Civil Minutes – General

4/10/24

Below are the Civil Minutes from the Court in response to the Motion to Dismiss by Breaking Code Silence. As highlighted, the Honorable Judge was ready for a decision on one of the Motions for Summary Judgment even without the decision made on evidentiary sanctions. For the other Motion for Summary Judgment, she was fully briefed and pending a decision.

As one can see in the below minutes, the Court orders Breaking Code Silence to support their claims of financial hardship as the reason for the Motion to Dismiss by providing evidentiary support of their claims:

“Specifically, Plaintiff shall file an under-oath declaration attesting to its current financial status, supported by relevant profit-and-loss statements, balance sheets, and bank statements. In addition to, but not in lieu of, this evidence, Plaintiff may submit any other evidence Plaintiff believes is relevant and would be helpful to the Court.”

Note: Breaking Code Silence never provided the required balance sheets or profit-and-loss statements as ordered. They ultimately provided various bills and expenses as well as a bank statement. This did not go unnoticed by the Court.

Present: The Honorable MARIA A. AUDERO, United States Magistrate Judge
Attorneys Present for Plaintiff: Attorneys Present for Defendants:
N/A N/A
Proceedings (In Chambers): Order Regarding Plaintiff’s Request for Voluntary
Dismissal With Prejudice Pursuant to FRCP 41(a)(2)
(ECF No. 198)
On April 8, 2024, Plaintiff Breaking Code Silence (“Plaintiff”) filed a Request for Voluntary
Dismissal With Prejudice Pursuant to FRCP 41(a)(2) (“Dismissal Request”). (Dismissal Req., ECF
No. 198.) In support for its request, and asserting that Plaintiff “has concluded it is not feasible to
proceed with the litigation,” Plaintiff states—without any evidentiary support—that “[p]roceeding
with the litigation under these circumstances would likely force [Plaintiff] into bankruptcy or other
financial predicament that could end its existence and prevent it from continuing its mission.” (Id. at
2.)1

Before Plaintiff filed the Dismissal Request, the following motions and issues were pending
before the Court:
(1) Slack Motion: On July 12, 2023, Defendants Jeremey Whiteley and
McNamara (together, “Defendants”) filed a Motion to Compel Slack
Communications and for Sanctions (“Slack Motion”). (Slack Mot., ECF No. 94.)
While the discovery issue of the Slack Motion was rendered moot as a result of
Plaintiff’s post-motion production of the Slack documents, the issue of whether
Defendants are entitled to attorneys’ fees and costs for bringing the Slack Motion
under Federal Rules of Civil Procedure (“Rules”) 37(a)(5) and 37(b)(2)(C) is still
pending with the Court. (See ECF No. 138.)
1
Pinpoint citations to docketed documents are to the page numbers in the CM/ECF-generated
headers.

(2) Sanctions Motion: On July 14, 2023, Defendants filed a Motion for Evidentiary and
Monetary Sanctions under Rule 37 of the Federal Rules of Civil Procedure
(“Sanctions Motion”). (Sanctions Mot., ECF No. 98.)
(a) Subpoena Discovery on Sanctions Motion: At an August 9, 2023 Informal
Discovery Conference (“IDC”), in an effort to resolve the Sanctions Motion
on its merits and provide the Court with the information necessary to
determine the nature and extent of Defendants’ prejudice, the Court
proposed—and Plaintiff and Defendants (collectively, the “Parties”) agreed—
that Plaintiff’s officers and directors would be given one final opportunity to
identify and produce documents responsive to Defendants’ discovery; if they
refused to participate in this final effort, Defendants would engage in
subpoena discovery targeted at those non-participating officers and directors
(“Subpoena Discovery”), and Plaintiff would reimburse Defendants for the
reasonable attorneys’ fees and costs they incurred in such Subpoena
Discovery. (ECF No. 120.) As noted during the April 5, 2024 IDC, the
agreed-upon Subpoena Discovery has concluded. (See ECF No. 196.) The
quantum of such agreed-upon attorneys’ fees and costs for the Subpoena
Discovery has not been determined.
(b) Supplemental Briefing on Sanctions Motion: On April 5, 2024, the Court
ordered supplemental briefing on the Sanctions Motion. (ECF No. 196.)
(c) Whiteley MSJ: On November 22, 2023, Defendant Whiteley filed a Motion for
Summary Judgment or in the Alternative Partial Summary Judgment (“Whiteley
MSJ,” ECF No. 152), along with an Application to Seal (ECF No. 153). The
Whiteley MSJ is fully briefed and ready for decision.
(d) McNamara MSJ: On February 23, 2024, Defendant McNamara filed a Motion for
Summary Judgment or, Alternatively, Partial Summary Judgment (“McNamara
MSJ,” ECF No. 172), along with an Application to Seal (ECF No. 174). In
connection with its Opposition to the McNamara MSJ, Plaintiff filed two
Applications to Seal. (ECF Nos. 183, 190.) The McNamara MSJ is fully briefed and
pending decision.

In light of the foregoing, the Court hereby ORDERS as follows:
(1) Dismissal Request: The Court ORDERS Plaintiff to supplement the Dismissal
Request with evidentiary support for its assertion regarding Plaintiff’s claimed
financial status, and SETS the following briefing schedule for the Dismissal Request:
(a) Plaintiff’s Supplementation: No later than April 17, 2024, Plaintiff shall
supplement its assertion regarding its current financial status with evidentiary
support. Specifically, Plaintiff shall file an under-oath declaration attesting to
its current financial status, supported by relevant profit-and-loss statements,
balance sheets, and bank statements. In addition to, but not in lieu of, this
evidence, Plaintiff may submit any other evidence Plaintiff believes is
relevant and would be helpful to the Court.
(b) Defendants’ Opposition: Defendants must file an Opposition or Statement of
Non-Opposition to the Dismissal Request no later than April 24, 2024.
Defendants are advised that failure to respond to the Dismissal Request may
be construed as consent to the granting of the Dismissal Request and may
result in dismissal of the lawsuit. C.D. Cal. L.R. 7-12; see also Ghazali v.
Moran, 46 F.3d 52, 53–54 (9th Cir. 1995) (affirming dismissal on the basis of
an unopposed motion pursuant to local rule).
(c) Plaintiff’s Optional Reply: Plaintiff may file an optional Reply no later than
May 1, 2024. The Dismissal Request will stand submitted for decision upon
receipt of the Reply or upon expiration of Plaintiff’s time to file the Reply,
and will be decided without a hearing unless the Court determines a hearing is
necessary. See Fed. R. Civ. P. 78(b); C.D. Cal. L.R. 7-15.
(2) Attorneys’ Fees and Costs for Slack Motion: To adjudicate the issue of attorneys’
fees and costs for the Slack Motion, the Court needs additional information from
Defendants regarding the task breakdown of their requested attorneys’ fees. For this
purpose, the Court ORDERS the Parties to file a Joint Stipulation and SETS the
following briefing schedule:
(a) Defendants’ Portion: No later than April 17, 2024, Defendants shall submit
their portion of the Joint Stipulation to Plaintiff. Defendants’ briefing must

include, for each individual who worked on the Slack Motion, an itemization
of time spent on each type of task, rather than providing the total hours
expended by each individual with a comprehensive list of tasks. (See Tate
Decl. ¶ 34, ECF No. 94-1.) Defendants may not add more attorneys’ fees than
those originally requested in the Slack Motion. If Defendants contend that the
attorneys’ time spent on the specific tasks of (i) meeting and conferring before
filing the Slack Motion, and/or (ii) preparing for and appearing at IDC
conferences related to the Slack Motion is recoverable under Rules 37(a)(5) or
37(b)(2)(C), Defendants must brief this issue.
(b) Plaintiff: No later than April 24, 2024, Plaintiff shall submit its portion of the
Joint Stipulation and sign and return the Joint Stipulation to Defendants.
(c) Filing: No later than April 25, 2024, Defendants shall file the Joint
Stipulation. No further supplemental memorandum on the Slack Motion is
permitted. The matter will stand submitted for decision upon the filing of the
Joint Stipulation, and will be decided without a hearing unless the Court
determines a hearing is necessary. See Fed. R. Civ. P. 78(b); C.D. Cal. L.R.
7-15.
(3) Attorneys’ Fees for Subpoena Discovery on Sanctions Motion: To resolve the open
issue of the quantum of the attorneys’ fees and costs for the Subpoena Discovery—
for which the Parties previously agreed Plaintiff would reimburse Defendants—the
Court hereby SETS the following schedule:
(a) Defendants’ Accounting: No later than April 17, 2024, Defendants shall
submit to Plaintiff an accounting of the attorneys’ fees and costs they incurred
for the Subpoena Discovery, including supporting documentation.
(b) Plaintiff’s Response:
(i) If Plaintiff does not contest the reasonableness of Defendants’ claimed
attorneys’ fees and costs for the Subpoena Discovery, Plaintiff must
pay said amount no later than May 10, 2024, or another later date or
dates agreed by the Parties.

(ii) If Plaintiff contests the reasonableness of Defendants’ claimed
attorneys’ fees and costs for the Subpoena Discovery, Plaintiff may
file a Motion to determine the quantum of such reasonable attorneys’
fees and costs, for which the Court SETS the below schedule.
Because payment of Defendants’ reasonable attorneys’ fees and costs
for the Subpoena Discovery is pursuant to the Parties’ agreement, and,
as such, has been ordered (see ECF No. 120), the Court will not
entertain an argument from Plaintiff contesting Defendants’
entitlement to such attorneys’ fees and costs.
a. Plaintiff’s Motion: No later than April 24, 2024, Plaintiff shall
file a Motion to determine the amount of attorneys’ fees and
costs to be reimbursed by Plaintiff to Defendants for the
Subpoena Discovery. The Motion must include a copy of
Defendants’ accounting and supporting documentation.
b. Defendants’ Opposition: Defendants must file an Opposition
or Statement of Non-Opposition to the Motion no later than
May 1, 2024. Defendants are advised that failure to respond to
the Motion may be construed as consent to the granting of the
Motion. C.D. Cal. L.R. 7-12; see also Ghazali, 46 F.3d at 53–
54.
c. No Reply: No Reply is permitted. The Motion will stand
submitted for decision upon receipt of Defendants’ Opposition
or Statement of Non-Opposition, and will be decided without a
hearing unless the Court determines a hearing is
necessary. See Fed. R. Civ. P. 78(b); C.D. Cal. L.R. 7-15.
(4) Supplemental Briefing on Sanctions Motion: The Court SUSPENDS the
supplemental briefing on the Sanctions Motion (see ECF No. 196), to be reinstated if
necessary based upon the outcome of the Dismissal Request.