Roger Parloff Testimony, Subpoena, and Privilege Hearing
220 linesSAN JOSE, CALIFORNIA NOVEMBER 8, 2021 P R O C E E D I N G S
(COURT CONVENED AT 10:04 A.M.)
(JURY OUT AT 10:04 A.M.)
JUDGE DAVILA: LET'S GO ON THE RECORD IN THE HOLMES MATTER, 18-258. THIS IS A SESSION OUTSIDE OF THE PRESENCE OF THE JURY TO DISCUSS CERTAIN MOTIONS. LET'S SEE, THE GOVERNMENT IS PRESENT, MR. SCHENK, MR. BOSTIC, MR. LEACH. THE DEFENSE IS PRESENT. MR. CLINE, ARE YOU GOING TO ARGUE THIS?
MR. CLINE: I AM. AND MS. HOLMES IS NOT HERE, BUT SHE FILED A WAIVER OF HER APPEARANCE.
JUDGE DAVILA: YES, I DID RECEIVE THAT. SO DO YOU FORMALLY THEN WAIVE HER APPEARANCE AND AGREE TO PROCEED IN THIS MATTER WITHOUT HER BEING PERSONALLY PRESENT, MR. CLINE?
MR. CLINE: WE DO.
JUDGE DAVILA: ALL RIGHT. THANK YOU. ALSO, I THINK WE HAVE SOMEONE PARTICIPATING ON THE TELEPHONE?
MR. KORZENIK: YES, YOUR HONOR. DAVID KORZENIK READY TO ADDRESS THE PENDING MOTION. AND ALSO WITH ME LISTENING IS JOSH COLTON.
JUDGE DAVILA: ALL RIGHT. THANK YOU. GOOD MORNING. COUNSEL, IF YOU COULD COME FORWARD, PLEASE. THANK YOU. THIS MORNING WE'RE DISCUSSING DOCKET 1103, WHICH IS MS. HOLMES'S MOTION TO EXCLUDE CERTAIN TESTIMONY OF ROGER PARLOFF AND TO EXCLUDE IT LOOKS LIKE EXHIBIT 3733. I'VE READ THAT, AS WELL AS 1115, WHICH IS THE GOVERNMENT'S OPPOSITION. AND I'VE ALSO READ 1114, WHICH IS THE KORZENIK OPPOSITION AND RESPONSE. AND I THINK 1117 WAS ALSO THE GOVERNMENT'S -- EXCUSE ME, MR. CLINE. THAT WAS YOUR REPLY I THINK?
MR. CLINE: YES, YOUR HONOR.
JUDGE DAVILA: RIGHT. SO HAVING READ ALL OF THOSE THINGS, INCLUDING MR. BOSTIC'S STATEMENT -- AND LAST TIME, LAST TIME WE WERE HERE, WE WERE DISCUSSING A LITTLE BIT IN ANTICIPATION WHAT CONTEXT MEANS AND THOSE ADDITIONAL QUESTIONS THAT YOU WANT TO ASK. MY SENSE IS THAT WE SHOULD ASK MR. BOSTIC TO GO FORWARD. BUT, MR. CLINE, ANYTHING YOU WOULD LIKE TO STATE BEFORE WE TURN TO MR. BOSTIC?
MR. CLINE: I THINK IT WOULD BE HELPFUL TO HAVE MR. BOSTIC GO FORWARD. I WILL SAY THIS, THAT MR. BOSTIC AND I SPOKE ON FRIDAY. IT WAS A GOOD CONVERSATION. I'M NOT SURE THAT WE NARROWED OUR DIFFERENCES, BUT I THINK EACH OF US UNDERSTANDS EACH OTHER'S POSITIONS MORE CLEARLY. SO I THINK THIS SHOULD PROCEED PRETTY EFFICIENTLY.
JUDGE DAVILA: ALL RIGHT. THANK YOU. MR. BOSTIC?
MR. BOSTIC: YES. THANK YOU. LET ME START BY BRIEFLY HIGHLIGHTING WHAT IS NOT IN CONTENTION BETWEEN THE PARTIES, AND MR. CLINE CAN CORRECT ME IF I GET ANYTHING WRONG. BUT MY UNDERSTANDING IS THAT A LOT OF WHAT IS OBJECTED TO IN THE DEFENSE'S FILING IS ACTUALLY NOT AN INTENDED PART OF MR. PARLOFF'S TESTIMONY. FOR EXAMPLE, AT NO TIME WILL THE GOVERNMENT ASK MR. PARLOFF TO PASS JUDGMENT ON THE TRUTH OR FALSITY OF MS. HOLMES'S STATEMENT TO HIM OR THE MATERIALS THAT HE RECEIVED FROM THERANOS. SIMILARLY, I DO NOT INTEND TO ASK HIM QUESTIONS ABOUT MS. HOLMES'S CREDIBILITY OR VERACITY OR HONESTY, THINGS LIKE THAT THAT I THINK THIS WITNESS IS NOT IN A POSITION TO TESTIFY, AND I WOULD UNDERSTAND 403 OBJECTIONS TO THAT. SO THE GOVERNMENT UNDERSTANDS WHERE THAT LINE IS. SIMILARLY, WE'RE NOT GOING TO ASK THIS WITNESS TO COMMENT ON COMPARISONS BETWEEN WHAT MS. HOLMES TOLD HIM AND WHAT HE LATER LEARNED THROUGH OTHER REPORTING.
THAT WOULD BE A HEARSAY BASIS FOR HIM TO COMMENT ON THAT COMPARISON, SO WE'RE NOT GOING TO GO INTO THAT EITHER. LET ME TRY TO BREAK DOWN THE CATEGORIES OF WHAT THIS WITNESS WILL TESTIFY ON. FIRST OF ALL, HE WILL AUTHENTICATE THE RECORDINGS OF CONVERSATIONS THAT HE HAD WITH MS. HOLMES, AS WELL AS EMAILS THAT HE RECEIVED FROM THE COMPANY, WRITTEN MATERIALS. HE WILL TALK ABOUT TOURS THAT HE HAD OF FACILITIES AT THERANOS. I DON'T BELIEVE THERE'S A DISPUTE AS TO THE ADMISSIBILITY OF THAT TESTIMONY. HE'LL EXPLAIN COMMENTS THAT MS. HOLMES MADE IN THE CONTEXT OF THEIR LARGER CONVERSATIONS. AND HERE'S WHERE I THINK I CAN HELP THE COURT'S UNDERSTANDING OF WHAT THE GOVERNMENT MEANS BY CONTEXT. I BELIEVE THERE ARE APPROXIMATELY TEN HOURS OF RECORDED CONVERSATIONS BETWEEN MS. HOLMES AND MR. PARLOFF. THE GOVERNMENT, FOR A NUMBER OF REASONS, DOESN'T INTEND TO INTRODUCE THAT ENTIRE TEN HOUR RECORDING. THAT SAID, MR.
PARLOFF HAS MEMORIES OF THOSE CONVERSATIONS AND HE'S REVIEWED THOSE RECORDINGS TO REFRESH HIS RECOLLECTION, SO HE SHOULD BE ABLE TO TESTIFY NOT JUST ABOUT SPECIFIC STATEMENTS THAT MS. HOLMES MADE IN PORTIONS THAT THE GOVERNMENT WILL PLAY FOR THE JURY, BUT ALSO HOW THOSE PORTIONS AND STATEMENTS FIT INTO THEIR OVERALL CONVERSATIONS. SO THAT COULD BE QUESTIONS LIKE, FOR EXAMPLE, WHETHER A TOPIC HAD COME UP BEFORE, WHETHER THAT HAD BEEN THE ONLY TIME THAT THEY HAD DISCUSSED THAT TOPIC OR WHETHER IT WAS A REPEATED TOPIC IN THEIR CONVERSATIONS; WHETHER WHAT MS. HOLMES SAID IN A CERTAIN STATEMENT WAS EITHER THE SAME AS OR DIFFERENT FROM WHAT SHE HAD SAID IN OTHER CONVERSATIONS WHEN THAT SAME TOPIC HAD COME UP. THIS IS JUST FACTUAL TESTIMONY. THIS IS A WITNESS TESTIFYING ABOUT THE CONTENT OF A COMMUNICATION OR A CONVERSATION THAT HE PARTICIPATED IN, SO THAT SHOULDN'T BE CONTROVERSIAL.
JUDGE DAVILA: I'M SORRY, MR. BOSTIC. SO THAT WOULD BE, ON TUESDAY SHE SAID THIS, AND ON THURSDAY SHE SAID, TO THE SAME QUESTION, THIS, SOMETHING LIKE THAT?
MR. BOSTIC: IT MIGHT BE AS SIMPLE AS, ON APRIL 17TH, SHE TOLD YOU X. IS THAT CONSISTENT WITH WHAT SHE TOLD YOU ON OTHER OCCASIONS? SO HE SHOULD BE ABLE TO COMMENT ON SOMETHING LIKE THAT. THERE WILL ALSO BE SITUATIONS WHERE STATEMENTS IN THE RECORDED CONVERSATIONS REQUIRE SOME CONTEXT TO UNDERSTAND WHAT THE PARTIES ARE TALKING ABOUT. SO, FOR EXAMPLE, THERE'S AT LEAST ONE CASE WHERE MS. HOLMES MAKES A STATEMENT REFERENCING A TOUR OF A FACILITY THAT MR. PARLOFF HAD HAD AND WHAT HE HAD SEEN ON THAT TOUR. SO AT THAT POINT HE'LL NEED TO EXPLAIN, SO THAT THE JURY CAN UNDERSTAND THAT STATEMENT AND WHAT THAT IS REFERRING TO, HE'LL NEED TO EXPLAIN WHAT HE SAW IN THAT TOUR AND THE INFORMATION THAT HE RECEIVED IN THAT SEPARATE CONTEXT TO PUT THE NECESSARY BACKGROUND ON MS. HOLMES'S STATEMENTS THERE. SIMILARLY, I MIGHT ASK QUESTIONS ABOUT THINGS THAT MS. HOLMES DID NOT TELL HIM. SO BECAUSE HE PARTICIPATED IN THOSE MANY CONVERSATIONS, HE CAN SAY, MS. HOLMES NEVER TOLD ME X, Y, OR Z. HE'LL BE ABLE TO SAY THAT SHE DID NOT TELL HIM, FOR EXAMPLE, ABOUT THE COMPANY'S RELIANCE ON THIRD PARTY MACHINES. THAT'S A RELEVANT FACT. BESIDES ASKING HIM THAT SIMPLE QUESTION, THE ONLY OTHER WAY TO PROVE IT WOULD BE TO PLAY THE ENTIRE TEN HOUR PORTION OF THE RECORDING, WHICH I DON'T THINK THE DEFENSE IS ADVOCATING FOR EITHER.
JUDGE DAVILA: SO WOULD YOU -- AS TO THAT POINT, WOULD YOU, MR. BOSTIC, THEN ASK HIM, DID SHE EVER MENTION ANYTHING ABOUT THIRD PARTY MACHINES BEING USED AT THE COMPANY?
MR. BOSTIC: THAT WOULD BE ONE EXAMPLE OF THAT KIND OF A QUESTION, YES, YOUR HONOR.
JUDGE DAVILA: AND I GUESS THE FOLLOWUP IS, DID HE EVER ASK THAT QUESTION?
MR. BOSTIC: I THINK THAT WOULD ALSO BE AN ADMISSIBLE OR A PROPER QUESTION FOR EITHER THE GOVERNMENT TO ASK OR FOR THE DEFENSE TO ASK ON CROSS. I DON'T WANT TO GET -- I KNOW THE DEFENSE HAS CONCERNS ABOUT MR. PARLOFF TESTIFYING ABOUT WHY HE DID OR DID NOT ASK A CERTAIN QUESTION, AND SO I WOULD INTEND NOT TO GO TOO FAR INTO THAT ON DIRECT. BUT BASED ON THE CONTEXT OF THE CROSS, I MAY NEED TO COME BACK AND LET HIM HAVE THE OPPORTUNITY TO EXPLAIN WHY HE DID OR DID NOT ASK A CERTAIN QUESTION.
JUDGE DAVILA: SURE. OKAY.
MR. BOSTIC: SO THAT'S WHAT THE GOVERNMENT MEANS BY CONTEXT. SIMILARLY, I THINK THAT IT'S APPROPRIATE AND USEFUL FOR THE WITNESS TO CONNECT CERTAIN STATEMENTS THAT MS. HOLMES MADE TO THE CONTENT OF THE ARTICLE THAT HE PUBLISHED. SO THIS MIGHT BE, FOR EXAMPLE, PLAYING A CLIP OR HAVING THE WITNESS TESTIFY ABOUT INFORMATION HE RECEIVED FROM MS. HOLMES, THEN POINTING TO A STATEMENT OR A PARAGRAPH IN THE ARTICLE AND ASKING WHETHER THAT'S CONSISTENT WITH WHAT MS. HOLMES TOLD HIM. AND THIS IS THE -- THE POINT OF THE TESTIMONY IS TO SHOW HOW MS. HOLMES'S STATEMENTS TO THIS JOURNALIST ENDED UP BEING DISTILLED DOWN INTO A PACKAGE, THAT IS, THE ARTICLE ITSELF THAT WAS PUBLISHED, AND THEN GIVEN BY HOLMES TO INVESTORS IN THE COMPANY. SO THE CONTENT OF THE ARTICLE IS IMPORTANT, AND THIS IS MERELY TO CONNECT THE CONTENT OF THE ARTICLE TO THE STATEMENTS THAT MS. HOLMES MADE. THERE MAY ALSO BE QUESTIONS UNDER THAT CATEGORY TO THE EFFECT OF, IF MS.
HOLMES HAD TOLD YOU X, WOULD YOU HAVE INCLUDED THAT DETAIL IN THE ARTICLE OR WOULD THAT HAVE CHANGED THIS STATEMENT IN THE ARTICLE, FOR EXAMPLE? I THINK THAT'S AN APPROPRIATE QUESTION TO SHOW, AGAIN, HOW MS. HOLMES'S INFORMATION GIVEN TO MR. PARLOFF AFFECTED WHAT THAT ARTICLE ACTUALLY SAID IN THE ARTICLE THAT WENT TO THE INVESTORS. AND I THINK THE FINAL CATEGORY OF QUESTIONS THAT WE SHOULD TALK ABOUT ARE QUESTIONS THAT GO TO THE WITNESS'S UNDERSTANDING OF STATEMENTS MADE BY MS. HOLMES. AND I UNDERSTAND THE DEFENSE HAS OBJECTIONS HERE. THE POINT OF THESE QUESTIONS -- AND THESE WOULD BE QUESTIONS LIKE, WHAT WAS YOUR UNDERSTANDING ABOUT THE NUMBER OF TESTS THAT THERANOS'S DEVICE COULD RUN BASED ON THAT STATEMENT FROM MS. HOLMES? AND I THINK THE DEFENSE, AND I'LL LET MR. CLINE SPEAK FOR HIMSELF, BUT THE DEFENSE OBJECTS THAT MR. PARLOFF'S SUBJECTIVE UNDERSTANDING IS NOT RELEVANT HERE. THE GOVERNMENT DISAGREES WITH THAT.
THE INDICTMENT SPECIFICALLY ALLEGES IN PARAGRAPH 12(I) THAT IT WAS PART OF THE SCHEME TO DEFRAUD THAT THE DEFENDANT MADE FALSE AND MISLEADING STATEMENTS TO JOURNALISTS AND THEN PASSED ALONG THE ARTICLES TO INVESTORS AND VICTIMS. SHOWING THAT THIS WITNESS WAS DECEIVED BY THE DEFENDANT IS NOT THE SAME THING AS ALLEGING THAT THIS VICTIM -- OR THAT THIS WITNESS IS A VICTIM OF THE SCHEME TO DEFRAUD. THOSE ARE TWO DIFFERENT THINGS. AND ACTUALLY PREPARING FOR THIS HEARING, I CAME ACROSS THE COURT'S ORDER ON THE DEFENDANT'S MOTION TO DISMISS THE SUPERSEDING INDICTMENTS, AND THE COURT WILL RECALL THAT SEVERAL MONTHS AGO THE DEFENSE WAS OBJECTING TO LANGUAGE IN THE INDICTMENTS THAT RELATED TO THE DECEPTION OF DOCTORS. AND THE DEFENSE WAS ADVANCING THE ARGUMENT THAT THE DECEPTION OF SOMEONE OTHER THAN A VICTIM COULD NOT BE PROBATIVE AS TO THE DEFENDANT'S INTENT TO DECEIVE ACTUAL VICTIMS. THE COURT DISAGREED WITH THAT, AND THAT'S AT ECF 552 AT PAGES 26 TO 27.
AND THE COURT SAID THAT TO THE EXTENT THAT THE DEFENDANTS BELIEVE ALLEGATIONS THAT A DEFENDANT DECEIVED ONE PARTY CANNOT BE PROBATIVE OF AN INTENT TO DEFRAUD ANOTHER, THE COURT CANNOT AGREE. THERE'S NO QUESTION THAT DOCTORS MAY SERVE AS CONDUITS OF INFORMATION TO THEIR PATIENTS. THAT'S THE SAME THING THAT HAPPENED HERE. THIS WITNESS WAS A CONDUIT OF MISLEADING INFORMATION TO VICTIMS IN THIS CASE, AND FOR THAT REASON HIS UNDERSTANDING AND THE FACT THAT HE WAS HIMSELF DECEIVED IS A NECESSARY PART OF EXPLAINING THE MECHANISM OF HOW THOSE ARTICLES WERE USED TO DECEIVE THE VICTIMS.
JUDGE DAVILA: THANK YOU. TELL ME A LITTLE BIT ABOUT HOW THAT WOULD, TO THE EXTENT THAT YOU CAN, JUST AN EXAMPLE OF A QUESTION, HIS UNDERSTANDING OF HER STATEMENTS. IT'S KIND OF BROAD. THAT STATEMENT IS BROAD, PARDON ME. BUT WHAT DOES THAT MEAN? AND YOU JUST SAID, WELL, THE NUMBER OF MACHINES OR THE NUMBER OF ASSAYS AND THOSE TYPES OF THINGS. IS THAT DIFFERENT THAN ASKING THE QUESTION, HOW MANY ASSAYS DID SHE SAY THE MACHINES COULD RUN? AND SHE SAID 50, 100, 5, WHATEVER THE ANSWER IS, AND ISN'T THAT ENOUGH OR DOES -- DO YOU NEED HIS UNDERSTANDING OF THAT ANSWER?
MR. BOSTIC: SO, FOR EXAMPLE, YOUR HONOR, THERE IS, THERE IS ONE CONVERSATION WHERE MS. HOLMES TELLS MR. PARLOFF THAT SHE CAN'T TALK ABOUT THE ACTUAL USE IN AFGHANISTAN OF THE COMPANY'S TECHNOLOGY. I WOULD CONSIDER ASKING MR. PARLOFF A QUESTION ABOUT THAT STATEMENT TO THE EFFECT OF, DID YOU UNDERSTAND FROM MS. HOLMES'S STATEMENT THAT THERE WAS SOME ACTUAL USE OCCURRING IN AFGHANISTAN AT THAT TIME? SO IT'S AS SIMPLE AS JUST TO GIVE HIM A CHANCE TO EXPLAIN THE EFFECT THAT THOSE STATEMENTS WERE HAVING ON HIM AND HOW THE INFORMATION FROM MS. HOLMES WAS SHAPING HIS UNDERSTANDING ABOUT WHAT THE TECHNOLOGY CAN DO AND HOW IT WAS BEING USED, BECAUSE THAT UNDERSTANDING IS WHAT ENDED UP SHAPING THE CONTENT OF THE ARTICLE.
JUDGE DAVILA: ALL RIGHT. AND I THINK I UNDERSTAND YOUR ARGUMENT THAT TO THE EXTENT THAT WHATEVER INFORMATION HE RECEIVED FROM HER, EITHER STATEMENTS, WHATEVER, AND I THINK YOU TOUCH ON THIS IN THE PLEADINGS AS WELL, WITNESSES CAN TESTIFY ABOUT OBSERVATIONS OF THE PARTY THAT THEY'RE TALKING TO. WERE THEY NERVOUS? WHATEVER THAT IS. I DON'T KNOW IF THAT'S RELEVANT HERE. BUT A WITNESS COULD CERTAINLY TALK ABOUT THOSE TYPES OF THINGS AS WELL IN ADDITION TO. ONE CONCERN I HAVE IS THE ISSUE ABOUT -- THAT RELATES TO THE SUBPOENA ISSUE AND WHETHER OR NOT INFORMATION IS GOING TO BE ADDRESSED THAT MIGHT CALL UPON OTHER INDIVIDUALS THAT MR. PARLOFF TALKED TO SUCH THAT WE NEED TO WORRY ABOUT WHETHER OR NOT OTHER INFORMATION IS AT ISSUE IN THE CASE. IT SOUNDS LIKE, FROM WHAT YOU'VE TOLD ME, THAT HE IS GOING TO TESTIFY ABOUT HIS INTERVIEW AND THE ANSWERS THAT SHE GAVE, PERHAPS HIS UNDERSTANDING OF THOSE ANSWERS CONTEXTUAL WITH HIS -- WHY HE WROTE THE ARTICLE, WHY HE PUT CERTAIN STATEMENTS IN HIS ARTICLE, BUT NOT AS TO ANYTHING ELSE HE LEARNED IN OTHER RESEARCH FROM OTHER INDIVIDUALS THAT MIGHT IMPACT THAT SUBPOENA.
MR. BOSTIC: THAT'S CORRECT, YOUR HONOR. THE GOVERNMENT DOES NOT INTEND TO ASK MR. PARLOFF ABOUT STATEMENTS MADE BY INDIVIDUALS OTHER THAN MS. HOLMES OR ABOUT HIS OWN INDEPENDENT RESEARCH OR INFORMATION HE MIGHT HAVE GLEANED FROM OTHER SOURCES. THE FOCUS HERE, PROPERLY, SHOULD BE ON WHAT THE DEFENDANT TOLD HIM, INFORMATION THAT SHE SUPPLIED, AND WHAT INFERENCES CAN BE DRAWN ABOUT HER INTENT FROM THAT.
JUDGE DAVILA: ALL RIGHT. THERE'S SOME -- I READ SOMEWHERE WHERE SHE APPARENTLY TOLD HIM TO CONTACT THESE OTHER PEOPLE FOR HIS STORY, AND HE TOLD HER TO CONTACT, I THINK, SCIENTISTS OR OTHER INDIVIDUALS. IS THAT GOING TO COME UP AT ALL IN YOUR EXAMINATION?
MR. BOSTIC: NOT IN THE GOVERNMENT'S DIRECT, YOUR HONOR.
JUDGE DAVILA: OKAY. THANK YOU. MR. CLINE?
MR. CLINE: YES, YOUR HONOR. LET ME TAKE THOSE IN REVERSE ORDER IF I COULD. LET ME START WITH MR. PARLOFF'S UNDERSTANDING, AND MAYBE ACTUALLY STEP BACK FOR A SECOND AND SAY WHAT WE ARE TRYING TO DO HERE, AS A WAY OF -- BOTH AS A MATTER OF RELEVANCE AND 403, AND ALSO AS A MATTER OF AVOIDING THE SUBPOENA AND PRIVILEGE ISSUES THAT LURK ON THE PERIPHERY HERE, IS KEEP MR. PARLOFF TO THE OBJECTIVE FACTS. SO, FOR EXAMPLE, HE CAN TESTIFY ABOUT HE, HE HAD AN IDEA ABOUT WRITING AN ARTICLE FOR "FORTUNE," HE PITCHED IT TO "FORTUNE." AS PART OF THAT PROCESS HE INTERVIEWED MS. HOLMES. AND THEN, OF COURSE, HE HAS TAPES OF THOSE INTERVIEWS. SO THERE WON'T BE ANY QUESTIONS ABOUT WHAT MS. HOLMES SAID. NOW, THERE MAY VERY WELL BE COMPLETENESS ISSUES THAT WE'LL HAVE TO WRESTLE WITH A LITTLE BIT FURTHER DOWN THE ROAD. I'M SURE THERE WILL BE ACTUALLY. BUT APART FROM THAT, IT WILL BE AN OBJECTIVE FACT WHAT MS. HOLMES SAID TO MR. PARLOFF, WHAT HE ASKED HER, WHAT SHE SAID TO HIM, THE WHOLE EXCHANGE. THE NEXT OBJECTIVE FACT IS THAT HE WROTE AN ARTICLE, AND THAT ARTICLE IS ALREADY IN EVIDENCE. HE'LL AUTHENTICATE IT AGAIN. AND THEN THE THIRD OBJECTIVE FACT, AND THIS IS SOMETHING THAT MR. PARLOFF CAN'T TESTIFY ABOUT, BUT IT'S -- IT IS INTEGRAL TO THIS CONDUIT THEORY, IS, WHAT DID MS. HOLMES DO WITH THAT ARTICLE? DID SHE USE IT TO IN SOME WAY DECEIVE INVESTORS? SO THOSE ARE KIND OF THE THREE OBJECTIVE PILLARS OF WHAT THE GOVERNMENT IS TRYING TO PROVE HERE. WHAT DID MS. HOLMES -- WHAT WAS MR. PARLOFF DOING? HE WAS WRITING AN ARTICLE FOR FORTUNE. WHAT DID MS. HOLMES SAY TO HIM? WHAT DID HE END UP WRITING? AND THEN WHAT DID MS. HOLMES DO WITH THE ARTICLE?
JUDGE DAVILA: BUT HE CAN'T TESTIFY AS TO THE LATTER?
MR. CLINE: HE CANNOT. HE CANNOT. BUT JUST IN TERMS OF THE GOVERNMENT'S THEORY, THAT'S THE FINAL PIECE OF IT. IF THE ARTICLE HAD NEVER BEEN PUBLISHED, THIS WOULD JUST HAVE BEEN AN IDEA, YOU KNOW, HER STATEMENTS MIGHT HAVE INDEPENDENT EVIDENTIARY SIGNIFICANCE, LIKE A STATEMENT TO A HAIR DRESSER WOULD, BUT THE CONDUIT THEORY WOULDN'T EXIST. THE POINT OF THIS IS THAT THIS ARTICLE GETS PUBLISHED AND THEN IT GETS USED WITH INVESTORS, AND HE CAN'T TESTIFY TO THAT. SO THE CLOSER WE ADHERE TO THOSE OBJECTIVE FACTS, THE LESS WE HAVE TO WORRY ABOUT WHAT OTHER PEOPLE TOLD HIM, PRIVILEGE ISSUES, THE SUBPOENA AND SO FORTH. THE MORE WE VEER AWAY FROM THOSE, THE MORE WE'RE GOING TO GET INTO THOSE THINGS. SO WITH THAT SORT OF FRAME, LET'S TALK ABOUT HIS UNDERSTANDING. AND THE EXAMPLE THAT MR. BOSTIC GAVE MIGHT BE A HELPFUL ONE. HE ASKED MS. HOLMES WHAT USE THE MILITARY WAS MAKING OR WHAT WAS GOING ON IN AFGHANISTAN OR WHATEVER. AND SHE SAID -- I'M PARAPHRASING MR. BOSTIC. SHE SAYS, I CAN'T TELL YOU. SO MR. BOSTIC WANTS HIM TO TESTIFY, WANTS MR. PARLOFF TO TESTIFY, I TOOK FROM THAT SOMETHING OTHER THAN WHAT MS. HOLMES ACTUALLY SAID. I INFERRED FROM THAT SOMETHING DIFFERENT. WELL, MR. PARLOFF, IN THE COURSE OF HIS REPORTING, TALKED TO GENERAL MATTIS, HE TALKED TO FORMER SECRETARY OF DEFENSE WILLIAM PERRY, BOTH OF WHOM WERE ON THE THERANOS BOARD AT THE TIME, AND HE TALKED WITH THEM ABOUT THAT ISSUE. AND SO IF MR. PARLOFF IS GOING TO SAY, THAT WAS MY UNDERSTANDING, I GET TO PROBE THAT, IT SEEMS TO ME, AND SUGGEST THAT THAT UNDERSTANDING EITHER, A, WAS UNREASONABLE OR PERHAPS NOT CREDIBLE; OR, B, THAT THE -- IF HE CAME AWAY WITH THAT UNDERSTANDING, IT WAS NOT AS A RESULT OF WHATEVER MS. HOLMES SAID TO HIM, IT WAS A RESULT OF TALKING TO THESE OTHER PEOPLE.
JUDGE DAVILA: SO IF HE SAYS, "MY UNDERSTANDING BASED ON WHAT SHE TOLD ME DURING THAT INTERVIEW WAS X" --
MR. CLINE: RIGHT.
JUDGE DAVILA: -- AND THAT'S IT, THAT WAS THE QUESTION, "WHAT WAS YOUR UNDERSTANDING BASED ON WHAT SHE TOLD YOU," NOT WHAT GENERAL MATTIS OR ANYONE ELSE SAID, BUT JUST BASED ON WHAT SHE TOLD YOU, ISN'T THAT PROPER?
MR. CLINE: NO, I DON'T THINK IT IS. I THINK "WHAT DID SHE TELL YOU" IS CERTAINLY PROPER. HIS SUBJECTIVE UNDERSTANDING OF THAT, FIRST OF ALL, I THINK IS IRRELEVANT AND I THINK IT'S 403. BUT BEYOND THAT, I SHOULD NOT HAVE TO JUST TAKE THAT AT FACE VALUE. I SHOULD NOT HAVE TO JUST SAY, OKAY, THAT'S WHAT YOU SAY, I CAN'T CHALLENGE IT. I GET TO CHALLENGE IT. AND THE CHALLENGE IS, IF YOU CAME AWAY, MR. PARLOFF, WITH THAT IMPRESSION OF WHAT WAS GOING ON IN AFGHANISTAN, IT'S NOT BASED ON MS. HOLMES'S REFUSAL TO TELL YOU, IT'S BASED ON YOUR CONVERSATIONS WITH THESE OTHER PEOPLE.
JUDGE DAVILA: IF THAT FORMED THE -- I'M SORRY TO INTERRUPT YOU. BUT IF THAT INFORMED PART OF HIS STORY, IN OTHER WORDS, IF HE DID ADDITIONAL RESEARCH AND TALKED TO MATTIS AND OTHER PEOPLE, AND THAT'S THE INFORMATION THAT GOT INTO THE STORY -- THIS IS WHERE I HAVE SOME CONCERNS ABOUT BLEEDING OVER, MR. BOSTIC, I'M LOOKING AT YOU -- IF HE SAID OR IF HE'S QUESTIONED, WHAT DID SHE TELL YOU ABOUT AFGHANISTAN? SHE SAID WHATEVER SHE SAID. AND THAT COMES IN ALONE, THAT'S IT, AND THEN YOU MOVE TO ANOTHER TOPIC, THERE'S NO OBJECTION TO THAT BECAUSE HE'S SAYING THAT'S WHAT SHE SAID. AND THEN IT'S UP TO, I SUPPOSE, OTHER WITNESSES TO TIE ALL OF THAT TOGETHER. BUT I DO HAVE SOME CONCERN ABOUT IF IT GOES FURTHER THAN -- IF HE USED OTHER INFORMATION FOR HIS STORY, THEN THAT'S THE CONCERN THAT I HAVE, AND HOW DO WE PARSE THAT OUT? AND DOES THAT THEN BLEED INTO THE 17 SUBPOENA THAT IS BEFORE US?
MR. BOSTIC: SO A FEW POINTS IN RESPONSE, YOUR HONOR.
JUDGE DAVILA: SURE.
MR. BOSTIC: FIRST, JUST TO MAKE SURE THAT WE'RE THINKING OF THIS EXAMPLE ACCURATELY, WITH THE USE IN AFGHANISTAN, I'M NOT SURE WHAT THE QUESTION WAS. I DON'T REMEMBER OFFHAND. BUT I UNDERSTAND THE RESPONSE FROM MS. HOLMES WAS "I CAN'T TELL YOU ABOUT THE ACTUAL USE IN AFGHANISTAN." SO IT'S SOMETHING MORE THAN "I CAN'T TELL YOU." THERE'S AN IMPLICIT STATEMENT OR ASSERTION IN THAT STATEMENT. WHEN SOMEONE SAYS, "I CAN'T TELL YOU ABOUT THE ACTUAL USE IN AFGHANISTAN," IT DOES IMPLY THAT THERE IS ACTUAL USE IN AFGHANISTAN. SO THE QUESTION TO MR. PARLOFF WOULD BE SOMETHING TO THE EFFECT OF, "DID YOU UNDERSTAND THAT TO IMPLY OR TO BE TELLING YOU THAT THERE WAS ACTUAL USE OCCURRING IN AFGHANISTAN?" SO, AGAIN, THIS IS ABOUT CONNECTING THE ACTUAL LANGUAGE FROM THE DEFENDANT TO MR. PARLOFF'S UNDERSTANDING. THE REASON WHY IT'S NOT IRRELEVANT, THE REASON WHY IT MATTERS IS BECAUSE MR. PARLOFF WASN'T A CONDUIT OF MS. HOLMES'S STATEMENTS.
IT'S NOT THAT HE TOOK THESE STATEMENTS AND MADE THESE RECORDINGS AND PROVIDED THESE RECORDINGS TO THE PUBLIC. THAT WOULD BE ONE THING. WHAT ACTUALLY HAPPENED WAS THAT HE HAD CONVERSATIONS WITH MS. HOLMES AND HE DEVELOPED AN UNDERSTANDING OF WHAT THE TRUTH WAS ABOUT THERANOS BASED ON THOSE CONVERSATIONS, AND THEN HIS UNDERSTANDING SHAPED THE CONTENT OF THE ARTICLE. SO HE WASN'T JUST A CONDUIT FOR MR. HOLMES'S STATEMENTS. HE WAS A CONDUIT OF INACCURATE OR MISLEADING IMPRESSIONS OR UNDERSTANDING, AND SO IT'S IMPORTANT FOR THE JURY TO HEAR ABOUT WHAT HE TOOK FROM MS. HOLMES'S STATEMENTS BECAUSE THAT'S WHAT ACTUALLY INFORMED THE CONTENT OF THE ARTICLE. THAT DOES NOT CREATE DISCOVERY PROBLEMS AND IT DOESN'T NECESSITATE GETTING INTO WHAT OTHER PEOPLE SAID, AND HERE'S WHY. I NOTICED THAT WHEN MR. CLINE WAS DISCUSSING THIS, HE SAID HE WANTED TO BE ABLE TO CHALLENGE MR. PARLOFF'S UNDERSTANDINGS TO SHOW WHETHER THEY WERE UNREASONABLE, FOR EXAMPLE, WHETHER MR.
PARLOFF DREW AN UNREASONABLE UNDERSTANDING FROM WHAT MS. HOLMES SAID. THIS IS NOT A CASE WHERE -- FIRST OF ALL, MR. PARLOFF IS NOT A VICTIM OF THE FRAUD. EVEN IF HE WERE, THE GOVERNMENT WOULD NOT BE REQUIRED TO SHOW RELIANCE, MUCH LESS REASONABLE RELIANCE. SO IF THIS WERE A CASE WHERE THE GOVERNMENT HAD TO SHOW REASONABLE RELIANCE AS TO THIS INDIVIDUAL, IT WOULD BE MORE RELEVANT WHAT OTHER INFORMATION WAS AVAILABLE TO HIM. AND AS TO VICTIMS IN THIS CASE, ACTUAL VICTIMS, THE DEFENSE HAS BEEN ABLE TO EXPLORE OTHER SOURCES OF INFORMATION THAT WERE AVAILABLE TO THOSE VICTIMS BECAUSE THAT IS ARGUABLY RELEVANT TO MATERIALITY. MATERIALITY IS NOT RELEVANT AS TO THIS WITNESS EITHER. THE GOVERNMENT IS SEEKING TO SHOW NOT THAT HE WAS A VICTIM OF THE FRAUD, BUT ONLY THAT HE WAS DECEIVED. THE FACT THAT HE WAS DECEIVED IS RELEVANT AND IT'S PROBATIVE OF MS. HOLMES'S INTENT TO DECEIVE THE ACTUAL VICTIMS. THIS IS ALLEGED IN THE INDICTMENT.
WE PROVIDED SUBSTANTIAL NOTICE OF THIS UNDER 404(B) AS WELL. SO TO BE ABLE TO SHOW THAT HE WAS DECEIVED BY MS. HOLMES'S STATEMENTS, AGAIN, KEEPING THE FOCUS JUST ON THOSE STATEMENTS, SHOULD BE PERMISSIBLE. IT'S UNCLEAR WHAT RELEVANCE THE STATEMENTS THAT OTHERS MADE COULD HAVE TO THAT QUESTION. FOR EXAMPLE, IF OTHER PEOPLE MADE STATEMENTS THAT WERE CONSISTENT WITH WHAT MS. HOLMES SAID -- FIRST OF ALL, MANY, IF NOT ALL, OF THESE INDIVIDUALS WOULD HAVE HAD MS. HOLMES AS THEIR PRIMARY SOURCE OF INFORMATION, SO ITS UNCLEAR HOW MUCH VALUE THEIR STATEMENTS OR INFORMATION WOULD HAVE SEPARATE FROM THE DEFENDANT'S. BUT REGARDLESS, IT SEEMS LIKE THE MOST IMPACTFUL USE OF OTHER STATEMENTS WOULD BE TO BOLSTER MS. HOLMES'S CLAIMS AND ASSERTIONS. SO IF MS. HOLMES SAID SOMETHING THAT THE GOVERNMENT IS POINTING TO AS FALSE AND THE DEFENSE CAN SHOW OTHER PEOPLE SAID THE SAME THING, WELL, YOU MIGHT THINK THAT MIGHT REHABILITATE MS. HOLMES'S CREDIBILITY AND SHOW THAT OTHER PEOPLE WERE SAYING THE SAME THING, MAYBE IT WAS TRUE. BUT THAT'S AN IMPERMISSIBLE HEARSAY USE OF THOSE OUT OF COURT STATEMENTS BY NONTESTIFYING INDIVIDUALS. SO THEY CAN'T COME IN FOR THAT PURPOSE.
MR. BOSTIC: TO THE EXTENT THAT THEY WERE ALSO MISLEADING, AGAIN, IT'S UNCLEAR WHY THAT WOULD MATTER HERE. THE FOCUS IS ON THIS DEFENDANT'S INTENT. SO THE FACT THAT OTHER PEOPLE EITHER KNOWINGLY OR UNKNOWINGLY PASSED ALONG SIMILARLY MISLEADING INFORMATION, IF THAT IS INDEED THE CASE, AND WE DON'T HAVE ANY REASON TO KNOW OR BELIEVE THAT IS THE CASE, BUT IF THAT HAPPENED, IT'S UNCLEAR WHY THAT SHOULD MATTER FOR THIS JURY WHOSE TASK IS TO JUDGE THE DEFENDANT'S INTENT, NOT SCRUTINIZE THIS WITNESS AND DETERMINE WHETHER HE HAD A REASONABLE FOUNDATION FOR ARRIVING AT THE BELIEFS THAT HE DID.
JUDGE DAVILA: IS -- THANK YOU. IF THE QUESTION ABOUT AFGHANISTAN WERE ASKED AND IF THE QUESTION, THE FOLLOW-UP QUESTION FROM YOU, WAS, DID IT APPEAR THAT THAT INFORMATION WAS CONFIDENTIAL AND THAT'S WHY SHE COULDN'T TELL YOU, I THINK THAT WOULD BE A PERMISSIBLE QUESTION, AND I THINK I WOULD ALLOW HER -- HIM TO ANSWER THAT QUESTION, "I CAN'T TELL YOU THAT." WELL, IT MUST BE CONFIDENTIAL. SHE PROBABLY DIDN'T SAY THAT. I DON'T KNOW. BUT THAT TYPE OF INFERENCE IS ONE. BUT, AGAIN, I GET BACK TO -- THE CONCERN THAT I HAVE IS THE ULTIMATE WORK PRODUCT, HIS STORY, AND WHETHER INFORMATION THAT, IF HE WROTE ABOUT AFGHANISTAN AND WROTE THINGS OTHER THAN WHAT SHE ACTUALLY SAID, IS THERE A SOURCE, A SECONDARY SOURCE FOR THAT INFORMATION? AND I UNDERSTAND IN THE ABSTRACT MR. CLINE'S POINT, WELL, IF THE STORY WAS NOT INFORMED BY WHAT SHE SAID BUT BY ADDITIONAL RESEARCH, WE SHOULD BE ABLE TO ASK THAT QUESTION. THAT'S THE CONCERN THAT I HAVE ABOUT THAT, AND HOW FAR DOES THAT GO? I, I -- AS I SAID, I THINK HE CAN ASK CERTAIN QUESTIONS, DID SHE APPEAR -- DID THAT SUGGEST CONFIDENTIALITY BECAUSE SHE COULDN'T SAY THAT? OR DID IT SUGGEST IGNORANCE THAT SHE JUST DIDN'T KNOW? I SUPPOSE THOSE ARE BOTH REASONABLE INFERENCES I SUPPOSE. I CAN'T SAY THAT. DOES THAT MEAN IT'S CONFIDENTIAL? DOES IT MEAN SHE DIDN'T KNOW? I DON'T KNOW. MR. CLINE?
MR. CLINE: I CERTAINLY THING HE CANNOT BE PERMITTED TO OFFER HIS UNDERSTANDING AND HAVE IT BE UNCHALLENGEABLE, IN EFFECT, BY US. AND I THINK QUESTIONING HIM ABOUT OTHER SOURCES OF INFORMATION ON THE SAME TOPIC THAT WE KNOW HE TALKED TO WOULD CLEARLY BE PERMISSIBLE IF THAT HAPPENED. AS TO YOUR HONOR'S EXAMPLE, EVEN THAT MAKES ME ANXIOUS. THE MORE WE GET INTO MR. PARLOFF'S SUBJECTIVE STATE OF MIND AS OPPOSED TO SIMPLY HIS, HE TOOK THESE STATEMENTS, HE WROTE THIS ARTICLE -- AND AGAIN, THIS IS NOT SOMETHING THAT HE CAN TESTIFY ABOUT, BUT THE GOVERNMENT CAN PROVE IT, OR ATTEMPT TO PROVE IT -- WHAT MS. HOLMES DID WITH THAT ARTICLE, THAT'S WHAT IS IMPORTANT HERE, AND HOW WHAT MS. HOLMES SAID TRANSLATED INTO THE ARTICLE IS REALLY BESIDE THE POINT.
JUDGE DAVILA: CAN HE ASK, WELL, DID SHE APPEAR NERVOUS DURING THE INTERVIEW? DID SHE APPEAR -- WHAT WAS HER DEMEANOR? HE CAN CERTAINLY ASK THOSE QUESTIONS. A WITNESS CAN TESTIFY ABOUT THOSE THINGS, CAN'T THEY?
MR. CLINE: WITHIN NARROW LIMITS.
JUDGE DAVILA: WE HEARD A LAB WITNESS SAY THAT THE ANSWERS WERE CAGEY. I THINK THEY USED THAT TERM. DO YOU RECALL THAT?
MR. CLINE: I DO RECALL THAT. BUT I ALSO REMEMBER WHEN MR. WEBER WANTED TO TESTIFY THAT MS. HOLMES WAS EVASIVE, I HAD VERY STRONG OBJECTIONS TO THAT.
JUDGE DAVILA: SURE.
MR. CLINE: THIS IS A WITNESS, YOUR HONOR, WHO -- SOMETHING BAD HAPPENED WITH THIS WITNESS. WHAT I MEAN BY THAT IS HE WROTE THIS GLOWING ARTICLE, AND A YEAR AND A HALF LATER MR. CARREYROU WROTE HIS ARTICLE, AND THIS WITNESS WAS BADLY EMBARRASSED. AND HE ENDED UP WRITING AN ARTICLE WHICH THE GOVERNMENT AGREES IT'S NOT GOING TO TRY TO ADMIT, AND I'M CERTAINLY NOT GOING TO OPEN THE DOOR FOR IT, IN WHICH HE BASICALLY SAYS, I WAS MISLED. ANY OPPORTUNITY -- THIS IS MY FEAR. NOW, I HAVE NEVER MET MR. PARLOFF, AND I HAVE NO REASON TO THINK THAT HE'S NOT AN HONORABLE FELLOW, BUT MY FEAR IS THAT IF HE'S GIVEN ANY OPPORTUNITY TO VOICE A SUBJECTIVE VIEW, IT'S GOING TO BE PREJUDICIAL, DAMAGING, AND SOMETHING THAT I'M NOT GOING TO BE ABLE TO DO ANYTHING WITH. SO THE MORE OPPORTUNITY HE HAS FOR THAT, THE MORE LIKELY WE ARE TO GET INTO TROUBLE; AND THE MORE HE'S CONSTRAINED TO WHAT I THINK IS TRULY RELEVANT TO THIS CONDUIT THEORY, WHICH IS KIND OF THE OBJECTIVE FACTS, THE BETTER OFF WE'RE ALL GOING TO BE. SO THAT'S MY CONCERN. I'M ALWAYS TROUBLED WHEN WITNESSES START TESTIFYING, WELL, SHE WAS, SHE WAS CAGEY. WELL, WHAT DOES THAT EVEN MEAN? AND HOW MUCH IS THAT VIEW INFORMED BY RETROSPECT? NOW, IN MR. WEBER'S CASE, HE WROTE THAT AT THE TIME, SO THAT WAS ACTUALLY HIS OPINION AT THE TIME FOR WHATEVER IT IS WORTH. I STILL DON'T THINK IT WAS ADMISSIBLE, BUT THAT WAS HIS OPINION AT THE TIME. HERE WHAT WE'RE TALKING ABOUT, IT'S NOT THAT MR. PARLOFF RECORDED AT THE TIME HIS OPINION OF MS. HOLMES'S DEMEANOR. HE'S GOING TO BE TESTIFYING ABOUT THAT WITH ALL OF THIS AFTERMATH IN HIS MIND. AND SO IT, IT IS NOT GOING TO BE PRETTY. AND I DON'T THINK IT'S RELEVANT. I THINK IT'S 403 MATERIAL. I DON'T THINK IT OUGHT TO COME IN. I REALLY THINK HE NEEDS TO BE CONFINED TO THE OBJECTIVE FACTS.
MR. BOSTIC: AND, YOUR HONOR, ON THAT --
JUDGE DAVILA: GO AHEAD.
MR. BOSTIC: ON THAT KIND OF QUESTION, I DISAGREE WITH MR. CLINE. I THINK THAT WOULD BE ADMISSIBLE AND APPROPRIATE, BUT I DON'T INTEND TO ASK THIS WITNESS ABOUT MS. HOLMES'S DEMEANOR. I DON'T THINK HE HAS MUCH TO OFFER ON THAT FRONT, SO IT'S NOT MY PRESENT INTENTION TO GO THERE. SO HOPEFULLY THAT'S COMFORTING TO MR. CLINE. I THINK THAT'S DIFFERENT, THOUGH, FROM ASKING HIM ABOUT HIS UNDERSTANDING OF WHAT MS. HOLMES SAID. AND I WANT TO GO BACK TO CONTEXT JUST BRIEFLY BECAUSE I THINK THAT PART OF WHY THIS IS NECESSARY IS BECAUSE HE DID HAVE MANY LENGTHY CONVERSATIONS WITH MS. HOLMES. HE WAS PROVIDED WRITTEN MATERIALS FROM THE COMPANY, INCLUDING THE PURPORTED PHARMA REPORTS, SLIDE PRESENTATIONS, HE HAD TOURS. SO PROVIDING HIS UNDERSTANDING REGARDING SPECIFIC STATEMENTS THAT MS. HOLMES MADE GIVES THE JURY THE BENEFIT OF THE CONTEXT THAT HE HAD AND THE PREVIOUS CONVERSATIONS AND THE UNDERSTANDING THAT HE HAD BUILT UP ABOUT WHAT THOSE STATEMENTS MEANT. AND IF I COULD, LET ME PROVIDE ONE OR TWO ADDITIONAL EXAMPLES THAT MIGHT HELP KIND OF ILLUMINATE THAT. SO, FOR EXAMPLE, MS. HOLMES SAID AT SOME POINT THAT SHE DIDN'T WANT MR. PARLOFF TO USE THE WORD "DEVICE" IN THE "FORTUNE" ARTICLE. HE ASKED HER WHY AND WHAT IS THE SENSITIVITY AROUND THAT? AND SHE SAID SOMETHING LIKE "THE FACT THAT WE HAVE A SINGLE DEVICE THAT CAN PERFORM ANY TEST IS A BIG DEAL." SHE WANTED TO KEEP THAT A SECRET SHE TOLD MR. PARLOFF. I WOULD WANT TO ASK HIM, IN CONNECTION WITH THAT, DID YOU UNDERSTAND FROM MR. HOLMES'S STATEMENT THAT THEY DID, IN FACT, HAVE A SINGLE DEVICE THAT COULD PERFORM ANY TEST? THIS IS JUST ASKING HIM ABOUT THE LANGUAGE THAT SHE HAD JUST STATED. SO THIS IS NOT GETTING INTO WHAT OTHER PEOPLE MIGHT HAVE SAID. THIS IS JUST ASKING, WHAT DID YOU TAKE FROM MS. HOLMES'S STATEMENT ON THAT DATE?
JUDGE DAVILA: WHAT IS WRONG WITH THAT, MR. CLINE?
MR. CLINE: BECAUSE IT IS -- WHAT HE TOOK FROM HER STATEMENT IS TOTALLY IRRELEVANT. THEY CAN PLAY FOR THE JURY WHAT MS. HOLMES ACTUALLY SAID, THEY CAN ARGUE TO THE JURY WHAT THAT MEANT. BUT WHAT MR. PARLOFF TOOK FROM THAT, WHY IS THAT IMPORTANT?
JUDGE DAVILA: WELL, CAN HE ASK HIM -- DOES IT BECOME MORE RELEVANT IF, WHAT DID YOU TAKE FROM THAT AND DID YOU WRITE THAT IN YOUR ARTICLE? YES, THAT'S WHAT I WROTE IN MY ARTICLE BECAUSE THAT'S WHAT I TOOK FROM HER STATEMENT.
MR. CLINE: EVEN THAT, YOUR HONOR, TO ME THIS LINKAGE BETWEEN WHAT SHE SAID AND WHAT HE PUT IN HIS ARTICLE DOESN'T MAKE ANY DIFFERENCE.
JUDGE DAVILA: BUT HE'S THE AUTHOR. THAT'S --
MR. CLINE: HE IS THE AUTHOR, BUT HE'S NOT -- HIS -- HE'S PLAYING A LIMITED ROLE HERE, AND THE LIMITED ROLE IS THAT HE TOOK STATEMENTS FROM MS. HOLMES, HE WROTE AN ARTICLE. SOME OF THOSE STATEMENTS MIGHT BE ADMISSIBLE WHETHER HE HAD EVER WRITTEN AN ARTICLE OR NOT. THEY'RE JUST STATEMENTS THAT MS. HOLMES MADE. IF THEY ARE RELEVANT AND THEY'RE OTHERWISE ADMISSIBLE, THEY COME IN. THE ARTICLE IS THE REAL KEY POINT HERE, BECAUSE THE GOVERNMENT'S THEORY IS ONCE THIS ARTICLE WAS PRODUCED, MS. HOLMES TOOK IT AND USED IT TO GET INVESTORS. NOW, IF SHE HAD NEVER TALKED TO MR. PARLOFF BUT THE ARTICLE CONTAINED A BUNCH OF THINGS THAT SHE KNEW TO BE FALSE AND SHE HAD TAKEN IT OUT AND USED IT WITH INVESTORS, THE GOVERNMENT COULD BE MAKING THE SAME ARGUMENT. SO WHAT PARLOFF THOUGHT AND WHAT CONNECTION HE MADE BETWEEN WHAT SHE SAID AND WHAT HE WROTE IN THE ARTICLE, IT JUST DOESN'T MATTER. AND THE PROBLEM WITH IT IS -- IN SOME CONTEXTS IT WOULD BE KIND OF HARMLESS. I MEAN, SURE, HE CAN EXPLAIN IT. IT'S NOT HARMLESS HERE, AND IT'S PARTICULARLY NOT HARMLESS BECAUSE THE JURY IS GOING TO HAVE HER ACTUAL WORDS IN MOST INSTANCES. I MEAN, THEY WILL HAVE A RECORDING OF EXACTLY WHAT SHE SAID. AND TO ALLOW HIM TO GLOSS THAT, TO NOT -- TO GO BEYOND WHAT SHE ACTUALLY SAID AND PUT HIS OWN, NO DOUBT PEJORATIVE CAST ON IT, PEJORATIVE IN LIGHT OF EVERYTHING THAT HAS HAPPENED SINCE, IS JUST UNFAIR. AND, OF COURSE, THERE'S NOTHING WHATSOEVER THAT I CAN DO WITH THAT ON CROSS. I CAN SAY, SHE SAID X AND NOW YOU'RE SAYING THAT YOU UNDERSTOOD Y. BUT WHERE IS THAT GOING TO GET ME? IT'S JUST UNFAIR AND IT'S TOTALLY UNNECESSARY.
JUDGE DAVILA: I GUESS, HOW DO YOU QUESTION THE AUTHOR THEN? HE ASKED A QUESTION, SHE SAID THIS, AND IT APPEARED IN HIS STORY. CAN'T THE GOVERNMENT SAY, YOU ASKED THIS QUESTION, SHE ANSWERED, AND DID YOU INCORPORATE HER ANSWER INTO YOUR STORY? YES. WHERE IS IT? IS IT THIS PAGE? IS IT THIS LINE? AND THAT'S WHY YOU WROTE IT?
MR. CLINE: WELL, THAT ACTUALLY GETS US TO ANOTHER OF MR. BOSTIC'S POINTS AND MAYBE I SHOULD MOVE THERE WITH YOUR HONOR'S PERMISSION.
JUDGE DAVILA: SURE.
MR. CLINE: THESE THINGS TEND TO BE --
JUDGE DAVILA: THEY OVERLAP A LITTLE.
MR. CLINE: -- OVERLAPPING. THIS IS -- I'M SKIPPING OVER ONE OF THEM, MOVING IN REVERSE ORDER, AND I'LL COME BACK TO IT. CONNECTING WHAT MS. HOLMES SAID TO THE CONTENT. THIS IS A LITTLE BIT MORE NUANCED BECAUSE IF MS. HOLMES SAID SOMETHING AND IT'S QUOTED IN THE ARTICLE, I DON'T HAVE ANY PROBLEM WITH MR. PARLOFF SAYING, YEAH, SHE TOLD ME THAT, AND HERE'S WHEN SHE TOLD ME THAT, APRIL 7TH, 2014. HERE IT IS, AND HERE IT IS QUOTED IN THE ARTICLE. IF MR. PARLOFF PARAPHRASES SOMETHING AND ATTRIBUTES IT TO MS. HOLMES, HE CAN SAY -- I THINK HE COULD SAY, HERE IS WHERE I DREW THAT PARAPHRASE FROM. HERE'S WHAT SHE SAID, HERE'S MY PARAPHRASE. I DON'T THINK HE CAN GO BEYOND THAT AND SAY, HERE'S WHY I PARAPHRASED IT THAT WAY, BUT I THINK THE CONNECTION CAN BE DRAWN. WHERE WE GET INTO TROUBLE IS IF THERE ARE THINGS IN THE ARTICLE THAT ARE NOT ATTRIBUTED TO ANYONE, STATEMENTS ABOUT THERANOS'S OPERATIONS, AND HE SAYS, I BASED THAT ON WHAT ELIZABETH HOLMES TOLD ME, THEN WE GET INTO WHAT OTHER PEOPLE TOLD HIM.
AND THAT'S GOING TO BE A PROBLEM BECAUSE HE TALKED TO A LOT OF PEOPLE ABOUT A BROAD RANGE OF TOPICS, INCLUDING ALMOST EVERYTHING THAT HE TALKED TO MS. HOLMES ABOUT, AND IF HE TRIES TO SAY, I WROTE THAT THAT WAY BECAUSE ELIZABETH HOLMES TOLD ME X, I THINK I GET TO SAY, WELL, THESE OTHER PEOPLE TOLD YOU X ALSO AND YOU DIDN'T WRITE THAT JUST BASED ON WHAT ELIZABETH HOLMES TOLD YOU, YOU WROTE THAT BASED ON WHAT A LOT OF OTHER PEOPLE TOLD YOU AS WELL? SO THERE ARE GRADATIONS ON THAT POINT. WHERE HE QUOTES HER, OF COURSE HE CAN SAY THAT'S A QUOTE, HERE'S WHERE SHE SAID IT, I HAVE IT RECORDED, HERE IT IS IN THE ARTICLE. WHERE HE PARAPHRASES HER, ELIZABETH HOLMES TOLD ME, AND THEN IT'S NOT A DIRECT QUOTE, IT'S A PARAPHRASE, I THINK THAT'S PROBABLY OKAY, TOO. THE PROBLEM COMES IN THESE UNATTRIBUTED STATEMENTS WHERE I THINK I GET TO CHALLENGE A CLAIM ON HIS PART THAT, OH, YEAH, I BASED THAT ON WHAT ELIZABETH HOLMES TOLD ME.
JUDGE DAVILA: DO YOU HAVE -- HAVE YOU IDENTIFIED THOSE PARTICULAR STATEMENTS IN THE ARTICLE?
MR. CLINE: WELL, THERE ARE -- THE ARTICLE IS FULL OF STATEMENTS OF ONE KIND OR ANOTHER ABOUT THERANOS AND I'M NOT SURE WHICH ONES THE GOVERNMENT IS GOING TO FOCUS ON. THERE ARE CERTAINLY QUOTES FROM MS. HOLMES THAT ARE EASILY IDENTIFIED IN THE ARTICLE, AND THERE ARE ALSO PARAPHRASES OF MS. HOLMES IN THE ARTICLE THAT ARE EASILY IDENTIFIED. WHAT I DON'T KNOW IS WHAT EFFORT THE GOVERNMENT IS GOING TO MAKE TO LINK THE PORTIONS THAT IT PLANS TO PLAY WITH UNATTRIBUTED STATEMENTS IN THE ARTICLE.
JUDGE DAVILA: LET ME JUST BE CLEAR. THIS ARTICLE IS IN EVIDENCE.
MR. CLINE: IT IS.
MR. BOSTIC: YES, YOUR HONOR.
MR. CLINE: IT IS.
MR. BOSTIC: AND I THINK I CAN PROVIDE SOME CONCRETE EXAMPLES THERE, TOO, IF IT'S HELPFUL.
JUDGE DAVILA: SURE.
MR. BOSTIC: I FIND THAT POSITION EXPRESSED BY MR. CLINE TO BE A LITTLE CONFUSING IN LIGHT OF EXAMPLES LIKE THIS: THE ARTICLE SAYS, FOR EXAMPLE, "IMPORTANTLY, IT'S NOT JUST THE BLOOD DRAWS THAT ARE TINY. IT'S ALSO THE ANALYTICAL SYSTEMS THERANOS USES TO PERFORM THE TESTS. THEY TAKE UP A SMALL FRACTION OF THE FOOTPRINT REQUIRED BY A CONVENTIONAL LAB TODAY." THAT'S A PARAGRAPH ON ITS OWN. IT'S NOT A QUOTE FROM MS. HOLMES. IT DOESN'T SAY, MS. HOLMES TOLD ME SOMETHING TO THIS EFFECT. SO UNDER THE POSITION THAT MR. CLINE JUST ARTICULATED, THE GOVERNMENT I THINK WOULD NOT BE PERMITTED TO LINK THIS TO ANY STATEMENT BY MS. HOLMES. BUT IN THE RECORDINGS, THERE ARE MULTIPLE OCCASIONS WHERE MS. HOLMES TALKS ABOUT THE SMALL SIZE OF A THERANOS ANALYZERS. SO I TRULY CANNOT THINK OF A REASON WHY IT WOULD BE INAPPROPRIATE OR INADMISSIBLE FOR THE JURY TO HEAR THOSE STATEMENTS, MS. HOLMES SAYING THE ANALYZERS ARE SMALL, HERE'S HOW BIG THEY ARE, OTHER LABS HAVE THESE BIG ANALYZERS, WE'RE DIFFERENT, AND THEN TO POINT TO THIS LANGUAGE IN THE ARTICLE AND SIMPLY HAVE THIS WITNESS CONFIRM THAT THAT LANGUAGE WAS CONSISTENT WITH WHAT MS. HOLMES SAID. AS FAR AS WHAT OTHER PEOPLE MIGHT HAVE TOLD HIM, I WOULD STEER CLEAR OF ASKING HIM WHETHER A STATEMENT IN THE ARTICLE WAS SOLELY BASED ON WHAT MS. HOLMES SAID. THAT'S NOT RELEVANT TO THIS CASE OR TO THE JURY'S ANALYSIS. AND I STILL JUST DON'T UNDERSTAND WHY THE STATEMENTS MADE BY OTHERS WOULD BE RELEVANT OR IMPORTANT FOR THE JURY TO KNOW ABOUT. IF MS. HOLMES MADE A STATEMENT THAT IS CONSISTENT WITH WHAT IS IN THE ARTICLE, WHY DOES IT MATTER THAT OTHER PEOPLE SAID SOMETHING THE SAME OR DIFFERENT, ESPECIALLY IF THOSE STATEMENTS ARE NOT COMING IN FOR THEIR TRUTH? I JUST HAVEN'T HEARD THAT EXPLANATION ARTICULATED BY THE DEFENSE.
JUDGE DAVILA: SURE. WHAT ABOUT MR. BOSTIC'S HYPOTHETICAL? THAT'S NOT A PROBLEM, I TAKE IT.
MR. CLINE: IF MS. HOLMES IS THE ONLY SOURCE OF SOME PARTICULAR FACT, THERE'S NO NEED FOR HIM TO LINK IT. I DON'T THINK IT'S RELEVANT. I DON'T THINK THE LINKAGE IS IMPORTANT. BUT IN THAT UNIQUE INSTANCE, IT MAY NOT OPEN UP THE KIND OF CROSS THAT I'VE BEEN TALKING ABOUT, ALTHOUGH IF OTHER PEOPLE PROVIDED THAT SAME INFORMATION AND HE SAYS, I WROTE THIS BASED ON WHAT MS. HOLMES TOLD ME, THEN I'M GOING TO GET INTO THOSE OTHER AREAS. NOW, THAT MAY BE AN INSTANCE WHERE THERE ISN'T SOMEBODY ELSE, SO MY CONCERN IS MORE THEORETICAL THAN REAL. BUT THERE ARE PLENTY OF OTHER EXAMPLES. THE AFGHANISTAN ONE IS A PERFECT ILLUSTRATION WHERE MR. PARLOFF TALKED TO A NUMBER OF PEOPLE ABOUT WHATEVER THE TOPIC WAS, AND THERE'S JUST NO WAY THAT HE SHOULD BE PERMITTED TO SAY, I WROTE THAT BASED ON WHAT ELIZABETH HOLMES TOLD ME, AND HAVE ME NOT ABLE TO SAY, WELL, NOW, WAIT A MINUTE, YOU'RE SAYING THAT ELIZABETH HOLMES WAS RESPONSIBLE FOR CAUSING YOU TO PUT THAT IN THE ARTICLE WHEN YOU TALKED TO SECRETARY PERRY, YOU TALKED TO GENERAL MATTIS, AND I DON'T MEAN TO -- I'M USING THIS AS A PURELY HYPOTHETICAL EXAMPLE.
JUDGE DAVILA: SURE.
MR. CLINE: I'M NOT ATTRIBUTING PARTICULAR STATEMENTS TO THOSE PEOPLE. I WANT TO BE CLEAR ABOUT THAT. BUT THAT'S JUST AN EXAMPLE. OR TAKE THE WALGREENS RELATIONSHIP. MS. HOLMES AND MR. PARLOFF TALKED ABOUT THE WALGREENS RELATIONSHIP. WELL, MR. PARLOFF ALSO TALKED TO THE CEO OF WALGREENS, AND SO IF HE WROTE SOMETHING IN THE ARTICLE ABOUT THE RELATIONSHIP WITH WALGREENS AND TRIES TO ATTRIBUTE THAT TO MS. HOLMES, I CAN CERTAINLY SAY, NOW, WAIT A MINUTE, YOU ALSO -- YOU TALKED TO THE CEO OF WALGREENS AND THE CEO OF WALGREENS TOLD YOU X, Y, AND Z. I JUST DON'T SEE HOW WE CAN PRESENT TO THE JURY A FALSE PICTURE OF BASICALLY PARLOFF TALKS TO HOLMES, HOLMES SAYS X, PARLOFF WRITES X, AND WE LOOK AT ALL OF THAT AS IF THAT'S ALL THAT HAPPENED. PARLOFF DID A -- HE TALKED TO A WHOLE BUNCH OF PEOPLE.
JUDGE DAVILA: WELL, SHE TOLD HIM TO, RIGHT? SHE GAVE HIM OTHER SOURCES TO SPEAK TO?
MR. CLINE: SHE DID, AND HE TALKED TO A NUMBER OF PEOPLE THAT SHE RECOMMENDED. I THINK HE ALSO TALKED TO OTHER PEOPLE. HE TALKED, FOR EXAMPLE, TO REPRESENTATIVES FROM QUEST AND LABCORP, THE BIGGEST COMPETITORS.
JUDGE DAVILA: SO HOW DO WE DEAL WITH THAT ISSUE IF THAT COMES UP? I DON'T KNOW IF IT'S GOING TO, BUT, MR. BOSTIC, HAVE YOU THOUGHT ABOUT THAT?
MR. BOSTIC: THE GOVERNMENT WON'T ASK ABOUT THOSE OTHER CONVERSATIONS, YOUR HONOR. I DON'T KNOW IF THAT IS ENOUGH TO -- I'M SORRY, GO AHEAD.
JUDGE DAVILA: I'M SORRY TO INTERRUPT YOU. BUT IF SHE SAYS -- OR PARLOFF SAYS, WELL, SHE TOLD ME TO TALK TO ASK OTHER PEOPLE. DID YOU TALK TO OTHER PEOPLE? YES. THEN THAT DOOR IS OPENED, IS IT? I KNOW YOU'RE GOING TO STAY AWAY FROM THAT. BUT, I DON'T KNOW. WHAT DO YOU THINK ABOUT THAT, MR. CLINE?
MR. CLINE: WELL, I THINK THE FACT THAT MS. HOLMES URGED HIM TO TALK TO OTHER PEOPLE IS AN EXCULPATORY FACT. I THINK THAT WILL UNDOUBTEDLY -- I MEAN, IT'S APPARENT FROM THE ARTICLE ITSELF. I THINK IT WILL LIKELY COME OUT IN ONE FORM OR ANOTHER JUST AS HE'S DESCRIBING WHAT HE DID. IF HE'S CONFINED TO THE OBJECTIVE FACTS, THEN I WILL ASK RELATIVELY LITTLE ABOUT THOSE OTHER INQUIRIES. HERE'S THE BASIC PROBLEM: AS LONG AS HE'S CONFINED TO SORT OF THE OBJECTIVE FACTS, I TALKED TO ELIZABETH HOLMES, SHE TOLD ME X, I WROTE AN ARTICLE, HERE IT IS, GOOD-BYE, I DON'T THINK WE NEED TO GET INTO THE AREAS THAT MR. PARLOFF IS CONCERNED ABOUT ON PRIVILEGE GROUNDS AND CONFIDENTIALITY GROUNDS, THE WHOLE SUBPOENA ISSUE, AS WELL AS AREAS OF CROSS-EXAMINATION THAT I THINK MR. PARLOFF WOULD FIND OBJECTIONABLE, RIGHTLY OR WRONGLY. THE FURTHER WE STRAY AWAY FROM THAT, AND IN PARTICULAR IF WE START GETTING INTO THESE DISCUSSIONS OF I, I, YOU KNOW, I BASED WHAT I WROTE ON WHAT MS. HOLMES TOLD ME, WE'RE GOING TO START GETTING INTO THOSE AREAS. AND I THINK IT IS PARTICULARLY IMPORTANT TO BE ABLE TO GET INTO THOSE AREAS IN LIGHT OF THE FACT THAT IN MANY INSTANCES MS. HOLMES DID URGE MR. PARLOFF TO TALK TO PEOPLE. AND THESE WEREN'T -- YOU KNOW, I THINK THE GOVERNMENT WOULD LIKE TO PORTRAY IT AS PEOPLE WHO ARE SORT OF UNDER HER CONTROL. WE'RE TALKING ABOUT THE HEAD OF UCSF, WE'RE TALKING ABOUT THE CEO OF WALGREENS, WE'RE TALKING ABOUT DR. DAVID HELFET WHO IS --
JUDGE DAVILA: AND ARE ANY OF THOSE RELATED TO THE SUBPOENA?
MR. CLINE: YES, YES, THEY ARE. BUT AGAIN -- SORRY TO KEEP SOUNDING LIKE A BROKEN RECORD HERE, BUT THE MORE WE CAN CONFINE THIS TO THESE OBJECTIVE FACTS AND STAY AWAY FROM MR. PARLOFF'S KIND OF SUBJECTIVE LINKAGES AND IMPRESSIONS AND SO FORTH, THE LESS RELEVANCE THE SUBSTANCE OF WHAT THOSE PEOPLE TOLD THEM HAS.
JUDGE DAVILA: SURE. I UNDERSTAND THAT. BUT MR. BOSTIC'S EXAMPLE ABOUT THE MACHINE, SHE SAID THE MACHINE COULD DO THIS, BUT SHE DIDN'T WANT TO TALK ABOUT IT, AND THOSE TYPES OF THINGS. AND THEN HE PUT IN HIS ARTICLE, NOT A DIRECT QUOTE, BUT HE WROTE IN HIS ARTICLE, THE MACHINES ARE SMALL, THEY'RE THIS, THEY'RE THAT, THEY'RE THAT. YOU DON'T HAVE A PROBLEM WITH THAT?
MR. CLINE: I DON'T HAVE A PROBLEM WITH HIM SAYING -- PLAYING THE RECORDING OF WHAT SHE ACTUALLY TOLD HIM SO IT'S NOT HIS IMPRESSION OF IT OR HIS UNDERSTANDING OF IT, THIS IS WHAT SHE SAID, I DON'T HAVE A PROBLEM WITH HIM SAYING, I WROTE IN MY ARTICLE X, Y, AND Z. I THINK THE LINKAGE IS FOR THE GOVERNMENT TO MAKE IN ARGUMENT AND FOR US TO DISPUTE IN ARGUMENT. I THINK IT MAY BE -- AND I'M NOT COMMITTING MYSELF TO THIS -- BUT IT MAY BE IN THAT ONE INSTANCE THAT MR. BOSTIC PICKED, NONE OF THOSE OTHER PEOPLE SHE TALKED TO WOULD HAVE ADVISED HER ON THAT PARTICULAR TOPIC. SO IT MIGHT BE, JUST AS A FACTUAL MATTER, THAT ON THAT ONE TOPIC MY CROSS -- I WOULDN'T HAVE ANYTHING TO CROSS HIM ABOUT. BUT I DON'T THINK MR. BOSTIC PLANS TO JUST ASK THAT ONE EXAMPLE. I THINK HE'S GOT PROBABLY A RANGE OF THINGS THAT HE -- WHERE HE WANTS TO DRAW THOSE SAME LINKAGES AND WE'RE GOING TO GET INTO THESE OTHER AREAS AS SOON AS HE STARTS TO LINK WHAT SHE SAID TO WHAT HE WROTE. AND WHAT TROUBLES ME ABOUT IT IS IT'S TOTALLY UNNECESSARY TO THE REAL POINT THAT THE GOVERNMENT WANTS TO MAKE, WHICH IS SHE TALKED TO HIM, SHE SAID THESE THINGS, HE WROTE AN ARTICLE, AND THE CRITICAL POINT IS THAT SHE TOOK AN ARTICLE THAT -- ACCORDING TO THE GOVERNMENT -- IS FULL OF FALSE THINGS AND -- AGAIN, ACCORDING TO THE GOVERNMENT -- USED IT WITH INVESTORS. THAT'S WHAT IS IMPORTANT HERE.
JUDGE DAVILA: I UNDERSTAND THAT, AND I THINK MR. BOSTIC DOES, TOO. I THINK THE GOVERNMENT DOES, TOO. AND WE'RE FLIRTING WITH THE MARGINS HERE ABOUT HOW FAR AND WHAT DOORS MIGHT BE OPENED OR NOT. MR. BOSTIC?
MR. BOSTIC: YES, YOUR HONOR. SO I THINK THIS WITNESS OBVIOUSLY IS IN THE BEST POSITION TO TESTIFY ABOUT THE LINKAGE BETWEEN WHAT MS. HOLMES SAID AND WHAT ENDS UP IN THE ARTICLE. HE'S THE ONE WHO HAD THE CONVERSATION WITH MS. HOLMES. HE'S THE ONE WHO CREATED THE ARTICLE. MR. CLINE KEEPS USING A CONSTRUCTION OF A QUESTION LIKE, I WROTE THIS BASED ON WHAT MS. HOLMES TOLD ME. AND I THINK HIS CONCERN IS THE IMPLICATION THAT INFORMATION IN THE ARTICLE MIGHT BE SOLELY ATTRIBUTED TO MS. HOLMES. THE GOVERNMENT HAS NO INTEREST IN DRIVING HOME THAT POINT AND SHOWING THAT THIS INFORMATION ONLY CAME FROM MS. HOLMES. THE POINT INSTEAD IS ON MS. HOLMES'S INTENT, AND THE GOVERNMENT IS PERMITTED TO SHOW THAT SHE INTENDED TO DECEIVE THIS WITNESS. THAT'S NOT THE SAME THING AS SAYING HE'S A VICTIM OF THE FRAUD, BUT I WANT TO BE CLEAR THAT THAT IS AN ACCEPTABLE ARGUMENT AND SUBJECT OF TESTIMONY FOR THIS WITNESS, THE DEFENDANT'S INTENT TO DECEIVE HIM.
JUDGE DAVILA: SURE. SURE.
MR. BOSTIC: AND WHEN IT COMES TO THAT, WHY SHOULD THE WITNESS NOT BE ABLE TO EXPLAIN THE EFFECT THAT MS. HOLMES'S STATEMENTS, AGAIN, HER STATEMENTS ALONE, WERE HAVING ON HIS UNDERSTANDING OF WHAT THE COMPANY'S TECHNOLOGY COULD DO? AND I STILL JUST HAVEN'T HEARD -- I HEARD MR. CLINE TALK ABOUT THE FACT THAT MS. HOLMES ENCOURAGED THE WITNESS TO TALK TO OTHER INDIVIDUALS, I SEE THE ARGUMENT THAT THAT MIGHT BE RELEVANT TO HER STATE OF MIND. IF SHE'S SENDING HIM TO SEEK OTHER SOURCES OF INFORMATION, I THINK THAT'S A FAIR POINT FOR THEM TO BRING OUT IF IT'S WITHIN THE SCOPE OF THE DIRECT AND OTHERWISE ADMISSIBLE. BUT THAT POINT CAN BE MADE WITHOUT REFERENCE TO THE CONTENT OF THE CONVERSATIONS THAT HE HAD WITH THOSE INDIVIDUALS. I JUST DON'T SEE WHY THE SUBSTANCE OF HIS COMMUNICATIONS WITH THOSE OTHER INDIVIDUALS PLAYS TO THAT POINT. CONVERSATIONS THAT MS. HOLMES WASN'T PRESENT AT, CONVERSATIONS WHERE THE STATEMENTS THAT THOSE WITNESSES MADE ARE JUST HEARSAY. SO IF THEY'RE COMING IN FOR THE TRUTH AS CONFIRMATION OF WHAT MS. HOLMES SAID, THAT'S AN IMPERMISSIBLE USE OF THOSE STATEMENTS, AND I CAN'T THINK OF A PERMISSIBLE ONE.
JUDGE DAVILA: SO WHAT DO WE -- HOW DO WE DEAL WITH THAT THOUGH? THE ARTICLE IS NOT JUST AN INTERVIEW OF MS. HOLMES APPARENTLY. HE DID SOME ADDITIONAL RESEARCH. HE MAY HAVE TALKED TO PEOPLE AT HER URGING REQUEST TO INFORM HIM SO HE COULD WRITE THE ARTICLE. AND HOW DO YOU -- HOW DO WE CROSS THOSE BRIDGES WHEN THEY COME UP AS TO CERTAIN TOPICS AND THINGS? I THINK THIS IS A REAL ISSUE THAT WE HAVE TO NAVIGATE VERY CAREFULLY.
MR. BOSTIC: I THINK PART OF IT, YOUR HONOR, IS THAT IT'S ON THE GOVERNMENT TO MAKE SURE THAT OUR QUESTIONS ARE FRAMED NOT TO MAKE THE SUGGESTION THAT MS. HOLMES WAS THE ONLY SOURCE OF INFORMATION FOR THE ARTICLE OR THAT OTHER PEOPLE MIGHT NOT HAVE SAID CONSISTENT THINGS. AS LONG AS THAT IMPLICATION ISN'T MADE, THEN THAT FALSE IMPRESSION WON'T BE MADE IN THE JURY'S MINDS. THIS ISN'T ABOUT LOOKING AT THE ARTICLE AND DETERMINING WHO IS RESPONSIBLE FOR EACH LINE IN THE ARTICLE. THE FOCUS HERE IS ON THE DEFENDANT'S INTENT AND THE STATEMENTS SHE MADE, SOME OF WHICH ARE RELEVANT JUST BECAUSE THEY'RE DECEPTIVE STATEMENTS ON THEIR OWN, SOME CAN BE TIED TO LANGUAGE IN THE ARTICLE. BUT THE FACT IS THAT THE DEFENDANT, WHILE SHE WAS SPEAKING TO MR. PARLOFF, INTENDED TO DECEIVE HIM, AND I THINK THAT WILL BE CLEAR FROM THE RECORDINGS AND THE STATEMENTS THAT THE WITNESS RECOUNTS. THE FACT THAT THOSE STATEMENTS CREATED A FALSE IMPRESSION IN THE WITNESS'S MIND THAT THEN RESULTED IN A FALSE IMPRESSION BEING CONVEYED IN THE ARTICLE IS WHAT THIS IS ALL ABOUT.
JUDGE DAVILA: SURE.
MR. BOSTIC: AND TO THE EXTENT THAT HE HAD OTHER SOURCES --
JUDGE DAVILA: RIGHT. BUT HE'S NOT GOING TO SAY, "I WAS LIED TO"?
MR. BOSTIC: NO, YOUR HONOR.
JUDGE DAVILA: HE'S GOING TO SAY, I WAS WRITING A STORY AND THIS IS WHAT WAS SAID AND HERE'S WHAT I WROTE AT THAT PARTICULAR TIME. HE'S NOT GOING TO TALK AT ALL ABOUT HIS LATER ARTICLE. AND I KNOW THAT THE OTHER ISSUE I HAVE IS WHETHER OR NOT YOU'RE GOING TO TRY TO RAISE, MR. CLINE, SOME BIAS OR SOMETHING BECAUSE OF HIS SUBSEQUENT ARTICLE AND BRING IT IN SOMEHOW, BECAUSE AS YOU'VE TOLD ME, I THINK YOUR PLEADINGS SUGGEST, HE'S VERY BIASSED AGAINST HER, HE'S UPSET WITH HER, SHE CAUSED HIS REPUTATION TO BE DAMAGED IN THE JOURNALISTIC COMMUNITY AND, THEREFORE, HE HAS AN AX TO GRIND. AND AS YOU KNOW, WE'VE TALKED ABOUT IT, BIAS IS ALWAYS RELEVANT. I DON'T KNOW HOW FAR YOU'RE GOING TO GO WITH THAT, AND IF YOU DO, THAT CREATES OTHER ISSUES, DOESN'T IT? BUT BACK TO MR. BOSTIC FOR A SECOND.
MR. CLINE: SURE.
JUDGE DAVILA: I UNDERSTAND THAT THE ARTICLE IS PART OF THE GOVERNMENT'S CASE, IT SOUNDS LIKE, AS TO DECEPTION, THAT SHE USED IT TO DECEIVE. HIS PART IN THIS IS NOT -- HIS PART IS HE WAS THE AUTHOR. THE FACT THAT HE MAY OR MAY NOT HAVE BEEN DECEIVED IS NOT RELEVANT. THE FACT IS, HE'S THE SCRIVENER AND HE WROTE THE ARTICLE BASED ON HER STATEMENTS, HE MEMORIALIZED HER STATEMENTS IN AN ARTICLE THAT WAS SUBSEQUENTLY USED BY HER, AND THAT'S THE IMPORTANT PART OF IT.
MR. BOSTIC: THAT'S AN IMPORTANT PART, YOUR HONOR. I THINK THE FACT THAT HE WAS DECEIVED IS RELEVANT BECAUSE IT'S RELEVANT OF HER INTENT TO DECEIVE.
JUDGE DAVILA: AND HOW DOES HIS DECEPTION COME IN? ARE YOU EVER GOING TO ASK HIM, DID YOU FEEL THAT YOU WERE DECEIVED?
MR. BOSTIC: NO, YOUR HONOR.
JUDGE DAVILA: OF COURSE NOT.
MR. BOSTIC: BECAUSE HE DOESN'T HAVE A BASIS TO SAY THAT.
JUDGE DAVILA: RIGHT.
MR. BOSTIC: BECAUSE THAT WOULD REQUIRE HIM TO JUDGE THE TRUTH OF WHAT MS. HOLMES SAID.
JUDGE DAVILA: EXACTLY.
MR. BOSTIC: SO THAT'S WHAT WE'RE GOING TO BE CAREFUL TO STAY AWAY FROM. BUT THE FACT THAT HE CAME AWAY FROM CONVERSATIONS WITH MS. HOLMES BELIEVING X WHEN THE JURY KNOWS THAT NOT X WAS TRUE, THAT'S AN IMPORTANT FACT.
JUDGE DAVILA: SO YOU BELIEVED WHAT SHE TOLD YOU? YES. YOU WROTE THE ARTICLE BASED ON THOSE BELIEFS? YES. AND WE MOVE ON.
MR. BOSTIC: YES, YOUR HONOR. THE ONLY REASON I'M PUSHING BACK ON BEING ABLE TO GET INTO HIS UNDERSTANDING, LET ME PROVIDE ONE MORE EXAMPLE AND MAYBE THIS ONE WILL HELP.
JUDGE DAVILA: SURE.
MR. BOSTIC: THERE WILL BE SOME CASES WHERE A STATEMENT FROM MS. HOLMES NEEDS TO BE PLACED IN THE CONTEXT OF MR. PARLOFF'S OVERALL UNDERSTANDING, INFORMED BY THEIR SEVERAL CONVERSATIONS, IN ORDER TO MAKE SENSE TO THE JURY. FOR EXAMPLE, I DON'T HAVE THE EXACT LANGUAGE IN FRONT OF ME, BUT THERE'S A POINT WHERE MR. PARLOFF ASKS ABOUT THE ARIZONA LAB AND WHAT IS BEING DONE THERE. AND THE COURT MAY KNOW THAT THE ARIZONA LAB OPERATED BY THERANOS DID NOT RUN ANY LABORATORY DEVELOPED TESTS, IT ONLY RAN FDA APPROVED NONTHERANOS ASSAYS, THE SAME WAY THAT ANY OTHER LAB WOULD DO. WHEN MR. PARLOFF ASKED ABOUT THAT AND THE NEED FOR VEIN PUNCTURE, MS. HOLMES SAID SOMETHING TO THE EFFECT OF, WELL, THAT RELATES TO OUR REFERENCE LAB SERVICE WHERE WE'RE DOING ESOTERIC TESTS, SOMETHING DIFFERENT FROM WE'RE JUST RUNNING RUN OF THE MILL TESTS THERE THE WAY THAT ANY OTHER LAB WOULD. THEY PREVIOUSLY HAD SPOKEN ABOUT ESOTERIC TESTS AND REFERENCE LABS, SO IT'S IMPORTANT IN THAT CASE TO BE ABLE TO ASK HIM, WHAT DID YOU UNDERSTAND HER ANSWER TO MEAN? WHAT DID SHE MEAN BY ESOTERIC TESTS? AND WHAT DID THAT MEAN ABOUT WHAT THEY WERE DOING IN THE PHOENIX LAB? WHAT WAS SHE SAYING TO YOU AS YOU UNDERSTOOD IT? BECAUSE HE HAS A BACKGROUND TO UNDERSTAND THAT, SUPPLIED BY HER, THAT THE JURY WON'T HAVE. SO IN ORDER FOR THE SIGNIFICANCE TO COME THROUGH TO THE JURY, IT'S IMPORTANT THAT HE BE ABLE TO PROVIDE THAT. IT'S NOT AN OPINION, IT'S SIMPLY THE ADDITIONAL CONTEXT TO UNDERSTAND THAT. KEEPING IT OUT ROBS THE TESTIMONY OF SOME OF ITS IMPACT AND SIGNIFICANCE, SO IT BENEFITS THE DEFENSE, BUT I DON'T THINK THOSE POINTS ARE IRRELEVANT OR INADMISSIBLE.
JUDGE DAVILA: SO THAT'S A SITUATION WHERE SHE TOLD YOU X ABOUT THE PHOENIX LABS AT ONE TIME, AND THEN YOU ASKED HER AGAIN AND SHE SAID THIS ABOUT THE PHOENIX LABS, DIFFERENT THAN THE PREVIOUS STATEMENT?
MR. BOSTIC: I DON'T THINK THAT'S AN EXAMPLE OF INCONSISTENT STATEMENTS ON DIFFERENT OCCASIONS. I THINK INSTEAD IT'S THAT, THROUGH THE COURSE OF THEIR CONVERSATIONS, MR. PARLOFF HAD DEVELOPED AN UNDERSTANDING ABOUT WHAT AN ESOTERIC TEST WAS. AN ESOTERIC TEST WOULD BE SOMETHING THAT WAS RARELY ORDERED, IT'S TYPICALLY VERY EXPENSIVE, MAYBE ONLY A TINY SEGMENT OF THE POPULATION NEEDS IT. SO WHEN MS. HOLMES SAYS, THE PHOENIX LAB IS THERE TO DO ESOTERIC TESTS AS PART OF OUR REFERENCE LAB SERVICE, SHE WAS TELLING HIM, BASED UPON THEIR PREVIOUS CONVERSATIONS, THAT THAT LAB WAS FOCUSSED ON DOING THESE SPECIALIZED RARE TESTS. THAT WASN'T TRUE. BUT IN ORDER FOR THE JURY TO UNDERSTAND KIND OF THE INTENT BEHIND HER STATEMENT, THEY NEED TO UNDERSTAND WHAT A LISTENER IN MR. PARLOFF'S POSITION, WITH HIS BACKGROUND, WOULD HAVE TAKEN FROM IT, AND SO THAT'S WHAT HE SHOULD BE ALLOWED TO PROVIDE.
JUDGE DAVILA: OKAY.
MR. CLINE: AND I DISAGREE WITH THAT. I MEAN, IF THE GOVERNMENT WANTS TO PLAY THE RELEVANT, WHAT THEY CONSIDER TO BE THE RELEVANT PORTIONS OF MS. HOLMES'S STATEMENT AND THEN ARGUE, AS MR. BOSTIC JUST DID, TO THE JURY ULTIMATELY THAT THIS WAS A LIE BECAUSE OF X, Y, AND Z, OF COURSE THEY CAN DO THAT. BUT TO ADD TO THAT THE GLOSS OF MR. PARLOFF'S UNDERSTANDING, IT'S, IT'S -- IT INVITES -- IT JUST INVITES A MESS HERE. AND LET ME GIVE YOU HAVE AN EXAMPLE OF WHY IT INVITES THAT. YOU MENTIONED BIASSED A MOMENT AGO, WHICH IS SOMETHING I DIDN'T REALLY TALK ABOUT EARLY ON, BUT THE MORE WE GET INTO MR. PARLOFF'S SUBJECTIVE VIEWS, WHICH, OF COURSE, ARE NOT -- HE'S NOT ABLE TO TESTIFY NOW ABOUT WHAT HE THOUGHT AT THE TIME. EVERYTHING IS FILTERED THROUGH THE EVENTS THAT HAVE HAPPENED OVER THE LAST SEVEN YEARS, AND A LOT HAS HAPPENED IN MR. PARLOFF'S LIFE AND OTHERWISE.
SO WHEN HE STARTS TALKING ABOUT HIS SUBJECTIVE VIEWS OF WHAT SHE SAID, NOT HER ACTUAL WORDS, THOSE OF COURSE ARE ADMISSIBLE, BUT NOW HE'S GLOSSING THEM, BIAS AND OTHER IMPEACHMENT METHODOLOGIES COME VERY MUCH INTO PLAY. AND THE FACT THAT HE'S BIASSED BASED ON WHAT HE PERCEIVES AS HAVING BEEN MISLED, AND PERHAPS ON OTHER ISSUES AS WELL, COMES DIRECTLY INTO PLAY. I WILL TELL YOU THAT IF WE STICK TO SORT OF THE PROGRAM THAT I HAVE TALKED ABOUT, I DON'T PLAN TO GET INTO ANY OF THAT, BECAUSE IT JUST TURNS INTO A BIG MESS THAT WILL -- IT WILL AFFECT MR. PARLOFF, IT WILL HURT THE GOVERNMENT, AND NO DOUBT SOME OF IT WILL SPLATTER BACK ON US. IT'S JUST A MESS. AND IT'S ALSO GOING TO IMPLICATE THESE PRIVILEGE ISSUES AND THESE OTHER ISSUES THAT MR. PARLOFF WANTS TO STAY AWAY FROM. AND ALTHOUGH I DISAGREE WITH HIM ON THE LAW, I UNDERSTAND WHY HE WANTS TO TAKE THAT VIEW. AND, IN FACT, I'M CONFIDENT THAT THAT IS WHY MR.
PARLOFF HIMSELF IN HIS PLEADING HAS TAKEN A VERY NARROW VIEW OF WHAT HIS PERMISSIBLE TESTIMONY WOULD BE. I THINK HE WANTS TO STAY AWAY FROM ALL OF THAT. SO DO I. BUT THE MORE WE GET INTO HIS SUBJECTIVE IMPRESSION, THE MORE WE'RE GOING TO BE TALKING ABOUT A RANGE OF ISSUES THAT WILL CREATE NOTHING BUT PROBLEMS, AND BIAS IS CERTAINLY ONE OF THEM. THESE OTHER SOURCES ARE ANOTHER. I UNDERSTAND WHY THE GOVERNMENT WANTS TO DO THAT, BECAUSE THEY HAVE A WITNESS HERE WHO WILL, IN EVERY INSTANCE, PUT THE MOST PEJORATIVE POSSIBLE TWIST ON THINGS AND IN THE MOST FAVORABLE TO THE GOVERNMENT. I DON'T THINK THE COURT SHOULD ALLOW IT UNDER RULE 403, BUT ALSO FOR THE PRACTICAL REASONS THAT WE'RE JUST GOING TO CREATE A MESS IF WE GO DOWN THAT ROAD.
JUDGE DAVILA: OKAY. DID YOU HAVE ANOTHER TOPIC YOU WANTED TO GET BACK TO?
MR. CLINE: I DID. LET ME GO THROUGH THEM IN REVERSE. MR. BOSTIC MENTIONED, AND WE TALKED ABOUT THIS A LITTLE BIT IN OUR PHONE CALL ON FRIDAY, IF MS. HOLMES HAD TOLD YOU X, WOULD YOU HAVE WRITTEN WHAT YOU WROTE? I THINK, AGAIN, THAT'S JUST TOTAL SPECULATION AT THIS POINT, AND THE FACT THAT HE IS NOT -- IF HE WERE AN INVESTOR, THEN MAYBE THAT QUESTION WOULD GO TO MATERIALITY. BUT AS MR. BOSTIC HAS SAID, AND I AGREE, MATERIALITY IS NOT AN ISSUE WITH MR. PARLOFF. HERE IT'S JUST PURE SPECULATION, AND OF COURSE IN EVERY INSTANCE HE'S GOING TO SAY, OH, NO, I WOULD NEVER HAVE WRITTEN THAT IF ONLY I HAD KNOWN X, Y, AND Z.
JUDGE DAVILA: WELL, THAT LOOKS A LITTLE BROAD, MR. BOSTIC. WOULD YOU HAVE WRITTEN IT DIFFERENTLY IF SHE HAD SAID SOMETHING? IS THAT A QUESTION THAT YOU INTEND TO ASK HIM?
MR. BOSTIC: YES, YOUR HONOR. FIRST OF ALL, THAT'S NOT SPECULATION. IT'S ASKING THE WITNESS ABOUT HIS OWN DECISIONS, NOT ABOUT SOMEONE ELSE'S OR NOT SOMETHING IN THE FUTURE. HERE'S AN EXAMPLE. THE ARTICLE TALKS ABOUT THE NUMBER OF TESTS THAT COULD BE RUN ON THERANOS'S TECHNOLOGY. IF MS. HOLMES HAD TOLD HIM -- AND I THINK THE ARTICLE SAYS -- I FORGET WHETHER IT SAYS 200 OR 1,000 TESTS CAN BE RUN, BUT THE QUESTION MIGHT BE SOMETHING LIKE, IF MS. HOLMES HAD TOLD YOU THAT THE MAJORITY OF THERANOS'S TESTS WERE ACTUALLY RUN ON THIRD PARTY DEVICES, WOULD THAT HAVE AFFECTED THAT STATEMENT IN THE ARTICLE? I THINK THE ANSWER IS OBVIOUS. I THINK THE ANSWER IS YES, OF COURSE IT WOULD HAVE, BECAUSE THE ARTICLE GIVES THE IMPRESSION THAT ALL OF THOSE TESTS ARE BEING RUN ON THE THERANOS TECHNOLOGY. SO IF MS. HOLMES HAD TOLD HIM ABOUT THE COMPANY'S RELIANCE ON THIRD PARTY DEVICES, WOULD THAT HAVE AFFECTED THE INFORMATION THAT WAS THEN CONVEYED IN THE ARTICLE?
JUDGE DAVILA: WELL, THAT SOUNDS LIKE IT'S A SHE SAID ONE THING, THEY'RE BEING RUN ON ONE TYPE OF MACHINE, AND THEN -- I THINK YOU'VE ASKED THIS OF INVESTORS -- YOU KNOW, IF YOU KNEW THAT THEY WEREN'T RUN -- IF YOU KNEW THAT THEY WERE RUN ON A THIRD PARTY'S, AS OPPOSED TO THE COMPANY'S MACHINES, WOULD THAT HAVE CHANGED YOUR OPINION? ISN'T THIS THE SAME QUESTION?
MR. BOSTIC: I THINK IT'S SIMILAR, YOUR HONOR. IT'S ASKED FOR A DIFFERENT REASON.
JUDGE DAVILA: RIGHT.
MR. BOSTIC: I THINK --
JUDGE DAVILA: AND WHY ISN'T THAT, WHY ISN'T THAT PERMISSIBLE?
MR. CLINE: HERE'S THE DIFFERENCE. WITH INVESTORS, THEY HAVE TO PROVE MATERIALITY. SO A QUESTION LIKE THAT, EVEN IF THE ANSWER IS OBVIOUS, GOES TO THE MATERIALITY OF THE INFORMATION. MATERIALITY IS IRRELEVANT WHEN IT COMES TO MR. PARLOFF. IT DOESN'T MATTER WHETHER THE STATEMENTS WERE MATERIAL OR NOT.
JUDGE DAVILA: BUT DOESN'T IT COME IN TO PROVE, AS MR. BOSTIC SAID, AT LEAST IT'S INFORMATION THAT THE JURY CAN CONSIDER AS TO WHETHER OR NOT THERE WAS DECEPTION? NOT AS TO THIS WITNESS, BUT AS TO HOW SHE USED IT, AND THE GOVERNMENT IS GOING TO ARGUE THAT'S PART OF THE PLAN AND SCHEME.
MR. CLINE: AND THE GOVERNMENT CAN ARGUE THAT ALL IT WANTS. BUT THIS WITNESS SHOULD NOT BE PERMITTED SIMPLY TO RECITE -- IN EFFECT WHAT HE'LL BE DOING IS DESCRIBING WHAT HE LATER WROTE IN HIS NOW, YOU KNOW, WE'VE AGREED, INADMISSIBLE 2016 ARTICLE. IF SHE TOLD YOU THIS, WOULD YOU HAVE WRITTEN THIS? IF SHE TOLD YOU THAT, WOULD YOU HAVE WRITTEN THAT? IT'S NOT RELEVANT. IT'S 403 MATERIAL. AND, OF COURSE, IT'S NOTHING THAT CAN COULD POSSIBLY CROSS-EXAMINE HIM ON. AND IT'S SPECULATIVE. HE'S TESTIFYING NOW WITH THE BENEFIT OF SEVEN YEARS OF HINDSIGHT, SO OF COURSE HE'S GOING TO SAY THAT.
JUDGE DAVILA: RIGHT. BUT IF AT THE TIME, AND I DON'T -- YOU KNOW, I DON'T KNOW WHEN THE INTERVIEW WAS AND ALL OF THAT -- BUT IF AT THE TIME, IF AT THE TIME THE MACHINES WEREN'T RUNNING AS SHE SAID THEY WERE, AND THAT SEEMS TO BE IN EVIDENCE NOW, I THINK. IF IT IS, I THINK YOU CAN TIE THAT IN THE TIME STAMP, THAT THE MACHINES WERE NOT RUNNING, AND I'M JUST USING THIS AS AN EXAMPLE. CAN'T HE ASK THAT THE TIME, TIME STAMP THOSE MACHINES? IF ON THIS DATE SHE HAD TOLD YOU X, THAT THESE MACHINES WERE RUNNING, WOULD YOU HAVE PUT THAT IN?
MR. CLINE: I ABSOLUTELY DO NOT THINK SO, YOUR HONOR. AGAIN, IT'S TOTALLY UNLIKE AN INVESTOR WHO IS MAKING AN INVESTMENT DECISION AND SO MATERIALITY IS IN PLAY. IT DOESN'T MAKE THE SLIGHTEST DIFFERENCE TO WHAT THE JURY HAS TO DECIDE, WHETHER MR. PARLOFF WOULD HAVE WRITTEN WHAT HE WROTE OR WOULD HAVE WRITTEN SOMETHING DIFFERENT IF HE HAD KNOWN CERTAIN FACTS THAT, ALLEGED FACTS THAT HE DIDN'T KNOW. IT'S IRRELEVANT.
JUDGE DAVILA: SO IT'S -- I GUESS IT'S EQUALLY IRRELEVANT THAT IF MR. BOSTIC WERE NOT TO ASK THAT QUESTION, BUT WERE TO ASK, SHE SAID THE MACHINES WERE RUNNING, X AMOUNT OF MACHINES WERE RUNNING X TYPES OF TESTS, WOULD YOU BE SURPRISED TO KNOW THAT ON THE TIME THAT THEY WEREN'T?
MR. CLINE: TOTALLY 100 PERCENT IN MY VIEW IRRELEVANT AND 403 MATERIAL. WHETHER MR. PARLOFF WOULD BE SURPRISED BY SOMETHING? WHO CARES. IT'S JUST NOT RELEVANT TO WHAT THE JURY HAS TO DECIDE.
JUDGE DAVILA: AND YOUR POINT IS THAT THAT EVIDENCE IS ALREADY IN BEFORE THE JURY BECAUSE THE JURY HAS EVIDENCE NOW THAT THE MACHINES WERE EITHER RUNNING OR NOT RUNNING OR WHATEVER.
MR. CLINE: THE JURY HAS PLENTY OF EVIDENCE. THERE WILL NO DOUBT BE MORE BEFORE THE CASE IS OVER. AND IN CLOSING ARGUMENT, THE GOVERNMENT OF COURSE IS PERFECTLY FREE TO GET UP AND LINK THESE FACTS TOGETHER. HERE IS WHAT DR. ROSENDORFF TOLD YOU, HERE IS WHAT MS. HOLMES SAID, HERE IS WHAT SHOWED UP IN THE ARTICLE, AND THEN HERE IS WHAT MS. HOLMES DID WITH THE ARTICLE. BUT THAT'S CLOSING ARGUMENT. AND TO ASK THIS MAN, WOULD YOU BE SURPRISED TO KNOW X? HIS SURPRISE OR LACK OF SURPRISE IS IRRELEVANT. SIMILARLY, HIS NOW IN RETROSPECT VIEW THAT HAD HE KNOWN X, Y, AND Z HE WOULD HAVE WRITTEN SOMETHING DIFFERENT, IT HAS NOTHING TO DO WITH WHAT THE JURY HAS TO DECIDE AND IT'S JUST PREJUDICIAL AND IT IS A WAY OF SMUGGLING INTO THE CASE THE EFFECT, AT LEAST, OF HIS 2016 ARTICLE.
MR. BOSTIC: YOUR HONOR, HERE IS WHY THAT IS RELEVANT. IT'S RELEVANT NOT BECAUSE WE NEED TO SHOW MATERIALITY WITH THIS WITNESS, BUT BECAUSE IT'S HIGHLY PROBATIVE OF MS. HOLMES'S INTENT IN MAKING THE STATEMENTS THAT SHE MADE TO MR. PARLOFF AND IN WITHHOLDING THE INFORMATION THAT SHE WITHHELD FROM HIM. HER INTENT WAS TO END UP AT THE END OF THE DAY WITH THIS ARTICLE. THIS ARTICLE SAYS SEVERAL VERY POSITIVE AND FALSE THINGS ABOUT THE COMPANY. SHE WANTED THIS PRODUCT AT THE END OF THE DAY. IN ORDER TO ACCOMPLISH THAT, SHE HAD HOURS OF CONVERSATIONS WITH MR. PARLOFF WHERE SHE CULTIVATED A FALSE IMPRESSION IN HIS MIND ABOUT WHAT THE TECHNOLOGY COULD DO. WHEN SHE DECIDED NOT TO PROVIDE HIM WITH A CERTAIN FACT, FOR EXAMPLE, THE COMPANY'S RELIANCE ON THIRD PARTY DEVICES, IT WAS TO PRESERVE THE FALSE IMPRESSION THAT SHE HAD OTHERWISE CREATED IN HIS MIND AND TO MAKE SURE THAT, OR AT LEAST TO MAXIMIZE THE CHANCES OF THE ARTICLE CONTAINING THAT SAME POSITIVE SPIN, THAT SAME FALSE EXAGGERATED IMPRESSION OF WHAT THE THERANOS TECHNOLOGY COULD DO. SO THE QUESTION, IF MS. HOLMES HAD TOLD YOU ABOUT THE RELIANCE ON THIRD PARTY DEVICES, WOULD THAT HAVE CHANGED THIS CONTENT IN THE ARTICLE IS RELEVANT BECAUSE IT SHOWS THAT MS. HOLMES'S PLAN WORKED. HER INTENT TO WITHHOLD THAT INFORMATION BECAUSE IT WOULD HAVE JEOPARDIZED THE POSITIVE, HELPFUL PRODUCT THAT SHE WAS ABOUT TO GIVE OUT OF THIS PROCESS, I THINK THERE'S NOTHING WRONG WITH HAVING HIM EXPLAIN THAT.
JUDGE DAVILA: DO YOU NEED THAT, MR. BOSTIC? DO YOU THINK YOU NEED THAT TO TIE ALL OF THAT TOGETHER? I REALIZE -- AND, AGAIN, I'M NOT -- I DON'T EVER WANT TO GET INTO EITHER OF YOUR CASES, YOU PUT YOUR CASE ON, BUT I AM JUST WONDERING, DON'T YOU HAVE THAT SUFFICIENT INFORMATION JUST WITH THE ARTICLE ITSELF THAT YOU CAN MAKE THAT ARGUMENT WITHOUT THE NEED TO PUSH THE MARGIN ON IT?
MR. BOSTIC: MY INTENTION CERTAINLY IS NOT TO PUSH THE MARGIN, YOUR HONOR.
JUDGE DAVILA: IT'S MY WORDS, NOT YOURS, OF COURSE.
MR. BOSTIC: NO, NO. WE'RE HERE FOR THE COURT'S GUIDANCE, SO I'LL ULTIMATELY BE GUIDED BY THE COURT'S THINKING ON THIS. I THINK THAT IS APPROPRIATE. I THINK IT'S NORMAL TO ASK A WITNESS TO TESTIFY ABOUT HIS REACTION TO A CONVERSATION THAT HE WAS HAVING. WE'RE NOT CALLING HIM A VICTIM. THAT WOULD CREATE PROBLEMS.
JUDGE DAVILA: RIGHT.
MR. BOSTIC: WE'RE NOT HAVING HIM OPINE ON THE DEFENDANT'S CREDIBILITY OR TRUTHFULNESS. THAT WOULD CAUSE A PROBLEM. THOSE ARE THE THIRD RAILS THAT WE'RE STAYING FAR AWAY FROM. I THINK THE QUESTIONS THAT WE DO INTEND TO ASK ARE PERMISSIBLE. I UNDERSTAND WHY THE DEFENSE WOULD WANT THIS WITNESS'S ROLE TO BE MORE RESTRICTED AND MECHANICAL, BUT I DON'T THINK THE LAW SUPPORTS THEM ON IT.
JUDGE DAVILA: OKAY.
MR. CLINE: YOUR HONOR, SHALL I MOVE TO ANOTHER TOPIC?
JUDGE DAVILA: YES. SURE.
MR. CLINE: WE PROBABLY HAVE BEATEN THAT ONE PRETTY CLOSE TO DEATH. MR. BOSTIC MENTIONED -- AND THIS IS AN AREA WHERE I THINK WE ACTUALLY MAY AGREE, AMONG OTHERS. I MEAN, WE ACTUALLY HAVE NARROWED THINGS QUITE A BIT. BUT HE, I THINK, PROPOSES TO HAVE MR. PARLOFF TESTIFY TO THINGS LIKE HE WAS GIVEN A TOUR OF THE FACILITIES. I DON'T HAVE ANY CONCERN WITH THAT. HE'S AN EYEWITNESS. HE SAW WHAT HE SAW. HE CAN TESTIFY TO THAT. GOING A TINY BIT FARTHER, THERE ARE TIMES IN THESE, IN THESE TAPES WHERE IT'S CLEAR THAT THEY ARE DISCUSSING SOMETHING ELSE. AND IN PARTICULAR, FOR EXAMPLE, THEY -- I THINK AT ONE POINT THEY GO THROUGH A SLIDE DECK. SO THE TAPE RECORDS THE DISCUSSION, BUT THE DISCUSSION IS ABOUT SLIDES THAT ARE -- THAT THEY'RE BOTH, AS FAR AS I CAN TELL, SITTING THERE LOOKING AT. IT SEEMS TO ME THAT MR. PARLOFF COULD SAY, AS WE WERE HAVING THIS CONVERSATION, WE WERE GOING THROUGH THE SLIDES. IT MAY BE THAT THE GOVERNMENT WILL ACTUALLY HAVE THE SLIDES IN HAND AND PUT THEM UP.
AND HE'LL SAY, YEAH, THAT'S THE SLIDE THAT WE WERE TALKING ABOUT. THAT TYPE OF CONTEXT, WHICH, AGAIN, IS JUST OBJECTIVE FACT, I DON'T HAVE A PROBLEM WITH. SO THINGS THAT HE PERSONALLY WITNESSED, YOU KNOW, HE TOOK A TOUR, HE SAW THIS, HE SAW THAT, AND FACTS LIKE THAT THAT ARE REALLY ESSENTIAL TO UNDERSTAND WHAT THEY'RE TALKING ABOUT, YOU KNOW, IN THE CONTEXT OF THE TAPE, I DON'T HAVE ANY PARTICULAR PROBLEMS WITH THAT. BEYOND THAT, AS I'VE SAID OVER AND OVER AND OVER, WE GET INTO, WE GET INTO TROUBLE. MR. BOSTIC PROPOSES TO ASK MR. PARLOFF WHETHER STATEMENTS THAT MS. HOLMES MADE ON ONE DAY WERE CONSISTENT WITH STATEMENTS SHE MADE ON ANOTHER DAY. AGAIN, I JUST DON'T THINK THAT THAT'S SOMETHING THAT MR. PARLOFF OUGHT TO BE TESTIFYING ABOUT. IT IS A SUBJECTIVE ASSESSMENT ON HIS PART. IT, IT IS FINE FOR THE GOVERNMENT TO PLAY THE RELEVANT, WHAT THEY CONSIDER TO BE THE RELEVANT SECTIONS, OBVIOUSLY SUBJECT TO 106, AND IF THERE ARE INCONSISTENCIES, PRESUMABLY THOSE WILL BE OBVIOUS TO THE JURY, AND IF NECESSARY, THE GOVERNMENT CAN ARGUE THEM IN CLOSING. BUT TO ALLOW MR. PARLOFF TO EDITORIALIZE ON WHETHER ONE STATEMENT WAS CONSISTENT WITH ANOTHER IS JUST AN INVITATION TO START TO GET INTO AREAS THAT WE DON'T NEED TO GET INTO. IT'S UNNECESSARY AND BOUND TO BE PROBLEMATIC.
JUDGE DAVILA: WELL, CAN'T HE SAY -- AND WE TALKED ABOUT THIS PREVIOUSLY -- ON X DAY SHE SAID THIS, AND ON THEN THIS DAY, SHE SAID SOMETHING DIFFERENT? WHY CAN'T HE, WHY CAN'T HE TESTIFY ABOUT THAT TO THE SAME QUESTION?
MR. BOSTIC: WHAT THE GOVERNMENT CAN DO IS PLAY THE RELEVANT PORTIONS, AND ON -- AGAIN, I'M JUST TOTALLY MAKING THIS UP. ON APRIL 7TH THEY HAVE AN INTERVIEW, AND MS. HOLMES SAYS WE CAN RUN A MILLION TESTS, YOU KNOW, FROM A SINGLE DROP OF BLOOD. AND ON JUNE 1ST THEY HAVE AN ANOTHER INTERVIEW, AND HE ASKS, HOW MANY TESTS CAN YOU RUN ON A SINGLE DROP OF BLOOD? AND SHE SAYS 50. WELL, THE GOVERNMENT CAN PUT THOSE STATEMENTS IN. THE INCONSISTENCY WILL BE OBVIOUS. IT'S NOT GOING TO NEED A GLOSS FROM MR. --
JUDGE DAVILA: WELL, NO. ISN'T THE GLOSS, YOU ASKED HER THIS ON THIS DAY. DIDN'T SAY SHE SOMETHING DIFFERENT IN JUNE? YES. WHAT DID SHE SAY IN JUNE?
MR. CLINE: AND WHERE I PART COMPANY A LITTLE BIT WITH THE COURT IS, DID SHE SAY SOMETHING DIFFERENT IN JUNE?
JUDGE DAVILA: BUT SHE DID IN THE HYPOTHETICAL.
MR. CLINE: BUT WHY NOT -- THE CLEANEST WAY TO HANDLE THAT WOULD BE, DID SHE SAY -- DID YOU ASK HER THIS QUESTION? YES, I DID. I'M GOING TO PLAY YOU WHAT SHE SAID ON APRIL 7TH. HE PLAYS IT. DID YOU ASK THE QUESTION AGAIN? YES. I'M GOING TO PLAY YOU WHAT SHE SAID. HERE IT IS. THE --
JUDGE DAVILA: AND THEN THE QUESTION IS, WAS THE SECOND QUESTION AND ANSWER DIFFERENT THAN THE SECOND TIME? IT'S THE SAME THING. IT'S SEMANTICS. I UNDERSTAND THE DELIVERY MIGHT BE A LITTLE DIFFERENT, BUT THOSE TYPES OF QUESTIONS I DON'T HAVE A PROBLEM WITH. DID SHE SAY SOMETHING DIFFERENT? WELL, YES AND NO. AND THEN YOU PLAY THE TAPE. IS THAT WHAT SHE SAID?
MR. CLINE: WHERE WE'RE GOING TO GET INTO DIFFICULTY IS -- THE EXAMPLE I GAVE, THE DIFFERENCE WAS OBVIOUS. IT MAKES NO DIFFERENCE WHETHER HE SAYS THE ANSWERS WERE DIFFERENT. THEY WERE OBVIOUSLY DIFFERENT. THERE WILL BE MUCH MORE SUBTLE EXAMPLES WHERE WHETHER WHAT SHE SAID WAS INCONSISTENT IS VERY MUCH IN DOUBT. AND ALLOWING HIM TO PUT HIS GLOSS ON IT IS GOING TO TROUBLESOME.
JUDGE DAVILA: SURE. I UNDERSTAND THOSE WHERE YOU GET TO, WELL, IT MIGHT BE -- YOU KNOW, IT MIGHT BE A SHADE OF A COLOR OR SOMETHING LIKE THAT. BUT IF IT'S A STATEMENT THAT IS COMPLETELY DIFFERENT, THEN THE QUESTION, DOESN'T IT HAVE TO BE, DID SHE SAY DIFFERENT? THE QUESTION COULD BE, WAS SHE CONSISTENT IN HER RESPONSE IN THE SECOND QUESTION? YES, NO. YOU KNOW, WE'RE GOING TO HAVE A -- I DON'T WANT TO EDIT THE WHOLE TESTIMONY, AND I DON'T THINK WE HAVE TO. I THINK THERE'S SOME OF THESE QUESTIONS I UNDERSTAND AND IT'S GOOD THAT WE'RE HAVING THE CONVERSATION. IT GIVES ME A HEADS UP ON IT.
MR. CLINE: AND IT MAY BE ON ITEMS LIKE THAT, YOUR HONOR, WE MAY HAVE TO OBJECT SORT OF ON THE FLY.
JUDGE DAVILA: RIGHT.
MR. CLINE: BECAUSE THERE WILL BE GRADATIONS.
JUDGE DAVILA: RIGHT.
MR. CLINE: BUT I DEFINITELY WANT TO FLAG THE ISSUE AND LET YOU KNOW MY CONCERN ABOUT IT.
JUDGE DAVILA: NO. I APPRECIATE THAT.
MR. CLINE: ON THAT TYPE OF QUESTION, IF I COULD JUST BRIEFLY?
JUDGE DAVILA: YES, PLEASE.
MR. CLINE: SO I THINK THIS IS THE THEME. IF THE DEFENSE COULD RESTRICT THIS WITNESS'S ROLE TO SIMPLY AUTHENTICATING THE RECORDINGS AND THEN LEAVING THE STAND, THAT WOULD BE A GREAT OUTCOME FOR THEM. THE LAW DOESN'T REQUIRE SO NARROW A ROLE FOR HIM. HE'S ALLOWED TO TESTIFY ABOUT THE SUBSTANCE OF CONVERSATIONS THAT HE HAD AND THE CONTENT OF THOSE COMMUNICATIONS REGARDLESS OF WHETHER THE AUDIO IS BEING PLAYED. WHAT I HEARD MR. CLINE SAY IS THAT IF THERE'S AUDIO OF A CONVERSATION, THE GOVERNMENT NEEDS TO DEFAULT TO THE AUDIO AND CAN'T RELY ON THE WITNESS TO TALK ABOUT THE CONTENT. BUT THAT'S NOT TRUE. UNDER RULE 102, THE REQUIREMENT OF THE ORIGINAL, IT'S ONLY IF WE WERE TRYING TO PROVE THE CONTENT OF THE RECORDING THROUGH A WITNESS'S TESTIMONY THAT WE WOULD RUN INTO PROBLEMS WITH THAT RULE. DESPITE THE EXISTENCE OF A RECORDING, THE WITNESS CAN TESTIFY ABOUT THE SUBSTANCE OF THE CONVERSATION WITHOUT INTRODUCING A SPECIFIC RECORDING. IN SOME OF THESE INSTANCES, BY THE WAY, MAYBE MOST OF THEM, THE EXPECTED ANSWER WOULD BE, YOU KNOW, TO THE QUESTION, DID MS. HOLMES ADDRESS THIS TOPIC ON OTHER OCCASIONS? YES, AND SHE SAID SOMETHING SIMILAR. AND THE POINT THERE IS TO SHOW THAT THIS WAS A RECURRING TOPIC IN THEIR CONVERSATION.
JUDGE DAVILA: SURE.
MR. BOSTIC: AND THE FACT THAT MS. HOLMES SAID CONSISTENTLY MISLEADING THINGS OVER TIME IS RELEVANT TO HER ABSENCE OF MISTAKE, SO THAT'S WHY IT'S IMPORTANT FOR THE JURY TO UNDERSTAND THAT. THE GOVERNMENT SHOULD NOT HAVE TO PLAY FIVE CLIPS IN ORDER TO ACCOMPLISH THAT. THAT'S JUST A WASTE OF TIME AND THE RULES DON'T REQUIRE IT. AND JUST ON THE COMMENTS THAT HAVE BEEN MADE ABOUT MR. PARLOFF'S BIAS, I SHOULD SAY THAT I DON'T WANT THE COURT TO BE IMAGINING THIS WITNESS AS SOMEONE WHO HAS A BONE TO PICK WITH THE DEFENDANT AND WHO IS GOING TO TAKE EVERY OPPORTUNITY TO SAY SOMETHING PEJORATIVE AS MR. CLINE FEARS. THAT'S NOT WHAT I EXPECT FROM THIS WITNESS. I THINK THE REPORTS THAT HAVE BEEN PROVIDED TO THE DEFENSE SHOW THAT, IF ANYTHING, THIS WITNESS, FOR A TIME, WISHED THAT HE HAD ASKED BETTER QUESTIONS OF THE DEFENDANT AND THAT HE HAD DONE MORE TO ASK DIRECT QUESTIONS GETTING AT THE TRUTH OF WHAT WAS HAPPENING, AND FOR A TIME HE BLAMED HIMSELF. I DON'T THINK HE DOES ANY LONGER, AND I THINK THE RECORDINGS SHOW THAT HE DID, IN FACT, ASK THE DIRECT QUESTIONS THAT HE SHOULD HAVE. BUT I DON'T EXPECT THIS WITNESS TO BE LOOKING FOR AN OPPORTUNITY TO CRITICIZE OR SAY BAD THINGS ABOUT THE DEFENDANT. SO TO THE EXTENT THAT THAT'S THE DEFENSE'S CONCERN OR THE COURT'S, I THINK IT'S OVERBLOWN.
JUDGE DAVILA: OKAY. THANK YOU.
MR. CLINE: I THINK WE HAVE COVERED THE TOPICS THAT MR. BOSTIC WENT OVER, AND I THINK THE COURT UNDERSTANDS OUR CONCERN AND SORT OF THE FRAMEWORK THAT WE'RE OPERATING IN. THE OTHER ISSUE OUT THERE, OF COURSE, IS THE SUBPOENA, WHICH IS, I THINK, PRINCIPALLY WHY MR. KORZENIK IS ON THE LINE. I GUESS WHAT I WOULD SUGGEST ON THAT IS THAT WE WAIT FOR THE COURT'S RULING ON THE MOTION IN LIMINE, AND IT MAY BE THAT THE SUBPOENA ISSUE WILL LARGELY VANISH, AND THAT WOULD BE BECAUSE THE RELEVANCE OF THESE OTHER STATEMENTS BECOME SO ATTENUATED THAT YOUR HONOR CONCLUDES, AND I MIGHT EVEN CONCLUDE, THAT THE GAME IS NOT WORTH THE CANDLE AND IT'S PARTICULARLY BECAUSE MR. PARLOFF OBVIOUSLY FEELS VERY STRONGLY ABOUT THE PRIVILEGE ISSUE. SO RATHER THAN REPEAT ALL OF THE ARGUMENTS WE'VE JUST BEEN MAKING ABOUT THE SUBPOENA, WHAT I WOULD SUGGEST IS THAT WE AWAIT THE COURT'S RULING ON THE MOTION IN LIMINE AND THEN SEE IF THERE'S STILL ANYTHING TO DISCUSS ON THE SUBPOENA. THERE MAY BE, THERE MAY NOT BE. BUT IT WILL CERTAINLY INFORM OUR DISCUSSION ON THAT.
JUDGE DAVILA: THANK YOU FOR THAT. THE ONE THING, AND I TAKE IT FROM BOTH OF YOU, IS THAT NEITHER SIDE WANTS TO GET TO ANY THIRD PARTY CONVERSATIONS SUCH THAT WE DEAL WITH THE SUBPOENA AND ALL OF THOSE OTHER ISSUES, AND LET ME JOIN THAT CAMP AS WELL. I DON'T THINK IT'S NECESSARY.
MR. CLINE: WE WOULD ABSOLUTELY PREFER NOT TO. BUT, AGAIN, IT'S GOING TO DEPEND ON THE SCOPE OF THE DIRECT. I MEAN --
JUDGE DAVILA: NO. I UNDERSTAND THAT. IT'S A LOOMING ISSUE THAT LOOMS OVER ALL OF US --
MR. CLINE: YES.
JUDGE DAVILA: -- IN THAT REGARD, BUT I'M GLAD WE'RE ALL OF COMMON PURPOSE HERE TO AVOID IT.
MR. CLINE: YES.
JUDGE DAVILA: AND I WOULD ENCOURAGE BOTH SIDES TO DO THAT SUCH THAT WE DON'T IMPLICATE THAT AND CREATE ANOTHER OPPORTUNITY TO TAKE TIME AWAY ON AN IMPORTANT ISSUE, BUT TAKE TIME AWAY FROM THE EVIDENCE THAT IS BEING PUT BEFORE THE JURY. WE'RE GETTING CLOSE TO THE HOLIDAY SEASON HERE AND I KNOW THESE JURORS ARE PROBABLY GETTING A LITTLE ANXIOUS ABOUT SCHEDULING, AND I'M ANXIOUS ABOUT SCHEDULING AS WELL. I'M CONCERNED ABOUT OUR SHORT WEEK TODAY AND HOW MUCH TIME WE'RE GOING TO TAKE IN TOMORROW MORNING'S CONVERSATION ABOUT WHAT THAT ENTAILS. SO LET ME STATE THAT -- LET ME JUST INDICATE -- ANYTHING FURTHER BEFORE WE --
MR. BOSTIC: NO, YOUR HONOR, UNLESS THE COURT HAS ANY QUESTIONS.
MR. CLINE: NO, YOUR HONOR.
JUDGE DAVILA: I DON'T HAVE ANY REAL QUESTIONS. YOU'VE BEEN HELPFUL IN ANSWERING THE QUESTIONS THAT I PUT TO YOU TODAY. I WAS CONCERNED ABOUT THE DEFINITION OF WHAT CONTEXT MEANT AND WHERE THAT WAS GOING TO GO. I THINK WE TALKED ABOUT CONNECTING THE STATEMENTS AND THOSE TYPES OF THINGS, AS WELL AS THE WITNESS'S UNDERSTANDING OF HER STATEMENTS. I THINK I UNDERSTAND, MR. CLINE, YOUR POSITION. AND, MR. BOSTIC, I DO HAVE -- I THINK I RAISED THESE LAST WEEK -- I DO HAVE SOME CONCERNS ABOUT THE CONTEXT AND WHERE DOES THAT GO? WHAT DOES THAT MEAN? I'M GOING TO -- I DO THINK THAT SOME OF THE QUESTIONS, THAT IF YOU ASK THEM IN THE WAY THAT YOU SUGGESTED IN A WHOLESALE WAY MIGHT BE OBJECTIONABLE UNDER 403 AND OTHERWISE. IF SHE TOLD YOU X, WOULD YOU HAVE WRITTEN Y? NOW, THERE'S A WAY TO GET THAT INFORMATION IN, I THINK, OR TO PROBE THAT AREA. BUT IT MAY CALL FOR SPECULATION IN THAT SPECULATING IF SHE HAD SAID SOMETHING, AND THEN SPECULATING, WOULD HE HAVE WRITTEN IT?
WE'VE TALKED A LITTLE BIT ABOUT THE PARAMETERS OF THAT. IF HE KNEW INFORMATION -- AND AGAIN, THE TIME STAMP AREA THAT I'M PAUSING BECAUSE I DON'T WANT TO GET INTO WHAT HE WROTE SUBSEQUENTLY AND SO WE'RE GOING TO HAVE TO AVOID THAT. I DO THINK THAT THE WITNESS COULD TESTIFY ABOUT HIS OBSERVATIONS OF HER, AND I USE THE WORD "DEMEANOR," BUT HE CAN SAY, WAS IT A FRIENDLY CONVERSATION? WAS SHE COOPERATIVE? DID SHE ANSWER? DID SHE SEEM TO BE EAGER TO GIVE YOU INFORMATION? IS THAT REPRESENTED IN THE FACT THAT YOU GOT A TOUR? AND HOW DID THE TOUR GO? THOSE TYPE OF BACKGROUND THAT WOULD FRAME THE CONTEXT, I'LL USE THAT WORD, OF THE RELATIONSHIP DURING THE INTERVIEW, I THINK THAT'S FAIR GAME. I THINK HE -- AND THEN I THINK THIS WITNESS CAN TESTIFY ABOUT THAT. WAS SHE, YOU KNOW, WAS SHE VOLUNTARILY GIVING YOU INFORMATION? DID SHE PROVIDE IT? WAS SHE HESITANT? WAS SHE RETICENT ABOUT ANYTHING? I THINK THAT'S FAIR GAME AND HE CAN OFFER HIS OPINIONS ABOUT THAT. HE'S A JOURNALIST, AND I THINK PART OF HIS EXPERIENCE IS -- YOU KNOW, HE'S LOOKING AT THE SUBJECT MUCH LIKE AN ARTIST LOOKS AT A MODEL WHEN SHE PAINTS. I THINK IT'S THE SAME TYPE OF THING. MR. CLINE, YOU WANTED TO COMMENT?
MR. CLINE: I WAS JUST GOING TO SAY, I SUSPECT THAT WE ARE ALL LARGELY IN AGREEMENT ON THAT TOPIC, AND IT'S PROBABLY AN AREA WHERE QUESTION-BY-QUESTION OBJECTIONS WILL BE NECESSARY.
JUDGE DAVILA: RIGHT, I THINK SO. BUT IN GENERAL, I THINK -- I JUST WANT TO LET YOU KNOW, IN GENERAL, I THINK HE CAN TESTIFY ABOUT THAT. AND YOU'RE GOING TO STAY AWAY FROM -- AS YOUR PLEADINGS SUGGEST, HE'S NOT GOING TO BE ASKED, DID YOU FEEL SHE WAS LYING? GIVE US YOUR OPINION OF HER VERACITY, ANYTHING OF THOSE THINGS. AS YOU'VE SAID, MR. BOSTIC, THOSE ARE NOT RELEVANT FOR HIS TESTIMONY. HIS UNDERSTANDING OF HER STATEMENTS, HE MAY BE ABLE TO TESTIFY ABOUT THAT. HE MIGHT BE ABLE TO, DEPENDING ON THE QUESTIONS. HE CAN'T SAY, WELL, DO YOU THINK SHE MEANT X? I'M NOT GOING TO ALLOW THAT TYPE OF QUESTION. BUT SHE ANSWERED IN THIS WAY, OR WHEN SHE SAID THIS, IS THAT WHAT FORMED YOUR OPINION SUCH THAT IT APPEARED IN YOUR ARTICLE? THOSE TYPES OF QUESTIONS, I THINK, ARE -- AGAIN, WE MAY HAVE TO GO QUESTION BY QUESTION ON THIS, BUT I JUST WANTED TO INFORM YOU ABOUT MY THINKING ABOUT THAT.
I THINK HE CAN TESTIFY IN A LIMITED DEGREE ABOUT HER RESPONSES, HIS UNDERSTANDING SUCH THAT IT FORMED THE BASIS FOR HIS ARTICLE. NOW, GOING FURTHER LIKE YOU TALKED ABOUT, MR. CLINE, I AGREE WITH YOU, I DON'T THINK HE CAN WHOLESALE GO FORWARD AND SAY, WELL, I THINK SHE MEANT THIS AND THAT'S WHY I WROTE Y, AS OPPOSED TO, SHE TOLD ME THIS AND THIS IS WHAT I WROTE. AND MAYBE THERE'S NOT A GREAT DISTINCTION BETWEEN THOSE TWO THINGS, BUT IT DEPENDS, AGAIN, ON THE QUESTION AND THE ANSWER. BUT I DO THINK THAT HE'S -- THERE'S SOME -- HE'S A JOURNALIST. HE INTERVIEWED. I'M SURE MR. BOSTIC WILL BE INFORMED ABOUT HIS BACKGROUND AS A JOURNALIST, HOW MANY ARTICLES HE'S WRITTEN, HIS EXPERIENCE, ET CETERA. AND HE MAY EVEN PROBE AS TO, WHAT DO YOU NORMALLY DO WHEN YOU DO AN INTERVIEW LIKE THIS? WHAT IS IMPORTANT TO WRITING A STORY? HE'LL TALK ABOUT JOURNALISTIC INTEGRITY PERHAPS. HE'LL TALK ABOUT PERHAPS -- WE KNOW THAT THERE ARE JOURNALISTS, A STANDARD OF ETHICS THAT JOURNALISTS HAVE TO FOLLOW.
I DON'T KNOW. BUT ALL OF THOSE QUESTIONS, I KNOW THEY EXIST, BUT I DON'T KNOW IF HE REFERENCED THEM FOR THIS, BUT -- SO THOSE ARE, I THINK, QUESTIONS THAT ARE OPEN TO INQUIRY. BUT DRILLING DOWN ON TO SOME OF THESE OTHERS, MR. BOSTIC, I THINK I DO STILL HAVE SOME CONCERNS ABOUT GOING TOO FAR WITH THE CONTEXT AS IT'S CALLED AND THESE OTHER QUESTIONS ABOUT SPECULATION. I'M TELLING YOU THIS TO PERHAPS ASK YOU TO FRAME THOSE QUESTIONS AND GIVE SOME THOUGHT TO THOSE QUESTIONS IN A WAY THAT WOULD AVOID THAT. BECAUSE, MR. CLINE, YOU KNOW, YOU OBVIOUSLY WILL BRING TO MY ATTENTION ANY OBJECTION THAT YOU THINK MIGHT EXIST.
MR. CLINE: I WILL CERTAINLY DO THAT. AGAIN, FOR THE MOMENT I THINK WE'RE PUTTING THE SUBPOENA ASIDE.
JUDGE DAVILA: YES, I THINK SO.
MR. CLINE: AND I'M CONTENT TO DO THAT.
JUDGE DAVILA: I, I --
MR. CLINE: WITH THE UNDERSTANDING THAT IF THE TESTIMONY STRAYS, I MAY ASK AT A BREAK IF WE CAN ENFORCE IT.
JUDGE DAVILA: SURE.
MR. CLINE: I WANT TO EMPHASIZE, I HOPE THAT WE DON'T GET TO THAT POINT.
JUDGE DAVILA: WELL, I'D LIKE TO KEEP THE HERD ON THE PATH AND NOT HAVE ANY STRAYS HERE.
MR. CLINE: YES.
JUDGE DAVILA: SO WE'RE IN COMMON PURPOSE FOR THAT. SURE.
MR. CLINE: BUT I THINK BECAUSE MR. BOSTIC CONTROLS THE DIRECT HERE, I THINK IT'S GOING TO BE LARGELY UP TO HIM.
JUDGE DAVILA: RIGHT.
MR. CLINE: AND FROM TALKING WITH HIM, I THINK WE HAVE A PRETTY GOOD UNDERSTANDING OF EACH OTHER'S POSITION.
JUDGE DAVILA: RIGHT.
MR. BOSTIC: I AGREE, YOUR HONOR. THE COURT'S COMMENTS HAVE BEEN HELPFUL. THE GOVERNMENT WILL DO ITS BEST TO CRAFT ITS QUESTIONS TO ADHERE TO THE GUIDANCE FROM THE COURT.
JUDGE DAVILA: AND, YOU KNOW, NEITHER PARTY SHOULD FEEL SHY ABOUT RAISING OBJECTIONS, AND THEY MIGHT BE 403 OR OTHER, BUT LET ME SAY I'M COGNIZANT OF THE 403 ISSUE THAT OVERLAPS ALL OF THIS POTENTIAL TESTIMONY.
MR. CLINE: YES.
JUDGE DAVILA: AND, MR. CLINE, I KNOW YOU'RE GOING TO AVOID GETTING INTO THE SECOND ARTICLE BECAUSE WE DON'T WANT TO OPEN THAT DOOR.
MR. CLINE: WE DO NOT.
JUDGE DAVILA: AND LET'S SEE. WHO WAS ON THE LINE AGAIN? IS THAT --
MR. KORZENIK: YES, DAVID KORZENIK.
JUDGE DAVILA: YES. I HOPE THIS CONVERSATION HAS BEEN OF HELPFUL TO YOU. WHAT I'M GOING TO DO IS I'M NOT GOING TO DISTURB JUDGE COUSINS'S RULING AT THIS TIME, AND WE'LL KEEP THE OBJECTIONS BEFORE THIS COURT UNDER SUBMISSION PENDING THE TESTIMONY OF THIS WITNESS AND WHETHER OR NOT WE NEED TO REVISIT YOUR MOTION AND WHETHER OR NOT THE COURT HAS TO RULE ON THE OBJECTIONS WILL BE DEPENDENT ON THE TESTIMONY OF MR. PARLOFF. BUT I THINK THAT OUR CONVERSATION THIS MORNING ABOUT THE PARAMETERS OF HIS CONVERSATION CERTAINLY HELP ME TO INFORM ME AS TO WHAT WE CAN EXPECT. AND I HOPE IT'S INFORMED YOU AS TO HOW YOUR DIRECT AND CROSS SHOULD BE CONDUCTED.
MR. KORZENIK: YES, YOUR HONOR. I'LL JUST MAKE THIS BRIEF COMMENT. I THINK IT LOOKS TO ME AS IF THE PARTIES HAVE KIND OF SOME SENSE OF THE BOUNDARIES AND WHAT THEY NEED TO DO. AND I'M NOT GOING TO WEIGH IN ON RELEVANCE, THAT'S NOT MY BUSINESS. BUT I DO UNDERSTAND, TOO, WHY THE -- BUT I'M SYMPATHETIC, I WILL SAY, WHY MR. CLINE WOULD LIKE TO KEEP THE RULE 17 AND REPORTER'S PRIVILEGE ISSUE THE ON THE GRIDDLE. BUT I WOULD JUST REMIND THE COURT THAT MAGISTRATE JUDGE COUSINS'S RULING WAS ONE THAT HE DESCRIBED AS "NOT CLOSE," THAT HE SAID THAT THEY HAD NOT ESTABLISHED THE RELEVANCE, THE ADMISSIBILITY, MATERIALITY, NEED OR SPECIFICITY FOR WHAT THEY ARE SEEKING, AND HE SAID THIS WAS REALLY MORE GUESSING, A FISHING EXPEDITION. AND I MUST SAY THAT I THINK WHAT MR. CLINE HAS BEEN BUILDING HIS ARGUMENTS ON BEFORE MAGISTRATE JUDGE COUSINS, AND EVEN TODAY AS WELL, IS LARGELY SPECULATION AND FANTASY ABOUT WHAT THOSE OTHER WITNESSES MIGHT HAVE SAID WHEN THOSE WITNESSES HAVE ALL BEEN AT HIS COMMAND BY SUBPOENA, WHEN MOST OF THEM HAVE BEEN WITNESSES IN THE TRIAL AND WILL BE. AND SO THAT THERE IS STILL, WHATEVER HE MIGHT IMAGINE, MIGHT BE THERE, HE SHOULD BE CAREFUL BECAUSE IT'S MORE LIKELY TO BE HARMFUL TO HIM. WE DID NOT GIVE THESE THINGS, OTHER INTERVIEWS TO ANYONE. WE WANTED TO PRESERVE OUR PRIVILEGE AND OUR COMMITMENTS OF CONFIDENTIALITY TO AT LEAST FIVE OF THEM. BUT A LOT OF WHAT I'M HEARING FROM MR. CLINE IS BASED LARGELY ON HIGHLY SPECULATIVE IMAGININGS OF WHAT THIS MATERIAL MIGHT INCLUDE, AND I WOULD SAY THAT IF HE BREAKS OUR PRIVILEGE, HE MAY HURT HIMSELF MORE THAN THIS PROSECUTOR.
MR. CLINE: MR. KORZENIK HAS BEEN KIND ENOUGH TO WARN ME OF THAT POSSIBILITY EVER SINCE WE'VE BEEN TALKING, AND I'M PROCEEDING WITH FULL AWARENESS.
JUDGE DAVILA: ALL RIGHT. THANK YOU, COUNSEL. I APPRECIATE THAT.
MR. KORZENIK: THE MAIN POINT THAT I MAKE IS THAT THIS WAS NOT A CLOSE CALL ON THE ISSUE OF RULE 17, AND SINCE THE FACTORS OF RULE 17 OVERLAP SUBSTANTIALLY WITH THE FACTORS TO BE CONSIDERED ON THE REPORTER'S PRIVILEGE, I DON'T SEE IT AS BEING A CLOSE CALL HERE.
JUDGE DAVILA: WELL, IT, IT -- I APPRECIATE THAT OBSERVATION. AND, OF COURSE, I RESPECT JUDGE COUSINS AND HIS OBSERVATION. OF COURSE, THE PLAYING FIELD MAY CHANGE DEPENDENT ON WHAT TESTIMONIAL EVIDENCE COMES IN THAT MIGHT HAVE SOME RELATIONSHIP WITH JUDGE COUSIN'S ORDER AND THE SUBPOENA, THAT COULD CHANGE. SO, AGAIN, JUDGE COUSINS WAS -- HIS WISDOM IS TIME STAMPED WITH THE MOTION AND THE TIME AND THE FACTS THAT IT PRESENTED TO HIM. I'M NOT CERTAIN THAT THINGS WILL CHANGE. I THINK OUR CONVERSATION THIS MORNING, WITH ALL COUNSEL, HAS INFORMED US ALL THAT WE HOPE THINGS DON'T CHANGE, AND THAT THE MATERIAL THAT THE GOVERNMENT SEEKS TO INTRODUCE IN ITS CASE-IN-CHIEF CAN BE ACHIEVED, AND THAT EVIDENCE CAN BE ACHIEVED WITHOUT VIOLATION OF ANY OF THE SPIRIT OF JUDGE COUSINS'S ORDER. AND I THINK MR. CLINE RESPECTS THAT, TOO. HE'S BEEN WARNED BY YOU NOW, AND MAYBE WARNING IS TOO HARSH A WORD, BUT YOU'VE INFORMED HIM A COUPLE OF TIMES OF WHAT IS IN THE PANDORA'S BOX AND I THINK HE WANTS TO STAY AWAY FROM IT. SO FAIR ENOUGH. ALL RIGHT.
MR. BOSTIC: YOUR HONOR, JUST TO MAKE CERTAIN THAT I UNDERSTAND WHERE THE LINE IS THERE, AND MR. CLINE AND I MAY DISAGREE. BUT, FOR EXAMPLE, IF THE GOVERNMENT ASKS A QUESTION, YOU KNOW, MS. HOLMES TOLD YOU X ON THIS DATE, I'LL DIRECT YOUR ATTENTION TO THIS LINE IN THE ARTICLE, IS THAT CONSISTENT WITH WHAT MS. HOLMES TOLD YOU ON THAT DATE AND AT OTHER TIMES DURING THE CONVERSATION? MY POSITION WOULD BE THAT THAT'S IN LINE WITH THE COURT'S GUIDANCE TODAY. I ALSO WOULD NOT THINK THAT THAT WOULD OPEN THE DOOR TO TESTIMONY OR ADDITIONAL DISCOVERY ABOUT THIRD PARTY STATEMENTS, BUT I JUST WANT TO MAKE SURE THAT I'M UNDERSTANDING.
JUDGE DAVILA: CONCEPTUALLY, I DON'T HAVE A PROBLEM WITH THAT PHRASING AND THAT QUESTION. I THINK THAT'S ENTIRELY APPROPRIATE.
MR. CLINE: PHRASED EXACTLY THAT WAY, IT MAY AVOID THE PROBLEMS THAT WE'RE TALKING ABOUT, BUT I'M JUST TELLING MOSTLY MR. BOSTIC TO REALLY BE CAREFUL BECAUSE IT DOESN'T TAKE MUCH OF A TWEAK TO THAT QUESTION AND WE'RE RIGHT INTO THE PROBLEM THAT WE'RE ALL TRYING TO AVOID.
JUDGE DAVILA: AND I THINK -- I APPRECIATE THAT, MR. CLINE. AND I THINK YOU WANT TO AVOID TWEAKS. AND YOU'RE IN CONTROL OF THE TWEAKING, AND SO THE QUESTIONS THAT YOU ASK, I KNOW WE TALKED ABOUT THIS LAST WEEK, YOU DON'T WANT TO INTENTIONALLY GO SOMEWHERE AND OPEN A DOOR.
MR. CLINE: YOU WILL FIND ME ON CROSS CAREFULLY TIPTOEING.
JUDGE DAVILA: ALL RIGHT. GOOD. THANKS. GOOD SEEING YOU. AND TOMORROW WE'RE GETTING TOGETHER AT 8:00 O'CLOCK TOMORROW, ARE WE?
MR. DOWNEY: YES, YOUR HONOR.
JUDGE DAVILA: ALL RIGHT. THANK YOU.
MR. KORZENIK: THANK YOU VERY MUCH, YOUR HONOR.
JUDGE DAVILA: YOU'RE WELCOME. THANK YOU. WE'LL DISENGAGE THE LINE NOW.
MR. KORZENIK: OKAY.
(COURT ADJOURNED AT 11:40 A.M.)