Final Jury Instructions Charge Conference
673 linesSAN JOSE, CALIFORNIA DECEMBER 10, 2021 P R O C E E D I N G S
(COURT CONVENED AT 9:09 A.M.)
(JURY OUT AT 9:10 A.M.)
JUDGE DAVILA: WE ARE ON THE RECORD. ALL COUNSEL ARE PRESENT. MS. HOLMES IS PRESENT. WE'RE OUTSIDE OF THE PRESENCE OF THE JURY. WE'RE HERE TO JUST REVIEW, IF WE CAN, INSTRUCTIONS. WE DID RECEIVE 1188, WHICH WAS THE JOINT PROPOSED INSTRUCTIONS. THANK YOU FOR THAT. THAT WAS HELPFUL. I'VE LOOKED OVER THAT, AND I'M HAPPY TO DISCUSS SOME OF THESE WITH YOU. WE'LL SEE HOW FAR WE GET THIS MORNING. IT MAY BE THAT WE CAN -- I HOPE WE CAN ACCOMPLISH GETTING THROUGH THE MAJORITY OF THESE TODAY SUCH THAT, AS OUR PLAN WAS, AS YOU RECALL, WE HAVE MONDAY TO FINISH UP, AND THEN WE'RE DARK TWO DAYS, AND THEN THURSDAY NEXT, AND FRIDAY, WE'VE ALLOCATED FOR CLOSING. MY HOPE IS THAT WE CAN GET -- IT WOULD BE GREAT IF WE CAN GET RESOLUTION OF THE INSTRUCTIONS TODAY SUCH THAT YOU CAN HAVE THEM FOR YOUR PLANNING PURPOSES, AND WE CAN WORK ON THEM AND MAYBE GET A FINALIZED COPY, AN AGREED COPY FOR MONDAY, BY MONDAY, SO THE PARTIES CAN USE THIS. THAT'S WHAT I HOPE TO ACCOMPLISH. I HOPE WE CAN GET THAT DONE TODAY. WE'LL PROBABLY TAKE A BREAK. ASSUMING WE CAN'T GET THIS DONE IN 40 MINUTES, WHAT TIME SHOULD WE BREAK TODAY?
MR. DOWNEY: I THINK, YOUR HONOR, SOMETIME IN THAT 11:00 TO 11:30 TIME WOULD BE GOOD.
JUDGE DAVILA: ALL RIGHT. THANK YOU. ANYTHING BEFORE WE START? I JUST INTEND TO GO THROUGH THESE FROM THE BEGINNING. BUT ANYTHING FROM EITHER SIDE BEFORE WE START? MS. SAHARIA?
MS. SAHARIA: YES, YOUR HONOR. GOOD MORNING, YOUR HONOR.
JUDGE DAVILA: GOOD MORNING.
MS. SAHARIA: I JUST NOTED -- I JUST WANTED TO NOTE THAT THE PARTIES NEGLECTED TO MEET AND CONFER ABOUT THE VERDICT FORM. I REALIZED LAST NIGHT THAT WE HAD FAILED TO PROPOSE TO THE COURT A VERDICT FORM. WE HAVE, OF COURSE, BOTH PROPOSED OUR OWN VERSIONS OF VERDICT FORMS. SO TIME PERMITTING, PERHAPS WE CAN TAKE THOSE UP AT THE END OF THE INSTRUCTIONS.
JUDGE DAVILA: SURE. OKAY.
MS. SAHARIA: I APOLOGIZE FOR THAT.
JUDGE DAVILA: NO, NO, NO. THAT'S QUITE ALL RIGHT.
MS. SAHARIA: AND IS IT THE COURT'S INTENTION THAT WE JUST PROCEED THROUGH 1188 AND TAKE UP THE INSTRUCTIONS IN ORDER?
JUDGE DAVILA: I THINK SO.
MS. SAHARIA: I THINK THAT MAKES SENSE TO ME AS WELL.
JUDGE DAVILA: IT DOES TO ME. MS. VOLKAR, ARE YOU SPEAKING?
MS. SAHARIA: I'M GOING TO DEFER TO MR. CLEARY, WHO IS GOING TO ADDRESS THE FIRST SEVERAL INSTRUCTIONS.
JUDGE DAVILA: OKAY. THANK YOU.
MS. VOLKAR: YES, YOUR HONOR. KELLY VOLKAR ON BEHALF OF THE UNITED STATES. AND I'LL BE SHARING THE PODIUM TODAY WITH MR. LEACH.
JUDGE DAVILA: GREAT. THANK YOU.
MR. CLEARY: YOUR HONOR, RICHARD CLEARY ON BEHALF OF MS. HOLMES.
JUDGE DAVILA: THANK YOU. GOOD MORNING.
MR. CLEARY: GOOD MORNING, YOUR HONOR.
JUDGE DAVILA: SO LET'S JUST MARSHAL THROUGH. WE'LL START WITH 1 -- JURY INSTRUCTION 1. WHAT I INTEND TO DO IS GIVE WHAT I GAVE IN THE PRELIMINARIES FOR THIS, WHICH I THINK YOU DO KNOW DOES INCLUDE THE LANGUAGE THAT IS HIGHLIGHTED. SO I INTEND TO STICK WITH THAT.
MR. CLEARY: THANK YOU, YOUR HONOR.
JUDGE DAVILA: AND LET'S MOVE TO NUMBER 2. THE -- WHAT I -- AT THE START OF LINE 4 -- AND THIS IS ALL REFERENCING DOCKET 1188 -- WHAT I INTEND TO DO HERE IS THE FIRST LINE, EXCUSE ME, LINE 4, THE INDICTMENT IS NOT EVIDENCE, AND THEN I'LL READ, "MS. HOLMES, THE DEFENDANT, HAS PLEADED NOT GUILTY TO THE CHARGES," AND THEN I'LL READ "MS. HOLMES" THROUGHOUT THE BALANCE OF THE INSTRUCTION. AND THEN GOING DOWN TO LINE 8, I'M NOT GOING TO GIVE LINE 9 THROUGH 19, AND THAT'S THE DEFENSE ADDITIONS TO THE MODEL INSTRUCTION.
MR. CLEARY: YOUR HONOR, IF I MAY?
JUDGE DAVILA: YES.
MR. CLEARY: ONE POINT OF CLARIFICATION. I UNDERSTAND THE COURT'S INTENTION ON LINE 4 OF PAGE 3 OF ECF 1188 TO USE "MS. HOLMES, THE DEFENDANT," IN THE INITIAL REFERENCE AND THEN "MS. HOLMES" THEREAFTER. IS IT THE COURT'S INTENTION TO USE SIMPLY "MS. HOLMES" FOR THE DURATION OF THE INSTRUCTIONS?
JUDGE DAVILA: I THINK I WILL UNLESS THERE'S SOMETHING ELSE THAT -- I HAVEN'T SEEN IT -- UNLESS THERE'S SOMETHING ELSE THAT WOULD CALL OUT FOR IT. BUT THAT'S MY THOUGHT. AS WE GO THROUGH THEM, WE'LL LOOK AND SEE WHETHER OR NOT THAT SHOULD BE CHANGED.
MR. CLEARY: THANK YOU, YOUR HONOR.
JUDGE DAVILA: YOU'RE WELCOME.
MR. CLEARY: YOUR HONOR, IF I MAY, THE DEFENSE ACKNOWLEDGES THAT THE COURT PREVIOUSLY CONSIDERED AND DECLINED TO GIVE PARAGRAPHS 2 AND 3, LINES 19 THROUGH -- 9 THROUGH 19 OF JURY INSTRUCTION NUMBER 2 AT THE PRELIMINARY INSTRUCTIONS STAGE. SO WE UNDERSTAND THAT. AND WE JUST OBJECT TO THE ABSENCE OF THESE FOR -- I CAN WALK THE COURT BRIEFLY THROUGH THE REASONS JUST TO PRESERVE OUR RIGHTS.
JUDGE DAVILA: BUT DO YOU WANT TO INCORPORATE BY REFERENCE YOUR PREVIOUS OBJECTIONS?
MR. CLEARY: YES, YOUR HONOR. WE CAN INCORPORATE BY REFERENCE OUR PREVIOUS OBJECTIONS, AND THEN THE OBJECTIONS IDENTIFIED IN ECF 1174 JUST FOR EFFICIENCY THIS MORNING.
JUDGE DAVILA: SURE. THAT'S FINE. SO NOTED. THANK YOU. LET'S SEE, 3. THERE'S NO OBJECTION TO 3. THIS IS INSTRUCTION NUMBER 3. THIS IS MODEL INSTRUCTION 215. I'LL GIVE THAT. THERE'S NO OBJECTION TO 3.4, WHICH IS JURY INSTRUCTION 4. I'LL GIVE THAT. INSTRUCTION 5, WHICH IS THE REASONABLE DOUBT INSTRUCTION, I HAVE LOOKED AT THIS AND I INTEND TO GIVE THE MODEL INSTRUCTION, WHICH WOULD BE TO DELETE THE BLUE SECTION. AND FOR THE RECORD, THAT'S LINES 7 THROUGH 10 I THINK IS MS. HOLMES'S SUGGESTION, AND I WON'T GIVE THAT. I'LL INCORPORATE BY REFERENCE YOUR PREVIOUS OBJECTIONS IF YOU WOULD LIKE.
MR. CLEARY: YES, YOUR HONOR. AGAIN, THESE ARE IDENTIFIED AT ECF 1174 INCLUDING THE VELASQUEZ CASE AND THE GARCIA-FREGOSO CASE, BOTH OF WHICH ARE CITED IN THAT PLEADING.
JUDGE DAVILA: RIGHT, F-R-E-G-O-S-O. AND LOOKING AT THAT, GARCIA-FREGOSO, IT SEEMS TO HESITATE -- THE ADDITION OF "HESITATE TO ACT" IS UNNECESSARY. THAT'S PART OF THE EVALUATION THAT I MADE. SO I'LL GIVE THE MODEL. MS. VOLKAR, SING OUT ANYTHING IF YOU HAVE ANYTHING YOU WANT TO ADD FOR THE RECORD.
MS. VOLKAR: I WILL, YOUR HONOR. I THINK WE MIGHT HAVE DISCUSSED THIS LAST TIME, BUT IN CASE WE DIDN'T AND FOR PURPOSES OF THE RECORD, THE GOVERNMENT'S POSITION IS TO GIVE THE MODEL AS THE COURT INTENDS TO, AND THE GOVERNMENT JUST SPECIFICALLY CALLS THE COURT'S ATTENTION TO THIS MODEL INSTRUCTION ON REASONABLE DOUBT 3.5 WAS REVISED SEPTEMBER OF 2021, JUST A COUPLE MONTHS AGO. AND WHAT WAS AMENDED WAS THE COMMENTARY, NOT THE ACTUAL INSTRUCTION --
JUDGE DAVILA: RIGHT.
MS. VOLKAR: -- TO MOVE TO THE FIRST LINE OF THE COMMENTARY THAT THE NINTH CIRCUIT HAS REPEATEDLY UPHELD THIS INSTRUCTION. SO THAT'S THE GOVERNMENT'S POSITION.
JUDGE DAVILA: ALL RIGHT. THANK YOU. LET'S MOVE TO NUMBER 6, WHICH IS 3.6, THE COURT WILL GIVE. 3.7, WHAT IS NOT EVIDENCE, THE COURT WILL GIVE. JURY INSTRUCTION NUMBER 8, WHICH IS 3.8, I THINK MS. HOLMES WOULD LIKE TO HAVE THE EXAMPLE, THE GARDEN HOSE EXAMPLE.
MR. CLEARY: YES, YOUR HONOR, WE WOULD.
JUDGE DAVILA: RIGHT. ALL RIGHT. WE'LL TALK ABOUT GARDEN HOSES. I'LL GIVE THAT WITH THAT ADDITION.
MS. VOLKAR: YOUR HONOR, IF THE GOVERNMENT MAY BE HEARD ON THAT ONE?
JUDGE DAVILA: SURE, OF COURSE.
MS. VOLKAR: WE UNDERSTAND OF COURSE THIS IS IN THE COMMENTARY TO THE MODEL INSTRUCTIONS. THIS WOULD BE AN EXAMPLE OF THE COURT GAVE IT AT THE OUTSET, AND I THINK IT CAN BE HELPFUL TO THE JURY, ESPECIALLY FOR THOSE WHO HAVE NOT SERVED ON A JURY BEFORE, TO UNDERSTAND THE DIFFERENCE. NOW AT THE CLOSE OF EVIDENCE, WITH ALL OF THE EVIDENCE IN, THIS EXAMPLE, OF COURSE, HAS NOTHING TO DO WITH THIS CASE, AND THE JURY HAS BEEN LISTENING TO THE VARIOUS TYPES OF EVIDENCE THROUGHOUT THE CASE. AND OF COURSE I THINK WE SHOULD ALWAYS KEEP IN MIND THE LENGTH OVERALL OF THE INSTRUCTIONS, AND THIS DOES ADD ANOTHER PARAGRAPH TO LENGTHY INSTRUCTIONS. SO FOR THOSE REASONS, THE GOVERNMENT SUBMITS IT'S UNNECESSARY TO REPEAT THIS PORTION OF THE INSTRUCTION. BUT WE, OF COURSE, DEFER TO THE COURT.
JUDGE DAVILA: ALL RIGHT. THANK YOU. JUST FOR CONSISTENCY AS TO THIS CONCEPT, I THINK I'LL, I'LL GIVE IT. I THINK IT ASSISTS THE JURY, WILL ASSIST THE JURY. AND THIS IS JURY INSTRUCTION NUMBER 8. I APPRECIATE THE RECOGNITION OF THE NEED FOR BREVITY. I ASSURE YOU, THERE WILL BE SOME MORE BREVITY WE'LL CAPTURE AS WE GO FORWARD.
(LAUGHTER.)
JUDGE DAVILA: JURY INSTRUCTION NUMBER 9, CREDIBILITY OF WITNESSES, I'LL GIVE THAT. NUMBER 10 IS 3.10, AND I LOOKED AT THIS AND I THINK WHAT I WILL READ HERE IS THE FIRST LINE THAT BEGINS ON LINE 3 AND ENDS AT LINE 4 I'LL GIVE. "YOU ARE HERE ONLY TO DETERMINE WHETHER MS. HOLMES IS GUILTY OR NOT GUILTY OF THE CHARGES IN THE INDICTMENT." AND THEN I'LL READ AFTER THAT, "MS. HOLMES IS NOT ON TRIAL FOR ANY CONDUCT THAT TOOK PLACE BEFORE THE TIME PERIODS OF THE ALLEGED OFFENSES."
MR. CLEARY: YOUR HONOR, IS THE COURT'S INTENTION TO READ THE SECOND SENTENCE, "MS. HOLMES IS NOT ON TRIAL FOR ANY CONDUCT OR OFFENSE NOT CHARGED IN THE INDICTMENT"?
JUDGE DAVILA: NO. NO. I WOULD CUT THAT OUT.
MR. CLEARY: YOUR HONOR, IF I MAY, MS. HOLMES CERTAINLY APPRECIATES THE COURT'S INTENTION TO GIVE THAT FINAL -- WHAT WE UNDERSTAND IS THE LINE HIGHLIGHTED IN BLUE ON PAGE 12 IN CONNECTION WITH JURY INSTRUCTION NUMBER 10. WE WOULD ASK THAT THE COURT ALSO INCLUDE THAT SECOND LINE FOR THE FOLLOWING REASON: THE LINE CONCERNING MS. HOLMES NOT BEING ON TRIAL FOR CONDUCT THAT TOOK PLACE BEFORE THE TIME PERIODS OF THE ALLEGED OFFENSES IN THE INDICTMENT IS VERY HELPFUL IN GUARDING AGAINST IMPROPER CONVICTION BASED ON CONDUCT THAT PREDATES 2010 OR PREDATES 2013, DEPENDING ON THE PARTICULAR CONSPIRACY AT ISSUE. THE DEFENSE IS ALSO CONCERNED ABOUT EVIDENCE IN THE RECORD THAT GOES BEYOND THE FOUR CORNERS OF THE INDICTMENT, BUT FALLS WITHIN THE TIME PERIOD OF THE INDICTMENT. TO TAKE AN EXAMPLE, THE COURT WILL RECALL ITS EXCHANGE WITH MR. DOWNEY CONCERNING REPRESENTATIONS TO THE DEPARTMENT OF DEFENSE. THAT'S THE TYPE OF EVIDENCE THAT WOULD NOT FALL WITHIN THE FOUR CORNERS OF THE INDICTMENT AND WOULD NOT BE A FACTUAL ALLEGATION CONTAINED IN THE INDICTMENT, A THEORY OF LIABILITY, SPECIFICALLY ANY ALLEGED MISSTATEMENTS TO THE DEPARTMENT OF DEFENSE ON WHICH A CONVICTION COULD PROPERLY RELY. AND THIS SECOND SENTENCE, WE BELIEVE, GUARDS AGAINST THAT JUST BY EXPLAINING OVERALL THAT MS. HOLMES IS NOT ON TRIAL FOR ANY CONDUCT OR OFFENSE NOT CHARGED IN THE INDICTMENT.
JUDGE DAVILA: OKAY. MS. VOLKAR?
MS. VOLKAR: YOUR HONOR, THE PARTIES ARE NOT TOO FAR APART ON THIS INSTRUCTION, AND THAT'S BECAUSE THE FIRST TWO SENTENCES ARE BASED ON THE MODEL INSTRUCTION, AND THE GOVERNMENT HAS NO ISSUE WITH THAT. WE THINK THAT THAT IS AN ACCURATE STATEMENT THAT SHE'S NOT ON TRIAL FOR ANY CONDUCT OR OFFENSE NOT CHARGED IN THE INDICTMENT. WE FIND THAT THE FOLLOWING SENTENCE IS MERELY REDUNDANT, AND I THINK THAT'S PROBABLY WHAT YOUR HONOR WAS THINKING WHEN YOU COMBINED THE TWO SENTENCES TOGETHER. AND SO WE WOULD SAY THAT TO ADDRESS THE DEFENSE'S CONCERN THAT MR. CLEARY JUST RAISED, THE EASY ANSWER IS TO PROVIDE THE TWO SENTENCES FROM THE MODEL INSTRUCTION, AND THAT REALLY COVERS IT.
JUDGE DAVILA: I THINK IT'S -- I THINK THE POINT HERE IS THAT MS. HOLMES NOT BE -- THAT THE JURY NOT, NOT ENGAGE OR NOT CONVICT HER ON CONDUCT THAT IS OUTSIDE OF WHAT THE GOVERNMENT HAS ALLEGED, AND THIS IS AN ATTEMPT TO KEEP THEM IN THOSE LANES. I APPRECIATE THAT. AND I DON'T THINK THAT -- I DO THINK THAT THAT LAST SENTENCE IS UNNECESSARY. I'M GOING TO GIVE IT AS MODIFIED. I THINK THAT ACCOMPLISHES WHAT YOUR CONCERNS ARE, MR. CLEARY.
MR. CLEARY: WELL, YOUR HONOR, WE WOULD OBJECT FOR THE REASONS IDENTIFIED IN ECF 1174, AND ALTHOUGH WE ARE PLEASED TO HEAR THAT THE COURT INTENDS TO GIVE THE FIRST TWO SENTENCES OF THE MODEL INSTRUCTION, BECAUSE THE -- WE BELIEVE THAT THE MODEL INSTRUCTION AND THE SUPPLEMENTAL SENTENCE PROPOSED BY THE DEFENSE ARE NECESSARY IN THIS CASE BECAUSE THERE'S BEEN EVIDENCE AS DISCUSSED DURING THE ALLEGED CONSPIRACY PERIODS OUTSIDE OF THE FOUR CORNERS OF THE FACTUAL ALLEGATIONS CONTAINED IN THE INDICTMENT, AND THEN THERE HAS ALSO BEEN A SUBSTANTIAL VOLUME OF TESTIMONY SPECIFICALLY BY INVESTORS, BUT ALSO BY PHARMA WITNESSES, CONCERNING INTERACTIONS WITH MS. HOLMES AND OTHER EVIDENCE THAT PREDATES THE 2010 OR 2013 TIME PERIOD. SO FOR THAT REASON WE WOULD ASK THAT THE COURT GIVE THAT -- THE THIRD SENTENCE, UNDERSTANDING THE COURT'S RULING.
JUDGE DAVILA: ALL RIGHT. WELL, YOU'VE MADE YOUR RECORD. THANK YOU. MS. VOLKAR, ARE YOU GOING TO ARGUE ANY ACTIVITIES OUTSIDE OF THE CHARGED CONDUCT?
MS. VOLKAR: YOUR HONOR, ONLY WHAT THE COURT HAS HEARD THROUGHOUT THIS TRIAL, WHICH IS THAT THE PRE-INDICTMENT ACTIONS SOMETIMES INFORM -- FOR EXAMPLE, WHAT INVESTORS KNEW BEFOREHAND MIGHT INFORM HOW THEY HEARD INFORMATION FROM MS. HOLMES DURING THE ALLEGED TIME PERIOD. BUT OF COURSE WE HAVE IT LATER IN THESE INSTRUCTIONS, THE ALLEGED TIME PERIODS ARE CLEARLY DEFINED. WE CERTAINLY DO NOT PLAN TO ARGUE THAT SHE IS ON TRIAL OR THAT THE JURY SHOULD FIND HER GUILTY BASED ON ANY PRIOR, OR ANY ACTIVITY PRIOR TO 2010. BUT AS WE HAVE SAID THROUGHOUT THIS TRIAL, THAT ACTIVITY CAN BE RELEVANT TO SHED LIGHT ON CONDUCT THAT OCCURS DURING THE INDICTMENT, AND WE WILL BE VERY CLEAR ABOUT THAT AS WE DISCUSS IT WITH THE JURY.
JUDGE DAVILA: I THINK WHEN WE GET TO THE INSTRUCTIONS ALSO, THE INSTRUCTIONS THEMSELVES AS TO THE OFFENSES ARE VERY CLEAR AND DELINEATE TIME PERIODS, AND I THINK WE'LL SEE THAT WHEN WE GET TO THEM. BUT YOUR OBJECTIONS ARE NOTED. THANK YOU.
MR. CLEARY: THANK YOU, YOUR HONOR. I'M GOING TO TURN THE FLOOR OVER TO MS. SAHARIA.
JUDGE DAVILA: OKAY. WE'RE NOW AT INSTRUCTION NUMBER 11, AND THIS IS -- THERE'S NO OBJECTION TO 11 OR 12 OR 15, I THINK -- 13, PARDON ME, WHICH IS THE DUAL ROLE TESTIMONY. LET ME BE CLEAR ABOUT THAT. NO OBJECTION TO 11. NO OBJECTION TO 12 AS I UNDERSTAND IT.
MS. VOLKAR: CORRECT.
MS. SAHARIA: CORRECT.
JUDGE DAVILA: NUMBER 13 IS MODEL 4.15, DUAL ROLE TESTIMONY. I JUST WANTED TO ASK, ARE THE PARTIES SATISFIED WITH GIVING THE DUAL ROLE INSTRUCTION HERE AT THIS POINT?
MS. SAHARIA: YOU MEAN AS OPPOSED TO ELSEWHERE IN THE INSTRUCTIONS?
JUDGE DAVILA: YES, OR AT ANY OTHER TIME. LET ME SAY THAT.
MS. SAHARIA: I THINK SO, YOUR HONOR. BUT I'M HAPPY TO GO BACK AND LOOK WHETHER THERE'S ANY NATURAL PLACE FOR IT. YOU KNOW, WE DON'T HAVE A CLASSIC EXPERT INSTRUCTION --
JUDGE DAVILA: RIGHT.
MS. SAHARIA: -- BECAUSE THE GOVERNMENT DIDN'T CALL ANY EXPERTS IN THIS CASE. SO I THINK IT'S A FINE PLACE FOR IT, BUT LET ME THINK ABOUT IT AND WE CAN PROPOSE.
JUDGE DAVILA: WELL, LET ME BE CLEAR, I DON'T HAVE AN OBJECTION TO THE LOCATION OF IT. THERE WAS DUAL ROLE -- POTENTIAL DUAL TESTIMONY GIVEN DURING THE TRIAL AS INDICATED IN THIS INSTRUCTION. WHAT THE COURT DID NOT DO AT THE TIME THIS TESTIMONY WAS GIVEN, I DID NOT INFORM THE JURY AT THAT TIME ABOUT THE POTENTIAL OF THE DUAL TESTIMONY AND HOW THEY SHOULD CONSIDER --
MS. SAHARIA: UNDERSTOOD.
JUDGE DAVILA: -- IT AT THE TIME OF THE TESTIMONY. MY SENSE WAS THAT WASN'T NECESSARY GIVEN THE SPECIFICS, AND MY SENSE WAS AT THE TIME THE JURY WAS ABLE TO DISTINGUISH BETWEEN FACT AS THE DOCTORS TESTIFIED AND EXPERT AS THEY TESTIFIED. SO I DIDN'T FIND IT NECESSARY TO GIVE IT THEN, AND I DIDN'T HEAR FROM EITHER SIDE A REQUEST TO GIVE IT AT THAT POINT. THAT'S WHY I RAISE THE POINT NOW. I DO THINK IT'S APPROPRIATE TO GIVE THE DUAL ROLE TESTIMONY INSTRUCTION. I THINK THE WAY THAT YOU HAVE MET AND CONFERRED AND PARSED IT OUT HERE IS SUFFICIENT FOR THAT PURPOSE SUCH THAT THE JURY IS INFORMED AS TO THAT TESTIMONY, AND THEY'LL RECALL IT, I'M SURE, AND YOU'LL SPEAK TO IT. THAT'S WHAT I WANTED TO --
MS. SAHARIA: I AGREE, YOUR HONOR.
JUDGE DAVILA: RIGHT.
MS. VOLKAR: I AGREE, TOO, YOUR HONOR. IN THE MOMENT I RECALL THE COURT BEING QUITE CLEAR WHAT THE EXPERTISE REFERRED TO AND THERE WAS SPECIFICITY IN THE MOMENT, AND I THINK THAT'S PART OF WHY NEITHER SIDE FELT THAT THERE WAS NEED FOR ADDITIONAL ELABORATION AT THAT POINT IN TIME.
JUDGE DAVILA: RIGHT.
MS. VOLKAR: AS FAR AS WHERE THIS FALLS IN THE INSTRUCTIONS, I THINK THIS IS IN THE ROW OF DIFFERENT CATEGORIES OF EVIDENCE THAT THE JURY HAS BEFORE IT TO CONSIDER, AND SO IT SEEMS A LOGICAL PLACE TO US. IF THE COURT WANTED TO MOVE IT, FOR EXAMPLE, TO RIGHT AFTER THE CREDIBILITY OF WITNESSES INSTRUCTIONS, OR SOMETHING OF THAT NATURE, I DON'T SEE ANY ISSUE WITH THAT. BUT I THINK IT'S FINE WHERE IT IS.
JUDGE DAVILA: I'M HAPPY TO HAVE IT HERE.
MS. SAHARIA: THAT'S FINE. I THINK THERE'S NO LOGICAL PLACE FOR IT TO GO.
JUDGE DAVILA: RIGHT. AND THEN MY COMMENT AND MS. VOLKAR'S OBSERVATION ABOUT THE TESTIMONY DURING THE TRIAL, YOU AGREE WITH THAT?
MS. SAHARIA: NEITHER PARTY REQUESTED A CONTEMPORANEOUS INSTRUCTION, SO I THINK WE ARE WHERE WE ARE, WHICH IS TO PUT IT IN THE FINAL INSTRUCTIONS.
JUDGE DAVILA: OKAY. LET'S SEE. 14 IS CHARTS AND SUMMARIES NOT ADMITTED, AND 15 IS CHARTS AND SUMMARIES ADMITTED. I'LL GIVE THOSE. NOW WE'RE AT 16, AND THIS IS CONSPIRACY AND THE ELEMENTS. AND WE HAVE TO TALK ABOUT THIS. LET ME SAY, IT IS VERY HELPFUL THE WAY YOU HAVE PROVIDED THE BLUE/YELLOW HERE FOR YOUR ADDITIONS, AND THAT WAS HELPFUL FOR ME AS I WENT THROUGH THESE. SO AS TO 16, WHICH IS CONSPIRACY ELEMENTS, I WILL -- AND WE WILL GO DOWN TO, I THINK IT'S LINE 23, I THINK IT IS -- AND I WILL GIVE A VARIATION OF LINE 23, AND IT WILL READ: "NOR IS IT ENOUGH THAT THEY HAD A BUSINESS OR ROMANTIC RELATIONSHIP."
MS. VOLKAR: YOUR HONOR, MAY THE GOVERNMENT BE HEARD ON THAT?
JUDGE DAVILA: YES.
MS. VOLKAR: YOUR HONOR, THE GOVERNMENT OBJECTS EVEN TO THE COURT'S PROPOSED MODIFIED VERSION. THERE IS NO SUPPORT -- THE CASE THAT IS CITED I'LL COME BACK TO THAT IN A MOMENT -- THERE'S NO NINTH CIRCUIT SUPPORT, AT LEAST THAT WE'VE BEEN PROVIDED OR THAT THE GOVERNMENT HAS BEEN ABLE TO FIND, TO SUPPORT THE INSTRUCTION THAT THEY WANT HERE, THAT WORKING TOGETHER OR HAVING A ROMANTIC RELATIONSHIP IS NOT ENOUGH. AND I WORRY THAT HAVING THAT IN THE INSTRUCTIONS COULD CONFUSE THE JURY THAT THAT COULD CERTAINLY BE A PIECE ALONG THE WAY TO THEM BEING IN A CONSPIRACY TOGETHER. THE ESPINOZA-VALDEZ CASE THAT THEY CITE HERE HAS VERY DIFFERENT FACTS. I'M SURE YOUR HONOR HAS READ IT, BUT IT'S A PERSON WHO HAPPENS TO BE SOME DISTANCE AWAY FROM TWO OTHERS, HAS A BACKPACK, IS NEAR THE BORDER OF MEXICO, AND WAS ON TRIAL FOR CONSPIRACY TO SMUGGLE DRUGS.
AND THE GOVERNMENT'S THEORY WAS THAT THAT PERSON MUST HAVE BEEN ASSOCIATED WITH THE TWO PEOPLE HE WAS WALKING NEAR BECAUSE THEY WERE ALL FOUND IN THE SAME LOCATION. DRUGS WERE NOT FOUND ON ANY OF THEM. IT WAS REALLY JUST A THEORY OF THIS IS A COMMON DRUG SMUGGLING ROUTE AND THOSE PEOPLE HAPPENED TO BE NEAR EACH OTHER. AND THAT WAS THE NINTH CIRCUIT SAYING MERE ASSOCIATION IS NOT ENOUGH. THAT, TO ME, IS A FAR CRY FROM THE WORKING TOGETHER IS NOT ENOUGH, THE ROMANTIC RELATIONSHIP IS NOT ENOUGH. I WOULD HOPE THAT WE CAN ALL AGREE THAT THOSE FACTORS -- THEY AT LEAST SEEM TO BE PART OF A FACTOR INDICATING THAT ONE MIGHT BE IN A CONSPIRACY. ONE WOULD CERTAINLY BE A LOT CLOSER TO SOMEONE THEY'RE IN A ROMANTIC RELATIONSHIP WITH. SO I JUST GO BACK TO THE NINTH CIRCUIT HAS NEVER ENDORSED ANYTHING CLOSE TO THIS INSTRUCTION. AND THE INTIMATE PARTNER PORTION, THE ROMANTIC RELATIONSHIP THAT YOUR HONOR JUST MENTIONED, THAT WAS ADDED FOR THE FIRST TIME YESTERDAY, AND THAT IS REALLY WHERE THE GOVERNMENT STRENUOUSLY, STRENUOUSLY OBJECTS. THERE'S NOTHING THAT INDICATES THAT THAT CANNOT BE A PIECE IN THE PUZZLE TOWARDS SHOWING THAT A CONSPIRACY EXITS, AND WE WORRY THAT IT WOULD BE MISLEADING TO THE JURY TO INCLUDE SUCH AN INSTRUCTION HERE.
JUDGE DAVILA: THANK YOU. AND I APPRECIATE THAT. DO YOU THINK IF WE ADDED SOME -- IF THE COURT WERE INCLINED TO GIVE THIS, IF WE ADDED SOMETHING, "NOR IS IT STANDING ALONE," SOME LANGUAGE LIKE THAT OR SOME MODIFICATION? I THINK I UNDERSTAND YOUR CONCERN THAT THE JURY MIGHT LOOK AT THIS AND SAY, WELL, THERE WAS -- THEY DID WORK TOGETHER, THERE WAS A RELATIONSHIP, THEREFORE, THERE'S NOT GUILT HERE BECAUSE OF THAT. IT SEEMS LIKE YOU WANT TO -- I DON'T WANT TO USE THE WORD "SANITIZE," BUT SOMEHOW ENSURE THAT THE JURY DOESN'T -- IF THIS CONCEPT IS GIVEN TO THEM, THAT THEY DON'T ABUSE IT.
MS. VOLKAR: THAT'S CORRECT, YOUR HONOR. AND I WOULD SAY THAT I THINK RIGHT ABOVE IT, AS THE COURT WILL READ THE ELEMENTS, THAT DOES PROTECT AGAINST THAT. I DON'T THINK THAT THE "STANDING ALONE" LANGUAGE WOULD SUFFICE TO ALLAY THE GOVERNMENT'S CONCERNS. THE REASON I SAY THAT IS BECAUSE OF COURSE THE ELEMENTS, WHICH WE ALL KNOW, ARE AN AGREEMENT BETWEEN TWO OR MORE PERSONS TO COMMIT WIRE FRAUD, AND THAT SHE BECAME A MEMBER OF THE CONSPIRACY KNOWING OF ONE OF ITS OBJECTS AND HELPING TO INTEND TO ACCOMPLISH IT, SO OF COURSE THE JURY WILL ALREADY HAVE HEARD THAT IN CONTEXT. AND WE UNDERSTAND, FOR EXAMPLE, IN THE SENTENCE PRIOR ON LINES 21 TO 22, "IT'S NOT ENOUGH, HOWEVER, THAT THEY SIMPLY MET, DISCUSSED MATTERS OF COMMON INTEREST, ACTED IN SIMILAR WAYS, WORKED TOGETHER, OR PERHAPS HELPED ONE ANOTHER," IF THE DEFENSE WANT THAT'S CONCEPT TO BE IN THERE. BUT WE DO STRENUOUSLY OBJECT TO THE ROMANTIC RELATIONSHIP OR TO SINGLING OUT THE FACT THAT THEY WORKED TOGETHER. OF COURSE THAT IS PART OF IT. OF COURSE HOW CLOSE THEY ARE, THE ALMOST 500 PAGES OF TEXT MESSAGES, THOSE DO GO TO AND INDICATE THAT THERE MIGHT HAVE BEEN A CONSPIRACY, AND TO INDICATE OTHERWISE IN THE INSTRUCTIONS I THINK WOULD BE MISLEADING TO THE JURY.
JUDGE DAVILA: WELL, THOSE ARE GOOD POINTS. MS. SAHARIA?
MS. SAHARIA: I THINK THE "STANDING ALONE" LANGUAGE THAT YOUR HONOR PROPOSED PERFECTLY RESOLVES THE GOVERNMENT'S CONCERN, WHICH IS THE GOVERNMENT'S POSITION, AS I UNDERSTAND IT, IS THAT THE FACT THAT THEY HAD A ROMANTIC RELATIONSHIP IS EVIDENCE, IS SOME RELEVANT EVIDENCE OF A CONSPIRACY. AND THAT'S EXACTLY OUR WORRY HERE, WHICH IS THAT THE JURY MIGHT CONCLUDE FROM THE MERE FACT OF A ROMANTIC RELATIONSHIP OR FROM THE MERE FACT OF A BUSINESS RELATIONSHIP THAT A CONSPIRACY EXISTED. AND SO I THINK THE COURT'S PROPOSAL TO ADD THE "STANDING ALONE" LANGUAGE KIND OF CAPTURES THE MIDDLE GROUND BETWEEN THE TWO PARTIES, WHICH IS THE JURY CAN CONSIDER IT, BUT IT CAN'T CONSIDER THAT BY ITSELF. THAT'S NOT ENOUGH. AND THE NINTH CIRCUIT CASE LAW MAKES THAT VERY CLEAR. IT'S BLACK LETTER LAW THAT MERE ASSOCIATION OF SOME KIND IS NOT ENOUGH. THE GOVERNMENT BEARS THE BURDEN TO PROVE A MEETING OF THE MINDS BEYOND MERE ASSOCIATION, AND IN THE CONTEXT OF THIS CASE WHERE YOU HAVE TWO PEOPLE WHO ARE BOTH BUSINESS ASSOCIATES AND ROMANTIC ASSOCIATES, WE THINK IT'S IMPORTANT TO CONVEY THAT TO THE JURY IN THIS WAY. SO WE WOULD BE PERFECTLY SATISFIED WITH THE COURT'S -- THE FIRST PROPOSAL THAT THE COURT GAVE WITH THE BUSINESS OR THE ROMANTIC RELATIONSHIP LANGUAGE, AND EVEN ADDING THE "STANDING ALONE" LANGUAGE WOULD BE FINE WITH US AS WELL.
JUDGE DAVILA: ALL RIGHT.
MS. VOLKAR: YOUR HONOR, I THINK THE GOVERNMENT DOES OBJECT. I DON'T THINK NINTH CIRCUIT LAW IS CLEAR THAT -- I'M NOT AWARE OF A CASE THAT TALKS ABOUT THE ROMANTIC RELATIONSHIP IN THIS CATEGORY OF MERE ASSOCIATION IS NOT ENOUGH. I THINK MOST OF US WOULD ARGUE THAT A ROMANTIC RELATIONSHIP IS SOMETHING BEYOND MERE ASSOCIATION, SO I DO THINK IT'S A LITTLE BIT IN THE GREY AREA. IF THE COURT IS INCLINED TO GIVE IT, WE DO REQUEST THAT THE "STANDING ALONE" LANGUAGE BE ADDED TO MAKE THAT CLEAR THAT THE COURT IS SAYING THE BUSINESS OR ROMANTIC RELATIONSHIP STANDING ALONE IS NOT SUFFICIENT, THAT THERE DOES HAVE TO BE THE MEETING OF THE MINDS. BUT THE GOVERNMENT DOES OBJECT OVERALL.
JUDGE DAVILA: ALL RIGHT. THANK YOU. SO WHEN I LOOKED AT IT FIRST, INTIMATE PARTNER, I THOUGHT THAT WAS TOO SPECIFIC --
MS. SAHARIA: UNDERSTOOD, YOUR HONOR.
JUDGE DAVILA: -- AND ARGUMENTATIVE. AND I'M HAPPY TO RECEIVE ANOTHER DEFINITION OF WHAT YOU THINK THE RELATIONSHIP SHOULD BE CALLED, MS. VOLKAR, SOMETHING OTHER THAN ROMANTIC RELATIONSHIP.
MS. VOLKAR: I DON'T TAKE ISSUE WITH THE COURT'S CHARACTERIZATION. IT'S MORE SO THE CONCEPT ITSELF.
JUDGE DAVILA: SURE.
MS. VOLKAR: SO IF IT'S GOING TO BE REFERENCED, I THINK THE FORMULATION THAT YOUR HONOR JUST MENTIONED, WHICH IS "THE BUSINESS AND ROMANTIC RELATIONSHIP STANDING ALONE IS NOT ENOUGH," THAT WOULD BE ACCEPTABLE IF THE COURT IS GOING TO GIVE THIS. BUT THE GOVERNMENT'S POSITION IS THAT IT SHOULDN'T BE GIVEN AT ALL.
JUDGE DAVILA: PRESERVING YOUR OBJECTION.
MS. VOLKAR: EXACTLY.
JUDGE DAVILA: OKAY. THANK YOU. TURNING THE PAGE, AND THIS IS PAGE 18, ECF PAGE 19, I AM NOT INCLINED TO GIVE THE HIGHLIGHTING THAT BEGINS AT THE END OF THAT AND OVER TO THE TOP OF LINES 1 AND 2 AS THE DEFENSE REQUESTED. I'LL GIVE THE LINES 3 THROUGH 10, "ONE BECOMES A MEMBER," AND IT ENDS AT LINE 10, "CONSPIRACY EXISTS." THE NEXT SECTION THAT IS ON LINES 11 THROUGH 16 IS 822, ISN'T IT?
MS. SAHARIA: YES, YOUR HONOR. WE TOOK TO HEART THE COURT'S REQUEST THAT WE SHORTEN OUR PROPOSED VERSION OF 8.22, AND SO WE DID PROPOSE A SHORTER VERSION OF 8.22, WHICH IS THE MULTIPLE CONSPIRACIES INSTRUCTION. AND I DO THINK IT'S IMPORTANT TO CONVEY THIS CONCEPT TO THE JURY HERE, NOT ONLY BECAUSE THE GOVERNMENT HAS CHARGED TWO DIFFERENT CONSPIRACIES, BUT AS MR. CLEARY WAS ALLUDING TO, THERE IS EVIDENCE IN THE RECORD THAT THE GOVERNMENT PUT INTO ITS CASE ABOUT REPRESENTATIONS TO OTHER FORMS OF INDIVIDUALS OR COMPANIES THAT ARE NOT PART OF THE CHARGED CONSPIRACIES, THE PHARMACEUTICAL COMPANIES, THE DEPARTMENT OF DEFENSE, REGULATORS. AND IT'S IMPORTANT, GIVEN THOSE FACTS, THAT THAT'S THE TYPE OF SITUATION WHERE THE NINTH CIRCUIT HAS SAID A MULTIPLE CONSPIRACIES INSTRUCTION SHOULD BE GIVEN, IF THERE'S A RISK THAT THE JURY COULD FIND THAT A DIFFERENT CONSPIRACY EXISTS, THE COURT SHOULD GIVE THIS MULTIPLE CONSPIRACIES INSTRUCTION, INSTRUCTING THE JURY THAT IT NEEDS TO FIND ONLY THE CONSPIRACY THAT WAS CHARGED IN THE INDICTMENT.
JUDGE DAVILA: SO WHEN WE LOOK AT THE -- THANK YOU. SO WHEN WE LOOK AT THE USE NOTE, THE USE NOTE INFORMS US THAT THIS COULD BE GIVEN WHEN THERE'S A SINGLE, A SINGLE CONSPIRACY ALLEGED, AND THAT THERE IS SOME DANGER THAT THE FACTS MIGHT YIELD SOMETHING DIFFERENT FROM THE CHARGED CONDUCT. AND HERE, WHEN I LOOK AT THESE HERE, I THINK THE TWO CONSPIRACIES ARE VERY DISTINCT AND THEY'RE CHARGED WITH VERY CLEAR LANGUAGE, AND IT SEEMS LIKE THE CHARGING DOCUMENT, AS WELL AS THE FOLLOWING INSTRUCTIONS, DELINEATE SPECIFICALLY WHAT THE CONSPIRACIES ARE. SO I GUESS THE QUESTION I HAVE IS, WHAT IS THE OTHER CONSPIRACY? WHAT ARE THE OTHER CONSPIRACIES? YOU'VE TOLD ME ABOUT DOD AND SOME OTHER THINGS. BUT, MS. SAHARIA, I'M NOT SURE WE'RE --
MS. SAHARIA: WELL, THAT'S JUST OUR CONCERN, YOUR HONOR, WHICH IS THAT THE JURY COULD BE -- GIVEN THE AMOUNT OF EVIDENCE THAT CAME INTO THIS CASE ABOUT REPRESENTATIONS TO OTHER PARTIES, THAT THE JURY COULD MISTAKENLY CONCLUDE THAT SOME OTHER CONSPIRACY EXISTED, LIKE A CONSPIRACY TO DEFRAUD THE DEPARTMENT OF DEFENSE, AND IT'S IMPORTANT TO GIVE THE JURY THE INSTRUCTION FOR THAT REASON.
JUDGE DAVILA: MS. VOLKAR?
MS. VOLKAR: YOUR HONOR, I THINK THE COURT CAPTURED IT EXACTLY. THE TWO CONSPIRACIES ARE CHARGED. THEY'RE VERY DISTINCT. THEY'RE VERY CLEAR. THE GOVERNMENT WILL NOT BE ARGUING, AS WE REPRESENTED TO YOUR HONOR PREVIOUSLY, THAT THERE WAS ANY CONSPIRACY TO DEFRAUD THE DEPARTMENT OF DEFENSE. I DO NOT THINK THAT THE EVIDENCE ALONE WILL LEAD THE JURY TO THINK ABOUT THAT. HONESTLY, JUST THE PRIOR PAGE OF THIS INSTRUCTION, WHICH THE PARTIES DO AGREE TO, DEFINES THE TWO CONSPIRACIES, CONSPIRING TO COMMIT WIRE FRAUD AGAINST INVESTORS AND THERANOS DURING A SPECIFIC PERIOD OF TIME; AND CONSPIRING TO COMMIT WIRE FRAUD AGAINST PATIENTS WHO PAID FOR THERANOS'S BLOOD TESTING SERVICES, ALSO DURING A SPECIFIC PERIOD OF TIME. I DON'T THINK THERE'S ANY RISK FOR CONFUSION HERE, AND THEREFORE, THERE'S NO NEED TO PROVIDE THE MULTIPLE CONSPIRACIES INSTRUCTION.
JUDGE DAVILA: ANYTHING FURTHER?
MS. SAHARIA: NOTHING FURTHER, YOUR HONOR.
JUDGE DAVILA: ALL RIGHT. THANK YOU.
MS. SAHARIA: I DO JUST WANT TO CONFIRM, AT THE BOTTOM OF 18, THE COURT WILL GIVE THE YELLOW LANGUAGE, JUST NOT THE BLUE VERSION OF THE LANGUAGE; CORRECT?
JUDGE DAVILA: I'M SORRY, WHERE ARE YOU?
MS. SAHARIA: I'M SORRY. THE BOTTOM OF 18.
JUDGE DAVILA: PAGE 18?
MS. SAHARIA: YES. YOU'LL GIVE THE YELLOW LANGUAGE; CORRECT?
JUDGE DAVILA: YES, THAT'S RIGHT.
MS. SAHARIA: IF I MAY JUST STATE FOR THE RECORD TWO ADDITIONAL OBJECTIONS AS THEY RELATE TO CONSPIRACY?
JUDGE DAVILA: SURE.
MS. SAHARIA: WE'VE ALREADY COVERED OUR OBJECTIONS TO THE LACK OF AN OVERT ACT ELEMENT, AND I'M NOT GOING TO REPEAT THAT ONE.
JUDGE DAVILA: RIGHT.
MS. SAHARIA: I DO JUST WANT TO NOTE THAT WE DO REITERATE THE MOTION THAT WE MADE AT THE MOTION TO DISMISS STAGE, THAT OUR POSITION IS THAT THE GOVERNMENT IMPROPERLY EXPANDED THE SCOPE OF THE CHARGED INVESTOR CONSPIRACY AND THE SECOND AND THIRD SUPERSEDING INDICTMENT, SUCH THAT THE THIRD SUPERSEDING INDICTMENT DOES NOT RELATE BACK TO THE ORIGINAL INDICTMENT. THE RESULT OF THAT WOULD BE THAT THE JURY WOULD NEED TO BE INSTRUCTED THAT IT NEEDED TO FIND THAT THE INDICTMENT CONTINUED PAST THE DATE THAT IS FIVE YEARS BEFORE THE RETURN OF THE SECOND SUPERSEDING INDICTMENT. THE COURT HAS REJECTED THAT ARGUMENT, BUT IF THE COURT HAD ACCEPTED IT, WE WOULD HAVE REQUESTED A JURY INSTRUCTION ON THE STATUTE OF LIMITATIONS.
JUDGE DAVILA: UNDERSTOOD. MS. VOLKAR, DO YOU WANT TO BE HEARD?
MS. VOLKAR: THE GOVERNMENT RELIES ON ITS FILINGS AND AGREES WITH THE COURT'S RULING.
JUDGE DAVILA: OKAY. THANK YOU. SO I'M NOT GOING TO GIVE -- RETURNING NOW TO 1188, ECF PAGE 20, PAGE 19 OF THE DOCUMENT, I WON'T GIVE LINES 11 THROUGH 16. THE COURT FINDS THAT'S NOT NECESSARY HERE. THE COURT FINDS THAT THE AS CHARGED, AND IN THE OTHER INSTRUCTIONS, THE TWO, THE TWO CONSPIRACIES ARE SUFFICIENTLY DESCRIBED SUCH THAT THERE DOES NOT APPEAR TO THE COURT THAT THERE WOULD BE JURY CONFUSION AS TO THOSE TWO CONSPIRACIES SUCH THAT 8.22 IS NOT NECESSARY. I WON'T GIVE 8.22. INITIALLY LET ME SAY THAT I WOULDN'T GIVE 8.22 COMBINED WITH THIS INSTRUCTION. I THINK THAT'S MORE CONFUSING, CANDIDLY. BUT I'M NOT GOING TO GIVE IT, SO ENOUGH SAID ON THAT. LET'S MOVE TO 17. 17 IS THE DEFINITION OF WILLFULLY. I KNOW WE HAD SOME SPIRITED CONVERSATION ABOUT THIS, AND THE BRYAN CASE, BRYAN VERSUS U.S., 524 U.S. 184, THAT THE PARTIES -- I THINK BOTH OF YOU TALK ABOUT BRYAN IN RESPONSE. AND, MS. VOLKAR, DO YOU WANT TO BE HEARD ON THIS?
MS. VOLKAR: JUST TO CLARIFY THAT THE AUTHORITY THAT IS ON THIS PAGE UNDER 17 IS WHAT THE DEFENSE SUGGESTS SUPPORTS ITS DEFINITION. THE GOVERNMENT STRONGLY DISAGREES AND THINKS THAT WILLFULLY IS NOT IN THE STATUTE OF 1349. IT'S NOT IN THE STATUTE FOR CONSPIRACY. WE TOOK YOUR HONOR UP ON THE SUGGESTION OF LOOKING AT CALJIC AND THE OTHER CASES, AND I WOULD NOTE THAT IN THE COMMENTS TO THE CALJIC SECTION, IT SAYS LOOK TO WHETHER WILLFULLY IS IN THE STATUTE. SO I JUST THINK THAT WE FAIL AT STEP ONE. BUT IF THE COURT IS SO INCLINED -- AND WE'RE GOING TO HAVE THIS CONVERSATION A FEW TIMES TODAY --
JUDGE DAVILA: RIGHT.
MS. VOLKAR: -- I THINK THE DEFENSE IS TRYING TO HEIGHTEN THE MENS REA FOR WIRE FRAUD UNDULY AND THIS IS ONE OF THOSE INSTANCES. THE GOVERNMENT CERTAINLY OBJECTS TO THE DEFINITION THAT THEY HAVE, WHICH IS THAT THE DEFENDANT HAS TO KNOW THE LAW AND VIOLATE IT. THAT'S TYPICALLY RESERVED FOR TAX FRAUD CASES AND CERTAINLY NOT APPROPRIATE HERE.
JUDGE DAVILA: THANK YOU. AND I LOOKED AT THE CALJIC THAT I SUGGESTED, THAT'S CALJIC 1.20, AND THEN WHEN I LOOK AT THE USE NOTE THERE, IT SAYS NOT TO USE IT FOR SPECIFIC INTENT OFFENSES. SO THAT'S INFORMATIVE, AT LEAST FROM THE CALIFORNIA COURTS. MS. SAHARIA?
MS. SAHARIA: YOUR HONOR, WE WOULD STRONGLY OBJECT TO USING THE CALIFORNIA STANDARD IN THIS CASE. THE GOVERNMENT CITED NO AUTHORITY FOR IMPORTING A STATE LAW DEFINITION INTO THIS FEDERAL CRIMINAL CASE. AND AS THE COURT NOTES, THIS IS A SPECIFIC INTENT CASE, AND IN PARTICULAR, THE INTENT FOR WIRE FRAUD IS THE INTENT TO INJURE SOMEONE. IT'S THE INTENT TO DEPRIVE SOMEONE OF MONEY OR PROPERTY. SO TO USE THIS DEFINITION OF WILLFULLY TO DEFINE THE CONSPIRACY TO COMMIT WIRE FRAUD WHEN THIS DEFINITION SAYS THE WORD "WILLFULLY" DOES NOT REQUIRE ANY INTENT TO INJURE ANOTHER WOULD BE SQUARELY CONTRARY TO THIS SPECIFIC INTENT TO COMMIT WIRE FRAUD. SO WE JUST THINK THAT THE STATE LAW DEFINITION IS COMPLETELY INAPPLICABLE HERE AND WOULD BE AN ERROR TO GIVE. WE SUBMIT THE COURT SHOULD GIVE THE BRYAN INSTRUCTION, BUT IF NOT THE BRYAN INSTRUCTION, THEN NO INSTRUCTION AS OPPOSED TO THIS CALIFORNIA INSTRUCTION --
JUDGE DAVILA: WELL, DON'T POINT THE FINGER AT MS. VOLKAR. THAT WAS THE COURT'S SUGGESTION TO LOOK AT IT AND SEE IF THERE WAS LANGUAGE THERE THAT COULD BE IMPORTED AND OTHERWISE WORDSMITHED TO ASSIST US.
MS. SAHARIA: I CAN BRIEFLY ELABORATE ON WHY WE THINK THE BRYAN STANDARD IS THE RIGHT STANDARD. WE DID COVER THAT A LITTLE BIT LAST WEEK. BUT I TAKE ISSUE WITH MS. VOLKAR'S SUGGESTION THAT BRYAN IS A HEIGHTENED STANDARD OF WILLFULNESS THAT APPLIES ONLY IN SPECIALIZED CASES. IN FACT, BRYAN SAYS THE OPPOSITE. BRYAN SAYS, "AS A GENERAL MATTER, WHEN USED IN THE CRIMINAL CONTEXT, A WILLFUL ACT IS ONE UNDERTAKEN WITH A BAD PURPOSE. IN OTHER WORDS, IN ORDER TO ESTABLISH A WILLFUL VIOLATION OF A STATUTE, THE GOVERNMENT MUST PROVE THAT THE DEFENDANT ACTED WITH KNOWLEDGE THAT HIS CONDUCT WAS UNLAWFUL." THE DEFENDANT IN BRYAN WAS ADVOCATING AN EVEN HIGHER STANDARD OF WILLFULNESS, AND THE CASES DISTINGUISH BETWEEN THE BRYAN STANDARD, WHICH IS A LESSER OR DEFAULT STANDARD, AND THEN A HIGHER STANDARD WHERE IN THESE COMPLEX CASES, LIKE TAX CASES, THE COURT SOMETIMES REQUIRES A DEFENDANT TO KNOW OF THE PARTICULAR STATUTE AT ISSUE. AND THAT'S NOT OUR ARGUMENT HERE, NOT THAT MS.
HOLMES NEEDED TO KNOW OF THE WIRE FRAUD STATUTE, BUT JUST THE GENERAL DEFAULT PRINCIPLE THAT TO ACT WILLFULLY, ONE NEEDS TO INTENT TO ACT UNLAWFULLY, EVEN IF KNOWING OF THE PARTICULAR STATUTE. AND THE NINTH CIRCUIT'S DECISION IN UNITED STATES VERSUS HERNANDEZ, WHICH IS CITED IN THE COMMENTARY TO THIS MODEL RULE -- AND THAT'S AT 859 F.3D 817, NINTH CIRCUIT 2017 -- HAS A VERY GOOD DISCUSSION OF THIS, AND THAT CASE CHARACTERIZES THE BRYAN STANDARD AS, QUOTE, "THE LOWER STANDARD OF WILLFULNESS," AND IT APPROVES THE DEFINITION OF WILLFULNESS TAKEN FROM THE BRYAN CASE, WHICH IS, "A PERSON ACTS WILLFULLY IF HE ACTS INTENTIONALLY AND PURPOSEFULLY AND WITH THE INTENT TO DO SOMETHING THAT THE LAW FORBIDS, THAT IS, WITH A BAD PURPOSE TO DISOBEY OR DISREGARD THE LAW." WE THINK IT MAKES PERFECT SENSE TO APPLY THIS DEFINITION TO THE CONSPIRACY COUNT BECAUSE THE INSTRUCTIONS FOR CONSPIRACY ALSO PROVIDE THAT THE CRIME OF CONSPIRACY IS THE AGREEMENT TO DO SOMETHING UNLAWFUL. THAT IS ACTUALLY IN THESE INSTRUCTIONS. AND THAT'S IN PERFECT HARMONY WITH BRYAN'S DEFINITION OF WILLFULNESS. AND AS WE'VE ALREADY DISCUSSED, THE MODEL INSTRUCTIONS USE THE ADVERB "WILLFULLY" IN TWO PLACES. SO WE SUBMIT THE COURT SHOULD GIVE THE DEFINITION THAT WE HAVE GIVEN, WHICH IS THE BRYAN DEFINITION. IT'S THE DEFAULT STANDARD IN FEDERAL CRIMINAL LAW. BUT IF THE COURT DOESN'T GIVE THAT, IT CERTAINLY SHOULD NOT GIVE THE STATE LAW DEFINITION GIVEN THAT THIS IS A SPECIFIC INTENT CRIME.
JUDGE DAVILA: ANYTHING FURTHER, MS. VOLKAR?
MS. VOLKAR: YOUR HONOR, THE PARTIES DO SEEM TO AGREE ON ONE THING, WHICH IS DEPENDING ON THE COURT'S VIEW OF BRYAN, NO INSTRUCTION SHOULD BE GIVEN, AND THAT IS BECAUSE CERTAINLY THE INSTRUCTION THAT THEY HAVE SUGGESTED IS INAPPROPRIATE. AND BRYAN STARTS WITH THERE IS WILLFULLY IN THE STATUTE AND IT IS INTERPRETING A WORD IN THE STATUTE, AND THE ENTIRE OPINION IS ABOUT THAT. AND I WOULD SUBMIT -- I DIDN'T SEE HERNANDEZ IN THE CASES, THE PAGE LONG AUTHORITY CITED HERE. I DO SEE A LOT OF OUT OF CIRCUIT CASES.
JUDGE DAVILA: RIGHT.
MS. VOLKAR: I LOOKED AT THE NINTH CIRCUIT CASES. THEY ARE ALL REGULATORY FRAUD VIOLATION CASES THAT HAVE A HIGHER MENS REA, AND EVEN AMONGST THOSE THERE ARE TIERS. SECURITY FRAUD AND CERTAIN HEALTH CARE FRAUD TEND TO HAVE AN INSTRUCTION THAT IS CLOSER TO WHAT THE CALJIC INSTRUCTION IS. ONLY TAX FRAUD CASES THAT I HAVE FOUND TEND TO HAVE THIS HIGHEST ONE OF YOU HAD TO KNOW THE LAW AND KNOW THAT YOU WERE VIOLATING IT. THAT'S RESERVED FOR THE HIGHEST CATEGORY OF REGULATORY FRAUD VIOLATIONS. AS YOU WILL HEAR THE PARTIES AT MULTIPLE TIMES TODAY, I BELIEVE WE AGREE THIS IS NOT A REGULATORY FRAUD VIOLATION CASE. IN FACT, YOUR HONOR INDICATED THAT THE COURT WILL GIVE AN INSTRUCTION ON THAT, AND WE'LL GET THERE LATER. WE ARE JUST SIMPLY SAYING THAT IF THIS IS NOT A REGULATORY FRAUD VIOLATION CASE, WHICH I BELIEVE THE PARTIES AGREE ON, THEN THE HEIGHTENED MENS REA THAT GOES WITH THAT SHOULD ALSO BE OMITTED, AND THAT MEANS THERE SHOULD NOT BE A DEFINITION OF WILLFULNESS.
THAT MEANS THAT KNOWINGLY AND THE SPECIFIC INTENT TO DEFRAUD, WHICH HAS BEEN DEFINED BY THE NINTH CIRCUIT OVER AND OVER AND OVER AGAIN, IS WHAT THE MENS REA STANDARD SHOULD BE. THERE SHOULD NOT BE ANY ATTEMPT TO INJECT A HIGHER MENS REA IN THIS STRAIGHTFORWARD WIRE FRAUD AND CONSPIRACY TO COMMIT WIRE FRAUD CASE. AND THE LAST POINT I WANT TO MAKE ON THAT IS, AGAIN, THAT WILLFULLY IS NOT IN THE STATUTE. AND IF THE COURT DID WANT TO GIVE ANYTHING TO FURTHER EXPLAIN THE STRAY REFERENCES OF WILLFULLY IN THE FURTHER EXPLANATION OF THE ELEMENTS OF CONSPIRACY, IT'S REALLY JUST THE INTENT TO ACT WITH PURPOSE, WHICH IS ALONG THE LINES OF WHAT CALJIC SAYS. THE GOVERNMENT'S FIRST POSITION IS REALLY THIS INSTRUCTION WILL INJECT CONFUSION, IT'S NOT WARRANTED, WILLFULLY IS NOT IN THE STATUTE, AND THUS, THIS INSTRUCTION SHOULD NOT BE GIVEN.
JUDGE DAVILA: WELL, THANK YOU. WE DO NOTE THAT WILLFULLY APPEARS.
MS. SAHARIA: IT DOES.
JUDGE DAVILA: THERE ARE TWO PLACES WHERE IT'S USED. THAT CAUSED ME SOME CONCERN. I LOOKED AT THE NORA CASE THAT WAS CITED, 988 F.3D. AND THAT SEEMED TO -- DID THAT INVOLVE A 1349 TYPE CASE?
MS. SAHARIA: IT DID, YOUR HONOR.
JUDGE DAVILA: IT'S A FIFTH CIRCUIT CASE, I UNDERSTAND THAT, BUT IT DID PROVIDE SOME GUIDANCE AS TO WHEN YOU HAVE THE WORD WILLFULLY, LEAVING IT OUT THERE JUST ALONE IS -- THAT'S WHERE MY CONCERN WAS AS FAR AS JURY CONFUSION, AND DO WE NEED TO ANSWER THAT? DO WE NEED TO TELL THEM WHAT IS WILLFULLY? WILL WE -- IF WE DON'T, WHAT DO WE DO IN THE FUTURE WHEN THE JURY SENDS A QUESTION OUT AND SAYS, "TELL US ABOUT WILLFULLY." WHAT SHOULD WE DO WITH THAT?
MS. VOLKAR: I THINK, YOUR HONOR, WE SHOULD WAIT UNTIL THAT -- IF THAT OCCURS, WAIT UNTIL THAT OCCURS. THEN, OF COURSE, THE PARTIES MAY BE BACK HERE HAVING A SIMILAR DEBATE. BUT I DON'T THINK THAT IT IS CONFUSING IN THE BROADER CONTEXT THAT THE WORD "WILLFULLY" IS USED. ESSENTIALLY IT'S NOT IN THE ELEMENTS OF CONSPIRACY OF INSTRUCTION 16 THAT WE WERE JUST TALKING ABOUT. IT IS TALKING ABOUT WILLFULLY PARTICIPATING AND WILLFULLY JOINING A CONSPIRACY. AND, AGAIN, I DON'T THINK THAT THAT ALONE WOULD INJECT JUROR CONFUSION. I THINK SOME PEOPLE COULD READ THAT TO SAY VOLUNTARILY AND NOT AGAINST YOUR WILL. I THINK THAT'S ONE DEFINITION THAT COULD BE. BUT I ALSO WANT TO JUST STEP BACK TO THE DEFINITION THAT THE DEFENSE IS PROPOSING, THE DANGER THERE IS HEIGHTENING THE MENS REA AND THERE IS A DEARTH OF NINTH CIRCUIT CASE LAW IN THIS AREA. I THINK BOTH SIDES ACKNOWLEDGE THAT BY NOT CITING MORE FOR THE COURT TO LOOK AT. BUT I WOULD ARGUE THAT THAT IS BECAUSE THE INTENT TO DEFRAUD AND THE SPECIFIC INTENT OF THIS CONTEXT IS SO WELL DEFINED, AND THE REASON THERE'S A DEARTH OF CASE LAW IS BECAUSE THE NINTH CIRCUIT HAS NOT FOLLOWED THESE OTHER CIRCUITS THAT HAVE REQUIRED A HIGHER MENS REA. THE NINTH CIRCUIT, AS SHOWN IN MILLER AND OTHER VERY RECENT CASES, KNOWS EXACTLY WHAT THE MENS REA IS IN THESE CONTEXTS AND HAS REPEATEDLY AFFIRMED IT. I'M NOT AWARE OF ANY DISTRICT COURT IN THIS DISTRICT, FOR EXAMPLE, THAT HAS PROVIDED A WILLFULLY INSTRUCTION IN THE CONSPIRACY TO COMMIT WIRE FRAUD CONTEXT WHEN THERE WASN'T ALSO A SECURITIES FRAUD, TAX FRAUD, REGULATORY FRAUD CASE THAT I'VE TALKED ABOUT. SO I JUST HAVE NOT SEEN A COURT IN THIS DISTRICT GIVE THIS INSTRUCTION WHEN IT'S JUST CONSPIRACY TO COMMIT WIRE FRAUD.
JUDGE DAVILA: THANK YOU. WHEN I WAS LOOKING AT THIS, IF I WERE TO GIVE THIS, I WOULD STOP AT LINE 4 AFTER THE WORD "FORBIDS" AND I WOULD NOT GIVE THE REST OF THOSE TWO SENTENCES, OR THE REST OF THAT SENTENCE AND THE FOLLOWING. I JUST DON'T THINK THAT'S APPROPRIATE. I DON'T THINK THAT CHANGES YOUR OPINION, MS. VOLKAR.
MS. VOLKAR: IT DOESN'T, YOUR HONOR. AND I JUST HAVE TO ADD THERE THAT WITH THE INTENT TO DO SOMETHING THE LAW FORBIDS, THAT GETS DANGEROUSLY CLOSE TO THE WILLFULLY DEFINITION FOR TAX FRAUD CASES, AND THE NINTH CIRCUIT HAS ACKNOWLEDGED THAT'S THE HIGHEST MENS REA ASSOCIATED WITH THESE REGULATORY FRAUD CASES. SO THERE'S JUST, THERE'S A LOT OF DANGER IN DOING THAT. IT'S HEIGHTENING THE MENS REA THAT THE JURY HAS TO FIND. IT WOULD BE INAPPROPRIATE GIVEN THE CHARGES IN THIS CASE.
JUDGE DAVILA: OKAY. WELL, THANK YOU FOR THE COMMENT. THIS IS ONE I MIGHT THINK ABOUT A LITTLE BIT. SO THANK YOU, THIS IS HELPFUL. LET'S MOVE TO 18. I THINK WE'RE ON 18. THIS IS 8.23, MODEL INSTRUCTION 8.23. THE SUGGESTED LANGUAGE FROM MS. HOLMES IS LINE 18. I'M NOT INCLINED TO GIVE THAT, MS. SAHARIA. DO YOU WANT TO BE HEARD?
MS. SAHARIA: I DON'T NEED TO BE HEARD ON THAT ONE, YOUR HONOR.
JUDGE DAVILA: ALL RIGHT. THANK YOU. LET ME JUST SAY I THINK THAT'S NEEDLESSLY DUPLICATIVE OF OTHER INFORMATION ALREADY PROVIDED. NOW WE'RE ON INSTRUCTION 19, WHICH IS THE PINKERTON. I'LL GIVE THAT OVER YOUR OBJECTION, MS. SAHARIA.
MS. SAHARIA: THANK YOU, YOUR HONOR.
JUDGE DAVILA: AND NOW WE'RE AT 20, WHICH IS WIRE FRAUD.
MS. VOLKAR: YOUR HONOR, I'LL TURN THE MIKE OVER TO MY COLLEAGUE, MR. LEACH.
JUDGE DAVILA: ALL RIGHT. THANK YOU. THIS IS MODEL 8.124, MODEL 8.124. I'M ON ECF PAGE 26, AND IT LOOKS LIKE THERE'S NO DISCUSSION ON THE FIRST PAGE, EXCUSE ME -- YES, 26. ON ECF 27 THERE'S SOME SUGGESTIONS HERE.
MS. SAHARIA: YOUR HONOR, IF I MAY BE HEARD ON THE FIRST PAGE JUST VERY BRIEFLY?
JUDGE DAVILA: SURE.
MS. SAHARIA: WE DID MISS ONE THING, WHICH IS IN THE FIRST PARAGRAPH, IT REFERS TO THE THIRD SUPERSEDING INDICTMENT. ELSEWHERE THE INSTRUCTIONS JUST SAY "THE INDICTMENT," WHICH WE THINK IS MORE APPROPRIATE.
JUDGE DAVILA: YES.
MS. SAHARIA: AND WE JUST MISSED THAT ONE REFERENCE, SO I WOULD REQUEST THAT IT JUST SAY "THE INDICTMENT."
JUDGE DAVILA: ANY OBJECTION TO THAT?
MR. LEACH: NO OBJECTION TO THAT, YOUR HONOR. THAT'S FINE.
JUDGE DAVILA: OKAY. ALL RIGHT. THROUGHOUT THE INSTRUCTIONS I -- I DID NOTE THAT AS WELL. THANK YOU. SO THROUGHOUT THE INSTRUCTIONS IT SHOULD JUST REFERENCE THE INDICTMENT.
MS. SAHARIA: THAT'S OUR PREFERENCE, YOUR HONOR.
JUDGE DAVILA: AS TO EACH INSTRUCTION WHERE IT APPEARS.
MR. LEACH: YES.
MS. SAHARIA: THE ONLY OTHER THING I WOULD NOTE ON THE FIRST PAGE IS, AGAIN, AS I DID ON CONSPIRACY, I DID WANT TO RESTATE FOR THE RECORD OUR STATUTE OF LIMITATIONS OBJECTION TO THESE VARIOUS COUNTS OF WIRE FRAUD, AND HAD THE COURT RULED DIFFERENTLY ON THE MOTION TO DISMISS, WE WOULD BE ASKING FOR A STATUTE OF LIMITATIONS INSTRUCTION TO THE JURY, WHICH WOULD FORECLOSE MOST OF THESE COUNTS. SO I JUST WANT TO RESTATE THAT OBJECTION FOR THE RECORD.
JUDGE DAVILA: OKAY. THANK YOU. WELL, LET ME JUST START OFF WITH MY OBSERVATIONS. ON PAGE -- DOCUMENT PAGE 26, ECF PAGE 27, LINES 1 AND 2, THE COURT IS INCLINED TO CHANGE THAT -- THOSE TWO AND, CANDIDLY, INCORPORATE THE LANGUAGE FROM PAGE 18, LINES 10 THROUGH 12, WHICH WOULD READ, "IN ORDER FOR MS. HOLMES TO BE FOUND GUILTY OF EACH SCHEME TO DEFRAUD, YOU MUST ALL UNANIMOUSLY AGREE WITH RESPECT TO EACH COUNT THAT THE GOVERNMENT HAS PROVED EACH OF THE FOLLOWING ELEMENTS BEYOND A REASONABLE DOUBT."
MS. SAHARIA: THAT'S FINE, YOUR HONOR.
MR. LEACH: COULD YOU SAY THAT ONE MORE TIME, YOUR HONOR?
JUDGE DAVILA: SURE. "IN ORDER FOR MS. HOLMES TO BE FOUND GUILTY OF EACH SCHEME TO DEFRAUD, YOU MUST ALL UNANIMOUSLY AGREE WITH RESPECT TO EACH COUNT THAT THE GOVERNMENT HAS PROVED EACH OF THE FOLLOWING ELEMENTS BEYOND A REASONABLE DOUBT," AND THEN THERE'S A COLON THERE.
MS. SAHARIA: SO COULD I TAKE BACK MY PRIOR --
JUDGE DAVILA: YES.
MS. SAHARIA: -- THAT'S FINE, YOUR HONOR? I DO THINK YOUR HONOR SAID "IN ORDER FOR MS. HOLMES TO BE FOUND GUILTY OF EACH SCHEME TO DEFRAUD," AND "SCHEME TO DEFRAUD" IS JUST ONE ELEMENT OF WIRE FRAUD. SO I THINK PERHAPS WHAT IT SHOULD SAY IS, "TO BE FOUND GUILTY OF EACH COUNT OF WIRE FRAUD, YOU MUST ALL UNANIMOUSLY AGREE THAT THE GOVERNMENT HAS PROVED." I THINK IT'S NOT QUITE CORRECT TO CALL IT "TO BE FOUND GUILTY OF A SCHEME TO DEFRAUD," BECAUSE THESE ARE INDIVIDUAL COUNTS OF WIRE FRAUD.
JUDGE DAVILA: WELL, I -- WHEN I LOOK BACK AT WHAT I TOLD YOU I'M QUOTING FROM, PAGE 18, LINES 10 THROUGH 12, IT ACTUALLY READS, "IN ORDER FOR MS. HOLMES TO BE FOUND GUILTY OF EITHER CHARGE."
MS. SAHARIA: CORRECT, BECAUSE THE CHARGES THERE ARE CONSPIRACY, AND HERE THE CHARGE IS NOT A SCHEME TO DEFRAUD, BUT WIRE FRAUD.
JUDGE DAVILA: WIRE FRAUD, RIGHT.
MS. SAHARIA: EXACTLY.
JUDGE DAVILA: I UNDERSTAND YOUR DISTINCTION THERE. MR. LEACH?
MR. LEACH: IF I UNDERSTAND THE COURT'S PROPOSAL, IT'S, "IN ORDER FOR MS. HOLMES TO BE FOUND GUILTY OF EACH COUNT OF WIRE FRAUD" OR CURRENTLY "SCHEME TO DEFRAUD, YOU MUST ALL UNANIMOUSLY AGREE WITH RESPECT TO EACH COUNT THAT THE GOVERNMENT HAS PROVED THE FOLLOWING," THAT WOULD BE FINE WITH THE GOVERNMENT, YOUR HONOR.
JUDGE DAVILA: OKAY. SO LET'S INSERT "COUNT OF WIRE FRAUD" IN PLACE OF "SCHEME TO DEFRAUD." MOVING DOWN. THE NEXT IS LINE 5. I WILL ACCEPT THE OMITTED FACTS.
MS. SAHARIA: MAY I BE HEARD ON THAT, YOUR HONOR?
JUDGE DAVILA: YES.
MS. SAHARIA: I'D LIKE TO MAKE TWO POINTS WITH RESPECT TO OMISSIONS, AND THIS PERMEATES THE INSTRUCTIONS, THESE OBJECTIONS.
JUDGE DAVILA: OKAY.
MS. SAHARIA: FIRST, AND I WANT TO BE CLEAR THAT I'M DISTINGUISHING A PURE OMISSION DUTY TO DISCLOSE THEORY FROM THE GOVERNMENT'S HALF-TRUTH THEORY, WHICH IS IN THE NEXT SENTENCE, WHICH WE HAVE NOT OBJECTED TO. BUT WHEN IT COMES TO A DUTY TO DISCLOSE, WHICH GIVES RISE TO A PURE OMISSION THEORY, I WANT TO TAKE THAT IN TWO PARTS. FIRST, WITH RESPECT TO THE PATIENT RELATED COUNTS, WE MOVED TO DISMISS THE INDICTMENT, AT THIS POINT I THINK ALMOST TWO YEARS AGO, INSOFAR AS AN ALLEGED OMISSIONS THEORY AND BASED ON A DUTY TO DISCLOSE, AND IN RESPONSE THE GOVERNMENT ARGUED THAT IT HAD ADEQUATELY ALLEGED AN OMISSIONS THEORY BASED ON A DUTY TO DISCLOSE ONLY AS TO INVESTORS. THAT'S AT ECF 266, PAGE 9. IT DID NOT ARGUE THAT MS. HOLMES OWED A DUTY TO DISCLOSE AS TO PATIENTS. THE COURT'S RULING ON THE MOTION TO DISMISS HELD THAT THE GOVERNMENT HAD ALLEGED A DUTY TO DISCLOSE ONLY AS TO INVESTORS. THAT'S AT ECF 330 AT PAGES 24 TO 26.
THE GOVERNMENT HAS NEVER CLAIMED IN THIS CASE IN RESPONSE TO ANY OF OUR ARGUMENTS WITH RESPECT TO OMISSIONS THAT MS. HOLMES COULD POSSIBLY HAVE AN INFORMAL FIDUCIARY TYPE OF RELATIONSHIP WITH PATIENTS, AND IT'S OUR POSITION THAT AS A RESULT, IF THE COURT IS GOING TO CHARGE AN OMISSIONS THEORY AT ALL, IT NEEDS TO BE LIMITED TO THE INVESTOR SCHEME AND NOT APPLIED TO THE PATIENT SCHEME, AND THAT WOULD REQUIRE SOME REVISIONS IF THE COURT IS GOING TO CHARGE ON OMISSIONS. THAT'S POINT ONE. NOW, WHEN IT COMES TO INVESTORS, THE COURT'S PRIOR RULING ON THE MOTION TO DISMISS ESTABLISHED ONLY THAT THE GOVERNMENT HAD ALLEGED FACTS GIVING RISE TO A DUTY TO DISCLOSE TO INVESTORS. WE, OF COURSE, STAND ON OUR OBJECTIONS WITH RESPECT TO THAT RULING. BUT IT WAS STILL INCUMBENT ON THE GOVERNMENT TO COME FORWARD WITH EVIDENCE AT TRIAL THAT WOULD PERMIT A CHARGE TO THE JURY ON THIS THEORY, AND WE SUBMIT THAT THE GOVERNMENT HAS FAILED TO DO THAT.
THE TEST FOR A DUTY TO DISCLOSE COMES FROM THE NINTH CIRCUIT'S DECISION IN UNITED STATES VERSUS SHIELDS, 844 F.3D 819. THAT CASE HOLDS THAT A DUTY TO DISCLOSE REQUIRES EITHER A FORMAL FIDUCIARY RELATIONSHIP OR AN INFORMAL TRUSTING RELATIONSHIP IN WHICH ONE PARTY ACTS FOR THE BENEFIT OF ANOTHER, AND INDUCES THE TRUSTING PART TO RELAX THE CARE AND VIGILANCE WHICH IT WOULD ORDINARILY EXERCISE. AND THERE ARE TWO PARTS TO THAT TEST. ONE, ONE PARTY MUST ACT FOR THE BENEFIT OF ANOTHER; AND THEN IT MUST INDUCE THE TRUSTING PARTY TO RELAX CARE AND VIGILANCE. ON THAT LATTER ELEMENT, THE TRUST NEEDS TO BE CREATED BY THE DEFENDANT'S POSITION IN THE TRANSACTION. THAT COMES FROM THE MILOVANOVIC CASE, 678 F.3D 713. NO EVIDENCE SATISFIES THIS TEST WHEN IT COMES TO THE INVESTORS. THERE'S NO EVIDENCE THAT MS. HOLMES WAS ACTING FOR THE BENEFIT OF POTENTIAL INVESTORS AS OPPOSED TO FOR THE BENEFIT OF THERANOS. THERE'S NO AGENCY TYPE OF RELATIONSHIP BETWEEN MS.
HOLMES AND POTENTIAL INVESTORS, NO EVIDENCE THAT HER POSITION IN THE RELATIONSHIP INDUCED INVESTORS TO RELAX THE CARE AND VIGILANCE THEY WOULD ORDINARILY EXERCISE. THE GOVERNMENT'S EVIDENCE ESTABLISHES NOTHING MORE THAN A NORMAL ARM'S LENGTH TRANSACTION, WHICH CANNOT SATISFY THE TEST FOR A DUTY TO DISCLOSE. EACH INVESTOR WITNESS WAS A SOPHISTICATED INVESTOR. TWO WERE LARGE NATIONAL COMPANIES. WALGREENS REPRESENTED IN ITS AGREEMENT WITH THERANOS THAT THERANOS WAS NOT ITS AGENT AND DID NOT HAVE AUTHORITY TO REPRESENT IT. THAT'S TX 372, PAGE 19. SAFEWAY MADE THE SAME EXACT REPRESENTATION, TX 387, PAGE 21. THE OTHER INVESTORS WERE WEALTHY, EXPERIENCED INVESTORS, ALL OF WHOM AFFIRMED THAT THEY WERE ACCREDITED INVESTORS WITHIN THE MEANING OF THE S.E.C. RULES, AND THEIR AGREEMENTS WITH THERANOS AFFIRMATIVELY DISCLAIMED AN INFORMAL FIDUCIARY RELATIONSHIP WITH THERANOS. SECTION 4.3 OF THE INVESTOR AGREEMENT, TX 1505 IS ONE EXAMPLE, BUT THEY'RE ALL THE SAME, AND I QUOTE, "SUCH INVESTOR OR ITS PURCHASER REPRESENTATIVE CAN PROTECT ITS OWN INTERESTS." EACH INVESTOR CERTIFIED TO THAT, THAT THEY WERE NOT RELYING ON MS. HOLMES TO PROTECT THEIR INTERESTS, THEY WERE PROTECTING THEIR OWN INTERESTS. THEY ALSO CERTIFIED THAT EACH INVESTOR, QUOTE, "HAS SUCH KNOWLEDGE AND EXPERIENCE IN FINANCIAL AND BUSINESS MATTERS SO THAT SUCH INVESTOR IS CAPABLE OF EVALUATING THE MERITS AND RISKS OF ITS INVESTMENT IN THE COMPANY."
MS. SAHARIA: SECTION 4.5, THEY WENT ON TO ACKNOWLEDGE THAT THEY WERE NOT NECESSARILY RECEIVING ALL INFORMATION FROM THERANOS. THEY ACKNOWLEDGED THAT THE DISCUSSIONS AND INFORMATION THAT THEY RECEIVED, QUOTE, "WERE INTENDED TO DESCRIBE CERTAIN ASPECTS OF THE COMPANY'S BUSINESS AND PROSPECTS, BUT WERE NOT NECESSARILY A THOROUGH OR EXHAUSTIVE DESCRIPTION." THEY WERE THUS ADMITTING THAT THERE WAS SOME INFORMATION THAT WAS NOT SHARED WITH THEM, IN OTHER WORDS, THAT THERE MAY BE OMISSIONS, AND WE SUBMIT THAT TO IMPLY A DUTY TO DISCLOSE ON THESE FACTS WITH THESE INVESTORS WOULD BE ERROR, IT WOULD REWRITE THE PARTIES' AGREEMENTS, AND IT WOULD CREATE A DUTY RESPECTIVELY THAT NEVER EXISTED IN REAL TIME. WE STRENUOUSLY OBJECT TO ANY INSTRUCTION ON A DUTY TO DISCLOSE OR OMISSIONS.
JUDGE DAVILA: ALL RIGHT. THANK YOU. MR. LEACH?
MR. LEACH: YOUR HONOR, I THINK THE LANGUAGE IN THE PROPOSED INSTRUCTION ON PAGE 27 FROM LINE 17 TO 21 CURES ALL OF THE CONCERNS THAT MS. SAHARIA IS EXPRESSING, AND SHE'S CITED TO EVIDENCE IN THE RECORD FROM WHICH A JURY MIGHT FIND THERE WAS NO DUTY, AND I SUSPECT THOSE ARE ARGUMENTS THAT WILL BE MADE IN CLOSING AND WILL GO TO THE WEIGHT OF THE EVIDENCE AND WHETHER THERE'S A SUFFICIENT FOUNDATION HERE. SO I THINK THE INSTRUCTION AT LEAST I ASSUME WE'RE GETTING -- THE PORTION I ASSUME WE'RE GETTING TO LAYS OUT FOR THE JURY EXACTLY WHAT IT NEEDS TO FIND FOR THIS OMISSIONS THEORY TO WORK. I DO THINK THAT THERE IS EVIDENCE IN THE RECORD THAT SUPPORTS AN OMISSIONS THEORY, SPECIFICALLY WITH RESPECT TO SOME OF THE EARLY INVESTORS, LIKE MR. EISENMAN AND MR. LUCAS WHO SAID THAT THEY HAD BEEN LONG-TIME SHAREHOLDERS WITH THERANOS, THEY GOT LIMITED INFORMATION FROM THEM, THEY GREW TO TRUST MS. HOLMES AND, FOR LACK OF A BETTER WORD, LET THEIR GUARD DOWN. SO I THINK THERE ARE FACTS FROM WHICH A JURY COULD FIND THIS PORTION OF THE INSTRUCTION SATISFIED, AND SO ON THAT BASIS I THINK IT'S APPROPRIATE TO GIVE AN OMISSIONS INSTRUCTION HERE. THEY'D MADE A LOT OF ARGUMENTS THAT GO TO THE WEIGHT OF WHETHER THE JURY CAN OR CAN'T FIND THAT, BUT THE INSTRUCTIONS AS THEY'RE WRITTEN ARE LAYING OUT THE PREDICATE FOR WHAT THE OMISSIONS THEORY WOULD ENTAIL. WITH RESPECT TO THE PATIENT POINT, I THINK WE'RE NOT ARGUING A DUTY TO DISCLOSE TO PATIENTS BASED ON OMISSIONS. THAT COULD BE CURED BY SIMPLY SAYING, "YOU MAY NOT CONVICT MS. HOLMES OF A WIRE THEORY BASED ON OMISSIONS WITH RESPECT TO COUNTS," WHATEVER THE PATIENT COUNTS ARE. SO I THINK THERE IS A WAY TO ADDRESS THAT.
JUDGE DAVILA: SO YOU AGREE WITH THE PATIENTS, THEY'RE NOT PART OF AN OMISSION?
MR. LEACH: I DO. I WOULD WANT TO BE CAREFUL ON HOW THAT IS ADDRESSED BECAUSE I THINK WE SHOULD HAVE ONE INSTRUCTION FOR WIRE FRAUD AND NOT MULTIPLE INSTRUCTIONS.
JUDGE DAVILA: SURE.
MR. LEACH: BUT WITH RESPECT TO THE INVESTORS, I DO THINK THERE ARE FACTS IN THE RECORD SUPPORTING THE ARGUMENT THAT INVESTORS LET THEIR GUARD DOWN IN PART BECAUSE OF THE TIGHTLY HELD NATURE OF INFORMATION THAT MS. HOLMES CONDUCTED HERSELF WITH, PARTLY BECAUSE OF THE LONG-TERM RELATIONSHIP WITH SOME OF THE INVESTORS WITH THERANOS, PART OF THE WAYS MS. HOLMES ENCOURAGED INVESTORS TO RELY SOLELY ON PUBLIC INFORMATION AS OPPOSED TO WHAT SHE WAS RECEIVING, AND I THINK THIS LANGUAGE AT 17 THROUGH 21 TELLS, ON PAGE 27, TELLS THE JURY EXACTLY WHAT THEY NEED TO FIND IN ORDER TO RELY ON OMITTED FACTS.
JUDGE DAVILA: PAGE 27 OF THE DOCUMENT, NOT THE ECF PAGE?
MR. LEACH: PAGE 27 AT ECF -- OH, PAGE 28 OF THE ECF, YES, THANK YOU.
JUDGE DAVILA: RIGHT. WHAT ABOUT MS. SAHARIA'S COMMENT THAT THE INVESTORS WERE UNDER A CONTRACTUAL RELATIONSHIP AND THAT THAT SHOULD OBVIATE ANY OTHER, ANY OTHER CONCERN ABOUT OMISSIONS BECAUSE THEY WERE UNDER CONTRACT?
MR. LEACH: I THINK THAT'S A WEIGHT ARGUMENT, YOUR HONOR, NOT A, IS IT APPROPRIATE TO INSTRUCT ON THIS? ALAN EISENMAN TESTIFIED THAT'S BOILER PLATE, THAT -- YOU KNOW, THAT WAS HIS TESTIMONY. AND SO HE'S SAYING, "YES, I SIGNED THAT, BUT BOTH PARTIES KNEW THAT THAT'S BOILER PLATE THAT WE HAVE TO DO TO DO THAT TRANSACTION." AND IT'S A WEIGHT ARGUMENT.
JUDGE DAVILA: DOES THERE -- AND, MS. SAHARIA, DOES THERE HAVE TO BE -- IF THERE WERE FURTHER REFINEMENT ON THIS, THAT THE JURY FIND THAT THEY ACTED ON RELIANCE OR SOME OTHER MEASURE FROM MS. HOLMES'S REPRESENTATION, THEN PERHAPS THAT WOULD ALLOW FOR AN OMISSION IF THEIR CONTRACTUAL BELIEF WAS OVERCOME BY REPRESENTATIONS, MISREPRESENTATIONS, I COULD SEE WHERE IT MIGHT, IT MIGHT LIE THEN.
MS. SAHARIA: I RESPECTFULLY THINK THAT WOULD NOT SATISFY THE SHIELDS TEST BECAUSE A DUTY TO DISCLOSE DOES NOT ARISE SIMPLY BECAUSE ONE PARTY IS MISLED BY ANOTHER. IF THAT WERE THE CASE, THERE WOULD BE A DUTY TO DISCLOSE ANY TIME THERE'S AN AFFIRMATIVE MISREPRESENTATION. THE SHIELDS TEST REQUIRES THAT THERE BE SOMETHING AKIN TO AN INFORMAL FIDUCIARY RELATIONSHIP, AND THAT IS IN WHICH ONE PARTY IS ACTING FOR THE BENEFIT OF THE OTHER PARTY, SO AGENCY TYPE SITUATIONS, WHICH WE SIMPLY DON'T HAVE HERE. AND I DON'T QUITE UNDERSTAND MR. LEACH'S COMMENT THAT INVESTORS LIKE MR. EISENMAN RELAXED THEIR DUTY OF CARE BECAUSE THEY KNEW SHE WASN'T GIVING THEM ALL OF THE INFORMATION. IF THEY KNEW SHE WASN'T GIVING THEM ALL OF THE INFORMATION, THEN HOW COULD THERE POSSIBLY BE AN INFORMAL FIDUCIARY RELATIONSHIP IN WHICH SHE HAD A DUTY TO DISCLOSE? THEY KNEW THAT THEY WERE NOT RECEIVING ALL OF THE INFORMATION. SO I DO NOT THINK THAT THERE IS EVIDENCE IN THE RECORD THAT SUPPORTS THE GIVING OF THIS INFORMATION. AND IT'S NO ANSWER TO SAY THAT, WELL, THE INSTRUCTION IS IN HERE, SO THE JURY WILL JUST FOLLOW IT, BECAUSE ANY INSTRUCTION NEEDS TO HAVE SOME EVIDENTIARY BASIS IN THE RECORD BEFORE IT'S GIVEN TO THE JURY, AND WE AGAIN SUBMIT THERE'S JUST NO EVIDENTIARY BASIS ON THIS RECORD TO INSTRUCT THE JURY THAT THEY COULD FIND THAT THESE INVESTORS, THESE SOPHISTICATED INVESTORS, HAD AN INFORMAL FIDUCIARY RELATIONSHIP WITH MS. HOLMES.
JUDGE DAVILA: WELL, MR. LEACH, IS THERE -- MY SENSE IS THAT THE GOVERNMENT'S THEORY IS THAT EVERYONE WAS MISLED. DESPITE THEIR SOPHISTICATION, THEY WERE MISLED AND OVERCOME.
MR. LEACH: YES, YOUR HONOR.
JUDGE DAVILA: AND IS THERE ANOTHER WAY TO GET YOUR ARGUMENT IN TO INSTRUCT THE JURY ON THAT ABSENT AN OMISSION? I'M TRYING TO SEE WHETHER -- IF IT'S A MISLEADING, IF THAT'S THE GOVERNMENT'S CASE, THAT MS. HOLMES MISLED, DOES THAT NECESSARILY CAPTURE OMISSION? OR IS IT REALLY MISSTATEMENT? OR ARE THEY THE SAME THING?
MR. LEACH: I'M NOT SURE IF THAT WOULD CAPTURE IT, YOUR HONOR, AND PART OF THE CONCERN HERE IS THAT I THINK THERE'S GOING TO BE SOME FORM OF ARGUMENT THAT THE DEFENDANT CONTRACTED HER WAY OUT OF FRAUD, THAT SHE HAD THESE LENGTHY INVESTOR AGREEMENTS THAT DESCRIBED ACCESS TO INFORMATION, AND BECAUSE I DID THAT, I GET A FREE PASS FOR EVERYTHING I SAY TO THEM, INCLUDING INVESTORS WITH WHOM SHE HAD LONG-TERM RELATIONSHIPS OVER THE COURSE OF MANY, MANY YEARS, AND, YOU KNOW, SHE WAS A FIDUCIARY TO HER SHAREHOLDERS IN THE SENSE OF HER SERVING AS THE CEO. SO I'M NOT SURE THE COURT'S PROPOSAL WOULD SATISFY THE GOVERNMENT. AND AGAIN, THE JURY IS BEING INSTRUCTED ON WHAT IT'S REQUIRED TO FIND FOR THIS OMISSIONS THEORY TO WORK, AND IT CAN ACCEPT -- YOU KNOW, IF IN THE DEFENSE CLOSING IF THEY'RE SAYING THIS WAS NOT A FIDUCIARY RELATIONSHIP, LOOK AT THE CONTRACTS, THE JURY MAY ACCEPT THAT. THE JURY MAY ACCEPT ALAN EISENMAN'S TESTIMONY THAT, "YES, I SIGNED THIS, BUT I TRUSTED MS. HOLMES AND MR. BALWANI, THAT THEY WEREN'T LEADING ME ASTRAY HERE." SO I THINK SO LONG AS THE COURT IS LAYING OUT WHAT THE OMISSIONS THEORY REQUIRES, IT'S AN APPROPRIATE INSTRUCTION ON THE LAW AND THE PARTIES CAN ARGUE THE WEIGHT OF THE FACTS AS THEY SEE THEM THERE.
JUDGE DAVILA: SO NOTHING PRECLUDES MS. SAHARIA FROM ARGUING TO THE JURY, WITH YOUR INCLUSION HERE, NOTHING PRECLUDES HER FROM ARGUING TO THE JURY THAT THERE IS NO OMISSIONS IN THIS CASE BECAUSE LOOK AT THE CONTRACT, AND THAT'S A FACTUAL FINDING THAT THEY CAN MAKE, THAT THE CONTRACT SUGGESTS THAT THERE'S NO FIDUCIARY RELATIONSHIP.
MR. LEACH: YES.
JUDGE DAVILA: AND THEREFORE, IT DOESN'T LIE. AND WHAT IS THE OMISSION THEORY THEN? IS IT THAT MS. HOLMES OMITTED THE FINANCIAL -- THE TRUE FINANCIAL STATUS OF THE BUSINESS, THE TRUE BUSINESS RELATIONSHIPS WITH THIRD PARTIES? IS THAT THE OMISSION, OR IS THAT A MISREPRESENTATION? I'M BACK TO THAT DISTINCTION.
MR. LEACH: I THINK THERE ARE BOTH FALSE REPRESENTATIONS AND OMISSIONS. I THINK ONE COULD ARGUE THAT HAVING A DEMO WITH THE MINILAB AS THE DEVICE IN THE ROOM AND SAYING, HERE IS HOW WE DO PATIENT TESTING, THAT THAT IS A DECEITFUL HALF-TRUTH IF THEY'RE DOING TESTING WITH THIRD PARTY SIEMENS MACHINES. I THINK WITHOUT THE DEVICE THERE, OR WITHOUT SOME OTHER STATEMENTS SIMPLY OMITTING THE FACT THAT THEY'RE USING MODIFIED THIRD PARTY DEVICES MIGHT BE A PURE OMISSION. SO I THINK IT'S A BLEND OF FALSE STATEMENTS, HALF-TRUTHS, WHICH DO BY THEMSELVES GIVE RISE TO A DUTY TO DISCLOSE, AND, IN SOME CIRCUMSTANCES, PURE OMISSIONS, YOUR HONOR.
JUDGE DAVILA: SO, MS. SAHARIA, WHY DOESN'T LINE 17, WHY DON'T THOSE ALLOW YOU TO ARGUE SUCH THAT YOU'RE PROTECTED?
MS. SAHARIA: WELL, THEY DO ALLOW US TO ARGUE, YOUR HONOR. BUT, AGAIN, I COME BACK TO THE POINT THAT THE COURT SHOULD NOT BE INSTRUCTING ON A THEORY THAT LACKS EVIDENTIARY BASIS, AND I STILL HAVEN'T HEARD ANY EVIDENTIARY BASIS FOR THERE BEING AN INFORMAL FIDUCIARY RELATIONSHIP. IT'S NOT JUST ENOUGH THAT ONE PARTY BELIEVES THE OTHER, OR THAT ONE PARTY TRUSTS THE OTHER. THAT'S NOT WHAT THE SHIELDS TEST STATES. IT STATES THAT ONE PARTY NEEDS TO BE ACTING FOR THE OTHER, FOR THE BENEFIT OF THE OTHER, AND THAT'S NOT THE KIND OF RELATIONSHIP THAT WE HAVE HERE. SO I JUST COME BACK TO THAT. THERE'S NO EVIDENTIARY BASIS FOR THIS. MR. LEACH'S EXAMPLES WERE ALL HALF-TRUTH TYPE OF EXAMPLES TO IMPLY -- THAT'S DISTINCT. WE'RE NOT TALKING ABOUT HALF-TRUTHS. WE'RE TALKING ABOUT A PURE DUTY TO DISCLOSE. THE ARGUMENT THAT THEY MIGHT MAKE IN CLOSING THAT MS. HOLMES HAD A DUTY TO TELL INVESTORS EVERY SINGLE THING ABOUT THE COMPANY, EVEN IF SHE DIDN'T SAY ANYTHING ABOUT THOSE ASPECTS OF THE COMPANY, THAT'S THE DANGER OF A DUTY TO DISCLOSE THEORY IN THIS CASE.
JUDGE DAVILA: MR. LEACH, ANYTHING FURTHER?
MR. LEACH: I DON'T BELIEVE IT'S THE GOVERNMENT'S INTENTION TO ARGUE THAT SHE HAD A DUTY TO DISCLOSE EVERY SINGLE FACT ABOUT THERANOS, AND WE SUBMIT THIS INSTRUCTION IS APPROPRIATE AS WORDED AND THE INCLUSION OF LINES 17 THROUGH 21 GIVE THE DEFENSE THE LATITUDE TO ARGUE THE GOVERNMENT SIMPLY HASN'T MET ITS BURDEN THERE.
JUDGE DAVILA: ALL RIGHT. THANK YOU. I'M GOING TO LOOK AT THIS SOME MORE, AND I APPRECIATE YOUR COMMENTS ON THIS.
MS. SAHARIA: THANK YOU, YOUR HONOR.
JUDGE DAVILA: LET'S SEE.
MS. SAHARIA: I THINK WE'RE UP TO A SCHEME TO DEFRAUD. THIS IS LINE 5 ON ECF PAGE 27. THIS IS THE LANGUAGE THAT THE COURT INCLUDED IN THE PRELIMINARY INSTRUCTIONS.
JUDGE DAVILA: I WAS LOOKING AT LINE 7, EXPRESSIONS OF OPINIONS, ASPIRATIONS, ET CETERA. THAT'S WHAT MS. HOLMES IS ASKING. AND I'M WONDERING ABOUT, IS THIS RELATED TO GOOD FAITH, A GOOD FAITH INSTRUCTION?
MS. SAHARIA: WELL, IT IS, YOUR HONOR. INSOFAR AS WE TALKED ABOUT LAST WEEK, WE THINK THERE IS NINTH CIRCUIT CASE LAW THAT I ACKNOWLEDGE SAYS THAT THESE KIND OF PUFFERY INSTRUCTIONS ARE NOT NECESSARY WHEN THE COURT INSTRUCTS ON THE CONCEPT OF GOOD FAITH. AND SO I ACKNOWLEDGE THAT IF THE COURT WERE TO GIVE A GOOD FAITH, I WOULD HAVE A HARD TIME STANDING HERE AND ASKING THE COURT TO ALSO GIVE THIS INSTRUCTION, AND IT'S OUR PREFERENCE THAT THE COURT GIVE A GOOD FAITH INSTRUCTION AS OPPOSED TO THIS ONE.
JUDGE DAVILA: I SEE. THAT WAS MY NEXT QUESTION, WHAT IS YOUR PREFERENCE?
MS. SAHARIA: THAT'S OUR PREFERENCE, BUT WE'LL TALK ABOUT WHAT THE GOOD FAITH INSTRUCTION SAYS. I DON'T WANT TO CONCEDE THAT ALL THE WAY YET.
JUDGE DAVILA: SO JUST RETURNING TO LINE 5, I'M SORRY. THE COURT WILL GIVE, INTENDS TO GIVE THE HIGHLIGHTED, THAT ONE SENTENCE THAT ENDS AT LINE 6, "A SCHEME TO DEFRAUD IS A DECEPTIVE SCHEME TO DEPRIVE A PERSON OF MONEY OR PROPERTY." AND THEN THERE'S NO OBJECTION TO THE FOLLOWING SENTENCE. WE WERE TALKING ABOUT THIS EXPRESSION, WHICH IS -- AND THAT'S PULLED, I THINK -- YOUR FOOTNOTE THERE CITES FROM CIVIL CASES. AND I THINK THOSE ARE ALL CIVIL CASES --
MS. SAHARIA: THAT'S CORRECT.
JUDGE DAVILA: -- THAT CITE TO. MR. LEACH, ANYTHING ON THIS?
MR. LEACH: CIVIL CASES INCLUDING A LANHAM ACT CASE AND NOT A WIRE FRAUD CASE, AND I THINK THE AUTHORITY CITED IS A VERY THIN READ FOR TINKERING WITH THE MODEL HERE. I ALSO THINK IT'S ARGUMENTATIVE AND SIMPLY NOT NECESSARY.
JUDGE DAVILA: OKAY. WELL, I LOOKED AT THIS AND I'M NOT INCLINED TO GIVE THIS. AND I KNOW WE'LL HAVE A DISCUSSION ABOUT GOOD FAITH IN A MOMENT. THIS IS REALLY -- WHAT I'M CAPTURING HERE IS THE EXPRESSIONS OF OPINION, I THINK ASPIRATIONS AND THOSE TYPES OF THINGS THAT WE'VE HEARD ABOUT. LET'S SEE. MOVING DOWN ON LINE 9 NOW, FACTS OMITTED, WE'LL HAVE TO DEAL WITH THAT.
MS. SAHARIA: THAT'S THE SAME ISSUE.
JUDGE DAVILA: RIGHT, RIGHT. WE'LL HAVE TO DEAL WITH THAT AND I'LL THINK ABOUT THAT. LINE 10, FACTS -- EXCUSE ME, "STATEMENTS ARE MATERIAL IF," AND THEN THE BLUE IS MS. HOLMES'S.
MS. SAHARIA: CORRECT, YOUR HONOR. WE JUST THINK IT'S IMPORTANT TO CONVEY TO THE JURY THAT IT CAN CONSIDER THE WHOLE CONTEXT OF THE STATEMENTS TO DETERMINE THEIR MATERIALITY, AND THAT COMES FROM THE DISTRICT COURT'S OPINION IN BOGUCKI, WHICH IS A GOOD EXAMPLE OF THE COURT CONSIDERING THE CONTEXT IN WHICH STATEMENTS WERE MADE TO DETERMINE WHETHER OR NOT THEY WERE MATERIAL.
MR. LEACH: I THINK IT UNNECESSARILY DEVIATES FROM THE MODEL, YOUR HONOR. THE BOGUCKI CASE, THAT'S A HOLDING ON A RULE 29 MOTION, NOT AN ARTICULATION OF THE APPROPRIATE JURY INSTRUCTION. I THINK THE MODEL CAPTURES WHAT IS REQUIRED, WHICH IS THAT THE STATEMENTS HAD A NATURAL TENDENCY TO INFLUENCE OR WERE CAPABLE OF INFLUENCING A PERSON TO PART WITH MONEY OR PROPERTY. SO I DON'T THINK IT'S NECESSARY TO MAKE ANY CHANGES THERE.
JUDGE DAVILA: THANK YOU. I'M INCLINED TO STICK WITH THE MODEL ON THIS, MS. SAHARIA, AND NOT GIVE YOUR HIGHLIGHTED SUGGESTION THERE.
MS. SAHARIA: UNDERSTOOD.
JUDGE DAVILA: AND IT WILL CONTINUE TO THE END. NOW WE'RE ON -- I BELIEVE WE'RE ON LINE 12.
MS. SAHARIA: CORRECT. SO I THINK THE PARTIES ARE FAIRLY CLOSE HERE. SO THE MODEL INSTRUCTION IS "THE INTENT TO DECEIVE AND CHEAT." IT USED TO BE "CHEAT OR DECEIT," AND YOUR HONOR KNOWS IT WAS NOW CHANGED TO "DECEIVE AND CHEAT." THE WORD "CHEAT" BY ITSELF I ACTUALLY THINK IS RATHER VAGUE AND UNHELPFUL TO A JURY. SO THE PARTIES HAVE BOTH AGREED TO SAY, "THAT IS, TO DEPRIVE SOMEONE OF MONEY OR PROPERTY" TO HELP THE JURY UNDERSTAND WHAT "CHEAT" MEANS. THE DISPUTE IS BETWEEN THE GOVERNMENT'S PROPOSAL, WHICH IS TO SAY "MEANS OF DECEPTION," AND OUR PROPOSAL, WHICH IS TO SAY, "DECEIVING THAT PERSON."
JUDGE DAVILA: RIGHT.
MS. SAHARIA: AND THE REASON FOR "DECEIVING THAT PERSON" IS TO INCORPORATE THE CONVERGENCE PRINCIPLE THAT WE'VE TALKED ABOUT IN THIS CASE BEFORE, WHICH COMES FROM THE NINTH CIRCUIT'S DECISION IN UNITED STATES CIRCUIT LEW, L-E-W, AND THAT'S AN IMPORTANT CONCEPT IN THIS CASE WHERE WE DO HAVE CLAIMS THAT REPRESENTATIONS WERE MADE TO INDIVIDUALS WHO WERE NOT THE PERSON WHO WAS BEING DEPRIVED OF MONEY OR PROPERTY, IN THIS CASE THE PAYING PATIENTS, AND WE HAD A LOT OF DISCUSSION AROUND THE FACT THAT THE GOVERNMENT, SOME OF ITS ALLEGATIONS RELATE TO REPRESENTATIONS MADE PERHAPS TO DOCTORS AND NOT TO PATIENTS. SO WE JUST THINK IT'S IMPORTANT FOR THE JURY TO HAVE LANGUAGE THAT TIES THE PERSON BEING DEPRIVED TO THE DECEPTION TO INCORPORATE THE CONVERGENCE PRINCIPLE OF LEW.
JUDGE DAVILA: LEW WAS THE IMMIGRATION ATTORNEY, I BELIEVE.
MS. SAHARIA: CORRECT.
JUDGE DAVILA: AND THE REAL DEFRAUDED PERSON WAS NOT THE CLIENTS, BUT THE GOVERNMENT, I THINK.
MS. SAHARIA: THAT'S RIGHT, YOUR HONOR.
JUDGE DAVILA: RIGHT.
MR. LEACH: YOUR HONOR, I THINK THE COURT CURED THE LEW PROBLEM, TO THE EXTENT THAT THE COURT SAW IT, WITH ITS ORDER ON THE MOTION TO DISMISS WHERE, YOU KNOW, THE COUNTS ON THE PATIENTS ARE COUNTS TO DEFRAUD PAYING PATIENTS. AND IN A SCHEME TO DEFRAUD, YOU CERTAINLY CAN USE MEANS OF DECEPTION DIRECTED AT A THIRD PARTY IF THE VICTIM IS CLOSELY CONNECTED TO THAT THIRD PARTY. YOU KNOW, I THINK THIS WOULD GIVE A, AN UNDULY NARROW VIEW OF HOW WIRE FRAUD CAN BE COMMITTED. I WOULD ALSO SAY THE MODEL INSTRUCTION STOPS AT, "THAT IS, THE INTENT TO DECEIVE AND CHEAT." WE'RE ALREADY GETTING INTO LAND HERE WHERE WE'RE EXPANDING FROM THE MODEL, AND I THINK IF WE'RE GOING TO DO THAT, "MEANS OF DECEPTION" IS CONSISTENT WITH THE LANGUAGE OF "SCHEME TO DEFRAUD" AND "OBTAIN MONEY OR PROPERTY BY MEANS OF FALSE AND FRAUDULENT MISREPRESENTATIONS." THERE'S NO LEW PROBLEM THE WAY THE CASE IS CURRENTLY CHARGED, AND WE WOULD URGE THE COURT, IF IT'S GOING TO GO BEYOND THE MODEL, TO USE "MEANS OF DECEPTION."
JUDGE DAVILA: ALL RIGHT. THANK YOU. I LOOKED AT THIS AND I APPRECIATE IT. I WILL GIVE THE "MEANS OF DECEPTION." I THINK THAT'S THE APPROPRIATE INSTRUCTION. SO IT WOULD READ, "THIRD, MS. HOLMES ACTED WITH THE INTENT TO DEFRAUD, THAT IS, THE INTENT TO DECEIVE AND CHEAT. THE INTENT TO DECEIVE AND CHEAT MEANS AN INTENT TO DEPRIVE SOMEONE OF MONEY OR PROPERTY BY MEANS OF DECEPTION."
MS. SAHARIA: THAT'S BETTER THAN THE TO THAT IS, WHICH WE DIDN'T CATCH.
MR. LEACH: WE AGREE, YOUR HONOR.
JUDGE DAVILA: ALL RIGHT. THANK YOU.
MS. SAHARIA: I STILL STAND ON MY OBJECTION TO "DECEIVING THAT PERSON" -- TO NOT INCLUDING "DECEIVING THAT PERSON," BUT I AGREE WITH THE COURT'S GRAMMATICAL REPHRASING OF THE SENTENCE.
JUDGE DAVILA: ALL RIGHT. THANK YOU, AND YOUR OBJECTION IS NOTED. NEXT WE'RE DOWN TO, I THINK IT'S LINE 17. AND I WANTED TO ASK, IS THE GOVERNMENT GOING TO ARGUE THE UNPROFITABILITY OR THE FAILURE OF A COMPANY IN ANY MANNER? I SEE THAT IS SOMEWHAT CAPTURED HERE IN THE HIGHLIGHTED, "A SCHEME TO DEFRAUD MUST MISREPRESENT AN ESSENTIAL ELEMENT OF THE BARGAIN. A SCHEME TO DEFRAUD IS NOT TO BE INFERRED SOLELY BECAUSE A VENTURE TURNED OUT TO BE UNPROFITABLE OR FAILED." AND I JUST -- MR. LEACH, CAN YOU JUST HELP ME OUT ON THAT? IS THAT SOMETHING THAT YOU'RE GOING TO DO? AND IF YOU'RE NOT, THEN WHY DO WE NEED THIS IN THE INSTRUCTIONS IS MY THOUGHT.
MR. LEACH: I DON'T THINK WE NEED THIS IN THE INSTRUCTIONS, YOUR HONOR. IT IS NOT OUR INTENTION TO ARGUE THE FACT THAT THERANOS FAILED, BY ITSELF, IS SUFFICIENT EVIDENCE TO FIND WIRE FRAUD. WE INTEND TO ARGUE THAT MS. HOLMES MADE FALSE REPRESENTATIONS TO INVESTORS AND PATIENTS TO INDUCE THEM INTO THE TRANSACTIONS. WE WORRY ABOUT THAT -- SO IT'S NOT OUR INTENTION TO SAY THAT SIMPLY BECAUSE THERANOS FAILED, YOU MAY CONVICT. CERTAINLY THE FACT THAT THERANOS FAILED IS OUT THERE, BUT IT'S NOT OUR INTENTION TO MAKE ANY ARGUMENT THAT THAT FACT, STANDING ALONE, IS A BASIS FOR A CONVICTION. WITH RESPECT TO THE FIRST SENTENCE, YOUR HONOR, MY CONCERN ABOUT THIS IS, A, IT'S IMPORTING CONCEPTS FROM OUT OF CIRCUIT CASES AND I FEEL THAT WE'RE STRAYING FAR FROM WHAT THE NINTH CIRCUIT SAID HERE. BUT MORE FUNDAMENTALLY, AND THIS GOES BACK TO SOME OF THE CONTRACTS, I'M WORRIED THE DEFENSE IS GOING TO ARGUE, YOU KNOW, THE BARGAIN HERE WAS YOU'RE MAKING A SPECULATIVE INVESTMENT, YOU HAVE ALL OF THE ACCESS YOU POSSIBLY COULD HAVE, AND THEREFORE, YOU WEREN'T DEFRAUDED EVEN THOUGH OTHER REPRESENTATIONS WERE MADE TO YOU. SO I THINK THIS LANGUAGE HERE IS A LITTLE BIT DANGEROUS. AND IT IS NOT OUR INTENTION TO ARGUE THAT WIRE FRAUD IS ANYTHING OTHER THAN WHAT THE COURT HAS OUTLINED IN THE INSTRUCTIONS ABOVE. SO WE THINK THIS IS UNNECESSARY, IT'S POSSIBLY MISLEADING AND COULD CONFUSE THE JURY THAT SOMEHOW, BECAUSE OF SOME CONTRACTUAL LANGUAGE ABOUT THE SPECULATIVE NATURE OF AN INVESTMENT, THAT INVESTORS GOT WHAT THEY BARGAINED FOR AND YOU SHOULD FIND THAT THEY WEREN'T DEFRAUDED.
MS. SAHARIA: SO IF I MAY ADDRESS THE FIRST SENTENCE, YOUR HONOR?
JUDGE DAVILA: YES.
MS. SAHARIA: OUR CONCERN WITH THE FIRST SENTENCE REALLY GOES NOT TO THE INVESTOR COUNTS, BUT TO THE PATIENT COUNTS. AND THIS IS INTENDED TO REFLECT THE PRINCIPLE WHICH WE'VE ADDRESSED BEFORE, WHICH IS THAT MERELY TRICKING SOMEONE INTO ENTERING INTO A TRANSACTION IS NOT WIRE FRAUD IF THEY GOT WHAT THEY PAID FOR. YOU HAVE TO INDUCE THEM TO ENTER THE TRANSACTION BY MISREPRESENTING AN ESSENTIAL ELEMENT OF THE BARGAIN. HERE, MANY PATIENTS RECEIVED ACCURATE AND RELIABLE BLOOD TESTS. AND SO THE GOVERNMENT CANNOT PROVE WIRE FRAUD BY SHOWING THAT THOSE PATIENTS MIGHT NOT HAVE BOUGHT A THERANOS BLOOD TEST IF THEY SIMPLY KNEW X, Y, OR Z, IF WHAT THEY GOT WAS AN ACCURATE AND RELIABLE TEST. AND BECAUSE MANY PATIENTS DID GET ACCURATE AND RELIABLE TESTS --
JUDGE DAVILA: BECAUSE? I'M SORRY?
MS. SAHARIA: BECAUSE MANY PATIENTS DID RECEIVE ACCURATE AND RELIABLE TESTS, THERE WAS NOTHING MISREPRESENTED TO THEM ABOUT AN ESSENTIAL ELEMENT OF THE BARGAIN. THAT'S OUR CONCERN ABOUT -- WITH THE FIRST SENTENCE AND THAT'S WHY WE THINK IT'S IMPORTANT TO INCLUDE THAT SENTENCE HERE.
JUDGE DAVILA: WAS THERE EVIDENCE THAT PAYING PATIENTS RECEIVED INACCURATE TESTS?
MS. SAHARIA: I'M SURE THE GOVERNMENT WILL, WILL CLAIM THAT THERE IS EVIDENCE THAT SOME PATIENTS RECEIVED INACCURATE TESTS.
JUDGE DAVILA: DOES THAT HAVE ANY EFFECT ON WHETHER OR NOT THIS SHOULD STAY IN OR OUT?
MS. SAHARIA: I DON'T THINK SO, YOUR HONOR, BECAUSE AS I RECALL, THEY HAVE PROVEN ONLY PERHAPS TWO OF THOSE TESTS OUT OF MANY MILLIONS.
MR. LEACH: WELL, WE PROVED THAT ALL OF THE TESTS ON THE EDISON DEVICE WERE VOIDED, YOUR HONOR. SO I'M NOT SURE IT'S A DEFENSE TO THE PARTICULAR WIRE FRAUD CLAIMS THAT ARE CHARGED HERE AGAINST PATIENTS TO SAY THAT THERE WERE OTHERS WHO RECEIVED COMPLETELY ACCURATE RESULTS. AND SO IT'S NOT THE INTENTION OF THE GOVERNMENT TO ARGUE ANYTHING INCONSISTENT WITH WHAT IS IN THE BLUE HERE. I REALLY THINK IT'S UNNECESSARY AT THIS POINT. IF THE DEFENSE HAS CONCERNS AFTER HEARING THE GOVERNMENT'S ARGUMENT, I THINK WE CAN ADDRESS THAT THEN. BUT I JUST THINK THAT WE'RE ADDING TO ALREADY A LENGTHY INSTRUCTION IN WAYS THAT DON'T HAVE NINTH CIRCUIT SUPPORT OR CITES, AND REALLY ARE ADDRESSING PROBLEMS THAT I DON'T THINK ARE GOING TO ARISE.
JUDGE DAVILA: OKAY.
MS. SAHARIA: THAT'S IT, YOUR HONOR.
JUDGE DAVILA: ALL RIGHT. THANK YOU. I JUST SEE THIS AS UNNECESSARY, MS. SAHARIA. I DON'T THINK THIS IS NECESSARY TO CAPTURE -- I THINK THE BALANCE OF THE INSTRUCTIONS ALLOW BOTH PARTIES TO ARGUE THE EVIDENCE, AND I'M NOT GOING TO GIVE THIS. TURNING THEN TO THE YELLOW HIGHLIGHTING AT THE BOTTOM OF LINE 19, AND THEN CARRYING OVER TO PAGE 27, ECF 28, THAT LARGE PARAGRAPH, I WASN'T INCLINED TO GIVE THIS, BUT I'M -- MR. LEACH, I'M HAPPY TO HEAR FROM YOU IF YOU WOULD LIKE.
MR. LEACH: YOUR HONOR, THIS IS DRAWN DIRECTLY FROM AN INSTRUCTION THAT WAS GIVEN IN THE WOODS CASE AND APPROVED BY THE NINTH CIRCUIT. I'LL SUBMIT ON OUR PRIOR ARGUMENTS, BUT I THINK THIS IS AN ACCURATE STATEMENT OF THE LAW. BUT I'LL STAND ON OUR PRIOR ARGUMENTS.
JUDGE DAVILA: OKAY.
MS. SAHARIA: I'M HAPPY TO ADDRESS WHY THOSE CASES WERE NOT ON POINT, BUT IF I'M ALREADY AHEAD, I'M NOT GOING TO WASTE THE COURT'S TIME ON THIS ONE. IF YOUR HONOR WANTS ARGUMENT ON THAT ONE, I'M HAPPY TO OFFER IT.
JUDGE DAVILA: THERE'S THAT VICTORY FROM THE JAWS --
MS. SAHARIA: THAT'S RIGHT.
JUDGE DAVILA: OR DEFEAT FROM THE JAWS OF VICTORY, YES, INDEED. I WAS LOOKING AT THE LAST SENTENCE ON LINE 5 AND WONDERING WHETHER OR NOT THAT SHOULD BE MODIFIED IN SOME MANNER.
MS. SAHARIA: DO YOU MEAN THE FINAL HIGHLIGHTED SENTENCE? I'M NOT SURE WHICH SENTENCE.
JUDGE DAVILA: "YOU, AS MEMBERS OF THE JURY, DO NOT NEED TO ALL AGREE ON WHICH STATEMENTS WERE FALSE." I'M LOOKING AT THIS AS KIND OF A UNANIMITY TYPE. DO WE NEED TO ADD SOMETHING THERE?
MS. SAHARIA: I THINK IF YOU'RE GOING TO INCLUDE THAT LANGUAGE, THEN THE COURT SHOULD ALSO INCLUDE OUR UNANIMITY LANGUAGE AT THE BOTTOM OF THE PAGE, WHICH IS THE BLUE LANGUAGE, WHICH MAKES CLEAR THAT THEY DO NEED TO BE UNANIMOUS ON THE PARTICULAR SCHEME, EVEN IF THEY DON'T NEED TO BE UNANIMOUS ON THE PARTICULAR STATEMENT. BUT I THINK PERHAPS A BETTER APPROACH IS TO PERHAPS NOT INCLUDE EITHER OF THOSE TWO SENTENCES. I DON'T THINK THEY'RE NECESSARY.
JUDGE DAVILA: SO I LOOKED AT THESE, AND THAT'S EXACTLY WHAT I WAS WONDERING, IF I COLLAPSED BOTH OF THESE TOGETHER, IF WE STARTED WITH LINES 22 THROUGH 23, AND THEN ADDED LINES 5 THROUGH 7. BUT PERHAPS I'M OVER WORDSMITHING.
MR. LEACH: YOUR HONOR, THE GOVERNMENT WOULD BE FINE WITH THAT. WE -- I DON'T THINK A SPECIFIC UNANIMITY INSTRUCTION IS REQUIRED HERE. AND IF THE COURT WERE INCLINED TO GIVE 22 THROUGH 23, WE THINK IT'S IMPORTANT TO ALSO INCLUDE 5 THROUGH 7. BUT I THINK THE COURT'S EARLIER --
JUDGE DAVILA: RIGHT.
MR. LEACH: -- PROPOSAL EXPRESSES THE JURY MUST UNANIMOUSLY FIND. SO THE GOVERNMENT WOULD BE FINE EITHER WITH NO INSTRUCTION THERE AT ALL, OR THE BLUE PART WITH THOSE TWO LINES FROM THE YELLOW ADDED.
MS. SAHARIA: I THINK I'M FINE WITH NEITHER OF THOSE INSTRUCTIONS, BECAUSE AS MR. LEACH INDICATED, THE COURT DID, I THINK, BEEF UP THE UNANIMOUS PART AT THE BEGINNING OF THIS INSTRUCTION.
JUDGE DAVILA: RIGHT. OKAY. THANK YOU. I APPRECIATE THAT THEN. I'M NOT GOING TO GIVE LINES 1 THROUGH 7 AS I INDICATED. AND I'M NOT INCLINED TO GIVE AS WELL, LET'S SEE, THE HIGHLIGHTED IN LINES 9 THROUGH 12, MR. LEACH. I JUST DON'T THINK THAT'S NECESSARY. I'M HAPPY TO HEAR FROM YOU IF YOU WISH.
MR. LEACH: I DO HAVE SOME CONCERNS HERE, YOUR HONOR. IN ONE OF THE WIRES -- ONE OF THE CHARGED WIRES IS A PAYMENT TO AN ADVERTISING COMPANY. ONE OF THE CHARGED WIRES IS, IF MEMORY SERVES, A PHONE CALL ABOUT A TEST. I DON'T WANT THE JURY TO BE CONFUSED THAT FOR A "FRAUD CLAIM," IT NEEDS TO FIND THAT THE WIRE ITSELF WAS FALSE AND MISLEADING. IT'S A WIRE THAT IS IN FURTHERANCE OF AN ESSENTIAL PART OF THE SCHEME. SO THIS IS LANGUAGE THAT HAS BEEN GIVEN BY THE COURT BEFORE IN PRIOR INSTRUCTIONS.
JUDGE DAVILA: RIGHT.
MR. LEACH: FROM OUR LAST DIALOGUE, I HEARD ARGUMENT THAT THIS LANGUAGE WAS OBJECTIONABLE BECAUSE OF THE ARGUMENT IT DOESN'T MATTER, OR THE LANGUAGE IN LINE 11 WHERE IT SAYS IT DOES NOT MATTER. I THINK WE WOULD BE EQUALLY FINE WITH LANGUAGE, "NOR MUST YOU FIND THAT THE SCHEME OR PLAN WAS SUCCESSFUL," AND ADDING THE WORDS "ESSENTIAL PART OF THE SCHEME" IN THE LINE ABOVE IN 10. SO I THINK THIS IS GOING TO TWO THINGS: ONE, THE ARGUMENT THAT MS. HOLMES -- THIS ADDRESSES AN ARGUMENT THAT I THINK WE'RE GOING TO HEAR THAT MS. HOLMES DIDN'T PROFIT IN ANY WAY FROM THIS, AND I THINK THE JURY SHOULD NOT BE MISLED THAT THAT'S SOMETHING THAT THEY NEED TO FIND IN ORDER TO FIND THAT WIRE FRAUD OCCURRED HERE; AND WE ALSO WANT TO COMBAT AGAINST THE CONCERN THAT, YOU KNOW, WHAT WOULD OTHERWISE BE INNOCUOUS NONFALSE WIRES CAN STILL BE A WIRE COMMUNICATION IN FURTHERANCE OF THE SCHEME. SO THAT'S WHY WE PROPOSED THAT.
JUDGE DAVILA: WELL, I APPRECIATE THAT. THAT'S HELPFUL AS TO THE REASONS WHY. AND I'M NOT BEING CRITICAL OF THE LANGUAGE HERE, BUT I WAS TRYING TO -- WHAT IS THIS INTENDING TO CONVEY? AND THEN AS TO THE LAST LANGUAGE ON LINE 12 REGARDING MS. HOLMES INTENDING TO REPAY, AND I KNOW THAT'S FROM CASES THAT SAY THAT'S NOT A DEFENSE. IS THERE GOING TO BE ARGUMENT OF THAT?
MS. SAHARIA: NO, YOUR HONOR. THAT KIND OF INSTRUCTION -- AND I WOULD POINT THE COURT TO THE SECOND CIRCUIT CASE IN UNITED STATES VERSUS ROSSOMONDO, WHICH IS AT 144 F.3D 197, SECOND CIRCUIT 1998, WHICH WE'LL DISCUSS WHEN WE GET TO GOOD FAITH AS WELL. THAT CASE MAKES CLEAR THAT THAT KIND OF INSTRUCTION MAY BE APPROPRIATE IN A CASE WHERE THE DEFENDANT IS CLAIMING, "I INTENDED TO CAUSE A HARM IN THE SHORT TERM, BUT I THOUGHT IT WOULD WORK OUT IN THE LONG TERM." AND THAT'S NOT OUR DEFENSE HERE. WE ALREADY HAD DISCUSSION ABOUT THAT AT THE MOTION IN LIMINE STAGE. WE'RE NOT GOING TO ARGUE THAT. THE SECOND CIRCUIT, IN THE CASE I JUST CITED, ACTUALLY REVERSED THE CONVICTION WHERE THE COURT GAVE THAT INSTRUCTION BECAUSE THE COURT FOUND THAT UNDER THE CIRCUMSTANCES OF THAT CASE, WHERE THE DEFENDANT WASN'T MAKING THAT KIND OF ARGUMENT, IT WAS MISLEADING TO THE JURY TO GIVE THAT TYPE OF INSTRUCTION. SO WE DO OBJECT TO THAT FINAL SENTENCE FOR THAT REASON. AS TO THE OTHER TWO SENTENCES --
JUDGE DAVILA: PARDON ME. LET ME JUST STOP YOU THERE. WELL, MR. LEACH, ON THE REPRESENTATION THAT THE DEFENSE IS NOT GOING TO ARGUE THAT AS A DEFENSE IN ANY WAY, I JUST DON'T KNOW WHY WE WOULD LEAVE THIS IN HERE. SO I'M INCLINED NOT TO GIVE IT WITH THAT REPRESENTATION. LET ME SAY THAT.
MR. LEACH: BASED ON THAT REPRESENTATION, YOUR HONOR, WE'LL SUBMIT ON OUR ARGUMENT. I UNDERSTAND THE COURT'S POSITION.
JUDGE DAVILA: SO LET'S GO BACK. MS. SAHARIA?
MS. SAHARIA: SURE. SO ON THE FIRST PART ON THE YELLOW HIGHLIGHTING, ON THE MATERIAL TRANSMITTED BY WIRE, I DON'T THINK THERE'S ANY RISK OF THE JURY BEING CONFUSED. MOST OF THE WIRES HERE ARE THE INVESTORS SENDING MONEY TO THERANOS, WHICH, OF COURSE, THE SENDING OF MONEY DOES NOT ITSELF CONTAIN A FALSE STATEMENT. IT'S NOT A DECEPTIVE TRANSMISSION. SO I JUST DON'T SEE HOW THE JURY COULD BE CONFUSED ABOUT THAT ELEMENT. OF COURSE WE'RE NOT GOING TO ARGUE TO THE JURY THAT IT CAN'T CONVICT ON THOSE COUNTS BECAUSE THE WIRE TRANSFER DID NOT ITSELF CONTAIN FALSE OR MISLEADING STATEMENTS. SO I JUST DON'T SEE THAT AS BEING NECESSARY IN THIS CASE. WE STAND ON THE PRIOR OBJECTION THAT WE ALSO CONVEYED, THAT IT MISSTATES THE WIRE COMMUNICATION ELEMENT BY SAYING THAT AS LONG AS THE WIRE COMMUNICATION WAS USED AS A PART OF THIS SCHEME, AS OPPOSED TO CARRYING OUT AN ESSENTIAL PART OF THE SCHEME.
BUT FUNDAMENTALLY, I JUST DON'T SEE THAT AS BEING -- AS BEING LIKELY TO BE A SOURCE OF JURY CONFUSION AND, OF COURSE, WE'RE NOT GOING TO ARGUE THAT. AND THEN ON THE SECOND PART OF IT, WHICH IS, "NOR DOES IT MATTER WHETHER THIS SCHEME OR PLAN WAS SUCCESSFUL OR THAT ANY MONEY OR PROPERTY WAS OBTAINED," AGAIN, I JUST DON'T THINK SEE THIS AS BEING HELPFUL TO THE JURY ON THE FACTS OF THIS CASE. OF COURSE, THE GOVERNMENT CLAIMS THAT MONEY OR PROPERTY WAS OBTAINED ON THIS CASE. THAT'S THEIR THEORY OF THE CASE, SO I'M NOT SURE WHY WE WOULD BE TELLING THE JURY THAT. AND THE SAME WITH "NOR DOES IT MATTER WHETHER THE SCHEME OR PLAN WAS SUCCESSFUL," THE "DOES NOT MATTER" LANGUAGE IS QUITE OBJECTIONABLE BECAUSE IT IS RELEVANT WHETHER THE SCHEME WAS SUCCESSFUL. THAT'S ALWAYS RELEVANT TO INTENT OR MATERIALITY. AGAIN, IT'S JUST GOVERNMENT ARGUMENT THAT I DO NOT THINK IT HAS ANY PLACE IN THESE INSTRUCTIONS, SIMILAR TO THE SENTENCE THAT WE JUST TALKED ABOUT ON LINE 12. IT'S THE SAME KIND OF CONCEPT.
MR. LEACH: I DON'T THINK IT'S ARGUMENT, YOUR HONOR. I'M AGREEING WITH MS. SAHARIA THAT IF WE WANT TO CHANGE "NOR DOES IT MATTER" TO "NOR MUST YOU FIND THE SCHEME OR PLAN WAS SUCCESSFUL OR THAT ANY MONEY OR PROPERTY WAS OBTAINED," I THINK THAT JUST UNDERSCORES THAT THEY DON'T NEED TO FIND SUCCESS OF THE SCHEME OR ACTUAL OBTAINING OF THE MONEY OR PROPERTY IN A PERSONAL WAY TO MS. HOLMES. SO THAT'S WHAT WE'RE GETTING AT THERE.
JUDGE DAVILA: OKAY. ALL RIGHT. THANK YOU. IT LOOKS LIKE THIS ONE I'M GOING TO LOOK AT A LITTLE MORE WITH SOME WORDSMITHING AND SEE IF THERE'S A CHANGE. I THINK I UNDERSTAND YOUR CONCERN, MR. LEACH, ABOUT LETTING THE JURY KNOW THAT -- I GUESS YOUR CONCERN IS THAT THE MATERIAL TRANSMITTED DOESN'T HAVE TO BE FRAUDULENT OR FALSE IN ANY WAY. I'M NOT SURE THAT THIS CAPTURES THAT A LITTLE BIT. MAYBE YOU CAN WORK ON IT DURING OUR BREAK. WE'RE GOING TO BREAK IN ABOUT 15 OR 20 MINUTES.
MR. LEACH: I WAS THINKING IN THE MOMENT, YOUR HONOR, THAT I THINK I COULD DO IT PRETTY SIMPLY, "THE WIRE ITSELF NEED NOT BE FALSE OR MISLEADING."
JUDGE DAVILA: THAT SOUNDS BETTER.
MR. LEACH: BUT I'LL WORK ON THE BREAK ON THAT.
JUDGE DAVILA: OKAY. IF I'M GRADING YOUR PAPERS, THAT SOUNDS BETTER.
MR. LEACH: OKAY.
JUDGE DAVILA: LET'S MOVE DOWN. I'M NEXT HERE AT LINE 17.
MS. SAHARIA: I THINK THIS IS ALREADY COVERED BY OUR DISCUSSIONS ON OMISSIONS, WITH JUST REITERATING MR. LEACH'S CONCESSION THAT THEY'RE NOT CLAIMING AN OMISSIONS THEORY AS TO PATIENTS, SO AT A MINIMUM WE'LL NEED TO DO SOME WORDSMITHING HERE IF THE COURT DOES INSTRUCT AS TO INVESTORS.
JUDGE DAVILA: RIGHT. OKAY. ALL RIGHT. LET'S MOVE TO PAGE 29. THIS IS INSTRUCTION 21, INTENT TO DEFRAUD. LET ME JUST SAY, THE COURT IS INCLINED TO GIVE THE MODEL ON THIS, WHICH IS SHORT AND SWEET. IT'S 5.12. "AN INTENT TO DEFRAUD IS AN INTENT TO DECEIVE AND CHEAT." I THINK THAT'S WHAT THE MODEL IS AND THAT'S WHAT I'M INCLINED TO GIVE. I'M HAPPY TO HEAR YOUR OBJECTIONS.
MS. SAHARIA: THAT'S FINE, YOUR HONOR. WE ALREADY DISCUSSED A LONGER VERSION OF THAT IN THE WIRE FRAUD INSTRUCTION.
JUDGE DAVILA: RIGHT.
MS. SAHARIA: AND I THINK THE COURT DID AGREE TO GIVE A LONGER VERSION THERE. SO IF THE COURT IS GOING TO GIVE THE SOMEWHAT LONGER VERSION THERE, I WOULD SUGGEST THE COURT SHOULD JUST GIVE THE SAME LANGUAGE HERE SO AS NOT TO SUGGEST TO THE JURY THAT THERE'S SOME DISTINCTION BETWEEN THE TWO PLACES. SO I WOULD JUST SUGGESTS THE COURT MIRROR THE LANGUAGE THAT IT'S GOING TO USE IN THE WIRE FRAUD INSTRUCTION ITSELF AND JUST MIRROR THAT HERE.
JUDGE DAVILA: OKAY. MS. VOLKAR?
MR. LEACH: I'M GOING TO HAND IT BACK TO MS. VOLKAR.
JUDGE DAVILA: SURE.
MS. VOLKAR: THANK YOU, YOUR HONOR. THE GOVERNMENT AGREES THAT THE COURT SHOULD GIVE THE MODEL. ALONG THE LINES OF NOT NEEDING TO REPEAT SOMETHING OVER AND OVER AGAIN IN THE INSTRUCTIONS, AGREEING TO THE LONGER VERSION IN THE PRIOR INSTRUCTION, I DON'T KNOW THAT THE COURT NEEDS TO REPEAT IT HERE. IF THE COURT WERE GOING TO REPEAT IT, WE THINK IT SHOULD BE THE EXACT SAME FORMULATION. AND I UNDERSTAND FROM WHAT THE COURT IS SAYING THAT THE COURT DOES NOT INTEND TO GIVE A GOOD FAITH INSTRUCTION, AND THE GOVERNMENT AGREES WITH THAT.
JUDGE DAVILA: OKAY. WELL, I'LL LOOK AT THE LONG WIRE FRAUD AND SEE IF IT'S APPROPRIATE TO GIVE IT HERE AGAIN. I DON'T WANT TO GET INTO JURY CONFUSION, OF COURSE, AND HAVE THEM WONDER WHY IT'S LONGER IN ONE AND NOT THE OTHER.
MS. SAHARIA: JURORS SOMETIMES PARSE LANGUAGE, AND IF THEY SEE ONE PHRASE IN ONE PLACE AND A DIFFERENT PHRASE IN ANOTHER PLACE, I JUST DON'T WANT THEM TO BE CONFUSED.
JUDGE DAVILA: RIGHT. AND I WANT TO AVOID JURY QUESTIONS IF WE CAN TO KEEP THEM DELIBERATING. MS. VOLKAR?
MS. VOLKAR: AND, YOUR HONOR, THE GOVERNMENT'S POSITION ON THAT IS THAT THE LANGUAGE THAT THE COURT AND THE PARTIES JUST AGREED UPON IN THE WIRE FRAUD WAS, WAS WHAT MILLER, THE MILLER CASE USED.
JUDGE DAVILA: RIGHT.
MS. VOLKAR: AND SO I THINK THAT'S APPROPRIATE. AND IF THE COURT WANTS TO GIVE IT A SECOND TIME, WE DON'T OBJECT TO THAT. AGAIN, IT'S THE LANGUAGE FROM MILLER. BUT WE ALSO THINK THE MODEL ITSELF IS SUFFICIENT.
JUDGE DAVILA: ALL RIGHT. MS. SAHARIA?
MS. SAHARIA: YES. I WASN'T SURE WHETHER THE COURT'S COMMENT MEANT THAT YOU DECIDED NOT TO GIVE A GOOD FAITH INSTRUCTION, OR WHETHER WE SHOULD STILL DISCUSS THAT.
JUDGE DAVILA: NO, I THINK WE'RE DISCUSSING THAT.
MS. SAHARIA: WE HAD JUST PUT OUR GOOD FAITH LINE IN THIS INSTRUCTION, BUT OF COURSE IT COULD BE PULLED OUT AS A SEPARATE GOOD FAITH INSTRUCTION.
JUDGE DAVILA: YES.
MS. SAHARIA: WE TOOK TO HEART THE COURT'S ADMONITION WITH RESPECT TO LENGTH, AND SO WE HAVE PROPOSED A VERY SHORT GOOD FAITH INSTRUCTION THAT JUST SIMPLY INFORMS THE JURY THAT GOOD FAITH IS INCONSISTENT WITH A FINDING THAT MS. HOLMES ACTED WITH THE INTENT TO DEFRAUD. THAT'S WHY WE PUT IT IN THE INTENT TO DEFRAUD INSTRUCTION. THE GOVERNMENT HAS PROPOSED THREE SENTENCES, ONE BEING KIND OF THE DEFENSE ARTICULATION OF GOOD FAITH, AND THEN TWO GOVERNMENT SENTENCES THAT CONVEY THE GOVERNMENT'S THEORY OF THE CASE. IT'S NOT A BALANCED INSTRUCTION. THE SECOND SENTENCE I WILL SAY I THINK IS UNOBJECTIONABLE IN THE GOVERNMENT'S INSTRUCTION. IT IS A CORRECT STATEMENT OF THE LAW. WE STRONGLY OBJECT TO THE LAST SENTENCE. I DID MORE THINKING ABOUT THAT SENTENCE OVER THE PAST WEEK. THIS WAS IN THE TARALLO INSTRUCTION, BUT AS WE DID MORE RESEARCH AND LOOKED AT THE CASE I CITED TO THE COURT, THE ROSSOMONDO CASE, THAT'S WHERE THE SECOND CIRCUIT REVERSED A CONVICTION BASED ON SIMILAR LANGUAGE. THIS SENTENCE BY ITSELF IS VERY CONFUSING TO THE JURY BECAUSE GOOD FAITH AND THE HONEST BELIEF IN THE ULTIMATE SUCCESS OF AN ENTERPRISE MAY ITSELF MEAN THAT MS. HOLMES ACTED IN COMPLETE GOOD FAITH BECAUSE SHE BELIEVED WHAT SHE WAS SAYING WAS TRUE. THIS TYPE OF SENTENCE IS GIVEN IN THE SITUATION, LIKE I SAID BEFORE, WHERE A DEFENDANT ENGAGES IN FRAUD, BUT THINKS THAT "I'LL MAKE IT ALL WORK IN THE LONG RUN," AND THAT'S NOT OUR DEFENSE HERE, AND WE'RE VERY CONCERNED THAT THAT FINAL SENTENCE WILL MISLEAD THE JURY. SO IF THE COURT IS INCLINED TO GIVE TWO SENTENCES, WE WOULD GIVE THE FIRST AND THE SECOND SENTENCE OF THE GOVERNMENT INSTRUCTION, OR JUST GIVE OUR ONE SENTENCE.
MS. VOLKAR: WELL, YOUR HONOR, I RECALL BACK TO OUR CONVERSATION LAST FRIDAY, AND I THINK ONE OF THE THINGS I POINTED OUT THERE IS THAT THE GOOD FAITH INSTRUCTION THAT THE DEFENSE HAD PREVIOUSLY SUGGESTED WAS ONE SIDED AND DIDN'T INCLUDE ALL OF THE PORTIONS OF TARALLO. IT'S FUNNY THAT WE'RE NOW IN THE REVERSE SITUATION BECAUSE THIS IS LANGUAGE EXACTLY PULLED FROM TARALLO. THE GOVERNMENT'S POSITION IS A GOOD FAITH INSTRUCTION SHOULD NOT BE GIVEN. AND THE GOVERNMENT IS VERY CONCERNED AT EVEN THOUGH IT'S ONE SENTENCE AND SHORTER, THE LANGUAGE THAT THE DEFENSE ADDED TO THE TOP OF PAGE 29, LINES 4 TO 5, BECAUSE IT STILL PROVIDES AN INCOMPLETE PICTURE OF GOOD FAITH. AND I'LL GIVE THE MOST OBVIOUS EXAMPLE. "GOOD FAITH ON THE PART OF MS. HOLMES." GOOD FAITH AS TO WHAT? THAT LANGUAGE RIGHT THERE IS AN INACCURATE STATEMENT OF NINTH CIRCUIT LAW AND IT VIOLATES THIS COURT'S MOTION IN LIMINE ORDER AT 798, PAGES 88 TO 90 WHICH PARSED THERE ARE DIFFERENT TYPES OF GOOD FAITH.
IT HAS TO BE GOOD FAITH BELIEF IN THE TRUTH OF MISREPRESENTATIONS. IT HAS TO BE A PARTICULARIZED TYPE OF GOOD FAITH. AND I BELIEVE WE SUGGESTED THAT LANGUAGE. THE DEFENSE REJECTED IT. THEY WANT TO BE ABLE TO JUST CLAIM SOME ROSY FEELINGS ABOUT HOW THINGS WOULD WORK OUT. EVERY FRAUD CASE IS SOMEONE BELIEVING IT WILL WORK OUT DOWN THE LINE. IN PONZI SCHEMES IT'S "I'M GOING TO BE ABLE TO PAY BACK THOSE FIRST PEOPLE AND EVENTUALLY I'M GOING TO BE ABLE TO MAKE IT WORK, AND I'LL BE ABLE TO PAY EVERYONE BACK, AND IT WILL BE GREAT." WHAT I JUST HEARD MS. SAHARIA SAY IS THIS IS NOT A CASE WHERE MS. HOLMES THOUGHT IT WOULD WORK OUT IN THE LONG RUN. I COULD NOT DISAGREE MORE STRONGLY. SHE ABSOLUTELY THOUGHT IT WOULD WORK OUT IN THE LONG RUN. SHE THOUGHT SHE COULD EVENTUALLY GET HER TECHNOLOGY TO WORK. AND THEN THE STATEMENTS THAT SHE MADE WOULDN'T NECESSARILY BE AS FALSE OR MISLEADING AS THEY WERE WHEN SHE MAKES THEM. I'M SORRY.
THE FIRST POINT IS THAT A GOOD FAITH INSTRUCTION IS NOT NEEDED AS LONG AS THE COURT IS IMPROPERLY INSTRUCTING ON THE INTENT TO DEFRAUD, AND WE BELIEVE THAT WE'RE VERY CLOSE ON REACHING THAT AGREEMENT. IF A GOOD FAITH INSTRUCTION IS GOING TO BE GIVEN, THEN IT SHOULD ACCURATELY STATE THE LAW, IT SHOULD ACCURATELY STATE WHAT THAT GOOD FAITH BELIEF IS, OTHERWISE IT RUNS AFOUL OF THIS COURT'S ORDER, NINTH CIRCUIT CASE LAW. AND BECAUSE OF THE PARTIES' DISCUSSION LAST WEEK, THE GOVERNMENT SUGGESTED AN INSTRUCTION THAT WAS A SHORTER VERSION OF THE PAGE LONG INSTRUCTION GIVEN IN TARALLO, AND THAT IS AN ACCURATE STATEMENT OF NINTH CIRCUIT LAW, NOT SECOND CIRCUIT LAW.
JUDGE DAVILA: ALL RIGHT. THANK YOU. LET ME JUST OFFER YOU SOMETHING HERE AND SEE WHAT YOUR THOUGHTS ARE. "YOU MAY DETERMINE WHETHER MS. HOLMES HAD AN HONEST, GOOD FAITH BELIEF IN THE TRUTH OF THE SPECIFIC MISREPRESENTATIONS ALLEGED IN THE INDICTMENT IN DETERMINING WHETHER OR NOT THE DEFENDANT ACTED WITH INTENT TO DEFRAUD." WE CAN CHANGE "DEFENDANT" TO "MS. HOLMES," MS. SAHARIA.
MS. SAHARIA: COULD I DISCUSS THAT WITH THE TEAM DURING THE BREAK, WHICH I THINK IS COMING UP SOON. I THINK IT WOULD HELPFUL FOR US TO DISCUSS THAT.
JUDGE DAVILA: DO YOU WANT ME TO REPEAT IT?
MS. SAHARIA: IF YOU COULD REPEAT THAT, THAT WOULD BE GREAT.
JUDGE DAVILA: SURE. "YOU MAY DETERMINE WHETHER MS. HOLMES HAD AN HONEST, GOOD FAITH BELIEF IN THE TRUTH OF THE SPECIFIC MISREPRESENTATIONS ALLEGED IN THE INDICTMENT IN DETERMINING WHETHER OR NOT MS. HOLMES ACTED WITH INTENT TO DEFRAUD."
MS. VOLKAR: YOUR HONOR, THE GOVERNMENT'S OBJECTION THERE IS THAT THAT ONLY ADDRESSES ONE OF THE TWO PROBLEMS. THAT ADDRESSES THE SPECIFICITY OF WHAT GOOD FAITH WE'RE TALKING ABOUT THAT MORE ALIGNS WITH THE COURT'S PRIOR MOTION IN LIMINE ORDER. SO THAT SOLVES THAT PROBLEM. BUT THEN IT'S STILL THE UNBALANCED DESCRIPTION OF WHAT A GOOD FAITH DEFENSE IS. THAT'S ESSENTIALLY THE FIRST SENTENCE OF THE GOVERNMENT'S PROPOSED GOOD FAITH WITHOUT THE BALANCING IF SHE KNOWINGLY MADE MISREPRESENTATIONS IN THE MOMENT. AND WE WOULD PUSH FOR THE THIRD SENTENCE FROM TARALLO THAT SAYS, "A GOOD FAITH BELIEF THAT THE BUSINESS WILL ULTIMATELY WORK OUT OR THE THING THAT YOU'RE MISREPRESENTING WILL ULTIMATELY BECOME TRUE," THAT IS NOT SUFFICIENT FOR A GOOD FAITH BELIEF DEFENSE, EITHER.
JUDGE DAVILA: OKAY.
MS. SAHARIA: AGAIN, I WANT TO DISCUSS IT WITH MY TEAM, BUT I DO THINK THE COURT'S INSTRUCTION DOES CONTAIN BALANCE BECAUSE IT SAYS WHETHER OR NOT SHE ACTED WITH THE INTENT TO DEFRAUD AND WHETHER -- THE WORD "WHETHER" CONNOTES IT COULD BE ONE, IT COULD BE THE OTHER. BUT LET ME TALK ABOUT IT WITH THE TEAM AT THE BREAK AND COME BACK TO THE COURT. BUT I DO, AGAIN, STRENUOUSLY OBJECT TO THAT LAST SENTENCE. JUST CONTRARY TO MS. VOLKAR'S REPRESENTATIONS A FEW MINUTES AGO, IT IS VERY MUCH OUR POSITION THAT MS. HOLMES DID BELIEVE IN THE SUCCESS OF THERANOS OVER THE LONG TERM. OUR POINT IS THAT THIS INSTRUCTION MAY MAKE SENSE IN A CASE WHERE A DEFENDANT IS TRYING TO ARGUE, YES, I REALIZED I WAS DOING SOMETHING WRONG, BUT THAT DOESN'T MATTER BECAUSE I THOUGHT I WOULD WORK IT OUT IN THE LONG TERM. THAT'S NOT OUR DEFENSE. WE'RE NOT GOING TO ARGUE THAT. WE'VE HAD THAT DISCUSSION ALREADY. SO I JUST DON'T SEE THAT INSTRUCTION AS BEING HELPFUL, AND I THINK IT WILL MISLEAD THE JURY.
JUDGE DAVILA: OKAY.
MS. SAHARIA: THAT'S IT, YOUR HONOR.
MS. VOLKAR: AND, YOUR HONOR, MY COLLEAGUE, MR. LEACH, POINTED OUT THE COURT MIGHT HAVE BEEN READING FROM THE COMMENTARY. I JUST NOTE THAT THERE'S A SENTENCE IMMEDIATELY FOLLOWING WHAT THE COURT READ, WHICH IS MORE ALONG THE LINES OF WHAT THE GOVERNMENT IS SUGGESTING FOR BALANCE, WHICH IS "THE DEFENDANT'S BELIEF THAT THE VICTIM OF THE FRAUD WILL BE PAID IN THE FUTURE OR WILL SUSTAIN NO ECONOMIC LOSS IS NO DEFENSE TO THE CRIME." SO, AGAIN, I JUST GO BACK TO IF WE'RE IN THE LAND OF GOOD FAITH, WHICH THE GOVERNMENT STILL STRENUOUSLY ARGUES WE SHOULD NOT BE, BUT IF WE ARE, IT NEEDS TO BE A BALANCED VERSION OF GOOD FAITH. AND THERE'S A LOT OF DANGER HERE BECAUSE OF THE DEFENSE'S THEORY, BECAUSE THEY WANT TO USE HALF OF THAT DEFINITION AND LAUNCH FROM THERE, AND THAT'S WHY IT'S CRITICALLY IMPORTANT WE HAVE A BALANCED INSTRUCTION FOR THE JURY ON WHAT THE LAW IN THE NINTH CIRCUIT IS.
JUDGE DAVILA: OKAY. WELL, THANK YOU. WE'RE GOING TO TAKE OUR BREAK IN JUST A MINUTE. I WANT TO TALK ABOUT ONE LAST THING, AND THIS IS YOUR OPPORTUNITY TO WORDSMITH THOSE AS WELL. YOU'RE ABSOLUTELY RIGHT, I LOOKED AT THAT COMMENT, AND NOT EVERYTHING FITS AND ALL CASES ARE DIFFERENT, BUT IT DOESN'T SEEM THAT THAT LAST LINE, AS WRITTEN, IS APPLICABLE. BUT I'M HAPPY TO LET YOU WORDSMITH AND SEE WHAT COMES UP. LET'S TURN TO 23, INSTRUCTION 23 FOR JUST A MOMENT, AND THIS IS ON 31, ECF PAGE 32, KNOWINGLY. LET ME JUST SAY I'M INCLINED TO GIVE THE MODEL 5.7 ON THIS. BUT I'M HAPPY TO HEAR FROM YOU.
MS. SAHARIA: BRIEFLY. OF COURSE, THE WORD "OMISSIONS" APPEARS, AND SO THAT'S JUST OUR STANDING OBJECTION. WE DO REQUEST THAT THE COURT ADD THE TWO SENTENCES IN BLUE WHICH CONVEY I THINK THE IMPORTANT PRINCIPLE THAT IS NOT ELSEWHERE CONVEYED IN THESE INSTRUCTIONS, THAT THE JURY NEEDS TO FIND PERSONAL KNOWLEDGE ON THE PART OF MS. HOLMES, AND THAT KNOWLEDGE OF OTHERS CANNOT BE IMPUTED TO HER, WHETHER IT'S A THERANOS EMPLOYEE, WHETHER IT'S AN ALLEGED EVEN COCONSPIRATOR. WE'VE HAD DISCUSSION AROUND THAT PRINCIPLE AND IN CONNECTION WITH THE MOTIONS IN LIMINE, AND IT COMES FROM STRAIGHT FROM NINTH CIRCUIT CASE LAW, THE PHILLIPS CASE, THAT WE CITED TO THE COURT. I DO THINK THERE'S A DANGER IN THIS CASE GIVEN THAT THE GOVERNMENT DID PRESENT, I THINK, A LARGE VOLUME OF EVIDENCE OF THINGS THAT OTHER PEOPLE AT THERANOS KNEW THAT WAS NEVER BROUGHT TO MS. HOLMES'S ATTENTION. AND SO THIS IS AN IMPORTANT CONCEPT IN THIS CASE GIVEN THE RECORD THAT WILL BE BEFORE THE JURY.
MS. VOLKAR: YOUR HONOR, I THINK THE MODEL INSTRUCTION COVERS IT. I THINK THAT SPECIFICALLY THE SECOND SENTENCE THAT THE GOVERNMENT SUGGESTED SHOULD BE INCLUDED AS IT IS IN BRACKETS IN THE MODEL. AGAIN, THIS IS NOT A REGULATORY FRAUD CASE THAT WOULD HAVE A HIGHER MENS REA. AND BASED ON THE COMMENTS, THAT MEANS THIS IS A SENTENCE THAT IS APPROPRIATE HERE. AS FOR THE DEFENSE SUGGESTION IN BLUE, THE PHILLIPS CASE IS A CASE FROM OVER 50 YEARS AGO. IT HASN'T BEEN INCORPORATED INTO THE MODEL INSTRUCTION I THINK FOR A REASON. IT IS AN EVIDENTIARY CASE THAT THE NINTH CIRCUIT WAS DISCUSSING WHETHER OR NOT IT WAS PROPER FOR THE COURT TO ADMIT CERTAIN EVIDENCE. I KNOW THAT THE COURT HAS HAD THIS CASE IN MIND. IT'S BEEN RAISED SEVERAL TIMES THROUGHOUT THIS TRIAL, AND THE COURT HAS HAD IT IN MIND IN ADMITTING OR NOT ADMITTING CERTAIN EVIDENCE, MOST NOTABLY THE NEGATIVE CUSTOMER COMPLAINTS, WHICH THE COURT REJECTED BASED ON THIS CASE. THAT DOESN'T MEAN THAT IT REQUIRES AN INSTRUCTION TO GO WITH IT. THERE'S NOTHING EVEN IN THE CASE ITSELF, THE PHILLIPS CASE ITSELF, THAT WOULD PERMIT THAT OR SUGGEST THAT THAT'S APPROPRIATE.
JUDGE DAVILA: OKAY.
MS. SAHARIA: THAT'S IT, YOUR HONOR.
JUDGE DAVILA: OKAY. THANK YOU. LET'S TAKE A BREAK NOW AND LET YOU WORDSMITH. I'LL DO THE SAME. WE'LL COME BACK AND CHAT SOME MORE. THANK YOU.
MS. VOLKAR: THANK YOU, YOUR HONOR.
MS. SAHARIA: THANK YOU, YOUR HONOR.
COURT CLERK: WHAT TIME WILL YOU BE RESUMING, YOUR HONOR?
JUDGE DAVILA: I'M SORRY?
COURT CLERK: WHAT TIME WILL YOU BE RESUMING?
MS. SAHARIA: CAN WE HAVE HALF AN HOUR?
JUDGE DAVILA: LET'S SEE, IT'S 11:00 NOW. SHOULD WE SAY 60 MINUTES? IS THAT GOOD?
MS. SAHARIA: I'M SORRY.
JUDGE DAVILA: SO 60 MINUTES? AN HOUR?
MS. VOLKAR: THAT'S FINE.
MS. SAHARIA: I THINK HALF AN HOUR WOULD BE FINE WITH US, BUT IF THE COURT NEEDS TO DO SOMETHING, AN HOUR IS FINE AS WELL.
JUDGE DAVILA: NO. THAT'S FINE. WE'VE BEEN TAKING 30 MINUTES BREAKS. LET'S EXTEND IT TO 15, 45 MINUTES.
MS. VOLKAR: I WAS LIKE 15 IS A LITTLE SHORT, YOUR HONOR, BUT 45 MINUTES IS GREAT.
MS. SAHARIA: THANK YOU.
(LAUGHTER.)
(RECESS FROM 10:59 A.M. UNTIL 12:09 P.M.)
JUDGE DAVILA: WE'RE BACK ON THE RECORD. ALL PARTIES PREVIOUSLY PRESENT ARE PRESENT ONCE AGAIN. WE'LL CONTINUE WITH OUR DISCUSSION ON JURY INSTRUCTIONS. WE'RE OUTSIDE OF THE PRESENCE OF THE JURY AGAIN. LET ME ASK, DID YOU ACCOMPLISH ANYTHING DURING THE BREAK?
MS. VOLKAR: I DID, YOUR HONOR.
JUDGE DAVILA: GREAT.
MS. VOLKAR: AND I'D LIKE TO DISCUSS OR CIRCLE BACK FOR A COUPLE POINTS ON THE MENS REA BEFORE WE MOVE ON TO OTHER INSTRUCTIONS.
JUDGE DAVILA: SURE.
MS. VOLKAR: SO FIRST, I MIGHT HAVE SAID THIS, BUT I DID WANT TO BE CLEAR FOR THE RECORD THAT THIS IS NOT A REGULATORY FRAUD CASE, THIS IS NOT A TAX FRAUD CASE, NOT A SECURITIES FRAUD CASE, NOT A HEALTH CARE FRAUD CASE. I KNOW THIS IS CIRCLING FAR BACK, BUT WITH RESPECT TO THE WILLFULLY INSTRUCTION, I STILL HAVE NOT YET FOUND IN THE NINTH CIRCUIT OR THIS DISTRICT A CASE THAT HAS PROVIDED A WILLFULLY INSTRUCTION WHEN THERE IS NOT ONE OF THOSE HEIGHTENED MENS REA IN REGULATORY FRAUD CHARGES INVOLVED IN THE CASE. I'VE LOOKED AT THE NORA CASE, THE FIFTH CIRCUIT CASE THAT YOUR HONOR POINTED OUT --
JUDGE DAVILA: RIGHT.
MS. VOLKAR: -- AND THAT WAS A HEALTH FRAUD CASE. AND YOUR HONOR MIGHT HAVE ALSO NOTICED THIS, BUT THE STATUTE, 1347, HAS THE WORD "WILLFULLY" IN IT, WHEREAS 1343 AND 1349 OF COURSE DO NOT. SO I HAD THE OPPORTUNITY OVER THE BREAK TO LOOK AT NORA AND I WOULD WANTED TO REITERATE THAT THE GOVERNMENT HAS STILL NOT YET FOUND A CASE WHERE NO REGULATORY FRAUD VIOLATIONS ARE AT PLAY, AND YET, THE WILLFULLY DEFINITION IS GIVEN. THE WAY I SEE THAT TYING WITH THE GOOD FAITH INSTRUCTION WHERE WE LEFT OFF ON, THE GOOD FAITH INSTRUCTION IS FREQUENTLY GIVEN WHEN THERE IS A REGULATORY FRAUD VIOLATION OR WHEN ONE OF THOSE HEIGHTENED MENS REA IS AT ISSUE, AND THE REASON IS BECAUSE A GOOD FAITH BELIEF CAN NEGATE THAT HIGHER MENS REA. THE REASON WHY THE NINTH CIRCUIT SAYS THAT GOOD FAITH INSTRUCTIONS ARE UNNECESSARY WHEN KNOWINGLY IS PROPERLY DEFINED -- AND HERE WE HAVE THE INTENT TO DECEIVE AND CHEAT -- IS BECAUSE IT IS THE LOWER BAR OF MENS REA AND IT'S NOT THAT HEIGHTENED STANDARD.
NOW, I UNDERSTAND THAT WE'RE LIKELY IN A LAND WHERE WE'RE GIVING THE GOOD FAITH INSTRUCTION, AND SO I TOOK THE TIME TO LOOK AT THE PORTION THE COURT REFERENCED, WHICH IS IN THE COMMENTARY OF MODEL INSTRUCTION 5.12. AND THE GOVERNMENT DOES JUST -- WE ARE FINE WITH THAT FIRST SENTENCE THAT YOUR HONOR READ ALOUD, AND EVEN UNDERSTANDING THAT "MS. HOLMES" WOULD BE SUBSTITUTED FOR "THE DEFENDANT," THE GOVERNMENT DOES WANT TO REITERATE THE SECOND SENTENCE, "THE DEFENDANT'S BELIEF THAT THE VICTIMS WILL BE PAID IN THE FUTURE OR SUFFER NO ECONOMIC LOSS," SHOULD BE GIVEN, AND A COUPLE OF INSTANCES OF FACTS IN THIS CASE THAT WE THINK SUPPORT THAT SECOND SENTENCE INCLUDE -- ONE OF THE COMMON THEMES IN THE CROSS-EXAMINATIONS OF INVESTORS IN THIS CASE FOCUSSED ON THE INCREASED VALUE OF THOSE INVESTOR'S SHARES OVER TIME, AND THAT DISCUSSION ABOUT WHETHER OR NOT THOSE INVESTORS COULD HAVE SOLD OR COULD HAVE MADE MORE MONEY OVER TIME MIGHT BE CONFUSING WITHOUT THE SECOND SENTENCE THAT I REFERENCED.
THERE'S ALSO -- THE END OF THE CROSS-EXAMINATION OF DR. DAS ENDED WITH THE QUOTE FROM A MOVIE, YOUR HONOR PROBABLY REMEMBERS, AND IT WAS SOMETHING ALONG THE LINES -- I WON'T DO IT JUSTICE, BUT IT WAS SOMETHING ALONG THE LINES OF IF IT'S NOT ALL RIGHT YET, THEN IT'S NOT YET THE END, WHICH IS AGAIN THIS IDEA THAT IT WILL WORK OUT IN THE FUTURE. AND THE FINAL POINT IS THAT ONE OF THE KEY TENETS OF THIS CASE AND WHAT WE UNDERSTAND TO BE PART OF THE DEFENSE IS THAT MS. HOLMES BELIEVED THE 4 SERIES OR MINILAB WOULD WORK ONE DAY, AND THEREFORE, HER STATEMENTS TO INVESTORS WERE NOT MISLEADING BECAUSE SHE WAS TALKING ABOUT THE CAPABILITIES OF THE DEVICE AND SOMETHING THAT MIGHT WORK OUT IN THE FUTURE. SO WE JUST WANTED TO FURTHER SUPPORT OUR ARGUMENT THAT IF THE COURT IS GOING TO GIVE A GOOD FAITH INSTRUCTION, WE DO NOT HAVE ANY -- WE DO NOT OBJECT TO THAT FIRST SENTENCE IN THE COMMENTARY THAT THE COURT READ, BUT WE WOULD REQUEST THAT THE SECOND SENTENCE BE GIVEN AS WELL.
JUDGE DAVILA: ALL RIGHT. THANK YOU.
MS. SAHARIA: I DON'T WANT TO REHASH THE WILLFULLY ISSUE. RESPECTFULLY, THE GOVERNMENT IS CONFLATING A BUNCH OF DIFFERENT THINGS HERE. THE BRYAN WILLFUL STANDARD IS THE LOWER STANDARD OF WILLFULNESS. IT'S NOT THE STANDARD THAT APPLIES ON REGULATORY CASES. THAT'S THE HIGHER STANDARD THAT REQUIRES KNOWLEDGE OF A SPECIFIC STATUTE, AND THAT'S NOT OUR ARGUMENT HERE. SO I JUST WANT TO MAKE THAT CLEAR. BUT I THINK THAT'S A TOTALLY SEPARATE ISSUE THAN THE GOOD FAITH INSTRUCTION. WE ARE FINE WITH THE FIRST SENTENCE THAT THE COURT PROPOSED, ALTHOUGH I WOULD SUGGEST THAT THE FIRST VERB "DETERMINED" MIGHT MAKE MORE SENSE IF IT READ "CONSIDER," ONLY BECAUSE THE WORD "DETERMINING" ALSO APPEARS IN THE SENTENCE, AND I THINK IT IS MORE NATURAL TO SAY "YOU MAY CONSIDER WHETHER A DEFENDANT HAD AN HONEST GOOD FAITH BELIEF," ET CETERA, "IN DETERMINE WHETHER OR NOT THE DEFENDANT ACTED WITH INTENT TO DEFRAUD." SO I THINK THAT WOULD BE A MORE NATURAL WAY TO PHRASE THAT SENTENCE. AND I WANTED TO CLARIFY, IS IT THE COURT'S INTENTION TO INCLUDE THAT SENTENCE IN THE INTENT TO DEFRAUD INSTRUCTION? OR IS IT A SEPARATE INSTRUCTION?
JUDGE DAVILA: I THINK A SEPARATE INSTRUCTION IS WHAT I HAD IN MIND.
MS. SAHARIA: WE WOULD SUGGEST IT MIGHT MAKE MORE SENSE TO PUT IT IN THE INTENT TO DEFRAUD INSTRUCTION BECAUSE IT IS EXPLAINING HOW THE JURY MAY GO ABOUT DETERMINING WHETHER THERE IS AN INTENT TO DEFRAUD, AND THE COMMENT IN THE MODEL RULES IS IN THE INSTRUCTION 5.12 ON INTENT TO DEFRAUD. SO THAT WOULD BE OUR SUGGESTION. THAT'S JUST OUR SUGGESTION AS TO WHERE IT COULD GO. WE DO OBJECT TO THAT FINAL SENTENCE. IT DOESN'T FIT THE FACTS OF THE CASE. WE'VE HAD THIS DISCUSSION ALREADY. WE'RE NOT GOING TO ARGUE THAT AN INTENT TO DEFRAUD IS NOT INTENT TO DEFRAUD IF SHE INTENDED -- IF SHE THOUGHT THEY WOULD BE REPAID IN THE FUTURE. THAT'S JUST NOT OUR ARGUMENT. WE'RE NOT GOING TO SAY THAT. I HAVE A NUMBER OF OBJECTIONS TO THE LANGUAGE OF THE SENTENCE IF THE COURT WAS CONSIDERING GIVING IT. I DON'T THINK IT'S FAIR TO SAY "THE VICTIMS OF THE FRAUD." THAT SUGGESTS A FRAUD HAS OCCURRED AND THERE ARE VICTIMS. IF THE COURT WERE GOING TO GIVE SOME VERSION OF THIS SENTENCE, I THINK YOU WOULD NEED TO ADD THE "STANDING ALONE" KIND OF LANGUAGE THAT WE WERE TALKING ABOUT BEFORE TO NOT MISLEAD THE JURY. BUT FUNDAMENTALLY, OUR POSITION IS THAT THE SENTENCE DOES NOT FIT THIS CASE AND SHOULD NOT BE GIVEN.
JUDGE DAVILA: ALL RIGHT. THANK YOU. SO YOU'RE SUGGESTING, MS. SAHARIA, INSTEAD OF "DETERMINE," "CONSIDER"?
MS. SAHARIA: "YOU MAY CONSIDER," CORRECT.
JUDGE DAVILA: AND OTHERWISE YOU'RE FINE WITH AT LEAST THE COURT'S SUGGESTION OF SUBSTITUTING "MS. HOLMES" FOR "DEFENDANT"?
MS. SAHARIA: YES, YOUR HONOR.
JUDGE DAVILA: ALL RIGHT. THANK YOU. ANYTHING FURTHER ON THIS?
MS. VOLKAR: THE GOVERNMENT IS FINE WITH "CONSIDER" RATHER THAN "DETERMINE." THE GOVERNMENT DOES THINK IT SHOULD BE A SEPARATE INSTRUCTION. I RISK REPEATING MYSELF FOR THE UMPTEENTH TIME, BUT THE NINTH CIRCUIT, OF COURSE, SAYS A GOOD FAITH INSTRUCTION IS NOT REQUIRED WHEN INTENT TO DEFRAUD IS PROPERLY DEFINED. I WORRY THAT CONFLATING THOSE TWO MUDDIES THE WATERS EVEN FURTHER, SO I WOULD ARGUE THAT IT SHOULD BE A SEPARATE INSTRUCTION.
JUDGE DAVILA: ALL RIGHT. THANK YOU. I DO THINK IT SHOULD BE A SEPARATE INSTRUCTION. I DON'T WANT TO CONFLATE IT WITH THE OTHER. I DON'T KNOW IF IT SHOULD BE ENTITLED "GOOD FAITH DEFENSE." I'M NOT SURE THAT'S THE RIGHT TITLE.
MS. SAHARIA: I WOULD ADVISE AGAINST THE WORD "DEFENSE" BECAUSE THAT MAKES IT SOUND LIKE WE BEAR THE BURDEN TO PROVE GOOD FAITH --
JUDGE DAVILA: RIGHT.
MS. SAHARIA: -- AND THAT'S NOT SO. IT'S JUST NEGATING THE GOVERNMENT'S BURDEN. PERHAPS "GOOD FAITH OF THE DEFENDANT," OR "GOOD FAITH OF MS. HOLMES" MIGHT BE A BETTER FORMULATION.
MS. VOLKAR: I'VE SEEN "GOOD FAITH DEFENSE" USED BY OTHER COURTS IN THIS DISTRICT. I DON'T KNOW THAT THE COURT READS THE TITLE OF THE INSTRUCTION TO THE JURY, BUT --
JUDGE DAVILA: NO, I DON'T.
MS. SAHARIA: I'M SO SORRY. I DON'T KNOW IF THE VERSION OF THE INSTRUCTIONS THE COURT SENDS BACK TO THE JURY ROOM HAS THE TITLES. IF SO, I WOULD CONTINUE TO OBJECT TO THAT TITLE.
JUDGE DAVILA: IT DOES. IT DOES HAVE JUST THE TITLES ON IT. AND I DON'T READ THE TITLES OF THE INSTRUCTION. IT WILL READ JURY INSTRUCTION NUMBER, WHATEVER IT IS, AND THEN IT WILL HAVE A TITLE, YOU KNOW, PRESUMPTION OF INNOCENCE, THOSE TYPES OF THINGS.
MS. SAHARIA: RIGHT. YOU COULD JUST USE "GOOD FAITH," YOUR HONOR, I THINK THAT WOULD BE FINE AS WELL. I DO OBJECT TO THE WORD "DEFENSE" BECAUSE IT MAKES IT SOUND LIKE IT'S A DEFENSE THAT WE NEED TO PROVE.
JUDGE DAVILA: OKAY. ANYTHING FURTHER ON THIS?
MS. VOLKAR: NO, YOUR HONOR.
JUDGE DAVILA: ALL RIGHT. THANK YOU. ALL RIGHT. THE COURT IS GOING TO GIVE THE SUGGESTION THAT I PROPOSED TO YOU, CHANGING MODEL 5.12. I'M NOT GOING TO GIVE THE FINAL SENTENCE SUGGESTED BY THE GOVERNMENT AT LINE 15 THROUGH 16. I'LL CHANGE "DETERMINE" TO "CONSIDER," AND WE'LL CHANGE THE TITLE TO "GOOD FAITH" AND LEAVE IT AT THAT, STRIKING "DEFENSE." THIS IS FOR YOUR PREPARATION, WHOEVER IS DOING THIS.
MS. SAHARIA: THANK YOU. JUST TO BE CLEAR, YOUR HONOR, YOU'RE GOING TO SWAP OUT THE GOVERNMENT'S PROPOSAL AT 12 TO 17 WITH THE LANGUAGE THAT THE COURT READ FROM THE MODEL; RIGHT?
JUDGE DAVILA: THAT'S RIGHT. THAT'S RIGHT.
MS. VOLKAR: YOUR HONOR, JUST TO ALSO CLARIFY, DOES THAT INCLUDE THE SECOND SENTENCE THAT THE GOVERNMENT REQUESTED FROM THE COMMENTARY IN THE MODEL?
JUDGE DAVILA: WELL, I HADN'T PUT THAT IN. I WAS JUST GIVING MINE THAT I READ TO YOU. YOU WOULD LIKE THAT SECOND SENTENCE ADDED?
MS. VOLKAR: YES, YOUR HONOR.
JUDGE DAVILA: ANY OBJECTION TO THAT, MS. SAHARIA?
MS. SAHARIA: YES. I THINK THAT'S WHAT I WAS SPEAKING TO A FEW MINUTES AGO. WE DO OBJECT TO THE SENTENCE, "HOWEVER, A DEFENDANT'S BELIEF THAT THE VICTIMS OF THE FRAUD WILL BE PAID IN THE FUTURE OR WILL SUSTAIN NO ECONOMIC LOSS IS NO DEFENSE TO THE CRIME." WE DO OBJECT TO THAT SENTENCE. I DON'T THINK IT FITS THIS CASE. IT'S NOT WHAT WE'RE GOING TO ARGUE. THAT'S AN INSTRUCTION THAT REBUTS A DEFENSE ARGUMENT THAT IT DOESN'T MATTER IF I DEFRAUDED SOMEONE AS LONG AS I THOUGHT THEY WOULD BE MADE WHOLE IN THE END. WE'RE NOT GOING TO ARGUE THAT. I THINK IT'S A MISLEADING SENTENCE ON THE FACTS OF THIS CASE. BUT, AGAIN, IF THE COURT WERE GOING TO GIVE IT, I THINK IT WOULD BE APPROPRIATE TO ADD SOME SORT OF "STANDING ALONE" LANGUAGE, BUT I DO THINK THAT IT'S NOT REQUIRED ON THE FACTS OF THIS CASE AND COULD CONFUSE THE JURY.
JUDGE DAVILA: YES.
MS. VOLKAR: YOUR HONOR, THIS WAS WHAT I WAS SPEAKING TO EARLIER. I THINK THIS ALREADY HAS BEEN ARGUED REPEATEDLY THROUGH THE DEFENSE'S CROSS-EXAMINATION. I LISTED OFF THREE EXAMPLES THAT I COULD THINK OF OFF THE TOP OF MY HEAD, WHICH IS THE CROSS-EXAMINATION OF INVESTORS FOCUSSED ON THE INCREASING VALUE OF THEIR SHARES OVER TIME. I'M SPECIFICALLY THINKING OF WITH MR. EISENMAN THERE WAS DISCUSSION ABOUT HOW THERE WERE MULTIPLE OPPORTUNITIES THAT HE COULD HAVE SOLD HIS SHARES. AND THEN THERE WAS THE CROSS-EXAMINATION OF DR. DAS WITH THE QUOTE FROM THE MOVIE, IF IT'S NOT ALL RIGHT, THEN IT'S NOT YET THE END. THAT SEEMS TO SPEAK EXACTLY TO THIS, SOMETHING BETTER WILL COME ALONG IN THE FUTURE. AND THEN ONE OF THE CORE PIECES OF THE CASE, AS I UNDERSTAND MS. HOLMES'S TESTIMONY, THAT SHE UNDERSTOOD THE 4 SERIES OR THE MINILAB HAD THE CAPABILITY TO DO ALL OF THE TESTS AND THAT'S WHY SHE WAS NOT MISLEADING THE INVESTORS, ONE DAY IT WOULD WORK. AND THAT IS TALKING ABOUT WHAT WOULD COME ABOUT IN THE FUTURE.
JUDGE DAVILA: SO HOW WOULD YOURS READ THEN?
MS. VOLKAR: YOUR HONOR, IN KEEPING WITH -- ONE OF TWO THINGS. ONE, OF COURSE WE PROPOSED THE INSTRUCTION FROM TARALLO. BUT TAKING THE COURT'S DIRECTION OF LOOKING AT THE COMMENTARY, WE WOULD JUST ASK TO INCLUDE THAT SECOND SENTENCE, "HOWEVER, A DEFENDANT'S BELIEF THAT THE VICTIMS OF THE FRAUD WILL BE PAID IN THE FUTURE OR WILL SUSTAIN NO ECONOMIC LOSS IS NO DEFENSE TO THE CRIME."
MS. SAHARIA: IF I MAY, YOUR HONOR, THE PROBLEM IS THAT A DEFENDANT'S BELIEF THAT VICTIMS WILL SUSTAIN NO ECONOMIC LOSS MAY INDEED BE A DEFENSE TO THE CRIME BECAUSE THAT IS RELEVANT EVIDENCE THAT THE DEFENDANT THOUGHT WHAT SHE WAS SAYING WAS TRUE, THAT SHE THOUGHT THAT SHE WAS -- SHE HAD A SUCCESSFUL COMPANY, THAT SHE BELIEVED IN THE TRUTH OF WHAT SHE WAS SAYING. THAT IS A DEFENSE. IT'S NOT A DEFENSE IF SHE IS KNOWINGLY MISLEADING PEOPLE. BUT THE FACT THAT A DEFENDANT BELIEVES THAT HER VICTIMS OR SUPPOSED VICTIMS WILL NOT SUSTAIN A LOSS MAY ITSELF BE EVIDENCE THAT, THAT SHE BELIEVED WHAT SHE WAS SAYING WAS TRUE. SO THAT VERY WELL COULD MISLEAD THE JURY.
JUDGE DAVILA: WELL, AND WHAT YOU'VE TOLD ME IS THAT'S NOT WHAT YOU'RE GOING TO ARGUE --
MS. SAHARIA: CORRECT, YOUR HONOR.
JUDGE DAVILA: -- BUT I UNDERSTAND THAT IT POTENTIALLY COULD. I GUESS THE LANGUAGE OF THAT IS SOMETHING THAT I WAS UNCOMFORTABLE WITH, MS. VOLKAR. I JUST --
MS. VOLKAR: YOUR HONOR --
JUDGE DAVILA: THAT THE VICTIMS OF THE FRAUD WILL BE PAID IN THE FUTURE, I'M NOT SURE THAT -- THAT LANGUAGE RELATES, OF COURSE, DOESN'T IT, TO SOME OTHER TYPE OF A FACT PATTERN MORE SO THAN THIS, I THINK.
MS. VOLKAR: YOUR HONOR, I GO BACK TO THAT'S PART OF WHY THE GOVERNMENT OFFERED THE TARALLO FORMULATION IN OUR -- IN THE ECF 1188, THE LAST TWO LINES, WHICH I UNDERSTAND THE COURT WAS PLANNING TO STRIKE. THIS IS FROM TARALLO.
JUDGE DAVILA: RIGHT.
MS. VOLKAR: "WHILE GOOD FAITH IS A DEFENSE TO WIRE FRAUD, AN HONEST BELIEF IN THE ULTIMATE SUCCESS OF THE ENTERPRISE IS NOT IN ITSELF A DEFENSE." AND I THINK WHERE THE DISAGREEMENT BETWEEN THE PARTIES IS, THE NINTH CIRCUIT HAS REPEATEDLY AFFIRMED THIS OVER AND OVER AND OVER AGAIN. IT'S IN THE COMMENTARY TO THE MODEL INSTRUCTION. IT'S IN TARALLO. THEY DON'T LIKE THAT LANGUAGE BECAUSE IT LIMITS THE DEFENSE THAT THEY WANT TO MAKE, BUT THAT'S EXACTLY WHY THE GOVERNMENT THINKS IT MUST BE IN THE INSTRUCTION. IT'S MISLEADING TO THE JURY TO NOT HAVE SOMETHING LIKE THAT AS A GUARDRAIL AGAINST WHAT WE EXPECT THE DEFENSE WILL ARGUE IN SOME WAY, SHAPE, OR FORM IN THEIR CLOSING ARGUMENTS.
MS. SAHARIA: THAT'S JUST NOT TRUE, YOUR HONOR. WE ARE NOT GOING TO MAKE ARGUMENTS THAT ARE FORECLOSED BY LAW. THE ISSUE IS NOT THAT THIS LANGUAGE FORECLOSES ARGUMENTS WE WANT TO MAKE. IT'S THAT THE JURY WILL BE MISLED INTO THINKING THAT MS. HOLMES -- TO TAKE THE GOVERNMENT'S PROPOSAL AT ECF 1188, ECF PAGE 30, THE JURY WILL BE MISLED INTO THINKING THAT IF MS. HOLMES HAD AN HONEST BELIEF IN THE ULTIMATE SUCCESS OF THE ENTERPRISE -- WHICH OF COURSE SHE DID, SHE VERY MUCH BELIEVED IN THERANOS -- THAT THAT SOMEHOW IS NOT RELEVANT TO THEIR DETERMINATION. AND OF COURSE IT'S RELEVANT TO THEIR DETERMINATION OF WHETHER SHE INTENDED TO DEFRAUD. THAT IS A RELEVANT FACT IF SHE TRULY BELIEVED THAT THERANOS HAD COME UP WITH TECHNOLOGY THAT WORKED AND THAT WAS GOING TO SUCCEED. THAT'S HIGHLY RELEVANT. THIS LANGUAGE WILL MISLEAD THE JURY.
JUDGE DAVILA: WELL, IF IT'S QUALIFIED, MS. SAHARIA, "IS NOT IN ITSELF," "IS NOT WITHOUT MORE" --
MS. SAHARIA: I THINK IT'S STILL CONFUSING IN MY VIEW. AN HONEST BELIEF IN THE ULTIMATE SUCCESS OF THE ENTERPRISE IS NOT IN ITSELF A DEFENSE. IT IS A DEFENSE. IF THERE'S -- IF IT'S ACCOMPANIED WITH FALSE AND MISLEADING -- KNOWINGLY FALSE AND MISLEADING STATEMENTS, IT MAY NOT BE A DEFENSE. BUT THAT CONCEPT ISN'T IN THIS SENTENCE. I THINK YOUR HONOR'S PROPOSAL TO INCLUDE THE FIRST LANGUAGE FROM THE MODEL COMMENTARY MAKES PERFECT SENSE. IT'S A BALANCED STATEMENT. IT DOESN'T TELL THE JURY WHICH WAY TO COME OUT. IT SAYS, "YOU MAY CONSIDER WHETHER, IN DETERMINING WHETHER OR NOT THE DEFENDANT ACTED WITH INTENT TO DEFRAUD." THE GOVERNMENT CAN ARGUE FROM THAT SENTENCE EVERYTHING IT WANTS TO ARGUE. IT CAN ARGUE THAT MS. HOLMES DIDN'T HAVE AN HONEST GOOD FAITH BELIEF IN THE TRUTH OF THE MISREPRESENTATIONS. IT CAN MAKE ALL OF THE ARGUMENTS IT WANTS TO MAKE FROM THAT SENTENCE.
JUDGE DAVILA: WHEN I LOOKED AT MY PROPOSAL, I WAS ACTUALLY LOOKING AT JUST THE REVERSE. I WAS LOOKING AT THIS SAYING, WELL, THE GOVERNMENT -- EXCUSE ME, THE DEFENSE WILL STILL BE ABLE TO ARGUE WHATEVER.
MS. SAHARIA: WE BOTH CAN ARGUE WHATEVER FROM THAT SENTENCE, YOUR HONOR.
JUDGE DAVILA: THAT'S WHAT I WAS LOOKING AT. ALL RIGHT. THANK YOU. I'M GOING TO KEEP IT AS IS, MS. VOLKAR. THANK YOU FOR YOUR COMMENT. ALL RIGHT. WHAT ELSE?
MS. SAHARIA: I THINK WE'RE UP TO AIDING AND ABETTING, YOUR HONOR.
MS. VOLKAR: I'M GOING TO LET MR. LEACH COME TO THE PODIUM, YOUR HONOR.
JUDGE DAVILA: ALL RIGHT. ONE THING I WANTED TO -- I'M SORRY, MS. VOLKAR, BEFORE YOU LEAVE, I WAS LOOKING AT MAYBE REFINING A COUPLE OF THE INSTRUCTIONS. KNOWINGLY, I THINK YOU WERE TALKING ABOUT KNOWINGLY?
MS. VOLKAR: THAT'S CORRECT, YOUR HONOR.
JUDGE DAVILA: AND IT SEEMS TO ME THAT MAYBE WE NEED TO DESCRIBE KNOWINGLY AND WILLFULLY AND ADHERE THEM TO THE SPECIFIC INSTRUCTIONS, THAT IS, CONSPIRACY AND WIRE FRAUD. AND I WONDER IF WE NEED TO -- BECAUSE I LOOK AT THESE AND THERE MIGHT BE SOME JUROR CONFUSION AS TO THOSE, WITHOUT TETHERING THEM TO THE INSTRUCTIONS SPECIFIC, AND I WONDERED IF, FOR KNOWINGLY -- I'M AT 23, NUMBER 23 -- IF WE CAN ADD SOME LANGUAGE THAT SAYS "AS DESCRIBED IN INSTRUCTION 20 MEANS," OR SOMETHING LIKE THAT. AND THE SAME THING WITH WILLFULLY, "AS DESCRIBED IN INSTRUCTION NUMBER," WHATEVER CONSPIRACY IS.
MS. SAHARIA: I THINK THAT WOULD BE FINE, YOUR HONOR. OUR CONCERN WITH THIS INSTRUCTION IS THAT WE DO THINK THAT THERE IS SOME CONFLICT BETWEEN THE KNOWING STANDARD AND THE WILLFULLY STANDARD, AND SO IT MIGHT HELP TO ALLEVIATE SOME CONFUSION IF THAT WERE INCLUDED.
JUDGE DAVILA: IT SEEMS LIKE IF THEY'RE TETHERED TO THOSE SPECIFIC INSTRUCTIONS, THAT WOULD ELIMINATE ANY OF THAT CROSS CONFUSION.
MS. VOLKAR: WELL, YOUR HONOR, I THINK THIS IS WHERE THE FUNDAMENTAL DISAGREEMENT LIES. WHEN I LOOK AT INSTRUCTION NUMBER 16, THE SECOND ELEMENT IS THAT SHE BECAME A MEMBER OF THE ALLEGED CONSPIRACY KNOWING OF AT LEAST ONE OF ITS OBJECTS. AND THE DEFENSE ORIGINALLY WANTED TO INSERT IN THERE "AND WILLFULLY HELPING TO INTEND TO ACCOMPLISH THAT," AND I BELIEVE THAT'S STILL THEIR POSITION OF WHERE THAT WILLFULLY FILLS IN. I THINK IT'S READING WORDS THAT AREN'T IN THE STATUTE, THAT AREN'T IN THE ELEMENTS. I THINK THE GREATER RISK FOR JURY CONFUSION IS TETHERING ONE INSTRUCTION TO ONE AND NOT TO BOTH WHEN I THINK THE STANDARD IS KNOWINGLY -- THE STANDARD IS THE INTENT TO DECEIVE AND CHEAT. I WORRY THAT TETHERING THEM IN THAT MANNER COULD CAUSE GREATER CONFUSION ON WHAT THE STANDARD OF MENS REA IS.
MS. SAHARIA: I'M HAPPY TO LOOK AT, IF THE COURT IS GOING TO PROPOSE SOMETHING, TO LOOK AT THAT.
JUDGE DAVILA: WELL, I LOOKED AT THAT, AND I'VE DONE THAT IN OTHER INSTRUCTIONS BEFORE WHERE THERE MIGHT SOME CONFUSION. IF THE PARTIES THINK THAT AT THE RISK OF CONFUSION, AND YOU'RE ACCEPTING THAT THE RISK OF CONFUSION DOESN'T EXIST, OR IF I'M DOING TOO MUCH ON THIS, I'M HAPPY TO LEAVE IT AS IS. BUT I JUST LOOKED AT IT AS A POSSIBILITY TO CLEAN UP ANY POSSIBLE CONFUSION THERE. BUT IF YOU FEEL IT'S NOT NECESSARY, I WON'T GIVE IT.
MS. SAHARIA: I THINK IT DEPENDS ON WHAT THE COURT ULTIMATELY DOES WITH THE WILLFULLY INSTRUCTION, BUT I CAN SEE A POTENTIAL FOR CONFUSION IF THE COURT ACCEPTS OUR PROPOSAL OR PART OF OUR PROPOSAL. SO I DO THINK THAT THERE'S A POTENTIAL FOR CONFUSION BETWEEN THE KNOWING DEFINITION AND THE WILLFULLY DEFINITION --
JUDGE DAVILA: OKAY.
MS. SAHARIA: -- WHICH IS WHY WE HAD OBJECTED TO PART OF THE KNOWINGLY DEFINITION IN THE FIRST PLACE.
JUDGE DAVILA: ALL RIGHT. WELL, LET'S RETURN TO THIS. LET'S GO ON TO, YES, AIDING AND ABETTING. THAT'S MR. LEACH?
MR. LEACH: YES, YOUR HONOR.
MS. VOLKAR: THANK YOU, YOUR HONOR.
JUDGE DAVILA: ALL RIGHT. MR. LEACH, DO YOU WANT TO GO FIRST ON THIS?
MR. LEACH: THE COURT SHOULD GIVE THE MODEL INSTRUCTION FOR AIDING AND ABETTING. THIS IS A CONCEPT THAT IS APPLIED TO ALL TYPES OF CRIMINAL CASES THROUGHOUT THE NINTH CIRCUIT. I DON'T SEE ANYTHING UNIQUE TO THIS CASE TO CAUSE THE COURT TO DEVIATE FROM THAT. WE HAD PROPOSED THE LANGUAGE IN YELLOW, WHICH IS DRAWN DIRECTLY FROM THE MODEL INSTRUCTION. THE DEFENSE IS PROPOSING TO ADD "TOOK AN AFFIRMATIVE ACT TO AID, COUNSEL, COMMAND." AND THEIR CITATION TO THAT IS THE ROSEMOND CASE. THE ROSEMOND CASE IS CITED IN THE MODEL INSTRUCTION, AND WITHOUT A RECOMMENDATION THAT THIS LANGUAGE ABOUT AN AFFIRMATIVE ACT BE ADDED. IN ADDITION, THE MODEL INSTRUCTION HAS FOUR ELEMENTS FOR AIDING AND ABETTING. THE DEFENSE IS PROPOSING A FIFTH ELEMENT THAT IT'S LABELLED AT LINES 16 THROUGH 17, ADDING THE MENTAL STATE FOR INTENT TO DEFRAUD. WE OBJECT TO THAT. THE COURT SHOULD GIVE THE MODEL INSTRUCTION.
JUDGE DAVILA: OKAY. THANK YOU.
MS. SAHARIA: JUST A FEW POINTS, YOUR HONOR. WE DO OBJECT TO THIS INSTRUCTION IN ITS ENTIRETY. THE INDICTMENT DOES NOT CHARGE AIDING AND ABETTING OR EVEN CITE SECTION 2 OF 18 U.S.C. I UNDERSTAND, OF COURSE, THAT AIDING AND ABETTING IS IMPLIED IN ALL INDICTMENT, AND SO THAT IN AND OF ITSELF IS NOT DISPOSITIVE. THE PARTIES FILED PROPOSED JURY INSTRUCTIONS BEFORE TRIAL. THE GOVERNMENT DID NOT INCLUDE AN AIDING AND ABETTING INSTRUCTION IN ITS PROPOSED INSTRUCTIONS. THOSE INSTRUCTIONS SERVED TO PUT THE COURT AND THE PARTIES, THE DEFENSE, ON NOTICE AS TO WHAT THEORIES OF LIABILITY THE GOVERNMENT INTENDED TO PURSUE AT TRIAL. WE HAD NO NOTICE BEFORE TRIAL THAT THEY INTENDED TO PURSUE AN AIDING AND ABETTING THEORY OF LIABILITY. WE THEN HAD A DISCUSSION OF AIDING AND ABETTING BEFORE THE TESTIMONY OF DR. DAS WHEN IT CAME TO AIDING AND ABETTING CLIA VIOLATIONS. THE GOVERNMENT NEVER SUGGESTED IN THAT COLLOQUY THAT AIDING AND ABETTING WAS AT ISSUE IN THIS CASE.
SO WE SUBMIT THAT TO SPRING AIDING AND ABETTING LIABILITY ON US AT THE CLOSE OF EVIDENCE IS PREJUDICIAL. I WOULD CITE THE COURT TO THE U.S.A. V. GASKINS CASE, 849 F.2D 454, NINTH CIRCUIT 1988, WHERE THE COURT SAID THAT "LIABILITY AS PRINCIPAL AND AS AIDER AND ABETTOR ARE TWO DIFFERENT THEORIES OF LIABILITY, TWO CONCEPTUALLY DIFFERENT THEORIES." AND THE COURT SAID THAT THE DEFENSE MIGHT ARGUING AIDING AND ABETTING LIABILITY DIFFERENTLY THAN PRINCIPAL LIABILITY IF IT WAS ON NOTICE. THAT CASE IS A LITTLE DIFFERENT, I WILL CONCEDE, BECAUSE IN THAT CASE THE COURT DECIDED TO INSTRUCT ON AIDING AND ABETTING LIABILITY AFTER CLOSING ARGUMENTS FOR THE FIRST TIME, SO I WILL CONCEDE IT'S A LITTLE DIFFERENT. BUT WE WILL SUBMIT THAT THERE SHOULD BE NO AIDING AND ABETTING INSTRUCTION AT ALL. BUT PUTTING THAT ASIDE, AND I DON'T WANT TO BELABOR THAT, WE DO HAVE A FEW OBJECTIONS TO THE LANGUAGE OF THE INSTRUCTION.
FIRST, WE DO REQUEST THAT THE COURT INCLUDE AT LINE 10 THE WORDS "TOOK AN AFFIRMATIVE ACT," WHICH COMES FROM THE SUPREME COURT'S DECISION AT ROSEMOND; AND SECOND, AT LINES 16 AND 17, WE DO THINK THIS ELEMENT OF AIDING AND ABETTING LIABILITY IS ABSENT FROM THE MODEL INSTRUCTION. NINTH CIRCUIT CASE LAW MAKES CLEAR THAT THERE ARE TWO INTENTS THAT ARE REQUIRED AS PART OF AIDING AND ABETTING LIABILITY. THERE IS THE INTENT TO FACILITATE THE UNDERLYING CRIME, BUT THERE'S ALSO YOU NEED TO HAVE THE UNDERLYING INTENT OF THAT CRIME, IN THIS CASE THE INTENT TO DEFRAUD. WE CITED THE COURT, AT FOOTNOTE 35, TO THE SAYETSITTY CASE -- THAT'S S-A-Y-E-T-S-I-T-T-Y -- AND AGAIN, THE GASKINS CASE WHICH LAY OUT THE ELEMENTS OF AIDING AND ABETTING LIABILITY AND IDENTIFY THOSE TWO INTENTS AS SEPARATE ELEMENTS OF THAT LIABILITY, AND THAT'S MISSING FROM THE MODEL INSTRUCTION. TWO OTHER VERY BRIEF POINTS.
I DO THINK IT READS SOMEWHAT ODDLY TO SAY AT LINES 12, 14, AND THEN LINE 1 OF THE NEXT PAGE TO SAY COUNTS THREE THROUGH EIGHT AND TEN THROUGH TWELVE, WITHOUT SAYING "WIRE CHARGE AS CHARGED IN." FOR INSTANCE, IF YOU LOOK AT LINE 14, IT WOULD READ, UNDER THE GOVERNMENT'S PROPOSAL, "MS. HOLMES ACTED WITH THE INTENT TO FACILITATE COUNTS THREE THROUGH EIGHT." THAT READS A LITTLE ODDLY TO ME. THE INTENT IS TO FACILITATE THE OFFENSE, AND THE OFFENSE HERE IS WIRE FRAUD, AND SO WE THINK THAT LANGUAGE SHOULD BE ADDED IN THOSE LOCATIONS. AND THEN THE LAST POINT I WOULD MAKE IS ON THE NEXT PAGE, ECF 34, LINES 6 AND 7. THE MODEL INSTRUCTION READS AS IF THERE'S TWO DEFENDANTS IN THE CASE AND IS TELLING THE JURY YOU DON'T NEED TO DECIDE WHICH DEFENDANT IS THE PRINCIPAL AND WHICH IS THE AIDER AND ABETTOR. THAT LANGUAGE DOESN'T MAKE SENSE IN THIS CASE SINCE THERE'S ONLY ONE DEFENDANT, SO WE THINK THE COURT SHOULD CHANGE "WHICH DEFENDANT" TO "WHICH PERSON."
JUDGE DAVILA: OKAY. THANK YOU. MR. LEACH?
MR. LEACH: YOUR HONOR, WITH RESPECT TO THE NOTICE POINT, THE DEFENDANT CONCEDES THAT AIDING AND ABETTING LIABILITY IS IMPLICIT IN EVERY INDICTMENT. THE INDICTMENT DOESN'T SPELL OUT PINKERTON LIABILITY, IT DOESN'T SPELL OUT THE COSCHEMER THEORY OF LIABILITY. THERE'S BEEN AMPLE NOTICE THERE, AND WE SHOULD GIVE AN INSTRUCTION FOR ANY THEORY THAT IS SUPPORTED BY THE EVIDENCE AT THE END OF THE DAY. SO I DON'T THINK THE NOTICE ARGUMENT IS WELL TAKEN. I HAVE NO PROBLEM WITH THE LAST TWO SUGGESTIONS MS. SAHARIA WAS MAKING ABOUT, ON LINE 14, SAYING, "WIRE FRAUD AS CHARGED IN," AND I HAVE NO PROBLEM WITH, ON PAGE 34, LINES 6 TO 7, SAYING, "WHICH PERSON ACTUALLY COMMITTED THE CRIME, AND WHICH PERSON AIDED AND ABETTED." AND I JUST SEE NO OTHER REASON TO DEVIATE FROM THE MODEL INSTRUCTION UNDER THE CIRCUMSTANCES.
JUDGE DAVILA: OKAY. WHY SHOULDN'T WE STAY WITH THE MODEL LANGUAGE ON LINE 10? YOUR SUGGESTED LANGUAGE, MS. SAHARIA, DOESN'T THE, DOESN'T THE MODEL ACCOMPLISH THAT?
MS. SAHARIA: I DON'T THINK SO, YOUR HONOR. I THINK THE LANGUAGE "AIDED," AND PARTICULARLY "COUNSELLED" IS A WORD THAT MAY NOT CONNOTE AN ACTUAL AFFIRMATIVE ACT. SO WE THINK THAT THAT LANGUAGE, "AIDED, COUNSELLED, COMMANDED, INDUCED, OR PROCURED" IS NOT CLEAR ENOUGH TO MAKE CLEAR TO THE JURY THAT AN AFFIRMATIVE ACT IS REQUIRED, WHICH THE SUPREME COURT MADE CLEAR IN THE ROSEMOND CASE.
JUDGE DAVILA: OKAY.
MS. SAHARIA: JUST TO BE CLEAR, OUR SUGGESTION TO ADD THE LANGUAGE "WIRE FRAUD AS CHARGED IN" IS AT BOTH LINES 12 AND 14, AND THEN LINE 1 OF THE NEXT PAGE.
JUDGE DAVILA: WE'LL MAKE THOSE CHANGES TO THE WIRE FRAUD AS INDICATED, AND CHANGING "DEFENDANT" TO "PERSON" ON LINES 6 AND 7. I THINK THOSE ARE APPROPRIATE. AND I'M GOING TO USE THE MODEL INSTRUCTION WITH THE FOUR ELEMENTS. I THINK THAT'S SUFFICIENT TO FULLY INFORM, AND THE PARTIES CAN ARGUE THE STATE OF THE EVIDENCE. LET'S MOVE NEXT TO 25, AND THIS IS SCHEME TO DEFRAUD.
MS. SAHARIA: THIS IS COSCHEMER LIABILITY, YOUR HONOR?
JUDGE DAVILA: YES. MS. SAHARIA, LET ME JUST START OUT, YOU KNOW, YOURS IS QUITE LENGTHY.
MS. SAHARIA: IT IS, YOUR HONOR, ALTHOUGH I WILL SAY THAT OURS IS NO LENGTHIER THAN THE PINKERTON INSTRUCTION BECAUSE WE DIVIDED IT.
JUDGE DAVILA: I UNDERSTAND.
MS. SAHARIA: AS WE SAID BEFORE, AND AS THE GOVERNMENT AGREED IN THE PINKERTON ONE, THERE ARE TWO DIFFERENT SCHEMES, JUST LIKE THERE ARE TWO DIFFERENT CONSPIRACIES, AND SO THEY AGREED IN THE PINKERTON ONE TO DIVIDE IT SO THE JURY IS NOT CONFUSED BETWEEN THE SCHEMES AND THE ACTS. BUT WHAT I WILL SAY IS THE FOLLOWING: PUTTING ASIDE OUR MORE GENERAL OBJECTION TO COSCHEMER LIABILITY IN GENERAL, THERE'S TWO FUNDAMENTAL PROBLEMS WITH THE GOVERNMENT AND MODEL INSTRUCTION. THE FIRST IS THE FAILURE TO MATCH UP THE SCHEMES WITH THE COUNTS, WHICH IS AN ISSUE HERE BECAUSE THERE'S TWO DIFFERENT SCHEMES. BUT EVEN MORE FUNDAMENTALLY THAN THAT, THE MODEL INSTRUCTION IN MY VIEW IS BIZARRELY INADEQUATE WHEN YOU COMPARE IT TO ALL OF THE OTHER MODEL INSTRUCTIONS, WHICH TELL THE JURY THAT THEY NEED TO FIND CERTAIN ELEMENTS BEYOND A REASONABLE DOUBT. AND THAT'S HOW ALL OF THE OTHER MODEL INSTRUCTIONS AND INSTRUCTIONS THAT WE'VE BEEN DISCUSSING ARE FRAMED. THEY TELL THE JURY, "TO FIND MS. HOLMES GUILTY ON BLAH BLAH BLAH, YOU NEED TO FIND BEYOND A REASONABLE DOUBT THE FOLLOWING ELEMENTS." THIS MODEL INSTRUCTION ON COSCHEMER LIABILITY DOES NONE OF THAT. THERE'S NO, NO REQUIREMENT HERE TO FIND LIABILITY BEYOND A REASONABLE DOUBT, AND IT DOESN'T LIST THE ELEMENTS FOR THE JURY IN THE WAY THAT EVERY OTHER INSTRUCTION DOES. SO ALL THAT WE DID IS TO MODEL THE COSCHEMER LIABILITY INSTRUCTION AFTER ALL OF THE OTHER INSTRUCTIONS, INCLUDING THE PINKERTON INSTRUCTION, BY TELLING THE JURY THAT IT NEEDS TO FIND THE ELEMENTS BEYOND A REASONABLE DOUBT. SUBSTANTIVELY I DON'T THINK IT'S REALLY ANY DIFFERENT THAN THE GOVERNMENT MODEL AND PINKERTON. IT'S JUST THAT WE PUT IT IN THE FORMAT THAT THE JURY WILL UNDERSTAND AND THAT CONVEYS THE GOVERNMENT'S BURDEN OF PROOF, WHICH IS ABSENT FROM THE MODEL.
(PAUSE IN PROCEEDINGS.)
JUDGE DAVILA: MR. LEACH, OTHER THAN THE LENGTH OF THE DEFENSE PROPOSED INSTRUCTIONS, DOES IT OTHERWISE COMPORT WITH THE MODEL?
MR. LEACH: I THINK THERE ARE ELEMENTS THAT THE GOVERNMENT WOULD STILL OBJECT TO, YOUR HONOR. IN LINE 18 IT SAYS, "BASED ON THE FACTS THAT WERE KNOWN TO HER," I THINK THAT'S AN ADDITION FROM BOTH THE MODEL FOR COSCHEMER LIABILITY, BUT ALSO THE MODEL FOR PINKERTON LIABILITY. SO I THINK THAT'S ADDING LANGUAGE THAT WOULD NOT BE REQUIRED.
MS. SAHARIA: THAT'S CORRECT, YOUR HONOR. AND WE DID AGREE TO REMOVE THAT LANGUAGE FROM THE AGREED UPON PINKERTON INSTRUCTION, SO ASSUMING WE COULD OTHERWISE AGREE ON THIS INSTRUCTION, I THINK WE WOULD BE FINE REMOVING THAT LANGUAGE AS WELL.
JUDGE DAVILA: OKAY. THANK YOU.
MR. LEACH: OTHER THAN THAT, YOUR HONOR, I'M NOT CURRENTLY IDENTIFYING ANYTHING THAT IS -- THAT WOULD DIFFER FROM THE PINKERTON THEORY. BUT, AGAIN, I THINK THE MODEL CAPTURES WHAT -- ADEQUATELY DESCRIBES THE THEORY OF LIABILITY. IF THE CRITICISM IS THAT IT DOESN'T SAY "BEYOND A REASONABLE DOUBT," I THINK THAT'S INSTRUCTED ELSEWHERE, BUT I DO THINK THAT ELEMENT COULD BE ADDED TO THE MODEL. BUT OUR COMPLAINTS HERE WERE LARGELY THAT IT'S ADDING IN THAT ONE PART, AND IT'S ALSO LONGER THAN NECESSARY TO TELL THE JURY WHAT IT NEEDS TO KNOW.
JUDGE DAVILA: ALL RIGHT. THANK YOU. I'LL GIVE THIS AS MODIFIED, EDITING LINE 18 AS YOU BOTH AGREED TO DO.
MS. SAHARIA: THANK YOU, YOUR HONOR. AND WE WOULD CONSENT TO REMOVE THE SAME LANGUAGE ON THE NEXT PAGE, WHICH IS LINE 14.
JUDGE DAVILA: YES.
MS. SAHARIA: IT'S REPEATED TWICE.
JUDGE DAVILA: ALL RIGHT. THANK YOU. WE'RE NOW ON 27, WHICH IS VICTIM'S CONDUCT, AND THIS IS THE OMISSION AGAIN.
MS. SAHARIA: CORRECT. APART FROM THAT, WE HAVE AGREED TO THE GOVERNMENT'S PROPOSAL.
JUDGE DAVILA: WE'RE GOING TO TALK ABOUT OMISSIONS AGAIN IN JUST A MOMENT.
MR. LEACH: YOUR HONOR, I MIGHT BE ABLE TO --
JUDGE DAVILA: HELP OUT?
MR. LEACH: -- CIRCUMSCRIBE AND HELP OUT ON THAT DISCUSSION.
JUDGE DAVILA: SURE.
MR. LEACH: HAVING CONSIDERED THE DEFENSE ARGUMENTS AND AFTER DISCUSSION AND UPON SOME REFLECTION, WE WOULD BE FINE TAKING OUT THE OMISSIONS THEORY IN THE WIRE FRAUD INSTRUCTION, AND WE WOULD BE FINE TAKING OUT "FACTS OMITTED" IN THIS PARTICULAR INSTRUCTION.
JUDGE DAVILA: OKAY.
MR. LEACH: SO THIS IS JURY INSTRUCTION NUMBER 20 BEGINNING ON PAGE 26. WE WOULD AGREE TO TAKE OUT "OMITTED FACTS" IN LINE 5 AND LINE 9; AND REMOVING, ON PAGE 28, LINES 17 TO 21, THE ONE SPELLING OUT THE THEORY FOR OMISSIONS. I THINK IT'S WARRANTED BY THE EVIDENCE, BUT IT IS NOT THE GOVERNMENT'S INTENTION TO ARGUE AN OMISSIONS THEORY, SO IN LIGHT OF THE COURT'S COMMENTS AND SOME OF THE ARGUMENT, WE'RE PREPARED TO TAKE THAT OUT.
JUDGE DAVILA: ALL RIGHT. THANK YOU. THAT IS WHAT WE WERE GOING TO CIRCLE BACK TO, AND I WANTED TO ASK THAT QUESTION. BUT LET ME HEAR MS. SAHARIA'S OBJECTION.
MS. SAHARIA: I DON'T HAVE ANY OBJECTION TO REMOVING OMISSIONS. I WOULD CERTAINLY AGREE WITH THAT. I DO WANT TO CAREFULLY GO BACK AND LOOK AT THE REST OF THE INSTRUCTIONS, BECAUSE I THINK THERE'S A FEW OTHER PLACES WHERE OMISSIONS LANGUAGE APPEARS, AND I JUST WANT TO MAKE SURE THAT WE'RE BEING CONSISTENT. BUT I JUST WANT TO HAVE THE OPPORTUNITY TO DO THAT.
JUDGE DAVILA: THANK YOU. WHEN WE FINISH OUR CONVERSATION HERE, HOPEFULLY WE CAN -- I THINK WE'RE VERY CLOSE --
MS. SAHARIA: I THINK SO, YOUR HONOR.
JUDGE DAVILA: -- TO FINISHING THIS. THEN WHAT I'M GOING TO DO IS TASK THE PARTIES TO GO BACK, REVIEW, AND SEE IF, SOMETIME TODAY, YOU CAN COME UP WITH A FINALIZED COPY, SHARE IT WITH THE COURT, AND WE CAN HAVE ANOTHER MEETING BY ZOOM OR YOU CAN COME BACK HERE, WHATEVER YOU WOULD LIKE TO DO, TO FINALIZE THINGS.
MR. LEACH: I DO WANT TO BE CLEAR, YOUR HONOR. OMISSIONS DOES SHOW UP IN JURY INSTRUCTION NUMBER 23 ON THE DEFINITION OF KNOWINGLY. WE DO THINK IT'S APPROPRIATE TO KEEP OMISSIONS IN THE DEFINITION OF THE INTENT HERE BECAUSE THE THINGS THAT MS. HOLMES DOES NOT SAY IN THE CONTEXT OF AN ENTIRE CONVERSATION MIGHT HAVE SOME BEARING ON HER MENTAL STATE, WHETHER SHE ACTED KNOWINGLY. SO IT'S NOT IN BRACKETS IN THE MODEL INSTRUCTION FOR KNOWINGLY, AND WE THINK IT'S APPROPRIATE TO KEEP IT IN THERE. BUT IT'S THE GOVERNMENT'S INTENTION NOT TO RELY ON THE OMISSIONS THEORY FOR WIRE FRAUD IN THAT INSTRUCTION, AND IF IT'S IN ADDITIONAL ONES, SUCH AS THE VICTIM'S NEGLIGENCE, ALLEGED NEGLIGENCE THAT WE'RE LOOKING AT NOW, WE'LL WORK WITH MS. SAHARIA TO MAKE SURE THAT'S OUT.
JUDGE DAVILA: OKAY.
MS. SAHARIA: I'LL LOOK AT THE KNOWINGLY ONE. I JUST WANT TO THINK ABOUT IT. SO WE CAN MEET AND CONFER WITH THE GOVERNMENT ABOUT THAT.
JUDGE DAVILA: ALL RIGHT. THANK YOU. LINE 28, SUCCESS OF THE SCHEME.
MR. LEACH: WE THOUGHT THE COURT GOT IT RIGHT IN THE CHANG CASE BY INCLUDING THIS INSTRUCTION. THIS DOVETAILS SIGNIFICANTLY WITH THE GOOD FAITH ARGUMENT THAT WE'VE BEEN HAVING. WE DO THINK THE SECOND LINE HERE IS PARTICULARLY IMPORTANT GIVEN SOME OF THE ARGUMENTS THAT THE DEFENSE HAS MADE IN TERMS OF HER SELLING HER STOCK. BUT WE THOUGHT THIS INSTRUCTION WAS APPROPRIATELY GIVEN IN CHANG AND THE CHANNELS THE LANGUAGE OF TARALLO AND IS APPROPRIATE HERE.
MS. SAHARIA: I THINK WE'VE ALREADY DISCUSSED THIS CONCEPT A LOT TODAY, SO I DON'T WANT TO BELABOR THE POINT. WE DON'T THINK IT FITS THE FACTS OF THE CASE. I WOULD JUST NOTE AGAIN THAT WE HAD THIS DISCUSSION LAST WEEK. I DON'T THINK THE FIRST SENTENCE IS A CORRECT STATEMENT OF THE LAW BECAUSE IT SAYS "SUCCESS IS NOT MATERIAL." IT CERTAINLY IS RELEVANT, AND THAT WORD COULD MISLEAD THE JURY. IF THE COURT WERE GOING TO GIVE SUCH AN INSTRUCTION, I THINK "MATERIAL" WOULD NEED TO BE "REQUIRED" OR "NECESSARY" OR SOME SIMILAR LANGUAGE. BUT, AGAIN, THIS IS -- I JUST DON'T THINK THIS FITS THE FACTS OF THIS CASE. THE GOVERNMENT IS NOT -- THIS IS AN INSTRUCTION THAT IS GIVEN WHEN THE DEFENDANT TRIES TO DEFRAUD SOMEONE AND DOESN'T, IS UNSUCCESSFUL IN DOING SO. HERE THE GOVERNMENT'S CASE IS THAT MS. HOLMES WAS CAPABLE AND DID DEFRAUD PEOPLE. WE OBVIOUSLY DISAGREE WITH THAT. BUT I JUST DON'T THINK THAT THIS FITS THIS CASE.
JUDGE DAVILA: WELL, THERE'S -- YOU KNOW, THE WITNESSES TESTIFIED AND THERE WAS EXAMINATION, BOTH DIRECT AND CROSS, AS TO A WIDE, BROAD CATEGORY OF CONDUCT AND STATEMENTS AND INFORMATION THAT WAS SHARED AND THAT WAS NOT SHARED. SO LOOKING AT IT THROUGH A BROAD LENS, I DON'T THINK IT'S INAPPROPRIATE TO GIVE THIS. BUT I DO TAKE YOUR POINT ABOUT "MATERIAL" AND MAYBE "NECESSARY" OR SOME OTHER DESCRIPTOR COULD BE USED THERE, MR. LEACH.
MR. LEACH: WE'RE FINE WITH "REQUIRED" OR "IS NOT NECESSARY."
JUDGE DAVILA: LET'S PUT "IS NOT NECESSARY." AND I'LL NOTE YOUR COMMENTS, MS. SAHARIA.
MS. SAHARIA: THANK YOU.
JUDGE DAVILA: THE NEXT IS RESPONDEAT SUPERIOR.
MS. SAHARIA: I'M HAPPILY GOING TO CEDE THE PODIUM NOW TO MR. LEMENS.
MR. LEMENS: GOOD AFTERNOON, YOUR HONOR.
JUDGE DAVILA: GOOD AFTERNOON.
MR. LEMENS: ANDREW LEMENS FOR MS. HOLMES.
JUDGE DAVILA: WHY SHOULD THIS BE GIVEN? WHY IS THIS RELEVANT TO THE CASE HERE, MR. LEMENS?
MR. LEMENS: I THINK, YOUR HONOR, THIS HEARKENS BACK TO THE MOTION IN LIMINE ORDER THAT YOU ENTERED RECOGNIZING A CONCERN ABOUT TESTIMONY OR EVIDENCE RELATED TO MS. HOLMES'S ROLE, OR ANY INFLUENCE OR AUTHORITY RELATED TO THAT ROLE, AND IN PARTICULAR HER STATUS AS CEO. THAT'S DOCKET 798 AT PAGE 59. THERE'S BEEN CONSIDERABLE EVIDENCE FROM THE GOVERNMENT IN THIS CASE, TESTIMONY ABOUT MS. HOLMES'S ROLE AT THE COMPANY, HER LEVEL OF AUTHORITY AT THE COMPANY, STATEMENTS FROM HER THAT SHE WAS THE CEO AND SHE HAD RESPONSIBILITY. MR. LEACH ADDUCED ON CROSS-EXAMINATION STATEMENTS, I AM -- ALL ROADS LED TO HER, THE BUCK STOPS WITH HER. IN JUSTIFYING THOSE STATEMENTS, THE GOVERNMENT HAS NOTED THAT THEY ARE ADMISSIONS. AND OF COURSE HER ROLE AND POSITION AS CEO IS NOT A GENERAL ADMISSION OF CRIMINAL LIABILITY. IT'S EXACTLY THE CONCERN THAT ANIMATED OUR MOTION IN LIMINE DISCUSSION. IN LIGHT OF THE EVIDENCE THAT HAS COME IN, WE THINK AN INSTRUCTION HERE IS APPROPRIATE SIMPLY TO REMIND THE JURY THAT HER POSITION AT THE COMPANY IS NOT SUFFICIENT FROM WHICH TO INFER LIABILITY.
JUDGE DAVILA: OKAY. MR. LEACH?
MR. LEACH: THIS IS ARGUMENT, YOUR HONOR, AND IT'S SINGLING OUT PARTICULAR CATEGORIES OF EVIDENCE THAT ARE FAIR GAME FOR BOTH PARTIES TO ARGUE. WE ELICITED ON CROSS-EXAMINATION OF MS. HOLMES HER TITLE AND HER AUTHORITY WITHIN THE COMPANY. THE REDIRECT WAS FILLED WITH ARGUMENTS, THAT DOESN'T MEAN YOU KNOW EVERYTHING AT THE COMPANY. SO I REALLY THINK THIS IS ARGUMENTATIVE. IT'S NOT SOMETHING THAT THE JURY IS REQUIRED TO FIND OR NOT FIND. THE COURT IS ALREADY INSTRUCTING, IN CONNECTION WITH THE CONSPIRACY CHARGE, THAT IT'S NOT ENOUGH THAT CONSPIRATORS SIMPLY MET, DISCUSSED MATTERS OF COMMON INTEREST, ACTED IN SIMILAR WAYS, OR PERHAPS HELPED ONE ANOTHER, NOR IS IT ENOUGH THAT THEY HAD A BUSINESS OR ROMANTIC RELATIONSHIP. THE COURT IS INSTRUCTING IN OTHER AREAS THAT, YOU KNOW, ONE FACT BY ITSELF IS NOT SUFFICIENT TO FIND LIABILITY. I THINK THIS IS A, A DEFENSE THEORY DRESSED UP IN A LEGAL INSTRUCTION THAT SIMPLY IS NOT NECESSARY AND IS ARGUMENT, AND IT IS ALSO TO SOME EXTENT COVERED BY OTHER INSTRUCTIONS.
JUDGE DAVILA: MR. LEMENS, ANYTHING?
MR. LEMENS: I THINK IF THEY'RE GOING TO MAKE THE ARGUMENT THAT SHE HAS SOME ULTIMATE RESPONSIBILITY AS CEO, THERE'S A VIABLE AND NECESSARY INSTRUCTION IN LIGHT OF WHAT THE COURT HAS PREVIOUSLY FOUND AT THE MOTION IN LIMINE STAGE.
JUDGE DAVILA: WELL, THAT WAS -- THANK YOU. AND THAT FINDING WAS RELATED TO CERTAIN OTHER EVIDENCE COMING IN WITHOUT ADDITIONAL FOUNDATION. IT WAS -- I THINK SOME OF IT RELATED TO AGENCY AND WHETHER OR NOT CERTAIN STATEMENTS COULD COME IN. AND THIS ALMOST SOUNDS LIKE IT'S STRICT LIABILITY AND THAT IF SHE'S THE CEO, EVERYTHING THAT SHE DID, SAID, AND ANYTHING THAT THE COMPANY DID FALLS BACK TO HER. I KNOW THERE WAS TESTIMONY FROM BOTH SIDES, BOTH CROSS AND DIRECT EXAMINATION, THERE WAS ADDITIONAL EVIDENCE, I THINK, SOME -- IT MIGHT HAVE BEEN ONE OF THE VIDEOS THAT WE SAW OR CERTAINLY SOME OF THE OTHER WRITINGS THAT SUGGESTED THAT. I DON'T -- ARE YOU GOING TO ARGUE STRICT LIABILITY?
MR. LEACH: NO, YOUR HONOR.
JUDGE DAVILA: I DON'T THINK THIS IS NECESSARY. I UNDERSTAND THE SPIRIT OF THIS. I'M NOT GOING TO GIVE THIS. I THINK THE PARTIES WILL BE ABLE TO ARGUE THE EVIDENCE SUFFICIENTLY TO KEEP -- NOW THAT THE GOVERNMENT IS NOT GOING TO ARGUE STRICT LIABILITY OR A THEORY LIKE THAT, I THINK THE DEFENSE WILL BE ABLE TO SUGGEST TO THE JURY THAT WHATEVER THEY NEED TO DO, THAT HER POSITION AT THE COMPANY WAS NOT IN AND OF ITSELF ENOUGH TO FIND VIOLATIONS AS INDICATED IN THE INDICTMENT. SO I'M NOT GOING TO GIVE THAT INSTRUCTION. NUMBER 30 IS NEXT.
MR. LEMENS: YOUR HONOR, WE'LL JUST PRESERVE OUR OBJECTION.
JUDGE DAVILA: YES, OF COURSE.
MR. LEMENS: OKAY.
JUDGE DAVILA: AND NUMBER 30 IS THE DEFENSE PROPOSAL, REGULATORY VIOLATIONS, SUGGESTED NUMBER 30 FROM THE GOVERNMENT, THIS IS REGARDING -- I THINK I SAID, OR I TOLD THE PARTIES I WOULD GIVE AN INSTRUCTION LIKE THIS. I WAS CONCERNED A COUPLE OF TIMES DURING THE TESTIMONY -- I MAY HAVE ADVISED THE JURY ALSO -- BUT I CERTAINLY TOLD COUNSEL THAT THERE WAS CONCERN OF THE COURT THAT PROOF OF A VIOLATION OF A CIVIL REGULATION WOULD NOT SUFFICE FOR A CONVICTION IN THE CASE AND SOMEHOW WE NEEDED TO IMPART THAT. THIS IS BOTH OF YOUR EFFORTS TO INFORM THE JURY OF THAT, I THINK.
MR. LEACH: THAT'S CORRECT, YOUR HONOR.
MR. LEMENS: YES, YOUR HONOR.
JUDGE DAVILA: RIGHT. SO LET ME JUST SAY, MR. LEMENS, LINES 7 THROUGH 9 I DON'T THINK WERE NECESSARY. AND LINE 4, THE END OF LINE 4, GIVING THEM KNOWLEDGE, THE JURY KNOWLEDGE ABOUT FINAL DETERMINATION, I'M NOT SURE THAT'S NECESSARY TO ACCOMPLISH WHAT WE NEED TO DO.
MR. LEMENS: AND THAT WOULD CONTINUE THROUGH TO THE END OF LINE 6?
JUDGE DAVILA: THAT'S CORRECT. THAT'S CORRECT.
MR. LEMENS: SO THE COURT WOULD BE INCLINED TO GIVE LINES 10 THROUGH 13?
JUDGE DAVILA: WELL, I'M TELLING YOU MY INITIAL --
MR. LEMENS: OKAY.
JUDGE DAVILA: JUST MY INITIAL SANITATION, I'LL CALL IT HERE, JUST GOING THROUGH THESE.
MR. LEMENS: IF I MIGHT JUST RESPOND TO THOSE TWO SPECIFICALLY?
JUDGE DAVILA: YES, PLEASE.
MR. LEMENS: AND THEN WE CAN CONTINUE. I THINK LINES 7 THROUGH 9 WERE RESPONSIVE TO COMMENTS THAT WE HEARD FROM THE COURT REGARDING NEGLIGENCE, CONCERN ABOUT A NEGLIGENCE STANDARD.
JUDGE DAVILA: RIGHT.
MR. LEMENS: AND I THINK OUR POSITION IS THAT IT IS APPROPRIATE AND NECESSARY. AT LINES 4 THROUGH 6, I THINK MR. LEACH AND I ARE GOING TO TUMBLE INTO A DISCUSSION ABOUT WHAT THE RECORD SHOWS SHORTLY, BUT OUR POSITION IS THAT THERE HASN'T BEEN EVIDENCE OF A REGULATORY VIOLATION IN THE CASE AND THE JURY SHOULD BE INSTRUCTED NOT AS TO ACTUAL VIOLATIONS, BUT ALLEGED VIOLATIONS OR EVIDENCE OF REGULATIONS GENERALLY. THAT IS THE POSITION ANIMATING LINES 4 THROUGH 6. SO WE WOULD PRESERVE OUR POSITIONS THERE.
JUDGE DAVILA: OKAY. WELL, LET ME ASK YOU TO CRITIQUE, MR. LEMENS, THE GOVERNMENT'S VERSION FOUND ON ECF 42, PAGE 41 OF THE DOCUMENT, "YOU'VE HEARD REFERENCE AT TIMES DURING THE TRIAL TO FEDERAL REGULATIONS ENFORCED BY," AND THEN IT DESCRIBES CMS AND FDA. AND THEY THEN INDICATE, "IN AND OF ITSELF, A VIOLATION OF THESE REGULATIONS," ET CETERA, "DOES NOT ESTABLISH A VIOLATION OF CRIMINAL LAW. HOWEVER, IT MAY BE CONSIDERED." WHAT IS WRONG WITH THAT LANGUAGE?
MR. LEMENS: SO I THINK THERE'S A FEW THINGS. I'LL START WITH THE FIRST SENTENCE. THERE'S BEEN NO EVIDENCE AS TO FDA REGULATIONS OR VIOLATIONS IN THE CASE. THERE WAS CERTAINLY DISCUSSION OF AN INSPECTION. THERE WAS NO TESTIMONY AS TO THE RESOLUTION OF THAT INSPECTION, ANY FINDINGS RESULTING FROM THAT INSPECTION. CERTAINLY WE HAD THAT BACK AND FORTH PRETRIAL AS TO VARIOUS ASPECTS OF THE FDA AND ITS ACTIVITIES WITH RESPECT TO THERANOS, BUT THAT DID NOT COME INTO THE RECORD IN THE CASE. SO I THINK THE FDA AND THE REFERENCE TO THE FDA IS INAPPROPRIATE HERE.
JUDGE DAVILA: WELL, IT SAYS "REGULATIONS ENFORCED." THE VIOLATIONS COME IN THE SECOND SENTENCE I THINK.
MR. LEMENS: RIGHT. AND I'M NOT AWARE OF EVEN ANY DISCUSSION OF REGULATIONS RELATED TO THE FDA. THAT WOULD NOT BE APPROPRIATE. AS TO THE SECOND SENTENCE, IT PRESUMES A VIOLATION. I THINK AT THE VERY LEAST, THE REFERENCE SHOULD BE TO "IN AND OF ITSELF AN ALLEGED VIOLATION OF THESE REGULATIONS" FOR THE SAME REASONS THAT I JUST EXPLAINED. AND THEN IN THE THIRD SENTENCE, I THINK THE COURT HAD EXPRESSED SOME CONCERN WITH THE JURY CONSIDERING THIS EVIDENCE. THE FINAL SENTENCE OF WHAT THE GOVERNMENT HAS PROPOSED, STARTING WITH LINE 6 AND CONTINUING THROUGH LINE 8, IN OUR READING SUGGESTS THAT THE JURY CONSIDER THAT EVIDENCE, AND IT SUGGESTS THE JURY CONSIDER THAT EVIDENCE IN CONNECTION WITH EACH ELEMENT OF THE OFFENSE, AS OPPOSED TO SIMPLY FOR MS. HOLMES'S NOTICE, WHICH IS THE LIMITED PURPOSE THAT THE REGULATORY -- THE CMS REPORT AND OTHER TESTIMONY SURROUNDING THAT REPORT CAME IN IN THE CASE. SO I THINK THERE ARE SEVERAL ISSUES WITH WHAT THE GOVERNMENT HAS PROPOSED. I WILL NOTE ALSO FOR THE RECORD THAT THE GOVERNMENT CITED TO THE HUSSAIN AND THE REYES CASE. WE THINK THE RELIANCE THERE IS MISPLACED. BOTH OF THOSE HAD TO DO WITH ACCOUNTING STANDARDS IN WHICH THE ACCOUNTING STANDARD, REVENUE RECOGNITION, BACKDATING OPTIONS WAS CENTRAL TO THE STATEMENTS OR THE MISREPRESENTATIONS AT ISSUE. THAT IS NOT THE CASE HERE. SECOND, IN THE REYES CASE IN PARTICULAR, THE REGULATORY VIOLATION WAS UNDISPUTED, AND THAT'S REFLECTED IN -- IT'S REFLECTED IN THE CASE. I CAN HAND IT UP TO THE COURT. I JUST THINK THAT THIS IS A VERY DIFFERENT SITUATION WHERE THERE'S BEEN NO ESTABLISHED VIOLATION OF A REGULATION, AND THE JURY SHOULD NOT BE INSTRUCTED AS SUCH.
JUDGE DAVILA: OKAY. THANK YOU. MR. LEACH?
MR. LEACH: I'LL GO IN REVERSE ORDER, YOUR HONOR, WITH THE GOVERNMENT'S INSTRUCTION, WHICH I THINK GETS IT EXACTLY RIGHT AND IS TRIED AND TRUE FROM OTHER CASES IN THIS DISTRICT. YES, HUSSAIN AND REYES INVOLVED ACCOUNTING VIOLATIONS, AND IN REYES VIOLATIONS OF SOME OF THE SECURITIES LAWS, BUT THE OVERALL PRINCIPLE IS THE SAME. YOU'VE HEARD EVIDENCE THAT SOMETHING OTHER THAN THE PARTICULAR STATUTE THAT IS AT ISSUE MAY OR MAY HAVE NOT HAVE BEEN VIOLATED; THEY'RE NOT ON TRIAL FOR THOSE OFFENSES; THEY'RE NOT ON TRIAL FOR THOSE GAAP VIOLATIONS; THEY'RE ON TRIAL FOR WIRE FRAUD AND CONSPIRACY, AND YOU SHOULD CONSIDER THAT EVIDENCE IN CONNECTION WITH THE ELEMENTS THAT YOU'RE BEING ASKED TO CONSIDER HERE. SO I THINK THIS INSTRUCTION GETS IT EXACTLY RIGHT. I'M FINE WITH ADDING "AN ALLEGED" BEGINNING AT LINE 5. WE DON'T MEAN TO SUGGEST A VIOLATION ACTUALLY OCCURRED. I DO THINK THERE HAS BEEN TESTIMONY ABOUT FDA REGULATIONS. MS.
HOLMES TESTIFIED THAT THEY STOPPED USING THE NANOTAINER IN RESPONSE TO COMMENTS DURING THE FDA INSPECTION. THERE'S ALSO BEEN TESTIMONY ABOUT SUBMISSIONS, EITHER PRESUBMISSIONS OR 510K SUBMISSIONS. SO I DO THINK THERE'S BEEN SOME REFERENCE TO THOSE FEDERAL REGULATIONS AND I THINK THIS WOULD AID THE JURY. SO WHAT I THINK THE CONCEPT THAT THE COURT WANTS TO EXPRESS, AND I THINK IT'S A FAIR CONCEPT TO EXPRESS, IS THAT YOU'VE HEARD EVIDENCE ABOUT A REGULATORY SCHEME AND POTENTIAL VIOLATIONS. THEY'RE NOT ON TRIAL FOR THOSE OFFENSES. YOU CAN CONSIDER THAT EVIDENCE LIKE YOU CAN CONSIDER ALL OF THE EVIDENCE IN THIS CASE IN LIGHT OF THE ELEMENTS THAT THE GOVERNMENT IS REQUIRED TO PROVE. BUT IN AND OF ITSELF, AN ALLEGED VIOLATION OF THOSE REGULATIONS IS NOT WHAT YOU'RE BEING ASKED TO DECIDE HERE. SO WE THINK THAT'S CAPTURED IN THE GOVERNMENT PROPOSAL. IT'S BEEN TRIED AND TRUE IN OTHER SIMILAR CIRCUMSTANCES, AND WE URGE THE COURT TO ADOPT IT.
WITH RESPECT TO PAGE 41, WE HAVE NO PROBLEM WITH THE FIRST LINE, "YOU HAVE HEARD EVIDENCE REGARDING ALLEGED VIOLATIONS OF REGULATIONS AND INDUSTRY STANDARDS." I THINK THAT'S UNOBJECTIONABLE. THE NEXT TWO LINES ARE ACTUALLY FACTUAL ASSERTIONS. "YOU SHOULD KNOW THERE'S BEEN NO FINAL DETERMINATION," I MEAN, THAT'S A STATEMENT OF FACT, NOT A STATEMENT OF THE LAW THAT IS GOVERNING HERE, AND SO I DON'T THINK IT WOULD BE APPROPRIATE TO INSTRUCT THE JURY ON WHAT HAPPENED OR DIDN'T HAPPEN AFTER THIS CASE. "MANY OF THE ALLEGED VIOLATIONS WERE DISPUTED." AGAIN, THAT'S A FACTUAL MATTER. IF MS. HOLMES WANTED TO ELICIT TESTIMONY ON THAT, SHE WAS FREE TO DO SO. I THINK SHE CHOSE NOT TO BECAUSE SHE WANTS TO USE THE CMS REPORT AND ITS FINDINGS NOW AS THE EPIPHANY MOMENT FOR BREAKING OFF THE RELATIONSHIP WITH MR. BALWANI. THE -- WE AGREE THAT PARAGRAPHS -- OR LINES 7 THROUGH 9 ARE OBJECTIONABLE.
I THINK INJECTING DIFFERENT BURDENS OF PROOF AND NOTING THAT INDUSTRY STANDARDS DON'T CARRY THE FORCE OF LAW WILL JUST INJECT CONFUSION. AND THEN WITH RESPECT TO 10 AND 13, I THINK THE CONCEPT THERE IS VERY SIMILAR TO WHAT WE'RE TRYING TO GET AT IN OUR INSTRUCTION. I OBJECT TO STARTING AN INSTRUCTION BY SAYING "MS. HOLMES IS NOT GUILTY OF ANY OF THE OFFENSES." I THINK THAT'S ARGUMENT. BUT IF THE IDEA IS, YOU'VE HEARD EVIDENCE OF REGULATORY VIOLATIONS, SHE'S NOT ON TRIAL FOR THOSE REGULATIONS, THE POINT OF THIS EVIDENCE IS TO CONSIDER -- YOU MAY CONSIDER THIS EVIDENCE IN THE CONTEXT OF THE ELEMENTS THAT THE GOVERNMENT NEEDS TO PROVE FOR WIRE FRAUD AND CONSPIRACY, I THINK THIS IS GETTING AT SOMETHING SIMILAR TO WHAT WE TRIED TO GET AT WITH OUR LANGUAGE. SO FOR THOSE REASONS I THINK OUR INSTRUCTION IS BETTER AND MORE APPROPRIATE, AND I THINK THE COURT HAS IDENTIFIED ASPECTS ON PAGE 41 THAT ARE PARTICULARLY OBJECTIONABLE TO THE GOVERNMENT.
JUDGE DAVILA: ALL RIGHT. THANK YOU. SO, MR. LEACH, IF WE USED LINE 4 FROM PAGE 40, THAT IS MS. HOLMES'S -- "YOU HAVE HEARD EVIDENCE REGARDING ALLEGED VIOLATIONS OF REGULATIONS AND INDUSTRY STANDARDS," AND THEN WENT DOWN TO LINE 10, AGAIN OF MS. HOLMES, "MS. HOLMES IS NOT GUILTY OF ANY OF THE OFFENSES ALLEGED," AND THEN READ THROUGH 13, AND THEN ADD YOUR LINE 6, "HOWEVER, EVIDENCE OF SUCH REGULATORY VIOLATIONS MAY BE CONSIDERED, ALONG WITH OTHER EVIDENCE IN LIGHT OF," AND THE SPECIFIC ELEMENTS, I WONDER IF -- I'M NOT SURE THAT SPECIFIC ELEMENTS DESCRIBES SUFFICIENTLY. I THINK I UNDERSTAND WHAT YOU MEAN. I'M NOT SURE A JURY WOULD CAPTURE THAT AS EASILY. WHAT I'M SAYING IS TO PUT THOSE TWO IN AND ADD YOUR -- THIS LAST LINE AS THE FINAL.
MR. LEACH: THAT WOULD BE -- THAT WOULD BE FINE, YOUR HONOR, AND I'M HAPPY TO WORK WITH THE DEFENSE TO TRY TO CONNECT THOSE TWO.
JUDGE DAVILA: AND IT MAY BE SPECIFIC ELEMENTS IS THE ONLY WAY TO PROPERLY GUIDE THE JURY AS TO WHAT NEEDS TO BE PROVED FOR EACH COUNT.
MR. LEACH: YOU CAN EVEN JUST SAY, "IN CONNECTION WITH" -- OR "IN ASSESSING WHETHER THE GOVERNMENT HAS PROVED EACH OF THE COUNTS CHARGED IN THE INDICTMENT."
JUDGE DAVILA: SHOULD I LET YOU WORDSMITH THAT A BIT?
MR. LEACH: I'M SURE I COULD DO IT A LITTLE BIT BETTER THAN ON THE FLY.
MR. LEMENS: I IMAGINE WE'LL HAVE SOME THOUGHTS AS WELL, AND I'LL OF COURSE NEED TO CONSULT WITH MY COLLEAGUES.
JUDGE DAVILA: WITH YOUR TEAM, SURE.
MR. LEMENS: I THINK I'D JUST NOTE, I THINK THERE'S STILL THE CONCERN THAT THE SUGGESTION THAT THAT EVIDENCE HAS COME IN IN THE CASE FOR ANYTHING OTHER THAN MS. HOLMES'S NOTICE IS, OF COURSE, OF CONCERN TO THE DEFENSE.
JUDGE DAVILA: RIGHT. AND I THINK I INSTRUCTED THE JURY OF THAT, I INFORMED THEM AT THE TIME THAT SOME EVIDENCE CAME IN, THAT IT WENT TO HER STATE OF MIND. I THINK THAT WAS THE OBJECTION IF I'M NOT MISTAKEN.
MR. LEMENS: THAT WAS OUR UNDERSTANDING AS WELL. I THINK THE GOVERNMENT IS NOW TAKING A DIFFERENT -- A SLIGHTLY DIFFERENT POSITION, WHICH KIND OF TUMBLES US INTO NUMBER 31, SO PERHAPS MR. LEACH AND I CAN TAKE NUMBER 30 AND SEE WHAT WE CAN DO AND WHERE OUR RESPECTIVE POSITIONS ARE. BUT I DON'T KNOW IF THERE'S ANYTHING MORE WE CAN ACCOMPLISH THERE RIGHT NOW.
JUDGE DAVILA: OKAY. AND 31, THIS CMS REPORT, I'M NOT -- I JUST DON'T KNOW ABOUT FOCUSSING THE JURY AS TO A SPECIFIC EXHIBIT. IT JUST SEEMS LIKE THIS IS ARGUMENT AND IT DOESN'T BELONG IN AN INSTRUCTION. THAT'S JUST MY VIEW OF IT.
MR. LEMENS: SO I THINK IT'S, TO THE GOVERNMENT, AN IMPORTANT DOCUMENT IN THE CASE. IT CAME IN THROUGH ONE OF THEIR KEY WITNESSES WHO WAS HIGHLIGHTED IN OPENING AND WHO I EXPECT WE'LL HEAR MUCH ABOUT IN CLOSING ARGUMENT. WE PROPOSED IT FOR THAT REASON. THE GOVERNMENT HAS TAKEN THE POSITION THAT 4621A CAME IN FOR ITS TRUTH. WE THINK THE RECORD AS A WHOLE STRONGLY SUGGESTS THAT IS NOT THE CASE, AND I'M HAPPY TO WALK THE COURT THROUGH THAT RECORD. BUT OUR UNDERSTANDING IS THAT ALL OF 4621, THE PORTIONS OF THAT WHICH WERE ADMITTED, WHICH ARE A AND B, WERE ADMITTED FOR NOTICE PURPOSES, AND THAT WAS NOTICE TO MS. HOLMES, AND FOR A LIMITED PURPOSE. WE THINK IT WOULD BE NECESSARY AND APPROPRIATE TO INSTRUCT THE JURY AS TO THAT GIVEN WHAT THE -- WE EXPECT THE GOVERNMENT VIEWS AS THE IMPORTANCE OF THIS DOCUMENT. BUT AT THE VERY LEAST, TO CLEAR UP THE RECORD AS WE PREPARE FOR CLOSING ARGUMENTS, WE SHOULD GET CERTAINTY ON HOW THOSE EXHIBITS CAME IN AND FOR WHAT PURPOSE.
JUDGE DAVILA: MS. VOLKAR?
MS. VOLKAR: HI, YOUR HONOR. I'LL BE ADDRESSING THIS ONE. SO THERE ARE TWO ISSUES: ONE, WHETHER OR NOT THERE SHOULD BE AN INSTRUCTION SINGLING OUT A PIECE OF EVIDENCE. THE GOVERNMENT'S POSITION ALIGNS WITH THAT OF THE COURT, WHICH IS THERE SHOULD NOT BE AN INSTRUCTION FOCUSSED ON ONE PIECE OF EVIDENCE. THERE HAVE BEEN A MULTITUDE OF EXHIBITS THAT HAVE COME IN IN THIS CASE FOR A LIMITED PURPOSE. OFF THE TOP OF MY HEAD I CAN THINK OF A LOT OF 2016 AND 2017 MATERIALS, THE AACC CONFERENCE MATERIALS, THE DOCUMENTS THAT DEFENDANT SUBMITTED FOR PEER REVIEW, AND I CAN THINK OF A DOZEN EXHIBITS THAT THE DEFENSE SUBMITTED THAT I THINK IS GOING TO BE CORE TO THEIR CASE OF WHY SHE STILL BELIEVED IN THE TECHNOLOGY IN LATER TIME PERIODS. THOSE EXHIBITS CAME IN FOR THE LIMITED PURPOSE OF HER STATE OF MIND. BUT I DO AGREE WITH MR. LEMENS THAT THERE IS ALSO A FACTUAL DISPUTE, OR A DISPUTE ABOUT THE RECORD, AND IN THAT REGARD I'D ACTUALLY LIKE TO HAND UP, IF I COULD, YOUR HONOR, JUST A COUPLE OF PAGES OF TRANSCRIPT.
JUDGE DAVILA: SURE.
MS. VOLKAR: (HANDING.) SO FIRST AND FOREMOST, THE REASON WHY THERE IS A TRIAL EXHIBIT 4621A AND 4621B IS BECAUSE THE FIRST, THE COVER LETTER, CAME IN ENTIRELY WITHOUT LIMITATION, AND THAT'S THE PORTION OF THE TRANSCRIPT THAT I JUST HANDED TO YOUR HONOR. AND 4621B CAME IN FOR A LIMITED PURPOSE BECAUSE COUNSEL OBJECTED IN THE MOMENT, THE COURT INQUIRED OF THE GOVERNMENT WHAT THE PURPOSE WAS, AND IN THE MOMENT THE GOVERNMENT AGREED TO SEEK ADMISSION ONLY FOR A LIMITED PURPOSE. THE GOVERNMENT'S POSITION HAS ALWAYS BEEN, AND REMAINS TO THIS DAY, THAT THE CMS REPORT IS ADMISSIBLE IN ITS ENTIRETY. THE FIRST TIME AROUND WHEN WE ARGUED THIS SEVERAL MONTHS AGO, THE COURT AGREED WITH THE GOVERNMENT AND GRANTED WHOLESALE ADMISSION OF THE CMS REPORT, OF COURSE, IN ECF 798 AT PAGES 16 TO 20. THE DEFENSE HAS SINCE SUBMITTED FOUR MOTIONS TO RECONSIDER. THEY'VE NAMED THEM DIFFERENT THINGS. THEY CALL IT WHATEVER -- THEY CALL IT DIFFERENT TOPICS.
BUT THEY HAVE BEEN ASKING THE COURT REPEATEDLY, OVER AND OVER AND OVER AGAIN, TO RECONSIDER THAT INITIAL ORDER, WHICH IN THE GOVERNMENT'S VIEW WAS ENTIRELY PROPER. THE CMS REPORT IS ADMISSIBLE IN ITS ENTIRETY. AND I DON'T WANT TO REHASH ALL OF THOSE ARGUMENTS HERE. BUT THEN I WANT TO FAST FORWARD TO THE NOVEMBER 9TH DAY. NOW, ON NOVEMBER 9TH WHEN THIS WAS DISCUSSED YET AGAIN AMONG THE PARTIES AND THE COURT, THE GOVERNMENT PUT FORWARD THAT TO -- THE GOVERNMENT PUT FORWARD AS AN ALTERNATIVE, YET ANOTHER ALTERNATIVE IN ADDITION TO ITS OTHER ARGUMENTS, THAT AT THE VERY LEAST THE ENTIRETY OF THE DOCUMENT COULD COME IN FOR HER STATE OF MIND SO THAT THE PARTIES, THE GOVERNMENT, AND THE COURT DIDN'T HAVE TO SPEND TIME NIT-PICKING LINE BY LINE ALL OF THE DIFFERENT REDACTIONS THAT THE DEFENSE WAS SUGGESTING. THERE WAS NO RESOLUTION AT THE END OF THAT DISCUSSION. THEY HAVE CITED THE PORTIONS OF THE RECORD. I'VE READ THEM. THERE'S NO RESOLUTION. THEN IN THE MOMENT, WHEN DR.
DAS WAS TESTIFYING -- AND THIS IS WHERE I POINT YOUR HONOR SPECIFICALLY TO 5802 THAT I HANDED UP, LINES 5 THROUGH 13 -- THE GOVERNMENT SOUGHT TO ADMIT PAGES 1 THROUGH 4, WHICH IS THE COVER LETTER. THE COURT SAID, "I DO THINK AN APPROPRIATE FOUNDATION HAS BEEN LAID," OVERRULING THE OBJECTIONS THAT WERE MADE EARLIER, "THIS WILL BE ADMITTED OVER OBJECTION." AND THEN IT SAYS THE GOVERNMENT'S EXHIBIT WAS ADMITTED AND RECEIVED INTO EVIDENCE. AND THEN THE PARTIES -- AND THEN MR. LEACH AND THE WITNESS CONTINUED TO DISCUSS THE LETTER. THAT WAS THE ADMISSION OF 4621A. THERE'S NO INSTRUCTION FROM THE COURT HERE TO THE JURY THAT THIS IS FOR A LIMITED PURPOSE. THERE'S NO INSTRUCTION AT THIS POINT IN TIME. THERE WAS NO CLARIFICATION FROM DEFENSE COUNSEL WHAT WAS THE PURPOSE FOR THIS. THAT COMES LATER. LATER, 10, 15 MINUTES LATER, MR. LEACH SOUGHT TO INTRODUCE A NARROWED DOWN PORTION OF THE CMS REPORT. IN THE MOMENT DEFENSE COUNSEL ASKED WHAT THE PURPOSE WAS. AND FOR, TO BE FRANK, THE ORDERLY PROGRESSION, AND TO NOT RELITIGATE THE ISSUE FOR THE FIFTH TIME IN FRONT OF THE JURY, THE GOVERNMENT OFFERED IT FOR A LIMITED PURPOSE OF MS. HOLMES'S -- NOTICE TO MS. HOLMES.
JUDGE DAVILA: THOSE SPECIFIC PAGES?
MS. VOLKAR: THOSE SPECIFIC PAGES. AND THAT'S WHY, AT THE END OF THE DAY, YOUR HONOR, THOSE SPECIFIC PAGES WERE COLLECTED IN 4621B, AND THEY'RE NOTED IN THE TRIAL LOG, AND ALSO IN THOSE PORTIONS OF THE RECORD. I APOLOGIZE I DON'T HAVE THOSE, BUT DEFENSE COUNSEL CITED TO THEM. YOUR HONOR TURNED TO THE JURY AND INSTRUCTED THEM, AS YOU DO WHENEVER EVIDENCE IS ADMITTED FOR A LIMITED PURPOSE, THAT THOSE PAGES WERE TO BE ADMITTED FOR THE LIMITED PURPOSE OF NOTICE TO MS. HOLMES. THE RECORD IS AS CLEAR AS DAY. THE REASON THAT THERE ARE TWO EXHIBITS CURRENTLY IN THE FORM THAT IS GOING TO GO BACK TO THE JURY IS BECAUSE ONE WAS ADMITTED WHOLESALE AND ONE WAS ADMITTED FOR A LIMITED PURPOSE. NOW, WHY THIS IS SURPRISING TO THE GOVERNMENT TO HEAR ABOUT THIS ESSENTIALLY FOR THE FIRST TIME IN THE LAST WEEK IS THERE HAVE BEEN MULTIPLE TIMES THROUGHOUT THIS TRIAL -- YOUR HONOR IS FAMILIAR -- WHEN EITHER SIDE SEEKS TO CLARIFY, WHAT IS THE STATE OF THE DOCUMENT? OR WAS THIS PARTIALLY ADMITTED?
OR WHAT WAS THE PURPOSE AT THE END OF THE DAY, OR EVEN THE NEXT DAY AFTER READING THE TRANSCRIPT, OR EVEN A WEEK LATER OCCASIONALLY. WE ARE HEARING ABOUT THIS NOW WHEN EVIDENCE HAS CLOSED. EVIDENCE HAS CLOSED, AND THE DEFENSE IS TRYING TO RETROACTIVELY CHANGE THE RECORD AND TO GIVE AN INSTRUCTION TO THE JURY TELLING IT FOR THE FIRST TIME THAT THEY MUST CONSIDER 4621A FOR A LIMITED PURPOSE. THIS IS A GOOD JURY. THEY'VE BEEN TAKING NOTES. WHEN YOUR HONOR SAYS THAT SOMETHING IS ADMITTED FOR A LIMITED PURPOSE, THEY TAKE NOTES. THEY SCRIBBLE DOWN. THEY WRITE NEXT TO IT THAT THAT'S WHAT IT IS FOR. THEY WON'T HAVE THAT IN THEIR NOTES FOR PAGES 1 THROUGH 4 IN THE CMS LETTER. SO WE THINK THAT THE RECORD IS ABSOLUTELY CLEAR. THESE PAGES SHOW IT. THERE'S BEEN PLENTY OF ARGUMENT ABOUT THE CMS REPORT. THE GOVERNMENT'S POSITION HASN'T CHANGED. BUT THE KEY HERE IS, WHAT IS THE STATE OF THE EVIDENCE? AND I DO THINK IT MATTERS FOR THE PARTIES TO HAVE CLARITY ON THIS GOING INTO CLOSING ARGUMENT. DESPITE MY DISCUSSION ABOUT THE STATE OF THE RECORD, OF COURSE THIS INSTRUCTION SHOULD NOT BE GIVEN, OR IF THERE'S SOME KIND OF INSTRUCTION, IT SHOULD APPLY TO ALL OF THE EVIDENCE IN THE CASE THAT HAS COME IN FOR A LIMITED PURPOSE.
JUDGE DAVILA: THANK YOU.
MR. LEMENS: YES, IF YOU LOOK AT THESE TWO PAGES, MS. VOLKAR HAS EXPLAINED WHAT HAPPENED IN THE COURTROOM. SHE IGNORES THE LONGER CONTEXT OF THIS REPORT, WHICH STARTED BACK WHEN WE STARTED LITIGATING THIS ISSUE AT THE MOTIONS IN LIMINE STAGE, AT WHICH POINT THIS DOCUMENT WAS LITIGATED TOGETHER, BOTH THE COVER LETTER AND ITS ATTACHMENT.
JUDGE DAVILA: WHAT ABOUT THE EVIDENCE THAT WAS ACTUALLY ADMITTED TO THE JURY AND FOR THAT LIMITED PURPOSE, THEY HAVE IT? ARE YOU SEEKING NOW TO CHANGE THAT?
MR. LEMENS: NO. I THINK THE RECORD AS A WHOLE REFLECTS THAT EVERYONE UNDERSTOOD AT THE TIME THAT THAT EVIDENCE CAME IN FOR A LIMITED PURPOSE, AND IF YOUR HONOR PERHAPS WOULD BEAR WITH ME JUST TO KIND OF EXPLAIN THE BEFORE AND AFTER OF THIS SHORT PORTION SHE SHOWED YOU. PRIOR TO THE TRIAL THE COURT MADE CLEAR -- AND THIS IS AT DOCKET 989 AT 7 -- THAT IT WOULD TREAT THE COVER LETTER AND THE LETTER TOGETHER. THE ATTACHMENT IS A REPORT. THE COVER LETTER SUMMARIZES THE FINDINGS IN THAT REPORT. THERE'S REALLY NO WAY TO DISTINGUISH THE TWO AS SEPARATE. BOTH SPEAK OF FINDINGS FROM CMS. BOTH SPEAK TO THE SAME EVENT. THE REPORT -- THE COVER LETTER SIMPLY SUMMARIZES WHAT IS CONTAINED THEREIN. PRIOR TO THE TRIAL, WE MOVED TO EXCLUDE THE REPORT. THE GOVERNMENT'S EXPLANATION AT THAT TIME WAS THAT THERE IS NO UNFAIR PREJUDICE BECAUSE THE DEFENSE WILL BE ABLE TO CROSS-EXAMINE A CMS WITNESS, EITHER MS. BENNETT OR MR.
YAMAMOTO, AND THAT WILL THUS ELIMINATE THE 403 CONCERNS AND THE LITANY OF CONCERNS THAT WE RAISED. THE MORNING, SEVERAL DAYS BEFORE AND THEN THE MORNING OF, THE GOVERNMENT TOOK THE POSITION THAT IT WOULD ADMIT THE REPORT NOT THROUGH A CMS WITNESS, BUT THROUGH DR. DAS. DR. DAS OBVIOUSLY DID NOT DRAFT THE REPORT. HE COULD BE CROSS-EXAMINED ABOUT ITS CREATION OR THE CONTEXT IN WHICH IT WAS DRAFTED. AND THE GOVERNMENT'S RESPONSE AT THAT POINT WAS, DON'T WORRY, THIS JUST HAS TO COME IN JUST FOR STATE OF MIND. IT CAN COME IN FOR A NONHEARSAY PURPOSE. MR. LEACH, AT PAGE 5693 OF THE TRANSCRIPT, "THE ENTIRETY OF THE DOCUMENT IS ADMISSIBLE FOR HER STATE OF MIND FOR A NONHEARSAY PURPOSE." LATER THAT SAME PAGE, "SO I THINK THAT'S AN APPROPRIATE USE OF THE 2567. HE CAN AUTHENTICATE IT. HE GOT IT AND IT'S BEING OFFERED HERE FOR A NONHEARSAY PURPOSE."
"CERTAINLY WE CAN AUTHENTICATE IT THROUGH SARA BENNETT OR GARY YAMAMOTO OR ANOTHER CMS WITNESS, BUT I DON'T THINK WE HAVE TO FOR THE PURPOSES THAT WE'RE USING IT FOR WITH DR. DAS." THAT WAS THE DISCUSSION THE MORNING IT WAS ADMITTED. WHEN MR. LEACH LAID A FOUNDATION FOR THE REPORT WITH DR. DAS, IT WAS WITH RESPECT TO THE NOTICE OF MS. HOLMES. THE COVER LETTER, THE FIRST FOUR PAGES, WERE FIRST OFFERED AFTER THAT FOUNDATION. MR. WADE OBJECTED, CITING THE MORNING'S DISCUSSION, AND THE COURT ADMITTED THE DOCUMENT OVER THAT OBJECTION. MR. LEACH THEN WENT TO OFFER TWO ADDITIONAL SECTIONS OF THE DOCUMENT. HE OFFERED THE FIRST FOUR PAGES. THIS IS AT 5809 OF THE TRANSCRIPT. HE LAID THE SAME FOUNDATION. MR. WADE MADE THE SAME OBJECTION. THE COURT OVERRULED THE OBJECTION AND THEN GAVE A LIMITING INSTRUCTION TO THE JURY THAT IT WAS COMING IN FOR MS. HOLMES'S STATE OF MIND. IMPORTANTLY, THE THIRD TIME THAT PORTIONS OF THE DOCUMENT CAME IN -- THIS IS AT 5813 OF THE TRANSCRIPT -- MR.
LEACH LAID THE SAME OBJECTION, OR SAME FOUNDATION. MR. WADE MADE THE SAME OBJECTION. AND THE COURT'S COMMENTS -- THIS IS AT 5813, LINES 14 TO 15 -- "IT'S NOT FOR THE TRUTH OF THE MATTER. IS THIS LIKEWISE AS THE PREVIOUS ADMISSIONS?" PLURAL. "MR. LEACH: YES, YOUR HONOR, FOR STATE OF MIND." WE ALL UNDERSTOOD IN THE MOMENT THAT THE COVER LETTER, THE FIRST ADMISSION AND THE FIRST SET OF PAGES FROM THE REPORT, WERE ADMITTED FOR MS. HOLMES'S STATE OF MIND. THERE'S NO DISPUTE ABOUT THAT. THE COURT OVERRULED THE OBJECTION AND WE WENT ON. AFTER DR. DAS'S TESTIMONY, AFTER THE GOVERNMENT HAD CLOSED ITS CASE, MR. LOOBY CAME UP AND MADE A MOTION TO STRIKE THE REPORT IN LIGHT OF THE 403 CONCERNS. MR. LEACH MADE THE SAME REPRESENTATION TO THE COURT THAT THE DOCUMENT, BOTH 4621A AND 4621B, WAS ADMISSIBLE BECAUSE IT WAS OFFERED FOR A NONHEARSAY PURPOSE. THAT SHOULD DO IT. THE GOVERNMENT'S POSITION ON THIS HAS BEEN CLEAR. OUR UNDERSTANDING ON THIS HAS BEEN CLEAR. WE'RE NOT TRYING TO REOPEN OR RECREATE OR CREATE MISCHIEF, AS MS. VOLKAR SUGGESTS. AND I WOULD POINT YOUR HONOR TO THE PORTIONS OF THE TRANSCRIPT THAT I HAVE CITED.
JUDGE DAVILA: SO LET ME ASK YOU, WHY DO YOU NEED THIS INSTRUCTION? YOU CAN ARGUE IT. I DON'T THINK YOU NEED THE INSTRUCTION.
MR. LEMENS: WELL, AT THE VERY LEAST, I THINK WE NEED CLARITY THAT IT CAME IN FOR NOTICE SO THAT THE GOVERNMENT DOESN'T STAND UP IN CLOSING AND PUT UP THE COVER LETTER AND SUGGEST IT WAS OFFERED AND MAKE ARGUMENTS BASED ON THE FACT THAT IT WAS OFFERED FOR ITS TRUTH. THE INSTRUCTION WE THINK IS IMPORTANT. I, OF COURSE, UNDERSTAND IF THE COURT HAS A DIFFERENT VIEW. BUT WE THINK IT'S AN IMPORTANT DOCUMENT IN THE CASE.
JUDGE DAVILA: NO, SURE.
MR. LEMENS: AND IN LIGHT OF THE CONFUSION THAT THE GOVERNMENT HAS JUST PERHAPS EVEN JUSTIFIES THE INSTRUCTION EVEN FURTHER.
JUDGE DAVILA: OKAY.
MS. VOLKAR: WELL, YOUR HONOR, I THINK IT'S NO SURPRISE TO SAY -- MR. LEMENS MULTIPLE TIMES SAID WE ALL UNDERSTOOD. AND I ALSO THOUGHT WE ALL UNDERSTOOD IN THE ROOM WHAT HAPPENED BECAUSE YOUR HONOR WAS CRYSTAL CLEAR, THIS DOCUMENT IS ADMITTED, NO QUALIFICATIONS, UNLIKE ALL OF THE OTHER TIMES IN THE CASE WHEN YOU'VE TURNED TO THE JURY AND GIVEN THE TYPICAL INSTRUCTION THAT GOES WITH EVIDENCE THAT'S FOR A LIMITED PURPOSE. THAT DIDN'T HAPPEN FOR THE COVER LETTER. THAT, AGAIN, IS WHY THERE'S A 4621A AND A 4621B. AND AT THE END OF EVERY TRIAL DAY, THERE IS THE WONDERFUL SUPPORT STAFF THAT MEET AND TALK ABOUT THIS. THERE WAS NO UNCERTAINTY THERE, EITHER. 4621A WAS ENTIRELY ADMITTED, NO LIMITATION. 4621B WAS ADMITTED FOR A LIMITED PURPOSE. IT'S REFLECTED IN THE COURT'S TRIAL LOG AND MINUTE ORDER FOR THE DAY. THERE WAS NO CONFUSION IN THE MOMENT. THAT PART I AGREE WITH. THE CONFUSION NOW IS SURPRISING APPARENTLY TO BOTH SIDES. AND, AGAIN, THERE WAS AN EASY WAY TO SOLVE THIS IF THERE WAS ANY AMBIGUITY. THEN AT THE END OF EACH TRIAL DAY, AFTER LOOKING BACK AT THE RECORD, EACH SIDE HAS FREQUENTLY SOUGHT CLARIFICATION FROM YOUR HONOR AND ASKED THE COURT TO GO BACK AND INSTRUCT THE JURY THAT WHEN I MEANT THIS LIMITING INSTRUCTION, I MEANT IT WITH RESPECT TO EACH OF THESE EXHIBITS, OR I MEANT IT WITH RESPECTS TO ALL OF THIS. THAT NEVER HAPPENED. SO FROM THE JURY'S PERSPECTIVE RIGHT NOW, WHICH IS WHAT WE CARE ABOUT, I THINK, FOR PURPOSES OF THE STATE OF THE EVIDENCE, THIS IS WHAT THEY HEARD. WHAT THEY HEARD WAS ADMITTED, AND THEY DIDN'T HEAR ANY LIMITING INSTRUCTIONS ON THIS PIECE. I WOULD LIKE TO ADDRESS MR. LEMENS'S BROADER CONTEXT POINT, BUT IF YOUR HONOR --
JUDGE DAVILA: GO RIGHT AHEAD. GO RIGHT AHEAD.
MS. VOLKAR: SO ON THE BROADER CONTEXT POINT, AGAIN, I GO BACK TO THE GOVERNMENT'S POSITION HAS BEEN THE SAME THE ENTIRE TIME, THAT THE CMS REPORT IS FULLY ADMISSIBLE. THE FIRST MOTION TO RECONSIDER THAT I STOOD UP HERE AND DISCUSSED WITH YOUR HONOR BACK IN AUGUST, THE DEFENSE WAS TAKING THE POSITION THAT WHEN THE COURT GRANTED THE GOVERNMENT'S REQUEST TO ADMIT THE CMS REPORT, THAT DIDN'T EXTEND TO THE COVER LETTER. WHAT UNDID THEM WAS THEIR OWN MOTION IN LIMINE WHICH COVERED BOTH, AND THE COURT'S RULING WAS CLEARLY APPLICABLE TO BOTH, THAT THEY WERE GRANTED. BUT WE'RE STANDING HERE WITH MR. LEMENS SAYING THAT THEY'VE ALWAYS BEEN THE SAME. THE DEFENSE TOOK THE POSITION IN AUGUST THAT THE COVER LETTER SHOULD BE TREATED DIFFERENTLY FROM THE CMS REPORT. THE GOVERNMENT HAS ARGUED CONSISTENTLY THAT THE DOCUMENT IS FULLY ADMISSIBLE, AND ARGUED AS AN ALTERNATIVE POSITION THAT IT COULD COME IN FOR THE NONHEARSAY PURPOSE OF HER STATE OF MIND, AND IT TOOK THAT ALTERNATIVE POSITION THE MORNING OF DR.
DAS'S TESTIMONY IN LARGE PART BECAUSE THE DEFENSE WANTED TO CONTINUE TO GO LINE BY LINE AND DO A BUNCH OF REDACTIONS. THE GOVERNMENT LISTENED TO THEIR OBJECTIONS, EVEN THOUGH, UNDER THE COURT'S PRIOR RULING, THE ENTIRE CMS REPORT WAS ADMISSIBLE, AND THE GOVERNMENT SOUGHT TO REDUCE WHAT IT WAS SEEKING TO ADMIT THROUGH DR. DAS. AND THERE IS A DIFFERENCE BETWEEN THE COVER LETTER AND THE CMS REPORT, HOW IT CAME IN THROUGH DR. DAS. DR. DAS DID HIS OWN INDEPENDENT INVESTIGATION OF THE FINDINGS IN THE CMS REPORT AND HE AGREED WITH THEM 100 PERCENT. NOW, THAT'S ALSO TESTIMONY THAT THEY WANT OUT BECAUSE IT'S BAD FOR THEIR CASE. BUT THAT'S NOT THE STANDARD HERE. THE STANDARD IS ADMISSIBILITY. AND WHEN MR. LOOBY STOOD UP HERE A FEW DAYS LATER AND ARGUED THAT THIS MATERIAL SHOULD BE STRICKEN FROM THE RECORD, HE ARGUED ABOUT THE CONFRONTATION CLAUSE. WHAT IS THE POINT OF ARGUING ABOUT THE CONFRONTATION CLAUSE IF NONE OF IT CAME IN FOR A -- LIKE, IF IT CAME IN ONLY FOR A NONHEARSAY PURPOSE? WHEN MR. LEACH TALKED ABOUT THAT AND SAID THAT IN RESPONSE, HE WAS, IF NOT EXPLICITLY, IMPLICITLY TALKING ABOUT 4621B. BUT I WOULD PUT FORWARD, WHY WOULD THEY EVEN BE ARGUING ABOUT THE CONFRONTATION CLAUSE IF THE ENTIRETY CAME IN FOR A NONHEARSAY PURPOSE?
JUDGE DAVILA: THANK YOU. SO IS THERE A DANGER THAT THE JURY WILL BE CONFUSED BECAUSE SOME OF THIS WAS ADMITTED FOR A PURPOSE OTHER THAN STATE OF MIND?
MS. VOLKAR: I DON'T THINK SO, YOUR HONOR, BECAUSE I THINK THE STATE OF THE JURORS' NOTES RIGHT NOW IS THAT PAGES -- AGAIN, I'M LOOKING AT THE TRANSCRIPT PAGE -- OR 5802 FROM NOVEMBER 9TH. THE STATE OF THE JURORS' NOTES IS THAT PAGES 1 THROUGH 4 OF 4621, WHICH IS NOW LABELLED 4621A, IS FULLY ADMITTED. AND THEN I'M SURE THAT THEIR NOTES ALSO REFLECT THAT 4621, WHICH HAS BEEN LABELLED 4621B, WHICH IS THE REPORT -- THIS IS NOT WITHIN THE SAME DOCUMENT -- CERTAIN PAGES OF THAT CAME IN, BUT FOR A LIMITED PURPOSE. AND TO THE EXTENT THAT YOUR HONOR IS WORRIED ABOUT ONE DOCUMENT BEING PARSED OUT IN THAT MANNER, THERE HAVE BEEN TIMES DURING THIS TRIAL THAT, WITHIN ONE EMAIL, A TOP EMAIL GOES TO MS. HOLMES OR IS FROM MS. HOLMES AND THE COURT HAS INSTRUCTED THAT THAT ONE EMAIL IS ADMITTED FOR A LIMITED PURPOSE. THESE JURORS ARE SMART, THEY'RE PAYING ATTENTION, THEY'RE TAKING NOTES. WHEN YOUR HONOR GIVES INSTRUCTIONS, THE NINTH CIRCUIT IS CLEAR THAT WE PRESUME THE JURORS FOLLOW THE COURT'S INSTRUCTIONS. AND HERE THE RECORD COULD NOT BE CLEARER. SO, YES, THERE'S A LONG HISTORY AND CONTEXT OF ARGUING ABOUT THE CMS REPORT AMONG THE PARTIES. THE COURT IS VERY FAMILIAR WITH THAT. BUT WHAT WE NEED RIGHT NOW IS CLARITY ON THE RECORD, AND THE GOVERNMENT'S POSITION HAS BEEN, FOR THE LAST MONTH, THAT IT COULD NOT BE CLEARER THAT THE LETTER IS FULLY ADMITTED IN 4621A, AND THE CMS REPORT PORTIONS WERE ONLY ADMITTED FOR THE LIMITED PURPOSE OF HER STATE OF MIND.
JUDGE DAVILA: OKAY.
MS. VOLKAR: AND WE DON'T NEED AN INSTRUCTION ON EITHER.
JUDGE DAVILA: AND IS THE GOVERNMENT INTENDING TO ARGUE IN THEIR ARGUMENT SOMETHING DIFFERENT? ARE YOU INTENDING TO ARGUE THAT THE CMS, PARTS OF THE CMS LETTER WERE -- ARE FOR THE TRUTH OF THE MATTER ASSERTED THAT WERE NOT OFFERED FOR THE TRUTH OF THE MATTER ASSERTED, BUT ONLY FOR STATE OF MIND? DO YOU UNDERSTAND MY QUESTION?
MS. VOLKAR: I DO, AND I WANT TO BE CRYSTAL CLEAR IN RESPONSE. 4621B, THE CMS REPORT, BECAUSE THAT WAS ADMITTED NOT FOR THE TRUTH OF THE MATTER ASSERTED AND ONLY TO HER STATE OF MIND, THE GOVERNMENT IN ITS CLOSING ARGUMENTS WAS SPECIFICALLY NOT INTENDING TO ARGUE THAT WITH RESPECT TO THE TRUTH OF THE DOCUMENT. THE GOVERNMENT UNDERSTOOD 4621B WAS ADMITTED FOR A LIMITED PURPOSE. 4621A, THE COVER LETTER, THE GOVERNMENT WAS INTENDING TO ARGUE THAT TO THE FULL BENEFIT THAT IT THOUGHT IT WAS ENTITLED, WHICH WAS FOR THE TRUTH. AND IN THE MOMENT, IT WASN'T CLARIFIED. DEFENDANT WAITED UNTIL AFTER THE CLOSE OF EVIDENCE TO BRING THIS UP. AND I GO BACK TO EVEN THE INSTRUCTION THEY'RE IMPOSING -- OH, SORRY. EACH THE INSTRUCTION THAT THEY'RE SUGGESTING RECOGNIZES THE SPLIT BETWEEN THE TWO DOCUMENTS. THE ONLY REASON FOR THE SPLIT, THE 4621A AND THE 4621B, WAS BECAUSE THEY WERE ADMITTED FOR DIFFERENT PURPOSES.
JUDGE DAVILA: AND I THINK YOU'RE SAYING THE RECORD REFLECTS B WAS ADMITTED FOR STATE OF MIND ONLY.
MS. VOLKAR: CORRECT. AND THE GOVERNMENT ENTIRELY INTENDS TO ABIDE BY THAT.
JUDGE DAVILA: OKAY.
MR. LEMENS: YOUR HONOR, IF I MAY? THE COVER LETTER I'LL JUST READ: "AS A RESULT OF THE SURVEY, IT WAS DETERMINED THAT YOUR FACILITY IS NOT IN COMPLIANCE WITH ALL OF THE CONDITIONS REQUIRED FOR CERTIFICATION." THE GOVERNMENT SOUGHT TO PREVENT US FROM CROSS-EXAMINING A CMS WITNESS ON THAT STATEMENT ON THE PREPARATION OF THIS DOCUMENT BY ARGUING THAT THIS WOULD COME IN FOR A NONHEARSAY PURPOSE AND ONLY FOR MS. HOLMES'S STATE OF MIND. THAT WAS THE ARGUMENT. THAT WAS THE ARGUMENT MR. LEACH MADE AFTER -- DURING THE MOTION TO STRIKE. THE SECOND REASON IS IT CAME IN FOR THE STATE OF MIND ON MS. HOLMES, AND WE ASKED QUESTIONS OF DR. DAS THAT TOUCHED ON HER STATE OF MIND. SO IT CAME IN FOR A NONHEARSAY PURPOSE. THAT'S PAGE 7089 OF THE TRANSCRIPT. WE'VE BEEN VERY CLEAR ABOUT OUR POSITION. WE EITHER WANTED TO BE ABLE TO CROSS A CMS WITNESS ON THE CREATION OF THAT DOCUMENT, OR AT THE VERY LEAST IT SHOULD COME IN FOR -- WE WERE TOLD IT WAS COMING IN FOR A NONHEARSAY PURPOSE. WE STILL OBJECTED BECAUSE WE STILL HAVE CONCERNS. WE STILL HAVE A PENDING MOTION BECAUSE OF THE ANIMATING CONCERNS UNDER 403. BUFF THE GOVERNMENT'S POSITION NOW, TO TRY TO PUT THIS DOCUMENT IN FOR ITS TRUTH, TO ARGUE THAT REGULATORY VIOLATIONS WERE ESTABLISHED, TO ARGUE THAT IT SHOULD HAVE BEEN KNOWN IS BAFFLING TO ME. I THINK THE TRANSCRIPT IS CLEAR. YOUR HONOR REFERRED TO PREVIOUS ADMISSIONS. YOUR HONOR REFERRED TO AN INSTRUCTION REFERENCING THESE EXHIBITS AT PAGE 5813 TO 5814. AND I THINK THE JURY WAS PROPERLY INSTRUCTED AS TO THE LIMITED PURPOSE. TO SUGGEST THAT IT CAN COME IN NOW FOR ITS TRUTH RAISES CONCERNS, GREAT CONCERNS FOR THE DEFENSE.
JUDGE DAVILA: OKAY.
MS. VOLKAR: YOUR HONOR, IF I MAY JUST CLARIFY TWO POINTS? I THINK, ONE, YOUR HONOR PROBABLY REMEMBERS IT, BUT IF YOU WERE TO LOOK BACK AT THE TRANSCRIPT, THE ARGUMENT -- MR. LEACH ALSO SAID THAT THE CMS REPORT IS NOT TESTIMONIAL. SO IT WASN'T JUST THAT THE ONLY REASON THAT THIS COULD COME IN THROUGH DR. DAS WAS BECAUSE IT WENT TO HER STATE OF MIND. IT WAS AN ALTERNATIVE ARGUMENT. THE GOVERNMENT'S PRIMARY POSITION WAS, IS, AND WILL CONTINUE TO BE, THAT THE CMS REPORT AND THE LETTER ARE NOT TESTIMONIAL. THAT WAS ARGUED EACH OF THE SAME TIMES. MR. LEMENS JUST IS NOT READING THE FULL ARGUMENT BECAUSE IT SPANS MANY PAGES, TO BE FAIR. AND THEN THE SECOND POINT IS WHEN YOUR HONOR WAS TALKING ABOUT THE PREVIOUS ADMISSIONS, THIS WAS IN A TIME PERIOD WHEN MR. LEACH WAS MOVING THROUGH CERTAIN PAGES OF THE REPORT, AND YOU'LL RECALL CERTAIN PAGES AND VERY SPECIFIC SECTIONS WERE BEING ADMITTED TO TRY TO AVOID ASSAYS THAT WERE NOT ON THE BILL OF PARTICULARS, ADDRESSING A DIFFERENT CONCERN THAT THE DEFENSE HAS RAISED. SO WHEN YOUR HONOR WAS TALKING ABOUT THESE ADMISSIONS, WE WERE TALKING ABOUT THE PORTIONS OF THE CMS REPORT THAT WERE COMING IN IN PIECES. ALL OF THE CMS REPORT WAS INCLUDED AS 4621B, THAT WAS ADMITTED FOR A LIMITED PURPOSE, THE GOVERNMENT UNDERSTANDS THAT.
JUDGE DAVILA: ALL RIGHT. WELL, I THINK I'M GOING TO NEED TO LOOK AT THE TRANSCRIPT. THIS SHOULD HAVE BEEN RAISED, I THINK, AT SOME POINT IN TIME PRIOR TO JURY INSTRUCTIONS.
MR. LEMENS: YOUR HONOR, THE DISPUTE TUMBLED OUT WHEN THE GOVERNMENT INFORMED US OF THEIR POSITION.
JUDGE DAVILA: NO, I WISH WE HAD TIME TO DISCUSS THIS A LITTLE EARLIER THAN WHERE WE ARE NOW. BUT LET ME JUST STATE, I STILL, I'M STILL -- I DON'T HAVE GREAT COMFORT GIVING AN INSTRUCTION THAT RELATES TO A SPECIFIC PIECE OF EVIDENCE. I JUST AM NOT -- I'M TROUBLED BY THAT. AND I THINK THE GENESIS OF THIS IS BECAUSE YOU HAVE SOME DIFFERENCES AS TO WHAT THE EVIDENCE IS.
MR. LEMENS: AND WE RECOGNIZE THE COURT'S POSITION AND PRESERVE, OF COURSE, OURS, THAT ISSUE BEING INCLUDED.
JUDGE DAVILA: WELL, LET ME JUST SAY, I THINK I'M GOING TO HAVE TO READ THESE TRANSCRIPTS AGAIN, THE PAGES. IF YOU HAVE A SUMMATION OF THOSE THAT YOU'D LIKE ME TO LOOK AT, YOU'LL GIVE ME THOSE, THOSE PAGES.
MR. LEMENS: OF COURSE.
MS. VOLKAR: YOUR HONOR, IT IS ON 1188. IN FACT, MERE MINUTES BEFORE WE FILED, DEFENSE ADDED ADDITIONAL CITATIONS. SO ON 1188, ECF PAGE 43, THE DEFENSE ADDED THE -- I'M SORRY, THERE'S THE AUTHORITY THERE. THE DEFENSE SIGNIFICANTLY ADDED TO THAT AFTER THE GOVERNMENT PROVIDED ITS TRANSCRIPT LINES, WHICH ARE INCLUDED IN FOOTNOTE 40 AT THE BOTTOM OF THAT SAME PAGE.
JUDGE DAVILA: OKAY. ALL RIGHT. THANK YOU.
MS. VOLKAR: THANK YOU, YOUR HONOR.
JUDGE DAVILA: LET'S TURN TO 32, TRADE SECRETS. I'VE LOOKED AT THIS. LET ME, JUST FOR BREVITY'S SAKE, I HAVE -- THIS IS DEFENSE TRADE SECRETS. I HAVE SOME DISCOMFORT WITH LINES 3 THROUGH 10, WHICH IS THE, I GUESS, FOUNDATIONAL, I'LL CALL IT, ABOUT CALIFORNIA LAW. IT SEEMS TO ME, MR. LEMENS, THAT THE REAL INSTRUCTION, OR WHAT YOU WOULD SEEK TO INFORM THE JURY OF IS BEGINNING AT LINE 11, "EVIDENCE THAT MS. HOLMES OR THERANOS TOOK REASONABLE EFFORTS TO PROTECT TRADE SECRETS IS NOT EVIDENCE THAT MS. HOLMES ACTED WITH AN INTENT TO DEFRAUD."
MR. LEMENS: I CERTAINLY THINK THAT'S THE POINT OF THE INSTRUCTION, YOUR HONOR. I THINK THE PRIOR LINES IN OUR VIEW ARE IMPORTANT TO INSTRUCT THE JURY WHAT THE LAW IS, AS IS THE PROVINCE OF THE COURT. I'M CERTAIN, HAD THE DEFENSE CALLED AN EXPERT TO TRY TO OFFER THAT TESTIMONY AS TO WHAT THE LAW REQUIRES, IT WOULD HAVE BEEN INAPPROPRIATE AND OBJECTIONABLE, WHICH IS WHY WE DIDN'T DO THAT. I THINK WHAT WE HAVE SUMMARIZED IS WHAT WE UNDERSTAND TO BE THE STATE OF THE LAW. WE HAVE TRIED TO DO SO IN A NEUTRAL MANNER. I HAVE NOT -- TO MY KNOWLEDGE, THE GOVERNMENT HAS NOT OFFERED A COMPETING VIEW OF WHAT THE TRADE SECRETS LAW IS. THEY'VE, OF COURSE, RAISED CONCERNS WITH THIS INSTRUCTION AS A WHOLE, BUT I DON'T UNDERSTAND THERE TO BE ANY DISPUTE ABOUT WHAT THE STATE OF CALIFORNIA LAW IS. AND IT'S CITED, OF COURSE, IN THE AUTHORITY THAT WE HAVE PROVIDED.
JUDGE DAVILA: WHAT IS IN THE EVIDENCE REGARDING TRADE SECRETS? HAS THERE BEEN ANY -- FIRST OF ALL, THERE'S NO EXPERT TESTIMONY ABOUT TRADE SECRETS AS I RECALL.
MR. LEACH: THERE'S NOT EXPERT TESTIMONY, YOUR HONOR. THERE IS AN EMAIL THAT WAS ADMITTED DURING MS. HOLMES'S TESTIMONY SPELLING OUT THE COMPANY'S POLICY WITH RESPECT TO TRADE SECRETS.
JUDGE DAVILA: THAT WAS A DRAFT?
MR. LEACH: IT WAS A DRAFT, CORRECT. SO THERE'S THAT EVIDENCE ABOUT THE BACK AND FORTH SHE HAD WITH --
JUDGE DAVILA: BUT IS THERE EVIDENCE THAT THAT WAS THE COMPANY'S POLICY THAT WAS ADHERED TO, ACCEPTED, FOLLOWED? IT SEEMS LIKE THAT WAS INFORMATIVE TO MS. HOLMES, BUT THERE'S -- I DON'T RECALL ANY EVIDENCE THAT THAT WAS COMPANY POLICY.
MR. LEACH: I DON'T HAVE A CLEAR MEMORY, YOUR HONOR, BUT IT DOESN'T MATTER, AND LET ME PLEASE TELL YOU WHY.
JUDGE DAVILA: SURE.
MR. LEACH: THE JURY IS NOT REQUIRED TO FIND ANYTHING RELATING TO TRADE SECRETS. THIS IS A RED HERRING INSTRUCTION. THE JURY IS REQUIRED TO FIND, DID SHE HAVE THE INTENT TO DECEIVE OR TO CHEAT? NOW, THE GOVERNMENT ARGUES SHE DID NOT DISCLOSE THE USE OF THIRD PARTY SIEMENS MACHINES TO INVESTORS, TO MR. PARLOFF, TO OTHER AUDIENCES. HER RESPONSE TO THAT IS, I WAS PROHIBITED FROM DOING THAT, OR I THOUGHT I WAS PROHIBITED FROM DOING THAT BECAUSE OF TRADE SECRETS LAW. WHAT TRADE SECRETS LAW IS OR IS NOT IS IRRELEVANT. WHAT MATTERS IS WHAT IS IN HER HEAD WITH RESPECT TO HER INTENT. SHE COULD BE TOTALLY RIGHT. SHE COULD BE TOTALLY WRONG. IT'S A FACTUAL MATTER RELATING TO WHAT HER INTENT IS AND WHAT HER UNDERSTANDING IS. SO THERE'S NO POINT TO INSTRUCTING ON WHAT TRADE SECRETS LAW, THE OBJECTIVE, IS. WHAT MATTERS IS WHAT IS IN HER MIND AND WHAT HER INTENT WAS. AND THE GOVERNMENT'S CONCERN IS ACTUALLY MOST ACUTE WITH THE LAST TWO LINES THAT YOUR HONOR WAS SUGGESTING MIGHT BE APPROPRIATE.
WE THINK IT'S TOTALLY INAPPROPRIATE. WE THINK THAT THIS IS SINGLING OUT PARTICULAR EVIDENCE. I THINK THE COURT SHOULD NOT BE IN THE BUSINESS OF DOING THAT. AND THIS IS COMPLETELY UNBALANCED WITH RESPECT TO TRADE SECRETS LAWS, YOUR HONOR, BECAUSE A PARTY CAN PROTECT ITS TRADE SECRETS THROUGH A CONFIDENTIALITY AGREEMENT. THIS IS BLACK LETTER LAW IN THE NINTH CIRCUIT. I WOULD CITE UNITED STATES VERSUS NOSAL, 844 F.3D 1024. IT'S A 2016 CASE. THERE HAS BEEN SOME APPEALS FROM THAT, BUT I DON'T THINK IT TOUCHES ON THIS ISSUE, WHICH IS A COMPANY CAN PROTECT ITS TRADE SECRETS THROUGH CONFIDENTIALITY AGREEMENTS. AND WHAT IS BEING PROPOSED HERE IS TOTALLY UNNECESSARY. WHAT MATTERS IS WHAT WAS IN MS. HOLMES'S MIND. MAYBE SHE THOUGHT SHE WAS REASONABLY PROTECTING TRADE SECRETS. MAYBE SHE COULD HAVE GOTTEN A CONFIDENTIALITY AGREEMENT WITH WALGREENS, OR A MORE ROBUST CONFIDENTIALITY AGREEMENT AND PROTECTED HERSELF THAT WAY. BUT THIS IS INSTRUCTING ON AN AREA OF LAW THAT THE JURY DOES NOT NEED TO DECIDE.
JUDGE DAVILA: WELL, THAT WAS -- EXCUSE ME. THAT'S A CONCERN THAT I HAD. ISN'T THIS ASKING US TO ASK THE JURY TO DETERMINE WHETHER OR NOT THERE WAS A TRADE SECRET AND WHETHER OR NOT THERE WAS A VIOLATION OF A TRADE SECRET? IT SEEMS LIKE THAT IS ANCILLARY. WHAT IS REALLY AT ISSUE IS WHAT YOUR CLIENT BELIEVED IN HER, IN HER MIND, AND DO WE NEED TO -- DO WE NEED TO TELL THEM, THE JURY, THAT THEY HAVE TO FIND OUT WHAT A TRADE SECRET IS? THAT SEEMS TO BE BEYOND THE SCOPE HERE.
MR. LEMENS: WELL, IT'S BEEN OUR POSITION THAT NONE OF THIS SHOULD COME IN. I THINK THE LAST TIME I WAS UP HERE IN FRONT OF THE COURT, WE WERE TALKING ABOUT THIS SAME ISSUE BACK IN MAY, AND THE COURT ALLOWED THE EVIDENCE OF REASONABLE MEASURES TO COME IN. OUR POSITION HAS BEEN AND CONTINUES TO BE THAT THAT IS -- ANYTHING THAT CONSTITUTES A REASONABLE MEASURE IS LEGALLY REQUIRED CONDUCT AND, AS SUCH, IS NOT PROPERLY CONSIDERED BY A JURY IN DETERMINING MS. HOLMES'S LIABILITY. I WILL CITE THE VALLEJO CASE, THAT'S UNITED STATES V. VALLEJO, V-A-L-L-E-J-O, 237 F.3D 1008. THAT'S OUT OF THE NINTH CIRCUIT. THE GOVERNMENT, THROUGHOUT ITS CASE, HAS PUT EVIDENCE INTO THE RECORD OF TRADE SECRETS -- OF CONFIDENTIALITY PRACTICES, LIMITATIONS ON INFORMATION WITHIN THE COMPANY. WE HEARD THAT FROM MS. GANGAKHEDKAR, DR. ROSENDORFF, AND MR. EDLIN, THE USE OF NONDISCLOSURE AGREEMENTS, LIMITATIONS ON ACCESS, THE PRESENCE OF SECURITY. THEY HAVE PUT THIS EVIDENCE INTO THE CASE. WE, OF COURSE -- THEY, OF COURSE, CROSS-EXAMINED MS. HOLMES ABOUT CERTAIN PRACTICES, THE USE OF LITIGATION, THE FACT THAT THE COMPANY AGGRESSIVELY PROTECTED ITS INTELLECTUAL PROPERTY. I THINK THAT WAS A THEME OF MR. LEACH'S CROSS-EXAMINATION. OUR POINT IS NOT TO LITIGATE THROUGH INSTRUCTIONS WHAT IS AND IS NOT A REASONABLE MEASURE. YOU'LL SEE IN WHAT WE PROPOSED WE DO NOT SUGGEST THAT NONDISCLOSURE AGREEMENTS ARE OR ARE NOT REASONABLE, THAT THE CONDUCT THAT THE COMPANY ENGAGED IS OR IS NOT REASONABLE. IT'S SIMPLY TO INFORM THE JURY THAT REASONABLE EFFORTS ARE REQUIRED UNDER CALIFORNIA LAW, AND REASONABLE EFFORTS CANNOT BE CONSIDERED IN THE CONTEXT OF THIS CASE.
JUDGE DAVILA: I'M NOT SURE THIS INFORMS AS TO THAT. PARDON ME. I THINK I UNDERSTAND YOUR POINT, BUT I THINK THIS IS TOO BROAD WHEN YOU'RE GIVING A BACKGROUND ABOUT CALIFORNIA LAW. IT JUST SEEMS TO ME YOU'RE ASKING THE JURY TO MAKE A DECISION AS TO WHAT CALIFORNIA LAW IS, AND THEN TO DETERMINE REASONABLE EFFORTS, AND I DON'T THINK THAT'S APPROPRIATE. I JUST -- I THINK ON DIRECT SOME OF THIS TRADE SECRETS INFORMATION CAME UP, AND PERHAPS THAT WAS IN RESPONSE TO THE EVIDENCE THAT HAD COME IN FROM OTHER WITNESSES ON THE PROSECUTION, BUT --
MR. LEMENS: I TAKE YOUR HONOR'S POINT THAT THIS IS BROAD AND PERHAPS AS A THEME HAS BEEN TOO LONG. I DO THINK, AT THE VERY LEAST, THE LAST TWO LINES ARE NECESSARY IN LIGHT OF THE VALLEJO CASE AND THIS CONCEPT OF LEGALLY REQUIRED CONDUCT. BUT I'M HAPPY TO CAUCUS WITH THE TEAM AND SEE IF THERE'S SOMETHING THAT WE CAN DO THAT ADDRESSES THE COURT'S CONCERNS.
JUDGE DAVILA: WELL, THANK YOU. I'M NOT INCLINED TO GIVE THIS AS IT IS FOR THE REASONS THAT I HAVE OBSERVED AND MENTIONED. "REASONABLE EFFORTS," YOU KNOW, I'LL ALLOW YOU TO WORK ON THAT. I DON'T KNOW IF THERE'S OTHER LANGUAGE THAT CAN BE USED ABOUT MS. HOLMES'S CONDUCT, AS SHE TESTIFIED, MAY BE CONSIDERED WITH ALL OF THE OTHER EVIDENCE AS TO HER INTENT TO DEFRAUD. THAT'S REALLY WHAT THIS FOCUSES ON, AND I'M NOT SURE YOU NEED TO SPECIFY TRADE SECRETS. YOU CAN CERTAINLY ARGUE THAT. BUT IT'S REALLY THE EFFORTS THAT SHE MADE. IT'S A COLLECTIVE EFFORT, I THINK WHAT I HEAR YOU SAYING, THAT THE COMPANY MAY HAVE MADE. AND WE'RE TALKING ABOUT -- I THINK THERE WAS EVIDENCE ABOUT PEOPLE HAVING TO CHECK IN WITH SECURITY AND THOSE TYPES OF THINGS. IS THAT WHAT THIS IS REALLY COVERING?
MR. LEMENS: YEAH, THERE'S A BEVY OF EVIDENCE IN THE RECORD, AND I IMAGINE THE GOVERNMENT WILL ARGUE THAT THE COMPANY CREATED A BROAD CULTURE OF SECRECY. THEY WILL TRY TO USE ALL OF THAT EVIDENCE TO SUGGEST A BROADER THEME IN THEIR CLOSING ARGUMENT. THAT IS, OF COURSE, WHAT WE'RE CONCERNED ABOUT. LEGALLY REQUIRED CONDUCT IS NOT AN APPROPRIATE CONSIDERATION BY THE JURY. REASONABLE MEASURES FALL WITHIN THAT BUCKET OF LEGALLY REQUIRED CONDUCT.
JUDGE DAVILA: MAYBE THAT'S WHAT YOU SHOULD -- MAYBE THAT'S HOW YOU SHOULD --
MR. LEMENS: YOU KNOW, IF I KEEP TALKING, I MIGHT WRITE IT MYSELF. BUT LET ME TALK TO THE TEAM AND SEE WHAT WE CAN COME UP WITH.
JUDGE DAVILA: THAT SOUNDED VERY SIMPLE AND ELEGANT, AND THAT IS REALLY WHAT THE CONCEPT IS, WITHOUT HAVING TO SPECIFY. AND THEN YOUR TEAM, WHOEVER IT IS WHO HAS THE PRIVILEGE OF ARGUING, CAN CERTAINLY MAKE THAT ARGUMENT, "THAT THE EVIDENCE SHOWS THAT THIS IS CONSISTENT WITH." THAT'S REALLY THE SPIRIT OF WHAT YOU WANT TO BE ABLE TO DO, I THINK.
MR. LEMENS: THAT'S CORRECT, YOUR HONOR.
JUDGE DAVILA: SO I'LL LET YOU WORK ON THAT. WE'LL PASS THIS. THE NEXT IS NUMBER OF WITNESSES.
MR. LEMENS: I'M GOING TO PASS THE PODIUM TO MR. CLEARY.
JUDGE DAVILA: OKAY. THANK YOU. IS THERE A MODEL INSTRUCTION THAT TALKS ABOUT NOT MAKING A DECISION BASED ON THE NUMBER OF WITNESSES?
MR. LEACH: THERE IS, YOUR HONOR, AND THE COURT HAS ALREADY AGREED TO GIVE IT AT JURY INSTRUCTION NUMBER 9, WHICH SAYS, "THE WEIGHT OF THE EVIDENCE AS TO A FACT DOES NOT NECESSARILY DEPEND ON THE NUMBER OF WITNESSES WHO TESTIFY ABOUT IT. WHAT IS IMPORTANT IS HOW BELIEVABLE THE WITNESSES ARE AND HOW MUCH WEIGHT YOU THINK THEIR TESTIMONY DESERVES." THE SAME INSTRUCTION ALSO SAYS "YOU CAN BELIEVE SOME OF WHAT A WITNESS SAYS, ALL OF IT, OR NONE OF IT." THE DEFENSE'S PROPOSED INSTRUCTION FROM THE SAND MODEL FEDERAL JURY INSTRUCTIONS IS WAY TOO LONG. IT'S ARGUMENT IN LIGHT OF OTHER INSTRUCTIONS THAT THE COURT HAS ALREADY GIVEN. IT REPEATS THE BURDEN OF PROOF BEYOND A REASONABLE DOUBT, AGAIN, WHOLLY UNNECESSARILY, AND WE THINK THESE CONCEPTS ARE ADEQUATELY ADDRESSED BY THE CREDIBILITY OF WITNESSES INSTRUCTIONS.
JUDGE DAVILA: WELL, WITH THAT, MR. CLEARY, WELCOME TO THE LECTERN.
MR. CLEARY: IT'S GOOD TO BE BACK, YOUR HONOR. RICHARD CLEARY ON BEHALF OF MS. HOLMES. THE INSTRUCTION THAT MR. LEACH JUST REFERENCED, I THINK, ADDRESSES AN ANALYTICALLY CONCEPTUALLY DISTINCT POINT, WHICH IS THE NUMBER OF WITNESSES WHO TESTIFY TO A PARTICULAR PROPOSITION AND THE WEIGHT THAT SHOULD BE AFFORDED TO THAT PARTICULAR PROPOSITION SIMPLY BY VIRTUE OF THE NUMBER OF WITNESSES WHO TESTIFY TO IT, THE SAND MODEL INSTRUCTION, THE FIFTH CIRCUIT INSTRUCTIONS, THE SIXTH CIRCUIT INSTRUCTIONS HAVE A DIFFERENT PURPOSE, WHICH IS SIMPLY TO INSTRUCT THE JURY AS TO THE OVERALL NUMBER OF WITNESSES IN A CASE CALLED BY EITHER SIDE. AND HERE, AS THE COURT WELL KNOWS, THE GOVERNMENT CALLED 29 WITNESSES. MS. HOLMES CALLED 3 WITNESSES. THERE HAS BEEN AS LOPSIDED PRESENTATION. SOME OF THE WITNESSES CALLED BY THE GOVERNMENT MS. HOLMES MAY WELL HAVE CALLED EITHER TO INTRODUCE DOCUMENTS THROUGH, OR WE MAY HAVE CALLED OTHER WITNESSES BECAUSE THE COURT PERMITTED US TO INTRODUCE AFFIRMATIVE EVIDENCE THROUGH CERTAIN WITNESSES. AND HERE THIS IS JUST A STANDARD INSTRUCTION FROM THE SAND MODEL TO MAKE SURE THAT THE JURY DOES NOT DRAW ANY INFERENCES AS TO MS. HOLMES'S GUILT OR INNOCENCE SIMPLY BY REFERENCE TO THE NUMBER OF WITNESSES CALLED IN THE CASE OVERALL.
JUDGE DAVILA: SURE. NO, I THINK I UNDERSTAND THAT. THERE'S SOME CONCERN FROM A DEFENSE POSITION PERHAPS THAT BECAUSE THE GOVERNMENT BEARS THE BURDEN OF PROOF, IT'S -- AND A JURY MIGHT NOT PUT THIS TOGETHER, BUT THEY'RE GOING TO CALL AS MANY WITNESSES AS THEY FEEL THEY NEED TO TO PROVE THEIR CASE, AND OFTENTIMES THAT MAY OUTNUMBER THE DEFENSE BECAUSE THE DEFENSE, AS YOU KNOW, YOU DON'T HAVE TO PUT ANYTHING ON BECAUSE OF THAT BURDEN. AND THIS INSTRUCTION, AND THE ONE THAT MR. LEACH REFERENCED, WHICH IS A MODEL INSTRUCTION, RECOGNIZES THAT, THAT THE JURY SHOULD NOT, SHOULD NOT WEIGH THE EVIDENCE JUST BECAUSE OF THE NUMBER OF WITNESSES THAT TESTIFY ABOUT A FACT OR TESTIFY FOR A SIDE. THAT'S NOT PROPER. IT REALLY DOES BOIL DOWN TO THE QUALITY OF THE WITNESSES' TESTIMONY AND WHAT THE JURY DOES WITH THAT TESTIMONY, AND HOW THEY BELIEVED THE TESTIMONY.
AND THE FACT THAT THE DEFENSE CALLS FEWER WITNESSES THAN THE GOVERNMENT MIGHT ALSO BE SEEN AS RELIANCE ON THE STATE OF THE EVIDENCE AND THAT THE DEFENSE FEELS THAT THEY HAVEN'T PROVED THEIR CASE AND WE DON'T HAVE TO PROVE IT FOR THEM AND WE'RE NOT GOING TO OFFER ANYTHING ELSE BECAUSE THEY HAVEN'T PROVED THEIR CASE. I JUST -- I THINK THAT THE MODEL INSTRUCTIONS, MR. CLEARY, PROPERLY INFORM THE JURY THAT THEY'RE NOT TO CONSIDER, AND THEY DON'T ADD UP WITNESSES AND THEN KEEP A SCORE CARD ON WITNESSES. I THINK THE MODEL INSTRUCTION PROPERLY INFORMS THE JURY THAT THEY NEED TO CONSIDER NOT JUST THE NUMBER, AND THEY SHOULDN'T JUST CONSIDER THE NUMBER AS A WEIGHT ON A SCALE, BUT RATHER THE QUALITY AND THE NATURE OF THE WITNESS'S TESTIMONY, INCLUDING THEIR DEMEANOR, THEIR BELIEVABILITY, THEIR CREDIBILITY. THE COURT GIVES THEM A MODEL INSTRUCTION THAT HAS SEVERAL FACTORS THAT THEY MAY CONSIDER, INCLUDING ANYTHING ELSE THAT THE JURY FEELS BEARS ON BELIEVABILITY AND CREDIBILITY IN THEIR ASSESSMENT OF THE TESTIMONY. AND I THINK THAT'S A RATHER FULSOME INFORMATION FOR THE JURY TO HAVE. SO I'M RESPECTFULLY GOING TO DECLINE YOUR INVITATION TO GIVE THIS, WITH YOUR OBJECTION NOTED.
MR. CLEARY: THANK YOU, YOUR HONOR.
JUDGE DAVILA: YOU'RE WELCOME. NUMBER 34 I THINK IS THE DUTY TO DELIBERATE, WE'RE NOW IN THE FINAL INSTRUCTIONS, AND I'LL USE THIS CONSISTENT WITH WHAT I'VE DONE PREVIOUSLY.
MR. CLEARY: THAT MAKES SENSE TO US, YOUR HONOR.
JUDGE DAVILA: AND THEN 35, I THINK YOU'D LIKE TO GIVE GOOGLE SOME FREE ADVERTISING HERE.
MR. CLEARY: THIS WAS INCLUDED IN THE PRELIMINARY INSTRUCTIONS AT OUR REQUEST. WE THINK IT'S CLARIFYING AND OBVIOUSLY IT'S VERY MINOR FOR THE JURY.
MR. LEACH: NO FURTHER ARGUMENT, YOUR HONOR. THE COURT HAS BEEN VERY CAREFUL IN REMINDING THE JURY NOT TO CONSIDER OUTSIDE EVIDENCE. THIS IS FINE.
JUDGE DAVILA: WE'LL RECOGNIZE GOOGLE. WE'LL GIVE THEM THAT. HAVE WE -- LET'S SEE. OH, YES. PUNISHMENT, ALLEGED OFFENSE, OFFENSES, EXCUSE ME. ANY OBJECTION TO THAT, MR. LEACH, FROM YOUR TEAM?
MR. LEACH: NO, YOUR HONOR.
JUDGE DAVILA: ALL RIGHT. WE'LL GIVE THAT, MR. CLEARY.
MR. CLEARY: NOW, YOUR HONOR, I'M GOING TO RETURN THE PODIUM TO MR. LEMENS.
JUDGE DAVILA: OH, OKAY? WE'RE NOT FINISHED? WE HAVE MORE TO DO?
MR. LEACH: YOUR HONOR, I THINK ON THE LAST PAGE, PAGE 54, THERE IS SOME HIGHLIGHTED LANGUAGE ABOUT THE READBACK OR PLAYBACK INSTRUCTION. WE PUT THIS IN HERE BECAUSE WE THOUGHT IT COULD EMERGE AT SOME POINT, BUT WE'RE NOT ASKING THE COURT TO GIVE IT IN ITS FINAL INSTRUCTIONS TO THE JURY.
JUDGE DAVILA: RIGHT.
MR. LEACH: AND I SUPPOSE WE CAN WAIT UNTIL WE GET A REQUEST TO DECIDE HOW TO HANDLE THIS.
MR. CLEARY: WE AGREE WITH THAT. IT WOULD BE PREMATURE TO INCLUDE IT, AND WE'LL JUST ADDRESS THAT ISSUE IF AND WHEN IT ARISES AND RESERVE ANY OBJECTIONS UNTIL THAT TIME.
JUDGE DAVILA: OKAY. WELL, WE'LL BE THINKING ABOUT THIS. I APPRECIATE YOU NOT WANTING TO INVITE THE JURY TO COME BACK AND HEAR THE TRIAL AGAIN THROUGH TRANSCRIPT TESTIMONY. ALL RIGHT. THANK YOU. ALL RIGHT. WELL, I THINK WE ALL HAVE SOME WORK TO DO. MS. VOLKAR?
MS. VOLKAR: YOUR HONOR, BECAUSE I UNDERSTOOD THE COURT WOULD LIKE THE PARTIES TO SUBMIT A REVISED VERSION, REALLY JUST A COUPLE OF CLARIFYING QUESTIONS ON THAT. ONE, DO YOU WANT US TO REFILE, OR WOULD SUBMITTING A WORD VERSION UPDATED TO MS. KRATZMANN SUFFICE?
JUDGE DAVILA: YES, THE LATTER, PLEASE. YEAH, YOU DON'T HAVE TO REFILE. YOU'RE OKAY WITH THAT IF BOTH SIDES ARE OKAY WITH THAT?
MS. VOLKAR: THAT WORKS FOR THE GOVERNMENT.
MR. LEMENS: AND FOR MS. HOLMES, YOUR HONOR. I THINK I WOULD JUST -- I THINK THE ONE THING WE LEFT OFF WAS THE VERDICT FORM, AND I BELIEVE WHERE WE LEFT OFF WITH MS. SAHARIA IS THAT WE WOULD MEET AND CONFER AND PROVIDE AN UPDATED COPY BEFORE WE GET INTO IT WITH THE COURT.
JUDGE DAVILA: THAT SOUNDS GREAT.
MS. VOLKAR: I'M HAPPY TO SUBMIT THAT ALONG WITH THE WORD VERSION.
JUDGE DAVILA: OKAY.
MS. VOLKAR: TO AID THE PARTIES IN PROVIDING THAT UPDATED WORD DOCUMENT, THERE WERE TWO PORTIONS AT LEAST THAT I WAS CONFUSED ABOUT, AND IT MAY JUST BE ME. ON THE CMS REPORT INSTRUCTION, NOT TO REOPEN THAT DISCUSSION, BUT I THOUGHT THE COURT MIGHT HAVE BEEN TRENDING TOWARDS NOT GIVING THE INSTRUCTION. I THOUGHT IN LIGHT OF THE PARTIES' DISPUTE ABOUT THE STATE OF THE RECORD, I LOST WHERE WE LANDED WITH RESPECT TO THE ACTUAL INSTRUCTION.
JUDGE DAVILA: I WANT TO READ THE PORTIONS OF THE TRANSCRIPTS JUST TO GIVE ME SOME GUIDANCE AND GREATER INFORMATION, SO WE'RE GOING TO DEFER THAT ONE FOR NOW. YOU CAN PUT AN ASTERISK, WHATEVER IT IS, IN YOUR -- IN THE WORD DOC JUST AS A PLACEHOLDER.
MS. VOLKAR: WILL DO, YOUR HONOR. AGAIN, THE GOVERNMENT, SO IT WASN'T LOST IN OUR OTHER ARGUMENT, THINKS EITHER NO INSTRUCTION OR A GENERIC INSTRUCTION FOR ALL EVIDENCE THAT WAS ADMITTED FOR A LIMITED PURPOSE SHOULD BE GIVEN.
JUDGE DAVILA: OKAY.
MS. VOLKAR: I DON'T KNOW IF MR. LEMENS WANTS TO RESPOND TO THAT. THE LAST PORTION I WANTED TO CLARIFY WAS ON KNOWINGLY, SO I'LL LET MR. LEMENS RESPOND TO THAT IF HE WANTS TO.
JUDGE DAVILA: OKAY.
MR. LEMENS: I DON'T HAVE ANYTHING FURTHER ON THAT OTHER THAN WE'LL AWAIT THE COURT'S GUIDANCE AFTER IT HAS A CHANCE TO REVIEW THE TRANSCRIPT.
JUDGE DAVILA: OH, I'M SORRY, MS. SAHARIA, DO YOU HAVE SOMETHING?
MR. LEMENS: I'M GOING TO LET HER SPEAK TO THE KNOWINGLY ISSUE.
JUDGE DAVILA: OKAY.
MS. SAHARIA: I DON'T HAVE ANYTHING, YOUR HONOR. BUT IF MS. VOLKAR WANTS TO DISCUSS KNOWINGLY, THEN I'M HAPPY TO DISCUSS IT. I DON'T HAVE ANYTHING ELSE TO RAISE.
JUDGE DAVILA: OKAY.
MS. VOLKAR: THIS IS JUST ANOTHER CLARIFICATION. IT WAS RIGHT BEFORE OUR BREAK, WE WERE DISCUSSING THE KNOWINGLY INSTRUCTION ON PAGE 31. WE DISCUSSED BOTH THE GOVERNMENT'S ADDITION, WHICH THE DEFENSE OBJECTS TO IN YELLOW, THAT WAS OF COURSE BRACKETED LANGUAGE FROM THE MODEL, AND THEN WE ALSO DISCUSSED THE DEFENSE'S ADDED PORTIONS ON LINES 7 TO 9 THAT THE GOVERNMENT OBJECTS TO. I WASN'T CLEAR WHERE THE COURT LANDED, IF WE SHOULD MAKE ANY CHANGES TO THAT, RESUBMIT IT AS IS, OR IF THE COURT HAD ANY DIRECTION TO GIVE TO THE PARTIES AT THIS TIME.
JUDGE DAVILA: SURE. WELL, MY DIRECTION IS KEEP THIS AS A PLACE HOLDER AND I'LL HAVE MS. KRATZMANN PROBABLY SEND YOU AN EMAIL ABOUT THIS. I'LL DO THAT WHEN I LOOK AT THESE OTHER TRANSCRIPTS. SO JUST KEEP IT OPEN. KEEP IT OPEN.
MS. SAHARIA: OKAY.
MS. VOLKAR: THANK YOU. THAT'S ALL I WANTED TO CLARIFY.
JUDGE DAVILA: I DID HAVE -- ANYTHING ELSE, MS. SAHARIA?
MS. SAHARIA: NO, YOUR HONOR.
JUDGE DAVILA: OH, I'M SORRY. MR. LEACH, ANYTHING?
MR. LEACH: THERE WAS ONE OTHER MATTER, AND I'M SO SORRY TO DO THIS PIECEMEAL.
JUDGE DAVILA: NO, NOT AT ALL.
MR. LEACH: AND I HAVEN'T HAD A CHANCE TO TALK TO MS. SAHARIA ABOUT THIS, BUT IN THE INSTRUCTION FOR WIRE FRAUD, WE CURRENTLY JUST HAVE THE DATES AND THE DOLLAR AMOUNTS OF THE WIRES. THIS IS ON PAGE 26.
JUDGE DAVILA: ECF 26, 25 OF THE DOCUMENT.
MR. LEACH: YES, ECF 26, 25 OF THE DOCUMENT. BEGINNING AT LINE 8 THROUGH 19, WE'RE IDENTIFYING THE WIRES BY DATES AND DOLLAR AMOUNT. IT MAY BE HELPFUL TO THE JURY TO ALSO IDENTIFY THE PARTICULAR INVESTOR THAT IT RELATES TO, AND WE WOULD RECOMMEND INSERTING, AT THE END OF EACH SENTENCE, A PARENTHETICAL JUST RELATING TO "AND THE INVESTOR NAME."
JUDGE DAVILA: THAT MIGHT BE HELPFUL.
MS. SAHARIA: MY INITIAL INSTINCT IS TO SAY THAT THOSE INVESTOR NAMES ARE NOT IN THE INDICTMENT. THE PATIENT NAMES ARE IN THE INDICTMENT, WHICH IS WHY THEY WERE INCLUDED, BUT THE INVESTOR NAMES ARE NOT. I ASSUME, OF COURSE, THE GOVERNMENT WILL PROBABLY PUT UP A CHART FOR THE JURY IN CLOSING THAT SHOWS THE NAMES CORRESPONDING TO THE COUNTS AND THE DOLLAR FIGURES, BUT I'M NOT SURE THAT WE SHOULD BE PUTTING THE NAMES IN WHEN IT'S NOT IN THE INDICTMENT. BUT LET ME TALK TO MY TEAM AND WE'LL CONSIDER THE REQUEST.
JUDGE DAVILA: WELL, IF IT'S PUT IN PARENTHETICALLY, I THINK IT'S FOR IDENTIFICATION TO AID, AS LONG AS THERE'S AGREEMENT THAT THE PARTY RELATES TO THE SPECIFIC COUNT.
MS. SAHARIA: I THINK THAT WE KNOW WHICH PARTY RELATES TO WHICH COUNT. SO LET ME CONFER WITH MR. LEACH ABOUT THAT.
JUDGE DAVILA: OKAY. I DON'T SEE THE REAL HARM IN THAT. I DON'T SEE ANY CONFUSION. IT WOULD PROBABLY BE MORE HELPFUL TO THE JURY. THEY HAVE GOT JURY BINDERS, REMEMBER, THAT THEY HAVE ALL OF THE PARTIES AND WITNESSES.
MS. SAHARIA: UNDERSTOOD.
JUDGE DAVILA: I HAD A COUPLE THAT I WANTED TO, A COUPLE OF THOUGHTS THAT I WANTED TO RAISE, AND I DON'T KNOW WHO IS GOING TO SPEAK TO THESE FROM EACH SIDE, BUT I THINK MR. DOWNEY TALKED ABOUT TIMING OF ARGUMENT, AND MAYBE THAT WAS SOMETHING THAT MR. SCHENK WAS TALKING ABOUT AS FAR AS WE KNOW WE HAVE THE 16TH AND 17TH.
MS. SAHARIA: I'LL LET MR. DOWNEY COMMENT ON IT, YOUR HONOR.
JUDGE DAVILA: OKAY, THANK YOU. AND I THINK YOU WANTED TO DISCUSS TIMING SUCH THAT THERE WON'T BE, OR WE CAN MINIMIZE INTERRUPTIONS OF YOUR ARGUMENTS.
MR. DOWNEY: I THINK THAT MR. SCHENK AND I TALKED ABOUT THIS DURING THE LUNCH BREAK, AND I THINK HE'S NOT YET QUITE SURE HOW LONG HE'LL BE.
JUDGE DAVILA: OKAY.
MR. DOWNEY: BUT IT SEEMS LIKE HE THINKS HE'LL BE LONG ENOUGH THAT REALISTICALLY THE DEFENSE ARGUMENT WILL PROBABLY HAVE TO BE DIVIDED BETWEEN THURSDAY AFTERNOON, THE 16TH, AND THEN EXTEND INTO FRIDAY MORNING. SO I'LL DO MY BEST, AS WE GET CLOSER, TO GIVE THE COURT A SENSE OF WHAT THE DIVISION IS.
JUDGE DAVILA: THANK YOU. THAT WILL BE HELPFUL SO I KNOW WHEN TO DO BREAKS AND WHEN NOT. I DON'T WANT TO INTERRUPT YOUR ARGUMENTS UNTOWARDLY IF I CAN AVOID IT.
MR. DOWNEY: RIGHT.
JUDGE DAVILA: AND IF WE NEED TO HAVE ANY OTHER BREAKS, YOU'LL FACTOR THAT INTO YOUR PRESENTATIONS, TOO.
MR. DOWNEY: THAT'S RIGHT. AND I'LL GIVE -- I DON'T THINK IT WILL BE INCONSISTENT WITH THE WAY THAT WE'VE BROKEN DURING THE COURSE OF THE TRIAL. BUT I'LL TALK TO MR. SCHENK IN ADVANCE ABOUT, YOU KNOW, HOW FREQUENTLY BREAKS WOULD PROBABLY BE APPROPRIATE.
JUDGE DAVILA: OKAY. MR. SCHENK?
MR. SCHENK: JUST ONE QUESTION ON THAT, YOUR HONOR. IF THE ARGUMENT WAS GOING TO GO PAST A TIME WE WOULD TAKE BREAKS, 11:30, LET'S SAY, WOULD IT BE HELPFUL TO PLAN A BREAK AT 11:30, EVEN IF THE CLOSING ARGUMENT HASN'T BEEN COMPLETED BY THEN?
JUDGE DAVILA: WELL, LET'S -- YOU KNOW, IT PROBABLY WOULD BE BEST IF WE CAN PLAN AHEAD AND I CAN INFORM THE JURY OF THAT. SOMETIMES, YOU KNOW, AS ARGUMENTS GO, I DON'T WANT THEM TO GET RESTLESS, AND IF THEY KNOW THERE'S A TIME PERIOD WHEN THEY'RE GOING TO BREAK, THAT'S SOMETIMES HELPFUL. SO IF YOU CAN COORDINATE THAT, I THINK THAT WOULD BE HELPFUL FOR EVERYBODY.
MR. DOWNEY: WE'LL TALK ABOUT THAT, YOUR HONOR. I THINK WE'LL KNOW MORE AS WE GET CLOSER.
JUDGE DAVILA: RIGHT. WHAT ABOUT -- THE OTHER QUESTION THAT I ASKED YOU WAS YOUR THOUGHTS, IF YOU HAVE ANY, ABOUT WHETHER OR NOT I SHOULD GIVE THE JURY A COPY OF THE INSTRUCTIONS WHILE THEY'RE BEING INSTRUCTED? I TOLD YOU MY PRACTICE IS NOT TO DO THAT REGULARLY. THIS MIGHT BE A DIFFERENT CASE. BUT I JUST WANTED TO REMIND YOU OF THAT. GIVE IT SOME THOUGHT. YOU DON'T HAVE TO TELL ME NOW. THEY DO -- EACH JUROR DOES GET AN INDIVIDUAL COPY OF THE INSTRUCTIONS IN THE DELIBERATION ROOM. EACH ONE HAS A COPY. THE QUESTION IS, SHOULD I GIVE ONE TO THEM WHILE I'M INSTRUCTING? THAT'S UP TO YOU, OR NOT UP TO YOU, BUT I WANT YOUR INPUT ON THAT. AND I ALSO WANTED TO ASK ABOUT -- I'VE LOOKED AT THE INSTRUCTIONS. I THINK I HAVE TALKED A LITTLE BIT ABOUT, I'LL JUST USE THE TERM, HAISCHER AND THAT TYPE OF ARGUMENT AND/OR CONCURRENT INSTRUCTION. I DIDN'T SEE ANY IN HERE, WHICH MEANS TO ME THE PARTIES AREN'T INTENDING TO INFORM THE JURY OF THAT. THE NEXT QUESTION I HAVE IS, DOES THE COURT NEED TO BE MINDFUL, CONCERNED ABOUT ANY COMMENT ABOUT HAISCHER-TYPE CONDUCT, MATERIAL THAT IS GOING TO BE PRESENTED TO THE JURY THAT MIGHT EITHER RAISE AN OBJECTION OR BE OBJECTIONABLE BECAUSE IT'S -- THERE'S NO FOUNDATION? FOR EXAMPLE, EXPERT TESTIMONY, ET CETERA, THOSE TYPES OF THINGS. I'M JUST LOOKING AHEAD AT THAT TO AVOID AN OBJECTION DURING EITHER OF YOUR CLOSINGS, WHICH I KNOW THAT NO LAWYER LIKES. I JUST RAISE IT AS AN ISSUE. IT'S AT LEAST SOMETHING I'M THINKING ABOUT.
MR. DOWNEY: WE'LL THINK ABOUT THAT, YOUR HONOR. MY SENSE IS THAT I THINK THE INSTRUCTION ACTUALLY -- IT'S A LITTLE AMBIGUOUS FROM THE RECORD IN HAISCHER BECAUSE I THINK THE INSTRUCTION GIVEN THE SECOND TIME AFTER THE REMAND WAS WITH THE BENEFIT OF AN EXPERT --
JUDGE DAVILA: RIGHT.
MR. DOWNEY: -- BUT I THINK THE INSTRUCTIONS NEVERTHELESS ON CORE INTENT BOTH TIMES KIND OF MIRRORED CORE INTENT INSTRUCTIONS, SO I DON'T KNOW THAT THERE'S ANY ISSUE AROUND THAT. BUT WE'LL LOOK AT THAT IN LIGHT OF YOUR HONOR'S COMMENT.
JUDGE DAVILA: RIGHT. I JUST -- YOU KNOW, I HOPE YOU'LL PARDON ME, BUT I'M JUST LOOKING AHEAD THINKING, WELL, I COULD SEE A POTENTIAL WHERE THERE MIGHT BE AN ARGUMENT THAT, YOU KNOW -- AND YOU'LL PARDON ME -- THAT OVERSTATES THE EVIDENCE, IF YOU WILL, THAT IS PERMISSIBLE THAT OVERSTATES THE EVIDENCE WITHOUT, FOR EXAMPLE, EXPERT TESTIMONY OR THOSE TYPES OF THINGS. AND THIS IS RELATED REALLY TO, LET ME JUST BE CLEAR, STATE OF MIND TYPE ISSUES AND WHAT IS NEEDED FOR THAT.
MR. DOWNEY: I THINK I UNDERSTAND THE GIST OF YOUR HONOR'S COMMENTS AND I DON'T ANTICIPATE IT. BUT I WOULD ALSO SAY THAT I THINK THERE ARE A NUMBER OF ISSUES, IN LIGHT OF THE FORM IN WHICH EVIDENCE HAS BEEN ADMITTED ON BOTH SIDES, THAT WE'RE MINDFUL OF THAT MIGHT RAISE POTENTIAL ISSUES DURING THE GOVERNMENT'S CLOSING, AND I THINK IF IT'S HELPFUL TO THE COURT, YOU KNOW, WE WOULD CERTAINLY BE HAPPY TO FLAG THOSE IN ADVANCE TO -- YOU KNOW, BECAUSE THERE CERTAINLY ARE -- I THINK, AS YOUR HONOR SAW TODAY, THERE'S CONFUSION AROUND A PARTICULAR PIECE OF EVIDENCE WHICH HAS BEEN MUCH DISCUSSED, BUT THERE'S BEEN A GOOD DEAL OF OTHER EVIDENCE ADMITTED FOR A LIMITED PURPOSE, AND I WOULDN'T WANT TO SEE THAT PURPOSE EXCEEDED IN THE GOVERNMENT'S CLOSING.
MR. SCHENK: I DON'T HAVE A RESPONSE TO THAT LAST COMMENT. I APPRECIATE THE COURT RAISING THE CONCERNS REGARDING THE LACK OF EXPERT TESTIMONY AND WHETHER THAT AFFECTS THE ARGUMENTS THAT CAN BE MADE. I THINK IT MIGHT BE ONE OF THOSE THAT WE JUST HAVE TO SEE IT. IT WOULD BE NICE TO AVOID THOSE ISSUES DURING CLOSING. WE'LL THINK ON THAT, AND IF WE HAVE SOME FURTHER SUGGESTIONS, WE'LL MAKE THEM TO THE COURT.
JUDGE DAVILA: RIGHT. I JUST WANTED TO SHARE WITH YOU MY THOUGHT AS WE'RE GOING INTO THE WEEKEND WHEN YOU'LL BE DOING YOUR PREPARATIONS AND ONGOING. SO WE'LL SEE WHERE WE ARE WITH THIS. I'M GOING TO BE HERE MONDAY MORNING. I HOPE THAT WE CAN GET THIS DONE TODAY, "THIS" MEANING THE INSTRUCTIONS, TODAY SO YOU CAN HAVE THEM. BUT I'LL BE HERE ON MONDAY. YOU KNOW I'M NOT HERE TUESDAY AND WEDNESDAY. MAYBE WE SHOULD PLAN ON TOUCHING BASE IN ANY EVENT MONDAY SOMETIME JUST TO GET A STATUS ON THINGS.
MR. DOWNEY: THAT WOULD BE FINE, YOUR HONOR. CAN I JUST RECONFIRM ON THE SCHEDULE, WE'LL BE HERE ON THE 16TH AND 17TH?
JUDGE DAVILA: THAT'S RIGHT.
MR. DOWNEY: AND THEN THE JURY WILL BE DELIBERATING THE 20TH, THE 21ST, AND THE 23RD.
JUDGE DAVILA: CORRECT.
MR. DOWNEY: AND THEN FROM THERE, DO WE SEE WHERE WE ARE?
JUDGE DAVILA: I THINK SO. I BELIEVE -- MY RECOLLECTION IS THAT THE JURY TOLD US THAT THEY WILL DELIBERATE THAT WEEK, THE WEEK OF THE 20TH, SAVE FOR THE 22ND.
MR. DOWNEY: THAT'S RIGHT. IT WOULD NOT BE MY PREFERENCE, FRANKLY, YOUR HONOR, TO ASK THEM TO COME IN THE WEEK OF THE 27TH JUST BECAUSE OF THE EFFECT OF THE -- THAT THAT MIGHT HAVE ON THE JURY AND RECOGNIZING THE HOLIDAY. MY PREFERENCE, JUST TO LET THE COURT KNOW, WOULD BE THAT THEY BE ASKED TO COME BACK ON THE 3RD IF THEY HAVEN'T REACHED A VERDICT BY THE 23RD. BUT I'LL LEAVE THAT FOR THE COURT'S CONSIDERATION.
MR. SCHENK: I THINK FIRST WE CAN DEAL WITH THAT ON THE 23RD, AND TO SOME EXTENT I WOULD THINK THAT WE DEFER TO THE JURY AND WHAT THEIR DESIRES ARE, OBVIOUSLY IF THE COURT IS AVAILABLE. IF THE COURT IS NOT AVAILABLE, THEN WE HAVE OUR ANSWER. BUT IF THE JURY IS INTERESTED IN DELIBERATING AND THINKS THAT THEY WILL BE HERE AND THEY CAN BE PRODUCTIVE, I DON'T KNOW THAT WE SHOULD ACTIVELY DISCOURAGE THAT. BUT MAYBE THAT'S SOMETHING TO TAKE UP, IF NECESSARY, ON THE 23RD.
JUDGE DAVILA: RIGHT. I CAN'T RECALL IF WE TOLD THEM THAT WE WOULD BE AVAILABLE THE WEEK OF THE 27TH. I MEAN, I WILL BE IF THAT'S NEEDED, BUT I THINK I TOLD THEM WE COULD -- MAYBE I TOLD YOU WE COULD ARGUE AND THEN PUT THE WHOLE -- THEIR DELIBERATIONS OVER TO THE FIRST OF THE YEAR. THAT WASN'T DESIRABLE.
MR. DOWNEY: I THINK MY THOUGHT WOULD SIMPLY BE THAT THEY BE TOLD AT SOME POINT THAT IF THEY'RE NOT DONE BY THE 23RD, THEY HAVE THE OPTION OF COMING BACK ON THE 3RD AND NOT BEING HERE ON THE 27TH SO IT DOESN'T HAVE ANY UNDUE EFFECT ON THEIR DELIBERATIONS.
JUDGE DAVILA: ALL RIGHT. WELL, I'M ALWAYS LEERY ABOUT TRYING TO GIVE ANY KIND OF LIMITS OR TIME LIMITATIONS OR THINGS TO THEM. I DON'T WANT TO DISRUPT THAT DELIBERATIVE PROCESS.
MR. DOWNEY: RIGHT.
JUDGE DAVILA: SO LET'S JUST -- YEAH. OKAY. WE'LL KEEP AN EYE ON IT.
MR. DOWNEY: GOOD ENOUGH. THANKS, YOUR HONOR.
JUDGE DAVILA: OKAY.
COURT CLERK: COURT IS ADJOURNED.
(COURT ADJOURNED AT 2:05 P.M.)