Exhibit 3217 and Patient-Harm Evidence Hearings
87 linesSAN JOSE, CALIFORNIA OCTOBER 14, 2021 P R O C E E D I N G S
(COURT CONVENED AT 8:35 A.M.)
(JURY OUT AT 8:35 A.M.)
JUDGE DAVILA: THANK YOU FOR YOUR COURTESY. WE'RE ON THE RECORD IN THE HOLMES MATTER. ALL COUNSEL ARE PRESENT AND MS. HOLMES IS PRESENT. WE'RE OUTSIDE OF THE PRESENCE OF THE JURY. AND I THINK COUNSEL WANTED TO TALK ABOUT A FILING, A DEFENSE FILING LAST NIGHT I THINK IT WAS, IT'S DOCUMENT 1086. YES, MR. LOOBY, YOU'RE RISING TO SPEAK TO THIS?
MR. LOOBY: I AM, YOUR HONOR.
JUDGE DAVILA: FIRST, LET'S GET A THRESHOLD QUESTION ANSWERED. IS THE GOVERNMENT INTENDING TO DO SOMETHING WITH EXHIBIT 3217?
MR. SCHENK: GOOD MORNING, YOUR HONOR. YES, WE ARE. THE EXHIBIT, IF THE COURT HAS A COPY IN FRONT OF IT, HAS SORT OF TWO PARTS TO IT. THE FIRST IS AN EMAIL SENT FROM HEATHER KING TO DR. DHAWAN ATTACHING THE DOCUMENT AND IT HAS SOME TEXT IN THE SUBJECT LINE, AND THEN THE FOLLOWING PAGES ARE THE DOCUMENT FROM CMS.
JUDGE DAVILA: OKAY. I THINK I HAVE IT -- I'M SORRY, GO AHEAD.
MR. SCHENK: IT IS THE GOVERNMENT'S INTENTION TO ADMIT BOTH THE EMAIL AND THE ATTACHMENT AND TODAY TO ASK DR. DHAWAN, OR WHEN DR. DHAWAN TESTIFIES, TO ASK DR. DHAWAN IF MS. KING SENT HIM THE ATTACHMENT, IF THAT WAS THE FIRST TIME THAT HE HAD HEARD ABOUT CMS'S FINDINGS, IF HE REVIEWED THE INFORMATION IN IT, AND TO ASK THE COURT TO PROVISIONALLY ADMIT THE ATTACHMENT TODAY. I DO NOT INTEND TO PUBLISH THE ATTACHMENT WITH DR. DHAWAN. IT CONTAINS SOME FINDINGS OF CMS, INCLUDING COMMENTS REGARDING THE PRACTICE OF VOIDING TESTS AT THERANOS. YOUR HONOR RULED AT THE MOTION IN LIMINE STAGE SORT OF TWO THINGS THAT ARE RELEVANT FOR THIS DISCUSSION. FIRST, THAT THE CMS FINDINGS ARE RELEVANT, BUT THAT THE PRACTICE OF VOIDING TESTS REQUIRED SOME FOUNDATION BEFORE THE GOVERNMENT COULD ADMIT IT, THE QUESTION OF VOLUNTARINESS AND ALSO THE RELEVANCE OF THAT TIMEFRAME WHEN THE TESTS WERE VOIDED. DR. DHAWAN IS NOT THE WITNESS TO LAY THAT FOUNDATION. THAT'S WHY I DON'T INTEND TO PUBLISH THE UNDERLYING CONTENT OF THE CMS REPORT AT THIS POINT. BUT I DON'T THINK THAT IT'S EXCLUDABLE. I THINK IT IS PROPERLY ADMITTED EVIDENCE UNDER THE COURT'S RULING, AND I CAN PROVIDE SOME ADDITIONAL ARGUMENTS ON THAT, BUT I DON'T WANT TO HIJACK THE CONVERSATION IF THE COURT NOW WANTS TO TURN TO THE DEFENSE.
JUDGE DAVILA: RIGHT. THANK YOU. I JUST WANTED TO DETERMINE WHETHER OR NOT YOU WERE SEEKING TO ADMIT IT, THE PURPOSE FOR ADMISSION. LET ME ASK ALSO, IS IT ANTICIPATED THIS WITNESS WILL TESTIFY TODAY?
MR. SCHENK: YES, YOUR HONOR. I BELIEVE THAT WE WILL FINISH MR. JHAVERI TODAY, AND THE COURT SUGGESTED WE WILL GO UNTIL 3:00 TODAY.
JUDGE DAVILA: CORRECT.
MR. SCHENK: AND I ANTICIPATE THERE WILL BE TIME AFTER MR. JHAVERI FOR DR. DHAWAN TO TAKE THE STAND AND MAYBE BEGIN OR FINISH THE DIRECT DEPENDING ON WHEN WE START. I ALSO HAD A THOUGHT I WANTED TO SHARE ON THE 1:30 APPEARANCE BEFORE JUDGE COUSINS, BUT WE CAN TURN TO THAT AFTER.
JUDGE DAVILA: WELL, WHY DON'T WE TALK ABOUT THAT NOW, RIGHT, IF YOU DON'T MIND? I SAID I WOULD BREAK TO ALLOW COUNSEL TO PARTICIPATE IN THAT. WHAT ARE YOUR THOUGHTS?
MR. SCHENK: WE TALKED ABOUT IT, AND I THINK FROM THE GOVERNMENT'S PERSPECTIVE, IF THE COURT ALLOWED SOME PEOPLE, MS. VOLKAR AND MR. BOSTIC, TO ATTEND THAT HEARING REMOTELY, BUT TO LEAVE THE COURTROOM FOR IT. AND I UNDERSTAND THAT MR. CLINE ALSO INTENDS TO LEAVE THE COURTROOM FOR IT. BUT TO CONTINUE THE TESTIMONY HERE IN TRIAL. WE HAVE THE JURY AND WE HAVE TRANSCRIPT TIME AVAILABLE. I THINK, THOUGH, IT WOULD BE THE GOVERNMENT'S REQUEST THAT MAYBE THE COURT SAY TO THE JURY THAT THERE'S ANOTHER HEARING GOING ON OR SOMETHING LIKE THAT SO THE JURY DOESN'T WONDER WHY THERE ARE COUNSEL WHO HAVE BEEN PRESENT EVERY DAY WHO ARE NOW ABSENT. BUT I THINK THAT WOULD BE THE WAY TO MAXIMIZE OUR TIME.
MR. CLINE: WE'RE FINE WITH THAT.
JUDGE DAVILA: THANK YOU. MR. CLINE?
MR. CLINE: WE'RE FINE WITH THAT APPROACH. I'LL STEP OUT AT THE APPROPRIATE TIME, AND IF THE COURT WANTS TO TELL THE JURY WHAT IS GOING ON, THAT'S FINE.
JUDGE DAVILA: AND THAT'S A 1:30 HEARING?
MR. SCHENK: YES, YOUR HONOR.
JUDGE DAVILA: OKAY. I DON'T KNOW WHERE THAT COMPORTS WITH OUR SCHEDULE AND BREAKS AS WELL, AND WE'LL SEE WHERE THAT MEASURES.
MR. CLINE: BUT THE HEARING INVOLVES TWO MOTIONS AND IT MAY TAKE A WHILE, SO IF THE COURT WERE TO BREAK FOR THAT, I THINK IT WOULD SERIOUSLY INTERRUPT THE PROCEEDINGS. WE'RE FINE WITH MR. SCHENK'S PROPOSAL.
JUDGE DAVILA: OKAY. ALL RIGHT. I WAS TALKING ABOUT THE NATURAL BREAK WHEN YOU LEAVE THE COURTROOM, BUT WE'LL SEE HOW THAT PANS OUT. ALL RIGHT. THANK YOU FOR THE HEADS UP ON THAT. THANK YOU. OKAY. WITH THAT FOUNDATION, DO YOU CONCEDE THE MOTION?
MR. LOOBY: NO, YOUR HONOR. IT SOUNDS LIKE THE GOVERNMENT DOESN'T REALLY NEED TO MOVE THE ADMISSION OF THIS EXHIBIT WITH THIS WITNESS IF THEY'RE NOT INTENDING TO PUBLISH IT OR ASK HIM KIND OF QUESTIONS ABOUT THE PARTICULARS IN IT. SO THAT'S ONE OF THE REASONS WHY WE COULD DEFER PERHAPS THE ADMISSIBILITY OF IT. WE DISAGREE THAT IT'S ADMISSIBLE WHOLESALE. AS WE EXPLAINED IN LAST NIGHT'S PLEADING, THERE'S A COUPLE OF OBSTACLES TO THAT. THERE'S THE HEARSAY ISSUES AND THEN THE 401, 403 BALANCING TEST, AND THEN THE THIRD ISSUE OF THE VOIDING TESTS AS WELL THE GOVERNMENT HAS YET TO LAY A FOUNDATION UNDER THE COURT'S IN LIMINE ORDER.
JUDGE DAVILA: SO -- THANK YOU. SO, MR. SCHENK, IS IT YOUR INTENT THEN TO INTRODUCE THE ENTIRETY OF THE DOCUMENT AND ALL OF ITS CONTENTS WITH SOME REDACTIONS?
MR. SCHENK: I INTEND TO OFFER IT AND ONLY PUBLISH THE FIRST PAGE, TO NOT INSERT REDACTIONS ON THE CONTENT OF THE LETTER. THERE ARE SEVERAL REFERENCES TO VOIDED TESTS IN THERE, AND I THINK THE BETTER PRACTICE WOULD BE FOR ME TO NOT PUBLISH IT, NOT ASK ANY QUESTIONS ABOUT THE CONTENT OF THE LETTER TO DR. DHAWAN, TO ASK HIM QUESTIONS ONLY ABOUT THE EMAIL THAT HAS VERY LITTLE CONTENT IN IT, AND THEN TO SAVE THE QUESTION ABOUT THE DOCUMENT COMING IN, EITHER THE ATTACHMENT -- THE ATTACHMENT EITHER COMING IN WHOLESALE OR LATER WITH REDACTIONS, DEPENDING ON HOW THE COURT INTERPRETS THE FOUNDATION THAT THE GOVERNMENT LAYS IN THE FUTURE.
JUDGE DAVILA: WITH ANOTHER WITNESS?
MR. SCHENK: WITH A DIFFERENT WITNESS.
JUDGE DAVILA: WITH A DIFFERENT WITNESS. I SEE.
MR. LOOBY: RIGHT. I GUESS WITHOUT KNOWING WHAT TYPE OF FOUNDATION THEY WOULD LAY WITH A DIFFERENT WITNESS, IT'S HARD TO SAY WHETHER OR NOT THEY'RE OFFERING THIS FOR THE TRUTH OF THE MATTER, WHICH I THINK, YOU KNOW, SOME OTHER WITNESS COULD MAYBE SPEAK TO. I MEAN, DR. DHAWAN PROBABLY WOULDN'T. BUT REGARDLESS OF THAT, I THINK IT POSES PRETTY BIG HEARSAY ISSUES, AND I THINK COMPARING IT TO THE JANUARY 2016 REPORT IS INSTRUCTIVE ON THAT FRONT. YOUR HONOR HAS HELD THAT THAT REPORT IS ADMISSIBLE UNDER RULE 803(8)(A)(2) AS A MATTER OBSERVED WHILE UNDER A DUTY TO REPORT. THE LETTER IS NOT THAT. THE LETTER IS THE CULMINATION OF A ROUND OF COMMISSIONS AND CORRESPONDENCE BETWEEN CMS AND THERANOS, AND IT'S A NOTICE OF IMPOSITION OF SANCTIONS, THE FACT OF WHICH IS RELEVANT AND ADMISSIBLE UNDER THE COURT'S ORDER. BUT THE HEARSAY STATEMENT FROM CMS, HEARSAY STATEMENTS FROM CMS WITNESS KAREN FULLER, WHO IS THE SIGNATORY OF THE LETTER, I THINK ARE NOT COVERED BY THE COURT'S PRIOR ORDERS. IT'S REALLY, I THINK, INSTRUCTIVE OR A USEFUL WAY TO THINK ABOUT IT AS MORE OF AN ADJUDICATION OF THE AGENCY AND THE STRUCTURE.
JUDGE DAVILA: IT SEEMS LIKE -- PARDON ME FOR INTERRUPTING YOU.
MR. LOOBY: YES.
JUDGE DAVILA: IT SEEMS THAT, AND I'LL POINT THIS OUT AND RAISE IT, IT SOUNDS LIKE WE'RE GOING TO GET TO THE REAL ISSUES OF ADMISSIONS AT SOME TIME LATER.
MR. LOOBY: YEAH.
JUDGE DAVILA: AND SO IT WILL BE DEFERRED -- SO I GUESS THE OVERARCHING QUESTION IS, DO WE EVEN NEED TO ADMIT IT TODAY CONDITIONALLY AND CAN WE DEFER THAT WHOLE RULING UNTIL LATER? AND IF IT'S PROVISIONALLY ADMITTED, BUT NOT PUBLISHED, AND EVERYONE RESERVES THEIR RIGHTS TO CHALLENGE ANY PUBLICATION, WE CAN DO IT THAT WAY AS WELL. BUT I LOOK AT -- A COUPLE OF THINGS JUMP OUT AT ME WHEN I LOOK AT THIS -- AND I'M LOOKING AT MR. SCHENK HERE -- IT DOES SEEM THAT THERE'S A LOT OF THE USE OF THE WORD CREDIBLE, NOT CREDIBLE, NOT CREDIBLE. JUST FOR OUR FUTURE CONVERSATION, THAT SEEMS TO BE MORE OF A SUMMATION, ANALYSIS OF AN OPINION AS OPPOSED TO JUST THE FINDING. SO THAT'S ONE OF THE CONCERNS I HAD, AND IT'S A 403 CONCERN I SUPPOSE, AND THERE'S CONSISTENT USE OF THAT THROUGHOUT THE DOCUMENT. AND I THINK THAT'S WHAT YOU'RE SPEAKING TO, ONE OF THE THINGS YOU'RE SPEAKING TO.
MR. LOOBY: YEAH. IN PARTICULAR UNDER RULE 403, WE THINK THAT POSES AN ACUTE RISK OF UNFAIR PREJUDICE. OBVIOUSLY THE WORD "CREDIBILITY" IS PART OF THE ANALYSIS THAT CMS DOES WHEN IT EVALUATES A COMPANY'S RESPONSE. BUT IN THE CONTEXT OF A CRIMINAL TRIAL, REPEATED, YOU KNOW, ADMONITIONS OR STATEMENTS THAT THE AGENCY FOUND THERANOS NOT CREDIBLE COULD EASILY BE TAKEN OUT OF CONTEXT AND PREJUDICE MS. HOLMES. AND THEN I WILL ALSO ADD, YOUR HONOR, THAT THE -- AT LEAST FOR KIND OF WHICH FINDINGS WITHIN THE CMS REPORT THE GOVERNMENT INTENDS TO EVEN PUT AT ISSUE IN THE CASE, IT WAS IN -- YOUR HONOR'S PRETRIAL RULING HAD INSTRUCTED THE GOVERNMENT TO PROVIDE THE DEFENSE WITH NOTICE OF WHICH DEFICIENCIES ARE IN OR ARE OUT, AND WE CAN REVISIT THE ADMISSIBILITY OF THE CMS REPORT ITSELF IN THAT CONTEXT, AND THEY HAVE NOT DONE SO. AND THIS LETTER KIND OF GOES, YOU KNOW, FROM TOP TO BOTTOM THROUGH A LOT OF DEFICIENCIES THAT MAY NOT BE RELEVANT AT ALL IN THE CASE, AND SO THAT'S ANOTHER 403 CONCERN THAT WE HAVE, INCLUDING THAT THEY RELATE TO TESTS NOT AT ISSUE IN THE INDICTMENT, INCLUDING THAT THEY RELATE TO ISSUES THAT THE GOVERNMENT HAS NOT EVEN PROFFERED ARE RELEVANT UNDER ITS THEORY OF ADMISSIBILITY FOR THE CMS SANCTIONS AND FINDINGS TO BEGIN WITH. SO I THINK IT'S VERY PREMATURE TO ADMIT THIS CONDITIONALLY AND WE SUBMIT THAT IT SHOULDN'T BE ADMITTED AND WE DON'T THINK THAT THEY WILL BE ABLE TO LAY THE PROPER FOUNDATION FOR IT NOW OR LATER GIVEN THE HEARSAY AND RULE 403 CONCERNS, BUT CERTAINLY NOT TODAY WITH THIS WITNESS WHO IT SOUNDS LIKE IS NOT GOING TO BE SPEAKING TO THE CONTENT OF THE LETTER MUCH AT ALL.
JUDGE DAVILA: THANK YOU. YOU DON'T PART COMPANY WITH MR. SCHENK ASKING THE WITNESS ABOUT THE EMAIL, THE FIRST PAGE?
MR. LOOBY: NO, YOUR HONOR. THE EMAIL ITSELF WE WOULDN'T OBJECT TO. IT'S THE ATTACHMENT.
JUDGE DAVILA: AND THE WITNESS TESTIFYING THAT THE WITNESS DID RECEIVE THE DOCUMENT, WHATEVER IT IS, BUT RECEIVED SOMETHING?
MR. LOOBY: CORRECT. AND --
JUDGE DAVILA: I THINK THAT'S WHAT MR. SCHENK WANTS TO DO, AT LEAST TODAY, AT A MINIMUM.
MR. SCHENK: YES, YOUR HONOR.
JUDGE DAVILA: RIGHT.
MR. LOOBY: RIGHT. I THINK WE WOULDN'T OBJECT TO THAT. THERE ARE PERHAPS SOME FOLLOW-ON QUESTIONS ABOUT KIND OF THE REPERCUSSIONS TO DR. DHAWAN OF THE IMPOSITION OF SANCTIONS AND THE EFFECTS ON HIS, LIKE, PROFESSIONAL OBLIGATIONS AND REPUTATION THAT WE MIGHT OBJECT TO IF THE GOVERNMENT GOES INTO IT. BUT AS TO KIND OF, YOU RECEIVED THE EMAIL, THIS IS WHAT THE EMAIL CONVEYED, THIS IS HOW YOU FOUND OUT ABOUT THE RESULTS OF THE INSPECTION, WE WOULDN'T OBJECT TO THAT.
JUDGE DAVILA: OKAY. MR. SCHENK?
MR. SCHENK: YOUR HONOR, THE DEFENSE IS ARGUING AND THE COURT ASKED QUESTIONS ABOUT THE USE OF THE WORD "CREDIBLE" OR CREDIBILITY FINDINGS IN THE LETTER AND WHETHER IT'S DIFFERENT THAN AT THE MOTION IN LIMINE STAGE WHEN THE COURT FOUND CMS FINDINGS UNDER THE 403 BALANCING TO BE MORE PROBATIVE. THE COURT WONDERS AND THE DEFENSE ARGUES IF THAT HAS SHIFTED NOW, AND IF, IN PARTICULAR, THE USE OF THE WORD "CREDIBLE" HAS AFFECTED THAT BALANCING. WE WOULD ARGUE TO THE COURT IT HASN'T BECAUSE OF DEVELOPMENTS DURING THE TRIAL. THE COURT RULED PRETRIAL THAT THE FINDINGS OF CMS ARE ADMISSIBLE AND THEY COME IN FOR PURPOSES BECAUSE THE GOVERNMENT IS NOT ARGUING TO THE JURY, CONVICT MS. HOLMES BECAUSE SHE VIOLATED CIVIL REGULATIONS. AND WHEN THE GOVERNMENT IS NOT ADMITTING IT FOR THAT PURPOSE, BUT RATHER FOR PURPOSES LIKE KNOWLEDGE AND INTENT, THE COURT OUTLINED IN ITS MOTION IN LIMINE IT IS RELEVANT. THE DEFENSE HAD THE BENEFIT OF THAT PRETRIAL ORDER AS WELL.
THEY KNEW THE WAY THAT THE GOVERNMENT WAS ALLOWED TO LITIGATE THE CASE. THEY THEN INTRODUCED CMS REGULATIONS IN THIS TRIAL, THE ACTUAL REGULATIONS, AND WENT THROUGH THEM WITH DR. ROSENDORFF AND ASKED IF HE COMPLIED WITH CERTAIN REGULATIONS. SO TO NOW EXCLUDE THE COMMENTS THAT CMS MADE ABOUT WHETHER THAT WAS ACTUALLY TRUE, WHETHER THERE WAS A SUFFICIENT BASIS IN FACT TO BELIEVE THAT COMPLIANCE WITH THE REGULATIONS HAD BEEN ACHIEVED, TO NOW DENY THE GOVERNMENT THE ABILITY TO PUT THAT IN GIVES THE DEFENSE THE BENEFIT OF THE COURT'S PRETRIAL RULING TO ARGUE ABOUT THE RELEVANCE OF THESE REGULATIONS. FOR INSTANCE, IF THE COURT HAD GONE THE OTHER WAY ON CMS, IT WOULD HAVE BEEN MUCH HARDER TO ARGUE THAT THE REGULATIONS ARE RELEVANT. SO NOW THE DEFENSE HAS PUT THOSE REGULATIONS IN, AND TO SUGGEST THAT THE GOVERNMENT CAN'T NOW FOLLOW UP EVEN WITH THESE CREDIBILITY FINDINGS IS TO LEAVE THE JURY WITH A MISIMPRESSION.
THERE ACTUALLY NOW HAS BEEN DIALOGUE BACK AND FORTH BETWEEN THERANOS AND THE REGULATOR THAT IS SUMMARIZED IN THE ATTACHMENT TO THIS EXHIBIT THAT SUGGESTS THE TYPE OF ARGUMENT THAT THE DEFENSE WAS TRYING TO SUGGEST THROUGH ITS CROSS OF DR. ROSENDORFF ISN'T TRUE, IS NOT SUPPORTED BY THE EVIDENCE. AND IT IS BECAUSE OF THAT, IT IS BECAUSE OF THE CROSS THAT THE DEFENSE HAS ELICITED THAT THE 403 BALANCING SHIFTS A LITTLE BIT. AND THE COURT MIGHT BE RIGHT, IF THE DEFENSE HAD NOT ARGUED THE CMS REGS IN THE WAY THAT THEY HAVE, THE BALANCING UNDER 403 FOR THIS DOCUMENT WOULD BE DIFFERENT. BUT THAT ISN'T WHERE WE FIND OURSELVES. WHERE WE FIND OURSELVES IS THAT THE DEFENSE TOOK ADVANTAGE OF THE COURT'S RULING AT THE MOTIONS IN LIMINE STAGE TO OFFER CMS REGS AND TO MAKE ARGUMENTS TO THE JURY ON ITS CROSS BASED UPON THEM, AND THE GOVERNMENT SHOULD HAVE THAT SAME RIGHT.
JUDGE DAVILA: THANK YOU. FAIR POINT, AND I'LL ASK MR. LOOBY'S THOUGHT ABOUT THAT. BUT DO YOU -- DOES THE LETTER, THE DOCUMENT THAT YOU'RE SEEKING TO INTRODUCE, DOES IT TOUCH ON EACH OF THE AREAS THAT WERE OPINED OF THE WITNESS FROM THE DEFENSE, AND DO WE NEED TO LOOK AT THAT SO AS NOT TO BE TOO OVERBROAD? IN OTHER WORDS, ARE THERE SPECIFIC INSTANCES OF INQUIRY ON CROSS THAT RELATE TO THE DOCUMENT YOU SEEK TO INTRODUCE, AND PERHAPS THAT'S A NARROWER FIELD THAN THE ENTIRETY OF THE DOCUMENT?
MR. SCHENK: YOUR HONOR, I HAVE NOT DONE THAT ONE-FOR-ONE MATCHING TO SEE IF THE FINDINGS IN THE LETTER RELATE, AS THE COURT SUGGESTS, ONE FOR ONE TO THE QUESTIONS THAT WERE ASKED OF DR. ROSENDORFF. THERE WERE FINDINGS IN THE LETTER REGARDING WHEN QC WAS DONE AND THE QC RECORDKEEPING.
JUDGE DAVILA: RIGHT.
MR. SCHENK: AND QA AND OTHER TOPICS THAT CERTAINLY WERE COVERED WITH DR. ROSENDORFF. BUT I CANNOT TELL THE COURT THAT THE LETTER ONLY INCLUDES QUESTIONS THAT WERE COVERED WITH DR. ROSENDORFF.
JUDGE DAVILA: RIGHT. THAT MIGHT MAKE A DIFFERENCE, MR. LOOBY.
MR. LOOBY: I THINK IT DOES. BUT I THINK BEFORE ADDRESSING THAT, I THINK THE PRIMARY, I THINK, ISSUE WITH THAT ARGUMENT IS THAT THIS LETTER, THIS JULY 2016 LETTER DOESN'T REFLECT THE FINDINGS OF THE CMS INSPECTION. IT REFLECTS CMS'S EVALUATION OF SUBSEQUENT EVENTS AND CORRESPONDENCE OF THERANOS'S ALLEGATIONS OF COMPLIANCE AND CORRECTION OF ISSUES THAT WERE IDENTIFIED IN THE INSPECTION. AND SO A LOT OF MR. SCHENK'S ARGUMENT GOES TO THE ADMISSIBILITY OF THE FINDINGS THEMSELVES, YOU KNOW, EVEN -- AND I DON'T BELIEVE THAT WE KIND OF OPENED THE DOOR AND WIDENED THE BERTH OF, LIKE, WHAT WAS ALREADY AT ISSUE IN THIS CASE GIVEN, YOU KNOW, THE FACT THAT THE CLIA REGULATIONS ARE PART OF THE CASE. SO I DON'T THINK THE ANALYSIS HAS SHIFTED. BUT REGARDLESS, IF WHAT THEY WANT TO SHOW IS THAT THERE WERE REGULATORY VIOLATIONS, THAT WOULD BE IN THE CMS REPORT THAT THE COURT HAS ALREADY HELD IS ADMISSIBLE IN PART, OR IN LARGE PART. AND THIS SUBSEQUENT EXCHANGE WITH THE CREDIBILITY DETERMINATIONS IS EVALUATING THERANOS'S SUBSEQUENT RESPONSES AND IT'S ESSENTIALLY A BACK AND FORTH BETWEEN THE COMPANY AND THE AGENCY THAT FUNCTIONS LIKE PLEADINGS IN AN ADMINISTRATIVE PROCEEDING. AND, IN FACT, THIS JULY LETTER IS THE IMPOSITION OF SANCTIONS LETTER THAT GAVE THERANOS APPEAL RIGHTS, AND THEY DID NOTICE AN APPEAL FROM THIS DETERMINATION THAT WAS LATER SETTLED. AND SO I THINK THIS IS PRETTY FAR AFIELD FROM THE ACTUAL FINDINGS. NOW, IT DOES COPY AND PASTE AND PARAPHRASE SOME OF THE ISSUES THAT ARE IDENTIFIED IN THE CMS REPORT, BUT THE COURT HAS ALREADY HELD THAT THE REPORT OR PORTIONS OF IT ARE LIKELY TO BE ADMITTED AT TRIAL, AND WE DON'T THINK THAT THIS LETTER IS THE FINDINGS OF THE AGENCY.
JUDGE DAVILA: OKAY. MR. SCHENK, ANYTHING IN RESPONSE?
MR. SCHENK: I THINK THE WAY WE CAN HANDLE IT TODAY IS THAT THE GOVERNMENT CAN OFFER THE EXHIBIT, THE COURT CAN ADMIT THE EMAIL AND GIVE THE GOVERNMENT PERMISSION TO PUBLISH THE EMAIL, AND IF THE COURT WANTS TO DEFER RULING ON THE ADMISSIBILITY OF THE ATTACHMENT, WE'RE FINE WITH THAT FOR TODAY'S PURPOSES. THE COURT CERTAINLY SHOULDN'T GRANT THE MOTION THE DEFENSE FILED, OR THE NOTICE THAT THE DEFENSE FILED LAST NIGHT. AND I THINK IF THE QUESTION IS, WHAT DO WE DO WITH THE DOCUMENT TODAY, THE COURT DEFERRING RULING ON THE DOCUMENT TODAY WOULD BE FINE WITH THE GOVERNMENT. AGAIN, WE INTEND TO PUBLISH.
JUDGE DAVILA: WELL, THANK YOU. THAT WAS ONE OF THE THOUGHTS THAT I HAD JUST BASED ON MR. LOOBY'S CONVERSATION IS THAT I DON'T NEED TO PROVISIONALLY ADMIT IT TODAY. IF YOU WANT TO ADMIT IT, I'LL DEFER ADMISSION. IF YOU WANT ME TO STATE THAT ON THE RECORD, OR IF YOU JUST WANT TO WAIT UNTIL ANOTHER PERIOD OF TIME, WHATEVER YOU WOULD LIKE TO DO ON THAT, BUT IT WON'T BE ADMITTED TODAY, LET ME JUST SAY THAT. THE EMAIL WILL, AND THE REPRESENTATION THAT THERE WAS A DOCUMENT ATTACHED TO THE EMAIL, THAT IS ADMISSIBLE. BUT WHETHER OR NOT TODAY THE DOCUMENT COMES IN, THAT WON'T BE TOUCHED ON. AND THEN WE CAN LOOK AT THESE OTHER ISSUES AT SOME POINT IN TIME WHEN YOU HAVE ANOTHER WITNESS, FOUNDATIONAL WITNESS THAT YOU THINK IS APPROPRIATE, AND WE CAN ALL LOOK AT THESE OTHER, INCLUDING THE ONE-FOR-ONE ANALYSIS. AND, MR. LOOBY, YOUR COMMENTS THAT EVEN IF THIS IS ONE FOR ONE, IT'S NOT REALLY A MATCH BECAUSE IT'S A DIFFERENT PURPOSE AT A DIFFERENT TIME.
MR. LOOBY: RIGHT. IT'S A LITTLE DOWNSTREAM FROM THE ACTUAL FINDINGS IN THE REPORT.
JUDGE DAVILA: RIGHT.
MR. LOOBY: SO I'M AVAILABLE TO ANSWER ANY OF THE COURT'S QUESTIONS IF AND WHEN THE ISSUE DOES RIPEN DOWN THE ROAD.
JUDGE DAVILA: OKAY. WE'LL TAKE A LOOK AT IT THEN. OKAY?
MR. LOOBY: THANK YOU, YOUR HONOR.
JUDGE DAVILA: GREAT.
MR. LOOBY: ACTUALLY, ONE LAST ISSUE THAT IS SOMEWHAT RELATED TO THIS IS THAT DR. DHAWAN IN HIS INTERVIEWS WITH THE GOVERNMENT HAS SUGGESTED THAT HE BELIEVES THAT THERANOS MAY HAVE USED HIS NAME IN THE LAB TO PUT PEOPLE IN DANGER. WE'VE CONFERRED WITH THE GOVERNMENT ABOUT WHETHER OR NOT THEY INTEND TO ELICIT THAT TYPE OF TESTIMONY, AND I UNDERSTAND THAT THEY DO NOT, BUT THEY HAVE NOT ADMONISHED THE WITNESS TO AVOID THAT TYPE OF TESTIMONY. AND WE THINK THAT'S INADMISSIBLE TESTIMONY ON VARIOUS GROUNDS, 403 UNDER THE COURT'S IN LIMINE RULING ON IMPACT AND THE ISSUE OF, YOU KNOW, PATIENT HARM, AND 602 BECAUSE HE DOESN'T REALLY HAVE A BASIS IN HIS OWN PERSONAL KNOWLEDGE FOR THAT.
MR. SCHENK: DR. DHAWAN IN AN INTERVIEW SAID THAT HE WAS CONCERNED ABOUT WHETHER THE -- WHAT HE'S NOW LEARNED SUGGESTS THAT THERE WAS THE POSSIBILITY FOR PATIENT HARM OR WHETHER INDIVIDUALS WHO USED THE TESTING SERVICE WERE PUT IN DANGER AND THAT CAUSES HIM CONCERN. I THINK THAT IS OF THE SAME TYPE OF EVIDENCE AS MS. CHEUNG OR DR. ROSENDORFF OR MS. GANGAKHEDKAR WHO ALL SAID THEY HAD CONCERNS ABOUT THE TESTING, OF THERANOS ENTERING THE BLOOD TESTING MARKET CREATING A RISK TO PATIENTS. I THINK IT'S THE SAME TYPE OF EVIDENCE AS THAT EVIDENCE IS, AND THAT EVIDENCE HAS COME IN, AND IT'S CERTAINLY RELEVANT AND ADMISSIBLE, AND I JUST DON'T KNOW THAT DR. DHAWAN'S IS OF A DIFFERENT TYPE SO I HAVE INSTRUCTED HIM NOT TO SAY THAT DURING TRIAL.
JUDGE DAVILA: I THOUGHT YOU WERE REFERENCING PERSONAL CONCERN OR JEOPARDY TO HIM PERSONALLY, EMPLOYMENT OR OTHERWISE.
MR. LOOBY: THAT'S A SEPARATE ISSUE THAT WE HAVE NOT CONFERRED WITH THE GOVERNMENT YET. I WAS JUST FLAGGING WE MAY OBJECT IF QUESTIONING GOES INTO THAT. THIS IS A SEPARATE ISSUE ABOUT PATIENT HARM.
JUDGE DAVILA: OH.
MR. LOOBY: IN THE CONTEXT OF THE INTERVIEW IT SEEMS LIKE IT'S BASED OFF OF WHAT HE HAS SUBSEQUENTLY LEARNED. WHAT HE SUBSEQUENTLY LEARNED MIGHT BE FROM CONSUMING NEWS MEDIA, IT MIGHT BE FROM IT, YOU KNOW, REVIEWING DOCUMENTS THAT HE WASN'T SHOWN IN REALTIME. I THINK IT PUTS HIM IN A DIFFERENT CLASS FROM THE OTHER WITNESSES WHO ARE TESTIFYING ABOUT WHAT THEY UNDERSTOOD ABOUT EVENTS THAT THEY EXPERIENCED IN REAL TIME AND THIS TO ME FEELS MORE --
JUDGE DAVILA: WELL, THAT'S A DISTINCTION. I DON'T KNOW WHAT HIS -- WHEN HIS EPIPHANY OCCURRED, BUT YOU CAN CERTAINLY INQUIRE ON THAT, AND YOU CAN DETERMINE WHEN IT WAS.
MR. SCHENK: YES. THANK YOU.
JUDGE DAVILA: WE'LL SEE.
MR. LOOBY: YES.
JUDGE DAVILA: STAY TUNED I THINK AS THEY SAY.
MR. LOOBY: THANK YOU, YOUR HONOR.
JUDGE DAVILA: OKAY. ANYTHING ELSE FOR THIS MORNING?
MR. LOOBY: NONE FROM US.
MR. SCHENK: NO, YOUR HONOR.
JUDGE DAVILA: OKAY. THANK YOU. SO WE'LL START AND WE'LL SEE WHAT WE CAN GET THROUGH. I THINK THIS WITNESS WHO IS CURRENTLY ON THE STAND IS A BRIEF WITNESS?
MR. SCHENK: YES.
JUDGE DAVILA: AND THEN WE MOVE INTO IS IT MR. JHAVERI?
MR. SCHENK: JHAVERI.
JUDGE DAVILA: JHAVERI. THANK YOU. WE'LL SEE HOW FAR WE GO. YOU'LL LET ME KNOW ABOUT BREAKS AND THINGS, AND THEN WE'LL COORDINATE THE ALLOWANCE OF YOU AND YOUR TEAMS TO PARTICIPATE IN THE OTHER HEARING. GREAT.
MR. SCHENK: THANK YOU.
MR. LOOBY: THANK YOU.
(RECESS FROM 8:58 A.M. UNTIL 9:18 A.M.)
(JURY IN AT 9:18 A.M.)
JUDGE DAVILA: ALL RIGHT. THANK YOU. WE'RE BACK ON THE RECORD IN THE HOLMES MATTER. ALL COUNSEL ARE PRESENT. MS. HOLMES IS PRESENT. OUR JURY IS PRESENT. OUR WITNESS IS ON THE STAND. GOOD MORNING, SIR.
ROBERTO AMENTA: GOOD MORNING.