1
1 STATE OF NORTH CAROLINA GENERAL COURT OF JUSTICE
COUNTY OF WAKE SUPERIOR COURT DIVISION
2
3
4 JOYCE MCCLOY, )
)
5 Plaintiff, )
)
6 )
V. ) FILE NO. 05 CVS 16878
7 )
THE NORTH CAROLINA STATE BOARD )
8 OF ELECTIONS and THE NORTH )
CAROLINA OFFICE OF INFORMATION )
9 TECHNOLOGY SERVICES, )
)
10 Defendant. )
)
11
12
Transcript of proceedings in the above-
13 mentioned case heard before the Honorable Donald W.
Stephens, December 14, 2005, reported by Carrie E.
14 Rice, RPR, at the Wake County Courthouse.
15
A P P E A R A N C E S
16
17 For the Plaintiff
DONALD BESKIND
18 MATTHEW ZIMMERMAN
19
20
21 For the Defendant
22 SUSAN KELLY NICHOLS
KAREN LONG
23
24 CARRIE RICE, RPR
Official Court Reporter
25 Wake County Courthouse
(919) 835-3492
2
1 THE COURT: All right, I was asked to hear a
2 TRO. I was the only available to hear it at the time
3 it was set. All I have is McCloy versus Board of
4 Elections TRO, Don Beskind, and I'm sure I allocated
5 about 15 minutes, which is what I usually give to
6 TROs.
7 MR. BESKIND: Well judge it's a TRO and a
8 mandamus.
9 THE COURT: Okay.
10 MR. BESKIND: I'm going to do the hardest
11 thing that I ever do in the courtroom and introduce
12 somebody and then sit down and try to up shut up.
13 THE COURT: You'll never be able to do this.
14 MR. BESKIND: Your Honor, this is Matt
15 Zimmerman of the California bar, admitted pro hoc vice
16 for purposes of representing Ms. McCloy in this
17 matter. This involves electronic voting machines and
18 the certification of those machines by the State.
19 That's the general topic area, and with that I'll
20 entrust you to Mr. Zimmerman.
21 THE COURT: Mr. Zimmerman, there's a lawyer
22 around whose name is Tom Loflin of Durham, and he was
23 a guy Judge Braswell told to Tom, Mr. Loflin, I'm
24 inclined to grant your motion if you just don't say
25 anything else. And 15 minutes later or 30 minutes
3
1 later, Judge Braswell denied Mr. Loflin's motion. So
2 we'll see how Mr. Beskind does.
3 Is this a -- are we here for a TRO or are we
4 here for a preliminary injunction?
5 MR. ZIMMERMAN: Your Honor, we are here for
6 a TRO. This is a matter of urgency and this is this
7 was the first available time that we could come before
8 the courts.
9 THE COURT: Does this mean we're going to
10 come back?
11 MR. ZIMMERMAN: I don't think we have to,
12 your Honor. I think it's going to be resolved today.
13 MS. NICHOLS: Your Honor, they noticed a TRO
14 and a preliminary injunction. What they've briefed is
15 a mandamus, which to me sounds like almost summary
16 judgment. They want the heart of the case heard on
17 the merits today in this proceeding.
18 THE COURT: Well, TRO is sort of ex parte,
19 but we invite the other party as a matter of courtesy.
20 I don't know how I would resolve something finally
21 today on a matter set for TRO.
22 MR. ZIMMERMAN: Your Honor, we're quite
23 happy to go forward with the TRO. We believe that the
24 TRO, the relief we're looking for is the -- obviously
25 the temporary version of the final relief that we're
4
1 looking for. If the Court believes that we have to
2 come back to brief --
3 THE COURT: Well, the TRO is only good for
4 10 days.
5 MR. ZIMMERMAN: Absolutely, your Honor.
6 THE COURT: Until you have to come back and
7 do it all over again.
8 MR. ZIMMERMAN: Absolutely.
9 THE COURT: Are y'all ready to do it at one
10 time or do you want to come back?
11 MS. NICHOLS: We're here to oppose their
12 motion for preliminary injunction and the TRO. Now,
13 to the extent they want a mandamus, their complaint
14 asks for that. We think there are a lot of reasons
15 that this matter can be disposed of both factual and
16 legal.
17 THE COURT: Okay. Well, why don't we just
18 kind of get into it, since I don't have a clue. I
19 mean I was handed by my staff all this, all this that
20 was apparently filed about ten minutes before 2:00. I
21 don't know that I have the ability to absorb all this
22 and make something, some kind of final decision that
23 I'm comfortable with, but why don't we start and we'll
24 see where we go.
25 MS. NICHOLS: Thank you. And just for the
5
1 record, with me -- I'm Susan Nichols with the attorney
2 general's office representing the State Board of
3 Elections and the Office of Information Technology
4 services and with me is Karen Long of our office.
5 THE COURT: All right.
6 MR. ZIMMERMAN: Thank you, your Honor. I'm
7 going to take your advice to heart and keep this as
8 brief as --
9 THE COURT: Well, actually I'm not -- I'm
10 not inviting brevity. If I need to understand this,
11 you need to make sure I understand it, so.
12 MR. ZIMMERMAN: The case, it comes down to
13 some very simple statutory requirements. I want to
14 give you some very brief background information.
15 THE COURT: Okay.
16 MR. ZIMMERMAN: That will make this, I
17 think, more clear.
18 In 2004, during the general election, there
19 was a new voting breakdown that resulted in the loss
20 of 4,500 votes just in Garner. And in response to
21 that, the General Assembly created a special
22 legislative panel to review the issue to suggest
23 legislation. And in August, the result of that, was a
24 massive election reform that focused on, in part, the
25 certification process or voting equipment.
6
1 The requirements are fairly straightforward.
2 We've included it, the statute with the exhibits, if
3 you want to look, it's at Exhibit B, included with my
4 declaration.
5 MS. NICHOLS: Objection, your Honor. One
6 thing I wanted to ask about is Mr. Zimmerman is
7 arguing the case, but he's also offered his own
8 affidavit with a number of attachments that he
9 apparently intends to rely on his argument. And I'm
10 not familiar with the attorney getting to provide the
11 evidence and make the legal argument.
12 THE COURT: Okay. Well, the objection is
13 noted. We'll just see -- see how it sorts out in a
14 few minutes. Go ahead.
15 MR. ZIMMERMAN: Thank you, your Honor.
16 To begin with, refer to I think three or
17 four brief, very brief citations to the statute. To
18 begin with, section 163-165.7, and that discusses the
19 powers and obligations of the Board of Elections.
20 And beginning in Subsection A, the
21 requirement states only voting systems that have been
22 certified by the State Board of Elections, in
23 accordance with the procedures and subject to the same
24 set forth in this section, and have not been
25 subsequently decertified shall be permitted for use in
7
1 elections in this state.
2 That may seem a bit of an obvious
3 requirement, but it does place limitations upon the
4 Board of Elections to only certify equipment that is
5 in compliance with the requirements of -- of this
6 statute.
7 Now, section -- if we move to Section 2-A,
8 which is on page 6 of that attachment, and we're
9 referring there to Section 163-165.9A, discussing the
10 duty of the vendors.
11 Under Subsection A-1, "The vendor shall
12 place in escrow, with an independent escrow agent
13 approved by the State Board of Elections, all software
14 that is relevant to functionality, set-up,
15 configuration and operation of the voting system."
16 And it goes on to discuss what specifically
17 those materials include. And -- and of note for
18 argument today, your Honor, is the requirement that
19 vendors must turn over source code.
20 Now, back to Section 163-165.7, this time on
21 page 2, if you look at Subsection A-6, this discusses
22 the obligations of the Board of Elections to discuss
23 the -- or to set forth the RFP process, what must be
24 required as the Board of Elections goes forward with
25 its RFP process.
8
1 We look at subsection 6. It says, "With
2 respect to all voting systems using electronic means,
3 that the vendor provide access to all -- all of any
4 information required to be placed in escrow by a
5 vendor, pursuant to the section that we just read, for
6 review and examination by the State Board of Elections
7 and other parties."
8 And finally, move to subsection C of this
9 same section, the bottom of page 3, we have the
10 requirement that prior to certifying a voting system,
11 and that's the -- that's the -- the Lynchpin to the
12 action today, your Honor.
13 "Prior to certifying a voting system, the
14 State Board of Elections shall review or designated
15 independent expert to review, all source code made
16 available by the vendor pursuant to this section and
17 certify only those voting systems compliant with State
18 and Federal law.
19 Diebold Election Systems, one of the vendors
20 that is seeking certification in this state, brought
21 an action last month arguing that they shouldn't --
22 that they should not be held to the -- the standards
23 set forth in -- in this statute, arguing that the --
24 their system, because it's based in part on
25 third-party software, that they claim is -- that they
9
1 are unable or to -- to obtain from the third-party
2 vendors, that they were unable to submit this -- to
3 submit that material to the Court even -- excuse me,
4 into escrow, even though, as we just saw, the statute
5 requires vendors to submit all -- all relevant
6 software and makes no exceptions and makes no
7 distinction for -- for business models.
8 The Court dismissed that action on a subject
9 matter jurisdiction ground, and yet, three days
10 after --
11 THE COURT: Who heard that?
12 MR. ZIMMERMAN: Judge Cashwell, your Honor.
13 THE COURT: I mean, no case in controversy
14 or --
15 MR. ZIMMERMAN: Failure to state the claim.
16 THE COURT: Yeah, it's sort of asking the
17 Court for an advisory opinion about what are you going
18 to do if we do or don't do something.
19 MR. ZIMMERMAN: Exactly. And three days
20 after Diebold was in court, representing to the Court
21 that they were unable to provide all this source code,
22 as per the statute, the Board of Elections,
23 nonetheless, certified Diebold and two other systems
24 on December 1st.
25 Now, it's clear that -- it's obvious from
10
1 Diebold's statement alone, that the Board of Elections
2 did not review, did not review all relevant software
3 as per the --
4 THE COURT: Clear to who?
5 MR. ZIMMERMAN: Sorry.
6 THE COURT: Clear to who?
7 MR. ZIMMERMAN: They represented to the
8 Court, your Honor, and in their briefing that they had
9 not and were unable to submit that source code for --
10 for purposes of the certification process.
11 Now --
12 THE COURT: On the date that they made that
13 declaration?
14 MR. ZIMMERMAN: Yes, yes, your Honor.
15 THE COURT: Okay.
16 MR. ZIMMERMAN: And the Diebold complaint --
17 THE COURT: I don't have a quarrel with
18 that, but then they subsequently thereafter did
19 something that caused the Board to certify them.
20 MR. ZIMMERMAN: Well, no actually, that's
21 the point, your Honor. They didn't do anything else
22 or at least there has been no -- no indication that --
23 that they did so. And in fact, even if they did
24 include more accurately, somehow obtain permission for
25 all of the third-party software, which includes the
11
1 Windows Operating System, they would clearly not have
2 had the time to review -- or the Board would not have
3 had the time to review that software. And -- and that
4 is confirmed by the Board of Elections own -- own
5 requirements.
6 If you look at the RFP that was submitted
7 for this process, it's included as Exhibit C. And you
8 look on page -- you look at requirement, technical
9 requirement number 6. It's on page 15. The page
10 numbers are at the top.
11 The RFP process requires or it sets forth,
12 With respect to all voting system using electronic
13 means, the vendor must agree to do all of the
14 following as outlined in the section that we discussed
15 earlier. Within 15 working days of the contract
16 award, this is a prospective escrow requirement.
17 The -- you know, to sum up the -- the Board
18 of Elections simply has not reviewed all of the
19 relevant -- the code relevant under this statute.
20 Now, it's been suggested by the Board of
21 Elections, subsequently to this, to this certification
22 process, that they have satisfied the obligation in
23 other ways.
24 Recall that the statute does permit the
25 Board of Elections to outsource, essentially, this
12
1 review process. One of the one -- in one of the --
2 one of the requirements or one of the -- one of the
3 independent agents that they appointed to is -- are
4 the federally accredited ITA testing bodies. And
5 their job is a quite limited one.
6 They -- many states require voting systems
7 to be federally accredited, and that means that there
8 are a -- that there are a short list of requirements,
9 minimum requirements, that the -- that the system has
10 to meet.
11 Now, to the extent that they're relying on
12 that argument, it -- it fails right out -- out of the
13 box, because the ITA process simply doesn't review the
14 software that we're talking about here, or at least
15 the bulk of the software. Quite specifically, the
16 federal ITA process does not test the source code of
17 commercial off-the-shelf software, precisely the
18 software that Diebold came into court saying that they
19 couldn't turn over.
20 So we have the Board of Elections apparently
21 relying on this third -- third-party, the federal
22 accrediting body saying you've met these federal
23 requirements, but there is at least, the one entire
24 category of software that again, Diebold said that it
25 had relied on, that the Board did not meet or that the
13
1 ITA body did not test.
2 In addition to that, the actual tests
3 performed by the ITA are different from -- are very
4 different from the tests that are set forth in the
5 statute.
6 If we look, once again, at Subsection C at
7 163-165.7, it lists the minimum tests that must be
8 performed. And again, just to read quite briefly.
9 At a minimum, the State Board's review shall
10 include a review of the security, application
11 vulnerability, application code, wireless security,
12 security policy processes, security privacy program
13 management and on and on and on.
14 The bulk of them are simply not found in the
15 ITA, the ITA process. So we have an entire category
16 of software that's included in that ITA process. We
17 have the test -- we have a separate body of tests --
18 and again, that's not unusual. The federal guidelines
19 are meant as minimum standards that the State can, and
20 in this case did, as a result of a specific election
21 problem, decided to -- decided to supersede.
22 And again, it should be noted that the State
23 of North Carolina, before the General Assembly decided
24 to change the law, already said that all systems in
25 the state had to meet that -- that -- those federal
14
1 standards that the ITA process reviewed.
2 It's -- it's -- it's obvious that it doesn't
3 matter what the -- what the State Board of Elections
4 has done. Subsequently, they were required, under the
5 statute, to review all of the software prior to
6 certification.
7 And what you have now instead, your Honor,
8 is a certification process by which the Board of
9 Elections simply goes ahead and grants certification
10 and says go ahead, submit your source code later and
11 then we may or may not do anything with it later. And
12 with that, I will --
13 THE COURT: I mean, who is Joyce McCloy and
14 why does she care?
15 MR. ZIMMERMAN: Joyce McCloy, she's in the
16 audience today, your Honor. She has a -- is a
17 long-time -- sorry.
18 THE COURT: I just --
19 MR. ZIMMERMAN: Sure.
20 THE COURT: This is a plaintiff versus the
21 State Board of Elections and North Carolina Office of
22 Information Technology Services, and -- and --
23 MR. ZIMMERMAN: Sure.
24 THE COURT: Exactly why -- why is this --
25 well, is -- what's her standing? What is it that
15
1 brings her here? Why is she in a position to make
2 this challenge? Why is it an emergency? What is it
3 that requires immediate action by the Court to sort of
4 get in the middle of this process.
5 As far as I know, we don't have an election
6 in the next 30 days. You know, what's -- what's all
7 this about.
8 MR. ZIMMERMAN: Sure. I'm going to take
9 your questions in reverse order, your Honor.
10 THE COURT: Okay. You can take them in any
11 order you want to. This is -- I mean, what's this
12 about?
13 MR. ZIMMERMAN: The reason that it's an
14 emergency is that as of, according to the Board of
15 Elections's own procedures, as of December 23rd, I
16 believe, once the -- once all of the vendors turn over
17 their source code that should have been revealed
18 before, at that point the vendors can now enter into
19 contracts and start selling the equipment across the
20 state.
21 So without action, without -- without an
22 order from the Court to actually force the Board of
23 Elections to meet its very substantive requirements to
24 review the equipment, the -- these machines are going
25 to be sold out into the state. It would be very,
16
1 very, very difficult to actually be able to unwind
2 that process. The State -- the counties are going to
3 have to commit funds on systems that were, in fact,
4 illegally certified, and are going to have to, at some
5 point, replace those with actually certified systems.
6 As for why Joyce McCloy has standing here,
7 this is precisely -- this is the prototypical mandamus
8 case. This is a case whereby the Board of Elections
9 simply did not perform an undiscretionary,
10 administerial task. These are shall statutes, your
11 Honor. The Board shall do this prior to
12 certification.
13 In response to your question about why Joyce
14 McCloy specifically, this -- she is precisely the
15 person that the statute was -- was passed for. We're
16 talking about the very integrity of voters' right --
17 the excuse me, the integrity of votes cast by voters
18 in this -- voters in this state. There can be no
19 other direct -- no other plaintiff that has a more
20 direct interest than the actual voter.
21 Now, Diebold --
22 THE COURT: Well, I mean, it's a long way
23 from somebody fighting to submit a source code to --
24 sort of like Ms. O'Leary's cow. Somebody fails to
25 submit a source code to a point in which a voter -- a
17
1 voting result and the integrity of that result is in
2 question, is it not? I mean, isn't it a long way from
3 over there to where you want to go?
4 MR. ZIMMERMAN: I don't think so, your
5 Honor, and this is why. Again, this statute was
6 passed specifically because the vote -- the vote --
7 the votes of 4,500 voters in this state were lost.
8 That's a direct -- that's a direct harm to the voters
9 of the state, and the General Assembly --
10 THE COURT: And it may or may not have
11 occurred as a result of -- had a source code not or
12 not been in place, that may have had absolutely
13 nothing to do with the -- with the resulting
14 occurrence.
15 MR. ZIMMERMAN: It may or may not have, but
16 that's the policy decision made by the General
17 Assembly. They decided that in order to prevent these
18 kinds of mistakes and other mistakes. This isn't an
19 isolated incident. There are problems in voting
20 technology across the country.
21 THE COURT: I understand that, but you're
22 telling me that the State Board of Elections is about
23 to willfully violate the mandate of the legislature,
24 and I should stop it?
25 MR. ZIMMERMAN: Absolutely, your Honor.
18
1 THE COURT: And we should do that based upon
2 a request for a temporary restraining order and an ex
3 parte proceeding, in which they've been invited, as a
4 matter of courtesy, without hearing anything.
5 MR. ZIMMERMAN: That's why we can do this as
6 a TRO at this point, your Honor, is to the extent we
7 need further -- that the State's belief it has further
8 evidence that is relevant to this case, I don't think
9 there is. And in fact, I can guarantee there is not.
10 But the fact that, you know, the fact that
11 you can't -- we can't come to a final decision today,
12 certainly does not prevent you from, you know,
13 entering a TRO, which is designed in situations like
14 this. There is eminent harm. There is -- you know,
15 there is irreversible -- nearly irreversible harm as a
16 result of the Board of Elections's actions.
17 THE COURT: Well, if it turns out that they
18 acted outside the mandate of the legislature, and in
19 violation of it, I mean, and have done so
20 intentionally, I mean, I believe we'll be able to
21 correct that down the road.
22 MR. ZIMMERMAN: Well, number 1, the intent
23 requirement -- there's no intent requirement here.
24 THE COURT: Well, had done so knowingly. I
25 mean, you put them on notice, I assume. This hearing
19
1 puts them on notice of their requirements.
2 MR. ZIMMERMAN: Well, but they certified the
3 equipment already. They certified it two weeks ago in
4 violation. So what we're asking for -- and mandamus
5 is -- is absolutely the right vehicle by which --
6 THE COURT: What do I -- what do I -- what
7 do I do? Do I just tell them follow the law? Is that
8 -- is that what -- is that the mandamus you see?
9 MR. ZIMMERMAN: Number 1, void the illegal
10 certifications and yes, tell them to follow the law.
11 THE COURT: Why would I have to say anything
12 other than follow the law? And if you fail to do so,
13 not only do you violate the statute, you violate my
14 order at your peril.
15 So I mean, you know, why need to say more
16 than that?
17 MR. ZIMMERMAN: They've already demonstrated
18 that they are not -- that they haven't followed the
19 law and they --
20 THE COURT: Well, they wouldn't have
21 violated my order until I order it, would they?
22 MR. ZIMMERMAN: That's true.
23 THE COURT: Okay. They would have simply
24 violated the mandate of the legislature, according to
25 you.
20
1 All right. Well, let me see -- let me see
2 what the other table says.
3 MS. NICHOLS: Your Honor, first of all, the
4 Board of Elections has taken some considerable hits
5 for not following the law when that's precisely what
6 they're in the middle of doing and have been doing and
7 are doing to the fullest extent of their capabilities
8 in order to have voting equipment in place for the
9 2006 elections.
10 THE COURT: Well, are they in compliance?
11 MS. NICHOLS: Yes, sir.
12 THE COURT: Have they complied with the
13 mandate of the statute?
14 MS. NICHOLS: Yes, sir, and I'll explain
15 why. And what he's saying, he's just incorrect about
16 what the statute says. He read to you pieces of the
17 statutes.
18 THE COURT: Okay. So y'all have a different
19 interpretation of what the statute requires?
20 MS. NICHOLS: Yes, sir.
21 THE COURT: Well, who gets to -- who's the
22 final arbiter of that?
23 MS. NICHOLS: The State Board of Elections
24 is the agency entrusted with certifying the equipment,
25 is the decision-maker for the State of North Carolina.
21
1 And then persons -- we've got two things going on
2 here. One is their certification decision. All of
3 this is part of a -- a process by which equipment is
4 certified so that counties can go and buy that
5 equipment for their elections in 2006.
6 THE COURT: I understand, I understand.
7 MS. NICHOLS: So we're in the middle of a
8 procurement process as well.
9 THE COURT: I understand.
10 MS. NICHOLS: But at the end of the day, one
11 of the vendors who doesn't end up on the contract
12 could file a protest. So we're still in the middle of
13 this. So some of the information that he's asked for
14 is still confidential because it's part of the
15 procurement process, and the time for filing protest
16 hasn't expired.
17 But I can, if you like, show you exactly how
18 they're following the law, based on public information
19 and what was discussed at their meeting of December
20 1st that Ms. McCloy attended and spoke in, at which
21 time they did certify two of the five vendors who had
22 applied to offer voting equipment in North Carolina.
23 They contingently certified a third, and in
24 the meeting this morning had to withdraw that because
25 they hadn't met the contingency.
22
1 But they have had a team of folks working,
2 mainly North Carolina citizens with particular areas
3 of expertise. But -- two consultants, nationally
4 recognized in voting technology in one case, and one
5 of them is an expert in computer source code, and
6 advises the EAC, the elections and assistance
7 commission at the federal level on rulemaking at the
8 federal level.
9 North Carolina voting equipment has to
10 comply, there's no doubt with the federal
11 requirements.
12 THE COURT: Right.
13 MS. NICHOLS: And with the State
14 requirements.
15 THE COURT: Right.
16 MS. NICHOLS: They've relied on these
17 reports, that are federally accepted, and much of
18 their brief and his declaration talk about the federal
19 requirements and these independent testing reports by
20 certified labs.
21 The State Board has used those, as well as a
22 very high-calibered team of folks, who have been
23 trying to assure that the State law has complied with
24 and making sure that that happens.
25 And they're doing all this in incredibly
23
1 fast timetable, because among other things they have
2 hanging over them, is because of the 2000 elections
3 and the hanging chads and punch card equipment, the
4 federal government passed legislation in 2002, that
5 made money available to those areas that still had
6 either those old fashioned lever machines or punch
7 card.
8 A number of our counties, 13 of them, have
9 precincts that were still using that equipment. Even
10 with a extension, they have a deadline of January 1 of
11 acquiring -- they had to get rid of their punch card
12 equipment and lever -- and acquiring other voting
13 systems that meets federal requirements.
14 THE COURT: In order to get qualified for
15 federal funding?
16 MS. NICHOLS: In order to keep their federal
17 money. They've already gotten about 900,000. They're
18 going to have to give it back if they don't get rid of
19 that equipment. So the Board of Elections at the
20 county level and the state level, are doing everything
21 possible to comply with this legislation passed in
22 August setting the state requirements, in addition to
23 the federal requirements required by that law that --
24 that implicates that money.
25 So, if we're here on a TRO, one thing the
24
1 State would ask for is a bond, if what they somehow
2 asked for, this Court to tell the State Board to set
3 aside the certification that it's already issued and
4 that precludes any county in this state from being
5 able to acquire the equipment.
6 One other thing --
7 THE COURT: Would also have to pay -- return
8 federal funds, you know what I'm talking about? You
9 know what kind of money we're talking about?
10 MS. NICHOLS: Yes, sir. And that's
11 attached, the order of the State Board, which is a
12 public record. And Ms. McLean is here to certify that
13 if anybody has any questions about it. It's
14 Attachment E. It sets out the counties and the dollar
15 amounts. It basically 893 dollars and 822 cents [sic]
16 that the State would have to pay back that's been made
17 available to these counties. $893,000.
18 THE COURT: I assumed. So that money would
19 be -- you contend that money would be in jeopardy if I
20 issued any kind of restraining order, and that being
21 the case, you would expect an appropriate bond to
22 satisfy that injury and damage to the State in the
23 event that a later court rule that I had acted in
24 error, and had been erroneously convinced to restrain
25 this, okay?
25
1 MS. NICHOLS: Our brief sets out some of the
2 legal reasons why we don't believe Ms. McCloy has
3 standing, and --
4 THE COURT: I mean this -- honestly, when I
5 get involved in these, I usually get involved in
6 fights between vendors. It's not a fight over -- it's
7 more a fight about money than it is about anything
8 else, honestly. And I just can't tell whether this is
9 a fight about a concerned citizen taxpayer or whether
10 or not it's a fight about money, so that's why I asked
11 who Ms. McCloy was and why she cared.
12 MS. NICHOLS: Well, the State doesn't
13 contend that she's anything other than an activist
14 voter, concerned citizen --
15 THE COURT: I understand, but that's what
16 prompted my question. Usually it's a bunch of vendors
17 trying to out who-do one another and get in the front
18 of the line and push somebody to the back of the line
19 and some such. And that's the only reason they're
20 concerned about whether the statute has been complied
21 with. And I don't really have a lot of sympathy for
22 that kind of a fist fight.
23 MS. NICHOLS: Well in this case, what
24 Ms. McCloy is trying to do, is take over the function
25 that the General Assembly has given to the General --
26
1 to the State Board of Elections. And --
2 THE COURT: She's trying to tell you how to
3 do your job.
4 MS. NICHOLS: She's saying they haven't done
5 their job and incomplete information. So the
6 complaint, that their standing -- it can be considered
7 an affidavit, since it's verified, their whole
8 paragraph is based on newspaper articles about
9 meetings she was in. We would object to the use of
10 newspaper articles to prove facts as hearsay.
11 But in addition, your Honor, the other
12 concern we have is there's -- the State hasn't waived
13 sovereign immunity with respect to this. There's no
14 statute that she cites -- in fact, even in her
15 complaint, she says there's no way for me to raise
16 this issue. There's no statutory process that allows
17 me to sue.
18 And as you said, she's not a vendor who can
19 file a protest. Under the administrative rules, if
20 one of these vendors does file a protest, I believe
21 she could intervene in that.
22 THE COURT: Right.
23 MS. NICHOLS: And maybe if harm down the
24 road is caused because equipment is purchased in an
25 election she participates in, has to be set aside,
27
1 perhaps there would be some avenue, perhaps there's an
2 administrative avenue at the end of the day. But at
3 this point, we're in the middle of a process. These
4 vendors, even the one ones that were certified on
5 December 1, under my interpretation of the statute, on
6 December 22nd, they're supposed to supply the code,
7 escrow the code in accordance with the very-detailed
8 order that the board has provided as to where the code
9 is to be supplied, which kind of code is to go into
10 this independent escrow house, which kind of code can
11 be in a different escrow house, based on how critical
12 it is to the functioning of the equipment.
13 The vendors also have to post a 7.5 million
14 dollar bond. They have to set up an office to operate
15 in North Carolina, if they don't already have one.
16 And all of this happens before they can sell the first
17 piece of equipment.
18 We won't know till after they have complied.
19 And the reason I'm not -- by telling you that,
20 confessing, as he alleges, that they haven't done the
21 source code review that's required is because of the
22 wording of the statute, and what the statute requires.
23 It's a two-tiered process.
24 And G. S. 163-165.7, which is a part of the
25 bill that's attached as A to his declaration, says
28
1 they have to certify and decertify equipment in
2 accordance with that section of the statute.
3 They have to have an RFP and the number 6
4 that he read you was part of a list of the things that
5 needs to be in the RFP.
6 THE COURT: Right.
7 MS. NICHOLS: Then, the critical part for
8 his argument is section C, which says, "prior to
9 certifying a voting system, the State Board shall
10 review or designate an independent expert to review,
11 all source code made available by the vendor, pursuant
12 to this section, and certify only those voting systems
13 compliant with State and Federal law.
14 Then it goes through a list of things that
15 the State Board's review shall include, many of which
16 you can't determine only by looking at source code.
17 There are things that need to be -- for example, one
18 of the things listed is security slash privacy program
19 management.
20 Now, the source code may help bear out what
21 a vendor is doing, but the reason they needed people
22 to talk to the vendors, to look at the vendor's
23 policies before they certified their equipment, was to
24 make an informed analysis of what sort of security and
25 privacy program management they had.
29
1 So subpart C has a whole host of things,
2 nine of them, I believe, that the State Board was
3 charged with examining before it certified the
4 equipment, and it did that by using the reports from
5 these accredited independent testing authorities, and
6 by its own panel of hardware, software and election
7 experts.
8 The escrow provision is a completely
9 different section of the statute. And the most
10 important part of that statute is the vendor has no
11 obligation to escrow all the code until after they
12 have a contract.
13 The provision that speaks to escrow is in
14 the separate section set out on page 5 of the bill.
15 It's G.S. 163-165.9A that lists requirements that
16 vendors that have a contract to provide a voting
17 system must do. And it's at that point that they're
18 required to provide the code for escrow.
19 And the -- obviously the point of that. At
20 that stage of the process, is so that the Board of
21 Elections can access it should a company go bankrupt,
22 should a problem develop with equipment, so they can
23 identify the problem.
24 Your Honor --
25 THE COURT: No, let me catch up with you. I
30
1 heard what you said, I'm just catching up with you.
2 So with regard to the two companies that
3 have been certified, only upon falling into the
4 category that they have a contract that there's a
5 source code required, is that --
6 MS. NICHOLS: Well, not -- they're required
7 to escrow it at that point.
8 THE COURT: Right.
9 MS. NICHOLS: And he's using that provision
10 to say --
11 THE COURT: I understand that. It says they
12 are required to escrow it, and then several sections
13 later, with regard to the Board's duty to monitor,
14 reference is made that the State Board shall review or
15 designate an independent expert to review all source
16 code, escrow and shall publish, make available,
17 findings in accordance with Chapter 136.
18 MS. NICHOLS: Yes, sir. That's after --
19 after the contract is completed and they escrow it.
20 What they're complaining about is before getting to
21 that step, has the Board, in certifying, met the
22 requirements of 165.7 C.
23 THE COURT: Right.
24 MS. NICHOLS: Which is on page 3 of the
25 bill.
31
1 And what that statute requires -- and what
2 -- I think the fundamental problem is they assume
3 because it's -- the vendor hasn't yet been required to
4 escrow it, that the State Board had no information
5 about the code.
6 THE COURT: Right.
7 MS. NICHOLS: That's the fundamental factual
8 error that they're making.
9 THE COURT: Right. And why is that a
10 fundamental factual error?
11 MS. NICHOLS: For two reasons. The main --
12 a main one is that the Board in section C is
13 authorized to designate independent experts. And it
14 has chosen, as one of its experts, this nationally
15 accredited, fairly small number of testing
16 laboratories that do considerable source code review.
17 THE COURT: I see.
18 MS. NICHOLS: And they get a stack of things
19 that talk about the code.
20 Now, in addition, they hired a person, a
21 national independent expert, who looked at that
22 report, as well as the North Carolina folks and the
23 staff, including the IT director at the State Board,
24 looked at these reports, and then used them as a
25 starting point to figure out whether or not all of
32
1 these requirements, under state law, that are in
2 addition to federal requirements were met. And they
3 did that by looking at the report, by their own
4 knowledge already of much of the software, and by
5 talking to the vendors, by asking, okay, you say you
6 encrypt this.
7 Well, when they demonstrated it, they did
8 have an eight-hour session or sessions over two days
9 where the vendors came and demonstrated their
10 equipment for the team to ask questions, to double
11 check, to go behind.
12 And -- and they did that. Their primary
13 focus was on whether or not it counted and tabulated
14 votes correctly, because what Subsection C talks about
15 is looking at the source code and the application
16 code, which there are people here, if your questions
17 get too detailed, who can go further than me.
18 THE COURT: I won't -- I certainly won't
19 know enough of what you're talking about to ask
20 intelligent questions.
21 MS. NICHOLS: But the application codes --
22 and they were looking at voting machines. And the
23 application code was what made that voting machine
24 work to tabulate any kind of votes. And they have
25 supplied information and attached our brief, the
33
1 certification orders, where it's listed the different
2 components of their voting systems.
3 THE COURT: And they have, according to you,
4 they have satisfied an independent agency of the fact
5 that they can provide source codes. And if they -- if
6 they contract with the State to -- to provide
7 equipment, that they can escrow those source codes as
8 by statute required?
9 MS. NICHOLS: Yes, sir. And that that code
10 will function they way the vendor says it's supposed
11 to function when it comes election day, which is the
12 big --
13 THE COURT: Which is contrary to what your
14 opposing counsel contends.
15 MS. NICHOLS: I'm sorry.
16 THE COURT: What is contrary to what your
17 opposing counsel contends, that they say they can't
18 and they will not be able to, and they have therefore
19 not been properly certified.
20 MS. NICHOLS: And they're relying in large
21 part on the TRO action that was heard by Judge Manning
22 and then by Judge Cashwell, brought by one of the
23 vendors.
24 THE COURT: Right.
25 MS. NICHOLS: Who was concerned this statute
34
1 has in it criminal and civil penalties --
2 THE COURT: If they don't comply.
3 MS. NICHOLS: -- and they were worried, if
4 down the road they couldn't supply everything that
5 they had provided in the RFP, that they couldn't
6 escrow it, because they didn't control it, that they
7 would be subject to civil and criminal liability.
8 I don't know, frankly, whether or not that
9 concern of theirs has been fully resolved, but the
10 case has been dismissed, and --
11 THE COURT: Well, if they're that concerned
12 about it, then they ought not to be involved with the
13 bid process, frankly. If they don't think they can
14 comply, they ought not to make any effort to.
15 MS. NICHOLS: And we will know whether or
16 not they can comply before anybody contracts with
17 them. But what the plaintiff has deduced from her
18 lawsuit --
19 THE COURT: Well, I mean, you'll know
20 indirectly.
21 MS. NICHOLS: We will know that they will --
22 if they don't supply their code to be escrowed on
23 December 22nd, we will know they have not complied
24 with the requirements of the law and no one can
25 contract with them. They've been certified as
35
1 eligible to sell their equipment, but they still have
2 to post the bond and escrow the code. And in their
3 case, I think they have an office in North Carolina,
4 but make sure they have that.
5 But what plaintiff has done is taken their
6 lawsuit and deduced from that, and from obvious
7 considerable expertise in computers generally, that
8 the computer experts working with and for the State
9 Board haven't done their job with respect to complying
10 with Subsection C. And they haven't been in the room
11 when that's done. They don't know what's happened.
12 They don't have a basis for alleging that it hasn't
13 happened.
14 And if -- since this is a TRO, they've not
15 really talked about the harm to the plaintiff, except
16 some possible harm down the road.
17 THE COURT: Right, Ms. O'Leary's cow.
18 MS. NICHOLS: The other factor that's
19 ordinarily is considered harm to the defendants and I
20 think that could be considerable if North Carolina is
21 precluded from getting voting equipment in place. And
22 not just the $900,000, but all of the counties now are
23 in the situation of having equipment that's been
24 decertified.
25 The only option they'll have, short of a
36
1 voting system is paper ballots. And the Board of
2 Elections had a meeting this morning over an election
3 in Princeville that turned on one paper ballot and
4 trying to determine the voter's intent. And many
5 elections folks don't view using paper ballots as a
6 desirable safeguard if voting equipment can't be
7 certified in time to be used in this year's primary.
8 So, and a final point I'd make is when this
9 is argued on the merits, we think -- and they're not
10 fully developed because we need to do some more
11 research on the standing, but certainly on sovereign
12 immunity on the case of controversy with this
13 particular person, her right, whether she's exhausted
14 administrative remedies. We think there are a number
15 of procedural, as well as statutory interpretation,
16 reasons why they will not prevail on the merits.
17 THE COURT: All right.
18 MS. NICHOLS: Thank you.
19 THE COURT: This is a governmental function,
20 I mean, how -- how can -- unless the State contests to
21 being sued, how do you -- how does the taxpayer bring
22 this lawsuit anymore than I can sue George Bush
23 because I don't think he followed proper procedures to
24 go to Iraq or something like that.
25 MR. ZIMMERMAN: Well, I think it's a little
37
1 different, your Honor.
2 THE COURT: Well, I didn't mean to be
3 entirely absurd, but in a governmental function, you
4 can't interject yourself in any state agency and say
5 well, the agency is just not complying with the
6 mandate of the legislature and as a citizen I've
7 decided that I'm going to have the Court come in and
8 declare it so, unless -- unless -- unless the
9 sovereign has in some manner has consented to some
10 judicial intervention.
11 MR. BESKIND: When a government has an
12 obligation to do a thing, and that obligation is owed
13 to the public, it's my understanding that a member of
14 the public affected by the failure to do that
15 obligation, has the right to come in and require the
16 government to do it, because in part, the government
17 can't be sued for damages, among other reasons. Your
18 only remedy as a member of the public is to make them
19 do it right. I mean, except to the extent that the
20 government allows itself to be sued.
21 I mean, this is a non-discretionary duty.
22 This isn't the Hochheiser case where you can put a
23 guardrail here and not put a guardrail here and the
24 State can be sued, because it's a discretionary thing.
25 This is a mandatory required duty.
38
1 We have not right to tell them how it has to
2 come out, and no one suggests that that should be
3 done. But we do have the right to tell them you have
4 to follow the law. It's just -- otherwise --
5 otherwise, you would have no remedy involved, no one
6 would have any remedy when statutes were being
7 violated.
8 THE COURT: Well, if you were wrong and --
9 but you convinced me you were right for the moment,
10 and I -- I grant you the release sought and the entire
11 state, all counties suffer significant harm, are you
12 prepared to post a bond to cover that?
13 MR. BESKIND: Well, I think, your Honor,
14 that's a question that we would have to address.
15 THE COURT: Well, why don't you address it?
16 MR. BESKIND: I think that would involve
17 conferring with our client.
18 THE COURT: Well, I mean, are we talking --
19 I understand we're talking about just a timeframe,
20 we're talking about the potential of either losing or
21 having to pay back pretty close to a million dollars
22 unless this can be done before the first of year, I
23 guess.
24 MR. BESKIND: Right. Well, I would say to
25 you, your Honor, as I understand it, this defendant is
39
1 not the person that has the money, nor the person that
2 will lose the money, if you want to talk about
3 Ms. O'Leary's cow. This is not the State's money.
4 THE COURT: It will be the people's money.
5 MR. BESKIND: No, not in terms of their
6 relationship with the State.
7 THE COURT: People through government.
8 MR. BESKIND: Right. People through
9 government. What I would say to you is the counties
10 have received money to use for certified machines.
11 The State has the power to change and fix this problem
12 so that there are adequate machines certified.
13 If it does so, there is no problem at all.
14 If it doesn't do so or it goes to the Court of Appeals
15 and has it set aside, no money is going to be lost.
16 No money is going to be lost. There have been
17 extensions once and there will be extensions again.
18 As we know, your Honor, the federal
19 government doesn't take its money back when you're
20 trying to do the thing they want you to do.
21 THE COURT: I can make no statement about
22 that and you can't either.
23 MR. BESKIND: No. And if you want us to
24 approach the question of bond, I will.
25 THE COURT: Can you post a million dollar
40
1 bond?
2 MR. BESKIND: Well, I think that requires
3 discussing it with our client and other people that
4 would be involved with that.
5 It seems to me though, Judge, that's not
6 determinative of the outcome, you would require us to
7 post a bond in order to get the order, and we would
8 either succeed or not succeed in doing that.
9 The merits of the question, I believe, are
10 separate and apart from the question, whether we can
11 afford a bond.
12 THE COURT: Well, I'm struggling on both the
13 standing and sovereignty issues, so you need to -- you
14 need to help me there.
15 MR. BESKIND: Okay. Let me see if I can.
16 On the standing issue, Judge, the question is who
17 would have standing or would no one ever be able to
18 challenge a wrongful certification of a vendor.
19 You say, I don't like these cases where one
20 vendor wants to disqualify another vendor, because
21 it's motivated by the wrong motivation. They want to
22 exclude the competition or become the sole vendor. We
23 couldn't agree with you more. That's not our position
24 in this.
25 Our position is that voters have the right
41
1 to fair elections. When the legislature enacts a law
2 to assure that, and to say we're going into a realm of
3 electronic voting, where there are substantial risks,
4 we in North Carolina have created the most secure
5 system possible for doing that, and we demand from
6 vendors, compliance with it before they can be
7 certified, who, if anyone, other than the state, which
8 is, we allege, making a mistake in how they were doing
9 it, has the right to come in?
10 Their procedures do not provide for a
11 challenge by a citizen to that process. So there is
12 no administrative remedy to exhaust, other than to
13 have your voice heard in the process in some meeting
14 or something.
15 Once they've decided it, then it is, under
16 the general law of this land, the Court that has
17 control over whether an agency has complied with the
18 statute.
19 Now, who can bring that? Only a citizen.
20 The legislature, I guess could bring it, I don't know.
21 I don't know. And perhaps the executive, but, in
22 fact, that law exists for the protection of citizens,
23 and for the process of voting.
24 THE COURT: I assume the Attorney General
25 could bring it on behalf of --
42
1 MR. BESKIND: But he represents them.
2 THE COURT: Well, then he would have a
3 problem, wouldn't he?
4 MR. BESKIND: Yeah, he would have a little
5 -- so the question is, in this situation where there
6 is no one else available, who comes in and says to the
7 State, you must abide by the law?
8 Because there is no money damages remedy in
9 the end. There is no way to redo that election that
10 occurred wrongfully, as we have already experienced in
11 North Carolina.
12 So, what we essentially are in front of you
13 saying is, Judge, let us just show you this statute,
14 let us show you why it is they have not complied, and
15 lets have you tell them they have to comply. If they
16 disagree with your ruling, there's another court they
17 can go to.
18 But ultimately, certainly this belongs in
19 the Court. It can't not -- there can't be an injury
20 without a remedy, and there is an injury to the public
21 when a statute for the protection of the public's
22 right to vote is not subject to review by anyone.
23 With regard to the -- the other question,
24 the sovereign immunity question, I think that's part
25 and parcel the same thing. The State has not
43
1 consented to be sued. I would grant you that the
2 State has not consented to be sued for money damages.
3 The State, by its very existence, consents to a court
4 overlooking it, and to a citizen bringing to the court
5 this question. It has to. It is fundamental in the
6 constitutional jurisprudence in this country, your
7 Honor, that the courts have supervision over the
8 executive, and over the legislature for whether the
9 things that they do comply with law.
10 It's -- we have the fundamental right of a
11 citizen to vote. We have a law that affects the right
12 of the citizens with regard to voting, and we have an
13 agency that we believe we can demonstrate is not
14 complying with that law.
15 It belongs here. And the -- and the
16 executive has an obligation to respond, I would
17 suggest, if it is not in compliance with the law.
18 I mean, under their view, the legislature
19 couldn't tell them they were in noncompliance with the
20 law, that the matter is solely in their hands, and
21 there is no check and balance on that. That's their
22 view, and that can't be right, your Honor. That can't
23 be right.
24 Let me -- let me ask you to take a look at
25 the statute for a second, because the State has made
44
1 an argument that I think merits about a minute or two
2 to look at, and so you'll understand what we're
3 saying.
4 If you look, if you have the first three
5 pages of the bill that was enacted in front of you,
6 the key phrase here is on page 3, section C, prior to
7 certifying a voting system. That's the phrase. It
8 says, the review that the State must do prior to
9 reviewing, certifying a voting system.
10 And one of the things it says, it shall
11 review all source code made available by the vendor
12 pursuant to this section, pursuant to this section.
13 Now, the State points you to another section
14 that it says we're relying on in another -- where it
15 talks about making source code available. But I want
16 to point you back to page 2, which is still, I
17 believe, in the same section, which is section one of
18 this act, where under number 6, it says, "with respect
19 to all voting systems using electronic means, that
20 vendor, that the vendor provide access to all of the
21 information required to be placed in escrow."
22 This is a pre-certification requirement.
23 You can't look elsewhere and say this doesn't say what
24 it says. What it says is you've got to give the State
25 this stuff before it certifies. And it says to the
45
1 State, it shall review it. These are mandatory
2 provisions all in the same section. We're not talking
3 about another section. There are other obligations
4 elsewhere.
5 What the State has acknowledged to you is
6 that it did not do these things. It has said it here
7 in open court. The State has said that we relied on
8 outside people who had these things to review.
9 I assure you that the State will not
10 represent to you, and cannot represent to you, that
11 they have all the source code that met the
12 requirements of this statute, because most of these
13 programs run using other people's software, and those
14 other people will not make their source code
15 available.
16 This act, by the legislature said no, no,
17 no, no, no. We're not buying the bug in some other
18 off-the-shelf piece of software that you build in. If
19 you want to include that software in our voting
20 machines, you will provide that software for our
21 review in advance.
22 That has not happened. They will not
23 represent to you that it has. And therefore, there
24 was no way that they could have conducted the nine-
25 point review required by the statute, as opposed to
46
1 the much slighter, lesser IT -- ITA review, which
2 outside agencies did. And we, of course, don't even
3 know what source code they were looking at.
4 So what I would suggest to you, your Honor,
5 is, it has been demonstrated in this courtroom in
6 front of you that what the law requires has not
7 happened, and has been demonstrated by the
8 representations of the State that it will happen
9 sometime before the contracts are entered into.
10 This is not just a slight point or anything
11 else. The goal here is to keep -- you want to talk
12 about saving people money. The only remedy here down
13 the road will be, to stop enjoin an election because
14 voting machines are improper machines.
15 I, you know, someone comes into court and
16 says, we can't have this election because these
17 machines don't meet the requirements. What will be
18 said by a judge then is, how come you didn't tell the
19 State this before they let the counties buy the
20 machines.
21 That's why we're here. That's why this is a
22 matter of immediate importance. You have an
23 opportunity to stop this freight train and tell these
24 folks that before certifying anybody, they have to do
25 what the statute says. And that once they do that,
47
1 they're back on track and going where they are headed.
2 You don't have to let this train wreck
3 happen down the road, where after the fact of a bug in
4 the software or after the fact of machines that are
5 bought that are not in compliance when some other
6 judge will have to face the question of what to do
7 about it when all the money's been spent.
8 And for that reason, we're asking you to act
9 now, to delay it necessarily for 10 days so that you
10 can have before you or whatever judge hears this
11 matter, a full hearing on the question of whether
12 there has been compliance with this statute.
13 Thank you.
14 MS. NICHOLS: Your Honor?
15 THE COURT: Let me -- let me kind of catch
16 up with Mr. Beskind, please.
17 Ms. Nichols, I'm coming to this disagreement
18 kind of late. All this is quite new to me. But
19 Mr. Beskind's reference to the -- I mean I understand
20 your argument. I understand his argument, I believe.
21 I understand your contentions, but if 163-165.7,
22 Subsection A sets forth the requirements of the
23 vendor, number 6 of which is to, with respect to all
24 voting systems using electronic means, that the vendor
25 provide access to all of any information required to
48
1 be placed in escrow by vendor pursuant to 163-165.9-A
2 for review, an examination by the State Board of
3 Elections.
4 And, if C says that prior to certifying a
5 voting system, the State Board of Elections shall
6 review or designate an independent expert to review
7 all source code made available by the vendor pursuant
8 it this section, and the vendor is required to make
9 all source code available for review prior to
10 certification, why has he misread that?
11 MS. NICHOLS: Because, if you look at all of
12 subpart 6 --
13 THE COURT: I'm sorry.
14 MS. NICHOLS: And put it in the context on
15 page 2.
16 THE COURT: Right. Subpart 6, what does a
17 vendor have to do.
18 MS. NICHOLS: And it lists the things that
19 need to be in the request for a proposal.
20 THE COURT: Okay.
21 MS. NICHOLS: And they go through a series
22 of things -- get down to six.
23 THE COURT: Right. It says with respect to
24 all voting systems using electronic means, that the
25 vendor provide access to all of any information
49
1 required to be placed in escrow by a vendor, pursuant
2 to 163-165.9-A for the review by the State Board of
3 Elections.
4 MS. NICHOLS: But the RFP needs to tell the
5 vendor that it's got to comply with 163-165.9-A and
6 the review and examination that they're talking about
7 there, is after the contract is awarded because .9-A
8 specifically refers to only vendors with contracts.
9 THE COURT: Well, the way I read this is
10 that all the information that you're going to have to
11 provide pursuant to a contract, if you enter into it,
12 you've got to provide it at an earlier time. I mean,
13 it can be read that way.
14 MS. NICHOLS: It can be. They certainly --
15 THE COURT: He's read it that way. I'm
16 beginning to think it can be read that way, and if it
17 can be read that way, when you get that -- this is A
18 and then we have a B, and then we have a C. When you
19 get to C in the same section, it says prior to
20 certifying a voting system the State Board shall
21 review or designate an independent expert to review
22 all source codes made available by the vendor,
23 pursuant to this section, and certify only those
24 voting systems compliant with State and Federal law.
25 MS. NICHOLS: And at that point, that review
50
1 is to look at the application code.
2 The way these systems work, they have the --
3 the voting counting, whether it's a paper ballot we
4 use in Wake County to feed into that machine, that
5 machine.
6 THE COURT: Right.
7 MS. NICHOLS: Or equipment like you might
8 use at a bank, an ATM type.
9 THE COURT: Sure.
10 MS. NICHOLS: They have applications code,
11 and when the most specific part of the statute dealing
12 with what has to be done before certification is dealt
13 with.
14 In subpart A, they're listing a number of
15 things, but one of them is the things that the RFP
16 should request. And for example, the vendor has to
17 separately agree with the purchasing county. Now,
18 that's not going to happen until after equipment has
19 been certified, that -- but they will provide
20 software, but they fail to debug, and then it talks
21 about what happens then.
22 The RFP has to put the vendor on notice and
23 ask them, will they comply with these things if
24 they're awarded the contract, and in some instances
25 they have to provide particular information. But with
51
1 respect to certifying the voting system itself, C is
2 the most specific and controlling part of the statute.
3 And it says, they look at the source code that the
4 vendor has provided, and they specifically look at it
5 to see if it meets these nine requirements.
6 In other words, they look at the code that
7 operates the voting equipment, but what I'm saying,
8 and what I think the argument factually is about, is
9 that voting vendors have code that they have modified
10 to make their equipment work, and that is looked at.
11 That is examined. That's the application code that's
12 part of the source code that is looked at before it's
13 certified.
14 But -- but there's other codes that they
15 haven't modified, that they've used from say Adobe or
16 Microsoft or some big company. Now, they have to
17 escrow that, and they have to make that available, and
18 they have to update it, and they have to debug it and
19 do all of these things down the road.
20 But because those things often are
21 tangential to the application code that actually
22 operates the machinery, in order to get certification,
23 the State Board does not have to analyze the source
24 code of the -- these third-party, off-the-shelf
25 vendors.
52
1 And I've got Mr. Ralph here who can explain
2 specifics. But for example, they may buy it so that
3 they can report the election results after they're
4 tabulated by the county. They may have some part that
5 allows them to transmit it in a certain way.
6 So -- but that is not the voting system
7 that's being certified. The heart of it is the
8 application code, and that's what the State Board has
9 looked at, and that's what C talks about. Because I
10 think the General Assembly understood that this was a
11 two-step process and they could ask, in the
12 certification, for all the information and set the
13 requirements for what the code had to do, and the
14 State Board needed to examine and make sure it could
15 do those things.
16 But then down the road, they wanted to have
17 material escrow that would take care of the rest of
18 what this vendor was selling to the counties.
19 And then, A-6, if you read all the way to
20 the end of the statute, it specifically talks about,
21 as provided in subdivision 9 of subsection B of the
22 section. And what subsection 9 talks about are the
23 procedures for review and examination of any
24 information placed in escrow by a vendor, and then who
25 would have access to it, and under what circumstances
53
1 they could have access to it.
2 But, the other part of this, that
3 Mr. Beskind slept over, is the fact that you have no
4 factual basis for concluding that the State Board has
5 not certified voting equipment.
6 THE COURT: I understand that. I understand
7 that. I mean, I have -- I have what's before me.
8 MS. NICHOLS: Yes, sir. And they haven't
9 provided you with anything other than hearsay and news
10 articles, and inferences. And before a TRO could be
11 entered of this dramatic affect, there'd have to be a
12 factual basis for doing so. They've offered their
13 lawyer's affidavit, and they've offered a verified
14 complaint where the factual matters are essentially
15 references to newspaper articles.
16 They haven't offered you an expert in code
17 review to say that -- or anyone involved in the
18 process, to say that the State Board has not in fact
19 done what the statute required.
20 And the State Board is a creature of statute
21 itself. It's charged with any number of duties and
22 responsibilities that the legislature has put on it.
23 And to say that there's no recourse should they not
24 comply, the legislature itself has the ultimate
25 recourse.
54
1 But they are -- I can assure you, doing
2 their utmost to comply with what the legislature
3 passed in this law as I understood it.
4 And finally, the point about there will be
5 no harm and the federal government doesn't really want
6 money back. I'd like to hand up, if I could, a copy
7 of a statute that says, the State shall pay back any
8 money that it got to -- to put out to pasture the
9 lever and punch card voting equipment.
10 THE COURT: Okay.
11 MS. NICHOLS: And finally, we did not
12 attach, although we've provided to plaintiff, copies
13 of the State Board's order. Ms. McCloy herself was at
14 the meeting and heard the discussion, but the State
15 Board typically does a written order to -- to spell
16 out exactly what has to be done with respect to the
17 escrowing of the code. And that was not attached to
18 the brief. I wanted to make sure you have a copy of
19 that as well.
20 THE COURT: I understand. All right.
21 MR. BESKIND: Your Honor, with regard to
22 that last document, may I make a comment?
23 THE COURT: Sure.
24 MR. BESKIND: If you'll turn to the findings
25 of fact, number one, you'll see that it says the date
55
1 by which code must be escrowed is December 22nd,
2 that's our point, it hasn't been.
3 And I do not believe that the State's
4 attorneys, as officers of the Court, will tell you
5 that all of the escrows have been made by the two
6 certified vendors. That's the issue before the Court.
7 Have they been made? I think they will not make that
8 representation to you, because they cannot.
9 MS. NICHOLS: Your Honor, may I say one more
10 thing? I don't want to get in ping pong, but this
11 really is critically important.
12 This statute was written first by a study
13 committee, and went through the legislature. It,
14 perhaps, could have been written more clearly, but
15 they carefully chose different parts of the statute
16 where they talk about code that needs to be put in
17 escrow and code that needs to be put under review.
18 And in the statute dealing with certifying a
19 system, they talk about reviewing the code made
20 available by the vendor for the purposes of assuring
21 compliance with those nine things.
22 Elsewhere, in several different ways, they
23 talk about escrowing, just like in those list of eight
24 things, the first thing they talk about is the bond or
25 letter of credit. They don't require -- I believe,
56
1 they did require a application, a smaller application
2 bond, but they didn't require the 7.5 million dollar
3 bond be posted that could cover the cost of conducting
4 a new statewide presidential election in order to
5 demonstrate compliance with the RFP. That comes after
6 they're awarded the contract.
7 And the same is true with the code. The
8 legislature recognizes there's a process and had very
9 specific language for dealing with the code. And the
10 review of it, and then later the escrow of it, thank
11 you.
12 THE COURT: Well, all I can say is that in
13 the last hour and a half, I've had a brief education
14 on Senate Bill 223, frankly.
15 What you've asked me to do is very dramatic
16 and far reaching order to resolve an issue that I did
17 not even know would be here, nor that I realized would
18 be as complicated as it is.
19 I certainly am not prepared to issue a
20 restraining order today. Under these circumstances, I
21 never issue a restraining order unless I'm absolutely
22 satisfied that it's the correct thing to do.
23 So I still -- even if your interpretation of
24 the statute is as you contend, counsel, I still
25 struggle with whether or not you can raise it at this
57
1 juncture of the process. And so I need -- I need to
2 have that briefed. I need to have that briefed.
3 I need to have the issue of standing
4 briefed. I need to have the issue of sovereign
5 immunity or sovereign -- not sovereign immunity,
6 governmental immunity, as it plays into this issue of
7 standing be briefed.
8 Unless you can satisfy me of that, even if
9 I'm satisfied you properly interpret the statute, you
10 will not get any relief from this Court.
11 So I guess we need to set this for a hearing
12 on preliminary injunction or a mandamus of the
13 preliminary nature. Is there some drop dead date that
14 I need to worry about?
15 MR. ZIMMERMAN: Your Honor, as the
16 defendants have demonstrated, the date at which
17 they're going to enter into contracts with the vendors
18 is December 23rd, I believe, and it is at that point
19 that counties will then have the authority to enter
20 into contracts with the vendors.
21 To the extent that we can schedule a hearing
22 prior to that date, I think that -- that would be a
23 necessary step.
24 THE COURT: Well, I tell you what, let me
25 take about a 10-minute break, and I'll come back and
58
1 we'll see if we can -- I think I probably need to set
2 this for sometime next week and to make some
3 definitive ruling about it and give y'all an
4 opportunity to shore up your positions on some of
5 these legal positions you've taken and give me a
6 chance to do a little bit of in-depth research on my
7 own, and also based on what you've given me.
8 I need to go check my schedule about what
9 next week looks like. Anybody have a preference?
10 MS. NICHOLS: I can't do it on the 19th.
11 THE COURT: Okay. Well, the 19th is out.
12 Got a preference?
13 MS. NICHOLS: Later in the week would be
14 better.
15 THE COURT: Well, we could all come over
16 here on Christmas if you want to.
17 MS. NICHOLS: But I have obligations, family
18 obligations on Monday and possibly Tuesday, that I
19 would rather do it later in the week.
20 I have a son having --
21 THE COURT: Well, I really don't want to do
22 it much past Wednesday folks. That's getting kind of
23 close to these deadlines and things.
24 MR. ZIMMERMAN: Your Honor, the plaintiff
25 will be available any day that you select next week.
59
1 THE COURT: All right. We can look at
2 Wednesday and we can see what we're looking at. That
3 way I can walk down the hall and see what judges are
4 not here and the ones who aren't here, that will be
5 the one I assign to hear this matter. Give me about
6 -- we'll be in recess for about 10 minutes.
7 (Short recess taken.)
8 THE COURT: All right, folks, we're back in
9 session. I've looked at my calendar and I'll hear
10 this. I won't impose it on anybody else -- well, I
11 mean, it would take them two hours to get where I am
12 right now and then, you know. I think Wednesday is
13 probably the best time, say 2:00.
14 I obviously would like those issues briefed,
15 if you can find some authority for your -- your
16 contentions or legal precedent about your right to
17 bring this action and your standing to do so, and the
18 State's right not to have to deal with such a lawsuit
19 and its ability to preclude that under various
20 principles, including either governmental or sovereign
21 immunity and the absence of standing, including the
22 absence of a justiciable issue, if you make such a
23 contention.
24 Also, since everybody had a little bit of
25 short notice here, if -- if you want to spell out in
60
1 some specificity exactly the sort of the narrow
2 interpretation of the statute that y'all find yourself
3 disagreeing about, at least for preservation of the
4 record in the court proceedings, so the public at
5 large, if the public cares, could sort of understand
6 what this disagreement is about with regard to the
7 interpretation of the statute, I invite you to do
8 that.
9 In the event that you -- you also need to --
10 to brief, if you haven't, and I haven't read anything
11 that you filed, any authority that you have that
12 mandamus lies in this situation. And the contrary,
13 that mandamus is not appropriate.
14 You also need to address with your clients,
15 the question of bond, because I do believe that what
16 you asked me to do is -- is dramatic and it could
17 impose some significant financial burden, potentially
18 on the State. And I certainly note that the, at least
19 the Congress has declared that states will not repay
20 those funds, those federal funds expended for purposes
21 set forth in the -- in Section 15302 of the U.S. code.
22 It references replacement of punch card and lever
23 voting machines, and that sort of thing. So it's
24 pretty clear they want their money back if it's not
25 properly used.
61
1 And so I -- if you -- if you can't post a
2 bond, then we're engaged in some kind of academic
3 discussion of no practical consequence.
4 If you anticipate -- sometimes it's helpful
5 to have some kind of presentation by way of evidence
6 or something that looks like evidence, sounds like
7 evidence, you know. If you expect me to make some
8 finding of fact, I'll have to have some evidence of
9 record.
10 I will not take testimony. If you rely upon
11 evidence of record to support your contentions, then
12 please do it by way of affidavit.
13 MR. BESKIND: On that, may I be heard for a
14 second, your Honor?
15 THE COURT: Sure.
16 MR. BESKIND: Quick question. Would you
17 shorten -- allow a shortened time period for a very
18 short set of requests for admissions, which would be a
19 substitute for evidence for this purpose, which I
20 think would greatly shorten up the necessity of
21 burdening the record with a lot of documents and some
22 other things? If we could have, I'm talking about
23 less than 10, for sure, very short requests for
24 admissions that we would address the State and ask
25 that they respond to by 5:00 p.m. the day before the
62
1 hearing.
2 THE COURT: I'm sorry, 5:00 p.m. the day
3 before the hearing?
4 MR. BESKIND: Yeah, I mean, that's the most
5 time we can give them. It would be, you know, admit
6 that you did do this or didn't do this. Some things
7 just of that nature, that are very quick. And
8 hopefully, if the answers are yes, would relieve us
9 from having to produce any evidence.
10 MS. NICHOLS: Your Honor, I'm not sure how
11 that will shorten the process. I understand the
12 concept if we admit it thus and so wouldn't have to
13 argue about it. But he's got a craft them in a way
14 that we can say yes or no to and get the State to sign
15 off on. And I just don't think that will be the most
16 productive use of our time between now and Wednesday
17 to get you the information you need.
18 THE COURT: Okay. I'll allow you to -- I
19 usually try to make things as simple as I can, and
20 sometimes cases defy simplicity.
21 I'm not -- your request is denied. However,
22 I will allow you to tender up to 10 questions that you
23 would -- that you would ask the Court to require of
24 the State to answer at that hearing.
25 MR. BESKIND: When should they be to the
63
1 defendants?
2 THE COURT: By -- well, by 5:00 on the day
3 before the hearing.
4 MR. BESKIND: Okay.
5 THE COURT: And I will allow you to ask the
6 plaintiff 10 -- the Court to ask the plaintiff 10
7 questions, up to 10 questions that you'd be permitted
8 -- that -- that you would request that I require the
9 plaintiff to respond to. And both sides need to come
10 prepared to answer those questions in the event I
11 decide to require it.
12 MR. BESKIND: Your Honor, we'd be prepared
13 to have those to the State by the end of the day on
14 Monday, if they would be prepared to have those to us.
15 THE COURT: Well, it sounds like Ms. Nichols
16 is going to have personal --
17 MR. BESKIND: Well, I was thinking there
18 were two lawyers involved.
19 THE COURT: Well, there are, and if that
20 would be helpful that would be fine.
21 MR. BESKIND: Well, the State could very
22 well end up in the unfortunate position of hearing the
23 question for the first time, because it's after the
24 close of business on Tuesday and wouldn't be in a
25 position to answer it.
64
1 THE COURT: Well, I'm just going to say --
2 I'm not going to allow -- I'm -- I'm not going to
3 allow either side to interpose requests for
4 admissions; however, if there's information that you
5 think that I should be told, you tell me what those
6 questions are and if I think you're right, I will
7 require the State to provide that information or
8 require your client to provide that information at the
9 time of the hearing, but I'm not going to compel it.
10 MR. BESKIND: Would you like --
11 THE COURT: And if you're not in a position
12 to either answer those questions or provide that
13 information, then you'll just tell me you're not and
14 live with the consequences of that. So -- which may
15 be of no consequence or may be of some significant
16 consequence.
17 But I'm not going to -- we're not going to
18 get into this -- this -- we don't have enough time to
19 do this as you would expect in terms of the request
20 for admissions, so.
21 MS. NICHOLS: Your Honor, one other thing
22 that may come up, and I've got a -- it would depend on
23 the questions and the information that we may want to
24 offer to you, we got to figure out what parts of it
25 are still to be confidential because of the
65
1 procurement and the possible protest. It may be that
2 we'll ask to supply some information in camera.
3 MR. BESKIND: Yeah, and your Honor, along
4 those lines, that's fine. If the State doesn't feel
5 it can provide it to us, we don't mind you looking at
6 if first and making a determination about whether we
7 should receive it.
8 The other question is do you want to set a
9 time for the exchange of affidavits and briefs so that
10 that's all done sometime in advance so that you also
11 can get it sometime in advance of the hearing?
12 THE COURT: All right. Well, I'm going to
13 give you till 5:00 on Tuesday the 20th. We'll have a
14 2:00 hearing on Wednesday the 21st, so you're going to
15 have the morning of the -- the morning to get ready,
16 if you -- I mean, obviously I would encourage both
17 sides to provide, as quickly as you can, to the other
18 side, your request and also your information, lest you
19 face consequences of waiting too late, and then asking
20 too much and overwhelming the opponent and having to
21 be sympathetic to the person put in that position.
22 I wish this was not here, okay, but it is,
23 so I'll just deal with it. And I -- and I am just
24 beginning to grasp what you're all talking about, and
25 it requires a lot of expertise that I am not familiar
66
1 with. And you're talking about various types of
2 source codes and application codes and all that kind
3 of stuff, and it may well be that an affidavit or two
4 from an expert about that will be very helpful to help
5 me better understand how you are in compliance with
6 the statute, as you interpret it, and also how they
7 have misinterpreted it from both sides.
8 But, even given that, I mean, the -- my
9 response is so what, unless you tell me how you get to
10 be here and how you get to have the relief you seek,
11 even if I agree with you. And I'm troubled as much by
12 that as you can tell, as I am with who's right on this
13 interpretation of the statute.
14 So, good enough, I'll see everybody at 2:00
15 on Wednesday. Thank you. We're going to meet in this
16 courtroom again.
17 (End of proceedings.)
18
19
20
21
22
23
24
25
67
1 STATE OF NORTH CAROLINA)
2 )
3 COUNTY OF WAKE )
4 I, CARRIE E. RICE, RPR, the officer before
5 whom the foregoing proceeding was taken, do hereby
6 certify that said hearing, pages _______ through
7 _______ inclusive, is a true, correct and verbatim
8 transcript of said proceeding.
9
10 I FURTHER CERTIFY that I am neither counsel
11 for, related to, nor employed by any of the parties to
12 the action in which this proceeding was heard; and
13 further, that I am not financially or otherwise
14 interested in the outcome of the action.
15
16 IN WITNESS WHEREOF, I have hereunto set my
17 hand, this _____ day of ________, 200__.
18
19
20
CARRIE E. RICE
21 Registered Professional Reporter
22
23
24
25