Evidence

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On Tuesday, Judge Kaplan granted a motion in limine concluding, in a matter of first impression in SDNY, that the evidentiary bar in Federal Rule of Evidence 407 against subsequent remedial measures applies to plaintiffs just the same as defendants. The plaintiff is the tax-collecting arm of the Dutch government, which accuses various defendants of obtaining fraudulent refunds, and which sought to exclude evidence that it updated it guidelines after the underlying events in ways that potentially would have flagged the refund requests as improper. The defendants wanted to introduce the evidence to show (among other things) that the Dutch government was partly to blame for processing the refunds.

Judge Kaplan granted the motion, and, in doing so, rejected the defendants’ arguments that that Rule 407 applies only to measures taken by defendants.Continue Reading Judge Kaplan: Bar on Evidence of Subsequent Remedial Measures Applies to Both Plaintiffs and Defendants

In an opinion last week, Judge Engelmayer denied defendant’s motion for summary judgment regarding the “unorthodox transaction” exception to Section 16(b) of the Securities Exchange Act. Previously, the Second Circuit had vacated and remanded Judge Engelmayer’s earlier decision, which had granted summary judgment, on the grounds that the defendant had not “carried his burden” to show that there was no genuine dispute that he “did not have access to inside information.”

In line with the Second Circuit’s mandate, the Court reopened discovery on this limited factual issue. Ultimately, the only evidence on the relevant issue was testimonial. The plaintiffs allege that the defendant received inside information during a phone call, but the two participants to the call say they only discussed public information. Reviewing the evidence on remand, Judge Engelmayer held that the defendant still had not carried his burden to “indisputably” prove his affirmative defense.

As an initial matter, Judge Engelmayer pointed out that there is no consensus from appellate courts on the moving party’s burden at summary judgment when the moving party has the burden of proof on the merits of the issue:Continue Reading Judge Engelmayer: Summary Judgment Is Not Appropriate Where “Uncontradicted” Testimonial Evidence Could Still Be Disbelieved By Jury

In an opinion yesterday, Judge Cote ruled inadmissible certain deposition designations that a group of defendants wanted to use at a forthcoming antitrust trial because the witnesses were corporate representatives who lacked personal knowledge of the matters to which they testified.

As Judge Cote explained, even though Rule 30(b)(6) authorizes deposition testimony via corporate representatives that are supposed to gather knowledge from others, it does not follow that the testimony meets the standards for admissibility at trial:
Continue Reading Judge Cote: Corporate Representative Deposition Testimony Must Be Based on Personal Knowledge to Be Admissible at Trial

Yesterday, Judge Sweet found that there was sufficient evidence to survive summary judgment regarding allegations that Bear Stearns hid material information about its lack of liquidity and other problems during the financial crisis.  He rejected the defendants’ argument that the supposedly hidden risks were “publicly known as a result of Bear Stearns’ disclosures”:

Defendants’ opposition and cited disclosures demonstrate textbook disputes of material fact sufficient to defeat a motion for summary judgment.

For example, both Plaintiff and Defendants point to a disclosure stating “inability to raise money in the long- term or short- term debt markets, or to engage in repurchase agreements or securities lending, could have a substantial negative effect on [Bear Stearns’ ] liquidity. ” Defendants frame this as sufficient disclosure to alert Plaintiff to risks, defeating the possibility of a misstatement or omission. Plaintiff emphasizes that Defendants disclosed only the possibility but not the certainty that Bear Stearns was already experiencing negative pressure as a result of its reliance on repo financing.  . . .

“Nothing short of a complete failure of proof concerning an essential element of the nonmoving part y’s case will be sufficient to award summary judgment.” Celotex Corp . v . Catrett, 477 U.S. 317, 323 (1986). The disclosures Bear has identified are not so forthright and comprehensive that it can be said no dispute of material fact exists.

Continue Reading Judge Sweet: Allegations of Bear Stearns’ Material Omissions Before Its Collapse Survive Summary Judgment

Last week, Judge Rakoff held that courts should generally be wary of admitting handwriting expert testimony under Federal Rule of Evidence 702.  His opinion notes that handwriting analysis, unlike DNA or other forms of scientific evidence, did not arise from scientific inquiry and instead was created solely for use in the courtroom.  Judge Rakoff found the expert’s opinion evidence “far too problematic” to be admissible towards determining whether a party’s signature at issue in the case was authentic.

After applying the Daubert factors, Judge Rakoff concluded that:
Continue Reading Judge Rakoff Rejects Handwriting Expert Under FRE 702