United States District Court, E.D. New York
C. Pitluck Julia Nestor U.S. Attorney's Office/EDNY 271
Cadman Plaza East Brooklyn, NY 11201 Attorneys for the United
Christopher B. Mead London and Mead 1225 19th Street N.W.
Suite 320 Washington, DC 20036 Attorney for Defendant
Jonathan S. Sack Curtis Brett Leitner Morvillo Abramowitz
Grand Iason & Anello P.C., Attorneys for Defendant
MEMORANDUM & ORDER
M. AZRACK UNITED STATES DISTRICT JUDGE.
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.
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.
Court Defers Ruling on the Admissibility of Schulman's
April 2011 Statements
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.
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.)
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.
Schulman's Statements to the SEC and the U.S.
Attorney's Office for the Eastern District of New York
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).)
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.)
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.
Portions of Schulman's Counter-Designations Are
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.
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)).
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).
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.
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
Schulman Counter-Designation 1
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 ...