Aguiar v. Webb et al

Filing 118

Transcript of Motion Hearing held on May 9, 2008, before Judge Wolf. Court Reporter: Richard H. Romanow at 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 8/4/2008. Redacted Transcript Deadline set for 8/14/2008. Release of Transcript Restriction set for 10/13/2008. (Scalfani, Deborah)

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Aguiar v. Webb et al Doc. 118 1 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 U N I T E D STATES DISTRICT COURT DISTRICT OF MASSACHUSETTS N o . 1:07-cv-11673-MLW WILLIAM V. AGUIAR, III, Plaintiff vs. FLOYD WEBB, et al, Defendants ********* F o r Hearing Before: C h i e f Judge Mark L. Wolf M o t i o n Session United States District Court District of Massachusetts (Boston) One Courthouse Way Boston, Massachusetts 02210 May 9, 2008 ******** R E P O R T E R : RICHARD H. ROMANOW, RPR O f f i c i a l Court Reporter U n i t e d States District Court O n e Courthouse Way, Room 5200, Boston, MA 02210 2 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 APPEARANCES IAN D. ROFFMAN, ESQ. HEATHER B. REPICKY, ESQ. N u t t e r McClennen & Fish, LLP W o r l d Trade Center West 1 5 5 Seaport Boulevard B o s t o n , Massachusetts 02210-2604 ( 6 1 7 ) 439-2421 E m a i l : F o r the plaintiff DAVID A. KLUFT, ESQ. WALEAD ESMAIL, ESQ. F o l e y Hoag, LLP 1 5 5 Seaport Boulevard S e a p o r t World Trade Center West B o s t o n , Massachusetts 02210 ( 6 1 7 ) 832-3092 E m a i l : F o r Floyd Webb 3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Ray. PROCEEDINGS ( B e g i n s , 11:30 a.m.) T H E CLERK: Civil Action 07-11673, William The Court is in session. You A g u i a r versus Floyd Webb. m a y be seated. T H E COURT: Good morning. Would counsel p l e a s e identify themselves for the record. M R . ROFFMAN: Good morning, your Honor. I'm I a n Roffman with Heather Repicky, we're from Nutter M c C l e n n e n & Fish, and we're appearing on behalf of the p l a i n t i f f , William Aguiar. We filed an appearance in t h i s case probably about 45 minutes ago or so. T H E COURT: M R . KLUFT: I have it. Your Honor, David Kluft for d e f e n d a n t , Floyd Webb, and with me is Walead Esmail. T H E COURT: All right. Mr. Roffman and Miss R e p i c k y each appeared today. M R . ROFFMAN: r i g h t over here. T H E COURT: M R . ROFFMAN: Is Mr. Aguiar present? He's Your Honor, yes, he is. And who is with him? A family friend by the name of T H E COURT: M R . ROFFMAN: M R . AGUIAR: Ray what? I can't pronounce his last name. Your Honor, Ray Karnasiewicz. 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 T H E COURT: Would you spell that. K-A-R-N-A-S-I-E-W-I-C-Z. Well, you may be seated. M R . KARNASIEWICZ: T H E COURT: Okay. O n several occasions prior to today, Mr. Roffman, a s you probably know, I ordered Mr. Aguiar to let me k n o w whether he would be represented by counsel or p r o c e e d Pro Se and I gather it's only very recently that h e obtained your services. I do think this case, or w h a t e v e r of it survives today's proceedings, would b e n e f i t from Mr. Aguiar being represented by counsel. w o n d e r if you have any familiarity, though, with the c r i m i n a l law and particularly the appropriate scope of t h e assertion of Fifth Amendment rights, because I'm g o i n g to be discussing that momentarily. M R . ROFFMAN: Your Honor, I do have some I am not a I f a m i l i a r i t y with the Fifth Amendment, yes. c r i m i n a l lawyer by training. And as you point out -- a n d it's not to bring up an aside, Ms. Repicky and I w e r e brought into this case based on a referral from a g r o u p called "Volunteer Lawyers for the Arts," which has a n interest in copyright protection, your Honor, and w e ' v e come into this case just in a matter of days. s o we're not fully up to speed on everything that's h a p p e n e d both procedurally and substantively to date. A n d one of the things I would ask your Honor -- and I And 5 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 d o n ' t mean to preempt your Honor's agenda, is that we at l e a s t be given a short period of time to come up to s p e e d and to speak with defense counsel. Perhaps we can h a v e some sort of agreement in terms of a process for g o i n g forward. T H E COURT: Well, we'll see because I've had But you can have a seat. You can have a m a n y hearings in this case. T h a t ' s not where we're going right now. seat. M R . ROFFMAN: T H E COURT: Okay. This is a civil case and I've, of c o u r s e , read the defendant's motion for a default j u d g m e n t and other sanctions. It suggests to me that t h e r e may be evidence of crimes committed by Mr. Aguiar a n d others -- "Ray" is mentioned in the communications t h a t caused me to have the question. And I feel an o b l i g a t i o n to describe the issue because it's possible t h a t things that Mr. Aguiar might say or some of his c o l l e a g u e s might say could conceivably prove to be i n f o r m a t i o n that Mr. Aguiar or they have a Fifth A m e n d m e n t right not to provide. M r . Roffman, I assume you've read the defendant's motion. It includes some statements placed on the I n t e r n e t , I believe, by somebody named John Creeden that r e f e r s to "Ray." Have you read that? 6 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 M R . ROFFMAN: T H E COURT: I've seen that, yes, your Honor. And 18 United States Code, Section 2 4 1 , a provision of the criminal code, prohibits a c o n s p i r a c y to violate a person's rights under the C o n s t i t u t i o n of the United States, and I would c o n f i d e n t l y expect including your right to access to the courts. It's a crime, a Federal crime punishable by up t o 10 years in prison and a fine of $10,000 to threaten s o m e b o d y for their participation in a lawsuit in Federal court. And some of the statements included in the -- w i t h the defendant's motion, attributed to Mr. Creeden, a n d in the defendant's submissions linked to Mr. Aguiar, t h e mentioning, I think, "The allegedly dangerous Ray," c o u l d be evidence of a violation of that statute. a l s o possible that 18 United States Code, Section 2 4 5 ( b ) ( 1 ) is implicated. A n d so I handle civil cases and I handle criminal c a s e s and this is a civil case, but if the parties' c o n d u c t in this case appears to me to violate the F e d e r a l criminal law, it's my duty, and on the rare o c c a s i o n s when it occurs, my practice to refer the m a t t e r to the United States Attorney's Office. r e a l l y feel an obligation to explain that. So I It's And some of t h e points raised by the defendant, which I intend to a d d r e s s today, at least hear argument on today, could 7 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 i m p l i c a t e Mr. Aguiar's Fifth Amendment rights. w a n t e d to let you know that. M R . ROFFMAN: T H E COURT: Thank you, your Honor. So I Then you are -- well, let me ask t h e following and not presume that I know the answer. D o e s Mr. -- and Mr. Roffman, understandably, and I'd say f o r e s e e a b l y asked for some time to talk to counsel and I d o continue to think that this case might benefit c o n s i d e r a b l y from Mr. Aguiar being represented, but does t h e defendant want me to provide a short number of days f o r counsel for both parties to confer or do you want to g o ahead now on your motion for default judgment and dismissal? M R . KLUFT: Your Honor, we do want to go ahead n o w on our motion for default judgment and dismissal. W e ' r e thrilled to have counsel involved, going forward, o n behalf of Mr. Aguiar, but we are where we are and we f e e l , because of Mr. Aguiar's choices and because of the h a r m being caused to Mr. Webb, that it's an appropriate t i m e to proceed on the motion. We will certainly confer w i t h him anyway about where we are after today's hearing. T H E COURT: Well, I'm going to at least hear y o u and, to the best of his ability, Mr. Roffman on this. It may -- I mean, I'll say the following. The 8 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 d e f e n d a n t ' s motion, while setting forth certain factual m a t t e r s and citing some rules and cases, doesn't, from m y perspective, cite the most relevant provisions of the F e d e r a l Rules of Civil Procedure, which are Rule 16(f) a n d Rules 37(b)(2), (b), (c), and (D). Rule 16(f) p r o v i d e s for sanctions that are just for violation of p r e t r i a l orders, and among those sanctions are those e n u m e r a t e d in Rule 37(b)(2), (B), (C), and (D). A l t h o u g h those are not the exclusive possible sanctions. Others might be just in the circumstances. I n addition, Rule 16(f) requires, in most c i r c u m s t a n c e s , the payment of a party who's violated p r e t r i a l orders of the reasonable attorneys fees and c o s t s , although that would be excused if there was s u b s t a n t i a l justification or if there was some other r e a s o n it wasn't just to require that, but that's a s a n c t i o n expressly provided by Rule 16(f), in addition t o or in lieu of other sanctions. So now -- A n d it might help, because Mr. Roffman and his c o l l e a g u e are new to this case, for me to recite what I t h i n k is part of the relevant chronology, but I say this a l s o so that the defendant can correct and amplify it, i f necessary. B u t Mr. Webb initially filed his counterclaims w i t h his answer on October 9, 2007. Under Rule 9 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 1 2 ( a ) ( 2 ) , Mr. Aguiar had 20 days to respond to the counterclaims. He did not make any response to the c o u n t e r c l a i m s at that time. I conducted a hearing on February 15, 2008 and I i s s u e d some oral orders that were memorialized in a l a t e r written order. I ordered Mr. Aguiar to either c a u s e counsel to appear or file a statement that he w o u l d continue Pro Se by February 29, 2008. m e e t that deadline. He didn't He did file a statement on March 4, 2 0 0 8 after repeated attempts by my docket clerk to c o n t a c t him and remind him to do so. T h e February 15, 2008 order also required the p a r t i e s to file, preferably jointly, a proposed schedule a n d statement regarding mediation by March 5, 2008. M r . Aguiar's statement that he would continue Pro Se, f i l e d on March 4, 2008, also stated that he would go to m e d i a t i o n , but it contained no information about the p r o p o s e d schedule. Although Mr. Webb stated, in his t i m e l y - f i l e d case management statement of March 5, 2008, t h a t his counsel had been unable to obtain Mr. Aguiar's c o o p e r a t i o n in preparing a statement. O n March 6, 2008, I issued a scheduling order m e m o r i a l i z i n g the schedule set at the scheduling c o n f e r e n c e the same day. Mr. Aguiar's amended complaint a n d answer to counterclaim, as I said orally, were to be 10 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 f i l e d by March 21, 2008. d o c k e t entry. This is reflected in the However, I note that the actual order t h a t ' s on the docket, which was sent to Mr. Aguiar, d o e s n ' t print correctly. The date is missing. However, i t seems clear to me, at the moment, that Mr. Aguiar k n e w the deadline. He was told at the scheduling He could And c o n f e r e n c e that the deadline was March 21. h a v e called to confirm that if he was unsure. i n d e e d , he filed an amended complaint on March 24th, the M o n d a y after the Friday on which it was due. However, h e did not file an answer to the counterclaims at all u n t i l April 7th, over two weeks late. O n March 6th, I warned him that he must abide by c o u r t orders and deadlines and that the consequences for n o t doing so could be as severe as dismissal. Up to t h i s point I think there were at least -- that is, up u n t i l the belated response to the counterclaims filed on A p r i l 7th, there were at least six times that Mr. Aguiar f a i l e d to meet the Court's deadlines or to obey rules or orders. In addition, Mr. Aguiar's response to M r . Webb's motion for sanctions came 20 days after M r . Webb filed a motion. That doesn't satisfy the r e q u i r e m e n t of Local Rule 7.1(b)(2) that such a response b e filed within 14 days. S o that's my present understanding of the context 11 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 i n which this motion arises. Now, a Pro Se defendant's p l e a d i n g s are to be liberally construed, but he has to o b e y orders, he has to comply with the substantive law. T h e First Circuit has explained that in cases like A h m e d , 118 F. 3rd 886 at 890. My present sense is that M r . Aguiar, despite given on several occasions o p p o r t u n i t i e s and warnings, failed to timely respond to t h e counterclaims. C o n s t r u i n g them liberally, he may be disputing s o m e of them, like the fair use claim. He doesn't a d d r e s s at all the trademark claims, which I believe h e ' s orally told me he wasn't maintaining anyway. But i t ' s just to let you know my present state of mind, that I ' m inclined to dismiss the trademark claims, permit r e l a t i v e l y prompt amended answers to the other c o u n t e r c l a i m s , and order Mr. Aguiar to pay the d e f e n d a n t ' s reasonable attorneys fees relating to this m o t i o n , unless he can demonstrate just cause why he s h o u l d n ' t pay some or all of them. M R . KLUFT: Thank you, your Honor. I g e n e r a l l y agree with your statement of the facts, but we h a v e a few things to add for your consideration and a f e w things to say about the relief. F i r s t of all, I want to remind the Court that when M r . Aguiar filed this complaint, initially it was about 12 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 e i g h t months ago, and right before that, he had counsel i n v o l v e d with this case, Mr. John Francure, who was the a u t h o r of the cease and desist letters to the various o n - l i n e Internet service providers, which really led up t o this case. He chose to proceed, at that time, w i t h o u t Mr. Francure. I would also like to point out that in the eight m o n t h s that followed, Mr. Webb has suffered real harm e v e n though the injunction was not granted. Not only h a s his attention and limited resources -- he's an i n d e p e n d e n t artist, have been diverted away from the e x p r e s s i o n of his First Amendment rights to the defense o f his First Amendment rights, but, in addition, he has h a d real, tangible problems, because of the pendency of t h i s case, raising money and you have affidavits before y o u that go to this point. Every time I talk to my c l i e n t , I get another -- he tells me about another p e r s o n that said, you know, "We won't deal with you if t h e case is ongoing." T o d a y , in fact, there's a fiscal sponsor in C h i c a g o , and for reasons outlined in the default motion, I ' m not going to say their name right now, and I'm happy t o tell the Court, because I just don't want them to be b o t h e r e d , but they're awaiting the outcome of this h e a r i n g to decide whether to be his fiscal sponsor so 13 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 t h e y can then apply for a State of Illinois Art Council grant. And all of this harm is in addition to the h a r a s s m e n t on-line and the other things. I n effect, even though the injunction wasn't g r a n t e d , Mr. Aguiar has achieved a lot of what he set o u t to achieve, which is to harm Mr. Aguiar's ability to -T H E COURT: M R . KLUFT: Honor. Mr. Webb's. I'm sorry. Thank you, your And to -- Mr. Webb's ability to make the film. - - as he has stated in open court, to try to control the s t o r y , which may be tangentially related to his father. I also want to point out, your Honor, with regard t o the sanctions you mentioned, that it, in part to try t o move this matter along faster in our own client's i n t e r e s t and in part in reliance on Mr. Aguiar's r e p e a t e d statements twice that he's going to proceed w i t h o u t counsel, Mr. Webb and his counsel have proceeded t o follow the Court's orders and the rules of procedure i n their filings, they have filed not only a motion, but t h e answer, case management statements, you know, local R u l e 26 automatic disclosures. We've expended a lot of t i m e and wasted a month really since the last case m a n a g e m e n t conference in addition to the motion for default. 14 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Y o u r Honor, if I were in Mr. Roffman's position, I w o u l d be making the same type of request, and I do want t o work with him from this point going forward, but we a r e where we are because of Mr. Aguiar's choices. w o u l d hope that the Court would still consider an o u t r i g h t dismissal with prejudice of the case pursuant t o our motion. And I understand there's a predilection And I f o r some kind of procedure on the merits and -T H E COURT: Well, there is a preference for d e c i s i o n s on the merits and, with regard to the c o u n t e r c l a i m s other than the trademark counterclaim, w h i c h is, I think, is not addressed at all, while M r . Aguiar evidently just took your responses and tried t o convert them, that liberally construing them, I'm i n c l i n e d to believe, you know, that he's denying, t h e r e ' s a fair use defense, and there's a third issue -a n d I do have to liberally construe them. And my i n c l i n a t i o n , if I come out this way, would be not to d i s m i s s those counterclaims, but -- and I'll give M r . Roffman a relatively brief period of time to respond t o the counterclaims, maybe amend the complaint again, a n d to come up with a schedule. B e c a u s e I've met with the parties. I'm not going I see t o sit down with Mr. Aguiar in the back again. m i s c h a r a c t e r i z a t i o n s on the Internet of what was 15 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 discussed. I didn't consider that a proceeding closed I wanted an informal session to try to t o the public. u n d e r s t a n d what this is about better and ideally m e d i a t e , which strikes me, at least absent the a s s i s t a n c e of counsel, is hopeless. One of the things M r . Aguiar needs is somebody to explain the law to him b e c a u s e my perception is that his -- some of his p o s i t i o n s are based on misunderstandings of the law. B u t this has -- you know, one of the things I have been e d u c a t e d to understand is that the mere pendency of this c a s e is injurious to Mr. Webb's interests and efforts to m a k e his film and therefore it really does need to p r o c e e d with all deliberate speed. W o u l d you like to be heard on the motion with r e g a r d to the sanctions? M R . ROFFMAN: o f two minds. Your Honor, I'm actually sort of I'm not sure I do want to be heard s p e c i f i c a l l y on their motion because we've just come i n t o the case late and I -- recently, and I would ask y o u r Honor to not rule specifically on their motion. B u t I would like to address the substance of your H o n o r ' s comments and Mr. Kluft's comments. W i t h respect to any potential injury to the d e f e n d a n t , um, that, in my mind, is -- I think "injury" i s the wrong word. Because if a filmmaker is 16 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 i n t e n t i o n a l l y infringing upon legitimate copyrights, t h e n it certainly is the appropriate functioning of the m a r k e t for people who are potentially going to finance t h a t operation to want those legal rights sorted out. T H E COURT: And, actually, I think even It's something, though, M r . Webb agrees and I agree. t h a t gives some urgency to this case going forward in an i n f o r m e d way. It shouldn't linger for a long time. If M r . Aguiar's rights are being violated, his First A m e n d m e n t rights, that should stop as soon as reasonably possible. If Mr. Aguiar's rights aren't being violated, t h e Court should issue a decision that makes that clear s o Mr. Webb's First Amendment rights are not, in effect, c h i l l e d by the -- improperly chilled by the pendency of t h e case. M R . ROFFMAN: more. Your Honor, I couldn't agree And one of the things that we would like to do is r e a l l y get to the heart of the substance and to the m e r i t s and, first of all, see if there's a way to work t h i n g s out and if not, have the right to adjudicate it. A n d I don't think this is that complex a matter that t h a t can't be done under a relatively quick time frame. W e ' v e come in, as you know, just within the last c o u p l e of days and so I'm not in a position to discuss t h e procedural problems that have happened in the case 17 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 t o date. Now, obviously, as attorneys, we all have an i n t e r e s t in preserving the Court's rules and the Court's t i m e frame. I would just ask your Honor to be -- to c o n s i d e r that Mr. Aguiar's -- and I know you have been c o n s i d e r i n g it, has been operating Pro Se and is not f a m i l i a r with the rules and -T H E COURT: Well, it doesn't really take a l a w y e r to cause somebody to understand that if he's g i v e n a deadline for answering the counterclaims, he d o e s n ' t have the right to answer them two weeks late. A n d , you know, the first time this came up, there was no answer. That's why I went through the chronology. And t h e n I issued orders and unless my docket clerk hounded M r . Aguiar, he didn't file anything. I was here, I spelled it out. And the last time I said, "If you don't m a k e the filings on time, the case might get dismissed." M R . ROFFMAN: Your Honor, I don't dispute any o f that and I'm not -- and I'm asking you to excuse d e a d l i n e s that have been missed. I do know, from having s p o k e n with Mr. Aguiar, yesterday and today, that he's b e e n really trying in good faith to keep up with this s y s t e m , which is very unfamiliar to him. And I hope now t h a t we've filed an appearance, going forward, we o b v i o u s l y will keep with all of the Court's deadlines a n d we will be able to explain to him and do ourselves 18 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 w h a t we need to do both on the procedural side of the l a w and the substantive side of the law. I n terms of the specific sanctions that your Honor i s considering, with respect to dismissing potential t r a d e m a r k claims, if your Honor wants to do that, I w o u l d ask that it be made explicit that that dismissal i s without prejudice, because he does have certain t r a d e m a r k rights and those rights -- and I've seen, from m e e t i n g with him, may potentially be being infringed by o t h e r s who are unrelated to this lawsuit as well and I w o u l d n ' t want to see those other rights, as a collateral c o n s e q u e n c e of the procedural errors in this case, be in a n y way dismissed. T H E COURT: Well, "with prejudice" would only Do you think b e with prejudice with regard to Mr. Webb. y o u may assert that Mr. Webb is violating possible t r a d e m a r k rights of Mr. Aguiar? M R . ROFFMAN: Your Honor, at this point I do n o t expect to make such a claim, however, I haven't had t h e time to do the work to figure it out. T H E COURT: M R . ROFFMAN: Okay. And then secondly, with respect t o the financial sanction of attorneys fees, um, I h a v e n ' t seen Mr. Aguiar's financial statements. My s u s p i c i o n is that there may be a financial difficulty in 19 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 c o m p l y i n g with that. T H E COURT: Well, the way the rule operates, I w o u l d provide the defendant an opportunity to make an a p p l i c a t i o n for the reasonable attorneys fees relating t o this motion, that's 16(f). respond. I'd give you a chance to Your response could have two dimensions, " T h a t ' s an unreasonable amount for this matter" or, you k n o w , "There are circumstances that make an award of e x p e n s e s unjust," and you would cite cases, if there are c a s e s , saying, "Well, the Court should consider ability t o pay," and then the defendant would reply. i n d e e d , you know, we could talk about what the a p p r o p r i a t e amount is. I have no evidence telling me And, w h e t h e r or not Mr. Aguiar has the capacity to pay. C e r t a i n l y he seems to have the time to devote to this c a s e , but I don't know what his financial circumstances are. M R . ROFFMAN: misunderstood. Your Honor, I apologize. I had I had thought you were considering But we would -- e n t e r i n g the order today. T H E COURT: I would enter the order, but the a m o u n t would have to be briefed, or you could confer on i t , maybe you can agree on some amount in the circumstances. But it would have to be briefed. And I w o u l d give you a chance to respond and the amount 20 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 w o u l d n ' t be determined today. M R . ROFFMAN: I appreciate that. We would o b v i o u s l y be willing and able to brief that matter, your Honor. A n d , I guess, lastly in terms of really sort of c u t t i n g to the chase in terms of the schedule, I would a s k your Honor, assuming that your Honor -T H E COURT: Well, I think I'm actually going t o get to that in a minute. M R . ROFFMAN: T H E COURT: Okay. But I'm going to rule on the It's hereby allowed to m o t i o n for default or sanctions. t h e following extent. O n March 6th, 2008, I orally ordered Mr. Aguiar, w h o was present, to respond to -- to file an amended c o m p l a i n t and respond to the counterclaims by March 21, 2008. This was in the context of the previous failure t o respond to the counterclaims and the other failures t o obey scheduling. Mr. Aguiar filed an amended He did not file the response c o m p l a i n t three days late. t o the counterclaims until April 7th, 2008, more than t w o weeks late. I had warned Mr. Aguiar that the f a i l u r e to meet the deadlines or to seek relief from t h e m would -- could result in sanctions as drastic as dismissal. 21 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 S o I find that Mr. Aguiar failed to obey that M a r c h 8th scheduling order, particularly -- that March 6 t h scheduling order particularly by not filing any a n s w e r to the counterclaims until April 7th, 2008 and t h e r e f o r e sanctions under Rule 16(f), which must be j u s t , are appropriate. T h e answer to the counterclaim doesn't address the t r a d e m a r k claims at all. And I don't recall whether it w a s on the record or in the lobby, but Mr. Aguiar, at l e a s t before he had counsel, told me or led me to u n d e r s t a n d that he wasn't asserting that Mr. Webb v i o l a t e d any trademark claims. So I am, as a sanction, a u t h o r i z e d , when just, by Rule 37(2)(b), hereby d i s m i s s i n g -- I'm basically granting the motion for d e c l a r a t o r y judgment on the trademark claims. I ' m doing that without prejudice. However, If there's an amended c o m p l a i n t that asserts trademark claims submitted by c o u n s e l on a schedule that we'll develop, it will have t o be accompanied by a memorandum addressing why I s h o u l d permit the trademark claims to be reintroduced to t h e case. That is, addressing why they have potential m e r i t , reminding me, although I won't forget that t h e r e ' s a preference for resolving claims on the merits, a n d why the failure, the repeated failure, including the m o s t recent failure to obey court orders, isn't an 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 a p p r o p r i a t e sanction. And you must confer with d e f e n d a n t ' s counsel to see if they're going to oppose that. Perhaps they will or perhaps they won't. W i t h regard to the other counterclaims -- although M r . Aguiar didn't do what I expected him to, which is, i n a layman's way, tell me his position, liberally c o n s t r u e d , his belated counterclaim informs that the d e f e n d a n t did meet, that he denies their right to r e l i e f , um, and so I'll treat those as contested, a l t h o u g h I am going to require a new response to the c o u n t e r c l a i m s filed by counsel. H o w e v e r , Rule 16(f) provides that when there's a -- when a party or attorney fails to obey a scheduling o r d e r , as has occurred here, a Court may make such o r d e r s as are just. It specifically provides: "In lieu o f or in addition to any other sanction, the judge shall r e q u i r e the party to pay the reasonable expenses i n c u r r e d because of any noncompliance with this rule, i n c l u d i n g attorneys fees, unless the judge finds that t h e noncompliance was substantially justified or that o t h e r circumstances make an award of expenses unjust." I n the circumstances of this case, Mr. Aguiar's failure t o timely file an answer to the counterclaim was not s u b s t a n t i a l l y justified. I'll take up the issue of w h e t h e r there's something that makes an award or a 23 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 f u l l e r award not just in the circumstances in response t o the defendant's submission for costs and attorneys fees. (Pause.) T H E COURT: Mr. Kluft, is there any problem in You would have to m a k i n g that submission in a week? f i l e by May 16th an affidavit with time records showing w h a t you would charge Mr. Webb, in these circumstances, o r maybe not charging Mr. Webb. M R . KLUFT: y o u r Honor. T H E COURT: By May 16th. And, generally Just say I have no problem making that, s p e a k i n g , you understand fee applications. " T h i s is our fee." t h i s community." w e put in. You know, "This is reasonable in You know, "This is the number of hours So we're seeking under This is reasonable. 1 6 ( f ) the following." b e f o r e you file that. expenses. And the two of you should confer I don't want you to run up more If Mr. Roffman can provide you information t h a t Mr. Aguiar really doesn't have the means to pay t h a t amount and you agree on some lesser amount, then fine. M r . Roffman, you are to respond by May 23rd. And i f any reply is required, it's to be filed by May 30th. A l l right. Mr. Roffman, do you want to file an 24 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 a m e n d e d complaint and an amended response to the counterclaim? M R . ROFFMAN: Yes, your Honor, I think the c a s e would benefit from an amended complaint and amended a n s w e r to the counterclaim. T H E COURT: that? M R . ROFFMAN: T H E COURT: 23rd. Yes, your Honor. Okay. That shall be filed by May And is two weeks sufficient for A response shall be filed by June 6th. A n d by June the 6th, you're to have conferred and c o m e up jointly, if possible, individually, if n e c e s s a r y , with a proposed schedule for the case, to p r o c e e d as quickly as possible. And we'll have a f u r t h e r conference at 3:00 on June 12th. M R . ROFFMAN: q u e s t i o n , please. Your Honor, one clarification When we file our amended complaint on M a y 23rd, would you like us, at that point then, to file o u r reply to the current counterclaim? T H E COURT: M R . ROFFMAN: t h e amended -T H E COURT: sorry. I'm sorry. The reply -- I'm Yes. Okay. So then their answer to You mean the answer to the counterclaim? M R . ROFFMAN: Yes. There's another term under 25 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 R u l e 8 and I just can't remember what it is. T H E COURT: counterclaim. M R . ROFFMAN: So, I guess, to ask that You've got to respond to the q u e s t i o n more clearly, we're going to file an amended c o m p l a i n t and, at the same time, file the answer to the c o u n t e r c l a i m that currently exists? T H E COURT: M R . ROFFMAN: Yes. Okay. And then after that we'll g e t a new answer on June 6th from the defendant on the a m e n d e d complaint that we filed? T H E COURT: M R . ROFFMAN: T H E COURT: Right. Okay. Thank you. Is there anything else from the p a r t i e s ' perspective for today? M R . ROFFMAN: you. M R . KLUFT: T H E COURT: Not from us either, your Honor. Okay. Well, Mr. Roffman, you're Not from us, your Honor. Thank f a m i l i a r somewhat with the Fifth Amendment, but you say y o u ' r e not a criminal lawyer. I think in your firm t h e r e are lawyers like Mr. Ullmann who have substantial e x p e r i e n c e with the criminal law. I don't know how t h e s e people interested in martial arts ordinarily c o m m u n i c a t e on the Internet, but if there's something 26 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 t h a t can properly be perceived as threatening harm to s o m e b o d y for litigating something in Federal court, t h r e a t s like that could result in people who participate i n making them serving up to 10 years in prison, p r o b a b l y for each threat. So it may be that among the s e r v i c e s you want to provide Mr. Aguiar is some advice o n what is protected First Amendment activity with r e g a r d to this case and what might expose him to c r i m i n a l prosecution and potential imprisonment. M R . ROFFMAN: Your Honor, thank you. I will l o o k into that with all due haste. T H E COURT: recess. ( E n d s , 12:15 p.m.) Anything else? The Court is in 27 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 CERTIFICATE I, RICHARD H. ROMANOW, OFFICIAL COURT REPORTER, d o hereby certify that the foregoing record is a true a n d accurate transcription of my stenographic notes, b e f o r e Chief Judge Mark L. Wolf, on May 9, 2008, to the b e s t of my skill and ability. /s/ Richard H. Romanow __________________________ RICHARD H. ROMANOW

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