Post on 07-Aug-2018
8/20/2019 Montgomery v eTreppid #833 | 8/18 OSC Hearing Transcript
1/150
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
KATHRYN M. FRENCH, RPR, CCR(775) 786-5584
1
UNITED STATES DISTRICT COURTDISTRICT OF NEVADA
BEFORE THE HONORABLE VALERIE P. COOKE, MAGISTRATE JUDGE---o0o---
DENNIS MONTGOMERY, ET AL.,
Plaintiff,
-vs-
ETREPPID TECHNOLOGIES,ET AL.,
Defendant.
::::::::::
No. 3:06-cv-056-PMP-VPC
August 18, 2008
United States District Court400 S. Virginia StreetReno, Nevada 89501
VOLUME I
:
TRANSCRIPT OF
CONTINUED SHOW CAUSE HEARING
A P P E A R A N C E S:
FOR THE PLAINTIFF: Randall Sunshine Ellyn Garofalo
Attorneys at Law
FOR DEFENDANT ETREPPID: Stephen Peek Jerry Snyder Attorneys at Law
FOR COUNTER-DEFENDANTS: Gregory Schwartz Bridgett Robb-Peck
Attorneys at Law
FOR INTERESTED PARTY: Carlotta Wells
Proceedings recorded by mechanical stenography produced bycomputer-aided transcript
Reported by: KATHRYN M. FRENCH, RPR, CCRNEVADA LICENSE NO. 392CALIFORNIA LICENSE NO. 8536
Case 3:06-cv-00056-PMP-VPC Document 833 Filed 09/03/08 Page 1 of 150
8/20/2019 Montgomery v eTreppid #833 | 8/18 OSC Hearing Transcript
2/150
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
KATHRYN M. FRENCH, RPR, CCR(775) 786-5584
2
Reno, Nevada, Monday, August 18, 2008, 1:30 p.m.
---OoO---
THE COURT: Please be seated.
THE CLERK: This is the date and time set
for a Motion and Continued Show Cause Hearing 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,
Randall Sunshine, and Mark Gunderson. Present on behalf of
defendants, Stephen Peek and Jerry Snyder.
Present on behalf of counter-defendant,
Gregory Schwartz and Bridgett Robb-Peck. Present on behalf
of interested party, Carlotta Wells.
THE COURT: Thank you very much.
All right. As I indicated before the lunch recess,
we do have just a few more items from the case management
perspective that I would like to take up.
First, there are two motions that have been fully
briefed. The first is the Montgomery parties' Motion to
Compel Compliance with the January 22nd, 2008 order, and order
to show cause why eTreppid should not be held in civil
contempt, docket 684. And then there are declarations 685
through 687. ETreppid opposed at 729. And the Montgomery
parties replied at 767.
Case 3:06-cv-00056-PMP-VPC Document 833 Filed 09/03/08 Page 2 of 150
8/20/2019 Montgomery v eTreppid #833 | 8/18 OSC Hearing Transcript
3/150
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
KATHRYN M. FRENCH, RPR, CCR(775) 786-5584
3
So I'll go ahead and briefly -- I'm interested.
I've read all of the papers the parties have filed, and so I'm
interested in any comments that counsel would like to make in
support of their positions.
So, Mr. Sunshine, is there anything you would like
to add, sir?
MS. GAROFALO: Your Honor --
THE COURT: Ms. Garofalo.
MS. GAROFALO: -- I have spoken to Mr. Peek
during the lunch break. We have now received a good number
of documents, purportedly, responsive to the books and
records inspection requests. We are having those reviewed.
It has been a voluminous task. I would not want to make
representations to the Court, or certainly to Mr. Peek, that
everything has not been produced, when we cannot definitively
identify documents, all the documents we have, the universe of
documents, and identify documents that we think are missing.
I would, therefore, ask that the Court continue this
motion until such time that we've had a chance to complete the
review. It may then be unnecessary to move forward with the
motion, and we would respectfully withdraw it.
THE COURT: All right. And how long -- and
Ms. -- how do you pronounce your name?
MS. GAROFALO: Garofalo.
THE COURT: Garofalo. Thank you very much,
Case 3:06-cv-00056-PMP-VPC Document 833 Filed 09/03/08 Page 3 of 150
8/20/2019 Montgomery v eTreppid #833 | 8/18 OSC Hearing Transcript
4/150
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
KATHRYN M. FRENCH, RPR, CCR(775) 786-5584
4
Miss Garofalo. How long do you think you're going to need to
undertake that review?
MS. GAROFALO: Well, we have experts looking
at it. There are, I believe, about 30 boxes of documents.
They're complicated. It is taking a while.
THE COURT: Right. That's fine. What I'm
interested in doing is if you could just give me a date by
which you'll let the Court know one of two things. I'm
thinking at the September status conference, maybe in your
Case Management Report, you can simply report to the Court
that you want this considered, or you want to withdraw it in
about a month's time.
MS. GAROFALO: That would be fine, Your Honor.
THE COURT: Any objection to that, Mr. Peek?
MR. PEEK: No objection, Your Honor.
THE COURT: So, Miss Clerk, with respect to 684,
the consideration of that motion will be deferred until the
September Case Management Conference.
And Miss Garofalo --
MS. GAROFALO: Garofalo.
THE COURT: -- Garofalo has indicated that
their experts are reviewing that motion, and are going to
determine whether they will proceed with it, or whether it
will be withdrawn, and will so advise the Court in their Case
Management Report for September.
Case 3:06-cv-00056-PMP-VPC Document 833 Filed 09/03/08 Page 4 of 150
8/20/2019 Montgomery v eTreppid #833 | 8/18 OSC Hearing Transcript
5/150
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
KATHRYN M. FRENCH, RPR, CCR(775) 786-5584
5
The next motion is docket 726. This is the motion
of Opspring, LLC to compel production of tax returns of
Warren Trepp. And that drew an opposition from Warren Trepp
at docket 761, and a reply at docket 783 in support of
that motion. And I did note, I think, in eTreppid's Case
Management Report, eTreppid took the view that certain
issues were raised in the reply that weren't addressed in
the original motion itself. So, I am aware that that
occurred.
So, Ms. Garofalo.
MS. GAROFALO: Again, Your Honor, I'll keep this
simple. There is really one reason why we believe the tax
returns are relevant and ought to be produced. And, actually,
that reason parallels, to some extent, the reason that the
eTreppid parties are requesting that Mr. Montgomery produce
his tax returns. ETreppid is and was an LLC. Mr. Montgomery
and Mr. Trepp were members, are members of that LLC. And
there is a dispute relating to the copyright claims and as to
whether or not Mr. Montgomery was indeed an employee subject
to the Work For Hire Doctrine, or a partner, so to speak, a
member of the LLC.
One of the reasons that the eTreppid parties wanted
to see Mr. Montgomery's tax returns was to see how he
characterized his income; whether it was characterized as
employee income, salary, or something else. We believe that
Case 3:06-cv-00056-PMP-VPC Document 833 Filed 09/03/08 Page 5 of 150
8/20/2019 Montgomery v eTreppid #833 | 8/18 OSC Hearing Transcript
6/150
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
KATHRYN M. FRENCH, RPR, CCR(775) 786-5584
6
we are entitled to the same information, relevant to being
Mr. Montgomery and Mr. Trepp had the same positions with the
company. If indeed Mr. Trepp characterized himself as a
partner, a member of the LLC, as opposed to an employee,
that would be relevant and bear on Mr. Montgomery's argument
relating to the employee work for hire issue.
THE COURT: All right.
Mr. Snyder.
MR. SNYDER: Thank you, Your Honor.
The sole reason stated here for relevancy of the tax
returns is how Mr. Trepp's, as I understand it, employment
status might impact the determination of Mr. Montgomery's
employment status. The factual basis for Montgomery's
argument is that somehow these two people were in an identical
position, vis-a-vis eTreppid. Thus, the way Montgomery's
income was characterized on his returns is relevant, to the
same extent, Mr. Trepp's is. And I'm not sure that they have
provided any factual support to suggest that.
The two individuals were both members of eTreppid,
certainly, but that -- it doesn't follow from that,
necessarily, that they were both employees or non-employees,
or independent contractors, or something other. And the --
THE COURT: Excuse me, Mr. Snyder.
Mr. Montgomery was a Chief Technology Officer. And
Mr. Trepp -- and I haven't looked at all of the iterations of
Case 3:06-cv-00056-PMP-VPC Document 833 Filed 09/03/08 Page 6 of 150
8/20/2019 Montgomery v eTreppid #833 | 8/18 OSC Hearing Transcript
7/150
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
KATHRYN M. FRENCH, RPR, CCR(775) 786-5584
7
the agreement -- was Chair of the Management Committee at one
time. I don't know if that changed. I think Mr. Frye was the
president or -- what was he?
MR. SNYDER: I don't recall Mr. Frye's position.
He was a secretary.
THE COURT: Oh, all right.
MR. SNYDER: And there are substantial
differences between the manner in which the two individuals
were compensated for most of the duration of eTreppid.
Mr. Trepp did not draw a salary. Mr. Montgomery, in contrast,
did, for the entire, entire time. The information that
could be in his tax returns is really not relevant to Mr. --
to whether or not Mr. Montgomery was an employee.
Furthermore --
THE COURT: Well -- go ahead, sir.
MR. SNYDER: I'd rather address your question
then go down a blind alley here.
THE COURT: Well, one of my questions is I
think that the Montgomery parties say in their motion that
there are also affirmative defenses that Mr. Montgomery, the
Montgomery parties asserted, that they feel bear on this
issue of Mr. Trepp's tax returns, unclean hands, and so on
and so forth. And, that I think they quote in their motion
an excerpt from the amended -- from their complaint that, yes,
at paragraph 42 of the Amended Complaint: "Improperly used
Case 3:06-cv-00056-PMP-VPC Document 833 Filed 09/03/08 Page 7 of 150
8/20/2019 Montgomery v eTreppid #833 | 8/18 OSC Hearing Transcript
8/150
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
KATHRYN M. FRENCH, RPR, CCR(775) 786-5584
8
his majority interest to produce Montgomery shares, the value
of holdings, pay himself an exorbitant salary," and so on so
forth.
And so they say they're interested in looking at
Montgomery parties' affirmative defenses to these defenses
to eTreppid's claim for misappropriation of trade secrets.
Would those affirmative defenses implicate
Mr. Trepp's tax returns and how --
MR. SNYDER: Well, we have no idea because we
have asked specific interrogatories to the Montgomery parties,
asking that they articulate the basis for these claims. And
the responses we've gotten have not -- have been so devoid
of detail, that we really can't evaluate whether or not
Mr. Trepp's tax returns could impact that. I certainly don't
see any reason that's before the Court to think that they
would.
Furthermore, this motion is being brought by
Opspring rather than Montgomery. And I'm not sure if
Opspring has the same basis to assert that defense that
Montgomery might.
THE COURT: Right. And I'm going to ask
Ms. Garofalo about that, because I thought that was odd. And
I'm sure there's an explanation for it.
MR. SNYDER: Okay. The last point I would like
to make, quickly, is that, to the extent the Court is inclined
Case 3:06-cv-00056-PMP-VPC Document 833 Filed 09/03/08 Page 8 of 150
8/20/2019 Montgomery v eTreppid #833 | 8/18 OSC Hearing Transcript
9/150
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
KATHRYN M. FRENCH, RPR, CCR(775) 786-5584
9
to grant the Motion to Compel and compel production of
Mr. Trepp's tax returns, we would ask that that production
be limited to reflect only information on those tax returns
showing income from eTreppid because, obviously, there is,
there is a number of sources of income.
When the Montgomery parties produce their tax
returns, we asked and the Court granted, that they be produced
without redaction. Because one of the issues that we were
seeking those for, one of the things they were relevant for,
is to find out whether Mr. Montgomery had been earning
income from other sources, potentially, in violation of his
contractual obligations to eTreppid. There's no such
allegation here.
So if there's any sources of income that are
non-eTreppid, they're certainly of no relevance at all to
these proceedings. And those should be redacted.
THE COURT: Thank you, sir.
Ms. Garofalo.
MS. GAROFALO: Yes, Your Honor. I think,
actually, Mr. Snyder explained to the Court why it is
relevant. Mr. Snyder said that Mr. Trepp did not receive
any salary. Of course, we have no way to know how Mr. Trepp
was paid until we see his tax returns. So, relevance is
relatively broad.
And these tax returns go, again, to how Mr. Trepp
Case 3:06-cv-00056-PMP-VPC Document 833 Filed 09/03/08 Page 9 of 150
8/20/2019 Montgomery v eTreppid #833 | 8/18 OSC Hearing Transcript
10/150
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
KATHRYN M. FRENCH, RPR, CCR(775) 786-5584
10
was paid, how he was treated. The affirmative defenses
clearly set forth arguments, allegations that Mr. Trepp, who
controlled the company, treated himself differently, treated
himself in a way that might be in breach of his fiduciary
duties to his minority partners, and that Mr. Montgomery's
interests were diluted through these transfers of money and
so forth. All of that cannot be known unless we can review
the tax returns. Or there, really, is no equivalent
information, nothing else that we could possibly rely on
to obtain the information that we need.
THE COURT: Why is, why is -- and I meant to ask
you this -- why it Opspring making this request? Why didn't
Mr. Montgomery do it?
MS. GAROFALO: Your Honor, I don't know the
answer to that. We came into this fairly recently. I don't
know why there's an anomaly and who made the request. And I
don't know why it was done that way. So I can certainly
find that out for the Court later this afternoon, but I cannot
answer that question.
THE COURT: All right.
Well, let me just say this. I am mindful that both
you and Mr. Sunshine are coming into this case, for you, at an
unfortuitous time, given the volume of work that you're facing
in getting up to speed. But, I think I alluded earlier to my
frustration that because of the number of lawyers prior to
Case 3:06-cv-00056-PMP-VPC Document 833 Filed 09/03/08 Page 10 of 150
8/20/2019 Montgomery v eTreppid #833 | 8/18 OSC Hearing Transcript
11/150
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
KATHRYN M. FRENCH, RPR, CCR(775) 786-5584
11
your firm's involvement in the case but, also, subsequent,
that I will expect the answers to the questions the Court
poses to be answered. And I want to be reasonable in
expecting that. I'm just giving fair notice to you that
that's going to be very important to the Court in terms of
how you proceed forward in this case.
Mr. Snyder, did you wish to say anything further?
And I'll give Mr. Garofalo the last word, of course.
MR. SNYDER: Yes. I just had a quick point to
make. Ms. Garofalo stated that there's no other potential
source for this information. Well, of course there is.
We've already produced every check eTreppid has ever written.
That's a potential source for this information. Any 1099s or
W-2s or K-1s that eTreppid issued to Mr. Trepp is a potential
source for this information.
The notion that his tax returns are the only
potential source for this information is just not accurate.
So there's certainly other less intrusive means, less invasive
of Mr. Trepp's privacy, to obtain this information. And
some of those the Montgomery parties have already availed
themselves of, and they have documents which would shed light
on this. Some of them they have not.
So, I think it's not accurate to say that this is
the only way to get this knowledge.
THE COURT: All right. Miss Garofalo.
Case 3:06-cv-00056-PMP-VPC Document 833 Filed 09/03/08 Page 11 of 150
8/20/2019 Montgomery v eTreppid #833 | 8/18 OSC Hearing Transcript
12/150
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
KATHRYN M. FRENCH, RPR, CCR(775) 786-5584
12
MS. GAROFALO: I would respectfully disagree
with Mr. Snyder. I think it is the only way to get some of
the information that we are seeking. And, I think there is a
stronger parallel to the case in which Mr. Montgomery was
required to produce his tax returns and the reason why.
There is information relating to transfers, relating to
characterization of compensation that can only be found in
Mr. Trepp's tax returns.
And on that basis, we'll submit, Your Honor.
THE COURT: Thank you.
All right. Well, first of all, my observation about
some of this discovery litigation that we've had in this case
is that it impresses the Court, on both sides, that there has
sort of been this tit-for-tat, sort of back and forth about,
well, you got this. I want this. You got an order to show
cause. We want an order to show cause, and so forth. And
I'm hopeful that today marks a turning point in that process.
But that having been said, I'm not suggesting
that this motion is not made without merit, and that I'm not
seriously considering it. I most certainly am. I think what
I'm, what makes sense to me, when I issued the order allowing
Mr. Montgomery's tax returns to be disclosed, it was for the
reasons that Mr. Snyder articulated, in that there -- that
seems to the Court to really be tied closely to this whole
copyright claim, and how his employment is characterized. And
Case 3:06-cv-00056-PMP-VPC Document 833 Filed 09/03/08 Page 12 of 150
8/20/2019 Montgomery v eTreppid #833 | 8/18 OSC Hearing Transcript
13/150
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
KATHRYN M. FRENCH, RPR, CCR(775) 786-5584
13
his tax returns, seems to me, to implicate whether he's an
employee or independent contractor. But I, I do agree, to
a limited extent, that with respect to some of the claims
alleged in the Montgomery parties' Amended Complaint, that,
in turn, Mr. Trepp's tax returns may be a part of that.
It troubles me, however, that according to
Mr. Snyder, discovery has been taken to try to clarify and
learn what those claims are outlined in the first Amended
Complaint. And he's just represented to the Court that it's
so far not clear.
I'm going to grant the motion in part and deny it in
part. I'm going to grant the motion in so far as Mr. Trepp
will be required to produce his tax returns. But, only in
so far as, at this point, he will disclose -- produce those
portions of his tax returns concerning any compensation that
he's received from eTreppid.
Now, what was -- what were the years -- Mr. Snyder,
you might recall this -- the Court ordered disclosure of
Mr. Montgomery's returns? Do you recall?
MR. SNYDER: I believe it was '98 through 2005.
MS. GAROFALO: Six.
MR. SNYDER: Was it six?
MR. PEEK: I believe it was six, because there
was a stub year, Your Honor. First part of January.
THE COURT: All right. Then I'll do the same
Case 3:06-cv-00056-PMP-VPC Document 833 Filed 09/03/08 Page 13 of 150
8/20/2019 Montgomery v eTreppid #833 | 8/18 OSC Hearing Transcript
14/150
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
KATHRYN M. FRENCH, RPR, CCR(775) 786-5584
14
for Mr. Trepp. It will be the tax returns from 1998 through
2006. But I am limiting, at this point, the disclosure of
those tax returns as it concerns income from eTreppid only.
Now, if that -- if you find, if Montgomery's counsel
finds, or Opspring, I should say, engages in discovery and you
want to renew your motion for more tax information, you have
leave to do that. But, at this point, that's the extent to
which I'm going to grant the relief requested. And that will
be the Court's order.
MS. GAROFALO: Your Honor, may I just seek
clarification --
THE COURT: Yes.
MS. GAROFALO: -- with respect to the term
"compensation." I suspect, although, of course, I don't know,
that Mr. Trepp received certain, perhaps bonuses, perhaps cars
were paid for, trips. I would include that in my definition
of compensation. And I would like clarification from the
Court as to just what the Court means in its order as to
compensation.
THE COURT: All right. Let's talk about how we
want to define compensation.
Mr. Peek.
MR. PEEK: Your Honor, I certainly would expect
that in the preparation of the books, the tax returns for
eTreppid, LLC, there certainly would have been, if there was
Case 3:06-cv-00056-PMP-VPC Document 833 Filed 09/03/08 Page 14 of 150
8/20/2019 Montgomery v eTreppid #833 | 8/18 OSC Hearing Transcript
15/150
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
KATHRYN M. FRENCH, RPR, CCR(775) 786-5584
15
income attributed to a car or some other -- something else
associated with the operation of eTreppid, that that would
have been passed through and would have been included in the
Court's request or in the Court's order. So, I certainly
would expect as I look through and review the tax returns,
that that would be included.
THE COURT: All right.
MR. PEEK: So, I mean, I understand that.
THE COURT: What I'm going to do is, I can't --
I don't know what the universe of that compensation from
eTreppid will be, but I'm going to order the parties to, when
you review those tax returns, sir, you understand exactly --
MR. PEEK: I do.
THE COURT: -- obviously, what Montgomery --
what Opspring has asked for. And to the extent there are
issues, I urge you strongly to work together to resolve them
and clarify what constitutes compensation. And should there
be an issue, you can raise it at the September Case Management
Conference. Montgomery, and Opspring's counsel can certainly
raise it. And if you have a problem, we'll resolve it.
MR. PEEK: I think I understand.
THE COURT: I don't know what more -- I think
your point is well taken, Ms. Garofalo. But unless the two of
you want to work today to try to come up with a definition --
MS. GAROFALO: I'm confident Mr. Peek and I can
Case 3:06-cv-00056-PMP-VPC Document 833 Filed 09/03/08 Page 15 of 150
8/20/2019 Montgomery v eTreppid #833 | 8/18 OSC Hearing Transcript
16/150
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
KATHRYN M. FRENCH, RPR, CCR(775) 786-5584
16
work out most if not all of the issues related to the tax
return order.
MR. PEEK: And the Internal Revenue Service
tells us what it is, Your Honor. I don't think that
Ms. Garofalo and I need to come up with a different
definition.
THE COURT: That occurred to me, but --
MS. GAROFALO: And my partner, Mr. Sunshine,
just reminded me, could we have a date by which those returns
must be --
THE COURT: Oh, right. Thank you, Mr. Sunshine.
MR. PEEK: May I have just a minute, Your Honor.
This will take some time to review.
Mr. Snyder is going to go to Burning Man, so he
tells me three weeks, Your Honor.
THE COURT: Good for you, Mr. Snyder.
MR. PEEK: I know that probably doesn't mean
anything to Mr. Sunshine or Ms. Garofalo.
THE COURT: Well, just don't get in trouble
because you'd come to this Court.
MR. PEEK: That's right. You get all the
misdemeanors, don't you.
THE COURT: We do.
MR. PEEK: So three weeks, Your Honor. Whatever
that date is from this date.
Case 3:06-cv-00056-PMP-VPC Document 833 Filed 09/03/08 Page 16 of 150
8/20/2019 Montgomery v eTreppid #833 | 8/18 OSC Hearing Transcript
17/150
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
KATHRYN M. FRENCH, RPR, CCR(775) 786-5584
17
THE COURT: I think that's sufficient.
MR. PEEK: Is that Labor Day?
THE COURT: Any objection, Ms. Garofalo?
MS. GAROFALO: No. We would just like to have
the information before the depositions, before Mr. Trepp's
deposition.
THE COURT: Right.
MR. PEEK: So that three weeks would be
September 8th, if I'm reading the calendar correctly.
THE COURT: That's correct. So, Monday,
September 8th, 2008.
MR. PEEK: And we may do it sooner, Your Honor.
THE COURT: Right. Very good.
All right. The next issue I would like to take up
is this question of the privilege log, which I apologize if I
caused confusion earlier this morning about what I was talking
about with respect to the July Case Management Report.
This issue arose, as I think I indicated earlier
this morning, as a consequence of the assertion by the
Montgomery parties of a common interest agreement. The
Montgomery parties filed a Motion For Protective Order, which
this Court denied without prejudice, and we had a discussion
at the July Case Management Conference about this issue.
And now this is my recollection, and I haven't -- I didn't,
over the lunch hour, go back and listen to the tape, but my
Case 3:06-cv-00056-PMP-VPC Document 833 Filed 09/03/08 Page 17 of 150
8/20/2019 Montgomery v eTreppid #833 | 8/18 OSC Hearing Transcript
18/150
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
KATHRYN M. FRENCH, RPR, CCR(775) 786-5584
18
recollection was we had this -- the Court spent a great deal
of time coming to, trying to understand the Montgomery
parties' position, which is fine.
Then at the hearing, my recollection is that
Ms. Klar said, well, really, she thought it was something
that could be probably fairly easily worked out; that it
did not involve a large number of documents. I don't
recall if she said just a handful. That might be an unfair
characterization. But my recollection was, look, it's not
going to be that many documents anyway, and so why don't we
prepare these privilege logs.
So, the idea was there were two privilege logs. One
supplied in camera to the Court. And that privilege log was
giving this Court more detail about the subject matter of the
items that were asserted the common interest agreement, I
guess was asserted -- well, I'll get to that in a minute.
And then a different, shorter version would be supplied to
everyone else, all of the other parties. And so that's the
one I received.
And I, of course, read Mr. Snyder's concerns in
eTreppid's Case Management Report, which say there's no
description of materials withheld; no identity of the author;
the date it's written. There's just -- who the recipients
were versus authors, and the reasons held.
So, I asked earlier this morning if I could take a
Case 3:06-cv-00056-PMP-VPC Document 833 Filed 09/03/08 Page 18 of 150
8/20/2019 Montgomery v eTreppid #833 | 8/18 OSC Hearing Transcript
19/150
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
KATHRYN M. FRENCH, RPR, CCR(775) 786-5584
19
look at that. And I have. And here are some comments I
would like to make: That there are 244 communications that
are the subject of this privilege log. That's the first
issue. And I make that comment in light of my earlier
comment about my understanding, my impression from Ms. Klar,
that there would be far fewer that would be the subject of
the privilege log.
Two, I'm assuming that, in both my in camera
version -- I can tell you this. This is no secret. I don't
think it's a big issue -- and in the one provided to counsel,
the privilege asserted is just attorney/client privilege.
Period. That's all mine says. That's all everyone else's
said. My in camera -- whoever that is needs to stop -- has
a long subject matter category which discusses, describes
more in detail the subject matter. And the other people,
other counsel, did not get that. But it does track the, what
eTreppid and the other parties received, does track, as far as
the dates and the participants in the communication. And so
I'm just letting everybody know that.
Here are some problems that I have as a practical
matter.
One, it's out of chronological order, which is --
just it gives me a headache with the number of pieces of paper
that all of us are trying to contend with. So, it's very hard
to follow. There are 2006 dates, and then there are 2007.
Case 3:06-cv-00056-PMP-VPC Document 833 Filed 09/03/08 Page 19 of 150
8/20/2019 Montgomery v eTreppid #833 | 8/18 OSC Hearing Transcript
20/150
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
KATHRYN M. FRENCH, RPR, CCR(775) 786-5584
20
Here on page 19, 11-15-06. And that's not helping me.
The other issue that I have is there are, I counted
of the, in these 244 groups of communications, I count 24
people whom I don't believe were represented by Mr. Flynn.
Well, there's Mr. Flynn, that that 24 does not
include Ms. DiMare, Al Rava, but includes all of these other
people. And I did get a sheet that advised me who nine of
these people were, who nine of these people are. I knew two
of them. So, seven. But there are 13 people I don't know
who they are, and why the attorney/client privilege is
implicated.
And what I do note on these communications, is
that -- and so I'm really unclear about what we're doing here.
Of the 244 communications, I count four that are simply
between Mr. Flynn and Mr. Montgomery or local counsel. Just
four out of the 244. But, I've got, there are lots -- again,
no secret to anybody because the communication participant
list of the same -- Edra Blixseth and Michael Sandoval appear
on, with a few exceptions -- well, Michael Sandoval not quite
so much, but -- and then there are all these other people. I
don't know who they are. I don't know.
So my question, I guess, is is this the basis -- I'm
asking Montgomery's counsel, Montgomery parties -- are you
saying, well, these conversations are subject, all of these
conversations are subject to the attorney/client privilege
Case 3:06-cv-00056-PMP-VPC Document 833 Filed 09/03/08 Page 20 of 150
8/20/2019 Montgomery v eTreppid #833 | 8/18 OSC Hearing Transcript
21/150
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
KATHRYN M. FRENCH, RPR, CCR(775) 786-5584
21
and, even if they were waived, they're subject to the Common
Interest Doctrine, and so we shouldn't have to produce these?
So, that's my first question.
MS. GAROFALO: It's my -- I have not reviewed
all of the documents that are listed on the list, but it was
my understanding that in preparation of the list, they focused
on documents that were perceived to be part of the common
interest privilege. And that was perceived as an adjunct to
the attorney/client privilege, much the way a joint defense
agreement is in a criminal matter.
There is documentation to and from lawyers to an
interested group of people relating to the litigation itself,
in which they are all either parties, or have an interest. It
is my understanding that that is what is reflected, or was
intended to be reflected on the privilege logs.
THE COURT: Okay. For example, just for an
example, you don't need to turn to the pages, but here's
May 4, '07, Dennis Montgomery, Michael Flynn, and Edra
Blixseth. Here's 12-1-06, Michael Flynn, Dennis Montgomery,
Edra Blixseth, Michael Sandoval, Carla DiMare, Al Rava.
In other words, Mr. Montgomery's lawyers are talking to
Mr. Sandoval and Ms. Blixseth.
So, 9-27-06, Michael Flynn, Edra Blixseth,
Tim Blixseth, Jack Kemp -- the Congressman? -- Michael
Sandoval, Dennis Montgomery, Carla DiMare, Phillip Stillman,
Case 3:06-cv-00056-PMP-VPC Document 833 Filed 09/03/08 Page 21 of 150
8/20/2019 Montgomery v eTreppid #833 | 8/18 OSC Hearing Transcript
22/150
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
KATHRYN M. FRENCH, RPR, CCR(775) 786-5584
22
Al Rava. I mean, so apart from the problems that the other
parties are saying that they have with the inadequacy of the
privilege log as to them, I'm just not understanding where the
attorney/client privilege is on a lot of these communications,
and why there isn't a waiver. And if there is a waiver, why
the Common Interest Agreement applies. And that is -- so this
does not shed any light. And, I don't know who a lot of these
people are.
MS. GAROFALO: Your Honor, what I would propose
to the Court is that we, again, table this perhaps until the
next hearing, at which time we will review the documents.
Mr. Sunshine and I will review the list, narrow it down, try
to work out any issues we can with Mr. Peek, and get the
Court something that at least makes sense for us to discuss,
if there still are outstanding issues.
THE COURT: All right. Well, the other
issue I have, just so you know, is one of the concerns
that -- and this is a problem with e-mail communications. And
certainly -- you can have a seat -- is that in the olden days,
when people used to write letters, you had a letter to someone
and from someone. And, nowadays, we have e-mail strings. And
so an e-mail might start out from person A to person B, then
C, D and E are copied. E responds to A. And on it goes, and
there are these discussions.
So that's a problem, because it's hard -- I can't
Case 3:06-cv-00056-PMP-VPC Document 833 Filed 09/03/08 Page 22 of 150
8/20/2019 Montgomery v eTreppid #833 | 8/18 OSC Hearing Transcript
23/150
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
KATHRYN M. FRENCH, RPR, CCR(775) 786-5584
23
discern who the author of these documents is. And I have
the benefit of the in camera longer subject matter, but I'll
just say part of that's not cutting it for me, the long
subject matter, description, in terms of why these shouldn't
be produced.
So what I'll do, unless counsel -- yes, sir.
MR. SCHWARTZ: If I could be heard just briefly
on this issue.
THE COURT: You may, sir.
MR. SCHWARTZ: On behalf Atigeo, today is the
first day we've seen this privilege log in any form. And I
have a couple of concerns.
It was not my understanding that the Court was going
to take the privilege log and rule on waiver as to specific
documents. This, procedurally, is a little bit unusual, in
that the Montgomery parties moved for a protective order as to
a broad class of documents.
What I thought was happening here was that motion
was denied. The Montgomery parties were ordered to produce
a privilege log. And the other parties would then have an
opportunity to look at that. If the -- well, you can
disagree, sir, but let me just make a point.
The eTreppid parties then have an issue as to any
particular document; or all of them, if necessary. They can
bring a Motion to Compel. But, there is no standing motion to
Case 3:06-cv-00056-PMP-VPC Document 833 Filed 09/03/08 Page 23 of 150
8/20/2019 Montgomery v eTreppid #833 | 8/18 OSC Hearing Transcript
24/150
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
KATHRYN M. FRENCH, RPR, CCR(775) 786-5584
24
compel any particular documents.
THE COURT: That's true. You're correct, sir.
MR. SCHWARTZ: The reason I raised this is
Atigeo, and/or Michael Sandoval individually, may have
concerns with the production of specific documents. And we
may want to be heard, and we ought to have the right to be
heard, if there is going to be a motion to compel as to those
documents.
I'm not representing to the Court that we do as to
anything specific because I've just seen this. But, if the
Court is going to rule as to production of specific documents,
I would like the opportunity for Atigeo and Sandoval to be
heard as to those documents.
So I suggest that, after the revisions, if eTreppid
wants to move to compel production, why they're free to do so.
But that then allows everybody the ordinary opportunity to be
heard.
Thank you, Your Honor.
THE COURT: Thank you.
MR. PEEK: Your Honor, I respectfully disagree
with Mr. Schwartz, because I think what Mr. Schwartz is
looking at is the public privilege log that was supplied;
whereas, what the Court is looking at is the in camera
submission. And as I understood from the transcript -- and I
actually have the transcript. And I can certainly confirm to
Case 3:06-cv-00056-PMP-VPC Document 833 Filed 09/03/08 Page 24 of 150
8/20/2019 Montgomery v eTreppid #833 | 8/18 OSC Hearing Transcript
25/150
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
KATHRYN M. FRENCH, RPR, CCR(775) 786-5584
25
the Court that Ms. Klar told the Court, on page 107 of that
transcript, lines 5 through 7, she said: "That is not an
enormous number of documents, and generally, what the subject
matter relates to" -- that was the in camera submission. I
think the Court is addressing the in camera submission.
It was my understanding, contrary to Mr. Schwartz,
that there was a standing order, and what the Court was going
to do was review those in camera to determine whether or not,
one, there was a waiver of the attorney/client privilege;
and, two, if there was a waiver, are they covered by the
common interest privilege.
So I think, respectfully to Mr. Schwartz, I agree
with him perhaps the other privilege log which was given to
the parties, that may be the subject matter of more meet and
confer and motions to compel. But, the in camera submission,
it was my understanding from reading the transcript, is that
that was a submission that was going to the Court, and the
Court was going to then rule on that in camera submission and
compel them or not compel them.
And with respect to the proposal that there be a
further submission, I'd certainly -- if Ms. Garofalo thinks
that she can narrow this down, I welcome that opportunity. I
welcome the opportunity, certainly, to meet and confer with
her further. But, what I would suggest is that the privilege
log which you have in camera is insufficient. And I think,
Case 3:06-cv-00056-PMP-VPC Document 833 Filed 09/03/08 Page 25 of 150
8/20/2019 Montgomery v eTreppid #833 | 8/18 OSC Hearing Transcript
26/150
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
KATHRYN M. FRENCH, RPR, CCR(775) 786-5584
26
and I hate to impose this on the Court, is the actual
documents themselves are the ones that should be submitted
in order for the Court to determine whether or not they are
the subject matter of the common interest privilege, and the
attorney/client privilege. Because it's only then, as the
Court referenced for example, why is Congressman Kemp --
THE COURT: I don't know if that's who it is.
MR. PEEK: That's who it is, Your Honor. I can
represent to the Court that that is who it is. Why is he, why
is Tim Blixseth, who is now the estranged husband, and maybe
now the divorced husband of Edra Blixseth, there as well?
So, there's a lot of waiver issues. And,
respectfully, Your Honor, as the Court knows from the
pleading, if you go back and look at the Request For
Production, and responses to the Request For Production,
there was no objection at all in that response to request
for production with respect to a common interest privilege.
That request was extant in November of 2007. And it's only
recently that, suddenly, an epiphany, a light bulb went off,
and they said, oh, by the way, we don't have to produce
because of this.
Again, it's just one more of those indicia of delay.
And well, I didn't like -- we didn't get what we wanted here.
Let's try another round here. And so I think that I welcome
the opportunity to meet with Ms. Garofalo or Mr. Sunshine to
Case 3:06-cv-00056-PMP-VPC Document 833 Filed 09/03/08 Page 26 of 150
8/20/2019 Montgomery v eTreppid #833 | 8/18 OSC Hearing Transcript
27/150
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
KATHRYN M. FRENCH, RPR, CCR(775) 786-5584
27
see if we can narrow it. However, I don't have the benefit of
what the Court has.
THE COURT: Well, what I'm noting, I'm just
looking at my court record, my docket 760. It just says,
after I say what we're doing, I say:
"The Court notes for the record that notwithstanding
the production of the privilege log, the Court reserves its
determination whether the Montgomery parties have waived their
assertion of the Common Interest Doctrine."
I mean, that's all I -- and I might have said a lot
more.
MR. PEEK: Well, but that's what I understood,
too, Your Honor, to say. So that would result in a ruling
today, if we're here to address that. But if the Court wants
to reserve that until it gets further opportunity to review --
THE COURT: Well, right. But one thing that
troubles me is what Mr. Schwartz has said, is he just got this
today.
Is that right?
MS. ROBB-PECK: Yes, Your Honor.
MR. SCHWARTZ: Yes.
THE COURT: You just received the privilege log?
I thought everybody was supposed to receive it.
MS. ROBB-PECK: Your Honor, that was --
THE COURT: You asked for it, Ms. Robb-Peck.
Case 3:06-cv-00056-PMP-VPC Document 833 Filed 09/03/08 Page 27 of 150
8/20/2019 Montgomery v eTreppid #833 | 8/18 OSC Hearing Transcript
28/150
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
KATHRYN M. FRENCH, RPR, CCR(775) 786-5584
28
MS. ROBB-PECK: I did. I specifically asked.
And while I don't want to cast aspersions on anyone, the
discovery has been going hot and heavy between these parties
for a long time. And the government and the third party
defendants get left out.
THE COURT: You didn't get one either, Ms.
Wells?
MS. WELLS: No. Not until this morning.
MR. SCHWARTZ: And, Your Honor, the issue is
also, specifically, it's not just that we don't have the
identification of the documents --
THE COURT: I know. I know.
MR. SCHWARTZ: -- we need a chance to look at
these documents to the extent we have them.
THE COURT: I know. I know.
All right. I get it. I understand.
MR. PEEK: But we're still dealing with two
sets. We're dealing with the in camera --
THE COURT: I understand.
MR. PEEK: -- and the other set.
THE COURT: I understand.
MR. SCHWARTZ: With all due respect, Your Honor,
I don't think that's an accurate characterization. But, Your
Honor knows what happened at the last --
THE COURT: What's not accurate?
Case 3:06-cv-00056-PMP-VPC Document 833 Filed 09/03/08 Page 28 of 150
8/20/2019 Montgomery v eTreppid #833 | 8/18 OSC Hearing Transcript
29/150
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
KATHRYN M. FRENCH, RPR, CCR(775) 786-5584
29
MR. SCHWARTZ: You've got two -- if I -- well,
I'll let the Montgomery parties respond to this, but you've
got two privilege logs. One just has more detail.
THE COURT: That's right. They're the same
thing. One has more detail.
MR. SCHWARTZ: We don't have any standing order
regarding production. We have a motion to assert a privilege.
And --
THE COURT: That was denied without prejudice.
MR. SCHWARTZ: Correct. And so now if eTreppid
wants to move to compel something, they're certainly free to
do so. But, there's nothing specifically on the table that
my client can respond to.
So, with that, I'll submit.
THE COURT: I understand.
MR. SCHWARTZ: Thank you.
THE COURT: Okay. First of all, this is --
there are, there's the government, and then there's
Mr. Sandoval and Atigeo. They are to be given the papers
that everyone else is given. In fact, at the July hearing,
Ms. Robb-Peck made a specific request, please give us
whatever everyone else is getting. And that, again, did not
happen. This is the last time that's going to occur in this
case. And if it happens again, I will issue sanctions.
It's not fair -- Mr. Sandoval, in particular, his
Case 3:06-cv-00056-PMP-VPC Document 833 Filed 09/03/08 Page 29 of 150
8/20/2019 Montgomery v eTreppid #833 | 8/18 OSC Hearing Transcript
30/150
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
KATHRYN M. FRENCH, RPR, CCR(775) 786-5584
30
name is all over this privilege log. I mean, and I assumed
that his attorneys saw it.
Yes, sir.
MR. SCHWARTZ: I apologize for interrupting.
Just to be clear, Your Honor, I do welcome the Court's
admonition to the parties about including us, so we're not
the red-headed stepchild. But, we have also not received
things from eTreppid. And so I want to be sure that the
Court's admonition is clear that all parties need to include
us in whatever happens.
THE COURT: Oh. All right.
MR. SCHWARTZ: Thank you.
MR. PEEK: Your Honor, with respect to
Mr. Schwartz's comment that these are not the subject of a
motion to compel, I remind the Court that in eTreppid's
RFP two, request number 26, we asked for all communications
e-mails, et cetera, to Sandoval, Blixseth.
THE COURT: And that was ordered.
MR. PEEK: That was the Court's order
February 21st. So --
THE COURT: And that, the Court -- the
Montgomery parties said we don't understand for sure what
you mean by that. I'm just --
MR. PEEK: Well, that was part of it.
THE COURT: Well, wait, wait, wait.
Case 3:06-cv-00056-PMP-VPC Document 833 Filed 09/03/08 Page 30 of 150
8/20/2019 Montgomery v eTreppid #833 | 8/18 OSC Hearing Transcript
31/150
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
KATHRYN M. FRENCH, RPR, CCR(775) 786-5584
31
And so, on Friday, I said, no, produce everything in
their entirety. And that is, that order is here.
But, listen, we need -- we have other business to
attend to. This is what I'm going to do. I am going give
the Montgomery parties one last opportunity to review the
documents they've identified in their privilege log. And I
have outlined the deficiencies the Court finds from the in
camera documents I received. I don't know who many of these
people are. I don't know what Common Interest Agreement there
is. So if this is what is being provided, I'm not finding --
I mean, I have obvious problems with what's been provided.
It's insufficient.
It is imperative that all the parties, henceforth,
receive everything everyone else does. And so that admonition
goes to everyone. And, obviously, Mr. Sandoval has an
interest in the subject of the privilege log, so he should
have gotten it, long before now, as should the government.
There's just -- all right.
So I'm going to -- it is my belief, as Mr. Peek has
stated, that with respect to e-mails in this litigation, the
Court has ruled on the e-mails, in so far as they are e-mails
that were the subject of requests for production number 26. I
can't remember which set whether it was one or two.
MR. PEEK: RFP two, Your Honor.
THE COURT: Request For Production two. The
Case 3:06-cv-00056-PMP-VPC Document 833 Filed 09/03/08 Page 31 of 150
8/20/2019 Montgomery v eTreppid #833 | 8/18 OSC Hearing Transcript
32/150
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
KATHRYN M. FRENCH, RPR, CCR(775) 786-5584
32
Court ruled on that, and ruled again on Friday. So counsel
get one last shot, the Montgomery parties, at revising their
privilege log, if they wish to assert these privileges. And
to the -- now, if Mr. Sandoval -- if counsel for Atigeo and
Mr. Sandoval -- I don't -- was Atigeo a party when --
MR. PEEK: They were not, Your Honor. When
the Court's orders were entered in February, they were not a
party.
THE COURT: Right.
MS. ROBB-PECK: We hadn't been served, I don't
believe.
MR. PEEK: That's correct.
THE COURT: Right. I don't think you had been
served.
Well, let's see what happens with that. And then
if you want -- what I want in September is the revised
privilege log that needs to be produced within two weeks.
What date is that, Miss Clerk?
THE CLERK: Your Honor, that's actually, Monday,
September 1st, which is a holiday.
THE COURT: Oh. Well, make it the 2nd.
THE CLERK: Tuesday, September 2nd.
THE COURT: Tuesday, September 2nd, to all
counsel, the short form. But, it's got to be clearer. And
you have to identify who these people are. And you have to,
Case 3:06-cv-00056-PMP-VPC Document 833 Filed 09/03/08 Page 32 of 150
8/20/2019 Montgomery v eTreppid #833 | 8/18 OSC Hearing Transcript
33/150
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
KATHRYN M. FRENCH, RPR, CCR(775) 786-5584
33
if you're asserting some attorney/client privilege, or you're
saying there's a Common Interest Doctrine, you have to say
why you're asserting it. Otherwise, you're producing the
documents.
However, if Mr. Schwartz, on behalf of his counsel
has concerns and wants to move for a protective order, or
you feel that your client has some concerns that are being
implicated, you can bring a motion --
MS. ROBB-PECK: Thank you, Your Honor.
THE COURT: -- to raise that issue. And then if
you can resolve it, fine. If not, you can all file reports.
And at the September Case Management Conference, I'll address
them.
MR. PEEK: Do I understand, Your Honor, that
there will be supplements to both? I'll call it the public
privilege log, as well as the Court's in camera privilege log.
THE COURT: Yes. There will be supplements to
both that address the concerns I've outlined.
All right. Ms. Garofalo, do you have any questions?
MS. GAROFALO: I don't, Your Honor. Thank you.
THE COURT: Well, I think that concludes the
matters that concern the Court as to the case management
issues.
And we're now prepared, the Court is now prepared to
proceed with the Continued Order to Show Cause hearing. Just
Case 3:06-cv-00056-PMP-VPC Document 833 Filed 09/03/08 Page 33 of 150
8/20/2019 Montgomery v eTreppid #833 | 8/18 OSC Hearing Transcript
34/150
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
KATHRYN M. FRENCH, RPR, CCR(775) 786-5584
34
let me take a minute to let myself get organized.
All right. The order I'm referring to, as
counsel get prepared, is my timekeeping order. I've become
interested in keeping time. The order is docket number 659.
It states:
"ETreppid shall have 6.5 hours to present evidence
and to call the following witnesses: Dennis Montgomery;
Warren Trepp; Jonathan Karchmer; and Len Glogauer.
"The Montgomery parties shall have six hours to
present rebuttal testimony, including Dennis Montgomery;
Fulcrom inquiry representative; FTC consulting
representative."
So what I'm going to do is keep the time. It does
not matter to me how counsel for the parties uses your time.
In other words, I'm assuming that you'll be calling all of
these witnesses. But, it's up to you. I'm just letting you
know I'm keeping the time carefully. And when your time is
up, your time is up. All right?
Mr. Peek.
MR. PEEK: That's the full six-and-a-half hours,
whether I use it with one witness or three witnesses?
THE COURT: Well, I'm assuming that your
representations to the Court were that you would have a
certain amount of time for Mr. Montgomery, and then you
planned to call these three others. So, I mean, I would
Case 3:06-cv-00056-PMP-VPC Document 833 Filed 09/03/08 Page 34 of 150
8/20/2019 Montgomery v eTreppid #833 | 8/18 OSC Hearing Transcript
35/150
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
KATHRYN M. FRENCH, RPR, CCR(775) 786-5584
35
assume that's still the game plan.
MR. PEEK: I'm going to attempt to finish
it in two hours. But to the extent that perhaps I go to
two-and-a-half, I may just have to shorten somebody else.
THE COURT: That's fine. Short somebody else.
That's fine.
All right. So are you prepared to proceed,
Mr. Peek?
MR. PEEK: I am, Your Honor. If I could just
have a moment to pass out -- so that we don't consume that
time -- the exhibits binders. You may recall that the
Court --
THE COURT: Oh, yes.
MR. PEEK: Those were returned to us.
THE COURT: Go ahead.
MR. PEEK: So I'm just going to take a moment to
have those passed out to everybody. I have six copies. One
for the Court. One for the clerk. And then four for the
other parties.
THE COURT: All right.
MR. PEEK: Ready, Your Honor.
THE COURT: Before you proceed, sir, I asked
the clerk of the court to let us know the status of the Court
exhibits, and any other exhibits that either were offered or
we need to have admitted.
Case 3:06-cv-00056-PMP-VPC Document 833 Filed 09/03/08 Page 35 of 150
8/20/2019 Montgomery v eTreppid #833 | 8/18 OSC Hearing Transcript
36/150
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
KATHRYN M. FRENCH, RPR, CCR(775) 786-5584
36
So, Miss Clerk, can you report on that, please.
THE CLERK: Yes, Your Honor. At the June 10th
hearing, defendant's exhibit 1 has been marked, not admitted;
At the June 24th hearing, exhibit, defendant's
exhibit 6, 9, and 31 marked. Not admitted;
And at the same June 24th hearing, the Court's
exhibits 1, 2, 3, 4, 5, 6, 7, 9, 12 and 16 have been admitted.
MR. PEEK: I'd move for the admission of 1, 6,
9, and 31, Your Honor.
THE COURT: Any objection?
MR. SUNSHINE: Your Honor, may we have some time
to look back at those? We can't remember those --
THE COURT: Sure.
MR. SUNSHINE: -- by number. Can we get back to
the Court on that?
THE COURT: All right. Yes.
MR. PEEK: They're the same number --
THE COURT: They're defendant's, just so you
know, 1, 6, 9, 31 were marked, but not admitted. So we can --
Miss Clerk, can you just remind us in the morning --
THE CLERK: Yes, Your Honor.
THE COURT: -- that we need to try again.
THE CLERK: Yes.
THE COURT: All right. And, counsel, I'm going
to defer this to allow Mr. Sunshine and Ms. Garofalo until
Case 3:06-cv-00056-PMP-VPC Document 833 Filed 09/03/08 Page 36 of 150
8/20/2019 Montgomery v eTreppid #833 | 8/18 OSC Hearing Transcript
37/150
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
KATHRYN M. FRENCH, RPR, CCR(775) 786-5584
37
tomorrow morning to also look at this.
And also, Mr. Peek, and counsel, with respect to the
Court's exhibits, they're, I guess, exhibit, Court's exhibit
10, 11, 13, 14, 15, 17, and 18 were not admitted. And I
don't -- I anticipate there's no objection to that, but please
take this afternoon, this evening to check that out. And
we'll report on that in the morning.
MR. PEEK: I have no objection. I remember what
they are.
I'm reporting to the Court as well, Your Honor, and
I'll have to let Mr. Sunshine know, apparently, when we were
reprocessing and adding exhibits for today's hearing, that
there may have been a change to some of the numbering. And
I apologize to the Court for that. So, I will defer my
request for admission of 1, 6, and 31, until I can clarify
whether or not we changed those numbers.
THE COURT: All right.
MR. PEEK: Because I don't want Mr. Sunshine to
say, well, I looked at 1, 6, 9, and 31 --
THE COURT: Okay. So we'll defer, and we'll
take care of this housekeeping matter in the morning.
MR. PEEK: Okay.
THE COURT: All right. So the time is 2:35.
You may call your witness.
MR. PEEK: Mr. Montgomery is on the stand,
Case 3:06-cv-00056-PMP-VPC Document 833 Filed 09/03/08 Page 37 of 150
8/20/2019 Montgomery v eTreppid #833 | 8/18 OSC Hearing Transcript
38/150
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
KATHRYN M. FRENCH, RPR, CCR(775) 786-5584
38
Your Honor.
THE COURT: Mr. Montgomery, please.
DENNIS ONTGOMERY,called as a witness on behalf of the Defendant,was sworn and testified as follows:
THE CLERK: Please state your full name for the
record.
THE WITNESS: Dennis Lee Montgomery.
THE CLERK: Thank you. Please be seated.
DIRECT EXAMINATION (resumed)
BY MR. PEEK:
Q Mr. Montgomery, when we had left off on June 24th, I
had been discussing with you the e-mails that you had
produced that you claim, that you said were responsive to
our requests for all e-mails provided to media, whether it be
the Wall Street Journal, New York Times or NBC news.
Do you recall that from two months ago now?
A Yes.
Q And that was Exhibit 9.
And then we certainly had Exhibit 9 and replaced and
redacted. So if the clerk could hand him Exhibit 9. That's
in Volume II.
A Okay. What page?
Q Just the exhibit itself, sir.
A All right.
Case 3:06-cv-00056-PMP-VPC Document 833 Filed 09/03/08 Page 38 of 150
8/20/2019 Montgomery v eTreppid #833 | 8/18 OSC Hearing Transcript
39/150
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
KATHRYN M. FRENCH, RPR, CCR(775) 786-5584
39
Q I'll be asking you some questions about it, but I just
wanted to have it available to you.
Some preliminary questions. We all know that
there were e-mails delivered to the Wall Street Journal and
NBC News, do we not?
A I believe so.
Q And your testimony has been that you don't know yourself
whether or not you delivered those to Mr. Wilke -- and I'm
just going to deal with Mr. Wilke first -- or whether
Mr. Flynn did that.
Is that correct?
A Yes.
Q Have you had any opportunity to go back and review any
of your correspondence, or documents of these, particularly,
to determine whether or not it refreshed your recollection as
to whether it was you or Mr. Flynn who delivered those to the
Wall Street Journal?
A No.
Q Okay. And I think you told us, and I just want to make
sure that I'm correct, is that all of these e-mails came,
originally, from your computer.
Am I correct?
A No. I don't believe I said that.
Q Okay. You said that they had been placed in some kind
of -- well, your commuter, or some other form of electronic
Case 3:06-cv-00056-PMP-VPC Document 833 Filed 09/03/08 Page 39 of 150
8/20/2019 Montgomery v eTreppid #833 | 8/18 OSC Hearing Transcript
40/150
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
KATHRYN M. FRENCH, RPR, CCR(775) 786-5584
40
media.
Is that correct?
A I believe so.
Q In other words, Mr. Flynn didn't have these in his
possession at a time before you did?
A Before I did? Uh, I don't -- I don't think I understand
the question.
Q Well, you had the e-mails in some electronic form, did
you not, before --
A Yes.
Q -- Mr. Wilke ever came into the picture?
A Yes.
Q Okay. And you had them in electronic form, did you not?
A Yes.
Q And on what type of media or storage did you have the
e-mails?
A I think it was a disk storage.
Q And has that disk drive been produced?
A No.
Q And where is that disk drive?
A Well, I'm still going through the rest of the drives.
Q Okay. So in the last two months -- well, actually, since
at least February -- or excuse me, since November, when the
request was sent out, you have still been unable to review all
of the hard drives to determine on what hard drives you may
Case 3:06-cv-00056-PMP-VPC Document 833 Filed 09/03/08 Page 40 of 150
8/20/2019 Montgomery v eTreppid #833 | 8/18 OSC Hearing Transcript
41/150
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
KATHRYN M. FRENCH, RPR, CCR(775) 786-5584
41
have kept the e-mails --
A That's correct.
Q -- you received, or you took from eTreppid?
A That's correct.
Q Okay. And what is your explanation for not having done
that, despite the Court's orders?
A Because I've been working on the protected information
under the Protective Order.
Q Okay. And I believe you have submitted some hard drives
to the government, with respect to that?
A Yes.
Q Okay. Do you still have the media -- excuse me, the hard
drives which contained all of the e-mails that were taken by
you and put on these hard drives?
A I'm not certain if that's the case or not.
Q Okay. And what would have happened to all of the
e-mails?
A You mean the hard drives?
Q Yeah. Hard drives or whatever.
A I mean, they could have fail. We have a number of drives
that are dead.
Q Okay.
A I don't know. There's a lot of information. There's
been a lot of drives. And as I've stated before, the drives
have been in multiple people's hands.
Case 3:06-cv-00056-PMP-VPC Document 833 Filed 09/03/08 Page 41 of 150
8/20/2019 Montgomery v eTreppid #833 | 8/18 OSC Hearing Transcript
42/150
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
KATHRYN M. FRENCH, RPR, CCR(775) 786-5584
42
Q Okay. But you now have them in your hands, is
that correct?
A Well, I think the one that --
Q I'm talking about all of the e-mails, the original
complete e-mails, PST files in native format; you have all
of those, do you not?
A Have all of those e-mails?
Q Yes, sir.
A No. I didn't say that. If I did, I didn't say it
correctly.
Q Okay. Well, where did those e-mails originate that were
then provided to somebody to provide to Mr. Wilke?
A Off a drive.
Q Okay. Off a drive.
And were those the complete, original e-mails, the
PST files in native format?
A I don't understand. I don't -- restate the question
again.
Q Do you know what a PST file is?
A Yes, I do.
Q You know what a complete original is?
A You mean a PST file?
Q Yes.
A Okay.
Q And native format, you understand that?
Case 3:06-cv-00056-PMP-VPC Document 833 Filed 09/03/08 Page 42 of 150
8/20/2019 Montgomery v eTreppid #833 | 8/18 OSC Hearing Transcript
43/150
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
KATHRYN M. FRENCH, RPR, CCR(775) 786-5584
43
A The PST file.
Q In native format; meaning it has all the metadata
associated with it.
A Yeah.
Q Where are those?
A The, uh -- I, I found one, one drive recently. And I
was about to produce it, but I ended up doing the Source Code,
to try to get that part done today.
Q And when did you find that one drive?
A Um, about two weeks ago.
Q And when did you begin to look for those drives that
contained the original PST files in native format?
A Well, what I've been looking for is all the stuff under
the Protective Order.
Q That's not what I asked for, sir.
When did you begin to look for the PST files in
native format that were the subject matter of the request to
produce?
A In February.
Q So February, until today, you have only recently located,
in the last two weeks, a Drive that may contain some of those
original PST files in native format?
A That's correct.
Q And do you have an explanation as to why you were unable
to locate it from -- in the last, well, six months?
Case 3:06-cv-00056-PMP-VPC Document 833 Filed 09/03/08 Page 43 of 150
8/20/2019 Montgomery v eTreppid #833 | 8/18 OSC Hearing Transcript
44/150
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
KATHRYN M. FRENCH, RPR, CCR(775) 786-5584
44
A I've been going through the drives one by one.
Q Okay. And you recently produced, I believe, 21 hard
drives.
You are aware of that, are you not?
A Yes.
Q And were those hard drives that you produced hard drives
that had, that you obtained through your backing up of the
various computers at eTreppid?
A These are not the FBI ones, I presume. I, I don't recall
what -- I would say, yes. I think I, I understand the ones
that you're referring to.
Q Okay. So the 21 that were recently produced were, came
from backups that you had taken from the eTreppid computers,
is that correct?
A They were backups that were made.
Q Backups that you made, or backups that others made?
A I don't recall who, who made them.
Q Okay. But somebody made them?
A Yeah. Yes.
Q And I think we went through this before, but I'll ask it
again, is that wouldn't you expect to see PST files on these
backups, these 21 hard drives?
A No.
Q Why not?
A Because most of the time the file was open and it was
Case 3:06-cv-00056-PMP-VPC Document 833 Filed 09/03/08 Page 44 of 150
8/20/2019 Montgomery v eTreppid #833 | 8/18 OSC Hearing Transcript
45/150
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
KATHRYN M. FRENCH, RPR, CCR(775) 786-5584
45
passed over.
Q And so most of the time, but not all of the time.
A That's probably correct.
Q Okay. So there should be some PST files in the backups,
should there not be?
A Yes.
Q Okay. And did you look through any one of these 21 hard
drives to determine whether there were or were not any PST
files?
A Yes.
Q And did you find any?
A No.
Q And did do you have an explanation as to why you found no
PST files from the 21 hard drives that you obtained from the
backing up of the various computers from eTreppid?
A Restate that.
I'm sorry I'm insulting you to restate the question.
Q You're not insulting me.
A But, well, you make faces every time I ask you a
question.
Q Well, it's because I think the question was clear.
A Obviously, it wasn't clear to me.
Q I'll ask it again to make it clear to you. And I'll ask
it exactly the same way I asked it before, if I can.
You told us that you took backups of all of the
Case 3:06-cv-00056-PMP-VPC Document 833 Filed 09/03/08 Page 45 of 150
8/20/2019 Montgomery v eTreppid #833 | 8/18 OSC Hearing Transcript
46/150
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
KATHRYN M. FRENCH, RPR, CCR(775) 786-5584
46
computers, correct?
A I said I made backups.
Q You told us that during the course of the backups that,
from time to time, there would have been backups of the e-mail
folders which are PST files, correct?
A That's correct.
Q What explanation do you have that, on the 21 hard
drives that you obtained from making backups of the eTreppid
computers, from time to time, why there are no PST files on
there?
A Because at some point they may have been transferred onto
another drive.
Q Well, is that they may have been, or they were
transferred to another drive?
A I don't recall either way.
Q So the only explanation you have as to why there are no
PST files on these 21 hard drives recently produced, is that
they may have been transferred to another hard drive?
A Yes. And I told you I found one recently.
Q I understand you found one recently. But I'm just trying
to understand, sir, that your only explanation for there not
being any on the 21 hard drives, is that you may have but --
you don't know whether you did, transfer PST files to another
hard drive?
A I wouldn't say that's the only explanation.
Case 3:06-cv-00056-PMP-VPC Document 833 Filed 09/03/08 Page 46 of 150
8/20/2019 Montgomery v eTreppid #833 | 8/18 OSC Hearing Transcript
47/150
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
KATHRYN M. FRENCH, RPR, CCR(775) 786-5584
47
Q Well, what other one is there?
A They've not been in my possession the entire time.
Q Are you suggesting that somebody may have deleted the PST
files from that?
A I don't know that for a fact either way.
Q Okay. And so, who, besides yourself -- well, let me go
through the list you gave me before.
One, they weren't in the possession of the FBI,
those 21 hard drives?
A No.
Q That's correct?
A That's correct.
Q Okay. So the FBI wouldn't have done anything about them,
correct?
A That's correct.
Q And I think the other people that you described to us,
from time to time, who may have had possession of these are
your lawyer, Michael Flynn -- that's one?
A Yes.
Q Secondly, would be Michael Flynn, Junior?
A That's correct.
Q And I don't believe there's anybody else that you told
us.
A Yes.
Q Is that correct? Nobody else?
Case 3:06-cv-00056-PMP-VPC Document 833 Filed 09/03/08 Page 47 of 150
8/20/2019 Montgomery v eTreppid #833 | 8/18 OSC Hearing Transcript
48/150
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
KATHRYN M. FRENCH, RPR, CCR(775) 786-5584
48
A No. There is another person.
Q Who is that?
A Al Rava.
Q Excuse me, Al Rava? That's a new name that we haven't
heard before.
Who a Al Rava?
A Well, he was an associate of Mr. Flynn's.
Q So he was your lawyer?
A That's correct.
Q Are you suggesting that any one of those three
individuals may have deleted the PST files from the 21
hard drives?
A I'm not suggesting that either way.
Q Okay. Well, you're suggesting that people who had
possession of it may have compromised those hard drives.
So the only --
A You've asked me --
Q -- information is somebody deleted the PST files?
A You asked me for another possibility. I gave you one.
Q Well, is that a possi -- just sort of a -- there's always
a possibility. Is there a real reasonable probability that --
A I wouldn't rule out anything with Mr. Flynn.
Q Okay. And when was it that you gave Mr. Flynn the
backups for the eTreppid computers?
A You mean the backup drives that I had?
Case 3:06-cv-00056-PMP-VPC Document 833 Filed 09/03/08 Page 48 of 150
8/20/2019 Montgomery v eTreppid #833 | 8/18 OSC Hearing Transcript
49/150
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
KATHRYN M. FRENCH, RPR, CCR(775) 786-5584
49
Q The backups drives that you had, that should have
contained PST files.
A A few days before the raid on my home.
Q Okay. And then for how long did he have them in his
possession?
A Um, that may not be accurate.
Can you ask the previous question again.
Q When did you give them to Mr. Flynn?
A All right --
Q You said a few days before the raid.
A It may have been before that. It may have been -- some
of them may have been when I first met him in late January or
early February of '06.
Q Okay. So sometime, again, prior to the raid.
And for how long did he keep them?
A I would say five or six months.
Q Okay. And then what happened to them after Mr. Flynn had
them in his possession?
A Didn't we go through --
Q We did with respect to the FBI inventory.
A I think you did.
Q I didn't go through it, however, with everything else
that you had.
A I think you did, but I'm --
Q I went through it with respect to the hard drives; the
Case 3:06-cv-00056-PMP-VPC Document 833 Filed 09/03/08 Page 49 of 150
8/20/2019 Montgomery v eTreppid #833 | 8/18 OSC Hearing Transcript
50/150
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
KATHRYN M. FRENCH, RPR, CCR(775) 786-5584
50
terabyte and the 500 gigabyte. But, I did not go through it
with the more recent 21 hard drives you just produced.
A I don't -- what do you mean the terabyte? I'm not
being --
Q You produced, sir, in May --
A Oh, yeah.
Q -- one terabyte hard drive, and one 500 gigabyte hard
drive, sir.
A You're right.
Q You told us, and I went through the examination with you
there --
A Okay.
Q -- where the data had been. And you gave us an
explanation.
So are you going to tell us that the same
explanation that you gave me and this Court, in the two
June hearings, would be the same explanation that you would
give today?
I'm trying to short circuit it, if I can.
A No.
Q No? It was a different explanation.
A Well, I don't have my exact explanation.
See, the facial expressions really gets annoying.
Q I'm sorry it gets annoying to you, sir, but that's me.
A Uh --
Case 3:06-cv-00056-PMP-VPC Document 833 Filed 09/03/08 Page 50 of 150
8/20/2019 Montgomery v eTreppid #833 | 8/18 OSC Hearing Transcript
51/150
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
KATHRYN M. FRENCH, RPR, CCR(775) 786-5584
51
Q Your evasiveness bothers me, too.
MR. SUNSHINE: Your Honor --
THE COURT: All right. All right.
Go ahead, Mr. --
THE WITNESS: I'm not trying to be evasive,
Your Honor.
THE COURT: I know. All right.
I think we're -- you had some confusion about what
Mr. Peek was alluding to. He's now clarified it. So, go
ahead and answer the question, sir.
BY MR. PEEK:
Q They were in Mr. Flynn's possession for six months.
What happened to them after that?
A I think -- I thought I said five.
THE COURT: You said five to six.
THE WITNESS: Okay. Five to six months.
Uh, they were moved to Seattle -- well, Mike Flynn,
you're referring to the father?
BY MR. PEEK:
Q You said -- I thought you meant Mike Flynn, your
attorney, is who you gave them to --
A Yes. But, he put them in a storage facility that was
under was Al Rava's name in San Diego.
Q Okay.
A So I don't want -- at least that's what I was told it
Case 3:06-cv-00056-PMP-VPC Document 833 Filed 09/03/08 Page 51 of 150
8/20/2019 Montgomery v eTreppid #833 | 8/18 OSC Hearing Transcript
52/150
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
KATHRYN M. FRENCH, RPR, CCR(775) 786-5584
52
was. I don't -- I really don't know that for a fact but, I
mean, that's what I was told they were.
Q Let me just ask a quick question then.
A Yes.
Q Is that true then of all backup drives, including the
data that was produced to us on the terabyte drive and the
500 gigabyte drive, is they were put in a storage unit under
Al Rava's name in San Diego?
A Uh, I'm thinking. I'm not -- I think the answer to that
is that's correct. Yes.
Q Okay. And then they, they stayed there for five to six
months?
A I don't know. I'm thinking.
It was roughly that amount of time.
Q Okay. So that would put us sometime in August, September
of 2006?
A Six; that's correct.
Q Where did they go from there?
A Seattle.
Q In your possession, or in somebody else's possession?
A Uh, they were -- there were three scenarios. One, there
was a storage facility in Seattle. You know, a commercial
storage facility. Michael Flynn, Junior took them originally,
and kept them with him in a storage facility in Portland,
Oregon.
Case 3:06-cv-00056-PMP-VPC Document 833 Filed 09/03/08 Page 52 of 150
8/20/2019 Montgomery v eTreppid #833 | 8/18 OSC Hearing Transcript
53/150
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
KATHRYN M. FRENCH, RPR, CCR(775) 786-55