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IN THE UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

GRANT BIRCHMEIER, et al.,

Plaintiffs,

vs.

CARIBBEAN CRUISE LINE, INC.,

et al.,

Defendants.

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Docket No. 12 C 4069

Chicago, Illinois

March 7, 2014

1:00 p.m.

TRANSCRIPT OF PROCEEDINGS

BEFORE THE HONORABLE MATTHEW F. KENNELLY

APPEARANCES:

For the Plaintiff: LOEVY & LOEVY

BY: MR. SCOTT R. RAUSCHER

312 North May Street, Suite 100

Chicago, Illinois 60607

EDELSON LLC

BY: MR. RAFEY S. BALABANIAN

MS. EVE-LYNN J. RAPP

350 North LaSalle Street

Suite 1300

Chicago, Illinois 60654

For the Defendant: GREENSPOON MARDER, P.A.

BY: MR. JEFFREY BACKMAN

MR. RICHARD W. EPSTEIN

200 East Broward Boulevard

Suite 1500

Fort Lauderdale, Florida 33301

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MC GUIRE WOODS, LLP

BY: MR. BRIAN P. O'MEARA

77 West Wacker Drive

Suite 4100

Chicago, Illinois 60601

LAURA M. BRENNAN - Official Court Reporter

219 South Dearborn Street - Room 2102

Chicago, Illinois 60604

(312) 435-5785

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(The following proceedings were had in open court:)

THE CLERK: Case 12 C 4069, Birchmeier v. Caribbean

Cruise Line.

MR. RAUSCHER: Good afternoon, your Honor; Scott

Rauscher on behalf of the plaintiffs.

MS. RAPP: Good afternoon, your Honor; Eve-Lynn Rapp

on behalf of plaintiffs.

MR. BALABANIAN: Good afternoon, your Honor; Rafey

Balabanian on behalf of plaintiffs.

MR. EPSTEIN: Richard Epstein on behalf of Caribbean

Cruise Line and Vacation Ownership Marketing Tours.

MR. O'MEARA: Good afternoon, your Honor; Brian

O'Meara on behalf of the defendant, The Berkley Group.

MR. BACKMAN: Jeffrey Backman, also on behalf of

Caribbean Cruise Line and Vacation Ownership Marketing Tours.

THE COURT: Have you figured out who is going to go

first and second?

MR. EPSTEIN: We have discussed allocating our time,

yes.

THE COURT: So the defendants are going to go first,

and the plaintiff as the moving party goes last. So you get

15 minutes. Anybody who is not talking can sit down. The

clock is running.

So what I want you to start off is by commenting on

the evidence that is discussed in the reply, the list of

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170,000 people and the other lists that are talked about there

in terms of the ascertainability issue.

MR. EPSTEIN: Okay. That list of 179, they say it's

179,000. Our count is less, but it's still over a hundred

thousand because there's a lots of calls that do not seem to

be traceable. Those are calls that were actually completed.

Those are calls that pretty much are identifiable as having

been generated by one of the ESG calls.

THE COURT: So the class is ascertainable at least to

that extent.

MR. EPSTEIN: Basically, yes. I mean, I wasn't

willing to come in here and concede that. They also point to

a list that has 280 telephone numbers that's identifiable. I

think that's the third or fourth bullet point.

THE COURT: 280?

MR. EPSTEIN: 280.

THE COURT: I don't think --

170,000 or a hundred thousand, even if it's a hundred

thousand, that's a lot of people.

MR. EPSTEIN: It is.

THE COURT: So the class is ascertainable at least to

that extent.

MR. EPSTEIN: We haven't drilled down on the

mechanics of doing this.

THE COURT: You just said yes a second ago, and I

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gave you a second chance.

MR. EPSTEIN: But we believe that the technology

exists that you would be able to trace those calls back. And

that is one of the points I wanted to make is that normally

when you are dealing with these kinds of issues, the plaintiff

comes forth with a plan to actually be able to identify who

the members of the class are. That's missing here.

THE COURT: Well, the reason it's missing is that the

people who were making the calls didn't keep very good records

apparently or any records, right?

MR. EPSTEIN: That appears to be the case.

THE COURT: Okay. So we're going to get back --

MR. EPSTEIN: But we weren't those people.

THE COURT: Well, but there's at least evidence your

people hired the people who hired those people --

MR. EPSTEIN: We hired --

THE COURT: -- a link or two.

MR. EPSTEIN: We hired them.

No. We entered into an arrangement with them where

they were making calls regardless of whether they had any

arrangements with us. We were providing an incentive to

induce their -- to improve the responsiveness of their

program. They testified, Mr. DeJongh testified.

THE COURT: If you want to spend your 15 minutes

talking about liability, I'm happy to do that. But, I mean,

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is it really the contention that if I hire somebody to go do

something and then I kind of do this and turn away and they go

do something that's illegal that I'm not responsible for it?

MR. EPSTEIN: Well, your Honor, I don't want to

debate that issue. I don't want to debate liability.

THE COURT: You don't have to. You just have to

answer my question. You don't have to. You just have to

answer my question. So I just asked a question. What is the

answer?

MR. EPSTEIN: The answer to your question is no

because you're using the wrong term. We didn't hire them. We

have a contract with them. They were doing what they were

doing regardless. So as long as you use the right --

THE COURT: So you enter into a contract with

somebody to --

MR. EPSTEIN: We're not denying that there was

potential exposure. We're not denying that.

THE COURT: Just tell me when I can get a whole

question out so I --

MR. EPSTEIN: Please.

THE COURT: Okay. So you contract with somebody to

do marketing for you. They go out and do marketing for you

pursuant to the contract and they do something that is

illegal. You're saying that under the TCPA, you're not

responsible for that? If that's all true, you're not

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responsible for it.

MR. EPSTEIN: We're not conceding liability or

conceding that anything was done illegal.

THE COURT: What would be the argument that you're

not responsible for it?

MR. EPSTEIN: Well, primarily is if they didn't do

anything illegal.

THE COURT: No, but let's say they did do something

illegal. You have a contract; you turn the other way. You

don't have anything to do with what they're doing. And then

they go out pursuant to your contract and do something that is

illegal under the TCPA. Is there some scenario under which

you, as the contracting party, wouldn't be liable if you

assume the facts that I have just described?

MR. EPSTEIN: Under a strict statutory construction

view which other courts, albeit not yourself, but other courts

have ascribed to, if the party did not make or initiate the

call, they are not liable. We have cited in other --

THE COURT: What about the FCC regs?

MR. EPSTEIN: The FCC, it's not a regulation. It's a

finding, and the regs don't speak to vicarious liability.

They have a pronouncement.

THE COURT: That's actually worse you for you, isn't

it? Isn't this one of these statutes where this thing called

the Hobbs Act applies?

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Maybe I'm wrong. I think there is something about

the law in this area where an FCC interpretation in a ruling

is binding on district courts under the Hobbs Act. If you

have a problem with it, you actually have to go to the Court

of Appeals, and our Court of Appeals has said I can't even

touch that.

MR. EPSTEIN: You're obligated under that legal

principle to give deference to their interpretation, statutory

interpretation, of the statute under the regulations. The

regulations have the effect of law.

THE COURT: So let's get off of that --

MR. EPSTEIN: Let's get off of that.

THE COURT: -- because I actually have other

questions that I want to use the remainder, at least some of

the remainder of your time on.

MR. EPSTEIN: We were allocated --

THE COURT: I don't know -- I don't believe that I

understand what the status of the list of 2 million is, okay.

So there is something about 2 million calls that were

transferred to CCL, and the argument that is made on the

defense side is that isn't really relevant to anything. And I

guess my question about that is: Isn't that a subset of the

recipients of calls?

MR. EPSTEIN: Potentially in part. The testimony is,

and this is undisputed, that those 1.9 million transfer calls

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include other sources. There were other programs, other outbound calling sources, that Caribbean Cruise Line used other

than Mr. DeJongh.

THE COURT: So they're not all necessarily from this.

MR. EPSTEIN: It's not all from this. That's the

testimony.

THE COURT: Okay.

MR. EPSTEIN: Some definitely will be.

And as you pointed out, 179,000, which would be

included within that 1.9 million, definitely are traceable.

THE COURT: Okay. And then the third thing I wanted

to ask about is this question about the proposition that not

all of the calls were political survey calls, not all of the

alleged calls were phony political survey calls, okay. Tell

me how that fits into this.

MR. EPSTEIN: Two different issues. There were --

Not all of Mr. DeJongh's calls were overtly

political. Some dealt with social issues; some dealt with

societal, you know, those kind of issues, where there is a

distinction under the First Amendment political speech

exception to the subset here of calls to residential telephone

lines. There's basically a noncommercial or political speech

kind of exception that would exempt those calls from the TCPA.

The question is to what -- what is the breadth of that

particular exception?

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And then the other part is what we were talking about

just 30 seconds ago, and that is other calling programs that

Caribbean Cruise Line had provided its free cruise

certificates as incentives that were done by completely

different people that had nothing to do with ESG. Those were

political; those were social. You know, they could be talking

about, you know, social policy issues, a variety of different

things.

THE COURT: Okay. What else would you like to tell

me?

MR. EPSTEIN: Your Honor, I think we'll circle back

to kind of where you started with 179,000 and what is

basically wrong with that. This case -- I think it's

noteworthy that this case started with hysterical ranting by

the plaintiffs about scams and shell companies, you know, and

straw men that Caribbean Cruise Line and the rest of the

defendants set up Mr. DeJongh in business. What is

interesting is that all of that rhetoric that you find in the

consolidated complaint, the first amended complaint, the

original complaint, is nowhere to be found in the motion for

class certification.

THE COURT: So why are you even talking about it?

MR. EPSTEIN: The plaintiffs are abandoning that

theory.

THE COURT: Why are you even talking about it? If it

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were me and I had 15 minutes, I wouldn't talk about things

that you by definition are telling me are not at issue

anymore. By the way, you have used eight.

MR. EPSTEIN: Are you permitting an amendment where

none has been requested? The motion --

THE COURT: I'm dealing with a motion for class

certification.

MR. EPSTEIN: Right, and the motion -- I'm sorry.

THE COURT: I'm dealing with a motion for class

certification that asks me to certify two, a particular

class -- I think it's two. Okay, that's what I am dealing

with.

MR. EPSTEIN: And the motion for class certification

tracks what the original class defined in the complaint was,

which was roughly, you know, everybody in America who received

one of these phone calls. The only testimony you have is that

there was as many as 50 million of these calls. And our view

is very simple, is that that's the motion that the Court

should be ruling on. That motion --

THE COURT: So you're saying that I don't -- I

can't -- it's inappropriate for me to say, okay, if we can

ascertain 174- or 179,000 people, then I will certify a class

on the people we can ascertain? I can't do that?

MR. EPSTEIN: You can do that if it had been properly

presented that way.

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THE COURT: Please. Have you read Rule 15 in the

last 50 years?

MR. EPSTEIN: Except for one thing, your Honor.

There's been no request made.

THE COURT: It doesn't have to. It can be done after

the fact.

MR. EPSTEIN: The motion that was originally filed to

which we have the only chance to oppose didn't address that as

a possibility. It was only in the reply does that come up.

And it's prejudicial, I think, to the defendants, you

know, for some class that has not been fully vetted out, you

know, to be considered by the Court. Obviously you're not

appreciative, you know, of the fact of the status of the

pleadings here.

THE COURT: I just think it's -- I'm trying to grope

for a nice word here -- it's just not a winning argument.

I mean, there is no rule, and you can't quote me one,

that says that the motion for class certification has to track

what the complaint says. You can't. It's just not doable.

You know, and you got the opportunity for oral argument here.

You have squandered your 10 minutes. Okay. You have used all

10, and now we're working on 11. And, I mean, you raised this

issue of ascertainability in the response. So the plaintiffs

dealt with it in the reply. They said, well, we can at least

ascertain the 174, we can maybe ascertain the 2 million, we

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can maybe ascertain something else. And so I'm asking a

question, and then you basically start talking to me about how

it's an unfair amendment of the complaint. I'm not dealing

with the complaint. I'm dealing with the motion.

So who is going to use the other five minutes? Is it

you or somebody else?

MR. EPSTEIN: Well, if you're drilling down the 174,

I don't have any argument as to ascertainability there. We

have arguments as to 50 million.

THE COURT: You know what, you said that in the first

30 seconds, and you have used the other nine and a half.

MR. EPSTEIN: Well, if you --

THE COURT: Wow.

MR. EPSTEIN: -- are excluding 50 million --

THE COURT: I'm not.

MR. EPSTEIN: -- as a possible class.

THE COURT: I'm asking questions, okay. I had a

question about that because I acknowledged the fact that, you

know, the 174 wasn't something you had addressed yet, and so I

gave you an opportunity to address it. You addressed it

quickly. You said that that's ascertainable. And, you know,

I've asked you what else you had to tell me. Then you start

talking about the rhetoric that isn't even in this motion.

So now you're down to three minutes.

MR. EPSTEIN: I will let Mr. O'Meara have the

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remaining time to speak on behalf of Berkley. Thank you, your

Honor.

MR. O'MEARA: Good afternoon again, your Honor; Brian

O'Meara on behalf of The Berkley Group.

Mr. Harrison wanted to be here from North Carolina.

His dad suffered a stroke.

THE COURT: I'm sorry to hear that. Please pass on

my sympathy.

MR. O'MEARA: I will do.

Briefly, your Honor, just in terms of the class

definitions themselves as they apply to Berkley, our issue is

with -- if you look at the definition, it is phone calls made

by, on behalf of, or for the benefit. Clearly, Berkley --

THE COURT: I don't think that's a terribly great

argument either because you're basically --

And I understand that it's clear, absolutely clear,

that I have to -- I can't just look, you know, at the bare

allegations of the class certification motion. But I don't

think that I have to do a class that parses the people out

defendant by defendant. It's people who received phone calls.

You know, there's at least some basis to think that these were

all being done, you know, by one or a group of entities that

were maybe acting for different people, and maybe then there's

a question ultimately of who is responsible for what part of

it, but I don't think I have to parse that out.

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I actually had a different question for you. So here

is my question. So you have got a situation here -- and just

we'll call this a hypothetical so that nobody has to concede

anything. So let's say that I want to market something and I

decide that I'm going to do it by violating the Telephone

Consumer Protection Act. I decide that that's what I'm going

to do, and I'm going to make as many calls as I possibly can,

millions and millions, until somebody shuts me down. Okay.

And I do that. And guess what? Just like the guy

who does a bribe and doesn't write a check that says in the

memo section "bribe," I don't keep records of the phone calls

that I make. And then, you know, people start showing up that

have gotten these calls who arguably have had their peace and

quiet violated and they file a lawsuit, and they say, well,

you know, these people were making millions and millions of

calls. We should all be able to sue in one group.

And then you come in and say -- or I come in as the

defendant and I say: Well, you can't do that because I didn't

keep records.

What is right about that? It just doesn't make sense

to me.

MR. O'MEARA: And because it is a hypothetical, but I

agree with you.

THE COURT: Well, that's basically the situation here

because Mr. DeJongh didn't keep records. And I recognize that

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Mr. DeJongh isn't a defendant, but he was contracted with

somebody who contracted with somebody who was a defendant, and

that's the situation. He didn't keep records, shockingly,

seeing as how he was doing something illegal.

I mean, is basically the rule then is that only the

person who can testify that he's the recipient of the call can

sue individually?

MR. O'MEARA: To answer your question, I don't think

it is right that we don't have records. It's unfortunate, but

Mr. DeJongh was the owner, if you will, of the ESG defendants

who are defendants. And it is unfortunate, but we are faced

with that prospect now. And at least from the Berkley Group's

perspective who didn't have knowledge that these calls were

going on, now we are caught up in a class action litigation

and shouldn't be deprived of --

THE COURT: So when you say didn't have knowledge

that it was going on, just tell me where Berkley fits in, as

you see it.

MR. O'MEARA: Berkley contracted with VOMT to

provide --

THE COURT: With?

MR. O'MEARA: VOMT, Vacation Ownership Marketing

Tours.

-- contracted with them for marketing purposes.

THE COURT: What is Berkley's business?

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MR. O'MEARA: Berkley is basically a time share

business.

THE COURT: Time share business. They contracted

with VOMT to do marketing for them.

MR. O'MEARA: Correct.

THE COURT: Then VOMT does what?

MR. O'MEARA: VOMT then contracts with CCL, Caribbean

Cruise Lines.

THE COURT: Right.

MR. O'MEARA: Caribbean Cruise Lines then had an

agreement with Mr. DeJongh. Mr. DeJongh then --

Actually -- the calls were actually made by an

individual name Darren Robb. His name came up once or twice

in the briefing. But those were the calls that were actually

made.

So where does Berkley fit in there? Yes, there was a

contract.

THE COURT: So basically when the calls were being

made by -- whether it was DeJongh or the guy working for

DeJongh, some of those calls may have been for Caribbean

Cruise Lines and some of them may have been for your time

shares?

MR. O'MEARA: No, none. There is no evidence -- and

the evidence does demonstrate that none of the calls, any of

them, had time share, The Berkley Group, anything --

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THE COURT: When you say no evidence, you actually

mean no evidence?

MR. O'MEARA: I mean no evidence. There is no

evidence that any call was made.

THE COURT: So what were you guys paying for then?

MR. O'MEARA: What's that?

THE COURT: Did you get stiffed by the guy? Did you

sue him for stiffing you?

MR. O'MEARA: No, we didn't because we didn't know

that is how the marketing was going on.

THE COURT: So you made a contract with VOMT. You

paid them, right?

MR. O'MEARA: Yes.

THE COURT: What did you think they were doing?

MR. O'MEARA: Marketing for us in --

THE COURT: For what, though? What did you think

they were doing to market for you?

MR. O'MEARA: That would be up -- I mean, frankly, a

lot of that is proprietary.

THE COURT: But I'm asking you. So you don't want to

tell me?

MR. O'MEARA: No. It could have been either paper or

it could have been phone calls. We didn't know this

particular campaign was going.

THE COURT: How much did you pay him?

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MR. O'MEARA: I don't know the full amount. What we

do pay --

THE COURT: Well, tell me the partial amount if you

don't know the full amount.

MR. O'MEARA: I honestly don't know that. What we

paid them for was any lead that we got, then we get a

commission from that lead, but we don't know where those

leads --

THE COURT: Did you ever get leads back from them?

MR. O'MEARA: Yes, we did, from various different --

THE COURT: So you were basically paying for leads

from VOMT and you paid for -- and if somebody bought a time

share, then they would get a commission on that, and you would

get whatever the revenue from the time share.

MR. O'MEARA: I actually think it was just from a

lead that we got.

THE COURT: A lead, okay.

You guys are over your time, but I will give you one

more minute.

MR. O'MEARA: No, that's fine, your Honor.

And just to our point, we think basically the Berkley

Group based on -- and to your point, it is unfortunate we

don't have the records, but Berkley Group's position in here

has never been something that we believe we should have been

dragged into. I know this is class certification, but that is

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what we tried --

THE COURT: Thanks, Mr. O'Meara.

MR. O'MEARA: -- to demonstrate.

THE COURT: So acknowledging that maybe it's not an

ideal situation and, you know, depending upon one's definition

of fairness, you could say it's unfair, that somebody goes out

there and makes a whole bunch of -- does a whole bunch of bad

things and doesn't keep records of it. I mean, sometimes the

chips fall where they fall and life isn't fair. So you have

to be able to figure out who the class members are.

And so basically your solution is we just publish a

bunch of notices in a bunch of newspapers and rely on people

to submit affidavits: I got a call.

MR. RAUSCHER: That's part of the solution, your

Honor.

THE COURT: You know, the cases on ascertainability

seem to talk about objective criteria. Is there a case that

says that somebody saying, oh, yeah, I'm one of the people,

that that is objective criteria?

MR. RAUSCHER: Your Honor --

THE COURT: Say "yes" or "no" first.

MR. RAUSCHER: Yes.

THE COURT: Then tell me, all right.

MR. RAUSCHER: The Boundas case, B-o-u-n-d-a-s v.

Abercrombie, that Judge Feinerman decided, he said -- that was

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a case about improperly -- allegedly improperly voiding gift

cards. He said if a class is defined as people who had a gift

card that was improperly voided and those people still have

the gift card, that is as objective as --

THE COURT: They would have something to show.

That's objective.

MR. RAUSCHER: That's the first part.

THE COURT: That's objective. Okay. So what's the

second part?

MR. RAUSCHER: The second part is, he said it is less

objective if they don't have their gift card, and a lot of

people would have discarded them, but we can use an affidavit

process to handle that part of it.

THE COURT: I don't know the extent to which Judge

Feinerman went into it, and I don't use a lot of gift cards

and I have never -- well, I'm not going to say I've never been

in an Abercrombie because I've bought people gift cards at

Abercrombie before. But if somebody once had a gift card at

Abercrombie and used it, okay, somewhere in the bowels of

Abercrombie and Fitch's servers, there would be a record that

that person bought something. So you would have something,

wouldn't you?

MR. RAUSCHER: I'm not sure that there would be a

record, and I'm certainly not sure that that record would tie

to the person who the gift card was for if they paid in cash.

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There would be a record that a gift card was issued

presumably, but a lot of people presumably also paid in cash.

I don't think there would be a record of that, which I think

would be --

THE COURT: But if the people paid in cash, they

didn't have gift cards. Maybe I'm missing something.

MR. RAUSCHER: Someone could have given it as a gift.

I'm just thinking as a hypothetical.

THE COURT: In other words --

MR. RAUSCHER: If I buy a gift card for someone else

and I pay in cash.

THE COURT: So the plaintiffs were the people who had

bought the gift cards, not necessarily the people who had used

the gift cards. Sure, okay. I would have been the plaintiff,

not my daughter, in other words.

MR. RAUSCHER: I'm not sure technically who would

have been the plaintiff, but I think my point was if you could

have bought a gift card.

THE COURT: So why should I agree with Judge

Feinerman on that other than that he's really nice and very

smart?

MR. RAUSCHER: Well, one, because it doesn't reward

people.

THE COURT: That doesn't sound objective to me,

though.

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MR. RAUSCHER: Your Honor, here there is more

evidence. There is more evidence just beyond affidavits.

THE COURT: What is it?

MR. RAUSCHER: In addition to the document that you

discussed earlier with the defendants.

THE COURT: That's the 174 or whatever?

MR. RAUSCHER: That's the 174 or so.

We have served subpoenas on additional carriers that

the defendants were using, and that's Caribbean Cruise Line

and their -- at least one so far has indicated they have six

months of call detail records, and that's going to be the same

type of incoming call.

THE COURT: So you have still got stuff coming in.

MR. RAUSCHER: We still have stuff coming in.

We just got an interrogatory response identifying

them, and so we served a subpoena.

We also have evidence in the hands of class members

in addition to them just saying so.

THE COURT: Like what would that be?

MR. RAUSCHER: You could have a voicemail if someone

would have saved it. You could presumably have a caller ID

record, and you could have people's telephone bills.

In one way you can look at a telephone bill.

THE COURT: See, here is the problem. Here is the

problem. And I know that I'm probably mushing together, you

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know, ascertainability and superiority and a bunch of other

things, okay. But if you sort of hypothesize a situation

where we're going to rely on people's say-so, and maybe their

say-so is supported by something else, then aren't the

defendants going to be able -- aren't they entitled to go

challenge those people, and then don't you get down -- then

aren't you really into some sort of an individualized inquiry?

MR. RAUSCHER: I don't think the type of challenge

that we might face here would be enough of an individual

inquiry to take this out of the realm where class

certification would be appropriate. I'm not going to say the

defendants have no right to challenge anything, but certain of

those challenges we think can be made on a class-wide basis;

for example, whether all of the calls that ESG made had a free

cruise offer attached to it.

THE COURT: I'm not even talking about that. I'm

talking about just identifying recipients of calls. I'm still

at step one. I'm not at step four or whatever step that would

be. I'm just talking about identifying the people who got

calls.

I mean, I can see the notion of -- and I don't know

whether people ever define classes like this. I can see

saying, okay, I'm certifying a class of the people who got

calls who are reflected in exhibit whatever it is that

identifies.

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MR. KANOVITZ: I'm sorry, Judge. Judge, I apologize.

THE COURT: Go ahead and finish talking to him. I

will start my sentence over. I want him to hear my question.

(Brief interruption.)

THE COURT: I can see -- I can hypothesize the idea

of certifying a class of people that says, okay, starting out

the definition the way you have, everybody who got calls as

reflected in the attached exhibit, and we would attach, you

know, the list of phone numbers or whatever. Beyond that,

we're relying on people's say-so, at least as things now

stand. I don't know what you're going to get from these other

people. But we're relying on people's say-so.

And I guess my concern is if we're relying on

people's say-so, unless your position is that their say-so is

gospel and it's not subject to inquiry, which would be hard to

imagine, then we're going to -- then there is going to have to

be some process to figure out, you know, whether the say-so is

good enough.

MR. RAUSCHER: That --

THE COURT: I mean, in the cases that you're talking

about -- I mean, in Judge Feinerman's case -- maybe they

haven't gotten far enough down the road. If somebody submits

an affidavit, is that the end of the story; they're in?

MR. RAUSCHER: He says that you can handle that as

part of the claims process. I know something similar was done

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in the Household International Securities Litigation that

ended in a jury verdict, and the defendant still had the right

to rebut the presumption of fraud on the market in the

securities case.

But here, at least for some people, there is a way we

think that you can verify that they got the calls in a way

that defendants won't be able to rebut because --

THE COURT: What?

MR. RAUSCHER: -- they don't have -- the defendants

didn't keep records, and so that is, we know at least some

telephone numbers that ESG was using to make the calls. ESG

responded to government inquiries, and I think twice they sent

a letter to the Missouri attorney general's office

acknowledging that they used eight specific telephone numbers

to make the calls.

We served a subpoena on bandwidth.com, which is one

of the telephone companies that ESG subscribed or got numbers

that they subscribed to through. That company produced to us

a list of 57 numbers that ESG subscribed to and the dates for

each of the telephone numbers.

So if someone has a bill showing that they received a

call from that number during the relevant time period, we have

something that can be verified and the defendants aren't going

to be able to --

THE COURT: People still get bills that say who

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called them?

MR. RAUSCHER: Absolutely. Our clients have turned

over bills. Maybe not everybody in the class for every single

call, but absolutely call detail records.

THE COURT: But how would I define the class then in

a way that would require somebody to submit some sort of

evidence and not just their say-so?

MR. RAUSCHER: Your Honor, we think that you could do

subclasses. We don't think that's an issue that should

prevent the overall --

THE COURT: The people who is say-so is sub class A,

the people who can prove it is subclass B?

MR. RAUSCHER: It may not be something you need to

redefine the class for, and it may be something that we see

how much class-wide evidence we have on certain numbers. But

you could do subclasses by telephone numbers, if that's what

it came down to, at a later date if we needed to adjust for

the fact that there are certain areas in which we can verify

for everybody and certain ones where we can't.

THE COURT: So what is the -- I was talking about

this list of 2 million, the calls that were forwarded by CCL.

Give me your take on how that fits in.

MR. RAUSCHER: My take is that is a subset of the

political --

THE COURT: Of what?

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MR. RAUSCHER: Of the political calling campaign.

THE COURT: How do you know that, or what makes you

think that?

MR. RAUSCHER: That's what Jennifer Poole testified

to.

THE COURT: Jennifer?

MR. RAUSCHER: Jennifer Poole is the marketing

director. That's what she testified to. And there is also an

interrogatory response.

THE COURT: Do I have the interrogatory response?

MR. RAUSCHER: I'm almost certain that it's in there.

I would like to -- I can verify what it says.

THE COURT: Somebody else can verify while you're

talking. So it's a subset of the people who got political

calls.

MR. RAUSCHER: That's correct.

THE COURT: Allegedly --

MR. RAUSCHER: People who got the political -- right,

the alleged -- the calls that are part of this case.

THE COURT: Yes.

MR. RAUSCHER: A subset of that group and who were

transferred to Caribbean Cruise Line or one of its call

centers and who were on the phone for more than 30 seconds.

THE COURT: Okay. And the significance of the more

than 30 seconds, does that suggest that somebody actually had

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a conversation of some sort, or at least a little bit of a

conversation?

MR. RAUSCHER: Yes, and I think that's actually how

they decided whether they needed to pay the lead broker for

the calls.

THE COURT: Oh. Is that in something that I have

here?

MR. RAUSCHER: I'd like to verify that.

THE COURT: The trigger for payment, in other words?

MR. RAUSCHER: It's in her testimony. I would have

to check it.

THE COURT: Wait a second. Wait, wait, wait. So in

order to get paid, somebody would have to show that they kept

somebody on the phone for 30 seconds.

MR. RAUSCHER: No, because the payment that I'm

talking about is the payment that Caribbean made to the lead

broker. They were doing a per call --

THE COURT: Who is the lead broker?

MR. RAUSCHER: The lead broker is a guy named Scott

Broomfield, who at least allegedly stood in the middle of

Jacob DeJongh, his cousin, and Caribbean Cruise Line.

THE COURT: Okay. But I guess what I am getting at

is how would anybody know? I'm just sort of groping as to

whether there is some other evidence out there. How would

anybody know that he was on the phone for more than

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30

30 seconds?

MR. RAUSCHER: So people might know they were on the

phone for more than 30 seconds. Again, they may --

THE COURT: Maybe I misunderstood you. I thought

what you were telling me is that there was a trigger for

payment and the trigger for payment is if the call lasted 30

seconds or more.

MR. RAUSCHER: That's right. Are you asking how did

Caribbean know that?

THE COURT: In other words, if I'm the guy who, in

order to get paid, has to keep somebody on the phone for 30

seconds or more, how do I prove to the guy that's paying me

that I kept somebody on the phone for 30 seconds?

MR. RAUSCHER: We don't know exactly mechanically how

that worked, but we know that --

THE COURT: Have you taken the depositions of those

people?

MR. RAUSCHER: We have not spoken to that person yet,

but we talked to Mr. DeJongh who didn't remember much of the

technical details.

THE COURT: Yes.

MR. RAUSCHER: When we asked Caribbean all these

questions, they were on one side of it, and I don't think we

got any clear evidence on that.

THE COURT: Okay. You have a couple of minutes here.

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MR. RAUSCHER: A couple other things I just wanted to

touch on. One, with respect to Berkley's role in this, every

call was designed to sell a free cruise and a Berkley time

share. So the fact that they weren't mentioned on every call

we don't think in any way affects --

THE COURT: Why do you say that every call was

designed to sell both?

MR. RAUSCHER: Because we have evidence that there

were, so there was a free cruise attached to every call. I

know defendants dispute that, but the ESG defendants have

admitted to the FTC and to multiple state attorney generals

that every call had a free cruise offer attached to it.

We deposed the founder of Caribbean Cruise Line who

said, we tried to up-sell a vacation package to everybody who

answered and talked to us. And the up-sell on the vacation

package includes a mandatory -- if you buy one, it includes a

mandatory time share presentation.

And if they didn't buy the up-sell, they tried to

push them on the time share or try to sell them on a time

share later. We think the evidence strongly supports the idea

that every call was designed to sell Caribbean's vacation

packages and Berkley's time share.

In any event, we think that's a merits inquiry that

doesn't need to be decided now.

THE COURT: Okay. So should I be -- so what is

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the -- what do you have out there as far as subpoenas to phone

companies and whatnot?

MR. RAUSCHER: Well, we have -- I think we served

three fairly recently. We got a response from one company

saying we have six months of call detail records.

THE COURT: And they're preserving them presumably.

MR. RAUSCHER: They're preserved. They're archived,

so it's going to cost money to -- and we're going to have to

talk to defendants about, I think, who should be responsible

for that.

THE COURT: That's one. How many others do you have?

MR. RAUSCHER: That's one. We have another one out

there to Sprint, and that one has multiple -- that one has

most of the telephone numbers -- many of the telephone numbers

that they have identified. We don't have a response on that

yet.

THE COURT: And what do you think the records --

Let's just talk about the first company that has six

months of records. What are those records going to show? Are

they going to show the records -- are they going to show the

numbers that were called from those phone numbers, as you

understand it?

MR. RAUSCHER: I think it will show the same type of

information that we have. It will also show the numbers of

the people who received the calls at least. We have not seen

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the records but --

THE COURT: The number of the recipients of the

calls.

MR. RAUSCHER: The number of recipients.

THE COURT: It would be like my long distance phone

records and it shows that I called somebody in New York at

such and such a phone number.

MR. RAUSCHER: That's our understanding.

THE COURT: Okay.

MR. RAUSCHER: At least that.

THE COURT: So should I be -- shouldn't I be waiting

then until that whole process gets run out?

MR. RAUSCHER: We don't think you need to wait for

that, your Honor.

THE COURT: What if I want to?

MR. RAUSCHER: I think that's certainly a reasonable

approach.

THE COURT: I mean, because there's this big brouhaha

about, you know, the alleged absence of objective evidence,

and if there is more objective evidence that's just sitting

out there waiting for somebody to pay to dredge it up, then, I

mean, to me that's pretty darned close to a no-brainer that I

wait for that because, I mean, just think of the opposite

scenario. Okay.

So one of three things is going to happen. Either

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I'm going to say class certification is denied because it's

not ascertainable and you're going to come back to me in three

months and say, wait a second, Judge, here it is, we got it,

and I'm going to have to do this all over again.

Scenario two is I grant class certification. It gets

appealed, and while it's on appeal, the stuff comes in, and so

then the Court of Appeals is working off, you know, some

partial record.

I don't know what the third scenario is. It doesn't

make sense to me. If there is something other --

Why is it just now that you're subpoenaing these

things? Is it something about an interrogatory answer?

MR. RAUSCHER: We had issued an interrogatory asking

who did you -- which telephone service providers did you use

to take incoming calls?

THE COURT: When did you get the answer to that?

MR. RAUSCHER: We got it -- it was part of the

motion. It was very recent. They served it after the motion

to stay was denied.

THE COURT: Okay, okay, okay. Then you sent out the

subpoenas you have been dealing with, okay.

You're out of time, but I will give you one minute.

(Brief interruption.)

MR. RAUSCHER: Your Honor, someone just brought me

the citation to Ms. Poole's deposition testimony about the

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list of 2 million people. It's Exhibit 12. It looks like

it's Exhibit 12 to our class certification brief.

THE COURT: Okay, I will find it.

MR. RAUSCHER: She says: We're looking at the list.

It's 1,945,866 total calls.

And I said:

"Question: "That's the total number of calls that were

transferred to Caribbean Cruise Line as a result of political

surveys?" And she says "correct."

THE COURT: Okay, thanks.

So I have two questions for you. I have two

questions for somebody who is actually going to answer my

question and not talk about other stuff. So if you can deal

with that, Mr. Epstein, then you can be that person; otherwise

delegate somebody else. Are we clear?

MR. EPSTEIN: We are.

THE COURT: Okay. So do you want to say anything

about the reference to Ms. Poole's testimony?

MR. EPSTEIN: Ms. Poole -- yes.

Ms. Poole testified that there were other call

programs that were being conducted at the same time by call

centers other than Mr. DeJongh.

THE COURT: So what you're going to tell me is that

maybe it's a political survey, but it's not necessarily your

political survey.

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MR. EPSTEIN: It is not Mr. DeJongh's political

survey.

THE COURT: Okay.

MR. EPSTEIN: There were other companies like Mr.

-- were not like Mr. DeJongh but other companies doing what

Mr. DeJongh had done.

THE COURT: I get it.

MR. EPSTEIN: Okay.

THE COURT: The second question is this whole thing

about why shouldn't I wait and see what comes in from these

subpoenas.

MR. EPSTEIN: Well, that dovetails in with our point

is that we don't have the ability to identify who the class

members are other than that very small subset where we can

actually trace the numbers. If there is an ability to trace

the numbers, then the numbers become -- or the people become

more ascertainable.

THE COURT: Okay.

MR. EPSTEIN: If you were to certify a class today

addressing your --

THE COURT: Yeah, yeah.

MR. EPSTEIN: -- scenario number two, we would almost

certainly have to take review on that.

THE COURT: Of course you would, right.

MR. EPSTEIN: And all of a sudden evidence is coming

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in.

THE COURT: It's crazy. I mean, the Court of Appeals

would say: Why did you do this now, Kennelly? You should

have waited until everything came in.

MR. EPSTEIN: And, your Honor, with due respect, it

kind of dovetails with what I was addressing, and that is the

status of the motion as it sits today, the motion is not

supported by that evidence.

THE COURT: Well, you know what, the motion got filed

when it did because I put a deadline on it, okay. That is the

fact. I put a deadline on it. That's why it got filed,

right?

MR. EPSTEIN: Yes.

THE COURT: You filed --

Did I set a deadline? Maybe I didn't set a deadline.

MR. EPSTEIN: You did.

THE COURT: I set a deadline. So that's why it got

filed. Maybe I screwed up. Maybe I set the wrong deadline.

Maybe it didn't dawn on me that there was other evidence that

had to be gathered. So that wouldn't be on them; that would

be on me, I think, just under any reasonable way of looking at

it. So I'm going to have to think about that.

MR. EPSTEIN: We don't disagree with that point at

all, your Honor.

THE COURT: I may end up just kind of putting the

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brakes on this for a while, but I guess here's what I'd like

to get, if you can do this. If I can get a status report,

let's say, by Tuesday, it doesn't have to be anything very

elaborate -- it can be from the plaintiffs -- that basically

says: Here's the subpoenas we have out there. Here's what

they're for. You can attach them if you want. Here's what

they're for and here's the status of what we're getting on

each one of these or what we think we're getting or where our

discussions are and so on.

If you can file some --

I don't want more -- no argument on the class

certification motion. I just want the status of the

subpoenas. If you have anything to say on the defense side

about the status of the subpoenas after they file their thing

on the 11th of March, then you can file something by the 13th

of March, and I will wait until after I get both of those to

figure out whether to put the brakes on or not.

MR. EPSTEIN: Just one word to sort of clarify I

think what I heard counsel say. If they were sending

subpoenas to the companies that Caribbean uses, I'm not sure

it's going to reveal the information he's suggesting. If they

found the ones that Mr. DeJongh was using, it may do that.

THE COURT: Well, maybe I will find this out when you

guys submit something.

MR. EPSTEIN: That's what we will find out because

Case: 1:12-cv-04069 Document #: 214 Filed: 03/26/14 Page 38 of 39 PageID #:4413
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I'm not sure as we sit here.

THE COURT: Thanks. Take care.

MR. RAUSCHER: Thank you, your Honor.

THE COURT: All right.

(Which were all the proceedings had in the above-entitled

cause on the day and date aforesaid.)

C E R T I F I C A T E

I hereby certify that the foregoing is a true and

correct transcript of the above-entitled matter.

/s/ Laura M. Brennan March 14, 2014

 

Laura M. Brennan

Official Court Reporter Date

Northern District of Illinois

Case: 1:12-cv-04069 Document #: 214 Filed: 03/26/14 Page 39 of 39 PageID #:4414