United States District Court, D. New Jersey
H. Cohen United States Courthouse One John F. Gerry Plaza
Camden, New Jersey 08101 September 11, 2014
& GREINER, ROBERT EGAN, ESQUIRE, BRYAN CAVE, LAWRENCE G.
SCARBOROUGH, ESQUIRE JACOB KRAMER, ESQUIRE Attorneys For
K&L GATES, LLP ANTHONY P. LaROCCO, ESQUIRE CHARLES
RYSAVY, ESQUIRE SCOTT KOBIL, ESQUIRE KATHY DUTTON HELMER,
ESQUIRE ROBERT F. PAWLOWSKI, ESQUIRE Attorneys For Telecom
E. IRENAS, UNITED STATES DISTRICT JUDGE
Court Exhibit C-1 was marked for identification
DEPUTY CLERK: All rise.
COURT, September 11, 2014, 11:06 a.m.)
COURT: Good morning, everybody.
Good morning, Your Honor.
COURT: Everybody, please be seated.
this is a continuation of the motion hearings we started on
Tuesday. There were five -- at the time, there were five
pending motions. Four -- the first four, which I decided. The
fifth was -- well, to enter the treble damages and
prejudgement interest. I decided the -- well, there was no
opposition. I decided the treble damage issue and -- but left
-- heard some argument on the prejudgement interest point,
but decided I'd look into it a little further and we
adjourned until today.
me start first with appearances of counsel.
SCARBOROUGH: Good morning, Your Honor, Larry Scarborough from
Bryan Cave for Avaya.
EGAN: Robert Egan, Archer and Greiner, for Avaya.
KRAMER: Jake Kramer, Bryan Cave, for Avaya.
LaROCCO: Anthony LaRocco, K & L Gates, for TLI/C.
HELMER: Kathy Dutton Helmer from K & L Gates for TLI/C.
PAWLOWSKI: Robert Pawlowski from K & L Gates for TLI/C.
KOBIL: Scott Kobil from K & L Gates, TLI/C.
RYSAVY: Good morning, Your Honor. Charles Rysavy from K &
COURT: Okay. The way we're going to proceed is I'm
going to let Mr. LaRocco -- I don't want him to repeat
his argument. Lord, I do not want him to repeat his argument,
but the -- I don't know if I could take the tension and
the emotional stress, but if there's anything he wants to
add or focus on, you know, briefly, again, not repeating what
you've already said. I'll give you that opportunity,
then I'll certainly give Mr. Kramer the -- because you
argued it, I think.
SCARBOROUGH: Mr. Egan.
COURT: Oh, Mr. Egan, you argued it. I'll give you a
chance to supplement or add what you want, and then I'm
going to let Mr. Scarborough deal, however he wants to, with
the issue we talked about, which was the reasoning behind
dismissing certain claims at the time of trial. And we wanted
to give Mr. Scarborough a chance to consult with counsel at
Avaya and -- so I'll give you a chance to do whatever you
so we'll start with you.
LaROCCO: Thank you, Your Honor. Just very briefly, Your
Honor. I have nothing additional to add except one caveat,
and that is, if Mr. Scarborough intends to engage in a
discussion with the Court regarding subjective intent,
forewarn my position will be that he has fully waived the
attorney/client privilege upon conferring with Mr. Carnavale,
and in addition, as he seemingly admitted to or agreed to
last time we were here, the work product privilege would also
be waived with respect to his mental impressions. I will,
therefore, ask the Court for permission to conduct discovery
on the issue, which will include not only depositions, but
also communications between counsel and communications with
respect to counsel and the client, and that's all
supported by the case law.
COURT: And I'm going to say, sufficient unto the day is
the evil thereof, as the Bible tells us. So I'm going to
-- MR. LaROCCO: That's all I have to say.
COURT: -- abide by the events before I get into that. Okay.
EGAN: Your Honor, I just have a couple --
COURT: I'm not limiting you in any way. I mean, you can
say what you want to say.
EGAN: I understand. I'm just kind of reflecting on our
discussions on Tuesday. I thought a couple points were worth
certification that we filed and the attachments to it, go in
great detail, point by point, to address the factors that Mr.
LaRocco talked about as -- that affected the pace of the
case, and I think that it's very detailed and I think
that they demonstrate why things took so long, that are quite
independent of any fault that could be attributed to Avaya,
and certainly, any bad faith attributed to Avaya.
second point is -- that I think arose out of that discussion,
as I reflected on it, is that Your Honor had concerns about
the dismissed claims and the timing, et cetera. The bulk of
the evidence that related to the dismissed claims was still
useful at trial, which would mean that dismissing the claims
didn't result in any wasteful discovery or delay. And,
certainly, not an indication of any intention to waste
anything, any time, any -- any time over the course of the
Your Honor recognized that in a argument on the --oddly
enough, a year ago, on 9-11-2013, in an argument, in an
opinion that denied TLI/C's motion to preclude our
tortious interference with economic advantage claim, on the
ground that it was based on the same evidence underlying our
said: To me, the issues and claims are not facts in evidence
that supports one claim. Even a claim that's dismissed
can support another claim that is not dismissed. And I think
that happens all the time in litigation. Lawyers sit and they
write pleadings that have 12 different theories on one set of
facts, basically, and at the end of the day, the case gets
down to a fewer number of theories. And the fact that the
other claims were dismissed doesn't keep those facts from
being used or an attempt to use them to support another
wanted to point those two things out for Your Honor.
COURT: Before you go, what do you think it was that made this
case last eight year? By the way, I -- we looked at the
cases. There are a handful of District Court cases that dealt
with the interest issue. They didn't award it.
COURT: But they dealt with it. But it looked to us like, in
all of -- there was not one of those cases that took more
than three years to get to trial. And again, I know we talked
-- the case is, in some sense, complex, but in another sense,
this case isn't that complex. As I said, I can tell, talk
to somebody at a cocktail party, and in three minutes, I
could tell them what the case was about, and get them to
understand, I think, a relatively intelligent person, even a
nonlawyer, I could get them to understand what the issue is
-- what the issues are in the case. Why did it take eight
EGAN: So I think the fact that the case might be neatly
summarized in a short period of time, the essence of the
case, the basic themes of the parties and the basic bones of
contention, so to speak, doesn't mean that it's not
complex in its facts or complex in its legalities.
if you look back at what happened, there were a number of
things. One is the parties took some fairly extensive
discovery. Two, the -- the defendants at the time refused to
answer some Interrogatories in the beginning of the case. We
had conferences with the judge, there was extensive motion
practice relating to motions to dismiss, motions to amend, et
cetera, et cetera.
then we had this lengthy period of delay in getting discovery
completed because of the problems with TLI/C, the defendants
producing the information I was discussing before and
violating the court orders that Judge Goodman had entered.
there was this process that I described the other day of --
and it worked for both sides, making, making requests, meets
and confers, objections, et cetera, and there were many. And
it took awhile to crystallize the issues, it took awhile to
work out what we could work out, and then we couldn't
work out some, so we had to go to Magistrate Judge Goodman.
There were very lengthy proceedings before her. The back and
forth and the joint presentations we made to Judge Goodman
are in the papers that we filed here. There were many issues
and they were complex, and she made her rulings.
we had to go to the Court to then sort of prompt an agreement
on the scope of the discovery that we were seeking. And, you
know, I haven't counted up all the issues, but I am
fairly confident that the significant majority of them
involved our efforts to get discovery out of the defendants.
Your Honor was assigned to the case, and I don't quite
recall the year that that happened.
COURT: I think it was 2011.
EGAN: And we had -- you know, we had some pending motions for
summary judgement that Judge Brown didn't rule on for a
while. Now, that didn't, you know, put anything to a
halt, but that --
COURT: They went over to me then.
EGAN: Well, he did rule on some --
COURT: Oh, yeah.
EGAN: I think it was another Judge Lifland situation, where I
think it was on his way to -- or on the day of retirement, I
think he may have decided those motions. I'm hopeful it
didn't hold up his retirement but it may have.
COURT: I think Judge Lifland, on the day of his retirement,
had to issue a 150-page patent opinion. I mean that,
EGAN: So -- so then Your Honor got the case, and there were
things to be done. As you well know, there were expert
discovery that had to be done. Of course, the expert reports
and everything couldn't be finished until we had
completed a vast majority of the fact discovery, and Your
Honor was there. You know that there were expert reports,
there were rebuttals, et cetera, iterations of them. Then
there were Daubert motions that took awhile, then
there were the post-trial -- THE COURT: I remember vividly,
there were seven Daubert motions, I believe, and
they occupied four trans files. The trans files being like a
double-sized carton, with probably 20, 30, 000 pages of
materials. And I called you all into my chambers and I showed
you where the cartons were, and I said, Did you actually
expect me to read 30, 40, 000 pages of this?
EGAN: I remember that. And you know what I remember? You
looking at me. And I'm wondering, why is the judge
looking at me on that?
know, it was a complex case.
can we say that it couldn't have been done sooner? No.
And I think that there could have been things done, in
hindsight, that moved the case along better, but -- but the
Court was involved in the decisions to extend discovery.
There were decisions to extend discovery that we jointly
applied for. There were decisions to extend discovery that
one applied for, the other agreed for.
guess where I'm trying to go with this is, it's a
given that it took a long time, and I don't think anybody
disputes that, of course you couldn't. It doesn't
mean it was because of Avaya's fault or, if it was in
some sense Avaya's fault, that it was bad faith in an
intention to delay.
COURT: Well, by the way, I know -- I know some of the cases
suggest it takes, you know, extreme bad faith to thing. But
when you read the statute itself, Section 15(a), it says you
make -- you may only consider, and they give you three
points. It doesn't say that you have to find all three.
It says only those -- those are the limits of what you're
allowed to consider.
faith is used in one of the three, but it's -- for
instance, the third, 15(a)(3), says: Whether such person of
the opposing party or either parties represented engaged in
conduct primarily for the purpose of delaying litigation or
increasing the cost thereof. It doesn't use the word
EGAN: I agree, but I think if somebody engaged in litigation
primarily for that purpose, it would probably be bad faith,
No. 1. No. 2, every --
COURT: I'm glad you say that because --
EGAN: Every case, every case that we have, that we have cited
to the Court, every case that we have cited to the Court has
required bad faith. In its recitation. Of course, no
court's ever granted it, but the judicial gloss on
statute has --
COURT: The judicial gloss.
EGAN: Has required it. But -- I hope I've answered the
COURT: I mean, for instance, in the automotive products case,
which I think you did cite.
EGAN: Sounds familiar.
COURT: Yeah. There were three things that were, I think,
identified as causing delay. But the Court said that the
first one, which was a possible Rule 11 motion to delay the
trial only for a few weeks, then there was a question of
seeking leave to add other parties, and it said, did not
affect the trial date. And then the third point was that the
-- there was a recusal motion that the judge thought lacked
merit, but he said, it caused little delay in the
there is an example of where they pointed to, you know, what
might be considered bad faith conduct, you know. The judge
didn't use the word "bad faith, " but
considered conduct. But he said it didn't delay ...