Montgomery v Risen # 177 | D Resp to K Objection & Req to Stay

8/20/2019 Montgomery v Risen # 177 | D Resp to K Objection & Req to Stay

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UNITED STATES DISTRICT COURTSOUTHERN DISTRICT OF FLORIDA

Case No. 15-cv-20782-MARTINEZ/GOODMAN

DENNIS MONTGOMERY,

Plaintiff,

v.

JAMES RISEN et al.,

Defendants. ________________________/

DEFENDANTS’ OPPOSITION TO PLAINTIFF’S OBJECTION TO

MAGISTRATE JUDGE’S OCTOBER 19, 2015 ORDER

HOLLAND & KNIGHT LLP

Sanford L. [email protected]

Brian W. [email protected]

701 Brickell Avenue, Suite 3300Miami, Florida 33131Tel: (305) 374-8500Fax: (305) 789-7799

DAVIS WRIGHT TREMAINE LLP Laura R. Handman (admitted pro hac vice)

[email protected] J. Ratner (admitted pro hac vice)

[email protected] Pennsylvania Ave., NW, Suite 800Washington, D.C. 20006Tel.: (202) 973-4200Fax: (202) 973-4499

Counsel for Defendants

Case 1:15-cv-20782-JEM Document 176 Entered on FLSD Docket 11/12/2015 Page 1 of 21


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Under Magistrate Judge Rule 4(a)(1), Defendants James Risen, Houghton Mifflin

Harcourt Publishing Company (“HMH”), and Houghton Mifflin Harcourt Company (“HMHC”),

improperly sued as HMH Holdings, Inc., (collectively “Defendants”), file this Opposition to

Plaintiff’s Objection to Magistrate Judge’s October 19 Order. (ECF No. 164.)

I. PRELIMINARY STATEMENT

The Court should overrule Dennis Montgomery’s (“Montgomery”) objection

(“Objection”) to Magistrate Judge Jonathan Goodman’s October 19, 2015 discovery order (ECF

No. 164) (the “Discovery Order”) ordering that Montgomery produce his software at issue in this

case and documents relating to its location, for the following reasons:

First , Montgomery’s Objection does not cite, or provide any argument for how he

overcomes, the “very difficult” standard of review to overturn a magistrate judge’s discovery

order as clearly erroneous or contrary to law.

Second , Judge Goodman’s Discovery Order finding that Montgomery’s software is

“highly relevant” to the element of falsity, which Montgomery must prove in this libel suit, is not

clearly erroneous or contrary to law. Montgomery merely repeats arguments that Judge

Goodman has already rejected three times. Moreover, Judge Goodman correctly rejected

Montgomery’s specious argument that, because Risen did not rely on the software at issue, it is

not relevant. What Risen relied upon before publication is relevant to fault and the fair report

privilege, but it does not matter for falsity. What matters for falsity, as Judge Goodman correctly

held, is whether the software works – as Montgomery claims in his Amended Complaint – or

whether it does not work – as suggested in Chapter 2 (“Chapter”) of Risen’s book, Pay Any

Price: Greed, Power, and Endless War (the “Book”).

Third , the Court should reject Montgomery’s suggestion that he now somehow does not

have possession, custody, or control over his own software that lies at the heart of his burden to

prove falsity. Montgomery waived this argument by waiting to assert it almost three months

after he served his objections to Defendants’ discovery requests. But even if the Court

considered this untimely argument, it does not provide a basis for overturning the Discovery



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Order. Not surprisingly, he does not state that he lacks control over his own software, so he must

produce it. And his argument is just the latest change of story that shows his bad faith.

Fourth, the Court should reject Montgomery’s assertion that Defendants waived the right

to have an expert test and testify about the software. As Judge Goodman found in denying

Montgomery’s motion to stay the August 22 discovery order pending his objection, this

argument is “circular and unconvincing” because Defendants were unable to provide a full

expert report only because Montgomery has refused to produce the software.

Finally, the Court should deny Montgomery’s request for a stay because he fails to put

forth any argument or cite any authority to support his request for a stay pending the Objection,

much less overcome the high standard of likelihood of success.

II. FACTUAL BACKGROUND

A. Defendants’ June 1 Request for the Location of the Relevant Software and its

Production, and Montgomery’s July 1 and 15 Refusals to Comply

On February 24, 2015, Montgomery brought this libel action against author James Risen,

his publisher, and its holding company, alleging that statements in the Chapter that report

allegations that Montgomery defrauded the federal government by selling it useless software

were false.

1

To defend against Montgomery’s claim that statements in the Book are false because the software allegedly works, on June 1, Defendants requested a copy and the locations

of the software referred to in the Amended Complaint, including Al Jazeera software (noise

filtering software), the object recognition software, and video compression software mentioned

in the Chapter.2

On July 1, Montgomery’s counsel objected to the request to produce the software as

“vague,” “ambiguous,” “overly broad,” and “burdensome,” and the request to disclose the

1 (ECF No. 44, Am. Compl. ¶¶ 23, 48, 49, 65, 120-27, 181-84, 202-21, 230-36, 245-48, 259,

262.) A motion to dismiss or transfer (for lack of jurisdiction, improper venue, transfer under 28U.S.C. § 1404(a), and failure to state a claim) has been fully submitted since June 11, 2015.(ECF No. 77.) Defendants intend to move for summary judgment by or before December 14,2015, after discovery closes on November 19, 2015, arguing, inter alia, Montgomery’s failure to produce evidence that would permit a reasonable jury to find substantial falsity.2 (ECF No. 90-1, Defs.’ Interrogs. 9-15 & Reqs. for Produc. 7-15, 26-32, 36-47, 53.)



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locations as “largely irrelevant.”3 After Defendants warned Montgomery’s counsel that his

broad, boilerplate objections violate the local rules, on July 15, Montgomery objected to

Defendants’ discovery again, refusing to “respond concerning the location of the relevant

software.”4 He also refused “to produce a copy of any software,” even under the protective

order, asserting that he is not legally permitted to produce “secret” classified information.5 He

did not object on grounds that the software was not in his possession, custody, or control.

B. Defendants Show Montgomery’s Past Cases Find the Software Is Not

Classified and His Pattern of Refusing to Produce the Software

On August 4, 2015, Defendants explained in their Pre-Hearing Memorandum to Judge

Goodman that orders in Montgomery’s previous cases show that his software is not classified,

yet he has repeatedly refused to produce it. (ECF No. 94.) In a case in which Montgomery’s

former employer, eTreppid, sued Montgomery for allegedly misappropriating the subject

software, the U.S. government moved for and obtained a protective order under the state secrets

privilege to protect certain classified information from discovery (“U.S. Protective Order”).6

However, the U.S. Protective Order specifically excluded Montgomery’s software from its

scope.7 Thus, the judge in Nevada found that “[t]he clear understanding in drafting and issuing

th[e] [U.S.] protective order was that the parties would be discussing the nature and capabilities

of the technology, and the type of work each party performed for the government.”8

Nonetheless, Montgomery refused to produce the software in both the Nevada litigation

and in his later bankruptcy proceedings in which the U.S. Protective Order was also entered. In

3 (Pl.’s July 1 Resp. & Objections to Interrog. 9 & Reqs. for Produc. 8, Defs.’ Mem. in Supp. of

Sanctions Ex. 5, ECF No. 166-1.)4 (ECF No. 90-2, Pl.’s July 15 Resp. & Objections to Interrog. 9.) 5

( Id. 9-15) (objecting that “the interrogatory calls for information some of which the Plaintiff is notlegally permitted to disclose as being confidential or secret”); ( Id., Pl.’s July 15 Resp. & Objectionsto Reqs. for Produc. 7-15, 26-32, 36-47, 53) (objecting on grounds of “legal restrictions on thePlaintiff responding” or that “he is not legally permitted to disclose all documents or information”).6 ( Montgomery v. eTreppid Technologies, Inc., 3:06-cv-00056-PMP-VPC (“eTreppid ”), ECF No.253 (D. Nev. Aug. 29, 2007), Defs.’ Pre-Hearing Mem. Ex. 2, ECF No. 94-2.)7 ( Id. at 2-3, ¶ 4(c) (stating that “[t]his Order does not preclude the Parties from serving or takingany discovery . . . relating to . . . [t]he computer source code, software, programs, or technicalspecifications relating to any technology owned or claimed by any of the Parties.”).8 (eTreppid , ECF No. 645, at 6 n.3, Defs.’ Pre-Hearing Mem. Ex. 3, ECF No. 94-3.)



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the Nevada action, the magistrate and district judges repeatedly ordered Montgomery to produce

the software, but he refused.9 Thus, the district judge held Montgomery in contempt, imposing a

penalty of $2,500 per day until he produced the software.10

Instead of producing the software,

Montgomery settled the action and signed confessions of judgment for $25 million.11 Then,

Montgomery declared bankruptcy, continued to refuse to produce or describe the software in

bankruptcy, and was thus denied discharge.12 Following this same pattern here, Montgomery is

withholding the software again when it is central to his burden to prove substantial falsity.

C. Montgomery Testifies in His August 20 Deposition that He Gave the

Software to the FBI and Did Not Keep a Copy

In Montgomery’s August 20, 2015 deposition, he testified that he searched for the

software in response to Defendants’ discovery requests and gave his only copy of the software to

the FBI on August 19, 2015. (Pl.’s Dep. Tr. 127:12-15; 128:1-25; 129:1-4; 131:12-22; 132:21-

23, Defs.’ Mem. in Supp. of Sanctions Ex. 2, ECF No. 166-2.) Notably, Montgomery testified:

Q: Do you have the software that you used for the Al Jazeera work?A: No.Q: Where is it?A: I gave it to the government.

(Pl.’s Dep. Tr. 127:13-16.) Thus, Montgomery testified under oath less than two months ago that

he gave the software to the government.

D. Montgomery’s Counsel Represents to Judge Goodman in the August 21

Hearing that Montgomery Gave the FBI the Only Copy of the Software

Days Before

On August 21, Judge Goodman held a hearing on the adequacy of Montgomery’s

responses and objections to Defendants’ discovery requests, including the dispute over

Montgomery’s refusal to produce the software. At the hearing, Montgomery’s counsel

confirmed what Montgomery testified about at his deposition the day before – that on August 18

or August 19, Montgomery, without seeking leave of court or in forming Defendants , turned

9 ( Id., ECF No. 645; eTreppid , ECF Nos. 728, 765, 769, Defs.’ Pre-Hearing Mem. Ex. 4, ECF No. 94-4.)10 (eTreppid , ECF No. 815, at 3-5, Defs.’ Pre-Hearing Mem. Ex. 5, ECF No. 94-5.)11

(eTreppid , ECF Nos. 897, 898, Defs.’ Pre-Hearing Mem. Ex. 6, ECF No. 94-6.)12 (eTreppid , ECF Nos. 1206, ¶ 22, 1208, ¶ 22, Defs.’ Pre-Hearing Mem. Ex. 8, ECF No. 94-8.)



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over to the FBI and to the Department of Justice what he claimed was the one and only copy of

the software that Defendants have since June 1 requested from Montgomery in this action.

Montgomery’s counsel represented the following to Judge Goodman:

THE COURT: The FBI has the software?MR. KLAYMAN: They have the software, yes.THE COURT: How did they get it?MR. KLAYMAN: Because Mr. Montgomery provided it to them.THE COURT: When?MR. KLAYMAN: He provided it to them three days ago. It has been in the process to provide that to them and he provided them a lot of other informationtoo, which they are looking at because it is classified information and he is awhistleblower.

***

THE COURT: And you did mention to me three days ago either you had orMr. Montgomery submitted the software so the FBI so the FBI could confirm oneway or the other if the software contained classified information; is that correct?MR. KLAYMAN: That is correct.THE COURT: And so when this software was turned over three days ago, dideither you, or Mr. Montgomery, keep a copy, or you just gave the software?MR. KLAYMAN: We just gave it to them.THE COURT: No copies?MR. KLAYMAN: It was just the software and relative to this case the software isincluded.

(Aug. 21 Hr’g Tr. 6:25; 7:1-10; 8:7-18, ECF No. 111-1.) Montgomery’s counsel thus

represented to Judge Goodman that he gave the software to the FBI and did not keep a copy.

The judge “agree[d] with [Defendants] that the software is highly relevant for the case.”

( Id . 32:23-24.) He credited the Nevada court’s finding that the software was not classified. ( Id.

30:18-23; 40:7-47:1.) Relying on Montgomery’s counsel’s representation that they gave the FBI

the software, the judge then “order[ed] Mr. Montgomery to turn over that software and to take

advantage of his right of continued access to nonclassified information.” ( Id. 79:24-80:1.)

E. The August 22 Order to Produce the Software and Obtain It from the FBI

On August 22, Judge Goodman entered a written order requiring Montgomery to “use his

self-described right of continued access to non-classified information (in relation to his turning

over the subject software to the FBI) and produce the software to Defendants.” (Aug. 22 Order ¶



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6, ECF No. 107.) The order also required him to produce “all documents concerning”

Defendants’ request for production number 7 about communications with persons who know

about the software and of its location, “which would now include documents related to the

disclosure and production of the subject software to the FBI” (id. ¶ 5). It required him to “turn

over all documents . . . related to the disclosure and production of the subject software to the

FBI” by August 31, and “to produce the software to Defendants” by September 4. ( Id. ¶¶ 5-6.)

F. Montgomery Fails to Comply with the August 31 Deadline

On August 31, 2015, although ordered to produce all “documents related to the disclosure

and production of the software to the FBI” by that day (Aug. 22 Order ¶ 5), Montgomery failed

to comply. Instead, Montgomery moved for a stay of the part of the August 22 order requiring

him to produce the software and related documents pending his objection. (ECF No. 112.)

G. The September 3 Denial of Montgomery’s Motion to Stay the Order to

Produce the Software

On September 3, 2015, Judge Goodman issued an order denying Montgomery’s motion

to stay. (Stay Order, ECF No. 122.) Judge Goodman reiterated that “Montgomery shall produce

by September 4, 2015 all documents encompassed in paragraph 6 of the [d]iscovery [o]rder and

shall also produce the software by using the self-described right of continued access to thesoftware which he turned over to the FBI without maintaining a copy for himself.” ( Id. at 2.)

Judge Goodman found that Montgomery was not likely to succeed on the merits of his

objection that “the software is not relevant” because Risen did not have the software when he

wrote the Chapter. ( Id. at 4.) Judge Goodman was “not at all persuaded by Montgomery’s

argument” and instead “agreed with Defendants’ position that the software is ‘highly relevant.’”

( Id. at 5.) Judge Goodman recognized that “the theme” of Montgomery’s Amended Complaint is

that “Risen falsely accused Montgomery of being a con man and a fraud who tricked the

Government into purchasing unworkable object recognition software and who asked that tests of

the software be falsified.” ( Id.) Judge Goodman rejected Montgomery’s argument, advanced

again here, reasoning that “Plaintiff’s burden to prove falsity does not hinge on whether he



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[Risen] ever had a copy of the software” but rather “the critical fact issue is whether in fact the

software worked.” ( Id.) “Accordingly, Defendants have the right to inspect and test the

software,” Judge Goodman concluded; “It is highly relevant and Montgomery must produce it.”

( Id.) “In fact,” Judge Goodman found, the software “is critical” evidence. ( Id. at 6.)

Judge Goodman also found Montgomery’s argument that Defendants waived their right

to have an expert test the software is “circular and unconvincing.” ( Id. at 5.) The judge reasoned

that Defendants, who had identified the expert, “could not provide an expert report because

Montgomery refused to provide the software which Defendants have been requesting since

discovery began.” ( Id.) The judge also found that “the overall equities of the discovery dispute

and the [d]iscovery [o]rder at issue further militate against Montgomery’s position because he

recently, and secretly, turned over the software to the FBI – without keeping a copy, without

advising Defendants of his plan to do so, without advising this Court of his strategy and without

seeking leave of Court . . . .” ( Id. at 5-6.) Montgomery’s purpose was “to, in effect, seek to

sequester what could be the most important evidence in the entire case.” ( Id. at 6.)

H. Montgomery Fails to Produce the Software by the September 4 Deadline

On September 4, Montgomery defied Judge Goodman’s two orders by failing to produce

the software that day. Rather, Montgomery filed his objection. (ECF No. 125.)

I. The September 8 Revelation of Montgomery’s Document Dump on the FBI

On September 8, 2015, James Baker, the General Counsel of the FBI, wrote a letter to

Montgomery’s counsel, and copied Judge Goodman and Defendants’ counsel, to “correct any

misunderstandings about the conditions under which the FBI took possession of the materials

from Mr. Montgomery” and to address the means by which Montgomery “will be afforded

access to the materials he provided to the FBI.” (ECF No. 126, at 1.)

Mr. Baker stated that, besides materials Montgomery gave to the FBI purportedly as a

whistleblower, Montgomery “had other materials that were wholly irrelevant to the FBI inquiry

that may be on the drives” such as the software at issue. ( Id. at 2.) But Montgomery “wished to

turn over every computer drive in his possession” to the FBI. ( Id.) Montgomery and the FBI



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agreed to establish a procedure to provide Montgomery access to non-classified information if it

did “not unduly burden the FBI.” ( Id.) But Montgomery “did not associate the potential

retrieval of this information with any pending civil litigation.” ( Id.) Further complicating the

task, Montgomery told the FBI that “Top Secret, compartmented information may reside

throughout the hard drives,” leading the FBI to treat all Montgomery’s 47 hard drives as

“presumptively classified.” ( Id. at 2-3.) In “stark contrast” to Montgomery’s counsel’s

representations to this Court, Montgomery “never asked, and the FBI never agreed, for the

Government to undertake a classification review of [the] software” at issue. ( Id. at 3.)13

Mr. Baker also told Montgomery that the August 26 letter Montgomery’s counsel sent to

the FBI was insufficient. “[N]otably absent is any information which would assist the

Government in locating and producing the software at issue in Montgomery v. Risen.” (ECF No.

126, at 3.) Mr. Baker explained that a letter Montgomery gave the FBI on August 19, 2015 said

that “the hard drives contained 51.6 million files amounting to 600 million pages.” ( Id.)

Combined with Montgomery’s claim to the FBI “that classified information was contained

throughout the hard drives,” this “massive amount of information on the hard drives” means

“there is no reasonable way for the Government to locate and provide the alleged software,

absent specific instructions from” Montgomery. ( Id. at 3-4.)14

Montgomery’s counsel and paralegal responded with self-serving declarations showing

they were present at the handover, but denying Mr. Baker’s representations. (ECF No. 127.)

J. The October 16 and 19 Orders Again Require Montgomery to Produce the

Software and to Provide the FBI Detailed Instructions to Find It

At a hearing on October 16 (Oct. 16 Hr’g Tr., attached hereto as Exhibit 1), Judge

Goodman issued an order, followed by a written order on October 19. (ECF No. 164.) The

order again required Montgomery to produce his communications with the FBI about turning

13 Mr. Baker then offered a classification review if the government finds the software. ( Id. at 4.)14 Mr. Baker therefore asked Montgomery to provide the FBI: “(1) the number or designation ofthe drive on which the software is present; (2) the file name of the software; (3) the creation dateof the software; and (4) any other identifier(s) for the software.” ( Id. at 4.)



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his counsel’s representations in August to Judge Goodman. That day, Montgomery filed a

declaration, swearing under oath: “Based on my personal knowledge and belief, upon searching

my memory, I do not believe that I have had access to any of the subject software, nor did I

provide it to the Federal Bureau of Investigation (“FBI”) when I turned over the drives . . . .”

(Pl.’s Decl., ECF No. 158-1.) He does not explain how he supposedly does not have access to

his own software, where it is now located, or explain this change of story after Judge Goodman

made clear in the October 16 and 19 orders that he could face dismissal sanctions.16 Nor does he

explain whether he refers to the Al Jazeera software, the object recognition software, or video

compression software, all of which are the subject of the Chapter and the document request.

Shifting the burden to the FBI, he states: “However, I am today providing some additional

information (attached) which may allow the FBI to see if the software – in whole or in part –

exists on the drives I turned over to the FBI to conduct its ongoing classification review.” ( Id.)

L. Montgomery Violates the Orders to Give the FBI Enough Detail by October

21 to Find the Software and to Produce the Software by October 26

On October 23, 2015, the FBI Assistant General Counsel, Ted Schwartz, emailed

Montgomery’s counsel that “Mr. Montgomery has now stated that he does not believe that the

subject software is on the hard drives.” (Email from Ted Schwartz, Defs.’ Mem. in Supp. of

Sanctions Ex. 4, ECF No. 166-4.) “Not surprisingly – given that belief – Mr. Montgomery has

not provided us the detailed information requested in the September 8, 2015 letter which would

allow us, without undue burden, to locate the software among the 51.6 million files which he

claims to have provided us.” ( Id.) Mr. Schwartz repeated that the FBI would not conduct a

classification review. ( Id.) Mr. Schwartz concluded that, “the FBI wil l not search the dri ves to

16 Tellingly, Mr. Klayman told the Court he knew “from day one” Defendants would move todismiss the case if the software – the crucial evidence – was not produced, yet inexplicably tookno steps to ensure that the software exists or to preserve a copy of the software. (Oct. 16 Hr’gTr. 17:21-18:2, Ex. 1) (“[M]aybe we can get the magistrate judge and/or the judge to rule that thecase should be dismissed if you don’t turn over something that we never even had anyway whenwe wrote the book or relied on. See, and it’s clever, I predicted this to my colleagues from dayone, that Defendants would try this, okay, and this obviously has come to be true.”).



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locate software requested in the Risen litigation.” ( Id.) (emphasis added).17

M. Montgomery’s Objections and Defendants’ Motion for Sanctions

On October 26, 2015, Montgomery did not produce the software. He filed his Objection

and request for a stay. (ECF No. 164.) In it, he represents, notwithstanding Mr. Schwartz’s

email to the contrary, that “[t]he FBI is working with due speed to search through the millions of

files in order to determine whether such software does exist in the documents provided by

Plaintiff.” ( Id. at 6.) He again argues that software is not relevant, suggests that he now lacks

possession, custody, or control over the software, and that Defendants’ inability to provide a full

expert report somehow justifies overturning the Discovery Order.

Montgomery also asserts that he turned over the massive data dump to the FBI, which,

until recently, he stated included the software, because he purports to be a whistleblower about

“illegal and unconstitutional surveillance” on Americans. (Pl.’s Obj. at 2-3.) Similarly,

Montgomery turned over a massive data dump of about 45 hard drives to the Maricopa County

Sheriff’s Office (“MSCO”) that also allegedly contained evidence of government “operations

involving clandestine access to, and collection of, raw data . . . belonging to American users.”

(See Certification from J. Kirke Wiebe and Thomas A. Drake, at 1, Nov. 13, 2014, attached

hereto as Exhibit 2.) Two former NSA experts MSCO hired to analyze the data found that “none

of the data examined reveals or otherwise supports the assertion the data contained on the hard

drives examined resulted from the clandestine collection and processing of modern digital

communications and is instead, evidence of an outri ght and fr audulent con perpetuated on the

government for personal gain and cover.” (See id. at 2) (emphasis added). (See also Oct. 16

Hr’g Tr. 23:15-24:24, Ex. 1.)18 Montgomery appears not to be a whistleblower at all. Instead,

17 Plaintiff’s counsel responded to Mr. Schwartz by letter later that night, copying Judge RoyceLamberth (D.D.C.), offering “to provide information if that is required, but my client believes hehas given what it needs to pinpoint any software, if it exists, on the 47 hard drives, whichGeneral Counsel Baker noted in his September 8, 2015, letter ‘containing 51.6 million filesamounting to 600 million pages.’” (Letter from Mr. Klayman, Defs.’ Mem. in Supp. ofSanctions Ex. 5, ECF No. 166-5.)18

Montgomery’s counsel here is also representing the same NSA experts in their ownwhistleblower suit, making it awkward in the extreme for Montgomery’s counsel to deny or



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he is using this data dump to the FBI to hide the software, to hide his lack of knowledge about its

whereabouts, or to delay producing it so Defendants cannot get it in time to defend themselves.

On October 28, 2015, as the Discovery Order authorized, Defendants filed their motion

for dismissal sanctions on grounds that Montgomery spoliated the software by giving it to the

FBI and violated multiple court orders to produce the software. (ECF No. 182.) This sanctions

motion is now properly before Judge Goodman for a Report and Recommendation to this Court.

III. ARGUMENT

A. The Court Should Overrule Plaintiff’s Objection Because the Discovery

Order Is Not Cleary Erroneous or Contrary to Law

Montgomery does not meet the onerous standard to overturn a magistrate judge’s non-

dispositive order. A “district judge in the case must consider timely objections and modify or set

aside any part of the order that is clearly erroneous or is contrary to law.” Fed. R. Civ. P. 72(a);

accord 28 U.S.C. § 636(b)(1)(A) (“A judge of the court may reconsider any pretrial matter . . .

where it has been shown that the magistrate judge’s order is clearly erroneous or contrary to

law.”); S.D. Fla. Magistrate Judge R. 4(a)(1) (same).

A magistrate judge’s ruling is “clearly erroneous” only when the district court “is left

with the definite and firm conviction that a mistake has been committed.” Salazar v. Wells Fargo Bank, N.A., 2011 WL 379145, at *3 (S.D. Fla. Feb. 2, 2011). “Clear error is a highly

deferential standard of review.” Holton v. City of Thomasville Sch. Dist., 425 F.3d 1325, 1350

(11th Cir. 2005). “The district court may not undo the magistrate judge’s” non-dispositive order

“‘simply because it is convinced that it would have decided the case differently.’” Manno v.

Healthcare Revenue Recovery Grp., LLC , 2012 WL 4192987, at *2 (S.D. Fla. Sept. 18, 2012)

(quoting Holton, 425 F.3d at 1351). “‘An order is contrary to law when it fails to apply or

misapplies relevant statutes, case law or rules of procedure.’” Summit Towers Condo. Ass’n v.

otherwise contradict their finding that Montgomery “perpetuated” an “outright and fraudulentcon.” (See Compl., Drake v. Alexander , No. 1:15-cv-01353-RJL, ECF No. 1 (D.D.C. filed Aug.20, 2015).) Their report referenced that the hard drives contained a number of Al Jazeera broadcasts, just as discussed in the Chapter at issue here.



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QBE Ins. Corp., 2012 WL 1440894, at *1 (S.D. Fla. Apr. 4, 2012) (citation omitted).

This standard is “‘a very difficult one to meet.’” Manno, 2012 WL 4192987, at *2

(citation omitted); accord Tai-Pan, Inc. v. Keith Marine, Inc., 1997 WL 714898, at *11 (M.D.

Fla. May 13, 1997) (“The standard for overturning a Magistrate [Judge’s] Order is a very

difficult one to meet.”). Montgomery’s Objection does not meet this standard of review.

B. Judge Goodman’s Finding that the Software Is Highly Relevant to the

Element of Falsity Is Not Clearly Erroneous or Contrary to Law

Montgomery argues that “the software at issue is not even relevant” because Risen’s

book “was based on previously published articles by Bloomberg News and Playboy and non-

classified public court and congressional records.” (Pl.’s Obj. at 7.) Put differently, he argues

that, because Risen did not have access to the software when he wrote the Chapter and

Defendants moved to dismiss under the fair report privilege and for failure to plausibly allege

fault based on the prior articles and official records Risen had relied upon, the software is

irrelevant at summary judgment and trial.19 ( Id. at 7-10.) For two main reasons, the Court

should overrule this Objection.

First , the Objection merely rehashes the same arguments that Montgomery made before

Judge Goodman. But he does not show – or even attempt to show – how Judge Goodman’s

ruling finding the software is highly relevant and requiring Montgomery to produce the software

at heart of his case is clearly erroneous or is contrary to law. Montgomery’s failure to do so

precludes this Court from modifying or setting aside Judge Goodman’s ruling, as court after

court faced with similar objections has ruled. See, e.g., Edmonds v. Seavey, 2009 WL 2150971,

at *3 (S.D.N.Y. July 20, 2009) (“Plaintiff’s objections merely repeat the same arguments put

before Judge Francis as to why Defendants’ sanctions motion should not have been granted in

the first instance; they do not, however, reveal anything clearly erroneous about Judge Francis’s

factual findings, or any misapplication of the relevant law to those findings.”); Matos v.

19 Contrary to Montgomery’s representation, Defendants never said that the software is not

necessary to “try[] this case before a jury.” (Pl.’s Obj. at 9.)



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Wojnarowicz , 2008 WL 892365, at *2 (E.D.N.Y. Apr. 2, 2008) (“Defendant’s objections to the

[order] merely repeat the arguments made to [the] Magistrate Judge . . . and do not establish that

the [order] is clearly erroneous or contrary to law. . . .”); United States v. Ionia Mgmt. S.A., 499

F. Supp. 2d 166, 168 (D. Conn. 2007) (“In its Objection, Ionia rehashes the arguments it offered

to [the] Magistrate Judge . . . concerning unavailability, but does not offer any new information

or legal authority demonstrating that her conclusion was clearly erroneous or contrary to law.”).

Second , Judge Goodman’s ruling is plainly correct. Risen’s reliance on these prior

publications and official records is relevant to the element of fault and the fair report privilege

defense, issues raised on Defendants’ motion to dismiss, while the software is wholly relevant to

the element of falsity, an issue not raised on the Rule 12(b)(6) motion. (Defs.’ Mot. to Dismiss

or Transfer, at 27-29, 31-39.) A fundamental element of a claim for defamation, of course, is “a

false and defamatory statement concerning another.” Restatement (Second) of Torts § 558 (June

2015) (emphasis added). If the statements or implications that Montgomery’s software did not

work are not false, then he will not be able to prove his defamation claim, without regard to fault.

Philadelphia Newspapers, Inc. v. Hepps, 475 U.S. 767, 776-77 (1986) (holding under the First

Amendment that plaintiff bears the burden to prove falsity in libel actions in cases against the

media involving matters of public concern).

Here, the Objection is meritless because it ignores the basis for the Judge Goodman’s

ruling that “I’ve already noted that thi s particular software is, in fact, cri tical evidence in the

case , because this is a defamation case, and one of the main burdens as the Plaintiff is to prove –

it’s your burden to prove the falsity of the allegation.” (Oct. 16 Hr’g Tr. 18:5-10, Ex. 1)

(emphasis added). On August 21, the judge had already found that the software is “highly

relevant” to the element of “substantial falsity of the claim in the book that the software did not

work.” (Aug. 21 Hr’g Tr. 18:5-10; 32:23-24, ECF No. 111-1). Contrary to Montgomery’s

unsupported assertion (Pl.’s Obj. at 9), the judge correctly found that the falsity does not depend

on whether Risen had a copy of the software at the time, but whether, in fact, the software works

or not. (Oct. 16 Hr’g Tr. 18:11-13, Ex. 1; Aug. 21 Hr’g Tr. 24:1-20, ECF No. 111-1.)



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It is well-established that “it makes no difference [if] the true facts were unknown” at the

time of publication, because “truth—not just known truth—is a complete defense to defamation.”

Haynes v. Alfred A. Knopf, Inc., 8 F.3d 1222, 1228 (7th Cir. 1993) (Posner, J.) (internal citations

omitted); Restatement (Second) of Torts § 581A cmt. h (1977) (“[I]f the defamatory matter is

true . . . it is enough that it turns out to be true.”). Montgomery would have this Court bless his

attempts “to sequester what could be the most important evidence” of truth. (Stay Order, ECF

No. 122, at 5.) But he “does not have a legally protected right to a reputation based on the

concealment of the truth.” Haynes, 8 F.3d at 1228. Rather, as Judge Goodman stated, the

software is “highly relevant,” and indeed, “critical” to truth and falsity. (Oct. 16 Hr’g Tr. 18:5-

10, Ex. 1; Aug. 21 Hr’g Tr. 32:23-24, ECF No. 111-1; Stay Order, ECF No. 122, at 6.)20

Thus,

Montgomery fails to show “that the Magistrate Judge, in the exercise of his broad discretion, was

clearly erroneous in concluding that the” software “is relevant” to the element of falsity and must

be produced. SEC v. Merkin, 283 F.R.D. 689, 700 (S.D. Fla. 2012).21

C. Montgomery’s Belated, Implausible Argument that He Does Not Have

Possession, Custody, or Control of His Own Software Does Not Justify

Overturning the Discovery Order

Next, Montgomery objects to the order because he asserts “he will be unable to provide

the software at issue, if any, by October 26, 2015.” (Pl.’s Obj. at 5.) Montgomery suggests, but

does not state unequivocally, that the Court should overrule the objection because the software is

now somehow not in his possession, custody, or control. The Court should reject this argument.

First , Montgomery waived any objection that he lacked possession, custody, or control

over the software. See Henderson v. Zurn Indus., Inc., 131 F.R.D. 560, 568 (S.D. Ind. 1990)

(holding that, “by virtue of the defendant’s waiver of the objection, the Court holds that the

control or possession requirements of Rule 34 have been met.”); 8B Charles A. Wright,

20 Montgomery cites the CIA’s objection to Defendants’ Touhy request for the software and otherinformation from the CIA for this relevancy argument. (Pl.’s Obj. at 12.) But for the samereasons explained above, the CIA’s counsel is also incorrect about the law. 21 Nor has Montgomery provided a basis to conclude that the Discovery Order’s requirement to produce documents on the location of the software, including documents related to the “secret,”unauthorized hand-over to the FBI of the only copy of the software, is clearly erroneous.



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Arthur R. Miller, Richard R. Marcus, Federal Practice and Procedure, § 2210, at 164 (3d ed.

2010) (“[L]ack of control may be considered an objection to the discovery request and, like any

such objection, may be waived.”). Here, Montgomery did not object on this basis in his July 1 or

July 15 response and objections to Defendants’ discovery requests, nor before Judge Goodman

granted Defendants’ two motions to compel production of the software on August 22 and

October 19, nor before Judge Goodman authorized Defendants’ to move for serious sanctions if

Montgomery did not comply. See Woods v. Cook Cnty., 2014 WL 7261277, at *2 (N.D. Ill. Dec.

19, 2014) (finding waiver when “defendants did not object that they lacked control over the

requested documents until . . . eight months after their responses were due and after the court

granted Woods’s first motion to compel”); Henderson, 131 F.R.D. at 568 (finding waiver where

party did not include possession or control objection in responses and objections). By waiting

until October 21 to first raise this issue in his affidavit, he waived this objection.

Second , even if the Court were to consider Montgomery’s belated suggestion that he

lacks possession, custody, or control, the Court should reject it. To begin, he states that

“Plaintiff is not in possession of the software at issue” and “is not even sure if the documents and

other things provided to the FBI contain the software.” (Pl.’s Obj. at 6.) But he does not state

that he lacks control over his own software. And his own cases acknowledge that “[c]ontrol is

defined not only as possession, but as the legal right to obtain the documents requested upon

demand,” Searock v. Stripling , 736 F.2d 650, 653 (11th Cir. 1984), or “when that party has the

right, authority, or practical ability to obtain the documents . . . .” Bank of New York v. Meridien

BIAO Bank Tanzania Ltd., 171 F.R.D. 135, 146 (S.D.N.Y. 1997); (See Pl.’s Obj. at 6).

Moreover, contrary to Montgomery’s arguments, his actions do not show good faith.

(Pl.’s Obj. at 6-7.) Montgomery’s failure to preserve and produce the software that is critical to

the falsity element of his claim based on changing, legally insufficient stories in the face of

Defendants’ repeated requests and court orders is evidence of bad faith or willfulness.22

There

22 See Flury v. Daimler Chrysler Corp., 427 F.3d 939, 947 (11th Cir. 2005) (instructing trial

court dismiss as sanction for bad faith spoliation when, six years before action, plaintiff allowed



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is no reason why Montgomery could not keep a copy of his software when, as he testified under

oath and his counsel confirmed, he gave the FBI his only copy nearly three months after

Defendants’ requested it in discovery and a few days before the parties held a discovery hearing

before Judge Goodman about production of the software. He does not explain why he could not

provide the FBI sufficiently detailed instructions to find the software in the massive document

dump he foisted upon the FBI in the midst of this discovery dispute. Then, after Judge Goodman

warned him that Defendants could move for sanctions, including dismissal, if he did not comply

by October 26, 2015, Montgomery contradicted his sworn testimony and his counsel’s

representations and said he now “believe[d]” he did not have “access” to his own software and

did not provide the software to the FBI.23

Finally, Montgomery misrepresented to Judge

Goodman that “[t]he FBI is . . . search[ing] through the millions of files in order to determine

whether such software does exist in the documents provided by Plaintiff,” when the FBI’s

October 23 correspondence states that they are not doing so. (Pl.’s Obj. at 6.) This egregious

his insurer to destroy vehicle central to his claims despite defendant’s pending request to inspectvehicle); Gonzalez v. Business Representation Int’l, Inc., 248 F.R.D. 644 (S.D. Fla. 2008)(finding bad faith when plaintiff made false statements, and obstructed access to highly relevantevidence by revoking medical authorization); Telectron, Inc. v. Overhead Door Corp., 116F.R.D. 107, 131-36 (S.D. Fla. 1987) (entering default judgment under inherent powers and Rule37 for destroying relevant documents after party served with complaint and requests for production, and “flagrant dishonesty”); PSG Poker, LLC v. DeRosa-Grund , 2008 WL 190055, at*12 (S.D.N.Y. Jan. 22, 2008) (“[F]ailure to either produce relevant documents or a credible storyregarding their whereabouts – despite the admonitions of this Court and repeated requests fromthe plaintiffs – can only be interpreted as an intentional and willful act”).23 If Montgomery’s latest declaration under oath is true – that he did not have access to thesoftware or give it to the FBI in August – then he and his counsel lied to Judge Goodman and ledDefendants, Judge Goodman, and the FBI on a wild goose chase. These facts give rise to thestrong inference that: (1) he does not have access to the software because he spoliated it; (2) heviolated Fed. R. Civ. P. 11(b)(3) by bringing this suit when he knew he could not prove falsity, acritical element of any libel claim; (3) he never had access to the software or it never existed,thus explaining his refusal to turn it over in the Nevada litigation and his bankruptcy case; or (4)he knows the software does not work and never worked, and thus he dare not expose it toscrutiny. Under any of these circumstances, the objections to the Discovery Order should berejected and Defendants are entitled to dismissal sanctions, as urged in the pending motion before Judge Goodman, because Montgomery cannot prove falsity, he acted in bad faith, and hecaused severe prejudice to the Defendants.



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conduct “‘sustain[s] an inference of consciousness of a weak case’” – the very definition of bad

faith. Bashir v. Amtrak , 119 F.3d 929, 931 (11th Cir. 1997) (citation omitted).

Montgomery’s cases are not only distinguishable, they support Defendants. In Searock v.

Stripling , the Eleventh Circuit held that a plaintiff was not required to produce documents that,

unlike here, were not his own but that he had volunteered to obtain from a third party and where,

unlike here, defendant had failed to take “any action to attempt to secure these crucial documents

itself.” 736 F.2d at 653-54. Moreover, unlike here, “[t]here [was] no evidence that [the party]

acted willfully, in bad faith or was at fault in failing to produce the documents . . . .” Id. at 654.

Montgomery’s other cases do not help him either. Unlike here, there was no evidence of bad

faith, and the party stated that the documents were not in its possession, custody, or control

unequivocally, from the very beginning, and with a logical explanation.24

D. Montgomery Provides No Basis Why Defendants’ Inability to Provide a Full

Expert Report Due to His Own Refusal to Produce the Software Could

Justify Overturning the Discovery Order

Montgomery argues that Defendants somehow waived their right to have an expert test

the software and testify and that purported waiver somehow justifies overturning the Discovery

Order. (Pl.’s Obj. at 10-11.) But Montgomery does not provide the basis for this suggestion, and

in any event, his argument is “circular and unconvincing.” (Stay Order, ECF No. 122, at 5.) As

Judge Goodman correctly found, Defendants identified the expert by the deadline on August 3,

but “Defendants could not provide an expert report because Montgomery refused to provide the

software which Defendants have been requesting since discovery began.” ( Id.) Thus, the expert

had nothing to test, and no opinions to offer or support with information about his qualifications

without the software that Montgomery had failed to produce. Montgomery did not object and

has failed to identify a rebuttal expert by the deadline of August 24.25

24 Thermoset Corp. v. Bldg. Materials Corp. of Am., 2014 WL 6473232, at *4 (S.D. Fla. Nov. 18,

2014); Bank of New York , 171 F.R.D. at 152.25 Defendants served a partial report with the expert’s qualifications on Montgomery onSeptember 3, after becoming aware through his motion to stay that he wanted it. Any claimederror is thus harmless. Iacangelo v. Georgetown Univ., 272 F.R.D. 233, 234 (D.D.C. 2011).



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For Montgomery to suggest that Defendants’ expert should be excluded (Pl.’s Obj. at 11)

is the ultimate in chutzpah, particularly when the software was unavailable only because of

Montgomery’s unilateral decision to “recently and secretly turn [ ] over the software to the FBI

without keeping a copy, without advising Defendants of his plan to do so, without advising this

Court of his strategy, and without seeking leave of Court . . . .” (Stay Order, ECF No. 122, at 6.)

E. The Court Should Deny Plaintiff’s Request for a Stay

The Court should deny a stay because Montgomery does not put forth any argument or

cite any authority to support his request for a staying pending the Objection. To obtain a stay of

a magistrate judge’s discovery order on appeal to the district court, Montgomery must show: (1)

likelihood of success on the merits of the appeal; (2) irreparable injury to Plaintiff absent a stay;

(3) lack of substantial prejudice to Defendants; and (4) the stay would serve the public interest.

Ameritox, Ltd. v. Millennium Labs., Inc., 2015 WL 1169403, at *2 (M.D. Fla. Mar. 13, 2015).

As explained above, Montgomery is not likely to succeed on his Objection. He has

shown no irreparable injury to himself absent a stay. Moreover, his request that “[d]iscovery

could be extended for a month or two” to produce software while “leav[ing] the trial date in

place” (Pl.’s Obj. at 12) would severely prejudice Defendants by leaving inadequate time to brief

and decide summary judgment motions, to test the software, and to prepare for any trial. Indeed,

it was Montgomery who insisted on an expedited schedule due to his poor health26

and now has

made sure, by not even securing a copy of his own software, that the critical evidence will not be

available on a timely basis – if ever. He has deliberately blown past the reasonable deadlines set

by Judge Goodman. The Court should not allow him to change course and obtain new deadlines

that will prejudice Defendants and reward his deliberate strategy “to sequester what could be the

most important evidence in the case.” (Stay Order, ECF No. 122 at 6.)

26 Other than evidence of a fall that did not require an overnight stay in the hospital, Montgomeryhas not produced any medical records that support his statement in his Objection that he“recently suffered another severe, life-threatening medical setback related to his potentially fatal brain aneurism and may need another operation.” (Pl.’s Obj. at 2.)



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IV. CONCLUSION

For the foregoing reasons, Defendants respectfully request that the Court overrule

Plaintiff’s Objection to the October 19, 2015 Discovery Order and deny Plaintiff a stay.

Dated: November 12, 2015 Respectfully submitted,

s/Brian W. TothSanford L. BohrerFlorida Bar No. [email protected] W. TothFlorida Bar No. 57708 [email protected] & K NIGHT LLP701 Brickell Avenue, Suite 3300Miami, Florida 33131Telephone: (305) 374-8500Fax: (305) 789-7799

– and –

Laura R. Handman (admitted pro hac vice)[email protected] J. Ratner (admitted pro hac vice)[email protected] WRIGHT TREMAINE LLP1919 Pennsylvania Ave., NW, Suite 800Washington, D.C. 20006

Tel.: (202) 973-4200Fax: (202) 973-4499

Counsel for Defendants

CERTIFICATE OF SERVICE

I certify that on November 12, 2015, I filed this document with the Clerk of Court using

CM/ECF, which will serve this document on all counsel of record.

s/Brian W. Toth



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EXHIBIT 1

Case 1:15-cv-20782-JEM Document 176-1 Entered on FLSD Docket 11/12/2015 Page 1 of 53


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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF FLORIDA

Case No. 15-20782-CIV-MARRA

DENNIS L. MONTGOMERY, )

)

PLAINTIFF, ) )

-v- )

)

JAMES RISEN, ET AL., )

)

DEFENDANTS. Miami, Florida)

October 16, 2015)

_____________________________))

TRANSCRIPT OF DISCOVERY HEARING PROCEEDINGS

BEFORE THE HONORABLE JONATHAN GOODMAN

UNITED STATES MAGISTRATE JUDGE

Appearances:

(On Page 2.)

Reporter Stephen W. Franklin, RMR, CRR, CPE(561)514-3768 Official Court Reporter

701 Clematis Street

West Palm Beach, Florida 33401

E-mail: [email protected]

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* * * * *

FOR THE PLAINTIFF Larry E. Klayman, ESQ.

(By Telephone) Klayman Law Firm

2520 Coral Way, Suite 2027

Miami, FL 33145

FOR THE DEFENDANTS Laura R. Handman, ESQ., AND

(By Telephone) Micah J. Ratner, ESQ.

Davis, Wright & Tremaine

1919 Pennsylvania Avenue, NW

Suite 800

Washington, DC 20006

-and-

(Present in Court) Sanford L. Bohrer, ESQ.

Holland & Knight

701 Brickell Avenue, Suite 3000

Miami, FL 33131

* * * * *

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(Call to the order of the Court.)

THE COURTROOM DEPUTY: Calling case

15-20782-CIVIL-MARTINEZ, Montgomery versus Risen, et al.

The Honorable Jonathan Goodman presiding.

THE COURT: Good afternoon, folks.

I'm hoping that the beeping noise that I just heard

indicates that we now have an additional counsel on the line,

and, if so, I think we've got everybody here.

So you haven't missed anything. We're just starting

now.

So let's start off with appearances.

First for the Plaintiff, I believe we have hopefully

counsel on the phone?

MR. KLAYMAN: Yes, we do, Your Honor. Larry

Klayman.

How are you today?

THE COURT: All right. Good.

Mr. Klayman, by the way, were you on television last

night on the Jimmy Kimmel show?

MR. KLAYMAN: No, I don't think so, but --

THE COURT: There's a fellow who was interviewed

there on the street. Jimmy Kimmel sometimes has one of these

on-the-street surprise ambush interviews, and there was a

fellow interviewed who looked significantly like you and had a

similar demeanor and a similar way of speaking, and I said, my

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gosh, is Mr. Klayman out there on Sunset Boulevard, in

Hollywood? But apparently not.

All right.

MR. KLAYMAN: I think it may have been me, Your

Honor. I actually was -- it may have been me. I did give an

interview to them a while back. I guess they held it.

THE COURT: Oh, really?

MR. KLAYMAN: Yeah.

THE COURT: Oh.

MR. KLAYMAN: Was there a dog on there?

THE COURT: Yes, you were holding a dog.

MR. KLAYMAN: Yes, that's me.

THE COURT: And, in fact, there was a reference to

the dog being like your wife or something, right?

MR. KLAYMAN: No, it's like my daughter.

THE COURT: Oh, my gosh, I was correct, that was

you.

MR. KLAYMAN: I don't know. Maybe I said if I had

had my dog I never would have gotten married. Maybe I --

THE COURT: There was some reference to a dog and a

wife.

So, yeah, I guess they do these interviews and they

hold them for, I don't know, weeks at a time, whenever they

have a need. It wasn't particularly time sensitive.

MR. KLAYMAN: They held it for months, months.

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THE COURT: It was you, Mr. Klayman. My gosh.

Okay. Good.

Who else do you have on the phone?

MS. HANDMAN: You have Laura Handman and Micha

Ratner, from DC.

THE COURT: All right. Either of you on television

lately?

MS. HANDMAN: No.

THE COURT: All right. And here in court we have?

MR. BOHRER: Sandy Bohrer, Your Honor.

THE COURT: Very well.

All right. So happy Friday to everyone.

We're here for a discovery dispute, and I understand

this is a matter that the defense would like to bring to my

attention. So I'm happy to hear what you have to say.

MS. HANDMAN: Thank you, Your Honor.

We're here again today for sanctions for failure to

comply with paragraph 5 and 6 of the Court's post-hearing

discovery order of August 22nd. We seek sanctions under Rule

37(b) and (e).

Your Honor will recall, the revelations made at the

August 21st hearing which Your Honor described in your denial

of the stay of the August 22nd order, that Montgomery, quote,

"recently and secretly turned over the software to the FBI

without keeping a copy, without advising Defendants of his

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plan to do so, without advising this Court of his strategy,

and without seeking leave of court to, in effect, sequester

what could be the most important evidence in the entire case."

The Court ordered on August 22nd, in paragraph 6,

that by September 4, Plaintiff use, quote, "his self-described

right of continued access to nonclassified information,"

paren, "in relation to his turning over the subject software

to the FBI, to produce the software to defendants."

That was by September 4.

Plaintiff's counsel wrote to the FBI and AUSA Curtis

on August 26th quoting and attaching the order.

Then on September 8th, the FBI's general counsel

wrote back to Plaintiff's counsel, with a copy to Your Honor

and to Defendants' counsel. Not only did Mr. Baker say the

Government was not aware of this case and the pending document

demand when they received the information, but, most

importantly, he said: "Notably absent" -- I'm quoting -- "is

any information which would assist the Government in locating

and producing the software at issue in Montgomery v. Risen."

And then why? Because what Plaintiffs gave the FBI

on August 19th, just two days before the hearing before Your

Honor on the software, was hard drives containing, according

to Mr. Baker, 51.6 million files amounting to 600 million

pages, which the Plaintiff claims had classified information

throughout.

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Hence, Mr. Baker said, quote: "This massive amount

of information means there is no reasonable way for the

Government to locate and provide the alleged software absent

specific instructions from the Plaintiff.

Mr. Baker then specified what was needed. One was a

number or designation of the drive on which the software is

present. Two, the file name of the software. Three, the

creation date of the software. Four, any other identifiers of

the software.

So we asked Mr. Klayman on September 21st whether

Plaintiff had provided that information requested, and to

please provide us the communications evidencing same, as well

as the prior communications referenced in Mr. Baker's letter,

all of which this Court ordered to be produced in paragraph 5

of the August 22nd order.

We did not get the software, which was supposed to

be produced by September 4, nor any evidence that the

information requested by the FBI in order to locate the

software have been provided, nor any communications with the

FBI.

And in the absence of any such communications

confirmation, I communicated on October 5 with Ted Schwartz,

the assistant -- the FBI's assistant general counsel, and he

advised that Mr. Klayman had sent an e-mail on September 24 --

that would be after our meet and confer -- to which the FBI

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responded on October 1st, quote, "asking for more information

and clarification."

Mr. Schwartz said he could not provide the documents

absent a formal subpoena subject to the Touhy regulations but

said, quote, the FBI has no objection to Mr. Klayman providing

us a copy of the e-mail exchange.

So we asked Plaintiff's counsel, again as part of

the meet and confer on October 7th, for this exchange, and

advised them that the FBI had no objections. We asked again

for the prior communications and confirmation that the

information necessary to locate the software had been

provided, and for the software itself.

We have gotten no response, no documents, no

software, even though clearly required by this Court's order

of August 22.

By giving the FBI this one and only copy of his own

software and not keeping a copy which had been the subject of

the specific discovery request since June 1, and which is, as

Your Honor observed, the critical evidence in the case, and

providing it to the FBI in a massive document dump that makes

it difficult, if not impossible, to retrieve, Plaintiff has

engaged, in our view, in deliberate spoliation, in defiance of

this Court's order to retrieve the software and provide the

communications with the FBI.

We were able to get, as Your Honor probably knows, a

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brief extension of the discovery deadline, but it is now fast

approaching. It's one month away, and we need time for our

expert to examine the software and test whether it works or

not and do follow-up discovery.

So we respectfully request that the Court order

Plaintiff to, one, produce by Monday all communications

regarding the location of Montgomery software, which is what

Your Honor ordered on August 22nd in the paragraph 5,

including, but not limited to, the July 28 letter agreement

with the FBI, the August 1 e-mail that are both referenced in

Mr. Baker's letter, the September 24 e-mail from Mr. Klayman,

and the FBI's October 1 response, which Mr. Schwartz advised

of, and any subsequent communications with the FBI.

We'd also ask Your Honor to order that if he has not

already done so, by Monday, he provide the FBI with all the

information the FBI has required in order to identify and

locate the software and provide documentation that that has

been done.

And, finally, we'd ask that they provide the

software by October 26.

We ask that if these requirements are not satisfied,

including provision of the software, even if the FBI has not

been able to return the software to the Plaintiff by that

time, due to Plaintiff's deliberate decision to not keep a

copy of its own software, but instead provide it to the FBI in

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a manner that did not permit timely retrieval and production,

and causing extreme prejudice to Defendants' ability to defend

this case, we ask the Court to impose sanctions as provided

under Rule 37.

First, we would ask to dismiss the action with

prejudice. And if not dismissed, we would ask the Court to

make a finding that the software either did not exist, or did

not work, or, at a minimum, draw an adverse inference that the

software did not exist or did not work.

We cited some authority in Footnote 17 in our

prehearing memorandum of August 4th, but we would be happy to

supplement that with additional authority if the Court

requires.

THE COURT: Thank you.

Mr. Klayman?

MR. KLAYMAN: Yes, Your Honor.

First of all, I would say that we did comply with

your order of August 22nd, 2015. You ordered that we put the

FBI on notice by August 26th that to look for the software, if

it existed. We did not know whether or not, of the 47 hard

drives, 600 million pages of documentation provided to the

FBI, that, in fact, software existed on that.

Secondly, the FBI advised in the letter from

Mr. Baker of September 8th that they were conducting, or they

would conduct a classification review. Because we said if it

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does exist it may be classified, and that's why we just

couldn't turn any software, even if it existed, over

willy-nilly. That would create liability, and not just for

Mr. Montgomery, but also for Defendants. If they were to

receive classified information, they could be in great legal

difficulty.

Now, that having been said, we have --

Mr. Montgomery has communicated with the FBI and has given it

information whereby it could make a concerted effort to find

that software to the best of his ability, if it exists.

However, this is an ongoing criminal investigation by the FBI,

and the information that's being provided to the FBI in terms

of it trying to be able to locate if any such software exists

and if it's classified, would be subject to work product in

the context of that criminal investigation.

We did get correspondence from Mr. Schwartz, but it

was never copied on Ms. Handman. I don't know how she has

that. So I assume that the FBI was keeping this close to the

vest as part of the criminal investigation. As a former

prosecutor for the Justice Department, I have to respect the

investigatory privilege of the FBI, particularly when a

criminal matter is involved.

And, in fact, contrary to what was said in

Mr. Baker's letter, he's a very honest man, and I have the

highest regard for him, but he was not privy at the meeting at

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the Miami field office of the FBI. An Assistant U.S. Attorney

was. So the information was provided second hand.

We filed affidavits on the record, both myself and

Ms. James, who was present, Dina James, paralegal, that, in

fact, we had told the FBI that there was a civil matter, and

that, for that reason, we would need access if required by

this Court to anything revolving around if software existed or

any other matter. And the FBI and the AUSA agreed at that

point in time. That was not put in writing, but that was

said. But we did put it in an affidavit.

So we have been completely forthright in making an

attempt to find out if any software is there. The FBI is

conducting a classification review. These things are very

important. And we know, you know, in other matters that are

in the news these days that the FBI has some very significant

matters concerning a person called Hillary Clinton. And, you

know, obviously their resources are being stretched thin.

I mean, the documents here are 600 million pages.

That's huge in comparison to the 35,000 pages which went

missing in that very high profile case. So this is a matter

which they're moving with all due speed, and we are proceeding

in that regard.

Now, I don't know if Your Honor had the

opportunity -- I assume you did, because you're a very

diligent jurist -- to look at our objection to your order, in

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all due respect. And we're not saying that you went out of

your way to require this to be produced without any basis.

But what we're saying is, and we're asking Judge Martinez to

take a look at it, and I hope that you can look at it, too, is

that, you know, it's ironic that they're making this issue of

the software, and it's strategic.

And I predicted that this was going to happen at an

early hearing, because their initial motion to dismiss was

based on the premise that everything that was published by

Mr. Risen came from prior publications in Playboy Magazine, in

Bloomberg News, and in Congressional testimony on the public

record. And Mr. Risen never relied on confidential sources

inside the Government, contrary to a source note in his book,

which was meant to sell the book but was obviously false given

his testimony. And he confirmed that when he was deposed,

that he didn't have access to any software or confidential

information from the Government.

And we put that in that objection.

So this is a red herring, and Ms. Handman has just

now confirmed that this is true, that they were trying -- they

were trying to create a Catch 22 with regard to the software

to try to get this case dismissed.

And the other thing that supports that is the fact

that on the last day, for them to have designated an expert to

review any such software -- which they could have done from

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the start -- they didn't even give us anything more than the

name of the expert, in violation of federal rules on producing

information with regard to experts. You know, their prior

qualifications, prior testimony and everything like that.

So the bottom line here, Your Honor, is -- and I

don't want to get too diverted, but the background's

important -- is that we should be allowed to have this

objection run its course. It's a legitimate objection. Your

Honor didn't -- not have all this information at the time that

Your Honor ruled initially. We took time to plot it out. To

turn software, which we don't know whether it exists or not,

over now, and the FBI's looking for it, and it's classified,

and communications over what's in those discs would moot out

the objection, could potentially expose classified

information, which would be helpful even to foreign interests

adverse to the United States, it would compromise an ongoing

criminal investigation by the FBI -- the communications are

technically work product here, because Mr. Montgomery is, in

fact, a witness for the FBI. He's an informant for the FBI,

and that's why he got that immunity letter.

And for all of these reasons, Your Honor, we have

been in good faith, we respect you highly, we respect your

orders, but to turn over internal communications would

compromise a criminal investigation and possibly classified

information and could result in national security damage to

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this country.

So that's our stance right now.

Let the FBI run its course. It's moving --

Mr. Montgomery has participated in helping them, despite the

fact that he went back into the hospital after another stroke.

And let's see what the FBI comes up with. I know they're

moving with all due speed. I don't think it's necessary that

we have an extension on discovery. It hasn't been requested

yet. But if that's necessary, and Your Honor so rules and the

Judge so rules, then that's something we would respect.

But, again, they're not basing their case on any

software or classified information, you just need to look into

their motion to dismiss to tell you dismiss this case because

it all came from public sources.

So we respectfully request, Your Honor, to allow

that objection to be ruled upon, and in the meantime allow the

FBI to do its declassification review and to determine whether

or not that software is in there and whether or not it's

classified, if, indeed, the objection's not withheld.

THE COURT: Now, Mr. Klayman, I have a couple of

follow-up questions for you.

I heard you say about two minutes ago that the

information is classified, and I seem to recall that at other

hearings you said to me, I don't know whether the

information's classified, Judge, I've never looked at it

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myself, all I'm saying is it could be.

So did you perhaps misspeak this afternoon when you

said --

MR. KLAYMAN: Yeah, I think I misspoke in context.

Okay. Let me make that clear.

What I'm saying is that the -- I don't know whether,

if any such software exists, it's classified or not. That's

for the FBI to determine. And it must make that first initial

determination.

What I'm saying is that the communications that

Mr. Montgomery has had with the FBI since, pursuant to your

order, could lead potentially to disclosing classified

information about what's on those hard drives. That could

compromise the FBI's investigation, which is criminal, and

undoubtedly Defendants will make this public, and it could

compromise the national security of the United States. And

that's why this is a very significant matter which can't be

taken lightly.

And, in fact, you know, the Assistant U.S. Attorney,

Debra Curtis, has said to me orally, said, Larry, you know,

don't mix the civil with this criminal case. I mean, we have

to proceed criminally here. You know, we're concerned about

that.

THE COURT: So when you --

MR. KLAYMAN: So, you know, it's -- and that's why I

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point out, Your Honor, that at this stage, when the

Defendants, themselves, have rested their motion to dismiss on

the basis that Mr. Risen did not have access to the software,

therefore he couldn't have made his opinions that it was

fraudulent, and that his entire publication, "Pay Any Price,"

as concerns Mr. Montgomery was simply based on what was

already public in terms of prior newspaper articles and

Congressional testimony.

This -- and given the fact that they designated an

expert only by giving us his name on the last day, and could

have brought this issue up in front of the Court a lot sooner,

this is a strategy, a tactic, to put us in a Catch 22

situation, not just me -- I mean, not just Mr. Montgomery, but

the FBI and the Department of Justice, to try to get this case

dismissed.

It's kind of like heads, I win, tails you lose.

I mean, we didn't base this book on anything that

was confidential or classified. Even Risen admitted to that

when he testified. That's in the objection.

But now we're going to make an issue of it, because

if we can paint you into a corner, maybe we can get the

magistrate judge and/or the judge to rule that the case should

be dismissed if you don't turn over something that we never

even had anyway when we wrote the book or relied on.

See, and it's clever. I predicted this to my

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colleagues from day one, that Defendants would try this, okay,

and this obviously has come to be true.

THE COURT: Well, Mr. Klayman, you've already made

that argument to me before, and I certainly appreciate your

creativity, but you haven't persuaded me of that, because I've

already noted that this particular software is, in fact,

critical evidence in the case, because this is a defamation

case, and one of your main burdens as the Plaintiff is to

prove -- it's your burden to prove the falsity of the

allegation.

And, quite frankly, it doesn't really matter all

that much whether Mr. Risen had access to this software or

not.

Let's assume for the sake of discussion that he just

wildly speculated that the software didn't work. He had never

seen it, he had never had access to it, he had never spoken to

anybody about it. He was just incredibly reckless and wrote a

book that said the software doesn't work. But if it turns out

that the software doesn't work, then it's a true statement.

So that's still part of your burden of proof.

So in any event, you've made that argument before,

and, quite frankly, you didn't make much headway then, and

you're not making much headway now.

But setting that aside, when you told me earlier

today that Mr. Montgomery has communicated with the FBI and

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gave the FBI information so that it could try to track down

the software amongst this massive amount of electronically

stored information that was given to the FBI, were those

communications in writing, or were they oral, or were they

both?

MR. KLAYMAN: They were in writing. They were

forwarded to the FBI, and what I also argued was, Your Honor,

that Mr. Montgomery did this as soon as he could, because he's

been ill. He was in a hospital, had another stroke. And --

but that this is part -- to review that information while an

objection is pending -- we are challenging this with the

Court -- you know, could potentially compromise national

security.

He is a witness for the FBI. He's an informant.

THE COURT: Have you seen this letter, Mr. Klayman,

the one that you said Mr. Montgomery sent to the FBI in order

to give it instructions on how to track down the software?

MR. KLAYMAN: I've seen the e-mails. We forwarded

the information that he provided to us to the FBI.

THE COURT: So you have seen the written

communications that Mr. Montgomery sent to the FBI?

MR. KLAYMAN: I have seen that, but I have -- it's

not classified. All I'm saying is it could lead a person to

information that would possibly be classified, and that's why

I think it's sensitive.

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THE COURT: Well, it may be sensitive, Mr. Klayman.

There are a lot of documents in lawsuits that are, quote,

sensitive, and a lot of documents that people would prefer not

to turn over. But the most important word that you said in

your explanation is "could" or "potentially," which, to me, is

simply speculation.

You ha

Montgomery v Risen # 177 | D Resp to K Objection & Req to Stay

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Transcript of Montgomery v Risen # 177 | D Resp to K Objection & Req to Stay