Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

United States v. Klein

United States District Court, E.D. New York

March 1, 2017

UNITED STATES OF AMERICA
v.
TIBOR KLEIN and ROBERT SCHULMAN, Defendants.

          David C. Pitluck Julia Nestor U.S. Attorney's Office/EDNY 271 Cadman Plaza East Brooklyn, NY 11201 Attorneys for the United States.

          Christopher B. Mead London and Mead 1225 19th Street N.W. Suite 320 Washington, DC 20036 Attorney for Defendant Schulman.

          Jonathan S. Sack Curtis Brett Leitner Morvillo Abramowitz Grand Iason & Anello P.C., Attorneys for Defendant Schulman.

          MEMORANDUM & ORDER

          JOAN M. AZRACK UNITED STATES DISTRICT JUDGE.

         Before the Court are the government's motion to preclude defendant Schulman from introducing evidence of statements that Schulman had made in April 2011 in response to an inquiry from the Financial Industry Regulatory Authority and the government's motion providing notice of its intention to introduce certain of Schulman's prior out-of-court statements pursuant to Federal Rule of Evidence 801(d)(2)(A). In response, Schulman asserts that certain of his other out of court statements are admissible under Federal Rule of Evidence 106 in the event that the government's proffered statements are admitted.

         For the reasons below, the Court (1) defers ruling on the admissibility of Schulman's statements in response to the April 2011 inquiry by the Financial Industry Regulatory Authority; (2) grants the government's request to introduce Schulman's out of court statements; and (3) grants in part and denies in part Schulman's request for the admission of additional statements pursuant to Federal Rule of Evidence 106.

         I.DISCUSSION

         A. The Court Defers Ruling on the Admissibility of Schulman's April 2011 Statements

         At oral argument on January 26, 2017, Schulman's counsel indicated his intention to introduce certain of Schulman's statements into evidence at trial. After oral argument, the government moved to preclude the admission of these statements, describing them as “a series of self-serving exculpatory statements made in April 2011 in response to an inquiry from” the Financial Industry Regulatory Authority. (Gov't FINRA Mem. at 1 (ECF No. 60).)

         Schulman asks the court to defer ruling on the admissibility of the challenged statements, arguing that admissibility should be determined when and if Schulman seeks to introduce the statements at trial. (Schulman Opp. re: FINRA Statements (ECF No. 68).) Schulman indicated that he intends to seek the admission of these statements only if he decides to testify, in which case he will likely argue that the statements are admissible either as a “statement of the declarant's then-existing state of mind” or in order to rehabilitate his credibility after the government's cross-examination. (Id. at 1.) Schulman argues that the question of admissibility under either theory would “involve a fact-specific inquiry in the context of Schulman's testimony and arguments at trial by both sides.” (Id.)

         Although the government has presented compelling arguments against admissibility, the Court agrees with Schulman and defers ruling until the issues arises during trial. (See Gov't FINRA Reply (ECF No. 75).) The admissibility of the challenged statements will turn on the manner in which the trial progresses and, without knowing the precise context in which Schulman will seek to introduce the statements, the Court is unable to determine their admissibility.

         B. Schulman's Statements to the SEC and the U.S. Attorney's Office for the Eastern District of New York are Admissible

         The government has also provided notice of its intention to introduce certain statements made by Schulman to the Securities and Exchange Commission (“SEC”) and to the U.S. Attorney's Office for the Eastern District of New York (“EDNY”). (Gov't Statements Mem. 1 (ECF No. 61).) In response, Schulman agreed that, “if relevant and not presented in a misleading or prejudicial manner, the government may introduce Schulman's testimony before the SEC and his interview with the EDNY as statements made by a party opponent.” (Schulman Statements Opp. at 1 (ECF No. 69).)

         Despite his general acquiescence to the admission of his statements, Schulman argues that certain questions posed to him by the SEC constitute inadmissible hearsay. (Id. at 13-14.) In particular, Schulman argues that certain questions are phrased in such a way as to “creat[e] a misleading impression that Schulman knew more than he did.” (Id. at 14.) Schulman requests that certain questions be “rephrased” in order to cure this purported hearsay issue, and requests that certain other questions and answers be excluded entirely because they “add nothing.” (Id.)

         The Court disagrees with Schulman's contention that the SEC's questions constitute hearsay. The designated statements will be admitted only for the truth of the matters asserted by Schulman; the statements are not admitted for the truth of the SEC's questions. Schulman's objection is thus overruled, and all of Schulman's prior statements designated by the government are admissible at trial. Schulman may request an appropriate limiting instruction at the time that the statements are admitted.

         C. Portions of Schulman's Counter-Designations Are Admissible

         Schulman also argues that certain of his other out-of-court statements are also admissible pursuant to Federal Rule of Evidence 106. (Id.) The government argues that all of Schulman's counter-designations fall outside the scope of Rule 106 and, therefore, are inadmissible.

         Pursuant to Rule 106, a party may introduce “any other part” of an admitted statement, or “any other writing or recorded statement, ” that “in fairness ought to be considered at the same time.” As the Second Circuit has recognized, “even though a statement may be hearsay, an ‘omitted portion of [the] statement must be placed in evidence if necessary to explain the admitted portion, to place the admitted portion in context, to avoid misleading the jury, or to ensure fair and impartial understanding of the admitted portion.'” United States v. Johnson, 507 F.3d 793, 796 (2d Cir. 2007) (quoting United States v. Castro, 813 F.2d 571, 575-76 (2d Cir. 1987)).

         As relevant here, the “doctrine of completeness applies to a defendant's exculpatory statements where their exclusion would unfairly distort the meaning of the declarant's non-hearsay statements that are in evidence.” United States v. Walia, No. 14-cr-213, 2014 WL 3734522, at *8 (E.D.N.Y. July 25, 2014). This doctrine does not, however, “require the admission of portions of a statement that are neither explanatory of nor relevant to the admitted passages.” United States v. Jackson, 180 F.3d 55, 73 (2d Cir. 1999). Thus, “the Second Circuit has excluded exculpatory statements that do not specifically explain the admitted statements.” Walia, 2014 WL 3734522, at *8 (citing United States v. Gonzalez, 399 F. App'x 641, 645 (2d Cir. 2010).

         Applying this principle, the Court finds that some, but not all, of Schulman's counter-designations are admissible under Rule 106. To the extent that certain counter-designations are not admissible, this is so because the counter-designated statement is too far removed from the admitted statements and, as such, is not necessary “to explain the admitted portion, to place the admitted portion in context, to avoid misleading the jury, or to ensure fair and impartial understanding of the admitted portion.” See Johnson, 507 F.3d at 796.

         The Court's decision with respect to each of Schulman's counter-designations is laid out below. Where the counter-designation is inadmissible in its entirety, the Court does not reproduce the statement. Where, however, only portions of the counter-designation are admissible, the Court has reproduced the full statement. Portions of each statement designated for admission by the government-all of which are admissible at trial-are reproduced in bold font. Portions of Schulman's counter-designation that the Court has determined are admissible are reproduced in underlined font. Portions of Schulman's counter designation that are inadmissible are reproduced in ordinary font.

         a. Schulman Counter-Designation 1

         Schulman's Counter-Designation 1 is admissible in part and inadmissible in part, as indicated below:

Q: Did you tell anyone about any knowledge you had regarding a potential merger or acquisition of King Pharma?
A: No, I never told anybody. The best I can think of that I did, and I've been trying to think about this, is there was one evening when Mr. Klein was at my house where I did mention, and I kind of made a joke with him, boy, it would be nice to ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.