Charge Conference on Conspiracy and Wire-Fraud Instructions
386 linesSAN JOSE, CALIFORNIA DECEMBER 3, 2021 P R O C E E D I N G S
(COURT CONVENED AT 9:06 A.M.)
(JURY OUT AT 9:06 A.M.)
JUDGE DAVILA: WE ARE ON THE RECORD IN THE HOLMES MATTER. ALL COUNSEL ARE PRESENT. MS. HOLMES IS PRESENT. GOOD MORNING. WE'RE OUTSIDE OF THE PRESENCE OF THE JURY. TODAY WE RESERVED THIS MORNING. LET ME INDICATE THAT WE JUST HAVE THIS MORNING TO HAVE THIS DISCUSSION. WE WON'T BE IN SESSION THIS AFTERNOON. BUT WE SCHEDULED THIS MORNING JUST TO HAVE A HIGH LEVEL, AS I DESCRIBED IT, A HIGH LEVEL DISCUSSION REGARDING YOUR JURY INSTRUCTIONS AND YOUR SUBMISSIONS, AND I'VE RECEIVED THE SUBMISSIONS. I'LL ASK A COUPLE OF QUESTIONS ABOUT THAT, AND THEN WE CAN JUST HAVE A CONVERSATION ABOUT THOSE. I DO WANT TO TALK ABOUT ONE EVIDENTIARY ISSUE, AND THIS IS IN LIGHT OF THE COURT'S RULING ON THE MOTION TO RECONSIDER. I THINK I ORALLY GAVE YOU AN ORDER REGARDING, MR. BOSTIC, RELATED TO YOUR RESPONSE TO I THINK IT WAS TX 14259, AND I INDICATED I WOULD ALLOW THAT TO BE ADMITTED. LET ME INDICATE THAT I THINK THAT SHOULD BE DONE IN FRONT OF THE JURY. SO I'M JUST POINTING TO THE DEFENSE. YOU SHOULD, AT SOME POINT IN TIME DURING YOUR CASE, SEEK TO ADMIT THAT IN FRONT OF THE JURY BASED ON THE COURT'S, THE COURT'S RULING.
MR. DOWNEY: UNDERSTOOD, YOUR HONOR.
JUDGE DAVILA: THERE'S NOT A DEARTH OF BINDERS, LET ME JUST SAY THAT AT THE OUTSET.
MS. SAHARIA: WE SUFFER FROM THE SAME PROBLEM.
JUDGE DAVILA: BUT YOU HAVE MORE SPACE AT YOUR TABLE. SO I DID RECEIVE, AND I KNOW YOU EXCHANGED YOUR 1176, WHICH IS THE GOVERNMENT'S REVISED PROPOSED INSTRUCTIONS, AND 1174, WHICH ARE MS. HOLMES'S REVISED INSTRUCTIONS. AS I WENT THROUGH THOSE REVISIONS AND LOOKED BACK ON 804 AND THE PREVIOUS SUBMISSIONS, OF COURSE THERE ARE SOME CHANGES NOW. AND I DON'T KNOW IF YOU'VE HAD AN OPPORTUNITY TO MEET AND CONFER. I DOUBT YOU HAVE BECAUSE THESE WERE SUBMITTED HERE, YOUR MOST RECENTS WERE SUBMITTED JUST YESTERDAY BY 10:00 A.M., AND I DOUBT SERIOUSLY WHETHER YOU'VE HAD A CHANCE TO DISCUSS EACH OF THE CHANGES. BUT AS I LOOK AT YOUR RECENT SUBMISSIONS, IT DOES SEEM THAT SOME OF THE OBJECTIONS, MS. SAHARIA, THAT YOU HAVE MADE IN YOUR PLEADINGS MAY HAVE BEEN -- THIS IS JUST A HIGH LEVEL REVIEW -- IT SEEMS LIKE THEY MAY HAVE BEEN RESOLVED BY SOME OF THE GOVERNMENT'S MORE UPDATED AND RECENT FILINGS OF THEIR INSTRUCTIONS. WE'LL SEE. WE'LL SEE. SO THIS MORNING IS I DON'T ANTICIPATE THAT WE WILL ACHIEVE A FINAL FINALITY OF THE INSTRUCTIONS, BUT I APPRECIATE THE OPPORTUNITY TO HEAR FROM BOTH SIDES JUST AT A HIGH LEVEL AS TO WHAT YOU THINK THIS INSTRUCTION SHOULD BE. WE'RE STILL IN THE DEFENSE CASE, AND THERE MAY BE ADDITIONAL INSTRUCTIONS THAT WOULD BE FORTHCOMING BASED ON THE DEFENSE ADMISSIONS OF OTHER WITNESSES OR OTHER EVIDENCE. SO WE'LL BEAR THAT IN MIND. SO THIS MORNING WHAT I THOUGHT WE WOULD DO -- OR LET ME ASK YOU FIRST, HAVE YOU HAD ANY DISCUSSION? ARE THERE ANY THINGS THAT EITHER SIDE WANTS TO SAY BEFORE WE JUST PORE THROUGH -- YES, MS. VOLKAR. THANK YOU.
MS. VOLKAR: YES, YOUR HONOR. ONE ESSENTIALLY ADMINISTRATIVE POINT. I DO NOT BELIEVE THAT EITHER OF THE SIDES HAVE HAD DISCUSSION TO ANSWER YOUR QUESTION, BUT THE GOVERNMENT DOES WANT TO SAY, WITH OUR AMENDED FILING YESTERDAY, WE ATTACHED THE VERDICT FORM, THE SAME VERDICT FORM WE HAD SUBMITTED TO THE COURT IN MAY. AND AS I WAS REVIEWING THAT THIS MORNING, I DID REALIZE THAT IN ERROR WE INCLUDED COUNT NINE --
JUDGE DAVILA: RIGHT.
MS. VOLKAR: -- AS WE DID INITIALLY, AND I JUST WANT TO SAY THAT WAS INADVERTENT. WE REMOVED COUNT NINE THROUGHOUT THE AMENDED JURY INSTRUCTIONS, AND TO THE EXTENT THAT THE COURT WOULD LIKE US TO SUBMIT AN AMENDED VERDICT FORM REFLECTING THAT AS WELL, WE STAND READY TO DO SO. BUT BEFORE WE GOT STARTED WITH OUR DISCUSSION, I WANTED TO BE ABSOLUTELY CLEAR THAT THE VERDICT FORM WE SUBMITTED ERRONEOUSLY INCLUDES COUNT NINE.
JUDGE DAVILA: THANK YOU. AND I EXPECT THERE WILL BE SOME MINOR CHANGES LIKE THAT. THANK YOU FOR DRAWING THAT TO MY ATTENTION. THAT'S WHY WE'RE HAVING THIS DISCUSSION THIS MORNING.
MS. VOLKAR: THANK YOU.
JUDGE DAVILA: SO WHAT I PROPOSE TO DO, IF YOU'D LIKE -- DO YOU HAVE THOUGHTS ABOUT HOW YOU WOULD LIKE TO PROCEED THE ANALYSIS? MS. SAHARIA, GOOD MORNING.
MS. SAHARIA: GOOD MORNING, YOUR HONOR. WE HAVE DIVIDED THE INSTRUCTION AMONGST MYSELF, MR. CLEARY, AND MR. LEMENS KIND OF ON A TAG TEAM BASIS. BUT I DON'T KNOW WHAT THE COURT HAS IN MIND, WHETHER YOU WANT TO PROCEED INSTRUCTION BY INSTRUCTION OR WHETHER THERE'S SOME YOU WANT TO TALK ABOUT NOW AND SOME YOU WANT TO POSTPONE. THE PARTIES HAVE NOT MET AND CONFERRED. I DO THINK A FEW OF OUR OBJECTIONS HAVE BEEN RESOLVED. I THINK WE HAVE SOME NEW ONES BASED ON THEIR AMENDMENTS, WHICH WE CAN TALK THROUGH TODAY. EXCUSE ME. I DO JUST WANT TO MAKE CLEAR THAT WE HAVE NOT OBJECTED TO THE INSTRUCTIONS RIGHT NOW BASED ON THE STATE OF THE RECORD, AND BECAUSE THE EVIDENCE IS STILL OPEN AND THE DEFENSE CASE IS STILL OPEN, AND I DO EXPECT THAT THERE WILL BE A SMALLER NUMBER OF THINGS TO WORK THROUGH AT THE CLOSE OF EVIDENCE RELATED TO THE OBJECTIONS AND THE INSTRUCTIONS. SO I JUST WANTED TO KIND OF PUT THAT MARKER DOWN TO MAKE CLEAR THAT WE RESERVE THE RIGHT TO PROPOSE ADDITIONAL INSTRUCTIONS OR TO -- WE THINK THERE WILL NEED TO BE A SUMMARY OF THE ALLEGATIONS IN THE INDICTMENT THAT GOES INTO THESE INSTRUCTIONS FOR THE JURY, AND WE THINK IT'S BEST TO TAKE THAT UP AT THE CLOSE OF EVIDENCE.
JUDGE DAVILA: OKAY.
MS. VOLKAR: YOUR HONOR, FOR THE GOVERNMENT'S PART -- KELLY VOLKAR ON BEHALF OF THE UNITED STATES -- I WILL BE SHARING THIS WITH MY COLLEAGUE, MR. LEACH. SO I'LL TAKE SOME INSTRUCTIONS AND HE'LL TAKE OTHERS. IN MY MIND, I SORT OF GROUPED THE INSTRUCTIONS INTO SORT OF THE BATCH WHERE THERE'S VERY LITTLE OR NO DISPUTE BETWEEN THE PARTIES, WHICH IS A LOT OF THE STANDARD DUTY TO DELIBERATE INSTRUCTIONS, AND THEN I THINK IN MY MIND THERE'S THE MORE SUBSTANTIVE INSTRUCTIONS WHERE THERE'S MORE SIGNIFICANT DISPUTES BETWEEN THE PARTIES. IT CERTAINLY IS UP TO YOUR HONOR, BUT I THOUGHT THAT THE TIME TODAY MIGHT BE BEST SPENT ON THOSE MORE SUBSTANTIVE ONES. I IMAGINE IT WILL BE HARDER FOR THE PARTIES THROUGH MEET AND CONFER TO COME TO REAL AGREEMENT IN THAT AREA WITHOUT FURTHER GUIDANCE FROM THE COURT; WHEREAS ON THOSE, AGAIN, I'LL CALL THEM MORE RUN-OF-THE MILL INSTRUCTIONS, SUCH AS THE DUTY TO DELIBERATE, ET CETERA, IT MIGHT BE EASIER FOR THE PARTIES TO COME TO AGREEMENTS THERE.
JUDGE DAVILA: WELL, THANK YOU. I WAS LOOKING AND I THOUGHT WE PROBABLY -- TO YOUR POINT, MS. VOLKAR, WE PROBABLY DON'T NEED TO HAVE SERIOUS DISCUSSION THIS MORNING ABOUT THE 7 SERIES, ABOUT THE NINTH CIRCUIT MODEL 7 SERIES, WHICH ARE THE FINAL INSTRUCTIONS, DUTY TO DELIBERATE, ET CETERA. I KNOW THERE ARE SOME SUGGESTED AMENDMENTS TO THOSE, BUT IT SEEMS LIKE THE TWO OR THREE HOURS WE HAVE THIS MORNING, MAYBE IT WOULD BE BETTER SPENT ON --
MS. SAHARIA: THAT'S FINE, YOUR HONOR.
JUDGE DAVILA: -- SOME OF THE MORE SUBSTANTIVE. DO YOU AGREE WITH THAT?
MS. SAHARIA: I DO, AS LONG AS AT SOME POINT, IF WE NEED TO, WE HAVE THE OPPORTUNITY TO STATE ON THE RECORD ANY OBJECTIONS THAT WE MAY HAVE TO THE INSTRUCTIONS AS TO THE 7 SERIES. BUT I AGREE THAT DOES MAKE SENSE TO FOCUS ON THE SUBSTANTIVE INSTRUCTIONS TODAY.
JUDGE DAVILA: RIGHT. AND LET ME SAY, THIS IS NOT THE ONLY DISCUSSION THAT WE'RE GOING TO HAVE.
MS. SAHARIA: UNDERSTOOD.
JUDGE DAVILA: THIS IS NOT THE ONLY CHARGING CONFERENCE THAT WE'RE GOING TO HAVE. THIS IS, AS I ADVERTISED IT PREVIOUSLY, JUST AN OPPORTUNITY TO HAVE A HIGH LEVEL DISCUSSION ABOUT WHERE WE ARE.
MS. SAHARIA: UNDERSTOOD, YOUR HONOR.
JUDGE DAVILA: SO YOU'LL HAVE AN OPPORTUNITY TO MAKE ANY OBJECTIONS AS TO THE FINAL INSTRUCTIONS YOU WISH. THIS IS JUST INFORMATIVE FOR ME, AND FOR EACH OF YOU I HOPE. OKAY.
MS. VOLKAR: YOUR HONOR, I WILL JUST SAY THAT I THINK THE SAME MAY HOLD TRUE FOR THE 3 SERIES AS WELL. AND IN THE 3 SERIES -- I THINK THERE'S A HANDFUL OF 4 SERIES, SUCH AS THE DUAL ROLE EXPERT TESTIMONY, AND THOSE WERE THE INSTRUCTIONS THAT I HAD IN MIND WHEN I WAS THINKING THAT THE PARTIES DON'T SEEM TO BE PARTICULARLY FAR APART ON VERY MANY OF THOSE.
JUDGE DAVILA: RIGHT. DO YOU AGREE?
MS. SAHARIA: I THINK THAT'S LARGELY RIGHT, YOUR HONOR. THERE'S A FEW 3 SERIES INSTRUCTIONS THAT I THINK THE GOVERNMENT HAS OMITTED FROM ITS INSTRUCTIONS. BUT APART FROM THOSE ONES, I THINK THE REAL DISPUTE IS, YOU KNOW, LARGELY THE SUBSTANTIVE INSTRUCTIONS.
JUDGE DAVILA: RIGHT. AND LET ME SAY, AS I LOOKED AT SOME OF THE -- AT YOUR INSTRUCTIONS, I DO NOTE THAT I ALSO CALLED ATTENTION TO THE PRELIMINARY INSTRUCTIONS THAT THE COURT GAVE, AND THE PRELIMINARY INSTRUCTIONS, AS I REVIEWED THEM, CONTAINED MANY OF THE -- SOME OF THE CHANGES THAT THE DEFENSE ADVOCATED FOR. AND WHEN I WENT THROUGH THOSE, IT SEEMED LIKE SOME OF THESE ARGUMENTS MAY -- YOU'LL TELL ME, MS. SAHARIA, BUT IT SEEMS LIKE SOME OF THESE ARGUMENTS MAY BE RESOLVED BY THAT SAME ANALYSIS, BUT YOU MIGHT HAVE SOME NEW ARGUMENTS AS WELL.
MS. SAHARIA: THAT'S RIGHT. I THINK THE COURT -- SOME OF OUR OBJECTIONS WE MADE IN CONNECTION WITH OUR PRELIMINARY INSTRUCTIONS, AND THE COURT REJECTED SOME OF THEM AND ACCEPTED SOME OF THEM, AND SO I'M HAPPY TO POINT THE COURT KIND OF AS APPROPRIATE AS WE GO ALONG.
JUDGE DAVILA: OKAY. WELL --
MS. VOLKAR: THE SAME FOR THE GOVERNMENT, YOUR HONOR. THE PRELIMINARY INSTRUCTIONS, SOME OF THE DEFENSE'S ADDITIONS WERE GRANTED OVER GOVERNMENT OBJECTION. BUT FROM THE GOVERNMENT'S PERSPECTIVE, WE SORT OF START AT THE PLACE WHERE THE COURT MAY FOLLOW THE SAME ANALYSIS, AND WE'RE HAPPY TO REARGUE THEM, BUT WE ALSO UNDERSTAND THAT OUR OBJECTIONS ARE NOTED, AND WE'RE HAPPY TO MOVE ON TO MORE SUBSTANTIVE ISSUES.
JUDGE DAVILA: OKAY. THANK YOU. WHERE SHOULD WE BEGIN, MS. SAHARIA?
MS. SAHARIA: WELL, I HAVE PRIMARY RESPONSIBILITY FOR THE SUBSTANTIVE INSTRUCTIONS, AT LEAST THE CORE ONES, CONSPIRACY AND WIRE FRAUD. SO IF THE COURT WANTS TO START THERE, I THINK WE COULD START WITH CONSPIRACY.
JUDGE DAVILA: LET'S SEE. I THINK THIS IS 820?
MS. SAHARIA: CORRECT.
JUDGE DAVILA: THIS IS IN DOCKET 1174. THIS IS FOUND ON PAGE 7. AND IN DOCUMENT 1176, THIS IS FOUND ON PAGE 15, I BELIEVE.
MS. SAHARIA: YES, CORRECT.
JUDGE DAVILA: PLEASE SING OUT AND CORRECT ME.
MS. SAHARIA: YES, I HAVE THOSE TWO DOCUMENTS IN FRONT OF ME AS WELL.
JUDGE DAVILA: SO SING OUT IF YOU NEED ME TO GO TO A DIFFERENT AREA OR A DIFFERENT LOCATION SO I CAN TRACK. ALL RIGHT. SO, MS. SAHARIA, I'M AT PAGE 7 AND YOUR 820 PROPOSED NUMBER 27 THROUGH 41, I THINK, IS WHAT YOU ADVOCATE.
MS. SAHARIA: CORRECT, YOUR HONOR.
JUDGE DAVILA: I THINK THAT'S FOUND ON PAGE 36 OF YOUR ORIGINAL SUBMISSION 809; IS THAT CORRECT?
MS. SAHARIA: I WILL TELL YOU IN A MOMENT, YOUR HONOR. YES, THAT'S CORRECT.
JUDGE DAVILA: AND ALSO YOU CITE TO 41, WHICH IS ON PAGE 56 OF 809.
MS. SAHARIA: CORRECT.
JUDGE DAVILA: YOU'RE THERE?
MS. VOLKAR: I AM, YOUR HONOR. THANK YOU.
JUDGE DAVILA: ALL RIGHT. MS. SAHARIA.
MS. SAHARIA: SO I THINK THE FIRST ISSUE IS ONE THAT I THINK PERMEATES THE INSTRUCTIONS, WHICH IS THE FACT THAT WE HAVE TWO DIFFERENT CHARGED CONSPIRACIES AND TWO DIFFERENT CHARGED SCHEMES TO DEFRAUD. THE GOVERNMENT HAS ADDED TO ITS REVISED INSTRUCTIONS ON PAGE 15 AT ECF 1176 A BRIEF DESCRIPTION OF THE TWO CHARGED CONSPIRACIES, THE INVESTOR CONSPIRACY AND THE PAYING PATIENTS CONSPIRACY. BUT OUR POSITION IS THAT IT'S GOING TO BE VERY COMPLICATED AND CONFUSING FOR THE JURY TO HAVE THE TWO CONSPIRACIES AND THE TWO SCHEMES TO DEFRAUD CHARGED IN THE SAME INSTRUCTION, PARTICULARLY WHEN WE GET TO THINGS LIKE PINKERTON LIABILITY AND COSCHEMER LIABILITY -- WHICH WE OBJECT TO THOSE INSTRUCTIONS -- BUT ASSUMING THE COURT IS GOING TO GIVE THOSE INSTRUCTIONS, IT'S GOING TO GET VERY COMPLICATED, WE THINK, FOR THE JURY TO UNDERSTAND HOW THE DIFFERENT CHARGES RELATE TO THE DIFFERENT CONSPIRACIES OR THE SCHEMES TO DEFRAUD, AND THERE'S A RISK OF THE JURY KIND OF MIXING AND MATCHING ACROSS THE CONSPIRACIES ON THE SCHEMES. I ALSO THINK WHEN WE GET TO WIRE FRAUD IT WOULD BE -- AND AGAIN, OUR POSITION IS THAT THERE SHOULD BE A SUMMARY OF THE ALLEGED MISSTATEMENTS IN THE JURY INSTRUCTIONS, WHICH WE WILL PROPOSE AT THE CLOSE OF EVIDENCE, THAT IT'S GOING TO BE COMPLICATED TO DO ALL OF THAT IN ONE WIRE FRAUD INSTRUCTION, AS OPPOSED TO ONE WIRE FRAUD INSTRUCTION ON THE PATIENT COUNTS AND ONE WIRE FRAUD INSTRUCTION ON THE INVESTOR COUNTS. SO JUST OUR FIRST KIND OF OVERALL POINT IS THAT WE THINK THE COURT SHOULD INSTRUCT SEPARATELY ON CONSPIRACY TO COMMIT WIRE FRAUD AGAINST INVESTORS, AND THEN SEPARATELY ON CONSPIRACY TO COMMIT WIRE FRAUD AGAINST PAYING PATIENTS. SO THAT'S KIND OF MY OVERALL POINT THAT I WOULD MAKE. I DON'T KNOW, DO YOU WANT TO GO POINT BY POINT? SHOULD MS. VOLKAR RESPOND TO THAT?
JUDGE DAVILA: YEAH, LET ME HEAR FROM MS. VOLKAR INITIALLY. YES, MS. VOLKAR.
MS. VOLKAR: THANK YOU, YOUR HONOR. THE GOVERNMENT'S POSITION, AND IT MAY BE REPEATED OFTEN TODAY, IS THIS IS A WIRE FRAUD CASE AND A CONSPIRACY CASE. AND THE COURT HAS HAD MANY WIRE FRAUD AND CONSPIRACY CASES, MOST RECENTLY THE CHANG CASE, THE KRAMER CASE. I KNOW THE COURT IS VERY FAMILIAR WITH THOSE. ONE OF THE GOVERNMENT'S MAIN OBJECTIONS TO THE FORMAT THAT THE DEFENSE HAS PROPOSED IS BREAKING OUT WHAT COULD BE IN ONE INSTRUCTION ACROSS ESSENTIALLY 10 TO 15 PAGES AND BREAKING DOWN AND ADDING TO THE MODEL INSTRUCTION SIGNIFICANT DETAIL THAT, IN THE GOVERNMENT'S VIEW, IS REALLY UNNECESSARY. THE MODEL INSTRUCTIONS HAVE BEEN TRIED AND TRUE, AND THE COURT HAS USED THEM OFTEN, AND WE THINK THAT THEY SHOULD LARGELY CONTROL.
WHAT WE ADDED WAS ACTUALLY IN RESPONSE TO THE PARTIES' MEET AND CONFER FOR THE PRELIMINARY INSTRUCTIONS, AND WE WENT BACK TO THE COURT'S ORDER IN ECF 1006, AND AT THE TIME THE PARTIES HAD AGREED ON THIS DESCRIPTION OF THE CHARGES AND WE DID TAKE THE DEFENSE'S POINT THAT THE TIME PERIOD, FOR EXAMPLE, SHOULD BE DESCRIBED IN THE INSTRUCTION. BUT THE GOVERNMENT'S POSITION IS THAT A BRIEF DESCRIPTION IS SUFFICIENT ALONG WITH THE MODEL INSTRUCTION. OF COURSE, THE PARTIES WILL HAVE LEAVE TO ARGUE WHAT THEY WANT TO IN CLOSING ARGUMENTS, BUT FOR THE INSTRUCTIONS, THEY SHOULD BE LEGALLY CORRECT, THEY SHOULD BE CLEAR FOR THE JURY, AND THEY SHOULD BE BRIEF SO THAT THE JURY ISN'T HERE FOR HOURS AND HOURS FOR INSTRUCTIONS. IT'S NOT MEANT TO BE A LEGAL TREATISE. IT'S JUST MEANT TO INSTRUCT THEM ON THE LAW. AND WITH THAT IN MIND, I THINK THAT THE -- WE'LL GET TO SPECIFIC UNANIMITY EVENTUALLY, BUT IT'S VERY CLEAR IN NINTH CIRCUIT CASE LAW, THE QUESTION IS, IS THERE A GENUINE RISK OF JUROR CONFUSION? AND I GUESS THIS IS WHERE THE GOVERNMENT DISAGREES PRETTY STRONGLY WITH THE DEFENSE, BECAUSE I SEE NO GENUINE RISK FOR JUROR CONFUSION HERE. THERE ARE TWO SCHEMES. THERE ARE TWO CONSPIRACIES. ONE RELATES TO INVESTORS. ONE RELATES TO PATIENTS. I DON'T -- I GUESS I RESPECTFULLY DISAGREE THAT IT WOULD BE CONFUSING TO THE JURY THAT, FOR EXAMPLE, WHETHER OR NOT THE TRANSMISSION TO E.T. OF HER PATIENT TEST RESULTS RELATED TO THE INVESTOR SCHEME TO DEFRAUD. I THINK THE JURY IS SMARTER THAN THAT.
MS. SAHARIA: I MEAN, ON THAT POINT, THE NINTH CIRCUIT INSTRUCTIONS EXPRESSLY CAUTION ON THINGS LIKE PINKERTON LIABILITY AND COSCHEMER LIABILITY WHEN THERE'S TWO CONSPIRACIES OR TWO SCHEMES, THAT IT'S ADVISABLE TO GIVE TWO SEPARATE INSTRUCTIONS. WE'RE GETTING A LITTLE BIT AHEAD OF OURSELVES ON THAT PARTICULAR ISSUE. BUT I'LL JUST REITERATE OUR POSITION BEING THAT WE DO THINK THE COURT SHOULD INSTRUCT SEPARATELY ON BOTH CONSPIRACIES AND BOTH SCHEMES. I THINK THAT'S A LITTLE SEPARATE THAN THE OTHER ISSUE THAT MS. VOLKAR ALLUDED TO, WHICH IS THAT THE DEFENSE INSTRUCTIONS DIVIDED OUT THE INDIVIDUAL ELEMENTS OF CONSPIRACY AND WIRE FRAUD, AND I DO UNDERSTAND THAT AT THE TIME OF THE PRELIMINARY INSTRUCTIONS, THE COURT EXPRESSED SOME HESITATION TO DO -- TO HAVE THAT LONGER RECITATION. WE WOULD REQUEST THAT THE COURT DO SO, BUT I THINK THAT ISSUE IS A LITTLE SEPARATE FROM THE ISSUE OF CHARGING SEPARATELY AS TO THE TWO CONSPIRACIES AND THE TWO SCHEMES.
JUDGE DAVILA: ALL RIGHT. THANK YOU. AND I THINK -- ARE YOU STILL, MS. SAHARIA, ARE YOU STILL PROPOSING YOUR INSTRUCTIONS THAT ARE IN 809? OR HAVE THOSE CHANGED?
MS. SAHARIA: YES, YOUR HONOR, WE WOULD REQUEST THAT THE COURT GIVE THE INSTRUCTIONS IN 809.
JUDGE DAVILA: OKAY.
MS. SAHARIA: SO APART FROM THAT GENERAL OBJECTION, LET ME MOVE TO MORE SPECIFIC OBJECTIONS. LOOKING AT THE GOVERNMENT'S NEW PROPOSED 820 AT PAGE 15 WHERE THE GOVERNMENT ADDED THE BRIEF DESCRIPTION OF THE TWO CONSPIRACIES, WE DO THINK THAT IT WOULD BE, AT A MINIMUM, ADVISABLE TO TELL THE JURY, FOR INSTANCE, AT THE SECOND PARAGRAPH, "THE DEFENDANT IS CHARGED IN COUNT ONE OF THE INDICTMENT WITH CONSPIRING TO COMMIT WIRE FRAUD AGAINST INVESTORS AND THERANOS DURING THE PERIOD OF 2010 TO 2015." I DO THINK IT WOULD BE ADVISABLE TO SAY "AS DEFINED LATER IN THESE INSTRUCTIONS" OR "AS WIRE FRAUD IS DEFINED LATER IN THESE INSTRUCTIONS" TO MAKE CLEAR TO THE JURY THAT IT NEEDS TO -- THE CONSPIRACY NEEDS TO BE A CONSPIRACY TO COMMIT WIRE FRAUD AS THE COURT IS GOING TO DEFINE WIRE FRAUD FOR THE JURY SO THAT THE SPECIFIC INDICTMENT ALLEGATIONS THAT RELATES TO EACH OF THESE TWO CONSPIRACIES IS INCORPORATED INTO THE CONSPIRACY INSTRUCTIONS.
JUDGE DAVILA: EXCUSE ME. WOULDN'T THAT -- WHEN WE GET TO THE WIRE FRAUD -- AND I KNOW SOMETIMES WE GET AHEAD OF OURSELVES -- WHEN WE GET TO THAT, I'M JUST CURIOUS WHETHER THAT WIRE INSTRUCTION WILL SAY, "AS CHARGED, THE CONSPIRACY," AND THAT WILL DEFINE IT AND REFERENCE THE JURY TO THE CONSPIRACY SUCH THAT IT WOULD SOLVE THAT.
MS. SAHARIA: I DON'T THINK SO, YOUR HONOR. I THINK THAT, AT LEAST AS THE WAY THAT I UNDERSTAND CONSPIRACY AND WIRE FRAUD INSTRUCTIONS TO FIT TOGETHER, WIRE FRAUD IS KIND OF THE FREE STANDING OFFENSE. IT IS THE SUBSTANTIVE OFFENSE THAT IS CHARGED, AND I DON'T THINK THAT IT WOULD NECESSARILY MAKE SENSE FOR THE WIRE FRAUD INSTRUCTION TO REFER BACK TO CONSPIRACY. THE CONSPIRACY IS THE CONSPIRACY TO COMMIT THAT SUBSTANTIVE OFFENSE. SO I THINK, IF ANYTHING, IT'S THE CONSPIRACY INSTRUCTION THAT SHOULD INCORPORATE THE LATER INSTRUCTION OF WIRE FRAUD.
JUDGE DAVILA: I SEE WHAT YOU'RE SAYING. THE CONSPIRACY SHOULD TALK ABOUT CONSPIRACY TO WHAT --
MS. SAHARIA: EXACTLY.
JUDGE DAVILA: -- AND RELATING TO THE WIRE FRAUD.
MS. SAHARIA: RIGHT, AND NOT JUST WIRE FRAUD IN THE ABSTRACT, BUT WIRE FRAUD AS THE COURT IS GOING TO INSTRUCT THE JURY LATER ON IN THE INSTRUCTIONS.
JUDGE DAVILA: OKAY. MS. VOLKAR.
MS. VOLKAR: YOUR HONOR, IF I UNDERSTAND MS. SAHARIA CORRECTLY, I DON'T SEE ANY ISSUE WITH THE COURT ADDING THE -- I THINK YOU DID THIS IN THE PRELIMINARY INSTRUCTIONS, "THE COURT WILL DEFINE WIRE FRAUD FOR YOU IN A MOMENT." I THINK THAT'S FINE.
JUDGE DAVILA: AND I THINK THAT'S WHAT I WAS REFERRING TO AND WHAT I WAS REFERENCING, MS. SAHARIA. I NEGLECTED TO BRING THE PRELIMINARY INSTRUCTIONS THAT I GAVE. THAT'S OKAY, ALYX.
MS. VOLKAR: YOUR HONOR, I HAVE A COPY. WOULD YOU LIKE ME TO HAND IT UP?
JUDGE DAVILA: NO. THAT'S FINE. I HAVE PLENTY OF BINDERS UP HERE.
(LAUGHTER.)
JUDGE DAVILA: I'LL HAVE TO REFERENCE IT, AND I THINK I DID REFERENCE IT IN THAT WAY. IS THAT OBJECTIONABLE TO YOU?
MS. SAHARIA: I'M NOT SURE I QUITE FOLLOWED HOW WHAT MS. VOLKAR WAS PROPOSING WAS DIFFERENT THAN WHAT I WAS PROPOSING.
MS. VOLKAR: I THINK WE'RE ESSENTIALLY SAYING THE SAME THING, MS. SAHARIA, ONLY TO BE CRYSTAL CLEAR, I THINK IN THE PRELIMINARY INSTRUCTIONS HE'S DEFINED WHAT I HAVE HERE, THE TWO CONSPIRACIES THAT THE GOVERNMENT LAID OUT ON PAGE 15 AND FOLLOWED WITH ONE STATEMENT, "THE COURT WILL DEFINE WIRE FRAUD IN A MOMENT."
MS. SAHARIA: I THINK THAT'S FINE, YOUR HONOR.
MS. VOLKAR: OKAY.
JUDGE DAVILA: I THINK THAT'S WHAT I SAID.
MS. SAHARIA: YES, THAT'S FINE, YOUR HONOR.
JUDGE DAVILA: ALL RIGHT.
MS. SAHARIA: SO MOVING ON, WITH RESPECT TO THE EXISTENCE OF AN AGREEMENT, WHICH IS THE FIRST ELEMENT THAT IS SET FORTH IN 820, FIRST LINE, I THINK THE LANGUAGE, "TO COMMIT AT LEAST ONE CRIME" IS A LITTLE CONFUSING BECAUSE THE AGREEMENT NEEDS TO BE TO COMMIT WIRE FRAUD AS CHARGED IN THE INDICTMENT, AND I THINK THAT LANGUAGE WILL CONFUSE THE JURY. SO I THINK WE WOULD PROPOSE TO CHANGE THAT LANGUAGE TO SAY "TO COMMIT WIRE FRAUD AS CHARGED IN THE INDICTMENT." IN GENERAL, THIS IS AN OBJECTION THAT PERMEATES THE INSTRUCTIONS, IS THAT EVERY TIME THE INSTRUCTIONS REFER TO THING LIKE "THE CONSPIRACY" OR "THE OFFENSE" OR "THE CRIME," WE WOULD ASK THE COURT TO ADD THE WORD "ALLEGED" BEFORE THOSE KIND OF WORDS BECAUSE, AGAIN, THERE'S A PRESUMPTION OF INNOCENCE AND WE THINK IT'S IMPORTANT TO CONVEY TO THE JURY THAT AT THIS POINT THESE ARE STILL ALLEGATIONS.
JUDGE DAVILA: LET ME ASK, LET ME JUST ASK MS. VOLKAR, DO YOU WISH TO COMMENT ON THAT?
MS. VOLKAR: YOUR HONOR, I THINK THE GOVERNMENT'S POSITION IS THAT WE JUST COPIED THE MODEL INSTRUCTIONS, AND IF, IN THE WISDOM OF THE MODEL INSTRUCTIONS, WHICH, OF COURSE, INCORPORATE AND THINK OF THE PRESUMPTION OF INNOCENCE, IT DOESN'T THINK THAT "ALLEGED" NEEDS TO BE REPEATED BEFORE EACH ONE. THERE IS, OF COURSE, VERY EARLY ON AN INSTRUCTION THAT I ASSUME THE COURT WILL GIVE ON THE PRESUMPTION OF INNOCENCE, AND I THINK THE JURORS TAKE THAT SERIOUSLY. THE GOVERNMENT DOESN'T HAVE A STRONG OBJECTION TO IT. I JUST ASSUME IF THE MODEL INSTRUCTIONS DO NOT THINK IT'S NECESSARY, THEN IT'S JUST UNNECESSARY.
JUDGE DAVILA: OKAY. THANK YOU. AND THIS REQUEST, I THINK, PERMEATES --
MS. SAHARIA: CORRECT.
JUDGE DAVILA: -- THROUGHOUT THE ENTIRETY OF EACH OF THESE SUBSTANTIVE INSTRUCTIONS AND OTHER PLACES WHERE IT SPEAKS TO THE CONSPIRACY, THE OFFENSE, ET CETERA.
MS. SAHARIA: CORRECT. EXACTLY. SO I'M NOT GOING TO REPEAT THAT FOR EVERY INSTRUCTION.
JUDGE DAVILA: RIGHT. RIGHT.
MS. SAHARIA: THE OTHER POINT THAT WE WOULD MAKE WITH RESPECT TO THE AGREEMENT ELEMENT IS THAT WE WOULD REQUEST THAT THE COURT ADD LANGUAGE THAT STATES THAT THE FACT THAT ALLEGED COCONSPIRATORS WORKED TOGETHER AT THERANOS IS NOT ENOUGH TO ESTABLISH AN AGREEMENT. THAT LANGUAGE IS CONTAINED WITHIN OUR PROPOSED INSTRUCTIONS 28 AND 35. AND THAT SIMPLY REFLECTS THE WELL ESTABLISHED NINTH CIRCUIT LAW THAT MERE ASSOCIATION AND ACTIVITY WITH A COCONSPIRATOR DOES NOT MEET THE TEST FOR ESTABLISHING AN AGREEMENT WHICH COMES FROM THE ESPINOZA VALDEZ CASE THAT WE CITE ON PAGE 9 OF OUR OBJECTIONS.
JUDGE DAVILA: ALL RIGHT. THANK YOU. YOUR PAGE 28, WHICH IS 38 OF 809, I THINK THIS LANGUAGE IS AT LINE 15. IT'S ITALICIZED.
MS. SAHARIA: YES, IT'S AT PAGE 38, "NOR IS IT ENOUGH THAT THEY WORKED AT THERANOS TOGETHER."
JUDGE DAVILA: MS. VOLKAR, AS TO THAT, DO YOU WISH TO BE HEARD?
MS. VOLKAR: I DO, YOUR HONOR. JUST ONE MOMENT. YOUR HONOR, THE GOVERNMENT'S POSITION IS THAT THE EVIDENCE HAS SHOWN MORE THAN MERE ASSOCIATION. WE DO AGREE THAT THAT IS AN ACCURATE STATEMENT OF NINTH CIRCUIT LAW THAT MERE ASSOCIATION IS NOT ENOUGH. I WAS REMEMBERING THAT IN THE CHANG CASE YOU GAVE A MERE PRESENCE INSTRUCTION, AND I WAS TRYING TO LOOK TO SEE IF THAT WAS SIMILAR ENOUGH OR RELATABLE ENOUGH TO THIS. I DO REALIZE THAT'S A MERE PRESENCE OF THE CRIME, SO IT'S A LITTLE BIT DIFFERENT. I DON'T THINK THAT THE LANGUAGE THAT THE DEFENSE HAS SUGGESTED IS PARTICULARLY OBJECTIONABLE. AGAIN, WE JUST GO BACK TO WE THINK IT'S UNNECESSARY GIVEN THE EVIDENCE THAT HAS COME IN IN THE CASE SO FAR.
JUDGE DAVILA: OKAY. THANK YOU.
MS. SAHARIA: OF COURSE WE INTEND TO ARGUE THE EVIDENCE SHOWS SOMETHING DIFFERENT. THE TWO PARTIES HAVE DIFFERENT VIEWS OF THE EVIDENCE, SO WE DO THINK THAT THE JURY HEARING THAT LEGAL PRINCIPLE IS AN IMPORTANT ONE TO HELP THE JURY UNDERSTAND HOW TO APPLY THE LAW TO THE EVIDENCE.
JUDGE DAVILA: ALL RIGHT.
MS. SAHARIA: SO LET ME TURN TO THE SECOND ELEMENT HERE, WHICH IS THAT THE DEFENDANT BECAME A MEMBER OF THE CONSPIRACY. AND HERE I WANT TO FOCUS ON THE INTENT ELEMENT THAT IS REQUIRED TO BECOME A MEMBER OF THE CONSPIRACY. IT'S CLEAR THAT THAT CONSPIRACY REQUIRES THE MENTAL STATE OF WILLFULNESS, AND THAT'S CLEAR FROM THE PARAGRAPH. THIS IS ALSO IN THE MODEL INSTRUCTIONS AT THE BOTTOM OF 15 WHERE IT EXPLAINS THAT "ONE BECOMES A MEMBER OF A CONSPIRACY BY WILLFULLY PARTICIPATING IN THE UNLAWFUL PLAN," AND THEN LATER AGAIN THE NEXT SENTENCE, "FURTHERMORE, ONE WHO WILLFULLY JOINS AN EXISTING CONSPIRACY." GIVEN THAT THE MENTAL STATE IS WILLFUL, IT SEEMS STRANGE TO PUT THE WILLFUL MENTAL STATE IN THIS PARAGRAPH, BUT NOT TO HAVE IT IN THE ACTUAL ELEMENT IN THE SECOND LINE. SO I WOULD ASK THE COURT TO ADD THE WORD "WILLFULLY" BEFORE THE WORD "INTENDING," SO IT WOULD READ, "SECOND, THAT MS. HOLMES BECAME A MEMBER OF THE ALLEGED CONSPIRACY," WE WOULD SAY, "KNOWING OF AT LEAST ONE OF ITS OBJECTS AND WILLFULLY INTENDING TO HELP ACCOMPLISH IT," GIVEN THAT THAT IS THE MENTAL STATE. AND THEN WE HAVE REQUESTED THAT THE COURT DEFINE THE TERM "WILLFULLY." AS THE NINTH CIRCUIT HAS ACKNOWLEDGED, THAT IS A TERM OF MANY MEANINGS AND I DON'T THINK THAT MEANING WILL BE CLEAR TO THE JURY.
JUDGE DAVILA: THERE IS NO MODEL FOR THE DEFINITION OF WILLFULLY.
MS. SAHARIA: THAT'S CORRECT.
JUDGE DAVILA: AND WOULD IT SURPRISE YOU IF I WERE TO TELL YOU THAT WHEN I LOOKED AT THIS AND I TRIED TO WORDSMITH WHAT IS THE APPROPRIATE DEFINITION FOR OUR CASE, AND I THOUGHT, WELL, I'VE WRESTLED WITH THIS LONG ENOUGH, LET ME TURN IT BACK TO THE LAWYERS AND SEE IF THEY CAN MEET AND CONFER AND COME UPON SOME TYPE OF A DEFINITION THAT IS APPROPRIATE FOR OUR CASE.
MS. SAHARIA: I'M HAPPY TO TRY TO MEET AND CONFER. I'M NOT SURE IF WE WILL AGREE. BUT IT IS OUR POSITION THAT THE CORRECT DEFINITION OF WILLFULLY IN THIS CASE COMES FROM THE SUPREME COURT'S DECISION IN BRYAN, BRYAN VERSUS UNITED STATES, 524 US 184. AND IN BRYAN THE COURT EXPLAINED THAT, "AS A GENERAL MATTER IN THE CRIMINAL CONTEXT TO ESTABLISH WILLFULNESS, THE GOVERNMENT MUST PROVE THAT THE DEFENDANT ACTED WITH KNOWLEDGE THAT HIS CONDUCT WAS UNLAWFUL." AND THAT IS THE DEFINITION THAT WE HAVE PROPOSED, WHICH IS AT OUR PROPOSED INSTRUCTIONS 30 AND 37. THE GOVERNMENT HAS NOT PROPOSED A DEFINITION, SO I'M HAPPY TO MEET AND CONFER WITH THEM IF THAT WOULD BE HELPFUL TO THE COURT.
JUDGE DAVILA: WELL, THAT'S WHAT I THOUGHT. I LOOKED AT EVEN THE CALJIC -- THERE IS A WILLFUL INSTRUCTION IN CALJIC, AND I CAN'T REMEMBER THE NUMBER JUST NOW, BUT IT'S OPEN ON MY DESK, AND I WOULD ENCOURAGE YOU TO LOOK AT THAT AS WELL.
MS. SAHARIA: I WILL, YOUR HONOR.
JUDGE DAVILA: AND THAT GIVES SOME OTHER AT LEAST DESCRIPTION OF THAT DEFINITION AND WHETHER OR NOT IT WILL FIT OUR NEEDS. I THINK I LOOKED AT THE EIGHTH CIRCUIT AS WELL, PERHAPS THE SIXTH. I THINK THEY MIGHT HAVE SOMETHING. BUT IN ANY EVENT, I'M GOING TO TASK YOU BOTH WITH LOOKING AT THAT AND SEEING IF YOU CAN COME UP WITH EITHER AN AGREEMENT OR --
MS. SAHARIA: OR COMPETING PROPOSALS?
JUDGE DAVILA: RIGHT.
MS. VOLKAR: YOUR HONOR, IF I MAY, I'M ACTUALLY GOING TO TURN THIS OVER TO MY COLLEAGUE, MR. LEACH. IT IS THE GOVERNMENT'S POSITION THAT WILLFULLY IS THE WRONG MENS REA HERE. I THINK IT IS VERY WELL ESTABLISHED THAT WIRE FRAUD IS A KNOWINGLY CRIME, NOT A WILLFULLY CRIME. MR. LEACH HAS PREPARED SPECIFICALLY ON BRYAN AND OTHERS. BEFORE I MOVED AWAY FROM THE PODIUM, I WANTED TO NOTE THAT THERE WAS SIGNIFICANTLY MORE LANGUAGE IN THE FIRST ELEMENT IN INSTRUCTION NUMBER 28 THAT DEFENSE PROPOSED THAT THE GOVERNMENT HAS SIGNIFICANT OBJECTION TO. WE MOVED PAST THAT, AND I JUST WANTED TO MAKE SURE THAT IT'S RECOGNIZED THAT THE GOVERNMENT DOESN'T THINK AN ADDITIONAL INSTRUCTION FOR EACH ELEMENT IS NEEDED, AND THAT THE GOVERNMENT DOESN'T THINK THAT THOROUGH DESCRIPTION OF THE FACTS IN THE JURY INSTRUCTIONS IS NEEDED. I THINK IT'S IMPROPER FOR THE COURT TO GIVE A FULL FLEDGED EXPLANATION OF THE CASE IN THE JURY INSTRUCTIONS. OF COURSE THE PARTIES WILL HAVE AN OPPORTUNITY TO DO THAT IN ARGUMENT. WE MOVED TO THE SECOND ELEMENT, AND I JUST DIDN'T WANT TO LOSE SIGHT OF THAT.
JUDGE DAVILA: NO, THANK YOU. BEFORE YOU LEAVE, I DID NOTE THAT. THE DEFENSE IS MORE THAN FULSOME. WHEN WE LOOK AT THE INSTRUCTIONS, TO MS. VOLKAR'S POINT, THE INSTRUCTIONS SHOULD BE HELPFUL. THEY SHOULD NOT CONFUSE THE JURY. THEY SHOULD RATHER INFORM AND ASSIST THE JURY AS THEY SIFT AND WEIGH THE EVIDENCE THAT THEY HAVE HEARD. AND I SOMETIMES HAVE CAUTION ABOUT TOO MUCH VERBIAGE THAT -- I USED THE WORD "JURY FATIGUE" BEFORE, BUT IT'S REALLY JURY COMPREHENSION, AND THE INSTRUCTIONS SHOULD INFORM AND NOT CONFUSE.
MS. SAHARIA: I UNDERSTAND THE COURT'S POSITION, YOUR HONOR.
JUDGE DAVILA: RIGHT.
MS. SAHARIA: I DO THINK IT IS ESSENTIAL THAT THE COURT AT SOME PLACE GIVE THE JURY A SUMMARY OF THE CORE ALLEGATIONS IN PARAGRAPH 12 OF THE INDICTMENT AND PARAGRAPH 16 OF THE INDICTMENT, WHICH ARE THE ALLEGED MISSTATEMENTS TO INVESTORS AND TO PAYING PATIENTS, AND WE WILL PROPOSE THAT TO THE COURT. WITHOUT THAT LANGUAGE BEING BEFORE THE JURY, WE THINK THERE'S A SIGNIFICANT RISK THAT ANY VERDICT WOULD REST ON A CONSTRUCTIVE AMENDMENT OF THE INDICTMENT. THE JURY NEEDS TO UNDERSTAND WHAT THE CHARGED MISSTATEMENTS ARE IN ORDER TO ASSESS THE PROOF AT TRIAL AGAINST THE ALLEGATIONS IN THE INDICTMENT.
JUDGE DAVILA: AND THERE'S, THERE'S SOME -- I DON'T WANT TO SAY TENSION -- BUT THERE IS -- IN THESE TYPES OF INSTRUCTIONS, THE COURT KNOWS, AND YOU DO, TOO, EXPERIENCED TRIAL LAWYERS, YOU KNOW THAT IT'S NOT UNUSUAL IN ARGUMENT FOR EITHER SIDE TO PUT A CHART UP THAT INCLUDES THE SUMMARY AND INDICATES, AS TO CHARGE NUMBER X, HERE'S WHAT THE EVIDENCE IS, HERE'S WHAT THE GOVERNMENT MUST PROVE. AND WE'VE ALL BEEN IN TRIALS WHERE THAT'S DONE. AND, OF COURSE, THAT'S WHAT CLOSING ARGUMENTS ARE FOR, TO DRAW THE JURY'S ATTENTION TO THE EVIDENCE AND TO INTERPRET IT IN THE WAY THAT THE SIDE THINKS IS APPROPRIATE. THAT'S DONE.
MS. SAHARIA: IT IS. BUT IF JUST THOSE CORE ALLEGATIONS ARE NOT IN THE INSTRUCTIONS, THEN THE JURY WILL NOT HAVE THEM BACK IN THE JURY ROOM, AND THERE'S NO WAY FOR EITHER THE COURT OR THE PARTIES TO KNOW WHETHER THE JURY HAS ASSESSED THE EVIDENCE AGAINST THE ALLEGATIONS OF THE INDICTMENT. AND THIS IS A VERY SERIOUS CONCERN OF THE DEFENSE'S GIVEN THE WAY THAT EVIDENCE HAS UNFOLDED AND THE FACT THAT THE JURY MAY BE ASKED TO DECIDE THIS CASE BASED ON ALLEGATIONS THAT ARE NOT ACTUALLY THE ALLEGATIONS THAT THE GRAND JURY PASSED ON. SO WE THINK IT'S VITALLY IMPORTANT FOR THE JURY TO HAVE A SUMMARY OF THOSE ALLEGATIONS IN THE INSTRUCTIONS THEMSELVES.
JUDGE DAVILA: WELL, LET ME ASK THIS. PERHAPS WHAT THE COURT SHOULD DO IS TO GIVE THE JURY A COPY OF THE INDICTMENT WITHOUT ALL OF THE LANGUAGE, THE PREPARATORY LANGUAGE, BUT JUST GIVE A COPY OF THE INDICTMENT TO THE JURY THAT HAS THE ACTUAL CHARGES, THE ALLEGATIONS. THAT MIGHT SOLVE THAT ISSUE.
MS. SAHARIA: WE CAN ASSESS THAT MAYBE AT THE CLOSE OF EVIDENCE.
JUDGE DAVILA: SURE.
MS. SAHARIA: THERE IS A LOT OF SPEAKING LANGUAGE IN THE INDICTMENT.
JUDGE DAVILA: RIGHT.
MS. SAHARIA: AS THE COURT IS AWARE, THAT WOULD BE IMPROPER FOR THE JURY TO HAVE.
JUDGE DAVILA: RIGHT, OF COURSE.
MS. SAHARIA: BUT LET ME -- I WANT TO CONFIRM WITH MY TEAM ABOUT THAT. OUR GENERAL POSITION IS THAT THE JURY SHOULDN'T HAVE THE INDICTMENT, BUT WE DO THINK THAT THERE NEEDS TO BE SOME DESCRIPTION OF THE ALLEGATIONS THAT ARE BEFORE THE JURY.
JUDGE DAVILA: SURE. I THOUGHT ABOUT THAT LAST NIGHT, THINKING, WELL, THAT MIGHT BE A POSSIBLE SOLUTION, AN EDITED OR REVISED SOMEHOW -- DARE I USE THE WORD "REDACTED" -- BUT PORTIONS OF THE INDICTMENT THAT DOES INFORM SPECIFICALLY AS TO THE CHARGES IN THE INDICTMENT, WITHOUT THE LANGUAGE AS YOU SUGGEST.
MS. VOLKAR: AND THAT'S THE GOVERNMENT'S POSITION, YOUR HONOR, IS THAT THE COURT COULD READ THE INDICTMENT OR PROVIDE THE INDICTMENT. AND ONE OF THE THINGS WE TOOK ISSUE WITH THE OBJECTIONS THAT THE DEFENSE FILED YESTERDAY, THEY CITE A D.C. CIRCUIT CASE AND A SECOND CIRCUIT CASE SAYING THE INDICTMENT -- IT'S ERROR TO PROVIDE THE INDICTMENT TO THE JURY. THAT'S NOT THE LAW IN THE NINTH CIRCUIT. THERE ARE PLENTY OF CASES, AND I HAVE TWO OR THREE AT MY FINGERTIPS IF THE COURT WOULD LIKE THEM, THAT SAYS THE INDICTMENT CAN GO BACK WITH THE JURY. IT'S REALLY IN THE TRIAL COURT'S DISCRETION, ESPECIALLY IF THERE ARE A LOT OF ALLEGATIONS IN THE CASE OR, YOU KNOW, DIFFERENT CATEGORIES OF MISREPRESENTATIONS THAT WE HAVE HERE. IT'S CERTAINLY PROPER FOR THE COURT TO AT LEAST READ FROM THE INDICTMENT TO THE JURY, AND IT COULD BE ANOTHER DECISION POINT WHETHER OR NOT TO SEND THE INDICTMENT BACK. SO THE GOVERNMENT'S PERSPECTIVE IS WHY GO THROUGH THE EXERCISE OF PUTTING TOGETHER WHAT WILL LIKELY BE ARGUMENTATIVE BY EITHER SIDE IN TERMS OF TRYING TO DESCRIBE HOW THE EVIDENCE CAME IN WHEN WE HAVE WHAT THE GRAND JURY ISSUED IN THE INDICTMENT.
JUDGE DAVILA: AND I THINK IT MIGHT BE MORE BENEFICIAL FOR THE JURY TO RECEIVE A HARD COPY IF THAT'S POSSIBLE, AS OPPOSED TO THE COURT READING THEM 12, 11 CHARGES, WHATEVER IT IS, AND ASK THEM TO COMMIT THAT TO MEMORY OR WRITE DOWN AS WELL. WHILE I'M ON THIS POINT, AND BEFORE WE INVITE MR. LEACH UP, IF YOU'RE FINISHED, MS. VOLKAR, ONE THING I HAVE DONE WHEN I DO INSTRUCT -- AND I INSTRUCT FOLLOWING THE ARGUMENTS -- EARLY IN MY CAREER I DID PROVIDE THE JURORS COPIES OF THE INSTRUCTIONS AND THEY READ ALONG. I CHANGED THAT AND I HAVEN'T DONE THAT FOR MANY YEARS. I'M CURIOUS WHETHER OR NOT -- AND DON'T ANSWER ME TODAY -- BUT I'M CURIOUS ABOUT YOUR THOUGHTS ABOUT WHETHER OR NOT, ONCE WE GET FINALITY ON THE INSTRUCTIONS, WHETHER OR NOT I SHOULD PROVIDE COPIES OF THE INSTRUCTIONS TO THE JURORS AS THEY'RE READ. I'M HAPPY --
MS. SAHARIA: WE WILL CONSIDER THAT, YOUR HONOR. SO I'LL CONFER WITH THE TEAM.
JUDGE DAVILA: ALL RIGHT. I'M HAPPY TO HEAR FROM YOU ON THAT POINT. MS. VOLKAR?
MS. VOLKAR: SAME, YOUR HONOR. WE'LL DISCUSS AS A TEAM. I WOULD LIKE TO INVITE MR. LEACH UP TO TALK ABOUT THE WILLFULLY VERSUS KNOWINGLY IF THAT'S OKAY.
JUDGE DAVILA: OKAY. GREAT.
MR. LEACH: GOOD MORNING, YOUR HONOR.
JUDGE DAVILA: GOOD MORNING.
MR. LEACH: SORRY TO DO THIS PIECEMEAL.
JUDGE DAVILA: NO, NOT AT ALL.
MR. LEACH: OUR VIEW IS, WITH RESPECT TO THE CONSPIRACY COUNTS, IT WOULD BE IMPROPER TO DEFINE "WILLFULLY" IN THE WAY THAT THE DEFENSE PROPOSES, KNOWLEDGE THAT WHAT YOU'RE DOING IS UNLAWFUL. THE STATUTE, 18 U.S.C. 1349, DOES NOT INCLUDE THE WORD "WILLFULLY." THE MODEL INSTRUCTION IS AN AMALGAM OF 371 AND 1349. THE BRYAN CASE THAT THEY CITE IS VERY, VERY DIFFERENT FROM CONSPIRACY AND WIRE FRAUD. IT'S A CRIME TO COMMIT A FEDERAL FIREARM LICENSING OFFENSE. IT'S DRAWING ON THE RATZLAFV LINE OF CASES INVOLVING TAX OFFENSES WHERE THE COURT, THE SUPREME COURT HAS IMPOSED A HIGHER MENTAL STATE REQUIREMENT WHERE YOU NEED TO KNOW WHAT YOU'RE DOING IS UNLAWFUL HERE. THE CRIME OF CONSPIRACY IS THE AGREEMENT TO COMMIT WIRE FRAUD, AND IT'S VERY CLEAR IN WIRE FRAUD YOU DO NOT NEED TO ACT WITH THE KNOWLEDGE THAT YOU'RE ACTING UNLAWFULLY. YOU NEED TO ACT WITH THE INTENT TO DECEIVE OR CHEAT. AND SO I THINK THE APPROPRIATE -- OF COURSE WE'LL LOOK AT THE CALIFORNIA CITES YOUR HONOR POINTS TO AND WE'LL MEET AND CONFER WITH THE DEFENSE. BUT THE TERM "WILLFULLY" AS USED IN THE BRYAN CASE IS REALLY A SIGNIFICANTLY HIGHER STANDARD THAT'S EVER BEEN IMPOSED IN THE WIRE FRAUD OR THE CONSPIRACY CONTEXT. IT WOULD BE IMPROPER TO DEFINE IT AS A REQUIREMENT THAT YOU KNOW WHAT YOU'RE DOING IS ILLEGAL. THE APPROPRIATE MENTAL STATE IS THAT YOU INTENTIONALLY ENTER INTO THE AGREEMENT TO COMMIT THE ELEMENTS OF WIRE FRAUD OR THE ELEMENTS OF THE OFFENSE. AND THEY HAVEN'T CITED TO ANYTHING IN THE NINTH CIRCUIT THAT SUGGESTS THERE'S SOME RATZLAFV OR BRYAN HIGHER STANDARD WHEN IT COMES TO CONSPIRACY. SO THOSE ARE THE ONLY POINTS THAT I WOULD LIKE TO MAKE RIGHT NOW.
JUDGE DAVILA: OKAY. THANK YOU. MS. SAHARIA?
MS. SAHARIA: SURE. IT SEEMS TO ME THAT THE GOVERNMENT IS CONFLATING THE MENTAL STATE FOR WIRE FRAUD ITSELF, THE SUBSTANTIVE OFFENSE, WITH THE MENTAL STATE FOR CONSPIRACY, AND THE MODEL INSTRUCTIONS MAKE CLEAR THAT THE MENTAL STATE FOR JOINING A CONSPIRACY, AS OPPOSED TO COMMITTING THE UNDERLYING OFFENSE, IS WILLFUL. IT'S IN THE MODEL INSTRUCTIONS ITSELF. SO IF WE'RE GOING TO CHARGE THE JURY THAT MS. HOLMES NEEDED TO HAVE WILLFULLY JOINED A CONSPIRACY, WE NEED TO GIVE THE JURY INSTRUCTION ON WHAT WILLFULLY MEANS AS OPPOSED TO KNOWINGLY. WE HAVE CITED THE COURT TO MULTIPLE CASES, NOT IN THE NINTH CIRCUIT, BUT THE GOVERNMENT HASN'T CITED A CONTRARY CASE IN THE NINTH CIRCUIT WHERE THE COURT -- WHERE THE COURT DID USE THE BRYAN DEFINITION WHEN IT CAME TO WILLFULLY JOINING A CONSPIRACY TO COMMIT WIRE FRAUD. BRYAN SETS FORTH THE GENERAL TEST FOR THE WORD "WILLFULLY" IN THE CRIMINAL CONTEXT. AS A GENERAL MATTER IN THE CRIMINAL CONTEXT, THAT IS THE DEFINITION. SO IT'S OUR POSITION THAT SHOULD BE THE DEFINITION. BUT, AGAIN, I'M HAPPY TO LOOK AT THE CALIFORNIA TREATISE AND THEN WE CAN CONFER WITH THE GOVERNMENT ABOUT THIS.
MR. LEACH: AGAIN, YOUR HONOR, "WILLFULLY" IS NOT IN THE STATUTE, AND "WILLFULLY" IS A WORD WITH DIFFERENT MEANINGS IN DIFFERENT CONTEXTS, AND THERE'S NOTHING TO SUGGEST THAT IN THE MODEL INSTRUCTION AS THE NINTH CIRCUIT IS USING IT, IT'S INTENT TO IMPORT THIS HIGHER BRYAN/RATZLAFV TYPE STANDARD. I'VE NEVER SEEN IT IN AN INSTRUCTION IN THE NINTH CIRCUIT OR IN THIS COURT, AND I THINK YOUR HONOR HAS NOT DONE IT BEFORE IN THE CHANG AND THE OTHER CASES. I THINK IT WOULD BE VERY DANGEROUS TO BRING KNOWLEDGE THAT YOUR CONDUCT IS UNLAWFUL WITH SO THIN AUTHORITY BASED ON SOME OUT-OF-CIRCUIT PRECEDENT. SO WE JUST THINK THERE'S NO BASIS FOR -- THERE'S NO NEED FOR A DEFINITION HERE. THE PROPOSAL FROM THE GOVERNMENT IS, "ONE BECOMES A MEMBER OF A CONSPIRACY BY PARTICIPATING IN THE UNLAWFUL PLAN WITH THE INTENT TO ADVANCE IT." THAT CERTAINLY DESCRIBES WHAT YOU NEED TO DO. I THINK FURTHER MUDDYING THE WATERS WITH WILLFULLY WILL CREATE CONFUSION, AND THERE'S JUST NO SUPPORT IN THE NINTH CIRCUIT FOR DOING WHAT THE DEFENSE IS PROPOSING HERE.
JUDGE DAVILA: WELL, THANK YOU. I THINK ON PAGE 15 1176, LINE 24, "ONE BECOMES A MEMBER OF A CONSPIRACY BY WILLFULLY PARTICIPATING." THAT'S YOUR 820 PROPOSAL OF THE MODEL INSTRUCTION.
MR. LEACH: YES.
JUDGE DAVILA: AND I THINK MS. SAHARIA'S POINT, AS SHE MADE IT, IS, WELL, SHOULDN'T WE DEFINE WILLFULLY?
MR. LEACH: WE'RE HAPPY TO LOOK INTO DEFINING IT, YOUR HONOR. BUT THE POINT THE GOVERNMENT IS TRYING TO MAKE IS WILLFULLY IS NOT KNOWLEDGE OF UNLAWFULNESS.
JUDGE DAVILA: RIGHT.
MR. LEACH: AND I THINK THE MORE APPROPRIATE DEFINITION WOULD BE KNOWINGLY OR INTENTIONALLY. AND, AGAIN, THAT'S A WORD THAT IS USED FOR MULTIPLE DIFFERENT CONSPIRACY STATUTES. THE WORD "WILLFULLY" IS NOT IN 1349. I DON'T MIND TRYING TO ENDEAVOR TO DO A DEFINITION THERE, BUT IT'S NOT -- THE GOVERNMENT'S --
JUDGE DAVILA: I APPRECIATE THAT.
MR. LEACH: I THINK I HAVE ARTICULATED OUR VIEW THERE.
JUDGE DAVILA: RIGHT. I CAPTURE YOUR POINT. AND WHAT I WAS SUGGESTING IS, WELL, THE NINTH CIRCUIT SAYS THERE IS NO MODEL ON WILLFUL, AND TO ENHANCE OUR DISCUSSION, I WOULD JUST INVITE YOU TO LOOK AT THOSE, SEE IF THAT ALTERS POSITIONS, SEE WHAT THAT DOES, AND THEN WE CAN CHAT ABOUT IT SOME MORE. THANK YOU FOR RAISING IT. IT'S AN INTERESTING ISSUE.
MR. LEACH: IT IS, YOUR HONOR. WILL DO.
JUDGE DAVILA: OKAY. THANK YOU.
MS. SAHARIA: SHOULD I CONTINUE ON CONSPIRACY? I THINK WE'RE CLOSE TO --
JUDGE DAVILA: YES.
MS. SAHARIA: -- BEING DONE WITH CONSPIRACY POTENTIALLY. I WOULD JUST STATE FOR THE RECORD OUR OBJECTION TO THE OMISSION OF AN OVERT ACT REQUIREMENT, AND I KNOW THE COURT REJECTED THAT IN THE PRELIMINARY INSTRUCTIONS SO I'M NOT GOING TO REPEAT THAT ARGUMENT, BUT I WOULD JUST PRESERVE THAT ARGUMENT.
JUDGE DAVILA: OKAY. THANK YOU. YEAH, THIS IS ONE WHERE I SAID EARLIER THIS MORNING, I THINK WE COVERED THIS IN THE ARGUMENTS ON PRELIMINARY.
MS. SAHARIA: YES, WE DID.
JUDGE DAVILA: RIGHT. AND YOU'VE PRESERVED YOUR ARGUMENT FOR TODAY.
MS. SAHARIA: THANK YOU.
JUDGE DAVILA: AND YOU'LL HAVE ANOTHER OPPORTUNITY ON OUR FINAL DISCUSSION ON THE INSTRUCTIONS.
MS. SAHARIA: THANK YOU. TWO MORE POINTS ON KIND OF THIS CORE CONSPIRACY INSTRUCTION. FIRST, WE DO REQUEST THAT THE COURT GIVE A SPECIFIC UNANIMITY INSTRUCTION THAT -- AND WE PROPOSE THAT AT INSTRUCTIONS 33 AND 40, WHICH INSTRUCTS THE JURY THAT IT NEEDS TO UNANIMOUSLY AGREE BOTH ON THE OBJECT OF EACH CONSPIRACY AND ON AT LEAST ONE PARTICIPANT IN THE CONSPIRACY, AND I THINK THAT'S AN IMPORTANT POINT HERE WHERE THE INDICTMENT IS -- DOES NOT DEFINE WHO IS IN EACH CONSPIRACY. SO I THINK, GIVEN THOSE FACTS, GIVEN THAT WE HAVE TWO DIFFERENT CONSPIRACIES CHARGED, THERE IS A RISK IN THIS CASE OF JUROR CONFUSION, AND FOR THAT REASON WE ASK THAT THE COURT GIVE A SPECIFIC UNANIMITY INSTRUCTION AS WE PROPOSED AT 33 AND 40.
JUDGE DAVILA: OKAY. MS. VOLKAR?
MS. VOLKAR: YOUR HONOR, THIS IS WHAT I ALLUDED TO EARLIER, WHICH IS I THINK THAT THERE'S NO RISK FOR JUROR CONFUSION HERE, AS IT WILL NOT LIKELY SURPRISE THE COURT. I THINK THAT THE LAPIERRE CASE THAT THE DEFENSE CITES HAS VERY DIFFERENT FACTS. THERE THE GOVERNMENT CHARGED ONE CONSPIRACY, AND THE EVIDENCE AT TRIAL SHOWED MORE THAN ONE CONSPIRACY, WHICH BOTH THE COURT AND THE PROSECUTION IN THAT CASE ACKNOWLEDGED ESSENTIALLY AT THIS MOMENT IN TIME WHEN THEY WERE IN THE CHARGING CONFERENCE AND LOOKING AT THE INSTRUCTIONS. WE HAVE A VERY DIFFERENT CASE HERE. THE GOVERNMENT HAS CLEARLY ARTICULATED TWO CONSPIRACIES, TWO SCHEMES TO DEFRAUD. THEY'RE LAID OUT CLEARLY IN THE INDICTMENT. AGAIN, I GO BACK TO THE RISK FOR JUROR CONFUSION IS LOW TO NONEXISTENT FROM THE GOVERNMENT'S PERSPECTIVE BECAUSE THERE IS A SCHEME TO DEFRAUD INVESTORS, AND THERE IS A SCHEME TO DEFRAUD PATIENTS. AND I DON'T THINK THAT THERE'S ANY RISK OF REAL OVERLAP OR CONFUSION, EXCEPT FOR IF THE DEFENSE WERE TO ARGUE THAT SOME OF THE SAME MISREPRESENTATIONS FROM MS. HOLMES WENT TO BOTH GROUPS OF PEOPLE. BUT I DON'T THINK THAT THAT IS WHAT LAPIERRE OR THE NINTH CIRCUIT CASES ARE TALKING ABOUT. THEY'RE TALKING ABOUT IS THERE RISK OF -- LIKE IN THE LAPIERRE CASE, WHICH CONSPIRACY ARE WE TALKING ABOUT? WHO ARE THE MEMBERS? THAT'S NOT AT RISK HERE. OF COURSE THERE'S MR. BALWANI, WHO IS LIKELY AT LEAST ONE COCONSPIRATOR, AND THERE MAY BE OTHER COCONSPIRATORS AS WELL WITHIN THE COMPANY. THERE'S NOT MUCH RISK FOR THE JUROR TO BE CONFUSED ABOUT WHO IS INVOLVED IN THE CONSPIRACY.
MS. SAHARIA: THE PARTICULAR POINT WITH RESPECT TO THE COCONSPIRATORS IS THAT A SPECIFIC UNANIMITY INSTRUCTION INSTRUCTS THE JURY THAT IT NEEDS TO UNANIMOUSLY AGREE NOT ONLY ON WHAT THE OBJECT OF THE CONSPIRACY IS, BUT ON AT LEAST ONE COCONSPIRATOR, AND THAT'S AN IMPORTANT POINT THAT, WITHOUT THIS INSTRUCTION, THE JURY WILL NOT HAVE THIS CONCEPT BEFORE THEM. SO FOR THAT REASON, WE DO THINK IT'S IMPORTANT FOR THE JURY TO HEAR THIS INSTRUCTION.
JUDGE DAVILA: ALL RIGHT. THANK YOU. WHEN I LOOKED AT THOSE TWO THAT THE DEFENSE OFFERS, THEY SEEM TO BE LENGTHY --
MS. SAHARIA: UH-HUH.
JUDGE DAVILA: -- AND THEY SEEM TO HAVE LANGUAGE THAT MIGHT NOT BE NEEDED.
MS. SAHARIA: WE CAN PROPOSE A SHORTER VERSION FOR THE COURT IF THAT WOULD BE HELPFUL.
JUDGE DAVILA: WELL, AT A MINIMUM, THAT'S WHAT I WOULD LIKE TO LOOK AT.
MS. SAHARIA: SURE.
JUDGE DAVILA: SOMETHING THAT -- I THINK THIS CAN BE ACCOMPLISHED IN A COUPLE OF SENTENCES. I REALLY DO.
MS. SAHARIA: WE WILL TRY THAT, YOUR HONOR.
JUDGE DAVILA: IF THIS WAS GOING TO BE GIVEN. WHICH IS TO SAY, I'M RETICENT TO GIVE IT AS YOU'VE PROPOSED IT. I THINK IT'S TOO LONG.
MS. SAHARIA: OKAY.
JUDGE DAVILA: AND IF YOU WANT TO PROPOSE SOMETHING THAT IS -- THAT HAS BREVITY, I'LL LOOK AT IT.
MS. SAHARIA: OKAY. WE WILL DO THAT.
JUDGE DAVILA: WE CAN DISCUSS IT AGAIN. MS. VOLKAR?
MS. VOLKAR: YOUR HONOR, ONE OF THE CHANGES THAT WE MADE IN RESPONSE TO SEEING THE DEFENSE'S FILING FROM THE SUMMER WAS ON PAGE 15 OF ECF 1176, RIGHT AFTER THE GOVERNMENT DESCRIBED THE TWO CHARGED CONSPIRACIES, ON LINE 8, "IN ORDER FOR THE DEFENDANT TO BE FOUND GUILTY OF EITHER CHARGE," THAT'S FROM THE MODEL, THE GOVERNMENT ADDED, "YOU MUST ALL UNANIMOUSLY AGREE WITH RESPECT TO EACH COUNT, THAT THE GOVERNMENT MUST PROVE EACH OF THE FOLLOWING ELEMENTS BEYOND A REASONABLE DOUBT."
JUDGE DAVILA: RIGHT.
MS. VOLKAR: AND THAT WAS THE GOVERNMENT ESSENTIALLY ACKNOWLEDGING THAT THERE ARE TWO CONSPIRACIES. AND ALTHOUGH WE DON'T THINK IT'S CONFUSING, WE DO THINK SOMETHING AS STRAIGHTFORWARD AS THAT IS ALIGNED WITH, FOR EXAMPLE, THE GONZALEZ CASE, WHICH HELD THAT WITH VERY MINIMAL ADDITIONAL INSTRUCTION, THE COURT COULD CLEAR UP ANY CHANCE OF CONFUSION. SO THAT WOULD BE THE GOVERNMENT'S SUGGESTED ADDITION, RATHER THAN THE LENGTHY SUBMISSION OF THE DEFENSE.
JUDGE DAVILA: AND THIS IS WHAT I WAS ALLUDING TO, MS. SAHARIA. I THINK YOU'VE CAPTURED THAT. I THINK YOU CAN --
MS. SAHARIA: WE WILL PROPOSE SOMETHING. I DON'T THINK THAT SENTENCE QUITE DOES IT, BUT WE'LL PROPOSE SOMETHING SHORTER, YOUR HONOR.
JUDGE DAVILA: SURE. I DO THINK THIS CAN BE ACCOMPLISHED IN A COUPLE OF SENTENCES.
MS. SAHARIA: UNDERSTOOD.
JUDGE DAVILA: JUST BASED ON MY EXPERIENCE WITH YOUR PREVIOUS WORK, I KNOW THIS CAN BE DONE. LET ME PUT IT THAT WAY.
MS. SAHARIA: I HAVE SOME EXPERIENCE SHORTENING THINGS, YOUR HONOR.
JUDGE DAVILA: OKAY.
MS. SAHARIA: THEN I THINK THE LAST POINT THAT WE INCLUDED ON PAGE 11 -- I THINK THIS SHOULD BE A RELATIVELY STRAIGHTFORWARD ONE -- IS THAT WE PROPOSE THAT THE COURT INCLUDE THE MULTIPLE CONSPIRACIES INSTRUCTION, WHICH IS A MODEL NINTH CIRCUIT INSTRUCTION. IT'S MODEL 8.22 WHICH JUST EXPLAINS TO THE JURY WHEN THERE ARE TWO CONSPIRACIES CHARGED, THE JURY NEEDS TO ASSESS EACH ONE INDIVIDUALLY AND NOT CONCLUDE THAT, IF THE JURY FINDS ONE CONSPIRACY EXISTED, IT DOESN'T MEAN THE OTHER ONE EXISTED.
MS. VOLKAR: YOUR HONOR, IF I MAY BE HEARD?
JUDGE DAVILA: YES.
MS. VOLKAR: NOT AS STRAIGHTFORWARD. IF YOU LOOK AT THE MODEL INSTRUCTION, THE VERY FIRST PART OF THE COMMENT IS, "USE THIS INSTRUCTION WHEN THE INDICTMENT CHARGES A SINGLE CONSPIRACY AND THE EVIDENCE INDICATES TWO OR MORE POSSIBLE CONSPIRACIES." THIS IS A NINTH CIRCUIT MODEL INSTRUCTION MEANT TO HELP OBVIATE THE ISSUE THAT AROSE IN LAPIERRE. AGAIN, THE GOVERNMENT'S POSITION IS THAT'S NOT THIS CASE. THERE ARE TWO CONSPIRACIES THAT ARE CHARGED IN THE INDICTMENT. THEY ARE CLEAR. THEY ARE SEPARATE FROM ONE ANOTHER. THE MULTIPLE CONSPIRACIES CHARGE, ALTHOUGH WE HAVE NO OBJECTION TO THE MODEL LANGUAGE, WE OBJECT TO INSERTING THE INSTRUCTION WHEN IT'S NOT CALLED FOR IN THE FACTS OF THIS CASE.
MS. SAHARIA: I DO THINK IT IS CALLED FOR IN THE FACTS OF THIS CASE, BECAUSE I DO THINK IT'S IMPORTANT TO CHARGE -- TO INSTRUCT THE JURY THAT IT NEEDS TO ASSESS THE TWO MULTIPLE CHARGED CONSPIRACIES SEPARATELY, AND ALTHOUGH THIS MAY HAVE BEEN DRAFTED FOR SOMEWHAT DIFFERENT CIRCUMSTANCES, THAT IS WHAT IT DOES, AND THAT'S WHAT OUR PROPOSED INSTRUCTION DOES WHICH WE PROPOSED AGAIN AT -- LET ME JUST MAKE CLEAR -- INSTRUCTION 41 WAS OUR PROPOSED INSTRUCTION AT PAGE 56 AT ECF 809. AGAIN, WE CAN PROPOSE A SHORTER VERSION IF THAT WOULD BE HELPFUL TO THE COURT.
JUDGE DAVILA: WELL, FOR ME TO CONSIDER IT, THAT WOULD BE HELPFUL. I APPRECIATE IT.
MS. SAHARIA: OKAY.
JUDGE DAVILA: I LOOKED AT THIS AND I WAS -- LET ME JUST SAY, I WAS LOOKING AT MY NOTES. I HAD PENCILLED OUT THE ITALICIZED LANGUAGE AT THE FIRST -- YOUR FIRST PARAGRAPH THERE, AND I THINK I DID THAT AS A SUGGESTION TO MYSELF THAT MAYBE THIS IS TOO LONG AND WE SHOULD DO SOMETHING ABOUT IT.
MS. SAHARIA: SURE. UNDERSTOOD.
JUDGE DAVILA: YEAH, WHY DON'T YOU WORK ON THAT?
MS. SAHARIA: OKAY. WE WILL DO THAT.
JUDGE DAVILA: AND WE WILL LOOK AT IT AGAIN.
MS. SAHARIA: THE NEXT ONE IS GOVERNMENT INSTRUCTION 8.23, KNOWLEDGE OF AND ASSOCIATION WITH OTHER CONSPIRATORS. I THINK THE OBJECTIONS THAT WE HAVE ALREADY TALKED ABOUT ALREADY COVER OUR OBJECTIONS TO THIS ONE, WHICH IS THAT IT DOESN'T DESCRIBE THE TWO CONSPIRACIES AND DOESN'T DISTINGUISH BETWEEN THE TWO CONSPIRACIES, AND WE HAVE ALREADY KIND OF TALKED ABOUT THAT. AND WE HAD KIND OF -- THE INSTRUCTIONS THAT WE DRAFTED ON CONSPIRACY ALREADY INCORPORATE THIS CONCEPT ELSEWHERE. SO THAT'S THE -- OUR OBJECTION IS JUST THAT WE THINK THAT THE COURT -- THIS IS AN UNNECESSARY INSTRUCTION, BUT I UNDERSTAND IT'S A MODEL INSTRUCTION. WE DO ASK -- AND THIS IS AT FOOTNOTE 6 OF OUR OBJECTIONS -- THAT IF THE COURT GIVES THIS INSTRUCTION, WE WOULD ASK THE COURT TO RE-ADD THE LANGUAGE FROM 820, THAT "A PERSON DOES NOT BECOME A CONSPIRATOR MERELY BY ASSOCIATING WITH ONE OR MORE PERSONS WHO ARE CONSPIRATORS, NOR MERELY BY KNOWING THAT A CONSPIRACY EXISTS." ALTHOUGH THAT IS IN 820, I THINK GIVEN THAT THIS INSTRUCTION IS KIND OF ABOUT KNOWLEDGE ABOUT CONSPIRATORS, IT'S IMPORTANT TO REITERATE THAT PRINCIPLE IN THIS INSTRUCTION.
JUDGE DAVILA: ALL RIGHT. MS. VOLKAR?
MS. VOLKAR: YOUR HONOR, I BELIEVE I HEARD MS. SAHARIA SAY THAT THE CONCEPTS OF THIS ARE INCLUDED ELSEWHERE. THAT'S WHERE THE GOVERNMENT SAYS THE MODEL EXISTS FOR A REASON. THE COURT SHOULD GIVE THE MODEL. THE COURT HAS GIVEN THE MODEL INSTRUCTION IN OTHER CASES. AND I WOULD ADD ON THAT LAST POINT, IF THE MERE ASSOCIATION LANGUAGE, I DON'T -- I WON'T DO IT THE JUSTICE MS. SAHARIA JUST DID TO DESCRIBING THE KEY PORTION, BUT I DON'T SEE THE NEED FOR IT TO BE IN TWO PLACES. I DO THINK THAT THE MORE TIMES THAT SOMETHING IS REPEATED THROUGHOUT INSTRUCTIONS, ESPECIALLY IF THEY ARE SIGNIFICANTLY SHORTER, IT BLEEDS INTO ARGUMENT RATHER THAN A NEUTRAL STATEMENT OF THE INSTRUCTIONS ON THE LAW. I DON'T THINK THE GOVERNMENT HAS AN OBJECTION IF WE WANT TO ADD THAT LANGUAGE INTO THIS INSTRUCTION. IT DOES SEEM TO FIT WITH THE TOPICS OF THIS INSTRUCTION. BUT THEN WE WOULD ASK THAT IT BE REMOVED FROM 8.20, AGAIN, BECAUSE THE MORE TIMES SOMETHING IS REPEATED, IT COULD SEEM LIKE IT IS A MORE IMPORTANT CONCEPT THAN OTHER CONCEPTS IN THE INSTRUCTIONS WHEN THEY SHOULD ALL BE GIVEN EQUAL WEIGHT.
JUDGE DAVILA: OKAY. THANK YOU. THIS IS ANOTHER ONE WHERE I LOOKED AT THIS AND I THOUGHT, WELL, CAN WE JUST SAY TWO CONSPIRACIES ALLEGED AND THEN APPLY EACH SEPARATELY OR SOME LANGUAGE LIKE THAT? I WAS ABLE TO JUST READ MY NOTE AND IT SAYS, "MEET AND CONFER."
MS. SAHARIA: WE'LL DO THAT, TOO. YOUR HONOR. I THINK THE NEXT ONE IS INSTRUCTION 825, WHICH IS PINKERTON LIABILITY. I WILL JUST STATE FOR THE RECORD THAT WE OBJECT ON THE GROUND THAT PINKERTON LIABILITY IS AN IMPROPER JUDGE-MADE THEORY OF LIABILITY. THAT IS OBVIOUSLY FORECLOSED BY PRECEDENT, BUT I WOULD POINT THE COURT TO THE VERY THOUGHTFUL CONCURRENCE BY JUDGE WATFORD JUST A FEW MONTHS AGO ON THAT ISSUE.
JUDGE DAVILA: THAT WAS A TOPIC OF DISCUSSION IN CHAMBERS, JUDGE WATFORD'S OBSERVATION.
MS. SAHARIA: SO THIS IS THE INSTRUCTION, TOGETHER WITH THE COSCHEMER LIABILITY INSTRUCTION, WHERE WE HAVE A VERY SIGNIFICANT CONCERN ABOUT JUROR CONFUSION, BECAUSE AS THE GOVERNMENT INSTRUCTION CURRENTLY READS, IT DOESN'T -- IT MERGES ALL OF -- THE TWO CONSPIRACIES AND ALL OF THE SUBSTANTIVE WIRE FRAUD COUNTS WITHOUT EXPLAINING TO THE JURY HOW IT NEEDS TO MATCH THEM UP, AND IT MIGHT -- I THINK MS. VOLKAR SAID EARLIER, THAT WOULD BE INTUITIVE TO THE JURY, AND IT MIGHT BE. BUT IT MIGHT NOT BE. JURY INSTRUCTIONS, FRANKLY, ARE NEVER QUITE INTUITIVE TO A JURY, AND THAT'S WHY THE NINTH CIRCUIT COMMENTARY SUGGESTS TO COURTS THAT WHEN THERE ARE TWO CONSPIRACIES, THE COURT CONSIDER GIVING TWO PINKERTON CHARGES TO MAKE CLEAR TO THE JURY THAT IN THIS CASE, IF IT CONCLUDES THAT THE DEFENDANT IS A MEMBER OF THE CONSPIRACY CHARGED IN COUNT ONE, THEN IT COULD FIND THE DEFENDANT GUILTY OF COUNTS THREE THROUGH EIGHT. AND THEN VICE VERSA. COUNT TWO IS MATCHED UP WITH COUNTS TEN THROUGH TWELVE, AND THAT CONCEPT IS CURRENTLY MISSING FROM THE GOVERNMENT INSTRUCTION. I THINK WE CAN RESOLVE THAT IF WE WERE TO MEET AND CONFER WITH THE GOVERNMENT, BUT I THINK THAT'S A SERIOUS DEFECT AS IT IS CURRENTLY WRITTEN.
JUDGE DAVILA: OKAY. THANK YOU. ANYTHING FURTHER ON THIS?
MS. VOLKAR: I THINK WE COULD PROBABLY RESOLVE THIS THROUGH MEET AND CONFER IF THAT'S A SUBSTANTIAL CONCERN OF THE DEFENSE. THE GOVERNMENT DOESN'T HAVE NECESSARILY AN OBJECTION TO TWO PINKERTON CHARGES, AGAIN, AS LONG AS THE WHOLE OF THE INSTRUCTIONS ARE SHRUNK DOWN IN SIZE, AND IT SOUNDS LIKE THERE WILL BE AN EFFORT TO STREAMLINE, IF THAT IS A SOURCE THAT THE DEFENSE THINKS IS A SIGNIFICANT SOURCE OF CONFUSION. WHAT THE GOVERNMENT DOES HAVE OBJECTION TO IS, ONCE AGAIN, GOING BEYOND THE MODEL INSTRUCTION. AND I DON'T HAVE IT RIGHT IN FRONT OF ME, BUT MY RECOLLECTION OF THE DEFENSE'S SUGGESTED PINKERTON CHARGE SIGNIFICANTLY CHANGES THE MODEL INSTRUCTION, AND SO I JUST WANT TO STATE FOR THE RECORD THAT THAT'S WHERE THE GOVERNMENT'S OBJECTIONS COME IN, NOT WHAT MS. SAHARIA JUST SAID, THAT THERE SHOULD BE SORT OF TWO TO BE CLEAR, BUT ALL OF THE EXTRA VERBIAGE THAT IS ADDED IN THE DEFENSE'S SUGGESTED INSTRUCTIONS.
JUDGE DAVILA: MS. SAHARIA, DID YOU HAVE A PROPOSAL?
MS. SAHARIA: WE PROPOSED A PINKERTON INSTRUCTION AS A SUPPLEMENTAL INSTRUCTION TO WHAT WE FILED THIS WEEK, AND THAT'S AT PAGE -- I WILL TELL YOU -- IT'S AT PAGE 33 OF ECF 1174. WE DIDN'T ACTUALLY ADD VERY MUCH VERBIAGE AT ALL. IT'S ACTUALLY QUITE CLOSE TO THE MODEL INSTRUCTION. WHAT WE DID ADD IS IN THE FIRST LINE WE ADDED THAT THE CONCEPT THAT THE -- A MEMBER OF A CONSPIRACY IS RESPONSIBLE FOR THE REASONABLY FORESEEABLE ACTIONS. THAT CONCEPT IS LOWER IN THE MODEL INSTRUCTION, BUT WE THINK IT'S CRITICAL THAT THAT CONCEPT BE COMMUNICATED TO THE JURY RIGHT AWAY SINCE THAT'S KIND OF THE CORE OF PINKERTON LIABILITY. AND THEN WE DID -- THE OTHER THING THAT I WOULD PARTICULARLY POINT OUT IS THAT THE CASE LAW MAKES CLEAR THAT THIS CONCEPT OF REASONABLY FORESEEABLE ACTIONS NEEDS TO BE BASED ON THE FACTS THAT WERE KNOWN TO THE DEFENDANT AT THE TIME, AND WE ADDED THAT LANGUAGE INTO THE FINAL ELEMENT, WHICH IN OUR MODEL -- IN OUR PROPOSAL IS ELEMENT 6 AT PAGE 34, WHICH THE COURT COULD JUST AS EASILY INCORPORATE INTO WHAT IS I THINK THE FIFTH ELEMENT OF THE GOVERNMENT'S PROPOSAL. AND THEN I WOULD JUST NOTE THAT THE GOVERNMENT'S PROPOSAL DOES NOT -- THIS IS OUR FOURTH OBJECTION ON PAGE 14 -- DOES NOT MAKE CLEAR THAT THE RELEVANT OFFENSE NEEDS TO TAKE PLACE DURING THE PERIOD OF THE CONSPIRACY.
JUDGE DAVILA: ALL RIGHT. SO YOU'RE GOING TO -- I'M SORRY, MS. VOLKAR.
MS. VOLKAR: YOUR HONOR, I JUST WANTED TO RESPOND THAT THE LAST PART THAT MS. SAHARIA WAS TALKING ABOUT HIGHLIGHTS THE GOVERNMENT'S CONCERN. PINKERTON HAS BEEN AROUND FOR THE BETTER PART OF A CENTURY. THE MODEL INSTRUCTION HAS BEEN IN PLACE FOR A LONG TIME. BUT THE DEFENSE'S SUGGESTION ON PAGE 34 OF ECF 1174 SUGGESTS ADDING ANOTHER ELEMENT TO IT, AND SIGNIFICANTLY ALTERS THE FIFTH PARAGRAPH AS WELL AND THE SIXTH PARAGRAPH. SO, YES, THE PARTIES WILL MEET AND CONFER. BUT, AGAIN, I NOTE THAT THERE IS SIGNIFICANT DISAGREEMENT ON WHAT THE LANGUAGE SHOULD BE, NOT THE BROADER CONCEPTS OR WHAT THE STATE OF THE LAW IS.
JUDGE DAVILA: OKAY. THANK YOU. I'LL NOTE YOUR CONCERNS AND OBJECTIONS. ALL RIGHT. ANYTHING FURTHER ON THIS, MS. SAHARIA?
MS. SAHARIA: I DON'T BELIEVE SO. I THINK WE'RE NOW READY TO TALK ABOUT WIRE FRAUD.
JUDGE DAVILA: OKAY. THIS IS GOVERNMENT INSTRUCTION 8.124, AND THE CORRESPONDING INSTRUCTIONS FROM MS. HOLMES ARE 42 TO 55. AND WE'VE ALREADY COVERED, I THINK, THE BIG PICTURE POINT THAT IT'S OUR POSITION THAT THE COURT SHOULD INSTRUCT SEPARATELY ON THE TWO SCHEMES TO DEFRAUD. WE PROPOSED TO OVERVIEW KIND OF UMBRELLA INSTRUCTION AND KIND OF BREAK OUT THE ELEMENTS. I UNDERSTAND THE GOVERNMENT'S POSITION ON THAT. AND IT'S OUR POSITION THAT THERE SHOULD BE IN SOME WAY A COMMUNICATION OF THE PRECISE MISREPRESENTATIONS FROM THE INDICTMENT, AND WE'VE ALREADY TALKED ABOUT THAT. SO I DON'T THINK WE NEED TO DWELL ON THOSE POINTS UNLESS MS. VOLKAR WANTS TO ADD ANYTHING TO THOSE GENERAL POINTS.
MS. VOLKAR: NO, I THINK MS. SAHARIA CAPTURES IT. AGAIN, WE DON'T THINK THE ELEMENTS NEED TO BE BROKEN OUT. WE DON'T THINK THERE NEEDS TO BE A SEPARATE INSTRUCTION FOR EACH COUNT. WE DID ENDEAVOR TO ADD IN THE FILING THAT WE SUBMITTED YESTERDAY MORNING THE SPECIFIC COUNTS. WE FOLLOWED WHAT WE HAD IN THE VERDICT FORM. WE DID REMOVE COUNT NINE THROUGHOUT THE INSTRUCTIONS, OR ENDEAVORED TO DO SO. AND SO I THINK MS. SAHARIA IS CORRECT THAT WE'VE SORT OF COVERED THAT GROUND, BUT I WANTED TO ADD WHAT THE GOVERNMENT DID CHANGE IN THIS UPDATED FILING.
JUDGE DAVILA: OKAY. THANK YOU.
MS. SAHARIA: SO THAT BRINGS ME TO THE POINT THAT THE GOVERNMENT HAS PROPOSED TO ADD TO THE MODEL INSTRUCTIONS, WHICH WE COVER AT PAGES 14 TO 16 OF OUR OBJECTIONS. SO THE FIRST IS THE LANGUAGE THAT THEY PROPOSED TO ADD WHICH READS, "A DEFENDANT'S ACTIONS CAN CONSTITUTE A SCHEME TO DEFRAUD EVEN IF THERE ARE NO SPECIFIC FALSE STATEMENTS INVOLVED. YOU, AS MEMBERS OF THE JURY, DO NOT NEED TO AGREE ON WHICH STATEMENTS WERE FALSE, DECEITFUL OR FRAUDULENT IN FURTHERANCE OF THE SCHEME." WE HAVE GRAVE CONCERN ABOUT THIS LANGUAGE. THE INDICTMENT CHARGES WIRE FRAUD BASED ON FALSE STATEMENTS AND REPRESENTATIONS, AND IF ADOPTED, THIS LANGUAGE WOULD, WE THINK, CONSTITUTE AN IMPERMISSIBLE CONSTRUCTIVE AMENDMENT OF THE INDICTMENT. WE THINK THE COURT SHOULD JUST, AS WE SAID ALREADY, GIVE THE ALLEGATIONS OF THE INDICTMENT IN SOME WAY TO THE JURY, AND THE JURY CAN READ THOSE ALLEGATIONS WITHOUT THIS ARGUMENTATIVE LANGUAGE THAT THREATENS TO CONSTRUCTIVELY AMEND THE INDICTMENT.
MS. VOLKAR: WELL, YOUR HONOR, I THINK AS FAR AS ARGUMENTATIVE LANGUAGE, OF COURSE WE HAVE SEEN THE 100-PLUS PAGE FILING FROM THE DEFENSE, WHICH IS LITTERED WITH ARGUMENTATIVE STATEMENTS, AND I THINK THESE ARE ACCURATE STATEMENTS OF THE LAW. IN FACT, THE SECOND SENTENCE, THAT THE JURY DOES NOT NEED TO AGREE ON WHICH STATEMENTS ARE FALSE, DECEITFUL, OR FRAUDULENT IS A SOURCE OF MAJOR DISAGREEMENT BETWEEN THE GOVERNMENT AND THE DEFENSE, WHICH IS SURPRISING, BECAUSE I THINK IT'S BLACK LETTER NINTH CIRCUIT LAW. YOUR HONOR CITED ALMOST THIS EXACT STATEMENT IN THE CHANG CASE, AND I THINK IN A CASE SUCH AS THIS, IT IS IMPORTANT TO DESCRIBE FOR THE JURY UNDER THE LAW WHAT THEY DO AND DON'T HAVE TO AGREE ON, ESPECIALLY IF WE'RE IN THE LAND, WHERE IT SOUNDS LIKE WE ARE, THAT WE'LL BE MEETING AND CONFERRING AND DISCUSSING A SPECIFIC UNANIMITY INSTRUCTION, I THINK IT'S IMPORTANT TO ALSO LET THE JURY KNOW WHAT THEY DON'T HAVE TO AGREE ON, AGAIN, UNDER THE NINTH CIRCUIT PRECEDENT THAT WE ARE BOUND BY.
SO I DON'T THINK IT'S ARGUMENTATIVE. I THINK IT'S AN ACCURATE STATEMENT OF NINTH CIRCUIT LAW AND IMPORTANT TO HELP THE JURORS UNDERSTAND WHAT THEIR DUTIES ARE. SAME WITH THE -- I'M NOT SURE IF WE'VE MOVED TO THE SECOND PORTION, SO I DON'T WANT TO GET AHEAD OF MYSELF. BUT THE PORTIONS THAT WE HAVE ADDED HAVE BEEN PROVIDED BY THIS COURT, YOUR HONOR IN THE CHANG CASE IN SOME INSTANCES, AND JUDGE BREYER IN THE HUSSAIN CASE, ANOTHER HIGH PROFILE WIRE FRAUD AND CONSPIRACY CASE RECENTLY TRIED IN THIS DISTRICT. THERE IS PRECEDENT IN THIS DISTRICT FOR USING THESE, AND THEY ARE, AGAIN, BLACK LETTER NINTH CIRCUIT LAW. I DON'T CONSIDER THEM ARGUMENTATIVE, AND I THINK GIVEN THE WAY THE EVIDENCE HAS COME IN, SOME OF THEM ARE REQUIRED TO HELP CLEAR UP JUROR CONFUSION ABOUT WHAT IS AND ISN'T REQUIRED UNDER THE LAW.
JUDGE DAVILA: THANK YOU. MS. SAHARIA?
MS. SAHARIA: YES. AGAIN, OUR FUNDAMENTAL POINT IS THAT THE FIRST SENTENCE OF THIS PARAGRAPH, WHICH MS. VOLKAR DID NOT ADDRESS, THREATENS TO CONSTRUCTIVELY AMEND THE INDICTMENT WHICH CHARGES FALSE STATEMENTS. IT WILL BE HIGHLY CONFUSING TO THE JURY TO TELL THE JURY THAT IT DOESN'T NEED TO FIND SPECIFIC FALSE STATEMENTS WHEN THE INDICTMENT, THAT'S THE THEORY OF LIABILITY IN THIS CASE. THE THEORY OF LIABILITY IS ONE BASED ON FALSE STATEMENTS, NOT, YOU KNOW, SOME OTHER SCHEME TO DEFRAUD, LIKE CHECK KITING OR SOMETHING. I THINK THE CASES THAT INVOLVE CONDUCT, AS OPPOSED TO STATEMENTS, INVOLVE THINGS LIKE OF THAT NATURE. SO I THINK THAT THAT FIRST SENTENCE IS VERY MISLEADING IN THE CONTEXT OF THE ALLEGATIONS IN THIS CASE.
JUDGE DAVILA: IN REGARDS TO OUR CASE?
MS. SAHARIA: EXACTLY, YOUR HONOR.
JUDGE DAVILA: AND, MS. VOLKAR, WHAT ABOUT THAT? IS THIS, IS THIS -- THAT FIRST SENTENCE, AND I -- TO TAKE MS. SAHARIA'S POINT, AND I'M NOT SAYING I AGREE WITH IT, BUT SHE EXPRESSES CONCERN THAT THIS IS ABOUT SPECIFIC FALSE STATEMENTS, ISN'T IT? I THINK THAT'S WHAT SHE'S SAYING THE CASE IS ABOUT. AND DOES THIS MISINFORM? SHOULD IT BE REWORDED IN SOME OTHER MANNER TO CAPTURE THE SAME SENTIMENT?
MS. VOLKAR: YOUR HONOR, I DO BELIEVE THAT THERE IS THE MODEL INSTRUCTION THAT WE HAVEN'T GOTTEN TO YET ON WHAT A SCHEME TO DEFRAUD IS, SO I'M SORRY THAT I DON'T HAVE IT ALL RIGHT IN FRONT OF ME AND RIGHT IN MIND AT THE MOMENT. I DON'T THINK IT IS A CONSTRUCTIVE AMENDMENT. I DO THINK THAT IT'S A STATEMENT OF NINTH CIRCUIT LAW, WHICH IS, WHAT IS A SCHEME TO DEFRAUD? A SCHEME TO DEFRAUD IS A BROADER SCHEME. IT DOESN'T NECESSARILY HAVE TO BE THIS ONE FALSE STATEMENT TO THIS PERSON ON X DATE. AND I THINK THAT IS THE SENTIMENT THAT IS TRYING TO BE -- THAT IS EXPRESSED IN THIS STATEMENT. NOW, IF IT NEEDS TO BE SLIGHTLY REWORDED, MY UNDERSTANDING IS -- I BELIEVE THAT I PULLED THIS FROM THE INSTRUCTIONS IN THE HUSSAIN CASE, BUT AGAIN, IF IT NEEDS TO BE SLIGHTLY REWORDED, WE CAN WORK ON THAT. BUT I THINK AS A GENERAL PRINCIPLE, AND I DON'T THINK IT'S A CONSTRUCTIVE VARIANCE, IS THAT IN A SCHEME TO DEFRAUD, IT'S NOT BASED ON ONE SINGLE MISSTATEMENT MADE TO ONE SINGLE PERSON. IT IS AN OVERARCHING SCHEME THAT COULD INVOLVE MULTIPLE MISREPRESENTATIONS OR MULTIPLE MISSTATEMENTS TO DIFFERENT PARTIES, AND THAT IS THE CONCEPT THAT WE WERE TRYING TO CAPTURE HERE.
JUDGE DAVILA: I SEE. ALL RIGHT.
MS. SAHARIA: I'M WILLING TO DISCUSS WITH MY TEAM AND MEET AND CONFER WITH MS. VOLKAR ON THE SECOND SENTENCE. BUT THE FIRST SENTENCE, EVEN IF IT'S A CORRECT STATEMENT OF THE LAW IN THE ABSTRACT, IT'S NOT A CORRECT STATEMENT OF THE LAW AS IT APPLIES AS THE GOVERNMENT CHARGED THIS CASE. THAT'S OUR FUNDAMENTAL POINT.
JUDGE DAVILA: SURE. WELL, I'M CURIOUS, MS. VOLKAR, WHETHER YOU CAN LOOK AT THAT FIRST SENTENCE AND SEE IF YOU NEED IT, IF IT'S NEEDED IN THE CASE. AND IF SO, IF THERE'S SOME MODIFICATION THAT IS REQUIRED TO FIT THE FACTS IN OUR CASE DIFFERENT THAN WHAT IS HERE, AND I'LL CHARGE YOU WITH DOING THAT AND WE'LL HAVE SOME ADDITIONAL DISCUSSION ABOUT THIS.
MS. VOLKAR: UNDERSTOOD. THANK YOU, YOUR HONOR.
MS. SAHARIA: OKAY. THE NEXT ISSUE IS THE ADDITIONAL LANGUAGE, WHICH IS -- I'LL JUST READ IT TO BE CLEAR. "IT DOES NOT MATTER WHETHER THE MATERIAL TRANSMITTED BY WIRE WAS ITSELF FALSE OR DECEPTIVE SO LONG AS THE WIRE COMMUNICATION WAS USED AS A PART OF THE SCHEME, NOR DOES IT MATTER WHETHER THE SCHEME OR PLAN WAS SUCCESSFUL OR THAT ANY MONEY OR PROPERTY WAS OBTAINED." THIS REALLY COVERS TWO DIFFERENT CONCEPTS, SO LET ME JUST TAKE THEM IN TURN. THE FIRST IS THE PART BEFORE THE COMMA ABOUT THE TRANSMISSION OF THE WIRE. THAT IS AN INCORRECT DILUTION, IN OUR VIEW, OF THE WIRE ELEMENT. THE WIRE ELEMENT REQUIRES THAT THE DEFENDANT USE AN INTERSTATE WIRE COMMUNICATION TO CARRY OUT OR ATTEMPT TO CARRY OUT AN ESSENTIAL PART OF THE SCHEME. THAT IS THE LANGUAGE IN THE MODEL INSTRUCTION THAT COVERS THAT WIRE ELEMENT. AND THIS LANGUAGE IS SIMPLY SAYING THAT THE WIRE COMMUNICATION NEEDED TO BE USED AS A PART OF THE SCHEME, AS OPPOSED TO, TO CARRY OUT AN ESSENTIAL PART OF THE SCHEME. SO THOSE TWO PHRASES ARE SIMPLY INCONSISTENT WITH EACH OTHER, AND WE THINK IT'S AN ERROR TO INCLUDE THAT LANGUAGE FOR THAT REASON.
MS. VOLKAR: YOUR HONOR, THIS I WAS ABLE TO LOCATE IN THE TIME WHILE UP HERE. THIS WAS PULLED DIRECTLY FROM THE HUSSAIN INSTRUCTIONS GIVEN BY JUDGE BREYER. IT IS AN ACCURATE STATEMENT OF NINTH CIRCUIT LAW. I BELIEVE IT'S ALSO, AT LEAST THE SECOND HALF OF IT, THE PART THAT THE SCHEME OR PLAN NEED NOT BE SUCCESSFUL, WHICH I THINK WE MAY HAVE FURTHER ARGUMENT ON AS WE CONTINUE, WAS REITERATED BY YOUR HONOR IN THE CHANG ORDER FROM LAST YEAR. AND, AGAIN, I THINK IT'S BLACK LETTER NINTH CIRCUIT LAW AND I THINK IT'S IMPORTANT TO LET THE JURY KNOW WHAT THE LAW IS, AND IT MAY BE THAT THE INSTRUCTION THAT THE GOVERNMENT PROPOSED LATER COVERS THIS CONCEPT, AND THEN PERHAPS WE CAN STRIKE THIS SENTENCE. BUT OUT OF AN ABUNDANCE -- JUST IN CASE THE GOVERNMENT -- THE COURT WAS NOT INCLINED TO ADOPT THE GOVERNMENT'S LATER PROPOSED INSTRUCTION -- WHICH, OF COURSE, ISN'T BASED ON THE MODEL -- THIS IS SOMETHING THAT HAS BEEN DONE IN THIS DISTRICT, AND THEREFORE, WE WANTED TO USE SOMETHING THAT HAD CLEAR PRECEDENT, AND THAT'S WHY WE PROPOSED THIS LANGUAGE.
JUDGE DAVILA: WELL, I LOOKED AT THIS WITH THE SAME, THE SAME LENS AS OUR PREVIOUS DISCUSSION, WHETHER OR NOT THIS LANGUAGE FITS THE FACTS OF OUR CASE, AND IT'S -- I THINK YOU BOTH TOLD ME YOUR POSITIONS ON THAT. I'M NOT SURE WHETHER OR NOT A MEET AND CONFER ON THIS IS GOING TO BE HELPFUL.
MS. SAHARIA: WELL, LET ME ADDRESS THE SUCCESS POINT. I THINK, AS MS. VOLKAR NOTED, THERE'S THIS ONE PHRASE HERE, AND THEN THE GOVERNMENT HAS PROPOSED AN ENTIRELY SEPARATE INSTRUCTION ON SUCCESS OF THE SCHEME. I DON'T UNDERSTAND THE PURPOSE OF THAT INSTRUCTION ON THE FACTS OF THIS CASE. I THINK IT WILL MISLEAD THE JURY. NO ONE IS CLAIMING IN THIS CASE THAT THE SCHEME, THE ALLEGED SCHEME WAS NOT SUCCESSFUL. THE GOVERNMENT'S CLAIM IS THAT MS. HOLMES DEFRAUDED INVESTORS AND THEY DID GIVE MONEY TO THERANOS, AND THAT SHE DEFRAUDED PAYING PATIENTS, AND THEY DID PAY MONEY. OF COURSE, WE DISAGREE WITH THOSE ALLEGATIONS, BUT THAT IS THE THEORY OF THIS CASE. SO WHY IT'S NECESSARY TO TELL THE JURY THAT SUCCESS OF THE ALLEGED SCHEME IS NOT -- IS IMMATERIAL. I JUST DON'T UNDERSTAND. SO THAT'S MY CONCERN ABOUT CONFUSION. NOW, WE DO SEPARATELY TAKE THE POSITION THAT THIS PARTICULAR LANGUAGE, AS WELL AS THE SIMILAR LANGUAGE THAT THE GOVERNMENT INCLUDED LATER, IS INCORRECT AS A MATTER OF LAW.
IT IS CERTAINLY TRUE THAT WHETHER A SCHEME OR PLAN IS SUCCESSFUL IS NOT REQUIRED. IT IS NOT AN ELEMENT OF WIRE FRAUD. AND THE GOVERNMENT ADDED A SENTENCE TO THAT EFFECT IN THEIR LATER SUCCESS OF THE SCHEME INSTRUCTION, WHICH WAS AT PAGE 46 OF THEIR ORIGINAL SET. I'M NOT SURE WHAT PAGE IT IS ON NOW. BUT THAT'S VERY DIFFERENT THAN SAYING IT'S IMMATERIAL. YOU CAN IMAGINE A CASE WHERE A SCHEME DOESN'T SUCCEED AND THAT IS RELEVANT EVIDENCE THAT THE REPRESENTATIONS WERE NOT MATERIAL, FOR INSTANCE. AND WE CITED TO THE COURT THE LESTERBERG CASE WHICH STANDS FOR THE PROPOSITION THAT REFUNDS CAN BE RELEVANT TO INTENT OR MATERIALITY. AND THE SAME WITH THE SANDS MODEL INSTRUCTIONS THAT MAKE THIS POINT VERY CLEAR, THAT WHETHER THE SCHEME IS SUCCESSFUL MAY BE RELEVANT TO THE JURY EVEN IF IT'S NOT AN ELEMENT. AND USING THE LANGUAGE THAT THE GOVERNMENT HAS PROPOSED, WHICH IS TO SAY "NOR DOES IT MATTER," OR LATER THEY USE THE LANGUAGE "IMMATERIAL" WE THINK IS AN INCORRECT STATEMENT OF THE LAW FOR THAT REASON.
JUDGE DAVILA: THE SUCCESS OF THE FRAUD IS AT 1176, PAGE 26, I BELIEVE.
MS. VOLKAR: THAT'S CORRECT, YOUR HONOR.
MS. SAHARIA: YES, YOUR HONOR. AND OUR POINT THERE IS THAT -- SO THEY HAVE ADDED A NEW SENTENCE TO THIS IN THE MOST RECENT VERSION, WHICH IS THE SECOND SENTENCE. "IT IS NOT NECESSARY THAT THE DEFENDANT MADE A PROFIT OR THAT ANYONE ACTUALLY SUFFERED A LOSS." THAT IS, I BELIEVE, A CORRECT STATEMENT OF THE LAW. I DON'T UNDERSTAND ITS PURPOSE IN THIS CASE. IT'S COMPLETELY INCONGRUOUS WITH THE FACTS OF THE CASE AND I THINK ITS ONLY PURPOSE WILL BE TO MISLEAD THE JURY. BUT THE FIRST SENTENCE, WE MAINTAIN THE "NOT MATERIAL" SENTENCE IS A MISSTATEMENT OF THE LAW BECAUSE IT SUGGESTS TO THE JURY THAT IT'S IRRELEVANT, AND THAT'S JUST NOT THE CASE.
JUDGE DAVILA: OKAY.
MS. VOLKAR: YOUR HONOR, THIS IS ANOTHER AREA WHERE I WAS PREPARED TO TALK ABOUT THE SENTENCE ADDED TO THAT, BUT WE'VE SORT OF MOVED INTO THE SUCCESSFUL WIRE FRAUD, SO I'D LIKE TO TURN IT OVER TO MR. LEACH.
JUDGE DAVILA: SURE. OF COURSE. MR. LEACH, YOU CAN TAKE YOUR MASK OFF IF YOU WOULD LIKE.
MR. LEACH: THANK YOU, YOUR HONOR. SO THE FIRST SENTENCE OF -- I'M ON PAGE 26 AT DOCUMENT 1176, SUCCESS OF THE WIRE FRAUD SCHEME. THAT FIRST SENTENCE IS DRAWN DIRECTLY FROM YOUR HONOR'S INSTRUCTIONS IN A PRIOR CASE. I HEAR MS. SAHARIA'S POINT THAT SUCCESS OF THE SCHEME MAY BE RELEVANT TO A JURY'S ASSESSMENT OF WHETHER THE REPRESENTATIONS WERE MATERIAL. I THINK THAT'S CURATIVE. WE SIMPLY SAY SUCCESS OF THE SCHEME IS NOT REQUIRED FOR -- AS AN ELEMENT OF WIRE FRAUD. SO I THINK THAT CONCERN COULD BE ADDRESSED THAT WAY. WE ADDED THE SECOND SENTENCE BECAUSE I THINK THERE HAS BEEN SOME SUGGESTION FROM THE DEFENSE IN THIS CASE THAT THE DEFENDANT DIDN'T SELL HER STOCK AND, THEREFORE, SHE DIDN'T HAVE A MOTIVE. AND WE DON'T WANT THE JURORS TO THINK THAT PROFIT IS SOMEHOW REQUIRED IN ORDER TO MEET THE ELEMENTS HERE. I ALSO THINK THERE'S BEEN SOME SUGGESTION THAT THESE ARE SOPHISTICATED INVESTORS WHO ARE WELL POSITIONED, OR WHO ARE -- WHO HAVE SUFFICIENT RESOURCES TO ABSORB THESE LOSSES, AND WE DON'T WANT THE JURORS TO THINK THAT YOU NEED TO FIND THAT THIS PARTICULAR VICTIM LOST MONEY OR THAT THIS LOSS WAS PARTICULARLY IMPORTANT TO THEM. SO I DO THINK THAT THIS SERVES A PURPOSE, AND WHAT I'M HEARING FROM THE DEFENSE IS THAT THESE ARE, WITH THE EXCEPTION OF THE WORD "MATERIAL" THERE, THESE ARE ACCURATE STATEMENTS OF THE LAW, AND FOR THOSE REASONS WE THINK THIS INSTRUCTION IS APPROPRIATE.
JUDGE DAVILA: WELL, AS TO THE -- I'M SORRY. GO AHEAD.
MR. LEACH: GOING BACK TO THE WIRE FRAUD INSTRUCTION ITSELF, IF I WAS HEARING THE DEFENSE CORRECTLY, THE OBJECTION IS THAT THE WIRE NEEDS TO BE IN FURTHERANCE OF AN ESSENTIAL ELEMENT OF THE SCHEME OR BE AN ESSENTIAL PART OF THE SCHEME. I THINK THAT OBJECTION COULD BE CURED BY ADDING WORDS TO THE LANGUAGE THAT HAS BEEN USED BEFORE. BUT I DON'T HEAR ANY DISAGREEMENT WITH THE PRINCIPLE THAT THE WIRING ITSELF DOESN'T HAVE TO BE FALSE, AND WE JUST DON'T WANT THERE TO BE ANY CONFUSION AMONG THE JURORS THAT THEY HAVE TO SEE A FALSE STATEMENT IN THE WIRE. I THINK THAT'S A COMMON MISUNDERSTANDING.
JUDGE DAVILA: OKAY. MS. SAHARIA, TO MR. LEACH'S POINT, THAT LAST LANGUAGE IN THEIR SUCCESS OF THE WIRE FRAUD, 1176, PAGE 26, IT SEEMS TO ME THAT'S WHAT CAME TO MY MIND IS THAT THERE WAS EVIDENCE THAT WAS BROUGHT OUT FROM VARIOUS WITNESSES ABOUT WHETHER OR NOT MS. HOLMES HAD SECURED PROFIT; HER SALARY, I THINK, WAS IN EVIDENCE; AND ALSO THERE WAS EVIDENCE, AS MR. LEACH POINTS OUT, THROUGH CROSS-EXAMINATION OF WITNESSES, ABOUT THERE BEING SUCCESSFUL INVESTORS AND THOSE TYPES OF THINGS, WHICH SEEMS TO SUGGEST WHY THAT WOULD BE IN THERE. I'M NOT PUTTING MYSELF IN THE GOVERNMENT'S SHOES.
MS. SAHARIA: UNDERSTOOD.
JUDGE DAVILA: I'M JUST SAYING, WELL, PROBABLY THAT'S WHY THEY DID IT.
MS. SAHARIA: LET ME CONFER. THEY JUST ADDED THIS ONE YESTERDAY, SO LET ME CONFER WITH MY TEAM. I HAVEN'T HAD A CHANCE TO DISCUSS THAT PARTICULAR SENTENCE WITH THE TEAM.
JUDGE DAVILA: RIGHT.
MS. SAHARIA: I THINK YOUR HONOR HAS HEARD OUR OBJECTIONS MORE GENERALLY ON THIS ISSUE.
JUDGE DAVILA: RIGHT. OKAY. ANYTHING FURTHER, MR. LEACH, ON THIS TOPIC?
MR. LEACH: NO, YOUR HONOR. THANK YOU.
JUDGE DAVILA: GREAT. THANK YOU.
MS. SAHARIA: JUST TO FINALIZE ON THIS POINT, I THINK THERE'S A SIMILAR SENTENCE THAT THEY HAVE ADDED INTO THE WIRE FRAUD INSTRUCTION, WHICH I THINK IS OF THE SAME VEIN -- AND THIS IS AT THE TOP OF 16 AT ECF 1174. "SIMILARLY, IT DOES NOT MATTER IF THE DEFENDANT INTENDED TO REPAY THE MONEY OBTAINED THROUGH DECEPTION." WE ARE, AGAIN, VERY CONCERNED THAT THIS WILL CONFUSE THE JURY. A DEFENDANT'S BELIEF THAT INVESTORS WILL MAKE MONEY IS RELEVANT TO THE CASE, AND WE'VE HAD THAT DISCUSSION BACK A LONG TIME AGO AT THE MOTION IN LIMINE STAGE. THIS IS JUST AN ARGUMENTATIVE SENTENCE. IT DOESN'T REALLY FIT THE FACTS OF THIS CASE. IT'S GOING TO CONFUSE THE JURY. WE THINK AS RAISED, IT WOULD NEED A LOT MORE CONTEXT TO MAKE IT A NONCONFUSING, NONMISLEADING STATEMENT. WE WOULD NEED TO ADD LANGUAGE TO IT SIMILAR TO WHAT I JUST INDICATED ABOUT A DEFENDANT'S BELIEF THAT INVESTORS WILL MAKE MONEY MAY WELL BE RELEVANT. IN FACT, IT'S QUITE RELEVANT, AND SO WE OBJECT TO THAT SENTENCE.
JUDGE DAVILA: MR. LEACH?
MR. LEACH: YOUR HONOR, I THINK THIS INSTRUCTION IS IMPORTANT FOR THE REASONS UNDERSCORED BY WHAT MS. SAHARIA JUST SAID. THE INTENT REQUIRED FOR WIRE FRAUD IS AN INTENT TO DECEIVE OR CHEAT. IT'S KNOWLEDGE THAT THE STATEMENTS THAT YOU'RE MAKING TO THE VICTIM ARE FALSE AND MISLEADING. AND IT DOES NOT MATTER IF YOU HAVE A GOOD FAITH BELIEF THAT THEY'RE GOING TO GET REPAID SOME DAY. IT DOESN'T MATTER IF YOU HAVE A WIDE HEART HOPING THAT IT'S ALL GOING TO WORK OUT AT THE END OF THE DAY. IF YOU KNOW THAT THE STATEMENTS YOU'RE MAKING TO THE VICTIM ARE FALSE, THAT'S THE INTENT THAT'S RELEVANT FOR WIRE FRAUD. AND WE DON'T WANT THE JURORS TO BE CONFUSED HERE THAT, YOU KNOW, A HOPE THAT IT'S GOING TO WORK OUT; OR YOU THINK, IN THE PONZI SCHEME CONTEXT, THAT SOME DAY SOMETHING IS GOING TO COME THROUGH, THAT THAT NEGATES THE INTENT THAT'S REQUIRED FOR WIRE FRAUD, WHICH IS THE INTENT TO MISLEAD SOMEBODY THROUGH FALSE AND MISLEADING STATEMENTS. THAT'S THE INTENT THAT MATTERS. AND, YOU KNOW, I THINK WE'VE HEARD A LOT OF SUGGESTIONS FROM THE DEFENSE IN CROSS-EXAMINATION THAT EVERYBODY HOPED THIS WAS GOING TO WORK OUT AT THE END OF THE DAY, AND THAT VERY WELL MIGHT BE NICE AND TRUE. BUT THAT'S NOT REALLY GETTING AT THE CORE OF THE MENTAL STATE THAT IS REQUIRED HERE. AND SO THIS TIES WITH SOME OF THE OBJECTIONS THAT WE'RE GOING TO HAVE TO THEIR GOOD FAITH ARGUMENT, BUT WE THINK IT'S VERY IMPORTANT TO GET ACROSS THIS CONCEPT THAT A GOOD FAITH INTENT TO REPAY AT THE END OF THE DAY DOESN'T NEGATE KNOWINGLY MAKING FALSE STATEMENTS TO SOMEBODY.
JUDGE DAVILA: DO YOU PART COMPANY WITH THAT CONCEPT, MS. SAHARIA?
MS. SAHARIA: I'M SORRY?
JUDGE DAVILA: DO YOU PART COMPANY WITH THAT CONCEPT?
MS. SAHARIA: NO, YOUR HONOR. AND, IN FACT, THE COURT HAS ALREADY ENTERED AN ORDER IN CONNECTION WITH THE MOTION IN LIMINE PROHIBITING US FROM MAKING THAT ARGUMENT, AND OF COURSE WE DON'T INTEND TO MAKE THAT ARGUMENT. THE INTENT THAT IS REQUIRED UNDER THE STATUTE IS ALREADY CONVEYED IN THE INSTRUCTIONS. OF COURSE WE CANNOT ARGUE TO THE JURY THAT IF MS. HOLMES INTENDED TO DECEIVE INVESTORS, IT DOESN'T MATTER SO LONG AS SHE THOUGHT AT SOME POINT IN THE FUTURE THEY WOULD GET REPAID. WE CAN'T MAKE THAT ARGUMENT. WE'RE NOT GOING TO MAKE THAT ARGUMENT. THIS INSTRUCTION IS A STRAW MAN AGAINST AN ARGUMENT THAT WE'RE NOT GOING TO BE MAKING IN THIS CASE. AGAIN, FOR THE REASONS I'VE ALREADY SAID, WE'RE CONCERNED IT WILL CONFUSE THE JURY ABOUT THE FACT THAT IF SHE BELIEVED THE INVESTORS WOULD MAKE MONEY, THAT IS RELEVANT. SO IF THE GOVERNMENT IS GOING TO INSIST ON INCLUDING THIS LANGUAGE, WE WOULD PROPOSE ADDITIONAL LANGUAGE TO ACCOMPANY IT TO GIVE THE JURY KIND OF A FULSOME UNDERSTANDING OF THESE ISSUES AROUND INTENT, AND WE THINK IT'S PERFECTLY COVERED BY THE INSTRUCTIONS ALREADY AND IS UNNECESSARY.
JUDGE DAVILA: DOES THIS TOUCH ON YOUR, I DON'T WANT TO GET AHEAD OF OURSELVES, BUT YOUR GOOD FAITH OFFERING, YOUR DESIRE TO HAVE A GOOD FAITH -- I'LL JUST CALL IT THAT -- INSTRUCTION? IT SEEMS LIKE THESE TWO ARE INTERTWINED.
MS. SAHARIA: I DON'T THINK SO, YOUR HONOR, BECAUSE A GOOD FAITH INSTRUCTION IS COMMONLY GIVEN IN CASES OF THIS SORT, AND I'LL TURN TO THAT WHEN WE TALK A LITTLE BIT ABOUT PUFFERY AND THE CASES AROUND PUFFERY INSTRUCTIONS AND GOOD FAITH INSTRUCTIONS. BUT I'M, I'M HAPPY TO KIND OF TAKE THIS SENTENCE AND SEE IF THERE'S SOME WAY TO -- IF THE GOVERNMENT WANTS TO PROPOSE A WAY TO INCORPORATE THIS CONCEPT INTO OUR GOOD FAITH INSTRUCTION, WE CAN MEET AND CONFER AROUND THAT. I'D BE HAPPY TO MEET AND CONFER WITH MR. LEACH ABOUT THAT.
JUDGE DAVILA: RESTRAIN YOUR ENTHUSIASM, MR. LEACH.
MR. LEACH: I'M DOING MY BEST.
JUDGE DAVILA: SO THE CONCEPT HERE IS ONE THAT I THINK WE ALL AGREE WITH, THE FACT THAT A DEFENDANT, AN ACCUSED, BELIEVED THAT, OH, THIS IS GOING TO SUCCEED, AND SO THAT'S A DEFENSE, BECAUSE I KNEW IT WAS GOING TO SUCCEED, I THINK THAT'S WHAT WE'RE TALKING ABOUT IS -- AND YOU AGREE WITH THAT GENERAL CONCEPT?
MS. SAHARIA: NOT QUITE, YOUR HONOR. I THINK THE FACT THAT A DEFENDANT THINKS THAT HER VENTURE IS GOING TO SUCCEED IS HIGHLY RELEVANT EVIDENCE OF INTENT THAT IS ENTIRELY PROPER. WHAT IS NOT PROPER IS FOR -- IS TO ARGUE THAT A DEFENDANT KNOWINGLY MADE FALSE STATEMENTS AND THOUGHT NONETHELESS, I THINK IT'S GOING TO SUCCEED. THAT IS THE IMPROPER ARGUMENT. BUT EVIDENCE THAT A DEFENDANT THOUGHT HER VENTURE WAS GOING TO SUCCEED IS HIGHLY RELEVANT, WE BELIEVE, TO HER INTENT BECAUSE IT SHOWS THAT SHE BELIEVED THAT WHAT SHE WAS SAYING WAS TRUE.
JUDGE DAVILA: AND I GUESS WHAT I WAS REFERRING TO IS THAT VICTIMS WOULD GET REPAID THROUGH WHATEVER IT IS THE SCHEME, THE PLAN WAS.
MS. SAHARIA: IF THERE OTHERWISE IS AN INTENT TO DEFRAUD, YES, I AGREE WITH THAT, YOUR HONOR.
JUDGE DAVILA: THAT'S RIGHT. OKAY. MR. LEACH?
MR. LEACH: AGAIN, YOUR HONOR, IT'S -- I THINK, BASED ON EVERYTHING THAT MS. SAHARIA JUST SAID, IT'S IMPORTANT TO MAKE THIS CONCEPT CLEAR TO THE JURY. YES, A DEFENDANT'S OPTIMISM ABOUT A COMPANY MIGHT HAVE SOME RELEVANCE IN THE CASE SOMEWHERE, BUT THE REQUIRED INTENT IS THE INTENT TO DECEIVE AND CHEAT. AND I'M VERY WORRIED ABOUT JUROR CONFUSION THAT, YOU KNOW, BECAUSE THE DEFENDANT HAD A VISION OR BECAUSE THE DEFENDANT, YOU KNOW, WAS GUNG HO ABOUT THE COMPANY, THAT THAT THEREFORE NEGATES THE INTENT OR THE KNOWLEDGE THAT THE STATEMENTS THAT SHE'S MAKING ARE FALSE, AND I THINK THAT CONCEPT, IT'S VERY EASY TO MUDDLE THAT GOOD FAITH INTO SOMETHING THAT SUPPORTS AN IMPROPER CONCLUSION BY THE JURY.
JUDGE DAVILA: ALL RIGHT. THANK YOU.
MS. SAHARIA: OKAY. I THINK WE CAN MOVE ON FROM THAT POINT. I'M STILL AT PAGE 16, AND THIS IS THE ISSUE OF DEFINING SCHEME TO DEFRAUD. YOUR HONOR MAY RECALL THAT WE HAD THIS DISCUSSION AT THE TIME OF THE PRELIMINARY INSTRUCTIONS, AND OUR CONCERN WITH THE MODEL INSTRUCTION IS THAT IT DOESN'T DEFINE SCHEME TO DEFRAUD AND THAT A JURY MIGHT BE MISLED FROM THE MODEL LANGUAGE INTO THINKING THAT A SCHEME TO DEFRAUD IS NOT A SCHEME FOR OBTAINING MONEY OR PROPERTY, AND THE SUPREME COURT HAS EXPLAINED HOW THAT SIMPLE READING OF THE STATUTE IN THE MCNALLY CASE IS AN INCORRECT READING OF THE STATUTE. AT THE TIME OF THE PRELIMINARY INSTRUCTIONS, WE PROPOSED THE DEFINITION OF THE SCHEME TO DEFRAUD, WHICH AS I RECALL, THE COURT DID ADD TO THE PRELIMINARY INSTRUCTIONS. WE PROPOSED A SOMEWHAT DIFFERENT ONE FOR THE COURT'S CONSIDERATION NOW, AND THAT'S AT THE PAGE -- LET ME JUST FLIP AHEAD. THAT'S AT 32 OF OUR SUBMISSION 1174. AND THIS IS STILL BASED ON THE SUPREME COURT'S RECENT CASE IN KELLY, WHICH IS THE MOST RECENT WIRE FRAUD CASE FROM THE COURT. THE PRINCIPAL DIFFERENCE BETWEEN WHAT WE HAD EARLIER PROPOSED AND WHAT WE PROPOSE NOW IS TO USE THE WORD "OBTAIN MONEY OR PROPERTY" AS OPPOSED TO "DEPRIVE THE VICTIM OF MONEY OR PROPERTY," AND THE REASON FOR THAT IS THAT THE STATUTE USES THE WORD "OBTAIN," AND SO WE THOUGHT IT WAS MORE FAITHFUL TO THE STATUTE AND TO THE NINTH CIRCUIT CASES DISCUSSING THE STATUTE TO USE THE WORD "OBTAIN."
JUDGE DAVILA: ALL RIGHT.
MR. LEACH: THERE'S NO NEED TO REVISE THE MODEL INSTRUCTION HERE, YOUR HONOR. THIS HAS BEEN USED REPEATEDLY IN THIS COURT AND BY OTHER JUDGES WITHIN THIS DISTRICT. I THINK THERE'S NO RISK FOR CONFUSION ABOUT WHAT A SCHEME OR PLAN TO DEFRAUD IS. WE WOULD OBJECT TO USING "OBTAIN" RATHER THAN "DEPRIVE." EVEN UNDER THE KELLY CASE AND OTHER RECENT SUPREME COURT CASES, EVEN A TEMPORARY DEPRIVATION OF PROPERTY WOULD BE SUFFICIENT. I THINK THE MORE DEFINITIONS WE ADD HERE, THE MORE RISK OF CONFUSION AND LENGTHENING OF THE INSTRUCTIONS, SO WE WOULD URGE THE COURT TO STICK TO THE MODEL HERE.
JUDGE DAVILA: I THINK I DID CHANGE THE PRELIMINARY AND GAVE THE DEFENSE VERSION, I THINK.
MS. SAHARIA: YOU DID, YOUR HONOR.
JUDGE DAVILA: AND I ADOPTED YOUR SUGGESTIONS. AND WHY IS THAT NOT APPROPRIATE NOW TO CONTINUE WITH THAT? PARDON ME.
MS. SAHARIA: I DO THINK IT IS APPROPRIATE TO GIVE A DEFINITION OF SCHEME TO DEFRAUD, FOR THE REASONS THAT WE SAID BOTH AT THAT TIME AND NOW. IT'S JUST WHEN WE LOOKED BACK AT THE LANGUAGE WE HAD PROPOSED, WHICH USED THE LANGUAGE "DEPRIVE," AND WE LOOKED AT THE REST OF THE KELLY CASE, AS WELL AS THE LANGUAGE OF THE STATUTE, IT SEEMED TO US THAT "OBTAIN" IS THE MORE PROPER STANDARD, WHICH WAS THE REASON FOR PROPOSING SLIGHTLY DIFFERENT LANGUAGE. BUT IF THE COURT IS NOT CONVINCED THAT "OBTAIN" NEEDS TO BE THE LANGUAGE, THEN WE WOULD ASK THE COURT TO USE THE LANGUAGE IT USED IN THE PRELIMINARY INSTRUCTIONS AS AN ALTERNATIVE.
JUDGE DAVILA: ALL RIGHT. THANK YOU.
MS. SAHARIA: I THINK JUST -- THERE'S STILL A FEW MORE OBJECTIONS ON WIRE FRAUD THAT I'LL JUST KIND OF WALK THROUGH. WE ASKED THE COURT TO GIVE LANGUAGE, THIS IS AT 16 -- THE BOTTOM OF PAGE 16 OF ECF 1174. THIS COMES STRAIGHT FROM NINTH CIRCUIT LAW, THAT "A SCHEME TO DEFRAUD IS NOT NECESSARILY TO BE INFERRED FROM AN UNPROFITABLE VENTURE," JUST GIVEN THE FACTS OF THIS CASE AND GIVEN THE FACT THAT, OF COURSE, THERANOS NO LONGER EXISTS.
JUDGE DAVILA: MR. LEACH?
MR. LEACH: WE OBJECT, YOUR HONOR. I THINK THAT'S ARGUMENT.
JUDGE DAVILA: AND THESE ARE YOUR -- IS THIS YOUR 43 AND 50, MS. SAHARIA?
MS. SAHARIA: I BELIEVE SO, YOUR HONOR. HOLD ON. CORRECT, YOUR HONOR.
JUDGE DAVILA: OKAY.
MS. SAHARIA: AND TO THE EXTENT IT'S ARGUMENT, IT'S NO LESS ARGUMENT THAN THE POINT WE WERE JUST DISCUSSING, YOUR HONOR. SO I'LL JUST LEAVE IT AT THAT.
JUDGE DAVILA: OKAY. THANK YOU.
MS. SAHARIA: THE NEXT POINT I'LL MAKE IS THAT WE REQUEST THAT THE COURT INSTRUCT THE JURY THAT -- AND THIS COMES -- THIS IS AT PAGE 17, THAT -- AND THIS IS THE LANGUAGE THAT WE ADDED. THIS IS AT PAGE 59 OF ECF 809. WE ADDED LANGUAGE EXPLAINING, "IT IS NOT ENOUGH FOR THE GOVERNMENT TO PROVE THAT THOSE STATEMENTS CAUSED SOMEONE TO ENTER INTO A TRANSACTION THAT HE OR SHE WOULD OTHERWISE HAVE AVOIDED. IN ORDER TO PROVE THAT A SCHEME TO DEFRAUD EXISTED, THE GOVERNMENT MUST PROVE BEYOND A REASONABLE DOUBT THAT THE MATERIALLY FALSE AND FRAUDULENT PRETENSES, REPRESENTATIONS AND PROMISES MISREPRESENTED AN ESSENTIAL ELEMENT OF THE BARGAIN." AND THAT POINT IS TO INCORPORATE THE POINT THAT WE HAD DISCUSSED WAY BACK WHEN AT THE FIRST MOTION TO DISMISS, WHICH IS THAT IF AN ALLEGED VICTIM GOT WHAT THEY THOUGHT THEY WERE GETTING, FOR EXAMPLE, THEY ACTUALLY GOT AN ACCURATE AND RELIABLE BLOOD TEST, THAT IS NOT WIRE FRAUD, EVEN IF KNOWING WHAT THEY, YOU KNOW, WHAT THEY NOW KNOW, THEY WOULDN'T HAVE ENTERED THAT TRANSACTION. IF THEY GOT WHAT THEY THOUGHT THEY WERE GETTING, THEN THAT'S NOT WIRE FRAUD, AND WE THINK ON THE FACTS OF THIS CASE, THAT'S AN IMPORTANT CONCEPT FOR THE JURY TO HEAR.
JUDGE DAVILA: MR. LEACH?
MR. LEACH: I THINK THESE ARE ADDITIONS AND NUANCES THAT COULD BE MADE IN VIRTUALLY ANY WIRE FRAUD CASE, AND IT'S ADDING UNNECESSARY DETAIL TO THE MODEL WIRE FRAUD INSTRUCTION. IT'S REALLY A DEFENSE THEORY OF THE CASE, AND I THINK IT UNNECESSARILY MUDDIES THE WATERS, MAKES THE INSTRUCTIONS LONGER, AND REALLY IS INJECTING A DEFENSE ARGUMENT THAT IS BETTER MADE BY THEM AND NOT WITH THE IMPRIMATUR OF THE COURT.
JUDGE DAVILA: WELL, IT LOOKED -- YOU KNOW, PARDON ME, AND I DON'T MEAN TO BE CRITICAL OF THE WORK PRODUCT, BUT IT JUST LOOKED TO ME -- AND I JUST GAVE IT A HIGH LEVEL GLANCE PERHAPS AND LOOKED AT IT A LITTLE BIT -- IT DID LOOK A LITTLE, YOUR C, WHAT YOU IDENTIFY IN PARAGRAPH C, IT JUST SEEMS TO BE A LOT. I'M CONCERNED THAT IT'S GOING TO BE CONFUSING TO A JURY. IF YOU WANT TO WORK SOME EDITS ON THIS SO WE CAN DISCUSS IT SOME MORE --
MS. SAHARIA: OKAY.
JUDGE DAVILA: -- I'M HAPPY TO DO THAT.
MS. SAHARIA: WE WILL TRY THAT, YOUR HONOR.
JUDGE DAVILA: OKAY. AND THEN I THINK D IS, AGAIN, BACK TO THE SUMMARY.
MS. SAHARIA: I THINK D WE DISCUSSED ALREADY.
JUDGE DAVILA: RIGHT, I THINK WE HAVE.
MS. SAHARIA: AND THEN WE DISCUSSED THE ISSUE OF SPECIFIC UNANIMITY ALREADY. I THINK -- I TAKE YOUR -- IF I MIGHT TAKE THE COURT'S INVITATION TO PROPOSE A VERY SHORT VERSION OF THAT, WE WILL TRY OUR HAND AT THAT.
JUDGE DAVILA: OKAY.
MS. VOLKAR: YOUR HONOR, MAY I BE HEARD ON THAT POINT?
JUDGE DAVILA: YES, OF COURSE.
MS. VOLKAR: AND SORRY FOR THE BACK AND FORTH BETWEEN MR. LEACH AND MYSELF. WE DIDN'T BREAK IT UP ON THE OBJECTIONS, SO --
JUDGE DAVILA: NO, THIS IS -- YOU'RE HELPING ME.
MS. VOLKAR: WE'RE DOING A DANCE OVER HERE. BUT ON THE SPECIFIC UNANIMITY, I WANTED TO SPECIFICALLY OBJECT MORE SO THAN WHAT WE TALKED ABOUT BEFORE. THERE IS NO BASIS, NO PRECEDENT FOR GIVING A SPECIFIC UNANIMITY INSTRUCTION FOR A WIRE FRAUD COUNT. WE WERE DISCUSSING IT WITH RESPECT TO CONSPIRACY AND THE FACT THAT THERE MAY BE CONFUSION WHEN THE EVIDENCE SHOWS MULTIPLE CONSPIRACIES AND THE INDICTMENT HAS ONLY CHARGED ONE CONSPIRACY. THAT'S THE LAPIERRE CASE. WE UNDERSTAND THE LAPIERRE CASE.
JUDGE DAVILA: THAT'S TYPICALLY WHERE YOU SEE THAT.
MS. VOLKAR: THAT'S TYPICALLY WHERE YOU SEE THAT. THAT'S NOT WIRE FRAUD. I HAVE SEARCHED, AND I INVITE THE DEFENSE TO POINT ME TO ONE, I HAVE NOT SEEN A SINGLE CASE, AND THEY DIDN'T CITE ANY IN THE NINTH CIRCUIT, WHERE A SPECIFIC UNANIMITY INSTRUCTION IS USED IN A WIRE FRAUD CASE. SO I WANT TO REALLY STRENUOUSLY OBJECT. THEY INCLUDE IT FOR EACH AND EVERY COUNT, NOT JUST THE CONSPIRACY COUNTS, BUT ALSO WIRE FRAUD, AND IT IS PARTICULARLY INAPPROPRIATE FOR THE WIRE FRAUD COUNTS AND THERE'S NO SUPPORT, NO PRECEDENT, NO BASIS FOR IT.
MS. SAHARIA: I MEAN, I THINK THE NINTH CIRCUIT CASES MAKE PRETTY CLEAR THAT SCHEMES TO DEFRAUD IN CONSPIRACIES ARE, YOU KNOW, VERY CLOSE TO EACH OTHER. AND, IN FACT, THAT'S WHY THE NINTH CIRCUIT RECOGNIZES THE PRINCIPLE OF COSCHEMER LIABILITY AND BASICALLY BASES IT ON PINKERTON LIABILITY AND SAYS WHEN YOU HAVE TWO PEOPLE IN A SCHEME TO DEFRAUD, WE'RE GOING TO APPLY THE SAME CONCEPTS FROM CONSPIRACY IN THE SCHEME TO DEFRAUD CONTEXT. SO I DON'T THINK THERE'S ANYTHING AT ALL UNUSUAL ABOUT HAVING A SPECIFIC UNANIMITY INSTRUCTION WHEN THE TWO SEPARATE SCHEMES ARE CHARGED, JUST LIKE TWO SEPARATE CONSPIRACIES. BUT LET US AGAIN PROPOSE LANGUAGE AND THE COURT CAN CONSIDER IT.
JUDGE DAVILA: WELL, THAT'S FINE. LET ME SAY, I DO CAPTURE THE OBSERVATION THAT THIS INSTRUCTION IS, IS PERHAPS STRONGER AND MORE APPROPRIATE FOR CONSPIRACIES AND MULTIPLE CONSPIRACIES. I'VE NOT EXPERIENCED IT IN WIRE FRAUDS AS YOU SUGGEST, SO I'M HAPPY TO LOOK AT WHAT YOUR SUGGESTION IS.
MS. SAHARIA: OKAY. THANK YOU, YOUR HONOR.
MS. VOLKAR: YOUR HONOR, IF I MAY MAKE A BROADER POINT? AS WE HAVE BEEN GOING THROUGH, SINCE WE'VE BEEN GOING THROUGH THE OBJECTIONS OF THE GOVERNMENT'S, WE'RE OF COURSE SKIPPING LARGE SWATHS, PARAGRAPHS, PAGES OF WHAT THE DEFENSE HAS SUGGESTED IN THEIR ORIGINAL FILING. I UNDERSTAND THAT MAYBE THEY'RE INTENDING TO STREAMLINE THAT. IT HAD BEEN MY UNDERSTANDING THAT THAT'S WHAT THE PARTIES WERE ORDERED TO DO BY 10:00 A.M. YESTERDAY. IT SEEMS THAT THERE MAY HAVE BEEN SOME CONFUSION, PERHAPS ON MY PART CANDIDLY, BUT THERE MAY HAVE BEEN SOME CONFUSION ABOUT WHAT WE WERE SUPPOSED TO DO. BUT I WILL POINT OUT THAT WE'RE DOING A HIGH LEVEL PASS HERE, AND IF WE'RE STARTING FROM THE GOVERNMENT'S SUGGESTIONS, THEN THAT'S FINE WITH ME. BUT THERE ARE LARGE SWATHS OF THE DEFENSE'S PROPOSALS WHICH ARE VERY ARGUMENTATIVE, GO FAR BEYOND THE MODEL INSTRUCTION, AS I STARTED OFF SAYING, THAT WE'RE WHOLLY SKIPPING TODAY. AND AGAIN, MAYBE THAT'S BECAUSE THE INTENT IS TO CUT THAT OUT IN THE STREAMLINING PROCESS AND, THEREFORE, THERE'S NO POINT TO WASTE TIME ON IT. BUT I DO WANT TO EMPHASIZE THAT AS WE'RE FOCUSSING ON THE GOVERNMENT'S INSTRUCTIONS HERE, I DON'T WANT TO LOSE SIGHT OF THE FACT THAT THERE'S MANY PARAGRAPHS, MANY PAGES THAT WE'RE NOT EVEN DISCUSSING OF WHAT THE DEFENSE HAS SUGGESTED ADDING.
JUDGE DAVILA: THANK YOU. AND YOUR TEAMS CAN LOOK AT CALENDARS AND WE'LL HAVE TO HAVE ANOTHER MEETING, MAYBE TWO, WE MIGHT HAVE ANOTHER -- WE WILL HAVE ANOTHER MEETING, AND MAYBE WE'LL HAVE A FINAL MEETING ON THE INSTRUCTIONS. BUT TODAY WE'VE GOT ABOUT ANOTHER 20 MINUTES. I THINK WE NEED TO BREAK AT 11:00 O'CLOCK TODAY. SO LET'S PRESS ON AND GET WHAT WE CAN DONE.
MS. SAHARIA: OKAY. JUST TO RESPOND TO MS. VOLKAR'S POINT, I TAKE TO HEART THE COURT'S REQUEST THAT WE, YOU KNOW, STREAMLINE OUR PROPOSAL. TO THE EXTENT THAT THERE IS LANGUAGE THAT WE INCLUDED IN OUR PROPOSAL THAT WE REQUEST BE ADDED INTO THE MODELS, I HAVE BEEN COVERING THOSE. WE COVERED THOSE BOTH IN OUR WRITTEN OBJECTIONS AND I'VE BEEN REITERATING THOSE TODAY. SO TO THE EXTENT THAT THERE'S A CONCEPT THAT WE THINK SHOULD BE INCLUDED THAT WE PROPOSED, I HAVE BEEN COVERING THOSE TODAY.
JUDGE DAVILA: OKAY. THANK YOU. CAN I -- LET ME JUST STOP ALSO HERE AND TELL YOU THAT ULTIMATELY WHEN WE GET TO THE INSTRUCTIONS WHAT I HAVE DONE, AND WHAT I THINK I'LL DO IN THIS CASE, IS I'M GOING TO TASK THE PARTIES TO, AGAIN, SINCE YOU'RE DOING SO WELL AS MEETING AND CONFERRING, I'M GOING TO -- IT'S HIGHLY LIKELY THAT WHEN WE FINISH OUR DISCUSSION AND WE START WINNOWING DOWN WHAT THE FINAL INSTRUCTIONS WILL BE, I MAY TASK THE PARTIES TO PUT TOGETHER IN A WORD DOCUMENT THE FINAL VERSION, AND THEN WE'LL LOOK AT THAT AND USE THAT AS WELL. SO I JUST GIVE YOU THAT NOTICE IN ADVANCE. I MAY ASK YOU TO BE THE SCRIBNER FOR THE INSTRUCTIONS, AND THEN I'LL LOOK AT THEM AND THEN COMPARE THEM WITH WHAT I HAVE AND THEN WE'LL GO FORWARD. WHAT I WANT TO DO IS PREPARE THEM IN A WORD DOC, AND THE GOVERNMENT IS FAMILIAR WITH MY PRACTICE HERE. WE PUT IT IN A WORD DOC. WE ELIMINATE THE -- IF MODEL INSTRUCTIONS ARE USED, AND IT'S JUST THE INSTRUCTION AND THE TITLE, AND ALL OF THE BORDERS AND ALL OF THAT IS GONE. SO THAT'S GOING TO BE OUR FINAL WORK PRODUCT. BUT I'M MOST LIKELY GOING TO TASK YOU TO PUT THAT TOGETHER, BOTH SIDES, AND THEN WE'LL HAVE OUR FINAL MEETING ON THAT. OKAY. THANK YOU.
MS. SAHARIA: GREAT.
JUDGE DAVILA: WHAT IS NEXT, MS. SAHARIA?
MS. SAHARIA: WELL, LET'S SEE IF WE CAN AT LEAST GET THROUGH MOST OF WIRE FRAUD BEFORE WE CONCLUDE. SO NOW I'M AT PAGE 18 OF OUR OBJECTIONS. WE PROPOSED, AND I'LL JUST REQUEST THAT THE COURT GIVE OUR MORE FULSOME DESCRIPTIONS OF WHAT CONSTITUTES FALSITY AS SUBPARAGRAPH A. BUT I DON'T THINK THAT WE NEED TO DWELL ON THAT. ON B, I DO REQUEST THAT -- I THINK WE'RE LARGELY IN AGREEMENT ON THE DEFINITION OF MATERIALITY, WHICH COMES FROM THE MODEL INSTRUCTION. BUT WE DO PROPOSE THAT THE COURT ADD THE LANGUAGE "IN THE CONTEXT IT WAS MADE" TO MAKE CLEAR TO THE JURY, AS WE'VE BEEN DISCUSSING IN THIS CASE, INCLUDING AT THE MOTION IN LIMINE STAGE, THAT MATERIALITY IS ASSESSED IN THE CONTEXT IN WHICH STATEMENTS WERE MADE, AND WE THINK THAT LANGUAGE IS IMPORTANT TO CONVEY IN THIS CASE. AND WE INCLUDED THAT IN OUR PROPOSAL, WHICH IS 46 AND 53, JUST THAT BRIEF ADDITION. MS. VOLKAR?
MS. VOLKAR: YOUR HONOR, I THINK THAT THE FALSITY AND MATERIALITY INSTRUCTIONS ARE POSSIBLY THE EPITOME OF THE GOVERNMENT'S OBJECTIONS. THERE ARE TWO SEPARATE INSTRUCTIONS THERE, I THINK THEY ARE NEARLY IDENTICAL FOR SEPARATE COUNTS. THEY ARE A PAGE LONG. THEY TAKE A SENTENCE OUT OF THE MODEL INSTRUCTION AND MAKE IT A PAGE, AND I DO THINK THAT THAT SPEAKS FOR ITSELF. IT'S UNNECESSARY. THE JURORS DON'T NEED A LEGAL TREATISE. THE MODEL INSTRUCTIONS HAVE BEEN USED OVER AND OVER AND OVER AGAIN IN WIRE FRAUD AND CONSPIRACY CASES AND I DON'T KNOW WHY THERE'S ANYTHING ABOUT THE FACTS OF THIS CASE THAT WARRANT ANYTHING DIFFERENT. AGAIN, THE PARTIES ARE FREE TO ARGUE IN CLOSING ARGUMENTS THEIR INTERPRETATION, AS LONG AS IT'S CONSISTENT WITH THE LAW. WE DON'T NEED TO GO BEYOND THE MODEL.
JUDGE DAVILA: THANK YOU. I WAS LOOKING AT THIS AND I WAS LOOKING AT PAGE 20 OF 1176, THAT'S THE GOVERNMENT'S. ON LINE 1 AFTER -- IT READS, "SECOND, THE STATEMENTS MADE OR FACTS OMITTED AS PART OF THE SCHEME WERE MATERIAL." PARDON ME. I'M JUST GOING TO THIS BECAUSE IT'S IN MY MIND RIGHT NOW AND I'M LOOKING AT THIS.
MS. SAHARIA: YES.
JUDGE DAVILA: AND I'M CURIOUS WHETHER, AFTER THE "WERE MATERIAL," WOULD IT BE HELPFUL TO ADD SOMETHING, "A STATEMENT IS MATERIAL IF," OR SOME KIND OF DEFINITION OR SOMETHING THERE?
MS. SAHARIA: SO I THINK THAT MIGHT BE MORE UNDERSTANDABLE TO THE JURY THAN THE PHRASE "THAT IS." WE ALL UNDERSTAND THAT THAT IS DEFINING MATERIAL, BUT THE JURY MAY NOT BE UNDERSTANDING THAT. OUR POINT IS THAT WE WOULD ADD TO THE END OF THAT LINE, "A PERSON TO PART WITH MONEY OR PROPERTY IN THE CONTEXT THEY WERE MADE, IN THE CONTEXT THE STATEMENTS WERE MADE." THAT'S OUR PROPOSAL. BUT I DO AGREE WITH THE COURT WITH RESPECT TO MAYBE REPLACING "THAT IS" LANGUAGE.
JUDGE DAVILA: A DEFINITIVE STATEMENT.
MS. SAHARIA: YEAH, EXACTLY.
JUDGE DAVILA: RIGHT. AND THAT MIGHT GIVE SOME CLARITY AND RESOLVE THAT.
MS. VOLKAR: YOUR HONOR, MY APOLOGIES. I DIDN'T GET TO THE PAGE FAST ENOUGH. WHAT PAGE?
JUDGE DAVILA: PAGE 20, 1176, THE FIRST LINE.
MS. VOLKAR: OH. OKAY. I THINK THE GOVERNMENT IS FINE WITH THAT CHANGE, YOUR HONOR.
JUDGE DAVILA: MAYBE YOU CAN LOOK AT THAT AND WORK ON THAT. EXCUSE ME. THAT WAS JUST A SUGGESTION I HAD.
MS. SAHARIA: UNDERSTOOD. I THINK THAT IS A GOOD SUGGESTION.
JUDGE DAVILA: THAT MIGHT RESOLVE THAT.
MS. SAHARIA: WELL, I DON'T THINK THAT RESOLVES OUR CONCERNS, BUT I AGREE THAT MAKES SENSE, YOUR HONOR.
JUDGE DAVILA: IT'S A STEP FORWARD.
MS. SAHARIA: YES. SO LET ME TURN TO PUFFERY AND ASPIRATIONAL STATEMENTS. THIS IS THE LANGUAGE THAT WE HAVE PROPOSED TO ADD TO THE WIRE FRAUD DEFINITION AT INSTRUCTIONS 46 AND 53 OF OUR INSTRUCTIONS, TO INFORM THE JURY THAT EXPRESSIONS OF OPINION, ASPIRATIONS OR GOALS OR GENERAL SUBJECTIVE CLAIMS ARE NOT ACTIONABLE.
JUDGE DAVILA: THIS IS PARAGRAPH C, I BELIEVE.
MS. SAHARIA: CORRECT. AND THE JURY HAS HEARD MANY EXAMPLES OF THESE KINDS OF STATEMENTS IN THIS CASE. MS. HOLMES OFTENTIMES SPOKE ABOUT HER ASPIRATIONS AND ASPIRATIONS FOR THE FUTURE. THE SLIDE PRESENTATIONS THAT WE HAVE SEEN IN THIS CASE CONTAIN MANY HIGH LEVEL SUBJECTIVE STATEMENTS THAT ARE NOT THEMSELVES KIND OF STATEMENTS OF FACTS AND THAT WOULD QUALIFY AS PUFFERY, AND I WOULD POINT THE COURT TO TRIAL EXHIBIT 3696 FOR SOME EXAMPLES OF THAT. NOW, I WILL READILY CONCEDE THAT THERE IS SUBSTANTIAL NINTH CIRCUIT CASE LAW THAT SAYS A DISTRICT COURT IS NOT REQUIRED TO GIVE A PUFFERY INSTRUCTION IN SOME CIRCUMSTANCES. AND I WOULD POINT THE COURT TO U.S. V. GAY, 967 F.2D 322, U.S. VERSUS AMLANI., 111 F.3D 705, AND UNITED STATES VERSUS TARALLO, 380 F.3D 1174. TARALLO WAS THE MOST RECENT OF THESE CASES, BUT ALL THREE OF THEM STAND FOR THE PROPOSITION THAT A DISTRICT COURT NEED NOT GIVE A PUFFERY INSTRUCTION IF IT GIVES A GOOD FAITH INSTRUCTION. AND THIS IS WHAT THE TARALLO CASE SAID.
IT SAID, "NO PUFFERY INSTRUCTION IS REQUIRED IF THE DISTRICT COURT GIVES AN INSTRUCTION THAT GOOD FAITH CONSTITUTES A COMPLETE DEFENSE. THE ONE WHO ACTS WITH HONEST INTENTION DOES NOT POSSESS FRAUDULENT INTENT. THE ONE WHO EXPRESSES AN OPINION HONESTLY HELD BY HIM IS NOT CHARGED WITH FRAUDULENT INTENT, EVEN THOUGH SUCH OPINION IS ERRONEOUS AND SUCH BELIEF IS A MISTAKEN BELIEF AND THAT EVIDENCE ESTABLISHING ONLY THAT A PERSON MADE A MISTAKE OF JUDGMENT OR IN ERROR IN MANAGEMENT OR WAS CARELESS DOES NOT ESTABLISH FRAUDULENT INTENT." SO WHAT THE TARALLO CASE STANDS FOR IS THIS IF THE COURT DOES GIVE THAT GOOD FAITH INSTRUCTION, OR SOME VERSION OF A GOOD FAITH INSTRUCTION, IT DOESN'T NEED TO GIVE THE PUFFERY INSTRUCTION. SO OUR FUNDAMENTAL SUBMISSION ON THIS POINT IS THAT THE COURT SHOULD GIVE THE GOOD FAITH INSTRUCTION, WHICH WE MAY HAVE TO TABLE UNTIL OUR NEXT MEETING. IN TARALLO THE DISTRICT COURT APPEARS TO HAVE GIVEN A VERSION OF THE STANDARD GOOD FAITH INSTRUCTION THAT IS OFTEN GIVEN BY COURTS FROM THE O'MALLEY MODEL INSTRUCTIONS, AND WE HAVE ALSO BASED OUR PROPOSED GOOD FAITH INSTRUCTION ON THAT O'MALLEY INSTRUCTION WHICH APPEARS TO BE WHAT THE NINTH CIRCUIT ENDORSED IN TARALLO.
JUDGE DAVILA: AND THIS IS YOUR 46, IS IT? IS THAT RIGHT?
MS. SAHARIA: HOLD ON, YOUR HONOR.
MS. VOLKAR: IT'S INSTRUCTION NUMBER 57, YOUR HONOR.
MS. SAHARIA: IT'S AT PAGE 38, ECF 809 AT 78.
JUDGE DAVILA: YES. THANK YOU.
MS. SAHARIA: SO IF THE COURT IS NOT GOING TO GIVE THE GOOD FAITH INSTRUCTION, WE WOULD ASK FOR A PUFFERY INSTRUCTION, BUT MORE FUNDAMENTALLY, GIVEN THE CASE LAW AND GIVEN THAT GOOD FAITH IS A BROADER CONCEPT THAT WE THINK PERMEATES THIS CASE, WE STRONGLY ASK THE COURT TO GIVE A GOOD FAITH INSTRUCTION.
JUDGE DAVILA: OKAY. THANK YOU.
MS. VOLKAR: YOUR HONOR, I AM GLAD WE GOT TO THIS TODAY BECAUSE I THINK THIS IS GOING TO BE ANOTHER MAJOR AREA OF DISPUTE BETWEEN THE PARTIES. FIRST OF ALL, STARTING WITH THE MODEL INSTRUCTIONS, WHICH I THINK THE COURT SHOULD, OR I THINK THE PARTIES SHOULD OR SHOULD HAVE, MODEL INSTRUCTION 5.12 CLEARLY STATES NINTH CIRCUIT LAW, WHICH IS THAT "A GOOD FAITH INSTRUCTION IS NOT NECESSARY IF THE COURT PROPERLY INSTRUCTS ON THE INTENT TO DEFRAUD OR DECEIVE." NOW, MS. SAHARIA IS TALKING ABOUT A DIFFERENT DISTINCTION, WHICH IS GOOD FAITH VERSUS PUFFERY. THAT IS A SIDE ISSUE. THAT'S A RED HERRING. THE ISSUE BEFORE THE COURT IS, IS A GOOD FAITH INSTRUCTION NECESSARY AT ALL? AND IF THE COURT PROPERLY INSTRUCTS ON THE INTENT TO DEFRAUD, WHICH THERE IS PLENTY OF PRECEDENT TO, AND THERE'S THE MILLER CASE MOST RECENTLY THAT THE COURT IS FAMILIAR WITH, TO GIVE THE COURT A GUIDANCE ON HOW TO PROPERLY INSTRUCT THE JURY ON THE INTENT TO DEFRAUD AND THE KNOWINGLY STANDARD.
AND YOUR HONOR ACTUALLY RECENTLY DISCUSSED THIS IN THE KRAMER CASE. AND IN THE KRAMER CASE YOUR HONOR LOOKED AT ALMOST AN EXACT SAME ARGUMENT THAT THE DEFENDANTS RAISED HERE WHICH WAS I HAD ASPIRATIONS FOR THE ENTERPRISE, I THOUGHT THE ENTERPRISE WAS GOING TO BE MORE SUCCESSFUL, I BELIEVED IT WAS A LEGITIMATE BUSINESS, I BELIEVED THAT I WAS SAYING THE RIGHT THINGS. AND YOUR HONOR SAID BECAUSE I PROPERLY INSTRUCTED ON INTENT TO DEFRAUD, I DO NOT HAVE TO GIVE A GOOD FAITH INSTRUCTION. THAT IS WHAT THE NINTH CIRCUIT TELLS US. SO, FIRST OF ALL, TO START WITH THE INITIAL POINT IS A GOOD FAITH INSTRUCTION REQUIRED OR EVEN WARRANTED BASED ON THE FACTS HERE AT ALL? THE ANSWER IS NO. UNDER THE NINTH CIRCUIT LAW, IF YOU PROPERLY INSTRUCT ON THE INTENT TO DEFRAUD, YOU DO NOT NEED TO GIVE A GOOD FAITH INSTRUCTION. NOW, MOVING TO MS. SAHARIA'S POINT. IF THE COURT IS GOING TO GIVE THE GOOD FAITH INSTRUCTION, THEN THE GOVERNMENT TAKES SERIOUS ISSUE WITH THE ONE THAT THEY HAVE PROPOSED.
IN PARTICULAR, MS. SAHARIA POINTS TO THE TARALLO CASE -- I HOPE I PRONOUNCED THAT CORRECTLY -- 380 F.3D 1174 AT 1191. AND I HOPE THE COURT TAKES A GOOD LOOK AT THIS CASE IF THE COURT IS GOING TO GIVE THE GOOD FAITH INSTRUCTION, BECAUSE WHAT THE DEFENSE HAS DONE IS GONE THROUGH AND CHERRY PICKED THE PARAGRAPHS THAT THEY LIKE AND OMITTED THE PARAGRAPHS THAT THEY DIDN'T LIKE, AND THAT CANNOT BE THE INSTRUCTION THAT IS GIVEN TO THE JURY. THAT DOES NOT ACCURATELY STATE THE LAW, AND THAT IN AND OF ITSELF IS MISLEADING IN TERMS OF WHAT THE LAW REQUIRES. I'LL READ A PARAGRAPH TO COUNTER WHAT MS. SAHARIA READ INTO THE RECORD WHICH IS IN THE TARALLO CASE, "A DEFENDANT DOES NOT ACT IN GOOD FAITH IF EVEN THOUGH HE OR SHE HONESTLY HOLDS A CERTAIN OPINION OR BELIEF, THAT DEFENDANT ALSO KNOWINGLY MAKES MATERIAL FALSE OR FRAUDULENT PRETENSES, REPRESENTATIONS, OR PROMISES TO OTHERS." THAT IS WHAT THE INTENT REQUIREMENT FOR WIRE FRAUD IS. THIS IS VERY WELL ESTABLISHED.
AND AGAIN, THAT IS PART OF WHY THE NINTH CIRCUIT HOLDS IF THE JURY IS PROPERLY INSTRUCTED ON WHAT THE INTENT ELEMENT REQUIRES, A GOOD FAITH INSTRUCTION IS NOT REQUIRED. NOW, AGAIN, TO TALK SPECIFICALLY ABOUT PUFFERY OR GOOD FAITH IF WE'RE IN THAT LAND. PUFFERY IS A SECURITIES FRAUD CONCEPT. I THINK YOUR HONOR IS WELL AWARE OF THAT. ALL OF THE CASES THEY CITE ARE ABOUT SECURITY FRAUD, WHICH HAS HEIGHTENED INTENT REQUIREMENTS, AND THAT'S NOT THE LAND THAT WE'RE IN. WE'RE IN WIRE FRAUD. THIS IS A WIRE FRAUD CASE. I KNOW THE GOVERNMENT KEEPS POUNDING THE TABLE ON THIS, BUT THIS IS A CASE THAT YOUR HONOR HAS SEEN DOZENS, IF NOT MORE THAN THAT, TIMES. THIS IS NOT A CASE THAT IS SOME SPECIAL CASE THAT REQUIRES 100 PAGES OF INSTRUCTIONS. THIS IS A WIRE FRAUD CASE LIKE ANY OTHER WIRE FRAUD CASE. AND THE FACTS, EVEN IF THEY DO SUPPORT A GOOD FAITH ARGUMENT HERE, WHICH I DON'T THINK THEY DO, BECAUSE AGAIN, THE INTENT TO DEFRAUD IS VERY WELL DEFINED MOST RECENTLY IN MILLER, IT SHOULD AT LEAST BE A WELL BALANCED STATEMENT OF THE ENTIRETY OF THE LAW SUCH AS GIVEN IN TARALLO THAT SHOWS THAT IF CONDUCT FROM THE GOVERNMENT'S PERSPECTIVE WHAT THE DEFENDANT DID HERE WOULD STILL CONSTITUTE WIRE FRAUD.
JUDGE DAVILA: ALL RIGHT. THANK YOU. I NOTICE YOUR SUBMISSION 5.12 IN DOCUMENT 1176 IS DIFFERENT THAN YOUR ORIGINAL. I THINK IT'S PARED DOWN. IT MAY BE RECOGNIZING MILLER OR OTHERS, BUT I BELIEVE -- IT LOOKS DIFFERENT THAN THE ORIGINAL.
MS. SAHARIA: WE DID PARE IT DOWN, YOUR HONOR.
JUDGE DAVILA: YES, RIGHT.
MS. SAHARIA: I HAVE NO OBJECTION TO GIVING THE GOOD FAITH INSTRUCTION THAT WAS GIVEN IN TARALLO. IF THE GOVERNMENT WANTS TO ADD IN THE PARAGRAPH THAT MS. VOLKAR READ, I THINK WE HAVE ABSOLUTELY NO OBJECTION TO THAT. I'M HAPPY TO CONSIDER ANY PROPOSAL FOR ADDITIONAL LANGUAGE, WHETHER FROM TARALLO OR WHETHER FROM O'MALLEY. BUT, FIRST OF ALL, IT'S INCORRECT THAT PUFFERY IS SOLELY A CONCEPT IN THE SECURITIES CASES. IT'S A CONCEPT THAT DRIVES FROM THE COMMON LAW OF FRAUD WHICH INFORMS BOTH WIRE FRAUD AND SECURITIES FRAUD.
JUDGE DAVILA: THAT'S WHERE YOU SEE IT THOUGH. THAT'S REALLY WHERE IT THRIVES, DOESN'T IT, IN SECURITIES?
MS. SAHARIA: I DON'T THINK SO, YOUR HONOR. I THINK IT PERMEATES ALL KINDS OF FRAUD, AND, IN FACT, ONE OF THE CASES WE CITED WAS A LANHAM ACT CASE, NOT A SECURITIES CASE. SO PUFFERY IS A CONCEPT -- IT'S ABOUT WHETHER A STATEMENT IS FRAUDULENT, AND STATEMENTS OF OPINIONS, STATEMENTS THAT ARE NOT VERIFIABLE CANNOT BE MATERIALLY FALSE. THAT IS JUST A COMMON LAW CONCEPT OF FRAUD.
JUDGE DAVILA: SURE.
MS. SAHARIA: SO, AGAIN, OUR FUNDAMENTAL POINT, AND I DIDN'T HEAR A RESPONSE TO THE LANGUAGE I READ FROM TARALLO, WHICH IS IN CASES WHEN THERE IS AT LEAST A BASIS FOR THINKING THAT SOME OF THE STATEMENTS COULD BE PUFFERY, WHICH IN THIS CASE WE CLEARLY HAVE, NO PUFFERY INSTRUCTION IS REQUIRED IF THE DISTRICT COURT GIVES A GOOD FAITH INSTRUCTION. THAT IS THE NINTH CIRCUIT HOLDING FROM THE TARALLO CASE AND FROM THE OTHER CASES THAT I HAVE CITED ALL SAID THE SAME THING. SO WE DO THINK -- LOOK, THE GOVERNMENT, OF COURSE, IS ENTITLED TO ARGUE TO THE JURY THAT THEY DON'T THINK THE FACTS IN THIS CASE RISE TO THE LEVEL OF GOOD FAITH. THAT'S A JURY ARGUMENT. WE, OF COURSE, HAVE THE OPPOSITE ARGUMENT. AND GIVEN THE FACTS OF THIS CASE, GIVEN THE TARALLO CASE, GIVEN THE MANY CASES THAT DO GIVE GOOD FAITH INSTRUCTIONS, WE THINK THIS IS A QUINTESSENTIAL CASE WHERE THAT INSTRUCTION SHOULD BE GIVEN, AND I HAVE NO OBJECTION TO ADDING THE LANGUAGE THAT MS. VOLKAR JUST READ.
JUDGE DAVILA: WELL, LET ME LET YOU DISCUSS THAT THEN. CAN I TASK YOU WITH THAT?
MS. VOLKAR: WELL, YOUR HONOR, AGAIN, I GO BACK TO THE GOVERNMENT'S STARTING POSITION, AND ALTHOUGH WE'RE HAPPY TO DISCUSS IT, I WOULD RATHER HAVE OUR PRIMARY POSITION CONSIDERED BY THE COURT, WHICH IS THAT NO GOOD FAITH INSTRUCTION IS REQUIRED. MS. SAHARIA KEEPS GOING TO THE SECOND STEP. THE FIRST STEP IS WHAT THE NINTH CIRCUIT CLEARLY SAYS IN WIRE FRAUD CASES, IS THAT IF THE INTENT TO DEFRAUD IS PROPERLY DEFINED BY THE COURT, AND, AGAIN, YOUR HONOR, I'M SPEAKING TO THE CHOIR HERE BECAUSE YOUR HONOR JUST HELD THIS IN KRAMER LESS THAN A YEAR AGO, IF THE COURT PROPERLY DEFINES INTENT TO DEFRAUD, NO GOOD FAITH INSTRUCTION IS REQUIRED. NOW, MS. SAHARIA IS POINTING TO SECURITIES CASES OR LANHAM ACT CASES, CASES WITH A HIGHER SCIENTER REQUIREMENT AND SAYING THAT IF A GOOD FAITH INSTRUCTION IS GIVEN, THEN NO PUFFERY INSTRUCTION IS REQUIRED. THAT'S THE SECOND STEP IN THE ANALYSIS. WE'RE AT THE FIRST STEP. AND THE FIRST STEP IS IF INTENT TO DEFRAUD IS PROPERLY DEFINED, NO GOOD FAITH INSTRUCTION IS REQUIRED AND INTENT TO DEFRAUD IS VERY WELL ESTABLISHED BY PRECEDENT IN THE NINTH CIRCUIT, MOST RECENTLY THE MILLER CASE. THERE IS NO AMBIGUITY ABOUT WHAT IS REQUIRED TO FULLY DESCRIBE THE INTENT TO DEFRAUD, AND THEREFORE, THERE'S NO NEED FOR A GOOD FAITH INSTRUCTION IN THIS CASE OR REALLY ANY WIRE FRAUD CASE, AGAIN, SO LONG AS THE COURT PROPERLY INSTRUCTS ON THE INTENT TO DEFRAUD.
JUDGE DAVILA: OKAY.
MS. SAHARIA: I THINK WE'RE OUT OF TIME, BUT I WILL JUST NOTE THAT TARALLO WAS NOT SOLELY A SECURITIES FRAUD CASE. IT ALSO INCLUDED CLAIMS FOR WIRE FRAUD.
JUDGE DAVILA: THANK YOU, MS. SAHARIA. DID I HEAR YOU SAY THAT PUFFERY EXISTS IN THIS CASE?
MS. SAHARIA: ABSOLUTELY, YOUR HONOR. WE THINK THERE ARE STATEMENTS IN THIS CASE THAT MEET THE STANDARD FOR PUFFERY. THE COURT CAN RECALL THE SLIDE DECK. I CAN JUST READ A FEW EXAMPLES THAT ARE EITHER PUFFERY OR ASPIRATIONAL STATEMENTS SUCH AS "THERANOS IS A NEW STANDARD IN LAB TESTING THAT CAN HELP EVERY PRACTICE." THAT'S AT EXHIBIT 3696, PAGE 21. "AMAZING SPEED." I MEAN, THAT'S CLASSIC PUFFERY. THAT'S AT PAGE 27. "AN ENTIRELY NEW LAB EXPERIENCE," PAGE 31. "THERANOS'S FOOTPRINT UPON NATIONAL DEPLOYMENT," PAGE 34 WITH A MAP SHOWING WHERE THERANOS HOPED TO HAVE STORES IN THE FUTURE. CLEARLY AN ASPIRATIONAL STATEMENT. "OUR MISSION IS TO MAKE ACTIONABLE HEALTH INFORMATION ACCESSIBLE TO EVERYONE AT THE TIME IT MATTERS." ANOTHER ASPIRATIONAL STATEMENT AT PAGE 3. THESE KIND OF STATEMENTS PERMEATE THIS CASE. THEY'RE PUFFERY, THEY'RE ASPIRATIONAL STATEMENTS, AND FOR THAT REASON WE REQUEST THE GOOD FAITH INSTRUCTION.
JUDGE DAVILA: MS. VOLKAR?
MS. VOLKAR: YOUR HONOR, I WOULD SAY THAT WHAT I DIDN'T HEAR IN THERE IS THAT THERANOS RUNS ALL LAB TESTS OR SOME OF THE OTHER KEY STATEMENTS THAT INVESTORS HAVE SAID OVER AND OVER AGAIN, BUT I DON'T WANT TO TAKE UP THE COURT'S TIME BY ARGUING THE FACTS RIGHT NOW. THAT'S BEST LEFT FOR CLOSING ARGUMENT. THE LAST POINT I DO WANT TO MAKE, BECAUSE I NEGLECTED TO A MOMENT AGO, I READ THE PARAGRAPH TARALLO THAT IS ABSENT FROM THE DEFENSE'S INSTRUCTION THAT I THOUGHT WAS THE MOST GLARING, BUT THERE ARE MULTIPLE PARAGRAPHS THAT WERE DROPPED, ALL OF WHICH, OF COURSE, BALANCE OUT THE STATEMENT THAT THE DEFENSE SUGGESTED. SO, AGAIN, IF WE GET TO THE LAND WHERE THE COURT IS CONSIDERING A GOOD FAITH INSTRUCTION, I WOULD JUST ASK THAT IT ACTUALLY REPRESENT THE WELL BALANCED VIEW OF THE LAW AND NOT JUST THE DEFENSE'S VIEW.
MS. SAHARIA: I THINK I ALREADY SAID WE DON'T OBJECT TO THE TARALLO INSTRUCTION.
JUDGE DAVILA: OKAY. THANK YOU.
MS. SAHARIA: THANK YOU.
JUDGE DAVILA: THANK YOU VERY MUCH. THIS IS HELPFUL. WE ARE NEXT TOGETHER, I THINK, TUESDAY FOR CONTINUED EVIDENCE, I BELIEVE. SHOULD I ASK THE PARTIES ABOUT SCHEDULING, WHERE WE THINK WE ARE? I THINK, MR. DOWNEY -- I'M SORRY, I DON'T MEAN TO TALK OVER YOU, MS. SAHARIA.
MS. SAHARIA: I'LL TURN IT OVER TO MR. DOWNEY.
MS. VOLKAR: I'LL DO THE SAME, OR MY TEAM.
JUDGE DAVILA: I KNOW MR. DOWNEY LAST WEEK, OR EXCUSE ME, EARLIER THIS WEEK I THINK YOU SUGGESTED THAT THE JURY MIGHT GET THIS CASE NEXT WEEK OR MAYBE YOU SAID EVIDENCE MIGHT BE FINISHED NEXT WEEK?
MR. DOWNEY: WELL, YOUR HONOR, I CERTAINLY SAID AS TO THE DEFENSE CASE, I DID NOT THINK IT WOULD TAKE THE BALANCE OF NEXT WEEK. WE ASKED MR. LEACH WHERE HE WAS IN TERMS OF A REBUTTAL CASE BASED ON WHAT HAS OCCURRED SO FAR, AND HE SAYS RIGHT NOW HE HAS NO REBUTTAL WITNESSES, BUT THE COURT AWAITS THE CLOSURE OF THE DEFENSE CASE AND CERTAIN EXPERTS WOULD TRIGGER A REBUTTAL CASE, THE GOVERNMENT TO CALL EXPERTS. AND THE COURT, OF COURSE, IS FAMILIAR WITH THOSE ISSUES. IT FEELS TO ME, BASED ON THAT, LIKE EVIDENCE WILL LIKELY CONCLUDE DURING NEXT WEEK.
JUDGE DAVILA: I'M SORRY, YOUR EVIDENCE AND THE GOVERNMENT'S?
MR. DOWNEY: WELL, ASSUMING THE GOVERNMENT'S CASE IS EITHER THERE IS NO REBUTTAL CASE OR IT'S LIMITED TO ONE WITNESS, I WOULD THINK IT WOULD PROBABLY CONCLUDE AT SOME POINT NEXT WEEK, WHICH I THINK WILL RAISE THE QUESTION, ALTHOUGH I DON'T KNOW REALLY WHAT DAY THAT WOULD BE, YOUR HONOR.
JUDGE DAVILA: SURE.
MR. DOWNEY: BUT I DO THINK IT RAISES THE QUESTION OF HOW WOULD YOUR HONOR WANT TO THEN PROCEED WITH REGARD TO A CHARGING -- A FURTHER CHARGING CONFERENCE, WHICH, YOU KNOW, IS, UNDERSTANDABLY I THINK GIVEN THE CASE, COMPLICATED AND PROBABLY A LENGTHY EVENT.
JUDGE DAVILA: RIGHT.
MR. DOWNEY: I DON'T KNOW IF WE COULD GET GUIDANCE FROM THE COURT ON THAT, WHETHER THE COURT WOULD TAKE ONE OF THE DAYS NEXT WEEK TO DO THAT, EVEN THOUGH WE'VE OBVIOUSLY ASKED THE JURY TO BE AVAILABLE THOSE DAYS.
JUDGE DAVILA: WELL, THANK YOU. THAT'S WHY I'M ASKING IS TO LOOK AT OUR SCHEDULE AND SEE HOW THIS MIGHT FIT. REGRETTABLY THE COURT IS NOT AVAILABLE, AS I TOLD YOU, ON THE 14TH AND 15TH.
MR. DOWNEY: RIGHT.
JUDGE DAVILA: THAT'S NOT GOING TO CHANGE. I CAN'T CHANGE THAT. ASSUMING THE TIME ESTIMATES ARE AS YOU INDICATE, AND I HAVE NO REASON TO DOUBT IT, THE JURY MIGHT GET THIS CASE AS EARLY AS FRIDAY THE 17TH, POSSIBLY THE 16TH, BUT CERTAINLY THE 20TH IT SOUNDS LIKE.
MR. DOWNEY: OH, I THINK SO, YOUR HONOR. YEAH. THAT SOUNDS RIGHT TO ME.
MR. LEACH: THAT SOUNDS RIGHT TO ME, YOUR HONOR. AND JUST TO -- I CAN CONFIRM WHAT MR. DOWNEY IS SAYING. WE'RE WAITING AND SEE WHAT THEY DO IN TERMS OF EXPERTS, BUT I --
JUDGE DAVILA: RIGHT.
MR. LEACH: -- BUT BASED ON WHAT WE HAVE SEEN SO FAR, I DON'T ANTICIPATE A LENGTHY REBUTTAL CASE. MY POSITION IS THAT WE MAY BE COMPLETING EVIDENCE THURSDAY, WHICH RAISES THE QUESTION OF HOW WE USE FRIDAY. BUT I THINK CERTAINLY BY THE 17TH THE JURY WILL BE GETTING THE CASE.
JUDGE DAVILA: YOU KNOW, JUST TO -- THIS REALLY BOILS DOWN TO IF THERE'S GOING TO BE EXPERT TESTIMONY FROM THE DEFENSE REALLY, AND THEN THAT WOULD MEAN AN EXPERT REBUTTAL I PRESUME AND WHERE THAT IS. IF THERE ISN'T ANY EXPERT TESTIMONY, WE'LL HAVE TO HAVE A DISCUSSION ON THE STATE OF THE EVIDENCE THEN AS TO WHERE THAT IS AND WHAT IT IS. OKAY. WELL --
MR. DOWNEY: AND I ASSUME AT THAT POINT, YOU KNOW, YOUR HONOR, IT MIGHT ALSO MEAN THAT ONE OF THE DAYS WE'VE RESERVED FOR THE JURY TOWARDS THE BACK END OF NEXT WEEK MIGHT BE A DAY THAT YOUR HONOR WANTED TO SPEND WITH THE LAWYERS INSTEAD. BUT I WANTED TO PUT THAT ON THE COURT'S RADAR BECAUSE UNDER CERTAIN SCENARIOS I THINK THAT COULD HAPPEN.
JUDGE DAVILA: RIGHT. ALL RIGHT. WELL, LET ME ASK HOW DO YOU SPEND YOUR EVENINGS AFTER HOURS? I GUESS I'LL ASK YOU TO THINK ABOUT THAT OVER THE WEEKEND.
MR. DOWNEY: WELL, WE CAN DO IT THAT WAY AS WELL, YOUR HONOR.
JUDGE DAVILA: OKAY.
MR. DOWNEY: IT SEEMS LIKE FROM TODAY'S CONVERSATION IT'S A CUMBERSOME PROCESS.
JUDGE DAVILA: OKAY. THANK YOU VERY MUCH.
MR. DOWNEY: THANK YOU, YOUR HONOR.
JUDGE DAVILA: MR. SCHENK?
MR. SCHENK: YES, YOUR HONOR. JUST ONE VERY BRIEF QUESTION. I WANT TO CONFIRM THAT IT'S OKAY WITH THE COURT TO USE A LAPEL MICROPHONE FOR CLOSING, AND IF IT WOULD BE OKAY TO SCHEDULE SOME TIME WITH COURT STAFF TO TEST IT AND MAKE SURE? I KNOW THAT THE GOVERNMENT HAS ONE THAT WORKS WITH THE COURT SYSTEM THAT HAS SECURITY FEATURES, SO WE'VE USED IT IN OTHER INSTANCES, BUT I WANT TO MAKE SURE THAT'S OKAY WITH THE COURT, AND WE WOULD MAKE IT AVAILABLE FOR THE DEFENSE IF THEY WOULD ALSO BE INTERESTED IN USING IT.
JUDGE DAVILA: THANK YOU. I'M HAPPY TO CAPTURE ANY EFFICIENCIES, AND WITH THE GREAT TECHNOLOGY WE HAVE, I'M SURE THERE WILL BE NO PROBLEM INTERFACING THAT. SO YES. I THINK IT MAKES SENSE TO TEST IT OUT AGAIN. I APPRECIATE THAT. AND IF THE DEFENSE WANTS TO LOOK AT THAT, IT SOUNDS LIKE YOU'RE HAPPY TO SHARE.
MR. SCHENK: THANK YOU.
JUDGE DAVILA: OKAY. GREAT. THANK YOU. HAVE A GREAT WEEKEND EVERYONE.
MR. DOWNEY: THANK YOU.
(COURT ADJOURNED AT 11:09 A.M.)