Sawant et al v. Ramsey et al
ORDER granting in part and denying in part 338 Motion in Limine; denying 339 Motion to Preclude; denying 341 Motion in Limine; denying 342 Motion in Limine; granting in part and denying in part 343 Motion in Limine; denying 344 Motion in Limine; denying 345 Motion in Limine. See attached Memorandum of Decision. Signed by Judge Vanessa L. Bryant on 5/8/12. (Hildebrand, J.)
UNITED STATES DISTRICT COURT
DISTRICT OF CONNECTICUT
ANIL SAWANT, ET AL.
GEOFFREY RAMSEY ET AL.,
CIVIL ACTION NO.
May 8, 2012
EVIDENTIARY RULING ON PLAINTIFFS’ AND DEFENDANTS’ MOTIONS IN LIMINE
In advance of trial and in conjunction with the Joint Trial Memorandum, the
Parties have filed several motions in limine addressing the presentation of
evidence at trial. The Court has reviewed the motions in limine and hereby issues
the following evidentiary rulings:
Plaintiffs’ Motion to Preclude Defendants’ Exhibits A and B
Plaintiffs seek to exclude Defendants’ Exhibits A and B, correspondence
from the a United States Securities and Exchange Commission (“SEC”) reporting
the conclusion of the investigation as to Geoffrey Ramsey and Host America and
recommending that no enforcement action be taken. Plaintiffs’ challenge the
admission of this evidence on several grounds, asserting that it is inadmissible
hearsay, lacks authentication, and that the documents’ prejudicial value strongly
outweighs any probative value because the letters include no explanation of why
no further enforcement action was pursued and may lead the jury to conclude
solely based on this evidence alone that neither Defendant committed a violation
of securities laws.
The Court agrees with the Plaintiffs that the prejudicial impact of the letters
far exceeds any probative value that they may confer. Fed. R. Evid. 403.
Admission of the letters would cause substantial unfair prejudice against the
Plaintiffs due to the risk that the jury would rely excessively on the letter as an
indication that the SEC determined as a matter of law that the Defendants
committed no wrongdoing, when in fact the jury must examine the evidence
presented and determine for itself whether any violations of the securities laws
were committed. The Court’s concerns regarding the prejudicial nature of the
letters are further compounded by the minimal probative value offered by the
letters in light of the dearth of any explanation as to why an investigation was not
pursued. The absence of any explanation would permit the jury to conclude that
the investigation was discontinued because the press release was determined to
be void of any false or misleading statement, when in fact the investigation could
have been discontinued for any number of reasons, such as a prosecutorial
determination to prioritize different matters, a determination that any wrongdoing
had been rectified, lack of sufficient resources, etc. This strong risk of the letters
usurping the role of the jury in comparison to the negligible probative value
offered by the letters warrants their exclusion.
The Defendants’ argue in their Objection to Plaintiffs’ Motion in Limine that
the SEC Letters should be admitted because they are not hearsay offered to
establish the truth of their contents, asserting instead that they are offered for
two permissible purposes. The Court is not persuaded by these purportedly
permissible purposes, as each is in fact predicated upon the assumption that the
Letters indicate that the investigation was discontinued upon the determination
that no violation of the securities laws was committed.
First, the Defendants’ assert that the SEC letters are being offered to show
that the damages were not caused by the Press Release, but by the SEC’s
suspension of trading on Host America’s stock which the Defendants argue is
what caused the stock prices to fall. Specifically, the Defendants’ state that:
“The purpose of entering the SEC letters is to show that
the damages claimed to have been suffered by the
plaintiffs are not attributable to the defendants, as it was
the action taken by the SEC in 2005 shutting down
trading on Host America’s stock which caused the stock
prices to fall. The subsequent action by the SEC of reopening trading on the stock as well as issuing the
letters sought to be admitted into evidence lends
support to the conclusion that it was not the statements
made by the defendants which caused the plaintiffs to
suffer the alleged losses.” [Dkt. #351, Defs. Obj. to Pls.
Mot. in Limine, p. 2-3].
This argument relies upon the assumption that the SEC No Action Letters
indicate that the SEC wrongfully suspended trading on Host America stock upon
the mistaken belief that the Press Release contained a false or misleading
statement, and subsequently determined that no false or misleading statement
was made and therefore declined to conduct further investigation. As previously
discussed, allowing the jury to make such an assumption would usurp the role of
the jury, the trier of fact, tasked with determining whether the evidence presented
has established that the Defendants violated the relevant securities laws.
Secondly, the Defendants argue that the Letters are offered for the
permissible non-hearsay purpose of serving as an indicator of the Defendants’
state of mind at the time that the Press Release was made. Specifically, the
Defendants argue that “[t]he defendants were aware in 2005 that making a false
statement would result in the Securities and Exchange Commission taking action,
and the fact that the SEC later sent out the “No Action” letter lends supports [sic]
to the defendants claim that they had no reason to believe that they had done
anything wrong or made an improper statement in 2005.” [Dkt. #351, p.3]. This
argument is entirely circular and similarly relies on the assumption that the SEC’s
No Action Letter reflects a determination by the SEC that the Defendants
committed no wrongdoing. As discussed above, allowing such an assumption to
be drawn would usurp the jury’s role as finder of fact in this action.
As the Defendants proffered purposes for offering the SEC Letters are
exceedingly prejudicial and the Letters have minimal if any probative value,
Plaintiffs’ motion in limine to preclude Defendants’ Exhibits A and B is GRANTED.
Plaintiffs’ Motion to Permit the Deposition Testimony of Four Non-Party
Plaintiffs request that testimony by deposition be permitted pursuant to
Fed. R. Civ. P. 32(a)(4) for four non-party witnesses who reside more than 100
miles from the Court’s jurisdiction. Defendants have indicated in the Joint Trial
Memorandum that they oppose this request asserting that the use of deposition
testimony in lieu of live testimony would inhibit their ability to defend their claims
and would be confusing for the jury. Defendants also oppose the use of
deposition testimony to the extent that the depositions in question were
conducted in other actions distinct from the present action and related to other
defendants who were granted summary judgment.
An exception to the rule against hearsay applies to admit former testimony
given at a lawful deposition, “whether given during the current proceeding or a
different one,” provided that it is “now offered against a party who had – or in a
civil case, whose predecessor in interest had – an opportunity and similar motive
to develop it by direct, cross-, or redirect examination.” Fed. R. Evid. 804(b)(1).
Plaintiffs’ request to admit deposition testimony for the four named nonparty witnesses is DENIED for failure to assert or establish compliance with Rule
804(b)(1) by demonstrating that all of the parties against whom the testimony is
now sought to be offered (or a predecessor in interest) were present and had an
opportunity to challenge the testimony.
Plaintiffs’ Motion to Permit Three Plaintiffs to Testify Via Live Video
Plaintiffs seek permission to offer the testimony of three Plaintiffs via live
video conference as an alternative to in-court testimony on the basis of serious
health conditions prohibiting their travel to the trial. Defendants oppose this
request, asserting that on the grounds that they received no notice of the request
for video conference testimony until April 27, 2012 although the Plaintiffs have
been aware of the date of jury selection for a period of approximately seven
months which afforded them sufficient time to make alternate travel
arrangements to accommodate their restrictions. Further, Defendants dispute this
request to the extent that the request relies on medical information from two
years ago absent any updates as to the condition of the three Plaintiffs in
The general rule set forth in Fed. R. Civ. P. 43(a) providing that trial
witnesses’ testimony “must be taken in open court,” includes an exception to
permit testimony “by contemporaneous transmission from a different location,”
provided that good cause, compelling circumstances, and appropriate
safeguards exist. Serious health conditions inhibiting a witness’s ability to travel
constitute good cause and compelling circumstance to permit live testimony in
open court via video conference. See Cole-Hoover v. State of NY Dep’t of
Correctional Servs., No. 2-cv-826(M), 2011 WL 3360002, at *5 (W.D.N.Y. Aug. 3,
2011) (acknowledging that witness’s osteopenia and cardiopulmonary issues may
have warranted the use of live video conference testimony provided medical
evidence was provided to substantiate the health conditions). The Court finds
that Plaintiffs Constance McClune, William Fender, and James Strode have
reported health conditions imposing significant restrictions on their ability to
travel to court so as to warrant the use of contemporaneous testimony via video
conference provided that the Plaintiffs file current letters from their respective
doctors indicating that they remain unable to attend trial and listing the reasons
for the restriction on their ability to travel. Accordingly, and provided the
Plaintiffs’ provide current letters from their doctors, Plaintiffs’ motion to permit
Constance McClune, William Fender, and James Strode to testify via live video
conference is GRANTED, subject to the following safeguards:
1) The Parties must exchange all exhibits sought to be used in the
examination, either direct, cross or re-direct, of the three witnesses, and
provide the exhibits to the Plaintiff-witnesses themselves, by 5/11/12.
2) The technology for each Plaintiff-witness must be tested by 6/4/12.
Plaintiffs should immediately submit a technology request form to the
Court’s Information Technology Staff, available at
http://www.ctd.uscourts.gov/deps2.html and complete the coordination of
these technology requests by 6/4/12 by communicating with the
Information Technology Staff or with the Court’s Courtroom Deputy,
3) Plaintiffs are responsible for all costs associated with the establishment of
video conference connections.
4) No other person other than a video conference operator, and if necessary,
a certified translator, may be present in the room with any witness during
the time that they testify, nor may any person be in communication with the
witness during their testimony, other than the Court and the examining
5) If any loss of the video conference connection occurs during the testimony
of a witness, causing a loss of audio and/or video during the trial, on the
third such occurrence, the video conference shall be immediately
terminated and all of the testimony taken, including that witness’s direct
testimony, shall be stricken from the trial record.
Defendants’ Motion to Dismiss Several Plaintiffs for Failure to Comply
with Discovery Orders or Submit to Deposition
Defendants seek an order dismissing several Plaintiffs pursuant Fed. R.
Civ. P. 37, including Radar Devices, Boune Ome Rattanavong, Kouk S. Lee,
Anastasia Michos, Hemant Desai, Michael Louis Kramer, Jason Novotny, Diana
Nassaney, and Matthew Samuel, for failure to comply with the Defendants’
Requests for Production and the Court’s Orders regarding the same. Defendants
also seek an order dismissing Plaintiffs Kip Teamey and Mostafa Gamali for
failure to submit to deposition pursuant to Rule 37.
“[D]ismissal under Fed. R. Civ. P. 37 is a drastic remedy that should be
imposed only in extreme circumstances, usually after consideration of
alternative, less drastic sanctions.” Burrell v. American Telegraph & Telepehone
Corp., 282 Fed. Appx. 66, 67 (2d Cir. 2008) (citation and internal quotations
omitted). In order to receive the relief they seek, the Defendants must present to
the Court facts establishing their right to the sanctions under the standards set
forth in Rule 37. The Defendants have failed to assert a sufficient factual basis
supported by controlling law demonstrating their entitlement to the sanctions
sought. The Defendants’ motions to dismiss several plaintiffs for failure to submit
to deposition and for failure to comply with the Court’s Orders from 2010 to
respond to Defendants’ discovery requests present cursory requests for extreme
sanctions pursuant to Rule 37 without fully explaining to the Court the factual
basis for the requested sanctions, including by demonstrating that Defendants’
Murphy and Ramsey, as opposed to other former Defendants in this case,
requested the outstanding documents or depositions, have made repeated efforts
to obtain them to no avail, and sought the Court’s intervention to compel
compliance. Any supplemental motion in limine to dismiss or to exclude evidence
should contain the aforementioned information and must be filed by 5/10/12.
Plaintiffs must respond by 5/14/12 with a memorandum of law directly responding
to the Defendants’ motion in limine, without reliance upon prior filings.
Accordingly, Defendants’ motion to dismiss several Plaintiffs for failure to
submit to deposition and for failure to comply with discovery requests is DENIED.
Defendants’ Objection to Plaintiffs’ Expert
Defendants’ assert that the testimony of Plaintiffs’ expert, R. Alan Miller,
does not comport with the requirements set forth in Daubert v. Merrell Dow
Pharmaceuticals, Inc., 509 U.S. 579 (1993), arguing that the testimony is
speculative and fails to satisfy Daubert’s foundational requirement of testimony
predicated upon a “scientifically valid” methodology. 509 U.S. at 592.
The Court finds that the Plaintiffs’ proffered expert is qualified to offer an
expert opinion as to damages, but the Plaintiffs are ordered to brief the issue of
whether Mr. Miller’s materiality opinion usurps the role of the jury by opining on
the ultimate issue. Plaintiffs’ brief shall be submitted by 5/11/12.
Based upon the above reasoning, Plaintiffs’ Motion in Limine to exclude
Defendants’ Exhibits A and B is GRANTED; Plaintiffs’ Motion to permit the
deposition testimony of four non-party witnesses is DENIED for failure to
demonstrate compliance Fed. R. Evid. Rule 804(b)(1); Plaintiffs’ Motion to permit
the live video conference testimony of three Plaintiff-witnesses is GRANTED
provided that Plaintiffs provide current letters from the Plaintiff-witnesses
doctors substantiating the assertion that the witnesses remain unable to travel to
the Court’s jurisdiction to attend the upcoming trial and provided the video
conference testimony comports with the safeguards set forth above; Defendants’
Motion to prohibit the proposed Plaintiff-witnesses from testifying via live video
conference and to exclude any evidence relating to the Plaintiff-witnesses
appearing via live video conference are therefore DENIED; Defendants’ Motion to
Dismiss the claims of several Plaintiffs for failure to submit to deposition and to
comply with discovery orders is DENIED; and Plaintiffs are ordered to brief the
issue of the proffered expert’s testimony as to materiality by 5/11/12.
IT IS SO ORDERED.
Hon. Vanessa L. Bryant
United States District Judge
Dated at Hartford, Connecticut: May 8, 2012
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