Case 3:06-cv-00056-PMP-VPC Document 815 Filed 08/18/08 Page 1 of 5

UNITED STATES DISTRICT COURT

DISTRICT OF NEVADA
RENO, NEVADA

DENNIS MONTGOMERY, et al.,

)
)
Plaintiff(s),
)
)
vs.
)
)
ETREPPID TECHNOLOGIES,
)
et al.,
)
)
Defendant(s).
)
______________________________)

3:06-CV-0056-PMP-VPC
MINUTES OF PROCEEDINGS

DATED: August 18, 2008

PRESENT: THE HONORABLE PHILIP M. PRO, U.S. DISTRICT JUDGE

PRESENT: THE HONORABLE VALERIE P. COOKE, U.S. MAGISTRATE JUDGE
Deputy Clerk:
Lisa Mann
Court Reporter:
Kathryn M. French
Counsel for Plaintiff(s): Randall Sunshine, Ellyn Garofalo, and Mark Gunderson
Counsel for Defendant(s): Stephen Peek and Jerry Snyder
Counsel for Counter Defendant(s): Robert Rohde, Gregory Schwartz, Roland Tellis, and Bridgett
Robb Peck
Counsel for Interested Party: Carlotta Wells
PROCEEDINGS: CASE MANAGEMENT CONFERENCE AND SHOW CAUSE HEARING
10:04 a.m. Court convenes.
The District Court addresses the parties regarding the purpose of this proceeding.
On August 12, 2008, Atigeo and Michael Sandoval filed their case management report
(#796), eTreppid Technologies, LLC and Warren Trepp filed their case management report (#797),
and the plaintiffs, Edra Blixseth, and OpSpring LLC filed their case management report (#799).
1.

First Phase Deposition Discovery:

A first phase of depositions shall include the depositions of Dennis Montgomery,
Warren Trepp, Edra Blixseth, and Michael Sandoval, in that order, and shall be taken
and completed no later than Friday, October 31, 2008. The parties shall have leave
to take a second round of depositions of these parties pursuant to further order of the
Court.

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Counsel who intent to submit exhibits at the depositions of the four persons
identified herein shall submit all exhibits ten (10) business days prior to a deposition
to counsel for the Department of Justice for review pursuant to the United States
protective order (#253).
2.

Settlement conference:
Counsel shall meet and confer and file a joint proposal concerning potential
Alternative Resolution Dispute options by no later than Friday, August 29, 2008.

The Magistrate Court advises the parties that it shall now discuss with counsel the directives
of the Court as ordered at the last discovery status conference held on July 15, 2008 (#760).
3.

Production of compact discs (CDs) by the Montgomery parties:

Mr. Peek advises the Court that he is in receipt of twenty-one hard drives, but that
thirteen of the twenty-one hard drives are unreadable, and no CDs have been
produced. Mr. Sunshine advises the Court that he will look into the problem
concerning the unreadable hard drives and correct the problem. With respect to CDs,
Mr. Sunshine reports that he is unaware of the status of any CDs. IT IS ORDERED
that Mr. Sunshine shall resolve the problem concerning the thirteen unreadable hard
drives and produce these hard drives by no later than Wednesday, August 27, 2008.
With respect to CDs which were the subject of the July 15, 2008 discovery status
conference, Mr. Sunshine shall produce these CDs by no later than Friday, August
29, 2008.

4.

The Montgomery parties request for a bates-number range and indication of

those eTreppid documents responsive to specific requests for production of
documents:
Counsel advise the Court they have undertaken and agreed upon a protocol for a
bates-number range for eTreppid to identify documents, which are responsive to
specific requests for production propounded by the Montgomery parties. To the
extent further issues arise, counsel advise they will resolve such issues without the
Courts intervention.

5.

Montgomery parties request for production including a privilege log:

eTreppids counsel advise the Court that eTreppids privilege log is completed.

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6.

Dispute regarding OpSprings request for production of documents: Outputs:

The Court notes for the record that at the July 15, 2008 discovery status conference,
the Court indicated that OpSpring has leave to file a motion to compel and to date no
such motion has been filed.

7.

Deposition of Sue Perez:

Counsel advises the Court they are still attempting to schedule this deposition.
However, in light of phase one depositions ordered by the Court today, Mr. Sunshine
suggests that the parties postpone Ms. Perezs deposition until after these depositions
are completed. The Court directs counsel to meet and confer during the break and
report back to the Court concerning this issue.

8.

Montgomery parties production of a privilege log to all counsel and an in

camera privilege log to the Court:
The Court requests a copy of the privilege log concerning the common interest
agreement that the Montgomery parties provided to counsel. Mr. Peek provides the
court clerk with a copy. The court clerk is directed to make copies for the court and
all counsel and advises counsel that it shall address this matter after the order to show
cause matter is addressed.

9.

Joint proposal regarding a discovery plan and scheduling order:

The District Court directs counsel to meet and confer during this week to refine their
proposed deadlines regarding a joint proposed discovery plan and scheduling order
including a rebuttal discovery deadline and a deadline to amend pleadings and add
parties. Thereafter, this joint proposal can be addressed and finalized by the
Magistrate Court later this week.

11:16 a.m. Court recesses.

11:30 a.m. Court reconvenes.
The District Court advises counsel that it shall now address the order to show cause issued
on July 24, 2008 (#769).
The District Court notes for the record that on May 29, 2008, the Magistrate Court entered
an order regarding source code discovery (#645) and recites the chronology of events which

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transpired thereafter, including the District Courts last order on this issue (#765) entered July 21,
2008, which denied the plaintiffs emergency motion for stay of order to produce source code and
directed plaintiffs to fully comply with Magistrate Judge Cookes order regarding source code
discovery (#645) and this Courts order (#728), no later than July 23, 2008. The District Court
further notes that rather than comply, the Montgomery parties filed a document entitled, The
Montgomery Parties Report Re Compliance with Courts May 29, 2008 Order Regarding Source
Code Discovery (#768), which precipitated the Magistrate Courts order to show cause issued on
July 24, 2008 (#769).
Mr. Sunshine advises the Court that the Montgomery parties filed a supplemental report
regarding source code production (#793) and represents to the Court that the Montgomery parties
will produce all source code it their possession by no later than Monday, September 8, 2008.
Having heard from counsel for the Montgomery parties, the District Court finds that it is
appropriate to impose a monetary penalty against Dennis Montgomery for his failure to comply with
the repeatedly clear orders of the District Court and Magistrate Court.
THEREFORE, IT IS ORDERED that a monetary contempt sanction is imposed against
Dennis Montgomery in the amount of two thousand five hundred dollars ($2,500.00) per day from
the date of the failure to comply, July 23, 2008, through the date the production actually occurs.
IT IS FURTHER ORDERED that this sanction shall remain in place until a declaration by
Dennis Montgomery and his counsel file a declaration with the Clerk of the Court certifying that the
source code production is complete.
The Magistrate Court advises the parties that it shall next address the following matters:
1)

The Montgomery parties privilege log provided to eTreppid and other counsel
concerning the common interest privilege;

2)

The Montgomery parties motion to compel and order to show cause with respect to
business records by eTreppid (#684); and

3)

OpSprings motion to compel production of Mr. Trepps tax return (#726).

Mr. Peek makes an oral request to submit an application for attorneys fees and costs for
eTreppids efforts to obtain source code discovery.
The District Court advises that the twenty-five hundred dollar a day sanction is payable
ultimately to eTreppid Technologies, LLC; however, the Court shall allow eTreppids counsel to file

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a motion and declaration that addresses the efforts made since Magistrate Judge Cookes May 29,
2008 order.
IT IS SO ORDERED.
11:57 a.m. Court adjourns.
LANCE S. WILSON, CLERK
By:
/s/
Lisa Mann, Deputy Clerk