Montgomery V Etreppid # 835 - Aug 20 Doc OSC Hearing Transcript - D.nev. 3-06-Cv-00056 835 Transcript-Aug 20 Osc Hearing

Case 3:06-cv-00056-PMP-VPC Document 835 Filed 09/03/08 Page 1 of 120
416
1
2
UNITED STATES DISTRICT COURT

DISTRICT OF NEVADA
BEFORE THE HONORABLE VALERIE P. COOKE, MAGISTRATE JUDGE
---o0o---
3
4
Dennis Montgomery, et al.,
5
6
7
Plaintiff,
-vsETreppid Technologies,
et al.,
8
Defendant.
9
:
:
:
:
:
:
:
:
:
:
:
No. 3:06-cv-056-PMP-VPC
August 20, 2008
United States District Court
400 S. Virginia Street
Reno, Nevada 89501
VOLUME III
10
11
12
TRANSCRIPT OF
CONTINUED ORDER TO SHOW CAUSE
13
14
A P P E A R A N C E S:
15
FOR THE PLAINTIFF:
Randall Sunshine
Ellyn Garofalo
Attorneys at Law
FOR DEFENDANT ETREPPID:
Stephen Peek
Jerry Snyder
Attorneys at Law
FOR COUNTER-DEFENDANTS:
Bridgett Robb-Peck
Gregory Schwartz
Attorneys at Law
FOR INTERESTED PARTY:
Carlotta Wells
U.S. Department of Justice
16
17
18
19
20
21
22
23
24
25
Proceedings recorded by mechanical stenography produced by

computer-aided transcript
KATHRYN M. FRENCH, RPR, CCR

(775) 786-5584

417
1
2
3
Reported by:

NEVADA LICENSE NO. 392
CALIFORNIA LICENSE NO. 8536
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25

(775) 786-5584

418
Reno, Nevada, Wednesday, August 20, 2008, 9:00 a.m.
---OoO---
3
4
THE COURT:
Thank you.
Please be seated.
THE CLERK:
This is the date and time for
continued Show Cause Hearing in case number 3:06-cv-056-PMP,
Dennis Montgomery, and others, versus eTreppid Technologies,
and others.
9
10
11
12
13
14
15
16
17
18
19
Present on behalf of plaintiff.
Ellyn Garofalo and
Randall Sunshine.
Present on behalf of defendants, Stephen Peek and
Jerry Snyder.
Present telephonically on behalf of
counter-defendant, Gregory Schwartz.
Present in the courtroom on behalf of
counter-defendant, Bridgett Robb-Peck.
Present on behalf of interested party,
Carlotta Wells.
THE COURT:
Thank you very much, Miss Clerk.
20
And good morning, again, to everyone.
21
As you know, this is the final day for the Order
22
to Show Cause Hearing in this matter.
And we've had an
23
unforeseen development.
24
in the courtroom.
25
record that he is -- well, Mr. Sunshine, why don't you just
Mr. Montgomery is not present here
And I guess I'll just indicate on the

(775) 786-5584

419
report what's occurred for the record.
MR. SUNSHINE:
There is a -- Your Honor, there
was an incident that Mr. Montgomery was involved in, of grave
concern to me and to him.
THE COURT:
All right.
MR. SUNSHINE:
I would rather not report on it
in any more details than that, but I will assure the Court
that there is a very good reason for him not being here.
THE COURT:
All right.
And counsel for all of
10
the parties, including Ms. Wells, conferred in chambers with
11
the Court prior to this hearing, and apprised counsel of the
12
details of the situation.
13
that Mr. Montgomery has been delayed in getting here.
14
hopeful he will be able to return to the Court.
15
Mr. Sunshine will keep us apprised of that, and we'll complete
16
today's hearing as soon as we can.
17
resume until 10:30 or 11:00, perhaps sooner.
18
expect all of the parties and counsel to be standing by as
19
opposed to going somewhere too far away.
20
And the Court will simply say

We're
And I'm sure
We probably might not

So, I would
And also, in addition to that, the parties and
21
the Court, counsel and the parties discussed proceeding
22
in
23
Mr. Montgomery's counsel felt that was not appropriate.
24
he, pursuant to his due process rights, ought to be able to
25
be present for the balance of this hearing, and the Court
Mr. Montgomery's absence.
And, for good reason,

(775) 786-5584
That,

420
agrees.
So, we'll just recess briefly with respect to
completing Mr. Cooper's testimony.
Mr. Cooper's testimony is completed, I don't believe that
Montgomery parties have further witnesses, and then the Court,
as counsel are aware, has allowed some time for making closing
arguments and so forth.
that.
The plan is that after
So, we'll certainly proceed with
In the interim though, we do have one housekeeping
10
matter we can attend to, which is exhibits.
11
please report to the Court the status of exhibits.
12
MR. PEEK:
So, counsel,
Your Honor, I am offering exhibits, I
13
think it's 1 through 44 that have not already been -- well,
14
some of those have already been admitted.
15
to go through them, I'm offering 1 through 44.
16
Ms. Garofalo has objection to at least one of those.
17
MS. GAROFALO:
But rather than try
We do, Your Honor.
And I know
We do not
18
object to the admission to any of the exhibits marked by
19
Mr. Peek, with the exception of Exhibit 29, which appears to
20
be an e-mail between Mr. Flynn or Carla DiMare, Mr. Flynn's
21
associate, and Mr. Montgomery.
22
e-mail is subject to the attorney/client privilege, and the
23
Common Interest Privilege.
24
previously noted some concerns with that particular exhibit.
25
THE COURT:
And we would object that that
I understand that the Court had
What volume is that, sir?

(775) 786-5584

421
MR. PEEK:
Your Honor, it is in Volume VI.
THE COURT:
MR. PEEK:
Oh.
All right.
And, Your Honor, to certainly be fair
to Ms. Garofalo, who has not been here during all of the
proceeding, I will note for the record that the Court had made
the ruling previously.
hearing or the 6-24 hearing, that all the documents associated
with docket number 635, would be sealed --
9
10
I don't know if that was at the 6-10
THE COURT:
MR. PEEK:
Right.
-- from the public.
But, still
11
continue to be made available to the government.
12
objections at that time, and the Court, over my objections,
13
did enter that sealing order.
14
the proffer that this should be admitted because --
15
THE COURT:
16
MR. PEEK:
I still, however, would make
Right.
-- it certainly goes to one of the
17
underlying issues associated with this case.
18
leave it at that.
19
THE COURT:
I made my
All right.
And I'll just
Thank you, sir.
I'm
20
going to sustain the objection to the admission of exhibit,
21
defendant's exhibit 29.
22
I think the Court, this e-mail that's listed, does
23
appear to the Court to be part of this Court's sealing order
24
concerning matters pertaining to Mr. Flynn.
25
time as that issue is resolved, the Court is not going to

(775) 786-5584
And until such

422
allow it in as evidence.
So, that will be the Court's order.
Other than that, Miss Clerk, all of the remaining
exhibits, pursuant to stipulation of counsel, are deemed
admitted.
Are there any other exhibits?
MS. GAROFALO:
MR. PEEK:
MS. GAROFALO:
MR. PEEK:
10
I'm -Sorry.
I apologize.
Let me go ahead and
finish.
11
12
Yes.
Yes, Your Honor, there is one exhibit we propose to

proffer.
13
THE COURT:
14
MR. PEEK:
Okay.
It will be the declaration by a
15
gentleman named Rob Powers, who is our outside vendor called
16
Focus, and who has been processing data.
17
did it, at my request, was look at the hard drives with serial
18
numbers ending in nine one one, and has done some processing
19
over the course of the last couple of days, and would proffer
20
a declaration.
21
Court.
22
And what Mr. Power
When I get that, I will proffer it to the
MS. GAROFALO:
If the Court would like to hear
23
our objection to that declaration now.
24
THE COURT:
25
MS. GAROFALO:
Yes.
We would object to that

(775) 786-5584

423
declaration unless the declarant is made available for
cross-examination.
of this proceeding, it would be appropriate to admit direct
evidence by way of declaration, while denying Mr. Montgomery
the opportunity to cross-examine the declarant.
I don't believe, in the context
THE COURT:
MR. PEEK:
Mr. Peek.
Your Honor, I think under the
circumstances of an Order to Show Cause, it's appropriate to
issue, to, excuse me, to put into evidence declarations that
10
relate to searches that have been made of, of various hard
11
drives.
12
learned this, during the testimony of Mr. Montgomery, I
13
believe, on either --
And it wasn't, certainly, until just recently we
14
THE COURT:
15
MR. PEEK:
16
testified to that.
17
submit that.
-- late Monday or Tuesday when he
So, we certainly made the effort and would
18
THE COURT:
19
MR. PEEK:
20
I think it was yesterday.
Well -We'll make a proffer about it, if you
would like.
21
THE COURT:
All right.
Well, you know,
22
yesterday, you
had Mr. Venables testify in the Court.
23
Although he wasn't identified as a witness, the Court went
24
ahead, given the circumstances, and allowed him to testify
25
over Ms. Garofalo's objection.
And the Court is not as

(775) 786-5584

424
inclined to allow this late declaration.
you believe it's germane to the issues in the case, but the
Court is going to deny the admission of that exhibit.
I understand why
As part of this case I will say, as discovery
continues, and if discovery disputes continue to be a problem
in Mr. Montgomery's production, certainly the eTreppid's
parties have leave to file declarations in support of other
discovery matters as they may arise.
this hearing, that exhibit will not be admitted.
10
11
MR. PEEK:
May I at least -- I'd like to at
least have it marked as part of the record.
12
THE COURT:
13
MR. PEEK:
14
record.
15
made as part of that.
You may.
And when I do, we can make the
Because at least that will show the proffer being
16
17
But for purposes of
THE COURT:
That's fine.
Any objection to that, Ms. Garofalo?
18
MS. GAROFALO:
19
THE COURT:
20
MS. GAROFALO:
No, Your Honor.
All right.
In addition, we do have
21
plaintiff's exhibit 1 and 2 that were marked yesterday.
22
would move to have those put in the record.
23
MR. PEEK:
No objection.
24
THE COURT:
Those are.
25
They're court records.

So, plaintiff's 1 and 2
are admitted.

(775) 786-5584

425
1
2
(Whereupon, exhibit 1 and 2 -- documents, were

received in evidence.)
THE COURT:
Are there any other exhibits?
MS. GAROFALO:
THE CLERK:
There are.
There are, Your Honor.
The Court
exhibits that have yet to be admitted are 8, 10, 11, 13, 14
and 15.
MR. PEEK:
THE COURT:
10
11
Are they all court pleadings?

Exhibit A is Judge Perry's
Preliminary Injunction Order.

Miss Clerk, is it 10 next?
12
THE CLERK:
Yes, Your Honor.
13
THE COURT:
That's ETreppid's Motion For
14
15
16
Sanctions, court paper;

11 is Montgomery Party's Emergency Motion For
Delaying Hearing, docket 686.
17
Is it 13 next?
18
THE CLERK:
13.
19
THE COURT:
That is docket 648, United States'
20
Notice Pursuant to May 21 proceedings;
21
14 is docket 660.
22
23
24
25
The United States' Report
Pursuant to Order to Show Cause;

Exhibit 15 is docket 659, Minutes of the Court dated
June 6th, 2008.
And 17 and 18 as well, Miss Clerk?

(775) 786-5584

426
THE CLERK:
No, Your Honor.
THE COURT:
So those were the only ones.
So, in other words, they're Court records.
And
the Court's interest, by way of explanation to counsel, is I
believe that Mr. Montgomery was examined by the Court as to
some or all of those exhibits.
Any objection to those being admitted?
MS. GAROFALO:
THE COURT:
10
MR. PEEK:
11
THE COURT:
12
No objection, Your Honor.
Mr. Peek.
No objection, Your Honor.
All right.
Those court exhibits
will be admitted.
13
(Whereupon, exhibits 8, 10, 11, 13, 14, and 15 --
14
documents, were received in evidence.)
15
THE COURT:
16
MS. GAROFALO:
17
MR. PEEK:
18
THE COURT:
Any other exhibits?

No, Your Honor.
No more exhibits, Your Honor.

All right.
Any other matters that
19
the parties wish to address before we take a recess while we
20
wait Mr. Montgomery's return?
21
22
MR. PEEK:
Yes, Your Honor.
And it really goes
back to, sort of, the procedural issue I raised.
23
You may recall the first day, on June 10th, as to
24
who carries the burden, and who goes first, and who has the
25
last say.
And I note that the Court agreed that it really is

(775) 786-5584

427
the burden on the Montgomery parties, on the Order to Show
Cause.
by my going forward, even though it really would have been
proper to allow, upon the completion of Mr. Montgomery's
testimony, for the plaintiff to continue the examination.
we've kind of done it in reverse order.
However, I think we tripped up a little bit yesterday
7
8
So,
And I'm not, I'm not saying anybody did anything

wrong.
It just happened.
THE COURT:
10
MR. PEEK:
That's just what occurred.

It's just what occurred.
I'm just
11
thinking more in terms of when we get to the oral argument,
12
whether or not they would then have the first and last say,
13
which would seem appropriate to me, because it is their
14
burden.
So, it just goes to when we get to the argument.
15
THE COURT:
All right.
16
MS. GAROFALO:
Ms. Garofalo.
We would -- we would ask the
17
Court to continue in the same way that the Court has
18
proceeded.
19
on his case first, taken advantage of that.
20
in light of the fact that his case was essentially put on as
21
the main case, because there was perhaps something of an
22
error made, I think consistent with that, Mr. Peek should do
23
his closing first, and the Montgomery parties should follow.
Mr. Peek has enjoyed the opportunity of putting
24
MR. PEEK:
25
frankly, in doing that.
And I think he,
I don't have a problem, Your Honor,

I just don't want two things to

(775) 786-5584

428
occur:
One is that there be some statement later that this
is invited error, and that there is an error in the way the
proceedings were conducted.
That's number one;
Number two, I don't want the Court to lose sight of
the fact that it is their burden and not mine.
a problem going first and last, but I want to make sure that
the Montgomery parties understand that it's their burden, and
they're just giving me the right to go first and last.
THE COURT:
10
I don't have
All right.
MS. GAROFALO:
With respect to the issue raised
11
by -- just raised by Mr. Peek, the law is the law.
12
it's the burden of the moving parties, so be it.
13
to any argument in the future that there was error attached to
14
the order of the proceedings, I would, preliminarily, say that
15
I would agree with Mr. Peek.
16
here.
17
that issue, and agree.

THE COURT:
19
MS. GAROFALO:
21
With respect
However, Mr. Montgomery isn't
And I think he does have to hear that issue, understand
18
20
And if
All right.
We will agree not to raise that
as error.
THE COURT:
All right.
Well, I'll just say
22
that I'll allow Ms. Garofalo and Mr. Sunshine to confer with
23
Mr. Montgomery when he arrives, and you can let me know what
24
his position is.
25
won't be perceived as inviting any error, on the record, I
And if Mr. Montgomery concurs that this

(775) 786-5584

429
think it's fine to have Mr. Peek go first and last, and the
Montgomery parties respond.
So, that's fine with me.
And I think it was an
inadvertence on everybody's part, including the Court's.
we'll just hear from him.
deal with it.
All right.
And if he has an objection, we'll
Anything further before we recess?
MS. GAROFALO:
MR. PEEK:
10
THE COURT:
11
And
Thank you then.
Not right now, Your Honor.
None, Your Honor.

All right.
We'll be in recess.
And I will
12
assume that Mr. Sunshine and Ms. Garofalo will keep the Court
13
apprised --
14
MR. SUNSHINE:
15
THE COURT:
16
Yes, Your Honor.
-- of Mr. Montgomery's status.
Thank you.
17
MR. PEEK:
18
(Recess taken.)
19
(Back on the record at 10:20 a.m.)
20
THE CLERK:
Court is again in session.
21
THE COURT:
Thank you.
22
All right.
Thank you, Your Honor.
Please be seated.
I think it's a good idea to
23
just go ahead and proceed at this time with Mr. Peek's
24
cross-examination of Mr. Cooper.
25
issues to take up with respect to final argument, but we'll
I know there are some other

(775) 786-5584

430
deal with that at the conclusion of the presentation and
testimony.
So, go ahead, sir.
MR. PEEK:
Your Honor, would you be so kind
as to notify me when I am about seven minutes away from
completion?
THE COURT:
Ms. Mann, can you do that?
THE CLERK:
I can, Your Honor.
THE COURT:
Thank you.
10
MR. PEEK:
11
12
13
CROSS-EXAMINATION (resumed)
BY MR. PEEK:
Q
Mr. Cooper, would you agree with me that an integral
14
part of the forensic process that one would conduct would be
15
to have reliably and reasonably reliable and reasonable
16
interviews and inspections of the data to be examined?
17
Yes.
18
19
20
Good morning, by the way.

Q
Good morning, Mr. Cooper.
I had said good morning to you
already.
21
And we know that, certainly, in this case, you
22
didn't conduct any inspections of either the terabyte drive,
23
the 500 gigabyte drive, or any of the 21 hard drives that have
24
been produced, have you?
25
Correct.

(775) 786-5584

431
And would you believe that what you have done, in the
times that you've spoken to Mr. Montgomery, since Thursday of
last week, Thursday or Friday, believe that you have conducted
what you consider to be reliable and reasonable interviews of
Mr. Montgomery?
Yes and no.
If, to the extent it was looking for
information that I was interested in, yes.
But to ask the
generic, kind of in the vacuum, question is it a full and
complete interview taken out of context, I wouldn't call it
10
a full and complete interview for every issue related to this
11
case, etcetera, which goes back to your question.
12
In general, yes, for the forensic process you want
13
to interview and go through the process.
14
the specific issue is.
15
It depends on what
And you would also agree with me, would you not, that
16
reading what has been testified to under oath would also be
17
important to the forensic process?
18
Again, it depends on the circumstance, which is one of
19
the issues that's come out in this matter.
20
at things in context.
21
could be relevant.
22
You have to look
So depending on what the issue is, it
It might not be relevant.
Well, the issue that we have been talking about is how
23
the dates got placed onto the terabyte drive and the 500
24
gigabyte drive.
25
not?
That's central to your testimony here, is it

(775) 786-5584

432
I don't think so.
Well, I understood you to say that you believed that
Mr. Montgomery had performed and used cloning software, and
that's the explanation for why the dates are on -- the earlier
dates are on the terabyte drive and the 500 gigabyte drive.
6
7
That was your testimony, was it not?

A
I believe not.
I said, assuming that that's the case, it
provides an explanation on how the dates are different than
what Mr. Karchmer had opined about.
10
I don't know what
mechanism he used.
11
Okay.
12
Nor did I try to inquire and get perfect clarity on
13
that.
14
Mr. Karchmer's conclusion might not be valid.
15
I was simply providing an explanation of why I thought
Okay.
Well, are you offering an opinion to this Court
16
that, in fact, the reason for the dates that appear on the
17
terabyte drive and the 500 gigabyte drive, which are earlier
18
in time than when the drives were available in the market
19
place, comes from the cloning software.
20
Is that your opinion?
21
No.
22
Okay.
23
I'm not saying that it's not.
24
25
That's all.
Thank you.
I just don't -- I don't
know.
Q
I'm just asking if that's your opinion.

(775) 786-5584
And I think you

433
said, no, it's not.
Correct.
Am I correct?
Okay.
And then with respect to that cloning process, let
me see if I understand a little bit about that.
testified that you understood that there were hard drives
that contained gigabytes of data that when the, when the sum
of them is added up, equals a million -- or excuse me, equals
one terabyte.
10
I think you
I think you said you knew there weren't any
terabytes in 2003.
11
Correct.
12
And that the --
13
There were -- terabyte drives were not made in 2003.
14
Right.
And that the explanation for the various, for the
15
date of November 2003 came -- could have come from the cloning
16
process, correct?
17
Yes.
18
And in order to clone, you would have had to have had a
19
number of different hard drives from which you would export
20
data on to the one terabyte, would you not?
21
22
Correct.
You're assuming that to fill up a one terabyte,
you would need several smaller.
23
And --
24
That's my understanding.
25
And so you would have, perhaps, a 100 gigabyte, a

(775) 786-5584

434
250 gigabyte, perhaps a 300, if that was available.
like that?
Something
Yes.
And each one of those drives would have had a date on it,
would it not?
Many dates.
It would have had many dates?
There is, uh, each file has at least three dates
associated with it for every file.
And then depending on how
10
that source hard drive -- and, in the vernacular, source hard
11
drives are the drive you copy from.
12
are where you copy to.
And target hard drives
13
Okay.
14
If a source hard drive was an operating system hard
15
drive, then there would be operating system information and
16
operating system metadata on that source drive.
17
However, if the hard drive was not an operating
18
system drive, but just a data, a data holding device as a
19
second hard drive, or a third hard drive for a computer, it
20
would not have that same operating system knowledge and
21
information on it.
22
Would it have dates on it?
23
Oh, most definitely.
24
So each one of the hard drives would have had a date on
25
it, correct?

(775) 786-5584

435
1
2
3
Well, at least three dates per file.
And there might be
other metadata dates also.

Q
And it's -- so when you're cloning each of these hard
drives, which are the source hard drives, you clone the dates
off of those source hard drives, do you not?
6
7
The user doesn't clone the date.
The user clones the
drive, and whatever is on the drive copies over with it.
Would that include then the dates?
Whatever is on that drive.
10
Okay.
11
Let me qualify that a little bit.
12
Sure.
13
There are two types of cloning processes.
Now --
One is a
14
copying of all the files.
And one is a copying of everything
15
that's on the drive.
16
cloning tool, just the files, you would get all the files
17
copied over.
So if somebody were to copy using a
18
And that would be --
19
Which is essentially a backup.
20
And that would be without the dates?
21
Well, it would have the file dates.
But it wouldn't
22
necessarily have the operating system dates or the operating
23
system environment copied with it.
24
So how would it get the dates if it's cloned, if at all?
25
Files have dates.

(775) 786-5584

436
Okay.
If you were just copying the files.
Okay.
off?
When you say "taken off," you mean removed or copied?
Not removed.
Well, from the source -- strike that.
8
9
So just the files have dates?
And the other system, what dates would be taken
Copied.
I apologize.
When you issue the copy or backup or clone command

or instruction, or invoke the copy or clone or backup program,
10
you have to tell it what you want the program to do with the
11
source, and where to put it on the target.
12
worlds, if you just clone drive A onto drive B, you get it
13
all.
14
from A onto B, then there were certain things you wouldn't
15
get.
16
over to B, then you would get those pieces of information.
In the simplest of
But if you were to say I only want to copy the files
If you said I want to copy all of the operating system
17
So, it's a very dependent function on how you
18
instruct the copying program, what I'll refer to the program,
19
how you instruct the program to act.
20
21
If you instruct the program to give the dates of that
operating system, what date would you get?
22
You would get the date that existed on the source media.
23
Okay.
24
25
And if you didn't give that instruction to provide
the date, what date, if any, would you get?

A
Well, it's -- sorry it's how you ask your question.

(775) 786-5584

437
don't believe that you instruct it to give the date.
You
instruct it to copy operating system data or file data.
Oh, I see.
And depending on what you instructed it to do, it carries
things with it.
when you invoke these programs, you also select switch values.
And a switch value can say copy subdirectories also, or not.
Preserve dates, or not.
program what you want and how you want it to occur.
10
11
12
13
Okay.
And there are things called switches.
So
You can -- you can tell, again, the
So if you select copying the operating system,
what date would you get on the target?

A
Your question is, uh -- it's a confusing question, but
you didn't mean it to be confusing.
14
Thank you.
15
When you -- your question is if someone copies the
16
operating system, the operating system are a collection of
17
files.
18
copying the files, like any other file.
19
the dates of the files that make up the operating system.
20
21
So by copying the operating system, you are simply

And you're getting
I think what you meant to ask is if you copy the

operating environment --
22
Thank you.
23
-- then you would --
24
And I don't have to pay for this seminar.
25
-- then you would get the dates that exist on the source

(775) 786-5584

438
device copied over to the clone, unless you invoked the switch
that said don't preserve dates.
it copied over would be the date, would be the dates of files
and things because -- and there's.
In which case, the date that
And what would you get, just the file dates only?
No.
You can still get the entire operating environment.
But the question is what is the date stamp of those pieces
of files.
people in this matter about dates.
And there's been a lot of conversation by a lot of

Maybe to help understand,
10
there's something called a create date.
11
at least three dates per file.
12
As I said, there are
One of them is create date.
The create date is a misunderstood date.
13
mean when the file was created.
14
created on the media that you are looking at it on.
15
It doesn't
It means when the file was
So if you create a new Word document, and you
16
created it today, August 20th, it will have a create date of
17
August 20th.
18
on the 22nd, the three dates would be created on the 20th,
19
modified on the 21st, accessed on the 22nd.
If you edit it on the 21st, and you access it
20
That's the metadata?
21
That's the standard metadata, not the extended metadata.
22
Right.
23
If you then copied that file to another piece of media on
24
the 23rd, it would have a create date of the 23rd; a last
25
modified date of the 21st; and an access date of the 22nd.

(775) 786-5584

439
Okay.
Because you hadn't modified it on the new media, hadn't
accessed it on the new media, but it was created on the new
media on the 23rd.
5
6
7
8
9
Okay.
You probably kind of already know where I'm going
here, but what's confusing -A
I don't know where you're going I'm just answering
questions.
Q
-- what's confusing to me is that we know the backup
10
drives.
11
provided to us -- or do you know that even?
12
We know that what was copied was backup drives, and
That's what the testimony has been.
However,
13
unfortunately, the word backup is not a term of art and
14
it has many different interpretations.
15
But we were told, so I won't use -- I'll try to use the
16
term generically, and I may be using it erroneously -- but
17
what we were told in testimony here is that, from time to
18
time, Mr. Montgomery would go to a computer station and he
19
would -- I'll use the word backup.
20
word -- backup everything that was available for backup on
21
that computer.
22
23
That may be the wrong
So I've read much of the testimony.
I'm sure that I have
not read it all --
24
Did you read it last night then?
25
I did read some last night.

(775) 786-5584

440
I figured you would.
And this morning.
I figured you would.
Particularly June 10 and June 24, because you mentioned
that had been discussed extensively.
Uh-huh.
And, unfortunately, in the world today, when people talk
about doing backups, it requires the questioner to drill down
a little further into what the answerer means.
10
backup is a generic word.
11
fashion or another.
12
you might not get all the files.
13
Documents folder.
14
15
The word
It means to copy files in some
And depending on the tool that you use,

You can backup the My
You can back up all --
We understand that, Mr. Cooper.
I just want to focus on
my question.
16
Okay.
17
That's what Mr. Montgomery testified what he did.
We
18
understand he may not have copied everything off of that
19
station.
20
to ask you to opine on that.
21
up, from time to time, the computer work stations at eTreppid.
22
And I haven't asked you to opine, and I'm not going

But, he would have been backing
You know that now?
23
That's what his testimony says.
24
And those would have had dates on them of some type,
25
would they not?

(775) 786-5584

441
Most definitely.
And the dates would have been, would they not, the date
on which the backup occurred?
No.
Okay.
When the file is on the source machine, it has the three
dates.
Would they have just the dates of the files?
And those are referred to as CAW, created access --
I want to know what the date is on the hard drive?
I'm about to answer that.
10
Okay.
11
12
If you would, please, because I only have a little
bit of time here.

A
I'm trying to answer your questions.
13
So when you back up files from source to target,
14
depending on the backup tool that you use, it will either
15
preserve CAW, or it will modify CAW.
16
17
18
I just want to know what date would be on that backup
drive.
A
Depending on the software used, and the switches invoked,
19
that will determine what dates are on the target backed up
20
drive.
21
Okay.
22
It can either be CAW, or it can be modified CAW.
23
Okay.
24
25
Would it show, in any way, the date that the
backup occurred?
A
If the backup tool or utility or program did not preserve

(775) 786-5584

442
CAW, then it would show the create date would be the date the
backup occurred.
CAW, then the create date will not show the date that the
backup occurred.
5
6
7
However, if the backup utility preserves
And then all we would have would be just the dates of the
files and no other date.

A
You would have -- essentially, correct.
You would have
the dates that came from the source machine.
have no new dates, because all old dates were preserved.
10
All right.
11
12
13
Okay.
And you would
I understand that.
So these source drives that were copied, what dates

would be on those before they were cloned?
A
It depends on which program was used, and which switches
14
were invoked, whether the CAW was preserved or the CAW was
15
modified.
16
not know what switches were invoked.
17
18
Okay.
And I do not know what program was used.
And I do
We have here, again, the source media of a
collection of hard drives -- we don't know how many, do we --
19
I --
20
-- that were ultimately put onto the one terabyte?
21
Correct.
22
Okay.
23
-- four or five or so.
24
And how -- did you hear that from Mr. Montgomery or did
25
I don't know.
I've heard that it was --
you read that in the testimony?

(775) 786-5584

443
I believe I recall that from a conversation with
Mr. Brandston.
it somewhere else.
4
5
Okay.
But, I don't know if I also read it or heard
And you just read the transcript last night and
this morning?
Yes.
Did you see anything in the transcript that referred to
the terabyte drive sources being four or five hard drives?
I don't recall.
10
Okay.
I don't think so.
And did you also understand that the four or five
11
hard drives from which it was copied were -- I'll use the term
12
generically -- backups of data from the personal work stations
13
at eTreppid?
14
No.
15
Okay.
16
I understand that not to be the case.

What do you understand those source drives, those
four or five source drives to be?
17
Derivatives from backups at eTreppid.
18
Okay.
19
Because --
20
Sorry.
21
So --
Go ahead.
So, it may have been?
22
I didn't know that it wasn't done.
23
Okay.
24
My understanding is that there were backups done of
25
I apologize, because I know you --
eTreppid employees' hard drives.
And then Mr. Montgomery

(775) 786-5584

444
1
2
3
reviewed files on some of those drives, some of those files.

Q
Those are the target hard drives.
The original target
hard drives?
Source hard drives.
Original source hard drives.
Well, technically, there's a clarification that the
Okay.
original employees' drive is source.
It's copied to target.
That's why I used target.
But then that target becomes a source to copy from.
10
Okay.
11
Let's call them the backups now becoming the
source.
12
Fair enough.
13
Okay.
14
15
Well, what did you understand the process to be.
And then tell me how you learned that.

A
So I understood that the backups drives that are
16
now the source, were reviewed for documents subject to the
17
U.S. Protective Order.
18
those files that were not subject to the Protective Order were
19
then copied to another drive.
20
drives were then copied up to the one terabyte.
21
22
And then those files that were not --
And then I believe those other
So, what we have then is the original backup, slash, now
target drives?
23
Original backup, now source.
24
Now source.
25
Excuse me.
But, originally target.
there would be more than four or five, am I correct?

(775) 786-5584
And

445
Yes.
Okay.
And then those, now, source drives -- and we don't
know how many there were -- that's correct?
Correct.
Those source drives were then reviewed to determine
whether or not there was a secret privilege on them.
7
8
9
Am I correct?
A
I'm not crystal clear on whether the backup drives were
reviewed for privilege -- for Protective Order, and then the
10
remaining were copied to a new piece of media.
Or if it was
11
copied to a new piece of media, and then reviewed.
12
believe there to have been a intermediate step before copying
13
to the terabyte dive.
But I
14
And so --
15
But I also -- I also could be incorrect in that there
16
might not have been an intermediate step, but it may have just
17
been copied directly from the backup drive directly onto
18
the --
19
New target?
20
The terabyte target.
21
I'm sorry.
I apologize.
I thought you said that there
22
were the backup drives, which would have the backup tapes,
23
which would have been multiple --
24
You said tapes, but I know you mean drives.
25
You're right.
We used to have tapes.
We all know that.

(775) 786-5584

446
I'm showing my age.
2
3
The backup hard drives were multiple, more than four

or five, probably.
Sure.
And then do I understand that those backup, now source
6
7
8
drives -A
To make it easier, why don't we refer to the original
employees' drives as set A; the backup of those would be B.
Okay.
10
Just to make a flow concept.
11
If the original employees'
are A, and then we back them up, it's B.
12
Okay.
So now we have set B?
13
Yes.
14
And set B becomes a source for C?
15
If they are extracted and copied to an intermediate
16
set that would be set C.
And then those could have been
17
accumulated into the one terabyte --
18
Okay.
19
-- drive, which I'll call set D.
20
But as I just said, I'm not sure if there was an
21
immediate step creating set C, or if it just went from A to B,
22
directly to the terabyte drive.
23
Okay.
So let me just -- so then set B is either the four
24
or five that went into set D, the one Terabyte Drive; or set B
25
may have been a source for set C?

(775) 786-5584

447
Correct.
But you don't know whether or not it was or was not a
source for set C?
Correct.
And set B would have dates on it.
You don't know whether
it included the date the backup was taken or not, is that
correct?
Correct.
But it would only -- if may have that date, but it also
10
may just not have that date.
It may have just file dates?
11
Correct.
12
And then those backups, set B, were then transferred
13
through a cloning process, or using cloning software, onto
14
set D?
15
That's a possibility that would explain the dates of
16
files and things on drive D that pre-date the manufacturing
17
capability of a drive of type D's capabilities.
18
Okay.
19
20
21
22
23
24
25
That's what I'm trying to understand.

But set B would have the date, would it not, that
the back -- that the set B was created?

A
No.
You just -- you just stated it previously correctly;
that set B may or may not have the date.

Q
Well, in order to give a date to set D, it had to have a
date on it, doesn't it?

A
Very good.
I, I didn't catch that before.

(775) 786-5584
But, yes, in

448
order for set D to have an early date, it would have had to
have come from set B with an early date.
3
4
And we know that set B drives were taken over a period of
2001, 2002, and 2003, do we not?
I don't know that, but that sounds right.
So the drives in set B --
Actually, I'm sorry.
I understood that Mr. Montgomery
was employed at eTreppid for more years than '01, '02, '03,
through '05 --
10
So then --
11
-- and copied backup regularly during that period.
12
So the backup drives, set B, would have data create dates
13
on the set B of either '99, 2000, 2001, 2002, 2003, would they
14
not?
15
Yes, if all those drives existed.
In other words, in
16
Mr. Montgomery's testimony from yesterday or the day before,
17
he talked about doing one to two drives, one to two backups
18
per month per person when Mr. --
19
Okay.
I don't recall that testimony, but maybe you do.
20
Well, I do.
21
Okay.
22
And then there's another gentleman that followed him that
23
testified and did the math in his head, and he said that means
24
it must be 50 or 60.
25
That math is incorrect.
Well, he was only there from 2002, June, until the end

(775) 786-5584

449
of 2005, which is two-and-a-half years.
times per month --
From 2002?
Right.
And if you go two
He said he came on board in 2002.
multiply two-and-a-half times 12 --
Times two.
No.
Twice a month?
Twice a month, excuse me, that's 48.
10
48 months -- or 48.
11
So then that would be times --
12
Two-and-a-half.
13
-- two-and-a-half a month, roughly.
14
15
16
So if I
hundred.
A
Yes.
So there's almost a
So, he was a little bit off 50 or 60.
I'm not being critical of the fact, but it's just the
population was a larger population.
17
Right.
18
So, it sounds to me like a hundred backups had been done
19
over time.
20
All having varying dates on them, correct?
21
Yes.
22
All having dates -- forget Glogauer.
23
about everybody else.
24
dates on the various sets B, did they not?
25
Let's just talk
From '99 to the present, having varying
Yes.

(775) 786-5584

450
1
2
3
And in the cloning software process, those varying dates
would be carried over, would they not?

A
If, if the cloning process preserved CAW, but for the
dates of the drives that made it to the D set, that had the
old dates, then wherever D got its data from, would have had
to have preserved the CAW information.
All of those dates?
Yes.
So that would be -- you would expect to see multiple
10
dates from set B on to the one terabyte drive, would you not,
11
if you use the cloning software?
12
Multiple dates, yes.
But I also recall that
13
Mr. Montgomery said that prior to 2003, there were not
14
state secret issues.
15
Correct.
16
And that he was able to copy more and faster, and needed
17
less review of the things prior to '03, because there would be
18
no likely state secret information in there.
19
So, if the terabyte drive was created from the
20
pre-'03 information, then I might only expect to see data
21
pre'-03 on the terabyte drive, and not for all his other
22
hundreds of backups.
23
But the dates that would be carried over then into the
24
one terabyte drive, would be dates that would be, say,
25
pre-2002, as well as 2003, would they not?

(775) 786-5584

451
1
2
3
They would be whatever he was copying over that was pre-
the 2003.
Q
Well, one thing that we do know from Mr. Karchmer's
testimony, do we not, is that his review of the one terabyte
drive showed that all of the create dates of the set B were
November 2003, correct?
Is that from Exhibit 48 or 49?
48, and his testimony.
Can I see 48 or 49?
10
Absolutely.
11
THE WITNESS:
12
THE CLERK:
13
THE WITNESS:
14
Thank you.
You're welcome.
(Witness reviews document.)
BY MR. PEEK:
15
Can you answer my question now?
16
I can.
17
this exhibit.
18
were in 2003.
Unfortunately, you've misstated his testimony in
19
20
This exhibit says that the folder create dates
Well, do those folder create dates come from the cloning
software?
21
Not necessarily.
22
Well, you were using as an explanation why the, why there
23
was not a manipulation, in your judgment, or what explanation
24
there would be for that.
25
of the folder create dates shown on the one terabyte, could
Is that the sequential dates of all

(775) 786-5584

452
1
2
3
have come from the set B create dates?

A
So there's, there's certainly nothing here about file
create dates.
There is only folder create dates.
And you're right, for these dates to have been
there, it would have come from cloning.
sense now.
of 2003 and 2004 look to be somebody who's trying to organize
files.
set B was made by creating a folder called 2003.
10
11
12
However, it makes
My comment was going to be that these folder names
But since these came from backups, it's possible that

It was
backed up in 2003.
Q
But we know that it comes from backup tapes of 1999, all
the way through 2003 though, don't we?
13
But because the --
14
Don't we know that?
15
But because the folder preceding the 2003 is the Word
16
backup, it's not common for a backup folder to exist on a
17
source piece of media.
18
know when the backups were made of the employees over time.
19
don't know the mechanism or tool used.
20
when the backup of a source person in set A was made, if it
21
was just backed up onto the root folder of a B drive, or if a
22
B drive was given a manual folder called 2003, and then every
23
time a backup was done, in 2003, it was put into that folder.
24
But you --
25
I don't know.
So, I'm now assuming, because I don't

I
And I don't know if

(775) 786-5584

453
You don't know any of that information, do you?
I do not.
Well, we know from his testimony --
I'm sorry his?
Mr. Karchmer's testimony.
Thank you.
That all of the folders had the dates of 11-18-2003.
Okay.
We know that.
And it's not here also.
Who?
Why wouldn't you expect to see varying
10
dates that set B in the cloning process would have imprinted
11
and then carried over into set D?
12
I'm sorry, ask your question again.
13
Why wouldn't you expect, since we know that all of the
14
15
16
dates on the one terabyte hard drive are 11-18-2003 -A
I'm sorry.
You're misstating.
You said all the dates.
All these --
17
The folder dates.
18
Yes.
19
All the folder create dates.
20
Just these four folders.
21
Well, he testified that all of the folders had dates
22
beginning 11-18-03, and continuing.
23
was.
24
25
That's what his testimony
I don't recall that being his testimony, every single
folder.
I just don't.
We can look at the record and we would

(775) 786-5584

454
know if he said it.
But this --
Well, let me ask you to assume then for a moment --
Okay.
-- for purposes of my question.
Okay.
THE CLERK:
MR. PEEK:
8
9
Excuse me, Mr. Peek.
Seven minutes.
I know.
BY MR. PEEK:
Q
All of the folders had create dates of 11-18-2003,
10
sequentially beginning at 4:58 until, ending on 4:58 a.m. on
11
the 18th, and then ending on the finishing date, finish time
12
of 11:18:22, 11:00 or 10:00, 11:00 at night.
13
I can assume that.
14
Okay.
15
16
17
18
Would that then -- wouldn't you expect to see
varying dates in that process, if cloning software was used?

A
2005.
Q
Perhaps.
I'm confused because I see a subfolder dated
And it has a date of 2003.

Those are the dates that the creator gave to the
19
subfolder, or gave it a date, or gave it a subfolder name
20
of 2003, a subfolder name of 2004, and a subfolder name of
21
2005, if you remember Mr. Karchmer's testimony.
22
23
But each of the files within that folder, as they

were created, all bear the date of 11-18-2003?
24
All files or all folders?
25
Well, there were really no folders.
They were just all

(775) 786-5584

455
files.
All of the files had dates of 11-18-2003.
And all of
the folders had dates of 11-18-2003 -- excuse me.
probably had the dates they were created, but I'm talking
about all of the folders?
Files
I'm lost.
I'm sorry.
So am I, because I don't understand how you can reach
a conclusion that there wouldn't be varying dates in the
terabyte drive showing a date other than 11-18-2003.
the files we know would have had a date of when -- if they
I mean,
10
contained all of the metadata.
11
myself at all 1.3 million files.
12
saying the 11-18-2003 date is easily explicable because it
13
would have come through the cloning process.
14
trying to understand why it would all have the same date, if
15
the set B, all themselves had varying dates?
16
But, frankly, I haven't looked

But the date, you were
And I'm just
Assuming that set B all had varying dates and they were
17
cloned preserving CAW, I don't know how this -- I don't
18
understand.
I would like --
19
Unless they were manipulated?
20
Well, I'm not going to jump to that conclusion.
21
Well, the date of the folder create date, where it's
22
going to get that date, which is the hard drive, the one
23
terabyte drive, picked a date of 11-18-2003, how did it get
24
that date on format?
25
It would certainly be helpful if I could look at the full

(775) 786-5584

456
set of data.
Well, sir, you haven't done that, have you?
I have not.
And you've been put up here on the witness stand,
offering opinions about, explanations, without having
investigated the source from which these dates came?
7
8
9
The topics that I was asked to opine by about was not
this topic.
Q
The topic was you were explaining why the dates were not
10
manipulated, and there's an explanation for the dates having
11
come through a source of cloning software.
12
get -- how would the one terabyte drive, when it's inserted
13
into the machine get a date, 11-18-2003, the format date?
14
So how would it
All I said was that Mr. Karchmer's explanation might not
15
be right.
16
to give you thoughts on the topic as I sit here.
17
18
There's another scenario.
I -- I'm, um, I'm happy
I'm not -- I only have about six minutes left, so -- I
apologize.
19
Let's talk a little bit about your testimony that
20
the, in the de-duping process, or in the review process, did
21
you understand that Mr. Montgomery created this or reviewed
22
the set B data to the determine the State Secret Privilege?
23
To the extent that set B was after 2003.
24
Correct.
25
But I'm not sure how much he reviewed for state secret

(775) 786-5584

457
1
2
3
before 2003.
Q
But it's your understanding what whatever he reviewed
came out of set B, correct?
I believe so.
Okay.
6
7
And set B -- well, I'll move on.

Have you looked at the Glogauer PST file that's been
reviewed or been produced here?
No.
Okay.
And I know you haven't looked at the terabyte
10
drive, so you don't know how many photographs related to
11
dogs and family parties and the like are duplicated, do you?
12
No.
13
And you don't know how many actual word documents or
14
HTML messages were actually duplicated, do you?
15
No.
16
And you don't know whether any of those HTML messages
17
that are there are just like, for example, little strips of
18
information that came off of a browsing on the web?
19
20
21
No.
Other than Mr. Karchmer testified, and you talked
about, that it's 92 percent.

Q
And so would you expect temporary internet files coming
22
off of the computer to be responsive to the request for
23
production of white papers, correspondence related to the
24
sale, or potential sale to potential customers of the Source
25
Code?

(775) 786-5584

458
I can't address if something is responsive.
I don't know
what the content of the files are, and what the issues are
that make something responsive or relevant.
So, you don't know whether --
But, I can also tell you that in the form of the drives
that Mr. Montgomery had, he wouldn't have known what are
duplicates.
We're going to go into that.
9
10
Which is another --
You were available, certainly, as an expert to the

Liner firm in January 2008, were you not?
11
Yes.
12
You were available in -- from January, all the way
13
through today, were you not?
14
(No response.)
15
And the ability to consult with you on how to run
16
deduplicating processes was available to Mr. Montgomery just
17
through a phone call?
18
You're assuming that he knew to ask the question.
19
Okay.
20
Or that somebody at the firm, the Liner firm, knew
to ask the question.
21
Yes.
22
And you could have given him that information of how to
23
de-dupe, through either one form of hash -- I think you said
24
there were two forms of hashing -- you could have given that
25
information to do that, could you not, over the phone, or you

(775) 786-5584

459
could have sat and met with him, one way or the other.
2
3
4
5
You could have done that, could you not?

A
Assuming that it was appropriate to de-dupe the files to
go through his review and production process.

Q
Well, that's because you don't know whether the review
was conducted on the set B.
If the review had been conducted
on set B, then we would know that set D has no State Secret
Privilege on it, don't we?
B for State Secret Privilege, did you not?
You said that he was reviewing set
10
I said I believe that's the case.
11
Okay.
So when he gets to set D, which is what was
12
produced, there's really no problem in you actually consulting
13
with him and doing the de-duping process, is there?
14
If he wanted to ask.
15
All right.
But my point is you could have done that
16
de-duping process because set B had already been screened, and
17
had been transferred, had been put onto the new target, set D,
18
had it not?
19
Uh -- so, yes, in theory, I could have helped with the
20
de-duping when it get to set D.
21
yesterday, as a forensic person, it is often, depending on the
22
situation, it is often desirable to have the full set of
23
situation, including dupes.
24
document to know that who saw it and when.
25
However, as I testified
And I gave an example of a copy
But you could have expedited the process by giving him

(775) 786-5584

460
de-duping ability, number one, correct, on set D, which has
now been reviewed for State Secrets Privilege?
Yes.
And you could have also given him forensic tools of
searching that for other word searches as well, could you not,
that would have been faster than Word, and that would not have
crashed, correct?
Well, once it got to the D set --
Correct?
10
Sure.
But, at that point, he's already done the work.
11
Okay.
And you also know that there was no State Secrets
12
Privilege in his testimony prior to 2003, correct?
13
Correct.
14
Do you know how many files of the 1.3 million files are
15
from 2003?
16
I do not.
17
So you can't offer an opinion as to what work effort
18
would have been taken to review 2003?
19
Correct.
20
And you could have also given him the de-duping process
21
22
information for set B as well, could you not?

A
Well, at that point, I don't think so, because I believe
23
that the Protective Order and instructions for him was to not
24
seek assistance.
25
You could have given him -- you could have sat down and

(775) 786-5584

461
said these are the algorithms you can run on set B to assist
you in eliminating duplicates, correct?
3
4
5
If he was allowed to ask for that help, and if he knew to
ask for that help, I could have done that, yes.

Q
Did you see anything in the Protective Order that said he
couldn't ask for help in, at least, obtaining algorithms and
the like?
8
9
10
11
My recollection of the order was that there was language
about not seeking assistance, but I don't remember the

following clause.
Q
I don't think it's there, but it's assistance in
12
reviewing, not assistance in the de-duping process, because
13
you're not looking at anything, correct?
14
at anything in the de-duping process, are you, to give him
15
the algorithms?
16
You're not looking
Depending on what tool you use, you do see content.
To
17
go through, to go through a de-dupe in the way I would go
18
through a dedupe, it would forensically image the media.
19
would then throw into NCASE, which I would use, run hash
20
values, and Sig analysis.
21
is the preview field which shows a couple hundred characters
22
or a hundred and something characters of content --
But as part of that process, there
23
The actual content?
24
Actual content of every file.
25
And so you're saying you couldn't have given him the

(775) 786-5584

462
algorithms tool then, without looking at content, is that your
testimony?
3
4
What I said was, in theory, I could talk him through what
tools to use.
Correct.
But if I were to help him do that, I would wind up seeing
content.
THE COURT:
Thank you.
10
Redirect.
11
12
13
Your time is up, sir.
REDIRECT EXAMINATION
BY MS. GAROFALO:
Q
Good morning, Mr. Cooper.
14
Good morning.
Very few follow-up questions.
15
Do you know of any reason why you were not asked to
16
assist Mr. Montgomery in de-duping the files, reviewing the
17
materials and so forth?
18
No.
19
Okay.
20
Are you privy to your firm FDI's billing
procedures?
21
Yes.
22
Are you aware of the fact that Mr. Montgomery has a
23
24
25
fairly substantial receipt with FDI?

A
Yes.
MR. PEEK:
Excuse me.
Is this now a new dog ate

(775) 786-5584

463
my homework excuse again?
This wasn't gone into.
money.
different.
paid.
It's now I don't have the time.
It's always something
Now it's an account receivable; he wasn't being
THE COURT:
MR. PEEK:
Now it's I don't have the
All right.
That's not an excuse either,
Your Honor.
THE COURT:
Ms. Garofalo.
10
MS. GAROFALO:
11
THE COURT:
Your Honor --
Well, I'm going to overrule
12
the objection because the question during the course of
13
Mr. Cooper's testimony has arisen concerning the fact that
14
he was certainly retained in January of 2008 for the purpose
15
of providing a declaration with respect to the motion
16
pertaining to the Glogauer e-mail, and the question had
17
arisen about his retention for this hearing.
18
questions on that issue.
19
MS. GAROFALO:
20
Your Honor.
21
BY MS. GAROFALO:
22
So, I'll allow
I have very few questions,
Thank you.
Are you aware of FDI's policy with respect to
23
providing services to a client where there is an outstanding
24
receivable?
25
Yes.

(775) 786-5584

464
And what is that policy?
That -- I believe the language is FDI reserves the right
to withdraw, or cease providing services, if an outstanding
balance is in excess of 15 or 30 days, and there's been no
agreement or conversation solving that.
6
7
8
9
10
11
12
13
14
And do you, as you sit here today, know whether or not
FDI actually declined to provide services to Mr. Montgomery?

A
To my knowledge, FDI did not decline to provide the
services.
Q
Do you know whether FDI declined, or is that just
speculation?
A
I don't know if the accounting department provided
notice.
Q
I did not.
All right.
Thank you.
15
MS. GAROFALO:
16
THE COURT:
17
MR. PEEK:
18
THE COURT:
19
Anything on re-cross, sir?

I have nothing further, Your Honor.
Thank you, sir.
All right.
THE WITNESS:
21
THE COURT:

Ms. Garofalo, do you have any other
witnesses to call?
23
MS. GAROFALO:
24
THE COURT:
25
Thank you.
You may step down.
20
22
I have no further questions.
All right.
We do not, Your Honor.
All right.
What we are going to do, is I have the

(775) 786-5584

465
1
2
3
Grand Jury coming in.

Miss Clerk, are we going to do that in
Judge McQuaid's courtroom?
THE CLERK:
I think we can, if you'd like.
THE COURT:
Anyway, I'm the criminal duty judge,
and so I have to take the Grand Jury returns.
ready to convene.
8
9
And they're
But one of the housekeeping matters that I wish to

address is the one we were discussing before Mr. Montgomery
10
returned from his other business.
11
argument, the discussion had among counsel, in his absence,
12
about who ought to go first.
13
this is an Order to Show Cause for the Montgomery parties
14
concerning this Court's order, what occurred in the chronology
15
of the testimony is Ms. Klar, at the first hearing, did,
16
initially, after the Court finished its questioning of
17
Mr. Montgomery, Ms. Klar asked Mr. Montgomery questions under
18
oath, and then Mr. Peek proceeded to cross-examine
19
Mr. Montgomery at some length, as we know.
20
And that is, in closing
The issue arose that, although
And then it should have been the Montgomery
21
parties' burden to go ahead and proceed with any witnesses
22
they wished to call.
23
other witnesses on behalf of eTreppid.
24
25
Instead, Mr. Karchmer was called, and
So the issue now is, one, counsel for eTreppid

has expressed the view that if the Montgomery parties wish

(775) 786-5584

466
Mr. Peek to go first, and allow Montgomery parties to speak,
then he will rebut.
wish to create any issue on appeal concerning the order of
closing.
that, he'll go first.
Garofalo.
first.
fine, of course, with the Court.
He's amenable to that.
But, he does not
And he said if Mr. Montgomery is amenable to waiving

If not, Ms. Garofalo on behalf --
Excuse me -- on behalf of Mr. Montgomery can go
And she wanted Mr. Montgomery to be here, which was
Ms. Garofalo, what's your position?
10
MS. GAROFALO:
Well, Your Honor, I, upon further
11
reflection, after looking at the documents, I was reminded
12
that what happened here is that there was a motion filed by
13
the eTreppid parties.
14
parties.
15
is what I think may have caused some confusion as to the order
16
or burden.
17
any objection simply to the order in which closing argument is
18
given.
19
So, in effect, they were the moving
The Court then construed it as an OSC re: Contempt,
Notwithstanding any of those issues, we will waive
We'll reserve all other rights.

I'm not sure that there is any further objection,
20
but it certainly is an issue I would like to look at more
21
closely, should it become an issue.
22
THE COURT:
23
MR. PEEK:
24
THE COURT:
25
waive it, but maybe not.
So, I'm so not sure -I don't know -I'm not sure that means, well, I

(775) 786-5584

467
MS. GAROFALO:
THE COURT:
We'll not --
In other words, what I'm interested
in knowing is, if you want to proceed first in closing
arguments, you certainly may do that.
So, do you wish to do that?
MS. GAROFALO:
I -- given the way that the
proceeding has gone, we are agreeable to having Mr. Peek
go first for closing argument.
or collaterally attack the order of closing argument.
10
11
THE COURT:
We will not object
All right.
Mr. Peek.
12
MR. PEEK:
I am fine with that, Your Honor.
13
But, certainly, what I'm -- the hint I see in that is sort
14
of the, I reserve the right to say that you have the burden
15
and not me.
16
certainly she and I may not agree on who has the burden.
17
It's my understanding that once I've made my prima facie
18
showing by a motion, I have carried my burden.
19
Court issues its Order to Show Cause based upon a finding that
20
there has been a showing that, you know, he should be called
21
forward to show cause why he should not be held in contempt.
22
It is his burden then.
23
first and last because they carry that burden.
24
25
And what I want to make sure of is that -- and
And then the
And they would have the right to go
If they want to concede to me that I can go first

and last, I'm okay with that.

(775) 786-5584

468
THE COURT:
MR. PEEK:
THE COURT:
All right.
So that's really the issue here.
All right.
I'll just tell you the
Court's view.
The Court's view is the one expressed in the
Order to Show Cause, which is that this issue concerning
discovery problems in this case, as it pertains to Montgomery
parties' responses to request for production of documents have
been subject of several orders of this Court.
Court's view, the eTreppid parties' motion for sanctions, the
And, in the
10
Court elected to construe that as an Order to Show Cause,
11
because it really was an order that had already been in place.
12
And the Court concluded that it really was about it had come
13
to a point where it's no longer the subject of a motion.
14
therefore, the Court construed that as an Order to Show Cause,
15
and placing, as I said -- the order directed Mr. Montgomery
16
to appear and show cause why he should not be held, or the
17
Montgomery parties, in contempt of court for failure to comply
18
with prior court orders.
19
what has occurred here.
So,
That is the way the Court construes
20
And so, with that, I guess I'll just ask -- and I
21
don't -- I'll ask just for clarification, Ms. Garofalo, how
22
would you like to proceed, with that perspective from the
23
Court?
24
MS. GAROFALO:
25
perspective and Mr. Peek's.
We understand the Court's

We would like to proceed for

(775) 786-5584

469
closing argument with Mr. Peek presenting his closing argument
first.
THE COURT:
All right.
And so, in so doing, as
I'm understanding, just to conclude this, you are agreeing
that you are not -- that you are waiving any claim that, in
doing so, you waived -- that there's been any kind of waiver?
7
8
MS. GAROFALO:
Yes, Your Honor.
To the extent
of the order of closing argument.
THE COURT:
10
All right.
All right.
Well, listen, let's do this.
Let's go
11
ahead and take care of the Grand Jury.
That should only be a
12
matter of a few minutes.
13
where the Grand Jury is, whether they're coming in here.
And we have -- I have to find out
14
THE CLERK:
They may be outside.
15
THE COURT:
Pardon me?
16
THE CLERK:
They may be outside waiting.
17
THE COURT:
Right.
So we're going to have to
18
clear the courtroom.
I guess a good question is, counsel,
19
I think I allotted an hour for each side, which may be
20
excessive.
21
the entire time.
22
the question is would it make sense, say, to reconvene at
23
one o'clock and just do the arguments all at once, so that
24
everyone can be on their way, rather than have you come in
25
back and forth.
Please don't consider that an invitation to take

But if you wish to, that's fine.
It just makes sense to me.

(775) 786-5584
I guess

470
1
2
3
4
So I guess I'm not asking, that's what we're going

to do, now that I think about it.
So, we'll go ahead and take a recess until
one o'clock.
Thank you.
MR. PEEK:
(Noon Recess Taken.)
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25

(775) 786-5584

471
Reno, Nevada, Wednesday, August 20, 2008, 1:00 p.m.
---OoO---
3
4
THE CLERK:
In the matter of Dennis Montgomery,
and others, versus eTreppid Technologies, and others, court
again in session.
7
8
9
10
11
12
13
THE COURT:
All right.
Thank you.
Counsel, as you know, it's time for any
closing argument you would like to make in this matter.

Mr. Peek, go ahead, sir.
MR. PEEK:
I just might note for the record that the wager is

on the "over" on me.
14
THE COURT:
15
MR. PEEK:
16
make sure I stay within the one hour.
17
THE COURT:
18
MR. PEEK:
19
THE COURT:
21
MR. PEEK:
22
THE COURT:
24
25
Okay.
But I've told everybody that you will
I will, sir.
So I would like to start out by
reserving 15 minutes, Your Honor.
20
23
Please be seated.
All right.
For my closing.
All right.
CLOSING ARGUMENT BY DEFENSE

MR. PEEK:
Your Honor, we've now had
four-and-a-half days of testimony on this matter that really

(775) 786-5584

472
starts in February of this year.
because the first request for production went out in August
of '06.
place, everybody should have recognized, counsel and the party
included, that that stay wouldn't last forever.
just a stay pending a determination by the Court as to whether
or not there would or would not be a State Secret Privilege
Protective Order in place or not.
But it starts even earlier,
And while we all recognized that there was a stay in
That was
So the collection of documents responsive to that
10
request should have started in August of '06.
11
Court allowed discovery to go forward in November, a second
12
request for production of documents was issued with a return
13
date in December.
14
practice, after many meet and confers, and status conferences
15
before this Court, and the Court's attempt to have the
16
parties meet and confer and workout their own issues in
17
relationship to the discovery.
18
Then once the
And that led up to, of course, motion
But, it didn't work.
And that led up to, of course, the February 21st
19
order.
And that is the genesis, if you will, of this matter.
20
And it's in that order, in which the Court very specifically
21
set forth what responses should be made and when those
22
responses -- and I say, not responses, I should say what
23
documents should be produced, and when those documents should
24
be produced as well.
25
parties an additional three weeks, I believe it is, because we
And the Court, of course, gave the

(775) 786-5584

473
had until March 14th -- or not we -- the Montgomery parties
had until March 14th within which to produce.
that wasn't sufficient.
And we know
And that led up to a couple of follow-up orders.
One of which was the, a May 7th order.
actually even a March order.
that, but I couldn't find it for certain.
there is another order on May 7th in which documents were
required to be produced on or before May 19.
10
I think it was
And I was trying to remember

But, I know that
And it's my recollection as well, that in that
11
May 7th order, document number 582, that the Court not only
12
gave a deadline of May 19th, but the Court also issued
13
sanctions at that time against Montgomery.
14
ordered that those -- that he should be sanctioned, and
15
ordered that there should be fees and costs payable to the
16
defendants in that case.
17
And the Court
And I know we have submitted, and the Court has
18
ordered, I believe, it was about $7,000 of sanctions.
19
of course, we know that that follow-up order, giving a
20
deadline of May 19th, was not met, so that led to further
21
Court intercession.
22
docket number 628, which gave the Montgomery parties an
23
additional deadline of May 23rd.
24
25
And,
And that's the May 21st, 2008 order,
And without recounting to the Court the numerous

representations in many of the court proceedings and discovery

(775) 786-5584

474
conferences -- because it would take too long to do that --
the Court will recall that representations were made to this
court, on a number of occasions, as to when compliance could
be met.
the dates that it set, based upon representations made by
the Montgomery parties as to the date upon which they could
comply.
8
9
And that's why the Court set the order dates, or
And what do we know about the productions

themselves -- and they're all part of the record.
And they're
10
now the evidence that has been submitted -- Montgomery has
11
still, even today, failed to produce many of the documents
12
that he was required -- that were required to be produced
13
by this Court's order.
14
documents that were produced, we still have so many not
15
produced, that it makes it difficult, if not impossible, for
16
the eTreppid parties to really proceed.
17
And setting aside for a moment the
Those that were produced, we also know were not
18
timely produced pursuant to the Court orders.
19
several documents still missing.
20
in PST format.
21
that by Friday.
22
be produced on or about May 23rd.
And so if we look now ahead
23
to this Friday, that is the 22nd.
Some three months later.
24
25
We still have
We have the Glogauer e-mail
A representation was made that we'll have

But that is something that was ordered to
We still don't have the remaining media responsive

to the request for production in PST format.

(775) 786-5584
We do have, I

475
believe it's Exhibit 9, text files of e-mails.
there is also, in part of Exhibit 6, e-mails as well, for
which we do not have them produced in PST format, with no
statement by Mr. Montgomery as to when the balance of the
media e-mails, electronic media e-mails will be produced in
PST format.
And I believe
What do we hear from Mr. Montgomery when I asked
him when will that happen?
Because we know it's been stripped
off of all of the hard drives that have been produced to us,
10
the one terabyte, the 500 gigabyte and the 21 hard drives
11
produced at the end of last week; there are no PST e-mail
12
files on those.
13
that he did not give us a date.
14
him on many occasions for a date.
15
a date.
16
And when I asked Mr. Montgomery, we know

And I asked him and pressed
He still would not give us
We also know that we do not have a complete
17
production of documents relating to the marketing of the
18
technology, including PowerPoints, white papers, contracts,
19
and other proposals relating to the sale of the eTreppid
20
technology, or use for purposes here, the Source Code of data
21
compression, anomaly detection, pattern recognition, and
22
object tracking.
23
We still don't have that.
I even produced to this Court, and showed and
24
examined Mr. Montgomery, on the one e-mail that came to us
25
from a Mr. Visconti, in which Chris Shockey is copying

(775) 786-5584

476
Dennis@ncoder.com about --
THE COURT:
MR. PEEK:
Dot net.
I keep getting it wrong, don't I?
At Dennis@ncoder.net, in which Mr. Shockey is
reporting to Mr. King what it is that is available for sale,
and what they have in the form of data compression.
7
8
9
Mr. Montgomery, of course, denies that he was

involved in marketing.
But what do we also have?
We have his
10
declaration -- the date of which I don't remember, Your Honor,
11
but I know it's part of the proceedings here -- in which he
12
recounts the efforts on the part of his employers, as he
13
calls them, to meet with government representatives, United
14
States representatives, multiple times during the period of
15
time of, I believe it's May through December of 2006.
16
We also know that Mr. Montgomery met with
17
Vice-President Cheney, or his representatives, staff of
18
Vice-President Cheney, sometime in the spring or early
19
summer of 2006, in an effort, as his counsel recounts in
20
the letter attached to the declaration -- that he signed,
21
under oath, and he was validating the letter, because it was
22
attached -- that there were efforts to license the technology
23
to the government.
24
25
So, we don't have any of those documents, which are

the efforts to sell the technology.

(775) 786-5584

477
We do not have the correspondence with Blixseth,
Sandoval, Atigeo, Opspring.
named Azmeth.
And I think Atigeo was previously
We don't have any of those.
The first response to "where are those e-mails?"
made no mention of this Common Interest Confidentiality
Agreement that the parties had.
But aside from that, and aside from what later was
claimed to be this privilege, this Court I think well knows
that not every piece of paper that relates to correspondence
10
amongst that group, Blixseth, Sandoval, Opspring, and Atigeo,
11
would necessarily be covered by the common interest privilege.
12
An e-mail that just says, "We are meeting today with
13
representatives of the United States Government to discuss
14
licensing the technology," would not be covered by the Common
15
Interest Privilege.
16
similar nature about marketing, would not be covered by the
17
Common Interest Privilege.
18
Other e-mails that would just be of that
So, we don't have any of those.
We asked, but did
19
not receive documents concerning payments from Blixseth,
20
Sandoval, and Opspring.
21
because you subpoenaed them from Wells Fargo; or I gave an
22
affidavit and a declaration saying what my payments were.
23
But, we don't have them from Montgomery.
24
25
We were told, well, you have them
We don't have the copies of the CDs that were

seized by the FBI.
We have an exhibit, which I believe is

(775) 786-5584

478
Exhibit 44, and which the Court has not had reviewed, but
attached to that Exhibit 44, Your Honor, is a spreadsheet
that Mr. Lang, in my office, prepared, with other members of
the offices of Holland & Hart, helping him, in which he sets
forth, on that spreadsheet, in the first column, the document
number, photograph number that we received from the FBI.
then following that is another column as to when the face
sheet of that CD was produced.
rolling productions of that, as to when just the face sheets
10
And
And you'll see the numerous
themselves were produced.
11
And you will find in that spreadsheet that not all
12
of the face sheets of the CDs that were photographed by the
13
FBI have, to date, been produced by Mr. Montgomery.
14
hasn't even done that.
15
So, he
And then when you get to the second part of that
16
Court's order of February 21st, which is the requirement to
17
copy and produce the electronic data on those CDs.
18
see in that Exhibit 44 spreadsheet that, to date, only nine
19
of those CDs have been electronically copied and delivered
20
to us.
21
You will
You'll also see on the spreadsheet that there were
22
an additional 12 that were produced to us that are CDs that
23
were not seized by the FBI.
24
whether it was that discrete request of giving us all of the
25
copies of the materials seized by the FBI, those other CDs
But certainly irrespective of

(775) 786-5584

479
would have been responsive to many of the other, one or more,
of the other requests that were made in the first, and in the
second request for production.
So we have a deficiency there, of not only producing
the face sheet of those in complete detail but, more
importantly, the full electronic version of it.
What do we also know about the CDs?
We know, of
course, the commingling of the CDs, which I respectfully
submit to this Court is, one, in violation of the standard
10
requirement imposed upon all litigants of do not spoliate
11
evidence.
12
Preserve it.
Do not spoliate it.
And we know in the method, manner in which it was
13
maintained, by being commingled with all other forms of media
14
that Mr. Montgomery had in his possession.
15
clear spoliation of evidence.
16
So, there's a
What we also know and, more importantly, is that
17
Montgomery has admitted to having lost and/or destroyed the
18
evidence, because he's unable to locate two of the CDs.
19
of which, Your Honor, is very critical to this case.
20
is a CD which is labeled "Warren's Old E-Mail."
21
One
And that
Now, certainly -- and I'll get to that in more of
22
my summation -- is that that piece of evidence is exceedingly
23
critical to this case.
24
pleadings in this case, has attempted, and has in fact defamed
25
Mr. Trepp and others, with an accusation that he has been
Because Mr. Montgomery, in many of his

(775) 786-5584

480
involved in corruption of a public official, by the addition
of one sentence.
We don't have the Glogauer e-mail from the Glogauer
computer to be -- that has yet to be produced, other than this
one CD containing one discrete e-mail, which Mr. Karchmer
says is not a complete production.
on that CD to, in case corroborate, if you will, Your Honor,
the declaration of Mr. Karchmer given in June of this year,
in objection to Mr. Montgomery's efforts to have introduced
But, what would also be
10
that e-mail in an exhibit to this Court, in opposition to the
11
government's State Secrets Privilege, to review on that
12
Warren's old e-mail, the existence of that Glogauer e-mail as
13
it was received by Mr. Trepp, to corroborate Mr. Karchmer's
14
testimony that I examined, on Mr. Trepp's computer, the
15
original of that e-mail; and I examined an archived copy of
16
that e-mail; and I reach the conclusion that the statement,
17
"We have to take care of Jim," is not on that e-mail, not on
18
the original e-mail contained in -- on Mr. Trepp's computer,
19
and contained on the archived document.
20
One would believe that a CD labeled "Warren's Old
21
E-Mail," would have that e-mail on it.
Thus, the reason
22
for its loss; thus the reason for its destruction.
23
as Mr. Montgomery knows, that on that CD, we would find a copy
24
of the original e-mail that was received by Mr. Trepp, that
25
would corroborate the falseness of that e-mail, and its

(775) 786-5584
Because

481
fabrication by Mr. Montgomery.
Without that e-mail, without the other documents
that have yet to be produced, this court should issue the
terminal sanctions.
of his complaint, and the striking of his answer to the
counter-claim.
The terminal sanction of dismissal
His conduct is so egregious in his failure to still
produce almost nothing, his contumacious conduct to this
Court, and certainly to the parties.
10
And it is egregious.
Neither party, more particularly the Montgomery
11
parties, can fully assess and prove their case, and our case
12
particularly, without all of the discovery in Montgomery's
13
possession -- which we still don't know when we will get it
14
all.
15
still missing, or have had destroyed, a very key part of it.
16
And we're still missing a key part of it.
And we're
The sanctions that Mr. Montgomery was issued in
17
May, apparently, meant nothing to him.
18
commencement of the Order to Show Cause Hearing on June 10th,
19
and on its continuation on June 24th, despite the comments of
20
the Court about how it took very seriously the failures to
21
abide by its orders, Mr. Montgomery still hasn't produced what
22
I have described.
23
And despite the
More contumacious conduct.
He has shown that the contempt orders that this
24
Court has issued, the monetary sanctions that the Court has
25
issued, will not change his behavior, and that the only

(775) 786-5584

482
conclusion that this Court should reach would be terminal
sanctions.
I'll address, more fully, some of the alternatives
to terminal sanctions.
assessed on Monday by this Court and Judge Pro of $2,500
per day until such time -- beginning on July 23rd, until such
time as the Source Code has been produced.
8
9
And certainly one of those was
Now the Court could issue a similar type sanction -and I say that a similar type sanction should be $2,500
10
per day for each portion of the Court's order with which
11
Montgomery did not comply.
12
So that means, if you go back and you look at
13
your order of February 21st, and you look at the requirement
14
to produce those documents in response to the many, many
15
requests -- I added it up, just sort of in my head.
16
add it up on paper -- but it's going to come up to about
17
$25,000 a day; or it may just be that the Court should issue
18
a sanction of somewhere between $7,500 and $10,000 a day
19
for each day that Mr. Montgomery has not complied with that
20
order.
21
Monday.
22
of Mr. Montgomery.
23
I didn't
It would be consistent with what the Court did on

It would be consistent with the contumacious conduct
In addition, the Court should also impose as a
24
sanction, an award to the eTreppid parties, all of its
25
attorney's fees.
It should also award all of the costs

(775) 786-5584

483
that it has incurred to date, which are set forth in the Case
Management Order, of its vendor, in assessing and producing
and copying documents off of the terabyte drive and the
500 gigabyte drive.
inventory, processing it, is about $260,000.
The cost, to date, of just assessing that
In addition, a cost estimate from the vendor to
fully process and copy the data on the two hard drives is
over $700,000.
a cost that the Montgomery parties should bear.
10
11
That's not a cost that I should bear.
THE COURT:
It's
Mr. Peek, when you say seven
hundred dollars --
12
MR. PEEK:
13
THE COURT:
Seven hundred thousand dollars.

-- hundred thousand dollars, excuse
14
me, to fully process and copy the data, to which data are you
15
referring?
16
MR. PEEK:
That's the data on the one terabyte
17
and 500 gigabyte drive, Your Honor.
We don't have estimates,
18
yet, of the cost to process, by the outside vendor, required
19
by the vendor protocols, the 21 hard drives.
20
cost to process by the third party vendor imposed by the
21
vendor protocols, because Montgomery, despite the fact that
22
all of the data that is on the 21 hard drives has been labeled
23
by the Montgomery parties as "restricted/confidential," that
24
means that I'm now required to not allow my client to see it,
25
not allowed my client to process it, not allow my client to

(775) 786-5584
And I say the

484
review it, to determine whether it does or does not meet and
is necessary for the defense of this case.
3
4
5
6
THE COURT:
Excuse me, sir.
You're saying the -- what was produced on the 21

hard drives is all labeled as "restricted/confidential"?
MR. PEEK:
I am.
I am.
And we know from
Montgomery's testimony that it is data that came from the
backup tapes that he took from the computers, the office
computers, the desktops of the employees of eTreppid.
10
How could Mr. Montgomery, in good faith, label that
11
as restricted/confidential, other than as a way to deny us the
12
opportunity to even process that?
13
What we also know with respect to all of the hard
14
drives that have been produced, is that the 21 hard drives
15
are only responsive to request number 16.
16
is the one that requests productions with respect to white
17
papers, correspondence of marketing efforts to customers or
18
potential customers.
19
material of request number 16 in the RFP One.
20
Request number 16
So, we still don't have that marketing
But, that's what they said.
We don't even know to
21
what document request the one terabyte and 500 gigabyte drive
22
are responsive.
23
that we have 92 percent of eight percent that is duplicate.
24
We also know that on that are family photos, photos of dogs,
25
photos of Parasol events, photos of the sky -- remember, I
We know there are many duplicates.

(775) 786-5584
We know

485
showed that to the Court -- and photos that have no relevance
at all.
And if, as the Montgomery parties claim, and if
as Mr. Cooper would suggest to this Court that he has to
look at all of those duplicates, if he did look at all
those duplicates, he should not have produced all of those
duplicates.
duplicates, he should have done, as Mr. Karchmer described,
and actually Mr. Cooper described, is make a log of all the
Or, once he reviewed them to see that they were
10
duplicates, but produce those as well, so that you would know
11
that you're just looking at the same document many times.
12
But, if you had a concern that it wasn't in fact the same
13
document, you could look at the duplicates.
14
narrowed, certainly, my review time and the costs associated
15
with it.
16
That would have
Let me go over the specific requests and when they
17
were produced.
18
tax returns, were not produced on or before March 14th.
19
only had them produced after March 14th.
20
from the testimony in Volume I, page 21, lines 10 and 11,
21
that he only began looking for those tax returns, which were
22
requested in Request For Production One of August of '06, at
23
the time of the February 21st order.
24
when it was lifted.
25
RFP One, request number 11, Mr. Montgomery's

We
And we also know
Not back in November
Those should have been produced immediately.

(775) 786-5584
He

486
didn't even look for them until after February 21.
What he also told us is that, well, one of the
reasons why is because he believes that two of the returns
were seized by the FBI.
However, he acknowledged that those were returned by the FBI
in March of '07.
that he made to this Court in Volume I of the transcript, why
they were seized -- you know, the fact that they were seized
by the FBI.
That was the excuse that he gave.
So, I don't know why the gratuitous remark
Other than just to give us more of the, what I
10
call, and have called previously, the shell game.
11
find the shell because it keeps moving.
12
You can't
And he also says that, at some point before the
13
production, he gave them to his attorneys.
14
if he's trying to throw the attorneys under the bus, but that
15
could be.
16
And I don't know
Request for Production number 13 and 14 in RFP One.
17
Those are the loans and repayment of loans of entities,
18
understood by Montgomery, to be controlled by Trepp or a
19
Warren Trepp-related entity.
20
documents, I think, in the form of a check or two.
21
did not comply in that production by March 14th.
22
that he failed to comply because documents are at eTreppid,
23
and he's not allowed to retrieve them.
24
that, oh, by the way, it was my check that the payment was
25
made on, obviously.
He produced some responsive

But, he
He claimed
But he didn't tell us
And he could have gone to his bank and

(775) 786-5584

487
gotten copies of checks.
This court was an attorney.
This court has sat on
many discovery disputes and knows that one way to comply is to
go to your bank.
your bank to get those records.
still don't have that compliance.
If you don't have them yourself, you go to

He has not done that.
RFP One, request number 16.
So, we
That is the one that we
talked about on the Source Code -- not on the Source Code.
This is non-Source Code, excuse me.
Limited to documents
10
concerning products and/or research and development and
11
technology; limited to marketing documents, business plans,
12
PowerPoint presentations, white papers, correspondence, and/or
13
notes of meetings with customers and potential customers.
14
And the Court will recall that we had a rewriting
15
of my production, and the court order of, well, what do you
16
mean by technology?
17
technology.
18
I thought it was only related to
The Court's cleared that up.
But, again, the only production we received were the
19
two hard drives in May; the one terabyte and 500 gigabyte.
20
But, that was not done by March 14th.
21
And what we were told by Mr. Montgomery is, oh, my
22
gosh.
There were millions of files to search.
23
supposed to do?
24
can't do this.
25
me.
And what am I
You know, I just -- I can't do my job.

And I can't do that.
And I
And it was a, oh, woe is

(775) 786-5584

488
Well, if, as we were told by Mr. Cooper, and
really not by Mr. Montgomery, that he had what we'll call
set B, by Mr. Cooper, reviewed the backups to take off all
of State Secrets Privilege to deliver to the government, and
then copy them to this one terabyte and this 500 gigabyte
drive, he has searched them.
he told us himself, he had to look at every document.
knows that there are no documents responsive to that request
number 16.
10
He has looked at them.
Because
So, he
And I've told you already that what we looked at on
11
the 21 do not contain any documents at all, post-employment,
12
at eTreppid.
13
that are responsive to that request.
14
So, there are no documents on the 21 hard drives
Request number 24 and 28 related to copyrighted
15
documents, and documents related to, or connected with, in any
16
fashion, communications that relate to copyright assignments.
17
He didn't produce those timely by March 14th.
18
don't have any others.
19
have been produced on the two hard drives, but they weren't.
20
And then, certainly, there was no designation, as I've said
21
already, in the two hard drives, as to what -- whether or not
22
the documents were responsive to 24, 25, 26, 27 and 28 of the
23
RFP One, because we know that they came from the backup tapes.
24
But what do we know as well about those backup tapes?
25
He says that I
He did tell us that some of them might
This is the interesting thing about the backup

(775) 786-5584

489
tapes.
Because we've been told that it contained State
Secrets Privilege, documents that would have been classified,
were required to be kept -- and I think this Court would
understand -- were required to be kept in a secured facility,
not in Mr. Montgomery's home, as he has argued in testimony
to me.
So, to say to me that these backup tapes I kept had
to be reviewed, had all this State Secret Privilege upon it
is, frankly, significantly suspect.
Mr. Montgomery knows, who
10
had the top secret clearance, they should have been kept in a
11
secured facility.
12
They weren't.
They were taken to his home.
We know, as well, that John Hughes, not employed,
13
didn't produce that.
14
garbage.
15
But when he did produce it, more
Same thing with Jale Trepp.

Request number 30 and 31.
Those were the efforts to
16
sell technology.
17
don't have -- well, here's what we heard though.
18
have possession of those responsive documents.
19
has them.
20
You know, we've gone over that.
But what we
He doesn't
Mr. Flynn
And it's always throwing the lawyer under the bus.

And what we know is that we did, at least, look at
21
this one e-mail.
22
testimony of Mr. Venables, is that Mr. Montgomery has numerous
23
e-mail accounts.
24
told.
25
And what we also know now, from the
I think six is what we're -- what we were
We have nothing from any of those.

Then we get to the RFP Two, request number 24, 25,

(775) 786-5584

490
26, and 27.
Those respect payments to him.
Those are
contracts.
Azmeth, Sandoval, Atigeo, and other customers.
over some of the correspondence already that were included
in RFP One.
produced by March 14th.
And we were told that those documents came off of computers
and from lawyers at Whitney -- Dorsey & Whitney, is what we
were told.
We have correspondence with Blixseth, Opspring,

And we've gone
Some of that has been produced, but it was not

Some of it was produced in late May.
And that was Ms. Klar's statement to this court.
10
But when I asked him about whether or not he has
11
e-mails, he told us, well, I haven't looked through all my
12
e-mails.
13
What we also know about e-mails in the hard drives
14
that have been produced, there are no PST files.
15
e-mails.
16
No files of
Those were stripped.

If, as he told Mr. Cooper, all of the documents
17
that went on the one terabyte and the 500 gigabyte drive came
18
from set A, being the source computer of each of the users at
19
eTreppid, set B were the backups, we know from the testimony
20
of Mr. Glogauer, that the procedure of Mr. Montgomery was to
21
close down all the applications, at least on Mr. Glogauer's
22
e-mail -- or Mr. Glogauer's computer, and take a backup of
23
everything.
24
applications were open, and I probably didn't capture them, is
25
more poppycock.
So no applications were open.
So the notion that
And we also know that he has removed them.

(775) 786-5584

491
Because if they were on set B, as Mr. Cooper described to us,
then they would be on set D -- unless they were stripped off.
And they were stripped off because he doesn't want us to have
the e-mails, because he doesn't want us to have the Glogauer
e-mail.
He doesn't want us to have "Warren's Old E-mails", because
he knows it will be prove him to be guilty of false and
fabrication of the Glogauer e-mail and the Jale Trepp e-mail.
He doesn't want us to have the Jale Trepp e-mail.
He admitted there are numerous e-mails with
10
Sandoval.
11
Blixseth and others at Opspring.
12
throws Sandoval under the bus and says Sandoval took all of
13
the Opspring e-mails that I had, and he put them someplace,
14
and so go to Sandoval and get them from him.
15
He's admitted that there are e-mails with Edra

But what does he do?
But, again, where are the Ncoder.net e-mails?
He
Where
16
are the other four or five accounts that Mr. Montgomery used,
17
including one under the alias Smartin666?
18
19
Where are those?
He admitted that he was able to search for e-mails.

But just, again, says I had so much.
20
I couldn't do it.
RFP numbers 2, 6, and 7, the CDs, we've gone over
21
that.
He purportedly brought, to the June 10th hearing, some
22
disks.
23
I'll let the Court review Exhibit 44, which shows the rolling
24
productions that did occur, and that they were not -- they
25
are not yet complete.
He brought more disks at the June 24th hearing.
And
And you'll see the numerous late dates

(775) 786-5584

492
of those.
Another one that is most telling is RFP Two, request
number 22 and 23.
excuse me, e-mails that were given to the media.
them in PST native format.
Those are the e-mails to the media -- or

We asked for
We still don't have those.
What we do have is another story.
Well, I may
or may not have, I'm not sure whether I did or not, deliver
e-mails either the Wall Street Journal or Lisa Myers at NBC
News.
10
But whether he did or did not provide them to them,
11
we still don't have those e-mails in PST native format file.
12
And we have no date for compliance with that court order.
13
He produced what he says he thinks was given in the
14
text files.
15
Court can look at those, I think it's Exhibit 9 -- that those
16
media, or those e-mails were copied and pasted in various
17
order.
18
strings.
19
decision -- to put things in order differently than the way
20
they would have originally appeared in the e-mail string.
21
he doesn't even know what an e-mail string is, a computer
22
scientist.
23
And we saw in the text files that -- and the
They don't -- they're not even parts of e-mail

They're just his decision -- Mr. Montgomery's
And
So, that's incomplete.

He acknowledged that he understood he was to produce
24
native -- PST files in native format.
25
to me.
He says he has them.
He acknowledged that
He also says, though, that he

(775) 786-5584

493
gave his attorneys files that had PSTs on them, but he didn't
say he gave them all, just gave some of them.
course, we had that dispute about the unnamed lawyer.
think it was in the June 24th hearing.
have the name of that lawyer.
forthcoming to me.
And now, of
I
And I think we now
And I am told that will now be
But where are the rest
of them?
Exhibit 9, you can see that there are numerous
e-mails.
And I think it's also Exhibit 8, or Exhibit 6, in
which those are the ones that, purportedly, he thinks Flynn
10
may have given.
11
no PST files.
12
So we have both Exhibit 6 and Exhibit 9, but

Just text files.
We know that some of the e-mails are in the PST file
13
somewhere.
14
asked, that he has no e-mails from Flynn to the Wall Street
15
Journal that predate November 1st, which is the date of the
16
Wall Street article.
17
from that fact that it wasn't Flynn who produced them but, in
18
fact, Mr. Montgomery who produced those e-mails and gave them.
19
Volume II, page 183, line 4.
He admits that, when
So couldn't the Court draw an inference
We also saw the NBC News article, Lisa Myers.
And
20
we saw streaming on the screen the various e-mails that he had
21
provided to NBC News.
22
All we have are excuses.
Bad faith.
He hasn't even
23
attempted to comply.
We have that it's not fair; that the
24
burden is too heavy; that the Protective Order is unclear; the
25
Court's orders are unclear; it's too hard for him; there's too

(775) 786-5584

494
many documents to review.
Those are the excuses.
We have sort of coined, amongst ourselves, the
phrase, "The dog ate my homework," which we've all -- we all
have kids who know and use some form of that expression.
We've had delayed production because he was
searching the hard drives; there are two many files to review;
that he can't show the e-mails to his counsel; that it's too
hard for him; that it's humanly impossible for him to do that;
that he hasn't separated the Blixseth e-mails from other files
10
because there's too many to go through.
11
are too many search terms for responsive documents.
12
We heard that there
But, we also know that he could have asked for
13
assistance from a forensic expert to at least load onto his
14
computer better, more efficient software that reviews.
15
We also know from his testimony that he didn't even
16
begin to review documents before February of 2008, despite
17
the fact that we had an August '06 production request, and
18
a November 17th production request.
19
discovered, in February of this year, that there were two
20
million files.
21
drives.
22
April.
He says he only
And, yet, we have more files than 21 hard
He discovered the 1.3 million files in March or

That's Volume I, page 160.
23
While he claims to have begun reviewing documents
24
in August of '07, we don't know what he reviewed and why it
25
wasn't produced later.
That's what his claim was.

(775) 786-5584
But we

495
also know, from Volume I, page 76 and page 99, that he started
to review in February of '08.
for States Secret Privilege until February, March, and April
of '08.
He didn't even start looking
Volume I, page 169, lines 3 through 21.

Now, when the Court asked Ms. Klar, at one of the
hearings, at the hearing of May 21st, when Mr. Montgomery had
begun compiling documents responsive to RFP One and RFP Two,
Ms. Klar responded that Mr. Montgomery began actual review of
documents within the weeks just prior to the May 21st hearing.
10
So, which was it?
11
I began doing it in February?
12
weeks prior to May 21st?
I began doing it in August '07?

Or, I began doing it just
13
And that's in the transcript of the May 21st, 2008
14
hearing when Ms. Klar made that representation to the Court,
15
pages 17 and 18; lines 3 through 25 on page 17, and continuing
16
on page 18, line 1.
17
We also know, with respect to state secrets, that
18
Mr. Montgomery delayed his meeting with the government
19
regarding his obligations under the Protective Order.
20
aware of one invitation, but he was unavailable.
21
corroborated to this court that there were two invitations to
22
meet, and he only finally did one, really, after all these
23
orders were issued, and the Court suggested that he do it
24
quickly.
25
THE COURT:
Excuse me, Mr. Peek.

(775) 786-5584
He was
Ms. Wells
It's at

496
45 minutes.
MR. PEEK:
3
4
I don't think I need to get into all the duplicates

because I have.
5
6
Thank you.
Let me go quickly over the sanctions.
What the
factors are from the case law.
The public's interest in expeditious resolution of
litigation; the delay of discovery; the many motions for stay,
the many objections to orders, the many emergency motions to
10
delay and to stay hearings and, yet, still has failed to
11
produce.
12
The courts need to manage its docket.

The Court has spent an unprecedented amount of
13
time managing discovery in this matter.
14
each month; hearings on discovery orders; review of discovery
15
motions; issuing orders; and OSCs hearings, where it has
16
already issued one sanction.
17
Mr. Montgomery won't comply, and makes a mockery of this
18
Court's time, efforts, and orders.
19
20
21
Status conferences
Despite those efforts,
The risk of prejudice to a party seeking

termination.
We can't evaluate the documents that even have
22
been produced; we've expended enormous resources in filtering
23
through the bad faith productions.
24
forward with depositions in a real expeditious, complete
25
manner; we still don't have the Source Code.
We're unable to move

(775) 786-5584
And although

497
that is the subject of another sanction, it should still be
part of this Court's determination in what to do in this case,
because the Source Code was ordered in the May hearings.
The public policy favoring disposition of cases
on the merits.
documents.
Montgomery participating in good faith in discovery.
termination is appropriate.
You can't have that when you don't have the
A decision on the merits is impossible without
The availability of less drastic sanctions.
So,
He's
10
already been sanctioned once, on May 7th.
11
repeatedly ordered to appear, and been repeatedly ordered to
12
produce.
13
that the Court entered its order on February 21st, until even
14
yesterday when he testified.
15
reasonable explanation for his conduct and lack of production.
16
Montgomery's conduct has not changed from the time
And he has no legitimate and
The monetary sanctions.
I've gone over those,
17
Your Honor.
18
inclined to issue terminal sanctions.
19
And he's been
They should be significant if the Court is not
But, there is one other sanction that the Court
20
can order -- and we'll cover this further in the briefing --
21
but I want to at least mention it.
22
sanctions that are warranted in this case.
23
factors?
24
25
There are evidentiary

And what are those
Those factors are the party having control of the

evidence had an obligation to preserve it;

(775) 786-5584

498
1
2
The records were destroyed with a culpable state of

mind; and
3
4
The destroyed evidence was relevant to the party's

claim or defense.
He's lost or destroyed the "Warren Old E-mail."
He hasn't produced the PSTs of the Glogauer e-mail or the
remaining PST files of documents produced to the Wall Street
Journal, or any other e-mails with PST format.
There's no doubt, based upon his testimony, that
10
he has understood and didn't honor the duty to preserve
11
evidence.
12
intentionally and willfully destroyed the e-mails.
13
Particularly, the "Warren Old E-mail."
14
that is certainly relevant to our party's claims or defenses.
That, I think, is an inference that he
Destroyed evidence
15
What is a sanction of that adverse inference?
16
This court should draw an adverse inference that
17
during proceedings before this Court, Dennis Montgomery and
18
his attorneys -- I'll leave out the attorneys -- Dennis
19
Montgomery filed with this court, a false and fabricated
20
e-mail, allegedly, from Len Glogauer to Warren Trepp,
21
purporting to say that:
22
on that one" -- well, purporting to say:
23
care of him like we discussed."
24
And this Court should draw the adverse inference that that
25
e-mail is false and fabricated.
"Jim really hit the ground running

"We need to take
That's the second sentence.
That is an appropriate

(775) 786-5584

499
sanction in this circumstance.
it's a jury trial or not, Your Honor.
it's a jury trial, that should be the jury's instruction, or
something along those lines.
And I don't recall whether

But if it's not, if
And there's authority, Your Honor, of -- actually,
it's in Keefly (phonetic) versus Homestore.com, Inc.
I only
have a West Law cite, and I don't have that complete, but
I'll provide that to the Court.
issued recently, August of this year, but it's cited Sensonics
10
versus Aerosonic, Corp., 81 F.3d 1566, the Fed. Circuit, 1966.
It's one that was just
11
Your Honor, the only thing that Mr. Montgomery
12
understands is terminal sanctions because he hasn't been
13
responsive to monetary sanctions, and that's what should be
14
the Court's order in this circumstance.
15
And I'll reserve the last time that I have.
16
17
18
19
THE COURT:
Thank you, sir.
CLOSING ARGUMENT BY PLAINTIFF

MS. GAROFALO:
Good afternoon, Your Honor.
20
would like to commend Mr. Peek on his relative brevity.
21
think there were a lot of bets lost in the last few minutes.
22
I'll try to be even more brief.
23
We're here on an OSC Re: Contempt.
An OSC
24
Re: Contempt, to some extent, are a quasi-criminal proceeding,
25
due process rights attach.
It is not simply a motion to

(775) 786-5584

500
compel.
specific requests for --
in more than one document request, and this Order to Show
Cause set, or should have set the parameters for this
proceeding.
believe that there has been a lot of evidence, information,
argument, that does not relate to the Order to Show Cause
as written.
The Court's Order to Show Cause set forth four

I know the requests were repeated
I'm going to focus on those four, because I do
As the Court is well aware, in a contempt
10
proceeding, it must be shown that the putative contemnor
11
willfully violated a court order with which he had the
12
ability to comply.
13
as to its terms.
14
The order must be clear and precise
The order we're looking at here, again, required
15
that Mr. Montgomery produce documents, on dates certain, to
16
four specific categories.
Mr. Montgomery has substantially
17
complied with that order.
And substantial compliance is a
18
defense to contempt.
19
And I would briefly like to review for the Court
20
what has been done to comply with the order directing
21
Mr. Montgomery to produce documents relating to those four
22
categories.
23
The first broad category of documents relates to
24
eTreppid's technology, including white papers, PowerPoint
25
presentations, marketing documents, and correspondence with

(775) 786-5584

501
potential customers.
And as a preliminary matter, I would like to address
the cover letter from Mr. Gunderson, which noted that the
hard drives all related to item number 16.
made a considerable argument that request number 16 only
applies to the white papers, PowerPoint presentations,
marketing materials and so forth.
broader.
including the marketing materials, the hard drives, which are
Mr. Peek has
In fact, it is much
It says documents relating to eTreppid's technology,
10
essentially backups of eTreppid, computer files do, in our
11
view, relate to the technology.
12
fact, almost in their entirety, relate or respond to request
13
number 16.
And those hard drives do, in
14
With respect to those hard drives, the two that
15
have been given much attention here, the one terabyte and
16
the 500 terabyte, were produced on May 24th and May 27th
17
respectfully.
18
additional 21 hard drives.
19
set of backup information as recorded on the hard drives.
20
So we have, indeed, produced significant material responsive
21
to request number 16.
22
as I think the Court knows, between some of these requests.
23
So if it was in error to say that it was only responsive to
24
16, so be it.
25
In addition to those, we have produced an

Those are, those are the complete
There's tremendous overlap, by the way,
But, in any event, we have produced, to date, 21

(775) 786-5584

502
hard drives.
We know that there is an issue of 12 hard drives
not being readable that were produced in the last few days.
As I understand it, of those hard drives, they're being copied
as we speak, 7 will be delivered to the eTreppid parties
today.
And we expect the other five to be delivered tomorrow.
There are four remaining hard drives.
And as I
have had significant discussions with Mr. Peek, those hard
drives contain the Glogauer PST files.
received those.
We have recently
Mr. Peek knows the circumstances from
10
criminal counsel on the East Coast.
11
been delivered earlier, but they were not.
Those four hard
12
drives include two masters and two slaves.
And as we've
13
represented to this Court, those hard drives will be produced
14
to Mr. Peek.
15
THE COURT:
Perhaps they should have
Let me ask you a question,
16
Ms. Garofalo.
Mr. Peek said in his closing argument, when
17
referencing the 21 hard drives that were delivered, he
18
says those are all designated as restricted/confidential.
19
Can you address that?
20
MS. GAROFALO:
21
That's curious to me.
I was just about to address
that.
22
THE COURT:
Okay.
23
MS. GAROFALO:
Thank you.
And Mr. Peek, in fact, attempted
24
to meet and confer with me on that subject as to if we would
25
remove that designation.
And we will get back to Mr. Peek.

(775) 786-5584

503
And I believe the designation will be removed, enabling
Mr. Peek to more easily review that material.
actually come -- I again apologize to the Court -- it only
came to my attention when Mr. Peek raised it during this
week's hearings.
THE COURT:
MS. GAROFALO:
That did not
Thank you.
With respect to the second
category, general category at issue.
"Documents relating to
any attempt by the Montgomery parties to license, sell, or
10
distribute any technology in the fields of data compression,
11
pattern recognition, object tracking, or anomaly detection
12
between January 18th, 2006 and the present."
13
We've produced the documents that we have, or that
14
Mr. Montgomery has in his possession, custody, or control.
15
They do, as Mr. Peek points out, mainly consist of documents
16
relating to the Montgomery/Opspring agreements.
17
speculates that there must be more documents.
18
an e-mail that suggests that there were meetings with the
19
government.
20
the government do not necessarily equate to the creation of
21
documents in connection with those meetings.
22
Mr. Peek
That there is
I would suggest to the Court that meetings with
The single document that Mr. -- the eTreppid
23
parties have waived repeatedly before the Court, showing
24
that there was some communication with an individual on which
25
Mr. Montgomery was copied, is really not evidence that more of

(775) 786-5584

504
such documents exist.
It happens.
We all get e-mails we
don't see.
we've had 61 discovery requests.
searches have been substantial and complicated.
a single document was missed, that hardly raises to the level
of contempt.
We get e-mails that are overlooked.
And this --
The effort to search, or the

And assuming
Mr. Montgomery, in fact, has testified, and there's
no evidence to the contrary, other than the e-mail indicating
that he may have attended a meeting or two in Washington,
10
there's no evidence, really, to suggest that there are
11
additional documents that have been intentionally withheld.
12
With respect to the documents provided to the media,
13
we have provided, and they are Bate stamped, documents number
14
1 through 119.
15
Mr. Montgomery has in his possession, custody, or control
16
relating to his communications with the media.
These are all of the paper e-mails that
17
The Court knows, and there has been significant
18
litigation in this courtroom, that there may be documents
19
in Mr. Flynn's possession.
20
Mr. Flynn's files.
21
located and we have; they have been produced.
22
endeavor to produce the PST files, to the extent that we
23
have them.
24
certainly, the eTreppid parties have had a chance to review
25
that material.
We have been unable to obtain
But these are the documents that we've

We will
But the hard copies have been provided and,

(775) 786-5584

505
The last category are the CDs.
And there has been
some confusion as to what's been produced photocopy-wise, and
what's been -- what CDs have been produced.
to the best of our ability, the CDs which were returned by
the FBI, which is what was called for, I believe, in the
request.
will admit that he was in error when he said only 16 or so
had been produced.
We have also produced 26 CDs.
We have copied,
And I think Mr. Peek
Those are the CDs we have.
Although Mr. Peek asks the Court to draw inference
10
that two others, including the Warren Trepp e-mails, old
11
e-mail CD has been destroyed, there is no evidence that the
12
CD has been destroyed.
13
CD.
14
15
THE COURT:
Well, I think Mr. Montgomery's
testimony is he can't find it.
16
MS. GAROFALO:
17
search for it.
18
of places.
19
We are continuing to search for that
Your Honor, we are continuing to
There have been materials stored in a number
And as the Court knows -THE COURT:
Well, let -- right.
And I
20
understand that, Ms. Garofalo.
I guess one of -- as I listen
21
to Mr. Montgomery's testimony in this proceeding, it struck
22
me as odd that having been involved in the search warrant
23
proceedings; that is, Mr. Montgomery, having been involved
24
in a preliminary injunction hearing in the state court
25
proceeding, having seen Judge Perry's preliminary injunction

(775) 786-5584

506
order, having then, of course, come into this court after
the state court case was removed and so on, and appreciating,
one would think, the extreme importance of maintaining the
integrity of items that were subject to the FBI search in a
careful, secure manner, and then learning that that was not
the case, based on Mr. Montgomery's testimony, that isn't how
that material was handled.
the Court as sort a rabbit warren trying to track, well,
this set went here and then it went there, and so forth.
In fact, there's -- it strikes
10
Then, logically, it might come as no surprise to a person, a
11
reasonable person, that something either was unintentionally
12
loss, or intentionally misplaced.
13
is certainly no evidence of intentionally destroying or
14
misplacing that.
15
that this evidence of great importance to all of the parties
16
in litigating this case, it's gone.
17
And, I agree, there
But, that's very troubling to the Court
MS. GAROFALO:
Well, firstly I'm -- again, we
18
are continuing to search for it.
19
certainly appreciate the Court's view on this subject.
20
I think there are certain facts that the Court and the
21
eTreppid parties may be overlooking.
22
THE COURT:
23
MS. GAROFALO:
But I think -- uh, I can

But,
All right.
The first is that when the
24
items were returned from the FBI, there was not necessarily
25
and understanding that a discovery request would be propounded

(775) 786-5584

507
relating specifically to items returned by the FBI.
substantive material might be required to be produced, but
I don't think Mr. Montgomery had a crystal ball and knew
that he had to keep those items and those documents
necessarily segregated.
THE COURT:
The
Well, he did get -- you know, I
can't bring up Judge Pro's order -- I don't know what docket
number it is that related to those materials, but there is
an order from the Court saying, you know, let's -- I suppose
10
we can argue, and maybe the parties will argue, and Judge Pro
11
will tell you more clearly if there's a dispute about what
12
he meant, but the gist of the Court's order was this is
13
important evidence.
14
this evidence.
15
Keep it.
Don't destroy the integrity of
And that was an order from the district court.

MS. GAROFALO:
Like the Court, I don't have
16
the benefit of having the order before me, so I think that's
17
something we'll reserve --
18
THE COURT:
Right.
19
MS. GAROFALO:
20
THE COURT:
21
MS. GAROFALO:
-- to address in our brief.
All right.
But the second point is we have
22
found serious, as the Court also knows, serious disparities
23
between the FBI inventory at the time of the search, and the
24
FBI inventory of items returned.
25
and the Court knows, that we do have a hearing set for
And I can tell the Court,

(775) 786-5584

508
September 5th on these chain of custody issues, that the
return inventory doesn't match what was returned.
THE COURT:
Right.
MS. GAROFALO:
Now, I have considerable
experience with FBI raids, as Mr. Montgomery calls them;
rather, the execution of search warrants.
these lists, these inventories are rarely pristine.
this search was unusual, and this Court certainly found that
there were significant anomalies.
And I know that

But
The items seized in the
10
search were returned by this court.
11
question as to the integrity of the FBI, certainly the
12
integrity of the affidavit in support of the warrant.
13
don't think this is the ordinary circumstance where you have
14
an inventory, where you may have had an agent who's kind of
15
in a hurry, miss something, so the two inventories don't
16
match.
17
And there is some
So, I
I think there is -- there are much more substantial
18
questions here.
And the Court has set the hearing for
19
September 5th, and we'll address those issues.
20
THE COURT:
Right.
21
MS. GAROFALO:
And we'll sort those out.
So I'm not -- I've seen no
22
evidence that the Warren Trepp old e-mail files has actually
23
been returned by the FBI.
24
even the CDs, our hard copy, it's hard to match them to the
25
inventory list.
And I will tell the Court that
It was a daunting task just getting those

(775) 786-5584

509
photocopies made, even though, on its face, it seems like
something that should be fairly simple.
And, again, Your Honor, in order to find contempt,
somebody has to have the ability to comply.
evidence that they had the ability to comply and failed to
comply.
e-mail, or the other missing CD, came back to Mr. Montgomery
after the search.
With --
10
There has to be
There is no evidence that that CD, the Warren Trepp
THE COURT:
Well, that will be an interesting
11
issue for that hearing because, I don't know -- and I've
12
had so many hearings about these, that I don't recall that
13
position being taken.
14
remember whether it was ever asserted that the Warren Trepp
15
old e-mail CD was not returned.
16
recall.
It may well have.
17
MS. GAROFALO:
18
THE COURT:
So, I just can't
Perhaps it was.
I just don't
Or had --
Well, I understand that's a matter
19
for, some of these issues are a matter for the September
20
hearing.
So, all right.
21
MS. GAROFALO:
22
THE COURT:
23
MS. GAROFALO:
In any --
All right.
Okay.
In any event, Your Honor,
24
to those four categories, we have, perhaps somewhat belatedly,
25
made a good faith effort to get these materials to the

(775) 786-5584

510
eTreppid parties.
the eTreppid parties the majority of the material.
And to this point in time, we have given
The Glogauer PST file is forthcoming.
I will
represent to the Court that any other PST files that we
have located that are in Mr. Montgomery's possession,
custody, or control will also be produced forthwith.
I take some issue with the eTreppid parties'
argument that there's been no change in Mr. Montgomery's
behavior.
We have made an effort, again, perhaps belatedly,
10
to get this material, to get all responsive documents to the
11
eTreppid parties.
12
the "dog ate my homework" is an easy label to give the task
13
that Mr. Montgomery undertook, but the eTreppid parties make
14
several leaps, which I think are inappropriate, and ought
15
not to be accepted by this court.
16
Mr. Montgomery to review these files.
17
not get help in reviewing the post-2003 files because of the
18
U.S. Protective Order.
19
This has been a very large task.
It was very difficult for

Mr. Montgomery could
We're talking about some document requests that
20
cover a ten-year period.
21
may not all be, in Mr. Peek's view, relevant.
22
there.
23
Protective Order complicated matters significantly.
24
25
I know
There are millions of files.
It took a considerable amount of time.
They
But, they are

And the U.S.
I guess -- I think the Court also is aware that

there was a holdup while the vendor protocols, the government

(775) 786-5584

511
protocols were being worked out.
THE COURT:
Well, and I certainly appreciate
that.
I appreciate what occurred in this case, because of the
search warrant proceeding, and then, you know, the Negroponte
declaration and so on , invoking the State Secrets Privilege
and what have you, that that caused this civil proceeding to
come to a grinding halt.
here's, here's what I also know, just as a practical matter,
and I would ask you to address this, because this, really, is
So, there was a stay in effect.
But
10
troubling to me.
In August of 2006, discovery started in
11
the civil cases.
And, obviously, I know it's a mistake, but
12
significant requests for production were propounded on the
13
Montgomery parties.
14
was stayed.
15
similar requests were renewed in October -- I mean, November
16
of 2007.
17
And, true, the requests for production
We all know that.
And then it resumed, and those
And I also understand -- and I'm talking about just
18
the business of litigation.
The practical side of this case,
19
which is; all right, you've gotten -- the Montgomery parties
20
get this request for this boat load of documents in August
21
2006.
22
is stayed, but -- so doesn't the lawyer, the lawyer and the
23
client should know that, well, true, we have a stay, but we
24
don't know when that stay is going to be lifted.
25
know when these other issues are going to be resolved.
So the lawyer gets these requests, and then discovery

(775) 786-5584
We don't
And

512
we better -- here's the universe of what might be responsive,
and so we had better get busy; particularly, in light of the
millions and millions and millions and millions of potentially
responsive documents, and we better start making an effort to
start to figure out what's what.
6
7
And I don't believe the U.S. Protective Order was

entered until last fall, is that --
MR. PEEK:
September of --
THE COURT:
September of '07?
10
MS. WELLS:
I think it was August 29th of '07.
11
THE COURT:
Okay.
August 29th of '07.
So,
12
there's this year period where there's no Protective Order
13
in place, U.S. Protective Order.
14
would think that -- and one would also think, in that interim
15
period, and subsequent to that, even after the U.S. Protective
16
Order is issued, that knowing the volume of documents, one
17
would think, well, we need somebody, maybe like Mr. Cooper,
18
to help us figure out how to organize this stuff, because
19
that's what we need to do to avoid things like deduplicate --
20
you know, deduplicating, developing logs.
21
want to look at a million pictures of dogs.
22
to short circuit that.
23
order, and we may interpose many legitimate objections to
24
these document production requests and so forth.
25
least better know what our client has.
There's a stay.
So one
You know, you don't

So, we're going
So we're going to get all of that in
But, we at
Because what we do

(775) 786-5584

513
know about this case, is that it's about a trade secret.
eTreppid says it doesn't have the trade secret anymore, that
Mr. Montgomery has the trade secret.
a big fight about that.
And
And there's going to be
So I am aware, through the Court's orders that, I
guess there was an effort starting in March or April or May,
whenever, of 2008, to actually take a look at this.
understand that.
I don't
So can you -- I really, I don't understand that,
10
just as the work of, you know, managing a case and getting
11
it ready.
12
I just don't understand why that happened.

MS. GAROFALO:
Your Honor, in a perfect world,
13
and certainly in the world that we live in, I agree with the
14
Court, to a great extent, that the organization should have
15
been better on this case.
16
Mr. Montgomery knew certain things from prior counsel that
17
may not be absolutely accurate.
18
I think the Court assumes that
Mr. Montgomery, whether right or wrong, once the
19
Protective Order was in place, believed that he could not
20
have counsel look at documents.
21
I've never been involved in a litigation where we've had
22
this kind of difficulty because the lawyers couldn't review --
23
or at least Mr. Montgomery believed -- could not review the
24
documents.
25
THE COURT:
And I can tell you that
Uh-huh.

(775) 786-5584

514
1
2
MS. GAROFALO:
We are very, very careful about
not violating --
THE COURT:
MS. GAROFALO:
Right.
-- the U.S. Protective Order.
This has been very difficult.
Mr. Cooper could
not help post-2007.
I don't want to disclose attorney/client
privileges, but there are reasons why Mr. Montgomery has
been unable to retain the kind of ongoing expert assistance
that the eTreppid parties have been lucky enough to avail
10
themselves of.
But, it just simply wasn't possible.
There
11
was a massive amount of material, and Mr. Montgomery, in the
12
end, was the one who had to review it.
13
THE COURT:
Well, that brings to mind -- I
14
understand that, in a way.
But I also know that when the
15
Protective Order was entered, counsel for the government
16
said to eTreppid, to Mr. Trepp and to Mr. Montgomery, here --
17
I mean this Protective Order was very carefully tailored.
18
And what it did -- I mean, when I read it, it excluded a
19
significant thinking of what could be covered by the solar
20
system, you might say, of documents in this case.
21
to me as though what the government attempted to do is to say,
22
well, it's not going to cover Mercury, Venus, Mars or Earth.
23
It is going to cover, Saturn, Jupiter and Neptune, or
24
whatever.
25
don't think that because we've invoked the States Secrets
It looks
But, there was an effort made to say, everybody,

(775) 786-5584

515
Privilege, that every single piece of paper, every single
document in this case -- and it says that.
And Mr. Montgomery, for whatever reasons, refused,
until May -- I think it was late May, or maybe it was the week
before the June hearing, to even meet -- I think -- wait.
think I had to order him to go back and say, look, you, sir,
have to meet with the government because this is -- and then,
of course, by then, right, you've got millions and millions
and millions of documents and so forth.
And this concern
10
about the Protective Order, I find -- I mean, I understand
11
that there are concerns.
12
concerns in meetings with government lawyers.
13
I am fully apprised of those
So why -- what about Mercury, Venus, Mars and Earth?
14
That's my question.
15
all of this, even with the U.S. Protective Order?
16
Mr. Montgomery was concerned that he thought that was part
17
of the U.S. Protective Order, then why didn't he meet with
18
the government, like they asked him to meet with them.
19
Why wasn't that work done in advance of
MS. GAROFALO:
And if
I can't answer that question,
20
Your Honor.
21
the Court is finished with its inquiries, to move on to the
22
notion of terminating sanctions and what is the appropriate
23
sanction, if any, in this case.
24
25
I can say to the Court, and I am going -- when
And in that regard, again, to quote Mr. Peek, that

Mr. Montgomery's conduct or compliance with his obligations

(775) 786-5584

516
has not changed.
Court has now gotten the attention of Mr. Montgomery and his
lawyers.
recent weeks, and the efforts to meet and confer, to fully
comply with the Court's order in a very short time frame,
the Court will understand that we are committed to going
forward.
10
I can assure you the
And I think that if you look at the compliance in
8
9
It certainly has.
I cannot speak to the past as to why Mr. Montgomery

didn't meet with government earlier.
I just don't have that
information for the Court.
11
THE COURT:
And I know you don't, Ms. Garofalo.
12
And I appreciate, and don't want to put you on the spot for
13
that.
14
Judge Pro and I have been frustrated by is, well, first, it's
15
Mr. Flynn.
16
Liner firm comes in and certain members of that, of your firm
17
are involved in the litigation.
18
And all I know is I have the same case.
19
to me.
20
what has occurred.
21
occurs in this kind of case is, you know, everybody has got
22
to know what they've got to know.
23
please.
24
25
But this is also, as I alluded to, the other issue
Then it's -- it's Mr. Flynn's fault.
Then the
Now, we have a new set.

It's the same case
And the record is what it is, and what's occurred is

And the way the Court has to look at what
MS. GAROFALO:
Okay.
And, anyway -- go ahead,
I'm going to move on to
this notion of sanctions, should the Court find that

(775) 786-5584

517
Mr. Montgomery is in contempt; that he did indeed have the
ability to comply with the orders to produce each and every
document that Mr. Peek has identified.
would be the appropriate sanction.
The question then
Terminating sanctions are a Draconian penalty.
They are avoided if there is a more, if there is a less
drastic sanction which will indeed cure the contempt, and
force compliance, or at least persuade the potential contemnor
to comply in the future.
10
ETreppid's papers set forth the factors that the
11
Court looks at in determining whether terminating sanctions,
12
indeed such an onerous sanction, is appropriate.
13
want to address two of them.
14
other two.
15
And I just
I know Mr. Peek addressed the
One is the risk of prejudice to the parties seeking
16
sanctions.
17
believe to be the risk of sanction.
18
And the pertinent sentences read:
19
cutoff in this matter is rapidly approaching, eTreppid has
20
been utterly unable to evaluate the extent to which the
21
documents in Montgomery's possession, custody, and control
22
relate to the facts at issue in this case."
23
that they've been unable to depose relevant witnesses.
24
25
And in eTreppid's paper, they identify what they

The risk of prejudice.
"Even though the discovery
They also note
Well, at this point in time, I don't think that the

eTreppid parties have established prejudice to their ability

(775) 786-5584

518
to prosecute their claims or defend Mr. Montgomery's claims.
The discovery cutoff has been vacated.
move forward, as ordered by this Court.
proceedings, if nothing else, clearly demonstrate that the
eTreppid parties have been able to analyze the materials that
have been produced, and certainly seem to have a grasp on the
evidence and the discovery produced so far.
have failed to show prejudice.
The depositions will

And I think these
So, I think they
The final factor is, again, that the Court look
10
at the availability of less drastic sanctions.
11
repeating myself.
12
Mr. Montgomery's attention.
13
drastic sanctions than terminating sanctions would be
14
appropriate in this case.
15
I know I'm
But, again, I think the Court has gotten

And I think, certainly, less
I would like to address, very briefly, the
16
sanctions that Mr. Trepp is seeking, other than the
17
terminating sanctions.
18
briefing, the post-OSC briefing.
19
I reserve real argument for the
I would note that Mr. Mont -- that Mr. Peek asks
20
specifically for costs, the costs incurred in reviewing the
21
materials provided by Mr. Montgomery.
22
identified the number as approximately $750,000.
23
for the Court that extensive review of these documents, and
24
we had really extensive document requests, and assuming that
25
every one had been scrupulously complied with, eTreppid
And I believe he's

(775) 786-5584
I would note

519
parties would have had to incur a substantial amount of those
fees because the documents would have to have been analyzed
and so forth.
is not directly tied to, or caused by any late production, or
any failure of Mr. Montgomery to produce documents.
documents that were not produced certainly -- there would
certainly be no cost in reviewing them.
8
9
Much of that cost, if not all of that cost,
In fact,
So, I would certainly object to the notion that the

Montgomery parties are somehow liable for all of the analysis,
10
all of the forensic analysis done in this case on behalf of
11
the eTreppid parties.
12
With respect to the final, the final sanction
13
identified by Mr. Peek which, in some ways, came as a surprise
14
because it is not reflected in the papers, the evidentiary
15
sanction regarding the Glogauer e-mail.
16
will have the complete Glogauer PST.
17
would be produced by Friday, the 22nd, as noted by the
18
eTreppid parties in their closing argument.
19
sanction -- an issue preclusion sanction with respect to
20
that PST file would be inappropriate in that, A, the file
21
was produced, and the e-mail was also produced in PST format
22
as ordered by the Court.
23
parties, and we are attempting to cure that.
24
no -- there is conflicting evidence.
25
not about whether or not the Glogauer e-mail was in fact
The eTreppid parties
I believe we said it
The terminating
It was inadequate for the eTreppid

But, there is
This proceeding was

(775) 786-5584

520
doctored way back when.
Mr. Montgomery complied with the discovery orders.
This proceeding is about whether
An issue sanction, which basically goes to the
integrity of the e-mail, and to whether or not the e-mail
was fabricated, is not an appropriate remedy in this case.
6
7
8
9
And with that, Your Honor, I'll conclude.

THE COURT:
Thank you very much, Ms. Garofalo.
Mr. Peek, you've got eight minutes.

DEFENDANT'S FINAL CLOSING ARGUMENT
10
MR. PEEK:
11
the evidentiary sanction, Your Honor.
12
sanction is the failure to produce the "Warren Old E-mail",
13
on which we would find the Glogauer e-mail sent to Mr. Trepp,
14
that would corroborate the Karchmer declarations, and would
15
put to rest this issue forever.
16
17
Mrs. Garofalo misses the point of

The evidentiary
So, just having the Glogauer e-mail is not enough.

It's the "Warren Old E-mail" that has been lost.
18
And let me address, quickly, Miss Garofalo's comment
19
that it was not her understanding that the FBI-seized material
20
be some how preserved.
21
The Court will recall the motion made by the
22
eTreppid parties to have forensic images made of each and
23
every one of the electronic data seized by the FBI before it
24
was returned to Mr. Montgomery, for this sole reason.
25
they knew that it was going to be.

(775) 786-5584
So,

521
What the Court did, though, was deny that request.
And so we had a follow-up request that was, okay, if you
won't do that, then photograph each and every piece of the
evidence, so that we can preserve and won't have this issue
of you didn't give me this.
photographing of each and every piece of evidence returned.
And now we're being told, well, I'm not so sure that they gave
back to me the "Warren Old E-mail."
That was the reason for the
That was the purpose of the photographs.
And I
10
don't think we need the September 8th evidentiary hearing for
11
that.
12
a pleading by Montgomery.
13
know it's contained in a pleading filed by Montgomery.
14
the first time we became aware of it, because we didn't have
15
the photographs.
That photograph, as the Court knows, was contained in
16
I don't have that pleading, but I

It was
So, for Ms. Garofalo to stand up and say in this
17
court, in good conscience, that that e-mail may have been
18
lost by the FBI is ridiculous and disingenuous, because
19
pleadings were filed by her client showing a copy of the
20
"Warren Old E-mail" attached to it.
21
for the first time.
22
inference.
23
preserve.
24
25
That's where we saw it
So that's the reason for the adverse
That's the reason why they are obligated to
So to tell me that they now made this belated good

faith effort to find that, and they'll keep searching, is

(775) 786-5584

522
disingenuous at best.
This is not a criminal proceeding.
This is a civil
proceeding under Rule 37; FRCP Rule 37, of sanctions that are
available.
There is a willful violation.
The repeated refusals
and the repeated delays, under clear and precise orders, are
willful violations.
relating to marketing.
drives which are our data.
He says, well, I produced documents

But, all we have are the 21 hard
All we have are the one terabyte
10
and the 500 gigabyte, which are our data.
11
post-2006 marketing efforts.
12
Nothing related to
And we know, because the Court read to
13
Mr. Montgomery what is the definition of "you" in the request.
14
The Chief Scientist had access to that material.
15
Scientist could have produced that material.
16
The Chief
And to stand here and say, as well, that there's
17
no evidence of meetings with the USA, no evidence to market,
18
when in fact Mr. Montgomery's declaration says there were
19
meetings, and Mr. Flynn's letter says I want to meet with
20
you to license, is still, I don't think, a good faith effort.
21
She says, well, we have the media e-mails.
We don't
22
have PST files, and no time line for production of the PST
23
files that are required to be produced, not just the text
24
files.
25
They now say, well -- and they've said this

(775) 786-5584

523
repeatedly -- we have no documents because Flynn has the
documents, failing to say to the Court that the ability to
obtain those documents is within their control.
4
5
Mr. Flynn has a retaining lien because he hasn't

been paid.
Write him a check.
You'll get the documents.
It's in their control.
Post a bond, as this Court
reminded them.
bond and you can get the documents.
9
10
11
You have the right to post a bond.
They haven't done that.
So, don't tell me that Flynn has it, and that's my

excuse.
And then he said we had confusion as to the CDs, and
12
it's the best of our ability.
13
produced more than nine electronic copies.
14
Post the
And she says that they have
Look at Exhibit 44, Your Honor, and you will come to
15
your own conclusion, because it's all tracked by what's in
16
evidence, because all of the letters of the production that
17
the Court has, are tracking the productions and when we
18
receive them.
19
shows that there are only nine hard drives in the FBI-seized
20
materials -- excuse me, hard drives.
21
the hundred, hundred plus, almost 170 plus CDs seized.
22
we only have nine.
23
exactly, for that -- although we're told we might get them
24
this Friday.
25
And, Your Honor, the spreadsheet by Mr. Lang
Nine copies of CDs from

And
And we still don't have a timeline,
And we'll see whether we do.
So, it's not that they have produced 16.

(775) 786-5584
They have

524
produced other copies of CDs, but not the FBI seized.
She says there's no evidence of intentional
destruction and, yet, the key piece of evidence that would
show the false and fabrication nature of the Jale Trepp e-mail
and the Len Glogauer e-mail are on "Warren's Old E-mails."
That's an intentional holding.
inference that that's been intentionally lost.
all of the other data, it's this one CD, one CD -- the other
one he doesn't even know what it was -- but, it's one CD.
10
The Court can draw an

Because of
Now, he knows all of the 170 plus CDs because he has
11
photographs of them.
12
have given the declaration, as the Court ordered him to do, to
13
tell us which ones.
14
But, he doesn't a tell us which of those they are other, than
15
"Warren's Old E-mail."
16
17
He could have told you, and he could
First he said five.
Then it became two.
So, that's an inference of intentional destruction,

because of the key piece of evidence associated with that.
18
We know that there would have been more meetings,
19
not only with the government, but with others to market the
20
product.
21
"scientist" for nothing.
22
come on board and transfer his, our technology to Opspring,
23
and not market it.
24
that there is no marketing and no evidence of marketing.
25
You don't invest and pay $100,000 a month to achieve

You don't advance him $1 million to
That's silly to even try to argue that
What we don't have is we don't have in post-2006

(775) 786-5584

525
documents that were not covered by the State Secrets
Privilege.
a few agreements with Opspring, and a few e-mails regarding
that.
We have nothing.
No post-2006 documents, except
And, of course, the media e-mails.
They say, well, the vendor protocols held us up.
The vendor protocols could not have held you up at
all.
All the vendor protocols say is once you have collected
your data, this is the manner in which it is going to be
produced.
So, they should have already been, and should have
10
commenced, the production and the review, before it was then
11
processed by the vendor under the vendor protocols.
12
To say it held me up, it can't hold you up because
13
you already have the documents in your possession, as we did.
14
And all that held us up was how do we do it?
15
the protocol, it got done.
16
17
18
Once we had
And that's all he had to do.
So, to wait for those, should not have held up the

review and the production.
From August of '06, until August 29th of 2007, as
19
the Court noted, he had the ability to review and produce
20
those documents without regard to a State Secret Privilege.
21
And he did nothing in that one year period of time.
22
She says well, you finally got his attention now.
23
Well, we finally got his attention because he is now facing
24
the terminal sanctions.
25
attention, but it's too little too late.
Of course it's going to get his

(775) 786-5584

526
1
2
She says, well, we now have a discovery sanctions,

or discovery sanction, so there's no prejudice.
Well, what about the prejudice of delay?
the marketing of our technology that we want?
a year now away from trial than we should have been.
a prejudice that we have suffered.
What about
We're now over

That is
What about all of the costs incurred by Mr. Trepp;
the significant fees and costs of having to go through these
hearings?
10
She says, well, you shouldn't have the cost of the
11
document production because, well, gee whiz, you would have
12
to did that anyway.
13
Would I have had to looked at $1.3 million files,
14
that we know 92 percent of which are duplicates of eight
15
percent?
16
to incur that expense.
17
No.
Had they done their work, I wouldn't have had

But, I have had to incur that expense.
Had they made a proper production, they would have
18
de-duped.
They would have told me what they have, and I would
19
have had eight percent, followed with a log of what the other
20
92 percent was.
21
it to date from them.
But, I don't have that.
22
THE COURT:
23
MR. PEEK:
I still don't have
You got one minute.

So to say that they don't have
24
understandings, that there's no willful violation, is,
25
frankly, Your Honor, I just -- it's just ridiculous to me.

(775) 786-5584

527
1
2
They say we gave you hard drives, but all the hard
drives they gave us relate to our technology.
And they say what evidence do we have that it was
delayed, or it doesn't have any, they're the ones that should
produce the evidence.
documents off of the one terabyte, the 500 gigabyte, and the
21 hard drives and show you; here, Your Honor, here are the
documents are responsive to the requests.
burden in the Show Cause Hearing to show that they have
Why didn't they process some of the
They had that
10
produced.
All they said was hard drives here, hard drives
11
there.
12
those hard drives that would suggest to you that what they
13
produced on that is in any way, shape, or form responsive to
14
the requests for production.
But, they didn't show you one document off of any of
15
So, Your Honor, to say that they've done it.
They
16
haven't.
17
given an explanation of when we're going to get the complete
18
PST files.
19
e-mail.
20
They still say, well, we don't -- they still haven't
I still don't have that.
I hear the Glogauer
But, what about all of the PST files?

And she says, well, it's in the hard drives.
We
21
know that it was stripped out of the hard drives.
22
that Mr. Montgomery stripped the PST files out of that
23
because, at least by his own admission, there were some
24
that would have been captured, but not all.
25
when Mr. Glogauer's testimony is they should all be there.

(775) 786-5584
We know
But, frankly,

528
And none of them are there.
Thank you very much, Your Honor.
THE COURT:
All right.
Thank you.
I think there are -- I'm going to go
ahead and finalize the Minute Order of the Case Management
Hearing --
7
8
MR. PEEK:
have that exhibit that I wanted to mark at least.
THE COURT:
10
11
MR. PEEK:
THE COURT:
13
MR. PEEK:
14
THE COURT:
15
MR. PEEK:
17
18
Oh, go ahead.
That's the other exhibit you said I
wouldn't be allowed to --
12
16
Your Honor, before we conclude, I do
Go ahead, sir.
It's the affidavit of Mr. Powers.
Go ahead.
I want to get that before you close
this hearing.
THE COURT:
Thank you.
Well, before I turn to that, as my Order to Show
19
Cause indicated, the parties will have 30 days to submit
20
proposed findings of fact and conclusions of law with respect
21
to this Order to Show Cause Hearing.
22
Miss Clerk, what's that day?
23
THE CLERK:
Friday, September 19th, Your Honor.
24
THE COURT:
Friday, September 19, at
25
five o'clock, Pacific Daylight Time, is the deadline for

(775) 786-5584

529
1
2
submitting those papers to the Court.

And I think there may be some outstanding issues
with respect to document production.
to some of them.
to my Case Management Order, which I haven't finalized yet.
I'll go ahead and do that, and I may issue some separate
minute orders of my own respecting any items that I feel I
may have allowed to slip through the cracks.
The parties have alluded
I'm going to look at my draft of my Minutes
One that comes to mind is, on Friday, I issued an
10
order concerning the scope of the e-mails that the Montgomery
11
parties are required to produce.
12
13
I can't remember -- Miss Clerk, do you know what

number that is?
14
15
THE CLERK:
Is that it?
16
17
18
It looks like 809, Your Honor.
THE COURT:
Right, it was -- it concerned
request number, for production number two, set two.

Well, let me ask Montgomery parties' counsel, I
19
don't think my order set a date for production.
20
double check.
Let me just
21
Right.
It doesn't have a date.
22
So those are, I believe, documents that are
23
important for production.
24
to propose a date by which those documents will be produced?
25
So, Miss Garofalo, would you like
MS. GAROFALO:
Yes Your Honor.

(775) 786-5584
We'll produce

530
those documents by August 29th, which is a week from Friday,
if that's acceptable to the Court.
THE COURT:
Any objection?
MR. PEEK:
THE COURT:
That's fine.
That's fine, Your Honor.

All right.
August 29, 2008.
And what we'll do, Miss Clerk, is we'll just add
that to -- as a postscript to our Minute Order from the Case
Management Hearing.
10
MS. GAROFALO:
And just a housekeeping item,
11
because it did come up, but we will agree to remove the
12
highly confidential designation on the hard drives, to make it
13
easier for the eTreppid parties to review the material.
14
THE COURT:
15
Very good.
Let's also include that, Miss Clerk, on a postscript
16
to the Case Management Conference, that the 21 hard drives
17
that were designated restricted/confidential, that term will
18
be removed pursuant to agreement by the Montgomery parties.
19
All right.
Is there anything else with respect to
20
case management matters that I haven't considered that I ought
21
to?
22
MR. PEEK:
23
MS. GAROFALO:
24
MR. PEEK:
25
Your Honor --
No.
Yes, I guess so.

Not with that, Your Honor.
Although, we still have some of the discovery, the number of

(775) 786-5584

531
depositions and length of depositions that Mr. Sunshine and
I started to discuss, but we didn't have a chance do complete.
THE COURT:
MR. PEEK:
Right.
And maybe we'll do that today.
Because I would like to have that resolved, if we could,
sooner than later, and before the next Discovery Status
Conference.
tomorrow morning, maybe have a brief time with the Court.
And if we can't reach agreement maybe today or
9
10
THE COURT:
gave you until Friday or something.
11
12
I thought the Minutes -- I thought I
MR. PEEK:
I thought it was before tomorrow, but
maybe it was.
13
THE COURT:
Oh.
14
MR. PEEK:
Okay.
15
THE COURT:
17
MR. PEEK:
THE COURT:
20
MR. PEEK:
21
THE COURT:
22
MR. PEEK:
23
THE COURT:
25
Right.
Then I'll just decide it.
And the other thing was the briefing.
I'd understood that you wanted post-hearing briefs.
19
24
If it's Friday, and we'll
just submit then, I guess, proposals if we can't agree?
16
18
I don't -- I don't know.
That's what I want.

Okay.
Did I say findings of fact?
Yeah, you said proposed
I'm sorry.
--
Post-hearing briefs.
Pardon me.
MR. PEEK:
Okay.
And I might also attached to

(775) 786-5584

532
that proposed findings as well, but I just want to make sure.
THE COURT:
All right.
Yes post-hearing briefs.
And then so this proceeding, as I
indicated, is concluded.
counsels' briefs.
And the Court looks forward to
Thank you all very much.
MS. GAROFALO:
MR. SUNSHINE:
MR. PEEK:
Pardon me.
Your Honor, before I leave, I
apologize for pulling you back.
10
There was a request by the Montgomery parties about
11
the hearing tomorrow as to whether or not even other counsel
12
could attend.
13
They made a motion on that.
The Court had said other counsel could attend.
14
THE COURT:
15
MR. PEEK:
16
17
18
Okay.
Is that right?
MR. SUNSHINE:
20
his ruling, he --
23
Then I missed that then.
I missed that.
We objected to Judge Pro.
22
I think I denied it.

Oh, okay.
19
21
I believe --
THE COURT:
Uh, Your Honor, you denied it.
He just -- I basically summarize
Right.
You objected to Judge Pro,
is what you did.

Have a seat.
Have a seat.
24
MR. SUNSHINE:
25
THE COURT:
All right.
All right.

(775) 786-5584

533
1
2
3
4
5
MR. PEEK:
I want to address that now before we
get here tomorrow.

THE COURT:
Yes.
Thank you.
Go ahead.
MR. SUNSHINE:
And Judge Pro denied it without
prejudice to raise it with Your Honor.
THE COURT:
MR. SUNSHINE:
THE COURT:
10
MR. PEEK:
11
THE COURT:
Right.
So, that's where it is.
Right.
That's what it was.
So I'm expecting -- and I'll just
12
tell you that if there are issues during that evidentiary,
13
that hearing tomorrow in which the parties; that is, the
14
Montgomery parties, or Mr. Flynn, there are attorney/client
15
privilege concerns, I'll be very careful in waiting for
16
counsel to object to certain issues.
17
a reason to ask the others to leave, they'll leave.
18
And if I feel there's
So, that's what my order will be.
19
MR. SUNSHINE:
20
MS. GAROFALO:
Thank you Your Honor.
21
THE COURT:
22
MR. PEEK:
23
(Court Adjourned.)
All right.
Thank you.
24
25

(775) 786-5584

534
-o0o-
2
3
4
I certify that the foregoing is a correct

transcript from the record of proceedings
in the above-entitled matter.
\s\
Kathryn M. French
August 29, 2008

Official Reporter
DATE
6
7
8
9
10
I N D E X
11
12
13
14
PLAINTIFF'S WITNESSES:
1)
PAGE:
SCOTT COOPER (cont')

Cross-examination By Mr. Peek
Redirect Examination by Ms. Garofalo
450
462
15
16
17
****Closing Argument By Mr. Peek...................... 471
18
****Closing Argument By Ms. Garofalo.................. 499
19
****Final Closing Argument By Mr. Peek................ 520
20
21
22
23
24
25

(775) 786-5584

535
I N D E X
O F
E X H I B I T S
2
3
EXHIBIT NUMBER:
MARKED
Exhibits 1 and 2
Exhibits 8, 10, 11, 13, 14, 15
-- documents
RECEIVED
425
-- documents
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25

(775) 786-5584
426

Montgomery V Etreppid # 835 - Aug 20 Doc OSC Hearing Transcript - D.nev. 3-06-Cv-00056 835 Transcript-Aug 20 Osc Hearing

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Montgomery V Etreppid # 835 - Aug 20 Doc OSC Hearing Transcript - D.nev. 3-06-Cv-00056 835 Transcript-Aug 20 Osc Hearing

Uploaded by

Copyright:

Available Formats

Case 3:06-cv-00056-PMP-VPC Document 835 Filed 09/03/08 Page 1 of 120

UNITED STATES DISTRICT COURT

Dennis Montgomery, et al.,

FOR DEFENDANT ETREPPID:

FOR INTERESTED PARTY:

Proceedings recorded by mechanical stenography produced by

KATHRYN M. FRENCH, RPR, CCR

Case 3:06-cv-00056-PMP-VPC Document 835 Filed 09/03/08 Page 2 of 120

KATHRYN M. FRENCH, RPR, CCR

KATHRYN M. FRENCH, RPR, CCR

Case 3:06-cv-00056-PMP-VPC Document 835 Filed 09/03/08 Page 3 of 120

Reno, Nevada, Wednesday, August 20, 2008, 9:00 a.m.

This is the date and time for

continued Show Cause Hearing in case number 3:06-cv-056-PMP,

Dennis Montgomery, and others, versus eTreppid Technologies,

Present on behalf of plaintiff.

Ellyn Garofalo and

Thank you very much, Miss Clerk.

And good morning, again, to everyone.

As you know, this is the final day for the Order

to Show Cause Hearing in this matter.

And we've had an

record that he is -- well, Mr. Sunshine, why don't you just

Mr. Montgomery is not present here

And I guess I'll just indicate on the

KATHRYN M. FRENCH, RPR, CCR

Case 3:06-cv-00056-PMP-VPC Document 835 Filed 09/03/08 Page 4 of 120

report what's occurred for the record.

There is a -- Your Honor, there

was an incident that Mr. Montgomery was involved in, of grave

concern to me and to him.

I would rather not report on it

And counsel for all of

the parties, including Ms. Wells, conferred in chambers with

the Court prior to this hearing, and apprised counsel of the

details of the situation.

that Mr. Montgomery has been delayed in getting here.

hopeful he will be able to return to the Court.

Mr. Sunshine will keep us apprised of that, and we'll complete

today's hearing as soon as we can.

resume until 10:30 or 11:00, perhaps sooner.

expect all of the parties and counsel to be standing by as

opposed to going somewhere too far away.

And the Court will simply say

And I'm sure

We probably might not

And also, in addition to that, the parties and

the Court, counsel and the parties discussed proceeding

Mr. Montgomery's counsel felt that was not appropriate.

he, pursuant to his due process rights, ought to be able to

be present for the balance of this hearing, and the Court

Mr. Montgomery's absence.

And, for good reason,

KATHRYN M. FRENCH, RPR, CCR

Case 3:06-cv-00056-PMP-VPC Document 835 Filed 09/03/08 Page 5 of 120

So, we'll just recess briefly with respect to

completing Mr. Cooper's testimony.

Mr. Cooper's testimony is completed, I don't believe that

Montgomery parties have further witnesses, and then the Court,

arguments and so forth.

The plan is that after

So, we'll certainly proceed with

In the interim though, we do have one housekeeping