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United States v. Kubini

United States District Court, W.D. Pennsylvania

January 5, 2015




I. Introduction/Background

This complex and contentious case involving charges of conspiracy, wire fraud, bank fraud and tax offenses once again returns to the Court with numerous disputes between the parties, most of which relate to the Court's Pretrial Order entered on September 18, 2014. (Docket Nos. 284-294; 298-303). In short, the Government seeks reconsideration of several aspects of the Court's Pretrial Order, which was entered after a status conference held on August 22, 2014 and provided to counsel, in draft form, thirty-one days before its motions were filed. (Docket Nos. 284, 285). Through these motions, the Government seeks to preclude the Defendants from presenting any exhibits at the trial scheduled to commence on March 2, 2015, and to have Defendants produce impeachment evidence in advance of trial, among other changes. ( Id. ). Aside from an uncontroversial point, Defendants contest these motions. (Docket Nos. 286-88). Further, despite the Court's Order instructing the parties to meet and confer on the contested authenticity of the Government's exhibits and file a Joint Status Report by November 21, 2014, the parties provided the Court with competing Status Reports, advising that they have made little progress toward reaching any meaningful agreements on the authenticity of the Government's voluminous exhibits, now described as nearly 5, 000 exhibits, most of which the Court expects are multiple pages. (Docket Nos. 302, 303). On the last matter, Defendant Smith and the Government have presented a related dispute about the Government's disclosure of certain emails on its computer terminal in the U.S. Attorney's Office which the Government claims are privileged and were inadvertently produced. (Docket Nos. 293-94, 297-98, 301).

After considering all of the parties' submissions, the Court holds that the Government's Motion to Preclude Admission of Defense Exhibits Because of Failure to Comply With Reciprocal Discovery Obligations (Docket No. 284) and Motion for Clarification of Pretrial Order (Docket No. 285) are essentially motions for reconsideration and the Government's Motion to Preclude [284] is denied, and its Motion for Clarification [285] is granted, in part, and denied, in part. The Court will order the parties to return to the table in an effort to conduct meaningful negotiations on the authenticity of the exhibits; otherwise, the Court may need to employ different case management techniques noted below. Finally, with respect to the email disclosure by the Government, the Court concurs with the Government that the materials are non-discoverable internal work product, were produced inadvertently and will order Defendant Smith and his counsel to destroy their notes from the viewing session and to file affidavits with the Court certifying that such destruction has occurred.

II. Government's Motions (Docket Nos. 284 and 285)

The Court first turns to the Government's Motions filed at Docket Nos. 284 and 285, which the Court believes are properly construed as motions for reconsideration of certain deadlines and directives set forth in the Court's Pretrial Order, including: (1) the deadline for Defendant's production of exhibits to the Government by February 2, 2015; (2) to define the scope of the term "exhibits" in the Order, identifying the type of exhibits needed to be produced by Defendants as of that deadline; and (3) the Government's deadline for submission of its hard copy exhibits to the Court and its request that it be permitted to maintain the exhibits throughout trial. (Docket Nos. 284, 285). By separate motion, the Government further seeks to preclude Defendants from presenting any exhibits that were not produced as reciprocal discovery or to set a deadline for reciprocal discovery. ( Id. ). In response, Defendants concede point (3) noted above but contest all other matters. (Docket Nos. 286, 288). As (3) is uncontested, the Government's Motion for Clarification is granted on that point. But, the Court will deny the remainder of the Government's requests because it does not believe that reconsideration of the other aspects of the Court's Pretrial Order is warranted.

The purpose of a motion for reconsideration "is to correct manifest errors of law or fact or to present newly discovered evidence." Kabacinski v. Bostrom Seating, Inc., 98 F.Appx. 78, 81 (3d Cir. 2004) (quoting Harsco Corp. v. Zlotnicki, 779 F.2d 906, 909 (3d Cir. 1985)). Because "federal courts have a strong interest in the finality of judgments, " United States v. Hoey, Cr. No. 09-200, 2011 WL 748152, at *2 (W.D.Pa. Feb. 15, 2011) (citation omitted), the standard that must be met to prevail on a motion for reconsideration is high, see Berry v. Jacobs IMC, LLC, 99 F.Appx. 405, 410 (3d Cir. 2004).

The Court may grant a motion for reconsideration if the moving party shows: (1) an intervening change in the controlling law; (2) the availability of new evidence which was not available when the court issued its order; or (3) the need to correct a clear error of law or fact or to prevent a manifest injustice. United States v. Banks, Crim No. 03-245, 2008 WL 5429620, at *1 (W.D.Pa. Dec. 31, 2008) (citing Max's Seafood Cafe by Lou-Ann, Inc. v. Quinteros, 176 F.3d 669, 677 (3d Cir. 1999)). Motions for reconsideration are not a tool to re-litigate and reargue issues which have already been considered and disposed of by the Court, see Hoey, 2011 WL 748152, at *2 (citation omitted), or for addressing arguments that a party should have raised earlier, see United States v. Dupree, 617 F.3d 724, 732-33 (3d Cir. 2010) (quotations omitted). Rather, such a motion is appropriate only where the court misunderstood a party or where there has been a significant change in law or facts since the Court originally ruled on that issue. Hoey, 2011 WL 748152, at *2. Finally, the relevant legal standards must be read in conjunction with this Court's Practices and Procedures, which provides that "any motions for reconsideration shall be filed within seven (7) days." See Practices and Procedures of Judge Nora Barry Fischer, § II.M., available at: (effective Feb. 5, 2013).

At the outset, it is the Court's belief that all of the Government's remaining requests should have been raised at the Status Conference and/or at some point during the thirty-one days that all counsel had the draft Pretrial Order before it was formally issued. See Dupree, 617 F.3d at 33. Motions for reconsideration are not to be used as vehicles "for addressing arguments that a party should have raised earlier" and likewise do not "empower litigants... to raise their arguments, piece by piece." Dupree, 617 F.3d at 732 (quotations omitted). The procedures utilized by the Court to establish the Pretrial Order issued on September 18, 2014 included: soliciting input from counsel via email on August 18, 2014 prior to the Status Conference; convening a status conference on August 22, 2014 during which the Court reviewed the entire Pretrial Order with counsel; and circulating the draft Pretrial Order via email after the conclusion of the conference. (Docket Nos. 273, 274). Simply put, these procedures were designed to afford the parties and their attorneys with a full and fair opportunity to provide input to the Court regarding case management for what appears will be a long and contentious trial and also to give everyone an opportunity to understand the Court's expectations of counsel and the parties throughout these proceedings.[1]

Further, it appears to the Court that the Government has styled its Motions as seeking "changes" or "clarification" of the Pretrial Order because its arguments are not sufficient to meet the high burden necessary to demonstrate that reconsideration is warranted. See Berry, 99 F.Appx. at 410. To this end, the Government has not set forth: any changes in the controlling law since the Court entered its Order; any new evidence which was not previously available; or, any clear errors of fact or law in the Court's Order. ( See Docket Nos. 284, 285). Instead, the Government relies on a series of non-binding, District Court decisions from outside this Circuit for legal support; repeatedly cites the need for changes based on unspecified "experiences" its counsel has had in prior cases;[2] and points to no actual prejudice which may be sustained by the Government without the requested changes or clarifications. ( Id. ). With that background, the Court turns to the merits of the Government's arguments.

The first issue is reciprocal discovery. To the extent that the Government argues that the Court should preclude four criminal defendants charged with serious felony offenses from presenting any exhibits at trial months before the scheduled trial date of March 2, 2015, such motion is clearly denied. No authority has been presented to the Court supporting such an Order. ( See Docket Nos. 284, 285). The law is well established that the appropriate sanctions for proven violations of Rule 16, if any, are discretionary matters for the Court such that violations may be excused for "good cause." Indeed, the severe sanctions of striking or precluding evidence should only result upon a showing of prejudice to the opposing party. See e.g., United States v. Jones, 503 F.Appx. 174, 178 (3d Cir. 2012) (quoting United States v. Lopez, 271 F.3d 472, 484 (3d Cir. 2001)) ("However, these sanctions are discretionary; Rule[16] does not require a district court to do anything.'"); United States v. Lee, 573 F.3d 155, 161 (3d Cir. 2009) ("In determining an appropriate remedy [for a Rule 16 violation], a district court should consider the reasons for the party's delay in producing the materials, including whether it acted intentionally or in bad faith, and the degree of prejudice to the opposing party."); United States v. Rodgers, No. 2:12-CR-162, 2014 WL 3735585, at *4 (W.D. Pa. July 28, 2014) (McVerry, J.) ("Here, since the trial has been continued until September at Defendants' request, Porter's counsel will have more than enough time to incorporate the alleged post-arrest statements into his trial strategy-notwithstanding the government's delay."). Like the Court's previous holding that there was no prejudice to Defendant Smith by the Government's failure to make full pretrial Brady disclosures to him on the "gift of equity" issue, (Docket No. 263), there is simply no prejudice to the Government at this time which would support an Order precluding Defendants from presenting exhibits at trial.

The next issue is whether the Court should establish a deadline for Defendants to make reciprocal discovery available to the Government in advance of the Court's February 2, 2015 deadline for the exchange of exhibits. (Docket No. 284). The Court declines to do so for a host of reasons. Again, until filing the instant motions, the Government never asked for a deadline; hence, there is no deadline for reciprocal discovery in the Court's December, 2, 2013 Order. ( See Docket No. 248). There is also no companion deadline set for the Government to produce its discovery to Defendants. ( See Docket Report ). Further, while the Government has made significant amounts of discovery available to Defendants, including producing exhibit lists and nearly 5, 000 actual, marked exhibits, and its open file production of voluminous evidence at the U.S. Secret Service Office, it continues to state that more supplementation is forthcoming. (Docket Nos. 284, 285, 302). Additionally, the Court has now established a deadline for the parties to mark and exchange exhibits by February 2, 2015, one month before trial. (Docket No. 283). Thus, all exhibits are due to the respective opponent(s) by that deadline. Failure to abide by such deadline by the Government or the Defendants would necessarily result in the Court having to evaluate any independent objection to any specific evidence not timely disclosed under the legal principles articulated above. Beyond setting forth the applicable legal standard, it would be both impractical and imprudent for the Court to issue a pretrial Order providing essentially an "advisory opinion" of how it will evaluate whether any untimely disclosures or production of trial exhibits will be stricken, or not, as the facts underlying such determination are simply unknown at this juncture. See Burkey v. Murberry, 556 F.3d 142, 149 (3d Cir. 2009) (recognizing that a "District Court may not render an advisory opinion").

Moreover, Defendants, through their respective counsel, have all indicated that they intend to comply with their discovery obligations under Rule 16 but have been spending the balance of their time reviewing the Government's voluminous disclosures to them. (Docket Nos. 286, 288). This is not a hollow position as the Government's evidence includes nearly 5, 000 marked exhibits, as selected from its much more voluminous production at the U.S. Secret Service Office, and its Jencks Materials, available for review at the U.S. Attorney's Office on the stand-alone computer. As is explained in more detail below, the Government has also demanded that Defendants now review the exhibits it has produced to them and to stipulate to the authenticity of the documents. (Docket Nos. 302, 303). On the reciprocal disclosures, some have made more progress than others as Defendant Svaranovic has provided the Government with a disk of potential trial exhibits she intends to present. (Docket No. 299). Defendant Smith likewise made some production of materials to the Government and has also outlined the additional exhibits he intends to present. (Docket No. 288). To date, Defendants Kubini and Ratchkauskas have advised that their respective presentations will likely include only exhibits found within the Government's own production. (Docket Nos. 273, 286). The Court agrees that a rolling production of materials by Defendants to the Government is appropriate and does not believe that establishing yet another deadline prior to the February 2, 2015 deadline for the exchange of exhibits in the Pretrial Order will accomplish anything but engender further disputes.[3] Despite this ruling, the Court also believes that those exhibits that Defendants have only identified in pleadings and briefs should be made available to the Government, forthwith, to the extent that they have not already been provided to the Government.

A third issue presented to the Court is the scope of the definition of the term "exhibits" as used by the Court in § 3 of the Pretrial Order. (Docket No. 283). The Government advocates that "exhibits" should be broadly interpreted to include any exhibits that Defendants intend to use during cross-examination of Government witnesses, relying on a theory set forth in District Court cases in United States v. Hsia, 2000 WL 195067 (D.D.C. Jan. 21, 2000), and United States v. Swenson, 298 F.R.D. 474 (D. Id . Feb. 10, 2014), that presenting such documents represents an extension of their own "cases-in-chief" such that discovery must be permitted. Defendants respond that the Government is not entitled to pre-trial discovery of their impeachment materials and that the decisions relied upon by the Government are non-binding, distinguishable and disfavored. (Docket Nos. 286, 288, 299). Again, the Government did not provide the Court with the precedent it relies on (i.e., Hsia and Swenson ) before the Pretrial Order was entered, despite numerous opportunities for the Government to do so. Hence, the Pretrial Order was issued without the Court contemplating the parties' positions on what appears to be a most contested point of law between these parties. (Docket No. 283). Of course, as trial has not yet commenced, the dispute is framed without reference to the admission of any particular piece of evidence or in the context of how such exhibit is proffered to be used by the proponent at trial. ( See Docket No. 282 ("The Court thus declines the parties' invitation to make broad rulings on these very general disputes at this stage of the case but will resolve any issues as they arise under the parameters set forth in the Pretrial Order.")). Further, Hsia and Swenson do not represent settled law and other courts have criticized the approach set forth therein, including the one case that has cited Swenson for any purpose. See e.g., United States v. Harry, 2014 WL 6065705, at *4-11 (D. N.M. Oct. 14, 2014) (distinguishing Hsia and Swenson and holding that "the term case-in-chief, ' as rule 16(b)(1)(A) phrase, refers to evidence that a party presents between the time that the party calls its first witness and the time the party rests.").

In any event, this Court retains the inherent authority to interpret its own Orders and the Court does not share the Government's broad interpretation of the term "exhibits" used in § 3 of the Pretrial Order entered in this case. See E.E.O.C. v. U.S. Steel Corp., 877 F.Supp.2d 278, n.5 (W.D. Pa. 2012) (citing United States v. Spallone, 399 F.3d 415, 421 (2nd Cir. 2005); SEC v. Hermil, Inc., 838 F.2d 1151, 1153 (11th Cir. 1988) ("Included in a district court's power to administer its decrees is the power to construe and interpret the language of the original order.")). Like a contract, a court order should be "construed consistently with fundamental precepts of contract construction" with reference to the "four corners" of the Order. Washington Hosp. v. White, 889 F.2d 1294, 1300 (3d Cir. 1989). In this Court's estimation, the Pretrial Order, interpreted as a whole, does not support the Government's position. ( See Docket No. 283).

Here, the Court has not specifically ordered Defendants to produce their impeachment or rebuttal exhibits to the Government in advance of trial and the term "exhibits" should not be read to require such production. ( See id. ). Instead, the term "exhibits" utilized throughout § 3 must be interpreted with reference to the other related provisions in the Order, namely, §§ 3.a. and 3.b. referencing the parties' witness disclosures and §4 outlining the Government's required disclosures under the Jencks Act, Brady/Giglio impeachment materials and Rule 404(b) evidence. ( Id. ). These provisions, read together, can only be reasonably interpreted to require all of the parties to mark and exchange the exhibits that they intend to present during their own respective cases-in-chief by the established deadline. To this end, pursuant to §§ 3.a. and 3.b., the Court requires the parties to provide witness lists and offers of proof, under seal, listing the witnesses the parties may call if needed "(other than purely for impeachment or rebuttal)" which is indicative of the Court's intent to not require that purely impeachment materials be disclosed - even to the Court - before trial. Further, the command to produce "exhibits" to the adversary in §§ 3.a. and 3.b. is used in reference to Defendants and the Government but the Court later distinguishes the Government's obligations in § 4, i.e., the Government must "provide defense counsel with copies of any Brady/Giglio impeachment materials not previously disclosed, and any additional evidence of defendant's uncharged conduct which it intends to introduce at the trial pursuant to Federal Rule of Evidence 404(b) on or before February 2, 2015" and is "encouraged" to provide all Jencks Act materials by the same deadline. ( Id. ). There is no corollary requirement of Defendants to make these types of disclosures in the Pretrial Order. ( Id. ). Therefore, if the phrase "exhibits" is as broadly construed as the Government suggests, it would require the Government to disclose all of its impeachment materials to Defendants without the need for the Court's more specific directives at § 4 and such a broad interpretation would render this subsequent paragraph redundant and/or meaningless.

For these reasons, the Government's motion is denied to the extent that it seeks reconsideration and for the Court to interpret the term "exhibits" in the manner it proposes. Instead, the Court states that "exhibits" means "exhibits (other than purely for impeachment or rebuttal)."[4] See e.g., BLACK'S LAW DICTIONARY (9th ed. 2009), "impeachment", ("2. The act of discrediting a witness, as by catching the witness in a lie or by demonstrating that the witness has been convicted of a criminal offense. 3. The act of challenging the accuracy or authenticity of evidence"); "case-in-chief", ("1. The evidence presented at trial by a party between the time the party calls the first witness and the time the party rests."); "rebuttal", ("2. The time given to a party to present contradictory evidence or arguments.").

III. Competing Status Reports - Other Case Management Issues

As part of its Pretrial Order, the Court ordered the parties and counsel to meet and confer and to file a Joint Status Report with the Court by November 21, 2014. (Docket No. 283). A meeting was held at the U.S. Attorney's Office on November 20, 2014, or one day before the Court's deadline. (Docket Nos. 302, 303). Attendees at the meeting included Government counsel, his litigation assistant, and counsel for Defendants Ratchkauskas, Svaranovic and Smith.[5] ( Id. ). The subject of the meeting concerned whether the parties and counsel were able to negotiate and reach any resolution on the authenticity of the exhibits to be introduced at trial. (Docket No. 283). The Court has also set deadlines in the Pretrial Order for the submission of objections to exhibits by February 9, 2015, responses to same by February 16, 2015 and noted that oral argument will be heard at the Pretrial Conference scheduled for all day on February 23, 2015 and February 24, 2015. ( Id. ). Rather than a Joint Status Report, the meeting resulted in the parties filing competing status reports outlining the little progress that has been made as to their agreements that certain of the exhibits are authentic business records and detailing the apparent continued impasse on the authentication of others. (Docket Nos. 302, 303). The Court remains concerned, however, that the parties continue to dispute the authenticity of the vast majority of the Government's nearly 5, 000 exhibits and what affect such continuing disputes will have on pretrial and trial ...

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