You're viewing Docket Item 528.4 from the case US Futures Ex LLC, et al v. Bd Trade Cty of Chgo, et al. View the full docket and case details.

Download this document:




Case: 1:04-cv-06756 Document #: 528-4 Filed: 07/24/15 Page 1 of 24 PageID #:5605

Exhibit D

Case: 1:04-cv-06756 Document #: 528-4 Filed: 07/24/15 Page 2 of 24 PageID #:5606

1

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

THE UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

et al.,

Plaintiffs,

U.S. FUTURES EXCHANGE, L.L.C., )
)
) No. 04 CV 6756
)
)
)
) Chicago, Illinois
)
)
) December 7, 2012
)
) 12:08 o'clock p.m.

BOARD OF TRADE OF THE
CITY OF CHICAGO, et al.,

Defendants.

vs.

TRANSCRIPT OF PROCEEDINGS

BEFORE THE HONORABLE JAMES B. ZAGEL

For the Plaintiffs:

MORGAN, LEWIS & BOCKINS
BY: William P. Quinn
1111 Pennsylvania Avenue, NW
Washington D.C. 20004

For the defendants:

FREEMAN, FREEMAN & SALZMAN, P.C.
BY: Jerrold E. Salzman
401 North Michigan Avenue
Suite 3200
Chicago, Illinois 60611

Court Reporter:

Blanca I. Lara, CRR, RPR
219 South Dearborn Street

Room 2318

Chicago, Illinois 60604

(312) 435-5895

Case: 1:04-cv-06756 Document #: 528-4 Filed: 07/24/15 Page 3 of 24 PageID #:5607

13

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

12:33:35

12:33:55

12:34:09

12:34:28

12:34:47

think we're doing the sensible thing by saying let's recast

discovery in light of that ruling, but I do confess that we

have a little lack of understanding of what that ruling is.

With respect to the issue of the CFTC and the CFTC's

impact on Mr. Quinn's failure, I will agree that Mr. Quinn's

experts all testified that the reason for the failure was

because they were taken off the fast track. So he's going to

have to eat that if we ever go to trial.

MR. QUINN: This is simply untrue.

MR. SALZMAN: No, it's not.

MR. QUINN: Excuse me for interrupting.

THE COURT: Go ahead. Talk one at a time.

MR. SALZMAN: Okay. I mean, if we could ever get to

the Daubert motions again, we'll see that in fact is correct.

Anyway, but that doesn't mean that our conduct is open to

discovery. His experts have taken that position and they're

stuck with that position, to the extent they did it.

And with respect to going forward, I say let's find

out what their claims are. Is he really still claiming that

efforts that failed well before -- efforts to prevent them from

getting clearing failed well before they even began their

application process are in this case? If so, let them put that

down, tell it to the judge, and we're going to ask that that be

dismissed because it's so silly.

MR. QUINN: The notion that the Court's determination

Case: 1:04-cv-06756 Document #: 528-4 Filed: 07/24/15 Page 4 of 24 PageID #:5608

14

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

that conduct before the CFTC that we allege as part of the

conspiracy cannot, in and of itself, be a basis for antitrust

liability, therefore means it has no bearing on this conspiracy

case, is unsound, that is not a sensible argument, and I'll

give you an example.

It's undisputed that we have to prove that there was

an agreement of some sort, it was concerted activity, and that

it had a purpose, and that it had an anticompetitive intent.

If there is, just by way of hypothetical example, a document,

an e-mail between one party and the other, discussing it, that

intent, that agreement, that objective, if there is such a

thing, it is just as likely to be in the context of a

discussion of their shenanigans before the CFTC as it is in a

discussion of their attempt to prevent Eurex, for example, from

gaining access to clearing services from BOTCC.

Now, that being the case, with Rule 26 we're entitled

to pursue evidence like that, that is clearly evidence that is

not relevant in the strictest sense, is evidence that would

lead to the discovery of admissible evidence. It is simply not

logical and not consistent with, you know, the most basic

understanding of relevance for discovery purposes to suggest

that all of that is off limits.

That aside, again given that we're not talking about

independent agreements or actions taken pursuant to independent

conspiracies, I don't think you can, as a practical matter,

12:35:15

12:35:33

12:36:00

12:36:22

12:36:44

Case: 1:04-cv-06756 Document #: 528-4 Filed: 07/24/15 Page 5 of 24 PageID #:5609

15

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

draw the kind of line that they apparently want to draw. I

don't know that you can neatly separate out materials,

deposition questions, discovery generally, between something

that relates, for example, to the attempt to deny clearing

services from what was going on before the CFTC. They were all

happening at the same time, they involved the same individuals,

and they were all focused on the same objective.

There is an easy way forward, and Your Honor has

already heard extensive argument on this and there have been

several briefs as to this issue. The defendants produced

significant number of documents to the Department of Justice

pursuant to civil investigation demand that they issued in

connection with their investigation of potential

anticompetitive effects of the merger.

Defendants' counsel has acknowledged that essentially

everything, if not literally everything, within the scope of

what they had agreed to give us, back in 2005 or 2006, can be

found on those, in that production, which are, as I understand

it, in the form of CD's. They can be delivered to us at

essentially an costless basis. There's nothing to collect,

there's nothing to sort. All they need to do is make a copy

and send it to us, we'll pay the shipping.

Now, the other nice thing about those CD's is that

they can't argue that anything on it is privileged. By

definition, whatever they disclosed to the government has lost

12:37:06

12:37:33

12:37:54

12:38:14

12:38:33

Case: 1:04-cv-06756 Document #: 528-4 Filed: 07/24/15 Page 6 of 24 PageID #:5610

16

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

any privilege that would otherwise apply.

And in addition, we have presented the Court with

clear authority that says, regardless of whether the DOJ is

obligated to produce information it received in connection with

an investigation, there is no impediment to a party, a civil

litigant, obtaining those same documents not from the

government but from the party that produced it to the

government.

Legal principles are fairly clear cut. I'm referring

to the NASDAQ case, the Air Passenger case, and I forget the

other one, it's in the brief that we filed, docket number 140,

I believe. There's just no reason for a continued debate over

our entitlement to those documents. They are plainly relevant,

they're easily produced. Just having those documents could get

us substantially through what would otherwise be an expensive

document discovery process.

MR. SALZMAN: Yes, thank you, Your Honor.

Your Honor, I just wanted to correct a factual error.

It's not on CD's. They're hard disks, 120 hard disks, I

believe is the number. So it's quite a bunch of material. But

the other thing that I think is at least interesting is that

the documents don't just cover the period from October or

probably March of 2003 through 2004 or '05, those documents go

all the way through 2007, 2008 when the merger was completed

when the Department of Justice ruled that it could go forward.

12:38:55

12:39:10

12:39:36

12:40:08

12:40:37

Case: 1:04-cv-06756 Document #: 528-4 Filed: 07/24/15 Page 7 of 24 PageID #:5611

17

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

I also, just as long as we're doing things for the

record, I don't actually care for the characterization of

shenanigans before the CFTC because they weren't. They were

serious efforts and the result of the CFTC requiring them to

actually file a complete application, which wasn't completed on

the 29th of January, one day before they were approved.

Yes, we have those documents. We've never said that

we can't produce them because we gave them to the Department of

Justice. That's a silly argument. We try not to make silly

arguments. But we would suggest that most of them are

irrelevant, or at least for a substantial period of time, and

the others we don't know how relevant they are because the

Department of Justice required us to put in all of our business

plans which is what are in those documents which is why we've

been a little reluctant to -- more than a little reluctant,

quite reluctant to just give over the whole thing.

With respect to privilege, yes, they were all reviewed

for privilege and they were all produced to the Department of

Justice, but I have to look at the order to see if we have a

clawback in case there was something in there that was

privileged. I just don't remember that, Your Honor.

(Brief pause).

MR. SALZMAN: I just don't remember whether there was

a clawback.

MR. QUINN: Two things very briefly. First, the silly

12:40:59

12:41:19

12:41:40

12:41:54

12:42:05

Case: 1:04-cv-06756 Document #: 528-4 Filed: 07/24/15 Page 8 of 24 PageID #:5612

18

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

argument that defendants never made about governmental immunity

being a basis for them not having to produce their documents.

It appears at docket number 182, from pages 5 through 9; silly

argument they never made.

Mr. Salzman made the point there may be documents

within the DOJ production that are outside the agreed scope of

discovery here that are otherwise irrelevant. That may very

well be true. I will, therefore, just repeat an offer that we

made several years ago when we first started talking about

this, which is, they want to harvest from that larger

production the documents that are relevant to this case, then

we wouldn't object to that provided it doesn't have the effect

of extending out the ultimate trial in this case by even more

months, and further provided that they do give us everything

that's relevant in what they previously agreed to produce.

MR. SALZMAN: As a search database, that's fine. I

mean, it's enormous, but we ought to be able to figure out some

way to search it for relevant time period and for relevant

documents. That still means, Your Honor, that we have to

understand what's really relevant at this point in this case,

which would mean I still think they should come up and tell us

what the issues are.

Is he really saying stuff we did that failed to have

any impact on anybody is an issue in this case? Because it

sounded like it. Yes, the Board of Trade made an effort to

12:42:22

12:42:43

12:43:07

12:43:26

12:43:46

Case: 1:04-cv-06756 Document #: 528-4 Filed: 07/24/15 Page 9 of 24 PageID #:5613

19

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

deny them access to the Board of Trade Clearing Corporation,

but it failed. We objected to NFA's providing certain services

to them on the ground that it was contrary to their certificate

of incorporation. It failed. Nobody is alleged to have been

impacted by those actions. Why are they relevant to this case?

THE COURT: What I think plaintiffs' counsel is after

is the proposition that if there's a conspiracy to -- well,

let's take it out of this particular case. A conspiracy to

murder a competitor, a human being. The competitor eventually

gets murdered. Are you entitled to get discovery that on

several other occasions there was an attempt to murder the

competitor that failed? This ordinarily shows intent, but one

of the basic problems in this case from the very beginning,

which I've reiterated, is if one is trying to prove that the

defendants in this case wanted Eurex to fail, I would be

shocked to learn that there was evidence that this was not

true. This is a potential competitor seeking to enter the

market, you're better off without the competitor. The issue

always is, if you assume their intent, that they can find their

protest and the roadblocks, the things that they are legally

entitled to do.

MR. SALZMAN: Which is why we brought the motion for

summary judgment because there is no evidence that any party

dealing with them was impacted by anything we did.

THE COURT: So, actually, in my view, we've gotten

12:44:08

12:45:07

12:45:39

12:46:09

12:46:24

Case: 1:04-cv-06756 Document #: 528-4 Filed: 07/24/15 Page 10 of 24 PageID #:5614

20

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

closer. One of my major problems in this case from the very

beginning is that there are tons of paper, it's very difficult

to sort them because there were legal purposes to be served

that may very well have damaged the plaintiff in this case, but

they're legal.

MR. SALZMAN: Correct.

THE COURT: And what I think the plaintiff would be

most interested in are not discussions about the general

undesirability from the commercial perspective of the

defendants. The commercial undesirability of having Eurex open

and succeed doesn't get you very far unless you can pin

something that was first something they were not entitled to

do, and second, that it had some deleterious effect.

It's difficult to imagine that there's an awful lot of

stuff in what they sent the DOJ that reflects on this. There

were other reasons why they file stuff with DOJ. And, in all

honesty, some of it is filed with DOJ and the institutional

premise of DOJ that if you give us everything, even if we don't

really need it and even if we may never look at it, no one can

say we didn't get everything. And, frequently, it's in the

interest of the person that's providing this stuff to give them

as much as possible. Some people think in the hope that if you

give them enough, they won't be able to read it all, and some,

even if they're going to read it all, may be buried in data.

But the fact is is that I've said this before, what the result

12:47:12

12:47:41

12:48:21

12:48:48

12:49:12

Case: 1:04-cv-06756 Document #: 528-4 Filed: 07/24/15 Page 11 of 24 PageID #:5615

21

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

that they got, if you regard what happened to Urex as a

failure, the result that they got is a result that they

probably wished for and hoped for. Whether they did it and

caused it to occur is another issue entirely, which is why I

have insisted on focusing in discovery on things that they

actually did.

So I thought the last thing you would need to know in

order to prove this case is that they wanted Eurex to be

unsuccessful. So what you really have to prove is that they

did certain things that had or reasonably would have had some

kind of impact. The way I talk about reasonably would have had

impact is assuming we get to -- for example, if you establish

beyond a doubt that they caused Eurex four days of opening on

the market, and that's all they caused, forget the other

related stuff, we have some question as to what this case might

possibly be worth. But I always thought in the beginning you

had to focus on finding out what it was that they did as

opposed to finding out that which you already know, and that's

what happened to Eurex.

And there might be stuff in the DOJ files that might

be of use to you. I sort of doubt it because of the nature of

those filings and of the way they're filed and of the review

given to those files, but from the very beginning I thought

that this was a problem.

Now, it's a problem that would be easily overcome if,

12:49:44

12:50:13

12:50:46

12:51:16

12:51:40

Case: 1:04-cv-06756 Document #: 528-4 Filed: 07/24/15 Page 12 of 24 PageID #:5616

22

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

for example, you had some witness who came forward and said, "I

had a lot of business with the Board of Trade, I had a lot of

business with CME, one or the other or both, and these two

guys, these two goons from the Board of Trade or CME came over

and said we're going to screw up your accounts, we're going to

limit your access, we're going to do lots of bad things if you

are to have even one trade on Eurex." Great evidence. But I

think in the beginning there was a distinct impression I got

that the belief of the plaintiffs was that they weren't finding

such witnesses. Not only were they not finding such witnesses,

they were probably of the belief that the reason they weren't

finding these witnesses is because the Board of Trade and CME,

the defendant, intimidated the witnesses, which is again the

kind of thing that would be helpful to you, but that seems to

be gone. The possibility seems to be gone, the witnesses

aren't coming forward.

So what we got is very subtle acts that it is claimed

to have big effects. And it seems to me that what the Board of

Trade and CME have to do that would be illegal has to be

influenced on the actions of others. So it can't entirely be

hidden. If some witness somewhere, some person somewhere--and

in the case of this, many persons--would have been able to say,

"well, this is what the Board of Trade told us, this is what

CME told us, this is why we did what we did, we didn't want to

do it but we were afraid," this dropped out of the case very

12:52:06

12:52:32

12:52:53

12:53:26

12:53:51

Case: 1:04-cv-06756 Document #: 528-4 Filed: 07/24/15 Page 13 of 24 PageID #:5617

23

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

early. And, in fact, there were complaints offered by

plaintiffs' counsel that they couldn't get that stuff because

everybody is keeping their mouth shut.

Okay, and if the suspicions of the plaintiff here are

correct, it's a very unfortunate thing, but proof is proof, and

I didn't see any evidence that you were getting there. What I

see is pursuit of a lot of evidence that the Board of Trade and

CME probably thought this would be a better world for them

without Eurex. This is not a criminal intent, nor is it a

criminal hold.

What I would like the CME and the Board of Trade to do

is, and I realize there may be a certain expense, I'd like to

start taking a look at what it is they gave DOJ and start

talking about what might be privileged and what might not be

privileged and what is clearly not relevant, because it will

help me in one way, I won't be discussing this in the highly

theoretical way that I've just done, which is essentially

unattached to any fact in this case, because what I have is one

side saying there's all this stuff there, people haven't seen

the stuff, and the other side saying it's privileged, it

doesn't do you any good, and a variety of other things. You're

not going to reach agreement on what this is, and usually when

that happens I'd like to see some of it.

MR. SALZMAN: Can I say two things, then? Early on in

the case we tried to work out a sensible search term list --

12:54:11

12:54:43

12:55:08

12:55:31

12:55:52

Case: 1:04-cv-06756 Document #: 528-4 Filed: 07/24/15 Page 14 of 24 PageID #:5618

24

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

THE COURT: I remember that.

MR. SALZMAN: And I would say Speaker Boehner and the

President are doing better negotiating than we did. So it

wasn't very successful.

If we have a search term list and a date when it makes

sense, we can start doing tests on some of the hard drives and

see what comes up.

THE COURT: And bear one thing in mind, my standard

here is not that it be complete, my standard here is that it be

a fair enough sample that I can look at it and make some kind

of judgment.

MR. SALZMAN: Which makes -- I've seen a lot of courts

out in Delaware and New York are starting to do things like

that with electronic discovery, which makes quite a bit of

sense.

The other thing I think the Court should know is that

Eurex is not the last competitor to try to launch these

products and to have failed. Since Urex, there have been two

major efforts. CME and CBOT are not alleged to have done

anything to stop them, impair them, impede them, steer away

people, and they both failed just exactly the same way Eurex

failed. And it's the same people, the same banks.

So to say that these banks are intimidated by CME and

CBOT is actually totally unfair since they, first of all, are

our biggest customers and we're intimidated by them, and

12:56:13

12:56:35

12:56:50

12:57:10

12:57:34

Case: 1:04-cv-06756 Document #: 528-4 Filed: 07/24/15 Page 15 of 24 PageID #:5619

25

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

secondly, they keep launching competitors against us. So it's

hard to put this intimidation thing in any kind of light that

will stand up.

So again, I think it would be fair for us to try and

get a list of search terms that will focus on, in some way,

efforts to impede or impair anybody from using their market,

and we'll run -- you know, we'll pick some numbers at random,

pick the hard drives, and see what we get and present it to

you, present it to them.

THE COURT: That would be helpful. And one of the

reasons I suggested that there be a sample is because I can get

a sample a lot quicker than I can get the whole issue. You

might also wish to raise questions about what you think doesn't

count because it's out of the time range.

MR. SALZMAN: Well, I would hope that we can pick the

time range that begins at the time when their efforts to enter

the market started, somewhere early 2003, and I don't think

there's anything that we're alleged to have done past 2005;

maybe; nothing I know.

THE COURT: What do you think about those dates?

MR. QUINN: I don't agree with them off the top of my

head, Your Honor. I don't think you can neatly

compartmentalize --

THE COURT: Maybe you can discuss that, and I think if

they're reasonable, you're not going to get a lot of quarrel

12:57:50

12:58:16

12:58:38

12:59:00

12:59:16

Case: 1:04-cv-06756 Document #: 528-4 Filed: 07/24/15 Page 16 of 24 PageID #:5620

26

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

from the defendants.

With respect to some of the things that were said here

today, I'm going to look at my stuff again.

MR. SALZMAN: Thank you.

THE COURT: But you are not to wait until I speak to

start the sample.

MR. SALZMAN: I understand that. Thank you for taking

a look. Appreciate that.

MR. QUINN: May I be heard, Your Honor?

THE COURT: Absolutely.

MR. QUINN: First, in reaction to your remarks. I

agree completely with you that it's no secret, it's undisputed,

that CBOT, CME didn't want Eurex to succeed. I won't deny it.

And I also agree that that's not a basis for a liability for

anything. It's not what our case is about. That may be

perfectly legal, it may be perfectly legal to wish for failure,

but what's not legal is to join with another party and enter

into an agreement to prevent Eurex from succeeding and to do it

through unlawful means, that's what we need to prove.

And we've now spent I don't know how many years

talking about what might be in these documents. And it sort of

turned it on its head, is that we're being put in this position

by remarks that have been made is that we somehow have to prove

what is in their documents just to make a threshold showing of

relevance, we have to prove what's in their documents without

12:59:33

12:59:44

01:00:04

01:00:26

01:00:50

Case: 1:04-cv-06756 Document #: 528-4 Filed: 07/24/15 Page 17 of 24 PageID #:5621

27

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

seeing them, and I would suggest that is not a sensible and

efficient way to move this case forward.

With respect to the DOJ documents, Your Honor, I

understand why the Court has some skepticism about whether the

documents that are on those disks or hard drives, or whatever

they are, are important to us. We have our own views of that,

in part because what the DOJ was investigating and was very

open about was exactly the same sort of thing that this case is

about, it was about anticompetitive conduct focused in

particular around the use of common clearing, or to put it

differently, using the efficiencies of common clearing, the

denial of efficiencies to others, as a means of creating an

uneven playing field. That is something the DOJ was focused

on, that is an aspect of our case as to which they sought

summary judgment and the Court denied it and the Court said

we're entitled to discovery on that.

The DOJ also served CID on our client in order to

obtain the documents that had been produced in this case,

specifically the documents that have been produced in this case

which is pretty strong circumstantial evidence that there's

actually a great deal of overlap about what the DOJ was looking

for, and got, and the evidence that we're entitled to develop

in this case.

The process that has been suggested strikes me as

somewhat vague, but so be it. It's obviously not what we had

01:01:11

01:01:33

01:01:53

01:02:10

01:02:28

Case: 1:04-cv-06756 Document #: 528-4 Filed: 07/24/15 Page 18 of 24 PageID #:5622

28

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

in mind when we asked the Court to focus on our motion to

compel production of those documents.

The whole point was not to -- the whole point was to

provide a means of eliminating delay, of moving the case

forward, not creating another way of kicking the can down the

road another three or four months. If the defendants are left

to their own devises to decide what it is they think is

relevant, what it is, you know, they think is important to turn

that over in order to kick off three months of discussions

about whether these things are meaningful or not, that's going

to slow things down.

I would ask Your Honor for a ruling on the motion, one

way or the other, thumbs up or thumbs down, in part because my

client is pressuring me for a ruling on that and I've run out

of things --

THE COURT: What, precisely, is it you want me to rule

on?

MR. QUINN: On our motion to compel production of the

CID production.

THE COURT: We'll give you an order.

MR. QUINN: Thank you.

Two other things. In the Court's decision on summary

judgment, it did identify a number of issues as to which, in

its opinion, it said we are entitled to take discovery. Are we

now free to proceed with document and other discovery as to

01:02:49

01:03:07

01:03:24

01:03:34

01:03:48

Case: 1:04-cv-06756 Document #: 528-4 Filed: 07/24/15 Page 19 of 24 PageID #:5623

29

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

01:03:58

01:04:05

01:04:24

01:04:32

01:04:47

those issues?

THE COURT: You mean discovery other than the DOJ

papers?

the --

MR. QUINN: Yes.

THE COURT: Okay.

Your view?

MR. SALZMAN: I --

THE COURT: Do you want to take another look at what

MR. SALZMAN: I mean, I can't say that he's not free

to file a discovery request and we'll feel free to object.

THE COURT: Fine. That way it will be useful. Are

you basically--and I'm not saying you are irrevocably committed

to this, we are not applying rules of estoppel--are you

basically down to the point that they used clearing as their

weapon?

MR. QUINN: No. No, Your Honor. No, no.

THE COURT: You have others?

MR. QUINN: Well, actually there were several aspects

of it, one was impairment of market readiness by creating an

atmosphere of uncertainty. There were a number of aspects to

it.

Your Honor, we filed a complaint and the complaint

laid out what we were able to allege about the conspiracy based

on the information that was available to us. They challenged

Case: 1:04-cv-06756 Document #: 528-4 Filed: 07/24/15 Page 20 of 24 PageID #:5624

30

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

the sufficiency of it. The challenge failed. The Court found,

we believe rightly, that we have made out a sufficient prima

facie case on each of these elements. Since then the Court has

ruled that some of the aspects of the conspiracy that we said

could be as to liability can't via the Noerr-Pennington

doctrine. That has changed, but what hasn't changed is we are

seeking to prove that they entered into a conspiracy to destroy

Urex, to prevent it from succeeding. We won't know until we

get discovery what each act was and whether it does or does not

give rise to liability.

THE COURT: That's a perfectly satisfactory answer,

the problem with that answer is, from my case management

perspective, is you file a complaint and it has prima facie

validity that they did X, Y and Z, and then let's make it

better, they did A through L, got a lot of it. Then the case

goes on and there's some discussions and the plaintiff is

encountering what I would characterize as difficulty finding

evidence as to some of these things, evidence that does not lie

solely in the vaults of the defendant. And I got the distinct

impression that at least parts of the investigation, at least

parts of this case, was not going well for the plaintiff. And

it's interesting to me and helpful to me in deciding what to do

and what to look at is to see what there might be that is left,

what the most promising avenues are. And the reason I said

that we're not dealing with estoppel here is if something

01:05:05

01:05:26

01:05:44

01:06:15

01:06:48

Case: 1:04-cv-06756 Document #: 528-4 Filed: 07/24/15 Page 21 of 24 PageID #:5625

31

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

surfaces that you thought was irrevocably lost and it's now

come back to life, fine, but it's useful to me to know

precisely what you're putting in money on and what you're not

putting your money on. And if you tell me this is the

direction we're going now, it would be helpful to me. And

telling me we had a prima facie complaint with lots of things,

bad things that we thought we could prove, it's not going to

hurt you to tell me that some of these things are looking

brighter and some of them are looking dimmer, and I would like

to know which.

And bear in mind, it was not the defense that said the

plaintiff was having difficulty because people weren't talking

to them, that this or that witness is not available, with dark

implications about causation of that, that was said to me. I

understand that. It could be true, maybe it's not true, it

could be true. That's fine. But from your perspective that

where you think the evidence lies, where you think your best

bet is or best bets are, that's helpful to me to know that,

because otherwise I hear a string of very abstract arguments

which enables Mr. Salzman to come back and say to you: 1, that

you're all over the map, 2, that you're trying to raise things

that have already been resolved, and 3, most important from his

perspective, saying, you know, this is really kind of a vague

request, we don't see its purpose, this is the reason why it

shouldn't be produced, this is the reason why we shouldn't go

01:07:19

01:07:44

01:08:09

01:08:34

01:08:56

Case: 1:04-cv-06756 Document #: 528-4 Filed: 07/24/15 Page 22 of 24 PageID #:5626

32

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

down that path.

I make discretionary decisions based on what I

understand the purpose and current viewpoint of the lawyer is,

and I need something that has more rather than less specific,

and I'm offering you what is seldom offered, you can do it

without binding yourself to it.

So that's all I said, you don't have to respond to me

now. Either you send me something or you don't send me

something.

MR. QUINN: Your Honor, obviously, we have, to a

significant degree, engaged in a factual investigation to the

extent that it can be done without the benefits of the

discovery rules. And, obviously, I'm not in the position to

weigh work product, I can tell you that --

THE COURT: Don't .... put it in writing.

MR. QUINN: Okay.

Two other things. In, I think, at the August 7th

conference, I handed up a proposed scheduling order for the

Court's consideration. I have revised that order solely for

the purpose of updating the dates to take into account the time

that has elapsed since then. In other words, I just moved the

dates up. I'd like to hand that up and ask that the Court

enter it.

(Document tendered to the Court.)

MR. QUINN: And then the last thing is, and this is

01:09:12

01:09:26

01:09:46

01:10:09

01:10:29

Case: 1:04-cv-06756 Document #: 528-4 Filed: 07/24/15 Page 23 of 24 PageID #:5627

33

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

for the record, I believe it was at the August conference that

Your Honor requested that we prepare a draft unofficial

complaint that laid out what we view as our case in the

aftermath of the Court's ruling on summary judgment and then to

provide it to them --

THE COURT: Which was another method of what I just

said.

MR. QUINN: I just wanted the record to reflect that

we did that and we provided that draft unofficial complaint to

counsel for the defendants on September 3rd of this year and we

haven't received any response to that; not that I was

necessarily thinking I'd get one.

MR. SALZMAN: On the proposed scheduling order, since

we just were graced with a copy of it, we certainly would like

a chance to look at it.

THE COURT: Sure. Send me a note.

MR. SALZMAN: Yeah, we will.

And then, again, the reason we made the motion for

summary judgment, and just to highlight the important part of

it, we said, Your Honor, accept that we did all of the bad

things they say we did, nobody was impacted. And that still

remains, unless he has some new secret information, and if he

wants to share it with us we'd be happy to talk about it and we

might have a different view of the case, but right now we're

sitting with a case where there is no witness who said they

01:10:58

01:11:10

01:11:31

01:11:45

01:12:05

01:12:21

01:12:32

Case: 1:04-cv-06756 Document #: 528-4 Filed: 07/24/15 Page 24 of 24 PageID #:5628

34

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

were impacted by anything we did. There is no evidence that

anybody was impacted by anything except the experts, and those

experts should be disqualified under Daubert because they don't

qualify.

THE COURT: And you think I'm leaving this hang?

MR. SALZMAN: I don't wish to say that, Your Honor.

THE COURT: I am leaving it hanging.

MR. SALZMAN: Yes.

THE COURT: And I have a reason which I think works

for this case, but there is a period of time when it no longer

will work.

MR. SALZMAN: Okay. Thank you.

MR. QUINN: Thank you for your time.

THE COURT: Thanks.

(Which concluded the proceedings had on this date in the

above entitled cause.)

*

*

*

*

*

*

*

*

I CERTIFY THAT THE FOREGOING IS A CORRECT TRANSCRIPT FROM THE

RECORD OF PROCEEDINGS IN THE ABOVE-ENTITLED MATTER

/s/Blanca I. Lara

date