30 June 2000. Thanks to Anonymous.
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1 1 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK 2 ---------------------------------------x 3 UNIVERSAL CITY STUDIOS, INC., et. al., 4 Plaintiffs, 5 v. 00CV277(LAK) 6 ERIC CORLEY, et. al., 7 Defendants. 8 ---------------------------------------x 9 June 27, 2000 10 4:00 p.m. 11 Before: 12 HON. LEWIS A. KAPLAN, 13 District Judge 14 APPEARANCES 15 PROSKAUER ROSE LLP Attorneys for Plaintiffs 16 1585 Broadway New York, N.Y., 10036-8299 17 BY: CHARLES S. SIMS LEON GOLD 18 FRANKFURT GARBUS KLEIN & SELZ PC 19 Attorneys for Defendants 488 Madison Avenue 20 New York, N.Y., 10022\ BY: MARTIN GARBUS 21 EDWARD HERNSTADT 22 MARK D. LITVACK Motion Picture Association 23 24 25 2 1 (In open court) 2 THE DEPUTY CLERK: Universal City Studios, Inc., et 3 al., v. Eric Corley, et al. Is the plaintiff ready? 4 MR. GOLD: Yes. 5 THE DEPUTY CLERK: Defendants ready? 6 MR. HERNSTADT: Yes. 7 THE COURT: We're going to deal with two 8 subjects this afternoon, the parties' application with respect 9 to the deposition of Mr. Eisner and the other is the 10 defendants' latest request to adjourn the trial. Mr. Gold, on 11 the first issue. 12 MR. GOLD: With respect to Mr. Eisner, your Honor, we 13 have submitted correspondence to you that I think lays out the 14 situation. Mr. Eisner will not be testifying. We don't 15 believe he has firsthand personal knowledge of any of the 16 issues. 17 THE COURT: You say he will not be testifying. 18 MR. SIMS: Mr. Eisner he will not be testifying. 19 THE COURT: I thought that was up to me to decide. 20 MR. SIMS: I'm sorry. At trial, we're not calling 21 him as a witness at trial. Whether he's deposed is entirely 22 up to you, your Honor, but it ought not to be a reason to 23 depose him that he is expected to testify at trial, because we 24 have no intention of presenting him at trial. The only 25 basis -- I've gotten a letter from defendants today and I 3 1 don't know if your Honor yet has that letter that explains why 2 in their view -- 3 THE COURT: There has been a traffic jam to my 4 anteroom today. 5 MR. SIMS: I'm sorry. I believe every one of our 6 letters has been responsive, but, in any event, I did just get 7 their letter, and it's dated June 27th to your Honor, and I 8 must say having read it, I think it makes the case why he is 9 not an appropriate witness and ought not to be deposed, not 10 why he ought to be. I have done a search through Lexis and 11 Nexis of Mr. Eisner with a paragraph of either DCSS or TSS and 12 come up with nothing other than an article in the Village 13 Voice dated today, so I'm glad to answer any questions. 14 We have offered them weeks ago either Mr. Preston or 15 Mr. Sanford Litvack both of whom know substantially more or 16 more than Mr. Eisner on the general subject which I think is a 17 subject appropriate for Congress, and not really for a case in 18 an Article 3 Court on the general subject of piracy and why 19 the statute was urged upon Congress, and it was in fact 20 passed, but as to specific information that we understand to 21 be relevant to any issue in this case or calculated to lead to 22 the discovery of any such issue, we don't think Mr. Eisner has 23 that testimony, and given the position, the business of his 24 schedule, we don't think it's appropriate. 25 If they wanted to start with Mr. Litvack or 4 1 Mr. Patton and then found some basis to depose Mr. Eisner we 2 might be in a different place. I can't imagine that that 3 would happen, but certainly on the present record I think the 4 deposition should be not permitted. 5 THE COURT: Mr. Garbus, Mr. Hernstadt. 6 MR. HERNSTADT: Good afternoon, Judge. Actually we 7 think that their initial letter to the Court proves our case, 8 Mr. Eisner has significant personal knowledge -- 9 THE COURT: Well, he's probably right. 10 MR. HERNSTADT: -- about the Internet, about the 11 piracy in the Internet about specifically technologies like 12 DVDs, about -- he did presentations to, power point 13 presentations showing slides of stills taken from different 14 movies which he made point of informing the audiences that 15 licenses to take out DVDs where he made a similar presentation 16 to Congress testifying before the legislative body. 17 THE COURT: What in any event does that have to do 18 with the issues in this case? 19 MR. HERNSTADT: We believe Mr. Eisner is also well 20 informed about the advent of broad band when the Internet is 21 actually going to be a legitimate vehicle for piracy which he 22 says in letters to employees and his resignation is immediate 23 risk. More importantly we need to know from Mr. Eisner where 24 he gets his information, what do the plaintiffs know, and the 25 MPAA when did they know it. 5 1 THE COURT: Why is that relevant? 2 MR. HERNSTADT: That at least two of the defense, one 3 defense, that they knew at the time, your Honor, you summed up 4 what his argument is, he was sold a bill of goods. They knew 5 at the time they filed this case that UCSS did not present a 6 threat of piracy and that their allegations and statements -- 7 THE COURT: Don't we get to the issue of what they 8 knew and when they knew it if and when they use the thing and 9 you then move for sanctions? 10 MR. HERNSTADT: I think that's one time we would get 11 to the issue, but I think we have to be able to prove it. The 12 only way to prove it is if we find out when they knew it and 13 what they knew. 14 THE COURT: You're telling me the only way of proving 15 that ECCS doesn't create any risk of privacy is through the 16 mouth of Michael Eisner? 17 MR. HERNSTADT: No. What I'm telling you is that is 18 one of the ways he's acting in bad faith. We can certainly 19 prove that DCSS doesn't prove the risk of piracy through the 20 witnesses. 21 THE COURT: If they produce evidence in court here 22 that establishes that you violated DMTA and there is a risk of 23 irreparable harm the fact, if it be a fact, that they went off 24 half cocked before they had the information doesn't help you 25 one bit, does it? 6 1 MR. HERNSTADT: If that were true, but we don't 2 believe that will be proven. 3 THE COURT: If it's not proved you can then move for 4 sanctions afterwards if you think you can prove what you now 5 say. 6 MR. HERNSTADT: We say also that if they come to a 7 court of equity seeking an injunction that injunction must be 8 denied so their knowledge at the time they filed the suit is 9 very relevant. 10 THE COURT: Unclean hands is a defense. It's a plea 11 in abatement. It is an argument that says even if the 12 plaintiff has established that they are otherwise entitled to 13 win, because of their inequitable behavior we win even though 14 they are right on the merits, correct? 15 MR. HERNSTADT: Yes, sir. 16 THE COURT: Okay. Now, if they're right on the 17 merits you have no defense based on the fact, if it be a fact, 18 that they didn't have an adequate basis when they started for 19 thinking they were right if in fact they come up with the 20 goods by the time of trial, isn't that true? 21 MR. HERNSTADT: Not exactly, because their whole case 22 is one that doesn't look at harm, and if the Court for some 23 reason determines that harm is not a part of the statute then 24 we feel we have this defense in hand. We think that the 25 statute 1201 includes, must include a notion of harm. You 7 1 can't forbid a right that doesn't cause harm. 2 THE COURT: Assume you're right, we go to trial and 3 they prove harm. Let's take that hypothetical. They win, 4 right? 5 MR. HERNSTADT: Under your hypothetical, yes. 6 THE COURT: And they win even if at the date they 7 file the complaint they didn't have the evidence in hand. 8 MR. HERNSTADT: Right, your Honor, that is one of the 9 ways in which unclean hands would apply in this defense. 10 That's only one of the defenses. The other way which I 11 suggest applies if the Court on the one hand accepted their 12 argument -- I don't think you will, and I hope you won't -- 13 but their argument that in fact this is incredibly simple 14 case, this is banned the provision of certain devices, this is 15 a circumvention device, case over, let's go home. 16 One of the things you want to show is that it has to 17 have a necessary of harm, and if they didn't know at the time 18 they filed the suit that there wasn't any harm, in fact they 19 knew the opposite, I don't think, in fact, I'm quite positive 20 they're not going to be able to show harm now, and, therefore, 21 I accepting your hypothetical because you've asked me to. I 22 don't think that is what is going to be shown. In fact, I'm 23 quite sure it won't be. It's technologically not possible to 24 use the Internet in any way at all right now and for the next 25 two years to transmit the DVD. It is not a vehicle that will 8 1 cause any harm whatsoever to the defendants, and I believe 2 that they knew that. 3 THE COURT: And it's your position they will not be 4 able to prove otherwise at trial. 5 MR. HERNSTADT: That's correct, sir. 6 THE COURT: How does it advance your case to prove 7 that six months ago they couldn't have proved otherwise. 8 MR. HERNSTADT: I think it's important for us to know 9 not just intent, but also for waiver. 10 THE COURT: Waiver? 11 MR. HERNSTADT: Yes. They were aware back in October 12 DVDs had been purchased all over the world on hundreds and 13 hundreds of sites and they did nothing about it. They brought 14 one suit against three defendants in New York, and that's it. 15 They've done absolutely nothing to stop this terrible threat, 16 the threat to destroy the business, to destroy the movie 17 industry. This dire threat that had done been quoted in 18 Variety, The New York Times, and in front of Congress saying 19 it poses a potentially fatal threat to the movie business. 20 There has been nothing about it. 21 And I think what he knew as a very prominent the CEO, 22 of one of the plaintiffs is relevant in this case. He made it 23 an issue. He's injected himself into the debate. He's used 24 his prominence and his influence to try and persuade the 25 public and legislatures that -- 9 1 THE COURT: Yes. But before me is not a public 2 debate. The issue is this lawsuit. 3 MR. HERNSTADT: I understand that. 4 THE COURT: I'm not adopting legislation or any of 5 these other things you seem to be worried about. 6 MR. HERNSTADT: I understand that. The reason we 7 think that Michael Eisner is appropriate person to be deposed, 8 he probably has a great deal of information if he can present 9 power point presentation to Congress and selected audiences. 10 THE COURT: Last time I looked there are six year 11 olds who present power presentations. 12 MR. HERNSTADT: He's talked very intelligently about 13 the presentation he was giving, at least in the transcript 14 that we were given. We haven't actually seen his 15 presentation. He knows something. He knows a great deal. I 16 will note by the way that we had noticed his deposition and 17 the plaintiff has not produced him, I think the reason being 18 that there was some kind of a quid pro he quo, they would give 19 us Mr. Litvack and we would have to give up Mr. Eisner. I 20 think even today they tend to show that the appropriate way to 21 do is produce Mr. Litvack, we insist Mr. Litvack, sounds sort 22 of backwards, but the reality is Mr. Litvack was not at these 23 presentations, he didn't make these presentations. It's 24 impossible for me to understand why he would have more 25 information about these presentations. It's not just the 10 1 presentation, it's also what did he say, what did people say 2 to him? How well known is it that it doesn't present any 3 threat of harm or risk of danger? 4 THE COURT: What difference does that make to this 5 case? 6 MR. HERNSTADT: I think the difference it makes to 7 this case that there are cases that distinguish an incredibly 8 dangerous device. 9 THE COURT: If you are right, they are going to lose 10 given your premise about harm. 11 MR. HERNSTADT: Well, I mean I think that we can 12 learn from Mr. Eisner what he's been told and who told him 13 that will also give us other people that we may wish to 14 depose. You know, perhaps what you're saying is that Mr. 15 Eisner's deposition is most appropriately taken in the course 16 of a sanctions hearing if we win, if they show that as a 17 matter of negotiation and as a matter of law that the 18 plaintiffs knew at the time they filed the case it didn't 19 impose a risk, you know then I guess his public statements 20 might be relevant, then it seems to us that it's important to 21 get it now because it's not only, because it will lead we 22 believe to the discovery of admissible evidence. 23 THE COURT: How? 24 MR. HERNSTADT: What does he know? When did he know 25 it? Who told him? What was he given? Was he given 11 1 documents? 2 THE COURT: You keep saying that. 3 MR. HERNSTADT: Yes. 4 THE COURT: The point you are not being responsive to 5 is why does it matter what he knew, who told him, et cetera? 6 MR. HERNSTADT: I think that goes to defense of 7 waiver. 8 THE COURT: Tell me what the waiver argument is. 9 When I went to law school waiver was defined as the 10 intentional relinquishment of a known right. 11 MR. HERNSTADT: Right. 12 THE COURT: Now, do you really legitimately stand 13 here and represent to me as a member of the bar of this court 14 that you think you are going to get Michael Eisner to say 15 directly or indirectly anything that would support a 16 responsible argument that Disney deliberately decided not to 17 pursue other web sites because it wished to surrender whatever 18 rights it might have? Is that really what you are saying to 19 me? 20 MR. HERNSTADT: Your Honor, I don't think that's what 21 we have to show. 22 THE COURT: Well, I do. 23 MR. HERNSTADT: That his intentional relinquishment 24 that was a choice were it to relinquish the rights? I think 25 the waiver -- 12 1 THE COURT: Relinquishment of a known right, the 2 Supreme Court the Second Circuit, the New York Court of 3 Appeals that is the standard. 4 MR. HERNSTADT: I think what we will be able to show 5 is that what they relinquished, the right that they 6 relinquished and they knew they were relinquishing is a right 7 that was intangible, it didn't exist. In other words, they 8 didn't have to go out to other web sites because they knew 9 that there was nothing to go out there, that he didn't approve 10 a threat, that it wasn't dangerous. This case I think is a 11 test. They want to get a court in the Southern District 12 preferably that will stamp am imprimatur. 13 THE COURT: Let me ask you this. Suppose you were 14 defending Brown versus Board of Education and you came in and 15 said that you wanted to take the deposition of Thurgood 16 Marshal for the purpose of showing that the NAACP knew that 70 17 percent of the school districts in the United States were 18 segregated, and that they elected to sue only the school board 19 of Topeka, Kansas in order to show that the NAACP waived their 20 right to challenge segregated public schools in the United 21 States. You like that argument? Is that a good one? 22 MR. HERNSTADT: I don't think that's the analogy 23 here. 24 THE COURT: I think it's pretty darn good, counsel. 25 MR. HERNSTADT: Your Honor, I think the analogies are 13 1 different. That would presume that Thurgood Marshal knew that 2 segregation wasn't a problem. In this situation they know. 3 THE COURT: Mr. Hernstadt, let me have that one 4 again. 5 MR. HERNSTADT: That Thurgood Marshal would know that 6 segregation isn't a problem. In other words, what we're 7 saying is that the reason that they brought the lawsuit here 8 and nowhere else is that they know it's not a threat. They 9 have no reason to go after DCSS in other jurisdictions. 10 THE COURT: Do you have another argument? 11 MR. HERNSTADT: For Mr. Eisner? 12 THE COURT: Yes. 13 MR. HERNSTADT: Well apart from ordinary course of 14 discovery he is a person with knowledge as opposed to the CEOs 15 and executives in cases cited by the plaintiff. He has 16 personal knowledge, and he's someone who can tell us, who can 17 give us discovery that would lead to the production or 18 discovery of admissible evidence. 19 THE COURT: You're going to ask him pretty much the 20 questions that were asked of Mr. Valenti. 21 MR. HERNSTADT: Those will be some of them. I think 22 we'll ask him more specific questions because we have 23 statements from him. 24 THE COURT: Anything else on the is issue? 25 MR. HERNSTADT: No, sir. 14 1 MR. SIMS: Nothing other than I think the colloquy 2 your Honor has just had makes plain that the defense which 3 underlies almost all of this discovery that we've been 4 slogging away with lately which is variously referred to as 5 waiver or selected prosecution, and today we heard unclean 6 hands, there is no there there. 7 Your Honor's early opinion lays out the elements of 8 the 1201 violation. Harm was an element on the preliminary 9 injunction, but it is not an element of the violation of 1201 10 itself and on the final trial of this matter one can read the 11 statute 15 times and be left totally unpersuaded that the 12 elements that Mr. Hernstadt believes are -- 13 THE COURT: Let's not get carried away. In order to 14 get an injunction even on a final trial you have to establish 15 the lack of adequate remedies at law, right? 16 MR. SIMS: That's correct, but I don't think it's the 17 same standard. 18 THE COURT: And the charge is that whatever remedy or 19 lack thereof is inadequate. 20 MR. SIMS: There is no question unless there is a 21 threat of harm and I think we'll have no trouble and great 22 success. 23 THE COURT: I look forward to hearing about it. All 24 right. Let's go on to the other question which is your 25 request for adjournment. 15 1 MR. HERNSTADT: Your Honor, I don't know how much you 2 want to hear about that. 3 THE COURT: Anything you want to say within 4 reasonable temporal limits. 5 MR. HERNSTADT: Okay. The reason I say that is 6 because we provided your Honor with a number of letters. They 7 provided you with a number of letters. The realities I think 8 are this: By your order dated May 12th you moved the trial up 9 from December 5th to July 17th and you closed discovery from 10 October 20 to July 5. Between May 12 and June 7 defendants 11 were given exactly five depositions and we received virtually 12 no documents. From June 8 -- 13 THE COURT: The last letter I got from you complained 14 that you had 13,000 documents. 15 MR. HERNSTADT: Of which 13,000 provided in the last 16 two weeks. Since June 14 we've gotten 13,000 documents of 17 which nine thousand we got in the last four days. We got on 18 June 22 we got about 500 and on yesterday we got another four 19 thousand. In other words, what happened is during the first 20 four or five weeks after June, you moved the trial up and 21 permitted parties to engage in expedited discovery, we got 22 virtually nothing. 23 THE COURT: Isn't it at least part of the reason for 24 that between January and May 12th you did essentially nothing? 25 MR. HERNSTADT: We didn't come -- 16 1 THE COURT: For example, as of May 11th which is when 2 I raised the issue of moving up the trial, isn't it a fact 3 that you had noticed the deposition of the plaintiffs 30(b)(6) 4 notices and I believe no one else. 5 MR. HERNSTADT: The MTAA and Jack Valenti. 6 THE COURT: And that now you have noticed some thirty 7 or more depositions and with the exceptions of the eight 8 plaintiffs and the MCAA all of the them were noticed after the 9 trial date was set. 10 MR. HERNSTADT: I would have to look at that chart. 11 I'm not -- I imagine that that's the case, your Honor. 12 THE COURT: I did look at the chart, and I imagine 13 it's the case, too. 14 MR. HERNSTADT: Okay. Part of the reason is most of 15 the people that we have noticed I think the major reason for 16 that is most of the people we noticed were people that we got 17 their names through depositions. In other words, of Mr. 18 Schuman and of Mr. Jacobson, and particularly Mr. Jacobson. 19 Some of the other ones we got off of web sites. 20 You know, your Honor, we came into the case the end 21 of March and there was a very -- we came in literally -- or 22 the middle of March. We came in five days before we met with 23 your Honor for the first conference which the trial date and 24 the discovery date that we requested then reflected our 25 assessment of the complexity of the case, the amount of work 17 1 that we have to do in a very short period of time and the 2 number of people that we have to talk to around the world. 3 We have seen that in fact to be the case. Witnesses 4 are in Norway, California, Texas, New York, Boston, Cambridge, 5 Princeton, New Jersey. They're all over the country. They 6 are difficult to get ahold of. A lot of them are academics 7 who take the summer off, they spend the summer going to 8 conferences around the world, bless their hearts. 9 THE COURT: I know. I'm very close to an academic 10 who does that. 11 MR. HERNSTADT: So you understand that. 12 THE COURT: Believe me I do. 13 MR. HERNSTADT: It took us a little while to get up[End]14 to speed and as soon as we got up to speed we started and by 15 the way within two weeks of our or three weeks of our entry in 16 this case the plaintiffs filed a motion to expand the 17 injunction to include Reimerdes. During the time practically 18 that we've been involved in the case we had a May 2nd 19 opposition, we had a cross motion. On June 4th the plaintiffs 20 replied on June 13th. Then there was a privilege motion on 21 June 13th, June 19, June 21. There has been extensions as you 22 know motion practice. 23 During the first four or five weeks after the May 12 24 order we got virtually nothing in terms of discovery. 25 Starting about June 15, June 20, the plaintiffs suddenly 18 1 started making their demands. They didn't notice any 2 depositions until well Mr. Corley noticed June 7. They didn't 3 notice any other dispositions until the end of June. They've 4 had the names of these clients since the beginning of May, but 5 they waited until the end of June. Very little time was left 6 by the time they started to say now we want to take 15 7 depositions, we want to take ten depositions. 8 THE COURT: They are not going to get to take them 9 all. 10 MR. HERNSTADT: Your Honor, some of these people are 11 in Norway, some of these are in California, some these people 12 are in Texas, some of these people are not available for the 13 trial. Even if they don't want to take the depositions some 14 of them we need to take because they won't be able to come to 15 appear. 16 THE COURT: You were actually in the case by the 17 middle of February, weren't you? 18 MR. HERNSTADT: No. 19 THE COURT: Mr. Garbus told me on May 2nd on the 20 record that you had been in the case and doing everything 21 humanly possible for two and a half months already. 22 MR. GARBUS: Well, I don't have that in front of me. 23 We went into the case, I think we had a court conference with 24 the court and we had been retained the weekend before whenever 25 that weekend was. 19 1 THE COURT: On May 2 you said: "My client has done 2 everything, everything, everything that you can conceivably do 3 in the last two and a half months since I've been involved in 4 this case to bring this matter before you and to start in 5 discovery." 6 MR. GARBUS: I don't have a sense of the chronology. 7 I appeared before the Court and I said that we had been 8 finally retained over the weekend, so I don't know when that 9 is said. 10 THE COURT: You said it on May 2nd. This is said May 11 2. 12 MR. GARBUS: All I can tell is what I said when we 13 met back in the courtroom, namely, that I'd been retained. 14 And let me just relate to something else. He said I'd been 15 retained the weekend before we appeared in court and that's 16 what I told the Court at the court conference. The other 17 thing I want to point out is with respect to the depositions 18 we had sent out the depositions to eight plaintiffs, and the 19 depositions for eight plaintiffs when we got into the question 20 of the option of people from the MPA which they said 21 originally was with respect to the eight plaintiffs you don't 22 have to produce one because they all have the same knowledge 23 we learned not to be true. When we got the discovery log we 24 found each of them had different documents. I just wanted to 25 respond to your question about representation. 20 1 THE COURT: That's what you told me now, but in the 2 transcript of the proceedings before me on May 2nd of this 3 year at page 14 you made the statement that I have just read. 4 MR. HERNSTADT: Your Honor, I can tell that you 5 Mr. Garbus spoke in error. When we met with your Honor in the 6 robing room for the first conference I believe that he said 7 that we had just been hired, I know that we've been on the 8 case for four days at that point. If Mr. Garbus said two and 9 a half months he misspoke. He's not known to be exactly 10 precise with dates, and I apologize on behalf of the 11 defendants if has been confusing. 12 But be that as it may, what we saw was defendants 13 trying very, very hard persistently daily to get discovery, to 14 get witnesses to take depositions and being resisted. We saw 15 the plaintiffs suddenly with two weeks to go before the trial 16 saying we need this discovery, we need that discovery, we need 17 this discovery. There is still eight witnesses that the 18 defendants would like to depose, need to depose, witnesses 19 that are plaintiffs witnesses and MPA witnesses. Part of what 20 we're waiting for is the decision on the privilege motion, not 21 to push your Honor, simply because it would be a waste of time 22 to take a deposition knowing that we might have to retake it 23 again. 24 THE COURT: I suggest you not wait. 25 MR. HERNSTADT: Okay. 21 1 THE COURT: If you have to reopen something, you'll 2 reopen it. 3 MR. HERNSTADT: Very good. I had asked for dates. 4 We were finally given dates yesterday. We were given dates 5 for three people. We still haven't been given dates for the 6 other witnesses whose depositions were deferred. 7 THE COURT: Let me hear the rest for one minute. I 8 issued an order directing that the privilege logs and the 9 documents be delivered to me for in camera inspection. When 10 are you going to do that? 11 MR. SIMS: Your Honor, I have the privilege logs here 12 other than for the MPA and Paramount which are not complete. 13 I would like to discuss that issue with you and I'm prepared 14 to do it now or a little later. 15 THE COURT: We'll do it later. 16 MR. GARBUS: Your Honor, can I just interrupt and say 17 one thing just a question of integrity of what I told the 18 court I think is what the defendants are saying to the Court, 19 namely, that up until three or four days, and I don't have a 20 memory of all those papers, they did get other counsel and 21 they did get me I think at the end of that week, and one of 22 the issues on the qualification of the defendants was their 23 inability to get other counsel. So to the extent that as I 24 understand it three or four days before I got into the case, 25 which is the day I appeared before you, they had done nothing 22 1 other than trying to get other counsel and get other counsel 2 to do things they thought, as I told you that even an answer 3 had been filed, we learned, and we told you that they had been 4 misled and the answer had not been filed. 5 So to the extent that there is a mistake there I 6 apologize. I was very clear though when I came before you and 7 we tried to set a September 8th date. 8 THE COURT: With all due respect, you fellows have 9 been very clear several times and you haven't always been 10 complete, but you're always clear on that point. 11 MR. GARBUS: I think on this point I don't want to 12 get past I think on this point we walked in the first time I 13 appeared we talked about a September 8 date. There was no 14 particular objection to it. The way the expedited trial comes 15 up is I make the motion or we make the motion because they are 16 not complying with discovery, and then we got caught up in 17 disqualification motion, and one of the things you said in the 18 disqualification motion and I don't want to paraphrase what 19 you said, you remember what you said, the relationship between 20 the early trial and the disqualification. 21 Up until then everything had been going along towards 22 the December date, and we were the ones who brought the motion 23 to expedite discovery and what comes out of that then is an 24 expedited trial. There is absolutely no way that we can pull 25 this case together by July 17th. 23 1 THE COURT: Mr. Garbus, I think you could have pulled 2 this case together by March 15th, and I think that any 3 reasonable lawyer in New York could have, and I think that if 4 the defense had spent half the time on actually preparing the 5 case instead of on public relations this case would be over. 6 MR. HERNSTADT: Your Honor, just to respond very 7 briefly to that. Apart from not having gotten into the case 8 until within a week thereafter, we haven't been given the 9 documents, we haven't been given the witnesses. They haven't 10 been made available to us. We got four thousand documents 11 yesterday from the MPA. They were due May 24th and we got 12 them yesterday. It's very, very difficult, your Honor, to 13 prepare for a trial with witnesses all over the country and 14 indeed all over the world when we're not being given 15 discovery. 16 It would be the only, the best, the way the defense 17 needs to present the case we need to be able to prepare our 18 case. This is a very significant case. This is a first test 19 of the GMCA. We need to be able to come in here fully 20 prepared with all the witnesses interviewed, with all the 21 witnesses deposed by the other side, if they want to, with all 22 of their witnesses deposed by us and all of the documents 23 complete, the production of documents complete, before we take 24 the depositions, so we don't have to come back to your Honor 25 and say we just got something after the deposition was taken, 24 1 we need to go back. 2 For example, when Mr. Valenti was deposed got a 3 document not even from Paramount, not even from the MPA but 4 from document two days after we took the deposition of Mr. 5 Valenti in which the November 9th press release where he says 6 DSS poses no threat at all. The documents were reviewed by us 7 in the end, way, way before the deposition. We still 8 haven't -- 9 THE COURT: I'll let you now, Mr. Garbus, but this is 10 not going to take forever. You want to say something, say it 11 but either you're going to present it or Mr. Hernstadt. 12 MR. GARBUS: Mr. Hernstadt. 13 MR. HERNSTADT: So because of that it's very 14 difficult to prepare for a case in June, depositions in a 15 coherent fashion. 16 THE COURT: You're telling me you have a press 17 release that says there is no harm here. 18 MR. HERNSTADT: There is an MPA press release where 19 he says, Mr. Valenti, doesn't provide any real harm, most 20 people can't use it, it's too complicated to use. We want to 21 ask him what do you mean by that, but we never had. 22 THE COURT: You think it really would serve, what it 23 means? 24 MR. HERNSTADT: I want to know what he means by that 25 it, the program is too complicated, the technology doesn't 25 1 exist. What do they know? When did they know it? And I 2 think those are relevant issues. 3 THE COURT: Well, I know you do. 4 MR. HERNSTADT: Thank you. 5 MR. GARBUS: Your Honor, can I say my one thing? 6 THE COURT: Yes, you can. 7 MR. GARBUS: We tried to take DVD depositions in the 8 early part of last month. We couldn't get it. We got it last 9 week. What we learned during the DVD depositions two things. 10 One, that there is a report which is given to the DVD which 11 says basically that DECS is no threat anywhere now in the 12 future that consumers can't use it. We learned about this 13 Macrovision report for the first time last week. We then are 14 trying now to get documents from Macrovision and served a 15 notice of on Macrovision they refused to turn over the report. 16 Secondly, what we've learned is their allegation before you, 17 one of the allegations of damage. 18 THE COURT: They refused to turn over the report and. 19 MR. GARBUS: We learned about Macrovision last week. 20 We served a subpoena on Macrovision and we called Macvision. 21 THE COURT: What steps have you taken to enforce 22 their obligation to comply with compulsory process of federal 23 court? 24 MR. GARBUS: This happened last Tuesday, Wednesday 25 and Thursday. 26 1 THE COURT: Almost a week later and the answer is 2 nothing? 3 MR. GARBUS: We came back from the deposition on 4 Friday. We've been out of town deposition all day today with 5 Goldstein. We've also been litigating. The other thing we 6 found out, they took the privilege as did the MPA on a variety 7 of questions. The other thing we found out is one of the 8 allegations in their papers with respect to the allegation of 9 harm is that the DVD audio had been stopped and the laser use 10 of DVD audio stopped Universal at trial is because of the 11 publication of DECSS that's in the record that's 12 uncontradicted we examined DCCA on Wednesday and they say 13 that's not true. They said the DVD audio is coming out. We 14 tried to get the names of the companies. He gave us the names 15 of the companies. He said it was never stopped. 16 So what you have here are a very substantial number 17 of facts, none of which are within our knowledge, all of which 18 was in their files and it's fundamentally, what it does is a 19 day, a day a day to get it current, that's the nature of this 20 case. 21 THE COURT: Mr. Gold? 22 MR. GOLD: Yes, your Honor. I think that I mean I 23 know the deal about the depositions, and Mr. Sims thankfully 24 has been handling the document, overseeing the document 25 production and the work done on that by all of the plaintiffs. 27 1 With respect to our depositions the ones we want for several 2 weeks, we have told them we only want to take the depositions 3 of those twenty declarants alleged experts who they will put 4 on the stand. We didn't think they'd pick more than three or 5 four. Late last week we were told they were thinking of 6 putting six to eight witnesses on the stand from that 7 selection of twenty and we said, fine, let's take them. We're 8 willing to do them two a day and work Saturday and Sunday. 9 Actually, it could have been over by now. And that's what we 10 offered. 11 We got a response that, as I wrote to the Court, we 12 got some actual dates, but they weren't certain and would have 13 to be confirmed. They came up with other dates that were 14 after the cutoff period of July 5th. There may have been one 15 of those people that they said, of this eight or so people 16 they said they were actually going to put on the stand where 17 we got a date and we accepted that date. All we want, and 18 we'll limit it to the same half day we offered, two a day, 19 weekends, that wouldn't have been necessary if we were told 20 before, well, we can do it now. And we will easily complete 21 this before the discovery cutoff on the terms of the 22 plaintiff. We're deposing the plaintiff for two days, one of 23 which is taking the defendant. I have the same trouble with 24 that your Honor mentioned once. 25 We deposed Mr. Goldstein today. We're deposing him 28 1 tomorrow. I think we'll be finished by 5. So I don't see any 2 problem in completing all the depositions we want. But we 3 need them in a room, and we need to be told in fact we're 4 going to put them on the stand unless some tremendous new 5 thing happens that would change our minds, so we don't have to 6 go running around taking irrelevant depositions from people we 7 don't need the depositions from, they won't be on the stand. 8 With respect to their depositions, there are still 9 plenty of time to take the people they want who they are 10 certain they want. They are forgetting that the last time we 11 were here they said to your Honor, well, this can all be done 12 very fast, if you are going to grant their motion on the 13 privilege, then all of that can happen very quickly. Well, we 14 don't know what your Honor will decide yet, but there are 15 aren't many witnesses for them to depose if the privilege is 16 upheld because they were all investigating or helping to bring 17 this lawsuit. Many of them were lawyers. So if you uphold 18 the privilege they won't have any problem. 19 And we've already suggested three or four other 20 people they want, not Mr. Eisner, that's the subject of a 21 motion. If, as far as I'm concerned of course I'm their 22 opponent, but if you decide against us on the privilege 23 motion, if they take one person from each group there they all 24 sat in groups doing their work and talking about the same 25 subjects. If they take one of them, they'll learn, and we 29 1 don't have the privilege, they'll learn what happened. 2 Now they could take all seven of them if your Honor 3 gives them permission to do that. It will be a waste of time 4 certainly to take more than two. So they can confirm it a 5 little bit. And I think that what this is is the endless 6 search for issues and defenses that don't have much to do with 7 the claim, and it should have been, it could have been tried 8 and can be tried on July 13th and I think -- 9 THE COURT: I'm not moving it up again. 10 MR. GOLD: 17th, I apologize. And we're ready. And 11 if they found 20 alleged experts what else are they going to 12 find with the issues they raised here? They've got twenty 13 people to say, you can't copy, okay, well, then they've got 14 them. Let's go forward with the case. I think we should get 15 on with it and I don't see any reason not to. 16 THE COURT: Mr. Hernstadt, anything else? 17 MR. HERNSTADT: Very briefly in response. First of 18 all, plaintiffs had done absolutely nothing to push this case 19 from January on. On January 20th they asked if we would 20 prohibit as well and you said that they should make a motion 21 and they waited until -- 22 THE COURT: They said they would. 23 MR. HERNSTADT: They should make a motion and they 24 didn't do so until after we adjourned the case. They did not 25 serve Mr. Corley the defendant with a notice of deposition 30 1 until June -- 2 THE COURT: I know. 3 MR. HERNSTADT: They haven't pushed the case and 4 so -- 5 THE COURT: I don't think it's fair to say they 6 haven't pushed the case. I think it is fair to say that you 7 have not had the discovery you want. 8 MR. HERNSTADT: There you have it, that is exactly my 9 point, your Honor. The other thing -- 10 THE COURT: But what do you have to say to their 11 version that they told you that they weren't even going to 12 bother deposing anybody except for Corely unless there were 13 people you were going to call at trial they couldn't get a 14 straight answer out of you. 15 MR. HERNSTADT: There are 18 declarants we told them 16 two weeks ago. I think we said five declarants we were not 17 going to use. We reduced the pool in other words to show they 18 didn't notice any of those people we told them we were going 19 to have. 20 THE COURT: When did you tell them? That was when? 21 MR. HERNSTADT: I believe it was on the 15th, the 22 14th or the -- 23 THE COURT: Of June? 24 MR. HERNSTADT: Right. And they asked this 25 information we started talking about the week before. 31 1 THE COURT: You don't seriously fault them for not 2 going out and taking discovery when it was their position that 3 they had no interest in taking depositions of anybody who 4 wasn't going to be a trial witness and you weren't going to 5 give them a clue who the trial witnesses were until 13 days 6 ago. 7 MR. HERNSTADT: They never asked about trial 8 witnesses until two weeks ago and within a week of their 9 asking for trial witnesses we told them that it would be 10 predominantly of the declarants we gave them four or five 11 names of the declarants we were going to use and we told them 12 we would try and find out of the rest of the declarants who we 13 use. 14 The problem is we don't know, for example, Frank 15 Stevenson will come an testify. He's in Norway. We don't 16 know if Barbara Simons is going to be available. She's 17 traveling much of the summer. We don't know which of the 18 witnesses are going to be around and which are not. Most of 19 our witnesses are very difficult. 20 THE COURT: I'm just curious what -- 21 MR. HERNSTADT: Mr. Stevenson is a cryptographer who 22 has significant expertise also in Internet technology and in 23 the Internet itself. 24 THE COURT: The other person you just mentioned? 25 MR. HERNSTADT: Barbara Simons. She's presidents of 32 1 American Machinery which is the professional association. 2 THE COURT: These people you're talking about are 3 technical experts. 4 MR. HERNSTADT: Ms. Simons is not just a technical 5 expert. She's more somebody who can talk about she interacts 6 between the Internet and communicates information and also 7 encryption studies. 8 THE COURT: Anything else? 9 MR. HERNSTADT: No, your Honor. 10 MR. SIMS: Your Honor, I would like to correct two 11 factual errors if I could because I think they're important. 12 Mr. Hernstadt said Mr. Corley wasn't served until the end of 13 June, and that no deposition notices were served until the end 14 of June, and there is a letter to your Honor I think within 15 the last 48 hours complaining we hadn't given appropriate 16 notice for depositions. 17 The fact is that we told him on June 13th orally who 18 we wanted to depose assuming that they were testifying. We 19 confirmed that by letter of June 14th and on June 15th out of 20 abundance of caution we gave to Mr. Hernstadt, he having 21 already said he would accept notices and subpoenas for 22 third-party witnesses, depositions notices and witnesses for 23 Ms. Simons and eight or ten other people. Not to put a finer 24 point on it, he made a commitment to accept those notices, 25 sometime later said that he wouldn't, and then we did go out, 33 1 he already had these on June 15th and we served them again 2 individually, but I think it is quite misleading to say that 3 defendants didn't know it was June 14 and certainly on the 4 15th when Mr. Hernstadt got the deposition notices which 5 depositions we wanted, assuming they would testify. 6 MR. HERNSTADT: I must correct Mr. Sims very briefly. 7 First of all I pointed out that if I did, I apologize, I 8 misspoke. Second of all, and much more importantly, I never 9 said that I would accept service of third parties. 10 THE COURT: Sit down. I don't want to hear any more 11 of it. 12 MR. HERNSTADT: Your Honor, I would just refer your 13 attention to the discovery discussions memo that was handed up 14 your Honor on June 8 because in it sets forth what our 15 agreement was with respect to the parties, nonparty 16 depositions. 17 THE COURT: There was disagreement about that. Okay. 18 In the last thirty days I have had 18 letters at 19 least regarding discovery disputes, and then in a case wherein 20 some review has spun out of counsels' control. The factual 21 issues for trial in this case are narrow and well defined. I 22 do not intend to be all inclusive, but the core questions in 23 the case include these: Does DECSS as claim in fact 24 circumvent CSS? Was it primarily designed and produced for 25 the purpose of circumventing CSS? Does it have any 341 significant commercial purpose for use other than circumvent 2 CSS? 3 Are the defendants in this case entitled to the 4 benefits of the reverse engineering session to the DMCA? Are 5 they entitled to the benefits of the encryption research 6 exception to DMCA? Is there at least some threat of harm, and 7 is there any remedy for it other than an injunction? 8 As I say, that does not attempt to be exhaustive but 9 it really does show what's at the heart of the case. I don't 10 mean to exclude also factors that are relevant to balancing 11 whatever First Amendment interests there may be in the case 12 assuming that the plaintiffs establish a violation of the DMCA 13 without regard to First Amendment consideration. In that 14 event obviously evidence of that character could well be 15 relevant and material. 16 The purpose of pretrial discovery is two-fold. It is 17 to avoid surprise at trial. It is also to enable both sides 18 to procure evidence that offers some reasonable prospect of 19 informing the determination of the issues in the case. For 20 the most part, although not exclusively, the factual questions 21 that are likely to be at issue in this trial relate to the 22 characteristics of the defendants, the characteristics of the 23 software and related hardware questions, if there are any, and 24 defendants' motives. 25 Indeed, it is arguably the case that the plaintiffs 35 1 can make out a prima facie case of a violation of the DMCA by 2 establishing that CSS effectively controlled access to 3 copyrighted works which the defendants conceded already in 4 this case and that the DECS circumvents CSS and has little or 5 no other purpose. At least part of that appears to be 6 undisputed. In consequence, the principal, although not the 7 exclusive focus of the trial at this stage appears to me to be 8 whether the defendants can establish a defense based on their 9 own motives, their own characteristics and such other theories 10 as the Constitutional challenge to the statute and possibly 11 the role of fair use analysis in this controversy. 12 In these circumstances it has appeared to me from the 13 start that the defendants had comparatively little need for 14 pretrial discovery because the resolution of most of the 15 potentially disputed material issues of fact depends upon 16 facts no more available to the defendant and certainly not in 17 a the unique possession of the plaintiffs if indeed the 18 plaintiffs know anything about them at all. 19 It has appeared also from the very beginning that the 20 facts relevant to the trial of this case that likely are known 21 to the plaintiffs probably are best known to technical and 22 other executives well below chief executive officers and top 23 ranking officers. Although that has been reasonably apparent 24 since January I have made no effort, at least up to today, to 25 limit the extent of the defendants' discovery or for that 36 1 matter the plaintiffs, although it hasn't been in issue until 2 today. That said, discovery in civil litigation is not 3 boundless. Rule 382(a) requires the Court's permission for 4 either side to conduct more than ten depositions without the 5 written consent of all parties. Both sides are threatening to 6 sail right through that limit if given what they are asking 7 for here. Quite apart from the limit, Rule 26(c) authorizes 8 District Courts further to limit discovery in order to protect 9 parties and other persons from annoyance, from embarrassment, 10 oppression or undue burden or expense. 11 Finally, Rule 27(a)(2) permits limitation of 12 discovery where a party makes unreasonable cumulative or 13 complicated demands, where it seeks discovery of material 14 that's readily obtainable from other sources, where it has had 15 ample opportunity to get what it needs through other discovery 16 and most significantly for present purposes, where the burden 17 or the expense of the discovery outweighs the slight benefit 18 taking into account the needs of the case and the importance 19 or lack thereof of the proposed discovery in resolving the 20 issues among other factors. 21 It has become clear to me that the time has come to 22 limit the discovery which has gotten entirely out of hand. 23 There is no justification for the number of depositions sought 24 in this case. The plaintiffs need thirty -- excuse me -- 18 25 or whatever the number was that they advanced and the 37 1 defendants need 30, which is the last number I heard from 2 them, like everybody needs a contagious disease. It is not so 3 long ago, indeed, it is only six weeks ago that Mr. Garbus 4 told me he needed five in order to go to trial. Because some 5 day some other court may be looking at this, I've got to take 6 a moment to make sure that I have the record references handy. 7 On May 11 at page 11 of the transcript of those 8 proceedings Mr. Garbus said the following: "We wish to take 9 several depositions. We are prepared to move the date of the 10 trial up from December 5 and we would like to communicate that 11 to the Court as soon as we finish five depositions. If I had 12 five depositions then I can get the information that I think 13 is there, we would be prepared probably to go to trial this 14 summer consistent with the Court's schedule." 15 He then proceeded to tell me that the depositions he 16 wanted were those of Mr. Valenti, Mr. Schuman, both of which 17 he's had or had much of, Mr. Eisner, and you couldn't even 18 tell me the other two names. Now when it became apparent that 19 indeed the trial might be moved up, Mr. Garbus back pedaled 20 later in that hearing, and I won't speculate as to why, but 21 the suggestion has been made that the trial is about the last 22 thing that the defendants want in this case. 23 Quite apart from what Mr. Garbus may have in the 24 moment of passion have said or not said, because after all 25 every advocate is entitled to a flight of hyperbole now and 38 1 then, the reason I took the care to outline what I perceived 2 to be the issues in this case that I did is simply to 3 illustrate that there just isn't the need for the discovery 4 program that has been outlined here. The issues are 5 predominantly technical. 6 I rather expect that this case could have been 7 prepared on all the technical issues by each side hiring an 8 expert, having the two experts examine the material in 9 question and agreeing on what the facts are, and if they were 10 unable to agree as to some point, selecting between them a 11 mutually respected colleague to offer the Court an opinion 12 unclouded by allegiance to either side. 13 The fact of the matter is that you don't have to be a 14 rocket scientist to understand, for example, that if somebody 15 has a 56K modem and you've got a 9 gigabyte file or whatever 16 it is it takes a while to download it. That as I understand 17 it is the heart of what the defendants have to say here, and I 18 won't suggest it's the only thing they have to say, but it is 19 certainly important to their defense. Thirty depositions are 20 utterly unnecessary to prepare that issue or virtually or 21 virtually all of the others that I've alluded to. 22 Secondly, beyond the fact that the scope of the 23 discovery sought is excessive, it is my very clear perception 24 that to some degree, not entirely, but to some degree this 25 insistence on discovery is driven in some respects more by a 39 1 desire on the part of the defendant to generate publicity for 2 themselves and to embarrass executives of the plaintiff than 3 to get material that is relevant and material to litigate this 4 case. 5 Late at night I read every word of the deposition of 6 Jack Valenti. Very little of that deposition concerned 7 matters likely to be known to Mr. Valenti that have any 8 bearing on this case. A very substantial portion of the 9 deposition consists of the examiner, defendants' counsel, 10 framing hypothetical questions and asking that Mr. Valenti 11 give his opinion as to whether on that particular set of 12 hypothetical facts the conduct in question did or didn't 13 violate the DMCA, was or wasn't fair use, et cetera. 14 There was in my view no proper purpose to the end of 15 that. A good deal of effort was undertaken in what appeared 16 to be an effort to provoke Mr. Valenti to answer, I don't 17 know, to questions. I'm not saying there was nothing relevant 18 in there, but the percentage was very small. The deposition 19 in my view was principally an effort in the vernacular to 20 score points. It was not a quest for evidence or an effort to 21 avoid surprise at trial. 22 It may have great utility to the defendants in 23 attempting to discredit Mr. Valenti and the MPA in the halls 24 of Congress in making them look stupid to those people who are 25 backers of the defendants' position in this case. And it's a 40 1 free country, the defense is entitled to portray or to try to 2 portray the plaintiffs' position as silly or misinformed or to 3 persuade Congress that it made a mistake. What they are not 4 entitled to do is use the processes of this Court to do so at 5 least where there is not a bona fide litigation purpose for 6 the effort which in my view in principal part there was not. 7 Further to what has been going on in this case on 8 part of defendants and their counsel is the following: The 9 defendants have a website on which they report on this 10 lawsuit. According to plaintiffs' June 23rd letter to the 11 Court at page 3 Mr. Valenti's deposition was on the 12 transcript, was posted on the website where the defendants 13 commented on it. I don't know exactly what they said. I 14 didn't look at it. The defendants had a perfect right to do 15 both. Given the lack of any real litigation purpose for most 16 of the Valenti deposition in the first place, however, it does 17 suggest that there is at least as much interest in generating 18 content and traffic for the website and in using the material 19 generated by the lawsuit for broader public purpose than for 20 the resolution of the legal and factual issues that are in 21 dispute here. 22 This point would not be complete without reference to 23 the fact that defendants' counsel are obviously using their 24 role in this lawsuit to secure personal press attention. One 25 need only look at exhibit E to Mr. Garbus' designation of May 41 1 3rd which is docket item number 47 and Exhibits 3 and 6 to 2 Mr. Howe's declaration which is docket item 84. 3 Now don't get me wrong. Self promotion is the great 4 American way. Given what the Supreme Court said a number of 5 years ago I suppose lawyers are as entitled to do that as 6 anybody else. I certainly don't overlook the fact that the 7 plaintiffs are certainly not shrinking violets in drawing 8 press attention to this controversy. 9 I certainly acknowledge also that there are times 10 when litigation unavoidably generates material that can be 11 used by litigants and their lawyers for purposes like that 12 because the subject matter that's necessarily involved in the 13 process of deciding a case lends itself to that purpose. 14 Anybody who has been censured in the United States in 15 the last couple of years can certainly think of lots of 16 examples of that. On the other hand, the processes of the 17 courts do not exist for the purpose of generating content for 18 the media that is not pertinent to resolving the lawsuits that 19 are before them. When that happens, courts can and should 20 call a halt to it for some very simple reasons; the taxpayers 21 who pay for these courts, the litigants who are made foils for 22 those activities and the other litigants whose cases can't be 23 heard while courts are occupied with nonsense of that type 24 cannot fairly be asked to be economic end tables. 25 Now, all of that brings me to the immediate questions 42 1 that I have to decide this afternoon, the deposition of Mr. 2 Eisner, and the trial date, and the trial date comes up only 3 because the defendants want still more discovery. 4 As far as Mr. Eisner is concerned, based on what I've 5 said already, it is my view that it is quite likely that the 6 deposition of Mr. Eisner if it is sought for a proper purpose 7 in any respect in the main is not sought for a proper purpose 8 if Mr. Valenti's deposition is any guide, and the defendants 9 have offered me precious little basis for believing that it is 10 not. The primary purpose of the deposition is to argue with 11 Mr. Eisner about the interpretation of the EMCA, to attempt to 12 show that he's not personally a computer expert and to get him 13 to say, I don't know, as many times as possible in order to 14 produce an amusing transcript to put on the website and to 15 attract more press attention. I am not however prepared to 16 ban the deposition of Mr. Eisner outright. There is some 17 possibility that he has information relevant and material to 18 this case. 19 I am not prepared to conclude simply on the basis of 20 a representation by counsel that he does not. In consequence 21 I am going to allow that deposition to go forward, but it is 22 limited to 90 minutes. Absent a showing after the 90 minutes 23 are done on the basis of the transcript that the defendants 24 didn't waste the time they had and that they have bona fide 25 basis to believe that continuing beyond 90 minutes is likely 43 1 to produce anything of legitimate interest in the resolution 2 of this dispute as opposed to interests in another forum. 3 If these plaintiffs have exaggerated their position 4 to the Congress to get the statute passed, if they have misled 5 the public and the press about these issues, there are other 6 forums for dealing with it, not this lawsuit. If they have 7 misled me and they lose the case, there will be ample 8 opportunity after they fail to establish by proof what they 9 claim, to seek sanctions and other remedies, if that's 10 appropriate, but the time for that is not now. It is later. 11 Now, so far as the request for an adjournment is 12 concerned, there is not going to be an adjournment of the 13 trial. First of all, the defendants have not used the time 14 that has been available to them, which after all is since 15 January, wisely. 16 Now I know there was a change of counsel in February 17 or March, depending on which version one accepts. Clearly, 18 however, nothing was done before the change of counsel, 19 although the defendants were represented by counsel on the 20 preliminary injunction motion. 21 While Mr. Garbus obviously can't be faulted for doing 22 nothing before he was in this case, the defendants can and to 23 the extent that I have indicated they are. Once Mr. Garbus 24 was in the case whether it be mid-February or mid-March, the 25 fact is that by May 11th, the day the notion of advancing the 44 1 trial was broached, only eight depositions had been noticed 2 and May 11th was the date that I was told that it looked like 3 five depositions would do it. 4 Virtually all of the depositions at issue here this 5 afternoon on both sides were noticed only after the trial date 6 was advanced. I think it is clear that quite a number of the 7 depositions noted by defendant have been noticed for the sake 8 of noticing them in order to argue that the trial should be 9 postponed, in any case, whatever the motivations, are not 10 necessary in light of the needs of the case. 11 Secondly, given what's gone on up until now I have 12 little confidence to believe that more discovery would be 13 directed in the main to the legitimate needs of this lawsuit 14 as opposed to some of the other thing that have gone on here. 15 I rather expect that the old saw about the work expanding to 16 consume the available time at 10 percent on top applies here 17 as well. 18 Thirdly, I must say that some of the protestations 19 that have been made here about discovery and other matters on 20 behalf of defendants give me serious pause. I have already 21 mentioned the comments about needing only five depositions and 22 now it's thirty. 23 I was the recipient on May 8th of a motion by the 24 defendants to raise the amount of injunction bond and for 25 various kinds of relief on the basis of alleged discovery 45 1 abuse by the plaintiffs. That motion was frivolous in almost 2 all respects for the reasons set out in my order of May 12th. 3 Without cataloguing each and every respect in which that was 4 so, I mention a few. 5 Defendants argued that the MPA had improperly 6 designated Messrs. Schuman and Jacobson to testify on its 7 behalf because they were not officers, directors or managing 8 agents of the MPA. In fact, however, the rule that defendants 9 proceeded under did not so require. 10 Second, they complained that the defendants or the 11 MPA had improperly failed to produce Mr. Eisner for his 12 deposition. In fact, no notice of deposition for Mr. Eisner 13 ever had been served. 14 Third, they complained that the plaintiffs had abused 15 the process by failing to produce documents. The thirty days 16 allotted by rule for doing so had not yet expired. The 17 argument to raise the injunction bond was just plain silly. 18 Lastly, the motion complained that the plaintiffs had 19 failed to designate any witnesses to testify in their behalf 20 pursuant to the defendants' 30(b)(6) motion. They said that 21 to me on a motion on May 8th for discovery when in fact on May 22 5th, the Friday afternoon before the motion was presented to 23 me, the plaintiffs had sent not one but two letters to 24 defendants' counsel saying that they would designate witnesses 25 early in the week, hopefully Monday. So that the whole claim 46 1 of abuse for failure to designate witnesses was at best 2 premature and an imposition on the court. 3 Now why make a motion like that? It was absolutely 4 doomed from the beginning. I suggest the answer might be 5 found in the press coverage. 6 Now I could go on. There was an argument made to me 7 on May the 11th with a gallery of press people in the 8 courtroom -- I certainly didn't call them -- about the impact 9 of the Younger case in the 6th circuit. One might look at the 10 transcript of those proceedings at pages 2 through 3 and 39 11 through 44. I was told by the defendants in substance that 12 the Younger decision eliminated the basis for my preliminary 13 injunction ruling. Not even a colorable argument. It isn't 14 even close to being a responsible legal argument. 15 What the Younger decision in the sixth circuit said 16 was that in their view computer source code is expressive and 17 is entitled to First Amendment protection and it therefore 18 sent back to the District Court a challenge to the export 19 control regulation so that the District Court could draw an 20 appropriate balance between the First Amendment interests in 21 exporting the software, the source code at issue and the 22 national security issues. 23 With all due respect, that is substantially what I 24 said in my decision. I assumed for the purpose of argument 25 that source code had Constitutional protection and that to 47 1 balance it against the legitimate interests in securing 2 protection for copyright. To suggest that Younger eliminated 3 the basis for the previous decision, which is obviously a 4 relevant case, is simply a non-starter and yet the argument 5 gets asserted. 6 Why is that relevant? Why is the motion relevant? 7 It's relevant in my judgment at least in part, because I had a 8 record before me of endless protests from the defendants about 9 more and more discovery, five depositions, 14 depositions, 30 10 depositions, and so many of the things that have been said to 11 me have been insupportable up until now that I have no reason 12 to suppose that there is much of a legitimate basis for much 13 of what they are asking for. They have been given every 14 opportunity. They had the opportunity to come in here this 15 afternoon and make a showing of witness by witness of who 16 these people were, what it is they want to question them 17 about, why it is important or indispensable to preparing the 18 case for trial. They have not done it. What I've got is a 19 list of names and more assertions. 20 Well, the time is over for that. The case is going 21 to trial. It is a narrow case. The discovery will be 22 finished. I will give a very brief additional extension on 23 discovery, and you folks will get it done and you will be 24 prepared, but it is going to trial on July 17th. I'll give 25 you until July 11th to finish discovery and anything you want 48 1 to clean up. 2 Now there was one more point. Let me just see if I 3 have my note on it. I would add only this thought, the rules 4 to which I referred earlier confer a lot of discretion on 5 District Courts. We need to manage cases. We need to get 6 them ready. Lawyers come in and make arguments, they want 7 delays, they want to speed up. It is often extremely 8 difficult to assess where to come out. But the reason the 9 discretion is conferred is because we all do this for a living 10 everyday. It is impossible, I think ultimately, to make these 11 judgments without taking into account a feel about a case, not 12 a view on which way the case ought to come out, but a feel 13 about the way the lawyers are managing the case, informed by 14 whatever experience we bring to the job when we come here 15 which for most judges is considerable, and a sense from the 16 interchange among counsel in a variety of ways, some of them 17 objectively demonstrable like what they say in papers and 18 letters, and some of it not. I have brought that to bear 19 here. 20 The final point I want to make relates to what Mr. 21 Hernstadt was saying earlier and which he really said that 22 week ago in his letter of June 26th in which he was arguing 23 for the Eisner deposition. He said: "In this regard what 24 plaintiffs knew and know about the actual risk of piracy posed 25 by DCCSS when they gained this knowledge, what they did to 49 1 begin it, and what they did to eradicate the alleged risks are 2 all facts very much at issue." I think that view is at the 3 heart of the discovery disputes in this case. It explains in 4 a single sentence why all that time was spent in the Valenti 5 deposition in the way it was and the positions taken here 6 today with respect to the Eisner deposition, among other 7 things, including the breadth of the discovery demands, the 8 selection of witnesses whose depositions are sought. 9 The simple fact of it is that in the main I couldn't 10 disagree with the defense more. The only respect in which any 11 of the things that Mr. Hernstadt articulated in the sentence I 12 quoted are germane to the resolution of this case in all 13 likelihood is on the issue of whether there genuinely is any 14 risk of harm. The question of whether there genuinely is any 15 risk of harm will be controlled predominantly by such matters 16 as the quality of files encrypted with DCSS, the ability to 17 transmit them in any reasonable span of time and matters such 18 as that. I don't mean to exclude other possibilities. It may 19 well be that there are other respects in which some of this is 20 relevant, but for the most part I think it is not, and the 21 inordinate discovery effort that defendants have mounted since 22 this case was ordered to trial seems to be primarily directed 23 at irrelevant issues, certainly issues relevant in the court 24 of public opinion, certainly issues relevant in Congress, not 25 issues relevant in this lawsuit. 50 1 That is the ruling, and I will rule on the privilege 2 matter as soon as I get the materials from the plaintiffs 3 which better be quick. 4 MR. SIMS: Your Honor, may I be heard briefly on 5 that? 6 THE COURT: Very briefly. 7 MR. SIMS: Here are the logs with respect to the 8 plaintiffs other than Paramount and excluding the MPA. There 9 are a number of boxes that we got from the MPA. 10 THE COURT: So when am I going to get it? 11 MR. SIMS: Those additional two, the logs, I do not 12 believe will be complete before the end of next week, your 13 Honor. There are nine boxes that came in within the last 14 three days and we have had teams of lawyers working full time. 15 THE COURT: Get more teams. I'm not waiting until 16 the end of next week. 17 MR. SIMS: The other point I want to make, your 18 Honor, is I think because of the procedure on this motion -- 19 THE COURT: As for that I'm glad you mentioned that, 20 because I left something out in my previous remarks. I 21 noticed from the letters that the defendants have insisted 22 that no depositions go forward unless both Mr. Garbus and 23 Mr. Hernstadt are present. Now is that true, Mr. Hernstadt? 24 MR. HERNSTADT: No. 25 THE COURT: All right. I'm glad to hear it. 51 1 Moreover, they may be a big law firm, but you're no shrimps 2 yourself. You've got over forty lawyers in that firm, and if 3 the reason you're not getting any depositions is because you 4 and/or Mr. Garbus have to be there all the time, and I'm not 5 asking for any answer, the time has come to reconsider that 6 point of view. 7 When am I getting the documents, Mr. Sims? 8 MR. SIMS: Your Honor, if you want, and I suggest 9 that you might not, and I'd like to explain why, but if you 10 want the documents that accompany those logs we will have them 11 to you tomorrow. 12 THE COURT: Why wouldn't I want that other than 13 common sense? 14 MR. SIMS: Because the way the procedure has happened 15 here those logs, I don't believe that everything on those logs 16 or nearly everything on those logs is in fact in dispute. In 17 fact, I believe based on the briefing that what's in dispute 18 are relatively narrow categories and if your Honor wants the 19 nine hundred documents that pertain to those and the other, it 20 will be more than a thousand, more than another thousand, 21 maybe more than two thousand with remaining logs, we're glad 22 to give them to you, but in fact I believe -- 23 THE COURT: Does that seem relatively few? 24 MR. HERNSTADT: I have no idea. I don't know what's 25 in those documents and the logs are not containing the 52 1 necessary details I've been able to determine. The logs say 2 stuff like DCSS -- 3 THE COURT: How can you say to Mr. Sims that he 4 doesn't dispute it? 5 MR. SIMS: Well in the briefing I mean there have 6 been opportunities in the depositions and in conversation and 7 the briefing. As I understand it what's fundamentally at 8 issue are the documents concerning the investigation 9 undertaken after the act was undertaken and communications 10 between Mr. Litvack representing MPA and Weil Gotshal 11 representing DCCA again in the post-act period, and they've 12 had the Warner log for some two and a half weeks. I believe 13 it's more than clear enough and ample enough under the 14 standards of this district for them to have made 15 particularized discovery. 16 THE COURT: Here is what we are going to do. In the 17 next thirty hours you and Mr. Hernstadt are sitting down in a 18 room together somewhere with these logs, and at the end of the 19 thirty hours you are going to produce to me all the documents 20 that have to be looked at and if that's a thousand documents, 21 it's a thousand documents, and if you can somehow narrow it, a 22 blessing on both your heads. 23 MR. SIMS: Yes. 24 MR. HERNSTADT: Your Honor, may I make one request? 25 THE COURT: Yes. 53 1 MR. HERNSTADT: The last time we were here before you 2 went through about seven or eight people that we felt 3 particularly depositions were needed and explained that none 4 of the other depositions were conditional on what they had to 5 say. In fact, most of them probably could be ascertained 6 based on those seven or eight people. If we could get those 7 depositions notwithstanding the fact that you think us 8 completely wrong headed, but I think -- 9 THE COURT: I didn't say completely wrong headed. 10 You weren't listening. 11 MR. HERNSTADT: I'm sorry, sir, partly. If you could 12 direct these plaintiffs to make those people available in that 13 twelve days or fourteen days we have to complete discovery I 14 think that -- we haven't been able to get dates for that. 15 THE COURT: You think what? You think that solves 16 your problem? 17 MR. HERNSTADT: I think that gives us some procedure 18 or of ability to prepare properly for trial. 19 THE COURT: Who are they? 20 MR. HERNSTADT: Michelle Ryder, Liz Hersch, Greg 21 Eisner, Brad Hunt, Ethan Marx, Mark Litvack, and Michael 22 Ostroff, and then -- 23 THE COURT: You're up to the ninth of your six or 24 seven. 25 MR. HERNSTADT: I'm sorry. And Mr. Schuman and if I 54 1 have to trim that -- 2 THE COURT: What do you want from Reiner? What is 3 she going to testify to? 4 MR. HERNSTADT: She is going to testify about the 5 technical capacities of DCSS. She is part of the team at the 6 MCC. She is supposed to be the head of the antipiracy group. 7 She deals with technical questions. 8 THE COURT: Is she a lawyer or a tekkie? 9 MR. HERNSTADT: She's a tekkie. 10 THE COURT: You know lawyers don't know anything 11 about this stuff. 12 MR. HERNSTADT: Of course not, that's why we need 13 these tech people. Spear is also a tech person. I believe 14 her deposition will be a brief one, not just because she's -- 15 THE COURT: Hirsch? 16 MR. HERNSTADT: The antipiracy chief before Jacobson 17 up until April 1 when Jacobson took over. In other words, the 18 first six months. 19 THE COURT: Deckner? 20 MR. HERNSTADT: Deckner is an MPA lawyer. He's the 21 one who said publicly we don't have any evidence of. 22 THE COURT: You think you're going to improve on 23 that? 24 MR. HERNSTADT: We can reconsider that but I'd like 25 know why he said that what he based it on. 55 1 THE COURT: He made it up to help you. 2 MR. HERNSTADT: That would be good. 3 THE COURT: What about Hunt? 4 MR. HERNSTADT: Hunt is the key technical officer for 5 the MPA. 6 THE COURT: Marx? 7 MR. HERNSTADT: Dean Marx is one of the plaintiffs, 8 plaintiff's offered him in place, put declaration on the 9 original motion. 10 THE COURT: What does he have to say? Mark Litvack? 11 MR. HERNSTADT: He is here. He is counsel for the 12 MPA and in the privilege motion his role in what we would like 13 to talk to him about. 14 THE COURT: Michael Ostroff? 15 MR. HERNSTADT: Michael Ostroff is someone who can 16 talk about DDDIO. He's the music recording portion of one of 17 the plaintiffs. 18 THE COURT: You think that's a little collateral? 19 MR. HERNSTADT: To one of extent that's one of the 20 harms they alleged. We've learned that it wasn't. 21 THE COURT: So what? That's a question. So what 22 with a question mark. 23 MR. HERNSTADT: Okay. So what the reason they're 24 saying that that is the extent of the harm the damages that 25 are caused by DCSS the threat of DCSS is so great that an 56 1 entire format has been postponed. I think that's relevant 2 because it's not true and that's a harm that doesn't exist. 3 THE COURT: Mr. Sims, what do you say to the list? 4 MR. SIMS: I defer to Mr. Litvack. 5 MR. LITVACK: Thank you very much. Your Honor, 6 starting with myself, which is probably the one I know the 7 best, I am an attorney for the Motion Picture Association of 8 America. That is my job function. Mr. Getner is our deputy 9 general counsel. 10 THE COURT: Keep going. 11 MR. LITVACK: Miss Widner's testimony is only acting 12 under my direction in this matter. She is somebody in our 13 group who work for me on this matter. She is not somebody we 14 would go to ask teckie questions of. She is part of our 15 investigative Internet investigative staff and worked under 16 me. 17 THE COURT: What about Hirsch? 18 MR. LITVACK: Mr. Hirsch at the time, first of all, 19 Mr. Hirsch is also a member of this bar, your Honor, so he did 20 operate in all honesty as the head of our Internet piracy 21 operations. If you look at the questions here there is 22 nothing that Mr. Jacobson said, gee, that might have happened 23 earlier and I don't know about it, but to the extent they want 24 to depose Mr. Hirsch, I guess it's a fair game. I would 25 suggest to your Honor that once again most of this 57 1 conversations, if not all of them, are with counsel, 2 specifically myself because we went over this. I guess 3 they're free to ask. 4 THE COURT: What about Hunt? 5 MR. LITVACK: Mr. Hunt is the chief technology 6 officer of our organization, your Honor, some of this 7 conversations with regard to these particular matters they all 8 would have been with me as regard to any possible fixes to the 9 problem we would have a totally separate confidentiality 10 problem. 11 THE COURT: What about Marks? 12 MR. LITVACK: Put in an affidavit for Warner 13 Brothers. Mr. Marks is the substitute for her. We will 14 present, produce Mr. Marks. 15 THE COURT: Linda Sheer? 16 MR. LITVACK: Linda sheer, your Honor, she is a 17 techie on our staff and investigative staff. Your Honor, we 18 have agreed to make Ms. Sheer available. We have asked that 19 they do it in California. Ms. Sheer is very, very ill. We 20 told them at the time two or three weeks ago she was in the 21 hospital for a week. She has a doctor's note that says she 22 cannot travel but within that we can make her available either 23 via telephone or since they agreed to go to California for Mr. 24 Eisner, we can do it in coordination with that. 25 THE COURT: I am going to direct that the plaintiffs 58 1 make available within the time frame Hirsch, Hunt, Marks, 2 Sheer in California, if the defendants want her, and Ostroff. 3 I am not going to rule now on Mr. Litvack, Mr. Getner 4 or Ms. Rider. I gather, Mr. Hernstadt, that if I wind up 5 sustaining the privilege objection those are out anyway, am I 6 right? 7 MR. HERNSTADT: Put it this way, I think we could 8 probably handle what we want with those two. Mr. Litvack has 9 also made a number of public statements, but we can probably 10 dispose of that in a different way. Ms. Rider, Mr. Jacobson 11 testified that she worked for him. That may be just 12 semantics. 13 THE COURT: You get her, too. Obviously there may be 14 some privilege objection but I'm not ruling on those now. Can 15 you get those -- Mr. Gold, you look like you're very 16 uncomfortable. 17 MR. GOLD: No, your Honor, I'm not. 18 THE COURT: God forbid. I was concerned. I'm glad 19 to hear you're not. I'm not excluding the others, but if you 20 people can work out the others, but the clock is going to 21 stop. You know you're playing the Pacers and the 24 seconds 22 are going to be up, and it's going to be over. 23 MR. GOLD: Your Honor, may I stand up for a few 24 questions on depositions we want to take. 25 THE COURT: People that are going to testify. 59 1 MR. GOLD: The experts they are going to put on the 2 stand that's all, but I need them to tell me in all good faith 3 the experts they intend to put on the witness stand. Then I 4 will take only those people and none other. 5 THE COURT: You've got to tell him, Mr. Hernstadt, 6 soon. 7 MR. GOLD: Can you tell me by the end of the week? 8 MR. HERNSTADT: Yes. 9 MR. GOLD: Thank you. 10 THE COURT: All right. Our business is done. Anna 11 tells me our business isn't done. The conference on July 12th 12 is advanced to 2 p.m. 13 MR. HERNSTADT: Your Honor, one last -- never mind. 14 THE COURT: You thought better of it. 15 MR. HERNSTADT: Yes. You already stood up. 16 THE COURT: That's all right. 17 MR. HERNSTADT: One stickier matter. 18 THE COURT: I thought were you following Rifkin's 19 rule. 20 MR. HERNSTADT: Which is? 21 THE COURT: Late Judge Rifkin kin always used to tell 22 me when you got pretty much what you want, get out of the 23 courtroom before the Judge changes his mind. 24 MR. HERNSTADT: I just ask if we can be excused now. 25 THE COURT: You can be excused.