just take a moment so everybody can get situated  i think we're ready to proce relevant information when litigation is reasonably anticipated and on the issue of what remedies are appropriate where as here those duties have been willfully violated it also presents the court with the opportunity to reaffirm the crime fraud exception to the attorney client privilege and most importantly this case presents the court with the opportunity to both guide and remind the bar in this district that the lawyers paramount duty is to the integrity of the system of justice just that the court below the magistrate judge on the district court failed to apprehend those kinds of standards in their various determinations on the discovery dispute which which standard stand as you were just speaking of encouraging the six circuit to reaffirm well i think what they what they what they over looked and misapplied was the  no mention of the forensic examination conclusions in the magistrate judges reported recommendation on the motion for sanctions not at all in the response to the motion for saying sions by paragon every point they made was refuted by the printer going salmon or put in a supplemental affidavit saying none of this is accurate and none of that was addressed in the district court's opinion so that's my point no i'm just saying i'm not saying that the it's unfair to deem that a determination by the district court that it was simply not persuasive in a persuasive report your honor i'm not i'm not impugn the integrity of the district court i'm not saying the district to district court  concerned what pier gun did with automated c d s product after september sixteenth two thousand and three and that's the day paragon lost all rights to the product and the date not coincidentally the district court ruled sanctions and the word of what it takes in this case there's an underlying five thousand dollar contract then you know what copyright claims and i'm trying to figure out has been going on forever it seemed to be trying the patience of the magistrate in a district court judge it's just not obvious from the briefs why this has been going on so long and i'm missing was there some serious economic side up so your end of the case never got to the due to the damages point three i don't want you to get distracted by the fact it's not a five thousand dollar case that was the foot wasn't said go ahead you know that was the sale that was the amount of the software sale that a plain dealer didn't get on the stakes the economic states is the automated automates product yes the d s product which is lost which gained exclusive rights over as determined by the state court the marketing of that the sale of that was torturously interfered with by paragon our guys been using this in lots of other places here again marketed after it lost rights to it of other places to lots of clients i think the only sale was to the plain dealer but the reason it went on for so long your honor is that the key reason is that the two chief software engineers whose work is central to the case there is software engineer who worked on automates as he did his product which they had access to when the parties were still under joint part of things that i'm interested in your interest in the economic state automated went out of business it was unable to successfully market and sell this product because of the statements paragon was making into the marketplace and the state and the fact that the fact that they were claiming continuing ownership rights in the us and and no newspaper wanted to touch it while this battle was was still going on and once it was a copyright infringement case because we sought to discover what did they do with this product up their last rights to it what copies of it did they made what  over it that they made but they poured it what did they do with it and that evidence as we finally convinced the district court could only be found in their computer systems because they obviously hadn't produced a voluntarily and the district court ordered two things for the forensic examiner to go in there and look for evidence of co processor development number one and number two any evidence that any did any thing was deleted and he found compelling way that the personal computers the hard drives of the personal computers of the two chief software engineers had been discarded in two thousand and six which as the record is clear the protective order in this case was delayed the entry was delayed for up to a year at the end of two thousand and five to beginning of two thousand and six these emails came across from their clients telling their attorneys we're not producing any of the stuff we're michael johns you know it's like the genes that's usually not a pro for sanctions but there's compelling reasons under the zuba lasky test they if there are further things under the super lucky test that are considered at a minimum gross negligence been accepted and six of the test i don't think has been it's a it's a district court determination from a drama new york district judge that's correct the law on think yes ok she did the first thing interesting case complicated and so forth hold even ministry judge bowman recognised that wasn't done in this case to identify the key players in ensure that there are a lot like trying to compete for records are preserved wasn't done to cease in the deletion of emails of argument there was sufficient culpability to get a permissive adverse inference instruction now link that to the claim and if i may be so bold as to supplement which so it was asking you five minutes ago i would say this what are the numbers the fall of the dollar sign according to your client's position what you look at what your question what is it what is this about what what what digits are what numerals followed up the dollar side according to your case a fifty thousand dollar case one hundred thousand dollar case a one million dollar case a ten million dollar case a billion dollar cases pick a number the there was an expert report in the state court appearance per gun fired its first set of counsel and sued them for legal malpractise after we won a state court case all i want to hear is the number five million dollars actually it was actually i think it was fifteen it was a damages report assessing what the what marketable value of the single copy distribution system was that was and it's in the record of the you know of the district court and but understand why this ca software time in the newspaper industry in exactly doing well but that's true you're owners and that's why there was a small window there was a small window of opportunity for this product yes that the product the time may have passed through advancing technology but because of how this case the delays in the and the inability to get the discovery we were entitled to but you know your orders were to came down to in this case is there we did our job we didn't do anything improper we zealously advocated to get the discovery we're entitled to we asked them to produce all the other evidence of what they did with those c d s after they lost all rights to it and there was obviously destroyed it was never produced the only evidence we obtained of their work honestly d s was through a third party subpoena that they didn't even produce that they produce nothing these e mails these incriminating e mails they they actually carried that strategy out that discovery is not a significant federal case to me right here and i know it looks like exactly what you're trying to do in this case is you have a very frivolous case and all you're trying to do is use discovery to get leverage no you case in state court there was an approval as case we won they it was determined that they breached the prior contract automated didn't breach it and they actually came in that case was to the court with unclean hands this case was not frivolous this was this company's business their lifeline which was destroyed this is not a frivolous case ok person you have your said that is exactly what has happened in this case this is taking emeritus case using discovery to try to force the shuttle meant to e mails that suggest the smoke but there is not when there's smoke there's not necessarily fire and not one piece of evidence has been identified to the court either in the briefs or in oral argument showing that anything that mr carson's client is talking about was relevant what this case is it's a case that starts out about five thousand dollars there's no evidence in the record of any other sales of the dre she product which was owned by my client or the c d s called product that is owned damages because it improve any damages but there is nothing in this case there is no evidence of damages in this case period and when he keeps on trying to raise when a s c keeps on trying to raise all this stuff about what happened in the state court well judge wells comes back and says you tried that already it's race judicata you don't have a claim and that is why much of it is on many multiple grounds got thrown out on summary judgment what does an automated claim that there were claims that arose after the state court action was completed and those matters could not have been adjudicated in the state court there that toxic zack way about what he's saying this is a quote from the state court action for the seeking an order in joining paragon from claiming claiming ownership interest in the software enjoying paragon from interfering with a ashis ownership interest in the software and joining paragon from interfering with a perspective an actual business relationships in regard to the software that was a jew dictated back in the state court action all i really want t post state court claims in your view on your brief says that five thousand dollars yes there's one state court there's one new claim there was one sale post a court case for five thousand which is what they judicata right so he's trying to and they answer is no i'm sorry or not i thought they were i mean i thought there were some things that happened after the state court case every single thing he talks about brant anderson there's a whole section in the briefing about brant anderson and brant anderson was an individual that was hired by paragon before the ruling in the state court case his reason that he was hired was at that point and it is confusing because there's lots of little pieces and parts that are moving but brant anderson is the guy who was working on c d s for paragon prior to the decision in the state court so everything that he was doing already was covered by the state court the only person who did any of the dre so your honor was brian acton it's a simple program he signs an affidavit saying he took directions from the plain dealer he made it up  as head and it's a simple obviously it's a simple program it cost five thousand dollars it's not very complicated he signed an affidavit to that the plain dealer signed an affidavit to that pair automated  claims that after the state court action paragraphs letters to automated clients threatening legal action for one reason or another and that these are subject to redress under various state law theories might well i've heard about that they do claim those are those are matters that could not have been decided or determined in the state court proceeding because activities occurred after the judgment somehow claim preclusion works you don't you don't get into whether the damages or not you ask yourself was this part of the nucleus of common facts and therefore should have all been brought in the original action by out of the question and if things happened afterwards you either should preclusion covers it or you've got to come up with some other way of doing it but just to court to claim preclusion and judge calls question seems to suggest that it's not a good reason it was only claim preclusion for part of it the district court also went through all of the evidence and determined that there was absolutely no evidence in the record showing that our dre c product was derived from c d s and that was show that the district court the our product was derived from their product and they say in the district court so there was absolutely no evidence in the record supporting that and the district court also then found that all of their claims were based on that which talk about sanctions for a moment again this is a case that they're claiming all this bad stuff to place look at what magistrate judge perlman had to say about what's going on in the case and this is in the record and he said on the record this case is out of control and i laid there principally at the door plaintiff's counsel mating that side so the perception is our side had it done anything wrong from discovery standpoint nonetheless we did have to go through this electronic discovery the electronic discovery and this is a case where electronic discovery is being used there's five thousand dollars it is sure tronic discovery is being used the first time they do the keyword searching results of the equivalence of nine million documents so when they're talking about there's all sorts of fights over electronic discovery would cost hundreds and hundreds of thousands of dollars to manage it because if you were that one introduced the concept of proportion when everyone's discussing the scope of discovery that was appropriate in this case yes and we tried to quite frankly we tried to settle the case because of exactly that but they have a very different perception as to what this case is worth but nonetheless we had to go through that process so we go through that it then gets narrowed down to three point five million pieces of paper again over a case where the only damages that have been presented are five thousand dollars and ultimately within these three point five million pieces of paper computer generated pieces of paper a s c does not find a single document supporting their case so we spent  significant amount of money going through this process a significant amount of time going through this process all they were able to do is find two attorney client privilege e mails expressing their client's frustration which i c certainly understand the client's frustration i won't want to participate in this case either if i was the client but about the oddity of the district court saying there should be a permissive adverse inference instruction but then granting summary judgment that arises because of the way it went to the magistrate it's my understanding the magistrate judge wrote two opinions one granting summary judgment another one denying the sanction other than the one that your honor just mentions for one piece of discovery one one disc that was disposed of in the way i interpreted what the magistrate judge was doing is in the event that he was overruled by the district court because it was a recommendation that was he was providing to grant summary judgment he said there were no original protectable elements that were ever set forth by a c therefore he would grant summary judgment my reading of what he was doing in a separate order was in the event that judge wells would have overruled him in the case were to proceed he then was providing that within his sanctions report so i don't see it as being inconsistent he was i don't think he would have done that if he did in ult decision but it was only referred to him for a recommendation although judge wells did then as she wrote her opinion on the summary judgment than just dropped a footnote saying she thought that the magistrate wrote a good opinion with respect to so i don't think that judge well is really paid attention to that piece of it and to me that that's my interpretation of it so i don't believe that it was internally inconsistent and if you look at the evidence that they keep on talking about they they present their experts affidavit dr powells and it's very craftily done because all that he does is he keeps on sitting there comparing pieces and parts of our product back in the state court case when the state court case was still going on and he says oh are there for what we were working on what brant anderson was working on it and he was working on a cd yes because we were still entitled to work on a c d s works kind of like a cd gosh well of course it looks like c d s because he was working on a c d s but he never says anything in the affidavit that tracy is derived from d s there's one line in his affidavit where he sits there and he makes an assumption which is a false assumption he sits there and assuming the c d s demo in just a digress for a moment again this is state court case was still going on we were going in we were dumb awaiting the product it's not even coded just a dummy products so that you could show it in marketing and he then makes he then the  the expert makes a false assumption that somewhere in a brief we said that c d s demo was derived from c d s which is not true we never said that not only that the c d s demo is vaporware it's not even coachella campi drive finally all talk for a moment about the about these e mails that were improperly used by the other side these emails were part of the three point five million pieces of paper that were produced they had gone through two filters to make sure that there were no attorney client privilege was a filter by his expert there was a filter by our expert so every reasonable diligence was being done to make sure that there was nothing judge well as we move to strike ultimately she granted our motion to strike and i think what she did there is completely correct they then claimed to have some additional attorney  parties rights contraire rights visa v one another the keep the key finding in that in the state court case relevant to those carriers was the pira guns unilateral terminations of the contract was a decision made at their own risk clearly the fennec could have sought legal remedies available to a prior determination of the country but chose not to do so by terminating the country per gun laws any rights under the contract as of that date this case is about everything about what happened after september sixteenth two thousand and three as determined by the state court because what happened in the state court is that period and unilaterally t claim just focused on that not everything else it's almost as if it was barely raised but yours we did we did address it thoroughly and in the papers before this court and i mean that happens all the time in forfeiture settings d s that wasn't that didn't come into existence in till the state court granted those exclusive right and so how could claims predicated on exclusive rights to the product which was which was just had no legal support was there because the copyright claim fails it has fatal implications for the other state law claims because all the other state law claims are contingent on the copyright for infringing claims which has state court claim and i'm just saying this just seems like very much the tail wagging the dog because it was barely address below the point i'm making it's not about the copyright claim i understand and and i simply respond that those an appropriation of one companies of one company stealing a software product from another company there before you the the hard drives of their to use ch engineers were destroyed discard gone and they're telling you as they told the district court don't worry nothing on those hard drives had any relevance to this case the backup tapes don't worry no relevance they were overwritten knightly where the queer the law is clear is that there there is a duty to preserve them when the information of that otherwise accessible in a was an otherwise accessible because the hard drives were gone and everything everything that they that the the third said attorneys brought to the attention of the score for instance granderson was working on his c d s to make it work for the tribune i and i don't want to detract from the paper because i think the papers are put the record before you very well that this is a case ted if you don't if you don't take this seriously and you should because it's because it was two individuals livelihood it's it's it deserves merit on that but it deserved it deserves your serious attention because this case will s instead of a deterrent from litigants i one thing here and apparently the parties have tried before and you've been unsuccessful and maybe that's just where this is going to play out but you might at least want to consider contacting our mediation office to see if there is any common ground that can be reached here we have an excellent mediation office we have judges have no contact with that office all discussions are confidential as between you and that office mr paul calico is the chief mediator does a wonderful job i just mention that i don't know that it's something you're willing to consider at this point but seems that the litigation is just on on for a very long period of time and and maybe you're just at a juncture where further discussions might be fruitful maybe not and if not then so be it again it's up to you to make contact we proceed independently of whatever is going  appreciate it and as i said the case will be submitted to thank you