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UNITED STATES DISTRICT COURT

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UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

_________________

United States of America, )

) No. 2:18-cr-00422-DJH

Plaintiff, )

)

vs. ) Phoenix, Arizona

) September 12, 2023

Michael Lacey, et al. ) 9:01 a.m.

)

Defendants. )

_____________________________ )

BEFORE: THE HONORABLE DIANE J. HUMETEWA, JUDGE

REPORTER'S EXCERPTED TRANSCRIPT OF PROCEEDINGS

TRIAL - DAY 4 - AM SESSION

Official Court Reporter:

Hilda Elizabeth Lopez, RMR, FCRR

Sandra Day O'Connor U.S. Courthouse, Suite 312

401 West Washington Street, Spc 30

Phoenix, Arizona 85003-2151

(602) 322-7256

Proceedings Reported by Stenographic Court Reporter

Transcript Prepared by Computer-Aided Transcription

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A P P E A R A N C E S

For the Government:

UNITED STATES ATTORNEY'S OFFICE

By: Mr. Kevin M. Rapp, Esq.

Mr. Peter S. Kozinets, Esq.

Mr. Andrew C. Stone, Esq.

Ms. Margaret Wu Perlmeter, Esq.

40 North Central Avenue, Suite 1200

Phoenix, Arizona 85004

kevin.rapp@usdoj.gov

peter.kozinets@usdoj.gov

andrew.stone@usdoj.gov

margaret.perlmeter@usdoj.gov

For the Government:

UNITED STATES DEPARTMENT OF JUSTICE

By: Mr. Austin Berry, Esq.

1301 New York Avenue, NW, 11th Floor

Washington, DC 20005

austin.berry2@usdoj.gov

For the Defendant Michael Lacey:

LIPSITZ GREEN SCIME CAMBRIA, L.L.P.

By: Mr. Paul J. Cambria, Jr., Esq.

42 Delaware Avenue, Suite 120

Buffalo, NY 14202

pcambria@lglaw.com

For the Defendant Scott Spear:

FEDER LAW OFFICE, P.A.

By: Mr. Bruce S. Feder, Esq.

2930 East Camelback Road, Suite 160

Phoenix, AZ 85016

bf@federlawpa.com

- and -

KESSLER LAW OFFICE

By: Mr. Eric Walter Kessler, Esq.

6720 N. Scottsdale Road, Suite 210

Scottsdale, AZ 85253

eric.kesslerlaw@gmail.com

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For the Defendant John Brunst:

BIRD MARELLA BOXER WOLPERT NESSIM DROOKS

LINCENBERG & RHOW, P.C.

By: Mr. Gopi K. Panchapakesan, Esq.

1875 Century Park E, Suite 2300

Los Angeles, CA 90067

gpanchapakesan@birdmarella.com

glincenberg@birdmarella.com

For the Defendant Andrew Padilla:

DAVID EISENBERG, P.L.C.

By: Mr. David S. Eisenberg, Esq.

3550 North Central Avenue, Suite 1155

Phoenix, AZ 85012

david@deisenbergplc.com

For the Defendant Joye Vaught:

JOY BERTRAND, ESQ., L.L.C.

By: Ms. Joy M. Bertrand, Esq.

P.O. Box 2734

Scottsdale, AZ 85252

joy@joybertrandlaw.com

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P R O C E E D I N G S

***** EXCERPT TRANSCRIPT

COURTROOM DEPUTY: Court is now in session.

(Proceedings commence at 9:01 a.m.)

THE COURT: All right. Please be seated. All right.

The record will reflect the presence of government's counsel,

the presence of defense counsel and clients are all present.

Counsel, I have to give you an update in terms of our

jurors. Currently we're missing four, and we've been advised

that one juror in particular missed her transportation, her

bus, and her bus will not now arrive until roughly 10:15,

10:30, and so obviously we're going to have to have a delayed

start unless you wish to take some other measure.

And so is the government counsel okay with that

delayed start?

MR. STONE: Yes, Your Honor.

THE COURT: And of course, that assumes that we have

all of the remaining jurors arriving.

Mr. Cambria, are you okay with that delayed start?

MR. CAMBRIA: I am, Your Honor.

THE COURT: Ms. Bertrand?

MS. BERTRAND: Yes, thank you.

THE COURT: Mr. Panchapakesan?

MR. PANCHAPAKESAN: Yes, Your Honor.

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THE COURT: Mr. Feder?

MR. FEDER: Yes. Yes.

THE COURT: Mr. Eisenberg?

MR. EISENBERG: Yes, Your Honor.

THE COURT: All right. And so before we do that,

though, I do want to provide you with a couple of notes that I

made. This is regarding the exhibits.

In considering the e-mails from the unindicted

co-conspirators, I know that there was an individual by the

name of Jess, and there was another, I'm going to reserve my

ruling on whether the e-mail sender, if it is indeed one of

these unindicted co-conspirators, had knowledge of the

conspiracy at the time the e-mail was sent, and so you will

have to lay that appropriate foundation to put forward that

those unindicted co-conspirators have knowledge, and that goes

for the other staff who are on some of those e-mail chains.

And this is in particular with regard to e-mails that are sent

directly from them and to them. And so before you move to

introduce that exhibit, make sure that that foundation is laid.

I also looked again a little more closely at the

invoices to the TER, and I am going to overrule the cumulative

objection. And my reason for doing that is in looking at it

more closely, the number of invoices that were paid, the

duration of which they were paid is relevant to the knowledge

of the co-conspirators. And at the end of the day the amount

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which was spent in those invoices to TER is relevant.

Now, I offer you this: The cumulative objection, I

think Ms. Bertrand put forward waste to trial time and

resources, well, I would offer that if that is the case and

part of the objection, then perhaps you could meet and confer

and maybe decide to stipulate to some of those invoices coming

in, otherwise I think the government is within its right to

introduce all of those invoices. So that's how we will proceed

with that.

I looked at the government's request for the curative

instruction regarding the opening arguments, and let me be very

clear again, in my order in the motions in limine, I

specifically stated that no defendant is entitled to use the

advice of counsel defense. There has been no showing of a

privilege waived; there has been no showing of the four factors

in which to lay that claim.

And so I will say this: Though Mr. Cambria came

fairly close in violating that order, I'm not going to permit

anyone else to reference it. Nobody is going to talk about,

you know, having a legal department or hiring lawyers and

things of that nature because that infers that you relied on

those counsel, and the advice of counsel has been waived. And

so if someone makes a statement along the lines of, I think

Mr. Cambria said: Carl hired a bunch of lawyers to advise

them, and that he had a whole cast of attorneys advising him.

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That's on the line. And so if there's an objection, I will

tell the jury to disregard that specific statement, and so

that's how we will proceed in that fashion.

MR. FEDER: Judge, clarification, please. I don't --

I know the Court doesn't know this case that well, but in 2012,

a lawyer named Elizabeth McDougall was hired by Backpage to

take over the moderation of the website. Mr. Spear was no

longer a part of that, and I intend in my opening statement to

say that. It's not advice of counsel; it is a lawyer taking

over the moderation aspect of the website.

THE COURT: Are you going to introduce that into

evidence in your case in chief?

MR. FEDER: Yes. I mean, you know, Mr. Ferrer will

testify to that presumably. He worked with her exclusively.

My understanding is from 2012 to 2018.

THE COURT: But the difference here is that you cannot

say that she gave advice unless you disclose what the content

of the question was.

MR. FEDER: This is almost like -- it's almost, I

mean, I would analogize it to an alibi. One other person is

taking over the job from another, and that's what I'm going to

say in my opening, and I assume that there is no problem with

that, but I am at the risk of having the government try to

object and the Court going: Well, this is not advice; this is

somebody physically business-wise took over the job.

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THE COURT: And what was the job?

MR. FEDER: The job was the moderation process of

Backpage for the next six years.

THE COURT: Who wishes to respond?

MR. BERRY: Your Honor, Austin Berry. I'm happy to

respond. The issue with Liz McDougall is that if they are

bringing up the fact that she holds a law degree or that she's

licensed by the bar, then that carries the imprimatur of legal

counsel and advice. And the reality was that Liz McDougal was,

in the pejorative term of the defendants, which the evidence

will show, they refer to her as the pie catcher, meaning that

she was the public relations person that they put on CNN, they

had her go to the New York City Council to sit in those

hearings and answer those questions, and she was not saying: I

as a lawyer have done this. Or even if she did, they haven't

put forward, as you said, what they should. So she was really

just the public relations person.

And the fact that she's lawyer is really of no import

here, and it is used here to smuggle in this theory of, well,

ladies and gentlemen of the jury, Liz McDougall took over in

this role and she's a lawyer, wink, wink. So whether they say

it expressly or not, or push up against the line as Your Honor

said Mr. Cambria did here, that is what they are trying to

accomplish.

So I think that they should not be allowed to put that

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in front of the jury as if that was some sort of explanation

for their behavior because that's precisely what the advice of

counsel defense is meant to guard against.

THE COURT: Well, I think if Mr. Feder describes her

as being a lawyer hired to perform this job as a lawyer, then I

do have a problem with that. If you suggest that she was hired

and, oh, by the way, she has a law degree, it's a little bit

closer call.

But Mr. Berry, you can clean that up with Mr. Ferrer

on redirect and he can basically say: Well, she wasn't hired

in her capacity as a lawyer, was she? She was no more than a

public relations person, and I think that's the way that it

should go.

But there's a fine line, Mr. Feder, and that's what

I'm telling you is that if you have a statement that she was

hired in her capacity as a lawyer to perform this job as a

lawyer would, then I will expect an objection and I will

clarify for the jury that they are to disregard that statement.

MR. FEDER: She is an expert on Section 230 as a

lawyer.

THE COURT: That has nothing to do with this case.

MR. FEDER: But she's a lawyer that's an expert on the

moderation practices. And I think that is not only relevant,

but to preclude us from using that is tantamount to saying that

she's just some stranger that doesn't have any knowledge,

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expert knowledge, on that subject matter that she was taking

orders.

THE COURT: Well, Mr. Feder, read my order on the

Motion in Limine. No 230 information comes in. This is not a

230 case.

MR. FEDER: We should talk about that too then, Judge.

THE COURT: No. It's already been decided.

MR. FEDER: You're right. It has been decided, and

let me read you exactly what the order says. This is

Document 1081, page 20, lines 27 to 28. This is in regards to

the expert that the defense disclosed years ago. The

government filed a Motion in Limine against Eric Goldman, who

is a professor at Santa Clara University. Here's what the

court said: Testimony Section 230 was meant to incentivize

Internet providers to engage in moderation practices will be

allowed.

I intend in my opening, unless the Court is going to

preclude even that, saying that we have expert testimony, lay

testimony, that Section 230, a statute, was enacted to

incentivize Internet providers to engage in moderation

practices, and it is in response to Mr. Stone's claim that the

moderation at Backpage was designed to hide prostitution ad

terms.

So they opened up the door, number one. This is the

order of the Court. Number two, is the Court now going to

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preclude that at this stage of the game where I am about to

give opening statement?

THE COURT: I think my order speaks for itself.

MR. FEDER: It does. I just read it to you.

THE COURT: Mr. Berry.

MR. BERRY: Your Honor, your order at 1643, Document

1643, page 10, clearly says that you're granting the

government's motion in limine. "Defendants may not argue that

Section 230 of the CDA immunizes defendants from Counts 2

through 51" of violating the Travel Act.

I don't understand why they are bringing this up now

when your order was crystal clear on this point; that if it

doesn't deal with the same charges, then we should not be

talking about it in this case. And the danger that happens if

they are allowed to bring this type of thing in is we end up in

a mini-litigation about what it all means, and how all of these

CDA cases were all basically litigated with the lack of

information that this jury is going to see.

So the fact that they prevailed on any other CDA

litigation is of no moment here because those courts were not

privy to the information that these defendants were hiding from

each and every one of those courts that this jury is going to

see. And so we think your court -- your order on this issue

should stand, and that there should be no mention of the CDA

whatsoever.

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THE REPORTER: Mr. Feder, I can't hear you.

MR. FEDER: That's apples and oranges. That order,

1643, page 10, lines 5 through 8, I believe says: "To date, no

party has provided this Court with case precedent holding that

the CDA immunizes criminal activity like that alleged here."

That's not what I'm asking. I am saying Mr. Stone said in his

opening several times, once in regard to Mr. Padilla and

Ms. Vaught, and another time in general that the -- and put up

a slide on the overhead that the defendants attempted to use

moderation as if it was them and them alone, used moderation to

hide prostitution terms. And that opens the door, number one.

Number two, this -- they are misreading your order and it

doesn't overturn Judge Brnovich's order that the CDA can come

in as long as we don't argue it immunizes them from criminal

prosecution, which I do not intend.

THE COURT: Well, if you bring it in in terms of

companies were doing this under the law, and she was hired to

do this, but you cannot cross the line that she was giving

advice of counsel.

MR. FEDER: I don't intend to do that.

THE COURT: She was hired in her capacity as a lawyer.

She was hired in her capacity as a moderator.

MR. FEDER: I don't know how many other times I could

say it, Judge, but I mean, we got the orders. This court --

this court said we should try to be very careful and use them

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in a -- in the proper way, which is what my intent is, which is

why I'm bringing this up.

THE COURT: But you're not going to get into the

specifics of what the CDA is because this case has nothing to

do with that.

MR. FEDER: No intention other than what I just said,

which is what the language from the order in Document 1081. I

am going to quote that, although it's not going to be a quote.

THE COURT: You're going to quote from an order in

your opening. Very creative, Mr. Feder.

MR. FEDER: Just going to use the language since it

was what we're allowed to do.

MR. BERRY: Your Honor, one more thing on this point.

What I want to circle back to about Liz McDougall is that

Mr. Feder mentioned something about her being an expert on

moderation. I don't believe that she's been noticed to us as

any kind of expert, so I would think that that would be beyond

the bounds of what he could say about that.

So in other words, what he's saying is: I'm not going

to say that we relied on her expert legal advice 'cause I can't

do that under advice of counsel because Your Honor has said I

can't do that. But what I am going to do is I am going to say:

Well, she was an expert on this other thing, except he hasn't

noticed her as an expert, to my knowledge. If I am mistaken

about that, then they can correct me, but my understanding is

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she's not been noticed as an expert.

THE COURT: Have you noticed her as an expert?

MR. FEDER: We are not noticing her as an expert.

Mr. Ferrer, I believe, unless the government is going to assert

that Ferrer is not going to claim that she wasn't very

experienced in, shall we say in CDA 230, we are not bringing

her in as an expert. She was a lawyer that handled in her

practice, prior to coming to Backpage, Section 230 and other

issues with Internet companies, and that's fair game.

THE COURT: Let me ask you -- let me ask you a

clarifying question, so are you bringing her in in your case in

chief?

MR. FEDER: She is noticed. She is listed on our

witness list. I don't know what we are going to do.

THE COURT: But she is not noticed as an expert?

MR. FEDER: She is not.

THE COURT: And so you can't refer to her as one.

MR. FEDER: I'm sorry?

THE COURT: You cannot refer to her as one in your

opening.

MR. FEDER: Note my objection, please, for the record.

THE COURT: They are on the record, Mr. Feder.

Mr. Eisenberg.

MR. EISENBERG: Yes, Your Honor, there is more to this

issue than has been presented to you. For example, I notice

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from our session on Friday, when we went through the

government's exhibits, there are at least two or three of them

that refer or are addressed to lawyers. For example, there's

one from the State Attorneys General, this is Exhibit 73,

addressed to Samuel Fifer of the law firm called Sonnenschein

Nath & Rosenthal. I won't go through it, but that is one of

the ones that the government intends to use.

I would proffer to Your Honor that there were times,

excuse me, when Mr. Fifer worked for Backpage. I am going to

get into something else in a moment in terms of what the scope

of his duties were.

I also note, just to complete this, that Exhibit 95 is

from Mr. Spear to Mr. Ferrer with a cc to Mr. Steve Suskin, who

I believe is also someone from the outside who played a role in

this case to some extent. And then Exhibit 99 is from

Mr. Spear to Mr. Suskin, who I believe is also a lawyer, and

then there is a cc to --

THE COURT: Well, I'm looking at 99. It says e-mail

from Allen, is that Allen Suskin to Harold and Karitya

Anderson?

MR. EISENBERG: Your Honor, I am sorry, I am referring

to the number they used in their list of exhibits. So I think

number 99 is Exhibit 938, and exhibit, what did I say, 76 -- 73

is their Exhibit -- I shouldn't use the word "exhibit," 902 is

the number there.

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So there are references that the government is making

to lawyers, and it seems as though they want to have their cake

and eat it to. If it's not a good reference as far as defense

goes, and I would debate that, then they want it to come in.

Now, I do want to expand this to some extent, Your

Honor, there are instances all through this case, at least in

the historical facts of the case, where, for example, my client

heard from Mr. Ferrer with respect to what he was told, Mr.

Ferrer, by others who were involved in making the moderation

decisions, what words are good, what words are not, what photos

are good, what photos are not, and some of those people are the

people we are talking about here.

I don't intend -- to go along with Your Honor's

ruling, I will -- I note Mr. Feder's objection, and I am with

it, however, I won't refer to them in my opening as lawyers,

but I think I have every right to refer to them as people who

participated in the moderation process. It wasn't just my

client. In fact, he had very little to do with actually

conceiving of what would be involved with moderation, the

words, the photos, et cetera.

So now that's not advice of counsel. That's just

simply people are there in, I'll call it a policymaking

position, who are aiding Mr. Ferrer and others in passing on

information concerning how moderation is going to work. It

goes straight to my client's knowledge and intent because he's

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being told what it is that people above him are suggesting.

No, I'm sorry, should be put into practice with respect to

these terms and photos.

MR. CAMBRIA: Your Honor, may I speak?

THE COURT: Yes.

MR. CAMBRIA: Good morning.

THE COURT: Good morning.

MR. CAMBRIA: I guess the problem I'm having is that

we should be able to bring out the facts. Knowledge, intent

and good faith are relevant here. Every time that there is

some event e-mail or something else that the government claims

puts our clients on notice of guilty knowledge, if you will,

the Court says that that's fine. Here we have a situation

where the government would like the jury to believe that this

is just a money-making machine; there's no care as far as the

law; it's all about money.

If clients are sitting there and Mr. Ferrer is

referring to and consulting with lawyer after lawyer about

which words should be stripped out, what is the appropriate

procedure to run a website where third-party speech is found?

These are things that he's doing, and there are a number of

e-mails here and so on with lawyers copied on them. I think

that it's fair to be able to show that there were a bunch of

individuals who were attorneys and that they were in fact

advising Mr. Ferrer as to how to run the website, and that that

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is a relevant fact. It goes towards good faith and knowledge

and intent on the part of all the other people who would be

aware of that.

If you let the government put in everything that you

say, well, they are aware of this, that and the other and it's

all negative, well, they should be able to put in the part

that's not negative. If you're sitting there and working there

and you see a number of attorneys advising the person running

it what to do, it seems to me that is legitimate. That's a

fact. It's not an opinion or anything else. It's a fact that

happened in this case, and the jurors should be able to

evaluate that when they determine knowledge and intent and good

faith on the part of our clients.

I don't understand -- we're not saying that these

particular lawyers gave our clients specific advice about a

specific thing. What we're saying is the atmosphere there was

such that our clients saw all these attorneys that were being

used, and they were directing how certain things would happen,

especially with regard to moderation. That is a relevant fact.

THE COURT: Well, you're re-litigating something that

I've already written on.

MR. CAMBRIA: Well --

THE COURT: The law in the circuit is you do not get

to raise the advice of counsel unless you show a specific

waiver as to a particular issue and what that advice was

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particularly sought. No one on the defense side has done that.

There has been no waiver of the privilege that I know. If

you're willing to do that at this late date, that's fine, but

at this juncture, that has not been done, and under the circuit

precedent I'm not going to permit it.

MR. CAMBRIA: But Your Honor, that's not what is

happening. I -- I'm not saying --

THE COURT: Nothing has happened yet, Mr. Cambria. We

haven't even finished opening arguments.

MR. CAMBRIA: I'm not saying that. This isn't a

situation of somebody getting specific advice from one of these

lawyers that Carl Ferrer hired. This is simply people

observing the fact that this is being run professionally, and

that is a fact that is relevant. It goes to good faith. That

isn't a situation of a specific lawyer Carl hired gave advice

to X. That isn't that at all. He is running a professional

operation with individuals who supposedly know how to do so,

and that's a relevant fact. That's what I'm saying.

As far as waiving, why can't we put a witness on the

stand and go through direct and establish the foundation for

advice of counsel? There is two different things going on

here.

THE COURT: Well, if you're -- if you target it to a

specific question, that's the law, Mr. Cambria.

MR. CAMBRIA: I am not disputing that fact, except

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that you say a specific question or a general, a general

procedure also because sometimes you can't anticipate every

single question, but you can anticipate a procedure.

THE COURT: And who is the lawyer that's going to be

giving the advice, that's the identity question that I don't

know, that saw a handful of e-mails from some unknown lawyer in

some law firm somewhere in New York or someplace? That's the

only thing I have seen.

MR. CAMBRIA: New York --

THE COURT: There has not been any other information

related to advice of counsel that I have seen in which any

defendant has sought a specific clarifying question to a

lawyer, and it's -- and if you haven't provided notice at this

point, I'm not going to allow it.

MR. CAMBRIA: Two -- two --

THE COURT: You can finish making your record,

Mr. Cambria. I am not going to change my ruling.

MR. CAMBRIA: -- two different things. One, I am not

talking about advice of counsel. I am talking about

establishment of the facts, and that there was a professional,

appeared to be, organization created by Ferrer that these

individuals should be able to rely on. Just like they say a

bad look can be demonstrated by certain things that they want

to put in; a good look can also be demonstrated. That's

different. That's not advice of counsel. That is presence of

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a professional organization, and they are the ones who are

saying: Do this, do that.

THE COURT: I don't think I precluded you from doing

that on cross-examination.

MR. CAMBRIA: Well, I just --

THE COURT: I don't -- I don't understand the

terminology that you're using, "professional organization."

MR. CAMBRIA: All I'm saying is I should be able to

say to Mr. Ferrer: Okay. You hired X, and X gave you advice

on the website. What was the advice? And it is: Don't put

this in, don't put that in, you can take that out, take that

out, whatever it was. That to me is a fact that's relevant to

the good faith, intent, knowledge on the part of our clients.

THE COURT: Did you disclose that information to the

government?

MR. CAMBRIA: The government knows all about it. It's

their witnesses.

THE COURT: Did they disclose that information to you

on which Mr. Ferrer is going to say he relied?

MR. BERRY: So I think the short answer, I think, is

no in the sense of it's not disclosed to us in an advice of

counsel theory, right. And so what I think Mr. Cambria is

trying to do here is dance around this idea. He is using this

terminology, "professional organization," because he wants to

say this is a professional organization; this is a corporation

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and they did things that normal professional corporations like

Facebook and Google can do, and they have these people give

them advice. That's just a fact, Your Honor. And oh, by the

way, it's also a fact that that's a lawyer, at which point they

will then turn in closing argument and wink at the jury and

say: They have these people giving them advice and they were

lawyers. Get it? That's the whole point of advice of counsel,

which Your Honor has very strongly and correctly, we believe,

ruled on, and they are trying to dance through that and trying

to avoid your ruling without complying with what what the Ninth

Circuit requires on this issue, and so we would ask that Your

Honor stand by that ruling and make clear that this

professional organization, if it comes in as subterfuge for

advice of counsel, should also be excluded.

MR. CAMBRIA: First of all, I'm not relying on advice

of counsel. What I'm doing is saying that this was a

professional organization and there are certain assumptions

that people can reasonably make when there is a professional

organization. That's the first part.

The second part is I can establish the advice of

counsel foundation in my direct exam of the expert, of the

counsel. There is nothing that indicates, you know, that

there's a specific time when I would have to do that as opposed

to when they were on the stand in direct, but this isn't that.

This is just establishing the factual makeup of the Carl Ferrer

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enterprise.

THE COURT: Before you do that, you're going to have

to get an express waiver of the privilege from the particular

counsel.

MR. CAMBRIA: There is no privilege.

THE COURT: And the particular counsel whose name that

was, and the particular advice sought, and the particular

information given by that counsel, Mr. Cambria. That's how

advice of counsel works.

MR. CAMBRIA: But -- but --

THE COURT: You don't get it both ways. My order

stands.

MR. CAMBRIA: But I am not --

THE COURT: So let me ask my courtroom deputy, what is

the status of the jury?

All right. We're still waiting for the one who is

delayed by the bus. So with that, we will stand in recess

until that juror joins us.

MR. CAMBRIA: I'd like to finish my record when you

can.

THE COURT: I'll give you five minutes, Mr. Cambria.

You've spoken ad nauseam here on the same topic over and over.

MR. PANCHAPAKESAN: Your Honor, I'd like to be heard

at some point.

THE COURT: Please don't interrupt. We have a court

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reporter who is trying very hard to take this down.

Mr. Cambria, please finish.

MR. CAMBRIA: Thank you so much. I am not saying that

individuals are relying on some lawyer that Carl hired for

advice. I'm not saying that. All I'm saying is that I should

be able to establish that they were aware of the fact that

there were a number of professionals hired to advise Carl on

running the website. I'm not saying that they gave my client

or one of the others specific advice. There's a difference.

This is just a factual, this is the scenario, this is the

picture, and that's all I'm saying.

THE COURT: Mr. Panchapakesan.

MR. PANCHAPAKESAN: Yes. Apologies, Your Honor. I

think what the Court should be aware of is that Mr. Ferrer,

during dozens of interviews with the government --

THE COURT: Bless you.

MR. PANCHAPAKESAN: -- was asked about attorney

advice. Now, we previously moved to dismiss for what we

thought were privileged invasions. That was denied. But if

the Court would look at Docket 942, for example, where the

defense lays out excerpts from these memorandum of interview,

Mr. Ferrer is asked by the government about, for example, on

the April 5th interview, Attorney Don Moon advised that

anonymous speech on the Internet should be protected under the

First Amendment. April 17th, 2018 interview, Attorney Moon

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frequently advised the First Amendment and mens rea

requirements provided legal protection against federal criminal

prosecution. And in that memo, same memo, Attorney Sam Fifer

of SNR Dentons prepared a legal memo advising that it was legal

to remove content from classified ads. There's dozens of

examples of this where the government has asked Mr. Ferrer

about the very type of quote-unquote advice that we'd like to

cross-examine Mr. Ferrer on. It comes directly from his

memorandum of interview, and the government opposed the motion

at Docket 1000. And their primary argument, which is on page,

I think three of their opposition is: These statements cannot

be privileged because they have not remained confidential.

The government goes on to say: Even if defendants

hadn't publicly asserted these same theories in scores of cases

throughout the country over the last decade, defendants reveal

these theories in this case in the earliest filings. The

government's response is basically, even if we had gotten to

advice, this quote-unquote advice, the essence of it has become

public.

And so in a sense we are just asking as to Mr. Ferrer,

cross-examine him on the very subjects that the government has

already interviewed him on whether or not it's called advice,

and I'd ask the Court to look back at those pleadings to sort

of get a sense for numerous instances in which --

THE COURT: But the matter has been litigated. It's

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been litigated and ruled upon. Is that my understanding?

MR. PANCHAPAKESAN: It has. The privilege invasion

has. My only point is that the government shouldn't be able to

ask Ferrer about these things, whether we call it advice or

not, and the defense be precluded from cross-examining him on

those same subjects.

MR. BERRY: They are not precluded from doing that if

they follow this Court's order on the advice of counsel defense

and do all of those steps, which includes reviewing what they

said, what they asked, what was told in each of those four

factors that Your Honor has laid out.

The simple fact that this has already been litigated

and asking Your Honor to go look at those pleadings, as Your

Honor pointed out, it's been ruled on. We shouldn't be

re-litigating that issue right now, and they have not complied

with your order on the advice of counsel defense, and,

therefore, they should not be allowed to deal with it.

THE COURT: All right. You've made your record. I'm

not going to change my decision, and so we'll stand in recess.

We'll get an update in about quarter after the hour as to the

status of our juror. Give her at least some time to get

settled in before we come in.

COURTROOM DEPUTY: All rise.

(Recess was taken at 9:37 a.m.)

(Proceedings reconvened at 10:26 a.m.)

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THE COURT: Please be seated. Now, it appears our

juror has arrived. Let's give her a couple minutes to cool

down.

In the meantime, I did have a chance to look at the

prior order at 1081. This was issued back in 2020 regarding

the Section 230. I think consistent with this Court's order,

the order here clarifies testimony related to the policy behind

Section 230 or how it should work will be precluded. That was

the precise language. But it goes on to say: Testimony that

Section 230 was meant to incentivize Internet providers to

engage in moderation practices will be allowed. And so the

Court will permit that testimony to that extent.

Now, there is a fine line to be drawn, though, because

this Court previously has clarified that because this is a

criminal proceeding, Section 230 doesn't necessarily apply and

so be mindful of that that this is a civil rule and law meant

to shield companies from civil liability, not criminal

liability, and so just keep aware of that.

I tried to think about Mr. Cambria's position a little

bit more, and let me see if I can articulate it in a way that

Mr. Cambria can agree with. What I understand you to be

saying, Mr. Cambria, is that you should be entitled to ask

Mr. Ferrer whether or not his company was essentially run in a

professional manner, or he had, for example, an HR department

or whatever it may be, and that people relied on one another in

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terms of what the operation entailed. That is different than

asking the legal department, for example, particular questions

about what ad can run, what can't be included, and so on. So

if you stay away from that, I'll permit some leeway there.

With that, we have our jurors at the ready. We're

going to plug on until about 12:30, and you all indicated that

you have a preferred order of openings of who is going first.

Mr. Feder, who is going second?

MR. EISENBERG: I am, Your Honor.

THE COURT: And then Ms. Bertrand.

MS. BERTRAND: Yes.

THE COURT: Please be at the podium at the ready,

Mr. Feder. Please bring in the jury. All rise for the jury.

(Jury is present)

***** END OF EXCERPT

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C E R T I F I C A T E

I, HILDA E. LOPEZ, do hereby certify that I am duly

appointed and qualified to act as Official Court Reporter for

the United States District Court for the District of Arizona.

I FURTHER CERTIFY that the foregoing pages constitute

a full, true, and accurate transcript of all of that portion of

the proceedings contained herein, had in the above-entitled

cause on the date specified therein, and that said transcript

was prepared under my direction and control.

DATED at Phoenix, Arizona, this 13th day of

September, 2023.

s/Hilda E. Lopez_______

HILDA E. LOPEZ, RMR, FCRR

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