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Case 2:11-cv-01426-GMS Document 155-12 Filed 11/29/12 Page 1 of 22
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GINGRAS LAW OFFICE, PLLC 3941 E. CHANDLER BLVD., #106-243 PHOENIX, ARIZONA 85048
David S. Gingras, #021097 Gingras Law Office, PLLC 3941 E. Chandler Blvd., #106-243 Phoenix, AZ 85048 Tel.: (480) 668-3623 Fax: (480) 248-3196 David@GingrasLaw.com Attorney for Plaintiff/Counterdefendant Xcentric Ventures, LLC UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA Xcentric Ventures, LLC, an Arizona limited liability company, Plaintiff, v. Lisa Jean Borodkin, et al., Defendants. Raymond Mobrez, Counterclaimant, v. Xcentric Ventures, LLC, and Edward Magedson, Counterdefendants. TO: LISA J. BORODKIN Zuber Lawler & Del Duca 777 S Figueroa St 37th Floor Los Angeles, CA 90017 Case No.: 11-CV-1426-GMS XCENTRIC VENTURES FIRST SET OF REQUESTS FOR PRODUCTION; INTERROGATORIES; REQUESTS TO ADMIT
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Pursuant to Fed. R. Civ. P. 33, 34 & 36, XCENTRIC VENTURES, LLC propounds the following request for production, admissions and non-uniform interrogatories, each of which is to be answered fully and separately, in writing, under oath and within thirty (30) days from the date of service. These interrogatories are continuing interrogatories under Fed. R. Civ. P. 26(e), and all your answers must be supplemented per Rule 26(e).
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INSTRUCTIONS FOR USE IN RESPONDING A. All information is to be divulged which is in the possession, custody or control of each individual or corporate party, their attorneys, insurance claim representatives, investigators, agents, employees or other representatives, including all information reasonably available to them. B. Where an individual interrogatory calls for an answer, which involves more than one part or sub-part, each part of the answer should be set forth separately so that it is clearly understandable and responsive to the respective sub-part. C. The terms writing or written are intended to include but not necessarily be limited to the following: other means of recording upon any tangible thing any form of communications, including letters, words, pictures, sounds or symbols or combinations thereof; and it further includes any oral communication later reduced to a writing or confirmed by a letter. D. The terms document or documents are intended to include but not necessarily be limited to the following: files, notes, memoranda, correspondence or letters of any kind, intra-departmental or office communications, written statements or reports, either signed or unsigned, records or taped interviews or statements, maps, plats, photographs, moving or still pictures, diagrams, plans, drawings, specifications, measurements, or other descriptions, agreements, contracts, records, and computer files in any format and printouts thereof. The term document shall include both originals and all copies which are not identical with the original or which contain any commentary or notation that does not appear on the original. E. The term investigation means any investigation whether conducted by an employee of any governmental entity or any private person, including representatives of any insurance company or an attorney. It is intended to include any inquiry into the facts underlying the basis of the claims and defenses presented herein, and any communication with any person thought to have knowledge about the facts. However, it is not intended to include any communication to which a privilege is claimed between the answering party and its attorney. F. The term possession means within your possession, custody, or control or the control of any of your investigators, agents, employees or other representatives. G. The term correspondence means all communications between two or more people and includes letters, emails, faxes and handwritten notes. H. If you contend that the answer to any interrogatory is privileged, in whole or in part, or if you object to any interrogatory, in whole or in part, state the reasons for such objection and identify each person having knowledge of the factual basis, if any, on which the privilege is asserted. 2
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I. When an interrogatory requests that you identify, or state the identity of a person, you are requested to provide his or her: 1. Full name; 2. Present or last known address or, if unknown, the last known whereabouts; 3. Phone number; 4. Present employers name and address; 5. Occupational position or classification. J. Unless otherwise directed, when an interrogatory asks that you identify a document or writing, please state: 1. 2. 3. 4. 5. 6. Its nature (e.g., letter, memorandum, report, etc.); Its title, if any; The date it was prepared; The date it was sent; The date it was received; The identity, as defined above, or person(s) who: a. Prepared it; b. Participated in any way in its preparation; or c. Signed it; 7. A statement of its subject matter; and 8. The identity, as defined above, of the person who has custody of it. K. In the event that your answer to an interrogatory is not applicable or any similar phrase or answer, explain in detail why that interrogatory is not applicable. L. In the event that your answer to any interrogatory is dont know or unknown, or any similar phrase or answer, explain in detail all efforts made by the named party or its attorneys or representatives to obtain the answer to that interrogatory. M. These interrogatories should be deemed continuing in nature. It is requested that you update your answers to interrogatories as soon as possible after new information is obtained to reflect any information obtained after the interrogatories are initially answered to include all information up to and including the date of the trial. N. Where an interrogatory requests that you provide information concerning what a witness may testify about, that interrogatory is intended to elicit a summary of the information that any witness may have provided to you of whether they may testify at trial. O. References in these Interrogatories to this case or this matter are to the litigation currently pending in this Court under the above-styled caption. 3
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P. References to YOU means the responding party identified above and his/her/its directors, offices, investigators, agents, employees or other representatives, where applicable Q. References to Xcentric mean XCENTRIC VENTURES, LLC unless otherwise specifically stated. R. References to Magedson or Mr. Magedson mean EDWARD MAGEDSON. S. References to the ROR Site or the Ripoff RIPOFFREPORT.COM and/or BADBUSINESSBUREAU.COM. Report mean
T. References to the COMPLAINT mean the COMPLAINT (and any amendments) filed in this litigation. U. References to AEI mean ASIA ECONOMIC INSTITUTE, LLC.
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V. Reference to the Asia Litigation mean the action entitled Asia Economic Institute, LLC et al. v. Xcentric Ventures, LLC, et al. , U.S. District Court for the Central District of California, Case No. 2:10-cv-01360-SVW-PJW and the related prior state court proceeding initially filed in the Los Angeles County Superior Court, Case No. SC106603.
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REQUESTS FOR PRODUCTION OF DOCUMENTS & THINGS 1.) Produce copies of all non-privileged documents, including but not limited to correspondence, in YOUR possession which relate to the Asia Litigation excluding pleadings actually filed with the court, deposition transcripts and exhibits, and documents and correspondence actually provided to or received from Xcentrics counsel during the course of the Asia Litigation. Produce copies of all non-privileged documents, including but not limited to correspondence, in YOUR possession which relate to: a. b. c. d. 3.) Xcentric Ventures, LLC Edward Magedson The website www.ripoffreport.com The webpage located at: http://www.seomoz.org/blog/the-anatomy-ofa-ripoff-report-lawsuit
2.)
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Produce copies of any correspondence you have sent to or received from any of the following people/entities from January 1, 2008 to the present which relate to Xcentric, Edward Magedson, the Ripoff Report website, or the Asia Litigation: a. b. c. d. e. f. g. h. i. j. k. l. Daniel Blackert Sarah Bird, Esq. SEOmoz John F. Brewington Shawn Richeson Darren Chaker James Rogers Kenton Hutcherson Christopher Ingle Tina Norris Jan Martin Smith Fadi Karnaby 5
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m. n. o. p. q. r. s. 4.)
Joe Reed Melissa A. Herman David Russo Eric Goldman Michael Roberts Scott Karosa Richard Goddeau
Produce a copy of any posts that YOU have made on any website, including but not limited to Twitter, Facebook, Linked In and any other social media, regarding the Asia Litigation, Xcentric or Ed Magedson. Produce a copy of any insurance policy which may provide coverage in the event YOU are determined to be liable for any claims asserted in this case. Produce copies of any documents which YOU allege are evidence that YOU had probable cause to continue the Asia Litigation. Produce copies of any documents which YOU allege are evidence that YOU did not act with malice during the Asia Litigation. Produce copies of any and all documents YOU intend to use at trial in this matter.
5.) 6.) 7.) 8.)
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REQUEST FOR ADMISSIONS
1.)
Admit that YOU appeared as co-counsel for the plaintiffs in the Asia Litigation on or around April 19, 2010. RESPONSE: ADMIT _____ DENY _____
2.)
Admit that from April 19, 2010 until the entry of final judgment, YOU never withdrew from acting as co-counsel for the plaintiffs in the Asia Litigation. RESPONSE: ADMIT _____ DENY _____
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3.)
Admit that YOU were actively involved in continuing the Asia Litigation from in or around April 19, 2010 until the termination of the case. RESPONSE: ADMIT _____ DENY _____
4.)
Admit that the Asia Litigation ended in favor of Xcentric. RESPONSE: ADMIT _____ DENY _____
5.)
Admit that prior to the Asia Litigation YOU were personally involved as counsel in other federal cases involving claims arising under the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. 1961, et seq. (the RICO Act). RESPONSE: ADMIT _____ DENY _____
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6.)
Admit that prior to the Asia Litigation YOU were personally involved as co-counsel for the plaintiff in Ideal Steel Supply Corp v. Anza, 373 F.3d 251 (2nd Cir. 2004) (the Anza Litigation). RESPONSE: ADMIT _____ DENY _____
7.)
Admit the Anza Litigation involved, among other things, civil claims arising under the RICO Act. RESPONSE: ADMIT _____ DENY _____
8.)
Admit that in the Anza Litigation, the United States District Court for the Southern District of New York dismissed the plaintiffs RICO claims based on the plaintiffs failure to adequately plead the element of causation. RESPONSE: ADMIT _____ DENY _____
14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 8 RESPONSE: ADMIT _____ DENY _____ 10.) Admit that in the Anza Litigation, the Sixth Circuits decision on the issue of causation was reversed by the United States Supreme Court in Anza v. Ideal Steel Supply Corp., 547 U.S. 451, 126 S.Ct. 1991 (2006). RESPONSE: ADMIT _____ DENY _____ 9.) Admit that in the Anza Litigation, the plaintiff appealed the dismissal of its civil RICO claims to the United States Court of Appeal for the Sixth Circuit which reversed the district courts ruling as to the issue of whether causation had been adequately pled.
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11.)
Admit that after YOU appeared in the Asia Litigation, YOU were aware that civil RICO claims require the plaintiff to prove actual damage to their business or property and that such damage was actually and proximately caused by the defendants pattern of predicate acts. RESPONSE: ADMIT _____ DENY _____
12.)
Admit that after YOU appeared in the Asia Litigation, YOU became aware that that AEI had not suffered any damage to its business or property as the result of any alleged predicate acts of either Xcentric or Magedson. RESPONSE: ADMIT _____ DENY _____
13.)
Admit that despite knowing that AEI had not suffered any damage to its business or property as the result of any alleged predicate acts of either Xcentric or Magedson, YOU continued to prosecute one or more civil RICO claims against Xcentric and Magedson. RESPONSE: ADMIT _____ DENY _____
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Admit that on May 4, 2011 summary judgment in the Asia Litigation was entered as to the plaintiffs civil RICO claims based on a finding that the plaintiffs had failed to introduce any admissible evidence showing that they suffered any damage to their business or property as the result of any alleged predicate acts of either Xcentric or Magedson. RESPONSE: ADMIT _____ DENY _____
Admit that after YOU appeared in the Asia Litigation, YOU became aware that several courts had previously determined that Xcentric and Magedson were entitled to immunity under the Communications Decency Act as long as the allegedly unlawful material was originally created by a third party and was not materially changed by Magedson or Xcentric. RESPONSE: ADMIT _____ DENY _____
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16.)
Admit that after YOU appeared in the Asia Litigation, YOU became aware that no court had ever denied immunity under the Communications Decency Act to Xcentric or Magedson on the merits of a claim (as opposed to denying immunity in a non-merits context such as ruling on a Motion to Dismiss). RESPONSE: ADMIT _____ DENY _____
17.)
Admit that during the Asia Litigation, YOU became aware that Raymond Mobrez and Iliana Mobrez lied under oath about the substance of their conversations with Ed Magedson. RESPONSE: ADMIT _____ DENY _____
18.)
Admit that YOU did not voluntarily dismiss the Asia Litigation because YOU believed that doing so would expose YOU to potential liability for Xcentrics attorney fees. RESPONSE: ADMIT _____ DENY _____
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Admit that YOU filed amended complaints in the Asia Litigation after July 19, 2010 primarily to gain leverage to negotiate a walk-away settlement so that YOU would not be liable for Xcentrics attorney fees. RESPONSE: ADMIT _____ DENY _____
Admit that in or around May 2010, YOU read and reviewed the letter dated May 11, 2010 attached as Exhibit E to the First Amended Complaint (Doc. #55) filed in this matter. RESPONSE: ADMIT _____ DENY _____
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21.)
Admit that the document attached hereto as Exhibit A is a true and correct copy of a pleading entitled Confidential Settlement Conference Statement prepared for use in the Asia Litigation. RESPONSE: ADMIT _____ DENY _____
22.)
Admit that YOU assisted in the preparation of the document attached hereto as Exhibit A. RESPONSE: ADMIT _____ DENY _____
23.)
Admit that at the time YOU assisted in the preparation of the document attached hereto as Exhibit A, YOU knew that the plaintiffs (meaning AEI, Raymond Mobrez, and Iliana Llaneras) had not incurred damages in the amount of $2,000,000.00. RESPONSE: ADMIT _____ DENY _____
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INTERROGATORIES 1. 2. 3. 4. State the earliest date upon which YOU first became aware of the Asia Litigation. State the total number of billable hours YOU spent working on the Asia litigation. State the total amount (in dollars) that YOU billed and the total amount that YOU were paid for work YOU performed during the Asia Litigation. State the name and all known contact information (including, but not limited to, address, phone number, fax number, and email address) of each person YOU interviewed, spoke with, or corresponded with regarding the Asia Litigation from the date you first became aware of the case until the date the action terminated. State the name and all known contact information (including, but not limited to, address, phone number, fax number, and email address) of each person who assisted YOU with any aspect of the Asia Litigation including, but not limited to, law clerks, assistants, and investigators. Explain in as much detail as possible each and every thing YOU did to investigate whether any of the allegedly defamatory posts concerning AEI, Mobrez or Llaneras appearing on the Ripoff Report website were false and explain the results of such investigation. Explain in as much detail as possible why YOU contend that probable cause existed for any of the civil RICO claims asserted in the Asia Litigation. Identify all legal authority which YOU contend supported YOUR determination that that probable cause existed for any of the civil RICO claims asserted in the Asia Litigation. Identify all legal authority which YOU contend supported YOUR determination that that the claims asserted in the Asia Litigation were not barred by the Communications Decency Act. State the name, address, telephone number, and subject matter(s) of expected testimony of each person who YOU intend to call as witness at trial in this matter. State the names, addresses, and telephone numbers of each person who contributed to, or assisted with, preparing any of the responses to the questions/requests set forth herein. 12
5.
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12. a.
For each person listed in response to the prior question, please state: Which specific response(s) the person contributed to/assisted with; What part of the specific response(s) the person contributed to/assisted with.
b. 13.
If your response to any Request for Admission is anything other than an unconditional admission, please give a full and complete explanation for the denial and state all facts and identify all documents and witnesses that support and/or explain your denial. State the name, address, phone number, and any other contact information YOU have for any current or former CPAs, bookkeepers, assistants or accountants who have prepared or assisted in preparing tax returns for AEI, RAYMOND MOBREZ, and/or ILIANA LLANERAS from 2001 through the present. State the name, address, phone number, and any other contact information YOU have for any current or former CPAs, bookkeepers, assistants or accountants who have prepared or assisted in preparing tax returns for any businesses other than AEI owned by RAYMOND MOBREZ and/or ILIANA LLANERAS from 2001 through the present. State the name, address, phone number, and any other contact information YOU have for any person who conducted any investigation into the claims made against Defendants in the Asia Litigation. DATED this 5th day of October, 2012. GINGRAS LAW OFFICE, PLLC /S/ David S. Gingras David S. Gingras Attorneys for Edward Magedson and Xcentric Ventures, LLC
14.
15.
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CERTIFICATE OF SERVICE
I hereby certify that on October 5, 2012 I mailed an original of the foregoing to: John S. Craiger, Esq. David E. Funkhouser III, Esq. Krystal M. Aspey, Esq. Quarles & Brady LLP One Renaissance Square Two North Central Avenue Phoenix, Arizona 85004-2391 Attorney for Defendant Lisa J. Borodkin Lisa J. Borodkin, Esq. Zuber Lawler & Del Duca 777 S Figueroa St 37th Floor Los Angeles, CA 90017 Raymond Mobrez Iliana Llaneras PO BOX 3663 Santa Monica, CA 90408 Defendants Pro Se
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/s/David S. Gingras
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! ! ! ! ! ! ! ! ! ! ! ! ! ! "#$%&%'!(!
CONFIDENTIAL DO NOT FILE

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DANIEL F. BLACKERT, ESQ., CSB No. 255021 LISA J. BORODKIN, ESQ. CSB No. 196412 Asia Economic Institute 11766 Wilshire Blvd., Suite 260 Los Angeles, CA 90025 Telephone (310) 806-3000 Facsimile (310) 826-4448 Daniel@asiaecon.org Blackertesq@yahoo.com lisa@asiaecon.org lisa_borodkin@post.harvard.edu Attorneys for Plaintiffs, Asia Economic Institute LLC, Raymond Mobrez, and Iliana Llaneras UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA ) ) ) ) ) ) Plaintiffs, ) ) vs. ) ) XCENTRIC VENTURES, LLC, an Arizona LLC, d/b/a as BADBUSINESS ) ) BUREAU and/or ) BADBUSINESSBUREAU.COM ) and/or RIP OFF REPORT and/or ) RIPOFFREPORT.COM; BAD ) BUSINESS BUREAU, LLC, organized ) ) and existing under the laws of St. ) Kitts/Nevis, West Indies; EDWARD MAGEDSON an individual, and DOES ) ) 1 through 100, inclusive, ASIA ECONOMIC INSTITUTE, a California LLC; RAYMOND MOBREZ an individual; and ILIANA LLANERAS, an individual, Defendants. Case No.: 2:10-cv-01360-SVW-PJW The Honorable Patrick J. Walsh Settlement Conference Hearing Date: July 14 Time: 11:00 a.m. th Courtroom: 827B (8 Floor) Trial Date: August 3, 2010 CONFIDENTIAL SETTLEMENT CONFERENCE STATEMENT
Settlement Conference Statement 1

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1
I.
BRIEF STATEMENT OF THE FACTS
In or around January 2009, the first Ripoff Report (Reports) about Asia Economic Institute LLC (AEI) was posted. Subsequent Reports contain false, defamatory, unsubstantiated, embarrassing and otherwise negative information about AEI and Plaintiffs Raymond Mobrez and Iliana Llaneras (collectively, Plaintiffs). The negative reports about Plaintiffs include false allegations of tax fraud. It was then that they discovered the nefarious Catch-22 of the Ripoff Report: Ripoff Report (ROR) will not do anything about the posts until the subject admits responsibility and pays to be in the Corporate Advocacy Program (CAP). Applicants must also agree not to sue Defendants and not to sue the authors of reports. Below each report are more defamatory comments from other posters (posts). Defendants also create powerful meta-tags causing the reports to rank highly in Google search results.1 Plaintiffs business is now closed. There are 6 reports regarding Plaintiffs. In addition, Defendants boast that suing them is nearly impossible and that anyone who tries will lose and end up paying Defendants legal fees. As of May 11, 2010 Defendants claimed their legal fees were at least $25,000. II. SUMMARY OF THE IMPORTANT ISSUES A. Defendants will not remove the defamatory Reports and posts.
1. Defendants Position: Defendants are adamantly opposed to removing any of the defamatory reports and posts. This has been their position throughout negotiations. However, Defendant Magedson has testified inconsistently that Defendants will redact matter such as tax fraud from Reports. 2. Plaintiffs Position: Plaintiffs position is that Defendants should remove the Reports and posts to stop the injuries caused by them. B. Defendants demand for legal fees.
1. Defendants Position: Defendants have stated that they are flexible with terms of settlement except for payment of attorneys fees.
The reports usually rank among the top 3 results on Google. In addition, the reports rank highly on other popular search engines. Settlement Conference Statement 2

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2. Plaintiffs Position: The defamatory posts have destroyed Plaintiffs business and ability to earn a living. Plaintiffs do not have the monies to pay any such fees. This lawsuit was brought with merit and in good faith, and Plaintiffs should not be responsible for any such fees. C. Plaintiffs Damages
1. Defendants Position: Defendants are unwilling to pay for any of Plaintiffs damages. 2. Plaintiffs Position: Plaintiffs would settle for payment of a liquidated amount of $2,000,000.00 or otherwise approved by this Court. D. Defendants theory that William Stanley, John F. Brewington, blogger Sara Bird and/or other unspecified individuals have paid or otherwise encouraged Plaintiffs to initiate and litigate this lawsuit.
1. Defendants Position: Defendants believe Plaintiffs have useful testimony regarding a suit for conspiracy to commit a tort in Arizona, or a 9th Circuit appeal against a blogger. 2. Plaintiffs Position: There is categorically no truth to Defendants theory. E. Threats to Sue Plaintiffs Counsel in Arizona and Insinuating Loss of California Law Licenses
1. Defendants Position: The threats are set forth at length in Plaintiffs July 8, 2010 ex parte motion for sanctions and related relief. DN-87. Defendants did not dispute the factual allegations. On May 10, 2010 at the conference of counsel on bifurcation of damages, bench trial and other discovery matters, Defendants stated they would sue Plaintiffs counsel personally in Arizona and stated I hope youve enjoyed practicing law in California. Defendants otherwise warned Plaintiffs counsel about aiding and abetting their clients criminal conduct thereafter in writing. 2. Plaintiffs Position: Plaintiffs and their attorneys have and continue to take this issue very seriously. Plaintiffs and their attorneys have consulted with state and federal ethical guidelines and the California State Bar ethics hotline and followed them throughout. The continuation of Defendants threats

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is tantamount to bad faith intimidation.2 In May 2010, Plaintiffs counsel sent Defendants counsel an MCLE self-study article from the California Bar Journal regarding threats as an attempt to collect legal fees as possible constituting a stand-alone claim of extortion. DN-87. III. INFORMATION REGARDING DAMAGES
Plaintiffs evidence of damages is as follows: 1. AEIs Tax returns; 2. AEIs Lease for office space; 3. W-2 and 1099 forms for employees and independent contractors employed for the purpose of web development, legal work, and incorporation; 4. Receipts for travel expenses to promote business overseas; 5. Receipts for equipment purchased such as computers, monitors, laptops, furniture, copiers, faxes, printers, and other office equipment; 6. W2 and 1099 forms for persons employed to develop AEIs Educational Seminars and Conferences, Expert Network, Job Site, Overseas Exchange Program, and InformAsia Web site; 7. Loss of potential revenue from AEIs Educational Seminars and Conferences, Expert Network, Job Site, Overseas Exchange Program, and InformAsia Web site; 8. Loss of potential revenue from real estate and mortgage transactions; 9. Harm to personal and business reputation; 10. Declaration of Charlie Yan; 11. Declaration of Justin Lin; and 12. Declaration of Israel Rodriguez. Plaintiffs estimate their total to damages to be at least $2,000,000.00. IV. SETTLEMENT DISCUSSIONS
Plaintiffs sent a written settlement proposal to Defendants on April 21, 2010. Defendants rejected Plaintiffs settlement proposal, stating that they would only settle if their attorneys fees were paid. On May 10, 2010, the parties discussed settlement under threat of suit in Arizona, loss of California license, conditioned on payment of defense fees.
On July 8, 2010, Plaintiffs filed an ex parte motion seeking sanctions against Defendants. Among the sanctionable conduct discussed in the motion was Defendants continued threats and intimidation. A courtesy copy was delivered to Judge Walshs Chambers on July 9, 2010. DN-87.

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3
On June 8, 2010, the parties discussed settlement. No agreements were reached. Defendants stated that they would give us the world if we could provide them with concrete evidence in other cases and legal fees. The Plaintiffs proposed the following settlement terms: 1-that the reports and posts be removed from ROR 2- each side bear their own attorneys fees and costs and 3- Defendants pay Plaintiffs damages so AEI can reopen its business. On June 8, 2010 Defendants discussed an arbitration program that they were currently developing. Defendants explained the program as follows: 1Plaintiffs would pay ROR $1,500.00, 2- ROR would hire an arbitrator, 3- ROR would set up arbitration between Plaintiffs and the individuals who authored the defamatory posts, 4- If Plaintiffs prevailed by an unspecified standard of evidence the defamatory posts would be amended but not removed. The Defendants were unable to provide Plaintiffs with much more detailed information on their arbitration program because it was, as Defendants put it, in its beta phase. No one has ever done the arbitration program. On June 8, 2010, Defendants again threatened Plaintiffs and their attorneys with a lawsuit in Arizona for malicious prosecution.3 On June 24, 2010, after the hearing with Judge Walsh on Plaintiffs Motion to Compel, the parties once again engaged in settlement discussions pursuant to Local Civil Rule 16. No agreements were reached. Plaintiffs proposed the following settlement terms: 1- that the defamatory posts on ROR be removed permanently from the website, and 2-that both sides should pay their own litigation fees and costs. Defendants proposed the following settlement terms: 1- that Plaintiffs pay all of Defendants legal fees and costs, and 2- that Plaintiffs provide Defendants with certain unspecified information on John F. Brewington and/or any other individuals that Defendants erroneously believe may have encouraged Plaintiffs to initiate this lawsuit. Defendants settlement terms were highly subjective and contingent upon Defendants satisfaction and final approval. Defendants stated that they would not know if Plaintiffs had performed this condition of settlement until after they received the information, and the decision would be made in
Defendants have also threatened Plaintiffs and their attorneys in written correspondences. Settlement Conference Statement 5

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their sole discretion. Plaintiffs felt that there was no way they could reasonably demonstrate performance of such an agreement. On June 24, 2010, Defendants attorney once again threatened Plaintiffs with a retaliatory lawsuit for malicious prosecution and stated that he would send a written statement as the first step in seeking Rule 11 sanctions against Plaintiffs and Plaintiffs counsel. Defendants attorney promised that he would drag Plaintiffs and their attorneys to Arizona once this litigation was resolved. Plaintiffs advised Defendants that they had no grounds for this threat and requested the factual and legal basis for Rule 11 sanctions against counsel. Likewise, Plaintiffs informed Defendants, yet again, of the lengths they had gone to in order to ensure compliance with state and federal ethical guidelines. Following the June 24, 2010 Order from this Court that the deposition of Defendant Magedson counsel would be continued, Plaintiff Raymond Mobrez offered to fly to Arizona to meet personally with Ed Magedson around the time of the continued deposition. The purpose was to conduct frank settlement discussions directly between the parties without interference from the attorneys. Plaintiffs offered that the discussions could be recorded, in the presence of Defendants private security officer, at a secret location or otherwise under any terms Defendant Magedson desired. Defendants indicated interest in this proposal. Defendants later asked Plaintiffs to stipulate that Defendant Magedson could appear at the July 14, 2010 settlement conference by telephone. At approximately 12:00 p.m. on Friday, July 2, 2010 informed Plaintiffs for the first time that they were unwilling to set a date for continuing his deposition and stalled calling this Court on the telephone until after 3:00 p.m. By that time, this Court was unavailable. CONCLUSION Settlement discussions with Defendants have not been productive. Plaintiffs remain open to settlement. Plaintiffs strongly feel Defendant Magedsons personal appearance at the July 14, 2010 conference is essential to having a constructive, objective settlement negotiation without undue influence from Defendants counsel.

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DATED:
July 10, 2010 By:
Respectfully submitted, /S/ Daniel F. Blackert DANIEL F. BLACKERT LISA J. BORODKIN Attorneys for Plaintiffs, Asia Economic Institute LLC, Raymond Mobrez, and Iliana Llaneras

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REQUEST FOR ADMISSIONS

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CONFIDENTIAL DO NOT FILE

Settlement Conference Statement 1

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BRIEF STATEMENT OF THE FACTS

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Settlement Conference Statement 6

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July 10, 2010 By:

Settlement Conference Statement 7

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