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FILED: NEW YORK COUNTY CLERK 09/14/2022 03:59 PM INDEX NO. 652078/2022
NYSCEF DOC. NO. 109 RECEIVED NYSCEF: 09/14/2022
1 SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK: CIVIL TERM: PART 48
2 ----------------------------------------------------X
RIPTIDE AUTONOMOUS SOLUTIONS LLC,
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Plaintiff,
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- against - INDEX #
5 652078/2022
BAE SYSTEMS INFORMATION AND ELECTRONIC
6 SYSTEMS INTEGRATION INC,
7 Defendants.
----------------------------------------------------X
8 Motion Seq. 09
9 August 30, 2022
Microsoft Teams Teleconference
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11 B E F O R E: THE HONORABLE ANDREA MASLEY,
Justice of the Supreme Court
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A P P E A R A N C E S:
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15 SHLANSKY LAW GROUP
Attorneys for the Plaintiff
16 1385 Broadway 12th Floor
New York, NY 10018
17 By: DAVID SHLANSKY, ESQ.
COLIN HAGAN, ESQ.
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WILEY REIN LLP
20 Attorneys for the Defendant
2050 M St. NW
21 Washington D.C. 0036
By: TATIANA SAINATI, ESQ.
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1 A P P E A R A N C E S: (Cont'd)
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RIVKIN RADLER LLP
3 Attorneys for the Defendant
926 RXR Plaza
4 Uniondale, NY 11556
By: MICHAEL IMPELLIZERI, ESQ.
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MICHELE PANTELOUKAS
25 Senior Court Reporter
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Proceedings
1 THE COURT: So at 3:34 on Teams in the matter of
2 Riptide against BAE, who is speaking for plaintiff?
3 MR. SHLANSKY: David Shlansky.
4 Good afternoon, Your Honor.
5 THE COURT: Is anyone with you, Mr. Shlansky?
6 MR. SHLANSKY: My partner, Colin Hagan is here
7 today as pro hoc, thanks to Your Honor.
8 THE COURT: Okay. It has been signed or it
9 needs to be?
10 MR. SHLANSKY: No. No. You did it sometime
11 ago. I just wanted to thank you.
12 THE COURT: And who is speaking for defendant?
13 MS. SAINATI: Tatiana Sainati, Your Honor.
14 THE COURT: Is anyone with you?
15 MS. SAINATI: Yes, Michael Impellizeri, who is
16 our local counsel.
17 THE COURT: Okay. Thank you.
18 This is defendant's motion to seal.
19 I understand there was a request to use a
20 demonstrative?
21 MR. SHLANSKY: We have abandoned that, Your
22 Honor, just given the crush of the day.
23 THE COURT: That's good. Well, in the future if
24 you want to use one, you have to give it to the other side
25 first; at least 24 hours in advance.
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1 MR. SHLANSKY: Okay. Thank you.
2 THE COURT: So, Ms. Sainati, what is so special
3 about these documents?
4 MS. SAINATI: These documents represent
5 proprietary information that BAE Systems keeps closely
6 guarded.
7 There is essentially -- well, there are two.
8 There is the integration handbook which includes the
9 materials that BAE has put together over the years with
10 instructions as to how, after successfully acquiring a
11 company, they go about integrating that company into the
12 BAE system's operational framework. Most have been
13 characterized by Riptide as simply standard provisions,
14 standard general industry-wide standards. But that is not
15 the case. As Mr. Lalley, who is counsel for -- in-house
16 counsel for BAE Systems put in his affirmation, the
17 information that we are specifically seeking to redact
18 contains essentially the roadmap to how it is that BAE
19 Systems goes about integrating companies after they have
20 acquired them.
21 In terms of the asset purchase agreement --
22 THE COURT: So it is a secret that the President
23 and CEO are at the top of the pyramid?
24 MS. SAINATI: The exact framework for how they
25 structure that pyramid and how they put together the team
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1 that will be in charge of overseeing the integration, that
2 BAE considers secret.
3 THE COURT: That's too bad.
4 MS. SAINATI: Okay.
5 THE COURT: Moving on from page four, which at
6 least as to the chart or figure one, I can't say that I
7 agree that the CEO being the head of -- the President/CEO
8 is at the top of the chart, is really not a secret. And
9 that you have another two employees below that, also not a
10 secret.
11 Okay, so their responsibilities, to develop a
12 system, that sounds like a good idea. Do you think that
13 they didn't talk about that in business school, developing
14 a business system when you merge with another company?
15 MS. SAINATI: Um.
16 THE COURT: Listen, I am all for, you know,
17 redacting information that is truly secret. But I have to
18 tell you, this is, like, business school 101. It is
19 wonderful that they have this, you know, guide.
20 And it is also inconsistent to redact on page
21 four and five the steps that are later included in the
22 diagram on page seven. It is not consistent.
23 I mean, by all means they should be able to keep
24 secret things that should be secret. But, so far I am not
25 seeing it.
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1 Due diligence is a good idea. You think that's
2 a secret?
3 MS. SAINATI: Your Honor, my client feels very
4 strongly that all of this is a secret. And I understand
5 that the Court feels differently.
6 THE COURT: It is your job to explain to them,
7 you know, that they are now in the third branch of
8 government. Right? Everything we do is public. You know
9 there is this teeny, tiny little exception where you get
10 to redact things that could truly hurt, you know, or
11 damage your company. You know, it is your job to educate
12 them. At least be consistent, number one. And number
13 two, if they were selective about what was truly secret
14 and what should be kept secret, you could take it
15 seriously, and I would. But I am so far not seeing it in
16 the integration.
17 Whose affidavit supports this, you know, the
18 sections that are highlighted in the integration handbook?
19 MS. SAINATI: Robert Lalley.
20 THE COURT: Uh-huh.
21 So repeatedly using the word "proprietary,"
22 doesn't make it so.
23 May I suggest that you look at some decisions,
24 perhaps review it with the counsel whose affidavit is
25 completely insufficient. You need, like, an engineer or,
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1 you know, someone who can really speak to why, you know,
2 page -- you know, the diagram on page nine of the
3 handbook, mergers and acquisitions, you know, section 3.1,
4 why -- and P.S., they have highlighted or redacted
5 "industry best practices." How could an industry best
6 practice be a secret? It is not their secret. It is the
7 industry's best practice. It doesn't make sense.
8 I am going to deny it. You need to try again.
9 It is without prejudice.
10 But, the attorney's affidavit is completely
11 insufficient. It is as general as general can be. He
12 clearly has no personal knowledge, or if he does he is
13 keeping it a secret.
14 I would suggest that you look at some decisions
15 where things are actually redacted and, you know, the
16 Court approves it.
17 MR. SHLANSKY: Your Honor, if I may?
18 THE COURT: Sorry, yes.
19 MR. SHLANSKY: This has been brought before you
20 several times now.
21 THE COURT: It does seem familiar, I have to
22 say.
23 MR. SHLANSKY: And the without prejudice,
24 frankly, Your Honor, the affidavits are just as conclusory
25 as they were in the first place. And many of these
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1 documents are things that are not even -- they don't even
2 have the purported "confidential" stamp on them. The ones
3 that do have the confidential stamp on them, when you get
4 into them, there is no substance to them. And we,
5 frankly, don't have any opposition, if there were targeted
6 things.
7 We actually brought to Your Honor, when Robert
8 Lalley said to us that he was concerned about the U.S.
9 Navy program identity, and the value of it, we made a
10 motion before counsel entered for the defendant, on behalf
11 of the defendant's concern. And Your Honor granted it.
12 And Your Honor went through careful exposition of the case
13 law basis for that.
14 But we have sought, time and time again, we have
15 actually done the defendant's work for it repeatedly, to
16 come up with a spreadsheet to explicate what could
17 possibly be the basis for each one of these things.
18 Because the defendant has repeatedly refused to do that.
19 And even in the most recent motion even in the reply
20 brief, there is yet another conclusory affidavit which
21 should be stricken, because one can't plead one's case
22 with new material on a reply brief.
23 But it continues to have this ipse dixit
24 conclusory nature. So Your Honor, we really want to get
25 on to addressing and, frankly, disposing of the pending
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1 motion to dismiss, and get on with discovery in this case.
2 And this has been going on for months now.
3 THE COURT: This motion shouldn't stop you from
4 doing that.
5 MR. SHLANSKY: Well, we believe that it is
6 burdensome in terms of that they claim that these
7 documents, which are not intrinsic to anything, utterly
8 refute the complaint. Or that, you know, that the motion
9 to dismiss utterly refutes what these documents say. So
10 what we don't want to have to do is have laborious tens of
11 thousands of dollars of motion practice for all sorts of
12 housekeeping matters, when these are everyday documents
13 that say nothing. And they certainly don't dispose of
14 commercially reasonable efforts.
15 So we can proceed, Your Honor, but the last time
16 we were before Your Honor you actually said that this does
17 gate the disposition of the motion to dismiss. And so we
18 would really, really like to just cut to the chase here.
19 And this has had many, many at bats and it is, frankly,
20 just a distraction.
21 MS. SAINATI: Your Honor, may I please respond
22 briefly to a couple of things that Mr. Shlansky said?
23 THE COURT: Mm-Hm.
24 MS. SAINATI: First, I understand, and of course
25 I understand that it is for the Court to determine whether
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1 or not any of this is confidential and worthy of
2 protection. But Mr. Shlansky, as an equity holder and as
3 a party to the APA, and Riptide is a party to the APA,
4 agreed that policies and manuals constitute confidential
5 information. So the fact that we are now --
6 THE COURT: Sorry, no offense, I don't care what
7 they agreed to, because I have an obligation under the
8 rules, the Court routes and under the cases that have come
9 down from the Court of Appeals, I don't care what you
10 agree to.
11 MS. SAINATI: I understand -- I totally
12 understand that, but I do think taking inconsistent
13 positions and for Mr. Shlansky to say that BAE is somehow
14 delaying things with motions practice or driving up costs
15 with these motions and then taking an inconsistent
16 position, that's not on BAE. That's just --
17 THE COURT: Okay. Here is the thing about the
18 motion to dismiss. A motion to dismiss should be -- I
19 mean, it may involve some documents, if there is
20 documentary evidence that can resolve an issue, then maybe
21 you will have some documents on the motion to dismiss.
22 But really it is not -- it shouldn't be a lot of
23 documents. It should be a conclusive document. You are
24 not going to put up all of the e-mails from, you know, for
25 years. It is usually one e-mail that is like a smoking
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1 gun kind of thing. You know, you all know that. So it
2 should not slow down the motion to dismiss at all.
3 MS. SAINATI: We agree.
4 THE COURT: Where are we with that motion?
5 MR. SHLANSKY: We had agreed among counsel that
6 we were going to take 14 days, per Your Honor's suggestion
7 the last time we were hearing the same motion, so from the
8 time of disposition of this motion sequence. But if Your
9 Honor wants us to proceed from now, we can do it from now.
10 THE COURT: When are you putting in the
11 opposition?
12 MS. SAINATI: How about 14 days from today if
13 that's acceptable to the Court.
14 THE COURT: So that would be the 13th of
15 September. Do you want it that Friday?
16 MS. SAINATI: Yes, please.
17 THE COURT: 9/16.
18 And then how much for a reply?
19 MS. SAINATI: Fourteen days?
20 THE COURT: So that would be the 30th.
21 And then once we get your papers we can give you
22 an argument date. But we are not going to do it until you
23 actually put your papers in, because until we have them,
24 we don't have them.
25 I can give you an idea, you might be able to be
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1 heard the week of the tenth. Maybe not. We are not sure.
2 It is possible that you can be heard that week. So if you
3 want a little extra time that next week you can have it,
4 because you are not going to be heard the week of the 3rd.
5 MS. SAINATI: That would be great.
6 THE COURT: Okay. Well, figure it out. And the
7 reply is due October 7. So, I know Mr. Shlansky wanted
8 instead of the 16th, he wanted the 23rd.
9 MR. SHLANSKY: Yes, Your Honor. Thank you.
10 THE COURT: And then Lauren Guerrera will get in
11 touch with you. The motion is denied. It is without
12 prejudice. You can try again. But it is not going to
13 interfere with anything.
14 MR. SHLANSKY: Thank you, Judge.
15 MS. SAINATI: Thank you, Your Honor.
16 THE COURT: Okay. Ms. Sainati, please get me
17 the transcript. Can you get met the transcript?
18 MR. IMPELLIZERI: Yes, Your Honor. We will
19 order the transcript.
20 (Transcript continued on page 13.)
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