On April 26, 2019 a Hearing was filed involving a dispute between A., A., A., D., Ahlheim, Kimberly, A., S., B., B., C., A., C., B., C., C., Christ, Alexandra, C., M., D., B., D., D., Doe, Jane, E., E., F., B., F., C., F., F., F., J., Flaherty, Daniel, F., S., G., F., G., G., G., K., H., D., H., G., H., H., H., T., I., I., J., A., J., I., J., J., J., Q., J., R., K., K., L., A., L., B., L., C., L., E., Levin, Rachel, L., H. A., L., I., L., K., L., L., L., T., Luo, Michelle, M., A., M., Amanda, M., K., M., L., M., M., M., N., M., R., Nail, Katharine, Nail, Robert, N., N., N., S., O., J., O., N., O., S., O., X., P., J., Plaintiffs, P., M., P., O., P., R., P., S., Q., P., Q., Q., R., E., Rivera, Sylvia, R., J., Rosenbaum, Amy, R., Q., R., R., S., B., S., Lucas, S., S., T., G., T., M., T., S., T., T., V., U., Wallace, Paul, Walsh, Kelly, W., K., Wong, Lawrence, Wong, Sharlene, W., Q., Y., N., Y., Y., Z., A., Z., Z., and Chart Inc., Chart, Inc., Chart Industries, Inc., A Corporation, Chenette, Philip, Conaghan, Joseph, Does 1-100, Inclusive, Does One Through One Hundred, Does One Through One Hundred, Inclusive, Extron Co., Extron Company, A Corporation, Givens, Carolyn, Herbert, Dr. Carl M., Li, Liyun, Pacific Fertility Center, Pacific Fertility Center, An Unincorporated Entity, Pacific Mso, Llc, Praxair Distribution, Inc., Praxair, Inc., Prelude Fertility, Inc., A Corporation, Ryan, Isabelle, San Francisco Fertility Centers D B A Pacific, Schriock, Eldon, for COORDINATION in the District Court of San Francisco County.
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1 ERIN M. BOSMAN (CA SBN 204987) EBosman@mofo.com 2 WILLIAM F. TARANTINO (CA SBN 215343) WTarantino@mofo.com ELECTRONICALLY 3 JULIE Y. PARK (CA SBN 259929) JuliePark@mofo.com F I L E D Superior Court of California, 4 MORRISON & FOERSTER LLP County of San Francisco 425 Market Street 10/15/2021 5 San Francisco, California 94105 Clerk of the Court Telephone: 415.268.7000 BY: JUDITH NUNEZ Deputy Clerk 6 Facsimile: 415.268.7522 7 DAVID F. McDOWELL (CA SBN 125806) DMcDowell@mofo.com 8 MORRISON & FOERSTER LLP 707 Wilshire Boulevard, Suite 6000 9 Los Angeles, California 90017 Telephone: 213.892.5200 10 Facsimile: 213.892.5454 11 Attorneys for Defendants PRELUDE FERTILITY, INC 12 PACIFIC MSO, LLC and JOSEPH CONAGHAN 13 14 SUPERIOR COURT OF CALIFORNIA 15 COUNTY OF SAN FRANCISCO 16 COORDINATION PROCEEDING Judicial Council Coordination Proceeding SPECIAL TITLE [RULE 3.550] No. CJC-19-005021 17 PACIFIC FERTILITY CASES DECLARATION OF JULIE Y. PARK IN 18 SUPPORT OF DEFENDANTS PRELUDE FERTILITY, INC, PACIFIC MSO, LLC 19 AND JOSEPH CONAGHAN’S UNOPPOSED MOTION TO FILE UNDER 20 SEAL PORTIONS OF SEPTEMBER 23, 2021 HEARING TRANSCRIPT 21 Date: November 19, 2021 22 Time: 9:00 a.m. 23 Judge: Honorable Andrew Y.S. Cheng Dept.: 613 24 25 26 REDACTED VERSION OF DOCUMENT SOUGHT TO BE SEALED 27 28 sf-4592809 1 DEC. OF J. PARK ISO DEFENDANTS’ UNOPPOSED MOTION TO FILE UNDER SEAL PORTIONS OF HEARING TRANSCRIPT 1 of 16 1 I, Julie Y. Park, declare that: 2 1. I am a partner with Morrison & Foerster LLP, counsel of record for Prelude 3 Fertility, Inc (“Prelude”), Pacific MSO, LLC (“Pacific MSO”) and Joseph Conaghan, PhD 4 (collectively, “Defendants”), parties in the above-captioned matter. I make this declaration in 5 support of Defendants’ Unopposed Motion to File Under Seal Portions of September 23, 2021 6 Hearing Transcript. This declaration is based on my personal knowledge. 7 2. Page 7, lines 4–5 of the September 23, 2021 Hearing Transcript merit sealing 8 because that portion discloses the confidential settlement amount in the Master Settlement 9 Agreement (“MSA”). The MSA is conditionally lodged under seal pursuant to the Settling 10 Defendants’ pending Renewed Motion to File Under Seal Portions of Motion for Approval of 11 Good Faith Settlement filed on October 5, 2021. Attached as Exhibit 1 is a true and correct copy 12 of the September 23, 2021 Hearing Transcript. 13 3. The MSA is to remain confidential under its own confidentiality provision. The 14 confidential settlement information is not publicly known, and its confidentiality is strictly 15 maintained except as required to support or oppose the motion for approval of good faith 16 settlement under California Code of Civil Procedure section 877.6. The Settling Defendants were 17 required to include all terms of the MSA in their motion for the Court and any objecting party to 18 properly evaluate the good faith basis for the settlement. 19 4. Disclosure of the MSA’s terms, including the settlement amount, would harm 20 Settling Defendants’ ability to resolve potential or future claims and undermine future settlement 21 negotiations with PFC patients. If the hearing transcript is not sealed, Settling Defendants will be 22 prejudiced by others having access to the settlement amount and payment allocation, including 23 PFC patients and their counsel who have not negotiated settlements with Settling Defendants. 24 I declare under penalty of perjury under the laws of the State of California that the 25 foregoing is true and correct. Executed this 15th day of October, 2021. 26 27 Julie Y. Park 28 sf-4592809 2 DECLARATION OF J. PARK ISO DEFENDANTS’ MOTION TO FILE UNDER SEAL PORTIONS OF HEARING TRANSCRIPT 2 of 16 EXHIBIT 1 Redacted Version 3 of 16 1 SUPERIOR COURT OF CALIFORNIA 2 COUNTY OF SAN FRANCISCO 3 BEFORE THE HONORABLE ANDREW Y.S. CHENG, JUDGE PRESIDING 4 DEPARTMENT 613 5 COORDINATING PROCEEDING ) CASE NO. SPECIAL TITLE [RULE 3.550] ) CJC-19-005021 6 ) PACIFIC FERTILITY CASES ) 7 ) _________________________________ ) 8 REPORTER'S TRANSCRIPT OF PROCEEDINGS 9 THURSDAY, SEPTEMBER 23, 2021 10 A P P E A R A N C E S 11 For The Plaintiff: LIEFF CABRASER HEIMANN & 12 BERNSTEIN, LLP BY: Sarah R. London 13 275 Battery Street 29th Floor 14 San Francisco, CA 94111 15 For the Plaintiff: WALKUP, MELODIA, KELLY & SCHOENBERGER 16 BY: Doris Cheng 650 California Street 17 26th Floor San Francisco, CA 94108 18 For The Defendants 19 Pacific Fertility Center, Carl Herbert, Eldon 20 Schriock, Philip (via Zoom) Chenette, Carolyn Givens, 21 Liyun Li and Isabelle Ryan: MORRISON & FOERSTER, LLP 22 BY: David F. McDowell 707 Wilshire Boulevard 23 Suite 6000 Los Angeles, CA 90017 24 For the Defendant Chart Inc.: SHEUERMAN, MARTINI, TABARI, 25 ZENERE & GARVIN: BY: Marc G. Cowden 26 1033 Willow Street San Jose, CA 95125. 27 28 COURT APPROVED REPORTER: CANDACE KHOROUZAN, CSR #11579 4 of 16 1 APPEARANCES (continued): 2 For the Defendant Chart, Inc.: SWANSON, MARTINI & BELL, LLP: 3 BY: John J. Duffy 330 North Wabash 4 Suite 3300. Chicago, ILL 60611 5 For the Defendants 6 Praxair Distribution, Inc., and Praxair, Inc.: FAEGRE DRINKER BIDDLE & 7 REATH, LLP BY: Michael J. Kanute 8 1800 Century Park East Suite 1500 9 Los Angeles, CA 90067 10 For the Defendants Pacific Fertility Center, 11 Carl Herbert, Eldon Schriock, Philip 12 Chenette, Carolyn Givens, Liyun Li and Isabelle 13 Ryan: GALLOWAY, LUCCHESE, EVERSON & PICCHI 14 BY: Sukhwinder K. Bajwa 2300 Contra Costa Boulevard 15 Suite 350 Pleasant Hill, CA 94523 16 17 18 19 20 21 22 23 24 25 26 27 28 5 of 16 1 INDEX 2 September 23, 2021 3 EXAMINATION 4 WITNESS NAME PAGE LINE 5 (NONE) 6 7 EXHIBITS 8 EXHIBIT DESCRIPTION IDENTIFICATION RECEIVED 9 (NONE) 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 6 of 16 1 1 September 23, 2021 2 P R O C E E D I N G S 3 THE COURT: Good morning, everyone. May I have 4 your appearances. 5 MR. McDowell: Good morning, Your Honor. David 6 McDowell representing Prelude Fertility, Inc., Pacific 7 MSO, LLC and Joseph Conaghan, moving parties. 8 MR. DUFFY: Good morning, Your Honor. John Duffy 9 on behalf of Chart, the responding party. 10 MS. LONDON: Good morning, Your Honor. Sarah 11 London, liason counsel on behalf of the Plaintiff. 12 MR. COWDEN: Good morning, Your Honor, Mark Cowden 13 on behalf of Chart. 14 MS. BAJWA: Good morning, Your Honor. This is Su 15 Bajwa on behalf of Pacific Facility Center and the 16 individually named physicians, also one of the moving 17 parties. 18 MR. KANUTE: Good morning, Your Honor. This is 19 Mike Kanute for the Defendants Praxair, Inc. and Praxair 20 Distribution, Inc. 21 THE COURT: All right. Welcome everyone. Why 22 don't we begin with you, Mr. McDowell. 23 MR. McDowell: Thank you, Your Honor. As the 24 moving party here, we have the, I guess, enviable 25 position in that the burden of proof rests with the 26 objectors, Chart, to show that this settlement is so far 27 out of the ballpark that it couldn't be approved, the 28 good faith motion shouldn't be approved. And with all 7 of 16 2 1 due respect to Chart, they haven't even gotten out of 2 the infield here. 3 The factors that the Supreme Court has told courts 4 to look at are the rough approximation of liability, the 5 amount paid in settlement, the allocation, recognition 6 that settlement should be cheaper than liability found 7 after trial, the financial conditions of the Defendants, 8 and the existence of any fraud collusion or other 9 conduct that would suggest bad behavior. All of these 10 factors suggest that the Court should approve the good 11 faith motion here. 12 The settlement is well-within the range of a rough 13 approximation of the liability. And this is not just 14 because of an understanding of what the liabilities are, 15 but because the claims in this case, at least of some 16 parties against Chart, went to trial in Federal Court 17 earlier this year. And those numbers show that jury 18 found that Chart was 90 percent liable for the injuries 19 suffered by the plaintiffs in that case. And that was a 20 finding that was made without my client's participation 21 in the trial and without their ability to defend 22 themselves. 23 And so a jury without -- with an empty chair, 24 Defendant, only assigned 10 percent liability to them. 25 And considering that settlement -- the settlement here 26 in proportion to the liability found by that jury, I 27 think this is clearly within the range of settlement 28 that can be approved. The allocation issue is to be 8 of 16 3 1 resolved later among the claimants here, and so that 2 issue really isn't in front of this court at this time. 3 And then the existence of, you know, the issues 4 of whether there was fraud, collusion or otherwise, is 5 really nothing there. This was a settlement that was 6 negotiated over 18 months in front of Judge Infante and 7 Adrienne Publicover of JAMS. It was participated in 8 initially by the Chart entity and continued through the 9 trial and ultimately reached a resolution. This was a 10 settlement negotiated by experienced counsel on both 11 sides, and there's no indicia here of any kind of fraud, 12 and certainly nothing that would meet the burden of 13 proof that's laid on Chart to show us that. 14 Finally, if Chart pushes or makes a request for 15 some discovery as to the financial conditions and 16 insurance of the settling parties here, but all that 17 information is already in Chart's possession, they were 18 parties to the litigation in the Federal Court case when 19 my clients were parties in that case as well. We 20 produced in that case the policies of insurance to the 21 parties. We provided financial information to all of 22 the parties in that case and, in fact, had a corporate 23 designee deposition about the financial conditions of 24 the settling parties. 25 So to the extent that Chart has said that they need 26 more discovery about this issue, I think that's really a 27 red herring. They've got the discovery. They don't 28 need any more. And, frankly, you know, to get to any 9 of 16 4 1 discovery about financial condition, they would have to 2 show that the settlement was disproportionately low. 3 And then if we were looking at this in terms of whether 4 or not the settlement -- you know, the settling 5 Defendants' financial condition would allow that 6 settlement to still be considered reasonable, and they 7 haven't met the first step of that, of showing the 8 settlement is far too low. 9 So in light of all that, in light of the burden of 10 proof on Chart to show that there's some reason not to 11 grant this motion, we would submit that the motion 12 should be granted. Thank you, Your Honor. 13 THE COURT: All right. Thank you, Mr. McDowell. 14 Mr. Duffy. 15 MR. DUFFY: Thank you, Your Honor. Good morning. 16 I really start my position for my client with the last 17 point in the tech bill factors, and that concerns 18 collusion. Your Honor, I tried the case in Federal 19 Court in May and June, and I saw, as you saw in my 20 declaration, witnesses come in and give testimony that 21 was unusually friendly and seemed rehearsed. 22 And it raised concern that I had that there was 23 clearly cooperation. When you see rehearsed testimony 24 from opponents, rehearsed answers, friendly laughing -- 25 I mean, this is a deadly serious case -- and what I saw 26 was a closeness and rehearsal. And one of the factors 27 that -- and Mr. McDowell is an excellent lawyer, and 28 he's right, the burden is on my client, but my hands are 10 of 16 5 1 tied. 2 This case has been stayed. And all I'm asking is 3 to let us conduct limited discovery. Did the PFC 4 witnesses try to reduce substantially the allocation 5 percentage by cooperating with the plaintiffs. As 6 Mr. McDowell pointed out, they were meditating during 7 the trial. So if you're in a situation where PFC was 8 where they're paying more than their limits, it's a 9 serious concern for them, and their motivation is to do 10 whatever they can to get the plaintiffs to settle with 11 them. 12 Did they overstep their bounds? Did they meet with 13 the Plaintiffs' lawyers. Did they practice their direct 14 examinations in the Plaintiffs' case in chief. Did they 15 provide them documents? Did they provide them outlines? 16 That's not exhaustive discovery, it's limited and 17 targeted. And with all due respect, based on my 18 experience in trying cases, it was very unusual. 19 And as a result they got a 10 percent finding. And 20 I laid it out in my briefs so the Court could see it. 21 PFC was in deep trouble, deep trouble. They were put on 22 probation for nine months by the College of American 23 Pathologists. And in addition to that during discovery 24 we unearthed that they were backdating the patient's 25 medical records. They never told that to the 26 regulators, they kept that to themselves. 27 So the motivation at this point was plaintiffs had 28 them. And did they overstep? Did they collude? And 11 of 16 6 1 that's what I'm asking the Court to do is lift the stay. 2 Let us take limited discovery so that I can see if 3 there's anything there. And then we can address the 4 substance of arguments far better and with information I 5 don't have now. 6 And I'll point out in the reply that I read that 7 was filed by the Pacific Fertility entities, they point 8 out that I should have asked that at trial during 9 cross-examination. Well, that violates one of the 10 golden rules of cross-examination, don't ask a question 11 on cross-examination you don't know the answer to. 12 Instead what I did is I addressed it in my closing 13 argument. 14 Because what I could say to the jury is the 15 demeanor of the witnesses and how friendly they appeared 16 to be. So that's how we did that, and I think that's 17 appropriate. But now here we are, and they're looking 18 to get a good faith finding order, and I believe the 19 discovery is appropriate and targeted. I boiled the 20 ocean, but I want to find out why it was that they 21 appeared to be friendly and rehearsed. 22 And the result that we got with a 90/10 split was 23 curious to me. And I think it had to do a lot with the 24 way the PFC witnesses portrayed themselves. So that's 25 my primary argument to the Court. What I'll also point 26 out is the moving parties have pointed to the verdict 27 itself and use that as its baseline for whether or not 28 the rough approximation of the Plaintiffs' total 12 of 16 13 of 16 8 1 And he presented the evidence about the alleged 2 presentation -- or excuse me -- probation that PFC was 3 placed in. So all of that evidence was presented, and 4 it didn't persuade the jury that there was an issue here 5 that should have been found to increase PFC's liability. 6 So whatever he thinks he might be finding, he's already 7 argued and got the result that he did. Thank you, your 8 Honor 9 THE COURT: Mr. Duffy, anything else? 10 MR. DUFFY: Certainly, your Honor. I think we're 11 looking at it backwards in the way Mr. McDowell has 12 argued it to the Court. I'm in trial where discovery is 13 closed, so I have no information on which to make the 14 argument. And now they want me to not even take 15 discovery on that in a completely separate proceeding. 16 And so I think, with all due respect, that's what 17 we should do, targeted and limited discovery, and find 18 out what happened. So that's my position. Thank you, 19 your Honor. 20 THE COURT: So what I will do is ask for you to 21 submit your proposed orders. On Mr. McDowell's part of 22 the proposed order, I'm granting. And for your proposed 23 order, Mr. Duffy, set forth with specificity of what 24 discovery that you are requesting. I'll consider it. I 25 haven't made my mind up yet on terms of whether 26 additional discovery is appropriate. 27 So I'll look at that closely, and then an order 28 will issue shortly after I receive your respect or 14 of 16 9 1 proposed orders on September 30th. Did anybody else 2 wish to be heard on this? I had other appearances, but 3 I wanted to open the floor in case I missed anything. 4 Okay. Very well. The motion to approval is also under 5 submission. I don't need argument after that. Thank 6 you for your appearances. 7 MR. McDowell: Thank you, your Honor. 8 MR. DUFFY: Thank you, your Honor. 9 (THE PROCEEDINGS CONCLUDED.) 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 15 of 16 1 STATE Of CALIFORNIA ) COUNTY OF SAN FRANCISCO ) 2 3 I, CANDACE KHOROUZAN, DO HEREBY CERTIFY: 4 5 That the foregoing is a full, true and correct 6 transcript of the testimony given and proceedings 7 hereinbefore entitled; 8 9 That it is a full, true and correct transcript of the 10 evidence offered and received, acts and statements of 11 the court, also all objections of counsel and all 12 matters to which the same relate; 13 14 That I reported the same in stenotype to the best of my 15 ability, being the duly-appointed, qualified and 16 official stenographic reporter of said court, and 17 thereafter had the same transcribed, as herein appears. 18 19 DATE: OCTOBER 1, 2021 20 21 22 23 24 25 26 27 28 16 of 16