SACV 14- 1214- DOC - 09/ 09/ 2014 - I TEM NO. 3 UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA HONORABLE DAVID O. CARTER, JUDGE PRESIDING CERTIFIED TRANSCRIPT - - - - - - - ALLERGAN I NC. , ET AL, ) ) Pl ai nt i f f ( s) , ) ) vs. ) No. SACV 14- 1214- DOC ) I TEM NO. 3 VALEANT PHARMACEUTI CALS ) I NTERNATI ONAL I NC. , ET AL, ) ) Def endant ( s) . ) _________________________________)
REPORTER' S TRANSCRI PT OF PROCEEDI NGS MOTI ON FOR EXPEDI TED DI SCOVERY SANTA ANA, CALI FORNI A TUESDAY, SEPTEMBER 09, 2014
Maria Beesley, CSR, RPR, RMR Of f i ci al Feder al Repor t er Ronal d Reagan Feder al Bui l di ng, Room1- 053 411 West 4t h St r eet Sant a Ana, Cal i f or ni a 92701 ( 714) 564- 9259
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 2 MARIA BEESLEY, OFFICIAL REPORTER, RPR, RMR SACV 14- 1214- DOC - 09/ 09/ 2014 - I TEM NO. 3 APPEARANCES OF COUNSEL: FOR THE PLAI NTI FF( S) : LATHAM & WATKI NS BY: PETER WALD, ESQ. 505 MONTGOMERY STREET SUI TE 2000 SAN FRANCI SCO, CALI FORNI A 94111 ( 415) 391- 0600
LATHAM & WATKI NS BY: MI CHELE J OHNSON, AAL 650 TOWN CENTER DRI VE 20TH FLOOR COSTA MESA, CALI FORNI A 92626 ( 714) 540- 1235
LATHAM & WATKI NS BY: COLLEEN CARLTON SMI TH, ESQ. 12670 HI GH BLUFF DRI VE SAN DI EGO, CALI FORNI A 92130 ( 858) 523- 5400
FOR THE DEFENDANT( S) VALEANT PHARMACEUTI CALS:
SULLI VAN & CROMWELL BY: BRI AN FRAWLEY, ESQ. 125 BROAD STREET NEWYORK, NEWYORK 10004 ( 212) 558- 4983
SULLI VAN & CROMWELL BY: EDWARD J OHNSON, ESQ. 1888 CENTURY PARK EAST 21ST FLOOR LOS ANGELES, CALI FORNI A 90067 ( 310) 712- 6640
FOR THE DEFENDANT( S) PERSHI NG SQUARE:
KI RKLAND & ELLI S BY: MARK HOLSCHER, ESQ. MI CHAEL SHI PLEY, ESQ. 300 SOUTH HOPE STREET LOS ANGELES, CALI FORNI A 90071 ( 213) 680- 8190
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 3 MARIA BEESLEY, OFFICIAL REPORTER, RPR, RMR SACV 14- 1214- DOC - 09/ 09/ 2014 - I TEM NO. 3 SANTA ANA, CALIFORNIA, TUESDAY, SEPTEMBER 09, 2014 ITEM NO. 3 ( 1: 03) THE COURT: I want t o cal l t he Al l er gan mat t er , Al l er gan ver sus Val eant . Counsel , I have got about 15 mi nut es i n her e t o st ar t wi t h you. Ot her wi se, we' r e goi ng t o be her e a whi l e. Let ' s see i f we can cal l t he mat t er . I want t he mat t er of Al l er gan ver sus Val eant Phar maceut i cal . I t ' s 14- 1214. Counsel , I cer t ai nl y know you, but i f you woul d make your appear ances, pl ease. MR. WALD: Thank you, Your Honor . Good af t er noon. Pet er Wal d of Lat ham& Wat ki ns f or t he pl ai nt i f f s. MS. J OHNSON: Good af t er noon. Mi chel e J ohnson of Lat ham & Wat ki ns f or t he pl ai nt i f f s as wel l . THE COURT: Thank you. MS. SMI TH: Good af t er noon, Your Honor . Col l een Smi t h al so of Lat ham& Wat ki ns f or t he pl ai nt i f f . THE COURT: Counsel . MR. FRAWLEY: Good mor ni ng, Your Honor . Br i an Fr awl ey f r omSul l i van & Cr omwel l f or Val eant , and Mr . Chai - Onn of Val eant i s i n t he. . . THE COURT: Thank you ver y much. Wel come. MR. SHI PLEY: Good af t er noon, Your Honor . Mi chael Shi pl ey f r omKi r kl and & El l i s f or Per shi ng Squar e. My par t ner 1 2 3 4 01: 03 5 6 01: 05 7 8 9 10 01: 05 11 12 01: 05 13 14 01: 05 15 16 01: 05 17 01: 05 18 19 01: 05 20 01: 05 21 22 23 01: 05 24 01: 05 25 4 MARIA BEESLEY, OFFICIAL REPORTER, RPR, RMR SACV 14- 1214- DOC - 09/ 09/ 2014 - I TEM NO. 3 Mar k Hol scher i s - - THE COURT: He i s pr obabl y her e. I saw hi mear l i er . MR. SHI PLEY: I t hi nk he mi ght have been i n t he bat hr oom. THE COURT: Why don' t you have a seat and we' l l wai t . That ' s not an i ssue. MR. J OHNSON: Edwar d J ohnson, Sul l i van & Cr omwel l al so f or Val eant . THE COURT: Mr . J ohnson, my apol ogi es. Thank you. MR. WALD: Your Honor , I negl ect ed t o i nt r oduce Mat t Mal et t a who i s t he associ at e gener al counsel and cor por at e secr et ar y of Al l er gan. THE COURT: Si r , t hank you ver y much. MR. HOLSCHER: Good af t er noon, Your Honor . Mar k Hol scher of Ki r kl and El l i s her e f or Per shi ng Squar e. THE COURT: Okay. Now, t he cour t i s goi ng t o br i ef l y cal l your mat t er r i ght now and see wher e you st and f i r st bef or e I st ar t i nt o t he i ssues you have r ai sed wi t h t he cour t . I have a f ew moment s whi l e S&P i s out maki ng a cal l appar ent l y t o t he Uni t ed St at es Tr easur y. So I want t o t ake t hi s oppor t uni t y f or a f ew moment s t o t al k t o you r at her t han have you wai t because you ar e t he second mat t er up her e, not t he f i r st mat t er t oday. So your t hought s, counsel . MR. WALD: Your Honor , t hank you. We have cont i nued t o meet and conf er i ncl udi ng over t he l ast t hr ee hour s. And I 1 2 01: 06 3 01: 06 4 5 01: 06 6 7 01: 06 8 9 01: 06 10 01: 06 11 12 13 01: 06 14 01: 06 15 16 01: 06 17 18 19 20 21 22 23 01: 07 24 01: 07 25 5 MARIA BEESLEY, OFFICIAL REPORTER, RPR, RMR SACV 14- 1214- DOC - 09/ 09/ 2014 - I TEM NO. 3 bel i eve, subj ect t o obvi ousl y t o t he cour t ' s r evi ew and appr oval , t hat we have now wor ked out t he l ast di f f er ences t hat r emai n bet ween us and ar e i n posi t i on t o pr esent a pr oposal t o Your Honor t hat woul d gover n t he t i mi ng of di scover y, t he t i mi ng of t he pr el i mi nar y i nj unct i on hear i ng, obvi ousl y subj ect t o t he cour t ' s avai l abi l i t y, and t he scope of di scover y. THE COURT: Okay. And counsel , do you t hi nk you have r esol ved t hi s as wel l ? MR. HOLSCHER: I do, Your Honor . THE COURT: I s i t wor t h t hen r eadi ng i nt o t he r ecor d? MR. HOLSCHER: I bel i eve so, Your Honor . THE COURT: You' l l f i nd I ' mver y def er ent i al when I have excel l ent counsel l i ke I have wi t h bot h si des her e and you r each a r esol ut i on. I t hi nk wi sdompr evai l s t hat t he cour t shoul d be gui ded by counsel . Ot her wi se, I can t hr ow away t he ei ght pages. MR. HOLSCHER: Can you gi ve al so a hi nt of how we di d? THE COURT: Bot h si des di d equal l y wel l . MR. HOLSCHER: The f i r st i t emi n t he st i pul at i on i s t hat bot h si des agr ee i f we' r e ever on cal endar t he same t i me as St andar d & Poor s, you' l l put our mat t er f i r st . ( LAUGHTER) THE COURT: You want t o meet at 6: 00 o' cl ock i n t he mor ni ng? MR. HOLSCHER: I ' mt he onl y one who l i kes t hat . I ' ma mor ni ng per son l i ke you. 1 2 3 4 5 6 7 01: 07 8 9 01: 07 10 01: 07 11 01: 07 12 01: 07 13 14 15 16 01: 08 17 01: 08 18 01: 08 19 20 21 22 01: 08 23 24 01: 08 25 6 MARIA BEESLEY, OFFICIAL REPORTER, RPR, RMR SACV 14- 1214- DOC - 09/ 09/ 2014 - I TEM NO. 3 But ser i ousl y, her e i s t he st i pul at i on. And counsel can hel p me i f I don' t have i t exact l y r i ght . Bot h si des agr ee - - and when I say bot h si des, Val eant and Per shi ng Squar e have been t r eat ed as a si ngl e si de. So i t woul d be seven deposi t i ons f or each si de, Your Honor . Of t hose deposi t i ons, f our or f i ve can be of pr i nci pal s, whet her i t ' s Al l er gan, or Val eant , Per shi ng Squar e. THE COURT: You ar e gi vi ng t hat l at i t ude of f our t o f i ve t o each si de? MR. HOLSCHER: Cor r ect , Your Honor . And t wo or t hr ee can be of advi ser s. And I t hi nk on t hei r si de, advi ser s, Nomur a woul d t echni cal l y not be an advi ser . Al l er gan i s goi ng t o make f our speci f i c document r equest s of t hi r d- par t y advi ser s and maybe possi bl y Nomur a. Per shi ng Squar e and Val eant agr ee t o make f our or l ess. So f or exampl e, i f Al l er gan wer e t o r educe t hei r r equest t o t hr ee, we woul d be t hr ee or l ess. I f i t ' s f our , we' r e f our or l ess, Your Honor . We had, we bei ng Per shi ng squar e - - THE COURT: And Val eant ? MR. HOLSCHER: Yes. And Val eant , had pr evi ousl y pr oduced t o Al l er gan t he document s we pr ovi ded t o t he SEC f or t hei r i nf or mal r evi ew of t he 14e- 3 i ssues. We had pr ovi ded 67, 000 pages, I bel i eve. Per shi ng squar e pr ovi ded 67, 000, Val eant had pr ovi ded 40, 000. Those document s had been pr oduced t o Al l er gan al r eady, but t oday we have pr ovi ded t hem, t he sear ch t er ms and t he 1 01: 08 2 3 4 5 6 7 01: 08 8 9 01: 09 10 11 12 01: 09 13 14 15 16 17 18 01: 09 19 01: 09 20 01: 09 21 22 23 24 25 7 MARIA BEESLEY, OFFICIAL REPORTER, RPR, RMR SACV 14- 1214- DOC - 09/ 09/ 2014 - I TEM NO. 3 cust odi ans t hat we agr eed upon wi t h t he SEC f or t hei r i nf or mal r evi ew - - THE COURT: Ar e you sat i sf i ed wi t h t he sear ch t er ms? Somet i mes we get t he br eadt h, i t ' s j ust so bur densome. MR. WALD: Yes, Your Honor . We ar e. We di d di scuss t hi s wi t h counsel and I t hi nk we have i nsi ght now i nt o what was done, and we' r e cont ent t o do t hat . THE COURT: Then I won' t i nt er f er e. MR. HOLSCHER: Per shi ng Squar e and Val eant have agr eed t o move t he i nf or mal pr oduct i on whi ch an end dat e of May 2, 2014, t o make t hat cur r ent t hr ough August 1, 2014. We have agr eed t o make t he same pr i vi l ege cal l s and t he same cal l s f or t hi s pr oduct i on as we di d wi t h t he SEC. I n ot her wor ds, consi st ent r evi ew. We ar e goi ng t o shor t l y, af t er t hi s hear i ng act ual l y, pr oduce t o Al l er gan t he SEC i nf or mal r evi ew sear ch t er ms and cust odi ans so t hey act ual l y have a copy of t hat t o ver i f y f or our pr oduct i on. THE COURT: " Shor t l y" meani ng? MR. HOLSCHER: I woul d expect as soon as we get back t o our of f i ces and j ust put t he conf i dent i al mar ki ng on i t . Nei t her si de wi l l have t hi r d- par t y di scover y ot her t han t he maxi mumof f our or l ess and t he t wo or t hr ee deposi t i ons. Al l er gan wi l l r un a sear ch of f i ve of i t s cust odi ans f or a par al l el per i od of t he r equest t hat ' s made of us wi t h mi r r or ed 1 2 3 01: 10 4 5 01: 10 6 7 8 01: 10 9 01: 10 10 11 12 13 14 15 01: 11 16 17 18 19 01: 11 20 01: 11 21 22 01: 11 23 24 25 8 MARIA BEESLEY, OFFICIAL REPORTER, RPR, RMR SACV 14- 1214- DOC - 09/ 09/ 2014 - I TEM NO. 3 t er ms. Essent i al l y par al l el t er ms. I n ot her wor ds, i f you r equest t hat we pr oduce document s, we' r e goi ng t o gi ve you essent i al l y a par al l el mi r r or r equest , but onl y f i ve cust odi ans. Our SEC pr oduct i on on t he Per shi ng Squar e si de I bel i eve i ncl uded 11 cust odi ans i nt ended on goi ng f or war d. Val eant ' s pr oduct i on i ncl uded 31 or 32. They' r e goi ng t o add f our t o i ncl ude some i nt er nal cust odi ans. Br i an, di d I get t hat r i ght ? MR. FRAWLEY: Your Honor , Br i an Fr awl ey f r omSul l i van & Cr omwel l . J ust t o cl ar i f y, we' r e goi ng t o - - f or a subset of t he t hose 31 cust odi ans, f or f our of t hemwe' r e goi ng t o go backwar ds i n t i me t o J anuar y of 2013 and f or war d t o August 1 of 2014, as Mr . Hol scher ment i oned and r un t he gamut of not j ust i nt er nal and ext er nal communi cat i ons f or t hose f our . And we have 31 cust odi ans we pr oduced t o t he SEC and i t was j ust ext er nal document s. Thank you. MR. HOLSCHER: Al l er gan has agr eed f or i t s - - t hey have pr oduced r oughl y a l i t t l e over a t housand document s. Some of t hose document s had r edact i ons t hat wer e, we bel i eve, done under Del awar e l aw whi ch has some br oader pr i vi l eges. They have agr eed t o pr oduce t o us, based onl y on t he Feder al Rul es of Ci vi l Pr ocedur e, pr i vi l ege and t he l i ke, and t hey have agr eed t o r epr oduce t he document s t hat wer e gi ven t o us i n t he l ast 10 days 1 2 01: 12 3 4 5 01: 12 6 7 8 9 01: 12 10 01: 12 11 12 01: 12 13 14 15 16 17 18 19 01: 13 20 21 22 23 24 25 9 MARIA BEESLEY, OFFICIAL REPORTER, RPR, RMR SACV 14- 1214- DOC - 09/ 09/ 2014 - I TEM NO. 3 wi t h onl y t he r edact i ons per mi t t ed under t he Feder al Ci vi l Pr ocedur e. And on a goi ng- f or war d basi s we have t hat agr eement . The par t i es ar e agr eei ng as t o exper t s t hat each si de wi l l gi ve t he ot her a f ul some one- page document set t i ng out an i dent i f i ed exper t and t hei r opi ni ons i n advance. THE COURT: Si ze si x f ont ? ( LAUGHTER) MR. HOLSCHER: I ' mt hi nki ng f l ash car ds, Your Honor . Each si de wi l l do a f ul l page t hat wi l l i dent i f y t he exper t t he subj ect mat t er and t he opi ni on. Wi t hi n 48 or 72 hour s each si de can t hen - - l i ke st at e cour t , each si de can suppl ement t he l i st , ei t her add exper t s or opi ni ons. THE COURT: Okay. MR. HOLSCHER: Wi t hi n 48 hour s of t hei r openi ng br i ef i ng f i l ed wi t h t he exper t s, t hey' l l make t hei r exper t s avai l abl e f or deposi t i on. Same f or our opposi t i on. So we f i l e t he opposi t i on, i t has t he exper t decl ar at i on. Wi t hi n 48 hour s at a t i me conveni ent t o t hem, st ar t i ng 48 hour s on, t hey can t hen depose t he exper t . So t hey woul d get ear l y di scl osur e of t he exper t ' s i dent i t y, t he ar eas of t est i mony. That ' s a mut ual exchange ear l y. And t hen as soon as t hat decl ar at i on i s submi t t ed, wi t hi n 48 hour s t hat exper t wi l l be avai l abl e f or deposi t i on. THE COURT: Coul d you r epeat t hat t o me? MR. HOLSCHER: Yes, Your Honor . Bot h si des ar e goi ng t o exchange, I bel i eve i t ' s Sept ember 26, we wi l l exchange a f ul some 1 2 3 01: 13 4 5 6 01: 14 7 8 01: 14 9 01: 14 10 11 12 13 01: 14 14 01: 14 15 16 17 18 19 20 21 22 23 01: 15 24 01: 15 25 10 MARIA BEESLEY, OFFICIAL REPORTER, RPR, RMR SACV 14- 1214- DOC - 09/ 09/ 2014 - I TEM NO. 3 summar y of our r espect i ve exper t s' expect ed t est i mony ar eas and opi ni ons. Wi t hi n 48 hour s of t hat exchange, bot h si des can t hen suppl ement t hei r f i r st di scl osur es t o add ei t her exper t s or addi t i onal opi ni ons. THE COURT: Or addi t i onal exper t s? MR. HOLSCHER: Cor r ect . Then when Al l er gan f i l es i t s mot i on f or pr el i mi nar y i nj unct i on, t hei r f i r st br i ef , t hey wi l l have exper t decl ar at i ons or opi ni on at t ached. Wi t hi n 48 hour s of f i l i ng, t hey wi l l make t hei r exper t avai l abl e f or us t o depose. THE COURT: 48 hour s bei ng def i ned as weekends al so? MR. HOLSCHER: I t hi nk - - THE COURT: I have seen t he game pl ayed and I know you gent l emen won' t , but her e i s t he Fr i day f i l i ng. Remember , I came f r omst at e cour t f or a l ong t i me. That was a f avor i t e t r i ck. MR. HOLSCHER: I t hi nk Your Honor wi l l agr ee wi t h j ust 48 hour s, 48 hour s. And I t hi nk we' l l be abl e t o wor k t hr ough t hese. Then when we f i l e our opposi t i on, t hey wi l l have 48 hour s - - 48 hour s t o f i l e our opposi t i on, our exper t s ar e open t o be deposed. THE COURT: Let me t al k t o you about t he deposi t i ons i n j ust a moment af t er you f i ni sh. MR. HOLSCHER: I bel i eve I sai d, Your Honor , was f i ve hour s f or t he deposi t i ons, and t he par t i es agr eed not t o r epeat t he quest i ons t hat wer e asked i n Del awar e. Ther e i s an ear l i er Del awar e deposi t i on schedul ed t hat won' t be r epeat ed. 1 2 3 4 5 01: 15 6 01: 15 7 8 9 10 01: 15 11 01: 16 12 01: 16 13 14 15 01: 16 16 17 18 19 20 01: 16 21 22 01: 16 23 24 25 11 MARIA BEESLEY, OFFICIAL REPORTER, RPR, RMR SACV 14- 1214- DOC - 09/ 09/ 2014 - I TEM NO. 3 THE COURT: That hasn' t t aken pl ace yet . MR. WALD: Cor r ect . MR. HOLSCHER: The next t wo weeks I expect t he deposi t i ons wi l l t ake pl ace i n Del awar e, Your Honor . Wi t h r espect t o t he f i l i ng and t he hear i ng dat e, t hese ar e suggest ed dat es because we don' t know Your Honor ' s schedul e. I f I coul d j ust l et you know what our suggest ed r ange of dat es ar e t o see i f t hat ' s agr eeabl e t o t he cour t . THE COURT: I have got t o go back and get a cal endar i n j ust a moment . Let ' s see what t he dat es ar e f i r st . MR. HOLSCHER: Your Honor , I t hi nk what we have i n mi nd i s Al l er gan t o f i l e i t s mot i on f or pr el i mi nar y i nj unct i on on or about Oct ober 8. THE COURT: Okay. MR. HOLSCHER: That Per shi ng Squar e and Val eant ' s j oi nt opposi t i on woul d be t he 20t h. THE COURT: Okay. MR. HOLSCHER: The r epl y br i ef woul d be Oct ober 27. THE COURT: Al l r i ght . MR. HOLSCHER: For r ef er ence, t hat ' s my bi r t hday, so keep t hat i n mi nd. And t he hear i ng woul d be t he week of November 3r d, what ever dat e was agr eeabl e. Our under st andi ng i s t hat you don' t of t en want t o have t hese subst ant i ve mot i ons on your cal endar t he day of t he 3r d, but t he week of t he 3r d i f Your Honor had avai l abi l i t y, i f t hat wor ks. 1 01: 16 2 01: 16 3 01: 16 4 5 01: 16 6 7 8 9 01: 17 10 11 01: 17 12 13 14 01: 17 15 01: 17 16 17 01: 17 18 01: 17 19 01: 17 20 01: 17 21 22 23 24 25 12 MARIA BEESLEY, OFFICIAL REPORTER, RPR, RMR SACV 14- 1214- DOC - 09/ 09/ 2014 - I TEM NO. 3 THE COURT: I ' mnot avai l abl e. I ' mavai l abl e t he week bef or e. MR. WALD: Your Honor , ar e you avai l abl e t he week af t er ? THE COURT: No. I ' l l t el l you exact l y what i s happeni ng. I ' mdoi ng a count er t er r or i smpr ogr amdown i n Mal di ves. I ' mcommi t t ed al r eady t o be down i n Sout h Asi a. So I know you ar e t hi nki ng how j oyf ul i t woul d be t he l ast week i n Oct ober . Thank you. MR. HOLSCHER: I s November 3r d, I bel i eve t hat ' s t he Monday - - i s t he Fr i day bef or e avai l abl e f or Your Honor , bef or e November 3r d? THE COURT: No, because I don' t know t he pl anned schedul e. I f I go west , I l ose a day goi ng over . So I have t o get on t he pl ane on Fr i day t o get t her e. And i f I ' mgoi ng east - - no, I don' t want t o t ake t hat chance and di sappoi nt you by ki cki ng i t . What ever dat e shoul d be a sol i d dat e f or me and a sol i d dat e f or you. MR. HOLSCHER: Woul d t hat Thur sday wor k, t he Thur sday bef or e? THE COURT: I don' t want t o t ake t hat chance. Wednesday woul d wor k. MR. WALD: And goi ng t he ot her way, and I know t hat ' s pr obabl y l at er t han my f r i ends woul d l i ke t o see i t , but j ust on t he ot her si de, what ' s t he f i r st day t hat you woul d be avai l abl e? THE COURT: I have got t o get a cal endar , but I t hi nk, 01: 19 1 01: 18 2 3 01: 18 4 01: 18 5 6 7 8 9 01: 18 10 11 12 01: 18 13 14 15 16 17 18 01: 19 19 20 01: 19 21 22 01: 19 23 24 25 13 MARIA BEESLEY, OFFICIAL REPORTER, RPR, RMR SACV 14- 1214- DOC - 09/ 09/ 2014 - I TEM NO. 3 J ul i e, I t hi nk t he week of t he 16t h t hr ough t he 20t h. But I have got t o check a cal endar . Pl us, I don' t want you caught on a cal endar l i ke t oday. I don' t t hi nk you want t o wai t unt i l November . Why can' t we have i t on t he 28t h of Oct ober ? MR. HOLSCHER: Your Honor , we coul d shor t en up our - - maybe t hey can f i l e a coupl e days ear l i er . We' d have a l i t t l e l ess f or opposi t i on. And Your Honor , I ' massumi ng, woul d want at l east a week bet ween t he f i nal br i ef and t he hear i ng. THE COURT: Yes. MR. HOLSCHER: Why don' t we come back t o you wi t h a schedul e. I t hi nk - - THE COURT: I ' d l i ke t o have i t on t he 28t h i f I coul d. That ' s not pr essi ng me. And I ' mnot pr essi ng you i n t er ms of t i me. I hat e t i med mot i ons when you ar e wel l - pr epar ed and t he cour t says you have got one hour each. I mean, you need t i me t o ar gue t hat . And i t ' s i mpor t ant . Thi s coul d be t he bal l game. So. MR. WALD: Your Honor , i n t er ms of t he shape of t he hear i ng j ust so we under st and what you have i n mi nd, f or - - THE COURT: Not hi ng r i ght now. Wai t i ng f or your gui dance. MR. WALD: Okay. Woul d t he cour t be abl e t o set t he day asi de? Woul d you expect t o set t he day asi de? THE COURT: Remember , t hese ar e f i r st dat es. I haven' t had t i me t o go back t o t al k t o J ul i e and Debbi e yet . I don' t 1 2 3 4 5 01: 20 6 7 8 9 01: 20 10 01: 20 11 12 01: 21 13 14 15 16 17 18 01: 21 19 20 01: 21 21 22 01: 21 23 24 01: 21 25 14 MARIA BEESLEY, OFFICIAL REPORTER, RPR, RMR SACV 14- 1214- DOC - 09/ 09/ 2014 - I TEM NO. 3 know. I don' t know what ' s on my cal endar r i ght now. We' r e t ossi ng out dat es. I ' mcar r yi ng 400 cases r i ght now. I don' t know. MR. WALD: We' l l gr ab t he 28t h, Your Honor , i f we can do t hat . And i f we can have a l i t t l e bi t of t i me t hen t oday af t er t hi s t o wor k out a r evi sed schedul e, I bel i eve we can pr esent Your Honor wi t h a, not onl y a f ul l schedul e, but wi t h at l east our vi ews on what ought t o happen on t he 28t h. THE COURT: You don' t have t o do i t her e. As l ong as we have an agr eement t hat ' s t he 28t h. And you can wor k ar ound t hat i n your r espect i ve of f i ces. Ther e' s no r eason f or me t o put pr essur e on you t o deci de t hat . MR. HOLSCHER: We' l l pr ovi de Your Honor wi t h a st i pul at i on. I t hi nk t he - - and I expect on t he 28t h i f i t goes l at e, i f Your Honor i s amenabl e - - THE COURT: I ' mamenabl e. MR. HOLSCHER: We' ve been t ol d. I t hi nk t he ot her i s - - t he l ast poi nt i s t hat t o ext end our pr oduct i on t hr ough August 1 t akes us, bot h si des, t hr ough a per i od wher e al l t he l aw f i r ms wer e i nvol ved f ai r l y ext ensi vel y. Ther e i s an agr eement among t he f i r ms as of f i cer s of t he cour t , we' l l make t he same pr i vi l ege cal l s we made t o t he SEC. They have al r eady seen our pr oduct i ons. They know t hat we t ur ned over many of t hose document s. Nei t her si de can pr ovi de t he pr i vi l ege l ogs, whi ch woul d be sever al hundr ed pages because a si gni f i cant 1 2 3 4 01: 21 5 6 7 8 9 01: 22 10 11 12 13 01: 22 14 15 16 01: 22 17 01: 22 18 01: 22 19 20 21 22 23 24 25 15 MARIA BEESLEY, OFFICIAL REPORTER, RPR, RMR SACV 14- 1214- DOC - 09/ 09/ 2014 - I TEM NO. 3 per cent age of t he document s i n t he August , J ul y/ August t i me per i od ar e communi cat i ons wi t h counsel . So bot h si des ar e agr eeabl e t hat we wi l l et hi cal l y make t he cal l on pr i vi l ege. We' r e not goi ng t o have pr i vi l ege l og l i t i gat i on. I f f or some r eason t her e i s an i ssue t hat comes up wi t hout a pr i vi l ege l og, we' l l t r y and r esol ve i t i nf or mal l y. The ot her quest i on we have f or Your Honor i s, t o t he ext ent we have a di sagr eement on a di scover y i ssue i n t hi s compact schedul e, how woul d you l i ke us t o deal wi t h i t ? THE COURT: I want you t o come t o me. I t end not t o use t he magi st r at e j udges because what happens i s you' l l t est t hem, t hen t her e wi l l be a mot i on f or r econsi der at i on. I f I ' mdoi ng my j ob cor r ect l y, I have t o pi ck i t up de novo anyway. So I want you i n her e. MR. HOLSCHER: Your Honor , woul d i t be okay wi t h Your Honor i f we had t hose mot i ons t hat - - we wi l l be doi ng t hose mot i ons i f t hey happen - - I hope t hey don' t - - pot ent i al l y on t he same t r ack as deposi t i ons, exper t s, and ever yt hi ng. I t woul d be appr opr i at e and per mi ssi bl e, f or exampl e, my co- counsel Mr . Shi pl ey t o handl e i t i f I ' mdoi ng a deposi t i on and vi ce ver sa? THE COURT: No. MR. HOLSCHER: So you woul d want l ead counsel . THE COURT: I t ' s t he r esponsi bi l i t y of l ead counsel . Absol ut el y. MR. HOLSCHER: Okay. 01: 24 1 2 3 01: 23 4 5 6 7 01: 23 8 9 10 01: 23 11 12 13 14 15 01: 23 16 17 18 19 20 21 01: 24 22 01: 24 23 01: 24 24 25 16 MARIA BEESLEY, OFFICIAL REPORTER, RPR, RMR SACV 14- 1214- DOC - 09/ 09/ 2014 - I TEM NO. 3 THE COURT: These ar e t oo i mpor t ant . These di scover y mot i ons ar en' t r un- of - t he- mi l l di scover y mot i ons. And t hat ' s - - you t wo ar e i n ar med conf l i ct r i ght now and you' r e on a r acet r ack. Thi s case coul d r esol ve and pl ay i t sel f out i n a number of ways wher e t he cour t never event ual l y even get s t o t r i al . So t hese di scover y mot i ons and pr el i mi nar y i nj unct i on become ext r aor di nar i l y i mpor t ant . I t coul d pl ay i t sel f out i n t he mar ket pl ace, qui t e f r ankl y, bef or e you ever get t hi s case of f t he gr ound. MR. HOLSCHER: Thank you, Your Honor . Now, wi t h r espect t o - - t he ent i r e per i od of di scover y woul d cover not much l onger t han nor mal mot i on pr act i ce dat es. I know Your Honor had gi ven us some gui dance t hat you wer e not t hr i l l ed wi t h ex par t e f i l i ngs. How woul d you l i ke f or us t o pr oceed t o t he ext ent we have a di scover y di sput e on t he expedi t ed schedul e? THE COURT: I f I can - - I hat e t o open up t he f eder al cour t unl ess I ' mal r eady i n a compl ex l i t i gat i on t r i al . Let ' s say I ' mi n t r i al f or t hr ee mont hs, et cet er a, Sat ur days and Sundays, f ai r game. I want counsel i n di scussi ng t he evi dence so we' r e pr epar ed f or Monday or Tuesday. So I hat e t o spend t axpayer s' money j ust openi ng up t he cour t . But I ' mcer t ai nl y avai l abl e t o you on weekends. And I know t hat you ar e wor ki ng weekends anyway, f r ankl y. I t ' s not a puni shment . I gi ve up mor e of my pr i vat e l i f e t o accommodat e you 1 01: 24 2 3 4 5 6 01: 24 7 8 9 10 01: 24 11 01: 24 12 13 14 15 16 17 01: 25 18 19 20 21 22 01: 25 23 24 25 17 MARIA BEESLEY, OFFICIAL REPORTER, RPR, RMR SACV 14- 1214- DOC - 09/ 09/ 2014 - I TEM NO. 3 t han you coul d possi bl y i magi ne. Not you speci f i cal l y, but l i t i gant s. Number t wo, usual l y you can get i nt o my cour t at 7: 00 o' cl ock i n t he mor ni ng and I can hear i t i f i t ' s an hour or so. But I have got cr i mi nal mat t er s t hat I set at 7: 30. J ust so you know t he r eason why, back i n Depar t ment 5 when I was super vi si ng, we had 12, 000 def endant s a year and pr i vat e counsel . I f I st ar t ed my cour t at 7: 30, you as pr i vat e counsel , as a cr i mi nal pr act i t i oner coul d come i n, you coul d get your mat t er r esol ved and you wer e of f t o f i ve di f f er ent cour t s wi t h j udges al l anxi ous t o get ahol d of you. I f you got t i ed up i n a mast er cal endar cour t , you coul dn' t make a l i vi ng. So I get her e pr et t y ear l y by habi t . Eveni ngs, i t depends. As l ong as I ' mnot gi vi ng a speech or i t ' s not a bar f unct i on, et cet er a, you can come i n at 5: 30 or 6: 00. But i t depends upon t he l engt h. I f you' r e goi ng t o t ake t hr ee or f our hour s, t hen I need cour t hour s, but I need t o have not i ce so I get my suppor t , my cour t r epor t er s i n and my cl er ks i n f or you. So I ' mavai l abl e t o you weekends. I ' mavai l abl e t o you f r om7: 00 o' cl ock i n t he mor ni ng. I ' mavai l abl e t o you af t er 5: 30, but you have got t o check and make sur e what I ' mdoi ng. I ' m not avai l abl e t o you j ust because you' r e dr oppi ng by. I n ot her wor ds, i f I have got anot her mat t er and we' r e i n t r i al or anot her hear i ng, you don' t have pr ecedence. You j ust wai t . S&P unf or t unat el y was up bef or e you, ot her wi se, S&P woul d be wai t i ng. 1 2 3 01: 25 4 5 6 7 8 9 10 11 12 01: 26 13 14 15 16 17 18 19 01: 26 20 21 22 23 24 25 18 MARIA BEESLEY, OFFICIAL REPORTER, RPR, RMR SACV 14- 1214- DOC - 09/ 09/ 2014 - I TEM NO. 3 Okay? MR. WALD: That al l makes per f ect sense, Your Honor . What Mr . Hol scher and I have di scussed i s a pr ot ocol wher eby i f t her e i s a di scover y di sput e, and I emphasi ze " i f " - - THE COURT: 48 hour s t o me. Coul d be handwr i t t en f or al l I car e. I don' t car e about t he f or mal i t y. I car e about knowi ng enough about t he i ssue you' r e br i ngi ng bef or e me. I have got t o do my own r esear ch anyway. Qui t e f r ankl y, a 25- page br i ef mi ght hel p. Somet i mes i t ' s j ust what I cal l snooze r eadi ng. I t ' s not hel pf ul at al l . But i f I can get you i n, hear t hat mot i on, et cet er a. . . MR. HOLSCHER: That ' s f i ne. We can wor k out - - THE COURT: Coupl e pages. MR. HOLSCHER: I t hi nk we' r e wor ki ng out a f i ve- page or expedi t e f or Your Honor . THE COURT: I ' ve got t o do t he r esear ch anyway i ndependent of what ever you ar e submi t t i ng t o me. I j ust need t o know why you ar e comi ng i n and be wel l enough pr epar ed t o l i st en t o t he ver bal ar gument . What you won' t get , t hough, i s you won' t get a t ent at i ve under t hose ci r cumst ance. You won' t get my best t hought s because I ' mst i l l st r uggl i ng at ni ght af t er cour t t o cat ch up what you have submi t t ed. So you' l l come i n, you' l l ar gue, and t hen you' l l get a r ul i ng. But hopef ul l y I ' l l be wi se enough wi t h t hat ki nd of f i ve- page document or l ess t o know why you ar e her e. 1 2 01: 27 3 4 5 01: 27 6 7 8 9 10 11 12 01: 27 13 01: 27 14 01: 27 15 16 01: 27 17 18 19 20 01: 27 21 22 23 24 25 19 MARIA BEESLEY, OFFICIAL REPORTER, RPR, RMR SACV 14- 1214- DOC - 09/ 09/ 2014 - I TEM NO. 3 MR. HOLSCHER: The l ast i t emof our st i pul at i on I bel i eve i s t hat t o t he ext ent t hat ei t her si de submi t s a decl ar at i on i n t hei r pl eadi ngs - - so i t woul d be Al l er gan' s mot i on f or pr el i mi nar y i nj unct i on, our opposi t i on. I don' t know i f t hi s appl i es t o r epl y. I never t hought about i t . THE COURT: You know, r epl i es, want t o hear a secr et about r epl i es? Never mi nd. MR. HOLSCHER: I f t her e i s a decl ar at i on t hat ' s f i l ed f r oma per son who i s not deposed, t hen t he ot her si de, each si de i s goi ng t o gi ve advance not i ce - - we' l l wor k out a dat e bef or e t he f i l i ng - - advance not i ce, say we' r e goi ng t o be submi t t i ng decl ar at i ons, so i t ' s not been deposed. And t her e wi l l be an oppor t uni t y f or a - - and we' l l wor k out t he amount of hour s f or a deposi t i on of t he decl ar ant . So f or exampl e, i f ei t her si de - - we don' t want t o be i n a si t uat i on wher e you depose a bunch of peopl e and t her e ar e f i ve or si x ot her decl ar ant s who ar e new, t her e wi l l be an oppor t uni t y f or ki nd of , al most l i ke we di d wi t h t he exper t s, ki nd of qui ck deposi t i on af t er war ds. And we wi l l submi t t hat t o Your Honor i n a st i pul at i on hopef ul l y t omor r ow wi t h t he r est of t he i t ems. THE COURT: Li st en, t hat was - - can I ask you a coupl e quest i ons? Counsel , you want ed t o speak. I apol ogi ze. MR. WALD: Not at al l , Your Honor . That ' s f i ne. THE COURT: Fi r st of al l , how l ong woul d you l i ke? I ' m 01: 29 1 01: 28 2 3 4 5 6 01: 28 7 8 01: 28 9 10 11 12 13 14 15 01: 29 16 17 18 19 20 21 01: 29 22 23 01: 29 24 01: 29 25 20 MARIA BEESLEY, OFFICIAL REPORTER, RPR, RMR SACV 14- 1214- DOC - 09/ 09/ 2014 - I TEM NO. 3 not f or ci ng you back t o your of f i ce, but I woul d l i ke t o see t hat f r oma ver bal r eci t at i on i nt o an act ual document . And I don' t car e whet her i t ' s t omor r ow or t he f ol l owi ng day. MR. HOLSCHER: Tomor r ow mor ni ng, Your Honor . I t hi nk t omor r ow bef or e noon you shoul d have a f i l ed - - THE COURT: That ' s f ai r enough. I ' mnot goi ng t o set a f ur t her dat e. Remember , wi t h me t he gl ass i s al ways hal f f ul l wi t h counsel . I t ' s never hal f empt y unt i l pr oven di f f er ent l y. And t he second t hi ng i s - - and I di dn' t get t hat f ar . Tr ust me, I had ei ght or ni ne pages, we wer e goi ng t o spend a l ot of t hought f ul t i me t oget her . Let me put t hat away and j ust t al k t o you. By t he way, I ' l l put t hi s on t he r ecor d: You t wo ar e conduct i ng your sel f admi r abl y. Thank you. I t ' s a pl easur e havi ng you her e. I t ' s not because you' ve agr eed or di sagr eed. I don' t car e about t hat . That ' s t he adver sar y syst em. I t ' s j ust you' r e bei ng - - but your cl i ent s don' t l i ke each ot her . Di d you not i ce t hat ? Ther ef or e, somet i mes we' r e gui ded by our cl i ent s. So you don' t put pr essur e on us as counsel and you haven' t st epped out of char act er at al l . But I expect war f ar e i n t hi s case. Sl ash- and- bur n. And t he quest i on i s, do I need an i nt er medi ar y cal l ed a speci al mast er or somebody pr esent - - now, hol d on. Ri ght now I don' t - - pr esent at t he deposi t i on? And t he deposi t i ons, i f t hey' r e conduct ed i n Los Angel es, i f t her e i s a pr obl em, I ' d r at her have you down her e 1 2 3 4 01: 29 5 6 01: 29 7 8 9 01: 30 10 11 12 13 01: 30 14 15 16 17 18 19 20 21 01: 30 22 23 24 25 21 MARIA BEESLEY, OFFICIAL REPORTER, RPR, RMR SACV 14- 1214- DOC - 09/ 09/ 2014 - I TEM NO. 3 sor t i ng out t he pr obl emt hat day, because what happens somet i mes i s t hat t he quest i ons don' t get answer ed and you don' t get t he r ul i ngs or some i ndi cat i on, you send t hat deponent away. Now t hat deponent has t o come back af t er a whol e per i od of t i me t hat ' s wast ed and we have a second deposi t i on. And now t he deponent i s angr y, f el t i nconveni enced, f el t har assed, et cet er a. I ' mnot sayi ng t hat t hat ' s goi ng t o happen, but I ' m t r yi ng t o ant i ci pat e how do you get t hat i nf or mat i on t o one anot her as qui ckl y as possi bl e. And I don' t know what you ar e deal i ng wi t h out t her e. I don' t know t he ext ent of t he vi t r i ol i c f eel i ng. I ' mhappy t o i mpose one. And i f you t el l me not t o, I ' m happy not t o. And I want you t o t al k t o your r espect i ve si des f or j ust a moment . Because I ' mnot sur e who t hat speci al mast er woul d be r i ght now. But I t hi nk you t wo ar e on t he f ast t r ack. Thi s i s goi ng t o get r esol ved pr et t y qui ckl y i f not by t he cour t , but by t he mar ket pl ace. Remember , t hi s i s an of f er . You ar e much wi ser about your r espect i ve case t han I am. So I ' mt aki ng gui dance f r ombot h of you. MR. HOLSCHER: Your Honor , I t hi nk at t hi s poi nt we' r e comf or t abl e wi t hout a speci al mast er . THE COURT: Then l et ' s l et i t pl ay out . Let ' s go t hr ough t he i ni t i al i ssues and deposi t i ons. I f you have a pr obl em, br i ng t hat t o my at t ent i on and we' l l wr est l e wi t h i t 1 2 3 4 5 6 7 01: 31 8 9 10 11 12 01: 31 13 14 15 16 17 18 01: 32 19 20 21 01: 32 22 23 01: 32 24 25 22 MARIA BEESLEY, OFFICIAL REPORTER, RPR, RMR SACV 14- 1214- DOC - 09/ 09/ 2014 - I TEM NO. 3 t hen. We don' t have t o f or esee al l t he di f f i cul t i es i f t hey don' t occur . Okay? So we' l l wai t . Wel l , t hen counsel , i s t her e anyt hi ng el se? MR. WALD: Your Honor , i f I can j ust t ake a coupl e mor e mi nut es of t he cour t ' s t i me. Some quest i ons had been r ai sed whi ch I ' msur e Your Honor saw i n t he cor r espondence t hat you r evi ewed i n connect i on wi t h t he mot i ons about t he scope of t he r el i ef t hat we' r e seeki ng. THE COURT: Scope of t he? MR. WALD: Scope of t he r el i ef t hat we' r e seeki ng. THE COURT: I had a l ot of quest i ons about t hat . MR. WALD: Let me see i f I can addr ess t hem, Your Honor , at l east some of t hem. As we di scussed wi t h opposi ng counsel t oday, t he gr avamen, t he cent er of t he pr el i mi nar y i nj unct i on pr oceedi ng i s t he 14e- 3 cl ai m. THE COURT: We wer e goi ng t o spend a l ong t i me about t he scope of t hat r el i ef t oday. I t seemed i nnocuous, br oad t o me. I di dn' t t hi nk t hat you wer e not ent i t l ed t o i t , but I wasn' t si gni ng of f on what I cal l a myst er y t our i n t er ms of br eadt h. MR. WALD: Under st ood, Your Honor . Our submi ssi on I t hi nk i s f ai r l y di r ect and st r ai ght f or war d on t hi s i ssue. I f we per suade Your Honor t hat t her e i s a l i kel i hood of success on t he mer i t s wi t h i r r epar abl e har m, t he r el i ef we wi l l be seeki ng i s an i nj unct i on agai nst t he exer ci se of benef i ci al owner shi p r i ght s 1 2 3 01: 32 4 01: 32 5 6 7 8 9 01: 33 10 01: 33 11 01: 33 12 01: 33 13 14 01: 33 15 16 17 01: 33 18 19 20 21 01: 33 22 23 24 25 23 MARIA BEESLEY, OFFICIAL REPORTER, RPR, RMR SACV 14- 1214- DOC - 09/ 09/ 2014 - I TEM NO. 3 t hat woul d ot her wi se accr ue t o t he shar es t hat wer e pur chased by Per shi ng Squar e Fund 1. And as Your Honor knows f r omr eadi ng t he paper s, t hat ' s r oughl y 9. 7 per cent . And as Your Honor i s pr obabl y al so awar e f r omt he paper s, Val eant cont i nues t o del i ver ; Val eant and Per shi ng Squar e cont i nue t o del i ver r equest s f or ms t o t he company. I ' mnot sur e wher e t hey wi l l be mat hemat i cal l y by t he t i me t he pr el i mi nar y i nj unct i on goes f or war d. I f t hey ar e bel ow 35 per cent such t hat t he quar ant i ne, i f you wi l l , or t he st r i ppi ng away of t he benef i ci al owner shi p r i ght s t hat Mr . Ackman' s shar es woul d r educe t he number bel ow 25 per cent , t hen t hat woul d have cer t ai n consequences. I f t hey ar e at or above 35 per cent such t hat even i f you agr eed wi t h us t hat Mr . Ackman' s shar es cannot be vot ed, t hey woul d t heor et i cal l y st i l l have t he chance t o be above 25 per cent . So t he second par t of our submi ssi on i s t hat t o t he ext ent we ar e successf ul on t he 14e- 3 cl ai m, we bel i eve and we woul d submi t t o you, Your Honor , and ar gue t hi s, t hat our cl ai ms under 14a- 9 whi ch i s a di scl osur e st at ut e, whi ch woul d r equi r e f ul l and f ai r di scl osur e i n t he seeki ng of t he r equest f or ms f or t he speci al meet i ng and i n t he seeki ng of pr oxi es t o be vot ed at t he speci al meet i ng, woul d have been obt ai ned t hr ough mat er i al mi sr epr esent at i ons and omi ssi ons by def i ni t i on, because we wi l l have demonst r at ed t hat t her e was a vi ol at i on of t he i nsi der t r adi ng l aws, t he pr edi cat es f or whi ch wer e not di scl osed t o 1 2 3 4 01: 34 5 6 7 8 9 10 11 12 13 01: 35 14 15 16 01: 35 17 18 19 20 21 22 23 24 25 24 MARIA BEESLEY, OFFICIAL REPORTER, RPR, RMR SACV 14- 1214- DOC - 09/ 09/ 2014 - I TEM NO. 3 shar ehol der s. Obvi ousl y I ' mnot aski ng Your Honor t o accept t hat . I ' m j ust t r yi ng t o expl ai n our t heor y of t he case. I f we wer e successf ul on t hat , t hen i n our vi ew t he 25 per cent woul d be r educed bel ow 25 per cent . Now, wi t h r espect t o t hose shar es, Your Honor - - THE COURT: Whi ch woul d i nval i dat e t he shar ehol der meet i ng. I t hi nk you have i t schedul ed i n December ? MR. WALD: Cor r ect , Your Honor . December 18. The 14a- 9 cl ai ms, Your Honor - - and I ' msur e you' l l hear debat e about t hi s so I want t o be st r ai ght f or war d wi t h t he cour t - - ar e t heor et i cal l y subj ect t o bei ng cur ed because i t ' s a di scl osur e st at ut e. And so, we' r e not sayi ng t hat t he di scl osur es coul d never be cur ed. I t hi nk t hat ' s somet hi ng we woul d want t o t al k t o Your Honor about . THE COURT: I s t her e enough t i me t o cur e t hat dependi ng upon t he def endant s, i f t hey r ecei ved an adver se r ul i ng, coul d t hey have enough t i me t o cur e t hat bef or e t he - - MR. WALD: St andi ng her e t oday, Your Honor , I don' t see why t hey coul dn' t . I do t hi nk t hat shar ehol der s who wer e - - THE COURT: What pr el i mi nar y i nj unct i on woul d I i ssue concer ni ng t hat i ssue? MR. WALD: Ri ght . And I t hi nk shar ehol der s who wer e t hen pr oper l y i nf or med about what t hi s cour t ' s f i ndi ngs wer e woul d t hen need t o make a second i nvest ment deci si on, i f you wi l l , Your 1 2 01: 36 3 4 5 6 01: 36 7 01: 36 8 9 01: 36 10 11 12 13 14 15 16 01: 37 17 18 19 01: 37 20 21 01: 37 22 23 01: 37 24 25 25 MARIA BEESLEY, OFFICIAL REPORTER, RPR, RMR SACV 14- 1214- DOC - 09/ 09/ 2014 - I TEM NO. 3 Honor , a second vot i ng deci si on about whet her t o suppl y t he r equest f or ms or whet her t o suppl y a pr oxy. THE COURT: Let me ask what ki nd of r el i ef ar e you aski ng f or , t hen? I n ot her wor ds, i f t hi s can be cur ed, i t ' s a mat t er , once agai n as I sai d, t hi s coul d pl ay out i n t he mar ket pl ace f ast er t han t he cour t . MR. WALD: I f t hey don' t get above 35 per cent , Mr . Ackman' s shar es coul d not be cur ed. Those woul d have been secur ed t hr ough, i f we pr evai l , a vi ol at i on of t he i nsi der t r adi ng l aws. And t hose shar es ar e not avai l abl e. And so i f t hey f al l bel ow 25 per cent , i t ' s game over i n t hat sense. What I ' msayi ng i s i f t hey got above 35 per cent and we wer e successf ul on Mr . Ackman' s cl ai m, on Mr . Ackman' s shar es, and we wer e successf ul on t he 14a- 9 di scl osur e cl ai ms, we woul d - - you can i magi ne scenar i os wher e t hey woul d be r educed bel ow 25 per cent and t he speci al meet i ng coul d not go f or war d on t hat basi s. Now, what we' r e sayi ng i s - - THE COURT: I ' msor r y. MR. WALD: Sur e. THE COURT: Some per cent age of t hat coul d be cur ed. And par t of t hat cur e woul d be r ai si ng i t back above t he 25 per cent . So I ' mgoi ng t o come back t o my or i gi nal quest i on: Why woul d a cour t be i ssui ng a br oad pr el i mi nar y i nj unct i on, i n a sense, whi ch woul d t er mi nat e t hi s? Whi ch i s what I ' mr eal l y hear i ng you aski ng when i t ' s pot ent i al l y cur abl e. 1 2 3 01: 37 4 5 6 7 01: 37 8 9 10 11 12 01: 38 13 14 15 16 17 01: 38 18 01: 38 19 01: 38 20 01: 38 21 22 23 24 25 26 MARIA BEESLEY, OFFICIAL REPORTER, RPR, RMR SACV 14- 1214- DOC - 09/ 09/ 2014 - I TEM NO. 3 MR. WALD: We don' t want you t o t er mi nat e anyt hi ng, Your Honor . And we' r e not seeki ng t o t er mi nat e t he speci al meet i ng. We' r e not aski ng you t o enj oi n t he speci al meet i ng. We' r e aski ng you t o enj oi n Per shi ng Squar e Fund 1' s exer ci se of benef i ci al owner shi p r i ght s, t ake out t he 9. 7. THE COURT: At t hat speci al meet i ng? MR. WALD: Cor r ect . Wel l , hi s shar es woul d no l onger count t owar ds t he cal l i ng of t he speci al meet i ng, t owar ds t he 25 per cent . THE COURT: We' r e mi xi ng and mat chi ng. Let ' s go back agai n. Take t he cal l i ng. The f i r st ar gument - - or t he second ar gument you pr oposed t o me i s r eal l y t he f i r st i ssue. And t hat i s, t hat pot ent i al l y i s cur abl e and mi ght br i ng t he def endant s above 25 per cent . Mi ght . MR. WALD: Mi ght , Your Honor . And I - - THE COURT: Hol d on. Hol d on si nce you ar e mi xi ng and mat chi ng now. As t o t hat , I ' mnot cer t ai n what t he r emedy woul d be si nce i t ' s cur abl e. And I don' t know i f I woul d be appr opr i at e enj oi ni ng or st oppi ng a shar ehol der meet i ng on t hat basi s. Number t wo, I don' t know what t he cur e per i od i s of f hand. I don' t r emember . Dependi ng when t hi s occur r ed, I ' mnot cer t ai n i f t hi s coul dn' t be cur ed t hr ee days bef or e t he meet i ng and t he cour t has enj oi ned t hi s speci al meet i ng. What I ' mwor r i ed about i s anyt hi ng t hat i s cur abl e t hat pot ent i al l y r ai ses t hi s above 25 per cent . I t seems t o be t he 1 01: 39 2 3 4 5 6 01: 39 7 01: 39 8 9 10 01: 39 11 12 13 14 15 01: 39 16 01: 39 17 18 19 20 01: 40 21 22 23 24 01: 40 25 27 MARIA BEESLEY, OFFICIAL REPORTER, RPR, RMR SACV 14- 1214- DOC - 09/ 09/ 2014 - I TEM NO. 3 cour t ' s i n a di f f i cul t posi t i on enj oi ni ng or del ayi ng, ei t her one. MR. WALD: I ' msor r y f or t he conf usi on, Your Honor , but t hi s i s ver y i mpor t ant t er r ai n and I ' mgl ad what t hat you ar e - - THE COURT: I want you t o cor r ect me. MR. WALD: We ar e not aski ng you t o enj oi n t he speci al meet i ng. We ar e aski ng you t o enj oi n t he vot i ng of shar es. That i nj unct i on wi t h r espect t o Per shi ng Squar e Fund 1 on t he one hand and r equest s t hat have been submi t t ed on t he basi s of mi sl eadi ng publ i c st at ement s on t he ot her hand, t he mat h t hat ' s i nher ent i n t hose t wo bucket s coul d br i ng t hi s bel ow 25 per cent . THE COURT: Whi ch means t hat t hose i n t he speci al meet i ng - - t hi s i s a Cat ch- 22 - - ar e goi ng i n ci r cl es. MR. WALD: Fai r enough, Your Honor . What I ' msayi ng i s we' r e not aski ng you t o enj oi n t he speci al meet i ng. THE COURT: The end r esul t woul d be - - wel l , t he cour t woul dn' t have t o do a t hi ng i f t hat ' s t he case. MR. WALD: Wel l , i f - - THE COURT: I n ot her wor ds, why ar e you her e? MR. WALD: Wel l , because - - THE COURT: Ot her t han t o deci de t hat i ssue. I n ot her wor ds, when you seek r el i ef , I don' t know what r el i ef r i ght now you ar e aski ng f or because i f you dr op bel ow t he 25 per cent , i t woul d seem, a f or t i or i , t hat r esol ves i t . Now t hey may come back and cur e i t , but I don' t want t he cour t t o be i n a posi t i on of gi vi ng ant i ci pat or y r ul i ngs or i nj unct i ons. So I ' mnot sur e what 1 2 01: 40 3 4 01: 40 5 01: 40 6 7 8 9 10 11 01: 41 12 13 01: 41 14 15 01: 41 16 17 01: 41 18 01: 41 19 01: 41 20 01: 41 21 22 23 24 25 28 MARIA BEESLEY, OFFICIAL REPORTER, RPR, RMR SACV 14- 1214- DOC - 09/ 09/ 2014 - I TEM NO. 3 you' r e aski ng. MR. WALD: I t woul dn' t be ant i ci pat or y, Your Honor . You woul d be r ul i ng on t he basi s of di scl osur es t hat t hey made and you woul d be f i ndi ng t hat t hose di scl osur es wer e f aul t y. That t hey vi ol at ed t he f eder al secur i t i es l aws. I f t hey want t o t hen cor r ect t hose di scl osur es, t hey t hen need t o per suade t he shar ehol der s t o r esubmi t t hei r r equest f or ms on t he basi s of - - THE COURT: So l et me summar i ze. You ar e not aski ng i n t hi s i nj unct i ve r el i ef f or ei t her del ay or , l et ' s say, t er mi nat i on. MR. WALD: That ' s cor r ect . We ar e aski ng f or r el i ef wi t h r espect t o t he vot i ng. That ' s what we ar e aski ng f or , Your Honor . THE COURT: What I ' msayi ng t o you agai n and agai n i s t he mar ket i s goi ng t o pl ay t hi s out . I f you ar e successf ul , t he cour t i sn' t pr obabl y maki ng any f ur t her r ul i ngs because you ar e not aski ng f or anyt hi ng. I t pl ays i t sel f out i n t he mar ket pl ace. MR. WALD: We agr ee wi t h t hat , Your Honor . THE COURT: They may be abl e t o cur e t hat . MR. WALD: And i f t hey do, i f t hey cur e i t i n t he sense of comi ng up wi t h a compl i ant di scl osur e, t hen t hey have t o per suade shar ehol der s t o vot e. THE COURT: I under st and. MR. WALD: And t hey may not be abl e t o per suade shar ehol der s t o vot e once t he t r ut h i s known. So i t does become 1 2 01: 42 3 4 5 6 7 8 01: 42 9 10 11 01: 42 12 13 14 01: 42 15 16 17 18 01: 43 19 01: 43 20 01: 43 21 22 23 01: 43 24 01: 43 25 29 MARIA BEESLEY, OFFICIAL REPORTER, RPR, RMR SACV 14- 1214- DOC - 09/ 09/ 2014 - I TEM NO. 3 ver y i mpor t ant what t hi s cour t f i nds wi t h r espect t o t hat . THE COURT: I under st and t hat . MR. WALD: Thank you, Your Honor . THE COURT: I t hought we st ar t ed about r el i ef , t hough. I t hought t hat was what our conver sat i on was about , t he ext ent of t he r el i ef t hat was bei ng r equest ed. MR. HOLSCHER: Coul d I answer your quest i on, Your Honor ? THE COURT: Pl ease. MR. HOLSCHER: Ver y br i ef , Your Honor . Your quest i ons ar e i nsi ght f ul because t hei r r equest s f or pr el i mi nar y i nj unct i on r el i ef i s changi ng because when we f i r st wer e bef or e Your Honor , i t was wi l l we get t o 25 per cent . And no shar ehol der has ever f i l l ed out t hose change of deeds, t wo year s of t r adi ng hi st or y and any r el at i onshi p wi t h 30 phar maceut i cal compani es. And t hey wer e sayi ng t hat t he Per shi ng Squar e 9. 7 per cent shoul d be i nval i dat ed. What happened, Your Honor , i s we di dn' t j ust cl i mb t he 25 per cent amount . We' r e about t o cl i mb t he 30 per cent amount . So agai n, f r omour per spect i ve, t hei r cl ai mt hat somehow Per shi ng Squar e and Val eant ar e f or ci ng a meet i ng t hat shar ehol der s don' t want , t her e i s goi ng t o be anot her 25 per cent who, we expect by t he end of t hi s week, wi l l have essent i al l y changed t he r ecor d day of t hei r shar es - - THE COURT: And i f t hat ' s t he case, f r omyour per spect i ve don' t you have saf e heaven i n t he sense t hat you never dr opped bel ow 25 per cent r egar dl ess of what t he cour t r ul es? 1 2 01: 43 3 01: 43 4 01: 43 5 6 7 01: 43 8 01: 43 9 01: 43 10 11 12 13 14 15 16 17 18 01: 44 19 20 21 22 23 01: 44 24 25 30 MARIA BEESLEY, OFFICIAL REPORTER, RPR, RMR SACV 14- 1214- DOC - 09/ 09/ 2014 - I TEM NO. 3 MR. HOLSCHER: What I bel i eve t hat counsel j ust sai d was t hat t hey want t o t ake away our shar es and t he pr oxi es we sol i ci t ed t o " l et peopl e st ar t over . " And of cour se wi t h t hi s pr ocess i t t ake weeks and i t ' s har d t o st ar t over . I don' t want t o devol ve i nt o t he mer i t s, Your Honor , ot her t han t o i ndi cat e t hat I bel i eve t her e ar e goi ng t o be si gni f i cant quest i ons at t he hear i ng wi t h r espect t o t he scope of t he r el i ef . I ' l l r ai se one ot her i ssue, Your Honor , t hat ' s pr ocedur al t hat you know i s at l east t her e. We have met and conf er r ed pr el i mi nar i l y wi t h counsel f or Al l er gan. Ther e i s a basi c st andi ng i ssue whi ch i s Al l er gan i s sayi ng Per shi ng Squar e and Val eant we bel i eve, even t hough you f ol l owed al l t hose r ul es wi t h al l t hese t op advi ser l aw f i r ms, t hat somehow even t hough you ar e co- bi dder s, you had i nsi de i nf or mat i on. I won' t ar gue t hat t oday. They wer en' t t r ader s i n t hei r own st ock. They di dn' t own t he st ock at t he t i me. Ther e i s a f undament al st andi ng i ssue i n t he Ni nt h Ci r cui t whi ch essent i al l y i s, t o br i ng an i nsi der t r adi ng cl ai m, unl ess you ar e t he gover nment , t her e needs t o be t he cont empor aneous owner shi p of shar es. Hence, t hey' r e havi ng someone f r omt hei r i n- house l egal depar t ment buy shar es and be one of t he co- pl ai nt i f f s. I don' t know i f we' r e goi ng t o br i ng i t as a summar y j udgment mot i on or an opposi t i on t o our pr el i mi nar y i nj unct i on. 1 01: 44 2 3 4 5 01: 44 6 7 8 9 01: 44 10 11 12 13 14 15 16 17 01: 45 18 19 20 21 22 23 24 01: 45 25 31 MARIA BEESLEY, OFFICIAL REPORTER, RPR, RMR SACV 14- 1214- DOC - 09/ 09/ 2014 - I TEM NO. 3 Ther e i s a Ni nt h Ci r cui t case on al l f our s t hat essent i al l y says, not onl y i s t hi s i nj unct i ve r el i ef t hey' r e seeki ng never been gr ant ed by any cour t , t her e' s no cour t t hat ' s ever f ound t hat t hey act ual l y have st andi ng t o br i ng an i nsi der t r adi ng case wher e t hey don' t own t he st ock. And t he case, Your Honor , i s Brody 280 F. 3d 997, Ni nt h Ci r cui t , 2002. We' r e ei t her goi ng t o br i ng t hat as a summar y j udgment mot i on whi ch Mr . Shi pl ey i s bangi ng on me t o br i ng or we' r e goi ng t o do i t i n our opposi t i on t o t he pr el i mi nar y i nj unct i on. But I want you t o know as a pr ocedur al mat t er you' l l see t hat i ssue. THE COURT: Counsel ? MR. WALD: Thank you, Your Honor . I wi l l say t wo t hi ngs: One, we have met and conf er r ed wi t h Mr . Hol scher about t hat . So what ever pr ocedur al r ubr i c i s appr opr i at e, t hat ' s f i ne. On t he mer i t s, Your Honor , obvi ousl y t he cour t wi l l r ead t he case. Ther e i s a si ngl e case. We bel i eve i t st ands f or a di f f er ent pr oposi t i on, and t hat i s si mpl y t hat i n or der t o seek damages i n your own r i der on behal f of your shar ehol der s, you needed t o be a cont empor aneous t r ader . We do not bel i eve i t st ands f or t he pr oposi t i on t hat t he i ssuer doesn' t have st andi ng t o seek i nj unct i ve r el i ef wher e t her e has been a vi ol at i on of 14e- 3. THE COURT: I ' mgl ad we di dn' t get i nt o t he mer i t s. ( LAUGHTER) 1 2 3 4 5 6 01: 46 7 8 9 10 11 12 01: 46 13 01: 46 14 15 16 01: 46 17 18 19 20 21 22 23 24 01: 47 25 32 MARIA BEESLEY, OFFICIAL REPORTER, RPR, RMR SACV 14- 1214- DOC - 09/ 09/ 2014 - I TEM NO. 3 THE COURT: Let me ask you somet hi ng. Do you want t o ar gue t hi s pr el i mi nar i l y t oday? You al r eady have, but I ' l l gi ve you t he t i me t o ar gue i t pr el i mi nar i l y because i t ' s f asci nat i ng, number one. Number t wo, you ar e doi ng a gr eat j ob of educat i ng me about what ' s goi ng t o happen on Oct ober 28. You have my appr eci at i on. So i f you' d l i ke anot her t ur n at t he l ect er n, i t ' s f asci nat i ng. MR. HOLSCHER: We' r e done, Your Honor . I shoul d have hel d back, and I apol ogi ze. THE COURT: Not at al l . I n f act , qui t e t he opposi t e. I t hi nk i t ' s a ver y good way t o st ar t pr epar i ng me. And I appr eci at e i t f r ombot h your par t s. I don' t f i nd any f aul t wi t h t hat at al l . I n f act , I ' mgoi ng t o mi ss you when t hi s case over . Oct ober 28? MR. HOLSCHER: Yes, Your Honor . THE COURT: You' l l set up a schedul e based ar ound t hat dat e t hat bot h of you f i nd accept abl e t o each ot her . And be ki nd t o each ot her as you can i n t er ms of any per sonal - - MR. WALD: We wi l l absol ut el y do t hat , Your Honor . THE COURT: I t hi nk you al r eady have. Gent l emen, I ' m gl ad we coul d f i t you i n. Sor r y about t he del ay t oday. Not t hat apol oget i c. Thank you. MR. HOLSCHER: By noon t omor r ow we' l l be f i l i ng a 01: 48 1 01: 47 2 3 4 5 01: 47 6 7 8 9 01: 47 10 11 01: 47 12 13 14 15 01: 47 16 01: 47 17 01: 47 18 01: 47 19 20 21 01: 47 22 01: 47 23 24 25 33 MARIA BEESLEY, OFFICIAL REPORTER, RPR, RMR SACV 14- 1214- DOC - 09/ 09/ 2014 - I TEM NO. 3 st i pul at i on. (Whereupon the proceedings were adjourned at 1:48.)
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CERTIFICATE
I hereby certify that pursuant to Section 753, Title 28, United States Code, the foregoing is a true and correct transcript of the stenographically reported proceedings held in the above-entitled matter.
Date: SEPTEMBER 10, 2014
/S/ ______________________________ MARIA BEESLEY, RPR, RMR OFFICIAL COURT REPORTER