United States v. Rubin/Chambers, Dunhill Ins. Servs.

• Decision Date: 04 November 2011
• Docket Number: No. 09 Cr. 1058.,09 Cr. 1058.
• Citation: 825 F.Supp.2d 451
• Parties: UNITED STATES of America, v. RUBIN/CHAMBERS, DUNHILL INSURANCE SERVICES, et al., Defendants.
• Court: U.S. District Court — Southern District of New York

825 F.Supp.2d 451

UNITED STATES of America,

v.RUBIN/CHAMBERS, DUNHILL INSURANCE SERVICES, et al., Defendants.

No. 09 Cr. 1058.

United States District Court, S.D. New York.

Nov. 4, 2011.

Rebecca Meiklejohn, Steven Tugander, Charles Vincent Reilly, Eric C. Hoffmann, Kevin Bradford Hart, U.S. Department of Justice, Antitrust Division, New York, NY, Lucy Pepe McClain, U.S. Department of Justice, Antitrust Division, Philadelphia, PA, for Plaintiff.

Richard William Beckler, Robert H. Cox, Howrey LLP, Washington, DC, Adam Stewart Katz, Bradley Drew Simon, Brian David Waller, Kenneth Charles Murphy, Simon & Partners, LLP, John Joseph Kenney, Laura B. Hoguet, Hoguet Newman Regal & Kenney, LLP, Juan Alden Skirrow, Willkie Farr & Gallagher LLP, Michael Gerard McGovern, Alyssa Ziegler, Steven S. Goldschmidt, Ropes & Gray, LLP, Daniel Louis Zelenko, Shamiso Kristen-Faith Maswoswe, Crowell & Moring LLP, New York, NY, Donald Etra, Donald Etra, Law Office, Los Angeles, CA, Amanda Nicole Raad, Ropes & Gray

LLP, Chicago, IL, Jeffrey H. Rutherford, Crowell & Moring LLP, San Francisco, CA, for Defendants.

DECISION AND ORDER

VICTOR MARRERO, District Judge.

Defendants Rubin/Chambers, Dunhill Insurance Services, Inc. (“CDR”); David Rubin (“Rubin”); Zevi Wolmark a/k/a Stewart Wolmark (“Wolmark”); and Evan Andrew Zarefsky (“Zarefsky”) (collectively, “Defendants”) were indicted on October 29, 2009 and charged with crimes arising out of an alleged conspiracy by Defendants and others to illegally rig bids, fix prices and manipulate the market for investment instruments known as municipal derivatives. On December 7, 2010, the Government filed a superseding indictment alleging nine counts. ¹

One of the central issues in this matter is whether certain practices of Defendants represented overt acts in furtherance of conspiracies to violate federal antitrust and fraud statutes. On several occasions, the Government has disclosed to Defendants various lists of transactions that it intends to “feature” as overt acts at trial (the “Featured Transactions”). In its Final Bill of Particulars (the “BOP”), the Government includes 210 transactions that allegedly substantiate the conspiracies charged in the superseding indictment.

Now before the Court is Defendants' motion, dated October 11, 2011, for an order, pursuant to Brady v. Maryland, 373 U.S. 83, 83 S.Ct. 1194, 10 L.Ed.2d 215 (1963), directing the Government to identify and produce, in “bucketed” form, audio files, documents and other materials related to transactions that are not listed in the BOP but which Defendants contend contain arguably exculpatory or impeachment material. The discovery already produced—the comprehensiveness of which Defendants do not question—is largely in searchable formats and the Government has provided searchable digests of the audio files it reviewed. Additionally, the Government has provided Defendants with searchable metadata for the audio files and transcripts of those files when available. Defendants do not seek the turnover of any material that has not already been produced by the Government; rather, Defendants request that the Government re-produce in categorized batches documents that relate to transactions with certain characteristics.

Specifically, Defendants ask that the Government be instructed to produce discrete collections of documents and electronic files that relate to four categories of transactions, and that such production be organized and formatted so as to indicate to which of those four categories each document or electronic file relates.² Defendants frame each of the four categories as including transactions that test or refute an aspect of the Government's theory of collusion.³ Defendants contend that evidence of transactions that fall within the four categories is probative of the intentions they possessed when entering into the Featured Transactions. Defendants also contend that the evidence in the four categories would be useful to impeach the testimony of cooperating witnesses who will testify as to Defendants' intent in entering into the Featured Transactions.

Because the Court finds that Brady and its progeny impose no obligation on the Government to organize for Defendants in the format they design material already provided to them, Defendants' motion is denied.

I. DISCUSSION

To establish a violation of Brady, a defendant must show “(1) that the government failed to disclose favorable evidence, and (2) that the evidence it ‘suppressed’ was material.” United States v. Payne, 63 F.3d 1200, 1208 (2d Cir.1995). Under Brady and its progeny, the Government has a duty to disclose favorable evidence known to it, even if the defense makes no specific disclosure request. Id.; Kyles v. Whitley, 514 U.S. 419, 433, 115 S.Ct. 1555, 131 L.Ed.2d 490 (1995). Material is “favorable,” and therefore must be disclosed to defendants, if it is exculpatory or useful for purposes of impeachment. Giglio v. United States, 405 U.S. 150, 153–55, 92 S.Ct. 763, 31 L.Ed.2d 104 (1972). However, “evidence is not considered to have been suppressed within the meaning of the Brady doctrine if the defendant or his attorney either knew, or should have known, of the essential facts permitting him to take advantage of that evidence.” Payne, 63 F.3d at 1208 (internal quotation marks, citations, and alterations omitted).

“ ‘While the Supreme Court in Brady held that the Government may not properly conceal exculpatory evidence from a defendant, it does not place any burden upon the Government to conduct a defendant's investigation or assist in the presentation of the defense's case.’ ” United States v. Ohle, No. 08 Cr. 1109, 2011 WL 651849, at *4 (S.D.N.Y. Feb. 7, 2011) ( quoting United States v. Marrero, 904 F.2d 251, 261 (5th Cir.1990)), aff'd, 441 Fed.Appx. 798 (2d Cir.2011). The Government is under no general obligation to sort or organize Brady material disclosed to defendants. See United States v. Skilling, 554 F.3d 529, 576 (5th Cir.2009) (“As a general rule, the government is under no duty to direct a defendant to exculpatory evidence within a larger mass of disclosed evidence.”), aff'd in part and vacated on other grounds, ––– U.S. ––––, 130 S.Ct. 2896, 177 L.Ed.2d 619 (2010). If the rule were otherwise, it would “place prosecutors in the untenable position of having to prepare both sides of the case at once.” Ohle, 2011 WL 651849, at *4.

In certain circumstances and acting under their discretionary authority to manage the cases before them, some courts have required prosecutors to identify Brady material contained in a previously disclosed but “voluminous” production of documents and data. See United States v. Salyer, Cr. S–10–0061, 2010 WL 3036444, at *2 (E.D.Cal. Aug. 2, 2010) (“[It] is established, as a general rule, that if Brady/Giglio [materials] were disclosed ... the government['s failure to] identify it as such will not [constitute reversible error]. However, that ... does not preclude [this Court,] ... as a matter of case management (and fairness) [,] ... [from] ordering identification to be done.” (emphasis in original)); United States v. Hsia, 24 F.Supp.2d 14, 29 (D.D.C.1998); Cf. Skilling, 554 F.3d at 577 (“We do not hold that the use of a voluminous open file can never violate Brady.” ).

Nonetheless, it is apparent that prosecutors may satisfy their Brady obligations through “open file” policies or disclosures of exculpatory or impeachment material within large productions of documents or files. See Strickler v. Greene, 527 U.S. 263, 283 n. 23, 119 S.Ct. 1936, 144 L.Ed.2d 286 (1999) (“We certainly do not criticize the prosecution's use of an open file policy. We recognize that this process may increase the efficiency and the fairness of the criminal process.”); United States v. Warshak, 631 F.3d 266, 297 (6th Cir.2010) (“The defendants next argue that the government shrugged off its obligations under Brady by simply handing over millions of pages of evidence and forcing the defense to find any exculpatory information contained therein. This argument comes up empty.”); Skilling, 554 F.3d at 576; Ohle, 2011 WL 651849, at *3.

The cases in this area tend to draw the same distinction: Absent prosecutorial misconduct—bad faith or deliberate efforts to knowingly hide Brady material—the Government's, use of “open file” disclosures, even when the material disclosed is voluminous, does not run afoul of Brady. See Warshak, 631 F.3d at 297–98 (finding no evidence of prosecutorial “bad faith” in disclosure); Skilling, 554 F.3d at 577 (finding no Brady violation where there was no indication that government knowingly hid exculpatory evidence within voluminous disclosure); Ohle, 2011 WL 651849 at *4 (“[E]xceptions to these general principles may exist if it is found that the Government deliberately hid documents within a larger mass of materials or somehow purposefully confounded the defendant's search for exculpatory material.”).

Here, there is no allegation of prosecutorial bad faith or that the Government has deliberately hid what it knowingly identified as Brady needles in the evidentiary haystacks of its disclosures to Defendants. Defendants' baldly assert that “the government undeniably encountered exculpatory audio that is inconsistent with its theory of Defendants' guilt. Yet the Government failed to identify that audio during its review, knowing full well that Defendants likely would be unable to find it once it was placed back into the mass of discovery later produced to the defense.” (Memorandum of Law in Reply to the Government's Opposition to Defendants' Motion for Identification and Disclosure of Brady Material (“Defendants' Reply”) (Docket No. 257) at 5.) This bare, conclusory allegation does not justify an order requiring the Government to undertake the organizational and analytical burdens that Defendants would foist upon it to facilitate the preparation of their defense.⁴

The case Defendants most heavily rely upon does not...