Tolbert Exhibits and Weber Report Admissibility
117 linesSAN JOSE, CALIFORNIA OCTOBER 22, 2021 P R O C E E D I N G S
(COURT CONVENED AT 8:41 A.M.)
(JURY OUT AT 8:41 A.M.)
JUDGE DAVILA: LET'S GO ON THE RECORD IN THE HOLMES MATTER. ALL COUNSEL ARE PRESENT. MS. HOLMES IS PRESENT. WE'RE OUTSIDE, EXCUSE ME, THE PRESENCE OF THE JURY. I WANTED TO TALK TO COUNSEL ABOUT A COUPLE OF MATTERS. FIRST OF ALL, IN REGARDS TO EXHIBIT 5387, I THINK IT'S D, WE -- I THINK WE ADMITTED THAT THE OTHER DAY. WE DID THAT OUTSIDE OF THE PRESENCE OF THE JURY, WHICH IS NOT PROPER. WE NEED TO DO THAT -- ANY EVIDENCE NEEDS TO BE INTRODUCED IN THE JURY'S PRESENCE. SO I NEGLECTED TO RECALL THAT, SO I'M GOING TO ASK MS. VOLKAR AND MS. TREFZ TO COME FORWARD AGAIN WHEN THE JURY COMES IN AND WE'LL GO THROUGH THAT PROCESS AGAIN. I SEE MS. VOLKAR, AND I SEE MS. TREFZ HERE. SO I THINK I HAVE THE EXHIBIT NUMBER RIGHT, IT IS D, DAVID. AND MS. VOLKAR, IF YOU WOULD BE SO KIND TO COME UP WHEN WE HAVE OUR JURY IN, AND MS. TREFZ, THEN WE'LL DO THAT FORMALITY. THE -- I THINK, MR. WADE, YOU WANTED TO TALK -- WHERE IS MR. WADE? THERE. YOU WANTED TO TALK ABOUT BRYAN TOLBERT OR SOMETHING.
COURT CLERK: MR. DOWNEY.
JUDGE DAVILA: MR. DOWNEY. I'M SORRY.
MR. DOWNEY: YES. AND MR. SCHENK AND I HAVE TALKED ABOUT SOME OF THIS, AND I THINK -- LET ME SAY THAT I THINK WE AGREE IN PART ON SOME ISSUES, BUT JUST TO ORIENT THE COURT BEFORE THIS IS IN FRONT OF THE JURY BECAUSE ONE OF THE ISSUES HAS A LITTLE BIT MORE TO CONSIDER WITH IT, ALTHOUGH THE COURT MAY NOT WANT TO DECIDE UNTIL THE ISSUE IS LIVE. FIRST OF ALL, I THINK ON ONE ISSUE ACTUALLY MR. SCHENK AND I AGREE. THERE'S AN EXHIBIT, WHICH IS EXHIBIT 1344, WHICH IS A SERIES OF NOTES FROM A CONFERENCE CALL WHICH WE'LL HEAR A TAPE OF DURING THE TESTIMONY OF MR. TOLBERT. THE NOTES THEMSELVES, I THINK MR. SCHENK AND I AGREE, ARE NOT ADMISSIBLE. THE NOTES ARE HEARSAY. OF COURSE HE CAN SHOW THEM TO THE WITNESS TO TRY TO REFRESH THE WITNESS'S RECOLLECTION. AND THERE ARE CIRCUMSTANCES UNDER WHICH THEY COULD BECOME ADMISSIBLE, BUT I DON'T ANTICIPATE THOSE. SO I THINK THAT IS LARGELY RESOLVED.
JUDGE DAVILA: OKAY.
MR. DOWNEY: THE SECOND ISSUE IS IN CONNECTION WITH EXHIBIT 3086. THIS IS AN EMAIL WHICH ACTUALLY DOESN'T HAVE PARTICULAR RELEVANCE TO MR. TOLBERT, I THINK. THIS IS AN EMAIL SENT BY THERANOS TO ALL SHAREHOLDERS IN JANUARY OF 2016 -- I'M SORRY, YOUR HONOR, THIS IS 3086.
JUDGE DAVILA: YES.
MR. DOWNEY: THIS IS A SHAREHOLDER LETTER THAT WAS SENT TO ALL SHAREHOLDERS. IT ESSENTIALLY REPEATS THE ALLEGATIONS OF "THE WALL STREET JOURNAL" ARTICLE WHICH HAS ALREADY BEEN RULED INADMISSIBLE, SO IT'S ANOTHER LAYER OF HEARSAY RELATED TO THAT, AND IT REPEATS THE ALLEGATIONS CONTAINED IN THE CMS REPORT, WHICH AS YOUR HONOR KNOWS, HAS BEEN ADMITTED IN PART, BUT NOT ADMITTED IN PART. AND THEN IT OFFERS, ON A HEARSAY BASIS, THE COMPANY'S SORT OF OWN DEFENSES FOR BOTH OF THOSE EVENTS. I DON'T THINK -- THIS WITNESS IS NOT PARTICULARLY IMPORTANT AS TO THAT, BUT I THINK IN ANY EVENT THERE ARE A COUPLE OF OTHER ISSUES WITH IT. I DON'T KNOW THAT HIS TESTIMONY MATTERS. FIRST OF ALL, THIS IS ALL OUTSIDE OF THE SCOPE OF THE CONSPIRACY. AS YOUR HONOR KNOWS, THE INVESTOR CONSPIRACY ENDS IN 2015, SO THIS DISCUSSION OF THESE MATTERS AFTER THE END OF THE CONSPIRACY IS NOT REALLY RELEVANT TO THE CONSPIRACY ALLEGATION DURING THE COURSE OF THE CASE. THE SECOND ISSUE, YOUR HONOR, THERE'S SORT OF MULTIPLE LAYERS OF HEARSAY IN HERE. THERE'S QUOTES OF "THE WALL STREET JOURNAL" QUOTING WITNESSES, AND THEN QUOTES OF OTHER WITNESSES, NOT DIRECT QUOTES, BUT SUMMARIZED QUOTES OF WHAT REFUTES THOSE ALLEGATIONS ON THE PART OF THE COMPANY. SO IT'S JUST A MESS IN TERMS OF THE HEARSAY ISSUES, FRANKLY. AND I THINK TO SORT IT OUT EITHER NOW OR IN REALTIME WOULD BE VERY DIFFICULT. I THINK ALSO THIS IS KIND OF WHAT THE CASE -- SOME OF THIS IS WHAT PART OF THE CASE IS ABOUT, AND I THINK TO TRY TO INTRODUCE A DOCUMENT THAT IS A PAGE AND A HALF EMAIL, YOU KNOW, POST CONSPIRACY DISCUSSING IT IS -- YOU KNOW, RAISES A LOT OF 403 ISSUES. WHEN MR. TOLBERT, YOU KNOW, HAPPENED TO RECEIVE THIS EMAIL, YOU KNOW, DOESN'T REALLY ADD VERY MUCH.
JUDGE DAVILA: THANK YOU. MR. SCHENK?
MR. SCHENK: I'LL START IN TURN WITH 1344, MR. TOLBERT'S NOTES. I DO NOT INTEND TO OFFER THAT DURING MR. TOLBERT'S DIRECT TESTIMONY TODAY. IT IS, THOUGH, SOMETHING THAT COULD BE READ TO THE JURY UNDER 803(5). IT WOULDN'T BE ADMITTED AND GO BACK, BUT IT IS SOMETHING THAT IS ADMISSIBLE UNDER THAT RULE OF EVIDENCE SHOULD IT BECOME RELEVANT AND NECESSARY. IT'S NOTES OF A CALL THAT WE HAVE A RECORDING OF, SO WE CAN PLAY THAT AND I THINK SATISFY THE CONTENT OF THE RECORDING IN A DIFFERENT WAY. BUT QUESTIONS OF MR. TOLBERT ABOUT HIS RECOLLECTION OF THE RECALL, I'M SORRY, OF THE CALL OR HIS INTERPRETATION OF THE CALL COULD BE -- COULD MAKE IT RELEVANT UNDER THAT RULE OF EVIDENCE. AGAIN, I DON'T INTEND TO OFFER IT. BUT I WANT TO BE CLEAR THAT THE GOVERNMENT IS NOT CONCEDING THAT IT'S NOT RELEVANT OR ADMISSIBLE, AND AGAIN, ADMISSIBLE IS A LITTLE BIT DIFFERENT NOT TO GO BACK TO THE JURY, BUT RATHER TO BE READ INTO EVIDENCE AS A MARKED EXHIBIT. I DON'T THINK THE COURT NEEDS TO MAKE A DECISION ON THAT NOW BECAUSE I DON'T ANTICIPATE THAT BECOMING NECESSARY. BUT IF IT DOES, IT WOULD BE ON THAT BASIS THAT THE GOVERNMENT WOULD SEEK TO HAVE THE DOCUMENT READ, OR AT LEAST PORTIONS OF THE DOCUMENT READ TO THE JURY.
JUDGE DAVILA: THANK YOU.
MR. SCHENK: ON 3086, YOUR HONOR, THIS IS A DOCUMENT WHERE THERANOS SENDS AN EMAIL TO ALL SHAREHOLDERS AND THEN MR. TOLBERT TAKES THAT EMAIL AND SHARES IT WITH OTHER INDIVIDUALS AT HALL GROUP. LULLING STATEMENTS ARE RELEVANT AFTER THE FACT. IT'S ADMISSIBLE ON THAT GROUND. THE DEFENSE HAS INTRODUCED ON MANY OCCASIONS IN THIS TRIAL POST INVESTMENT EVIDENCE. THE COURT HAS HEARD TESTIMONY ABOUT AN INDIVIDUAL NAMED DAVID HELFET, THE COURT HAS HEARD TESTIMONY ABOUT THE SCIENTIFIC AND ADVISORY BOARD, THE COURT HAS HEARD TESTIMONY ABOUT CHANNING ROBERTSON'S ROLE AFTER THE FACT. IT CANNOT BE THAT THE DEFENSE IS ALLOWED TO INTRODUCE POST INVESTMENT EVIDENCE TO SUGGEST THAT EITHER THE THERANOS TECHNOLOGY WORKED OR THAT MS. HOLMES DIDN'T HAVE AN INTENT TO DEFRAUD, BUT THAT THE GOVERNMENT IS PRECLUDED FROM OFFERING POST INVESTMENT EVIDENCE. I THINK THAT THE EVIDENCE DISPROVES THE EXISTENCE OF KNOWLEDGE, AND ALSO THIS PARTICULAR DOCUMENT BRAGS ABOUT A NEW LAB DIRECTOR NAMED DR. DAS. DR.
DAS WILL BE A WITNESS IN THIS TRIAL. THERANOS LIKED HIM AND WANTED SHAREHOLDERS TO LIKE AND APPRECIATE THE WORK THAT HE'S GOING TO DO, AND THAT'S AN IMPORTANT THING FOR THE JURY TO KNOW WHEN DR. DAS TAKES THE STAND, THAT AT LEAST INITIALLY THAT THERANOS WAS VERY PROUD TO BRING DR. DAS WITHIN THE FOLD. I THINK THAT I CAN AGREE NOT TO OFFER THIS IN DIRECT OF TOLBERT BECAUSE MOST OF HIS TESTIMONY IS GOING TO BE ABOUT THE DECISION TO MAKE THE INVESTMENT. BUT IT CERTAINLY IS NOT THE CASE THAT THE GOVERNMENT SHOULD BE PRECLUDED FROM OFFERING POST -- THE DATE HERE IS DECEMBER 31ST, 2013. THAT'S WHEN THE WIRE WENT FROM HALL TO THERANOS. POST DECEMBER 31ST, 2013 EVIDENCE IS CERTAINLY RELEVANT, AND THE DEFENSE HAS ARGUED TO THE COURT AND TO THE JURY THAT AFTER INVESTMENT EVIDENCE IS RELEVANT.
SO IT SHOULD NOT BE THE CASE THAT THE GOVERNMENT IS PRECLUDED FROM OFFERING EVIDENCE FOLLOWING AN INVESTMENT, ESPECIALLY EVIDENCE OF THIS SORT WHEN THE REPRESENTATIONS REGARDING CMS OR THE SIGNIFICANCE OF THE CMS INVESTIGATION, THE INDIVIDUALS WHO MIGHT BE SHARING INFORMATION, THE WHISTLE BLOWERS AND THE WAY THAT THERANOS IS EXPLAINING THAT IS ALL CERTAINLY RELEVANT. IN OTHER CONTEXTS WE FOLLOWED THAT RULE. ARTICLES, FOR INSTANCE, AREN'T RELEVANT WHEN WE JUST WANT TO INTRODUCE THE SPECIFIC ARTICLE. THEY BECOME RELEVANT WHEN THERANOS SENDS THAT ARTICLE TO SHAREHOLDERS SORT OF IN THE GUISE OF, YOU WANT TO LEARN MORE ABOUT OUR TECHNOLOGY, READ THIS ARTICLE. SO THINGS THAT MIGHT OTHERWISE BE EXCLUDABLE IN THIS CASE BECOME RELEVANT ADMISSIBLE EVIDENCE WHEN THERANOS MAKES REPRESENTATIONS TO SHAREHOLDERS THAT SHAREHOLDERS SHOULD RELY ON THAT LULL THEM INTO BELIEVING THAT EVERYTHING IS STILL OKAY AT THERANOS AND SORT OF IMPLICITLY DISCOURAGE SHAREHOLDERS FROM CONTACTING LAW ENFORCEMENT THROUGH THOSE REPRESENTATIONS. FOR ALL OF THOSE REASONS THIS IS RELEVANT AND ADMISSIBLE EVIDENCE. I CAN LIMIT MY QUESTIONS ON DIRECT TO AVOID THIS, BUT I DON'T WANT THE COURT TO MAKE A RULING THAT THE GOVERNMENT'S SHOULD BE PRECLUDED FROM OFFERING EVIDENCE OF THIS TYPE BECAUSE OF THE DATE OR BECAUSE OF THE CONTENT.
JUDGE DAVILA: THANK YOU. IS IT -- DO I HEAR YOU SAY THEN THAT YOUR INTENT IS NOT SPECIFICALLY, AT LEAST INITIALLY, TO INTRODUCE THE DOCUMENT, BUT RATHER TO PROBE THE ISSUES CONTAINED IN THE DOCUMENT?
MR. SCHENK: I WOULD BE HAPPY TO LIMIT MR. TOLBERT'S DIRECT UP THROUGH THE DATE OF THE INVESTMENT AND CUT IT OFF THERE FOR TODAY'S PURPOSES. I WOULD LIKE TO SEE THE KINDS OF QUESTIONS THAT THE DEFENSE ASKS ON CROSS. I WONDER IF THE DEFENSE IS GOING TO ASK EVEN ONE QUESTION THAT CALLS ON EVENTS AFTER JANUARY 1, 2014. THAT WOULD OPEN THE DOOR FOR THIS WITNESS. BUT I DON'T WANT TO SUGGEST TO THE COURT THAT THE DOOR NEEDS TO BE OPENED SORT OF FROM RIGHT NOW GOING FORWARD.
JUDGE DAVILA: SURE.
MR. SCHENK: THEY'VE OPENED THE DOOR THROUGH COUNTLESS WITNESSES WHEN THEY'VE TALKED ABOUT THE 2016/2017 EVENTS AT THERANOS AND THE DOOR IS OPENED, SO I DON'T WANT THE COURT TO THINK I DON'T ALREADY BELIEVE I CAN GO THERE. I JUST DON'T THINK IT'S NECESSARY TO GO THERE WITH MR. TOLBERT. LET'S SEE WHAT KIND OF QUESTIONS THAT THE DEFENSE HAS.
JUDGE DAVILA: ALL RIGHT.
MR. DOWNEY: YOUR HONOR, IF I MIGHT QUICKLY COMMENT?
JUDGE DAVILA: DO YOU WANT TO BE HEARD ABOUT DOORS, MR. DOWNEY.
MR. DOWNEY: FIRST OF ALL, LET ME JUST COMMENT ON THE DATES. I THINK IN MR. SCHENK'S FIRST COMMENT HE SAID 2013 AND HE MEANT 2015. FIRST OF ALL, LULLING IS A COMPONENT OF A CONSPIRACY AND CAN BE AN OVERT ACT IN FURTHERANCE OF A CONSPIRACY. THIS WITNESS IS NOT RELEVANT TO ANY CONSPIRACY EVIDENCE AFTER DECEMBER 31ST, 2015. I'M NOT CERTAIN IF THERE'S A LOT OF EVIDENCE DURING THE COURSE OF THE CONSPIRACY AFTER THE INVESTMENT. WE CAN SEE WHAT HAPPENS THERE. BUT I CERTAINLY AGREE THAT EVIDENCE FROM AFTER DECEMBER 31ST, 2015, WHICH IS THE TERMINATION OF THE CONSPIRACY, OR SOME DATE IN 2015 BEFORE THAT, WON'T COME IN THROUGH US OR THROUGH THEM.
JUDGE DAVILA: ALL RIGHT. WELL, THIS IS A STAY TUNED TYPE OF AN EVENT. THANK YOU FOR HIGHLIGHTING THAT.
MR. DOWNEY: YEAH. AND I'LL JUST SAY, YOUR HONOR, THIS IS A SIMPLER ISSUE, BUT THERE WILL BE A COUPLE OF DOCUMENTS, AT LEAST MAYBE ONE, WHERE MR. TOLBERT'S NOTES WILL BE SOUGHT TO INTRODUCE. I'M NOT SURE WHAT THE LEVEL OF FOUNDATION WILL BE THAT'S LAID IN CONNECTION WITH THEM, BUT GENERALLY I DON'T THINK HANDWRITTEN NOTES OF AN INDIVIDUAL EMPLOYEE OR TYPED NOTES OF AN INDIVIDUAL EMPLOYEE CONSTITUTE A BUSINESS RECORD UNDER NINTH CIRCUIT LAW, SO I THINK WE'LL BE OBJECTING TO THOSE. 1344 IS ONE EXAMPLE. AGAIN, I'M NOT SURE THEY WILL BE OFFERED, BUT THEY ARE AMONGST THE EXHIBITS THAT WE'VE BEEN PROFFERED.
JUDGE DAVILA: ALL RIGHT. THANK YOU. ANYTHING FURTHER, MR. SCHENK, ON THAT?
MR. SCHENK: JUST ON THAT LAST POINT. 803(5) DOESN'T REQUIRE BUSINESS RECORDS, SO I WOULDN'T LAY THE FOUNDATION THAT WAY SHOULD 1344 BE A DOCUMENT THAT IS ENTITLED TO BE READ TO THE JURY, BUT NOT ADMITTED FOR DELIBERATION.
JUDGE DAVILA: ALL RIGHT. THANK YOU. I WANTED TO TALK ABOUT THE SHANE WEBER EXHIBIT. THAT MAY BECOME RELEVANT THIS MORNING I THINK.
MR. DOWNEY: I THINK THAT'S RIGHT.
MR. SCHENK: YES.
MR. DOWNEY: THERE ARE SOME OTHER ISSUES RELATED TO WHAT WOULD BE THE FOURTH WITNESS TODAY, IF WE GOT TO THE FOURTH WITNESS. I THINK WE BOTH HAVE UNCERTAINTY AS TO WHETHER WE WILL OR WHETHER WE --
JUDGE DAVILA: LET'S TAKE THAT UP AFTER OUR BREAK AND SEE WHERE WE ARE ON THAT.
MR. DOWNEY: YEAH. AND THEY'RE ALSO NOT LARGE ISSUES.
JUDGE DAVILA: THANK YOU. TURNING TO THE WEBER DOCUMENT THAT WE DISCUSSED YESTERDAY, AND WE HAD SOME ROBUST DISCUSSION ABOUT WHETHER OR NOT THE DOCUMENT ITSELF SHOULD BE ADMITTED, I LISTENED TO THE ARGUMENTS AND I'VE REVIEWED THE DOCUMENT ITSELF. I THINK MR. CLINE'S OBJECTION -- WHERE ARE YOU MR. CLINE? THERE YOU ARE -- I THINK MR. CLINE'S OBJECTIONS WERE THE PEJORATIVE NATURE OF THE TERMS THAT WERE USED DESCRIBED THINGS -- YOU CAN COME FORWARD IF YOU WOULD LIKE. THANK YOU -- WERE OTHERWISE OFFENSIVE AND APPROPRIATE UNDER A 403 ANALYSIS. WHAT I HEARD YOU SAY SEVERAL TIMES WAS THAT IT WAS PROFOUNDLY UNFAIR -- AND WE'RE TALKING ABOUT UNDER A 403 ANALYSIS, WHETHER OR NOT PREJUDICE IS UNFAIR. EVERYTHING THAT THE PROSECUTION ADVANCES AGAINST YOUR CLIENT OBVIOUSLY IS PREJUDICIAL TO HER INTEREST. THE QUESTION THAT WE'RE LOOKING AT UNDER 403 IS, IS THIS UNFAIR PREJUDICE? AND IF SO, IN WHAT MANNER, AND WHAT IS THE REMEDY IF IT IS? AND I HEARD YOU SAY SEVERAL TIMES THAT YOUR CONCERN IS THAT THE JURY WOULD HAVE THIS DOCUMENT AND THEY WOULD REVIEW IT IN THEIR DELIBERATIONS AND WOULD HAVE THOSE PEJORATIVE TERMS, AS YOU PUT IT, IN FRONT OF THEM. THEY COULD DRAW CONCLUSIONS, PERHAPS UNFAIR AND INAPPROPRIATE CONCLUSIONS, ABOUT THIS ONE WITNESS, MR. WEBER'S EVALUATION. AND WHAT WE KNOW, AGAIN, THE CHRONOLOGY OF THIS, AS I UNDERSTAND FROM BOTH OF YOU, WAS THAT THERANOS REACHED OUT TO PFIZER FOR BUSINESS RELATIONSHIP PURPOSES. THERE WAS A CONFERENCE CALL. I THINK THAT WAS IN NOVEMBER OF 2008, NOVEMBER 13TH, 2008. IS THAT RIGHT?
MR. CLINE: YES. JUST TO BACK UP A TINY BIT. THERE HAD BEEN A BUSINESS RELATIONSHIP FOR A COUPLE OF YEARS AT THIS POINT. IN NOVEMBER 2008, DR. WEBER IS ASKED TO REVIEW A REPORT THAT THERANOS HAD SUBMITTED THAT'S AROUND THE BEGINNING OF NOVEMBER, NOVEMBER 6TH, I THINK, 2008, AND THEN ON THE 13TH, AS YOUR HONOR SAYS, THERE WAS THIS CONFERENCE CALL WITH DR. WEBER ON ONE HAND AND A NUMBER OF THERANOS PEOPLE, INCLUDING MS. HOLMES, ON THE OTHER.
JUDGE DAVILA: THANK YOU. AND THEN HE -- "HE" MR. WEBER -- THEN WAS ASSIGNED APPARENTLY TO EVALUATE THE RELATIONSHIP. THERE WERE 25 QUESTIONS, I THINK, THAT WERE POSED. HE WROTE HIS REPORT ON, AT LEAST WE HAVE IT ON DECEMBER 31, 2008. THAT'S THE DOCUMENT IN QUESTION HERE.
MR. CLINE: YES.
JUDGE DAVILA: AND THEN THERE WAS A FOLLOW-UP CALL WITH MS. HOLMES AND MR. WEBER I THINK SOMETIME IN JANUARY OF 2009.
MR. CLINE: CORRECT.
JUDGE DAVILA: I THINK THOSE ARE THE SEMINAL DATES AS FAR AS THIS DOCUMENT IS CONCERNED. AND IT SEEMS TO ME, AS I REREAD THIS SEVERAL TIMES, THE CRITICISMS THAT I THINK YOU RAISE, MR. CLINE, ABOUT THE LANGUAGE, IT SEEMS TO ME THAT THOSE CRITICISMS ARE NOT REALLY SPECIFIC TO MS. HOLMES, AND I KNOW YOU WERE TALKING ABOUT THEY COULD BE INFERRED AS HIS COMMENT ABOUT HER VERACITY, HER PERSONAL VERACITY. BUT WHEN I LOOK AT THOSE, IT SEEMS THAT HIS COMMENTS, HE'S REALLY TALKING ABOUT THE TECHNICAL RESPONSES --
MR. CLINE: WELL --
JUDGE DAVILA: -- AND THAT SEEMS TO BE WHAT HE'S REFERRING TO WHEN HE'S CRITICAL OF THAT. GO AHEAD.
MR. CLINE: I'M SORRY, YOUR HONOR.
JUDGE DAVILA: NO, NO. YOU'RE EAGER TO SPEAK AND YOU WANT TO STOP ME.
MR. CLINE: I'M CHOMPING AT THE BIT HERE. THERE ARE SORT OF TWO SETS OF RESPONSES HERE. THERE ARE THE RESPONSES TO THE ORAL QUESTIONS ON THE NOVEMBER 13TH CALL; AND THEN THERE WRITTEN RESPONSES TO WHAT MR. FRENZEL SAID. DR. WEBER IN HIS REPORT USES VERY SIMILAR LANGUAGE FOR BOTH, EVASIVE -- I FORGET ALL OF THE DIFFERENT TERMS, BUT THEY'RE PEJORATIVE TERMS AND I THINK THEY DO COMMENT ON THE CREDIBILITY OF THE PERSON PROVIDING THE ANSWER. ON THE NOVEMBER 13TH CALL, I BELIEVE DR. WEBER WILL TESTIFY THAT ALTHOUGH THERE WERE A NUMBER OF THERANOS PEOPLE ON THE LINE, MS. HOLMES DID ALL OF THE TALKING.
JUDGE DAVILA: RIGHT.
MR. CLINE: SO WHEN HE SAYS THE ANSWERS ON THAT NOVEMBER 13TH CALL WERE EVASIVE, DEFLECTIVE, WHATEVER TERMS HE USES, HE'S TALKING ABOUT MS. HOLMES. AND THAT IS A 403 ISSUE, AND I THINK IT'S ALSO A 701 ISSUE ABOUT THE CREDIBILITY OF MS. HOLMES. AND I DON'T THINK THAT'S SHOULD COME IN.
JUDGE DAVILA: SURE. WHAT IS INTERESTING ABOUT THE DOCUMENT, ISN'T IT, THAT DESPITE HIS CRITICISMS AND USE OF THOSE TERMS, HE DOES SUGGEST THAT THEY SHOULD ENGAGE IN SIX MONTHS TO SEE IF WHETHER OR NOT EITHER THE TECHNOLOGY HAS CHANGED OR THE CONVERSATION HAS CHANGED SUCH THAT PFIZER WOULD HAVE GREATER COMFORT IN CONTINUING, RENEWING, WHATEVER, THE BUSINESS RELATIONSHIP. ONE OF HIS CRITICISMS WAS THAT THERE WERE TOO MANY, THERE ARE TOO MANY COOKS IN THE KITCHEN, SO TO SPEAK, AND HE WANTS TO NARROW IT DOWN TO ONE GROUP, ONE TEAM THAT THERANOS COULD THEN CONTACT, AND HE SUGGESTS DOING THAT IN SIX MONTHS. THAT SEEMS TO TEMPER SOMEWHAT THE COMMENTS THAT YOU'VE MADE ABOUT THE PEJORATIVE NATURE OF THOSE TERMS. IT SUGGESTS, LIKE YOUR MATH TEACHER -- BUT NOT YOU, MR. CLINE, BECAUSE I KNOW YOU EXCELLED IN MATH.
MR. CLINE: I MADE IT THROUGH SOPHOMORE COLLEGE MATH, JUST SO YOU KNOW.
JUDGE DAVILA: YOUR MATH TEACHER WOULD SAY, SHOW ME YOUR WORK. YOU HAVE TO SHOW ME YOUR WORK. AND I DON'T MEAN TO MAKE LIGHT OF THIS, BUT THAT'S SOMEWHAT I THINK THE WAY THE COMMENTS CAN BE INFERRED, AND SUPPORTING THAT IS THE FACT THAT THE DOOR ISN'T CLOSED. LET'S REGROUP IN SIX MONTHS AND LET'S SEE WHAT YOU COME UP WITH. SO I THINK TEMPERS IT. NOW, LET ME SAY THIS: I UNDERSTAND YOUR CONCERN NOW ABOUT HAVING THIS DOCUMENT ADMITTED SUCH THAT THE JURY COULD HAVE IT. I CAPTURE YOUR 403 CONCERNS ABOUT THAT. WHAT I'M GOING TO DO, MR. LEACH, IS I'M GOING TO ALLOW THIS DOCUMENT TO BE MARKED AS AN EXHIBIT, AND WHAT I INTEND TO DO -- AND YOU'RE GOING TO LAY A FOUNDATION, I PRESUME, FOR ALL OF THIS.
MR. LEACH: YES, YOUR HONOR.
JUDGE DAVILA: AND THEN I'M GOING TO ALLOW THIS TO BE USED NOW AS A DEMONSTRATIVE. YOU'LL BE ABLE TO DISPLAY THIS TO THE JURY, YOU'LL BE ABLE TO QUESTION, ASSUMING THE FOUNDATION IS LAID, AND YOU'LL BE ABLE TO EXAMINE ON THIS, AS WILL YOU, MR. CLINE. WHETHER OR NOT IT'S INTRODUCED AS A FORMAL EXHIBIT OR NOT, I'M GOING TO RESERVE JUDGMENT ON THAT. SO IT CAN BE USED, MAY BE USED, AS A DEMONSTRATIVE, BOTH THIS MORNING AND BY COUNSEL, IF YOU WISH, IN ARGUMENT. IN FINAL ARGUMENT IF YOU WISH TO USE IT, IT WILL BE A DEMONSTRATIVE. BUT AT THIS POINT I'M NOT GOING TO ALLOW IT TO GO IN EVIDENCE ABSENT ANY ADDITIONAL FOUNDATION. NOW, THIS ALSO -- WE ALSO TALKED ON -- YOU TOUCHED ON A 702 OBJECTION IN REGARDS TO SOME OF THE SCIENTIFIC TERMS, AND I THINK THE FACT THAT IT'S USED AS A DEMONSTRATIVE I THINK ALSO ACTS PROPHYLACTICALLY ABOUT ELIMINATING THAT ISSUE ABOUT THE JURY TO RECEIVE THIS AND THE 702 ISSUE. MY SENSE IS, MR. LEACH, YOU'RE NOT GOING TO EXAMINE ON ANY OF THOSE TOPICS.
MR. LEACH: THAT'S CORRECT, YOUR HONOR.
JUDGE DAVILA: SO I THINK THAT TAKES CARE OF THAT 702 ISSUE. SO THAT'S THE COURT'S RULING ON THE DOCUMENT, AND WE'LL SEE IF IT COMES IN FOR SOME OTHER PURPOSE.
MR. LEACH: THANK YOU, YOUR HONOR.
MR. CLINE: YOUR HONOR, ONE THING.
JUDGE DAVILA: SURE.
MR. CLINE: I'M GUESSING WHAT MR. LEACH WILL DO IS LAY A FOUNDATION AND THEN OFFER THE DOCUMENT AS A DEMONSTRATIVE.
JUDGE DAVILA: RIGHT.
MR. CLINE: MAY MY OBJECTION TO THAT BE NOTED SO I DON'T HAVE TO GET UP IN FRONT OF THE JURY?
JUDGE DAVILA: ABSOLUTELY, ABSOLUTELY. YOU CAN GET UP IF YOU WANT, BUT I'LL NOTE YOUR OBJECTION NOW IF YOU WANT. YOUR OBJECTION IS PRESERVED.
MR. CLINE: ALL RIGHT.
JUDGE DAVILA: ANYTHING FURTHER ON THAT, MR. LEACH?
MR. LEACH: I DON'T WANT TO COMPLICATE MATTERS UNDULY, YOUR HONOR, BUT WOULD IT BE POSSIBLE TO OFFER THE FIRST PAGE INTO EVIDENCE AND DISPLAY THE REMAINDER OF THE DOCUMENT? I THINK THE THRUST OF MR. CLINE'S CONCERNS ARE LIMITED TO THE COMMENTARY.
JUDGE DAVILA: THE FIRST PAGE IS --
MR. LEACH: THE FIRST PAGE INCLUDES AN OVERVIEW, THE RECOMMENDATIONS, AND THEN IT BEGINS THE REVIEW AND COMMENTS ON THERANOS-PROVIDED INFORMATION. I THINK MANY OF THE COMMENTS MR. CLINE IS RAISING ABOUT THE EVASIVE NATURE OF THE RESPONSES AND THE POORLY PREPARED SUMMARY ARE LIMITED TO PAGE 2 AND 3.
JUDGE DAVILA: WELL, RIGHT. AND THAT'S A GOOD QUESTION. I NOTE THAT, AS I LOOK THROUGH THIS, I WAS LOOKING, WHEN DOES THE -- FOR MR. CLINE'S POSITION, WHEN DOES THE BAD STUFF START?
MR. CLINE: WELL, THE FIRST BIT OF BAD STUFF IS ON PAGE 1 WHERE DR. WEBER SAYS, "THERANOS HAS BEEN EXCESSIVELY PUSHY IN ACCESSING NEW POINTS OF CONTACT ONCE TURNED DOWN. THEIR MULTIPLE INTERACTIONS CAUSED UNDUE DISTRACTION FROM OUR ONGOING WORK." I MEAN, AGAIN, NONE OF THIS GETS CONVEYED TO MS. HOLMES. IT'S QUITE A DIFFERENT PICTURE THAT GETS CONVEYED. AND SO WE -- IF PAGE 1 COMES IN, I WILL SAY THAT PAGE 1, ASSUMING A FOUNDATION CAN BE LAID, A BUSINESS RECORDS FOUNDATION, I'M ASSUMING MR. LEACH CAN DO THAT, OTHERWISE PAGE 1 IS OKAY. BUT I WOULD ASK THAT, BEGINNING WITH "THERANOS HAS BEEN EXCESSIVELY PUSHY" --
JUDGE DAVILA: THIS IS IN ITEM 3, I THINK.
MR. CLINE: YES. FROM THERE UNTIL THE END OF THAT PARAGRAPH OUGHT TO BE REDACTED. AND WITH THAT REDACTION AND WITH AN APPROPRIATE FOUNDATION, WHICH, AGAIN, I'M SURE MR. LEACH WILL LAY, WE DON'T HAVE A PROBLEM WITH PAGE 1 COMING IN.
JUDGE DAVILA: ALL RIGHT.
MR. LEACH: I DON'T SHARE THE CONCERN ABOUT EXCESSIVELY PUSHY AND UNDUE DISTRACTION, YOUR HONOR, BUT THAT CERTAINLY IS A REASONABLE SOLUTION HERE.
JUDGE DAVILA: ALL RIGHT. WELL, THANK YOU. IF YOU CAN REDACT THAT, I THINK YOU CAN --
MR. LEACH: YES.
JUDGE DAVILA: -- THEN UPON THE PROPER FOUNDATION, THEN PAGE 1, PAGE 1 OF THE REPORT OF EXHIBIT 167.
MR. LEACH: I CAN'T DO THAT, BUT MY SUPERSTAR PARALEGAL, LAKISHA HOLLIMAN, CAN DO THAT.
JUDGE DAVILA: WELL, WE'VE SEEN HER WORK, AND BOTH OF THE TECHNICIANS' WORK AND WE'RE GRATEFUL FOR THEM. OKAY. GREAT.
MR. LEACH: THANK YOU, YOUR HONOR.
JUDGE DAVILA: ALL RIGHT. NOW I NEED TO TALK TO COUNSEL ABOUT ANOTHER MATTER THAT HAS COME UP, AND I'M GOING TO ASK MS. KRATZMANN TO HAND DOWN SOME -- TWO TO EACH SIDE.
COURT CLERK: (HANDING.)
(PAUSE IN PROCEEDINGS.)
JUDGE DAVILA: THANK YOU. I'VE SHARED WITH COUNSEL AN EMAIL THAT MS. KRATZMANN RECEIVED. MY THOUGHT IS TO -- AND THIS REGARDS THE ABILITY OF A JUROR, A SITTING JUROR, AND MY THOUGHT IS TO -- WELL, FIRST OF ALL, LET ME SUGGEST TO COUNSEL, I WANT TO ADDRESS THIS BEFORE WE BEGIN ANY EVIDENCE THIS MORNING, AND WHAT I THOUGHT I WOULD DO IS INVITE THE JUROR IN. IF YOUR TEAM WANTS TO IDENTIFY ONE LAWYER, WE'LL GO IN CHAMBERS AND SPEAK WITH THIS JUROR ABOUT THIS ISSUE ON THE RECORD.
MR. DOWNEY: THAT'S FINE WITH US, YOUR HONOR.
MR. SCHENK: YES, YOUR HONOR.
JUDGE DAVILA: ALL RIGHT. THANK YOU. WE'LL TAKE OUR BREAK THEN BEFORE WE BEGIN EVIDENCE AND MS. KRATZMANN WILL CONTACT YOU WHEN WE CAN BEGIN THAT. MR. LEACH.
MR. LEACH: YOUR HONOR, ONE OTHER MATTER WITH RESPECT TO 167, AND I'M SORRY TO RAISE THIS NOW.
JUDGE DAVILA: YES. NO, NO.
MR. LEACH: I WAS CONVERSING WITH OUR TEAM, AND I JUST WANT TO MAKE SURE THAT I UNDERSTAND THE COURT'S RULING. WE WILL OFFER PAGE 1 WITH THE REDACTION INTO EVIDENCE, BUT WE MAY STILL DISPLAY AS A DEMONSTRATIVE THE REMAINDER OF THE DOCUMENT.
JUDGE DAVILA: THAT'S CORRECT.
MR. LEACH: AND IS IT NECESSARY TO REDACT THE EXCESSIVELY PUSHY LANGUAGE AS TO THE DEMONSTRATIVE PORTION?
JUDGE DAVILA: NO, NO. I'M LETTING THAT IN. HE CAN TALK ABOUT THAT.
MR. LEACH: OKAY.
JUDGE DAVILA: HIS OBSERVATIONS -- "HIS" MR. WEBER'S -- OBSERVATIONS, THEY'RE HIS PERSONAL OBSERVATIONS, AND YOU CAN CERTAINLY CROSS-EXAMINE HIM ON HIS FEELINGS ABOUT -- I VIEW THIS AS THE SAME AS SOMEBODY TESTIFYING ABOUT THEIR -- WHICH A WITNESS CAN DO WHEN THEY TALK TO SOMEONE -- DID THEY APPEAR NERVOUS? DID THEY APPEAR CALM? WERE THEY EXCITED?
MR. CLINE: WELL, YOUR HONOR, IT KIND OF DEFEATS THE PURPOSE IF THE JURY IS SHOWN THE LANGUAGE AND THEN THE ADMITTED DOCUMENT HAS THAT LANGUAGE REDACTED, THE JURY IS GOING TO KNOW WHAT IS UNDER THE REDACTION AND THEY'RE GOING TO -- IF ANYTHING, IT WILL HEIGHTEN THE IMPORTANCE OF IT. SO I WOULD ASK --
JUDGE DAVILA: OH, NO, I'M SORRY. YOU'RE TALKING ABOUT THE BALANCE OF THE REPORT. THAT'S WHAT I THOUGHT YOU WERE TALKING ABOUT, MR. LEACH.
MR. LEACH: YES.
JUDGE DAVILA: NOT PAGE 1. PAGE 1 WILL BE ADMITTED WITH THE REDACTIONS. IT WON'T BE SHOWN WITH THE REDACTIONS. THE BALANCE OF THE EXHIBIT THAT IS GOING TO BE A DEMONSTRATIVE WILL HAVE THAT SAME LANGUAGE IN IT?
MR. CLINE: THE SAME LANGUAGE IT CONTAINS NOW?
JUDGE DAVILA: CORRECT.
MR. CLINE: SO THE DEMONSTRATIVE THAT HE'S GOING TO PUT UP WILL NOT HAVE AN UNREDACTED PAGE 1 ON IT, IT WILL BE THE REMAINING PAGES OF THE EXHIBIT.
JUDGE DAVILA: THE REMAINING PAGES WILL NOT BE REDACTED.
MR. CLINE: UNDERSTOOD. BUT HERE'S WHAT I UNDERSTOOD MR. LEACH TO BE SAYING AND WHAT I WANT TO MAKE SURE DOESN'T HAPPEN. PAGE 1 IS GOING TO COME IN WITH THAT REDACTION.
JUDGE DAVILA: CORRECT.
MR. CLINE: MR. LEACH WILL BE PERMITTED TO PUT UP A DEMONSTRATIVE. THE DEMONSTRATIVE WILL NOT INCLUDE AN UNREDACTED PAGE 1.
JUDGE DAVILA: THAT'S CORRECT.
MR. CLINE: ALL RIGHT.
MR. LEACH: I UNDERSTAND, YOUR HONOR.
JUDGE DAVILA: IT'S PAGE 2 ON, WHATEVER THEY ARE --
MR. CLINE: YES.
MR. LEACH: MAY BE DISPLAYED UNREDACTED?
JUDGE DAVILA: YES.
MR. LEACH: BUT NOT COMING INTO EVIDENCE?
JUDGE DAVILA: RIGHT.
MR. CLINE: THANK YOU.
JUDGE DAVILA: GREAT.
COURT CLERK: COURT IS IN RECESS.
(RECESS FROM 9:10 A.M. UNTIL 9:24 A.M.)