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holding that Defendant's financial restatement . . . [was] not at all voluntary, and thus, neither the intent nor the policy underlying Rule 407 support exclusion of this material"
Summary of this case from In re Homestore.com, Inc. Securities LitigationOpinion
Case No. 01-8437-CIV-MIDDLEBROOKS
January 21, 2003
OMNIBUS ORDER
THIS CAUSE comes before the Court upon the notice by the parties of settlement with regard to two of the three remaining defendants (Robert J. Gluck and Phillip E. Harlow) as well as the following motions:
1. Defendant Gluck's Motion in limine to Exclude Evidence of the Restatement (DE 211), filed December 13, 2002;
2. Defendant Harlow's Motion in limine to Exclude Evidence of the Restatement (DE 213), filed December 16, 2002;
3. Defendant Uzzi's Motion in limine to Exclude Evidence of the Restatement (DE 214), filed December 16, 2002;
4. Plaintiff Security and Exchange Commission's Motion for Partial Summary Judgment Against Defendant Harlow (DE 215), filed December 16, 2002;
5. Plaintiff's Motion for Sanctions Against Defendant Harlow (DE 222), filed December 20, 2002;
6. Defendants Gluck and Uzzi's Motion to Compel Production of Notes of Untranscribed Meeting with David Fannin (DE 225), filed December 27, 2002;
7. Defendants Harlow and Uzzi's Emergency Motion for Clarification of Trial Procedure (DE 227), filed January 2, 2003;
8. Plaintiff's Motion to Bring Electronic Equipment in Courtroom (DE 248), filed January 15, 2003;
9. Defendant Uzzi's Motion to Use Computer Equipment During Trial, filed January 16, 2003;
10. Defendant Uzzi's Emergency Motion to Compel Plaintiff to Disclose Basic Trial Information, filed January 17, 2003.
The Court has reviewed the record and is fully advised in the premises.
Noting that Defendants Gluck and Harlow have reached settlement with Plaintiff SEC, and being advised that the settlement has been approved by the Commission, the Court denies as moot all motions not bearing upon the lone remaining defendant, Donald Uzzi.
The motion to exclude evidence of the restatement and restatement report are without merit. Uzzi offers multiple bases in support of his motion in limine, and this Court addresses each in turn. The Court concludes that the arguments advanced by Uzzi go more properly to the weight that should be given this material than to its admissibility.
Uzzi claims the Restatement and Report are not relevant to the SEC's case. Notwithstanding the fact Federal Rule of Evidence 401 provides an expansive definition of relevance, this evidence is highly relevant to the SEC's claim that misstatements or omission of material fact were made by Defendant. Further, Uzzi claims the Restatement and Report are substantially more prejudicial than probative. The Court finds this not to be a case warranting exclusion under this exceptional remedy especially given the fact this matter is set for bench trial. The Court remains confident it can accord the appropriate weight to this evidence. Contrary to Uzzi's claims, Federal Rule of Evidence 407 barring admission of subsequent remedial measures does not serve to exclude the material at issue here. The Restatement and Report were not at all voluntary, and thus, neither the intent nor the policy underlying Rule 407 support exclusion of this material. Finally, the Restatement and Report are admissible against Uzzi under Federal Rule of Evidence 803(6) as business records and are not excludable hearsay. These types of reports are filed by companies as a matter of course when such occurrences arise and fit squarely within the language of the exception in Rule 803(6).
The term "Restatement and Report" applies here to the restated financial statements filed by Sunbeam, Sunbeam's form 10-K/A, the Andersen Restatement Report to Sunbeam's Board of Directors, and the work underlying that report.
The motion to compel production of notes is likewise denied. Uzzi is attempting to discover material that is conceded to be attorney work product. Although that protection is not immune to challenge, Uzzi has failed to establish a basis on which to override the protection. Uzzi has not satisfied the substantial need/undue hardship standard of Federal Rule of Civil Procedure 26(b)(3). The information that may exist in the notes sought by Uzzi is readily available both from Mr. Fannin himself and from the numerous statements made by him in the course of this case and the investigation preceding it. As such, the Court does not find it appropriate to mandate production of the SEC attorney's notes.
The Court does note that the motion is untimely and could be denied solely on that basis, however, the motion is herein denied on the merits.
The emergency motions filed by Defendants have been neither emergencies nor matters which this Court finds it appropriate to resolve by issuing orders to compel. Uzzi has presented no issues that cannot and should not be resolved by the parties independently in anticipation of trial.
Accordingly and for the foregoing reasons, it is hereby
ORDERED AND ADJUDGED as follows:
1. Defendants' Motions in limine (DE 211, 213, 214) are DENIED.
2. Plaintiff's Motion for Summary Judgment (DE 215) is DENIED AS MOOT.
3. Plaintiff's Motion for Sanctions (DE 222) is DENIED AS MOOT.
4. Defendants' Motion to Compel Production of Notes (DE 225) is DENIED.
5. Defendants' Emergency Motion for Clarification (DE 227) is DENIED.
6. Plaintiff's Motion to Bring Electronic Equipment in Courtroom (DE 248) is GRANTED.
7. Defendant Uzzi's Motion to Use Computer Equipment, filed January 16, 2003, is GRANTED.
8. Defendant Uzzi's Emergency Motion to Compel Plaintiff to Disclose Basic Trial Information, filed January 17, 2003, is DENIED.
DONE AND ORDERED.