United States District Court, D. Minnesota
Gregory G. Brooker, Interim United States Attorney, and
Benjamin F. Langner, Lola Velazquez-Aguilu, and Surya Saxena,
Assistant United States Attorneys, for plaintiff.
C. Conard, for defendant Jerome C. Ruzicka.
T. Rundquist and William J. Mauzy, for defendant W. Jeffrey
C. Engh, for defendant Lawrence W. Miller.
J. Short, for defendant Lawrence T. Hagen.
MEMORANDUM OPINION AND ORDER
R. TUNHEIM CHIEF JUDGE
Jerome Ruzicka, W. Jeffrey Taylor, Lawrence Miller, and
Lawrence Hagen have been charged in connection with the
alleged embezzlement of funds from Starkey Laboratories. The
Court addressed the parties' Motions in Limine in a
Memorandum Opinion and Order issued January 11, 2018. (Mem.
Op. & Order (“MILs Order”), Jan. 11, 2018,
Docket No. 308.) However, the Court deferred ruling on a
motion to exclude certain evidence: (1) bonuses, employment
contracts, compensation packages, or insurance contracts
awarded to female employees to quell harassment complaints
against William Austin and Brandon Sawalich; (2) Austin's
divorce settlement; and (3) defective hearing aids donated to
impoverished individuals in other countries. (Id. at
10-11.) The Court ordered Defendants to produce the evidence
they believed should be admitted for in camera
review. The Court has reviewed the evidence in
camera and makes the following conclusions.
Court finds that the evidence of the harassment complaints is
relevant to determining why Miller received the alleged
“loyalty” bonus and to Ruzicka's alleged
intent to defraud Starkey. (See Third Superseding
Indictment ¶ 45, Jan. 8, 2018, Docket No. 298; Gov. Tr.
Mem. at 7, Dec. 14, 2017, Docket No. 243.) The Court
acknowledges that this evidence is highly prejudicial but
believes that at least some of it is necessary for
Miller's and Ruzicka's defenses. See Fed. R.
Evid. 403. The Government may object to specific evidence or
testimony at trial. Accordingly, the Court will deny the
Government's motion to exclude evidence of harassment
complaints against William Austin and Brandon Sawalich.
Court finds that the evidence of the settlement between
William Austin and his former wife Cynthia Lee Dawson-Austin
is relevant as impeachment evidence. The evidence at issue
relates to an employment dispute, not a divorce case as
described by the Government. Cynthia Lee Dawson-Austin brought
claims against William Austin for - among other things -
fraud, breach of fiduciary duty, breach of implied contract,
and breach of implied covenant of good faith and fair
dealing. Defendants have produced evidence suggesting that
William Austin may have lied under oath during that action
and that at least one business refused to interact with
Austin because he failed to disclose the action. The Court
concludes that this evidence is, at a minimum, admissible for
impeachment purposes. See Fed. R. Evid. 608(b).
Accordingly, the Court will deny the Government's motion
to exclude Austin's divorce settlement.
Court finds that evidence that William Austin donated
defective hearing aids is highly prejudicial. See
Fed. R. Evid. 403. Defendants argue that this evidence is
relevant because it shows Austin's knowledge of Archer
Consulting and that it should also be admitted to impeach
Court agrees with Defendants that they should be allowed to
present evidence that William Austin sourced parts for
donated hearing aids from Archer Consulting. The Court finds
the fact that certain parts were sub-specification is
probative of why Archer Consulting was used to source the
parts. However, the Court finds that it is not necessary to
establish that the parts or the donated hearing aids are
“defective” in order to draw this connection, and
that referring to the products as “defective” is
prejudicial. Defendants may therefore offer evidence that
refers to the parts as sub-specification and the donated
hearing aids as containing such parts, but may not refer to
them as “defective.” The Court does not agree
that donating hearing aids containing sub-specification parts
- by itself - is relevant as impeachment evidence. However,
the Court finds that evidence as to whether Austin
misreported his income taxes is relevant as impeachment
evidence. See Fed. R. Evid. 608(b). Defendants have
produced statements by Austin that he did not believe that
the donated hearing aids were worth full market value because
they contained sub-specification parts. The Court therefore
finds that the factual predicates of the tax returns are
established, and will allow Defendants to impeach William
Austin with his tax returns. See Fed. R. Evid. 104.
the Court will grant the Government's motion to exclude
evidence that Austin donated “defective” hearing
aids to the extent that Defendants may not refer to either
sub-specification parts or the donated hearing aids as
“defective.” However, Defendants may refer to the
donated hearing aids as containing sub-specification parts
and argue that the hearing aids were worth less than full
on the foregoing, and all the files, records, and proceedings
herein, IT IS HEREBY ORDERED that
Government's Motion in Limine [Docket No. 244] is