Benjamin J. Hanauer, Esq., Eric M. Phillips, Esq., Marlene B. Key-Patterson, Esq., and Daniel J. Hayes, Esq., U.S. Securities and Exchange Commission, counsel for Plaintiff.
Scott R. Carlson, Esq., DC Law Chartered, counsel for Defendants Capital Solutions Monthly Income Fund, LP, formerly known as Hennessey Financial Monthly Income Fund, LP, and Transactional Finance Fund Management, LLC.
Lawrence J. Field, Esq., and Bryant D. Tchida, Esq., Leonard Street and Deinard, PA, counsel for Defendant Todd A. Duckson.
MEMORANDUM OPINION AND ORDER
DONOVAN W. FRANK, District Judge.
This matter came before the Court for a pretrial hearing on September 3, 2013. Consistent with, and in addition to the Court's rulings and remarks from the bench, and based upon the memoranda, pleadings, and arguments of counsel, and the Court having reviewed the contents of the file in this matter and being otherwise duly advised in the premises, the Court hereby enters the following:
1. Plaintiff Securities and Exchange Commission's Motion in Limine No. 1 to Preclude Evidence and Argument Concerning Truth on the Market Defense (Doc. No. ) is GRANTED IN PART and DENIED IN PART as follows:
a. Assuming that proper foundation is laid by Defendants, to the extent the proffered evidence through brokers and investors relates primarily to the issue of reliance, such evidence is presumptively inadmissible pursuant to the Court's Article 4 analysis.
b. However, to the extent that proper foundation is laid and the evidence relates to what Mr. Duckson told the brokers and investors, the evidence shall be presumptively admissible, assuming that it is not otherwise excluded based upon when the information was relayed by Mr. Duckson to a broker or investor, the nature of the information, or how it was communicated. This decision of the Court assumes that part of the foundation will entail Mr. Duckson taking the witness stand first, before such testimony is elicited from a broker or investor. This decision of the Court is made pursuant to Rule 104 and Article 4 of the Federal Rules of Evidence.
2. Plaintiff Securities and Exchange Commission's Motion in Limine No. 2 to Preclude Speculative and Hindsight Testimony About Whether Defendants' Statements Were Misleading (Doc. No. ) is GRANTED IN PART and DENIED IN PART as follows:
a. The Court concludes that to the extent the evidence focuses on hindsight testimony or hindsight evaluation looking back at what occurred at the relevant times in question, such testimony shall be presumptively inadmissible pursuant to the Court's Article 4 analysis, absent further order of the Court.
b. However, assuming that proper foundation is established, including whether a particular witness has read any document in question or recalls a conversation at the time and place in question, to the extent that a witness has a lay opinion, pursuant to Rule 701, of any statements read or represented to him or her, such testimony will be presumptively admissible pursuant to Article 4.
3. Plaintiff Securities and Exchange Commission's Motion in Limine No. 3 to Preclude Hearsay and Character Evidence Concerning Defendant Todd Duckson (Doc. No. ) is GRANTED IN PART and DENIED IN PART as follows:
a. To the extent that proper foundation is laid, including Mr. Duckson testifying prior to any witness who allegedly participated in the drafting process for the documents at issue, the evidence will be presumptively admissible, provided that it otherwise meets the Court's Article 4 analysis and is not otherwise excluded as hearsay evidence.
b. The Court, however, cautions the parties that this ruling is predicated on the presumption that before any such testimony is elicited, Mr. Duckson will have taken the witness stand and testified, with or without objection, to specifically what he said or did. The Court further notes that, on the record presently before the Court, it is doubtful that adequate foundation will be established in such a manner or that such testimony will constitute habit evidence, pursuant to Rule 406. Importantly, even if such evidence could qualify as an exception to the hearsay rule under Rule 803(3), absent Mr. Duckson ...