Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 1 of 291 Page ID #:1302 EXHIBIT A A EXHIBIT A Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 2 of 291 Page ID #:1303 1 2 3 UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA 4 5 6 7 8 9 10 11 --oOo-AF HOLDINGS, LLC, ) ) Plaintiff, ) )CASE NO vs. )3:12-CV-02396-EMC ) JOE NAVASCA, ) ) Defendant. ) ___________________________________) 12 13 14 15 16 DEPOSITION OF: TAKEN BY : COMMENCING LOCATION : : DAY, DATE REPORTED BY PURSUANT TO ORIGINAL TO : : : : 17 18 19 PAUL HANSMEIER NICHOLAS RANALLO, ESQ. MORGAN PIETZ, ESQ. 10:00 - 6:15 P.M. PREMIER BUSINESS CENTER 225 BUSH STREET, 16TH FLOOR SAN FRANCISCO, CALIFORNIA 94104 TUESDAY, FEBRUARY, 19TH, 2013 ANGIE M. MATERAZZI, CSR NO. 13116 NOTICE OF DEPOSITION BRETT L. GIBBS, ESQ. 20 21 PAGES 1 - 290 22 JOB NO. 131194 23 24 25 California Deposition Reporters Page: 1 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 3 of 291 Page ID #:1304 1 APPEARANCES OF COUNSEL 2 3 4 FOR THE PLAINTIFF: 5 BRETT L. GIBBS, ESQ. PRENDA LAW, INC. 38 MILLER AVENUE, #263 MILL VALLEY, CALIFORNIA 94941 415-325-5990 BLGIBBS@WEFIGHTPIRACY.COM 6 7 8 9 10 FOR THE DEFENDANT: 11 NICHOLAS RANALLO, ESQ. LAW OFFICE OF NICHOLAS RANALLO 371 DOGWOOD WAY BOULDER CREEK, CALIFORNIA 95006 831-703-4011 NICK@RANALLOLAWOFFICE.COM 12 13 14 15 16 FOR THE DEFENDANT: 17 18 19 20 MORGAN E. PIETZ, ESQ., CO-COUNSEL THE PIETZ LAW FIRM 3779 HIGHLAND AVENUE, SUITE 206 MANHATTAN BEACH, CALIFORNIA 90266 310-424-5557 MPIETZ@PIETZLAWFIRM.COM 21 22 23 ---O0O--- 24 25 California Deposition Reporters Page: 2 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 4 of 291 Page ID #:1305 1 2 I N D E X 3 INDEX OF EXAMINATIONS 4 5 Examination by Mr. Ranallo 6 Examination by Mr. Pietz 7 Further Examination by Mr. Ranallo 8 Examination by Mr. Pietz 9 Further Examination by Mr. Ranallo ........................6 .........................25 ...............36 .........................37 ...............41 10 Further Examination by Mr. Pietz 11 Further Examination by Mr. Ranallo 12 Further Examination by Mr. Pietz .................52 13 Further Examination by Mr. Pietz .................54 14 Further Examination by Mr. Ranallo 15 Further Examination by Mr. Pietz 16 Further Examination by Mr. Ranallo 17 Further Examination by Mr. Pietz 18 Further Examination by Mr. Ranallo 19 Further Examination by Mr. Pietz 20 Further Examination by Mr. Ranallo 21 Further Examination by Mr. Pietz 22 Further Examination by Mr. Ranallo 23 Further Examination by Mr. Pietz 24 Further Examination by Mr. Ranallo 25 Further Examination by Mr. Pietz California Deposition Reporters .................41 ...............46 ...............66 .................68 ...............79 .................80 ...............85 .................88 ..............104 ................106 ..............137 ................139 ..............147 ................148 Page: 3 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 5 of 291 Page ID #:1306 1 Further Examination by Mr. Ranallo 2 Further Examination by Mr. Pietz 3 Futher Examination by Mr. Ranallo 4 Futher Examination by Mr. Pietz 5 Futher Examination by Mr. Ranallo 6 Futher Examination by Mr. Pietz 7 Further Examination by Mr. Ranallo 8 Futher Examination by Mr. Pietz 9 Futher Examination by Mr. Ranallo ..............151 ................155 ...............156 .................161 ...............165 .................165 .................171 ...............173 10 Futher Examination by Mr. Pietz 11 Futher Examination by Mr. Ranallo 12 Futher Examination by Mr. Pietz 13 Futher Examination by Mr. Ranallo 14 Futher Examination by Mr. Pietz 15 Further Examination by Mr. Ranallo 16 Futher Examination by Mr. Pietz 17 Futher Examination by Mr. Ranallo 18 Futher Examination by Mr. Pietz 19 Futher Examination by Mr. Ranallo 20 Futher Examination by Mr. Pietz 21 Futher Examination by Mr. Ranallo 22 Futher Examination by Mr. Pietz 23 ..............170 .................174 ...............183 .................189 ...............193 .................193 ..............194 .................196 ...............263 .................270 ...............275 .................276 ...............284 .................284 ---o0o--- 24 25 California Deposition Reporters Page: 4 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 6 of 291 Page ID #:1307 1 2 EXHIBITS MARKED FOR IDENTIFICATION No. Description Page 3 4 101 ADR Certification by Parties and ...........52 Counsel 102 ADR Certification by Paries and Counsel 103 Notice for Withdrawal and Substitution ....132 of Counsel 104 Plaintiff's Notice of Dismissal Without ...150 Prejudice of Remaining Doe Defendants 105 1 page AVN - Exile Distribution Adds ......156 Heartbreaker Films to Roster 106 Nina Mercedez: Popular Demand, Coming .....157 From Exile - XBIZ.com 107 Plaintiff AF Holdings LLC's Response to ...235 Defendant Joe Navasca's Motion to Post Undertaking 108 Paul Hansmeier's signature on a blank .....235 piece of paper 109 1-page of signature exemplars for Paul ....236 & Peter Hansmeier 110 Petition for Discovery Before Suit to .....238 Identify Responsible Persons and Entities 111 Business Record Detail, MCGIP, LLC 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 ...78 .......249 21 22 ** DELINEATES MARKED TESTIMONY. 23 24 25 California Deposition Reporters Page: 5 Case Document 69--1 Fned 03/05/13 Page 7 of 291 Page #SAN FRANCISCO, CALIFORNIA, 2013 TUESDAY, FEBRUARY 19, 10:00 A.M. PAUL HANSME IER the deponent herein, after having been first duly sworn, was deposed and testified as follows: EXAMINATION BY MR. RANALLO Q. Good morning. Could you state your name for the record, please. A. Paul Hansmeier. Q. And Mr. Hansmeier what is your address? 1 Q. Is that your home address? A. That's my business address. Q. What's your home address? M. GIBBS: Objection. Privacy. BY MR. RANALLO: Q. Mr. Hansmeier have you ever been deposed before? A. I have not. Qlifomia Repcrlens age 6 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 8 of 291 Page ID #:1309 1 2 Q. Do you know how depositions work? attorney, are you not? 3 MR. GIBBS: 4 THE WITNESS: 5 You're an Compound. Objection. I'm an attorney. BY MR. RANALLO: 6 Q. 7 depositions? 8 A. I know what a deposition is. 9 Q. Have you ever conducted one? 10 A. I have not. 11 Q. Basically, what's going to happen is I'm going And are you familiar with the procedures for 12 to ask you a bunch of questions on the subjects that you 13 were previously noticed on. 14 understand a question, please let me know and I will 15 rephrase it for you. 16 going to assume that you understood it. 17 you can try to refrain from nodding, pointing, 18 gesturing, anything that the court reporter can't easily 19 pick up and sort of the same thing with uh-huh, huh-uh, 20 those kind of answers. If for any reason you don't If you do answer a question, I'm 21 MR. GIBBS: Is that a question? 22 MR. PIETZ: It's an admonition. 23 MR. RANALLO: In addition, if 24 Let's go ahead and get started here. 25 California Deposition Reporters MR. PIETZ: I'd like to add an admonition. Page: 7 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 9 of 291 Page ID #:1310 1 Just to be clear, you'll be given the opportunity to go 2 over the transcript before we finish today. 3 understand that your responses in this deposition are 4 under penalty of perjury as if you were being sworn on 5 the stand in a court of law. 6 to correct things that you say here today. 7 should understand that if you subsequently try and 8 correct your testimony, that an inference can be drawn 9 about your credibility and the corrections can be used 10 against you. THE WITNESS: 12 MR. GIBBS: MR. PIETZ: 18 19 Yes. And as to that, I would like to We'll put a standard stipulation on the record. 16 17 However, you the reserve the right to do that. 14 15 You'll have an opportunity Do you understand? 11 13 You should MR. GIBBS: Just reserving the right. BY MR. RANALLO: Q. Mr. Hansmeier what is your position with AF Holdings? 20 A. I do not have a position with AF Holdings. 21 Q. Are you a member of AF Holdings? 22 A. I am not. 23 Q. You have no ownership interest in the entity 24 25 whatsoever? A. California Deposition Reporters That's correct. Page: 8 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 10 of 291 Page ID #:1311 1 Q. 2 entity? 3 A. 4 And who does have an ownership interest in the The ownership of AF Holdings -- can you please clarify your question? 5 Q. Who are the members of the AF Holdings? 6 A. The membership interests of AF Holdings are 7 8 9 10 11 held in a trust. Q. And who are the beneficial owners of AF Holdings? A. Well, the beneficial owner of AF Holdings is a trust. 12 Q. Who does that trust disburse income to? 13 A. Well, I don't believe there is any noticed 14 topic regarding a trust and the terms of the trust. 15 That being said, I'm not aware that there are any named 16 beneficiaries of the trust. 17 18 Q. does that money go? 19 20 So when AF Holdings get a settlement, where MR. GIBBS: Objection. I believe this is outside of the scope of the numbered -- 21 MR. RANALLO: How about AF Holdings revenues 22 derived from the authorized licensing and distribution 23 of the work, including distribution of such revenues by 24 AF Holdings and the identities of the recipients. 25 California Deposition Reporters MR. GIBBS: But it doesn't ask for who. Page: 9 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 11 of 291 Page ID #:1312 1 2 MR. PIETZ: Objection duly noted. Are you instructing him not to answer? 3 4 Okay. MR. GIBBS: No. I'm just pointing that out for the record. 5 MR. PIETZ: 6 THE WITNESS: 7 Could you please restate the question? 8 You can answer. BY MR. RANALLO: 9 10 11 Q. When AF Holdings receive a settlement, who gets that money and how is it distributed? A. 12 Well -MR. GIBBS: Objection. You're assuming 13 something that hasn't been stated yet. 14 BY MR. RANALLO: 15 16 Q. Has AF Holdings ever accepted a settlement in its copyright actions? 17 A. Yes. 18 Q. When it receives such settlements, where do 19 they go and who are they distributed to? 20 A. I guess that depends on the case. 21 Q. Could you explain that, what sort of 22 23 circumstances could determine that? A. For example, if AF Holdings represented by, 24 say, an attorney in Maine, for example, and if AF 25 Holdings enters into a settlement agreement with a California Deposition Reporters Page: 10 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 12 of 291 Page ID #:1313 1 defendant in one of those cases, then the revenues from 2 that settlement would go into the trust account for the 3 attorney representing AF Holdings. 4 Q. And from there where do they go? 5 A. Well, generally speaking the revenues that AF 6 Holdings has received from settlements, AF Holdings does 7 not receive a distribution from the trust accounts of 8 the law firms. 9 uses the money that remains in trust to pay for the 10 11 12 expenses of the litigation. Q. So AF Holdings has not distributed any settlement proceeds to any individuals in any cases? 13 14 The reason being that AF Holdings is -- MR. GIBBS: Objection. record. 15 MR. RANALLO: 16 MR. GIBBS: 17 18 19 20 That's misstating the That's a question. You just -- BY MR. RANALLO: Q. Has AF Holdings distributed any income to any individuals from its settlement proceeds? A. I guess I'll give you the same answer and the 21 answer is that when AF Holdings receives a settlement, 22 the money that it receives from the settlement generally 23 goes back to pay for the expenses of litigation. 24 25 Q. You say generally. When it doesn't go there, where does it go? California Deposition Reporters Page: 11 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 13 of 291 Page ID #:1314 1 2 3 4 A. Well, in that case it can remain in the trust account to pay for expenses of future litigation. Q. So it remains in the lawyer's trust account indefinitely? 5 A. I don't think that's what I said. 6 Q. Does AF Holdings settlement proceeds stay in 7 the attorney's trust account indefinitely? 8 A. No. 9 Q. When they are released from that account, 10 where do they go? 11 A. To pay for the expenses of litigation. 12 Q. And what kind of expenses are those that 13 14 15 they're used to pay for? A. What kind of expenses are involved in litigation? 16 Q. Yeah, that AF Holdings pays for. 17 A. Well, I could give you a few examples of 18 expenses, for example, a filing fee. 19 Q. Okay. 20 A. Cost of taking a deposition of Mr. Navasca, 21 for example. 22 of discovery. 23 Q. The cost of producing documents, the cost Let me ask you this. In how many cases has AF 24 Holdings participated in discovery as far as producing 25 documents? California Deposition Reporters Page: 12 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 14 of 291 Page ID #:1315 1 2 MR. GIBBS: Objection. I believe that's not a noticed topic. 3 THE WITNESS: That question is well outside 4 the noticed topics, so I couldn't -- I would be only 5 speculating. 6 BY MR. RANALLO: 7 8 Q. produced documents in response to a discovery request? 9 10 To your knowledge has AF Holdings ever MR. GIBBS: Objection. Let's be clear. So you're asking his personal knowledge? 11 MR. RANALLO: I'm asking the corporation's 12 knowledge if they have ever conducted discovery. 13 saying the corporation has no knowledge that they have 14 ever -- 15 THE WITNESS: 16 help me out. 17 You're Mr. Ranallo, perhaps you could noticed? 18 Which topic does this relate to that you MR. PIETZ: 19 in here. 20 Well, look, I'm just going to jump question? 21 Are you instructing him not to answer the MR. GIBBS: No, I'm not. I'm just pointing 22 out that it's not a noticed topic, so therefore it's 23 going to be on personal knowledge and personal 24 knowledge -- 25 California Deposition Reporters MR. RANALLO: No, it's not -Page: 13 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 15 of 291 Page ID #:1316 1 MR. GIBBS: He's not speaking for the 2 corporation at this point. 3 BY MR. RANALLO: 4 Q. Okay. 5 A. Mr. Ranallo, I'll repeat my question to you, Speak for yourself, Mr. Hansmeier -- 6 as a courtesy, please let me know which noticed topic 7 you're referring to? 8 9 Q. You have the noticed topics in front of you. I'm asking questions. Could you please tell me if AF 10 Holdings has ever responded to a discovery request in 11 any of its cases? 12 13 14 15 A. for. Mr. Ranallo, this is not a topic I prepared It would be complete conjecture on my part. Q. So you have no knowledge that they have ever participated in discovery at any time? 16 MR. GIBBS: 17 Objection. 18 That misstates the testimony. BY MR. RANALLO: 19 Q. Let me ask you this. You previously said that 20 AF Holdings' settlement proceeds are used, for example, 21 to respond to discovery; is that correct? 22 23 24 25 A. I was giving an example of a cost that could come up in the context of litigation. Q. So to your knowledge it never has. Has AF Holdings' settlement income ever been used to conduct California Deposition Reporters Page: 14 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 16 of 291 Page ID #:1317 1 discovery, to pay for discovery expenses? 2 A. You can continue asking the same questions. 3 I'll continue giving the same answer. 4 would be pure speculation and conjecture on my part to 5 know what AF Holdings has and has not done. 6 The answer is it I'm here to today -- and I prepared today -- 7 to discuss the matters that you noticed up on behalf 8 of -- 9 Q. And those include -- tell me if I'm wrong -- 10 but do those include AF Holdings' revenues from 11 copyright litigation and how they are distributed. 12 13 14 A. I think that's a pretty tangential relationship. Q. We'll let somebody else decide -- we'll let a 15 judge decide if AF Holdings will be bound by that. 16 it your position that you have no knowledge whether AF 17 Holdings has ever participated in discovery in any of 18 its BitTorrent cases? 19 MR. GIBBS: Objection. Compound. Is Also, are 20 we talking about his knowledge personally or his 21 knowledge as the PMK for the company? 22 MR. RANALLO: 23 knowledge. 24 It's the same. He has bind the company. 25 California Deposition Reporters It either binds the company or it does not MR. GIBBS: Okay. But I'm saying, you're Page: 15 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 17 of 291 Page ID #:1318 1 not -- you said it's tangential. 2 refer to any of the topics that you noticed, so were you 3 asking him personally? 4 MR. RANALLO: 5 It really doesn't You can't refuse to answer on that grounds. 6 MR. GIBBS: 7 MR. RANALLO: I'm not refusing to answer -So what will happen later is a 8 judge will decide if it's not properly cognizable under 9 these topics, AF Holdings won't be bound by it. 10 I'm going to go ahead and ask the question, okay? 11 12 13 For now MR. GIBBS: I'm just asking -- BY MR. RANALLO: Q. Mr. Hansmeier, to your knowledge, has AF 14 Holdings' revenues from BitTorrent litigation ever been 15 used to respond to discovery in any of its cases? 16 A. I have no personal knowledge one way or 17 another, of course this case, but beyond that I couldn't 18 speak authoritatively. 19 Q. 20 Okay. MR. PIETZ: So just to clarify. When you said 21 earlier that AF Holdings' settlement proceeds could be 22 use to respond to discovery, you have no personal 23 knowledge or corporate knowledge, that indeed, that has 24 ever occurred? 25 California Deposition Reporters THE WITNESS: When I gave the example of a Page: 16 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 18 of 291 Page ID #:1319 1 possible cost that could come up in the course of 2 litigation, I was simply providing a list of possible 3 costs that could come up in the course of litigation. 4 BY MR. RANALLO: 5 Q. Let's go to actual costs that have come up in 6 litigation then instead of just examples. 7 knowledge -- AF Holdings' knowledge, what specific 8 expenses have been paid by AF Holdings' settlement -- or 9 with the funds received from AF Holdings' settlement 10 What, to your proceeds? 11 MR. GIBBS: 12 You can answer if you can understand what he 13 Objection. Compound question. means. 14 THE WITNESS: 15 please? 16 Could you repeat the question, BY MR. RANALLO: 17 Q. What specific expenses have been paid out of 18 AF Holdings' attorney -- AF Holdings' settlement 19 proceeds? 20 A. 21 22 MR. GIBBS: Objection. This is -- like you mentioned before, this is tangential to the questions. 23 24 I can say -- MR. RANALLO: That doesn't mean you don't get to answer, so object and then answer. 25 California Deposition Reporters MR. GIBBS: I'm just objecting. Will you stop Page: 17 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 19 of 291 Page ID #:1320 1 yelling. 2 Please stop yelling. THE WITNESS: Mr. Ranallo, I'm beginning to 3 feel a little bit uncomfortable with your level of 4 aggressiveness in this deposition. 5 would hope that we can keep this professional and 6 cordial. 7 For the record I Specific expenses, I can speak to this case 8 specifically, certainly the filing fee involving the 9 case would have been paid for by AF Holdings. I can't 10 recall -- to the extent we had discovery to find out the 11 identity of Mr. Navasca, there would have been a fee 12 paid to the internet service provider to pay for their 13 cost of complying with the subpoena. 14 taking Mr. Navasca's deposition would have been an 15 expense paid by AF Holdings and -- 16 BY MR. RANALLO: 17 18 19 20 21 Q. And the cost of What about 6881 Forensics, do they receive money from AF Holdings' settlement proceeds? A. If your question is are they paid based on the amount of settlements received, the answer is no. Q. My question is, do they -- does AF Holdings' 22 settlement proceeds, are they used to pay 6881 23 Forensics? 24 25 A. I would answer the question by saying that AF Holdings pay 6681 Forensics and whether that money is California Deposition Reporters Page: 18 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 20 of 291 Page ID #:1321 1 sourced from settlement proceeds or otherwise, I mean, 2 directly or indirectly, yes. 3 4 Q. Does AF Holdings receive any income outside of settlement proceeds? 5 A. That goes back to AF Holdings' business model. 6 And the answer to question is AF Holdings' business 7 model is to purchase the intellectual property rights to 8 various copyrights that, four or five years ago, would 9 have been extremely valuable copyrights. Copyrights 10 have generated hundreds of thousands, if not millions of 11 dollars of revenue per year and because of the heavy 12 epidemic of digital piracy, these copyrights that were 13 once worth considerable amounts of money are now worth 14 next to nothing. 15 16 Q. I'm going stop your for a second. My question here was, does AF Holdings -- 17 A. 18 Mr. Ranallo, I'm answering your question -THE REPORTER: I can only take one person at a 19 time, just to let you know. 20 BY MR. RANALLO: 21 22 Q. Does AF Holdings receive any revenue aside from settlement proceeds? 23 MR. GIBBS: 24 answer the question. 25 /// California Deposition Reporters Objection. You're not letting him Page: 19 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 21 of 291 Page ID #:1322 1 BY MR. RANALLO: 2 Q. Yes or no, sir, does AF Holdings receive -- 3 A. I will restart my answer because I know it's 4 important to establish a full and accurate record and I 5 know it's important for attorneys to let witnesses 6 answer the question. 7 So starting over, AF Holdings' business model 8 is to secure the intellectual property rights to 9 copyrights that, four or five years ago, would have been 10 extremely valuable. 11 property rights have lost so much value is due to the 12 epidemic of digital piracy. 13 The reason why the intellectual Now, AF Holdings' businesses model is to take 14 these copyrights or its strategy for -- let me back up 15 for one second. 16 of copyrights that basically have little to no value 17 right now, because instead of purchasing the copyrighted 18 works, people just simply like to steal them online. 19 And the only way to turn a copyright from very limited 20 value to having a much greater level of value, you know, 21 Circa 2003, 2004 is to stop people from stealing it. 22 So AF Holdings is creating a portfolio Now, this is why I had to give you the 23 background to answer your question. 24 recognizes revenue when it believes that the value of 25 the copyright has increased, just like an investment California Deposition Reporters AF Holdings Page: 20 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 22 of 291 Page ID #:1323 1 bank holding assets, mortgage-back securities, just like 2 a -- I guess any investment fund, holding any form of 3 asset. 4 The -- you know, the convention of 5 mark-to-market accounting says that you recognize 6 revenue when the value of the asset has increased. 7 of right now, it's far too speculative for AF Holdings 8 to say that its campaign to stop people from stealing it 9 works, succeeded or not succeeded. As So as of the now 10 the -- it's been far too speculative for AF Holdings to 11 recognize revenue based of its copyrighted works. 12 Q. Have they recognized any revenue through any 13 sources other than litigation, for example, through 14 legitimate licensing of it? 15 A. No. The only source of revenue that AF 16 Holdings will have with respect to its copyrights are if 17 it increases in value. 18 Q. Okay. 19 A. AF Holdings was created, I believe, in 20 When was AF Holdings created? May 2011. 21 Q. And who is the initial incorporator? 22 A. The initial incorporator was Aisha Sargeant, 23 A-I-S-H-A, S-A-R-G-E-A-N-T. 24 Q. And where does she live? 25 A. She lives in Nevis -- or the Federation of California Deposition Reporters Page: 21 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 23 of 291 Page ID #:1324 1 2 St. Kitts & Nevis. Q. 3 And why was AF Holdings incorporated in Nevis? 4 MR. GIBBS: Objection. part of the listed topics. 5 MR. PIETZ: 6 THE WITNESS: I don't believe that's It's outside of the scope. You can answer. I guess because it's outside the 7 scope, I didn't ask anyone that specific question. 8 would say, though, that it's a popular forum for 9 incorporating entities. 10 11 I BY MR. RANALLO: Q. And do you know any specific benefits that 12 are, you know, that come with incorporating in Nevis 13 versus, for example, the United States, Nevada, 14 California? 15 MR. GIBBS: 16 outside the scope -- 17 THE WITNESS: Compound. Objection. Also I guess I could comment on the 18 benefits and trade offs between Nevis and California or 19 Nevada. 20 BY MR. RANALLO: 21 Q. Does AF Holdings have any employees? 22 A. Yes. 23 Q. And who is AF Holdings -- who are AF Holdings' 24 25 employees? A. California Deposition Reporters AF Holdings' sole employee is Mark Lutz. Page: 22 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 24 of 291 Page ID #:1325 1 Q. When was Mark Lutz hired? 2 A. He was hired very shortly after the 3 4 5 6 7 incorporation, within a day or two, so May 2011. Q. And does AF Holdings maintain employment records that would reflect Mr. Lutz' employment? A. Could you specifically describe some of these employment records. 8 Q. A W2 for example. 9 A. It does not maintain a W2 for Mr. Lutz. 10 MR. PIETZ: 11 THE WITNESS: 12 How about a 1099? It does not maintain a 1099 for Mr. Lutz. 13 MR. PIETZ: 14 maintain for Mr. Lutz? 15 THE WITNESS: What can kind of records does it 16 again so I can refresh my recollection? 17 18 I guess -- which topic is this MR. PIETZ: I'm not going to answer that, but it's on the list. 19 MR. GIBBS: Objection. 20 MR. PIETZ: I disagree. 22 MR. GIBBS: Which one is it? 23 MR. PIETZ: It's not our job to tell you. 21 24 25 It's not on the list. You can go ahead and answer. I disagree. BY MR. RANALLO: Q. California Deposition Reporters How about AF Holdings' corporate policies Page: 23 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 25 of 291 Page ID #:1326 1 regarding business records? 2 A. Well -- 3 Q. Would you consider an employment record to be 4 a business record? 5 6 A. I wouldn't consider an employment record to be a corporate policy. 7 MR. PIETZ: I'd also note for the record that 8 the relevant topic -- one of them is No. 7, which 9 relates to employees of AF Holdings. However, as a 10 practice, I'm not going to get engaged in having to tell 11 you which topic it relates to every single time. 12 work on it after. 13 them. 14 15 We can If you have objections, you can note MR. GIBBS: I think, for instance, 7 is a debatable topic, in terms of the record. 16 THE WITNESS: I guess I just don't know 17 employment record -- the identity in terms of employment 18 doesn't really cover employment records arguably. 19 that being said, I guess I'm just not aware of what 20 employment records are required to be kept under the 21 laws of the Federation of St. Kitts & Nevis. 22 BY MR. RANALLO: 23 Q. But You understand that you're testifying as -- 24 your testimony is binding on AF Holdings, you understand 25 that as a 30(b)(6) deponent? California Deposition Reporters Page: 24 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 26 of 291 Page ID #:1327 1 MR. GIBBS: 2 THE WITNESS: Asked and answered. Yes, I understand that. And to 3 finish my answer, I don't think you should interrupt the 4 witness. 5 W2 and 1099, when I was answering that question, I was 6 answering that as I have not personally seen a W2 for 7 Mr. Lutz and I have not personally seen a 1099 form for 8 Mr. Lutz. 9 the topics that I was noticed to prepare on. I guess I should say back to my answers about Do they have those records, that's not one of I'm sure 10 we could get that to you in some form of document 11 request following this deposition. 12 13 EXAMINATION BY MR. PIETZ Q. So you stated earlier that Mr. Lutz is an 14 employee of AF Holdings. 15 the sole the employee of AF Holdings. In fact, I think you said he's 16 A. That's correct. 17 Q. Do you have any documentary support for that 18 whatsoever? 19 20 21 MR. GIBBS: Objection. This is not -- BY MR. PIETZ: Q. Let me rephrase. Does AF Holdings have any 22 documentary support whatsoever for the idea that Mark 23 Lutz is its sole employee? 24 25 MR. GIBBS: Again, objection. It's not one of the noticed topics. California Deposition Reporters Page: 25 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 27 of 291 Page ID #:1328 1 BY MR. PIETZ: 2 Q. You can answer. 3 A. I guess what I can say on behalf of AF 4 Holdings is that I do not review any documents that 5 would fall within the category of documentary support. 6 Does that mean they have them, perhaps. 7 don't have them. 8 I inquired of Mr. Lutz as to who the employees of AF 9 Holdings were and Mr. Lutz said that he was the sole 10 Perhaps they It wasn't one of the noticed topics. employee. 11 Q. Just to be clear, I disagree that No. 7 is not 12 a noticed topic. 13 corporation, whether the corporation -- pardon me. 14 not a corporation. 15 I'm asking whether the entity, not you personally, 16 whether the entity has any documentary evidence that 17 Mark Lutz is its employee. 18 19 I'm asking for the testimony of the It's It's a limited liability company. MR. GIBBS: Objection. That is not what No. 7 says. 20 THE WITNESS: Well, I will read No. 7. It 21 says identity and terms of employment for any and all AF 22 Holdings' employees and independent contractors utilized 23 by AF Holdings. 24 as Mark Lutz. 25 2011 through the present and as to whether or not there California Deposition Reporters I have identified AF Holdings' employee I told you his term of employment is May Page: 26 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 28 of 291 Page ID #:1329 1 are documents that further support my testimony, I can 2 only say that I did not review any documents. 3 given any indication by this notice that I was required 4 to provide a recitation of the various employment 5 records of AF Holdings, so that's outside the scope of 6 my knowledge. 7 BY MR. PIETZ: 8 9 10 11 Q. I was not Does Mr. Lutz have an employment agreement with Mr. AF Holdings? A. If Mr. Lutz has an employment agreement with AF Holdings, I did not review it. 12 Q. 13 exists? 14 A. Did you investigate whether such an agreement I investigated the identity in terms of 15 employment for any and all AF Holdings' employees by 16 speaking with Mr. Lutz. 17 MR. PIETZ: 18 as nonresponsive. 19 I'm going to move to strike that BY MR. PIETZ: 20 Q. With respect to the terms of Mr. Lutz's 21 employment, did you make any kind of investigation, ask 22 anyone, whether Mr. Lutz had a written employment 23 agreement with AF Holdings? 24 25 A. I did not ask Mr. Lutz whether he had a written employment agreement with AF Holdings. California Deposition Reporters Page: 27 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 29 of 291 Page ID #:1330 1 2 Q. Did you ask anyone else whether there was a written employment agreement with Mr. Lutz? 3 A. I asked Mr. Lutz -- I didn't ask Mr. Lutz 4 whether he had an employment agreement. 5 Mr. Lutz who the -- who was employed by AF Holdings and 6 what were the terms of the employment. 7 8 Q. To be more specific. I asked Could you elaborate on the terms of Mr. Lutz's employment with AF Holdings? 9 A. 10 AF Holdings. 11 Q. How much is he paid? 12 A. He does not receive a salary for duties as Q. Does he receive a salary for any other role 13 14 15 He is the -- well, he's essentially the CEO of CEO. that he fills at AF Holdings? 16 A. He does not receive a salary from AF Holdings. 17 Q. Does he receive any other kind of compensation 18 other than salary from AF Holdings? 19 20 MR. GIBBS: Again, this is not a noticed topic. 21 MR. RANALLO: 22 MR. GIBBS: It is his terms of employment. No, but he's talking about outside 23 of AF Holdings, which is not -- nothing to do with AF 24 Holdings. 25 California Deposition Reporters MR. PIETZ: I'm asking whether AF Holdings Page: 28 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 30 of 291 Page ID #:1331 1 pays Mr. Lutz any money of any kind. 2 3 MR. GIBBS: Same objection. BY MR. PIETZ: 4 Q. You can answer. 5 A. I guess my answer to that question is that AF 6 7 Holdings does not pay Mr. Lutz money. Q. 8 9 What does it pay Mr. Lutz then? MR. GIBBS: Objection. Assume facts not in evidence. 10 THE WITNESS: 11 anything to date. 12 It has not paid Mr. Lutz BY MR. PIETZ: 13 Q. Is there any form of nonmonetary compensation 14 that AF Holdings pays -- extends to Mr. Lutz in exchange 15 for his services as an employee of AF Holdings? 16 A. There's nothing that I'm aware of. 17 Q. So it's your testimony here today that 18 Mr. Lutz receives no compensation whatsoever for his 19 role as the sole employee of AF Holdings? 20 MR. GIBBS: 21 Mischaracterization of earlier testimony. 22 Objection. BY MR. PIETZ: 23 Q. It's a question. 24 A. My testimony is that AF Holdings has not paid 25 You can go ahead and answer. Mr. Lutz anything during the term of his employment. California Deposition Reporters Page: 29 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 31 of 291 Page ID #:1332 1 MR. PIETZ: 2 nonresponsive. 3 Move to strike that as BY MR. PIETZ: 4 Q. That wasn't the question I asked. Is your testimony here today that AF Holdings 5 has never paid Mr. Lutz any compensation of any kind for 6 his services as the sole employee of AF Holdings? 7 A. Could you repeat that? 8 (Record read as requested.) 9 THE WITNESS: Yes. My testimony is that year 10 to date -- during the term of his employment he has not 11 been paid anything for his services as an employee. 12 13 14 MR. PIETZ: Move to strike as nonresponsive. BY MR. PIETZ: Q. I'm not interested during the term of his 15 employment. 16 has Mr. Lutz received any kind of compensation 17 whatsoever in connection with his services to AF 18 Holdings? 19 20 I'm interested in at any time in the past MR. GIBBS: Objection. Outside the scope of the questions. 21 THE WITNESS: Just so I'm clear, are you 22 saying before AF Holdings was formed? 23 BY MR. PIETZ: 24 25 Q. Well, to clarify, your last question contained a hedge, which was that AF Holdings hasn't paid him California Deposition Reporters Page: 30 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 32 of 291 Page ID #:1333 1 anything during the term of his employment. 2 asking is did it pay him any money at any time, not just 3 during the scope of his employment -- during the term of 4 his employment. 5 6 7 8 9 10 11 A. What I'm He has not been paid -- he was not paid prior to the term of his employment either. Q. How about subsequent to the term of his employment? A. Well, he's currently employed, so I think that covers all time in history. Q. So to be clear then. Mr. Lutz has never 12 received any compensation of any kind in connection with 13 his services provided to AF Holdings? 14 A. Mr. Lutz has not been compensated by AF 15 Holdings during the term of his employment and he has 16 not been compensated by AF Holdings prior to the term of 17 his employment. 18 Q. Has Mr. Lutz been compensated by any person or 19 entity other than AF Holdings in connection with his 20 services AF Holdings? 21 MR. GIBBS: 22 THE WITNESS: Objection. Outside the scope. I have no knowledge who else has 23 compensated Mr. Lutz for what. 24 BY MR. PIETZ: 25 Q. California Deposition Reporters So is Mr. Lutz paid minimum wage by AF Page: 31 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 33 of 291 Page ID #:1334 1 2 Holdings? A. Again, Mr. Lutz has not been compensated by AF 3 Holdings during the term of his employment or prior to 4 the term of his employment for his services as the sole 5 employee of AF Holdings. 6 Q. So your testimony is that Mr. Lutz works for 7 AF Holdings completely for free with no compensation of 8 any kind coming from any source? 9 A. My testimony is he has not been compensated by 10 AF Holdings during the term of his employment or prior 11 to the term of his employment. 12 13 Q. Has he been compensated by anyone else for his services provided to AF Holdings? 14 MR. GIBBS: 15 THE WITNESS: Objection. Calls for speculation. You'll have to ask Mr. Lutz who 16 else is compensating him. 17 BY MR. PIETZ: 18 Q. So I would like to ask you -- and we'll step 19 out of the 30(b)(6) role. 20 you have any personal knowledge whether anyone has ever 21 paid Mr. Lutz money or any other kind of compensation in 22 exchange for or as a quid pro quo for his services 23 provided to AF Holdings? 24 A. 25 I'd like to ask you whether arrangement. California Deposition Reporters I have no recollection of any such Page: 32 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 34 of 291 Page ID #:1335 1 Q. How about the company. Is the company, AF 2 Holdings, aware of any other person or entity who 3 compensates Mr. Lutz in exchange for his services 4 provided to AF Holdings? 5 6 MR. GIBBS: about the company. Objection. MR. PIETZ: 8 THE WITNESS: 10 You're talking What are you talking about? 7 9 Vague. I'm talking about AF Holdings. Could you repeat that, please? BY MR. PIETZ: Q. Testifying now on behalf of AF Holdings. Does 11 AF Holdings have any knowledge of any payments made to 12 Mr. Lutz by parties other than AF Holdings in connection 13 with his employment at AF Holdings? 14 A. I guess as the corporate representative for AF 15 Holdings appearing here today to testify as to the 16 topics listed in this notice of deposition, I have -- in 17 my preparation for the various topics listed in this 18 notice of deposition, I did not come across any 19 information along those lines. 20 Q. Did you investigate whether Mr. Lutz is paid 21 by any person or entity other than AF Holdings in 22 connection with his services to AF Holdings? 23 24 MR. GIBBS: Objection. That's was not required -- 25 California Deposition Reporters THE WITNESS: I investigated the noticed Page: 33 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 35 of 291 Page ID #:1336 1 topics, but I can't see a notice of -- or a noticed 2 topic that contains anything along those lines. 3 investigated the identify and terms for Mr. Lutz's 4 employment and I've already testified that Mr. Lutz was 5 not compensated by AF Holdings during the term of his 6 employment or preceding the terms of his employment. 7 BY MR. PIETZ: 8 9 Q. I Listening to your answer very carefully, I'm just going to tell you what it sounds like to me. It 10 sounds like you're leaving open an exception, if you 11 will, that perhaps there could be some other person or 12 entity that compensates Mr. Lutz in connection with his 13 services to AF Holdings. 14 I just want to be very clear that you're 15 saying that Mr. Lutz is not compensated by anybody 16 within the knowledge of AF Holdings and you personally, 17 both, in connection with his services to AF Holdings? 18 A. Is that a question? 19 MR. GIBBS: 20 THE WITNESS: It's compound. What's the question? You 21 started your question with I want to be very clear. 22 BY MR. PIETZ: 23 Q. Fair enough. I could be more clear. Let me 24 try asking it a different way. 25 AF Holdings that as far as AF Holdings is aware, after a California Deposition Reporters Is it the testimony of Page: 34 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 36 of 291 Page ID #:1337 1 reasonable investigation, Mr. Lutz has never received 2 any compensation from any source in connection with his 3 services to AF Holdings? 4 A. It is the testimony of AF Holdings that during 5 the course of my investigation so I could come here 6 today and be prepared to discuss the topics that were 7 noticed up in this notice of deposition, that the 8 identity and terms of employment with -- the terms of 9 employment with respect to Mr. Lutz by AF Holdings, that 10 I conducted my due diligence and investigation so that I 11 could come here and testify on the topic, that I could 12 not find any documents that would suggest that Mr. Lutz 13 was -- or in fact, Mr. Lutz -- in my discussion with Mr. 14 Lutz -- that he is not compensated by AF Holdings in 15 connection -- or he has not been compensated by AF 16 Holdings in connection with his employment with AF 17 Holdings. 18 Q. I'll note for the record the deponent appears 19 to be reading from a document, which I believe is the 20 deposition notice, but it contains some handwritten 21 notes on there; is that correct? 22 A. You're welcome to have it. 23 Q. Could you clarify what page it is that you 24 25 were just referring to in answering that last question? A. California Deposition Reporters Page 3. Page: 35 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 37 of 291 Page ID #:1338 1 Q. 2 3 MR. PIETZ: Might I suggest we take a five-minute break. 4 5 We'll take copies of that afterwards. Is anybody else amenable to that? MR. GIBBS: That's fine by me. Is that all right with you? 6 THE WITNESS: I prefer to keep going, but if 7 you guys want to take a break. 8 MR. PIETZ: 9 10 We'll take five. help streamline the proceedings. I think it will We can go off the record. 11 (Off the record at 10:38 a.m. and back 12 on the record at 10:44 p.m.) 13 FURTHER EXAMINATION BY MR. RANALLO 14 Q. You previously testified -- correct me if I'm 15 wrong -- that AF Holdings is owned wholly by a trust; is 16 that correct? 17 A. That's correct. 18 Q. Has that always been the case? 19 20 MR. GIBBS: Objection. It's not one of the noticed topics. 21 THE WITNESS: 22 Yes, I believe so. 23 I'm just trying to recall. BY MR. RANALLO: 24 Q. It's always been owned by a trust? 25 A. Yes. California Deposition Reporters Page: 36 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 38 of 291 Page ID #:1339 1 Q. And that trust, where is that organized? 2 A. I do not know where the trust is organized. 3 FURTHER EXAMINATION BY MR. PIETZ 4 MR. PIETZ: Sorry. Let's stick on that for a 5 moment. 6 company, doesn't know where the trust that it owns is 7 organized? You're telling me that AF Holdings, the 8 MR. GIBBS: 9 THE WITNESS: Objection. Misstates testimony. I would just refer back to the 10 noticed topics and note that the fact that the noticed 11 topics do not include the -- 12 MR. PIETZ: 13 THE WITNESS: I'll stop you right there. -- the organizations of -- I'm 14 in the middle of answering the question that you asked 15 me. 16 you have to listen to my questions -- or if you ask a 17 question, you have to listen my answers and you have to 18 let me answer fully, otherwise you wouldn't want to have 19 an inaccurate record or have it not reflect the truth 20 and the facts. 21 BY MR. PIETZ: 22 If I'm going to be here today and give testimony, Q. In any event, the reason I was stopping you is 23 that it sounded to me like you were off on a 24 nonresponsive topic and I'll ask the question for a you 25 a different way. California Deposition Reporters Page: 37 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 39 of 291 Page ID #:1340 1 A. Well, first I'd like to answer the question 2 that you asked, but if you'd like to withdraw the 3 question and ask me a different question, that's -- 4 MR. PIETZ: Okay. I'll tell you what. I'm 5 going to ask the reporter to please read back the last 6 question. 7 (Record read as requested.) 8 THE WITNESS: And my answer to that question 9 is in reviewing the list of noticed topics, I do not see 10 a topic that relates to the organization or the domicile 11 or anything along those lines of the -- I guess domicile 12 organization of any parent company. 13 Further -- and I'm not speaking on behalf of 14 AF Holdings here. 15 trust lawyer, but I wasn't aware the trusts were 16 formally organized. 17 I'm speaking personally. MR. PIETZ: I'm not a I'm going to move to strike that 18 entire answer as nonresponsive and refer the deponent to 19 subject matter 6, which includes as a topic, AF Holdings 20 corporate structure. 21 BY MR. PIETZ: 22 Q. You testified here earlier today that AF 23 Holdings is owned by a trust. 24 what trust? 25 A. California Deposition Reporters What I'm asking you is Where is it located? I will refer you to topic of No. 6 and note Page: 38 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 40 of 291 Page ID #:1341 1 the fact, for the record, that AF Holdings corporate 2 structure is a limited liability company organized under 3 the laws of the Federation of St. Kitts & Nevis. 4 The corporate structure of AF Holdings owner, 5 I do not see on Topic 6. 6 that I'm not even aware if trusts are organized in the 7 sense that a limited liability company is organized or a 8 corporation is organized, so there may not even be an 9 answer to your question. 10 Q. Further, I would, again, note So in my experience most trusts name at least 11 one beneficial owner, but I believe you testified 12 earlier today that the trust that owns AF Holdings has 13 no beneficial owners; is that correct? 14 A. The trust that owns AF Holdings is an 15 undefined beneficiary trust. 16 experience is not complete when it comes to trusts. 17 Q. I would suggest that your Perhaps you can enlighten me. 18 undefined beneficiary trust? 19 specific. 20 What is a beneficiary trust that owns AF Holdings? Allow me to be more Can you explain to me what is the undefined 21 MR. GIBBS: 22 THE WITNESS: 23 Outside the topics. I don't understand your question. 24 Objection. BY MR. PIETZ: 25 Q. California Deposition Reporters If there are no defined beneficiaries to the Page: 39 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 41 of 291 Page ID #:1342 1 trust that owns AF Holdings who are true beneficial 2 owners of that trust? 3 MR. GIBBS: 4 Go ahead and answer if you can. 5 THE WITNESS: 6 I'm sorry. Confusing question. Can you please repeat the question? 7 Objection. BY MR. PIETZ: 8 9 Q. Who are the beneficial owners of the trust who owns AF Holdings? 10 MR. GIBBS: 11 THE WITNESS: Objection. Asked and answered. There are no defined 12 beneficiaries to my knowledge. 13 BY MR. PIETZ: 14 Q. 15 How about undefined beneficiaries? MR. GIBBS: Objection. 16 an undefined beneficiary is? 17 Can you clarify what BY MR. PIETZ: 18 Q. Go ahead and answer. 19 A. I guess I don't understand the question. 20 Q. Suppose AF Holdings recognized a million 21 dollars in tax revenue, who would have a right to claim 22 a piece of that revenue in connection with the trust 23 that owns AF Holdings? 24 MR. GIBBS: Objection. 25 MR. PIETZ: It's a hypothetical. California Deposition Reporters It's speculatory. Page: 40 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 42 of 291 Page ID #:1343 1 You can answer. 2 THE WITNESS: At this point we're getting well 3 beyond these noticed topics and you're asking me to 4 speculate as to the innerworkings of a trust that has -- 5 that has not nothing to do with AF Holdings other than 6 being its owner. 7 8 9 FURTHER EXAMINATION BY MR. RANALLO Q. In this case did you have to file any statement identifying whether AF Holdings had any 10 apparent corporations or owners that owned more than 11 10 percent of its stock? 12 A. I don't know. 13 Q. Is it your testimony that this trust owns more 14 15 than 10 percent of AF Holdings' stock? A. 16 17 18 19 20 AF Holdings is owned in whole by the trust. FURTHER EXAMINATION BY MR. PIETZ Q. Who organized the trust? Who created the trust? A. The trust was created by the -- organized by the same individual who incorporated AF Holdings. 21 Q. Is that Aisha -- 22 A. Sargeant. 23 Q. Who asked Ms. Sargeant to organize the trust 24 that owns AF Holdings? 25 California Deposition Reporters MR. GIBBS: This is outside of the noticed Page: 41 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 43 of 291 Page ID #:1344 1 topics. 2 BY MR. PIETZ: Objection. 3 Q. You can answer. 4 A. I couldn't tell you. 5 6 7 8 9 10 It's outside the scope of the noticed topics. Q. Is there a document pursuant to which the trust was organized? A. Once, again, this is outside the scope of the noticed topics. This isn't something I prepared to answer. 11 MR. PIETZ: 12 nonresponsive. 13 Move to strike the last answer as BY MR. PIETZ: 14 Q. Trust are generally created through some kind 15 of a document establishing that a trust is there by 16 being created. 17 that owns AF Holdings? Is there a trust document for the trust 18 A. Is that a statement or a question? 19 Q. It's a question. 20 A. So what is the question? 21 22 MR. PIETZ: Madam reporter, could you read the last question back? 23 (Record read as requested.) 24 MR. GIBBS: 25 a compound question. California Deposition Reporters Objection. Assume facts and also Page: 42 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 44 of 291 Page ID #:1345 1 THE WITNESS: Once, again, this is outside the 2 scope of the noticed topics. 3 reviewed a trust document. 4 MR. PIETZ: I have not personally Move to strike the answer as 5 nonresponsive. 6 that you're here today, sir, as the deponent. 7 attorney's job representing you to note whether or not 8 there is an objection about whether my questions are 9 outside the scope of the deposition. I'm going to also note for the record It's your Do us a favor and 10 cut that out of your answer and then just either answer 11 it or you can -- or your attorney can instruct you not 12 to answer. 13 14 MR. GIBBS: Mr. Pietz, he doesn't have to listen to that instruction. 15 MR. PIETZ: Well, in any event, all I'm saying 16 is that whether or not there's a legal objection 17 typically is an issue for the attorney. 18 today as a 30(b)(6) fact witness for AF Holdings, not as 19 the attorney for the matter so I just wanted to remind 20 you of that. 21 MR. GIBBS: You're here Mr. Pietz, I believe what he's 22 saying to you is that he's prepped on these specific 23 topics and so if they're outside of his scope in 24 prepping that they might affect his ability in answering 25 the question that you're asking. California Deposition Reporters Page: 43 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 45 of 291 Page ID #:1346 1 MR. PIETZ: Fair enough. 2 this question though. 3 seems pretty important to me. 4 Let's come back to BY MR. PIETZ: 5 Q. We're not done with it and it When Aisha Sargeant organized the trust that 6 owns AF Holdings, did she reduce anything to paper in 7 connection with forming that trust? 8 A. You would have to ask her. 9 Q. I'm asking AF Holdings, the corporation, 10 whether there are any documents whatsoever that relate 11 or memorialize the formation of the trust that owns AF 12 Holdings? 13 MR. GIBBS: 14 Outside the noticed topics. 15 Objection. BY MR. PIETZ: 16 Q. You can answer. 17 A. Again, I did not come here prepared today to 18 talk about issues outside the noticed topics and so I 19 have personal knowledge or did not prepare to answer 20 questions about trusts. 21 Q. So you said that you have no personal 22 knowledge. 23 testifying about its corporate structure which you 24 testified here today that the corporate structure is -- 25 that AF Holdings, LLC is wholly owned by a trust. California Deposition Reporters What I'm asking is on behalf AF Holdings I'm Page: 44 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 46 of 291 Page ID #:1347 1 asking you as the corporate representative for AF 2 Holdings is there a document memorializing that trust? 3 MR. GIBBS: 4 THE WITNESS: Objection. Compound question. As the corporate representative 5 with respect to these noticed topics, AF Holdings has no 6 testimony regarding that issue. 7 BY MR. PIETZ: 8 9 10 Q. So is your testimony here that AF Holdings does not know whether there is a document memorializing the trust that owns AF Holdings? 11 MR. GIBBS: 12 Misstates the testimony. 13 Objection. BY MR. PIETZ: 14 Q. It was a question. 15 A. My testimony is that as the corporate You can answer. 16 representative for AF Holdings I cannot offer any 17 testimony that's just that far outside of the scope of 18 the topics that are noticed. 19 Holdings, whether it has this knowledge because I was 20 not noticed that I would have to give testimony in that 21 regard. 22 MR. PIETZ: I can't speak for AF ** I just ask the court reporter 23 to note the previous exchange so that we can potentially 24 get some court intervention to compel a 30(b)(6) 25 corporate answer on the question of whether or not trust California Deposition Reporters Page: 45 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 47 of 291 Page ID #:1348 1 documents exit for the AF Holdings deposition. 2 I'm going to turn it to over to Mr. Ranallo. 3 FURTHER EXAMINATION BY MR. RANALLO 4 5 Q. You previously testified this trust is the sole owner of AF Holdings; is that correct? 6 A. That's correct. 7 Q. And has been since the beginning of AF 8 Holdings; is that correct? 9 A. Yes, that's correct. 10 Q. Does this trust have a name? 11 A. If it does have a name, I don't know what it Q. This trust is not named Salt Marsh; is that 12 is. 13 14 true? 15 16 MR. GIBBS: It's assuming facts not in testimony. 17 18 Objection. MR. RANALLO: He just actually said that he doesn't -- 19 MR. GIBBS: 20 about Salt Marsh. 21 But you're talking specifically BY MR. RANALLO: 22 Q. In this case on July 20th, 2012, AF Holdings 23 through their counsel filed an EER certification 24 identifying Salt Marsh as its owner. 25 contradict your testimony today, does it not? California Deposition Reporters That seems to Page: 46 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 48 of 291 Page ID #:1349 1 A. No. 2 Q. So Salt Marsh is an owner of AF Holdings? 3 A. My testimony was that I don't know what the 4 exact name of the trust is. 5 Salt Marsh, then Salt Marsh is the owner. 6 of the trust is not Salt Marsh, then -- 7 Q. If the name of the trust is Let me ask you this then. If the name Because this ADR 8 certification requires a human being to read something. 9 A trust can't read something; is that true? 10 A. I'm not -- 11 MR. GIBBS: 12 THE WITNESS: 13 14 I'm not an expert on -I'll take your word for it. BY MR. RANALLO: Q. So on July 20th you filed something indicating 15 that Salt Marsh had read the handbook. 16 Holdings owner had read the handbook entitled, Dispute 17 Resolution Procedures in the Northern District of 18 California. 19 trust; is that correct? Salt Marsh as AF You just testified that the sole owner is a 20 MR. GIBBS: 21 THE WITNESS: Objection. Compound question. To the extent your question is 22 whether the owner of AF Holdings is a trust, then yes, 23 the owner of AF Holdings is a trust. 24 BY MR. RANALLO: 25 Q. California Deposition Reporters If -- AF Holdings previously identified Salt Page: 47 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 49 of 291 Page ID #:1350 1 Marsh as its owner; is that correct? 2 MR. GIBBS: What are you referring to? This 3 is outside -- also outside of the noticed topics. 4 BY MR. RANALLO: 5 Q. AF Holdings corporate structure -- No. 6 -- 6 including past and present officers, director, members, 7 managers and all other beneficial owners or individuals 8 with a pecuniary interest. 9 was identified on July 20 by AF Holdings as an owner; is 10 11 An owner, right, Salt Marsh that correct? A. You're asking me if Salt Marsh was identified 12 by AF Holdings as an owner on July 20th, 2012. 13 you're telling me that's in a document filed with the 14 court, I'll take your word for it. 15 Q. If Would you agree that that contradicts your 16 statement that the sole owner of AF Holdings is, in 17 fact, a trust? 18 A. No. 19 Q. So is it your testimony that the sole owner of 20 AF Holdings is a trust and AF Holdings is owned by Salt 21 Marsh? 22 MR. GIBBS: 23 testimony. 24 Objection. Misstates the BY MR. RANALLO: 25 Q. California Deposition Reporters Objection. Compound. I'm asking if he is saying both of these Page: 48 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 50 of 291 Page ID #:1351 1 things are true. 2 A. Once, again, my testimony is that AF Holdings 3 is owned by a trust and whether the name of the trust on 4 the date in question was Salt Marsh or not, I'm saying I 5 just don't know what the name of the trust was on that 6 date. 7 Q. I'm asking a slightly different question, 8 because this identifies an individual person Salt Marsh 9 as an AF Holdings owner, okay? 10 MR. GIBBS: 11 Assuming facts not on the record. 12 13 Objection. MR. RANALLO: Let's take a quick break and I'm going to print -- 14 MR. PIETZ: I'm going to represent that the 15 documents are on the way. 16 BY MR. RANALLO: 17 Q. Let's go ahead and continue. So to your knowledge, as AF Holdings' 18 corporate representative -- was Salt Marsh an individual 19 human being named Salt Marsh, ever an owner of AF 20 Holdings? 21 A. Again, my testimony is that AF Holdings for 22 its existence has been owned by a trust. 23 happen to know what the name of the trust is. 24 25 Q. I just don't Assuming Salt Marsh is a human being, what we'll go ahead and do here, since you testified that California Deposition Reporters Page: 49 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 51 of 291 Page ID #:1352 1 Salt Marsh read the handbook entitled, Dispute 2 Resolutions -- or previously filed a document stating 3 that. 4 testimony that he is an owner of AF Holdings? Assuming Salt Marsh is a human being, is it your 5 MR. GIBBS: 6 THE WITNESS: Objection. Assumes facts. The question is a little bit 7 convoluted, can you please -- 8 BY MR. RANALLO: 9 Q. Is a human being at any point in AF Holdings' 10 history -- let me start that over. 11 Holdings owned by a human being named Salt Marsh? At any time was AF 12 A. No. 13 Q. And so if AF Holdings had previously filed 14 something in this case indicating that it was owned by 15 an individual named Salt Marsh, that would be false; is 16 that correct? 17 A. I guess I'm not sure what the legal analysis 18 on that would be. 19 an individual for the purposes of filing, then I don't 20 know. 21 22 Q. I don't think that answered the question at all. 23 24 To the extent a trust is considered MR. GIBBS: There's a situation where a trust can be part of the lawsuit. 25 California Deposition Reporters MR. RANALLO: It can be an entity. That's a speaking objection. Page: 50 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 52 of 291 Page ID #:1353 1 I'm going to ask this again. 2 BY MR. RANALLO: 3 Q. On July 20th, AF Holdings filed a document in 4 this case noting that someone named Salt Marsh had read 5 the handbook entitled Dispute Resolution Procedures. 6 They identified this person as an owner. 7 8 A. Is it your position that a human being named Salt Marsh was AF Holdings owner on July 20th? 9 MR. GIBBS: 10 11 MR. RANALLO: Objection. Outside the scope. It absolutely is not. No. 6, Mr. Gibbs. 12 Go ahead and answer. 13 THE WITNESS: My position is that -- or my 14 testimony on behalf AF Holdings is that on the date in 15 question -- I believe you said it was July 20th, 2012? 16 Q. That is correct. 17 A. AF Holdings was owned by a trust. Whether the 18 trust was named Salt Marsh at that time or not is 19 outside the scope of my knowledge and whether or not the 20 particular document you're referring to requires a 21 person, an individual, a trust, someone acting on behalf 22 of those entities or what have you, I don't know. 23 MR. PIETZ: 24 record. 25 court reporter? I'm going to mark this for the I think were on 101; is that correct, madam California Deposition Reporters Here is a copy for the court reporter Page: 51 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 53 of 291 Page ID #:1354 1 and I have copy for you guys as well. 2 (Whereupon Defendants' Exhibit No. 101 3 was marked for identification.) 4 MR. PIETZ: I would like to note for the 5 record -- and I'm giving the witness a copy of the ADR 6 Certification by Parties and Counsel filed in civil 7 action 12-cv-2396 in the Northern District of California 8 ECF No. 8. 9 I think we marked this as Exhibit 101. 10 FURTHER EXAMINATION BY MR. PIETZ Q. Will you please refer to the second to last 11 signature -- the second signature up from the bottom and 12 read what it says there on the slash S line. 13 A. Salt Marsh, AF Holdings owner. 14 Q. So your testimony is that a person named Salt 15 Marsh signed this document on behalf the AF Holdings? 16 MR. GIBBS: 17 testimony. 18 Objection. Misstates the BY MR. PIETZ: 19 Q. Can you restate the question, please. Is it your testimony that a person named Salt 20 Marsh signed this document on behalf of AF Holdings as 21 its owner? 22 MR. GIBBS: 23 THE WITNESS: Same objection. I guess I can't offer any 24 testimony with respect to this document because this 25 document was not one of the noticed topics of the California Deposition Reporters Page: 52 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 54 of 291 Page ID #:1355 1 30(b)(6) notice and had you noticed it, I would have 2 been glad to inquire with the company as to 3 circumstances of the signature here and what the 4 thinking was when it was signed and whatnot. 5 6 I can speculate as to the circumstances of the signature now. 7 Q. 8 speculation. 9 deposition. Again, this is just speculation -- Then let's go ahead and stop you. No need for It's not worth a darn here in a Let me ask you a very simple question and 10 I'm hoping for a simple answer. 11 of AF Holdings? 12 A. Is Salt Marsh the owner The owner of AF Holdings is a trust. The name 13 of the -- the specific name of the trust, if it's Salt 14 Marsh, then yes, Salt Marsh is the owner of AF Holdings. 15 If it's something else -- let me finish -- if the name 16 of the trust is something else, then no, Salt Marsh 17 would not be the owner of AF Holdings, but if Salt Marsh 18 is the name of the trust on July 20, 2012, then, yes, 19 Salt Marsh is the owner of AF Holdings. 20 Q. So your testimony then on behalf of AF 21 Holdings is that you are not sure if the name of the 22 trust that owns AF Holdings is Salt Marsh or not? 23 24 MR. GIBBS: said. Objection. That's not what he He's not testifying for AF Holdings. 25 California Deposition Reporters THE WITNESS: Because we're so far outside the Page: 53 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 55 of 291 Page ID #:1356 1 scope of the noticed topics, it is -- 2 MR. RANALLO: 3 notice Topic 6 for us? 4 MR. GIBBS: 5 Mr. Hansmeier, could you read interrupting people. 6 Mr. Ranallo, could you please stop THE WITNESS: I was in the middle of my 8 MR. RANALLO: Go ahead and finish then. 9 THE WITNESS: Could you please repeat the 7 10 answer. question. 11 (Record read as requested.) 12 MR. GIBBS: 13 Again, my same objection from before. 14 THE WITNESS: This is pretty simple. I'm not 15 trying to be difficult. 16 don't happen to know what the name of the trust was on 17 the particular date in question. 18 All I'm saying is that I just FURTHER EXAMINATION BY MR. PIETZ 19 Q. Has the name of the trust changed over time? 20 A. I couldn't tell you what the name of the trust 21 was when it was formed. 22 of the trust has changed over time. 23 AF Holdings' corporate structure, it's a limited 24 liability company organized under the laws of 25 Federation -- laws of the Federation of St. Kitts & California Deposition Reporters I couldn't tell you if the name What I do know is Page: 54 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 56 of 291 Page ID #:1357 1 2 Nevis and the ownership interests are held in trust. Q. But your testimony as AF Holdings corporate 3 representative who has been subpoenaed to appear and 4 testify on the noticed topics, which include as No. 6, 5 AF Holdings' corporate structure, your testimony is that 6 as the corporate representative for AF Holdings, you do 7 not know the name of the trust that owns AF Holdings? 8 9 MR. GIBBS: Objection. Same objection. It falls outside of the noticed topic. 10 MR. PIETZ: 11 You can answer. 12 THE WITNESS: Duly noted. Yes. My testimony is that in 13 preparing for this deposition, I did not expect the name 14 of the trust to fall within the scope of this. 15 not review the history of the name of the trust. 16 BY MR. PIETZ: 17 18 19 20 Q. I did So did you make any inquiry whatever about the trust that owns AF Holdings? A. Yes, I did make inquiries about the trust that owns AF Holdings. 21 Q. What were these inquiries? 22 A. Well, my first inquire was what the corporate 23 structure is of AF Holdings. 24 that -- 25 Q. California Deposition Reporters Pardon. I was then informed Can I stop you and I don't mean to Page: 55 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 57 of 291 Page ID #:1358 1 interrupt. Who informed you? 2 A. Mr. Lutz. 3 Q. Continue. 4 A. And he informed me that the membership 5 interest of AF Holdings are held in trust and then I 6 asked -- following down to No. 6 -- who are the 7 beneficial owners of the trust and Mr. Lutz informed me 8 that the trust did not have defined beneficiaries. 9 Q. 10 AF Holdings? 11 A. With respect to the trust, yes. 12 Q. What other inquiry did you make about the Was that the extent of your inquiry about the 13 ownership of AF Holdings? 14 Before we go to that question. 15 16 17 Pardon me. Strike that. When did you have this conversation with Mr. Lutz about the ownership structure of AF Holdings? A. I can't recall the specific date in which I 18 discussed this matter with Mr. Lutz. 19 preparation for this deposition, so it would have been 20 sometime between the date of the notice and today. 21 22 23 24 25 Q. It was in Was it a telephone conversation? Did you speak with Mr. Lutz in person? A. Again, I can't recall whether this particular conversation took place in person or via the telephone. Q. California Deposition Reporters If it was a conversation that took place in Page: 56 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 58 of 291 Page ID #:1359 1 2 3 4 5 person, where did it occur? A. If it was a conversation that took place in person, it would have occurred in Las Vegas, Nevada. Q. If it was a conversation that occurred in person in Las Vegas, Nevada, when was that? 6 MR. GIBBS: 7 THE WITNESS: 8 Assuming facts. It would have been, I would say mid January. 9 Objection. BY MR. PIETZ: 10 Q. Mid January. So there was a face-to-face 11 meeting between you and Mr. Lutz in Las Vegas, Nevada in 12 mid January at which you discussed preparing for this 13 deposition; is that correct? 14 A. Well, I guess the purpose of the meeting was 15 not exclusively to prepare for the deposition. 16 purpose of the meeting was simple -- we would have 17 discussed items that are included on this list. The 18 Q. What other items did you discuss? 19 A. I can't recall the specific contents of a 20 21 22 23 24 25 given conversation in mid January with Mr. Lutz. Q. Was anybody else in attendance in that meeting other than you and Mr. Lutz? A. For this -- if we're talking about these items, it would have been me and Mr. Lutz. Q. California Deposition Reporters Was anybody else in that meeting in connection Page: 57 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 59 of 291 Page ID #:1360 1 with talking about other topics? 2 A. Not that I recall. 3 Q. So returning to my question that I struck a 4 moment ago. 5 whether it occurred in person or over the phone, the 6 extent of your inquiry about the ownership of AF 7 Holdings? 8 9 A. No. Was that one conversation with Mr. Lutz, I would not say so. I talked with Mr. Lutz on several occasions, whether it's in person or 10 over the telephone, regarding these items generally. 11 can't say that my conversation with Mr. Lutz regarding 12 the corporate structure was confined to a single 13 conversation or whether it was over the course of 14 several conversations. 15 16 17 Q. I Was Mr. Lutz the only source for your knowledge about the corporate ownership of AF Holdings? A. I guess I can't recall specifically whether he 18 would have been the only source of my knowledge 19 regarding corporate structure or not. 20 Q. So your answer is you don't know? 21 A. No, my answer is I don't recall specifically 22 whether Mr. Lutz was a sole source of my information 23 regarding AF Holdings corporate structure or whether 24 anyone else may have also contributed to my knowledge. 25 I would say that Mr. Lutz was my primary source of California Deposition Reporters Page: 58 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 60 of 291 Page ID #:1361 1 2 3 information regarding AF Holdings' corporate structure. Q. If we assume for a moment that you did have other sources than Mr. Lutz, what were those sources? 4 MR. GIBBS: 5 THE WITNESS: Objection. Calls for speculation. Well, for example, as I refresh 6 my recollection, I would say that documents, for 7 example, would be another source. 8 Q. What documents? 9 A. I could provide a few examples of documents. 10 For example the articles of organization of AF Holdings. 11 Q. Any other documents? 12 A. And the other various documents related to 13 corporate formation. 14 Q. What are those various documents? 15 A. Well, I couldn't give you an exhaustive list 16 sitting here right now, but I could give as an example, 17 the certificate of formation. 18 Q. So there is an articles of incorporation and a 19 certificate of formation for AF Holdings; is that 20 correct? 21 A. That's my recollection, yes. 22 Q. Who currently has custody of those documents? 23 A. I could not tell you who currently has custody 24 25 of those document. Q. California Deposition Reporters But you have reviewed them, correct? Page: 59 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 61 of 291 Page ID #:1362 1 A. I have reviewed them. 2 Q. Are there any other documents you reviewed 3 4 that relate to the corporate structure of AF Holdings? A. These are the two that come most predominately 5 to mind. 6 can't recall as I'm sitting here right now. 7 Q. There may have been other documents that I And the two documents that we just discussed, 8 were those filed with any kind of governmental agency 9 such as Nevis? 10 A. Well, the documents in question -- my 11 recollection of the documents is that one of the 12 documents was -- had a seal that was issued by Nevis, so 13 it's not filed with the -- they provide it to you. 14 articles of organization -- I know that traditionally 15 articles of organization are filed with governmental 16 authorities and I have no reason to believe that these 17 weren't also filed. 18 course, weren't filed, they were filed -- they may have 19 been signed by the relevant authorities. 20 21 Q. The Although the exact copies, of Do you still have copies of the specific documents that you reviewed? 22 A. Personally? 23 Q. Yes. 24 A. I don't believe I personally have the copies 25 anymore. California Deposition Reporters Page: 60 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 62 of 291 Page ID #:1363 1 Q. Do you have them in your e-mail? 2 A. I do not. 3 Q. So you had paper copies? 4 A. Yeah, I reviewed them in paper. 5 Q. Who gave them to you? 6 A. They were mailed by Mr. Lutz. 7 Q. So aside from conversations with Mr. Lutz and 8 reviewing two documents, have you done anything else to 9 investigate the corporate formation of AF Holdings? 10 A. Well, again, I did not testify that I reviewed 11 only two documents. 12 that I did review. 13 Q. I gave examples of two documents Hold on a second. Are you saying now that 14 you're sure you did review both of these documents in 15 preparation for this deposition, because I thought 16 before you'd said you weren't sure whether you reviewed 17 anything, but that if you had, it might be these two 18 documents. 19 you clarify for me, please? 20 A. I just want to make sure we're clear. Can To be clear I think my testimony was that as 21 we were going through this and I was recalling my 22 preparation that I recalled additional documents that I 23 had reviewed and I gave examples of two of those 24 documents and I stated there were other document, I 25 wouldn't know what to call them and I was not trying to California Deposition Reporters Page: 61 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 63 of 291 Page ID #:1364 1 insinuate that the two documents that I reviewed was the 2 exhaustive list that I reviewed. 3 Q. Let's get to the exhaustive list. What are 4 the other documents you reviewed with respect to the 5 ownership of AF Holdings? 6 A. Well, just to restate what I just said. I 7 can't recall exhaustively every single document that I 8 reviewed. 9 the certificate of formation and the articles of I remember specifically those two documents, 10 organization. 11 there are a variety of documents that are generated. 12 I'm not a corporate lawyer. 13 each of those documents. 14 15 Q. Obviously, when you create a company I don't know the names of So when Mr. Lutz mailed those documents to you, were they accompanied by other documents? 16 MR. GIBBS: 17 Outside the noticed topics. 18 Objection. BY MR. PIETZ: 19 Q. Let me rephrase. When Mr. Lutz mailed you the 20 two documents that you testified here today that you 21 reviewed, were these two documents accompanied by other 22 documents? 23 24 MR. GIBBS: Objection. Outside of the noticed topics. 25 California Deposition Reporters THE WITNESS: I think the assumption here is Page: 62 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 64 of 291 Page ID #:1365 1 that he just mailed me one package of documents and that 2 was it. 3 some documents. 4 there, I don't recall what was in the specific mailing. 5 I reviewed documents when I saw him in Las Vegas. 6 so, you know, the exact timing and which documents were 7 in which package and which documents were referred to at 8 what time, that's a pretty complex timeline that I 9 couldn't restate. I received -- you know, I received a mailing of Were those the only two documents in And 10 Q. How many packages were there? 11 A. My recollection is that there was -- there 12 were one or two packages. 13 Q. Can you recall any of the other documents that 14 you reviewed other than the two we have already 15 discussed today? 16 for me right now, please? 17 Can you describe and identify those MR. GIBBS: Objection. 18 the notice of deposition topics. 19 THE WITNESS: Outside the scope of 20 more. 21 the organizer. 22 I can provide an example of one BY MR. PIETZ: It was a document that listed Aisha Sargeant as 23 Q. And what was that document? 24 A. It was a document. 25 I don't know what the name or the title of the document would have been. California Deposition Reporters Page: 63 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 65 of 291 Page ID #:1366 1 Q. Approximately how long was it, how many pages? 2 A. I believe it was one or two pages. 3 Q. Fair enough. 4 Are there any other documents that you reviewed or was it just those three? 5 A. I'm certain I reviewed other documents. I 6 could not recall the nature and the text and the length 7 and the time I reviewed them, for the many documents. 8 If any of those occur to me during the course of the 9 deposition here today, I'll be glad to supplement my 10 testimony. 11 12 Q. Fair enough. All of the documents that you reviewed, did those come from Mr. Lutz? 13 MR. GIBBS: 14 THE WITNESS: 15 Yes. Outside the notice. To best of my recollection. 16 Objection. BY MR. PIETZ: 17 Q. So in your conversations with Mr. Lutz and in 18 your review of documents, was there any information 19 about the trust that owns AF Holdings at all? 20 21 MR. GIBBS: Objection. Outside the noticed topics. 22 THE WITNESS: Well, yes. The information 23 about the trust was that it owned AF Holdings and there 24 were not defined beneficiaries. 25 /// California Deposition Reporters Page: 64 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 66 of 291 Page ID #:1367 1 BY MR. PIETZ: 2 3 Q. That was information from your conversation with Mr. Lutz, correct? 4 A. That's my recollection. 5 Q. And in your conversation neither -- strike 6 that. 7 Neither in your conversation with Mr. Lutz nor 8 in any of the documents that you reviewed was there 9 anything on the topic of who owns the trust that owns AF 10 11 Holdings? A. 12 13 Once again -MR. GIBBS: Objection. Not in the noticed topics. 14 THE WITNESS: Trust -- well, once again, 15 Mr. Lutz -- my preparation for the deposition revealed 16 that the trust does not have -- or it's an undefined 17 beneficiary trust. 18 of a trust. 19 BY MR. PIETZ: 20 Q. I'm not sure what you mean by owner Other than the fact that there is a trust, the 21 name of which you do not know, and that the trust is an 22 undefined beneficiary trust, did your investigation of 23 the corporate structure of AF Holdings yield any other 24 details at all about the trust that owns AF Holdings? 25 California Deposition Reporters MR. GIBBS: Objection. Misstates testimony. Page: 65 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 67 of 291 Page ID #:1368 1 Objection. 2 Outside the notice of the deposition topics. THE WITNESS: Those are the two main points 3 that I learned during my investigation of the trust. 4 BY MR. PIETZ: 5 Q. Other than main points is there any other 6 information at all, any other detail or anything at all 7 that you learned about the trust that owns AF Holdings 8 other those two pieces of information? 9 MR. GIBBS: Same objection. 10 the notice of deposition topics. 11 THE WITNESS: Notice -- not in I guess nothing that I can 12 recall as I sit here right now. 13 question on the specific topic might jog my memory. 14 15 MR. PIETZ: Fair enough. We'll move on. I'd like to mark -- 16 17 Although, perhaps a FURTHER EXAMINATION BY MR. RANALLO Q. Let me quickly ask you about the beneficiaries 18 of this trust. 19 beneficiaries; is that true? You said there's undefined 20 A. Yes. 21 Q. So who controls the trust? 22 23 MR. GIBBS: Not in the notice of topics for this deposition. 24 25 Objection. THE WITNESS: I guess during my investigation of AF Holdings corporate structure, I did not inquire California Deposition Reporters Page: 66 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 68 of 291 Page ID #:1369 1 into who controls -- whatever that means -- the trust. 2 BY MR. RANALLO: 3 4 Q. mean? 5 6 MR. GIBBS: Objection. It calls for a legal conclusion. 7 8 What do you understand a beneficial owner to MR. RANALLO: I'm asking for his understanding. 9 THE WITNESS: I don't have an understanding of 10 what a beneficial owner means. 11 BY MR. RANALLO: 12 Q. 13 owners mean? 14 15 16 You don't know what the words beneficial MR. GIBBS: Objection. Misstates testimony. BY MR. RANALLO: Q. During your preparation for this deposition 17 you saw the words beneficial owners on the notice of 18 deposition; is that true? 19 A. Yes. 20 Q. And what did you take them to mean? 21 A. I take the phrase beneficial owner as used in 22 this notice of deposition as someone who directly or 23 indirectly has some sort of interest in the company. 24 25 Q. So the individuals who control the trust, would you consider them beneficial owners of AF California Deposition Reporters Page: 67 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 69 of 291 Page ID #:1370 1 Holdings? 2 3 MR. GIBBS: THE WITNESS: 8 9 FURTHER EXAMINATION BY MR. PIETZ BY MR. PIETZ: Q. Who is the trustee of the trust that owns AF Holdings? 10 11 I would not say they are beneficial owners of AF Holdings. 6 7 Misstates prior testimony. 4 5 Objection. MR. GIBBS: Q. Objection. You can answer it. Asked and answered. It's a different question. 12 Now I want to know not about the beneficial owners but 13 about the trustee. 14 MR. GIBBS: Objection. Not in the scope of 15 the questions -- not in the scope of the noticed topics 16 for the deposition. 17 BY MR. PIETZ: 18 Q. You can answer. 19 A. I do not know the identity of the trustee of 20 21 22 the trust that owns AF Holdings. Q. Who is settler of the trust that owns AF Holdings? 23 MR. GIBBS: 24 THE WITNESS: Not in the notice of the deposition topics. 25 Objection. California Deposition Reporters What is a settler? Page: 68 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 70 of 291 Page ID #:1371 1 2 BY MR. PIETZ: Q. It's, I believe, somebody who helps form a 3 trust and may be responsible -- I'm not entirely sure. 4 However, I'm looking at information on the Internet that 5 trusts in Nevis have a settler, a beneficiary and 6 trustee, so I'm asking you as the corporate 7 representative of AF Holdings, whether the trust that 8 owns AF Holdings has a settler -- for the court reporter 9 that's S-E-T-T-L-E-R. 10 MR. GIBBS: 11 deposition topics. 12 Objection. Not in the notice of of something. 13 You're asking for a legal definition THE WITNESS: I guess I still don't understand 14 what the settler is. 15 what functions they would perform? 16 BY MR. PIETZ: 17 Q. Does it have any information about Frankly, I'm going to be perfectly honest. 18 I'm not sure what a settler is with respect to a trust 19 either, so maybe it's not an appropriate question 20 because neither of us are sure what we're talking about. 21 Let me ask it a different way. If somebody 22 wanted to terminate the trust that owns AF Holdings, who 23 would have the authority to do so? 24 25 MR. GIBBS: Objection. Outside of the scope of noticed deposition topics. California Deposition Reporters Page: 69 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 71 of 291 Page ID #:1372 1 THE WITNESS: I would assume that you would 2 have to look at the terms of the trust. 3 what the terms of the trust or who is empowered to do 4 that. 5 BY MR. PIETZ: 6 Q. How would one look at the terms of the trust? 7 8 I don't know MR. GIBBS: Objection. Outside the notice of topics for the deposition. 9 THE WITNESS: 10 look at the trust. 11 I don't know how someone would BY MR. PIETZ: 12 Q. But there are terms of the trust, correct? 13 14 MR. GIBBS: Objection. Outside the notice and also assumes facts. 15 THE WITNESS: I can only speculate. As you 16 stated earlier trusts are generally reduced to a written 17 document. 18 the trust documents, so I don't know how you would 19 determine who has the authority to do anything with the 20 trust. 21 BY MR. PIETZ: 22 Was that done in this case? I did not review I assume it would be based on the terms. Q. So I think you're saying that there are trust 23 documents out there, but that you haven't reviewed them; 24 is that correct? 25 California Deposition Reporters MR. GIBBS: Objection. Calls for speculation. Page: 70 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 72 of 291 Page ID #:1373 1 Objection. 2 deposition. 3 Not in the notice of topics for the THE WITNESS: I can only speculate whether or 4 not there are trust documents. 5 BY MR. PIETZ: 6 Q. Returning to the question. Who caused the 7 trust that owns AF Holdings to be formed other than 8 Aisha Sargeant? 9 10 11 MR. GIBBS: Objection -- BY MR. PIETZ: Q. Strike that. Let me ask it a different way. 12 Who asked Ms. Sargeant or paid Ms. Sargeant to form the 13 trust that owns AF Holdings? 14 15 MR. GIBBS: Objection. Outside the notice of topics for this deposition. 16 THE WITNESS: I do not know who paid 17 Ms. Sargeant to form the trust. 18 BY MR. PIETZ: 19 Q. Just to clarify. I'm asking not for your 20 personal knowledge, but for the knowledge of AF 21 Holdings. 22 23 MR. GIBBS: Objection. Outside the notice of topics for this deposition. 24 MR. PIETZ: 25 THE WITNESS: California Deposition Reporters Duly noted. You can answer. In the course of preparing for Page: 71 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 73 of 291 Page ID #:1374 1 this deposition I did not see any questions regarding 2 payment to the person who formed the trust that owns AF 3 Holdings and so I -- on behalf of -- AF Holdings has 4 no -- could only speculate in relation to these noticed 5 topics. 6 MR. GIBBS: Let's stop for one second because 7 these questions are all outside the noticed topics. 8 you can point to a place where they are, then maybe we 9 can be better informed in terms of what you guys are 10 asking, but if they're outside the noticed topics, he 11 can't speak about that. If 12 MR. PIETZ: He can only speculate. I respectfully disagree, but in 13 any event that's not something that we need to get into 14 on the record right now. 15 afterwards. 16 exclude stuff later, you're welcome to do so. 17 We can worry about that This is discovery. MR. GIBBS: If you want to move to Understood. I'm just saying that 18 if there is some sort of topic that you can refer us 19 to -- 20 MR. PIETZ: There's several, including No. 6 21 and there's another one, but I'll have to get that to 22 you later. 23 24 MR. GIBBS: For the record we don't believe No. 6 covers that. 25 California Deposition Reporters MR. PIETZ: Fair enough. Duly noted. Let's Page: 72 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 74 of 291 Page ID #:1375 1 move on to AF Holdings. 2 BY MR. PIETZ: 3 Q. Who caused AF Holdings to be formed? 4 A. Ms. Sargeant. 5 Q. And who paid or asked Ms. Sargeant to form AF 6 Holdings? 7 incorporator of AF Holdings other than Ms. Sargeant? 8 9 10 A. In other words, who is the organizer or Well, Ms. Sargeant I believe was the organizer and incorporator of AF Holdings. Q. 11 Who asked her to do that? 12 MR. GIBBS: THE WITNESS: 17 Can you ask the question again just to make sure I answer it precisely. 15 16 Outside the noticed topics for this deposition. 13 14 Objection. (Record read as requested.) BY MR. PIETZ: Q. Let me rephrase. I'm assuming -- and I'll ask 18 you to follow along with me on this assumption -- that 19 somebody paid Ms. Sargeant some kind of money to form AF 20 Holdings on the island of Nevis. 21 paid her the money to form AF Holdings? 22 23 MR. GIBBS: Objection. 24 25 Objection. Who did that? Who Calls for speculation. Outside the notice of deposition topics. THE WITNESS: The reason I'm hesitating is because I don't know the exact, you know, trail of California Deposition Reporters Page: 73 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 75 of 291 Page ID #:1376 1 individuals that ultimately resulted in Ms. Sargeant 2 forming AF Holdings, but she would have done so 3 ultimately through the direction of Mr. Lutz. 4 BY MR. PIETZ: 5 6 Q. So Mr. Lutz was responsible for asking Ms. Sargeant to form AF Holdings; is that correct? 7 A. Yes. 8 Q. Now, you mentioned a trail of other 9 10 individuals who may have been involved. trail of individuals who were also involved? 11 12 Who was on that MR. GIBBS: Objection. Asked and answered. He said he didn't know. 13 THE WITNESS: The so-called trail of 14 individuals, I probably couldn't identify every single 15 person on that trail, but Mr. Lutz would have delegated 16 this matter to a company that Ms. Sargeant works for, 17 which I believe the name is Trust Services Limited. 18 BY MR. PIETZ: 19 Q. And is that based on the island of Nevis? 20 A. I don't know where they're based out of, Trust 21 22 23 Services Limited. Q. Holdings? 24 25 Did anybody instruct Mr. Lutz to form AF MR. GIBBS: Objection. Calls for speculation and objection outside of notice of topics of the California Deposition Reporters Page: 74 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 76 of 291 Page ID #:1377 1 deposition. 2 BY MR. PIETZ: 3 Q. You can answer. 4 A. Not that I'm aware of. And it's also AF 5 Holdings' position that Mr. Lutz was not instructed by a 6 third party to form AF Holdings. 7 8 Q. of AF Holdings, who would have the authority to do so? 9 10 If someone wanted to terminate the existence MR. GIBBS: notice of topics. 11 Objection. Objection. THE WITNESS: Again, not in the Calls for speculation. Well, I'm not an expert in the 12 corporate law of the Federation of St. Kitts & Nevis. 13 That being said I would speculate that -- 14 Q. Hold on a second. 15 A. I'm not done answering my question. Either 16 the owner or -- I guess I would have to review the 17 articles of organization to determine whether Mr. Lutz 18 possess the authority to cause a termination. 19 20 Q. Who is the -- I believe it's a trust; is that correct? 21 A. Yes. 22 Q. We have been through that. 23 Are there any members of AF Holdings other than the trust? 24 A. No. 25 Q. Is there a manager of AF Holdings? California Deposition Reporters Page: 75 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 77 of 291 Page ID #:1378 1 2 3 4 5 6 7 8 9 A. No. That is the formal title that Mr. Lutz holds. Q. So he's both the sole employee and the manager of AF Holdings; is that correct? A. That's correct. I should clarify my earlier testimony regarding employee status. Q. So he's not an employee. He's the manager. He's the manager of the AF Holdings, is what we're saying now? A. Again, it's -- I don't know what the precise 10 legal distinctions are, but for all practical purposes 11 he's the manager. 12 Q. Fair enough. Are there any other officers of 13 AF Holdings that hold titles like CEO, president, 14 treasurer, secretary other than Mr. Lutz? 15 A. No. 16 Q. So is it your testimony that Mr. Lutz would be 17 the only person who had authority to terminate the 18 existence of AF Holdings, LLC? 19 MR. GIBBS: 20 Objection. 21 Objection. Misstates testimony. deposition. 22 Not in the noticed topics for the THE WITNESS: Again, my testimony regarding 23 the individuals with the authority to terminate AF 24 Holdings is that I would have to review very carefully 25 AF Holdings articles of organization to determine who California Deposition Reporters Page: 76 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 78 of 291 Page ID #:1379 1 does possess the authority. 2 the authority to terminate AF Holdings and whether or 3 not the articles also provide Mr. Lutz with the 4 authority to terminate AF Holdings is something that can 5 only be determined by careful reference to the articles 6 of organization. 7 BY MR. PIETZ: 8 9 10 Q. Ostensibly the owners have So a moment ago you said the owners have the authority to terminate the trust. which is the trust? 11 Sorry. Don't you mean owner, Let me rephrase. A moment ago you said that the owners have 12 authority to terminate AF Holdings. 13 because the owner is the trust, right? Did you mean owner 14 A. The owner of AF Holdings is a trust. 15 Q. Okay. 16 A. When I used owners before I was referring more And are there owners of the trust? 17 generally to the principle that owners have the 18 authority to terminate the company, not to indicate that 19 AF Holdings had more than one owner. 20 21 THE REPORTER: Can we take a break? I need to use the restroom. 22 MR. PIETZ: 23 (Off the record at 11:41 a.m. and back 24 25 California Deposition Reporters Sure. on the record at 11:48 a.m.) MR. PIETZ: Back on the record of the 30(b)(6) Page: 77 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 79 of 291 Page ID #:1380 1 deposition of AF Holdings. 2 Exhibit 102. 3 (Whereupon Defendants' Exhibit No. 102 4 5 6 I'd like to mark this as was marked for identification.) BY MR. PIETZ: Q. Mr. Hansmeier, this is similar to another 7 document that we discussed today. 8 Certification by Parties and Counsel. 9 the Northern District of California No 11-C-3335. It is an ADR This one filed in 10 Mr. Hansmeier, could you read me what it says 11 on line 19 and we'll finish through to where it ends on 12 line 20, please 13 MR. GIBBS: Objection. 14 the notice of deposition topics. 15 This is not part of part of this case. 16 THE WITNESS: Objection. Not even Pursuant to Civil L.R. 16-8(b) 17 and ADR L.R. 3-5(b), each of the undersigned certifies 18 that he or she has. 19 Q. And then in Paragraph 1 it says read the 20 handbook entitled, Dispute Resolution Procedures. 21 then there are two signature lines, including one that 22 says slash s Salt Marsh, AF Holdings owner. 23 24 And I would like to ask you, again, is Salt Marsh a he or a she. 25 California Deposition Reporters Meaning, is Salt Marsh a natural person? MR. GIBBS: Objection. Asked and answered. Page: 78 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 80 of 291 Page ID #:1381 1 Objection. 2 Outside of notice of deposition topics. THE WITNESS: The only information I can glean 3 about Salt Marsh from this document is that Salt Marsh 4 has been identified as AF Holdings owner. 5 BY MR. PIETZ: 6 Q. Does AF Holdings know who signed this on 7 behalf of Salt Marsh or who gave the filer permission to 8 use the name Salt Marsh? 9 10 MR. GIBBS: Objection. Outside the notice of deposition topics. 11 THE WITNESS: 12 regarding this filing. 13 I didn't speak to anyone FURTHER EXAMINATION BY MR. RANALLO 14 Q. When you spoke with Mr. Lutz about the 15 ownership of AF Holdings, did he ever indicate that a 16 human being named Salt Marsh has any ownership interest 17 in AF Holdings? 18 A. He indicated that a trust owns AF Holdings. 19 Q. So no human beings own AF Holdings; is that 20 true? 21 A. Again, a trust owns AF Holdings. 22 Q. And a trust is not an actual person; is that 23 correct? 24 MR. GIBBS: 25 THE WITNESS: California Deposition Reporters Objection. Calls for speculation. I don't know what the definition Page: 79 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 81 of 291 Page ID #:1382 1 of a natural person is under the law. 2 BY MR. RANALLO: 3 Q. A natural person is a human being, okay, a 4 living, breathing human being. 5 any owners that are living and breathing human beings? 6 A. No. AF Holdings has an owner that's a trust. 7 MR. RANALLO: 8 MR. PIETZ: 9 10 Does AF Holdings have Okay. Fair enough. FURTHER EXAMINATION BY MR. PIETZ Q. Moving on. We've heard a lot today that your 11 knowledge about the ownership of AF Holdings is based on 12 conversations with Mr. Lutz. 13 Mr. Lutz is more knowledgeable about AF Holdings than 14 you are? 15 16 17 18 MR. GIBBS: Is it your view that Objection. Calls for speculation. BY MR. PIETZ: Q. Strike that. Let me ask it a different way. How come we're not hearing from Mr. Lutz today? 19 MR. GIBBS: 20 You know the rules of a PMK? 21 Objection. BY MR. PIETZ: 22 Q. You can answer. 23 A. I guess you'd have to ask Mr. Lutz. 24 Q. Fair enough. 25 I would like to return to something we talked about earlier this morning. California Deposition Reporters I Page: 80 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 82 of 291 Page ID #:1383 1 believe you said -- and correct me if I'm wrong -- that 2 AF Holdings has never recognized any revenue, that 3 instead AF Holdings' settlement proceeds are paid into 4 attorney trust accounts and that that money is then used 5 on litigation expenses in other litigation; is that 6 correct? 7 8 MR. GIBBS: Objection. Misstates testimony -- prior testimony. 9 THE WITNESS: Yeah, well I mean, I guess I'll 10 restate my answer from before. 11 was that any proceeds of settlements generated aren't 12 distributed to AF Holdings, but are instead used to 13 either pay for previously incurred expenses or held by 14 the attorneys to pay for future litigation expenses. 15 BY MR. PIETZ: 16 Q. My answer from before So if a John Doe defendant mails in a check or 17 makes a credit card payment to settle a lawsuit with AF 18 Holdings, where is that money initially deposited? 19 MR. GIBBS: 20 THE WITNESS: Objection. Calls for speculation. Are you asking for a specific 21 bank or are you asking for -- 22 BY MR. PIETZ: 23 Q. Sure. 24 A. I don't know what bank it gets deposited in. 25 Let's start with a bank. I suppose it would depend on the attorney associated California Deposition Reporters Page: 81 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 83 of 291 Page ID #:1384 1 2 with the case. Q. So is it your testimony then that if the check 3 comes, it would be deposited in the trust account for 4 the attorney who is counsel of record in that case for 5 the plaintiff, AF Holdings; is that correct? 6 MR. GIBBS: 7 THE WITNESS: 8 9 10 Objection. As a general principle, yes. BY MR. PIETZ: Q. What are the accounts where AF Holdings' money is maintained, each of them? 11 MR. GIBBS: Objection. 12 topics for the deposition. 13 speculation. 14 15 Misstates testimony. Not in the noticed Objection. Calls for Asked and answered. MR. PIETZ: The objection is duly noted. I would refer the deponent to Topics No. 10, 11 and -- 16 MR. RANALLO: 17 MR. PIETZ: And ask that the deponent answer. 18 MR. GIBBS: Same objection in terms of the 19 actual banks. 20 11, 12. You're asking him about the banks. THE WITNESS: 21 numbers? 22 Are you asking for account BY MR. PIETZ: 23 Q. No, I'm not asking for account numbers. 24 Although, we'll get to that. 25 is a list of each account where AF Holdings' settlement California Deposition Reporters What I would like to know Page: 82 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 84 of 291 Page ID #:1385 1 proceeds are deposited. 2 name of the attorney who owns that account, so a list of 3 names of attorneys who deposit AF Holdings' proceeds 4 into their attorney-client trust accounts. 5 6 MR. GIBBS: 8 Objection. deposition topics. 7 And why don't we start with the Not on the notice of 10, 11 are not covering those. MR. PIETZ: I disagree. The deponent can answer. 9 THE WITNESS: I don't think it's humanly 10 possible for anyone to commit to memory a list of -- I 11 can't even speculate how many attorneys have worked on 12 AF Holdings cases over the course of its existence and 13 then also to commit to memory the account names 14 associated with those attorneys and then as you alluded 15 to the account numbers associated with those bank 16 accounts. 17 I don't know if that's humanly possible. I can give you the general principles and the 18 general guidelines that state that if a settlement comes 19 in for, you know, let's say a John Doe lawsuit, having 20 settled with Mr. Navasca, for example, then the money 21 would go to the attorney, their trust account, and then 22 would be -- would stay there, because frankly the scope 23 of the infringement is so significant that there's still 24 a lot of fight left to stop people from pirating the 25 works subject to AF Holdings' copyrights. California Deposition Reporters Page: 83 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 85 of 291 Page ID #:1386 1 Q. Mr. Hansmeier, I appreciate the general gist 2 of what it is that you told me. 3 specifics. 4 has a client trust account where AF Holdings' settlement 5 proceeds have been deposited. 6 account number and I'm not asking for you to speculate. 7 What I'm asking is, as a 30(b)(6) witness for the AF 8 Holdings entity, name me the accounts where AF Holdings' 9 proceeds have been deposited. I would like the list of each attorney that 10 11 I'm asking for MR. GIBBS: I'm not asking for the Objection. This is not one of the noticed topics, period. 12 MR. PIETZ: Are you instructing him not to 14 MR. GIBBS: No, I'm just telling you. 15 MR. RANALLO: 13 16 answer? AF Holdings revenues derived from BitTorrent copyright -- 17 MR. GIBBS: 18 MR. RANALLO: Since when does that point out --- including the distribution of 19 said revenues by AF Holdings and the identity of the 20 recipient. 21 MR. PIETZ: Guys, we've got to make a record 22 here. 23 not instructing him not to answer, then answer the 24 question. We don't need to get into all of this. 25 California Deposition Reporters THE WITNESS: If you're Well, in response to your Page: 84 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 86 of 291 Page ID #:1387 1 question, I would say that if you wanted a list of bank 2 accounts, such as a specific and almost encyclopedic 3 list of information, I would have put that topic very 4 specifically on your notice of deposition topics, so I 5 could have spent the day or two days or three days 6 required to memorize a list of bank accounts and 7 attorney names and so forth and so on. 8 9 I would note that the attorneys that represent AF Holdings are all listed on the public record. It's 10 very easy to find out and secondly, each of those 11 attorneys can be presumed to have trust accounts, as 12 attorneys do, associated with their practices and so the 13 list of the attorneys, although I can't recite each one 14 from memory, from top to bottom, is very easily 15 determined and you can then go from the attorney to 16 their trust account. 17 18 EXAMINATION BY MR. RANALLO Q. Let me ask you this. When AF Holdings sends 19 out their initial settlement letter with the payment 20 authorization form, that payment authorization form has 21 a Chicago, Illinois address; is that correct, regardless 22 of whether the case itself is? 23 MR. GIBBS: 24 THE WITNESS: 25 Objection. Compound question. Can you restate the question, please? California Deposition Reporters Page: 85 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 87 of 291 Page ID #:1388 1 2 BY MR. RANALLO: Q. When AF Holdings sends out settlement letters 3 with the request for payment authorization, the person 4 returns it with payment, all of those payments 5 regardless of the case go to one place in Illinois; is 6 that correct? 7 A. No. 8 Q. And so if Mr. Navasca in this case received a 9 10 11 12 13 settlement letter from AF Holdings, would it have directed him to make a payment to Mr. Gibbs? A. Well, if you have a copy of the letter that he received, I would just reference the letter. Q. I'm asking you. You just described how this 14 process works and I want -- now in this specific case to 15 see if it would be like that in this case. 16 A. 17 I can only speculate and say that if -MR. PIETZ: Can I interrupt for a second? You 18 said speculate a number of times today. 19 make sure that we're clear -- because we didn't cover 20 this in the admonitions -- that we're not asking you to 21 speculate today. 22 between speculation and an estimate? 23 in your best estimate. 24 between speculating and estimates? 25 California Deposition Reporters I just want to Do you understand the difference We are interested Do you understand the difference Let me give you an example, because I think Page: 86 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 88 of 291 Page ID #:1389 1 it's fairly instructive. 2 me, based on memory, how much money you have in your 3 wallet, you might be able to make an estimate to the 4 amount of money that you have in your wallet. 5 to ask you to tell me how much money I have in my 6 wallet, that would be speculation. 7 are clear. 8 today. 9 should cover that. 10 If I was to ask you to tell If I was Just to make sure we We're not asking you to speculate here I'm sorry to interrupt, but I felt that we In any event, let's return to the questions. 11 THE WITNESS: 12 Could you repeat the question, please? 13 Sure. BY MR. RANALLO: 14 Q. Yes. You previously said that each attorney 15 that has appeared on behalf of AF Holdings maintains a 16 trust account; is that true? 17 A. In my best estimate attorneys who practice 18 law, who collect revenues on behalf of clients maintain 19 trust accounts, yes. 20 21 Q. on behalf of AF Holdings, your company? 22 23 24 I'm asking for attorneys that collect revenues MR. GIBBS: Objection. Calls for speculation. BY MR. RANALLO: Q. 25 California Deposition Reporters Do they maintain individual trust accounts? MR. GIBBS: Objection. Calls for speculation. Page: 87 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 89 of 291 Page ID #:1390 1 THE WITNESS: I have not reviewed the specific 2 bank structures of the attorneys who represent AF 3 Holdings. 4 FURTHER EXAMINATION BY MR. PIETZ 5 Q. Let me ask the question a different way. When 6 proceeds from AF Holdings' settlements come in, are they 7 initially deposited in accounts associated with Prenda 8 Law and then distributed to the attorneys or are the 9 proceeds deposited directly into the trust accounts for 10 the local counsel? 11 12 MR. GIBBS: Objection. Not within the notice of the deposition topics. 13 MR. PIETZ: 14 THE WITNESS: 15 handled on a case-by-case basis. 16 goes directly into their trust accounts and for other 17 attorneys it goes into accounts associated with Prenda 18 Law. 19 BY MR. PIETZ: 20 21 Q. For some attorneys it What attorneys does it go directly into their MR. GIBBS: the deposition. 24 25 I believe there's -- that's trust accounts? 22 23 You can answer. Not one of the noticed topics of Objection. THE WITNESS: Calls for speculation. Again, this is, you know, on a case-by-case basis that I'm trying to recall. California Deposition Reporters One easy Page: 88 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 90 of 291 Page ID #:1391 1 example would be the Anti-Piracy Law Group maintains 2 their own trust accounts separate and independent from 3 the Prenda Law. 4 BY MR. PIETZ: 5 Q. Let me be clear. What I'm interested in are 6 names of the attorneys here in response to this next 7 question. 8 What attorneys receive AF Holdings' settlement proceeds 9 directly into their trust accounts? 10 A. 11 Names of the attorneys, not account numbers. Again -MR. GIBBS: 12 the deposition notice. 13 Objection. Outside the scope of of privilege possibly. 14 15 MR. PIETZ: Also, we're kind of into the air I disagree. Are you instructing him not to answer? 16 MR. GIBBS: No. 17 MR. PIETZ: Continue. 18 THE WITNESS: Just a warning. I don't believe that we have 19 attorneys who represent us who maintain trusts accounts 20 in their own name versus in the name of a law firm. 21 could be wrong. 22 whether individual attorneys within a firm maintain 23 trust accounts in their own name -- if I understand your 24 question correctly -- because you're looking for 25 attorneys and not law firms; is that correct? California Deposition Reporters I It comes down to the mechanics, so Page: 89 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 91 of 291 Page ID #:1392 1 2 BY MR. PIETZ: Q. I'm looking for names of attorneys, so whether 3 the trust account is in the attorney's name or in the 4 name of that attorney's firm. 5 a list of names of attorneys who are recipients, 6 directly, meaning the money is paid into their trust 7 accounts of AF Holdings' settlement proceeds. 8 9 10 MR. GIBBS: What I'm interested in is Objection. Also, what are you talking about? Calls for speculation. Where is this money coming from? 11 MR. PIETZ: AF Holdings' settlement proceeds. 12 Go ahead and answer the question 13 THE WITNESS: I'm not aware of any attorney 14 who directly receives, in a trust account held by that 15 attorney, settlement proceeds of AF Holdings. 16 BY MR. PIETZ: 17 Q. How do they indirectly receive the money then? 18 A. Well, a given attorney doesn't indirectly or 19 directly receive settlement proceeds. 20 account gives the settlement proceeds. 21 Q. The firm's trust Let's ask for names of the firms then, if 22 that's the way you would like to do this. 23 the name of each firm that directly receives settlement 24 proceeds into its trust account, or if the firm is a 25 solo practitioner, just state the person's name? California Deposition Reporters Please state Page: 90 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 92 of 291 Page ID #:1393 1 MR. GIBBS: Objection. 2 talking about? 3 since the formation? 4 What scope are we terms of the scope in time? 5 6 Are we talking about just over 2012 or MR. PIETZ: What are we talking about here in Since the formation of AF Holdings. 7 THE WITNESS: Well, I'm not certain that I'll 8 be able to provide a comprehensive list of every 9 attorney or every law firm or bank account that any 10 single dollar and any single settlement proceeds in an 11 AF Holdings case has been put into, but I can provide, 12 you know, some names. 13 one firm that AF Holdings' settlement proceeds have been 14 put into. 15 I believe that AF Holdings' settlement proceeds have 16 been put into accounts held by a firm called Anderson & 17 Associates. 18 BY MR. PIETZ: For example, Prenda Law, would be Anti-Piracy Law Group would be a second one. 19 Q. Any others? 20 A. Beyond that that I would be speculating as to 21 whether the money is directly forwarded to Prenda Law or 22 if it's first passed through the trust accounts of the 23 counsel in any given jurisdiction. 24 25 Q. How about the law firm of Steele Hansmeier. Were AF Holdings' litigation proceeds ever paid directly California Deposition Reporters Page: 91 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 93 of 291 Page ID #:1394 1 into the trust account of the law firm of 2 Hansmeier? 3 4 MR. GIBBS: Objection. Steele Outside the scope of the noticed topics. 5 THE WITNESS: If -- I can't recall the exact 6 timing of AF Holdings or the sale of Steele Hansmeier, 7 Steele Hansmeier to Prenda Law, but if we were 8 representing AF Holdings during that time, then it would 9 have gone into the trust account for Steele Hansmeier. 10 11 12 BY MR. PIETZ: Q. Who are the attorneys associated with or the partners in the Anti-Piracy Law Group? 13 A. You'd have to ask them. 14 Q. I'm asking AF Holdings, which has just 15 testified that its settlement proceeds are paid directly 16 into the trust account of Anti-Piracy Law Group. 17 the corporate response then that it's not sure who is in 18 charge of those funds? 19 20 MR. GIBBS: Objection. 21 Objection. Is it Misstates testimony. Not in the notice of deposition topics. THE WITNESS: The attorney who represents AF 22 Holdings through the Anti-Piracy Law Group is Paul 23 Duffy. 24 BY MR. PIETZ: 25 Q. California Deposition Reporters Are there any other attorneys connected to the Page: 92 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 94 of 291 Page ID #:1395 1 2 Anti-Piracy Law Group? A. Paul Duffy is the attorney who represents AF 3 Holdings and if there are other attorneys at the 4 Anti-Piracy Law Group or other counsel, we're only aware 5 of Mr. Duffy. 6 Q. What about John L. Steele, your former law 7 partner. 8 any trust account in which he has an interest? Are AF Holdings' settlement proceeds paid into 9 10 MR. GIBBS: topics. Objection. Objection. 11 Not one of the noticed Calls for speculation. THE WITNESS: Well, you made the point before 12 about Steele Hansmeier. 13 interest in that trust account, then yes. 14 scope of Steele Hansmeier, no. 15 BY MR. PIETZ: 16 Q. So to the extent that he had an Beyond the So Mr. Steele does not have any right or 17 interest in the trust accounts for Prenda Law, for the 18 Anti-Piracy Law Group or for Anderson & Associates; is 19 that correct? 20 MR. GIBBS: 21 Way outside the notice of deposition topics. 22 Objection. BY MR. PIETZ: 23 Q. Please answer. 24 A. From AF Holdings' knowledge, no. 25 Q. How about yourself personally, Mr. Hansmeier. California Deposition Reporters Page: 93 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 95 of 291 Page ID #:1396 1 Do you have authority or an interest in the Prenda trust 2 account? 3 A. No. 4 Q. How about the Anti-Piracy Law Group, do you 5 personally have authority or an interest in that trust 6 account? 7 A. No. 8 Q. How about Anderson & Associates? 9 A. No. 10 Q. How about the Alpha Law Firm, LLC? 11 A. Yes. 12 Q. Does Alpha Law Firm, LLC, represent AF 13 14 Holdings? A. It represents AF Holdings in, I would say four 15 or five cases, currently pending in the District of 16 Minnesota. 17 Q. 18 Does the Alpha Law Firm represent Guava, LLC? MR. GIBBS: Objection. 19 deposition noticed topics. 20 That's outside the BY MR. PIETZ: 21 Q. Are there any other law firms that have trust 22 accounts where AF Holdings' settlement proceeds are paid 23 directly into the trust account for that law firm or 24 sole practitioners or is it just those three, Prenda, 25 Anti-Piracy Law Group and Anderson & Associates? California Deposition Reporters Page: 94 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 96 of 291 Page ID #:1397 1 MR. GIBBS: 2 THE WITNESS: Objection. Compound question. As I testified before, I'm not 3 familiar with the exact mechanisms by which the money 4 goes from one account to another. 5 my knowledge those are the ones. 6 BY MR. PIETZ: 7 Q. Those -- to best of You just testified that Alpha Law Firm 8 represents AF Holdings. 9 settlement proceeds in the cases where Alpha Law Firm is 10 counsel of record? 11 12 MR. GIBBS: 15 Objection. Outside the scope of the topics in the notice of deposition. 13 14 Has AF Holdings collected any THE WITNESS: Yes. BY MR. PIETZ: Q. And when AF Holdings collected those 16 settlement proceeds, were they paid directly into the 17 Alpha Law Firm? 18 A. No. 19 Q. How did Alpha Law Firm receive the money? 20 A. The Alpha Law Firm did not receive the money. 21 Q. Who received the money? 22 A. The proceeds were directed to the Prenda Law 23 24 25 trust account. Q. So to be clear. When Alpha Law Firm settles AF Holdings cases, the proceeds are paid to the Prenda California Deposition Reporters Page: 95 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 97 of 291 Page ID #:1398 1 2 3 4 Law Firm, not to the Alpha Law Firm; is that correct? A. They are deposited into the Prenda Law trust account, yeah. Q. So what if Alpha Law Firm or yourself needs 5 those proceeds to file further litigation, how do you 6 access the funds? 7 8 MR. GIBBS: Objection. 9 10 11 Objection. Calls for speculation. Outside the notice of deposition topics. THE WITNESS: I don't understand the question. BY MR. PIETZ: Q. I believe you testified earlier that 12 settlements of AF Holdings' proceeds are paid into a 13 trust account, so that the money can be used by 14 attorneys in conducting litigation, whether it's paying 15 past expenses or paying ISPs to turn over the names. 16 You just testified that you've settled AF Holdings' 17 cases on behalf of Alpha Law Firm and that the 18 settlement proceeds in those cases were deposited into 19 Prenda Law's trust account. 20 to access those funds to file new lawsuits on behalf of 21 AF Holdings or pay litigation expenses for AF Holdings, 22 how does Alpha Law Firm access the funds? 23 24 MR. GIBBS: So if Alpha Law Firm needs Objection. Outside the notice of deposition topics. 25 California Deposition Reporters THE WITNESS: So you're saying in the future Page: 96 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 98 of 291 Page ID #:1399 1 if Alpha Law Firm filed cases on behalf of AF Holdings, 2 how would we get the money? 3 Q. No. Let's try it again. I believe you 4 testified earlier that AF Holdings' settlement proceeds 5 are paid into law firm trust accounts, so that the 6 lawyers litigating AF Holdings cases can use the 7 proceeds to spend on expenses incurred in connection 8 with the litigation, like paying ISPs for their time in 9 responding to subpoenas. Now, you just testified a 10 moment ago that AF Holdings has indeed settled cases 11 where counsel of record is the Alpha Law Firm and that 12 those settlement proceeds were paid into the trust 13 account of Prenda, not Alpha Law Firm. 14 So my question for you is if Alpha Law Firm 15 was going to use the settlement proceeds to further 16 litigation on behalf of AF Holdings, how would it access 17 the settlement proceeds that have been deposited into 18 the Prenda trust account? 19 MR. GIBBS: 20 THE WITNESS: Objection. Compound question. Just so I understand the 21 question. 22 forward for AF Holdings, how would we get access to the 23 funds to pay for those expenses? 24 BY MR. PIETZ: 25 Q. California Deposition Reporters You're asking if we were to file cases going That's not the question I asked. I'm sorry if Page: 97 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 99 of 291 Page ID #:1400 1 2 it's confusing. A. I understand the lead up to the question. 3 It's just the last part of it that I'm having trouble 4 getting my head around. 5 Q. Fair enough. Let me ask it a different way. 6 In the cases that Alpha Law Firm have settled for AF 7 Holdings, where the proceeds were deposited into the 8 Prenda trust account, has Alpha Law Firm ever withdrawn 9 those proceeds to use in connection with other AF 10 Holdings' litigation? 11 12 MR. GIBBS: Objection. Compound. Objection. Not in the notice of deposition topics. 13 THE WITNESS: Alpha Law Firm has not withdrawn 14 money from a trust account owned and operated by Prenda. 15 BY MR. PIETZ: 16 Q. Has Prenda sent Alpha Law Firm a check? 17 A. I think the point you're trying to get is how 18 do we cover litigation expenses on behalf of AF Holdings 19 if the money isn't going to into Alpha Law Firm, but is 20 instead going into Prenda. 21 question, if that's your question, is that would we ask 22 for reimbursement from Prenda for a certain -- for the 23 litigation expenses, for example, filing fees, or if 24 there's ISPs bills or whatever else. 25 Q. California Deposition Reporters So the answer to your How would that reimbursement come? Do you Page: 98 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 100 of 291 Page ID #:1401 1 invoice Prenda Law? 2 about Alpha Law Firm. 3 4 And when I say you, I'm asking MR. GIBBS: Objection. Outside the scope of the noticed topics. 5 THE WITNESS: I should clarify. I'm not 6 speaking on behalf of AF Holdings right now. 7 speaking on behalf of myself. 8 we would ask Prenda for reimbursement and they would 9 provide the reimbursement. 10 11 12 I'm just Typically, it would be -- BY MR. PIETZ: Q. How would you ask for reimbursements is my more specific question? 13 A. Generally would we ask the bookkeeper. 14 Q. Who is the bookkeeper? 15 A. Someone by the first name of Cathy. 16 Q. Do you know Cathy's last name? 17 A. I don't. 18 Q. Where is she located? 19 A. She's located in Las Vegas, Nevada. 20 Q. When you would ask her, how would you ask her? 21 Is it an e-mail? 22 23 MR. GIBBS: Objection. Outside the notice of deposition topics. 24 25 Is it an invoice? THE WITNESS: You're asking me to recall basic bookkeeping transactions that happened a year ago. California Deposition Reporters I Page: 99 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 101 of 291 Page ID #:1402 1 would have to review my records to figure out the exact 2 method of reimbursement requests. 3 BY MR. PIETZ: 4 Q. In any event, let me ask a slightly different 5 question because my interest is not so much in how Alpha 6 Law Firm is reimbursed for litigation expenses. 7 my interest is what happens to AF Holdings' settlement 8 proceeds after they're paid by John Doe defendant. 9 for the cases that Alpha Law Firm has settled for AF Rather So 10 Holdings, where the money was paid to Prenda Law, not 11 Alpha Law, what happened to that money? 12 sitting in Prenda Law's trust account? 13 14 MR. GIBBS: Objection. Is it still Compound question. Outside the notice of deposition topics. 15 THE WITNESS: Well, the money that was 16 deposited into Prenda's trust account would either be 17 used to pay for litigation expenses or still be there. 18 BY MR. PIETZ: 19 20 21 22 23 24 Q. Are you not sure where your client's settlement proceeds are or what's happened to it? A. Are you asking me as AF Holdings corporate representative or me personally? Q. I'm asking you personally and on behalf of the Alpha Law Firm. 25 California Deposition Reporters MR. GIBBS: So this is something -- objection. Page: 100 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 102 of 291 Page ID #:1403 1 Outside the notice of deposition. 2 3 MR. PIETZ: I'm going to ask it the other way next, but you can go ahead and answer. 4 THE WITNESS: I'm aware that the proceeds are 5 deposited into the Prenda Law trust account. 6 BY MR. PIETZ: 7 8 9 Q. And where do the proceeds go from there, what happens to them? A. I would give the same answer again, which is 10 they are either used to -- now, speaking from AF 11 Holdings' prospective, they would be used to either pay 12 for litigation expenses or they would be used or the 13 proceeds would remain in trust. 14 Q. Do you have an obligation to make sure that 15 your client, AF Holdings, receives settlement proceeds, 16 don't you have an ethical obligation to do that as an 17 attorney? 18 A. Are you asking me as an attorney? 19 Q. I'm asking you as attorney for Alpha Law Firm. 20 21 MR. GIBBS: deposition. 22 Objection. Outside the notice of Also assuming facts not in evidence. THE WITNESS: Well, I can say as an attorney I 23 have no concern over how the proceeds are handled. 24 BY MR. PIETZ: 25 Q. California Deposition Reporters So how does AF Holdings get the money from the Page: 101 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 103 of 291 Page ID #:1404 1 Alpha Law Firm, AF Holdings cases? 2 3 MR. GIBBS: Objection. 4 Objection. Misstates testimony. Outside the notice of deposition topics. THE WITNESS: Once again, when there's a 5 settlement in an AF Holdings case, where Alpha Law Firm 6 is the law firm of record, the settlement proceeds are 7 deposited into the trust account at Prenda Law. 8 BY MR. PIETZ: 9 10 Q. Holdings agreeing to this procedure? 11 12 Do you have written consent from anyone at AF MR. GIBBS: Objection. Outside the notice of deposition topics. 13 MR. PIETZ: 14 THE WITNESS: Go ahead and answer. I guess I would have to review 15 my records of correspondence with AF Holdings. 16 BY MR. PIETZ: 17 18 19 Q. Did you ever discuss this arrangement with Mr. Lutz? A. 20 I would have to review my records. MR. GIBBS: 21 Outside the notice of deposition topics. 22 Objection. BY MR. PIETZ: 23 Q. Well, let me ask this now in your capacity, 24 not as the attorney for Alpha Law Firm, but in your 25 capacity as the corporate representative for AF California Deposition Reporters Page: 102 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 104 of 291 Page ID #:1405 1 Holdings. 2 settlement proceeds collected by one law firm to be 3 deposited into a trust account for an entirely different 4 law firm? 5 Has AF Holdings ever agreed to allow MR. GIBBS: Objection. 6 deposition. 7 Outside the notice of something as if it is a fact. Objection. 8 MR. PIETZ: 9 THE WITNESS: 10 Go ahead and answer, please. Could you please restate the question? 11 12 You're basically stating MR. PIETZ: Madam court reporter, could you read that one back? 13 (Record read as requested.) 14 MR. GIBBS: 15 Vague and ambiguous. Outside the notice of deposition topics. 16 17 Objection. THE WITNESS: Yes. BY MR. PIETZ: 18 Q. Please elaborate. 19 A. Is that a question? 20 Q. Can you elaborate? 21 A. Would you please ask me a specific question. 22 Q. How has AF Holdings provided consent to the 23 24 25 procedure that we just described? A. I would have to review documents and records of AF Holdings regarding consent. California Deposition Reporters Page: 103 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 105 of 291 Page ID #:1406 1 2 Q. But you haven't done that in preparation for this lawsuit today? 3 4 MR. GIBBS: Objection. Outside the notice of deposition topics. 5 THE WITNESS: My review of documents in 6 preparation for the noticed topics did not include a 7 review of consent or whatever you referred to in terms 8 of different lines of authority. 9 BY MR. PIETZ: 10 Q. So as the corporate representative for AF 11 Holdings, the corporation -- I should say limited 12 liability company -- has no concern whatsoever with the 13 fact that settlement proceeds payable on an Alpha Law 14 case are paid into the Prenda Law Firm's trust account? 15 As far as AF Holdings is concerned, one is just as good 16 as the other? 17 18 MR. GIBBS: Objection. 19 20 Misstates testimony. Outside the notice of deposition topics. THE WITNESS: I can't speak to AF Holdings' arbitrary concerns. 21 22 Objection. EXAMINATION BY MR. RANALLO Q. Let me ask you this. You said AF Holdings. 23 BitTorrent settlement proceeds are 100 percent directed 24 towards cost or future litigation; is that true? 25 A. California Deposition Reporters No. I think what I said was that the proceeds Page: 104 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 106 of 291 Page ID #:1407 1 of AF Holding/BitTorrent settlements are to cover -- 2 well, to cover litigation expenses or to cover future 3 litigation expenses. 4 5 Q. 8 9 So does AF Holdings anticipate filing lawsuits forever? 6 7 Okay. MR. GIBBS: Objection. Calls for speculation. BY MR. RANALLO: Q. Does AF Holdings anticipate filing further lawsuits past today? 10 A. Yes. 11 Q. Does AF Holdings plan on spending 100 percent 12 13 of the money in trust on future lawsuits or past costs? A. Well, AF Holdings plans on spending money on 14 lawsuits to the extent that this epidemic scale of 15 piracy continues. 16 Q. So let's say that, you know, for whatever 17 reason the piracy problems go away and this money is 18 left in attorney/client trust accounts, how does AF 19 Holdings get that money? 20 MR. GIBBS: Objection. 21 Based on an assumption. 22 Calls for speculation. BY MR. RANALLO: 23 Q. I mean, come on. Does AF Holdings have any authority to force 24 these attorneys to give them money, the money that 25 belongs to them from their settlement proceeds? California Deposition Reporters Page: 105 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 107 of 291 Page ID #:1408 1 MR. GIBBS: 2 Objection. 3 Objection. Calls for speculation. deposition. 4 Outside the noticed topics for the 5 6 THE WITNESS: Yes. BY MR. RANALLO: Q. 7 And where would those proceeds go? MR. GIBBS: 8 Objection. 9 Objection. Calls for speculation. this deposition. 10 Outside the deposition topics noticed for THE WITNESS: I can say that it hasn't yet, so 11 I would not be prepared to speculate where the money 12 would go in that event. 13 14 FURTHER EXAMINATION BY MR. PIETZ Q. Mr. Hansmeier, just to clarify. When you say 15 it hasn't happened yet, does that mean there has never 16 been a distribution out of money held in trust for AF 17 Holdings by its various attorneys, that has gone to 18 anything other than the litigation expense; is that 19 correct? 20 THE WITNESS: Yes, that's correct. The 21 purpose of the litigation isn't to generate money for AF 22 Holdings. 23 a deterrent effect in stealing its copyrighted works. 24 BY MR. PIETZ: 25 Q. California Deposition Reporters The purpose of the litigation is to generate So not a single penny of settlement proceeds Page: 106 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 108 of 291 Page ID #:1409 1 paid into a trust account for AF Holdings various 2 attorneys has ever been transferred to the attorneys who 3 are working on those case? 4 MR. GIBBS: Objection. 5 Objection. 6 the notice of deposition topics. 7 THE WITNESS: Misstates testimony. 8 9 Calls for speculation. Objection. Outside Can you say the question again. BY MR. PIETZ: Q. I think you said that the purpose of the 10 litigation is not to make money. 11 the value of AF Holdings' copyrights. It's just to increase 12 A. Correct. 13 Q. I believe you testified that the money is 14 simply deposited into trusts for the attorneys who 15 represent AF Holdings where it remains until it is 16 expended on litigation-related expenses; is that 17 correct? 18 MR. GIBBS: 19 THE WITNESS: Objection. Misstates testimony. I didn't follow everything you 20 said, but the general point that the money has not been 21 distributed to AF Holdings is correct. 22 BY MR. PIETZ: 23 Q. So what about distributions to AF Holdings' 24 attorneys. 25 litigation-related expense, in your view, does that California Deposition Reporters When we were talking about Page: 107 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 109 of 291 Page ID #:1410 1 include expenses paid to AF Holdings' attorneys for the 2 work that they have done on AF Holdings cases? 3 A. Yes. 4 Q. So how much money has AF Holdings paid to its 5 attorneys in connection with the copyrighted work that's 6 at issue in this lawsuit? 7 8 MR. GIBBS: Objection. Outside the notice of deposition topics. 9 MR. PIETZ: I disagree. 10 MR. GIBBS: Objection. Calls for speculation. 11 You're asking for a specific amount of money, you know, 12 down to the cent, so you're asking him to guess? 13 MR. PIETZ: 14 MR. RANALLO: 15 No. We're ask him to testify about No. 10, pretty much exactly what it says. 16 THE WITNESS: Well, as I'm sure you can 17 appreciate, the attorneys don't track this information 18 with respect to a particular work. 19 respect to litigation, because -- and so No. 10 asks for 20 copyright litigation related to the work, which I trust 21 refers back to the work "Popular Demand" and that number 22 is not determinable. 23 BY MR. PIETZ: 24 25 Q. They do it with Let me move on to a slightly different topic. The money that AF Holdings pays to its attorneys for California Deposition Reporters Page: 108 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 110 of 291 Page ID #:1411 1 work they've done on AF Holdings' litigation, how is 2 that accounted for? 3 hourly? 4 Please explain how that works. Is there an invoice? Is it a contingent fee? 5 A. 6 Is it billed Is it a flat fee? attorneys -- 7 8 The compensation arrangements with respect to MR. GIBBS: Objection. Is this one of the noticed topics? 9 MR. PIETZ: It is. 10 MR. GIBBS: Which number. 11 MR. PIETZ: Ten among other. 13 MR. GIBBS: I disagree. 14 the noticed deposition topics. 15 MR. PIETZ: 16 THE WITNESS: 12 Go ahead and answer. Objection. Outside Duly noted. So with respect to the 17 distributions to various attorneys with respect to the 18 work "Popular Demand". 19 you know, the accounting is done or how bookkeeping is 20 done. 21 BY MR. PIETZ: 22 Q. Again, it's just now how the, I believe you're answering my second to last 23 question. 24 the payments from AF Holdings' trust accounts to AF 25 Holdings' various attorneys accounted for? California Deposition Reporters What I asked you more recently was, how are Is it Page: 109 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 111 of 291 Page ID #:1412 1 through invoices? Is it a contingent fee arrangements? 2 Is it a flat fee? I'm asking how the payments that are 3 transferred made from AF Holdings' trust accounts to the 4 attorneys who run that trust account, how is that 5 accounted for? 6 MR. GIBBS: 7 THE WITNESS: Objection. Compound question. Are you asking for a bookkeeping 8 answer or are you asking for -- 9 BY MR. PIETZ: 10 Q. Let's take it one step at a time. The 11 attorneys who do work for AF Holdings, do they charge AF 12 Holdings on an hourly basis? 13 say do work. 14 copyright litigation. 15 16 And let me clarify when I I mean, with respect to AF Holdings' MR. GIBBS: Objection. Not part of the noticed deposition topics. 17 THE WITNESS: I'm trying to refresh my 18 recollection as much as possible. 19 is outside the scope of the noticed topics, but I'll do 20 my best to give some information in this area. 21 I do think that this My understanding is that on behalf of the 22 company, to the extent that I was able to tangentially 23 review these topics, is that most attorneys are paid or 24 compensated on a contingency fee basis. 25 BY MR. PIETZ: California Deposition Reporters Page: 110 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 112 of 291 Page ID #:1413 1 Q. And what is the contingency fee basis? 2 A. Well, a contingency fee basis is where they 3 4 receive a percentage of a settlement. Q. 5 What's the percentage? 6 MR. GIBBS: Objection. Outside the notice of deposition topics. 7 THE WITNESS: 8 percentages. 9 I couldn't tell you the precise BY MR. PIETZ: 10 Q. 11 Can you give me a range? MR. GIBBS: Objection. Calls for speculation. 12 Objection. 13 You don't want him to speculate, correct? 14 15 Outside the notice of deposition topics. MR. PIETZ: I would like to him to answer the question. 16 THE WITNESS: 17 recollection. 18 I'm trying to refresh my BY MR. PIETZ: 19 Q. Mr. Hansmeier, you are both the corporate 20 representative for AF Holdings and an attorney who 21 represents AF Holdings in copyright litigations matters 22 with respect to your Alpha Law Firm; isn't that correct? 23 A. I'm the corporate representative for AF 24 Holdings with respect to the topics that were noticed up 25 for today's deposition and I'm also an attorney for who California Deposition Reporters Page: 111 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 113 of 291 Page ID #:1414 1 2 AF Holdings on the cases pending in Minnesota, yes. Q. And you're telling me that you're having 3 difficulty recollecting how it is that you were paid for 4 this work. 5 A. No. What I'm telling you is that I'm having 6 difficulty recollecting the range of contingency fee 7 arrangements nationwide among the dozens, if not several 8 dozen, of attorneys who have worked on AF Holdings' 9 matters in the past, in light of the fact that the topic 10 of -- the range of contingency fee payments for AF 11 Holdings' attorneys was not a notice topic, not even 12 very tangentially related to a noticed topic listed for 13 the -- how do you say it -- today's deposition. 14 I can tell you in the matters for Alpha Law 15 Firm, I can testify as to that issue. 16 arrangement was that Alpha Law Firm did not receive 17 compensation or did not receive a contingency fee for 18 those cases. 19 Q. 20 The fee But other attorneys who work for AF Holdings do receive contingent fees; is that correct? 21 A. Yes, that is correct. 22 Q. So is Alpha Law Firm paid on an hourly basis? 23 A. Alpha Law Firm did not receive compensation 24 for its efforts in connection with the Minnesota AF 25 Holdings' cases. California Deposition Reporters Page: 112 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 114 of 291 Page ID #:1415 1 Q. Did Alpha Law Firm take these cases pro bono? 2 A. Alpha Law Firm did not receive compensation 3 for the cases filed on behalf of AF Holdings in 4 Minnesota. 5 Q. No compensation of any kind? 6 A. That's correct. 7 8 9 MR. GIBBS: Objection. Asked and answered. BY MR. PIETZ: Q. Okay. Now, how about speaking in your 10 capacity as the corporate representative for AF Holdings 11 and recognizing that perhaps the relationship between 12 Alpha Law Firm and AF Holdings is different from most of 13 the other relationships between AF Holdings and its 14 attorneys, please explain how the payments from AF 15 Holdings' trust accounts are paid to the attorneys who 16 handle AF Holdings' copyright infringement matters? 17 MR. GIBBS: 18 THE WITNESS: Objection. Compound question. Well, if -- your question 19 includes a premise, which I don't think is correct. 20 BY MR. PIETZ: 21 Q. Let me strike it then. What is the -- what is 22 the range of contingent fee agreements that AF Holdings 23 uses with respect to its attorneys who prosecute 24 copyright infringement matters -- 25 A. California Deposition Reporters So using Alpha Law Firm as a low end, it would Page: 113 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 115 of 291 Page ID #:1416 1 2 be zero. Q. Okay. I'm not asking about Alpha Law Firm, 3 because you said it's different and it hasn't received 4 any money. 5 6 7 8 A. I didn't say it's different. I said Alpha Law Firm is not compensated for its work with AF Holdings. Q. Is that true of the other law firms that represent AF Holdings, none of them receive any money? 9 MR. GIBBS: 10 Objection. THE WITNESS: Calls for speculation. Again, you're asking me to 11 estimate or speculate with respect to matters that 12 weren't noticed up for the deposition. 13 I would say that the range -- based on my best 14 recollection of this matter, I would say the range is 15 generally -- or the amount of compensation for attorneys 16 on an a contingency fee basis is generally in the range 17 of 33 -- or in the ballpark of 33 percent. 18 BY MR. PIETZ: 19 Q. That being said, If Paul Duffy settles a case on behalf of AF 20 Holdings through the Anti-Piracy Law Group, what 21 percentage of the proceeds is Paul Duffy entitled to? 22 23 MR. GIBBS: deposition topics. 24 25 Objection. Objection. THE WITNESS: Out the notice of Speculation. I can't -- I don't know what precise percentage Paul Duffy is paid. California Deposition Reporters Page: 114 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 116 of 291 Page ID #:1417 1 2 BY MR. PIETZ: Q. 3 4 Can you give me a ballpark? MR. GIBBS: Objection -- BY MR. PIETZ: 5 Q. Can you give me an estimate? 6 A. I can speculate that's it's in the ballpark of 7 8 a third. Q. 9 It's not higher than a third? MR. GIBBS: Objection. He just said it was 10 within the ballpark, which means higher or lower. 11 BY MR. PIETZ: 12 13 14 15 16 17 18 Q. Let me clarify. Is it possible that Mr. Duffy is paid a contingent fee higher than 33 1/3 percent? A. Again, you're asking me to speculate. Anything is possible. Q. I'm asking you to answer on behalf of AF Holdings. A. I'm answering on behalf of AF Holdings that 19 you asked is it possible, of course, AF Holdings -- when 20 you ask about -- when you couch questions in terms of 21 possibilities, yes, it's possible. 22 23 Q. Does AF Holdings have a written fee agreement with Paul Duffy of the Alpha Law Firm? 24 MR. GIBBS: 25 the noticed deposition topics. California Deposition Reporters Objection. Outside the scope of Page: 115 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 117 of 291 Page ID #:1418 1 THE WITNESS: Again, that's outside the scope 2 of the notice of deposition topics, so I did not review 3 the various fee agreements. 4 BY MR. PIETZ: 5 Q. Is it your testimony that AF Holdings is not 6 sure if it has a fee agreement with its attorney, Paul 7 Duffy? 8 MR. GIBBS: 9 THE WITNESS: Objection. Misstates testimony. It's my testimony that the fee 10 agreements with respect to the various attorneys 11 representing AF Holdings was not incorporated directly 12 or tangentially to the noticed topics. 13 Q. I disagree with that assertion, but I'll ask 14 you one final time. 15 I'm asking AF Holdings now. 16 agreement between AF Holdings and Paul Duffy? I don't mean to belabor the point. 17 MR. GIBBS: 18 THE WITNESS: 19 Objection. I guess I would incorporate the answer I previously gave to the exact question. 20 21 Is there a written fee MR. PIETZ: Move to strike the deponent's last two answers as nonresponsive. 22 Let me read one more thing. One of the notice 23 topics today was -- we were -- we put you on notice that 24 we wanted to inquire into the, quote, the identities of 25 the recipients, unquote, of AF Holdings' revenues from California Deposition Reporters Page: 116 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 118 of 291 Page ID #:1419 1 BitTorrent copyright litigation. 2 A. Related to the work. 3 Q. -- related to the work in question. Wouldn't 4 you agree that Mr. Duffy, with a contingent fee interest 5 in the outcome of the litigation would qualify as a 6 recipient of the proceeds from BitTorrent copyright 7 litigation? 8 A. Sure and we have identified him. 9 Q. But what you can't do is clarify the exact 10 basis upon which the revenue is paid. 11 something in the ballpark of a third, but you aren't 12 certain -- 13 MR. GIBBS: Objection. 14 testimony and objection. 15 So it may be Misstates prior deposition topics -- 16 THE REPORTER: 17 THE WITNESS: 18 Please hold on. Could you please restate the question? 19 Outside the notice of the BY MR. PIETZ: 20 21 Q. Let me start over. How about this case. Does AF Holdings have a written contingent fee agreement? 22 MR. GIBBS: 23 Outside of the notice deposition topics. 24 Objection. BY MR. PIETZ: 25 Q. California Deposition Reporters Go ahead and answer. Page: 117 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 119 of 291 Page ID #:1420 1 THE WITNESS: Well, this case hasn't generated 2 any revenues yet so it didn't specifically occur to me 3 to review arrangements with the attorneys in cases that 4 haven't generated any revenue. 5 Q. So in other AF Holdings' copyright litigations 6 cases where Mr. Gibbs has obtained settlements for AF 7 Holdings, wouldn't you agree that Mr. Gibbs is an 8 ultimate recipient of AF Holdings' settlement proceeds 9 by virtue of a contingent fee arrangement? 10 11 12 MR. GIBBS: deposition topics. Objection. A. Outside the notice of This is a constant theme here. Wouldn't I agree to what? 13 (Record read as requested.) 14 MR. GIBBS: Objection. To the extent that 15 we're not even talking about the same case here, right? 16 Do you have any cases in mind we're talking about here 17 or just generally? 18 19 20 MR. PIETZ: I'm sure I can come up with some. I would like the deponent to answer the question. A. So the question is if Mr. Gibbs received 21 proceeds from a settlement, would he be -- would he be 22 an ultimate recipient of the proceeds? 23 Q. My question more simply states, wouldn't you 24 agree that Mr. Gibbs is a recipient of AF Holdings' 25 settlement proceeds? California Deposition Reporters Page: 118 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 120 of 291 Page ID #:1421 1 MR. GIBBS: Objection. Out the notice of 2 deposition topics and you're also asking him for a 3 definition here that he doesn't necessarily have. 4 BY MR. PIETZ: 5 Q. Go ahead and answer. 6 A. I guess I'm pretty confused by the question. 7 8 It would depend on how Mr. Gibbs is compensated. Q. 9 How is Mr. Gibbs compensated? MR. GIBBS: 10 Outside the notice of deposition topics. 11 Objection. BY MR. PIETZ: 12 Q. In this case if Mr. Gibbs were to obtain a 13 settlement from the defendant, what contingent fee 14 percentage would he be given? 15 MR. GIBBS: Objection. 16 deposition topics. 17 Outside the notice of that aren't in the topics here. 18 19 Again we're going over the themes MR. RANALLO: your position. 20 Mr. Gibbs, we're aware that's Our position is that -- MR. GIBBS: We're belaboring something here 21 that is really just becoming an annoyance and we're 22 asking the same sorts of questions. 23 what he studied, you understand that, to come to this 24 deposition that's a requirement of the 30(b)(6)6. 25 California Deposition Reporters MR. PIETZ: This structure is Mr. Gibbs, we don't have to get Page: 119 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 121 of 291 Page ID #:1422 1 into a bunch of a colloquy on the record. 2 about it afterwards. 3 deponent to simply answer the question. 4 We can talk THE WITNESS: What I'd like right now is for the Well, to the noticed topic of 5 would Mr. Gibbs be someone who would receive 6 revenue if a settlement was reached in this case, I 7 believe the answer is yes. 8 BY MR. PIETZ: 9 10 Q. And what percentage of the revenue would Mr. Gibbs keep? 11 A. I can't answer that question specifically. 12 Q. I am going to note -- I'm going to object to 13 the last answer as nonresponsive. 14 reporter, would you also be so kind to note this part of 15 the transcript so that we can refer to it later 16 17 ** Madam court MR. GIBBS: What do we have in terms of what's MR. PIETZ: It's going to be a full-day left. 18 19 deposition. 20 Should we come back at 1:45 o'clock? 21 24 25 I say we break for lunch. (Off the record at 12:48 p.m. and back 22 23 It's 12:45 now. on the record at 1:52 p.m.) BY MR. PIETZ: Q. Back on the record in the 30(b)(6) deposition of AF Holdings. California Deposition Reporters Mr. Hansmeier, I will refer you to the Page: 120 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 122 of 291 Page ID #:1423 1 deposition notice that accompanied the subpoena bringing 2 you here today. 3 Attached thereto as Exhibit A is a copyright assignment 4 agreement. 5 copyright assignment agreement. 6 right, can you read me what it says there on the 7 signature line, please? 8 9 A. I believe it's marked as Exhibit 100. Could you turn to the second page of the There on the bottom It says Alan Cooper on behalf of assignee, AF Holdings, LLC. 10 Q. Who is Alan Cooper? 11 A. Alan Cooper is an individual who was 12 designated as a corporate representative of AF Holdings, 13 LLC. 14 designation as a corporate representative to acknowledge 15 the copyright assignment agreement on behalf of AF 16 Holdings, LLC, is that Mark Lutz -- we're backing up a 17 little bit. 18 representatives, the reason for that is that obviously 19 you guys know that there's a lot of people out there who 20 don't like what we're doing, specifically to people who 21 have infringed on works and want to retaliate against 22 people who are enforcing copyrights. The circumstances that led to Mr. Cooper's 23 AF Holdings makes use of corporate Now, some people who infringe on works aren't 24 of a very serious, morally corrupt manner, but some of 25 them are people who are, you know, quite nefarious and California Deposition Reporters Page: 121 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 123 of 291 Page ID #:1424 1 who are quite capable of committing quite a bit of harm. 2 AF Holdings makes use of corporate 3 representatives to help prevent the -- I guess the 4 officer, Mark Lutz, himself, from being targeted by 5 these individuals. 6 designated as a corporate representative was Marks Lutz 7 asked attorney John Steele to arrange for a corporate 8 representative to acknowledge the assignment agreement 9 on behalf of AF Holdings. The manner in which Mr. Cooper was Mr. Steele did so and 10 returned the assignment agreement to AF Holdings bearing 11 the signature of Mr. Alan Cooper. 12 When this whole -- I guess the first time we 13 heard about any form of controversy with respect to -- 14 the first time AF Holdings heard about any form 15 controversy with respect to the assignment agreement was 16 when an attorney named Paul Godfread, G-O-D-F-R-E-A-D, 17 contacted AF Holdings and said that -- I can't remember 18 the exact text of the e-mail, but something to the 19 effect of he's representing someone named Alan Cooper 20 and they're concerned that Alan Cooper is being held out 21 as AF Holdings CEO. 22 And so when that occurred, we -- or AF 23 Holdings and Mark Lutz specifically, he asked, you know, 24 what is the exposure of AF Holdings here and there were 25 two specific concerns. California Deposition Reporters One specific concern was the Page: 122 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 124 of 291 Page ID #:1425 1 issue of fraud. 2 distributing agreements that have someone's signature on 3 it, but he didn't sign it or somehow his identity was 4 coopted, then obviously that's something that AF 5 Holdings would have to -- once it became aware of that 6 issue -- stop doing -- shut it down and make sure it 7 didn't happen anymore, because obviously there's no 8 reason to distribute an assignment or any agreement 9 bearing someone's signature if there was a forgery or 10 Namely, that if AF Holdings is some sort of fraudulent action involved in that sense. 11 And so to address that issue AF Holdings -- 12 well, spoke to Mr. Steele -- Mark Lutz spoke to 13 Mr. Steele and said, Well, I understand that there's an 14 issue with this Alan Cooper and asked Mr. Steele 15 point-blank, Is the signature a forgery. 16 said the signature is not forgery. 17 the -- is this signature authentic. 18 yes, the signature is authentic. 19 representation, we have no reason to believe from what 20 Mr. Steele said, at least, that the signature is a 21 forgery or there's some sort fraud going on with respect 22 to the signature. 23 Mr. Steele And he asked him, Is Mr. Steele says, Based on Mr. Steele's Then AF Holdings reached out to Paul Godfread 24 and said what, you know, evidence do you have of some 25 form of fraud or forgery or anything else. California Deposition Reporters Paul Page: 123 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 125 of 291 Page ID #:1426 1 Godfread did not -- was not responsive. 2 Mr. Steele further reached out to Paul Godfread and said 3 what can AF Holdings do to give your client the 4 assurances that we're not holding him out as somehow 5 being the CEO of AF Holdings. 6 was nonresponsive. 7 representations that everything is authentic and Paul 8 Godfread's -- well, I guess, failure to give any 9 information regarding his client, plus this letter that 10 he filed that simply says that his client is being held 11 out as the CEO of AF Holdings, we concluded that at 12 least at this time there's not any evidence to support 13 some sort of concern of fraud or some sort of concern of 14 a forged or inauthentic signature. 15 can't speak to Mr. Cooper directly because he's, of 16 course, represented by attorney Paul Godfread. 17 We further -- And again Paul Godfread And so based on Mr. Steele's And, of course, we You know the second concern that was raised by 18 Mr. Godfread's inquiry was the issue of standing. 19 Namely, that if the worst case scenario played out and 20 the signature was inauthentic, would that somehow affect 21 our standing to proceed forward with cases. 22 our, I mean AF Holdings. 23 things. 24 act itself, which says, of course, that the formal 25 requirements for a valid standing -- or a valid When I say We looked at two different The first thing we looked at was the copyright California Deposition Reporters Page: 124 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 126 of 291 Page ID #:1427 1 assignment agreement are a written document, one, and 2 then that it's signed by the assignor. 3 ourselves close comfort with respect to the issue of 4 standing, we contacted the assignor, because obviously 5 the assignor -- Alan Cooper would be signing on behalf 6 of the assignee, of course. 7 assignor Raymond Rogers and asked him, you know, there's 8 this concern about Alan Cooper and who is Alan Cooper 9 and is his signature authentic or is his signature not So to give And so we contacted the 10 authentic, but can you confirm for us that you, in fact, 11 did sign this and you believe that the assignment is 12 effective and as far as you're concerned AF Holdings is 13 the owner of the copyright in question, in both this 14 case and of course the other copyright that Raymond 15 Rogers was involved in assigning to AF Holdings. 16 did confirm that. 17 agreement is authentic. 18 My signature is not forged. 19 end. 20 And he He said, yes, I do believe that this I entered into it voluntarily. Everything is fine from our And so that gave us comfort. We also reviewed 21 Ninth Circuit case law, specifically the case of -- 22 Cohen is in the title where the Ninth Circuit reviewing, 23 you know, section 204 of the Copyright Act concluded 24 that, Well, as long as you have a writing and it's 25 signed by the assignor, you have standing. California Deposition Reporters Page: 125 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 127 of 291 Page ID #:1428 1 And then I guess the next action AF Holdings 2 is planning on taking to remove any doubt that the 3 assignment was and continues to be effective as between 4 AF Holdings and Heartbreaker, I guess, vice versa, is 5 they're preparing a ratification of the agreement, so 6 that without any Alan Cooper whatsoever that both the 7 Heartbreaker entities and then AF Holdings will confirm 8 that the assignment is intended to be effective through 9 the ratification. 10 Q. Thank you for that very thorough answer. 11 Although you're jumping ahead a little bit to some 12 issues that I'm sure will come up eventually. 13 like to come back to the more simple issue though of 14 just identifying who is this Alan Cooper that signed on 15 here. 16 same Alan Cooper who's represented by attorney Paul 17 Godfread? 18 I would Is the Alan Cooper whose signature on here the A. Well, first of all, I don't know who attorney 19 Godfread represents and who he doesn't represent. 20 you're talking about the guy who's in Minnesota and was 21 John Steele's former caretaker, all I can say is that AF 22 Holdings -- the only person who knows who this Alan 23 Cooper is is John Steele and we asked Mr. Steele, is 24 this the same guy, is this not the same guy, is there 25 another Alan Cooper and Mr. Steele declined to respond California Deposition Reporters If Page: 126 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 128 of 291 Page ID #:1429 1 on the basis that Mr. Cooper has sued Mr. Steele and 2 they're actively involved in litigation. 3 Q. I believe you testified today throughout the 4 entire duration of AF Holdings duration -- AF Holdings 5 existence the only employee member, officer manager, the 6 person wearing all the hats and the only person who has 7 ever had any official capacity with AF Holdings is Mark 8 Lutz; isn't that correct? 9 10 11 12 A. I testified that Mr. Lutz is the sole manager/employee of AF holdings, correct. Q. And there's no other manager or employees right through to this present day; is that correct? 13 A. That's correct. 14 Q. Mr. Lutz has been the only one. So this begs 15 the question was John Steele ever an owner, manager or 16 employee of AF Holdings? 17 A. No. 18 Q. So why then did AF Holdings rely upon John 19 20 21 22 Steele to sign documents on AF Holdings' behalf? A. What document are you referring to that he signed on AF Holdings' behalf? Q. Let me rephrase. Why is AF Holdings relying 23 on John Steele to arrange for signatures on documents 24 that are being signed on AF Holdings' behalf? 25 California Deposition Reporters MR. GIBBS: Objection. Calls for speculation. Page: 127 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 129 of 291 Page ID #:1430 1 THE WITNESS: Well, it would be speculation as 2 to why AF Holdings took one action or another. 3 say that, for example, you know, Mr. Lutz is an 4 individual. 5 and for him to accomplish everything he's going to 6 accomplish in any given day, or for anyone in any 7 capacity in any business, you rely on third parties to 8 aid you to accomplish various tasks. 9 I would There are a certain number hours in a day For example, the -- Mr. Lutz relied on me 10 personally to arrange for the signature of Raymond 11 Rogers. 12 needed me to help him out in that task. 13 And the reason he did that was because he Q. So am I to understand correctly then that with 14 respect that AF Holdings litigation, you and Mr. Steele 15 are both taking orders from Mr. Lutz; is that correct? 16 MR. GIBBS: 17 Misstates the prior testimony. 18 Objection. BY MR. PIETZ: 19 Q. He's your client, so on the issues -- 20 A. Mr. Lutz or AF Holdings? 21 Q. Mr. Lutz is the client representative of AF 22 Holdings, so you, in your capacity as an attorney, and 23 Mr. Steele in his capacity as an attorney, are doing 24 what Mr. Lutz tells you to do; is that correct? 25 California Deposition Reporters MR. GIBBS: Objection. Misstates testimony. Page: 128 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 130 of 291 Page ID #:1431 1 I just don't like the characterization. 2 want to do. 3 BY MR. PIETZ: Do whatever you 4 Q. Go ahead. 5 A. I am not sure what you mean by we do what he 6 7 8 tells me to do. Q. If Mr. Lutz says settle a case, you as counsel for the Alpha Law Firm, settle the case. 9 A. Yes. 10 Q. If Mr. Lutz says arrange to have this document 11 signed, you arrange to have the document signed; is that 12 correct? 13 A. It depends on what document. 14 Q. Well, for example, this copyright assignment 15 agreement that we're looking at as Exhibit A. 16 told you to arrange to have it signed by Raymond Rogers 17 and you did that because Mr. Lutz is essentially the 18 client and your boss and you do what he tells you to do, 19 correct? 20 21 MR. GIBBS: Objection. Mr. Lutz Compound question. BY MR. PIETZ: 22 Q. Can you explain why that is not correct? 23 A. Well, Mr. Lutz is not my client. AF Holdings 24 is the client of Alpha Law Firm in certain matters. 25 When Mr. Lutz asked me to help facilitate that signature California Deposition Reporters Page: 129 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 131 of 291 Page ID #:1432 1 as a logistical matter, I don't recall having -- you 2 know, acting in the capacity of an attorney. 3 assisting him facilitate it. I was just 4 Q. Did you ever work for Prenda Law, Inc.? 5 A. No. 6 Q. You were never attorney of record with Prenda 7 8 9 Law, Inc.? A. You were never of counsel there? I guess I'd have to go back over the various appearances that I filed. I don't recall anything 10 specifically. 11 record somewhere, I can't say with exact certainty. 12 13 Q. Was Mr. Lutz employed as a paralegal at Steele Hansmeier? 14 15 Does that mean that there's not one on MR. GIBBS: Objection. It's outside the scope of the deposition noticed topics. 16 THE WITNESS: Mr. Lutz was for a time employed 17 with Steele Hansmeier, yes. 18 don't recall. 19 BY MR. PIETZ: 20 21 22 Q. What his exact title was, I While he was employed at Steele Hansmeier you were his boss, correct? A. I would not agree with that characterization. 23 The reason I wouldn't agree with that characterization 24 is because he worked directly under Mr. Steele. 25 Q. California Deposition Reporters So Mr. Steele was Mr. Lutz's boss at Steele Page: 130 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 132 of 291 Page ID #:1433 1 2 3 4 5 Hansmeier; is that correct? A. Yes. Mr. Lutz reported to Mr. Steele in his capacity of working for Steele Hansmeier. Q. And what did Mr. Lutz do for Mr. Steele at Steele Hansmeier? 6 MR. GIBBS: 7 THE WITNESS: Objection. Calls for speculation. I would -- you'd have to ask 8 Mr. Steele what specific duties Mr. Lutz performed. 9 BY MR. PIETZ: 10 Q. Let me ask this question. I'm asking for your 11 personal knowledge, not the knowledge of AF Holdings. 12 You were the other named partner on the masthead. 13 kind of tasks did Mr. Lutz perform at your law firm? What 14 A. 15 for me. 16 Q. What kind of tasks did he perform? 17 A. Again, you'd have to ask what kind of tasks 18 19 20 21 22 23 Mr. Lutz did not perform any tasks directly He performed tasks for Mr. Steele. Mr. Lutz performed for Mr. Steele. Q. Would it be fair to characterize them as paralegal-level tasks? A. I don't know if you could characterize them or not because first you'd have to identify what they are. Q. And you have absolutely no idea what Mr. Lutz 24 did for Mr. Steele while working at your law firm; is 25 that correct? California Deposition Reporters Page: 131 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 133 of 291 Page ID #:1434 1 2 3 A. me. Yes. Mr. Lutz did not perform any tasks for He performed tasks for Mr. Steele. Q. And you're not sure if it was paralegal work 4 or secretarial work or you have no idea what kind of 5 work it was Mr. Lutz did for Mr. Steele; is that 6 correct? 7 MR. GIBBS: 8 THE WITNESS: Misstates testimony. Calls for speculation. 9 Objection. It would be correct to say that 10 Mr. Lutz worked for Mr. Steele. 11 tasks for Mr. Steele and reported to Mr. Steele. 12 not delegate any work to Mr. Lutz, so I could not tell 13 you what he was doing on a day-to-day basis. 14 BY MR. PIETZ: He worked performing 15 Q. Did you ever sign Mr. Lutzs' paychecks? 16 A. I did No. 17 18 MR. PIETZ: record Exhibit 103. 19 (Whereupon Defendants' Exhibit No. 103 20 21 22 I would like to mark into the was marked for identification.) BY MR. PIETZ: Q. So having now marked 103, which is a Motion 23 for Withdrawal and Substitution of Counsel filed in the 24 Northern District, California case 4221, ECF No. 22. 25 Mr. Hansmeier, I'll ask you to turn to the California Deposition Reporters Page: 132 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 134 of 291 Page ID #:1435 1 second page of this document. 2 says on the bottom signature line there, who signed and 3 in what capacity. Can you read me what it 4 A. There's three signature on the bottom. 5 Q. The very bottom one on the left? 6 A. Brent Gibbs, in-house counsel, AF Holdings, Q. I believe you testified a moment ago that 7 LLC. 8 9 throughout the entire duration of AF Holdings, the only 10 employee or officer -- the person wearing all of the 11 hats was Mark Lutz. 12 A. Uh-huh. 13 Q. Based on this document that appears to be 14 incorrect because isn't Mr. Gibbs now in-house counsel 15 for AF Holdings? 16 17 18 19 20 A. here. No. I think it's -- I don't know why it's I don't think it's -Q. So Mr. Gibbs is not in-house counsel for AF Holdings? A. 21 That's correct. MR. PIETZ: 22 ask you, Mr. Gibbs. 23 Well, shoot. I'm just going to document? 24 25 MR. GIBBS: Did you prepare and sign this It's not my deposition. I'm not quite sure why I would be answering questions. California Deposition Reporters Page: 133 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 135 of 291 Page ID #:1436 1 MR. PIETZ: Well, there's an E-file document 2 here with your signature on it that says you're in-house 3 for AF Holdings. 4 as a courtesy to clarify for the record. I thought I'd give you the opportunity 5 MR. GIBBS: Okay. 6 MR. PIETZ: You're not going to address it? 7 MR. GIBBS: I don't think I need to address 8 it. 9 BY MR. PIETZ: 10 11 Q. Is there anybody else who currently has the position of in-house counsel for AF Holdings? 12 A. No. 13 Q. Who are the current employees of the Alpha Law 14 Firm? 15 A. 16 Current employees of the Alpha Law Firm -MR. GIBBS: 17 Outside the notice of deposition. 18 Objection. BY MR. PIETZ: 19 20 Q. behalf of AF Holdings. 21 22 A. 25 Alpha Law Firm doesn't have any employees. I'm the manager. 23 24 Speaking from your personal knowledge, not on Q. What licensed attorneys do work for Alpha Law Firm? A. California Deposition Reporters I do work for Alpha Law Firm. Page: 134 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 136 of 291 Page ID #:1437 1 Q. What other attorneys? 2 A. If you want me to give you a list of any 3 attorney in history who have done work at Alpha Law 4 Firm, I'd have to go back and review my records. 5 6 7 8 9 10 11 12 13 14 15 16 Q. How about Michael Dugas, does he do work for Alpha Law Firm? A. I believe he has performed work for Alpha Law Firm, but again I'd had to check my records. Q. How about his wife, has she also performed work for the Alpha Law Firm? A. I do not believe so, but again I'd have to go back and check my records. Q. Did Michael Dugas previously work at the Prenda Law Firm? A. I would have to go review the employment records of the Prenda Law Firm. 17 Q. Didn't you hire Mr. Dugas? 18 A. For who? 19 Q. For Alpha Law Firm. 20 A. He's performed work on behalf of Alpha Law 21 22 Firm, but he's not a paid employee of Alpha Law Firm. Q. So when you engaged him to perform work for 23 Alpha Law Firm, did you review a resume and note that he 24 previously worked for Prenda Law Firm? 25 A. California Deposition Reporters I can't recall reviewing his resume. Page: 135 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 137 of 291 Page ID #:1438 1 2 3 4 Q. Were you aware when you hired him, that he had worked previously at the Prenda Law Firm? A. I don't recall hiring him and I don't recall reviewing his resume. 5 MR. GIBBS: 6 Outside the notice of deposition topics. 7 Objection. BY MR. PIETZ: 8 9 Q. So returning now to your capacity as corporate representative for AF Holdings. To clarify, AF Holdings 10 position is that John Steele was responsible for 11 obtaining Alan Cooper's signature and whether or not the 12 signature is authentic is a question that only 13 Mr. Steele and presumably Mr. Cooper can answer and that 14 AF Holdings -- 15 A. That is not our position. The position is 16 that whether or not -- the position is that 17 Mr. Steele's -- the position of AF Holdings, I guess, is 18 not so far off of what you're saying. 19 Mr. Steele arranged for the signature and that it's a 20 matter of open debate between Mr. Cooper and Mr. Steele 21 and any other third party regarding the signature and I 22 trust that the matter will be addressed in due course 23 with the litigation between Mr. Cooper and Mr. Steele. 24 25 Q. It's that Other than the gentleman in Minnesota who is represented by Attorney Godfread has AF Holdings ever California Deposition Reporters Page: 136 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 138 of 291 Page ID #:1439 1 engaged or has employed any other Alan Cooper? 2 3 A. AF Holdings has had one employee/manager since its formation and that's Mark Lutz. 4 FURTHER EXAMINATION BY MR. RANALLO 5 Q. You mentioned that AF Holdings oftentimes gets 6 corporate representatives, you called them, to do 7 various things on behalf of the company; is that true? 8 9 A. I don't know if I used the word oftentimes but from time to time AF Holdings has done so, yes. 10 Q. Are those people paid? 11 A. No. 12 Q. And why would somebody be a corporate 13 representative totally gratuitously for no compensation 14 and do something like this? 15 16 MR. GIBBS: Objection. Calls for speculation. BY MR. RANALLO: 17 Q. Let me ask you this. You said you have been 18 corporate representative for them, why did you do it for 19 free? 20 21 22 23 24 25 A. When did I say I was a corporate representative for them? Q. I believe you said that you were engaged to acquire the signature on this document; is that correct? A. No, I didn't say I was engaged to -- in a legal capacity to acquire the signature for them. California Deposition Reporters Page: 137 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 139 of 291 Page ID #:1440 1 Q. So he just asked you as a friend? 2 A. I would characterize it in that circumstance 3 as asking for a favor, which I was happy to help him out 4 with. 5 Q. And do you generally do these kind of favors 6 for companies that you're not associated with in any 7 capacity? 8 9 A. kind of favors. 10 11 I guess I don't know what you mean by these Q. Have you ever acquired any other signatures for any other company? 12 A. In my entire time in being a lawyer? 13 Q. Yes. 14 A. I suspect I have. Could I identify any 15 specific instances as I sit here right now, I'm trying 16 to refresh my recollection. 17 now. 18 favors for other people, do I assist them without 19 demanding compensation for every last task or whatever 20 else I might aid them in as a courtesy, sure I 21 perform -- I help people out. Not as I sit here right If you ask as a general principal, do I perform 22 Q. 23 entail? 24 A. I contacted Mr. Rogers and -- 25 Q. Let me stop you for a minute. California Deposition Reporters In this case what did acquiring the signature How did you Page: 138 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 140 of 291 Page ID #:1441 1 contact him? 2 A. 3 This is quite a while ago. recollection I would have contacted him by phone. 4 MR. RANALLO: 5 6 7 8 To the best of my Okay. FURTHER EXAMINATION BY MR. PIETZ Q. How many copyright infringement lawsuits has AF Holdings filed since it's been established? A. I could not give you an exact number sitting 9 here right now, but certainly that's a matter of public 10 record that could be easily ascertained by reference to 11 the public record. 12 Q. Would you say it's over 50 lawsuits? 13 A. I would guess so, yes. 14 Q. How many attorneys has AF Holdings engaged as 15 16 counsel in these various cases? A. Again, that's something outside the scope of 17 the noticed topics, but it is a matter of public record 18 of how many attorneys we have retained over the course 19 of our corporate existence, but I couldn't give you a 20 precise number. 21 22 23 24 25 Q. Would you say it's approximately 20 attorneys, maybe more? A. I'm just trying to think through all the various attorneys that -Q. California Deposition Reporters My intent here isn't to pin you down to a Page: 139 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 141 of 291 Page ID #:1442 1 2 specific number. A. Sure. Your best estimate as to range. But I want to be able to give you an 3 accurate estimate so I have to think through all of the 4 different attorneys at AF Holdings. 5 Q. Could you think out loud for me? 6 A. No. 7 Q. You can or you won't? 8 MR. GIBBS: 9 THE WITNESS: He doesn't need to. I guess your ballpark estimate 10 of 20 doesn't seem too far off the mark based on my gut 11 reaction. 12 BY MR. PIETZ: 13 Q. At least 50 cases, at least 20 attorneys and 14 presumably every single one of these attorneys is taking 15 instruction from Mark Lutz; is that correct? 16 A. I don't know. 17 Q. I'm asking now as the corporate representative 18 for AF Holdings. 19 which you very well know, that need to be made by a 20 client. 21 litigation, is it your testimony that perhaps 20 22 lawyers, in perhaps 50 different civil litigations, are 23 all taking their marching orders from Mark Lutz; is that 24 correct? There are decisions in a lawsuit, With respect to this fairly sizeable volume of 25 California Deposition Reporters MR. GIBBS: Objection. Misstates testimony. Page: 140 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 142 of 291 Page ID #:1443 1 Objection. 2 It's not in the deposition noticed topics. THE WITNESS: Well, I guess I can say that 3 what I learned during the process of investigating the 4 topics that were noticed for today and that is Mark Lutz 5 is the sole -- the manager, the person with the decision 6 for litigation decisions at AF Holdings and whether he 7 speaks directly or indirectly with the attorneys around 8 the nation who have filed lawsuits against the 9 infringers of AF Holdings' copyrighted works, it would 10 naturally fall that, yes, directly or indirectly that 11 the marching orders come from Mark Lutz. 12 Q. Is Mark Lutz an attorney? 13 A. He's not an attorney. 14 Q. Has ever been an attorney? 15 A. Not that I'm aware of. 16 Q. How did Mark Lutz come to be the sole manager, 17 officer, what have you of AF Holdings? 18 MR. GIBBS: 19 deposition topics. 20 covered possibly. 21 Objection. Outside the notice of I think this has already been Objection. THE WITNESS: Asked and answered. He became the sole manager of AF 22 Holdings when AF Holdings was formed and he was 23 appointed to that role. 24 MR. RANALLO: Who was he given that role by? 25 THE WITNESS: It would have been the person I California Deposition Reporters Page: 141 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 143 of 291 Page ID #:1444 1 referenced, Aisha Sargeant. 2 BY MR. PIETZ: 3 4 Q. So Ms. Sergeant was the one who designated Mr. Lutz as the manager of AF Holdings; is that correct. 5 A. I believe so, yes. 6 Q. Was Ms. Sergeant following anyone's 7 8 9 10 11 instructions when she did that? A. I can only speculate at this point, but I believe she would have been following Mr. Lutz's instructions. Q. So let me get this straight. Mr. Lutz worked 12 at your law firm performing paralegal level tasks for 13 John Steele and now when AF Holdings was formed, all of 14 a sudden, he's the sole manager of an enterprise 15 overseeing dozen of cases and at least 20 lawyers in 16 various jurisdictions around the country. 17 seem a little bit odd to you? 18 MR. GIBBS: 19 THE WITNESS: Objection. Does that Argumentative. I don't think there's an 20 accurate factual statement in what you said. 21 BY MR. PIETZ: 22 Q. So returning to these corporate 23 representatives. 24 representatives other than Alan Cooper, Mark Lutz for AF 25 Holdings? California Deposition Reporters Have there been any other corporate Page: 142 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 144 of 291 Page ID #:1445 1 2 A. I can think one of other corporate representative. 3 Q. And who is that? 4 A. And that would Anthony Saltmarsh. 5 Q. Where does Mr. Saltmarsh reside? 6 A. I don't know where Mr. Saltmarsh resides. 7 Q. Was Mr. Saltmarsh ever compensated for acting 8 as a corporate representative for AF Holdings? 9 A. Not that I'm aware of. 10 Q. Exhibit 101 and 102. Those are both the ADRs 11 that are signed by Salt Marsh. I believe you testified 12 you thought that that might be of the name the trust 13 that owns AF Holdings. 14 Anthony Saltmarsh? 15 A. Could that be a misspelling of The only thing I can say about these documents 16 is that if you wanted me to come prepared to testify 17 about them, you may have included them as exhibits to 18 the notice or supplement the notice with the documents. 19 You're asking me is it possible that Salt Marsh as 20 spelled on here is a misspelling of the name Anthony 21 Saltmarsh? 22 23 24 25 Q. Perhaps an alias would be a better word for A. Or an alias for Salt Marsh. it. I'm a bit skeptical of that theory because it says AF Holdings California Deposition Reporters Page: 143 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 145 of 291 Page ID #:1446 1 owner and Anthony Saltmarsh is not an owner of AF 2 Holdings. 3 Q. Is there a corporate representative who has 4 worked for AF Holdings before by the name of Anthony 5 Saltmarsh? 6 A. No. 7 Q. Where did I go wrong? 8 A. Working for AF Holdings. 9 To the extent that implies employment or a managerial capacity. 10 Q. When did you first meet John Steele? 11 A. I personally first meet John Steele in law 12 school. 13 Q. Approximately what year? 14 A. 2005. 15 Q. Were you in the same class? 16 A. Are you referring to the graduating year? 17 Q. Yes. 18 A. Yes. 19 Q. 2005 when you both started law school? 20 A. I believe so, yes. 21 Q. Have you ever met John Steele's sister Jamie? 22 A. He has two sisters. 23 24 25 I've met one of them. I don't remember if her name is Jamie. Q. Are you aware that John Steele's sister Jamie Steele lives -- has shared residence with Anthony California Deposition Reporters Page: 144 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 146 of 291 Page ID #:1447 1 Saltmarsh? 2 3 4 5 6 A. I do not know not who she's lived with in the past. Q. Was Mr. Steele responsible for procuring the signature on Exhibits 101 and 102? A. I did not have occasion to ask Mr. Steele 7 about these exhibits. 8 be prepared to be discussed. 9 10 Q. They weren't noticed up for me to Do you have any idea who did procure that signature that says Salt Marsh? 11 A. No. 12 Q. But to be very clear Anthony Saltmarsh is not 13 the owner of AF Holdings, correct? 14 A. That's correct. 15 Q. And he's never, in fact, been compensated by 16 AF Holdings, has never been an employee, member or a 17 manager. 18 name has been signed as corporate representative of AF 19 Holdings; is that correct? His only connection is that apparently his 20 A. No. 21 Q. Where did I go wrong? 22 A. Could you repeat the question? 23 Q. Strike that. It's not correct. We'll do it one at a time. 24 Anthony Saltmarsh has never been a member of AF 25 Holdings? California Deposition Reporters Page: 145 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 147 of 291 Page ID #:1448 1 A. He is -- that's correct. 2 Q. Never been a manager? 3 A. That's correct. 4 Q. Never been a shareholder or a person with a 5 pecuniary interest in AF Holdings? 6 A. That's correct. 7 Q. And never been an employee or an agent of AF 8 9 Holdings? A. Well, to the extent of how you define agent, I 10 believe he's served in a corporate representative 11 capacity for AF Holdings in the past. 12 13 14 15 16 Q. And in so doing who was it that deputized him as an agent of AF Holdings? A. Are you referring to a corporate representative? Q. Right. In other words, who is it that decided 17 that Anthony Saltmarsh would be a corporate 18 representative of AF Holdings? 19 20 21 A. I am not familiar with who deputized him to be a corporate representative. Q. I'm asking you now as the corporate 22 representative AF Holdings yourself. 23 testimony of AF Holdings that it doesn't know how it is 24 that Anthony Saltmarsh was designated as a corporate 25 representative? California Deposition Reporters Is it the Page: 146 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 148 of 291 Page ID #:1449 1 A. I believe the circumstances were in the -- in 2 connection with the formation of AF Holdings there are 3 various tasks that had to be performed and he acted as a 4 corporate representative in that connection. 5 estimate is that Aisha Sargeant would have deputized him 6 in -- as a corporate representative around that time. 7 Q. My How about Alan Cooper, who decided that Alan 8 Cooper was authorized as a corporate representative of 9 AF Holdings? 10 A. Mark Lutz asked John Steele to find someone 11 who would be willing to serve in the capacity as a 12 corporate representative and so Mark Lutz made the 13 decision. 14 15 FURTHER EXAMINATION BY MR. RANALLO Q. Let's go ahead and take a look at paragraph 16 two of the assignment agreement that's attached as 17 Exhibit A. 18 says under representations and warranties. 19 is, The work in the intellectual property rights 20 protecting them are free and clear of all encumbrances, 21 including without limitation, security interests, 22 licenses, liens, charges or other restrictions. 23 a true statement? 24 25 A. I'm specifically looking at 2C and 2D. So C One of them Is that So are you asking me in the capacity of AF Holdings' corporate representative? California Deposition Reporters Page: 147 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 149 of 291 Page ID #:1450 1 Q. Yes. 2 A. The company certainly hopes it's true. That's 3 a representation that was made by the assignor to the 4 copyright assignment agreement and we have no reason to 5 believe it's not true. 6 Q. Are you -- is AF Holdings aware of any 7 preexisting grants of rights from Heartbreaker 8 Productions to any company whatsoever? 9 A. No. Again, Heartbreaker made a representation 10 warranty that the -- it's free and clear of all 11 encumbrances and we've never had any reason to doubt 12 that statement. 13 14 Q. Do you know who represented Heartbreaker Productions in negotiating this agreement? 15 A. No. 16 Q. Do you know who represented AF Holdings in 17 18 negotiating this agreement? A. 19 20 21 No. FURTHER EXAMINATION BY MR. PIETZ Q. Didn't you say that you obtained the signature for the assignor on this agreement, though? 22 A. Yes. 23 Q. So you were involved in the negotiations of 24 25 this agreement yourself, correct? A. California Deposition Reporters Well, you're aware that obtaining a signature Page: 148 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 150 of 291 Page ID #:1451 1 2 is not the same of negotiating a document? Q. Well, you just testified that you don't know 3 who negotiated the agreement, so what was your role in 4 all of this? 5 signature? 6 7 8 9 10 A. Why were you tasked with finding the Are you asking me to speculate why Mr. Lutz asked me to procure the signature for him? Q. I'm asking based on your personal knowledge how did you become involved in the negotiation of this assignment agreement? 11 MR. GIBBS: 12 THE WITNESS: Objection. Asked and answered. I guess I'm not sure why you 13 continue using the verb negotiation. 14 using the verb negotiation. 15 favor of arranging for Mr. Rogers signature. 16 BY MR. PIETZ: 17 Q. You're the one I said I did Mark Lutz the When you arranged for his signature that was 18 it, I just I need your signature on this, pointed to the 19 dotted line and he gave it to you and that was that? 20 A. Yes. 21 Q. You had no substantive discussions whatsoever 22 with the representative of Heartbreaker Productions who 23 signed this agreement? 24 25 A. That's correct. I didn't negotiate terms or do anything along those lines. California Deposition Reporters Page: 149 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 151 of 291 Page ID #:1452 1 Q. And corporate 30(b)(6) testimony of AF 2 Holdings is that it's not sure who negotiated this 3 agreement? 4 A. Well, I think before you asked me and maybe if 5 I misheard you, I misunderstood and I would correct my 6 testimony, that this would have been discussed between 7 Mr. Lutz and Mr. Rogers. 8 9 10 Q. Did Steele Hansmeier ever represent Heartbreaker Productions? A. I believe we may have represented them in a 11 case -- I guess I'd have to check my records. 12 recall if we represented them or not. 13 14 Q. But you think Steele Hansmeier may have represented Heartbreaker Productions? 15 MR. GIBBS: 16 THE WITNESS: 17 I don't Objection. Calls for speculation. I'd have to refresh my records about -- 18 MR. PIETZ: I'll mark for the record 19 Exhibit 104. 20 to you refer to it. 21 Dismissal Without Prejudice of Remaining Doe Defendants 22 in Illinois, Northern District, No. 11-cv-2860-ECF23. 23 I'm going to turn to page two, hand this to the deponent 24 and ask him whether this refreshes his recollection. 25 California Deposition Reporters I've only got this one copy, but I'll ask I have here Plaintiff's Notice of (Whereupon Defendants' Exhibit No. 104 Page: 150 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 152 of 291 Page ID #:1453 1 was marked for identification.) 2 THE WITNESS: So this is Heartbreaker 3 Productions, Inc. 4 did represent Heartbreaker Productions, Inc. 5 BY MR. PIETZ: 6 Q. So it appears that Steele Hansmeier So if I understand correctly, the important 7 agreement that would become the foundation for numerous 8 lawsuits when it was being negotiated was tasked to Mark 9 Lutz, John Steele's former paralegal at your old law 10 firm and Mr. Lutz negotiated the whole thing and you had 11 nothing do with it; is that correct? 12 MR. GIBBS: 13 THE WITNESS: 14 Objection. Misstates testimony. There's substantial shortcomings in here. 15 MR. GIBBS: Also it's a compound question. 16 Assumes facts not in the record. 17 THE WITNESS: I would say no that's not 18 correct. 19 of your question were incorrect. 20 21 22 Several of the facts you stated in the course FURTHER EXAMINATION BY MR. RANALLO Q. So Mark Lutz negotiated this agreement on behalf of AF Holdings; is that correct? 23 MR. GIBBS: 24 THE WITNESS: 25 Objection. Mark Lutz would have been -- yeah, I believe that's correct. California Deposition Reporters Asked and answered. Mark Lutz was the lead Page: 151 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 153 of 291 Page ID #:1454 1 on securing the agreement from Heartbreaker Digital, 2 LLC. 3 BY MR. RANALLO: 4 5 Q. Is that also true of the assignment for Sexual Obsessions, another AF Holdings film? 6 A. You would have to ask Mr. Lutz. 7 Q. Okay. 8 Let me ask you this. Who did Mark Lutz negotiate with? 9 A. I would -- well, Heartbreaker Digital, LLC. 10 Q. And who on behalf of Heartbreaker? 11 A. I would suspect it was Raymond Rogers. 12 Q. Personally and not an attorney? 13 A. I do not believe Heartbreaker Digital, LLC had 14 15 an attorney in its negotiations. Q. And is that also true for the Sexual 16 Obsessions agreement, did -- let me rephrase. 17 Steele Hansmeier represent Heartbreaker Productions in 18 the negotiation for that assignment? 19 A. Did I don't have the assignment agreement in front 20 of me. 21 the assignor in that agreement. 22 I don't even know if Heartbreaker Productions is Q. We'll get that one for you shortly. To the 23 extent that Steele Hansmeier represented Heartbreaker 24 Productions and you're a former partner at Steele 25 Hansmeier, do you have any personal knowledge of Steele California Deposition Reporters Page: 152 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 154 of 291 Page ID #:1455 1 Hansmeier representing Heartbreaker Productions on that 2 side of this negotiation against Mark Lutz, the 3 paralegal, at Steele Hansmeier on the other side. 4 A. You continually call Mark Lutz a paralegal. I 5 don't think I've testify that Mark Lutz is a paralegal. 6 You continually use Heartbreaker Productions, but the 7 assignor here is Heartbreaker Digital, LLC versus 8 Heartbreaker Productions, Inc. 9 important to be precise when we're speaking about legal And I think it's very 10 entities and roles and so forth and so on to get these 11 right. 12 accurate and more precise identities of parties, because 13 right now I'd have to say no that's not correct to 14 everything you say because everything you're premising 15 your question on is incorrect. 16 So if you want to restate the question with more Q. Let's get back to this assignment agreement. 17 It's your understanding that there are no third parties 18 with any right to distribute this work; is that true? 19 20 21 22 A. about? Which assignment agreement are we talking Are we talking about Sexual Obsession or -- Q. you have in front of you. 23 24 We're talking about the one in this case that MR. PIETZ: Referring now to Exhibit A to the deposition notice. 25 California Deposition Reporters THE WITNESS: So this is with respect to Page: 153 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 155 of 291 Page ID #:1456 1 Popular Demand. 2 AF Holdings is the sole copyright owner of Popular 3 Demand. 4 BY MR. RANALLO: 5 6 7 Q. The work title Popular Demand. Yes. And no other entities have the right to distribute this movie; is that correct? A. Right. AF Holdings is the sole owner of all 8 of the rights associated with it, including rights of 9 reproduction and distribution and everything else 10 associated with it. 11 Q. And is this film distributed in any way? 12 A. Well, certainly by the infringers. It was 13 distributed I believe before we received the assignment 14 to it. 15 16 17 I don't think it's distributed now currently. Q. It's not distributed in any manner currently. Is that your testimony? A. Well, I can give you -- the testimony is that 18 we're not aware of any form of distribution that has 19 taken place with respect to the work, except, of course, 20 with respect to BitTorrent-based infringement, which is 21 occurring across the world and -- 22 Q. Is it AF Holdings' position that if I wanted 23 to purchase this film legitimately would there be any 24 method for doing so? 25 A. California Deposition Reporters I suspect that before we received the Page: 154 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 156 of 291 Page ID #:1457 1 assignment to it that it was being distributed, so there 2 may be sites out there where you could buy it now. 3 certainly could buy it on the secondary market, because 4 I think there's a principle under copyrights where if 5 you buy it once then you can -- the first-sale doctrine. 6 And but frankly from AF Holdings' perspective the cost 7 of doing a proper marketing campaign and doing a proper 8 distribution campaign and the time and the effort and 9 the capital investment required and everything along You 10 those lines, simply isn't worth it because virtually no 11 one buys these DVDs, everyone just steals them. 12 13 FURTHER EXAMINATION BY MR. PIETZ Q. I would like to clarify one thing about the 14 assignment that we're referring to right now, Exhibit A, 15 on the deposition notice. 16 Holdings is that John Steele played absolutely no role 17 whatsoever in this agreement as an attorney and that the 18 only role that Mr. Steele played in the execution of 19 this agreement was in obtaining a signature from Alan 20 Cooper; is that correct? The corporate testimony of AF 21 A. Yes. 22 Q. So Mr. Steele was not representing 23 Heartbreaker Digital, LLC or AF Holdings when this deal 24 was negotiated; is that correct? 25 A. California Deposition Reporters Yes, that's correct. Mr. Steele was not an Page: 155 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 157 of 291 Page ID #:1458 1 attorney representing either party in the negotiation of 2 this agreement. 3 4 5 6 FURTHER EXAMINATION BY MR. RANALLO Q. Is AF Holdings aware whether this film is available through gamelink.com? A. We are not aware of whether it's available 7 through gamelink.com. 8 guess? What is GameLink first of all, I 9 Q. It's a video distribution service. 10 A. I'm not familiar with gamelink.com. 11 Q. But it is your testimony that AF Holdings has 12 not licensed anyone to distribute this work 13 legitimately? 14 15 16 A. There's no license agreement beyond this agreement right here (indicating). Q. Those two pages are 100 percent of the 17 agreement between Heartbreaker Productions and AF 18 Holdings regarding this work? 19 A. Yes. 20 Q. Is it AF Holdings' position that this film is 21 not available for commercial purchase; is that true? 22 23 MR. PIETZ: Before we get too far afield, let's go ahead and mark this as the next exhibit. 24 25 California Deposition Reporters (Whereupon Defendants' Exhibit No. 105 was marked for identification.) Page: 156 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 158 of 291 Page ID #:1459 1 2 MR. RANALLO: as 106. 3 (Whereupon Defendants' Exhibit No. 106 4 5 6 Let's go ahead and mark this one was marked for identification.) BY MR. RANALLO: Q. This is an article from -- let's see, AVN 7 discussing the distribution of the Popular Demand. 8 Could you read the highlighted section for me? 9 A. Nina Mercedez performs the first double 10 penetration scene of her career in the new Heartbreaker 11 films movie, Nina Mercedez Popular Demand, that will be 12 available July 27th from Exile Distribution. 13 Q. So after reading that, do you believe that 14 Heartbreaker Productions has licensed other people to 15 distribute this work? 16 A. 17 Productions. 18 Q. I can't speak on behalf of Heartbreaker After reading that, and as a corporate 19 representative of AF Holdings that told me that AF 20 Holdings has all the rights to distribute this work and 21 no one else has any rights to distribute this work. 22 Would you agree that the exhibit I just showed you tends 23 to contradict that? 24 25 A. Well, I know from reading the blog sites that you two participate in that I shouldn't believe California Deposition Reporters Page: 157 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 159 of 291 Page ID #:1460 1 everything I read on the Internet. 2 3 4 MR. PIETZ: That's nonresponsive. BY MR. RANALLO: Q. Do you have any reason to believe that Exile 5 Distribution has a right to distribute this work, the 6 work that forms the basis of this suit? 7 A. I'll keep on referring back to this assignment 8 agreement. 9 this copyrighted work. 10 Q. This is the only agreement with respect to That exists in the world? You're saying that 11 Heartbreaker Productions does not have an assignment 12 agreement with Exile Distribution? 13 14 15 16 17 A. I don't know the agreements that Heartbreaker Productions has with Exile. Q. As far as AF Holdings knows, no one has the right to distribute this legally; is that correct? A. No, that's not correct. I already told you 18 before that under the first-sale doctrine, for example, 19 someone could distribute their copy of it. 20 21 22 Q. Discounting the first-sale doctrine, discounting secondary market. A. That would be it. This is the only agreement 23 with respect to reproducing and distributing copyrighted 24 work at the heart of the agreement (indicating). 25 Q. California Deposition Reporters In preparing for this deposition did you Page: 158 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 160 of 291 Page ID #:1461 1 investigate whether Heartbreaker Productions had 2 licensed this work to any third parties? 3 A. Well, in preparing for this deposition I think 4 one of the noticed topics was -- I'll read it 5 specifically. 6 from AF Holdings to any nonparties. 7 any. 8 aware of with respect to the reproduction and 9 distribution of copyrighted work. 10 All licenses and assignment agreements And there aren't This is the only agreement that AF Holdings is Q. So even after you read that article that I 11 just handed you that's Exhibit 105, is it still AF 12 Holdings' position that those are the only agreements 13 that they are aware of? 14 A. That article doesn't mean anything to me. 15 There's been nothing registered with the copyright 16 office. 17 challenges to the assignment agreement and the 18 assignment agreement contains a representation of 19 warranty that this is the only -- that is being conveyed 20 full right, title and interest and we've had nothing 21 to -- nothing formal. 22 there or news articles saying one thing. 23 investigate the facts and circumstances of that further. 24 25 There's no -- how do you say it -- no Q. I mean, we've got some blog sites We'd have to Do you intend to examine those facts and circumstances, investigate those facts and circumstances California Deposition Reporters Page: 159 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 161 of 291 Page ID #:1462 1 2 3 now that they have been brought to your attention? A. Do I personally intend to do that or does AF Holdings? 4 Q. AF Holdings? 5 A. I assume AF Holdings will examine the facts 6 and circumstances in those articles and see if they have 7 any factual basis. 8 9 10 Q. In preparation for this deposition did you ever look online or anywhere else to see if a copy of this movie could be obtained legitimately? 11 A. 12 topics. 13 determine whether or not there were any other -- whether 14 he had somehow I guess -- I don't know what the phrase 15 would be -- sublicensed or granted a nonexclusive 16 license or conveyed any sort of rights to any other 17 third party that was in the description of topics that 18 was noticed and I looked at the copyright office and 19 this is the only agreement that's on record with respect 20 to this copyrighted work. No, because that wasn't one of the noticed What I did do was inquire of Mr. Lutz to 21 No one else as far as I could find had done 22 any form of filings or whatever else, so it's AF 23 Holdings' position that this is the only agreement that 24 exists. 25 Q. California Deposition Reporters Let me refer to you No. 4 on the subject of Page: 160 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 162 of 291 Page ID #:1463 1 examination, which asks about all license and assignment 2 agreements, and any other grants of rights, however 3 titled, from Heartbreaker Productions to any third 4 parties relating to the work. 5 topic in preparation for this? 6 A. Yeah. Did you investigate that AF Holdings has no records of any form 7 of license or assignment agreements or any other grants 8 of rights from Heartbreaker to any third parties. 9 further there's nothing in the copyright office when I 10 examined the record, which I'm sure you guys have, 11 regarding anyone else who is claiming a right or 12 And interest in this copyrighted work. 13 14 15 16 Q. AF Holdings isn't listed with the copyright office, are they, in relation to this work? A. I'd have to go back and check the office specifically. I believe they are, though. 17 Q. And in what capacity? 18 A. If they were listed with the copyright office, 19 they would be listed as the assignee of the copyright. 20 21 FURTHER EXAMINATION BY MR. PIETZ Q. So it's your testimony that the assignment 22 agreement that is attached as Exhibit A to the 23 deposition notice was filed with the copyright office? 24 25 A. I guess I have no -- I can speak generally about the process of recording the assignment and then California Deposition Reporters Page: 161 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 163 of 291 Page ID #:1464 1 answer your question more specifically from there. 2 my understanding that if you want to record an 3 assignment with the copyright office, there's one of two 4 ways to do it. 5 copyright office, the original assignment agreement. 6 The other way is to have -- there's a form you fill out 7 reflecting the assignment. 8 done in this circumstance. It's One way is to submit the original to the I don't know which one was 9 Q. Are you a shareholder in 6681 Forensics? 10 A. No. 11 Q. Are you familiar with the company? 12 A. Yes. 13 Q. Are you an officer in 6681 Forensics? 14 A. No. 15 Q. Are you an employee of 6681 Forensics? 16 A. No. 17 Q. Have you ever received any kind of 18 compensation of any sort from 6681 Forensics? 19 A. No. 20 Q. Do you maintain an e-mail at 6681 Forensics? 21 A. I do have an e-mail address that has a 6681 22 Forensics domain. 23 Q. And why is that? 24 A. Why do I have an e-mail address with the 6681 25 Forensics domain? California Deposition Reporters Page: 162 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 164 of 291 Page ID #:1465 1 Q. Right. 2 A. The reason I have an e-mail with 6681 3 Forensics domain is that they gave me one when Alpha Law 4 Firm was filing cases in Minnesota and they will 5 transmit certain technical data to my address there. 6 Q. Who is they? 7 A. 6681 Forensics. 8 Q. Who are the shareholders in 6681 Forensics? 9 A. I don't know who the shareholders are in 6681 10 11 12 Forensics. Q. AF Holdings is using 6681 Forensics services, correct? 13 A. Sure. 14 Q. Is John Steele a shareholder of 6681 15 Forensics? 16 MR. GIBBS: 17 THE WITNESS: Objection. Asked and answered. I don't know who the 18 shareholders are in 6681 Forensic. 19 BY MR. PIETZ: 20 21 22 23 Q. How about the officers? Is John Steele an officer of 6681 Forensics? A. I guess AF Holdings does not know who the officers are in 6681 Forensics. 24 Q. Do you personally know? 25 A. I do not know either, personally. California Deposition Reporters Page: 163 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 165 of 291 Page ID #:1466 1 2 Q. Forensics, who corresponds from the 6681 Forensics site? 3 4 When AF Holdings corresponds with 6681 A. I don't believe that 6681 Forensics corresponds directly with AF Holdings. 5 Q. I'm just going to note that that pretty much 6 contradicts what you told me about two minutes ago when 7 you were explaining your AF Holdings -- your 6681 8 Forensics e-mail address. 9 to clarify your answer here? 10 11 MR. GIBBS: Are you sure you don't want I don't believe it does contradict. 12 THE WITNESS: Maybe we should have the 13 reporter read the information back. 14 does at all. 15 BY MR. PIETZ: 16 Q. I don't think it Have you ever -- maybe I'm misunderstanding 17 here. 18 with 6681 Forensics, but AF Holdings doesn't? 19 Are you saying that Alpha Law Firm corresponds A. Well, I think what you're not 20 understanding is -- the source of the confusion is the 21 idea that -- if we're receiving technical reports in the 22 capacity of filing a lawsuit on behalf of AF Holdings, 23 those technical reports aren't necessarily being 24 directed back to AF Holdings, they're being directed 25 straight to counsel of record for use in the litigation. California Deposition Reporters Page: 164 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 166 of 291 Page ID #:1467 1 2 FURTHER EXAMINATION BY MR. RANALLO Q. So the e-mails that you received at 6681 3 Forensics, are those solely -- were those solely in 4 regards to the Minnesota Alpha Law AF Holdings cases? 5 6 A. I believe I received other e-mails at that address. 7 Q. Is that an address that you regularly use? 8 A. I guess I don't understand what you mean by 9 10 regularly. Q. Did you receive e-mails at that e-mail address 11 about any litigation matters that AF Holdings is not 12 involved in? 13 14 MR. GIBBS: Objection. Outside the notice of deposition topics. 15 THE WITNESS: I'd have to go review what 16 e-mails I do and do not receive there. 17 lot of spam at that e-mail address. 18 19 20 21 I know I get a FURTHER EXAMINATION BY MR. PIETZ Q. Have you ever received an e-mail from John Steele using the 6681 Forensics domain name? A. It's entirely possible, but I would have to go 22 review what exact e-mail addresses I've received at that 23 account versus another account and frankly whether 24 there's some forwarding situations set up where it's -- 25 where we're trying to consolidate e-mails in a single California Deposition Reporters Page: 165 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 167 of 291 Page ID #:1468 1 account. 2 3 Q. How about your brother Peter Hansmeier, is he involved in 6681 Forensics? 4 A. Yes. 5 Q. What's his capacity? 6 A. He's a technician for 6681 Forensics. 7 Q. Is he an owner of the company? 8 A. I don't know who the owners of 6681 Forensics Q. Personally speaking now, do you know whether 9 10 are. 11 your brother has an ownership interest in 6681 12 Forensics? 13 A. I do not. 14 Q. Is your brother Peter Hansmeier -- speaking 15 now on behalf of AF Holdings -- is your brother Peter 16 Hansmeier an officer of 6681 Forensics? 17 18 19 20 A. AF Holdings does not know who the officers in 6681 Forensics are. Q. So you're not sure whether your brother is an owner or an officer of 6681 Forensics; is that correct? 21 A. That's correct. 22 Q. You know he works there, but you're not 23 completely sure in what capacity; is that correct? 24 A. No. 25 Q. Where did I go wrong? California Deposition Reporters That's not right. Page: 166 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 168 of 291 Page ID #:1469 1 A. I stated before that he's a technician at 6681 2 Forensics. 3 there but you don't know in what capacity. 4 what capacity. 5 6 Q. It's where you said, you know, he works I do know in I know he's a technician. How many other technicians are employed at 6681 Forensics? 7 A. I don't know. 8 Q. Have you ever received correspondence from any 9 other technicians other than your brother? 10 A. From 6681 Forensics? 11 Q. Correct. 12 A. No. 13 Q. So as far as AF Holdings is concerned the only 14 technicians at 6681 Forensics who have communicated with 15 AF Holdings are -- is your brother Peter Hansmeier? 16 A. Right. But he doesn't communicated with AF 17 Holdings as far as AF Holdings knows. 18 directly with the attorneys in the various matters. 19 Q. He's communicated Which would include yourself in the Alpha Law 20 cases where Alpha Law is representing AF Holdings; is 21 that correct? 22 A. That's correct. 23 Q. Was your brother -- does your brother do work 24 25 for Steele Hansmeier? A. California Deposition Reporters How do you mean? Page: 167 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 169 of 291 Page ID #:1470 1 2 3 4 5 6 7 8 9 Q. Did he perform a similar task at Steele Hansmeier as a technician? A. I don't believe he was ever a technician at Steele Hansmeier. Q. He certainly signed many declarations of cases filed by Steele Hansmeier; is that correct? A. Well, you'd have to show me the declaration that you're speaking of. Q. Well, I'm talking generally speaking now about 10 declarations which were submitted by Steele Hansmeier 11 attorneys in connection, generally, with a request for 12 early discovery wherein Peter Hansmeier, under penalty 13 of perjury, that he had logged various ISP addresses 14 that are supposedly responsible for copyright 15 infringement activities. 16 MR. GIBBS: The issue you're saying is that -- 17 whether he worked for Steele Hansmeier, not that he 18 didn't file these documents. 19 20 MR. PIETZ: and this question is another. 21 22 23 Well, the last question was one MR. GIBBS: Objection. It's compound. BY MR. PIETZ: Q. So in any event. Steele Hansmeier utilized 24 the services of your brother Peter Hansmeier in some 25 capacity, correct? California Deposition Reporters Page: 168 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 170 of 291 Page ID #:1471 1 A. He did -- he was a technician that performed 2 similar services -- 6681 Forensics, I believe he's a 3 technician for 6681 Forensics. 4 Q. But when you were a partner at Steele 5 Hansmeier, was your brother a technician at 6681 6 Forensics or was he with a different company at that 7 time? 8 A. I believe he was with 6681 Forensics. 9 Q. Not the Minnesota Copyright Group? 10 A. That's correct. 11 Q. Has your brother ever worked for or been 12 associated with the Minnesota Copyright Group -- pardon 13 me. Let me rephrase. 14 15 MR. GIBBS: I meant Media Copyright Group. Objection. Outside of the notice of deposition topics. 16 THE WITNESS: I'd have to go back and review 17 my records for declarations and employment history of my 18 brother from almost two years ago now. 19 BY MR. PIETZ: 20 Q. So Steele Hansmeier filed AF Holdings cases 21 including some where your brother signed declarations. 22 I'm asking AF Holdings, who was your brother working for 23 at the time? 24 A. I believe it was 6681 Forensics. 25 Q. How about MCGIP Inc. California Deposition Reporters Has your brother ever Page: 169 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 171 of 291 Page ID #:1472 1 worked for them? 2 MR. GIBBS: 3 THE WITNESS: Outside the scope of the deposition notice. 4 Objection. I don't know if my brother has 5 ever worked for MCGIP Inc. 6 BY MR. PIETZ: 7 Q. Are you familiar with that company? 8 A. No. 9 FURTHER EXAMINATION BY MR. RANALLO 10 Q. Are you aware of the existence of a 11 corporation or an LLC -- pardon me -- named Media 12 Copyright Group that was organized in Minnesota? 13 MR. GIBBS: 14 Outside the notice of deposition topics. 15 Objection. BY MR. RANALLO: 16 Q. Are you aware of the existence of a company 17 called Media Copyright Group, LLC, which was organized 18 in Minnesota? 19 THE WITNESS: 20 MR. GIBBS: 21 Yes. Same objection. BY MR. RANALLO: 22 Q. And did you have any role in that company? 23 MR. GIBBS: 24 THE WITNESS: 25 Same objection. Yes. /// California Deposition Reporters Page: 170 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 172 of 291 Page ID #:1473 1 BY MR. RANALLO: 2 Q. And what was your role? 3 A. I believe I was the organizer of the company. 4 And then in its very earliest inception I was a 5 technician there myself. 6 Q. 7 Were you a member of Media Copyright Group? 8 MR. GIBBS: Again, outside the notice of deposition topics. 9 THE WITNESS: I'm trying to think back to what 10 my formal capacity was with it and I'd have to go review 11 the corporate records and determine whether I was ever 12 formally recognized as a member or manager or whatever 13 the legal capacity. 14 15 16 It's almost two years ago now. FURTHER EXAMINATION BY MR. PIETZ Q. Is Media Copyright Group the same thing as MCGIP, LLC? 17 A. No. 18 Q. Are you familiar with MCGIP, LLC? 19 A. I believe I was the organizer of MCGIP, but 20 21 22 23 I'd have to check my records. Q. companies? And what's the difference between the two A. What do they do? Media Copyright Group performed technical 24 services. 25 technical services. California Deposition Reporters MCGIP I don't believe ever performed Page: 171 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 173 of 291 Page ID #:1474 1 Q. Media Copyright Group performed technical 2 services that were utilized by the Steele Hansmeier law 3 firm; is that right? 4 A. I don't believe so, no. 5 Q. So your employment or involvement -- 6 A. I should clarify that. I do believe that in 7 cases filed by Steele Hansmeier, Media Copyright Group 8 did perform services. 9 I'd have to go back and refresh my recollection as to Again, this almost two years ago. 10 who -- one company performed services for almost two 11 years ago. 12 13 14 15 Q. What are your brother's qualifications as a technical advisor or technical technician? A. You would have to ask my brother what his qualifications are as a technician. 16 Q. Did your brother attend high school? 17 A. He attended high school. 18 Q. Did he graduate? 19 A. Yes. 20 Q. Did he attend college? 21 A. Yes, he attended college. 22 Q. Did he graduate? 23 A. Yes. 24 Q. What kind of degree does your brother have? 25 A. I don't know the specific degree that my California Deposition Reporters Page: 172 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 174 of 291 Page ID #:1475 1 brother got. 2 Q. 3 Was it a Bachelor of Arts or a Bachelor of Science? 4 MR. GIBBS: Objection. 5 the notice of deposition topics. 6 THE WITNESS: This is all outside If you want the education 7 history of my brother, you're going to have either 8 notice the topic up before the deposition or ask him 9 yourself directly. 10 BY MR. PIETZ: 11 Q. Was it related to computers? 12 A. There's only so many ways that I can say that 13 I don't know what exact degree my brother has. 14 Q. It's the word exact that troubles me. 15 A. I don't know what degree my brother has. 16 Q. Was it Liberal Arts? 17 A. I don't know what degree my brother has. 18 19 20 FURTHER EXAMINATION BY MR. RANALLO Q. Let me ask you this. You said that you were previously a technician at Media Copyright Group? 21 A. Yes. 22 Q. What are your technical qualifications? 23 A. My education is I have a high school degree. 24 I have a Bachelor of Arts in Economics and I attended 25 law school. California Deposition Reporters Page: 173 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 175 of 291 Page ID #:1476 1 Q. So you don't have any computer training? 2 A. No. 3 I don't agree with that statement. FURTHER EXAMINATION BY MR. PIETZ 4 Q. What was your computer training? 5 A. I was trained to use the software that was 6 developed for the purpose of catching infringers. 7 Q. Who trained you? 8 A. The software company that produced the 9 software. 10 Q. What were they called? 11 A. I can't recall their exact corporate name. It 12 was something along of the lines of Alena (phonetic) or 13 something like that. 14 15 Q. Where were they -- where was their place of business? 16 A. Their place of business is in Minnesota. 17 Q. Was your brother trained to use the same 18 19 20 21 22 software while at Media Copyright Group? A. I would be speculating, but I suspect he received very similar training to what I received. Q. Did your brother obtain any post graduate college degrees in computers? 23 A. I don't believe so. 24 Q. Has your brother had any kind of formal 25 computer training other than the training that you California Deposition Reporters Page: 174 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 176 of 291 Page ID #:1477 1 received? 2 A. Again, I don't know what classes he took or 3 didn't take in college and I can't speak to his, outside 4 of college, computer training. 5 6 Q. Did Steele Hansmeier ever get your brother qualified as an computer expert in any litigation? 7 A. I'd have to go back and check the relevant 8 records. 9 head. 10 I can't think of anything off the top of my We've had many cases. Q. So the software that was developed by the 11 company -- I think you said was Alena or something 12 similar -- is that the software that Steele Hansmeier 13 used at the beginning when it started filing copyright 14 infringement lawsuits? 15 A. Steele Hansmeier has never used software. 16 Q. How does to Steele Hansmeier record IP 17 addresses that are involved in copyright infringement 18 cases? 19 20 21 22 A. Steele Hansmeier is a law firm. It doesn't do the recording activities. Q. What entity provided the recording activities for Steele Hansmeier in the early cases? 23 A. Well, what do you mean by the early cases? 24 Q. I believe Steele Hansmeier started filing 25 copyright infringement cases on or around the second California Deposition Reporters Page: 175 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 177 of 291 Page ID #:1478 1 half of 2011. 2 Steele Hansmeier obtained IP address information? 3 A. So at the beginning what was the way that So for cases filed after 2011 -- I mean, the 4 general point is that a third-party company provided the 5 IP address to Steele Hansmeier. 6 Q. What was the company? 7 A. It would have been either Media Copyright 8 Group or 6681 Forensics. 9 10 Q. Did Media Copyright Group use the software that you were trained on? 11 A. Yes. 12 Q. Does 6681 Forensics use that same software? 13 A. I do not know. 14 Q. I'm asking now on behalf of AF Holdings, which 15 files lawsuits based on the information gathered by 6681 16 Forensics. 17 doesn't know what software 6681 Forensics uses? 18 19 A. You're asking me if we know what the precise software they're using is? 20 21 Is the testimony of AF Holdings that it MR. GIBBS: Objection. Outside the notice of deposition topics. 22 THE WITNESS: Yeah, I think -- I think it's 23 very possible that they're doing it. 24 specifically testify definitively to that. 25 /// California Deposition Reporters I can't Page: 176 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 178 of 291 Page ID #:1479 1 2 BY MR. PIETZ: Q. Why don't you tell me as much as you can. 3 MR. GIBBS: 4 THE WITNESS: Calls for speculation. Objection. I would just say that the data 5 reports and -- this is me speaking personally through 6 the capacity of Alpha Law Firm -- but the data reports 7 and whatever else we receive are similar to the data 8 reports that were generated by the other software, which 9 leads me to believe that it's likely the same software. 10 11 BY MR. PIETZ: Q. I'm asking in your corporate capacity, if you 12 would. 13 quite sure exactly what the software is that's used? 14 Is the testimony of AF Holdings that it's not A. Well, it would be the testimony of AF Holdings 15 that it's never been sure about any of the software 16 that's been used. 17 something that Mark Lutz would be qualified to analyze 18 or assess or anything else. 19 Q. It's not -- for example, it's not Has there ever been a change in the software, 20 such that you noticed the reports started looking 21 different at one point? 22 A. Personally or on behalf of AF Holdings? 23 Q. Let me rephrase and strike that entirely. 24 25 Has AF Holdings consistently used the same software from 6681 Forensics? California Deposition Reporters Page: 177 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 179 of 291 Page ID #:1480 1 A. You have to be really precise. 2 not using the software. 3 AF Holdings is companies that are using the software. 4 Q. It's the technical service During the time that AF Holdings has engaged 5 6681 Forensics to provide technical services has it 6 always been the same software? 7 A. I guess the only thing I can say is that AF 8 Holdings is not aware of any changes in the software 9 used by 6681 Forensics. 10 Q. What was the software used to record the IP 11 address at issue in the case that brings us here at 12 issue today? 13 14 MR. GIBBS: Objection. Outside the notice of deposition topics. 15 THE WITNESS: Well, it was the software 16 deployed by 6681 Forensics. 17 formal name. 18 BY MR. PIETZ: 19 Q. I'm not sure if it has a So here at the 30(b)(6) deposition of AF 20 Holdings, AF Holdings is still not sure and can't tell 21 Mr. Navasca the name of the software that was used to 22 allegedly record his IP address? 23 A. That's entirely incorrect. The testimony of 24 AF Holdings is that the software that was used to record 25 Mr. Navasca's infringing activities was the software California Deposition Reporters Page: 178 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 180 of 291 Page ID #:1481 1 2 used by 6681 Forensics. Q. But other than the fact that the whole process 3 is outsourced to 6681 Forensics, AF Holdings essentially 4 has no idea how the IP address was recorded; is that 5 correct? 6 MR. GIBBS: 7 THE WITNESS: Objection. Misstates testimony. AF Holdings' knowledge regarding 8 the technical process by which Mr. Navasca infringing 9 activities were recorded, is that 6681 Forensics 10 utilized software identifying Mr. Navasca and then 11 records his IP address as being involved in infringing 12 activities. 13 BY MR. PIETZ: 14 Q. Did you make any inquiries of 6681 Forensics 15 about how the process works in preparation for this 16 deposition here today? 17 18 A. Well, I can speak on a general level about how the process works. 19 Q. That's not the question. 20 A. Which topic are we talking about? 21 Q. Topic 14. Which I'll read for the record. 22 It's actually Topics 13 through 15, but I'll read 14 for 23 the record. 24 which IP addresses and subsequently individuals to sue, 25 including how Joe Navasca was chosen as the defendant in California Deposition Reporters Process by which AF Holdings determined Page: 179 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 181 of 291 Page ID #:1482 1 the instant action. 2 What I'm asking you for, sir, is some detail 3 about that process. 4 Forensics uses some kind of software, but you're not 5 sure what it is. 6 that? 7 A. So far all I've heard is that 6681 Can you provide any detail beyond Could you give me a better idea of what you're 8 talking about detail beyond that. 9 reference to that you're looking for more detail? 10 11 12 Q. What is it in The name of the software would be a terrific start. A. I'm not even sure if the software is even 13 named. 14 I put it? It's not commercial software that's -- or how do 15 Q. 16 looking for? 17 A. Off the shelf. Is that the term you're It's not off the shelf. It's not like 18 Microsoft Windows. 19 name for it. 20 Q. Who developed the software? 21 A. For one that's being used by 6681 Forensics or 22 23 24 25 I don't know if there's a specific the one that's used by Media Copyright Group? Q. The one that was used to identify Mr. Navasca as the defendant in this action. A. California Deposition Reporters I guess you'd have to ask 6681 Forensics who Page: 180 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 182 of 291 Page ID #:1483 1 specifically developed the software, based on what I 2 discussed with you before. 3 be the same company that did the original software for 4 Media Copyright Group. 5 Q. The most logical guess would So which is it, is it custom software designed 6 by 6681 Forensics is it the off-the-shelf software that 7 was designed by the company that provided the software 8 you used? 9 A. Well, I think you're making the incorrect 10 assumption that the original software from Media 11 Copyright Group was off-the-shelf software. 12 sure that's been established. 13 14 15 Q. I'm not So the software that 6681 Forensics uses, is it based on the Alena software? A. Yes. My testimony before was that the data 16 reports and other information are very similar between 17 the two. 18 software would be the same software that was utilized by 19 Media Copyright Group. 20 Q. My best guess would be the 6681 Forensics But AF Holdings isn't actually sure today and 21 can't provide a definitive answer to that question; is 22 that correct? 23 24 25 A. If it's the same software previously used by another company? Q. California Deposition Reporters If the software that was used to identify Page: 181 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 183 of 291 Page ID #:1484 1 Mr. Navasca as a defendant is based on the software 2 produced by Alena, whether it's customized, off the 3 shelf or what have you? 4 MR. GIBBS: Are you asking for his best 5 estimate at this point? 6 BY MR. PIETZ: 7 Q. No. I'm asking for AF Holdings' testimony 8 about what software was used to identify Mr. Navasca as 9 the defendant. 10 A. The difficulty with your question is there's 11 no specific way to identify software. 12 it's these -- how do you -- so if you're asking if it's 13 the same one as the one that was involved by this third 14 party company, I'm saying that AF Holdings' position 15 would be that it is very likely the same software. 16 we definitively determine the software or the version 17 or, you know, any of the other variety of technical 18 differences that would makes some software different in 19 even a slight manner then another piece of software, I 20 can't say I know specifically what version, whatever 21 else. 22 Forensics, I would trust would be in -- how do you say 23 it -- possession of that information, but I think that 24 goes a little bit beyond the scope of what we reasonably 25 could have expected to know. Well, you say Can That information would certainly be -- the 6681 California Deposition Reporters If you wanted me to tell Page: 182 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 184 of 291 Page ID #:1485 1 you what version of the software that was used, it would 2 have been simple to notice that up. 3 I can tell you what the process is by which we 4 would determine what IP address we chose and we have 5 asked 6681 Forensics to really target -- specifically in 6 these 101 case -- some of the more serial infringers, 7 people who are really doing quite a bit of infringement. 8 FURTHER EXAMINATION BY MR. RANALLO 9 Q. Let me ask you this. You said that you target 10 people who -- IP addresses that are doing quite a lot of 11 infringement. 12 IP address at issue in this case downloading other 13 films? Does AF Holdings have any records of the 14 A. 6681 Forensics may have those records. 15 Q. If AF Holdings -- 16 A. I'm in the middle of my answer. 17 If -- You need to let me finish. 18 Q. Go ahead. 19 A. Well, I'd like to state for the record that 20 it's hard to get a full answer out when Attorney Ranallo 21 continues to interrupt me. 22 That's what 6681 Forensics was charged with. 23 I'm trying to refresh my recollection to determine 24 whether Mr. Navasca was seen infringing on other works 25 in this particular action. California Deposition Reporters Page: 183 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 185 of 291 Page ID #:1486 1 I can say this. Based on the instructions 2 that were provided to 6681 Forensics it would be AF 3 Holdings' position that 6681 Forensics did identify 4 Mr. Navasca as being associated -- or the IP associated 5 with Mr. Navasca being associated with other infringing 6 activities. 7 files he was infringing, as I sit here right now, no I 8 cannot. 9 the -- the first goal with getting infringers is to take 10 11 Can I specifically identify which other But I can say that was the -- that would be care of the people who are the worst infringers. Q. So is it AF Holdings' position that 12 individuals who are chosen for individual suits are 13 likely associated with IP addresses that have downloaded 14 large numbers of works. 15 16 MR. GIBBS: testimony. 17 18 19 Objection. Objection. THE WITNESS: Misstates prior Compound question. Can you restate the question? BY MR. RANALLO: Q. Is it AF Holdings' position that when they 20 choose a defendant for these individual suits, they 21 choose individuals who have infringed a large number of 22 works? 23 A. 24 nuance. 25 infringer, so to speak. Well, I think that's -- that lacks a certain There's two different ways to be a serial California Deposition Reporters One is to infringe upon a large Page: 184 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 186 of 291 Page ID #:1487 1 number of works and the other way is to maintain 2 infringing activities for an extended period of time 3 with respect to a given work. 4 there are quite a few sites out there where the -- the 5 people who go on the sites, they're private sites, 6 private BitTorrent sites and they're dedicated to a 7 specific topic, such as -- obviously, there's a lot 8 dedicated specifically to adult content. 9 who go on these sites, they have to maintain a certain Just to use an example, And the people 10 upload to download ratio. 11 means they have to continue making the work available 12 for an extended period of time after they've originally 13 taken it, because then they have to subsequently provide 14 bandwidth liquidity to subsequent people who join the 15 site. 16 And in order to do that, that Someone who could be classified as a serial 17 infringer or someone who has really done a lot of harm 18 to someone is not only someone who has taken down a lot 19 of different works or, you know, downloaded every single 20 file for a given client, for example, downloading a 21 siterip, which is a compilation of all the works 22 associated with a given website or what have you. 23 It could also be someone who is just a -- 24 almost a constant source for access to the file over an 25 extended period of time. California Deposition Reporters Page: 185 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 187 of 291 Page ID #:1488 1 2 THE WITNESS: Before you ask me your next question, I would like to take a bathroom break. 3 MR. PIETZ: 4 (Off the record at 3:21 p.m. and back on 5 6 7 Yeah, no problem. the record at 3:25 p.m.) BY MR. RANALLO: Q. Before the break we were discussing the 8 process by which AF Holdings identifies particular 9 infringers of its copyright. Let's take it a step 10 beyond where we just were. 11 once AF Holdings gets an IP address, how does it 12 determine which particular person is the infringer 13 associated with that IP address? 14 A. Once you get an IP address, I would make the general comment that it's 15 important to distinguish between AF Holdings and its -- 16 shall we say its forensics experts and its attorneys. 17 To a significant degree, AF Holdings delegates these 18 matters to its attorney and to its, you know, technical 19 services company to make these determinations. 20 With respect to the specific question of how 21 it goes from -- shall we say the account holder -- so 22 you get the IP address and then you do the discovery. 23 You get the account holder's name back and then the 24 question is who at the household -- was it the account 25 holder someone else at the household who used the IP California Deposition Reporters Page: 186 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 188 of 291 Page ID #:1489 1 address, which I think is your question, if I understand 2 it correctly, how do you determine who at the household 3 used the IP address. 4 Q. Once 6681 gets an IP address, I want you to go 5 through the whole process and let's start with the 6 subpoena to the IP address. 7 A. So the first thing you do is you file the 8 lawsuit. 9 says this guy has been involved in infringing in You've got an IP address that 6681 Forensics 10 whatever work has been identified in the complaint. 11 file the lawsuit. 12 court, because you can't proceed forward with the case 13 until you figure out who the defendant is. 14 to match an IP address and an identification is through 15 that process and then if the court grants leave to issue 16 the subpoena then you issue the subpoena to the ISP. 17 You You seek early discovery from the The only way I think in this case it was -- I'm not sure 18 what ISP it was. 19 ISP and ship it off to the them and the ISP will then 20 perform a resolution of the IP address to a specific 21 individual and then you get the individual's name back. 22 23 Q. So then you issue the subpoena to the Do you get an individual's name back 100 percent of the time? 24 A. No. 25 Q. And what percentage would you estimate comes California Deposition Reporters Page: 187 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 189 of 291 Page ID #:1490 1 2 3 4 5 6 back not resolved to any name? A. I couldn't possibly begin to estimate. It really varies. Q. Let's try to get a rough idea. Are we talking 1 in 10 or closer to 1 in 100 or closer to 1 in a 1,000. A. I would say 1 in a 1,000 is not correct. 7 too extreme in the scarcity. 8 between 1 and 10 and 1 and 100, that's kind of a 9 It's ballpark estimate. 10 11 12 13 14 15 16 Q. I suspect it would be Some few percentage come back unresolved to anybody, though? A. Somewhere between 1 and 10 percent by that ballpark estimate. Q. What is the reason when they come back empty, so to speak, what is the reason behind that? A. The reason behind that is that -- they really 17 don't give a reason. 18 subscriber information. 19 in the past, because we still have to pay for it, AF 20 Holdings does. 21 can't recall the reason that they give. 22 that there's no information available. 23 Q. They just say could not locate We have asked them about that They say sometimes it's because the -- I They just say Is it fair to say that the ISPs' recordkeeping 24 is not, let's say, 100 percent accurate with regard to 25 each IP address? California Deposition Reporters Page: 188 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 190 of 291 Page ID #:1491 1 MR. GIBBS: 2 THE WITNESS: Objection. Misstates testimony. I would say they're world-class. 3 If it's not 100 percent, it's got to be right there. 4 BY MR. RANALLO: 5 Q. Let's say -- I mean, in the cases where it 6 resolves to no subscriber, is that because they attract 7 the wrong IP address or because Comcast, for example, 8 wasn't able to say who that IP address belonged to? 9 A. I will say that Comcast or Verizon or Time 10 Warner, whoever the ISP is, if they're not 100 percent 11 on when they give that information out, they'll just say 12 they can't do it. 13 world-class. 14 15 They are very careful. They're FURTHER EXAMINATION BY MR. PIETZ Q. So Mr. Hansmeier, you're an attorney. You've 16 been very involved in these cases. 17 there's a certain amount of controversy that goes along 18 with these cases. You're aware that Am I correct? 19 A. What do you mean? 20 Q. The issue I'm interested in -- which is an 21 issue I'm sure Mr. Gibbs is well versed on, because it's 22 a topic I know he's addressed several times. 23 particular issue that I'm concerned with -- that I'm 24 going to be asking AF Holdings to opine upon -- is the 25 process by which plaintiffs in cases like these, so the California Deposition Reporters But the Page: 189 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 191 of 291 Page ID #:1492 1 process by which AF Holdings alleges that an Internet 2 user, who has been identified as paying for an Internet 3 account by his ISP, is identified as a John Doe 4 defendant, who is guilty of alleged infringement. 5 recognize that was kind of a mouthful, but let me -- 6 that was just to sort of explain to you the topic. 7 So I Paragraph 22 of the first amended complaint in 8 this action states that Defendant and that's Defendant 9 with a big D, which refers to Joe Navasca, using IP 10 address 69.109.216.238 without plaintiff's authorization 11 for license intentionally a downloaded a Torrent file, 12 in particular, plaintiff's video, purposefully loaded 13 that Torrent file into his BitTorrent file. 14 case uTorrent 2.2.1, entered a BitTorrent's forum, 15 particular to plaintiff's video and reproduced and 16 distributed the video to numerous third parties. 17 Here's my question. In this Beyond the fact that 18 Mr. Navasca was presumably identified by his ISP as 19 having paid for Internet service, what facts are there 20 to support that allegation in the complaint found on 21 paragraph 22? 22 A. I believe that facts that form the basis of 23 our investigation and the basis for naming Mr. Navasca 24 in this case are set forth in our response to the -- 25 through his attorney Mr. Ranallo's for motion for California Deposition Reporters Page: 190 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 192 of 291 Page ID #:1493 1 undertaking. 2 refresh my memory as to the exact facts that were used 3 to determine that Mr. Navasca was the infringer. 4 Q. If I had that in front of me, it could Would AF Holdings agree that the mere fact 5 that somebody happens to pay the Internet bill is not 6 enough to justify naming and serving them with a 7 complaint? 8 9 A. I don't think AF Holdings has a particular position on that issue. I can tell you that AF Holdings 10 generally does an investigation -- or the attorneys and 11 technical experts do an investigation beyond simply 12 naming the subscriber. 13 Q. 14 record. 15 question? You represent AF Holdings as counsel of You're an attorney. 16 MR. GIBBS: 17 THE WITNESS: 18 19 What's your view on that Objection -What is the question? BY MR. PIETZ: Q. The question of whether the mere fact that 20 somebody pays the Internet bill is enough to justify 21 naming and serving them in a complaint for copyright 22 infringement? 23 24 MR. GIBBS: Asking for opinion. You can answer as an opinion. 25 California Deposition Reporters THE WITNESS: I guess my personal view on that Page: 191 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 193 of 291 Page ID #:1494 1 issue is that -- I guess I don't have a personal view on 2 the issue of whether that is sufficient under Rule 11 or 3 any applicable legal standard. 4 as the infringer is enough to justify or is enough to 5 satisfy whatever legal requirement exists before naming 6 and serving someone with a complaint. 7 fact that they're an account holder that's associated 8 with infringing activity would suggest that they have 9 some connection whether it's -- how do you say it -- 10 whether they're the direct infringer or whether they 11 have provided the means or whether they had knowledge of 12 some form of infringement activity occurring over their 13 IP address. 14 question that has yet to be definitively resolved at the 15 higher levels of the judicial system. So I don't know. 16 Q. A. I'm not done. Certainly the I think that's an open So return to -- 17 Having their name back That being said, my personal 18 approach is I will generally look for information above 19 and beyond just being named as the -- shall we say 20 account holder by the IPS. 21 One factor that one might look at includes, 22 does the -- when you speak to the account holder, can 23 they identify someone else who did it. 24 account holder says it wasn't me, it was my roommate and 25 I'm willing to sign an affidavit, then that would California Deposition Reporters And if the Page: 192 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 194 of 291 Page ID #:1495 1 probably be a better course of action, you know, to 2 continue to proceed forward against the roommate. 3 Q. So I'd like to return then to how AF Holdings 4 came to allege that Mr. Navasca, the defendant in this 5 case -- what facts is the allegation in Paragraph 22 6 based on? 7 A. Again, if someone has a copy of the response 8 to the motion for undertaking, I can refresh my 9 recollection as to the facts that -- 10 11 FURTHER EXAMINATION BY MR. RANALLO Q. Let me ask you do this. In preparation for 12 this, did you do any research into the facts upon which 13 AF Holdings has based its identification of Joe Navasca 14 as the infringer? 15 A. Again, I reviewed the response for the motion 16 of undertaking. 17 facts. 18 long day of deposition. I just can't recall them out of recall after a 19 20 I believe that's set forth by a few FURTHER EXAMINATION BY MR. PIETZ Q. So is it AF Holdings' testimony that the only 21 facts that are relied upon in naming Mr. Navasca are the 22 ones recited in the undertaking motion opposition? 23 A. I would have to review the undertaking motion 24 very carefully before saying that those are the only 25 facts. California Deposition Reporters Page: 193 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 195 of 291 Page ID #:1496 1 2 MR. PIETZ: Let's take a five-minute break and I'll ask you to do that, sir. 3 THE WITNESS: 4 (Off the record at 3:37 p.m. and back on Does someone have a copy of it? 5 the record at 3:40 p.m.) 6 FURTHER EXAMINATION BY MR. RANALLO 7 Q. Let me go ahead and ask you this. Who at AF 8 Holdings knows the facts underlying the identification 9 of Joe Navasca as the infringer? 10 A. Well, again, as I said before you got to be 11 careful when you assume that, for example, Mark Lutz, 12 who is, you know, AF Holdings sole manager, member, what 13 have you, is intimately familiar with the facts, for 14 example this specific case. 15 too many -- he delegates these matters to his counsel, 16 to his attorneys. 17 CEO of Facebook. 18 intimately familiar with the facts upon which every 19 lawsuit that Facebook files prior to the filing of a 20 lawsuit. 21 business. 22 Lutz delegates these matters to his attorneys and the 23 independent contractors such as 6681 Forensics. There are too many cases or Just like any CEO, the CEO of Ford or I don't think Mark Zuckerberg is It's not a very realistic way to run a But I'm sure like just Mark Zuckerberg, Mark 24 In preparation for the deposition today, we 25 did review what factors were at play when Mr. Navasca California Deposition Reporters Page: 194 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 196 of 291 Page ID #:1497 1 was chosen as the defendant. 2 the response for the motion for undertaking that we'll 3 be reviewing very shortly. 4 Q. And those are set forth in Could you tell me the identity and location of 5 the individuals with knowledge about the facts 6 underlying AF Holdings' identification of Joe Navasca, 7 the infringer? 8 9 10 11 A. Sure. Let's see. Counsel, Mr. Gibbs, he's right here. The ISP -- if you can remind me what the ISP was in this case, Comcast maybe? Q. This is a pretty clear statement in No. 15 of 12 what we're looking for. 13 be prepared for. 14 A. This is something you were to Well, Mr. Ranallo, this has been a long day of 15 deposition. 16 every single fact, every single person, every single 17 identity of every person who had any connection to this 18 suit in the history of mankind, is a bit unrealistic. 19 And the idea that I'm going to remember Now, I pointed to something that could help me 20 refresh my recollection so I could answer the question 21 and fully answer the question for you and instead of 22 just simply providing a copy of the complaint which 23 would identify the ISP, you decided instead to chastise 24 me for reasons that remain unclear and forever will be 25 unclear. California Deposition Reporters If someone does have a copy of the complaint, Page: 195 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 197 of 291 Page ID #:1498 1 I'd be happy to refresh my recollection so I could 2 identify the ISP and that will trigger my memory of who 3 at the ISP has the information regarding the subscriber 4 resolution for Mr. Navasca. 5 6 FURTHER EXAMINATION BY MR. PIETZ Q. Since we're going to return to this topic in a 7 moment after we get you the opposition that you want to 8 refresh your recollection, let me ask a couple of other 9 questions. 10 11 12 What business records does AF Holdings routinely keep related to these cases? A. This must be Item No. 5. So the business 13 records would be the ISP subscriber return, 14 correspondence from counsel and, of course, copies of 15 the agreements, the assignment agreements and those are 16 the primary records kept by AF Holdings. 17 when you've got a company that's -- one-person company 18 he's not going to generate a lot of e-mail or 19 correspondence between himself naturally, but certainly 20 the assignment agreements and those sorts of records 21 would be kept. 22 23 24 25 Q. How about tax records. Of course, Has AF Holdings ever filed a tax return? A. I don't not believe they have filed a tax return in Nevis. California Deposition Reporters I believe there's an exception that if Page: 196 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 198 of 291 Page ID #:1499 1 you're not recognizing revenue, to filing a tax return, 2 so I don't not believe they have filed a tax return in 3 Nevis. 4 5 6 Q. Has AF Holdings ever filed a tax return in the United States? A. I'd have to think about that. I'm not aware 7 of any tax returns that AF Holdings has filed in the 8 United States. 9 Q. I'm asking now for the corporate testimony of 10 AF Holdings, not your personal recollection. 11 Holdings filed a tax return in the United States? 12 the answer yes, no or maybe? 13 A. Has AF Is I know I specifically asked about tax returns 14 in Nevis in preparation for this deposition. 15 regard to a tax return in the United States, of course, 16 AF Holdings isn't formed in the United States -- 17 18 MR. RANALLO: Excuse me. With Could we put on the record what that says (indicating). 19 THE WITNESS: 20 MR. GIBBS: 21 THE WITNESS: Sure. It says ISP, AT&T. I didn't want to interrupt. I believe I asked about the US 22 tax returns and they did not have any tax returns for my 23 review. 24 BY MR. PIETZ: 25 Q. California Deposition Reporters And that's a conversation you had with Page: 197 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 199 of 291 Page ID #:1500 1 Mr. Lutz; is that correct? 2 A. Yes. 3 Q. Does AF Holdings have an accountant? 4 A. AF Holdings does not have an outside 5 accountant. 6 Q. 7 person? 8 A. No, there are no outside accountants. 9 Q. Any accountants ever of any kind? 10 A. There are no accountants of any kind. 11 Q. How about bookkeeper. 12 13 Does it utilize accountant services of any Does AF Holdings have a bookkeeper? A. I would say Mr. Lutz generally performs the 14 services of a bookkeeper. 15 set of books. 16 17 Q. It's not a very complicated How about the -- so Mr. Lutz has a set of books for AF Holdings in his possession? 18 A. Let me think about that question. 19 Q. You just said it's not a very complicated set 20 of books. 21 books does exist. 22 A. I'm implying from your answer that a set of No. Is that a correct implication? My answer was meant to convey the idea 23 that the financial records of AF Holdings and the 24 financial transactions of AF Holdings are not complex 25 and that's what I meant by it wouldn't be -- to be California Deposition Reporters Page: 198 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 200 of 291 Page ID #:1501 1 perfectly precise I would say it wouldn't be a very 2 complicated set of books. 3 Q. So are there books? 4 A. I'm trying to refresh my recollection. 5 Q. If so, who has them? 6 A. Well, in the financial records I reviewed 7 there were some Excel spreadsheets, I guess if you're 8 going to call them books, that had some sort of numbers 9 on them. They weren't very complete and they weren't 10 very well labeled, but they were in Mark Lutz's 11 possession. 12 13 Q. Are those the only financial records you've ever seen for AF Holdings? 14 A. Yes. 15 Q. Are aware if any other financial records 16 exist? 17 A. I'm not aware of any other financial records. 18 Q. Is the company aware of any other financial 19 records? 20 A. No. 21 Q. Just the Excel spreadsheets that Mr. Lutz has 22 that you reviewed in preparation for this hearing? 23 A. Yes. 24 Q. What are AF Holdings assets? 25 A. The assets of AF Holdings are the intellectual California Deposition Reporters Page: 199 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 201 of 291 Page ID #:1502 1 property that it holds. 2 any proceeds of lawsuits currently in the trust accounts 3 of various attorneys. 4 Q. I suppose its claim of right on So how about -- that was my next question. 5 How about cash in trust accounts. 6 AF Holdings' assets in various trust accounts across the 7 country? 8 9 10 11 A. What's the total of Which item are we referring to so I can refresh my recollection? Q. Distribution and proceeds of AF Holdings' settlement money. 12 MR. GIBBS: Objection. That not what you're 13 asking for, though. 14 that's outside the notice of deposition. You're talking about something 15 MR. RANALLO: 16 MR. PIETZ: Duly noted. 17 MR. GIBBS: We're talking about bank accounts, 18 AF Holdings' revenues. not revenue. 19 THE WITNESS: This is why I don't have a 20 recollection. 21 BitTorrent copyright infringement related to work. 22 There's no way for AF Holdings to determine that number. 23 BY MR. PIETZ: 24 25 Q. This says revenues derived from There's no way at all for AF Holdings to know how much money is being held in trust for its benefit in California Deposition Reporters Page: 200 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 202 of 291 Page ID #:1503 1 various attorney trust accounts across the country? 2 way at all? 3 A. I'll read back the noticed topic -- 4 Q. Please don't. No 5 6 I've read it. Refer me to the number, if you would. A. I'm reading No. 10 now. AF Holdings' revenues 7 derived from BitTorrent copyright litigation related to 8 the work. 9 I'm talking about Alpha Law Firm. The breakdowns that -- for example, you know, If Mark Lutz called 10 me up and said, How much revenues have we derived from 11 this particular work, I couldn't break it down for him 12 like that. 13 settlements that we have received on your behalf overall 14 is a different amount, or is X, Y and Z. 15 the number off the top my head. 16 and said, How much have we gotten for this work? 17 not a way people do accounting. 18 Q. I cold break it down for him in terms of the I don't know If he ever called me up That's So the way that AF Holdings does its 19 accounting, how much cash does it have in 20 attorney-client trust accounts across the country? 21 A. I believe this was a noticed up topic that I 22 had to go ahead and collect the cash and determine the 23 amount of cash. 24 MR. GIBBS: 25 MR. RANALLO: California Deposition Reporters Objection -Let me ask you this -Page: 201 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 203 of 291 Page ID #:1504 1 MR. PIETZ: Hold on a second. Wait. Wait. 2 Are you refusing to answer the question or is your 3 answer you're refusing to answer or is your answer that 4 you don't know? 5 MR. GIBBS: 6 Outside the notice of topics. 7 Objection. BY MR. PIETZ: 8 Q. Go ahead and answer, please. 9 A. I'm not refusing to answer the question. 10 The -- my answer to the question is that as a corporate 11 representative for AF Holdings sitting here right now 12 testifying on behalf of the company, I can't tell you 13 how much cash they have, as a snapshot in time as we sit 14 here right now. 15 noticed up, it still would be a very difficult topic to 16 adequately prepare for, because there are claims on the 17 cash, for example, for incurred expenses and future 18 expenses and it's very complicated. 19 20 Q. MR. GIBBS: So who has Mr. Pietz, I would appreciate you not to interject random comments. 23 24 I thought the books were simple. claims on the cash? 21 22 And, frankly, even if it had been MR. PIETZ: I'm just indicating an apparent inconsistency and asking the deponent to explain. 25 California Deposition Reporters MR. GIBBS: You're being snarky is what it is. Page: 202 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 204 of 291 Page ID #:1505 1 THE WITNESS: That's true. Mr. Pietz, I will 2 ask you as a 30(b)(6) corporate representative to 3 maintain professionalism and politeness. 4 there's any need for you to try and intimidate and 5 influence my testimony or make me feel bad about the 6 testimony I previously gave just because you're trying 7 to be a bully. 8 9 10 11 MR. PIETZ: seen as bullying. I don't think I apologize if my comments were That's not my intent. BY MR. PIETZ: Q. Return to the apparent inconsistency. On the 12 one hand a moment ago you said AF Holdings' books were 13 not very complicated and then just more recently, a few 14 seconds ago you stated that it would actually be pretty 15 complicated to determine the cash on hand that AF 16 Holdings has because of various claims on those funds. 17 What I'm asking you to do -- again, my apology 18 if you took this the wrong way -- is to reconcile that 19 apparent inconsistency. 20 of claims that exist on the cash in attorney trust 21 accounts. 22 MR. GIBBS: Can you explain to me the kinds Objection. 23 you're misstating his testimony. 24 This is something -- BY MR. PIETZ: 25 Q. California Deposition Reporters Go ahead and answer, please. Page: 203 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 205 of 291 Page ID #:1506 1 A. Well, I think it's important to recognize it. 2 When you say books, you're not -- the assumption you're 3 making is that books equal balance sheet. 4 asking me about balance sheets specifically, then the 5 balance sheet isn't simple for the reasons I just 6 described. 7 statements at least as I understood it. 8 a different understanding. 9 page. If you're Books means, generically speaking, financial Maybe you have So we're all on the same When I heard you say books with respect to AF 10 Holdings, I understood you to mean inputs, outputs, the 11 corporate expenses, the -- how do you say it -- the 12 income and expenses and the -- that's pretty simple. 13 It's not -- AF Holdings has made the decision that to 14 sell and distribute and market and perform all of these 15 activities, would be very difficult in terms of making 16 any money from it because the piracy is so great. 17 That's what I meant when I said it's relatively simple. 18 But to determine an exact cash position on any given 19 point in time would be very complicated. 20 Q. So let's go to some specifics then. Let's 21 return to the topic we discussed earlier, which was 22 settlement proceeds that were paid in AF Holdings cases 23 where Alpha Law was counsel of record. 24 claims on the cash in trust and apparently in trust with 25 Prenda Law would there be on that money? California Deposition Reporters What kinds of Page: 204 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 206 of 291 Page ID #:1507 1 A. There would be no specific claims on -- can 2 you please restate the question. 3 understand it fully. 4 Q. I want to make sure I So Alpha Law obtains settlements, money was 5 paid into attorney trust accounts, which was the Prenda 6 trust account. 7 funds in attorney trusts are subject various kinds of 8 claims. 9 with, what kinds of claims was the trust account money 10 In the cases that you're personally familiar subject to? 11 12 You've stated that money -- AF Holdings' MR. GIBBS: Objection. 13 Objection. Compound question. Misstates testimony. THE WITNESS: I'm not really understanding 14 what you mean by claims, if it was money from -- that 15 goes into Prenda's trust account. 16 kinds of claims it was subject to in Prenda's trust 17 account. 18 BY MR. PIETZ: 19 Q. I can't tell you what Have you been reimbursed for expenses incurred 20 by the firm out of Prenda's trust account in connection 21 with the AF Holdings cases where Alpha Law Firm 22 represented AF Holdings? 23 A. Yes. 24 Q. What kind of expenses? 25 A. The expenses we previously outlined, which California Deposition Reporters Page: 205 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 207 of 291 Page ID #:1508 1 were filing fees and ISP fees. 2 Q. Any professional services fees? 3 A. No. As I previously stated, I was not paid by 4 Alpha Law Firm or -- Alpha Law Firm was not paid by AF 5 Holdings for -- 6 Q. To clarify. I didn't mean professional 7 services earned by Alpha Law. 8 service fees paid to some other third-party vendor? 9 A. I meant professional I guess I'm not familiar. If you can give me 10 a specific example that you're talking about, I just 11 don't have a frame of reference. 12 Q. How about payments to 6681 Forensics? 13 A. No. 14 Q. How about payments due to any other computer 15 company? 16 17 A. 6681 Forensics. 18 19 Q. How was 6681 Forensics paid in AF Holdings' litigation? 20 21 Alpha Law Firm did not make any payments to A. 6681 Forensics is paid a flat monthly fee to do monitoring service. 22 Q. And what's the flat fee? 23 A. It's arranged over time between -- well, I 24 mean. It was lower before and now it's increased over 25 time. I believe the number is -- the current number is California Deposition Reporters Page: 206 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 208 of 291 Page ID #:1509 1 $6,000 per month. 2 Q. And that is payable by whom? 3 A. It is payable by -- are you asking for the 4 exact precise financial transaction? 5 that money to 6681 Forensics. AF Holdings owes 6 Q. And how is it paid? 7 A. The exact bookkeeping for the payment -- I'm 8 trying to refresh my recollection. 9 from Prenda Law to 6681 Forensics from the proceeds of 10 11 12 I believe it's paid settlements Q. Has Alpha Law ever made any payments to 6681 Forensics? 13 A. No. 14 Q. How about the Anti-Piracy Law Group. 15 Has that ever made any payments to 6681 Forensics? 16 A. None that I'm aware of. 17 Q. The Anderson firm that we talked about 18 19 20 21 earlier. A. Has that made any payments to 6681 Forensics? Well, are you talking about executing the financial transaction purpose of it? Q. I'm talking about any money at all flowing out 22 of the those firms' client trust accounts to 6681 23 Forensics? 24 25 A. I couldn't tell you with respect to Anderson & Associates, but none that I'm aware of. California Deposition Reporters Page: 207 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 209 of 291 Page ID #:1510 1 Q. Would it be fair to say then that on a global 2 basis 6681 Forensics is paid when Prenda Law every month 3 pays them $6,000 on behalf AF Holdings? 4 A. I believe so. 5 Q. And would it also be fair to say that 6681 I believe that's accurate, yes. 6 Forensics doesn't obtain any other compensation from AF 7 Holdings other than that $6,000 a month? 8 A. Yes, that would be fair to say. 9 Q. How about the employees and officers of 6681 10 Forensics. 11 other than the $6,000 a month that's paid to the 12 company? Are they paid by AF Holdings in some way 13 A. No. 14 Q. Returning to the question of -- let me ask now 15 about who -- and I think I can guess the answer to this 16 question, but I'll ask anyway. 17 authority to settle a lawsuit? Who at AF Holdings has 18 A. Mark Lutz. 19 Q. Is he the only person at AF Holdings with that 20 authority? 21 A. He's the only person at AF Holdings, yes. 22 Q. How about -- same question but with dismissing 23 a case. 24 authority to dismiss an AF Holdings case? 25 Is Mark Lutz the only person who has the A. California Deposition Reporters Yes. Well, I should clarify my two prior Page: 208 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 210 of 291 Page ID #:1511 1 answers. 2 AF Holdings? 3 Q. Are you talking about people specifically at My question was in litigation brought by AF 4 Holdings, who has the authority to settle and dismiss 5 those cases. 6 A. I need to clarify my answers to the two prior 7 questions. 8 I understood your two prior questions to say, who has 9 the authority to do it -- who at AF Holdings had the And my answers to the two prior questions -- 10 authority to do it and I thought you were asking that 11 question because I think you said you already knew the 12 answer implying that it was -- since there's only one 13 person at AF Holdings you were implying it was Mark Lutz 14 and the question -- and the answer was self-evident. 15 But to the extent that you're asking who in 16 the world has authority to enter into settlement 17 agreements or make certain specific litigation decisions 18 on behalf of AF Holdings, I would say that -- like any 19 other company that exists that is involved in 20 litigation, the attorneys for the -- attorneys who 21 represent AF Holdings in districts across the country, 22 in a case-by-case basis -- not in any global whatever -- 23 from time to time will have authority to enter into 24 settlements within ranges -- standard settlement ranges 25 and then make other decisions regarding the cases. California Deposition Reporters Page: 209 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 211 of 291 Page ID #:1512 1 Q. So sometimes AF Holdings' outside counsel will 2 be delegated settlement authority for AF Holdings cases; 3 is that correct? 4 A. On a case-by-case basis, yes. 5 Q. Did that occur in this case? 6 A. That came up in this case, because the -- 7 well, I'd have to double check. 8 specifically whether in this particular instance the 9 authority was delegated. 10 Q. I couldn't say How about initiating litigation. Does AF 11 Holdings outside counsel have authority to initiate 12 litigation on AF Holdings' behalf? 13 A. How do you mean by initiate litigation? 14 Q. I mean, going down to the courthouse and 15 16 filing a compliant? A. Well, certainly Mark Lutz is not going to go 17 down to the courthouse and file complaints in every 18 district that AF Holdings files a case. 19 outside counsel has authority to file the complaint on 20 AF Holdings' behalf. 21 Q. Of course, the Let me ask the question a different way. Is 22 it conceivable that Prenda's outside counsel has filed 23 complaints without specifically running that particular 24 complaint by Mr. Lutz? 25 A. California Deposition Reporters No. But I would qualify that by saying Page: 210 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 212 of 291 Page ID #:1513 1 that -- as you guys know -- Prenda's role with respect 2 to AF Holdings is more national counsel role. 3 know -- they're not just on the ground fighting case by 4 case and so forth and so on. 5 significant role than that. 6 go case by case and say, Oh, let's sue this guy. 7 sue that guy, but this guy or not this guy or that guy. 8 He delegates some of that to Prenda Law to assist him in 9 not spending all of his day focusing on litigation, but 10 11 They you, They have a more So Mr. Lutz is not going to Let's instead trying to focus on business opportunities. Q. So if Prenda is overseeing AF Holdings' 12 litigation nationally, what does the Anti-Piracy Law 13 Group do? 14 A. They are outside counsel for AF Holdings. 15 Q. In only certain limited jurisdictions? 16 A. I couldn't recite the various jurisdictions in 17 which the Anti-Piracy Law Group operates. 18 they're in California and I believe they're in Illinois. 19 Those are the only two jurisdictions that I'm aware of. 20 21 22 23 Q. I believe Law Group? And who are the principals of the Anti-Piracy A. Is that just Mr. Duffy? Mr. Duffy is the principal of the Anti-Piracy Law Group. 24 Q. Isn't he the principal of Prenda Law? 25 A. Yes, he is also the principal of Prenda Law. California Deposition Reporters Page: 211 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 213 of 291 Page ID #:1514 1 Q. So what's the difference between the two? 2 A. They're two separate entities, two separate 3 firms. 4 Q. And they both represent AF Holdings? 5 A. They both represent AF Holdings, yes. 6 Q. Could they have other clients in common? 7 A. You'd have to ask them. 8 matter of public record. 9 10 I'm sure it's all a MR. GIBBS: Objection. Outside of his knowledge, outside the deposition topics. 11 MR. PIETZ: Let's take that five-minute break 12 we mentioned a while ago and allow the deponent to 13 review the opposition to the bond motion. 14 (Off the record at 4:06 p.m. and back on 15 16 17 the record at 4:11 p.m.) BY MR. PIETZ: Q. Back on the record in the 30(b)(6) deposition 18 of AF Holdings. 19 break, did you have an opportunity to review AF 20 Holdings, LLC's response to defendant, Joe Navasca's, 21 motion to post undertaking? Mr. Hansmeier, while we were taking a 22 A. I did. 23 Q. And I'll note for the record that document -- 24 in case -- Northern District of California 25 12cv2396-ECF34. California Deposition Reporters Did reviewing this document refresh Page: 212 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 214 of 291 Page ID #:1515 1 your recollection as to the facts supporting AF 2 Holdings' allegation that Mr. Navasca is the 3 defendant -- is the actual defendant in this action? 4 A. Yes, I did. My recollection may still be 5 incomplete, but I will do my best to recall as much of 6 the information as I possibly can to describe the 7 process by which Joe Navasca was chosen as the defendant 8 in the instant action. 9 Q. I'll try and save us some time. Other than 10 rehash what's in this document, are there any other 11 facts other than the facts contained in this opposition 12 which support AF Holdings' position that Mr. Navasca is 13 the defendant in this case? 14 A. I believe so. Let me start -- I appreciate 15 the request for efficiency, but for the sake of my being 16 able to go through everything, it would be helpful for 17 me to just state the facts that I'm aware of because I'm 18 not sure which facts are in here and which facts aren't 19 in here. 20 So starting at the beginning, I guess we would 21 say that the first step that took place was -- maybe I 22 should ask a clarification question. 23 post getting the subscriber name back? 24 25 Q. I think that's a good idea. point of the subpoena return. California Deposition Reporters Are you asking me Let's skip to the So in other words, Prenda Page: 213 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 215 of 291 Page ID #:1516 1 has obtained a subpoena return. 2 there? 3 A. What does it to do from So in this particular instance the subpoena 4 return as identified -- I believe it was identified by 5 AT&T an account holder to be Jovino Navasca, who is not 6 the same person as the defendant Joe Navasca. 7 The standard process when we get back the 8 subpoena return is to think, now does this person seem 9 like the infringer, does this person seem not like an 10 infringer. 11 in this instance was to find out who all lives in the 12 household. 13 one can use to determine who lives in the household. 14 15 16 Q. And I believe the first step that was taken There are variety of services online that Can I interrupt you. Can you tell us which particular services were used in this case? A. I believe the service that was used in this 17 particular case is a service called Accurint, 18 A-C-C-U-R-I-N-T. 19 20 21 Q. And were there any other database searches conducted on the ISP subscriber? A. To the extent you consider Google to be a 22 database. 23 background search of the household was done through 24 Accurint. 25 Q. California Deposition Reporters The most formal database search and Who performed this search? Page: 214 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 216 of 291 Page ID #:1517 1 A. 2 search. 3 Q. I could not tell who exactly performed this 4 Was it Mark Lutz? MR. GIBBS: 5 question. 6 He just answered that topics. 7 Objection. BY MR. RANALLO: Objection. Not one of the noticed deposition 8 Q. I was asking for a yes or no on Mr. Lutz. 9 A. The answer is I don't know. 10 this time. 11 12 I don't recall at Q. Well, leave a blank there for you to supplement. 13 A. I'll be glad to do so. 14 Q. Okay. Great. Does AF Holdings ever use 15 licensed private investigators to conduct searches like 16 this? 17 A. I believe we have in the past, yes. 18 Q. And who are those investigators? 19 A. I don't have the names of the investigators we 20 have retained. 21 Accurint report, for example, is not yielding very much 22 useful information. 23 24 25 Q. We do those in circumstances where an Do you know if a investigator was used in this case? A. California Deposition Reporters I don't believe an investigator was used in Page: 215 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 217 of 291 Page ID #:1518 1 this case. 2 3 Q. So beyond the Accurint report what other facts support naming Joe Navasca as the defendant? 4 A. So then you take the Accurint report and you 5 look at the various people listed on it. 6 report provides quite a bit of information regarding, 7 you know, age, sometimes some other information, 8 criminal record. 9 not recalling at this time. The Accurint I'm sure other information that I'm Then you go through and you 10 look at each person listed on the Accurint report. 11 believe in this particular instance the Accurint report 12 listed four or five people who potentially lived in the 13 household and the next step is then to investigate each 14 of those individuals. 15 Q. How is that investigation performed? 16 A. I The investigation take a lot of different 17 forms. 18 to the account holder. 19 20 Q. A. 25 I'm not I was going to get more specific as to this case. 23 24 Mr. Hansmeier, just to be clear. asking so much in terms of general practice here. 21 22 An initial way to investigate someone is to talk Q. Right. So what was the investigation in this case? A. California Deposition Reporters Sure. I believe the next step in this case Page: 216 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 218 of 291 Page ID #:1519 1 was -- after running the Accurint report, we reached out 2 to Mr. Navasca. 3 Jovino Navasca. 4 Q. And by Mr. Navasca I'm referring to Can I stop you for some more clarification. 5 When you say we reached out, what do you mean? 6 doing the reaching? 7 A. Who was I might be -- 8 MR. GIBBS: 9 THE WITNESS: Objection. Calls for speculation. I'm trying to be as accurate as 10 possible here. 11 Mr. Navasca informing him of the litigation and asking 12 him if had any ideas about whether he did it or whether 13 someone else might have done it. 14 BY MR. PIETZ: I believe that a letter was sent to 15 Q. Who would have signed that letter? 16 A. I would have to look at the specific letter in 17 question. 18 19 I don't remember who signed the letter. Q. Do you know what law firm letterhead it would have been? 20 A. Again, I know what the investigative process 21 was. 22 and who signed what and those particulars. I don't know the particulars such as letterhead 23 Q. 24 letter. 25 A. So after the Accurint report we've got a What else? California Deposition Reporters I believe he also would have called to reach Page: 217 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 219 of 291 Page ID #:1520 1 out to him to see if he had any basis for knowing why 2 his IP address was used for infringing activity. 3 Q. And who called Mr. Navasca? 4 A. Again, I don't know who would have reached out 5 6 7 8 9 to him specifically. Q. Well, there's only one employee at AF Holdings. Was it Mr. Lutz? A. The assumption behind that question is that only an employee of AF Holdings could have reached out 10 to him. 11 been Mr. Lutz. It could have been an attorney or it could have 12 Q. Could it have been anyone other than that? 13 A. Theoretically possible. 14 15 16 I would say the most likely scenario would be Mr. Lutz or an attorney. Q. Are there any other individuals who contact plaintiffs -- strike that. 17 Are there any other individuals who contact 18 defendants in AF Holdings' cases other than Mr. Lutz and 19 attorneys of record? 20 A. I guess I would have to think through every 21 person that has been ever been associated. 22 recall a comprehensive list of every individual who's 23 been associated with reaching out to punitive 24 defendants. 25 California Deposition Reporters I don't Would you like me to continue back to this -Page: 218 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 220 of 291 Page ID #:1521 1 2 to the investigation? Q. No. What I might ask instead. Have there 3 been individuals who are engaged specifically for the 4 purpose of making these kinds of phone calls? 5 6 7 A. Just to be clear. When you're referring to these kinds of phone calls, you're referring to -Q. To answer your question. Phone calls from AF 8 Holdings or its attorneys to John Doe defendants to 9 discuss the investigation that you're now describing. 10 A. Well, again, AF Holdings uses a variety of law 11 firms and I can't tell you who works for every law firm 12 out there in the country. 13 Q. Would it be primarily Mr. Lutz's 14 responsibility to perform the investigation or would it 15 be the attorney of record's responsibility to perform 16 the investigation? 17 A. It could be either. It's hard to make 18 generalizations about every single case that's out 19 there. 20 21 22 Q. So what about this case. Can you provide any detail about who contacted the Navasca family? A. Again, I've already testified that I don't 23 know who -- what letterhead was used or what the 24 signature block said. 25 review information to allow me to be able testify as to California Deposition Reporters I am familiar with the -- I did Page: 219 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 221 of 291 Page ID #:1522 1 how Joe Navasca was chosen as a defendant in the instant 2 action. 3 Q. 4 Mr. Navasca. 5 phone call to the Navasca family? 6 7 Who on behalf of AF Holdings has placed a MR. GIBBS: Asked and answered. Can we move on from this? 8 9 I'm most interested in phone calls to THE WITNESS: you the same answer. I'm going to continue providing I have no recollection of who the 10 specific individual was from AF Holdings who made the 11 call to the Navasca family. 12 BY MR. PIETZ: 13 14 Q. Holdings' answer on that question. 15 16 Well, in any event I guess that will be AF Does Mr. Gibbs employ people who made phone calls to the defendant in this case? 17 A. That's a question for Mr. Gibbs. 18 Q. I'm asking AF Holdings. 19 A. AF Holdings has no specific position on 20 whether Mr. Gibbs employs third-party individuals or has 21 no knowledge of him doing so. 22 Q. Here's what I'm trying to do, Mr. Hansmeier. 23 I'm trying to narrow down the universe of individuals 24 who might conceivably have placed the relevant telephone 25 calls in this case. California Deposition Reporters So we have Mr. Lutz. You've also Page: 220 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 222 of 291 Page ID #:1523 1 stated that sometimes lawyers will also make these phone 2 calls. 3 can give me of the people who may have called 4 Mr. Navasca in relation to this case? 5 What I'd like is the best possible list that you A. Well, I would suppose the best possible list 6 would be Mr. Lutz, Mr. Gibbs -- I'm try to think if 7 there's any other parties who may be plausible. 8 suppose Mr. Duffy may have placed a call. 9 10 Q. I Why would Mr. Duffy have been calling on this case? 11 A. I should be careful here, because I was doing 12 that on the basis and assumption that I know Mr. Duffy 13 is filing a motion for substitution in some of these of 14 cases, maybe not this specific case. 15 Q. Is your testimony then that perhaps Mr. Duffy 16 would have called recently, but probably not preparing 17 the first amended complaint? 18 19 20 21 22 A. It would be unlikely that Mr. Duffy would have been. Q. So far we only have two possibilities, which are Mr. Lutz and Mr. Gibbs. A. Well, no -- 23 MR. GIBBS: 24 THE WITNESS: 25 Objection. Misstates testimony. It's important to be precise in your questions because if I say one thing and you say California Deposition Reporters Page: 221 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 223 of 291 Page ID #:1524 1 something different back to me, then we spend a lot of 2 time just going back and forth having to correct what 3 you're saying. 4 You asked me to narrow down the field of 5 possibilities and I said well two obvious possibilities 6 would be Mr. Lutz, as the owner of -- forgive me -- the 7 manager of AF Holdings and Mr. Gibbs who is the attorney 8 of record in the underlying case. 9 every possible third party, of course it doesn't. 10 Does that eliminate I've tried to give you the best assistance I 11 could. 12 we can or we can stand on it if you'd like. 13 BY MR. PIETZ: If you would like to move beyond the question, 14 Q. 15 No. 15. 16 your testimony on topic 15? Referring now to the deposition subpoena topic Who did you confer with regarding preparing 17 A. I conferred with Mr. Lutz. 18 Q. Anyone else? 19 A. Then I reviewed the documents in the 20 underlying case, so the record. 21 Q. I'm just interested in people. 22 A. I'm trying to recall if I spoke to Mr. Gibbs 23 regarding what facts. 24 come up in conversations with Mr. Gibbs. 25 Q. California Deposition Reporters I believe the topic would have So during the phone call to the Navasca Page: 222 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 224 of 291 Page ID #:1525 1 family, what fact was revealed in your investigation 2 that led Prenda to serve Joe Navasca rather than Jovino? 3 A. Well, you have to understand that every time 4 you place a phone call to somebody doesn't necessarily 5 mean they pick up. 6 instance, Jovino picked up the phone call. 7 recollection. I do not believe in this particular That's my 8 Q. Was it just one call? 9 A. I'm only aware of one call that was placed to 10 the residence. 11 Q. How was it that you're sure of that? 12 A. I think I just said that was my best 13 recollection. 14 calls was. 15 made to a particular residence. 16 that's naturally recorded in any manner. 17 Q. I'm not entirely sure what the volume of It's difficult to track how many calls are It's not something Does Mr. Lutz keep records of his phone calls? 18 MR. GIBBS: 19 THE WITNESS: 20 notebook of every call he makes? 21 BY MR. PIETZ: 22 23 Q. Are you asking me if he keeps a I'm asking if there's any kind of records of Mr. Lutz's phone calls. 24 25 Objection -- MR. GIBBS: on that. California Deposition Reporters Objection. He'd have to speculate He's not Mr. Lutz. Page: 223 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 225 of 291 Page ID #:1526 1 THE WITNESS: I don't know what phone system 2 Mr. Lutz uses and what records are associated with those 3 systems. 4 the phone calls? 5 phone calls were placed to Mr. Navasca. 6 that I do not -- I'm not aware of a phone call placed to 7 Mr. Jovino Navasca in the preceding investigation 8 process where Mr. Navasca answered the phone. 9 BY MR. PIETZ: 10 Q. I guess what is the ultimate goal here with I can't tell you exactly how many I can tell you So far I've heard a fair bit about process, 11 but I would like to return to the question of facts. 12 What are the facts that justify serving Joe Navasca in 13 this case? 14 A. All right -- 15 Q. I don't mean to recap what we have already 16 17 gone over. A. I understand, but I may need to restart my 18 discussion of this, just so I can go through point A to 19 Z and I'll try to be as efficient as possible. 20 course, just noting for the record that I'm not 21 discussing the pre-subpoena return investigation, so 22 there's all of that. 23 subpoena return in our hands. 24 naming him -- so, of course, the first thing we did was 25 run the Accurint search, which revealed information California Deposition Reporters And, of Post -- once we got Jovino's The facts that supported Page: 224 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 226 of 291 Page ID #:1527 1 about the people in the household and I believe that 2 certain people were eliminated from likely contention or 3 the likely infringer status right off the bat. 4 example, any females living in the household in the 5 light of the nature of our client's work were removed 6 from likely candidacy for being the infringer of this 7 work. 8 9 10 Q. So it's essentially a demographic evaluation of the Accurint report based upon age and sex; is that correct? 11 12 MR. GIBBS: Objection. THE WITNESS: 14 MR. PIETZ: 16 Misstates his testimony. 13 15 For As what point did I say age? You didn't. I was asking. BY MR. PIETZ: Q. I'm trying just to keep to the facts here, not 17 the process, right. 18 AF Holdings did. 19 named Mr. Navasca as the defendant? 20 A. So I'm not so concerned about what What I'm more curious about is why it I'm trying to get through that discussion with 21 you right now. 22 look at that and we can eliminate some people as likely 23 candidates. 24 trying to be specific as to this case. 25 Accurint report would have eliminated certain California Deposition Reporters So after we run the Accurint search, we Although I'm speaking generally, I'm also The -- so the Page: 225 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 227 of 291 Page ID #:1528 1 individuals, particularly females, in the light of the 2 nature of the work. 3 if you want me to be able to get through this for you. 4 But that being said, we still do evaluate females, 5 because you can never definitively eliminate them at 6 that stage. 7 Although -- please let me continue The next step would be to reach out to the 8 account holder and we did that in this case. 9 out to the account holder by placing a telephone call to 10 We reached him and by sending him letters. 11 Q. Was that more than one letter? 12 A. I've only reviewed one letter that was sent to 13 him, to Mr. Navasca. 14 not responded to. 15 Q. I believe it was not returned or So far we've got one or maybe two letters and 16 probably one phone call. 17 nobody in the Navasca family responded to the letters or 18 the phone call; is that correct so far? And if I understand correctly, 19 A. That's my recollection, yes. 20 Q. Moving beyond those. What other facts are 21 there that Prenda relied upon in -- that AF Holdings 22 relied upon in naming and serving Joe Navasca? 23 A. Again we ran the Accurint report, so beyond 24 the phone call and the letter, we ran the Accurint 25 report. And then there's a pretty intensive process of California Deposition Reporters Page: 226 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 228 of 291 Page ID #:1529 1 looking at everyone in the household who has technical 2 competency, because BitTorrent is not like playing 3 Freecell or Hearts on the computer. 4 technically intensive process. 5 experience of BitTorrent infringement suggests that 6 people who are associated with BitTorrent infringement 7 have some sort of technical competency. 8 9 10 11 12 13 Q. It's a much more By far and away the Are you basing that on some kind of published study or something? Do you have a reference for that process? A. Can you please clarify what you mean by or something? Q. Well, in any event, can you please describe 14 for me this intensive process of evaluating the people 15 in the house? 16 A. So the next step in the process -- or the 17 intensive process is doing significant research on these 18 individuals through subsequent reports through finding 19 out what these people do, what their educational 20 background is, what their hobbies are, what evidence 21 there is of them being involved in computer communities, 22 checking out handles online and seeing if there's some 23 way to link someone on one of these piracy sites to one 24 of these individuals and build as complete a profile as 25 possible to determine whether someone is the likely California Deposition Reporters Page: 227 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 229 of 291 Page ID #:1530 1 2 3 4 5 6 infringer. Q. So, again, I would like to ask what specifically of those things was done in this case? A. Well, the same thing. Every one -- we built a profile on everyone in the house. Q. Can I clarify one thing. And -- 7 additional reports. 8 Before you said other than the Accurint report? 9 A. Were you referring to something I think in this case we ran Accurint reports 10 on the other individuals in the household to see what 11 their status was. 12 of that investigation was that there were -- I want to 13 say -- again, it's the end of the day and my memory is 14 fading a little bit. 15 males and I could be off by one or two -- because, 16 again, it's been a long day -- who were identified in 17 the household. 18 eliminate several of them by virtue of just everything 19 online -- every that we could find about them, 20 profile-wise suggested that they did not have a 21 technical background, they had no experience in this. 22 So I think, you know, the end result But there were -- I'll say three It may have been four. We were able to You made the mention of age before and 23 although that's not a dispositive factor. 24 certainly a factor you would bring into consideration to 25 say someone who is 80 years old. California Deposition Reporters It's I'll use my grandma, Page: 228 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 230 of 291 Page ID #:1531 1 for example. 2 use BitTorrent. 3 can't do it, but it's a factor you bring into 4 consideration. 5 She can barely use the computer much less That's not to say that no one that old And then, of course, you -- we were looking at 6 the various backgrounds of the people in the household. 7 One person just popped out to us, which was Mr. Navasca, 8 the defendant Navasca, who does have a technical 9 background, who does have technical job now, who meets 10 all the criteria that fits into a plastic case at least 11 in the experience of people who have been prosecuting 12 these actions before as being very, very likely to be an 13 infringer. 14 And then further we do -- there's always the 15 question of maybe a neighbor is doing it or maybe 16 someone who is parking outside in the street or maybe a 17 guest is doing it. 18 Who knows. In this case I believe that the data shows 19 that Mr. Navasca -- or the infringing activity that took 20 place over this IP address was not just on a single day 21 or a single two days, it was over an extended period of 22 time. 23 of time, but it wasn't one kind of glimpse of him and 24 that was it. I don't know -- I can't recall the exact period 25 California Deposition Reporters And then -- I mean, the follow-up I make to Page: 229 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 231 of 291 Page ID #:1532 1 that is that Mr. Navasca's deposition I think shows and 2 is a great illustration of the effectiveness of our 3 process. 4 who has a technical background, who does a lot of stuff 5 with computers. 6 transcript and seeing that he uses -- plays games two 7 hours a night. 8 had that program on his computer where he's destroying 9 the forensic evidence that we would need to prosecute 10 We had a guy there who uses technical -- or I think I remember reviewing the And further, frankly, the fact that he him. 11 And the fact that, Mr. Ranallo, with total 12 respect, but the fact that you misrepresented to the 13 court that he was actually maintaining the evidence. 14 It's shocking to me -- not shocking, but I think it's 15 quite illustrative that someone who needs to use a 16 forensic computer program to destroy evidence after he's 17 found out that he might be involved in one of these 18 lawsuits, who has the technical knowledge to do that and 19 who has testified that basically everyone else in his 20 household doesn't really use the computer very much. 21 guess his dad used a little bit of Facebook, but that 22 was about it. 23 Q. I Mr. Hansmeier, I would like to return to just 24 a couple of question and I'll thank you for that 25 detailed answer. California Deposition Reporters Who performed this intensive analysis Page: 230 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 232 of 291 Page ID #:1533 1 on the Navasca household in this case? 2 A. Well -- 3 4 MR. GIBBS: Objection. Asked and answered. BY MR. PIETZ: 5 Q. Go ahead. 6 A. I got to be honest with you guys. When I saw 7 this notice of deposition, Item No. 14, I was really 8 focused on the facts and the steps that were taken, not 9 by the people who actually took the steps. I think we'd 10 be glad to supplement the testimony to give some more 11 color around those specific issues, but as I sit here 12 right now, I was not focused on acquiring as to who did 13 what. 14 15 16 I was focused on what was done. Q. I think at least right now you don't know who performed this analysis; is that right? A. 17 Yeah. 14 is a process -- MR. GIBBS: Well, hold on a second. 18 Objection. 19 deposition is what he's saying. 20 point. 21 This is something that wasn't noticed in the MR. PIETZ: He's not aware at this Duly noted and I'll note for the 22 record that I disagree. 23 scope of 15. 24 BY MR. PIETZ: 25 Q. California Deposition Reporters This is very clearly within the I'm not necessarily opposed to giving you the Page: 231 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 233 of 291 Page ID #:1534 1 opportunity to fill that information in promptly 2 afterward. 3 Holdings doesn't know who performed this investigation? 4 But is the answer at least right now that AF MR. GIBBS: Objection. If you look at 15, 5 it's talking about the facts upon which AF Holdings 6 based its identification. 7 persons that made the identification. 8 9 10 MR. PIETZ: It doesn't talk about the Yes, it does. And the identify and location of any individuals or documents supporting such identification. 11 THE WITNESS: If you want to know the 12 identities of the individuals who have -- I can tell you 13 who the individuals are. 14 and I would say that Mr. Duffy to the extent that any of 15 this work was outsourced to other individuals within 16 Prenda Law, so those are the three individuals who 17 have -- how is this phrased -- who -- those are the 18 identities of three individuals who would have -- who 19 could support the identification, the location of the 20 individuals. 21 Mr. Duffy is located at 161 North Clark Street, Chicago, 22 Illinois. 23 Mr. Lutz is in Las Vegas. 24 BY MR. PIETZ: 25 Q. California Deposition Reporters It's Mr. Gibbs, it's Mr. Lutz, To go out straight off your noticed topic. Mr. Gibbs is right here in the room and Fair enough. Were any records kept in Page: 232 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 234 of 291 Page ID #:1535 1 connection with this so-called intensive analysis? 2 A. The Accurint records would be available, are 3 kept. 4 everyone that more of a contemporaneous sort of process, 5 I don't know if those records are retained. 6 from my discussions with people that -- what the results 7 of those were. 8 the letter that was sent to Mr. Navasca or letters, if 9 there was more than one, not Mr. Navasca the defendant, The notes regarding the background profiles on We do know And certainly I suspect we could pull up 10 but Mr. Navasca the dad. 11 best recollection of what the documents would be. 12 Q. Fair enough. Those would be -- that's my I'll note that the deposition of 13 Mr. Navasca took place after he was named as the 14 defendant in this case. 15 investigation revealed the fact that Mr. Navasca, the 16 defendant, supposedly has a technical background or 17 technical job? 18 uncover that fact, because that's the one specific fact 19 I heard that Prenda's hanging its investigation on. 20 was that fact uncovered? 21 22 23 A. What in the analysis or the To put that simply, how did Prenda How Well, first of all that's not the specific fact which Prenda is hanging its investigation on. Q. Sorry. Let me strike that part of that 24 comment. 25 determine that Mr. Navasca has a quote, technical California Deposition Reporters In any event how did Prenda's investigation Page: 233 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 235 of 291 Page ID #:1536 1 background or technical job? 2 A. Well, it would have come up either in the 3 context of the Accurint report, which may have listed 4 his employer and his education or it also may have come 5 up just through the process of finding out different 6 places where Mr. Navasca has listed his employment and 7 his education, such as Linkedin or whether it's a 8 Facebook page. 9 private. 10 Although I believe his Facebook page is That's where the facts would have been derived from. 11 Q. How do you know his Facebook page is private? 12 A. I believe that's one of the items that was 13 14 15 16 checked. Q. So how do you know that was one of the items that was checked? A. I spoke to Mr. Gibbs or Mr. Lutz or some other 17 person at Prenda regarding Mr. Navasca. 18 fact that his Facebook page was private. 19 been listed in the deposition. 20 Q. They noted the It may have So you did speak to Mr. Gibbs and Mr. Lutz 21 regarding the investigation that was conducted, but 22 sitting here today you can't remember who it was that 23 conducted the investigation; is that correct? 24 25 A. Well, I think it's important to note that it's not just -- we don't just have a single person who sits California Deposition Reporters Page: 234 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 236 of 291 Page ID #:1537 1 down and does an investigation. 2 process where some people may run the report, other 3 people may send out the letter, other people may try and 4 place a call. 5 6 Q. It's a multipronged Mr. Hansmeier, I ask you to please sign your name on the piece of paper. 7 (Whereupon, the deponent signed his 8 signature on a blank piece of paper.) 9 MR. PIETZ: We'll mark that as the next 10 exhibit. 11 one that we still need to enter and mark? Although, madam court reporter, don't we have 12 THE REPORTER: 13 MR. RANALLO: 14 Yes. I did mark the undertaking as 107. 15 (Whereupon Defendants' Exhibit No. 107 16 was marked for identification.) 17 MR. PIETZ: The undertaking is now marked 107 18 and we'll mark for the record the document that I'll 19 just note that Mr. Hansmeier just signed here on the 20 table as 108. 21 (Whereupon Defendants' Exhibit No. 108 22 23 24 was marked for identification.) BY MR. PIETZ: Q. 25 California Deposition Reporters Mr. Hansmeier, is this your usual signature? MR. PIETZ: Mark now Exhibit 109. Nick, Page: 235 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 237 of 291 Page ID #:1538 1 you're going to have to explain what this is. 2 only got that one copy. 3 We've What is that exactly? (Whereupon Defendants' Exhibit No. 109 4 was marked for identification.) 5 MR. RANALLO: Those are signatures exemplars 6 from a Mr. Peter Hansmeier's signature and a Paul 7 Hansmeier signature for comparison sake. 8 MR. PIETZ: 9 MR. RANALLO: What is that from, Nick? They are identified above them, 10 but they are from basically AF Holdings' file/Prenda 11 Law/Steele Hansmeier/Anti-Piracy Law filings. 12 MR. PIETZ: So I'll note for the record, the 13 top signature says executed on September 2nd -- it says 14 1010, but I suspect it probably means 2010. 15 Paul Hansmeier and then the second signature says 16 executed on May 5th, 2011 and it says underneath the box 17 Peter Hansmeier. 18 BY MR. PIETZ: 19 20 21 Q. And it says Mr. Hansmeier, does the signature on top appear to be your signature? A. It has less letters than I normally do, but 22 the first -- the first one looks like my signature, 23 yeah, the first name. 24 different ways at different times. 25 that's my signature. California Deposition Reporters But you sign your signature I'll agree that Page: 236 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 238 of 291 Page ID #:1539 1 2 Q. And the one below it, is that your brother's signature? 3 A. You'd have to ask him. 4 Q. The fact that he's your brother and I'm 5 6 assuming you've seen him sign things before. A. I don't recall having seen him sign anything 7 specifically before and I don't know where that 8 signature came from, so I'm not prepared to say that 9 that's -- and verify that that's my brother's signature. 10 Q. Does it look like you signing his name? 11 A. No. 12 Q. Now, just to be clear. You have had your 13 brother sign various declarations in cases that you've 14 been involved with before -- 15 A. I will submit that I've not had a handwriting 16 expert review the signatures on the declarations that 17 he's submitted. 18 Q. I understand that. My question is, though, 19 you've seen your brother's signature before on 20 declarations in cases you've been involved with, 21 correct? 22 A. There's a big difference between filing a 23 declaration that you verify that it's signed and 24 carefully analyzing the signature. 25 Q. California Deposition Reporters Sure. I understand that. Simple question, Page: 237 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 239 of 291 Page ID #:1540 1 you know what your brother's signature looks like, 2 correct? 3 4 A. I believe I could not reproduce my brother's signature from memory. 5 MR. PIETZ: We'll mark now for the record, 6 Exhibit 110, a verified petition filed by Quava, LLC, in 7 St. Clair County, Illinois. 8 (Whereupon Defendants' Exhibit No. 110 9 10 11 was marked for identification.) BY MR. PIETZ: Q. Mr. Hansmeier, have you ever seen this 12 petition before or maybe not this copy but the 13 underlying document? 14 A. I believe I've seen it, yes. 15 Q. When did you see it? 16 A. I believe I assisted -- oh, this isn't the one 17 that was filed in Minnesota? 18 Q. This is a St. Clair County, Illinois. 19 A. I worked with the one in Minnesota. 20 Q. So am I right that -- or maybe you were 21 mistaken when you said you'd seen this before and you 22 were thinking of Minnesota? 23 24 25 A. I was assuming this was the case that was filed by Alpha Law Firm in Minnesota. Q. California Deposition Reporters So Alpha Law Firm represented Guava, LLC in a Page: 238 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 240 of 291 Page ID #:1541 1 Minnesota case and you mistook this pleading for the one 2 that was in Minnesota; is that correct? 3 A. Yes. 4 Q. But on closer reflection, now having a chance 5 to look at it more carefully, I'll ask again, do you 6 recognize this pleading, which is from Illinois? 7 8 A. past. I believe I saw it one or two times in the I can't -- 9 10 11 12 13 14 (Whereupon, Mr. Gibbs left the room.) BY MR. PIETZ: Q. So you have seen this pleading from Illinois on one or two times in the past? A. I think my attorney should be present if you're going to be questioning. 15 MR. PIETZ: Fair enough. We'll hold off. Let 16 the record reflect that Mr. Gibbs is back in the room. 17 BY MR. PIETZ: 18 Q. Let's go ahead and continue with the question. 19 Continuing now that everybody is settled. 20 seen this St. Clair County petition before, correct, 21 Mr. Hansmeier? 22 A. So you have I have seen it a couple of times in the past. 23 I'm familiar with it because I know that there was a 24 hearing on it recently. 25 Q. California Deposition Reporters And can you recall who showed this petition to Page: 239 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 241 of 291 Page ID #:1542 1 you? 2 A. I don't recall who showed the petition to me. 3 I remember discussing this petition with Mr. Steele 4 quickly with some relation to the case. 5 6 Q. I'll ask you to skip to the verification page, which is like the seventh or eighth one in there. 7 A. I see it here. 8 Q. Can you read for me what it says there on the 9 signature line of the verification page? 10 11 A. No. I can read, but it's a little hard to read. 12 Q. To best of your ability what does it say? 13 A. I don't want to speculate what it says. 14 15 Here's what it says. Q. 16 17 18 19 20 21 It's a pretty rough copy. I agree. MR. GIBBS: I have no idea. BY MR. PIETZ: Q. I'm asking now for your best estimate. What's the name on the signature line there? A. You can ask as many times as you want. I'm telling you I can't read it. 22 Q. Does it look like Alan Moay, A-L-A-N, M-O-A-Y? 23 A. It doesn't look like that to me. 24 25 MR. GIBBS: speculation. California Deposition Reporters Objection. Calling for He already told you he can't read it Page: 240 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 242 of 291 Page ID #:1543 1 because it's a poor copy of the paper, so he'd be 2 speculating as to what it says. 3 BY MR. PIETZ: 4 Q. Go ahead and continue, please. 5 A. I don't think it looks like that. 6 think it looks like anything. 7 I don't and it's illegible. 8 9 Q. I think it's a poor copy It's so illegible that you can't read it at all; is that correct? 10 A. Me personally? 11 Q. You personally. 12 A. I'll take a second look at for the sake of 13 completeness. 14 name appear to be A-L -- I can't tell if it's N-A -- So the first three letters of the first 15 Q. 16 letter. 17 A. It looks like a capital A. 18 Q. The next letter? 19 A. Either an L or an I. 20 Q. And then after that, not sure. 21 letter? 22 A. It could be an A, it could be an N. 23 Q. Moving on to the next word. 24 letter? 25 A. I'll tell you what. Let's take it letter by The first letter what does that look like? California Deposition Reporters The fourth What's the next That's pretty clearly an M. Page: 241 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 243 of 291 Page ID #:1544 1 Q. And then the next letter? 2 A. It's an N or an A. 3 Q. And then the next letter? 4 A. That appears to be a Y. 5 Q. And then after that, can you make out the word 6 that it says after that? 7 A. D -- let's go letter by letter. 8 Q. Sure. 9 A. So the first letter appears to be a D. Why don't you just do it for me. 10 second letter appears to be a C. 11 The appears to be an E. 12 13 Q. The third letter Mr. Hansmeier, let me just stop. Do you think that word says declarant perhaps? 14 A. It could say defendant, declarant. 15 conceivably fit within the letters. 16 That would obviously, it's pretty illegible. 17 18 Q. Although, Do you know anybody by the name of Alan Moay, M-O-A-Y? 19 A. Do I personally know anybody by the name of 20 Alan Moay? 21 I've ever talked to in my entire life, but sitting here 22 right now, do I know anybody named Alan Moay, no, I do 23 not. 24 25 Q. I'd have to check my contact list and anyone Do you know anyone who is a principal or an officer or a corporate representative of Guava, LLC, California Deposition Reporters Page: 242 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 244 of 291 Page ID #:1545 1 with a first name of Alan? 2 A. Do I know anyone, principal or an officer -- 3 Q. Or a corporate representative. 4 A. I'd to have check my records as to who does 5 what at Guava, LLC. 6 most of my clients. 7 8 9 10 11 12 Q. I couldn't tell you that answer for Do you know anybody by the name of Alan Mony, M-O-N-Y? A. Again, I'd have to check my records to see who I've corresponded with in the past. Q. Do you know anybody by the name of Alan Mooney, M-O-O-N-E-Y? 13 A. I have represented an Alan Mooney before, yes. 14 Q. Is that the extent of your relationship to 15 Mr. Mooney, having represented him? 16 MR. GIBBS: 17 THE WITNESS: 18 Speculation. Can you ask me a more specific question? 19 Vague and ambiguous. BY MR. PIETZ: 20 21 22 23 Q. Let's start with this. What case did you represent him in? A. I couldn't tell you the caption of the case right now. 24 Q. Was it a single action? 25 A. Can you tell me what you mean by a single California Deposition Reporters Page: 243 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 245 of 291 Page ID #:1546 1 action? 2 Q. 3 4 Was it one litigation, whether in state or federal court? A. I'm trying to think whether I represented him 5 in other capacities. 6 MR. GIBBS: I need to take a one-minute break. 7 MR. PIETZ: Let's finish this question. 8 Go ahead. 9 THE WITNESS: I can. I represented him at 10 least in one action. 11 him in more actions, but I'd have to check my records 12 very specifically to determine that. 13 14 15 I've had -- I may have represented (Off the record.) BY MR. PIETZ: Q. Back on the record. Mr. Hansmeier, was the 16 litigation you represented Alan Mooney in the Priceline 17 litigation? 18 19 20 A. That sounds familiar. I'd have to check my records to be sure. Q. I'll represent to you -- I'm not sure that I 21 have a copy, but I will represent that I've seen a 22 pleading filed in Hennepin County, Minnesota where you 23 were counsel of record for one Alan Mooney, A-L-A-N, 24 M-O-O-N-E-Y. 25 A. California Deposition Reporters That sounds very inaccurate. I don't believe Page: 244 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 246 of 291 Page ID #:1547 1 I filed a pleading in Hennepin County. 2 Q. And then it was removed to federal. 3 A. There was a federal court action that I 4 represented an Alan Mooney in. 5 you're referring to. 6 representation as to what that case involved or didn't 7 involve. 8 9 10 11 Q. That might be what I'm not going to accept your All I'm after in any event, is whether or not there may be other cases in which you have represented this Alan Mooney. A. I believe I just testified and I'll testify in 12 this manner every time you ask me the question, that I 13 represented Mr. Mooney in the case that was -- in a case 14 that -- whether that's the one that you're referring to 15 or not -- it wasn't filed in Hennepin County, but was 16 removed to federal court and my other representations 17 statuses with respect to Mr. Mooney I would need to very 18 carefully check my past records and files to determine 19 whether or not I have represented him in the past. 20 Q. 21 Steele? 22 A. I don't recall if I have or not. 23 Q. To best of your knowledge have your client 24 25 Have you ever introduced Mr. Mooney to John Alan Mooney and John Steele ever met? A. California Deposition Reporters I do not believe so. Page: 245 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 247 of 291 Page ID #:1548 1 Q. Have they ever corresponded? 2 A. I guess you would have to ask the two of them 3 that. 4 the two of them, if that's what you're asking. I have not been party to correspondence between 5 Q. 6 Alan Mooney? 7 A. What do you mean by business dealings? 8 Q. I mean, is the extent of your relationship to 9 10 11 Do you have any other business dealing with Alan Mooney the fact that you represented him in litigation? A. Well, again, you can continue asking the 12 question about my representation and I'll continue 13 giving you the same answer. 14 representation situations with respect to Mr. Mooney for 15 the past couple of years. 16 think of any specifically that have turned into fruition 17 other than the case right there. 18 vague and unclear on that topic so I'd have to go back 19 and check my records. 20 that I know Mr. Mooney. 21 Q. I've had potential Some of them have -- I can't My memory is a bit It's in that capacity primarily So in other words, if I understand correctly, 22 you represented him in one case, and were the other 23 potential representations that may or not may come to 24 fruition were those litigation matters as well? 25 A. California Deposition Reporters It was primarily litigation matters. There Page: 246 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 248 of 291 Page ID #:1549 1 may have been business dealings, but those were pretty 2 speculative. 3 was litigation or business matters or a hyper between 4 the two, I'd have to check my records to determine what 5 exactly I had to -- my relationship to Mr. Mooney was or 6 the nature of -- or how best to classify the potential 7 representation opportunities. 8 9 Q. But to the exact nature of whether there So what details can you give me about your relationship with Alan Mooney without checking your 10 records? 11 can you do the best you can, please? 12 A. And I recognize it may not be complete, but Sure. I'd be glad to. The -- I first came 13 into contact with Mr. Mooney back -- I would say 2009 14 perhaps, give or take a year. 15 think I can go into too much detail about the specific 16 facts and situation, but he had a litigation matter that 17 was pressing and so I discussed within the litigation 18 matter kind of -- how best to describe it. 19 to describe it. 20 partner was handling the matter. 21 over the years we kept in contact and he has contacted 22 me regarding various matters. 23 client, I socialize with him from time to time. 24 then in the one case that's a matter of public record I 25 represented him. California Deposition Reporters And he was -- I don't The best way I was an associate at a firm and the So I met him and then Like any prospective And Page: 247 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 249 of 291 Page ID #:1550 1 Q. Has he ever hired you to do anything other 2 than the Priceline case or were they all prospective 3 representations that didn't pan out? 4 5 A. You can continue to ask me about my representations of Alan Mooney and I'll continue to -- 6 MR. GIBBS: 7 THE WITNESS: Objection. -- to give the very same answer 8 which is, I would have to check my records to find 9 out -- to determine whether or not I was formally 10 retained with respect to matters that have occurred, 11 potential matter that have occurred over the past three 12 or four years. 13 BY MR. PIETZ: 14 15 16 Q. Have you ever represented Mr. Mooney in a nonlitigation matter? A. You can continue asking me about my past 17 representations of Mr. Mooney and I'll continue to give 18 you the very same answer. 19 see if I was formally retained or formally represented 20 Mr. Mooney in a matter. 21 22 Q. Fair enough. I have to check my record to Seems like we're not getting anywhere. 23 MR. PIETZ: I'll introduce as Exhibit 110 -- 24 and note that I only have this one copy. 25 business records detail for the Minnesota business, California Deposition Reporters This is Page: 248 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 250 of 291 Page ID #:1551 1 MCGIP, LLC. 2 (Whereupon Defendants' Exhibit No. 111 3 4 5 6 was marked for identification.) BY MR. PIETZ: Q. Mr. Hansmeier, can you read me what it says there where it identifies the manager? 7 A. Alan Mooney. 8 Q. And the rest of the information after where it 9 10 11 12 13 14 15 16 17 18 19 says Alan Mooney. A. 80 South 8th Street, #900, Minneapolis, Minnesota, 55402. Q. Could you read me what says under principal executive office if for MCGIP, LLC? A. It identifies 80 South 8th Street, #900, care of the Alpha Law Firm, Minneapolis, Minnesota, 55402. Q. Was this an additional representation of Mr. Mooney? A. Quite clearly not. It's a representation of MCGIP. 20 Q. So what does Mr. Mooney have to do with MCGIP? 21 A. On this record he's listed as the manager. 22 Q. Isn't MCGIP an entity on whose behalf Steele 23 Hansmeier and Prenda Law filed copyright infringement 24 lawsuits? 25 A. California Deposition Reporters Well, certainly not Prenda Law that I'm aware Page: 249 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 251 of 291 Page ID #:1552 1 of. 2 Q. How about the Alpha Law Firm? 3 A. Alpha Law Firm, no. 4 Q. So Steele Hansmeier has never represented 5 MCGIP, LLC in litigation? 6 A. I believe you're making a statement. 7 Q. Maybe I'm misinformed. 8 A. It's a limited liability company. 9 Q. And what was the business of MCGIP? 10 MR. GIBBS: 11 Outside the scope of the deposition notice. 12 Objection. What was MCGIP then? BY MR. PIETZ: 13 Q. I'm asking now for personal knowledge. 14 A. I guess I would have to review my records to 15 find out what the business of MCGIP was. 16 represented them in the past, I would assume that it 17 was -- well, in fact, I think they held copyrights and 18 produce content. 19 20 21 Q. If we Were you ever involved in a copyright infringement lawsuit for MCGIP? A. I would have to check my records. I don't 22 believe I was an attorney of record on a copyright 23 infringement lawsuit for MCGIP, but I believe Steele 24 Hansmeier did file cases on their behalf. 25 check my records. California Deposition Reporters I'd have to It was quite a while ago. So to that Page: 250 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 252 of 291 Page ID #:1553 1 2 3 extent then, yes. Q. Is Alan Mooney the person who executed the petition in St. Clair County, Illinois? 4 A. You'd have to ask Alan Mooney. 5 Q. Returning now to your capacity as a corporate 6 representative. 7 Copyright Group to 6681 Forensic? 8 Why did AF Holdings change from Media MR. GIBBS: 9 facts not in evidence. 10 THE WITNESS: Hold on. 11 Assumes Misstates prior testimony. What item are you referring to just so I can refresh my recollection? 12 13 Objection. MR. PIETZ: I think it's under a few categories. 14 MR. GIBBS: 15 Not in the deposition notice. 16 Objection. BY MR. PIETZ: 17 18 Q. In any event we'll look for it. resorting to the topics -- hold on. 19 No. 11. Without Strike that. So in any event please answer the 20 question. 21 Copyright Group to 6681 Forensics? 22 23 MR. GIBBS: Objection. I don't believe that 11 covers that. 24 25 Why did AF Holdings change from Media THE WITNESS: Sure. I'll answer the question. I guess, you know, looking at No. 11, I don't think that California Deposition Reporters Page: 251 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 253 of 291 Page ID #:1554 1 really -- I would not look at that and say I have to 2 understand why it went from one to the other. 3 can't -- I can't recall anything specifically in the 4 course of preparing for this 30(b)(6) deposition that 5 would have prepared me to answer a question of why they 6 would decide to go with Media Copyright Group versus 7 6681 Forensics. 8 9 10 MR. GIBBS: I It almost seems like a state of mind question. BY MR. PIETZ: 11 Q. I'm asking if AF Holdings had a reason, why it 12 switched from one technical group to the other. 13 very simple question. 14 doesn't know, that's fine. 15 A. It's a If the answer is that AF Holdings Well, the answer is that none of the 16 preparation that I would have done to prepare for this 17 deposition would have -- on any of the noticed topics -- 18 would have led me to investigate why AF Holdings 19 switched from Media Copyright Group, LLC, to 6681 20 Forensics, LLC. 21 22 Q. Is AF Holdings confident in the work that 6681 Forensics does logging IP address is accurate? 23 MR. GIBBS: Objection. 24 What do you mean by that? 25 Vague and ambiguous. /// California Deposition Reporters Page: 252 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 254 of 291 Page ID #:1555 1 BY MR. PIETZ: 2 Q. Go ahead and answer it. 3 A. I'm a bit confused by the question. How do 4 you mean confident? 5 that they're doing a competent job of identifying 6 infringers? 7 Q. 8 9 10 Are you asking whether we believe I mean, is the information accurate? MR. GIBBS: Objection. He only knows what he knows. accurate. 11 Calls for speculation. He doesn't know what's It's kind of a vague question also. THE WITNESS: I can only say that in the 12 course of AF Holdings' existence that we're not aware of 13 any instance where there's been any question or doubt to 14 the validity of the link between the infringing activity 15 and then the IP address and that's primarily what 6681 16 Forensics focuses on. 17 BY MR. PIETZ: 18 Q. Mr. Hansmeier, in preparing for today's 19 deposition, did you speak with anyone other than 20 Mr. Gibbs and Mr. Lutz? 21 A. Yes, I spoke with Mr. Steele. 22 Q. And when was that? 23 A. Some time in the past two, three weeks. 24 Q. Where did that meeting occur? 25 A. Over the phone. California Deposition Reporters Page: 253 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 255 of 291 Page ID #:1556 1 2 Q. phone call? 3 4 And were you in Minnesota when you placed that A. Yeah. I can't remember exactly, but I am pretty sure I was in Minnesota. 5 Q. Where was Mr. Steele? 6 A. Mr. Steele, he's been traveling a lot, so he 7 could have been in a lot of different places, Illinois, 8 Las Vegas or South Beach or Chicago. 9 Q. I'm curious to hear you say South Beach. 10 thought Mr. Steele practiced in Illinois. 11 I reside in Florida? Does he 12 A. He currently resides in Florida, yes. 13 Q. What is Mr. Steele's affiliation with Prenda 14 Law? 15 MR. GIBBS: 16 THE WITNESS: Outside the scope of the deposition notice. 17 Objection. I would say that Mr. Steele -- 18 first of all, I can't possibly know every last aspect of 19 the connection between Mr. Steele and Prenda Law. 20 know that, for example, there's a case pending in the US 21 District Court in the District of Columbia, AF Holdings 22 names Does 1 through 1,058 where Mr. Steele entered an 23 appearance as of counsel to Prenda Law. 24 title. 25 US District Court in the South District of Illinois I do I believe is And I think there's another case pending in the California Deposition Reporters Page: 254 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 256 of 291 Page ID #:1557 1 where Mr. Steele has identified as of counsel to Prenda 2 Law, but I'd have to double check. 3 BY MR. PIETZ: 4 5 6 7 8 9 Q. Do you know if Mr. Steele is currently of counsel to Prenda Law? A. I believe Mr. Steele is labeled as of counsel to Prenda Law in those cases currently. Q. Is Mr. Steele affiliated at all with the Alpha Law Firm? 10 MR. GIBBS: 11 What do you mean by affiliated. 12 Vague and ambiguous. BY MR. PIETZ: 13 Q. Go ahead. 14 A. He is not affiliated with the Alpha Law Group 15 16 17 18 19 20 21 22 {sic}. Q. Has he ever been affiliated with the Alpha Law Group? A. He's never been affiliated with the Alpha Law Group. Q. Has the Alpha Law Group ever compensated John Steele for anything? A. The Alpha Law Firm has never compensated John 23 Steele for anything. 24 there's no such entity as the Alpha Law Group. 25 Q. California Deposition Reporters Although, I should say that Is it Alpha Law Firm? Page: 255 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 257 of 291 Page ID #:1558 1 A. Same answer to all the questions. 2 Q. How about same question for Mr. Duffy. 3 the Alpha Law Firm ever compensated Mr. Duffy for 4 Has anything at all? 5 A. No. 6 Q. Is your understanding -- well, strike that. 7 Can you explain to me how it is that Steele 8 Hansmeier became Prenda Law? 9 accurate? Let me back up. Is that Is Prenda the successor of Steele Hansmeier? 10 A. No. 11 Q. So can you explain to me how it was that 12 13 Steele Hansmeier was wound down and Prenda was formed? A. Well, to answer your question specifically -- 14 although, I don't know if this is the thrust of your 15 question. 16 was accomplished through filing with the Secretary of 17 State of a notice of dissolution filed by, I believe, 18 articles of dissolution. 19 part of your question. 20 Q. The process of Steele Hansmeier winding down I don't remember the second So Steele Hansmeier was formally dissolved and 21 then as soon as you dissolved Steele Hansmeier, did you 22 at that point work for Prenda Law at all? 23 A. Not as an employee, no. 24 Q. In what capacity? 25 A. Part of my role -- I guess I had no formal California Deposition Reporters Page: 256 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 258 of 291 Page ID #:1559 1 affiliation with Prenda Law. 2 point to any specific affiliation. 3 to aid Prenda Law in transitioning from, you know, 4 Steele Hansmeier operating the cases and whatnot. 5 Prenda Law was appearing in a lot of the cases, so 6 there's a natural, you know, kind of aid them, help them 7 facilitate the transfer. 8 9 10 Q. I don't believe I can Part of it we wanted So would it be a correct characterization that Prenda Law took over Steele Hansmeier cases? A. Well, the precise characterization, of course, 11 is that they filed substitutions of counsel in cases 12 that Steele Hansmeier was counsel, I believe, across the 13 board. 14 Q. And what happened to the money? Presumably 15 there was money in trust at Steele Hansmeier. 16 money liquidated out of Steele Hansmeier accounts and 17 paid into new Prenda accounts? 18 19 A. Was that I was not part of the handling of the financial part of the -- 20 Q. Transition, if you will; is that correct? 21 A. It's your word, but I understand what you're 22 23 24 25 getting at. Q. So who was responsible for handling the financial aspect of the transition? A. California Deposition Reporters I believe Mr. Steele would have been in charge Page: 257 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 259 of 291 Page ID #:1560 1 2 3 4 5 6 of managing -- the handling of funds. Q. And was Mr. Duffy also involved in the transition of Steele Hansmeier cases to Prenda cases? A. I believe he was the attorney who appeared as counsel of record in those cases. Q. What about Mr. Gibbs. I note that he appeared 7 on the various pleadings as of counsel to Steele 8 Hansmeier. 9 Did you hire Mr. Gibbs to Steele Hansmeier? 10 MR. GIBBS: Objection. Outside the scope of the -- 11 THE WITNESS: I would have to check the 12 records with respect to Mr. Gibbs' relationship with 13 Steele Hansmeier. 14 BY MR. PIETZ: 15 Q. Well, I'll represent to you that on various 16 pleadings he listed himself as of counsel to Steele 17 Hansmeier. 18 A. Does that mesh with your relationship? Again, I don't want to make any specific 19 statements regarding Mr. Gibbs' with Steele Hansmeier. 20 I assume that if he labeled something on a pleading, 21 that it was accurate. 22 Q. So while you were one of the two named 23 partners in Steele Hansmeier, do you personally recall 24 Mr. Gibbs doing work for the firm? 25 A. California Deposition Reporters Again, you're asking me to characterize the Page: 258 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 260 of 291 Page ID #:1561 1 nature of his relationship with Steele Hansmeier. 2 every time you ask it -- like a few other topics 3 today -- I'm sure you're going to come back and ask the 4 same question many times. 5 again. 6 7 8 9 For Once and again and again and I'm sorry, Mr. Pietz, is my deposition testimony funny to you? Q. No, I'll just note that it's not quite the same question. 10 A. Mr. Pietz, this is a serious matter. 11 Q. I agree. 12 A. You and your client and you personally 13 Mr. Pietz nationwide, have accused AF Holdings of fraud 14 and of criminal activity. 15 word criminal in a few of your pleadings. 16 respect, I don't believe that an officer of the court 17 should take such humor and take such levity with respect 18 to matters that are of such gravity and importance. 19 if this is a comedy show to you, we can go that route. 20 But if this is something you want to take seriously, we 21 can go that route too. 22 Q. I believe you've used the With all due So I'll note that I don't want to get drawn into 23 a long back and forth on this. 24 that I do indeed take the allegations of fraud in Prenda 25 cases very seriously. California Deposition Reporters I'll just assure you I anticipate and look forward to Page: 259 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 261 of 291 Page ID #:1562 1 getting to the bottom of it. 2 MR. PIETZ: In any event here's what I might 3 propose. 4 turn it over to Mr. Gibbs for redirect. 5 Nick, do you have a few things? 6 for a moment. Unless Nick has anything else, maybe we'll 7 MR. PIETZ: Let's go off the record (Off the record.) 8 I'm sorry, 9 of AF Holdings. Back on the record in the 30(b)(6) I will mark as the Exhibit 112 and hand 10 the deponent a copy of the declaration prepared by 11 Mr. Ranallo. 12 I'm going to ask Mr. Ranallo to play the recording. 13 It's an audio recording for the deponent. 14 if you would, please. 15 And refer the deponent to paragraph 5. Mr. Ranallo (Whereupon, a recording was played in 16 reference to Exhibit 112, bullet point 17 5, of a February 8th voice mail 18 recording.) 19 BY MR. PIETZ: 20 Q. Is that Mark Lutz? 21 A. Well, if I don't recognize the voice that's on 22 the voice mail, I can't make an identification of who it 23 is. 24 25 Q. How many times would you say you have spoken to Mr. Mark Lutz in the course of your life? California Deposition Reporters Page: 260 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 262 of 291 Page ID #:1563 1 A. Too many to count. 2 Q. How many times would you say you've had phone 3 calls with Mark Lutz? 4 5 A. I can't answer the question, but several times. 6 Q. Several or lots? 7 A. I would say several to mean many times. 8 Q. And you're telling me that you can't 9 10 definitively say that the voice we just heard is Mark Lutz? 11 A. That's correct. 12 Q. Who might it be if it's not Mr. Lutz? 13 A. I guess anyone in the world. 14 Q. Well, I would note for the record that it's 15 somebody calling the defendant in this case -- calling 16 the defendant's father in this case, citing the Prenda 17 Law reference number for this case and discussing this 18 case. 19 not Mr. Lutz? 20 21 So I would ask again. A. Who might that be if it's You're asking me to speculate as to the identity of the person. I can't tell you who it is. 22 Q. Is it Mr. Gibbs? 23 A. I don't recognize the voice. 24 25 I can't identify the person on the call. Q. California Deposition Reporters How many times have you spoken with Mr. Gibbs Page: 261 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 263 of 291 Page ID #:1564 1 in the course of your life? 2 A. Many times. 3 Q. Is the voice on the recording Paul Duffy? 4 A. I can't identify the individual who is on the 5 6 7 phone call. Q. How many times have you spoken with Paul Duffy in the course of your life? 8 A. Many times. 9 Q. Is it your brother, Peter Hansmeier? 10 A. I can't identify the individual on the phone 11 12 recording and I've spoken to my brother many times. Q. You're telling me as you sit here in that 13 chair that you can't tell me whether the voice message 14 you just heard was your brother; is that correct? 15 16 17 A. That's correct. I can't identify the person who's on the voice recording. Q. Fair enough. Does the content of that message 18 sound like the kind of thing that Mr. Lutz says when he 19 calls people about AF Holdings' litigation? 20 21 MR. GIBBS: Vague and ambiguous. Also calls for speculation. 22 23 Objection. THE WITNESS: I don't know what he does when he calls people in AF Holdings' litigation. 24 25 California Deposition Reporters Page: 262 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 264 of 291 Page ID #:1565 1 2 3 4 5 FURTHER EXAMINATION BY MR. RANALLO Q. Does have AF Holdings have any intention of amending the complaint to add any other individuals? A. I don't know what AF Holdings' intention is at this time in this litigation. 6 Q. Whose decision is that then? 7 A. Well, it's Mr. Lutzs' decision. 8 Q. Would you say that your investigation 9 10 11 12 13 14 15 16 17 regarding the infringer in this case identified Jovino Navasca? A. Our investigation to date has made it pretty clear that Joe Navasca is the infringer. Q. So is it AF Holdings' position then that they do not believe that Jovino Navasca is the infringer? A. I believe AF Holdings' position is that Joe Navasca is the infringer. Q. Can you explain to me why someone would be 18 calling from Anti-Piracy Law Group in connection with 19 this case? 20 21 22 23 24 25 MR. GIBBS: Calls for speculation. BY MR. RANALLO: Q. Is Anti-Piracy Law Group affiliated with this case in any way? A. documents. I guess I'd have to review the specific California Deposition Reporters Obviously, there's some relationship if -Page: 263 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 265 of 291 Page ID #:1566 1 let me refer to the declaration -- if Anti-Piracy Law 2 Group is calling Jovino. 3 4 5 Q. So this call is in relation to this litigation? A. All I know is that a person identified who 6 they called as Jovino. 7 Jovino, someone related to this case. 8 there's several Jovinos out there in the world. 9 know what his reference number is, if that's the Now, obviously, there's a But I assume I don't 10 reference number he was assigned. 11 of a record here that's missing to make that 12 determination. 13 is this guy's dad who was called and that's where you 14 got the file from, then I'll take your word as an 15 officer of the court that's the case. 16 was the question? 17 18 19 Q. There's quite a bit If you're going to represent that this I'm sorry. What Does AF Holdings intend to move forward and modify the complaint to add Mr. Jovino Navasca's name? A. Well, I think that depends on facts and 20 circumstances that could be revealed as the case 21 proceeds forward. 22 it seems like there's an undertaking issue that may 23 prevent any case from going forward. 24 25 Q. I would say, though, that right now Let's just go ahead and reask that question. Does AF Holdings -- on February 8th, did AF Holdings California Deposition Reporters Page: 264 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 266 of 291 Page ID #:1567 1 have any intention of moving forward and modifying the 2 compliant to add Jovino Navasca? 3 MR. GIBBS: 4 THE WITNESS: Asked and answered. You know, I guess I just refer 5 back to my prior answers. 6 BY MR. RANALLO: 7 Q. Could you say yes or no please whether as of 8 February 8th, to your knowledge as an AF Holdings' 9 corporate representative here, on February 8th, did AF 10 Holdings intend to move forward and modify the complaint 11 to add Jovino Navasca's name as a defendant? 12 MR. GIBBS: Objection. Compound question and 13 also he's already talked about this. 14 stated on the record. It's already been 15 MR. PIETZ: 16 THE WITNESS: Asked and answered. You can go ahead and answer it. I would have to know what the 17 timeline was with respect to the undertaking issue. 18 the undertaking issue -- did Judge Chen enter his 19 undertaking order prior to February 8th in your 20 recollection? 21 BY MR. RANALLO: Was 22 Q. Yes. 23 A. At that point -- I guess, you know, the bottom 24 line is that, you know, AF Holdings' general approach is 25 to stay flexible with respect to, you know, who to name California Deposition Reporters Page: 265 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 267 of 291 Page ID #:1568 1 and what to do in a case depending on the facts and 2 circumstance as they occur. 3 there's the undertaking issue, which may make it 4 prohibitively difficult to proceed forward with the case 5 and then that would pretty much resolve the case right 6 there. 7 would entertain a motion for reconsideration, whether 8 that's something that happens or not, whether that's a 9 plausible result or not, is something that's a little 10 For example, in this case However, I do believe Judge Chen indicated he bit beyond my expertise. 11 At this point there's certainly some potential 12 liability for Jovino. 13 was aiding or assisting someone else doing the 14 infringement, maybe there's a claim. 15 whether or not we were specifically planning to move 16 forward and name Jovino as a defendant in this case, but 17 I know there's certainly a lot of -- his relationship to 18 this case isn't resolved until the case is resolved. 19 think that is pretty obvious. 20 Q. If he's the account holder and he I can't say I Is it AF Holdings' standard practice to call 21 individuals who they do not necessarily intend to name 22 in the complaint and attempt to get settlements from 23 them? 24 25 MR. GIBBS: Objection. Compound. Objection speculation. California Deposition Reporters Page: 266 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 268 of 291 Page ID #:1569 1 THE WITNESS: I would say that AF Holdings 2 does not have a standard practice in its cases. 3 that the popular opinion among some members of the 4 Internet, that this is just a one-size fits all thing, 5 that there's not much nuance in the cases and that it's 6 not something where -- or that it's something that can 7 be reduced to a simple straightforward formula, but I 8 can tell you from the other side of the argument that 9 these cases are -- they're all individual, they're all I know 10 unique. 11 Holdings to do anything in any case is not a very -- 12 it's a great oversimplification that loses a lot of the 13 truth. This idea that it's a standard practice of AF 14 So to answer your question, I would say, no 15 it's not a standard practice of AF Holdings to do the 16 conduct that you described in your question. 17 Q. Based on that answer would you say then, if AF 18 Holdings or its agents are calling and basically 19 saying -- strike that. 20 In light of your last answer, if AF Holdings 21 did indeed call Jovino Navasca on February 8 and say 22 that they intend to move forward and modify the 23 complaint to add his name, is it your position they 24 would have some factual basis for doing so? 25 California Deposition Reporters MR. GIBBS: Objection. Calls for speculation. Page: 267 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 269 of 291 Page ID #:1570 1 Objection. 2 Compound question. THE WITNESS: To clarify your question, would 3 they have the basis for calling him or would they have 4 the basis for moving forward and amending the complaint 5 to add his name. 6 BY MR. RANALLO: 7 8 9 Q. Moving forward to modify the complaint to add his name. A. Sure. We would have a factual basis prior to 10 amending some -- amending the complaint to add someone's 11 name to it. 12 Q. If you called him on February 8 and said that 13 you intended to move forward and modify the complaint, 14 is it your position that there is some factual 15 background to indicate that he might be liable for 16 something in this case? 17 A. See, now my concern is you had me answer the 18 question of whether -- if we actually went ahead and 19 amended the complaint would we have a factual basis for 20 doing so. 21 about this notion of calling him. 22 want me clarify my answer to your prior question to 23 actually fit the circumstances of what you're trying to 24 ask about now? 25 Q. California Deposition Reporters Now, you're changing what you're asking me Which one? Do you You previously stated that it's not AF Page: 268 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 270 of 291 Page ID #:1571 1 Holdings' policy to call individuals and threaten 2 settlement if they don't have a factual basis for 3 believing they're infringer; is that true? 4 5 MR. GIBBS: No. Objection. Misstates prior testimony. 6 THE WITNESS: Why you don't make that 7 statement in the form of a question and I can answer the 8 question. 9 BY MR. RANALLO: 10 Q. Is it AF Holdings' policy before threatening 11 someone with a copyright lawsuit to have some factual 12 basis to support such a threat? 13 14 MR. GIBBS: Objection. Mischaracterizes prior testimony. 15 THE WITNESS: It would be AF Holdings' policy 16 to -- it's not going to move forward and amend the 17 complaint and name someone without having a factual 18 basis for doing so. 19 threat -- I mean, I would have to read the exact text. 20 I mean, I guess you're reading this as a threat. 21 reading him as making a factual statement as, Prior to 22 moving forward and modifying the complaint to add your 23 name, we would want to give you a quick call. 24 is -- to interpret this call, this could have been a 25 fact-finding call. California Deposition Reporters If you want to interpret this as a I'm So this You may have characterized it as a Page: 269 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 271 of 291 Page ID #:1572 1 threat. 2 I would say that we always like to do a fact-finding 3 call to get more facts to determine whether it would be 4 appropriate to name someone in a complaint. I would characterize it as a fact-finding call. 5 FURTHER EXAMINATION BY MR. PIETZ 6 Q. Did you do a fact-finding call in this case? 7 A. I believe we did do a fact-finding call. I 8 believe we talked about that extensively in terms of the 9 identity -- the people who could have done it. 10 people in the world who could have done it. 11 The that we covered that exhaustively today. 12 Q. I think Well, I know you testified earlier that 13 somebody had called and left the Navasca home a message. 14 My question is whether that constitutes a fact-finding 15 call, calling up and leaving a message without a 16 response. 17 A. Is that a fact-finding -First of all, you are very loose of the facts. 18 My testimony was not that they left a message. 19 testimony was that they gave a call and I wasn't aware 20 if anyone picked up. 21 don't know. My Was there a message or not, I 22 Q. I stand corrected. 23 A. Second, I think I explained pretty That's a good point. 24 exhaustively to you that there are multiple avenues of 25 inquiry. California Deposition Reporters We can reopen this whole thing up if you want. Page: 270 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 272 of 291 Page ID #:1573 1 There are multiple avenues of inquiry that can go into 2 an investigation. 3 attempt to use, not every method is going to be 4 successful in every instance. 5 reach out and talk to someone is a part of the process. 6 Is it always successful, do people always answer, of 7 course not. 8 9 10 Q. A call is one of the methods that we Certainly attempting to But in any event, a fact-finding call means a phone call whether anybody picks up or not? A. If you want to -- if that's what you're 11 personally defining as a fact-finding call, that's your 12 definition. 13 in one way or the other. 14 Q. I'm not going to define a fact-finding call I'm just trying to clarify what you meant when 15 you just said a moment ago that we always like to 16 attempt a fact-finding call. 17 clarify is whether that means that -- in your 18 fact-finding call -- you actually try to get a response 19 from somebody or if just calling constitutes as far as 20 AF Holdings is concerned a fact-finding call. And what I'm trying to 21 MR. GIBBS: 22 a compound question. 23 mentioned that he's trying to make a fact-finding call. 24 And then he's saying -- and then you go on to say -- 25 California Deposition Reporters Objection. First of all, this is MR. RANALLO: But we're talking about -- he just This is a speaking objection. Page: 271 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 273 of 291 Page ID #:1574 1 State your grounds for the objection and we'll move on. 2 MR. GIBBS: Objection. Compound. 3 not a clear-cut question. 4 Objection ambiguous, however, you want to put it. 5 THE WITNESS: Objection. Vague and My answer to your question would 6 be that you're mischaracterizing what I was saying. 7 When I said we always like to attempt a fact-finding 8 call I was simply making the point that in that case to 9 do a fact-finding call is not uncommon and it's -- you 10 know, if it yielded information, then that would be, you 11 know, better grounds for litigation, a better basis, 12 just improving the whole picture. 13 BY MR. PIETZ: 14 Q. Is it AF Holdings' policy to only move forward 15 if the fact-finding call results in obtaining some kind 16 of information? 17 A. I can restate AF Holdings' corporate policy 18 for investigation again and again and again. 19 have to do it again and again and again. 20 policy is that we try many avenues of gaining as much 21 information as possible before moving forward. 22 are able to get enough information to move forward, then 23 we move forward. 24 forward -- or if we don't gather enough information to 25 move forward, then we don't move forward. California Deposition Reporters We may The corporate If we If we're aren't able to move Page: 272 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 274 of 291 Page ID #:1575 1 And the notion that someone has to always pick 2 up, would not be a very good corporate policy because, 3 frankly, no one would ever pick up and if every 4 infringer who would never pick up would just never be 5 sued because they just decided not to pick up the phone. 6 Q. Mr. Hansmeier, last serious of question from 7 our side as least at this time. 8 deposition notice and the copyright assignment agreement 9 attached thereto as Exhibit A. Referring back to the What compensation was 10 paid to Heartbreaker Digital, LLC in this copyright 11 assignment agreement? 12 13 14 A. What topic are you referring on the subjects of examination? Q. It's a number of topics which include 15 distributions of revenues, as well as -- there's 16 something about interests in the litigation, so -- 17 18 A. Can you refer to one specifically so I can refresh my recollection? 19 MR. GIBBS: 20 the deposition noticed topics. 21 BY MR. PIETZ: 22 Q. Objection. Outside the scope of Well, I'll tell you what, let's do this based 23 on your personal knowledge now and then after we have a 24 topic for you, we'll come back to AF Holdings. 25 California Deposition Reporters To the best of your personal knowledge has Page: 273 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 275 of 291 Page ID #:1576 1 Heartbreaker Digital been paid any compensation in 2 connection with the copyright assignment agreement? 3 A. What I know about this particular assignment 4 it there was consideration and the precise nature of it 5 I'm not clear. 6 7 8 9 10 Q. When AF Holdings sells cases is any compensation paid to Heartbreaker Digital? A. No. The sole nature of the assignment between Heartbreaker Digital and AF Holdings is set forth here. Q. So AF Holdings has no interest whatsoever in 11 the BitTorrent litigation that AF Holdings brings on 12 copyrights -- strike that. 13 So to ask it again. Heartbreaker Digital, LLC 14 has no pecuniary interest or any other kind of interest 15 in the litigation that AF Holdings brings on the 16 copyrighted issue in this agreement? 17 A. Yes. This agreement and similar assignment 18 agreements are the only agreements between AF Holdings 19 and Heartbreaker Digital, so they don't have, for 20 example, equity in AF Holdings. 21 Q. Settlements are achieved -- there's no portion 22 of the settlement proceeds that would be paid to 23 Heartbreaker Digital? 24 A. That's correct. 25 Q. So why is it that Heartbreaker Digital entered California Deposition Reporters Page: 274 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 276 of 291 Page ID #:1577 1 into this agreement then? 2 3 MR. GIBBS: What's the consideration? Objection. This is same theme we've been going over for the last -- 4 THE WITNESS: 5 MR. GIBBS: 6 THE WITNESS: You can ask this question. -- for the last seven hours. You can ask this question a 7 dozen times. 8 that Heartbreaker Digital receives is not a noticed 9 topic. 10 I do note that the -- there may have been a document request. 11 I don't know. MR. GIBBS: 12 13 The precise nature of the consideration That's not an issue. FURTHER EXAMINATION BY MR. RANALLO Q. Let me ask you this. You previously stated 14 that AF Holdings' BitTorrent revenue was used for 15 lawsuits going forward or past, I guess, costs for past 16 lawsuits; is that correct? 17 18 MR. GIBBS: 21 Mischaracterizes former testimony. 19 20 Objection. THE WITNESS: Generally speaking, yes. BY MR. RANALLO: Q. Does any of AF Holdings' BitTorrent litigation 22 revenue go towards securing future assignments or 23 additional assignments? 24 MR. GIBBS: 25 THE WITNESS: California Deposition Reporters Objection. Asked and answered. I guess I can't speculate what Page: 275 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 277 of 291 Page ID #:1578 1 will be done with the proceeds of the AF Holdings' 2 BitTorrent revenue. 3 BY MR. RANALLO: 4 Q. Were any of the AF Holdings' BitTorrent 5 revenues from the initial round of suits prior to the 6 assignment in this case, were any of those revenues used 7 to acquire the assignment in this case? 8 A. Not that I'm aware of. 9 Q. Are you aware whether money was paid for the 10 11 assignment in this case? A. 12 MR. GIBBS: 13 14 You can ask me the -Objection. Asked and answered. FURTHER EXAMINATION BY MR. PIETZ Q. I'm going jump in here and note for the record 15 that Topic No. 1 on the deposition notice is, 16 Circumstances surrounding the execution of the 17 assignment attached hereto as Exhibit A and Topic No. 12 18 is, Financial, in all caps, and contractual 19 relationships between AF Holdings and Heartbreaker. 20 my question to you is what was the consideration 21 underlying the copyright assignment agreement attached 22 to the Exhibit A to the complaint? 23 24 MR. GIBBS: Objection. So Outside the scope of the noticed topics in the deposition subpoena. 25 California Deposition Reporters THE WITNESS: I can tell you that the sole Page: 276 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 278 of 291 Page ID #:1579 1 financial contractual relationship between AF Holdings 2 and Heartbreaker Productions -- which isn't even the -- 3 I guess I should modify any answers regarding 4 Heartbreaker this whole time if it relates to -- because 5 that's not even the entity -- that's the assignor on 6 this thing. 7 BY MR. PIETZ: 8 9 Q. This agreement contains the sole -- if it's not the sole agreement as to the financial arrangement 10 between AF Holdings and Heartbreaker, point me to the 11 part of the agreement that deals with the financial 12 relationship. 13 any indication anywhere in this agreement that there's 14 any kind of consideration paid. 15 testified earlier that some kind of consideration was 16 indeed paid; is that correct? Because I don't see a dollar figure or 17 MR. GIBBS: 18 THE WITNESS: 19 20 21 Objection. And I think you Compound question. What is your question? BY MR. PIETZ: Q. What money was Heartbreaker paid in connection with the copyright assignment agreement? 22 MR. GIBBS: 23 THE WITNESS: Asked and answered. Objection. I think this is the sixth time 24 you've asked the exact same question and I will refer 25 you again -- and again I will note for the record that California Deposition Reporters Page: 277 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 279 of 291 Page ID #:1580 1 your noticed topic doesn't even have the correct entity 2 identified on the assignment agreement. 3 identified in the noticed topics is Heartbreaker 4 Productions. 5 agreement is Heartbreaker Digital, LLC. 6 BY MR. PIETZ: 7 Q. The entity The entity identified in the assignment Mr. Hansmeier, did that confuse such that you 8 spent time preparing to answer the question for 9 Heartbreaker Productions? 10 A. Yes, I find it very confusing that 11 Heartbreaker Productions is misidentified and it's 12 extremely frustrating to me that I would spend time 13 preparing on a variety Of Heartbreaker entities and then 14 find out that not even the correct one is identified in 15 the notice of deposition. 16 very confusing. It's very frustrating and 17 Q. 18 frustration. 19 until I get what I deem is an appropriate answer from a 20 30(b)(6) -- 21 Mr. Hansmeier, I can sympathize with your But I'm going to keep asking the question MR. GIBBS: No. It doesn't work like that. 22 You don't keep asking a question until you get the 23 answer that you want. 24 25 MR. PIETZ: Well, I'm going to keep asking the question different ways until -- California Deposition Reporters Page: 278 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 280 of 291 Page ID #:1581 1 MR. GIBBS: You can do whatever you want. 2 MR. PIETZ: -- I get an appropriate answer. 3 4 BY MR. PIETZ: Q. You said earlier that the sole financial and 5 other arrangement between Heartbreaker and AF Holdings 6 was memorialized in this agreement. 7 financial about this agreement. 8 relationship? 9 10 MR. GIBBS: Again. What's the financial Objection. Asked and answered about 20 times now. 11 THE WITNESS: 12 MR. GIBBS: 13 There's nothing I think -You're badgering him at this point. 14 THE WITNESS: I will state for the record that 15 I'm beginning to feel badgered. 16 answered your question I want to say about seven or 17 eight times now. 18 different way. 19 over and over again, for the ninth time now, although 20 the record will reflect how many times I've actually 21 been asked this. 22 I feel like I've And you're really not asking it in a You're just asking the same question The agreement stands on its own. It says for 23 good and valuable consideration the receipts and 24 sufficiency of which are hereby acknowledged. 25 agrees as follows. California Deposition Reporters The party And I'm also testifying that this is Page: 279 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 281 of 291 Page ID #:1582 1 the sole -- this and the other assignment agreement 2 relating to another work -- is the sole -- and I'm 3 giving you the benefit of the doubt here that you 4 actually meant to put the correct entity here in the 5 30(b)(6) deposition notice -- is the sole financial and 6 contractual relationship between AF Holdings and 7 Heartbreaker Productions Inc. 8 9 10 MR. GIBBS: deposition. MR. PIETZ: shortly. MR. GIBBS: MR. PIETZ: Well, in any event I was hoping to get a straight answer on this question. 17 18 I think that's what you said about an hour ago. 15 16 Well, in any event we'll be done However -- 13 14 I think also we're approaching the seven-hour mark on this 11 12 Hold on a second. MR. GIBBS: He just gave you a bunch of answers -- 19 MR. PIETZ: Here's the bottom line -- 20 MR. GIBBS: It's just not the answer you want 21 and therefore you're not accepting it. 22 MR. PIETZ: Here's the bottom line and I don't 23 want to get into a long colloquy on this. 24 the money -- 25 California Deposition Reporters MR. GIBBS: I view that We don't need to hear your views. Page: 280 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 282 of 291 Page ID #:1583 1 MR. PIETZ: -- the money that AF Holdings paid 2 to Heartbreaker as a material issue and I'm not getting 3 a straight answer. 4 not answering the question about the financial 5 relationship between those two entities because it's not 6 properly noticed, then I want you to say that right now. 7 Alternatively, if your position is that there is no 8 relationship other than what's on this agreement and 9 what that means is that no money was paid because it's And if your position is that you're 10 not memorialized in this agreement, then AF Holdings 11 needs to stand on that answer. 12 MR. GIBBS: 13 Mischaracterization of what's in the assignment agreement, period. 14 MR. PIETZ: Objection. Here's the bottom line. You can 15 stand on your objection that it's not correctly noticed 16 and not answer is the question or you can say that this 17 is the whole agreement and that there's no financial 18 relationship other than what's in this agreement. 19 MR. GIBBS: You're forcing him into one or two 20 situations and he's not going to be forced into one or 21 two situations. 22 MR. PIETZ: This my last opportunity for a 23 straight answer on the question and this will be it and 24 if the answer not right, I'm going to suspend this 25 deposition and we're going to get the court involved. California Deposition Reporters Page: 281 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 283 of 291 Page ID #:1584 1 Last chance. 2 3 MR. GIBBS: Last chance. You have about two minutes here left in this deposition by the way, just FYI. 4 5 All right. MR. PIETZ: In any event it's one of the more important questions, so -- 6 MR. GIBBS: 7 point. 8 You're badgering him at this BY MR. PIETZ: 9 10 11 Q. Last chance. What's the financial relationship between AF Holdings and Heartbreaker? A. For the last time and I will state for the 12 record that I have felt very badgered here and I feel 13 very flustered. 14 15 I would respectively object to -- MR. GIBBS: Mr. Ranallo, smiling about this whole thing -- 16 THE WITNESS: And Mr. Ranallo -- I would note 17 for the record that Mr. Ranallo just sneered and grinned 18 and he's continuing to sneer and grin and I believe he's 19 behaved very inappropriately and I believe Mr. Pietz -- 20 although in this particular area has been deeply 21 disconcerting and distressing for my testimony. 22 I will say again that this is -- this 23 agreement constitutes the financial and contractual 24 relationship between AF Holdings and Heartbreaker 25 Digital, LLC with respect to this assignment. California Deposition Reporters Page: 282 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 284 of 291 Page ID #:1585 1 BY MR. PIETZ: 2 Q. I'm going to note for the record one final 3 time that this agreement does not mention any money 4 being paid and ask this final question. 5 MR. GIBBS: Was there any. He already -- he's been asked this 6 question about 20 times. 7 BY MR. PIETZ: 8 9 Q. He hasn't answer the simple question. Money paid, yes or no? 10 A. This -- 11 MR. GIBBS: 12 THE WITNESS: 13 MR. GIBBS: 14 He answered it already. He answered the question. To the extent -- a yes or no question. He doesn't have to be forced into 15 THE WITNESS: He can explain his answer. I'm really surprised that this 16 is so difficult of a answer for you to accept. 17 the deal right here. 18 deal. 19 relationship between AF Holdings and Heartbreaker, LLC 20 with respect to the assignment. 21 be more clear and more straightforward. 22 fact that you don't like the answer, I don't know what 23 to do about it. This the full deal, the whole This is the financial and contractual 24 25 This is MR. GIBBS: And the simple We started this deposition at 10:00 o'clock in the morning. California Deposition Reporters That answer could not It is 6:00 p.m. We took Page: 283 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 285 of 291 Page ID #:1586 1 less than an hour-long lunch. 2 seven hours at this point. 3 4 MR. PIETZ: We've gone basically over So how -- Let's go off the record and perhaps we can work out a resolution here. 5 (Off the record at 6:00 p.m. and back on 6 the record at 6:03 p.m.) 7 FURTHER EXAMINATION BY MR. RANALLO 8 9 10 11 Q. Back on the record. Does AF Holdings maintain financial records of payments made for assignment agreements? A. It maintains financial records. 12 MR. GIBBS: 13 THE WITNESS: Vague and ambiguous. Sure. Objection. To the extent a payment 14 was made it would keep the record. 15 BY MR. RANALLO: 16 Q. So if any payment was made for the 17 assignment -- as the good and valuable consideration 18 recited in the assignment -- AF Holdings would have a 19 record of that? 20 A. Yes. 21 22 23 FURTHER EXAMINATION BY MR. PIETZ Q. production three days from now? 24 25 Would those records be produced in a document MR. GIBBS: conclusion. California Deposition Reporters First of all, objection. Legal I think we can talk about that later. But Page: 284 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 286 of 291 Page ID #:1587 1 there's an objection based on the fact that I was -- I 2 took the deposition. 3 that obligation under this deposition. 4 separate document request, just to let you know. 5 MR. PIETZ: We've already been released from That was not a I'm just going to note for the 6 record that if the problem here is that the deponent 7 doesn't know the financial relationship and the deponent 8 is willing to supplement that information with the 9 document disclosure that comes in three days, the 10 defendants are amenable to that. 11 MR. GIBBS: Hold on a second. 12 can do that with an interrogatory. 13 He just said he that? 14 15 MR. PIETZ: it. What is wrong with Thirty days is what's wrong with We noticed a deposition on the topic today -- 16 MR. GIBBS: No, you didn't. The document 17 request was not a proper document request in and of 18 itself. It was not a topic. 19 MR. PIETZ: I'm proposing one of two solutions 20 here. 21 willing to explain the financial arrangement with the 22 document request three days from now, that's fine. 23 We'll agree to wind this deposition down today. 24 the other hand, AF Holdings is standing on its objection 25 that disclosing the financial arrangement is not a If the deponent -- rather if AF Holdings is California Deposition Reporters If on Page: 285 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 287 of 291 Page ID #:1588 1 proper subject because it wasn't properly noticed today, 2 then I'm suspending the deposition and we're going to 3 get the court involved about whether AF Holdings should 4 be compelled to answer that question. 5 two options and it's your choice. It's one of the 6 MR. GIBBS: It's not one of the two options. 7 MR. PIETZ: So which is it? I'm asking 8 counsel, I'm asking AF Holdings and I'll ask my 9 co-counsel if he concurs -- 10 MR. GIBBS: You have no more minutes left in 11 this deposition, so you're basically holding us captive 12 here until you get this answer from him. 13 ridiculous. This is 14 MR. PIETZ: 15 THE WITNESS: 16 MR. PIETZ: 17 (Off the record at 6:06 p.m. and back on 18 That's not true. Could we go off the record? Sure. the record at 6:09 p.m.) 19 MR. PIETZ: We're back on the record. I think 20 we had a proposal on the issue that had held us up here 21 that's amenable to both sides. 22 23 Mr. Hansmeier, why don't you outline it as you saw it? 24 25 THE WITNESS: I'll have my attorney outline it. California Deposition Reporters Page: 286 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 288 of 291 Page ID #:1589 1 MR. GIBBS: When you get us an interrogatory 2 as to this issue of whether money was paid to 3 Heartbreaker, we'll have two weeks to answer that 4 interrogatory. 5 That's the stipulation. MR. PIETZ: And you're agreeing to doing some 6 kind of substantive response about the money, it's just 7 not going to be objections? 8 9 MR. GIBBS: What do you consider a substantive MR. PIETZ: X dollars were paid is a response? 10 11 substantive response to the question that we're going to 12 be asking. 13 14 MR. GIBBS: response, we will give you that substantive response. 15 16 If we can give you a substantive MR. PIETZ: Fair enough. So stipulated. At least as far as we're concerned. 17 Brett, I note that you were raising issues 18 about time. 19 certainly amenable to powering through. 20 Would you like to do redirect? MR. GIBBS: Hold on a second. I'm If I don't do 21 redirect, are you opening up the floor for me to do 22 redirect or not? 23 cross-examine him again, but if I don't do it, you're 24 shut down from that. 25 point? California Deposition Reporters If I do redirect, you can go back and Want do you want to do at this Page: 287 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 289 of 291 Page ID #:1590 1 MR. PIETZ: 2 right now. 3 I'm fine ending the deposition like to do. It's really your choice in what you would 4 MR. RANALLO: 5 MR. GIBBS: Good with me. I just want to make sure that I 6 have the right to review this within 30 days according 7 the rules. 8 9 MR. RANALLO: And if I could also go ahead on the record and serve Mr. Hansmeier with a copy of the 10 complaint, again, summons and complaint against AF 11 Holdings by Alan Cooper. 12 THE WITNESS: On the record I would like to 13 note that I'm not authorized to accept service on behalf 14 of any of these entities and that Attorney Ranallo has 15 been notified of this fact and he should notify Attorney 16 Godfread on whose behalf he is serving this of this fact 17 and if he does not do so we will make a motion -- I 18 assume the plaintiffs in that case will make a motion 19 to -- make Mr. Ranallo's fraud {sic} if goes to that -- 20 notice the court. 21 22 MR. PIETZ: Can we do a stipulation of relieving the court reporter of her duties. 23 MR. GIBBS: 24 THE REPORTER: 25 MR. PIETZ: California Deposition Reporters That's fine. Would you like to order? The defendant will take one Page: 288 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 290 of 291 Page ID #:1591 1 electronic copy and paper. 2 MR. GIBBS: 3 (Whereupon, the deposition was 4 adjourned at 6:15 p.m.) We will as well. Just electronic. 5 6 I declare under penalty of perjury that the 7 foregoing is true and correct. 8 ________________, California, this _______ day of 9 ___________, 2013. Subscribed at 10 11 12 13 __________________________ 14 PAUL HANSMEIER 15 16 17 18 19 20 21 22 23 24 25 California Deposition Reporters Page: 289 Case 2:12-cv-08333-ODW-JC Document 69-1 Filed 03/06/13 Page 291 of 291 Page ID #:1592 1 CERTIFICATE OF REPORTER 2 3 I, ANGIE M. MATERAZZI, a Certified Shorthand 4 Reporter, hereby certify that the witness in the 5 foregoing deposition was by me duly sworn to tell the 6 truth, the whole truth and nothing but the truth in the 7 within-entitled cause; 8 That said deposition was taken down in 9 shorthand by me, a disinterested person, at the time and 10 place therein stated, and that the testimony of the said 11 witness was thereafter reduced to typewriting, by 12 computer, under my direction and supervision; 13 I further certify that I am not of counsel or 14 attorney for either or any of the parties to the said 15 deposition, nor in any way interested in the events of 16 this cause, and that I am not related to any of the 17 parties hereto. 18 19 20 DATED: _______________________ 21 22 _______________________ 23 ANGIE M. MATERAZZI CSR 13116 24 25