United States vs. Ramesh Balwani: Credibility Clusterf*ck

Most Americans do not realize when they serve as jurors, they do not see all the evidence. Under American law, only evidence more relevant than prejudicial is admissible. For instance, a man may have murdered someone ten years ago, but unless some direct connection exists between his conduct then and the government's allegations now, nothing about the murder ten years ago is allowed to be discussed in the presence of the jury. Character evidence--a person's tendency to behave a certain way--is disallowed to prevent Lady Justice from favoring the side with the most aggressive private investigators. Movie buffs know the system's efficiency: "Just the facts, ma'am." Once jurors are seated, they see just the evidence helpful to evaluating the elements of the alleged crime.

Motions in limine--preliminary motions--are filed to narrow the scope of questioning and evidence. Part of it is efficiency. Part of it is fairness. Much of it is the defense setting up an appeal if the judge allows the government too much leeway. The defense team's theatrics in the O.J. Simpson trial? A cautious judge concerned about being overturned on appeal. The Elizabeth Holmes trial? Allegations of rape, domestic violence, and even other romantic relationships were admissible because of their relevance to the defendant's state of mind, i.e., intent. The main difference separating Judge Ito from Judge Davila is that one trial was not televised. No matter the crime, a good judge gives criminal defendants the benefit of the doubt while preventing them from taking undue advantage. 

Why not give the government the benefit of the doubt? In every case, the government already has an advantage because of its vast pre-trial resources, access to physical evidence, and ability to overcharge to encourage settlement. In Holmes' case, despite no coherent timeline and a military general who wasted trillions of taxpayer dollars in Afghanistan and who misstated his compensation at Theranos under oath, the government still prevailed on four out of eleven charges--not even a 50% success rate. Yet, not one of the government's lawyers will be disciplined or demoted. Prosecutorial discretion is seen as just another tool in combating crime, one accepted by everyone except libertarians. Considering qualified immunity, the only person often standing between you, a false accusation, and prison is a judge giving the defense the benefit of the doubt. The motion in limine discussed last week is interesting because Judge Davila appeared unwilling to give the defense the benefit of the doubt--thus provoking a likely appeal. 

Some background: when the government has exculpatory evidence, it is required to maintain it properly and turn it over. Though trials are adversarial, the government represents the public and is discouraged from politically-motivated or wrongful prosecutions that waste taxpayer dollars while elevating individual lawyers' profiles. Here, Theranos--after Balwani was no longer employed--timely produced a "LIS" database copy to the government, but without a key necessary to access the data. Doug Austin from ediscoverytoday.com has already provided the best factual summary, but I will quickly reiterate the main points. 

On August 27, 2018, Theranos gave the government a copy of a database containing patient test results. Though Theranos knew the database was encrypted, Theranos did not provide a decryption key. By August 30 or 31, 2018, Theranos decommissioned the physical server containing the "LIS" data, and since no decryption key (presumably) existed, once the physical server was decommissioned, the data became inaccessible. Holmes claimed the data was exculpatory, but Judge Davila ruled otherwise: 

"The LIS database information alone would not provide a conclusive determination of whether the Theranos blood tests were accurate, and it could just as likely contain incriminating evidence to the contrary. Any exculpatory value is therefore speculative in nature."

Interestingly, Judge Davila's ruling may be correct with respect to Holmes but not Balwani, even though the same subpoenas are involved. FRCP 45 states,

If a subpoena does not specify a form for producing electronically stored information, the person responding must produce it in a form or forms in which it is ordinarily maintained or in a reasonably usable form or forms... [Emphasis mine.] 

If Theranos didn't have a decryption key in its possession, the plain language of the law doesn't force it to make one in response to the subpoena. However, once the government realized it could not access the data, it should have filed a motion to compel, after which it would have certainly prevailed in demanding Theranos create and produce a decryption key: 

On motion to compel discovery or for a protective order, the person responding must show that the [electronically stored] information is not reasonably accessible because of undue burden or cost. 

Why didn't Judge Davila deem the LIS data exculpatory, even though the law requires the government to properly maintain evidence in its possession? Because internal communications between Theranos' lawyers included the following statement: the government "won’t know what to do with it [the encrypted copy] and... the people who do are in India." Combined with the hasty destruction of the physical database--which mooted a motion to compel--Judge Davila had enough facts and evidence to avoid an unjust ruling. Yet, Balwani is not Theranos. He had nothing to do with the destruction of the physical server. Jeff Coopersmith, Balwani's lawyer, says the only communication with any counsel he had regarding the server was asking for a copy of the data. As a result, it would be "outrageous" and in "bad faith" if the government suggests Balwani had anything to do with LIS or data destruction. 

Meanwhile, the government claims though Coopersmith never represented Theranos, one of his former partners contacted Theranos for database-related information. Therefore, during the time the database was being decommissioned, someone connected to Balwani was participating in conversations relating to LIS. Is this guilt by association? Should the government be allowed to restrict what Balwani's lawyers and witnesses can say about the database in front of the jury? What can both sides say before opening the door and necessitating a mini-trial regarding the database? From the government's point of view, Theranos knew the data produced was "useless" format-wise and had a duty to preserve the source. From Balwani's point of view, the data could have been recovered had the government handled the copy properly and timely requested a key; furthermore, since neither Balwani nor his lawyers had anything to do with the mishandling of the LIS database, they should be able to tell the jury about the government's negligence. 

On its face, the law favors Balwani. Under California substantive law, a Trombetta-Youngblood motion can be filed when evidence existed in a case that was or might be helpful to the defendant; and such evidence was destroyed or mishandled by the police or prosecutor. Though we are in federal court, even federal judges may apply state substantive law in the absence of a direct conflict with federal law. I am not experienced enough to be able to argue whether a direct conflict exists between federal and state law with respect to a Trombetta motion and the LIS server, or even whether such a motion would be procedural rather than substantive, but I have a feeling Balwani's lawyers have already engineered the case's most interesting appeal. 

© Matthew Mehdi Rafat (2022) 

ISSN 2770-002X

Disclaimer: nothing herein should be construed as legal advice, nor a solicitation for legal services. 

Update: on March 15, 2022, Balwani’s attorneys filed a Fed. R. Crim. P. 16 motion, the federal version of Trombetta-Youngblood: “The Court should not condone the government’s conduct, and the only ‘order that is just’ under Rule 16 here [with respect to the government’s alleged mishandling of the LIRS database] is dismissal with prejudice.”