Ceglia v. Zuckerberg et al

Filing 633

OBJECTIONS to Objections -- non-motion 632 filed by Plaintiff Paul D. Ceglia.. (Attachments: # 1 Certificate of Service)(Argentieri, Paul)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NEW YORK
PAUL D. CEGLIA,

Civil Action No. : 1:10-cv-00569-RJA

Plaintiff,
v.

PLAINTIFF’S OBJECTIONS TO
MAGISTRATE JUDGE
FOSCHIO’S NOVEMBER 29, 2012
ORDER, DOC. NO. 615

MARK ELLIOT ZUCKERBERG, Individually, and
FACEBOOK, INC.
Defendants.

STATEMENT OF JURISDICTION
A party may file objections to a magistrate judge’s order concerning a nondispositive pretrial matter within 14 days of receiving a copy of that order. F.R.C.P.
72(a); L.R. Civ. P. 72(a). Magistrate Judge Foschio entered his order, Doc. No. 615,
on November 29, 2012, and Plaintiff Paul Ceglia was electronically served with a
copy of that order on the same day.
STANDARD OF REVIEW
“The district judge . . . must consider timely objections and modify or set
aside any part of the order that is clearly erroneous or is contrary to law.” 28 U.S.C.
§ 636(b)(1)(A); F.R.C.P. 72(a); L.R. Civ. P. 72(a). The magistrate judge’s order is
clearly erroneous “when although there is evidence to support it, the reviewing
court on the entire evidence is left with the definite and firm conviction that a
mistake has been committed.” Gualdani v. Adams, 385 F.3d 236, 240 (2d Cir. 2004)

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(quoting United States v. U.S. Gypsum Co., 333 U.S. 364, 395; citing Bronx
Household of Faith v. Bd. of Educ., 331 F.3d 342, 348 (2d Cir. 2003)). The
magistrate judge’s order is contrary to law “if the order fails to apply the relevant
law.” Lavigna v. State Farm Mutual Auto. Ins. Co., 736 F.Supp.2d 504, 510
(N.D.N.Y. 2010) (citing Olais-Castro v. United States, 416 F.2d 1155, 1158 n.8 (9th
Cir. 1969)).
MAGISTRATE JUDGE FOSCHIO’S ORDER REQUIRING THE PAYMENT
OF FEES RELATED TO CANCELLED DEPOSITIONS IS CONTRARY TO
LAW
Magistrate Judge Foschio erred in granting Defendants expert fees, attorney
preparation fees and other fees related to properly and timely cancelled depositions
of the Defendants’ expert witnesses. Doc. No. 615.
Defendants and Plaintiff reached an agreement regarding the reasonable
costs and expenses related to expert depositions. Declaration of Dean Boland filed
with opposition to Attorneys Fees at ¶2. Neither party was required to conduct any
depositions of the opposing witnesses.

Id.

Defense Counsel Alex Southwell and

Plaintiff’s Counsel reached an agreement through a series of emails and phone
conversations regarding which party would bear which deposition costs and
expenses. Id. That agreement included, only, the following terms:
1.

The party taking any deposition would pay the reasonable deposition fee for
the witness’ time in deposition and reasonable travel expenses of the witness
attending that deposition. Id. at ¶4.
Neither Defense counsel nor Plaintiff’s counsel obtained or sought any other
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terms regarding costs or expenses of deposition.
Defendants noticed their depositions of Plaintiff’s experts and demanded
those depositions occur before Plaintiff would depose Defendants’ experts. Id. at ¶9.
Defendants noticed those depositions to occur at Defendants’ offices in New York.
Id.

Plaintiff noticed depositions of Defendants’ witnesses to occur in Cleveland,

Ohio, the location of his office. Id. at ¶10. Before Plaintiff’s noticed depositions of
Defendants’ experts could occur, Mr. Southwell requested a concession - namely,
that all Defendants’ witnesses be deposed at Mr. Southwell’s offices in New York.
Id. at ¶11.

Plaintiff’s counsel agreed to that concession with the qualification that

respect be given to scheduling of those depositions to account for Plaintiff’s counsel
having to bear the cost and time away from home for all depositions. Id. at ¶12.
Mr. Southwell agreed to be accommodating in this respect.
Most depositions of Defendants’ experts noticed by Plaintiff were conducted.
Some were postponed for reasons outside of Plaintiff’s counsel’s control, canceled
flights during travel to New York. Others were timely cancelled in good faith.
CANCELLED FLIGHT
Three depositions were scheduled, two on one day and one other on the
following day that were cancelled when Plaintiff’s flight to New York was cancelled
midway. Plaintiff’s counsel traveled from Cleveland to New York on a flight that
had a required stop in Philadelphia.

Id. at ¶17.

While in Philadelphia, at

approximately 11:45 PM that evening, Plaintiff’s counsel was informed that the
flight to New York was canceled. Id. at ¶18.
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The next flight to New York was the

following day at 2:30 PM. Id. at ¶19. The train from Philadelphia had stopped
running at that time and would not resume until 5:30 am the following morning.
Id. at ¶20. That train ride was approximately a two hour trip to New York followed
by a subway or cab ride from the train station to Mr. Southwell’s offices. Id. In
addition, the frequency of travel to New York, at Mr. Southwell’s request earlier in
the summer, had taken its toll on Plaintiff’s counsel and he became ill while resting
on seats at the gate in the Philadelphia airport waiting out the evening. Id. at ¶17.
Mr. Southwell was informed of this unexpected issue as soon as possible and
demanded that Plaintiff’s counsel, after sleeping in the terminal for a few hours, get
on a train to New York and conduct a full day of planned depositions anyhow. Id. at
¶21. Plaintiff’s counsel declined his demand. Id. at ¶22.
The court found it wholly appropriate that Plaintiff’s counsel should have
slept from 1:00 am to 5:00 am in the airport, take the 5:30 am train from
Philadelphia to New York, and then be prepared to conduct critical depositions
thereafter, all the while, Plaintiff’s counsel was ill, which was undisputed.

This

assertion of an available remedy ignores Plaintiff’s counsel’s condition he would
have been in at the start and throughout these depositions.
The depositions missed by that uncontrolled plane flight cancellation were
either re-scheduled or timely canceled.

Id.

Defendants’ have no reasonable

argument that either those postponements or cancellations were done in bad faith.
TIMELY CANCELLATIONS
As noted above, the parties agreement was sparse and negotiated by
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experienced lawyers. Id. at ¶3. Neither party obtained or sought any transfer of
risk regarding cancellations of depositions they noticed.

Defendants’ case law

centers on attorneys who cancel depositions, untimely, when they are the noticed
party responsible to present themselves and their witness for a deposition. That
scenario is an obvious opportunity for strategic and inappropriate cancellations
merely to harass or exhaust resources of the opposing party.

Universally, the

depositions cancelled for which Defendants in this case complain, were those that
the Plaintiff had noticed of Defendants’ witnesses. Again, there was no requirement
that either party take any depositions of the opposing witnesses. See above. There
is no reasonable argument that Plaintiff was cancelling depositions of Defendants’
experts in an attempt to exhaust the financial resources of the billionaire
Defendants. Such an argument is ludicrous.
DEFENDANTS DEMAND, BUT REFUSE TO MEET AND CONFER
Defendants made no authentic attempt to meet and Confer. Moreover, they
only began asserting their punitive expenses claim after their ambush attempt with
Mr. Lesnevich was serendipitously thwarted by Plaintiff’s timely cancellation of his
deposition.

Exhibit B.

Plaintiff had no need to depose a witness whose entire

expert analysis failed to determine the origin and integrity of the documents he
analyzed.

Mr. Argentieri’s declarations regarding the altered copies that Mr.

Lesnevich analyzed without inquiring as to their obviously not pristine nature,
destroyed entirely the usefulness of Lesnevich’s analysis and thereby his entire
report.

That left no reason to depose their uninformed expert.
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In addition, the

comparison of Lesnevich’s report of March 26, 2012 and his previous declaration
further exposed him as willing to say anything to fit the moment, ignorant of the
record he had created contradicting himself at every important turn.
Plaintiff’s counsel reached out to Defendants on two occasions since receiving
Defendants’ unreasonable demands in their motion in an attempt to reasonably
resolve this dispute consistent with the parties agreement on deposition related
expenses. Defendants showed no interest in holding reasonable discussions, other
than check the box that they had attempted to meet and confer.

First, Plaintiff

requested the details of what charges they were alleging were the responsibility of
Plaintiff.

Their initial demand letter offered very little detail on the specifics of

their demands. Second, Plaintiff offered to negotiate certain of the charges, while
not waiving the right of refusal, so long as Defendants acknowledged that others
were not Plaintiff’s responsibility. Exhibit C to Plaintiff’s response to Defendants’
request for attorneys fees. Defendants ignored that correspondence and filed this
motion with the court. It represents no real interest in meeting and conferring.
These falsities of forum, only serve Defendants as they go through the
motions of motion practice. Their claims to meet and confer are formulaic with no
intent to resolve problems informally but involve the court to manufacture a paper
trail to bolster their obviously unsuccessful dismissal evidence and strategy.
ADDING PHANTOM TERMS TO THE PARTIES’ AGREEMENT
Defendants were provided nearly $100,000 in costs and expenses, the bulk of
which are for expenses and costs that were never agreed to or even discussed as
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part of the parties agreement as noted above. Neither party saw fit to shift the risk
of costs for witness preparation to the other party. Decl. of Dean Boland at ¶5-6.
Neither sought to shift the risk of attorney preparation time spent with our
respective witnesses to the other party. Id. Neither party sought to shift the risk of
cancellation to the party cancelling a deposition they had notice of the other party’s
expert. Id. at ¶14. Neither party sought to impose “cancellation fees” on the other
party in addition to the actual deposition fee that Defendants now seek from
Plaintiff for depositions that never occurred. Id.
The court has adopted Defendants’ obvious attempt to crush a financially
weaker opponent.
THE WINDFALL EFFECT
Each of the cancellations at issue occurred with more than sufficient time for
the respective witnesses to return, by air or land, to their offices and be ready to
work on the day that their now cancelled deposition was to take place. The obvious
import of this is that Defendants and their experts have now received a windfall for
their experts and themselves. Those experts easily returned to their offices and on
their now cancelled deposition day, were able to earn a full days income from their
work while simultaneously seeking their full deposition fee for a deposition that
never occurred.

Meaning, had the deposition occurred, even a one question

deposition that Plaintiff concluded, Defendants’ unreasonable fee motion would
have evaporated.
DEFENDANTS INFINITELY FLEXIBLE DEFINITION OF “REASONABLE”
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The parties’ agreement only called for the payment of reasonable deposition
fees and reasonable travel expenses. It did not contemplate the payment of any and
all travel expenses and deposition fees regardless of the demanded fee.

Gus

Lesnevich’s scheduled half-day deposition for a fee of $6,400 equates to $1,829 per
hour. It is no wonder Defendants failed to find case law support for that being a
reasonable fee. Lesnevich refused to provide an hourly rate so that Plaintiff could
ask him the most basic of questions about his report. Defendants’ expert Gerald
McManemin demanded $5,000 ($1,429 per hour) to be deposed for one half day and
was also unwilling to provide an hourly rate.

Defendants’ computer expert Eric

Friedberg, demanded $975 per hour.
Plaintiff agreed to hold all depositions in New York City, rather than in
Cleveland as a concession to Defendants’ counsel and Defendants experts.
Defendants’ counsel did not have to travel for any of the depositions.

The court

ignored this professional courtesy especially when Plaintiff compromised and
agreed to do all of the travel and have all of the burden associated therewith.
DOUBLE BILLINGS
The court not only ordered that Plaintiff pay for expert depositions that were
timely postponed or cancelled, but he has been ordered now to pay for some
depositions twice. This amounts to a windfall for Defendants’ experts.
THE ILLOGIC OF DEFENDANTS’ ARGUMENT
Essentially, Defendants’ argument to the Magistrate Judge is that Plaintiff’s
failure to conduct depositions of Defendants’ witnesses ought to be met with a
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punishment that is 75% or more of the cost of actually conducting them. According
to the Defendants’ argument, had Plaintiff simply conducted all of the cancelled
depositions and asked one question and then concluded them, Defendants’ entire
argument for punitive expenses and fees would evaporate.

The court will notice

that with one exception Defendants are not asking for witness or attorney
preparation time expenses for depositions that were actually conducted.

This

acknowledges the parties’ agreement did not include those expenses be borne by the
deposing party even with the well known possibility of a cancellation of a
deposition.
DEFENDANTS’ PATTERN AND PRACTICE OF ONLY PAYING FOR
ACTUAL DEPOSITION TIME
During Plaintiff’s expert Neil Broom’s deposition, it became apparent halfway
through the full day deposition, that Defendants’ repeatedly requested “fifteen
minute breaks” (lasting forty-five minutes on average) were going to require Mr.
Broom to stay at their offices for at least ten hours that day.

Plaintiff’s counsel

noted that the rules only entitled deposition of Mr. Broom for seven hours without
further permission of the court. F.R.Civ. P. 30(d)(1). Defendants’ countered that
the rule only contemplated the time actually in deposition. Decl. of Dean Boland
at ¶25-26. Meaning, Defendants felt it was appropriate to keep Plaintiff’s experts
at their offices for as long as they saw fit provided he was only on the record being
deposed for seven of those hours total. Id. Defendants continued with this practice
with witness Larry Stewart. Id. at ¶27-29. Their refusal to pay Mr. Stewart for any

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time other than that spent in deposition further underlines this point. Mr. Stewart
billed Defendants for nine hours of time they required him to be present at their
offices for his deposition. Id. Defendants refused to pay Mr. Stewart for one minute
beyond the seven hours he was actually in deposition. Id. Therefore, they reinforce
the practice started with witness Broom that only when a witness is being deposed
are they entitled to be paid for deposition time. Id.
Despite this repeated practice by Defendants, the court ordered Plaintiff pay
their experts despite them not being deposed at all.

Even if this court were

sympathetic to the notion that the expert had to sit at the Defendants’ offices for a
period of time on a given day of their deposition without being deposed, Defendants
forcefully refused to pay Plaintiff’s witnesses for any time spent at their offices
outside of actual deposition time. It’s duplicity defined. In Defendants’ world, none
of Plaintiff’s experts deserve to be paid for merely being at Defendants’ offices for a
noticed deposition, they only get paid for time actually spent in deposition.
Mr. Southwell for Defendants and Plaintiff’s counsel reached an agreement,
negotiated between two experience lawyers, which assessed what costs and risks
would be borne by each party. Declaration of Dean Boland.
CANCELLATIONS WERE ALL IN GOOD FAITH
As opposed to the grossly misrepresented case law referenced by Defendants,
Plaintiff’s few cancellations were in good faith.
Defendants argued that Edmonds v. Seavey, No. 08 Civ. 5646(HB) (JCF),
2009 WL 1285526, at * 3 (S.D.N.Y. May 5, 2009) supports their position that they
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should be awarded their costs. Edmonds does not support their position at all. In
Edmonds, the court awarded deposition costs and expenses not because of an
untimely cancellation, but only because the court found that in the unique
circumstances of that case, the cancellation could “only be construed as an attempt
to gain leverage with respect to unrelated discovery issues.” Id.
Defendants made no argument that that they were prejudiced by the
cancellations in any way.

The court found no prejudice based upon Defendants’

filings.
Rule 30(g) (1) of the Federal Rules of Civil Procedure provides:
If the party giving the notice of the taking of a deposition fails
to attend and proceed therewith and another party attends in person
or by attorney pursuant to the notice, the court may order the party
giving notice to pay to such other party the reasonable expenses
incurred by that party and the party's attorney, including
reasonable attorney's fees.
Plaintiff did not fail to attend any of the depositions in question.

Rather,

Plaintiff’s counsel gave timely notice to relieve Defendants’ experts of the burden of
deposition.
Defendants were not, as often happens in sanctionable deposition
cancellations, left sitting in the deposition room wondering when opposing counsel
and the witness were going to appear.

They were given ample notice for

cancellation and at no point were Defendants left languishing warranting an award
under Rule 30 (g). Defendants’ did not argue, nor did the court find reliant on any
of their arguments, the essential elements under Rule 30(g).

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THREE OF THE CANCELLATIONS WERE DUE TO WEATHER AND
ILLNESS
Plaintiff was forced to postpone, but not cancel, the depositions of Dr. Lyter,
Mr. Tytell and Dr. McManemin because Plaintiff’s counsel’s flights were cancelled
and because he subsequently became ill as a result of the travel strain.

These

circumstances beyond Plaintiff’s control caused the cancellation of three of the
depositions.

As soon as those plane flights were cancelled and no other way to

reasonably attend the day and a half of deposition existed, Plaintiff’s counsel
immediately contacted Defendants’ counsel by email.
It appears that both of the attorneys representing plaintiff in
this lawsuit became ill during the week of January 14, and that they
notified defendant's counsel by the afternoon or evening of January
15 that they could not appear for the deposition the next day.
(Affidavit of Malik Cutlar, Esq., sworn to Apr. 3, 1997, at ¶¶ 14–24;
Affidavit of Andrew J. Entwhistle, Esq., sworn to Mar. 17, 1997, at ¶¶
8–9 and Ex. F). That notice was undoubtedly sufficient to permit
defendant's attorney to cancel the reporter's appearance, and thus
avoid incurring any expense. Moreover, the proffered excuse was
surely sufficient to justify postponing the deposition, particularly in
the absence of any demonstrated prejudice. Attorneys in this court
routinely extend, and are expected to extend, common courtesies to
their adversaries; whatever the frustrations of litigation—and they
should not be underestimated—counsel must not lose sight of the
fact that they are professionals acting in accordance with certain
accepted standards, and not gladiators fighting for their lives.
Tomlinson v. St. Paul Reinsurance Management Corp. 1998 WL 65996.
Two of the depositions (Dr. Lyter and Dr. Tytell) that were affected by
Plaintiff’s counsel’s cancelled flight and subsequent illness were rescheduled and
taken by telephone.

While those depositions were being re-scheduled, Plaintiff’s

counsel questioned the reasonableness of Mr. McMenamin’s fee for his scheduled

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half-day deposition.

The deposition of Dr. McManemin was never rescheduled

because despite numerous attempts by the Plaintiff to discuss the matter with
Defendants, Defendants refused to provide an hourly rate for the witness. Exhibit
A. Dr. McManemin sought a five thousand dollar fee for a half day deposition, i.e.
3.5 hours. Once timely cancelled, Mr. McManemin now seeks a windfall additional
“cancellation fee” of five thousand dollars more. Finally, he was likely sitting in his
office on the day of his cancelled deposition earning even more income.

This

inappropriate gouging should be rejected by the court.
REMAINING CANCELLATIONS HAD SUFFICIENT NOTICE
Other than the short notice given for the flight cancelled due to
thunderstorms and the subsequent illness, Plaintiff provided timely notice of any
other deposition cancellations. See Declaration of Dean Boland.
“Thus it appears that plaintiff was provided oral notice of cancellation at
least two days prior to the deposition. I do not find that this constitutes insufficient
notice of cancellation warranting the award of attorneys' fees and costs.” Donini
Intern., S.P.A. v. Satec (U.S.A.) LLC 2006 WL 695546 at *8.
The eventual cancellation of Defendants’ expert Mr. Friedberg (Stroz
Friedberg) and Novak’s depositions were reasonable. Stroz Friedberg’s offices are
in New York and Defendants’ counsel, Mr. Southwell, specifically sought to have
those experts’ depositions in New York, as opposed to Cleveland where they were
noticed, to minimize Defendants’ travel expenses and related logistics. At no time
was Plaintiff’s counsel informed that some of the Stroz witnesses did not live in
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New York during those conversations that resulted in Plaintiff’s counsel
compromising to fly to New York for those depositions.

Now, as is obvious, that

compromise for Defendants’ counsel’s benefit has been returned to Plaintiff as
Defendants’ naked attempt to financially harm Plaintiff as a litigation tactic. Even
had Mr. Novak had to fly to New York, he surely, as a computer expert for Stroz,
could have continued to work from the secure environment of the main office of
Stroz,in New York City. He therefore could not have lost a days work as he was at
the main office of his employer.
PROPOSED PAYMENTS
The court erred in not adopting Plaintiff’s proposed payments for the timely
cancelled or re-scheduled depositions.
CONCLUSION
Based on the foregoing arguments, Plaintiff respectfully requests that the
Court overrule Magistrate Judge Foschio’s Order because it is contrary to law and
clearly erroneous.
Respectfully submitted,
/s/ Paul A. Argentieri
Paul A. Argentieri
188 Main Street
Hornell, NY 14843
607-324-3232 phone
607-324-6188
[e-mail]

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