Preview
FILED: WESTCHESTER COUNTY CLERK 03/22/2022 05:03 PM INDEX NO. 60767/2018
NYSCEF DOC. NO. 1180 RECEIVED NYSCEF: 03/22/2022
HOULIHAN LAWRENCE
OPPOSITION TO MOTION TO CERTIFY
EXHIBIT 70
Nov. 8, 2021 Hearing Transcript
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NYSCEF DOC. NO. 1180 RECEIVED NYSCEF:1 03/22/2022
1 SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF WESTCHESTER: CIVIL TERM
2 ---------------------------------------------x
PAMELA GOLDSTEIN, ELLYN & TONY BERK, as
3 Administrators of the Estate of Winifred Berk,
and PAUL BENJAMIN, on behalf of themselves
4 and all others similarly situated.
5 Plaintiffs, INDEX NO.
- against -
6 60767/2018
7 HOULIHAN LAWRENCE, INC.,
Defendant.
8 ----------------------------------------------X
Via Teams
9 Monday, November 8, 2021
B E F O R E:
10 HON. LINDA S. JAMIESON
Justice of the Supreme Court
11
A P P E A R A N C E S:
12
13 MINTZ, LEVIN, COHN, FERRIS,
GLOVSKY & POPEO, P.C.
14 Attorneys for Plaintiffs
666 Third Avenue
15 New York, New York 10017
BY: JEREMY VEST, ESQ.
16
17 DELBELLO DONNELLAN WEINGARTEN
WISE & WIEDERKEHR, LLP
18 Attorneys for Defendants
One North Lexington Avenue
19 White Plains, New York 10601
BY: ALFRED E. DONNELLAN, ESQ.
20 and NELIDA LARA, ESQ.
21 MACGILL PC
55 Monument Circle, Suite 1200C
22 Indianapolis, IN 46204
BY: ROBERT D. MACGILL, ESQ.(Pro Hac Vice)
23 and MATTHEW CIULLA, ESQ. (Pro Hac Vice)
24 Mary T. Slavik, RPR
Senior Court Reporter
25
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1 THE COURT: Good afternoon.
2 Mr. Donnellan, I guess this is your
3 request.
4 MR. DONNELLAN: Yes, your Honor. It's
5 our request to seal certain records. Rob MacGill
6 has the details on it, so if I can turn it over to
7 Rob.
8 MR. MACGILL: Good afternoon, your
9 Honor. Rob MacGill, on behalf of the defendant,
10 Houlihan Lawrence. As Mr. Donnellan indicated,
11 we're asking the Court to keep under seal
12 deposition transcripts and exhibits that have been
13 produced or testimony given in the case.
14 To wrap it up in just a few paragraphs,
15 Mr. Vest, Plaintiffs, have filled about 5,300
16 pages of materials relating to -- (Internet
17 interference) -- 2,300 pages of those filings,
18 your Honor, were filed in public domain, and those
19 were all designated confidential testimonies in
20 the case. Additionally, Mr. Vest filed some 3,300
21 pages of exhibits that should have remained under
22 seal.
23 Now, with respect to where we are today,
24 those documents now have been -- the 2,300 pages
25 of transcripts have been withdrawn from public
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1 domain, but what we're asking today, your Honor,
2 is to seek either an agreement, this afternoon, if
3 Mr. Vest will remain to keep these documents under
4 seal under the terms of the controlling, the
5 protective order, or that we be allowed to file a
6 motion to seal this afternoon, as required by the
7 motion controlling protective orders.
8 As the Court knows, a protective order
9 was entered into in this case -- was entered in
10 this case in September of 2019. The parties have
11 been operating under that protective order. It
12 requires that if we have an interest in sealing
13 documents that are now filed with the court, we
14 must file a motion today.
15 So that's the reason we've come to the
16 Court. We are hoping maybe this can be done by
17 agreement, rather than file a motion to seal, but
18 we are prepared to proceed, however the court
19 directs us.
20 THE COURT: Mr. Vest.
21 MR. VEST: Good afternoon, your Honor.
22 Let me just begin by apologizing to counsel and to
23 Houlihan Lawrence. He's correct, that eight of
24 the 180 or so exhibits that we filed, in support
25 of our motion, were inadvertently filed in
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1 unredacted form. We took immediate action to have
2 those removed. So the entirety -- so every
3 document that has been designated as confidential
4 is currently unredacted -- excuse me -- redacted
5 on the public filing system.
6 As to whether there could be an
7 agreement, frankly, your Honor, I don't think the
8 parties or the Court have the authority to seal
9 the record, even by agreement by the parties. As
10 the Court knows, New York State strongly favors
11 open access to court records and may only seal the
12 proceedings upon a detailed showing based on an
13 affidavit of personal knowledge that good cause
14 exists.
15 I think there is a limited number of
16 documents that may satisfy that very high
17 threshold. As the Court knows, the two primary
18 circumstances in which courts in New York will
19 seal court records is where the document contains
20 trade secrets, or their equivalent, or to protect
21 the privacy interest of third parties. I can
22 think of only a couple of documents that could
23 possibly satisfy the high standard of a trade
24 secret or its equivalent; those are a couple of
25 documents that we filed in support of our motion,
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1 that I believe detail the commission splits at
2 various agents at various offices.
3 I can appreciate some competitive
4 sensitivity of those documents, but the vast
5 majority of documents which would include policy
6 and training manuals, internal correspondence
7 regarding dual agency, internal correspondence
8 regarding the in-house bonus, none of those
9 documents, your Honor, could conceivably be sealed
10 under a very high standard required for sealing
11 records under 216.1.
12 Counsel has indicated they also seek to
13 seal plaintiff's motion papers as well as the
14 affidavit of industry expert Tom Kusik. Again,
15 neither of those documents would be sealable under
16 the standards. As the Court knows, the case law
17 is pretty clear that the defendant's interest in
18 avoiding publicity or embarrassment or
19 reputational injury, are not the types of
20 circumstances that warrant a sealing order.
21 So we're happy to work with counsel to
22 identify the couple of documents that may qualify,
23 and then I think the Court could appropriately
24 find good cause to seal, but we certainly are not
25 in a position to agree to the -- more or less the
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1 blanket sealing order that counsel has indicated
2 they seek.
3 THE COURT: Anything else, Counsel?
4 MR. MACGILL: Yes, your Honor, just real
5 quick. This is a very unusual situation. One, we
6 do carry a burden, and we will meet that burden
7 through our motion, I believe. The Court may
8 recall that Mr. Vest and Mr. Ohlemeyer hired a
9 public relations firm at the outset of this case
10 --
11 THE COURT: I remember.
12 MR. MACGILL: -- and had press releases.
13 But here's the magnitude of what we're dealing
14 with. The press release didn't quote the
15 allegations. The press release, the Wall Street
16 Journal picked it up, et cetera, declarative
17 statements by the Rubenstein Public Relations
18 firm. I will give you three sentences. A huge
19 proportion of Houlihan Lawrence's growing sales
20 have come through ill-gotten gains on undisclosed
21 non-consensual agent deals, where the firm
22 followed a systematic strategy, a policy by which
23 it abandoned its duties of undivided loyalty to
24 its clients, to grab double commissions and choke
25 out its competitors. No quotation, your Honor, to
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1 allegations. That was what the Rubenstein firm
2 published and the Wall Street Journal picked up.
3 Here's the second of three. Here's
4 Rubenstein at Mr. Vest's behest. "Through high
5 pressure tactics and sleight of hand, Houlihan
6 Lawrence was able to pressure lawyer Pamela
7 Goldstein into a dual agent transaction without
8 her informed consent," another example.
9 So when we come to the Court today and
10 ask for authority to file this motion, this is the
11 kind of circumstance that Mr. Vest has sponsored,
12 a great prejudice to Houlihan Lawrence so far.
13 Now, what was left unsaid, in some of
14 the remarks that Mr. Vest just provided to the
15 Court, is Mr. Vest filed 2,300 pages of
16 transcripts that were designated confidential and
17 put them in the public domain. And he said in his
18 letter to your Honor, on November 1st, that he was
19 intending to move forward with, implicitly with
20 more of a publicity campaign. That's the last
21 line or two of his letter to your Honor on
22 November 1st.
23 So this is a serious matter for us. We
24 would like to come forward to the Court with a
25 motion to seal. We are prepared to file today,
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1 with Mr. Donnellan and Ms. Lara, to get on file,
2 yet today. Mr. Vest can look at our filing, and
3 maybe he would consent to it after he sees it, but
4 the type of prejudice we're dealing with, the type
5 of proprietary information in those 2,300 pages of
6 testimony, and it is contained in the other 3,300
7 pages, we're prepared to show that we meet the
8 burden with respect to a vast majority of those
9 materials.
10 MR. VEST: Your Honor, two points. The
11 issue about the press release that was issued by
12 plaintiff counsel's public relations firm, at the
13 outset of the litigation, was thoroughly litigated
14 before the discovery referee. I would encourage
15 the Court to take a look at discovery referee's
16 first report and recommendation, which was
17 ultimately adopted by the Court, which noted the
18 filing or issuance of a press release in support
19 of the initial filing of the lawsuit, class action
20 or otherwise, is commonplace, and the defendant's
21 criticisms of plaintiffs' press release, were
22 quote, "cherrypicked," and the statements that
23 counsel quoted to you today are the same ones that
24 were quoted to Mr. Harrington, who found that
25 those statements were flanked, and in most cases
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1 by the words "alleges" or "allegations." So the
2 question is whether there was any impropriety with
3 respect to the press release has already been
4 adjudicated.
5 Second, counsel suggests that there is
6 some irreparable harm that will result from the
7 public disclosure of these materials. The fact of
8 the matter is, your Honor, that many of these
9 materials have been on the public docket for
10 months, if not years. The discovery referee has
11 filed, in connection with the 6th report and
12 recommendation, numerous documents that were
13 marked confidential by counsel. That's also true
14 with respect to the 9th, the 11th, and 12th
15 reports and recommendations.
16 The Court may recall, at our last
17 conference, in May 2020, I encouraged the Court to
18 review on the public docket an e-mail sent by
19 Houlihan Lawrence's counselor Guru on agency, in
20 which he identified Houlihan Lawrence's in-house
21 bonus as a clear violation of Houlihan Lawrence's
22 fiduciary obligations, and that noted that it
23 would open up a dangerous can of worms, and quote,
24 "invite some very awkward conversations that
25 uncover my clients."
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1 That document, one of the most important
2 documents in the case, has been on the public
3 docket for months, as has the depositions of some
4 of Houlihan Lawrence's witnesses. So two of the
5 transcripts that counsel mentioned were
6 inadvertently filed momentarily, in unredacted
7 form, on the court's docket, have been on the
8 court's docket in unredacted form for many months.
9 So again, your Honor, we're happy to
10 identify the couple of documents that may satisfy
11 the good cause standard, but the blanket sealing
12 order signed by counsel of Houlihan Lawrence is
13 simply unsupported by the case law and Section
14 216.1.
15 THE COURT: So let me ask you a
16 question. Did these most recent press releases
17 include the word "alleged"?
18 MR. VEST: Your Honor, there is no
19 recent press release. Unfortunately, counsel's
20 letter is unclear in that regard. The only press
21 release that has been issued, in connection with
22 this case, was issued at the outset and, again,
23 was adjudicated by the discovery referee with --
24 on the first report and recommendation. No
25 further press releases have been issued.
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1 THE COURT: Mr. MacGill?
2 MR. MACGILL: Yes. Your Honor, what
3 we're concerned about, of course, is Mr. Vest and
4 his approach to things. So we expect more press
5 releases, we expect more behavior that we don't
6 think is consistent with the trial rules for
7 ethical considerations. We simply would like to
8 bring all of this forward now, so that we can put
9 an end to this, if we can, if the Court decides
10 that.
11 This is a very important matter to us in
12 terms of the types of proprietary information, our
13 business -- our proprietary business information
14 is in those deposition transcripts, our
15 proprietary financial information.
16 THE COURT: That was taken off, am I
17 correct?
18 MR. MACGILL: I'm sorry?
19 THE COURT: That was taken off, the
20 transcripts, Mr. Vest?
21 MR. VEST: Yes. Everything that's been
22 marked confidential is currently in redacted form
23 on the court's docket.
24 MR. MACGILL: So our concern, of course,
25 is today is the day, if we don't make our filing
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1 today, then Mr. Vest would be presumably going
2 back to his public relations firm or making his
3 own -- he's made his own press releases here. So
4 he's made press releases, he hired the firm
5 Rubenstein to do press releases for himself and
6 Mr. Ohlemeyer before. We need to have the Court
7 intercede. We need to file a motion to seal, if
8 the Court authorizes it today, under the
9 protective order, and let the Court evaluate this,
10 Mr. Vest can respond, but we're prepared to
11 proceed with a motion this afternoon.
12 THE COURT: Have you raised this at all
13 with Mr. Harrington?
14 MR. MACGILL: We have not. Candidly,
15 your Honor, it took us three or four days to get
16 through the 5,300 pages last week. We have not
17 raised this with Mr. Harrington.
18 THE COURT: Okay. Mr. Vest, you made
19 reference to one of Mr. Harrington's reports. Do
20 you know where that's filed on NYSCEF, the one
21 that you said where he addressed the
22 cherrypicking? I think it was his report, yes?
23 MR. VEST: It was, your Honor. It's the
24 first report and recommendation. If I can
25 minimize my screen, I think I can locate the
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1 docket entry for you quickly.
2 THE COURT: Okay. Go ahead.
3 MR. DONNELLAN: Your Honor, while he's
4 doing that, we had asked for the deposition of the
5 Rubenstein firm. That was the subject of his
6 report. He denied that motion some two years ago
7 so -- and that's no longer an issue today. We're
8 concerned not about that, we're concerned about
9 Mr. Vest and his next steps here.
10 MR. VEST: That is at docket 560 at page
11 --
12 THE COURT: Docket 560. There are a lot
13 of documents here.
14 MR. VEST: I would be happy to provide
15 the Court with a copy after today's hearing.
16 THE COURT: I will find it in a second.
17 MR. VEST: I apologize, your Honor. I
18 am having a hard time with my screen. Are you
19 able to see me?
20 THE COURT: I see you. Okay. So I do
21 see what his report was about, which was whether
22 or not they could depose the PR firm.
23 MR. VEST: Right, your Honor. And the
24 same allegations of impropriety that counsel
25 maintains support a motion to seal, are the same
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1 allegations of impropriety they maintain supported
2 a deposition of the Rubenstein firm. And as you
3 can see there, the discovery referee found that
4 the issuance of the press release was commonplace
5 and the criticisms were based on cherrypicking
6 statements in the press release.
7 MR. MACGILL: Your Honor, this
8 afternoon, what we're concerned about is something
9 different. We're now concerned about proprietary
10 business information in these transcripts that
11 comes in the form of our training materials, our
12 comprehensive policy documents. We're concerned
13 about financial information which is in those
14 transcripts and exhibits. We're also concerned
15 about our strategic corporate discussions also in
16 those exhibits.
17 THE COURT: Okay. Did you talk to
18 counsel about those particular pieces that you
19 have concerns with, because Mr. Vest said that he
20 would g
Preview
FILED: WESTCHESTER COUNTY CLERK 03/22/2022 05:03 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1180 RECEIVED NYSCEF: 03/22/2022 HOULIHAN LAWRENCE OPPOSITION TO MOTION TO CERTIFY EXHIBIT 70 Nov. 8, 2021 Hearing Transcript FILED: WESTCHESTER COUNTY CLERK 03/22/2022 05:03 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1180 RECEIVED NYSCEF:1 03/22/2022 1 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF WESTCHESTER: CIVIL TERM 2 ---------------------------------------------x PAMELA GOLDSTEIN, ELLYN & TONY BERK, as 3 Administrators of the Estate of Winifred Berk, and PAUL BENJAMIN, on behalf of themselves 4 and all others similarly situated. 5 Plaintiffs, INDEX NO. - against - 6 60767/2018 7 HOULIHAN LAWRENCE, INC., Defendant. 8 ----------------------------------------------X Via Teams 9 Monday, November 8, 2021 B E F O R E: 10 HON. LINDA S. JAMIESON Justice of the Supreme Court 11 A P P E A R A N C E S: 12 13 MINTZ, LEVIN, COHN, FERRIS, GLOVSKY & POPEO, P.C. 14 Attorneys for Plaintiffs 666 Third Avenue 15 New York, New York 10017 BY: JEREMY VEST, ESQ. 16 17 DELBELLO DONNELLAN WEINGARTEN WISE & WIEDERKEHR, LLP 18 Attorneys for Defendants One North Lexington Avenue 19 White Plains, New York 10601 BY: ALFRED E. DONNELLAN, ESQ. 20 and NELIDA LARA, ESQ. 21 MACGILL PC 55 Monument Circle, Suite 1200C 22 Indianapolis, IN 46204 BY: ROBERT D. MACGILL, ESQ.(Pro Hac Vice) 23 and MATTHEW CIULLA, ESQ. (Pro Hac Vice) 24 Mary T. Slavik, RPR Senior Court Reporter 25 FILED: WESTCHESTER COUNTY CLERK 03/22/2022 05:03 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1180 RECEIVED NYSCEF:2 03/22/2022 PROCEEDINGS 1 THE COURT: Good afternoon. 2 Mr. Donnellan, I guess this is your 3 request. 4 MR. DONNELLAN: Yes, your Honor. It's 5 our request to seal certain records. Rob MacGill 6 has the details on it, so if I can turn it over to 7 Rob. 8 MR. MACGILL: Good afternoon, your 9 Honor. Rob MacGill, on behalf of the defendant, 10 Houlihan Lawrence. As Mr. Donnellan indicated, 11 we're asking the Court to keep under seal 12 deposition transcripts and exhibits that have been 13 produced or testimony given in the case. 14 To wrap it up in just a few paragraphs, 15 Mr. Vest, Plaintiffs, have filled about 5,300 16 pages of materials relating to -- (Internet 17 interference) -- 2,300 pages of those filings, 18 your Honor, were filed in public domain, and those 19 were all designated confidential testimonies in 20 the case. Additionally, Mr. Vest filed some 3,300 21 pages of exhibits that should have remained under 22 seal. 23 Now, with respect to where we are today, 24 those documents now have been -- the 2,300 pages 25 of transcripts have been withdrawn from public FILED: WESTCHESTER COUNTY CLERK 03/22/2022 05:03 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1180 RECEIVED NYSCEF:3 03/22/2022 PROCEEDINGS 1 domain, but what we're asking today, your Honor, 2 is to seek either an agreement, this afternoon, if 3 Mr. Vest will remain to keep these documents under 4 seal under the terms of the controlling, the 5 protective order, or that we be allowed to file a 6 motion to seal this afternoon, as required by the 7 motion controlling protective orders. 8 As the Court knows, a protective order 9 was entered into in this case -- was entered in 10 this case in September of 2019. The parties have 11 been operating under that protective order. It 12 requires that if we have an interest in sealing 13 documents that are now filed with the court, we 14 must file a motion today. 15 So that's the reason we've come to the 16 Court. We are hoping maybe this can be done by 17 agreement, rather than file a motion to seal, but 18 we are prepared to proceed, however the court 19 directs us. 20 THE COURT: Mr. Vest. 21 MR. VEST: Good afternoon, your Honor. 22 Let me just begin by apologizing to counsel and to 23 Houlihan Lawrence. He's correct, that eight of 24 the 180 or so exhibits that we filed, in support 25 of our motion, were inadvertently filed in FILED: WESTCHESTER COUNTY CLERK 03/22/2022 05:03 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1180 RECEIVED NYSCEF:4 03/22/2022 PROCEEDINGS 1 unredacted form. We took immediate action to have 2 those removed. So the entirety -- so every 3 document that has been designated as confidential 4 is currently unredacted -- excuse me -- redacted 5 on the public filing system. 6 As to whether there could be an 7 agreement, frankly, your Honor, I don't think the 8 parties or the Court have the authority to seal 9 the record, even by agreement by the parties. As 10 the Court knows, New York State strongly favors 11 open access to court records and may only seal the 12 proceedings upon a detailed showing based on an 13 affidavit of personal knowledge that good cause 14 exists. 15 I think there is a limited number of 16 documents that may satisfy that very high 17 threshold. As the Court knows, the two primary 18 circumstances in which courts in New York will 19 seal court records is where the document contains 20 trade secrets, or their equivalent, or to protect 21 the privacy interest of third parties. I can 22 think of only a couple of documents that could 23 possibly satisfy the high standard of a trade 24 secret or its equivalent; those are a couple of 25 documents that we filed in support of our motion, FILED: WESTCHESTER COUNTY CLERK 03/22/2022 05:03 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1180 RECEIVED NYSCEF:5 03/22/2022 PROCEEDINGS 1 that I believe detail the commission splits at 2 various agents at various offices. 3 I can appreciate some competitive 4 sensitivity of those documents, but the vast 5 majority of documents which would include policy 6 and training manuals, internal correspondence 7 regarding dual agency, internal correspondence 8 regarding the in-house bonus, none of those 9 documents, your Honor, could conceivably be sealed 10 under a very high standard required for sealing 11 records under 216.1. 12 Counsel has indicated they also seek to 13 seal plaintiff's motion papers as well as the 14 affidavit of industry expert Tom Kusik. Again, 15 neither of those documents would be sealable under 16 the standards. As the Court knows, the case law 17 is pretty clear that the defendant's interest in 18 avoiding publicity or embarrassment or 19 reputational injury, are not the types of 20 circumstances that warrant a sealing order. 21 So we're happy to work with counsel to 22 identify the couple of documents that may qualify, 23 and then I think the Court could appropriately 24 find good cause to seal, but we certainly are not 25 in a position to agree to the -- more or less the FILED: WESTCHESTER COUNTY CLERK 03/22/2022 05:03 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1180 RECEIVED NYSCEF:6 03/22/2022 PROCEEDINGS 1 blanket sealing order that counsel has indicated 2 they seek. 3 THE COURT: Anything else, Counsel? 4 MR. MACGILL: Yes, your Honor, just real 5 quick. This is a very unusual situation. One, we 6 do carry a burden, and we will meet that burden 7 through our motion, I believe. The Court may 8 recall that Mr. Vest and Mr. Ohlemeyer hired a 9 public relations firm at the outset of this case 10 -- 11 THE COURT: I remember. 12 MR. MACGILL: -- and had press releases. 13 But here's the magnitude of what we're dealing 14 with. The press release didn't quote the 15 allegations. The press release, the Wall Street 16 Journal picked it up, et cetera, declarative 17 statements by the Rubenstein Public Relations 18 firm. I will give you three sentences. A huge 19 proportion of Houlihan Lawrence's growing sales 20 have come through ill-gotten gains on undisclosed 21 non-consensual agent deals, where the firm 22 followed a systematic strategy, a policy by which 23 it abandoned its duties of undivided loyalty to 24 its clients, to grab double commissions and choke 25 out its competitors. No quotation, your Honor, to FILED: WESTCHESTER COUNTY CLERK 03/22/2022 05:03 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1180 RECEIVED NYSCEF:7 03/22/2022 PROCEEDINGS 1 allegations. That was what the Rubenstein firm 2 published and the Wall Street Journal picked up. 3 Here's the second of three. Here's 4 Rubenstein at Mr. Vest's behest. "Through high 5 pressure tactics and sleight of hand, Houlihan 6 Lawrence was able to pressure lawyer Pamela 7 Goldstein into a dual agent transaction without 8 her informed consent," another example. 9 So when we come to the Court today and 10 ask for authority to file this motion, this is the 11 kind of circumstance that Mr. Vest has sponsored, 12 a great prejudice to Houlihan Lawrence so far. 13 Now, what was left unsaid, in some of 14 the remarks that Mr. Vest just provided to the 15 Court, is Mr. Vest filed 2,300 pages of 16 transcripts that were designated confidential and 17 put them in the public domain. And he said in his 18 letter to your Honor, on November 1st, that he was 19 intending to move forward with, implicitly with 20 more of a publicity campaign. That's the last 21 line or two of his letter to your Honor on 22 November 1st. 23 So this is a serious matter for us. We 24 would like to come forward to the Court with a 25 motion to seal. We are prepared to file today, FILED: WESTCHESTER COUNTY CLERK 03/22/2022 05:03 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1180 RECEIVED NYSCEF:8 03/22/2022 PROCEEDINGS 1 with Mr. Donnellan and Ms. Lara, to get on file, 2 yet today. Mr. Vest can look at our filing, and 3 maybe he would consent to it after he sees it, but 4 the type of prejudice we're dealing with, the type 5 of proprietary information in those 2,300 pages of 6 testimony, and it is contained in the other 3,300 7 pages, we're prepared to show that we meet the 8 burden with respect to a vast majority of those 9 materials. 10 MR. VEST: Your Honor, two points. The 11 issue about the press release that was issued by 12 plaintiff counsel's public relations firm, at the 13 outset of the litigation, was thoroughly litigated 14 before the discovery referee. I would encourage 15 the Court to take a look at discovery referee's 16 first report and recommendation, which was 17 ultimately adopted by the Court, which noted the 18 filing or issuance of a press release in support 19 of the initial filing of the lawsuit, class action 20 or otherwise, is commonplace, and the defendant's 21 criticisms of plaintiffs' press release, were 22 quote, "cherrypicked," and the statements that 23 counsel quoted to you today are the same ones that 24 were quoted to Mr. Harrington, who found that 25 those statements were flanked, and in most cases FILED: WESTCHESTER COUNTY CLERK 03/22/2022 05:03 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1180 RECEIVED NYSCEF:9 03/22/2022 PROCEEDINGS 1 by the words "alleges" or "allegations." So the 2 question is whether there was any impropriety with 3 respect to the press release has already been 4 adjudicated. 5 Second, counsel suggests that there is 6 some irreparable harm that will result from the 7 public disclosure of these materials. The fact of 8 the matter is, your Honor, that many of these 9 materials have been on the public docket for 10 months, if not years. The discovery referee has 11 filed, in connection with the 6th report and 12 recommendation, numerous documents that were 13 marked confidential by counsel. That's also true 14 with respect to the 9th, the 11th, and 12th 15 reports and recommendations. 16 The Court may recall, at our last 17 conference, in May 2020, I encouraged the Court to 18 review on the public docket an e-mail sent by 19 Houlihan Lawrence's counselor Guru on agency, in 20 which he identified Houlihan Lawrence's in-house 21 bonus as a clear violation of Houlihan Lawrence's 22 fiduciary obligations, and that noted that it 23 would open up a dangerous can of worms, and quote, 24 "invite some very awkward conversations that 25 uncover my clients." FILED: WESTCHESTER COUNTY CLERK 03/22/2022 05:03 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1180 RECEIVED 10 NYSCEF: 03/22/2022 PROCEEDINGS 1 That document, one of the most important 2 documents in the case, has been on the public 3 docket for months, as has the depositions of some 4 of Houlihan Lawrence's witnesses. So two of the 5 transcripts that counsel mentioned were 6 inadvertently filed momentarily, in unredacted 7 form, on the court's docket, have been on the 8 court's docket in unredacted form for many months. 9 So again, your Honor, we're happy to 10 identify the couple of documents that may satisfy 11 the good cause standard, but the blanket sealing 12 order signed by counsel of Houlihan Lawrence is 13 simply unsupported by the case law and Section 14 216.1. 15 THE COURT: So let me ask you a 16 question. Did these most recent press releases 17 include the word "alleged"? 18 MR. VEST: Your Honor, there is no 19 recent press release. Unfortunately, counsel's 20 letter is unclear in that regard. The only press 21 release that has been issued, in connection with 22 this case, was issued at the outset and, again, 23 was adjudicated by the discovery referee with -- 24 on the first report and recommendation. No 25 further press releases have been issued. FILED: WESTCHESTER COUNTY CLERK 03/22/2022 05:03 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1180 RECEIVED 11 NYSCEF: 03/22/2022 PROCEEDINGS 1 THE COURT: Mr. MacGill? 2 MR. MACGILL: Yes. Your Honor, what 3 we're concerned about, of course, is Mr. Vest and 4 his approach to things. So we expect more press 5 releases, we expect more behavior that we don't 6 think is consistent with the trial rules for 7 ethical considerations. We simply would like to 8 bring all of this forward now, so that we can put 9 an end to this, if we can, if the Court decides 10 that. 11 This is a very important matter to us in 12 terms of the types of proprietary information, our 13 business -- our proprietary business information 14 is in those deposition transcripts, our 15 proprietary financial information. 16 THE COURT: That was taken off, am I 17 correct? 18 MR. MACGILL: I'm sorry? 19 THE COURT: That was taken off, the 20 transcripts, Mr. Vest? 21 MR. VEST: Yes. Everything that's been 22 marked confidential is currently in redacted form 23 on the court's docket. 24 MR. MACGILL: So our concern, of course, 25 is today is the day, if we don't make our filing FILED: WESTCHESTER COUNTY CLERK 03/22/2022 05:03 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1180 RECEIVED 12 NYSCEF: 03/22/2022 PROCEEDINGS 1 today, then Mr. Vest would be presumably going 2 back to his public relations firm or making his 3 own -- he's made his own press releases here. So 4 he's made press releases, he hired the firm 5 Rubenstein to do press releases for himself and 6 Mr. Ohlemeyer before. We need to have the Court 7 intercede. We need to file a motion to seal, if 8 the Court authorizes it today, under the 9 protective order, and let the Court evaluate this, 10 Mr. Vest can respond, but we're prepared to 11 proceed with a motion this afternoon. 12 THE COURT: Have you raised this at all 13 with Mr. Harrington? 14 MR. MACGILL: We have not. Candidly, 15 your Honor, it took us three or four days to get 16 through the 5,300 pages last week. We have not 17 raised this with Mr. Harrington. 18 THE COURT: Okay. Mr. Vest, you made 19 reference to one of Mr. Harrington's reports. Do 20 you know where that's filed on NYSCEF, the one 21 that you said where he addressed the 22 cherrypicking? I think it was his report, yes? 23 MR. VEST: It was, your Honor. It's the 24 first report and recommendation. If I can 25 minimize my screen, I think I can locate the FILED: WESTCHESTER COUNTY CLERK 03/22/2022 05:03 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1180 RECEIVED 13 NYSCEF: 03/22/2022 PROCEEDINGS 1 docket entry for you quickly. 2 THE COURT: Okay. Go ahead. 3 MR. DONNELLAN: Your Honor, while he's 4 doing that, we had asked for the deposition of the 5 Rubenstein firm. That was the subject of his 6 report. He denied that motion some two years ago 7 so -- and that's no longer an issue today. We're 8 concerned not about that, we're concerned about 9 Mr. Vest and his next steps here. 10 MR. VEST: That is at docket 560 at page 11 -- 12 THE COURT: Docket 560. There are a lot 13 of documents here. 14 MR. VEST: I would be happy to provide 15 the Court with a copy after today's hearing. 16 THE COURT: I will find it in a second. 17 MR. VEST: I apologize, your Honor. I 18 am having a hard time with my screen. Are you 19 able to see me? 20 THE COURT: I see you. Okay. So I do 21 see what his report was about, which was whether 22 or not they could depose the PR firm. 23 MR. VEST: Right, your Honor. And the 24 same allegations of impropriety that counsel 25 maintains support a motion to seal, are the same FILED: WESTCHESTER COUNTY CLERK 03/22/2022 05:03 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1180 RECEIVED 14 NYSCEF: 03/22/2022 PROCEEDINGS 1 allegations of impropriety they maintain supported 2 a deposition of the Rubenstein firm. And as you 3 can see there, the discovery referee found that 4 the issuance of the press release was commonplace 5 and the criticisms were based on cherrypicking 6 statements in the press release. 7 MR. MACGILL: Your Honor, this 8 afternoon, what we're concerned about is something 9 different. We're now concerned about proprietary 10 business information in these transcripts that 11 comes in the form of our training materials, our 12 comprehensive policy documents. We're concerned 13 about financial information which is in those 14 transcripts and exhibits. We're also concerned 15 about our strategic corporate discussions also in 16 those exhibits. 17 THE COURT: Okay. Did you talk to 18 counsel about those particular pieces that you 19 have concerns with, because Mr. Vest said that he 20 would g