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

Filing 345

Opposition re #338 MOTION Motion For Access To Pleadings And Discovery Files filed by Facebook, Inc., Christopher Hughes, Andrew McCollum, Dustin Moskovitz, Mark Zuckerberg. (Attachments: #1 Affidavit Declaration of Monte Cooper, #2 Exhibit Ex. 1 to Cooper Decl., #3 Exhibit Ex. 2 to Cooper Decl., #4 Exhibit Ex. 3 to Cooper Decl., #5 Exhibit Ex. 4 to Cooper Decl., #6 Exhibit Ex. 5 to Cooper Decl., #7 Exhibit Ex. 6 to Cooper Decl., #8 Exhibit Ex. 7 to Cooper Decl., #9 Exhibit Ex. 8 to Cooper Decl., #10 Exhibit Ex. 9 to Cooper Decl., #11 Exhibit SEALED Ex. 10 to Cooper Decl., #12 Exhibit Ex. 11 to Cooper Decl., #13 Exhibit Ex. 12 to Cooper Decl., #14 Exhibit Ex. 13 to Cooper Decl.)(Chatterjee, I.) (Attachment 11 replaced on 7/19/2011) (York, Steve).

EXHIBIT 8

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UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
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CONNECTU, INC.
: DOCKET NUMBER CA0710593
PLAINTIFF
:
versus
: UNITED STATES COURTHOUSE
:
FACEBOOK, INC., ET AL
DEFENDANTS
: BOSTON, MASSACHUSETTS
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JUNE 2, 2008
2:30 p.m.

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TRANSCRIPT OF MOTION HEARING
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UNSEALED HEARING ONLY
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BEFORE:
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THE HONORABLE DOUGLAS P. WOODLOCK
UNITED STATES DISTRICT JUDGE

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APPEARANCES:
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ATTORNEYS FOR THE PLAINTIFF:
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FINNEGAN HENDERSON FARABOW GARRETT & DUNNER LLP
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BY:
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JOHN F. HORNICK, ESQUIRE
901 NEW YORK AVENUE, NW
WASHINGTON, DC 20001-4413
TELEPHONE: [phone]
E-MAIL: [e-mail]
FAX: [phone]

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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]

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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

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UNSEALED HEARING
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connected, but, yes, the term sheet was signed, and there was

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knowledge that there was some kind of a dispute with

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Mr. Parmet.

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THE COURT:

Okay; and, in that connection, there

were a number of unresolved Discovery matters at that point?

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MR. HORNICK:

Well, it was known that -- it was

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known by ConnectU that Facebook had documents that they had

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not yet produced, but the importance of those document, we

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didn't know; I mean, Facebook hadn't said we have -- have any

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material documents that we're going to produce.

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say.

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THE COURT:

Were they under an obligation to tell

you how material they viewed the documents?

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MR. HORNICK:

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THE COURT:

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They didn't

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

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under an obligation to tell us, per se, but I believe they

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were under an affirmative obligation to produce the documents.

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THE COURT:

Which was suspended by that settlement

exercise, I take it?
MR. HORNICK:

Well, at some point in time it was

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suspended, Your Honor, but the defendants knew from Mr. Parmet

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that these documents had been identified on December 14.

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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

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January 7; in fact, it was December 14, so they actually had

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five weeks before the mediation even became a possibility,

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during which those documents should have been produced, and,

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after the remediation became a possibility, there was another

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three weeks during which they could have produced them before

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mediation was actually scheduled, which was on February 11,

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and, then, on February 11, there was another week, or so,

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before the mediation actually occurred.

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Somewhere in there, there was a decision that

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parties would hold up.

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you, but the point is that there was a period of, somewhere in

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the neighborhood of, eight weeks, during which the case was

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business as usual, and, in fact, in mid-February -- I believe

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it was the day after the parties scheduled the mediation --

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the day after the parties scheduled the mediation, Facebook

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filed a Motion for Summary Judgment on the copyright claim,

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and they, therefore, even as of the day the mediation had been

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scheduled, believed the case was alive, and, if these

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documents were, in any way material to that motion, they

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should have been produced.

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THE COURT:

It's in my notes, I can provide it to

And you filed a renewed motion under

56F?
MR. HORNICK:

There was a renewed motion under 56F,

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Your Honor, but it related to the Summary Judgment motion on

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the contract, which was filed in August of last year.
DIANE M. MOLAS, RPR, DE CSR, and NJ CCR
USDC - MAD
OFFICIAL COURT REPORTER

UNSEALED HEARING
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Shortly after the motion for Summary Judgment was
filed, the parties did put things on hold.

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I'm sorry, shortly after the copyright

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Summary Judgment motion was filed in February, the parties put

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things on hold, so there wasn't a Rule 56 related to that.

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THE COURT:

I see.

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Now, turning to the order for Discovery on

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computer-memory devices, Document Number 103, in this case, is

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it your understanding that the matters to which Mr. Parmet

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referred are not matters as to which he was properly

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positioned to bring them to your attention?

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MR. HORNICK:
Your Honor.

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Well, I don't really know for sure,

I can surmise, from what he said to me, that it
wasn't code, and the subject to protocol is code.

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THE COURT:

Mm-hmm.

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MR. HORNICK:

But, other than what we put into our

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brief about the subject matter of those documents, I don't

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really know what they are.

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THE COURT:

Well, is there any other mechanism by

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which Mr. Parmet would properly have access to these

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documents?

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Let's assume that we're still in the Discovery

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phase of the case, or they're clearly in the Discovery phase

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

UNSEALED HEARING
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I should add that I make no judgment about
settlement or not settlement.

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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

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deal with, but let's assume that we're still actively pursuing

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this issue.

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Is there any basis on which Mr. Parmet could
disclose matters beyond code?

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MR. HORNICK:

Your Honor, when you first asked the

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question, you asked about access and, now, you're asking about

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disclosure.

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I'd like --

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THE COURT:

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MR. HORNICK:

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THE COURT:

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MR. HORNICK:

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is:

I'd like --- to answer for both.

Yes.
With respect to access, the answer

Yes.

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Mr. Parmet had the ability and the right to access

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everything, everything that was on those hard drives, and the

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reason was the very subject of the September 13 hearing.

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When we came into the September 13 hearing before

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Judge Collings, the parties had not agreed, at that point, on

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a couple of remaining issues in the protocol, and one of them

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was the scope of the search that he could perform.
DIANE M. MOLAS, RPR, DE CSR, and NJ CCR
USDC - MAD
OFFICIAL COURT REPORTER

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UNSEALED HEARING
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Now, the defendants took the position that he

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should only be able to search for code, and I explained to

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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

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to search everything.

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He had to have access to everything on those hard

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drives, and I think that's clear in the protocol.

I think

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it's clear in the transcript of the September 13 hearing.

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With respect to disclosure, if he were to find

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information that was not code, under the protocol,

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technically, he was not supposed -- he could not disclose it

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to ConnectU, but he could -- there were a couple of mechanisms

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by which that information could have come out.

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One was, in our view, he could have called or

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E-mailed Facebook's counsel and ConnectU's counsel and

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suggested there be a conference call.

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During that conference call, he could have said,

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simply:

I found information, found documents, that weren't

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code; may be relevant.

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That's all he had to say.

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THE COURT:

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Where do I find that he's authorized to

do that, though?
MR. HORNICK:

In Paragraph 3 of the protocol,

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Your Honor, it gives them -- it simply says that, if there is

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any communication by telephone with ConnectU's counsel,
DIANE M. MOLAS, RPR, DE CSR, and NJ CCR
USDC - MAD
OFFICIAL COURT REPORTER

UNSEALED HEARING

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regarding work under the protocol, Facebook's counsel needs to

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be on the call, so he wasn't prevented from talking to us,

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talking to ConnectU's counsel.

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Under the protocol, he was only prevented from

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talking to ConnectU's counsel without Facebook's counsel also

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being on the line.

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THE COURT:

I'm just looking at this fairly

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carefully, I think, and the operative language that I'm

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concerned about is the language that says that he may not

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discuss with ConnectU's counsel or with anyone else any

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information obtained from the Facebook hard drives, except,

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with respect to program -- produced program code.

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Wasn't it a condition of his involvement that he

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was not to discuss with anyone else anything other than

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produced program code?

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MR. HORNICK:

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Technically, that is correct under the protocol.

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THE COURT:

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MR. HORNICK:

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Yes, Your Honor.

Okay; so -Now, I can't speak for what

Mr. Parmet was thinking.

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THE COURT:

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I'm just trying to understand what the provisions

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No, I understand.

of the arrangement are.

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(Pause.)

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THE COURT:

Okay.

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

UNSEALED HEARING
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THE COURT:

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Do you want me to rule on the protocol,

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whether or not Mr. Parmet was authorized to disclose anything

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other than the code?

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MR. UNDERHILL:

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THE COURT:

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MR. UNDERHILL:

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

Your Honor.

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No, Your Honor.

What I am looking at, however, is, we believe,
under the facts as we know them now, is very, very serious

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attorney misconduct in this case and a violation of

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This Court's orders by Facebook's attorneys, and that is an

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issue --

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THE COURT:

Let me see.

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What does in a mean?

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Does it mean that they willfully withheld documents

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that should have been disclosed; that is, they had an

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obligation to disclose the documents and they didn't disclose

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them?

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MR. UNDERHILL:

That is, in fact, the case,

Your Honor.
THE COURT:

Now, how do I deal with that when it is

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a moving target; that is to say, it was rolling Discovery, and

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they have not come to the concluding point at which they were

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obligated to make that disclosure?

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MR. UNDERHILL:

Well, we believe that they were,

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

59

UNSEALED HEARING
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However --

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THE COURT:

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MR. UNDERHILL:

Right.
However -- however, Your Honor, if

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we get those documents and if they're relevant, that's an

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additional ground that we would apply to The Court for setting

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aside the settlement agreement, which is, if there was

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attorney misconduct, they withheld extremely important

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documents, and, by the way, I'm only assuming that those are

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the facts, but we're not going to know that those are the

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facts, unless Your Honor is willing to look at the documents

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in camera.

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I do agree, Your Honor, that this idea of:

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settle cases.

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Oh, you

of appealing to go there.

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There is lots of Discovery out there; it's kind

I think the difference here is that there was a

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specific, heightened identification of a very small universe

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of documents that, apparently, inferring from the documents,

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was the smoking gun that was the difference between victory

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and loss in the case, or, potentially, the difference between

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victory and loss.

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We're never going to know that, unless Your Honor

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looks at the documents and has some kind of a reaction that we

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can take to Judge Ware, as to --

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THE COURT:

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Is that what is called an advisory opinion?

Some kind of reaction?

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

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UNSEALED HEARING
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MR. UNDERHILL:

No.

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I'm talking about issuing the documents,

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Your Honor, issue an order that they have to produce the

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documents.

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THE COURT:

Right; but they don't have to produce

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the documents if there is settlement; so the short and

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sufficient answer, I think, is to say:

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to make his determination about the enforceability of this

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settlement, knowing that there is some sort of dispute about

Judge Ware is entitled

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Discovery in Massachusetts, in which you say there is a

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smoking gun, nobody's indicated there is a smoking gun, but,

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perhaps reading this in the light most favorable to you, he'll

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say:

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it, but that's for him to decide, not for me, and not for me

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to offer my reactions --

Well, until we resolve that, we can't do anything about

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MR. UNDERHILL:

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THE COURT:

Right.

-- to documents; so, if you want me to

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read them and review them?

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No.

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If you want me to have them marked, then, I'll

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think about that, marked and they're part of the record, and,

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if Judge Ware thinks that it would be a good idea for somebody

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in Massachusetts to look at these and decide whether or not

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there was a failure of some sort of Discovery?

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Well, I'm think about that.
DIANE M. MOLAS, RPR, DE CSR, and NJ CCR
USDC - MAD
OFFICIAL COURT REPORTER

UNSEALED HEARING

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control of the court, pending resolution of other matters by

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the parties, and, more particularly, by Judge Ware.

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During the course of the proceeding, I found that

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Mr. Parmet did not engage in any knowing violation of the

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provisions of the order for Discovery of computer-memory

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devices that was entered by Judge Collings on

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September 13, 2007.

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I did, however, indicate -- and I'll make
explicit -- that my view is even to have discussed the

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existence of documents that he reviewed that did not involve,

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what we call, code is a transgression of the order.

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The order, I think, is quite explicit on the issue

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of what kind of disclosure to others Mr. Parmet could make;

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more specifically, in Section 3, on Page 7, the order directs

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that Parmet and Associates may not discuss with ConnectU's

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counsel or with anyone else any information obtained from the

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Facebook hard drives, except, with respect to the produced

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program code, and, in the course of my discussions with

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Mr. Parmet, I emphasized, again, to him the view that I have,

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that that means he may not have any discussions, direct or

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indirect, with ConnectU's counsel or with anyone else --

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obviously, with the exception of The Court, direction from me

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or from Judge Ware, for example -- of any information obtained

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from the Facebook hard drives, except with respect to the

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produced program code, and I'm satisfied that Mr. Parmet is
DIANE M. MOLAS, RPR, DE CSR, and NJ CCR
USDC - MAD
OFFICIAL COURT REPORTER

UNSEALED HEARING
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fully familiar and fully prepared to comply with this

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provision.

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My own role in this, I think, is to do no more than

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simply preserve evidence which may or may not become relevant

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in the decision-making process, with respect to settlement,

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which is now ongoing before Judge Ware in California.

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This seems to me the orderly way to proceed, and my

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expectation, as I expressed to counsel, is that, if being

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aware of the universe of potential disputes between the

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parties, Judge Ware, nevertheless, chooses to enforce the

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settlement term agreement, that will be the end of the two

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cases pending before me.

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Whether there's follow-on litigation or some other

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initiatives that are undertaken is far too speculative for me

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to address at this point.

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If he finds that the settlement agreement expressed

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in the settlement term sheet is not enforceable, then, we will

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re-ignite this case -- or, these cases, I should say -- and

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continue the litigation to some other resolution, but the

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short of it is that the core of the case is, I think, and the

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core of the question of whether or not the case is continued

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is before Judge Ware, and, until he's made those

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determinations, I do nothing, other than to ensure that there

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is available such evidence as may become relevant at some

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

UNSEALED HEARING
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Is there anything further from counsel?

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MR. HORNICK:

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I do have occasion to deal with Mr. Parmet --

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THE COURT:

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MR. HORNICK:

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Just one question, Your Honor.

Mm-hmm.
-- in other cases, and, also, there

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may even be situations in this case, and I just want to go on

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the record, that there are no surprises, and I understand that

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the order is limited to anything under protocol.

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THE COURT:

It is.

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MR. HORNICK:

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THE COURT:

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Yes.

I mean, the order is as the order

states.
With respect to his exposure to any materials in

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this case through the hard drives, he is bound not to discuss

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it with you, except as it is code.

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Now, I say one other thing, based on all that I

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know, which in this and in other ways is sometimes less than I

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think I know, it seems to me that counsel have -- and

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Mr. Parmet have -- proceeded properly.

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I said so in open court, with respect to

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Mr. Hornick bringing it to my attention, and I said so in

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in camera proceedings with Mr. Parmet.

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There are sometimes these very difficult issues

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that the parties have to struggle with, and I made the

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analogy, I think in open court, but, also with Mr. Parmet,
DIANE M. MOLAS, RPR, DE CSR, and NJ CCR
USDC - MAD
OFFICIAL COURT REPORTER

C E R T I F I C A T I O N

I, DIANE M. MOLAS, a Registered Professional
Reporter (RPR), a Certified Shorthand Reporter (CSR) in the
State of Delaware, a Certified Court Reporter (CCR) in the
State of New Jersey, and a Notary Public in the Commonwealth
of Pennsylvania, do hereby certify that the foregoing is a
true and accurate transcript of the proceedings reported by
me, on June 2, 2008, and that I am neither counsel, nor kin,
to any party or participant in said action, nor am I
interested in the outcome thereof.
WITNESS my hand, this
Sixth Day of June, 2008.

________________________________________
Diane M. Molas, RPR, DE CSR, and NJ CCR
DE Certification Number 208-RPR
NJ Certification Number 30XI00228400
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(The foregoing certification of this
transcript does not apply to any reproduction of the same by
any means, unless under the DIRECT CONTROL AND/OR SUPERVISION
of the Certifying Court Reporter herself. THE COURT
REPORTER'S CERTIFICATION NEVER APPEARS AS A PHOTOCOPIED
SIGNATURE.)
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