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United States v. Martoma

United States District Court, S.D. New York

August 23, 2013

UNITED STATES OF AMERICA,
v.
MATHEW MARTOMA, Defendant

For Mathew Martoma, also known as Sealed Defendant, Defendant: Daniel Prugh Roeser, Larkin M Morton, Richard Mark Strassberg, Goodwin Procter, LLP(NYC), New York, NY; John Owen Farley, Roberto M. Braceras, Goodwin Procter, LLP (Boston), Boston, MA.

For USA, Plaintiff: Arlo Devlin-Brown, U.S. Attorney's Office, SDNY (Chambers Street), New York, NY.

OPINION

Page 603

MEMORANDUM OPINION & ORDER

Paul G. Gardephe, United States District Judge.

Defendant Mathew Martoma has moved to compel the Government and/or the University of Michigan to produce certain documents associated with Dr. Sidney Gilman, a cooperating witness. (Dkt. No. 35) These materials have been withheld on the basis of a claim of attorney-client privilege. The Government has opposed Defendant's motion. (Dkt. No. 44) Dr. Gilman has moved to intervene to oppose Defendant's motion, and he seeks a protective order barring the production of the allegedly privileged materials. (Dkt. No. 46) For the reasons stated below, the Court concludes that the Government lacks standing to oppose Defendant's motion, and grants Dr. Gilman's motion to intervene. The merits of Defendant's motion to compel and Dr. Gilman's motion for a protective order will be addressed in a separate order.

BACKGROUND

Defendant Martoma is charged with one count of conspiracy to commit securities fraud and two substantive counts of securities fraud. (Dkt. No. 7 (Indictment)) The Indictment alleges that Martoma traded securities on the basis of inside information received from a cooperating witness -- Dr. Gilman. (Indictment ¶ ¶ 7-10, 17, 19; see Gilman Br. (Dkt. No. 47) at 1) At the time of the alleged conspiracy, Dr. Gilman was employed by the University of Michigan. (See Gilman Decl. (Dkt. No. 48) ¶ 1) The University had provided Dr. Gilman with certain electronic equipment, including a laptop computer, desktop computer, iPhone, iPad, and five external flash drives. (Id.; Strassberg Decl. (Dkt. No. 37), Ex. A (June 13, 2013 Def. Ltr. to Court) at 1-2 & n.1)

In August 2012, in advance of a proffer session with the Government, Dr. Gilman permitted the FBI to make a forensic image of the hard drive of the laptop computer provided by the University. (Devlin-Brown Decl. (Dkt. No. 45) ¶ 2) Before the hard drive was copied, Dr. Gilman's counsel and the Government acknowledged that it contained potential " confidential information." (Id., Ex. A (Aug. 15, 2012 Gov't & Def. emails)) At some point after Defendant was indicted and requested that the Government produce a copy of the imaged hard drive, Dr. Gilman's counsel informed the Government that some of the documents on the hard drive appeared to be privileged.[1] (Id. ¶ 4; Gov't Br. (Dkt. No. 44) at 5)

Page 604

In November 2012, after Dr. Gilman resigned from the University of Michigan, the University requested that Dr. Gilman return all of the electronic devices that it had issued to him. (See id., Ex. C (Nov. 28, 2012 Gilman Ltr. to U. Mich.)) When he returned the devices to the University, Dr. Gilman asserted that in doing so, " neither [he] nor any other privilege holder waives any applicable privilege(s)." (Id.)

The Government later provided the imaged hard drive to the University for purposes of decryption (Strassberg Decl., Ex. A (June 13, 2013 Def. Ltr. to Court) at 1-2), so that the Government could satisfy its discovery and disclosure obligations to the Defendant. See Fed. R. Crim P. 16; Brady v. Maryland, 373 U.S. 83, 83 S.Ct. 1194, 10 L.Ed.2d 215 (1963); Giglio v. United States, 405 U.S. 150, 92 S.Ct. 763, 31 L.Ed.2d 104 (1972). The University also agreed to search and produce documents from certain other electronic devices that Dr. Gilman had returned to the University.[2] (Id.) Although the University takes no position regarding Dr. Gilman's assertion of privilege, it has agreed not to produce any potentially privileged documents until the Court resolves the privilege issue.[3] (Id.; July 3, 2013 Def. Ltr. to Court (Dkt. No. 42); Strassberg Reply Decl. (Dkt. No. 57), Ex. A (July 22, 2013 U. Mich. Ltr. to Court) at 1)

On June 21, 2013, Defendant moved to compel the Government and/or the University to produce the documents withheld on the basis of Dr. Gilman's assertion of attorney-client privilege. (Dkt. No. 35) On July 12, 2013, the Government filed an opposition to Defendant's motion. (Dkt. No. 44) On July 17, 2013, Dr. Gilman moved to intervene to oppose Defendant's motion, and for a protective order barring the production of the allegedly privileged communications. ...


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