United States District Court, N.D. California
SECOND ORDER REGARDING DEFENDANT'S OBJECTIONS TO
MANEGOLD EXHIBITS
THELTON E. HENDERSON United States District Judge
Yesterday,
July 6, 2016, the Court issued its first set of evidentiary
rulings on the 43 exhibits Defendant Pacific Gas and Electric
Company ("PG&E") objects to of the 96 exhibits that
the Government intends to introduce through witness William
Manegold. Dkt. No. 724 ("First Order"). PG&E lodged
these objections on the day prior, July 5, 2016. Dkt. No. 717
("Objs."). The Government filed a written
opposition to these objections just before midnight the same
day, only hours before Mr. Manegold began testifying. Dkt.
No. 718 ("Opp'n"). As Mr. Manegold is presently
testifying, the Court continues its issuance of piecemeal
orders on PG&E's objections with this Second Order
regarding PG&E's next fifteen exhibit-specific
objections.
GOVERNMENT'S
EXHIBIT 351
This
exhibit is an email titled "2Q 2008 Earnings
Materials" and an attachment of tables containing those
materials.
This
exhibit is admissible, provided the Government lays the
proper foundation for the email being a nonhearsay statement
of a party opponent under Federal Rule of Evidence
("Rule") 801(d)(2) (which, as discussed in the
First Order, the Court believes it should be able to do
through Mr. Manegold). Tables such as Table 1, titled
"PG&E Corporation Business Priorities 2008-2011, "
are not the sort of financial evidence prohibited by the
Court's order on PG&E's Motion in Limine
Number Four, Dkt. No. 460 ("MIL Order") at 17-19,
because such evidence is probative of PG&E's mental state
on the charged crimes and not excludable under Rule 403.
Specifically, the Government notes that Table 1 states the
number one corporate priority as "Deliver on [Earnings
per Share] goals, " and that Table 6 shows
"Earnings From Operations" comprised 40% of
PG&E's "Operational Performance Metrics." Such
information is relevant to the Government's theory that
"PG&E's profit motives drove its compliance (or
noncompliance) with the charged regulations, "
id. at 19, and the probative value of this
information is not substantially outweighed by a danger of
unfair prejudice, confusing the issues, misleading the jury,
undue delay, wasting time, or needlessly presenting
cumulative evidence.
However,
to minimize unfair prejudice and maintain compliance with the
Court's order on PG&E's Motion in Limine
Number Four, the Government has offered to "redact the
dollar amounts" from Table 6 (and, presumably, any other
Table where such figures appear) "to protect against
concerns of untethered financial evidence." Opp'n at
4. The Court accepts this invitation, and the Government is
hereby ORDERED to redact the dollar amounts from Table 6. If
PG&E would actually prefer that the dollar amounts not be
redacted, then it should so indicate to the Government before
the admission of this exhibit. The same is true of any
redactions ordered below.
Moreover,
the Government has offered relevance arguments for only
Tables 1 and 6, so the Court holds only that the email and
Tables 1 and 6 (as redacted) are admissible. If the
Government wants to introduce any other Tables, it must first
share those Tables with PG&E to determine whether PG&E's
objection still stands. PG&E is directed to approach any such
conversation with the understanding that its reading of the
Court's order on PG&E's Motion in Limine
Number Four appears (from its objections) to be far too
broad. See First Order at 3-4.
GOVERNMENT'S
EXHIBIT 376
This
exhibit is an email exchange regarding "2009 IM forecast
- further reductions necessary, " including an
associated spreadsheet.
This
exhibit is admissible. Information that budgetary pressures
informed PG&E's Integrity Management ("IM")
practices is 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 such evidence is
probative of PG&E's mental state on the charged crimes
and not excludable under Rule 403. Specifically, the author
of the first email asks whether, given the "very low
2009 budget" for the IM group, "there are any
reductions [to the IM projects planned for 2009] that can be
made while maintaining compliance, " and Mr. Manegold
responds, "we can probably knock the leak investigation
budget down." Such statements are relevant to the
Government's theory that "PG&E's profit motives
drove its compliance (or noncompliance) with the charged
regulations, " id. at 19, and the probative
value of the statements is not substantially outweighed by a
danger of unfair prejudice, confusing the issues, misleading
the jury, undue delay, wasting time, or needlessly presenting
cumulative evidence.
GOVERNMENT'S
EXHIBIT 409
The
parties have reached agreement on the admissibility of this
exhibit, provided the Government lays the proper foundation
(which PG&E has conceded it likely can through Mr. Manegold).
Trial Tr., Vol. 15 at 2286:23-2287:14.
GOVERNMENT'S
EXHIBIT 432
This
exhibit is several email exchanges concerning IM assessments
and the associated costs, including an expense spreadsheet.
This
exhibit is admissible. Information on PG&E's
"Integrity Assessment Strategy, " including the
impact of budget on that strategy, is 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, Mr. Manegold states (among other
relevant statements) that "[PG&E is] looking at having
to defer some assessments this year in order to meet budget,
" and therefore asks which "NSEGS have high risk
segments." Such statements are relevant to the
Government's theory that "PG&E's profit motives
drove its compliance (or noncompliance) with the charged
regulations, " id. at 19, and the probative
value of the statements is not substantially outweighed by a
danger of unfair prejudice, confusing the issues, misleading
the jury, undue delay, wasting time, or needlessly presenting
cumulative evidence.
GOVERNMENT'S
EXHIBIT 470
This
exhibit is an email exchange regarding budget slides.
This
exhibit is admissible. Information regarding the interplay
between PG&E's budget concerns and IM compliance is 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 such evidence is probative of
PG&E's mental state on the charged crimes and not
excludable under Rule 403. Specifically, in one email Mr.
Manegold discusses the reason PG&E switched from In-Line
Inspection to External Corrosion Direct Assessment, the sort
of decision that is directly at issue in this prosecution.
Such statements are relevant to the Government's theory
that "PG&E's profit motives drove its compliance (or
noncompliance) with the charged regulations, "
id. at 19, and the probative value of the statements
is not substantially outweighed by a danger of unfair
prejudice, confusing the issues, misleading the jury, undue
delay, wasting time, or needlessly presenting cumulative
evidence. To the extent PG&E believes that any inferences
drawn by the Government from this exhibit are incorrect or
unwarranted, PG&E will be free to make its case on
cross-examination.
GOVERNMENT'S
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