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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

April 17, 2013

9:40 a.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. JAY EDELSON

MS. EVE-LYNN J. RAPP

350 North LaSalle Street

Suite 1300

Chicago, Illinois 60654

ANDERSON & WANCA

BY: MR. GEORGE LANG

3701 Algonquin Road

Suite 760

Rolling Meadows, Illinois 60008

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For the Defendant: GREENSPOON MARDER, P.A.

BY: MR. JEFFREY BACKMAN

200 East Broward Boulevard

Suite 1500

Fort Lauderdale, Florida 33301

TABET, DI VITO, ROTHSTEIN

BY: MR. TIMOTHY A. HUDSON

209 South LaSalle Street

7th Floor

Chicago, Illinois 60604

ROSE, HARRISON & GILREATH, P.C.

BY: MR. M. PEEBLES HARRISON

700 Blue Jay Street

Suite 1

Kill Devil Hills, North Carolina 27948

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: 12 C 4069, Birchmeier v. Caribbean

Cruise; 13 C 903, Wright v. The Berkley Group; and 13 C 908,

Vigus v. Caribbean Cruise.

THE COURT: All right, starting over there.

MR. BACKMAN: Jeffrey Backman for Caribbean Cruise

Line, defendant.

MR. HARRISON: Peebles Harrison for the Bank of

America Group.

MR. O'MEARA: Brian O'Meara, also here on behalf of

The Berkley Group.

MS. RAPP: Eve-Lynn Rapp on behalf of plaintiff David

Wright, with Edelson LLC.

I just wanted to note that Jay Edelson, who is to be

appointed as co-lead interim counsel, is in another courtroom

down the hall, but I'm more than happy to stand in for him.

MR. RAUSCHER: Scott Rauscher for the Birchmeier

plaintiffs.

MR. LANG: George Lang for the Vigus plaintiffs, your

Honor.

MR. HUDSON: Tim Hudson on behalf of defendant CCL.

THE COURT: Well, so if we need Mr. Edelson in here,

you know, I'm happy to put this off to give him a chance to

finish up in the other courtroom.

MS. RAPP: We would really appreciate that. The

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other case is actually up first, so it should be done.

THE COURT: Fine. I will just wait. Have a seat.

MS. RAPP: Okay. Thank you very much.

THE COURT: But you've got to stand in the same

places when you start over.

(Brief recess.)

THE CLERK: Recalling 12 C 4069, Birchmeier v.

Caribbean Cruise; 13 C 903, Wright v. The Berkley Group;

13 C 908, Vigus v. Caribbean.

MR. EDELSON: Good morning, your Honor; Jay --

THE COURT: Let's go through the names again,

starting over there.

MR. HUDSON: Good morning, your Honor; Tim Hudson on

behalf of defendant Caribbean Cruise Line.

MR. BACKMAN: Jeff Backman for Caribbean Cruise Line.

MR. HARRISON: Peebles Harrison for The Berkley

Group.

MR. O'MEARA: Brian O'Meara on behalf of The Berkley

Group.

MR. EDELSON: Jay Edelson for plaintiffs.

Thank you for passing the case, your Honor.

THE COURT: Sure.

MS. RAPP: Eve-Lynn Rapp for plaintiff David Wright.

MR. RAUSCHER: Scott Rauscher for the Birchmeier

plaintiffs.

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MR. LANG: George Lang for the Vigus plaintiffs, your

Honor.

THE COURT: Okay. I need to take care of some sort

of basic housekeeping kinds of things first.

So, first of all, there are a bunch of pro hac vice

motions that were filed in the two cases that came over to me

from, I think, Judge Bucklo and Judge Coleman. Those are all

granted.

In the Missouri case, who is the Missouri case?

MR. LANG: (Indicating.)

THE COURT: That's you. Evidently there was a motion

to dismiss that was filed when the case was still in Missouri.

Did that get ruled on?

MR. HARRISON: No, your Honor.

THE COURT: Okay. I'm going to terminate it without

prejudice to refiling. So I've covered that on that sheet I

gave you, Augie. That particular one is document number 21.

The next housekeeping thing, and I suspect that this

is a function of everybody having their appearances kind of

transferred from the other cases onto the docket in this case,

but there are three lawyers who do not have an email address

associated with their appearance. That may be because they're

out-of-town people who don't have e-filing accounts in this

district or it may be because of just some sort of glitch, but

it needs to get fixed.

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Those people are Mr. Bilik, who is a McGuire Woods

lawyer from Florida. So that needs to get fixed. I will tell

you why in a second.

Secondly, there's a Mr. O'Neill from Missouri. I

don't know if he's a plaintiff's lawyer in the Missouri case

or a defendant's lawyer. I'm assuming a plaintiff's lawyer.

And then the third one is -- just a second -- is

Mr. York, who is a McGuire Woods lawyer from Florida.

The reason that needs to get fixed is so that when an

order gets entered or when anything gets filed, those come up

as kind of a you need to mail it to these people, and I don't

think it's appropriate to impose the burden on the Clerk's

office to do that. So just get those fixed.

MR. O'MEARA: I will take care of that, your Honor.

THE COURT: Okay. So I've looked at the documents

that were filed -- this is all on this side of the room

here -- on the motions for appointment of interim class

counsel.

So, first of all, give me -- and I know it's in here

somewhere, but it's just helpful for me to have it in one

place. The Birchmeier case was filed in late May of 2012.

When was the Wright case filed in wherever it was filed?

MR. EDELSON: I believe it was a day after.

THE COURT: Okay. And when was the -- is it Vigus

or --

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MR. LANG: I say Vigus.

THE COURT: When was that filed?

MR. LANG: I believe that was November, later that

year.

THE COURT: Of 2012. Vigus is the one from Missouri?

MR. LANG: Yes, your Honor.

THE COURT: The other one was filed originally in

Florida?

MS. RAPP: Yes, Southern District.

THE COURT: All right. That was the first thing.

The second thing, I guess I just would like a little

bit more explanation of what -- of how exactly, I guess what I

will call for want of a better term, the decision-making

structure would be under the proposal that came from the, I

will just say the Edelson folks and the Loevy folks, on the

one hand, and the Anderson & Wanca folks, on the other hand,

because I'm not sure I have a clear sense of it.

So since the issue was sort of teed up, I think, by

the Anderson & Wanca folks, why don't you explain to me what

you think under your proposal the decision-making structure

ought to be or would be, number one, and then, number two,

what you understand it to be under the proposal that has been

made by the other lawyers.

MR. LANG: In reverse order, your Honor, under their

proposal, I specifically asked in emails what that structure

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would be; i.e., everybody doesn't get to be lead in every

case. Sometimes you don't get to be lead.

THE COURT: Right.

MR. LANG: So I asked, okay, if there is disagreement

in the decisions, what's going to be the decision-making

process -- et cetera. And I had proposed an executive

committee structure which would have taken care of most of

that. Your dep people would have made those decisions -- but

I got no feedback.

THE COURT: So your answer to that part of the

question is I don't know.

MR. LANG: I don't know.

THE COURT: Okay. So tell me what you think it

should be under your proposal.

MR. LANG: Under our proposal, it would be depending

on if everybody can play fair, we could have a three --

THE COURT: When you say depending upon whether

everybody can play fair, I guess what I need to know is what's

the decision-making structure you propose, not what is the

decision-making structure you propose under a particular

scenario. I need to know what the bottom line is.

MR. LANG: Two out of three.

THE COURT: Okay. So there would be, you know, one

person from each of the law firms who would, if there was a

dispute that you couldn't work out by consensus or whatever,

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you would have some sort of a vote.

MR. LANG: Correct.

THE COURT: And it would be done that way.

MR. LANG: Correct.

THE COURT: All right. Who is going to talk about

this, you, Mr. Edelson, or you, Mr. Rauscher?

MR. EDELSON: Yes. We're suggesting co-lead, me and

Scott.

If you're asking about how ties will be broken, I

mean --

THE COURT: Well, it's not really a tie if there's --

MR. EDELSON: If there's two.

THE COURT: Yes.

MR. EDELSON: So we would make decisions jointly.

THE COURT: Okay. So, in other words, your proposal

is that the Anderson & Wanca folks wouldn't get a vote, and

I'm not saying that's good or bad; I'm just asking what it is.

MR. EDELSON: Correct, your Honor.

THE COURT: Okay. Why wouldn't you have just told

him that in these emails?

MR. EDELSON: We did. We --

THE COURT: Point to me the one where you told him

that. I have got them all. Point to me the one where you

told him.

MR. EDELSON: Your Honor, with respect, you don't

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have them all.

THE COURT: Okay. Show me the one where you did.

MR. EDELSON: I mean, I don't have it on me but --

THE COURT: Tell me the date.

MR. EDELSON: What?

THE COURT: Tell me the date.

I mean, look at what's in there and tell me where it

fits in. I mean, I've been given a whole bunch of emails,

and, you know, you could have filed a response to what they

submitted.

MR. EDELSON: I, frankly, thought bogging the Court

down in --

THE COURT: Oh, you have all bogged me down with a

lot of sniping between you in particular and people with your

firm, which I will tell you is quite unbecoming and borderline

unprofessional and doesn't bode well for either of you having

much, if any, of a role in any kind of decision-making.

So tell me the date when you told him that their role

was zero. Tell me the date or the approximate date or where

it fits in within the emails that you say I got bogged down

with. I didn't get bogged down. It wasn't that hard to read.

MR. EDELSON: I apologize.

THE COURT: It wasn't pleasant to read, but it wasn't

that hard.

MR. EDELSON: Your Honor --

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THE COURT: Get to my question.

MR. EDELSON: It was -- every email was consistent.

It's all in those emails and in phone calls. Their --

What they were actually asking for, your Honor, they

weren't asking the time for --

THE COURT: You're getting off my question, Mr.

Edelson.

MR. EDELSON: It's hard. I know. I want to answer

it directly, but I need to give you context.

THE COURT: Well, you're going to have to try harder

then because I'm not going to let you say anything else until

I get an answer.

MR. EDELSON: I don't know how to answer that

question.

THE COURT: So then you're done talking for a while

until I ask to talk to you.

Do you know, Mr. Rauscher?

MR. RAUSCHER: Do I know?

THE COURT: Do you know when it was that they were

told that under the proposed structure in the motion by the

Birchmeier and Wright people that the Vigus attorneys were

not -- wouldn't have any role in the decision-making?

MR. RAUSCHER: I don't. The way that I read those

emails when I saw them was I actually thought it was an

assumption from Vigus at that point that they wouldn't be part

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of the decision.

THE COURT: Yes, but Mr. Edelson has just told me

that it's not an assumption, that it's true, so --

MR. RAUSCHER: I don't know.

THE COURT: Okay. Did you ever get an email that

said under their proposal -- when I say "you," I mean

collectively the people in your group. Did you ever get an

email that said under their proposal, you would not have any

kind of a decision-making role?

MR. LANG: Yes, your Honor. There was -- I had

specifically asked for guarantees that we would be able to

participate. The only guarantee I got back is that we would

be able to attend mediation.

THE COURT: Okay, listen to.

MR. LANG: That's the one.

THE COURT: Okay. All right. Well, that's about as

close to an answer as I'm going to get, I think.

So, you know, understanding that this isn't sort of

an everyday dispute, you know, like a motion to compel

discovery or something like that, and understanding, on the

other hand, that all three of the classes are essentially

coextensive, so, you know, you're all potentially fiduciaries

for the class, but then you also all have clients -- in other

words, Mr. Rauscher's clients are Birchmeier and Parkes,

Mr. Edelson's client is Wright, and Mr. Lang's client is

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Vigus. So what then under the proposal that you have made,

what then would become of Ms. Vigus? Would she be a class

representative or not?

MR. EDELSON: We don't understand enough about her

specific situation. We would seek to file a consolidated

complaint. We would ask for information about her to see if

she is interested in continuing on and whether she is an

appropriate class representative. If so, then we would

suggest that she should be a proposed class representative.

THE COURT: Okay. So what is the kind of information

that you would be looking for from her in order to --

MR. EDELSON: We just want to make sure that she has

standing, that she did the same type of --

THE COURT: That she got robocalls, et cetera, et

cetera.

MR. EDELSON: That she understands that it's a class

action, that she's going to hold up in a deposition.

THE COURT: Okay. So let's assume then for purposes

of discussion that you go through all of that, you know, and

she has got standing and she doesn't have, you know, any

terribly unique issues that other people don't have and she's,

you know, willing to do everything that a class member -- a

class representative has to do in order to be a class

representative.

Under your proposed structure, though, how then do I

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deal with the fact that she is Anderson & Wanca's client and

then all of a sudden -- but then would have no role in any

kind of decision-making?

MR. EDELSON: I --

THE COURT: Do you understand the question?

MR. EDELSON: I do. I think that's common in -- that

happens kind of in matters of course.

THE COURT: Like I say, this isn't a common sort of

thing that I have to deal with every day, so explain it to me.

MR. EDELSON: So, first, we still want Anderson &

Wanca to be involved in the litigation. So we -- you know,

Scott and I have discussed this before. We want to lead

through consensus. This isn't something where they're going

to be shut out. Especially if they have a client who wants to

continue on, they get to make their own decisions as they

continue on with the litigation.

For example, at the end, if there is a settlement,

they will have a voice in that. They will either support it

or they won't. So it makes sense for us to make sure that

they understand what's going on, that they participated.

But in terms of whether the fact that they filed --

that they're named plaintiff, that means that they're entitled

to their own counsel having decision-making --

THE COURT: So I guess the way I see this is this.

So under the proposal that you have made, it seems to me that

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it's a road to one of two things: Number one, Ms. Vigus

remaining as a plaintiff but not being able to maintain her

choice of an attorney because you would be the attorney, you

and your firm and Mr. Rauscher's firm would be the attorneys

for the class, not -- or at least the lead attorneys for the

class making the decision, not Mr. Lang and his firm, or,

conversely, that the fact that they're not part of the

decision-making structure is a fairly short road to a

conclusion that, well, she's not going to be a class

representative, because she might come --

You know, it would be reasonable to expect that if

you got through all of that and said, okay, we think you're an

appropriate class representative, that she would turn around

and say, well, but I want my lawyers involved in the decisionmaking. And you would then say, well, no, Judge Kennelly has

made a ruling that we two are the decision-makers, which is

kind of a -- and can pretty quickly, I think, lead to somebody

saying, well, okay, Ms. Vigus, sorry if that's your condition,

then you can't be a class rep.

MR. EDELSON: That's a good point. I've never -- I

can't recall a situation where a named plaintiff has said

that. Generally you speak to them, and if they want to file

in the first place, they're interested in continuing on. And

this isn't something we would be shutting out her attorney, so

she would still have that counsel to understand the process,

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to make sure that she has got proper buy-in and is

participating. So I wouldn't expect, for example, that I

would be speaking to her directly without them being on the

phone. You know, that would feel impolite and probably not

productive anyways.

THE COURT: Okay. I guess I should ask: Does

anybody on this side of the room have anything that you want

to input on any of this stuff that has been covered in any of

these motions or responses?

MR. BACKMAN: No, your Honor. Our only concern is

that we have one voice that we're dealing with.

THE COURT: Yes, you need to know who you're talking

to, obviously. All right.

So I have, I think, a pretty clear sense at this

point of what the Wright/Birchmeier proposal is. The proposal

that you have made, Mr. Lang, is -- I want to have a clear

understanding. So there would be three voting members, and so

by definition there would be a majority.

MR. LANG: Correct.

THE COURT: Presumably, and it would be majority

rule.

MR. LANG: Correct.

THE COURT: Don't you kind of see how that's going to

work out?

MR. LANG: Yes, but at least in this situation, I

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have a voice. In the other situation, the only voice that I'm

guaranteed is a chair at mediation, and I don't even know if I

have a vote then. And based on our experience, based on our

knowledge in this area of the law, that's not fair to any of

the clients.

THE COURT: So how does it work out? Again, I have

not been on your side of the fence in anything where there's

been one of these structures, at least -- well, not that I can

remember. So, you know, you have got three voting members.

You have two who you know are aligned with each other because

they have proposed to be the only voting members. You say you

have a voice, but all you get is a vote basically, and your

voice in this day and age probably consists of email which you

would have anyway.

And so what do you think you gain or what do you

think the process gains by having, you know, what is likely to

be the minority vote?

MR. LANG: Other than --

THE COURT: In other words, a vote that is

insufficient to overcome the cloture motion.

MR. LANG: Well, other than us saying that we should

be the only lead in the case, which I think is unfair, this

guarantees that we at least have a voice, that we at least are

able to participate. If they choose to ignore us, fine. But

at least when a decision comes up, then at least I get an

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email that says, hey, this is a decision that needs to be

made, what do you guys think, whereas under their structure,

that's not even guaranteed.

THE COURT: What's the problem with what Mr. Lang is

proposing?

MR. EDELSON: I think it's inefficient. I think that

we have not all been able to show that we can work

cooperatively with each other. It's felt to me like there's

been a lot of positioning as opposed to everybody focused on

results. We just want a smooth efficient ride for this case.

We certainly will include and have incentives to include the

Wanca firm or their group in what's going on with the case and

get their input. So I don't think that's a concern.

But the idea that every time we have got to do a show

of hands to make a decision --

THE COURT: You would be doing that anyway between

the two of you.

MR. EDELSON: Well, no. That's not -- Scott and I,

we have not worked together before. The reason we decided to

work together was when we sat down, we had a shared view of

the case. And so at least from my experience, the

relationship has been very smooth where we both understand

what each firm can offer.

THE COURT: Are you saying that you don't think that

the other firm has a shared view of the case or have you just

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not talked to them about it?

MR. EDELSON: That has not been the focus of their

communications. They have not invested the same amount of

time. All we have heard from them is that they are the --

that they have filed a lot of TCPA cases and that they want a

guaranteed amount of work. We have not been able to break

through and say, what is it you would like to do with this

case, where do you see it going, and what specifically can you

add concretely.

For us, at least, it's been a little bit more chest

pumping, which is -- but I'm sure you get the same sense from

us, too. So I don't want to further anger the Court.

THE COURT: Okay. So if you could pull out -- I have

a specific question or two. If you could pull out the

document that was filed by Mr. Lang that has the emails

attached to it. And mine isn't tabbed, but what I'm about to

ask you about is under Exhibit 13.

So the first page -- I'm looking at the second page

of Exhibit 13 and specifically at the email that you sent to

Mr. Lang on the 8th of March at 10:35 in the morning, which is

down at the bottom of the second page of Exhibit 13. So do

you have it there?

MR. EDELSON: Exhibit 13?

THE COURT: Yes, second page.

MR. EDELSON: Yes.

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THE COURT: The email from you on March the 8th at

10:35 a.m. at the bottom of the page.

So in the second paragraph of your email, you say,

quote:

"During our conversation, I thought we had reached an

understanding or at least we're close," and it goes on from

there.

What was the understanding that you thought you had

reached in the conversation? I assume by conversation you're

referring to something verbal rather than email.

MR. EDELSON: Correct.

THE COURT: What was the understanding that you

thought you had?

MR. EDELSON: My understanding was at the time, what

I understood they wanted was some guarantee of work, that they

weren't asking for a co-lead. They just wanted to make sure

they weren't going to be shut out of the case. And so that is

why I struggled to answer your question.

THE COURT: Okay. So what was the understanding you

thought you had?

MR. EDELSON: The understanding was that we said to

them, look, we can't give you -- we can't say you are in

charge of discovery, but here's what we see as your role --

excuse me -- here is what we see as your role in the case. We

want you to be at the mediation. We're happy to have you be

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involved and give your input into big decisions in the case.

If you want to deal -- if they want to house the

documents, if you want to do that, that's great. We're happy

to have help in the case.

And that's why I said -- at the end of the

conversation, I thought -- I thought we were close. I thought

that we had a shared understanding even though we weren't

making any formal commitment. And then the email came back,

and it felt like we were back in the loop of we need a formal

commitment.

And the idea of saying we're going to give you X

percent of the case, I don't think it's proper, and they

weren't asking for that. They never said, we want X percent

of the case, but it felt like -- that the discussion could

head there.

THE COURT: So, Mr. Lang, are you -- do you know what

conversation he's talking about?

MR. LANG: I do, and that's not --

THE COURT: What was your understanding of the

conversation?

MR. LANG: We had already retained Mr. Biggerstaff,

one of the premier experts in this area. I asked that we

participate in the expert part. I asked that we house the

documents. I asked that we second chair depositions, we

participate in briefing.

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And then when I pressed for those guarantees, the

only guarantee that I ever got was that we could participate

in mediation. And when I pressed that one, I asked if we

would even have a vote at mediation, and I was told that I was

creating issues for briefing purposes.

THE COURT: Okay. So with regard to Mr. Biggerstaff,

you say you have retained him. Does that mean that if I end

up opting for the Birchmeier and Wright proposal that

Biggerstaff is going to take his marbles and go home?

MR. LANG: That is a question that only he can

answer.

THE COURT: Oh, come on.

MR. LANG: No. It would be our position that we

would let him go forward with the case. I would scream and

yell, but we would go forward.

THE COURT: In other words, you wouldn't suggest to

him that, well, since you're not part of the management

structure, then Biggerstaff should take a pass.

MR. LANG: No. The way I see it, he's going to bring

value to the case. The more value that's brought to the case,

the better off my clients are.

THE COURT: Okay. So a couple of the points that Mr.

Lang raised there. And, you know, the reason I'm getting this

stuff out on the table at this point, or at least some of it,

is that I'm confident that there's at least a good chance that

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it's going to come back later, you know, if there ends up

being a settlement or a judgment. There's going to be issues

about, you know, who gets what and what work was reasonable

and was it reasonable to have X number of lawyers at

depositions and so on and so forth.

And so, Mr. Edelson, under the -- and I know that

there was some discussion about these being manufactured

issues -- I'm taking your term -- but I don't really see it

that way.

So what is your sense of how depositions would be

staffed from a lawyer's standpoint?

MR. EDELSON: The -- by the way, I agree with his

characterization of the discussion. He did mention those

other things. And what I expressed to him, and I expressed to

you, too, is those are all things which would be appropriate

roles. We have no problem with that. This isn't something

where Scott and I are trying to horde the work. If they can

do work, that's terrific. So if they want -- if they can show

value by second chairing depositions or help with briefing or

give us experts, that's terrific.

And, you know, I think the disconnect where we

weren't able to make the deal was those were just words to him

as opposed to, well, what does that mean --

THE COURT: Somewhere in here you're going to get to

my question.

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Do you remember what it was?

MR. EDELSON: I do.

THE COURT: Okay. Let's get to it.

MR. EDELSON: Your question was why I -- why I

struggled with him, too. It depends on the deposition. It

depends. We have never worked with him before.

THE COURT: I didn't ask about him. I asked about

number of lawyers at depositions.

MR. EDELSON: I believe there should be very few

lawyers at a deposition.

THE COURT: Well, what does that mean?

MR. EDELSON: I believe there should be --

THE COURT: That could mean two or it could mean

four.

MR. EDELSON: I mean two. There should be two.

So if he was going to second chair it, perhaps it's

Scott and he go. But I do not -- this is not a case where you

need 30 lawyers on everything, at all.

THE COURT: There's a big amount of space between two

and 30.

MR. EDELSON: Two attorneys at a deposition would be

more than appropriate, in my view.

THE COURT: Well, my view is there's plenty of

depositions where one is appropriate, and so now you know

that, so I just have that out on the table.

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MR. LANG: Permission to clarify, your Honor?

My concern is that if it becomes document intensive,

that there be one person for continuity to handle the

documents at depositions. Other than that --

THE COURT: I didn't say every deposition; I said a

lot of depositions.

MR. LANG: Thank you, your Honor.

THE COURT: Okay. And then the big elephant in the

room, I guess, is the Ashford Gear litigation. So I don't

know whether there is anything more that you all want to say

to me about that than you already said. I mean, presumably

you're aware that I, you know, had some of those cases as

well. I think I may have had the first one that resulted in

any kind of a decision actually, CE Design v. Cy's Crab House.

So is there anything more you want to say about all

of those issues?

MR. LANG: That it's gone back to Judge Gettleman.

We have been vindicated. And the issue with the letter that

they wrote, which Judge Posner said that the word -- I believe

the word "putative" should have been in the letter and it

wasn't. So these are issues that are -- they haven't

affected --

THE COURT: When you say Judge Gettleman, you were

vindicated before Judge Gettleman, what exactly do you mean

"vindicated"?

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MR. LANG: After the case went up to the Seventh, the

Seventh said there was an issue, it was sent back down. Judge

Gettleman then gave --

THE COURT: You're talking about his July 2011

decision.

MR. LANG: Correct, correct, and the case went back

down to Judge Gettleman.

THE COURT: So when Judge Gettleman said over at star

page 5 of the Westlaw version, which is 2011 Westlaw 3273078,

quote, "with respect to the broken promise in the instant

case, the Court is inclined to agree with the CE Design Court

that counsel's conduct was not entirely on the up and up,"

close quote, do you regard that as a vindication?

MR. LANG: Well, your Honor --

THE COURT: I wouldn't have, personally, but maybe

I'm missing something.

MR. LANG: No. I guess we feel that it's a little --

that this whole issue has been misunderstood and at least

that --

THE COURT: By me and Gettleman as well as by the

three judges on the Seventh Circuit?

MR. LANG: No, your Honor. No, your Honor.

THE COURT: Because he's quoting me on the entirely

-- "not entirely on the up and up thing" there.

MR. LANG: Right.

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And as you're well aware, that was an issue where the

hard drive was gotten by an alternative means. It was found

to be that that means was found to be valid. It was an issue

of whether or not there was a promise broken before.

THE COURT: Okay. Anything more you want to talk to

me and say?

MR. LANG: No, your Honor.

THE COURT: Mr. Edelson or Mr. Rauscher?

MR. EDELSON: Nothing.

MR. RAUSCHER: Nothing, your Honor.

THE COURT: Anybody else want to say anything?

MR. HUDSON: No, Judge.

THE COURT: Okay. Let me look back at one thing

here.

(Brief interruption.)

THE COURT: All right. So this is a motion under

Rule 2 -- I'm not going to write an opinion; I'm just going to

make an oral ruling.

It's a motion under Rule 23(g) of the Federal Rules

of Civil Procedure. 23(g)(3) provides for appointment of

interim counsel in certain types of cases before deciding

whether to certify the case as a class action. I don't think

there is really much dispute that that is needed here.

There are three cases that came from three different

districts. There needs to be some sort of a management

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structure for efficient case management.

The factors that are considered under Rule 23(g)(1)

are the work that counsel has done identifying and/or

investigating potential claims, counsel's experience in

handling class actions, complex litigation and claims of the

type asserted, counsel's knowledge of the applicable law, and

the resources counsel will commit to representing the proposed

class.

And I'm borrowing this from the submission by the

Wright and Birchmeier plaintiffs. "No single factor is

determinative." And I'm reading from page 7. And I agree,

it's a correct statement of the law.

"Each of them must be considered along with any other

matter pertinent to counsel's ability to fairly and adequately

represent the interests of the class."

I will say that I do have some concern based on the

exchange of emails that I have, and acknowledging that may not

be every email, I certainly got enough to get a taste. I do

have some concern about the ability of Mr. Edelson's firm and

Mr. Lang's firm to work cooperatively. I may have used the

word "sniping" before. If I didn't, I should have. I think

there was a good amount of sniping that went back and forth in

those emails. And by sniping, I mean diversion from the

issues, at some point getting pretty close to personal

attacks, and that does not -- that suggests some potential

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issues.

That aside, and going back to those four factors, I

mean, I think it is fair to say that each of the three law

firms involved has done or has significant experience handling

class actions, complex litigation and claims of this sort. I

don't have any doubt about any of the attorneys' knowledge of

the applicable law. I don't have any doubt about the

resources that they will commit in representing the proposed

class. I haven't had so many cases with Mr. Edelson, but I

have had some. I have had plenty of class actions both with

the Anderson & Wanca firm and with the Loevy firm, and I don't

have any doubt as to either one -- any of the three firms',

you know, willingness to put the necessary resources in.

I do think it's probably fair to say that somewhat

more work has been done by the Edelson firm and the Loevy firm

in terms of identifying and investigating claims, but it's a

nuance. It's not a really terribly stark difference. I think

the bigger factors are these sort of catchall factors that I

referred to in quoting from page 7 of the brief here.

I have to be frank to say that I think that the, what

I will call generically the Ashford Gear litigation is -- that

there is good chance that were I to appoint the Anderson &

Wanca firm as one of the co-lead counsel, that that would make

that an issue on a class certification motion. One of the

factors that has to be considered on class certification is,

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you know, the ability of the attorneys involved -- I don't

want to paraphrase it, so I will pull out Rule 23 here and

quote it directly.

"Class counsel must fairly and adequately represent

the interests of the class."

That's Rule 23(g)(4). And it's pretty generally

worded, but, you know, the case law is relatively welldeveloped that issues that an attorney has had, which I could

sort of generically refer to as ethical issues without reading

too much into that, are a legitimate factor to be considered.

And there is enough, I think, arguably questionable -- and I'm

not making any judgments on that -- I'm just saying there is

enough arguably questionable about the conduct of the Anderson

& Wanca firm in what again I'm generically referring to as the

Ashford Gear litigation, but what I really mean by that is

their dealings with the Abrahams and Business to Business

Solutions, that it's pretty likely that that would be raised

as an issue were they one of the lead attorneys.

So I do think that that is an appropriate factor to

consider, and so that tips things, in my view, in favor of

the -- more in favor of the proposal that is made by the

Wright and Birchmeier lawyers.

And, you know, those two firms have agreed to a

cooperative management structure, but I'm going to say this,

and I'm going to say it again for the third time now. I

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believe that the -- and understanding that I may not be seeing

every email, but I'm certainly seeing enough of it to get a

flavor, and understanding where Mr. Edelson was coming from in

terms of what his impression was that Mr. Lang and his firm

were looking for, I do think that the way that that was dealt

with by Mr. Edelson, which I would regard as a

back-of-the-hand approach in the emails that I read -- by

back-of-the-hand, I mean what I just did there -- suggests

some reason for concern about Mr. Edelson's and his firm's

ability to work cooperatively.

And so I'm willing to approve the proposal that has

been made here, but my view is that the Loevy firm should be

the first among equals because I did not see any of that from

them. I have had extensive experience with that firm in

dealing with class actions, including a couple of the bigger

ones that have ever been litigated in this district. I'm

speaking specifically of the Young v. Cook County strip search

case. And I have had a number of their individual cases but

some class actions and I've never seen anything other than

completely professional as well as classy as well as high

quality work on their part.

So I'm not going to get down involved into the

nitty-gritty of exactly who talks to who when and why and

whatnot, but from my standpoint, as between the two firms that

I'm going to appoint as co-lead class counsel, my view is that

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the Loevy firm is the first among equals.

So the motion by the -- this is document number 88,

Augie. The motion by the Wright, Birchmeier and Parkes

plaintiffs in support of appointment of interim co-lead class

counsel is granted subject to the comments made here.

The motion, and this one is document number 94, of

the Vigus plaintiffs in support of their motion for

appointment is denied. And I will just make -- I guess I'm

going to need some sort of a written order that I'm going to

ask you to draft.

I'm just going to make two other comments. Comment

number one is that I am going to hold, you know, the people

that I have appointed as co-lead class counsel to -- you know,

what I regard as anytime you say something to a judge in a

case that is pretty close to a binding commitment, I am going

to hold people to what they say about not, you know, cutting

off the Anderson & Wanca folks entirely. I do think that they

have value to contribute to this.

And, secondly -- and I know -- I mean I'm not so

naive as to think that this is all about, you know -- it's

primarily about, you know, how's it going to work best, but

it's also about money. Okay, I know that. Everybody knows

that. But I do want to emphasize that the fact that I'm

appointing co-lead class counsel is not carte blanche for

everybody to double up, triple up or quadruple up on

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everything. Any fee petition that I eventually get in this

case is going to be looked at very carefully for, you know,

unnecessary duplication of effort and things like that. And

so I just want to make sure people take that to heart.

I'm going to expect that -- so I guess what we need

to do at this point is I'm going to set a date for -- I think

one of the things we were going to talk about today was coming

up with a schedule, including a schedule for the filing of a

consolidated complaint. So have people given thought to that

because, if not, I'm just going to set one? I mean, I will

ask your opinions and we'll set it.

So what date do you propose for filing of a

consolidated complaint?

MR. EDELSON: Your Honor, two weeks would be terrific

for us.

THE COURT: All right. So the consolidated

complaint -- and I think the thing to do at this point is

we're going to file it under 12 C 4069, and then I'm going to

administrate it. Once we get it on file, I'm going to

administratively terminate the other two cases because there

don't really need to be three cases pending. So you don't

need to put all three docket numbers on it.

So the amended consolidated complaint is to be filed

by the 2nd of May.

Have you talked about a schedule between the two

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sides or not? I'm guessing not.

MR. O'MEARA: No.

THE COURT: Okay, fine. I want you to, starting now,

and I'm going to have you come back on the 9th of May at 9:30,

and I want you to have a proposal to give me. You don't have

to write it down. If you want to, you can, but you don't have

to submit a status report or anything like that. Come in with

a proposal. If you can agree on a schedule, that's terrific.

Be prepared to tell me what it is. And unless I think it's

outlandish, I will approve it. If you're not in a position to

agree on something, just come prepared to tell me what each

side's proposal is.

Okay. That will be the 9th of May at 9:30 in the

morning. And as far as I know, some of the folks on the

defense side of the room are from out of town. You will

make --

I mean, all I'm going to be doing is setting a

schedule. You will decide whether the out-of-town people need

to be here or not. It doesn't matter to me. Okay.

All right, thanks.

MR. EDELSON: Thank you, your Honor.

MR. O'MEARA: Thank you.

MR. HARRISON: Thank you.

MR. BACKMAN: Thank you.

MR. HUDSON: Thank you, Judge.

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MR. RAUSCHER: Thank you, your Honor.

(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 April 19, 2013

 

Laura M. Brennan

Official Court Reporter Date

Northern District of Illinois

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