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IN THE UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

FEDERAL TRADE COMMISSION,

Plaintiff,

vs.

KEVIN TRUDEAU,

Defendant.

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No. 03 C 3904

Chicago, Illinois

December 3, 2009

8:45 a.m.

TRANSCRIPT OF PROCEEDINGS - STATUS

BEFORE THE HONORABLE ROBERT W. GETTLEMAN

APPEARANCES:

For the Plaintiff: FEDERAL TRADE COMMISSION

(Via telephone) 600 Pennsylvania Avenue, NW

NJ-3212

Washington, DC 20580

BY: MS. SANDHYA PRABHU BROWN

MR. MICHAEL MORA

For the Defendant: WINSTON & STRAWN LLP

(Via telephone) 35 West Wacker Drive

Chicago, Illinois 60601

BY: MR. KIMBALL R. ANDERSON

Official Reporter: JENNIFER S. COSTALES, CRR, RMR

219 South Dearborn Street

Room 1706

Chicago, Illinois 60604

(312) 427-5351

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(Proceedings in open court.)

MR. ANDERSON: Good morning, Judge

Kimball Anderson here on behalf of Mr. Trudeau.

MS. BROWN: Sandhya Brown and Michael Mora here on

behalf of the Federal Trade Commission.

THE COURT: All right. Now, we're on a speakerphone.

So that means that we have to be mindful of the fact that if

anybody says something simultaneously with another person, it

will cancel, so let's be measured in what we say.

I've reviewed Mr. Anderson's motion, and I've decided on

a course of action here. So let me tell you first what I think

would be the appropriate way to go about this. And I've also

reviewed the Court of Appeals' opinion and my former order and

everything else.

First of all, I think that Mr. Trudeau should respond to

the FTC's renewed motion to modify the injunction, which is

docket number 269. And I just think that takes the response,

because the injunction I don't think needs any further -- or the

injunctive relief or the modification of the injunctive relief

doesn't really require any further discovery or anything else

under the Court of Appeals' rationale.

Secondly, the second FTC motion for entry of a

compensatory monetary remedy I think does, however. But I think

I also want a response, a formal response to that by Mr. Trudeau.

I think in that response, Mr. Anderson, you should

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address and identify the facts that you contest. I mean, it

appears to me that the FTC is content with the record as it

stands if I read them correctly.

MS. BROWN: That is correct, Your Honor.

THE COURT: Okay. But the Court of Appeals said

Mr. Trudeau is entitled to some discovery and evidentiary

presentation in connection with the monetary remedy and,

therefore, I think what I want to know is what facts he does

contest that you lay out in your motion and also any facts that

Mr. Anderson and Mr. Trudeau believe are not already in the

record and require further discovery and evidence. So that

should be part of that response.

As far as the motion for the proposed scheduling order

filed by Mr. Trudeau, I'm denying that, because those dates may

or may not be appropriate. I think they're a little too long the

way I look at it right now. So I'm not going to enter that

scheduling order. I'm not going to enter any scheduling order

just now. So that motion will be denied without prejudice. Of

course, you can ask for an order in the future.

And then, finally, I want Mr. Trudeau to submit, and he

can do this in connection with his response, your response,

Mr. Anderson, to that second FTC motion, maybe as an addendum or

something might be the easiest way to do it. I'll leave that up

to your own judgment, but I'd like a detailed discovery plan

concerning the monetary award.

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And I just want to say this right now, I obviously will

try not to revisit, retake discovery that's already been taken or

evidence that's already been presented, particularly since the

FTC is prepared to stand on the record.

But I will allow you to take discovery and present

evidence on matters that the Court of Appeals believes that you

should be able to do that. And that would include the one that

jumps out at me anyway, the consumer loss issue that's discussed

on page 29 of the slip opinion.

And I'd like you to file those things by December 17th.

And then I would like to pick another date to -- and I think

maybe I will ask FTC counsel to be here, because I want to plan

this out in a way that makes sense to everybody. But I'm going

to be gone for an extended period beginning the 24th, and I'd

like to do this before I leave. So I'm suggesting maybe we could

get together either the 21st or the 22nd.

You know, I know we're getting into the holiday season.

I don't want to interfere with anybody's holiday plans. But I

could see, if I get it on the 17th, at least I'd have the weekend

to think about it, and we would all have the weekend to think

about it. And then we could get together on the 21st or 22nd in

the early afternoon of either day.

MS. BROWN: Your Honor, this is FTC Counsel Brown. If I

might ask Your Honor one question, which is the FTC believes we

have certain strong arguments that counsel against further

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discovery even looking to the Seventh Circuit opinion. Would we

have an opportunity to lay that briefing out longer?

THE COURT: Yes, yes, you will. I would like to be able

to hash that out without another round of briefs if I can

possibly avoid it. That's why I wanted to get together.

MS. BROWN: Right. We're happy to form it as a reply to

Mr. Trudeau's filings.

THE COURT: Well, I want to do this before I leave. The

23rd will be my last day until mid-January. And I don't want to

wait until then to set a schedule. I want to sort of set you, if

I am going to allow discovery -- and I've got to tell you,

Ms. Brown, I am inclined after reading the opinion again to do so

at least to some limited extent. But that's why I want to put

the burden on Mr. Trudeau to lay out the discovery, the precise

discovery he wants. We need X documents to be produced by so and

so. We need whatever. And we'd propose that we be allowed to

present evidence on such and such a subject.

That's really what I want to hear from him. And then

I'm going to try to make a decision before I leave. I think we

can do that if we can get together -- actually, the 22nd would be

better for me, because I have a long hearing on the 21st in the

morning that might bleed into the afternoon.

MR. ANDERSON: What time would you propose on the 22nd,

Judge?

THE COURT: Why don't we say 1:00 o'clock.

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MR. ANDERSON: That, I can't do. I have a commitment

from 12:00 to 2:00. Could we do it after 2:00?

THE COURT: We could do it at 2:00 I suppose.

MR. ANDERSON: At 2:00 would be fine, Judge, for me.

THE COURT: That's fine. That's fine, Mr. Anderson.

MR. ANDERSON: I'm going to be nearby.

THE COURT: Why don't we say 2:00 o'clock on the 22nd,

and we'll try to get something definitive resulting from that.

MR. ANDERSON: And that will be in your courtroom or in

your chambers?

THE COURT: Probably in chambers. It will be on the

record, but we could probably do it in chambers so we can spread

things out.

MR. ANDERSON: Well, that works fine with me, Judge. I

appreciate your guidance. And you'll issue a minute order as

reflecting today's ruling?

THE COURT: I sure will.

MR. ANDERSON: Okay.

THE COURT: All right.

MS. BROWN: Your Honor, if I might have one additional

word before we get off the phone here? We would at a minimum

like the opportunity, given Mr. Trudeau has filed substantive

arguments in connection with his request for a scheduling order,

that we get a chance to respond, even beyond the specifics of

what they seek in discovery, the broad principles as to whether

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or not they should be entitled to discovery. I think we'd like

to have that on the papers before the Court and in advance of the

22nd.

THE COURT: Well, if you want to get me something, I'm

asking -- I'm giving them two weeks to file something.

MS. BROWN: Right.

THE COURT: You know, it's a substantial task that

they're going to be doing. If you want to get me something by

the 21st, you know, I'll look at it. But that will give you, you

know, just a few days to do that. I think I know what your

position is. But I'm not going to say you can't do that. I'm

trying to streamline this so that we can get moving on whatever I

decide we have to do rather than waiting until I get back in

mid-January.

MS. BROWN: Okay. Certainly, Your Honor. And we

completely concur with the need to move expeditiously. We hope

that, you know, although Mr. Trudeau will be filing his responses

and we will be meeting with Your Honor on the 22nd, that we would

still be given the opportunity for our replies post-holiday as to

whatever it is Mr. Trudeau ends up filing substantively with

respect to our motions.

THE COURT: Okay. Well, that's fine. I assumed that

you would do so as well.

MS. BROWN: Okay.

THE COURT: But I would like to get as much done as

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possible before I leave.

MR. MORA: Your Honor this is Michael Mora for the FTC.

Can we set a date for the FTC reply brief on the FTC

renewed motions?

THE COURT: Well, I'll see you before that date.

MR. MORA: Okay.

THE COURT: I'm going to see you before that date. I'm

trying, as I said, I'm trying to streamline this thing.

MS. BROWN: Understood.

THE COURT: Maybe I'll be able to make some decisions

that would avoid the need for a reply or at least trim it down a

bit. That's what my goal is anyway. If we just extend this

briefing out into January or February, by the time we get

started, it will be February or March, and I don't want to wait

that long. I think that there are certain things we can do

sooner rather than later. This has taken enough time as it is.

So I'll see you on the 22nd then.

MR. ANDERSON: All right. Thank you.

MS. BROWN: See you then, Your Honor. Thank you.

MR. MORA: Thank you, Your Honor.

(Proceedings concluded.)

C E R T I F I C A T E

I, Jennifer S. Costales, do hereby certify that the

foregoing is a complete, true, and accurate transcript of the

proceedings had in the above-entitled case before the Honorable

ROBERT W. GETTLEMAN, one of the judges of said Court, at Chicago,

Illinois, on December 3, 2009.

/s/ Jennifer Costales, CRR, RMR

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