GRUBER HURST’S OBJECTIONS TO REPORT AND RECOMMENDATION 1

TO BE FILED UNDER SEAL 

IN THE UNITED STATES DISTRICT COURT 

FOR THE NORTHERN DISTRICT OF TEXAS 

DALLAS DIVISION 

T-NETIX, INC., 

 Plaintiff/Counter-Defendant, 

v. 

VALUE-ADDED 

COMMUNICATIONS, INC., 

 Defendant/Counter-Plaintiff, 

v. 

SECURUS TECHNOLOGIES, INC., 

 Counter-Defendant. 

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 Case No. 3:05-CV-0654-D 

ECF 

 

 

GRUBER HURST’S LIMITED OBJECTIONS TO THE 

MAGISTRATE’S REPORT AND RECOMMENDATION 

Gruber Hurst Johansen Hail Shank, LLP (“Gruber Hurst”), though it prevailed before 

the Magistrate Judge below and so as not to waive any legal arguments it previously made, 

files three narrow objections to the March 28, 2013 Report and Recommendation.. 

First, Gruber Hurst objects to the Magistrate Judge’s finding that “the Court [was able 

to] call upon its inherent authority” to consider a basis for sanctions/contempt beyond “Judge 

Fitzwater’s Order of Reference.” (March 28, 2013 Report and Recommendation at 20). The 

District Court’s Order of Reference explicitly limited the Magistrate Judge’s area of inquiry to 

VAC’s “application for order to show cause” related to whether Gruber Hurst and others 

“should not be held in contempt for violation of the court’s March 3, 2006 protective order.” 

(October 31, 2012 Order of Reference at 1). The Order of Reference did not authorize the 

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GRUBER HURST’S OBJECTIONS TO REPORT AND RECOMMENDATION 2

Magistrate Judge to call upon its inherent authority to sanction relative to past conduct, or to 

exercise such inherent authority relative to (i) whether Gruber Hurst failed to comply with any 

oral directive from Magistrate Judge Sanderson at the 2008 hearing or (ii) whether Gruber 

Hurst failed to proceed according to the spirit of what was contemplated during the 2008 

hearing. 

Second, and relatedly, Gruber Hurst objects to the Magistrate Judge’s finding that, 

during the 2008 hearing, Judge Sanderson issued a directive with which Gruber Hurst was 

required to comply. (March 28, 2013 Report and Recommendation at 20). A party seeking an 

order of contempt must “establish by clear and convincing evidence: (1) that a court order was 

in effect; (2) that the order required certain conduct by the respondent; and (3) that the 

respondent failed to comply with the court’s order.” Piggly Wiggly, 177 F.3d at 382 (5th Cir. 

1999). To that point, Magistrate Judge Sanderson’s directions to Gruber Hurst did not rise to 

the level of an order; rather, he merely stated that he “want[ed] those documents returned to 

counsel” and his belief that the documents “need(s) to go back.” (2008 Hearing Trans. at 70:7-

8; 69:15). Moreover, even if these statements did constitute an order, the order presented two 

different options by which to proceed and, therefore, does not equal an order requiring “certain 

conduct.” 

Third, while Gruber Hurst agrees with the Magistrate Judge’s conclusion that the 

Court’s inherent power to sanction did not merit sanctions in this case, Gruber Hurst 

nonetheless objects to the legal finding that a court’s inherent power to sanction is governed by 

the same “substantial compliance” analysis used to determine whether a party is in contempt of 

court. (March 28, 2013 Report and Recommendation at 21-24). In that regard, before a court 

can exercise its inherent power to sanction, it must make a finding that a party acted in “bad 

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GRUBER HURST’S OBJECTIONS TO REPORT AND RECOMMENDATION 3

faith.” Elliott v. Tilton, 64 F.3d 213, 217 (5th Cir. 1995) (“in order to impose sanctions against 

an attorney under its inherent power, a court must make a specific finding that the attorney 

acted in bad faith.”) Although “bad faith” and “substantial compliance” are related, it is not 

clear that “substantial compliance,” which requires a finding that a party acted in good faith, is 

the same as whether a party actually acted in a manner which did not constitute bad faith. To 

the extent that the Magistrate Judge utilized a “substantial compliance” analysis in determining 

whether to exercise its inherent power to sanction, instead of a “bad faith” analysis, Gruber 

Hurst objects. 

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GRUBER HURST’S OBJECTIONS TO REPORT AND RECOMMENDATION 4

Respectfully submitted, 

FISH & RICHARDSON P.C. 

By: s/ William B. Mateja 

William B. Mateja

 Texas Bar No. 13185350 

 mateja@fr.com

Albert A. Starkus III

 Texas Bar No. 24051376 

 starkus@fr.com

1717 Main Street, Suite 5000

Dallas, Texas 75201

(214) 747-5070 – Telephone

(214) 747-2091 – Facsimile 

GRUBER HURST JOHANSEN HAIL 

SHANK, LLP 

By: G. Michael Gruber

 Texas Bar No. 08555400 

 mgruber@ghjhlaw.com

 Anthony J. Magee

 Texas Bar No. 00786081 

 amagee@ghjhlaw.com 

 A. Shonn Brown 

Texas Bar No. 24007164 

sbrown@ghjhlaw.com 

1445 Ross Avenue, Suite 2500

Dallas, Texas 75202

(214) 855-6800 – Telephone

(214) 855-6808 – Facsimile 

COUNSEL FOR GRUBER HURST 

JOHANSEN HAIL SHANK, LLP 

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GRUBER HURST’S OBJECTIONS TO REPORT AND RECOMMENDATION 5

CERTIFICATE OF SERVICE 

On this 11th day of April, 2013, I caused the foregoing document to be electronically 

filed with the Clerk of the Court for the Northern District of Texas, Dallas Division, using the 

case filing system of the Court.

I hereby certify that I have served all counsel of record electronically or by another 

manner by FED. R. CIV. P. 5(b)(2). 

s/ Albert A. Starkus III 

Albert A. Starkus III

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