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                  UNITED STATES BANKRUPTCY COURT

    

             FOR THE NORTHERN DISTRICT OF CALIFORNIA

    

         BEFORE THE HONORABLE ARTHUR S. WEISSBRODT, JUDGE

    

    

     In Re:                             ) Case No. 98-51326-ASW

                                        ) Chapter 13

                                        )

     HOWARD KEITH HENSON,               )

                                        ) TRIAL

                                        ) Volume I

                         Debtor.        ) Pages 1 to 179

                                        )

                                        )

                                        ) Friday, September 27, 2002

                                        ) San Jose, California

    

     Appearances:

    

     For the Debtor:          Law Offices of Stanley A. Zlotoff

                              By:  Stanley A. Zlotoff, Attorney at Law

                              300 South First Street, Suite 215

                              San Jose, California  95113

    

     For Creditor Religious   Moxon & Kobrin

     Technology Center:       By:  Helena K. Kobrin, Attorney at Law

                              3055 Wilshire Boulevard, Suite 900

                              Los Angeles, California  90010

    

                              McPharlin, Sprinkles & Thomas

                              By:  Elaine M. Seid, Attorney at Law

                              10 Almaden Boulevard, Suite 1460

                              San Jose, California  95113

    

                              Paul, Hastings, Janofsky & Walker LLP

                              By:  Samuel D. Rosen, Attorney at Law

                              75 East 55th Street

                              New York, New York  10022-4597

    

     Electronic Court         United States Bankruptcy Court

     Recorder:                Clerk of the Court 

                              Liz Armendariz

                              280 South First Street, Room 3035

                              San Jose, California  95113

                              (408) 535-5003

    

     Certified Electronic     Palmer Reporting Services

     Transcriber:             P. O. Box 30727

                              Stockton, California  95213-0727

    

            Proceedings recorded by digital recording;

          transcript produced by federally-approved transcription

service.                             I N D E X

    

    

    

     Creditor's Motions:                                  page   3

    

          Opening Statement on behalf of the Creditor:    page  32

    

          Creditor's List of Exhibits:                    page  58

    

          Debtor's Response to Creditor's Exhibits:       page  92

    

          Opening Statement on behalf of the Debtor:      page 126

    

    

    

    

     Witnesses:

                              Direct   Cross   Redirect   Recross

         

     Victoria Arel Lucas

      By Mr. Zlotoff:          153

    

    

    

    

     Exhibits:                               Received in Evidence

    

     None.

    

    

    

    

    

    

                                                                     3

 

 1        Friday, September 27, 2002                 9:09 o'clock a.m.

 

 2                    P R O C E E D I N G S

 

 3             THE COURT:  Thank you, ladies and gentlemen.  Please

 

 4   be seated.

 

 5             Ms. Seid, I understand that there's some concern, that

 

 6   you want to have use of some court equipment?

 

 7             You need to be at a microphone, please.

 

 8             MS. SEID:  That's correct, Your Honor.  We were

 

 9   interested in having a television and a VCR made available this

 

10   morning.

 

11             THE COURT:  First of all, those have to be ordered in

 

12   advance and set up.  Nobody shows up the day of trial and asks

 

13   for them.  And, secondly, is that on your exhibit list?

 

14             MR. ROSEN:  The video -

 

15             THE COURT:  You need the microphone, please.

 

16             MR. ROSEN:  The videotape that we -

 

17             THE COURT:  Oh, I'm sorry.  Let me call the case and

 

18   get your appearances.  I got into the technical problem first.

 

19             Keith Henson.

 

20             May I have appearances?

 

21             MR. ZLOTOFF:  Stan Zlotoff for debtor.

 

22             MR. ROSEN:  For creditor Religious Technology Center

 

23   Samuel D. Rosen, Paul, Hastings, Janofsky and Walker.

 

24             MS. KOBRIN:  Helena Kobrin, Moxon and Kobrin, also for

 

25   the debtor.

 

                                                           4

 

 1             THE COURT:  What exactly is this - Ms. - Ms. Seid,

 

 2   would you come forward to the microphone, please - what exactly

 

 3   is the exhibit?

 

 4             MS. SEID:  First of all, I'll state my appearance.

 

 5             Elaine Seid of McPharlin, Sprinkles and Thomas

 

 6   appearing on behalf of the creditor.

 

 7             I'm going to ask Mr. Rosen to respond to the Court,

 

 8   Your Honor.

 

 9             MR. ROSEN:  The exhibit which is marked -

 

10             THE COURT:  You don't have the microphone.  You need

 

11   the microphone every time, or we won't get on the record -

 

12             MR. ROSEN:  You know I'll tell you something.  Many

 

13   years ago Judge Feinberg in the Second Circuit told me, "Mr.

 

14   Rosen, you're one of the few attorneys who appear here who do

 

15   not need the microphone."

 

16             THE COURT:  Yeah.  I was a law -

 

17             MR. ROSEN:  My voice tends to carry.

 

18             THE COURT:  I was a law clerk in that courthouse.  I

 

19   know that court.

 

20             MR. ROSEN:  In the Second Circuit?

 

21             THE COURT:  I was a law clerk on the District Court -

 

22             MR. ROSEN:  Oh.

 

23             THE COURT:  - for Judge Demmick.

 

24             MR. ROSEN:  In answer to your question we have marked

 

25   as an exhibit a video - and it's been in the exhibits since the

 

                                                           5

 

 1   first joint pretrial order, a year and a half ago, - a videotape

 

 2   of excerpts of deposition taken of Mr. Henson in the copyright

 

 3   case.  We want to play the videotape excerpts for this Court.

 

 4   They relate to the issue - the videotape relates to the issue of

 

 5   bad faith.

 

 6             THE COURT:  It's my understanding, and it hasn't been

 

 7   briefed, and I had wanted any issue that might be of concern,

 

 8   that that's a matter of discretion.  There's certainly a

 

 9   transcript available, but I don't know whether you object.  If

 

10   you object, then I'd like to know about it.

 

11             MR. ZLOTOFF:  Well, can coun- -

 

12             THE COURT:  To the video, rather.  I'm not talking

 

13   about the transcript.  I'm just - I'm not talking about the

 

14   transcript yet.  I'm just talking about the video.

 

15             MR. ROSEN:  The video is the official record of the

 

16   deposition, not the transcript.  And it was - and for that

 

17   reason at trial before Judge Whyte it was the video that was

 

18   shown to the jury, not the transcript.

 

19             And it's - by the way, it's a highlight reel.  It's

 

20   certain sections of his deposition given over, I think, two or

 

21   three days.  They were - it was approved by Judge Whyte as

 

22   appropriate excerpts to be shown to the jury.  And, as I say,

 

23   because the video was the official record under the Federal

 

24   Rules, I think it's Rule 30, that the video was shown, not the

 

25   transcript read.

 

                                                           6

 

 1             THE COURT:  Was a copy of it provided to Mr. Zlotoff

 

 2   in advance - of the video?

 

 3             MS. KOBRIN:  On August 1st, Your Honor.

 

 4             MR. ROSEN:  Yeah.  And it's been listed since

 

 5   September of 2001.

 

 6             MR. ZLOTOFF:  I don't remember getting a videotape.  I

 

 7   reviewed the - your exhibit list last night, and I noticed one

 

 8   videotape that was designated.  And I looked in - in the - to

 

 9   the exhibit, and all I saw was like two pages of mostly, I won't

 

10   say redacted, but certainly not a complete excerpt of what - of

 

11   what the videotape purported to be.

 

12             MR. ROSEN:  I don't have to put in an entire

 

13   videotape.  I can put excerpts.

 

14             THE COURT:  But you have to provide it to him.

 

15             MR. ROSEN:  Yeah.

 

16             THE COURT:  You have to provide him the full

 

17   videotape.

 

18             MS. KOBRIN:  There were three separate -

 

19             THE COURT:  Ms. Kobrin, I need to ask you to use the

 

20   mic.  Even if Mr. Rosen has a big barrel voice, you don't.

 

21             MS. KOBRIN:  I don't, I know.

 

22             There were actually three separate videotapes that

 

23   were included in the - in the exhibits that were given to him on

 

24   August 1st.  There was a sleeve -

 

25             THE COURT:  Two months ago.

 

                                                           7

 

 1             MS. KOBRIN:  - just - just like in your set, Your

 

 2   Honor, or in here - whoops, sorry.  There were sleeves, you

 

 3   know, with the videotapes in them.

 

 4             MR. ZLOTOFF:  Oh.

 

 5             MS. KOBRIN:  In the set that was sent to Mr. Zlotoff.

 

 6             MR. ZLOTOFF:  All right.  I - I may have overlooked

 

 7   it.  It's possible.

 

 8             THE COURT:  And where are they in the Judge's copy?

 

 9             MR. ROSEN:  Volume IV.

 

10             MS. KOBRIN:  Volume IV, Exhibits 213, 214, and 2- -

 

11   no, I'm sorry - let's see.  2- - 213, 214, 215, I believe.

 

12             THE COURT:  I don't see any sleeve in mine.  Would you

 

13   look in the official?

 

14             MS. KOBRIN:  Oh, we put it in one set, we didn't put

 

15   them in both on the Court copies.

 

16             THE COURT:  Okay.  Mr. Zlotoff, can you come up and

 

17   look at this because it would - it's fairly pronounced.  Would

 

18   you have gotten this?

 

19             MR. ZLOTOFF:  You know, Your Honor, I - I've probably

 

20   overlooked it.  I'm not - I'm not going to state that I either

 

21   saw it or didn't see it, that I probably overlooked it.

 

22             THE COURT:  Is your office close enough that if we

 

23   break for lunch you can go look?

 

24             MR. ZLOTOFF:  Yes.

 

25             THE COURT:  All right.  So that's what we'll do.

 

                                                           8

 

 1   We'll use it after lunch.

 

 2             MR. ZLOTOFF:  Well, -

 

 3             THE COURT:  And we'll have it set it up.  That will

 

 4   give us a chance to -

 

 5             MR. ZLOTOFF:  Well, Your Honor, could I - maybe I

 

 6   should just address a threshold issue.  It purports to be a 1996

 

 7   deposition.  And I don't understand what possible relevance that

 

 8   would have.

 

 9             THE COURT:  When was this case filed?

 

10             MR. ZLOTOFF:  '98.

 

11             THE COURT:  What possible relevance could a 1996

 

12   deposition have to whether this case was filed in good faith?

 

13             MR. ROSEN:  The standard of good faith is not limited

 

14   to the instant this case is filed, as Your Honor knows.  There

 

15   has been a long pattern of misconduct by Mr. Henson, including

 

16   the misuse of the - of the Bankruptcy Court in the filing of the

 

17   petition in this case as part of his ongoing enterprise to

 

18   attack the Scientology religion.

 

19             This videotape shows his state of mind, his mens rea,

 

20   his intention to just for amusement and stature to attack RTC.

 

21   That carries forward in the - in the good faith-bad faith

 

22   argument and it's going to come forward under 1307 to his

 

23   conduct in the filing of this petition at a time when there was

 

24   only one creditor and there was no claim that had been - that

 

25   had been liquidated against him.  And it's going to continue on

 

                                                           9

 

 1   in terms of his misconduct during this case, the false

 

 2   statements in his schedules and the like.

 

 3             We also have - to the extent there's any question

 

 4   about it, it's a totality-of-circumstances test, which I'm sure

 

 5   Your Honor is aware of, and we have caselaw for that very

 

 6   proposition.

 

 7             We also have caselaw for the proposition that although

 

 8   the filing of a bankruptcy petition for the purpose of derailing

 

 9   a state court litigation -

 

10             THE COURT:  Was there state court litigation that

 

11   was -

 

12             MR. ROSEN:  No, no.  This is a federal court.  I'm

 

13   saying that there isn't - we found no case of - on the

 

14   proposition of - of filing a bankruptcy petition when you're not

 

15   in reality in financial need, for the purpose of derailing a

 

16   state court litigation.  And we've got cases, controlling

 

17   authority from the Ninth Circuit and the Ninth Circuit BAP and

 

18   from the - another District Court in California for the

 

19   proposition that while that alone per se is not cause for

 

20   dismissal under 1307, it is certainly one of the elements that

 

21   the Court needs to look at in terms of determining cause and bad

 

22   faith.

 

23             So to get back to Mr. Zlotoff's contentions or his

 

24   question, the bad faith begins in 1996 with Mr. Henson stating,

 

25   admitting that the whole purpose of this exercise for his

 

                                                           10

 

 1   amusement, the cost of litigation comes out of his, quote,

 

 2   recreation budget.  And his sole purpose - he's never been a

 

 3   Scientologist - his sole purpose is to taunt Scientology.

 

 4             And this is - I will tell you, I've been litigating

 

 5   now in the federal courts 34 years.  I have seen copyright cases

 

 6   where the infringer's motive is to make money, you know, a

 

 7   Napster type case.  I've seen cases where infringements are

 

 8   accidental, where somebody didn't know somebody had written

 

 9   something, or whatever.

 

10             I have never seen, and there is no case I'm aware of

 

11   ever reported in any federal court where the copyright infringer

 

12   says, 'The reason I infringed was to taunt the - the copyright

 

13   owner.'  This is one of a kind.  I think the Judge, Judge Whyte,

 

14   fairly well found that himself and - and the jury certainly

 

15   found it.  And, Your Honor, can -

 

16             THE COURT:  Well, excuse me, Mr. Rosen, can I

 

17   interrupt for a second.  The pl- - Mr. Zlotoff is going to go

 

18   first because he has to prove good faith, so I assume you're

 

19   going to go first on your plan.

 

20             MR. ROSEN:  I'm not sure that's right, if I can

 

21   address it.  If you'll bear with me for 30 seconds, I have a

 

22   couple of other issues to address.

 

23             Number one, I wanted to hand up to the Court on this

 

24   very issue of good faith-bad faith, the decision of Justice

 

25   Whyte entered on September 26th yesterday.  Judge Whyte has put

 

                                                           11

 

 1   this decision under file - under seal.  And - and it cannot be

 

 2   published outside the court obviously.  I am not making it an

 

 3   exhibit unless Your Honor will file it under seal because I

 

 4   don't want to violate Judge Whyte's order.  But I would like to

 

 5   hand it up, and I think what Your Honor - it will show Your

 

 6   Honor what I'm talking about.

 

 7             There's only - it's a determination on a contempt

 

 8   motion.  There is one part of which is absolutely critical and

 

 9   that is a footnote which appears on the bottom of page 5.  Your

 

10   Honor's welcome to see the whole thing.

 

11             THE COURT:  I'll take it.  I'll look at it.

 

12             MR. ROSEN:  And, Mr. Zlotoff, you have a copy, right?

 

13             MR. ZLOTOFF:  This was the one Judge Whyte -

 

14             MR. ROSEN:  Yesterday.  Yesterday.

 

15             MR. ZLOTOFF:  - from yesterday?  Yes, that's fine.  I

 

16   don't have any problem with that.

 

17             THE COURT:  I've read the footnote.  I haven't read

 

18   the whole decision, but I'm not going to take -

 

19             MR. ROSEN:  Your Honor's welcome to.  I think the

 

20   footnote -

 

21             THE COURT:  That's fine.

 

22             MR. ROSEN:  I rose also because of the question of who

 

23   goes first.  While it - Your Honor set this as a trial on our

 

24   motion to dismiss for bad faith and indicated in the original

 

25   decision back two years ago that it would then be combined with

 

                                                           12

 

 1   the objections to the plan.

 

 2             As I analyze it, it's one combined trial.  And I'm not

 

 3   sure it makes a great deal of difference except in the following

 

 4   respect.  Under 1307, as I have now been educated by my

 

 5   bankruptcy co-counsel, to - since you know I'm not a bankruptcy

 

 6   attorney - under 1307 if you find bad faith you must do one of

 

 7   two things.  You must either dismiss the petition or convert it

 

 8   to a 7.

 

 9             It strikes me that that is a threshold issue, because

 

10   if you find bad faith and then proceed to do one or the other of

 

11   the two options available, obviously the option that's not

 

12   available is to even hear a motion to confirm a 13 plan, then

 

13   the second part of the trial, which is the debtor's application

 

14   for confirmation of the 13 plan and our objections to it, truly

 

15   becomes moot.  The -

 

16             THE COURT:  How long will your trial go if you go

 

17   first?

 

18             MR. ROSEN:  It's all - it's all exhibits.  We have no

 

19   witnesses.  I'm just going to walk you through the exhibits and

 

20   show you, you know, what the basis of the good faith-bad faith

 

21   argument is under 1307.  In accordance with your order limiting

 

22   the amount of time, I can assure you it will not take me 20

 

23   hours to do that.  I -

 

24             THE COURT:  How long will it take?

 

25             MR. ROSEN:  Oh, I expect probably an hour to an hour

 

                                                           13

 

 1   and a half.  Plus part of our presentation is this videotape,

 

 2   which I think is 19 minutes.  That - that is part of our case.

 

 3             We would then rest on our motion for cause - to

 

 4   dismiss for cause, if you will.  I guess the statutory language

 

 5   under 1307 is cause, but the caselaw says bad faith is cause.

 

 6   We would then rest.

 

 7             And if Your Honor wants to make a decision at that

 

 8   point, that's fine, and we wouldn't have to deal with the motion

 

 9   to - to confirm the 13.  If you wanted - Your Honor doesn't want

 

10   to and wants to proceed with the rest of the trial, that's fine,

 

11   too.  But I think that at least Your Honor should have the

 

12   option because the motion-to-confirm hearing is going to take

 

13   considerably longer.

 

14             I understand from Mr. Zlotoff, and he can correct me

 

15   if I'm wrong, but he intends to call a witness, Ms. Lucas, the -

 

16   from my conversations with Mr. Zlotoff, and we've been kind of

 

17   candid with each other, he's telling me what he's going to try

 

18   and prove.  I've told him that he has major evidentiary

 

19   objections to overcome.  This will take some amount of time.  I

 

20   can't tell you how long because it's not my witness.  I can tell

 

21   you the cross-examination will take three or four hours

 

22   probably.  And we've got some battles over exhibits.

 

23             So, you know, I'll do whatever Your Honor wants.  It's

 

24   a combined trial, so I'm not sure it makes all of that

 

25   difference, but if Your Honor of a mind to appreciate that, a

 

                                                           14

 

 1   dismissal - a determination of bad faith or cause under 1307

 

 2   moots the 13.  Whereas the opposite is not true.  The opposite

 

 3   is not true because even if you deny the 13 you still have to

 

 4   deal with the bad faith because under 1307 the - the remedy is

 

 5   either dismissal or conversion.  So denial of the 13 would not

 

 6   moot our motion to dismiss, but the reverse is true.

 

 7             One other thing I wanted to raise to Your Honor on a

 

 8   preliminary basis is this.  You issued a trial order - and this

 

 9   is the last item I have to - to raise.  You issued a trial order

 

10   on July 12th, I believe it was, that set forth in several

 

11   paragraphs things that had to be filed.  And I think it was

 

12   paragraph 5 that said, "Failure to comply with the time limits

 

13   in this and the following requirements under this will result in

 

14   sanctions, including" -

 

15             THE COURT:  Probably says "may result."

 

16             MR. ROSEN:  - "may" - "may" - I'm sorry.  You're right

 

17   - "may result in sanctions."

 

18             One of the requirements was the filing of a pretrial

 

19   brief on the 13th of September.  We filed our pretrial brief.

 

20   Mr. Zlotoff filed none.  In fact, he had no intention of filing

 

21   any until on September 20th we argued before Judge Whyte, came

 

22   up indirectly in terms of whether this trial's going to go

 

23   forward or not.

 

24             We said, "How is it going to go forward?  The debtor

 

25   hasn't even complied.  He hasn't even filed a pretrial brief."

 

                                                           15

 

 1   And I think one of the specific sanctions in your order that -

 

 2   for noncompliance is postponing the trial.  Well, that's not a

 

 3   sanction because that hurts us.

 

 4             But, in any event, it's at that point that Mr. Zlotoff

 

 5   said, "Okay, I'll file a pretrial brief."

 

 6             As your own calendar for today notes, Mr. Zlotoff's

 

 7   brief was not filed until the 23rd of September.  And that's 10

 

 8   days after your order and only after the prompting before Judge

 

 9   Whyte, like - and Judge Whyte asked him the question, "Why

 

10   haven't you complied?"

 

11             So I would as a - and this is as a threshold matter,

 

12   Your Honor.  I would ask you to do what your order says.  I

 

13   think that is appropriate, to strike the brief.  I think it is

 

14   appropriate to impose sanctions for counsel's failure to comply

 

15   with your order.

 

16             And I would hope that, you know, the - that Your

 

17   Honor's order meant what it said and that there is a balance in

 

18   this proceeding that Your Honor intends to hold the debtor and

 

19   his counsel to compliance, as Your Honor has held us.

 

20             And that's the last preliminary matter I have, Your

 

21   Honor.

 

22             MR. ZLOTOFF:  Can I respond, Your Honor?

 

23             THE COURT:  Mr. Zlotoff.

 

24             MR. ZLOTOFF:  First of all, as to the brief, RTC

 

25   didn't file a quote-unquote brief either.  They filed a two-page

 

                                                           16

 

 1   statement which was nothing like a brief.  It bas- - it didn't

 

 2   have anything regarding facts.  It didn't have anything

 

 3   regarding issues.  It didn't have anything regarding legal

 

 4   argument.  It basically was a list of items that it wanted Your

 

 5   Honor to take notice of that had been filed previously.  That's

 

 6   not a brief.  That's not responsive to the trial court's order

 

 7   either.

 

 8             In fact we were both of the same mind apparently, at

 

 9   having just prepared voluminous documents just a few days

 

10   earlier with regard to motions in limine, motions for summary

 

11   judgment that we had papered this proceeding to death, and no

 

12   more need be done.  That's exactly the course you took.  So my

 

13   brief was as deficient as yours, even though your deficient

 

14   brief was filed on time.  And that's what I told Judge Whyte.

 

15             MR. ROSEN:  And Judge Whyte rejected that, Your Honor.

 

16             MR. ZLOTOFF:  He didn't say a thing.

 

17             MR. ROSEN:  Excuse me.  Judge Whyte said -

 

18             THE COURT:  Look, Mr. Rosen, one counsel is talking.

 

19             MR. ROSEN:  Sorry.

 

20             THE COURT:  He let you finish your argument.  Now you

 

21   let him finish.

 

22             MR. ROSEN:  I will, Your Honor.  I apologize.

 

23             MR. ZLOTOFF:  With regard to the argument as to

 

24   ordering of which side goes first, I don't know that it makes a

 

25   difference.  I don't understand the argument, to be honest with

 

                                                           17

 

 1   you.  If I go first and I can't prove pick - I can't prove the

 

 2   best-interests-of-creditors test, I lose.  If I lose

 

 3   confirmation -

 

 4             THE COURT:  Well, do you - do you lose if he's

 

 5   unsecured - if he's not unsecured?

 

 6             MR. ZLOTOFF:  If my plan -

 

 7             THE COURT:  Does he have standing to raise that if

 

 8   he's not - if he's a secured creditor?

 

 9             MR. ZLOTOFF:  Right.  Well, pick another issue then.

 

10   Pick anything you want -

 

11             THE COURT:  Well, you pick another issue.

 

12             MR. ZLOTOFF:  Pick feas- -

 

13             THE COURT:  It doesn't matter.  But, anyway, if you

 

14   can't -

 

15             MR. ZLOTOFF:  Pick feasibility -

 

16             THE COURT:  If you can't make your case, -

 

17             MR. ZLOTOFF:  If I can't prove my case in chief, then

 

18   I don't get a plan confirmed and it follows that you are either

 

19   going to say I can amend it or I can't amend it or it should be

 

20   dismissed or converted.  I'm not sure we end up any - at a

 

21   different place regardless of who comes first.  I mean bad faith

 

22   is one element -

 

23             THE COURT:  Well, the way that works, as I understand

 

24   it logically, Mr. Zlotoff, is that you tried to confirm this

 

25   plan.  And you asked for time to put forward another plan.  And

 

                                                           18

 

 1   Mr. Rosen says, "No, I want to go forward with my motion."

 

 2             MR. ZLOTOFF:  Right.

 

 3             THE COURT:  And so he would then, assuming that I was

 

 4   going to let you go forward would another plan, -

 

 5             MR. ZLOTOFF:  Right.

 

 6             THE COURT:  - want to present his motion.

 

 7             MR. ZLOTOFF:  Yeah, but -

 

 8             THE COURT:  And that wouldn't necessarily be mooted by

 

 9   your failure to prove your case in the first instance.

 

10             MR. ZLOTOFF:  Right.  But I take his issue with his

 

11   pronouncement that if you find bad faith you must necessarily

 

12   dismiss the case.  I don't think that's true -

 

13             THE COURT:  I don't have to necessarily dismiss the

 

14   case.

 

15             MR. ZLOTOFF:  No.  I've - I've been involved in cases

 

16   where bad faith has been fined - found on the basis that, for

 

17   example, two low of a percentage plan, so a judge would say -

 

18             THE COURT:  But here's the problem with this, all of

 

19   this, and - when you're coming in.  You come in the minute of

 

20   trial and say, "We want court equipment."  Somebody else comes

 

21   in - or one of you is coming in and saying, "I want to go

 

22   first."

 

23             We met specifically a short time ago to iron out all

 

24   the pretrial problems.  And none - nobody asked for equipment,

 

25   nobody said, "I want to go first."  Nobody said, "If you decide

 

                                                           19

 

 1   this, then you must do that."  Nobody said any of that.  So it's

 

 2   all new, it's all on the morning of the trial, and here we are.

 

 3             Do you want to go first?

 

 4             MR. ZLOTOFF:  Your Honor, I really don't care.  It

 

 5   doesn't matter to me except with regard to the tape.  My only

 

 6   concern about the tape is whether it's a complete tape or

 

 7   whether it's been doctored, whether there have been excerpts.  I

 

 8   haven't seen it.

 

 9             THE COURT:  Well, okay, but -

 

10             MR. ZLOTOFF:  And, quite frankly, I don't have a

 

11   machine in my office to look at it, in any event.

 

12             THE COURT:  I'm not saying, but I at least want to

 

13   know that you received it.  If you didn't receive it, then

 

14   they're not going to be able to present it.  If you did receive

 

15   it, then I have a different question.  I have the relevancy

 

16   question.

 

17             MR. ZLOTOFF:  Right.

 

18             THE COURT:  And I have - whether he has an absolute

 

19   right - see, you didn't brief that either - whether he has an

 

20   absolute right to play it because it's the, quote, official

 

21   record.  If he does, that's one issue.  If he doesn't, that's

 

22   another issue.  None - none of this is briefed.  So it's a

 

23   problem.

 

24             Now do you want to go first or not?  If you say you

 

25   don't care and you want to have this document case presented

 

                                                           20

 

 1   first, then I will adjourn for a couple of minutes to let you go

 

 2   back to the office to make sure that you received this.  And in

 

 3   the meantime it would be nice if somebody gave me some authority

 

 4   as to whether he has an absolute right to - to present it or

 

 5   whether I have any discretion in the matter.

 

 6             MR. ROSEN:  I'm not in - I will be happy to do that,

 

 7   except I don't understand the question.  The - the tape is being

 

 8   presented as -

 

 9             THE COURT:  Or is there an objection to the tape?

 

10   See, other than -

 

11             MR. ROSEN:  Then one -

 

12             THE COURT:  Wait, wait.

 

13             Is there an objection to the tape other than they may

 

14   not have given it to you?  If there is none, then it's not an

 

15   issue.

 

16             MR. ZLOTOFF:  Well, yeah, I had stated that I

 

17   questioned its relevancy.

 

18             THE COURT:  Oh, I understand.  But it -

 

19             MR. ROSEN:  You just stated that now.

 

20             THE COURT:  Please.  No, he didn't.  He discussed this

 

21   before.

 

22             Sit down, please, Mr. Rosen.

 

23             MR. ZLOTOFF:  That's when we got into the discussion.

 

24             THE COURT:  To save time, because I can't order briefs

 

25   at this point, I want to get this done.  To save time I would

 

                                                           21

 

 1   let him, if you have no objection, if you actually got it, I

 

 2   would let him present the tape, but I wouldn't rule on its

 

 3   admissibility until after the trial.  And I will order briefs on

 

 4   the admissibility of that document.

 

 5             It can - I will hold the ruling on admissibility, but

 

 6   to save time and to allow it to proceed, I will take it subject

 

 7   to a ruling subsequently on admissibility.  So that's what I

 

 8   will do.

 

 9             If you didn't get it, I won't let it in.  And I'll let

 

10   him present the written transcript.

 

11             MR. ROSEN:  Your Honor, can I just have 30 seconds?

 

12   Two things.

 

13             Number one, with respect to the filing of the brief,

 

14   your order doesn't require - doesn't specify what is required in

 

15   a pretrial brief.  We filed a pretrial brief which said we

 

16   incorporate and we identified the documents.  We've addressed

 

17   these issues to a fair-thee-well, to a redundancy.  We have

 

18   killed I don't know how many trees starting in July of 2000 with

 

19   the first motion to dismiss and the summary judgment and the