICK: Nothing under this protocol comes to

ConnectU's attention without Facebook's or The Court's permission. THE COURT: Right; and the reason for that is that That was the whole

it's supposed to limit itself to code. purpose of this exercise, I assume. MR. HORNICK:

But what we don't know, Your Honor,

is whether Mr. Parmet believed the information arguably was code. THE COURT: Right. And, therefore, he was trying to --

MR. HORNICK: THE COURT:

Well, from that perspective, the only

basis, I think, fair basis in his authorization to make disclosures is that it is somehow code. The ambiguity, it seems to me, drops out when you look at the purpose and structure of this agreement, which was to limit his exposure or, at least, his ability to pass on his disclosure to other things to be found in the hard drives. MR. HORNICK: Well, Your Honor, I don't really want There was

to box Mr. Parmet in a corner, but I will say this:

discussion about the purpose of the security provisions in the DIANE M. MOLAS, RPR, DE CSR, and NJ CCR USDC - MAD OFFICIAL COURT REPORTER

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protocol at the September 13 hearing, and the purpose of these provisions was not to prevent the production of responsive documents. It was to prevent ConnectU from coming into possession of private information; such as, E-mails between girl friends, financial information, and privileged information. THE COURT: No, I understand all of that, and what

it did is, it said, I think, that access will be provided, more or less unrestricted access, to review anything on the hard drive, so long as the only disclosure that's made by this subcontractor is of code material. That was the balance that was struck. Now, there's an independent obligation, obviously, on the part of Facebook to provide Discovery according to independent Discovery responsibilities; yet, that's a different issue. The issue here, it seems to me, is -- being a focused issue is -- simply: What is Mr. Parmet authorized to

discuss with anybody else; and that, it seems to me, is a question of construction of this order by Judge Collings. MR. HORNICK: Well, I would argue here, Your Honor,

that, if the situation arose in which Mr. Parmet found documents that, even, arguably were not code, documents that were what everyone else would just call documents; such as, a 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 thing. It's not an extended discussion, but it is a discussion of something that is not code, but I think I understand that argument. MR. HORNICK: There's another possibility,

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letter, an E-mail, something like that, then, I would argue that, under Paragraph 3, he had the right to get all the counsel on the line and simply say: I found some things that

were not code, and I don't think that would be a violation of the protocol. THE COURT: Well, I don't know how one could

discuss something that's not code. MR. HORNICK: nothing more than that. THE COURT: Well, that's the -- amounts to the same Well, I'm saying, Your Honor, he has

Your Honor, and that is that Mr. Parmet was not restricted in talking to Facebook and Zuckerberg's attorneys about anything that he found. THE COURT: Mm-hmm. Which is what he did or what I

MR. HORNICK:

understand that he did, at least, and, at that point, Facebook, in our view, had an affirmative obligation to produce those documents, and, in fact, they told him, on December 16 and 18, that they were going to produce these documents. 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 Now, it's a separate subject, I think, of what happens after that, whether they get produced, or not, and

24

whether Mr. Parmet is right or wrong in feeling like he has some kind of an obligation to The Court or to ethics or to what's right and wrong, to bring these documents into the open, but he certainly could have discussed them with Facebook, and it is Facebook that has put -- and Mr. Zuckerberg -- who have put him in this situation. THE COURT: Well, yes, I think that's right.

It's a separate set of issues about what their obligations are in an ongoing process, but is there anything else that you want to focus on? MR. HORNICK: Well, I would like to focus on that

obligation, unless Your Honor would like to focus on something else. THE COURT: Well, no, I think I want to hear from

Mr. Chatterjee, and I'll see what else I want to do, but are there any other approaches to this that you see with respect to Mr. Parmet's obligations? MR. HORNICK: You're asking if there are other ways

that the information could have come out, under the protocol? THE COURT: Yes.

Through Mr. Parmet. MR. HORNICK: I believe those are the ways that

either -- well, I suppose another way is Mr. Parmet could have 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 informed Facebook that he wanted to inform ConnectU of the situation in writing.

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They would have had to have approved it, so that they could have vetoed that. I mentioned the phone call, and I mentioned the Paragraph 7 through 9, and, I mean, entirely independently of the protocol, and -- oh, and I mentioned Mr. Parmet bringing it to Facebook's attention, and, then, I think, totally independently of that, I suppose Mr. Parmet could have come to The Court; I mean, we are in a very strange situation here. If you look through these -- these E-mails that are the exhibits, Mr. Chatterjee's declaration, E-mails between the Orrick firm and Mr. Parmet, he is an independent expert who does not appear to have counsel, and, yet, they were telling him that they need to meet and confer with him under Local Rules before they file a motion. Now, they don't know that he has counsel, so how does he know what that means? I think that they -THE COURT: my opinion. He did have counsel at that point, but I think he did have counsel at that point. MR. HORNICK: I believe he did, but I don't I think it's coming out in camera, in

believe, from reviewing these E-mails, which I just saw for 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 first time the other day when these were submitted to

26

The Court, I think, from reviewing those E-mails, it is not apparent to me that it would have been apparent to anybody reading them at the Orrick firm that he had counsel, and, therefore, from their point of view, he's an independent expert who is not a lawyer and he needs some kind of protection. It seems to me, at that point, he could have come to The Court and maybe should have come to The Court, because there wasn't anyone protecting him in Orrick's eyes. Now, possibly, maybe he could have been between lawyers at that point, too, because, as we explained in our brief, the first lawyer passed away, but the point is -simply the point is that Mr. Parmet, I think, could have come to The Court in camera and, yet, you wouldn't have learned anything, and the Court could have, then, decided how he should be dealt with, with respect to his relationship with Orrick, and whether these documents needed to be produced by Mr. Zuckerberg and by Facebook. THE COURT: Alright; so, Mr. Chatterjee, let me

understand your position on this. Let me make an analogy, not a perfect one, by any means, but one of the things that came to my mind is the Doctrine of Plain View, which authorizes those who are constrained by a search warrant to seize materials not covered 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 by the search warrant but that are in plain view and are

27

evidentiary of the -- some sort of criminal activity, not a perfect analogy on a whole range of issues, but let's put it in the most extreme sense. He encounters some document that discloses, wholly independent of code, the potential for physical harm to some other person, the imminent potential for physical harm to some other person. Is he barred from discussing that, at all? MR. CHATTERJEE: Your Honor, in your hypothetical,

which is not a factual situation here -- and I can explain that -- I think the answer to that is: THE COURT: Alright. Yes.

Now, he discloses that, how? MR. CHATTERJEE: THE COURT: He --

You mean, he is barred? He is barred.

MR. CHATTERJEE: THE COURT:

He can't disclose that.

He's like a -- well, not a psychiatrist, I guess, in California -(Laughter.) THE COURT: -- but like a lawyer or a priest? Yes, Your Honor.

MR. CHATTERJEE:

I mean, there is a court order that restricts what he may or may not talk to. 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 It was one that the Finnegan Henderson firm originally drafted, and, then, we participated in making revisions, and we litigated some of the issues. THE COURT: Now, so the scope of his writ is

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entirely to disclose nothing but code? MR. CHATTERJEE: Your Honor. THE COURT: Now -MR. CHATTERJEE: And, in fact, he's supposed to -Okay. That's absolutely correct,

if he looks at something; such as, the types of documents Mr. Hornick identified, he is to quickly identify whether it has, what's referred to as, the syntactical style in certain languages. These documents; such as, Exhibit E to the Wolfson declaration that was in the 56F, that Mr. Parmet also found, if you look at them, there is nothing that even closely resembles code, nothing. THE COURT: Well, I guess I wasn't forced to -- or

certainly hadn't confronted the question of whether or not he'd exceeded his authority in his Affidavit under the Rule 56F. MR. CHATTERJEE: Oh, no, Your Honor.

I'm sorry, I didn't mean to be confusing. The Wolfson declaration was a 56F. 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: Mm-hmm.

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MR. CHATTERJEE: the Quinn Emanuel firm.

That was separately submitted by

They attached to it, as Exhibit E, an Instant Message chat log. That Instant Message chat log was one of the documents that Mr. Parmet found. If you look at that document, there is nothing in there that comes even close to resembling code. THE COURT: Let me step back from that a bit.

Is it also a document that you have been disclosed by Facebook? MR. CHATTERJEE: It was a document we produced.

We produced this document. THE COURT: Okay; so he made reference to a

document that was already disclosed by Facebook? MR. CHATTERJEE: No, Your Honor, he actually had

identified it, but we already had it in our production tracks, so it was going out the door, and it was produced. THE COURT: Alright; so, let me understand the

status of the particular documents that were in dispute here. Were they in the production track at the time that the dispute arose? MR. CHATTERJEE: THE COURT: Yes, Your Honor.

That is, things that were going to be

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 disclosed by Facebook? MR. CHATTERJEE: THE COURT: Yes, Your Honor.

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But could not be disclosed by

Mr. Parmet; is that it? MR. CHATTERJEE: THE COURT: Correct.

Okay. And there was a reason for that,

MR. CHATTERJEE:

Your Honor, because we had done a very, very broad keyword search of all of our electronic devices, and we were doing document review of those, eliminating the privilege privacy issues, and the like, and we were rolling out the production and sending it, essentially on a monthly basis, as we were getting through the documents, and we kept the Quinn Emanuel firm fully apprised of that. THE COURT: Well, where were these documents that

Mr. Parmet referred to in the disclosure queue? MR. CHATTERJEE: I think what we had said to the

Quinn Emanuel firm -- and I think we put this in our papers -we had said we were going to be disclosing them in mid-to-late February, and we said we would be done with all the production from the electronic devices that were subject to the protocol. THE COURT: Now, how do I know that the documents

that Mr. Parmet referenced are ones that were going to be disclosed, apart from your representation? MR. CHATTERJEE: Your Honor, what I can tell you

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 is, is:

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We know the methodology that he used to find these,

and we had done the same methodology in the devices. THE COURT: Well, you say you know the methodology

that he used to find these, but his methodology was directed, presumably directed at code, rather than non-code but relevant documents. MR. CHATTERJEE: It was not, Your Honor; in fact,

that was part of our problem. When we reviewed his logs, which he was obligated to provide us under the protocol, it was very clear that what Mr. Hornick had said in court at the hearing in front of Judge Collings, that there was a computer program that was used to pull out code, but that, in fact, was not what he did. On many occasions, it appears to be a computer -- a keyword searching. As a matter of fact, we had a fully-executed expert declaration that had reviewed his logs that basically was saying what it was told -- what we were told -- he was going to do, in fact, was not what he did. Now, we didn't ultimately file that because of the standstill agreement, the settlement documents which I have here, but I don't know if we need to get into that today. THE COURT: obligation. As you see it, he is simply barred from any DIANE M. MOLAS, RPR, DE CSR, and NJ CCR USDC - MAD OFFICIAL COURT REPORTER But back to the question of his

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 discussion of non-code documents? Simplistic, that's it. MR. CHATTERJEE: Yes, Your Honor.

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If he does get into a document that isn't code, he can look at it to see if it has what they say is the syntactical style, that looks like it has code in it, but, beyond that, he can't review it in detail. Now, just to be clear, as to these documents that he identified, even though we disputed the interpretation of a protocol, we did log them, we provided the log to Mr. Parmet, and Mr. Parmet was going to be given the opportunity to object and to take it to court if he felt it was appropriate; so, notwithstanding the fact that we disagreed with him under the protocol, and we disagreed with what he did, and we felt he had violated it, we were still willing to take this to court to resolve the dispute. THE COURT: Now, is it your position, then, that

all of this was pre-admitted by the settlement discussions and the term agreement? MR. CHATTERJEE: (Pause.) THE COURT: What do you want me to do? Your Honor, what I'd like you to Yes, Your Honor.

MR. CHATTERJEE: do is dismiss this case. THE COURT:

Well, but that's a matter for

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

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Judge Ware; I mean, the term agreement says that he's the one who's got the responsibility for this, in reviewing it, and now, of course, there is a dispute about whether it's actually been settled. Now, I don't think I'm going to go beyond what the term agreement is. That's where the resolution of any

disputes regarding this should be; that is, in the San Jose Division of the Northern District. MR. CHATTERJEE: THE COURT: I agree with you, Your Honor.

Okay; so I'm not in a position to

dismiss the case, I don't think, but to await the outcome, now that there's a dispute, before Judge Ware; so what else do you want me to do? MR. CHATTERJEE: So, Your Honor, the other thing

you can do is you can await the outcome of those proceedings in front of Judge Ware. If Your Honor believes that you have jurisdiction, one thing you could do is refer this matter to Judge Collings, for Mr. Parmet, to talk about in camera what he looked at -THE COURT: Well, I'm not going to be doing that.

This is not a, you know, trick question. It is a question of what it is that I'm really being asked to do and what my authority is to do it. The only provisional kind of authority I think I have in this area -- or, at least, the only one that I would 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 exercise -- is contempt; that is to say, someone is in violation of a court order and I maintain some sort of authority to deal with that as a contempt.

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I'm not sure if there's anything else, I mean, you say I could dismiss the case. I suppose it's possible for me

to tee it up to dismiss the case by saying that I followed the Massachusetts rules that you've identified, and they're applicable here. I'm loathe to do that when the parties have a mechanism for resolving this locally, which is what they wanted to do, apparently, so it's back again. MR. CHATTERJEE: Okay.

Thank you, Your Honor. Going back to your original question: want you to do? If Your Honor is inclined to hold onto this case until the proceedings before Judge Ware are resolved, I would stay this case. Your Honor, the only reason I had suggested Judge Collings handle this is because he handled all the issues leading up to the -THE COURT: But he doesn't have contempt power, and What do we

that's the reason I took it. MR. CHATTERJEE: Correct, Your Honor.

He can do a court recommendation, but, if DIANE M. MOLAS, RPR, DE CSR, and NJ CCR USDC - MAD OFFICIAL COURT REPORTER

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Your Honor wants to handle it, that's a perfectly appropriate thing to do. I'll tell you, given the confidentiality issues that we've had in this case, there is a lot of concern at Facebook, and, if Your Honor does feel it's appropriate, we would like to be heard on whether there's been a violation of the order, but we would like ConnectU's counsel to be excluded from the proceedings. Mr. Parmet. THE COURT: the question is: It is, if you press it, I suppose, and It's really an issue between us and

Are you pressing it?

Mr. Hornick, it seems to me, unless you want to argue otherwise, did the right thing, which is to bring to my attention -- or, bring to The Court's attention -- the question of some issue arising from the application of this rule, and that's, I think, the appropriate way to deal with it. I don't think he's asked me to do anything about that, other than to hold a hearing, which I'm doing. Of course, I'll ask him in a minute what he wants me to do, but I don't hear you asking me to do anything, other than to go encounter with Mr. Parmet and you. MR. CHATTERJEE: THE COURT: To what end? DIANE M. MOLAS, RPR, DE CSR, and NJ CCR USDC - MAD OFFICIAL COURT REPORTER Your Honor, what --

I guess the answer to the question is:

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 want? MR. HORNICK: THE COURT: Oh, yes, Your Honor.

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As interesting as it would be to talk to both of you, on any occasion. MR. CHATTERJEE: Thank you.

I think the simple answer here is to deny their motion, deny their motion on the things that they're asking for. I would also like a court order instructing Mr. Parmet not to have further conversations about any of the work he was doing with anyone from ConnectU, and I think; at least, until we resolve the issue before Judge Ware, that should resolve where we are, and we don't need to press anything further at this time. THE COURT: Alright; so you want an order, more

specific order, to Mr. Parmet? MR. CHATTERJEE: I think, Your Honor, just having

talked through with Your Honor, I think that's probably the most logical way to go at this point. THE COURT: Mr. Hornick, is there anything that you

Well, now, that you can get from me. Well, I don't really know what I can

MR. HORNICK:

get from you, Your Honor, but I'm willing to ask. I mean, what we'd like, Your Honor, is for you to interview Mr. Parmet in camera, because I think that there are 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 to do? MR. HORNICK:

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overriding considerations here that go beyond what happens to be in this protocol. I think that, if you talk to Mr. Parmet, you will probably find that he was trying to do the right thing, which may not have been in strict compliance with the protocol, and, if so, then, I think, The Court should consider that and should give some credit for that. THE COURT: But to what end? To what end, because,

I keep asking the question:

ultimately, I don't have this kind of free-floating writ to interview people and chat with them and find out historically interesting information about the conduct of this litigation. I'm supposed to rule on motions or some sort of action that's presented to me, and, so, I've been told to -told -- I've been asked to have some sort of conversation with Mr. Parmet in which I direct him not to have any further conversations, pending the outcome before Judge Ware. Now, is there something specific that you want me

Well, in -- in -- we want you to take

these documents from Mr. Parmet. I understand that he has them with him today. also asked Facebook to bring them along today. We would like you to take them in camera and take a look at them, and I think that, if you did that, in the course DIANE M. MOLAS, RPR, DE CSR, and NJ CCR USDC - MAD OFFICIAL COURT REPORTER We

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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 with that? MR. UNDERHILL:

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Your Honor, and I think that it is something Your Honor should rule upon. THE COURT: How is that? Your Honor, they were getting

MR. UNDERHILL:

E-mails from Parmet on December 14, where he was laying out, with great specificity, apparently, what he felt was the smoking gun. THE COURT: And what is the mechanism for dealing

The mechanism for dealing with that

at that time from Orrick is to produce the documents. You cannot sit on smoking guns when they're, I believe, inferring from the documents a relatively small quantity of documents. Your Honor could certainly find out today, because I understand they are in the courtroom, but you cannot rely on the refusal to produce a small number of smoking-gun documents on the theory that: Oh, we've got lots of documents, and

we're going to do it in the ordinary course of time. THE COURT: Why isn't the answer to this to say to You knew

someone who enters into an agreement or appears to: you didn't have everything.

You didn't ask for representation

that there were no smoking guns. You didn't enter into an agreement to say: Are

there any other documents that you have not produced 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 would bear on the question? None of that was done.

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Parties knew that there was incompleteness to the Discovery process at that point. final conclusion. Now, those who would want to unravel an agreement, certainly would want to pull at whatever strings they can pull at, but the first order of business is to say: Why is it that It had not come to rest its

we should unravel this if there was an agreement between the parties, on those premises? MR. UNDERHILL: THE COURT: Right.

Including -- you're making the We had

argument -- you're making the argument to Judge Ware:

no idea there was something out there, and, in fact, nobody will even let us look at it. MR. UNDERHILL: I think there is a compelling

answer to your question, Your Honor. I think it is in the documents that counsel has filed with their opposition. There is an E-mail in early February. E-mail by Mr. Wolfson at the Quinn Emanuel firm. THE COURT: Can you -Let me have that? Sure. There is an

MR. HORNICK:

MR. UNDERHILL: THE COURT:

Just bring me to the document.

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: Well, I'm going to refer you to a

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document that I think is more compelling than the one that Mr. Underhill was referring to. This is Exhibit 7 of -THE COURT: The penultimately compelling document? That remains to be seen, Your Honor.

MR. HORNICK: THE COURT:

Compelling document? That would be Exhibit 7 to

MR. HORNICK:

Mr. Chatterjee's declaration, in which is a January 23, 2008 E-mail from Miss Sutton of the Orrick firm, representing Facebook, and Mr. Zuckerberg to Mr. Wolfson, who was with Quinn Emanuel firm representing ConnectU, and, in the last paragraph on the first page of this E-mail, it says: With

regard to Facebook defendants' production, we intend to produce by mid-February all responsive documents, paren, with the exception of code, closed paren, retrieved from the hard drives that are currently subject to the protocol, so, in this E-mail, January 23, which was the day after the California court issued the order, that the case, that case, by the way, only the California case, had to be mediated within 90 days, the day after they promised that they're going to produce these documents by mid-February. At that point in time, they had no idea when the mediation would be scheduled. As it turned out, the mediation was scheduled on 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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February 11 for February 22, but nobody knew that at the time. I'd also like to refer The Court to Exhibit 14 to this declaration, Chatterjee declaration, and that is a December 15 E-mail from Miss Sutton to Mr. Parmet. This is the day after Mr. Parmet brings these documents to Facebook's attention, and, recall, we looked at that document, which was the previous document, Exhibit 14, and, in that document, all he did was tell him that they found some things. He didn't say: Are you going to produce them; when

will you produce them; you need to produce them. All he did was tell them about them, and, the next day, in the fourth paragraph, in the middle, they say, quote: We will review these documents consistent with the massive document review we already have underway, and we'll produce it, if appropriate; and, then, the next day, Exhibit 16 -sorry. It was three days later, December 18. This is Exhibit 16 to the Chatterjee declaration, and, if you look at the one that came from that, before that, from Mr. Parmet, he wasn't saying: When are you going to

produce these documents; you need to produce them. He wasn't insisting, but, nevertheless, on December 18, they wrote to him again, and, at the bottom of the first page of this E-mail, the penultimate paragraph, they say, quote: We will also review the documents you have DIANE M. MOLAS, RPR, DE CSR, and NJ CCR USDC - MAD OFFICIAL COURT REPORTER

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identified in violation of the protocol, to the extent we have not done so already, and will produce them if responsive, not privileged or otherwise objectionable. We will tell

ConnectU's counsel when production is complete. Now, this was only three days, four days after Mr. Parmet told them about the documents. They told him,

unsolicited, that they would produce them, twice. THE COURT: Well, see, the problem with that -- and You

it really goes back, I guess, to Exhibit 7, which is:

knew, at the time that you entered into the agreement, the settlement term agreement, that it wasn't complete. MR. HORNICK: Well, Your Honor, that happens in

many cases, but not in all cases is there an affirmative obligation to produce. Now, Your Honor referred to a case -THE COURT: Wait.

The affirmative obligation to produce. Now, what does that mean? MR. HORNICK: THE COURT: Yes.

You mean, in Discovery? Yes.

MR. HORNICK: THE COURT:

And Discovery here is ongoing and

incomplete, so what you would like me to do is rear back and say: This disclosure should have been made on "X" date,

before the settlement term agreement? 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: reason is -THE COURT: Where will I find that in the That's right, Your Honor, and the

46

Federal Rules of Civil Procedure, or anywhere else? MR. HORNICK: Well, Rule 26 says, for example, that

there must be a timely supplementation if you find out that your production is incomplete. Now, since Rule 34 only gives you 30 days to produce documents in the first place, I would argue that, if you come into knowledge that your production is incomplete timely, there's a good argument to be made that timely means around thirty days, no more than thirty days. Now, this was not a case, Your Honor, where -THE COURT: Why didn't you come to court and ask

for that, then, because you had more than thirty days after your request? MR. HORNICK: But, Your Honor, we had three motions

to compel pending over a period of two years. THE COURT: Right; so you didn't bring that one.

The short of it is that -- at least, the argument, I think, can fairly be made that -- you knew it was incomplete, you knew there was a dispute, and, yet, you entered into the settlement term agreement. Now, somebody may say: Well, there is still some

sort of obligation to provide exculpatory evidence before the DIANE M. MOLAS, RPR, DE CSR, and NJ CCR USDC - MAD OFFICIAL COURT REPORTER

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negotiations take place; and, maybe, that's true somewhere. I'm not aware of it. MR. HORNICK: Well, Your Honor, we cited to you the

Spaulding case, and I believe you indicated a moment ago that you weren't impressed with that case, but I think that case is directly relevant. It did involve a minor who -THE COURT: I mean, that's like saying: It did

involve a minor; which is to say it was fundamentally different. MR. HORNICK: THE COURT: No.

I have to actually have hearings on

whenever a minor comes in here, and I have to make an independent determination. I don't make any determination, nor do I think Judge Ware is going to, about whether or not this was a good agreement or bad agreement; so people with lots of money who have engaged in some discussion and they clearly settled the matter, that's the issue, so Spaulding doesn't really -MR. HORNICK: There is a reason, Your Honor, why

Spaulding does apply, and that is because in that case the plaintiff failed to seek the information in Discovery, and, therefore, The Court said the defendant has no obligation to disclose this information and that the reason that the obligation arose was because, when the settlement was DIANE M. MOLAS, RPR, DE CSR, and NJ CCR USDC - MAD OFFICIAL COURT REPORTER

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submitted to The Court for The Court's approval, that is when the fraud on The Court occurred. However, if, as in this case, the plaintiff had sought Discovery, then, the defendant would have had an obligation to disclose that information, and they didn't do so. THE COURT: It doesn't follow. There's also another case,

MR. HORNICK:

Your Honor, and that is the KATH v. Western Media case, which we can hand up. This is from the Supreme Court of Wyoming, and, in this case -THE COURT: Why don't you pass it up, sir. Approach?

MR. HORNICK: THE COURT:

Mm-hmm.

(Handed to the Deputy Clerk.) MR. HORNICK: In this case, the appellants were

represented by an attorney with a strange name, which is escaping me at the moment, and it was Panell (phonetic), Planell (phonetic) -- Planell (phonetic), Mr. Planell (phonetic), he was an attorney, he represented the appellants, and he testified in a deposition, prior to settlement, that he represented all of the appellants equally, and the appellants had sought Discovery of him, and not just the deposition, but they also had sought Discovery of his DIANE M. MOLAS, RPR, DE CSR, and NJ CCR USDC - MAD OFFICIAL COURT REPORTER

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litigation file, and he produced it, but he failed to produce a letter from that file, and that letter admitted, clearly, that he did not represent all the defendants equally. The case settled. After the case settled, Mr. Planell (phonetic) disclosed this letter. In this particular case, the trial court affirmed the settlement. There was a Motion to Enforce the Settlement,

trial court affirmed it, went up on appeal, the Wyoming Supreme Court said: No, that Mr. Planell (phonetic) had an

affirmative duty to produce this document. They said that he had -- that the appellee's attorney had an ethical duty to disclose the letter before settlement. That case cited another case, called, Virzi versus Grand Trunk. THE COURT: Virzi, V-I-R-Z-I. 571 F.Supp. 507, Eastern District of

MR. HORNICK:

Now, in that case, the plaintiff's attorney, the plaintiff died, and the plaintiff's attorney failed to tell the other side that the plaintiff had died, and, then, the plaintiff's attorney went into settlement talks with the defendant and they settled, and, then, after they settled, the plaintiff's attorney disclosed that the plaintiff had died, DIANE M. MOLAS, RPR, DE CSR, and NJ CCR USDC - MAD OFFICIAL COURT REPORTER

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The only reason that I settled this

case was because I thought the plaintiff would make an excellent witness at trial; so, in that case, the Eastern District of Michigan overturned the settlement, because this information should have been disclosed before the settlement, and it said, quote, there is an absolute duty of candor and fairness on the part of counsel to both The Court and opposing counsel, end quote. Quote: Zealous representation of interest,

however, does not justify a withholding of essential information, such as the death of a client, unquote; when the settlement of the case is based largely upon the defense attorney's assessment of the impact the plaintiff would make on the jury, unquote. So, in these two cases and the Spaulding case, which I urge Your Honor to read cover to cover, because these three cases support -THE COURT: I have. -- the situation here.

MR. HORNICK: THE COURT:

They don't. They don't.

The short answer is:

We're dealing with the question of The Court's responsibility to act more or less independently on behalf of minors in Spaulding. Here, in Kath, K-A-T-H, the Wyoming case, we're DIANE M. MOLAS, RPR, DE CSR, and NJ CCR USDC - MAD OFFICIAL COURT REPORTER

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attorney actually represented the parties involved, and, in the third case, we're dealing with the question of whether or not there is even a party to represent, Virzi, and the attorneys' abilities to represent that party. MR. HORNICK: THE COURT: With all due respect, Your Honor --

With all due respect, I'll finish my

statement, an