Sadiant, Inc. et al v. Penstock Consulting, LLC

Filing 76

ORDER AUTHORIZING BASHAM, RINGE, Y CORREA, S.C. TO REPRESENTPLAINTIFFS SADIANT, INC. AND SADIANT HEALTH, LLC IN CONNECTIONWITH THE HAGUE CONVENTION PROCEEDINGS TO TAKE THE DEPOSITIONSOF BEN AYALA AND URIEL (ULISES) COTA HUERTA: Accordingly, this Cou rt hereby authorizes the firm Basham, Ringe, y Correa, S.C. to represent plaintiffs Sadiant, Inc. and Sadiant Health, LLC in connection with the Hague Convention proceedings to take the depositions of Ben Ayala and Uriel (Ulises) Cota Huerta. (Signed by Judge Jeannette A. Vargas on 3/5/2025) (sgz)

UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK
SADIANT, INC. AND SADIANT HEALTH, LLC,
Plaintiffs,
Case No. 1:23-cv-07872-JAV

-vPENSTOCK CONSULTING, LLC,

Hon. Jeannette A. Vargas

Defendant.

ORDER AUTHORIZING BASHAM, RINGE, Y CORREA, S.C. TO REPRESENT
PLAINTIFFS SADIANT, INC. AND SADIANT HEALTH, LLC IN CONNECTION
WITH THE HAGUE CONVENTION PROCEEDINGS TO TAKE THE DEPOSITIONS
OF BEN AYALA AND URIEL (ULISES) COTA HUERTA
The United States District Court for the Southern District of New York presents its
compliments to the Mexico Ministry of Foreign Affairs, General Direction of Legal Affairs,
Directorate for International Procedural Cooperation, and requests international assistance to be
used in the civil proceedings before this Court in the above-captioned matter and without which
justice cannot be completely done. In anticipation of trial, the parties are currently collecting
evidence regarding the issues raised by their allegations and defenses.
This Court requests the assistance described herein as necessary in the interests of justice
under the Hague Convention of 18 March 1970 on the Taking of Evidence Abroad in Civil or
Commercial Matters (“Hague Evidence Convention”) to which the United States and Mexico are
parties.
This Court previously issued letters of request (attached hereto as Exhibit A and Exhibit
B) to perpetuate the taking of the depositions of Mexican nationals Ben Ayala and Uriel (Ulises)
Cota Huerta. This Court understands that those letters of request were transmitted to the Ministry
of Foreign Affairs for processing. Since this Court issued the letters of request, the plaintiffs in the

above-captioned matter—Sadiant, Inc. and Sadiant Health, LLC—engaged counsel in Mexico to
assist in communicating with the Ministry of Foreign Affairs.
Sadiant requested this Court issue an order recognizing that the firm Basham, Ringe, y
Correa, S.C. has been engaged by plaintiffs and is an authorized representative of the plaintiffs for
purposes of the Hague Convention proceedings.
ACCORDINGLY, THIS COURT HEREBY AUTHORIZES THE FIRM BASHAM,
RINGE, Y CORREA, S.C. TO REPRESENT PLAINTIFFS SADIANT, INC. AND SADIANT
HEALTH, LLC IN CONNECTION WITH THE HAGUE CONVENTION PROCEEDINGS TO
TAKE THE DEPOSITIONS OF BEN AYALA AND URIEL (ULISES) COTA HUERTA.

March 5, 2025
Dated: _____________________
____________________ _______ ___
Hon. Jeannette A Vargas
United States District Judge

EXHIBIT A

UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK
SADIANT, INC. AND SADIANT HEALTH, LLC,
Plaintiffs,

Case No. 1:23-cv-07872-KPF

-against-

Hon. Katherine Polk Failla

PENSTOCK CONSULTING, LLC,
Defendant.

LETTER OF REQUEST FOR JUDICIAL ASSISTANCE
UNDER THE HAGUE EVIDENCE CONVENTION
The United States District Court for the Southern District of New York presents its
compliments to the Mexico Ministry of Foreign Affairs, General Direction of Legal Affairs,
Directorate for International Procedural Cooperation, and requests international assistance to be
used in the civil proceedings before this Court in the above-captioned matter and without which
justice cannot be completely done. In anticipation of trial, the parties are currently collecting
evidence regarding the issues raised by their allegations and defenses.
This Court requests the assistance described herein as necessary in the interests of justice
under the Hague Convention of 18 March 1970 on the Taking of Evidence Abroad in Civil or
Commercial Matters (“Hague Evidence Convention”) to which the United States and Mexico are
parties. The assistance requested is that the appropriate judicial authority order that testimony be
taken regarding the topics described below from Mr. Ben Ayala.
The Courts of the United States are authorized to extend similar assistance to the courts of
Mexico in like cases. The following request follows the form of the Model Letter of Request for
International Judicial Assistance pursuant to the Hague Convention of 18 March 1970 on the

Taking of Evidence Abroad in Civil or Commercial Matters, which can be found at
http://www.hcch.net/upload/actform20e.pdf.
1. Sender
The Honorable Katherine Polk Failla
United States District Court for the Southern District of New York
Thurgood Marshall United States Courthouse
40 Foley Square
New York, NY 10007
2. Central Authority of the Requested State
Secretaría de Relaciones Exteriores (Ministry of Foreign Affairs)
Dirección General de Asuntos Jurídicos (General Direction of Legal Affairs)
Dirección de Cooperación Procesal Internacional (Directorate for International
Procedural Cooperation)
Plaza Juárez #20, Piso 5
Colonia Centro, Alcaldía Cuauhtémoc
C.P. 06010 Ciudad de México, México
3. Person to whom the executed request is to be returned
Ben Ayala
Paseo Borbon 40-B
Fraccionamiento Puerta Real 27015
Torreón, Coahuila, Mexico
4. Specification of the date by which the requesting authority requires receipt of the response
to the Letter of Request
The undersigned respectfully requests receipt of a response to this Letter of Request as
soon as is practicable.
In conformity with Article 3 of the Convention, the undersigned applicant has the honor to
submit the following request:
5. Requesting and competent judicial authorities
a. Requesting judicial authority (Article 3(a))

The requesting judicial authority is the Honorable Katherine Polk Failla, United States
District Court for the Southern District of New York, Thurgood Marshall United States
Courthouse, 40 Foley Square, New York, NY 10007.
b. To the competent authority of (Article 3(a))
The competent judicial authority to whom this request is made is the Secretaría de
Relaciones Exteriores, Dirección General de Asuntos Jurídicos, Dirección de Cooperación
Procesal Internacional, Plaza Juárez #20, Piso 5, Colonia Centro, Alcaldía Cuauhtémoc C.P. 06010
Ciudad de México, México.
c. Name of the case and any identifying number
The name of this case is Sadiant, Inc. and Sadiant Health, LLC v. Penstock Consulting,
LLC, Case No. 1:23-cv-07872-KPF (S.D.N.Y.).
6. Names and addresses of the parties and their representatives (including representatives in
the requested State) (Article 3(b))
The above-entitled civil action was commenced in the United States District Court for the
Southern District of New York on September 5, 2023. The names and addresses of the parties and
their representatives are as follows:
a. Plaintiffs and Representatives
Plaintiffs Sadiant, Inc. and Sadiant Health, LLC, both with their principal place of business
at 2833 Crockett Street, Suite 112, Fort Worth, Tarrant County, Texas 76107, are represented by
the following attorneys:
J. Michael Thomas
Davis G. Mosmeyer III
Foley & Lardner LLP
2021 McKinney Avenue, Suite 1600
Dallas, Texas 75201

Robert S. Weisbein
Foley & Lardner LLP
90 Park Avenue
New York, NY 10016-1314

b. Defendants and Representatives
Defendant Penstock Consulting, LLC, with a principal place of business at 2905 Sundial
Ln., Northlake, TX 76247, is represented by the following attorneys:
Larry J. Friedman
Richard Winn
Jason H. Friedman
Friedman & Feiger, L.L.P.
17304 Preston Road, Suite 300
Dallas, Texas 75252
7. Nature and purpose of the proceedings and summary of the facts
a. Nature of the proceedings (divorce, paternity, breach of contract, product liability,
etc.) (Article 3(c))
This is a civil action for the declaration of rights under the Copyright Act (17 U.S.C. § 101,
et. seq.) and violation of the Defend Trade Secrets Act (18 U.S.C. § 1836) and Computer Fraud
and Abuse Act (18 U.S.C. § 1030) pending in the United States District Court for the Southern
District of New York.
b. Summary of Sadiant’s allegations
Plaintiff Sadiant, Inc. (“Sadiant”) alleges as follows:
Sadiant contracted with Defendant Penstock Consulting, LLC (“Penstock”) to develop
certain proprietary software to be used in Sadiant’s healthcare staffing business. Sadiant
subsequently hired Penstock’s principal—Joseph Williams—to also be the Chief Technology
Officer of Sadiant. During a May 2023 board meeting, Williams and Sadiant’s Chief Financial
Officer (Jon Kurth) attempted to remove Sadiant’s Chief Executive Officer (Sarah Snetzer) from
her position. Sadiant’s shareholders voted to stop the attempted removal of Snetzer and, instead,
removed Williams and Kurth from the board of directors.

Sadiant requested that Penstock turn over all work product Penstock created for Sadiant
pursuant to their contract. Penstock refused. Making matters worse, Penstock locked Sadiant out
of the cloud computing platform, which housed Sadiant’s data and intellectual property. Sadiant’s
subsequent investigation also revealed that Penstock improperly accessed Sadiant email accounts,
made copies of Sadiant’s proprietary software, and deleted code documentation and notes. Finally,
Williams represented in open court that he intended to register a copyright on Sadiant’s code,
which would be contrary to the parties’ contract and copyright law.
Together, these acts constitute violations of the Defend Trade Secrets Act and Computer
Fraud and Abuse Act. Further, Sadiant seeks a declaration of its copyright in the software it
contracted with Penstock to develop.
c. Summary of Penstock’s defenses
Penstock generally denies Sadiant’s allegations and has asserted various affirmative
defenses contesting Sadiant’s rights in the software.
8. Evidence to be obtained and its purpose
a. Evidence to be obtained or other judicial act to be performed (Article 3(d))
Sadiant seeks testamentary information from Mr. Ayala regarding (1) Penstock’s access
and control of Sadiant’s cloud computing platform, (2) Penstock’s handling of Sadiant’s
proprietary software and related information, (3) Penstock’s accessing of Sadiant email accounts,
and (4) Penstock’s invoicing practices. Mr. Ayala was an employee or contractor for Penstock
during the period that Penstock was providing services for Sadiant and, therefore, possesses
knowledge concerning the aforementioned topics.

b. Purpose of the evidence or judicial act sought
The evidence sought from Mr. Ayala is indispensable to understanding Penstock’s conduct
and whether such conduct was unlawful.
9. Identity and address of any person to be examined (Article 3(e))
Ben Ayala
Paseo Borbon 40-B
Fraccionamiento Puerta Real 27015
Torreón, Coahuila, Mexico
10. Questions to be put to the persons to be examined or statement of the subject-matter about
which they are to be examined (Article 3(f))
Subject matter of examination:
a. Mr. Ayala’s involvement in Penstock’s work developing Sadiant’s proprietary
software.
b. Mr. Ayala’s involvement in accessing Sadiant email accounts on behalf of Penstock.
c. Mr. Ayala’s involvement in making or retaining copies of Sadiant’s proprietary
software.
d. Mr. Ayala’s involvement in access, deleting, or modifying working notes and code
documentation related to Sadiant’s proprietary software.
e. Mr. Ayala’s involvement in modifying, controlling, or removing Sadiant’s access to its
cloud computing platform.
f. Penstock’s invoicing for work performed on behalf of Sadiant.
g. Penstock’s modification of the archiving protocol for versions of Sadiant’s proprietary
software.
h. Penstock’s altering or disabling of Sadiant’s cybersecurity agents.
Alternatively, if required, the questions to be put to Mr. Ayala will be attached at Exhibit
A.
11. Documents or other property to be inspected (Article 3(g))
Plaintiffs do not seek the pre-trial discovery of documents.
12. Any requirement that the evidence be given on oath or affirmation and any special form to
be used (Article 3(h))

The undersigned respectfully requests that the persons to be examined testify under oath
or affirmation. In the event that the witness cannot be placed under oath, it is requested that he
answer questions in a manner provided by local law for taking evidence.
13. Special methods or procedures to be followed (e.g. oral or in writing, verbatim, transcript
or summary, cross-examination, etc.) (Articles 3(i) and 9)
The undersigned respectfully requests that the person to be examined be summoned to
attend at such time and place as the appropriate judicial authority shall appoint. Further, the
undersigned respectfully requests that the examination be performed before a person competent to
preside over the examination of witnesses and that counsel for the parties be permitted to
participate and ask questions. The undersigned also respectfully requests that the testimony of the
persons to be examined be transcribed verbatim in writing and that the examinees sign the
statements after they have been recorded. In addition, the undersigned respectfully requests that a
videographer be permitted to make a recording of the proceedings.
The undersigned understands that the examinations or depositions sought would normally
be conducted in accordance with the laws and procedures of Mexico. Article 9 of the Hague
Evidence Convention, however, provides that a request for a special mode of procedure will be
followed unless it is incompatible with the laws of Mexico. The undersigned therefore requests
that the examinations or depositions be conducted in accordance with the United States Federal
Rules of Evidence and Federal Rules of Civil Procedure, which are the applicable Rules of this
Court.
Should the appropriate judicial authority decline to apply the United States’ rules or decline
to allow the participation of counsel for the parties, the undersigned requests that the appropriate
judicial authority question the persons to be examined orally and under oath in accordance with

EXHIBIT B

UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK
SADIANT, INC. AND SADIANT HEALTH, LLC,
Plaintiffs,

Case No. 1:23-cv-07872-KPF

-against-

Hon. Katherine Polk Failla

PENSTOCK CONSULTING, LLC,
Defendant.

LETTER OF REQUEST FOR JUDICIAL ASSISTANCE
UNDER THE HAGUE EVIDENCE CONVENTION
The United States District Court for the Southern District of New York presents its
compliments to the Mexico Ministry of Foreign Affairs, General Direction of Legal Affairs,
Directorate for International Procedural Cooperation, and requests international assistance to be
used in the civil proceedings before this Court in the above-captioned matter and without which
justice cannot be completely done. In anticipation of trial, the parties are currently collecting
evidence regarding the issues raised by their allegations and defenses.
This Court requests the assistance described herein as necessary in the interests of justice
under the Hague Convention of 18 March 1970 on the Taking of Evidence Abroad in Civil or
Commercial Matters (“Hague Evidence Convention”) to which the United States and Mexico are
parties. The assistance requested is that the appropriate judicial authority order that testimony be
taken regarding the topics described below from Mr. Uriel (Ulises) Cota Huerta.
The Courts of the United States are authorized to extend similar assistance to the courts of
Mexico in like cases. The following request follows the form of the Model Letter of Request for
International Judicial Assistance pursuant to the Hague Convention of 18 March 1970 on the

Taking of Evidence Abroad in Civil or Commercial Matters, which can be found at
http://www.hcch.net/upload/actform20e.pdf.
1. Sender
The Honorable Katherine Polk Failla
United States District Court for the Southern District of New York
Thurgood Marshall United States Courthouse
40 Foley Square
New York, NY 10007
2. Central Authority of the Requested State
Secretaría de Relaciones Exteriores (Ministry of Foreign Affairs)
Dirección General de Asuntos Jurídicos (General Direction of Legal Affairs)
Dirección de Cooperación Procesal Internacional (Directorate for International
Procedural Cooperation)
Plaza Juárez #20, Piso 5
Colonia Centro, Alcaldía Cuauhtémoc
C.P. 06010 Ciudad de México, México
3. Person to whom the executed request is to be returned
Uriel Cota Huerta
Av. del Desierto 457
Nueva California 27089
Torreón, Coahuila, Mexico
4. Specification of the date by which the requesting authority requires receipt of the response
to the Letter of Request
The undersigned respectfully requests receipt of a response to this Letter of Request as
soon as is practicable.
In conformity with Article 3 of the Convention, the undersigned applicant has the honor to
submit the following request:
5. Requesting and competent judicial authorities
a. Requesting judicial authority (Article 3(a))

The requesting judicial authority is the Honorable Katherine Polk Failla, United States
District Court for the Southern District of New York, Thurgood Marshall United States
Courthouse, 40 Foley Square, New York, NY 10007.
b. To the competent authority of (Article 3(a))
The competent judicial authority to whom this request is made is the Secretaría de
Relaciones Exteriores, Dirección General de Asuntos Jurídicos, Dirección de Cooperación
Procesal Internacional, Plaza Juárez #20, Piso 5, Colonia Centro, Alcaldía Cuauhtémoc C.P. 06010
Ciudad de México, México.
c. Name of the case and any identifying number
The name of this case is Sadiant, Inc. and Sadiant Health, LLC v. Penstock Consulting,
LLC, Case No. 1:23-cv-07872-KPF (S.D.N.Y.).
6. Names and addresses of the parties and their representatives (including representatives in
the requested State) (Article 3(b))
The above-entitled civil action was commenced in the United States District Court for the
Southern District of New York on September 5, 2023. The names and addresses of the parties and
their representatives are as follows:
a. Plaintiffs and Representatives
Plaintiffs Sadiant, Inc. and Sadiant Health, LLC, both with their principal place of business
at 2833 Crockett Street, Suite 112, Fort Worth, Tarrant County, Texas 76107, are represented by
the following attorneys:
J. Michael Thomas
Davis G. Mosmeyer III
Foley & Lardner LLP
2021 McKinney Avenue, Suite 1600
Dallas, Texas 75201

Robert S. Weisbein
Foley & Lardner LLP
90 Park Avenue
New York, NY 10016-1314

b. Defendants and Representatives
Defendant Penstock Consulting, LLC, with a principal place of business at 2905 Sundial
Ln., Northlake, TX 76247, is represented by the following attorneys:
Larry J. Friedman
Richard Winn
Jason H. Friedman
Friedman & Feiger, L.L.P.
17304 Preston Road, Suite 300
Dallas, Texas 75252
7. Nature and purpose of the proceedings and summary of the facts
a. Nature of the proceedings (divorce, paternity, breach of contract, product liability,
etc.) (Article 3(c))
This is a civil action for the declaration of rights under the Copyright Act (17 U.S.C. § 101,
et. seq.) and violation of the Defend Trade Secrets Act (18 U.S.C. § 1836) and Computer Fraud
and Abuse Act (18 U.S.C. § 1030) pending in the United States District Court for the Southern
District of New York.
b. Summary of Sadiant’s allegations
Plaintiff Sadiant, Inc. (“Sadiant”) alleges as follows:
Sadiant contracted with Defendant Penstock Consulting, LLC (“Penstock”) to develop
certain proprietary software to be used in Sadiant’s healthcare staffing business. Sadiant
subsequently hired Penstock’s principal—Joseph Williams—to also be the Chief Technology
Officer of Sadiant. During a May 2023 board meeting, Williams and Sadiant’s Chief Financial
Officer (Jon Kurth) attempted to remove Sadiant’s Chief Executive Officer (Sarah Snetzer) from
her position. Sadiant’s shareholders voted to stop the attempted removal of Snetzer and, instead,
removed Williams and Kurth from the board of directors.

Sadiant requested that Penstock turn over all work product Penstock created for Sadiant
pursuant to their contract. Penstock refused. Making matters worse, Penstock locked Sadiant out
of the cloud computing platform, which housed Sadiant’s data and intellectual property. Sadiant’s
subsequent investigation also revealed that Penstock improperly accessed Sadiant email accounts,
made copies of Sadiant’s proprietary software, and deleted code documentation and notes. Finally,
Williams represented in open court that he intended to register a copyright on Sadiant’s code,
which would be contrary to the parties’ contract and copyright law.
Together, these acts constitute violations of the Defend Trade Secrets Act and Computer
Fraud and Abuse Act. Further, Sadiant seeks a declaration of its copyright in the software it
contracted with Penstock to develop.
c. Summary of Penstock’s defenses
Penstock generally denies Sadiant’s allegations and has asserted various affirmative
defenses contesting Sadiant’s rights in the software.
8. Evidence to be obtained and its purpose
a. Evidence to be obtained or other judicial act to be performed (Article 3(d))
Sadiant seeks testamentary information from Mr. Cota Huerta regarding (1) Penstock’s
access and control of Sadiant’s cloud computing platform, (2) Penstock’s handling of Sadiant’s
proprietary software and related information, (3) Penstock’s accessing of Sadiant email accounts,
and (4) Penstock’s invoicing practices. Mr. Cota Huerta was an employee or contractor for
Penstock during the period that Penstock was providing services for Sadiant and, therefore,
possesses knowledge concerning the aforementioned topics.

b. Purpose of the evidence or judicial act sought
The evidence sought from Mr. Cota Huerta is indispensable to understanding Penstock’s
conduct and whether such conduct was unlawful.
9. Identity and address of any person to be examined (Article 3(e))
Uriel Cota Huerta
Av. del Desierto 457
Nueva California 27089
Torreón, Coahuila, Mexico
10. Questions to be put to the persons to be examined or statement of the subject-matter about
which they are to be examined (Article 3(f))
Subject matter of examination:
a. Mr. Cota Huerta’s involvement in Penstock’s work developing Sadiant’s proprietary
software.
b. Mr. Cota Huerta’s involvement in accessing Sadiant email accounts on behalf of
Penstock.
c. Mr. Cota Huerta’s involvement in making or retaining copies of Sadiant’s proprietary
software.
d. Mr. Cota Huerta’s involvement in access, deleting, or modifying working notes and
code documentation related to Sadiant’s proprietary software.
e. Mr. Cota Huerta’s involvement in modifying, controlling, or removing Sadiant’s access
to its cloud computing platform.
f. Penstock’s invoicing for work performed on behalf of Sadiant.
g. Penstock’s modification of the archiving protocol for versions of Sadiant’s proprietary
software.
h. Penstock’s altering or disabling of Sadiant’s cybersecurity agents.
Alternatively, if required, the questions to be put to Mr. Cota Huerta will be attached at
Exhibit A.
11. Documents or other property to be inspected (Article 3(g))
Plaintiffs do not seek the pre-trial discovery of documents.

12. Any requirement that the evidence be given on oath or affirmation and any special form to
be used (Article 3(h))
The undersigned respectfully requests that the persons to be examined testify under oath
or affirmation. In the event that the witness cannot be placed under oath, it is requested that he
answer questions in a manner provided by local law for taking evidence.
13. Special methods or procedures to be followed (e.g. oral or in writing, verbatim, transcript
or summary, cross-examination, etc.) (Articles 3(i) and 9)
The undersigned respectfully requests that the person to be examined be summoned to
attend at such time and place as the appropriate judicial authority shall appoint. Further, the
undersigned respectfully requests that the examination be performed before a person competent to
preside over the examination of witnesses and that counsel for the parties be permitted to
participate and ask questions. The undersigned also respectfully requests that the testimony of the
persons to be examined be transcribed verbatim in writing and that the examinees sign the
statements after they have been recorded. In addition, the undersigned respectfully requests that a
videographer be permitted to make a recording of the proceedings.
The undersigned understands that the examinations or depositions sought would normally
be conducted in accordance with the laws and procedures of Mexico. Article 9 of the Hague
Evidence Convention, however, provides that a request for a special mode of procedure will be
followed unless it is incompatible with the laws of Mexico. The undersigned therefore requests
that the examinations or depositions be conducted in accordance with the United States Federal
Rules of Evidence and Federal Rules of Civil Procedure, which are the applicable Rules of this
Court.
Should the appropriate judicial authority decline to apply the United States’ rules or decline
to allow the participation of counsel for the parties, the undersigned requests that the appropriate