Below is the transcript directly loosely transcribed from audio.

Court: In case 22 cv2052, breaking code silence versus McNamara et al. Please state your appearance is beginning with plaintiffs.

Lueddeke: Good afternoon, your honor. Jason Lueddeke on behalf of the plaintiff.

Court: Good afternoon, mister Lueddeke.

Lueddeke: Good afternoon.

Gibson: Good afternoon, your honor. John Gibson, DLA Piper, representing the plaintiff BCS, and we brought with us as ordered our client representative, Jenny Magill.

Court: Alright. Good afternoon, mister Gibson. Good afternoon, miss Magill.

Tate: Good afternoon, your honor. Adam Tate on behalf of defendants. I have both the defendants here with me.

Court: Okay. Good afternoon, mister Tate. Good afternoon, miss McNamara. Good afternoon, mister Whiteley. Okay. We are here, on an informal discovery conference, yet another one, regarding the defendant’s motion for sanctions for rule 37 sanctions. I’m going to put some of the history on the record so that we have a fulsome record. You may recall that a while back, I convened an informal discovery conference on the defendant’s motion for sanctions, and then there were some supplemental filings. The issue before the court was defendant’s request for sanctions, evidentiary sanctions against, BCS and monetary sanctions as well, for its failure to comply with the court’s order to produce documents.

The legal question that was before me was whether plaintiff BCS was obligated to preserve, or the gist of the motion actually was whether BCS was obligated to preserve and produce the personal documents of its officers and directors under the electronic discovery order that the parties had stipulated to and had requested that I make into an order. And the dispute was BCS was arguing that it didn’t have an obligation under either the electronic discovery order or the federal rules of civil procedure to produce the personal documents of its officers and directors because they were not within BCS’s possession, custody, and control. A legal question that I have not answered yet, but that was the position that they took. I did note at our last in person informal discovery conference that I disagreed with that legal position.

And because of the seriousness of the motion and the potential outcome of the motion, that that if BCS lost, which could be devastating to BCS because of the actions I noted of its officers and directors who were refusing to comply with their obligations under the electronic discovery order, I noted that let’s try something different. And I tried to resolve the issue.

I came up with a plan, which even if I say so myself is brilliant. And it really was intended to see if we could resolve the dispute without, BCS being sanctioned for the obstinate, I will say, conduct of its officers and directors. And I ordered that at least one representative of BCS be here because I wanted to make sure that we created a record that allowed at least 1 officer and director on behalf of the other officers and directors to obtain clarity from the court regarding the very serious misconduct of the officers and directors. And doctor Hughes came. She was the, as I understand it, the president of BCS’s board of directors, and she appeared. And I explained my thoughts.

I explained where I likely was going to land on the motion for sanctions. And I explained that out of my personal respect for the work of BCS, I was willing to see if we could work if we could work through it and give the officers and directors another chance to comply with their legal obligations, as officers and directors who have a fiduciary duty to look out for the interests of the organization.

So we came up with a plan, that the parties agreed to which had 2 phases. Phase 1 was going to involve giving the officers and directors another opportunity to produce documents, and it involved giving them asking them to sign a provide a declaration as to whether they had documents, in certain data sources. And if they did, whether they would be willing to produce them. And as to those who said they had none, then of course, that would be the end of the issue. As to those who declared that they had some and would produce them, hopefully, that would be the end of the issue. And as to those who refused to cooperate with that easy process, then the defendants were going to get an opportunity.

I extended the time for discovery, and the defendants were going to get an opportunity to subpoena those officers and directors who were not cooperative. And, and then that would bring those officers and directors under my jurisdiction, so that I, if they continue to be obstinate and not cooperative, could find them in contempt personally.

So, this was carried out, and I want to thank the parties. It seems like the parties were cooperating with each other as far as information about how to locate the various officers and directors, and a host of subpoenas went out, 6, I should say. I don’t know if there were more. 6 is all I know about. Some declarations came in before the subpoena process. And then as I understand it, 6 subpoenas were issued.

Not all of them were served, but the declaration part of the process, whether completely successful at the end, actually got the attention of some of these officers and directors and some of them provided, declarations. Those were April Alexander, Arianna Conroyd. Bobby Cook was excused of the declaration process because he had been deposed and he had produced documents, which is not to say that his production is complete. Then Dee Anna Hassanpour, Denette King, Dorit Saberi, Jennifer Magill, Noel Beauregard. Those people have some level of cooperation, and it was not necessary or at least defendants determined that it wasn’t necessary to serve them with subpoenas.

Then 6 subpoenas were issued, Eugene Furnace, Jesse Jensen, and Vanessa Hughes. Those 3 subpoenas have not been served or at least as of the status report that was produced. And we’ll talk about why, but it appears that these three persons may be evading service.

Then there are 3 other subpoenas that were served, Lenore Silverman, Megan Hurwitz, and Shelby Kirchhoff. But despite the fact that they were served, it appears that there remain some problems with their with their responses to the subpoena, not the least of which is Shelby Kirchoff, who simply ignored the subpoena, and Megan Hurwitz, who very politely told BCS’s counsel to ‘f off.’

So, I can just tell you from I’ve reviewed the statement of what was produced and and all of these outcomes, the response that was, sent in by BCS. And I can tell you that, this outcome was nothing short of disturbing. It was a final chance for the officers and directors to do their duty and not put BCS in a position that, creates problems for the organization.

The organization that they claim to support and and whose mission they claim to support, and yet here we are with some possible efforts to evade service, some unsuccessful efforts to obtain documents from them. And so here we are at the end of phase 1.

And phase 2 was going to be the purpose of phase 2 is to then take the original motion for sanctions prepared by the defendants, and I think we’re going to have to update it to reflect the current state of affairs, but move on to the motion for sanctions. Now the original motion for sanctions involved simply evidentiary sanctions. Given the outcome of phase 1, I don’t know if defendants have an intent to update it for terminating sanctions. I certainly have the option to sua sponte issue terminating sanctions, which, miss Magill, I don’t know if you understand what that means, but it means you lose. It means your case is over.

I could dismiss your case all because of the actions of the officers and directors. So, I think that we are in a very we’re in a worst position. Well, BCS, I’m not prejudging the motion. I know that it has to be updated. But from what I’m seeing, just from what I’m seeing, not additional argument, I think BCS is now almost in a worse position than it was before phase 1.

Because now we know or we believe, and an argument I assume will be made that the officers and directors have not cooperated with this process, which leaves defendants with a couple of choices. Go after the officers and directors directly, or just say because the officers and directors documents were within the, at the very least, control of BCS, and I understand there’s a legal argument against it, but, then ultimately, all of this falls on BCS. And since BCS is the plaintiff and the motion remains against BCS and you and the defendants do nothing about the, the subpoenas. I don’t know I am not suggesting that’s the answer. I am just saying that’s one of the options that flows from all of this. If defendants pursue the subpoenas, of course, as I understand it, there were no objections to the subpoenas. Is that right, mister Tate?

Tate: No objections, your honor. No more.

Court: Okay. So the only recourse for a court addressing the subpoenas is contempt, which means monetary sanctions, jail time, pretty much that’s it. And again, I’m not suggesting that that’s where defendants should the the path that defendants should take, But I am noting that that’s a possibility.

Are you raising your hand, miss Magill? Is that what you are… yes? Okay. I don’t want you to speak unless your attorneys want you to speak. So and it’s not to be disrespectful to you, miss Magill. It is because you really shouldn’t speak unless your attorneys have told you that you can speak because they’re the ones that have the strategy for this case. And they want to make sure not make it worse, you don’t say things that will.

So, alright. So here we are in phase 2, and I have 2 general thoughts about the motion that you probably can gather from what I’ve already said. Number 1, I think the motion is, can gather from what I’ve already said. Number 1, I think the motion is out of date, and it’s going to have to be, I think you may have to start all over. We can certainly talk about that. I’m not sure. I’m not here to cost anybody any more money. That is absolutely not my intent. But the situation is very different from where we were before a few months ago.

So somehow, this is going to have to all get updated to reflect the realities of what happened in phase 1. That’s the least of the issues. The second issue is assuming that the motion is updated, and like I said, based on what I’ve said what I’ve read preliminarily, I anticipate that there is a possibility of terminating sanctions here, which was not requested in the original motion. And because of that and because plaintiff has not had an opportunity to actually address the issue of terminating sanctions, I don’t think it would be appropriate to rule on a motion that was already briefed but without terminating sanctions and just inject terminating sanctions. That’s not fair. And so, I am inclined to figure out how we’re going to redo this briefing, and open it for terminating sanctions.

And like I said, even if defendants don’t request them, I can sua sponte issue them. Because that is so severe, I’m going to do something that I also have never done before, but I guess this case is all about firsts for me. And that is, I’m going see if I can broker a resolution to this discovery dispute today. And what I want to do is I want to go off the record and see if we can figure this out. I’m going to put one of you, I’m going to leave one of you in here, I’m going to put one of you in the jury room, And it’s not a settlement conference for the case. I know, mister Tate, you have no appetite for that. I’m sorry

Tate: I appreciate that.

Court: But it is a negotiation on how to resolve this dispute, which, as you understand, touches on terminating sanctions. But I do believe that I have to give it one more shot before this thing goes terribly south for BCS. So that’s what I want to do. Do you well, let me just hear from the parties on what I’ve said in terms of where we go from here. Mr. Tate, this is your motion. You’re the one who requested what the evidentiary sanctions. I think we’re going to I need to also talk to the parties about how to kind of restructure the motion a little bit or reframe it. But anyway, let me let me hear from you, mister Tate, first since this is your motion.

Tate: Thank you, your honor. My biggest concern is and I don’t have the dates in front of me, but my intuition tells me that that the motion or at least the IDCs leading up to the motion was almost a year ago. And we went to 7, IDCs trying to resolve this. Several actions after the last one trying to resolve this. And each time, I know the court has the best of intentions, but each time it ends up costing my clients more and more money, for us to go through this process. And these are excellent attorneys on the other side, but I do feel like that they are getting what they want without any consequence, for doing it. And I feel like it’s time for the evidentiary sanctions to be ruled upon.

We will obviously do whatever the court wants to do, but that’s, you know, the principle evidentiary sanction that I asked for is that any custodian that did not provide its data sources be precluded from testifying in the action, including submitting declarations for the motion for summary judgment. Without diving too deeply into it, I think the biggest defender is Jesse Jensen.

Court: Mhmm. Right?

Tate: And a principal part of the opposition to my motions for summary judgment is a declaration from Jesse Jensen. And I don’t need terminating sanctions if the court just grants me my evidentiary sanction because I went on my motion for summary judgment. And that’s where I’d like to see things go. I don’t know if this I’ve ever made this point clearly enough and, allow me to do so. Miss McNamara is a cybersecurity professional. The one of the problems, that without getting into a settlement conference, one of the problems of this case is that miss McNamara needs to clear her name if she’s ever going to have a job again.

I’m sorry. Needs to clear her name of these accusations if she’s ever going to have a job in security again. Mister Whiteley is a technology entrepreneur. He gets VC backing to start tech companies. He doesn’t clear his name. He’s never going to see VC money ever again. And so we are looking forward to the court granting our motion for summary judgment because it gives them the vindication and the public acknowledgement that we need that they were not responsible for what they are alleged. And that, I have not talked with my clients because it’s the first time we’ve talked about terminating sanctions. But that seems to me to be a better outcome than terminating sanctions because it gives us what we most desperately need which is an opportunity to clear our names.

Court: So you’re saying that terminating sanctions wouldn’t clear their name?

Tate: I have not talked to my clients, but, that that is my, inclination at the moment. But, I’m not I would like to be able to talk to him before I made any decision on that. But my preference, is to have the court grant our evidentiary sanctions and we win our motion for summary judgment.

Court: Thank you. Okay. Mister Gibson?

Gibson: Thank you, your honor. I’ll start, but I, I think it would be wise for me to request it just a short recess to speak with my client, about that. But just two things. 1st, BCS is open and willing to, have the court, see if it can broker, as the court says, some kind of a solution for this particular issue, and we’re here and ready to spend the rest of the afternoon doing that with court. I think that could be fruitful.

The second thing is, though, as your honor points out, we would like to be heard, fully on this issue of terminating sanctions. I think just as, mister Lueddeke has is the one who’s prepared fully on this, but my observation is just that unlike, you know, a corporate board, a for profit board where you could maybe the board could come together and say, listen. There are 2 or 3 folks on the board who are not cooperating and volunteering their personal information, and so we have a remedy for that. We’re going to kick you off the board. We’re going to take away your salary. We don’t have that here because they’re volunteers. And so I believe we you know, DLA Piper has done everything it could do to help, the client BCS figure out how to achieve compliance for these individual volunteers’ personal information. And as your honor points out, a number of folks have come forward based on your honor’s process and volunteered complied and there are a few who haven’t. And we have tried everything we know to do that.

But I think we would want to be heard fully, your honor, before the entire case is resolved against BCS based on the acts of a couple of folks who didn’t comply. And as the court has pointed out in the past, this is a very important mission. I think from, you know, from my vantage point, both sides are together on the mission. And it’s just that, you know, there have been these this disagreement and spats and, you know, he said, she said, and both sides have a mountain of evidence against the other reportedly that shows that they’re acting in bad faith.

But the bottom line is I really believe that both sides want to come together, put this to an end, and move forward to help teens, to help folks who are being harmed by this industry that we’re both crusading against. And our feeling is terminating sanctions would not help achieve that. And so we’d like to be fully heard on that issue, but we would like to chat with your honor today and look forward to that conversation.

Court: Okay. You don’t have to worry about given being given an opportunity to be heard on terminating sanctions. I wasn’t going to rule on anything today. I’m keeping this at the informal discovery conference level for today as the last time ever on this issue. So mister Tate, this is it. This gets resolved today in some way that is beneficial, that that well, I shouldn’t say beneficial, but that makes sense for this particular dispute and then let the chips fall where they may after that resolution on summary judgment, or it doesn’t get resolved and I’ll just rule.And you folks will have to update the motions, etc etc. Right?

I will, extend the dates so that we’re not running up against the clock on anything. I know your motions for summary judgment have already been filed, but depending on the outcome of how this discovery motion plays out, you may have to redo those, unfortunately. I know. I know. But we’ll see because it depends. If the outcome is, for example, we strike evidence from Magill, Beauregard, Jensen, Hughes, and then it then then just whatever they said in the motion, they declared for the motion for summary judgment disappears, and then there’s no evidence. I mean, that may be the way to do it or I mean, it depends. It depends on how this all works out.

So, I’m not going to say anything right now about, what we’re going to do with motions for summary judgment other than to assure the parties that we’re going to have plenty of time to deal with everything. So, alright. Why don’t we do this? Why don’t we, why don’t we go off the record? Let’s put you folks in there. I will escort you in. We’ll leave you folks here with your disappointed face, mister Tate.

Tate: May I inquire why we’re going off the record?

Court: No.

Tate: None of the other IDCs have been off the record.

Court: Because I’m going to try to broker a deal to resolve this. And so, sometimes in those kind of circumstances, people say things that they don’t want to say on the record. And that’s the that’s the best way to try to resolve, I think, try to give it a best shot to resolve the dispute.

Tate: That’s fine, your honor. And we’ll, of course, you know, do whatever the court wants.

Court: I do want to raise and I know this is not a settlement conference.

Tate: I do want to raise one concern just so it’s at the forefront of your mind. Our motions for summary judgment are largely based on the no evidence standard that BCS has no evidence. And that’s 2 different things. Some of the evidence they present in their motions are just inadmissible character evidence, stuff that the court can never consider. Other stuff is stuff that the court may be able to consider except for their attorneys didn’t do a good job at presenting it. They made it through their lack of proper foundation. They didn’t the authentication. It’s inadmissible. What I want to be careful of as we go through this process is that we’re not talking about a bunch of evidence that the court should not be considered for the motion for summary judgment and having that cloud your judgment when you roll on the motions.

Court: Okay. I appreciate the concern. You can rest assured that I know what I’m doing and that I will not be I won’t be able to rule on anything that’s not before me on the papers, unless it’s obviously if we hold oral argument then argument of the parties. But relax, mister Tate. I know what I’m doing. Trust me.

Tate: Thank you. I believe that the whole time, I just I have an obligation to, you know, preserve my position.

Court: Fair enough. I am I am glad that you made your, you put your concern on the record, and, I think we’ll be okay. Alright.Let’s go off the record for now, miss Delgado.