Daniel Mosley and Roger Parloff Evidence Hearings
91 linesSAN JOSE, CALIFORNIA NOVEMBER 2, 2021 P R O C E E D I N G S
(COURT CONVENED AT 8:25 A.M.)
(JURY OUT AT 8:25 A.M.)
JUDGE DAVILA: THANK YOU. PLEASE BE SEATED. WE'RE ON THE RECORD IN THE HOLMES MATTER. ALL COUNSEL ARE PRESENT. MS. HOLMES IS PRESENT. WE'RE OUTSIDE OF THE PRESENCE OF THE JURY. I THOUGHT WE WOULD TAKE UP SOME MATTERS BEFORE THE JURY IS CALLED. LET'S SEE. LET ME JUST CALL OUT WHAT I HAVE ON MY NOTES FOR AGENDA. WE HAVE DOCKET 1103, WHICH IS A MOTION TO EXCLUDE WITNESS PARLOFF; DOCKET 1116, WHICH IS A MOTION TO EXCLUDE WITNESS INITIALS BB. I THINK WE WERE GOING TO TALK ABOUT THOSE TWO THINGS TODAY. ANYTHING ELSE WE SHOULD ADD TO THE AGENDA FROM EITHER SIDE? MR. SCHENK?
MR. SCHENK: GOOD MORNING. YES, THANK YOU. TODAY AFTER MS. PETERSON, THE NEXT WITNESS IS DR. CULLEN. WE DON'T EXPECT DR. CULLEN TO TAKE TOO LONG. AFTER DR. CULLEN, THE GOVERNMENT WILL CALL DANIEL MOSLEY. MR. MOSLEY WAS AN INVESTOR. MR. MOSLEY INVESTED IN ABOUT OCTOBER OF 2014. AND I MET AND CONFERRED WITH THE DEFENSE REGARDING CERTAIN 2015 DOCUMENTS. MR. MOSLEY HAD EMAIL EXCHANGES WITH OTHER POTENTIAL INVESTORS, ONE IN PARTICULAR, IN 2015. AND I ASKED THE DEFENSE IF THEY WERE PLANNING TO SEEK TO USE THOSE OR ADMIT THOSE DURING CROSS, AND THEY, WHILE NOT IDENTIFYING SPECIFIC DOCUMENTS FOR ME, SAID THAT THEY DID ANTICIPATE OFFERING EVIDENCE FROM 2015. AND I THINK WE WOULD BENEFIT FROM SOME GUIDANCE FROM THE COURT ON THIS ISSUE OF COMMUNICATIONS BY INVESTORS AFTER THEY'VE INVESTED, BUT NOT WITH THE DEFENDANT. THE COURT WILL RECALL THAT WE TALKED ABOUT THE ISSUE WITH REGARD TO POST-INVESTMENT CONDUCT THAT INVOLVES THE DEFENDANT, THE DEFENDANT'S STATE OF MIND. BUT I THINK THIS IS AN INSTANCE WHERE THE ONLY RELEVANCE WOULD BE AN INVESTOR'S KNOWLEDGE AFTER THE INVESTOR INVESTED, AND I THINK IT'S BEEN THE GOVERNMENT'S POSITION THROUGHOUT TRIAL, AND WE MADE THIS ARGUMENT TO YOUR HONOR DURING MR. TOLBERT'S TESTIMONY, THAT THE INVESTOR'S KNOWLEDGE AFTER, IN THIS CASE SIX MONTHS OR SO AFTER, INVESTING JUST ISN'T RELEVANT, AND INSTEAD OF RAISING THIS ISSUE THROUGH AN OBJECTION AT THE MOMENT THE DOCUMENT WAS OFFERED, I HAVE COPIES OF THE DOCUMENTS, AT LEAST SOME OF THE ONES THAT I'VE IDENTIFIED. I'D BE HAPPY TO PASS THOSE UP, AND WE CAN TAKE IT UP WHENEVER IT IS CONVENIENT FOR THE COURT, A BREAK BEFORE MR. MOSLEY OR NOW, WHATEVER WORKS FOR THE COURT.
JUDGE DAVILA: ALL RIGHT. THANK YOU. I'M HAPPY TO RECEIVE THOSE JUST TO HAVE THEM IN ADVANCE. MR. WADE, ARE YOU SPEAKING TO THIS? ADRIANA.
MR. SCHENK: (HANDING.)
MR. WADE: I AM, YOUR HONOR. MAYBE IT MAKES SENSE FOR THE COURT TO LOOK AT THE DOCUMENTS. WE CAN ADDRESS THESE DURING THE BREAK SO EVERYONE IS ON THE SAME PAGE AND IT WOULD BE MOST EFFICIENT. WE DON'T KNOW EXACTLY WHAT MR. MOSLEY WILL TESTIFY TO. I DID INDICATE TO THE GOVERNMENT THAT WE MAY SEEK TO OFFER THESE DOCUMENTS, AND OBVIOUSLY WE WOULD NEED TO LAY A FOUNDATION FOR THEM TO BE ADMISSIBLE. I'M NOT SURE IF THE GOVERNMENT'S POSITION IS THAT WITH RESPECT TO THE INVESTOR CONSPIRACY, NO EVENTS RELATING TO THIS SPECIFIC INVESTOR'S IDENTIFIED, OTHER THAN THOSE IDENTIFIED SPECIFICALLY, IN THE INDICTMENT. AND SUBSTANTIVE COUNTS ARE RELEVANT, BUT THEIR CONSPIRACY COUNT IS OBVIOUSLY BROADER THAN THAT. MAYBE TO THE EXTENT THAT THEY'RE NARROWING THAT, THAT WOULD BE -- THAT WOULD CERTAINLY BE RELEVANT FOR THE DEFENSE TO KNOW. I THINK MR. MOSLEY, JUST TO GIVE THE COURT A LITTLE BIT OF CONTEXT, I THINK YOU HEARD A LITTLE BIT THROUGH MS. PETERSON, HE WAS A PARTNER AT CRAVATH IN NEW YORK. A NUMBER OF HIS CLIENTS ENDED UP INVESTING IN THERANOS, MANY OF THEM THROUGH AN INTRODUCTION PROVIDED BY MR. MOSLEY. MR. MOSLEY CONTINUED TO INTERACT WITH BOTH OF THOSE INVESTORS AND HIS CLIENTS, THOSE INVESTORS WHO ARE HIS CLIENTS. AND IN THIS CASE MR. SLACK, WHO IS A REPRESENTATIVE OF THE OPPENHEIMER FAMILY, IT'S MR. OPPENHEIMER -- MR. SLACK IS NOT A CLIENT OF MR. MOSLEY, BUT HE WAS A FRIEND OF HENRY KISSINGER, AND SECRETARY KISSINGER WAS A CLIENT OF --
JUDGE DAVILA: LET ME JUST -- I THINK WE JUST HEARD SOMEBODY COUGH ON A TELEPHONE. IF ANYONE WHO IS ON A PHONE, IF YOU WOULD PLEASE MUTE YOUR PHONE, WE ALL HERE IN CALIFORNIA WOULD APPRECIATE IT. THANK YOU. I'M SORRY, MR. WADE, FOR THE INTERRUPTION.
MR. WADE: NO PROBLEM AT ALL, YOUR HONOR. DR. KISSINGER WAS A CLIENT OF MR. MOSLEY, AND I BELIEVE AT DR. KISSINGER'S REQUEST MR. MOSLEY WAS INTERACTING WITH MR. SLACK OF THE OPPENHEIMER FAMILY. THERE WERE A LOT OF INTERACTIONS THAT MR. MOSLEY HAS THROUGHOUT THE FALL OF 2014 THAT I THINK ARE RELEVANT BOTH BECAUSE HE PERSONALLY MAKES AN INVESTMENT DECISION, SOME OF HIS CLIENTS MAKE INVESTMENTS, AND HE SORT OF IS PICKING INFORMATION UP THROUGHOUT THE FALL. AND SO SOME OF THOSE INTERACTIONS RELATED TO THE FINANCIAL PROJECTIONS THAT THE COURT HAS HEARD EVIDENCE COME IN ABOUT, AND SOME OF THE EMAILS THAT WE MAY SEEK TO OFFER REFLECT MR. MOSLEY'S VIEW OF WHAT WAS REALISTIC IN TERMS OF THE FINANCIAL NUMBERS AND THE PROJECTIONS THAT WERE PROVIDED AS COMMUNICATED TO MR. SLACK. SO IT REFLECTS MR. MOSLEY'S UNDERSTANDING OF INFORMATION HE WAS OBTAINING ABOUT THE FINANCES OF THE COMPANY AS HE WAS DEALING WITH THERANOS THROUGHOUT THE FALL OF 2014. SO THAT'S A LITTLE BIT OF CONTEXT.
JUDGE DAVILA: IS THAT POST-INVESTMENT THEN?
MR. WADE: IT'S POST-INVESTMENT, BUT WE THINK IT REFLECTS HIS UNDERSTANDING AS TO LIMITATIONS ON THE PROJECTIONS, WHICH IT'S HARD TO SEGREGATE JUST HIS INVESTMENT DECISION HERE, YOUR HONOR, BECAUSE I THINK AS YOU'LL HEAR, THERE ARE A LOT OF INTERACTIONS THAT MR. MOSLEY HAS STARTING IN AUGUST OF 2014 AND CONTINUING THROUGHOUT THE FALL. HE ULTIMATELY MAKES A PERSONAL INVESTMENT DECISION IN LATE OCTOBER 2014, BUT THERE ARE -- THERE ARE A VARIETY OF INTERACTIONS THAT HAPPEN THROUGHOUT THAT PERIOD, INCLUDING SOME OF THE FINANCIAL PROJECTIONS AND THINGS RELATED TO THE COMPANY. SO WHEN HE'S COMMUNICATING WITH MR. SLACK IN THE FUTURE, WE THINK THAT'S EVIDENCE OF WHAT HE UNDERSTOOD EARLIER IN TIME BECAUSE HE'S SUGGESTING THAT THERE ARE LIMITATIONS ON THE ABILITY TO PROJECT FIVE YEARS OUT, FOR EXAMPLE, THAT MR. BALWANI WOULD NOT BE IN A POSITION TO DO THAT, ET CETERA. SO WE THINK THAT --
JUDGE DAVILA: I'M SORRY. I APOLOGIZE. BUT JUST SO I CAN KEEP IT BEFORE I LOSE IT --
JUDGE DAVILA: -- SO HIS POST-INVESTMENT COMMENTS VIA EMAIL AND OTHERS WOULD BE RELEVANT BECAUSE IT SHOWS HIS CONTINUED THOUGHTS OR PROJECTIONS ABOUT HIS INVESTMENT IN 2014 LOOKING BACKWARDS? I GUESS IS THAT HOW --
MR. WADE: THERE'S NO INDICATION THAT HE GOT ADDITIONAL INFORMATION ABOUT THE FINANCES AFTER HIS INVESTMENT DECISION. SO I THINK IT'S EVIDENCE OF WHAT HE UNDERSTOOD ABOUT THE FINANCES AT THE TIME HE MADE THE INVESTMENT DECISION, BUT WE CAN CERTAINLY -- IF THE UNDERSTANDING OF THAT IS NOT RIGHT, THE WITNESS CAN CERTAINLY CLARIFY THAT. IT WOULD BE, FOR EXAMPLE, IF I HAD INTERACTIONS WITH THE COURT AND ONE OF MY COLLEAGUES WAS GOING TO COME OUT AND ARGUE WITH YOU, AND ARGUE IN FRONT OF YOU AND I SAID TO ONE OF MY COLLEAGUES, JUDGE DAVILA IS A VERY PLEASANT JUDGE, HE GIVES YOU A CHANCE TO MAKE YOUR ARGUMENT, HE ASKS A LOT OF QUESTIONS, HE'S WELL PREPARED. EVEN THOUGH I'M COMMUNICATING THAT THREE MONTHS IN THE FUTURE, THAT IS AN INDICATION OF THE INFORMATION I'VE OBTAINED AS A RESULT OF MY EXPERIENCE, YOU KNOW, HERE TODAY. AND SO I THINK IT'S SIMILAR EVIDENCE THAT RELATES TO THAT. BUT MAYBE THE COURT CAN LOOK AT THE EMAILS AND I THINK YOU'LL GET A SENSE OF, YOU KNOW, A SENSE OF THAT. ONE OTHER ISSUE THAT I WANT TO FLAG FOR THE COURT WITH RESPECT TO MR. MOSLEY. HE IS A LAWYER, OR WAS A LAWYER AT THE TIME THAT HE WAS INTERACTING. HE HAS ASSERTED PRIVILEGE OVER A LOT OF COMMUNICATIONS INVOLVING VARIOUS CLIENTS, AND I JUST WANTED TO MAKE THE COURT AWARE OF THAT SO IT DIDN'T COME AS A SURPRISE. WE HAVE A SENSE OF WHERE THOSE ASSERTIONS ARE AND WE'RE OF COURSE GOING TO DO OUR BEST TO STEER CLEAR OF ANYTHING OTHER THAN JUST SORT OF PRIVILEGE LOG LEVEL INFORMATION AS BEST WE CAN. BUT I JUST WANTED TO RAISE THAT IN THE EVENT THAT IT COMES UP DURING THE TESTIMONY OF MR. MOSLEY, BECAUSE THROUGHOUT THE PERIOD WHERE HE'S CONSIDERING THE INVESTMENT, HE'S HAVING PRIVILEGED COMMUNICATIONS WITH VARIOUS CLIENTS.
JUDGE DAVILA: SO IT SOUNDS LIKE YOUR EXAMINATION WOULD SKIRT THOSE ISSUES SO IT DOESN'T HAVE TO BE RAISED TO THE EXTENT THAT HIS TESTIMONY IS SOUGHT BY YOU.
MR. WADE: IT WILL COME UP IN HIS TESTIMONY TO THE EXTENT THAT HE IS HAVING COMMUNICATIONS, AND WHEN HE'S HAVING COMMUNICATIONS, THE SUBSTANCE OF THOSE COMMUNICATIONS, YOU KNOW, IT OBVIOUSLY WOULD NOT BE APPROPRIATE FOR US TO ASK ABOUT GIVEN HE'S ASSERTED THE PRIVILEGE. SO THERE ARE A COUPLE OF OCCASIONS WHERE A CERTAIN LEVEL OF INFORMATION IS COMMUNICATED TO THIRD PARTIES. FOR EXAMPLE, HE MAY HAVE A COMMUNICATION WITH DR. KISSINGER, THE CONTENTS OF WHICH WE DON'T REALLY KNOW, BUT THEN HE WILL COMMUNICATE A VERY LIMITED PIECE OF INFORMATION TO MS. HOLMES LIKE, "I HAD A CONVERSATION, I HOPE WE CAN MEET AGAIN IN THE FUTURE." YOU KNOW, NONE OF THE SUBSTANCE OF THE PRIVILEGE INFORMATION, BUT IT'S CLEAR THAT HE IS HAVING A PRIVILEGED COMMUNICATION. SO THE FACT OF THOSE COMMUNICATIONS WILL COME UP, BUT I JUST WANTED TO ALERT THE COURT TO THE ISSUE SO NO ONE WAS CAUGHT OFF GUARD. AND WE'LL OF COURSE DO OUR BEST TO KIND OF CAREFULLY NAVIGATE OUR WAY THROUGH THOSE ISSUES.
JUDGE DAVILA: SURE. THANK YOU. IT SOUNDS LIKE YOU'RE NOT GOING TO BE CALLING UPON THE WITNESS OR THE COURT TO MAKE A DECISION AS TO WHETHER OR NOT A PRIVILEGE SHOULD BE APPROPRIATE.
JUDGE DAVILA: AND I'M INFORMED OF THAT. IT SOUNDS LIKE YOUR CROSS WILL BE LENGTHY OF THIS WITNESS.
JUDGE DAVILA: OKAY. MR. SCHENK, LET ME DRAW YOU BACK TO THE POST-INVESTMENT COMMENT AND THE OBSERVATIONS, AS MR. WADE HAS INDICATED.
MR. SCHENK: THANK YOU, YOUR HONOR. TWO POINTS. FIRST, THE GOVERNMENT IS NOT NARROWING THE CONSPIRACY PERIOD, SIMPLY QUESTIONING THE RELEVANCE OF SPECIFIC DOCUMENTS IN THE 2015 TIME PERIOD. THE LINE THAT MR. WADE IS ATTEMPTING TO DRAW FOR THE COURT, AND THAT IS 2015 STATEMENTS, THOUGHTS ARE RELEVANT IF THEY WERE HELD BY THE WITNESS BEFORE HE INVESTED IS FAIR GAME FOR CROSS. IT JUST DOESN'T REQUIRE THE ADMISSION OF THESE DOCUMENTS, AND THAT'S THE LINE THAT I'M ADVOCATING FOR. IT'S APPROPRIATE FOR MR. WADE TO ASK THE WITNESS WHAT HE KNEW IN 2014. THAT DOES NOT REQUIRE MR. WADE TO DO IT BY INTRODUCING DOCUMENTS FROM 2015 AND THEN SAYING, WAS THAT WHAT YOU THOUGHT IN 2014? THAT'S NOT NECESSARY, AND IT'S INTRODUCING IRRELEVANT EVIDENCE. WHAT IS RELEVANT IS, WHAT DID MR. MOSLEY THINK BEFORE HE INVESTED? AND I'M NOT OBJECTING TO THAT. I THINK THAT THAT IS APPROPRIATE. BUT IT SHOULDN'T BE DONE THROUGH THE INTRODUCTION OF 2015 DOCUMENTS.
JUDGE DAVILA: SO, SO IF HE SAYS, WHAT WERE YOU THINKING IN 2014 AND HE GETS A RESPONSE, CAN HE -- PARDON ME. CAN HE ASK, DID YOU MEMORIALIZE THAT IN AN EMAIL IN 2015? DID YOU SAY THE SAME THING? DID YOUR MIND CHANGE IN 2015? YES OR NO? DID YOU MEMORIALIZE THAT IN SOME FASHION? WITHOUT GETTING THE DOCUMENT IN.
MR. SCHENK: IF IN YOUR HONOR'S EXAMPLE THE TWO ARE CONSISTENT, HE SAYS SOMETHING IN 2014 THAT'S MEMORIALIZED IN 2015, I SUPPOSE IF THE QUESTION IS, DID YOU WRITE THAT DOWN IN AN EMAIL IN 2015, I DON'T HAVE AN OBJECTION TO IT. WHAT CONCERNS ME IS TO SUGGEST THAT THIS OUT-OF-COURT STATEMENT TO SOMEONE THAT MR. MOSLEY -- MR. WADE EXPLAINED THE TENUOUS RELATIONSHIP. IT'S NOT A CLIENT OF MR. MOSLEY'S, IT'S A FRIEND OF A FRIEND, AND MR. MOSLEY SENDS AN EMAIL TO THIS FRIEND OF A FRIEND. I DON'T THINK THAT DOCUMENT NEEDS TO COME IN EVEN IF IT IS CONSISTENT. THIS AFTER-THE-FACT CONSISTENT STATEMENT IS HEARSAY AND JUST NOT RELEVANT.
JUDGE DAVILA: SURE. SO IF HIS OPINION OF THE INVESTMENT IN 2014 CONTINUED THROUGH 2015, CAN'T YOU JUST ASK HIM THAT, MR. WADE? DID YOUR MIND CHANGE? NO, IT DIDN'T. AND YOU MEMORIALIZED THAT? YOU WERE CONSISTENT IN THAT OPINION? YES, I WAS. THANK YOU VERY MUCH. WHY DO YOU NEED THE DOC? AND I'LL LOOK AT THE DOCS. I DON'T KNOW, MAYBE THEY HAVE SOME OTHER INFORMATION, BUT --
MR. WADE: IT MAY BE THAT THE QUESTIONING WILL ADEQUATELY REVEAL IT. BUT JUST TO MAKE THE EXAMPLE CONCRETE HERE, AS I SAID, MR. MOSLEY IS COMMUNICATING WITH THERANOS AT DIFFERENT POINTS IN TIME THROUGHOUT THE FALL. HE ULTIMATELY MAKES A PERSONAL INVESTMENT DECISION. HE HAS MANY CLIENTS WHO MAKE INVESTMENT DECISIONS IN THE FALL AND INTO THE LATE FALL. ON FEBRUARY 5TH, 2015, HE COMMUNICATES WITH MR. SLACK, WHO HE HAS BEEN COMMUNICATING WITH FREQUENTLY. THERE ARE FREQUENT COMMUNICATIONS AT THE REQUEST OF DR. KISSINGER. ONE OF THE THINGS THEY ASK ABOUT ARE, MR. SLACK'S COLLEAGUES ASK ABOUT ARE DETAILED PROJECTIONS. AND IF YOU LOOK AT EXHIBIT 4380, MR. MOSLEY RESPONDS, "I SUSPECT IT WILL BE VERY HARD FOR SUNNY TO GIVE MUCH RELIABLE GUIDANCE ON A FIVE YEAR BASIS GIVEN HOW FAST THINGS ARE MOVING AND THE VARIABLES. I THINK IT WILL BE EASY TO GET SUNNY TO EXPLAIN THE MARKET SHARE THEY ARE TARGETING AND THE VALUES LIKELY GENERATED BY THAT SHARE." SO THAT CLEARLY -- HE'S NOT -- HE'S INTERACTED WITH MR. BALWANI ABOUT THESE FINANCIAL ISSUES. THIS CLEARLY REFLECTS HIS UNDERSTANDING AS TO THE LIMITATIONS ON THE PROJECTIONS, AND THE NUMBER OF QUICKLY MOVING VARIABLES. IN OTHER WORDS -- AND WE'LL SEE. MAYBE IT WON'T BE RELEVANT. MAYBE HE'LL CONCEDE THAT THERE WAS A TREMENDOUS AMOUNT OF UNCERTAINTY RELATED TO THE PROJECTIONS, AND MAYBE WE DON'T NEED TO GET INTO THIS, BUT IF THE WITNESS SUPPORTS A VIEW THAT DEPARTS FROM WHAT HE COMMUNICATES TO MR. SLACK, I THINK IT'S APPROPRIATE IMPEACHMENT BY CONTRADICTION EVIDENCE.
JUDGE DAVILA: WELL, THERE'S A LOT OF OTHER INFORMATION IN THIS EMAIL. THE NEXT PARAGRAPH SPEAKS TO YOUR CLIENT AND THINGS ABOUT HER. I'M NOT SURE YOU WANTED THAT ALSO. BUT IT SEEMS THAT THIS GIVES -- IT'S HIS OPINION OF WHAT MR. BALWANI WOULD DO, COULD DO, AND SHOULD DO, AND I'M NOT SURE THAT'S APPROPRIATE. BUT LET'S LOOK AT THIS AS WE GET -- LET ME LOOK AT THESE THINGS, THESE EMAILS, AND WE'LL -- I THINK IT'S WISE TO TAKE IT UP AS YOU SUGGEST, MAYBE AT A BREAK PRIOR TO THE WITNESS'S TESTIMONY.
JUDGE DAVILA: GREAT. THANK YOU. I TALKED ABOUT THE OTHER ITEMS THAT I HAD ON MY AGENDA, BUT ARE THERE ANY OTHER ITEMS THAT WE SHOULD DISCUSS THIS MORNING?
MR. SCHENK: NO, YOUR HONOR.
JUDGE DAVILA: OKAY. I MENTIONED 1116, THAT WAS A MOTION TO EXCLUDE WITNESS BB. THAT'S ON THE TABLE NOW. SHOULD WE DEFER THAT? GOOD MORNING, MR. BOSTIC.
MR. BOSTIC: GOOD MORNING, YOUR HONOR. IT'S THE GOVERNMENT'S REQUEST THAT WE TAKE THAT UP PERHAPS TOMORROW. THAT MOTION WAS FILED BY THE DEFENSE ON SATURDAY. THIS WITNESS WILL NOT TESTIFY TODAY, AND MOST LIKELY NOT TOMORROW EITHER. THE GOVERNMENT WOULD LIKE TO FILE A WRITTEN RESPONSE TO THE DEFENSE'S MOTION, AND IT INTENDS TO DO THAT SOMETIME TODAY. SO OUR REQUEST, IF THE COURT IS AMENABLE, IS THAT WE TALK ABOUT IT TOMORROW AT THIS TIME, OR POSSIBLY THURSDAY.
JUDGE DAVILA: MS. TREFZ, GOOD MORNING.
MS. TREFZ: GOOD MORNING. I'M HAPPY TO TALK ABOUT IT TOMORROW. ONE THING I WOULD REQUEST IS THAT IF YOU GUYS HAVE UPDATED INFORMATION, WE'VE ONLY GOT ONE 302 FROM ALMOST A YEAR AND A HALF AGO OR MORE AT THIS POINT. SO IF YOU DO HAVE UPDATED INFORMATION, WE WOULD LOVE TO GET IT BEFORE WE DO THE ARGUMENT.
MR. BOSTIC: WE CAN DO THAT, YOUR HONOR.
JUDGE DAVILA: GREAT. OKAY. THANK YOU.
MS. TREFZ: SURE.
JUDGE DAVILA: SO WE'LL DEFER 1116 FOR TOMORROW MORNING THEN.
MS. TREFZ: OKAY.
JUDGE DAVILA: AND THEN I HAD 1103, WHICH WAS A MOTION ABOUT MR. PARLOFF. MR. CLINE, GOOD MORNING.
MR. CLINE: GOOD MORNING, YOUR HONOR. JOHN CLINE FOR MS. HOLMES. WOULD IT BE POSSIBLE FOR ME TO TAKE THIS OFF WHILE WE'RE TALKING?
JUDGE DAVILA: IT'S SO BECOMING, MR. CLINE, I'M NOT SURE.
(LAUGHTER.)
JUDGE DAVILA: SURE. GO RIGHT AHEAD.
MR. CLINE: THANK YOU VERY MUCH. YOUR HONOR, WE HAVE FILED 1103, WHICH IS A MOTION IN LIMINE CONCERNING MR. PARLOFF'S TESTIMONY. PROBABLY THE BEST EXPRESSION OF OUR POSITION IS THE REPLY, WHICH IS 1117 FILED YESTERDAY. RELATED TO THIS IS 1102, WHICH IS OUR OBJECTIONS TO MAGISTRATE JUDGE COUSINS'S ORDER QUASHING OUR SUBPOENA TO MR. PARLOFF. AND THE REASON THEY'RE RELATED IS THAT I THINK THE PRINCIPAL CONCERN WITH THE SUBPOENA HAS TO DO WITH RELEVANCE OF THE MATERIALS WE'RE SELECTING, AND IN OUR VIEW THE BROADER THE SCOPE OF MR. PARLOFF'S TESTIMONY, THE MORE APPARENT THE RELEVANCE OF THE MATERIALS THAT WE'RE SEEKING, AND THE REVERSE IS TRUE AS WELL. I THINK MR. PARLOFF'S LAWYERS, MR. KORZENIK AND MR. KOLTUN, ARE ON THE PHONE SUPPOSEDLY TO ADDRESS THE SUBPOENA ISSUE AS YOUR HONOR WANTS TO ADDRESS IT.
JUDGE DAVILA: OKAY. THANK YOU. IS THIS RELEVANT TO TALK ABOUT THIS MORNING?
MR. CLINE: WE DON'T HAVE TO. MR. PARLOFF IS NOT COMING UNTIL WHEN? NEXT WEEK.
MR. BOSTIC: MR. PARLOFF IS NOT COMING THIS WEEK. WE'RE HAPPY TO DISCUSS IT ANY TIME THE COURT WISHES.
JUDGE DAVILA: THANK YOU. I'M COGNIZANT OF TIME. IT'S ABOUT QUARTER TILL THE HOUR, AND THIS MAY TAKE A LITTLE LONGER THAN THAT. MAYBE NOT.
MR. CLINE: I THINK THIS WILL TAKE A LITTLE WHILE. WE MAY WANT TO PUT IT OFF UNTIL TOMORROW MORNING. I DON'T THINK IT'S URGENT THAT WE DECIDE IT TODAY.
JUDGE DAVILA: DO YOU AGREE WITH THAT?
MR. KORZENIK: YOUR HONOR, DAVID KORZENIK SPEAKING. WE WILL BE AVAILABLE WHENEVER AT THE COURT'S CONVENIENCE TO DISCUSS IT. IT APPEARS THAT MUCH OF IT IS MOOT AT THIS POINT.
JUDGE DAVILA: THANK YOU. PLEASE STATE YOUR NAME AGAIN.
MR. KORZENIK: MY NAME IS DAVID KORZENIK, K-O-R-Z, AS IN ZEBRA, E-N-I-K, AND WE'RE APPEARING ON BEHALF OF JOURNALIST AND WITNESS ROGER PARLOFF.
JUDGE DAVILA: THANK YOU. AND YOU'RE APPEARING TELEPHONICALLY FOR THIS HEARING; IS THAT RIGHT?
MR. KORZENIK: THAT'S CORRECT.
JUDGE DAVILA: MR. BOSTIC?
MR. BOSTIC: THAT'S CORRECT, YOUR HONOR. ON TIMING, YES, THIS WITNESS WILL TESTIFY POSSIBLY NEXT WEEK AT THE EARLIEST, SO WHENEVER IT IS CONVENIENT FOR THE COURT AND THE DEFENSE TO RAISE THIS ISSUE, WE'LL BE READY.
JUDGE DAVILA: OKAY. THANK YOU. I DID NOTE YOUR OPPOSITION, WHICH IS 1115, AND THAT SEEMS TO LIMIT THE -- AT LEAST IT INFORMS THE PARTIES THAT THE GOVERNMENT -- AS TO THE LIMITS OF THE GOVERNMENT'S EXAMINATION OF THE WITNESS. I WILL SAY, THOUGH, I DO HAVE AND I HAVE READ THAT, OF COURSE, AND YOUR REPLY. I DID HAVE SOME QUESTIONS, AND WHAT WE'LL DISCUSS WHEN WE TALK ABOUT THIS, I THINK MR. BOSTIC, YOU INFORM SIX BASIC AREAS OF INQUIRY, QUESTIONS I GUESS, IN YOUR PLEADINGS, AND I THINK WHAT I'M FOCUSSED ON IS REALLY THE -- AND THANK YOU FOR THAT, FOR THAT LIMITATION. I THINK THAT DOES TAKE CARE OF MANY ITEMS. WHAT CONCERNS ME, THOUGH, IS WHEN YOU DESCRIBE THE CONTEXTUAL NATURE OF THE EXAMINATION AND WHAT THAT MEANS, AND THAT'S WHAT I'M GOING TO BE ASKING YOU ABOUT, WHAT DOES THAT MEAN AND HOW MIGHT THAT TRAVEL INTO THE CONVERSATION, THE EXAMINATION? I JUST DON'T KNOW WHAT YOU HAD IN MIND ABOUT THAT, BUT I -- YOU'LL TELL ME.
MR. CLINE: AND, YOUR HONOR, WE AGREE THAT'S THE ISSUE AT THIS POINT, AND WE'LL BE PREPARED TO DISCUSS IT AS WELL.
JUDGE DAVILA: RIGHT. AND IT MAY BE THAT, YOU KNOW, THE CONTEXT MEANS A FOUNDATION, THAT'S ALL, DID YOU WRITE THE ARTICLE? DID YOU DO -- WERE YOU ASSIGNED A TASK? DID YOU INVESTIGATE? DID YOU INTERVIEW? DID YOU ASK THESE QUESTIONS? DID SHE SAY -- WHAT WERE HER ANSWERS? THANK YOU VERY MUCH. IS THAT THE CONTEXT?
MR. CLINE: YOUR HONOR, THAT IS THE CONTEXT, AND NONE OF IT IS OBJECTIONABLE. IT'S THE BROADER ISSUES THAT WE'LL BE PREPARED TO ADDRESS.
JUDGE DAVILA: RIGHT. I THINK THERE WAS ANOTHER LINE THAT COMES TO MIND, MR. BOSTIC, ABOUT THE REASONS WHY CERTAIN QUESTIONS WERE ASKED AND OTHERS WERE NOT, AND THAT'S CONTEXTUAL ALSO, BUT WE CAN TALK ABOUT THAT. I JUST WANT TO GIVE YOU -- THAT'S WHERE I'M GOING TO NEED SOME HELP FROM YOUR SIDE.
MR. BOSTIC: I APPRECIATE THAT, YOUR HONOR. WE'LL BE READY TO DISCUSS IT. JUST TO BRIEFLY PREVIEW IT FOR THE COURT, WHAT WE'RE SEEKING TO HAVE MR. PARLOFF TESTIFY TO IS WHAT WE WOULD ASK ANY WITNESS WHO IS TESTIFYING ABOUT A CONVERSATION THAT HE PARTICIPATED IN. SO THE CONTEXT WILL INCLUDE INFORMATION NECESSARY FOR THE JURY TO PLACE THE SPECIFIC STATEMENTS THAT THEY'RE GOING TO HEAR IN THE CONTEXT OF A SERIES OF CONVERSATIONS THAT LASTED MANY HOURS. WE DO NOT INTEND TO PLAY THE ENTIRETY OF THE RECORDINGS. THAT WOULD TAKE MORE THAN A TRIAL DAY TO PUT IN FRONT OF THE JURY. SO INSTEAD WE WOULD LIKE THE JURY TO HAVE THE BENEFIT OF MR. PARLOFF'S GENERAL STATEMENTS AND CONTEXTUAL INFORMATION ABOUT HOW SPECIFIC STATEMENTS SPIT IN -- SORRY, FIT INTO THE OVERALL CONVERSATIONS. BUT WE'LL BE READY TO DISCUSS THAT.
JUDGE DAVILA: I SEE. THANK YOU. AND THE OTHER ISSUES THAT PERHAPS INTERESTS MR. PARLOFF'S LAWYERS WHO ARE ON THE LINE IS TO WHETHER OR NOT THE EXAMINATION WILL NECESSARILY CALL UPON OUTSIDE MATERIAL THAT I THINK WAS THE FORM OF YOUR 17 SUBPOENA AND THOSE ISSUES.
MR. CLINE: RIGHT. AND I WILL READILY ACKNOWLEDGE -- AND, AGAIN, WE CAN GET INTO THIS IN MORE DETAIL -- THAT THE MORE THAT MR. PARLOFF IS SIMPLY AUTHENTICATING TAPES AND RECOUNTING CONVERSATIONS THAT AREN'T TAPED, AUTHENTICATING HIS ARTICLE, THE LESS RELEVANCE THE MATERIALS HAVE. THE BROADER THE SCOPE OF HIS TESTIMONY, THE MORE HE GETS INTO HIS SUBJECTIVE REASONING ABOUT ALL OF THIS AND THAT, ALL OF WHICH WE SAY IS IRRELEVANT, THE MORE THOSE MATERIALS BECOME RELEVANT. SO THAT'S THE CONNECTION BETWEEN THE TWO. AND I DON'T WANT TO SPEAK FOR MR. KORZENIK, BUT I THINK THAT'S PROBABLY THE REASON WHY IN HIS OWN PLEADING HE SAYS BASICALLY THE TESTIMONY IS GOING TO BE VERY CONSTRICTED.
JUDGE DAVILA: I THINK YOU'RE RIGHT. AND THEN TO YOUR TEAM, MR. CLINE, IF THERE IS SUCH A LIMITATION, OF COURSE YOU COULDN'T OPEN THAT DOOR ON CROSS-EXAMINATION AND THEN SAY, OH, NOW WE NEED THAT MATERIAL. IF MR. BOSTIC LIMITS HIS EXAMINATION, I'M TELLING YOU BASIC THINGS, BUT I JUST WANT TO SET THE TABLE FOR YOU.
MR. CLINE: IF THE TESTIMONY IS LIMITED AS WE THINK IS APPROPRIATE, I WILL BE EXTRAORDINARILY CONSCIOUS OF DOOR OPENING.
JUDGE DAVILA: OKAY. ALL RIGHT. THANKS VERY MUCH. WE'LL TAKE -- WE'LL TAKE THIS UP.
MR. KORZENIK: YOUR HONOR, JUST A QUESTION -- THIS IS DAVID KORZENIK SPEAKING -- THAT YOU MAY BE -- WE SHOULD BE AVAILABLE PERHAPS TOMORROW MORNING AT THIS TIME?
JUDGE DAVILA: WELL, IT MAY BE WE'LL DISCUSS THIS TOMORROW MORNING. IF YOU WOULD LIKE TO PHONE IN, WE'RE HAPPY TO HEAR FROM YOU.
MR. KORZENIK: OKAY.
JUDGE DAVILA: ALL RIGHT.
MR. KORZENIK: IT SEEMS LIKE MUCH OF IT IS KIND OF MOOT AT THIS POINT AND THAT THE RULING OF MAGISTRATE JUDGE COUSINS WILL STAND, AND THAT REALLY THE RULE 17 ISSUES AND OBJECTIONS THAT MR. CLINE IS RAISING HAVE KIND OF FALLEN BY THE WAYSIDE.
MR. CLINE: I THINK, YOUR HONOR, THAT'S A BIT OF AN OVERSTATEMENT, BUT THAT MAY BE THE ULTIMATE OUTCOME.
MR. KORZENIK: YEAH, BECAUSE I DON'T REALLY SEE HOW ANY OF THESE OTHER INTERVIEWEES WOULD HAVE A BEARING ON ANY KIND OF CONTEXT ISSUE, BROAD OR NARROW.
JUDGE DAVILA: WELL, WE'LL -- THANK YOU FOR YOUR OBSERVATIONS. WE'RE HERE ON THE WEST COAST AND I APPRECIATE THE EAST COAST VIEW OF THINGS.
(LAUGHTER.)
JUDGE DAVILA: WE'RE GOING TO TAKE THIS UP TOMORROW AGAIN, I THINK IN THE MORNING, SO WE'RE HAPPY TO HEAR ABOUT YOUR THOUGHTS AGAIN THEN. BUT THANKS FOR YOUR OBSERVATIONS. IT MAY BE -- THIS IS WHAT HAPPENS IN A TRIAL WHEN YOU HAVE GOOD LAWYERS WHO MEET AND CONFER AND RECOGNIZE ISSUES AND PARE THEM DOWN, AND WE'LL HAVE THAT DISCUSSION TOMORROW, SIR. AND IF WE NEED SOME HELP FROM YOU, WE'LL BE HAPPY TO HEAR FROM YOU. THANK YOU.
MR. KORZENIK: I'LL BE AVAILABLE.
MR. BOSTIC: THANK YOU.
MR. CLINE: THANK YOU.
JUDGE DAVILA: LET ME -- I DO WANT TO ASK THE PARTIES A QUESTION, OR FIRST GIVE SOME INFORMATION. JUROR NUMBER 5, AS TO OUR SCHEDULE -- WE'RE GOING TO DISCONNECT OUR FRIENDS FROM THE EAST COAST NOW.
MR. KORZENIK: GOOD.
(DISCONNECTED.)
JUDGE DAVILA: AND FOR JUROR NUMBER 5, I BELIEVE ON NOVEMBER 3RD, WE NEED TO END AT 3:00 P.M. IS THAT RIGHT, MS. KRATZMANN?
COURT CLERK: YES, YOUR HONOR.
JUDGE DAVILA: AND THEN ALSO NOVEMBER 29TH IS A MONDAY, AND WE'LL NEED TO START PERHAPS AT 10:00 A.M. THERE'S SOME TRAVEL WITH THIS WITNESS. SHE'LL BE AT THE SAN JOSE AIRPORT AT 9:15. SO WE'LL SHOOT FOR 10:00 O'CLOCK TO START ON NOVEMBER 29TH. AND IT MAY BE, MS. KRATZMANN, LET'S SEE IF WE CAN -- MAYBE WE CAN MOVE OUR CRIMINAL CALENDAR THAT DAY TO DECEMBER 3RD IN THE AFTERNOON.
COURT CLERK: YES, YOUR HONOR.