SEC v. Berrettini, 2015 U.S. Dist. LEXIS 115963 (N.D. Ill. Sept 1, 2015):

The SEC brings an insider trading action against Defendants Morando Berrettini ("Berrettini") and Ralph Pirtle ("Pirtle"). Before the Court are the SEC's motions in limine numbers 7 through 10 [191-94]. For the reasons stated below, the Court denies the SEC's motion in limine number 7, grants in part and denies in part the SEC's motion in limine number 8, reserves final [*2]  ruling on the SEC's motion in limine number 9, and grants in part and denies in part the SEC's motion in limine number 10.

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II. Legal Standard

A motion in limine is a motion "at the outset" or one made "preliminarily." Black's Law Dictionary 803 (10th ed. 2014). The power to rule on motions in limine inheres in the Court's role in managing trials. Luce v. United States, 469 U.S. 38, 41 n.4, 105 S. Ct. 460, 83 L. Ed. 2d 443 (1984). Motions in limine may be used to eliminate evidence "that clearly ought not be presented to the jury because [it] clearly would be inadmissible for any purpose." Jonasson v. Lutheran Child & Family Svcs., 115 F.3d 436, 440 (7th Cir. 1997) (observing that, when used properly, the motions may sharpen the issues for trial). The party seeking to exclude evidence "has the burden of establishing the evidence is not admissible for any purpose." Mason v. City of Chicago, 631 F. Supp. 2d 1052, 1056 (N.D. Ill. 2009).

Because motions in limine are filed before the Court has seen or heard the evidence or observed the trial unfold, rulings in limine may be subject to alteration or reconsideration during the course of trial. United States v. Connelly, 874 F.2d 412, 416 (7th Cir. 1989); see also Luce, 469 U.S. at 41-42 ("Indeed, even if nothing unexpected happens at trial, the district judge [*3]  is free, in the exercise of sound judicial discretion, to alter a previous in limine ruling."). In addition, if an evidentiary issue raised in a motion in limine "cannot be evaluated accurately or sufficiently" prior to trial, it is appropriate to defer ruling until trial. Jonasson, 115 F.3d at 440 (delaying until trial may afford the judge a better opportunity to estimate the evidence's impact on the jury).

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C. Motion In Limine No. 9 to Exclude Certain Online Articles

The SEC moves to exclude the online articles in Berrettini Exhibits 63 and 65-72 (see [193-1]) and Pirtle Exhibits D-L to D-S (see [193-2]). Berrettini has agreed to withdraw Exhibits 65 and 70-72. See [208] at 2. Accordingly, the question is whether Berrettini may introduce Exhibits 63 and 66-69 and whether Pirtle may introduce Exhibits D-L to D-S. The exhibits at issue generally consist of online news articles, press releases, and press reviews, discussing Philips' plans to acquire medical services, equipment, or device businesses; Lifeline and Intermagnetics' strong performance in that market; and Philips' existing supply contract with Intermagnetics. Defendants offer these exhibits to support their arguments that Pirtle did not give Berrettini material, non-public information; that there was contemporaneous [*15]  public information indicating that Lifeline and Intermagnetics were potential acquisition targets of Philips; and that Berrettini decided to purchase the stocks in question based, in part, on this information. The SEC moves to exclude these articles on three grounds: (1) that Berrettini neither read the articles nor disclosed them during discovery; (2) that Defendants cannot authenticate the exhibits; and (3) that the articles are irrelevant. The Court considers each argument in turn.

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2. Authentication

The SEC also argues that Defendants will be unable [*20]  to authenticate any of the articles, because printouts from private websites are not self-authenticating and Defendants have identified no witnesses who could authenticate the articles at trial. Pirtle responds that the documents are self-authenticating or, in the alternative, can be authenticated under Rule 901. [204] at 10-11. Berrettini, by contrast, does not claim that the documents are self-authenticating, and states that he will authenticate the documents at trial. [208] at 13.

The authentication requirement is satisfied if the proponent produces evidence "sufficient to support a finding that the item is what the proponent claims it is." Fed. R. Evid. 901(a). Rule 901 only "requires only a prima facie showing of genuineness and leaves it to the jury to decide the true authenticity and probative value of the evidence." United States v. Harvey, 117 F.3d 1044, 1049 (7th Cir. 1997). Rule 902(6) provides that "[p]rinted material purporting to be a newspaper or periodical" is self-authenticating. Fed. R. Evid. 902(6). Rule 101(b)(6), which was added in 2011, provides that "a reference to any kind of written material or any other medium includes electronically stored information." Fed. R. Evid. 101(b)(6). Although records from government websites generally are considered to be self-authenticating (see Williams v. Long, 585 F. Supp. 2d 679, 686-89 (D. Md. 2008)), "exhibits reflecting information from commercial websites [*21]  must be authenticated by one of the methods allowed by Rule 901, including testimony from a witness with personal knowledge, expert testimony, or reference to distinctive characteristics." Foreword Magazine, Inc. v. OverDrive, Inc., 2011 U.S. Dist. LEXIS 125373, 2011 WL 5169384, at *3 (W.D. Mich. Oct. 31, 2011) (citing Lorraine v. Markel Am. Ins. Co., 241 F.R.D. 534, 556 (D. Md. 2007)). While the case law in this fast-developing area of the law is by no means uniform, "[t]he lower courts generally hold that an affidavit of a witness, when viewed in combination with circumstantial indicia of authenticity (such as the existence of the URL, date of printing, or other identifying information) would support a reasonable juror in the belief that the documents are what the proponent says they are." Id.

The Court concludes that the disputed documents are not self-authenticating under Rule 902(6) because Defendants have not convincingly shown that the documents are comparable to "printed material purporting to be a newspaper or periodical." To be sure, Berrettini Exhibit 63 (which is also Pirtle Exhibit D-L) appears to be a copy of an article that originally appeared in the Wall Street Journal. However, the document contains no URL or other information indicating that the article was obtained from the Wall Street Journal's website or where or when it was obtained.¹¹ Berrettini Exhibits 66 and 67 are being [*22]  offered into evidence by Berrettini only, and Berrettini does not argue that they are self-authenticating. Berrettini Exhibits 68 and 69 (which are Pirtle Exhibits P and Q, respectively) appear to be printouts from "The Street" website. However, they do not contain URLs showing where the articles appear on the Internet. It is also unclear whether "The Street" should be considered a newspaper or periodical, and the Defendants do not address this issue. Pirtle Exhibit D-M is a printout from the "Leleux Press Review." It contains no URL and no indication that it is a printout of a newspaper or periodical. Pirtle Exhibits D-N, D-O, D-R, and D-S are printouts of articles that appear in Westlaw's "NewsRoom" database but that were originally published in other publications, such as the Associated Press News and Reuters News. Pirtle cites no case law suggesting that printouts from Westlaw or other archives of articles that were previously published by other newspapers or periodicals are self-authenticating under Rule 902(6). Therefore, these documents are not self-authenticating and would require authentication before being introduced at trial.

11   As discussed at the August 24 pre-trial conference, the SEC [*23]  agrees that if either Defendant were to procure a photocopy of an actual article from the print copy of the Wall Street Journal (or any other recognized newspaper or periodical) there would be no authentication problem.

The SEC argues that Defendants will be unable to authenticate the articles that Berrettini did not personally read, because they have not identified any witnesses with the qualifications necessary to establish the documents' authenticity. To the extent that either Defendant personally pulled the articles from the Internet, he could testify about how the process by which he obtained the articles and when this was done. In Hood v. Dryvit Systems, Inc., 2005 U.S. Dist. LEXIS 27055, 2005 WL 3005612, at *2 (N.D. Ill. Nov. 8, 2005), for example, the court found on summary judgment that the plaintiff sufficiently authenticated printouts of pages of the defendant's website by offering an affidavit from the plaintiff's attorney stating that he retrieved the documents from the defendant's website on a particular date.

But standing alone, such testimony would not be sufficient to establish that the material was actually on the website on any date other than the one on which the Defendant did his research. However, in this case Defendants intend to use the articles to prove that the [*24]  information they contain was publicly available at the time of the alleged illegal trades. [204] at 5. The articles are relevant as to this issue only if the articles were publicly available during the 2005/2006 timeframe. Pirtle does not claim to have any personal knowledge concerning whether the articles were publicly available at their original sources on the dates shown on the printouts. Perhaps Pirtle could authenticate the articles based on the "distinctive characteristics" of the websites from which they were allegedly printed, although his current argument in that regard lacks the specificity that would enable the Court to make a reliable assessment. Pirtle claims that Exhibits 63 (D-L), 68 (D-P), 69 (D-Q), and D-M were printed from websites, but none of these exhibits contain URLs showing what websites they came from or dates showing when Pirtle (or someone else) printed the articles. D-N, D-O, D-R, and D-S are printouts of articles that appear in Westlaw's "NewsRoom" database but that were originally published in other publications. Pirtle has not offered declarations or proposed testimony from witnesses with knowledge concerning the accuracy of the database and the dates [*25]  contained on articles it republishes. Pirtle might, for example, have offered a declaration from a Westlaw employee explaining its process for determining the date to include on the articles. Without any such support, Pirtle appears to have no basis to for claiming that the articles are what Pirtle claims they are--i.e. articles that were publicly available in 2005 and 2006. See Specht v. Google Inc., 747 F.3d 929, 933-34 (7th Cir. 2014) (affirming district court ruling on summary judgment that, in order for plaintiff to rely on website screen shots as evidence that the screenshots reflect how the websites appeared in 2005, it "required authentication by someone with personal knowledge of reliability of the archive service from which the screenshots were retrieved"); see also SEC v. Yang, Case No. 12-cv-2473, Tr. 98-99 (N.D. Ill. Dec. 19, 2013) (transcript of hearing before Judge Kennelly) (suggesting a similar approach). Cf. SP Technologies, LLC v. Garmin Int'l, Inc., 2009 U.S. Dist. LEXIS 91183, 2009 WL 3188066, at *3 (N.D. Ill. Sept. 30, 2009) (printouts from websites were properly authenticated, for purposes of use during summary judgment, where defendants introduced an affidavit from the manager of the Internet Archive from which the printouts were obtained "who explained how that website saves old web pages" and when defendants' exhibit "was created"); Telewizja Polska USA, Inc. v. Echostar Satellite Corp., 2004 U.S. Dist. LEXIS 20845, 2004 WL 2367740, at *6 (N.D. Ill. Oct. 15, 2004) [*26]  (admitting evidence from the Internet Archive when accompanied by an affidavit from an Internet Archive official).

For the same reason, Berrettini's suggestion that he could self-authenticate the internet materials that he found falls short of the mark. The Seventh Circuit has explained that even where the creators of a website "asserted from memory that the screenshots reflected how those sites appeared" on a certain date, "the district court reasonably required more than memory, which is fallible." Specht, 747 F.3d at 933. It follows a fortiori from Specht that if the website creator's testimony alone will not suffice, then any attempt by a user of the website to authenticate from memory must fail. Rather, as in Specht, proper authentication could be supplied "by someone with personal knowledge of reliability of the archive service from which the screenshots were retrieved" (id.)--here, Westlaw.

Based on the foregoing discussion, the Court cannot conclude that Defendants have made a sufficiently persuasive case to authenticate their web-based exhibits. Certainly the better course would have been to submit the affidavit of a witness with personal knowledge of the specific archive from which Defendants retrieved [*27]  the materials. As the court in Foreword Magazine explained, courts often rely on "an affidavit of a witness, when viewed in combination with circumstantial indicia of authenticity (such as the existence of the URL, date of printing, or other identifying information)" to establish the bona fides of an internet printout that will be shown to a jury as evidence at a trial. 2011 U.S. Dist. LEXIS 125373, 2011 WL 5168493, at *3-4.

However, as discussed at the recent pre-trial conference, the fact that Defendants have not yet made a satisfactory showing does not foreclose them from remedying the shortcomings addressed above prior to trial. It may not be too late to obtain the kind of affidavit from personal knowledge that the case law strongly prefers. In addition, the case law does not seem to indicate that a third-party affidavit is an absolute prerequisite, particularly if the "circumstantial indicia of authenticity" are robust and convincing. See, e.g., Ciampi v. City of Palo Alto, 790 F. Supp. 2d 1077, 1091 (N.D. Cal. 2011) (noting that courts evaluating internet print-outs consider the "distinctive characteristics" of the website in determining whether a document is sufficiently authenticated and finding that print-outs of internet publications had "sufficient indicia of authenticity, including distinctive [*28]  newspaper and website designs, dates of publication, page numbers, and web addresses"). Defendants have made some references to these characteristics in arguing their points, but if they intend to rely on this basis for authentication, the Court will allow them time to walk the Court (and the SEC) through the exhibits in specific detail to explain why those characteristics should suffice. Finally, as discussed on the record at the August 24 pre-trial, to the extent that Defendants are able before or during the trial to authenticate their articles the old-fashioned way, by locating the original print (or microfilm) versions of the articles, they should advise the Court.