UNITED STATES OF AMERICA DEPARTMENT OF TRANSPORTATION OFFICE OF HEARINGS

IN THE MATTER OF: PREMIER NAIL SOURCE INC. Respondent

Thursday, June 9, 20l6 FDMS No. FAA-20l6-4266 1

The teleconference convened, pursuant to notice, at l0:00 a.m.
BEFORE: THE HONORABLE J.E. SULLIVAN, U.S. Administrative Law Judge

(202) 234-4433 

# RECEIVED JUN 282016 

### HEARH\ 1

### G DOCKET

NEAL

### R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202) 234-4433APPEARANCES:

On Behalf of the Complainant: CHRISTOPHER R. STEVENSON, ESQ. of: Federal Aviation Administration 1701 Columbia Avenue College Park, GA 30337 (404) 305-5208

On Behalf of the Respondent: DANIEL KERZNER, prose Premier Nail Source, Inc. 5454 W. Crenshaw Street Tampa, FL 33634 (813) 390-0700 Also Present: RACHEL BROWN

NEALR. GROSS 2

(202) 234-4433 COURT REPORTERS ANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202) 234-44333

1 P-R-0-C-E-E-D-I-N-G-S 2 (9:59 a.m.) 3 JUDGE SULLIVAN: Okay, we're on the 4 record in the matter of Premier Nail Source, Inc. 5 This is FAA Docket Number FAA-2016-4266. 6 Today is Thursday, June 9, 2016. And 7 the parities have convened for a Rule 16 8 litigation scheduling conference. And some 9 discussion about the motion that has been filed 10 by the FAA. 11 The Federal Aviation Administration, 12 which I' 11 hereinafter refer to as the FAA, is 13 represented by its Attorney of record, Mr. 14 Christopher R. Stevenson. 15 Premier Nail Source, Inc. is 16 represented by its lay representative, Daniel 17 Kerzner. 18 Mr. Kerzner, just so that I know, are 19 you a principal of Premier Nail Source? Do you 20 own the company, are you a shareholder, what's 21 your status with the company? 22

(202) 234-4433 MR. KERZNER: I am the secretary and

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W WASHINGTON, D.C. 20005-3701 (202) 234-44334 1 treasurer on the board of directors. And I'm the 2 chief financial officer of the company. 3 JUDGE SULLIVAN: Okay, thank you. And 4 you are not a lawyer though? 5 MR. KERZNER: No. 6 JUDGE SULLIVAN: Okay, great. Thank 7 you very much. Okay. Well, let's talk first 8 about a couple different things. 9 And, Mr. Kerzner, what I want to talk 10 to you for just a moment about is the fact that 11 typically what I do in these kinds of cases, is I 12 always speak to the prosecuting agent first. 13 They're the moving party. 14 MR. KERZNER: Okay. 15 JUDGE SULLIVAN: And because they have 16 the burden of proof ultimately if you go to a 17 hearing, it is very standard in the legal 18 profession to always look to the Movant first 19 when you have pre-hearing conferences. Because 20 it is a structure by which everybody is reminded 21 of who is the Movant and who is the Respondent. 22

(202) 234-4433 MR. KERZNER: Okay.

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1 JUDGE SULLIVAN: So you' 11 see me 2 constantly turn to Mr. Stevenson first. It's not 3 because I prefer him, it's simply because he I s 4 the Movant. 5 I will then turn to you as the 6 Respondent. And I'll probably ask you to answer 7 the same questions or give me a response, in 8 terms of what your Client thinks or doesn't 9 think. 10 Sometimes I 111 deviate from that 11 structure. But if I do, I'll let you know. So 12 when you hear me talking to Mr. Stevenson, listen 13 carefully. You can take some notes if you want. 14 And then you'll see how when I turn to 15 you I' 11 be asking you to either confirm or 16 disagree or make whatever statement that you 17 want. Any questions about that? 18 MR. KERZNER: Nope. Understood. 19 JUDGE SULLIVAN: Okay. Thank you. 20 Mr. Stevenson, it appears that the FAA filed a 21 complaint with the Office of Hearings on March 22 16, 2016.

(202) 234-4433 And thereafter on April 25, 2016 the

NEAL R. GROSS COURT REPORTERSAND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. WASHINGTON, D.C. 20005-3701 (202) 234-44336 1 FAA filed a motion to deem admitted and motion 2 for decision. 3 And I wanted to tell you that I 4 apparently missed that in the filings because I 5 saw it for the first time today. So I apologize 6 for not catching it sooner and I will be talking 7 with my staff about that as well. Because 8 clearly, there should have been some action by 9 the Court on that. 10 It also appears that on May 9, 2016 11 the Respondent filed a one-page letter dated to, 12 whom it may concern. And on the same day, also 13 filed a one-page answer. 14 Subsequently, the parties also filed 15 a joint proposed schedule on June 1, 2016, 16 pursuant to the Court's April 12, 2016 order. 17 And I need to ask you, Mr. Stevenson, one or two 18 things about this joint proposed schedule and 19 then talk to you a little bit about the motion. 20 So in the June 1, 2016 joint proposed 21 schedule, it indicates on Page 1 of the two-page 22 document that the parties were jointly submitting

(202) 234-4433 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., NW. WASHINGTON, D.C. 20005-3701 (202) 234-44337 1 the material. But there's no indication of when 2 the parties spoke and it I s not signed by Mr. 3 Kerzner. Can you give me an idea of when the 4 parties came up with this plan? 5 MR. STEVENSON: I initially drafted 6 the plan and I provided a copy to Mr. Kerzner. 7 He contacted me and we spoke. I think we may 8 have spoken on the 31st of, obviously prior, 9 perhaps the 24th. 10 Mr. Kerzner may recall better than I. 11 I believe he had been out of the office prior to 12 that. So he may remember the exact date. 13 MR. KERZNER: May 31st. Sorry. 14 MR. STEVENSON: Okay. Thank you, Mr. 15 Kerzner. Yes, we went over the discovery plan. 16 I provided some basic explanation of how the 17 process usually proceeds. I asked him if he had 18 any questions. We talked about it for a little 19 bit. 20 I also indicated to him, as I 21 indicated at the bottom, I believe I indicated at 22 the bottom here, that these can often be shifted,

(202) 234-4433 NEALR. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE, N.W WASHINGTON, D.C. 20005-3701 (202) 234-44338 1 depending on what the Judge's schedule is. 2 Especially hearing availability. 3 JUDGE SULLIVAN: Okay. Thank you. 4 Mr. Kerzner, I heard you speak during Mr. 5 Stevenson's commentary. Just so that you know, 6 you typically don't want to jump in unless the 7 Court invites you to do so. 8 MR. KERZNER: Okay. 9 JUDGE SULLIVAN: So even if you hear 10 Mr. Stevenson say something like, Mr. Kerzner may 11 be able to tell us more specifically, he's not 12 inviting you to jump in, he's just telling me I 13 should ask you. 14 MR. KERZNER: Okay. 15 JUDGE SULLIVAN: Okay. So you just 16 want to sit and wait quietly until I'm ready to 17 hear from you. 18 MR. KERZNER: Okay. 19 JUDGE SULLIVAN: So thanks for noting 20 that you spoke on May 31, 2016. Mr. Kerzner, I'm 21 going to turn to you now. 22 Just on the joint proposed schedule,

(202) 234-4433 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLANDAVE., N.W WASHINGTON, D.C. 20005-3701 (202) 234-44339 1 it appears from the dialogue that we just had 2 that the conversation you had with Mr. Stevenson 3 about this two-page document was on May 31, 2016. 4 Was there anything else that you would like to 5 add to the brief commentary that Mr. Stevenson 6 provided to the Court? 7 MR. KERZNER: Not really. 8 JUDGE SULLIVAN: Okay. Then let's go 9 back to something, matter that precedes that. 10 And that's the April 25, 2016 motion to deem 11 admitted and motion for decision, that was filed 12 by the FAA. 13 And, Mr. Stevenson, in the materials 14 that Mr. Kerzner filed shortly thereafter, on May 15 9, 2016, he indicated that in his one-page 16 letter, that he called you and talked to you 17 about this motion. Do you remember when that 18 phone call took place? 19 MR. STEVENSON: If Your Honor will 2

### o give me a moment I can check if I made notes 21 about that. 22

(202) 234-4433 JUDGE SULLIVAN: Okay. Thank you.

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1 MR. STEVENSON: I did not. My 2 recollection is that Mr. Kerzner called me 3 shortly after he had received the motion and then 4 in relatively short order after that, filed his 5 response to it in the answer. 6 JUDGE SULLIVAN: Okay. Thank you. 7 Mr. Kerzner, I'm going to turn to you then. Do 8 you recall what day you called Mr. Stevenson and 9 talked with him? After you received the motion. 10 MR. KERZNER: It was the same day I 11 received the paper. 12 JUDGE SULLIVAN: Okay. 13 MR. KERZNER: On the motion stating 14 that it went through. So I'm not positive what 15 the date is. I've got the papers in front of me. 16 The motion was filed

-- by the way it 17 landed, a few days after the motion was actually 18 filed. 19 JUDGE SULLIVAN: Okay. Okay. So let 20 me ask you a couple questions then, if I may. 21 And then I'm going to turn back to Mr. Stevenson 22 about this particular motion.

(202) 234-4433 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202) 234-443311

1 After you talked with Mr. Stevenson, 2 do you recall how long it took you to draft this 3 letter in your answer? Because I received this 4 material on May 9, 2016. 5 MR. KERZNER: It only took me two 6 days. I sent it out two days after I spoke to 7 him. 8 JUDGE SULLIVAN: Okay. And when you 9 say you sent it out, this material is not dated. 10 But the envelope I have shows that it was 11 postmarked May 4, 2016. Does that sound about 12 right to you? 13 MR. KERZNER: That is correct. That 14 is the day I shipped it. That is the day I sent 15 it. I sent them all certified. 16 JUDGE SULLIVAN: Okay. So the two 17 days prior to that would have been May 2nd, 18 Monday, 2016. Does that sound about right? 19 MR. KERZNER: That is correct. 20 JUDGE SULLIVAN: Okay. Let's talk 21 just for a moment about this one-page letter, 22 that you have, in which you addressed it to whom

(202) 234-4433 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202) 234-443312 1 it may concern. 2 Can you tell me, since you're not a 3 lawyer, what experience, if any, you have had in 4 litigation in the past? 5 And you don't have to be too specific, 6 because I don't want to engage in any deep 7 inquiry. I'm just interested in knowing what 8 your experience is with legal process, if any. 9 MR. KERZNER: None. Almost nothing. 10 I've never really dealt with it. 11 JUDGE SULLIVAN: Can you tell us what 12 your educational level is? 13 MR. KERZNER: I have an A.A. degree. 14 College. 15 JUDGE SULLIVAN: What does that 16 standard? 17 MR. KERZNER: Associate in arts. 18 JUDGE SULLIVAN: Okay. And when you 19 say that you've never dealt with the legal 20 profession, so you've never served as a juror, 21 for example? You've never served as a witness in 22 a courtroom?

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1 MR. KERZNER: No. 2 JUDGE SULLIVAN: Those kinds of 3 things? 4 MR. KERZNER: No. 5 JUDGE SULLIVAN: And what year did you 6 receive your A.A. degree, if I may be so 7 MR. KERZNER: 2003. 8 JUDGE SULLIVAN: Okay. Mr. Stevenson, 9 let's turn back to you. This is your motion and 10 ideally it should be addressed first. 11 So I can do a variety of different 12 things with this particular motion. And with the 13 schedule of the Rule 16 litigation scheduling 14 conference. 15 I can ask you to make a brief oral 16 argument today on this motion. I can ask you to 17

-- I can ask the parties to consider accepting 18 some oral rulings today or the parties may want 19 me to put everything in writing. 20 We can also push out the litigation 21 scheduling conference in its entirety, until the 22 motion is ruled upon.

(202) 234-4433 NEAL R. GROSS COURT REPORTERSAND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W WASHINGTON, D.C. 20005-3701 (202) 234-443314 1 Or, if the parties are interested, we 2 can talk, to some degree, generically about that 3 proposed schedule, in the event that your motion 4 is either partially granted, fully granted or not 5 granted at all. 6 What's your preference in terms of how 7 you think this should work best for your Client? 8 MR. STEVENSON: The FAA's preference 9 would be to move the matter as briskly as 10 possible. The FAA would find it acceptable for 11 the Judge to issue an oral ruling today, assuming 12 of course that the Court has all the facts that 13 the Court believes it needs to issue that ruling. 14 If that isn't possible, then 15 supplemental filings are necessary or additional 16 time for the Court to consider our arguments is 1 7 necessary, then we would prefer to set up a 18 generic joint proposed schedule that would simply 19 delay the deadlines here. And then once the 20 Court had issued its ruling, we could proceed 21 with that, to the extent still applicable. 22

(202) 234-4433 JUDGE SULLIVAN: Okay.

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLANDAVE.• N.W. WASHINGTON. D.C. 20005-3701 Mr. Kerzner,

(202) 234-443315

1 same question to you, sir. Do you have a 2 preference on how the Court addresses this 3 preliminary motion, procedurally? Do you care? 4 MR. KERZNER: No, it's not relevant to 5 me. 6 JUDGE SULLIVAN: Okay. Well, it is 7 relevant. But I think if you don't have a 8 preference, that's fine. 9 MR. KERZNER: Oh, then, I'm sorry. I 10 mean it's not

-- I have no preference. 11 JUDGE SULLIVAN: Okay. Thank you. 12 What I'm going to do is this. I'm going to ask 13 you both for a few minutes to just highlight your 14 positions on this motion. And then I think I'll 15 be able to issue an oral ruling and I'll follow 16 it up with a written ruling. 17 But I'm always very interested in oral 18 arguments. And I find that actually helps inform 19 me. 20 So, Mr. Stevenson, if you would be so 21 kind, I would like to hear from you. And if you 22 would also, in this brief oral presentation,

(202) 234-4433 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLANDAVE., NW. WASHINGTON, D.C. 20005-3701 (202) 234-443316 1 address any comment you would like to make to the 2 Respondent's one-page letter and answer, that 3 would be helpful. Sir. 4 MR. STEVENSON: Thank you, Your Honor. 5 There is not going to be any dispute here that 6 there was an untimely answer. So the question 7 would be whether or not there was good cause for 8 that. 9 In the past, the administrator has 10 found good cause for a prose Respondent to not 11 have filed an answer when the FAA did not make 12 any effort to inform the Respondent of this 13 obligation. 14 And specifically, for example, in the 15 matter of Metz, which was FAA Order 90-0003, the 16 administrator found good cause for a pro se 1 7 Respondent to have not filed an answer in a 18 timely fashion, specifically because the FAA had 19 not put the Respondent on any sort of notice 20 about the need to file an answer. However here, 21 the complaint filed by the FAA specifically did 22 inform the Respondent that it had an obligation

(202) 234-4433 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W WASHINGTON, D.C. 20005-3701 (202) 234-443317 1 to file an answer. 2 At the bottom, there is a note 3 pursuant to 14 CFR Section 13.209{a). A written 4 answer to a complaint must be filed no later than 5 30 days after the service of the complaint. 6 Not only did that notify the 7 Respondent of its obligation to file an answer, 8 but it provided the regulatory citation. As well 9 as the regulatory citation at the beginning of 10 the complaint that would permit the Respondent to 11 go examine those regulations, if the Respondent 12 had any questions about how that worked or what 13 the procedures for this case might be. 14 In these circumstances, good cause has 15 not been shown. While a pro se litigant is 16 certainly different from a litigant who has been 17 represented, which is why it's relevant, for 18 example, that we did notify him about the need to 19 file an answer. 20 Purely the fact that a Respondent is 21 pro se cannot provide good cause, when the 22 Respondent has already been put on notice of the

(202) 234-4433 NEALR. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202) 234-443318 1 need to file an answer. Thank you. 2 JUDGE SULLIVAN: Anything else you'd 3 like to say? 4 MR. STEVENSON: No, Your Honor. 5 JUDGE SULLIVAN: Okay. Thank you very 6 much. Let me just double check some dates. So 7 as I understand it, Mr. Stevenson, before I turn 8 to Mr. Kerzner, according to your calculations, a 9 timely answer would have been due on July 7, 10 2016? Is that your position? April 7, 2016, 11 excuse me. 12 MR. STEVENSON: That was my 13 calculation. 14 JUDGE SULLIVAN: Okay. The motion to 15 deem admitted was filed with this Court on April 16 25, 2016. Which was essentially, I have to get 17 out my mathematical brain. Eight days later. 18 And then according to some preliminary 19 remarks that Mr. Kerzner has made, he states that 20 he received the motion on or about May 2nd, 2016 21 and called Mr. Stevenson the same day. And then 22 on May 4, 2016 mailed his materials.

(202) 234-4433 NEAL R. GROSS COURT REPORTERS ANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202) 234-443319

1 Which the Court received on May 9, 2 2016. Which was approximately, I'm looking at.my 3 calendar, 32 days later. 4 Okay. Mr. Kerzner, let's turn to you. 5 I have before me your letter that says, among 6 other things, that you're not a lawyer. 7 MR. KERZNER: No, that's correct. 8 JUDGE SULLIVAN: And then you didn't 9 notice or know what to look for in a complaint. 10 Why don't you talk a little bit about that, and 11 any comment you would like to make regarding Mr. 12 Stevenson's oral argument. 13 MR. KERZNER: Yes. I didn't notice 14 their little note on the bottom of the last page. 15 And that would be the reason why I filed the 16 paper late. 17 But as soon as I did call him and he 18 19 20 21 22 told me where it was, and I sent in the paper saying that I didn't notice it, I thought it was just a that's little

(202) 234-4433regular court paper just to the note reason why I did not

on the bottom of the

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 look at. And notice that papers that

(202) 234-443320 1 said, you must do it in 30 days. 2 I have been back and forth with Mr. 3 Stevenson a few times, talking with him to try to 4 explain to me what's going on with these papers. 5 And until that day, when I got that other motion, 6 I did not realize I had to answer the one before 7 it. So that would be what happened. And as soon 8 as I realized it, I did. 9 JUDGE SULLIVAN: Okay. When you say 10 that you've been back and forth with Mr. 11 Stevenson, what does that mean? 12 Does that mean that you've met with 13 him or talked to him on the phone or had emails

- 14 15 MR. KERZNER: Yes. I spoke with him, 16 when I get the indivictual papers, to ask him 17 what's going on with them and what I should do 18 and what have you. 19 JUDGE SULLIVAN: Okay. And when you 20 say the individual papers, are you talking about 21 things that were, occurred prior to the matter 22 being referred to this Court?

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1 MR. KERZNER: Yes, and after they were 2 as well. 3 JUDGE SULLIVAN: Okay. 4 MR. KERZNER: After the first motion 5 and stuff I called him. 6 JUDGE SULLIVAN: Okay. So when you 7 got the complaint, you didn't call him right 8 away? 9 MR. KERZNER: No, I had spoken with 10 him beforehand. And I thought this was just the 11 formal paperwork that followed the complaint 12 itself. Which is why I didn't look for the 13 individual, you know, the little line that said, 14 you must answer this complaint. 15 JUDGE SULLIVAN: Okay. So when you 16 say that you talked to Mr. Stevenson before the 1 7 complaint was filed, do you remember when that 18 occurred? 19 MR. KERZNER: Not the exact date. I 20 had spoken with him a few times. As he would 21 send the papers, I would talk to him. 22

(202) 234-4433 JUDGE SULLIVAN: Okay.

NEAL R. GROSS COURT REPORTERSAND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W WASHINGTON, D.C. 20005-3701 Okay. All

(202) 234-443322

1 right, thank you very much. Anything else you 2 would like to add to your statement or anything 3 you would like to say in response to some of the 4 argument that Mr. Stevenson said? 5 MR. KERZNER: No. 6 JUDGE SULLIVAN: Okay. Mr. Stevenson, 7 this is your motion, you have the right of final 8 reply. Do you have anything else you would like 9 to add? 10 MR. STEVENSON: I would just confirm 11 Mr. Kerzner's representations of prior to the 12 complaint, we had a number of conversations. 13 After the issuance of the notice, some requests 14 for additional information. 15 And the issuance of the final notice 16 we, as he indicated, we did not have any 17 conversation after the filing of the complaint, 18 but before the filing of the motion to deem 19 admitted. 20 And then we did have a conversation, 21 at that time, about what the motion was. As he 22 said, he correctly indicated that I pointed out

(202) 234-4433 NEALR. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202) 234-443323 1 to him that we had sent him the complaint, that 2 his answer was needed. 3 And I noted for him that if he wished 4 to oppose the motion, he could file an opposition 5 to that. And then I recommended that if he was 6 going to oppose the motion, it would probably be 7 prudent to, as soon as possible, file the answer. 8 JUDGE SULLIVAN: Thank you for that. 9 And for also being prescient about what the Court 10 what need and what. 11 Anything else that you would like to 12 say, Mr. Stevenson? 13 MR. STEVENSON: No, Your Honor. 14 JUDGE SULLIVAN: Okay. Then I'm going 15 to thank you both for your materials and for the 16 oral argument that you've presented. 17 What I •m going to do is I •m going to 18 make a very short oral ruling on this matter and 19 then I'm going to follow it up with a written 20 order. So that the written order codifies and 21 probably talks in a little bit more detail about 22 the basis for the Court's ruling.

(202) 234-4433 NEALR. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202) 234-443324 1 So that it's available to both of you. 2 And if either one of you wanted to appeal the 3 ruling it would be there for you to do so. 4 I would agree with Mr. Stevenson that 5 the answer that was filed with the Office of 6 Hearings on May 9, 2016 by the prose litigant 7 was untimely. B I would also agree with the FAA that 9 it appears that there was service of the 10 complaint on or about March 3rd, 2016, with 11 receipt by the Respondent on or about March 7, 12 2016. 13 There's been no assertion by the 14 Respondent that the material attached to the FAA 15 motion, identified as Government Exhibit A and 16 Government Exhibit B, do not fully indicate 17 service to a proper mailing address. And there 18 has been no assertion by the Respondent that he 19 did not receive the complaint on or about March 20 7, 2016, as argued by the FAA. 21 It also appears undisputed by the 22 parties that the complaint did provide some

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1 warning language, regarding the Respondents 2 obligation to answer. And that that warning 3 language appears on Page 11, of the 11 page 4 compliant, directly beneath the FAA attorney's 5 certification of the pleadings and the date of 6 March 2nd, 2016. 7 I would agree with the FAA as well 8 that there is a well-established practice, in 9 these particular proceedings, that a litigant who 10 fails to file a timely answer cannot be allowed 11 to proceed, unless good cause has been 12 established for any untimeliness in its response 13 to a complaint. 14 However, I would disagree with the FAA 15 that good cause has not been established in this 16 particular case. I would note that there has 17 been a showing by Mr. Kerzner that he is not a 18 lawyer and that he missed the area where the 19 warning language was positioned in the FAA' s 20 complaint. And that due to his lack of legal 21 experience, lack of legal counsel, and 22 unfamiliarity with these proceedings, he did not

(202) 234-4433 NEAL R. GROSS COURT REPORTERSAND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. WASHINGTON, D.C. 20005-3701 (202) 234-443326 1 "notice or knew what to look for," pursuant to 2 the May 9, 2016 letter. 3 He has also demonstrated in the record 4 before the Court, that he has taken very prompt 5 action when he did know that he had an obligation 6 and a responsibility to respond. 7 I think it' s noteworthy that when he 8 received the FAA's motion to deem admitted, on or 9 about May 2nd, 2016, he immediately called Mr. 10 Stevenson, his friend across the aisle, spoke to 11 him about the motion. And then based on Mr. 12 Stevenson's proffer of information to him, Mr. 13 Kerzner then mailed to all parties in the Court 14 on May 4, 2016 both a letter regarding his good 15 cause for not filing a timely answer and an 16 answer itself. 1 7 It's also noteworthy that the answer 18 itself is fairly complete, unlike what the Court 19 sometimes sees, even from counsel. And that most 20 of the hearing on the merits would be narrowly 21 wrong based on the admissions by the pro se 22 litigant.

(202) 234-4433 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202) 234-443327 1 So I will find that good cause heard 2 and I will allow the Respondent to pursue this 3 particular action. With the understanding that 4 the answer is also accepted and that the answer 5 has definitively narrowed the issues for hearing 6 and for any potential private settlement 7 discussions the parties might wish to have. 8 Mr. Stevenson, before we continue, any 9 questions you would have about the Court's oral 10 ruling? 11 MR. STEVENSON: No, Your Honor. 12 JUDGE SULLIVAN: Okay. Mr. Kerzner, 13 same question to you, sir. 14 MR. KERZNER: No, Your Honor. 15 JUDGE SULLIVAN: Okay. Then let's 16 talk a little bit about the joint proposed 17 schedule. 18 Because the answer of the Respondent 19 has been accepted, it appears that there is a 20 narrowing of the issues substantially. To the 21 point of, when it looks to me from the answer, 22 we're talking about only a few of the allegations

(202) 234-4433 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE, N.W. WASHINGTON, D.C. 20005-3701 (202) 234-443328 1 being explained, in context. 2 Specifically, on Page 4 of the 3 complaint, Paragraphs 14 and 15. And on Page 8 4 and 9 of the complaint, Paragraphs, as in Sam, 5 through Y, as in yellow. 6 And these particular allegations in 7 the complaint appear to address, specifically, 8 hazmat training of the company's appropriate 9 personnel. 10 There's also an allegation that a 11 civil penalty of $69,000 is appropriate, and the 12 Respondent denies that as well. 13 So, Mr. Stevenson, since there's been 14 a substantial narrowing of the issues for 15 litigation, this next question, I think, is 16 whether you ought to take some time to talk 17 privately with Mr. Kerzner about potentially 18 resolving, if you have a potential settlement 19 range in mind, and postpone the litigation 20 scheduling conference. Or if you want to modify 21 what your expectations are for hearing itself 22 today, schedule a proposed hearing and all the

(202) 234-4433 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., NW. WASHINGTON, D.C. 20005-3701 (202) 234-443329 1 attendant pretrial deadlines, and then try and do 2 settlement as you go. 3 What do you think would work best for 4 your Client? 5 MR. STEVENSON: Well, I agree with 6 Your Honor on the principle of discussing 7 settlement. And Mr. Kerzner and I have discussed 8 this before and we can and I assume will discuss 9 it again. 10 However, based on our prior 11 discussions, I deem that there is too large of a 12 gap for that to be closed at this time. So I 13 would, my Client would prefer to proceed with the 14 scheduling. 15 I do believe that given the expected 16 scope of the hearing, that we could adjust the 17 schedule to proceed more quickly, if that was 18 compatible with the Court's availability. It was 19 written to have this length of time because I did 20 not believe that the Court would have 21 availability for the hearing scheduling for quite 22 some time.

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1 JUDGE SULLIVAN: Well, let's talk 2 about that then. And given the narrowing of the 3 scope of issues for hearing, how many witnesses 4 do you think you would need to present a prima 5 facie case on just those issues that still remain
6 outstanding? Which would include your proposed 7 civil penalty. 8 MR. STEVENSON: I would, at an actual 9 hearing, I would anticipate that we would have 10 one witness who would testify about the

11 applicability of some of the factual 12 underpinnings of the sanction determination of 13 referencing FAA Order 2150.3B, Appendix C. Which 14 contains our guidance on hazmat penalties. 15 If the training issue went to hearing, 16 I would anticipate that requiring one witness to 17 discuss the nature of the training that has been 18 provided, whether or not that was adequate. 19 Although it is my guess that whether or not 20 adequate training was provided will not be an 21 issue that survives the hearing. 22 If the Respondent is able to provide

(202) 234-4433 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W WASHINGTON, D.C. 20005-3701 (202) 234-443331 1 documentation showing the appropriate training 2 for everyone involved, then we would drop those 3 allegations. And if there is no documentation of 4 that training, I don't know if there would be an 5 issue to take to hearing. 6 JUDGE SULLIVAN: Okay. Let's say that 7 Mr. Kerzner does not have that paperwork to give 8 you and the issue remains for hearing and it 9 survives the summary judgment motion, for 10 example. Other than the one witness that you've 11 talked about, would you need more than one on the 12 issue of the training? 13 MR. STEVENSON: I would not need more 14 than one witness on the issue of the training. 15 It's possible that that would be the same witness 16 for both issues. 17 JUDGE SULLIVAN: Okay. 18 MR. STEVENSON: But that sort of 19 determination hasn't been made yet. 20 JUDGE SULLIVAN: So potentially two 21 witnesses. And how much time do you think you 22 would need for hearing, to make your prima facie

(202) 234-4433 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. WASHINGTON, D.C. 20005-3701 (202) 234-443332 1 case? 2 MR. STEVENSON: I don't believe even 3 a day. 4 JUDGE SULLIVAN: Okay. Well, there's 5 a lot of hours in a day. Can you tell me if it 6 would just be one day that you want to reserve or 7 a half day or three-quarters day? Give me a 8 sense, please. 9 MR. STEVENSON: In the interest of 10 caution, I would say a half day would be required 11 for me to present that evidence. 12 JUDGE SULLIVAN: Okay. And according 13 to your I'm going to look at your joint 14 proposed schedule very quickly. 15 Do you have a preference for a 16 location for the hearing? 17 MR. STEVENSON: Well, myself and my 18 witness

-- I'm presently in Atlanta. My witness 19 will likely be a specialist who is situated in 20 Atlanta. 21 However, I would normally expect if

-- 22 if the Respondent has witnesses to call, I would

(202) 234-4433 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. WASHINGTON, D.C. 20005-3701 (202) 234-443333 1 normally expect their location to override that. 2 Additionally, depending on the timing of the 3 hearing. 4 To the extent that my physical 5 location is relevant at all, I anticipate a 6 relocating from Atlanta to Washington in the 7 summer of 2017. 8 JUDGE SULLIVAN: Washington, D.C. or 9 the state of Washington? 10 MR. STEVENSON: I'm sorry, Your Honor, 11 Washington, D.C. 12 JUDGE SULLIVAN: Oh, is that right, 13 Mr. Stevenson? 14 MR. STEVENSON: Yes, Your Honor. 15 JUDGE SULLIVAN: Well, I look forward 16 to seeing you in person. 17 MR. STEVENSON: Yes. Yes, we should 18 have the chance to do that. I anticipate being 19 assigned fewer cases in the future due to change 20 of responsibilities. But I will continue on with 21 all the ones I presently have. 22

(202) 234-4433 JUDGE SULLIVAN: Yes.

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(202) 234-443334 1 obviously deviating from the case right now, when 2 I ask you this, Mr. Stevenson, but does this mean 3 that you are changing your job function? 4 MR. STEVENSON: Yes. I will still be 5 an attorney in the enforcement division, but my 6 job functions will more focus on policy and 7 appellate work. And less on initial litigation. 8 JUDGE SULLIVAN: And this means you'll 9 be, and forgive me and I don't mean to be nosy, 10 but does this mean that you'd be moving up here 11 as a permanent assignment? 12 MR. STEVENSON: Yes. 13 JUDGE SULLIVAN: I'll be darned. 14 Well, congratulations. 15 MR. STEVENSON: Thank you, Your Honor. 16 JUDGE SULLIVAN: Yes. I presume it's 17 a preference for you. 18 MR. STEVENSON: Yes. It was an 19 employee requested reassignment, I believe is our 20 lingo for that. 21 JUDGE SULLIVAN: Okay. All right. 22 Well, I look forward to that. And you'll have to

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1 keep me apprised as to when you're coming up. 2 MR. STEVENSON: I'll do that, Your 3 Honor. 4 JUDGE SULLIVAN: Thank you. Mr. 5 Kerzner, just so that you know, Mr. Stevenson has 6 been appearing before this Court, before many of 7 the judges here, for many years. But I think 8 I've only meet him twice, if I recall correctly. 9 Mr. Stevenson, do you recall? 10 MR. STEVENSON: I believe that's 11 correct, Your Honor. The Liberty Foundation 12 hearing and the Pennywitt hearing. 13 JUDGE SULLIVAN: That's correct. So 14 I've only meet Mr. Stevenson twice. And often 15 times with these particular kinds of cases, 16 that's very typical. 17 So I've had people appear before me on 18 many different cases and yet I have never met 19 them. So it's unusual to have a chance to see 20 someone more than once or twice in a five to ten21 year period. 22 But having explored Mr. Stevenson's

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1 new career, Mr. Kerzner, I'm going to turn to you 2 and I'm going to ask you a couple questions about 3 your side of the case. 4 Assuming, sir, that no settlement ever 5 occurs in this case, and sometimes they do and 6 sometimes they don't, how many witnesses do you 7 think you would be calling on your Client's 8 behalf, in response to the FAA's case? 9 And if I'm going too fast and you need 10 me to explain what I'm talking about, just stop 11 me and ask because I'm happy to explain. 12 MR. KERZNER: No, I think I understand 13 what you're asking. I would probably be calling 14 just one person, who trains all the people here, 15 for my hazmat training. 16 JUDGE SULLIVAN: Okay. And what about 17 who you would call for the fine portion of the 18 case? 19 For say that the FAA wants to 20 continuing saying that it believes the most 21 appropriate penalty is $69,000 and you want to 22 keep saying, no it's not, who would you be

(202) 234-4433 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202) 234·443337 1 calling on behalf of the company to explain why 2 that fine is not acceptable? 3 MR. KERZNER: Myself. 4 JUDGE SULLIVAN: So that's a second 5 witness. 6 MR. KERZNER: Yes. 7 JUDGE SULLIVAN: And just so you know, 8 and we'll probably be talking about this again, 9 there are a variety of different ways that people 10 respond to a proposed fine. And sometimes I have 11 Respondents say to me, I can't afford the amount 12 of money that the FAA is proposing. 13 That particular response is called an 14 affirmative defense. It means that you have to 15 present that defense, not only by saying it, but 16 by proving it

. And you prove it by providing 17 documentation of your inability to pay. 18 MR. KERZNER: Okay. 19 JUDGE SULLIVAN: And there are people 2

### o that don't like to do that because they don't 21 want anybody to know what their financial status 22 is. And that's certainly your choice.

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1 But if you choose not to provide 2 documentation to support that argument, there is 3 ample case law, in this particular area of the 4 law that says I have to find you did not make 5 your burden of proof. Because you are the only 6 one who has access to that documentation. And if 7 you choose not to share it, I can't find on your 8 behalf. 9 So any questions about that? Just 10 preliminarily. 11 MR. KERZNER: No. 12 JUDGE SULLIVAN: Okay. So again, many 13 different ways to challenge the proposed fine, if 14 that's what you want to do. But one of those 15 ways, which is saying you can't afford it, has to 16 be presented with documentary support. 17 If you don't have the documentary 18 support, that particular defense of not being 19 able to pay will not win. 20 All right. So how much time do you 21 think it will take your Client to present that 22 side of the case? Would it be a half day, a day

(202) 234-4433 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202) 234-443339 1 or some other period of time? 2 MR

. KERZNER: Well I think a half a 3 day would be more than adequate. 4 JUDGE SULLIVAN: Okay. And my 5 understanding, from looking at the record, is 6 that your Client is currently located in Tampa, 7 Florida? 8 MR. KERZNER: That is correct. 9 JUDGE SULLIVAN: Okay. Is that where 10 your witnesses are located as well? 11 MR. KERZNER: Yes. Very close to 12 here. Yes. 13 JUDGE SULLIVAN: When you say very 14 close to here, what does that mean? 15 MR. KERZNER: In Orlando is where the 16 trainer is, but he comes to our location to 17 train. So if I needed him he would come here to 18 our location. 19 JUDGE SULLIVAN: Okay, thank you. 20 Okay. All right. Why don't I do this. Mr. 21 Stevenson, in terms of venue, I'm going to set 22 venue in Tampa, Florida.

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1 You're absolutely correct in 2 acknowledging that venues typically are set where 3 the Respondent is located and where the incident 4 is likely to have occurred. And as I recall, I'm 5 looking at the regulation. 6 I think there's a regulation. I know 7 there is, excuse me. 14 CFR 13.221, Subsection 8 B. We're talking about the venue. 9 Tampa seems to have worked in the past 10 for other different cases. It's served by 11 scheduled air carrier. Right where the 12 Respondent is located and at least two of the 13 witnesses. So I'm going to set it in Tampa, 14 Florida. 15 Let's talk then about what discovery 16 is actually needed. Mr. Stevenson, you had 17 talked a little bit about potentially getting 18 some documentation from the Respondent, showing 19 that individuals who handle hazmat have received 2 O training. 21 How much other discovery do you think 22 would the FAA need to conduct, prior to a hearing

(202) 234-4433 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. WASHINGTON, D.C. 20005-3701 (202) 234-443341 1 being held? 2 MR. STEVENSON: I don't believe we 3 would have much additional discovery. 4 Although, so I don't forget, I wanted 5 to clarify where we're at, to something I said 6 earlier. Your Honor asked the Respondent about 7 the possibility of an ability to pay affirmative 8 defense. 9 JUDGE SULLIVAN: Yes. 10 MR. STEVENSON: Assuming that the 11 Respondent did proceed with that, that may add 12 someone else that the FAA would call to testify, 13 assuming that that issue could not be determined 14 based on our written submissions from an 15 accounting analysis. So I don't know if that 16 would affect anything that Your Honor has 1 7 decided, but we don't have documentation about 18 that so far, but that's another potential 19 witness. 20 JUDGE SULLIVAN: Okay. 21 MR. STEVENSON: But as far as the 22 discovery goes, I would honestly anticipate a

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1 number of interrogatories and/or requests for 2 admission, that are on certain aspects of how the 3 FAA determines sanctions, so we can find out if 4 there are factual disputes about the basis for 5 the sanction or if the Respondent only disagrees 6 with the final conclusions and analysis that are 7 made, based on, for example, for sanction 8 purposes, we put different hazmats in different 9 wave categories, based on the potential threats 10 that they pose. And the nature of what I have to 11 present at hearing would vary depending on 12 whether or not the Respondent disagrees with 13 that. 14 I don't anticipate, I don't think that 15 there would be depositions necessary. I suppose 16 it's possible that we have to do something 17 regarding the training, but I think that will be 18 results or interrogatories in request to 19 production. 20 JUDGE SULLIVAN: Okay. Okay. Mr. 21 Kerzner, let's talk to you about the same thing. 22 And we may have been talking about ancient Greek

(202) 234-4433 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLANDAVE., N.W WASHINGTON, D.C. 20005-3701 (202) 234-443343 1 or you may have followed along just fine. 2 Can you tell me if you know what I'm 3 talking about when I talk about discovery? 4 MR. KERZNER: Not exactly. But I'm 5 assuming that it's when you're trying to find out 6 information. 7 JUDGE SULLIVAN: That's actually right 8 on point. Yes. Discovery is that period of 9 litigation practice that precedes a hearing. 10 During that discovery period, the parties 11 exchange information, ask for information and 12 provide information. 13 And part of that is to allow you to 14 discover what the other side knows or believes 15 and to prepare to respond to that. Or, in gentle 16 surprise, agree to it. 17 It allows you both an opportunity to 18 learn more about each other's position and see, 19 in part, where you're close or where you agree. 20 And when you disagree, why you disagree, so that 21 you can present your best showing at the hearing. 22

(202) 234-4433 Any questions about that before I

NEAL R. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. WASHINGTON, D.C. 20005-3701 (202) 234-443344 1 continue? 2 MR. KERZNER: No. 3 JUDGE SULLIVAN: Okay. When Mr. 4 Stevenson says that he wants to do some 5 interrogatories, interrogatory is a very special 6 name for written question. And interestingly, 7 interrogatories have been used by lawyers in 8 court cases since the time of Elizabeth I in the 9 1500's, so they're a well-known discovery tool. 10 Requests for admission is another 11 written tool that lawyers use. And it's 12 basically asking you and your Client to look at 13 certain questions and either agree or disagree. 14 And if you agree, it takes the matters off the 15 table. 16 MR. KERZNER: Okay. 17 JUDGE SULLIVAN: Depositions are a form 18 of sworn testimony that is taken prior to a 19 hearing, in which you have a court reporter 2 0 appear with the witness and the attorneys or 21 representatives at a location that is mutually 22 convenient, typically.

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1 And the person who has scheduled the 2 deposition asks questions of the witness. And 3 typically they're asking questions of the witness 4 that is going to be called by the other side, 5 because they don't need to have such formality if 6 they're going to be talking to their own witness 7 privately. 8 A deposition can provide a tremendous 9 amount of useful information to a party. And 10 it's most often used with expert witnesses. But 11 that doesn't mean that it can't be used for lay 12 witnesses or fact witnesses as well. 13 What you heard Mr. Stevenson say just 14 a few moments ago is he didn't think that in this 15 particular case, he would need to take 16 depositions, but he is keeping the door open for 17 it. Any questions about that so far? 18 MR. KERZNER: No. 19 JUDGE SULLIVAN: Okay. In terms of 20 not only discovery, what kinds of information or 21 discovery do you think you need to have from the 22 FAA in order to learn more about its side of the

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1 case and to help you prepare for hearing, if this 2 case goes to hearing? 3 Do you have any idea about that right 4 now? 5 MR. KERZNER: I really don't have any 6 idea, but I'm not sure I would need much from
7 them. I mean what their motion is, you know, is 8 pretty much what they're asking is really for me 9 to prove that I have the training and to accept 10 the fact that I did these wrong and take a fine 11 for it. And so I mean I don't really know what I 12 would be asking them for. 13 JUDGE SULLIVAN: Well, you might, and 14 it's not for me to give you advice, but if you 15 don't understand how they came up with $69,000, 16 you might ask them. 17 MR. KERZNER: Okay. 18 JUDGE SULLIVAN: If you don't 19 understand certain things that they're alleging 20 in their complaint, you ask them. And typically 21 you ask them, either by a written request. 22 And you don I t have to call it an

(202) 234-4433 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202) 234-443347 1 interrogatory or a request for admission, you can 2 simply ask for information by letter, if that's 3 your comfort zone. 4 MR. KERZNER: Okay. 5 JUDGE SULLIVAN: There are time limits 6 for responding to requests for discovery. So if 7 you get a request from Mr. Stevenson, typically 8 you respond within 30 days or less. 9 If you have objections to a request 10 for discovery, you first talk to Mr. Stevenson 11 about it. And if you cannot resolve the dispute 12 informally, then you come to the Court with that 13 dispute. 14 And I will be sending out a litigation 15 procedural order that talks about that. And I'll 16 also add the name and phone number of my judicial 17 assistant, Ms. Rachel Brown, included in the 18 order. So that if something comes up and either 19 you or Mr. Stevenson have questions, you can call 20 her for procedural questions. 21 Or you can call her and ask her to 22 schedule something on my calendar, if you need to

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1 come before me again. And then the information 2 about how to do that or how to do some other 3 things as well. 4 So let I s talk about a dispositional 5 schedule because I always put in dispositional 6 schedules for the parties. 7 And let's talk a little bit about the 8 proposal that's before me. I Im happy to adopt 9 the June 23rd, 2016 deadline for initial 10 disclosures. 11 And, Mr. Kerzner

-- 12 MR. KERZNER: Yes. 13 JUDGE SULLIVAN: Mr. Stevenson is 14 certainly capable of giving you some procedural 15 information, and it's wonderful that he's doing 16 that, but he is not your attorney and he cannot 17 give you advice. He's advising his own Client. 18 So when you see the Court talking 19 about initial disclosures or you see reference to 20 rules in the court orders, that's information 21 that gives you an opportunity to look things up 22 on your own.

(202) 234-4433 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., NW. WASHINGTON, D.C. 20005-3701 (202) 234-443349 1 So initial disclosures are things that 2 are talked about in the rules of civil procedure. 3 Which this Court uses as instructional guidance. 4 And initial disclosures include, 5 basically telling Mr. Stevenson the address and 6 phone number of anyone that you believe has 7 information about the case. Either for or 8 against you, that you think Mr. Stevenson should 9 have access to. 10 It also requires you to give a copy or 11 a description of all the documents and tangible 12 things that you have in your possession that may 13 be used to support your claims. And that speaks 14 specially to the information about training. 15 Training information that you may have in your 16 possession that will show that everybody was 17 trained. 18 Initial disclosures also requires a 19 computation, providing a computation of what is 20 described as damages. In this case, it probably 21 would be equally applicable to the proposed fine 22 adjusted.

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1 And it's equally applicable to any 2 documents that the Respondent has to show that 3 perhaps the fine is too high. 4 So you're supposed to be giving each 5 other as much information up front, without any 6 request, as possible. And there's been a 7 proposal that that be done by June 23rd, 2016. 8 Which is two weeks away. 9 Mr. Kerzner, is that still a good date 10 for you? 11 MR. KERZNER: Yes, that's a fine date. 12 A question on the sending. Would I send this 13 information directly only to Mr. Stevenson or 14 should I send it to the Court as well? 15 JUDGE SULLIVAN: Just to Mr. 16 Stevenson. 17 MR. KERZNER: Okay. 18 JUDGE SULLIVAN: The reason you do 19 that is because often times discovery requests 20 and answers are not utilized at trial. So you 21 can engage in a very wide range exchange of 22 information between the two of you, that I' 11

(202) 234-4433 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. WASHINGTON, D.C. 20005-3701 (202) 234-443351 1 never know anything about. 2 And that helps you not only learn a 3 lot about each other's position, it also helps 4 you with settlement discussion. And you don't 5 have to let me know about any of that. 6 MR. KERZNER: Okay. 7 JUDGE SULLIVAN: So with that, I will 8 also adopt the July 7, 2016 date for general 9 discovery. General discovery being where you 10 start to initiate written discovery, where you 11 start to propound written questions, requests for 12 admission, depositions, that kind of thing, to 13 each other. 14 If there are expert disclosures, I'll 15 ask the parties to exchange that information on 16 August 22nd, 2016 for joint proposal. I'm also 17 going to ask the parties to exchange expert 18 rebuttal reports, if any, on or before September 19 6, 2016. 20 Now, Mr. Stevenson, you have a 21 deposition period that's fairly short. I 2 2 general1 y don't add those in and I 'm not quite

(202) 234-4433 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202) 234-443352 1 sure whether it's necessary in this particular 2 case. 3 So let's put that for the moment, and 4 then let's talk about the December 19, 2016 close 5 of general discovery. I'm happy to accept that. 6 You have two different dates. January
7 19, 2017 and December 19, 2016. When you do 8 that, Mr. Stevenson, let me ask you this. What 9 kind of disputes are you talking about that you 10 think would be addressed between December 19, 11 2016 and January 19, 2017? 12 MR. STEVENSON: Well, for example, 13 Your Honor, if someone issued a written discovery 14 request on November 3rd, the other party would 15 have 30 days to respond, possibly with extra 16 days, depending on the nature of the service. 17 And so their response to that 18 discovery would not be due until very shortly 19 before December 19th. And if there was any sort 20 of issue that the requesting party had with that 21 response, or a lack of response, then that would 22 be something that the parties could discuss and

(202) 234-4433 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. WASHINGTON, D.C. 20005-3701 (202) 234-443353 1 then potentially file motions on, in that period 2 from December 19 to January 19. 3 JUDGE SULLIVAN: Okay. I'm looking at 4 this. How about if we say that December 19, 2016 5

-- that doesn't work either. I understand what 6 you're trying to do. 7 I 'm going to accept the December 19, 8 2016 date for close of general discovery. I'm 9 not quite sure that I can adopt the January 19, 10 2017 deadline. I may not. But I'm going to be 11 thinking about that for possibly changing 12 procedural order. 13 I wi11 accept the February 16, 2O1 7 14 date for filing dispositive motions, as well as 15 the March 2nd, 2017 date for the response and the 16 March 15 date for reply. 17 Let's talk about April 2017 for 18 setting a telephone motion conference. And to do 19 that, I'm going to ask the parties to take a look 20 at their calendars in April 2017. And I'm going 21 to get there myself. 22 So starting with you, Mr. Stevenson,

(202) 234.4433 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE, N.W. WASHINGTON, D.C. 20005-3701 (202) 234-443354 1 is there a particular blackout time in April 2017 2 that I should just not look at? 3 MR. STEVENSON: I guess the only 4 specific blackout times I would request that the 5 Court not schedule it on Good Friday, on the 6 14th. 7 JUDGE SULLIVAN: Okay. 8 MR. STEVENSON: That's it. 9 JUDGE SULLIVAN: And, Mr. Kerzner, 10 same question to you. Do you have any blackout 11 dates in April 2017? 12 MR. KERZNER: No, I'm completely open 13 right now. 14 JUDGE SULLIVAN: Okay. Then let's 15 talk about, I have some hearings. I have a 16 hearing in California in March. The week of 17 March 13th. And a hearing in Florida the week of 18 March 20th. And I want to make sure I have 19 enough time to read your materials. 20 So let's try for April, let's say 21 April 12, 2017. Mr. Stevenson, do you prefer the 22 morning or the afternoon for summary judgment

(202) 234-4433 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202) 234-443355 1 motion? 2 MR. STEVENSON: This is April 12th, 3 Your Honor? 4 JUDGE SULLIVAN: Correct. It's a 5 Wednesday in the month of April 2017. 6 MR. STEVENSON: I would prefer the 7 afternoon. 8 JUDGE SULLIVAN: Mr. Kerzner, same 9 question to you, sir. 10 MR. KERZNER: Either one. The 11 afternoon is fine with me. 12 JUDGE SULLIVAN: Okay. Let's plan on 13 1:30 p.m. to 3:00 p.m. That's 90 minutes. We 14 may not need all 90 minutes, but once it's set 15 then we have it preserved on our calendar. 16 And that will be for the summary 17 judgment motion, if any is filed. And if it's 18 not, there are no motions, we'll still hold the 19 telephone conference as a pre-hearing status 20 conference. 21 So let's talk then about scheduling 22 the hearing. In Tampa, Florida, it's going to be

(202) 234-4433 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. WASHINGTON, D.C. 20005-3701 (202) 234-443356 1 hot. Mr. Stevenson, how about sometime in, let's 2 try for August 2017. 3 And if we do, well, I guess we can do 4 September too. Do you want to try for an August 5 or September hearing date? Because I can do it 6 before October. 7 MR. STEVENSON: August or September in 8 general is not a particular concern. I will be 9 unavailable from August 16th through 21st. 10 Additionally, we're talking right at 11 the end of August or right at the beginning of 12 September, it's my understanding that that is the 13 beginning of school

-- 14 JUDGE SULLIVAN: Okay. 15 MR. STEVENSON: in D.C. and 16 Maryland area since we' 11 just have moved to a 17 new school. In an ideal universe, I wouldn't 18 have a hearing during those weeks. But I also 19 understand that that is not the same thing as a 20 hard conflict, if that's the time the Court has 21 available. 22

(202) 234-4433 JUDGE SULLIVAN: You know, I'm just

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1 looking at my calendar. I'm happy to look at 2 what so if October is preferable for the 3 parties, I'm happy to look in October. 4 Mr. Kerzner, let's talk to you about 5 the August, September, October timeframe 2017. 6 Do you have any strong preference? 7 MR. KERZNER: No, I don I t have any 8 strong preference. My calendar is open. I can 9 accommodate whenever I need to. 10 JUDGE SULLIVAN: So let's talk then 11 about the week of, say October 15, 2017. Mr. 12 Stevenson, starting with you. Does that look 13 like an optimal time? 14 MR. STEVENSON: No, I have no 15 conflicts with that time, Your Honor. 16 JUDGE SULLIVAN: Okay. Same with you, 17 Mr. Stevenson. I think we should schedule this 18 for a day and a half, just to be on the safe 19 side, if you have three witnesses as opposed to 20 two. What day would you like to start in the 21 week of October 15, 2017? 22

(202) 234-4433 MR. STEVENSON: Tuesday would be my

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. WASHINGTON, D.C. 20005-3701 (202) 234-443358 1 default. Preferably not Monday. 2 JUDGE SULLIVAN: Okay. Mr. Kerzner, 3 turning to you, would Tuesday, October 17, 2017 4 work for you? 5 MR. KERZNER: Yes. 6 JUDGE SULLIVAN: Okay. Let's start on 7 Tuesday, October 17, 2017 and we'll end on 8 Wednesday, October 18, 2017 in Tampa, Florida. 9 Folks, just so you know, I will not be 10 getting a courtroom right away in Tampa, Florida. 11 In part because the district courts don't 12 schedule out that far for visiting judges. 13 But I will be getting a courtroom in 14 Tampa, Florida, probably sometime around the 15 period of time the summary judgment motion is 16 scheduled. so I 1 11 be able to talk to you a 17 little bit more in depth about that in April 18 2017, when we connect for our telephone 19 conference. 20 But you can plan on Tampa, Florida for 21 all your witnesses, as you talk about this 22 privately.

(202) 234-4433 So Monday, October 17, 2017 is the

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. WASHINGTON, D.C. 20005-3701 (202) 234-443359 1 travel day, as well be either the afternoon of 2 October 18, 2017 or the following day, October 3 19, 2017. Depending on your travel schedule. 4 So with that, I will accept the 5 parties' recommendation for September 12, 2017 6 for the deadline of witness lists and exhibits to 7 be exchanged, as well as September 26, 2017 to 8 file any agreed stipulations or motions in 9 limine. 10 And let's see if there's anything else 11 I want to chat with you folks about. The 12 deposition period. 13 I'm happy to adopt this particular 14 schedule for deposition, at this time. But I'll 15 simply say to the parties that I'm also happy to 16 hear from you, if you need to have some amendment 17 from that schedule. 18 So if you need to change it or tweak 19 it, please let me know and we can always tweak 20 the deposition dates of August 29, 2016, 21 September 20, 2016 and October 20, 2016 that 22 appear on Page 1 of the two-page joint proposed

(202) 234-4433 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. WASHINGTON, D.C. 20005-3701 (202) 234-443360

1 schedule. 2 With that, Mr. Stevenson, starting 3 with you, is there anything else that we need to 4 address for your Client today? 5 MR. STEVENSON: No, Your Honor. 6 JUDGE SULLIVAN: Okay. Mr. Kerzner, 7 same question to you, sir. 8 MR. KERZNER: No, Your Honor. 9 JUDGE SULLIVAN: Okay. I'm also 10 simply going to note that in the litigation 11 procedural order that I'll issue, there will be 12 some information about how to schedule motions or 13 pre-hearing conferences on my calendar and how to 14 mark exhibits at the hearing, how to do 15 examinations at the hearing, those kinds of 16 things. 17 At any time, if you have a question, 18 please feel free to contact my judicial 19 assistant, Ms. Brown. And her name and phone 20 will be at the very last page of this procedural 21 order, which typically is about five pages long. 22 I'm also encouraging the parties to

(202) 234-4433 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W WASHINGTON, D.C. 20005-3701 (202) 234-443361
1 contact me if you have some preliminary discovery 2 disputes. I'm trying to experiment right now 3 with informal discovery discussion.
4 Which has been, it's being utilized 5 recently by certain U.S. district court trial 6 judges. Where the parties, if they have a 7 discovery dispute, instead of filing written 8 motions, will contact the court for a very brief 9 telephone conference and see if there's a 10 resolution that can be had, without going through 11 the expense of filing a formal motion. So I will 12 include that in this particular order as well, in 13 case the parties need it. 14 With that it appears oh, and, Mr. 15 Stevenson, any question about that? 16 MR. STEVENSON: No, Your Honor. 17 JUDGE SULLIVAN: Okay. Mr. Kerzner, 18 any question about that? 19 MR. KERZNER: No, Your Honor. 20 JUDGE SULLIVAN: Okay. Mr. Kerzner, 21 since you're representing your company and this 22 is new to you, is there anything else that the

(202) 234-4433 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. WASHINGTON, D.C. 20005-3701 (202) 234-443362 1 court can address for you or any question that 2 you might have that I can answer, before we close 3 today? 4 MR. KERZNER: Not right now, Your 5 Honor. 6 JUDGE SULLIVAN: Okay. Then I will 7 thank you and Mr. Stevenson for your assistance 8 today. I'll wish you the best of luck in your 9 negotiations and discovery exchange. I look 10 forward to talking with you again in 2017. With 11 that, we can go off the record and I'll wish you 12 all a 13 14 15 16 went off 17 18 19 20 21 22

(202) 234-4433 thank you. MR. STEVENSON: Thank you. MR. KERZNER: Thank you.

(Whereupon, the above-entitled the record at 11:13 a.m.)

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. WASHINGTON, D.C. 20005-3701 matter

(202) 234-4433A

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C E R T I F I C A T E

This is to certify that the foregoing transcript

In the matter of: Premiere Nail Source

Before: DOT/OH

Date: 06-09-16

Place: teleconference

was duly recorded and accurately transcribed under my direction; further, that said transcript is a true and accurate record of the proceedings.

(202)234-4433 Court Reporter

NEAL R. GROSS COURT REPORTERSANDTRANSCRIBERS 1323RHODE ISLANDAVE,, N,W, WASHINGTON, D,C, 20005-3701 Ww.N.nealrgross.com