Hearing the Day Before the Obsidian V. Cox Trial by CrystalCox

VIEWS: 36 PAGES: 19

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 1                 IN THE UNITED STATES DISTRICT COURT

 2                      FOR THE DISTRICT OF OREGON

 3   OBSIDIAN FINANCE GROUP, LLC,     )
     and KEVIN D. PADRICK,            )
 4                                    )
                  Plaintiffs,         ) No. CV-11-57-HA
 5                                    )
           vs.                        ) November 28, 2011
 6                                    )
     CRYSTAL COX,                     ) Portland, Oregon
 7                                    )
                Defendant.            )
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                           PRETRIAL CONFERENCE
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                        TRANSCRIPT OF PROCEEDINGS
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                 BEFORE THE HONORABLE MARCO A. HERNANDEZ
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                    UNITED STATES DISTRICT COURT JUDGE
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 1                           APPEARANCES

 2   FOR THE PLAINTIFFS:   David S. Aman
                           Steven M. Wilker
 3                         Tonkon Torp, LLP
                           888 S. W. Fifth Avenue
 4                         Suite 1600
                           Portland, OR 97204
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     FOR THE DEFENDANT:    Crystal Cox
 6                         Pro se
                           P. O. Box 505
 7                         Eureka, MT 59917

 8   COURT REPORTER:       Nancy M. Walker, CSR, RMR, CRR
                           United States District Courthouse
 9                         1000 S. W. Third Avenue, Room 301
                           Portland, OR 97204
10                         (503) 326-8186

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

 2           THE CLERK:     Your Honor, we're here today on the

 3   case of Obsidian Finance Group, LLC, et al. versus Cox,

 4   Civil Case 11-57-HZ, No. 60 on the docket, plaintiffs'

 5   motion to compel.

 6           Counsel -- well, let's start for the defendant,

 7   because she's pro se.

 8           Please state your appearance for the record.

 9           MS. COX:     Crystal Cox.

10           THE CLERK:     And for plaintiffs?

11           MR. AMAN:     Thank you.    David Aman here for

12   plaintiffs, along with Steven Wilker.

13           THE COURT:     Good morning.

14           Good morning, Ms. Cox.

15           Hang on just a second.       (Pause) So let me outline

16   what I think we need cover this morning, so that we can

17   all get on the same page.    I know the first thing we need

18   to cover is there are some disputes regarding discovery

19   and documents that I asked Ms. Cox to bring with her that

20   had not been produced.    She has some objections to some

21   of those documents, and so we need to get that resolved

22   so we get the document issue resolved.

23           Then you all have a deposition which is scheduled

24   for -- I'm assuming immediately after I'm done with my

25   rulings, you'll start your deposition process.
                                                               4



 1           What wasn't listed on the schedule, but I'm

 2   prepared to do, is also talk about some rulings that I'm

 3   going to need to make before trial, and that has to do

 4   with some defenses that Ms. Cox has raised and asks the

 5   Court to make part of the trial.

 6           And Ms. Cox had raised some objections to some of

 7   the evidence that the plaintiff is intending on

 8   producing.   And I'm prepared to make some rulings on

 9   those because I think it may be helpful, one, in how you

10   conduct your depositions; and, two, under the category of

11   the sooner you know the answers to those questions, the

12   better it's going to be for all of you as regards how

13   you're going to do the wrap-up in preparing for your

14   trial beginning tomorrow morning.   So I'm prepared to

15   give you some rulings on those preliminary issues as

16   well.

17           So let's first begin with the issues that are

18   before the Court regarding discovery.   As I understand

19   it, one of the issues is request No. 1, all

20   communications between you -- referring to Ms. Cox -- and

21   any other person concerning Kevin Padrick, Obsidian

22   Finance Group, David Brown, Summit Accommodators, Inc.,

23   or the Summit Accommodators Liquidating Trust, including

24   without limitation e-mails, handwritten notes of

25   telephone calls or meetings, memoranda or the like.
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 1           Request No. 1 says all communications, obviously

 2   refers to documents.     I'm ordering that request No. 1 be

 3   honored and those documents be disclosed.

 4           The next issue was request No. 3, all

 5   communications between or among you on the one hand and

 6   Stephanie Studebaker, also known as Stephanie Studebaker

 7   DeYoung, Mark Neuman, Brian Stevens, Kyle Cummings, Greg

 8   Fowler, Lynn Hoffman or Lane Lyons, including without

 9   limitation, again, e-mails, handwritten notes of

10   telephone calls or meetings, memoranda or the like.

11           I'm ordering that those matters also be

12   disclosed.

13           Request No. 5 had to do with all communications

14   between you and any other person whom you have made any

15   statement about on any website and from whom you have

16   requested or received any compensation, money or

17   payments, including without limitation e-mails,

18   handwritten notes of telephone calls or meetings,

19   memoranda or the like.

20           I'm denying request No. 5, and I'm not ordering

21   Ms. Cox to disclose those items.

22           Similarly, I'm not requiring her to answer

23   interrogatory No. 3.

24           And that gets us to request No. 6.     And that is

25   all documents concerning any business you operate that
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 1   provides "reputation," in quotes, management, repair or

 2   similar services, and it goes on to say including without

 3   limitation a list of any or all customers or clients of

 4   such business.

 5           As to the first part, any documents concerning

 6   any business you operate that provides reputation

 7   management, repair or similar services, I'm ordering that

 8   that be disclosed.

 9           However, I'm not requiring her to issue a list of

10   any customers or clients of such business.

11           Request No. 8 has to do with all documents

12   showing any any history, listing or log of activity on or

13   accessing -- then it goes to ObsidianFinanceSucks.com or

14   any other blogs, Web pages or websites on which you may

15   have made statements about Kevin Padrick, Obsidian

16   Finance Group, David Brown, Summit Accommodators, Inc.,

17   or the Summit Accommodators Liquidating Trust.

18           I am declining to order Ms. Cox to disclose those

19   documents.

20           That settles the document issue which was before

21   the Court.

22           Moving on, then, to Ms. Cox's defenses, she asked

23   the Court to consider her ability to raise the defense

24   under the Oregon retraction statutes.   Her motion to

25   allow that defense moving forward is denied.
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 1              She asked to be able to raise Oregon's anti-SLAPP

 2   law as a defense.       Her motion is denied.

 3              She asks the Court to issue or to rule on or

 4   allow a claim that she did not have actual malice as a

 5   defense.    That request is denied.

 6              And she is asking the Court to allow a claim of

 7   defense regarding absolute privilege.          That is denied.

 8              I think that takes care of the defenses that

 9   Ms. Cox is intending on raising or was hoping to be able

10   to raise as part of this trial.

11              I next want to move to a couple of other issues,

12   and one is whether the plaintiffs in this case, either

13   one of them, are public figures -- they are not -- and

14   whether or not she is media -- she is not -- as a matter

15   of law.

16              Does that take care of all of the defenses

17   from -- let me start with Ms. Cox -- that you raised,

18   Ms. Cox, from your perspective, that you wished -- You

19   sent me a list of defenses.       I think that I've addressed

20   all of those questions that you posed in your memo.

21              MS. COX:     I'm not sure what I'm allowed to say.

22              THE COURT:     You can say whatever you want to say.

23              MS. COX:     I legally am media.

24              And also, I haven't brought any documents.       I

25   don't feel that it's constitutional.          And so if I need to
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 1   be -- whatever is going to happen to me today because of

 2   that, I just want to state that.

 3             THE COURT:     You didn't bring the documents?

 4             MS. COX:     No.   I don't feel they're

 5   constitutional, that he has a right to know that.          And I

 6   am legally media.      So I don't have any of those

 7   documents.     It's impossible, really, to uncover that many

 8   documents.

 9             THE COURT:     That's a different response.     The

10   second response is different than the first one.

11             MS. COX:     Most of them are -- except for my

12   communications with those involved in Summit, those I can

13   get.    There's hundreds and hundreds of them, like about

14   600 of them.     My phone records and all of my business is

15   pretty much impossible.         I don't keep logs.

16             However, I do not feel that I have to reveal my

17   e-mails from my source.         I am media.   I do make a living

18   as an investigative blogger by law, no disrespect

19   intended.

20             THE COURT:     That's okay.    The thing is, you get

21   to disagree with the judge about how I feel what the law

22   says.   That's completely fine.        You still have to follow

23   the Court's orders, even if you don't agree with them.

24             MS. COX:     Right.    I can't produce those.   I don't

25   really know how to do it, except for I could produce
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 1   e-mails between myself and Mark Neuman and Stephanie

 2   DeYoung; and that I'm refusing, because I don't feel the

 3   plaintiff has any right to those.       It has nothing to do

 4   with the blog post.      It has nothing to do with the

 5   material facts of this case.

 6              THE COURT:   Thank you.

 7              Is there anything else you want to tell me?     I

 8   don't need you necessarily to respond to what Ms. Cox has

 9   told the Court, more as to are there any other blanks

10   that she raised that I need to cover?

11              MR. AMAN:    Your Honor, the one that is somewhat

12   related is the shield law.

13              THE COURT:   It doesn't apply.

14              MR. AMAN:    Thank you.   That was the only issue.

15              THE COURT:   Thank you.

16              Now, Ms. Cox also raised some issues -- and I

17   think we just got those this morning, so if I skip or

18   miss some of them, it's because I'm trying to catch up

19   with the documents that seem to be flowing on a routine

20   basis from both of the parties.

21              (The Court and the law clerk confer off the

22   record.)

23              THE COURT:   All right.    One of the things that

24   the Court had concern -- and I think it was repeated by

25   Ms. Cox -- was the number of exhibits that are from the
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 1   ObsidianFinanceSucks.com website.   And based on my

 2   previous rulings, it is my sense that those exhibits are

 3   not admissible in your case in chief.   If Ms. Cox takes

 4   the stand and testifies in this matter, then they are

 5   admissible.

 6           The reason for that is I have already ruled that

 7   those -- that that blog post was protected, based on my

 8   summary judgment ruling.   But if she takes the stand, all

 9   of those posts come in as evidence of her bias, motive,

10   and prejudice that she may have against Obsidian Finance

11   and the other plaintiff in this case.   So it would come

12   in for those purposes, but it is not coming in in your

13   case in chief.

14           Let's see.   One of your experts -- and I'm sorry;

15   again, I'm trying to catch up -- is an expert witness

16   that you're planning on calling regarding the use of the

17   Internet; the importance of reputation; the

18   reasonableness or the reasonable expectation that

19   potential buyers would use the Internet and websites in

20   order to find out information about Mr. Padrick and

21   Obsidian; and then, finally, the effect on potential

22   buyers that this website has.

23           I don't remember which individual that that one

24   was.

25           MR. AMAN:    Your Honor, that's Robert Madrigal.
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 1              THE COURT:   Okay.   So as to the first three

 2   items, no problem, he gets to testify.      As to the last

 3   one, no.    I believe that, one, invades the province of

 4   the jury; that's their decision.      And, secondly, I can't

 5   imagine how that is not going to be based on some level

 6   of speculation.    You're going to be asking the jury to be

 7   speculating -- the witness as well as the jury to be

 8   speculating on that.     Like I said, I don't have any

 9   problem with the first three points.      The last point is a

10   no.

11              The next thing that I know that I took a look at

12   and that was raised -- actually, I don't know if this one

13   was raised or not, but it is an issue that's been

14   floating around, and it's an issue that I consider to be

15   so obvious that I have to raise it, and that has to do

16   with a couple of your witnesses that are going to be

17   testifying to conversations they had either with -- I

18   think one was with a bank, or perhaps they both were to

19   lenders, about how the effects -- or how the blog posts

20   have affected their business relationships with your

21   client.

22              And to the extent that that testimony is in the

23   realm of hearsay, it's not coming in.      And I recognize

24   that you reported a difficulty, in that the people that

25   you would like to subpoena and have come testify don't
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 1   want to do that because they don't want to incur the

 2   wrath of defendant in this case, but that's not an

 3   exception to the hearsay rule.    It still is hearsay.

 4            So unless you can point to some exception, it's

 5   not coming in.

 6            MR. AMAN:    Thank you, Your Honor.

 7            It's being offered for a non-hearsay purpose,

 8   which is the effect on the listener and the listener's

 9   state of mind.

10            So in these cases, the third parties are

11   reporting that they have a certain reaction to

12   statements, and they're reporting their state of mind.

13   It's not being offered for the truth of the matter

14   asserted.   It's being offered for the state of mind of

15   the third parties who are reporting the information to

16   the witnesses who are going to come testify.

17            THE COURT:   No.   You haven't convinced me.    It's

18   not admissible.

19            If you want them, subpoena them, get them in

20   here.   Then the defendant has the opportunity to

21   cross-examine on the issue which you really want, and

22   that is "We've lost business as a result of this."       You

23   need to have a person come in and testify that they made

24   a business decision based on that blog, and that business

25   decision is "We're not going to Obsidian," and that's why
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 1   you're entitled to damages.

 2              And I'm giving this to you now, so if you want to

 3   rush out and put a subpoena in those individuals' hands,

 4   go ahead and get that done.

 5              As to her other objections, they're overruled.

 6   Let's look at the -- as far as witnesses go.

 7              Let's look at exhibits.    We've already talked

 8   about the Obsidian -- those exhibits that come off of the

 9   ObsidianFinanceSucks.com website and my ruling on those.

10   As regards the other exhibits, I need to spend more time,

11   because I just got those objections, and I haven't had a

12   chance to look at them carefully.      So that you can kind

13   of go forward, it's my sense that they will be overruled,

14   but I haven't looked at them carefully enough to know the

15   answer to that.

16              Let me just look to see if there are any other

17   pretrial things that I'm able to give you right now.

18              (The Court and the law clerk confer off the

19   record.)

20              THE COURT:   I think that's all I have right now

21   that I'm ready to give you.

22              Is there anything else?    Let me turn first to the

23   plaintiffs.    Then I'll turn to Ms. Cox.

24              MR. AMAN:    Your Honor, I guess this is somewhat

25   of a new issue, in a sense, now that we've heard the
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 1   reaction from Ms. Cox to the Court's order earlier that

 2   certain documents be brought to the courthouse that were

 3   not, that are now not available for her deposition, which

 4   is going to take place right now, one day before trial.

 5   We're not going to have an opportunity to look at those

 6   documents.

 7           And, you know, given everything that's taken

 8   place up until now and the clarity of the Court's order,

 9   we'd ask that the Court entertain an oral motion for

10   sanctions at this point.

11           THE COURT:    What is it that you're asking me to

12   do?

13           MR. AMAN:     I think the Court should issue a

14   default order against the defendant.

15           THE COURT:    Yeah, that's not going to happen.

16   Have you got any other ideas?

17           MR. AMAN:     She hasn't submitted a witness

18   statement of any kind that I've seen.

19           THE COURT:    I take it there are no witnesses,

20   other than herself.

21           MR. AMAN:     But we don't even know what her

22   testimony is going to be, because she didn't submit a

23   statement of her own.    And we don't have any way to

24   challenge her communications with Ms. Studebaker, for

25   example, with a source of information that she got,
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 1   because she didn't bring the documents that she was

 2   required to bring.

 3            THE COURT:    Why would her statements to

 4   Ms. Studebaker come into evidence?        Aren't they hearsay?

 5            MR. AMAN:    We will try to keep them out, Your

 6   Honor.   But she's purporting to offer what she learned

 7   from Ms. Studebaker as the basis for what she's going to

 8   testify to at trial, we think.        We don't know yet,

 9   because she hasn't offered a statement.

10            So I think we're prejudiced by the fact that she

11   has not brought the documents that she was specifically

12   ordered to produce.

13            THE COURT:    If there is another sanction that

14   you'd like the Court to consider, other than ordering

15   that you win, I will certainly entertain one.

16            MR. AMAN:    At a minimum, Your Honor -- and I'll

17   think about it.     At a minimum --

18            THE COURT:    Why don't you do that.     Why don't you

19   think about it --

20            MR. AMAN:    We'll do that.

21            THE COURT:    -- and then come up with some

22   alternative ways.     There may be some issues that are

23   resolved in favor of your side as opposed to entering a

24   blanket default on this.

25            Ms. Cox, it's now your turn.       Is there anything
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 1   else you want to say?

 2           MS. COX:     I don't have a testimony.   I guess I

 3   was confused on that.    I sent my trial exhibits.   That is

 4   my defense, the source of my post.     I gave them my trial

 5   exhibits.   And he has given me less than 1 percent of

 6   what I asked for, too.    I just -- I'm willing to deal

 7   with whatever consequences with that.

 8           I do have one question about tomorrow, what he's

 9   allowed to bring.    He's accusing me of extortion over and

10   over and over.   And if he's allowed to put in e-mails and

11   accuse me of extortion, which is a crime, do I have any

12   rights on that tomorrow in a criminal justice system?

13           THE COURT:     This isn't a criminal case.

14           MS. COX:     But extortion is a crime.

15           THE COURT:     That's right.   And you have the right

16   to remain silent if you think you may be subject to

17   criminal prosecution, which means that you don't have to

18   testify if you don't want to, by the way.     He may call

19   you as a witness; and if you raise that as a defense in

20   this case, then you take the Fifth Amendment, and we'll

21   see what happens at that point.

22           MS. COX:     The jury -- my concern is what the jury

23   will think with him accusing me of extortion and

24   providing e-mails that were before this blog post that

25   aren't relevant to this case.
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 1              THE COURT:     I can't really advise you about that.

 2              Are you planning on testifying in this case?

 3              MS. COX:     No, I hadn't planned on it.

 4              THE COURT:     Are you planning on calling her as a

 5   witness in this case?

 6              MR. AMAN:     I think it's unlikely.   If we do offer

 7   testimony, it will probably be from her deposition, but I

 8   don't know.    It hasn't been taken yet.      But that's my

 9   plan at this point, Your Honor.

10              THE COURT:     Okay.   So we may not have an issue on

11   the Fifth Amendment, in that case.

12              MS. COX:     Thank you.

13              THE COURT:     Is there anything else you want to

14   tell me?

15              MR. AMAN:     I guess two last things, Your Honor.

16              THE COURT:     Sure.

17              MR. AMAN:     We do have a list of the objections

18   that we would make to her exhibits.

19              THE COURT:     Oh, yeah.   I hadn't quite gotten to

20   those yet.    Do you have the list with you?

21              MR. AMAN:     I do.

22              THE COURT:     I know that a lot of her exhibits

23   were just kind of statements of law and stuff, and those

24   obviously are not going to be coming in.

25              MR. AMAN:     I think we can probably take them up
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 1   in the morning.    I think they should be pretty

 2   straightforward.      I can't find them right now.   I wasn't

 3   necessarily prepared to talk to it.

 4             THE COURT:    They seem pretty straightforward to

 5   me.   Yours were a little more subtle than the ones she

 6   raised.   I think hers were a little easier to resolve.

 7             MR. AMAN:    My last question is for the

 8   deposition.    Logistically, how would you like us to

 9   handle it?    Where would you like it to take place?

10             THE COURT:    Right here in the courtroom.

11             MR. AMAN:    Fair enough.

12             THE COURT:    You have the afternoon.

13             And while you're taking your depositions, I will

14   look through and see what -- research for myself what the

15   appropriate sanction may be for violating the Court's

16   order.

17             All right.

18             MR. AMAN:    Thank you, Your Honor.

19             THE COURT:    We're in recess.

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22             (Proceedings concluded.)
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 1                         --oOo--

 2

 3           I certify, by signing below, that the

 4    foregoing is a correct transcript of the record

 5    of proceedings in the above-titled cause.   A

 6    transcript without an original signature,

 7    conformed signature or digitally signed signature

 8    is not certified.

 9

10

11
      /s/ Nancy M. Walker                12-27-11
12   ______________________________      _______________
     NANCY M. WALKER, CSR, RMR, CRR      DATE
13   Official Court Reporter
     Oregon CSR No. 90-0091
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