DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC

PAGES 1 - 18

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

BEFORE THE HONORABLE LUCY H. KOH, JUDGE

IN RE: YAHOO! INC. )

SECURITIES LITIGATION, )

) NO. C-C-17-0373 LHK

)

WEDNESDAY, JULY 26, 2017

SAN JOSE, CALIFORNIA

FURTHER CASE MANAGEMENT

REPORTER'S TRANSCRIPT OF PROCEEDINGS

APPEARANCES:

FOR PLAINTIFFS: GLANCY, PRONGAY & MURRAY

1925 CENTURY PARK EAST, SUITE 2100

LOS ANGELES, CALIFORNIA 90067

BY: JOSHUA L. CROWELL, ESQUIRE

FOR DEFENDANT MORRISON & FOERSTER

YAHOO! INC.: 425 MARKET STREET

SAN FRANCISCO, CALIFORNIA 94105

BY: JORDAN ETH, ESQUIRE

FOR DEFENDANT KEKER VAN NEST & PETERS, LLP

RONALD BELL: 633 BATTERY STREET

SAN FRANCISCO, CALIFORNIA 94111

BY: STUART L. GASNER, ESQUIRE

EDWARD A. BAYLEY, ESQUIRE

(APPEARANCES CONTINUED)

REPORTED BY: DIANE E. SKILLMAN, CSR 4909, RPR, FCRR

OFFICIAL COURT REPORTER

TRANSCRIPT PRODUCED BY COMPUTER-AIDED TRANSCRIPTION

Case 5:17-cv-00373-LHK Document 51 Filed 07/31/17 Page 1 of 18
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DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC

FOR DEFENDANT BOERSCH SHAPIRO LLP

ALEXANDER STAMOS: 1611 TELEGRAPH AVENUE, SUITE 806

OAKLAND, CALIFORNIA 94612

BY: MARTHA A. BOERSCH, ESQUIRE

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Case 5:17-cv-00373-LHK Document 51 Filed 07/31/17 Page 2 of 18
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DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC

WEDNESDAY, JULY 26, 2017 2:03 P.M.

P R O C E E D I N G S

THE CLERK: PLEASE BE SEATED.

YOUR HONOR CALLING CASE NUMBER 17-CV-0373 IN RE YAHOO!

INC. SECURITIES LITIGATION.

COUNSEL, PLEASE STATE YOUR APPEARANCES.

MR. CROWELL: GOOD AFTERNOON, YOUR HONOR. JOSHUA

CROWELL OF GLANCY PRONGAY & MURRAY REPRESENTING THE

PLAINTIFFS.

MR. ETH: GOOD AFTERNOON, YOUR HONOR. JORDAN ETH FOR

ALTABA, USED TO BE KNOWN AS YAHOO! AND MARISSA MAYER.

MS. BOERSCH: GOOD AFTERNOON, YOUR HONOR. MARTHA

BOERSCH FOR ALEX STAMOS.

MR. GASNER: GOOD AFTERNOON, YOUR HONOR. STUART

GASNER AND ED BAYLEY FOR DEFENDANT RON BELL.

THE COURT: OKAY. ONE MOMENT.

(PAUSE IN THE PROCEEDINGS.)

THE COURT: ALL RIGHT. BELL'S COUNSEL AND YOU

SAID -- SAY THAT ONE MORE TIME, MR. EDWARD BAYLEY AND JO

GOLUB; IS THAT CORRECT?

MR. GASNER: NO. STUART GASNER. MS. GOLUB IS AWAY

ON VACATION SO I AM COVERING FOR HER.

THE COURT: OKAY. FOR MR. BELL, CORRECT?

MR. GASNER: YES. YES, YOUR HONOR.

THE COURT: THANK YOU.

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Case 5:17-cv-00373-LHK Document 51 Filed 07/31/17 Page 3 of 18
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DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC

I HAD A COUPLE OF MATTERS I WOULD LIKE TO DISCUSS. THE

FIRST BEING WE NEED TO WORK OUT A BETTER MECHANISM THAN WHAT

WE CURRENTLY HAVE. YOU ALL KEEP FILING STIPULATIONS, CHANGING

BRIEFING DATES, CHANGING HEARING DATES, AND I FEEL YOU DON'T

UNDER HOW MY CHAMBERS WORKS. BECAUSE EVERY STIPULATION YOU

FILE IS A HUGE HEADACHE. SO I JUST WANTED TO LET YOU KNOW HOW

MY CHAMBERS WORKS SO WE COULD PERHAPS COORDINATE BETTER

TOGETHER. OKAY?

I HAVE ABOUT 400 CIVIL CASES. I TRY TO GIVE HEARING DATES

TO THE FIRST-FILED CASE. SO PEOPLE WHO FILE LATER AREN'T

GETTING HEARING DATES SOONER THAN SOMEONE WHO FILED AFTER

THEM. OKAY? AND WE TRY AS MUCH AS POSSIBLE, IF WE CAN, TO

GIVE HEARING GATES WITHIN ABOUT 90 DAYS OF THE FILING OF THE

MOTION. IF WE CAN DO IT SOONER, WE WILL. IF NOT -- BUT AS

YOU MIGHT IMAGINE, I HAVE VERY LIMITED RESOURCES.

SO EVERY WEEK WE ARE CAREFULLY CALIBRATING WHAT'S SET THAT

WEEK. WE CAN'T USUALLY TAKE A CLASS CERTIFICATION MOTION IN A

REALLY COMPLICATED CASE AND SUMMARY JUDGMENT IN A REALLY

COMPLICATED CASE AND A PATENT TUTORIAL ON A COMPLICATED CASE

ON THE SAME WEEK. OKAY? BECAUSE WE ARE TRYING TO GET ORDERS

FILED EITHER BEFORE THE HEARING OR SHORTLY THEREAFTER. SO

EVERY HEARING DATE IS VERY CAREFULLY THOUGHT ABOUT, EXACTLY

WHAT NUMBER OF MOTIONS TO PUT ON THERE, AND WHAT TYPE. OKAY?

AND SO WHEN YOU ALL KEEP MOVING THE HEARING DATES, IT

MAKES IT VERY COMPLICATED FOR US BECAUSE WE HAVE ACTUALLY --

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Case 5:17-cv-00373-LHK Document 51 Filed 07/31/17 Page 4 of 18
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DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC

YOU KNOW, THAT'S WHY I ASK YOU TO GET THE HEARING DATES FROM

MS. MASON BECAUSE SHE KNOWS EXACTLY -- SHE KEEPS CONTROL OF

THE CALENDAR. SHE KEEPS TRACK OF EXACTLY HOW MANY HAVE BEEN

SET ON EACH DAY, AND THEN SHE DIVIDES IT UP.

AND WE'RE ALWAYS THINKING ABOUT HOW COMPLEX IS THIS

MOTION. IF IT'S REALLY NOT COMPLEX, THEN WE CAN SET EIGHT OR

NINE IF THEY ARE GOING TO BE REALLY SIMPLE MOTIONS TO DISMISS.

BUT IN MOST INSTANCES WE HAVE SOME SENSE OF THE COMPLEXITY AND

HOW LONG IT'S GOING TO TAKE.

SO YOU ALL KEEP FILING STIPULATIONS AND YOU DON'T CONSULT

WITH MS. MASON AND YOU JUST KEEP PROPOSING AND STIPULATING TO

ALL THESE HEARING DATES WITHOUT CONSULTING US, AND YOU JUST

DON'T KNOW HOW IT IS CAUSING US PROBLEMS. OKAY?

ALSO, I HAVE THREE TERM CLERKS. SO WHEN CLERKS LEAVE,

THERE IS A REASON WHY I DON'T LIKE TO SET CERTAIN TYPES OF

MOTIONS DURING CERTAIN TIMES OF THE YEAR. OKAY? AND YOU ALL

JUST KEEP MOVING THINGS AROUND. I DENIED YOUR FIRST STIP FOR

A REASON, AND THEN YOU JUST CAME BACK AND SAID,

RECONSIDERATION, LET US DO IT ANYWAY.

NOW, I WAS FULLY AWARE OF WHAT YOU'RE PROPOSING. I WILL

TELL YOU FROM OUR PERSPECTIVE, IF YOU FILE A MONSTROUS, MOTION

THAT IS MORE BURDENSOME AND HARDER TO GET A RULING OUT THAN IF

YOU FILED TWO SMALLER DISCRETE MOTIONS. I REALIZE IT'S THREE

BRIEFS VERSUS SIX BRIEFS, BUT IT'S STILL MORE MANAGEABLE TO

HAVE A MORE MANAGEABLE MOTION THAN TO HAVE AN OMNIBUS MOTION

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Case 5:17-cv-00373-LHK Document 51 Filed 07/31/17 Page 5 of 18
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DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC

OF SEVEN DEFENDANTS ALL MAKING POTENTIALLY DIFFERENT BUT

MOSTLY OVERLAPPING CLAIMS.

SO THERE'S A REASON WHY -- I WAS FULLY AWARE THAT YOU

WANTED TO CONSOLIDATE THE BRIEFING, BUT THERE'S A REASON WHY I

DENIED IT. OKAY? IT HAS TO DO WITH WHAT MY CLERK CYCLE IS

AND IT ALSO HAS TO DO WITH I WOULD PREFER TO HAVE TWO DISCRETE

MOTIONS.

ONCE I GET THE ORDER OUT ON THE FIRST MOTION, IF THE

SECOND ONE IS LARGELY DUPLICATIVE, YOU'RE RAISING THE SAME

FALSE MISREPS OR ALLEGED FALSE MISREPS, THEN IT'S SO MUCH

EASIER TO DO THAT SECOND ORDER. OKAY? AND THEN THE CLERK ON

THE SECOND CASE CAN LOOK AT THE PREVIOUS ORDER.

SO THERE ARE REASONS WHY I AM DENYING THESE STIPS, BUT

THEN YOU ALL JUST THEN FILE MOTIONS FOR RECONSIDERATION AND

FILE ANOTHER STIP ASKING FOR THE SAME THING. AND YOU KEEP

MOVING THE HEARING DATES. SO IT'S JUST NOT WORKING WITH MY

CHAMBERS.

I WOULD LOVE FOR YOU TO CONSENT TO A MAGISTRATE JUDGE, AND

THEN I CAN SEND YOU TO A DIFFERENT COURTROOM. AND THEIR

SCHEDULES ARE MORE OPEN. AND I AM SURE THEY CAN ACCOMMODATE

YOUR HEARING DATES MUCH MORE FREELY. SO I WOULD LIKE YOU TO

CONSIDER THAT. BUT IF YOU ARE GOING TO STAY HERE, YOU NEED TO

WORK WITH ME. OKAY?

I HAVE 400 CIVIL CASES. YOU ARE NOT THE ONLY CASE I HAVE.

AND SO IT'S JUST BEEN A HEADACHE EVERY TIME YOU KEEP MOVING

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Case 5:17-cv-00373-LHK Document 51 Filed 07/31/17 Page 6 of 18
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DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC

THE DATES. OKAY?

AND YOU ARE DOING THAT WITH THE SHAREHOLDER DERIVATIVE

CASE AS WELL, AND YOU NEVER CONSULT WITH MY COURTROOM DEPUTY

ON YOUR HEARING DATES. YOU JUST STIPULATE TO IT AND ASSUME WE

ARE GOING TO ACCOMMODATE ANY DATE YOU STIPULATE TO. I WISH WE

COULD DO THAT BUT I HAVE 400 CIVIL CASES. I CANNOT. BECAUSE

EVERYONE ELSE IS ENTITLED TO GET A TIMELY RULING ON THEIR

MOTION AS WELL.

SO THINGS ARE BEING VERY CAREFULLY TIMED TO MANAGE OUR

WORKFLOW TO GET YOU RULINGS AS PROMPTLY AS POSSIBLE AROUND THE

DATE OF THE HEARING. SO THIS HAS JUST GOT TO STOP. THAT IS

WHY WE ARE HAVING THE CMC BECAUSE THIS IS JUST NOT WORKING.

I REALLY WOULD LIKE YOU TO CONSENT TO A MAGISTRATE JUDGE.

AND IF YOU'RE NOT GOING TO DO THAT, YOU NEED TO WORK WITH ME

AND WORK WITH THE LIMITED RESOURCES I HAVE.

TRUST ME, YOU'VE SEEN MY ORDERS IN SECURITIES CASES. WE

REALLY DO GIVE YOU CAREFUL CONSIDERATION OF ALL THE ARGUMENTS,

ALL THE CLAIMS, ALL THE DEFENSES, BUT WE CAN ONLY DO THAT WHEN

WE MANAGE THE FLOW. OKAY?

SO YOU'VE GOT TO STOP WITH THESE STIPS, MOVING BRIEFING

AND HEARING DATES WITHOUT CONSULTING CHAMBERS.

MR. ETH: SO, YOUR HONOR, IF THERE'S AN ISSUE ABOUT A

HEARING, JUST CALL THE -- MS. MASON AND DISCUSS IT --

THE COURT: LET ME TELL YOU SOMETHING ELSE. IN A

SECURITIES CLASS ACTION OR PUTATIVE CLASS ACTION, THE

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Case 5:17-cv-00373-LHK Document 51 Filed 07/31/17 Page 7 of 18
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DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC

LIKELIHOOD THAT I AM GOING TO VACATE THE HEARING ON A MOTION

TO DISMISS IS EXTREMELY HIGH. SO YOU KEEP MOVING THESE

HEARING DATES BASED ON YOUR SCHEDULES; THE LIKELIHOOD THAT YOU

ARE GOING TO GET ONE IS REALLY UNLIKELY.

AND SO WHAT THE HEARING DATE DOES FOR US IS SETS A DATE BY

WHICH YOUR MOTION IS GOING TO GET FULL ATTENTION AND BY WHICH

YOU WILL GET A RULING MAYBE THAT WEEK OR PREFERABLY WITHIN TWO

TO THREE WEEKS MAX. OKAY? SO THAT'S REALLY A DATE FOR THE

COURT TO MANAGE THE FLOW TO GET YOU A PROMPT RULING. THAT'S

WHAT THOSE HEARING DATES ARE.

SO YOU ALL KEEP MOVING THE DATE AND THEN IT CAUSED ALL THE

OTHER MOTIONS THAT ARE SET ON ALL THESE OTHER DATES NOW HAVE

TO BE CONSIDERED AND PERHAPS MOVED AROUND. SO THAT IS THE

PROBLEM. DO YOU UNDERSTAND?

MR. ETH: YES.

THE COURT: YOU ARE PROBABLY NOT GOING TO GET A

HEARING ON A MOTION TO DISMISS IN A SECURITIES CLASS ACTION

CASE. UNLIKELY.

IF YOU DO, I'D EVEN LET YOU DO IT BY PHONE. YOU DON'T

HAVE TO PHYSICALLY BE HERE. I WOULD ALLOW YOU TO ARGUE IT BY

PHONE. SO PLEASE STOP MOVING THE DATES.

MR. ETH: GOT IT.

THE COURT: STOP MOVING THE DATES.

SO NOW I WANT TO KNOW, YOUR OMNIBUS MOTION, HOW COMPLEX IS

THAT GOING TO BE? ARE THE INDIVIDUAL DEFENDANTS LARGELY GOING

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Case 5:17-cv-00373-LHK Document 51 Filed 07/31/17 Page 8 of 18
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DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC

TO BE MAKING OVERLAPPING ARGUMENTS WITH THE CORPORATE ENTITY

OR IS THIS GOING TO -- BECAUSE I WOULD RATHER, IF IT'S GOING

TO BE THAT HUGE, I WOULD ACTUALLY RATHER SPLIT IT BACK UP AND

HAVE TWO SEPARATE -- IT'S MUCH EASIER FOR ME TO HAVE PRECEDENT

IN A CASE AND TO RULE ON SUBSEQUENT MOTIONS TO DISMISS

CONSISTENT OR DISTINGUISHING THAT PRECEDENT THAN TO HAVE ONE

OMNIBUS BIG ORDER.

MR. ETH: HAVING READ THE LATEST DRAFTS THIS MORNING,

YOUR HONOR, IT IS NOT GOING TO BE THAT HUGE. WE HAVE BEEN

ABLE TO WORK WITH THE OTHER DEFENDANTS AND IT'S ALL WITHIN A

35-PAGE LIMIT, AND I THINK IT'S MANAGEABLE THIS WAY.

THE COURT: SO ARE YOU MAKING EFFECTIVELY THE SAME

ARGUMENTS?

MR. ETH: YES.

THE COURT: YOU KNOW, PUFFERY, ALL THE OTHER, YOU

KNOW, USUAL ONES THAT ARE MADE IN A MOTION TO DISMISS IN A

SECURITIES CASE.

MR. ETH: WE ARE MAKING --

THE COURT: NO SCIENTER.

MR. ETH: SCIENTER, LOSS CAUSATION, NO DAMAGES WHICH

IS A LITTLE DIFFERENT. THERE ARE A COUPLE OF LIST TWISTS IN

THIS ONE, BUT A FULL RANGE OF ISSUES. AND THE INDIVIDUALS

HAVE BEEN REVIEWING THAT OVERALL BRIEF, AND WE ANTICIPATE THAT

THERE WON'T BE -- THAT THAT ONE BRIEF WILL SUFFICE FOR THE

ENTIRE REVIEW.

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Case 5:17-cv-00373-LHK Document 51 Filed 07/31/17 Page 9 of 18
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DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC

THE COURT: OKAY. BUT THE INDIVIDUALS, I ASSUME, ARE

MAKING SEPARATE ARGUMENTS AS WELL?

MR. ETH: IT'S ALL WITHIN -- THEY ARE ALL WITHIN THAT

ONE BRIEF BECAUSE THE ENTITY IS MAKING ARGUMENTS ON BEHALF OF

THE INDIVIDUALS BECAUSE OF THE POSSIBILITY THAT LIABILITY FOR

AN INDIVIDUAL COULD ALSO BE IMPUTED TO THE CORPORATION. SO

THEY ARE ALL WITHIN ONE BRIEF. I THINK, GIVEN THE COURT'S

HISTORY OF THIS, THE COURT WILL NOT FIND IT OVERWHELMING AT

ALL.

THE COURT: OKAY. WELL IT SOUNDS LIKE YOU DIDN'T

EVEN NEED THOSE EXTRA TEN PAGES IF YOU ARE BASICALLY MAKING

THE SAME ARGUMENT ON BEHALF OF THE ENTITY AND THE INDIVIDUALS.

MR. ETH: WELL, AS I --

THE COURT: 25 PAGES SHOULD HAVE SUFFICED.

MR. ETH: I THINK THAT IT ACTUALLY WORKS BETTER BEING

ABLE TO EXPLAIN SOME OF THESE THINGS RATHER THAN JUST HAVING

SHORTHAND DESCRIPTIONS, BUT IT'S NOT A GIGANTIC BRIEF BY ANY

MEANS.

THE COURT: OKAY. NOW WHY DID YOU WANT TO MOVE THE

HEARING TO NOVEMBER?

MR. ETH: MOVE THE HEARING TO NOVEMBER?

THE COURT: YOUR LAST STIPULATION. THE MOTION THAT

YOU FILED ON JUNE 30TH. ASKED TO CONTINUE THE HEARING DATE

FROM OCTOBER 12TH TO A NEW DATE IN NOVEMBER.

MR. CROWELL: I BELIEVE THAT WAS DUE TO MY

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Case 5:17-cv-00373-LHK Document 51 Filed 07/31/17 Page 10 of 18
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DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC

CO-COUNSEL'S HAVING TO DO WITH A JEWISH HOLIDAY.

THE COURT: RIGHT. THE HOLIDAY IS NOT THE WHOLE

MONTH OF OCTOBER, THOUGH, RIGHT? SO WHAT WAS IT THAT CAUSED

OCTOBER 12TH TO GO TO NOVEMBER?

MR. CROWELL: UNFORTUNATELY I DON'T -- I DON'T KNOW,

YOUR HONOR.

THE COURT: OKAY. ALL RIGHT. WELL, WE HAVE IT

CURRENTLY SET FOR OCTOBER 19TH. ARE YOU ALL GOING TO MOVE OR

STIPULATE TO MOVE THAT AGAIN?

MR. ETH: NOT AFTER TODAY, YOUR HONOR.

MR. CROWELL: ABSOLUTELY NOT.

THE COURT: ALL RIGHT. AND AS I SAID, THE

LIKELIHOOD, AND I PUT THIS IN THE ORDER, THIS WILL BE RESOLVED

ON THE PAPERS IS PRETTY HIGH. SO I WOULD DISCOURAGE YOU FROM

MOVING THAT AGAIN.

MR. ETH: WE ARE NOT.

THE COURT: OKAY.

NOW, IN MY OTHER SECURITIES CASES, NORMALLY THE PARTIES

HAVE STIPULATED TO STAY THE DERIVATIVE LITIGATION. THAT'S NOT

HAPPENING HERE. TELL ME WHAT'S GOING ON. IF THE SECURITIES

CASE ULTIMATELY GETS DISMISSED WITH PREJUDICE, THERE IS NO

DERIVATIVE CASE, CORRECT?

MR. ETH: THAT WOULD BE OUR POINT OF VIEW, YOUR

HONOR, YES.

THE COURT: SO I'M NOT CLEAR ON WHY WE NEED TO

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Case 5:17-cv-00373-LHK Document 51 Filed 07/31/17 Page 11 of 18
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DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC

SIMULTANEOUSLY IN PARALLEL LITIGATE THE DERIVATIVE CASE AT THE

SAME TIME.

MR. ETH: PART OF THE PROBLEM, YOUR HONOR, WE HAVE A

DERIVATIVE CASE IN STATE COURT AND A DERIVATIVE CASE IN

FEDERAL COURT.

THE COURT: OKAY.

MR. ETH: OUR VIEW, CONSISTENT WITH YOURS, IS THAT

THE DERIVATIVE PLAINTIFFS IN BOTH CASES SHOULD AGREE TO STAY

THEIR CASES PENDING THE OUTCOME OF THIS CASE. AND IF THEY

WOULD AGREE TO DO THAT, THAT WOULD BE FINE WITH US. AND IF

THEY DON'T, THEN WE ARE GOING TO ASK THIS COURT FIRST AND, IF

NECESSARY, THE SANTA CLARA COUNTY COURT TO ENTER A STAY.

THE COURT: SO ARE THERE ANY OTHER CASES, FOR

EXAMPLE, FILED IN DELAWARE OR IS IT JUST SANTA CLARA COUNTY

AND HERE?

MR. ETH: THIS WAS A CASE FILED IN DELAWARE, AND THE

DELAWARE PLAINTIFF AGREED TO STAY ITS CASE AND THEN JOINED

WITH THE SANTA CLARA COUNTY PLAINTIFFS. AND ACTUALLY IT IS

JUST THE PLAINTIFFS' COUNSEL IN THAT CASE SO THAT THERE ARE

NOW FIVE SETS OF PLAINTIFFS' COUNSEL INVOLVED IN THE SANTA

CLARA DERIVATIVE CASE AND THERE'S ALSO THE DERIVATIVE CASE IN

FRONT OF THIS COURT.

VERY SIMILAR CASES, THE BIGGEST DIFFERENCE IS THAT THERE'S

A FEDERAL CLAIM UNDER THE EXCHANGE ACT IN THE FEDERAL

DERIVATIVE CASE. AND IN THE STATE CASE, OF COURSE, THERE'S NO

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Case 5:17-cv-00373-LHK Document 51 Filed 07/31/17 Page 12 of 18
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DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC

FEDERAL CLAIM. BUT THE FEDERAL CASE HAS THE STATE CLAIMS AS

WELL AS THE FEDERAL CLAIM.

THE COURT: OKAY. NOW, TELL ME ABOUT THE SECURITIES

CASE IN SUPERIOR COURT. YOU HAD A PRELIMINARY INJUNCTION

BRIEFING IN JUNE, CORRECT?

MR. ETH: CORRECT. JUNE 6 WAS THE HEARING.

THE COURT: OKAY. HAS THERE BEEN A RULING ON --

MR. ETH: YES. THE HEARING WAS THAT DAY.

AND THE DEAL WAS NOT ENJOINED. THERE WERE DISCLOSURES

THAT WERE MADE BEFORE THE HEARING AND THEN IMMEDIATELY AFTER

THE HEARING, AND THE DEAL CLOSED SHORTLY THEREAFTER, MAYBE THE

NEXT WEEK. AND THAT WAS THE END OF THE SO-CALLED DIRECT PART

OF THAT CASE.

THE COURT: WHEN DID THE DEAL CLOSE?

MR. ETH: I THINK IT WAS JUNE 13TH? JUNE 13TH. IT

WAS A WEEK AFTER THE HEARING.

THE COURT: ALL RIGHT.

MR. ETH: THAT'S WHEN YAHOO -- THAT'S WHY I SAID

ALTABA IS THE NEW NAME.

THE COURT: OKAY. SO THE DIRECT CASE, IS THAT NOW

CLOSED THEN OR IS THAT STILL BEING LITIGATED?

MR. ETH: OUR VIEW IS THE DIRECT CASE IS OVER, AND

THAT THE ONLY PART OF THE SANTA CLARA CASE THAT CAN GO FORWARD

IS DERIVATIVE.

THE COURT: I SEE.

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Case 5:17-cv-00373-LHK Document 51 Filed 07/31/17 Page 13 of 18
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DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC

MR. ETH: I CAN'T SPEAK FOR WHAT THE PLAINTIFFS WILL

SAY IN THAT CASE, BUT THAT IS OUR VIEW.

THE COURT: ALL RIGHT. LET ME HERE FROM MR. CROWELL.

DID I PRONOUNCE THAT CORRECTLY?

MR. CROWELL: CROWELL.

THE COURT: CROWELL.

DO YOU DISPUTE THAT THEY ARE LARGELY THE SAME ALLEGATIONS

BEING LITIGATED IN BOTH THE DERIVATIVE AND THE SHAREHOLDER --

PARDON ME, THE DERIVATIVE AND THE DIRECT CASE HERE?

MR. CROWELL: WE DO DISPUTE THAT. THE DERIVATIVE

CASE IS LARGELY FOCUSED ON THE BOARD WHEREAS OUR CASE IS

FOCUSED MORE ON MS. MAYER, MR. BELL.

THE COURT: ALL RIGHT. AREN'T YOU THE PLAINTIFFS

COUNSEL IN BOTH CASES?

MR. CROWELL: IN THE DERIVATIVE CASE?

THE COURT: YES.

MR. CROWELL: NO, YOUR HONOR.

MR. ETH: PLAINTIFFS' COUNSEL IN THE FEDERAL

DERIVATIVE CASE, YOUR HONOR, IS ROBBINS ARROYO.

THE COURT: OH, I APOLOGIZE. OKAY. I APOLOGIZE. I

WAS MISTAKEN. I THOUGHT IT WAS THE SAME COUNSEL BEFORE BOTH

COURTS.

MR. ETH: NO.

THE COURT: I SEE. WHICH WOULD ALSO EXPLAIN WHY YOU

ARE NOT GOING TO GET A STIP FOR A STAY. IF IT'S THE SAME

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Case 5:17-cv-00373-LHK Document 51 Filed 07/31/17 Page 14 of 18
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DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC

LAWYERS, YOU'RE MORE LIKELY TO GET A STIPULATION FOR A STAY.

NOW THAT'S NOT GOING TO HAPPEN.

MR. ETH: RIGHT.

THE COURT: ALL RIGHT. THAT WAS MY MISTAKE.

I BELIEVE THAT IS ON FOR A CMC.

MR. ETH: YES.

THE COURT: WHEN IS THAT CASE ON FOR A CMC?

MR. ETH: END OF AUGUST. IT'S AUGUST 23RD, YOUR

HONOR.

THE COURT: OKAY.

I THINK I WILL SET A CMC FOR YOU ALL TO COME IN SOONER.

WHEN IS THE EARLIEST THAT YOU ALL -- ARE THE DEFENSE COUNSEL

THE SAME IN BOTH CASES, THE DERIVATIVE CASE AND THE DIRECT

CASE?

MR. ETH: YES, I BELIEVE -- WELL, WE'RE IN THAT CASE.

I'M TRYING TO THINK IF THERE ARE OTHER DEFENSE COUNSEL IN THE

DERIVATIVE CASE WHO AREN'T HERE.

THE COURT: I THINK IT'S --

MR. ETH: IT MIGHT JUST BE US.

THE COURT: I THINK IT'S JUST YOU.

MR. ETH: SO I'M HERE. I'M HERE, BUT THE PLAINTIFFS'

COUNSEL ARE NOT HERE.

THE COURT: ALL RIGHT. OKAY.

ALL RIGHT. WELL, I WILL ASK MS. MASON TO REACH OUT TO

PLAINTIFFS' COUNSEL TO SET A DATE. I WOULD LIKE TO -- YOUR

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Case 5:17-cv-00373-LHK Document 51 Filed 07/31/17 Page 15 of 18
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DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC

PROPOSED STIPULATION HAS THE MOTION TO STAY, MOTION TO DISMISS

BEING FILED ON AUGUST 18.

MR. ETH: CORRECT.

THE COURT: WHEN ARE YOU AVAILABLE?

MR. ETH: I'M AVAILABLE THE REST OF THIS WEEK, NEXT

WEEK, NOT THE FOLLOWING WEEK.

THE COURT: NOT THE WEEK OF AUGUST 7TH OR 11TH?

MR. ETH: LOOKING AT THE CALENDAR OVER THERE, THAT'S

CORRECT. I'M OUT OF TOWN FROM THE 7TH THROUGH THE 16TH IN NEW

YORK CITY. BUT OTHER THAN THAT, I'M AVAILABLE.

THE COURT: OKAY. ALL RIGHT. WELL, THERE'S NO NEED

TO TALK ABOUT THAT CASE. WE DON'T HAVE ALL COUNSEL THERE.

OKAY. SO LET'S TALK ABOUT THIS CASE THEN. SO YOU WON'T

EVEN BE HEARD ON THE ISSUE FOR A STAY, CORRECT, MR. CROWELL?

MR. CROWELL: YES.

THE COURT: THAT'S FINE. ALL RIGHT. CURRENTLY WE

HAVE A FURTHER CMC ON SEPTEMBER 27, 2017.

NOW THAT I THINK WE'VE GOTTEN AN UNDERSTANDING ABOUT THE

DATES, I DON'T THINK WE NEED TO MEET THEN. I THINK IT WOULD

BE BETTER PERHAPS TO SET THE CMC FOR AFTER THE HEARING DATE

WHEN YOU WILL HOPEFULLY HAVE AN ORDER.

SO LET'S GO AHEAD AND CONTINUE THAT SEPTEMBER 27 DATE

TO -- WHY DON'T WE LOOK ON NOVEMBER 8TH OR NOVEMBER 1ST?

THE CLERK: YOUR HONOR, ON NOVEMBER 1ST THERE ARE NO

MATTERS PRESENTLY SET FOR THE AFTERNOON. NOVEMBER 8 WE HAVE

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Case 5:17-cv-00373-LHK Document 51 Filed 07/31/17 Page 16 of 18
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DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC

ONE FURTHER CMC IN LEIMBACH, ET AL. VERSUS PAPER SOURCE, INC.,

ET AL.

YOUR HONOR, BUT IN THE MORNING OF NOVEMBER 1ST, YOU DO

HAVE THE DEATH PENALTY MATTER, DISCOVERY MOTIONS FOR THAT

DATE.

THE COURT: LET'S SET IT ON NOVEMBER 8TH, PLEASE,

THANK YOU, AT 2:00 O'CLOCK.

IF IT'S A FULL DENIAL, THEN THE DISCOVERY STAY IS LIFTED

AND -- I MEAN IF YOU WANT IT AT THAT POINT, WE COULD ADVANCE

POTENTIALLY THE CMC ALTHOUGH I WOULD SUSPECT WE MAY NEED SOME

TIME TO GET THE ORDER OUT.

IF IT'S A FULL GRANT, THEN I'LL MOST LIKELY GIVE YOU LEAVE

TO AMEND AND WE WILL JUST PROBABLY CONTINUE THE CMC DATE UNTIL

CLOSER TO WHEN I THINK THE SECOND ROUND MTD IS LIKELY TO BE.

MR. CROWELL: OKAY, YOUR HONOR.

THE COURT: NOW, IF IT'S A GRANT IN PART, DENY IN

PART, THEN WE SHOULD HAVE A CMC AND THE STAY WILL BE LIFTED.

ALL RIGHT. THEN I DON'T THINK WE NEED TO SET ANY OTHER

DATES. WE ALREADY HAVE OUR BRIEFING SCHEDULE AND OUR HEARING

DATE.

SO YOU FILED YOUR MOTION ON JULY 28, CORRECT?

MR. ETH: TWO DAYS FROM NOW, YES.

THE COURT: OR YOU WILL.

MR. ETH: YES.

THE COURT: THE OPPOSITION WILL BE DUE SEPTEMBER 1

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Case 5:17-cv-00373-LHK Document 51 Filed 07/31/17 Page 17 of 18
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DIANE E. SKILLMAN, OFFICIAL COURT REPORTER, USDC

AND THE REPLY WILL BE DUE SEPTEMBER 21. THE HEARING WILL BE

OCTOBER 19. WE WILL HAVE OUR FURTHER CMC ON NOVEMBER 8 AT

TWO. THEN WE CAN GO FROM THERE. I DON'T SEE ANY NEED TO SET

ANY FURTHER DATES. OKAY?

ANYTHING ELSE?

MR. CROWELL: NOT FOR PLAINTIFFS, YOUR HONOR.

MR. ETH: NO, YOUR HONOR.

THE COURT: OKAY. THANK YOU ALL.

MR. ETH: THANK YOU.

MR. CROWELL: THANK YOU.

THE CLERK: COURT IS ADJOURNED.

(PROCEEDINGS CONCLUDED AT 2:25 P.M.)

CERTIFICATE OF REPORTER

I, DIANE E. SKILLMAN, OFFICIAL REPORTER FOR THE

UNITED STATES COURT, NORTHERN DISTRICT OF CALIFORNIA, HEREBY

CERTIFY THAT THE FOREGOING IS A CORRECT TRANSCRIPT FROM THE

RECORD OF PROCEEDINGS IN THE ABOVE-ENTITLED MATTER.

_____________________________

DIANE E. SKILLMAN, CSR 4909, RPR, FCRR

FRIDAY, JULY 28, 2017

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Case 5:17-cv-00373-LHK Document 51 Filed 07/31/17 Page 18 of 18