Roger Parloff — Direct/Cross
1,433 linesDIRECT EXAMINATION BY MR. BOSTIC:
MR. BOSTIC: GOOD MORNING, MR. PARLOFF.
ROGER PARLOFF: GOOD MORNING.
MR. BOSTIC: IF YOU ARE VACCINATED AND COMFORTABLE TESTIFYING WITHOUT A MASK, THE COURT WILL ALLOW YOU TO DO SO.
ROGER PARLOFF: OKAY.
MR. BOSTIC: MR. PARLOFF, WHAT IS YOUR OCCUPATION?
ROGER PARLOFF: I'M A JOURNALIST, REPORTER.
MR. BOSTIC: AND CAN YOU GIVE US A BRIEF OVERVIEW OF YOUR EDUCATION, PLEASE.
ROGER PARLOFF: I GRADUATED FROM HARVARD IN '77 AND FROM YALE LAW SCHOOL IN '82.
MR. BOSTIC: AND DID YOU EVER PRACTICE AS A LAWYER DURING YOUR CAREER?
ROGER PARLOFF: YEAH, ABOUT FIVE YEARS.
MR. BOSTIC: GIVE US A BRIEF SUMMARY OF YOUR CAREER AS A JOURNALIST, PLEASE.
ROGER PARLOFF: IN 1988 I BECAME A FULL-TIME JOURNALIST. I WORKED WITH THE AMERICAN LAWYER PUBLICATION FOR -- OR COMPANY FOR ABOUT 12 YEARS. I WROTE A BOOK WHILE I WAS THERE, WHICH WAS PUBLISHED BY LITTLE BROWN, ABOUT A DEATH PENALTY CASE. I SWITCHED PUBLICATIONS IN 2000, AND THAT PUBLICATION FOLDED, AND THEN I FREELANCED FOR A COUPLE OF YEARS. AND IN 2004 I WENT ON STAFF AT "FORTUNE" AS BASICALLY THEIR MAIN LEGAL CORRESPONDENT. AND THEN I WAS THERE FOR ANOTHER 12 YEARS THROUGH THE END OF 2016. SINCE THEN I'VE BEEN FREELANCING MAINLY FOR A PUBLICATION CALLED "YAHOO FINANCE," BUT ALSO I HAVE PUBLISHED IN OTHER PLACES LIKE "PROPUBLICA" AND "NEW YORK TIMES" AND THE ONLINE VERSIONS OF "THE NEW YORKER" AND "NEW YORK" AND A PUBLICATION CALLED "AIR MAIL." RECENTLY I TOOK A CONTRACT POSITION WITH -- I'M A SENIOR EDITOR AT A PUBLICATION CALLED "LAWFARE," L-A-W-F-A-R-E.
MR. BOSTIC: YOU MENTIONED THAT YOU WORKED FOR "FORTUNE" MAGAZINE IN 2014; IS THAT CORRECT?
ROGER PARLOFF: THAT'S RIGHT.
MR. BOSTIC: AND FOR A NUMBER OF YEARS BEFORE AND AFTER 2014?
ROGER PARLOFF: YEAH.
MR. BOSTIC: IN CONNECTION WITH YOUR EMPLOYMENT AT "FORTUNE," DID YOU HAVE OCCASION TO WRITE AN ARTICLE ABOUT DEFENDANT ELIZABETH HOLMES AND HER COMPANY THERANOS?
ROGER PARLOFF: YES.
MR. BOSTIC: WHAT KIND OF ARTICLE WAS THAT? WAS IT A PROFILE? WAS IT INVESTIGATIVE REPORTING? HOW WOULD YOU CHARACTERIZE IT?
ROGER PARLOFF: IT WAS A PROFILE OF BOTH HER AND HER COMPANY.
MR. BOSTIC: WHEN YOU WOULD WRITE PROFILES IN CONNECTION WITH YOUR JOB AT "FORTUNE," WOULD YOU STRIVE TO MAKE SURE THE ARTICLE THAT YOU CREATED ACCURATELY REFLECTED THE INFORMATION THAT YOU RECEIVED FROM YOUR SUBJECTS?
ROGER PARLOFF: YES.
MR. BOSTIC: HOW DO YOU ACCOMPLISH THAT? CAN YOU TELL US ABOUT YOUR APPROACH TO THAT KIND OF ARTICLE?
ROGER PARLOFF: WELL, WITH A PROFILE I TRIED TO GET AS MUCH TIME WITH THE SUBJECT AS POSSIBLE. I LIKE TO TAPE AS MUCH AS POSSIBLE, AND I ALSO LIKE TO SPEAK TO PEOPLE WHO KNOW THE SUBJECT WELL, KNOW THE PERSON WELL, AND GET THE BIG CHUNK OF TIME WITH THE PERSON TO DESCRIBE THEIR BIOGRAPHY AND HOW THEY GOT INTO WHAT THEY'RE DOING AND SO ON.
MR. BOSTIC: YOU MENTIONED TAPING. IS IT PART OF YOUR NORMAL PRACTICE TO RECORD SOME INTERVIEWS WITH SUBJECTS THAT YOU'RE PROFILING?
ROGER PARLOFF: YES.
MR. BOSTIC: WHEN YOU DO THAT, DO YOU GET THEIR CONSENT TO RECORD?
ROGER PARLOFF: YES.
MR. BOSTIC: HOW ABOUT FOR CONVERSATIONS YOU HAVE WITH THEM THAT AREN'T AUDIO RECORDED? HOW DO YOU KEEP TRACK OF THOSE?
ROGER PARLOFF: I TAKE NOTES. I USUALLY TAKE THEM IN A SPIRAL NOTEBOOK, AND I USE SOMETHING CALLED SPEED WRITING, WHICH IS A VERY SIMPLE FORM OF SHORTHAND. AND THEN -- WELL --
MR. BOSTIC: I DIDN'T MEAN TO INTERRUPT.
ROGER PARLOFF: AND THEN IF IT'S AN ARTICLE FOR THE WEB AND IT'S GOING TO GO UP QUICKLY, THAT MIGHT BE ALL I DO. IF IT'S GOING TO BE A FEATURE ARTICLE OR SOMETHING WHERE TIME IS GOING TO ELAPSE, I WOULD TRANSCRIBE THE NOTES FROM THE SPIRAL NOTEBOOK INTO A COMPUTER FILE.
MR. BOSTIC: IN CONNECTION WITH THE ARTICLE THAT YOU WROTE ABOUT MS. HOLMES AND THERANOS, DID YOU HAVE OCCASION TO INTERVIEW MS. HOLMES?
ROGER PARLOFF: YES.
MR. BOSTIC: DID YOU SPEAK TO HER ON A NUMBER OF OCCASIONS?
ROGER PARLOFF: YES.
MR. BOSTIC: CAN YOU ESTIMATE FOR US HOW MANY HOURS OF DISCUSSIONS YOU HAD WITH MS. HOLMES IN CONNECTION WITH YOUR WRITING FOR "FORTUNE"?
ROGER PARLOFF: YEAH. FOR THE -- WELL, FOR THE FIRST ARTICLE, WHICH -- AND THE ONLY MAGAZINE ARTICLE, WHICH CAME OUT IN JUNE OF 2014, I HAD ABOUT TEN HOURS OF TAPES. AND SO THEN I WOULD ESTIMATE, MAYBE BALLPARK, ANOTHER TWO, TWO AND A HALF, THREE HOURS OF INTERVIEWS THAT WEREN'T TAPED. AND THEN AFTER THAT ARTICLE, I CONTINUED TO SPEAK TO HER FROM TIME TO TIME.
MR. BOSTIC: YOU MENTIONED THAT SOME OF YOUR CONVERSATIONS WITH MS. HOLMES WERE AUDIO RECORDED, OTHERS WERE NOT. FOR THE CONVERSATIONS THAT WERE NOT AUDIO RECORDED, DID YOU TAKE CONTEMPORANEOUS NOTES OF SOME OF THOSE CONVERSATIONS?
ROGER PARLOFF: YES. MOST. SOME, NOT ALL.
MR. BOSTIC: AND WERE THERE, FINALLY, SOME CONVERSATIONS THAT YOU HAD WITH MS. HOLMES WHERE AUDIO RECORDING AND NOTE-TAKING JUST WEREN'T POSSIBLE OR YOU CHOSE NOT TO?
ROGER PARLOFF: THAT'S RIGHT.
MR. BOSTIC: CAN YOU TELL US ABOUT HOW YOU INITIALLY WERE PUT IN CONTACT WITH MS. HOLMES?
ROGER PARLOFF: WELL, IT WAS THROUGH THE, THE LAW FIRM OF BOIES, SCHILLER & FLEXNER, THE LAW OFFICE OF DAVID BOIES. INITIALLY THE DIRECTOR OF COMMUNICATIONS OF THAT LAW FIRM CALLED ME IN MARCH OF 2014 AND HAD SUGGESTED THAT I MIGHT WANT TO WRITE AN ARTICLE ABOUT A LAWSUIT THAT THERANOS HAD JUST WON, A PATENT RELATED LAWSUIT. AND I HADN'T BEEN FOLLOWING IT IN NEWSLETTERS AND THOUGHT IT MIGHT BE INTERESTING, BUT -- AND SO -- EXCUSE ME. WE HAD SOME INITIAL BACK AND FORTH, AND THE WORD COMING BACK TO ME FROM THE FIRM WAS THAT BOIES WOULD BE -- BOIES HAD REPRESENTED THERANOS, DAVID BOIES, A VERY EMINENT LAWYER. AND THE WORD COMING BACK TO ME WAS THAT HE WOULD BE HAPPY TO COOPERATE WITH SUCH AN ARTICLE, BUT THE REAL STORY WAS THIS REMARKABLE COMPANY AND ITS REMARKABLE FOUNDER AND CEO, ELIZABETH HOLMES.
MR. BOSTIC: DID YOU, PARTIALLY IN RESPONSE TO THAT, SWITCH YOUR FOCUS AND START MOVING TOWARDS WRITING A PROFILE OF MS. HOLMES AND THE COMPANY?
ROGER PARLOFF: YES, ALMOST IMMEDIATELY.
MR. BOSTIC: MAY I APPROACH, YOUR HONOR?
JUDGE DAVILA: YES.
BY MR. BOSTIC:
MR. BOSTIC: (HANDING.) MR. PARLOFF, I'VE HANDED YOU A BINDER, AND FROM TIME TO TIME I'LL ASK YOU TO TURN TO TABS. LET'S START WITH EXHIBIT 1776. YOUR HONOR, THIS IS IN EVIDENCE. MAY WE PUBLISH?
JUDGE DAVILA: YES.
BY MR. BOSTIC:
MR. BOSTIC: MR. PARLOFF, IS EXHIBIT 1776 A COPY OF AN ARTICLE YOU WROTE ABOUT MS. HOLMES AND THERANOS?
ROGER PARLOFF: YES.
MR. BOSTIC: AND WAS THIS ARTICLE PUBLISHED ON OR AROUND JUNE 12TH, 2014?
ROGER PARLOFF: YES.
MR. BOSTIC: AND THE TITLE AT THE TOP READS, "THIS CEO'S OUT FOR BLOOD." IS THAT THE TITLE OF THE ARTICLE?
ROGER PARLOFF: I REMEMBER THAT -- YEAH, UH-HUH.
MR. BOSTIC: I'LL ASK YOU TO TURN NOW IN YOUR BINDER TO TAB 5485, PLEASE.
ROGER PARLOFF: INCIDENTALLY, I THINK THE TITLE WAS DIFFERENT IN THE MAGAZINE, BUT I CAN'T REMEMBER WHAT IT WAS.
MR. BOSTIC: UNDERSTOOD. OKAY. THANK YOU.
ROGER PARLOFF: 5480?
MR. BOSTIC: 5485.
ROGER PARLOFF: YEAH, UH-HUH.
MR. BOSTIC: DO YOU HAVE THAT IN FRONT OF YOU?
ROGER PARLOFF: YEAH.
MR. BOSTIC: AND IS 5485 AN EMAIL EXCHANGE BETWEEN YOU AND MS. HOLMES IN CONNECTION WITH YOU PREPARING THIS ARTICLE?
ROGER PARLOFF: YES. DO I BEGIN FROM THE BOTTOM?
MR. BOSTIC: TAKE A MOMENT TO REVIEW. IT'S A PAGE AND A LITTLE BIT MORE. I'LL ASK YOU ABOUT THE SUBSTANCE, BUT FOR NOW MY ONLY QUESTION IS, DO YOU RECOGNIZE THIS AS AN EMAIL BETWEEN YOU AND MS. HOLMES?
ROGER PARLOFF: YEAH. YES.
MR. BOSTIC: YOUR HONOR, THE GOVERNMENT MOVES TO ADMIT 5485. I BELIEVE THE DEFENSE HAS STIPULATED.
MR. CLINE: NO OBJECTION.
JUDGE DAVILA: IT'S ADMITTED. IT MAY BE PUBLISHED.
(GOVERNMENT'S EXHIBIT 5485 WAS RECEIVED IN EVIDENCE.)
BY MR. BOSTIC:
MR. BOSTIC: MR. PARLOFF, FEEL FREE TO POUR YOURSELF A CUP OF WATER IF YOU WOULD LIKE.
ROGER PARLOFF: THANK YOU. COULD I EXPLAIN? I HAVE A SEASONAL ALLERGY AND THE SYMPTOM IS A DRY COUGH. IT HAPPENS EVERY NOVEMBER. I HAVE THREE VACCINES AND I'M FEELING FINE.
(LAUGHTER.)
MR. BOSTIC: I NEVER THOUGHT WE'D NEED TO EXPLAIN A COUGH.
JUDGE DAVILA: WE APPRECIATE THAT, SIR, AND WELCOME TO CALIFORNIA IN THE FALL.
BY MR. BOSTIC:
MR. BOSTIC: MR. PARLOFF, ON THE SCREEN IN FRONT OF YOU NOW, YOU SHOULD SEE EXHIBIT 5485, THE EMAIL CHAIN THAT WE WERE JUST TALKING ABOUT. DO YOU SEE THAT?
ROGER PARLOFF: YEAH.
MR. BOSTIC: AND LET'S ZOOM IN, MS. HOLLIMAN, ON THE BOTTOM EMAIL MESSAGE IF WE CAN. MR. PARLOFF, DO YOU SEE AN EMAIL FROM YOU TO MS. HOLMES ON APRIL 2ND, 2014?
ROGER PARLOFF: YES.
MR. BOSTIC: YOU WRITE, "GREAT SPEAKING WITH YOU JUST NOW, ELIZABETH. HERE'S MY CONTACT INFORMATION." AND YOU TALK ABOUT SOME TRAVEL PLANS THAT ARE COMING UP?
ROGER PARLOFF: YES.
MR. BOSTIC: IS THAT RIGHT? WAS THIS AROUND THE TIME WHEN YOU FIRST GOT INTO CONTACT WITH MS. HOLMES?
ROGER PARLOFF: YES.
MR. BOSTIC: YOU PROVIDE A LIST BELOW. IS THAT A LIST OF TASKS OR APPROACHES THAT YOU WERE THINKING OF TAKING TO PREPARE AND RESEARCH YOUR ARTICLE?
ROGER PARLOFF: YES.
MR. BOSTIC: NUMBER 1 ON THAT LIST ASKS FOR A GOOD CHUNK OF TIME JUST TO WALK THROUGH THE CHRONOLOGY OF MS. HOLMES'S LIFE, HER DECISION TO FOUND THE COMPANY, AND THE KEY INVENTIONS AND LANDMARKS ALONG THE WAY. DO YOU SEE THAT?
ROGER PARLOFF: YES.
MR. BOSTIC: AND NUMBER 2 EXPRESSES YOUR INTEREST IN A CHANCE TO SEE MS. HOLMES IN ACTION AT WORK, MAYBE SHADOWING HER FOR A PORTION OF A DAY. DO YOU SEE THAT?
ROGER PARLOFF: YES.
MR. BOSTIC: AND LET'S GO UP IN THIS EMAIL CHAIN AND ZOOM IN ON THE TOP PART, THE TWO TOP MESSAGES. FIRST, IN THE BOTTOM OF THIS SELECTION, DO YOU SEE ANOTHER EMAIL FROM YOU THE FOLLOWING DAY TALKING ABOUT, AGAIN, AN UPCOMING TRAVEL TO MEET WITH MS. HOLMES?
ROGER PARLOFF: YEAH.
MR. BOSTIC: AND DID YOU, IN FACT, MEET IN PERSON WITH MS. HOLMES THE WEEK AFTER THIS EMAIL?
ROGER PARLOFF: YES.
MR. BOSTIC: IN THAT SAME EMAIL YOU EXPRESS INTEREST IN HAVING THE EXPERIENCE OF GETTING YOUR BLOOD TESTED USING THE THERANOS METHOD. IS THAT SOMETHING THAT YOU WANTED AT THAT TIME?
ROGER PARLOFF: YES.
MR. BOSTIC: AND WAS THAT ALL IN CONNECTION WITH YOUR RESEARCH FOR THE ARTICLE?
ROGER PARLOFF: YES.
MR. BOSTIC: AND MS. HOLMES IN THE TOP MESSAGE CONFIRMS THAT THE COMPANY WILL BE ABLE TO GET YOU A PRESCRIPTION. DO YOU SEE THAT?
ROGER PARLOFF: YES.
MR. BOSTIC: AND WHEN YOU WENT TO CALIFORNIA TO MEET WITH MS. HOLMES, WHERE DID THE MEETING TAKE PLACE?
ROGER PARLOFF: AT THEIR HEADQUARTERS AT THAT TIME WHICH WAS, WHICH I THINK IT WAS SOUTH CALIFORNIA AVENUE. IT WAS NOT THEIR FINAL HEADQUARTERS.
MR. BOSTIC: AND WAS THAT IN PALO ALTO?
ROGER PARLOFF: YEAH.
MR. BOSTIC: DID YOU INTERVIEW MS. HOLMES IN CONNECTION WITH THAT FIRST MEETING?
ROGER PARLOFF: YES.
MR. BOSTIC: DID YOU ALSO HAVE A TOUR OF THE THERANOS HEADQUARTERS AT THAT TIME?
ROGER PARLOFF: YES.
MR. BOSTIC: AND WHAT DO YOU REMEMBER SEEING ON THAT TOUR?
ROGER PARLOFF: AFTER YOU GOT THROUGH THE RECEPTION, THERE WAS A LARGE OPEN PLAN ROOM WITH A LOT OF DESKS. TOWARDS THE BACK THERE WAS -- EXCUSE ME, THERE WAS A ROW OF OFFICES ALONG THE PERIMETER, AT LEAST ONE PERIMETER. I BELIEVE ELIZABETH'S OFFICE WAS ON THE LEFT. THERE WERE THEN LABS. YOU WOULD BUZZ THROUGH WITH A BADGE OR A CARD TO GET INTO THE LAB, AND THEN TO GET FROM ONE LAB TO ANOTHER LAB. I THINK THE PLACE HAD AT LEAST TWO LEVELS, POSSIBLY THREE. I REMEMBER A DOWNSTAIRS. THERE WAS A -- I THINK THERE WAS A CONFERENCE ROOM THAT USED TO BE THE OFFICE OF MARK ZUCKERBERG WHEN FACEBOOK WAS IN THE BUILDING. I DON'T REMEMBER IF THERE WAS A SECOND FLOOR AS WELL.
MR. BOSTIC: DO YOU REMEMBER -- WELL, LET ME ASK FIRST, WHILE YOU TOOK THAT TOUR, WAS MS. HOLMES PRESENT WITH YOU?
ROGER PARLOFF: YES.
MR. BOSTIC: DURING THE ENTIRE TOUR?
ROGER PARLOFF: I THINK SO.
MR. BOSTIC: DO YOU RECALL WHETHER YOU SAW THE CLINICAL LAB WHERE THERANOS ACTUALLY PERFORMED ITS PATIENT TESTING ON THAT TOUR?
ROGER PARLOFF: I DID NOT SEE THE COMMERCIAL LAB. I SAW AN R&D LAB.
MR. BOSTIC: DO YOU REMEMBER SEEING BLOOD ANALYZERS IN THE R&D LAB?
ROGER PARLOFF: YES.
MR. BOSTIC: WHAT DID THEY LOOK LIKE?
ROGER PARLOFF: TO ME THEY LOOKED LIKE LARGE -- WELL, THEY LOOKED LIKE IF YOU HAVE A DESKTOP COMPUTER, LIKE A DELL DESKTOP, THE TOWER OF A DESKTOP COMPUTER, MAYBE TWO FEET HIGH, AND MAYBE 8 INCHES TO A FOOT WIDE, SOMETHING LIKE THAT.
MR. BOSTIC: AROUND THE TIME OF THAT FIRST MEETING, WERE YOU HAVING CONVERSATIONS WITH MS. HOLMES, FOR EXAMPLE, DURING THE TOUR ABOUT WHAT THE THERANOS TECHNOLOGY WAS?
ROGER PARLOFF: DURING THE TOUR -- I THINK WE SPOKE MORE ABOUT THAT IN A CONFERENCE ROOM AS I REMEMBER IT. I CAN'T REMEMBER DURING THE TOUR ITSELF HOW MUCH, YOU KNOW, SHE SHOWED THEM TO ME. THEY WERE NOT IN OPERATION AT THAT TIME.
MR. BOSTIC: OKAY. SO I WON'T ASK YOU TO PLACE IT IN THE BUILDING. BUT WHAT DO YOU RECALL, AT A HIGH LEVEL, MS. HOLMES TELLING YOU ABOUT WHAT THE COMPANY WAS DOING, WHAT ITS TECHNOLOGY WAS?
ROGER PARLOFF: WELL, THE -- I MEAN, THE KEY ADVANCE WAS THAT THEY COULD DO A TREMENDOUS NUMBER OF BLOOD TESTS WITH A FINGERSTICK INSTEAD OF VENIPUNCTURE, AND THEY HAD MINIATURIZED THE WHOLE LAB PROCESS AND COULD DO -- SO A VERY SMALL QUANTITY OF BLOOD WOULD BE TAKEN, YOU KNOW, IN A NANOTAINER, SOMETHING ABOUT THE SIZE OF A FUSE, AND THEN YOU COULD ANALYZE THAT AND GET VERY QUICK RESULTS.
MR. BOSTIC: AND IN THOSE INITIAL CONVERSATIONS WITH MS. HOLMES, WAS THERE A KEY SCIENTIFIC ADVANCE OR PIECE OF TECHNOLOGY THAT SHE WAS HOLDING OUT AS MAKING IT POSSIBLE TO DO THAT KIND OF TESTING?
ROGER PARLOFF: WELL, I MEAN THE, THE SPECIFICS OF HOW THIS WAS DONE WAS ALL A TRADE SECRET, PROBABLY MULTIPLE TRADE SECRETS. IN GENERAL, SHE WAS SOMEHOW MINIATURIZING THE PROCESS AND ABLE TO RUN ALL OF THESE TESTS IN THIS VERY TINY DEVICE, HIGHLY AUTOMATED AS YOU WOULD PUT THE NANOTAINER INTO A CARTRIDGE. I DID NOT SEE THIS DONE AT THIS TIME, BUT SHE DESCRIBED IT. AND THEN THE CARTRIDGE WOULD GO INTO THE DEVICE, AND THIS WOULD -- IT WOULD BE AUTOMATED AND THAT WOULD PROTECT AGAINST HUMAN ERROR, AND THAT WOULD IMPROVE THE ACCURACY OF RESULTS.
MR. BOSTIC: THAT'S HOW MS. HOLMES EXPLAINED IT TO YOU?
ROGER PARLOFF: YES.
MR. BOSTIC: BESIDES THE PALO ALTO HEADQUARTERS, DID YOU ALSO GET A TOUR OF THEIR MANUFACTURING FACILITIES?
ROGER PARLOFF: YEAH. YES.
MR. BOSTIC: WHAT DO YOU REMEMBER ABOUT THAT?
ROGER PARLOFF: IT WAS IN NEWARK, CALIFORNIA ACROSS A BODY OF WATER, I THINK THE SOUTH BAY. AND I THINK IT MIGHT HAVE BEEN A NEW FACILITY. IT WAS, IT WAS LARGE. IT HAD A LOT OF OPEN SPACE AT THAT POINT. IT MIGHT HAVE BEEN -- IT WAS NOT A BUZZING FACTORY, YOU KNOW, NO ASSEMBLY LINES OR ANYTHING, BUT IT MAY HAVE BEEN TOO NEW FOR THAT. I CAN'T REALLY REMEMBER. THEY WERE GETTING -- THEY SEEMED TO BE GETTING SET UP STILL.
MR. BOSTIC: AND ON THAT SAME VISIT, WE SAW IN YOUR EMAIL THAT YOU EXPRESSED SOME INTEREST ABOUT EXPERIENCING THE THERANOS TEST. DID YOU HAVE THAT OPPORTUNITY?
ROGER PARLOFF: YES.
MR. BOSTIC: AND WHAT DO YOU REMEMBER ABOUT THAT?
ROGER PARLOFF: I WENT TO THE WALGREENS AT DOWNTOWN PALO ALTO, AND THIS WAS NOT -- THIS WAS ARRANGED BY THEM. IT WAS NOT A SURPRISE. AND THERE WAS A LITTLE WING OF THE WALGREENS THAT WAS SET ASIDE AS A THERANOS WELLNESS CENTER, AND YOU WENT IN THERE AND IT WAS A -- THERE WAS SORT OF A SOOTHING ENVIRONMENT, THERE WAS AN LE -- A HIGH DEFINITION T.V. WITH SOMETHING SOOTHING ON IT, I THINK AN AQUARIUM, OR SOMETHING LIKE THAT. AND THERE WAS A PHLEBOTOMIST WHO -- SHE HAD SOMETHING TO WARM THE FINGER, I THINK, AND THEN SHE MASSAGED IT, AND THEN SHE PUT A SMALL LANCET AND PRICKED THE FINGER. IT WAS VERY GOOD. IT WAS VERY PAINLESS. AND THEN THERE WAS A WICKING DEVICE, EITHER -- EXCUSE ME -- GLASS OR PLASTIC, THAT YOU PUT AGAINST THE WOUND OR THE FINGERSTICK, AND IT WICKED THE BLOOD UP INTO THE NANOTAINER, AND THEN SOMEHOW YOU SNAPPED THE NANOTAINER OFF.
MR. BOSTIC: AND THAT'S WHAT YOU EXPERIENCED DURING THAT VISIT?
ROGER PARLOFF: YEAH. YES.
MR. BOSTIC: YOU MENTIONED THAT THE COMPANY ARRANGED THAT VISIT. IN OTHER WORDS, YOU JUST DIDN'T DO A COLD WALK IN?
ROGER PARLOFF: THAT'S RIGHT.
MR. BOSTIC: BESIDES THE THINGS THAT YOU WERE ABLE TO SEE, DID MS. HOLMES ALSO PROVIDE YOU WITH WRITTEN MATERIALS ABOUT THERANOS?
ROGER PARLOFF: YES.
MR. BOSTIC: CAN YOU TURN TO TAB 5487, PLEASE, IN YOUR BINDER.
ROGER PARLOFF: YEAH.
MR. BOSTIC: YOUR HONOR, THE GOVERNMENT OFFERS 5487. I BELIEVE THE DEFENSE HAS STIPULATED.
MR. CLINE: NO OBJECTION.
JUDGE DAVILA: IT'S ADMITTED. IT MAY BE PUBLISHED.
(GOVERNMENT'S EXHIBIT 5487 WAS RECEIVED IN EVIDENCE.)
MR. BOSTIC: MS. HOLLIMAN, LET'S GO TO PAGE 3 OF THIS EXHIBIT.
BY MR. BOSTIC:
MR. BOSTIC: 5487. AND IT'S ABOUT TO BE ON YOUR SCREEN IF THAT'S EASIER.
ROGER PARLOFF: OKAY. UH-HUH.
MR. BOSTIC: WHILE WE'RE WAITING FOR THE DOCUMENT TO COME UP ON THE SCREEN, MR. PARLOFF, IS THIS AN EMAIL DATED MAY 26TH, 2014, TO YOU FROM CHRISTIAN HOLMES?
ROGER PARLOFF: YES.
MR. BOSTIC: OKAY. AND IF WE GO TO PAGE 3 OF THIS EXHIBIT, AND LET'S ZOOM IN ON THE TEXT OF THAT EMAIL IN THE MIDDLE. AND THE EMAIL FROM CHRISTIAN READS, "ROGER, "I HOPE THIS FINDS YOU WELL. ATTACHED TO THIS EMAIL IS A PRESENTATION DECK WITH DETAILED CLINICAL BACKGROUND." DO YOU SEE THAT?
ROGER PARLOFF: YES.
MR. BOSTIC: AND THEN AT THE BOTTOM OF THE SELECTION IT READS, "ALL DOCUMENTS CAN BE ACCESSED WITH THE FOLLOWING CREDENTIALS:" WERE THE MATERIALS THAT THERANOS SENT YOU ENCRYPTED?
ROGER PARLOFF: YES.
MR. BOSTIC: DO YOU HAVE ACCESS TO THE ELECTRONIC NATIVE VERSIONS OF THOSE DOCUMENTS TODAY?
MR. BOSTIC: I'LL ASK YOU TO TURN TO TAB 3404 THEN IN YOUR BINDER. IT'S 3404.
ROGER PARLOFF: YES.
MR. BOSTIC: AND ARE YOU LOOKING AT A SLIDE PRESENTATION WHERE THE FRONT PAGE READS THERANOS?
ROGER PARLOFF: YES.
MR. BOSTIC: AND I'LL DRAW YOUR ATTENTION TO THE LOWER RIGHT CORNER OF EACH PAGE WHERE THERE'S A BATES NUMBER BEGINNING WITH YOUR LAST NAME. DO YOU SEE THAT?
ROGER PARLOFF: YES.
MR. BOSTIC: IS THIS A PRESENTATION THAT YOU RECEIVED FROM THERANOS WHILE YOU WERE PREPARING TO WRITE YOUR JUNE 2014 ARTICLE?
ROGER PARLOFF: YES.
MR. BOSTIC: YOUR HONOR, THE GOVERNMENT MOVES TO ADMIT 3404.
MR. CLINE: NO OBJECTION.
JUDGE DAVILA: IT'S ADMITTED. IT MAY BE PUBLISHED.
(GOVERNMENT'S EXHIBIT 3404 WAS RECEIVED IN EVIDENCE.)
BY MR. BOSTIC:
MR. BOSTIC: AND LET'S LOOK FOR A MOMENT AT THE FIRST PAGE. MR. PARLOFF, THIS IS THE PRESENTATION THAT THERANOS SENT YOU?
ROGER PARLOFF: YES. I RECEIVED IT IN HARD COPY WHILE I WAS THERE, AND THEN I GOT A VERSION -- A DIGITAL VERSION AS WELL.
MR. BOSTIC: AND WAS THIS PRESENTATION JUST EMAILED TO YOU WITHOUT EXPLANATION, OR WAS IT ACTUALLY PRESENTED TO YOU AT SOME POINT? DO YOU REMEMBER?
ROGER PARLOFF: NO. SHE WENT THROUGH THE HARD COPY. I'M A LITTLE -- SHE WENT THROUGH THE HARD COPY I THINK THE DAY I GOT THERE, APRIL 7TH. I WAS A LITTLE CONFUSED BECAUSE THE EMAIL YOU SENT WAS FROM MAY 26TH, AND I THOUGHT I GOT A DIGITAL VERSION OF THIS BY APRIL 9TH. MAYBE THEY SENT IT AGAIN. I DON'T KNOW.
MR. BOSTIC: I SEE. IN ANY EVENT, AS TO EXHIBIT 3404, DO YOU HAVE A RECOLLECTION OF REVIEWING THIS PRESENTATION WITH MS. HOLMES?
ROGER PARLOFF: YES. SHE WALKED ME THROUGH SOME OF THE KEY PAGES OF THIS EXHIBIT.
MR. BOSTIC: OKAY. I'LL COME BACK TO A COUPLE OF THESE PAGES THROUGHOUT OUR CONVERSATION TODAY. BUT LET'S LOOK BRIEFLY AT PAGE 13 OF THIS EXHIBIT. DO YOU SEE A SLIDE THAT'S TITLED "REINVENTING THE PATIENT EXPERIENCE"?
ROGER PARLOFF: YES.
MR. BOSTIC: AND BELOW THAT IT SAYS, "ALL THE SAME TESTS. ONE TINY SAMPLE."
ROGER PARLOFF: YES.
MR. BOSTIC: AND THERE'S SOME IMAGES THERE OF BLOOD BEING COLLECTED FROM A FINGERTIP; IS THAT CORRECT?
ROGER PARLOFF: YES.
MR. BOSTIC: AND IS THAT MORE OR LESS HOW YOUR SAMPLE WAS DRAWN AT WALGREENS?
ROGER PARLOFF: YES.
MR. BOSTIC: LET'S LOOK AT PAGE 4, PLEASE. AND WAS THIS THE BLOOD CONTAINER THAT YOUR BLOOD WAS COLLECTED INTO, OR DOES THIS RESEMBLE IT?
ROGER PARLOFF: YES.
MR. BOSTIC: AND WHAT DID MS. HOLMES TELL YOU ABOUT THIS CONTAINER OR THIS SAMPLE SIZE?
ROGER PARLOFF: UM, I THINK IT WAS -- WELL, IT WAS ABOUT A THOUSAND -- SHE SAID IT WAS ABOUT A THOUSANDTH THE SIZE OF WHAT A NORMAL BLOOD DRAW MIGHT TAKE. I THINK IT WAS TENS OF MICROLITERS. I CAN'T REMEMBER HOW TO DESCRIBE THE LARGER TEST TUBES.
MR. BOSTIC: LET'S LOOK AT THE NEXT PAGE. THAT'S PAGE 5. DO YOU RECALL MS. HOLMES GIVING YOU ANY EXPLANATION ABOUT THIS IMAGE OR A SIMILAR ONE?
ROGER PARLOFF: YES. APPROXIMATELY WHAT I JUST SAID, THAT IT WAS A TINY PERCENTAGE OF THE NORMAL DRAW.
MR. BOSTIC: I'D LIKE TO GO THROUGH SOME OF THE SUBJECTS THAT YOU DISCUSSED WITH MS. HOLMES. LET'S START WITH CONVERSATIONS YOU HAD WITH HER ABOUT THE RANGE OF TESTS THAT THERANOS COULD PERFORM. IS THAT ALL RIGHT?
ROGER PARLOFF: YEAH.
MR. BOSTIC: DURING YOUR CONVERSATIONS WITH MS. HOLMES, DID SHE MAKE STATEMENTS ABOUT THE RANGE OF TESTS THAT THE THERANOS ANALYZER COULD PERFORM?
ROGER PARLOFF: YES, SHE DID.
MR. BOSTIC: DID THAT TOPIC COME UP MULTIPLE TIMES?
ROGER PARLOFF: YES, THROUGHOUT MY REPORTING, YES.
MR. BOSTIC: FIRST LET'S TAKE A LOOK AT -- WHILE WE'RE STILL AT 3404, BACK TO PAGE 13 OF THAT PRESENTATION. AND WE NOTED THAT THERE'S A LINE HERE THAT SAYS, "ALL THE SAME TESTS. ONE TINY SAMPLE." DO YOU SEE THAT?
ROGER PARLOFF: YES.
MR. BOSTIC: LET'S LOOK ALSO AT PAGE 14. AND DO YOU SEE HERE A SLIDE TITLED "1/1,000TH THE SIZE OF A TYPICAL BLOOD DRAW"?
ROGER PARLOFF: YES.
MR. BOSTIC: AND THE FIRST LINE UNDERNEATH THAT READS, "THERANOS RUNS ANY TEST AVAILABLE IN CENTRAL LABORATORIES, AND PROCESSES ALL SAMPLE TYPES." DO YOU SEE THAT?
ROGER PARLOFF: YES.
MR. BOSTIC: AND WAS THAT CONSISTENT WITH EXPLANATIONS THAT MS. HOLMES GAVE YOU DURING THIS TIME PERIOD?
ROGER PARLOFF: YES. I MEAN, IT WAS MORE THAN 1200 TESTS -- WELL, IT WAS MORE THAN 200 TESTS, YEAH.
MR. BOSTIC: UM, WERE SOME OF YOUR CONVERSATIONS ON THIS TOPIC WITH MS. HOLMES RECORDED?
ROGER PARLOFF: YES.
MR. BOSTIC: DID YOU HAVE ONE SUCH CONVERSATION WITH MS. HOLMES ON OR AROUND MAY 12TH, 2014?
ROGER PARLOFF: YES.
MR. BOSTIC: AROUND THAT TIME PERIOD, HAD YOU BEEN LOOKING INTO WHAT TESTS WERE OFFERED BY CONVENTIONAL LABS TO GET AN IDEA --
ROGER PARLOFF: YES. AFTER I GOT BACK TO NEW YORK -- WHEN I WENT OUT THERE I HAD NEVER SEEN A LAB. WHEN I GOT BACK, I ARRANGED TO VISIT A CONVENTIONAL LAB TO GET A CONTRAST, AND YEAH.
MR. BOSTIC: AND WHICH CONVENTIONAL LAB DID YOU VISIT?
ROGER PARLOFF: WELL, I AGREED NOT TO IDENTIFY THE LAB.
MR. BOSTIC: THE MAY 12TH CONVERSATION THAT YOU HAD WITH MS. HOLMES, DID YOU CREATE A RECORDING OF THAT CONVERSATION?
ROGER PARLOFF: YES.
MR. BOSTIC: CAN YOU TELL US A LITTLE BIT ABOUT YOUR METHOD FOR RECORDING AND PRESERVING THE RECORDINGS.
ROGER PARLOFF: I USED A SMALL HANDHELD DEVICE, IT'S MAYBE FOUR OR FIVE INCHES LONG, AND MAYBE AN INCH WIDE, IF THAT, AND IT'S SOLID STATE. IT HAS BASICALLY A BUILT-IN -- IT'S ALMOST LIKE A BUILT-IN THUMB DRIVE SO THAT AFTER YOU TAPE, YOU PULL THE LEVER AND THE THUMB DRIVE EXTENDS FROM THE TAPE RECORDER AND YOU STICK IT RIGHT INTO THE USB PORT OF YOUR COMPUTER AND THEN DRAG THE FILE FROM THE DIGITAL RECORDING DEVICE INTO THE COMPUTER.
MR. BOSTIC: AND WAS THAT YOUR PRACTICE WITH THE RECORDINGS THAT YOU MADE OF YOUR CONVERSATIONS WITH MS. HOLMES?
ROGER PARLOFF: YES.
MR. BOSTIC: HOW WERE THE FILES NAMED OR ORGANIZED?
ROGER PARLOFF: THE DEVICE AUTOMATICALLY GAVE IT A FILE NAME, WHICH WAS THE YEAR, THE MONTH AND DATE, AND THEN ANOTHER NUMBER, WHICH WAS THE NUMBER OF TIMES I HAD -- THE NUMBER OF RECORDINGS FOR THAT DATE. AND THEN WHEN I DRAGGED IT INTO MY COMPUTER, I WOULD ADD THE NAME OF THE INDIVIDUAL THAT WAS BEING RECORDED.
MR. BOSTIC: AND THEN WAS IT YOUR PRACTICE TO RETAIN THOSE DIGITAL RECORDINGS ON YOUR COMPUTER GOING FORWARD?
ROGER PARLOFF: YES.
MR. BOSTIC: AND DID YOU PROVIDE YOUR RECORDINGS OF CONVERSATIONS WITH MS. HOLMES TO THE GOVERNMENT IN RESPONSE TO A SUBPOENA?
ROGER PARLOFF: YES.
MR. BOSTIC: YOUR HONOR, AT THIS TIME THE GOVERNMENT WOULD LIKE TO OFFER EXHIBIT 5473A, WHICH IS A CLIP FROM THE RECORDING THAT WE HAVE BEEN DISCUSSING. I UNDERSTAND THE DEFENSE MAY STIPULATE.
MR. CLINE: NO OBJECTION. ONE NOTE. AS I UNDERSTAND IT FROM MR. BOSTIC, THERE'S GOING TO BE A SCROLLING TRANSCRIPT WITH THESE TAPES. WE DON'T OBJECT TO THAT AS LONG AS IT'S NOT PART OF THE ACTUAL EXHIBIT. I DON'T KNOW IF YOUR HONOR WANTS TO GIVE AN INSTRUCTION ON THAT, BUT IN ANY EVENT, WE DON'T OBJECT TO THE AUDIO AND WE DON'T OBJECT TO THE SCROLLING OF THE TRANSCRIPT, AS LONG AS THE TRANSCRIPT IS REMOVED.
JUDGE DAVILA: UNDERSTOOD.
MR. BOSTIC: AND TO CLARIFY, YOUR HONOR, THAT WILL ONLY BE THE CASE, ACCOMPANYING SUBTITLES, FOR ONE OF THE EXHIBITS WHERE THERE WAS SOME BACKGROUND NOISE. THE REST WILL BE AUDIO ONLY.
JUDGE DAVILA: SO IS THIS AUDIO ONLY?
MR. BOSTIC: THIS IS AUDIO ONLY.
MR. CLINE: FORGIVE ME. I JUST WANT TO INQUIRE. IT'S JUST ONE THAT HAS THE TRANSCRIPT, NONE OF THE OTHERS?
MR. BOSTIC: CORRECT.
MR. CLINE: UNDERSTOOD. THANK YOU.
JUDGE DAVILA: SO THERE'S NO TRANSCRIPT THAT YOU'RE GOING TO SEEK TO PROVIDE FOR THIS?
MR. BOSTIC: NOT FOR THIS EXHIBIT, YOUR HONOR. I WILL NOTE THAT BEFORE IT IS PRESENTED.
JUDGE DAVILA: THANK YOU. AND WHAT IS THE LENGTH OF THIS CLIP?
MR. BOSTIC: THIS CLIP IS APPROXIMATELY TWO MINUTES LONG.
JUDGE DAVILA: TWO MINUTES LONG, OKAY. LADIES AND GENTLEMEN, YOU'RE ABOUT TO LISTEN TO AN AUDIO RECORDING, AS MR. BOSTIC AND MR. CLINE HAVE INDICATED. PLEASE LISTEN CLOSELY. YOU WILL NOT HAVE A TRANSCRIPT OF THIS, SO PLEASE LISTEN CLOSELY. COUNSEL, YOU AGREE THAT THE COURT REPORTER NEED NOT REPORT THE CONTENTS OF THIS RECORDING?
MR. BOSTIC: YES, YOUR HONOR, NO OBJECTION.
MR. CLINE: THAT'S FINE.
JUDGE DAVILA: ALL RIGHT. THANK YOU.
BY MR. BOSTIC:
MR. BOSTIC: SO BEFORE WE PRESS PLAY ON EXHIBIT 5473A, MR. PARLOFF, YOU TESTIFIED JUST NOW THAT YOU HAD CONVERSATIONS WITH MS. HOLMES ABOUT THE RANGE OF TESTS THAT COULD BE PERFORMED ON THE THERANOS DEVICE; CORRECT?
ROGER PARLOFF: YES.
MR. BOSTIC: MS. HOLLIMAN, LET'S PLAY 5473A, PLEASE.
(AUDIO RECORDING PLAYED OFF THE RECORD.)
BY MR. BOSTIC:
MR. BOSTIC: MR. PARLOFF, WAS THAT AUDIO SOMETHING THAT YOU RECOGNIZE AS YOUR CONVERSATION WITH MS. HOLMES ON MAY 12TH, 2014?
ROGER PARLOFF: YEAH. I'M NOT POSITIVE OF THE DATE, BUT THEREABOUTS.
MR. BOSTIC: IF THE FILE NAME FOR THAT RECORDING HAD THAT DATE IN THE FILE NAME --
ROGER PARLOFF: YES, YES.
MR. BOSTIC: -- WOULD IT INDICATE THAT IT WAS FROM THAT DATE?
ROGER PARLOFF: THAT'S RIGHT.
JUDGE DAVILA: MR. BOSTIC, WE'VE JUST PLAYED THAT. I'M NOT SURE THAT I FORMALLY ADMITTED THE DOCUMENT PER YOUR AGREEMENT. BUT IT IS ADMITTED, AND IT WAS PLAYED. THANK YOU.
MR. BOSTIC: THANK YOU, YOUR HONOR.
(GOVERNMENT'S EXHIBIT 5473A WAS RECEIVED IN EVIDENCE.)
BY MR. BOSTIC:
MR. BOSTIC: SO, MR. PARLOFF, YOU'VE HEARD MS. HOLMES'S RESPONSE TO YOUR QUESTION ABOUT WHETHER THERANOS COULD PERFORM ALL OF THE TESTS THAT QUEST COULD. LET ME ASK YOU, BEFORE YOU WROTE YOUR ARTICLE IN JUNE OF 2014, DID MS. HOLMES EVER TELL YOU THAT THE RANGE OF TESTS THAT THE THERANOS DEVICE COULD PERFORM WAS ACTUALLY MUCH MORE LIMITED THAN THE HUNDREDS OF TESTS THAT QUEST COULD DO?
MR. BOSTIC: DID YOU CONTINUE AFTER THAT DATE TO HAVE DISCUSSIONS WITH MS. HOLMES ABOUT THE NUMBER OF TESTS THAT THE ANALYZER COULD DO IN CONNECTION WITH A NUMBER OF CPT CODES?
ROGER PARLOFF: YES.
MR. BOSTIC: AND DID MS. HOLMES PROVIDE AN EXPLANATION TO YOU ABOUT WHAT A CPT CODE WAS?
ROGER PARLOFF: I THINK SHE DID.
MR. BOSTIC: WHAT DO YOU RECALL HER SAYING ABOUT THAT, IF YOU REMEMBER?
ROGER PARLOFF: IT'S A CODE THAT I THINK THE AMERICAN MEDICAL ASSOCIATION ASSIGNS TO MEDICAL PROCEDURES, INCLUDING DIAGNOSTIC TESTS, SO THAT WHEN YOU APPLY FOR REIMBURSEMENT FROM AN INSURANCE COMPANY, THEY USE THESE CODES TO INDICATE WHAT THE PROCEDURE WAS.
MR. BOSTIC: AND DID YOU RECORD A CONVERSATION WITH MS. HOLMES ON MAY 21ST, 2014 WHERE THIS TOPIC WAS DISCUSSED?
ROGER PARLOFF: YES.
MR. BOSTIC: YOUR HONOR, THE GOVERNMENT OFFERS AT THIS TIME EXHIBIT 5474AB2. AND I APOLOGIZE FOR THE CRYPTIC EXHIBIT NAMES.
JUDGE DAVILA: AND THIS IS THE RECORDING?
MR. BOSTIC: IT IS, YOUR HONOR. THIS IS A CLIP THAT IS APPROXIMATELY SIX MINUTES LONG THAT WE'VE JUST REFERENCED.
MR. CLINE: NO OBJECTION.
JUDGE DAVILA: ALL RIGHT. LADIES AND GENTLEMEN, THIS IS ADMITTED. LADIES AND GENTLEMEN, YOU'RE ABOUT TO HEAR ANOTHER TAPE, AS MR. BOSTIC INDICATED. YOU WILL NOT HAVE A TRANSCRIPT OF THE RECORDING. PLEASE LISTEN CLOSELY. THE EXHIBIT IS NOW ADMITTED, AND IT MAY NOW BE PLAYED.
(GOVERNMENT'S EXHIBIT 5474AB2 WAS RECEIVED IN EVIDENCE.)
(AUDIO RECORDING PLAYED OFF THE RECORD.)
BY MR. BOSTIC:
MR. BOSTIC: DID YOU HEAR MS. HOLMES SAY IN THAT CLIP THAT THERANOS HAD THE ABILITY TO PERFORM MORE THAN THE 200 TESTS THAT WERE THEN LISTED ON THE WEBSITE?
ROGER PARLOFF: YES.
MR. BOSTIC: AND DURING THAT TIME PERIOD -- AND THIS WAS BEFORE YOU WROTE THE JUNE 2014 ARTICLE; CORRECT?
ROGER PARLOFF: YES.
MR. BOSTIC: DURING THAT TIME PERIOD, DID MS. HOLMES TELL YOU ANYTHING ABOUT THE COMPANY'S RELIANCE ON THIRD PARTY DEVICES, OR WAS ALL OF YOUR DISCUSSION FOCUSSED ON THE THERANOS DEVICE?
ROGER PARLOFF: THE THERANOS DEVICE.
MR. BOSTIC: THERE WAS A POINT IN THAT CLIP WHERE YOU ASKED ABOUT VACUTAINER USE. DO YOU REMEMBER THAT?
ROGER PARLOFF: YES.
MR. BOSTIC: AND YOU PREFACED THAT QUESTION BY SAYING, NOT TO BELABOR THIS, OR SOMETHING TO THAT EFFECT. HAD YOU HAD PREVIOUS CONVERSATIONS WITH MS. HOLMES ABOUT USE OF VACUTAINER FOR CERTAIN DRAWS?
ROGER PARLOFF: YES. WELL, THERE WERE ALREADY REPORTS AT THAT POINT OF PEOPLE WHO WOULD GO TO THE WELLNESS CENTER HOPING -- PATIENTS HOPING TO GET THE FINGERSTICK, AND THEY WOULD BE DISAPPOINTED BECAUSE THEY WOULD HAVE TO BE TOLD THAT THEY WOULD HAVE TO DO VENIPUNCTURE. SO I WAS ASKING HER ABOUT WHY THAT WAS. AND IN THAT CONTEXT SHE HAD SOME ANSWERS TO THAT. BUT THERE WERE CERTAIN SITUATIONS WHERE SHE WOULD DO VENIPUNCTURE. ONE WAS SHE SAID SOMETIMES DOCTORS WANTED TO DO THE TEST IN THEIR LAB AND JUST SEND IT TO THERANOS BECAUSE THE PRICE WAS LOWER. SO SHE SAID WHEN THEY DID THAT, THEY COULD STILL PROCESS THAT BLOOD, BUT THEY WOULD ASK THE DOCTOR TO SEND IT TO THEM IN THEIR SMALLEST VACUTAINER, WHICH I THINK MEANS A SMALL TEST TUBE, THE TYPE OF TEST TUBE USED FOR THESE BLOOD -- FOR BLOOD DRAWS BECAUSE THEY ONLY NEEDED THESE MICRO SAMPLES GIVEN THEIR SYSTEM, GIVEN THEIR MINIATURIZED SYSTEM.
MR. BOSTIC: CAN I ASK YOU A QUESTION ABOUT THE ANSWER THAT MS. HOLMES GAVE IN THE CLIP THAT WE JUST LISTENED TO? DO YOU REMEMBER THE ANSWER SHE GAVE TALKED ABOUT THE CONFIGURATION OF SOMETHING SHE CALLED CARTRIDGES?
ROGER PARLOFF: YES.
MR. BOSTIC: HAD YOU HAD CONVERSATIONS WITH MS. HOLMES WHERE SHE EXPLAINED TO YOU WHAT CARTRIDGE MEANT IN THE CONTEXT OF TESTING?
ROGER PARLOFF: YEAH. EXCUSE ME. THE NANOTAINER WOULD BE PLACED INTO A CARTRIDGE, IF YOU REMEMBER LIKE BETA MAX MACHINES AND THE VCR, YOU WOULD -- THE CARTRIDGE WOULD BE LIKE THE BETA MAX CARTRIDGE, BUT YOU WOULD PUT A NANOTAINER IN THERE AND THEN YOU WOULD FEED IT INTO THE MACHINE. AND THAT I WAS SAYING WAS PART OF THE AUTOMATION THAT WOULD -- THAT WAS SUPPOSED TO MAKE IT MORE RELIABLE, LESS PRONE TO HUMAN ERROR. AND SO SHE SEEMED TO BE SAYING THAT -- WELL, AS I UNDERSTOOD IT, THAT EVEN WITH THE VACUTAINER, THERE WAS A WAY TO SOMEHOW GET IT OR GET A PORTION OF IT INTO THIS CARTRIDGE AND USE IT IN HER DEVICE.
MR. BOSTIC: AND BASED ON WHAT MS. HOLMES HAD TOLD YOU, WOULD THAT MEAN ANALYZING THE SAMPLE STILL IN A THERANOS CREATED ANALYZER?
ROGER PARLOFF: YES, UH-HUH.
MR. CLINE: YOUR HONOR, I'M GOING TO OBJECT NOW TO SORT OF INTERPRETING WHAT WAS SAID. MS. HOLMES'S WORDS ARE CERTAINLY FAIR GAME, NOT THE INTERPRETATION.
JUDGE DAVILA: UNDERSTOOD. DO YOU WANT TO ASK QUESTIONS AS TO -- IS THIS RELATING TO HOW IT WAS DESCRIBED TO HIM FROM MS. HOLMES?
MR. BOSTIC: CORRECT, YOUR HONOR.
JUDGE DAVILA: RIGHT. OKAY.
BY MR. BOSTIC:
MR. BOSTIC: LET ME SEE IF I CAN CLARIFY THIS, MR. PARLOFF. WHEN MS. HOLMES DISCUSSED CARTRIDGES WITH YOU, WERE THOSE CARTRIDGES SOMETHING THAT SHE SAID WERE SPECIFIC TO THE THERANOS ANALYZER, OR DID SHE SAY THEY WERE ALSO USED WITH THIRD PARTY DEVICES?
ROGER PARLOFF: NO. SPECIFIC TO THE THERANOS ANALYZER.
MR. BOSTIC: LET'S GO BACK TO EXHIBIT 3404. IF WE COULD DISPLAY THAT, MS. HOLLIMAN. AND IF WE CAN LOOK AT PAGE 16. MR. PARLOFF, DO YOU SEE ON PAGE 16 AN EXCERPT FROM THE THERANOS TEST MENU?
ROGER PARLOFF: YES.
MR. BOSTIC: AND THIS WAS PART OF THE PRESENTATION THAT YOU WENT THROUGH WITH MS. HOLMES?
ROGER PARLOFF: YES.
MR. BOSTIC: LET'S LOOK AT THE FOLLOWING PAGE, PAGE 17. IT LOOKS LIKE HERE BEGINS AN ALPHABETICAL LIST OF THERANOS'S TEST MENU; IS THAT CORRECT?
ROGER PARLOFF: YES.
MR. BOSTIC: AND LET'S LOOK AT THE FOLLOWING PAGE, PAGE 18. WHEN YOU WERE TALKING ABOUT THE TESTS THAT WERE ON THE WEBSITE, WERE THESE SOME OF THE TESTS THAT WERE INCLUDED? WERE YOU TALKING ABOUT THE THERANOS TEST MENU AT THE TIME?
ROGER PARLOFF: YES.
MR. BOSTIC: ON THIS PAGE, PAGE 18, LET'S ZOOM IN, IF WE CAN, ON THE LEFT SIDE ON THE ENTRY FOR CBC, OR COMPLETE BLOOD COUNT. MR. PARLOFF, DO YOU SEE THAT THIS LIST INCLUDES CBC AUTO DIFF WITH REFLEX AND ALSO CBC WITH NO DIFF?
ROGER PARLOFF: YES, YES.
MR. BOSTIC: DID MS. HOLMES EVER TELL YOU THAT THE THERANOS BUILT ANALYZER DIDN'T HAVE THE PARTS NECESSARY TO RUN A CBC TEST?
MR. BOSTIC: I WANT TO LOOK BRIEFLY AT YOUR ARTICLE, WHICH IS EXHIBIT 1776. MS. HOLLIMAN, LET'S BRING THAT UP. IF WE CAN GO TO PAGE 5 OF THE EXHIBIT. ZOOM IN ON THE BOTTOM PARAGRAPH, PLEASE. MR. PARLOFF, IS THIS TEXT FROM YOUR JUNE 2014 ARTICLE IN "FORTUNE"?
ROGER PARLOFF: YES.
MR. BOSTIC: AND IT READS HERE, "THERANOS RUNS WHAT'S CALLED A HIGH-COMPLEXITY LABORATORY, CERTIFIED BY THE FEDERAL CENTERS FOR MEDICARE AND MEDICAID SERVICES." THE NEXT SENTENCE SAYS, "IT CURRENTLY OFFERS MORE THAN 200 -- AND IS RAMPING UP TO OFFER MORE THAN 1,000 -- OF THE MOST COMMONLY ORDERED BLOOD DIAGNOSTIC TESTS ALL WITHOUT THE NEED FOR A SYRINGE." DO YOU SEE THAT?
ROGER PARLOFF: YES.
MR. BOSTIC: IS THAT CONSISTENT WITH WHAT MS. HOLMES TOLD YOU DURING YOUR CONVERSATIONS WITH HER?
ROGER PARLOFF: YES.
MR. BOSTIC: LET'S LOOK AT THE FOLLOWING PAGE CONTINUING ON THAT SAME ARTICLE. THE FOLLOWING TEXT AT THE TOP OF THE PAGE READS, "THERANOS'S TESTS CAN BE PERFORMED ON JUST A FEW DROPS OF BLOOD, OR ABOUT 1/100TH TO 1/1,000TH OF THE AMOUNT THAT WOULD ORDINARILY BE REQUIRED - AN EXTRAORDINARILY POTENTIAL BOON TO FREQUENTLY TESTED HOSPITAL PATIENTS OR" PATIENTS IN OTHER CATEGORIES. DO YOU SEE THAT?
ROGER PARLOFF: YES.
MR. BOSTIC: WAS THAT CONSISTENT WITH WHAT MS. HOLMES TOLD YOU DURING YOUR CONVERSATIONS?
ROGER PARLOFF: YES.
MR. BOSTIC: I WANT TO TALK NEXT ABOUT DISCUSSIONS THAT YOU HAD WITH MS. HOLMES ABOUT THE ACCURACY OR PRECISION ABOUT THE THERANOS TESTS. DO YOU RECALL DISCUSSIONS ABOUT THAT TOPIC?
ROGER PARLOFF: YES.
MR. BOSTIC: LET'S GO TO EXHIBIT 3404, BACK TO THE PRESENTATION, AND LET'S LOOK AT PAGE 20.
ROGER PARLOFF: I'M SORRY, WHICH EXHIBIT?
MR. BOSTIC: THIS IS 3404, AND IT WILL BE UP ON THE SCREEN. DO YOU SEE A SLIDE IN THIS PRESENTATION THAT YOU RECEIVED THAT READS, "A NEW STANDARD IN QUALITY"?
ROGER PARLOFF: YES.
MR. BOSTIC: AND UNDERNEATH THAT THERE'S TEXT IN GREEN THAT SAYS, "THE HIGHEST LEVELS OF ACCURACY." DO YOU SEE THAT?
ROGER PARLOFF: YES.
MR. BOSTIC: AND THE EXPLANATION BELOW THAT GRAPHIC ABOUT A LOW COEFFICIENT OF VARIATION READS, "BY SYSTEMATICALLY CONTROLLING AND STANDARDIZING OUR PROCESSES, THERANOS OFFERS TESTS WITH THE HIGHEST LEVELS OF ACCURACY." DO YOU SEE THAT?
ROGER PARLOFF: YES.
MR. BOSTIC: AND WAS THAT CONSISTENT WITH REPRESENTATIONS THAT MS. HOLMES MADE TO YOU DURING YOUR CONVERSATIONS?
ROGER PARLOFF: YES.
MR. BOSTIC: DID YOU HAVE A CONVERSATION WITH MS. HOLMES ON APRIL 8TH, 2014 THAT YOU RECORDED?
ROGER PARLOFF: YES.
MR. BOSTIC: AND WAS THIS TOPIC DISCUSSED DURING THAT CONVERSATION?
ROGER PARLOFF: I WOULD ASSUME SO.
MR. BOSTIC: YOUR HONOR, THE GOVERNMENT OFFERS EXHIBIT 5475A, WHICH IS, AS THE DEFENSE NOTES, A CLIP FROM APRIL 8TH, 2014, APPROXIMATELY TWO MINUTES LONG.
MR. CLINE: NO OBJECTION.
JUDGE DAVILA: IT'S ADMITTED, AND IT MAY BE PLAYED. LADIES AND GENTLEMEN, THIS IS ANOTHER RECORDING. THERE WILL NOT BE A TRANSCRIPT, SO PLEASE LISTEN CLOSELY TO THIS RECORDING. IT'S ADMITTED, AND IT MAY BE PLAYED NOW.
(GOVERNMENT'S EXHIBIT 5475A WAS RECEIVED IN EVIDENCE.)
BY MR. BOSTIC:
MR. BOSTIC: I THINK THAT LAST WORD WAS GOING TO BE ANALYSIS IT SOUNDED LIKE; IS THAT CORRECT?
ROGER PARLOFF: YEAH, UH-HUH.
MR. BOSTIC: WE JUST HEARD MS. HOLMES MAKE SOME STATEMENTS ABOUT THE RELATIONSHIP BETWEEN AUTOMATION AND ACCURACY. DO YOU RECALL THAT DISCUSSION?
ROGER PARLOFF: YEAH.
MR. BOSTIC: DID MS. HOLMES, IN YOUR CONVERSATIONS WITH HER, EVER TELL YOU ABOUT THE MANUAL OR NONAUTOMATIC STEPS THAT HAD TO BE PERFORMED WHEN RUNNING A BLOOD SAMPLE ON THE THERANOS ANALYZER?
MR. BOSTIC: FOR EXAMPLE, WERE YOU TOLD THAT SAMPLES FREQUENTLY OR ALWAYS HAD TO BE DILUTED USING A DIFFERENT DEVICE BEFORE THEY WERE PLACED INTO THE THERANOS ANALYZER?
MR. BOSTIC: DID MS. HOLMES EVER TELL YOU ABOUT ANY ACCURACY PROBLEMS OR RELIABILITY PROBLEMS EXPERIENCED IN CONNECTION WITH THE THERANOS ANALYZER?
MR. BOSTIC: SO FAR WE'VE BEEN LISTENING TO CONVERSATIONS BETWEEN YOU AND MS. HOLMES IN 2014. DID YOU CONTINUE TO HAVE DISCUSSIONS WITH MS. HOLMES IN 2015?
ROGER PARLOFF: YES.
MR. BOSTIC: SO THIS WOULD HAVE BEEN AFTER YOUR JUNE 2014 ARTICLE, OF COURSE?
ROGER PARLOFF: YES.
MR. BOSTIC: GENERALLY SPEAKING, WHAT WAS THE PURPOSE OF CONTINUED CONVERSATIONS IN 2015?
ROGER PARLOFF: WELL, THERE WERE OTHER THINGS GOING ON WITH HER COMPANY, MULTIPLE OTHER THINGS THAT I WAS INTERESTED IN, AND I WAS CONTINUING TO FOLLOW THE COMPANY.
MR. BOSTIC: AND IN 2015, DID YOU CONTINUE TO HAVE CONVERSATIONS WITH MS. HOLMES ABOUT THE QUALITY OR ACCURACY OF THE THERANOS RESULTS?
ROGER PARLOFF: I THINK SO.
MR. BOSTIC: DID YOU HAVE A CONVERSATION WITH MS. HOLMES IN EARLY FEBRUARY 2015?
ROGER PARLOFF: YES.
MR. BOSTIC: YOUR HONOR, THE GOVERNMENT OFFERS EXHIBIT 5477A, WHICH IS APPROXIMATELY 40 SECONDS LONG.
MR. CLINE: NO OBJECTION.
JUDGE DAVILA: AND THERE'S NO TRANSCRIPT.
MR. BOSTIC: CORRECT, THERE'S NO TRANSCRIPT.
JUDGE DAVILA: IT'S ADMITTED.
(GOVERNMENT'S EXHIBIT 5477A WAS RECEIVED IN EVIDENCE.)
JUDGE DAVILA: LADIES AND GENTLEMEN, YOU WILL BE HEARING IN JUST A MOMENT THIS TAPE, THIS VIDEO, PARDON ME, AND PLEASE LISTEN CLOSELY. THERE'S NO TRANSCRIPT THAT FOLLOWS IT. IT MAY BE PLAYED NOW.
(AUDIO RECORDING PLAYED OFF THE RECORD.)
BY MR. BOSTIC:
MR. BOSTIC: MR. PARLOFF, DO YOU RECOGNIZE THAT AUDIO AS A RECORDING OF A CONVERSATION THAT YOU HAD WITH MS. HOLMES IN FEBRUARY OF 2015?
ROGER PARLOFF: YES.
MR. BOSTIC: DID THE DEFENDANT TELL YOU THAT, A COUPLE MONTHS BEFORE THAT CONVERSATION, THERANOS'S PATHOLOGIST LAB DIRECTOR HAD LEFT THE COMPANY AFTER REPEATEDLY RAISING CONCERNS ABOUT THE ACCURACY OF THE THERANOS TESTS?
MR. BOSTIC: DID YOU ALSO HAVE CONVERSATIONS WITH MS. HOLMES ABOUT THE USE OF THERANOS TECHNOLOGY BY THE U.S. MILITARY?
ROGER PARLOFF: YES.
MR. BOSTIC: WAS THAT A TOPIC THAT CAME UP MULTIPLE TIMES?
ROGER PARLOFF: YES.
MR. BOSTIC: DO YOU RECALL IN EARLY APRIL 2014 MEETING WITH MS. HOLMES AT A RESTAURANT?
ROGER PARLOFF: YES.
MR. BOSTIC: AND DID THE TOPIC OF MILITARY INVOLVEMENT COME UP AT THAT TIME?
ROGER PARLOFF: YES.
MR. BOSTIC: YOUR HONOR, THE GOVERNMENT OFFERS EXHIBIT 5478A INTO EVIDENCE, AND PERMISSION TO PUBLISH, OR REQUEST PERMISSION TO PUBLISH A VERSION OF THAT AUDIO CLIP WITH ACCOMPANYING SUBTITLES.
MR. CLINE: NO OBJECTION. I HAVE IT ON MY LITTLE CHART HERE, BUT IT'S 5478A2. I'M NOT SURE WHETHER THAT MAKES ANY DIFFERENCE.
MR. BOSTIC: I THINK WE'RE TALKING ABOUT THE SAME CLIP.
MR. CLINE: ALL RIGHT.
MR. BOSTIC: A2 FOR THE RECORD, YOUR HONOR. THANK YOU.
JUDGE DAVILA: ALL RIGHT.
MR. CLINE: NO OBJECTION. BUT THE SUBTITLES ARE HERE JUST TO AID THE JURY AND WILL NOT BE OFFERED.
MR. BOSTIC: I'M NOT OFFERING THE SUBTITLES, YOUR HONOR.
JUDGE DAVILA: ALL RIGHT. LADIES AND GENTLEMEN, IT IS ADMITTED. I'M SORRY, THE LENGTH OF THIS IS?
MR. BOSTIC: THIS ONE IS APPROXIMATELY THREE MINUTES LONG.
JUDGE DAVILA: THANK YOU. IT'S ADMITTED, AND IT MAY BE PLAYED.
(GOVERNMENT'S EXHIBIT 5478A2 WAS RECEIVED IN EVIDENCE.)
JUDGE DAVILA: LADIES AND GENTLEMEN, YOU'RE ABOUT TO HEAR ANOTHER CLIP, APPROXIMATELY THREE MINUTES LONG. I'M INFORMED THERE'S A SUBTITLE. WILL THAT BE SHOWN ON OUR MONITORS THEN?
MR. BOSTIC: IT WILL BE, YOUR HONOR, ON THE BOTTOM OF THE SCREEN.
JUDGE DAVILA: ALL RIGHT. THANK YOU. THAT WILL HAVE A CONCURRENT TRANSCRIPT. WHAT IS IN EVIDENCE, LADIES AND GENTLEMEN, IS THE RECORDING, NOT THE TRANSCRIPT. SO WHAT YOU HEAR, WHAT YOU HEAR IS WHAT IS IN EVIDENCE. IF YOU WHAT YOU HEAR IS DIFFERENT THAN THE TRANSCRIPT, IF YOU'RE READING THE TRANSCRIPT, WHAT YOU HEAR IS WHAT IS IN EVIDENCE, NOT WHAT IS IN THE TRANSCRIPT. THE TRANSCRIPT IS ONLY PROVIDED AS AN AID TO YOU AS YOU LISTEN. BUT, PLEASE, THE AUDIO PORTION OF THIS RECORDING IS WHAT CONTROLS, NOT THE TRANSCRIPT. WITH THAT, IT'S ADMITTED, AND IT MAY BE PLAYED.
MR. BOSTIC: THANK YOU, YOUR HONOR.
(AUDIO RECORDING PLAYED OFF THE RECORD.)
BY MR. BOSTIC:
MR. BOSTIC: OKAY. MR. PARLOFF, WERE YOU ABLE TO HEAR THE AUDIO IN THAT CLIP?
ROGER PARLOFF: YEAH, YES.
MR. BOSTIC: AND THAT CLIP BEGAN WITH A CONVERSATION ABOUT WORK FOR PHARMACEUTICAL COMPANIES AND FOREIGN GOVERNMENTS. DO YOU RECALL THAT?
ROGER PARLOFF: YES.
MR. BOSTIC: AND AT THE END YOU ASKED A QUESTION ABOUT WHETHER THE DEVICES IN THERANOS'S CENTRAL LAB COULD BE PLACED OUT IN THE FIELD WHEN, I THINK SHE SAID WHEN WE WERE FIGHTING IN IRAQ. DO YOU RECALL THAT?
ROGER PARLOFF: YES.
MR. BOSTIC: AND HER ANSWER WAS THAT YES, THAT COULD BE DONE?
ROGER PARLOFF: YEAH.
MR. BOSTIC: AND THAT CONVERSATION WAS IN A PUBLIC PLACE; IS THAT CORRECT?
ROGER PARLOFF: YES.
MR. BOSTIC: AND AS WITH ALL OF THE RECORDED CONVERSATIONS, DID MS. HOLMES KNOW THAT YOU WERE RECORDING THAT CONVERSATION?
ROGER PARLOFF: YES.
MR. BOSTIC: BEFORE YOU PUBLISHED YOUR JUNE 2014 ARTICLE IN "FORTUNE," DID THAT TOPIC COME UP AGAIN IN A DIFFERENT SETTING?
ROGER PARLOFF: YES.
MR. BOSTIC: AND WHAT ELSE DO YOU RECALL THE DEFENDANT SAYING ABOUT WHETHER THE THERANOS TECHNOLOGY WAS BEING USED BY THE MILITARY?
ROGER PARLOFF: AT SOME POINT SHE DID SAY THAT, AND I WAS NOT SUPPOSED TO USE THIS IN THE PIECE, IT WAS VERY SENSITIVE, THAT IT HAD BEEN USED IN THE MILITARY -- BY THE MILITARY IN AFGHANISTAN.
MR. BOSTIC: DID SHE GO INTO DETAIL ABOUT THAT OR DID SHE LEAVE IT AT THAT LEVEL?
ROGER PARLOFF: AT THAT LEVEL.
MR. BOSTIC: AND BEFORE THE ARTICLE WAS PUBLISHED, SIMILARLY, DID DEFENDANT TELL YOU ANYTHING ABOUT WHETHER YOU COULD BE GIVEN INFORMATION ABOUT SPECIFIC DEPLOYMENTS OF THE THERANOS TECHNOLOGY BY THE MILITARY?
ROGER PARLOFF: SHE SAID, NO, I COULD NOT BE.
MR. BOSTIC: IN WHAT CONTEXT DID THAT COME UP, IF YOU RECALL?
ROGER PARLOFF: WELL, I WANTED TO INTERVIEW GENERAL MATTIS AND SHE WAS GOING TO MAKE AN INTRODUCTION AND SHE WAS GOING TO MAKE THAT HAPPEN, BUT SHE TOLD ME THAT GENERAL MATTIS COULD NOT DISCUSS ACTUAL DEPLOYMENTS IN AFGHANISTAN, AND THAT I SHOULD NOT EVEN ASK HIM ABOUT THEM.
MR. BOSTIC: I'D LIKE TO LOOK AT SOME LANGUAGE IN YOUR ARTICLE AGAIN, AND THAT'S EXHIBIT 1776. MS. HOLLIMAN, CAN WE BRING THAT UP. AND LET'S GO TO PAGE 10 IN THE ARTICLE AND ZOOM IN ON THE TOP PARAGRAPH, PLEASE. SO, MR. PARLOFF, HERE IN THE ARTICLE THIS BEGINS WITH A QUOTE FROM SOMEBODY FROM UCSF MEDICAL CENTER; IS THAT CORRECT?
ROGER PARLOFF: YEAH, YES.
MR. BOSTIC: AND THE SECOND SENTENCE HAS YOU WRITE, "THIS MAKES IT POSSIBLE TO IMAGINE ONE DAY PLACING HOLMES'S LABS RIGHT BY THE OPERATING ROOMS IN HOSPITALS OR IN MILITARY EVACUATION HELICOPTERS OR ON SHIPS AND SUBMARINES." AND THEN IT GOES ON. DO YOU SEE THAT?
ROGER PARLOFF: YES.
MR. BOSTIC: AND IN THE ARTICLE, MILITARY USE OF THE DEVICE IS MENTIONED AS SOMETHING THAT CAN BE IMAGINED; IS THAT CORRECT?
ROGER PARLOFF: THAT'S RIGHT.
MR. BOSTIC: IF MS. HOLMES HAD TOLD YOU THAT THE DEVICE WAS ACTUALLY BEING USED IN AFGHANISTAN, WHY DID YOU WRITE IT THIS WAY IN THE ARTICLE IN TERMS OF WHAT MIGHT HAPPEN IN THE FUTURE?
ROGER PARLOFF: SHE -- IT HAD TO BE COMPLETELY OFF THE RECORD. IT WAS SOME SORT OF VERY HIGHLY SENSITIVE SECRET INFORMATION, SO I WAS NOT -- SHE DID NOT WANT ME TO PUBLISH THAT. THIS WAS OBVIOUSLY HYPOTHETICAL, AND THERE WAS NOTHING WRONG WITH THAT.
MR. BOSTIC: AND JUST TO BE CLEAR, DID MS. HOLMES DESCRIBE IT TO YOU AS A HYPOTHETICAL, OR DID YOU CHOOSE TO WRITE IT IN A HYPOTHETICAL WAY TO COMPLY WITH HER WISHES?
ROGER PARLOFF: I CHOSE TO WRITE IT IN A HYPOTHETICAL WAY.
MR. BOSTIC: LET'S SHIFT GEARS AND TALK ABOUT DISCUSSIONS THAT YOU HAD WITH MS. HOLMES ABOUT THE COMPANY'S WORK WITH PHARMACEUTICAL COMPANIES. DO YOU RECALL THAT COMING UP?
ROGER PARLOFF: YES.
MR. BOSTIC: IN CONNECTION WITH THAT TOPIC, DID MS. HOLMES PROVIDE YOU WITH WRITTEN MATERIALS?
ROGER PARLOFF: YES.
MR. BOSTIC: I'D LIKE YOU TO LOOK AT TAB 5486 IN YOUR BINDER. YOUR HONOR, THE GOVERNMENT OFFERS 5486 PURSUANT TO STIPULATION.
MR. CLINE: NO OBJECTION.
JUDGE DAVILA: IT'S ADMITTED. IT MAY BE PUBLISHED.
(GOVERNMENT'S EXHIBIT 5486 WAS RECEIVED IN EVIDENCE.)
MR. BOSTIC: AND LET'S START BY ZOOMING IN ON THE TOP PART CAPTURING THE HEADING AND THE MESSAGE FROM MS. HOLMES.
MR. BOSTIC: MR. PARLOFF, DO YOU SEE AN EMAIL FROM MS. HOLMES TO YOU ON JUNE 1ST, 2014?
ROGER PARLOFF: YES.
MR. BOSTIC: AND SHE REFERENCES IN HER EMAIL, "PLEASE SEE ADDITIONAL FOLLOW UP FROM OUR CALLS BELOW." DO YOU SEE THAT?
ROGER PARLOFF: YES.
MR. BOSTIC: AND DURING THIS TIME PERIOD, WERE YOU IN REGULAR CONTACT WITH MS. HOLMES GAINING MORE INFORMATION FROM HER?
ROGER PARLOFF: YES.
MR. BOSTIC: LET'S ZOOM IN -- ACTUALLY ZOOM OUT AND THEN BACK IN ON THE MIDDLE OF THE PAGE. THERE'S A TOPIC THAT SAYS, "PHARMACEUTICAL COMPANY WORK." THANK YOU, MS. HOLLIMAN. DO YOU SEE THE SECOND TO THE TOP ENTRY THERE SAYS, "TOPIC: PHARMACEUTICAL COMPANY WORK." AND THEN MS. HOLMES WRITES, "I'VE ATTACHED CONFIDENTIAL REPORTS GENERATED IN SOME OF OUR EARLY PHARMACEUTICAL PROGRAMS." DO YOU SEE THAT?
ROGER PARLOFF: YES.
MR. BOSTIC: AND DO YOU RECALL RECEIVING DOCUMENTS FROM MS. HOLMES RELATING TO WORK THE COMPANY HAD PURPORTEDLY DONE FOR PHARMACEUTICAL COMPANIES?
ROGER PARLOFF: YES.
MR. BOSTIC: AND LET'S ZOOM IN AT THE TOP OF PAGE 1 AND LOOK AT THOSE ATTACHMENT NAMES. FIRST OF ALL, WHAT IS YOUR RECOLLECTION OF HOW IT CAME TO BE THAT MS. HOLMES WAS SENDING YOU THIS INFORMATION? DO YOU HAVE A MEMORY OF ASKING FOR IT, OR WAS THERE ANOTHER CIRCUMSTANCE?
ROGER PARLOFF: I THINK I DID ASK FOR IT. SHE HAD MENTIONED -- I BELIEVE SHE MENTIONED THESE, THAT SHE HAD DONE SOME OF -- THAT SHE HAD SOME VALIDATION STUDIES THAT WERE PERFORMED WITH SOME OF THE PHARMACEUTICAL COMPANIES, AND I BELIEVE I ASKED FOR THEM, YOU KNOW, AND YEAH.
MR. BOSTIC: THE ATTACHMENTS TO THIS EMAIL, LIKE THE PRESENTATION, WERE ALSO PASSWORD PROTECTED; IS THAT CORRECT?
ROGER PARLOFF: THAT'S RIGHT.
MR. BOSTIC: ARE YOU ABLE TO ACCESS THE ELECTRONIC VERSIONS OF THESE DOCUMENTS TODAY?
ROGER PARLOFF: NOT ANYMORE, NO.
MR. BOSTIC: OKAY. LET'S SEE IF WE CAN FIND COPIES OF THEM ELSEWHERE. FIRST, I WANT TO JUST DRAW YOUR ATTENTION TO TWO OF THESE FILES. DO YOU SEE THAT THE THIRD ONE DOWN IS TITLED, "PFIZER THERANOS SYSTEM VALIDATION FINAL REPORT - CONFIDENTIAL"?
ROGER PARLOFF: YES.
MR. BOSTIC: AND THE LAST ONE, THE FIFTH ONE, IS TITLED, "THERANOS MULTIPLEXED PANEL VALIDATION REPORT SCHERING-PLOUGH - CONFIDENTIAL"?
ROGER PARLOFF: YES.
MR. BOSTIC: AND KEEP THAT FINAL DOCUMENT IN MIND, AND LET'S BRING UP 1753. AND THIS IS ADMITTED, YOUR HONOR. MAY WE PUBLISH?
JUDGE DAVILA: YES.
BY MR. BOSTIC:
MR. BOSTIC: MR. PARLOFF, DO YOU SEE -- LET'S ZOOM IN ON THE TOP PART OF THIS EMAIL. DO YOU SEE AN EMAIL ON YOUR SCREEN FROM MS. HOLMES TO DANIEL EDLIN ON JUNE 1ST, 2014?
ROGER PARLOFF: YES.
MR. BOSTIC: AND THE SUBJECT LINE IN THE EMAIL IS "RE: ROGER PARLOFF - AGGREGATED ACTION ITEMS." DO YOU SEE THAT?
ROGER PARLOFF: UH-HUH, YES.
MR. BOSTIC: AND MS. HOLMES ATTACHES A FILE TO THIS EMAIL, PFIZER THERANOS SYSTEM VALIDATION FINAL REPORT.PDF?
ROGER PARLOFF: UH-HUH, YES.
MR. BOSTIC: AND LET'S LOOK AT THE ATTACHMENT, AND THAT'S GOING TO BE IN -- I'M SORRY, ON PAGE 7 OF THIS EXHIBIT. MR. PARLOFF, DO YOU RECOGNIZE THE DOCUMENT ON YOUR SCREEN NOW?
ROGER PARLOFF: YES.
MR. BOSTIC: AND WAS THIS THE REPORT, OR ONE OF THE REPORTS THAT MS. HOLMES SENT TO YOU WHEN YOU WERE PREPARING YOUR ARTICLE ON THE COMPANY?
ROGER PARLOFF: YES.
MR. BOSTIC: I'LL DRAW YOUR ATTENTION TO THE TWO LOGOS AT THE TOP OF THAT PAGE. DO YOU SEE THE PFIZER LOGO ON THE LEFT SIDE?
ROGER PARLOFF: YES.
MR. BOSTIC: AND THE THERANOS LOGO ON THE RIGHT?
ROGER PARLOFF: YES.
MR. BOSTIC: DID MS. HOLMES TELL YOU THAT THERANOS HAD GENERATED THE CONTENT OF THIS REPORT?
MR. BOSTIC: LET'S GO TO PAGE 32 OF THIS EXHIBIT. LET'S ZOOM IN ON THE TOP THIRD OF THE PAGE. DO YOU SEE ON PAGE 32 THERE ARE SOME CONCLUSIONS MAKING STATEMENTS ABOUT THE PERFORMANCE OF THE THERANOS SYSTEM?
ROGER PARLOFF: YES.
MR. BOSTIC: DID MS. HOLMES EVER TELL YOU THAT THESE CONCLUSIONS WERE NOT THE CONCLUSIONS OF PFIZER?
MR. BOSTIC: OKAY. LET'S GO BACK JUST FOR A MOMENT TO 5486. AND WHEN WE GET THERE LET'S ZOOM IN ON THE TOP HEADER AND THE ATTACHMENTS AGAIN. AND NOW, MR. PARLOFF, WE PREVIOUSLY NOTED THE BOTTOM ATTACHMENT, "THERANOS MULTIPLEXED PANEL VALIDATION REPORT SCHERING-PLOUGH - CONFIDENTIAL"?
ROGER PARLOFF: YES.
MR. BOSTIC: AND CAN YOU PLEASE TURN IN YOUR BINDER TO EXHIBIT 1752?
ROGER PARLOFF: YES.
MR. BOSTIC: DO YOU SEE AT 1752 ANOTHER EMAIL FROM MS. HOLMES TO DANIEL EDLIN ON JUNE 1ST, 2014?
ROGER PARLOFF: YES.
MR. BOSTIC: AND IS THE SUBJECT LINE OF THIS EMAIL THE SAME AS THE LAST ONE WE LOOKED AT, OR THE SAME AS 1753, WHICH IS "ROGER PARLOFF AGGREGATED ACTION ITEMS"?
ROGER PARLOFF: ACTUALLY -- I'M SORRY, WHERE ARE WE?
MR. BOSTIC: I'M SORRY. WE'RE AT 1752, WHICH SHOULD BE THE FIRST EXHIBIT IN YOUR BINDER.
ROGER PARLOFF: UH-HUH.
MR. BOSTIC: AND WE'RE JUST ON THE FIRST PAGE. IT'S NOT ON THE SCREEN.
ROGER PARLOFF: OH, IT'S NOT. I SEE.
MR. BOSTIC: I'M SORRY FOR THE CONFUSION. MS. HOLLIMAN, WE CAN -- ACTUALLY, LET'S LEAVE THAT UP. I'M SORRY. LET'S LEAVE THAT UP. AND, MR. PARLOFF, I'LL ASK YOU TO JUST LOOK AT THE PAPER COPY FOR A MOMENT.
ROGER PARLOFF: OH, OKAY.
MR. BOSTIC: SO YOU'RE LOOKING AT 1752? WE HAVE --
ROGER PARLOFF: YES, THE TOP, JUNE 1ST.
MR. BOSTIC: AND WE HAVE 5486 UP ON THE SCREEN. MR. PARLOFF, DO YOU SEE THAT WE HAVE THIS EMAIL FROM MS. HOLMES TO MR. EDLIN WITH YOUR NAME IN THE SUBJECT LINE AS AN ATTACHMENT?
ROGER PARLOFF: YES.
MR. BOSTIC: AND IS THAT ATTACHMENT NAMED SIMILARLY TO THE ATTACHMENT --
ROGER PARLOFF: OH, YES, YES.
MR. BOSTIC: -- IN THE EMAIL THAT IS ON YOUR SCREEN?
ROGER PARLOFF: YEAH.
MR. BOSTIC: YOUR HONOR, THE GOVERNMENT OFFERS 1752.
MR. CLINE: YOUR HONOR, WE OBJECT TO THE EMAIL AS HEARSAY. THERE'S AN ATTACHMENT TO THIS EMAIL, AND IF MR. PARLOFF CAN IDENTIFY THAT AS WHAT HE RECEIVED, WE WON'T OBJECT TO THE ATTACHMENT.
MR. BOSTIC: YOUR HONOR, THIS ISN'T HEARSAY. THIS IS AN EMAIL FROM THE DEFENDANT TO AN EMPLOYEE. IF THE DEFENSE'S CONCERNS ARE WITH THE CONTENT OF THE MESSAGES BELOW, WE CAN REDACT THAT. BUT I'LL NOTE THAT THEY'RE ALREADY IN EVIDENCE FROM 1753. THE ONLY NEW CONTENT HERE IS THE EMAIL FROM MS. HOLMES ATTACHING THE DOCUMENT.
JUDGE DAVILA: I DO SEE IT'S AN EMAIL FROM YOUR CLIENT, MR. CLINE. DO YOU WISH SOMETHING REDACTED FROM THIS?
MR. CLINE: THERE ARE SEVERAL ITEMS IN THIS, AND YOU CAN SEE THE EMAILS FROM, FROM MS. HOLMES, IT LOOKS LIKE THERE ARE ONE, TWO, THREE, THREE OF THOSE. I'M JUST LOOKING THROUGH THE DOCUMENT HERE. I THINK THERE ARE THREE THERE ON THE FIRST PAGE. NO OBJECTION TO THOSE. AND AGAIN, AS TO THE ATTACHMENT, IF MR. PARLOFF CAN IDENTIFY IT AS WHAT HE GOT, NO OBJECTION TO THAT.
JUDGE DAVILA: ALL RIGHT. DO YOU WANT TO LAY A FOUNDATION FOR THAT AFTER YOU --
MR. BOSTIC: I CAN IF THE COURT WOULD LIKE, YOUR HONOR. BUT I WILL JUST NOTE THAT THIS CONTENT, I BELIEVE, IS IDENTICAL TO THE CONTENT THAT IS ALREADY IN THE RECORD IN 1753.
JUDGE DAVILA: ALL RIGHT. THANK YOU. ALL RIGHT. THANK YOU, MR. CLINE. I'LL OVERRULE THE OBJECTION. THIS IS ADMITTED. AND YOU'LL LAY A FOUNDATION AS TO THE ATTACHMENT AS A PRELIMINARY MATTER.
MR. BOSTIC: YES, YOUR HONOR. THANK YOU.
JUDGE DAVILA: THANK YOU.
(GOVERNMENT'S EXHIBIT 1752 WAS RECEIVED IN EVIDENCE.)
MR. BOSTIC: MAY WE PUBLISH?
JUDGE DAVILA: YES.
BY MR. BOSTIC:
MR. BOSTIC: LET'S BRING UP 1752. MR. PARLOFF, YOU'LL RECALL A MINUTE AGO WE LOOKED AT AN EMAIL FROM MS. HOLMES TO MR. EDLIN SENDING HIM THE PFIZER VALIDATION REPORT. DO YOU RECALL THAT?
ROGER PARLOFF: YES.
MR. BOSTIC: AND NOW WE'RE LOOKING AT AN EMAIL FROM MS. HOLMES TO MR. EDLIN AT THAT SAME TIME SENDING THE SCHERING-PLOUGH VALIDATION REPORT; IS THAT CORRECT?
ROGER PARLOFF: YES.
MR. BOSTIC: LET'S GO TO PAGE 7 OF THIS EXHIBIT. ON PAGE 7 OF THE EXHIBIT, DO YOU SEE THE SCHERING-PLOUGH REPORT THAT MS. HOLMES PROVIDED YOU ON THIS SAME DATE, JUNE 1ST, 2014?
ROGER PARLOFF: YES.
MR. BOSTIC: AND AGAIN, I'LL DRAW YOUR ATTENTION TO THE WORDS AND THE LOGOS AT THE TOP OF THE PAGE. DO YOU SEE THE SCHERING-PLOUGH LOGO ON THE UPPER LEFT?
ROGER PARLOFF: YES.
MR. BOSTIC: AND THE THERANOS IN THE UPPER RIGHT?
ROGER PARLOFF: YES.
MR. BOSTIC: AND DID MS. HOLMES EVER TELL YOU THAT THERANOS CREATED THIS DOCUMENT?
MR. BOSTIC: LET'S TURN TO PAGE 24 OF THE EXHIBIT. LET'S ZOOM IN ON THE TEXT. MR. PARLOFF, DO YOU SEE UNDER CONCLUSIONS THERE ARE SOME FAVORABLE CONCLUSIONS, IN OTHER WORDS, SOME PRAISE ABOUT THERANOS'S PERFORMANCE?
ROGER PARLOFF: YES.
MR. BOSTIC: DID MS. HOLMES EVER TELL YOU THAT THIS PRAISE WAS GENERATED BY THERANOS ITSELF?
MR. BOSTIC: BEFORE YOU PUBLISHED YOUR ARTICLE IN JUNE 2014, DID MS. HOLMES TELL YOU WHETHER THERANOS WAS STILL ACTIVELY INVOLVED IN WORK WITH PHARMACEUTICAL COMPANIES?
ROGER PARLOFF: YES.
MR. BOSTIC: AND WHAT DID SHE SAY ABOUT THAT?
ROGER PARLOFF: SHE SAID THEY WERE.
MR. BOSTIC: AND WAS THAT UP THROUGH THE PRESENT DAY IN 2014?
ROGER PARLOFF: YES.
MR. BOSTIC: LET'S TALK NEXT ABOUT CONVERSATIONS THAT YOU HAD WITH MS. HOLMES ABOUT THE DEVICE ITSELF AND THE USE OF VENIPUNCTURE BY THE COMPANY. DO YOU HAVE THOSE CONVERSATIONS IN MIND?
ROGER PARLOFF: YES.
MR. BOSTIC: WAS THAT A TOPIC THAT CAME UP IN MULTIPLE DISCUSSIONS WITH MS. HOLMES?
ROGER PARLOFF: YES.
MR. BOSTIC: AND IN YOUR DISCUSSIONS WITH MS. HOLMES, DID YOU ASK HER QUESTIONS ABOUT WHAT DEVICES THERANOS USED TO RUN TESTS ON PATIENT SAMPLES?
ROGER PARLOFF: YES.
MR. BOSTIC: DID YOU HAVE A CONVERSATION WITH MS. HOLMES ON APRIL 10TH, 2014 WHERE THAT TOPIC MIGHT HAVE COME UP?
ROGER PARLOFF: YES.
MR. BOSTIC: YOUR HONOR, THE GOVERNMENT OFFERS EXHIBIT 5480A AT THIS TIME. IT'S APPROXIMATELY A MINUTE AND 40 SECONDS LONG.
MR. CLINE: NO OBJECTION.
JUDGE DAVILA: IT'S ADMITTED. IT WILL BE PLAYED. LADIES AND GENTLEMEN, PLEASE LISTEN CLOSELY. THERE'S NO TRANSCRIPT FOR THIS AUDIO RECORDING. IT'S ADMITTED, AND IT NOW MAY BE PLAYED.
(GOVERNMENT'S EXHIBIT 5480A WAS RECEIVED IN EVIDENCE.)
(AUDIO RECORDING PLAYED OFF THE RECORD.)
BY MR. BOSTIC:
MR. BOSTIC: MR. PARLOFF, DID YOU HEAR MS. HOLMES TALK ABOUT LARGE MACHINES AT OTHER LABS, WHICH WERE VERY BIG AND WHICH TAKE UP A HUGE FOOTPRINT?
ROGER PARLOFF: YES.
MR. BOSTIC: DID THE DEFENDANT EVER TELL YOU THAT THERANOS ALSO HAD LARGE CONVENTIONAL MACHINES BECAUSE ITS SMALL ANALYZER COULDN'T RUN MOST OF THE TESTS IT WAS OFFERING?
MR. BOSTIC: IN THAT CLIP, YOU TALK ABOUT THE USE OF DEVICES AND THEN YOU ASK, "CAN I SAY THAT?" DO YOU RECALL ASKING THAT?
ROGER PARLOFF: YES.
MR. BOSTIC: AND WHY DO YOU ASK MS. HOLMES WHAT YOU COULD SAY?
ROGER PARLOFF: SHE WAS VERY CONCERNED ABOUT TRADE SECRETS AND PROTECTING HER INTELLECTUAL PROPERTY, WHICH I THOUGHT WAS A VERY LEGITIMATE CONCERN. AND SO I WAS LETTING HER SPEAK FREELY ABOUT WHAT HER DEVICES COULD DO, AND THEN I WOULD COME BACK TO HER LATER AND TELL HER WHAT PARTS I WANTED TO USE, AND I WOULD SEE IF IT WAS OKAY IN TERMS OF PROTECTING HER INTELLECTUAL PROPERTY.
MR. BOSTIC: SO, IN OTHER WORDS, YOU HAD AGREED WITH MS. HOLMES THAT SHE COULD GIVE YOU INFORMATION, BUT THAT YOU WOULD CHECK WITH HER BEFORE DISCLOSING THAT INFORMATION?
ROGER PARLOFF: YEAH. I WAS GETTING IT ON BACKGROUND OR -- AND WOULD -- YEAH, AND WOULD GET HER APPROVAL BEFORE -- SO THAT I DIDN'T COMPROMISE HER INTELLECTUAL PROPERTY RIGHTS.
MR. BOSTIC: IS THAT SOMETHING THAT IS A PRACTICE OF YOURS WHEN IT COMES TO DISCUSSING POTENTIALLY SENSITIVE TOPICS WITH SUBJECTS?
ROGER PARLOFF: YES.
MR. BOSTIC: WHY DO YOU DO IT THAT WAY INSTEAD OF JUST HAVING THE SUBJECT SENSOR THEMSELVES AND ONLY TELL YOU THINGS THAT THEY WANT IN THE ARTICLE?
ROGER PARLOFF: FIRST, I WOULD RATHER GET THE MOST INFORMATION I CAN SO THAT I GET THE BIG PICTURE. AND IF PEOPLE ARE TOO COWED BY WORRYING ABOUT DOTTING EVERY T AND -- I MEAN DOTTING EVERY I AND CROSSING EVERY T, THEN THEY'RE RELUCTANT TO SPEAK. I SHOULD SAY THIS WAS NOT -- WELL, OKAY. YEAH.
MR. BOSTIC: LET'S GO TO YOUR ARTICLE FOR A MOMENT, HAVING LISTENED TO THAT CLIP. SO LET'S GO BACK TO 1776, AND PAGE 9 IN THE EXHIBIT.
ROGER PARLOFF: PAGE?
MR. BOSTIC: PAGE 9. IT WILL SHOW UP ON THE SCREEN. WHATEVER IS EASIER. AND LET'S LOOK TOWARDS THE BOTTOM, THE SECOND TO THE LAST PARAGRAPH THAT STARTS, "IMPORTANTLY." IN THE ARTICLE YOU WRITE, "IMPORTANTLY, IT'S NOT JUST THE BLOOD DRAWS THAT ARE TINY. IT'S ALSO THE ANALYTICAL SYSTEMS THERANOS USES TO PERFORM THE TESTS." DO YOU SEE THAT?
ROGER PARLOFF: YES.
MR. BOSTIC: AND YOU WRITE "THEY," THE ANALYTICAL SYSTEMS, "TAKE UP A SMALL FRACTION OF THE FOOTPRINT REQUIRED BY A CONVENTIONAL LAB TODAY." IS THAT WHAT YOU WROTE?
ROGER PARLOFF: YES.
MR. BOSTIC: AND WAS THAT CONSISTENT WITH THE INFORMATION GIVEN TO YOU BY MS. HOLMES?
ROGER PARLOFF: YES.
MR. BOSTIC: DID THE DEFENDANT EVER COMPARE THERANOS TO QUEST IN TERMS OF BUYING TESTS FROM THIRD PARTIES?
ROGER PARLOFF: YES. SO SHE COMPARED IT TO ALL OTHER LABS, YEAH.
MR. BOSTIC: AND WHAT DID SHE SAY ABOUT THAT? WAS THERANOS THE SAME IN THAT WAY OR DIFFERENT?
ROGER PARLOFF: DIFFERENT. OTHER LABS BUY THEIR TESTS, WE MAKE ALL OF OURS.
MR. BOSTIC: YOU SPECIFICALLY REMEMBER MS. HOLMES SAYING THAT?
ROGER PARLOFF: YES.
MR. BOSTIC: AND DID SHE SAY THAT TO YOU BEFORE THE JUNE 2014 ARTICLE?
ROGER PARLOFF: YES. SHE SAID OTHER COMPANIES BUY THEIR TESTS FROM THIRD PARTIES, WE MAKE ALL OF OURS.
MR. BOSTIC: AND AGAIN, AT THAT POINT, OR AT ANY POINT IN 2014, DID MS. HOLMES DISCLOSE TO YOU THAT THERANOS WAS BUYING AND USING ANALYZERS FROM THIRD PARTIES?
MR. BOSTIC: IN YOUR CONVERSATIONS WITH MS. HOLMES, DID THE TOPIC OF VEIN DRAWS CONTINUE TO COME UP?
ROGER PARLOFF: THE TOPIC OF?
MR. BOSTIC: OF VEIN DRAWS CONTINUE TO COME UP?
ROGER PARLOFF: YES.
MR. BOSTIC: AND DID YOU ASK MS. HOLMES QUESTIONS ABOUT WHY THERANOS PERFORMED VENIPUNCTURE IN SOME CASES?
ROGER PARLOFF: YES.
MR. BOSTIC: YOUR HONOR, THE GOVERNMENT OFFERS EXHIBIT 5473B2, WHICH IS A CLIP LABELLED MAY 12TH, 2014, AND IT'S APPROXIMATELY FIVE MINUTES LONG.
MR. CLINE: NO OBJECTION.
JUDGE DAVILA: ALL RIGHT. THANK YOU. IT'S ADMITTED, AND IT WILL BE PLAYED.
(GOVERNMENT'S EXHIBIT 5473B2 WAS RECEIVED IN EVIDENCE.)
JUDGE DAVILA: AGAIN, LADIES AND GENTLEMEN, YOU WILL NOT HAVE A TRANSCRIPT OF THIS SO PLEASE LISTEN CLOSELY. THE RECORDING IS IN EVIDENCE, AND IT MAY NOW BE PLAYED.
(AUDIO RECORDING PLAYED OFF THE RECORD.)
BY MR. BOSTIC:
MR. BOSTIC: OKAY. MR. PARLOFF, DID YOU HEAR THE DISCUSSION ABOUT THE OCCASIONS WHEN THERANOS WOULD CONDUCT VENIPUNCTURE?
ROGER PARLOFF: YES.
MR. BOSTIC: AND MS. HOLMES MENTIONED A FEW REASONS. SHE MENTIONED SCALING, SHE MENTIONED VEIN DRAWN SAMPLES COLLECTED BY DOCTORS AND SENT IN, SHE MENTIONED THE GOAL OF SHOWING CORRELATION BETWEEN DIFFERENT KINDS OF SAMPLES. DO YOU RECALL THAT DISCUSSION?
ROGER PARLOFF: YEAH.
MR. BOSTIC: YOU ASKED MS. HOLMES WHETHER IT WAS A MATTER OF THE PLATFORM NOT BEING ABLE TO RUN A CERTAIN TEST; IS THAT CORRECT?
ROGER PARLOFF: YES.
MR. BOSTIC: AND SHE ANSWERED AGAIN IN TERMS OF VOLUME; IS THAT RIGHT?
ROGER PARLOFF: YES.
MR. BOSTIC: AT ANY POINT IN 2014, DID MS. HOLMES TELL YOU THAT THERANOS NEEDED TO USE VENIPUNCTURE BECAUSE THERE WERE MANY TESTS THAT ITS OWN TECHNOLOGY SIMPLY COULDN'T DO?
MR. BOSTIC: AT SOME POINT BEFORE YOU WROTE YOUR ARTICLE IN JUNE OF 2014, DID YOU ASK MS. HOLMES ABOUT VISITING A FUNCTIONING ARIZONA LAB BELONGING TO THERANOS?
ROGER PARLOFF: YES.
MR. BOSTIC: WHAT DID MS. HOLMES SAY ABOUT THAT, IF YOU RECALL?
ROGER PARLOFF: WELL, I WAS MISTAKEN. THE ARIZONA LAB WAS NOT OPERATIONAL YET. AND THEN WE SPOKE ABOUT -- I ASKED IF I COULD SEE THE CALIFORNIA LAB, AND SHE SAID THAT, IN ESSENCE, I ALREADY HAD. I MEAN, THAT IN ESSENCE I THINK SHE SAID, YEAH, YOU'VE SEEN IT. IT'S JUST A BANK OF THOSE DEVICES I SHOWED YOU, MEANING THE SMALL -- HER DEVICES, THE PROPRIETARY DEVICES ABOUT THE SIZE OF THE COMPUTER TOWER.
MR. BOSTIC: SO LET ME ASK YOU, WHEN YOU ASKED TO SEE THE LAB -- YOU PREVIOUSLY TESTIFIED THAT YOU HAD SEEN, IN FACT, THE R&D LAB?
ROGER PARLOFF: I HAD SEEN THE R&D. I WAS ASKING TO SEE THE COMMERCIAL LAB.
MR. BOSTIC: THE LAB WHERE PATIENT SAMPLES ARE ACTUALLY TESTED?
ROGER PARLOFF: THAT'S RIGHT. IN FACT, WHAT SHE SAID WAS --
MR. CLINE: FORGIVE ME, YOUR HONOR. I APOLOGIZE FOR INTERRUPTING. I THINK WE HAVE A RECORDING OF THIS CONVERSATION WHICH I IMAGINE THAT MR. BOSTIC IS ABOUT TO PLAY. MAYBE WE CAN HAVE MS. HOLMES'S ACTUAL WORDS INSTEAD OF MR. PARLOFF'S --
JUDGE DAVILA: WELL, THIS IS HIS WITNESS, AND THE WITNESS CAN SAY WHAT HE RECALLS, AND THEN, OF COURSE, THE AUDIO WILL TELL US WHAT WAS RECORDED. SO YOU CAN CONTINUE.
MR. BOSTIC: THANK YOU, YOUR HONOR.
MR. BOSTIC: MR. PARLOFF, LET ME JUST MAKE SURE THAT IT'S CLEAR WHAT YOU HAD PREVIOUSLY SEEN. YOU MENTIONED THAT MS. HOLMES SAID IT'S A BANK OF THE KINDS OF DEVICES YOU HAD PREVIOUSLY SEEN?
ROGER PARLOFF: UH-HUH, YEAH.
MR. BOSTIC: AND DESCRIBE FOR US JUST FOR THE RECORD WHAT YOU HAD SEEN IN THE PAST.
ROGER PARLOFF: SHE HAD SHOWN ME THIS R&D LAB AT HER HEADQUARTERS, AND I MEAN, IT WAS SEVEN YEARS AGO, BUT I WOULD SAY MAYBE TEN OF THESE DEVICES, MAYBE SLIGHTLY LESS, ON SHELVES OR WORK BENCHES. THEY WERE NOT IN OPERATION WHILE I WAS THERE, BUT YEAH, THEY ALL LOOKED PRETTY MUCH IDENTICAL.
MR. BOSTIC: YOUR HONOR, THE GOVERNMENT OFFERS EXHIBIT 5473C. THIS IS A RECORDING OF WHICH THE DEFENSE IS AWARE FROM MAY 12TH, 2014. IT'S APPROXIMATELY TEN MINUTES LONG -- OR EXCUSE ME, TWO MINUTES LONG.
MR. CLINE: NO OBJECTION.
JUDGE DAVILA: IT'S ADMITTED, AND IT WILL BE PLAYED.
(GOVERNMENT'S EXHIBIT 5473C WAS RECEIVED IN EVIDENCE.)
JUDGE DAVILA: AGAIN, LADIES AND GENTLEMEN, THERE'S NO TRANSCRIPT, SO PLEASE DO LISTEN CLOSELY. IT CAN BE PLAYED.
(AUDIO RECORDING PLAYED OFF THE RECORD.)
BY MR. BOSTIC:
MR. BOSTIC: MR. PARLOFF, DID YOU HEAR MS. HOLMES DESCRIBE THE LAB FOR YOU AS A BANK OF THE SMALL THERANOS ANALYZERS THAT YOU HAD SEEN BEFORE?
ROGER PARLOFF: YES.
MR. BOSTIC: DURING THAT DESCRIPTION, OR AT ANY POINT BEFORE YOUR JUNE 2014 ARTICLE, DID SHE TELL YOU THAT THE LAB ALSO INCLUDED LARGE COMMERCIALLY AVAILABLE THIRD PARTY DEVICES?
MR. BOSTIC: YOUR HONOR, I HAVE SOME MORE MATERIAL WITH THIS WITNESS, BUT I'M NOT SURE IF THE COURT WANTED TO TAKE A BREAK AT 1:30 OR AT ANOTHER TIME.
JUDGE DAVILA: LET'S BREAK NOW. WE'LL TAKE OUR AFTERNOON BREAK. LADIES AND GENTLEMEN, THIS IS 30 MINUTES, 30 MINUTES. WE'LL TAKE A 30 MINUTE BREAK. YOU CAN STAND DOWN, SIR. AND WE'LL RESUME AGAIN IN 30 MINUTES.
(RECESS FROM 1:32 P.M. UNTIL 2:13 P.M.)
JUDGE DAVILA: PLEASE BE SEATED. WE'RE BACK ON THE RECORD. ALL PARTIES PREVIOUSLY PRESENT ARE PRESENT ONCE AGAIN. OUR JURY IS PRESENT. MR. PARLOFF IS ON THE STAND. MR. BOSTIC, YOU'D LIKE TO CONTINUE?
MR. BOSTIC: THANK YOU, YOUR HONOR. FOR THE RECORD, CAN I CONFIRM WITH THE COURT THAT 1752 WAS ADMITTED INTO EVIDENCE?
JUDGE DAVILA: YES, OVER OBJECTION, YES.
MR. BOSTIC: THANK YOU, YOUR HONOR.
MR. BOSTIC: MR. PARLOFF, I'D LIKE TO CONTINUE OUR CONVERSATION ABOUT DISCUSSIONS YOU HAD WITH MS. HOLMES ABOUT WHAT THE THERANOS ANALYZER COULD DO. DO YOU RECALL THOSE DISCUSSIONS GENERALLY?
ROGER PARLOFF: YES.
MR. BOSTIC: BEFORE YOU PUBLISHED YOUR ARTICLE IN "FORTUNE" IN JUNE OF 2014, DID YOU HAVE DISCUSSIONS WITH THE DEFENDANT ABOUT WHETHER THERANOS WAS USING A SINGLE DEVICE FOR ITS TESTS OR MULTIPLE DEVICES?
ROGER PARLOFF: YES.
MR. BOSTIC: OKAY. AND WAS THAT A TOPIC THAT CAME UP MULTIPLE TIMES?
ROGER PARLOFF: YES.
MR. BOSTIC: AND DID YOU HAVE A CONVERSATION WITH MS. HOLMES ON MAY 12TH THAT INCLUDED SOME DISCUSSION ON THAT TOPIC?
ROGER PARLOFF: THAT SOUNDS RIGHT.
MR. BOSTIC: YOUR HONOR, THE GOVERNMENT OFFERS EXHIBIT 5473D2. THIS WAS A CLIP THAT THE DEFENSE IS AWARE OF FROM MAY 12TH, 2014. IT'S APPROXIMATELY TWO MINUTES LONG.
MR. CLINE: NO OBJECTION.
JUDGE DAVILA: ALL RIGHT. IT'S ADMITTED, AND IT WILL BE PLAYED. AGAIN, LADIES AND GENTLEMEN, PLEASE PAY ATTENTION. THERE'S NO TRANSCRIPT FOR THIS TAPE. AND IT MAY BE PLAYED NOW.
(GOVERNMENT'S EXHIBIT 5473D2 WAS RECEIVED IN EVIDENCE.)
MR. BOSTIC: THANK YOU. MS. HOLLIMAN -- MY APOLOGIES. BEFORE WE PRESS PLAY ON THAT.
MR. BOSTIC: MR. PARLOFF, DO YOU RECALL MS. HOLMES GIVING YOU DIRECTION OR INPUT ABOUT WHETHER TO DESCRIBE THE THERANOS ANALYZER AS A DEVICE OR MULTIPLE DEVICES?
ROGER PARLOFF: YES.
MR. BOSTIC: OKAY.
ROGER PARLOFF: AND GENERALLY, SHE WANTED ME TO USE THE PLURAL.
MR. BOSTIC: ALL RIGHT. LET'S LISTEN TO EXHIBIT 5473D2 NOW.
(AUDIO RECORDING PLAYED OFF THE RECORD.)
BY MR. BOSTIC:
MR. BOSTIC: MR. PARLOFF, DID YOU HEAR THE DEFENDANT REFERENCE THE FACT THAT WE HAVE A SINGLE DEVICE THAT CAN PERFORM ANY TEST AND THAT BEING A BIG DEAL?
ROGER PARLOFF: YEAH.
MR. BOSTIC: WAS THAT THE ONLY TIME IN YOUR CONVERSATIONS WITH MS. HOLMES THAT SHE MADE THAT CLAIM, OR WAS THAT GENERALLY CONSISTENT WITH WHAT SHE TOLD YOU ABOUT WHAT THE ANALYZER COULD DO?
ROGER PARLOFF: THAT WAS CONSISTENT.
MR. BOSTIC: DID YOU EVER ASK MS. HOLMES DIRECTLY WHETHER THERANOS HAD THIRD PARTY ANALYZERS FROM COMPANIES LIKE SIEMENS?
ROGER PARLOFF: YES.
MR. BOSTIC: AND WHAT DID YOU ASK HER ABOUT THAT?
ROGER PARLOFF: I ASKED TWO QUESTIONS. ONE RELATED TO WAS SHE -- DID SHE EVER USE THEM WHEN SHE COULDN'T SIMPLY DO HER OWN TESTS, I MEAN, SHE COULDN'T DO THE TEST ON HER OWN PLATFORM, AND ALSO DID SHE USE THEM -- BECAUSE SHE HAD MENTIONED WHEN SHE DID HAVE TO DO VENIPUNCTURE, IT SOMETIMES HAD SOMETHING TO DO WITH SCALING. I DIDN'T UNDERSTAND THE WHOLE ANSWER, BUT IT HAD SOMETHING TO DO WITH SCALING. SO IT CROSSED MY MIND, WAS SHE USING THESE LARGE -- BECAUSE THESE, THESE LARGE THIRD PARTY ANALYZERS TO SCALE, TO GET UP TO SCALE BECAUSE, BECAUSE THEY ARE LARGE AND HAVE -- CAN DO ENORMOUS VOLUME. SO I ASKED -- AND YOU NEED TO KNOW ONE OTHER THING, YOU MAY KNOW IT ALREADY, BUT THESE THIRD PARTY MACHINES ARE MANUFACTURED BY COMPANIES LIKE SIEMENS, WHICH IS A GERMAN COMPANY, AND BECKMAN COULTER, AND OLYMPUS. SO THE QUESTION I ASKED WAS, JUST TO BE CLEAR, YOU DON'T KEEP A SIEMENS ANALYZER, FOR INSTANCE, ON HAND FOR OVERFLOW, DO YOU? AND SHE SAID, HUH-UH, OR HUM-UM. IT WAS A NONVERBAL RESPONSE, BUT IT MEANT CORRECT, WE DON'T DO THAT. AND THEN I ASKED A SECOND QUESTION WHICH WAS RELATED, BUT SLIGHTLY DIFFERENT. AND IT'S NOT A MATTER OF, FOR INSTANCE, WHEN WE CAN'T DO THE TEST ON OUR OWN PLATFORM, WE NEED TO DO IT ON A SIEMENS ANALYZER. AND SHE SAID, HUH-UH, MEANING CORRECT, WE DON'T DO THAT. SO --
MR. BOSTIC: FINISH YOUR ANSWER.
ROGER PARLOFF: SO THOSE WERE DIRECT QUESTIONS AND DIRECT ANSWERS, AND THEY SORT OF REINFORCED THE ANSWERS SHE HAD GIVEN ME BEFORE ABOUT THAT ISSUE AND WHEN SHE SAID --
MR. CLINE: EXCUSE ME, YOUR HONOR. I OBJECT. WE'VE HAD THE QUESTION AND THE ANSWER, AND NOW --
JUDGE DAVILA: YOU CAN ASK ANOTHER QUESTION, MR. BOSTIC.
MR. BOSTIC: THANK YOU.
MR. BOSTIC: MR. PARLOFF, LET ME ASK YOU, THE EXCHANGE THAT YOU JUST REFERRED TO, WAS THAT DURING ONE OF THE CONVERSATIONS THAT YOU WERE AUDIO RECORDING, OR WAS THAT DURING ONE OF THE CONVERSATIONS THAT YOU REFERENCED EARLIER WHERE THERE WAS NO AUDIO RECORDING?
ROGER PARLOFF: THERE WAS NO AUDIO RECORDING, BUT I HAD NOTES.
MR. BOSTIC: OKAY. AND WAS THAT CONVERSATION WHERE YOU ASKED MS. HOLMES THOSE DIRECT QUESTIONS AND GOT NEGATIVE ANSWERS IN RESPONSE, WAS THAT EXCHANGE BEFORE YOU WROTE YOUR JUNE 2014 ARTICLE IN "FORTUNE"?
ROGER PARLOFF: YES.
MR. BOSTIC: LET ME SHOW YOU ONE LINE IN THAT ARTICLE, SO LET ME GO BACK TO 1776. MS. HOLLIMAN, IF YOU COULD PULL THAT UP AND GO TO PAGE 11, PLEASE. ABOUT A THIRD OF THE WAY OR 40 PERCENT OF THE WAY DOWN, THERE'S A PARAGRAPH THAT BEGINS, "THERANOS, WHICH DOES NOT." MR. PARLOFF, DO YOU SEE IN YOUR ARTICLE YOU WROTE "THERANOS, WHICH DOES NOT BUY ANY ANALYZERS FROM THIRD PARTIES, IS THEREFORE IN A UNIQUE POSITION"? DO YOU RECALL WRITING THAT?
ROGER PARLOFF: YES.
MR. BOSTIC: AND IS THAT CONSISTENT WITH WHAT MS. HOLMES TOLD YOU, INCLUDING THE STATEMENT THAT YOU'VE JUST RECOUNTED?
ROGER PARLOFF: YES.
MR. BOSTIC: WE CAN TAKE THAT DOWN. THANK YOU, MS. HOLLIMAN. IN YOUR CONVERSATIONS WITH MS. HOLMES ABOUT THE THERANOS DEVICES, DID SHE REGULARLY USE THE PHRASE ANALYTICAL SYSTEMS?
ROGER PARLOFF: YES.
MR. BOSTIC: AND DID YOU EVER GET AN EXPLANATION FROM HER AS TO WHAT SHE MEANT BY THAT?
ROGER PARLOFF: I NEVER UNDERSTOOD WHY SHE PREFERRED THAT TO DEVICE OR ANALYZER. I NEVER UNDERSTOOD THE DISTINCTION.
MR. BOSTIC: LET'S LISTEN TO A CLIP. THIS IS EXHIBIT 5474C. YOUR HONOR, I WOULD OFFER THAT EXHIBIT AT THIS TIME. THIS IS A CLIP DATED MAY 21ST, 2014, AND IT'S APPROXIMATELY 30 SECONDS LONG.
MR. CLINE: MAY I HAVE A MOMENT, YOUR HONOR?
JUDGE DAVILA: YES.
(DISCUSSION AMONGST DEFENSE COUNSEL OFF THE RECORD.)
JUDGE DAVILA: IT'S 5474C?
MR. BOSTIC: 5474C.
JUDGE DAVILA: THANK YOU.
MR. CLINE: MAY I CONSULT WITH COUNSEL?
JUDGE DAVILA: YES.
(DISCUSSION AMONGST COUNSEL OFF THE RECORD.)
MR. BOSTIC: WE'LL MOVE ON FROM THAT ONE AT THIS TIME.
MR. BOSTIC: MR. PARLOFF, DO YOU RECALL ASKING MS. HOLMES ABOUT THE TERM "EDISON" AT SOME POINT?
ROGER PARLOFF: YES.
MR. BOSTIC: AND DO YOU RECALL WHAT MS. HOLMES TOLD YOU, IF ANYTHING, ABOUT WHAT THAT TERM MEANT AT THERANOS?
ROGER PARLOFF: I'M PRETTY SURE SHE BROUGHT IT UP. I DON'T THINK I ASKED ABOUT IT. IT WAS A TERM THAT THEY NO LONGER, NO LONGER USED, BUT IT WAS THE TERM FOR THE -- SORT OF THE PROGENITOR OF THE DEVICES I WAS SEEING. IT WAS THE FIRST ITERATION. I WAS SEEING LATER ITERATIONS.
MR. BOSTIC: MS. HOLMES TOLD YOU THAT THE EDISON DEVICE WAS NO LONGER IN USE AT THERANOS?
ROGER PARLOFF: WELL, THE NAME WAS NO LONGER IN USE. I MEAN, WHAT WAS IN USE WAS A SUBSEQUENT ITERATION.
MR. BOSTIC: I'LL ASK YOU TO TURN TO EXHIBIT 5488 IN YOUR BINDER, PLEASE. YOUR HONOR, I OFFER 5488. I BELIEVE THE DEFENSE HAS STIPULATED.
MR. CLINE: NO OBJECTION.
JUDGE DAVILA: IT'S ADMITTED. IT MAY BE PUBLISHED.
(GOVERNMENT'S EXHIBIT 5488 WAS RECEIVED IN EVIDENCE.)
BY MR. BOSTIC:
MR. BOSTIC: AND LET'S ZOOM IN ON THE MIDDLE OF THE PAGE, PLEASE, THE MIDDLE THIRD. LET'S SEE IF WE CAN CAPTURE -- FIRST OF ALL, MR. PARLOFF, DO YOU SEE THAT THIS IS AN EMAIL MESSAGE FROM YOU -- I'M SORRY, FROM MS. HOLMES TO YOU ON JUNE 6TH, 2014?
ROGER PARLOFF: YES.
MR. BOSTIC: AND LET'S LOOK AT THE FIRST PART OF THE TEXT OF THAT EMAIL MESSAGE. FIRST OF ALL, CAN YOU TELL ME GENERALLY ABOUT THE PURPOSE OF THIS COMMUNICATION? AT THIS TIME IN EARLY JUNE 2014, WHY WERE YOU EMAILING BACK AND FORTH WITH MS. HOLMES WITH THIS SUBJECT LINE, ADDITIONAL FOLLOWUP ITEMS?
ROGER PARLOFF: WE WERE GETTING PRETTY CLOSE TO PUBLICATION. I MIGHT HAVE HAD A DRAFT. I PROBABLY HAD A DRAFT. I KNEW -- SO I WAS ASKING ABOUT WHETHER IT WAS OKAY TO INCLUDE CERTAIN THINGS OR WERE THEY -- THAT WE HAD DISCUSSED ON BACKGROUND.
MR. BOSTIC: IN CONNECTION WITH THAT PURPOSE, DID MS. HOLMES PROVIDE YOU WITH SOME INFORMATION ABOUT THIS TOPIC, "HOW TO DESCRIBE THE ANALYTICAL SYSTEMS"?
ROGER PARLOFF: YES.
MR. BOSTIC: AND THIS EMAIL FROM MS. HOLMES READS, "AS YOU KNOW, WE WANT TO GENERALLY KEEP THE FOCUS OFF THE HARDWARE. A WAY TO DO THIS IF YOU'RE REFERRING TO IT, THE AUTOMATION IN OUR LAB IS TO USE THE WORD ANALYZERS, WHICH IS LIKELY THE BEST WORD TO USE BESIDE ANALYTICAL SYSTEMS (RATHER THAN THE WORD DEVICE)." DO YOU SEE THAT?
ROGER PARLOFF: YES.
MR. BOSTIC: AND SHE SAYS, "AS YOU KNOW, ANALYTICAL SYSTEMS IS HOW WE DESCRIBE THEM." DO YOU SEE THAT?
ROGER PARLOFF: YES.
MR. BOSTIC: AND THEN IN THE NEXT LINE DOWN SHE TALKS ABOUT REFERENCING THE FDA FILING INITIATIVE AND REGISTRATION OF THE ANALYZER ON THE FDA WEBSITE. DO YOU SEE THAT?
ROGER PARLOFF: YES.
MR. BOSTIC: AND THEN SHE SAYS, "IN THAT CONTEXT, IT IS OK TO SAY THE ANALYTICAL SYSTEMS ARE ABOUT THE SIZE OF A DESKTOP COMPUTER (FOR REFERENCE OFF THE RECORD, THIS IS THE SIZE OF THE SYSTEM WE'RE STANDARDIZING AROUND FOR OUR NEXT WAVE OF PRODUCTION) IF CONTRASTING THE SIZE OF OUR LABORATORY FACILITY NEXT TO CONVENTIONAL LABORATORY FACILITIES." DO YOU SEE THAT?
ROGER PARLOFF: YES.
MR. BOSTIC: AND SO YOU MENTIONED THIS WAS GETTING PRETTY CLOSE TO THE TIME THAT THE ARTICLE WAS GOING TO BE PUBLISHED?
ROGER PARLOFF: YES.
MR. BOSTIC: AS THE CLOCK WAS WINDING DOWN, DID MS. HOLMES DISCLOSE TO YOU AT THIS POINT THAT THERANOS WAS RELYING ON LARGER ANALYZERS FOR MOST OR MANY OF ITS TESTS?
MR. BOSTIC: LET'S GO TO PAGE 2 OF THIS EXHIBIT AND ZOOM IN AT THE TOP OF THE PAGE UNDER THE TOPIC VENIPUNCTURE. AND, MR. PARLOFF, DO YOU SEE THAT MS. HOLMES ALSO PROVIDES SOME INFORMATION ON THIS TOPIC?
ROGER PARLOFF: YES.
MR. BOSTIC: SHE SAYS HERE, "WE'RE SCALING OUR INFRASTRUCTURE AND WORKING TO MAKE IT POSSIBLE TO ELIMINATE THE NEED TO HAVE BLOOD DRAWN FROM BIG TUBES OR THROUGH VENIPUNCTURE FOR EVERYONE." DO YOU SEE THAT?
ROGER PARLOFF: YES.
MR. BOSTIC: SHE TALKS ABOUT CONSTANTLY UPDATING THE INFRASTRUCTURE BASED ON THE TESTS WE ANTICIPATE TO BE RUN IN A GIVEN GEOGRAPHY. DO YOU SEE THAT?
ROGER PARLOFF: YES.
MR. BOSTIC: BUT SHE SAYS, "BASED ON THE COMBINATION OF TESTS THAT ARE ORDERED WE'LL OCCASIONALLY RUN THEM THROUGH VENIPUNCTURE, WITH MUCH SMALLER SAMPLE SIZES AS TO WHAT WAS TRADITIONALLY COLLECTED." DO YOU SEE THAT?
ROGER PARLOFF: YES.
MR. BOSTIC: AND WAS THAT CONSISTENT WITH WHAT MS. HOLMES HAD BEEN TELLING YOU ABOUT THE COMPANY'S USE OF VENIPUNCTURE?
ROGER PARLOFF: YES.
MR. BOSTIC: AT THE BOTTOM OF THIS PAGE, IF WE CAN JUST ZOOM IN ON THE BOTTOM THIRD OR SO. MS. HOLMES INCLUDES SOME FAVORABLE PATIENT QUOTES; IS THAT CORRECT?
ROGER PARLOFF: YES.
MR. BOSTIC: DID MS. HOLMES EVER DISCLOSE TO YOU ANY PATIENT COMPLAINTS OR COMMUNICATIONS FROM DOCTORS ABOUT QUESTIONABLE RESULTS?
MR. BOSTIC: OKAY. WE CAN TAKE THAT DOWN. THANK YOU, MS. HOLLIMAN. YOU PUBLISHED YOUR ARTICLE, OR "FORTUNE" PUBLISHED YOUR ARTICLE IN JUNE OF 2014?
ROGER PARLOFF: YES.
MR. BOSTIC: AND DID YOU CONTINUE TO COMMUNICATE WITH MS. HOLMES AFTER THAT?
ROGER PARLOFF: YES.
MR. BOSTIC: AND DID YOU TALK TO HER ABOUT THE ARTICLE THAT YOU HAD WRITTEN?
ROGER PARLOFF: YES.
MR. BOSTIC: DID SHE PROVIDE YOU WITH ANY REACTIONS OR FEEDBACK TO THE ARTICLE THAT YOU HAD WRITTEN FOR "FORTUNE"?
ROGER PARLOFF: YES.
MR. BOSTIC: AND WHAT DID SHE SAY?
ROGER PARLOFF: I DON'T KNOW THE WORDS, BUT SHE PHRASED IT EFFUSIVELY, AND I BELIEVE SHE, SHE LINKED TO IT ON HER WEBSITE.
MR. BOSTIC: AND AT ANY POINT DID MS. HOLMES COMPLAIN ABOUT ANY OF THE CONTENT IN THE ARTICLE?
MR. BOSTIC: AT ANY POINT AFTER THE ARTICLE WAS PUBLISHED, DID MS. HOLMES CONTACT YOU TO ASK FOR A CORRECTION OF ANY OF THE FACTS IN THE ARTICLE?
MR. BOSTIC: DID YOU HAVE A CONVERSATION WITH MS. HOLMES IN MAY OF 2015 ABOUT 11 MONTHS AFTER THE ARTICLE WAS PUBLISHED?
ROGER PARLOFF: YES.
MR. BOSTIC: AND WHAT WAS THE IMPETUS FOR THAT CONVERSATION?
ROGER PARLOFF: I WAS WRITING A STORY FOR THE WEB ABOUT SOMETHING SHE WAS DOING IN ARIZONA. IT HAD TO DO WITH STATE LEGISLATION.
MR. BOSTIC: AND WAS THAT CONVERSATION IN MAY OF 2015 ABOUT THE ACTIVITIES OF THE COMPANY AND THE CAPABILITIES OF ITS TECHNOLOGY?
ROGER PARLOFF: WELL, IT WAS, IT WAS REALLY ABOUT THE LEGISLATIVE STUFF. BUT SHE, SHE DID BRING UP AS AN ASIDE THAT THERE WAS SOMETHING NEW THAT THEY HAD STARTED DOING THIS YEAR, MEANING 2015, AND THAT WAS THAT THEY HAD BEGUN USING THIRD PARTY MACHINES TO DO ESOTERIC TESTS, SHE CALLED THEM ESOTERIC TESTS. AND SHE DEFINED ESOTERIC TESTS AS TESTS THAT WERE SELDOM ORDERED OR HIGHLY COMPLEX, AND THEY WOULD DO THOSE WITH A THIRD PARTY MACHINE AND BY VENIPUNCTURE BECAUSE -- IN ESSENCE TO OFFER ONE STOP SHOPPING SO THAT PEOPLE WOULD -- THEY WOULDN'T HAVE TO REFER THOSE OUT TO A SPECIALTY LAB.
MR. BOSTIC: SO A COUPLE OF FOLLOW-UP QUESTIONS ABOUT THAT. FIRST OF ALL, WAS THIS CONVERSATION IN MAY OF 2015 THE FIRST TIME THAT MS. HOLMES HAD MENTIONED THE COMPANY'S USE OF THIRD PARTY BLOOD ANALYZERS AS FAR AS YOU RECALL?
ROGER PARLOFF: YES.
MR. BOSTIC: IN DESCRIBING THE COMPANY'S USE OF THIRD PARTY ANALYZERS AT THAT TIME, DID SHE LIMIT THE USE TO THOSE ESOTERIC TESTS, IN OTHER WORDS, THE RARELY ORDERED OR ESPECIALLY COMPLEX TESTS?
ROGER PARLOFF: I ONLY REMEMBER HER SAYING THAT THEY USED THEM FOR ESOTERIC TESTS.
MR. BOSTIC: AND FINALLY, WHEN MS. HOLMES DESCRIBED THE USE OF THIRD PARTY DEVICES, DID SHE DESCRIBE IT AS SOMETHING THAT HAD STARTED RECENTLY? WAS THIS A NEW DEVELOPMENT?
ROGER PARLOFF: THIS YEAR, MEANING 2015.
MR. BOSTIC: DID MS. HOLMES TELL YOU DURING THAT CONVERSATION THAT THERANOS HAD BEEN USING THIRD PARTY DEVICES FOR MANY OF ITS TESTS SINCE IT FIRST LAUNCHED IN SEPTEMBER OF 2013?
MR. BOSTIC: DID YOU HAVE ANOTHER CONVERSATION WITH MS. HOLMES ON SIMILAR TOPICS IN EARLY JULY OF 2015?
ROGER PARLOFF: YES.
MR. BOSTIC: AND WAS THAT CONVERSATION RECORDED?
ROGER PARLOFF: YES.
MR. BOSTIC: YOUR HONOR, THE GOVERNMENT OFFERS THREE EXHIBITS AT THIS TIME THAT WE WOULD LIKE TO PLAY IN SEQUENCE. THESE WILL BE EXHIBITS 5481A, 5481B -- EXCUSE ME. 5481A IS FIRST. 5481D IS NEXT IN ORDER. THEN 5481B COMES AFTER THAT. THESE ARE ALL A CONTIGUOUS PORTION OF AUDIO FROM A RECORDING DATED JULY 1ST, 2015, AND THE TOTAL IS APPROXIMATELY SIX MINUTES.
MR. CLINE: NO OBJECTION.
JUDGE DAVILA: ALL RIGHT. EACH OF THEM ARE ADMITTED. THEY MAY BE PLAYED. AGAIN, LADIES AND GENTLEMEN, THERE IS NO TRANSCRIPT, SO PLEASE DO LISTEN CLOSELY AS THESE ARE PLAYED. AND THEY MAY BE PLAYED NOW.
(GOVERNMENT'S EXHIBITS 5481A, 5481B, AND 5481D WERE RECEIVED IN EVIDENCE.)
MR. BOSTIC: THANK YOU. MS. HOLLIMAN, LET'S PLAY 5481A, THEN D, THEN B.
(AUDIO RECORDING PLAYED OFF THE RECORD.)
BY MR. BOSTIC:
MR. BOSTIC: MR. PARLOFF, DID YOU HEAR SOME CONVERSATIONS ABOUT THE REFERENCE LAB THAT YOU MENTIONED EARLIER?
ROGER PARLOFF: YES.
MR. BOSTIC: AND DID YOU ALSO HEAR MS. HOLMES PROVIDE YOU WITH SOME MORE INFORMATION ABOUT THE COMPANY'S USE OF VENIPUNCTURE?
ROGER PARLOFF: YES.
MR. BOSTIC: AND IN CONNECTION WITH THAT, MS. HOLMES SAID THAT THE COMPANY DOES SOMETIMES -- OR EXCUSE ME, DOES RUN TRADITIONAL VENIPUNCTURE SOMETIMES ON TRADITIONAL REFERENCE EQUIPMENT. DID YOU HEAR THAT?
ROGER PARLOFF: YES.
MR. BOSTIC: AND DID YOU HEAR MS. HOLMES SAY THAT WHEN THAT HAPPENS, IT'S A LOT LESS SAMPLE, TOO, BECAUSE THERE'S ONLY A FEW TESTS THAT WILL ACTUALLY RUN ON THE VENIPUNCTURE. DO YOU RECALL THAT?
ROGER PARLOFF: YEAH.
MR. BOSTIC: DID MS. HOLMES EVER TELL YOU THAT APPROXIMATELY 40 PERCENT OF THERANOS PATIENTS AT WALGREENS HAD NEEDED TO HAVE VENIPUNCTURE BECAUSE OF TESTS THAT THE COMPANY COULDN'T RUN ON FINGERSTICK?
MR. BOSTIC: AROUND THIS TIME, AND THIS IS EARLY JULY 2015, DID YOU HAVE A SECOND DEMONSTRATION OF THERANOS TECHNOLOGY?
ROGER PARLOFF: YES.
MR. BOSTIC: TELL US ABOUT THAT. WHERE WAS THAT?
ROGER PARLOFF: THAT WAS IN THE OFFICES OF THE LAW FIRM BOIES, SCHILLER & FLEXNER, AND I WAS WRITING A STORY ABOUT AN FDA -- TWO FDA APPROVALS RELATING TO A SINGLE TEST. THAT MIGHT NOT BE THE EXACT PROPER WORD "APPROVAL." I MEAN, ONE WAS A CLEARANCE AND ONE WAS A, YOU KNOW, WAIVER, BUT SUCCESSES RELATING TO ONE TEST. AND SO THEY WERE GOING TO -- AND ONE OF THEM RELATED TO HOW SIMPLE THE MACHINE WAS. SO I WAS GOING TO HAVE SAMPLES TAKEN OF MY BLOOD, AND I WOULD SEE -- THIS TIME I WOULD SEE THE MACHINE BEING USED. I HADN'T SEEN IT 13 MONTHS OR 15 MONTHS EARLIER WHEN I -- WHEN MY FIRST STORY WAS DONE. SO THAT WAS PART OF IT. AND IN ADDITION, ONE OF THE TESTS WAS GOING TO BE FOR THE EBOLA VIRUS, THE VERY LETHAL HEMORRHAGIC FEVER THAT HAD BROKEN OUT IN WEST AFRICA AT THE TIME. SHE WAS TRYING TO DEVELOP A TEST FOR THAT AND TRYING TO GET AN EMERGENCY USE AUTHORIZATION. SO I WAS EXCITED ABOUT THAT STORY. SO SHE WAS GIVING ME THESE TWO TESTS.
MR. BOSTIC: AND YOU HAD THE DRAWS FOR THOSE TESTS PERFORMED IN THE LAW FIRM OFFICE IN NEW YORK?
ROGER PARLOFF: YES.
MR. BOSTIC: AND DID YOU SEE A THERANOS DEVICE THERE IN THE ROOM?
ROGER PARLOFF: TWO THERANOS DEVICES. ONE FOR EACH -- ONE FOR THE POTASSIUM AND ONE FOR THE EBOLA.
MR. BOSTIC: DOES ANYTHING STAND OUT IN YOUR MIND ABOUT THAT PROCESS OTHER THAN WHAT WE'VE TALKED ABOUT IN THE NUMBER OF DEVICES?
ROGER PARLOFF: I WAS A LITTLE SURPRISED THAT THEY NEEDED TWO MACHINES BECAUSE I THOUGHT, YOU KNOW, ONE COULD DO EVERYTHING, BUT -- AND THEN -- BUT, NO, THE MACHINE TOOK -- WAS TAKING -- BOTH MACHINES WERE TAKING A LONG TIME, AND SO I DIDN'T STAY FOR THE RESULT. I LEFT AND RECEIVED THE RESULTS, YOU KNOW, LATER THAT EVENING.
MR. BOSTIC: AND DID THAT DEMONSTRATION HAPPEN ON THE DAY OF THE CALL ON THIS JULY 1ST, 2015 DAY, IF YOU RECALL?
ROGER PARLOFF: I DON'T RECALL.
MR. BOSTIC: LET'S LISTEN TO A CLIP. THIS WILL BE EXHIBIT 5481C. THIS IS A CLIP DATED JULY 1ST, 2015. IT'S APPROXIMATELY TWO AND A HALF -- OR TWO MINUTES LONG, SORRY, THREE MINUTES LONG.
MR. CLINE: NO OBJECTION.
JUDGE DAVILA: IT'S ADMITTED. IT MAY BE PLAYED. AGAIN, LADIES AND GENTLEMEN, PLEASE PAY ATTENTION TO THE TAPE AS IT'S PLAYED.
(GOVERNMENT'S EXHIBIT 5481C WAS RECEIVED IN EVIDENCE.)
(AUDIO RECORDING PLAYED OFF THE RECORD.)
BY MR. BOSTIC:
MR. BOSTIC: MR. PARLOFF, THE TWO DEVICES THAT YOU SAW IN THE ROOM AT THE LAW FIRM IN CONNECTION WITH THAT DEMONSTRATION, DID MS. HOLMES EVER TELL YOU THAT THOSE WERE DIFFERENT FROM THE THERANOS ANALYZERS THAT WERE BEING USED TO TEST PATIENT SAMPLES?
MR. BOSTIC: DID MS. HOLMES EVER TELL YOU THAT THE THERANOS ANALYZER THAT WAS BEING USED TO TEST PATIENT SAMPLES COULD NOT DO DNA ANALYSIS FOR A TEST LIKE EBOLA OR CLINICAL CHEMISTRY?
MR. BOSTIC: IN OCTOBER OF 2015, ARE YOU AWARE THAT A "WALL STREET JOURNAL" ARTICLE WAS PUBLISHED WITH CLAIMS UNFAVORABLE TO THERANOS?
ROGER PARLOFF: YES.
MR. BOSTIC: I DON'T WANT TO GET INTO THE CONTENT OF THAT ARTICLE, BUT I AM WONDERING IF YOU HAD ADDITIONAL COMMUNICATIONS WITH MS. HOLMES AFTER THAT ARTICLE CAME OUT?
ROGER PARLOFF: YES.
MR. BOSTIC: AND WHAT WAS THE PURPOSE OF THOSE COMMUNICATIONS?
ROGER PARLOFF: I CALLED HER THE DAY THE ARTICLE CAME OUT, WHICH I THINK WAS OCTOBER 15TH. SHE GOT BACK TO ME A COUPLE DAYS LATER. I THINK IT WAS THE 17TH. AND THE THING I WAS MOST -- I ASKED HER ABOUT EVERYTHING IN THE ARTICLE I IMAGINE, BUT -- WELL, ACTUALLY BY THEN I ASKED HER ABOUT SEVERAL THINGS. THERE HAD BEEN OTHER DEVELOPMENTS EVEN TWO DAYS LATER. BUT I WENT BACK TO THE ORIGINAL ARTICLE. THE THING THAT I WAS MOST INTERESTED IN ASKING HER ABOUT WAS THERE WAS A STATEMENT IN THE ORIGINAL "WALL STREET JOURNAL" ARTICLE ABOUT HOW MANY TESTS THEY COULD REALLY DO AS OF DECEMBER 2014.
JUDGE DAVILA: MR. CLINE.
MR. CLINE: IF WHAT HE'S DESCRIBING IS HIS QUESTION TO MS. HOLMES, THEN NO OBJECTION. I DO OBJECT TO JUST A DESCRIPTION OF "THE WALL STREET JOURNAL" ARTICLE.
JUDGE DAVILA: DOES THIS FORM A BASIS -- IF YOU WANT TO LAY A FOUNDATION FOR THAT.
MR. BOSTIC: YES, YOUR HONOR. THAT'S WHERE WE'RE HEADING.
MR. BOSTIC: SO, MR. PARLOFF, JUST TO BREAK THIS DOWN JUST A LITTLE BIT, AM I CORRECT THAT ONE OF THE REASONS FOR REACHING OUT TO MS. HOLMES ABOUT THE ARTICLE WAS TO GET HER REACTION TO SOME OF THE STATEMENTS THAT WERE IN THAT "WALL STREET JOURNAL" ARTICLE?
ROGER PARLOFF: YES.
MR. BOSTIC: AND DID ONE OF THOSE STATEMENTS IN "THE WALL STREET JOURNAL" ARTICLE RELATE TO THE NUMBER OF TESTS THAT THE THERANOS ANALYZER COULD PERFORM?
ROGER PARLOFF: YES.
MR. BOSTIC: AND WHAT DID YOU ASK MS. HOLMES ABOUT THAT TOPIC?
ROGER PARLOFF: I ASKED, HOW MANY TESTS COULD YOU DO ON YOUR PROPRIETARY DEVICE AS OF DECEMBER 2014, WHICH WAS THE DATE REFERENCED IN "THE WALL STREET JOURNAL" ARTICLE. THEY HAD A NUMBER IN THERE. AND SHE RESPONDED 50, 60, MAYBE 70. WE CAN GET YOU THAT NUMBER.
MR. BOSTIC: TWO QUESTIONS ON THAT. FIRST, WAS THIS THE FIRST TIME THAT YOU HAD HEARD FROM MS. HOLMES THAT THE THERANOS ANALYZER COULD ONLY DO 50, 60, OR 70 TESTS, AS OPPOSED TO 200 OR A THOUSAND THAT YOU HAD DISCUSSED WITH HER EARLIER?
ROGER PARLOFF: YES.
MR. BOSTIC: AND IN CONNECTION WITH THAT CONVERSATION, DID MS. HOLMES EVER TELL YOU THAT, IN FACT, THE THERANOS ANALYZER USED FOR PATIENT TESTING COULD NEVER DO MORE THAN A DOZEN TESTS?
MR. BOSTIC: CAN I HAVE A MOMENT, YOUR HONOR?
JUDGE DAVILA: YES.
(DISCUSSION AMONGST GOVERNMENT COUNSEL OFF THE RECORD.)
MR. BOSTIC: NO FURTHER QUESTIONS. THANK YOU, YOUR HONOR.
JUDGE DAVILA: MR. CLINE?
CROSS-EXAMINATION BY MR. CLINE:
MR. CLINE: MR. PARLOFF, GOOD AFTERNOON.
ROGER PARLOFF: GOOD AFTERNOON.
MR. CLINE: I AM GOING TO -- I REPRESENT MS. HOLMES. MY NAME IS JOHN CLINE. I HAVE SOME AREAS I WANT TO ASK YOU ABOUT. BUT FIRST I'M GOING TO ASK YOU SOME QUESTIONS ABOUT YOUR BACKGROUND. AND BEFORE I EVEN DO THAT, I'M GOING TO HAND OUT NOTEBOOKS BECAUSE THAT'S SOMETHING THAT WE DO WITH EVERY WITNESS IN THIS CASE. MAY I APPROACH?
JUDGE DAVILA: YES.
BY MR. CLINE:
MR. CLINE: (HANDING.) YOU DON'T NEED TO PAY ATTENTION TO THAT FOR NOW. I MAY CALL ATTENTION TO IT FROM TIME TO TIME, BUT JUST PUT IT ASIDE FOR NOW. YOU PASSED ON DIRECT VERY QUICKLY OVER YOUR EDUCATIONAL BACKGROUND, BUT I WANTED TO TOUCH ON THAT A LITTLE BIT. YOU HAVE YOUR UNDERGRADUATE DEGREE FROM HARVARD; RIGHT?
ROGER PARLOFF: YEAH.
MR. CLINE: AND THAT'S A COLLEGE UP IN THE NORTHEAST SOMEWHERE; RIGHT?
ROGER PARLOFF: YES.
MR. CLINE: ALL RIGHT. AND THEN YOU WENT TO LAW SCHOOL; RIGHT?
ROGER PARLOFF: YES.
MR. CLINE: AND YOU WENT TO YALE LAW SCHOOL; RIGHT?
ROGER PARLOFF: YES.
MR. CLINE: AND YOU GOT A JD, A JURIS DOCTORATE DEGREE FROM YALE?
ROGER PARLOFF: YES.
MR. CLINE: AND AFTER THAT, YOU WERE A LAW CLERK FOR A UNITED STATES DISTRICT JUDGE, SORT OF LIKE JUDGE DAVILA; RIGHT?
ROGER PARLOFF: YES.
MR. CLINE: AND THAT WAS IN TEXAS?
ROGER PARLOFF: YES.
MR. CLINE: AND THAT JUDGE WAS JUDGE JUSTICE; RIGHT?
ROGER PARLOFF: THAT'S RIGHT.
MR. CLINE: AND THEN YOU PRACTICED LAW FOR A WHILE; RIGHT?
ROGER PARLOFF: YES.
MR. CLINE: ABOUT FIVE YEARS?
ROGER PARLOFF: YES.
MR. CLINE: YOU WERE A PROSECUTOR FOR A WHILE?
ROGER PARLOFF: YES.
MR. CLINE: AND THEN YOU WERE A DEFENSE LAWYER FOR A WHILE?
ROGER PARLOFF: YES.
MR. CLINE: THEN YOU TAUGHT LAW; RIGHT?
ROGER PARLOFF: YES.
MR. CLINE: AT HOFSTRA SCHOOL?
ROGER PARLOFF: YEAH.
MR. CLINE: AND HAVING SEEN ALL SIDES OF THE LAW, YOU QUIT?
ROGER PARLOFF: YES.
MR. CLINE: AND BECAME A JOURNALIST?
ROGER PARLOFF: YES.
MR. CLINE: AND YOU WERE A JOURNALIST, I THINK YOU SAID, STARTING IN 19 --
ROGER PARLOFF: '88.
MR. CLINE: -- 88. SO BY APRIL OF 2014, YOU HAD BEEN A JOURNALIST FOR, WHAT, 26 YEARS?
ROGER PARLOFF: I'LL TAKE YOUR WORD FOR IT.
MR. CLINE: SOMETHING LIKE THAT?
ROGER PARLOFF: UH-HUH.
MR. CLINE: AND IS IT FAIR TO SAY THAT BY APRIL OF 2014, YOU HAD HAD MANY YEARS OF EXPERIENCE ASKING QUESTIONS BOTH AS A LAWYER AND THEN AS A JOURNALIST?
ROGER PARLOFF: I SUPPOSE, YES.
MR. CLINE: NOW, I WANT TO TOUCH AGAIN ON HOW YOU SORT OF GOT STARTED ON THE THERANOS PROCESS. I'M GOING TO FOCUS FOR A WHILE ON THE JUNE 2014 "FORTUNE" ARTICLE --
ROGER PARLOFF: YES.
MR. CLINE: -- AND THE PROCESS THAT LED TO THAT ARTICLE. SOMETIME IN EARLY 2014, YOU HEARD ABOUT A CASE INVOLVING THERANOS; RIGHT?
ROGER PARLOFF: YES.
MR. CLINE: AND IF I HEARD YOU RIGHT ON DIRECT, IT'S BECAUSE YOU GOT A CALL FROM A PUBLICITY PERSON AT MR. BOIES'S LAW FIRM?
ROGER PARLOFF: WELL, NO. I HEARD ABOUT THE CASE FROM READING NEWSLETTERS AND WAS SORT OF FOLLOWING THE CASE JUST OUT OF CURIOSITY. AND THEN I GOT A CALL FROM THE BOIES FIRM AFTER IT SETTLED, YOU KNOW.
MR. CLINE: ALL RIGHT. AND THE CALL FROM THE BOIES FIRM WAS SORT OF REACHING OUT TO SEE IF THIS WAS SOMETHING THAT YOU MIGHT HAVE AN INTEREST IN?
ROGER PARLOFF: YEAH.
MR. CLINE: AND YOU HAD BEEN COVERING LAW AND LAWYERS FOR YEARS AT THAT POINT?
ROGER PARLOFF: YES.
MR. CLINE: AND YOU CERTAINLY WERE FAMILIAR WITH MR. BOIES; RIGHT?
ROGER PARLOFF: YES.
MR. CLINE: ONE OF -- AS OF 2014, APRIL OF 2014, ONE OF THE PREEMINENT LAWYERS IN AMERICA; IS THAT FAIR?
ROGER PARLOFF: YES.
MR. CLINE: A FAMED TRIAL LAWYER; RIGHT?
ROGER PARLOFF: YES.
MR. CLINE: ALSO A WELL RESPECTED ADVISOR TO COMPANIES ALL OVER THE COUNTRY; RIGHT?
ROGER PARLOFF: YES.
MR. CLINE: AND YOU FOUND IT INTERESTING THAT MR. BOIES, WHO WAS SO EMINENT IN THE PROFESSION, WAS REPRESENTING A COMPANY THAT YOU HAD NEVER HEARD OF; RIGHT?
ROGER PARLOFF: EXACTLY, YES.
MR. CLINE: THAT BEING THERANOS?
ROGER PARLOFF: YES.
MR. CLINE: AND SO YOU THOUGHT YOU MIGHT WRITE AN ARTICLE ABOUT MR. BOIES AND THIS CASE THAT HE HAD JUST WON FOR THERANOS; RIGHT?
ROGER PARLOFF: YES, I WAS CONSIDERING THAT, YEAH.
MR. CLINE: AND THEN YOU SORT OF -- DID YOU TALK TO MR. BOIES ABOUT THAT, OR WAS IT JUST WITH PEOPLE AT HIS FIRM? YOU SAID THE ANSWER CAME BACK. WHAT WAS THE PROCESS THERE?
ROGER PARLOFF: I BELIEVE I DID SPEAK TO HIM BY PHONE WHILE I WAS TRYING TO DECIDE WHETHER TO DO THIS STORY.
MR. CLINE: ALL RIGHT. AND WHEN YOU SPOKE WITH MR. BOIES, HE WAS HAPPY TO TALK WITH YOU, BUT HE SAID THE REAL STORY HERE WAS THERANOS AND MS. HOLMES; RIGHT?
ROGER PARLOFF: YES.
MR. CLINE: AND YOU WERE PERSUADED THAT WAS A REAL STORY; RIGHT?
ROGER PARLOFF: YES.
MR. CLINE: AND YOU PITCHED IT TO "FORTUNE"; RIGHT?
ROGER PARLOFF: YES.
MR. CLINE: AND "FORTUNE" SAID, HAVE AT IT?
ROGER PARLOFF: YES.
MR. CLINE: NOW, YOU MET WITH MR. BOIES AT THE END OF MARCH OF 2014; RIGHT?
ROGER PARLOFF: YES.
MR. CLINE: MARCH 30TH, 2014. DOES THAT SOUND ABOUT RIGHT?
ROGER PARLOFF: YES.
MR. CLINE: AND HE -- YOU TALKED WITH HIM ABOUT THE LAWSUIT THAT HE HAD JUST TRIED FOR THERANOS; RIGHT?
ROGER PARLOFF: WELL, I THINK I'M GOING TO INVOKE REPORTER PRIVILEGE AT ABOUT THIS POINT.
MR. KOLTUN: YOUR HONOR --
JUDGE DAVILA: SIR, HAVE A SEAT FOR JUST A MOMENT. I WANT TO ASK THIS LAWYER SOME QUESTIONS. MR. CLINE, DO YOU WISH TO CONTINUE WITH THIS LINE OR CAN YOU MOVE TO ANOTHER TOPIC?
MR. CLINE: I'D LIKE TO CONTINUE BRIEFLY WITH THIS. THIS IS INFORMATION THAT WAS PROVIDED TO THE GOVERNMENT IN AN INTERVIEW, SO I DON'T THINK THERE'S ANY REPORTER'S PRIVILEGE THAT CAN BE ASSERTED HERE.
JUDGE DAVILA: WELL, CAN YOU MOVE TO A DIFFERENT TOPIC? CAN I GET YOU OUT OF YOUR ORDER HERE? I'M TRYING TO SEE IF YOU CAN KEEP YOUR EXAMINATION GOING. I DON'T WANT TO INTERRUPT THE FLOW, BUT IT MAY BE THAT WE'LL HAVE TO HAVE A HEARING OUTSIDE OF THE PRESENCE OF THE JURY.
MR. CLINE: ALL RIGHT. YES.
JUDGE DAVILA: OKAY.
MR. CLINE: LET'S FLAG THAT. IT MAY COME UP AGAIN AND WE'LL HAVE TO TALK ABOUT IT.
JUDGE DAVILA: SURE.
BY MR. CLINE:
MR. CLINE: TELL ME IF YOU CAN ANSWER THIS OR IF IT CAUSES YOU A PRIVILEGE PROBLEM. DID MR. BOIES TELL YOU THAT THERANOS HAD BEEN IN STEALTH MODE, BUT WAS NOW READY TO START TO GO PUBLIC?
MR. BOSTIC: OBJECTION, YOUR HONOR. HEARSAY AND 401.
MR. CLINE: THIS IS GOING TO MR. PARLOFF'S STATE OF MIND HERE AS HE BEGINS THIS PROCESS.
JUDGE DAVILA: I'LL ALLOW THAT QUESTION. SO, SIR, DID YOU UNDERSTAND THE QUESTION?
ROGER PARLOFF: YES, AND I THINK I'VE ANSWERED THIS PUBLICLY ELSEWHERE. YES, YES.
BY MR. CLINE:
MR. CLINE: ALL RIGHT. THAT'S FINE. AND IS IT FAIR TO SAY THAT MR. BOIES WAS ENTHUSIASTIC ABOUT BOTH MS. HOLMES AND THERANOS?
ROGER PARLOFF: YES. I THINK I'VE SAID THAT ELSEWHERE.
MR. CLINE: ALL RIGHT. AND MR. BOIES THEN PUT YOU IN TOUCH WITH MS. HOLMES?
ROGER PARLOFF: YES, HIS OFFICE. HIS OFFICE.
MR. CLINE: HIS OFFICE PUT YOU IN TOUCH WITH MS. HOLMES?
ROGER PARLOFF: YEAH.
MR. CLINE: ALL RIGHT. NOW, YOU FIRST MET WITH MS. HOLMES ON APRIL THE 7TH, 2014?
ROGER PARLOFF: YES.
MR. CLINE: YOU HAD TALKED WITH HER ON THE PHONE BEFORE THAT AND YOU MADE SOME LOGISTICAL ARRANGEMENTS, BUT THIS WAS THE FIRST MEETING?
ROGER PARLOFF: THAT'S RIGHT.
MR. CLINE: NOW, I'M GOING TO TALK A LITTLE BIT ABOUT YOUR CONVERSATIONS WITH MS. HOLMES, BUT I WANT TO TALK ABOUT A COUPLE OF SORT OF OTHER BACKGROUND THINGS FIRST. I THINK YOU TESTIFIED ON DIRECT THAT THERE WAS A, A CONCERN ABOUT TRADE SECRETS?
ROGER PARLOFF: YES.
MR. CLINE: AND MY QUESTION, AND WE HEARD IT A FEW TIMES ON THE RECORDINGS, IS THAT SOMETHING THAT CAME UP REPEATEDLY IN YOUR DISCUSSIONS WITH --
ROGER PARLOFF: YES.
MR. CLINE: AND YOU UNDERSTOOD THAT THERE WERE, OR YOU UNDERSTOOD AT THE TIME THAT THERE WERE LIMITS ON WHAT YOU COULD BE TOLD AND WHAT THERANOS WOULD BE COMFORTABLE WITH YOU PUBLISHING BECAUSE OF INTELLECTUAL PROPERTY CONCERNS?
ROGER PARLOFF: THAT'S RIGHT.
MR. CLINE: AND I ALSO NOTICED THAT DURING THE CLIPS WE PLAYED THAT THINGS WOULD BE ON THE RECORD AND THEN OFF THE RECORD. DID YOU NOTICE THAT AS WELL?
ROGER PARLOFF: YES.
MR. CLINE: AND DURING YOUR CONVERSATIONS WITH MS. HOLMES, DID YOU TALK ABOUT GROUND RULES, ON THE RECORD, OFF THE RECORD?
ROGER PARLOFF: I DON'T RECALL.
MR. CLINE: IS THAT SOMETHING YOU NORMALLY DO WITH PEOPLE YOU TALK WITH?
ROGER PARLOFF: WELL, NORMALLY YOU'RE ON THE RECORD UNLESS YOU SAY OFF THE RECORD.
MR. CLINE: AND WHEN SOMEONE SAYS -- NOT SOMEONE. WHEN MS. HOLMES SAYS OFF THE RECORD, WHAT DID YOU UNDERSTAND THAT TO MEAN?
ROGER PARLOFF: WELL, IT ACTUALLY -- IT MEANT DIFFERENT THINGS IN DIFFERENT CONTEXTS. SOMETIMES IT WAS I WAS NEVER SUPPOSED TO USE IT. SOMETIMES IT WAS SORT OF IN AN EMBARGO, DON'T USE IT NOW, MAYBE AT ONE TIME WE CAN USE IT. SO I GUESS I WOULD HAVE TO LOOK AT THE PARTICULAR CONTEXT.
MR. CLINE: ALL RIGHT. TELL ME IF THIS IS A FAIR SUMMARY OF THAT. WHEN -- DURING THESE CONVERSATIONS THAT YOU WERE HAVING WITH HER IN APRIL, MAY, AND EARLY JUNE OF 2014 LEADING UP TO THE "FORTUNE" ARTICLE, DID YOU UNDERSTAND THAT SOMETHING THAT WAS OFF THE RECORD DURING THOSE CONVERSATIONS WAS NOT TO BE USED IN THE ARTICLE?
ROGER PARLOFF: YES.
MR. CLINE: ALL RIGHT. NOW, BETWEEN THAT FIRST MEETING WITH MS. HOLMES ON APRIL THE 7TH AND THE PUBLICATION OF YOUR ARTICLE IN JUNE, YOU HAD A NUMBER OF CONVERSATIONS WITH MS. HOLMES. FAIR?
ROGER PARLOFF: YES.
MR. CLINE: AND SOME OF THOSE WERE RECORDED; RIGHT?
ROGER PARLOFF: YES.
MR. CLINE: AND I THINK ON DIRECT YOU PUT A NUMBER ON THAT, TEN HOURS OR SOMETHING --
ROGER PARLOFF: IT SEEMED LIKE TEN HOURS. I TRIED TO COMPUTE IT, BUT IT SEEMED LIKE TEN HOURS.
MR. CLINE: ALL RIGHT. AND THERE WERE ALSO DISCUSSIONS THAT WERE NOT RECORDED; RIGHT?
ROGER PARLOFF: THAT'S RIGHT.
MR. CLINE: AND I THINK, IF I HEARD YOU RIGHT, YOU ESTIMATED THOSE AT MAYBE ANOTHER THREE HOURS OR SO?
ROGER PARLOFF: YEAH, TWO TO THREE HOURS.
MR. CLINE: ALL RIGHT.
ROGER PARLOFF: THE BALLPARK, YOU KNOW.
MR. CLINE: NOW, WE'VE HEARD SOME OF THE RECORDED CONVERSATIONS, PROBABLY, I DON'T KNOW, 20 OR 30 MINUTES WORTH ON DIRECT; RIGHT?
ROGER PARLOFF: YEAH.
MR. CLINE: OKAY. AND I'VE GOT A FEW OTHER PORTIONS THAT I'M GOING TO PLAY FOR YOU. AND OTHER THAN ASKING YOU AT THE END IF THAT WAS YOU AND MS. HOLMES TALKING, I'M NOT GOING TO ASK YOU ANY QUESTIONS ABOUT THEM, I'M JUST GOING TO PLAY THEM. SO I THINK WITH COUNSEL'S PERMISSION I'M GOING TO PLAY WHAT I'M GOING TO CALL EXHIBIT 1647A, WHICH IS A PORTION OF THE APRIL 7TH, 2014, CONVERSATION.
MR. BOSTIC: IS THIS ONE THAT WE DISCUSSED?
MR. CLINE: YES.
MR. BOSTIC: NO OBJECTION, YOUR HONOR.
JUDGE DAVILA: THE DATE AGAIN WAS? THE DATE AGAIN IS?
MR. CLINE: I'M SORRY?
JUDGE DAVILA: THE DATE AGAIN?
MR. CLINE: APRIL 7TH, 2014.
JUDGE DAVILA: ALL RIGHT. AND THIS IS HOW LONG?
MR. CLINE: THIS IS A LITTLE LESS THAN A MINUTE.
JUDGE DAVILA: ALL RIGHT. ALL RIGHT. THAT'S ADMITTED, AND IT MAY BE PLAYED. AGAIN, LADIES AND GENTLEMEN, THERE'S NO TRANSCRIPT.
MR. CLINE: THERE'S NO TRANSCRIPT.
JUDGE DAVILA: SO PLEASE DO PAY ATTENTION TO THE AUDIO. AND IT MAY BE PLAYED NOW.
(DEFENDANT'S EXHIBIT 1647A WAS RECEIVED IN EVIDENCE.)
(AUDIO RECORDING PLAYED OFF THE RECORD.)
BY MR. CLINE:
MR. CLINE: ALL RIGHT. THAT WAS YOU AND MS. HOLMES TALKING; RIGHT?
ROGER PARLOFF: YES.
MR. CLINE: SO THE NEXT PORTION IS FROM APRIL THE 10TH, 2014, AND THIS IS EXHIBIT 1657A.
MR. BOSTIC: NO OBJECTION.
JUDGE DAVILA: THIS IS PLAYED -- THIS MAY BE PLAYED. IT'S ADMITTED, AND IT MAY BE PLAYED. PLEASE LISTEN CAREFULLY TO THE AUDIO. THERE IS NO TRANSCRIPT OF THIS AS WELL.
(DEFENDANT'S EXHIBIT 1657A WAS RECEIVED IN EVIDENCE.)
MR. CLINE: RIGHT. AND THIS IS ABOUT 45 SECONDS OR SO.
JUDGE DAVILA: ALL RIGHT. THANK YOU. AND THAT CAN BE PLAYED NOW.
(AUDIO RECORDING PLAYED OFF THE RECORD.)
BY MR. CLINE:
MR. CLINE: ALL RIGHT. AND THAT WAS YOU AND MS. HOLMES; RIGHT?
ROGER PARLOFF: YES.
MR. CLINE: AND THEN THE THIRD CLIP I'M GOING TO PLAY, AND THE LAST ONE, IS FROM THE MAY 12TH, 2014 CONVERSATION. THIS WILL BE EXHIBIT 1719A. AND THIS IS ABOUT A LITTLE OVER A MINUTE. YOUR HONOR, IS THAT LAST ONE ADMITTED?
JUDGE DAVILA: IT WAS, YES.
MR. CLINE: ALL RIGHT. THANK YOU. I'LL ASK THAT THIS ONE BE ADMITTED AS WELL.
MR. BOSTIC: NO OBJECTION.
JUDGE DAVILA: 1719A WILL BE ADMITTED. PAY ATTENTION TO THIS AUDIO AS IT'S PLAYED.
(DEFENDANT'S EXHIBIT 1719A WAS RECEIVED IN EVIDENCE.)
(AUDIO RECORDING PLAYED OFF THE RECORD.)
BY MR. CLINE:
MR. CLINE: AGAIN, YOU AND MS. HOLMES?
ROGER PARLOFF: YES.
MR. CLINE: ALL RIGHT. THAT'S THE END OF OUR CLIPS, YOUR HONOR.
JUDGE DAVILA: OKAY.
BY MR. CLINE:
MR. CLINE: NOW, I'M GOING TO COME BACK TO YOUR CONVERSATIONS WITH MS. HOLMES, BUT I WANTED TO ASK YOU ABOUT SOME OTHER INVESTIGATIVE STEPS THAT YOU TOOK FOR THE JUNE 2014 ARTICLE. I'M GOING TO TRY NOT TO GET INTO ANY PRIVILEGE CONCERNS, BUT I'M SURE IF I DO, I'M SURE YOU'LL TELL ME. ONE THING YOU DID WAS READ THE TRANSCRIPT OF THAT TRIAL THAT MR. BOIES HAD JUST HAD; RIGHT?
ROGER PARLOFF: YES.
MR. CLINE: AND THAT WAS -- IT WAS A PATENT TRIAL; RIGHT?
ROGER PARLOFF: YES.
MR. CLINE: IT WAS ABOUT THERANOS'S INTELLECTUAL PROPERTY; RIGHT?
ROGER PARLOFF: YES.
MR. CLINE: AND YOU GLEANED A FAIR AMOUNT OF INFORMATION ABOUT THERANOS'S INTELLECTUAL PROPERTY JUST FROM READING THE TRANSCRIPT OF THE TRIAL; CORRECT?
ROGER PARLOFF: YES, AND I READ -- I READ THAT EVEN BEFORE WHEN I -- BEFORE I HAD DECIDED TO FOCUS MORE ON THE COMPANY, I WAS STILL -- I WAS WONDERING, SHOULD I WRITE ABOUT THE LAWSUIT. BUT YOU'RE RIGHT, IT HAD A LOT OF INFORMATION ABOUT THE COMPANY.
MR. CLINE: ALL RIGHT. YOU DID SOME INTERNET RESEARCH OF YOUR OWN ABOUT THINGS LIKE REGULATIONS AND THAT SORT OF THING; RIGHT?
ROGER PARLOFF: YES.
MR. CLINE: YOU HAD RESEARCHERS AT "FORTUNE" WHO WERE HELPING YOU; CORRECT?
ROGER PARLOFF: I DON'T REMEMBER THAT. I MEAN --
MR. CLINE: LET ME SEE --
ROGER PARLOFF: OH, OH.
MR. CLINE: YOU WERE ABOUT TO SAY SOMETHING AND I INTERRUPTED YOU. WHAT WAS IT?
ROGER PARLOFF: THERE WAS -- WELL, ACTUALLY I THINK MAYBE THIS GETS INTO REPORTER PROCESS AND I DON'T THINK IT'S BEEN PUBLISHED, SO MAYBE I SHOULD INVOKE PRIVILEGE.
MR. CLINE: OKAY. YOU INTERVIEWED PEOPLE IN ADDITION TO MS. HOLMES; RIGHT?
ROGER PARLOFF: YES.
MR. CLINE: MS. HOLMES SUGGESTED SOME OF THE PEOPLE THAT YOU TALK WITH; CORRECT?
ROGER PARLOFF: YES.
MR. CLINE: AND OTHERS THAT YOU FOUND ON YOUR OWN; RIGHT?
ROGER PARLOFF: YES.
MR. CLINE: AND I WANT TO GO THROUGH SOME OF THE PEOPLE THAT YOU INTERVIEWED. MR. BOIES WAS ONE; RIGHT?
ROGER PARLOFF: I CAN'T REMEMBER IF HE'S QUOTED IN THE PIECE. DO YOU KNOW?
MR. CLINE: I THINK HE'S NAMED IN THE PIECE AS A SOURCE OF INFORMATION.
JUDGE DAVILA: SIR, DO YOU WANT TO LOOK AT THE PIECE? DO YOU WANT TO REVIEW THIS FOR A MOMENT?
BY MR. CLINE:
MR. CLINE: YOU'RE WELCOME TO IF YOU WANT. IT IS TAB 1749 IN THAT BOOK THAT I'VE HANDED YOU. SO TAKE YOUR TIME AND LOOK THROUGH IT AND MAKE YOURSELF COMFORTABLE.
JUDGE DAVILA: DO YOU HAVE A DIRECTION TO A PAGE NUMBER?
BY MR. CLINE:
MR. CLINE: TAKE A LOOK, MR. PARLOFF, IF YOU'RE WITH ME, AT PAGE 6.
ROGER PARLOFF: YES.
MR. CLINE: DOWN AT THE BOTTOM OF THE RIGHT-HAND COLUMN.
ROGER PARLOFF: YEAH, YEAH. LET ME READ THAT.
(PAUSE IN PROCEEDINGS.)
ROGER PARLOFF: YEAH, IT DOES, IT DOES PARAPHRASE HIM SPEAKING. YEAH, I DID INTERVIEW HIM.
BY MR. CLINE:
MR. CLINE: ALL RIGHT. SO MR. BOIES WAS ONE OF THE PEOPLE YOU INTERVIEWED; IS THAT RIGHT?
ROGER PARLOFF: YEAH. YES.
MR. CLINE: AND YOU INTERVIEWED DR. CHANNING ROBERTSON; RIGHT?
ROGER PARLOFF: YEAH.
MR. CLINE: AND DR. ROBERTSON, HE TESTIFIED --
ROGER PARLOFF: YES.
MR. CLINE: -- IN THE TRIAL YOU WERE THINKING ABOUT; RIGHT?
ROGER PARLOFF: YES.
MR. CLINE: AND YOU READ HIS TESTIMONY; RIGHT?
ROGER PARLOFF: YES.
MR. CLINE: BUT YOU ALSO SAT DOWN AND INTERVIEWED HIM; RIGHT?
ROGER PARLOFF: YES.
MR. CLINE: AND YOU ALSO UNDERSTOOD THAT HE WAS OR HAD BEEN A PROFESSOR AT STANFORD?
ROGER PARLOFF: YES.
MR. CLINE: AND THAT HE HAD BEEN KIND OF A MENTOR AND ADVISOR TO MS. HOLMES OVER THE YEARS?
ROGER PARLOFF: YES.
MR. CLINE: YOU TALKED TO RICHARD KOVACEVICH, THE CEO OF WELLS FARGO AND A BOARD MEMBER OF THERANOS; RIGHT?
ROGER PARLOFF: I DON'T KNOW IF HE'S QUOTED.
MR. CLINE: I DON'T KNOW, EITHER. BUT I CAN TELL YOU, AND I CAN TELL THE COURT FOR LATER CONSIDERATION IF NECESSARY, THAT HE WAS ON A LIST OF NAMES THAT YOU PROVIDED TO THE GOVERNMENT WHEN YOU FIRST SAT DOWN WITH THEM OF PEOPLE YOU HAD INTERVIEWED.
ROGER PARLOFF: WELL, I'M GOING TO INVOKE THE REPORTER PRIVILEGE.
MR. CLINE: WOULD IT EASE YOUR MIND IF I WERE TO SHOW YOU THE MEMORANDUM OF THAT INTERVIEW WHERE YOU TOLD THE GOVERNMENT THESE NAMES?
MR. CLINE: IT WOULDN'T HELP?
ROGER PARLOFF: NO, BECAUSE I DON'T REALLY KNOW -- I'M NOT A MEDIA LAWYER. I DON'T REALLY KNOW THE LIMITATION -- I DON'T WANT TO WAIVE THE PRIVILEGE FOR OTHERS.
MR. CLINE: DO YOU HAVE A MEDIA LAWYER HERE WITH YOU?
ROGER PARLOFF: YES.
JUDGE DAVILA: THAT'S MY QUESTION FOR YOU, SIR. DO YOU HAVE COUNSEL FOR YOU HERE, MR. PARLOFF?
ROGER PARLOFF: YES.
JUDGE DAVILA: AND DO YOU WISH TO TAKE A BREAK AND CONSULT WITH YOUR COUNSEL?
ROGER PARLOFF: YES.
JUDGE DAVILA: ALL RIGHT. LET'S DO THAT. LET'S DO THAT.
MR. CLINE: THAT'S FINE.
JUDGE DAVILA: LADIES AND GENTLEMEN, WE'LL TAKE ABOUT A 15 MINUTE BREAK, A 15 TO 20 MINUTE BREAK HERE, AND SO WE'LL BE IN RECESS. PLEASE, SIR, GO RIGHT AHEAD AND CONSULT WITH YOUR COUNSEL.
(JURY OUT AT 3:16 P.M.)
JUDGE DAVILA: PLEASE BE SEATED. THE RECORD SHOULD REFLECT THAT THE JURY IS OUT. BEFORE YOU LEAVE, MR. CLINE, I'LL INVITE ANY INTERESTED PARTY -- IF THERE'S GOING TO BE SOME DISCUSSION ABOUT THIS, WE'LL DO THIS OUTSIDE OF THE PRESENCE OF THE JURY, AND IF YOU COULD NOTIFY COUNSEL ABOUT THAT.
MR. CLINE: I WILL.
JUDGE DAVILA: AND WE CAN JUST GET AN IDEA OF WHEN AND IF THAT IS NECESSARY.
MR. CLINE: ALL RIGHT. MOSTLY I'M JUST TRYING TO GET THE NAMES, AND I'M HOPEFUL WE CAN DO THAT.
JUDGE DAVILA: SURE. AND THE GOVERNMENT IS WILLING TO HELP YOU ON THAT, TOO, IF YOU NEED THEIR ASSISTANCE.
MR. CLINE: I'M SURE THEY ARE.
JUDGE DAVILA: ALL RIGHT. WE'LL BE IN RECESS. THANK YOU.
COURT CLERK: COURT. COURT IS IN RECESS.
(RECESS FROM 3:17 P.M. UNTIL 3:32 P.M.)
(JURY IN AT 3:32 P.M.)
JUDGE DAVILA: ALL RIGHT. THANK YOU. WE'RE BACK ON THE RECORD. ALL PARTIES PREVIOUSLY PRESENT ARE PRESENT ONCE AGAIN. PLEASE BE SEATED. THANK YOU. LET ME INQUIRE OF THE WITNESS. MR. PARLOFF, DID YOU HAVE AN OPPORTUNITY TO CONSULT WITH YOUR COUNSEL?
ROGER PARLOFF: YES. THANKS.
JUDGE DAVILA: ALL RIGHT. YOU'RE WELCOME. ARE YOU READY TO PROCEED AT LEAST WITH THE EXAMINATION?
ROGER PARLOFF: YES. THANK YOU, YOUR HONOR.
JUDGE DAVILA: ALL RIGHT. THANK YOU.
BY MR. CLINE:
MR. CLINE: MR. PARLOFF, I THINK WHEN WE BROKE I HAD ASKED YOU IF YOU SPOKE WITH RICHARD KOVACEVICH, THE CEO OF WELLS FARGO AND A BOARD MEMBER OF THERANOS?
ROGER PARLOFF: YES.
MR. CLINE: YOU DID SPEAK WITH HIM?
ROGER PARLOFF: YES.
MR. CLINE: WILLIAM PERRY, THE FORMER SECRETARY OF DEFENSE --
ROGER PARLOFF: YES.
MR. CLINE: -- OF THE UNITED STATES AND ANOTHER BOARD MEMBER; RIGHT?
ROGER PARLOFF: YES.
MR. CLINE: PAUSE ONE SECOND AFTER MY QUESTION BEFORE YOU ANSWER IT.
ROGER PARLOFF: OH, SORRY.
MR. CLINE: GENERAL JAMES MATTIS, FORMER SITCOM COMMANDER AND BOARD MEMBER; RIGHT?
ROGER PARLOFF: YES.
MR. CLINE: GEORGE SHULTZ, FORMER SECRETARY OF STATE, AND OTHER THINGS AS WELL, AND ALSO A BOARD MEMBER; RIGHT?
ROGER PARLOFF: YES.
MR. CLINE: HENRY KISSINGER, FORMER SECRETARY OF STATE, BOARD MEMBER, FORMER NATIONAL SECURITY ADVISOR OF THE UNITED STATES, YOU SPOKE WITH HIM?
ROGER PARLOFF: YES.
MR. CLINE: AND GREG WASSON, CEO OF WALGREENS?
ROGER PARLOFF: YES.
MR. CLINE: MARK LARET, THE CEO OF UCSF MEDICAL CENTER; RIGHT?
ROGER PARLOFF: YES.
MR. CLINE: AND TO GO BACK TO MR. WASSON FOR A SECOND, YOU UNDERSTOOD THAT THERANOS HAD A PARTNERSHIP WITH WALGREENS; RIGHT?
ROGER PARLOFF: YES.
MR. CLINE: THAT'S BACK WHERE YOU GOT YOUR FIRST FINGER PRICK; RIGHT?
ROGER PARLOFF: YES.
MR. CLINE: MARK LARET, CEO OF UCSF MEDICAL CENTER; RIGHT?
ROGER PARLOFF: YES.
MR. CLINE: AND YOU UNDERSTOOD THAT THERANOS HAD SOME SORT OF A RELATIONSHIP OR POTENTIAL RELATIONSHIP WITH UCSF MEDICAL CENTER; CORRECT?
ROGER PARLOFF: YES, THE ARTICLE SAYS THAT.
MR. CLINE: LLOYD DEAN FROM DIGNITY HEALTH?
ROGER PARLOFF: YES.
MR. CLINE: AND AGAIN, YOU UNDERSTOOD THAT THERANOS HAD A RELATIONSHIP WITH DIGNITY HEALTH?
ROGER PARLOFF: YEAH, YES.
MR. CLINE: SCOTT SEROTA OF BLUE CROSS, BLUE SHIELD?
ROGER PARLOFF: IT WAS WORKING TO CREATE -- IT WAS IN TALKS, YEAH.
MR. CLINE: YES. WORKING ON CREATING A RELATIONSHIP?
ROGER PARLOFF: YEAH.
MR. CLINE: WITH SEVERAL HOSPITALS; RIGHT?
ROGER PARLOFF: YES.
MR. CLINE: ALL RIGHT. SCOTT SEROTA OF BLUE CROSS BLUE SHIELD, YOU TALKED WITH HIM?
ROGER PARLOFF: YES.
MR. CLINE: DR. DAVID HELFET, YOU TALKED WITH HIM; RIGHT?
ROGER PARLOFF: YES.
MR. CLINE: NOW, DR. HELFET AT THE TIME YOU SPOKE WITH HIM WAS THE CHIEF OF ORTHOPEDIC SURGERY AT THE HOSPITAL FOR SPECIAL SURGERY IN MANHATTAN; RIGHT?
ROGER PARLOFF: YES.
MR. CLINE: AND THE COMPANY HAD PROVIDED VALIDATION STUDIES TO DR. HELFET; CORRECT?
ROGER PARLOFF: YES.
MR. CLINE: AND YOU SPOKE WITH DR. HELFET ABOUT THOSE VALIDATION STUDIES; CORRECT?
ROGER PARLOFF: YES, I REFER TO THAT IN THE ARTICLE.
MR. CLINE: YOU DO.
ROGER PARLOFF: YEAH.
MR. CLINE: AND HE GAVE A POSITIVE ASSESSMENT; CORRECT?
ROGER PARLOFF: RIGHT.
MR. CLINE: YOU SPOKE WITH MS. HOLMES'S PARENTS, CHRIS AND NOEL; RIGHT?
ROGER PARLOFF: YES.
MR. CLINE: NOW, YOU TESTIFIED ON DIRECT THAT YOU TOURED, I THINK YOU SAID, A COMMERCIAL LABORATORY; RIGHT?
ROGER PARLOFF: YES.
MR. CLINE: AND THEN WHEN MR. BOSTIC ASKED YOU WHICH ONE, YOU SAID IT WAS CONFIDENTIAL; RIGHT?
ROGER PARLOFF: YES.
MR. CLINE: AND THEN ABOUT 30 SECONDS LATER ON A CLIP WE HEARD IT WAS QUEST; RIGHT?
ROGER PARLOFF: THE CLIP SAID WHAT IT SAID.
MR. CLINE: YES. TO MS. HOLMES; RIGHT?
ROGER PARLOFF: YEAH.
MR. CLINE: AND YOU ALSO TOLD THE GOVERNMENT THAT; RIGHT?
ROGER PARLOFF: I CAN'T RECALL, BUT I'LL TAKE YOUR WORD FOR IT.
MR. CLINE: ALL RIGHT. SO CAN WE JUST CALL IT QUEST?
ROGER PARLOFF: WELL, IT SLIPPED OUT WHEN I SPOKE TO ELIZABETH, AND I GUESS IT'S OUT NOW.
(LAUGHTER.)
BY MR. CLINE:
MR. CLINE: ALL RIGHT. SO YOU TOURED QUEST?
ROGER PARLOFF: YEAH.
MR. CLINE: ALL RIGHT. I KNEW WE WOULD GET THERE. NOW, THIS WAS A QUESTION THAT YOU MAY NOT WANT TO ANSWER, SO LISTEN CAREFULLY. SOME OF THE QUESTIONS THAT YOU ASKED MS. HOLMES ABOUT THE THERANOS TECHNOLOGY CAME FROM THERANOS'S COMPETITORS?
ROGER PARLOFF: YEAH, I DON'T -- I DID RESEARCH AND I HEARD VARIOUS CRITICISMS, AND I, I ASKED HER TO ADDRESS THOSE QUESTIONS AND CRITICISMS.
MR. CLINE: ALL RIGHT. AND CAN WE GO SO FAR AS TO SAY THAT SOME OF THOSE CRITICISMS THAT YOU HEARD, YOU HEARD FROM THERANOS'S COMPETITORS?
ROGER PARLOFF: UM, UM, I THINK I'LL SAY NO.
JUDGE DAVILA: MR. PARLOFF, THE RECORD SHOULD REFLECT THAT YOU PAUSED FOR A MOMENT TO REFLECT ON THAT. LET ME JUST SAY THAT YOU DO HAVE COUNSEL HERE. IF AT ANY TIME DURING ANY OF THE QUESTIONS BY MR. CLINE OR MR. BOSTIC OR ANYONE ELSE --
ROGER PARLOFF: YEAH.
JUDGE DAVILA: -- IF YOU WISH TO CONSULT WITH YOUR COUNSEL BEFORE YOU ANSWER, PLEASE LET ME KNOW AND I'LL, OF COURSE, PROVIDE YOU THAT OPPORTUNITY. AND DON'T BE SHY ABOUT THAT. THAT'S FINE.
ROGER PARLOFF: I DON'T WANT TO START ANOTHER PAUSE.
JUDGE DAVILA: NO. IF IT'S IMPORTANT TO YOU, IT'S IMPORTANT TO US, INCLUDING MR. CLINE. HE DOESN'T WANT TO INVADE ANY PRIVILEGE UNNECESSARILY.
ROGER PARLOFF: WELL, I'D LIKE TO VERY QUICKLY CONSULT WITH HIM.
JUDGE DAVILA: SURE. DO YOU HAVE ANY OTHER QUESTIONS FOR EFFICIENCY?
MR. CLINE: IF HE CAN JUST GO TALK QUICKLY TO HIS COUNSEL, WE DON'T EVEN NEED TO TAKE A BREAK.
JUDGE DAVILA: OKAY. I SEE A YOUNG MAN STANDING THERE. SIR, MAY I KNOW YOUR NAME?
MR. KOLTUN: YOU SAID YOUNG MAN, BUT I THINK YOU MEANT ME.
(LAUGHTER.)
JUDGE DAVILA: I KNOW I CONFUSED YOU WHEN I SAID YOUNG MAN, BUT NONETHELESS I'M REFERRING TO YOU, SIR. COULD YOU STATE YOUR NAME, PLEASE?
MR. KOLTUN: JOSHUA KOLTUN. MY APPEARANCE HAS BEEN MADE IN PAPERS BEFORE THE COURT. I WONDER IF I COULD TALK BRIEFLY WITH MR. CLINE TO SEE IF I CAN HELP SPEED THINGS UP A LITTLE BIT.
JUDGE DAVILA: I'M ALWAYS TO OFFER LAWYERS AN OPPORTUNITY TO DISCUSS TO HELP THINGS, YES. WE'LL TAKE A STANDING BREAK HERE. IS THAT ALL RIGHT?
MR. CLINE: A STANDING BREAK WOULD BE PERFECT.
(PAUSE IN PROCEEDINGS.)
JUDGE DAVILA: ALL RIGHT. THANK YOU. WE ARE BACK ON THE RECORD. ALL PARTIES PREVIOUSLY PRESENT ARE PRESENT AGAIN. OUR JURY IS PRESENT. MS. HOLMES IS PRESENT. MR. PARLOFF HAS RESUMED THE STAND. SIR, YOU'VE HAD AN OPPORTUNITY TO DISCUSS THINGS WITH YOUR ATTORNEY?
ROGER PARLOFF: YES.
JUDGE DAVILA: ALL RIGHT. AND AGAIN, IF AT ANY TIME YOU FEEL THAT YOU NEED TO DO THAT, PLEASE LET ME KNOW AND, OF COURSE, YOU'LL HAVE THE OPPORTUNITY.
ROGER PARLOFF: THANK YOU, YOUR HONOR.
JUDGE DAVILA: YOU'RE WELCOME.
BY MR. CLINE:
MR. CLINE: MR. PARLOFF, YOU HAD HEARD CRITICISMS OF THERANOS; CORRECT?
ROGER PARLOFF: YES.
MR. CLINE: AND SOME OF THOSE CRITICISMS CAME FROM THERANOS'S COMPETITORS; CORRECT?
ROGER PARLOFF: YES.
MR. CLINE: AND YOU THEN PUT SOME OF THOSE CRITICISMS TO MS. HOLMES IN YOUR DISCUSSIONS WITH HER; CORRECT?
ROGER PARLOFF: I ASKED HER TO COMMENT ON THOSE CRITICISMS.
MR. CLINE: YES. NOW, I'VE RUN THROUGH A LIST OF PEOPLE THAT YOU SPOKE TO FOR THE ARTICLE; CORRECT?
ROGER PARLOFF: YES.
MR. CLINE: YOU SPOKE TO OTHER PEOPLE AS WELL; RIGHT?
ROGER PARLOFF: YES.
MR. CLINE: SOME OF THE PEOPLE THAT YOU SPOKE WITH YOU QUOTED IN THE ARTICLE; CORRECT?
ROGER PARLOFF: YES.
MR. CLINE: AND THIS GOES WITHOUT SAYING, I SUPPOSE, BUT THE QUOTES IN THE ARTICLE ARE ACCURATE? THEY'RE WHAT THOSE PEOPLE TOLD YOU; RIGHT?
ROGER PARLOFF: YES.
MR. CLINE: ALL RIGHT. NOW, I'M GOING TO TURN BACK TO THE CONVERSATIONS WITH MS. HOLMES. WE'VE, WE'VE NOTED THAT SOME OF THOSE CONVERSATIONS WERE RECORDED AND WE'VE HEARD SOME OF THOSE. SOME OF THE CONVERSATIONS WERE UNRECORDED?
ROGER PARLOFF: THAT'S RIGHT.
MR. CLINE: AND FOR SOME OF THOSE CONVERSATIONS, YOU TOOK NOTES; RIGHT?
ROGER PARLOFF: YES.
MR. CLINE: AND IF I UNDERSTOOD YOU ON DIRECT, YOU HAD A SPIRAL NOTEBOOK; CORRECT?
ROGER PARLOFF: YES.
MR. CLINE: AND YOU'VE GOT SOME KIND OF A SHORTHAND THAT YOU USE; RIGHT?
ROGER PARLOFF: YES.
MR. CLINE: AND SO WHEN YOU'RE TALKING WITH SOMEONE ON THE PHONE OR IN PERSON, YOU HAVE YOUR SPIRAL NOTEBOOK THERE AND YOU'RE TAKING NOTES; RIGHT?
ROGER PARLOFF: USUALLY, YES.
MR. CLINE: ALL RIGHT. AND DID YOU DO THAT WHEN YOU WERE RECORDING IT AS WELL OR DO YOU NOT BOTHER TO TAKE NOTES?
ROGER PARLOFF: I USUALLY DO AS A BACKUP.
MR. CLINE: ALL RIGHT. BUT WE'RE GOING TO FOCUS ON THE UNRECORDED CONVERSATIONS HERE. SO LET'S SAY THAT YOU'RE HAVING A PHONE CALL WITH MS. HOLMES, AND YOU GET OFF THE CALL, AND YOU'VE GOT NOTES IN THIS SHORTHAND; RIGHT?
ROGER PARLOFF: UH-HUH, YES.
MR. CLINE: AND DO THE NOTES INCLUDE THE QUESTIONS THAT YOU'RE ASKING? IN OTHER WORDS, ARE YOU WRITING WHILE YOU'RE TALKING, OR DO YOU GO BACK AND FILL THAT IN LATER?
ROGER PARLOFF: TYPICALLY THEY INCLUDE THE QUESTION WHILE I'M, WHILE I'M TALKING. IT CAN BE ABBREVIATED. LIKE YOU SAY, IT'S DIFFICULT. BUT IF THERE'S SOME DOUBT ABOUT IT OR IF IT'S PARTICULARLY IMPORTANT, ONE, I WOULD GO BACK AFTER THE FACT AND FILL IT IN AS SOON AS I -- YOU KNOW, TO MAKE IT -- OFTEN THE, OFTEN THE VERBATIM QUALITY OF THE QUESTION IS NOT AS IMPORTANT AS -- SINCE YOU'RE NOT GOING TO QUOTE YOURSELF. BUT SOMETIMES IT IS, AND IN THAT CASE I WOULD GO BACK AS SOON AS POSSIBLE AND WRITE IT OUT AS ACCURATELY AS POSSIBLE.
MR. CLINE: ALL RIGHT. SO WE'RE TALKING ABOUT A HYPOTHETICAL PHONE CALL WITH MS. HOLMES DURING THIS 2014 INVESTIGATION THAT YOU'RE DOING?
ROGER PARLOFF: YEAH.
MR. CLINE: OR RESEARCH THAT YOU'RE DOING?
ROGER PARLOFF: YEAH.
MR. CLINE: AND SO YOU GET OFF THE PHONE. YOU'VE GOT THESE NOTES, HANDWRITTEN NOTES, AND THEY FIND THEIR WAY THEN INTO A DOCUMENT THAT RESIDES ON YOUR COMPUTER; RIGHT?
ROGER PARLOFF: YES.
MR. CLINE: AND TELL US ABOUT THAT PROCESS.
ROGER PARLOFF: SO TYPICALLY IF I'M NOT GOING TO WRITE THE ARTICLE IMMEDIATELY, I WOULD TRANSCRIBE THEM AS SOON AS POSSIBLE. IT COULD BE IMMEDIATELY, BUT IT COULD BE A COUPLE DAYS.
MR. CLINE: ALL RIGHT. AND WHEN YOU SAY "TRANSCRIBE THEM," THE NOTES ARE IN THIS SHORTHAND; RIGHT?
ROGER PARLOFF: YEAH. PUT THEM INTO ENGLISH WORDS.
MR. CLINE: ALL RIGHT. SO WHAT ENDS UP IN YOUR COMPUTER, I TAKE IT, IS NOT A VERBATIM RECITATION OF WHAT WAS SAID. IS THAT FAIR?
ROGER PARLOFF: IT IS SUPPOSED TO BE A VERBATIM RECITATION OF WHAT HOLMES SAID.
MR. CLINE: LIKE A TRANSCRIPT, IN OTHER WORDS?
ROGER PARLOFF: WELL, AS BEST I CAN DO.
MR. CLINE: ALL RIGHT.
ROGER PARLOFF: YEAH, I MEAN, I'M NOT, I'M NOT A, YOU KNOW, A SKILLED COURT REPORTER. I DO THE BEST I CAN WITH MY, YOU KNOW, MY SHORTHAND -- MY SPEED WRITING.
MR. CLINE: ALL RIGHT. SO AT THAT POINT WE HAVE A DOCUMENT ON YOUR COMPUTER AND WE ALSO HAVE HANDWRITTEN NOTES; RIGHT?
ROGER PARLOFF: YEAH.
MR. CLINE: ALL RIGHT. SO WHAT DO YOU DO THEN WITH THE HANDWRITTEN NOTES?
ROGER PARLOFF: AFTER 12 MONTHS, I THROW THEM OUT IN ACCORDANCE WITH "FORTUNE"'S POLICY. AT SOME POINT -- IT MIGHT BE 14 MONTHS. AT SOME POINT IT CHANGED FROM 12 TO 14 OR 14 TO 12. I CAN'T REMEMBER NOW. BUT YOU WERE SUPPOSED TO THROW THEM OUT, AND YOU SORT OF HAD TO BECAUSE THERE WAS JUST NO SPACE TO KEEP ALL OF THESE NOTES. IT WASN'T JUST ONE, ONE ARTICLE. IT WAS ALL -- EVERYTHING YOU WERE WORKING ON.
MR. CLINE: ALL RIGHT. SO THE, THE SHORT OF IT IS, THE HANDWRITTEN NOTES THAT YOU TOOK DURING YOUR CONVERSATION WITH MS. HOLMES ARE DESTROYED?
ROGER PARLOFF: THEY'RE THROWN OUT, YEAH.
MR. CLINE: ALL RIGHT. AND WHAT WE HAVE LEFT IS THE COMPUTER DOCUMENT THAT YOU HAVE PRODUCED?
ROGER PARLOFF: THAT'S RIGHT.
MR. CLINE: NOW, THE SET OF -- THE COMPUTER DOCUMENT THAT WE HAVE RECEIVED THAT REFLECTS YOUR CONVERSATIONS WITH MS. HOLMES -- BY THE WAY, IT'S AT TAB 1646 IN YOUR BOOK. YOU DON'T NEED TO LOOK AT THIS NOW, BUT IF YOU NEED TO, THAT'S WHERE YOU CAN FIND IT. ALL RIGHT? THAT DOCUMENT INCLUDES BOTH RECORDED AND UNRECORDED CALLS; RIGHT?
ROGER PARLOFF: YES.
MR. CLINE: ALL RIGHT. AND TELL US HOW YOU CREATED THAT DOCUMENT AS YOU WERE GOING ALONG? IN OTHER WORDS, DID YOU KEEP IT UP TO DATE? DID YOU DO IT IN SEQUENCE?
ROGER PARLOFF: UM, YES. I LIKE TO BE ABLE TO DO A KEY WORD SEARCH OF ALL OF MY CONVERSATIONS WITH ONE PERSON RATHER THAN GOING INTO DIFFERENT FILES. SO I TRIED TO ADD EACH NEW CONVERSATION ON TOP OF -- I MEAN, AFTER THE PREVIOUS ONE. IT GETS -- YEAH.
MR. CLINE: WOULD YOU SOMETIMES GO BACK AND FILL THINGS IN THAT YOU HAD NOT TRANSCRIBED?
ROGER PARLOFF: WELL, WHAT I WOULD SOMETIMES DO IS THAT I WOULD TRANSCRIBE MY SPEED WRITING NOTES, AND IF I HAD THE TAPE, TOO, THEN LATER I WOULD GO BACK AND FILL IN THE -- AND MAKE IT MORE ACCURATE WITH THE TAPE RECORDER.
MR. CLINE: ALL RIGHT. BUT, OF COURSE, IF YOU DIDN'T HAVE A RECORDING, YOU WEREN'T ABLE TO MAKE IT MORE ACCURATE?
ROGER PARLOFF: RIGHT.
MR. CLINE: ALL RIGHT. I WANT TO TURN NOW TO A SPECIFIC CONVERSATION THAT YOU TESTIFIED ABOUT ON DIRECT.
ROGER PARLOFF: YES.
MR. CLINE: YOU TESTIFIED ON DIRECT THAT YOU ASKED MS. HOLMES AT ONE POINT ABOUT THERANOS'S USE OF SIEMENS MACHINES. DO YOU REMEMBER THAT?
ROGER PARLOFF: YES.
MR. CLINE: AND YOU TESTIFIED, I THINK, THAT THIS HAPPENED IN A TELEPHONE CONVERSATION ON MAY 14TH, 2014?
ROGER PARLOFF: YES.
MR. CLINE: AND YOU TESTIFIED THAT YOU ASKED MS. HOLMES QUESTIONS TO THE EFFECT OF YOU DON'T KEEP A SPARE SIEMENS ANALYZER FOR OVERFLOW, AND NOT A MATTER OF WE CAN'T DO SUCH AND SUCH A TEST ON OUR PLATFORM, SO WE'LL NEED TO DO THAT ON SIEMENS ANALYZERS; RIGHT?
ROGER PARLOFF: RIGHT.
MR. CLINE: AND THOSE WERE LEADING QUESTIONS; RIGHT? A LEADING QUESTION -- AND I KNOW YOU KNOW THIS, BUT I'M GOING TO EXPLAIN IT FOR THE RECORD -- IS A QUESTION THAT SUGGESTS THE ANSWER THAT YOU'RE LOOKING FOR; RIGHT.
ROGER PARLOFF: YEAH.
MR. CLINE: LIKE THE QUESTION THAT I JUST ASKED YOU?
ROGER PARLOFF: IT WAS -- YEAH. YEAH. IT WAS PHRASED THAT WAY NOT FOR THE REASONS THAT YOU'RE PHRASING YOUR QUESTIONS THAT WAY.
MR. CLINE: WHY AM I PHRASING MY QUESTIONS THAT WAY?
ROGER PARLOFF: SO I WON'T GO OFF ON A TANGENT. I WOULD HAVE BEEN HAPPY TO HEAR HER GO OFF ON, YOU KNOW, GIVE ME -- SHE WAS, SHE WAS FREE TO -- YOU KNOW, IF THE ANSWER WAS, WAS, OH, YEAH, WE DO, I WOULD HAVE BEEN HAPPY TO HAVE 30 MORE QUESTIONS, OH, YOU DO?
MR. CLINE: MR. PARLOFF, LET ME STOP YOU. I'M GOING TO MOVE TO STRIKE.
JUDGE DAVILA: WELL, THAT IS WHAT HAPPENS.
(LAUGHTER.)
MR. CLINE: YOU KNOW, YOU ALWAYS ASK LEADING QUESTIONS, RIGHT.
MR. BOSTIC: I WAS --
JUDGE DAVILA: I'LL ALLOW THE ANSWER. YOU CAN ASK ANOTHER QUESTION.
MR. CLINE: ALL RIGHT.
MR. CLINE: THE TWO QUESTIONS THAT YOU PUT TO MS. HOLMES WERE LEADING QUESTIONS; RIGHT?
ROGER PARLOFF: YES, BUT ONLY BECAUSE I, I DIDN'T WANT TO -- I THOUGHT IT WAS ALREADY OBVIOUS AND I DIDN'T WANT TO OFFEND HER. I WOULD SAY, LOOK, YOU'RE NOT SAYING THIS, ARE YOU? I JUST WANT TO BE CLEAR.
MR. CLINE: ALL RIGHT.
ROGER PARLOFF: I WAS NOT, YOU KNOW -- I JUST -- I THOUGHT IT WAS ALREADY OBVIOUS, BUT I DIDN'T WANT TO LET SOMETHING LIKE THAT SLIP BY.
MR. CLINE: OKAY. AND HER ANSWERS, I THINK YOU TESTIFIED, WERE A VERBAL AGREEMENT, SUCH AS UH-HUH?
ROGER PARLOFF: UH-HUH.
MR. CLINE: LIKE THAT?
ROGER PARLOFF: UH-HUH, MEANING CORRECT.
MR. CLINE: SO I'M GOING TO ASK YOU SOME MORE QUESTIONS ABOUT THIS, BUT I THINK FOR SHORTHAND, I WANT TO REFER TO THIS AS THE SIEMENS CONVERSATION.
ROGER PARLOFF: OKAY.
MR. CLINE: OKAY. AND AGAIN, THERE'S NO RECORDING OF THIS; RIGHT?
ROGER PARLOFF: RIGHT.
MR. CLINE: AND NO HANDWRITTEN NOTE OF THIS?
ROGER PARLOFF: NOT ANYMORE.
MR. CLINE: THE RECORD IS YOUR COMPUTER FILE; RIGHT?
ROGER PARLOFF: YES.
MR. CLINE: AND DOES THAT STILL EXIST, BY THE WAY?
ROGER PARLOFF: YES.
MR. CLINE: ALL RIGHT. SO TAKE A LOOK AT 1646 IN YOUR BOOK, OR TAB 1646, AND GO TO PAGE 85 DOWN AT THE BOTTOM OF THE PAGE.
ROGER PARLOFF: OH. SORRY. THERE'S TWO -- THE PAGE NUMBERS OF THE TRIAL EXHIBIT, THERE'S TWO SETS OF PAGE NUMBERS.
MR. CLINE: MAY I APPROACH?
JUDGE DAVILA: YES.
MR. CLINE: LET ME SHOW YOU WHAT I'M LOOKING AT (INDICATING).
ROGER PARLOFF: OKAY.
BY MR. CLINE:
MR. CLINE: NOW, ARE YOU WITH ME ON PAGE 85?
ROGER PARLOFF: YES.
MR. CLINE: AND DO YOU SEE THAT THE -- WHAT I'VE CALLED THE SIEMENS CONVERSATION COVERS ABOUT FOUR LINES THERE, MAYBE A THIRD OF THE WAY DOWN THE PAGE?
ROGER PARLOFF: YES.
MR. CLINE: ALL RIGHT. NOW, THE "FORTUNE" ARTICLE WAS PUBLISHED IN JUNE OF 2014?
ROGER PARLOFF: YES.
MR. CLINE: ALL RIGHT. AND I WANT TO FAST FORWARD NOW TO OCTOBER 2015, ABOUT 16 MONTHS OR SO LATER.
ROGER PARLOFF: YES.
MR. CLINE: I THINK YOU WERE ASKED ON DIRECT ABOUT "THE WALL STREET JOURNAL" ARTICLE THAT CAME OUT.
ROGER PARLOFF: YEAH.
MR. CLINE: AND THAT WAS OCTOBER 15TH, 2015; RIGHT?
ROGER PARLOFF: RIGHT.
MR. CLINE: AND YOU READ IT IMMEDIATELY WHEN IT CAME OUT; RIGHT?
ROGER PARLOFF: YES.
MR. CLINE: AND ONE OF THE ISSUES THAT "THE WALL STREET JOURNAL" ARTICLE RAISED, I DON'T WANT TO GET INTO THE SUBSTANCE, BUT ONE OF THE ISSUES INVOLVED THE USE OF SIEMENS ANALYZERS; RIGHT?
ROGER PARLOFF: UM, YES.
MR. CLINE: AND, IN FACT, YOU, YOU WROTE AN ARTICLE YOURSELF THAT AFTERNOON SORT OF HIGHLIGHTING SOME OF THE KEY POINTS IN "THE WALL STREET JOURNAL" ARTICLE; RIGHT?
ROGER PARLOFF: YEAH.
MR. CLINE: AND THE FIRST KEY POINT THAT YOU NOTED INVOLVED SIEMENS ANALYZERS; RIGHT?
ROGER PARLOFF: YEAH.
MR. CLINE: OKAY. AND WHEN YOU READ "THE WALL STREET JOURNAL" ARTICLE, YOU BEGAN RECONSTRUCTING YOUR INTERACTIONS WITH MS. HOLMES LEADING UP TO YOUR JUNE 2014 ARTICLE. IS THAT FAIR?
ROGER PARLOFF: I DID TRY TO FIGURE OUT WHAT HAD HAPPENED.
MR. CLINE: RIGHT. AND IN THE COURSE OF THAT RECONSTRUCTION, YOU READ THROUGH YOUR COMPUTER DOCUMENT; RIGHT?
ROGER PARLOFF: I DIDN'T AT THAT TIME.
MR. CLINE: DIDN'T YOU GO THROUGH YOUR COMPUTER DOCUMENT AND ACTUALLY BOLD CERTAIN THINGS THAT YOU THOUGHT MIGHT BE IMPORTANT?
ROGER PARLOFF: I BOLDED CERTAIN THINGS -- WELL, I BOLDED CERTAIN THINGS AS I WAS WRITING BECAUSE I THOUGHT THIS WOULD BE A GOOD QUOTE AND SO ON. WHAT I DID AFTER -- AT SOME POINT EVENTUALLY AFTER "THE WALL STREET JOURNAL" ARTICLES CAME OUT IS THAT I DID KEY WORD SEARCHES. I LOOKED FOR CERTAIN WORDS AND NUMBERS TO TRY TO FIGURE OUT WHAT HAD HAPPENED. AND I ALSO BOLD FACED AT THAT POINT SOME PASSAGES THAT I FOUND.
MR. CLINE: ALL RIGHT. AND I WANT TO NOW FAST FORWARD AGAIN UNTIL YOUR FIRST INTERACTION WITH THE GOVERNMENT. SO NOW THIS IS THE END OF 2015 AND NOW WE'RE FAST FORWARDING TO APRIL OF 2018; RIGHT?
ROGER PARLOFF: YEAH. YES.
MR. CLINE: AND IN EARLY APRIL OF 2018 YOU GOT A CALL FROM THE U.S. ATTORNEY'S OFFICE HERE IN SAN FRANCISCO; RIGHT?
ROGER PARLOFF: YES.
MR. CLINE: AND WAS THAT MR. BOSTIC WHO CALLED YOU?
MR. CLINE: SOMEONE FROM THE OFFICE CALLED YOU?
ROGER PARLOFF: YES.
MR. CLINE: AND TOLD YOU THAT THEY WERE INVESTIGATING MS. HOLMES AND THERANOS; RIGHT?
ROGER PARLOFF: YES.
MR. CLINE: AND YOU AGREED TO MEET WITH THE GOVERNMENT; RIGHT?
ROGER PARLOFF: YES.
MR. CLINE: AND AT SOME POINT AROUND THE TIME OF THAT MEETING, YOU GOT A GRAND JURY SUBPOENA FOR DOCUMENTS; RIGHT?
ROGER PARLOFF: OH. I -- THAT WAS WRITTEN AT THE MEETING AFTER I TURNED OVER THE DOCUMENTS. I, I WAS NOT REPRESENTED BY COUNSEL. I WAS -- I WAS WILLING TO TURN OVER THE -- MY TAPES AND NOTES OF INTERVIEWS WITH ELIZABETH AND WITH THE CODEFENDANT, BUT NOT OTHER BY AND LARGE -- NOT OTHER ITEMS, NOT OTHER, NOT OTHER FILES. AND I WAS TRYING TO PROTECT THEM. AND I ASKED -- BASICALLY I WAS SAYING IF YOU WILL SUBPOENA THESE DOCUMENTS, I WILL NOT PROTEST THEM.
MR. CLINE: ALL RIGHT.
ROGER PARLOFF: AND SO THEY WENT AFTER THE FACT AND TRIED TO SUBPOENA THE DOCUMENTS THAT I WAS WILLING TO TURN OVER.
MR. CLINE: ALL RIGHT. SO ONE OF THE DOCUMENTS THAT YOU'VE PRODUCED IN THAT PROCESS WAS THE COMPUTER DOCUMENT WITH THE NOTES OF YOUR INTERVIEWS, OR INTERACTIONS WITH MS. HOLMES; RIGHT?
ROGER PARLOFF: YEAH.
MR. CLINE: NOW, THAT FIRST MEETING WITH THE GOVERNMENT WAS APRIL 12TH OF 2018. DO YOU REMEMBER THAT?
ROGER PARLOFF: THAT COULD BE.
MR. CLINE: AND THAT WAS IN NEW YORK?
ROGER PARLOFF: YES.
MR. CLINE: AND MR. BOSTIC WAS THERE; RIGHT?
ROGER PARLOFF: YES.
MR. CLINE: AND AN FBI AGENT WAS THERE; RIGHT?
ROGER PARLOFF: YES.
MR. CLINE: AND THEY, THEY -- YOU GAVE THEM THE COMPUTER DOCUMENT; RIGHT?
ROGER PARLOFF: YES.
MR. CLINE: AND THEY, THEY ASKED YOU IN THAT MEETING ABOUT THE, THE PORTION, THE FOUR LINES CONTAINING THE SIEMENS CONVERSATION; RIGHT?
ROGER PARLOFF: WELL, I DON'T -- NO, THEY DIDN'T READ ANYTHING. I, I ALSO, I HIGHLIGHTED CERTAIN THINGS FOR THEM THAT I THOUGHT MIGHT BE RELEVANT.
MR. CLINE: MAY I APPROACH, YOUR HONOR?
JUDGE DAVILA: YES.
ROGER PARLOFF: SO I THINK I READ THEM THAT -- OR, YEAH, I THINK I READ THEM THAT.
BY MR. CLINE:
MR. CLINE: I'M SORRY. YOU THINK YOU DID WHAT?
ROGER PARLOFF: I THINK I READ THEM THAT PORTION OF MY NOTES.
MR. CLINE: ALL RIGHT. SO YOU READ IT TO THEM AND THEY ASKED YOU ABOUT THEM; RIGHT?
ROGER PARLOFF: YEAH.
MR. CLINE: AND YOU TOLD THEM THAT BACK IN LATE 2015 YOU HAD FORGOTTEN ABOUT THAT EXCHANGE; RIGHT?
ROGER PARLOFF: THAT'S RIGHT.
MR. CLINE: AND YOU SAID THAT YOU HAD ONLY RECALLED THAT EXCHANGE IN FEBRUARY OF 2018; RIGHT?
ROGER PARLOFF: THAT COULD BE.
MR. CLINE: WOULD IT HELP YOU TO TAKE A LOOK AT THE MEMORANDUM OF THE INTERVIEW?
ROGER PARLOFF: OKAY.
MR. CLINE: MAY I APPROACH?
JUDGE DAVILA: YES.
BY MR. CLINE:
MR. CLINE: (HANDING.)
ROGER PARLOFF: UM, I, I --
JUDGE DAVILA: WAIT FOR HIS QUESTION. HE'LL ASK YOU ANOTHER QUESTION.
ROGER PARLOFF: OKAY.
BY MR. CLINE:
MR. CLINE: SO MY QUESTION IS ONLY THIS: DID YOU TELL THE GOVERNMENT, MR. BOSTIC AND AGENT SCUSSEL WHO WAS THERE, THAT YOU RECALLED THE INTERACTION WITH MS. HOLMES IN FEBRUARY OF 2018?
ROGER PARLOFF: I'M SURPRISED TO READ THAT, BECAUSE I THOUGHT I LEARNED IT A FEW MONTHS -- A COUPLE MONTHS EARLIER, LIKE IN AROUND -- IT WAS LATE 2017 WHEN I WAS GOING THROUGH THE NOTES AND STUMBLED ACROSS IT.
MR. CLINE: ALL RIGHT. BUT YOU DON'T HAVE ANY REASON TO DOUBT THAT THAT'S WHAT YOU TOLD THEM; CORRECT?
JUDGE DAVILA: MR. CLINE, DO YOU HAVE ADDITIONAL QUESTIONS?
MR. CLINE: I HAVE A FEW, YES. SHOULD WE CALL IT A DAY?
JUDGE DAVILA: I'VE TOLD THE JURY THAT WE WOULD END AT 4:00 O'CLOCK AND IT'S A LITTLE PAST 4:00 NOW. LADIES AND GENTLEMEN, WE'LL TAKE OUR EVENING RECESS NOW. WE'LL RESUME AT 9:00 O'CLOCK TOMORROW MORNING, PLEASE, 9:00 O'CLOCK TOMORROW MORNING. PLEASE REMEMBER THE ADMONISHMENT. DO NOT READ, DO ANY INVESTIGATION, LISTEN TO OR TALK TO ANYONE ABOUT THIS CASE OR ANYTHING TO DO WITH IT. HAVE A GOOD EVENING. WE'LL SEE YOU TOMORROW MORNING. YOU CAN STAND DOWN, SIR.
ROGER PARLOFF: OH. DO I JUST LEAVE THESE (INDICATING)?
JUDGE DAVILA: YEAH, JUST LEAVE THEM THERE.
(JURY OUT AT 4:05 P.M.)
JUDGE DAVILA: THANK YOU. PLEASE BE SEATED. THE RECORD SHOULD REFLECT THAT THE JURY HAS LEFT THE ROOM. YOU CAN STAND DOWN, SIR. BEFORE WE BREAK, MR. CLINE, IN REGARDS TO ANY OTHER ISSUE REGARDING MR. PARLOFF OR ANY PRIVILEGE OR ISSUE, I WOULD ENCOURAGE YOU TO SPEAK WITH HIS ATTORNEY, MR. PARLOFF'S COUNSEL TODAY, NOW, OR ANY TIME PRIOR TO YOUR RESUMPTION OF YOUR EXAMINATION. THAT MIGHT BE HELPFUL.
MR. CLINE: I THINK I'M PROBABLY DONE WITH THAT AREA, THE AREAS THAT WOULD IMPLICATE THAT. BUT I'LL THINK ABOUT THAT, AND I'VE GOT MR. KOLTUN'S NUMBER AND I'LL GIVE HIM A CALL IF NECESSARY.
JUDGE DAVILA: ALL RIGHT. THANK YOU. DO YOU ANTICIPATE THAT WE'LL HAVE NEED TO DISCUSS ANYTHING ON THIS TOPIC WITH THIS WITNESS OUTSIDE OF THE PRESENCE OF THE JURY?
MR. CLINE: I DON'T THINK SO.
JUDGE DAVILA: YOU THINK ALL OF THAT HAS BEEN RESOLVED YOU BELIEVE?
MR. CLINE: I THINK SO.
JUDGE DAVILA: ALL RIGHT. GREAT. ANYTHING ELSE BEFORE WE BREAK?
MR. SCHENK: YOUR HONOR, JUST ONE ISSUE. IF THE DEFENSE DECIDES TO PUT ON A CASE, WE RAISED WITH THE COURT A WEEK OR A WEEK AND A HALF AGO THE QUESTION OF JENCKS. MY RECOLLECTION IS THAT ON THE THIRD DAY OF THE MOTION IN LIMINE HEARING, THE COURT FOUND MOOT, OR FOUND UNNECESSARY TO RULE ON THE GOVERNMENT'S REQUEST BECAUSE THAT MORNING, OR MAYBE THE DAY PRIOR, I DON'T RECALL, THE DEFENSE PROVIDED SOME JENCKS TO THE GOVERNMENT. I WANT TO ASK THE COURT TO ACTUALLY ISSUE AN ORDER TO SAY THAT THE DEFENSE MUST PROVIDE JENCKS TO US. WE HAVE RECEIVED VERY LITTLE. IT MIGHT BE EVERYTHING, BUT I WANT TO MAKE SURE THAT THE DEFENSE IS ON NOTICE THAT THEY HAVE THAT JENCKS OBLIGATION.
JUDGE DAVILA: ALL RIGHT. THANK YOU. WELL, LET ME, LET ME JUST REAFFIRM THE COURT'S PREVIOUS ORDER REGARDING JENCKS MATERIAL. IT, IT REMAINS IN EFFECT AND IN PLACE, AND I'LL ASK THE DEFENSE TO PLEASE REVIEW YOUR DOCUMENTS, YOUR FILES, EVERYTHING THAT YOU HAVE, AND TO PLEASE DISCLOSE ANY JENCKS MATERIAL THAT YOU THINK IS APPROPRIATE, UNDERSTANDING THE LAW THAT YOU'RE REQUIRED TO PROVIDE. I WOULD ASK YOU TO DO THAT OVERNIGHT. IF YOU CAN LOOK AT YOUR FILES AND SEE WHERE THAT IS, AND AT LEAST CONTACT THE GOVERNMENT AND LET THEM KNOW WHAT YOU WISH TO PROVIDE AND WHAT YOU'RE GOING TO PROVIDE, OR WHETHER YOU HAVE NOTHING TO PROVIDE. JUST LET THEM KNOW WHERE YOU ARE AT. MR. DOWNEY.
MR. DOWNEY: YOUR HONOR, I JUST WANTED TO SAY FOR THE COURT'S ASSURANCE, THAT EXERCISE HAS ALREADY BEEN UNDERTAKEN, AND WHAT WE HAVE AFTER REVIEW OF THE ELECTRONIC FILES AND OTHER FILES HAS BEEN PROVIDED TO THE GOVERNMENT.
JUDGE DAVILA: OKAY.
MR. SCHENK: THANK YOU VERY MUCH.
JUDGE DAVILA: ALL RIGHT. THANK YOU. HAVE A GOOD EVENING. WE'LL SEE YOU TOMORROW. THERE'S NO NEED FOR AN 8:00 O'CLOCK MEETING THEN TOMORROW, IS THERE?
MR. LEACH: YOUR HONOR, I APOLOGIZE TO DO THIS PIECEMEAL. I DON'T THINK WE NEED TO MEET AT 8:00, BUT I DO ANTICIPATE, IF THE DEFENSE BEGINS ITS CASE TOMORROW, THEIR FIRST WITNESS, AS I UNDERSTAND IT, IS A PARALEGAL FROM THE WILLIAMS & CONNOLLY LAW FIRM WHO IS GOING TO SERVE AS A SUMMARY WITNESS. LAST NIGHT WE WERE PROVIDED FOR THE FIRST TIME SOME SUMMARY EXHIBITS. WE'RE STILL GOING THROUGH THEM. BUT I THINK THERE ARE AT LEAST ONE OR TWO WHERE WE MIGHT HAVE AN ISSUE THAT WE WOULD LIKE TO RAISE WITH THE COURT.
JUDGE DAVILA: SURE.
MR. LEACH: I DON'T THINK WE NEED TO MEET AT 8:00 FOR THAT, BUT IF WE CAN MEET AT 8:30, THE GOVERNMENT WOULD APPRECIATE IT.
JUDGE DAVILA: WELL, THAT'S FINE. I'M HERE. LET ME KNOW. JUST GIVE ME AN ALERT AND LET ME KNOW WHAT YOU NEED.
MR. LEACH: ALL RIGHT. THANK YOU.
JUDGE DAVILA: ALL RIGHT. THANKS. HAVE A GOOD EVENING.
MR. DOWNEY: THANK YOU.
MR. LEACH: THANK YOU.
COURT CLERK: COURT IS ADJOURNED.
(COURT ADJOURNED AT 4:09 P.M.)