LeMond Cycling, Inc. v. Trek Bicycle Corporation

Filing 133

LeMond Cycling, Inc. v. Trek Bicycle Corporation

Doc. 133

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U N I T E D STATES DISTRICT COURT D I S T R I C T OF MINNESOTA -------------------------------------------------L e M o n d Cycling, Inc., Plaintiff, File No. 08-CV-1010

T r e k Bicycle Corporation, Defendant. --------------------------------------------------

T H E HONORABLE JANIE S. MAYERON U n i t e d States Magistrate Judge

*** T A P E - R E C O R D E D HEARING T R A N S C R I P T OF PROCEEDINGS ***

Date:

5-26-09 Lisa M. Thorsgaard

Reporter:

1-877-681-8550 toll free ( 6 5 1 ) 681-8550 phone www.johnsonreporting.com
Dockets.Justia.com

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APPEARANCES

M S . DENISE S. RAHNE AND MS. KATHERINE K . BRUCE, Attorneys at Law, 800 LaSalle Avenue, S u i t e 2800, Minneapolis, Minnesota 55402-2015, a p p e a r e d on behalf of Plaintiff.

M R . ERIK T. SALVESON, Attorney at Law, S u i t e 600, 220 South Sixth Street, Minneapolis, M i n n e s o t a 55402, appeared on behalf of Defendant.

M R . RALPH A. WEBER, Attorney at Law, S u i t e 700, 309 North Water Street, Milwaukee, W i s c o n s i n 53202, appeared on behalf of Defendant.

1-877-681-8550 toll free ( 6 5 1 ) 681-8550 phone www.johnsonreporting.com

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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 Honor. Ciresi. everyone.

PROCEEDINGS

( N O REPORTER WAS PRESENT - the following t r a n s c r i p t of proceedings was prepared from a C O P Y of the original court tape recording)

T H E COURT:

Good morning,

I'm Magistrate Judge Mayeron and

w e ' r e here this morning in connection with the m a t t e r of LeMond Cycling, Inc. versus Trek B i c y c l e Corporation versus Greg LeMond. i s Court File No. 08-010. I f the attorneys could identify t h e m s e l v e s starting first with Plaintiff, L e M o n d Cycling. M S . RAHNE: Good morning, Your This

Denise Rahne, Robins, Kaplan, Miller & And I have with me from our offices,

K a t i e Bruce. T H E COURT: s p e l l your last name? M S . BRUCE: T H E COURT: B-R-U-C-E. All right. And on Kate, how do you

b e h a l f of -- and you're representing both L e M o n d Cycling and Greg LeMond? 1-877-681-8550 toll free ( 6 5 1 ) 681-8550 phone www.johnsonreporting.com

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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 Honor. t h e defendant? Honor.

M S . RAHNE:

Correct, Your

T H E COURT:

And on behalf of

M R . WEBER:

Good morning, Your

Ralph Weber and Eric Salveson for Trek

B i c y c l e Corporation. T H E COURT: All right. We're

h e r e this morning to entertain the motion by T r e k Bicycle Corporation for a protective order. I have reviewed the initial pleadings, t h e response filed by LeMond Cycling and Greg L e M o n d and the reply as well, so I'm prepared t o hear argument. W h o will be arguing? M R . WEBER: T H E COURT: M R . WEBER: I will, Judge. All right. Judge, in

r e c o g n i t i o n of the fact you've already read t h e briefs, let me just summarize very q u i c k l y , tell you what I think is the e s s e n t i a l legal foundation for our position a n d I'll be happy to answer any questions you m i g h t have. 1-877-681-8550 toll free ( 6 5 1 ) 681-8550 phone www.johnsonreporting.com

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O n March 20, 2008 Trek was served with a complaint by Mr. LeMond that had very little t o do with the parties' relationship and was f i l l e d instead with sensationalized a l l e g a t i o n s about third parties and relatively f e w allegations about the purported best e f f o r t s challenge that Mr. LeMond wanted to bring. A t that time it was served under the M i n n e s o t a procedure that provides for service w i t h o u t filing that was pointed out in the c o v e r letter to Trek that the complaint was n o t publicly available at that time, but at t h e same time under Minnesota procedure and f e d e r a l procedure the clock was running on removal. T r e k and its counsel, of course, a n t i c i p a t e d that the damage that was t h r e a t e n e d to Trek's reputation through this s e n s a t i o n a l i z e d complaint and sought to m i t i g a t e the damage that was threatened by r e t u r n i n g the proper focus of the dispute to t h e parties' business relationship, what did e a c h side contend the other had done or failed t o do with respect to performing or not 1-877-681-8550 toll free ( 6 5 1 ) 681-8550 phone www.johnsonreporting.com

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p e r f o r m i n g under the contract, an objective a s s e s s m e n t of the parties' relationship quite d i f f e r e n t from the threatened and served but n o t filed lawsuit. I n that context there was a tremendous o v e r l a p of litigation and public impact potential. And in light of that, our firm

r e t a i n e d sophisticated consultants to assist u s in anticipating and mitigating the damage t h a t would be done to Trek's image and business. That estimate our concerns have

t u r n e d out to have been corroborated by the d i s c o v e r y that has been done to date in two s i g n i f i c a n t respects. F i r s t , we deposed Mr. LeMond's former b u s i n e s s agent who confirmed that, yes, that G r e g had spoken to him about secret tape r e c o r d i n g s of Trek's CEO and the use that he w o u l d make of those secret tape recordings to l e v e r a g e Trek should Trek ever wish to t e r m i n a t e the business relationship. Spoke

e x p r e s s l y to his agent about that strategy. S e c o n d l y , in the course of written d i s c o v e r y we have now received an e-mail b e t w e e n Mr. LeMond and a reporter for Sports 1-877-681-8550 toll free ( 6 5 1 ) 681-8550 phone www.johnsonreporting.com

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I l l u s t r a t e d in which Mr. LeMond referred to t h o s e same secret recordings of the Trek CEO a s his trump card in a sick game of blackmail a n d extortion. A g a i n s t that unfortunate background it, o f course, was necessary for us as Trek's l e g a l counsel to retain the services of s o p h i s t i c a t e d media consultants. And I think

t h e context is well described and the legal j u s t i f i c a t i o n is well described in Judge K a p l a n ' s case out of the Southern District of N e w York in 2003. The In Re: Grand Jury

S u b p o e n a case in which confidential c o m m u n i c a t i o n s between lawyers and public r e l a t i o n s consultants were protected by the a t t o r n e y - c l i e n t privilege and work product doctrines. And at page 330-331 of Judge

K a p l a n ' s decision he explains the practical r e a l i t i e s of modern day litigation. J u d g e Kaplan also pointed out that the t h i n k i n g of the courts in this area has e v o l v e d over time. And some of the early

d e c i s i o n s from the '70s and '80s which were l e s s friendly to the position that Trek is b r i n g i n g before the Court today have been 1-877-681-8550 toll free ( 6 5 1 ) 681-8550 phone www.johnsonreporting.com

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s u p e r c e d e d by more recent thinking including a d e c i s i o n for four members of the court by J u s t i c e Kennedy. That's discussed in, again,

J u d g e Kaplan's decision. T H E COURT: One of the things

I noted in not only Judge Kaplan's decision in t h e In Re: Grand Jury but the other cases that w e r e cited by both sides is that as the court w e n t through the analysis to determine whether t h e attorney-client privilege or work product d o c t r i n e applied which was, my memory being a s s e r t e d , in tandem with each other. M R . WEBER: T H E COURT: Right. Is, number one,

t h e court had before it a privilege log that l i s t e d the documents that were being withheld; a n d number two, from what I can tell also was c o n d u c t i n g an in-camera inspection of those documents. A n d what has become clear to me p a r t i c u l a r l y now having reviewed your reply is t h a t , in fact, none of the documents are l i s t e d on the privilege log unless they happen t o be redacted documents that were produced f o r other reasons to Mr. -- to plaintiff. And

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o b v i o u s l y I don't have the documents in front o f me to do an in-camera inspection. S o in terms of the procedure that the c o u r t s engaged in to evaluate the a p p r o p r i a t e n e s s of the assertion of work p r o d u c t or attorney client, apart from your o b j e c t i o n about relevancy seems to me I'm l a c k i n g some of the pieces that I may need in o r d e r to evaluate whether these privileges or d o c t r i n e s have been properly invoked. M R . WEBER: Right. I

a n t i c i p a t e d the Court might raise that because I saw the same thing in the decisions. T h e procedural context in which this i s s u e came up and thus the reason for our p r o t e c t i v e order motion were questions that w e r e asked of Trek CEO, John Burke, at his d e p o s i t i o n which questions were objected to a n d , thus, we came before the court in that f a i r l y narrow procedural context of could M r . Burke or should Mr. Burke answer questions a b o u t meetings that were had in the days after M a r c h 20 and before April 8 in which these o u t s i d e consultants were present along with T r e k ' s lawyers. So that's the narrow position

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i n which the issue was raised. W i t h respect to the broader question of o t h e r documents that exist and so on, the i n i t i a l privilege log that was produced last y e a r or earlier this year, I forget, made a n o t e that it was stopping as of March 20, the d a t e of Mr. LeMond's service of the complaint. A n d that was expressly made in the privilege log. T h e particular documents -T H E COURT: So it was your

p o s i t i o n that to the extent any documents were g e n e r a t e d that would qualify for a t t o r n e y - c l i e n t or work product after the i n i t i a t i o n of the state court suit, March 20, w h e n your client -- of 2008, when your client w a s served, you weren't listing any of those documents. M R . WEBER: Right. Because

t h e r e was no genuine question I believed as to t h a t they were prepared in anticipation of l i t i g a t i o n and a contrary approach would call f o r the creation of nonstop privilege logs o v e r the course of the litigation. And it has

b e e n my experience that the parties agree that 1-877-681-8550 toll free ( 6 5 1 ) 681-8550 phone www.johnsonreporting.com

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o n c e litigation starts, then there is not a g e n u i n e issue about privilege logs thereafter. T H E COURT: So as a practical

m a t t e r , given the time line which is that the p u b l i c relation firm wasn't retained until A p r i l 3 of 2008, after the commencement -a f t e r the service of the state suit, your p o s i t i o n -- so that's why -- that's your e x p l a n a t i o n as to why they -M R . WEBER: T H E COURT: Right. -- don't show up

o n any documentation reflecting communications b e t w e e n client or attorney and that PR firm a r e not on the privilege log except to the e x t e n t that they got produced in a redacted form. M R . WEBER: Correct. And we

w e r e careful to make that explicit point in t h e privilege log. T H E COURT: How many -- if

i n d e e d I were to determine that the c o m m u n i c a t i o n s with the PR firm, let's say f r o m April 3, from retention until c o m m e n c e m e n t of the lawsuit in federal court i n Wisconsin I guess that would be which would 1-877-681-8550 toll free ( 6 5 1 ) 681-8550 phone www.johnsonreporting.com

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b e the -- I don't know if it's state or -M R . WEBER: T H E COURT: M R . WEBER: T H E COURT: April 8. April 8. Right. How many -- if,

i n d e e d you were going to have to identify t h o s e on a privilege log and/or produce them t o me for an in-camera inspection, how many d o c u m e n t s or pages are we talking about? M R . WEBER: You know, I There was a

h a v e n ' t collected them, Judge.

d o c u m e n t request that was due last Thursday a s k i n g for those things. T H E COURT: M R . WEBER: Right. But in light of

t o d a y ' s hearing, we indicated that we would a b i d e the Court's -- that we would raise the o b j e c t i o n and we would see what the Court w o u l d do. I would estimate it would be several dozen. You know, a reasonable number.

C e r t a i n l y not hundreds of documents. T H E COURT: M R . WEBER: d o n e that. All right. But I have not

I have not asked the client to

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g i v e me their set. T H E COURT: M R . WEBER: Okay. So that is the

p r o c e d u r a l -- and I appreciate where the Court i s coming from but that is -- so we were -t h i s was prompted by the fairly narrow q u e s t i o n at the CEO step as to essentially w h a t did you talk about at those meetings with t h e public strategies people present. o b j e c t e d and hence we are here today. T H E COURT: M R . WEBER: Okay. If the Court, of I

c o u r s e , wants a privilege log and in-camera r e v i e w , we, of course, will provide that. T H E COURT: I'm just trying to

r e c a l l -- let me make sure I understand. T h e relief you are seeking with your p r o t e c t i v e order it appears, number one, y o u ' r e -- so with your motion it appears that y o u are seeking not only a protective order f r o m having to produce any documents r e s p o n s i v e to the document request but then a p r o t e c t i v e order basically blessing, for lack o f a better word, your instruction to your c l i e n t that he not share any of the 1-877-681-8550 toll free ( 6 5 1 ) 681-8550 phone www.johnsonreporting.com

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c o m m u n i c a t i o n s with the PR firm -M R . WEBER: T H E COURT: Correct. -- that were

o b j e c t e d to at the deposition. M R . WEBER: T H E COURT: M R . WEBER: T H E COURT: c o n f i n e d just to documents. depositions. M R . WEBER: That's correct. Correct. Okay. And there is a -So it's not It's also about

A n d there is another deposition that was n o t i c e d by plaintiff's counsel of a public s t r a t e g i e s employee, a gentleman by the name o f Bill Mashek and that was scheduled for -- I f o r g e t the date but recently. B u t counsel agreed that that likewise w o u l d be put off because counsel said if I was g o i n g to instruct Mr. Mashek at the deposition n o t to talk about conversations of the kind t h a t Mr. Burke was instructed not to talk a b o u t , that didn't make sense to go out to D . C . and depose him until we had the chance to t a l k to the Court. T H E COURT: Okay.

1-877-681-8550 toll free ( 6 5 1 ) 681-8550 phone www.johnsonreporting.com

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M R . WEBER:

And so there is

t h a t Mashek deposition which would be of the s a m e type. So Mashek, Burke, and the most

r e c e n t set of document requests. T H E COURT: And is it your --

a g a i n , now I'm doing this from memory but with r e s p e c t to Mr. Burke's deposition, is it your p o s i t i o n or understanding that to the extent t h a t Trek itself or employees were involved in c o n v e r s a t i o n s with the PR firm that counsel -w a s counsel present for all of those c o m m u n i c a t i o n s either in person, by phone, or e-mail? M R . WEBER: Mr. Burke

t e s t i f i e d that his general counsel, Bob B u r k e -- Bob Burns, sorry -- was present at a l l those meetings. T H E COURT: Okay. That's what

M R . WEBER:

It is my

r e c o l l e c t i o n that I also was present at all t h e meetings with Trek employees and public s t r a t e g i e s employees or someone from my firm. T H E COURT: M R . WEBER: Okay. And I think as the

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C o u r t saw, the retention was done through our f i r m and so on. T H E COURT: M R . WEBER: Okay. We anticipated

t h a t this might become an issue going down the road. T H E COURT: Go ahead. I

o b v i o u s l y interrupted you with some questions a b o u t the procedural posture that were in here. M R . WEBER: Right. Well, I

w a s just going to draw the Court's attention, a s you probably have already seen, page 330 a n d 331 of Judge Kaplan's decision where he t a l k s about nor such -- may such advocacy be p r u d e n t l y be conducted in disregard of its p o t e n t i a l legal ramifications. Questions such

a s whether the client should speak to the m e d i a at all, whether to do so directly or t h r o u g h representatives, whether and to what e x t e n t to comment on specific allegations and a host of others can be decided without c a r e f u l legal input only at the client's e x t r e m e peril. f o o t n o t e 42. 1-877-681-8550 toll free ( 6 5 1 ) 681-8550 phone www.johnsonreporting.com That's the text accompanying

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H e goes on to say, Dealing with the m e d i a in a high profile case probably is not a m a t t e r for amateurs. Target and her lawyers

c a n n o t be faulted for concluding the p r o f e s s i o n a l public relations advice was needed. A n d then Judge Kaplan goes on to list a s e r i e s of factors about why it was prudent for l a w y e r s to get the PR people involved and how t h e work -- attorney-client work product p r o t e c t i o n s covered those kinds of communications. Likewise in this case where

g i v e n the -- and I think you may recall that w e -- well, we discussed last time we were h e r e the prior lead up to the 2008 litigation w h i c h was the service of a very similar l a w s u i t by Mr. LeMond in 2004 when Trek had g i v e n him a notice of breach and his threat to g o public with sensationalized allegations a b o u t high profile athletes then and how Trek a t that time had concluded that they would, in l i g h t of the threat, withdraw the notice of b r e a c h and continue to do business with LeMond. S o it had this backdrop together with 1-877-681-8550 toll free ( 6 5 1 ) 681-8550 phone www.johnsonreporting.com

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n o w , in March of '08, receiving the latest v e r s i o n in which it was quite apparent, if you l o o k at his complaint, what his strategy is. I f Trek had not properly responded to t h a t public filing, anticipated public filing, s e r v i c e of complaint, we would be hearing a r g u m e n t s from LeMond that Trek had not p r o p e r l y mitigated its damages. And indeed in

h i s answer to Trek's complaint, LeMond raised t h e affirmative defense of Trek's failure to mitigate. S o you have a -T H E COURT: So doesn't that at

l e a s t given it bears on the issue of m i t i g a t i o n , doesn't that -- to the extent that y o u have raised the issue of relevancy, it s e e m s to me that, at a minimum, while you may n o t agree that it is relevant to the s u b s t a n t i v e claims being made by Mr. LeMond, m e a n i n g the breach of the covenant of good f a i t h and fair dealing and that Trek did not e n g a g e in its best efforts to promote M r . LeMond, his company and the brand, seems t o me what you are saying is this is -- you s o u g h t out this PR firm to address the issue 1-877-681-8550 toll free ( 6 5 1 ) 681-8550 phone www.johnsonreporting.com

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o f mitigation of damages.

It is pled.

It

s e e m s to me what you are saying is yes, if n o t h i n g else, it's relevant to damages which i s one of the arguments defendant has made. M R . WEBER: Right. As to the

p u b l i c statements I would agree that what Trek s a i d to the public -- and if you look at t h e -- if you read through the attachment w h i c h has the Power Point presentation or if y o u would have watched the 16-minute p r e s e n t a t i o n that Mr. Burke gave to the e m p l o y e e s , you will see it is carefully s t r u c t u r e d to talk about the parties' business relationship. A n d as to those public statements, yes, I would agree that those would be relevant to t h e question of Trek's efforts to mitigate a g a i n s t what Mr. LeMond was threatening. B u t as to communications among counsel a n d counsel's consultants that lay behind t h o s e public statements, I don't believe that t h o s e are relevant to the mitigation. T H E COURT: M R . WEBER: Okay. And even if they

w e r e , they would be sheltered. 1-877-681-8550 toll free ( 6 5 1 ) 681-8550 phone www.johnsonreporting.com

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T H E COURT:

I'm sorry, they

M R . WEBER:

And even if they

w e r e , they would be sheltered. T H E COURT: M R . WEBER: Okay. By the privilege

T H E COURT: M R . WEBER:

Okay. So while it isn't

a bright line, obviously, in the case law to a p p l y to this and admittedly it is an evolving d o c t r i n e as acknowledged by the courts in this a r e a , I think given the facts of this case w i t h what Trek was faced with on March 20, 2 0 0 8 and its lawyers' decision to retain c o n s u l t a n t s to assist them in a lawsuit which M r . LeMond had already defined as an overlap o f litigation and public impact, that the i n t e r n a l discussions among -- involving Trek, i t s lawyers, and its lawyers' consultants s h o u l d be protected from disclosure. T H E COURT: And are you

s t i l l -- obviously your opening brief rests o n -- spends quite a bit of time talking about t h e attorney-client privilege. 1-877-681-8550 toll free ( 6 5 1 ) 681-8550 phone www.johnsonreporting.com

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M R . WEBER: T H E COURT:

Yes. Your reply focuses

M R . WEBER: T H E COURT:

Right. And I don't want

t o read more into it than you intend but it s e e m s to me that you have, having seen the r e s p o n s e by LeMond, shifted gears from -- or s h i f t e d focus from asserting the a t t o r n e y - c l i e n t privilege to work product. M R . WEBER: We think it is

And the case law I think, one,

h i g h l i g h t s attorney-client privilege, another w o r k product so we didn't want to give short s h i f t to either. So we have -- we believe it

i s protected by both in that the very meetings M r . Burke was asked about, ones involving h i m s e l f , his lawyers, other key Trek employees a n d these consultants, those kinds of c o m m u n i c a t i o n s would be covered by a t t o r n e y - c l i e n t privilege. T h e r e are different issues discussed in t h e cases where materials are being sent to c o n s u l t a n t s with or without the involvement of l a w y e r s in which the attorney-client privilege 1-877-681-8550 toll free ( 6 5 1 ) 681-8550 phone www.johnsonreporting.com

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w a s found not to apply but attorney work p r o d u c t did. S o as to these communications which b r i n g us here today, these meetings, yes, I b e l i e v e both attorney-client privilege and w o r k product protect them. T H E COURT: And as to then the

c o m m u n i c a t i o n s , the documents that they're s e e k i n g by way of their discovery, is it your p o s i t i o n that they're both covered by a t t o r n e y - c l i e n t and work product or is it work product? M R . WEBER: I would have to go

d o c u m e n t by document to see if there are d o c u m e n t s that by virtue to whom they were s e n t and whether or not lawyers were involved m i g h t be outside attorney-client privilege. B u t work product, since they were all prepared i n anticipation of litigation, would apply to t h e m all. T H E COURT: Okay. Let me see

i f I have any other questions. I guess the last question I have is one o f the arguments I think that the plaintiff is m a k i n g is that part of his lawsuit is that 1-877-681-8550 toll free ( 6 5 1 ) 681-8550 phone www.johnsonreporting.com

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T r e k wasn't engaged -- breached the covenant o f good faith and fair dealing and wasn't e n g a g e d in its best efforts to promote p l a i n t i f f and its branding company. M R . WEBER: T H E COURT: Right. And that at least

e v e n t s leading up to the formal termination of t h e relationship which, as I understand, t h e y ' r e saying basically notice of termination i s the lawsuit of April 8 of 2008, that at l e a s t up until that time the company wasn't e n g a g e d in its best efforts to promote it, to p r o m o t e the plaintiff. W h y wouldn't be it relevant to that c l a i m getting at -- apart from the issues of p r i v i l e g e but in terms of relevancy -M R . WEBER: T H E COURT: Right. -- why isn't

d i s c u s s i o n s with the PR firm relevant to that c l a i m of whether Trek was using its best e f f o r t s to promote the LeMond product at least u p until the date of formal notice of the termination? M R . WEBER: Right. Because

T r e k will tell you and as is laid out in the 1-877-681-8550 toll free ( 6 5 1 ) 681-8550 phone www.johnsonreporting.com

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P o w e r Point presentation and in the videotaped p r e s e n t a t i o n to employees, that when it r e c e i v e d the lawsuit on March 20, which was t h r e e days after the memorial service for M r . Burke's father, the founder of the c o m p a n y , that when on the heels of that it had r e c e i v e d this latest salvo from Mr. LeMond, a n d this was in the context of the prior fall w h e n Mr. LeMond and Mr. Burke, John Burke, the s o n had met privately and Mr. LeMond had asked w h a t are Trek's plans over the next few years, a r e you going to renew me after 2010, and he w a s told no, we will -- Trek will continue the c o n t r a c t under its current term which is 2010. B u t after 2010 Trek is not going to exercise i t s option to renew for another five years at w h i c h time Mr. LeMond asked, well, could I go o u t and seek other business partners and p e r h a p s end the deal early if I can transition t o someone else, to which Trek said of course a n d we will provide you some confidential i n f o r m a t i o n to assist you in doing that and if w e want to wrap this up early before 2010, j u s t let us know. I n the meantime, Trek continued 1-877-681-8550 toll free ( 6 5 1 ) 681-8550 phone www.johnsonreporting.com

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d e v e l o p i n g its products and marketing LeMond b i k e s and doing everything in anticipation of c o n t i n u i n g the contract through 2010. H o w e v e r , when on March 20 Mr. LeMond did what h e did, the show was over. The contract from

T r e k ' s viewpoint was repudiated and terminated a s is laid out in Trek's lawsuit. S o there -T H E COURT: M R . WEBER: So your view -So there is no

c o n t i n u i n g relationship after March 20. T H E COURT: M R . WEBER: Okay. And Trek will not

b e contending at trial that, well, between M a r c h 20 and April, some day in April, we s t i l l viewed this as an ongoing relationship a n d we were still out there exercising our b e s t efforts, rather Trek very soon after M a r c h 20 went against the backdrop of e v e r y t h i n g that was happening, Mr. LeMond did w h a t he did, trek had had enough and was n o t -- was no longer going to tolerate the s o r t -- being treated the way it was being treated. T H E COURT: Okay. All right.

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T h a n k you very much. M R . WEBER: T H E COURT: M r . LeMond's counsel. M S . RAHNE: Honor. T H E COURT: Good morning. Good morning, Your Thank you. I will hear from

M S . RAHNE:

I want to touch on

j u s t a few things and then on a couple of i t e m s -- your questions on relevance, I think, h a v e articulated our position better than I c o u l d myself so I'm going to spend a brief a m o u n t of time there. A n d then what I'd like to do is just p r o v i d e a little bit of an explanation of how w e think the case law applies to the questions. We're sort of flying blind. We've

b e e n shooting moving targets a little bit b e c a u s e we're not sure what's out there. W h a t we basically have is the end r e s u l t of a Power Point presentation that o r i g i n a l l y we thought was created in house f r o m Trek based on the fact that the press r e l e a s e that predated it was on a Trek media 1-877-681-8550 toll free ( 6 5 1 ) 681-8550 phone www.johnsonreporting.com

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release. materials.

And I think it's included in the

I t wasn't until the deposition of John B u r k e that we discovered that the individual w h o was listed was actually a consultant for a p u b l i c -- for Public Strategies, Inc., which i s why we started that line of inquiry. We

h a d hoped and planned on simply getting the i n f o r m a t i o n related to the creation of this P o w e r Point from Trek. o f a backdrop on that. I want to point out just a few items c o n t e x t u a l l y before I go into my main points s t a r t i n g with the meeting with John Burke, b e t w e e n John Burke and Greg LeMond discussed b y Trek's counsel. J u s t a couple of corrections. We don't So just a little bit

a g r e e necessarily with the explanation for how t h a t meeting went and the outcome from it in t e r m s of the date and how that matters r e g a r d i n g termination. p o s i t i o n that -T H E COURT: a b o u t the November meeting? M S . RAHNE: Correct. Are we talking It's very much our

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T H E COURT: M S . RAHNE:

Okay. It's very much our

p o s i t i o n that that meeting certainly did occur. There were discussions about where the There was

p a r t i e s ' relationship was going. s o m e information exchanged.

It actually was

t h e result of receiving that information that s o l i d i f i e d the concerns regarding what Trek w a s doing in the present with Mr. LeMond's b r a n d and which prompted, necessitated in our v i e w the filing of the complaint in the c o n t e x t of the parties' -- terminating the p a r t i e s ' relationship fairly. I t ' s very much our opinion that we were i n t e n d i n g and pled in our complaint that Trek w a s to continue to promote its best efforts a n d that it was to continue contractual o b l i g a t i o n s to exercise and meet its covenant o f good faith and fair dealing. I t ' s further our position that what was d o n e to, and this leads to my relevance d i s c u s s i o n , what was done on April 8, 2008 is c o n t r a r y to best efforts. It's the contrary

o f a covenant of good faith and fair dealing. T H E COURT: In other words,

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w h a t I understand happened on April 8 is, n u m b e r one, the suit is begun but with the s u i t is the notice, formal -- basically is the n o t i c e of termination. M S . RAHNE: Correct. And we

a c t u a l l y -- it's our opinion, Your Honor, that w h a t Trek sought at that time, sought from a j u d i c i a l officer was the right to terminate b a s e d on a breach. I n all honesty, Mr. LeMond, at the g u i d a n c e of his counsel, acted and behaved as i f he was still under contract until there was a judicial determination of whether there was a justifiable breach to if you have termination. S o we're willing to concede that as of M a r c h 20, Trek's -- you know, we know now -d e c i d e d to treat the contract as terminated. B u t it was very much our intention with our o r i g i n a l lawsuit that we were asking for Trek t o continue its best efforts until September o f 2010. T H E COURT: M S . RAHNE: Go ahead. On relevance I And again,

j u s t want to reiterate the point.

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I think your questions hit on what our belief i s in terms of why this is relevant. O n the creation of this Power Point, t h e decisions about what went in, what went o u t , what to say about the LeMond brand, what n o t to say about the LeMond brand very much we t h i n k speak to Trek's good faith or bad faith, i n our opinion, effort to treat the LeMond b r a n d fairly. relevance. So that's our point on

We think -T H E COURT: So when you're

s a y i n g -- given that as of March 20 when Trek i s served with your client's suit. M S . RAHNE: T H E COURT: Right. And as you've

h e a r d , Trek has said at that point they said g a m e is over, you know, from their perspective a n d they weren't going to be engaging in any e f f o r t s to continue to promote or comply with t h e terms of the contract is the way I u n d e r s t a n d it. So what they're saying is,

l o o k , our best efforts, if we had an o b l i g a t i o n of good faith and fair dealing or e n g a g e in best efforts, when that suit came on M a r c h 20, that's over and done. So anything

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t h a t we're doing after that point in time r e a l l y doesn't go to the substance of the l a w s u i t liability. What goes to the substance

o f the lawsuit is what took place before M a r c h 20. S o why -- and you've said the same t h i n g , you now -M S . RAHNE: u s e -T H E COURT: M a r c h 20. -- understand it's Yeah. I think I

So why is anything after March 20 I understand

i n terms of liability relevant?

o n damages that's a different discussion we're g o i n g to have but on liability. M S . RAHNE: m i s s t a t e d , Your Honor. m e a n t to say April 8. And I think I

What I meant was I I understand now that

T r e k -- we can recognize that as of April 8, w h e n Trek filed its lawsuit, we -- our u n d e r s t a n d i n g was that they were seeking the r i g h t to terminate based on a breach that had n o t been proven in our opinion. S o in hindsight, we look back and we c a n recognize that as a date at which to cut o f f any liability. March 20, no, I misspoke.

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I meant to say April 8. W e very much -- our filing was -- we r e q u e s t e d the relief that they continue to p e r f o r m through September of 2010. And so

s h o r t of any judicial determination that a t e r m i n a t i o n was appropriate, we believe they w e r e under obligation to continue their best efforts. T h i s Power Point presentation happened d u r i n g that time. In our opinion it very much

s p e a k s to Trek's lack of best efforts, lack of m e e t i n g their covenant of good faith and fair d e a l i n g in its treatment of the brand. T H E COURT: And then that goes

t o the second piece which is Mr. Weber saying t h a t , yes, the public statement may be r e l e v a n t to maybe your theory or his theory on m i t i g a t i o n of damages but the underlying c o m m u n i c a t i o n s that led to that Power Point p r e s e n t a t i o n , that that -- that they are not relevant. It's what was ultimately

c o m m u n i c a t e d to the public that constitutes w h e t h e r there was good faith and fair dealing, b e s t efforts or mitigation of damages but that t h e underlying communications leading to that 1-877-681-8550 toll free ( 6 5 1 ) 681-8550 phone www.johnsonreporting.com

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i n terms of what the public didn't see really h a v e no bearing on it. S o what's the relevance of getting -g o i n g behind the door? M S . RAHNE: I think it's very

m u c h relevant in terms of -- when we tried to p r o b e this with a Trek employee in a d e p o s i t i o n , what are the underlying facts that y o u use to create this, who had the facts, who m a d e the determinations in terms of what went i n and what went out, did Trek have contrary p o s i t i v e information that they could have used t o present a more balanced view, it's our o p i n i o n there was a very biased, one-sided t e l l i n g of the relationship that has two sides t o the story, as most do, and their d e t e r m i n a t i o n s as to what to share with the p u b l i c and what to select. I mean, there's a very inflammatory e - m a i l that was selected to be put in there c a l l i n g Greg LeMond a commercial idiot. T h a t ' s a horrible statement to put out there f o r somebody whose brand you're supposed to be s u p p o r t i n g or somebody whose name you're s u p p o s e d to be supporting. I think that the

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d e t e r m i n a t i o n of selecting that e-mail versus s o m e t h i n g else very much bears on their p e r f o r m a n c e of their support of the brand or l a c k of in my opinion. T H E COURT: And the Power

P o i n t presentation was given when in r e l a t i o n -- was it also publicized on April 8 o r when was it -M S . RAHNE: It was released on

T r e k ' s web site the same morning that the p r e s s conference was held. And then later

t h a t day was the -- I don't know if the Power P o i n t but I know the Power Point with John B u r k e speaking was also posted on YouTube. T H E COURT: And when -- was

t h i s all the same day that the suit was filed? M S . RAHNE: Honor. T H E COURT: M S . RAHNE: Okay. All right. Correct, Your

I want to just

s p e a k briefly to the mitigation point and then t a l k very briefly about how I think the c o n t o u r s of this law apply or don't apply to T r e k ' s claims. I ' m puzzled by the mitigation argument 1-877-681-8550 toll free ( 6 5 1 ) 681-8550 phone www.johnsonreporting.com

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r i g h t now.

Trek stood in this courtroom on

J a n u a r y 15 and claimed that they would not be q u a n t i f y i n g any damages to Trek, that the only p l a c e they were quantifying damages was as to L e M o n d bikes. S o I fail to see, though I appreciate t h e fact that it ties into relevance again, I f a i l to see how this could be an effort to m i t i g a t e anything except potentially their p u b l i c relations which will lead into my d i s c u s s i o n about work product and privilege. I f Trek is not going to quantify d a m a g e s as to Trek bikes, I'm not sure what t h e y ' r e mitigating by this. If Trek is only

q u a n t i f y i n g damages as to LeMond bikes, which i s what they've said in this courtroom, this d i d n ' t mitigate. It caused more harm. T H E COURT: M S . RAHNE: a n d privilege. T H E COURT: w o r k product piece of it. M S . RAHNE: T H E COURT: Absolutely. What I understand, Let's focus on the Go ahead. As to work product

t i m e line is, again, March 20, 2008 your 1-877-681-8550 toll free ( 6 5 1 ) 681-8550 phone www.johnsonreporting.com

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c l i e n t commenced its lawsuit. M S . RAHNE: T H E COURT: Correct. This law firm The

h i r e s this PR firm on April 3.

r e p r e s e n t a t i o n is they had no prior relationship. Meaning Trek had no prior In other

r e l a t i o n s h i p with this PR firm.

w o r d s , they were hired by the law firm to, f r o m the affidavits, to address the litigation a n d the fallout and impact on relationship and c u s t o m e r -- and reputation with the customers. I t ' s more -- it's certainly in anticipation of t h e i r own litigation but your client's l i t i g a t i o n has already begun. The lawyers

a r e , according to Mr. Weber, in the room or p r i v y to all of the face-to-face or let's say t e l e p h o n i c communications. Don't know yet

a b o u t e-mail and other documents. W h y isn't this work product? M S . RAHNE: Your Honor, in

e x a m i n a t i o n of these cases, I think it's clear t h a t there can be times when a consulting firm c o u l d contribute to work product. I think the

r e a l l y important bright line that has to be d r a w n is it has to be for a litigation 1-877-681-8550 toll free ( 6 5 1 ) 681-8550 phone www.johnsonreporting.com

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purpose.

We can't just call it a litigation

p u r p o s e based on a time line and then say, t h e r e f o r e , it is. T h e cases very much distinguish between i n s t a n c e s where it's a litigation purpose and w h e n it's a public relations purpose. m e is per se public relations. This to

There was --

y o u know, Trek can say all day that they n e e d e d to do this but from a legal p e r s p e c t i v e , there absolutely was no need to p r o d u c e this. complaint. They could have answered their

It would have been as publicly You

a v a i l a b l e as Mr. LeMond's complaint.

k n o w , there was no legal reason why there had t o be a Power Point presentation connected to t h e filing of a lawsuit. N o w , as I indicated before, we're sort o f flying blind. I'm willing to concede that

t h e r e may be communications in there where w o r k product applies. I don't know that. I

d o n ' t have a privilege log.

I don't have -- I

m e a n , I have no description of what the d o c u m e n t s are. It sounds like Mr. Weber

h a s n ' t even reviewed them yet. S o I don't -- I mean, I think that 1-877-681-8550 toll free ( 6 5 1 ) 681-8550 phone www.johnsonreporting.com

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t h e r e are probably very likely documents r e l a t e d to the creation of this that are not g o i n g to be covered because it's not a l i t i g a t i o n purpose. T H E COURT: Well, when I talk

a b o u t a litigation purpose, let's assume that l a w firm hires PR firm to address the PR from t h i s litigation. Law firm sits down. Lawyers

s i t down, share their strategies, their t h i n k i n g , how they're going to answer the c o m p l a i n t , what they know about the r e l a t i o n s h i p , why they think Greg LeMond is w r o n g in terms of his allegations. I n other words, lawyers with the client s h a r i n g all sorts of information that bears on l i t i g a t i o n that the PR consultant will be u s i n g to make a decision about what to u l t i m a t e l y put in the PR piece. And at the

s a m e time the PR firm then sends it back to t h e lawyer and says, look, can you live with t h i s in terms of the litigation because a n y t h i n g we put out in the public is going to c o m e back to -- you know, could haunt your c l i e n t , is this consistent and gets the l a w y e r ' s input back and forth. 1-877-681-8550 toll free ( 6 5 1 ) 681-8550 phone www.johnsonreporting.com

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W h y isn't this quintessential work product?

M S . RAHNE: reasons.

I think two

First off, and again we -T H E COURT: And I'm making

t h i s all up as you know. M S . RAHNE: I think Your Honor

i s going to be in the best position if -- and I ' m very amenable to the idea of an in-camera r e v i e w because I think you're going to be in a p o s i t i o n to get a better view of what's going on. We can only hypothesize. I t ' s very much my belief, based on the f a c t that this is what we have to work from, t h a t there was effort to create this and it h a s a great deal of bearing on my client's c l a i m s in terms of what Trek has done to d a m a g e his brand. I f there are some documents where it's f o c u s e d more internally toward the litigation, i f there's discussions about the complaint, I t h i n k that those might be work product. t h i n k to the degree that there were d i s c u s s i o n s about the complaint and the focus 1-877-681-8550 toll free ( 6 5 1 ) 681-8550 phone www.johnsonreporting.com I

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w a s on the creation of this, it's our c o n t e n t i o n that Trek has actually waived it. I don't know how, you know, you can h i r e just anybody to come in and sit and sit i n on these meetings and then say, well, we h a v e n ' t waived it even though this was the u l t i m a t e work product. This was the ultimate

t h i n g that we created and we were calling it p a r t of our litigation when it's not. This is

q u i n t e s s e n t i a l public relations product, not l e g a l work product. T H E COURT: M S . RAHNE: Okay. My only other

p o i n t , Your Honor, is under the work product d o c t r i n e , there is the ability for a party to g e t the discovery of non-opinion work product w h i c h we believe this would be if there's s u b s t a n t i a l need. s u b s t a n t i a l need. I believe we have We have no other way to get

a t the -- what was selected, what wasn't s e l e c t e d , what was the -- you know, what went i n and what went out in terms of telling a v e r y biased story about a brand that was going t o become a future competitor of Trek and that T r e k was supposed to be supporting. 1-877-681-8550 toll free ( 6 5 1 ) 681-8550 phone www.johnsonreporting.com

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T H E COURT:

And the need to

k n o w what went in and what went out or what d e c i s i o n s were made as to what to include or n o t include or how to say it, what's the r e l e v a n c e of that to your suit? M S . RAHNE: I think it speaks

d i r e c t l y to Trek's failure to meet their c o v e n a n t of good faith and fair dealing. They

w e r e under contract when they created this. A n d if they made intentional decisions to tell a story that is as biased as this appears to b e just on a glance, I think that's a breach. T h a t ' s absolutely a breach of their covenant o f good faith and fair dealing. T H E COURT: e l s e that you have? M S . RAHNE: Not unless you Okay. Anything

h a v e any other questions, Your Honor. T H E COURT: Let me ask again,

w e don't know what's been withheld because w e ' v e now learned that what's on the privilege l o g are only documents that were redacted and w e r e produced to your client in some form or another. M S . RAHNE: Correct.

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T H E COURT:

Is it your

p o s i t i o n , just so I'm clear, after April 8, a r e you seeking any communications between the P R firm and counsel and the client or are we o n l y talking about communications leading up t o April 8 and the service of the suit? M S . RAHNE: A p r i l 8, Your Honor. T H E COURT: All right. Those Just leading up to

a r e the only questions that I had. M S . RAHNE: o t h e r item that -T H E COURT: M S . RAHNE: Yes. I agreed with I have just one

c o u n s e l for Trek that we would just let you k n o w and get on the record Trek is providing u s some international sales documents that h a v e not yet been produced and they have b e a r i n g on our expert reports, obviously. We

h a v e a sort of gentleperson's agreement that w e ' r e going to reset the date for our exchange o f our initial expert reports once that m a t e r i a l has been received and our expert has a chance to say how much time he needs. T H E COURT: Okay.

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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 l l right. here.

M S . RAHNE: t o let you know that. T H E COURT:

So I just wanted

I didn't bring the

s c h e d u l i n g order with me but let me just r e m i n d you so that when you do present that to m e , you keep this in mind. j u s t look at the docket. say. M S . RAHNE: h a v e been due tomorrow. T H E COURT: M S . RAHNE: Yes. Rebuttal reports I think they would Although let me It may very well

a r e n ' t until August 1, I believe. T H E COURT: a l l discovery deadline -M S . RAHNE: T H E COURT: June 8. Let me just see Okay. And the --

Discovery due by June 8, 2009 and then

t h e r e must be -- must have some time for -M S . RAHNE: T H E COURT: Expert discovery. Expert discovery.

M S . RAHNE: T H E COURT:

Correct. Let me just remind

y o u all when you -- if you're going to present 1-877-681-8550 toll free ( 6 5 1 ) 681-8550 phone www.johnsonreporting.com

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a n y t h i n g that is going to modify dates, happy t o look at it. Understand if anything you

p r o p o s e will affect Judge Kyle's dates, his d i s p o s i t i v e motion deadline or his trial ready d a t e , he'll be the one deciding whether to m o v e those dates. In other words, he'll want

t o look at your reasons and why -- what caused t h e delay and why couldn't you have done it s o o n e r , et cetera. S o it's my way of saying to you if you c a n come up with a stipulation that doesn't a f f e c t him, you're only talking to me. If it

a f f e c t s his dates, I'll be talking to him. M S . RAHNE: goal. M R . WEBER: w e i g h in, Judge. T H E COURT: M R . WEBER: Sure. They had asked for If I could just That will be our

s o m e international sales data that was due l a s t Thursday. Trek hasn't completed pulling

a l l that together but I expect it to be done i n a day or two. And I told counsel that we,

o f course, would agree to a day-by-day e x t e n s i o n of the reports for every day that we 1-877-681-8550 toll free ( 6 5 1 ) 681-8550 phone www.johnsonreporting.com

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g o beyond last Thursday -T H E COURT: i t ' s -M R . WEBER: frame. T H E COURT: That's good. I A very short time I don't anticipate

j u s t want to give you a heads up that if u l t i m a t e l y it affects his dates, I'll be t a l k i n g to him. M S . RAHNE: And you might be

p l e a s e d to know that we're going to have our o w n sort of motivation because we do have a m e d i a t i o n scheduled and we have an agreement t h a t we want to have all this on the table p r i o r to mediation. T H E COURT: M S . RAHNE: p u r p o s e s -T H E COURT: scheduled? M S . RAHNE: T H E COURT: mediator? M S . RAHNE: Judge Stone in the Former Judge June 16. And who is your When is that Great. For our own

N o r t h e r n District of California.

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Stone. T H E COURT: Great. Wonderful. Yep. Okay.

All right.

M r . Weber, anything further in c o n n e c t i o n with your motion? M R . WEBER: C o u p l e of things. I n listening to counsel, it seems as t h o u g h they want to make the April 8 p r e s e n t a t i o n itself a trial over that presentation. Why did you put this slide in Thanks, Judge.

t h a t was negative to Mr. LeMond and not this o t h e r slide that might have been more f a v o r a b l e to him as if the jury is going to be d e c i d i n g whether Trek's announcement of the f i l i n g of the lawsuit and the reasons for the f i l i n g of the lawsuit somehow itself is a s e p a r a t e independent claim. m a k e sense to me. T h e parties acted as they did up to M a r c h 20 in a business relationship and then i t shifted to litigation. And this April 8 That just doesn't

a n n o u n c e m e n t , again if the Court will look at i t , it was an express explanation of here is w h y the relationship is over and the need to 1-877-681-8550 toll free ( 6 5 1 ) 681-8550 phone www.johnsonreporting.com

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s e e k court assistance.

So it doesn't make

s e n s e to me that somehow the jury would be w e i g h i n g why did you put this slide in and not t h a t slide. It just doesn't -- I don't track.

S e c o n d l y , in terms of what Mr. LeMond's r e p r e s e n t e d reasons were and his desire for t h i s relationship to continue until 2010, w e l l , two additional things I can tell you t h a t in December after the meeting with M r . LeMond, Mr. Burke followed up by e-mail to M r . LeMond and said, well, what's up? Are we

g o i n g to end early or are we continuing to 2010. Mr. LeMond didn't respond to Mr. Burke. I n the meantime, however, he has all s o r t s of e-mail traffic with third parties t e l l i n g them that he's going to be filing this l a w s u i t and hurry up and order your bikes b e c a u s e the relationship is going to be over. A n d in fact, between March 20 and A p r i l 8 there's an e-mail from Mr. LeMond that s a y s I have served notice on Trek -- not that w e ' r e going to continue -- I have served n o t i c e on Trek that either they buy me out, t h e y buy the brand or I go away, take my brand b a c k but with a price. So the option of

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c o n t i n u i n g Mr. LeMond knew was over by virtue o f what he did on March 20. T H E COURT: o f mitigation. Address the issue

You raised that and then

c o u n s e l for LeMond said they don't understand y o u r mitigation argument given Trek's position a s they aren't seeking damages. So they

d o n ' t -- their response that you have a duty t o mitigate your damages is somewhat of a surprise. M R . WEBER: Yeah, I'm not

q u i t e sure -- I mean, you recall we were here p r e v i o u s l y and seeking defining of the p a r a m e t e r s of Trek's counterclaim and q u a n t i f i c a t i o n of damages. And she's correct

t h a t the lost sales aspect of this is limited t o the LeMond bikes. We have not attempted to

s h o w the extent to which Trek bike brand sales w e r e affected by Mr. LeMond's conduct although w e believe it was. A s to lost bike sales, it is correct t h a t it is the LeMond lost bike sales that w e ' r e talking about. I n a broader sense, though, p a r t i c u l a r l y from Trek's perspective in the 1-877-681-8550 toll free ( 6 5 1 ) 681-8550 phone www.johnsonreporting.com

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t i m e leading up to April 8, between March 20 a n d April 8, Trek wasn't sure where this was g o i n g , that it had to anticipate Mr. LeMond m a k i n g quite a spectacle of the allegations a b o u t third parties that he's laid out in his complaint. And Trek anticipated that it would

d a m a g e its brand if he were to do that and n e e d e d to mitigate those anticipated damages b y a very clear and simple explanation of the b u s i n e s s reasons that the contract was over a n d litigation was being filed. S o the mitigation argument I'm talking a b o u t is in that time period between March 20 a n d April 8. We have not gone to -- we have

n o t attempted to assess the dollar impact on t h e Trek brand aside from the LeMond brand by v i r t u e of what Mr. LeMond has done over the years. T H E COURT: seated. Thank you. M R . WEBER: T H E COURT: Thanks, Judge. At least Okay. You can be

p r e l i m i n a r i l y I'm satisfied that the documents t h a t are being sought by the discovery are r e l e v a n t to claims related to LeMond's theory 1-877-681-8550 toll free ( 6 5 1 ) 681-8550 phone www.johnsonreporting.com

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o f liability and also on the issue of damages. A t least that's my preliminary sense based on w h a t the parties have presented to me. T h a t said, in order for me to determine w h e t h e r the invocation of attorney-client p r i v i l e g e or work product is appropriate I am g o i n g to need two things from Trek and, t h e r e f o r e , I'll be taking the motion under advisement. I ' m going to need a privilege log i d e n t i f y i n g the documents involving c o m m u n i c a t i o n s between the PR firm and either y o u r firm or the client that you are claiming a r e protected either by attorney-client p r i v i l e g e or work product. So we need a

p r i v i l e g e log that contains the appropriate i n f o r m a t i o n of the to, from, copied on and the n a t u r e of the -- the subject matter. In other

w o r d s , consistent with what you've done on y o u r other privilege log. n e e d that. So I'm going to

That privilege log needs to be

s e r v e d on LeMond's counsel. A n d then I'm going to need the d o c u m e n t s themselves to do an in-camera i n s p e c t i o n so I can make a determination as to 1-877-681-8550 toll free ( 6 5 1 ) 681-8550 phone www.johnsonreporting.com

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w h e t h e r any of them or all of them should be w i t h h e l d or under what circumstances. S o , Mr. Weber, when do you think you c a n get the privilege log to me and the -- and l e t me -- and also the documents but let me a s k again. J u n e when? M R . WEBER: M S . RAHNE: M R . WEBER: M S . RAHNE: T H E COURT: 15th. 15th. Or 16th. 16th. All right. As a The mediation is scheduled for

p r a c t i c a l matter, then, let me ask because o b v i o u s l y I don't want to be the one holding u p discovery here but I also don't want to e n c o u r a g e the parties to have to incur u n n e c e s s a r y expense if, in fact, this case is g o i n g to get resolved. So if it makes sense

t o wait and have that production -- creation o f the privilege log and the production after t h e mediation so you can see if it's been r e s o l v e d , we can certainly do that. If that

d o e s n ' t make sense because you need to keep m o v i n g on this and you have other things, g r a n t e d we're already towards the end of May, 1-877-681-8550 toll free ( 6 5 1 ) 681-8550 phone www.johnsonreporting.com

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t h e n I'm going to ask that it get produced to m e before the mediation. But it does occur to

m e that, you know, this takes time and money t o do it and I hate to have the parties incur u n n e c e s s a r y expense if the case can get resolved. M S . RAHNE: Speaking from our

s i d e , Your Honor, we would very much prefer t h a t we have them prior to the mediation under t h e same theory under which we're e x c h a n g i n g -- we had discussed ( u n i n t e l l i g i b l e ) potentially holding up on f u l l - f l e d g e d expert reports for similar r e a s o n s and Trek had indicated that we want to b e able to, you know, have everything on the t a b l e , so to speak. I think under that same theory I would v e r y much like to have whatever discovery w e ' r e entitled to so we can incorporate into o u r mediation brief and/or share with the m e d i a t o r if it has bearing in the case which w e believe it does. T H E COURT: M R . WEBER: Mr. Weber. I'm actually --

I ' m happy to give the privilege log in short 1-877-681-8550 toll free ( 6 5 1 ) 681-8550 phone www.johnsonreporting.com

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o r d e r , Judge -T H E COURT: M R . WEBER: Okay. -- so we can keep

t h i s moving because if the Court were to c o n c l u d e that Trek is incorrect, then we would n e e d to proceed with the deposition of the p u b l i c strategies person that was previously n o t i c e d and we want to do that and keep this moving. T H E COURT: Okay. You know,

a s a practical matter, I'll tell you given t h a t we're already at May 26 and your s e t t l e m e n t conference is set for June 15, I d o n ' t know that we, again depending on when y o u get this information to me, whether you're g o i n g to have a decision in time or a -- and e v e n if you do, whether one or the other of y o u , whoever loses, won't be appealing it to J u d g e Kyle in any event. Meaning, I'm not

s u r e you're going to have an answer on these d o c u m e n t s before June 15. y o u a heads up. M R . WEBER: Then I will need a I just want to give

l i t t l e bit of time to pull everything t o g e t h e r , make sure I've got it. 1-877-681-8550 toll free ( 6 5 1 ) 681-8550 phone www.johnsonreporting.com

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