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1 UNITED STATES BANKRUPTCY COURT

2 CENTRAL DISTRICT OF CALIFORNIA - SAN FERNANDO VALLEY

3 --oOo--

4 In Re: ) Case No. 1:13-bk-14649-VK


)
5 MARILYN S. SCHEER, ) Chapter 7
)
6 Debtor, ) Woodland Hills, California
) February 28, 2018
7 ------------------------------X Wednesday, 1:30 P.M.
SCHEER, )
8 )
Plaintiff, )
9 )
v. ) Adv. No. 1:13-ap-01241-VK
10 )
STATE BAR OF CALIFORNIA, )
11 et. al., )
)
12 Defendants. )
------------------------------X
13
PLAINTIFF’S MOTION FOR
14 LEAVE TO JOIN ADDITIONAL
PARTY DEFENDANTS PURSUANT
15 TO FED. R. BANKR. PRO.
7020
16
PLAINTIFF’S MOTION FOR
17 ORDER:
(1) REQUIRING COMPLIANCE
18 BY THE STATE BAR WITH FED.
R. BANK. PRO. 7030(b)(6);
19 (2) REQUEST FOR SANCTIONS
AGAINST STATE BAR AND ITS
20 COUNSEL; AND
(3) ALLOWING AMENDMENT TO
21 DEPOSITIONS TOPICS

22 DEFENDANT’S MOTION TO
COMPEL THE CONTINUED
23 DEPOSITION OF MARILYN S.
SCHEER
24
Proceedings produced by electronic sound recording;
25 transcript produced by transcription service.
1 TRANSCRIPT OF PROCEEDINGS
BEFORE THE HONORABLE VICTORIA KAUFMAN
2 UNITED STATES BANKRUPTCY JUDGE

3 APPEARANCES:

4 For Debtor/Plaintiff: MARILYN S. SCHEER, Pro Se


13340 Burbank Boulevard, #11
5 Sherman Oaks, California 91401

6 For Defendants: SUZANNE C. GRANDT, ESQ.


(Via Telephone) The State Bar of California
7 180 Howard Street
San Francisco, California 94106
8
Court Recorder: Patty Garcia
9 U.S. Bankruptcy Court
Central District of California
10 21041 Burbank Boulevard
Woodland Hills, California 91367
11 (855) 460-9641
12 Court Transcriptionist: Ruth Ann Hager, C.E.T.**D-641
Ben Hyatt Certified Deposition
13 Reporters
17835 Ventura Boulevard
14 Suite #310
Encino, California 91316
15

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1 SAN FERNANDO VALLEY, CALIFORNIA, WEDNESDAY,

2 FEBRUARY 28, 2018,

3 1:38 P.M.

4 --oOo--

5 THE COURT: Here for 1:30 is Scheer v. State Bar

6 of California.

7 Could we have appearances, please?

8 MS. SCHEER: Good afternoon, Your Honor. Marilyn


9 Scheer, plaintiff, appearing pro se.
10 MS. GRANDT: Good afternoon, Your Honor. Suzanne
11 Grandt from the State Bar of California on the phone
12 appearing on behalf of the State Bar defendants.
13 THE COURT: So we have continued some of the
14 hearings to assess whether to change the tentative rulings
15 and also one was, I think, we were going to talk about the
16 date for the deposition for Ms. Scheer.
17 MS. SCHEER: And the State Bar.
18 THE COURT: Right. So we’ve looked into the --
19 as far as #5.00, it’s the motion for leave to join

20 additional party defendants and we -- no, well, the Court

21 in the revised tentative explains why for the three

22 defendants -- the three additional defendants that were

23 identified by the State Bar the Court is fine with the

24 proposed second amended complaint. But for the other

25 three, the Court doesn’t feel there’s been enough of a


Page 4

1 basis at this time for Mr. Babcock, Mr. Miller and Mr. Yee.

2 So -- and we’d talk about how we’re going to

3 defer to deciding on whether to strike those defendants

4 from the amended plan until plaintiff deposes the State

5 Bar’s Rule 30(b)(6) witness and that we would want to have

6 a -- the proposed second amended complaint supplemented

7 with additional allegations based on, I guess, that Rule

8 30(b)(6) deposition. And then we’ll assess whether the


9 plaintiff’s allegations against these parties outside Rule
10 882. So that’s the change that we made.
11 MS. SCHEER: May it please the Court?
12 THE COURT: Yes.
13 MS. SCHEER: I’d like to address the subject of
14 sanctions under Section 105 just so my position is --
15 THE COURT: So, well --
16 MS. SCHEER: -- is clear.
17 THE COURT: Well, we go on the order like because
18 right now we’re on #5.00.
19 MS. SCHEER: Isn’t that the --

20 THE COURT: Plaintiff’s motion for leave to join.

21 Oh, oh, right because we also discussed how, right, we

22 weren’t going to include the sanctions because I’ve already

23 ruled on it.

24 MS. SCHEER: Okay. Just so my position is clear.

25 THE COURT: Okay.


Page 5

1 MS. SCHEER: I stood here on May 28th, 2014 and

2 made the argument that contrary to the State Bar’s

3 position, my administrative suspension that is transferred

4 to an active enrollment was not disciplinary. The State

5 Bar’s position was more than a legal argument. It was a

6 violation of Rule of Professional Conduct 5-200(b) which

7 states that, “A member in presenting a matter to a tribunal

8 shall not seek to mislead the judge by an artifice or false


9 statement of law or fact.”
10 The State Bar knew from its own rules that my
11 administrative suspension was not disciplinary and I have
12 copies of the Rules with me now. May I please approach?
13 THE COURT: Okay. Yes.
14 MS. SCHEER: I have a copy for the State Bar, but
15 they’re not here.
16 (Pause)
17 State Bar Rule of Procedure 5.106(b)(1) expressly
18 excludes inactive enrollment as a prior record of
19 discipline. In addition, Rule 5.371(a) states that:

20 “Following rules do not apply in a proceeding on

21 an inactive enrollment motion under these rules, rules

22 that by their terms apply only to disciplinary

23 proceedings.”

24 Yet based on the position of the State Bar, this

25 Court found my administrative suspension disciplinary on


Page 6

1 May 28th, 2014 and therefore no-dischargeable under Section

2 523(a)(7). This was wrong and I knew it was wrong. It

3 took me two years of my life and resources I did not have

4 to correct this erroneous conclusion based on the false

5 position advanced by the State Bar. And I have the page

6 from the transcript of May 28th, 2014 where the Court found

7 that my suspension was disciplinary. May I approach?

8 THE COURT: Yes.


9 MS. SCHEER: My papers went all on the ground I
10 think.
11 (Pause)
12 It is page 4 of the transcript where the Court
13 finds at line 24 that my suspension is disciplinary, and it
14 was due solely to the misrepresentation of the State Bar’s
15 attorneys.
16 In Scheer v. State Bar Judge Owens stated on
17 page 10 of the opinion -- and I have a copy of that
18 opinion. May I approach?
19 THE COURT: Sure. Yes, you may.

20 MS. SCHEER: On page 10 of the opinion, Judge

21 Owens stated:

22 “The debt in this case was purely compensatory,

23 an arbitration fee award between Scheer and her former

24 client. It was not disciplinary. To categorize the

25 fee dispute in this case is non-dischargeable simply


Page 7

1 because the State Bar expresses a strong regulatory

2 interest in a particular industry would render any

3 attorney/client dispute non-dischargeable.”

4 That’s how absurd the State Bar’s position was.

5 The issue of whether my suspension was disciplinary was not

6 a close call. It clearly was not. The issue was whether

7 it was a fine, penalty or forfeiture for purposes of

8 Section 523(a)(7).
9 I was going before a hostile panel and they would
10 have found against me if they could have. Judge Owens said
11 as much, but they could not. Although Judge Owens did not
12 say this, it’s true. Adopting the State Bar’s position
13 would have rendered Section 525(a) a nullity.
14 Judge Owens then went on to state:
15 “Moreover, the State’s logic would extend to fee
16 disputes in any closely regulated in industry;
17 doctors, dentist, chiropractors, barbers, locksmiths,
18 real estate agents acupuncturist, tattoo artists and
19 so on.”

20 The Ninth Circuit then concluded that:

21 “Consistent with Kelly, Finley and the plain

22 language we hold that the debt at issue in this case

23 was dischargeable and does not qualify under Section

24 523(a)(7)’s non-dischargeability exception.”

25 I have litigated with the State Bar for five


Page 8

1 years in various forms and I have seen how its attorneys

2 distort the law. State Bar has little respect for the law.

3 Its attorneys have consistently taken the position that the

4 law, and particularly the Bankruptcy Code, does not apply

5 to the State Bar because the state agency whose staff

6 believes that they’re above the law.

7 Here, State Bar counsel failed to even observe

8 the State Bar’s own rules. There was no valid argument to


9 make, but its attorneys thought that the Court would defer
10 to the State Bar as a state agency and that’s what
11 happened.
12 I was a practicing bankruptcy attorney for more
13 than 30 years with an unblemished record before I got
14 caught up in the State Bar system. The State Bar’s
15 disregard for the Bankruptcy Code is nothing short of
16 outrageous. Unless its attorneys are held to account,
17 these types of violations will continue against other
18 members who are less driven or capable challenging them
19 than I am.

20 I am not doing this as a lark. This litigation

21 has absolutely drained me, but I am appalled that a state

22 agency can abuse and take advantage of the system in this

23 way. Hardly anyone ever dares challenge the State Bar

24 because it is so powerful and that’s why its attorneys are

25 intent on absolutely crushing me. My friends are amazed


Page 9

1 that I’m still standing.

2 I was wrongfully suspended under the fee

3 arbitration enforcement provisions of the State Bar act. I

4 was indisputably indigent from winding down my firm over a

5 period of two years without collecting any income, but my

6 license was suspended anyway in clear violation of

7 California law.

8 Attorneys are not supposed to have their licenses


9 suspended if they are unable to pay the refund. The
10 evidence was uncontroverted I was indigent. Yet even
11 though the State Bar knew my administrative suspension was
12 erroneous, they piled on, by ignoring my demand for
13 reinstatement after my bankruptcy filing on July 12th,
14 2013, in making the clearly bogus argument that my
15 suspension was disciplinary.
16 A suspension under Business and Professions Code
17 62(o)(3)(D)(ii)(b) is debt collection mechanism like a
18 garnishment or wage levy. It is not regulatory in nature.
19 In was not required to file probation reports or anything

20 like that after my administrative suspension.

21 Once the award is paid or is no longer

22 enforceable, the State Bar must, not may, must reinstate an

23 attorney’s license according to Business and Professions

24 Code 62(o)(3)(D)(4). Judge Owens saw through the State

25 Bar’s ruse. He found it was not disciplinary and the State


Page 10

1 Bar can point to nothing to support its position. It’s

2 attorneys relied solely on its status as a state agency.

3 I’ve seen the State Bar’s attorneys in action.

4 They are not concerned with justice or due process but are

5 out to win at any cost in order to increase the power and

6 funding of the State Bar. I keep saying the attorneys in

7 the state deserve better. They really do.

8 The State Bar can get away with anything because


9 the California Supreme Court for more than 18 years, by
10 virtue of California Rule of Court 916, which I am
11 challenging in a Section 1983 proceeding, has turned a
12 blind eye to the State Bar’s actions. There’s no check on
13 what the State Bar does. I am shocked that the federal
14 courts are allowing the State Bar’s attorneys to get away
15 with such an intentional misrepresentation. It is wrong
16 and it’s an affront to our legal system.
17 State Bar staff is not infallible, although its
18 attorneys think they are merely by virtue of their status.
19 They should be sanctioned for making this misrepresentation

20 to the Court. Perhaps the Court is not offended, but I

21 certainly am that they would try to pull this on a court.

22 In my day no one would have ever been allowed to get away

23 with that.

24 Thank you.

25 THE COURT: Ms. Grandt, do you want to respond to


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1 Ms. Scheer’s position?

2 MS. GRANDT: Just briefly, Your Honor. We agree

3 with your tentative. We believe that this issue has

4 already been briefed for the Court and the Court has

5 already looked at it, as the Court addressed in its

6 tentative ruling. And I think, you know, Ms. Scheer

7 insults to the State Bar aside, it would be a, you know, a

8 harsh precedent and a harsh way of the judicial system if


9 parties were sanctioned for making legal arguments before a
10 court that were later reversed on appeal.
11 You know, that is what happened here. The State
12 Bar made a good-faith legal argument that was fully briefed
13 and supported and all the rules and laws were put before
14 the Court. There was nothing hidden. And it just happened
15 to be reversed and it was a novel issue. It has not been
16 decided.
17 This issue had never been before the State Bar
18 before and now, in the future, we have clarification and
19 we’ve changed our policies and, you know, we’re going

20 forward. And I think, you know, Ms. Scheer is very unhappy

21 with the Bar and it’s unfortunate but that should not be a

22 reason to take it out on -- on this case when it is not

23 sanctionable conduct.

24 MS. SCHEER: The issue of whether an active

25 enrollment was disciplinary is not a novel issue. It


Page 12

1 isn’t. Very clear-cut. Inactive enrollments, suspensions

2 under 62(o)(3)(D)(b)(ii) are not considered --

3 MS. GRANDT: It not --

4 MS. SCHEER: -- disciplinary --

5 MS. GRANDT: -- it had never been decided.

6 MS. SCHEER: -- their own rules state that.

7 Ms. Grandt and I had a conversation in June of 2017 where

8 she agreed that inactive enrollments are not disciplinary.


9 That was not the issue before the court.
10 In the Ninth Circuit, the issue before the court
11 was whether it was a fine, penalty or forfeiture and I
12 reiterate, and Judge Owens said this, if he could have
13 found against me, he would have but he could not have based
14 on the language of the statute and the Ninth Circuit’s
15 prior decision in Finley.
16 The issue of whether my suspension was
17 disciplinary was clear-cut. It clearly was not
18 disciplinary based on the State Bar’s own rules, which I
19 have given the Court. That was a false representation to

20 this Court and the Court found that my suspension was

21 disciplinary based on the arguments of the State Bar. This

22 Court certainly did not get it from me. And based on that

23 finding, the Court found that the debt was accepted from

24 discharge based on 523(a)(7).

25 The State Bar simply cannot be allowed to be so


Page 13

1 cavalier and careless in making arguments before a federal

2 court. This is offensive. And at the very least, Your

3 Honor, I should be able to assert that as a cause of

4 action. If the Court wants to find against me, there’s

5 nothing I can do about that, but I certainly should be able

6 to allege that as a cause of action. It was a

7 misrepresentation based on their own rules.

8 I have been in the State Bar system. I know my


9 inactive enrollment is not treated as a prior record of
10 discipline. It is not disciplinary. The State Bar knew
11 that and I knew it and Judge Owens stated it very clearly.
12 That was not a subject that was in dispute.
13 THE COURT: But, you know, that -- as the Court
14 noted in the tentative we’ve already denied a motion for
15 sanctions which was based on the same situation, so it’s
16 already -- now it’s law of the case. I mean we already
17 ruled that isn’t sanctionable and --
18 MS. SCHEER: The Court can change --
19 THE COURT: -- you know, so --

20 MS. SCHEER: -- the law of the case at any time.

21 THE COURT: So no, I can’t change the law of the

22 case. That’s why it’s called law of the case.

23 MS. SCHEER: No, it can be --

24 THE COURT: I, you know, it’s --

25 MS. SCHEER: -- changed. It’s an --


Page 14

1 THE COURT: -- and there’s -- your -- it’s

2 described in the ruling, as the Court looking at it in

3 terms of the function of the agency, not in terms of the

4 agency’s definition of disciplinary or not. The Court

5 looked --

6 MS. SCHEER: There is nothing --

7 THE COURT: -- at it in terms of the --

8 MS. SCHEER: -- regulatory --


9 THE COURT: Ms. Scheer, please stop. As is noted
10 in the tentative, the Court assessed it from the context of
11 the function of the agency. Now, the Ninth Circuit -- and
12 the district court affirmed. The Ninth Circuit -- do not
13 talk because I am not done.
14 The Ninth Circuit said that that isn’t accurate,
15 that the Court shouldn’t look at it in terms of the
16 function of the agency and -- and you quoted from the
17 opinion why the Court shouldn’t look at it that way, okay?
18 But the Court has made a determination earlier, when you
19 brought your sanctions motion earlier before you asked to

20 amend your complaint, that this was not sanctionable

21 conduct and now that is this Court’s decision.

22 If you want to do something about it, you can

23 appeal because that is this Court’s decision. It is not

24 sanctionable and you’re welcome to appeal it, but we’re not

25 going to -- and you’re welcome to appeal the decision that


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1 you can’t modify the complaint to add in a request for

2 sanctions that the Court has already denied.

3 MS. SCHEER: This Court was harsh on me on

4 May 28th, 2014 when I was right. I tried everything in my

5 power to prevent the Court from making reversible error and

6 I’m doing it again. Your interim decision is interlocutory

7 and interlocutory decisions -- I can’t remember the rule

8 now, it’s in the 50s, but Rule of Civil Procedure says the
9 court can change the ruling at any time. The Court was
10 misled. I do not know why --
11 THE COURT: The Court --
12 MS. SCHEER: -- the Court --
13 THE COURT: -- doesn’t feel --
14 MS. SCHEER: -- is making this --
15 THE COURT: -- that it was misled.
16 MS. SCHEER: -- excuses.
17 THE COURT: The Court didn’t feel that it was
18 misled. The Court’s assessment is that it was looking at
19 it in terms of the function of the agency and there was

20 no -- nothing misleading about the -- the idea was the

21 function of the agency was to police attorneys. And maybe

22 this wasn’t a disciplinary kind of police action, but it

23 was about like if an attorney doesn’t pay back -- and I

24 understand your position that they should have -- they

25 should have waived the requirement for you to repay the fee
Page 16

1 that was owed through the arbitration because of indigency,

2 but that’s not something this Court is assessing. The

3 Supreme Court -- I mean, right? The -- you already

4 appealed that to the California State Bar, right?

5 MS. SCHEER: And they denied it.

6 THE COURT: Right.

7 MS. SCHEER: As they have --

8 THE COURT: So I’m not -- right.


9 MS. SCHEER: -- every single opinion --
10 THE COURT: Right. And you --
11 MS. SCHEER: -- for 18 years. I have not --
12 THE COURT: Right.
13 MS. SCHEER: -- gotten a judicial --
14 THE COURT: And --
15 MS. SCHEER: -- determination.
16 THE COURT: Right. And you have litigation
17 against the State Bar about that, which is fine. As far
18 as, you know, that that was -- that your position is the
19 State Bar didn’t approach it correctly and this Court is

20 now not going to revisit that issue. That’s something that

21 you’re litigating with the State Bar as -- on the sense of

22 whether you should have been relieved from the obligation

23 to repay the retainer because of your indigency --

24 MS. SCHEER: It’s California law.

25 THE COURT: -- despite the arbitration rule.


Page 17

1 MS. SCHEER: California --

2 THE COURT: Okay.

3 MS. SCHEER: -- law says this.

4 THE COURT: Okay. Well, that’s not -- well, of

5 course this Court is going to be ruling on that, right?

6 That is not -- so the thing now is whether the State Bar is

7 suggesting that their conduct was an exception to the stay

8 or an exception to the discharge, whether the way the court


9 assessed -- whether the court was misled.
10 And this Court didn’t -- made its decision not
11 based on what the -- how the State Bar -- the State Bar
12 rules defined some set of procedures disciplinary and some
13 set as not disciplinary. It was based on the goal of the
14 State Bar in bringing the litigation and bring -- and
15 implementing the inactive enrollment. And that’s what the
16 Ninth Circuit said was inapprop -- was wrong. But I don’t
17 think the Court was misled.
18 So you think the Court was misled. Fine. The
19 Court has already ruled -- so, one, the court assessment

20 was it was not misled, which you think is a sanctionable

21 conduct. That wasn’t the basis of the -- that wasn’t what

22 happened. And, two, we’ve already ruled on it. So we’re

23 not going to allow -- after already ruling on it we’re not

24 going to have it in the complaint all over again. So the

25 state -- and really --


Page 18

1 MS. SCHEER: The court --

2 THE COURT: And there’s nothing more to be said

3 about it because anything you say now is the same thing

4 you’ve said before and -- and similar to the things you’ve

5 said in the motion that was denied, so we’re going to have

6 to end there as far as this Court’s concerned.

7 Now what do we -- we’re going to -- so why don’t

8 we talk about the deposition date. Have you guys discussed


9 the deposition date for the State Bar’s Rule 30(b)(6)
10 witness?
11 MS. SCHEER: I have --
12 THE COURT: Okay.
13 MS. SCHEER: I have another point to cover, Your
14 Honor. And this --
15 THE COURT: All right. Well, I don’t want to
16 hear any more about the sanctions issue because the Court’s
17 ruled on it. It’s done. I’m done on it.
18 MS. SCHEER: And the Court is wrong.
19 THE COURT: Okay.

20 MS. SCHEER: And you will be reversed a second

21 time in the same case --

22 THE COURT: Okay.

23 MS. SCHEER: -- in which case I will move to

24 recuse you because you are clearly biased. You have

25 allowed the State Bar to get away with things I have never
Page 19

1 seen happen in 30 years. If I was in front of any other

2 judge, this would not be happening.

3 Now I would like to comment on the Court’s

4 statement that it is questionable whether the State Bar’s

5 general counsel was aware of my bankruptcy. May I proceed?

6 Because you seem to have --

7 THE COURT: You can -- well, you can file. You

8 can prepare another modified complaint because what’s in --


9 isn’t because and we’ve already talked about the -- we
10 already discussed here that -- about the decision and how
11 just because somebody’s at the top of the -- you know, of
12 the chain --
13 MS. SCHEER: That is what I would --
14 THE COURT: -- as far as supervisory --
15 MS. SCHEER: -- like to comment on.
16 THE COURT: -- responsibility does not mean that
17 they had personal knowledge. And --
18 MS. SCHEER: That’s --
19 THE COURT: So --

20 MS. SCHEER: -- that’s what I’d --

21 THE COURT: -- and, in fact, it’s unlikely.

22 MS. SCHEER: -- like to comment on. That’s what

23 I’d like to comment on.

24 THE COURT: Okay.

25 MS. SCHEER: I’d like to comment on the Court’s


Page 20

1 statement that it is questionable whether the State Bar’s

2 general counsel was aware of my bankruptcy. The Office of

3 General Counsel indisputably received notice of my

4 bankruptcy filing and took no action despite my demands.

5 The General Counsel’s Office is not large. It

6 has a staff of 20. According to the General Counsel’s job

7 description, which was attached as Exhibit 2 to my

8 supplemental declaration in support of plaintiff’s motion


9 for leave to join additional parties filed January 5th,
10 2018, Exhibit 2, page 4, states that it manages a staff of
11 20 and is responsible for hiring and overseeing outside
12 counsel.
13 So even if Tracy McCormick and/or Daniel Yee did
14 not notify the General Counsel of my bankruptcy, which is
15 difficult to believe since the State Bar functions pretty
16 much is like a paramilitary operation, General Counsel was
17 certainly aware of it in November 2013 when outside counsel
18 was hired for my adversary action.
19 General Counsel approves the payment of the

20 bills, which in --

21 THE COURT: Is that --

22 MS. SCHEER: -- my case --

23 THE COURT: I don’t believe that’s in the

24 complaint. I don’t believe any of these things you’re

25 saying are in the complaint.


Page 21

1 MS. SCHEER: I have --

2 THE COURT: I don’t believe that the size of the

3 agency is in the complaint, in the proposed modified

4 complaint. I don’t believe like the fact that the General

5 Counsel has to specifically approve any fees or

6 specifically approve the engagement of outside counsel or

7 specifically on top of every Bar member who files for

8 bankruptcy.
9 I, you know, it’s, you know, General Counsel is
10 a -- has a lot to do like -- and not necessarily intimately
11 involved with every --
12 MS. SCHEER: Well, I have --
13 THE COURT: -- litigation in which the --
14 MS. SCHEER: -- and I can --
15 THE COURT: -- State Bar’s involved.
16 MS. SCHEER: I can put this in my complaint.
17 THE COURT: All right. Well, that’s what --
18 MS. SCHEER: Because Richard --
19 THE COURT: -- you need to do.

20 MS. SCHEER: -- Richard Stanazi (phonetic), who

21 was Assistant General Counsel says that in his 30 years at

22 the State Bar, General Counsel -- and I have the email with

23 me -- always made the decision to hire outside counsel.

24 And he said in this particular case he was not involved and

25 it went through General Counsel. So General Counsel --


Page 22

1 THE COURT: So I -- these are things you should

2 put in your complaint.

3 MS. SCHEER: I will definitely put it in my

4 complaint.

5 THE COURT: Okay.

6 MS. GRANDT: Your Honor, can I just respond

7 quickly? That goes to pre -- you know, she -- you know, in

8 terms of who had what authority, we have -- we -- and I can


9 explain, if you would like, how we got the information for
10 our interrogatory. But we specifically told her that these
11 people did not know about her bankruptcy, had no
12 involvement in anything. And we told her that in her
13 interrogatory, which is why I think it’s -- your ruling was
14 fair that if she has a 30(b)(6) witness and she finds out
15 more. But her putting in that they knew about something on
16 allegation --
17 THE COURT: Well, right now --
18 MS. GRANDT: -- upon information --
19 THE COURT: -- the thing was she has a --

20 MS. GRANDT: -- and belief is false.

21 THE COURT: -- particular proposed amended

22 complaint. What we’ve said is this proposed complaint is

23 not going to -- we are not going -- the allegations are

24 insufficient with respect to those individuals. Just

25 because --
Page 23

1 MS. GRANDT: Right. But --

2 THE COURT: -- they’re in the -- just because

3 they’re General Counsel or because they’re -- they have a

4 supervisory role over other counsel in --

5 MS. GRANDT: But I’m saying if she adds --

6 THE COURT: -- the State Bar and we said that

7 after she takes the 30(b)(6) because, you know -- because

8 the first 30(b)(6) witness was not sufficiently prepared


9 and knowledgeable, that she -- that we’ll defer on deciding
10 about those, Mr. Babcock, Mr. Miller and Mr. Yee, until she
11 deposes the State Bar’s 30(b)(6) witness.
12 So what I think it --
13 MS. GRANDT: Yeah. I just want to --
14 THE COURT: -- would be an appropriate use of our
15 time right now is to discuss when is that going to take
16 place.
17 MS. GRANDT: I just wanted to clarify that you
18 didn’t mean she was going to be allowed to amend it before
19 then. That’s all based on your back and forth with her.

20 That’s all.

21 THE COURT: All I’m saying --

22 MS. GRANDT: I just wasn’t --

23 THE COURT: Right. We’re not going to be

24 reviewing any -- until there’s the 30(b)(6) deposition --

25 the 30(b)(6) and until after that, she amends the


Page 24

1 complaint, then modifies again, that we’re not going to be

2 ruling on it again.

3 MS. GRANDT: Okay. That’s all. Thank you.

4 MS. SCHEER: I should not have to prove my

5 allegations --

6 THE COURT: You don’t have to prove them.

7 MS. SCHEER: -- to seek --

8 THE COURT: You need to --


9 MS. SCHEER: -- to seek --
10 THE COURT: -- have sufficient --
11 MS. SCHEER: -- a leave --
12 THE COURT: -- allegations.
13 MS. SCHEER: -- to amend. I should --
14 THE COURT: You just --
15 MS. SCHEER: -- not have to --
16 THE COURT: Ms. Scheer --
17 MS. SCHEER: -- prove them.
18 THE COURT: -- we just discussed why all the
19 things you’re saying from the podium aren’t in the

20 complaint. Those are the kinds of things that need to be

21 in the complaint when you’re talking about somebody at the

22 top because they have supervisory authority.

23 So when are we going to have -- so when is this

24 deposition going to happen? Have you all talked about it?

25 MS. SCHEER: Of course not.


Page 25

1 THE COURT: Okay. Well, then I didn’t -- okay.

2 So -- well, you know, I have a new schedule. We extended

3 the discovery schedule and you’ll have to figure it out

4 that way.

5 MS. GRANDT: We’re ready to talk about proposed

6 dates. You know, we -- I know Ms. Scheer had wanted to

7 have the dates on the same day for her deposition and for

8 the 30(b)(6) witness, which is fine with us, but we need


9 time, you know, to get -- I’m assuming Ms. Scheer is going
10 to send out an amended notice of deposition topics, so we
11 just need sufficient time to -- to get that and prepare our
12 witness.
13 So I was thinking of maybe the -- the first --
14 sometime like April 9th, and if that’s not sufficient the
15 last week of March. We have a vacation planned the first
16 week of April, so I can’t do it that week.
17 MS. SCHEER: I moved over the President’s Day
18 weekend to a temporary location. I don’t even know where
19 I’m going to be.

20 THE COURT: So --

21 MS. SCHEER: I don’t know.

22 THE COURT: Okay. Well, Ms. Grandt, I suggest

23 that whoever -- or I can’t remember who we -- who’s the new

24 point person now.

25 MS. GRANDT: It’s Mr. Shap (phonetic). Yeah,


Page 26

1 Mr. Shap.

2 THE COURT: That Ms. Scheer will work with

3 Mr. Shap about setting these depositions, or she’ll do

4 whatever notice she needs to do.

5 MS. SCHEER: There are --

6 THE COURT: And we’re going to get -- we’ll need

7 to get an order “to grant the motion to join allow the

8 plaintiff to file the proposed second amended complaint


9 with the modification we discussed, which is plaintiff must
10 exclude Kenneth Bacon and Joseph Dunn from the caption.
11 Plaintiff must delete the following paragraphs or portions
12 of paragraphs, paragraphs 41 to 43 for 951 and paragraph 3
13 of pages 16 and 17 as the following language about under
14 Section 105 for the deliberate, willful, intentional
15 actions to misrepresent the plaintiff’s administrative
16 suspension of the bankruptcy court disciplinary when it
17 clear was not and I knew it was not.”
18 And we said we’re going to defer deciding on
19 Mr. Babcock, Mr. Miller -- Mr. Miller and Mr. Yee. So, Ms.

20 Scheer, can you submit the order within --

21 MS. SCHEER: I don’t understand --

22 THE COURT: -- seven days?

23 MS. SCHEER: -- the Court’s ruling.

24 THE COURT: Okay.

25 MS. SCHEER: I --
Page 27

1 THE COURT: Well --

2 MS. SCHEER: I have a question.

3 THE COURT: The Court will prepare the order

4 then.

5 MS. SCHEER: Okay.

6 MS. GRANDT: Your Honor, can I --

7 MS. SCHEER: The Court --

8 MS. GRANDT: -- ask you a question?


9 MS. SCHEER: -- will not answer my questions when
10 I don’t understand something. I understand -- that’s
11 bias --
12 THE COURT: Well, you know --
13 MS. SCHEER: -- against me.
14 THE COURT: It’s not bias.
15 MS. SCHEER: When I have a --
16 THE COURT: But, you know the thing is --
17 MS. SCHEER: -- question and you won’t answer it?
18 THE COURT: -- if you can’t -- what’s your
19 question?

20 MS. SCHEER: Well, you won’t even allow me to ask

21 it. I’m confused.

22 THE COURT: What is confusing about it?

23 MS. SCHEER: I don’t know, based on what

24 Ms. Grandt just asked you -- and I’m a human being, Your

25 Honor.
Page 28

1 THE COURT: I understand --

2 MS. SCHEER: A quite stressed --

3 THE COURT: -- that you are.

4 MS. SCHEER: -- human being, and I apologize but

5 I have been put through the mill by the State Bar.

6 My question is whether I should file this amended

7 complaint. I don’t understand. You said --

8 THE COURT: No, not until after the 30(b)(6).


9 After the 30(b)(6). That’s what we say. We say when you
10 have more, when you -- when you have -- if you -- it says
11 “The Court will defer deciding whether to strike these
12 defendants from the amended complaint until plaintiff
13 deposes the State Bar’s Rule 30(b)(6) witness. The
14 plaintiff supplements the proposed second amended complaint
15 with additional allegations. The court will reassess
16 whether the plaintiff’s allegations against these parties
17 satisfy Rule 8(a)(2).”
18 MS. SCHEER: Your Honor, I previously requested
19 because of my age that you not speak so quickly. It is

20 very difficult for me. I’m trying very --

21 THE COURT: Well, I’m reading --

22 MS. SCHEER: -- hard to follow.

23 THE COURT: -- from what it says. I’m reading --

24 MS. SCHEER: Yeah. But --

25 THE COURT: -- what it says.


Page 29

1 MS. SCHEER: -- and I had a question about

2 whether --

3 THE COURT: Okay. Well, what don’t you

4 understand about what’s written?

5 MS. SCHEER: Whether -- that’s insulting to me.

6 Please. What I’m -- if I knew what it meant, I wouldn’t

7 ask the question. My question was, you asked me to take

8 out those paragraphs makes it sound like I should be filing


9 it now with those paragraphs out and --
10 THE COURT: Right.
11 MS. SCHEER: -- so am I to file it now without
12 those paragraphs --
13 THE COURT: If you want to go ahead --
14 MS. SCHEER: -- and then to file another one?
15 THE COURT: -- against the -- yes, because we
16 agreed for you to join additional party -- three additional
17 party defendants. If you want to go ahead with the three
18 additional party defendants, yes.
19 MS. SCHEER: But I cannot include those other

20 ones at --

21 THE COURT: Right.

22 MS. SCHEER: -- this point?

23 THE COURT: Yes. Correct.

24 MS. SCHEER: Well, that was definitely not clear

25 to me.
Page 30

1 THE COURT: Okay.

2 MS. SCHEER: So then I will have -- after the

3 30(b)(6) then I will be allowed to include other

4 allegations and these other parties, but these parties

5 should not, Yee and Babcock --

6 THE COURT: You had six --

7 MS. SCHEER: -- should not be in now?

8 THE COURT: -- you had named six --


9 MS. SCHEER: Yes.
10 THE COURT: -- individuals, okay. We authorized
11 three, which the State Bar identified as being -- and
12 knowledge -- having information about your bankruptcy
13 filing. So those three, at this time you could prosecute.
14 You could add those in --
15 MS. SCHEER: And serve them.
16 THE COURT: -- okay, and serve. The other three,
17 the allegations in the complaint are not sufficient.
18 MS. SCHEER: And even if I wanted to supplement,
19 you won’t want -- you don’t want me to do that now?

20 THE COURT: Well, it’s -- the reason is because

21 you could have included -- if you’re -- it’s not based off

22 the 30(b)(6). You could have included it already. Well, I

23 mean you have a deficient proposed modified complaint.

24 MS. SCHEER: And I have right to leave to amend,

25 so I want to amend it.


Page 31

1 THE COURT: Well, you know, then you have to file

2 another one. File another motion to amend then because for

3 right now what we’ve said is after the 30(b)(6) deposition

4 if you have more information to add into the complaint

5 based on the 30(b)(6) witness, the proper 30(b)(6) witness,

6 then file another modified one.

7 MS. SCHEER: There hasn’t even been a motion to

8 dismiss. I mean we’re at the point where I’m asking --


9 THE COURT: Ms. Scheer, it’s the ruling of the
10 Court. I’m not going to argue it with you with you.
11 MS. SCHEER: It’s clearly bias, Your Honor.
12 Clearly bias.
13 THE COURT: Okay.
14 MS. SCHEER: Whatever the State Bar wants, you
15 grant them.
16 THE COURT: That --
17 MS. SCHEER: The rules apply --
18 THE COURT: -- that’s exactly -- right.
19 MS. SCHEER: -- one way to them and one way to

20 me.

21 THE COURT: Ms. Scheer --

22 MS. SCHEER: That very much --

23 THE COURT: -- we just authorized you --

24 MS. SCHEER: -- is clear.

25 THE COURT: -- to add three more defendants. How


Page 32

1 is that --

2 MS. SCHEER: But not --

3 THE COURT: I’m not going to argue with you about

4 bias.

5 MS. SCHEER: -- not the people who are --

6 THE COURT: If you believe the court’s --

7 MS. SCHEER: -- in charge.

8 THE COURT: -- biased despite all the times the


9 Court’s ruled in your favor, that’s fine. I understand
10 that you don’t agree --
11 MS. SCHEER: I’d like to know --
12 THE COURT: -- with some of the decisions --
13 MS. SCHEER: -- when that was.
14 THE COURT: -- about the Court -- well, just now.
15 MS. SCHEER: I’d like to know when that was.
16 THE COURT: Or what about the motion to compel
17 the State Bar to have another 30(b)(6) witness?
18 MS. SCHEER: You could hardly deny that based on
19 that unprepared witness, the witness who’s ostensibly

20 prepared by Ms. Grandt and the one who testified no

21 decision was made.

22 MS. GRANDT: Your Honor, I have that -- I just

23 want to clarify that in the -- in the event, you know,

24 after the 30(b)(6) witness goes forth and Ms. Scheer wants

25 to amend her complaint that she will have to file another


Page 33

1 motion to amend. Is that correct?

2 THE COURT: No, not then.

3 MS. GRANDT: No, she won’t. She can just amend

4 it with new --

5 THE COURT: Well, she’s --

6 MS. GRANDT: -- allegations?

7 THE COURT: -- going to have to --

8 MS. GRANDT: Do you know what I mean?


9 THE COURT: -- well --
10 MS. GRANDT: Like what --
11 THE COURT: -- well, we’ll --
12 MS. GRANDT: -- what’s the process?
13 THE COURT: -- just -- I think what we’re going
14 to do is we’re saying the court will defer deciding whether
15 to strike these defendants until she deposes the State
16 Bar’s Rule 30(b)(6) witness.
17 MS. SCHEER: Okay. So --
18 MS. GRANDT: Okay.
19 THE COURT: That’s what we said.

20 MS. SCHEER: -- for now --

21 MS. GRANDT: And then but have (indiscernible) --

22 MS. SCHEER: -- I can amend my complaint with the

23 additional allegations and then if I need to put in more

24 information I can.

25 MS. GRANDT: No. But I mean I’m not sure of the


Page 34

1 process. I’m a little confused, Your Honor, about what --

2 after the 30(b)(6) witness is over what’s the process for

3 then you deciding whether now she has enough. Like is she

4 just going to file it or does she have to file another

5 motion to -- to amend? Does that make sense?

6 (Pause)

7 I think I might have cut -- can you hear me?

8 THE COURT: Yes, we hear you.


9 MS. GRANDT: Oh, sorry, sorry. I didn’t hear
10 anything, so I wanted to make sure I was still on the line.
11 So I just mean I’m just a little confused --
12 THE COURT: I think --
13 MS. GRANDT: -- about the process.
14 THE COURT: I think maybe the thing to do is at
15 this point we should continue the hearing on the motion for
16 leave to join additional party defendants until after the
17 30(b)(6) deposition. And then she’s going to be submitting
18 a --
19 MS. GRANDT: Okay.

20 THE COURT: -- a proposed amended complaint based

21 on the allegations from the 30 -- based on the 30(b)(6)

22 deposition.

23 MS. GRANDT: Okay.

24 THE COURT: So we’ll --

25 MS. GRANDT: That sounds fine.


Page 35

1 THE COURT: -- just continue this hearing. So

2 when -- so that’s why --

3 MS. GRANDT: Okay.

4 THE COURT: -- we need to know when the 30(b)(6)

5 deposition’s going to take place so we can continue the

6 hearing to an appropriate time.

7 MS. GRANDT: Well, I just said we could do it

8 like the week of April 9th.


9 THE COURT: Well, she saying --
10 MS. GRANDT: Does that work?
11 THE COURT: -- that’s too soon for her I think is
12 what she’s saying.
13 MS. GRANDT: Okay. So when? We’re available any
14 time after -- just Ms. Scheer should -- any date you want,
15 Ms. Scheer. We’re -- we are flexible.
16 MS. SCHEER: Okay. I went through this with the
17 Court on September 13, 2017 where I made it very clear that
18 I wanted a well-qualified witness who can answer my
19 questions and we’re going to go through this again and I’m

20 going to get somebody who’s not qualified. I’m going to

21 have to pay for a court reporter.

22 THE COURT: Well, we may --

23 MS. SCHEER: I’ve been down --

24 THE COURT: -- assess it differently --

25 MS. SCHEER: -- this road before.


Page 36

1 THE COURT: -- that time. We may assess it

2 differently that time. If it happens again, we’ll --

3 MS. GRANDT: Well, they have --

4 THE COURT: -- assess it based on that time. So

5 when -- what’s the timing that works for you?

6 MS. SCHEER: Well, I wish I knew where I’d be

7 living. I don’t even know if I’m going to have a roof over

8 my head.
9 THE COURT: Uh-hum. Well, do you want to
10 continue the hearing for three months and you -- maybe in
11 that time you’re going to have a better sense of what
12 good -- what’s good timing for you?
13 MS. SCHEER: Well, I don’t know what happened to
14 the mediation. I don’t know what happened to that. If
15 there’s going to be any mediation, that could have a --
16 could have a bearing on this, too. I mean, responding to
17 what the State Bar is doing because now --
18 THE COURT: Well, I know --
19 MS. SCHEER: -- I have another issue that has

20 been come up and I told Mr. Shap, whose not on the --

21 MS. GRANDT: Can we figure out the date first,

22 Ms. Scheer, before going to --

23 MS. SCHEER: No, Ms. Grandt --

24 MS. GRANDT: -- (indiscernible) --

25 MS. SCHEER: -- because I do not know where I’m


Page 37

1 going to be living. I don’t even know if I will be alive.

2 If I have to live on the street, I think I will be lasting

3 ten minutes. So then this case --

4 MS. GRANDT: So --

5 MS. SCHEER: -- will be over and you should be

6 very happy.

7 MS. GRANDT: So, Your Honor, I will just send a

8 notice of deposition then for Ms. Scheer and --


9 MS. SCHEER: No, you won’t! That is
10 objectionable and that is not what the Court ruled. We
11 have to agree on this together.
12 MS. GRANDT: But you will not agree with me.
13 Like, Your Honor, what do -- I’ll defer to you on what we
14 should do because it’s very difficult to -- to, you know --
15 we have difficult time, you know, coming up with a
16 resolution together.
17 MS. SCHEER: Well, you should have produced a
18 qualified witness on October 10th when the Court ordered
19 it. You were the one who prepared the person and you did

20 not prepare the person. It is your fault.

21 MS. GRANDT: Your Honor, would it -- can we seek

22 permission to just notice a deposition date for Ms. Scheer

23 in the next two months? Is that reasonable?

24 MS. SCHEER: No, because the State Bar’s

25 deposition has to be on the same date. That was already


Page 38

1 agreed to. You are trying to bully me and intimidate me

2 like you have done for the last six months.

3 THE COURT: We’re just going to set a date for

4 the depositions and if for some reason it can’t take place

5 on that date you’ll file something to excuse you from it.

6 So --

7 MS. GRANDT: Thank you, Your Honor.

8 THE COURT: -- that’s what we’re going to do


9 because that’s what we did with the State Bar to get the
10 October date. So we’ll -- so what date the State Bar was
11 saying? Any date after, right, April 9th?
12 MS. GRANDT: April 9th.
13 THE COURT: That was the date that worked --
14 MS. GRANDT: Every -- any date --
15 THE COURT: -- for the State Bar.
16 MS. GRANDT: -- after -- any date after that. So
17 any date from the 10th on is fine with us.
18 MS. SCHEER: I have a Ninth Circuit --
19 THE COURT: Do you have a preference --

20 MS. SCHEER: -- brief --

21 THE COURT: -- for day of the week?

22 MS. SCHEER: I have a Ninth Circuit --

23 THE COURT: Yes.

24 MS. SCHEER: -- brief --

25 THE COURT: Uh-hum.


Page 39

1 MS. SCHEER: -- due because Ms. Bar (sic) -- Ms.

2 Grandt and her --

3 THE COURT: Uh-huh.

4 MS. SCHEER: -- person and the other co-counsel

5 have requested repeated extensions. So now my brief is

6 going to be due, not because of me but because of them, in

7 that time frame and that’s --

8 THE COURT: Okay.


9 MS. SCHEER: -- exactly what she’s --
10 THE COURT: Well, then we --
11 MS. SCHEER: -- looking at.
12 THE COURT: -- won’t use that timeframe. So --
13 MS. GRANDT: I’m not looking --
14 THE COURT: -- what if we do --
15 MS. GRANDT: -- at anything.
16 THE COURT: I mean what if we do -- why don’t we
17 do -- we’ll just do -- what about May 1st?
18 MS. GRANDT: That’s fine.
19 THE COURT: We’ll do May 1st. So it’ll be

20 May 1st, which is a Tuesday. So May 1st will be the date

21 for the State Bar’s 30(b)(6) witness and will also be

22 Ms. Scheer’s deposition.

23 MS. SCHEER: And the State Bar’s deposition

24 should go first.

25 MS. GRANDT: That’s fine.


Page 40

1 THE COURT: Fine.

2 MS. GRANDT: Doesn’t matter to us.

3 THE COURT: Okay. So we’ll say we’re granting

4 the motion to compel the deposition. It’ll be on May 1st.

5 We need the --

6 MS. SCHEER: Okay.

7 THE COURT: -- order needs to be --

8 MS. SCHEER: And I can send --


9 THE COURT: -- and do we get -- we didn’t get the
10 order on that yet, correct? So we need the movant. So
11 depo on May 1. So that’s #7.00 on the calendar. And for
12 #6.00, that’s the motion to require compliance with Federal
13 Rule of Evidence 30(b)(6) and allow amendment to deposition
14 topics.
15 Then we had it, you know -- we have the revised
16 tentative on that. So that -- so we’re going to compel the
17 State Bar to produce another witness to be deposed. That’s
18 going to be on May 1st.
19 MS. SCHEER: It’s going to include the responses

20 to their interrogatories, which was previously agreed to on

21 September 13th for --

22 THE COURT: So we need you to submit an order for

23 that, okay?

24 MS. SCHEER: Okay.

25 THE COURT: For #6.00.


Page 41

1 MS. GRANDT: So with do -- are we going to be --

2 Ms. Scheer, are you going to be giving a new amended

3 deposition topics before that or are we just going off the

4 other ones and what you added?

5 THE COURT: Well, we allowed amendment to

6 deposition topics.

7 MS. GRANDT: Right. But I’m just wanted to make

8 sure that we’re not expecting to get new deposition topics


9 before the -- before the -- I mean that’s fine if she does.
10 I just wanted to clarify what was going on.
11 THE COURT: Well, the Court is allowing plaintiff
12 to amend the fact to add additional defendants.
13 MS. GRANDT: Okay.
14 THE COURT: So we said the State Bar’s --
15 MS. GRANDT: Right.
16 THE COURT: -- policies and procedures regarding
17 a member’s bankruptcy filing may be relevant to the issues.
18 MS. GRANDT: Right.
19 THE COURT: And so the Court is allowing

20 plaintiff to amend the deposition categories to include

21 questions regarding the advisory and the State Bar’s

22 general policies and procedures regarding bankruptcy.

23 MS. SCHEER: Plus the responses to the

24 interrogatories --

25 THE COURT: Right.


Page 42

1 MS. SCHEER: -- that was agreed to previously.

2 THE COURT: Okay. So you need to --

3 MS. GRANDT: Okay.

4 THE COURT: So, anyway, that’s part of -- so

5 you’re going to need to get that out before May 1st, right?

6 MS. SCHEER: I will include it in the order

7 because that’s the only way the State Bar --

8 THE COURT: You’re going to include the amended


9 deposition categories?
10 MS. SCHEER: No. I’m going to include in the
11 order that the --
12 THE COURT: But when are you going to get --
13 MS. SCHEER: -- deposition topics --
14 THE COURT: -- when are you going to --
15 MS. SCHEER: -- will include --
16 THE COURT: Okay.
17 MS. SCHEER: -- A, B, C because without a court
18 order the State Bar will try to distort or come in filing
19 motion for another protective order. I know how they

20 operate.

21 THE COURT: Okay. So, Ms. Grandt, she’s going to

22 put it in the order what --

23 MS. GRANDT: That’s fine. I just wanted to

24 clarify what the deposition topics were or if she was

25 adding anything else. That’s all. I just wanted to make


Page 43

1 sure we were all --

2 THE COURT: Well, she’s --

3 MS. GRANDT: -- on the same page.

4 THE COURT: -- going to put it in the order, the

5 deposition --

6 MS. GRANDT: Perfect.

7 THE COURT: -- the amended deposition --

8 MS. GRANDT: That is fine.


9 THE COURT: -- categories.
10 MS. GRANDT: Yeah, that’s fine. Thank you.
11 THE COURT: Which would be questions regarding
12 the advisory and the State Bar’s general policies and
13 procedures regarding bankruptcy.
14 MS. GRANDT: Yes. That’s fine. And the
15 interrogatories. That’s fine.
16 THE COURT: Right.
17 MS. GRANDT: Okay.
18 THE COURT: And she’s going to submit the order
19 and we’re going to --

20 MS. GRANDT: Okay.

21 THE COURT: -- post that. And then on the motion

22 for leave -- so for the motion for leave to amend to join

23 the additional party defendants, well, we -- we’ve already

24 said we’re going to rule, you know -- we’re granting it for

25 the three people. So -- but we’ll continue the hearing


Page 44

1 because there’s a, you know -- I guess there’s a -- we need

2 to find out whether we’re going to add more people from the

3 State Bar. So maybe what we’ll do is we’ll continue it to

4 first -- maybe June 20th.

5 MS. GRANDT: June 20th?

6 THE COURT: Yeah. At 2:30.

7 MS. GRANDT: At 2:30. Okay. June 20th.

8 THE COURT: So before June 20th, you would -- you


9 would file the modified complaint to include additional
10 allegations against the three defendants, Babcock, Miller
11 and Lee -- Yee, okay? Does --
12 MS. SCHEER: Yes.
13 THE COURT: -- that give you enough time?
14 MS. SCHEER: Yes.
15 THE COURT: So I’d say like -- so maybe by --
16 could you do that by May 30th -- May 30th?
17 MS. SCHEER: Your Honor, I always get my things
18 in on time. But knowing where I’m going to live, that’s
19 not such an easy issue.

20 THE COURT: Well, as we’ve said, you know, we’re

21 going to set these dates and if you have a problem with the

22 dates you’ll file something with the Court to get

23 extensions.

24 MS. SCHEER: No. All I’m saying, Your Honor, is

25 I do my written work. I do it in a timely fashion. That’s


Page 45

1 --

2 THE COURT: Okay.

3 MS. SCHEER: -- never been an issue for me.

4 THE COURT: Okay. Well, I -- okay. So May 30th,

5 2018, if you could, you know, file whatever amended

6 complaint you’re going to do for those additional three.

7 MS. GRANDT: So, Your Honor, I don’t want to

8 complicate things and I really hope this doesn’t but, you


9 know, we intend to move to dismiss the -- with the new
10 amended complaint, which she, I assume, is going to file
11 immediately. So what happens --
12 THE COURT: I don’t think --
13 MS. GRANDT: -- if we’re in a situation --
14 THE COURT: -- she’s filing it immediately
15 because we’re going to wait to get the other three.
16 MS. GRANDT: Oh.
17 MS. SCHEER: No.
18 MS. GRANDT: I thought she was going to be
19 filing --

20 MS. SCHEER: No, that’s not what --

21 MS. GRANDT: -- as (indiscernible) three.

22 MS. SCHEER: -- you said.

23 THE COURT: Oh, you are going to file? You’re

24 going to file it immediately?

25 MS. GRANDT: Right. So I’m just saying --


Page 46

1 MS. SCHEER: Of course, and I asked you if I

2 could serve it and you told me yes.

3 THE COURT: Oh, for the three who we’ve -- who

4 we’ve -- okay.

5 MS. GRANDT: For the three --

6 THE COURT: All right.

7 MS. GRANDT: -- well, I’m just --

8 THE COURT: Fine.


9 MS. GRANDT: -- saying that like --
10 MS. SCHEER: I mean --
11 MS. GRANDT: -- we’re going to --
12 MS. SCHEER: -- the State Bar --
13 MS. GRANDT: -- we’re going to need to --
14 MS. SCHEER: -- takes the --
15 MS. GRANDT: -- control --
16 MS. SCHEER: -- position that just by virtue of
17 the fact that they work for the Government they’re immune.
18 I mean that’s incredible to me. That is --
19 MS. GRANDT: That is not --

20 MS. SCHEER: -- incredible to me.

21 MS. GRANDT: -- our position, but -- that’s not

22 our position. But, anyway, we will be moving to dismiss.

23 So I’m just -- what happens if the motion to dismiss is

24 successful, I guess we can take that as it comes in terms

25 of it would be the same arguments for the three ones that


Page 47

1 she wants to add, so I guess we can just worry about that

2 after and see what happens.

3 MS. SCHEER: See, the State Bar --

4 MS. GRANDT: If that makes sense, I guess.

5 MS. SCHEER: -- is above the law. They have no

6 personal liability.

7 THE COURT: Okay. So the idea was to set a

8 deadline for filing a complaint that included additional


9 allegations against Mr. Babcock, Mr. Miller and Mr. Yee
10 after the 30(b)(6) deposition, so -- but we did say that if
11 she wanted to go ahead and file and serve one with just the
12 -- was it Tracy McCormick, the three --
13 MS. GRANDT: The three, Daniel, Yee and
14 (indiscernible).
15 THE COURT: Right.
16 MS. GRANDT: But we --
17 THE COURT: That would be fine.
18 MS. GRANDT: -- are we --
19 THE COURT: So she could go, you know -- that

20 that would be fine. And if you want to file a motion to

21 dismiss against them, then we’ll deal with that when you do

22 that.

23 MS. GRANDT: Okay. So we’ll just keep the

24 schedule and deal with it. I’m just thinking if it’s

25 granted, how that would affect the adding of the other


Page 48

1 three, but we’ll just deal with that if it happens and see.

2 THE COURT: Yeah.

3 MS. GRANDT: Okay. All right.

4 THE COURT: Okay. So this -- all right. So

5 we’re not going to -- so we need this. So then do we

6 need -- so maybe we do need an order just on the addition

7 of the -- of the three, the -- for now, that you’re going

8 to be able to ...
9 (Pause)
10 MS. SCHEER: Challenging a complaint usually
11 comes up in a motion to dismiss, not on a leave to amend.
12 I mean this is not the proper procedural place for --
13 THE COURT: It’s based on --
14 MS. SCHEER: -- (indiscernible).
15 THE COURT: -- futility. It was -- you’re wrong.
16 It’s based on futility and bad faith.
17 MS. SCHEER: Bad faith!
18 THE COURT: And undue --
19 MS. SCHEER: You’re kidding me! You found no bad

20 faith.

21 THE COURT: Miss -- no, no. By -- it was

22 whether -- there was a reason why the Court could assess

23 whether the amended complaint was appropriately -- whether

24 it was appropriate to grant relief to file the --

25 MS. SCHEER: The State Bar --


Page 49

1 THE COURT: -- amended complaint.

2 MS. SCHEER: -- can only function through

3 individuals. It’s not the Wizard of Oz. There’s somebody

4 behind that curtain calling these shots and it isn’t Tracy

5 McCormick.

6 THE COURT: So I think -- so we have to decide

7 about who’s going to file the order -- if we need an order

8 for leave to join the additional party defendants --


9 MS. SCHEER: Well, of course --
10 THE COURT: -- that the parties agreed --
11 MS. SCHEER: -- I will draft that order.
12 THE COURT: Okay. So you will. All right.
13 Fine.
14 MS. SCHEER: The order on joining parties and on
15 the depositions. I will draft those orders since the State
16 Bar doesn’t comply with your seven-day requirement anyway.
17 They didn’t last time.
18 MS. GRANDT: We waited --
19 MS. SCHEER: I certainly did.

20 MS. GRANDT: -- we were waited until the final

21 order. We complied. We weren’t -- we waited until the

22 Court issued their actual order and then within seven days

23 we filed the order. I don’t know what you’re talking

24 about.

25 MS. SCHEER: Right.


Page 50

1 THE COURT: Okay. So plaintiff’s going to submit

2 the order. So plaintiff’s going to submit the order on

3 #5.00.

4 MS. GRANDT: Your Honor, we -- the State Bar

5 already submitted the order for the deposition because you

6 had put a final order about that in the same as the

7 protective order. We just didn’t put the date. There’s no

8 date of the deposition in it.


9 MS. SCHEER: Another order will be required
10 because I’m also including the deposition topics. That
11 order is not a complete order. It’s just it was --
12 THE COURT: What order?
13 MS. GRANDT: No, on --
14 MS. SCHEER: -- just --
15 MS. GRANDT: -- no, on your --
16 MS. SCHEER: The order --
17 MS. GRANDT: -- deposition.
18 MS. SCHEER: The order on the depositions. Now
19 the Court has set the date for the deposition and I’m going

20 to be including additional topics, so I don’t know what Ms.

21 Grandt --

22 THE COURT: Well, then you’ll --

23 MS. SCHEER: -- is talking about.

24 MS. GRANDT: No, on your -- on our motion

25 granting our motion to compel your deposition the Court had


Page 51

1 -- that had been mentioned in one of the orders the Court

2 has filed, so the State Bar had already entered an order

3 granting that motion based on one of the orders the Court

4 had entered already. So that’s already --

5 THE COURT: You submitted --

6 MS. GRANDT: -- been filed.

7 THE COURT: -- it or it was entered?

8 MS. SCHEER: It was entered and you changed it


9 because you said that the parties should discuss times
10 to --
11 MS. GRANDT: Right. You had --
12 MS. SCHEER: Which --
13 MS. GRANDT: -- change -- you struck out a line.
14 MS. SCHEER: -- you interlineated -- excuse me,
15 Ms. Grandt.
16 THE COURT: Oh, the motion to compel. Oh,
17 this -- so we said we’d grant the -- oh, we grant the
18 motion to compel but we didn’t set a date. That was the
19 one that was entered --

20 MS. GRANDT: Which that one -- yeah.

21 THE COURT: -- on February 23rd. So do you want

22 to do an amended order setting the date?

23 MS. GRANDT: Sure. I will do that.

24 MS. SCHEER: No --

25 THE COURT: Okay.


Page 52

1 MS. SCHEER: -- you won’t --

2 MS. GRANDT: (Indiscernible) date for the --

3 MS. SCHEER: -- because I need to put in there my

4 amended deposition topics.

5 THE COURT: This is the order granting their

6 motion to compel your deposition. This one was already

7 entered. So this one’s going to provide for May 1st. So

8 they’re going to do --
9 MS. GRANDT: I’ll amend it.
10 THE COURT: -- an amended order to add --
11 MS. GRANDT: We’ll do an amended order.
12 THE COURT: -- in May 1st, okay?
13 MS. GRANDT: Right. We will do an amended order.
14 THE COURT: Okay.
15 MS. GRANDT: Yes.
16 THE COURT: So that one we’re doing an amended
17 order. Okay. All right.
18 MS. SCHEER: No. There are --
19 THE COURT: And then if you all want to talk

20 about -- I can’t remember where we left off on the

21 mediation topic the last hearing.

22 MS. SCHEER: You were supposed to find a judge

23 for us.

24 THE COURT: Oh, right.

25 MS. SCHEER: You were --


Page 53

1 THE COURT: Right. I was going to talk to --

2 MS. SCHEER: -- you were going to ask --

3 THE COURT: -- Judge Bluebond. I did talk to

4 Judge Tighe, but I haven’t spoken with Judge Bluebond yet.

5 So --

6 MS. SCHEER: There are some housekeeping matters

7 that I need clarification for from the Court.

8 (Pause)
9 THE COURT: Well, would you want to do the
10 mediation before the continued hearing on June 20th?
11 MS. GRANDT: Your Honor, we just need a couple
12 things. We need -- that should be fine. We just need
13 enough time because we want to make sure we get the certain
14 evidence from Ms. Scheer in discovery, including her
15 medical records and things like that, so we have adequate
16 information to go into the mediation.
17 So assuming we have that, as well as the fact
18 that, you know, we need to make sure we have enough time to
19 go over our Board to get settlement approval because we’re

20 as a public agency our Board of Directors has -- our Board

21 of Trustees has to approve monetary expenditures.

22 So it would have to be probably June at the

23 earliest for us.

24 THE COURT: So --

25 MS. SCHEER: Well, Your Honor --


Page 54

1 THE COURT: -- so what we’ll --

2 MS. SCHEER: -- I have a --

3 THE COURT: -- do is we’ll -- so the idea is then

4 that it would be after June 20th. So by the -- before June

5 -- well, by June 20th the Court will have talked with Judge

6 Bluebond about being a mediator.

7 MS. SCHEER: Well, a large --

8 MS. GRANDT: Okay.


9 MS. SCHEER: -- part of the incentive --
10 THE COURT: Uh-huh.
11 MS. SCHEER: -- for me to settle --
12 THE COURT: Yes.
13 MS. SCHEER: -- is so that I don’t have to put
14 myself through a lot of this grief --
15 THE COURT: Uh-huh.
16 MS. SCHEER: -- because if I have to go through
17 all this --
18 THE COURT: Uh-huh.
19 MS. SCHEER: -- there’s not a whole lot of

20 incentive for me to settle. Part of the incentive for any

21 settlement is to avoid some of the expense. For example,

22 having to pay for a second court reporter. That’s

23 nothing --

24 THE COURT: Uh-huh.

25 MS. SCHEER: -- to the State Bar. It’s a lot to


Page 55

1 me. I would like to circumvent some of these expenses and

2 some of the inconvenience that I have to go through because

3 it is extremely, extremely difficult.

4 THE COURT: Okay. Maybe what we should do is

5 just set like a call in -- we’ll just set a -- like a

6 continued status conference --

7 MS. GRANDT: Um-hum.

8 THE COURT: -- to talk about the mediator and a


9 mediation date, and we’ll do that.
10 MS. GRANDT: Okay.
11 THE COURT: Could we do it -- that’s probably the
12 7th -- on March 14th?
13 MS. GRANDT: This is just to talk about like
14 scheduling? It’s not the --
15 THE COURT: Yeah.
16 MS. GRANDT: -- not the --
17 THE COURT: This is just to talk about -- I’m
18 going to talk to Judge Bluebond to see if --
19 MS. GRANDT: Okay.

20 THE COURT: -- she’s available because she was

21 Ms. Scheer’s preferred mediator because --

22 MS. GRANDT: That’s fine.

23 THE COURT: -- she knows Ms. Scheer --

24 MS. GRANDT: March. Okay.

25 THE COURT: -- as a -- when they -- because they


Page 56

1 practiced as lawyers at the same time in the --

2 MS. SCHEER: No. I happen --

3 THE COURT: -- bankruptcy community.

4 MS. SCHEER: -- to know she’s an excellent

5 mediator --

6 THE COURT: Oh, oh.

7 MS. SCHEER: -- from her reputation.

8 THE COURT: Okay. You know she’s an excellent


9 mediator. Okay. So --
10 MS. GRANDT: That’s fine with us, March 14th.
11 THE COURT: -- we’ll see if she’s -- if, you
12 know, if she’s willing to do it.
13 MS. GRANDT: What time on the 14th?
14 THE COURT: At 2:30. We’ll do 1:30, 1:30.
15 MS. GRANDT: 1:30? Okay.
16 THE COURT: Yeah.
17 MS. GRANDT: Okay.
18 THE COURT: So we’ll -- and you can just both
19 appear by phone, okay, because I’ll either -- because it’ll

20 just be about whether or not Judge Bluebond is going to be

21 a mediator or whether it’s going to be Judge Tighe.

22 MS. GRANDT: Okay.

23 MS. SCHEER: Your Honor, the hearing on June

24 20th, could --

25 THE COURT: Yes.


Page 57

1 MS. SCHEER: -- you refresh my memory, what is

2 that for?

3 THE COURT: That’s after the 30(b)(6) deposition,

4 it’s whether you’re going to submit another modified

5 complaint to add in the additional three State Bar

6 defendants, additional allegations against those three

7 defendants.

8 MS. SCHEER: And the hearing is for what?


9 THE COURT: The hearing is whether or not --
10 whether or not to authorize you to do that.
11 MS. SCHEER: So it’s a continued hearing on leave
12 to amend.
13 THE COURT: For those additional three after the
14 30(b)(6) deposition, which is going to be May 1st. And you
15 -- and you’re --
16 MS. GRANDT: Right.
17 THE COURT: -- going to need to file the -- the
18 supplemented complaint by May 30th.
19 MS. SCHEER: Okay. Your Honor, there are some

20 questions about the protective order for my medical

21 records.

22 THE COURT: Can we discuss them on March 14th?

23 MS. SCHEER: No, because the State Bar sent out

24 this discovery letter to me and I have tried -- this didn’t

25 seem like a big issue, but everything with the State Bar is
Page 58

1 an issue.

2 They want me to sign my medical release and I

3 said the medical release should reference the protective

4 order. I didn’t think that would be a big deal, but the

5 State Bar says no; they view it as a stand-alone document,

6 which I most certainly do not.

7 It should be subject to the protective order and

8 I see this as a way that the State Bar is going to try to


9 circumvent the protective order, which I have been on guard
10 against. I mean if I’m going to give a medical release,
11 which I’m more than happy to do, but it should be subject
12 to the restrictions of the protective order --
13 THE COURT: Well, what does that mean subject to
14 the restrictions? I mean the information is subject to the
15 restrictions of the protective order --
16 MS. SCHEER: Right. Right.
17 THE COURT: Right.
18 MS. SCHEER: I just want a reference in the
19 medical release the protective order so they can’t --

20 THE COURT: So --

21 MS. SCHEER: -- run around --

22 THE COURT: So, Ms. Grandt, what’s the problem

23 with doing that?

24 MS. GRANDT: Well, that was just one of her many

25 issues and it’s just she -- she has a number of them and --
Page 59

1 MS. SCHEER: No.

2 MS. GRANDT: -- we just felt that --

3 MS. SCHEER: That’s not true.

4 MS. GRANDT: -- the documents -- can I finish

5 speaking, Ms. Scheer? Please don’t interrupt me.

6 THE COURT: Okay. Well, this is --

7 MS. GRANDT: It was just --

8 THE COURT: -- what you need to do, all right? I


9 know we talked about how it’s no -- we’re not going to have
10 joint stipulations between the two of you. But if you want
11 the Court to assess it on March 14th, then we’ll continue
12 it over to March 14th because we’re going to be in a
13 hearing that day anyway, and you’re going to have to file
14 about what your disputes are because I -- I can’t take them
15 from the podium.
16 MS. GRANDT: -- that’s what we --
17 THE COURT: I mean I just --
18 MS. SCHEER: Okay.
19 THE COURT: -- I need to have --

20 MS. GRANDT: -- well, that’s what we --

21 THE COURT: -- it in writing ahead, okay? And we

22 can assess it.

23 MS. GRANDT: That’s what we did.

24 MS. SCHEER: All right. Then --

25 MS. GRANDT: That’s what we did. I mean that’s


Page 60

1 why I sent her -- that’s why we sent her a discovery letter

2 she’s referring to. We were intending to file a motion to

3 compel --

4 THE COURT: Oh.

5 MS. GRANDT: -- if she was --

6 THE COURT: So, okay, so --

7 MS. GRANDT: Yeah.

8 THE COURT: Okay. So --


9 MS. SCHEER: All right.
10 MS. GRANDT: That’s the whole point --
11 MS. SCHEER: Okay.
12 MS. GRANDT: -- of that. I don’t know why --
13 MS. SCHEER: So here’s the issue.
14 MS. GRANDT: -- she’s raising it now.
15 THE COURT: So it’s going to come up in the
16 motion to compel --
17 MS. GRANDT: Yes.
18 THE COURT: -- if you don’t work it out.
19 MS. GRANDT: Yeah, we’re going --

20 MS. SCHEER: No. Then they’re going to request

21 sanctions for me and this shouldn’t be an issue.

22 THE COURT: Well, then you should try to work it

23 out with them --

24 MS. SCHEER: I can’t work --

25 THE COURT: -- and we’ll assess it --


Page 61

1 MS. SCHEER: -- it out with them.

2 THE COURT: Well, we’re going to assess it in the

3 context of a motion to compel if you guys --

4 MS. GRANDT: I’m not --

5 THE COURT: -- don’t agree.

6 MS. GRANDT: -- requesting sanctions. We never

7 said we’re requesting sanctions. I just meant we’re doing

8 it based on the process the Court has set out doing letters
9 and then motions.
10 MS. SCHEER: Okay. No, here’s --
11 MS. GRANDT: That’s all --
12 MS. SCHEER: -- here’s also --
13 MS. GRANDT: -- that was all I was saying.
14 MS. SCHEER: -- what the State Bar is doing. The
15 discovery letter, as I understood it, was not a
16 substitution for discovery. It was a substitution for meet
17 and confer. But now what --
18 MS. GRANDT: Yes.
19 MS. SCHEER: -- they’re doing is using the

20 discovery letters as forms of discovery and they expect --

21 MS. GRANDT: That’s not true.

22 MS. SCHEER: -- me to respond to that. I

23 respond -- like they want to modify the protective order to

24 allow more people to --

25 THE COURT: Okay.


Page 62

1 MS. SCHEER: -- be qualified.

2 THE COURT: This is why we said last time we’re

3 not going to do stipulations. They’re going to do a

4 letter. You’re going to respond back. If you all can’t

5 reach agreement, you’re going to submit them to the Court.

6 That’s what you’re going to be doing.

7 MS. SCHEER: But a discovery letter is not in

8 lieu of formal discovery. It’s in lieu --


9 THE COURT: When I have it in writing --
10 MS. SCHEER: -- of the meet and confer.
11 THE COURT: -- in front of me, I can evaluate the
12 position when I’ve got an advance notice of what the
13 disputes are and we’ve tried to make it easier by -- by
14 eliminating a requirement of a joint --
15 MS. SCHEER: No.
16 THE COURT: -- stipulation.
17 MS. SCHEER: All they do is send me these
18 discovery letters every day with something trying to set me
19 up. I mean that’s how they function.

20 THE COURT: Okay. All right. So we’ll -- so if

21 you’re going to have -- well, if you’re going to set one --

22 were you planning on setting this on like March 14th?

23 Maybe it’d be too soon. Ms. Grandt?

24 MS. GRANDT: Well, hadn’t filed -- we hadn’t file

25 our motion to compel yet because, you know, she has -- we


Page 63

1 have a couple outstanding letters and one of them she has

2 until Friday, you know, working days to respond to, but we

3 certainly can --

4 THE COURT: Well, I don’t want to do it on two --

5 MS. GRANDT: -- coordinate it to be --

6 THE COURT: I don’t want to do it --

7 MS. GRANDT: -- at the same time.

8 THE COURT: -- without enough time --


9 MS. GRANDT: You don’t want to do it --
10 THE COURT: -- for, you know --
11 MS. GRANDT: -- on two different --
12 MS. SCHEER: No. They’re --
13 MS. GRANDT: -- (indiscernible) --
14 MS. SCHEER: -- using, instead of sending out
15 discovery --
16 THE COURT: Okay.
17 MS. SCHEER: -- they send out --
18 THE COURT: This is what we’ll do.
19 MS. SCHEER: -- these two week discovery letters.

20 THE COURT: I don’t know when you’re going -- I’m

21 not going to discuss it right now. I’m not going to rule

22 on it right now. It’s not in writing in front of me.

23 We’re going to have a status conference at 1:30 on

24 March 14th about whether or not Judge Bluebond is available

25 to mediate and what kind of mediation and not, Judge Tighe,


Page 64

1 and what we’re going to do to set up mediation.

2 MS. GRANDT: Well, Your Honor, would it be

3 possible if when we send out -- when we get out the motions

4 to compel, I mean maybe we can coordinate with the clerk to

5 change the date of the -- the date on the March 14th to

6 correspond with whatever --

7 THE COURT: No.

8 MS. GRANDT: -- date the --


9 THE COURT: The idea for March 14th is just to
10 find out if there’s going to be a possible -- whether Judge
11 Bluebond’s --
12 MS. GRANDT: Oh, okay.
13 THE COURT: -- a possible mediator.
14 MS. GRANDT: Oh, okay. So we can do -- if we
15 have -- if we need for motion to compel on a different
16 date, that’s fine.
17 THE COURT: Yeah. Yeah. No, don’t do them that
18 day.
19 MS. GRANDT: Okay, that’s -- okay. Okay, fine.

20 No, that’s fine. It’s just that --

21 THE COURT: Yeah. I was just going say --

22 MS. GRANDT: -- we’re trying to follow the --

23 THE COURT: -- I was thinking about whether to

24 make it but for you all wanted to talk about other matters,

25 but as I realize it these are matters that I don’t have


Page 65

1 enough information on in front of me based on the rulings

2 that have already been made to make any decision about them

3 or to give any real guidance.

4 So -- and Ms. Scheer’s articulated that she feels

5 that mediation sooner rather than later is her major

6 incentive. So we’re going to assess whether or not a

7 mediator -- you know, whether or not an effective --

8 what -- who she perceives as an effective mediator, based


9 on her reputation in the community, which is excellent,
10 Judge Bluebond, that -- that, you know, what we can do
11 about mediation. That’s all I’m going to be talking about
12 is, is Judge Bluebond available and if not, it’ll be a
13 different person, okay?
14 Okay. So we’ll see -- we’ll hear from you then,
15 okay? And anything else file in accordance with what we’ve
16 already entered or ruled on.
17 MS. GRANDT: Okay.
18 THE COURT: Okay? Okay.
19 MS. GRANDT: All right. Thank you, Your Honor.

20 THE COURT: Ms. Scheer, do you want these things

21 back?

22 MS. SCHEER: Throw them in the trash. That’s

23 where they belong.

24 THE COURT: Okay. All right.

25 MS. GRANDT: Your Honor, I’m going to ...


Page 66

1 (Pause)

2 THE COURT: So why don’t we -- we’re going to

3 take a quick break for check-in for the 2:30.

4 (End at 2:41 p.m.)

5 * * * * * * * *

6 I certify that the foregoing is a correct

7 transcript from the electronic sound recording of the

8 proceedings in the above-entitled matter.


9

10

11 _____________________________ Date: 4/18/2018


12 RUTH ANN HAGER, C.E.T.**D-641
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