Arista Records LLC et al v. Lime Wire LLC et al

Filing 607

DECLARATION of Kelly M. Klaus in Support re: 533 MOTION in Limine to Preclude Specified Categories of Evidence and Argument., 535 Memorandum of Law in Support of Motion,, 606 Reply Memorandum of Law in Support,,,. Document filed by Arista Music, fka BMG Music, Arista Records LLC, Atlantic Recording Corporation, BMG Music, Capitol Records, Inc., Capitol Records, LLC, fka Capitol Records, Inc., Elektra Entertainment Group Inc., Elektra Entertainment Group, Inc., Interscope Records, Laface Records LLC, Motown Record Company, L.P., Priority Records LLC, Sony BMG Music Entertainment, Sony Music Entertainment, fka Sony BMG Music Entertainment, UMG Recordings, Inc., Virgin Records America, Inc., Warner Bros. Records Inc.. (Attachments: # 1 Exhibit 1)(Klaus, Kelly)

Arista Records LLC et al v. Lime Wire LLC et al

Doc. 607 Att. 1

Dockets.Justia.com

1 1 1 2 2 3 3 4 4 5 5 6 6 7 7 8 8 9 9 10 10 11 11 12 12 13 13 14 14 15 15 16 16 17 18 18 19 19 20 20 21 22 23 24 25 07T9ARIH UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK ------------------------------x ARISTA RECORDS LLC, ET AL., Plaintiffs, v. LIMEWIRE LLC, ET AL.,, Defendants. ------------------------------x New York, N.Y. July 29, 2010 9:36 a.m. Before: HON. KIMBA M. WOOD District Judge APPEARANCES MUNGER, TOLLES & OLSON, LLP Attorneys for Plaintiffs BY: GLENN POMERANTZ KELLY KLAUS JENNIFER PARISER JONATHAN BLAVIN WILSON, SONSINI, GOODRICH & ROSATI Attorneys for Defendants BY: MICHAEL SOMMER JESSICA MARGOLIS 06 CV 5936 (KMW)

SOUTHERN DISTRICT REPORTERS, P.C. [phone]

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97 07T9ARIH Gorton - cross Q. I want to draw your attention to the second page of the letter, and it's the bottom paragraph on the page, where the -in the middle of the paragraph it says, "Finally, as you are on notice of claims against you and your company." Do you see that? A. Yes. Q. Now is that the first time you had any inkling that someone might come after you individually? A. Yes. Q. Was your decision to meet with a lawyer to make plans for your estate related in any way to a concern on your part that you individually were going to get sued by the plaintiffs in this case? A. No. Q. How about that LimeWire was going to get sued? A. No. Q. Now, let's talk about the beginning of 2005 because that's when you first actually met with Mr. Rubenstein, correct? A. Correct. Q. Now, you talked this morning a little bit about following the Grokster case as it went through its various courts, correct? A. Yes. Q. And I think Mr. Pomerantz established that the district court decision was in April of 2003 and that was in favor of SOUTHERN DISTRICT REPORTERS, P.C. [phone]

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98 07T9ARIH Gorton - cross Grokster, correct? A. Correct. Q. A decision by the district court in favor of Grokster, did that raise any concern on your part that LimeWire was going to get sued, or did it diminish any such concern if there was one? A. Probably diminish. Q. Now, the Ninth Circuit, the Court of Appeals, I believe issues its ruling in August of 2004 -- I think that's right. And you were aware of that, correct? A. Correct. Q. And Grokster won again, right? A. Correct. Q. Now you were shown some documents this morning by Mr. Pomerantz, like an offering memo where litigation risk was identified back in 2001, and a memo you wrote -- I think that may have been in 2002. Fast-forwarding to 2004, now that Grokster has won both in the district court and the court of appeals, to the extent you believe there was at least a potential risk of LimeWire getting sued, was that risk greater or less by August of 2004? A. Less. Q. And then the final sort of line in the sand that Mr. Pomerantz puts a lot of emphasis on is June 27, 2005 when the Supreme Court reverses Grokster. You've seen that date, SOUTHERN DISTRICT REPORTERS, P.C. [phone]

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99 07T9ARIH Gorton - cross right? A. Yes. Q. And throughout the litigation of Grokster, to the extent you were following it, did you have any concern that you were going to be sued in an individual capacity? A. No. Q. Now, you were questioned at length this morning about the family limited partnerships that were created as a result of meetings with Mr. Rubenstein, correct? A. Correct. Q. And there was a FLP created for LimeWire; is that right? A. Correct. Q. That was one of them? A. Correct. Q. And there were others created for other business interests that you had, right? A. Correct. Q. Was LimeWire treated exactly the same as the other company interests you had vis-a-vis the FLPs? A. Yes. MR. POMERANTZ: Your Honor, I have tried not to interfere but this is his own witness and he really shouldn't be leading the witness. THE COURT: Sustained. A minor change in questioning. MR. SOMMER: It is cross though. SOUTHERN DISTRICT REPORTERS, P.C. [phone]