1 5BIHSEPC 1 UNITED STATES DISTRICT COURT 1 SOUTHERN DISTRICT OF NEW YORK 2 ------------------------------x 2 3 IN RE: 4 SEPTEMBER 11th LITIGATION 21 MC 97 (AKH) 5 ------------------------------x 5 6 New York, N.Y. 6 November 18, 2005 7 1:00 p.m. 7 8 Before: 8 9 HON. ALVIN K. HELLERSTEIN 9 10 District Judge 10 11 APPEARANCES 11 12 KREINDLER & KREINDLER, LLP 12 Attorneys for Plaintiffs 13 BY: MARC S. MOLLER 13 BRIAN J. ALEXANDER 14 DENNIS J. NOLAN 14 JAMES P. KREINDLER 15 15 BAUMEISTER & SAMUELS, P.C. 16 Attorneys for Plaintiffs 16 BY: MICHAEL F. BAUMEISTER 17 17 BAUM HEDLUND ARISTEI GUILFORD & SCHIAVO 18 Attorneys for Plaintiff PEC 18 BY: RON GOLDMAN 19 19 HANLY & CONROY, LLP 20 Attorneys for Plaintiffs 20 BY: PAUL J. HANLY, JR. 21 21 WILMER CUTLER PICKERING HALE AND DORR, LLP 22 Attorneys for Plaintiff Anne Lewin 22 BY: JOAN A. LUKEY 23 23 NOLAN LAW GROUP 24 Attorneys for Plaintiff Gladys Salvo 24 BY: FLOYD WISNER 25 SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 2 5BIHSEPC 1 APPEARANCES (CONT'D) 2 SPEISER KRAUSE NOLAN & GRANITO 2 Attorneys for Plaintiffs 3 BY: KENNETH P. NOLAN 3 4 CLIFFORD LAW 4 Property Claims Liaison 5 BY: TIM TOMASIK 6 MICHAEL J. GARCIA 6 United States Attorney for the 7 Southern District of New York 7 BY: BETH E. GOLDMAN 8 SARAH S. NORMAND 8 JEANNETTE VARGAS 9 Assistant United States Attorneys 9 10 CONDON & FORSYTH 10 Attorneys for Defendant American Airlines 11 BY: DESMOND T. BARRY 11 12 DEBEVOISE & PLIMPTON 12 Attorneys for Defendant American Airlines 13 BY: ROGER E. PODESTA 13 14 QUIRK & BAKALOR 14 Attorneys for Defendant United Airlines 15 BY: JEFFREY J. ELLIS 15 16 O'MELVENY & MYERS, LLP 16 Attorneys for Defendant Massport 17 BY: MARK WOOD 17 18 SATTERLEE STEPHENS BURKE & BURKE, LLP 18 Attorneys for Defendant Airtran 19 BY: ROBERT M. CALLAGY 20 21 22 23 24 25 SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 3 5BIHSEPC 1 APPEARANCES (CONT'D) 2 FLEMMING ZULACK WILLIAMSON ZAUDERER, LLP 2 Attorneys for Defendants World Trade Center 3 Properties, LLC and The Port Authority of 3 New York and New Jersey 4 BY: RICHARD A. WILLIAMSON 4 M. BRADFORD STEIN 5 5 CAMPBELL CAMPBELL EDWARDS & CONROY 6 Attorneys for Defendant U.S. Airways 6 BY: RICHARD CAMPBELL 7 7 SUSMAN GODFREY 8 Attorneys for Defendant Huntleigh 8 BY: H. LEE GODFREY 9 9 KATHLEEN M. COLLINS, 10 The Port Authority of New York & New Jersey 11 12 13 14 CONFERENCE 15 16 17 18 19 20 21 22 23 24 25 SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 4 5BIHSEPC 1 (In open court) 2 THE COURT: Good afternoon, everyone. 3 We will go down the agenda. There are five main 4 items. As always, anyone who has anything to raise should do 5 so. 6 For the aid of the reporter and for us, whoever speaks 7 should first identify themself and then say whatever he or she 8 wishes to say. 9 The first item is the status of settlements by 10 airline, airport and security defendants and motions for 11 credits to litigation caps pursuant to Section 408 of the Air 12 Transportation Safety and Systems Stabilization Act. 13 I have motions for two of ten settlements -- 14 Mr. Barry. 15 MR. BARRY: That is correct, your Honor. 16 THE COURT: -- as intended to set the precedent for 17 proceeding and for review. 18 I think there are some questions that need to be 19 resolved in terms of how we go forward, which I have listed. 20 What is my scope of review? How should we deal with 21 plaintiffs' request for confidentiality? And what is the right 22 of the ground defendants to view the settlement information? 23 I think those are the three categories of dispute that 24 have been tendered thus far. But the envenomed counsel know no 25 bounds so I am sure there will be more areas of dispute as we SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 5 5BIHSEPC 1 go along. 2 Let me give you a few observations. 3 In the ordinary situation where a judge is asked to 4 view the fairness of a settlement, it is in the context of laws 5 like general obligations law, establishing procedures for 6 discharge of settling defendants vis-a-vis other defendants, 7 with the question being asked, is a settlement fair; is the 8 credit of the settlement sufficient in relationship to the 9 potential liability of other defendants, especially in the 10 context of laws that cut off rights of contribution and 11 indemnification from non-settling defendants. 12 It seems to me I am being asked the flip question. Is 13 the settlement too much? Does it exhaust unreasonably that 14 amount of liability that limits the liability of particular 15 defendants. 16 To my mind, there is no precedent for this kind of 17 question. It presupposes that the defendants have been willing 18 to give too much money to a particular plaintiff. 19 Theoretically that's possible. It is not likely. 20 So the question is, what do I do in that relationship? 21 Have I seen the question correctly or is there some other 22 permutation that I should have in mind? 23 The second aspect of the question is how to deal with 24 the plaintiffs' request for confidentiality. 25 Defendants who are settling have this information. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 6 5BIHSEPC 1 They really don't care. The plaintiffs have requested this 2 information to help them in the integrity of dealing with their 3 particular clients so that concerns of distributed justice, 4 that is to say, how much money one gets in relationship to what 5 other people get, do not confound the issue of, how should I 6 put it, justice in the particular. That is to say, is a 7 particular amount fair and reasonable regardless of what other 8 people that arguably are similarly situated may obtain. 9 So far I think we have indulged the plaintiffs in 10 their request for confidentiality. The question at hand is, 11 can this survive these kinds of motions. And a corollary 12 question has come up. 13 To the extent that any of these settlements have what 14 might be described as most-favored-nation clauses, namely, that 15 no one will get more than me or I will get more, pretty much 16 the way a Yankees left fielder negotiates against other people 17 in the Yankee outfield, how do I deal with that issue and what 18 does it do to the rest of the settlements. 19 My preliminary observation is that is a clause that we 20 really cannot deal with, that it is not appropriate. I would 21 like that discussed. 22 The corollary question is, what is the right of a 23 non-settling party, not contributing a penny to the settlement, 24 to view what others are doing? 25 So those are the questions. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 7 5BIHSEPC 1 Let me call upon Mr. Moller first to give his views on 2 it. If you could take the podium, I think it would be better. 3 MR. MOLLER: Let me say at the outset that I don't 4 think any plaintiff can be paid too much. It is not a problem 5 that I can foresee. You are right, there is an element of that 6 in this issue. 7 I think that the confidentiality aspect of the case is 8 really not as big a problem as it might seem at first blush. 9 In aviation cases generally, defendants often, where there are 10 multiple plaintiffs, 100, 200, even more, frequently insist 11 upon confidentiality for a variety of reasons. Sometimes the 12 reasons are that they do not want their negotiations 13 compromised by the fact that they might be giving different 14 plaintiffs who might seem to be similarly situated somewhat 15 different amounts, and the plaintiffs want their numbers kept 16 confidential simply for the sake of their own privacy. So I 17 don't think confidentiality as such is a problem because 18 confidentiality agreements, if not orders, are routine. 19 If the property damage plaintiffs in the 408 context 20 have no objection to the confidentiality of individual numbers 21 but are kept informed of the aggregate amount of money being 22 spent out of the policies against which they may have a claim, 23 that would seem to satisfy the court's concern, so long as the 24 property damage people likewise say, we are not going to 25 challenge any individual settlement as excessive. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 8 5BIHSEPC 1 You have to ask the property damage liaison counsel 2 whether they are prepared to enter into that kind of an 3 agreement. The property damage liaison counsel representative 4 is here, and they will be back in court on the 29th, I believe, 5 of November. 6 THE COURT: I was looking for Mr. Clifford. 7 MR. TOMASIK: Mr. Clifford, your Honor, hasn't been 8 feeling well for the last two weeks. 9 Tim Tomasik, for the record. 10 THE COURT: I am sorry to hear that. 11 MR. MOLLER: To be candid, I have my feet firmly 12 planted in midair on the most-favored-nation issue, but it 13 seems to me that that is also a provision in a settlement 14 agreement, were it to exist, which if the property damage 15 people have no objection and the defendants are prepared under 16 the circumstances of the given case to increase their 17 settlement should those circumstances arise, I don't think that 18 that is a problem. 19 The right of a non-settling party to know what the 20 amounts are, that depends if the non-settling party is going to 21 be asked to contribute anything. As the cases now stand, 22 American and United, to the best of my knowledge, have said 23 that we are going to foot the whole bill in the settlements 24 that are now being negotiated. If the non-settling parties are 25 not asked to put up any money, they should be happy with that SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 9 5BIHSEPC 1 fact, and the confidentiality order that you would be asked to 2 sign would be neutral to them. 3 THE COURT: Suppose they were also potential 4 plaintiffs. 5 MR. MOLLER: You are talking about the world -- well, 6 if they know what the aggregate amount is. 7 THE COURT: They are in the same shoes, essentially, 8 as Mr. Tomasik's clients. 9 MR. MOLLER: If they do not agree, then in those cases 10 they might be entitled to know the aggregate amount of the 11 settlements, just like Mr. Tomasik. 12 THE COURT: Mr. Tomasik. 13 MR. TOMASIK: Yes, Judge. 14 THE COURT: You could stay in your place. 15 MR. TOMASIK: Judge, we recognize that the issue of 16 confidentiality is ultimately going to be left to your Honor. 17 We have been discussing confidentiality with Mr. Barry and we 18 are in the process of working out a potential stipulation that 19 we might be presenting on the 29th, but there are certain 20 issues that we need to be made aware of. For instance, what 21 policy is a certain settlement paid from. We think we do need 22 to know the individual amounts. We don't necessarily need to 23 know and understand who is receiving it and what lawyer is 24 involved. 25 One of the other issues that we are going to be SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 10 5BIHSEPC 1 talking to Mr. Barry about, and we have had very constructive 2 and positive conversations with Mr. Barry, is when we get the 3 information. Do we get it before the petition is presented or 4 after. 5 I agree with your Honor, I think it is unlikely that 6 anyone's going to be overpaid, and it is extremely unlikely 7 that any property damage plaintiff would have an objection. 8 But nonetheless, there is a possibility if the cap is becoming 9 diminished that we might want to know about that. 10 THE COURT: It seems to me, Mr. Tomasik, that a 11 judicial ruling on a settlement is a prerequisite of the 12 settlement and the credit that affects everybody else who is 13 potentially looking for the same source of recovery. So a 14 settlement can't be effected unless a court approves it. 15 MR. TOMASIK: Agreed. 16 THE COURT: I don't think Mr. Moller disagrees with 17 that. 18 MR. MOLLER: I agree with that. 19 THE COURT: That being so, I think we should have a 20 procedure which has a band of settlements quantified so that 21 you would have a running ability to understand how much has 22 been invaded and how much is left, along with the source of the 23 payment. There is no need to know specific settlements. 24 MR. MOLLER: What do you mean by a band of 25 settlements? SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 11 5BIHSEPC 1 THE COURT: I leave that for you to define. Perhaps 2 five. 3 MR. MOLLER: In terms of the number of cases settled? 4 THE COURT: Right. 5 MR. MOLLER: I have no problem with that. 6 THE COURT: Because everyone will know who has settled 7 out. That case is going to be dismissed. So you have to 8 develop a procedure by categories. You can perhaps disguise 9 how much a particular plaintiff is receiving, yet give other 10 plaintiffs an opportunity to know how much is being paid and 11 from what source and therefore how much is left. 12 MR. TOMASIK: Judge, I would like to say that I think 13 we substantially agree with those concepts and that is what 14 Mr. Barry and our group have been talking about. Perhaps on 15 the 29th we will be able to present an agreed stipulation that 16 might be acceptable to your Honor in the event that all 17 settlements remain confidential. 18 MR. BARRY: Your Honor, Des Barry. 19 What you just summarized is what I had offered 20 Mr. Tomasik and offered Mr. Williamson in respect of his 21 position. That is, some sort of a monthly bordereau of 22 settlements as they are agreed or as they are concluded with 23 the aggregate amount, the amount in dollars, the total amount 24 of settlements and an indication against which of the insurance 25 policies they would apply to. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 12 5BIHSEPC 1 It is not just American and United. There are 2 security companies involved in these as well. 3 THE COURT: The more insurers there are I think the 4 better Mr. Tomasik will like it. Because arguably that means 5 each particular one is invaded less. 6 MR. BARRY: It depends on the amount of the policies. 7 At the moment we are only talking about a finite amount of the 8 insurers that are contributing to these settlements and 9 releasing all of the defendants. So there are no non-settling 10 defendants who need to come and seek your approval of these 11 because they are all being released. 12 THE COURT: Except if they are potential plaintiffs, 13 as Mr. Williamson claims. 14 MR. BARRY: I didn't quite understand his letter, your 15 Honor, which said that he was seeking this information as a 16 ground defendant liaison counsel, when I suspect that he is 17 really seeking this information as a property plaintiff in his 18 cross-claim. 19 THE COURT: Let's have Mr. Williamson explain himself. 20 MR. WILLIAMSON: Richard Williamson for the Port 21 Authority of New York and New Jersey and World Trade Center 22 Property defendants. 23 Good afternoon, your Honor. 24 I was just waiting my opportunity. 25 To the extent that the ground defendants and our SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 13 5BIHSEPC 1 clients specifically are being asked to consent to settlements 2 or agree that they are fair and reasonable, in the words of the 3 motion, they can't do that in a vacuum. They can't do that in 4 darkness. They need the information. 5 If they can see the same settlement information that 6 was provided and know the settlement amount, in confidence, 7 they can then, they tell us, within ten days turn around and 8 say they consent, if they appear to be in a range of 9 reasonableness. That is the hope. At the same time, it would 10 allow us to get the insurers the information that they say they 11 need. 12 Your Honor hit the nail on the head, of course, when 13 you said what if they are plaintiffs. Well, of course some of 14 the parties who are ground defendants are plaintiffs, 15 specifically the Port Authority and World Trade Center 16 Properties are plaintiffs. They are not part of Mr. Tomasik's 17 or Mr. Clifford's group. They are not part of that committee. 18 THE COURT: To the extent you are plaintiffs they may 19 not be part of the committee, but they are similarly situated. 20 MR. WILLIAMSON: Similarly situated, yes, with the 21 same or different insurers or overlapping insurers, but they 22 have an obligation to be accountable to their property insurers 23 with respect to their rights. 24 THE COURT: Mr. Moller, do the plaintiffs agree to 25 provide the specific information that Mr. Williamson seems to SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 14 5BIHSEPC 1 seek? 2 MR. MOLLER: No. 3 THE COURT: I rule, Mr. Williamson, that your needs 4 are properly and fairly addressed by the bordereau of 5 information that Mr. Barry proposes, which is perhaps a better 6 word of describing what I meant by bands of settlement 7 disclosures. 8 This procedure will have to be defined in the November 9 29th submission so I can rule upon it and so that 10 Mr. Williamson can have a proper opportunity to object. But 11 tentatively, I believe that there is no need to know specific 12 settlement amounts, that Mr. Williamson's needs are fairly 13 served by having groupings of disclosures, and he will have 14 then an opportunity to object to settlements. 15 If his objection requires more particular information, 16 we can address it, but what he needs to know is that there will 17 be sources of money left over to the extent that he has a claim 18 to apply to those, and I think that interest can be served in 19 the procedures that we are discussing. 20 If the plaintiffs feel that they need privacy in order 21 effectively to negotiate settlements, that is something that I 22 cannot and will not intrude on, except to the extent that it is 23 necessary to intrude on it to serve other needs. For example, 24 approve settlements as not unreasonably invading litigation 25 caps. I believe it can be done without being intrusive of SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 15 5BIHSEPC 1 privacy interests and other interests that may deter people 2 from settling. 3 That is my tentative ruling. 4 We will define what we mean by bordereau as we go 5 along, but I think some reasonable grouping. 6 There are two other interests that I want to serve in 7 this, and that is as follows -- thank you, Mr. Williamson -- 8 one, is that nothing is effective until I as a court approve 9 it, which we will require these motions to be made as you have 10 a group of settlements ready to make that motion; and secondly, 11 and this goes to the most-favored-nation clauses, once the 12 settlements are approved, it seems to me that people ought to 13 be paid. 14 If there is a most-favored-nations clause, there 15 cannot be any security in payment or any security in approval 16 because we will never know what is left in the litigation cap. 17 There also will be a deterrent to later settlements, because 18 later settlements may impinge upon earlier settlements. 19 In my opinion, I think it would be difficult for me to 20 approve a settlement that has a most-favored-nations clause in 21 it. 22 Those are, again, tentative rulings. I express them 23 so that I can excite any opposition. 24 MR. MOLLER: May I respectfully request that if there 25 is a settlement agreement reached with a most-favored-nation SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 16 5BIHSEPC 1 clause in it that the attorneys that have negotiated that kind 2 of an agreement have an opportunity to submit a position which 3 might change the court's mind. 4 THE COURT: Yes, of course. But if there is comment 5 or opposition, now I would like to hear it. 6 MR. WISNER: My name is Floyd Wisner. I represent 7 Gladys Salvo, who was one of the first settlements, one of the 8 two before your Honor. 9 I am concerned. I heard your Honor say you wanted to 10 invite opposition. I would like to hear that opposition now 11 because I am concerned that your Honor will enter an order and 12 then we will get an appeal and then an appeal will take a year 13 and a half and meanwhile my clients don't have the money that 14 they negotiated and agreed upon. 15 THE COURT: An appeal in what direction? 16 MR. WISNER: An appeal up to the Second Circuit. 17 THE COURT: I mean for what purpose and against what? 18 MR. WISNER: Challenging your Honor's determination 19 about the bordereau as opposed to letting Mr. Williamson do 20 what he wants to do, about getting everything, all the 21 information. 22 THE COURT: There is a certain amount of discretion I 23 have in terms of limiting and expediting appeals. I am not 24 going to forego appellate rights. If people have to be paid, 25 that means I have to sever the action and make it final so SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 17 5BIHSEPC 1 there can be an immediate execution. That means the appellate 2 rights are immediately created. It seems to me an appropriate 3 motion can be made to expedite that appeal, which I will sign 4 and I think the Court of Appeals is likely to go along. 5 MR. WISNER: I would like to hear any opposition, 6 right now. I would like to hear somebody say whether or not 7 they are going to appeal your Honor's proposed tentative 8 ruling, or not. 9 THE COURT: I take it that Mr. Williamson is likely to 10 do that. 11 MR. WISNER: If he is, then we probably don't have a 12 deal. 13 THE COURT: You should think about that. 14 MR. WISNER: Thank you, your Honor. 15 THE COURT: Yes, Mr. Barry. 16 MR. BARRY: Your Honor, just let me say -- 17 THE COURT: Mr. Wisner, we cannot cut off anybody's 18 rights. 19 MR. WISNER: I understand that, your Honor, but I have 20 been involved in other cases where the court has said, anybody 21 planning to appeal, and they stand up and say no, your Honor, 22 we do not. 23 THE COURT: Mr. Williamson has to discuss that. He is 24 not here on his own. He has clients, and the clients don't 25 always have an ability to foresee everything that will come up SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 18 5BIHSEPC 1 here. 2 Now, I am not going to put Mr. Williamson on the spot 3 because I think his answer is going to be I don't know. Right, 4 Mr. Williamson? 5 MR. WILLIAMSON: You are clairvoyant once again, your 6 Honor. I really and truly was hoping to avoid -- 7 THE COURT: Mr. Wisner, you are going to have to make 8 your mind up whether you want to go ahead or not, but I will 9 tell you this, that this project requires us to move forward. 10 I am not going to become involved, if I can help it, in a long, 11 drawn-out procedure. Because once there is delay in one case, 12 that will affect every case. 13 MR. WISNER: Right. 14 THE COURT: I will do what I can to require 15 expedition, and I think you know from everything I have been 16 doing in these cases that the absence of expedition has been a 17 great frustration to me. So you will have to decide what to do 18 accordingly, but we are not able, and I should not want, to cut 19 off anybody's rights. All I can do is require them to be 20 exercised with due speed. 21 MR. WISNER: I understand, your Honor. The only 22 reason I raised it, your Honor, is my client settled this case 23 two months ago and I am trying to be an advocate for them to 24 get them their money. 25 THE COURT: I understand. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 19 5BIHSEPC 1 MR. WISNER: Thank you, your Honor. 2 MR. BARRY: Your Honor, just to somewhat relieve 3 Mr. Wisner of some concerns, as I look at the motions before 4 you, the essence of it is that you issue a ruling that these 5 two settlements and, by implication, subsequent settlements 6 count against the applicable cap in Section 408. 7 THE COURT: Yes. 8 MR. BARRY: Mr. Williamson's position is -- 9 THE COURT: Mr. Barry, you have two names and it is 10 going to be very difficult to state amounts for two names 11 because it is too easy to attribute them. 12 MR. BARRY: I agree. 13 THE COURT: So you are going to have to join five 14 others, perhaps, and obtain approval, say, for seven or ten or 15 something of that nature, and then that will effectively create 16 the privacy that the plaintiffs want. 17 MR. BARRY: But I don't think, for Floyd's concern, 18 that your decision, whether it be a group of five or seven or 19 whatever settlements, to the effect that any amounts paid count 20 against the cap, should in any way, unless someone wants to 21 appeal that on some grounds, I don't think that necessarily 22 involves what Mr. Williamson's concern is. 23 THE COURT: If Mr. Williamson is concerned that the 24 settlement is too high and unfairly invades what may be left 25 for him, he has to have basis in fact to be able to say that, SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 20 5BIHSEPC 1 and I have to have basis in fact to overrule what he might want 2 to say, which means that we need that information, and that 3 means you will have to have an adequate number of plaintiffs in 4 the pool so you can effectively mask that information. 5 MS. LUKEY: I am Joan Lukey. 6 THE COURT: Come on up, Ms. Lukey. 7 MS. LUKEY: I represent the Lewin Estate, which is one 8 of the two that has been presented to you. On behalf of 9 Mrs. Lewin, I would indicate that she is comfortable with the 10 court ruling with Mr. Barry turning over, if that is the state 11 of affairs, two unseparated amounts. 12 The concern for confidentiality, of course, is that 13 she didn't want in the public domain the amount that she was 14 receiving. But it was also in respect to the defendants. She 15 is, I think, less concerned than they on the issue of 16 confidentiality and has expressed to me that if the two cases 17 are joined together she has, and that amount reported, no issue 18 with that. 19 THE COURT: How does your client feel, Mr. Wisner? 20 MR. WISNER: Same way, Judge. 21 THE COURT: Then we would have a basis to move ahead, 22 Mr. Barry, and Mr. Williamson can get that information. 23 MR. MOLLER: There are also ten cases now, so there is 24 enough of a body of cases to mask a bigger number. 25 THE COURT: I understand, but they don't care. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 21 5BIHSEPC 1 MR. MOLLER: I am just pointing out -- 2 THE COURT: So the next band will be eight. 3 MR. MOLLER: That is fine. 4 MR. BARRY: Your Honor, I am very concerned about 5 this. Not about these two cases and you getting the 6 information or if Mr. Williamson is going to raise an issue of 7 collusiveness or excessiveness or whatever he is going to 8 raise. But what I am concerned about is that he is going to 9 have some sort of a veto power on every case that we negotiate 10 from this point forward, and we can't operate like that. 11 THE COURT: Why? 12 MR. BARRY: Because that is exactly what he wants. 13 THE COURT: He is not going to be able to do it 14 because your next step is to make a motion to approve the 15 settlements of the eight. I will know the number, you will 16 know the number. Mr. Williamson will know the aggregate amount 17 for the eight. 18 MR. BARRY: That is fine. I just don't want what we 19 are going to do here -- 20 THE COURT: I don't want to say eight is the magic 21 number. It seems to me that five is a good enough number, 22 small enough so that Mr. Williamson has some flexibility, yet 23 large enough to mask individual amounts. So move them in 24 fives. 25 MR. BARRY: That is fine. I am certain that SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 22 5BIHSEPC 1 Mr. Moller feels the same way, that he doesn't want someone 2 with the veto power over -- 3 THE COURT: How do you think I feel? 4 Yes, Mr. Williamson. 5 MR. WILLIAMSON: Thank you. So we are not chasing 6 ghosts here, in imagining ghosts being around every tree, let 7 me try to be clear. 8 To address Mr. Wisner's concern, and I appreciate what 9 they both said, we were trying to avoid the need to have such 10 appeals. That is what we were proposing. The fact that they 11 are willing to give us access to the information I think 12 greatly increases those chances. So if we can just have the 13 settlement amounts separated, see the settlement package -- 14 THE COURT: I think they have already agreed to that, 15 Mr. Williamson, and the next step is how to deal with the eight 16 that are coming, and I will leave that to work out between you 17 and Mr. Barry. But if you have groups like four or five, that 18 seems to me to satisfy your needs. 19 MR. WILLIAMSON: I was coming just to that point. I 20 understood your Honor did not want to give us the same kind of 21 break out for the future cases. I understand that. But to 22 still enhance the process, if we could get the settlement 23 packages knowing that we don't know the allocations but we know 24 the aggregate amount, we are experienced at this, we could take 25 it much further along. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 23 5BIHSEPC 1 THE COURT: Do you agree with that, Mr. Barry? 2 MR. BARRY: No, your Honor, I don't agree with that. 3 He is entitled to the damage information in cases 4 where he is a named defendant, and certainly he is not going to 5 get it in cases which involve United 93 or American 77 where he 6 is not a property plaintiff. 7 THE COURT: No, I think since there is a limited pool 8 of recovery and since he is a plaintiff actual or plaintiff 9 potential with respect to that, I think he has standing the 10 same way that Mr. Tomasik's clients have standing. 11 MR. PODESTA: Your Honor, Roger Podesta for American 12 Airlines. 13 The limited rule of recovery of course operates on a 14 flight-by-flight basis. So Mr. Williamson would have no 15 standing to raise concerns concerning flights 93 or 77 as a 16 passenger plaintiff. 17 THE COURT: That is correct, Mr. Williamson. Just the 18 two flights that collided with your building. 19 MR. BAUMEISTER: Mitch Baumeister, your Honor. 20 Just to underscore that point, and I won't repeat it, 21 I wanted to make sure, 93, we are not going to have these 22 appellate issues, but -- 23 THE COURT: Mr. Baumeister's point has just been made. 24 Mr. Williamson understands it. He has consulted and I think he 25 agrees. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 24 5BIHSEPC 1 MR. BAUMEISTER: Additionally, your Honor, maybe I 2 misunderstand, but we, as always in many aviation cases, will 3 be submitting in our settled cases individual compromise orders 4 for the specific case to you for your approval. 5 THE COURT: Yes, but there are perhaps two approvals. 6 MR. BAUMEISTER: Correct. 7 THE COURT: If there is some kind of a fiduciary 8 relationship, I have to approve in that context. But there is 9 also an approval in relationship to Section 408 of the Act, and 10 I have been talking about that. That is to say, that is 11 another approval that is needed. 12 In that approval for the fiduciary context, I only 13 need the plaintiff and the plaintiffs' representatives. I 14 don't need any defendants. That will be a private proceeding. 15 And if you want it closed, I am happy to close it. 16 MR. BAUMEISTER: Thank you, your Honor. That is what 17 we intend to do. Thank you. 18 THE COURT: It is a hard thing to steer because there 19 are legitimate interests for privacy and there is a legitimate 20 interest for the public to know what is going on. I am trying 21 to steer a course between those two. 22 I look upon Mr. Tomasik and Mr. Barry and Mr. Moller 23 and others to work out a reasonable protocol for proceeding so 24 that I can serve both sides' interests. 25 Are we all clear on where we are going on this? SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 25 5BIHSEPC 1 MR. BARRY: We should have that hopefully for you in 2 the form of a stipulation on the Monday after Thanksgiving. 3 THE COURT: Good. 4 MR. MOLLER: Ms. Lukey, was there anything else you 5 wanted to raise with respect to your settlement? 6 MS. LUKEY: Your Honor, may I have one moment to 7 consult with Mr. Barry on a point relating to confidentiality? 8 THE COURT: Yes. 9 MR. MOLLER: I thought that was necessary. 10 MS. LUKEY: Thank you, your Honor. At this point I am 11 not in a position to address any further issues and would like 12 to do so with Mr. Barry and perhaps get back to the court. 13 THE COURT: I think we have accomplished everything 14 that is relevant to point one in the agenda. 15 MS. LUKEY: Thank you. 16 THE COURT: Is there anything anybody else wants to 17 say on that? 18 MR. MOLLER: I would just like to say one thing. I 19 have been requested by some of the plaintiffs to urge the 20 defendants in their individual settlement dialogues to be more 21 helpful in explaining their analysis of the values of the 22 cases. 23 When we met with the court last time and had a private 24 conversation in chambers, you recognized and suggested that the 25 dialogue be a little more open to make it easier to understand SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 26 5BIHSEPC 1 relative positions. I would just like the defendants to be 2 mindful that that is an important ingredient to advancing the 3 settlement process. 4 MR. BARRY: No comment, your Honor. 5 THE COURT: What can I say, Mr. Moller. There is 6 nothing I can offer in this regard. 7 MR. MOLLER: That is it. 8 THE COURT: We are now up to item II, the status of 9 discovery. 10 Ms. Normand, who is going to speak? 11 MS. NORMAND: Sarah Normand, your Honor. Thank you. 12 Your Honor, when we were before the court last in 13 September, the principal issue -- 14 THE COURT: I think people are having a hard time 15 hearing. 16 MS. NORMAND: When we were before the court -- 17 THE COURT: If you put your back to the jury bar, 18 don't face me directly, but face that part of the room, people 19 might hear you better. 20 MS. NORMAND: Perhaps I could use the podium. 21 THE COURT: Sure. 22 MS. NORMAND: When we were last before the court in 23 September -- 24 THE COURT: That is not working too well. 25 MS. NORMAND: When we were last before the court in SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 27 5BIHSEPC 1 September, the principal issue being discussed was how 2 discovery would proceed on SSI and, in particular, how 3 depositions might proceed. That presents difficult issues, and 4 those issues were to be addressed in protocols, specific 5 protocols to be submitted by the parties for consideration by 6 TSA, discussions between TSA and the parties. And ultimately 7 we hoped submission of a protocol to your Honor. 8 As it turns out, the parties have taken a different 9 approach. Rather than submitting proposed protocols to TSA for 10 depositions and the like, it appears that the plaintiffs would 11 rather proceed immediately with final orders issued by TSA for 12 review by the Second Circuit. 13 THE COURT: They are unhappy. 14 MS. NORMAND: That is right, your Honor. 15 We are told by the plaintiffs that they are intent on 16 challenging not just TSA's individual SSI determinations, but 17 also TSA's overall policy of nondisclosure of SSI in 18 litigation. 19 That, we think, really raises two issues. 20 First, how should the process work in terms of 21 issuance of final orders to go up to the Second Circuit. 22 As to that question, TSA proposes that we meet and 23 confer with the parties in the near term to discuss the 24 logistical and procedural issues involved in issuing final 25 orders. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 28 5BIHSEPC 1 These would include the possibility of further 2 submissions to TSA before final orders are issued. We have 3 heard informally from some of the parties that they may wish to 4 do that, and TSA is amenable to that. 5 Another issue is the content of final orders. 6 Obviously TSA retains discretion to determine what its 7 final orders will look like, but the parties have, and in 8 particular the plaintiffs have made a request that the orders 9 contain certain information, including an explanation of each 10 of the redactions that TSA made in the 20,000 plus pages of 11 documents in the second wave. 12 Other issues to be discussed, whether the final orders 13 would proceed with a phased approach. In other words, they 14 wouldn't all be issued at once but in phases as TSA completes 15 them. And also potentially a protocol for review by the Second 16 Circuit of successive final orders. 17 At one point during our last discussion in 18 September -- 19 THE COURT: Judge Walker is going to be so happy to 20 hear this. 21 MS. NORMAND: At one point in September it was 22 suggested that -- 23 THE COURT: You will rival the immigration docket. 24 MS. NORMAND: Oh, dear. 25 At one point in September it was suggested that maybe SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 29 5BIHSEPC 1 a special master might be in order. These are all issues that 2 need to be explored, and TSA is prepared to do that in the 3 short term so that we can immediately start issuing the final 4 orders. 5 THE COURT: What disappoints me is that the short term 6 constantly becomes postponed. So it has become a very long 7 term. 8 MS. NORMAND: I understand that. 9 THE COURT: These are ideas that we have been 10 discussing now for more than a year. 11 MS. NORMAND: I agree, your Honor. We had hoped that 12 some of these issues would be addressed in the protocols that 13 we expected in early October. Some of the issues were 14 addressed in the letters. Many remain. But we are prepared to 15 work with the parties quickly to develop a protocol or a 16 procedure that works and that can direct us going forward. 17 The second issue that remains is what should happen 18 with discovery involving SSI going forward as the plaintiffs 19 and perhaps the defendants as well challenge TSA's final 20 orders. 21 As to that, TSA believes that it should not be 22 required to do further review of documents or deposition 23 transcripts while the Second Circuit is reviewing petitions for 24 review. 25 THE COURT: In other words, a petition for review SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 30 5BIHSEPC 1 should be an automatic stay. 2 MS. NORMAND: Not of all discovery, your Honor, only 3 review by TSA. 4 I would just like to review sort of what TSA has 5 accomplished in the past many months. It was really an 6 extraordinary undertaking for TSA to complete the second wave 7 of discovery. It involved 20,000 plus pages of documents. TSA 8 committed over 4,000 manhours to the project, including pulling 9 people off of other projects in order to complete what was 10 effectively a detailed line-by-line review of the documents 11 that were submitted. Each document was reviewed three, perhaps 12 more times. Sometimes there were additional reviews by subject 13 matter experts. 14 In addition, after documents were authorized for 15 release, some defendants' counsel went back to TSA with 16 questions. A secondary review was completed as to certain 17 documents. 18 In summary, TSA had to marshal all of its resources to 19 complete this project. 20 Having completed the project or nearly completed it -- 21 there are a few videotapes I understand that remain -- we are 22 advised now that the plaintiffs wish to challenge TSA's overall 23 policy of nondisclosure. That is their right, but it just 24 doesn't make sense as a practical matter to have TSA continue 25 to review documents if in fact the Second Circuit is going to SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 31 5BIHSEPC 1 review the issue and rule on it. 2 What we would propose is effectively for TSA to 3 proceed immediately following a meet and confer with the 4 parties with the issuance of final orders and then for TSA's 5 review as to SSI to effectively be stayed pending the Second 6 Circuit's determination. 7 THE COURT: Won't you have completed your job then by 8 the time of the meet and confer? 9 MS. NORMAND: I'm sorry? 10 THE COURT: The conference with the plaintiffs and the 11 defendants to meet and confer over particular objections and 12 redactions I suppose comes at the end of your review process. 13 If that is right, there is nothing more to review. You are 14 finished. 15 MS. NORMAND: TSA has completed its review of the 16 documents. I don't envision -- 17 THE COURT: So you are finished. People may quarrel 18 about your decisions, but it is finished. So the meet and 19 confer is for the purpose of having the parties try to 20 negotiate you out of your positions to some degree. 21 MS. NORMAND: Your Honor, I actually don't expect that 22 is what the parties will want to do, although TSA would listen 23 if they wanted to have further discussions about the actual 24 redactions. 25 THE COURT: What do you anticipate is the purpose of SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 32 5BIHSEPC 1 the meet and confer? 2 MS. NORMAND: To talk about the issues that I had 3 raised a moment ago, including how would the final orders 4 proceed, would there be a phased approach. 5 THE COURT: I would think the plaintiffs would urge 6 that so-and-so be done. Application denied. Maybe there is a 7 reason, maybe not. You will decide that in terms of your own 8 position on the appeal. Your position is enhanced if you give 9 a reason, arguably. Your position is diminished if you look to 10 be arbitrary by not giving a reason. So it is your decision. 11 MS. NORMAND: Your Honor, we think there is some value 12 to meeting briefly with the parties to discuss some of the 13 issues that have arisen. For example -- 14 THE COURT: Let's say you do. You meet and you 15 confer. At the end of the day you have your positions. 16 MS. NORMAND: That is correct. 17 THE COURT: What is left for you to do? 18 MS. NORMAND: Proceed to issue the final orders, which 19 is going to be quite a time-consuming process if in fact TSA 20 follows the request of the plaintiffs, for example, and gives a 21 specific response as to each of the redactions. I certainly am 22 not committing to following that approach -- 23 THE COURT: It is up to you, isn't it? 24 MS. NORMAND: -- but that is one of the issues that 25 might be discussed. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 33 5BIHSEPC 1 THE COURT: It is up to you. You do whatever you 2 want. 3 It seems to me that you have reasons already. Either 4 you express them or you don't express them. 5 I don't really understand. September 11, 2001 6 occurred more than four years ago. While we are playing, 7 people are still absorbed with the tragedy that occurred in 8 their lives. What right do we have to indulge ourselves in the 9 normal bureaucracy of discovery proceedings while people are 10 waiting for a final decision. Do they have a right or do they 11 not have a right to what they feel is their damage. That is 12 the burning issue. That is the issue all of us are engaged in 13 advancing. 14 What I hear from you, Ms. Normand, with utmost 15 respect, is another two years of delay. It is not tolerable. 16 MS. NORMAND: With all due respect, your Honor, TSA 17 certainly is not proposing another two years of delay. What 18 TSA is proposing -- 19 THE COURT: You didn't propose any delay when all of 20 this began almost at the outset of these meetings. We have 21 discussed this at almost every conference without any 22 perception of advance. I think it is cruel and inhuman to the 23 people involved. There are people involved. This is not a 24 lawyers' and judge's game. 25 I don't know if they have a right to recover or not. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 34 5BIHSEPC 1 I ducked the issue of duty at the beginning. At least that is 2 the expression of Professor Seaboch. He said I should have 3 decided it. I thought the issue was too complicated, and I 4 wrote an opinion on it. But the issue is up for grabs. The 5 issue of proximate cause is up for grabs. The issue of 6 reasonableness is up for grabs. 7 What is happening now is there is an impediment in the 8 movement caused by TSA. It is not tolerable that this 9 situation is dillydallied with by all kinds of effort. Not 10 laziness, but extraordinary effort going nowhere. It is like 11 we are trying to spin our wheels to get out of a desperate, 12 muddy, frozen situation. The harder we spin, the more we work, 13 the less progress we make. It is not tolerable. 14 MS. NORMAND: Your Honor, respectfully, the parties 15 here could have asked for final orders to issue some time ago, 16 years ago. They did not do that, and they are asking to do it 17 now. 18 THE COURT: Excuse me. Your clients run the agency. 19 You can issue a final order any time you want. Your standards 20 change along the way. You get progressively stricter. Maybe 21 you should. I am not saying you should or you shouldn't. 22 Let's be done with it. Either give it or don't give it. 23 MS. NORMAND: As I said, your Honor -- 24 THE COURT: What do the plaintiffs say? 25 MR. MOLLER: Your Honor, you have crystallized the SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 35 5BIHSEPC 1 problem, and it is reflected, to be frank, in the letter that 2 we received yesterday from Ms. Goldman, Ms. Normand, and 3 Ms. Vargas. 4 The second page of the letter, they write: TSA will 5 continue to adhere to its policy of nondisclosure of SSI and 6 will not make exceptions in this particular litigation. 7 That tells us -- 8 THE COURT: This is the letter of November 17? 9 MR. MOLLER: Yes. 10 That tells us, with all due respect to Ms. Normand and 11 Ms. Goldman, that we are not going to get very much more out of 12 TSA whether we negotiate a protocol or don't negotiate a 13 protocol, and that we need final orders in order to be able to 14 have the appellate court decide what the victims of this case 15 are entitled to and, frankly, what the property damage 16 plaintiffs are entitled to to be able to prove their cause and 17 what the defendants are entitled to to defend their position. 18 THE COURT: What is your remedy if you don't get a 19 final order? 20 MR. MOLLER: We can't do anything because you can only 21 go upstairs -- 22 THE COURT: What remedy do you have? Do I have any 23 power? 24 MR. MOLLER: You may have the power to mandamus TSA to 25 issue an order. But frankly, I think that our request to TSA SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 36 5BIHSEPC 1 is that they issue orders, in whatever form they think is 2 responsive to the request that is contained in our letter to 3 them of a few weeks ago. 4 THE COURT: What does Mr. Barry say? 5 MR. BARRY: Your Honor, we are going through 6 unchartered waters here just like we did in the first part. It 7 is a very difficult issue. 8 Mr. Ellis was the primary -- 9 THE COURT: At least on the first one I can make a 10 mistake. Here I can't even make a mistake. 11 MR. BARRY: Mr. Ellis was the primary author of the 12 letter position paper that we put in. I think he and 13 Mr. Podesta have some suggestions that could help the parties 14 and the court through this. 15 THE COURT: Mr. Ellis. 16 MR. ELLIS: Thank you, your Honor. Jeffrey Ellis on 17 behalf of United. 18 Your Honor, quite frankly, our position in the letter 19 is our position, which is, you have offered to get involved. 20 What we are talking about here affects both parties' needs, 21 affects the impact of how this litigation goes forward, how an 22 appeal is framed. 23 I have no objection to meeting with anyone, trying to 24 work something out amongst ourselves. But I suspect, your 25 Honor, as you have suspected for I think quite some time now, SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 37 5BIHSEPC 1 that if you get involved with this, you might prod the people 2 along so that we can identify -- the ultimate question is, what 3 do we each need to prosecute an appeal. 4 THE COURT: Except the difference, Mr. Ellis, is that 5 I think that TSA has a stronger attitude about things now than 6 was true in the past. I think the experience of the last 7 several years has made people extremely nervous about issues of 8 security. I am not making a judgment now whether they should 9 or shouldn't. It is their job. I am frankly skeptical about 10 any benefit I can bring to the table. 11 MR. ELLIS: Here is the one thing, though, your Honor, 12 and I think that everyone around in this courtroom, all of the 13 parties for sure, understand the risks that are involved with 14 potential breaches of security. So we assume the good faith on 15 the part of the TSA. We are also quite cognizant of the fact 16 that they have done a yeoman's job of trying to review 17 potentially thousands of documents and potentially hundreds of 18 thousands of documents that are off in the wings somewhere. 19 It seems to me that if we can address a protocol for 20 going forward in an expedited way that starts to figure out 21 what each party really needs, and the only way we are going to 22 do that -- we are not going to agree to that amongst ourselves. 23 I think, however, with your Honor's assistance we might be able 24 to have some frank discussions that would enable us to better 25 identify, narrow the issues that we are talking about that the SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 38 5BIHSEPC 1 TSA would have to review, and if an appeal is going to be 2 necessary, to allow that appeal to address all of the issues as 3 opposed to one narrow issue, because then we will just be going 4 back up to the Second Circuit three years from now. 5 Your Honor, my only suggestion would be to follow up 6 in whatever time period your Honor thought was appropriate to 7 try and have these frank discussions and see if we can narrow 8 something. Because if not, I envision a situation where we 9 will be doing piecemeal appeals and be here two years from now 10 and not advancing the ball very much further than we are today. 11 THE COURT: Mr. Moller. 12 MR. MOLLER: You can have frank discussions after we 13 have final orders. I want to just -- 14 THE COURT: There won't be any frank discussions after 15 final orders. If there is value in frank discussions, it is 16 before. 17 MR. MOLLER: The review statute says that SSI 18 decisions -- it doesn't use the word SSI in the paragraph, but 19 in order to be sustained by an appellate court findings of fact 20 by the secretary, undersecretary or administrator, if supported 21 by substantial evidence, are conclusive. 22 That is an important position in the statute. 23 THE COURT: It is the model of the administrative 24 procedure. 25 MR. MOLLER: That is correct. We don't even know what SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 39 5BIHSEPC 1 the true substance is of what is being withheld. 2 Our problems are, frankly, compounded by information 3 which is reflected in the GAO report to Congress in June of 4 2005 about TSA and SSI orders in which it says: What GAO 5 found, TSA does not have guidance and procedures beyond its SSI 6 regulations providing criteria for determining what constitutes 7 SSI or who can make the designation. 8 Next paragraph: TSA also lacks adequate internal 9 controls to provide reasonable assurance that its SSI 10 designation process is being consistently applied across TSA. 11 Next paragraph: TSA has not developed policies and 12 procedures for providing specialized training, etc. 13 We need the final orders in order to be able to have a 14 point from which we can begin to jump-start this litigation. 15 THE COURT: And you will succeed in getting the remand 16 to do all those things that you are criticizing. 17 Ms. Normand. 18 MS. NORMAND: Thank you, your Honor. I would like to 19 clarify this. 20 TSA has no objection to proceeding with issuing final 21 orders as to the first and second waves of discovery 22 immediately. That is TSA's position and it is prepared to do 23 that. 24 We thought there was some value in meeting with the 25 parties to talk about how that process might work and doing SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 40 5BIHSEPC 1 that quickly. If the parties don't have an interest in meeting 2 with TSA on that subject, TSA will proceed to issue the final 3 orders. 4 As to a stay of further discovery, all TSA is asking 5 for is that after it issues these orders, let's wait and see 6 what the Court of Appeals says. If TSA's position is 7 sustained, which we believe it will be, then TSA will proceed 8 to review the thousands or tens of thousands or more documents 9 that are in the third wave, if that is ultimately necessary. 10 THE COURT: So it comes down to this, that you propose 11 to issue a final order for waves one and two and not to begin 12 work on wave three until you know where you are going. 13 MS. NORMAND: That is precisely, right, your Honor. 14 THE COURT: Mr. Podesta. 15 MR. PODESTA: Your Honor, I wanted to note that the 16 defendants are indeed interested in participating with 17 discussions with the TSA on how the record would be developed 18 through the final order and also making sure that we have an 19 opportunity to identify those TSA determinations that we wish 20 to challenge with respect to first and second wave discovery. 21 THE COURT: That is normally what happens in an 22 administrative appeal, an appeal from an administrative order. 23 MR. PODESTA: Yes. Basically the TSA has indicated 24 that the security directives, the COG, the information circular 25 and large sections of the ACSSP are sensitive security SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 41 5BIHSEPC 1 information, and our view is that those are the very documents 2 that set forth the standard of care that governed our conduct. 3 We are concerned that even the SSI substitutes with 4 respect to the ACSSP, that the TSA has worked so valiantly to 5 produce, omit nuances and details that are essential to the 6 fair presentation of our defense. 7 We are concerned that on the determinations that have 8 been made thus far we cannot present before the court what we 9 believe to be the legal standards that govern our conduct. So 10 we will be taking up issues with the TSA when this final orders 11 are issued. 12 MR. ELLIS: Your Honor, may I add one thing? 13 THE COURT: Yes, Mr. Ellis. 14 MR. ELLIS: That is, your Honor, simply that if we are 15 limiting an appeal to only what is in the first and second 16 wave, we are omitting from Second Circuit review depositions, 17 challenges to discovery demands, where part of the challenge 18 would involve disclosing of SSI further documents. 19 It just seems to me, your Honor, that if we are going 20 to develop the final order, and I don't know how long it takes, 21 but I will take Ms. Normand on her word that it is going to 22 take a little bit of time, does it really hurt to meet in 23 between and see if we can address all of the issues so if the 24 Second Circuit is going to get a review, let them review 25 something so that we can continue the litigation expeditiously SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 42 5BIHSEPC 1 once it is done, as opposed to having to go back up to review 2 another SSI protocol that they don't have before it in the 3 first five. 4 THE COURT: Let me make a few observations here. 5 Federal Rules of Appellate Procedure, Title 4, 6 starting with Rule 15, discuss review of final orders of 7 agencies is provisions for a petition for review or joint 8 petitions or cross-petitions which enable the party, the 9 parties involved and any intervening parties, to define the 10 issues that they wish the Court of Appeals to review. 11 Rule 16 provides for a composition of the record. It 12 seems to me that you have all made applications. You have all 13 made requests. You have all obtained rulings. You know about 14 which you are agreed. There is nothing that prevents you from 15 raising these issues to the Court of Appeals. 16 The frustration that I anticipate is that, A, since 17 this is new, it won't be quick. Second, because it is 18 amorphous, it will be frustrating. Third, since there are lots 19 of things to be aggrieved about, the opportunity for a remand 20 is high. Therefore, further proceedings. Therefore, further 21 delay. 22 Next, because in situations like this the instructions 23 by an appellate court are never clear enough and the dynamic of 24 continuing questions overshadow what's been up, in fact, it is 25 going to be a continuous situation of going up and down, SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 43 5BIHSEPC 1 seeking motions for clarification and being frustrated about 2 it. However, we have got to begin. 3 I have looked at the letter that Mr. Joseph and 4 Mr. Moller have presented to Ms. Normand and Ms. Goldman. They 5 propose that a small group of attorneys be cleared to view 6 potential SSI materials. 7 We were thinking about this at the outset. Indeed, 8 many, if not most of you have been cleared. It is my 9 experience in matters of security that a view is taken that 10 there is a need to know as well as a classification issue, and 11 the frequently expressed view of the agency is that sensitive 12 information must be compartmentalized and that even though 13 people have been classified, they won't get clearances. So it 14 is not likely that Ms. Normand and Ms. Goldman will be 15 empowered to work with a small group of attorneys. I may be 16 wrong. I suspect I am not. 17 Second, the proposal is that cleared persons will be 18 permitted to view potential SSI information and to conduct or 19 be present at depositions where potential SSI information will 20 be disclosed. I don't think it is going to happen. Then the 21 rest of it is up to procedure. 22 We can do it any way you want, and I don't know what 23 powers I have. I am tempted to say go do your depositions, let 24 Ms. Normand and Ms. Goldman object and prevent you from getting 25 information. You will take it up. I don't know who you go to SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 44 5BIHSEPC 1 in that situation, me or the Court of Appeals. It is possible 2 I may have jurisdiction on that issue. 3 If the agency makes a final determination, they have 4 to have a record. If they don't have a record, there may not 5 be substantial evidence. 6 I don't know where this is all going. I feel 7 frustrated, along with you, along with, I think, Ms. Goldman 8 and I think Ms. Normand. It is not easy for them either. 9 My view is that the agency should make its final 10 determination on what it has and you should go forward. There 11 will be no automatic stays. Whatever stays are granted will 12 have to be requested. We will see where we go. 13 I think further conversation is useless. I don't see 14 any real point for my becoming involved, although I will become 15 involved if you all wish me to, and I think we need to break 16 the logjam and go forward. 17 Ms. Normand, I cut you off. You wanted to speak. 18 MS. NORMAND: Very well, your Honor. TSA will proceed 19 with the issuance of final orders as your Honor has indicated. 20 THE COURT: Mr. Moller, OK? 21 MR. MOLLER: That is what we want. 22 THE COURT: Mr. Barry, Mr. Podesta, Mr. Ellis, OK? 23 MR. ELLIS: Your Honor, quite frankly, no, for 24 whatever it is worth. It just seems to me we are going forward 25 without an SSI protocol for further depositions. If I want to SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 45 5BIHSEPC 1 object to a discovery demand -- 2 THE COURT: Let's talk about other depositions. Maybe 3 we can come back to this issue. 4 Let's go to II, b on the agenda. 5 Some of us are sneaking looks at the clock. We will 6 have to break no later than 3:00. So have this in mind. 3:00 7 is OK? 8 MR. BARRY: Your Honor, I was going to help the court 9 for a second. 10 Your Honor, on II, c, the nonparty depositions. 11 THE COURT: Yes. 12 MR. BARRY: I got a call from Mr. Tomasik earlier 13 today to the effect that the plaintiffs who have noticed those 14 depositions have withdrawn them at this time without prejudice 15 to renew at some future time. So we can take that off the 16 agenda. 17 THE COURT: So II, c is off the list. 18 Let's talk about where you want to go on discovery. 19 One scenario, go ahead with discovery. The responses 20 will go as far as they can go. Where they can't go, someone 21 will object. I will rule, if I have the power to rule. 22 Why don't we do this? 23 MR. BARRY: Your Honor, I hesitate to say this, but it 24 is not quite that simple. 25 I know that Mr. Wood, representing the airport SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 46 5BIHSEPC 1 operators, and Mr. Campbell, who is representing all those, at 2 least as their leader, representing all those airlines who 3 didn't carry any passengers but are still being sued, I think 4 they have certain concerns about the motions they have made, 5 discovery related to that, and I think you should hear from 6 them first. 7 THE COURT: Mr. Wood. 8 MR. CAMPBELL: Maybe I should start, your Honor. My 9 name is Richard Campbell. I represent U.S. Airways. 10 I should begin by saying that the bankruptcy stay was 11 lifted by way of stipulation with respect to the wrongful 12 death, personal injury cases, but the plan injunction remains 13 in effect with regard to the property damage business loss 14 cases. So I stand before you only on the wrongful death, 15 personal injury cases. 16 THE COURT: Can we obtain a lifting of the stay for 17 all purposes? 18 MR. CAMPBELL: There has been discussion among the 19 various bankruptcy lawyers and counsel for the property damage 20 plaintiffs for a long time, and it has gone back and forth and 21 back and forth extensively. I personally am not involved in 22 that. 23 So far there has not been any final agreement as to 24 what the form of the stipulation should be to address the plan 25 injunction for those property damage cases. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 47 5BIHSEPC 1 THE COURT: What I would like to see is that the cases 2 involving discovery go forward but that the stay remain for 3 trial. 4 MR. CAMPBELL: Your Honor -- 5 THE COURT: I don't want to prejudice in any way the 6 right of the trustee and various of the bankruptcy committees 7 to deal with assets, but these cases have to move forward, and 8 I don't want to see impediments to the discovery process more 9 than are absolutely necessary. 10 MR. CAMPBELL: I only raise the issue of the plan 11 injunction as to the property damage cases so the record is 12 clear that I am standing before you on the wrongful death, 13 personal injury cases. I cannot stand before you on the 14 property damage cases. 15 THE COURT: Mr. Tomasik, see if you can get that stay 16 lifted. 17 MR. TOMASIK: Judge, we have been withholding a motion 18 to get the stay lifted. I think we are awaiting a proposed 19 agreement from them on that issue. And there are also some 20 insurance agreements that we need in order to address our 21 motion. So like the court, Judge, we would like to move this 22 issue as quickly as we can. 23 MR. CAMPBELL: Your Honor appointed me as a 24 representative of the non-carrier airlines to the aviation 25 subcommittee, so I really rise in that capacity. I don't SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 48 5BIHSEPC 1 represent the other non-carrier airlines, but I believe I have 2 been empowered by their counsel to speak now on their behalf. 3 The discussion we just had with respect to SSI is 4 really quite acute when you look at the non-carrier airlines. 5 Six of them have been subjected to discovery requests. One 6 might say, fairly, I think, that these are extraordinary 7 discovery requests. It is interesting that those discovery 8 requests are directed at those parties that have the most 9 tenuous of all connection to this case. 10 Six depositions have been set, noticed for January. 11 Three of those depositions would relate to non-carrier airlines 12 in bankruptcy and subject to a stay. The stay is in place. 13 Three of those depositions relate to other non-carrier airlines 14 not subject to the stay. 15 Even more problematic and more acute from our 16 perspective is the fact that requests for admissions were 17 served on or about November 3rd. So in about two weeks, a 18 little more than two weeks, the non-carrier airlines to whom 19 those request for admissions were directed are obligated to 20 respond in some fashion or deal with the self-effectuating 21 aspects of 36. 22 On behalf of my brothers, I sent these discovery 23 requests off to the TSA, with my view that all of them or 24 nearly all of them involve SSI, with a request to the TSA to 25 say, OK, what is it that you want us to do. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 49 5BIHSEPC 1 Then, of course, all of these discussions about how to 2 deal with SSI have been had. Not with the non-carrier 3 airlines, but with others. 4 Nonetheless, that due date is out there looming that 5 we have to deal with, and that is a significant problem for 6 those non-carrier airlines that confront it. 7 Your Honor might recall, too, that your Honor did not 8 permit any of the defendants, including the non-carrier 9 airlines, to serve contention interrogatories, and yet when you 10 look at these requests for admissions, these 91 requests for 11 admissions, one would have a difficult time seeing why it is 12 fair for the plaintiff to serve requests for admissions of that 13 type as contained in the 91 requests, but the defendants cannot 14 serve something as simple as a contention interrogatory. 15 THE COURT: Mr. Campbell, I think, technically 16 speaking, your path is not a problem. Because it seems to me 17 that if you have asked for instructions from SSI and the 18 instructions are not forthcoming and you feel you have a good 19 faith basis to object, you can object. And once you object, 20 you have responded to the request for admission. 21 MR. CAMPBELL: Understood, your Honor, and that inches 22 us forward. It doesn't address the problem your Honor was 23 dealing with earlier on. 24 THE COURT: No, it doesn't, but it satisfies your 25 problem. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 50 5BIHSEPC 1 MR. CAMPBELL: Indeed. I expect that some of the 2 non-carrier airlines will respond as your Honor indicates. 3 THE COURT: Of course I am not in the business of 4 giving advice anymore. 5 MR. CAMPBELL: But you are doing a good job of 6 suggesting. 7 The depositions, too, present a problem from the 8 perspective of any of the lawyers really in the courtroom that 9 represent any of the defendants. 10 THE COURT: They do, but they are not technically a 11 problem, they are substantively a problem. They are of great 12 frustration to me and probably everyone else, but they are not 13 technically a problem. 14 MR. CAMPBELL: I am not sure what you mean by not 15 technically a problem. 16 Let me pose this. 17 THE COURT: If you have a question put to you and you 18 feel that you cannot give an answer because you have not been 19 given an instruction from the SSI, what is your remedy? The 20 rules give you a remedy. 21 MR. CAMPBELL: Suspend the deposition. 22 THE COURT: And ask for a ruling. 23 MR. CAMPBELL: So the deposition will get three, four, 24 five questions into the deposition and we will suspend. 25 THE COURT: And you will ask me for a ruling. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 51 5BIHSEPC 1 MR. CAMPBELL: That is likely to occur. 2 THE COURT: And possibly I might have jurisdiction. 3 MR. CAMPBELL: That would be a good thing. 4 THE COURT: It depends how I answer. 5 MR. CAMPBELL: It would still be a good thing, your 6 Honor. 7 Let me just bring to your attention another side of 8 that problem, and that is the lawyers in the courtroom who 9 represent airlines or security companies who have some kind of 10 access to SSI. They have knowledge. They have knowledge of 11 SSI. They are in a deposition room. They wish to question a 12 witness about something that they know about. But if they do 13 so they may violate the statute or the regulations under the 14 statute, and if they don't they may violate Rule 1.3 of the 15 Code of Professional Conduct. It is a distinct problem. 16 THE COURT: Who devised that phrase "sufficient unto 17 the day is the evil thereof?" 18 I figure you will deal with your conscience one way or 19 another. I don't think that is a problem. 20 Mr. Campbell, I think you are doing pretty good. You 21 are doing fine. 22 MR. CAMPBELL: I take that to mean you have heard 23 enough from me. Thank you, your Honor. 24 THE COURT: Sir. 25 MR. WOOD: Your Honor, Mark Wood for the airports. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 52 5BIHSEPC 1 You did give us some advice, didn't send us any bill, 2 two and a half years ago when you denied our motion for a 3 dismissal as premature and said in orders that we produce the 4 airport security plan to Mr. Moller, and we sent that to the 5 TSA. 6 THE COURT: That is the last you have heard from me. 7 MR. WOOD: Not at all, your Honor. 8 We sent that to the TSA. First I had the same 9 suggestion we have talked about in here. They come over to 10 O'Melveny & Myers, the plaintiffs, come on in and read it 11 there. The TSA did not go for that suggestion. 12 So we sent it over to the TSA. They reviewed it. 13 They produced a substituted document for Mr. Moller, for the 14 plaintiffs, for Newark, for Dulles, and for Logan Airport. 15 I then, maybe a year or so ago, your Honor, suggested 16 that now that that was out of the way, now that they had taken 17 a look at that, perhaps it was time to renew our motion to 18 dismiss. Because, as your Honor said on the record, your Honor 19 did not want our clients to be involved, if they were entitled 20 to be dismissed from the case, in extensive discovery, in the 21 discovery that is going to take place here. 22 At that point Mr. Moller made the point that the 9/11 23 Commission report was not out and no one had the benefit at 24 that time of a report, which, as we all know, involved 25 interviews of 1,000 people, from the President of the United SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 53 5BIHSEPC 1 States to people locked up in Guantanamo Bay and the millions 2 of dollars that were spent on that report. 3 It wasn't out. Your Honor very tactfully and 4 graciously indicated to me that while I could bring a motion or 5 file anything I wanted, that it might be better if I held my 6 fire. 7 The Commission report is out. We have all read it, 8 studied it. It doesn't provide any more basis for liability 9 against these three airports than two and a half years ago when 10 I looked at the complaints and saw what was stated in there. 11 So from our perspective, to be forced to go forward 12 with interrogatories, for example, that ask us, what is your 13 standard operating procedure if you receive a threat, a 14 notification of a threat from the FBI or from the DOT, that 15 kind of discovery is going to involve nothing but SSI. The 16 deposition that has been noticed, the 30(b)(6), is going to 17 involve nothing but SSI, your Honor. 18 It would seem to me, or I would very respectfully 19 suggest, that we ought to stay this. Instead, I will ask for a 20 meet and confer, I will ask for a response to the letter that 21 we wrote eight days ago. We will then under Rule 2(e) prepare 22 a joint letter to your Honor. We will then come back here in 23 front of your Honor and ask for a protective order. 24 Instead of all of that and the use of the judicial 25 resources to do those kinds of things, I'd ask that first we SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 54 5BIHSEPC 1 allow the SSI issues, which are framed up by the first and 2 second wave of discovery to have final orders, to go up to the 3 Court of Appeals and then to begin all of this. 4 I have said enough, your Honor, but that will at the 5 end of the day, if we are right and we shouldn't be involved in 6 all of this discovery, will allow us then to come back with our 7 motion before we go down this road. 8 THE COURT: Maybe. 9 MR. WOOD: Thank you, your Honor. 10 THE COURT: I think, Mr. Wood, the resolution of the 11 motion to dismiss would depend on the substantive answers to 12 some of the questions to which you alluded. I think, further, 13 if you objected to answering those questions because you had 14 not been instructed by TSA and you think it might be 15 objectionable, someone would make a motion and it would come to 16 me. I don't think 2(e) is a good procedure here. I think you 17 have to make a record and 2(e) is not really a good way to make 18 a record. Someone is going to have to make a motion to compel 19 discovery. There has to be a motion for a protective order. 20 In the absence of a final order from the agency, it 21 seems to me that I need to rule. My need to rule will 22 undoubtedly precipitate a final order from the agency, and that 23 would lead to an appeal. Once there is a final order from an 24 agency, my thinking is that I don't have jurisdiction anymore 25 to rule on that particular point. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 55 5BIHSEPC 1 The bottom line on all of this, it is my feeling that 2 you ought to proceed with discovery, and in very short order 3 the objections that I mentioned are going to be made. They 4 will be advanced by motions to me. If in the meantime TSA 5 issues a final order, my jurisdiction will probably be ousted 6 and you will be up in the Court of Appeals. But some of the 7 parties may then have basis for asking expedition of the Court 8 of Appeals for bringing the issue on. It seems to me you would 9 have very good standing to ask for expedition because you are 10 forced to undergo a procedure where you think you should not be 11 subjected. 12 I think this is the only way to go. 13 MR. WOOD: The other way to go, your Honor, would be 14 to get the rules which are going to apply to all of the 15 depositions to the airlines, the security companies, the 16 airports, the non-carrier airlines clarified first. 17 THE COURT: It may be that by next week we will have a 18 final order given this expression. We will see. 19 Mr. Hanly. 20 MR. HANLY: Your Honor, as the members of PEC 21 responsible for this so-called non-carrier discovery, I just 22 want to say your Honor has now articulated for me our position, 23 which is, we need to move this forward. The court's sentiment 24 is absolutely correct. 25 THE COURT: Go do it, Mr. Hanly. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 56 5BIHSEPC 1 MR. HANLY: So that is what we want to do. 2 THE COURT: Go do it. 3 MR. HANLY: Thank you, your Honor. 4 THE COURT: I think this is a way that will 5 precipitate the issue. 6 All right. Are we finished with Category II? Anybody 7 else have anything for that? 8 MR. MOLLER: If Mr. Alexander can just address -- 9 THE COURT: Yes. Mr. Alexander. 10 MR. ALEXANDER: Brian Alexander. The II delta status 11 of the meet and confers. This would be the third wave now that 12 you have ruled that we will have final rulings and no stays in 13 place. We wanted to report that we have had several meet and 14 confers with the defendants to pick it up now that the first 15 and second waves have essentially been concluded with the 16 exception of a few videotapes. Those are ongoing. 17 We would like to come back to your Honor and report on 18 the 29th as to whether or not there is going to be a need for 19 2(e) type letters with respect to our -- 20 THE COURT: Don't use 2(e). 21 MR. ALEXANDER: Or another procedure -- 22 THE COURT: Use a motion for compel or a motion for 23 protective order, because you are going to need this to create 24 a record, all this is stuff for the Court of Appeals. 25 It is all going to be, it seems to me, context for SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 57 5BIHSEPC 1 what is going to have to come on with the final order that you 2 are seeking review of. You want to create this context and I 3 think the best way to do that is to use the Federal Rules of 4 Civil Procedure, not my chamber's rules. 5 MR. ALEXANDER: That is perfectly fine with us. 6 I would say that we have created a document, and this 7 is a little different -- 8 THE COURT: The chamber's rules are very useful 9 because I give you a quick turnaround, and promptness in 10 resolution is sometimes more important than being absolutely 11 correct in the resolution. For ordinary discovery that is a 12 very useful tool. But for the kind of thing that we are doing, 13 you need to create the appropriate record, and you should go 14 that way. 15 MR. ALEXANDER: We certainly will do whatever the 16 court wants. I just want to point out the focus of these meet 17 and confers has really been to the objections. This is to get 18 documents to TSA in the first instance as opposed to everything 19 else we have been talking about about SSI. We are still 20 working through other objections, primarily scope, time, 21 subject airports and things of that nature. That is what that 22 effort is designed to do. I only raise it because there is a 23 specific requirement in the supplemental case management order 24 for us to come to you with joint letters under 2(e). 25 THE COURT: Let's forget about that. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 58 5BIHSEPC 1 From Ms. Normand's point of view, I think she is going 2 to want to make a motion for protective order in response to 3 the third wave for the reasons that she suggested. She should 4 have the right to do so. 5 I really would be interested to get this whole thing 6 packaged and up for a decision because it is an impediment. We 7 are not going to be able to go forward as long as we have this. 8 MR. ALEXANDER: Very well. We will continue to work 9 and then patch it in a motion to compel if necessary. 10 THE COURT: Ms. Normand, do you want to comment? You 11 don't have to comment. 12 MS. NORMAND: Thank you, your Honor. 13 I would like to say I think there would be some value 14 to having the parties discuss a possible protocol for 15 depositions in particular, because there are a number of ways 16 that those could proceed. I think probably the best way would 17 be for the parties to begin a deposition and to the extent SSI 18 issues arise, which everyone I think agrees they are likely to 19 arise in short order, to the extent that there are plaintiffs' 20 attorneys there, which obviously there would be, they would 21 leave the room, the answer would be taken on the record, and 22 then the transcript would be provided to TSA for review so TSA 23 could determine what aspects of the responses would be SSI, 24 what aspects would not be, and that then would be the result of 25 the review. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 59 5BIHSEPC 1 It is obviously a cumbersome process, your Honor. 2 An alternative would be depositions on written 3 questions, but that would follow a similar procedure. 4 THE COURT: I think my guess is what plaintiffs will 5 do is object to leaving the room, in which case the question 6 won't be answered and you will have a record as well. I think 7 there is merit to having the depositions go forward because it 8 will create the right context. You can decide as you wish. 9 You can decide to leave and let the answer be expressed or you 10 can decide to stay and precipitate the issue that way. 11 Let's do it. Let's move it along. 12 MR. PODESTA: Your Honor, it is not only the 13 plaintiffs that would have to leave the room. It is every 14 defendant except the defendant whose client is being 15 questioned. Because while American's attorneys, for example, 16 have a need to know under the TSA rules American's SSI, we 17 don't have a need to know United's. Massport doesn't have a 18 need to know Globe's. So all the defendants -- I mean, it is a 19 multiparty litigation. 20 THE COURT: Everyone will say I have a need to know 21 and everyone will argue that you don't. It is a confusing 22 situation. 23 How many court reporters are cleared for SSI? Some 24 are clear for top secret, but they may not be cleared for SSI. 25 MS. NORMAND: Your Honor, it is an issue that TSA SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 60 5BIHSEPC 1 would have to agree, but presumably TSA would be able to make a 2 ruling which would permit a court reporter who had certain 3 clearances to proceed for purposes of the litigation. 4 MR. PODESTA: Your Honor, I would suggest that really 5 until the plaintiffs in their letter have suggested that they 6 intend to make a core challenge to the TSA's position on SSI, 7 that basically a need to know has to be inferred for purposes 8 of this litigation. 9 THE COURT: I think so. 10 MR. PODESTA: Until that ruling comes down from the 11 Second Circuit, while it might be the illusion of progress to 12 have people show up in conference rooms with court reporters, 13 the record is going to be the functional equivalent of a 14 deposition where someone pleads the Fifth Amendment -- 15 THE COURT: That is right. 16 MR. PODESTA: -- every time. 17 THE COURT: That is right. But, Mr. Podesta, 18 sometimes we need to get a ruling on the Fifth Amendment, and 19 this is a very good way of obtaining a ruling on the Fifth 20 Amendment. 21 MR. PODESTA: I think that the same issues will be 22 ruled upon in the final orders from the first and second wave 23 discovery without generating a lot of very remunerative 24 activity for lawyers attending depositions. 25 THE COURT: The resolution is that whoever wishes to SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 61 5BIHSEPC 1 proceed should proceed. Let's move it this way. 2 III, ground defendants' intention to file 3 cross-claims. 4 MR. WILLIAMSON: May I respond, your Honor? 5 THE COURT: Yes. 6 MR. WILLIAMSON: Your Honor, if I may, the issue was, 7 rather, the request of ground defendants, certain of them, for 8 the extension of time to serve cross-claims. I think they have 9 been pretty much on a rolling six-month basis. In this 10 instance the request that we received were for extensions, that 11 were ultimately agreed upon by most parties, to January 16. 12 THE COURT: Do you want to do it again? 13 MR. WILLIAMSON: Yes. That was the sole issue. 14 THE COURT: Any objection, Mr. Barry? 15 MR. BARRY: Not an objection, your Honor, per se, but 16 I don't see any reason why this should apply just to the ground 17 defendants, number one. I think it should apply to all the 18 defendants. 19 Number two, I still don't understand why we need such 20 a short string on this -- 21 THE COURT: What do you suggest? 22 MR. BARRY: -- when we are just starting depositions 23 now. 24 THE COURT: What do you suggest? 25 MR. BARRY: I think it should be put off for another SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 62 5BIHSEPC 1 six months. 2 MR. WILLIAMSON: We completely agree with him. 3 THE COURT: Do it. Make a motion. 4 MR. BARRY: Another heated agreement with 5 Mr. Williamson. 6 THE COURT: Make a motion on notice and -- 7 MR. BARRY: We will make a motion to amend your order 8 that you issued on June 23, I think. 9 THE COURT: Fine. 10 MR. BARRY: I think we can do it very quickly. 11 THE COURT: Anything additional anybody wants to bring 12 up? 13 Next meeting. What should we do? 14 MR. MOLLER: Is there a time available to the court 15 during the first week in February so we can see some of what 16 TSA has done? 17 THE COURT: Let's stay off the record for a few 18 minutes and see if we can get a date. 19 (Discussion held off the record) 20 THE COURT: The next meeting of this group will be 21 January 27, a Friday, 2006, at 1:00. 22 Have a nice holiday, everybody. 23 (Adjourned) 24 25 SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300