United States District Court, N.D. California
FIRST ORDER REGARDING DEFENDANT'S OBJECTIONS TO
THELTON E. HENDERSON United States District Judge
July 5, 2016, Defendant Pacific Gas and Electric Company
("PG&E") lodged objections to 43 of the 96 exhibits
that the Government intends to introduce through Government
witness William Manegold. Dkt. No. 717 ("Objs.").
The Government filed a written opposition to these objections
just before midnight yesterday evening, only hours before Mr.
Manegold was set to begin testifying. Dkt. No. 718
("Opp'n"). As Mr. Manegold is presently
testifying, the Court will issue piecemeal orders on
PG&E's objections, so that the Government may question
Mr. Manegold in as uninterrupted a manner as possible.
Court now addresses PG&E's global objections to the
Manegold exhibits and PG&E's first eight exhibit-specific
makes several global objections to the Manegold exhibits,
which the Court will address before making admissibility
determinations as to each exhibit. With respect to the
rulings on PG&E's exhibit-specific objections, the Court
directs the reader to PG&E's Objections themselves for a
listing of each objection by exhibit.
Manegold may sometimes lay the foundation for a
hearsay exception even if he did not author or receive the
document requiring the exception.
objects to 14 of the Manegold exhibits on the basis that the
exhibit lacks foundation because "Manegold [is] not on
the email, " "not on the document, " "not
on [the] spreadsheets, " or "not on [the]
letter." The Court will address these objections
on a case-by-case basis, but notes that PG&E is incorrect to
suggest that the Government may never use Mr. Manegold to lay
the foundation for a hearsay exception simply because he did
not author or receive the document requiring the exception.
context of PG&E emails, the clearest avenue for the
Government to establish that an email is not barred by the
rule against hearsay is for the Government to establish that
the email is a nonhearsay statement of a party opponent under
Federal Rule of Evidence ("Rule") 801(d)(2). Even
if Mr. Manegold is not on an email, it is likely that as a
long-time employee of PG&E, he will be able to lay the
foundation for the application of this Rule. For example, the
Government argues for Exhibit 273 (an email) that it
"expects Manegold to testify that [the email's
author] was a PG&E employee at the time, and that [Manegold]
recognizes the budget discussion in the email as being within
the scope of [the author's] employment." Opp'n
at 3. Provided Mr. Manegold actually so testifies, this would
be sufficient testimony to establish that the email in
Exhibit 273 is a nonhearsay statement under Rule 801(d)(2),
 and the same may be true for other PG&E
email-exhibits that do not list Manegold as either the sender
or a recipient.
context of PG&E data responses, spreadsheets, or other
documents, for which no author is indicated, it is similarly
likely that Mr. Manegold will possess the knowledge to
establish either that the document is a nonhearsay statement
under Rule 801(d)(2) or that the document meets a hearsay
exception under Rule 803. For example, the Government argues
for Exhibit 283 (a chart detailing PG&E's 2008 budgeting
metrics and concerns) that it "expects Manegold to
testify that he recognizes this form of document as one
created by PG&E's budget team in the scope of employment
(and thus a nonhearsay statement of party opponent), as well
as a business record of PG&E, created and maintained in the
ordinary course of business. His performance appraisals from
the time show that he was involved in the PG&E budget process
for integrity management, the program that is the subject of
the second line in this chart." Opp'n at 3. Provided
Mr. Manegold actually so testifies, this would be sufficient
to establish that the chart is either a nonhearsay statement
under Rule 801(d)(2) or a business record under Rule 803(6),
and the same may be true for other PG&E document-exhibits
that do not list Manegold as an author.
Financial evidence, post-accident evidence, and general
relevance or prejudice objections will be handled on a
also makes global objections to "Financial Evidence Not
Tied to the Government's Allegations, "
"Post-Accident Evidence, " and "General
Relevance/Prejudice." Objs. at 1-2. As PG&E concedes,
however, it is more appropriate for the Court to
"individually consider each of [the] documents" as
they pertain to these global objections. Id. at 2.
The Court does so below, and in the order(s) that follow.
PG&E's global objection to "Financial Evidence Not
Tied to the Government's Allegations, " which is
rooted in the Courts Order on PG&E's Motion in
Limine Number Four, Dkt. No. 460 ("MIL Order")
at 17-19, provides an occasion for the Court to offer a
global clarification on that Order. There, the Court held
"that evidence that PG&E's profit motives drove its
compliance (or noncompliance) with the charged regulations is
not substantially outweighed by the risk of unfair prejudice,
as such would be direct evidence of the required mental state
for the regulatory counts." MIL Order at 19. But the
Court noted that "[t]hough this may be true in the
abstract, it does not mean all evidence regarding PG&E's
financial condition would survive a Rule 403 balancing."
Id. As an example, the Court noted that the one
figure offered by the Government would not survive such a
balancing: "the fact that ‘PG&E reported its
income for the second quarter of 2010 as $333 million, '
is a presentation of wealth unnecessary to any argument that
PG&E's profit motives drove regulatory violations . . .
." Id. (citation omitted). However, this
holding was in response to the Government's introduction
of that figure only as evidence of PG&E's wealth.
See Dkt. No. 277 as 12 ("But PG&E is not poor;
a month before the San Bruno explosion, PG&E reported its
income for the second quarter of 2010 as $333
million."). The Court did not mean to suggest, and did
not hold, that the Government may never reference a
PG&E financial figure in making its case that PG&E knowingly
and willfully violated the Pipeline Safety Act regulations.
The Court was merely noting that such figures are only
relevant to the extent that they are offered to prove the
required mental state for the regulatory counts. The parties
should heed this clarification as they continue to confer on
any objections moving forward.
exhibit includes an email and attached summary report
regarding the 2005 Performance Incentive Plan
("PIP") for PG&E's CGT Group.
exhibit is admissible, provided the Government lays the
proper foundation for the email being a nonhearsay statement
of a party opponent under Rule 801(d)(2) (which, as discussed
above, the Court believes it should be able to do through Mr.
Manegold). The email and attachment are not the sort of
financial evidence prohibited by the Court's order on
PG&E's Motion in Limine Number Four, MIL Order
at 17-19, because the evidence is probative of PG&E's
mental state on the charged crimes and not excludable under
Rule 403. Specifically, the email and attachment demonstrate
that "earnings from operations" and "expense
budget management, " among many other laudable targets,
are factors in employees' PIP bonuses, and also
demonstrate the weight of these factors in calculating those
bonuses. This information is relevant to the Government's
theory that "PG&E's profit motives drove its
compliance (or noncompliance) with the charged regulations,
" id. ...