American court hearing recordings and interviews - USA v Sam Bankman-Fried, 23-6914, 9/19/2023 oral argument to US Court of Appeals for the 2nd Circuit

Episode Date: September 23, 2023

oral argument re revocation of bail, incarceration of SBF pending trial, sixth amendment issues, freedom of speech issues, first amendment issues, preparation for criminal trial

23-6914 in the United States versus Samuel Bankman-free. We'll let everybody get settled up here at the council tables. And again, when you do step up to the podium, take your time, adjust the lectern as you need, adjust the microphones, make yourselves at home. And Mr. Cohen, I understand you would like to reserve one minute for rebuttal. Is that right? Yes, Your Honor.

Very good. At your leisure, proceed. May it please the court want to begin by thanking the court for taking us in such an expedited basis. We really appreciate that on behalf of our client. My time is limited, so I would just touch on three points that are in the briefing that we'd ask the court to consider. First, we submit that on the record before this court that the district court erred in how it addressed. the interplay between the Bail Reform Act and the First Amendment issues, and it did not give sufficient weight to the First Amendment issues.

And rather than going through the whole sequence, I just would like with the Court's permission to focus on one aspect of it, which is the key encounter of my client with the New York Times reporter. And when you consider every aspect of that encounter in light of cases like the Gentilly case from the Supreme Court, every aspect of it was protected or permitted conduct. Well, can I ask you this? It seems well established that if there's probable cause to believe that your client was trying to engage in a violation of the criminal loss, then that would create a rebuttable presumption in favor of detention, right?

That is the test under 3148, Your Honor. That's right. You're not suggesting that somehow the First Amendment sort of trumps that test, that if someone is engaged in what would otherwise be protected speech with an intent to intimidate or influence or to engage in some of the criminally forbidden activity, then it's taken out of the First Amendment protection zone, right? I think what we would be saying, Your Honor, is that. that the First Amendment is part of the analysis and that the district court with respect said the First Amendment has nothing to do with the analysis here. In evaluating whether or not there was a violation or probable cause to find the violation of 1512, it would be legally proper for the district court to consider whether the speech

itself or the conduct itself was itself protected. There isn't a First Amendment right to try to discredit or influence a witness who might testify against you, is there? No, Your Honor, there isn't, but there is, I'm sorry. Your client did provide these personal and embarrassing writings to the Times, and Judge Kaplan found, as a factual matter, that he did it, to discredit her, perhaps to influence her. Aren't those factual findings to which we should give deference?

The court should give deference, but under the Gentile case, which derives from New York Times v. Sullivan, where there's a First Amendment issue raised, the appellate court has the obligation to consider the record as a whole. And also under these court's cases, I think we cited Sheiker, but there's other ones, the review by the court can be more flexible where there's an error of law that impacted the determination here. I guess my question is why is it an error of law? The question of whether, what intent was in a person's mind when they undertook certain conduct is a factual question, correct? It is, but the question, I'm sorry. I'm sorry, so just the question of whether someone had a specific intent at a particular time is a factual finding that we review only for clear error, right?

Because the district court is in the best position to make those decisions, and therefore we afford tremendous, in fact, probably the greatest amount of deference that is available to us under the various standards of review. Unless impacted by a misapplication or a misunderstanding of an issue of law. And the question of what the person's intent was if the person believed that it was protected speech... If it's not... If there is an instruction or

intent to intimidate, etc., to violate the statute, once that determination is made, the First Amendment has no play anymore. But the First Amendment comes into play in how you go about making that determination. Well, you look at the facts, right? But...

But... And decide what the situation is. But Judge Walker, in these unusual facts, every step considered by the District Court was protected under the First Amendment. But I think you see... You also said just before Judge Walker's question, it depends on what your client believed as to whether he was engaging in First Amendment protected conduct. But that can't possibly be true, that if someone has a subjective belief that their conduct is protected by the First Amendment, even though they also have the intent to influence or intimidate the witness, that somehow their subjective belief exculpates them?

I've never heard, such a little proposed. So I'm certainly not saying that. Okay, so you're not arguing with that. No, I'm saying that the district court with respect needed to engage with the process, the structure of how this was unfolded, because if, for example, it is protected to speak to a reporter, which it is, if it is protected to deny your guilt, which it is, if it's protected to meet with the reporter, particularly where the bail conditions were followed, which it is. If it's permitted to... But it's always permitted. The First Amendment protects anybody from speaking in any context, right?

There's nothing special about talking to a reporter that is more protected than speaking to any other person on the street, right? You wouldn't suggest that talking to your friend is not protected by the First Amendment, correct? Right. So I guess the question is, in any context, a person has a First Amendment right, a freedom of speech. If at any point the speech is designed to intimidate or influence a witness in a way that violates the law, then the First Amendment protections are no longer in place. Let me ask you this, because we've already kept you up beyond your time. You said you had three points you wanted to make, and I do want to make sure that you have at least a minute to flag these other two points.

So we'll give you one extra minute here that will not eat into your rebuttal. If you want to quickly flag is two additional points. I appreciate that. Thank you, Your Honor. The two additional points both relate to the topic of least restrictive alternatives. As this court has written many times, the structure of the Bail Reform Act is such that it is the preference that the defendant received bail pending trial. And here, with respect, there already was a least restrictive alternative. alternative in place at the time of the revocation hearing. So that's the problem.

The alternatives in place. And the government and the defendant had agreed to various accommodations all the way along. And the district court reached a conclusion that, well, they weren't working. The actions that took place here took place. And therefore, all those other ones had been considered, presumably he considered, there was a whole record of these restrictive alternatives. before him at the time because he'd had the case from the beginning. And now he reached a different conclusion.

Well, Your Honor, with respect, what was before the district court, there had been one prior incident which is covered in the briefing addressed by a new bail condition which limited contact or prohibited contact with potential current and former employees of the companies at issues that had been complied with for six months. And so what was before the court was this encounter with the New York Times reporter, the court on consent of the parties had issued a temporary order based on Rule 23.1, local Rule 23.1, which was in place for a week at the time of the revocation hearing and could have continued in place. And with respect, we don't believe the district court properly considered

that. And just to be quick, my last point is that in fashioning less restrictive alternatives, the court with respect did not take into into in consideration the Sixth Amendment issue here of being able to prepare for trial. We have a trial on October 2nd. We have one of the most complex set of materials in recent history in this courthouse. If printed out, they would be three skyscrapers worth. And at the moment, our client is not, and this is, this is in the case. the record, but it's also at the moment, is not meaningfully able to review them because he needs internet access. Internet access is only available to him in the cell block at the MDs

in this courthouse. This is not faulting. Where is he being held right now? He's being held at the MDC. This is not faulting the Bureau of Prisons. Cell block was designed many years ago before internet issues came about. We were with him last week. We sat with him for two hours. He was able to call up one document in two hours. You can't prepare for trial this way, Your Honour's. You just can't. You've reserved a minute for rebuttal, and we will look forward to hearing from you again. Why don't we hear from Ms. Sesson for the government? Can you be done about the Internet service at the NTC? Yes, I'm happy to answer a question. I'm Danielle Sassoon, and I represent the government on appeal, as I do before the district court. In terms

of these Six Amendment issues, those are not properly presented on this appeal, but they are being addressed before the district court. And for example, I direct the court's attention to docket 278. These issues are being actively litigated. The government has come up with a number of solutions and extraordinary measures to permit the defendant to prepare for trial. Judge Kaplan is giving these arguments consideration. The defense, since the appeal was filed, has raised these arguments before the district court, and they're not properly considered for purposes. Is the idea to get an internet connection into the MCC, or is it to bring him, make it easy for him to come over here and get his internet connection? Just sort of generally what's going on in the district court? Sure. So the

Bureau of Prisons does not permit an internet-enabled laptop at MDC, but the defendant has been provided two laptops that permit him to review hard drive material within the MDC, including all of the government exhibits and 3,500 material. The defendant is also permitted to be produced twice a week to the cell block here where there is internet access. And I understand there have been some challenges using that internet access, but it's available and defense counsel's permitted to meet with him twice a week in the cell block for that purpose. As reflected in docket 278, the defendant and also has seven experts reviewing these databases on his behalf. He had approximately seven months before he was detained with unfettered internet access

to review his discovery materials and to prepare for trial. And Judge Kaplan found that there has been no Sixth Amendment issue thus far. And it's fair to say that even though Judge Kaplan has been divested of jurisdiction over the release determination by the present appeal, so that jurisdiction is vested in us, he still retains jurisdiction. over all of these other issues such as accommodating access to internet materials and all the other things that he's considering right now. So there's something about this appeal that is obstructing his ability to manage this as he normally would. That's correct. The judge considered a motion under 3142I, and the defense is permitted to make similar motions in the future.

And Judge Kaplan noted the motions made thus far fail to describe with any specificity, the type of... of materials that he needs to be able to review that he has been unable to review. I'd like to turn to the bail determination. Judge Nardini, as you noted, the question for Judge Kaplan was whether there was probable cause that while out on bail the defendant acted with the intent to improperly influence or intimidate a witness, and he did not err in determining that that is what the defendant did, much less clearly err. And Mr. Cohen focused on the incident within the New York Times, but of course there was also the preceding incident with Witness 1, where Judge Kaplan's factual findings were plainly correct. and at the very least, a reasonable interpretation of the facts where the defendant reached out to a potential trial witness

after he had been arrested and extradited and knew that former employees would be testifying against him and asked this potential witness to use each other's resources, to vet things with each other, and to have a constructive relationship. That incident alone gave rise to the rebuttable presumption under 3148. and the second incident involving Ms. Ellison, while standing alone, also amounts to attempted witness tampering, also reinforces the improper intent with respect to the first incident, demonstrates that the defendant was intent on evading his bail conditions, and intent on interfering with a fair trial. And on this point about the First Amendment, your honors are exactly right, that once the judge determined that there was an improper intent, He was correct to say that the First Amendment did not overcome that and had no longer had anything to do with it.

And here, given the constellation of facts, there was ample basis to conclude that the conduct with respect to the New York Times amounted to witness tampering. That includes the content of the material, which on appeal counsel does not dispute, painted Ms. Ellison in an unfavorable light. and as Judge Kaplan found, would be unlikely to be shared absent an intent to hurt, discredit, or frighten the subject of the material. And it's not so much a question of discrediting, right? I mean, that's not part of witness tampering, right? I mean, witness tampering would be trying to influence someone, right? Intimidate them. And I can see how this would support, but, you know, I can see how discrediting might go to some other problem like making extraditional

statements that could be viewed as potentially tainting the jury pool, but discrediting someone on their own is not, I mean, that's not witness tampering, right? I think here the form of the effort to discredit was her private journal entries. It wasn't statements saying this person's a liar. Well, I know. But my point is it can't be an intent to discredit, right? That's not a crime. Intent to influence someone is a crime, intent to intimidate and I can see how publicly humiliating a person could be viewed as a form of trying to influence them, giving them a warning, this is what I do to people. Yes, Your Honor.

I will release private, embarrassing, humiliating information if you tried to testify against me. That could be viewed as an attempt to dissuade the person from testifying strongly or testifying at all, I suppose, or dissuading other people out there from coming forward and testifying at They say, well, I saw what happened to witness A. I don't want that to happen to me. But I just want to distinguish that we're not suggesting that someone's statements, an intent to discredit a witness is itself inherently the same, or always and everywhere the same as an intent to influence or intimidate, right?

Absolutely not always and everywhere the same. And here you have much more than just an effort to discredit. So you have the content of the material. You have the manner in which it was shared. This is not somebody who was out there advocating on his own behalf. He did this anonymously, and he did it covertly. Even though he was in contact with this reporter by phone and email, he had the reporter come to his house and view the material on his computer,

which as Judge Kaplan found. And those facts, in your view, go towards his intent. Yes. That he would not have been covert if he thought this was all a perfectly innocent thing that was not meant to hurt or intimidate someone. Yes, as Judge Kaplan noted, this was significant because it indicated he was trying to cover his tracks. If he did this openly in his own name or via the phone or email, which was being monitored by the government, you wouldn't necessarily have the same implication that comes from inviting this reporter.

It's a concept of guilt or a set of facts that in your view or district court's view goes towards consciousness of guilt, which itself reflects on his illegal intent. Yes, Judge Nardini. And then you also have two other important considerations, the timing shortly before trial, when Ms. Ellison is soon poised to take the stand, and the broader context. This is not limited to just the incident with the New York Times.

This goes back to the crimes themselves, where the allegations include that the defendant instituted auto-deletion policies at his companies in order to destroy evidence. You have the incident with Witness 1. You have the court's admonishment that he, he should not be tampering with witnesses, and you have restricted bail conditions, including a prohibition on direct contact with witnesses.

And against that backdrop, he meets secretly with the reporter and funnels this information. So given that constellation of facts, Judge Kaplan was well within his discretion and concluding that this incident also amounted to attempted witness tampering and supported revocation of bail. I'll just address the final point, the least restrictive means.

Judge Walker, as you noted, given the incremental approach here where the judge gave the defendant an opportunity under a less restrictive set of conditions and determined that that was a failure, was well within his discretion to conclude that no conditions could reasonably assure safety of the community. Thank you. I think we have the government's argument. Why don't we hear from Mr. Cohen? You have reserved one minute for rebuttal. If there's any last thing you'd like us to hear. Maybe I'll only take 58 seconds. Just very quickly, Your Honor, Your Honors, the government on the access issue, yet again, is telling us what they hope will happen.

Hasn't happened. The client was remanded on August 11th. It's September 18th. No access to the Internet. No ability to review the AWS database, which is the complex financial database that governs the whole company. no ability to search the discovery and work with as attorneys in that. Saying that we have experts and only one of them is a database expert and that can substitute for sitting and working with your client

in preparing for a trial of this magnitude is just not practical, it's not realistic. And that was... As every incentive to cooperate with you in working out an arrangement whereby there would be access to to your client because after all they don't want to if there's a conviction they don't want an issue on appeal

this to be an issue on appeal so one would think that they would be bending over backwards to help you and make sure that they seem to be doing that now I mean they're saying that it's under review now by the district court Judge Walker

that's what they're saying but it's not happening I thought he was allowed out twice a week to get access to be? He's allowed He's allowed to the cell block to sit with a computer that doesn't get the internet. Well, I thought he got internet access those two days a week to access the network. It's so slow as to be meaningless. We sat for two hours. He was able to toggle onto one document and call up the first page.

Well, again, if this was going to be this important to your client, it would have been a very good consideration for him to have taken into account before he's. decided, as Judge Kaplan found, to intimidate or influence witnesses. And at this point, it becomes a case management job for the district court to ensure that your client has enough time and opportunity to prepare for trial. But like anyone else, if it is true that he has intimidated witnesses, at a certain point, he makes his own bet he sleeps in it. Well, Your Honor, that's if the determination and the consideration of list restrictive alternatives was appropriate in the first place, which is for this court to review. And that's fair. Okay.

Yeah, do you want to add one more thing? One more point, if I might. I might go over my 58 seconds. But just quickly I'd like to respond to a couple things counsel said about the encounter. Counsel claimed that this was done in a covert way, and in fact, the opposite is true. The only reason we know about this encounter,

the only reason we know about Mr. Rankman-Fried as a source for this story, as opposed to other potentials of sources of which we think there were government sources is he complied with his bail conditions. The reporter signed in, was searched by the security god, was logged in, and the call was subject to a pen register.

So up until that encounter, he was complied with his bail conditions and the protective order. So the context is actually the opposite. And lastly, I would just say when you look at cases like La Fontaine, that this court has issued. And you look at other cases in revocation of bail,

the conduct in a situation where there is no risk of flight issue, there is no violence or physical violence issue, this is a very narrow issue about one encounter. We don't think the second one count, but we don't have time to get into the other one. In cases like La Fontaine, where a revocation of bail was affirmed by this court, the facts were far more extreme than anything we used.

have here. So for all the reasons in our submission, we'd ask the court to reverse and send it back. Thank you. Thank you very much. We've very well argued on both sides. We very much appreciate the submissions and arguments of counsel. We will take the case under advisement. With that, we