Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_08-cv-00669/USCOURTS-casd-3_08-cv-00669-1/pdf.json

Nature of Suit Code: 830
Nature of Suit: Patent
Cause of Action: 15:1126 Patent Infringement

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08cv669-H (BLM)

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

DR SYSTEMS, INC.,

Plaintiff,

v.

EASTMAN KODAK CO.,

Defendant. 

And Related Counter-Claims

_______________________________

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Case No. 08cv669-H (BLM)

ORDER (1) DENYING DR SYSTEMS’

MOTION FOR PROTECTIVE ORDER

AND (2) GRANTING IN PART AND

DENYING IN KODAK’S MOTION FOR

PROTECTIVE ORDER

[Doc. Nos. 99, 110]

On July 9, 2009, DR Systems, Inc. (“DR Systems”) moved this Court

for a Protective Order under Federal Rule of Civil Procedure 26(b) to

quash Eastman Kodak Company’s (“Kodak”) deposition notice for Leo

Zuckerman, a shareholder and Board member of DR Systems. Doc. No. 99.

Similarly, on July 14, 2009, Kodak filed a Motion for Protective Order

and Motion to Quash DR Systems’ deposition notices for Antonio Perez,

Kodak’s Chairman and Chief Executive Officer (“CEO”), and Peter Cody,

Kodak’s in-house Director of Patent Litigation and Vice President. Doc.

No. 110. Subsequently, the parties timely opposed and replied to the

respective motions. Doc. Nos. 116, 120, 121, 128. The Court took the

matters under submission pursuant to Civil Local Rule 7.1(d)(1). Doc.

Nos. 101, 108. Having reviewed the briefing submitted, and for the

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The ‘811 patent concerns technology for displaying digital images. Doc. No. 1.

2 08cv669-H (BLM)

reasons set forth below, DR Systems’ motion is DENIED and Kodak’s motion

is GRANTED IN PART and DENIED IN PART. 

Background

On April 14, 2008, DR Systems filed a Complaint for declaratory

judgment, asking the Court to declare Kodak’s patent, U.S. Patent No.

5,414,811 (hereinafter “the ‘811 patent”),1 invalid and to find that DR

Systems did not infringe the ‘811 patent. Doc. No. 1. Kodak

previously had mailed DR Systems a warning of possible infringement.

Id. On May 7, 2008, Kodak answered and counterclaimed for declarations

of the ‘811 patent’s validity and DR Systems’ infringement. Doc. No. 9.

The current disputes arise from Kodak’s Notice of Deposition for Leo

Zuckerman, dated June 25, 2009 and DR Systems’ Notices of Deposition for

Peter Cody and Antonio Perez, both dated July 9, 2009. Doc. Nos. 99,

110. 

Legal Standard

I. Scope of Discovery

The scope of discovery is defined by Federal Rule of Civil

Procedure 26(b). Pursuant to that rule, litigants may obtain discovery

regarding "any nonprivileged matter that is relevant to any party’s

claim or defense." Rule 26(b)(1). Relevant information for discovery

purposes includes any information "reasonably calculated to lead to the

discovery of admissible evidence." Id. 

District courts enjoy broad discretion both to determine relevancy

for discovery purposes, see Hallett v. Morgan, 296 F.3d 732, 751 (9th

Cir. 2002), and to limit discovery to prevent its abuse. See Rule

26(b)(2) (instructing that courts may limit discovery where it is

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"unreasonably cumulative or duplicative," or obtainable “from some other

source that is more convenient, less burdensome, or less expensive," or

where its burden or expense "outweighs its likely benefit").

II. Motion for Protective Order

Upon a showing of good cause, the Court “may issue an order to

protect a party or person from annoyance, embarrassment, oppression, or

undue burden or expense.” Rule 26(c). “For good cause to exist, the

party seeking protection bears the burden of showing specific prejudice

or harm will result if no protective order is granted.” Phillips ex

rel. Estates of Byrd v. General Motors Corp. , 307 F.3d 1206, 1210-11

(9th Cir. 2002), citing Beckman Indus., Inc. v. Int’l Ins. Co., 966 F.2d

470, 476 (9th Cir. 1992) (holding that “broad allegations of harm,

unsubstantiated by specific examples or articulated reasoning, do not

satisfy the Rule 26(c) test”); see also Blankenship v. Hearst Corp., 519

F.2d 418, 429 (9th Cir. 1975) (Under liberal discovery principles of the

federal rules, those opposing discovery are required to carry a heavy

burden of showing why discovery should be denied). 

The court has wide discretion to determine what constitutes a

showing of good cause and to fashion a protective order that provides

the appropriate degree of protection. Seattle Times Co. v. Rhinehart,

467 U.S. 20, 36 (1984). However, courts should not bar a deposition

“absent extraordinary circumstances” as such a prohibition would “likely

be in error.” Salter v. Upjohn Co., 593 F.2d 649, 651 (5th Cir. 1979);

see also Blankenship, 519 F.2d at 429; (“A strong showing is required

before a party will be denied entirely the right to take a

deposition.”); United States EEOC v. Caesars Entm't, Inc., 237 F.R.D.

428, 432 (D.Nev. 2006) (“As a general rule, courts will not grant

protective orders that prohibit the taking of deposition testimony.”).

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III. Apex Depositions

As discussed above, a party seeking to prevent a deposition carries

a heavy burden to show why discovery should be denied. Nevertheless,

when a party seeks to take the deposition of an official at the highest

level or “apex” of a corporation, the court may exercise its authority

under the federal rules to limit discovery. WebSide Story, Inc. v.

NetRatings, Inc., 2007 WL 1120567, *2 (S.D. Cal. Apr. 6, 2007);

Celerity, Inc. v. Ultra Clean Holdings, Inc., 2007 WL 205067, *3 (N.D.

Cal. Jan. 25, 2007) (“Virtually every court that has addressed

deposition notices directed at an official at the highest level or

“apex” of corporate management has observed that such discovery creates

a tremendous potential for abuse or harassment.”) (citing Mulvey v.

Chrysler Corp., 106 F.R.D. 364 (D.C.R.I. 1985)). 

In deciding whether to allow an apex deposition, courts often

consider: (1) whether the high-level deponent has unique, non-cumulative

knowledge of the facts at issue; and (2) whether there are other, less

burdensome discovery methods. WebSideStory, 2007 WL 1120567, at *2;

Celerity, 2007 WL 205067, at *3. “When a high-level corporate executive

lacks unique or superior knowledge of the facts in dispute, courts have

found that good cause exists to prohibit the deposition.” WebSideStory,

2007 WL 1120567, at *2. “However, when a witness has personal knowledge

of facts relevant to the lawsuit, even a corporate president or CEO is

subject to deposition.” Id.

Discussion

I. DR Systems’ Motion for Protective Order

DR Systems asks the Court to prohibit Kodak from deposing Mr. Leo

Zuckerman because, as a shareholder and Board member of DR Systems, Mr.

Leo Zuckerman is at the “apex” of the corporate management and does not

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DR Systems also argues that the notice of deposition was improperly served

because “litigation counsel for DR Systems is not authorized to accept service of any

discovery for Leo Zuckerman.” Doc. No. 100 at 2. “Under Rule 30(b)(1), it is well

recognized that ‘if the corporation is a party, the notice compels it to produce any

‘officer, director or managing agent’ named in the deposition notice. It is not

necessary to subpoena such individual. The corporation risks sanctions-including

default or dismissal-if the designated individual fails to appear.’” Cadent, Ltd. v.

3M Unitek Corp., 232 F.R.D. 625, 628 n.1 (C.D. Cal. 2005). Mr. Leo Zuckerman currently

is one of DR Systems’ directors. Doc. No. 100 at 2. As such, the Court finds that

service on DR Systems’ counsel was proper and reviews DR Systems’ Motion for Protective

Order on its merits. 

5 08cv669-H (BLM)

have “unique personal knowledge” of the issues in dispute in this

litigation. Doc. No. 100 at 4. DR Systems further argues that any

factual information Mr. Leo Zuckerman may possess would duplicate other

discovery already obtained by Kodak and/or which could have been

obtained through other, less-intrusive methods. Id.; Doc. No. 99 at 2-

3. Finally, DR Systems asserts that the deposition notice is designed

to harass DR Systems and does not seek relevant facts.2 Doc. No. 99

at 2-3.

Kodak responds that Mr. Leo Zuckerman is “much more than an ‘apex’

witness - he is a percipient witness and controlling agent for DR on the

topic of willful infringement.” Doc. No. 118 at 2. Kodak argues that

“even as an ‘apex deponent’ Kodak is entitled to depose Mr. Leo

Zuckerman because he has “unique, personal knowledge that can be

obtained only from him.” Id. at 4. Kodak further argues that such

knowledge is directly relevant to the central issues in this case,

including willful infringement. Id. Therefore, Kodak asks that it be

allowed to proceed with the properly noticed deposition of Mr. Leo

Zuckerman. Id. at 6. 

The Court finds that DR Systems has not met its burden for the

issuance of a protective order. First, Kodak has established that Mr.

Leo Zuckerman has direct, personal knowledge of facts relevant to this

action. During his deposition, Mr. Chip Zuckerman, Mr. Leo Zuckerman’s

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son and DR Systems’ Chief Financial Officer, testified that after

receiving Kodak’s October 2007 letter regarding the ‘811 Patent, he

discussed it with several people, including Mr. Leo Zuckerman. Doc. No.

119 (Deposition of Charles Zuckerman at 22-23). While Mr. Chip

Zuckerman testified that he “did not go into the detail [sic] of the

claims with [Mr.] Leo Zuckerman,” he acknowledged that he did discuss it

with him and Mr. Leo Zuckerman did not direct him to conduct any

investigation into the allegation. Id. at 41. While DR Systems quotes

testimony that its Rule 30(b)(6) deponent did not discuss the

investigation of Kodak’s claims with Mr. Leo Zuckerman (doc. no. 120 at

22), it does not contradict Mr. Chip Zuckerman’s testimony that a

conversation occurred. As such, the Court finds that Mr. Leo Zuckerman

has direct, personal knowledge of topics that are relevant to the claims

and defenses at issue in this case.

DR Systems argues that even if Mr. Leo Zuckerman has such personal

knowledge, the desired information can be obtained from “less

burdensome” sources. While that may be true for some information, Mr.

Chip Zuckerman was unable to provide specific details regarding their

conversation and Mr. Leo Zuckerman’s response. Moreover, the mere fact

that one person testified about a conversation does not make any

additional testimony about the conversation repetitive. As one court

stated, “[t]he mere fact ... that other witnesses may be able to testify

as to what occurred at a particular time or place does not mean that a

high level corporate officer’s testimony would be ‘repetitive.’ Indeed,

it is not uncommon for different witnesses to an event to have differing

recollections of what occurred.” First National Mortgage Co. v. Federal

Realty Investment Trust, 2007 WL 4170548, *3 (N.D. Cal. 2007). 

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Second, DR Systems is a small, family-run corporation. While

neither party specifies the number of people on DR System’s Board of

Directors, Mr. Chip Zuckerman testified that Ms. Emma Zuckerman, Leo’s

wife and Chip’s step-mother, is a member of the board, and two of Chip’s

brothers, Scott and Fred, have served as directors. Doc. No. 119

(Declaration of Lisa C. McCurdy at ¶ 5). Kodak has not deposed and is

not seeking to depose any of these other family members, nor is it

seeking to depose all of the board members. Doc. No. 118 at 3. Rather,

Kodak appears to be targeting the individuals it believes possess

personal knowledge of relevant facts. Id. Moreover, the Court notes

that Kodak has deposed several of DR Systems’ employees and managing

agents, including two Rule 30(b)(6) witnesses. Doc. No. 99 at 2-3; see

First Nat’l Mortgage Co. v. Fed. Realty Inv. Trust, 2007 WL 4170548, *2

(N.D. Cal. 2007) (allowing the depositions of high-level executives

after depositions of lower-level employees suggested that they might

have at least some relevant personal knowledge); Google v. Am. Blind &

Wallpaper Factory, Inc., 2006 WL 2578277, *3 (N.D. Cal. 2006) (allowing

deposition of corporate founder only after learning from 30(b)(6)

witnesses that he may have relevant first hand information). These

facts establish that Kodak’s deposition notice is not designed to harass

DR Systems, but to elicit personal knowledge from the deponent.

Because Kodak has deposed several other witnesses and completed all

other discovery, the Court believes Kodak can limit questioning in a

manner to avoid unreasonable duplication. See Kelly v. Microsoft Corp.,

2008 WL 5000278, *2 (W.D. Wash. Nov. 21, 2008). Indeed, to safeguard

against undue burden or repetition, the Court will impose a three hour

time limit on the deposition. Id.

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Accordingly, the Court finds that DR Systems has not shown that

Kodak noticed Mr. Leo Zuckerman’s deposition solely to “harass and

annoy” DR Systems. Nor has DR Systems demonstrated that an examination

of Mr. Leo Zuckerman would be unduly burdensome, cause specific harm, or

result in prejudice. Rule 26(c); Rivera v. Nibco, Inc., 364 F.3d 1057,

1063 (9th Cir. 2004); Blankenship, 519 F.2d at 429. Accordingly, DR

Systems has failed to establish good cause for an order precluding the

deposition of Mr. Leo Zuckerman and its motion is DENIED.

II. Kodak’s Motion for Protective Order 

Kodak asks the Court to prohibit DR Systems from deposing Antonio

Perez, Kodak’s Chairman and CEO, and Peter Cody, Kodak’s in-house

Director of Patent Litigation and Vice President. Doc. No. 113 at 2.

Kodak argues that DR Systems noticed these depositions “solely in an

effort to harass Kodak” and “in blatant retaliation against Kodak for

having noticed the deposition of Mr. [Leo] Zuckerman.” Id. at 4. Kodak

further argues that the notices are “procedurally and substantively

defective” and therefore should be quashed. Id. The Court will address

each deponent below. 

a. Antonio Perez

Kodak moves to quash the deposition notice issued to Mr. Perez

because, as the Chairman and CEO of a multi-billion dollar company, Mr.

Perez is an “apex” deponent who has “no connection to this litigation”

or “relevant information of any kind.” Id. Kodak asserts that unlike

its request to depose Mr. Leo Zuckerman, there is no evidence that Mr.

Perez has “percipient knowledge” relevant to this case as Mr. Perez “has

not been identified in this litigation by any witness or in any document

as having relevant information.” Id. at 6. 

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DR Systems responds that it is entitled to depose Mr. Perez because

Kodak “broadened the scope of discovery to uncover this exact same

information from DR Systems” when it noticed Mr. Leo Zuckerman’s

deposition. Doc. No. 125 at 2. DR Systems suggests that Kodak has now

made “what is or is not the proper conduct of the principal of an

organization regarding claims and allegations of patent infringement” an

issue in this case. Id. at 3. Therefore, DR Systems argues that 

it would be fundamentally unfair and prejudicial to DR Systems

if this Court were to allow Kodak to depose the principal

shareholder of DR Systems to discover his knowledge and

actions related to this matter without allowing DR Systems to

also discover the knowledge and actions of Kodak’s principal,

Mr. Perez.

Id. In effect, DR Systems’ position is that it should be allowed to

depose Mr. Perez if Kodak is allowed to depose Mr. Leo Zuckerman because

“only through a direct comparison” of Mr. Leo Zuckerman’s and Mr.

Perez’s knowledge and actions would a jury be able to “evaluate whether

or not Leo Zuckerman’s knowledge and actions were appropriate.” Id. 

Although the scope of discovery is broad, it is not unlimited. As

explained above, the Court may act to limit discovery when a party seeks

to depose an official at the “apex” of a corporation who lacks “unique

or superior knowledge of the facts in dispute.” WebSideStory, 2007 WL

1120567, at *2. The Court finds this to be the case here. Essentially,

DR Systems argues that it is entitled to depose Mr. Perez because Kodak

requested to depose Mr. Leo Zuckerman. The Court agrees with Kodak and

finds that “[t]his is not a proper ground for requesting a deposition of

any witness, let alone of an ‘[a]pex’ witness.” Doc. No. 130 at 2.

Importantly, DR Systems has not established, nor can the Court discern,

what “unique or superior knowledge” Mr. Perez may possess that would be

relevant to this case. WebSideStory, 2007 WL 1120567, at *2 (“When a

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high-level corporate executive lacks unique or superior knowledge of the

facts in dispute, courts have found that good cause exists to prohibit

the deposition.”). Notably, Mr. Zuckerman is a controlling member of a

small, family-run corporation, while Mr. Perez is the Chairman and CEO

of a multi-billion dollar corporation. Thus, unlike Mr. Leo Zuckerman,

Mr. Perez is likely “removed from the daily subjects of the litigation”

and therefore lacks direct, personal knowledge of the claims and

defenses at issue in this case. Celerity, 2007 WL 205067, at *3 (citing

Baine v. General Motors Corp., 141 F.R.D. 332, 334 (M.D. Ala. 1991). In

fact, unlike Mr. Leo Zuckerman, who was identified as having relevant,

personal knowledge by DR Systems’ CFO, DR Systems has not identified any

witness or document indicating that Mr. Perez has personal involvement

in, or direct knowledge of, facts at issue in this case.

To the extent that DR Systems argues that it is entitled to depose

Mr. Perez to assess the companies’ respective “reasonableness,” its

argument is flawed. First, DR Systems has failed to point to a

comparable claim or defense where Kodak’s conduct or its

“reasonableness” is at issue. Second, even if it is at issue, DR

Systems has not identified Mr. Perez’s involvement in that conduct or

what “unique or superior” knowledge he may have regarding that conduct.

Therefore, because Mr. Perez lacks direct, personal knowledge of the

facts at issue in this case and the Court can discern no legitimate

purpose for allowing his deposition to go forward, Kodak’s Motion for

Protective Order is GRANTED and the deposition notice of Mr. Perez is

QUASHED. 

b. Peter Cody

DR Systems also seeks to depose Mr. Cody, Kodak’s in-house Director

of Patent Litigation and Vice President. Doc. No. 113 at 4. Kodak asks

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that the deposition notice be quashed because “the only topic identified

by DR for deposition concerns the letters sent by [Mr. Cody on behalf of

Kodak] to DR in 2007 regarding DR’s infringement” and “there is no

legitimate reason for DR to notice Mr. Cody’s deposition on this topic

at this late date in the litigation, and with only five days’ notice.”

Id. Kodak argues that DR Systems has “known about the 2007 letters and

their authorship since receipt” and therefore had “numerous prior

opportunities to seek information on [this] topic.” Id. at 7. Kodak

further argues that the fact that DR Systems waited to notice Mr. Cody’s

deposition until “less than one week before fact discovery was set to

close and only after Kodak noticed the deposition of Mr. Zuckerman ...

is indicative of the harassing nature of the notice.” Id.

As DR Systems points out, Kodak does not argue that Mr. Cody does

not have direct, personal knowledge or that his deposition would not

yield relevant information. Doc. No. 125 at 4. Rather, Kodak takes

issue with the short timing of the deposition notice and the fact that

it was not issued until July 9, 2009, less than one week before fact

discovery was set to close and after Kodak issued a deposition notice

for Mr. Leo Zuckerman. Doc. No. 113 at 7-8. The Court finds that

although the timing of the noticed deposition is less than ideal, it was

not unreasonable in this situation because DR Systems did not realize it

would have to depose Mr. Cody until it deposed Terrence O’Toole, a Rule

30(b)(6) deponent, on June 24, 2009. Doc. No. 125 at 4. DR Systems

sought to depose Mr. O’Toole on the following topics related to its

laches and unclean hands defenses: (25) the date when Kodak first

learned of the Accused Products; (26) the facts and circumstances

relating to Kodak’s first knowledge of the Accused Products; (27) the

date when Kodak first believed the Accused Products infringe the ‘811

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3

In its Reply, Kodak argues that DR already has deposed a Kodak witness, Mr.

O’Toole, regarding the letters and therefore, other than to obtain privileged

information, there is no need to depose Mr. Cody. Doc. No. 130 at 3. However, as

stated above, “[t]he mere fact ... that other witnesses may be able to testify as to

what occurred at a particular time or place does not mean that a high level corporate

officer’s testimony would be ‘repetitive.’ Indeed, it is not uncommon for different

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patent; and (28) the facts and circumstances relating to Kodak’s first

belief that the Accused Products infringe the ‘811 patent. Id. When DR

Systems inquired about these topics, Mr. O’Toole simply directed DR

Systems to Mr. Cody’s October 2007 letter:

Q. Is it Kodak’s position that Kodak first became aware of DR

Systems’ accused products at or around October of 2007?

A. So the only information I have that I can relay is this

document that’s Peter Cody’s letter.

***

Q. Other than reviewing the October 2007 letter and speaking

to counsel, did you take any effort or make any effort in

order to determine when Kodak first learned of DR

Systems’ products?

A. I don’t recall doing anything else.

Id. at 5. 

“Courts generally refuse to allow the immediate deposition of a

high level executive, often given the sobriquet ‘apex deponent,” before

the testimony of lower level employees with more intimate knowledge of

the case has been secured.” Upjohn, 593 F.2d at 651 (granting

protective order for executive where plaintiff had sought to depose the

president of the company before deposing lower level executives). Here,

before noticing Mr. Cody’s deposition, DR Systems attempted to acquire

this information from Mr. O’Toole, a lower level Kodak employee.

However, Mr. O’Toole was not able to provide the requested information

to DR Systems’ satisfaction.3 Moreover, both Mr. O’Toole’s testimony and

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witnesses to an event to have differing recollections of what occurred.” First

National Mortgage Co., 2007 WL 4170548, at *3. Certainly, Mr. O’Toole’s knowledge of

the letters is not the same as Mr. Cody’s, the letters’ author. Moreover, to the

extent that DR Systems seeks privileged information, Kodak is free to object during the

deposition. 

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the documentary evidence reveal that Mr. Cody has relevant, first-hand

information regarding the defenses at issue in this case. Therefore,

the Court finds that DR Systems is entitled to depose Mr. Cody about his

non-privileged knowledge of the above-mentioned topics, specifically the

letters he authored and sent to DR Systems regarding DR Systems’ alleged

infringement, including the October 2007 letter. Thus, Kodak’s Motion

for Protective Order and Motion to Quash Mr. Cody’s deposition notice is

DENIED. However, because the Court limits the deposition to those

topics listed above, the Court imposes a three hour time limit on this

deposition as well. 

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Conclusion

For the reasons set forth above, DR Systems’ Motion for Protective

Order is DENIED and Kodak’s Motion for Protective Order and Motion to

Quash the deposition notices of Mr. Perez and Mr. Cody is GRANTED IN

PART and DENIED IN PART. Accordingly, the Court ORDERS as follows:

 (1) DR Systems may not depose Mr. Perez;

 (2)Kodak may depose Mr. Leo Zuckerman and DR Systems may depose

Mr. Cody for no more than three (3) hours each;

 (3) The depositions must take place within twenty (20) days of

this Order at a time and place of the respective deponents’ convenience;

and

 (4) The discovery deadline is extended twenty (20) days from the

date of this order for the sole purpose of taking these two depositions.

IT IS SO ORDERED.

DATED: September 14, 2009

BARBARA L. MAJOR

United States Magistrate Judge

Case 3:08-cv-00669-H-BLM Document 141 Filed 09/14/09 Page 14 of 14