Transcript of the Hearing for Preliminary Injunction

I have some thoughts that I’ll be writing up before the end of the week, but for those who could not attend, I transcribed most of the hearing for preliminary injunction today, for the WP Engine v Automattic & Matt Mullenweg case. (I had an internet issue and missed ~1 minute of it.)

Please note that this is not an official transcript, but an unofficial one based on what I heard.

I’m certain no one wanted 9000 words in their inbox, but here you go! Enjoy!

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Court: Court is now in session. The honorable Araceli Martínez-Olguín presiding.

Judge Araceli Martínez-Olguín: You may be seated.

Zoom: Recording in progress.

Court: Calling civil matter 24-6917 WP Engine Incorporated v. Automattic, Inc. Counsel, please state your appearances for the record starting with the plaintiff.

Rachel Herrick Kassabian: Good morning, Your Honor. I'm Rachel Herrick Kassabian of Quinn Emanuel here on behalf of the plaintiff, WP Engine. And with me are several of my colleagues, including my partner, Yury Kapgann, my partner, Brian Mack, and my colleague, Sarah Jenkins. We also have Ms. Brooklyn Botello here with us to help us operate slides of Fulcrum.

Anna Shaw: Good morning, Your Honor. I'm Anna Shaw from Hogan Lovells, and I am appearing on behalf of defendants, Mr. Matt Mullenweg and Automatic. I am joined by my colleagues, Lauren Cury and Michael Maddigan, as well as the general counsel for Automattic, Jordan Hinkes.

Judge: All right, folks, you are welcome to stay at the tables if you prefer. I have… I'm going to I'm going to start with some questions for you all. And my first set of questions.

Court Reporter: Excuse me, Your Honor, this is the court reporter.

Judge: Hi, Ms. Dub. Oh, can you hear me?

Court Reporter: I can hear you, but I will not be able to tell who's speaking unless they come up to the podium and say their name because the tables are too far away.

Judge: Thank you, Ms. Dub. I forgot the cameras. Yeah, so I'm wrong. Come forward. Whoever whoever's taking whoever anticipates taking it. Come on forward to the lecterns.

Judge: We're here on plaintiff's motion. So let me… I'll start with my questions for you.

[Judge: It's better there, too, because there's a camera. Ms. Dub can see you now.]

Judge: Could I ask you to please… I want you to take a moment and just tell me your best argument on your strongest claim and why you're likely to succeed on the merits. And please know that I'm the one asking to focus you that way. So please know that I’m, that you are not conceding that your other claims lack merit. I'm asking you… I just want to hear your best argument on that particular element of the Winter test.

Kassabian: Thank you, Your Honor. Rachel Kassabian on behalf of plaintiff WP Engine. We have an interesting case here because all four of these claims essentially rely on the same or very similar sets of facts that we have demonstrated warrant the issuance of an injunction here. But if I if I had to pick one, I would I would probably go with extortion, Your Honor, attempted extortion, which means both the CFAA cyber extortion as well as the common law attempted extortion claim that we have. Those facts are absolutely just shocking and egregious.

Judge: So I'm going to stop you. I've got the facts. Take for granted that I've got the facts—I want you to talk to me about the law. I've looked I've looked at the stuff I've looked at your demonstrative.

Judge: I was going to leave this for as a housekeeping matter, but let me actually say this right now, just because it's worthwhile. Objections are never to be sent to my courtroom deputy. My courtroom deputy does not resolve objections. You all do not raise objections to her. You want to make objections? You make them to me. You don't take her time on things like that. It is… you are not alone in having done this, I just feel the need to now scold every counsel that does it because, invariably, to the extent that she is an extension of me, you all should treat her with more respect. To the extent that she is not an extension of me and cannot resolve your disputes for you: stop. This isn't y'all—this was someone else last week. But truly, I've seen the e-mail exchanges on which they either have forgotten she's there or then try to couch it in better terms because she's there for the court. No.

Shaw: My apologies, Your Honor. Understood.

Judge: All right. So talk to me about the law, because I've got the facts. I've gone through the facts. I even went through the demonstrative with the understanding that, of course, it's going to be there. It's their demonstrative. That's the nature of the of these proceedings. They are, in fact, adversarial. So, let me hear from you.^[1] So coming back down. Go ahead Ms. Kassabian.

Kassabian: Your Honor, I would be I would be happy to discuss the legal issues involved in the attempted extortion claim. I should also add, by the way, that because extortion is a predicate act for UCL, it sort of knocks all three claims down together and they all warrant injunctive relief. But, in any event, as you saw in the papers, there is some debate about what the precise elements for an attempted extortion claim are. And the short answer here is: it does not matter. Under any of these formulations, we've demonstrated a likelihood of success.

Kassabian: For instance, if you consider the definition taken from the penal code, the definition is the obtaining of property or other consideration from another with his or her consent induced by a wrongful use of force or fear. The Hobbs Act, the federal Hobbs Act, has a very similar definition. And then we have the Levitt versus Yelp Ninth Circuit 2014 case, which has a slightly different definition. That definition reads: “a litigant must demonstrate either that he has a preexisting right to be free from the threat and harm or that the defendant had no right to seek payment for the service offered.” And as we've demonstrated in our papers, Your Honor, it really does not matter which test you choose to apply. They all are satisfied here regarding the attempts to obtain money through use of force or fear. You're familiar with the record, Your Honor, and the facts and the five hours and 21 minutes Defendants gave my client to respond to their demand for tens of millions of dollars. That’s factually, that record is clear.

Kassabian: And the penal code—as well as the Hobbs Act, to the extent the court wants to consider it—that standard is satisfied. As far as the Levitt versus Yelp case, I'll first point out that the the at the district court level, that case, there's a footnote in that case—I believe it's footnote five—that mentions, essentially, to the extent that there are the cases have recognized that there is, in fact, a civil claim for attempted extortion that you look to the elements of the penal code, the definition in the penal code. On appeal, the Ninth Circuit enunciated this two part test. It's an either/or, right? We don't have to satisfy them both.

Kassabian: So, regarding the first factor. There is no question that WP Engine has a right to be free from a threat of nuclear war. They have a right to be free from being banned from the very community in which they operate their business. There's just no question about that.

Kassabian: Then there's an “or”, we can satisfy the first prong or the second and the or…

Judge: Stay on that first one for just a moment because I do have a note to myself to ask you: What right WP Engine has to continued access without paying any kind of license?

Kassabian: So, Your Honor, well, do you mean a license to use wordpress.org or do you mean the purported trademark license that the defendants produced on the morning of September 20th and demanded a signature?

Judge: I imagine that it's harder for you to answer the former. So let's stick with that one.

Kassabian: So there's just simply no connection there, Your Honor, whatsoever. The test is not: does WP Engine have a right to be free from a trademark license? That's not—that fact is not relevant to that particular prong of the test. I will say that before September 20th, right, the entire WordPress community, including WP Engine, was using wordpress.org. The operator of that site chose to hold it out as a part of the community hub. Right. Doesn't charge anyone anything to use it. That's how it's been for 15 years. Right. That's the status quo that we're talking about.

Kassabian: And suddenly out of the blue, on the morning of September 20th, defendants purport to raise something so urgent that they must demand a five hour response in the form of threats to ban WP Engine from the WordPress community and to smear them and to essentially declare war, scorched earth nuclear war on them. There's just no question that that is the thing they have a right to be free from.

Judge: Can I ask you, I did note that your proposed order rolls things back to September 20th and it sounds like that's what you're arguing is status quo. I thought WP Engine's access to WordPress wasn't compromised until the 24th.

Kassabian: So there were various steps taken starting on September 20th, which is why that is the marker that we are using here, Your Honor. You are correct that the actual ban from wordpress.org was not technically implemented until September 25. A switch was flipped that day without warning. Our employees, you know, went to interact with that site as they always do to do their jobs and serve their customers and they were blocked. But there were other things that happened prior between September 20th and 25th. For instance, defendants disparaged and smeared WP Engine via wordpress.org, right. They committed various other wrongs between those dates, which is why we are asking to resume the status quo ante of, you know, the moments before this extortion began.

Judge: I have a handful more questions for you, but I don't want to get too far away from… Your having put forward the extortion elements and your elements and your argument about that without giving Ms. Shaw a chance to respond. So if you would

Kassabian: Your Honor, just to be clear, I have not reached the second element of Levitt, but I'm happy to wait.

Judge: I stopped you there.

Kassabian: Would you like me to address the second, the alternative formulation of the test?

Judge: I’m happy to have you go… Well, I'm guessing it's easier to hear all of hers and then hear yours. All right, let's do that. Go ahead.

Kassabian: Thank you, Your honor. So we either have to demonstrate under the Levitt test that we have a right to be free from the threat or, alternatively, the defendant had no right to demand payment for the service being offered. Right. Either one is satisfies the test. And here, you know, charitably put, the service that was being offered by defendants in their extortive demand was a purported trademark license, right, dropped on their desk at 10:23 a.m. the morning of the WordPress WordCamp keynote speech, at which defendants were threatening to do harm to WP Engine. We know that defendants had no right to offer that, quote unquote, service because it is a pretext. It is a sham. Right?

Kassabian: You look at the record. We see that for 15 years, WP Engine was making nominative fair use of the WordPress mark as the entire community did for 15 years without so much as a shoulder tap. “Excuse me.” “Here's an email.” “Here's a text.” “Here's a cease and desist letter.” Nothing. Nothing whatsoever, until the morning of September 20th when we receive this one page bizarre trademark license agreement. That's not how trademark owners operate. That is not how you protect and enforce your mark. You don't wait 15 years and then drop a demand for thirty two million dollars on the recipient.

Kassabian: We also know from the price set, right, this one page license listed a price of eight percent of WP Engines gross revenues, which happens to amount to thirty two million dollars. And it set that price for a seven year period to automatically renew essentially forever. And when asked, how did you set that price? Mr. Mullenweg, defendant Matthew Mullenweg, acknowledged, “it's what I thought they could pay. We did an analysis to figure out what the free cash flow was. That's how we set that number.” That's not how you calculate a royalty. That's how you set a ransom.

Kassabian: We also have other evidence in the record, including all of the other WordPress hosts out there who all use the same terminology, make the same nominative fair use of the WordPress trademark.

Kassabian: Mr. Mullenweg gave a speech on November 9th in Mexico City, after briefing on this matter had closed, where he claimed, “oh, those other, you know, hosting providers, they're not saying ‘managed WordPress.’ They're not saying ‘hosted WordPress.’ Only WP Engine is.” And that is false. You can visit the websites.

Judge: It's also not in front of me because it's after the briefing in this matter closed. So, keep it moving.

Kassabian: It is, Your honor, but in the record, we have the long standing use of the mark with absolutely no effort to enforce or even even a complaint of any kind. And we have the royalty rate, which was clearly set in an extortionate manner, not based upon the value of the purported use, not based upon the value of the purported mark disconnected from all of those things. I can stop there, Your Honor, just in the interest of time.

Judge: Thank you, Ms Kassabian. Go ahead, Ms. Shaw.

Shaw: Your Honor, with respect to the extortion claim, we have presented authority showing that courts in California do not recognize a private cause of action for attempted extortion under the California Penal Code. In reply, plaintiffs rely on Tran v. Winn, which involves a claim for rescission of consent under duress. At bare minimum, if the plaintiff is now pleading a different claim or a different type of rescission, they should be required to identify what that claim is, plead it with particularity and present evidence in support of it, if this court is going to grant the extraordinary remedy of a preliminary injunction.

Shaw: But even if they're able to do that, we believe this claim still fails under Levitt—the case Ms. Kassabian was citing—because economic extortion under both California and federal law requires demonstrating this either pre-existing right to be free from the threat and harm, or that the defendant had no right to seek payment for the services offered. When you look at this test in the context of the two items that plaintiffs have identified, namely the trademark license and the dot-org block, you will reach the conclusion that they can't meet the standard.

Shaw: So let's first start with the trademark license. So the threat at issue is the demand that was sent to them for a trademark license. Plaintiffs keep focusing that trademark license on a payment. There was a second option in the license as well, which was to satisfy the license through providing essentially the equivalent of volunteer hours to dot-org based on WP Engine's own employees. That obviously has not been highlighted in the argument here. Additionally, I will say WP Engine keeps focusing on this five hours and 21 minutes. But if you actually look at the texts that are included in their own demonstratives, you will see that there is a text from Mr. Mullenweg in which he says, or he makes reference to even negotiating the terms the following week. They just never responded to Mr. Mullenweg's response.

Shaw: But coming back to the trademark issues, I think it is notable that on the eve of their filing of the complaint, plaintiffs did a cleanup job on their website to delete numerous references to the WordPress and WooCommerce trademarks, including references that appeared in product names, which is a violation of the WordPress trademark policy. So for them to sit here today and say that Defendants have absolutely no right to bring this claim, and they have a right to be free of the threat of the claim, it lacks a certain level of credibility. Additionally, if this court were to adopt that interpretation, essentially any demand letter sent out by any trademark owner could potentially, the recipient of that letter could potentially argue that it is a claim of extortion if they disagree with the merits of that particular demand.

Shaw: If we then turn to the second element that plaintiffs rely on, which is the block of .org. Just to be clear about the block of .org, even today, the WordPress software, the plugins, all of that can be accessed by plaintiffs and basically anyone. What has been blocked is a enhanced service for plugins that is provided by the .org website, which would allow plaintiffs to host their plugins, distribute their plugins, manage their plugins. It allows them to link to .org so they themselves don't have to update and upload plugins. That's the service we're talking about, which is different from the resources on .org.

Shaw: But in any event, plaintiffs need to be able to point to some pre-existing right to satisfy this Levitt test that they are entitled somehow to be free of this block. And there is no, there's nothing that can point to, to establish that pre-existing right. It sounds like in their argument, they seem to be arguing kind of a promissory estoppel type claim because they certainly can't point to any contract or other obligation or agreement to satisfy this prong. But that promissory estoppel claim, Your Honor, is not before the court at the PI stage.

Judge: Let me turn your attention to a different one of plaintiff's claims from Ms. Shaw. Could you tell me why you think they're, why they are unlikely to succeed on their tortious interference with contractual relations?

Shaw: Certainly, Your Honor. So the tortious interference claim requires that, and let me first note, plaintiffs seem to have collapsed the analysis of the tortious interference with contractual relationships and the tortious interference with respective economic advantage into the same analysis. It is worth noting for this court, as I'm sure the court recognizes, there are additional elements and differences between those two claims. With respect to the contractual relations tortious interference claim, Plaintiff's main defense seems to be that they're under no obligation to identify the parties to any specific contract, but they should be required to identify what the language of the contract is and, at minimum, what the terms of the contract are that were breached or disrupted.

Shaw: The mere migration of customers from a service provider who may be providing services under an at-will contract—we don't know if it's an at-will contract because they haven't produced those contracts despite four separate opportunities in their complaint, amended complaint, P.I. motion and reply to do so—and which would increase, which would impose additional elements of proof on the Plaintiffs. We simply don't know what those terms are that are breached. They rely on Altera for the proposition that they do not have to identify that information. But in Altera, the actual contracts at dispute, which were the subject of the tortious interference claim, were available to the court.

Shaw: Additionally, the actual terms in that contract that were breached were identified by the parties bringing that claim and the parties further identified how the defendants had the specific actions the defendants had taken to breach those specific terms. We simply do not have that here and it is difficult to even, honestly, evaluate the claim without those basic pleadings.

Judge: While you have the mic, Ms. Shaw, let me ask you a handful more questions.

Shaw: Yes, Your Honor.

Judge: Have defendants required a license agreement of any entity other than WP Engine?

Shaw: Yes, they do have sub-licenses in place for their trademarks.

Judge: And you may have already started to, well, no… Does WordPress remain free for everyone except WP Engine?

Shaw: It depends on what you mean by WordPress. And so I do want to be specific about what that means. If you're talking about the WordPress software itself, it's free for everyone, including Plaintiffs. If you're talking about access to the, you know, going to WordPress and downloading plug-ins, it's free for everybody, including Plaintiffs. What Plaintiffs cannot do is upload plug-ins to the WordPress directory. They cannot link their systems to our servers, which is what they were doing previously, to automatically create updates and uploads of any changes in the plug-in directory.

Judge: So in that vein, and this may be a little broad, this question may be too broad, but you narrow it for me. But, what are small business owners or others who rely on WP Engine's services supposed to do if Defendants decide to pull down one of the other plug-ins and disable some access to them? Doesn't that necessarily disrupt a third party's website?

Shaw: So I'm not, it's a technical question. I'm not sure that is exactly the facts at issue here. So I can tell you what we understand WP Engine has done based on the statements in the Prabhakar Declaration, which was submitted in reply. We understand what, and of course, it may be different. My understanding may be incorrect because I'm outside WP Engine systems. But, what we understand that they've done is that they have essentially created a mirror, and that mirror functions to essentially provide those uploads and updates that were previously being provided by .org for free and without any contractual obligation to do so. That has ended. But, as noted in a September 30th, X post from the WP Engine side, they came up with a technological solution to restore customer functionality. That same statement also appears in the Prabhakar Declaration.

Shaw: The technical issues or technical differences, as stated in the Prabhakar Declaration, is that now WP Engine has to undertake work to do that instead of relying on that free service being provided by .org. And that has created a different workflow for WP Engine and created additional time and resources within the company in order to do that.

Judge: Let me ask you one thing with respect to the bond. I did see an argument about WP Engine being in debt to defendants. I wanted to ask what invoices, if any, defendants sent to WP Engine prior to September 20th.

Shaw: There were no invoices, Your Honor.

Judge: I have run through my list of questions for you, Ms. Shaw. But I want to give you… Plaintiffs haven't been fully heard yet. I'm either happy to let you keep the mic and let you present further argument that you might have or to hand it back to Ms. Kassabian.

Judge (to Kassabian): I have further questions for you, but I also want to let you finish other points you might want to make.

Shaw: The only point I would make… I was present in your courtroom for your prior hearing, PI hearing.

Judge: I’m sorry. (Chuckle.)

Shaw: And there were two statements that you made about preliminary injunctive relief that the defendants strongly agree with you on. The first is that this is an extraordinary and drastic form of relief. And the second is that the touchstone of PI, in many instances, is likelihood of success on the merits. And, I think, as you can see in our briefing, there are serious issues with the claims that have been brought by plaintiffs. As you know, we did file a motion to dismiss concurrently with our opposition to the PI. That motion dismissed was mooted by an amended complaint that was filed after the close of briefing in this case. We do intend to renew that motion to dismiss, and we do believe these claims are susceptible to dismissal at the pleading stage.

Judge: Thank you.

Shaw: Thank you, Your Honor.

Judge: Ms. Kasabian, I want to run through my questions and then give you a little bit of air time as well. But again, I have gone through everything, and yet I like to confirm these things. Could you just address for me why the harm here, why the harm alleged is irreparable? Because it seems to me that WP Engine should do what it needs to furnish promised services to its customers and that it can recover the cost of any workarounds it's had to implement as a result of what's happened and the facts that you've alleged.

Kassabian: Sure. So, Your Honor, first, I would like to just address that as a general matter, Plaintiff has demonstrated that it is suffering ongoing loss of customers, loss of market share, harm to its reputation, loss of goodwill. All of those, of course, are recognized as forms of irreparable harm. There has been absolutely no showing to the contrary. That's evidence we've put in the record, and it's unopposed. I think the only response we heard from defendants was something to the effect of, well, that wasn't caused by us. And, of course, it was. And I think the evidence is overwhelming on causation.

Kassabian: We know that not just from the evidence that we have put in, Your Honor, but we have a multitude of admissions from the defendants. Essentially, they went on a speaking tour after committing this wrongful extortion. And we have many, many admissions in the record, Your Honor, about the harm and bragging about the harm that has been caused here that Ninth Circuit law confirms is irreparable. I would love to, I do have responses to other things that we've heard, but I really want to answer your questions squarely and succinctly regarding why isn't the workaround good enough. And for that, I would like to turn the microphone over to my colleague, Brian Mack, who does have a technical background, and would be happy to explain to you why the mirrored repository does not solve the problem in any way, shape or form here. And without restoration of the status quo ante, we absolutely will continue to suffer irreparable harm in a technological manner, having been impaired from being able to service our clients in a way that, you know, two years is a long time, right, Your Honor, before we get to trial in this case. So I'd like to turn it over to Mr. Mack so he can explain that.

Judge: Certainly. Go Ahead.

Mack: Good morning, Your Honor. Brian Mack, on behalf of plaintiff. I think we heard opposing counsel refer to the block as an enhanced service for plug-ins and that we cannot link our systems to their servers, but that trivializes what was actually done here. The WordPress core software, the software that defendants make available on their website, is intimately linked with WordPress.org. There's 1500 references in the code. They're hard coded references that you cannot change. Normally, when you have an application running on your computer, you could go to the settings or the properties. You could change the update server to whatever you would like. That's not the case here. Defendants know that's not the case here. It's completely intertwined with the data and the resources on WordPress.org, the actual core software that you download. Every single WordPress installation relies on WordPress.org. It calls back to pull plug-ins and updates to plug-ins.

Mack: As soon as our access was blocked, the WordPress websites all gave error messages on the admin panel. And if you're reading the briefing, it might be a little confusing about the admin panel. They make it seem like that's a panel that we provide, that we developed. The admin panel is inherent in every WordPress installation. It comes with the core software. Every time you download the software, you have an admin panel to administer your sites. That admin panel needs access to WordPress.org.

Mack: So, what we did to avoid all these error messages—it immediately broke our website. And, you can see from Docket 18.7, when they announced that WordPress Engine was banned, Mr. Mullenweg stated on September 25th, any WP Engine customers having trouble with their sites should contact WP Engine support and ask them to fix it. So he knew when we were banned, it was going to immediately break all of our hosted sites. What we did was implement a temporary and partial workaround. And that temporary and partial workaround was a mirror. It's basically trying to download and copy everything from WordPress.org. 60,000 plug-ins—we don't know when they're updated. It's kind of like downloading the entire Apple store, if you have an iPhone, and trying to mirror that. And because we don't know when an app or a plug-in is updated, we have to re-download everything again. And, they intentionally throttle or rate limit the rate that you can download these things. This is an extremely complicated solution to maintain. It's not built for the long term. It's just a temporary fix that we had to put in place to satisfy our customers, because all of our customers would have left, probably.

Mack: Now we have a workaround, and it's explained more fully in the Prabhakar reply declaration, Docket 47, at paragraph 8, why that workaround is just insufficient. In addition, their mirror can't pull everything, even though opposing counsel said some of the plug-in data is available. Manually, yes, you can go and download one by one. We have hundreds of thousands of hosted sites with, on average, one dozen to two dozen plug-ins each. It is impossible to download one by one in the manner that they're discussing. A completely impractical solution. Technically, it's possible. I think Mr. Prabhakar, in his reply declaration, says technically you can walk from L.A. to San Francisco, but it's not practical at all. There's other limitations with the mirror. They're all spelled out in Mr. Prabhakar's reply declaration.

Mack: Some data is not available. The only data that is available is the actual code for the plug-ins and the core code for WordPress. The user reviews, the user ratings, the number of downloads, all the other types of information that build trust and the reputation of the plug-in. You probably wouldn't just go and download an iPhone app that only one person has downloaded and has really bad reviews. That information, there's no easy way to pull from WordPress.org.

Mack: If you look at one of our demonstratives, we have two demonstratives that are more technical in nature. I don't want to get into the weeds, Your Honor, if you're not a technical person. If you look at demonstrative slide number 12, if we could put that up on the screen, I think this highlights pretty clearly.

Judge: I know that you're calling this technical, but I will tell you, I looked at this yesterday, and let me let you explain it to me.

Mack: Okay. Let me actually look at the... So on the left, you have all the resources that WordPress.org offers. The core code and the plug-in directory, these are the two code repositories, and they are true, but that is not technically blocked. We can manually go and download one by one, which is completely impractical for the hundreds of thousands of hosted customers we have with one to two dozen plug-ins each. The api.wordpress.org, that is our servers communicating with WordPress.org servers. That's that hard-coded functionality that I'm talking about. It's built into the software. It's an integral part of the software. There's no option to go to file settings and change that. You have to go to api.wordpress.org.

Mack: What we ended up doing was building a mirror, and we actually did actually go into our hosted customers, and we had to change some of those instances to point to our mirror location. But, like I said, the mirror is a temporary and partial fix.

Judge: Mr. Mack, let me ask you, and tell me if this is not a question best directed to you, but why isn't an injunction restoring access to the open-source WordPress software and plug-ins on the WordPress website as suggested by defendants enough?

Mack: That's basically what I explained before. The access that they're talking about is the manual one-by-one access. We would lose the api.wordpress.org access, which is the servers communicating with the servers. The admin panel automatically calls back to the server to update the plug-ins, and they get notifications coming back. Users wouldn't even know when there's an update available. You wouldn't know on your iPhone if it didn't tell you there was an update, and you probably have it set to automatically update all of your applications. You would have no way of even knowing that an update was available. So this API is critically important for the basic functioning of any WordPress installation, the api.wordpress.org.

Mack: The password-protected resources, everything goes through login.wordpress.org. That's the login credentials that were revoked by defendants to the WPE employees. Those are also critically important because that's how, if you're posting a new plug-in or a new application, you would post it to the Apple store, right? If you post it somewhere else, no one's going to know it's available. No one's going to trust the reliability of that plug-in or software. Defendants themselves explained that all official releases of WordPress software have to come from wordpress.org. They are dissuading people from downloading software from any other service or website or server other than wordpress.org. So we're losing all of this functionality at the bottom, which is this plug-in submissions, which is supporting our plug-ins. If you had a question, you needed to post a question on a support forum and get a detailed answer from someone that actually developed the plug-in. You would go to this location. There's bug tracking that we would lose.

Mack: And all of these things, there's been a big community built up over 15 years. Everyone goes to wordpress.org, and that was by design and by intent. So by selectively banning just Plaintiff from those resources, the only way that we would be made whole is by getting access back to all of these other resources.

Judge: And again, you tell me if you want to hand the mic over to someone else. But, let me say this: Having reviewed everything, I am inclined to grant some sort of injunction. Here's the problem that I have with your proposed injunction, though: this is a nonstarter because it is exceedingly vague. So to the extent that you all, to the extent that I conclude that you are likely to succeed on the merits of any of your claims, this isn't particularly narrowly tailored. It's really broad, and in the grand scheme, I couldn't enforce this if you tried to seek enforcement of it. This isn't specific enough for me to do it.

Judge: So here's my question to both sides. Is there any interest in you all trying to narrow this together, or do you just want to see what I produce? Understanding that, Mr. Mack, I'm assuming on the defense side as well, you all have much better technical access.

[Internet issue]

Mack: It opens up a huge security vulnerability for all of our clients. This is something new that happened after our reply briefing. And just last weekend, there was another finding that they kind of co-opted and commandeered the pro features of our plugin, the paid features, and they're releasing those on WordPress.org under a new URL, the secure custom fields URL. So they're trying to give away all of our pro features that people have paid for, for everyone, to the entire WordPress community for free. Every weekend, there seems to be something new that Defendants do to further escalate the conflict. So that's why I think we need not only to be restored to the status quo ante, but we need kind of ongoing protection from anything new that comes up.

Judge: The problem with the PI is that you get status quo ante. So…

Kassabian: Your Honor, in addition to what Mr. Mack has just explained, I would love to just say a few things. Absolutely. We would be happy to revise and narrow our proposed order and send it to defendants and meet and confer with them to try to come up with an agreed set of language that both meets the structures of Rule 65 and satisfies Your Honor. We, of course, want it to be enforceable and clear within its four corners.

Kassabian: Mr. Mack, though, is also correct that every few days a new harm is inflicted upon us. And so we just may have to take that up as it comes and reach back out to Your Honor. But I will also note that, of course, it is perfectly fine for an injunction order to say things like don't take steps to cause confusion in the marketplace. You know, there are certainly while the order needs to be narrow enough to be understandable, it can also have terms such as, you know, cease your extortion retaliation efforts that I think should be enforceable. But nevertheless, Your Honor, we hear you loud and clear and we will just update it.

Judge: All right. So, counsel, let me ask you. Well, we haven't heard from you, Ms. Shaw.

Shaw: Thank you, Your Honor. I'd like to make two points. The first is that we agree that the injunction and the injunctive relief as drafted is is frankly difficult to understand what's even being requested, especially the fourth relief, which is to enjoin all extortion and tortious interference. I'm not sure what that means. And I think that highlights a concern here that we as defendants have. There is a line between an unlawful act and healthy competition, and plaintiffs have seemed to be taking the position that anything that results in the migration of customers away from them is somehow an unlawful act, which is simply not the case in this instance.

Shaw: And so, you know, we are happy to meet and confer and try to reach some resolution. But I hope this court can appreciate the importance of any resolution respecting that line between healthy competition and unlawful activity.

Judge: I have a five week antitrust trial in the new year. So that was the pretrial conference yesterday. I've already started well down the path of anti-competitive, of cognizing and thinking about anti-competitive conduct. We want competitive. I get that. We want competition.

Shaw: And if I could just make a second… And if you could pull up slide 12 that you were looking at previously. Is it up on the screen? Thank you.

Shaw: So you'll see in the right hand column, they put X's through everything they claim they don't have. And I do think it's worth going through this because I think the technical issues are important to Your Honor’s consideration of what the appropriate injunctive relief is in this case. So this API WordPress.org, that is their mirror. They have essentially created a mirror of that, that they have an X through. This login to WordPress.org, the reason they would have an X through that is because they no longer have the ability to upload and have .org distribute and disseminate and provide a place where they can update their plugins. The X through community based forums. They can still access and see those forums, they simply cannot post in those forums. The plugin submissions. They can no longer submit plugin submissions. That's kind of the same as the login.wordpress argument that they're making. It is true that they can no longer participate in the WordPress Slack channel because I think that requires user authentication. But it would be an unusual result if the inability to participate in an online Slack forum would rise to the level of irreparable harm a court looks for when granting a preliminary injunction. And finally, the SVN code contribution. That really is not allowing them to contribute to the development of the code on WordPress.org. That's really taking away from their ability to contribute. It's not taking away from them a right to access something. And then finally, they have an X through the track WordPress.org bug tickets and tracking data. They can still see that. What they can't do is submit bugs and information about their work and get feedback from .org on how to fix it.

Shaw: And I think what Mr. Mack's presentation shows is they do have a way to solve this. They just don't want to pay for it or spend the time and money to do that. And instead, they want to rely, be able to rely on .org to do that.

Judge: Go ahead.

Kassabian: Your Honor, I'll just point out that defendants did not take any issue with our proposed order. Obviously, they did not file objections. They did not file their own competing proposed order.

Judge: I do, though.

Kassabian: I understand. So, I'm just hearing this for the first time. But in any event, it won't be hard, Your Honor, to list out the specific wrongdoing that we are talking about here. And the specific items that should be restored to status quo ante, we'd be happy to work with them to list that out. And then if Your Honor, if we are unsuccessful in reaching final agreement, we will submit competing proposed orders with perhaps, if Your Honor would hear us, maybe a five page brief explaining the proposed orders, if you need it. If not, we'll just submit the competing proposed orders.

Shaw: Your Honor, I think before suggesting what kind of briefing that would be submitted to the court, taking up its valuable time, I think it might be worthwhile for the parties to meet and confer in the first instance. And then we can advise the court of the best way forward.

Judge: Why don't we do this? Meet and confer, meet and confer. And if it ends up being you can reach agreement, you will get me that. If you cannot reach agreement, give me dueling submissions. I'll take the dueling submissions. And in short order, I will let you know if I want something further.

Kassabian: That works, Your Honor.

Judge: It will probably, your five pages is in the right ballpark, is in the right ballpark. And, because we are lawyers, I need a timeline attached to this. So, what say you all?

Kassabian: Your Honor, we can work on this today and tomorrow and submit something to you tomorrow. That's our position, Your Honor. This is an emergency matter for my client. We will move with all due haste and submit something to you before the Thanksgiving break. So tomorrow evening would be our request.

Shaw: Your Honor, the only thing I would say is that I think in order to fashion this order, this proposed order, and frankly, even have this meet and confer, we do need input from technical team members. I don't think this is something that just the lawyers can decide. I think there may be even some agreements that the lawyers would decide that may just not be technologically possible. And, given the Thanksgiving holidays, I would ask for a short reprieve until Tuesday of next week to get something to you.

Judge: Can we try this? Here's what I'm trying to account for that… somewhere in here is the… I'm trying to think about having you having asking, asking plaintiffs to try and make this more specific. Get that to you. Counter proposal. He'll bring in the tech folks. Is that Friday? This Friday, that feels crueler than next Tuesday. I don't know why that feels worse, but I mean, I'll tell you, I think the courthouse is closed on Friday.

Judge: Are we closed on Friday?

Court: Skeleton crew day.

Kassabian: It is technically not a federal court holiday, but I'm sure it is a skeleton crew. But we Friday works better than Monday for us, Your Honor. This is a very urgent matter in our view. Both sides have ample technical personnel who can assist.

Shaw: I don't think it's the matter of the ample personnel. It's their availability.

Judge: And I think that's right. Why don't we try for Monday? And get your draft going. Send it over. And so what we're doing is you get something done by tomorrow. You get input. And if you wherever you are at that point, hopefully maybe take some time to talk on Monday. You can submit it late Monday or if you are far enough apart, just send to me Monday. OK, the dueling proposals, if you look at theirs and say no, then just get me yours on Monday as well.

Shaw: Thank you.

Judge: And we'll sort of and we'll proceed from there.

Kassabian: That is fine, Your Honor. And I would just hope and ask that no further acts of wrongdoing occur between now and Monday so that the parties can have this time to put their proposed orders together. Otherwise, our proposed order list is going to grow longer. That would be my sincere hope that both sides, in particular, defendants will honor the court's ruling from the bench and allow the lawyers to sort this out by Monday.

Shaw: And Your Honor, I think I've addressed that point. I think there's a fundamental difference between the parties as to what is competition and what is unlawful conduct.

Judge: I get that. So let me ask you, Ms. Shaw, because I think in part what I hear in part what I'm hearing from plaintiffs counsel is a request that between now and Monday you get… We essentially… I think I'm sure this is not exactly what you're saying, Ms. Kassabian, but it's but it seems to it strikes me at this moment as the best thing, which is given the holiday weekend and given that that's why we're extending this, presumably the idea is that as of today, its status quo as of today until at least Monday, so that even so the competition holds off until at least Monday until we figure out how what status quo to what that looks like come.

Judge: Is that still November, December? That's December already. December 2nd. So I think the idea is do you try and maintain status quo from now until Monday?

Shaw: Understood, Your Honor.

Kassabian: That's right. Thank you, Your Honor. We certainly wouldn't want the extension to be taken advantage of in any way.

Judge: Understood. All right. Counsel, I thank you. I'm sorry you watched the last one. But I appreciate you sharing with me in the in my laws, these are adversarial proceedings and understanding why it's a weird phrase to be frustrated by.

Judge: One final housekeeping matter. So and I've now lost my notes, but it's this. I did note that and I believe that it was also flagged again by defense counsel, which is that the complaint was late. So I just want to… it was filed three hours late.

Kassabian: The amended complaint?

Judge: The amended complaint was filed three hours late. So here's the part I just want to make sure that that you understand: I tend to be a stickler for the rules, so that's your freebie this time. Things filed late, things that don't comport with the rules. I won't accept them. And you'll start to see things stricken from the record.

Kassabian: Your Honor, may I just really quick. The deadline for the amended complaint was actually November 20th. It's three weeks. The deadline to oppose the motion to dismiss and the motion to strike was November 13th. But since we opted to amend rather than respond substantively with an opposition brief, that created two separate deadlines. And I can, there is a Ninth Circuit case we checked, Your Honor, confirming that that is timely because the filing of the amended complaint moots the motions and the amended complaint. We had 21 days under Rule 15 to amend as of right. So I can get you that citation.

Judge: Could you?

Kassabian: Maybe one of my team members can grab it for us before we walk out of here. But, Your Honor, we did, you know, as a conservative matter, we wanted to file it that same day, but we did technically have an extra week.

Judge: No one needs to rush to get it now. But if you could, with whatever comes up, put it as a footnote to your. No, no, don't put it as a footnote to the proposed order. That just makes a mess on the docket.

Kassabian: We can hand it up on a Post-it if Your Honor would like.

Shaw: I do appreciate you raising this issue about the rules. And I would like to flag something just because I think it's important for both parties to be treated the same. We know in your order, you do not allow footnotes in your briefing. We have taken steps to avoid that.

Judge: I have that note as well. Well, you'll see there's language there about… Footnotes are allowed. They're just not allowed to be used to try and get or to put in extra argument to try and get around the page limits. And, as a matter of course, that results in usually I don't I just don't address arguments and footnotes if they get over long. It's like, you didn't put it in the body and you're at your full length.

Shaw: And I would also note that their P.I. reply was late as well.

Kassabian: I don't. That is not correct, Your Honor. We have a timestamp.

Judge: No, no, no, no, no.

Kassabian: OK. And I have the citation for you, Your Honor.

Judge: Please, that I could use because. I don’t, if you're right and I'm wrong, I'd rather get this.

Kassabian: It's a fun little quirky rule that I hadn't ever stumbled across this particular case. But it's someone has thought of this and made this argument. And the Ninth Circuit has said it's not untimely. It's Ramirez v. Cnty. of San Bernardino, 806 F.3d 1002, 1008 (9th Cir. 2015). And it's this exact same situation where the opposition was due in two weeks. Rule 15 gives the plaintiff three weeks to amend as of right. And the party filed in between the second week and the third week and the Ninth Circuit said that's just fine.

Judge: You have to love the rules. Thank you, counsel.

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1. This was in reference to the prior hearing, where the judge had to explain to a pro se plaintiff that legal actions are adversarial. ↩︎