Giganews, Inc. et al v. Perfect 10, Inc. et al

RESPONSE

C.D. Cal.February 11, 2019

Defendants’ Response Plaintiffs’ Supplement to Joint Pretrial Order 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Matthew C. Mickelson (S.B.N. 203867) LAW OFFICES OF MATTHEW C. MICKELSON 16055 Ventura Boulevard, Ste. 1230 Encino, CA 91436 818-382-3360 Attorney for Defendants PERFECT 10, INC. and NORMAN ZADA UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA GIGANEWS, INC., a Texas corporation; LIVEWIRE SERVICES, INC., a Nevada corporation, Plaintiffs, v. PERFECT 10, INC., a California corporation, NORMAN ZADA, an individual, and DOES 1-50, inclusive Defendants. Case No.: 2:17-cv-05075-AB (JPR) Before Honorable André Birotte, Jr. DEFENDANTS’ RESPONSE TO PLAINTIFFS’ SUPPLEMENT TO JOINT PRETRIAL ORDER Date: March 1, 2019 Time: 11:00 a.m. Courtroom: 7B, 350 West First Street, Los Angeles, CA 90012 Case 2:17-cv-05075-AB-JPR Document 192 Filed 02/11/19 Page 1 of 6 Page ID #:10827 1 Case No.: 2:17-cv-05075-AB (JPR) Defendants’ Opposition to Plaintiffs’ Supplement to Joint Pretrial Order 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Plaintiffs’ self-styled “Supplement” to the Joint Pretrial Conference Order is completely improper. Filing any such “Supplement” is not provided for in the Federal Rules, the Local Rules, or the Court’s Trial Order. Everything that Plaintiffs bring up in their “Supplement” is a question to be addressed to Magistrate Judge Rosenbluth, not to Judge Birotte. Plaintiffs have had the opportunity to bring such issues to the attention of Judge Rosenbluth; they have declined to do so, or to appeal any of her rulings that they believed were improper. The “Supplement” is an attempt to make an “end run” around the Magistrate Judge, a procedurally improper tactic. The only possible reason for Plaintiffs to make this improper filing is to -- yet again -- “work the ref” and work in a poisonous insinuation that Defendants are not abiding by their discovery obligations. It is yet another example of their relentless campaign to bias the Court on the eve of the Court’ important rulings on seventeen motions in limine. Plaintiffs know they have no basis for their claims, so they improperly present them to this Court, knowing full well that this Court has no ability to fact check anything they say. I. THE PHYSICAL ASSETS HAVE BEEN COMPLETELY IDENTIFIED Plaintiffs begin by making the claim that Defendants have not fully complied with the Court’s order “compelling Defendants to identify physical assets Perfect 10 claims it transferred to Norman Zada.” (Supplement at 1:6-13). No cite is given because no cite exists. Plaintiffs know that the Court has no way to verify the truthfulness of their claims so they just make them up. Plaintiffs know exactly what Dr. Zada purchased from Perfect 10 because he has testified to this very same issue in no less than three depositions: his debtor exam taken on January 28, 2016, and in depositions in this case taken on July 11, 2018, and October 31, 2018. Declaration of Matthew C. Mickelson attached hereto Case 2:17-cv-05075-AB-JPR Document 192 Filed 02/11/19 Page 2 of 6 Page ID #:10828 2 Case No.: 2:17-cv-05075-AB (JPR) Defendants’ Opposition to Plaintiffs’ Supplement to Joint Pretrial Order 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 (“Mickelson Decl.”) ¶ 4. They also know exactly what he purchased, because he identified those items as well in paragraph 7 of his declaration in support of Defendants motion for summary judgment (Dkt. 73). Specifically he testified that he purchased “three bedroom sets, purchased in 2000 for around $2,000 each; a scanner purchased in 2004 for around $8,000; a couch purchased in 2000 for around $8,000, and a desk purchased in 2000 for around $10,000. The six or so smaller computers were somewhat old and were purchased for around $2,000 each. There was a larger computer downstairs that cost at most $7,000. I estimated that other miscellaneous equipment including printers and office supplies, were purchased on average around 2012 and cost a total of $6,000 at the time, but that was largely a guess.” Zada Decl. Dkt. 73, ¶ 7. Plaintiffs are yet again trying at the last minute to manufacture some sort of discovery dispute that simply doesn’t exist. They did the same thing in the Related Case, and were successful in grossly misleading Magistrate Judge Hillman. In that case, it was Giganews who obstructed discovery. Perfect 10 produced more than 30 times as much discovery (Related Case, Zada Decl. Dkt. 650-8, ¶¶ 13-14), yet by their unconscionable tactics of constantly misleading the Court, Giganews actually succeeded in misleading Magistrate Judge Hillman into believing that Perfect 10 was the problem, when they were the problem. II. THE MAGISTRATE JUDGE HAS ALREADY RULED THAT DEFENDANTS NEED NOT PRODUCE DOCUMENTS AFTER DECEMBER 31, 2017 Plaintiffs’ claim that Defendants have failed to supplement their interrogatory responses and document productions. This assertion is disingenuous, because they know Magistrate Judge Rosenbluth only ordered the production of such documents to the end of 2017. Judge Rosenbluth made that clear in a discovery hearing held on September 10, 2018. During the hearing, in response to Dr. Zada’s Case 2:17-cv-05075-AB-JPR Document 192 Filed 02/11/19 Page 3 of 6 Page ID #:10829 3 Case No.: 2:17-cv-05075-AB (JPR) Defendants’ Opposition to Plaintiffs’ Supplement to Joint Pretrial Order 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 counsel’s argument that all of this discovery was completely irrelevant and violated Dr. Zada’s privacy rights (Transcript p. 13:13-15), the Court asserted that “I agree with you that the prime time that we should be focusing on is from shortly before the judgment in the earlier case to shortly thereafter.” (Id. at p. 14:8-10.) The Court determined that the end period for discovery on Dr. Zada’s financial issues was “the end of 2017” (Id. p. 21:1), and later reiterated that the discovery period was “2013 to December 31, 2017.” (Id at p. 22:13.) See Mickelson Decl. Ex. 1. The Court then turned to Plaintiffs’ motion to compel regarding Interrogatory No. 8, which was: “Identify all accounts (including but not limited to bank accounts, credit card accounts, brokerage accounts, investment accounts, retirement accounts, pension accounts, lease accounts, internet or other online service accounts, utility accounts, alarm or security service accounts, cable or satellite television accounts, domain name accounts, mortgages, lines of credit, real property, physical assets, cash assets, crypto currency or crypto assets) associated with Perfect 10 or Norman Zada.” Dr. Zada had elected to answer this interrogatory by providing the actual account documents to Plaintiffs. With regard to Plaintiffs’ motion to compel on this interrogatory, the Court asserted that “There's also no date restriction, so it would be the same dates” (Id. at p. 26:7-8) (i.e. from 2013 to Dec. 31, 2017), to which Todd Gregorian, Plaintiffs’ counsel, responded: “And I think to the extent I was unclear on the supplemental of -- we're amenable to the Court's date limitation for all these requests .” (Id. at p. 26:9-11.) The Court finally ruled that it would grant the motion to compel “limited to January 1, 2013 to December 31, 2017.” (Id. at p. 30:7-10.) Mickelson Decl. Ex. 1. Case 2:17-cv-05075-AB-JPR Document 192 Filed 02/11/19 Page 4 of 6 Page ID #:10830 4 Case No.: 2:17-cv-05075-AB (JPR) Defendants’ Opposition to Plaintiffs’ Supplement to Joint Pretrial Order 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 That the Magistrate decided that the end date for discovery was December 31, 2017, makes sense, because the alleged fraudulent transfers in this case occurred in 2014 and 2015, and discovery on Dr. Zada’s finances past a few years from the transfers is absolutely irrelevant to this case. Finally, and obviously, there have been no more asset transfers from Perfect 10 to Dr. Zada. All of Perfect 10’s assets have been taken by Plaintiffs or the Receiver. There is nothing left. The fantastical insinuation that there are additional transfers from Perfect 10 to Dr. Zada is just that – a fantasm. III. THERE ARE NO TAX FILINGS OR E-MAILS RELATING TO ASSET TRANSFERS TO PRODUCE On pages 1:24-2:7, Plaintiffs’ demonstrate their misleading tactics. They claim that “Defendants also have not produced documents related to Defendants’ filings or planned tax filings for the 2018 tax year.” Aside from the fact that the Magistrate has ordered that documents after December 2017 are not discoverable, neither Dr. Zada’s nor Perfect 10’s 2018 tax returns have been prepared. Similarly, there have been no asset transfers in 2018 so there are no related emails to produce, even if they had been ordered by the Court, which they were not. Plaintiffs used that deceitful tactic very successfully in the Related Case to completely mislead Magistrate Judge Hillman. They kept claiming that Perfect 10 had not produced all deposition transcripts etc. when they knew that Perfect 10 had produced every deposition transcript that it had. See Defendants Motion in Limine # 4 (Dkt. 144). They are shamelessly attempting to do the same thing here. IV. THE DISCOVERY IN THIS CASE WAS DECIDELY ONE- SIDED: PLAINTIFFS PRODUCED NO DOCUMENTS AT ALL It should also be known that the discovery in this case was decidedly one-sided, as was the discovery in the Related Case. In this case, Case 2:17-cv-05075-AB-JPR Document 192 Filed 02/11/19 Page 5 of 6 Page ID #:10831 5 Case No.: 2:17-cv-05075-AB (JPR) Defendants’ Opposition to Plaintiffs’ Supplement to Joint Pretrial Order 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Defendants made over 15 productions, whereas Plaintiffs produced no documents at all. Mickelson Decl. ¶ 3. Defendants went way beyond any order by the Court to avoid further motion practice, to no avail. Dr. Zada produced all information regarding his assets, everything from 2013 to 2018. He produced all bank statements from 2013-2018, all banking reconciliation statements he could locate, all brokerage statements from 2013-2018, all quick books statements he could locate, all personal tax returns that he had from 2013 onward, all credit card statements from 2013 through 2018 as well. He produced all related documents for Perfect 10 through 2018 as well. Declaration of Norman Zada, Dkt. 61-10 (“Zada Decl. Dkt. 61-10”) ¶ 2. Ex. 1. Despite the extraordinary one-sidedness of the discovery in this case, Plaintiffs nevertheless have the audacity to suggest that Defendants have been somehow remiss, when in fact it is Plaintiffs who have produced nothing at all. DATED: February 11, 2019 LAW OFFICES OF MATTHEW C. MICKELSON By: /s/ Matthew C. Mickelson MATTHEW C. MICKELSON Attorney for Defendants Perfect 10, Inc. and NORMAN ZADA Case 2:17-cv-05075-AB-JPR Document 192 Filed 02/11/19 Page 6 of 6 Page ID #:10832