Montgomery V Etreppid # 832 - 8/18 Show Cause Hearing Transcript

Case 3:06-cv-00056-PMP-VPC Document 832 Filed 09/03/08 Page 1 of 68
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UNITED STATES DISTRICT COURT

DISTRICT OF NEVADA
BEFORE THE HONORABLE PHILIP M. PRO, DISTRICT JUDGE AND
BEFORE THE HONORABLE VALERIE P. COOKE, MAGISTRATE JUDGE
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Dennis Montgomery, et al.,
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Plaintiff,
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ETreppid Technologies,
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Defendant.
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No. 3:06-cv-056-PMP-VPC
August 18, 2008
United States District Court
400 S. Virginia Street
Reno, Nevada 89501
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TRANSCRIPT OF CASE MANAGEMENT CONFERENCE
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A P P E A R A N C E S:
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FOR THE PLAINTIFF:
Ellyn Garofalo
Randall Sunshine
Mark Gunderson
Attorneys at Law
FOR DEFENDANT ETREPPID:
Stephen Peek
Jerry Snyder
Attorneys at Law
FOR COUNTER-DEFENDANT:
Robert Rohde
Gregory Schwartz
Rolan Tellis
Bridgett Robb-Peck
Attorneys at Law
FOR INTERESTED PARTY:
Carlotta Wells
U.S. Department of Justice
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KATHRYN M. FRENCH, RPR, CCR

(775) 786-5584

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Proceedings recorded by mechanical stenography produced by

computer-aided transcript
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Reported by:

NEVADA LICENSE NO. 392
CALIFORNIA LICENSE NO. 8536
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Reno, Nevada, Monday, August 18, 2008, 10:00 a.m.
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JUDGE COOKE:
Please be seated.
JUDGE PRO:
Please be seated.
THE CLERK:
This is the date and time
set for a Case Management Conference in case number
3:06-cv-056-PMP-VPC, Dennis Montgomery, and others, versus
eTreppid Technologies, and others.
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Present on behalf of plaintiff, Ellyn Garofalo,

Randall Sunshine, and Mark Gunderson.
Present on behalf of defendant, Stephen Peek and
Jerry Snyder.
Present on behalf of counter-defendant,
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Robert Rohde, Gregory Schwartz, Rolan Tellis and
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Bridgett Robb-Peck.
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Present on behalf of interested party,

Carlotta Wells.
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JUDGE PRO:
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And good morning, again, to all of you.
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Thank you very much, Miss Clerk.
Counsel, I know that you've had occasion to spend
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an awful lot of time before Judge Cooke.
And, occasionally,
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Judge Cooke and I have convened hearings together in this
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case, as I do from time to time in cases which are as complex,
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as this one is, with the magistrate judge who is presiding

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over so much of the case.
simply yeoman work in dealing with a host of discovery issues
and other issues that have arisen since the inception of this
case.
In this case, Judge Cooke has done
Recently, Judge Cooke and I were conferring,
discussing the case generally, and we came to a consensus
that it would be -- while I know Judge Cooke has regular
status conferences, it would be appropriate to convene a
Case Management Conference to address some issues that would
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enable us to, as judges, and you as, parties, to ultimately
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bring this case to resolution, if necessary in form of a
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trial.
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Now, these actions, of course, have been pending
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for, what, two-and-a-half years, roughly.
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were filed.
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parties extends back nearly a decade, or perhaps more than a
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decade.
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breakdown in the relationship occurring in late 2005, early
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2006, precipitated the filing of these now consolidated
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actions.
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I think since they
I realize the relationship between the original
I appreciate, as well, that the perhaps significant
And they have grown since then.

In the past two-and-a-half years, particularly
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in the past year-and-a-half, since there were resolution of
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certain underlying matters, there have been an awful lot of
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discovery disputes.
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them, frankly, not entirely understandable to me, between the
Some of them understandable; some of

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parties.
We have, of course, government counsel present.
specter of certain issues pertaining to the nature of some of
the records and information subject, otherwise, to discovery,
certainly has been a barrier, but an understandable and
important one, that has affected the progress of the case
and, undoubtedly, will continue to play a role.
The
But as Judge Cooke and I were discussing it, it
was clear to me that, at some point, we need to get this case
on track for a trial.
And I don't want to set trial dates
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precipitously.
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be moved because the parties are still embroiled in discovery,
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or there are other matters pending which make it impossible.
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And that's why Judge Cooke and I confer.
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I don't want to set trial dates that have to
Judge Cooke directed, at one of the hearings, that
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we have this conference, and that you all submit status
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reports or proposals, which have been filed by the parties,
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respectively, at documents 796, 797, and 799.
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us something to take a look at in terms of fashioning what,
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hopefully, would be realistic deadlines that we would expect
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the parties to comply with.
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And that gives
Now, you hear that a lot, I'm sure, from a lot
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of judges.
And everybody sets those deadlines with the
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expectations that things can happen that will make them
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change.
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deadlines that are set.
And, indeed, there can be events which will impact

But, I think it's going to be

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significant for everyone to try and get a trial date that we
can live with.
Judge Cooke and I are going to consider those and, perhaps,
things that might be added today, in assessing what needs to
be done in terms of setting such a trial.
You all have provided your proposals, and
One of the things that occurred to me though, as I
was reviewing, going back and looking at the now consolidated
cases, is the First Amended Complaints that the parties had
filed on behalf of the plaintiffs Montgomery, the ten claims
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for relief, I believe it was, set forth in there; First
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Amended Complaint on behalf of eTreppid, I believe it was
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seven claims for relief set forth.
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grown with counter-claims and new parties have been brought
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into the action since these actions were originally filed.
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Something that it occurs to me has not happened, and probably
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should have happened a long time ago, and that relates to, for
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lack of a better term, and I think as I was discussing with
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Judge Cooke, she came up with the term "first phase," the
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need to actually have the principal parties sit down for a
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deposition.
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And I know that that has
And I'm not talking about a deposition that somebody
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says, well, we can't go forward because we haven't finished
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document production.
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plaintiffs, eTreppid and Trepp, know what they meant when
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they filed their First Amended Complaints.
The plaintiffs, Montgomery; the
They understand

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what the factual support, as they understood it, for the
various claims contained in those respective First Amended
Complaints are or were.
productive to actually sit down, have each of them sit down
and be subjected to deposition; to testify, under oath, as to
what their claims are, how they morphed or changed perhaps,
but what they are, and what information they have that
supports them, even though it may not include some of the
exhaustive detail, in the form of documentation and other
And it seems to me, that it would be
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things that are still at issue between the parties.
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And so after consulting Judge Cooke, I've
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decided that it would be appropriate to order that a round
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of depositions take place by the 31st of October; between
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now and the 31st of October, in this order, I think, just
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to get it moving:
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to exceed -- and some of the parties suggested four days for
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deposition.
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you'll need it in all cases.
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Mr. Trepp; followed by Ms. Blixseth; followed by Mr. Sandoval,
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to allow for you all, and to allow for Judge Cooke and myself,
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as things go on, to have a better grasp of exactly what the
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claims are and what the basis for those claims are.
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Mr. Montgomery first, for a period not
That seemed pretty, pretty good.
I don't think
But Mr. Montgomery; followed by
I'm not going to sit here today and announce a trial
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date.
I want, and Judge Cooke may have some matters to add
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to what I have just said, and I want to allow her to chime

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in as well, and then hear from you all.
that I think would be helpful, to me, in assessing what needs
to be done with regard to this case, from the perspective
of the judge is going to have to try the case when all the
discovery disputes are resolved, and the person who is going
to have to address the case dispositive summary judgment
motions at the end of the day, or perhaps address other
matters that are important, maybe pertinent to settlement
if that's ever in the offing.
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But that's something
I remain, obviously, involved routinely with the
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case; particularly, when objections are filed to orders that
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Judge Cooke has been entering.
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with the day-to-day, hands-on experience with this case, as
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is exemplified by the numerous proceedings that are going
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to occur this week.
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Judge Cooke then will be addressing with you a host of
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matters today, and throughout the week.
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pleased that she's able to do that.
But, Judge Cooke is the person
We have a couple this morning.
And
And I'm very
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But, Judge Cooke with those preliminary thoughts,
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let me ask if you have something to add before we hear from
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counsel.
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JUDGE COOKE:
Thank you, Judge Pro.
I need the
microphone more than you do.
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What I did want to say is we had had a conference,
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as counsel and the parties are aware, with the Department of

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Justice lawyers this morning, and did indicate during that
conference the tentative plan that Judge Pro just announced
for these four depositions.
And those of you who have been present at the
continued Order to Show Cause hearing concerning discovery
disputes, recall, on June 24th, that there were exhibit
binders that were provided in anticipation of questions.
And it became apparent, quickly, to Department of Justice
lawyers, that there were items in those exhibit binders that
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were subject to the United States Protective Order.
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binders had to be turned in and so forth.
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was resolved.
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So, those
And then the matter
And I think I just should add that I don't think
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that there is occasion, that I've noticed, that anyone is
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overtly attempting to circumvent that order.
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there are a lot of documents.
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of Justice is keener to see issues that are implicated by the
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Protective Order.
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It's just that
And the eye of the Department
In any case, it is the Court's order, as a
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consequence of that, that ten business days prior to the
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deposition of the four persons who have been identified,
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counsel who are anticipating they will submit exhibits as
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part of that deposition, will submit them to the Department
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of Justice so that -- the purpose of that review is to avoid
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the proof of publication that could arise, otherwise, with

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having to take, in the middle of deposition, stop it, take
documents, go review them, talk with maybe clients back in
Washington, D.C. and so forth.
And I know that there may be concerns that counsel
for the parties have about your work product as it relates to
preparation for the deposition.
a U.S. Protective Order in place, and we have to attend to it.
And that seems, to Judge Pro and me, an expeditious and fair
way to approach the -- you just submit to the government.
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But the fact is that we have
We aren't suggesting that you have to exchange or
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submit your deposition exhibits to opposing counsel.
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you plan to use exhibits, the order is ten business days in
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advance, you will provide those exhibits to justice department
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lawyers.
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So that's all I have to add, Judge Pro, with respect

to that issue.
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But if
JUDGE PRO:
up on that.
Thank you, Judge Cooke, for picking
And that was something I neglected to mention.
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But, Judge Cooke is entirely correct.
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after meeting with Ms. Wells, I think that something that
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is essential to allow for the orderly progress of the
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depositions that we want to see conducted and completed --
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and we'll leave it to you all to figure out your schedules
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as to which of those weeks -- I was just looking over at the
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calendar.
We're at, what, the 18th of August.

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And
So, we got the

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months of September and October for the parties to accomplish
what amounts to four weeks, if necessary.
suggesting you'll need four days per, but you certainly
may in a couple of them.
scheduling, keep in mind that obligation that Judge Cooke has
just mentioned.
I'm not sure.
And I'm not
So when you're
Those are matters which I wanted to begin with.
Now I want to give counsel, Judge Cooke and I want to give
counsel an opportunity to address any other matters concerning
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scheduling.
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done with regularity, and I think the last time was on, as I
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recall, the minutes, July 15th or thereabouts.
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got a variety of matters she likes to track with you all.
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And I'm glad to be present to listen to her do that, and doubt
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that I'll have much to add on that.
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Judge Cooke is going to go through, as she has
I know she's
We'll then go into the Order to Show Cause hearing
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concerning the order which I entered, and which affirmed
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Judge Cooke's order concerning the discovery regarding Source
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Code material, which I also will participate in.
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Judge Cooke has a variety of other motions, which I know she's
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going to be dealing with you, whatever is left of the morning
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and the afternoon.
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And then
And I will not be participating in that.
But if counsel have anything to address beyond what
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you've already set forth in your status reports regarding case
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management, I would, Judge Cooke and I, would welcome hearing

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from you at this point.
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Why don't we begin with counsel for the Montgomery

parties, if they have anything to add.
MR. SUNSHINE:
Your Honor, Randy Sunshine.
have nothing to add, except that I share the Court's belief
that early depositions in the next couple of months is an
excellent idea.
the table quite quickly.
JUDGE PRO:
I believe that many issues can be brought to

And we welcome that.
They say even a broken clock is
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right twice a day.
So, once in a while, I come up with a
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good idea.
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she agreed with me, then I knew it must be a good idea.
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wouldn't have presumed to think that otherwise.
And after Judge Cooke and I discussed it, since
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Thank you, Mr. Sunshine.
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On behalf eTreppid or Mr. Trepp, Mr. Peek.
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MR. PEEK:
Thank you, Your Honor.
And I also
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welcome the opportunity to commence depositions, as the Court
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has ordered them to be conducted.
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remain concerned, about the lack of production of documents.
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For example, we still do not, yet today, have any e-mail
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correspondence which involved Blixseth, Montgomery, Sandoval
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or Atigeo representatives.
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certainly, with respect to the Confidentiality Agreement.
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I am concerned, and
I know it's the subject matter,
We, likewise, don't have complete productions as

well from Mr. Montgomery.
We do not yet have, to date, any

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documents that have been produced by either Sandoval, Atigeo,
Sandoval or Blixseth.
So, yes, I want to take the depositions.
I am
concerned, however, about proceeding with those depositions
wherein fact I have produced over 310,000 pages of documents,
I have a little less than that.
Sandoval or Blixseth.
drives from Mr. Montgomery.
contain what I would refer to as garbage in; garbage out.
I have nothing from Atigeo,
I certainly do have numerous hard

Most of which, Your Honor,
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And that will be the subject matter of the follow-up hearing
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today.
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JUDGE PRO:
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MR. PEEK:
Right.
So, I am concerned about meeting
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that deadline.
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would also like the opportunity, when I do start, to have at
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least some production, if not a complete production.
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don't have a complete production, the ability to come back and
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take those depositions once I do have complete productions.
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I would like the opportunity to start.
JUDGE PRO:
But I
And if I
Oh, and I'm not suggesting -- let me
pick up on that latter point.

I'm not suggesting that this is the only
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opportunities for deposition of the principal parties.
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if I knew then what I know now, in terms of this so-called
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first phase, it's something that, perhaps, I would have
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thought of a long time ago before there was perhaps the

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uneven production of documents that has taken place.
Nonetheless, I think it's an important step, and
a necessary step, to allow this case to move forward.
And
while I'm sure there will be a lot of documents and exhibits,
and that's why Judge Cooke so perceptively made sure you get
those screened with the Department, with the government
counsel before they're utilized, I really look at this as an
opportunity for the people to talk about, what on earth, took
place; what their agreements were; what their understandings
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were; who said what; who did what, at what time.
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thing that I think would remove a lot of the mysteries that
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at least confront me when I look at some of the paperwork
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that's coming across.
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And, you know, memories begin to fade.
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moving on.
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December 2005 was almost three years ago.
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necessary to get moving.
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And 1998 is now a decade ago.
But, you're right.
The kind of
Time is
And 2005 is almost,

I just think it's
These production issues -- and
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Judge Cooke has been -- you guys are presenting stacks of
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pleadings and papers.
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only case that Judge Cooke or I had to deal with, it would
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perhaps be a little simpler.
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lot of cases.
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Judge Cooke, and as quickly as I can get to the matters before
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me as well.
And I'm sorry, that if this was the
But, as you know, we've got a
And those are being ruled upon expeditiously by

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But, I appreciate your concerns.
But, nonetheless,
those depositions will have to go forward even without the --
whatever production has taken place up to that point.
What about on behalf of the other parties, Blixseth
and Sandoval?
behalf.
Do counsel have anything to add on their
MR. TELLIS:
Good morning, Your Honor.
My
name is, Rolan Tellis with the law firm of Bingham McCutchen.
I'm here on behalf of defendant, counter-defendant,
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Michael Sandoval.
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JUDGE PRO:
Great.
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MR. ROHDE:
Bob Rohde on behalf of Atigeo, Your
THE COURT:
Thanks, Bob Rohde, on behalf of
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Honor.
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Thank you Mr. Tellis.
Atigeo.
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MR. TELLIS:
Your Honor, I would like to address
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two issues; one, the deposition schedule, and just to comment
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on Mr. Peek's mention of Mr. Sandoval's production of
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documents, or lack thereof.
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On the depositions, Your Honor, Mr. Sandoval was

only recently added to this case in January.
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JUDGE PRO:
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MR. TELLIS:
Right.
As an individual defendant, we
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promptly moved to dismiss the claims against him, which was
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denied.

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JUDGE PRO:
MR. TELLIS:
Right.
And part of the argument
was
that the allegations were cryptic, at best, as to what
he had done.
misappropriated.
motion was denied.
The alleged that trade secrets had been

And given the notice pleading rules, the
Your Honor's rationale for setting the deposition
schedule, as least for this first phase, was predicated
on if these parties made claims, presumably they had some
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information as to what the claims are.
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Mr. Sandoval has made no claims in this case.
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He's only an individual defendant.
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going to convince Your Honor that this deposition shouldn't
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be taken.
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respectfully request that his deposition be taken past the
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October 31st cutoff because, in many instances, he may be
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learning about the claims against him, days before, when some
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of the depositions of the principal players are taken.
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And I don't believe I'm
I'm not advocating for that.
But I would
So, I don't believe that his deposition should not
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be taken.
He would like to have his say.
But, I don't
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believe it would be fair to him to have it on an expedited
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schedule, at least in this first phase, until we get a better
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understanding of what the claims are against him.
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mentioned, he's being sued in this case in his individual
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capacity.

(775) 786-5584
As I

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As to the documents, I just wanted the record to
reflect -- I don't want to interpret Mr. Peek's comments
as suggesting Mr. Sandoval has resisted the production of
documents in this case.
He's responded to the only written document request that
was propounded on him.
as to his response.
documents in his individual capacity.
corporate defendant in this case, to my knowledge, is
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He has made initial disclosures.
To my knowledge, there was no issue
It's very simple.
He possesses no
And Atigeo, the
producing documents.
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I just wanted to correct the record, should there
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be any suggestion that he was resisting production of
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documents.
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JUDGE PRO:
Right.
Let me say with regard to
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Mr. Sandoval, I appreciate Mr. Sandoval is not a plaintiff,
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and has not made a claim, counter-claims, has made no, to my
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knowledge, at least of yet, any such claims.
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put him, somewhat, in a different posture.
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And that does
I also appreciate that when allegations are made
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against him that he has misappropriated trade secrets, he
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would, he would benefit from knowing precisely what those
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trade secrets are, with a little more clarity, then perhaps
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he already has from the pleadings.
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That said, I think it goes back to my earlier

comment that if I could do it over, I suppose -- and I guess

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I wasn't even involved in the beginning -- but I would have
done it earlier with everybody, before they had the same
kinds of, perhaps, information -- though we did have people
making claims.
discussed it, thought that the order of the depositions should
go as I've mentioned they should be.
have an objection, when you all are scheduling, if you put a
week or two in between those of Blixseth and Sandoval, after
Montgomery and Trepp.
That's why I think Judge Cooke and I, when we
And I certainly don't
But I think that after those do go
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forward, you're going to have an awful lot more information
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on behalf of your client as to what the nature of the claims
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are against him or, in the case of Atigeo, against Atigeo.
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And so I appreciate your comments, but it doesn't
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persuade me to change, other than to acknowledge that I don't
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have a problem with a gap in between the first two and the
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second two.
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MR. TELLIS:
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MR. ROHDE:
Fair enough.
Thank you.
As to document production, Your
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Honor, Atigeo has been busy gathering documents since the
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requests were propounded.
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be producing them to counsel, and they will not adversely
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impact the Court's proposed deadlines.
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JUDGE PRO:
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We have given dates when we will
Great.
Thank you, Mr. Rohde.
appreciate it.
All right.
Anything else, Judge Cooke, on

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that matter?
JUDGE COOKE:
JUDGE PRO:
I don't think so.

Okay.
Well, appreciate that.
And as I said, Judge Cooke and I will be consulting.
And I think probably after this week's activities -- she's
going to be awfully busy with you this week -- but we will
be fashioning an order which will include a trial setting.
Let me ask generally, before I get to that, have
the parties explored the utilization of some form of ADR with
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regard to this case at all?
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ADR proposals that would take this off calendar or alter the
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dates.
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I'm not interested in soliciting
In kind of a assessing where we stand, is that
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something which the parties have considered?
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would be productive in your judgment.
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Something which
Counsel always say, well, sure, we're glad to talk
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settlement, judge.
And I don't want to send you down a
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rabbit hole on something like this.
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since I'm here and it's a good time to raise it -- that any
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of you think would really be productive?
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any -- I don't want you to disclose settlement discussions,
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but have you made any serious assessment of whether some form
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of ADR, either another magistrate judge -- and, I'd offer
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Judge Cooke could do it, but I don't want to do anything that
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would interfere with Judge Cooke's essential involvement in
But is this a case --
And have you made

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the case in addressing the discovery matters -- though, that
might also be the one that puts her in the posture of being
the one person on behalf of the Court that could effectively
do that -- or outside the Court, is that something which the
parties have considered?
MR. SUNSHINE:
JUDGE PRO:
MR. SUNSHINE:
Your Honor --
Mr. Sunshine.
this is a complicated case in many ways, my belief is that
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all civil cases should settle.
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is any different.
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relatively new to the case.

JUDGE PRO:
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MR. SUNSHINE:
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I don't think this case
I'm relatively, as Your Honor knows, I'm
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While
Right.
But I believe that an early ADR
of some kind could be very beneficial to this case.

Now, the only question I had in my mind is whether
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that should occur sometime shortly after the depositions that
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Your Honor just ordered, or even before, or both.
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On behalf of Mr. Montgomery and Ms. Blixseth, we
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welcome the suggestion, and we are open to any methods that
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Your Honor thinks would work, or that perhaps we could work
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out ourselves.
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JUDGE PRO:
All right.
Mr. Peek.
MR. PEEK:
Your Honor, I share Mr. Sunshine's

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observations as well.
something that should be done before or after deposition.
instinct is it will be better served after the depositions are
conducted as opposed to before.
that.
Like Mr. Sunshine, I'm not sure if it's

My
But, certainly, I'm open to
With respect to it being a magistrate, I would
welcome to have Magistrate Judge Cooke sit as the settlement
judge.
that this would be a case that would take at least two, if
I know that her time is very limited.
And I suspect
10
not more days for a settlement conference.
11
whether Magistrate Judge Cooke has that much time on her
12
calendar, because, as I know, she has a very busy calendar.
13
But I think she would be the best suited, respectfully, to
14
conduct that type of settlement proceeding; particularly, if
15
we go before the depositions.
16
JUDGE PRO:
I don't know
And I agree completely agree with
17
that latter sentiment.
18
her.
19
she would be the one who would decide how that would go.
Whatever we do, I would consult with Judge Cooke, and
20
21
22
I just don't want to impose that on
MR. PEEK:
Yeah, I didn't want to perempt her
schedule.
JUDGE COOKE:
No, I'll just say for everyone's
23
edification, I'd be very pleased to preside over a settlement
24
conference, if the parties are amenable to that.
25
that, just an observation I have, having conducted lots of

(775) 786-5584
And I think

22
settlement conferences, one of the problems that I foresee
could happen if you -- we don't generally go to different
magistrate judges.
usually, within our district, the magistrate judge assigned
to the case is who presides over the settlement.
the other observation I'll make, with regard to private
settlement, you might go ahead and pursue that.
said, discussions are had, and then trouble comes, and you
may want a further settlement conference or it, frankly, gums
Occasionally, that will happen.
It's
But
Things are
10
up the works with respect to the litigation, and I'm not privy
11
to what happened.
12
occurred prior in that settlement.
13
And I don't understand the dynamics that
And, of course, the other benefit is, obviously, I'm
14
familiar with the case.
15
free to pursue private ADR, if that's what you want to do.
16
It's just a concern I have is I've seen that settlement can
17
sometimes just go south.
18
can't be fixed.
19
not.
Then people come to the Court and it
And a case that might otherwise settled, does
So --
20
21
But counsel, of course, are always
JUDGE PRO:
Do other counsel have anything else
to add?
22
(No response.)
23
JUDGE PRO:
All right.
Well, let Judge Cooke
24
and I confer with that.
I agree with her expressions
25
completely that, number one, she's in the best position to

(775) 786-5584

23
conduct the settlement conference.
the pitfalls of outside settlement efforts, though they can
be very productive, I realize, but if there is a problem, it
can be very difficult for the magistrate judge who's been
presiding over the matters, to capture the same sense as to
what had occurred.
And, number 2, one of
But I'll tell you what, why don't we impose upon
counsel the burden of conferring and submitting, within ten
days of this date, your, or a proposal.
It doesn't have to
10
be -- if it can be joint, great.
11
proposals concerning potential ADR options, and just what you
12
think would be helpful.
13
here, but I think that would be useful to us in terms of then
14
assessing what could be set, and when, in terms of pursuing
15
that potential option the Court.
16
19
And you've kind of expressed that
Miss Clerk, what date is that?
17
18
If not, your individualized
THE CLERK:
Thursday, August 28th, 2008,
JUDGE PRO:
Submit it jointly.
Your Honor.
It can contain
20
separate points of view, but I think it would be helpful to
21
have it jointly submitted.
22
All right.
Well, if there's nothing further on the
23
status conferences, I think we should move on to the other
24
subject that Judge Cooke and I had also conferred on, and
25
agreed should result in the issuance of an order.

(775) 786-5584
Am I --

24
Did you have something else?
JUDGE COOKE:
MR. PEEK:
No.
Your Honor, I know you haven't done
that, but there certainly were dates set forth with respect to
discovery cutoffs and expert disclosures and things of that
nature.
JUDGE PRO:
MR. PEEK:
So when you say status conference,
are we moving to the Order To Show Cause, Your Honor?
10
11
Right.
JUDGE PRO:
Yes.
I'm sorry.
Moving to the
Order to Show Cause.
12
MR. PEEK:
I was really trying to finalize, if
13
we could the Case Management, so that we know -- or is the
14
Court just going to issue its own standard order?
15
JUDGE PRO:
Oh, we'll take what you submitted
16
and confer on it and issue it, I think would be -- did you
17
have something to --
18
(Judge Pro and Judge Cooke confer.)
19
JUDGE PRO:
20
No, on the deadlines, particularly on the trial
I'm sorry.
I got ahead of myself.
21
date, I've got the benefit now of what you all had filed on
22
the last, the 12th, last week, I think it was.
23
24
25
MR. PEEK:
Yes.
And more particularly -- sorry, Your
Honor.
JUDGE PRO:
And so I've got to look at my trial

(775) 786-5584

25
calendar and --
MR. PEEK:
One of the things that concerned
me more particularly, Your Honor, is that I had put forward,
at least in my Case Management Report, that we propose to
amend our pleadings to add claims of defamation against
Ms. Blixseth, and may well add aiding and abetting,
conspiracy type claims against Sandoval, Atigeo and Opspring
with respect to those, as well as a defamation claim against
Mr. Montgomery.
10
11
Those are very critical, at least to our
proceedings.
And as we have gone through the discovery process
12
and learned more and more about the so called Glogauer and
13
Jale Trepp e-mails that were reported in both the Wall Street
14
Journal, on two occasions, and then NBC News on one occasion,
15
and then trying to get to the bottom of those e-mails -- and
16
we're still not there -- it certainly has become evident to,
17
at least the eTreppid and Trepp parties, more particularly,
18
and to Warren Trepp, individually, that there are claims of
19
defamation, per se, as well as conspiracy, and aiding and
20
abetting, and filing of false police reports, if you will,
21
or reports with government authorities of crimes that have
22
been committed.
23
24
25
There are --
JUDGE PRO:
Refresh my recollection.
When did
you propose to file?

MR. PEEK:
Well, that's what I thought we were

(775) 786-5584

26
going to discuss here.
within the next two weeks, we can do that.
If you want to give me a deadline
JUDGE COOKE:
Well, let me just back up a
minute.
And I just reminded Judge Pro what our procedure in
numbering, kind of, stages we're going into today.
ahead,
I think, if this --
JUDGE PRO:
JUDGE COOKE:
We'll go
Yeah.
-- is fine with you, judge.
We'll
go ahead and take up some matters in the Case Management
10
Report.
11
just raised.
12
part of this morning going through the July 15th case status
13
report.
14
as I've been doing in the past few months.
15
a template for discussions today.
16
conjunction with that, have reviewed your Case Management
17
Reports that all counsel have filed and submitted to the
18
Court.
19
And that includes, Mr. Peek, the issues that you

And so what we're going to do is spend the next
There are some matters that I want to follow-up on,

I use that as
And, also, of course, in
And in the context of those discussions, I think we
20
can address, at least preliminarily, some of these issues.
21
So, I think --
22
JUDGE PRO:
Let's do that.
I got -- when you
23
rose and raised that issue, I wasn't familiar with it from the
24
Joint Status Report.
25
has routinely been going through with you.
This was something else that Judge Cooke

(775) 786-5584

27
JUDGE COOKE:
JUDGE PRO:
Right.
I indicated my preference would be
to let her continue with that.
forward to the Order to Show Cause, but we'll do that after
Judge Cooke has a chance to go through the status conference.
And I'll just listen in while that occurs.
MR. PEEK:
JUDGE COOKE:
All right.
And I thought we'd simply move

All right.
So the order is we're now going to turn
10
to the Case Management Conference.
11
indicated, deal with the Order to Show Cause with respect
12
to the Source Code order.
13
outstanding discovery motions; Motion to Compel by the
14
Montgomery parties concerning business records, and then a
15
Motion to Compel by Atigeo -- no, I'm sorry, it's Opspring,
16
concerning Warren Trepp's tax returns.
17
Then we will, as Judge Pro
Then there are, I believe, two
Judge Pro, for those two motions, will excuse
18
himself and go attend to other matters.
Because you may
19
well file an objection that you wish to take up if you're
20
dissatisfied with this Court's order, and so he'll excuse
21
himself for that.
22
And then, of course, after we take care of those
23
three segments of the work here today, then we'll commence
24
with the Order to Show Cause hearing concerning the May Order
25
to Show Cause in those proceedings.

(775) 786-5584

28
So, with that, why don't we go ahead and address the
case management.
is looking at the Minutes of docket number 760, of the July 16
status conference.
Sandoval's Case Management Report, dockets 796; eTreppid's
report, 797; and the Montgomery parties' report, 799.
And so what I'm doing, as I've indicated,
And I've also reviewed Atigeo and
And I have some questions.
First of all, turning
to page 2 of that Case Management Report, my first question
concerns -- Miss Clerk, for your information, item one is
10
11
production of compact disks by the Montgomery parties.

At that hearing, it was reported, Montgomery party's
12
counsel advised that with respect to production of CDs and
13
hard drives, that production is available for inspection.
14
Therefore, parties are to make necessary arrangements to
15
conduct this inspection.
16
And my question is, did that happen?
17
Mr. Peek.
18
MR. PEEK:
Your Honor, we have received from
19
the Montgomery parties approximately 21 hard drives that were
20
represented to be available for inspection and copying.
21
those 21 hard drives, 13 of them are currently unreadable.
22
Whether it was the manner in which they were sent, or the
23
manner in which they were copied, or the manner in which
24
they were sent.
25
of them, of the 21, are currently unreadable.
I don't know.
Of
What I do know is that 13

(775) 786-5584
We have let

29
Mr. Sunshine's office know that, and I assume that he will
make arrangements to have those recopied and packaged and
forwarded to us.
received that was discussed.
But, that's the only production that we have
JUDGE COOKE:
MR. PEEK:
What about CDs?
We have no more CDs, Your Honor.
We
have asked for, in correspondence -- and that will be one of
our exhibits today -- that what CDs do you have, and when will
they be copied and forwarded to us?
10
a response from Mr. Sunshine's office.
11
12
And we have not received
JUDGE COOKE:
All right.
Thank you, sir.
Mr. Sunshine.
13
MR. SUNSHINE:
Your Honor, my understanding
14
is -- well, first of all, with respect to the hard drives,
15
obviously, we are going to look into that problem.
16
have any specifics on why those 13 were unreadable.
17
office is looking into that right now.
18
the exact status of the CDs, whether or not there are any.
19
But my office, also, is looking into that as well.
20
JUDGE COOKE:
All right.
I don't
I'm -- my
And I am not aware of
So what I want then --
21
when were the -- Mr. Peek, when did you receive the 21 hard
22
drives, sir?
23
24
25
MR. PEEK:
We received them, Your Honor,
Friday -- Thursday?
Yeah, we received them Thursday, via overnight

(775) 786-5584

30
express.
be the --
Thursday, the -- looking at the calendar, that would
JUDGE COOKE:
MR. PEEK:
JUDGE COOKE:
August 7th?
August 14th.
Oh, excuse me.
August 14th.
So if they were available for inspection,
Mr. Sunshine, as reported on June 16, why is it August 14
before these hard drives, such as they are, I guess 13 are
unreadable, why was there this delay of about a month?
10
MR. SUNSHINE:
Your Honor, I can't answer that
11
from personal knowledge, because I was not personally involved
12
in the case during that period.
13
have been produced.
14
And I can also say that, to the extent there are any problems
15
with them, I've already told Mr. Peek informally, and I will
16
tell the Court now, that I personally am going to make sure
17
those problems are resolved quickly and expeditiously.
18
19
20
From personal knowledge, I can say that.
JUDGE COOKE:
resolved?
All I can say is that they
So when will those problems be
Give me a date, sir.

MR. SUNSHINE:
Today is the 18th.
Your Honor, because I don't
21
know how much work it will take to deal with that unreadable
22
problem, and because we're here all week, I would like at
23
least a week to get back to Mr. Peek about those.
24
JUDGE COOKE:
25
MR. SUNSHINE:
So you want until the 25th, sir?

I would appreciate that.

(775) 786-5584

31
1
2
MR. PEEK:
Is that to produce, or just to get
back to me?
MR. SUNSHINE:
JUDGE COOKE:
MR. SUNSHINE:
We'll get back -- well -That's my question, too, sir.

We will get back to -- because my
law firm and the people working on the case are here this
week, we will get back to him by the 25th.
will put things in motion while we're here to make sure that
we not only have an answer, but perhaps we have information to
10
11
12
13
And, hopefully, we
actually give him.

JUDGE COOKE:
Well, you, perhaps, might sense
some frustration that I have.

The representation made to the Court on July 16th
14
was these are available for inspection.
15
that, to me, says, gee, the week of July 16th, that week or
16
the following week, those will be produced to these folks.
17
And here I find out they don't get them until less than a
18
week before this hearing.
19
I greatly appreciate that you are new to this case -- but
20
this pattern is not new to this Court.
21
So, in my mind,
This has been, Mr. Sunshine -- and
And it's got to stop.
So, what I'm going to tell you is you work out,
22
readable, unreadable, you figure that out.
And I do
23
appreciate that you're here in court all week.
24
sympathize with that.
25
unreadable DVDs will be produced by Wednesday, August 27th.
And I
You are going to produce those, the 13

(775) 786-5584

32
MR. PEEK:
JUDGE COOKE:
Your Honor, they're hard drives.

Excuse me.
Hard drives.
Pardon
me.
The hard drives are to be produced by Wednesday,
August 27th.
here, can make a call and figure out what is going on with
that.
8
9
10
11
12
13
And I'm sure the technical people, the lawyers
Now, what about the CDs that were available for

inspection?
Do they exist or don't they?
And where are they
and what's going on with that?

MR. SUNSHINE:
We will have those produced by
the end of this week.

JUDGE COOKE:
All right.
Those will be, the
14
CDs will be produced, that were the subject of the June --
15
July 16th hearing, will be produced no later than Friday,
16
August 22nd, 2008.
17
18
All right.
Thank you.
MR. PEEK:
Your Honor, just a note on the hard
19
drives, at least that we have been able to open and read, is
20
that there are no PST files on any of those hard drives.
21
And as the Court knows, e-mails, in native format -- well,
22
actually, complete original e-mails in PST form, with all
23
native format information on them, have yet to be produced.
24
And there are none of those are on the CDs that we've read.
25
MR. SUNSHINE:
Your Honor, not to get in a

(775) 786-5584

33
debate at this point about rather mundane technical issues,
but my understanding, as represented to me, is that the Trepp
parties have produced no PST files themselves.
Now, what is good for the goose is good for the
gander.
that was called for.
have those produced shortly, as Your Honor ordered, as well
as determining what the problem is with the hard drive.
We've made a good faith effort to produce everything

I'm following up on the CDs, and will
JUDGE COOKE:
10
MR. PEEK:
Right.
All right.
Your Honor, I don't think
11
Mr. Sunshine has really made himself aware, but we have
12
produced, in native format, the e-mails with the complete PST
13
already.
14
has not even called it to my attention.
15
electronic copies of e-mails, PST files, in native format,
16
already to them.
17
18
JUDGE COOKE:
had.
We have produced
I thought you had.
I thought you
All right.
19
20
And if he has an issue with it, we have not -- he
Well, we know that this is -- I'm not -- we aren't

going to discuss this today, this issue right now.
21
I'm focusing on this.
So, the production of CDs is
22
going to be completed, and the hard drives as the Court has
23
ordered.
24
25
The next item, really nothing to report.
The
evidentiary hearing regarding the FBI search warrant return

(775) 786-5584

34
is set for September 5, 2008 at nine o'clock.
there's any issue there.
I don't think
Turning back, again, to docket 760, item 3, I don't
believe there are any outstanding issues with respect to that.
The Court had ordered on July, that no later than July 25,
2008, eTreppid's custodian of records file a declaration
attesting as to how documents were kept in the ordinary
course of business.
declarations, docket number 772 of Robert Powers; and docket
10
And I have filed, on July 25th, were two
773, of Sue Perez, in compliance with the Court's order.
11
Are there any -- has that matter been resolved, or
12
are there any other matters to take up, just with respect to
13
the declarations concerning how eTreppid's records were kept
14
in the ordinary course.
15
16
MR. SUNSHINE:
Your Honor, none that we're aware
of right now.
17
JUDGE COOKE:
18
All right.
Okay.
Very good.
Thank you, sir.
The next item was, let's see, there was
19
a problem -- the Montgomery parties requested that to the
20
extent documents were produced in the ordinary course, they
21
ought to provide, eTreppid ought to provide the Montgomery
22
parties with the bates number range to indicate which
23
documents are responsive to which document production
24
requests.
25
and try and figure out how they could do that.
The Court directed the parties to meet and confer

(775) 786-5584
And I think

35
the parties -- I was hopeful they could supplement responses
and agree on a protocol for that.
meet and confer on this issue no later than July 25.
4
5
And you were directed to
Has that matter been resolved?

MR. SUNSHINE:
Your Honor, the parties have done
a substantial amount of work in that regard.
there has been substantial compliance.
there are any other problems that we have, we believe we will
be able to work them out with Mr. Peek.
10
11
12
JUDGE COOKE:
We believe that
To the extent that
Very good.
Mr. Peek.
MR. PEEK:
Yes, Your Honor.
That is correct.
13
We have done electronic method of doing that.
14
we have not received -- sort of goose/gander -- we have not
15
received anything from the Montgomery parties that would give
16
bates range of what documents that they have produced, very
17
little, and how it responds to interrogatory requests.
18
19
20
JUDGE COOKE:
All right.
However, what
Well, let's just focus
on this production.
So, it sounds to me, Miss Clerk, that counsel have
21
undertaken and agreed upon a protocol for a bates number range
22
for eTreppid to identify those documents that are responsive
23
to specific requests for production of documents, and other
24
discovery by the Montgomery parties.
25
there are continued need do so, it appears that they'll be
And to the extent that

(775) 786-5584

36
1
2
able to resolve that without any further action by the Court.

The next item concerns, looking on the Case
Management Report, concerns the Montgomery parties' requests
for production, including a privilege log.
think that you anticipated, Mr. Snyder, you reported to the
Court how that was proceeding, and you -- and I recall at the
July hearing, the lawyers were a little unclear, not being the
technical experts about how that would be done.
9
10
Has that been created?
Are there any outstanding
with respect to privilege log.
11
12
And let's see, I
MR. SNYDER:
With respect the Montgomery party's
privilege log?
13
JUDGE COOKE:
14
MR. SNYDER:
Yes.
We, as we mentioned in our status
15
report, the privilege log which they provided, we believe, is
16
inadequate.
17
of a communication, and the participants and, in very vague
18
terms, the subject matter.
19
the e-mail.
20
In most cases, of course, we know who the players are.
21
in some cases, there's names that we just haven't seen.
22
know their position.
23
fully evaluate.
24
25
It lists the day of an e-mail string, or the date
But, we don't know the author of
We don't know the position of all the recipients.

But,
Don't
And so from that privilege log, we can't
JUDGE COOKE:
All right.
Well, I'm confused.
So thank you very much, Mr. Snyder.

(775) 786-5584

37
Let me clarify.
All right.
There was the
Montgomery parties' privilege log that was the subject of
that section of the Minute Order.
Montgomery parties -- Montgomery parties had filed a Motion
for Protective Order regarding a Common Interest Agreement.
That was docket 717.
prejudice, and said that the Court gave the Montgomery parties
leave to submit a privilege log as to the discreet group of
documents that the Montgomery parties were -- for which they
And then there was the
And I denied that motion without
10
were seeking this Protective Order.
11
the Montgomery parties would produce a version of that
12
privilege log to me by July 25th, 2008, in camera.
13
Ms. Klar had asked could that be -- she wanted to do that in
14
camera, because she thought that would give the Court -- she
15
would supply more detail in that privilege log.
16
And
I did receive a privilege log on July 25th from the
17
Montgomery parties.
18
maybe I'm wrong.
19
And so I directed that
And that's what I thought that was.
But,
So, that's the only privilege log I've received.
20
And then there is this other privilege log that the Montgomery
21
parties were supposed to produce.
22
talking about?
23
MR. SNYDER:
So, which one are you
I'm referring to -- they were
24
supposed to produce two versions, is my understanding.
25
for the Court, which contained more detailed information.

(775) 786-5584
One

38
JUDGE COOKE:
MR. SNYDER:
Right.
And one for eTreppid, which
would still comply with the Rule 26 obligations of a privilege
log.
JUDGE COOKE:
Right.
Maybe my misunderstanding,
and perhaps this is just my misunderstanding, is I thought
there were two different privilege logs.
was one for -- that was due.
reports concerning responses to Montgomery parties' request
It says:
I thought there
"ETreppid's counsel
10
for production of documents, including a privilege log, which
11
are due July 28th," and so forth.
12
So, that's what --
13
14
MR. SNYDER:
log --
15
JUDGE COOKE:
16
MR. SNYDER:
17
JUDGE COOKE:
MR. SNYDER:
24
25
Right.
That's all I'm asking.
Okay.
Sorry for that
misunderstanding.
22
23
-- and our document production,
I'm sorry --
20
21
Right.
that has been completed.
18
19
The eTreppid parties' privilege
JUDGE COOKE:
I know there is this other one.
So, your privilege log is completed, is that

correct, sir?
MR. SNYDER:
That's correct.

(775) 786-5584

39
JUDGE COOKE:
privilege log.
it done.
I don't know about that.
Is that correct, Mr. Sunshine.

MR. SUNSHINE:
JUDGE COOKE:
8
9
I'm just asking was
It was done.
And you may have problems with the
privilege log is completed.

All right.
Yes, Your Honor.

All right.
So eTreppid's
Thank you.
I'm just going to make a comment about
some of the items that we discussed in July were resolved.
10
And I'm certainly not going to rehash them.
11
just want to remark on.
12
that, just in passing, they were interested in maybe moving to
13
modify the existing Protective Order.
14
clear on the record that, in the Minutes of the Court, I
15
just indicated that that was something that was discussed.
16
I did not wish to give the impression that the Court had any
17
position one way or another on it.
18
track of what's going on in this case.
19
One, though, I
Montgomery parties' counsel advised
I just want to make
I'm simply trying to keep
So, I just didn't want there to be a misperception
20
that somehow by including the reference to that might be
21
something that the Montgomery parties want to do, that I was
22
agreeing that that was a good idea or disagreeing.
23
you're clear on that.
24
25
All right.
of the Minutes.
Let's see.
Just so
I'm turning, now, to page 6
Item 9, dispute regarding Opspring's requests

(775) 786-5584

40
for production of documents outputs.
an argument about, basically, as I understood it, Montgomery
parties requested production of documents concerning outputs.
Montgomery parties said we can't do that until we get the
Source Code.
6
7
And this -- there was
And I'm just noting -MR. PEEK:
You mean the eTreppid parties said
they couldn't do it.
JUDGE COOKE:
Yes.
I'm sorry.
Pardon me, sir.
And then I said, after a meet and confer, this
10
dispute is unresolved, Opspring has leave to file a motion to
11
compel.
12
the record.
13
do, I'll just hear it, I guess, at the September Discovery
14
Status Conference.
15
Opspring hasn't done that.
I'm just noting that for
I don't know if Opspring plans to.
But if you
But, I don't believe one has been filed.
Has one been filed?
16
MR. SUNSHINE:
17
JUDGE COOKE:
No, Your Honor.

All right.
18
deposition of Sue Perez.
19
She's the bookkeeper for eTreppid.
20
The next item,
The parties agreed to set a date.
Has that deposition been set, Mr. Peek?
21
MR. PEEK:
Your Honor, we have not been able to
22
agree on dates with everybody yet, but I think we're still
23
working towards that goal.
24
JUDGE COOKE:
25
about it.
All right.
So there's no dispute
You're just trying to get the calendars together,

(775) 786-5584

41
correct, sir?
MR. PEEK:
THE COURT:
MR. SUNSHINE:
JUDGE COOKE:
Yes, Your Honor.

All right.
Correct, Mr. --
That's correct, Your Honor.

Any other counsel wish to be
heard?
Please speak up.
I don't mean to ignore you over
there.
in many respects, to do with the Montgomery parties and
10
A lot of these issues, as you well know, have to do,
eTreppid.
11
MR. PEEK:
Your Honor, one of the issues on that
12
one though, by the way, is, again, and maybe that will be
13
addressed in the Case Management Order, as to the length of
14
depositions, and the number of depositions.
15
of the issues that we hadn't yet worked out with counsel for
16
Montgomery, Opspring and Blixseth, as to what the length of
17
that deposition was.
18
But that may get address if we know, pursuant to the Court's
19
scheduling order, how many depositions we're allowed to take,
20
the length of those, so we can begin to work through that
21
process.
22
23
24
25
So that was part
We couldn't get an agreement on that.
JUDGE COOKE:
All right.
Well, how long do you
need, Mr. Sunshine?

MR. SUNSHINE:
Well, Your Honor, in light of
this morning's pronouncement from the Court about the four

(775) 786-5584

42
depositions of the four principals, just throwing it out, it
may make sense, at this point, to delay Ms. Perez's deposition
until those take place.
I want to confirm about that.
and I can work out those scheduling issues with the parameters
that the Court set out.
I don't have a firm position on that.
JUDGE COOKE:
But, I believe that Mr. Peek
All right.
Well, why don't you do
this.
During the break, talk to one another.
It sounds like
it might make sense, to me, to do the four, since those have
10
been ordered, and then worry about Sue Perez's later.
11
other counsel and parties may wish to think about that.
12
we'll take that up at a recess and so forth.
13
All right.
So
This is the -- I think the next item is
14
item 11.
15
to, and the one that is of concern to the Court.
16
But,
This is the privilege log Mr. Snyder was referring
The Court, at that July hearing, denied without
17
prejudice the motion for Protective Order, and finds that the
18
parties, Montgomery parties hadn't met their initial burden to
19
establish an attorney/client privilege existed, which then --
20
actually, it's not a common interest privilege.
21
a waiver.
22
It's actually
Anyway, but the Court then, as I indicated in my
23
order, set out protocol where the parties, the Montgomery
24
parties were to deliver certain kind of privilege log, but a
25
more detailed in camera privilege log to the Court.

(775) 786-5584
And

43
Mr. Snyder has already mentioned and reported in eTreppids'
Case Management Report that the privilege log that he got is
wholly insufficient.
And I would like to see it.
And so I would like -- I want to see what yours is.
I have questions about the privilege log I got.
questions.
7
8
MR. PEEK:
Your Honor, you want that today,
right away?
JUDGE COOKE:
10
MR. PEEK:
11
JUDGE COOKE:
12
Yes, sir.
Let me -- we'll -At the recess, give it to my court
clerk or my law clerk.
13
MR. PEEK:
14
JUDGE COOKE:
Oh, we have it, Your Honor, here.

Okay.
15
I want to take a look at it.
16
I received.
17
18
You can just give it to me.
And I want to compare it to what
And, Miss Clerk, during the recess, you can just

make a copy of it and return it to Mr. Peek.
19
THE CLERK:
20
JUDGE COOKE:
21
MR. PEEK:
22
JUDGE COOKE:
23
to clerk.
24
take a look at that.
25
Some serious
That's fine.
I will, Your Honor.

All right.
Your Honor, may I approach the clerk?

Yeah.
Go ahead and just give it
And then, at a recess, she'll copy it.
MR. PEEK:
I want to
Could we have an extra copy for

(775) 786-5584

44
Mr. Sunshine as well?
JUDGE COOKE:
Certainly.
over here and, also, Ms. Wells.
Miss Clerk.
THE CLERK:
JUDGE COOKE:
10
So, however many that is,
I will.
All right.
So I'm going to deal
with that later on.
8
9
And, for everyone else
The Court already issued its order on Friday

concerning requests for production set two, request for
production number 26.
11
So, that's been disposed of.
So those are, I believe, just in reviewing the
12
laundry list of what was leftover from July that we've taken
13
care of, as I indicated, I'll deal with the privilege log
14
issue after we hear the Order to Show Cause.
15
anything only about the -- and I guess, Judge Pro, they want
16
to talk about this whole case management issue.
17
anything other, from the July 16 hearing that ought to be
18
discussed that has not, is there anything counsel wish to
19
raise that needed to be followed up on that has not?
20
MR. SUNSHINE:
21
MR. PEEK:
22
JUDGE COOKE:
23
MR. TELLIS:
24
JUDGE COOKE:
25
But if there is
So if there's
No, Your Honor.
No, Your Honor.

All right.
No, Your Honor.
Seeing heads shaking, that's good
news.

(775) 786-5584

45
All right.
I guess the next issue, Judge Pro, that
counsel are interested in discussing, is this whole issue of
case management and depositions and so on.
noticed, I note in Atigeo's and Sandoval's Case Management
Report, they had suggested, in 796, a new date for dates for
discovery and scheduling.
and I talked about this -- in 797, discussed some deposition
guidelines and so forth.
Judge Pro has another idea -- my thought is you've got the
10
11
I note eTreppid -- and Judge Pro
So with, I guess -- and perhaps
four depositions in October.

JUDGE PRO:
And, you know, I
Do you -- I'm not quite sure --
Well, let me suggest something that,
12
after sitting here and listening to Judge Cooke go through the
13
many discovery matters that she has been addressing, it seems
14
to me, we do have different protocols.
15
Montgomery parties' proposal, they cite the joint -- or, I'm
16
sorry, the Status Report -- they cite the earlier established
17
deadlines and suggest a two-month extension, I think it was
18
being reported.
19
Atigeo proposed in their Status Report.
20
When I look at the
That's pretty close to the time line that
As you said, Judge Cooke, the eTreppid parties had
21
some guidelines concerning length of depositions, number of
22
depositions and the like.
23
12th, as we ordered them to.
24
thinking out loud, whether it might be appropriate to have
25
them -- in light of they're all here this week, and they're
And they all filed those on the

But I wonder, and I'm just

(775) 786-5584

46
going to have plenty of opportunities to talk -- and we set a
deadline for ten days hence, I think it was, to submit their
proposal with regard to any alternative dispute resolution, if
we ought to have them confer and submit a joint proposal with
regard to discovery cutoff deadlines for the dispositive
motions and the like.
Do you see --
JUDGE COOKE:
Well, we tried that, with not a
lot of success, but I'm certainly open to and amenable to
that.
I know there's another, I think earlier submitted -- I
10
think it was prior to the June 16 Case Management Conference
11
we had, the parties submitted a Case Management Report.
12
13
14
And I have to get that.

here.
I'm not sure if I have it
It must be in my pile of papers.

Counsel, do you know what I'm talking about?
15
MR. SCHWARTZ:
16
JUDGE COOKE:
17
JUDGE PRO:
Yes, Your Honor.

All right.
Alternatively, we just let them air
18
their views on the depositions, number of depositions, length
19
of depositions and the like.
20
can certainly sit down and take those and fashion them.
21
I think getting your positions on the number of depositions,
22
length of depositions, is certainly appropriate.
23
MR. SUNSHINE:
We've got your submissions.
Your Honor, if I may.
We
But
I welcome
24
the suggestion to allow the parties to meet and confer on
25
all of these issues.
I -- whatever happened in the past, I

(775) 786-5584

47
believe, particularly in light of the setting of the four
depositions over the next couple of months, I believe that it
would be helpful to at least have the opportunity to see if
we can work out these other issues, including when we think
discovery cutoff should be, and the trial date.
know, the approximate time for the trial date.
try that and get back to you, that's my proposal.
JUDGE PRO:
MR. PEEK:
And, you
If we could
Mr. Peek.
Your Honor, I think that Mr. Sunshine
10
is correct.
Having looked at the submittal by Atigeo, I
11
think, certainly, I think that they have really set forth what
12
they think is reasonable and responsible --
13
JUDGE PRO:
They did.
14
MR. PEEK:
-- proposal.
They gave -I'd like to -- and I
15
think we can work through that.
16
however, before we leave, this week, to have at least that
17
conference with the Court, if the Court is available, the
18
magistrate judge is available, to make sure that we do get
19
that before everybody leaves and we, you know, run away.
20
we can try to work through that.
21
JUDGE COOKE:
22
JUDGE PRO:
Yes.
And I would like, though,
So,
That's a good idea.
That's a good idea.
Judge Cooke, of
23
course, is going to be here with you during much of the week.
24
And that would be great.
25
MR. PEEK:
So I will meet with

(775) 786-5584
Mr. Sunshine,

48
Mr. Rohde, and Mr. -- Rolan, I forgot your last name. I
apologize.
JUDGE PRO:
MR. PEEK:
to make sure we can work through that.
Tellis.
Tellis.
As well as the government,
The one issue that does come up to me is they're
only talking in each of the case management orders, or
proposals, about discovery cutoffs.
is missing in that is the Motion to Amend.
The one thing that

And I'm very
10
concerned about that, as far as the Trepp and eTreppid parties
11
are concerned, because I want to make sure that there's at
12
least a time.
13
motion within a certain period of time, I'm happy to do that,
14
because it's already pretty much drafted, but the time to add
15
parties, and to amend, has expired, as the Court knows.
16
yet, I want to make sure that there is one new one.
17
And if the Court says you need to file your
But,
And I don't -- although there won't be, there will
18
be one new party proposed to be added, and that's Blixware,
19
which is an entity owned by Edra Blixseth, that will be the
20
only new party.
21
added in there.
22
23
But, there will be proposed to be a new party
JUDGE PRO:
Okay.
Give me just a moment.
Yeah, I think unless Mr. Rohde or Mr. Tellis had
24
something to add to that, I think that -- Judge Cooke and I
25
have conferred -- and while, as Judge Cooke said it's been

(775) 786-5584

49
attempted before, things which can be jointly submitted, where
there is agreement, obviously, are much easier to receive on
the part of the Court, and much happier on the part of the
parties, because you're not just getting it arbitrary from the
Court, or if not arbitrary, at least less agreeable to you.
I'm not saying that we will adhere to everything
that you propose, but I think that since you're going to be
with Judge Cooke this week, this is an issue that Judge Cooke
has indicated she can revisit with you on Thursday.
10
So during your time when you're not actively arguing
11
before Judge Cooke on matters, I think conferring on these
12
deadlines, perhaps refining them somewhat, would be an
13
appropriate thing to do.
14
Judge Cooke this week.
15
And then you can finalize that with
JUDGE COOKE:
Right.
And then in addition to
16
the motion to amend the pleadings, or add parties, I noted
17
there should also be a rebuttal discovery deadline --
18
MR. PEEK:
I saw that, too.
19
JUDGE COOKE:
-- as well.
I think it was just
20
a typo, because you had 60 days in between.
21
needs to be included.
22
Thank you.
23
But that also
And just do try to work this out.
Are there any other items, before we turn to the
24
Order to Show Cause, which are setout in the parties -- I note
25
there were some discovery issues that the parties had talked

(775) 786-5584

50
about in your Case Management Reports and so forth.
there anything in those Case Management Reports that merit
discussion today, other than you reported to the Court there
are some issues that you're dealing with, but I guess I'll
just poll counsel.
But is
Mr. Sunshine, anything from you, sir.
MR. SUNSHINE:
JUDGE COOKE:
MR. PEEK:
No, Your Honor.

Mr. Peek.
No, Your Honor.
10
JUDGE COOKE:
11
MR. TELLIS:
12
JUDGE COOKE:
13
MR. ROHDE:
14
JUDGE COOKE:
15
JUDGE PRO:
Mr. Tellis?
No, Your Honor.
Mr. Rohde.
Nothing further, Your Honor.
All right.
Thank you.
We'll go on to the Order to Show
16
Cause, and this is order issued at document 645, Miss Clerk --
17
I'm sorry.
18
issued at Document 769 on July 24th, 2008.
19
It's not Document 645.
The Order to Show Cause is
Counsel, this is a matter which, obviously, as you
20
can probably tell, is of great concern to me.
21
just brought to my attention that Mr. Montgomery is not here.
22
It's been --
23
MR. SUNSHINE:
24
JUDGE COOKE:
25
JUDGE PRO:
And Judge Cooke
He is in the courthouse.
Well, could you go get him.
Yes.
We should have him here at the

(775) 786-5584

51
hearing.
MR. SUNSHINE:
THE COURT:
MS. ROBB-PECK:
We will do that.
Great.
Thank you, Mr. Sunshine.
Your Honor, when we were
switching before the hearing, I left my handbag over there.
And I am in fear that my cell phone is going to go off.
7
8
9
JUDGE PRO:
that to happen.
Go ahead.
Goodness.
We don't want
Thank you.
MR. PEEK:
It would be confiscated, Bridgett.
10
MS. ROBB-PECK:
11
JUDGE PRO:
Thank you.
And, thanks,
12
Judge Cooke, for pointing that out.
13
since I was at a hearing where Mr. Montgomery was present,
14
I don't think I would have recognized him.
15
16
17
Is he far away?
MR. SUNSHINE:
that was an hour ago.
He was right back there.
But
Right in the next room.
18
JUDGE PRO:
19
JUDGE COOKE:
20
MR. PEEK:
21
It had been so long
Okay.
I think he's --
Judge, may I step out and take a
short comfort break?
22
JUDGE COOKE:
23
JUDGE PRO:
Sure.
Why don't we take a five-minute
24
break and let everybody stay comfortable, and then we'll
25
reconvene as soon as Mr. Montgomery is retrieved.

(775) 786-5584

52
(RECESS TAKEN.)
THE CLERK:
Court is again in session.
JUDGE PRO:
Have a seat, counsel.
All right.
We are reconvened to take up the matter
concerning the Order to Show Cause, which was entered at
Document 769, on July 24th.
Counsel, this is one that, I'll tell you, surprises
me to no end.
I have issued two or three orders affirming
the ruling to the ruling made by Judge Cooke on May 29th.
10
It's styled "Order Regarding Source Code Discovery."
11
that order of May 29th has a lengthy history.
12
Judge Cooke's order at some length.
13
in these proceedings.
14
anyone, since the very action that has been consuming your
15
time, and ours, very actions, revolve around what it is
16
that's at issue with regard to the order regarding Source Code
17
Discovery.
18
But,
It's recited in
It's a matter of record
And it hardly comes as a revelation to
There are claims made of misappropriation, a
19
violation of trade secrets, breach of contract on, conversion,
20
on and on.
21
to explain and produce.
22
And it all comes back to somebody has to be able
Now, Judge Cooke's order of May 29th was, in my
23
view, a very well-reasoned and thorough order.
There were
24
objections taken to that.
25
There was the specter of a petition for Writ of Mandamus
There was a motion to stay.

(775) 786-5584

53
before the Circuit, which, you know, is all well and good from
the point of view from the Court.
file something, file it.
file it.
because you say you may file it, or you're thinking that you
are filing it, that you have fiat to disregard orders of the
Court.
8
9
If somebody is going to
Don't tell me that you're going to
Don't threaten to file it, and don't expect that
The last order that I had entered on the matter

was a very brief order denying further stay, and directing
10
that
11
Judge Cooke's order, which was then nearly two months old, and
12
they do so by the 23rd of July.
13
by the 23rd of July, the Montgomery parties comply with
Instead of compliance, what was received was a
14
notice by the Montgomery parties, filed July 23rd, at document
15
768, which is fairly brief.
16
Parties' Report Re: Compliance with the Court's May 29, 2008
17
Order Regarding Source Code Discovery."
18
19
20
It's styled:
"Montgomery
I'm not going to read through it again.
It says
one thing, which is very revealing, perhaps:

"The Montgomery parties respectfully submit that the
21
Court's Source Code order regarding the production of these
22
documents is in error," and then expresses the intention to
23
seek a Writ of Mandamus.
24
In essence, as you might expect, the way the judges
25
read that, that are sitting before you, is that, you know, we

(775) 786-5584

54
don't care what your order is, we disagree with it and, hence,
we're not going to comply with it.
received from you.
And that's really all we
So I don't think it should be a surprise to anyone
that that provoked the Order to Show Cause, which Judge Cooke
issued, after we had discussed the circumstance on July 24th,
at Document 769, which, again, chronicles the history and
procedural background, and directs that the Montgomery,
Mr. Montgomery and Ms. Klar show cause why they should not
10
be sanctioned in contempt for failure to comply with the
11
Court's order regarding Source Code discovery.
12
So that's what brings us now before the Court.
And
13
I realize we have several attorneys present, and some may
14
not have a position to take on the matter, but I think this
15
would be a good opportunity -- I don't know who's going to
16
handle this, Mr. Sunshine or co-counsel.
17
as to the response that you would have to that Order to Show
18
Cause.
19
MR. SUNSHINE:
Let me hear from you
Your Honor, I'm going to be
20
brief and very direct.
First of all, the chronology goes
21
one document further that Your Honor articulated.
22
is, we did file a supplemental report.
23
JUDGE PRO:
And that
The supplement indicating that
24
you've decided not, the Montgomery parties have decided not
25
to seek a Writ of Mandamus, and other matters that are

(775) 786-5584

55
addressed.
You're right.
MR. SUNSHINE:
In light of the supplemental
report, the supplemental report does state that we are going
to produce all of the Source Code.
Now, Mr. Peek is shaking his head -- I have good
peripheral vision.
Actually, I can represent to the Court
that the Montgomery parties will produce all Source Code in
their possession within three weeks of today's date.
we have the first wave of that Source Code.
In fact,
We just received
10
it today.
11
Source Code, and we plan on producing it within the next day
12
or so.
13
14
15
I am told that it is a significant amount of the
JUDGE PRO:
previously?
Now, why hasn't it been produced
I mean this is -- this is not new.

MR. SUNSHINE:
It's --
Your Honor, on the date that
16
we filed the first report, this law firm made its best
17
determination of what it could say based on the information
18
it had at that time.
19
that we were going to file a Ninth Circuit writ.
20
determined not to do that.
21
the Source Code, all of the Source Code, subject to the
22
current Protective Order.
23
this supplemental report and say further, that we can produce
24
all of that Source Code within three weeks, and will -- and
25
commit to doing that.
It believed, the law firm believed

We have
We have determined to produce
And I'm here today to buttress

(775) 786-5584

56
1
2
JUDGE PRO:
Three weeks from this date would
be -- let me just look at the calendar here -- by September 8.
Is that, do I understand you correctly?
MR. SUNSHINE:
That's correct, Your Honor.
believe that's right, Your Honor.
could be a few days earlier than that, and it may still be a
few days earlier than that, but for the fact that, again,
we're here for the bulk of this week.
And, frankly, it probably
I'm not going to make any excuses for what happened
10
in the past, or what has happened in the past.
11
I've already indicated, I'm new to this.
12
the Court that we're producing all the Source Code within
13
three weeks.
14
15
JUDGE PRO:
All right.
I'm here -- as
I'm representing to
Judge Cooke, I know you
have questions.
16
JUDGE COOKE:
I do.
17
First of all, the Order to Show Cause, the subject
18
of today's Order to Show Cause hearing is not the supplement
19
that was filed, I believe it was on the 11th, or thereabouts,
20
of August.
21
indicated that basically said you're wrong; we aren't going
22
to do what the Court has ordered.
23
a motion for protective order, and appoint a special master
24
and so on, which the Montgomery parties subsequently had,
25
that's what we're here -- that's the subject of the Order to
It was the -- the report, as Judge Pro has
Moreover, we plan to file

(775) 786-5584

57
Show Cause today.
And this is what really disturbs me --
apart from, I'll tell you, any judge reading this order would
have the same, I suspect, reaction that Judge Pro and I did
the morning that we conferred about what was filed by the
Montgomery parties -- but what really troubles me is that
since the inception of this litigation, first, Mr. Montgomery
had Mr. Flynn.
Liner firm comes in.
And then what -- what we're getting, as time passes, and
Then he and Mr. Flynn had a problem, so the

Then Ms. Klar and Ms. Pham are on board.
10
trouble comes, is different lawyers stepping in and coming in
11
to say, well, you know, we can't -- we're sorry.
12
turn the page and so forth.
13
where we are today.
We want to
But the fact is, that this is
14
We have an order that was issued by this Court.
15
And I have, utterly, no problem with any party objecting,
16
filing an objection and taking it up to Judge Pro.
17
everybody's right.
18
fine with me.
19
said in July, when Ms. Klar announced the intention to take
20
this matter up to the Circuit, that was fine.
21
do it.
22
we're going to do.
23
simply are not -- are going to just completely disregard this
24
Court's order.
25
That's
If you wish to do that, that's perfectly
And if you want to go to the Ninth Circuit -- I
Go ahead.
But,
Don't come into this court and, well, this is what

And, by the way, you are in error.
That is inexcusable.
That is inexcusable.

(775) 786-5584
And we
And

58
because this pattern that I'm seeing has recurred time and
again -- you know, I appreciate very much, Mr. Sunshine, your
statement here today about how the Montgomery parties and your
law firm intends to proceed.
you know, you file this supplement.
with the supplement.
But, the fact is -- and then,

And I've got problems
Again, I find it sort of breathtaking that -- let's
see, the supplemental order appears to me, appears to me, to
try to rewrite the request for production of documents that
10
were the source of this whole piece of discovery litigation,
11
number one.
12
really take too much time.
13
and so forth that would be necessary, or the hardware, I
14
don't know, to respond to some of these.
15
expensive.
16
do it.
17
can go ahead -- in other words, again, what you're telling me,
18
unless I'm missing something, is you aren't going to do it.
19
Mr. Montgomery is not going to do it.
And then we're told, well, this -- it's going to
It's outmoded.
And a lot of the computer software
Well, it's just too
So, we certainly aren't going to
And if eTreppid wants to incur the expense, why they
20
And then, then there's a statement that, in addition
21
to that, well, we're going to wait until, until 30 days
22
after the Court makes its determination on the motion for
23
appointment of a special master.
24
25
I am here to tell you that nobody is waiting

anymore.
This court has really reached the limits of its

(775) 786-5584

59
patience in terms of the Montgomery parties and counsel
dictating to this Court when its orders will be complied with,
and when it -- and, and continually -- this is another issue,
sir -- continually, well, no, we're now going to call the --
let's see, the requests for production, set one, numbers 3,
4, 6, 8, and 9, we're now calling that a new thing.
just kind of recasting that.
8
9
And we're
And the same with -- and then, you know, we've

heard a little bit at the Order to Show Cause hearing back in
10
June, by in steganography.
11
have determined in response to production one, numbers 18, 19,
12
and 20 and RFP Two, requests number 1, 2, and 3, that, well,
13
this is what we think complies with it.
14
And I guess the Montgomery parties
And, again, it just appears to the Court that
15
there's this pattern of we didn't get what we want.
16
Court's -- the Court was in error.
17
this tactic.
18
which, again, is fine -- decided to forgo that.
19
this report that said, you know, we're just not going to do
20
what you ordered.
21
says, well, you know, we're not doing this until this.
22
we're never going to produce this outmoded stuff -I mean, the
23
eTreppid -- I mean, this is unacceptable.
24
25
The
We're not happy.
We try
We threaten appealing to the Ninth Circuit -Then we filed
And then we've gotten this supplement that
JUDGE PRO:
And
Mr. Sunshine, when you say that
within three weeks you're going to be complying, Judge Cooke

(775) 786-5584

60
has just chronicled the supplement that was filed, the
contents of the supplement, and pointed out how that does
not comply with the order originally entered.
4
5
What is it that you're telling us and the parties

involved?
MR. SUNSHINE:
Your Honor, we're producing all
the Source Code called for by the requests, without a special
master, without -- under the current Protective Order, without
any other clarifications or modifications.
10
11
JUDGE PRO:
Everything called for in
Judge Cooke's order --
12
MR. SUNSHINE:
13
JUDGE PRO:
14
MR. SUNSHINE:
15
JUDGE PRO:
16
MR. SUNSHINE:
That's correct.
-- of May 29.
That's correct.
All right.
Well --
And, Your Honor, as I stated
17
earlier, we plan on commencing that production shortly.
18
waiting for the last -- the three weeks.
19
Source Code produced now.
20
21
JUDGE PRO:
a long period of time.
MR. SUNSHINE:
23
JUDGE PRO:
25
We want to get the
I'm sure you do now, and we have for
22
24
Not
I understand, Your Honor.
Anything else that you would have to
say then?
MR. SUNSHINE:
No, Your Honor.

(775) 786-5584

61
JUDGE PRO:
All right.
Well, in my view -- and
you can tell that Judge Cooke has a very solid grasp on the
entire history of these proceedings.
my view, extremely patient with Mr. Montgomery and those
representing Mr. Montgomery, recognizing, at every turn,
the difficulties that may be attended with regard to the
production, allowing the parties the time that they reasonably
indicated was necessary to accomplish certain tasks.
Mr. Peek pointed out earlier today, there has been significant
And she has been, in
But as
10
production by eTreppid.
11
relating to the Source Code, the discovery relating to the
12
Source Code, at every turn, Judge Cooke has been met with
13
barriers, with obstacles, objections -- which are fine, taken
14
to me -- motions for stay filed which, after they're rejected,
15
are still not complied with.
16
And with regard to the production
I don't think, again, I -- as Judge Cooke said, when
17
we read this notice or this report concerning production that
18
was filed on the 23rd of July, while we couldn't see each
19
other on the phone, I know we were both shaking our heads
20
because we simply didn't know what to make of this, other than
21
it was telling the Court to take a long walk off a short pier.
22
We're not complying.
23
I do appreciate, Mr. Sunshine, your representation
24
that the Montgomery parties are now ready to comply.
25
think it behooves your client, as well as those representing

(775) 786-5584

62
Mr. Montgomery to do so.
a minute, the failure to comply with the orders of the Court
that have previously been entered.
But I don't think it excuses, for
And one thing I did catch in that supplement, maybe
it was something Judge Cooke drew to my attention, the rolling
production idea.
out to comply with the order.
8
9
There's been plenty of time to roll things
And I have concluded that it is appropriate to

impose sanctions on the party, Mr. Montgomery, for the failure
10
to comply with the clear orders of the Court; the repeatedly
11
clear orders of this Court, from the date of the failure to
12
produce, starting on the 23rd, which was the deadline which
13
was required, until the production actually occurs.
14
I'm going to impose a monetary penalty.
15
considered, quite frankly -- and I suppose that's something
16
that would always be in the back of my mind if there were
17
future failures to comply with something so obviously clear
18
from the Court's orders, of case dispositive type sanctions.
19
But, I don't want to start with anything like that.
20
think it's appropriate.
21
merits.
22
can ensure that the case is resolved based on its merits, not
23
based upon some procedural default which may end the case,
24
which I don't think is satisfactory to anybody.
25
I had
I don't
I would rather try cases on their
And by complying with the Court's orders, the parties
I'm satisfied that the Court needs to, to make it

(775) 786-5584

63
clear to the parties in the future, that when orders of the
Court are entered, be they orders by Magistrate Judge Cooke
or myself, or a combination, after appropriate objections are
taken and ruled upon, that compliance is expected.
is going to be sought in the circuit, and a stay is granted
in the circuit, or a stay is granted by this court, fine.
But barring something like that -- we have a history in this
case.
allow the parties to pursue relief before me, and quite
10
11
If relief
Judge Cooke has granted stays on some matters to
appropriately, done so.

That did not occur here.
The time was July 23.
It
12
was not complied with.
13
a sanction, contempt sanction, monetarily, of $2,500 per day,
14
from July 23rd, through the date of the production, whenever
15
that occurs.
16
will save your client no small degree of resources.
17
And as a result, I'm going to impose
And if you can beat the 8th of September, that
I think that that's -- while that's not an
18
insignificant penalty, I think that's a fair penalty given
19
the failures of Montgomery, and those representing, to comply
20
with clear unambiguous orders of the Court that were final
21
for purposes of this litigation.
22
23
So, that will be the order.
Judge Cooke, did you have anything to add?

JUDGE COOKE:
The only clarification that
24
Montgomery parties might want is I don't -- and Mr. Sunshine
25
may be able to clarify.
As he indicated, as was indicated in

(775) 786-5584

64
the supplement, it was stated that there would be this
rolling production.
the sanction, as I understand it, would remain in place until
the production is complete --
I would just say that the production,
JUDGE PRO:
JUDGE COOKE:
JUDGE PRO:
JUDGE COOKE:
Absolutely.
-- in total.
Absolutely.
So roll, roll away.
Go ahead.
But to the extent the production is not complete, and perhaps
10
there -- in order to ensure that there, there is some kind
11
of declaration or certification by Mr. Montgomery and his
12
counsel that today is the day that we have completed
13
production, so that the parties, all of the parties, and
14
the Court, all understand what that day is, I think that
15
would be appropriate.
16
JUDGE PRO:
17
MR. SUNSHINE:
18
JUDGE PRO:
19
All right.
So understood, Your Honor.
Thank you.
Counsel, I know that I'll be seeing much of you in
20
the future.
I know Judge Cooke is going to be seeing much of
21
you this week, and even more in the immediate future.
22
today, I think I've seen some demonstration of cooperation
23
that I think has been at times absent.
24
it.
25
unless there is a resolution, I'm going to be spending a lot
And,
And I'm glad to see
I expect it to continue in the future.

(775) 786-5584
Ultimately,

65
of time with all of you as we try the case.
expect the same kind of cooperation from all of you as
professionals.
4
5
And I certainly
And I'm sure we'll receive it.
So, with that, Judge Cooke, unless you have anything

further.
JUDGE COOKE:
No.
What we'll, just to alert
counsel, what we'll do is I do want to take a look at the
privilege log that was provided to eTreppid and the other
parties.
I know copies have been made, and I want to take a
10
look at that.
11
briefly hear argument on.
12
by the Montgomery parties for sanctions; and an Order to Show
13
Cause with respect to the production of business documents by
14
eTreppid.
15
as, I think it is Opspring's Motion to Compel Production of
16
Mr. Trepp's Tax Return.
17
So, we'll take care of those three matters.

begin at 1:30.
19
hearing.
21
One is the Motion to Compel filed
So I expect to rule on that this afternoon, as well
18
20
And there are, also, two motions that I will
We'll
And then we'll start with the Show Cause
Are there any questions?

MR. PEEK:
There is a question, Your Honor.
22
would like fees and costs with respect to all of the efforts
23
and the oppositions and the work product that we've had to
24
expend in order to get the Source Code.
25
able to have that as a sanction as well, and submit to the
I would like to be

(775) 786-5584

66
1
2
3
4
Court our application for fees and costs.

JUDGE PRO:
I don't have any idea -- I don't
know, do you have a figure?

MR. PEEK:
I don't even know --
Your Honor, I don't.
But certainly
we can capture that in terms of every time we have sought
relief from the first motion, all the way through every
opposition that we've had to file, every pleading we've had
to address, whether it be a hearing, whether it be a request
for stay, whether it be an objection, whether it be, even most
10
recently, opposition to supplement.
11
costs every time that we've had to address the Source Code
12
issue with the Montgomery parties.
13
north of $50,000, Your Honor.
14
15
JUDGE PRO:
We've incurred fees and
It's probably somewhere
Well, the $2,500 a day is going to
be payable, ultimately, to eTreppid.
16
MR. PEEK:
17
JUDGE PRO:
I understand that.
I will allow you to submit a
18
declaration, a motion with a declaration that addresses the
19
efforts, the time, costs involved since Judge Cooke entered
20
her May 29th order forward, because that, as far as I'm
21
concerned, was the date where the parties knew what they
22
were confronting.
23
objections -- because there were objections, and Montgomery
24
is entitled to take objections -- I'm not suggesting to you
25
that I will -- how I will rule on that.
I'm not committing that with regard to
But at least from

(775) 786-5584

67
that point forward, I will consider your request.
something forthwith on that.
MR. PEEK:
JUDGE PRO:
JUDGE COOKE:

All right.
Thank you all.
Thank you.
6
7
But, submit
(Court Adjourned.)
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(775) 786-5584

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-o0o-
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I certify that the foregoing is a correct

transcript from the record of proceedings
in the above-entitled matter.
\s\ Kathryn M. French
August 29, 2008
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Official Reporter
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(775) 786-5584
DATE

Montgomery V Etreppid # 832 - 8/18 Show Cause Hearing Transcript

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Montgomery V Etreppid # 832 - 8/18 Show Cause Hearing Transcript

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Case 3:06-cv-00056-PMP-VPC Document 832 Filed 09/03/08 Page 1 of 68

UNITED STATES DISTRICT COURT

TRANSCRIPT OF CASE MANAGEMENT CONFERENCE

FOR THE PLAINTIFF:

FOR DEFENDANT ETREPPID:

FOR INTERESTED PARTY:

KATHRYN M. FRENCH, RPR, CCR

Case 3:06-cv-00056-PMP-VPC Document 832 Filed 09/03/08 Page 2 of 68

Proceedings recorded by mechanical stenography produced by

KATHRYN M. FRENCH, RPR, CCR

KATHRYN M. FRENCH, RPR, CCR

Case 3:06-cv-00056-PMP-VPC Document 832 Filed 09/03/08 Page 3 of 68

Reno, Nevada, Monday, August 18, 2008, 10:00 a.m.

This is the date and time

set for a Case Management Conference in case number

3:06-cv-056-PMP-VPC, Dennis Montgomery, and others, versus

eTreppid Technologies, and others.

Present on behalf of plaintiff, Ellyn Garofalo,

Robert Rohde, Gregory Schwartz, Rolan Tellis and

Present on behalf of interested party,

And good morning, again, to all of you.

Thank you very much, Miss Clerk.

Counsel, I know that you've had occasion to spend

an awful lot of time before Judge Cooke.

Judge Cooke and I have convened hearings together in this

case, as I do from time to time in cases which are as complex,

as this one is, with the magistrate judge who is presiding

KATHRYN M. FRENCH, RPR, CCR

Case 3:06-cv-00056-PMP-VPC Document 832 Filed 09/03/08 Page 4 of 68

over so much of the case.

simply yeoman work in dealing with a host of discovery issues

In this case, Judge Cooke has done

Recently, Judge Cooke and I were conferring,

discussing the case generally, and we came to a consensus

that it would be -- while I know Judge Cooke has regular

status conferences, it would be appropriate to convene a

Case Management Conference to address some issues that would

enable us to, as judges, and you as, parties, to ultimately

bring this case to resolution, if necessary in form of a

Now, these actions, of course, have been pending

for, what, two-and-a-half years, roughly.

parties extends back nearly a decade, or perhaps more than a

breakdown in the relationship occurring in late 2005, early

2006, precipitated the filing of these now consolidated

I think since they

I realize the relationship between the original

I appreciate, as well, that the perhaps significant

And they have grown since then.

in the past year-and-a-half, since there were resolution of

certain underlying matters, there have been an awful lot of

them, frankly, not entirely understandable to me, between the

Some of them understandable; some of

KATHRYN M. FRENCH, RPR, CCR

Case 3:06-cv-00056-PMP-VPC Document 832 Filed 09/03/08 Page 5 of 68

We have, of course, government counsel present.

specter of certain issues pertaining to the nature of some of

the records and information subject, otherwise, to discovery,

certainly has been a barrier, but an understandable and

important one, that has affected the progress of the case

and, undoubtedly, will continue to play a role.

But as Judge Cooke and I were discussing it, it

was clear to me that, at some point, we need to get this case

on track for a trial.