Some reformatting. Page numbers removed, some capitalization, some
paragraph breaks, rewrapped. -Mike
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(Whereupon, court convened and the following proceedings were held:)
UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA SAN JOSE DIVISIONC-96-20271 RMW SEPTEMBER 20, 2002 PAGES 1-113
RELIGIOUS TECHNOLOGY CENTER, SAN JOSE, CALIFORNIA PLAINTIFF,
VS .
H. KEITH HENSON, DEFENDANT.
TRANSCRIPT OF PROCEEDINGS BEFORE THE HONORABLE RONALD M. WHYTE UNITED STATES DISTRICT JUDGE
A P P E A R A N C E S:
FOR THE PLAINTIFF: PAUL, HASTINGS, JANOFSKY & WALKER BY: SAMUEL D. ROSEN 75 EAST 55TH STREET NEW YORK, NEW YORK 10022
MOXON & KOBRIN BY: HELENA K. KOBRIN 3055 WILSHIRE BLVD., SUITE 900 LOS ANGELES, CALIFORNIA 90010
FOR THE DEFENDANT: LAW OFFICES OF STANLEY A. ZLOTOFF BY: STANLEY A. ZLOTOFF 300 S. FIRST STREET, SUITE 215 SAN JOSE, CALIFORNIA 95113
OFFICIAL COURT REPORTER: LEE-ANNE SHORTRIDGE, CSR, CRR CERTIFICATE NUMBER 9595
INDEX OF WITNESSES
PLAINTIFF'S
WARREN MCSHANE DIRECT EXAMINATION BY Mr. Rosen P. 59 CROSS-EXAMINATION BY Mr. Zlotoff P. 76
SAMUEL D. ROSEN DIRECT EXAMINATION BY Ms. KOBRIN P. 82 CROSS-EXAMINATION BY Mr. Zlotoff P. 87 DEFENDANT'S
VICTORIA AREL LUCAS DIRECT EXAMINATION BY Mr. Zlotoff P. 90 CROSS-EXAMINATION BY Mr. Rosen P. 98
SAN JOSE, CALIFORNIA SEPTEMBER 20, 2002
P R O C E E D I N G S
The Clerk: calling case c-0-220301, in re: H. Keith Henson, on for RTC's motion to withdraw reference and motion to intervene; and case c-96-20271, RTC versus H. Keith Henson, on for evidentiary hearing on RTC's motion for contempt.
Counsel, state your name for the record, please.
Mr. Rosen: for religious technology center, Samuel D. Rosen, Paul, Hastings, Janofsky & Walker.
Ms. Kobrin: also for religious technology center, Helena Kobrin, and I am also representing myself pro se on my motion to intervene.
Mr. Zlotoff: Stan Zlotoff, bankruptcy attorney for Keith Henson.
The Court: are you representing -you're not representing -- well, I should not lead one way or another. You're here on the motion to withdraw the reference and the motion to intervene. Are you appearing on Mr. Henson's behalf on the contempt matter?
Mr. Zlotoff: you know, I don't know. At most, I'm here specially appearing on that, your honor. I got a call from Mr. Henson this morning referencing some order made three days ago, I think inviting Mr. Henson, as I understand it, to request a continuance if he needed counsel.
I'm not sure. If the matter goes forward, I may stay just to monitor it.
The Court: okay. I'm not sure what order you're talking about. We set a contempt hearing some time ago for today. Well, it was for a week ago, wasn't it, and then I moved it because of my unavailability.
I just want to know if you're appearing, because I was going to take the motion to withdraw the reference and the motion to intervene first because I knew he would have representation for that, and then I was going to let you go at that point if you weren't representing him on the other.
But if you want to stay, there's no objection to your staying.
Mr. Zlotoff: right. I know nothing about it, the substance of it. I really don't know anything about it, so as I say, it would be, at most, just to monitor it.
So the order that you're going to call it, I'm in favor of that. I'll note that -
The Court: okay. Let's take the motion to withdraw the reference first.
Mr. Rosen: thank you, your honor.
The Court: I've read the papers.
Mr. Rosen: I noted, your honor, that there was a tentative -- or actually, a tentative determination, but no tentative opinion -
The Court: that's correct.
Mr. Rosen: -- to deny it.
I'm something at a loss to address it. Obviously I would like to address it, but without the benefit of understanding the court's thinking and the grounds for denial, I'm -- you know, without a tentative order, I'm kind of flying blind.
The Court: my feeling is that you're making some leaps that aren't justified in the sense of saying that judge Weissbrodt is not capable of being fair and impartial in the case. Obviously you disagreed with some of his rulings. You draw some inferences from what he did that I have trouble drawing.
Trial, as I understand it, is set for later this month.
And frankly, I thought some of your briefing went beyond what is reasonable advocacy. I mean, accusing him of basically aiding and abetting the harboring of a fugitive I thought was way out there.
Mr. Rosen: well, your honor, as you'll recall, our motion had four grounds, and that is the ongoing bias against RTC and the scientology religion; the bias in favor of Mr. Henson; the conduct, we didn't say harboring, we did say conduct in the nature of aiding and abetting a fugitive; the inability to, or unwillingness to decide the matter, either by a motion or a trial; and the fact that it would be, since one of the -since the issue being tried, if we ever get to trial, is a motion to dismiss the bankruptcy petition for bad faith on the part of Mr. Henson, this contempt proceeding is part of it.
So on that ground as well, it made sense for it to be before the same court.
If our advocacy has caused your honor concern, as it has, I apologize.
But let me address the facts as we see them, and that includes the facts, the events that occurred after we filed our motion, a series of events occurred after the filing of this motion in June, some of which were in our reply papers and most recently, from the September 11th hearing, which is the subject of an ex parte motion we filed a couple of days ago to supplement the record on this motion to withdraw the reference.
Your honor, let me -- let me start by saying something. I've been privileged to practice law in the federal courts across this country in nine of the thirteen circuit courts of appeal for 34 years. I've been a member of the Ninth Circuit bar for almost that long.
This is the first time I have ever had an occasion to seek, and now the second time I guess, same judge, to seek a disqualification.
I do not take this proposition lightly, whether it is a bankruptcy judge or any other judicial officer, state or federal.
If I may be a standard, then, for objective reasonableness under 455, I believe I am a reasonable standard in the sense that not many lawyers can say, in 34 years, they've never moved to recuse a judge.
That's what I say to you, and I very strongly believe, on an objective basis, that the conduct of judge Weissbrodt requires that.
As you know, last time we sought disqualification, your honor denied it in an opinion in august of 2001.
And I mean no disrespect to this court, but in that opinion, this court read every statement by judge Weissbrodt in a manner, and I believe meant to do that, in a manner which found some neutral, religious-neutral statement, or justification for the statement, as opposed to what we were reading into the statement, statements about RTC calls itself a religion and why would a religion ever want to keep its writings away from the public.
I'm not going to rehash the argument that we made before you, but I say with all due respect to this court -- and you know I've been before this court for now four years and I have the utmost respect for this court -- I think that your honor certainly looked to find the good rather than the bad in what judge Weissbrodt, in judge Weissbrodt's comments at that march 13th, 2001 hearing.
We felt strongly enough about it that we filed for an extraordinary writ with the Ninth Circuit.
The Ninth Circuit denied it, as I'm sure you know, and all that means is that we're relegated to seeing this thing through to the end, and then ultimately bringing all of these matters before the Ninth Circuit.
The thing that was most surprising to us is after your honor's opinion in august of 2001, one would have thought, and I certainly hoped, that judge Weissbrodt would take a more measured view in terms of the statements that he made and would not be reiterating the kinds of statements that gave us such great cause for alarm, either demonstrating a bias against the scientology religion or advice in favor of Mr. Henson.
That was not to be. The April 22 order stands as a testament to that, and I want to just back up and give you the background for a moment of the April 22, 2002 order.
We sought a deposition of Mr. Henson to bring up-to-date the issues about the feasibility of his plan, is he working, what he's earning, et cetera.
Mr. Zlotoff, representing him, did not seriously contest that it was appropriate to take that deposition.
Mr. Zlotoff, though, suggested as follows in his opposing papers: that the deposition be conducted in Canada rather than have Mr. Henson appear in san Jose because, and I quote Mr. Zlotoff's words, your honor, not my advocacy, "because if Mr. Henson comes to California, it is likely his testimony will be interrupted by his arrest because he is a fugitive."
That was the argument made by Mr. Zlotoff for why the deposition should proceed in Toronto, or someplace in Canada.
There was no suggestion that interrogatories would be an alternative in Mr. Zlotoff's papers.
We appeared to argue the motion, and judge Weissbrodt agreed that it was appropriate to take this discovery. No question about it.
And then in his decision of April 22, and this I think is really the Rosetta stone to what's going on here, this is really the key that I think explains these circumstances, in his April 22 order, judge Weissbrodt says, and we quote it in our papers, "RTC," having not shown, "having failed to show any reason why written interrogatories would not suffice," that's what you're limited to. No deposition, written interrogatories because you have not shown that they're not a reasonable alternative. And in that same sentence -- or the same paragraph goes on to say, in language which cannot be interpreted in too many different ways, your honor, that "this resolves the concern that Mr. Henson cannot leave Canada because it will jeopardize his application for asylum."
Well, what that means is this: if he comes anywhere into the United States, he's on the NCIC computer, he gets arrested.
Once he's arrested in the United States and returned to Riverside County for incarceration, obviously he cannot pursue, and the Canadian government will not pursue an application for asylum, and the judge says it right in his order, "this resolves this problem."
So you have two aspects to this: the first aspect is nowhere was there ever any discussion, the word interrogatories did not even come up, not in the opposing papers, not in the oral argument on the motion.
We had oral argument on this discovery motion before judge Weissbrodt, and my recollection is, and we have a transcript, that judge Weissbrodt said practically nothing. He just allowed the attorneys to argue.
The word interrogatories never came up throughout this entire period.
Yet, as your honor sits there and reads the April 22 order, you and anybody else would reasonably derive from that that RTC was, somewhere in this proceeding, in this motion, challenged to come forward and explain why interrogatories would not be sufficient, a sufficient alternative to a deposition, and RTC failed to do that and that's -
The Court: he never said that, though, did he? I mean, what he said is there's no apparent reason that interrogatories would not be entirely sufficient.
Mr. Rosen: well, you're right. That's right, your honor. And from that, one would read that somewhere in this, in this motion, someone was asked -- someone raised the question of interrogatories, because after all, it's not our burden. We filed a motion to compel a deposition, compliance with a deposition notice. It is not our burden, as the moving party to compel a deposition, to say preemptively if you will, or in anticipation, "oh, and by the way, interrogatories will not suffice." That's not something that somebody says on a motion to compel discovery. That's something which either the party opposing says, "wait a minute here, you know, why can't written interrogatories suffice?"
And then the moving party answers it, and whether he answers it well or badly, the issue has been put on the table.
One cannot read that decision without concluding to a moral certainty that somewhere in this motion process the issue of whether interrogatories were raised as an alternative to the deposition was an issue that had been discussed and that RTC had not shown that they were not a reasonable alternative.
Because if you don't read it that way, what you're saying is that a party who makes a motion to compel a deposition has the burden, in the first instance, of saying, "oh, by the way, written interrogatories would not suffice," and,
"Oh by the way, deposition on written questions will not suffice," and, "oh, by the way, a document demand will not alleviate this."
You don't anticipate defenses, and indeed this defense was never raised.
But I, very frankly, your honor, have a difficulty in reading that sentence without concluding, except for what I know because I was there, that somewhere in this process, somebody raised, whether the judge or opposing counsel, raised the question, why can't interrogatories be an alternative?
But I want to go to the next step.
The Court: let's assume that he heard argument, it wasn't mentioned, and then he's contemplating his decision and he says to himself, "gee, interrogatories will accomplish what they need. That'll save everybody time and money."
Mr. Rosen: well, your honor, you know that if you were thinking about that -- and I don't mean to put you on the spot and it's never been raised in a motion before you -- you would invite the parties to address it because you know that there's a wealth of case law, both in the Ninth Circuit and across this country, that says, as a general principle, interrogatories are not a substitute for depositions.
The man gets 30 days to answer with the benefit of whatever guidance and counselling he gets, as opposed to getting his spontaneous, if you will, responses.
You can't show them documents. It imposes the burden.
But I want to go beyond that. I recognize that under rule 26, a court has the broadest possible discretion to regulate discovery. In fact, I'd be hard pressed if you ask me to think of a single case I've ever seen in 34 years where the appellate court said the district court abuses discretion in the regulation of discovery.
However, the premise is that there is some good reason, there is some cause that the court has found to regulate discovery and the discovery devices that are available, depositions no, interrogatories, yes, you pay for the deposition, you travel to it, whatever it is that comes under the purview of your daily business in this court under rule 26.
But the one thing that rule 26 cannot stand for is what this judge did, and that is, "and I exercise my jurisdiction, my discretion," assuming he had it, assuming this issue had even been raised, "because it will assist Mr. Henson in maintaining his refugee, his political asylum status, because if he comes to the united states he will be arrested."
And it strikes me -- and your honor, in view of your comments on our advocacy, I hate to say this, but I'm going to say it as clearly as I can.
For a federal judicial officer to make an accommodation to somebody who is a fugitive is obscene. It is truly obscene. And that is the only reason given by this judge for this accommodation, if you will, of interrogatories instead of a deposition.
And, your honor, let me just make the last point on this. As you know, judge Weissbrodt went to the trouble of doing an extraordinary thing, because we didn't file a motion before him. He went to the trouble of, in the context of an order of July 8th, setting down questions to be posed, to be answered at the July 10th pretrial conference, dropping this footnote that goes on for parts of three pages explaining why he did certain things in his April 22 order, principally why he excluded Ms. Kobrin.
That itself is extraordinary. I don't know where judge Weissbrodt got a copy of our motion to withdraw the reference, and I don't really care. I haven't made inquiry and I would not.
But it's extraordinary for a judge to write a decision explaining his conduct apropos of nothing.
But I want to tell you the most critical part of it. Obviously he had our motion to withdraw the reference when he wrote that because he addressed the issue about Ms. Kobrin's religion.
There is not a single word in there on the subject of these interrogatories, and they were clearly presented in our motion from the beginning, that there was no justification for this, that the order is misleading to the extent that it suggests that the issue came up.
And that it is improper, even under rule 26 in a football field wide of discretion, to exercise discretion for this particular purpose, to protect a fugitive.
And yet, the most -- if you'll pardon me, it seems to me the most compelling part of judge Weissbrodt's July 8th decision is not his explanation for why he excluded Ms. Kobrin. It is the silence in that decision for why he did what he did with the interrogatories.
Now, this does not occur in isolation. Ever since Mr. Henson became a fugitive, there has been accommodation after another of accommodation to him solely because he's a fugitive. This is one.
We made a motion to dismiss his bankruptcy petition on the grounds that he's a fugitive.
The Court: doesn't he have discretion to deny that?
Mr. Rosen: no. That's a matter of law. The Ninth Circuit, by the way, has made most of the law in this case.
The Court: are you familiar with Deegan versus United States?
Mr. Rosen: yes, your honor.
The Court: okay. Didn't that court -didn't the Supreme Court in that case allow discretion as to whether to allow somebody to proceed who is a fugitive?
Mr. Rosen: no. I think that the holding of the case, which I believe reversed the Ninth Circuit decision, and the original decision was from judge reed in Nevada, I think the holding of the case is if the fugitive is a defendant, if the government is trying to take something from him -I think it was a forfeiture case, if I remember correctly.
The Court: that's correct.
Mr. Rosen: then you have a constitutional implication as to whether you can deprive the person of those rights when it is the government who is the actor, or some other party who's the actor and the fugitive is the defendant.
The reverse side of that is when it is the fugitive who seeks aid and comfort of the courts, that the constitutional implication of the taking of the property that the government was seeking in that case does not apply.
And I submit -- and by the way, I argued this case before judge reed in Nevada. Not this one, but the same exact issue on a fugitive.
The point is that if someone is a fugitive, the law does not permit him, and as far As I know, the courts -- it's not a matter of discretion. If he's a fugitive and there's a civil action that's related to the criminal proceeding of which he's a fugitive, the law does not permit him to seek the benefits of the law as Mr. Henson is doing, seeking the benefits of bankruptcy, including a super district judge, while at the same time being a fugitive.
The state of California denied his appeal from the criminal sentencing on the grounds that he's a fugitive as a matter of law, not discretion, but as a matter of law.
You're a fugitive; you don't have any right to appeal to this court. And they dismissed his appeal.
So it's been awhile since I read the Supreme Court case, but I know that it's the flip side of it. It's where the fugitive is the defendant.
And I don't believe that it's a matter of discretion.
For the same reason, I don't believe that rule 56 is a matter of discretion. And here what this judge, what this judge has done -- and again, you know, any one individual ruling, one can say, "Well, perhaps he's wrong. Maybe for sure he's wrong. But that doesn't amount to disqualification."
A judge has a right to be wrong. That's what this court sits for and what the Ninth Circuit sits for.
But when you pile one on top of another with the underlying theme of poor old Henson and the RTC, which claims to be a religion, the thread that runs through this and the fugitive status is just overwhelming.
The Court: okay. I understand your argument. Is there any other point you want to make before I let counsel speak?
Mr. Rosen: yes, I do. I want to address the issue you said about this case is going to trial next week.
I don't think so, and I'll tell you why. There are three reasons.
Number one: when we met on July 10th to set a date for trial, counsel said his client is not coming.
I said, "Judge, it's a 15 minute trial.
I mean, you know, how much simpler can it be? Counsel has conceded he can't make his case without his witness."
The judge said, suggested some dates in august.
I said, "yes, August 26, 27."
Mr. Zlotoff said fine.
All of a sudden, we had a trial set and the judge said, "No, because you can't make it the 29th and the 30th, if the trial goes over and it doesn't complete, you're going to screw up my schedule. I'll give you a choice. You can have august 26 and 27, and if you don't finish, you're going to be on my, quote, trailing calendar for the end of September, so stand around and wait."
We said, "We're confident it's going to finish. With no Mr. Henson, this trial can't possibly take very long."
Notwithstanding that, the judge set it down, and we have a transcript of July 10th, the judge set it down for September 27th, continuing every day the following week, except for one morning the judge is unavailable.
We walk out of this thinking, okay; we've got a fixed trial setting.
A couple of days later we get an order from judge Weissbrodt saying "you're now on the trailing calendar for September 27."
Do I think I have a trial on September 27? No.
Next reason I think not: in that same order, judge Weissbrodt set forth his pretrial requirements, and one of the pretrial requirements is both sides to submit a trial brief by September 13th.
And his order says, "Any violation of this, including this paragraph to submit a pretrial order by the 13th of September, may result in sanctions, including postponing the trial."
We filed our brief on September 13th. No brief from debtor's counsel.
I believe, to a moral certainty, this trial is not going to go forward on the 27th, either because it's on the trailing calendar or because Mr. Zlotoff has failed to comply.
We'll be punished. He didn't comply, we'll be punished, the trial will be put off.
Third reason why I think there's no trial: on September 11th, we appeared before the court on this emergency motion by Mr. Zlotoff for a court order -
The Court: on what date?
Mr. Rosen: excuse me?
The Court: what date did you say?
Mr. Rosen: September 11th. This is the subject of our ex parte filing.
We had a hearing before judge Weissbrodt on September 11th. The reason -- one of the reasons for the hearing was an emergency motion by the debtor for leave to sell the house and distribute the money, going to send the money to Canada.
Mr. Henson cannot come to California to claim his share of the proceeds, principally his exemption, his homestead exemption, so we want an order to sell the house and allow for distribution, including sending the money to Canada to a fugitive who cannot come into the United States. We'll make it easy for him. We won't make him give up his fugitive status. We'll send him the money.
We argued that on September 11th on a motion to shorten time. The judge gave us more time to file an opposition, to respond, and here's the critical part: he set the hearing date for that motion for October 10th.
That makes no sense in terms of a trial on September 27th of half an hour for one reason:
the judge grants our motion to dismiss the bankruptcy petition, to dismiss it. He would have no jurisdiction to issue any further orders, whether it's an order to sell the house or anything else.
The very fact that the judge set a hearing date on a motion to sell the house for two weeks after the trial was supposed to be strongly suggests to me that I will come out here next Tuesday, and next Wednesday I'll get a call from our local bankruptcy counsel that they were just advised by chambers that the trial is off.
That's what we believe is going to happen. Now, only time will tell whether that's the case.
But let me go to my last point, because the other thing that happened on September 11th is critical.
We made a motion for summary judgment.
We put in all of our affidavits, this is summary judgment for dismissal of the petition on the basis of bad faith. We briefed the very point that Mr. Henson cannot put in an affidavit under 56(e) because he already said he's not coming to trial, so an affidavit of a witness who's not coming to trial is insufficient to defeat summary judgment. There was an affidavit put in by Mr. Henson.
September 11th is the argument date. On a dispositive motion for summary judgment to alleviate the need for a trial, judge Weissbrodt says to opposing counsel, "well, what do you say to this issue about I can even look at Henson's affidavit under 56(e)?"
And opposing counsel says, "Well, I don't need that affidavit. If you give me a chance to come to trial, I think I may be able to present some evidence to oppose this."
Judge, this is after four and a half years. This is summary judgment.
And judge Weissbrodt then proceeds to rule and his ruling is, quote, "motion denied without prejudice."
I say, "Excuse me? What does without prejudice mean? We can't file another one. We're supposedly going to trial in two weeks."
Judge Weissbrodt looks at me and says, "Okay, motion denied."
And I said, "Can we have the grounds for the motion?"
Because as your honor knows, under 56(d), you deny a motion for summary judgment, the court is required to at least identify, at a minimum, the material issues of fact that are required to be tried.
And judge Weissbrodt ignored me.
When I tried to say it again, he said, "Court's adjourned."
This is the second time in this case we made a motion labeled a motion to dismiss, but really for summary judgment, in July of 2000 on the same record. The hearing on that motion was in September, September 13th of 2000.
Judge Weissbrodt would not identify a single issue of fact that was in dispute, and instead his ruling was, and I quote, "in my discretion, I carry this motion to trial."
Now, I know that federal court judicial officers have an awful lot of discretion. You have the discretion to deny a motion. You have the discretion to take your time to decide it.
And I've had judges who have told me, quite frankly, "I'll let you know the answer on your summary judgment as the jury is coming in."
Okay. But to say, "I'm not going to decide it and in my," quote, "discretion, I'm just taking this motion to trial," this is just -- this is going on two years, your honor.
The Court: Okay. I get your point. Let me hear from -
Mr. Rosen: I would ask, your honor, one other thing. I'm not going to make a further argument, but I am going to say this: I would -- I assume from the statements that I've made and from your honor's reaction that you've not seen the filing we made the other day.
The Court: no, I have not seen that.
Mr. Rosen: I would urge your honor to read that and the September 11th proceedings that I've described in only partial form.
The Court: okay.
Mr. Rosen: thank you.
The Court: counsel?
Mr. Zlotoff: thank you, your honor. Hearing Mr. Rosen, the whole motion is very unseemly in my mind. It sounds like telling tales out of school.
Judge Weissbrodt -- everything that counsel has said, to my mind, refers to matters that were well within judge Weissbrodt's discretion to rule upon, and nothing rises to any level of bias.
To take an example, Mr. Rosen failed to announce that in addition to the motion for summary judgment that was heard on September 11th, at the same time there were motions in limine that were filed by Mr. Rosen seeking to exclude virtually all of my documentary evidence that I noted would be used as trial exhibits. And almost without exception,
Judge Weissbrodt ruled against me and ruled in favor of RTC to exclude most of my evidence, most of my documentary evidence.
Mr. Rosen mentions none of that. Why would judge Weissbrodt do such a thing if he's biased in favor of Mr. Henson?
Mr. Rosen mentions that, you know, he's practiced in the federal court for 34 years.
Well, I've practiced bankruptcy since 1979. I've emphasized my practice. I'm a specialist. I've been in front of judge Weissbrodt ever since he was appointed to the bench and I've never been a witness to anybody trying to disqualify judge Weissbrodt.
And in my -- in my opinion, he's a very fair and very good judge, and it's really painful to hear RTC trample him and his reputation, to his face, I might add. That's very hard to take.
The -- what RTC doesn't mention about this order of April 22nd regarding its request to depose Mr. Henson is the fact that discovery had been cut off. I mean, that's -- number one, the judge would have simply denied the motion straight away. There is language in the, in the order itself stating that, in fact, the discovery cut off had long since happened, and the docket is replete with extensive discovery examinations undertaken by RTC.
In my experiences as a chapter 13 and consumer bankruptcy attorney, I've never had a case that's dragged on this long as a result of over the top, just duplicative and unnecessary discovery that's been conducted by a creditor such as happened in this case. This case has been going on for four years without confirmation.
The Court: but what have they done that's delayed this proceeding?
Mr. Zlotoff: on and on with discovery. They have taken depositions of people back east as I recall, they had to just -- I think the most recent one was -
The Court: did they ever ask for a delay because they wanted to take discovery?
Mr. Zlotoff: The judge's position -- I think at some point I urged the matter go to trial. I don't know when this was, a couple years ago as I recall. I said, "Judge, why can't we have this go to trial?"
And the judge's position was that he wasn't going to set this for trial until RTC was satisfied that it had conducted ever bit of discovery that it felt it was entitled to.
And that's the fairness of judge Weissbrodt. He let them have four years worth of discovery.
I included, I think in my response, a transcript from judge march of the central district, and I think that was the last examination that was of debtor's daughter. They had to take a deposition of her to ask about some insignificant piece of art and Judge March limited their examination to one hour, and that was, as I recall, affirmed on appeal.
But other judges certainly would have taken a more hands-on, much more restrictive approach to RTC.
Judge Weissbrodt has really been fair towards them as far as I'm concerned, and the fact that this case has lasted this long is, I think, a testament to it.
The Court: okay. I think I understand your position, unless you have something more you want to say?
Mr. Zlotoff: do you want me to respond to some of the other points?
The Court: yeah, quickly, because I want to get on with the other issues.
Mr. Zlotoff: okay. I agree with your honor. I don't think the bankruptcy is related to the civil action. The bankruptcy happened first. The civil action happened later.
I don't see any connection at all to a chapter 13 and a crime that happened later. The attempt to try to make Henson into a plaintiff by virtue of a bankruptcy, which is basically a defensive move by someone, I don't see the connection or the analogy at all.
The so-called trial brief that RTC says that it filed, two pages, it wasn't a trial brief.
It simply said, "Judge, we don't want to file a trial brief because we've already filed all kinds of other stuff before and we're incorporating."
The Court: that really wasn't his point. His point was that you hadn't filed anything.
Mr. Zlotoff: that's true. I will rectify that after this hearing.
The Court: well, I'm not sure you necessarily have to, but I think he was concerned that that might be used as a basis for continuing the case.
Mr. Zlotoff: I can say to a certainty that that won't be. Judge Weissbrodt knows as much of this case as he would like to. There's nothing else that can be said to him.
Nothing in RTC's trial brief elucidated any further evidence. It simply incorporated prior documents and the trial will go forward.
The fact that it's trailing simply means that perhaps there's a half an hour matter, or two short cause matters that the judge had to set for the same time.
The fact that the judge set this hearing on the sale of the house for October 10th, I thought it prejudiced me. In no way did I think that it meant that judge Weissbrodt meant to postpone the trial. I thought he prejudiced me by putting it out so far.
The Court: because he may not have any jurisdiction?
Mr. Zlotoff: because he may not have jurisdiction.
I may lose the case unless -- and quite frankly, what I think it means is that I might have to convert the case to chapter 7 if I lose at trial, or maybe even before trial if I determine that I can't win at trial.
But -- I never conceded that I had no case. It's a difficult case. I'm likely to lose. I don't disagree with that. It's difficult without a prime witness. But the debtor's wife will be a witness, could be a witness and might be able to move me through some of the difficult issues. All right, your honor. In short, I would urge you to uphold your tentative ruling.
The Court: all right. Let's talk about the motion with respect to Ms. Kobrin.
Mr. Rosen: yes, your honor. As you know -
The Court: let me ask you a preliminary question.
Mr. Rosen: sure.
The Court: if I were to not withdraw the reference, do I have the power to do anything with respect to her motion to intervene?
Mr. Rosen: well, I think you have to -I think it's -- the order of battle, if you will, is exactly the opposite. She's entitled to be heard, I believe, on why she wants that order vacated in the context of a motion to withdraw the reference.
I will tell you the practical effect of it, because I don't want to make any bones about this.
Ms. Kobrin, if she is granted intervenor status, will have an absolute right as I understand it, under 1291, to appeal immediately to the Ninth Circuit.
A denial -- so if you granted her intervention status, she would have a right of appeal as a matter of right now if you denied the motion to withdraw the reference.
Without the intervenor status being granted, and I'm being very candid with you, judge, our only way to the circuit is by writ. I mean, we don't have a right to file an appeal from a denial of motion to withdraw the reference.
We have to do what we did last time. We just have to, you know, kind of wait and bide our time so to speak and wait until we get a final judgment out of the bankruptcy court, whenever that is.
The Court: let me ask you another question. Let's assume, and I'm speaking totally hypothetically at this point, that I were to conclude that judge Weissbrodt did not make the decision he made with respect to Ms. Kobrin based on the fact that she may be a member of the scientology church, but rather, because he deemed her to be categorized as in-house counsel.
Could she bring that issue to me and say that was an improper characterization?
Mr. Rosen: I believe so. That's the purpose of the motion to intervene because that statement could not possibly be supported by the record.
In the past -
The Court: but I guess my question is,
Is that something that can be brought to me at this point? And on -- what's the mechanism?
Mr. Rosen: I think the mechanism is a motion for intervention because her rights are being effected by the exclusion of her participation as an attorney in the representation of this client.
Whether you -- and that alone is a basis for intervention.
The fact that her rights are going to be -- are affected, and the fact that if your honor says, "well, wait a minute, her rights are not being affected because she's being excluded as an in-house counsel rather than as an outside counsel who happens to be a member of a particular religion," that goes to the merits.
I don't see how that avoids the intervention for one reason. Ms. Kobrin put in an affidavit saying that's not true, she's not an in-house counsel for RTC.
and to interpret an order which says outside counsel as really meaning inside counsel, which she's not, goes to the merits of whether or not -- it doesn't go to the issue of intervention, in my mind. it goes to the merits of the decision on the motion.
The Court: is that timely brought before me, though? because wasn't -- wasn't it some time ago that she was deemed to be inside counsel?
Mr. Rosen: no. there was never an order making a determination that she was inside counsel.
and let me tell you the problem.
The Court: but there was an order at some point that she not be made privy to certain information; correct?
Mr. Rosen: yeah.
No. here's what happened: the issue arose some time ago.
And by the way, we have an affidavit which answers judge Weissbrodt's explanation of this set forth in his April 22 order.
The issue arose early on in the bankruptcy proceeding just before discovery closed in November of 2000.
And the issue was whether or not Ms. Kobrin should be allowed in. the focus was not on her religion. the focus was on whether or not she was an in-house counsel.
Clearly a court has the right to exclude, if you think the parties should not seek certain discovery, the court has the exclude in that exclusion order an in-house counsel.
Judge Weissbrodt -- and we have this on the record, this is all documented -
Judge Weissbrodt asked Ms. Kobrin, you know, "what do you do," et cetera, asked her a couple of questions. and I think his comment was, "well, you're kind of like in-house counsel."
At that point, the order was to exclude her from certain depositions, and RTC did not object because it made a determination at that point that, while the judge was wrong that she was, that she cannot -- she's not a quasi in-house counsel. we wanted to get the discovery completed. we were trying to get to trial.
The Court: yeah, but my point is -
Mr. Rosen: however, now comes an order which doesn't say "I continue the exclusion of Ms. Kobrin as in-house counsel."
if the order had said that, then we would have a very different issue. but this is the first time, April 22, that the judge -- he's not excluding her on the basis that she's in-house counsel.
he's excluding her as outside counsel, and that's a critical difference.
The Court: but didn't -- whether you
39
want to recognize it or not, didn't he, in that footnote that you've so objected to, restate and say that he was excluding her not on the basis of religion, but on the basis of the fact that she was, in effect, in-house counsel?
Mr. Rosen: he says that, and all I can say to you is as follows: that order is technically not part of the record. the judge doesn't have a right to respond to our motion, number one. and number two, if -- what happened is this: he makes a comment which is singularly inappropriate.
when he sees a motion to withdraw the reference citing that comment, he goes back and says, "Oh, okay, I'll fix it."
the issue is not whether the ruling is correct. that's not the issue.
the issue is 455, is there a reasonable objective basis for believing that this judge is biased?
The Court: but he could correct it, couldn't he?
Mr. Rosen: huh?
The Court: he could correct the order?
Mr. Rosen: but, judge, when you correct the order after to say, "No, I really meant this. I really meant it was in-house counsel, not outside counsel," you haven't corrected what is a blatant statement of outside counsel who's -- of any outside counsel who's a member of the scientology religion.
It's not limited to Ms. Kobrin. the judge never asked me the question, as Mr. Barry did in 1998, if you remember, when he accused me of being -- excuse me -- said I was a scientologist. if I were a scientologist, I'd be excluded under that order also.
And I don't think it stands the judge in good stead to -- after the issue was brought to the court's attention on a motion to withdraw the reference, he says, "okay, I'll go back and correct it."
The damage is done. you cannot apologize for making the race conscious or religion conscious statement and say, "okay, I'll change my order." that's the problem.
And, your honor, the same thing happened, by the way, on September 11th. when I asked you to read our submission -
The Court: right.
Mr. Rosen: and I want to just say one thing in response to Mr. Zlotoff.
You asked him whether or not we delayed discovery. discovery closed on November of 2000. we were all done.
There was one extension requested by Mr. Zlotoff.
Mr. Zlotoff says we've abused him with discovery and his client.
The docket will show every single motion we made to judge Weissbrodt to compel discovery where Mr. Henson wouldn't give us documents, he wouldn't do this, he wouldn't do that, and we won 100 percent.
To to say we were abusing the debtor -
The Court: doesn't that go a little bit against your theory that he's so prejudiced against you that you can't get a fair trial?
Mr. Rosen: no. I think what happened is after Mr. Henson took off on may 16th, 2001, I think whatever issues existed before that became magnified.
Now here's the appeal, poor Mr. Henson who's a fugitive. he's in Canada. we've driven him out of the country.
And I think that that's really when the issue was magnified.
The Court: okay.
Mr. Rosen: thank you, your honor.
The Court: okay. did you want to -Mr. Rosen: do you want Ms. Kobrin to address the intervention?
The Court: yeah.
Do you want to speak on that briefly?
Ms. Kobrin: your honor, I think that my papers largely address what my position is.
The Court: let me ask one question that is not really specifically relevant. well, it's relevant in a way, but did -- when judge Weissbrodt made his order that certain documents be made available only to outside counsel, was there some protective order signed, or some agreement signed by those that saw the materials? or was that just a rule that -
Ms. Kobrin: it was just a rule.
Mr. Rosen: it was actually consented to because we didn't want to dispute it. but there's no order memorializing it, your honor.
The Court: but normally you would have a situation where, at least from my experience, that if such an order was made, you would sign something agreeing that you would keep that document only within your office or whatever.
Mr. Rosen: right.
The Court: there was no such thing?
Mr. Rosen: no such situation, no formal order at all.
The Court: okay.
Ms. Kobrin: your honor, I'd like to add a couple of things here.
I'd like to add my perspective on this, because I am the person that that order targeted, and earlier on when the order about in-house counsel was made, I disagree with it. but there was nothing personal about it. there was nothing that targeted who I am and what I believe in and the religion that I choose to practice.
This later order, the April 22nd order, was entirely different. and, you know what, judge? my grandfather had his profession taken away from him because he was Jewish. but that was in Berlin and that was in the 1930's.
Now, I'm not saying that my profession was taken away from me. obviously that would be an overstatement of the situation.
But for someone to issue an order saying, "you can't participate in this aspect of this legal proceeding because you choose to be a member of a particular religion" is unheard of. it doesn't happen, ever.
Now, judge Weissbrodt can come back and say, "Oh, gee, that isn't what I meant."
But you know what? this court -- I've been appearing before this court for six years. this court would never say something like that. I don't know of another judge anywhere in this country that would say something like that.
Even if it was a mistake, it's just a little too strange. It's a little too strange that such a mistake would be made by any judge if it was truly a mistake, because that statement is so over the top, to make any ruling and tie it to the religion of the attorney that's involved.
And it's more serious here even than because it's my religion. it's also the religion that my client represents. so it's -- it's a double whammy against both me and them.
And I don't believe for a minute that if there were not some thought in that direction, some bias in that direction, that that statement would have been made in that order.
It's just -- it's too -- it's too strange for a judge to say something like that.
When I researched my motion to intervene, I didn't find any cases addressing such a situation. I don't -- I think it's because it's never happened. it's never happened in another court.
And I know -- it makes me -- the order -that order made me very angry, but it also makes me sad that a member of the federal judiciary would make a statement like that. It's -- it's not acceptable, and it's -- is there an appearance of bias? I mean, I would say there's bias. But is there an appearance of bias? I think there can be no doubt that there's an appearance of bias.
And the fact that he changed it, it doesn't in any way change, in my mind, the mind of my clients, my co-counsel, the fact that that is really what he did mean to say and it is what he said.
And you can't just take it back. It's like little kids that say something, they say, "oh, I didn't mean it."
But, you know, let's look at what we say before we say it.
And I just feel that it's -- it was very, very inappropriate. It upset me very much and it really made me feel like I and my client cannot get a fair shake in front of this judge.
And I don't want to feel that way about any judge. It's not something that I -- as Mr. Rosen said, he doesn't take this lightly. I don't take this lightly at all. as I stand here, I think it's horrendous that I have to be here. I think it's awful that I have to intervene in my client's case to protect my personal interest.
Anyway, that's my view. I don't think there's anything that can change that he said that and there is a viewpoint behind what he said and it was reflected.
As far as the legal issues, I think they're briefed in the papers. I'm not going to go any further with those.
But if you have any other questions, I'd be happy to answer them.
The Court: do you think it would be within my power to issue an order saying that you can participate?
Ms. Kobrin: I suppose you could. I don't see any reason why not.
I'm not sure that that cures the problem.
The Court: oh, I understand what you're concerned about, but I was just -- okay.
Ms. Kobrin: yes.
The Court: all right. let me hear from counsel.
Mr. Zlotoff: your honor, I can't believe what I'm hearing. there was an order, a protective order that was written. it was prepared by Mr. Rosen and his confederate attorneys, and it was exhibit -- it's exhibit 1 to my declaration that I filed herein, and that's the first iteration of the protective order.
The Court: was there one actually signed, in your view?
Mr. Zlotoff: yes.
Mr. Rosen: not that I recall.
Mr. Zlotoff: it was signed in 1999.
The Court: do you have a copy of it?
Mr. Zlotoff: yeah. It's exhibit 1. I filed a declaration.
The Court: I'm not sure I brought in all the exhibits. Would you hand it up to me?
Mr. Rosen: your honor, I must say, on a personal basis, I've never signed this order.
The Court: well, let me -
Mr. Rosen: and this has nothing to do with the issue.
The Court: let me look at it.
(pause in proceedings.)
The Court: okay. Thank you.
Mr. Zlotoff: your honor, as I recall, at the time of that hearing, at the time when the protective order was argued for and against, my recollection is judge Weissbrodt asked Ms. Kobrin what percentage of her time or practice was devoted to scientology religion, and it was something close to 100 percent.
And for that reason, he ruled that she was too close to the, to the substance.
The Court: my memory, and I may be wrong, was it was more like 55 percent, but maybe I'm wrong.
Mr. Zlotoff: but there's no question in my mind that what judge Weissbrodt was doing in that footnote was just carrying through the procedure that we had followed for four years of discovery.
Virtually every time, as I recall, that there was a request for an examination of somebody, we would go over -- it was actually through Mr. Hogan was the point man carrying through with the discovery and making sure that the protective order was complied with.
Actually, this whole business is moot because they declined to take the interrogatories of Mr. Henson, so there's no discovery that they chose to participate in after that April 22nd, April whatever-it-was order.
The Court: well, it's not moot if it shows some sort of bias on behalf of judge Weissbrodt.
Mr. Zlotoff: but the other -- the other reason why I say it's moot is because at the -- at one of the trial setting conferences within the last couple of months, the judge asked me whether I was still holding firm to the protective order with regard to trial and whether Ms. Kobrin would be excepted from participated in the trial and I said no.
So there's really nothing that's constricting Ms. Kobrin at all.
The Court: so you're saying that all documents are now available to Ms. Kobrin?
Mr. Zlotoff: that's right. and that was -- that was put on the record at one of the trial setting conferences.
The Court: okay.
Mr. Zlotoff: thank you.
Mr. Rosen: your honor, can I respond just quickly?
The Court: real briefly.
Mr. Rosen: I want you to understand the sequence here.
On April 22, the judge issues an order that says, not continuing in the past, not in-house counsel, outside counsel.
He's never referred to Ms. Kobrin as outside counsel. he's always talked in terms of her as quasi.the 55 percent that you're remembering has nothing to do with RTC, because the judge just lumps all of scientology together.
Indeed, a very minimal amount of her work is for RTC, a separate California corporation. Most of her work are for other churches of Scientology.
And yet, in the judge's mind, if you work for the Catholic Church and the archdiocese of San Francisco, well, then, it's the same thing as if you work for the catholic school or the catholic college in New Orleans.
The second thing is keeping the sequence in mind, please. If I might, the April 22 order says Ms. Kobrin, outside counsel who's a scientologist, cannot participate.
Within a matter of a couple of days, we write a letter to judge Weissbrodt -- and this is, this is the smoking pistol -- and we say, "we have your order. we're not taking the discovery, and the reason we're not taking it is because we're offended by this order. you've given us the right to take interrogatories instead of a deposition."
In our letter, our bankruptcy lawyer's letter, Ms. Seid's letter to the judge a couple of days later, we say, "we're offended by this order. we're not taking the discovery."
Basically we're saying we'd rather take our appeal rights than have to put up with this. it is not until June that we prepare the papers to file this motion to withdraw the reference. from the middle of April until June, did judge Weissbrodt ever issue an order saying, "my god, that's not what I meant."
The Court: did the letter by Ms. Seid say anything about the exclusion of Ms. Kobrin?
Mr. Rosen: yes. is the letter an exhibit?
Ms. Kobrin: I believe so.
Mr. Rosen: yes. the letter says, "we're not taking this because of what you did." I think it has a couple of reasons why. one of them is the exclusion.
So from the middle of April, or about April 25 or 26, I don't remember the exact date, we filed this motion, I think it's the 24th of June, two months later, and not once did judge Weissbrodt say, "oops, I made a mistake. I take that back. that was a slip. I didn't mean to say that. I meant to say x."
He waits until we file this motion, and after he gets a copy of this motion to withdraw the reference and his order of July 8th, that's when he comes in with all -- I don't mean to be pejorative, but that's when, for the first time, three months after he did this, he says, "oh, I never meant that. I just meant to do it, you know, to do it the way I had done it."
In the face of this order, which is an exhibit that's to -
The Court: can I see it, please?
Mr. Rosen: what's the exhibit number? Ms. Kobrin: it's exhibit 24 to the Warren Mcshane deposition.
The Court: that's the letter from Ms. Seid?
Mr. Rosen: sure (handing).
(pause in proceedings.)
The Court: okay. I'll give you your copy back.
Mr. Rosen: your honor, in answer to the question you asked Ms. Kobrin, from RTC's point of view, if you were to issue an order which says she's allowed to participate in full, that addresses the statement that he made in substantive form. It does not -
The Court: I understand your point.
Mr. Rosen: -- in any way address the bias issue.
The Court: all right. Let's turn to the 54 contempt proceeding.
Ms. Lucas: Keith would like to talk with you about that.
Mr. Rosen: I'm a little confused. Is Mr. Zlotoff going to represent -
Mr. Zlotoff: I don't know.
Ms. Lucas, Mr. Henson's wife, is here and she's asking me to go out in the hall to make a phone call.
The Court: I'll give you a five minute break if you want.
Mr. Zlotoff: thank you, your honor.
The Court: we'll take five minutes.
(whereupon, a recess was taken.)
Mr. Zlotoff: if I may, your honor?
Stan Zlotoff in the civil matter specially appearing for Keith Henson.
I spoke with Keith Henson during the recess, and what he instructed me to advise the court is that for the hearing that was, I gather, scheduled for last Friday, he had an attorney that was, as I understand it, prepared to represent him.
That attorney is not available today.
He, therefore, would request a continuance of this hearing so that he might be able to engage that attorney again to represent him.
I'm a bankruptcy attorney. I really know a tiny fraction of what's involved here. I wouldn't be able to do him much justice. I haven't seen any of their exhibits.
Anyway, that's his request.
The Court: so you're especially appearing just to ask for a continuance, or -
Mr. Zlotoff: yes, your honor. Although if that's denied, he requested that I stay for what limited help I could be.
The Court: are you -- are you going to do that?
Mr. Zlotoff: I would do that, yes.
The Court: okay. I'm not going to grant a continuance. It seems to me that there hasn't been a sufficient showing that Mr. Henson has arranged for counsel.
It also seems to me that he was told before that if he wanted to offer any testimony from him at the hearing, he would have to appear.
I think the facts are fairly clear, at least based on what my understanding is, so we're going to proceed.
To shortcut the proceedings somewhat, it seems to me that we can have Mr.-- whoever you intended offer live testimony from be sworn in and basically state that what they've said in their declaration is true, and then if he wants to cross-examine, he can do so.
Mr. Rosen: that's precisely my intention. I intend to call Mr. Mcshane to simply say that everything in his declaration is true and he adopts it and, were he asked the same questions today, this would be his testimony.
The Court: right.
Mr. Rosen: I would then move in the 17 exhibits to his deposition, excuse me, to his declaration.
We will offer two more exhibits. I think your honor -- I guess they're part of the court file, but I wanted to mark them as exhibits 18 and 19, and those are Mr. Henson's two letters to the court.
To the extent -- we're offering those because they show admissions by Mr. Henson that he made the two postings that are the subject of the contempt.
That's the sole reason that we'll be offering those. As I say, they're already in the court's file. They're addressed to the court. But for the sake of good order, I'll offer them as exhibits 18 and 19.
And then the rest of our presentation is going to be, I guess, as we did last time. I will take the stand for a brief few moments, hopefully, just to testify on the attorneys' fees as I did last time we had a contempt hearing.
The Court: okay. Why don't you go ahead and proceed?
Mr. Rosen: okay. We call Reverend Warren Mcshane.
The Clerk: raise your right hand.
Warren Mcshane, being called as a witness on behalf of the plaintiff, having been first duly sworn, was examined and testified as follows:
The Witness: I do.
The Clerk: thank you.
go ahead and state your full name for the record, please, and spell your first and last name, please.
The Witness: my name is Warren Mcshane, w-a-r-r-e-n, m-c-s-h-a-n-e.
The Clerk: thank you.
Direct examination by Mr. Rosen:
Q Mr. Mcshane, are you the president of religious technology center?
A I am, sir.
Q and did you, on or about the 21st day of June, 2002, execute a declaration in support of RTC's motion for issuance of an order to show cause for civil contempt against Mr. Henson?
A Yes, sir.
Mr. Rosen: your honor, may I approach the witness?
The Court: yes.
By Mr. Rosen:
Q I'll show you that declaration. Is that your signature (handing)?
A yes, it is.
Q and did you swear at the time that everything set forth in that declaration is true and accurate?
A yes.
Q and if I were to ask you the questions to elicit that same information right now, would your answers be the same?
A yes, they would be exactly the same.
Q is there anything in -- no matter what question I asked you, is there anything by way of your testimony set forth in that declaration which would be in any way different today than was in that declaration?
A No, sir.
Q All right. Now, may I direct your attention to exhibits 1 through 17, inclusive, attached to that declaration.
And does your answer in terms of the accuracy and truthfulness of your declaration extend to the exhibits as well to the extent you're authenticating them?
A I just wanted to check one thing, Mr. Rosen. I'll need to have exhibits 13 and 14,
Mr. Rosen. These are ones I received, and they're not attached to this declaration.
Mr. Rosen: may I hand it to the witness?
The Court: sure.
(pause in proceedings.)
The Witness: okay.
By Mr. Rosen:
Q do you have my question in mind?
A yes. Q would you answer it, please?
A the exhibits are accurate with the way I put this together.
Q Okay. Now, directing your attention to exhibit 13, this is a posting by Mr. Henson of October 24th, 2001 which addresses NOTs 56.
A Yes, sir.
Q Does NOTs 56 exist?
A Yes, it does.
Q Do you have a copy of NOTs 56 here to show the court?
A I do, sir.
Q Do you have it up there?
A No. It's in my yellow -- or in my folder there.
Q Is it this one (indicating)?
A Yeah, in that folder right there.
Mr. Rosen: may I approach, your honor?
The Court: yes.
Mr. Rosen: your honor, because NOTs 56 has never been published as a copyrighted work, but also because it has never been misappropriated and never appeared on the Internet, to our knowledge, I would ask that I can, after I examine the witness on it, I show it to you, and I'll be happy to show it to Mr. Zlotoff, but I'm not going to offer it in evidence.
The Court: okay.
by Mr. Rosen:
Q Can you tell me what the document is?
A Well, it's titled confidential NED, n-e-d, for NOTs series 56.
Q And what's the date of that?
A It's dated 20 February 1984.
Q When was the first time you saw that document?
A It would have been shortly after this date.
Q In 1984?
A '84, yes.
Q Has that document ever been published, to your knowledge, on the Internet or misappropriated or stolen by anybody?
A No. the original theft of the NOTs materials was in December 1983. this was written two months after that.
Q Have there been other editions of NOTs written after the theft in 1983?
A Yes, several.
Q okay. Is it your testimony, then, sir, that this is an authentic document created by l. Ron Hubbard?
A it absolutely is.
Q and is RTC the exclusive copyright owner of this document?
A yes, sir.
Q pursuant to the transfer of copyright rights under Mr. Hubbard's will -
A yes.
Q -- that I believe you testified to at greater length in the underlying copyright case.
A exactly.
Q and just -
Not to reiterate it, your honor, I'll ask that it be included. It was testimony on a summary judgment motion by way of affidavit as to the RTC's ownership of the copyright rights. Okay. Now, with respect to -
The Court: do you have any objection?
Mr. Zlotoff: well, I don't have an objection to that.
I have an objection to the introduction of this document as an exhibit, though.
The Court: on the basis of?
Mr. Zlotoff: we can't identify it. Most of it has been redacted. There's no basis upon which to cross-examine him. We don't know whether it's a true document or not a true document.
The Court: he said it was a true document.
Are there redactions on it?
The Witness: no,
Mr. Rosen: no.
Mr. Zlotoff: my copy says, in at least two places, that there's redactions.
The Witness: you're referring to 34, Mr. Zlotoff. This is 56.
Mr. Zlotoff: did you say exhibit 13?
Mr. Rosen: no. 13 is Mr. Henson's posting.
Ms. Kobrin: let me clarify it. What you have there is a redacted version. There is a complete version in the court's file, an unredacted version in the court's file.
Mr. Rosen: but it's not this document. It's the redacted version of Mr. Henson's posting, which includes some materials from -
The Court: well, let me clear things up, I think.
Mr. Rosen: sure.
The Court: 13 and 14 are postings by Mr. Henson. The redactions on the postings were redactions he made, I believe, when he posted it.
Correct?
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Ms. Kobrin: no.
The Witness: no, your honor. It's redactions that I made.
Mr. Rosen: we redacted them and your honor signed an order allowing us to -
The Court: file
Mr. Rosen: right.
The Witness: we filed them under
Mr. Rosen: right. But they don't include any portions of NOTs 56, your honor.
The Witness: no.
The Court: no, I know that. But I was just -- let me look at 13 again.
(pause in proceedings.)
The Court: maybe I'm missing something.
I don't see anything redacted on 13.
The Witness: well, it's not redacted, sir, on the sealed copy. Only in the filed copy.
The Court: I see. So you filed one publicly with redactions and one under seal that's the whole thing?
The Witness: yes, sir.
Ms. Kobrin: judge, maybe I can clarify it. We asked for leave to file this under seal. You ordered that we file those exhibits separately and that we file the rest of the declaration, without the exhibits, not under seal.
So what's in the court file is the declaration, minus exhibits 13 and 14, not -- and none of that is under seal. The separate envelope, what he handed Mr. Zlotoff is just simply the redacted versions of 13 and 14 that we marked as trial exhibits for today.
The Court: okay, I understand.
Ms. Kobrin: it's the separate thing. It's the same thing, but it's just redacted.
The Court: okay. But I assume there's no objection to showing him the unredacted copy for the purposes of this hearing.
Mr. Rosen: correct.
Ms. Kobrin: that's correct.
The Court: okay. I thought we were talking about 56, I think.
Mr. Rosen: right. I think I finished on 56.
And as I say, your honor, we're perfectly happy to present this to you and to Mr. Zlotoff to review. We're not going to formally offer it as An exhibit in this form because we don't want to put it into the court file.
The Court: well, wouldn't a better way of proceeding be to offer it into evidence, but allow it to be held by you?
Mr. Rosen: yes, thank you, your honor.
I offer it into evidence and we'll ask that it be -- that custody and possession of it be directed to, or entrusted to me.
The Court: okay. Any objection to that?
Mr. Zlotoff: yeah, I have to object, your honor.
The Court: why, if you see the document? Mr. Zlotoff: I haven't seen the document.
The Court: no, but I mean, they've offered to show you the document unredacted.
Mr. Zlotoff: again, I apologize, your honor. I know very little. What I understand is that Mr. Henson's being sought to be found in contempt for having published this exhibit 13, the unredacted version.
The Court: no. Exhibit 56.
Mr. Zlotoff: 56? I'm sorry, 56, which is exhibit 13 here?
The Court: no, it's not.
Mr. Rosen: it's not.
Mr. Zlotoff: it's not?
The Court: no. 13 and 14 have been filed under seal in their unredacted
Mr. Zlotoff: okay.
The Court: and you are entitled to look at those documents.
What Mr. Rosen has indicated he would do, at my suggestion, maybe he initially mentioned it, is to show you what Mr. Mcshane has identified as NOTs 56 in unredacted form so that if you want to examine or ask a question about it, you can do so.
But since the document is unpublished, he wants to keep it in their possession so that there's no chance that it would inadvertently get misplaced or taken from the court.
Mr. Zlotoff: I think I understand.
The Court: okay.
Mr. Zlotoff: all right. Then on that basis, I'll allow it.
The Court: okay.
Mr. Zlotoff: and I'll ask some questions about it.
By Mr. Rosen:
Q okay. With respect -- if I may direct your attention, then, to exhibit 14. Your honor, if I may approach, we've made up an exhibit folder for you.
The Court: okay.
Mr. Rosen: the first 16 are the ones that are attached to Mr. Mcshane's declaration, but they now have trial exhibit tabs on them.
And the last two are the ones that I'm going to offer in a moment, and that's Mr. Henson's letters to the court.
Q all Mr. Mcshane, directing your attention to exhibit 14, this is a posting by Mr. Henson dated the 9th of May of this year?
A yes, sir.
Q and in the unredacted portion of this document, the document as it was posted before you redacted it, did it include any portion of NOTs 34?
A yes, sir.
Q did you examine the document as posted by Mr. Henson with the inclusion of NOTs 34, some part of NOTs 34, as against NOTs 34 to see if it was the same?
A yes. Q and what did you find?
A they were exactly the same
-Q okay.
A -- the portions that he took.
Q the portion that he took from NOTs 34 was exactly the same as it appears in NOTs 34?
A yes, sir.
Mr. Rosen: all right. Your honor, we have NOTs 34 if your honor wants to compare it, or if Mr. Zlotoff wants to compare it, and you have the unredacted exhibit 14 which, again, Mr. Zlotoff can see for purposes of establishing that the portion of NOTs 34 which appeared in exhibit 14 is precisely from NOTs 34 verbatim.
The Court: okay. Is -
Mr. Rosen: and I will make the same request with respect to NOTs 34, that I offer it and ask that I be, that it be entrusted to my custody.
The Court: yeah. I think -- isn't that already of record in the other case under seal?
Mr. Rosen: yeah, it's under seal. That's correct. Okay.
Q all Mr. Mcshane -
The Court: or in this case, I mean.
Mr. Rosen: yes, it's the same case, this hearing.
The Court: yes.
By Mr. Rosen:
Q Mr. Mcshane, are you the one from RTC who made the determination and directed that this contempt proceeding be filed against Mr. Henson?
A yes, sir.
Q and you were involved in the trial in 1998 of the underlying copyright infringement case?
A yes.
Q and you were involved in the contempt proceeding previously before this court against Mr. Henson when he posted a portion of the trial transcript?
A yes.
Q so this is the second time that RTC has sought contempt in one form or another against Mr. Henson?
A yes.
Q I want to give you an opportunity, sir, to tell this court, knowing everything we know, including Mr. Henson's current country of residence, if you will, what it is, if anything, that you would like this court to do.
Mr. Zlotoff: I'm going to object, your honor.
Is that relevant to the issue at stake here? What do we care what Mr., what reverend Mcshane has to opine what should be done with regard to Mr. Henson?
The Court: I think that probably is your recommendation. I'm not sure that what he particularly individually wants is relevant, is it?
By Mr. Rosen:
Q well, what do you -- on behalf of RTC, what is the purpose of bringing this contempt proceeding? What do you hope to accomplish, if I can say it that way? I'm not asking you for legal opinions on remedies.
The Court: I'll allow that.
The Witness: okay. Well, ideally, there would be some form of order from this court crafted in a way that would stop Mr. Henson from doing what he's doing.
I mean, it's like, enough is enough. We went through this, we got the verdict against him, we got the permanent injunction. We thought we would be done and that would be it other than, obviously, the bankruptcy proceeding. But he goes on and he's just on and on and on and it just doesn't stop.
So there's got to be some way that we have to get an order that he is going to comply with the law to stop him from harassing us or tweaking us or whatever he does.
By Mr. Rosen:
Q is it your hope or desires to continue these battles with Mr. Henson, "you" meaning RTC?
A no. I thought our battle was over in 1998. At least, that's what we were hoping.
Mr. Rosen: nothing further.
The Court: I just have one question that's a little different subject than Mr. Rosen asked.
The Witness: yes, sir.
The Court: when we set this for a hearing, Mr. Henson said he would send you a copy of the NOTs 56 that he was talking about. Did he do that?
The Witness: not that I know of. I never received anything.
Mr. Rosen: not to me, your honor.
The Court: remember he was to send it to Mr. Hogan?
Mr. Rosen: no. I haven't personally asked Mr. Hogan, but as you can see from the correspondence, he sends everything to Mr. Hogan and Mr. Hogan sends it on to us.
The Court: don't you recall that agreement and order?
Mr. Rosen: yeah, you know, I think I do. And I'm confident that if he had sent it to Mr. Hogan, Mr. Hogan would have sent it on to us.
The Court: okay.
Mr. Rosen: your honor, the reason I say that is because the only attorney for RTC that Mr. Henson ever serves is Mr. Hogan.
The Court: okay.
Mr. Rosen: and therefore, Mr. Hogan's office -- and I saw Leslie -- what's her last name?
Ms. Kobrin: Holmes.
Mr. Rosen: I saw her yesterday afternoon and we got up to speed on whatever Mr. Henson had sent Mr. Hogan, but that was not in there.
The Court: what was the reason, if you know, that NOTs 56 was not listed as one of the specific exhibits to the injunction?
The Witness: well, the exhibit b, your honor -
The Court: right.
The Witness: -- was the list of the 55 issues which were registered with the copyright office.
The Court: 56 is not registered?
The Witness: no, sir. it was never stolen, so we never had to litigate the issue, so we never registered it. it remained as the unpublished work.
The Court: okay.
Mr. Rosen: if I can follow up on that question?
Q the first 55 issues, copies of which were stolen in, did you say 1983?
A December 9th.
Q was they then -- were copyright registrations then filed to protect them in the U.S. copyright office?
A yes.
Q okay. With respect to any works created after that theft, you said NOTs 56 -- you said there were other issues -
A um-hum.
Q -- that were created after that time. Were any of them ever filed for copyright protection, if they have not been published?
A of the NOTs issues?
Q yes.
A no. They're kept unpublished and there's no need.
Mr. Rosen: thank you.
The Court: okay. Any questions?
Mr. Zlotoff: yes.
Cross-examination By Mr. Zlotoff:
Q reverend Mcshane, without divulging the contents of these NOTs 56 and NOTs 34's, could you just explain what a not is? I mean, what is the document that we're talking about that was published?
A well, NOTs is short for new era dianetics for operating thetans. It's a terminology we use in the church. It's a specific level that was developed by Mr. Hubbard.
And there was a series of these issues that he wrote, and the majority of them were written in 1978 and 1979.
That became part of what we call the NOTs pack, and that pack is used to train ministers in our church to deliver that service to our parishioners. That's the pack that was stolen from Denmark in 1983.
Subsequent to that, there were other issues, NOTs issues that were written by Mr. Hubbard. Of course, they weren't part of that 1983 pack, so they weren't stolen.
But they were included in subsequent revisions of the pack to train our ministers.
Q reverend Mcshane, most religions would be happy for dissemination of their religious materials.
What is the damage to RTC or scientology that there's publication of your scriptures, or your religious documents?
Mr. Rosen: objection, we're not trying a copyright case. We're trying contempt.
The Court: well, I think the question,
If I can rephrase it for you, is what loss have you suffered as a result of having it published? Or what expenses did you have to incur because it was published?
I think that's a legitimate question.
The Witness: well, I mean, we're here, so that's an obvious expense of trying to enforce our rights.
By Mr. Zlotoff:
Q I understand that.
A we went through a trial on this specific issue on NOTs 34.
And we do -- and my job specifically is to protect our scriptures. There are -- the majority of the scientology scriptures are publicly available.
There's a percentage that are not, and they're only for the eyes of parishioners who have spiritually matured to be able to see them and understand them.
So when you have your materials, your scriptures stolen and made available to the public, not only do you have a lot of misunderstanding that goes along with what those scriptures mean, the ridicule that goes along with it, but also a lot of work and effort goes into trying to protect them, to get them off the Internet when they appear, and I can't tell you how much work goes into doing that.
Q I appreciate your concern for the spiritual well being for those who might interpret the scripture, but is there any direct, economic disadvantage to RTC other than having to hire attorneys to come in for that motion? Can you articulate any?
A sure. I mean, there are splinter movements out there, what they call free zone splinter groups that -
The Court: let me stop you for one second. Maybe I can cut this short.
Is RTC, other than seeking its attorneys' fees to enforce the order and seeking some prospective remedy to prevent Mr. Henson from publishing in the future, seeking any other economic damages other than attorneys' fees?
Mr. Rosen: no, sir.
The Witness: no, we're not, sir.
Mr. Rosen: no damage claim.
Mr. Zlotoff: thank you.
Q with regard to not 56, how many versions are there that you're aware of that are posted on the Internet?
A NOTs 56?
Q yes.
A I don't know of any that are posted on the Internet.
Q I'm sorry. I thought -
The Court: let me help you out.
The complaint about Mr. Henson's conduct with respect to NOTs 56 is that he posted on the Internet a request for anyone to send him a copy of NOTs 56, not that he posted NOTs 56 itself.
RTC's position is that by requesting a copy of NOTs 56, he was violating a provision of the injunction by seeking to induce someone to publish NOTs 56.
Is that a fair summary?
Mr. Rosen: exactly right, your honor.
Mr. Zlotoff: all right. Thank you.
Q isn't it true that Keith Henson himself manufactured a document called NOTs 56 and intended it as a parody of a scientology n-o-t?
A I know that's what he claims. I don't know that to be true.
Q and you say you have not seen such a parody, a not 56 authored by Henson on the Internet?
A no, I have not, sir.
Q are -- and I heard you testify that the not 56 that you've submitted to the court you claim is a document authored by the scientology religion.
A authored by Mr. Hubbard.
Q by Mr. Hubbard, all right.
Do you remember testifying in another court in 1997; I think in Sweden, that there were only 55 NOTs that were published by the scientology religion?
A no. I testified it was 55 issues that were registered with the copyright office.
Q that didn't mean to exclude that there was a 56 that wasn't registered?
A no. It wasn't part of the case.
Q with regard to not 34, are you aware that that's -- that that particular not is freely available on the Internet?
A well, I'm aware that it has come up frequently on the Internet by some people who identified themselves -- by some people who have done it anonymously and we've taken action where it's come up.
Mr. Zlotoff: all right. Thank you.
The Court: okay. Anything further?
Mr. Rosen: no, your honor.
The Court: all right. You may step down.
The Witness: thank you, sir.
Mr. Rosen: your honor, with your permission I'll take the stand now just on the issue of attorneys' fees and Ms. Kobrin will take the podium, if that's okay.
The Court: all right. Okay.
The Clerk: raise your right hand.
Samuel d. Rosen,
being called as a witness on behalf of the plaintiff, having been first duly sworn, was examined and testified as follows:
The Witness: I do.
The Clerk: thank you.
Mr. Zlotoff: your honor, if I might, could I -- I would like to, after they're done, to call Ms. Lucas as a witness with regard to not 56.
I have not -- I don't have that unredacted copy, and while she's waiting, if she might be permitted to look at it, because I'm going to ask her if she recognizes that.
The Court: we'll take that up after Ms. Kobrin's finished.
Mr. Zlotoff: okay.
Direct examination by Ms. Kobrin:
Q Mr. Rosen, are you an attorney for religious technology center in this contempt matter?
A yes, I am.
Q and have you billed religious technology center for your services?
A yes, I have.
Q okay. Do you have bills that reflect the time that you put in?
A I have bills for the months of June, July and august, and for the month of September through today, and projected indeed through tomorrow.
I have received by telephone from my office the amounts of the charges and fees and disbursements just for the month of September.
For the three months prior, we have actual bills that have been tendered to RTC.
Q and do those bills that were tendered to RTC reflect services only for this contempt proceeding?
A no. We submit a bill each month to RTC for all matters involving Mr. Henson, and that includes the bankruptcy proceeding among other things.
So I have gone through each bill and subtracted out any charges that don't relate directly to this contempt proceeding, as well as disbursements.
Q okay. And can you tell the court, for each of those months that you mentioned, what the amount of the bill was?
A sure. For the amount for the month of June of this year, the amount of the fees billed were $5,073.75.
No disbursements were included for the month of June because it would cost more to figure them out. They were telephone calls and faxes and things like that, so it would have taken more time to compute them.
For the month of July, the fees for this matter were $615. there were no disbursements. For the month of august, the fees were $8,148.75.
The Court: say that again.
The Witness: $8,148.75. I have a summary sheet that I can leave with your honor if you want it.
The disbursements for that month were $3,750, principally air fare, hotels, car service and meals respecting the appearance before this court in august.
For the month of September through the 18th of this month, there were a total of six hours I spent on this matter, and that involves primarily the filings that were made this month. The amount of the fees were $3,690.
For the 19th of September, yesterday, the fees were $4,305.
The disbursements, principally air fare, were $1500.
For today, the 20th, the amount that will be billed for the contempt, and I segregated out the contempt versus the motion to withdraw the reference, there will be a total of four hours billing for the contempt today, the preparation for this hearing and this hearing, and that total is -excuse me, two hours, that total is $1,230.
For tomorrow -- I'm sorry. Four hours, $2,460.
I read the wrong line. 2,460.
For tomorrow, the 21st, there will be a billing of four hours, and that will be my fees in terms of time expended returning home.
The disbursements for this trip are $350 for the hotel for two nights, and that includes meals and car services of $150.
All of the disbursements were divided in half, allocating 50 percent to the contempt proceedings and 50 percent to the proceedings on the motion to withdraw the reference.
The total, then, through tomorrow is $31,272.50.
And I've written out a summary, and if the court wants it, I'd be happy to provide it.
The Court: tomorrow's fees are all attributed to the contempt, or is that split?
The Witness: no. Tomorrow's fees are only two hours on travel home.
The travel home is ordinarily eight hours, but I only bill half time when I travel on the weekend, so I took the four hours I would ordinarily bill on the weekend and divided that by two because half is being allocated to the contempt proceeding and half is being allocated to the motion to withdraw the reference.
The Court: okay. That was my question.
By Ms. Kobrin:
Q did anyone else besides you work on the contempt proceeding?
A yes.
Q can you tell the court who that was?
A well, you and your firm, Moxon & Kobrin, put in some substantial amount of time in developing drafts of certain of the papers that were filed, which I then reviewed and edited.
Mr. Hogan's office put in, I'm not going to say substantial, but I think it was about $2,000 in time related to this contempt proceeding, somewhere around there.
In the interest of taking a very conservative approach, RTC is only requesting the attorneys' fees and disbursements for my firm since that was by far the largest of the bills. Ms. Kobrin: okay. I have no further questions, your honor.
The Court: any questions?
Mr. Zlotoff: yeah, just a few, your honor.
Cross-examination
By Mr. Zlotoff:
Q Mr. Rosen, you knew when you initially started working on this motion that Keith Henson would not appear; isn't that true?
A I'm sorry. What?
Q you knew when you initially started drafting this motion, started working on this motion for contempt that Keith Henson would not be here?
A I expected him not to appear.
Q all right. I gather from the hours and the amounts that you bill at about 600 an hour?
A yes. 615 to be exact.
Q all right. And are you sharing this, this fee with anybody else?
A 190 partners.
Q are you sharing it with any other firm?
A no. All of the fees go to Paul Hastings.
Q all right. And knowing that this was going to essentially run as a, pretty much as a default hearing, there wasn't any person charging a lesser rate per hour that could handle such a hearing?
A no. Because, see, the education curve in getting even somebody from my own firm -- in fact, I have my time sheets and you'll see that, unlike any normal case, I handled all of this myself.
What you're hearing in terms of bills to the client is all my time, because the learning curve to take somebody else from my firm and get them up to speed to be able to participate in this
In a meaningful way after everything that's happened would be far more -- it would cost the client far more.
So it was effectively cheaper for me to become my own associate and write the papers myself.
Q and, Mr. Rosen, isn't this the second contempt hearing that has been brought against Mr. Henson?
A yes, sir.
Q so wasn't it a simple matter to just copy your prior forms and then be done with it?
A no, because it's a different contempt.
The Court: anything else?
Mr. Zlotoff: thank you, your honor.
The Court: all right. You may step down.
Mr. Rosen: your honor, I have -- we have nothing further to present on this, and we rest our case.
In the nature of closing argument, I'll take one minute.
The Court: okay. Let's see if he has any evidence he wants to put on.
Mr. Rosen: oh, I'm sorry.
Mr. Zlotoff: I would like to call Ms. Lucas. I have a few questions.
The Court: okay.
The Witness: I would like to affirm, if I may.
The Court: that's fine.
The Clerk: that's fine. Raise your right hand.
Victoria Arel Lucas, being called as a witness on behalf of the defendant, having been first duly affirmed, was examined and testified as follows:
The Witness: yes.
The Clerk: thank you. Go ahead and have a seat, please.
For the record, please state your full name and spell your last name, please.
The Witness: my full name is Victoria Arel, a-r-e-l, Lucas, l-u-c-a-s.
direct examination
by Mr. Zlotoff:
Q Ms. Lucas, state your relationship to Keith Henson.
A he is my husband.
Q were you sitting in court during the entirety of the proceedings today?
A yes. Well, except for going out to make phone calls.
Q did you hear the discussion regarding something called n-o-t 34?
A NOTs 34, yes.
Q are you familiar with what not 34 is?
A yes, especially after looking at it on the Internet perhaps 10 or 12 times earlier today.
Q and is it accessible freely on the Internet?
A yes. In fact, I have notes that I made looking at the Internet earlier.
If I may refer to them?
Q well, you -- can you recall -
A what I did was I -- I looked in Google, which is a search engine, popular search engine on the Internet, and I asked it for two different ways of looking at it. I'm a trained librarian, so I know about two different ways.
The first time I simply put in n-o-t-s 34.
I got 23,000 results, the first of which was a scholar's commentary which Keith had sent to me as one of his exhibits; that is, he sent me the URL.
I then used quotation marks around NOTs 34, which means that it searches for that phrase rather than for the words separately.
I got 411 results, of which the third was the specific commentary. The first two were from Carnegie melon and the scholar's home page.
I looked at, I don't know, all of the things in Keith's exhibits. He sent me an e-mail with a number of exhibits he said he had sent to the court, and I looked at all of those exhibits, those URL's.
I also looked at URL's, which I found independently.
I didn't see any difference except in the commentary. All of the postings, except the first one, which was from 1994, had commentary with them.
Mr. Rosen: your honor, I move to strike this as irrelevant.
The Court: I'll let her testify.
I do -- to some extent, I agree with you that it's not relevant, but I'll let her testify as to -- if you want her to testify as to a specific document being on the Internet, I think she's got to identify the document that she saw.
Mr. Zlotoff: were you addressing that to me, your honor?
The Court: yes. But I really -- I think the issue with respect to NOTs 34 is not whether it has been successfully kept confidential. The issue is whether or not Mr. Henson violated the injunction which prohibited him from basically directly or indirectly causing a publication of NOTs 34, or encouraging someone else to post or make a copy.
Mr. Zlotoff: all right.
Q are you familiar with something called not 56?
A except for what I heard today, what I'm familiar with is a creation of my husband's that was created using a travesty engine. I saw that on the Internet today.
Q and how did you find it on the Internet?
A he sent me a URL for it.
He had told me about this a few years back -- I don't remember how long it was back -that he was creating a NOTs beyond what he believed to be the current NOTs series, which he believed to be 55.
Mr. Rosen: object to this, your honor.
The Court: this is hearsay.
By Mr. Zlotoff:
Q Ms. Lucas, just of your own knowledge, were you able to find something called a not 56 on the Internet?
A yes.
Q and was that not 56 something that Keith Henson created?
A yes.
Mr. Zlotoff: your honor -
The Court: do you have a copy of it?
The Witness: it's -- I just found it. I thought that he had sent you a series of exhibits for today, and it is in that list. There's a URL in that list.
The Court: I meant a copy of what purports to be NOTs 56, either his creation or -
The Witness: there is a URL for it on the Internet. I did not print a copy.
By Mr. Zlotoff:
Q Ms. Lucas, if you were able to look at the court's not 56, would you be able to tell whether it's the same?
The Court: I don't think I have one. You mean the original?
Mr. Zlotoff: the one that apparently was sent to you under seal.
The Court: if you want to -- do you have the URL?
The Witness: I'm sorry, I don't have it with me. I guess he -
Mr. Rosen: I move to strike this testimony, your honor. This is the testimony of somebody who says "I can't even identify where on the Internet I saw this."
The Court: well, I'm just asking if she knew the address, and she said no.
The Witness: I don't have it with me. It's in my e-mail.
The Court: okay.
Mr. Zlotoff: what I was going to ask is if she might be able to look at the not 56 that's, that purportedly is the scientology not 56 to see whether that's the same one that, that she saw on the Internet authored by Mr. Henson.
The Court: I think, and I may be wrong, that counsel will stipulate that it's not.
Mr. Rosen: yeah. Not only that, if counsel wants to elicit from this witness what this supposed NOTs 56 says, let her describe what it says as opposed to looking at ours.
The Court: yeah, that's fine.
by Mr. Zlotoff:
Q are you familiar with two different versions of not 56?
A no.
Q okay.
The Court: she can describe, if she can, what it was that she saw on the Internet, what it said.
By Mr. Zlotoff:
Q can you identify what you saw that purported to be not 56 that you saw on the Internet?
A all I can say about it is that it had the mark of the usual Hubbard communications office in East Grinstead, which all the NOTs have to my knowledge, and that the rest of it made no sense, but then none of them make any sense to me.
May I describe why it was that Keith was looking for NOTs 56, that he asked somebody to send it to him?
The Court: this would be all hearsay, and he's not here.
I don't have any problem with your testifying, if you saw a NOTs 56 created by him, and you know of your own knowledge, not because he told you, but because you saw it, that he created a NOTs 56.
The Witness: but it's my own knowledge why he was asking for it.
The Court: no, it's not. He told you.
The Witness: no, he didn't tell me. It was obvious to me.
The Court: well, that's your conclusion.
The Witness: you see, when he left the country, he left with a small bag with no papers. Everything that he had was in a computer at home or it was in boxes of papers. He didn't have his own creation. He had virtually nothing.
The Court: okay.
The Witness: he had a few clothes.
The Court: I think RTC agrees that, from what I've just heard Mr. Rosen stipulate to, that what she saw on the Internet was not the NOTs 56 that Mr. Mcshane was referring to.
Mr. Rosen: to the extent she saw anything, because I haven't heard anything that convinces me she saw anything. But if she did, we stipulate it's not ours.
The Witness: there -- all you have to do is go to a Google search engine.
Mr. Rosen: wait a minute, ma'am.
The Court: all right. But it's your view that what you saw is not their creation, it's Keith's creation; right?
The Witness: that's my view, yes.
The Court: okay. Then I don't think there's a disagreement.
Mr. Zlotoff: I don't have any more questions, your honor.
The Court: okay.
Mr. Rosen: I've got a few.
The Court: let's take it easy.
Mr. Rosen: say again.
The Court: let's take it Mr. Rosen: yeah.
Cross-examination By Mr. Rosen:
Q just a few questions. Mrs. Henson, you said that when your husband -
A excuse me. That's not my name. My name is Ms. Lucas.
Q Ms. Lucas, you testified that when your husband left the country, he left his papers, including his writings, at home.
And the home you're referring to is the home you shared with your husband in Palo Alto?
A yes.
Q so that the NOTs 56, if your husband did create something that he called NOTs 56, it would be in those papers in your home in Palo alto? At least, it was at the time he left the country?
A I don't think it ever saw paper. It would have been in his computer, or the computer that had been lent to him that, of course, was still in Palo Alto.
Q okay. So in machine-readable form, the -anything that he created, which he might have called NOTs 56, was in your possession at the home in Palo Alto; right?
A yes.
Q and you could have downloaded that from that computer and brought it here today, couldn't you have?
A he did not know where he had a copy of it and he had posted it, so it was easier to ask someone else to find it than to try to describe to me where it was.
Q well, ma'am, as you described your library skills in terms of searching for something, could you not have checked his computer and the index to the files to find this document that he allegedly wrote entitled NOTs 56? You couldn't do that?
A not when he didn't remember what the title was or where it was stored or what kind of file it was.
Q well, I'm confused about something. He did remember that he called the document NOTs 56; right?
A not necessarily as the title, no.
Q well -
A and he also did not remember if he kept a copy or if he simply posted it.
Q okay. The NOTs 56 that you say you saw on the
99
Internet, this is something you saw today?
A yes.
Q and you haven't seen it before today?
A I don't remember.
Q and you -- Mr. Henson gave you, directed you to the site where you could view this document?
A he directed me to a, to an e-mail that had been sent to him by somebody else who had found it on the Internet.
Q okay. And what site was it that he directed you to?
A it might have been a scientology news group. I don't remember. It's a long URL. I was also able to find it using the Google search engine.
Q so when you say you were able to find it, you actually viewed this document that purported to be NOTs 56?
A I viewed an e-mail that went to him that he had -- where he had asked for the document and somebody had sent it to him and this was what he remembered as being his NOTs 56.
Q okay. But my question is what you yourself viewed on the Internet. Did it include, within the e-mail, the text -?
A yes.
Q -- of this purported NOTs 56?
A yes.
Q how long was it?
A a few paragraphs.
Q how long?
A a few paragraphs.
Q how many?
A I remember about four.
Q and you just viewed this, what, this morning?
A this afternoon earlier.
Q this afternoon. From where?
A at the library.
Q just before coming to court?
A yes.
Q uh-huh. Can you tell me any words or phrases that you remember from the document, ma'am?
A bat's, clusters, the usual stuff about reads and audits and thetans and half blown. I don't know. Words that I've seen in other documents.
I also looked at NOTs 34 this afternoon, so -
Q can you recall, was there any sentence that -other than giving us buzz terms, if you will, is They're any sentence of this document that you looked at a couple of hours ago that you can recall and recite to us?
A I don't remember particular sentences.
What I remember is that the document appears to be about body thetans that are half blown and symptoms of hysterical laughter and other types of laughter that a person who is being audited or other types of symptoms that a person who is being audited will display.
Q okay.
A and so there are some audit techniques that are put forward to take care of the b.t.'s and something about how b.t.'s and clusters reside outside the person and one has to figure out where these b.t.'s and clusters are physically, whether they're inside the person, outside the person, beside the person.
That's what I particularly remember is there was a sentence that was something about you have to determine where the b.t.'s are and this is, this is part of the auditing process.
Q and you read this at the library here in San Jose this afternoon?
A no. This was in Palo Alto.
Q okay. Now, in the library in Palo alto, can you -- does the -- does the machine have a printer attached to it so that one could download and print off what you saw?
A yes.
Q you didn't do that?
A no.
Q is today the first time that you had ever seen the document you just described to us on the Internet?
A it's the first time I remember, but I may have seen it before. I just don't remember. I didn't dare take the time to print anything because they have a half hour limit and there was somebody waiting for the computer.
Q how long does it take to print -- what is this, one page?
A probably.
Q how long does it take to print one page?
A I don't know. I haven't tried it. It was being extremely slow.
Mr. Rosen: nothing else.
The Court: you mentioned that, I thought, and correct me if I'm wrong, that you found NOTs 56 by a Google search.
The Witness: yes.
The Court: what did you put in the Google search?
The Witness: NOTs 56.
The Court: in quotes?
The Witness: um-hum.
The Court: and something came up? The Witness: um-hum.
The Court: the same thing?
The Witness: the same URL, if I remember correctly.
The Court: all right. You may step down.
Anything further?
Mr. Zlotoff: no, your honor.
The Court: okay. You want to make short argument?
Mr. Rosen: real short.
Your honor, I would ask -- as hard as this may be for Mr. Henson and his wife to believe, RTC really is interested in never seeing or hearing from Mr. Henson again.
Unfortunately, it's going to take more than what it took last time to get Mr. Henson to fly right, and I would ask that the -- that your honor exercise his authority to do as follows:
Number one, to grant us our attorneys' fees and expenses in bringing this; and number two, to set a prospective liquidated damage amount, a substantial prospective liquidated damage amount, perhaps a fixed amount rather than the city of Yonkers formula that judge sand came up with years ago would perhaps be a -- would act as a disincentive to future violations, future contempt by Mr. Henson.
I would also ask that your honor refer this matter to either the u.s. attorney, or under the vuitton case in the supreme court, your honor has the authority to appoint somebody as a special prosecutor for a contempt proceeding if Mr. Henson ever returns to this country. I think that it would be appropriate.
To my knowledge, Canada will not expedite him in the face of the pending petition for asylum.
But they will send him back once that petition is denied, and perhaps between the confluence of a potential criminal proceeding and a substantial fine going forward, we can effectuate a sufficient deterrent to set so that we truly get our wish that we never have to see or deal with
Mr. Henson again.
The problem that we have just in monetary relief is as follows: Mr. Henson is in bankruptcy, and your honor, you can order any kind of monetary relief you want. The chances of our ever collecting it against Mr. Henson, even if he were to be returned to the United States, are not real good.
The house is being sold and we're told by Mr. Zlotoff that under the bankruptcy rules, we get nothing.
You know, you sell the house, you pay off the bank on the mortgage, you give half to Mr. Henson's wife because they're co-owners, Mr. Henson gets a modest amount for his exemption, his homestead I think it is, and we get zero.
So the fact of the matter is, to the extent there's a deterrent, maybe some day. But, you know, it is not like issuing a monetary award against somebody who can pay it, but who would be pained to do so.
The Court: is a willful copyright infringement a dischargeable debt?
Mr. Rosen: well, if a chapter 13 plan is confirmed by judge Weissbrodt, it is because, under Chapter 13, there is what's called a super discharge. All debts, including those that would otherwise not be dischargeable another under chapter, are dischargeable.
When Mr. Zlotoff talked about a, a conversion from a chapter 13 to a chapter 7, if it's a chapter 7, it's not a dischargeable debt if the court determines under that supreme court case whose name I can never pronounce from Hawaii, I think, as to what's dischargeable if it's willful, and the supreme court has set out the standards.
We think that those standards comport with the copyright statute.
And, in fact, one of the things that was submitted by Mr. Zlotoff was your jury instruction, "here's what willfulness means under the copyright act."
So that's an open issue. I mean, we think it's non-dischargeable under chapter 7, Mr. Zlotoff thinks it is, but we both agree that it's dischargeable under 13.
And the fact of the matter is that it doesn't make any difference, because whether it's dischargeable or not, as soon as he walks out of the country, this money is sent to him in Canada, that's it. We're never getting our hands on any of it.
The Court: an unrelated question, and I'm going to make some assumptions that are -- I'm going to make some assumptions that are different from this case.
Mr. Rosen: okay.
The Court: but if someone is under an injunction not to induce someone to make a copy of a copyrighted document and they say on the Internet, "If you want to see a full copy of x, go to this particular site."
Mr. Rosen: yes.
The Court: and if that site has enough commentary to make the site fair use, is the person who refers the individual to that site guilty of contempt?
Mr. Rosen: that's a wonderful question, and it is precisely the question I debated with my co-counsel this morning.
I said, "I bet judge white is going to raise this question," because it's an incredibly interesting question.
but my answer is as follows:
If Mr. Henson had posted something and the defense was fair use, the injunction -- we're dealing with an injunction now, we're not dealing with copyright infringement -- if he posted something and, under the injunction, nothing prohibited 107, fair use, then you would have to determine whether or not it would be fair use under the copyright statute, and if it is, then it's not a violation of the injunction.
But the fair use provision only applies to Mr. Henson's conduct so that if Mr. Henson points somebody to a place where they can get a document and download it, they may or may not ever use the commentary that the poster may have as a basis to allege fair use if he were charged with infringement, but that's not a defense to -- it may be a defense to copyright infringement by the poster to whom Mr. Henson refers the person, but that's not a defense to infringement.
And the analogy I'll give you is this: Mr. Henson refers somebody to a site outside the United States. Let us assume, hypothetically in this discussion, that somewhere in Norway there's somebody posting a copy of NOTs 34.
But it's not an infringement under Norwegian law for some reason. I don't know what t is.
You know, is the fact that the site to which the posting is -- to which the person is being referred has a posting which, a, would not violate u.s. law because it's not in the united states; and b, may not even violate Norwegian law, the site of the posting, is that a defense to the violation of the injunction?
And my answer is clearly not.
The injunction says, "You will not post these things. You will not encourage somebody, you will not aid and abet, you will not induce somebody to print copies of these documents."
We're not trying a copyright infringement case. You know, been there, done that.
This is simply a question of whether it's copyright infringement or not. The injunction says you won't do it, and the only limitation of that is the provision of the injunction that says nothing here will prevent Mr. Henson's conduct, or, you know, will make illegal Mr. Henson's conduct if it would otherwise be protected by 107.
The Court: but certainly Mr. Henson could, could he not, could say -- let's assume there was a site that was -- that maybe had one or two small quotes from NOTs 34, but that was it.
And Mr. Henson went on the Internet and says, "go to x site and you can read a commentary on NOTs 34."
That would be perfectly all right?
Mr. Rosen: absolutely. Absolutely.
And in fact, if Mr. Henson had wanted to make this argument, that there is a carry back, that the site that he referred somebody to itself would be fair use if it were before the court on a copyright infringement claim, and then trace back and say, "therefore, if I send somebody to that site, I cannot be guilty of violating the injunction," Mr. Henson should have come in and demonstrated to this court what that site was.
But he didn't, so you don't have any evidence before you that the site to which Mr. Henson referred people to see the, quote, as he described it, the entirety of NOTs 34 would, under any circumstances, qualify under 107 if we were trying an infringement case.
The Court: okay.
Mr. Rosen: but it's a very good question. It was bothering me this morning, too, judge.
The Court: okay.
Mr. Zlotoff: well, your honor, I'm glad you made the comments. I wouldn't have been able to articulate them. That's just from someone who doesn't know anything about copyright law, and that was a troubling part for me too.
If the not 34 is already there on the Internet, are we splitting hairs by trying to find him in contempt for doing something that, under certain defined circumstances, may be fair use and others might be against a court order in the context of a contempt where we have to find a higher standard of bad conduct?
My concern with the not 56 is that we don't know, I gather -- or at least from what I heard, I'm not satisfied that whatever Henson was recommending that people do was viewing one prohibited not 56 or his own parody.
It seemed to me from what I heard that it would be entirely consistent that he told people, with regard to not 56, that he -- that they view his own not 56.
And, again, I don't know.
With respect to contempt, I would urge the court not to find it because it's just not a strong enough case for willfulness.
The Court: okay. Thank you all, and I will get a decision out within the next couple of days.
Mr. Rosen: thank you, your honor.
Mr. Zlotoff: thank you, your honor.
The Court: could I look quickly at NOTs 56?
Mr. Rosen: (handing.)
The Court: okay. Thank you. (Whereupon, the proceedings in this matter were concluded.)
CERTIFICATE OF REPORTER
I, THE UNDERSIGNED OFFICIAL COURT REPORTER OF THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA, 280 SOUTH FIRST STREET, SAN JOSE, CALIFORNIA, DO HEREBY CERTIFY:
THAT THE FOREGOING TRANSCRIPT,
CERTIFICATE INCLUSIVE, CONSTITUTES A TRUE, FULL AND CORRECT TRANSCRIPT OF MY SHORTHAND NOTES TAKEN AS SUCH OFFICIAL COURT REPORTER OF THE PROCEEDINGS HEREINBEFORE ENTITLED AND REDUCED BY COMPUTER-AIDED TRANSCRIPTION TO THE BEST OF MY ABILITY.
LEE-ANNE SHORTRIDGE, C.S.R. CERTIFICATE NUMBER 9595
++++++++++++++++++++++++++++++++++++++++++++++++++
-- LYING IS A SCIENTOLOGY SACRAMENT ASK THEM ABOUT XENU Mike O'Connor <http://www.leptonicsystems.com/>