Who Was Howard Bowles Talking To On 26 Feb 2015 Australian Time, Mastercardantitrust-Hearingtranscript

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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF NEW YORK
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IN RE: PAYMENT CARD
INTERCHANGE FEE AND MERCHANT
DISCOUNT ANTITRUST LITIGATION
:
: 05-MD-1720 (MKB-JO)
:
: United States Courthouse
: Brooklyn, New York
:
: Thursday, February 26, 2015
: 11:30 a.m.
:
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TRANSCRIPT OF CIVIL CAUSE FOR STATUS CONFERENCE
BEFORE THE HONORABLE JAMES ORENSTEIN
UNITED STATES MAGISTRATE JUDGE
A P P E A R A N C E S:
For the Class Plaintiffs 1720:
COUGHLIN STOIA GELLER RUDMAN & ROBBINS LLP
BY: ALEXANDRA S. BERNAY, ESQ.
ROBINS, KAPLAN, MILLER & CIRESI, LLP
BY: THOMAS J. UNDLIN, ESQ.
For the Class Plaintiffs:
ROBINS, KAPLAN, MILLER & CIRESI, LLP
BY: K. CRAIG WILDFANG, ESQ.
ROBBINS GELLER RUDMAN & DOWD LLP
BY: PATRICK J. COUGHLIN, ESQ
BERGER & MONTAGUE, P.C.
BY: H. LADDIE MONTAGUE, ESQ.
MICHAEL J. KANE, ESQ.
MERRILL G. DAVIDOFF, ESQ.
FRIEDMAN LAW GROUP LLP
BY: GARY B. FRIEDMAN, ESQ.
For the Class Plaintiff Payless:
MOTLEY RICE LLC
BY: MICHAEL M. BUCHMAN, ESQ.
SHERRY BRYANT, RMR, CRR
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For the Plaintiff Target Group:

VORYS SATER SEYMOUR AND PEASE LLP
BY: KENNETH J. RUBIN, ESQ.
MICHAEL J. CANTER, ESQ.
For the Plaintiff 7-Eleven Group:
CONSTANTINE CANNON LLP
BY: JEFFREY I. SHINDER, ESQ.
GARY J. MALONE, ESQ.
For the Plaintiff Home Depot USA:
QUINN EMANUEL URQUHART & SULLIVAN
BY: STEIG OLSON, ESQ.
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For the Individual Plaintiffs:
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KENNY NACHWALTER, P.A.

BY: RICHARD A. ARNOLD, ESQ.
SPERLING SLATER & SPITZ
BY: PAUL E. SLATER, ESQ.
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GRANT & EISENHOFER P.A.

BY: LINDA P. NUSSBAUM, ESQ.
VANEK VICKERS & MASINI, P.C.
JOSEPH M. VANEK, ESQ.
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For the Defendant Fifty Third Bancorp 1720:
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KEATING MUETHING & KLEKAMP

BY: RICHARD L. CREIGHTON, ESQ.
For the Defendants National City/PNC 1720:
JONES DAY
BY: JOSEPH W. CLARK, ESQ.
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For the Defendant HSBC:
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WILMER CUTLER PICKERING HALE & DORR LLP

DAVID S. LESSER, ESQ.
For the Defendant Texas Independent Bancshares:
PULLMAN & COMLEY LLC
BY: ADAM MOCCIOLO, ESQ.
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For the Objector Jon Zimmerman:
JOSHUA R. FURMAN LAW CORP.

BY: JOSHUA R. FURMAN, ESQ.
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For the Objector Sunoco:
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PEPPER HAMILTON LLP
BY: CONNIE VASQUEZ, ESQ.
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For American Express:

BOIES, SCHILLER & FLEXNER, LLP
BY: PHILIP C. KOROLOGOS, ESQ.
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For the Amex class:
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REINHARDT WENDORF & BLANCHFIELD

BY: MARK REINHARDT, ESQ.
MARK WENDORF, ESQ.
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For Visa:
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HOLWELL SHUSTER & GOLDBERG LLP

BY: MICHAEL SHUSTER, ESQ.
ARNOLD & PORTER
BY: ROBERT C. MASON, ESQ.
ROBERT J. VIZAS, ESQ.
MARK R. MERLEY, ESQ.
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For MasterCard:
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PAUL WEISS RIFKIND WHARTON & GARRISON, LLP

BY: KENNETH A. GALLO, ESQ.
GARY R. CARNEY, JR., ESQ.
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For Bank of America:
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MORRISON FOERSTER
BY: MARK P. LADNER, ESQ.
MICHAEL B. MILLER, ESQ.
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For J.P. Morgan Chase:
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SKADDEN ARPS SLATE MEAGHER & FLOM LLP

BY: PETER E. GREENE, ESQ.
BORIS BERSHTEYN, ESQ.
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For Capital One:

O'MELVENY & MYERS LLP
BY: ABBY F. RUDZIN, ESQ.
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For Wells Fargo:
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PATTERSON BELKNAP WEBB & TYLER LLP

BY: VIVIAN STORM, ESQ.
For Citi:
SIDLEY AUSTIN LLP
BY: BENJAMIN R. NAGIN, ESQ.
EAMON P. JOYCE, ESQ.
For Willkie Farr & Gallagher:
DECHERT LLP
BY: STEPHEN GREINER, ESQ.
ROBERT J. JOSSEN, ESQ.
For Gary Friedman:
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PROFESSOR SAMUEL ISSACHAROFF, ESQ.
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BRUNE & RICHARD LLP

BY: THERESA TRZASKOMA, ESQ.
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Court Reporter:
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SHERRY J. BRYANT, RMR, CRR

225 Cadman Plaza East
Brooklyn, New York 11201
sbryant102@verizon.net
Proceedings recorded by mechanical stenography, transcript

produced by Computer-Assisted Transcript.
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PROCEEDINGS
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THE COURT:
Good morning.
Nice to see all of you.
So we're on the record in re: Payment Card Interchange Fee and
Merchant Discount Antitrust Litigation, 05-MD-1720.
Counsel, we'll dispense with making notes of appearances, but
please do identify yourselves when you first speak.
As usual,
We've got two issues that I wanted to take up today.
I imagine we'll spend the bulk of our time this morning on the
proposed protocol to deal with the allegations concerning
Ms. Ravelo, but we also have the fee issue, the motion by
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Mr. Furman, and I think that will take up less of our time so
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let's get that out of the way first, if we could.
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Is Mr. Furman here?
Mr. Furman, why don't you come
on up.
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MR. FURMAN:
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THE COURT:
Good morning, Your Honor.

Good morning.
So I've read your
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submissions and if there's anything further that you want to
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present, I'm happy to hear you.
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but if there's a presentation you had in mind, by all means,
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go ahead.
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MR. FURMAN:
I have a couple questions,
In addition to the papers, Your Honor,
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we don't have anything specific on the request for fees
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itself.
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to the procedure that the disbursement motion -- how the
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disbursement motion was granted, but we have that under appeal
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and I think that's probably going to be the appropriate time
I think there are some underlying issues with regard
PROCEEDINGS
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to take that up.
THE COURT:
All right.
But in terms of the request
that's before us now, in all honesty, it's hard for me to
glean from the record a basis to conclude that your efforts on
behalf of your client had any bearing on what happened and,
therefore, a basis, a sufficient causal nexus that would
justify a fee award.
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Is there anything that you can point me to

objectively that shows some connection between what you did
and the reduced request for fees?
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MR. FURMAN:
Presuming that -- there's the matter of
Judge Gleeson's ruling and how that impacts --
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THE COURT:
Right, which he said explicitly had
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nothing to do with your efforts.
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MR. FURMAN:
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THE COURT:
Right.
And I don't say that with disrespect,
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but it's the fact that we've got.
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there and then have to show something that happened thereafter
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that had some connection between your efforts and what
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happened later.
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MR. FURMAN:
So I take it we start from
We would start from before that point
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in time.
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the disbursement motion is a different endpoint than where we
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were with Judge Gleeson.
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We would point out that Judge Brody's order granting
THE COURT:
No, but we have to look at the period
PROCEEDINGS
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between those two orders, right?
MR. FURMAN:
THE COURT:
I think only in part.

Oh, I see.
So we take a look at the
period before Judge Gleeson said that you had no effect on
what happened to look at the effect of that prior action on
what happened?
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MR. FURMAN:
decision --
THE COURT:
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Because Judge Brodie made a different
I see.
MR. FURMAN: -- and Judge Brodie's decision would be

informed by the entirety of the record.
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THE COURT:
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MR. FURMAN:
I see.
That's the only point we make.
But I
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certainly recognize that Judge Gleeson has made a decision, in
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no way am trying to contradict what Judge Gleeson said.
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only difference in terms of facts that happened after what
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Judge Gleeson said are -- is the fact that they came back to
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the court and they asked for a new incentive award amount, a
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less, a reduced incentive award amount.
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THE COURT:
The
And you say that's because of what you
did?
MR. FURMAN:
We're the only party that opposed it,
Your Honor.
THE COURT:
Should I infer anything from the
guidance that Judge Gleeson provided in his ruling as having
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possibly some effect on how class counsel acted?

MR. FURMAN:
I don't think it's outside of the
things that you can consider.

THE COURT:
How can I differentiate, other than just
asking class counsel, what influenced you, which I intend to
do, but other than asking them that, how can I differentiate
between Judge Gleeson saying, here's how a court should go
about doing this, and what you did, in terms of what affected
how class counsel acted?
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MR. FURMAN:
I want to make sure I understand the
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question to the extent you're characterizing what Judge
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Gleeson did.
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THE COURT:
You're saying that there are a couple of
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things that could be in the mix.
One is your actions, and
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that's the basis for your fee request.
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proposed as a possibility the guidance that Judge Gleeson
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provided; and you said, no, you can't exclude that as a
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possibility.
The other is that I've
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So if what goes into the class counsel's decision to
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reduce their fee request is guidance provided by Judge Gleeson
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alone, clearly you shouldn't get an award; right?
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MR. FURMAN:
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THE COURT:
And if -I'm just saying -- I'm going to get to
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the other hypo in a minute.
But if that's what happened, I
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take it you'd agree no basis for an award?
PROCEEDINGS
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MR. FURMAN:
To the extent Your Honor finds it
credible, yes, or whoever is going to be deciding it finds it
credible.
THE COURT:
And if their reduction in the request
was due entirely to the fact that before Judge Gleeson said
that you had no effect on his decision you had opposed their
request, if he said, yeah, that's entirely what caused us to
change it, then, of course, you'd be entitled to an award;
correct?
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MR. FURMAN:
If they say Judge Gleeson's decision is
the only reason?
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THE COURT:
No.
If they said it had nothing to do
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with their decision, that really what caused them to
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reconsider was the fact that before Judge Gleeson rejected
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your request you had opposed it, then, of course, you'd be
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entitled to something; right?
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MR. FURMAN:
Sure.
But I don't think what class
counsel says is the entirety of the record.
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THE COURT:
I'm not saying it's necessarily the only
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thing to consider, but what else is there for me to consider
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in trying to figure out whether it's one, all of one thing,
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all of the other, something in between, something else?
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else can I look to?
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MR. FURMAN:
record.
What
You can look at the entirety of the
When was the fee application made?
Who opposed it?
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Yes, what Judge Gleeson decided is what Judge Gleeson decided.
There's a number of other factors that go into those kinds of
decisions, but there it is.
fact is that they came back afterwards, knowing that there was
going to be at least one objector that was going to be closely
analyzing this question and seeking to oppose it, and they
refined it to a certain degree.
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I can't deny it.
And then the
Then, not only did they refine it to a certain

degree, they hid it from objectors by filing it under seal.
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think that that's a pretty clear indication that they knew
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that they faced a threat from objectors.
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Again, the way the procedural issues went down, when
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that motion was decided we have questions about, but that's --
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THE COURT:
If they were hiding it from you in
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particular, because you're the one that took the trouble to
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oppose it, why wouldn't they have asked for more, confident
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that you wouldn't be there to call them out on it?
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MR. FURMAN:
I think they -- there could be a number
of reasons.
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THE COURT:
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MR. FURMAN:
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THE COURT:
Right.
I think clearly -But we're looking for a reason that has
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something to do with you, right?
So if they're confident that
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you're not going to see what they're doing, how is your
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participation affecting the amount?
PROCEEDINGS
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MR. FURMAN:
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I'm not sure that they were confident
that we wouldn't see what they were doing.
made it a barrier to being able to fully represent the
interests of the class here.
THE COURT:
MR. FURMAN:
THE COURT:
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Got it.
Okay.
They definitely
Anything else?
No, Your Honor.

Thank you.
Who wishes to be heard?
Yes, sir.
MR. KANE:
for the class plaintiffs.
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THE COURT:
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MR. KANE:
Michael Kane
Nice to see you again.
And you.
I'll start with the basic premise, which
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is, I think your analysis is correct.
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that Mr. Furman did had anything to do with our submission
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that we made.
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issued his opinion to resubmit, answering some basic questions
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that he had and some guidance that he provided us the
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information he was looking for.
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then submitted a much more detailed brief and backed up by
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much more detailed information provided by the class
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plaintiffs.
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Number one, nothing
Judge Gleeson invited us at the time that he
Based on that guidance, we
There was no intent to hide anything.
This was a
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public filing.
The reason it was under seal, Your Honor, is
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because it contained highly confidential business information.
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A lot of these businesses, especially a closely held, the
PROCEEDINGS
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information regarding their finances are not known to anybody
outside of them, their accountants and probably the IRS, but
it's a limited role.
After that point in time, a redacted version was
filed, and Mr. Furman was also provided with unredacted copies
of the backup materials as well.
There's no kind of ulterior motive or purpose.
to do was put the record straight, make sure that Judge Brodie
had the information that she needed to make a decision, guided
So nothing was hidden.

All we wanted
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by what Judge Gleeson had previously said on the issue.
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our brief actually expressly reflects that as well, that we
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were guided by Judge Gleeson, in answering his questions and
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making the submission.
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THE COURT:
And
Anybody else wish to be heard before I
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give Mr. Furman an opportunity to respond?
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want to be heard in response?
Mr. Furman, do you
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MR. FURMAN:
Thank you, Your Honor.
I'd only flesh
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out what happened procedurally.
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spent several days arguing with class representative counsel
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to try and figure out a way to get the documents that were
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filed under seal.
It was filed under seal.
We
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We did obtain a copy of those documents
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approximately nine days after it was initially filed and the
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request to seal was initially filed.
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decision two days later.
Judge Brodie rendered a
My understanding, and I'm ready and
PROCEEDINGS
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willing to have egg on my face on this issue, but our
understanding at the time was under local Rule 6(b) we had 14
days plus three under the FRCP to file our opposition.
it was some shorter period of time, the fact that we got the
documents later doesn't bear on whether or not there was --
they were not improperly hidden.
THE COURT:
Thank you.
All right.
So if
I'm going to
respectfully recommend that the Court deny the fee
application.
I don't think there's any basis to conclude that
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Mr. Furman's efforts affected the reduced amount of the fee
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request.
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And so, because there's not a basis to conclude that
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Mr. Furman's litigation on behalf of the Objector Zimmerman
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resulted in any benefit to the class, it wouldn't be
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appropriate to reduce the funds available to the class to
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compensate for that.
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All right, let's move on next to the other issue.
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have the status report, the letter submitted by Willkie Farr
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on February 6, I believe, and then February 25th, and I have
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the letter dated February 25th on behalf of Home Depot, the
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7-Eleven and Target groups.
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That's what I've reviewed.
If there's something
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that somebody submitted on this issue that I've missed, please
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let me know, because I don't want to disregard something
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unintentionally.
Yes, sir.
PROCEEDINGS
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MR. JOSSEN:
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Your Honor, Robert Jossen from Dechert,
and I'm appearing on behalf of Willkie Farr.
There is also a letter that was sent to Your Honor
on February 19th, I don't think you mentioned that, which
provided some background for the information --
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Yes, I have it here and I did review it.
All right.
So I'm open to suggestions about how to
Thank you.
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THE COURT:
proceed.
My thought was to take as our starting point this
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proposed protocol and focus on the objectors' concerns about
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that.
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should start with or if there's any additional information
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anybody thinks we should put on the record to -- go ahead.
But if there's anything else that somebody thinks we
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MR. JOSSEN:
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THE COURT:
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MR. JOSSEN:
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It's Robert Jossen, J-o-s-s-e-n.

Go ahead, Mr. Jossen, please.
I'm going to come over here.
I think
it's easier to see you and for you to see me.
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THE COURT:
And just one sort of housekeeping issue.
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We're going to be talking about the allegations that have been
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made about Ms. Ravelo's conduct and I guess to some extent Mr.
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Friedman's.
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make clear that, as far as I'm concerned, these are all
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allegations of conduct and I'm certainly not going to make any
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finding or purport to make any finding about what actually
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happened.
And whatever shorthand anybody uses, I want to
PROCEEDINGS
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MR. JOSSEN:
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We agree and that's the context in
which we've brought this issue to Your Honor to start with.
I think it would be helpful just to frame what I
think is the narrow question before you today.
Based upon the
information that Willkie Farr received, the investigation
which we undertook, we came to find these documents; and we
thought, after consultation with co-counsel for MasterCard and
with the client, that these were matters that should be
brought to the Court's attention.
And we then met with
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lawyers both in this case and in the Amex litigation so that
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we could explain what we had in mind.
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And our purpose today is not to go to ultimate
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questions about whether there's relevance or what the remedies
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might be or what objections or basis there might be to have a
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problem.
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a procedure so that we can take these documents, make them
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available after people have had an opportunity to assess
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whether there's a privilege that they want to interpose, and
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if there is then a procedure for Your Honor to resolve that,
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as the case may be, or potentially in the Amex litigation, and
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then to move forward.
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Our purpose here is simply to get an agreement upon
And the stipulation has been geared in such a way to
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protect everyone's rights.
No one is giving up any rights
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whatsoever except to claim that the production of the log
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which we're talking about itself constitutes a waiver of any
PROCEEDINGS
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privilege that might otherwise exist.
and the documents and all to be treated as highly confidential
for the protection of all the parties concerned.
And we want that log
Our view, Willkie Farr, together with others, is
simply trying to do the right thing, to get these issues
before Your Honor so that the parties can look at the
documents.
so far really go beyond the question of the appropriateness of
the protocol.
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And I think a lot of the objections that we heard
And, in fact, I think we're making progress toward
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getting toward an agreement on the stipulation.
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are a couple of areas where there are disagreements, which we
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can address and perhaps Your Honor can help us resolve those,
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but it seems to me we have to have a workable protocol so that
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we can have an orderly way to proceed.
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would be helpful to give you that framework as we go forward
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and hear some of the issues today.
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I think there
And I just thought it
Now, I'm happy to address specific points that you
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might have, anything that might be an issue with respect to
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questions that have been raised by some of the parties.
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happy to lay that out for you if you want.
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proceed in whatever way is most helpful to you.
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THE COURT:
I agree.
I'm
I really want to
There are some obvious
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questions that come to mind that I think are for a later day
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once everybody is better informed about what these documents
PROCEEDINGS
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include and have a chance to weigh in on it, because I'm
probably less able to do that than all of you.
better information about the case and what the information at
issue might signify.
You have
I did want to get your input on some specific
objections that Mr. Olson and Mr. Shinder and Mr. Canter in
their letter raised.
worried that it doesn't have objective standards for what gets
logged.
With respect to the protocol, they are
They point to words like appear to have been, may
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have been.
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objective way of saying we're going to get at the whole
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universe of documents here?
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Is there some reason why we can't have a more
MR. JOSSEN:
Well I think the point here, Your
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Honor, is we've categorized the documents that Willkie is
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prepared to produce and to put in a log.
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that -- those standards, which were set out in the stipulation
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in a couple of different buckets, are clear and we'll be
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logging the documents that are consistent with that.
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And I think that
We're certainly not going to produce, nor has it
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been suggested, the entire universe of e-mails that might have
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been exchanged back and forth between Ms. Ravelo and Mr.
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Friedman, which include thousands of documents that come on
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LISTSERV and things of that sort that went to all different
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kinds of parties.
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We have focused in on a couple of areas which we are
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prepared -- and we're doing this on a voluntary basis -- to
disclose and listing those documents for the Court and for the
parties.
as they're interposed.
the description that we have of the documents is sufficient
for us to prepare the log in the materials and the areas that
we've outlined.
And if there are objections, we can deal with them
THE COURT:
So I don't think that -- I think that
I guess I'm trying to figure out how
does somebody know what is left out from the criteria
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that don't have very -- a lot of specificity to them?
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MR. JOSSEN:
Well, what we have done, and I suppose
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at the end of the day we'll have to make an appropriate
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representation when the log is completed, that we have given,
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with respect to, first, the documents that are potentially
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Amex protected documents.
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will list them and we will put all of those documents there.
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There are not a lot of them, but we
With respect to communications between Mr. Friedman
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and Ms. Ravelo, there are certain documents, there are certain
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communications which actually are transmitting Amex documents.
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Those will all be included as well.
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And then there are communications which fall into
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this other category which affects, you know, or which
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potentially is involved in this case and the Amex case, where
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there are forwarding of communications or comments relating to
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others in the credit card litigations.
We are going to put
PROCEEDINGS
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all of those into the log.
What's not included in the log are e-mail
communications that do not -- between Ms. Ravelo and Mr.
Friedman over a long period of time --
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THE COURT:
Pause there.
How long a period are we
talking about?
MR. JOSSEN:
Well, I know certainly during the
period that Ms. Ravelo was at Willkie Farr, which is from
2010.
They knew each other and interacted before then during
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a prior period when Ms. Ravelo was at Hunton & Williams and
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even before that as well.
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whether we have any of those documents.
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because they migrated with Ms. Ravelo to Willkie Farr when she
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came in October of 2010.
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THE COURT:
And I don't, frankly, recall

If we have them, it's
I'm just trying to get a sense of the
duration of the period that you're talking about.

MR. JOSSEN:
Well, I think she was, again, at
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Willkie Farr 2010 to 2014; I believe at Hunton & Williams, it
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was approximately 2005 to 2010.
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THE COURT:
All right.
So you were saying e-mails
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outside of the category you've already described, e-mails
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between the two of them --
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MR. JOSSEN:
E-mails that relate -- that do not
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relate to credit card litigation on their face and that do not
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raise the confidentiality concerns that we've addressed in the
PROCEEDINGS
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category of documents that we are going to disclose.
Now, that's a broad category of documents.
They are
matters relating to things like vacation, like family
arrangements.
number of what I will say are not matters that are related on
their face to the credit card litigations or to the issues of
confidentiality.
They can cover investments.
They can cover any
If it's necessary for us to do this in order to get
an agreement on the stipulation, we would log those documents
10
as well, but it's a big task.
11
would suggest if we're going to have to do that, the way to
12
proceed will be to take the log as we've got it set up now in
13
stage one and then we will proceed to log the other documents
14
in stage two and get them to the parties as quickly as we can.
15
16
THE COURT:
There's a lot of them.
And I
May I ask, it sounds like you've already
made the cut?
17
MR. JOSSEN:
18
THE COURT:
We have.
And what -- just as a procedural matter
19
or technical matter, how did you go about doing that?
20
it sounds like you're talking about a very large review.
21
it item by item or search words?
22
MR. JOSSEN:
We did both.
Because
Was
I believe the way this
23
was done, it started with -- and I'm not going to be precise
24
with this process, because I didn't do it but was involved
25
with it.
We started with certain search words, we came with a
PROCEEDINGS
21
large universe from which we could eliminate what I will call
LISTSERV communications, which would have gone to all sorts of
people.
We then eliminated, beyond that, documents or
communications that went through several different parties
and, therefore, on their face did not raise the issues at all
that we're talking about here.
8
9
And we ultimately came down with the universe of

documents that either fall into the categories that we propose
10
to log, which is approximately a thousand documents, or the
11
larger additional universe of documents that were not on their
12
face related to credit card litigation or raising issues of
13
confidentiality.
14
probably, over this entire time period, something like 1,800.
15
And I believe that the number there is
THE COURT:
Can I ask on those, logging -- I can see
16
how creating a log that you haven't already created would be a
17
time-consuming task, but I wonder if it's necessary -- I don't
18
lightly take the idea of just disclosing somebody's e-mails;
19
but, that said, is there a concern about the confidentiality
20
of these e-mails that are not logged already that suggests
21
that they shouldn't just be disclosed on an attorney 's eyes
22
only basis to some select group from the participants in this
23
litigation?
24
25
MR. JOSSEN:
I think they raise some potential
issues as a general matter.
I'm just generally reluctant to
PROCEEDINGS
22
simply take a huge number of e-mails without there being a
specific document demand or compulsion and put them into --
even on a highly confidential basis, if it's not necessary to
do.
issues.
while it's a lot of work, I think a log probably is the most
appropriate way to proceed.
And I think there are privacy -- there may be privacy

There may be some privilege issues.
8
9
THE COURT:
And I think
I understand privacy in the sense of we
all have things we'd rather just not expose to others, not
10
necessarily a legal kind of privacy but a social one.
11
Privilege I'm a little struck by.
Given the way
12
you've characterized what's not logged, what type of privilege
13
potentially could be at issue here?
14
MR. JOSSEN:
Well, I don't think there are a lot of
15
documents in this category, but -- and I'd rather not get into
16
a specific about it, but there might be a personal privilege
17
with respect to communications about some legal question.
18
19
THE COURT:
That's a little too opaque for me to
follow.
20
MR. JOSSEN:
I recognized as I was saying it it was
21
opaque, and I'm trying not to get into detail.
22
example --
23
24
25
THE COURT:
But, for
Could you just tell me what privilege,
what legally cognizable privilege -MR. JOSSEN:
Hypothetically, if at some point when
PROCEEDINGS
23
Ms. Ravelo was leaving a firm, she asked a legal question of
Mr. Friedman, that might be subject to an attorney-client
privilege that one of them had.
THE COURT:
That one of them might have, in other
words, because the two of them had an attorney-client
relationship at some point?
MR. JOSSEN:
Exactly.
And there aren't -- you know,
I'm giving you that as an example.
there are a couple.
10
11
THE COURT:
at least.
Okay.
There are not a lot, but
Well, that answers the question,
All right.
12
I want to encourage as much as possible -- this
13
won't come as a surprise to anybody -- that we proceed by
14
consensus.
15
ideas that you've discussed here.
16
So I want to hear from your colleagues about the
Another issue before I turn the floor over to your
17
colleagues that I wanted to ask for your response about is --
18
actually, two of them -- the timing.
19
expressed a concern about the number of days, five days versus
20
15 in some instances.
21
standard for objections and whether Mr. Friedman -- and let me
22
ask, is Mr. Friedman here today?
23
from you on this as well.
24
shouldn't have standing to object.
25
Your colleagues have
And with respect to objections, both a
Okay, so I will want to hear
The objection that Mr. Friedman
Do you want to be heard on any of those issues?
PROCEEDINGS
1
MR. JOSSEN:
Sure.
24
With respect to the timing, we
selected a number of days, and I think we will responsibly
have the log, at least the first log that I described, within
the ten-day time frame.
to do it in a couple days shorter than that, but we basically
need that.
I don't think -- and we may be able
The rest of the time frame is really geared to
letting parties have an opportunity to look at the documents
and decide whether or not they want to interpose an objection.
10
And on that, if people want to shorten the time frames, I
11
think we're agnostic about those issues.
12
The standards for objections, and it seems to me
13
that if there's an objection based upon a privilege and it
14
can't get resolved -- and I would hope that there will be
15
communications between the parties or among the parties to try
16
and resolve objections -- if they can't get resolved then,
17
unfortunately, from Your Honor's point of view, I guess
18
they'll come back to Your Honor and you'll decide, based upon
19
the objection that's been made.
20
different than a discovery issue you would have in any other
21
litigation.
22
And I don't see that as any
With respect to Mr. Friedman having a right to
23
review, I mean, I think we have treated him consistently with
24
others in the stipulation.
25
that involves him as the communicator and there's no one else,
And if it's a document that comes
PROCEEDINGS
25
he would have a right to interpose an objection.
wants to do that or not I don't know and what the success of
that objection will be I don't know, but I think it's treating
him the same as all others under this stipulation.
THE COURT:
MR. JOSSEN:
All right.
Whether he
Thank you.
Then, of course, I'm happy to come back
if there are questions later.
THE COURT:
MR. JOSSEN:
Of course.
10
THE COURT:
Thank you, sir.
Yes, sir.
11
MR. OLSON:
12
THE COURT:
Mr. Olson, please come up.
13
MR. OLSON:
Mr. Olson.
Your Honor,
14
before we get to the specifics, I think -- and, again, Steve
15
Olson from Quinn Emanuel on behalf of the Home Depot, and
16
we're here with Mr. Shinder and Mr. Malone on behalf of the
17
7-Eleven group and Mr. Canter and Mr. Rubin on behalf of the
18
Target group.
19
Your Honor, I think there are two guiding principles
20
that are essential today to help us all do the right thing, as
21
Mr. Jossen suggested is everyone's goal.
22
guiding principle is, what is the overriding most important
23
interest that we're all here today to protect?
24
interest is the interest of the absent members of the (b)(2)
25
class, millions of these members who are put in that (b)(2)
And the first
And that
PROCEEDINGS
26
class without having a choice and without being given the
right to opt out or the right to choose their own counsel.
3
4
THE COURT:
I do understand what a (b)(2) class is,
so if you could get to your argument.
MR. OLSON:
And the justification for that, Your
Honor, was that the counsel they were provided, primarily Mr.
Friedman --
8
9
THE COURT:
letter.
Stop there, please.
I was struck by it.
I saw that in your
And forgive me, Mr. Friedman, no
10
disrespect intended.
11
I've had some familiarity with these proceedings over the past
12
going on ten years, including settlement negotiations that
13
occurred in court.
14
elsewhere.
15
primarily involved, and I know you weren't there.
16
I just don't recall Mr. Friedman's role.
Obviously, I don't know what happened
His name does not stand out as the one who was
So what's the basis for saying that he was primarily
17
involved, other than the kind of self-promotion that I think
18
we're all prone to in describing ourselves in promotional
19
materials, but other than that, what makes him the primary
20
actor here?
21
MR. OLSON:
Well, Your Honor, we weren't there.
22
can only go with what we can see, and I'll tell you what we
23
can see.
24
has taken very seriously the things that parties say about
25
this litigation outside of this courtroom.
We
One may dismiss it as self-promotion, but this court
And I think we
PROCEEDINGS
27
have to take seriously what Mr. Friedman said.
website, and I can hand up the materials --
THE COURT:
I've read it, I really have.
also, as I said, familiar with the proceedings.
something beyond the --
6
7
MR. OLSON:
On his own
And I'm
So is there
I think there are two more things that I
would point to.
THE COURT:
Please, yes.
MR. OLSON:
Though I -- we don't dismiss that
10
statement.
11
The second thing I would point to, Your Honor, is
12
that Mr. Friedman billed more than 9 million dollars in
13
lodestar in this case and he has been awarded 32 million
14
dollars.
15
of money that would otherwise have gone to many of these same
16
merchants that we represent today, and this Court awarded it.
17
And 32 million dollars must represent some significant
18
contribution that Mr. Friedman made.
19
Surely, that was for something.
That money came out
And then thirdly, Your Honor, the other objective
20
fact that we would point to is that in a declaration submitted
21
by the co-lead counsel firms, Mr. Friedman was described as
22
being a senior member of the co-lead counsel firms, in those
23
terms.
24
Mr. Wildfang's declaration from April 11, 2013.
25
And I would point Your Honor to paragraph 125 of
THE COURT:
All right.
PROCEEDINGS
1
2
MR. OLSON:
28
So maybe none of that is true, but
that's all we can see.
Now, the second --
THE COURT:
I can't imagine it's untrue that he is a
senior member of one of the co-lead counsel firms, but I take
it you agree that that says nothing about Mr. Friedman's role
in the litigation?
MR. OLSON:
No -- well, here's what I do agree with.
THE COURT:
No.
10
11
12
13
14
15
Tell me if you agree with that
statement, please.
MR. OLSON:
His firm was not appointed co-lead
counsel firm.
THE COURT:
Excuse me.
Do you agree or disagree
with the statement?

MR. OLSON:
I can't agree it says nothing.
I surely
16
think it indicates something that he was described as a senior
17
member of the co-lead counsel firm that had an active role.
18
THE COURT:
What does it tell me he did in the
19
litigation?
20
name appears twice, once on a notice of appearance and once on
21
a letter filed in 2006 reporting an agreement with Discover.
22
Because I did review the docket.
MR. OLSON:
I believe his
Your Honor, I can't say anything beyond
23
Mr. Friedman described himself as having a primary
24
responsibility for litigating --
25
THE COURT:
Can you just tell me what I've missed in
PROCEEDINGS
1
terms of what he did in the litigation?
2
3
29
MR. OLSON:
wasn't there.
This is all that -- as you said, I
These --
THE COURT:
No, but --
MR. OLSON:
These are the facts I can point to and
there's nothing else.
THE COURT:
I do know that you weren't there, but
I'm assuming that you don't say he was primarily responsible
or had primary responsibility for the settlement without
10
having found something factual to base that on.
11
wondering what it was that I've missed.
12
MR. OLSON:
I'm just
Your Honor, we would have no reason to
13
believe that these statements that were on Mr. Friedman's
14
website from some time that class counsel had every
15
opportunity to review were false.
16
false.
If they're false, they're
17
THE COURT:
I'm just asking you.
18
MR. OLSON:
I've said everything I know.
19
20
everything I know.
I really -I've said
This is everything --
THE COURT:
So, in response to my question, what
21
have I missed about what Mr. Friedman did in the litigation,
22
the answer -- I don't want to put words in your mouth, but
23
since you're not answering it, I need to -- I want to make
24
sure you understand what I'm gleaning from what you said.
25
I take the answer as being no, you missed nothing,
PROCEEDINGS
30
there's the notice of appearance, the statement in the report
in 2006 about Discover and there's nothing else on the docket
that shows his involvement.
4
5
6
MR. OLSON:
We certainly include the 32 million
dollars he was awarded, yes.

THE COURT:
All right.
So I did interrupt you when
you told me that he was one of the primary movers in the
settlement.
Go on, please, with your presentation.
MR. OLSON:
The second factor I think, Your Honor,
10
that's important in terms of doing the right thing for the
11
(b)(2) class members is timing.
12
as promptly as we can.
13
why as promptly as we can, because we have a fully briefed
14
appeal that could be set for oral argument any day, and I
15
assume Your Honor understands that point as well.
16
17
THE COURT:
We need to resolve this issue
We need to find out what happened and
Yes, of course, I do.
Have you been
given any schedule from the Second Circuit?
18
MR. OLSON:
The argument date has not been set.
19
THE COURT:
If you know, and you may well not know,
20
but when is the next argument date for which they have not yet
21
released a schedule?
22
MR. OLSON:
I do not know that.
I do know that the
23
parties, including just yesterday, who are arguing the appeal
24
are submitting letters to the Second Circuit indicating their
25
availability in March and April.
PROCEEDINGS
1
THE COURT:
I see.
31
And has anyone told the panel
that you've got this issue pending and you don't want to be
caught flatfooted or have to argue it before you know certain
information?
5
6
Have you raised that with the Circuit?
MR. OLSON:
We have raised nothing with the Second
Circuit yet.
THE COURT:
I see.
Okay.
Well, I take it if they
give you an argument date while you feel you need to get
additional information, you're going to act appropriately to
10
preserve your perceived rights there.
11
MR. OLSON:
We would act appropriately, correct.
12
THE COURT:
Okay, go ahead.
13
MR. OLSON:
All right.
So, with those two
14
principles in mind, I'm happy to turn to the specifics of the
15
issues we've raised, in an effort to reach consensus here
16
today.
17
The first is the question of objective standards,
18
and we do certainly think the language is not objective and is
19
not clear.
20
THE COURT:
But based on what Mr. Jossen said, what
21
do you think is being left out that he hasn't offered to
22
include in a second tranche?
23
MR. OLSON:
Well, we appreciate the offer and we
24
think it's an acceptable way to move forward, but with
25
slightly more specifics, here's what we propose:
There's the
PROCEEDINGS
32
stage one log of the documents that are already in the process
of being logged, we understand.
soon as possible.
appreciate that.
We would like it provided as
If it can be within ten days, we would
With regard to the stage two documents, as Your
Honor correctly pointed out, with regard to the great majority
of them, it's hard to see how there could be any possible
reason not to immediately provide them and we would request
that they be immediately provided.
10
Now, if there is a category, a subcategory within
11
those of documents that may in some sense be privileged, we
12
would be fine with that subcategory being logged, but it's
13
hard to imagine how discussions of vacation plans, discussions
14
of investments and those types of things should not just be
15
immediately provided.
16
THE COURT:
None of us -Forgive me.
But it's also somewhat
17
equally difficult, at least for me, to understand how you're
18
going to use information like that to protect what you
19
perceive to be your client's rights, because I take it that
20
inherent in the exercise is an assumption that there was an
21
inappropriate relationship in terms of the communications that
22
were going back and forth.
23
What more do you glean from the specifics of they
24
were discussing a vacation or family matters?
25
think you might find there.
Assume what you
What would that do to buttress
PROCEEDINGS
1
your argument?
2
3
33
MR. OLSON:
To be clear, Your Honor, we've made no
assumptions and we've gleaned nothing.
THE COURT:
No, I mean you want something here and I
want to make sure you get a fair shot at making the arguments
that are there to be made, but I hope to do so in ways that
don't needlessly interfere with people's privacy, even those
who have been accused of wrongdoing.
what you think might be there that would be aha, this is what
10
we can use.
11
12
And I'm just wondering
MR. OLSON:
We don't know, but I'm happy to tell you
what we think are possibilities.
13
THE COURT:
Sure.
14
MR. OLSON:
The facts that we see indicate that
15
there are many hundreds of communications between these two
16
people that were of such concern that we're all here today.
17
Many hundreds exchanged just over the time period where Ms.
18
Ravelo --
19
20
THE COURT:
Yes, we get it.
We all understand that
that is why we're here today.
21
MR. OLSON:
So the question is why --
22
THE COURT:
The question that I'm trying to ask, and
23
I am not trying to be difficult, but when I ask a question
24
it's because I have something in mind that I'm hoping you can
25
shed some light on, and if you go on to something else I'm
PROCEEDINGS
1
2
34
still left wondering.

So what might you find in this second tranche of
documents that, by definition, don't include documents from
this litigation or from the Amex litigation and are about more
personal details?
communication like that contain that you can imagine that
would be useful in litigating for your clients?
8
9
What argument would some kind of
MR. OLSON:
I hope Your Honor appreciates that these
are difficult questions to answer.
I'm doing my best.
10
THE COURT:
Yes.
11
MR. OLSON:
We don't know, Your Honor, what this
12
13
personal relationship was.

THE COURT:
Assume the worst.
Tell me what the
14
worst case scenario is that you would want to bring to the
15
Court's attention.
16
17
MR. OLSON:
The worst -- Your Honor, in this
circumstance, there could be extreme worst case scenarios.
18
THE COURT:
Tell me.
19
MR. OLSON:
One worst case scenario could be that
20
there was a romantic relationship.
21
husband has been indicted not only for the scheme that was
22
mentioned here but for being a narcotics trafficker.
23
know if that had anything to do with this.
24
25
THE COURT:
Your Honor, Ms. Ravelo's
We don't
There are all sorts of bad things that
you can imagine that might be going on, but what I'm trying to
PROCEEDINGS
35
get you to focus in on I think for the fourth time now, so
this will be the last and I'll move on if I despair of getting
a straight answer, what information might you find there that
you could use in aid of your client's arguments?
MR. OLSON:
I'm happy to answer that question.
If
there was a compromising financial relationship, if there was
a compromising personal relationship that would impact the
ability of Mr. Friedman to independently represent the (b)(2)
class members, that would be an incredibly significant fact.
10
And the two matters I just described are the type that could
11
lead to that type of compromised relationship.
12
THE COURT:
But I take it the fact that they're
13
sharing communications, including confidential privileged
14
materials, outside of approved protocols is itself a basis for
15
making that argument.
16
or not, I don't know, but there is something inappropriate in
17
the communications itself, based on communications involving
18
matters in this case.
I don't know if it's a persuasive one
19
What I'm trying to understand is what you add to
20
that argument by saying, oh, well, now we know why they're
21
doing that.
22
MR. OLSON:
And this is what I was trying to answer
23
at the beginning.
I think the question of why is the
24
essential question.
25
materials are being disclosed may be significant, but that may
Yes, the fact that some confidential
PROCEEDINGS
36
just be the telltale sign of a greater compromised position
that is motivating it.
e-mail.
e-mails.
was happening, and that's the most significant one of all.
Was there some loyalty that was compromised here?
independence compromised here for some reason?
8
9
That may not be reflected in every
That may not be reflected in all but a handful of

But there's an answer to the question of why this
THE COURT:
Was
You're raising two different concepts
and, frankly, I'm very surprised.
I would anticipate on your
10
side saying, it doesn't matter why his independence is
11
compromised, if we can show that he's not acting solely in his
12
client's interests, notwithstanding the fact that he's one of
13
many, many people involved in these negotiations, everyone
14
else of whom also had to sign off on it, the fact that his
15
loyalty can be questioned is a basis for undoing the
16
settlement.
17
doesn't matter why his loyalty can be questioned, we win.
18
you say you have to explain why, I think you're making the job
19
tougher for you.
I would think that at that point you say, and it

If
20
MR. OLSON:
No one said we have to do it, but --
21
THE COURT:
You want to.
22
MR. OLSON:
We want to be prepared to do it, because
23
we're going to make that argument and class counsel will say,
24
ah, but none of it mattered because these disclosures didn't
25
really affect what happened, they didn't really affect what
PROCEEDINGS
1
Mr. Friedman did when he was out there in the mud litigating
the case.
but there was no bigger issue.
issue, and if there is we need to know it.
5
6
7
These were just -- they were inappropriate,

But there may be a bigger
THE COURT:
Okay.
Anything else that you want me to
MR. OLSON:
Well, I'm happy to -- yes, there is,
address?
Your Honor.
himself should have the right to object.
We've raised the issue about whether Mr. Friedman
10
THE COURT:
Why not?
11
MR. OLSON:
Because he's already disclosed these
12
13
documents to an adversary.
THE COURT:
So it's hard to imagine.
Let's take, for example, Mr. Jossen's
14
hypothetical of an attorney-client communication between
15
himself and Ms. Ravelo.
16
but if there is, why should he not object?
17
37
MR. OLSON:
I don't know if that's there or not,
If Your Honor instructed Mr. Friedman
18
that the only possible basis would be if there was actually an
19
attorney-client as opposed to a confidentiality.
20
THE COURT:
I don't know.
Lawyers are very
21
imaginative and rightly so, and I don't think I'm in a
22
position to anticipate every objection that somebody might
23
properly have.
24
telling somebody, even if you think you have a legal right,
25
you must stay silent and not advocate it.
And so I'm troubled with the prospect of
PROCEEDINGS
1
38
I take it you wouldn't want me to tell you, here's a
broad category of issues on which you may not be heard.
Even
if your objections on one of those issues might not have
merit, at a minimum, you'd want your day in court; right?
MR. OLSON:
What we would ask, Your Honor --
THE COURT:
Wouldn't you?
MR. OLSON:
I would want my day in court, correct.
THE COURT:
So why not Mr. Friedman?
MR. OLSON:
What we would ask Your Honor to do is
10
provide guidance about the types of objections that may be
11
made and may not be made.
12
13
THE COURT:
than don't make an objection that you believe to be frivolous?
14
15
Should the guidance be anything more
MR. OLSON:
Yes, we think the guidance should be
more than that.
16
THE COURT:
Don't make an objection that you believe
17
to be meritless?
18
guidance?
19
I give the kind of guidance that you seem to have in mind
20
without prejudging what the response to an objection would be?
21
22
Seriously, how can I give this kind of
I'm not trying to be facetious at all, but how can
MR. OLSON:
Well, I think Your Honor could provide
guidance that --
23
THE COURT:
Give me a proposal.
24
MR. OLSON:
As in our letter, that the Court's
25
default presumption is that documents will be disclosed that
PROCEEDINGS
39
the general qualms about privacy and confidentiality should
not interfere and the Court does not want the objection
process to unnecessarily delay these disclosures from being
made and parties need to take care to be very selective in the
objections they make.
THE COURT:
That's what we would request.

I wholeheartedly agree, Mr. Olson, that
all parties should be selective about arguments that they
make.
proceedings, has not always been fulfilled.
10
But that hope, which extends to all of these

I don't think I'm
going to single out any one party for that kind of admonition.
11
MR. OLSON:
And, Your Honor, we'd ask that you make
12
that admonition to all parties.
13
THE COURT:
Okay.
That's our request.
Please, everybody, don't make a
14
meritless objection or argument.
15
anybody's right to advocate as they think appropriate,
16
consistent with Rule 11 and Section 1927, the arguments they
17
think should be made on behalf of their client; but beyond
18
that, I am reluctant to wall off a particular category of
19
arguments, because I don't want to prejudge.

Okay.
I don't want to compromise
20
MR. OLSON:
21
Next, Your Honor, we believe that there is
22
additional information that should be provided on the log.
We
23
raised this in the letter.
24
documents have been provided to the grand jury or to any other
25
third parties by Willkie already.
The question is whether these
It's just a matter of a
PROCEEDINGS
40
wire in and a column on a log and it could inform any
privilege claims that are made.
What we'd also like to request from Your Honor is
that Mr. Friedman's own files are subjected to this process.
We don't see any principled reason for omitting those.
6
7
THE COURT:
10
You want to know if
they've been provided to the grand jury or who else?
8
9
Go back a step.
MR. OLSON:
Or to any third parties.
And we cited
case law in our letter about why that could be significant to

a privilege claim.
11
THE COURT:
Right.
I get that.
Okay.
12
MR. OLSON:
So next, Your Honor, we think Mr.
13
Friedman's own files from his law firm or any others where he
14
communicated with Ms. Ravelo should be subjected to this
15
process.
16
right thing in raising this in its log and disclosing these
17
documents, but the other side of the communications is not
18
doing it.
19
There's no principled reason why Willkie did the
We know under circumstances like this, one can
20
easily imagine that Ms. Ravelo deleted documents.
21
that Willkie is talking about documents that were at Willkie,
22
which at the earliest showed up there in late 2010.
23
been told that these communications go back earlier.
24
Mr. Friedman's files should be subjected to this.
25
be -- the process we're happy to discuss, we're happy to have
We know
We've
We think
It should
PROCEEDINGS
41
the class counsel that we have great respect for do the
logging, and it should be subjected to whatever process we
reach agreement on today.
Then finally, Your Honor, we would request that the
Court ask Hunton & Williams whether it has Ms. Ravelo's
electronic files from the period she was there up until late
2010, and if they are there that we have a similar process for
those files.
THE COURT:
Okay.
10
MR. OLSON:
11
THE COURT:
All right.
Thank you.
Before I hear
12
from anyone else -- oh, I'm sorry, before you sit down, in
13
terms of the -- adding the column to the chart -- and I'm
14
trying to balance among a number of competing interests here
15
your understandable desire to proceed as quickly as possible.
16
Given that it sounds like there's a log that is
17
largely ready to go and the likelihood that many of the things
18
in which you'd be interested may end up being provided anyway
19
after the protocol that's been proposed, would we perhaps be
20
better off, in terms of efficiency, having that question about
21
has something been disclosed to the grand jury or another
22
third party await a point at which you've expressed an
23
interest in the document that's logged and somebody is saying,
24
no, we've got a privilege, because I think at that point we'd
25
have a much smaller category to look at.
PROCEEDINGS
1
42
And the other concern I have is that while a witness
providing information to a grand jury is under no obligation
of secrecy with respect to the grand jury, there are
sensitivities to the integrity of the investigation that are
compromised if there's a wholesale disclosure of what's been
provided.
7
8
MR. OLSON:
Your Honor, we appreciate the point.
That would be acceptable.
THE COURT:
Okay.
All right.
So I'm going to ask
10
the parties participating in drafting the protocol to go back
11
to include that as a piece of how objections to disclosure are
12
addressed.
13
haven't yet heard from?
14
Okay.
Anybody else wish to be heard that I
MR. KOROLOGOS:
Sir.
Good afternoon, Your Honor.
Phil
15
Korologos with Boies, Schiller & Flexner for American Express.
16
We're not a party here, but we sort of show up in this two
17
ways:
18
here, and Your Honor may recall there were some requests for
19
additional documents to be produced and we won a motion to
20
compel.
21
22
23
One, we did produce some documents as a third party
THE COURT:
I recall.
You were objecting to the --
you were an objector to the settlement.

MR. KOROLOGOS:
Right.
And then we're also here
24
because we produced documents in our own case that apparently
25
have then been transferred on to Ms. Ravelo.
So there are
PROCEEDINGS
43
sort of two types of confidential information for American
Express involved here:
order before Judge Garaufis; and then second, documents that
would be covered by protection we asked for and received as a
third party here.
One, covered only by the protective
And with respect to that, there are a few comments
I've got to the language of the log.
when we read through it there were a couple of areas where
there were some brackets, specifically --
10
THE COURT:
You might have noticed
I do, but I don't recall what they were,
11
so let me just pull out my copy so I can keep up with you.
12
ahead.
13
MR. KOROLOGOS:
First is in paragraph two.
Go
And let
14
me first express the general principle that I'm coming from
15
here, which is that our interest is that American Express's
16
confidential information not go to anybody that hasn't seen it
17
yet.
18
THE COURT:
Sure.
19
MR. KOROLOGOS:
And as a result, in paragraph 2, in
20
the bottom of the second page of the draft stip, there is the
21
bracketed portion there "and objectors."
22
American Express documents that have only been given to
23
parties in the American Express case ought to only be reviewed
24
by the parties in the American Express case and not by
25
objectors that have not had access to those documents in that
Our view is that
PROCEEDINGS
1
44
case or in this case.
And so we believe that language should not be
included and would not be willing to sign onto a stipulation
that has our documents going to somebody that hasn't yet had
an opportunity to receive them.
THE COURT:
But I take it that, consistent with that
principle, you can see somebody who doesn't get it under
paragraph 2 then having the ability to say, we should still be
able to see it, and have that go through the process of
10
negotiation and, if necessary, judicial oversight.
11
MR. KOROLOGOS:
Correct.
My position here is to
12
simply get the first step protocol defined in the first
13
instance.
14
already have it.
15
the log, they ought to have an opportunity to see that, I
16
would fight about that if we have to if we can't work it out.
17
The only ones that ought to see it are those that

If somebody has an argument that, based on
THE COURT:
I'm going to ask you to indulge me and
18
let me just see if anybody wants to be heard on that, because
19
I'll get to these points one at a time.
20
21
Anybody have a problem with that?

Okay, good.
22
None of you guys?
So let's take out "and objectors."
MR. KOROLOGOS:
Okay.
The second area where there are some
23
brackets, where we're talking about brackets is in paragraph
24
4.
25
because, consistent with my principle that American Express
I don't have a position one way or the other on that
PROCEEDINGS
45
information ought not to go to somebody that hasn't received
it already, now that we've taken out the objectors in the
definition of Amex protective order parties, I don't care
whether it's the producing party, which would most often be
American Express, or the others that already have the
documents in production anyway.
THE COURT:
8
9
This falls by the wayside with the other
thing, okay.
MR. KOROLOGOS:
But there's a related issue.
Your
10
Honor said lawyers can be imaginative and I'm going to be
11
imaginative here on paragraph 4.
12
concern that paragraph 4 says that if a document is a
13
communication -- remember the stipulation provides
14
communications and just protected, but it recognizes that
15
there may be some documents that are both.
16
communication perhaps from Mr. Friedman to Ms. Ravelo that
17
contains American Express confidential information.
18
I've got a little bit of a
For instance, a
Some of these documents that we have seen contain
19
summaries of American Express documents.
20
conceivable that such a communication occurred.
21
So this is
Now, depending upon how communications occurred, it
22
is possible that by sharing a communication with all of the
23
parties that received a communication or some part of e-mail
24
in nested e-mails might end up getting American Express
25
information that hadn't previously had it.
PROCEEDINGS
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46
For instance, if there's an e-mail exchange between
two parties, perhaps among plaintiff's counsel, and then
there's a subsequent e-mail exchange that adds to that e-mail
exchange Amex information, if that communication is then
shared with everybody, including the parties to the first
communication that didn't have the American Express
information, they might end up with the American Express
information when they didn't previously have it.
So our interest is to keep that out.
I think there
10
may be a few different ways to do it.
11
any information concerning American Express from such
12
communication before they're communicated.
13
these all look like, I don't know whether that's a substantial
14
task or an insubstantial task.
15
One is to simply redact
Not knowing what
Another would be, and this is a change we suggest to
16
the log and I understand Willkie Farr is willing to do this,
17
is just to simply have a checkbox in the log does it contain
18
American Express information, information that appears to have
19
originated with American Express, yes or no, so that the
20
parties can figure out, well, it's got an issue that we've got
21
to resolve, whether there's a protective order or not.
22
helps my life, because then I can say, I don't care about
23
documents that are just communications that don't have
24
anything to do with American Express.
25
It
But I think, in short, my goal is to ensure that
PROCEEDINGS
47
there is not a slippage of our confidential information to
parties that don't previously have it.
THE COURT:
Anybody want to be heard on that?
I'm
less interested in how it's -- what the fix is than if anybody
objects to the idea that there should be a fix.
MR. SHINDER:
Mr. Shinder?
I want to make sure I understand the
position, because I mean, our position is when we say we're
not contesting for present purposes Mr. Korologos's argument
that American Express should have sort of a first pass at
10
seeing its materials before and then, you know, if necessary,
11
we'll contest, probably before Judge Garaufis, any issues,
12
we're fine with that, and on that basis we're okay with
13
getting past today.
14
What we're not fine with -- and I just want to make
15
it clear -- is any kind of presumption that just because
16
there's American Express information that's embedded somewhere
17
or it's summarized or it's just passed along from Mr. Friedman
18
to Ms. Ravelo that American Express has some right to shroud
19
that from ultimately being disclosed to the objectors in the
20
American Express proceeding.
21
And as I say this, I realize this is probably beyond
22
your province.
I just want to put on the record that it's
23
our -- it will be our position, and it's not our position in
24
relenting today, but that position is tenable.
25
make that clear.
I just want to
PROCEEDINGS
1
THE COURT:
48
Look, for today's purposes, we don't
need to work that fight out.
So what I'm going to encourage
you guys to do is to find a way -- perhaps this American
Express checkbox on the log is the way to do it, but I'm sure
you guys can work out a way to implement the principle that
you agree on, how this initial cut will be done.
Anything else, Mr. Korologos?
MR. KOROLOGOS:
Okay.
One issue that relates to an issue
that Mr. Olson addressed, which is production to the U.S.
10
Attorney's Office.
11
One may be a privilege issue, which isn't, again, my issue,
12
but there are also documents that have been, I understand,
13
communicated to the U.S. Attorney's Office that contain
14
American Express confidential information.
15
There again, I think there are two issues.
We've taken steps, spoke with that office to ensure
16
that the confidentiality of those documents remains.
17
advised us that to the extent they can tell us things under
18
Rule 6(e) that they will take appropriate steps to ensure that
19
any productions that occur in that case will occur pursuant to
20
a protective order.
21
THE COURT:
22
MR. KOROLOGOS:
23
24
25
They've
I'm sorry, "they" who?

U.S. Attorney's Office in the
District of New Jersey.

THE COURT:
Yes, of course.
The U.S. Attorney's
Office has some real limitations on what they can tell you
PROCEEDINGS
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49
about that.
MR. KOROLOGOS:
Right.
And so they've got
limitations on it.
as to what they've produced, so I have a general understanding
from them.
I have an understanding from Willkie Farr
So we have taken steps to preserve the
confidentiality of American Express information that has ended
up with the U.S. Attorney's Office.
some cases and there may be a dispute with others that I'm not
10
involved in about whether privilege is maintained, it would be
11
our position, again perhaps to argue in a different court at a
12
different time, that the production to the United States
13
Attorney's Office of information that is confidential American
14
Express information does not make that information any less
15
confidential or not covered by protective orders.
16
THE COURT:
Okay.
17
not going to weigh in on that.
18
MR. KOROLOGOS:
19
THE COURT:
And while they've cited
I mean, look, as you guessed, I'm
All right.
And I want to be clear.
20
don't think anybody, in reaching an accord about how we're
21
going to go about logging and sharing information, is today
22
making any waiver.
23
disclosing information, it's in the nature of the beast, but
24
we're trying to get at a process that protects your rights to
25
assert your privileges.
There may well be waivers that attend to
PROCEEDINGS
1
MR. KOROLOGOS:
THE COURT:
Anyone else that I haven't heard from
who wishes to be heard?
Okay.
Mr. Friedman, can I ask you to come up?
MR. ISSACHAROFF:
Issacharoff.
50
Your Honor, I'm Samuel
I'm representing Mr. Friedman.
THE COURT:
Okay, by all means, Mr. Issacharoff.
All right.
So let me ask you, I guess the threshold
question I have for you is whether your client is willing to
10
participate in the same sort of protocol with respect to
11
information he may have in his files about communications with
12
Ms. Ravelo?
13
MR. ISSACHAROFF:
We would object to that, Your
14
Honor.
And we haven't worked through exactly all the
15
materials that were available that Willkie Farr produced from
16
Ms. Ravelo and we haven't worked through everything that Mr.
17
Friedman has yet, but we don't believe any of this is
18
relevant, Your Honor, and we will submit an objection on that
19
grounds.
20
THE COURT:
I mean, we don't have to resolve it
21
today, but give me an understanding of why it wouldn't be
22
relevant.
23
MR. ISSACHAROFF:
Well, Your Honor, to do that, I'd
24
like to step back just one second.
The reason we're here
25
today is because Willkie Farr discovered in the files of one
PROCEEDINGS
51
of its lawyers documents which appear to be from the Amex
litigation which appear to be either privileged documents
there or work product in the Amex litigation.
From our point of view, and we tend to agree with
American Express on this, that's a matter before Judge
Garaufis.
orders in that case.
positioned to resolve as to whether, in fact, those documents
were privileged, whether, in fact, they were under protective
10
That's a matter that's pursuant to the protective

There is nothing that this Court is best
order.
11
THE COURT:
Forgive me for interrupting, but just as
12
a factual matter, I thought there was also an indication from
13
Willkie Farr that there were MasterCard protected information,
14
there was MasterCard protected information within those
15
communications.
16
MR. ISSACHAROFF:
That is less clear to me, Your
17
Honor.
18
descriptions.
19
information going in the other direction.
20
I have read the communications.
I have read the
It is less clear to me that there is protected
What is clear is that in the course of negotiations
21
that there were documents produced by Mr. Friedman to Ms.
22
Ravelo.
23
Some of them appear in these files.

There are other documents that at this point, as far
24
as we can tell -- and we have not concluded.
25
brought into this, Your Honor, so -- but we have not concluded
I just got
PROCEEDINGS
52
our internal review.
have no idea how they appeared or where they came from.
THE COURT:
There are some documents that we just
But if I've got Willkie telling me that
we have reason to believe that included among these private
communications between Ms. Ravelo and Mr. Friedman was
MasterCard protected information, I think I've got a basis for
saying, whatever else may happen in the Amex case, I've got an
obligation to --
9
10
MR. ISSACHAROFF:
We don't disagree.
We don't
disagree with that.
11
THE COURT:
So how do I get to the bottom of that if
12
we don't have a process for Mr. Friedman's files similar to
13
that with respect to Willkie's and with respect to Hunton &
14
Williams'?
15
And I'll be asking them next.

MR. ISSACHAROFF:
If the question is if there was a
16
request made to Mr. Friedman to produce any documents from his
17
files that had protected 1720 -- I'll just use 1720 as the
18
term for the MasterCard documents, but protected 1720
19
information, we'll do that.
20
THE COURT:
21
on here, and understandably so.
22
But that's clearly not all that's going
MR. ISSACHAROFF:
Well, Your Honor, what's going on
23
is actually quite complicated, because Mr. Friedman and Ms.
24
Ravelo have known each other since they were associates at
25
Sidley and Austin in 1992, and this is a longstanding
PROCEEDINGS
1
friendship.
other.
The families know each other.
53
The kids know each
And so what we are being exposed to even in this
proceeding is just rather promiscuous character insinuation,
based upon the fact that there were some files here.
hear from Mr. Olson, maybe they're having a romantic affair.
We hear from Mr. Olson, oh, I'd like to raise the issue of the
criminal difficulties of Ms. Ravelo's husband.
So we
None of this has anything to do with what's going on
10
here, and it's not an occasion, because there were some Amex
11
materials discovered, to simply go into people's lives for the
12
prurient interest of what may be found there.
13
THE COURT:
I feel compelled to break in.
I pressed
14
Mr. Olson, I think somewhat unwillingly for an understandable
15
reason, to describe the worst, so I don't attribute to him any
16
prurient interest.
17
But there's a legitimate area of concern here where
18
the Court has to sign off on the independence of and on the
19
arm's length nature of the negotiations that produced the
20
settlement that's under review.
21
I think there is a great deal more to the story of
22
how that settlement is produced and how it's properly
23
characterized than simply Mr. Friedman's role or Ms. Ravelo's.
24
But I can't agree that we are only interested in whether there
25
is, as you call it, 1720 material that passed between them in
PROCEEDINGS
54
ways outside the normal channels, more transparent to the
parties in the case.
MR. ISSACHAROFF:
Your Honor, I'd like to take then
the opportunity.
a protocol.
of documents, something like that.
attachment.
it on the spot.
Perhaps communications that involve the exchange

Anything with an
Let us -- I would like to -- I can't come up with

I would like to --
THE COURT:
10
11
We'd like to produce -- propose to the Court
I'm not asking you to.
MR. ISSACHAROFF:
I would like to have the
opportunity to propose something to the Court.
12
THE COURT:
Well, what I'd like you to do,
13
Professor, is first consult with the other parties and come up
14
with as much of an agreement of a protocol as you can and come
15
to me with areas of disagreement rather than propose something
16
to me in the first instance.
17
MR. ISSACHAROFF:
On basic questions that have been
18
presented before the Court, on the stage one, we really have
19
no issue.
20
think at the same time that the sorting out of materials as
21
counsel for American Express just proposed, the sorting out of
22
materials should be done by counsel in American Express first,
23
to see how much of that can be put in the proper people's
24
hands before anything else is done there.
25
We think that the log is perfectly fine.
THE COURT:
But we
You're speaking now about the protocol
PROCEEDINGS
1
55
regarding Willkie files?
MR. ISSACHAROFF:
THE COURT:
Yes, yes.
Look, I think unless there's
something -- some objection I haven't heard yet, I think we're
all essentially on the same page about that.
MR. ISSACHAROFF:
THE COURT:
Right.
I really want to focus your attention on
a similar protocol for Mr. Friedman's files.
MR. ISSACHAROFF:
We're not in agreement, Your
10
Honor, on stage two.
11
We don't think that if the first cut by the Willkie lawyers
12
does not identify anything having to do with the 1720 or the
13
Amex litigation, that that should be the end of the matter.
14
We don't think stage two should happen.
We see no purpose whatsoever in going beyond.
We
15
already have outside counsel from Dechert making an assessment
16
of these files for these purposes, and we see no reason to go
17
beyond that, keeping in mind that this is a settlement which
18
was fully realized.
19
Court as to the settlement processes.
20
It was up on appeal.
21
negotiated the settlement who had nothing to do with the
22
exchange with Ms. Ravelo.
23
There was a discovery order from this

It was fully briefed.
And sitting at table are people who
So there's not a threshold that gets us to why
24
should we start a searching expedition into the private lives
25
of people.
PROCEEDINGS
1
THE COURT:
56
Well, look, if and when we get to the
point where somebody is seeking that stage two material we'll
get there, but to the extent that the party that has it is
willing to engage in the process of creating a log, I don't
see any reason to prevent them from doing so.
6
7
And I just want to make sure I understand.
saying I should order Willkie not to create such a log?
8
9
Are you
MR. ISSACHAROFF:
That would be our preference, Your
Honor, or, in the alternative, to allow us to review the log
10
before they produce it to anybody, to make sure that in the
11
log descriptions themselves there is not the disclosure of
12
information which is irrelevant to this process or is
13
privileged in some fashion.
14
THE COURT:
Well, you know, I'm hard-pressed to see
15
why anybody other than the party from whom disclosure is
16
sought should have the task of producing a log.
17
avoid --
18
MR. ISSACHAROFF:
19
THE COURT:
One way to
I agree with that, Your Honor.
One way to avoid having this taken out
20
of your client's hands is for your client not to send
21
communications to somebody else who might be in a position to
22
then produce them, but having done so, I think it's up to the
23
party that has them now to log what they have and let
24
everybody see the log.
25
they'll ask for it; and if you want to object at that point,
And if somebody wants disclosure
PROCEEDINGS
1
57
you object.
MR. ISSACHAROFF:
Your Honor, when we began this
morning, the position taken by Mr. Jossen was that they did
not want to do a stage two log at all, and we would endorse
that position.
this morning was that there would be a stage two.
So it's not as if the default when we came in
THE COURT:
Right.
I don't know if you were in the
room when Mr. Jossen said that they would be willing to do it.
That wasn't their initial position, but they are willing to do
10
it.
11
your client would rather they don't, not that he doesn't have
12
a right to object to a disclosure if he has some cognizable
13
privilege, but in terms of creating a log, I don't see why
14
that isn't the appropriate thing to do.
15
16
17
So I'm not going to prevent them from doing it because
MR. ISSACHAROFF:
that and we have no choice.
THE COURT:
Okay.
Okay.
Your Honor, we will accept
We will accept that.

All right.
Any other -- so what
18
I would like the relevant parties to do is to get together
19
with respect to creating a protocol for Mr. Friedman's files.
20
If there's objection to some or all of it, tee that up for me
21
to decide, but let's do that promptly.
22
MR. ISSACHAROFF:
Your Honor, I'd also like to
23
preserve one objection that's going to come up later on, and
24
that is the idea that by disclosing something to an adversary
25
you waive work product and everything else.
In everything
PROCEEDINGS
58
from routine litigation, especially to these kinds of mass
cases, there are constant communications from counsel across
the aisle, and some of them are we are going to file the
following unless you agree to this or that.
exchange draft complaints across the aisle.
Sometimes people
That cannot constitute a waiver of
attorney-client -- I'm sorry, of attorney work product if it's
done in the course of seeing if there's an accommodation, a
negotiation that can be had between the parties.
10
So we want to insist that we will object to the
11
production of work product from the Amex case even if it has
12
been disclosed to Ms. Ravelo, and, depending upon the
13
situation, it may be entirely privileged as we read the
14
materials and the cases.
15
THE COURT:
I assume before you assert any work
16
product privilege in that regard, and tempted as I might be,
17
I'm not going to weigh in on the merits of the argument that
18
you've made, but I take it procedurally, such an objection
19
would be made with the consent of the client whose work
20
product privilege would be asserted rather than by your
21
client, who is only acting, at least was only supposed to be
22
acting as the agent of the client.
23
MR. ISSACHAROFF:
In a class action like in Amex,
24
there are many, many clients.
25
diffuse.
The client base is rather
Mr. Friedman, as attorney -- and his co-counsel, as
PROCEEDINGS
59
attorneys for the class, were producing work product.
sure who they would have to get the authorization from.
THE COURT:
MR. ISSACHAROFF:
I'm not
Well, there's -I'm talking specifically about
materials produced by these lawyers in the Amex litigation to
organize --
THE COURT:
All right.
I think for purposes of
representing the interests of the class, if somebody wants to
object they can do so, but I take it that -- in what is
10
clearly an unusual situation, the decision about whether to
11
assert the privilege belonging to the client might not best be
12
made solely by Mr. Friedman.
13
class counsel weighing in on whether there's a work product
14
privilege to be asserted or not.
15
MR. ISSACHAROFF:
So, for example, we could have
Your Honor, I'm referring -- this
16
is, once again, why I think that much of this has to be sorted
17
out in Judge Garaufis's court.
18
documents produced by Mr. Friedman, who is class counsel in
19
Amex.
20
THE COURT:
21
MR. ISSACHAROFF:
22
23
I'm referring to Amex
But not the only one.

Not the only one, no.
He's one of
two lead counsels.

THE COURT:
Let's have somebody who is -- under
24
these circumstances, Mr. Friedman has an inherently divided
25
interest here.
So somebody whose only interest with respect
PROCEEDINGS
1
60
to production of such documents is as counsel for the class --
MR. ISSACHAROFF:
Your Honor, we have no problem
with that.
We have no problem.
with our co-counsel in Amex to get all class counsel to assert
the privilege where we see it's appropriate.
THE COURT:
MR. ISSACHAROFF:
THE COURT:
Okay.
We will gladly collaborate
Anything else?
No, Your Honor.
Who's here for Hunton & Williams?
Mr. Wildfang, do you want to be heard?
10
MR. WILDFANG:
11
THE COURT:
I'm happy to go last, Your Honor.
Hunton & Williams is here?
No?
Okay.
12
Well, what I'll ask you folks to do is be in touch in the same
13
way with Hunton & Williams about pursuing with them the
14
questions about whether they, like Willkie and like Mr.
15
Friedman, have documents that need to be reviewed, subject to
16
some similar protocol.
17
All right, Mr. Wildfang.
18
MR. WILDFANG:
Your Honor, I'll be brief.
I want to
19
make three points.
20
when we learned of this on February 10th from Willkie Farr.
21
We want to be of assistance to the Court in sorting these
22
issues out.
23
Class counsel were completely surprised
We feel that the first thing that should happen is
24
the log should be prepared.
It's a little hard to know what
25
features of the proposed stipulation might be good or bad or
PROCEEDINGS
61
problematic without having some idea of what the documents
are.
to the stage two material.
And as far as the class is concerned, we're agnostic as
THE COURT:
So look, I think we've resolved some
difficult -- or gotten towards resolving some difficult issues
and some not so difficult ones.
to confer, finalize the stip in line with what we've discussed
today and submit it to me within a week.
that same time give me a report on your progress towards a
I'm going to ask the parties
And also, within
10
similar protocol concerning Mr. Friedman and Hunton &
11
Williams.
12
We do have a status conference that had previously
13
been scheduled for March 5th.
14
want to get everybody to weigh in, because I want to get a
15
coordinated response, but give some thought to whether you all
16
think it's going to be useful to keep that on the calendar or
17
not.
18
anticipated we were going to be raising then, but just let me
19
know.
20
sense, given that we've all been together today.
21
22
23
We don't need to and I don't
I don't know if there are any other issues that anyone
I'm happy to cancel or reschedule it as you think makes
With that, nice seeing you all again.

from you next week.
I'll hear
Have a good day, everybody.
(Whereupon, the proceedings were adjourned.)
24
25
62
1
I certify that the foregoing is a correct
transcript from the record of proceedings in the
above-entitled matter.
4
5
6
/s/
Sherry Bryant
Sherry Bryant, RMR, CRR
Official Court Reporter
7
8
9
10
11
12
13
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1

UNITED STATES DISTRICT COURT

SHERRY BRYANT, RMR, CRR

For the Plaintiff Target Group:

KENNY NACHWALTER, P.A.

GRANT & EISENHOFER P.A.

KEATING MUETHING & KLEKAMP

WILMER CUTLER PICKERING HALE & DORR LLP

For the Objector Jon Zimmerman:

JOSHUA R. FURMAN LAW CORP.

For American Express:

REINHARDT WENDORF & BLANCHFIELD

HOLWELL SHUSTER & GOLDBERG LLP

PAUL WEISS RIFKIND WHARTON & GARRISON, LLP

SKADDEN ARPS SLATE MEAGHER & FLOM LLP

SHERRY BRYANT, RMR, CRR

For Capital One:

PATTERSON BELKNAP WEBB & TYLER LLP

PROFESSOR SAMUEL ISSACHAROFF, ESQ.

BRUNE & RICHARD LLP

SHERRY J. BRYANT, RMR, CRR

Proceedings recorded by mechanical stenography, transcript

SHERRY BRYANT, RMR, CRR

Nice to see all of you.

So we're on the record in re: Payment Card Interchange Fee and

Merchant Discount Antitrust Litigation, 05-MD-1720.

Counsel, we'll dispense with making notes of appearances, but

please do identify yourselves when you first speak.

We've got two issues that I wanted to take up today.

proposed protocol to deal with the allegations concerning

let's get that out of the way first, if we could.

Is Mr. Furman here?

Mr. Furman, why don't you come

Good morning, Your Honor.

So I've read your

submissions and if there's anything further that you want to

present, I'm happy to hear you.

but if there's a presentation you had in mind, by all means,

I have a couple questions,

In addition to the papers, Your Honor,

we don't have anything specific on the request for fees

to the procedure that the disbursement motion -- how the

disbursement motion was granted, but we have that under appeal

and I think that's probably going to be the appropriate time

I think there are some underlying issues with regard

SHERRY BRYANT, RMR, CRR

to take that up.

But in terms of the request

that's before us now, in all honesty, it's hard for me to

glean from the record a basis to conclude that your efforts on

behalf of your client had any bearing on what happened and,

therefore, a basis, a sufficient causal nexus that would

justify a fee award.

Is there anything that you can point me to

Presuming that -- there's the matter of

Judge Gleeson's ruling and how that impacts --

Right, which he said explicitly had

nothing to do with your efforts.

but it's the fact that we've got.

there and then have to show something that happened thereafter

that had some connection between your efforts and what

So I take it we start from

We would start from before that point