SKAT v. The Stor Capital Consulting LLC 401K Plan et al

Filing 315

MEMO ENDORSEMENT in case 1:18-cv-04434-LAK; denying without prejudice (1126) Motion in Limine in case 1:18-md-02865-LAK. ENDORSEMENT Plaintiff moves in limine (Dkt 1126) to exclude "argument suggesting that the Solo custodians could have  9;net settled' the defendants' supposed share purchases without the cash or shares needed to do so, and any evidence or cross-examination intended to support such impermissible argument." In support of this motion, plaintiff relies u pon this Court's order excluding as "unreliable and irrelevant expert testimony that defendant pension plans became, or could have become, beneficial owners of Danish securities through trades settled internally by a custodian [i.e., net settlement] without respect for whether that custodian held any shares of that security." This order was made in the context of plaintiff's motion, which the Court granted, to exclude the proposed expert testimony of Dr. Emre Carr, whom defendants proffered would testify that it is possible to become the beneficial owner of a share through net settlement "without respect for whether" the custodian that net settled the transaction "held any shares of that security.& quot; Defendants, who oppose this motion, assure the Court that they are cognizant of its prior order and will abide by it. However, they contend that the relief plaintiff seeks in this motion is too broad and could preclude relevant evidence and ar gument. Defendants contend that evidence of the legitimacy of the practice of net settlement in some contexts could be relevant to their good faith defense. Specifically, they say that they expect to offer account statements and related confirmati ons received from their duly-licensed brokerage custodians" that "might" fall within the category of evidence and argument plaintiff seeks to exclude. "Such evidence," they argue, "is relevant...to Defendants' innoc ent state of mind."This argument that evidence of net settlement would be relevant to defendants'state of mind is a new one. In their earlier briefing of the Daubert motion, defendants argued only that net settlement would be relevant to support their claim to beneficial share ownership. Accordingly, in deciding the earlier motion, the Court did not consider whether such evidence or argument would be relevant to defendants' good faith defense. Defendants' new argument th us presents the question of the admissibility of net settlement in a different light. It is at least conceivable that evidence of net settlement could be relevant to defendants' state of mind, but the Court lacks a sufficiently specific under standing of what evidence of net settlement defendants propose to introduce and of the foundation for it. It would be premature, therefore, for the Court to rule definitively on the admissibility for a non-hearsay purpose of yet-unknown evidence. P laintiffs motion is denied without prejudice to the extent it seeks to preclude defendants from introducing evidence or argument of net settlement relevant to their state of mind. SO ORDERED. (Signed by Judge Lewis A. Kaplan on 9/24/2024) Filed In Associated Cases: 1:18-md-02865-LAK et al. (jca)

Case 1:18-md-02865-LAK

Document 1126

Filed 08/15/24

Page 1 of 2

MEMO ENDORSED
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

9/24/24

In re
CUSTOMS AND TAX ADMINISTRATION
OF THE KINGDOM OF DENMARK
(SKATTEFORVALTNINGEN) TAX REFUND
SCHEME LITIGATION

MASTER DOCKET
18-md-2865 (LAK)

This document relates to case nos.:
18-cv-07828; 19-cv-01785; 19-cv-01867; 19-cv01893; 19-cv-01781; 19-cv-01783; 19-cv-01866;
19-cv-01895; 19-cv-01794; 19-cv-01865; 19-cv01904; 19-cv-01798; 19-cv-01869; 19-cv-01922;
19-cv-01800; 19-cv-01788; 19-cv-01870; 18-cv07827; 19-cv-01791; 19-cv-01792; 19-cv-01928;
19-cv-01926; 19-cv-01868; 18-cv-07824; 19-cv01929; 19-cv-01803; 19-cv-01806; 19-cv-01906;
19-cv-01801; 19-cv-01894; 19-cv-01808; 19-cv01810; 19-cv-01809; 18-cv-04833; 19-cv-01911;
19-cv-01898; 19-cv-01812; 19-cv-01896; 19-cv01871; 19-cv-01813; 19-cv-01930; 18-cv-07829;
18-cv-04434; 19-cv-01815; 19-cv-01818; 19-cv01931; 19-cv-01918; 19-cv-01873; 19-cv-01924;
19-cv-10713; 21-cv-05339.

NOTICE OF PLAINTIFF SKATTEFORVALTNINGEN’S
MOTION IN LIMINE TO PRECLUDE EVIDENCE REGARDING NET SETTLEMENT
PLEASE TAKE NOTICE that, upon the accompanying Memorandum of Law, dated
August 15, 2024, and the Declaration of Marc A. Weinstein, dated August 15, 2024, with all
exhibits thereto, plaintiff Skatteforvaltningen, by its undersigned attorneys, will move the Court
before the Honorable Lewis A. Kaplan at the Daniel Patrick Moynihan United States
Courthouse, 500 Pearl Street, New York, New York, Courtroom 21B, at a date and time to be
determined by the Court, for an order pursuant to Rules 402 and 403 of the Federal Rules of

Memorandum Endorsement In re Customs and Tax Admin., Master Docket 18-md-2865 (LAK)
Plaintiff moves in limine (Dkt 1126) to exclude “argument suggesting that the Solo
custodians could have ‘net settled’ the defendants’ supposed share purchases without the cash or
shares needed to do so, and any evidence or cross-examination intended to support such
impermissible argument.”1 In support of this motion, plaintiff relies upon this Court’s order
excluding as “unreliable and irrelevant” expert testimony “that defendant pension plans became, or
could have become, beneficial owners of Danish securities through trades settled internally by a
custodian [i.e., net settlement] without respect for whether that custodian held any shares of that
security.”2 This order was made in the context of plaintiff’s motion, which the Court granted, to
exclude the proposed expert testimony of Dr. Emre Carr, whom defendants proffered would testify
that it is possible to become the beneficial owner of a share through net settlement “without respect
for whether” the custodian that net settled the transaction “held any shares of that security.”3
Defendants, who oppose this motion, assure the Court that they are cognizant of its
prior order and will abide by it. However, they contend that the relief plaintiff seeks in this motion
is too broad and could preclude relevant evidence and argument. Defendants contend that evidence
of the legitimacy of the practice of net settlement in some contexts could be relevant to their good
faith defense. Specifically, they say that they “expect to offer account statements and related
confirmations received from their duly-licensed brokerage custodians” that “might” fall within the
category of evidence and argument plaintiff seeks to exclude.4 “Such evidence,” they argue, “is
relevant . . . to Defendants’ innocent state of mind.”5
This argument — that evidence of net settlement would be relevant to defendants’
state of mind — is a new one. In their earlier briefing of the Daubert motion, defendants argued
only that net settlement would be relevant to support their claim to beneficial share ownership.6
1

Dkt 1129 (Pl. Mem.) at 1.
2

Dkt 1118 (emphasis omitted); see In re Customs & Tax Admin. of the Kingdom of Denmark
(SKAT) Tax Refund Litig., No. 18-cv-04051, 2023 WL 8039623, at *8 (S.D.N.Y. Nov. 20,
2023) (“[I]f a seller does not have any ownership rights in, for instance, a share, the seller
cannot convey any ownership rights to a purported buyer.”).
3

Dkt 1118.
4

Dkt 1159 (Def. Mem.) at 2–3.
5

Id. at 3.
6

Dkt 1086 (Def. Mem.) at 7 (arguing that evidence about net settlement would be relevant
because it would “tend[] to rebut . . . SKAT’s arguments[] that the absence of shares at the
custodian would imply the absence of beneficial share ownership by each of the custodian’s
account holders”).