Pages 1 - 63
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)
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Plaintiff,
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v.
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YOURPEOPLE, INC., a Delaware
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corporation d.b.a Zenefits
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Insurance Services, and
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PARKER CONRAD, an individual, )
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Defendants.
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_______________________________)
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APPEARANCES:
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For Plaintiff:
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BY:
BY:
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15-cv-02560-VC
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Case No.
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APPEARANCES (Continued):
For Defendants:
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BY:
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BY:
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BY:
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ALSO PRESENT:
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Kelly Lee Polvi, CSR, RMR, FCRR - 503.779.7406 - kpolvi@comcast.net
P R O C E E D I N G S
---000---
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THE CLERK:
10:12 A.M.
THE COURT:
wanted to say to the lawyers who are here on the Keurig case,
we're planning to call you last and we have two more hearings
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before you and I expect those two hearings will take a while.
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about 11:30.
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MR. LEWIS:
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THE COURT:
Good morning.
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MS. HURST:
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Annette Hurst on
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THE COURT:
Good morning.
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MS. HURST:
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Thank you.
THE COURT:
Thank you.
MR. LEWIS:
THE COURT:
Good morning.
MR. LEWIS:
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Okay.
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MS. HURST:
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THE COURT:
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defamation.
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evidence that two or three days after all of this went down ADP
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competes with Zenefits', and it's a lot easier to just use us."
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There may not be, and maybe the case dies a fast death.
could die a slow death is that I don't think you can win your
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right?
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motion.
MS. HURST:
I also would
If that's all
THE COURT:
MS. HURST:
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anti-competitive.
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FaceBook.
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THE COURT:
petition, and just addressing that last point you made about
MS. HURST:
Yes.
THE COURT:
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I recall.
MS. HURST:
Business Insider.
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public concern.
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THE COURT:
Forbes.
TechCrunch.
It
It is.
But what does that have to do with the
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speech exception?
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MS. HURST:
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42517(c), Your Honor, that can take that out of -- the petition
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you have mixed speech, you have mixed speech that's clearly on
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involved.
I don't concede that, for purposes of discussion.
But
THE COURT:
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MS. HURST:
If the protected
Right?
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could the Court conclude from the way the complaint is pled
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THE COURT:
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the speech was as what happened to the speech, how the speech
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right?
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And so -- and, you know, the way I read the email -- and
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to focus on that -- but the way I read both the email and the
Kelly Lee Polvi, CSR, RMR, FCRR - 503.779.7406 - kpolvi@comcast.net
Exhibit 2; right?
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Yes.
The petition is
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got the sense that maybe you were arguing that, in and of
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MS. HURST:
THE COURT:
Okay.
MS. HURST:
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The
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statements that they allege are false that caused harm are the
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THE COURT:
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MS. HURST:
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THE COURT:
But that's --
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MS. HURST:
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THE COURT:
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MS. HURST:
petition.
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There is no thousand-dollar
THE COURT:
MS. HURST:
Yes.
THE COURT:
Okay.
MS. HURST:
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Absolutely.
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So with the --
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THE COURT:
They're
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MS. HURST:
Right.
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MS. HURST:
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THE COURT:
Okay.
MS. HURST:
you've got to look at where the harm has alleged to have flown.
THE COURT:
Okay.
MS. HURST:
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laudatory about --
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THE COURT:
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MS. HURST:
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THE COURT:
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MS. HURST:
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THE COURT:
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To
That's right.
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June 4th, by June 7th we know that ADP and Zenefits were
competitors.
MS. HURST:
yet competitors.
THE COURT:
Wait a minute.
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MS. HURST:
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THE COURT:
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a competitor.
MS. HURST:
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THE COURT:
It said
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distinction?
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MS. HURST:
Yes.
It
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of a future competitor?
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aren't they?
MS. HURST:
And the
And
The
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and Zenefits.
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And that's the gravamen of that petition and it's the gravamen
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THE COURT:
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MS. HURST:
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future and, you know, who could know that, you know, just two
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days later you would get the email actually confirming yes,
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But at the time that speech was made, Your Honor, it was
Kelly Lee Polvi, CSR, RMR, FCRR - 503.779.7406 - kpolvi@comcast.net
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THE COURT:
Okay.
MS. HURST:
THE COURT:
Okay.
MS. HURST:
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THE COURT:
Okay.
Is there
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Period.
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the time of the petition and the email they were not
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it was a business.
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legislature decided.
And that's where the mixed-message cases come in,
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Your Honor.
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it's not.
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Your Honor.
language.
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that the plaintiff can't mix it all up and in that way get at
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THE COURT:
Okay.
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12(b)(6)?
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MS. HURST:
Yes.
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evidentiary presentation.
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THE COURT:
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MS. HURST:
Yes.
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THE COURT:
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I mean, I'm
guessing that Courts have been put into this situation before,
Do you know?
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MS. HURST:
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THE COURT:
Okay.
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MS. HURST:
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both.
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discussed it at length.
security problems.
THE COURT:
characterization of it.
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MS. HURST:
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THE COURT:
Okay.
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MS. HURST:
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RUN account has access to your payroll and tax data, your
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is that they say in the complaint that that's not the reason
Kelly Lee Polvi, CSR, RMR, FCRR - 503.779.7406 - kpolvi@comcast.net
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shutting them down, but not knowing what was happening in spite
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THE COURT:
Right.
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MS. HURST:
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THE COURT:
Okay.
I get that.
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MS. HURST:
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started it."
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Your Honor.
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under Gertz, under both tests, both the general purpose test
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and the limited purpose test, but for sure, given the "ADP
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of mutual customers.
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THE COURT:
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MS. HURST:
No, but --
THE COURT:
MS. HURST:
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THE COURT:
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MS. HURST:
Yes.
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THE COURT:
that?
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private dispute?
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MS. HURST:
Yes.
Yes.
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THE COURT:
Or at least a
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the fact that ADP quote/unquote started it, I mean, isn't that
actionable --
MS. HURST:
Yes.
THE COURT:
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MS. HURST:
It is relevant.
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THE COURT:
And why?
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MS. HURST:
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Your Honor.
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argument.
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The audience
That's an
High-handed.
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Anti-competitive.
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The
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facts and, say, "Weigh that against anything in here that might
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Not much, if
anything.
And, Your Honor, the fact that they started it gives the
context for the debate in the framing of the pleading.
If we knew more, if we had also the evidence from the
motion to strike, we would also know that ADP publicly
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the Gertz's policy, and then, when they were losing, when they
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didn't like the comments and the emails they were getting,
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The
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consideration, and it's not clear whether the Court carved back
Kelly Lee Polvi, CSR, RMR, FCRR - 503.779.7406 - kpolvi@comcast.net
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says there are two reasons why the Public Figure Doctrine
should apply.
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Public
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They
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And they
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MS. HURST:
THE COURT:
Mm-hm.
MS. HURST:
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I don't
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(Pause in proceedings.)
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MS. HURST:
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There
I was thinking of
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THE COURT:
Okay.
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MS. HURST:
I apologize.
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THE COURT:
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MS. HURST:
Yep.
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Your Honor, the fact that they sent the email to hundreds
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MS. HURST:
Yes.
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THE COURT:
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MS. HURST:
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THE COURT:
Okay.
MS. HURST:
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All right.
The Court's
absolutely right.
Your Honor, the main cases here on public figure are
Mattel v. MCA; Beech; and Reliance, Your Honor.
In all of those cases, the Court found that the
And it was a
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clearly the case here, Your Honor -- and the fact that there
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Records, Your Honor -- both before and after the matter had
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I don't think it
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They're
No.
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THE COURT:
Right.
MS. HURST:
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dismiss --
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here in federal court, that Lexmark case makes clear that the
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(indiscernible.)
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defective.
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And the
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amend.
Okay?
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"Okay.
If
Enough is enough."
court.
public opinion.
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THE COURT:
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MS. HURST:
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THE COURT:
All right.
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MR. LEWIS:
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THE COURT:
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MR. LEWIS:
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forgotten or ignored.
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So let me just, for a minute -Kelly Lee Polvi, CSR, RMR, FCRR - 503.779.7406 - kpolvi@comcast.net
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THE COURT:
MR. LEWIS:
THE COURT:
So just to
Zenefits has a
On June 4th --
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June 5th.
-- ADP sends an email to Zenefits' customers raising
concerns -- security concerns about Zenefits' product.
On the same day, or the day after, ADP denies access to
the ADP system for people with Zenefits emails.
On the same day, Zenefits' CEO sends an angry letter to
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And one of
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who use Zenefits, and say, "Hey, we got this new product that
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MR. LEWIS:
THE COURT:
MR. LEWIS:
declarations.
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Zenefits never
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THE COURT:
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MR. LEWIS:
Well --
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THE COURT:
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you said is that it's wrong that Zenefits was integrated with
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ADP.
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MR. LEWIS:
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THE COURT:
recited --
MR. LEWIS:
THE COURT:
-- are wrong?
MR. LEWIS:
problems in their database for this RUN system and made them
THE COURT:
Right.
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MR. LEWIS:
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those.
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THE COURT:
Right.
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MR. LEWIS:
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THE COURT:
Right.
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MR. LEWIS:
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someone else -- made the decision to cut off access to the RUN
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THE COURT:
Right.
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MR. LEWIS:
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That's all.
5th.
So they -- so those people were cut off at Zenefits.
Kelly Lee Polvi, CSR, RMR, FCRR - 503.779.7406 - kpolvi@comcast.net
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accounts.
that means somebody is getting into these accounts and are able
they do it and the security on which they -- for they use for
it."
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THE COURT:
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MR. LEWIS:
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THE COURT:
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Okay.
Okay.
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MR. LEWIS:
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anyway.
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It may
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security, and then they send out, on June 3rd -- not knowing
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into your system and make changes that we don't know about.
THE COURT:
credentials?
MR. LEWIS:
Is that what
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THE COURT:
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that one of your RUN powered by ADP users has an email address
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with Zenefits."
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MR. LEWIS:
Yeah.
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THE COURT:
Okay.
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MR. LEWIS:
Sure.
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they were doing is letting them know that -- make sure you
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understand that they could get to all your information and now
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MR. LEWIS:
was one that was -- started into in early 2004 and it was a
referral agreement.
And so if --
THE COURT:
MR. LEWIS:
THE COURT:
Mm-hm.
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that there were lots of Zenefits and ADP customers out there
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MR. LEWIS:
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THE COURT:
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MR. LEWIS:
Yes.
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THE COURT:
-- for them.
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MR. LEWIS:
Yes.
And the
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doing --
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THE COURT:
Zenefits is
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MR. LEWIS:
No.
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THE COURT:
Right.
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MR. LEWIS:
THE COURT:
So why would --
MR. LEWIS:
-- 84,000 others.
THE COURT:
I don't understand.
their payroll and benefits systems, why would ADP care that
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accounts?
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MR. LEWIS:
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THE COURT:
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MR. LEWIS:
This
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ADP allows
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THE COURT:
other.
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MR. LEWIS:
is -- that's right.
THE COURT:
One
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might go to ADP for which ADP might pay Zenefits has nothing to
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security risk that the ADP's and joint Zenefit customers ought
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to know about.
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was, you have to be aware that, since you've given them this
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all it says.
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That's in the
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And so --
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THE COURT:
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That's
the letter sent by the Zenefits CEO and the petition have
Kelly Lee Polvi, CSR, RMR, FCRR - 503.779.7406 - kpolvi@comcast.net
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MR. LEWIS:
Yes.
THE COURT:
MR. LEWIS:
That is.
THE COURT:
MR. LEWIS:
Sure.
THE COURT:
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Right.
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MR. LEWIS:
That's fine.
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THE COURT:
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MR. LEWIS:
I do.
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THE COURT:
Okay.
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MR. LEWIS:
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judicial notice.
So the first one is in paragraph 3.
"Yesterday, without
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accounts."
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THE COURT:
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MR. LEWIS:
Right.
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THE COURT:
permission."
is -- but these are not lawyers that you were sending the
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person is not, "Oh, when you signed up with ADP you didn't give
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benefits or whether the system has been shut down is, "Hey,
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phrase.
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MR. LEWIS:
What
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THE COURT:
Okay.
MR. LEWIS:
THE COURT:
What else?
What else?
MR. LEWIS:
All right.
this is that ADP believes that one day it can build software to
THE COURT:
Okay.
MR. LEWIS:
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email that you've talked about -- that one could run into that
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statement.
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THE COURT:
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Wait.
Sorry.
were saying.
MR. LEWIS:
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THE COURT:
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MR. LEWIS:
Exactly.
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THE COURT:
Okay.
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MR. LEWIS:
All right.
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That -- okay.
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not true.
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Where is it?
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MR. LEWIS:
THE COURT:
Got it.
MR. LEWIS:
That's false.
THE COURT:
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Now, putting aside the email from two days later from ADP
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MR. LEWIS:
Yes.
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THE COURT:
-- to be actionable --
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MR. LEWIS:
It would have.
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THE COURT:
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MR. LEWIS:
THE COURT:
Okay.
MR. LEWIS:
reading in this letter, the CEO points out about their close
THE COURT:
Okay.
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MR. LEWIS:
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THE COURT:
Okay.
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MR. LEWIS:
"In
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Zenefits."
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So this statement is, the reason they cut you off without
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your permission was because one day they believe they can build
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THE COURT:
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belief --
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MR. LEWIS:
Yeah.
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THE COURT:
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MR. LEWIS:
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THE COURT:
Okay.
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MR. LEWIS:
That, is also,
defamatory.
THE COURT:
Okay.
MR. LEWIS:
"ADP's claiming that they are taking this action for security
ways.
reasons.
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THE COURT:
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Zenefits.
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I mean, isn't it
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reasons?
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MR. LEWIS:
No.
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THE COURT:
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MR. LEWIS:
Because they
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So no.
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THE COURT:
Okay.
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MR. LEWIS:
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paraphrasing now.
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THE COURT:
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instead of colloquial.
I think colloquially, I think it is true that -- based on
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MR. LEWIS:
They
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people, who know darn well what Zenefits does -- because it's a
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Zenefits customer -- and they know what they had their own
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THE COURT:
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it.
MR. LEWIS:
THE COURT:
Okay.
MR. LEWIS:
THE COURT:
Next:
MR. LEWIS:
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well.
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THE COURT:
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MR. LEWIS:
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THE COURT:
Okay.
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MR. LEWIS:
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It was
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point.
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THE COURT:
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MR. LEWIS:
All right.
Zenefits.
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THE COURT:
Why not?
I mean,
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MR. LEWIS:
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THE COURT:
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It created a complication
THE COURT:
MR. LEWIS:
Right.
RUN.
But you could just do it in a
different way.
THE COURT:
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MR. LEWIS:
It would depend.
THE COURT:
Okay.
MR. LEWIS:
THE COURT:
Okay.
email?
Next.
MR. LEWIS:
THE COURT:
MR. LEWIS:
Yep.
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We objected to it.
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because --
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THE COURT:
is it incorrect?
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MR. LEWIS:
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yes.
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product at ADP.
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What part
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It
Of any product.
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false.
That's
The only
on that.
THE COURT:
MR. LEWIS:
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THE COURT:
Okay.
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MR. LEWIS:
I do.
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THE COURT:
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Do you --
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MR. LEWIS:
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THE COURT:
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Zenefits?
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MR. LEWIS:
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THE COURT:
Okay.
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MR. LEWIS:
THE COURT:
Inadmissible.
MR. LEWIS:
THE COURT:
But
MR. LEWIS:
It is inadmissible.
THE COURT:
Okay.
MR. LEWIS:
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incorrect statement.
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Because it is an
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claim what I think the jury would find, that these are
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defamatory statements, and I think the jury is, under the law,
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motion level.
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But even --
THE COURT:
I mean, it may
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MR. LEWIS:
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it that way.
ADP has
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defamatory statements.
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THE COURT:
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MR. LEWIS:
It's close.
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things in it.
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THE COURT:
That's false.
thousands of customers?
MR. LEWIS:
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THE COURT:
Okay.
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MR. LEWIS:
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It
Okay.
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THE COURT:
Okay.
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MR. LEWIS:
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was even if you were to credit that one email, it only relates
and would not be evidence for that anyway, I don't think that
goes anywhere.
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MR. LEWIS:
Sure.
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THE COURT:
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allegation that when Zenefits said the reason ADP is doing this
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And then it turns out that the email that the ADP
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let's say that that turns out to be true, and so you lose
Kelly Lee Polvi, CSR, RMR, FCRR - 503.779.7406 - kpolvi@comcast.net
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Does ADP
problem?
MR. LEWIS:
THE COURT:
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MR. LEWIS:
No.
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THE COURT:
Why not?
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I'm
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THE COURT:
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MR. LEWIS:
Yes, I did.
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THE COURT:
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MR. LEWIS:
And we did.
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THE COURT:
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Okay.
question.
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certainty.
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Are you saying that you don't know the answer, or are you
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saying you know the answer and ADP was not developing software
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MR. LEWIS:
that question?
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MR. LEWIS:
It is not complete.
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THE COURT:
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All right.
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MR. LEWIS:
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THE COURT:
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briefly?
MR. LEWIS:
That
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THE COURT:
Right.
MR. LEWIS:
Well.
THE COURT:
MR. LEWIS:
I understand that.
THE COURT:
MR. LEWIS:
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THE COURT:
-- made.
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software.
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So right now --
THE COURT:
MR. LEWIS:
THE COURT:
Okay.
MR. LEWIS:
ADP was.
THE COURT:
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MR. LEWIS:
Yes.
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THE COURT:
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MR. LEWIS:
Yes.
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THE COURT:
Okay.
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Okay.
All right.
issue?
MR. LEWIS:
Sure.
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THE COURT:
But
I mean, in essence --
Why
is that relevant?
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THE COURT:
Right.
MR. LEWIS:
THE COURT:
particularly relevant?
weird.
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statute.
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Because it was
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a case like this one, where, in that one, the anti-SLAPP motion
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So there, it was --
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THE COURT:
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advertising thing where they figured out a way for one cab
Kelly Lee Polvi, CSR, RMR, FCRR - 503.779.7406 - kpolvi@comcast.net
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company.
MR. LEWIS:
Sure.
THE COURT:
MR. LEWIS:
Right.
THE COURT:
MR. LEWIS:
Right.
THE COURT:
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MR. LEWIS:
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extrapolate anything --
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THE COURT:
Right.
Okay.
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MR. LEWIS:
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MR. LEWIS:
Which is --
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MR. LEWIS:
And I --
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invented.
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THE COURT:
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MR. LEWIS:
Right.
And we simply
point out all the evidence in our brief, line by line, that
Kelly Lee Polvi, CSR, RMR, FCRR - 503.779.7406 - kpolvi@comcast.net
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applies.
THE COURT:
Mm-hm.
MR. LEWIS:
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public and --
MR. LEWIS:
I don't need
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customers.
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indisputably --
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THE COURT:
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MR. LEWIS:
No.
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THE COURT:
Okay.
It is defamatory.
So then answer the question.
I mean,
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what, about the fact that they put out a petition on change.org
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and it talks about big company versus small company and, you
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know, competition and stuff like that, why wouldn't that take
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services.
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THE COURT:
all this.
Fair enough.
Okay.
Very interesting.
you just take the view that this is ridiculous and there's no
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way that -- you know, there's no way that this case can be
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MS. HURST:
Your Honor --
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THE COURT:
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MS. HURST:
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that.
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to litigation.
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I don't know.
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repeats of anything.
THE COURT:
Hold on a second.
MS. HURST:
Okay.
THE COURT:
Hold on a second.
MR. LEWIS:
Respond to that?
THE COURT:
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MR. LEWIS:
Yeah.
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THE COURT:
Sorry.
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Send in what?
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THE COURT:
Okay.
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MR. LEWIS:
And ADP --
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MR. LEWIS:
THE COURT:
I'm sorry.
MR. LEWIS:
MS. HURST:
What?
conference.
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magistrate judge.
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THE COURT:
Mm-hm.
Okay.
But we are
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clients.
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quick.
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calendar.
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MS. HURST:
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it in California.
Kelly Lee Polvi, CSR, RMR, FCRR - 503.779.7406 - kpolvi@comcast.net
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THE COURT:
Okay.
MS. HURST:
THE COURT:
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THE COURT:
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But at a
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THE COURT:
Okay.
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THE COURT:
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They're not
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Your Honor.
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Zenefits
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summary judgment.
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they knew they were in jeopardy on the motion to strike and the
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56(d), and then let us respond and then grant summary judgment.
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know, it may have gotten funding, but its revenues are not that
Kelly Lee Polvi, CSR, RMR, FCRR - 503.779.7406 - kpolvi@comcast.net
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great.
THE COURT:
Okay.
Thank you.
MR. LEWIS:
Thank you.
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Kelly Lee Polvi, CSR, RMR, FCRR - 503.779.7406 - kpolvi@comcast.net
We
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Kelly Polvi, CSR #6389, RMR, FCRR
Contract Transcriber