1 1 2 3 4 5 SOUTH CAROLINA, 6 Plaintiff, 7 vs. No. 138 8 NORTH CAROLINA, 9 Defendant. 10 11 12 ________________________________________________________ 13 14 TELEPHONIC CONFERENCE 15 BEFORE SPECIAL MASTER KRISTIN MYLES 16 Friday, August 22, 2008 17 18 19 20 21 Reported by: DANA M. FREED 22 CSR No. 10602 23 JOB No. 89253 24 25 2 1 2 3 4 5 SOUTH CAROLINA, 6 Plaintiff, 7 vs. No. 138 8 NORTH CAROLINA, 9 Defendants. 10 __________________________________________________________ 11 12 13 14 Telephonic Conference before Special 15 Master Kristin Myles, beginning at 9:59 a.m. and 16 ending at 11:20 a.m. on Friday, August 22, 2008, 17 before DANA M. FREED, Certified Shorthand Reporter 18 No. 10602. 19 20 21 22 23 24 25 3 1 APPEARANCES: 2 3 MUNGER, TOLLES & OLSON LLP KRISTIN LINSLEY MYLES, SPECIAL MASTER 4 560 Mission Street, Twenty-Seventh Floor San Francisco, California 94105-2907 5 415.512.4000 6 For SOUTH CAROLINA: 7 ASSISTANT DEPUTY ATTORNEY GENERAL 8 BY: ROBERT D. COOK L. CHILDS CANTEY 9 PARKIN HUNTER Post Office Box 11549 10 1000 Assembly Street, Room 519 Columbia, South Carolina 29211-1549 11 803.734.3736 agrcook@ag.state.sc.us 12 KELLOGG, HUBER, HANSEN, TODD, EVANS & FIGEL, P.L.L.C. 13 BY: DAVID C. FREDERICK SCOTT ATTAWAY 14 Attorneys at Law 1615 M Street, N.W., Suite 400 15 Washington, D.C. 20036 202.326.7900 16 dfrederick@khhte.com 17 For NORTH CAROLINA: 18 NORTH CAROLINA DEPARTMENT OF JUSTICE 19 BY: CHRISTOPHER G. BROWNING JAMES C. GULICK 20 Attorney at Law 114 West Edenton Street 21 Raleigh, North Carolina 27603 919.716.6900 22 cbrowning@ncdoj.gov 23 24 25 4 1 APPEARANCES: (Continued) 2 3 For PROPOSED INTERVENOR DUKE ENERGY CAROLINAS, LLC: 4 SIDLEY AUSTIN LLP BY: CARTER G. PHILLIPS 5 VIRGINIA A. SEITZ Attorneys at Law 6 1501 K Street, N.W. Washington, D.C. 20005 7 202.736.8270 cphillips@sidley.com 8 9 For PROPOSED INTERVENOR CATAWBA RIVER WATER SUPPLY PROJECT: 10 DRISCOLL SHEEDY, P.A. 11 BY: JIM SHEEDY SUSAN DRISCOLL 12 Attorneys at Law 11520 North Community House Road 13 Building 2, Suite 200 Charlotte, North Carolina 28277 14 jimsheedy@driscollsheedy.com 15 AKIN GUMP STRAUSS HAUER & FELD LLP BY: THOMAS C. GOLDSTEIN 16 Attorney at Law Robert S. Strauss Building 17 1333 New Hampshire Avenue, N.W. Washington, DC 20036 18 tgoldstein@akingump.com 19 20 21 22 23 24 25 5 1 For the CITY OF CHARLOTTE: 2 HOGAN & HARTSON LLP BY: JAMES T. BANKS 3 Attorney at Law 555 Thirteenth Street, N.W. 4 Washington, D.C. 20004 202.637.5600 5 HOGAN & HARTSON LLP 6 BY: PARKER D. THOMSON Attorney at Law 7 1111 Brickell Avenue, Suite 1900 Miami, Florida 33131 8 305.459.6613 9 CHARLOTTE-MECKLENBURG UTILITIES BY: H. MICHAEL BOYD 10 Attorney at Law 5100 Brookshire Boulevard 11 Charlotte, NC 28216 704.391.5110 12 13 14 15 16 17 18 19 20 21 22 23 24 25 6 1 Friday, August 22, 2008 2 9:59 a.m. - 11:20 a.m. 3 4 MR. FREDERICK: David Frederick for 5 South Carolina. Scott Attaway is here in my office. 6 MR. COOK: Bob Cook and Parkin Hunter and 7 Childs Cantey for South Carolina also. 8 MR. GULICK: Jim Gulick for North Carolina. 9 MR. PHILLIPS: Carter Phillips with Duke 10 Energy. 11 MS. SEITZ: Virginia Seitz, Duke Energy. 12 MR. BANKS: This is Jim Banks for the City of 13 Charlotte. We have on the phone Parker Thompson also 14 for Charlotte. And Mr. Mike Boyd of the Charlotte 15 City Attorney's office will join us in a moment. 16 MR. GOLDSTEIN: Tom Goldstein for CRWSP. 17 MR. SHEEDY: Jim Sheedy and Susan Driscoll 18 for CRWSP. 19 SPECIAL MASTER MYLES: So I think that's 20 everyone. The only ones we're having trouble hearing 21 are Mr. Phillips and Mr. Goldstein. I couldn't hear 22 you, Mr. Goldstein, at all. I don't know if the 23 court reporter could, but.... 24 MR. GOLDSTEIN: Can I just try it again? Is 25 that better? 7 1 SPECIAL MASTER MYLES: A little bit, yeah. 2 Why don't we proceed ahead and see how the acoustics 3 work out? 4 MR. BOYD: Mike Boyd. 5 SPECIAL MASTER MYLES: I couldn't hear at 6 all. 7 MR. BOYD: Mike Boyd. 8 SPECIAL MASTER MYLES: Okay. Why don't we 9 proceed ahead? I don't think we have many issues for 10 today. And if the acoustics are bad, it may be the 11 conference call is a bad connection and we can hang up 12 and start over. But why don't we see how it goes? It 13 seems like a few participants can't be heard very 14 well. But we can see how it goes. 15 I don't know if there's a preferred order of 16 issues. It seems as though we have three issues: the 17 status of the case management order, a proposal that's 18 going to be made for attorney/client privileged 19 materials which I gather is to be made during this 20 call. And the issue of the interim report. Are there 21 any other issues? 22 MR. FREDERICK: Special Master Myles, this is 23 David Frederick. We have met and conferred with 24 North Carolina about obtaining your approval for 25 issuance of third-party subpoenas. 8 1 SPECIAL MASTER MYLES: Oh, yeah, right. Yes, 2 right. So that's really a fourth issue. It comes 3 under the first issue of the status of the case 4 management order, but it's kind of a separate issue. 5 MR. FREDERICK: We thought that it could be 6 addressed separately, if necessary. 7 SPECIAL MASTER MYLES: How do you want to 8 start? Do you want to go first, Mr. Frederick? 9 MR. FREDERICK: Certainly. With respect to 10 the third-party subpoenas, I think, and Mr. Browning 11 can correct me if I'm wrong, I think both states think 12 that it would be helpful and expedite the efficiency 13 if you would bless our sending third-party subpoenas 14 to appropriate persons and just to provide, you know, 15 blanket authority for the States to do that. 16 The case management order does provide for 17 that. The issue is it may defer issuance of the case 18 management order. I think both States think that it 19 would be prudent to go ahead and proceed with 20 permission to issue third-party subpoenas. And that 21 those be issued by state's attorneys general's office 22 with whatever rights the third-party subpoena 23 recipient has to come to you to object to scope or 24 breadth or what have you. 25 SPECIAL MASTER MYLES: Okay. Let me ask you 9 1 a question, just because you have been involved in 2 more of these cases than I have. The order appointing 3 me gives me the authority to issue subpoenas, which, 4 read literally, would require me to issue them. In 5 other words, like a court, like it used to be done 6 where it had to be issued by the Court. 7 Nowadays, the more modern practice is for the 8 parties to have authority to issue them themselves 9 under a general blanket authority from the Court or by 10 statute. Usually it's by statute, I think. Is that 11 -- how has it been done in other cases, other original 12 cases? 13 MR. FREDERICK: This is David Frederick. 14 Our research on this is that the case 15 management order typically delegates to the States 16 power to issue the subpoenas. And that the parties 17 come to the Special Master to seek appropriate relief. 18 SPECIAL MASTER MYLES: And that's what was 19 done in the ones that had been -- I mean, our case 20 management order obviously hasn't been issued yet as 21 an order. But that's what was done from the ones in 22 which that was taken? 23 MR. FREDERICK: That's correct. And the 24 purpose behind it, as I understood it, was that the 25 state, represented by their attorneys general, could 10 1 be expected to exercise appropriate prudence and 2 caution in issuing them. And not take the time with 3 the Special Master's office to get each subpoena 4 blessed. 5 SPECIAL MASTER MYLES: I think that's why the 6 process has changed anyway. The issue is more or less 7 an administerial act anyway. So that's why I think 8 most state changes their rules to allow it, the 9 federal rules were changed I think as well, to allow 10 it to be done by the parties. 11 I'm fine with that. I think probably, for 12 housekeeping purposes, I ought to issue an order 13 authorizing that independently of the case management 14 order, so that it's official that that's going to be 15 the practice. Unless anybody has an objection to it 16 or wants to discuss it further. 17 I think what I should do is issue a case 18 management order stating what is now in the draft case 19 management order, so that it's -- so that it's 20 authorized in advance. Does anybody have an objection 21 to that? Okay. Well, that's what we'll do then. 22 Now, there was a proposal also for dealing 23 with attorney/client privileged materials; is that 24 correct? I thought I saw that somewhere. 25 MR. BROWNING: Your Honor, this is Chris 11 1 Browning. And David Frederick, I'm sure, will correct 2 me if I'm mistaken on this. We had suggested to 3 South Carolina that we work out some proposal 4 concerning inadvertent disclosure of attorney/client 5 communications. I know our office was working on a, 6 some potential language. 7 Unfortunately, Ms. Hauser has a conflict 8 today for the conference call and I cannot recall the 9 exact status of that. Unless Mr. Frederick feels 10 otherwise, I think we can probably defer that until 11 the next conference call. 12 SPECIAL MASTER MYLES: Yeah, that's fine. It 13 was just in North Carolina's report. So that's fine, 14 if Mr. Frederick is okay with deferring that issue. 15 MR. FREDERICK: We have no objection to that. 16 SPECIAL MASTER MYLES: Okay. Then what's the 17 next issue? 18 MR. FREDERICK: The next issue we have on 19 ours is the question of the interim report. 20 SPECIAL MASTER MYLES: Yeah. Is that the 21 only other issue? I think the status of the case 22 management order generally -- let me just ask that. 23 What is the status of the case management order more 24 generally? 25 MR. FREDERICK: We just received yesterday 12 1 some suggestions from the intervenors on the case 2 management order. I think most of them do not appear 3 to raise any issues at all, and we've not yet had 4 a chance to have a full conference with our clients. 5 When I spoke to counsel for intervenors yesterday, we 6 agreed that we would get back to them as promptly as 7 we could to give them reactions. I don't think that 8 issue is yet ripe for your consideration. But we -- 9 the parties are meeting and conferring on proposed 10 additional changes to the CMO. 11 SPECIAL MASTER MYLES: Okay. Now, in terms 12 of the interim report, I do intend to issue one. And 13 I'm happy to have a colloquy on that. But my, 14 at least, tentative thinking as of now is to issue an 15 interim report memorializing the ruling on the 16 intervention motions for purposes of the South 17 Carolina's intention to seek review, so I'll get that 18 out as promptly as I can. I don't expect that how it 19 gets -- the format gets presented will differ 20 substantially from the original order, but it will add 21 in the ruling of the motion for reconsideration and 22 clarification. 23 That raises the questions regarding the case 24 management order whether finalization of that should 25 await resolution of the intervention issue. I don't 13 1 think it should. I think we ought to go ahead and 2 finalize the case management order on the assumption 3 that the existing status quo will remain. That is, 4 right now the status is that the intervention motions 5 were granted subject to the Court's review. 6 So my tentative view again would be that 7 that's how the case management order ought to go. And 8 subject to its being changed if the Court -- if 9 the Court agrees with exceptions to the intervention 10 order. Does that make sense? 11 MR. FREDERICK: This is David Frederick for 12 South Carolina. At one level, that is an efficient 13 way to proceed. It does raise certain practical 14 concerns and issues. One is that for non-party 15 status, the intervenors would not be obliged to 16 respond to interrogatories. They have objected to 17 having discovery continue because we have propounded 18 interrogatories to Duke and to Charlotte. And so the 19 question is whether they would be put to the burden of 20 responding to interrogatories before the Court had 21 acted on the recommendation to permit them to have 22 intervenor status. 23 The second is that the intervenors have 24 requested that all documents are produced by 25 South Carolina, none in quadruplicate for all of the 14 1 intervenors as well as North Carolina. So there is 2 also a burden issue in terms of the handling of, 3 you know, multiple service of documents and the like. 4 And whether or not, if the Court were to take a 5 different view on intervention, whether those 6 documents would need to be called back and the like. 7 And so I put these out as practical concerns. 8 We've not yet had a chance to consult with the 9 Attorney General to develop a formal view, but I did 10 want to raise these as concerns that intervenors and 11 the parties might have with respect to proceeding now 12 with entry of the CMO. 13 SPECIAL MASTER MYLES: The alternative is 14 just the point that North Carolina has made about 15 delay. 16 MR. FREDERICK: I'm sorry, I didn't mean to 17 interrupt you. 18 SPECIAL MASTER MYLES: No, no, that is all I 19 was going to say. 20 MR. FREDERICK: Well, I think that with 21 respect to that, South Carolina's position is that 22 full document production by the intervenors does not 23 need to be delayed in any fashion. If they were 24 recipients of subpoenas, they would have to produce 25 documents. So the only issue as a practical matter is 15 1 response to interrogatories. And as we signaled in 2 our reply letter, we have no objection if you were to 3 conclude that they should be permitted to defer 4 answering interrogatories until after the Court acts. 5 But we don't see any reason to delay the production of 6 documents by any of the intervenors. 7 SPECIAL MASTER MYLES: Well, can a provision 8 then -- well, I'd like to hear from the intervenors. 9 But possibly one solution would be to write into the 10 order itself a caveat regarding answers to 11 interrogatories that those -- if the parties are in 12 agreement on this, need not be responded to until 13 final resolution of the intervention issue. That's 14 just one possible solution rather than delaying the 15 entire case management order. 16 So what are the thoughts of the intervenors 17 on that? 18 MR. PHILLIPS: Special Master Myles, this is 19 Carter Phillips. Can you hear me? 20 SPECIAL MASTER MYLES: It is difficult to 21 hear you. 22 MR. PHILLIPS: I only have the one phone. 23 SPECIAL MASTER MYLES: I think if you speak 24 up, that would probably solve it. 25 MR. PHILLIPS: Basically, the concern for 16 1 Duke Energy, and I think it's shared by all the 2 intervenors although they can speak for themselves, is 3 that this kind of mix-and-match arrangement where some 4 of the discovery will go forward and some of the 5 discovery does not go forward impresses me as at least 6 a somewhat difficult situation to confront. 7 For instance, what's going to happen with 8 regard to depositions? Will we participate? Will we 9 have full right to participate in them? We have all 10 of the rights of a party at this point, so we can 11 affirmatively seek discovery from South Carolina as 12 far as our own affirmative efforts. The difficulty is 13 the situation we're going to say some things can go 14 forward, other things don't need to go forward, it 15 seems to me we're going to raise a lot of issues that 16 are going to be relatively complicated. It would be, 17 in my mind, easier either to stop everything or 18 propose everything go forward. 19 SPECIAL MASTER MYLES: That makes sense. 20 What would Duke propose doing between those two 21 options? 22 MR. PHILLIPS: I think my preference would be 23 to stop at this point. And move as quickly as we can 24 once it's decided whether or not the Supreme Court 25 want to review the interim report. Hopefully, that's 17 1 not going to be an extended delay. But that it would 2 ease the burden on all of us, because if the Court 3 does in fact want to hear that, obviously all of our 4 (inaudible) is going to be devoted -- 5 DEPOSITION OFFICER: Obviously what? 6 SPECIAL MASTER MYLES: I think the 7 court reporter couldn't hear the last thing you said. 8 MR. PHILLIPS: I have to go back and remember 9 myself. The point I was trying to make is that all of 10 our resources will have to be devoted to briefing 11 these issues again. 12 DEPOSITION OFFICER: You're breaking up. I 13 am not hearing you very well. 14 SPECIAL MASTER MYLES: Maybe what would make 15 sense is if you can hang up and call in again. I 16 don't know if it makes a difference, but it may. 17 MR. PHILLIPS: All right. Let me try that. 18 SPECIAL MASTER MYLES: Otherwise, maybe 19 someone can patch you in. I don't know if that would 20 make a difference. 21 MR. PHILLIPS: Okay. Hold on. Let me try 22 that. 23 MR. GOLDSTEIN: Special Master Myles, can you 24 hear me? This is Tom Goldstein. 25 SPECIAL MASTER MYLES: Why don't you wait 18 1 until Mr. Phillips is back on the line? I think he 2 hung up. 3 Mr. Goldstein, it's hard to hear you as well. 4 I don't know if it's our phone connection or what. 5 MR. GOLDSTEIN: I'll do the same thing. I'll 6 dial back in. 7 SPECIAL MASTER MYLES: Okay. Is Mr. Phillips 8 back on? 9 Ms. Seitz, are you there? 10 MS. SEITZ: I am. 11 SPECIAL MASTER MYLES: Would it make sense to 12 try to conference him in? I don't know where he went. 13 MS. SEITZ: My guess is that he's probably 14 having trouble locating the number again. 15 SPECIAL MASTER MYLES: Okay. 16 MS. SEITZ: I will replace him, if he does 17 not come back shortly. 18 SPECIAL MASTER MYLES: I'm sure you'll do a 19 fine job. 20 I guess we're all back now. 21 I guess the only solution at the moment I can 22 think of is for both Mr. Goldstein and Mr. Phillips to 23 speak up as much as they can. 24 MR. PHILLIPS: I think I actually made the 25 point I wanted to make, Your Honor, at this point. 19 1 SPECIAL MASTER MYLES: Which is that it would 2 be preferable to stop third-party discovery -- I mean, 3 not third-party discovery but intervenor discovery 4 pending resolution or hopefully a prompt resolution of 5 the intervention issue. It does seem like from the 6 timetable, that Mr. Frederick provided in his interim, 7 his report on this issue, his letter on this issue, 8 that the Court is pretty prompt about turning these 9 things around. At least from the couple of data 10 points you gave us. 11 MR. FREDERICK: Special Master Myles, this is 12 David Frederick for South Carolina. We don't 13 understand Mr. Phillips or Duke's objection to be on 14 documents and data that would be hydrological data 15 that's critical for us to be putting our case 16 together. And I think it's fair to represent that 17 depositions are really quite some months into the 18 future. And to the extent there became an issue about 19 depositions, I'm certain that working with Duke's 20 counsel, counsel for the other intervenors, that 21 something can be worked out. 22 But we would prefer to see the case 23 proceeding with discovery, even if that meant having 24 to call back certain materials than to have it simply 25 stop in its tracks at this point. And not 20 1 withstanding Duke's representation about its lack of 2 resources simultaneously to do a brief on intervention 3 so the justices can do discovery, we're in a position 4 where we're having, you know, essentially four against 5 one and we're prepared to do both on simultaneous 6 tracks. And I would hope that, that we could be 7 permitted to proceed on that basis. 8 SPECIAL MASTER MYLES: Well, why don't I hear 9 from Mr. Goldstein who I think wanted to comment. And 10 then we can circle back on that point. 11 MR. GOLDSTEIN: Thank you. And let me know, 12 please, if I need to speak up still further. 13 SPECIAL MASTER MYLES: I can hear you fine 14 now. 15 MR. GOLDSTEIN: Oh, fantastic. 16 Well, I think that if it's the case that you 17 could continue with those documents that 18 South Carolina could otherwise get by subpoena from 19 the intervenors, but that is one piece of the puzzle 20 and it leaves open the question of a lot of other 21 discovery including the points Mr. Phillips mentioned 22 of what about the intervenors taking the discovery 23 that they need from South Carolina to defend South 24 Carolina's attempt to undo, through the Special 25 Master's decree, their allocations of water. So that 21 1 there are, of course, two sides to the case and 2 discovery is supposed to be proceeding simultaneously. 3 The upshot of that is that there really is 4 very little benefit to proceeding with one piece of 5 the discovery, so that what we would be doing is 6 talking about the direct document discovery between 7 South Carolina and North Carolina. And those 8 materials that South Carolina believes it inevitably 9 could be getting through subpoena. So not 10 interrogatories, not requests for admissions, and no 11 discovery by the intervenors. 12 And the reason that that's consequential is 13 that inevitably the rest of the case gets backed up 14 anyway by South Carolina's request to take this to 15 the Court. The -- the -- for example, paragraph 5 of 16 the case management plan says that, to the extent 17 possible, written discovery and the exchange of 18 documents should be completed before deposition 19 discovery begins. 20 So everybody, the intervenors' discovery is 21 going to have to come back into the case and be 22 completed before the depositions can be taken. So 23 it's not just that there is the gap in time before 24 depositions are going to get started that 25 Mr. Frederick referenced, but the fact that we're 22 1 going to have to wait for the intervenors to be able 2 to prepare their case as well. 3 And then paragraph 5.7 explains that within, 4 and it's blank, within blank days after the close of 5 fact discovery, South Carolina shall serve any expert 6 reports required by Rule 26(a)2(b). So that we know 7 that because there's going to be, as a result of South 8 Carolina's request, a delay in, you know, some fair 9 piece of the discovery at the very least, then expert 10 reports are going to be delayed as well. 11 And so there is an inevitable consequences to 12 the matter going up in front of the justices. 13 You know, the justices are, of course, away right now. 14 And it will be -- it's an open question so there are 15 conflicting examples given by the parties of how quick 16 the Court can act on it. But we are talking about 17 certainly several months before we would hear back 18 from the justices. 19 And the real question is -- the judgment call 20 is, is there a benefit to proceeding forward on some 21 part of it while there is this -- if the discovery 22 from the intervenors is going to be delayed. The 23 alternative is to do what would happen in an ordinary 24 interlocutory appeal in District Court. And that is 25 that the parties and the intervenors go forward. If 23 1 this were a District Court situation and where -- 2 while the usual rule is that intervention has to wait 3 for the end of the case, if this were to go to a Court 4 of Appeal, there wouldn't, absent some extraordinary 5 circumstance, be a stay of the underlying proceeding 6 and everything could just go forward. 7 But the premise of this conversation seems to 8 be that some part of the discovery is going to stop. 9 And my point is that that's going to back up -- if it 10 involves the discovery by the intervenors, that's 11 going to back up a lot of the case inevitably. 12 MR. BANKS: This is Jim Banks for Charlotte. 13 I wonder if I might make a couple of quick points. 14 SPECIAL MASTER MYLES: Yes, of course. 15 MR. BANKS: Can you hear me all right? 16 SPECIAL MASTER MYLES: I can hear you fine. 17 MR. BANKS: I think there are a couple of 18 practical problems with this course of action for 19 Charlotte that I'd just like to put out there. First 20 is that Charlotte -- 21 SPECIAL MASTER MYLES: Which course of 22 action, if you don't mind my interrupting? Because we 23 have sort of like two courses of action that are on 24 the table. 25 MR. BANKS: Well, sending an interim report 24 1 for review by the Court, and proceeding with the case 2 during the interim, is problematic for Charlotte. 3 Because Charlotte desires and intends to coordinate 4 with North Carolina on technical analysis and expert 5 analysis and gathering of field data, if necessary. 6 And Charlotte, in order to do that, has to go to the 7 city council and get appropriations for very 8 considerable expenditures. 9 And during this interim period, when it's 10 unclear whether Charlotte will be permitted to 11 participate as a party, that puts Charlotte in a 12 particularly difficult position for making such 13 decisions to make large expenditures such as that. So 14 that's one sort of problem that Charlotte has. And I 15 think Catawba probably has a similar issue. 16 The second for Charlotte is that if we are to 17 brief the intervention question to the Court, a 18 significant part of that issue for us is the scope of 19 this case. If this case is about interbasin transfers 20 and Charlotte's interest in its IBT certificate is 21 subject to direct attack by South Carolina, then the 22 direct interest that your intervention order found as 23 justification for our intervention is solid and -- and 24 very, very important. 25 If, on the other hand, South Carolina is 25 1 permitted to expand this case and use that expansion 2 as a means to argue that Charlotte should not be 3 permitted to intervene absent some showing of 4 inadequate representation by North Carolina, then 5 that's a different matter. And since we don't yet 6 have your ruling on scope, we will be in an awkward 7 position of briefing that issue and arguing that issue 8 to the Court as it bears on the interventions. 9 So those are two sort of practical problems 10 both with the interim report and with proceeding 11 during the Justice's review of the intervention order. 12 SPECIAL MASTER MYLES: Let me ask you this 13 regarding the scope issue. The second point. 14 First of all, I am -- will say the following about the 15 scope issue. I did issue an oral ruling on that, on 16 that issue in a case management conference indicating 17 that I wasn't going to limit the scope on what was 18 presented on the record at that time. Meaning that 19 North Carolina raised issues about the scope. And I 20 did not find in the pleading any basis for limiting 21 the scope in the manner that North Carolina had 22 suggested. 23 So that issue, at least as it was presented 24 by North Carolina in its briefing, I think was 25 resolved. And to be followed by a written ruling 26 1 which I did promise and have not yet issued, so.... 2 And I do intend to. 3 One complication that arises in the context 4 of the scope issue, is -- one reason why I've delayed 5 issuing it, is that absent a motion of some kind, it 6 is difficult to do anything other than issue an 7 advisory opinion on the question of scope. I do think 8 that North Carolina presented a concrete issue as it 9 related to the pleading, whether the pleading itself 10 constrained the issues. 11 And given the breadth of the prayer for 12 relief, which I think I indicated in my prior oral 13 statement on this issue. The prayer for relief is 14 broad enough to cover more than what North Carolina 15 had thought it should. 16 That leaves open, though, questions, as I 17 think I've mentioned numerous times, other means of 18 limiting the scope of this case. We talked at length 19 about doing so through case management-related 20 processes, including discovery. We struggled with how 21 to make that happen. But I will allude to that in the 22 written order that I do issue. But part of the 23 problem is, there's other mechanisms as well that one 24 can use to address issues of scope. For example, 25 motions that are available to -- to hold 27 1 South Carolina to a more definitive set of issues. 2 But absent such a motion, it's difficult for 3 me to define the scope in the abstract just on my own. 4 There needs to be a motion that's -- that's directed 5 more specifically to the issue of scope, which may be 6 a motion that happens in the subsequent stages of 7 litigation. 8 So that's a lengthy way of saying that I do 9 think that the scope issue affects how the intervenors 10 proceed. I do intend to issue a ruling on that 11 hopefully in connection with the issuance of the 12 interim report. And that way if somebody thinks that 13 it's relevant to the issues in the interim report, it 14 will be available. It probably won't be done as an 15 interim report, unless someone asks me to do so. 16 I don't think I would, because I don't think it is an 17 interim report. I think it's -- like I said, it's 18 arguably an advisory opinion. But I think it relates 19 to a very -- it relates to an issue that 20 North Carolina raised and that I'm resolving. I don't 21 think it's an advisory opinion, but it's not -- I 22 don't think it's elevated to the level of an interim 23 report. If someone disagrees with that, they can say 24 so, but.... 25 Let me ask you this. With all that as 28 1 preface, what do you think, how does the issue of 2 scope specifically affect Charlotte's interest on 3 the -- on how to proceed in light of the current 4 status of intervention? I didn't quite follow what 5 your point was. 6 MR. BANKS: Let me try it one more time. 7 This is Jim Banks for Charlotte. 8 In the complaint accepted by the Court, there 9 are a few specific instances of alleged harm. And 10 they are directed very specifically at interbasin 11 transfers, the largest by far of which is held by 12 Charlotte. And in the prayer for relief in that 13 complaint, there is a request for an equitable 14 apportionment which, after all, is a judgment as to 15 what amounts of water each state should equitably be 16 entitled to consume. 17 But then the specific requests for relief is 18 directed to the IBT statue and to denying 19 North Carolina the authority to approve any interbasin 20 transfers that exceed the equitable apportionment. So 21 the relief requested is directly aimed at Charlotte's 22 IBT. 23 On that basis, as we read the intervention 24 order, the Special Master found that Charlotte had the 25 kind of direct stake in this case that would justify 29 1 its participation. Now, if we are briefing that issue 2 to the Supreme Court and South Carolina is, on the 3 basis of your oral ruling, saying oh, no, our request 4 for relief is well beyond what we stated in the 5 complaint. It is to -- it is for a decree that would 6 implement the equitable apportionment by curtailing 7 all manner of consumptive uses in North Carolina above 8 a certain amount. 9 Then they are in a position to argue that we, 10 like any other proposed intervenor, should have to 11 demonstrate that North Carolina cannot represent our 12 interests which are like other water consumers. 13 And so the scope of the case, the scope of 14 the harms alleged and the relief requested, bears 15 directly on the justification for our intervention. 16 And so we will have to be arguing at the court level 17 with South Carolina, and with North Carolina weighing 18 in, about what does the complaint actually mean? And 19 do we have a direct stake or not? 20 SPECIAL MASTER MYLES: Well, isn't it the 21 case, though, that if South Carolina pleads in its 22 complaint that interbasin transfers are improper in 23 this context, and then goes on to plead more broadly 24 that it's entitled to an equitable apportionment? And 25 then it goes on to frame the request for relief by way 30 1 of saying that the interbasin transfer statute 2 shouldn't be used to contravene whatever appropriation 3 order is issued. That is to say there's a request for 4 a general order of appropriation, of apportionment, 5 excuse me, together with the prayer that the IBT 6 statute not be used in contravention of that general 7 order is the way I read the prayer. 8 Isn't it the case that regardless of the 9 breadth of the complaint, Charlotte's interest is 10 implicated here? Because certainly South Carolina is 11 not abandoning that portion of the complaint that 12 challenges the interbasin transfers. I don't think 13 they have indicated that they are. They're just 14 saying we have that plus other issues. 15 MR. BANKS: I think that's correct. And that 16 will certainly be the position we take. But if 17 South Carolina goes the next step and says, this case 18 is about all water consumption in North Carolina and 19 therefore Charlotte is one among many, that will have 20 a bearing on how the justices view the import of the 21 direct stake that's called out through the challenge 22 to the IBTs. 23 SPECIAL MASTER MYLES: That makes sense. 24 Yeah, that makes sense. That's why I do intend to 25 issue something on scope before the case goes there, 31 1 so in case someone needs to refer to it. I don't know 2 that -- again, I don't know that the scope issue will 3 be taken up to the Court. But it may be relevant. I 4 agree it may be relevant to how they approach you. 5 Circling back to the actual question at hand. 6 Sorry. My diversion really. You've raised a couple 7 of points about proceeding forward. Mainly a 8 practical one about how proceeding without certainty 9 as to the intervention creates funding problems. 10 Maybe what we ought to do is go back to Mr. Frederick, 11 see how he responds to these various points made by 12 intervenors' counsel. 13 MR. FREDERICK: Well, let me address the 14 first one that Charlotte raised, which is the 15 coordination with North Carolina. That directly 16 supports our position that North Carolina can 17 adequately represent the interest of all citizens in 18 the state. I don't want to repeat arguments on the 19 intervention motion, but I think Charlotte has just 20 conceded away a substantial part of its justification 21 for intervention. 22 Now, Duke and Catawba River Water Supply take 23 contradictory positions with respect to whether a stay 24 of all discovery should be issued. And our position 25 is that, no, it should not. Subject to the fact that 32 1 we recognize there are different interrogatory 2 response rights. Notably the intervenors don't 3 respond to our suggestion that there be a deferral of 4 any answers to interrogatories. And I don't think 5 that there is sufficient concern about deposition 6 participation that would warrant allowing the case to 7 proceed now. We are in the process of exchanging many 8 thousands of pages of documents. I expect that 9 document discovery will continue for some period of 10 months. And particularly, the issuance of subpoenas 11 will lead to even more documents. 12 So I think that the practical reality is that 13 by the time the justices have acted on the 14 intervention recommendation, most of these concerns 15 will have played out in a way that will not cause any 16 prejudice to the intervenors. 17 And to the extent they can show prejudice, I 18 will represent, on behalf of South Carolina, that we 19 will work out whatever additional adjustments to the 20 scheduling need to be done so that no proper party to 21 the proceeding sustains any prejudice. 22 The last point that I think I'd like to make 23 on this is that requests that Catawba is expressing 24 some concern about are almost certainly subsumed 25 within North Carolina's document requests. And what 33 1 I think the intervenors are going to have to do is 2 sustain a burden of showing that they are going to ask 3 for any documents or discovery from South Carolina 4 that would be unique to them or that would not already 5 be subsumed by North Carolina's request. And given 6 the way that North Carolina has propounded its 7 discovery, I would think that would be a burden they 8 cannot demonstrate. But it would be for them to make 9 that showing. And I don't think they've done that 10 sufficient to justify a showing of any kind of 11 prejudice by allowing document discovery to go 12 forward. 13 MR. PHILLIPS: This is Carter Phillips. 14 I don't know if you can hear me. 15 SPECIAL MASTER MYLES: I can hear you. 16 MR. PHILLIPS: Can I respond to that? One 17 area where we clearly will have affirmative discovery 18 with respect to South Carolina -- 19 DEPOSITION OFFICER: Mr. Phillips, maybe if 20 you could slow down. 21 MR. PHILLIPS: Sure. I apologize. 22 Just to respond to Mr. Frederick's specifics 23 of what it is at least that Duke would be interested 24 in, that North Carolina probably doesn't have as near 25 as much of a concern are -- and prejudice that 34 1 South Carolina seems to identify with respect to that 2 tends to clarify how the litigation should go forward 3 with respect to the DRA, I don't think -- 4 DEPOSITION OFFICER: You're breaking up. 5 I am not getting everything. This is the reporter. 6 I'm not hearing Mr. Phillips. 7 SPECIAL MASTER MYLES: Why don't we try 8 another solution, so we can finish this out? Is it 9 possible, Mr. Phillips, for you to give Ms. Seitz your 10 number and have her patch you in from the call? That 11 might work. Sometimes that sort of thing works. 12 MR. PHILLIPS: Okay. Let me try that. 13 Is this any better? 14 SPECIAL MASTER MYLES: A little bit. 15 MR. PHILLIPS: I apologize. 16 SPECIAL MASTER MYLES: What I heard you to be 17 saying is that the one area where you didn't think 18 North Carolina necessarily would be representing 19 Duke's interest is in affirmative discovery with 20 respect to the CRA. 21 MR. PHILLIPS: That's absolutely right. 22 MR. GOLDSTEIN: Special Master Myles, this is 23 Tom Goldstein. Can I just mention a couple? 24 SPECIAL MASTER MYLES: Of course. 25 MR. GOLDSTEIN: There certainly isn't any 35 1 daylight between CRWSP and Duke on this question. 2 I think all the intervenors have clearly taken the 3 position that we think it's most sensible for 4 discovery to stop. The alternative is for it to go 5 forward. It doesn't seem to make sense to have it 6 proceed where one party, South Carolina and another, 7 North Carolina, are taking discovery but other 8 entities that are parties, because we are intervenors 9 in the case, are not -- that it would be unbalanced 10 like that. And given the inevitably of the play of 11 the case from taking the question up. 12 But Mr. Frederick's point about that he 13 thinks that North Carolina's discovery will cover 14 everything that concerns the intervenors doesn't seem 15 to cut one way or the other. It equally proves that 16 if discovery is going to happen, then the intervenors 17 should take their discovery, because South Carolina 18 doesn't expect there to be any additional documents 19 that it would have to disclose. 20 To the extent that it does, for example, with 21 respect to Catawba, I think that we have a distinct 22 concern and interest in, for example, that 23 South Carolina agencies approved the permitting that 24 is now challenged by South Carolina's own lawsuit. 25 Those issues, I think, are going to help resolve the 36 1 case and determine whether or not the current 2 allocation of water is equitable. 3 But it does seem to us that if Mr. Frederick 4 is right that this can be done quickly, that the sort 5 of nonmutual way of proceeding doesn't advance the 6 ball at all. It creates the financial issue for 7 Charlotte that it has identified. And it would make 8 most sense just to put it on -- put it on pause. If 9 not, then I think we ought to move ahead with the case 10 and develop the facts that are relevant. 11 MR. FREDERICK: Special Master Myles, this is 12 David Frederick. If we're going to do this on the 13 basis of cost, the intervention issue is resulting in 14 enormous additional expenditures of cost for 15 South Carolina to have to deal with the issues raised 16 by the intervenors that are not central to the case in 17 our judgment. And a case in point is the fact that we 18 haven't issued any discovery yet to the Catawba River 19 Water Supply Project. 20 So, you know, there's a little bit of sense 21 of, you know, what is the real objection here to 22 having the case proceed? Both times that Catawba has 23 spoken to this issue on the call, it has raised issues 24 that go to Phase 2 remedy of equitable apportionment 25 and not to Phase 1 liability issues. So to the extent 37 1 that Catawba can show any prejudice at all, it's a 2 prejudice that isn't going to occur for another 3 three years before we get past the liability phase of 4 the case. 5 And our concern, as we've expressed all 6 along, is that the involvement of these intervenors 7 and their parochial interests are in a sense 8 intermural disputes that North Carolina, as 9 a sovereign state, ought to work out once the 10 equitable apportionment is made. And that their 11 parochial interest and dispute shouldn't defer the 12 action by South Carolina to get its fair share of the 13 river water. 14 MR. GOLDSTEIN: This is Tom Goldstein. If 15 I could just -- I wasn't sure what Mr. Frederick's 16 point was about no discovery. He did serve extensive 17 interrogatories on us. So I just didn't quite 18 understand the point. And there's nothing parochial 19 about our interest in the case. The intervention 20 ruling deals with this, and Mr. Frederick is just 21 arguing yet again that the Special Master is wrong in 22 her assessment of our direct interest. The complaint 23 calls out our interbasin transfer which is at the 24 heart of our operation. We think that it's perfectly 25 equitable. One reason that it's perfectly equitable, 38 1 and has nothing to do with remedy, is the fact that 2 South Carolina, through its agencies, approved it, 3 which is very much a Phase 1 question. 4 So, you know, we are right at the heart of 5 this case. And the fact that South Carolina is 6 incurring costs in trying to undo the interbasin 7 transfer authorizations for the Catawba River Water 8 Supply Project is a consequence of its lawsuit. There 9 is nothing more to it than that. 10 SPECIAL MASTER MYLES: Does anyone else have 11 particular comments? I have a couple of questions I'd 12 like to ask, and then what I'll probably do is take 13 this under advisement and try to issue a ruling next 14 week. But are there any more comments for the moment? 15 Okay. Let me just ask a couple of questions. 16 I do think it's a tricky issue, in light of the need 17 to have review. And if there is a reversal of or if 18 the Court disagrees with the intervention then there's 19 the question of, you know, to the extent there needs 20 to be an unscrambling of eggs. 21 So in some sense, the cleanest solution is to 22 hold off on intervenor related discovery entirely 23 until the intervention issue's resolved. I don't 24 think that that means that the party-related discovery 25 would have to be deferred. I think all that would 39 1 happen that would be there would need to be an 2 adjustment made to the schedule, so that the 3 intervenors can have their discovery. 4 But having said that, I think there's a 5 strong interest in having the case go forward. 6 There's been already -- already a lengthy period of 7 time since the case was filed. And it would be 8 unfortunate to have, I think just apart from the 9 party's interest, I think just the Court favors prompt 10 resolution of these cases and moving them along. And 11 I don't like the idea of deferring, for a lengthy 12 period of time now, discovery that may end up 13 happening anyway. So those are the competing 14 interests. 15 And in the meantime, there's sort of more 16 practical ways of parsing it that might be a solution. 17 One would allow documented-related discovery to go 18 both directions with intervenors on the theory that -- 19 on the theory that the subpoena, the third-party 20 subpoena would be appropriate in any event to allow 21 the intervenors to produce documents. It would depend 22 on the theory also that there may be not a lot of 23 discovery that would not be covered by North Carolina. 24 And to the extent that there's overlap, that that can 25 be the subject of objections. Certainly South 40 1 Carolina would be able to object to duplicative 2 discovery -- whatever responses are given. 3 DEPOSITION OFFICER: You were breaking up 4 there. 5 SPECIAL MASTER MYLES: Certainly 6 South Carolina would be entitled to object to 7 duplicative discovery requests. That's all I said, 8 I think. 9 So question number one is whether we could 10 have discovery on documents going in both directions 11 while we're waiting. Question number two is whether 12 intervenors should be required to respond to 13 interrogatories. That puts us full into the 14 assumption that we're going to proceed on the 15 intervenors being parties for the time being until 16 the Court changes that, because there now we're fully 17 into that model, unlike the documents which at least 18 on one side you could equate with third-party 19 practice. 20 So interrogatories then, if we're going to 21 have intervenors responding to interrogatories, it 22 would seem appropriate to say that South Carolina 23 should also be subject to interrogatories and 24 North Carolina coming from the intervenors. So I 25 guess question number two is if -- if there's going to 41 1 be interrogatories going forward, is there any 2 objection to their going in both directions? 3 And then third, as far as deposition 4 discovery, we may just be able to defer that issue on 5 the theory that it's not going to be an issue before 6 the Court resolves the intervention. 7 So those are my questions that, I think if 8 you could just address them briefly, that would be 9 helpful. 10 MR. FREDERICK: This is David Frederick for 11 South Carolina. 12 On question number one, I have no objection 13 to document discovery going in both directions. And 14 we appreciate your direction that if there is 15 duplicative discovery, we can either cross-reference 16 that, which we've already produced or raise 17 appropriate objections as the case may be. 18 With respect to the second question on the 19 interrogatories, one question that we had for the 20 intervenors was whether or not they would be -- they 21 would restrict their number of interrogatories to what 22 is provided in the federal rules. The two states had 23 agreed to limit to 75 the number of interrogatories. 24 It seems to us to add quite an additional burden to 25 require South Carolina to respond to an additional 225 42 1 interrogatories by the intervenors. 2 So we would think that there is additional 3 burden that we should not have to sustain, 4 particularly until the resolution, if there is an 5 agreement by intervenors to limit to, say, 25 6 interrogatories apiece, I think we could -- we could 7 live with that. And we would appreciate some 8 limitation on the scope of the number of 9 interrogatories that the intervenors could place. 10 On the third issue, we agree that the 11 depositions issue can be deferred at this time. And 12 if there should need to become a deposition, say for 13 instance, to understand better how documents are 14 handled or something of the like, we would seek 15 special leave in the event that that would need to 16 occur. 17 SPECIAL MASTER MYLES: Okay. Why don't we 18 hear extensively from North Carolina, and then the 19 intervenors on that, and then we can probably 20 conclude? 21 MR. BROWNING: Your Honor, this is Chris 22 Browning for North Carolina. 23 We are very concerned about creating a hybrid 24 situation where we're not sure what the status of the 25 intervenors would actually be, which I think is the 43 1 natural consequence of South Carolina requesting an 2 interim report. If you recall, at the outset of this, 3 the discussions many months ago about the case 4 management plan, one of the points that North Carolina 5 made was the length of discovery and the nature of 6 discovery will change dramatically depending upon what 7 the Court does with respect to the intervention 8 motions. 9 And it seems like we are now about to be left 10 in limbo where the clock could be ticking on the 11 amount of time that is available to complete discovery 12 that North Carolina needs to do. But one of the 13 crucial parties that's out there, Duke Energy, we're 14 not sure how information can be obtained from Duke by 15 way of interrogatories, what might be available in 16 terms of depositions. 17 And I'll also say with regard to 18 Mr. Frederick's comment with regard to depositions as 19 not starting for some period of months, I just find 20 that a little bit, it appears that South Carolina is 21 changing its position from, that it has taken at the 22 outset of this case, this case can and should be 23 wrapped up in a very short time frame. It appears 24 that South Carolina is starting to recognize that 25 North Carolina was appropriately raising a flag of 44 1 caution at the outset of the discussions about the 2 case management order, that if we rush things too 3 prematurely, it's just going to create a mess for all 4 parties. 5 I think it's important that things proceed in 6 a logical manner. If the Court is inclined to 7 proceeding with discovery in this action while the 8 interim report is in court, North Carolina would 9 certainly advocate that the best approach is simply to 10 treat the intervenors as parties, allow us to go 11 forward. And treat them as if they're in the case 12 because they certainly are at this stage until the 13 Supreme Court rules differently. Allow them to serve 14 interrogatories, to be recipients of interrogatories, 15 allow them to participate in depositions if they are 16 parties. 17 But we think creating a hybrid situation, 18 that might or might not change from month to month, is 19 not necessarily the most efficient way to proceed. 20 MR. GOLDSTEIN: Special Master Myles, this is 21 Tom Goldstein. I don't want to repeat what I said 22 earlier on the call. 23 The one point I would make to Mr. Frederick's 24 point about him being able to object, either object or 25 point to discovery that South Carolina has already 45 1 produced, and I'm sure North Carolina would have the 2 same concern when we take discovery of North Carolina, 3 relating with particularity to our interest in the 4 case. 5 Our concern is that we get the discovery from 6 the parties. And so we would appreciate that the 7 Special Master direct South Carolina and North 8 Carolina, and the other intervenors when they produce 9 discoveries to, you know, stick a copy -- when they 10 send a copy off to the States, that they also send us 11 a copy so that we'll know what's already out there and 12 we won't duplicate it. 13 MR. BROWNING: Your Honor, this is Chris 14 Browning. If I may intervene. 15 With respect to North Carolina, I want to 16 make it clear that as we are producing documents to 17 South Carolina, we are providing duplicate copies to 18 all of the intervenors. South Carolina apparently is 19 not taking that same approach. 20 But Mr. Goldstein, correct me if I'm wrong, 21 but I think you've gotten -- whenever we've been 22 producing materials to South Carolina, we have been 23 providing you with a copy as well. 24 MR. GOLDSTEIN: So far as I know, that's 25 absolutely right. 46 1 SPECIAL MASTER MYLES: Well, it does bear 2 asking whether that's South Carolina's view. Because 3 obviously the idea of, the idea of objecting on the 4 basis of duplication presupposes that the person 5 seeking the information, assuming they're entitled to 6 have it, is getting the initially produced 7 information. Otherwise, the objection isn't very well 8 taken. So is that the case, Mr. Frederick? 9 MR. FREDERICK: Well, the position that we've 10 taken is that documents do not need to be done in 11 quadruplicate. Obviously, if we're subject to 12 document discovery that would entail production of 13 those documents, we would not claim our petition 14 without also providing those documents to the 15 intervenors. 16 But I want to point out that Catawba has 17 taken the position that we've somehow waived our 18 objection to their intervention status by virtue of 19 providing courtesy copies of filings to the 20 intervenors. And so it's Catawba's position that 21 caused us to take the view that if we're going to 22 preserve our objection to their intervenor status, we 23 have to do so in ways that are appropriate. And this 24 is a judgment that we think that preserves our 25 objection to their full-party status. 47 1 MR. GOLDSTEIN: This is Tom Goldstein. If I 2 could just correct two things. Our letter says that 3 by serving us with interrogatory requests, that that 4 is an admission by South Carolina that it accepts us 5 as a party. It has nothing to do with what 6 Mr. Frederick said, which is providing courtesy copies 7 of anything else. People can provide courtesy copies 8 and it's nothing other than a courtesy copy. 9 And the second is when Mr. Frederick said 10 that it's his position that he wouldn't serve us with 11 the responses is a response to that letter, that's not 12 accurate either because they've taken that position 13 before this -- the sentence in the letter that he's 14 referring to. 15 We -- it seems to us fairly straightforward, 16 that if -- under the rules, that if we're a party to 17 the case, then we get the responses to discovery. And 18 I appreciate that he keeps mentioning that it's in 19 quadruplicates, quadruplicates so that he has to make 20 multiple photocopies. And if that's a concern, then 21 we're glad to take one photocopy and make multiple 22 photocopies. 23 But this seems a relatively straightforward 24 point, that we don't want to be asking South Carolina 25 and North Carolina for things that they're already 48 1 producing to other people. We need to know what's 2 going on in the case and what the evidence in the case 3 is, and so just send us a copy of it. There is not 4 more or less to it than that. 5 MR. FREDERICK: Special Master Myles, the 6 interrogatories sent by South Carolina have been to 7 Duke and Charlotte. We have not served Catawba with 8 any document request. But be that as it may, your 9 observation that to have a valid objection to 10 duplication repetition would be done consistent with 11 fair course and dealing, and any documents that would 12 not have already been produced would be documents that 13 we would be prepared to produce. But we think that 14 until the status of the intervenors is finally 15 resolved, South Carolina should not be put to the 16 burden of copies as we've indicated. 17 SPECIAL MASTER MYLES: I'm sorry, a word or 18 two was lost there. You said South Carolina should 19 not be put to the burden of? 20 MR. FREDERICK: Producing so many multiple 21 copies until the party status of the intervenors is 22 finally resolved. 23 MR. GOLDSTEIN: This is Tom Goldstein. If 24 I could just correct one thing? And for the second 25 time Mr. Frederick has twice indicated that they have 49 1 not served us with interrogatories. And that's -- I 2 just want to be clear that that's not right. That 3 South Carolina has served Catawba with 4 interrogatories. It did so on August 5th. 5 SPECIAL MASTER MYLES: Is that correct, 6 Mr. Frederick? Or you were not aware of it? 7 MR. FREDERICK: I will -- if I'm incorrect, 8 I will certainly correct the record. But I was not 9 aware that Catawba had been served with 10 interrogatories. I will stand corrected, if that is 11 so. I was not in the office on that day. And I did 12 not -- I did not think that we served them either 13 interrogatories or document requests. 14 MR. GOLDSTEIN: Okay. I have them in front 15 of me and they have Mr. Frederick's name on them. 16 SPECIAL MASTER MYLES: Okay. Well, we don't 17 need to resolve that now. Obviously, there's a 18 disagreement, but easily resolved off the record, 19 so.... 20 MR. FREDERICK: Suffice it to say that our 21 position with respect to interrogatory answers is the 22 same as it is for the other intervenors as I've 23 already outlined. 24 SPECIAL MASTER MYLES: Okay. Now, is there 25 any other comment on the questions I asked? Certainly 50 1 one solution would be, and I'm not saying this will be 2 the solution but it's one solution, would be to do a 3 hybrid sort of solution where some forms of discovery 4 go forward. 5 Are there any other comments on the three 6 questions I posed? 7 MR. PHILLIPS: Special Master, this is Carter 8 Phillips. I apologize if you can't hear me. 9 SPECIAL MASTER MYLES: Just speak up as loud 10 as you can and go slowly then at least I can hear you. 11 MR. PHILLIPS: Okay. The only thing I wanted 12 to say is, in direct response to what Mr. Frederick 13 just said, is that the one problem with the hybrid 14 approach is the importance of sort of making the 15 burden fair on both sides. And Mr. Frederick now 16 complains that South Carolina has to provide the 17 document discovery materials to all of the parties, 18 and so he doesn't want to assume that burden. On the 19 other hand, he doesn't have any difficulty -- I think 20 it's going to be very difficult to come up with an 21 equitable hybrid. 22 DEPOSITION OFFICER: I missed something. You 23 were breaking up. 24 SPECIAL MASTER MYLES: It would be difficult 25 to come up with an equitable arrangement under this 51 1 hybrid scheme. 2 Well, Mr. Frederick, if South Carolina is 3 permitted to serve interrogatories on the intervenors, 4 during the pendency of the review of the intervention 5 order, then would you object to the intervenors -- it 6 sounded like you wouldn't object to the intervenors 7 having at least some ability to propound 8 interrogatories on the states. I gather you're saying 9 you wouldn't object to that? 10 MR. FREDERICK: That's correct. We don't 11 think that they should be entitled to a full 75, as 12 the two states had agreed with each other. But if the 13 number were limited to, say, 25, we would have no 14 objection to that. 15 SPECIAL MASTER MYLES: Okay. I think I have 16 no further questions on this issue. Are there any 17 other comments on this issue? And then are there any 18 other issues that we should address today? 19 MR. BANKS: Well, this is Jim Banks for 20 Charlotte. I would just add that if the Court upholds 21 the intervention order, it would only be fair that the 22 intervenors, who might have been limited in any 23 fashion during the intervening time while the matter 24 is on review, should be restored to all the benefits 25 of party status enjoyed by the other parties. And so 52 1 if there are limits on numbers of interrogatories or 2 opportunities to do any sort of discovery, at that 3 time we may have to, I would think, reconsider the 4 time frames in the case management order, so that the 5 intervenors can truly get the advantage of having 6 intervened in the case. 7 SPECIAL MASTER MYLES: Okay. 8 MR. BROWNING: Your Honor, this is Chris 9 Browning. That just emphasizes to me that this hybrid 10 situation really won't work in the interim. That 11 we're having to redo depositions after the Court 12 addresses the interim report, we're just making it 13 less efficient for everyone if a deposition has to be 14 reopened down the road. 15 Again, our suggestion would be to either make 16 the intervenors full parties, until such time as the 17 Supreme Court rules otherwise, stop everything 18 completely in its tracks, pick it back up, and the 19 delay that's resulting from South Carolina's request 20 has resolved itself. 21 MR. GOLDSTEIN: Special Master Myles, this is 22 Tom Goldstein. I just wanted to say, in response to 23 Mr. Frederick's concern about the number of 24 interrogatories, we are certainly amenable to some 25 reasonable limitation on them, contingent on what 53 1 would always be the case with South Carolina and 2 North Carolina, in that if special circumstance arises 3 and we can explain why we need more, we would come 4 back to you. 5 So our goals and scope of participation in 6 the case need to be focused on our particular 7 concerns. And South Carolina, you know, what 8 South Carolina is trying -- and the number of 9 interrogatories may well vary. I won't speak for 10 Charlotte, Duke, given the CRA may have broader needs. 11 In all respects, in our discovery, in our application, 12 we remain quite focused. 13 SPECIAL MASTER MYLES: Okay. Is that 14 everything on this issue? The comments have been very 15 helpful. Now, is there any other issue that we need 16 to deal with today? 17 MR. FREDERICK: One housekeeping matter, 18 Special Master Myles. This is David Frederick. 19 I believe we have conference calls set up already for 20 September. We have not set one already for October. 21 Whether or not we might put something on the calendar 22 or discuss that for that month. 23 SPECIAL MASTER MYLES: I'm sorry, for 24 October? 25 MR. FREDERICK: We have one set for 54 1 September 26th. 2 SPECIAL MASTER MYLES: And you're suggesting 3 that we set another call or set issues for 4 September 26th? 5 MR. FREDERICK: No, my suggestion was that we 6 get on people's calendars the monthly call for a date 7 in October and perhaps even one for November, so that 8 we can have it held as a placeholder. 9 SPECIAL MASTER MYLES: Let me get my calendar 10 here. I don't see any problem doing that if everyone 11 has their calendars with them. 12 September 26th is a Friday. We could have it 13 be October 24th. Would that work? 14 MR. FREDERICK: For South Carolina, this is 15 David Frederick, that would be fine with us. 16 MR. PHILLIPS: This is Carter Phillips. 17 That's fine with Duke. 18 MR. BANKS: This is Jim Banks for Charlotte. 19 I don't have any reason to think that's a problem. 20 MR. BROWNING: Your Honor, this is Chris 21 Browning for North Carolina. I don't have my schedule 22 in front of me. But if I'm unavailable, we'll 23 certainly find someone to cover that conference call. 24 MR. GOLDSTEIN: And this is Tom Goldstein for 25 Catawba. I'm giving a talk some time that day. But 55 1 if it overlaps during the hearing, then certainly 2 someone else for CRWSP will appear. 3 SPECIAL MASTER MYLES: Okay. Why don't we do 4 that? And why don't we just set the November 1st on 5 the next call? 6 MR. FREDERICK: Would that be -- can we make 7 that 2:00 Eastern time, Friday the 24th? 8 SPECIAL MASTER MYLES: I'm sorry, I missed 9 the o'clock. 10 MR. FREDERICK: 2:00, please. 11 SPECIAL MASTER MYLES: 11:00. Yeah, that's 12 fine with me. Does that work for everybody else? 13 MR. GOLDSTEIN: Yes. 14 MR. PHILLIPS: Yes. 15 SPECIAL MASTER MYLES: So 2:00 p.m. Eastern 16 time on the 24th of October will be the next call 17 after the September call. All right? I think that's 18 everything. 19 MR. FREDERICK: Thank you. 20 SPECIAL MASTER MYLES: You'll be hearing from 21 me on various outstanding issues promptly. 22 // 23 // 24 25 56 1 I, the undersigned, a Certified Shorthand 2 Reporter of the State of California, do hereby 3 certify: 4 That the foregoing proceedings were taken 5 before me at the time and place herein set forth; that 6 any witnesses in the foregoing proceedings, prior to 7 testifying, were duly sworn; that a record of the 8 proceedings was made by me using machine shorthand 9 which was thereafter transcribed under my direction; 10 that the foregoing transcript is a true record of the 11 testimony given. 12 Further, that if the foregoing pertains to 13 the original transcript of a deposition in a Federal 14 Case, before completion of the proceedings, review of 15 the transcript [ ] was [ ] was not requested. 16 I further certify that I am neither 17 financially interested in the action nor a relative or 18 employee of any attorney or party to this action. 19 IN WITNESS WHEREOF, I have this date 20 subscribed my name. 21 22 Dated: 23 24 _____________________________ DANA FREED 25 CSR No. 10602