Theranos Judge Rips 'Tone' Of Attys' Pandemic-Related Filing

By Dorothy Atkins
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Law360 (April 1, 2020, 6:22 PM EDT) -- A California federal judge on Wednesday took issue with the "tone" of a request by ex-Theranos CEO Elizabeth Holmes' counsel to let them violate shelter-in-place orders to prepare for her upcoming trial, saying it wasn't necessary and they should have had a "rational discussion" instead of filing a proposed order.

During a telephonic status conference, U.S. District Judge Edward Davila told Holmes' attorney, Lance A. Wade of Williams & Connolly LLP, that he was "a little taken aback" by the way their proposed order was phrased. The judge said bringing the crisis to the court's attention wasn't necessary.

"I have to tell you sir, I read [the document] and I was a little concerned," the judge said. "You're basically filing a motion in essence asking the court to violate orders in the midst of a national crisis … I look at the order and the tone of it is, 'If you want us to go forward with this hearing, you're going to have to violate [orders across jurisdictions]. And that's what we're asking you to do in a very publicly filed way.' I think perhaps we should have a rational discussion about it, as opposed to 'If you want the trial, then this is what you need to do.'"

Holmes filed a motion earlier this week asking for an order that would allow her attorneys to travel, serve subpoenas and meet with potential witnesses, which they noted would include health care professionals and testing laboratories.

Holmes is scheduled to stand trial in August, with jury selection slated to begin in late July, over the government's allegations that she defrauded investors and uninsured patients by making false claims about the capabilities of Theranos' blood testing technology.

Judge Davila recently cut some charges from the case and severed the trial from that of former Theranos Chief Operating Officer Ramesh "Sunny" Balwani. In the severance order on March 20, the judge said Holmes' trial would go forward as scheduled.

But if the trial is to take place as scheduled, Wade told Judge Davila Wednesday that it would be nearly impossible to prepare Holmes' defense without violating shelter-in-place orders and public health warnings.

"All we're seeking really is if this is deemed essential to make it clear that this is," he said.

Wade added that the legal team doesn't want to violate the orders because the crisis is severe, noting that he has a brother who is a health care professional on the front lines fighting the outbreak.

Judge Davila responded that he also has a relative who is a first responder and he shares Wade's concern, adding that "many of us do."

But the judge said the issue at hand is whether Williams & Connolly has the capability to continue representing clients remotely, and so far it appears that it has used its "outstanding IT capabilities" to continue representing clients uninterrupted.

Judge Davila added that there are "lots of things" that the defense team can do to prepare for trial remotely.

Wade agreed that it is not yet impossible to prepare for trial, but he said it's "almost impossible."

But federal prosecutor Robert S. Leach criticized the proposed order for being "vastly overbroad" and pointed out that it doesn't identify any particular state orders that the defense team would have to violate to get work done or any particular functions that the team can't do without a court-ordered directive.

He agreed with the judge's comment that many of the things defense counsel needs to do can be completely remotely, and he said the government is prepared to move forward with the July trial date.

Judge Davila said he wouldn't currently disturb the trial date, but he recognized that he might have to push back the trial due to the coronavirus outbreak. He set another hearing for April 15, during which he asked the parties to propose alternative trial schedules.

The government is represented by John C. Bostic, Jeffrey Schenk, Robert S. Leach and Vanessa Ann Baehr-Jones of the U.S. Attorney's Office for the Northern District of California.

Holmes is represented by Kevin Downey and Lance A. Wade of Williams & Connolly LLP and John Cline.

Balwani is represented by Jeffrey B. Coopersmith, Melinda Haag, Walter Brown, Randall Luskey, Steve Cazares and Amanda McDowell of Orrick Herrington & Sutcliffe LLP.

The case is U.S. v. Elizabeth Holmes et al., case number 5:18-cr-00258, in the U.S. District Court for the Northern District of California.

--Additional reporting by Jody Godoy. Editing by Jack Karp.

For a reprint of this article, please contact reprints@law360.com.

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