Theranos Trial: United States v. Elizabeth Holmes, Day 1

Elizabeth Holmes' criminal trial began today in a San Jose, California federal court. On the right side of the courtroom sat Holmes, second from the left at a table with three lawyers. Dressed in a crisp dark-blue suit, she carried a medium-sized black handbag on which two initials, "FP," appeared. (If the initials indicate the "Free People" brand, Holmes has a sense of humor thus far unacknowledged.) During most of the day, Holmes took notes on a mini-notebook. If nervous, the only outward evidence was near-constant fidgeting with her pen. 

On the left hand side of the courtroom were several lawyers and an FBI agent representing the people of the United States. The government's team appeared more diverse than Holmes' lawyers, but by the end of the day, it was clear Kevin M. Downey for the defense was superior to the long-winded, academic lawyer representing the United States of America. (How a bankrupt CEO managed to hire a private lawyer more polished than the one representing the entire United States is one of the legal system's exquisite mysteries.)

Background

The government must prove, beyond a reasonable doubt, Holmes intended to defraud Theranos' investors/patients and used interstate banking transfers as part of her scheme. Holmes' lawyers allege the government cannot prove Holmes intended to defraud anyone. It's the classic "mob boss" defense: you can't prove I had anything to do with any murders, even though my associates committed them. (Since no male juror would imagine the slender Holmes the head of a New York crime family, her defense appears ingenious.) 

Holmes' lawyers point to Theranos' 360-plus patents worldwide as proof of Holmes' vision, as well as the fact that the FDA's regulatory framework regarding laboratory-developed test kits was not in final form when Theranos existed. In other words, if the federal agency tasked with overseeing Theranos lacked specific and final regulations regarding Theranos' in-development products and services, how could Holmes have intentionally violated the law? Consequently, Holmes' lawyers argue the government must point to specific statements made by Holmes to specific investors or specific patients with the intent to deceive, and general marketing statements relating to products in development are insufficient. (Note: "Take the gun, leave the cannoli" isn't enough for a murder conviction.)

From the government's perspective, the case is straightforward. Holmes (and Ramesh Balwani) "used advertisements and solicitations to encourage and induce doctors and patients to use Theranos’ blood testing laboratory services, even though... defendants knew Theranos was not capable of consistently producing accurate and reliable results for certain blood tests." By making "false claims concerning Theranos’s ability to provide accurate, fast, reliable, and cheap blood tests and test results," Holmes committed fraud. When Theranos in California accepted investor funds--including one payment of almost 100 million dollars in 2014--from a Texas-based corporate bank account on the basis of fraudulent statements, Holmes (and Balwani) committed wire fraud. 

Trial

The first of two days of jury selection, aka voir dire, occurred today. Judge Edward J. Davila presided, and his courtroom is unremarkable except for framed art deco pieces representing images of Olema Valley, Fort Baker, the Presidio, and other Bay Area sites. 

Judge Davila is respected by both sides and well-suited for trial work. When unconvinced of an argument or approach, Davila tends to joke rather than admonish. At one point, after hearing the defense whine about media coverage prejudicing the jury pool for the umpteenth time, Davila joked, "Because I believe everything I see on TV," right? 

As a spectator, jury selection is dull. Many jurors don't want to participate and engage in a battle of wits with the judge and counsel to get excused at the same time the judge is required to convince everyone to serve or at least prevent lawyers from claiming a juror is biased or unqualified. It's a tiring process, because everyone understands a blanket or inflammatory statement cannot be uttered in the presence of other jurors, causing disinterested persons to resort to passive-aggressive behavior. At one point, a woman speaking perfect, college-educated English with a Colombian accent claimed she might not understand the entire trial because English was her second language. She wasn't excused. One local high school graduate said she didn't feel comfortable grasping legal concepts, which caused Davila to praise her school as a California Distinguished School and thus one of the best in the area. Well, I checked, and the school did earn the award... in 2009. A jury of all college graduates isn't representative of the public, which is one reason judges are reluctant to excuse anyone absent a strong reason. 

Much of the day involved a flamboyant legal aid attorney rushing to the microphone to resolve any and all doubts regarding his impartiality. At one point, this potential juror mentioned hearing of Holmes' "penchant for [black] turtlenecks," and it was exactly then the downsides of a kind judge became apparent: clearly, some people didn't appreciate the severity of the situation or the potential jail time involved. 

None of this fazed Judge Davila. As an ardent San Francisco Giants fan, he used several entertaining baseball analogies to explain legal procedures, but it wasn't all fun and games. One juror who asked for a private session--meaning apart from other jurors but not members of the public--discussed a history of familial child abuse in response to a question about domestic violence. (The juror wasn't excused due to the fact that child abuse is sufficiently different from adult domestic violence to avoid assuming bias against either party.) Davila's example to alternate jurors of Lou Gehrig subbing into a Yankees game, replacing the first baseman, and then remaining in that position for the next 2,130 games was an apt metaphor for the duties expected of alternates. (In every trial, a jury and a few alternates are summoned in case one of the jurors cannot continue to serve.)

Which reminds me--Holmes' trial is expected to last 13 weeks, with jurors appearing three days per week. (The attorneys will most likely appear five days a week to discuss motions in limine, jury instructions, etc.) I can't imagine why the witnesses would require months of testimony, but that's why the trial itself will be interesting. No one knows what will happen. 

© Matthew Mehdi Rafat (2021) 

Bonus: to maximize the safety of all jurors during the current COVID19 pandemic, all unvaccinated persons were dismissed from the jury pool. 

Bonus: I believe the defense lawyer outperformed the government lawyer today for two reasons:

First, the government's lawyer handled jurors as if they were high school students in his classroom. (Yes, a jury should be diverse, but that doesn't mean a lawyer should speak to them as if they only have GEDs.) At one point, he spent almost an entire minute asking one question. 

Second, the defense lawyer managed to use negative publicity to gain sympathy with the jury pool. If he realized a juror--perhaps one more shy than others--wanted to be excused, he would help establish bias, thus promoting his or her dismissal. (e.g., "Do you have a negative view of Theranos based on your [media] exposure? Are you asking to be excused on that basis?") Also, rather than make a verbose opening statement, the defense opened by complimenting jurors for their candor and then gently implored the jury pool to be patient: "Will you hear all of the evidence before making a decision and suspend judgment until then?" Smart. 

Update: FP on the bag stands for "Freshly Picked."