# the Dallas Morning News, Inc. and Kevin Krause v. Lewis Hall and Richard Hall, Individually and on Behalf of Rxpress Pharmacies and Xpress Compounding > Texas Supreme Court · December 21, 2017 URL: https://www.frixlaw.com/law-library/cases/4232500 ## Case - **Court:** Texas Supreme Court - **Decided:** December 21, 2017 - **Precedential status:** Published - **Opinion:** Opinion - **Cited by:** 0 later opinions in the Frix Law Library ## Citator (automated) - No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases. - Full citator and citing cases: https://www.frixlaw.com/law-library/cases/4232500 ## How later opinions describe it (automated extraction) - declining to take judicial notice in part stating reluctance of appellate courts to take notice of matters when the trial court was not requested to do so and had no opportunity to examine the source material ## Opinion text FILED 17-0637 12/21/2017 3:18 PM tex-21442581 SUPREME COURT OF TEXAS BLAKE A. HAWTHORNE, CLERK NO. 17-0637 __________________________________________________________________ IN THE SUPREME COURT OF TEXAS __________________________________________________ THE DALLAS MORNING NEWS, INC. AND KEVIN KRAUSE, PETITIONERS V. LEWIS HALL AND RICHARD HALL, INDIVIDUALLY AND ON BEHALF OF RXPRESS PHARMACIES AND XPRESS COMPOUNDING, RESPONDENTS __________________________________________________________________ ON APPEAL FROM THE SECOND COURT OF APPEALS FORT WORTH, TEXAS NO. 02-16-00371-CV TRIAL COURT CAUSE NO. CV16-0309 rd 43 JUDICIAL DISTRICT COURT OF PARKER COUNTY, TEXAS __________________________________________________________________ RESPONDENTS’ RESPONSE TO PETITION FOR REVIEW ______________________________________________________________ Robert J. Myers MYERS ✯LAW State Bar No. 14765380 2525 Ridgmar Blvd., Ste. 150 rmyers@myerslawtexas.com Fort Worth, TX 76116 John J. Shaw Tel: (817) 731-2500 State Bar No. 24079312 Fax: (817) 731-2501 jshaw@myerslawtexas.com TABLE OF CONTENTS Table Of Contents ..................................................................................................... ii Index Of Authorities ................................................................................................ iii Statement Of Facts .....................................................................................................1 A. Introduction......................................................................................................1 B. The Dallas Morning News Articles .................................................................2 C. The Aftermath of the Articles: The Lawsuit and Subsequent Search .............5 Summary Of The Argument ......................................................................................6 Argument....................................................................................................................8 I. Response to Issue 1: The Court of Appeals Correctly Applied the Substantial Truth Test and the TCPA’s Burden-Shifting Framework ................8 A. The Court of Appeals did not err in holding the first gist was not substantially true ..............................................................................................8 B. The Court of Appeals correctly applied the TCPA’s burden-shifting framework ......................................................................................................10 II. Response to Issue 2: The Court of Appeals Correctly Applied the “Ordinary Reader” Standard and the Substantial Truth Test .............................10 III. Review is not Warranted Based on a Bare Assertion that Respondents’ Evidence was “False” .........................................................................................13 Conclusion and Prayer .............................................................................................18 Certificate Of Compliance .......................................................................................20 Certificate Of Service...............................................................................................21 Index to Appendix ....................................................................................................22 ii INDEX OF AUTHORITIES State Cases AOL, Inc. v. Malouf, 05-13-01637-CV, 2015 WL 1535669 (Tex. App.—Dallas Apr. 2, 2015, no pet.) .............................9 Basic Capital Mgmt., Inc. v. Dow Jones & Co., Inc., 96 S.W.3d 475 (Tex. App.—Austin 2002, no pet.)................................................9 D Magazine Partners, L.P. v. Rosenthal, 529 S.W.3d 429 (Tex. 2017) ................................................................... 10, 11, 12 Freedom Communications, Inc. v. Coronado, 372 S.W.3d 621 (Tex. 2012) ......................................................................... 16, 17 Guyton v. Monteau, 332 S.W.3d 687 (Tex. App.—Houston [14th Dist.] 2011, no pet.) .....................17 In re Lipsky, 460 S.W.3d 579 (Tex. 2015) ............................................................................9, 10 In re Lowe's Home Centers, L.L.C., 13-16-00493-CV, 2017 WL 3205522 (Tex. App.—Corpus Christi July 28, 2017, no pet.) .............16 Inwood Forest Cmty. Improvement Ass'n v. Arce, 485 S.W.3d 65 (Tex. App.—Houston [14th Dist.] 2015, pet. denied) ................14 KBMT Operating Co., LLC v. Toledo, 492 S.W.3d 710 (Tex. 2016) ............................................................................9, 10 Neely v. Wilson, 418 S.W.3d 52 (Tex. 2013) ..................................................................................12 Office of Pub. Util. Counsel v. Pub. Util. Com'n of Texas, 878 S.W.2d 598 (Tex. 1994) ................................................................................16 SEI Bus. Sys., Inc. v. Bank One Texas, N.A., 803 S.W.2d 838 (Tex. App.—Dallas 1991, no writ) ...........................................15 Tran v. Fiorenza, 934 S.W.2d 740 (Tex. App.—Houston [1st Dist.] 1996, no writ) .......................17 iii Turner v. KTRK Television, Inc., 38 S.W.3d 103 (Tex. 2000) ..................................................................................12 State Statutes Tex. Civ. Prac. & Rem. Code Ann. § 27.003 (West) ..............................................14 Tex. Civ. Prac. & Rem. Code Ann. § 27.005 (West) ..............................................10 Tex. Civ. Prac. & Rem. Code Ann. § 27.006 (West) ..............................................10 Tex. Civ. Prac. & Rem. Code Ann. § 27.008(a) (West) ..........................................14 Tex. Civ. Prac. & Rem. Code Ann. § 73.002(a); (b)(1)(A) (West) .........................13 Tex. Civ. Prac. & Rem. Code Ann. § 73.005 (West) ..............................................12 State Rules Tex. R. Evid. 201(b).................................................................................................16 Texas Rule of Appellate Procedure 9.4(i)(1) ...........................................................20 Texas Rule of Appellate Procedure 9.4(i)(2) ...........................................................20 iv STATEMENT OF FACTS A. Introduction Respondents are founders of RXpress Pharmacy (“RXpress”), a pharmaceutical compounding company with headquarters in Tarrant County, Texas. CR 566. Respondent Lewis Hall is a state-licensed pharmacist and has been practicing pharmacy for over 40 years. CR 566. Respondent Richard Hall has operated the business affairs of Lewis’ pharmacy business over the years. CR 566. In 2013, the Halls determined to enter into a partnership/joint venture with Scott Schuster and Dustin Rall. Both Schuster and Rall had experience in medical sales and marketing. CR 381–82. The initial concept and structure of the venture was straightforward, Rall and Schuster’s role in the venture was to sell the compounded prescription product concept to doctors who would prescribe the medication for their patients. CR 381. The business plan was for the pharmacy, under Lewis's medical direction and Richard’s management, to fill the prescriptions for patients, bill the insurance providers for the cost, and generate a profit, which all four venturers would share in equally. CR 381. Following the formation of the venture, RXpress experienced a sustained period of successful operation and growth. Respondents became involved in a dispute with their business partners about business practices and the handling of fiscal matters. CR 569. Respondents sued the business partners in a public lawsuit. 1 Nothing in the lawsuit alleged or suggested that the Pharmacy was or is guilty of any crime or criminal activity. Rather, the allegations of wrongdoing were leveled at Respondents’ business partners and companies that they owned. CR 569. Even before Respondents’ disputes with their partners had begun, the United States Department of Defense had begun to investigate and even “raid” certain unscrupulous pharmaceutical companies in Mississippi, Alabama and, eventually, Texas. These investigations and raids were prompted by suspicion or proof of said companies committing widespread fraud against the federal government. “TriCare,” the effective benefits examiner arm of the federal government, was the instigator of investigations where fraud was suspected. Needless to say, revelations of “investigations,” much less the “raids,” were the death-knell of the targeted companies. CR 80–89. B. The Dallas Morning News Articles From February through March 2016 The News published a series of articles, many of which were almost exclusively about RXpress. i. The February 5th and 6th Articles The initial article was published on February 5, 2016 at 11:05 p.m. on the Dallas Morning News website. The article was titled, “North Texas pharmacy in federal probe is accused of paying kickbacks to doctors.” The article was republished in the print version of the Dallas Morning News the following morning 2 on the front page under the title, “Drug kickbacks alleged; doctor-pharmacy ties’ legality questioned in lawsuits, investigations.” The continuation of the article on page 2A carried the title, “Compounder faces scrutiny.” The articles continue to make various statements that Respondents have conducted their business in the same manner as others in the compounding industry that have been found to have committed criminal and civil wrongs. CR 80–89. ii. The February 9th, 10th, and 11th Articles The February 9th article1 was published online in the “Crime” section, specifically as part of the “Crime Blog.” The article primarily discusses a new Texas law that enables pharmacy regulators access to pharmacy financial records. The article makes one statement about RXpress: “RXpress Pharmacy of Fort Worth is currently being investigated for possible violations of federal law by the Department of Defense due to its use of Tricare money. Tricare is a health insurance program for the military, similar to Medicare.” This particular online version contained a hyperlink to the February 5th article. The February 10th version 2 was featured in a different section online under a different title, but this article contained no hyperlink to the February 5th article. The February 11th version 3 was published in the print edition under yet another title. 1 CR 98. 2 CR 105. 3 CR 112. 3 iii. February 24th Article The February 24th Article4 was published on The Dallas Morning News Crime Blog. The article was entitled “Dallas firm that marketed compounded pain creams busted in massive health care fraud, kickback case.” The article proceeded to describe the indictment and arrest of the principals of a pharmaceutical marketing company for a massive $65 million healthcare fraud scheme involving TriCare. After describing the individuals, their criminal actions, and two pharmacies implicated in the fraud, Petitioners included the following statement: “It is the first federal indictment in North Texas in connection with the government's largescale criminal investigation into compounding pharmacies and their marketing operations that have received Tricare money. The Dallas Morning News recently reported that a Fort Worth compounding pharmacy is under investigation in connection with similar allegations.” The text in bold contained a hyperlink to the defamatory February 5th article. iv. The March 11th and 13th Articles The March 11th article5 was published on The Dallas Morning News Crime Blog. The article is titled, "North Texas compounding pharmacy under federal scrutiny was booted from private network over fraud concerns." That article was 4 CR 115–122. 5 CR 129–36. 4 republished on March 13th 6 at B1 of the print edition of The Dallas Morning News under the title "Pharmacies booted over fraud concerns; Audit reveals errors at compounders under federal scrutiny.” The article generally mirrors the original February 5th and 6th articles, only this article adds statements regarding Respondent Xpress Compounding and its lawsuit involving a dispute with a pharmacy benefits manager. C. The Aftermath of the Articles: The Lawsuit and Subsequent Search Following the publication of the series of articles, RXpress’s business declined rapidly. RXpress went from filling hundreds of prescriptions per day to only a few. CR 569. RXpress filed suit against The News on March 17, 2016. CR 6–21. The News filed a motion to dismiss under the Texas Citizens Participation Act (“TCPA”). The trial court denied the motion and the court of appeals affirmed. On September 15, 2016, almost eight months after publication of the first article, the Defense Criminal Investigative Service of the Department of Defense searched Respondents’ offices pursuant to a search warrant. 7 Respondents also discovered that Petitioner Krause’s role in publishing the articles was less than passive. As the hearing on The News’ motion had occurred, and without the ability 6 CR 138–41. 7 The News makes much about this event. However, no effort is made to cite any authority to support the suggestion that subsequent events somehow make the eight-month-old publications “true.” By the time the subsequent search occurred, the damage to Respondents was done and the businesses effectively shut down. Moreover, this event happened at such a time after the hearing on the motion to dismiss. The record in this case was set and the only thing remaining was for the trial court to rule. 5 to conduct meaningful discovery, RXpress had only one choice but to notify the trial court of facts that had come to light implicating The News’ role, along with Nathan Halsey, the primary source for the news reports, by filing an advisory to the court and parties. CR 979–1086. It became apparent that the stories were nothing more than a ruse to assist Halsey, with the help of a lawyer from a law firm that previously represented RXpress, in filing what he hoped would become a lucrative qui tam lawsuit involving RXpress.8 SUMMARY OF THE ARGUMENT This defamation case arises from a series of articles written by Dallas Morning News reporter Kevin Krause and published in both the online/electronic and print editions of the paper in February and March 2016. Petitioners have truly avoided what is and should be central to this Court's de novo review—what is the gist of the stories? Despite Petitioners’ statements to the contrary, accurately reporting third-party allegations by weaving them together into a cloth that casts a substantially false and defamatory shadow over Respondents is still actionable. 8 The News asserts that Respondents’ “advisory” was bizarre and unsupported. Respondents have just discovered court records and testimony from a lawsuit initiated by a former K&L Gates lawyer, which directly supports the factual matters stated in Respondents’ Advisory. Concurrent with this response, Respondents are filing a Conditional Motion for Judicial Notice of Court Records. The request is conditional upon this Court’s ruling on the Motion for Judicial Notice filed by Petitioners. As explained more fully in Respondents’ motion and response to the Petitioners’ motion, consideration of these matters is not for this Court or the court of appeals, but rather the trial court in the normal course of this lawsuit. However, should the Court entertain the court records proffered by Petitioners, those proffered by Respondents should likewise be considered. Those records are also included here as Appendix Tabs A–E. For ease of reference, Tab E is simply excerpts of the most relevant portions of the rather voluminous records. 6 The series of DMN articles catapulted Respondents to the forefront of an alleged controversy in which they previously had no involvement. Overnight, Respondents found themselves falsely associated with pharmacies and drug companies that had been found culpable for producing unsafe prescriptions and accused of committing criminal healthcare fraud related to Tricare. The truth and reality, however, is that at the time of publication, Respondents’ only fault was owning and operating a successful business in an industry that had recently come under scrutiny. There was absolutely no basis for Petitioners to drag Respondents into the spotlight and falsely paint them with the same brush as the "bad apples" of the industry actually found to have committed various criminal and civil violations primarily related to Tricare fraud. Neither the Texas or U. S. constitutions, nor Texas statutory law, shields Petitioners from cherry-picking "allegations" from unrelated civil lawsuits and juxtaposing those "facts" with unsupported allegations of criminal conduct and call it privileged or true. The court of appeals applied the correct legal and evidentiary standards in its de novo review of the trial court’s denial of The News’ motion to dismiss. As there is not error, The News’ petition should be denied and this case remanded back to the trial court to continue in the normal course. 7 ARGUMENT I. RESPONSE TO ISSUE 1: THE COURT OF APPEALS CORRECTLY APPLIED THE SUBSTANTIAL TRUTH TEST AND THE TCPA’S BURDEN-SHIFTING FRAMEWORK The News goes to great lengths to ignore the fact that the court of appeals set forth and applied the relevant legal standards applicable to this case. Op. at 7–10. The News further misconstrues the court of appeals’ opinion regarding its analysis of the evidence on the issue of whether the first “gist” of the stories is substantially true. Pet. at 9–11. The court of appeals’ analysis of the evidence properly considered and applied applicable precedent in reaching its conclusion that RXpress presented clear and specific evidence that the publications are not substantially true. Op. at 15–20. A. The Court of Appeals did not err in holding the first gist was not substantially true The News argues that the February 2016 Search Warrant alone establishes the substantial truth that RXpress was under investigation.9 As the court of appeals recognized, however, the inquiry does not end there. Op. at 16–20. A determination of whether the “gist” of a publication is substantially true is determined by an evidentiary analysis. The News argues that the media are accorded “breathing space” to report on official proceedings. Pet. at 8. While such a general statement may be true, the authorities The News cites in support are 9 This is an about face from The News’ consistent position in the courts below that the Search Warrant established the “literal” truth of the statement. 8 distinguishable. KBMT Operating Co., LLC v. Toledo, 492 S.W.3d 710 (Tex. 2016), AOL, Inc. v. Malouf, 05-13-01637-CV, 2015 WL 1535669 (Tex. App.— Dallas Apr. 2, 2015, no pet.), and Basic Capital Mgmt., Inc. v. Dow Jones & Co., Inc., 96 S.W.3d 475, 481–82 (Tex. App.—Austin 2002, no pet.) all involve fully developed judicial or official proceedings involving the government. In this case, at the time the articles were published, The News had only a picture of one substantive page of a sealed search warrant that referenced Respondents. There was no developed record. There were no direct or indirect allegations against anyone mentioned in the Search Warrant. The February Search Warrant was the only piece of evidence The News relied upon to prove the “truth” of its reports. The News incorrectly argues that the court of appeals applied the “ordinary reader” test to the February Search Warrant. The court of appeals did no such thing. Recognizing the circumstantial nature of the evidence, the court of appeals applied an evidentiary analysis guided by this Court’s holding in In re Lipsky, 460 S.W.3d 579, 591 (Tex. 2015), and determined that the February Search Warrant was some evidence of falsity. Op. at 16–17. When considered along with the evidence submitted by RXpress, the court held that the statement that RXpress was “under investigation” for healthcare fraud was not substantially true. 9 B. The Court of Appeals correctly applied the TCPA’s burden-shifting framework The News’ argument that the court of appeals misapplied the TCPA’s burden-shifting framework is less than clear. Under the TCPA, the burden shifts to the nonmovant once the movant establishes that the TCPA applies to the legal action at issue. Tex. Civ. Prac. & Rem. Code Ann. § 27.005 (West). The court of appeals recognized that the parties did not dispute that the TCPA applies to this case. Thus, the burden shifted to RXpress at the outset requiring RXpress to present clear and specific evidence establishing a prima facie case for the elements of its defamation claim. Id. It is difficult to see how the court of appeals misapplied something that essentially occurred by operation of law. The court of appeals merely conducted an evidentiary analysis that considered “the pleadings and supporting and opposing affidavits stating the facts on which the liability or defense is based” as required by the TCPA. See Tex. Civ. Prac. & Rem. Code Ann. § 27.006 (West). The burden had already shifted and the court of appeals properly considered the matters required by the TCPA. II. RESPONSE TO ISSUE 2: THE COURT OF APPEALS CORRECTLY APPLIED THE “ORDINARY READER” STANDARD AND THE SUBSTANTIAL TRUTH TEST The News hinges its argument on the assumption that this Court’s opinion in KBMT Operating Co., LLC v. Toledo, 492 S.W.3d 710 (Tex. 2016) established a new “ordinary reader” standard, while ignoring the more recent opinion in D 10 Magazine Partners, L.P. v. Rosenthal, 529 S.W.3d 429 (Tex. 2017), reh'g denied (Sept. 29, 2017), which the court of appeals applied. Moreover, The News takes the position that the judicial proceedings privilege and “third-party allegations” defense essentially operate as an absolute defense to a claim of defamation. Such an assertion is contrary to long-standing precedent that a publication can “convey a false and defamatory meaning by omitting or juxtaposing facts, even though all the story's individual statements considered in isolation were literally true or non- defamatory.” Neely v. Wilson, 418 S.W.3d 52, 64 (Tex. 2013). Respondents have consistently maintained that that the “gist” of the publications was that Respondents were accused and guilty of violating criminal healthcare fraud laws. This is precisely what The News’ selective juxtaposition of “facts” achieved. A. The Court of Appeals applied the correct “gist” standard The News’ argument that the court of appeals applied the wrong “ordinary reader” standard is based upon its assumption that Toledo established a bright-line standard applicable to all cases. However, this Court’s opinion in D Magazine Partners, L.P. is contrary to The News’ position.10 The News attempts to circumvent the “gist” standard and focuses only on individual statements in 10 This should have been obvious to at least The News’ counsel given they filed an amici letter advocating the very position they advocate on behalf of The News in this case, i.e., that the D Magazine opinion is contrary to Toledo. This Court declined the opportunity to confirm The News’ argument. Further, the amici on whose behalf counsel drafted the amici letter took a starkly different position in seeking clarification on the Toledo holding in their amici brief filed in the Tatum case referenced by The News. See Pet. at 14. 11 isolation rather than assessing the publication as a whole. In essence, to arrive at its conclusion, The News “does the very thing of which it accuses the court of appeals: it considers the article's statements individually instead of in context.” D Magazine Partners, L.P., 529 S.W.3d at 439. The News cannot simply tack on qualifiers such as “according to the lawsuit” or “as alleged” to escape liability. The standard for determining whether a publication is defamatory requires construing “the article as a whole in light of the surrounding circumstances based upon how a person of ordinary intelligence would perceive it.” Turner v. KTRK Television, Inc., 38 S.W.3d 103, 114 (Tex. 2000). At the motion to dismiss stage, a determination that at least one gist is capable of defamatory meaning is sufficient. See D Magazine Partners, L.P., 529 S.W.3d at 439. B. The Court of Appeals correctly applied the substantial truth standard The truth defense now applies to “an accurate reporting of allegations made by a third party regarding a matter of public concern” in actions brought against a newspaper. Tex. Civ. Prac. & Rem. Code Ann. § 73.005 (West). However, this rule does not dispense with the substantial truth doctrine in assessing the truth or falsity of a publication. A publication can “convey a false and defamatory meaning by omitting or juxtaposing facts, even though all the story's individual statements considered in isolation were literally true or non-defamatory.” Neely, 418 S.W.3d at 64. Accurately reporting isolated statements does not shield Appellants from 12 liability where the publication as a whole is not substantially true. This was stated and applied by the court of appeals and was the central argument advanced by Respondents at all stages of this case. To accept The News’ argument would be to grant media defendants literal immunity from defamation liability so long as they qualify a statement by attributing it to a third-party’s allegation. Further, The News’ argument that “accuracy is the touchstone of the judicial proceedings privilege” is simply wrong. The standard for the judicial proceedings privilege requires that the report be a “fair, true, and impartial” account. See Tex. Civ. Prac. & Rem. Code Ann. § 73.002(a); (b)(1)(A) (West). The court of appeals correctly applied this provision in determining that by selectively reporting only allegations of healthcare fraud from lawsuits that had virtually nothing to do with healthcare fraud. The references to any healthcare fraud-like statements only appeared in isolation among single filings among the entirety of the cases. Thus, the accounts were not “fair, true, and impartial.” III. REVIEW IS NOT WARRANTED BASED ON A BARE ASSERTION THAT RESPONDENTS’ EVIDENCE WAS “FALSE” The matter before this court is an interlocutory appeal from an order denying a motion to dismiss under the TCPA. The TCPA sets forth a specific procedural framework for dismissal of unmeritorious claims to which the statute applies. That framework includes specific mandatory deadlines for filing a motion to dismiss, hearing the motion, and ruling on the motion. The TCPA also establishes what the 13 courts must consider when ruling on a motion to dismiss and suspends all discovery. When a trial court permits limited discovery, as happened in this case, the hearing on the motion must occur no later than 120 days after the motion was filed. Tex. Civ. Prac. & Rem. Code Ann. § 27.003 (West). Petitioners’ filed their motion to dismiss on May 23, 2017. CR 48. The trial court held the hearing on Petitioners’ motion to dismiss 116 days later on September 15, 2016. CR 647. The statute requires the trial court rule on the motion no more than 30 days after the hearing, which, in this case, was Monday, October 17, 2016. By law, the trial court could not have considered any additional evidence after October 17, 2016, even if wanted to. Nor could the trial court issue any kind of ruling relative to the motion to dismiss after October 17, 2016, whether or not it ruled on the motion. The 30-day deadline for the trial court to rule is mandatory and gives the trial court no discretion to grant extensions of time. Inwood Forest Cmty. Improvement Ass'n v. Arce, 485 S.W.3d 65, 70 (Tex. App.—Houston [14th Dist.] 2015, pet. denied). The trial court’s options are to rule to dismiss or to not dismiss the legal action. Id. If the trial court does not rule within 30 days, the TCPA mandates the motion is considered denied by operation of law. Tex. Civ. Prac. & Rem. Code Ann. § 27.008(a) (West). 14 Given the deadlines, the actual court records filed in a separate case five and seven months after the hearing deadline could not have been before the trial court. That the documents contain pleading allegations of an entity affiliated with Respondents that may raise a fact question as to the knowledge or belief of Respondents positions or arguments in this case makes no difference. This is not a case in which an unjust judgment has been entered. Respondents are quite certain that Petitioners will be free to explore these court records and the factual inferences they raise in the normal course of discovery and trial upon remand should they choose. But these matters are neither for this Court’s consideration nor appropriate for remand to the trial court for a second bite at the TCPA apple. 11 See SEI Bus. Sys., Inc. v. Bank One Texas, N.A., 803 S.W.2d 838, 841 (Tex. App.—Dallas 1991, no writ) (denying request for judicial notice of certified records of the Secretary of State that were not before the trial court, as doing so would essentially make the court of appeals a court of general, rather than appellate, jurisdiction). Had it not been for Respondents’ request for discovery, which resulted in Petitioners acquiring an allegedly authenticated version of the entire search warrant, this hearing and ruling would have come well before September 15, 2016. It appears Petitioners will stop at nothing to avoid facing Respondents’ meritorious claims on 11 If Respondents’ allegations regarding Petitioners’ role in publishing the stories with knowledge that the initial search warrant was essentially false prove to be true after discovery, Respondents doubt they could claim that Petitioners withheld material information during the TCPA phase. Petitioners chose to utilize the TCPA and its discovery stay then vehemently opposed a request to depose Krause as was their right under the statute. 15 even playing field without the benefit of a statutory shield from discovery to hide behind. In re Lowe's Home Centers, L.L.C., 13-16-00493-CV, 2017 WL 3205522 (Tex. App.—Corpus Christi July 28, 2017, no pet.) for the proposition that false testimony was the extraordinary circumstance that was the basis for the court in that case to grant mandamus relief. First, the case is distinguishable in two obvious respects: it is a mandamus proceeding that is decided under specific standards and the case involves a venue challenge. Second, the basis for the court’s decision was not the extraordinary circumstance of “false testimony.” The “extraordinary circumstance” was a plaintiff non-suiting after a venue determination had been made in one county and refiling the suit in another county. Indeed, the word “false” appears only two times in the opinion. “An appellate court may take judicial notice of a relevant fact that is either (1) generally known within the territorial jurisdiction of the trial court or (2) capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned.” Freedom Communications, Inc. v. Coronado, 372 S.W.3d 621, 623 (Tex. 2012) (citing Tex. R. Evid. 201(b) and Office of Pub. Util. Counsel v. Pub. Util. Com'n of Texas, 878 S.W.2d 598, 600 (Tex. 1994) (per curiam) (internal quotes omitted). “Under this standard, a court will take judicial notice of another court's records if a party provides proof of the records.” Freedom 16 Communications, Inc., 372 S.W.3d at 623. However, even where court records themselves are properly before a court under this rule, a court “may not take judicial notice of the truth of factual statements and allegations contained in the pleadings, affidavits, or other documents in the file.” Guyton v. Monteau, 332 S.W.3d 687, 693 (Tex. App.—Houston [14th Dist.] 2011, no pet.); cf. In re C.S., 208 S.W.3d 77, 81 (Tex.App.-Fort Worth 2006, pet. denied) (“It is appropriate for a court to take judicial notice of a file in order to show that the documents in the file are a part of the court's files, that they were filed with the court on a certain date, and that they were before the court at the time of the hearing.”). Further, “appellate courts are reluctant to take judicial notice of evidence when the trial court was not afforded the opportunity to examine and take into consideration that evidence.” Tran v. Fiorenza, 934 S.W.2d 740, 742 (Tex. App.— Houston [1st Dist.] 1996, no writ); see also Sparkman v. Maxwell, 519 S.W.2d 852, 855 (Tex. 1975) (declining to take judicial notice in part stating reluctance of appellate courts to take notice of matters when the trial court was not requested to do so and had no opportunity to examine the source material). Thus, “[a]s a general rule, appellate courts take judicial notice of facts outside the record only to determine jurisdiction over an appeal or to resolve matters ancillary to decisions which are mandated by law.” Freedom Communications, Inc., 372 S.W.3d at 623 17 (citing SEI Business Systems, Inc., 803 S.W.2d at 841). No one has questioned this court’s jurisdiction, and judicial notice for the reasons urged by Petitioners is not proper. CONCLUSION AND PRAYER In this case, The News took a “shoot first and ask questions later” approach and the resulting casualty was the Respondents’ business and nearly their livelihood. Both the trial court and the court of appeals analyzed the evidence and the law and determined that, at least at this early stage of the case, Respondents’ claims are meritorious and deserve to proceed in the normal course. Both sides have uncovered evidence that was otherwise unavailable at the time of the hearing on The News’ motion to dismiss. As two courts have determined that Respondents have carried their burden, Respondents should be permitted to test their case with the benefit of discovery to develop those matters which have only recently come to light. The court of appeals has not misconstrued or misapplied the law. Rather, the court of appeals applied all the precedent of this Court on the subject matter at hand. Respondents pray that The News’ petition be denied and that the case continue in the trial court. Respondents so pray and pray for general relief. 18 Respectfully submitted, __________________________________ Robert J. Myers, SBN 14765380 John J. Shaw, SBN 24079312 MYERS ✯LAW 2525 Ridgmar Blvd., Ste. 150 Fort Worth, TX 76116 Tel: (817) 731-2500 Fax: (817) 731-2501 rmyers@myerslawtexas.com jshaw@myerslawtexas.com Counsel for Respondents 19 CERTIFICATE OF COMPLIANCE I hereby certify that the foregoing Respondents’ Response to Petition for Review complies with the type-volume limitation of Texas Rule of Appellate Procedure 9.4(i)(2) because it contains 4,449 words, excluding those parts exempted by Texas Rule of Appellate Procedure 9.4(i)(1). _____ ___________________________ John J. Shaw 20 CERTIFICATE OF SERVICE I certify that on December 21, 2017, I used the Court’s electronic case filing system to filed this Respondents’ Response to Petition for Review and served this document on the following counsel in the manner stated below: Thomas S. Leatherbury Marc A. Fuller Kimberly R. McCoy Margaret D. Terwey VINSON & ELKINS, LLP 2001 Ross Avenue, Ste. 3700 Dallas, TX 75201 _____ ___________________________ John J. Shaw 21 INDEX TO APPENDIX Tab A – Plaintiff’s Original Petition Tab B – Plaintiff’s Amended Petition Tab C – Plaintiff’s Motion to Compel Tab D – Supplement to Plaintiff’s Motion to Compel Tab E – Excerpts from Supplement to Plaintiff’s Motion to Compel 22 TAB A FILED DALLAS COUNTY 9/29/2017 1:54 PM FELICIA PITRE DISTRICT CLERK Marissa Pittman NB~-17-13448 BNM, § IN THE DISTRICT COURT § Plaintiff, § § v. § DALLAS COUNTY, TEXAS § JOHN/JANE DOES 1-10, § § Defendants. § - -- JUDICIAL DISTRICT PLAINTIFF'S ORIGINAL PETITION TO THE HONORABLE DISTRICT JUDGE OF SAID COURT: COMES NOW, Plaintiff BNM ("Plaintiff'), and files this, Plaintiff's Original Petition against Defendants JOHN/JANE DOES 1-10 ("Defendants") and, for cause, would respectfully show unto this Honorable Court as follows: NATURE OF THE ACTION 1. This suit is the vehicle through which the Plaintiff can recover against the outlandish, brazen acts of the Defendants, morally bankrupt individuals unlawfully tarnishing the reputation of a highly decorated former Assistant United States Attorney. The Plaintiff brings this claim for defamation and tortious interference with contract/prospective business advantage. 2. Plaintiff alleges that as a proximate result of the tortious and willful conduct of the Defendants, he has suffered financial damages. The Defendants have committed extraordinary acts of dishonesty and deceit towards Plaintiff. Therefore, the Plaintiff seeks all compensatory damages allowed under Texas law for the injuries caused by their tortious acts and om1ss1ons. DISCOVERY CONTROL PLAN 3. Discovery shall be conducted under Level 3 pursuant to Rule 190.03 of the TEXAS RULES OF CIVIL PROCEDURE. PARTIES 4. Plaintiff BNM can be served by and through his undersigned counsel of record. 5. Defendant JOHN/JANE DOES 1-10 are unknown at this time but the Plaintiff will supplement with the individual names of the Defendants. 6. This Honorable Court has jurisdiction over this matter, as the amount of the dispute is within the jurisdictional limits of this Honorable Court. Venue is proper in Dallas County, Texas, as it is a county in which a substantial part of the events or omissions giving rise to the claims described herein occurred. This case is not subject to removal. 7. At this time, the Plaintiff is seeking more than $1,000,000.00 in damages against the Defendants, jointly and severally, and an expedited trial by jury. This case is not subject to removal to federal court FACTUAL BACKGROUND 8. This action arises out of Defendant's blatant, egregious, and inequitable trespasses to, and violations of Plaintiff, Plaintiffs rights and interests, as well as numerous breaches of duties Defendants owed to Plaintiff. Defendants' fraud, negligence, and intentional torts against Plaintiff, includes the infliction of severe physical and emotional hardship upon the Plaintiff, and the intentional infliction of harm to Plaintiff. In addition, upon information and belief, Defendants knowingly, recklessly, or negligently pursued Plaintiff with tactics designed to deceive, coerce, harass, or force Plaintiff to engage in dealings with the Defendants. 9. The Defendants have knowingly, recklessly, and/or negligently engaged, or have allowed themselves to be engaged, in various deceptive techniques and trade practices designed to mislead the Plaintiff. Defendants and/or their principals, agents, franchisors, and employees have knowingly, recklessly, and/or negligently misrepresented the true nature of their dealings with the Plaintiff and knowingly, recklessly, or negligently omitted the disadvantages of associating with the Defendants. In addition, upon information and belief, Defendants knowingly, recklessly, or negligently pursued Plaintiff with tactics designed to deceive, coerce, harass, or force Plaintiff to engage in dealings with the Defendants. 10. Plaintiff brings this action to remedy the harm that Defendant has caused him: (1) by falsely and fraudulently inducing him to enter into and execute contracts; (2) by fraudulently inducing him to enter into and execute contracts under duress; (3) by committing numerous intentional torts against him including, but not limited to, numerous common law torts; (4) by inflicting severe and intentional emotional distress; (5) by stalking, harassing, and threatening Plaintiff; (6) by acting negligently toward Plaintiff; (7) by acting recklessly with wanton disregard to the rights of Plaintiff; (8) by making fraudulent and negligent misrepresentations to Plaintiff and others; (9) by failing to disclose material information to Plaintiff; and; (10) by breaching fiduciary duties to Plaintiff. CAUSES OF ACTION TORTIOUS INTERFERENCE WITH CONTRACTS AND/OR PROSPECTIVE BUSINESS RELATIONS 11. Plaintiff re-alleges each and every one of the foregoing paragraphs as though set forth fully herein. 12. The Defendant acted with the intent to interfere with existing contracts as well as to prevent execution of prospective contracts. The Plaintiff has lost the opportunity to enter into several contracts as result of the interference by the Defendant. On information and belief, the wrongful acts of the Defendant set forth in this Count were done maliciously, oppressively, and with the intent to harm the Plaintiff, and the Plaintiff is entitled to punitive and exemplary damages to be ascertained according to proof, which is appropriate to punish and set an example of the Defendant. Accordingly, the Plaintiff respectfully request that exemplary damages be awarded against the Defendant in a sum that is not less than three (3) times the amount of Plaintiffs actual damages. NEGLIGENCE AND GROSS NEGLIGENCE 13. Plaintiff re-alleges each and every one of the foregoing paragraphs as though set forth fully herein. 14. The Defendants owed and still owes duties to the Plaintiff. The Defendants breached these duties which proximately caused damages to the Plaintiff. 15. In addition, Plaintiff will show that the Defendants' acts and omissions, when viewed objectively from the Defendants' viewpoint, involved an extreme degree of risk, considering the magnitude and potential harm to the Plaintiff. 16. And, the Defendants had actual, subjective awareness of the risk, but still proceeded with their scheme with a conscious indifference to the rights, safety or welfare of the Plaintiff. 17. As a proximate result of the Defendants' negligence and gross negligence, the Plaintiff has been damaged and he seeks to recover all actual, consequential, incidental, and exemplary damages. DEFAMATION, SLANDER, AND LIBEL 18. Plaintiff re-alleges each and every one of the foregoing paragraphs as though set forth fully herein. 19. The Defendants published false statements that negatively affected the Plaintiff. No privilege, absolute or conditional, attaches to these statements. 20. The Defendants made these statements to third parties without any legitimate interest in the information contained therein. 21. The Defendants' false statements and omissions caused damages to the Plaintiff. 22. These statements are unambiguous and defamatory or, alternatively, defamatory by innuendo or implication. 23. Each of the above-referenced acts and omissions, single or in combination with others, constituted defamation, libel, and slander as well as defamation, libel, and slander per se and caused the damages suffered by the Plaintiff. 24. As a result, the Plaintiff has been damaged and seeks to recover all actual, consequential, and incidental damages caused by the defamation/slander. 25. On information and belief, the wrongful acts of the Defendants set forth in this Count were done maliciously, oppressively, and with the intent to harm the Plaintiff, and the Plaintiff is entitled to punitive and exemplary damages to be ascertained according to proof, which is appropriate to punish and set an example of the Defendants. Accordingly, the Plaintiff respectfully requests that exemplary damages be awarded against the Defendants in a sum that is not less than three (3) times the amount of Plaintiffs actual damages. BUSINESS DISPARAGEMENT 26. Plaintiff incorporates each and every one of the foregoing paragraphs as though set forth fully herein. 27. Defendants published disparaging words about Plaintiffs economic interests. 28. The words were false. 29. Defendants published the words with malice. 30. Defendants published the words without privilege. 31. The publication caused special damages. 32. As a result, Plaintiff has been damaged and seeks to recover all actual, consequential, and incidental damages caused by Defendants' conduct. 33. On information and belief, the wrongful acts of Defendants set forth in this Cause of Action were done maliciously, oppressively, and with the intent to harm Plaintiff, and Plaintiff is entitled to punitive and exemplary damages to be ascertained according to proof, which is appropriate to punish and set an example of Defendants. Accordingly, Plaintiff respectfully requests that exemplary damages be awarded against the Defendants in a sum that is not less than three (3) times the amount of Plaintiffs actual damages. INTENTIONAL INFLICTION OF EMOTIONAL DISTRESS 34. Plaintiff incorporates each and every one of the foregoing paragraphs as though set forth fully herein. 35. The Defendants are fully aware of the facts that support this claim. The Defendants' conduct was extreme and outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency, as to be regarded as atrocious, utterly intolerable, despicable, and the bottom of depravity in a civilized community. 36. The Defendants' conduct proximately caused Plaintiff damages in that it caused Plaintiff to suffer severe emotional distress. In particular, the Defendants' conduct was the direct and proximate cause of Plaintiffs severe mental pain and anguish. In addition, the Plaintiff continues to suffer from the actions of the Defendants. 3 7. In addition to severe emotional distress, the Plaintiff has suffered and will continue to suffer, additional damages as a proximate result of the Defendants' conduct in that, in all reasonable probability, Plaintiff will continue to suffer this mental pain and anguish for a long time into the future - most likely the rest of his life. The conduct of the Defendants were maliciously negligent and/or grossly negligent, and fraudulent so as to entitle Plaintiff to recover exemplary damages. In this connection, Plaintiff will show that as a result of Defendants' conduct, Plaintiff has suffered losses of time and other expenses, including attorney's fees incurred in the investigation and prosecution of this action. Accordingly, Plaintiff asks that exemplary damages be awarded against the Defendants in a sum that is not less than three (3) times the amount of Plaintiffs actual damages. NEGLIGENT MISREPRESENTATION 38. The Plaintiff re-alleges each and every one of the foregoing paragraphs as though set fully herein. 39. By reason of the Plaintiffs reliance on the representations and fraudulent concealment of material facts by the Defendants, the Plaintiff has been damaged. 40. The Defendants employed a scheme and common course of conduct to defraud the Plaintiff. The misrepresentations and concealment of facts by Defendants were material. 41. On information and belief, the Defendants knew the misrepresentations and concealment of facts set forth herein were false. 42. Alternatively, the Defendants acted with reckless disregard whether the representations made by Defendants were true. The Plaintiff relied upon the misrepresentations, lies, and the facts concealed by Defendants. The Plaintiffs reliance on these representations and concealment of facts was reasonable and justifiable. 43. The Plaintiff has suffered losses because of the wrongful conduct of the Defendants. CONSPIRACY TO COMMIT INTENTIONAL TORTS SET FORTH HEREINABOVE 44. The Plaintiff re-alleges each and every one of the foregoing paragraphs as though set fully herein. 45. Each Defendant was a member of a combination of two or more persons. 46. The object of the combination was to accomplish an unlawful purpose or a lawful purpose by unlawful means. 4 7. The members had a meeting of the minds on the object or course of action. 48. One or more of the members committed an unlawful, overt act to further the object or course of action. 49. The plaintiff suffered injury as a proximate result of the wrongful act. 50. As a result, Plaintiff has been damaged and seeks to recover all actual, consequential, and incidental damages caused by Defendants' conduct. 51. On information and belief, the wrongful acts of Defendants set forth in this Cause of Action were done maliciously, oppressively, and with the intent to harm Plaintiff, and Plaintiff is entitled to punitive and exemplary damages to be ascertained according to proof, which is appropriate to punish and set an example of Defendants. Accordingly, Plaintiff respectfully requests that exemplary damages be awarded against the Defendants in a sum that is not less than three (3) times the amount of Plaintiff's actual damages. 52. Plaintiff further respectfully requests that all members of the conspiracy be held jointly and severally liable for all acts done by any of them in furtherance of the combination. Such joint and several liability is respectfully requested to extend beyond the wrongdoer to include those who have merely planned, assisted, or encouraged the wrongdoer's acts. AIDING AND ABETTING THE COMMISSION OF INTENTIONAL TORTS SET FORTH HEREIN 53. A primary actor committed a tort. 54. Defendants had knowledge that the primary actor's conduct constituted a tort. 55. Defendants had the intent to assist the primary actor in committing the tort. 56. Defendants gave the primary actor assistance or encouragement. 57. Defendants' assistance or encouragement was a substantial factor in causing the tort. 58. As a result, Plaintiff has been damaged and seeks to recover all actual, consequential, and incidental damages caused by Defendants' conduct. 59. Plaintiff further respectfully requests that the primary actor and all Defendants who had the intent to assist and who assisted or encouraged the primary actor be held jointly and severally liable for all acts done. Such joint and several liability is respectfully requested to extend beyond the wrongdoer to include those who have merely planned, assisted, or encouraged the wrongdoer's acts. ATTORNEYS FEES 60. Plaintiff re-alleges each and every one of the foregoing paragraphs as though set forth fully herein. Request is made for all costs and reasonable and necessary attorneys' fees incurred by or on behalf of Plaintiff, and all fees necessary in the event of an appeal of this cause to the Court of Appeals and the Supreme Court of Texas, as the Court deems equitable and just. CONDITIONS PRECEDENT 61. All conditions precedent to the Plaintiffs right of recovery have been performed, have occurred, or have been waived. NO WAIVER 62. By filing this lawsuit, Plaintiff does not waive or release any rights, claims, causes of action, or defenses, or make any election of remedies that they have, but expressly reserve such rights, claims, causes of action, and defenses. PRAYER WHEREFORE, PREMISES CONSIDERED, Plaintiff respectfully requests that the Defendants be cited to appear and answer, as required by law, and that Plaintiff have the following relief: • Judgment against the Defendants for pecuniary, economic, non-economic, special, general, consequential, and incidental damages in excess of $1,000,000.00; • Actual damages in the amount determined to have been sustained by the Plaintiff; • Compensatory damages; • Pre- and Post-Judgment Interest; • Costs of this lawsuit, including reasonable attorney's fees, experts' fees, and other disbursements; and • Such other and further relief, at law or in equity, to which the Plaintiff may show himself to be justly entitled. Dated, September 29, 2017 Respectfully submitted, JAMES S. BELL, PC Isl James S. Bell By: James S. Bell James S. Bell P.C. State Bar No. 24049314 james@jamesbellpc.com 2808 Cole Ave. Dallas, TX 75204 (214) 698-9000 (Telephone) ATTORNEY PLAINTIFF CERTIFICATE OF COMPLIANCE WITH LOCAL RULE 1.06: RELATED CASES On information and belief, this case probably requires transfer pursuant to Local Rule 1.06. The related case was filed under Cause No. DC-15-14415; BRADEN RICHARD POWER, et al vs. CRAIG PATRICK POWER, et al. in the 134th District Court of Dallas County, Texas. ' I I • TAB B FILED DALLAS COUNTY 10/26/2017 6:21 PM FELICIA PITRE DISTRICT CLERK NO. DC-17-13448 BRANDON MCCARTHY, § IN THE DISTRICT COURT § Plaintiff, § § v. § DALLAS COUNTY, TEXAS § JOHN/JANE DOES 1-10, § § Defendants. § 134th JUDICIAL DISTRICT PLAINTIFF'S FIRST AMENDED PETITION TO THE HONORABLE JUDGE OF SAID COURT: COMES NOW, Plaintiff BRANDON MCCARTHY ("Plaintiff'), and files this, Plaintiffs Original Petition against Defendants JOHN/JANE DOES 1-10 ("Defendants") and, for cause, would respectfully show unto this Honorable Court as follows: NATURE OF THE ACTION 1. This suit is the vehicle through which the Plaintiff can recover against the outlandish, brazen acts of the Defendants, morally bankrupt individuals unlawfully tarnishing the reputation of a highly decorated former Assistant United States Attorney. The Plaintiff brings this claim for defamation and tortious interference with contract/prospective business advantage. 2. Plaintiff alleges that as a proximate result of the tortious and willful conduct of the Defendants, he has suffered financial damages. The Defendants have committed extraordinary acts of dishonesty and deceit towards Plaintiff. Therefore, the Plaintiff seeks all compensatory damages allowed under Texas law for the injuries caused by their tortious acts and omissions. DISCOVERY CONTROL PLAN 3. Discovery shall be conducted under Level 3 pursuant to Rule 190.03 of the PLAINTIFF'S FIRST AMENDED PETITION Page I of 11 TEXAS RULES OF CIVIL PROCEDURE. PARTIES 4. Plaintiff BRANDON MCCARTHY can be served by and through his undersigned counsel of record. 5. Defendant JOHN/JANE DOES 1-10 are unknown at this time but the Plaintiff will supplement with the individual names of the Defendants. 6. This Honorable Court has jurisdiction over this matter, as the amount of the dispute is within the jurisdictional limits of this Honorable Court. Venue is proper in Dallas County, Texas, as it is a county in which a substantial part of the events or omissions giving rise to the claims described herein occurred. This case is not subject to removal. 7. At this time, the Plaintiff is seeking more than $1,000,000.00 in damages against the Defendants, jointly and severally, and an expedited trial by jury. This case is not subject to removal to federal court FACTUAL BACKGROUND 8. This action arises out of Defendant's blatant, egregious, and inequitable trespasses to, and violations of Plaintiff, Plaintiffs rights and interests, as well as numerous breaches of duties Defendants owed to Plaintiff. Defendants' fraud, negligence, and intentional torts against Plaintiff, includes the infliction of severe physical and emotional hardship upon the Plaintiff, and the intentional infliction of harm to Plaintiff. In addition, upon information and belief, Defendants knowingly, recklessly, or negligently pursued Plaintiff with tactics designed to deceive, coerce, harass, or force Plaintiff to engage in dealings with the Defendants. 9. The Defendants have knowingly, recklessly, and/or negligently engaged, or have allowed themselves to be engaged, in various deceptive techniques and trade practices designed to PLAINTIFF'S FIRST AMENDED PETITION Page 2of11 mislead the Plaintiff. Defendants and/or their principals, agents, franchisors, and employees have knowingly, recklessly, and/or negligently misrepresented the true nature of their dealings with the Plaintiff and knowingly, recklessly, or negligently omitted the disadvantages of associating with the Defendants. In addition, upon information and belief, Defendants knowingly, recklessly, or negligently pursued Plaintiff with tactics designed to deceive, coerce, harass, or force Plaintiff to engage in dealings with the Defendants. 10. Plaintiff brings this action to remedy the harm that Defendant has caused him: (1) by falsely and fraudulently inducing him to enter into and execute contracts; (2) by fraudulently inducing him to enter into and execute contracts under duress; (3) by committing numerous intentional torts against him including, but not limited to, numerous common law torts; (4) by inflicting severe and intentional emotional distress; (5) by stalking, harassing, and threatening Plaintiff; (6) by acting negligently toward Plaintiff; (7) by acting recklessly with wanton disregard to the rights of Plaintiff; (8) by making fraudulent and negligent misrepresentations to Plaintiff and others; (9) by failing to disclose material information to Plaintiff; and; (10) by breaching fiduciary duties to Plaintiff. CAUSES OF ACTION TORTIOUS INTERFERENCE WITH CONTRACTS AND/OR PROSPECTIVE BUSINESS RELATIONS 11. Plaintiff re-alleges each and every one of the foregoing paragraphs as though set forth fully herein. 12. The Defendant acted with the intent to interfere with existing contracts as well as to prevent execution of prospective contracts. The Plaintiff has lost the opportunity to enter into several contracts as result of the interference by the Defendant. On information and belief, the PLAINTIFF'S FIRST AMENDED PETITION Page 3of11 wrongful acts of the Defendant set forth in this Count were done maliciously, oppressively, and with the intent to harm the Plaintiff, and the Plaintiff is entitled to punitive and exemplary damages to be ascertained according to proof, which is appropriate to punish and set an example of the Defendant. Accordingly, the Plaintiff respectfully request that exemplary damages be awarded against the Defendant in a sum that is not less than three (3) times the amount of Plaintiffs actual damages. NEGLIGENCE AND GROSS NEGLIGENCE 13. Plaintiff re-alleges each and every one of the foregoing paragraphs as though set forth fully herein. 14. The Defendants owed and still owes duties to the Plaintiff. The Defendants breached these duties which proximately caused damages to the Plaintiff. 15. In addition, Plaintiff will show that the Defendants' acts and omissions, when viewed objectively from the Defendants' viewpoint, involved an extreme degree of risk, considering the magnitude and potential harm to the Plaintiff. 16. And, the Defendants had actual, subjective awareness of the risk, but still proceeded with their scheme with a conscious indifference to the rights, safety or welfare of the Plaintiff. 17. As a proximate result of the Defendants' negligence and gross negligence, the Plaintiff has been damaged and he seeks to recover all actual, consequential, incidental, and exemplary damages. DEFAMATION, SLANDER, AND LIBEL 18. Plaintiff re-alleges each and every one of the foregoing paragraphs as though set forth fully herein. PLAINTIFF'S FIRST AMENDED PETITION Page 4 ofll 19. The Defendants published false statements that negatively affected the Plaintiff. No privilege, absolute or conditional, attaches to these statements. 20. The Defendants made these statements to third parties without any legitimate interest in the information contained therein. 21. The Defendants' false statements and omissions caused damages to the Plaintiff. 22. These statements are unambiguous and defamatory or, alternatively, defamatory by innuendo or implication. 23 . Each of the above-referenced acts and omissions, single or in combination with others, constituted defamation, libel, and slander as well as defamation, libel, and slander per se and caused the damages suffered by the Plaintiff. 24. As a result, the Plaintiff has been damaged and seeks to recover all actual, consequential, and incidental damages caused by the defamation/slander. 25. On information and belief, the wrongful acts of the Defendants set forth in this Count were done maliciously, oppressively, and with the intent to harm the Plaintiff, and the Plaintiff is entitled to punitive and exemplary damages to be ascertained according to proof, which is appropriate to punish and set an example of the Defendants. Accordingly, the Plaintiff respectfully requests that exemplary damages be awarded against the Defendants in a sum that is not less than three (3) times the amount of Plaintiff's actual damages. BUSINESS DISPARAGEMENT 26. Plaintiff incorporates each and every one of the foregoing paragraphs as though set forth fully herein. 27. Defendants published disparaging words about Plaintiff's economic interests. PLAINTIFF'S FIRST AMENDED PETITION Page 5of11 28. The words were false. 29. Defendants published the words with malice. 30. Defendants published the words without privilege. 31 . The publication caused special damages. 32. As a result, Plaintiff has been damaged and seeks to recover all actual, consequential, and incidental damages caused by Defendants' conduct. 33. On information and belief, the wrongful acts of Defendants set forth in this Cause of Action were done maliciously, oppressively, and with the intent to harm Plaintiff, and Plaintiff is entitled to punitive and exemplary damages to be ascertained according to proof, which is appropriate to punish and set an example of Defendants. Accordingly, Plaintiff respectfully requests that exemplary damages be awarded against the Defendants in a sum that is not less than three (3) times the amount of Plaintiff's actual damages. INTENTIONAL INFLICTION OF EMOTIONAL DISTRESS 34. Plaintiff incorporates each and every one of the foregoing paragraphs as though set forth fully herein. 35. The Defendants are fully aware of the facts that support this claim. The Defendants' conduct was extreme and outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency, as to be regarded as atrocious, utterly intolerable, despicable, and the bottom of depravity in a civilized community. 36. The Defendants' conduct proximately caused Plaintiff damages in that it caused Plaintiff to suffer severe emotional distress. In pa11icular, the Defendants' conduct was the direct and proximate cause of Plaintiff's severe mental pain and anguish. In addition, the Plaintiff PLAINTIFF'S FIRST AMENDED PETITION Page 6of11 continues to suffer from the actions of the Defendants. 37. In addition to severe emotional distress, the Plaintiff has suffered and will continue to suffer, additional damages as a proximate result of the Defendants' conduct in that, in all reasonable probability, Plaintiff will continue to suffer this mental pain and anguish for a long time into the future - most likely the rest of his life. The conduct of the Defendants were maliciously negligent and/or grossly negligent, and fraudulent so as to entitle Plaintiff to recover exemplary damages. In this connection, Plaintiff will show that as a result of Defendants' conduct, Plaintiff has suffered losses of time and other expenses, including attorney's fees incurred in the investigation and prosecution of this action. Accordingly, Plaintiff asks that exemplary damages be awarded against the Defendants in a sum that is not less than three (3) times the amount of Plaintiffs actual damages. NEGLIGENT MISREPRESENTATION 38. The Plaintiff re-alleges each and every one of the foregoing paragraphs as though set fully herein. 39. By reason of the Plaintiffs reliance on the representations and fraudulent concealment of material facts by the Defendants, the Plaintiff has been damaged. 40. The Defendants employed a scheme and common course of conduct to defraud the Plaintiff The misrepresentations and concealment of facts by Defendants were material. 41. On information and belief, the Defendants knew the misrepresentations and concealment of facts set forth herein were false. 42. Alternatively, the Defendants acted with reckless disregard whether the representations made by Defendants were true. The Plaintiff relied upon the misrepresentations, lies, and the facts concealed by Defendants. The Plaintiffs reliance on these representations and PLAINTIFF'S FIRST AMENDED PETITION Page 7of11 concealment of facts was reasonable and justifiable. 43. The Plaintiff has suffered losses because of the wrongful conduct of the Defendants. CONSPIRACY TO COMMIT INTENTIONAL TORTS SET FORTH HEREINABOVE 44. The Plaintiff re-alleges each and every one of the foregoing paragraphs as though set fully herein. 45. Each Defendant was a member of a combination of two or more persons. 46. The object of the combination was to accomplish an unlawful purpose or a lawful purpose by unlawful means. 47. The members had a meeting of the minds on the object or course of action. 48. One or more of the members committed an unlawful, overt act to further the object or course of action. 49. The plaintiff suffered injury as a proximate result of the wrongful act. 50. As a result, Plaintiff has been damaged and seeks to recover all actual, consequential, and incidental damages caused by Defendants' conduct. 51. On information and belief, the wrongful acts of Defendants set forth in this Cause of Action were done maliciously, oppressively, and with the intent to harm Plaintiff, and Plaintiff is entitled to punitive and exemplary damages to be ascertained according to proof, which is appropriate to punish and set an example of Defendants. Accordingly, Plaintiff respectfully requests that exemplary damages be awarded against the Defendants in a sum that is not less than three (3) times the amount of Plaintiffs actual damages. 52. Plaintiff further respectfully requests that all members of the conspiracy be held jointly and severally liable for all acts done by any of them in furtherance of the combination. PLAINTIFF'S FIRST AMENDED PETITION Page 8of11 Such joint and several liability is respectfully requested to extend beyond the wrongdoer to include those who have merely planned, assisted, or encouraged the wrongdoer's acts. AIDING AND ABETTING THE COMMISSION OF INTENTIONAL TORTS SET FORTH HEREIN 53. A primary actor committed a tort. 54. Defendants had knowledge that the primary actor's conduct constituted a tort. 55. Defendants had the intent to assist the primary actor in committing the tort. 56. Defendants gave the primary actor assistance or encouragement. 57. Defendants' assistance or encouragement was a substantial factor in causing the tort. 58. As a result, Plaintiff has been damaged and seeks to recover all actual, consequential, and incidental damages caused by Defendants' conduct. 59. Plaintiff further respectfully requests that the primary actor and all Defendants who had the intent to assist and who assisted or encouraged the primary actor be held jointly and severally liable for all acts done. Such joint and several liability is respectfully requested to extend beyond the wrongdoer to include those who have merely planned, assisted, or encouraged the wrongdoer' s acts. ATTORNEYS FEES 60. Plaintiff re-alleges each and every one of the foregoing paragraphs as though set forth fully herein. Request is made for all costs and reasonable and necessary attorneys' fees incurred by or on behalf of Plaintiff, and all fees necessary in the event of an appeal of this cause to the Court of Appeals and the Supreme Court of Texas, as the Court deems equitable and just. CONDITIONS PRECEDENT PLAINTIFF'S FIRST AMENDED PETITION Page 9of11 61 . All conditions precedent to the Plaintiffs right of recovery have been performed, have occurred, or have been waived. NO WAIVER 62. By filing this lawsuit, Plaintiff does not waive or release any rights, claims, causes of action, or defenses, or make any election of remedies that they have, but expressly reserve such rights, claims, causes of action, and defenses. PRAYER WHEREFORE, PREMISES CONSIDERED, Plaintiff respectfully requests that the Defendants be cited to appear and answer, as required by law, and that Plaintiff have the following relief: • Judgment against the Defendants for pecumary, economic, non-economic, special, general, consequential, and incidental damages in excess of $1,000,000.00; • Actual damages in the amount determined to have been sustained by the Plaintiff; • Compensatory damages; • Pre- and Post-Judgment Interest; • Costs of this lawsuit, including reasonable attorney's fees, experts' fees, and other disbursements; and • Such other and further relief, at law or in equity, to which the Plaintiff may show himself to be justly entitled. PLArNTIFF'S FIRST AMENDED PETITION Page IO of 11 Dated, October 26th, 2017 Respectfully submitted, JAMES S. BELL, PC Isl James S. Bell By: James S. Bell James S. Bell P.C. State Bar No. 24049314 james@jamesbellpc.com 2808 Cole Ave. Dallas, TX 75204 (214) 698-9000 (Telephone) ATTORNEY FOR PLAINTIFF PLAINTIFF'S FIRST AMENDED PETITION Page 11 ofll STATE OF TEXAS } COUNrY OF DALLAS I, FELICIA PITRE, Clark of the 01~trl ct of Dallas County, Te"as, do hereby ct rtliy th\h I h .vJ comnamcl •his Instrument to · ea truu Eintl correct cony of the or lgtnal es appears on r;.rm a d v i o e 9 o fr' mw rno:wn s e TI • 10 Q. (BY MR. JAMES BELL) F'm no t aa ki ng you to 11 rm . 13 THE WITNESS: Yes. 14 Q. ( BY IYH~ • J AM'E S IB'E.LL) And yo u ' re go i ng t o re f u s e 15 the identify the name of any attorneys that you've had a 16 relationship with, whether attorney/client or otherwise, 17 based on your Fitth Amendment privilege? 18 A. Yes. 19 Q. Are you going to take the Fifth Amendment with 20 respect to your relationship with Cameron Smith? 21 A. Yes. 22 MR. DAVID BELL: Objection; form. 23 Q. (BY MR. JAMES BELL) Are you going to take the 24 Fifth Amendment -- strike that. 25 Are you taking the Fifth Amendment with EXHIBIT 1 ROUGH DRAFT OF RYAN REYNOLDS - NOVEMBER 10, 2017 - ROUGH DRJ115 1 respect to your relationship with Jim Rolf? 2 A. Yes. 3 MR. DAVID BELL: Objection; form again. 4 Q. (BY MR. JAMES BELL) How much have you paid 5 David Bell or are you taking the Fifth Amendment? 6 MR. DAVID BELL: He's not going to testify 7 about his relationship with his attorney. 8 THE WITNESS: I'm not going to testify 9 about any attorneys. I'm going to plead the Fifth. See 10 Exhibit 1. 11 Q. (BY MR. JAMES BELL) And you're pleading the 12 Fifth to as who your referral source was as to getting 13 to David Bell? 14 MR. DAVID BELL: He's not going to testify 15 about that any conversations with -- or communications 16 with any attorney. Objection; form. 17 Q. (BY MR. JAMES BELL) Okay. I'm -- I'm not 18 asking - - was - - did a nonattorney ref er you to David 19 Bell? 20 MR. DAVID BELL: Objection; form. 21 THE WITNESS: No. 22 Q. (BY MR. JAMES BELL) Okay. So you're going to 23 ref use to answer the question about who - - which 24 attorney was the referral source to David Bell or are 25 you taking the Fifth Amendment? EXHIBIT 1 ROUGH DRAFT OF RYAN REYNOLDS - NOVEMBER 10, 2017 - ROUGH DRt116 1 A. I am, yes. 2 Q. You're taking 3 A. I'm I'm pleading the Fifth Amendment. See 4 Exhibit 1. 5 Q. On September 8th meeting that you had -- strike 6 that. 7 On the -- do you remember on your 8 August 13, 2015, meeting pitching Brandon McCarthy to 9 use your Prisoner Entry Program that you had started? 10 MR. DAVID BELL: Objection; form. 11 Q. (BY MR. JAMES BELL) Is that possible? 12 A. It's possible. 13 Q. And did you do you remember talking about 14 Forrest Park and Dr. Rumloui at that first meeting on 15 August 2013, 2015? 16 A. At K&L Gates? 17 Q. Yes, sir. 18 A. I don't recall it, but I'll not saying it's not 19 possible. 20 Q. Sure. Is it -- is it possible that you spent 21 time talking about your Prisoner Entry Program at K&L 22 Gates at your first meeting with Brandon McCarthy? Yes 23 or no? 24 A. Yes. 25 Q. Is it -- it's also possible that you spent time EXHIBIT 1 ROUGH DRAFT OF RYAN REYNOLDS - NOVEMBER 10, 2017 - ROUGH DRJ117 1 talking about Forest Park Medical Center with Brandon 2 McCarthy at your first meeting at K&L Gates, correct? 3 A. Is the question is it possible? 4 Q. Yes. 5 MR. DAVID BELL: Objection; form. 6 THE WITNESS: Yes. 7 Q. (BY MR. JAMES BELL) And it's possible that you 8 also spoke about Dr. Rumloui with Brandon McCarthy at 9 the first meeting at K&L Gates on or about August 13, 10 2015, correct? 11 A. It's possible. I don't recall. 12 Q. It's also possible that you talked about -- 13 MR. JAMES BELL: I can move this over. I'm 14 sorry. 15 Q. (BY MR. JAMES BELL) It's also possible that 16 you spoke to Brandon McCarthy about a man -- a gentleman 17 by the name Joe Garza? Do you recall that on that 18 August 2013, 2015, meeting? 19 A. It's possible. 20 MR. DAVID BELL: Objection; form. 21 Q. (BY MR. JAMES BELL) When you went to that 22 September 13th meeting, did you understand how Qui Tams 23 worked, or no? 24 A. No. August. 25 Q. I'm sorry. When you showed up to the August EXHIBIT 1 ROUGH DRAFT OF RYAN REYNOLDS - NOVEMBER 10, 2017 - ROUGH DRt118 1 13, 2015, meeting did you understand how Qui Tams 2 worked? 3 A. No. That's why we went there, to primarily see 4 if we could began Brandon's knowledge. 5 Q. On how -- on how a Qui Tam works? 6 A. Correct. 7 Q. You didn't have any information on any 8 compounding pharmacies, doctors, hospitals, correct, at 9 that August meeting? 10 A. Correct. 11 Q. You had some information regarding stock 12 schemes and possibly Dr. Ru ml oui, correct, at that first 13 meeting? 14 A. Possibly. 15 Q. At that first meeting? 16 A. Possibly, yes. 17 Q. You would agree with me that nothing 18 substantive was discussed at that first meeting with 19 Brandon McCarthy in August of 2015, correct? 20 MR. DAVID BELL: Objection; form. 21 THE WITNESS: Nothing substantive, but 22 speaking on Rumloui, now that I recollect, it -- it 23 strikes me as Brandon also thought he was a crook. I 24 mean that all our -- talking about him. Because I did 25 too and he -- he pretty much thought the same. But EXHIBIT 1 ROUGH DRAFT OF RYAN REYNOLDS - NOVEMBER 10, 2017 - ROUGH DRt119 1 there was no specifics talked about as far as what 2 exactly he's done or anything. 3 Q. (BY MR. JAMES BELL) Okay . So you-all - - you 4 recall you remember talking about Dr. Rumloui - - 5 A. Yes. 6 Q. -- at that first meeting? 7 A. I - - I don't know when it was actually was, but 8 I know I've talked to Brandon about Rumloui. 9 Q. And it probably would have been at the first 10 meeting? 11 A. I guess, you know , I 12 MR. DAVID BELL: Don't guess, please. 13 THE WITNESS: Okay. Possibly. 14 Q. (BY MR. JAMES BELL) Okay. And then you would 15 agree with me that nothing substantive was discussed 16 about any pharmacy, hospital, or doctor that you're 17 aware of at that first meeting, correct? 18 A. Correct. 19 MR. DAVID BELL: Objection; form. 20 THE WITNESS: Correct. 21 Q. (BY MR. JAMES BELL) Do you remember the name 22 of -- strike that. 23 Do you know whether or not Gus gave Brandon 24 the name of -- the proper name of any compounding 25 pharmacies or was he just listing them off? Do you EXHIBIT 1 ROUGH DRAFT OF RYAN REYNOLDS - NOVEMBER 10, 2017 - ROUGH DRt120 1 remember? 2 A. I don't recall. 3 Q, So you don't recall which pharmacies Gus talked 4 to Brandon about, correct? 5 A. Correct. 6 MR. DAVID BELL: Objection; form. 7 THE WITNESS: Correct. 8 Q. (BY MR. JAMES BELL) And whatever pharmacies 9 were mentioned, you don't remember any criminal conduct 10 or willful conduct that was discussed at that meeting, 11 because you said nothing substantive was discussed, 12 correct? 13 A. Correct. 14 Q. And Brandon McCarthy told you he needed to run 15 a conflict checks, correct? 16 A. Correct. 17 Q. Before he could proceed, cor r ect? 18 A. Correct. 19 Q. Because that was the standard procedure and he 20 wanted to make sure that -- this is his third day at a 21 big tall building law firm - - that he doesn't get in any 22 trouble, right? 23 MR. DAVID BELL: Objection; form. 24 THE WITNESS: Absolutely. 25 Q. (BY MR. JAMES BELL) That was the impression EXHIBIT 1 ROUGH DRAFT Of RYAN REYNOLDS - NOVEMBER 10, 2017 - ROUGH DRt121 1 that you got? 2 A. Absolutely. 3 Q. Did Brandon at that first meeting appear to be 4 careful and cautious about what clients or Qui Tams he 5 could or couldn't take and -- and the conflict 6 procedures? Did he seem to be aware of those and 7 cognizant and 8 A. Yes. 9 MR. DAVID BELL: Objection; form, please. 10 Q. (BY MR. JAMES BELL) Go ahead. What's the 11 answer? 12 A. Well, he -- he was -- he -- we just discussed 13 the basics of how a Qui Tam worked. It wasn't -- there 14 was no specifics. It was -- you know, and then he said 15 he had to, you know, see if there's any conflicts. 16 There wasn't any intimate details about any case or 17 person or anything like that. 18 Q. So no intimate details were talked to about any 19 case or person, correct, at the first meeting? 20 A. Correct. 21 Q. There was -- it was just basically an overview 22 of how Qui Tam work, correct? 23 A. Correct. 24 Q. And the names -- there were some names that 25 were given to Brandon McCarthy, correct? EXHIBIT 1 ROUGH DRAFT OF RYAN REYNOLDS - NOVEMBER 10, 2017 - ROUGH DRl122 1 A. Correct. 2 Q. You don't remember the name of those pharmacies 3 because they were al 1 - - 4 A. There's so many of them and it was names and 5 companies and no, I don't -- I don't recall, you know, 6 all the names and companies that were talked about. 7 Q. And Brandon McCarthy told you and Gus that he 8 needed to run a conflict checks, correct? 9 A. Correct. 10 Q. And before he could even take a look at it or 11 talk about any of these pharmacies because they could 12 potentially be clients of K&L Gates, correct? 13 A. Correct. He made no comments whatsoever 14 regarding any person or any company while we were there. 15 Q. Okay. So Brandon seemed compl et el y 16 professional in his dealings with you and Gus, correct? 17 MR. DAVID BELL: Objection; form. 18 THE WITNESS: Correct. Correct. 19 Q. (BY MR. JAMES BELL) You've been around enough 20 attorneys to know whether or not a lawyer is 21 professional or not, right? 22 A. Yes. 23 Q. And Brandon seemed and -- seemed prepared and 24 professional in terms of abiding by, based on your 25 observations, abiding by his legal duties and ethical EXHlBIT 1 ROUGH DRAFT OF RYAN REYNOLDS - NOVEMBER 10, 2017 - ROUGH DRt123 1 obligations to clients, and former clients, and/or 2 existing clients of K&L Gates, correct? 3 MR. DAVID BELL: Objection; form. 4 THE WITNESS: Correct. There was no - - 5 like I said, there was he didn't make any substantive 6 comments. He listened to us. And the then at the end 7 he said, well, you know, before I can advise you or do 8 anything, I have to do a conflict check. And so yes, 9 correct. 10 Q. (BY MR. JAMES BELL) Okay. So Brandon told you 11 before he could do anything or advise, he had to run a 12 conflicts check, correct? 13 A. Correct. 14 Q. And that seemed like the right thing to do, 15 correct? 16 MR. DAVID BELL: Objection; form. 17 THE WITNESS: Based on my, you know, 18 limited knowledge of law, yes. 19 a. (BY MR. JAMES BELL) And based on Brandon Is 20 professionalism that's why you continued to stay in 21 contact with him? It's one of the reasons why, correct? 22 A. Correct . 23 Q. That he seemed to maintain confidentiality and 24 he didn't seem like a shady lawyer to you, correct? 25 A. Correct. EXHIBIT 1 ROUGH DRAFT OF RYAN REYNOLDS - NOVEMBER 10, 2017 - ROUGH DRl124 1 a. He seemed like he was honest, ethical in his 2 dealings with the two of you, at least in your limited 3 interaction with him, correct? 4 A. Correct. 5 Q. He didn't give you or Gus any legal advice, 6 correct? 7 A. Correct. 8 Q. Brandon just in that first meeting, just 9 listened to the two of you, correct? 10 A. Correct. 11 Q. And as you sit here right now, there's nothing 12 you can say that Brandon did wrong in that first meeting 13 with you in August of 2015, correct? 14 MR. DAVID BELL: Objection; form. 15 THE WITNESS: Correct. Correct. 16 Q. (BY MR. JAMES BELL) And in terms of the second 17 meeting that happened, I believe at the hotel, there's 18 nothing Brandon said that was inappropriate or wrong or 19 unethical in your opinion, correct? 20 A. Correct. 21 Q. The book that you reference in your text 22 message with Nathan Halsey where you offer to pay him 23 $1000, does that refer to a copy of a PowerPoint 24 presentation? 25 MR. DAVID BELL: Objection; form. EXHIBIT 1 ROUGH DRAFT OF RYAN REYNOLDS - NOVEMBER 10, 2017 - ROUGH DRt125 1 THE WITNESS: On advice of my counsel , I 2 plead the Fifth. See Exhibit 1. 3 Q. (BY MR. JAMES BELL) Have you seen a PowerPoint 4 presentation related to any alleged health care schemes? 5 MR. DAVID BELL: Objection; asked and 6 answered. Objection; form. 7 THE WITNESS: Plead the Fifth. See Exhibit 8 1. 9 Q. (BY MR. JAMES BELL) Do you remember a name 10 called Trilogy coming up in the fall of 2015? 11 A. I mean I've heard the name. 12 Q. Do you know anything about the pharmacy called 13 Trilogy? 14 A. No. 15 Q. Do you have any evidence that Brandon McCarthy 16 brought or attempted to bring a Qui Tam lawsuit against 17 a company called Progen? 18 MR. DAVID BELL: Objection; form. 19 THE WITNESS: No. 20 Q, (BY MR. JAMES BELL) Do you have any evidence 21 that Brandon put his personal well-being above any of 22 his clients, former clients, or alleged clients? 23 MR. DAVID BELL: Objection; form. 24 THE WITNESS: No. 25 Q. (BY MR. JAMES BELL) Do you have any evidence EXHlBIT 1 ROUGH DRAFT OF RYAN REYNOLDS - NOVEMBER 10, 2017 - ROUGH DRt126 1 that Brandon McCarthy has tried to drum up any federal 2 criminal conviction into any of his former clients, 3 clients or existing clients? 4 MR. DAVID BELL: Objection; form. 5 Q. (BY MR. JAMES BELL) Or prospective clients. 6 MR. DAVID BELL: Objection; form. 7 THE WITNESS: No. 8 Q. (BY MR. JAMES BELL) Do you have any direct 9 evidence knowledge or facts to suggest that Brandon 10 McCarthy helped published slanderous news articles 11 against clients, former clients, existing clients or 12 other folks? 13 MR. DAVID BELL: Objection; form. 14 THE WITNESS: No. 15 Q. (BY MR. JAMES BELL) Do you have any direct 16 evidence that Brandon McCarthy's ever exploited a 17 client -- a confidential relationship with any of his 18 clients, former clients, or existing clients? 19 MR. DAVID BELL: Objection; form. 20 THE WITNESS: No. 21 MR. DAVID BELL: Okay. When you got to a 22 stopping point. 23 MR. JAMES BELL: Okay. Give me five 24 minutes. Is that all right? 25 MR. DAVID BELL: Yeah. I was just going EXHIBIT 1 ROUGH DRAFT OF RYAN REYNOLDS - NOVEMBER 10, 2017 - ROUGH DRl127 1 to - - 2 MR. JAMES BELL: If you want to bring pizza 3 in here -- 4 MR. DAVID BELL: No, just 5 (Pause in proceedings) 6 Q. (BY MR. JAMES BELL) At -- based on your, 7 previous testimony that Brandon McCarthy didn't say much 8 he didn't -- at the first meeting Brandon McCarthy 9 didn't tell you that he wanted to be in charge of 10 bringing a Qui Tam against anybody at that point in 11 time, correct? 12 A. Correct. 13 Q. It was more at the first meeting it was more 14 Brandon McCarthy trying to give you information about 15 what a Qui Tam was and the law behind a Qui Tam, 16 correct? 17 A. Correct. 18 Q. Just a basic overview what a Qui Tam was? 19 A. We were just there I mean I like Brandon. 20 I mean I would consider him my friend so I just said -- 21 I told Gus, I said, let's go there and he can explain 22 it. I don't know what it is and it's very confusing to 23 me. So I said he can explain it to us. And, you know, 24 we can see if there's a possibility or not on whatever, 25 you know, everybody was thinking about trying to make EXHIBIT 1 ROUGH DRAFT OF RYAN REYNOLDS - NOVEMBER 10, 2017 - ROUGH DRt128 1 some money any off a Qui Tam case. Because I was too. 2 We were all, you know, trying to figure out how we can 3 make some money off of this deal. So we just went there 4 and -- and Brandon just kind of outlined the basics of 5 how they worked. But not as far as any particular 6 person or company or anything like that. 7 Q. Did you bring the concept of the Qui Tam 8 against Progen and its principals to Brandon McCarthy? 9 A. No. 10 Q. Was there ever a plan for you to be a plaintiff 11 in Qui Tam lawsuit against Progen that you're aware of? 12 A. No. 13 Q. Did you discuss the name Progen in the 14 August 2015 meeting? 15 A. Not that I recall. I don't -- I mean they were 16 rattling ... 17 Q. As you sit here right now, can you remember the 18 name -- 19 A. No, I cannot. 20 Q. As you - - I just got to get a clean record. 21 A. Okay. 22 Q. As you sit here right now, do you remember the 23 name Progen even coming up in your August 2015 meeting 24 with Brandon McCarthy? 25 A. No. EXHIBIT 1 ROUGH DRAFT OF RYAN REYNOLDS - NOVEMBER 10, 2017 - ROUGH DRt129 1 Q. Was -- strike that. 2 Brandon McCarthy never solicited you to be 3 a plaintiff in the Qui Tam action, correct? 4 A. Correct. 5 (Pause in proceedings) 6 Q. (BY MR. JAMES BELL) Since you didn't know the 7 name Progen, would you agree with me that you were never 8 adverse to Progen? 9 MR. DAVID BELL: Objection; form. 10 THE WITNESS: I would agree with that. 11 Q. (BY MR. JAMES BELL) Did Brandon McCarthy 12 conspire with you to move forwards with a Qui Tam? 13 MR. DAVID BELL: Objection; form. 14 THE WITNESS: No. 15 Q. (BY MR. JAMES BELL) Did Brandon McCarthy 16 strategize and/or conspire with you to move forward 17 regarding a Qui Tam? 18 A. No. 19 MR. DAVID BELL: Objection; form. 20 THE WITNESS: No. 21 Q. (BY MR. JAMES BELL) Did Brandon McCarthy make 22 a deal with you regarding any Qui Tam? 23 A. No. 24 Q. Did Brandon McCarthy ever make any illegal 25 deals with you? EXHIBIT 1 ROUGH DRAFT OF RYAN REYNOLDS - NOVEMBER 10, 2017 - ROUGH DRt130 1 A. No. 2 Q. Did Brandon McCarthy ever say that he would 3 personally receive a portion of any recovery of a Qui 4 Tam to you? 5 A. No. 6 Q. Did McCarthy say that he would take on a - - a 7 Qui Tam without supporting evidence? 8 A. No. 9 Q. Did Brandon McCarthy ever talk to you about any 10 referral fee or fee for him? 11 A. No. 12 Q, Did you see a PowerPoint presentation by 13 Brandon McCarthy in or around Brandon McCarthy or that 14 Brandon McCarthy had anything to do with? 15 A. No. 16 Q. Do you have any evidence, facts, or knowledge 17 that Brandon McCarthy was looking into Progen to sue 18 them? 19 MR. DAVID BELL: Objection; form. 20 THE WITNESS: No. 21 Q. (BY MR. JAMES BELL) Do you have any direct 22 evidence, knowledge, or facts that McCarthy was looking 23 in to Shuster Raul or any of those folks to sue them or 24 harm them? 25 A. No. EXHIBIT 1 ROUGH DRAFT OF RYAN REYNOLDS - NOVEMBER 10, 2017 - ROUGH DRJ131 1 Q. Do you have any evidence, facts, or knowledge 2 to suggest that Brandon McCarthy tried to get any former 3 clients, existing clients or prospective clients 4 criminally prosecuted? 5 MR. DAVID BELL: Objection; form. 6 THE WITNESS: No. 7 (Pause in proceedings) 8 Q. (BY MR. JAMES BELL) Did you ever hear Brandon 9 McCarthy bring up the name Progen to the best of your 10 recollection? 11 A. No. 12 Q. (BY MR. JAMES BELL) Do you remember Brandon 13 McCarthy i n any - - you don't remember Brandon McCarthy 14 bringing up the name Shuster Raul or Express Pharmacy in 15 your meetings, correct? 16 A. Correct. He didn't comment on anything. He 17 just listened and then told us that he had to do a 18 check. That's it. 19 Q. Do you have any direct evidence, knowledge, or 20 facts that Brandon McCarthy -- that Brandon McCarthy 21 helped Nathan Halsey obtain information or records about 22 Progen and/or are R Express? 23 MR. DAVID BELL: Objection; form. 24 THE WITNESS: No. 25 Q. (BY MR. JAMES BELL) Or any of its principals? EXHIBIT 1 ROUGH DRAFT OF RYAN REYNOLDS - NOVEMBER 10, 2017 - ROUGH DRJ132 1 A. No. 2 Q. Do you have any direct evidence, knowledge, or 3 facts that suggest that Brandon McCarthy attempted to 4 persuade the U.S. Department of Homeland Security to 5 investigate Progen or RExpress Rolf or Shuster, any of 6 those fol ks? 7 MR. DAVID BELL: Objection; form. 8 THE WITNESS: No. 9 Q. (BY MR. JAMES BELL) Do you have any direct 10 evidence, knowledge, or facts that -- that Brandon 11 McCarthy had something to do with presenting allegations 12 regarding Progen or any of the companies I've mentioned 13 to the U.S. attorney's office? 14 MR. DAVID BELL: Objection; form. 15 THE WITNESS: No. 16 Q. (BY MR. JAMES BELL) Do you have any direct 17 evidence, knowledge, or facts that Brandon McCarthy 18 worked with Halsey Kepler or you to publish defamatory 19 news articles and television segments? 20 MR. DAVID BELL: Objection; form. 21 THE WITNESS: No. 22 Q. (BY MR. JAMES BELL) Do you have any direct 23 evidence that Brandon McCarthy had anything to do with a 24 CBS news article? 25 A. No. EXHIBIT 1 ROUGH DRAFT OF RYAN REYNOLDS - NOVEMBER 10, 2017 - ROUGH DRl133 1 MR. DAVID BELL: Objection; form. 2 Q. (BY MR. JAMES BELL) Do you have any direct 3 evidence that Brandon McCarthy spurred the issuance of 4 the warrant on Halsey's phone? 5 A. No. 6 Q. Based solely on your dealings with Brandon 7 McCarthy, you would agree with me, he was honest in his 8 dealing with you, true? 9 A. Yes. 10 Q. Based on your dealings with Brandon McCarthy, 11 you would agree with me that he seemed ethical in his 12 dealings with you, true? 13 A. Yes. 14 Q. You would agree with me that Brandon McCarthy 15 in his dealings with you was upfront, honest, had 16 integrity, correct? 17 A. I WO LI l d. 18 Q. You'd say that Brandon McCarthy, in his 19 dealings with you, presented himself as a loyal -- an 20 attorney that acted with loyalty and integrity of the 21 strictest kind? Would you agree with that? 22 A. Yes. I mean, like I said, we were friends. I 23 was helping him with the Keep My ID thing. So I 24 would -- yeah. The answer is yes. I mean ... 25 Q. You' re not aware of any false or inaccurate EXHIBIT 1 ROUGH DRAFT OF RYAN REYNOLDS - NOVEMBER 10, 2017 - ROUGH DRl134 1 statements that Brandon McCarthy made, correct? 2 A. No. 3 MR. DAVID BELL: Objection; form. 4 THE WITNESS: No. 5 Q. (BY MR. JAMES BELL) I asked a double negative. 6 I'm sorry. 7 A. Oh, okay. 8 Q, Would you agree with me that you're not aware 9 of false or inaccurate statements that Brandon McCarthy 10 has made about any clients, former clients, existing 11 clients, future clients, or anybody to your knowledge. 12 Do you - - 13 MR. DAVID BELL: Objection; form. 14 Q. (BY MR. JAMES BELL) - - agree with that 15 statement? 16 A. Yes. 17 Q. Do you have the direct evidence, knowledge, or 18 facts to suggest that Brandon McCarthy urged CBS to run 19 any kind of story regarding any of his clients, former 20 clients, or existing clients? 21 A. No. 22 MR. DAVID BELL: This is yours. 23 MR. JAMES BELL: Thank you. 24 (Pause i n proceedings) 25 Q. (BY MR. JAMES BELL) When you told Brandon EXHIBIT 1 ROUGH DRAFl OF RYAN REYNOLDS - NOVEMBER 10, 2017 - ROUGH DRt135 1 McCarthy that you've got a huge case out of Fort Worth 2 in the hundreds of millions health care, you didn't have 3 any facts or evidence at that time, you just possible 4 you were just searching for a potential Qui Tam case, 5 correct? 6 MR. DAVID BELL: Objection; form. 7 THE WITNESS: Correct. 8 Q. (BY MR. JAMES BELL) How is your daughter, by 9 the way? 10 A. Fine. Thank you. 11 Q. Good. 12 A. Fourteen. She's still sweet. Hopefully she 13 stays that way. 14 MR. JAMES BELL: The name of the gal at the 15 second meeting was Brooke Chavez Taylor. 16 THE WITNESS: Taylor. Brooke Taylor. 17 MR. DAVID BELL: Hey, can I have that? 18 MR. JAMES BELL: No. 19 MR. DAVID BELL: Let me see her again. 20 Cute. 21 THE WITNESS: Yes, she's cute. What do you 22 think, Brandon? 23 MR . McCARTHY: She went to Harvard. 24 MR. DAVID BELL: Do what? 25 MR . McCARTHY: Harvard. Smart girl . EXHIBIT 1 ROUGH DRAFT OF RYAN REYNOLDS - NOVEMBER 10, 2017 - ROUGH DRJ136 1 Harvard. Harvard. 2 MR. DAVID BELL: Harvard, Massachusetts? 3 THE WITNESS: Yeah. 4 MR. JAMES BELL: Yes. 5 MR. DAVID BELL: Sure it wasn't Howard? 6 MR. JAMES BELL: Yeah. Positive. 7 (Pause in proceedings) 8 THE WITNESS: She's in law school, I think. 9 I heard she maybe went to law school. 10 Q. (BY MR. JAMES BELL) Where are you currently 11 living in case I have to subpoena you at another point 12 in time? 13 A. 5608 Matalee, but I don't know how long. I'll 14 update you if I change my address. 15 MR. JAMES BELL: Well, you've got to go 16 through your attorney. 17 THE WITNESS: Or I'll update him to let you 18 know. 19 That's another coincidence that came up, I 20 guess, I can't -- I'm not allowed to live there because 21 of my - - 22 MR. DAVID BELL: Don't go into any of that 23 stuff, please. 24 THE WITNESS: Okay. So ... 25 Q. (BY MR. JAMES BELL) You would agree in your EXHIBIT 1 ROUGH DRAFT OF RYAN REYNOLDS - NOVEMBER 10, 2017 - ROUGH DRJ137 1 dealings with Brandon McCarthy it appeared that he 2 adhered to his ethical 1 egal duties, correct? 3 MR. DAVID BELL: Form; asked and answered. 4 THE WITNESS: Correct. 5 Q. (BY MR. JAMES BELL) McCarthy seemed -- strike 6 that. 7 Based on your observations, McCarthy seemed 8 faithful to his clients, correct? 9 MR. DAVID BELL: Form; asked and answered. 10 MR. JAMES BELL: I didn't ask that before, 11 by the way. I haven't asked any of these. 12 MR. DAVID BELL: Asked and answered. 13 THE WITNESS: I mean, yeah, correct. 14 Q. (BY MR. JAMES BELL) McCarthy appeared -- 15 strike that. 16 McCarthy was forthright, correct? 17 A. Correct. 18 Q. McCarthy was frank with you guys? 19 A. Correct. 20 MR. DAVID BELL: Objection; form. 21 Q. (BY MR. JAMES BELL) McCarthy seemed like he 22 had a conscience, correct? 23 MR. DAVID BELL: Objection; form. 24 THE WITNESS: Correct. 25 Q. (BY MR. JAMES BELL) Honorable? EXHIBIT 1 ROUGH DRAFT OF RYAN REYNOLDS - NOVEMBER 10, 2017 - ROUGH DRJ138 1 A. Correct. 2 Q. Just? 3 A. Correct. 4 Q. Moral? 5 A. Correct. 6 Q. Principled? 7 A. Correct. 8 Q. Conscientious? 9 A. Correct. 10 Q. Fair? 11 A. Correct. 12 Q. Equitable? 13 A. Correct. 14 Q. Upright? 15 A. Correct. 16 Q. Honorable? 17 A. Correct. 18 Q. Trustworthy? 19 A. Correct. 20 Q. Impartial? 21 A. Correct. 22 Q. Unbiased? 23 A. Correct. 24 Q. Unprejudiced? 25 A. Correct. EXHIBIT 1 ROUGH DRAFT OF RYAN REYNOLDS - NOVEMBER 10, 2017 - ROUGH DRt139 1 Q. Neutral? 2 A. Correct. 3 Q. Lawful? 4 A. Correct. 5 Q. Legal? 6 A. Correct. 7 Q. Legitimate? 8 A. Correct. 9 MR. DAVID BELL: Objection; form. I don't 10 know what that means. 11 Q. (BY MR. JAMES BELL) Did McCarthy reveal, 12 disclose or divulge any information about any of his 13 clients to you? 14 A. No. 15 Q. Did McCarthy leak, unmask, expose any 16 information about any of his clients, prospective 17 clients to you? 18 A. No. 19 MR. JAMES BELL: Let's take a quick pizza 20 break and maybe I can shore this up. 21 MR. DAVID BELL: Yeah. 22 MR. JAMES BELL: Is that cool? 23 MR. DAVID BELL: Sure. 24 MR. JAMES BELL: Okay. 25 (Break taken) EXHIBIT 1 ROUGH DRAFT OF RYAN REYNOLDS - NOVEMBER 10, 2017 - ROUGH DRt140 1 Q, (BY MR. JAMES BELL) All right. Just -- is 2 there anything I can say or do to change your mind about 3 the questions I've asked regarding the Fifth Amendment? 4 Change -- are you going to continue to maintain the 5 Fifth Amendment with respect to the questions I asked 6 you? 7 MR. DAVID BELL: I'm better suited to 8 answer that question than he is. So we've talked about 9 meeting. Let's meet and then we'll revisit all that. 10 MR. JAMES BELL: I know. I just need to 11 get on the record. 12 MR. DAVID BELL: Okay. That's fine. 13 MR. JAMES BELL: Okay. 14 THE WITNESS: Yeah. I would like to stick 15 with my answers. 16 MR. JAMES BELL: I just -- let me ask it 17 again, just so I have a clean record. 18 Q. (BY MR. JAMES BELL) Is there anything I can 19 say or do to change your mind with regard to withdrawing 20 your assertion of the Fifth Amendment privilege 21 regarding any of the questions I've asked you thus far? 22 A. No. 23 MR. JAMES BELL: Okay. Now, just -- I 24 think it will take ten minutes in terms of a timeline. 25 Well -- EXHlBIT 1 ROUGH DRAFT OF RYAN REYNOLDS - NOVEMBER 10, 2017 - ROUGH DRt141 1 Q. (BY MR. JAMES BELL) You' re going to assert the 2 Fifth Amendment privilege with respect to any dealings 3 with Cameron Smith, correct? 4 A. Wel 1, any attorneys is what I'm going assert 5 the Fifth Amendment with. 6 Q. Okay. 7 MR. DAVID BELL: And any and all. 8 THE WITNESS: Yeah. 9 Q. (BY MR. JAMES BELL) You're going to assert the 10 Fifth Amendment privilege with respect to Cameron Smith, 11 correct? 12 A. Correct. 13 Q. Jim Rolf, correct? 14 A. Correct. 15 Q. Joe Kendal 1 , correct? 16 A. Correct. 17 Q. Okay. Now, you're aware of circumstances 18 whereby folks were -- or have tried to implicate -- or 19 her of implicating Brandon -- Brandon McCarthy in some 20 kind of nefarious or wrongful conduct, correct? 21 MR. DAVID BELL: Objection; form. 22 THE WITNESS: Wel 1, I mean - - hearsay. 23 I've heard at lot of stuff, you know. 24 Q. (BY MR. JAMES BELL) Secondhand? 25 A. Yeah. About everybody and everything. I mean EXHIBIT 1 ROUGH DRAFT OF RYAN REYNOLDS - NOVEMBER 10, 2017 - ROUGH DRt142 1 as far as this case is kind - - or this deal , whatever 2 you want to cal 1 it, has kind taken of taken on a 1 i fe 3 of its own. So I've heard all kinds of stuff about all 4 different people. 5 Q. So what have you heard about any alleged 6 wrongdoing by Brandon McCarthy, even though it's 7 secondhand. Now I'm asking for indirect knowledge or 8 indirect facts. 9 A. I mean the thing -- I guess, you know, the 10 whole thing with -- with Nathan and getting wired up by 11 the FBI. That -- I -- I really get confused as far as 12 the companies or whatever that maybe -- that as far as 13 Kevin Krouse is concerned that that for -- that Kevin 14 Krouse would not run Nathan's SEC complaint in the 15 newspaper if if he was given the information on 16 whomever, Scoot Shuster, Dustin, et cetera. But I 17 don't -- I don't know who that deal was made with, if 18 there ever was a deal. I just had heard that from 19 Nathan. 20 Because Nathan had told me that if that 21 article runs in Dallas -- all his investors are in 22 Dallas -- and he's basically screwed. 23 Q. My question is: What have you heard that 24 Brandon McCarthy has done wrong? Or has everything you 25 learned about Brandon McCarthy come from attorneys? EXHlBIT 1 ROUGH DRAFT OF RYAN REYNOLDS - NOVEMBER 10, 2017 - ROUGH DRt143 1 A. No, I mean a lot of it came from Halsey. But I 2 don't -- you know, I mean I guess the that I heard 3 that he sent Nathan to the FBI office to get wired up to 4 go get information against whomever. I don't know who 5 exactly who they were, but ... 6 That. 7 You know and, like I said , about me, I've 8 heard, you know, numerous times that he had somebody at 9 the IRS and that he was going to put on me. 10 Q. Who did you hear that from again? 11 A. Well, I heard it from the guy that Carl, who 12 was a client of what's his name that I mentioned 13 earlier? I don't know. It's some -- some attorney. 14 Carl Flemining is his name. The guy at Hillstone. I 15 know that there's a guy whose name is Hoi that has, you 16 know, been calling people. And I had a girl -- an ex- 17 girlfriend that said he called her and was asking about 18 my investments and did I beat her up. And then she said 19 eight months later he called and said, well, does Ryan 20 sell drugs? And I'm going, what's going on here? 21 I've heard -- well, you're talking about 22 Brandon. I'm trying to think. I mean , that -- that he 23 was representing somebody and getting evidence against 24 them when they were his client -- when they were his 25 firm's client. EXHIBIT 1 ROUGH DRAFT OF RYAN REYNOLDS - NOVEMBER 10, 2017 - ROUGH DRt144 1 Q. Who did you hear that from, that allegation? 2 A. I don't know. It's like all so convoluted. I 3 don't really remember. I'm just telling you things I 4 remember that I've heard. You know ... 5 Q. Did you hear that allegations from any 6 attorneys? 7 A. I don't recall. But I mean I guess the main 8 thing is the FBI thing. Because -- that -- that's -- 9 you know, when Nathan told me that was -- that he was 10 doing that, that -- that scared me. And I don't know 11 who, what or -- had anything to do with that. But I 12 didn't -- that's when I was -- that made me nervous. 13 You know, especially in my situation. I just felt that 14 was careless of him to be doing. But I know he wanted 15 to get off that case, that SEC case. 16 I heard that -- that Brandon called the SEC 17 attorney that was handling Nathan's case and maybe tried 18 to trade you know, try to get Nathan -- help Nathan 19 out. And I don't know if that's improper or not. I 20 mean but I heard that. And that the SEC attorney told 21 Nathan that if Barack Obama cal 1 s me, I wouldn't drop 22 this case. I'm not -- I'm not I don't know if that's 23 wrong or not. I don't know if Brandon had anything to 24 do with it. I'm just telling you things I've heard. 25 I'm -- I'm not saying they're right, wrong, or EXHIBIT 1 ROUGH DRAFT OF RYAN REYNOLDS - NOVEMBER 10, 2017 - ROUGH DRt145 1 indifferent. I don't know. 2 But mainly the FBI thing and, you know, 3 from Nathan what said I -- I didn't -- you know, that he 4 went to Krouse. I don't know who all met with Kevin 5 Krouse. But, you know, it was told to me that there 6 it was a trade where they would get Kevin the 7 information on Shuster Raul, et cetera, and all the 8 companies if he wouldn't run that story. 9 Basically that's, you know, what I can 10 remember. 11 Q. With regard to your assertion of the Fifth 12 Amendment regarding the book that we were talking about 13 earlier. Do you remember that? 14 A. Yes. 15 Q. Okay. When did you first hear of a book or a 16 PowerPoint? Are you going to take the Fifth Amendment? 17 A. Well, I've never heard of a PowerPoint. 18 Q. Okay. You've heard of a book? 19 A. I've heard of a book, but I don't -- I've never 20 seen a book. I don't -- it's my -- it's my belief that 21 the book -- that the way that it was described by Gus 22 and Nathan -- had nothing do to with Brandon. 23 Q. Your under -- 24 A. I -- 25 Q. Your understanding is the book had nothing to EXHIBIT 1 ROUGH DRAFT OF RYAN REYNOLDS - NOVEMBER 10 , 2017 - ROUGH DRt146 1 do with Brandon? 2 A. No. It wasn't -- it wasn't a 3 Q. Well, I just -- I asked you a double negative. 4 It was your understanding -- would it be a 5 fair statement to say that your understanding was the 6 book that you were talking about earlier with Gus and 7 Nathan had nothing to do with Brandon. That would be a 8 true statement, correct? 9 A. Abso-- yes. 10 Q. Okay. Now, tell me what else do you -- 11 A. Wel 1, the - - the from my understanding was 12 it was about Shuster and Raul . I don't even - - it was 13 never - - I never have heard - - that's what struck me as 14 funny when you said was there a book that was trying 15 to - - that people were trying to get to hurt him. It 16 was - - it had nothing to do with him. I think you're 17 you're there's something that you're missing as far 18 as that's concerned. 19 I think that whatever this book was had to 20 do with the evidence that Nathan obtained on whoever he 21 was recording and text messaging and things of that 22 nature . 23 Q. That's your guess? 24 A. That's what I was told. 25 Q. Who were was told that by? EXHIBIT 1 ROUGH DRAFT OF RYAN REYNOLDS - NOVEMBER 10, 2017 - ROUGH DR~147 1 A. Nathan and Gus. 2 Q. Okay. But as far as you know, you don't - - you 3 don't think Brandon had anything to do with this book, 4 correct? 5 A. No. 6 Q. Correct? 7 A. Correct. 8 Q. Okay. So yeah, I asked you a double negative. 9 Just to be clear. 10 As far as you knew Brandon McCarthy had 11 nothing to do with this book that Nathan and/or Gus -- 12 Nathan Halsey, Gus Kepler had made, correct? 13 A. Correct. 14 Q. Now, at some point request you were trying to 15 obtain this book from either Gus or Nathan, right? 16 MR. DAVID BELL: Objection; form. 17 THE WITNESS: That, I'm going to plead the 18 Fifth on -- on anything that has to do with me trying to 19 obtain this book. I'm just telling you 20 MR. DAVID BELL: Just let let him -- 21 THE WITNESS: Yeah. 22 Q. (BY MR. JAMES BELL) What is the reasoning 23 behind -- how would talking about the book incriminate 24 you? 25 MR. DAVID BELL: You don't need to answer EXHIBIT 1 ROUGH DRAFT OF RYAN REYNOLDS - NOVEMBER 10, 2017 - ROUGH DRt148 1 that. You're asking him for a 1 egal conclusion. 2 Just - - 3 THE WITNESS: I'm just going to plead the 4 Fifth. 5 Q. (BY MR. JAMES BELL) Okay. When - - wel 1 , why 6 did you want to obtain a copy of the book? 7 MR. DAVID BELL: Objection; form. 8 THE WITNESS: I'm going to plead the Fifth 9 on that. 10 MR. DAVID BELL: Tel 1 him go back to 11 Exhibit -- 12 THE WITNESS: Yeah. 13 (Pause in proceeding) 14 THE WITNESS: I mean what I'm telling you 15 is 16 MR. DAVID BELL: Just leave it. 17 THE WITNESS: Okay. 18 Q. (BY MR. JAMES BELL) If you were me sitting 19 here right now, what question should I ask you that 20 wouldn't call for your invocation of the Fifth Amendment 21 privilege? 22 MR. DAVID BELL: Objection; form. 23 Why don't you and I talk, like we 24 discussed earlier. 25 MR. JAMES BELL: I'm happy to talk to you EXHIBIT 1 ROUGH DRAFT OF RYAN REYNOLDS - NOVEMBER 10, 2017 - ROUGH DR~149 1 afterwards. I'm -- I'm just -- I want -- 2 MR. DAVID BELL: I'm not going to let him 3 answer those questions. I'm not going to let him waive, 4 knowingly or inadvertently, his First or Fifth Amendment 5 or any other right he has. 6 Q. (BY MR. JAMES BELL) So are you pleading the 7 Fifth Amendment with respect to why you wanted to obtain 8 a copy of the, quote, unquote, book? 9 MR. DAVID BELL: He's doing what he's 10 testified on the record. 11 MR. JAMES BELL: I know. I just got to get 12 a record. 13 MR. DAVID BELL: That's all that he's -- 14 just -- just 15 THE WITNESS: I'm pleading the Fifth. See 16 Exhibit 1. 17 Q. (BY MR. JAMES BELL) Okay. And was it your 18 intent to purchase the book and then sell the book? 19 A. I plead the Fifth. See Exhibit 1 . 20 Q. Who all was involved i n - - strike that. 21 Was it more than you involved in attempting 22 to purchase the book? 23 A. I plead the Fifth. See Exhibit 1 . 24 Q. Did you try and get the book from Gus Kepler? 25 A. I plead the Fifth. See Exhibit 1 . EXHlBIT 1 ROUGH DRAFT OF RYAN REY~OLDS - NOVEMBER 10, 2017 - ROUGH DRl150 1 Q. Did you try and get the book from Nathan 2 Halsey? 3 A. I plead the Fifth. See Exhibit 1. 4 Q. Why were you train -- trying to obtain a book 5 that you had never seen? 6 A. I have to plead the Fifth again. See Exhibit 7 1. 8 Q. Did somebody instruct you to obtain the book? 9 A. I plead the Fifth. See Exhibit 1. 10 Q. Why did anybody else want to have a copy of the 11 book? 12 A. I plead the Fifth. See Exhibit 1. 13 Q. How was the book going to help you? 14 A. I plead the Fifth. See Exhibit 1. 15 Q. Were you going to benefit -- benefit by 16 obtaining the book? 17 A. I plead the Fifth. See Exhibit 1 . 18 Q. Were you ever given the book? 19 A. I plead the Fifth. See Exhibit 1 . 20 Q. Did you have a copy of the book and just not 21 look at it? 22 A. I plead the Fifth. See Exhibit 1 . 23 Q. Have you ever held any type - - have you ever 24 held this book in your hand? 25 A. Plead the Fifth. See Exhibit 1 . EXHIBIT 1 ROUGH DRAFT OF RYAN REYNOLDS - NOVEMBER 10, 2017 - ROUGH DRt151 1 a. And when I say "the book," this is the book 2 that was allegedly created by Halsey and and Gus, 3 correct? 4 A. I mean I don't know. 5 a. Is that your understanding of the book that 6 we're talking about? 7 A. No. 8 a. What is your understanding of the book? 9 A. Because you're telling me there was a book that 10 had something to do with McCarthy. 11 a. I'm talking the book regarding Halsey and -- 12 and and -- and Kepler. That's the only book that's 13 out there. 14 A. That I'm aware of. 15 a. I'm talking about the - - the book - - 16 MR. DAVID BELL: Excuse me. Objection; 17 form. 18 MR. JAMES BELL: Sure. 19 a. (BY MR. JAMES BELL) I'm talking about the book 20 that you're referring to in the text messages between 21 you and Kepler and you and Halsey. Do you understand 22 that? 23 MR. DAVID BELL: Objection; form. 24 THE WITNESS: I'm going to plead. And see 25 Exhibit 1 on that. EXHIBIT 1 ROUGH DRAFT OF RYAN REYNOLDS - NOVEMBER 10, 2017 - ROUGH DRt152 1 But you inferred earlier that it was some 2 kind of book to use against McCarthy (indicating). 3 Q. (BY MR. JAMES BELL) The implication is if 4 Brandon McCarthy had something to do with creating that 5 book, he would have been creating against some of his 6 own clients. And that would be wrongful. Don't you 7 agree? 8 MR. DAVID BELL: Objection; form. Asked 9 for a 1 egal -- asks -- asks for a legal conclusion. 10 THE WITNESS: I've -- I've never heard 11 that. That that Brandon had anything do with that 12 book, if we're talking about the same book. 13 Q. (BY MR. JAMES BELL) I'm talking about the book 14 that you're talking about in your text messages to 15 Halsey and Gus. 16 MR. DAVID BELL: Objection; form. 17 THE WITNESS: I plead the Fifth. See 18 Exhibit 1. 19 I just didn't know -- you inferred earlier 20 that there was some book out there that was trying to do 21 harm to McCarthy. 22 Q. (BY MR. JAMES BELL) It's the same book I'm 23 talking about. 24 A. Okay. I've never thought that Brandon had 25 anything to do with that book or produced it or went EXHIBIT 1 ROUGH DRAFT OF RYAN REYNOLDS - NOVEMBER 10, 2017 - ROUGH DRt153 1 out -- from -- from my understanding that was Nathan. I 2 don't I never so when you say that it's supposedly 3 going to be just against him, I don't -- I have no 4 knowledge of that. 5 Q. Well, do you understand the allegation against 6 Brandon? 7 A. No, apparently not. 8 Q. The -- the allegation is that he somehow has 9 had seen the book or produced the book, created the 10 book, help author the book with Nathan Halsey and -- and 11 Gus to turn against former clients. Do you understand 12 that that's one -- one of the allegations -- 13 A. No. 14 Q. -- his firm is making against -- no? 15 A. No. 16 Q. Okay. Do you understand why I -- now I'm 17 trying to ask about the - - the same book? Why - - why 18 we're talking about the same book? Do you understand 19 now? Does that give you a better kind of - - 20 A. Yeah, I - - see, I didn't - - I didn't realize 21 all that. 22 Q. Okay. 23 A. This is - - if - - if - - if this is this book 24 that's out there that has information on whomever, the 25 common knowledge out on the street is is that Nathan EXHIBIT 1 ROUGH DRAFT OF RYAN REYNOLDS - NOVEMBER 10, 2017 - ROUGH DRt154 1 Halsey created this book. And so when you were saying 2 that about using it against Brandon or something, I I 3 thought you were talking about something different. 4 Because I -- that doesn't make any sense to me. 5 Q. Well, it makes sense to you now, right? 6 A. I -- 7 Q. If Nathan Halsey created a book against clients 8 of Brandon McCarthy's and Brandon McCarthy knew about it 9 to -- and -- and handed it over -- to pursue a Qui Tam 10 lawsuit against his own clients, you could understand 11 that -- if that allegation was made, you can understand 12 why Brian -- why Brandon McCarthy wants to know who, 13 what, when, where, how about this alleged book because 14 he had nothing to do with it. You can understand that, 15 right? 16 A. Yeah. I never -- that didn't even cross my 17 mind that he would have. I'm telling you Nathan -- that 18 Halsey -- if this is this so-called book, Halsey created 19 this book, went out and got the information and it 20 was -- and from my understanding, this book was created 21 because Halsey was trying to obtain evidence to get 22 himself -- see, the Qui Tam was second nature. That 23 that was down the line. I mean there's other 24 there's -- Halsey thought he was in a pickle. I mean, 25 Halsey's been through this before, you know. Reid EXHIBIT 1 ROUGH DRAFT OF RYAN REYNOLDS - NOVEMBER 10, 2017 - ROUGH DRl155 1 Prosper got him off a prior -- he almost got indicted 2 and Reid got him off a prior deal he was involved in. 3 So Halsey was worried that this SEC case could be 4 referred to the DOJ. And that -- if we're talking about 5 this book, that's what I understood the book to be. 6 I didn't even -- never related McCarthy to 7 this book whatsoever. It was for Halsey to get out of 8 whatever deal he was in. 9 Q. Did Halsey ever say to you that Brandon 10 McCarthy had anything do with this book? 11 A. No. 12 Q. Did Gus Kepler ever tell you that Brandon 13 McCarthy anything to do with this book? 14 A. No. 15 Q. Then why were you trying to obtain a copy of 16 the book from Nathan Halsey? 17 MR. DAVID BELL: Objection; form. 18 THE WITNESS: I'm going to plead the Fifth. 19 Exhibit 1 . 20 Q. (BY MR. JAMES BELL) If it has nothing to do 21 with Brandon McCarthy, why are you pleading the Fifth 22 Amendment as it relates to this book? 23 MR. DAVID BELL: Objection; form. I think 24 the law is clear. He doesn't have to explain that to 25 you, Counsel. EXHIBIT 1 ROUGH DRAFT OF RYAN REYNOLDS - NOVEMBER 10, 2017 - ROUGH DRt156 1 a. (BY MR. JAMES BELL) Are you taking the Fifth 2 Amendment? 3 A. Yeah. I'm pleading the Fifth. Exhibit 1. 4 Q. Did Nathan Halsey ever give you a copy of the 5 book? 6 A. No. 7 Q. Are you aware of any copies that exists out 8 there of the book? 9 A. No. 10 Q. Did Gus Kepler have a copy of the book? 11 A. Not that I'm aware of. 12 a. Were you trying to get the book to pursue a Qui 13 Tam? 14 A. Plead the Fifth. See Exhibit 1. 15 a. When you were offering $2,000 to Nathan Halsey 16 to get a copy of this book is it because you wanted to 17 pursue a Qui Tam case? 18 MR. DAVID BELL: Objection -- objection; 19 form. 20 THE WITNESS: I plead the Fifth. Exhibit 21 1. 22 a. (BY MR. JAMES BELL) Did Jim Rolf or Cameron 23 Smith instruct you to offer $2,000 for the book so that 24 they could serriptiously help you prosecute a Qui Tam? 25 A. I plead the Fifth. Exhibit 1. EXHIBIT 1 - ROUGH DRAFT OF RYAN REYNOLDS - NOVEMBER 10, 2017 - ROUGH DRl157 1 MR. DAVID BELL: Objection; form. 2 Q. (BY MR. JAMES BELL) So you're pleading the 3 Fifth Amendment with respect to a book you've never 4 seen, right? 5 A. Yes. Correct. 6 Q. You're pleading the Fifth Amendment with 7 respect to a book you tried to obtain a copy - - how did 8 you - - strike that. 9 How did you know that a book even existed? 10 A. I think Halsey kind of prided himself on making 11 these presentations and, you know, I'm -- I'm friends 12 with Reid Prosper and he, at one point, told me that 13 MR. DAVID BELL: Don't tell him any 14 conversations with any lawyer that's ever represented 15 you. 16 THE WITNESS: Oh, okay. 17 Supposedly, Halsey was -- was good at 18 presentations and he made this to help himself. 19 Q. (BY MR. JAMES BELL) Did Reid Prosper ever 20 represent you? 21 A. Yes. 22 Q, And are you aware of any other presentations, 23 other than the book that we're talking about, that 24 Halsey made? 25 A. Not in relation to this case. EXHlBIT 1 ROUGH DRAFT OF RYAN REYNOLDS - NOVEMBER 10, 2017 - ROUGH DRJ158 1 Q. Are -- are you aware of any other Qui Tam -- 2 alleged Qui Tam presentations made by Halsey? 3 A. No. 4 Q. Are you aware of any other books or 5 presentations made by Halsey? 6 A. No. Halsey told me that when -- when he was 7 going to get indicted that he made some presentations to 8 show the government that he didn't do this. He kind of 9 pride -- like I said, he kind of prided himself on these 10 presentations and, hey, this is how I got out of this 11 deal, I went in there with these, you know, graphs and 12 stuff and showed that I wasn't the one that did it. I 13 was conned into doing this. And he -- he told me that 14 that's how he got off this indictment. 15 Q. Okay. But with respect to presentations or 16 books, other than about him and his case, are you only 17 aware of one book or one presentation where he was 18 attempting to pursue or throw other folks under the bus? 19 A. Yes. That's the only one I've heard about. 20 Q. And that's the book that we've been talking 21 about today, correct? 22 A. I assume. 23 Q. Okay. And how would somebody other than you 24 benefit from having the book? 25 MR. DAVID BELL: Objection; form. EXHIBIT 1 ROUGH DRAFT OF RYAN REYNOLDS - NOVEMBcR 10, 2017 - ROUGH DRt159 1 THE WITNESS: The only other people I think 2 would benefit would be people that were representing the 3 people that maybe were in the book that wanted to see 4 what evidence was out there against them. I don't know. 5 Q. (BY MR. JAMES BELL) And then turn around and 6 blame Brandon McCarthy? 7 A. That -- no, that doesn't -- that doesn't come 8 into my mind whatsoever. 9 Q. Have -- have you ever heard of those attorneys 10 saying that about Brandon McCarthy? 11 A. Never. 12 Q. Have you ever heard of Brandon McCarthy having 13 anything to do with putting together, stapling, being 14 involved with, touching this alleged book? 15 A. Never. 16 MR. JAMES BELL: Give me two minutes and 17 then I -- I'm sorry. I know I've said it a couple of 18 times and cried wolf, but ... 19 Let me just talk to my client. 20 (Break taken) 21 MR. JAMES BELL: I'm going to suspend the 22 deposition at this time. 23 (Proceedings concluded) 24 25 EXHIBIT 1 ' STATE OF TEXAS } C0 1Jf '£Y OF DA LAS f, r 'l~:A PIT E, CIG k of the District of Dallas County, T (, ·• t _ y c , hat I hn. ~ c•Jmpc:rs:J th:S I 1s1rum ent t o UC. ri :l r:rl orrect COJlY Of the o:!glncl OS Oj)pc.ars on rt.c:Jrd I) my 01uce. Gh. ~I u I ' ; r. y . '·1 ND~ ~I ~ ild Court,~~rt' f~ In Dalic.1., le,.&:&, hl1.:- j l 'Yi ,C41Y .:>1 a/~. .r'.~ FELIC AP' 1'hE, Di. r. .!',. l;...i...rtK DAL~COU~ ~ f,tJ)/!\,~ Deputy TAB D FILED DALLAS COUNTY 11/22/2017 3:16 PM FELICIA PITRE DISTRICT CLERK CAUSE NO. DC-17-13448 BRANDON MCCARTHY, § IN THE DISTRICT COURT Plaintiff, § § § v. § 134™ JUDICIAL DISTRICT § § JOHN/JANE DOES 1-10, § Defendants. § DALLAS COUNTY, TEXAS SUPPLEMENT TO PLAINTIFF'S MOTION TO COMPEL DEPOSITION TESTIMONY FROM WITNESS RYAN REYNOLDS Plaintiff Brandon McCarthy ("Plaintiff') serves this Supplement to Plaintiffs Motion to Compel Deposition Testimony from Ryan Reynolds and would respectfully show the Court the following: 1. On November 20, 2017, Plaintiff filed his Motion to Compel Deposition Testimony from Ryan Reynolds concerning various questions that witness Ryan Reynolds refused to answer at his deposition due to baseless assertions of privilege made by his attorney David Bell. At the time of the filing of that deposition, only the rough draft of the deposition transcript was available. Plaintiff stated in that Motion he would supplement with the certified transcript once available. 2. The Court reporter provided the certified transcript on November 22, 2017. Plaintiff is therefore supplementing his Motion with that certified copy. 3. With this Supplement, Plaintiff hereby supplements his Motion to Compel with the certified transcript of Mr. Reynold's deposition attached hereto as Exhibit 1 and it is incorporated by reference. Respectfully submitted, JAMES S. BELL, P.C. 2808 Cole A venue Dallas, Texas 75204 Tel: (214) 668-9000 By:/s/ James S. Bell James S. Bell State Bar No. 24049314 james@ jamesbell pc.c m Attorney for Petitioner Certificate of Service I hereby certify that a true and correct copy of this document was served on all counsel of record in compliance with the Texas Rules of Civil Procedure. By:/s/ James S. Bell James S. Bell SUPPLEMENT TO PLAINTIFF'S MOTION TO COMPEL DEPOSITION TESTIMONY FROM WITNESS_RYAN REYNOLDS - Page 2 MCCARTHY: RYAN REYNOLDS Page 1 1 NO. DC-17-13448 2 BRANDON MCCARTHY ) IN THE DISTRICT COURT ) 3 vs. ) 134TH JUDICIAL DISTRICT ) 4 ) JOHN/JANE D [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/4232500. Public record. Not legal advice.