Drummond V Collingsworth Transcript May 21 2015

Case 2:11-cv-03695-RDP-TMP Document 371 Filed 09/14/15 Page 1 of 63
1 FILED
2015 Sep-14 PM 02:51
U.S. DISTRICT COURT
N.D. OF ALABAMA
UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
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DRUMMOND COMPANY, INC.,

Plaintiff,
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vs.
TERRENCE P. COLLINGSWORTH,
et al.,
2:11-cv-3695-RDP-TMP
May 21, 2015

10:00 a.m.
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Birmingham, Alabama
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Defendants.
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REDACTED
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TRANSCRIPT OF HEARING
BEFORE THE HONORABLE R. DAVID PROCTOR
UNITED STATES DISTRICT JUDGE
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For the Plaintiff:
William Anthony Davis, III

H. Thomas Wells, III
Benjamin T. Presley
For the Defendants:
Kenneth E. McNeil
Linda Eccles
Robert K. Spotswood
Christopher S. Niewoehner
William Thomas Paulk, II
Also Present:
T. Michael Brown
Special Master
Court Reporter:
Leah S. Turner, RMR, CRR

Federal Official Court Reporter
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This cause came to be heard and was heard on the

21st day of May 2015, before the Honorable R. David Proctor,
United States District Judge, holding court for United States
District Court, Northern District of Alabama, Southern
Division, in Birmingham, Alabama.
Proceedings continued as follows:
P R O C E E D I N G S
(The following occured in chambers.)
THE COURT:
Are you ready?
MR. DAVIS:
Ready.
THE COURT:
Probably a little bit of free flow in
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there, but I have a few things I want to walk through with you
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I'll ask you about and then we will go from there.
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MR. DAVIS:
All right.
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THE COURT:
Any concerns you have?
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in the courtroom that you're concerned about?
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MR. DAVIS:
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MR. McNEIL:
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THE COURT:
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Is there anybody
We are not.
It's fine with us.
We may have some court staff in because
word is out this is an interesting case.
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MR. McNEIL:
It is.
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THE COURT:
But they are in a code of silence.
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MR. DAVIS:
We think everything should be public.
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That's fine with us.
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THE COURT:
What I want to hear about is security
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concerns they have and how you would address those with
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respect to those witnesses in South America.
So I figured you
already knew that.
MR. DAVIS:
Right.
(In open court.)
THE COURT:
Thank you, Judge.
Good morning.
We are here in Drummond
versus Conrad & Scherer and Collingsworth, case 11-CV-3695.
The Court asked the parties to come in.
evidentiary hearing for today.

After reviewing the submissions, I came to the
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We had scheduled an
conclusion that we weren't going to be able to conduct the
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necessary aspects of an evidentiary hearing in the short time
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frame that I was able to set aside this morning for that.
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Therefore, I asked everyone to come in so we could discuss
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exactly how we ought to proceed, get some preliminary rulings
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and/or agreements if necessary.

Also, at 11:00 or so I did call our Special Master
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and ask him to come visit with us today to maybe work on some
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of the things that are progressing with the Special Master as
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relates to confidentiality orders, protective orders, and the
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like.
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Obviously, I have some pretty great concerns about
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where we are in this case right now.
I guess the first order
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of business would be just to pick up with the discussion we
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had yesterday on the phone with counsel, and that is my sense
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is that we should have a briefing schedule in advance of an
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evidentiary hearing which essentially tracks a hybrid version
of my summary judgment procedures and/or my bench trial
procedures.
Essentially what I had asked the parties to do is
propose findings of fact and conclusions of law, focusing more
on the findings of fact, the factual matters that -- we will
start off with the plaintiff -- that the plaintiff thinks are
relevant to the issue we have to undertake with respect to the
motion for sanctions.
Then we would allow a time period in which the
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defendants would be allowed to respond to those findings,
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proposed findings, as to whether they dispute or do not
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dispute them.
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any additional facts that they believe are relevant to the
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motion, and then that baton would pass back across the aisle
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to the plaintiff to indicate whether they agree or disagree
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with respect to those particular proposed findings.
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The defendants would then be able to propose
I think when we are done with that process, we would
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have things more narrowed down in terms of exactly what we
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have in dispute and exactly what we need to do in terms of an
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evidentiary hearing.
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My sense is that we will do that, and once we see
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where we are, we will set a date for the evidentiary hearing
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at that point.
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respective positions about how that ought to take place as far
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as timing.
So the first order of business is to say your
Tony, when do you think you can have a first salvo
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for me on that?
MR. DAVIS:
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We could do that certainly within 21
days and maybe sooner.

THE COURT:
Why don't we say three weeks from
MR. DAVIS:
That would be good.
THE COURT:
That would be June 12th, and then we
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tomorrow.
will allow three weeks beyond that, which would be July --
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that's a holiday.
We would give you all until July 6th, and
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then three weeks beyond that would be July 27th, Tony.
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Kevin, does that work for you?
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MR. McNEIL:
Your Honor, I have a good staff of
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people here that keep me on track and they point out that we
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have a response due on July 8 to this new RICO action.
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don't want to jam it up too tight.

THE COURT:
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That's a response or motion, an answer
on motion due?
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MR. McNEIL:
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THE COURT:
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Yes.
Our initial response --
I think we can relax that deadline.
Don't you think, Mr. Davis?
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MR. DAVIS:
We can, Your Honor.
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THE COURT:
I think this is a more critical thing;
MR. DAVIS:
It is.
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right?
THE COURT:
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So why don't we give you another 21 days
beyond that to respond to the RICO complaint.
MR. McNEIL:
THE COURT:
All right.
Thank you.
That way you are taking on one task at a
time.
That means if you take three weeks to respond, you just
get those three weeks back in terms of time to respond to
RICO.
MR. McNEIL:
THE COURT:
That's fair.
Thank you.
So that means we will enter an order
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that July 29 is the date now for them to respond to -- July 29
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would be the date to respond to the RICO complaint.
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sorry; July 27th.
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Let's say July 29.
That way you're not having an
associate work over the weekend.

All right.
I'm
I used to be one of those.
And then what we will do shortly after
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that last deadline in late July, we will consult probably by
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phone and set a date for an evidentiary hearing on this.
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Now, what I want you to do as you go about that
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process is think of short, simple assertions of fact, not
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three facts in one enumerated paragraph.
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enumerated paragraph.
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What I want to avoid is, well, we disagree -- it's
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compound factual assertion.
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of three, so we're going to deny it.
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One fact in each
Keep it simple.
We disagree with one-third of one
Each enumerated fact that you are
wanting to propose should contain only one simple and plainly
stated assertion of fact.
legal jargon.
put it to a jury.
substantially down the field in terms of where we need to be.
We're going to avoid color words,
We're going to put it in terms that you would

Okay?
I think that will advance the ball
I kind of answered my second question to a degree
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already and that is how does what we're doing affect the RICO
action.
these actions.
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You filed both
What is your take on whether they need to run
somewhat parallel on at least some aspects of the litigation?

It seems like there's some common nucleus of
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Let's start with the plaintiffs.
operative fact that are shared by the two different actions.

MR. DAVIS:
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Your Honor, we would agree that there
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are some common areas, common facts.
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cases would lend themselves to a joint discovery, certainly.
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At this point in time, though, we have not seen who is
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appearing for the defendants and we're not sure exactly -THE COURT:
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We concede that the
You haven't had a chance to do any type
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of preliminary discussions leading up to a Rule 26 conference
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in the RICO action?
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MR. DAVIS:
Right.
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THE COURT:
Well, one of the things I would task you
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to do is once that appearance is made -- and I'll tell you
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what.
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let them know who is going to be involved in the RICO action,
Why don't we go ahead and make an appearance and just
and then start some informal discussions along the way about
how we want to treat the two actions.
consolidated for purposes of discovery and motion practice?
Are they going to be on somewhat separate tracks?
plan on a joint trial?
Are they going to be
Discuss some of those things.
Should we
I will wait, though,
to get your final conclusions and positions about that when
you do eventually make it to the Rule 26 planning conference
and I get your proposed Rule 16 report.
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MR. SPOTSWOOD:
Your Honor, Bob Spotswood.
We
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didn't fill in the blank on a couple of the deadlines.
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we have the two major 21-day submissions, we were going to
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have a response and then defendants' proposed additional facts
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and then the plaintiffs responding to that, and I don't know
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if you would want to have 10-day periods or two-week periods.
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THE COURT:
Once
I thought about giving three consecutive
three-week gaps there.
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MR. SPOTSWOOD:
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THE COURT:
Three?
Yes.
21 days from tomorrow is the
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initial plaintiff's proposed facts.
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more than 21 days, I think, over the Fourth of July weekend,
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maybe 24 days, for you to respond to those and propose your
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own facts.
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Hint:
I gave you a little bit
You can start working on your own facts now,
just in case they don't have them.
And then about 23 days
beyond that, that Wednesday, the last Wednesday in July, for
them to respond to your facts.
Mr. Davis, is that what you understood?
MR. DAVIS:
It is, Your Honor.
THE COURT:
It seems to me that we ought to have
some discussions today -- and, again, without making any type
of rulings, but I'm trying to get my hands around some of the
issues while they are fresh on my mind, having read through
the submissions.
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And when the Special Master gets here in about a
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half hour or so, we will be able to pick this up in terms of
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the context of what he is doing with respect to possible
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protective orders and/or confidentiality.
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How public was the testimony letters rogatory that
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took place in Colombia?
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basically this question.
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going to be in a tribunal in a courthouse.
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open to the public the courthouse was.
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security measures because that's one of the things we
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discussed back a couple, three years ago in terms of
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Mr. Jeffers' security going in there, Mr. Collingsworth's
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security going in there, but how open to the public or
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available to the public were either the live testimony or
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record of the testimony in Colombia?
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MR. WELLS:
And by background, I'm asking

My understanding was that that was
I don't know how
I do know there were
They were completely open.
It was
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actually -- in at least one of the depositions, a person from
the media -- I think there were several depositions.
from the media came and sat in, and Mr. Collingsworth argued
in favor of that.
THE COURT:
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Is that your understanding on the
defendants' side?
MR. McNEIL:
THE COURT:
People
That's what I'm told.

Are there any witnesses that we're
concerned about in terms of security from the defendants'
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standpoint that did not participate in that public process?
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In other words, is there anyone who is a potential witness
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that you're concerned about the security of that individual
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who would not be at least in Colombia known to have provided
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testimony in this case down there through the letters rogatory
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process or otherwise?
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MR. McNEIL:
That was a question for the defendants.

There are two categories, it seems to
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me.
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declarations at one time.
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We've got the witnesses themselves who have already made
THE COURT:
And the family members of those
witnesses?
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MR. McNEIL:
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THE COURT:
Yes.
We are concerned about -- yes.
I'm going to get to them.
But let's
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stick only with the witness themselves, the identity of the
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witnesses.
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MR. McNEIL:
Those that have already testified and
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would retestify in this case, I think we're fine.

No. 2 is there is a second group that we have not
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yet identified of additional witnesses who may testify, and I
have not come to a conclusion yet as to whether safety is an
issue.
THE COURT:
Let's back up.
I'm not worried about
anyone who has not testified yet.
With respect to those who have testified, were each one of
those, based on your current knowledge, given some type of
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security payment?
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MR. McNEIL:
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THE COURT:
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MR. McNEIL:
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THE COURT:
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MR. McNEIL:
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The families of -Directly or indirectly.

If you will let me make that
qualification, Charris, Halvez, Duarte, (REDACTED).
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What I'm asking is this:
And what about Halcon?

Halcon was paid -- he did not testify.
He did not testify.

THE COURT:
So there were five persons who testified
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for whom some form of security payment was made to a family
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member or through a conduit?
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MR. McNEIL:
That's right.
(START REDACTION)
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(END REDACTION)
THE COURT:
How about persons who were provided
security payments who are not public?
I'm not going to ask
you to identify them at this point, but are there any of
those?
MR. McNEIL:
We have listed on a series of
supplementary interrogatories in this case several other
people who received -- I think it's mainly just minor
payments, but there were a few others.
interrogatories.
Court.
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THE COURT:
Maybe you can have someone find that for
you and give me those names.

MR. McNEIL:
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THE COURT:
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Those are in the
We would be glad to provide a summary to the
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We will do that.
I think I saw that, but I would like to
have those names.

I guess here is what I'm getting at.
Is there a
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distinction to be made as we advance toward confidentiality
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for safety and security reasons between a discussion in public
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about the witness himself versus any discussion about the
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identity or circumstances of that witness's family?
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MR. McNEIL:
I think that is a very appropriate
protection.
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THE COURT:
Mr. Davis, what is your take on that?
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Just so you will understand, Mr. McNeil, what I'm
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saying there is the fact of payment and the identity of the
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person who directly or indirectly as far as a witness
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benefited from the payment or their family would be fair game,
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but the circumstances of the payment to the family or the
identity or location of the family would not be fair game in
terms of public record in this case.
MR. DAVIS:
Your Honor, we think the fact that
payment should not be confidential.
family member can remain confidential.
THE COURT:
The location of where the
There's no reason that that's an issue
in this case except maybe testing their theory as to whether
this is really a security payment?
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MR. DAVIS:
That's correct.
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THE COURT:
And we can do that under seal; right?
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MR. DAVIS:
We would agree to that, yes, sir.
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THE COURT:
Mr. McNeil?
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MR. McNEIL:
Two quick comments.
I always try to
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think from what the goal is back to the answer.
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is that we're dealing with a law firm that -- almost
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everything is confidential in a law firm.
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there's also, confounding that, a security issue for these
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folks and the potential intimidation of getting documents all
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over the street out of this courtroom; we want everything
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totally disclosed in this.
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The goal here
No. 2 is that
And so I do have a concern that the fact that
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payment documents, it appears to me, as long as they're used
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in discovery in this case, they're fine; but to say that they
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are public and therefore would go into the press or the media
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or anything, it seems to me that's not really fair, given the
intimidation atmosphere that exists in Colombia.

THE COURT:
Well, look, here is the non sequitur to
your argument, I think.
They are known.
is reasonably anticipated by anybody who understands the legal
process that they are potential witnesses at a trial in this
case.
this case.
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These people are already testifying.
They have testified.
They are out there.
It
They've given testimony as part of the discovery in
So when it comes to those six names that you
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provided me before who have testified, I don't understand how
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you can argue that further discussion of them in this case
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would in any way intimidate them.
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going to occur discussing them in the context of these issues
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that hasn't already occurred.
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MR. McNEIL:
There's nothing that's
What is wrong with that logic?
Your Honor, I'm here to help.
I'm not
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here to tell you how to make that choice.
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you my own concern in the four months I've been in this case.
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This is a strange situation down there in Colombia.
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lot of intimidation.
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THE COURT:
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I will just tell
There's a
It's a strange situation in Birmingham
right now, too.

MR. McNEIL:
I can't agree more.
We are both
together on that.
The question is whether the best way to try a
lawsuit is within the confines of this or to have fact-of-
payment documents floating around in public.

THE COURT:
There's three considerations.
You've
made two of them.
I understand that.
as protection of innocence down in Colombia who may be
involved in this.
Confidentiality about the firm's business.

That may not weigh as heavily on the scale
There's a third very compelling factor, though, and
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that is we start with the proposition that when we litigate in
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a tribunal such as the United States District Court, we don't
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seal things.
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reasons why we would keep something under seal.
That's very disfavored.
There has to be strong
Now, my take on that up to this point is if in
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doubt, let's temporarily seal it and then make a judgment when
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we have more information about whether that's properly sealed
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or not, because we can always take the information from the
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category of sealed and unseal it.

MR. McNEIL:
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Right.
It easier to open it later than
Exactly.
So against that backdrop, with
to put it back in.

THE COURT:
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the understanding that generally we do not want to seal things
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that are litigated in open court -- and the public owns this
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court.
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judiciary's court.
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This is not the litigant's court.
It's not the
This is the people's court.
So with that proposition, I'm wondering why fact of
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payment is really confidential, why the timing of what someone
said before payment or after payment should be confidential.

I fully understand why -- and I think Mr. Davis
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concedes this even -- why specific information about family
members, whereabouts, identities, should remain confidential
because there's a threat to health and security there.
with respect to the other issues, those are issues that are
going to be submitted to a jury in this case if this case gets
to a jury.
But
The plaintiffs are going to have a full
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opportunity to make their case that witnesses were influenced
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by these payments; right?
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MR. McNEIL:
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THE COURT:
And should have that opportunity.

So if that's the case, why should the
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fact of payment and the dealings with the witness himself be
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confidential?
MR. McNEIL:
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I'm struggling, and I'm not trying to
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be -- and I greatly appreciate the Court thinking through this
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because we are both thinking through it.

My concern -- and I leave that choice to you.
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That's the great advantage of my job, just to help you get the
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facts.
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timing, as you mentioned, is a critical factor in this.
It's a judgment call.
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THE COURT:
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MR. McNEIL:
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And what I'm suggesting is that
Timing of what?
Timing of disclosure of details.
I mean, big stacks of paper.
These are in monthly invoices of
what payments were made.
trial.
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That could be done as we approach
What I'm saying, the fact of payment is already
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clear, as the fact that these witnesses are paid; that's open.
It's really a question of the degree of detail.
saying the timing --
THE COURT:
confidential?
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The amounts paid I'm not as concerned
with as the paperwork being spread around that shows -THE COURT:
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What details do you think should remain
Amounts paid?
MR. McNEIL:
And I'm
What is the paperwork you're referring
to?
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MR. McNEIL:
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THE COURT:
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MR. McNEIL:
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THE COURT:
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MR. McNEIL:
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THE COURT:
The documents, the discovery.

Emails?
Emails, invoices.
Ledgers?
Ledgers, that kind of thing.
Why are those things, if we redact out
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anything from those documents that could potentially disclose
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the whereabouts of a family member or the identities of a
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family member, not the witness, but family members, why would
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those fall in the category of something that should continue
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to be sealed?
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MR. McNEIL:
Again, the goal is to make sure that's
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disclosed at trial and will be.
The goal is also to allow it
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to be used in discovery.
THE COURT:
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The only thing --
But doesn't the public also have the
right to know before even trial?
jury pool or any other work that's being done in this case?
MR. McNEIL:
How would that affect the
My general view is that information
which is, again, personal names, generally confidential stuff;
law firm is confidential; expense information and records --
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THE COURT:
Put aside the law firm.
I'm talking
about health and welfare of innocence.

MR. McNEIL:
It's just my personal concern given
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that I know enough to be worried that a detailed paper trail
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might help find somebody.
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understand the judgment call can go either way.
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leaving that to Your Honor to make it.
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THE COURT:
I'm not saying it will.
And I
And I'm
I'm just trying to --
Couldn't we simply work that through the
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Special Master with objections to me saying if you think some
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aspect of the paper trail could lead to the identity or
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location of a family member, then you have the right to
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propose to the Special Master that that be redacted and why;
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the Special Master, which we have retained him to do, would
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make a report and recommendation to me about how he thinks we
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ought to deal with those documents, and then I will exercise
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my discretion in terms of how to resolve that issue, balancing
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out the factors?
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MR. McNEIL:
I think that is a perfect solution to
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my concern.
THE COURT:
So we would start off -- so the next
question becomes -- so we're talking about two of the three
factors, the public policy saying these things should be
disclosed publicly as a general rule, the concern of health,
welfare, and safety of family members of these witnesses down
in Colombia.
confidentiality of the law firm as it relates to its practice
of law and work with others including other law firms, I take
The third that you've kind of advanced is the
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it, potential work product with these potential witnesses.
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take it you would throw a lot of things under that umbrella?
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MR. McNEIL:
Well, I am concerned.
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think sort of in Venn diagrams.
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average party that comes into this courtroom, everything is
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public eye.
You know, I
The problem is that for the
I take that position, too.
A law firm is a rather unusual situation, and in
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this particular situation it's even more unusual because the
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information relates to data which was being used in litigation
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which in some part, however limited, is still ongoing, and I
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just -- I feel like that just like -- I'm not saying it is the
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level of a patent or anything, but it is -- there is a need to
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protect that.
THE COURT:
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And I think -How does crime fraud exception work in
all that?
MR. McNEIL:
The crime fraud exception --
THE COURT:
The question is this.
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Is it
discoverable as to the defendants?
plaintiffs, I should say.
crime fraud exception, for example, that wipes out any work
product and/or attorney/client privilege protection, the next
question is:
shouldn't it be a matter of public information in this case?
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From the defendants to the
And if it is, if it fits within a
Well, if it's discoverable in this case, why
So I have two questions for you.

the crime fraud exception work?
First, how does
Second, assuming for purposes
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of the next question that the crime fraud exception would
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render some things discoverable that are not otherwise
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discoverable, why aren't those fair game for public
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information in the case so long as they don't deal with
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health, welfare, safety of family members in Colombia?
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MR. McNEIL:
The first question, crime fraud.
In
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the abstract level, 30,000-foot level, if indeed crime fraud
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exception were invoked, that obviously makes the material
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discoverable.
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briefing on the fact that that legal barrier or that high
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legal threshold has not been met.
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We, however, in this case have done extensive
THE COURT:
That briefing was done before these
revelations, though, most recent revelations?

MR. McNEIL:
Yes, sir.
And I am totally -- I would
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be happy to further supplement our briefing to account for
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anything that has been done.
There has --
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THE COURT:
I'm sure you will get a chance to do
MR. McNEIL:
So I'm saying that your proposition
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that.
3
4
that crime fraud exception, if invoked, would make it
discoverable, you're right.
let us continue to brief it.

THE COURT:
And I appreciate your offer to
All right.
For example, taking it out
of the 30,000-foot view and giving a specific example of
something that we might have to tackle, Mr. Collingsworth told
10
me in a hearing that -- other than Halcon, putting Halcon
11
aside, and I understand he didn't have direct dealing with
12
Halcon, didn't know the full details of that, that the only
13
persons who received these security payments were Charris,
14
Halvez, and Duarte.

He said that, I think -- as I review the records, he
15
16
said on the occasion sitting over here to my right in my
17
courtroom in a previous hearing.
18
that position under oath in a declaration.
19
has taken that position on other occasions.
It looks like he has taken

It looks like he
Now we find out that others received security
20
21
payments.
And I use security payments in quotes because I
22
think the plaintiffs take issue with that characterization of
23
payments.
24
REDACTION)
25
characterization there, received them.
Putting that issue aside, it seems that (START

(END REDACTION), depending on the
Now I find out there's
others who may not have testified that have received them.
Why wouldn't that be a fraud on the Court?
22
I think Mr. Collingsworth's position right now, as
3
4
best I can tell it is, I caught him off guard with the
question, he cut it too closely, dog ate his homework, bad
day.
hearing, I was very careful not to direct questions to him.
was directing them to Mr. Smith, and Mr. Smith and
Mr. Collingsworth volunteered Mr. Collingsworth to answer the
But as you remember, reviewing the transcript of that
10
question.
11
to the truth is just ask me directly.
12
the answer to that.
And he began the answer by saying the quickest path

He took on voluntarily
The second thing I would say is that I even traced
13
14
back at the end of that line of questioning to make sure there
15
were only three payments, and he affirmed that there were.

Why isn't that in and of itself enough to say we are
16
17
dealing with crime fraud exception here?

MR. McNEIL:
18
Two reasons, and then I can elaborate
19
on each.
20
like to rely upon but it is there, and that is that mere
21
disclosure of discovery violations --
22
And the first is a technical one, one which I don't
THE COURT:
We're not dealing with mere discovery
23
violation.
We're talking about a representation to a Court in
24
an open tribunal by a lawyer who appeared before me pro hac
25
vice in three cases, two or three cases, and in front of Judge
1
2
23
Bowdre in the third I guess.

MR. McNEIL:
Your Honor, I have not had a chance to
lay out all the evidence, and I will in the evidentiary
hearing, but I will say this right now.
defend a bad error of judgment and a bad mistake.
think that rises to the level of fraud and I don't think it
rises to the level of bad faith.
8
9
10
I'm not here to

I don't
I have some materials that I could present to you as

to why that is, but I understand the concern is -THE COURT:
What about the redaction in the
11
privilege log and in some emails of the payments made to
12
others which would be additional information to suggest that
13
the Court was being misled?
14
MR. McNEIL:
That, again, I want to and will address
15
for you in that evidentiary hearing.
16
occurred such as blanket wiping out of things related to
17
expenses, but I want to lay that record out --
18
THE COURT:
There are reasons that
Let me explain something.
One of the
19
things -- the reason I'm not setting a hearing today and the
20
reason I'm letting you all brief this to see where we are is I
21
could foresee a circumstance where we need to do some
22
prehearing discoveries targeted to this.
23
Mr. Collingsworth's deposition has not been taken on this
24
issue yet?
25
MR. McNEIL:
That's correct.
My understanding is
THE COURT:
1
2
24
Conrad & Scherer's deposition has not
been taken on this yet?
MR. McNEIL:
THE COURT:
That's correct.
So one of the things that we will need
to consider is would it aide the Court in efficiently and
accurately handling these motions if there's limited
deposition discovery that's needed once I figure out what the
disputed issues of fact are prehearing.

That means I may have to make a decision about crime
9
10
fraud before the hearing itself.
11
MR. McNEIL:
12
THE COURT:
13
MR. McNEIL:
14
Yes.
Not general, but as to that particular
issue.
THE COURT:
15
16
As to that particular issue.
Sure.
But it may have some implications
for this same issue playing out in other aspects of this case.
MR. McNEIL:
17
Again -- this is just the way I
18
think -- I'll go back to the general principle.
The general
19
principle that I want:
20
made.
21
That's your call; not mine.
22
you; assist this Court in getting there.
23
suggest that they have some more witnesses they may like to
24
introduce that they mentioned to add to the evidentiary
25
hearing, and in light of your concerns, we may too.
This was a very bad mistake that was
I don't think it rises to the level of bad faith.

My job is to get the facts out to
I was also going to
25
But I think the issue of working out some discovery
1
2
is fair.
legal rights is a proper balance, because I really understand
what you're grappling with with these folks.
So, yes, what aides this Court while protecting the
And let me just say one other thing.
When I came
in, we have done a Herculean effort in a short amount of time
to clean up whatever mistakes may have been made and at a
great cost, and I'm not -- I'm not asking for points for that.
I'm saying it needed to be done.
But my point is that there's
10
a lot I want to say at some point about why I don't think this
11
rises to the level of --
12
13
14
THE COURT:
Well, your task has been to clean up the
pasture, but it's hard to get the cow back in the barn; right?
MR. McNEIL:
Yes, sir, except the following.
15
Fortunately I grew up in west Texas and had that experience a
16
couple of times.
17
in that position.
18
will go back in the barn.
19
hopefully no more than a year, before trial.
20
getting this to trial is the Colonel Sanders recipe for
21
solving a lot of problems.
22
I'm not very good at it, but I have been put

And what I find out is I think this cow
We're about a year or two,
I really think
So I want to work with the Court to do that quickly,
23
efficiently, and properly.
But I do believe that we can
24
demonstrate that we can get this cow back in, and in light of
25
the fact that it's ironic that Drummond itself didn't respond
to a lot of discovery until the end of last year.

THE COURT:
2
3
26
Well, there's no question I have it on
both sides about a lackadaisical approach to discovery.

MR. McNEIL:
This doesn't excuse my side, but I'm
saying that there is a record that I think I can show you, but
as to what's appropriate to help you make that decision, Your
Honor, I'm for helping.

THE COURT:
8
9
payments.
That's my goal.
Your take is that these are security
You have given me expert testimony from a current
10
or former DEA agent in Houston saying that this is the law of
11
the jungle down there; right?
12
13
MR. McNEIL:
It is brutal.
I had no idea.
By the
way, you will find this gentleman very interesting.
14
THE COURT:
15
MR. McNEIL:
I already do.
He is one of those Americans that you
16
don't meet very often.
17
know, even in the U.S., under the -- you can just look at the
18
U.S. Marshal's website.
19
protection procedures and others, and I'm not -- I won't make
20
that argument right now, but I will tell you that --
21
THE COURT:
But, yes, absolutely.
And as we all
They have all kinds of witness
Let me ask you this.
How many times
22
does the United States give a witness protection until they
23
have testified?
24
MR. McNEIL:
25
THE COURT:
A good bit.
No.
I think it says 2500 --
You are missing the import of the
27
question.
MR. McNEIL:
THE COURT:
I'm sorry.
How many times has the United States
agreed among themselves we need to give this witness testimony
(REDACTED)?
MR. McNEIL:
I wish I could give you a number right
now, but I will get that number to you as part of this
discovery.
THE COURT:
9
10
I will.
My question really goes to this.
(START
REDACTION)
(END REDACTION).
11
12
That doesn't sound like security.
13
certain version of testimony.

MR. McNEIL:
14
That sounds like ensuring a
Am I missing the mark there?
Let me say yes for the following
15
reason.
We all miss the mark when we read one document out of
16
context.
17
Both sides are paid by good lawyers to fight that out.
That's one of the great wonders of the courtroom.
18
I think -- just give one example and that's it, and
19
that is, for example, declarations -- and, look, I don't have
20
this firsthand knowledge.
21
understanding.
22
that point in Colombia, threats were made.
23
documented.
24
protection while -- before depositions occur.
25
has a certain moral need, but you're the one that makes that
This is just a general
Declarations were provided.
Immediately at
Those can be
And the threat was that those people need some

I think that
28
ultimate judgment.
I think just taking that one quote out of context is
2
3
the problem.
sorry to comment, but one of the real problems here that I've
been struggling with, legal problem, is when you sue a law
firm and then somebody inadvertently produces a handful of
documents, how do you defend yourself without dumping the rest
of them in and waiving the rest of your privilege.
catch-22.
10
One of the real problems, Your Honor, is -- I'm
I've been struggling with that issue.
It's a
But I think
we can give you an explanation and will at the hearing.

THE COURT:
11
(START REDACTION)
12
13
14
15
(END REDACTION).
16
17
18
Am I missing something
there?
MR. McNEIL:
I can't agree more that I totally
19
understand your frustration and candidly anger about it.
20
telling you that it was a -- judgment was made.
21
explained at the hearing.
22
bad faith.
23
question to give you the information you need to answer.
24
25
I'm
It will be
And I do not think it rose to the
But that's a fair question to ask and it's a fair
THE COURT:
Yesterday we talked on the phone and I
asked you to examine where we are with respect to your
29
representation of the firm and Mr. Collingsworth.
like the firm's position at least from some things I've seen
is that, for example, Mr. Scherer wasn't aware of some of
these things until the supplements to discovery had to occur.
And this may be a better question for the plaintiffs, but
since I've been throwing you some curveballs and fastballs,
I'm going to throw you a softball.
8
9
It seems
Why shouldn't we default the firm at this point,

assuming that default is even on the table?
10
MR. McNEIL:
11
this is a libel case.
It has to do with their suing us.
12
not we're suing them.
That's a real important distinction.
13
We're the ones that are being attacked here.
14
to bring this lawsuit, but they did.
So we have a right in
15
this courtroom to defend ourselves.
I had a father who was a
16
criminal lawyer in the early part of his career in west Texas,
17
and that's a tough tour de.
18
ourselves.
19
Here is my position on that.
No. 1,
It's
They didn't have
We have a right to defend
Beyond that, our position is that this -- as to the
20
sanctions motion, as in the libel case, that there was no
21
libel either by Terry Collingsworth or the firm.
22
second position as to the sanctions motion is that neither
23
should be sanctioned for throwing out their case when they're
24
trying just to defend it.
25
And our
Our position is, third, that whether or not
30
Mr. Collingsworth did something absolutely incorrect, even
though it wouldn't go to bad faith, absolutely incorrect, we
should have -- that is not the determining fact in the libel
lawsuit.
whether these gentlemen did it.
The libel lawsuit has to do with the truth as to
You have a wonderful quote that -- I just love it.
6
7
It was in the April 2014 transcript.
It said some of these
people may be -- all of them may be guilty, none of them may
be guilty, there may be a rogue lawyer or two; I don't know;
10
but we're going to get to the bottom of it so we can get it to
11
the jury.
THE COURT:
12
13
And that is the goal of me and Your Honor.

All right.
Mr. Davis, why are you
moving for a default as to the law firm?

MR. DAVIS:
14
Well, Your Honor, at this time, the
15
evidence is clear that we would present to the Court that at
16
all times relevant to the claims being made in this case,
17
Mr. Collingsworth is a partner of Conrad & Scherer.
He is the
18
manager partner of the District of Colombia office.
He is
19
today ostensibly in good standing with that firm.
20
done nothing to separate him from the firm under the law of
21
agency or otherwise.
22
any --
23
THE COURT:
They have
They have not taken the position in
Isn't that a question for the jury?
24
That's one of the arguments you will make to the jury and that
25
is that you -- the actions of Collingsworth are attributable
1
2
31
to the firm?
MR. DAVIS:
That could be an issue if they were
going to raise that, that he was a rogue lawyer, he was acting
ultra vires or something like that.
We haven't seen it.
They haven't raised that.
Secondly, it's very important, Judge, that with
regard to the sanction issues that key members of the Conrad &
Scherer Florida office, Mr. Scherer and other people, were
privy and on the email traffic involving, for instance,
10
(REDACTED).
11
Conrad & Scherer.
12
& Scherer.
13
then we don't know exactly why, but the money would go to
14
Washington to International Rights Advocates and that money
15
would then be separated and go back to Colombia.
16
were doing it that way, I don't know.
17
raises certain inferences.
18
So they knew the money emanated from

The monthly payments would come from Conrad
For a while they went directly to Colombia.
And
Why they
I don't know.
It
But the law firm itself at this point in time stands
19
exactly as we see it with the same footing as
20
Mr. Collingsworth.
21
THE COURT:
22
MR. McNEIL:
Mr. McNeil?
Your Honor raises an interesting point
23
about agency theory, and without going into the discussion
24
earlier today, when I was briefing in a law firm in
25
Washington, D.C. many years ago, my task was to look at
32
whether we could get summary judgment on agency, and the team
there wanted us to find it, but there is no law that -- it's
extremely difficult to get summary judgment on agency.
inherently a fact issue.
It's
That also brings up what Your Honor has said and
5
6
that is when it's a fact issue, it really needs to be a trial
issue.
THE COURT:
8
9
So one of the freeing aspects of this
case for you, Mr. McNeil, is that you're dealing with enough
10
problems right now that you're willing to make certain
11
concessions about what really ought to go to a jury here.
12
find that refreshing.
13
MR. McNEIL:
14
THE COURT:
15
You know -Because most defense lawyers might argue
it the other way.

MR. McNEIL:
16
Did you know that about half of my
17
practice is plaintiff and half defense, and I've just been in
18
Australia.
19
company, some huge cases there, some just recently we've
20
gotten rid of.
21
love --
22
I hate to wander.
Representing a big energy
But the more I go to different forums I
THE COURT:
I don't want to interrupt you, but I
23
just got a funny thought as to Alexander and the No Good,
24
Horrible, Very Bad Day and I want to go to Australia.
25
you'll want to go to Australia after this case.
Maybe
MR. McNEIL:
Well, I will tell you something.
33
What
I was going to say is that the more I see -- they really have
this rigidly in their mind.
All we do is to get the facts so these folks decide.
many clients have we all said, look, our job is to get the
facts to them.
jury thinks.
8
9
10
11
We are officers of the court.

And how
What you think and believe may not be what the
But that's it.
And, Your Honor, I don't think that's confined to

this case.
It's confined to any case.
And I candidly think
it's the most persuasive way to try a case.

THE COURT:
Well, obviously one of the things you
12
need to start thinking about with your clients and the same
13
thing with Mr. Davis and his clients is this:
14
not the appropriate sanction, in the event I agree that this
15
is bad faith and that some sanction is due, what are the
16
appropriate level of sanctions that ought to be considered?
17
If default is
At the end of their brief on the renewed motion for
18
sanctions, I think page 30 of the brief, they laid several
19
other options.
20
some discussions with your clients about where you could end
21
up if things don't go your way on the motion short of default.
22
It seems to me that you might want to have
MR. McNEIL:
Your Honor, that brings an idea to my
23
head and that is it probably -- given that this initial stage
24
of briefing triggered a number of new questions for you, that
25
we may need to do some supplemental briefing, and I would --
34
again, applying my principal, we're here to help you make this
decision.
3
4
5
We're happy to do that.

I'm just thinking.
Some briefing schedule on some
of these issues might be appropriate, or -THE COURT:
All right.
We will take that up.
What
about the use -- and now that Mr. Brown is here, we can get a
little bit more into these issues.
8
9
Mr. Brown, what we've discussed is I had said

there's three factors that go into this whole keeping things
10
confidential, it seems to me.
11
the defendants.
12
two raised by the defendants are that there may be some help,
13
welfare, and safety issues related to not the witnesses
14
themselves, so the issues may be health, safety, and welfare
15
of family members of these witnesses, not the witnesses
16
themselves.
17
Two of them have been raised by
One has been raised by the Court.
But the
And the second consideration raised by the
18
defendants is the confidentiality that they assert would
19
normally attach to these type of communications as they go
20
about litigating cases on behalf of their clients.
21
be work product.
22
may be just kind of a business's right to keep its private
23
affairs private.
24
trying to list those out.
25
That may
That may be attorney/client privilege.
Again, I'm not trying to characterize.
That
I'm
The one I raised is more of a fundamental starting
35
point and that is we begin with the idea that litigation in
this court is open and available to the public.
has the right to know what is going on in the United States
courts.
judiciary.
6
7
8
9
The public
The courts aren't owned by the litigants or the

They are owned by the people.
So what I've tasked them to do is to be thinking

about how all those three factors apply.
It seems to me -- and, again, without ruling; this
is an inclination -- the fact of payments, the witness's
10
identity who received payments is not going to be
11
confidential.
12
family members clearly should remain confidential.
13
It seems to me that the identity or location of
What I have a question about is where we stand with
14
respect to the second factor raised by the defendants and that
15
is the privacy rights that otherwise might attach, the
16
privilege rights that otherwise might attach to their conduct
17
of business as a law firm.
18
far on behalf of Mr. Collingsworth and the firm overtakes
19
their expectation of any privacy or privilege with respect to
20
their business practices here, their attorney/client
21
privileged relationships with other lawyers or clients
22
regarding the fact of payments and the circumstances of
23
payments, not -- again, we would redact out anything that
24
relates to the family members and also communications with
25
other law firms that might otherwise be work product or that
And I wonder if what I've seen so
36
internally would otherwise be work product.

The process I kind of proposed before you got here
2
3
is that if those things are discoverable and publicly
available, before they become publicly available both sides
ought to be able to give comment or objection to you which
would be designed to protect the location, identity of family
members, for example.
an R&R to me in terms of how these documents and/or subject
matters ought to be redacted and/or still under seal, and then
You could take that into account and do
10
after appropriate opportunities to object to your
11
recommendation to me, we could make a final decision about
12
that.
The Court could make a final decision about that.

That's the process I kind of laid out to the parties
13
14
15
earlier.
Do you have any thoughts on that for us?

MR. BROWN:
Well, the thing that kept coming up
16
during our discussions of these issues -- and we tried to work
17
through the issues with both sides trying to negotiate a
18
confidentiality order and they worked to try and do that, but
19
we kept coming back to these issues.
20
the fact of the witness payments was not going to be
21
confidential.
We had determined that
22
The question then became what happens with people
23
under -- with family members, in other words, payments that
24
were made to those family members.
25
concern to me and had not addressed that.
So that issue was of
37
The other issue that I had concerns about was sort
1
2
of the third issue that you've identified, which is what I
would call sort of confidential within the realm of this
litigation information, that it should not be generally posted
on the Internet or otherwise because you do have a trial --
discovery is discovery.
the day.
discoverable within the confines of this case that may or may
not end up in the trial of this case.
A trial becomes a trial at the end of
And there are certain information that may be
And that was a concern
10
that I had, how that got used, how that information was used,
11
but I understood the need to use the information.

And I had thought through potentially a process
12
13
whereby the parties could use it and keep control of it, but
14
if they had to leave it with a third party, which I understood
15
might, in fact, happen, that they would identify to the Court,
16
either through me or however you wanted to handle that, that
17
in this particular instance we're going to have to leave
18
certain documents with an entity or person.
19
very rare -- I would assume very rare circumstances.

But that's the only thing I thought of, but I don't
20
21
know if that's even necessary.
22
saw it.
23
That would be a
THE COURT:
That's really the issue, as I
Well, a couple of things on that.
24
First, I think our local rules certainly are consistent with
25
that in that the parties are the custodian of discovery
38
documents, not the Court.
with the Court.
intended ruling or policy, it's just the fact of the matter
that discovery is not available or readily available through
the court's old file system or current electronic system.
Again, that's just because of the way we handle discovery for
efficiency and recordkeeping space here.
So in the normal case, just based on not
I understand what you're saying about at trial,
8
9
You don't file your discovery in
certainly things will have to come out.
What about a hearing?
10
I take it the hearing on motion for sanctions would be a
11
public hearing.
12
of protecting family members -- and that is really more a
13
question for the parties -- why wouldn't that be open to the
14
public?
So other than maybe dealing with the concept
15
Mr. McNeil?
16
MR. McNEIL:
This is what I like about this case.
17
It's interesting, has got so many twists.
18
various courts when something is sealed -- and I hate to even
19
mention -- over in Australia, for instance, if something comes
20
up that's sealed, you refer to it as Exhibit X.
21
shown to the public.
22
in this case, it's not the jury seeing it, it's just you, so
23
it's easy to do.
24
General statements can be --
25
That is handled in
It's not
You can discuss it generally.
The Court
We can provide the information to you.
THE COURT:
But again, courts are open to the
public.
than that's the way they do it in Australia?
39
What is the legal reason for doing it that way other
MR. McNEIL:
As I understand it, the First
Amendment, obviously, and freedom of speech is one of the
great things we have in this country.
specific purposes to get outside the courtroom and use it for
extracurricular activities is not -- so the issue is how to
divide the good from the bad, because every time we try to do
something good in this country, there's a little bad that
10
comes along with it.
11
of work that through.
12
Dumping data out for
That's part of the court system, to kind
So my feeling is that there are two ways to do it.
13
Option one is applying the Pandora's box principle, that once
14
it's out, you can't put it back.
15
favor of having the transcript temporarily closed and then
16
opened up later if it turned out it was fine or fine except
17
for 15 minutes of Mr. McNeil making an argument or Mr. Wells
18
making an argument.
19
And that would dictate in
That's one approach.
The second one I was suggesting was -- because it
20
does involve you, and some of this is sensitive.
21
only sensitive, but it deals with this lawsuit involving
22
Drummond -- is that we have a procedure.
23
confidential document that you see it, we mark it, but it
24
isn't thrown into the public record.
25
THE COURT:
Mr. Wells?
And it's not
If you're using a
That's all.
MR. WELLS:
40
Your Honor, bringing this out from the
abstract to what we're actually talking about in this
sanctions hearing, the representations that were made to this
court are public.
were made to Mr. Brown in briefing that has all been under
seal, those are all public.
Except for the few representations that
The proof that those representations are false is
7
8
what is being tried to be confidential, and that is something
that needs to be public.
It's not confidential in the first
10
place, but to go to your point of the public nature of courts,
11
the function of the court system and the operation of the
12
court system is even more of public interest than just the
13
general rule.
14
a fraud has been practiced on this court.
15
would merit an even higher need for nonconfidentiality.
And in this case, there is an issue of whether
MR. McNEIL:
16
One quick comment.
And that, we feel,
That triggered an
17
idea.
18
information or introduce an exhibit, at that point we could
19
raise the issue of this should be protected or not, and you
20
can make that call at that point.
21
lot of this is just hypotheticals.
22
23
24
25
A third way to do it is if we get to some confidential
THE COURT:
But it may end up that a

And I will say --
For some reason, I don't think that's
going to turn out to be the case, but we'll see.

MR. McNEIL:
think, Your Honor.
It may or may not.
I'm just trying to
Another approach is to put on a list
41
beforehand of some things that we think should be protected.
It's not really totally right to say that a fraud is being
committed, making that predicate assumption, and, therefore,
anything in the defense against that claim becomes public.

It seems to me that -- we could have a trade secret
5
6
and fraud.
debating whether there was a fraud.
it.
You don't give away the trade secret while

There's ways to protect
So I think we're talking about a limited amount of
10
information here.
11
about it, Your Honor, I think we ought to maybe put it on a
12
list ahead of time if we're concerned about it so that it's
13
not a matter of interrupting the flow of the hearing, which I
14
don't like either.
15
And I really think -- the more I think
MR. DAVIS:
May it please the Court, just to answer
16
the question the Court posed as what is the basis for doing
17
this, and the answer is there is no legal basis.
18
There is no legal basis to make this hearing
19
confidential and private, to exclude -- if the press wanted to
20
come here and they raise the issue, I think they would have
21
the right to be here.
22
be some legal bases to have matters in private settings.
23
think if you had a 4-year-old child of child abuse, something
24
like that, then the Court can in looking at the interest, but
25
here there is no legal basis.
If there is no legal basis -- there can

I
42
This hearing on sanctions on issues that were
1
2
committed to the court is part and parcel of the overall
trial, which is also public.

MR. McNEIL:
One final point.
If he is raising a
legal basis, I would just -- one thought the Court might
consider is maybe a two or three-page bullet point brief on
whether that's indeed true.

THE COURT:
8
9
Here is one thought I have, that prior
to a hearing we get everybody in the same room with the
10
Special Master with an advanced list from the Special Master
11
what in the exhibits and witness list you expect should be
12
confidential and why; let him do an R&R to me in advance of
13
the hearing; I will make a ruling before the hearing.

That gives you a chance to make your arguments.
14
It
15
gives you a chance perhaps to position your arguments to the
16
special master outside of my hearing at least initially.
17
gives an opportunity for there to be agreement about certain
18
things.
19
bit that way and deal with what's really going to be at issue
20
at my hearing.
21
22
23
It
And then I will be able to cut to the quick a little
MR. DAVIS:
We are in agreement with that, Your
THE COURT:
What about the issue of investigations?
Honor.
24
My understanding is there may be some bodies investigating
25
some aspects of this case.
Why would there be any
43
confidentiality with respect to providing those agencies
information, including as I told you yesterday my concern that
it may be appropriate for me to provide information in this
case related to the United States Attorney's Office and/or any
Bar Associations that licensed the lawyer in this case?
MR. McNEIL:
Your Honor, given that hypothetical,
I -- there are rules.
myself with them as to what can and should be produced to an
investigative agency, by us against them or them against us.
I will quickly try to familiarize
My only request is if that referral is made, to let
10
11
us know so that we at least have some sense of what to do.
12
I'm glad to work it at that point and seeing what needs to be
13
done.
14
THE COURT:
15
the question.
16
be ongoing?
Well, let's back up to the first part of
What about the current investigations that may
17
Why would there be any limitation with either party
18
providing to law enforcement any of these records, maybe with
19
the understanding from law enforcement that they're not really
20
after the identities or location of family members down in
21
South America?
22
MR. McNEIL:
Your Honor, it's always easiest to
23
answer a question when you know the least about it and that's
24
me right here.
25
someone smarter than I am to accompany me for that reason, and
I will say that I have always tried to find
44
Chris Niewoehner of Steptoe is with us.
U.S. Attorney who put the Governor of Illinois in jail,
Blagojevich, and also knows a lot about these issues, and so
if I might defer to him.
THE COURT:
MR. NIEWOEHNER:
You can defer to him, sure.
THE COURT:
MR. NIEWOEHNER:
12
MR. NIEWOEHNER:
15
16
I was an Assistant U.S. Attorney
for 12 years.
MR. McNEIL:
14
Chris
Were you the U.S. Attorney, Assistant?
11
13
Thank you, Your Honor.
Welcome.
Niewoehner.
10
Chris is a former
Who put Gov. Blagojevich in jail.

The great state of Illinois
produces its share of corruption, Your Honor.

THE COURT:
Well, they are not alone.
They have
company in that department.

MR. NIEWOEHNER:
Your Honor, one of the things,
17
speaking from my former hat as a prosecutor, is that there's
18
always a concern about obtaining things that were privileged
19
or confidential for some reason that you didn't even fully
20
understand.
21
get something that is privileged in an investigation and you
22
want to go forward with it, it can actually be a fatal flaw
23
that might get excluded down the road.
24
U.S. Attorney's offices that I've worked for always try to be
25
very careful before walking into -- getting into the affairs
It has a potentially crippling effect.
If you
It is the reason that
45
of potential work product of an attorney or law firm.
And so from the perspective of what bodies might be
investigating this, it's always dangerous for one side or the
other to be presenting the information.
I think we've been
trying to stress in oral presentation.
Special Master Brown
had talked about a process before something that was disclosed
to a third party there would be some notice, and -MR. BROWN:
8
9
That wasn't exactly what I said.
said -- what my thought was and my concern was that no one
10
hamper each other in their investigation.
For example, my
11
concern was this.
12
investigator by one side that X was true.
13
needs to be able to say here is why X is not true.
There were statements made perhaps to an

The other side
And what I was stating only had to do with retention
14
15
of a piece of paper, basically, not with sharing of the
16
information.
That was what I was trying to make clear.
MR. NIEWOEHNER:
17
And I apologize if I had not fully
18
understood Special Master Brown's thoughts, but I think the
19
fundamental notion -THE COURT:
20
Let me take you back a couple of steps
21
and make sure I understand the process that we're asking about
22
there.
23
hypothetically say that the Justice Department and United
24
States Attorney's Office, some other investigative agency,
25
whether it's one of the alphabet agencies that appears in this
There's some investigation going on.
Let's
46
court from time to time, is looking into Drummond's practices
as it relates to some of the allegations in the previous
cases.
investigating body understands that, yes, witnesses have given
sworn testimony that we were involved with and complicit with
AUC in some of these extra-judicial dealings, but you need to
understand these witnesses have received payment from the
lawyer who was prosecuting those earlier actions.
that fair game?
10
All right?
And Drummond wants to make sure that the
MR. NIEWOEHNER:
Why isn't
I think a couple of thoughts here,
11
Your Honor.
12
in competing legal rights here.
13
course, always has the right to subpoena directly.
14
example, for Drummond to point to the fact that I can't
15
disclose information for other reasons but if you were to go
16
to Conrad & Scherer and subpoena this, obviously the
17
Government is perfectly capable of getting whatever
18
information it needs from whichever party it wishes to.
19
there is another mechanism by which this could be done.
20
And, again, this is a very interesting exercise

The governing body itself, of
So, for
So
There's also protection in there because, remember,
21
we're in this unusual situation of the underlying cases for
22
all the sanctions and issues we're addressing.
23
suggested that the plaintiffs in the underlying cases bear any
24
responsibility.
25
we have suggested repeatedly have to be looked at with the
Nobody has
And the consequences in this defamation case
47
consequence to the innocent plaintiffs in the underlying case,
and a disclosure of information -THE COURT:
Well, with respect to them as of right
now at least -- and I'm not sure a mandate is issued -- there
are no plaintiffs in any underlying cases, are there?
least that have claims before this court?

MR. NIEWOEHNER:
7
8
At
My understanding is that the Melo
case is still -THE COURT:
I'm going to talk about the Melo case
10
before we get out of here.
11
me Melo is not due to be dismissed on the same ground as these
12
other cases were.
We'll talk about that.
MR. NIEWOEHNER:
13
I hear Mr. Collingsworth telling
And I believe there are some common
14
law claims, and obviously these matters are still up on
15
appeal.
16
recognize what the Eleventh Circuit has spoken.
We don't know what is goes to happen.
17
THE COURT:
18
MR. NIEWOEHNER:
19
THE COURT:
We obviously
There has been a petition for rehearing.

That's my understanding.
You know, I sit with the Eleventh
20
Circuit.
I don't fully understand Eleventh Circuit in terms
21
of some of their internal operating procedures.
22
know of are very sound.
23
leaves, that I have two cases go up on appeal and we state
24
Melo pending those appeals.
25
some last year, affirming dismissal of the case.
The ones I
It seems to me, reading the tea
The first case we got an opinion,

There's a
48
second case in front of a second panel.
Plaintiffs, as best I
can tell, petition for rehearing on Bach with respect to the
Eleventh Circuit's first decision.
It looks like there was
some type of hold on that motion.
In the meantime, several
months later a second opinion comes out, a different panel,
affirming dismissal of that case.

Now, there may be some more litigation, mandate
7
8
hasn't issued.
The way I read that is more than likely one
panel wanted to hold off on a decision as to the first panel's
10
decision until it had a chance to assess its appeal and make a
11
decision.
12
unless there's a petition for cert by the Supreme Court and a
13
granting of that cert, those cases are over.
Now we have both decisions.
MR. NIEWOEHNER:
14
Once mandate issues,
Right?
I'm going to have to defer -- my
15
understanding is that -- Mr. McNeil perhaps could answer this
16
better.
17
MR. McNEIL:
He's third-hand.
18
THE COURT:
I'm not going to ask the first-hand.
19
MR. McNEIL:
I believe that there are common law
20
tort claims still alive in Melo.
21
may be certain affirmative defenses.
22
THE COURT:
23
MR. McNEIL:
24
law.
25
point.
I'm second-hand.
There are various -- there
Based upon Colombia law?

My understanding is that it is Colombia
That means that that hasn't been disposed of at this

If you ask me any more about Melo, I can't tell you.
THE COURT:
Let's say under 1367 those are due to be
filed somewhere else, or some other ruling like that.
Melo aside, I guess my question is this:
interests are still up there?

MR. McNEIL:
49
Putting
What client
Well, I was just thinking about it.
The client, if they want to relitigate or take up the case
elsewhere, that they shouldn't have to waive various interests
or their prejudice and their interests.
cause of action or they don't.
They either have a
If they indeed do, you
10
shouldn't throw the baby out with the bathwater by giving them
11
all the discovery, whatever, in the previous case.
12
that -- I apologize that I cannot speak -THE COURT:
13
14
Well, it is more complex than we're
going to be able to resolve today.

MR. McNEIL:
15
I think
I'm raising the questions.
We haven't mentioned this factor today
16
and I won't go into it, but there are these cases -- there are
17
other cases out here, other human rights cases, and they may
18
have some impact on that.

THE COURT:
19
20
Involving my current or former plaintiffs in these cases?

MR. McNEIL:
21
22
What other human rights cases?
No.
No, they are different.
You are
right.
23
THE COURT:
24
MR. McNEIL:
25
MR. WELLS:
So like Chiquita?
That's right, Dole.
Judge, if I can comment just on the
50
investigation aspect.
why can, say, the Colombian fiscalia, who Mr. Collingsworth
has testified he has sat down and talked to and provided them
the testimony of these individuals, why should they be
prevented or us be prevented from telling the Colombian
fiscalia, you know, those witness statements you got, they all
received payments.
interests.
These witnesses supposedly killed these clients'
relatives.
They have no interest in the Government not
10
11
This whole discussion got started as
That has nothing to do with client
knowing these witnesses were paid.

THE COURT:
Wouldn't that simple issue be resolved
12
simply by if the fact of payment is discoverable in public,
13
then you can provide information about that?
14
MR. WELLS:
It would.
15
THE COURT:
Any disagreement from you, Mr. McNeil?
16
MR. McNEIL:
But it raises an interesting question.
17
I just want to throw it out, because we're here to help you.
18
And the more you know, the better you can make a choice.
19
I don't know what's -- not only am I concerned about
20
the territory of Colombia and its culture or its problems with
21
intimidation of witnesses, but just as a matter of practice, I
22
try to figure out -- I don't have an answer, but there is a
23
procedural issue here in the court system.
24
the Attorney General is Drummond's counsel down there.
25
it's a small world in every town, but I think we need some --
The law partner of

And
think through some safeguards here, and I haven't any to
propose right now.
THE COURT:
51
I just throw that out as an issue.

All right.
Wrap-up time.
We have a
plan for briefing in advance of the hearing.
for dealing with confidential information that could be used
at the hearing.
that are really at dispute that could come up at a hearing.
8
9
And we have a plan for getting to the facts
Anything else that either side thinks we need to do

with respect to preparation for the hearing?
10
Mr. Davis?
11
(START REDACTION)
12
13
14
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16
17
18
19
20
21
22
23
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25
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1
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8
9
10
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(REDACTED)
52
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(REDACTED)
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(REDACTED)
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(END REDACTION)
16
THE COURT:
All right.
Well, it sounds like I'm not
17
going to be able to get in the weeds on that today.
18
Mr. McNeil, when does John Grisham show up?

MR. McNEIL:
19
20
I will tell you in our -THE COURT:
21
22
Your Honor, this is too good for him.
I'm not going to ask you to comment on
this.
23
MR. McNEIL:
24
THE COURT:
25
MR. McNEIL:
But I do want to say -No.
I want to say something.
I want to say, if I could, just real
55
quickly, when we began finding that there might be some gaps,
we hired the former head of the computer division of the FBI
in Washington who also ran the FBI Enron task force, turned it
over to him.
consulting expert.
They had some further questions.
And the gentleman went back and did a further report.
report makes the conclusion that there wasn't any intentional
deletion.
He is a testified expert.
He is not a
We presented report one to Mike Brown.

Mike had other questions.
His
And those are detailed reports by one of the best
10
guys in the country that has literally -- they are getting his
11
documents.
So I feel we've really tried to get to the heart of
12
13
it.
I've never designated an expert before his report was in.
14
But that's what they've got.
15
litigated before the Court in whatever proceeding it wants to.

THE COURT:
16
17
I'm happy to have any of that
All right.
Well, you told me on a
couple of different occasions that you're here to help me.
18
MR. McNEIL:
19
THE COURT:
I'm trying.
It will help me if you do a thorough
20
investigation in terms of what's missing, why it's missing,
21
and when we'll get it back.

MR. McNEIL:
22
Yes, sir.
And I think most all that
23
are in those reports, but we will see what else we can put
24
together.
25
expert -- and don't hold me to this -- concludes that there
I mean, it is very detailed.
In fact, the
were other sources of a lot of this.
gaps.
firm finding stuff that's years old.
56
We filled in a number of
A lot of this just relates to the difficulties of a law
THE COURT:
Well, eventually we're going to get to
who is responsible for it missing.
to figure out what is missing, why it's missing, and how we
get it back.
MR. McNEIL:
THE COURT:
But right now I want you
Yes, sir.
And I want a report from the Special
10
Master, to the extent you haven't already given that, within
11
two weeks.
12
MR. McNEIL:
13
THE COURT:
14
Based on your current set of knowledge
on those three questions at that point.
15
MR. McNEIL:
16
THE COURT:
17
MR. McNEIL:
18
All right.
All right, sir.
We'll do it.
Any other factoids I should know about?

Your Honor, thank you.
You seem to be
well in control of the situation.

THE COURT:
19
If I was more in control of the
20
situation, maybe we wouldn't be here, because if I had
21
control, we would just be litigating, not off on these
22
fortuitous or problematic frolics and detours.

All right.
23
I've got one final question.
I'm just
24
curious.
Are there still payments being made to any persons
25
in Colombia with respect to what the defendants would
characterize as security payments or otherwise?

MR. McNEIL:
2
3
Subject to our objections as to the
discovery cutting off on October of 2013 -THE COURT:
Discovery cutoff in your case, in this
defamation case, does not affect my taking up a motion for
sanctions.
MR. McNEIL:
7
8
9
10
I just put that in the record, Your
Honor.
THE COURT:
MR. McNEIL:
You didn't need to.

Having said that, there are continuing
11
payments, and I'm not sure -- (START REDACTION)
12
(END REDACTION).
13
14
15
57
I think that's right.
THE COURT:
I've heard only three before.
We're
sure of that?
MR. McNEIL:
Your Honor, to the best of my
16
knowledge, but I will -- as Your Honor knows, we have
17
continued to supplement as we go along, but those are the ones
18
we have uncovered.
19
20
21
THE COURT:
All right.
What else do we need to take
up for right now?

MR. SPOTSWOOD:
Your Honor, we had filed a motion
22
for reconsideration of financial and public figure discovery,
23
and that's something that we could address today if you have
24
any questions about that.
25
THE COURT:
That has been fully briefed.
Give me your overview of that.
MR. SPOTSWOOD:
58
Your Honor, let me hand out a --
this won't take a few minutes here.
noting that the Court denied the motion to compel on the
assumption that Drummond would be making certain stipulations
that would moot the need for financial and public figure
discovery.
made.
It turned out that those stipulations were not
At the October 3 hearing on page 3 of this
8
9
I would like to start by
presentation, you will see excerpts from what Drummond was
10
saying, and I think you will also see there what the Court was
11
understanding at the time, which was that this was a case
12
involving nominal damages and punitive damages only.

Some nine or 10 weeks later Drummond stipulated that
13
14
it was seeking presumed compensatory damages, not merely
15
nominal damages.
16
December of 2013.
17
Nominal damages would be $1.
18
millions.
19
developed --
20
They did that in their reply brief filed in

Those are two very different things.
Presumed damages can be
The presumed damage theory was originally
THE COURT:
Let me ask you this, Mr. Spotswood.
21
wouldn't we just defer this until after we get through the
22
troubled path we're on?
23
MR. SPOTSWOOD:
24
THE COURT:
25
Why
Your Honor, we --
As long as you have an opportunity to
discover this pretrial, you are good; right?
MR. SPOTSWOOD:
I am, but it's an important part of
the discovery process.
financial information that relates to rebutting a
damages claim -THE COURT:
5
6
We're talking about Drummond's
But you only want this for purposes of
trial, not for another purpose; right?

MR. SPOTSWOOD:
7
8
59
That would be true, Your Honor, both
on public figure status -THE COURT:
So as long as timing is sufficiently
10
before trial and you have an opportunity to prepare your
11
defense.
12
default because then the only thing left to do would be to try
13
a damages case, so this is something we're getting to either
14
way?
Now, you realize this would still survive even
15
MR. SPOTSWOOD:
16
THE COURT:
Correct.
I understand your point there that it's
17
not completely mooted depending on how this goes.
But with
18
the Court's other obligations outside this case and the
19
current things we're working on in this case, would you mind
20
if I tackled one forest at a time?
21
MR. SPOTSWOOD:
Your Honor, I guess the concern that
22
we have, honestly, is that this has been very much a one-way
23
street for us.
24
several months.
25
We have been in the responsive mode for
THE COURT:
That may have something to do with the
allegations we're dealing with.

MR. SPOTSWOOD:
2
3
60
I understand, but there's a good bit
of work to be done and if we just simply had a green light -THE COURT:
Whether it's a mistake, whether it's an
error in judgment, whether it's cutting too close on the one
hand, or whether it's a fraud and bad faith perpetrated on the
Court, all this could have been avoided if accurate
information had been given earlier; right?

MR. SPOTSWOOD:
Your Honor, there is no question
10
that a different path would have put us on a different path
11
here.
12
THE COURT:
And then we'd be fighting about presumed
13
versus nominal damages and witness and exhibit lists and
14
things like that that we're going to have to put off now.
15
other issue is we have the RICO claim that both sides tend to
16
think there may be some merit and they want to talk about it
17
some more and think about it some more, but there may be some
18
merit to joining that up with our current case for purposes of
19
discovery and maybe trial.
20
I heard Mr. McNeil say trial within a year.
21
that's a little optimistic.
22
relationship with the RICO case is.
23
MR. SPOTSWOOD:
24
THE COURT:
25
of good news.
The
I think
We will have to see what the
Yes, sir.
And I will give your side a little bit
I know RICO tends to be a little more of a
61
summary judgment success story for some defendants than it
does defamation from time to time.
out if they've got a valid RICO claim to go forward; and if
so, whether there's evidence to support it.
So we may need to figure
I'm not saying one way or the other.
I'm just
saying -- I'm realistic in understanding that's something
we're going to have to get to.
in fact, my assumption is right that these cases are going to
travel together in some respect, would we have to worry about
10
Only after we do all that, if,
getting you ready for your trial.

That doesn't mean I'm going to wait until the 11th
11
12
hour to do all this.
13
today or tomorrow.
That just means I'm not going to do it
MR. SPOTSWOOD:
14
Well, Your Honor, one final point I
15
would like to make on our side with respect to this discovery
16
and that is that the public figure status issue has got to be
17
decided.
18
law based upon the record evidence.
19
of the decision-making line that requires that be done a bit
20
earlier.
THE COURT:
21
22
It is ordinarily decided by the judge as a matter of
But in the ordinary case, we're not
dealing with these issues?
23
MR. SPOTSWOOD:
24
THE COURT:
25
So there is a staggering
case.
All right?
That is true, Your Honor.
Which is good news for the ordinary
MR. SPOTSWOOD:
THE COURT:
up?
Thank you all.
5
6
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24
25
Yes, sir.
All right.
Thank you.
What else do we need to take
If there's nothing further, I guess we will adjourn.
(End of proceedings.)
62
C E R T I F I C A T I O N
I hereby certify that the foregoing transcript

in the above-styled cause is true and accurate.
Leah S. Turner, RMR, CRR

Federal Official Court Reporter

Drummond V Collingsworth Transcript May 21 2015

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Drummond V Collingsworth Transcript May 21 2015

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Case 2:11-cv-03695-RDP-TMP Document 371 Filed 09/14/15 Page 1 of 63

UNITED STATES DISTRICT COURT

DRUMMOND COMPANY, INC.,

May 21, 2015

For the Plaintiff:

William Anthony Davis, III

For the Defendants:

Leah S. Turner, RMR, CRR

Case 2:11-cv-03695-RDP-TMP Document 371 Filed 09/14/15 Page 2 of 63

This cause came to be heard and was heard on the

(The following occured in chambers.)

Are you ready?

Probably a little bit of free flow in

I'll ask you about and then we will go from there.

Any concerns you have?

in the courtroom that you're concerned about?

word is out this is an interesting case.

But they are in a code of silence.

We think everything should be public.

That's fine with us.

What I want to hear about is security

respect to those witnesses in South America.

Case 2:11-cv-03695-RDP-TMP Document 371 Filed 09/14/15 Page 3 of 63

already knew that.

(In open court.)

Thank you, Judge.

We are here in Drummond

versus Conrad & Scherer and Collingsworth, case 11-CV-3695.

The Court asked the parties to come in.

evidentiary hearing for today.

conclusion that we weren't going to be able to conduct the

necessary aspects of an evidentiary hearing in the short time

Therefore, I asked everyone to come in so we could discuss

exactly how we ought to proceed, get some preliminary rulings

and/or agreements if necessary.

of the things that are progressing with the Special Master as

relates to confidentiality orders, protective orders, and the

Obviously, I have some pretty great concerns about

where we are in this case right now.

I guess the first order

of business would be just to pick up with the discussion we

had yesterday on the phone with counsel, and that is my sense

is that we should have a briefing schedule in advance of an

evidentiary hearing which essentially tracks a hybrid version

Case 2:11-cv-03695-RDP-TMP Document 371 Filed 09/14/15 Page 4 of 63

of my summary judgment procedures and/or my bench trial

Essentially what I had asked the parties to do is

propose findings of fact and conclusions of law, focusing more

on the findings of fact, the factual matters that -- we will

relevant to the issue we have to undertake with respect to the

motion for sanctions.

Then we would allow a time period in which the

defendants would be allowed to respond to those findings,

proposed findings, as to whether they dispute or do not

any additional facts that they believe are relevant to the

to the plaintiff to indicate whether they agree or disagree

with respect to those particular proposed findings.

The defendants would then be able to propose

I think when we are done with that process, we would

have things more narrowed down in terms of exactly what we

have in dispute and exactly what we need to do in terms of an

My sense is that we will do that, and once we see

where we are, we will set a date for the evidentiary hearing