1 IN THE CIRCUIT COURT OF THE STATE OF OREGON 2 FOR THE COUNTY OF WASHINGTON 3 4 STATE OF OREGON, ) ) 5 Plaintiff, ) ) 6 vs. ) No. C940322CR ) 7 RANDAL LEE SCHWARTZ, ) ) ) 8 Defendant. ) 9 10 11 TRANSCRIPT OF PROCEEDINGS 12 13 BE IT REMEMBERED THAT on the 20th 14 day of September, 1994, the above-entitled matter 15 came on for Hearing before the HONORABLE ALAN C. 16 BONEBRAKE, a Circuit Court Judge. 17 18 APPEARANCES 19 MR. THOMAS J. TINTERA Deputy District Attorney 20 Representing the Plaintiff 21 MR. MARC SUSSMAN Attorney at Law 22 Representing the Defendant 23 24 25 2 1 WITNESS INDEX 2 3 FOR THE STATE: Direct Cross ReD ReX 4 5 James Lilley 56 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 3 1 MORNING SESSION 2 BEGINNING AT 9:45 A.M. 3 SEPTEMBER 20, 1994 4 5 MR. TINTERA: Morning, Your Honor. 6 This is the time set for omnibus hearing in the 7 case of State of Oregon v. Randal Schwartz, case 8 number C940322CR. 9 The defendant is present. He's not 10 in custody at this time. He's appearing with 11 counsel, Marc Sussman. State is appearing through 12 Tom Tintera. And also at counsel table 13 representing the Intel Corporation is Richard D. 14 Pierce. 15 THE COURT: Morning. 16 MR. SUSSMAN: Morning, Your Honor. 17 THE COURT: Is everyone ready? 18 MR. SUSSMAN: Defense is ready, Your 19 Honor. Mark Sussman appearing with Mr. Schwartz. 20 THE COURT: I got the file late 21 yesterday, but, unfortunately, the settlement 22 conference I was doing last evening went until 23 7:00. 24 I went through it quickly this 25 morning. There are a number of matters. Has the 4 1 motion to compel discovery been resolved? 2 MR. TINTERA: I believe that's been 3 resolved. 4 THE COURT: A demurrer as well? 5 MR. TINTERA: Almost resolved. The 6 demurrer has been resolved. 7 THE COURT: Looks like we have a 8 motion to suppress statements and evidence as a 9 result of search, and motion to controvert and 10 Motion in Limine that covers probably the 11 statements as well. 12 MR. TINTERA: In regard to the 13 Motion in Limine, that was delivered to my office 14 at 2:15 yesterday afternoon and I assumed, because 15 of its untimely delivery, that we wouldn't be 16 discussing it today since it wasn't -- 17 THE COURT: I think I have to 18 resolve the motion to suppress before we get to 19 that anyway. Those are the primary categories of 20 things that we have to do. 21 MR. TINTERA: Yes, Your Honor. 22 THE COURT: Let's proceed on the 23 motions to suppress and controvert and then I 24 guess, theoretically, if I was to include, allow 25 the motion to suppress, we wouldn't even get to the 5 1 Motion in Limine. 2 MR. TINTERA: The schedule that 3 counsel and I talked about is first there is a 4 matter that is not before you as far as motions, 5 but I'm going to bring up orally in regard to the 6 defense's subpoenas of various individuals to this 7 hearing and particular duces tecum. 8 I thought we would address that 9 first. That is why Mr. Pierce is here, in response 10 to those particular subpoenas as to what would be 11 properly subpoenaed and what would not and the 12 procedure for that. 13 Secondly, we talked about doing the 14 statement aspect with police officer witnesses, in 15 particular Paul Lazenby, so that he could be 16 released. Detective Lilley will have to remain for 17 most of the day. 18 Then it made sense to address the 19 motion to controvert because if it was allowed, 20 then it would potentially change what is in the 21 affidavit itself in regard to your determination of 22 probable cause. So that's the schedule as I see 23 it. 24 THE COURT: I'm glad you talked, and 25 I encourage counsel to get together to try to 6 1 informally figure out a schedule that works for 2 everybody and that makes sense. I encourage you to 3 continue talking and cooperating so you can assist 4 me in getting what you said. I endorse what you 5 just said. 6 It may be necessary for Officer 7 Lazenby to come back later on if we get to the 8 issue of the Motion in Limine. 9 MR. TINTERA: He's on call. I know 10 how to reach him. 11 MR. SUSSMAN: The other thing we 12 discussed is that I had anticipated probably a few 13 questions, probably just -- I can't say two or 14 three, but a few minutes worth of questions for 15 Detective Lazenby that might go to the motion to 16 controvert, but I don't see the need to call him 17 back since there are a very limited number of 18 questions on that issue. 19 THE COURT: As long as they are 20 available. Counsel may think of additional matters 21 as we go along. Sometimes they come up. I assume 22 that neither Lazenby or Lilley are planning to have 23 a vacation out of the country, although I did read 24 somewhere that Lilley went back to his home country 25 of Australia. He isn't planning another trip, is 7 1 he? 2 MR. TINTERA: Yes. The governor has 3 authorized him to go to the 51st state -- is that 4 Hawaii or is that the 50th state -- anyway to 5 retrieve two criminals, but he won't be leaving 6 until Friday. 7 THE COURT: Is he going to Hawaii? 8 Is that voluntary? I assume he won't be staying 9 overnight. You'll just be going for the day and 10 coming back, won't you? All right. 11 Counsel, you set the schedule pretty 12 much and call your witnesses. You've already 13 talked a lot and agreed on a procedure on how to go 14 forward with the evidence and I'll -- if we are 15 primarily in one area that you want to ask a few 16 questions, as you suggested, maybe on the motion to 17 controvert, let me know when you are doing that so 18 I can put in my notes that this relates to the 19 motion to controvert and that's helpful to me. 20 MR. SUSSMAN: Very well. Just for 21 further record, I don't know that, other than the 22 detective, there are any witnesses in the 23 courtroom, but I would move to exclude witnesses 24 for the substantive motions. 25 MR. TINTERA: Well, that's a 8 1 problem. Mr. Pierce has been, apparently, 2 subpoenaed as a witness, but he's also here 3 representing Intel with regard to the subpoena 4 aspects. I'm not sure why counsel would call Mr. 5 Pierce as a witness, but that's up to him. 6 THE COURT: We can take that up. 7 Can't we and dispose of -- You indicated one of the 8 issues had to do with the subpoena. 9 MR. TINTERA: That's the first issue 10 on my docket. 11 THE COURT: Well, we can take that 12 up. 13 MR. SUSSMAN: That was my intent. 14 THE COURT: Then after he's been 15 heard on that, if he's going to be a witness, then 16 he can be excluded. 17 Mr. Pierce -- 18 MR. TINTERA: Before we get to that, 19 Judge, I would like to -- I've been provided with 20 criminal subpoenas that counsel served on Clyde 21 Stites, John Kent, Rich Cower and Richard Pierce 22 and I've had them marked as State's Exhibit 1 and I 23 would ask that these be offered into evidence at 24 this time so that we have a context in which to 25 address my comments. 9 1 THE COURT: Any objection for the 2 purpose of this hearing? 3 MR. SUSSMAN: No, Your Honor. 4 THE COURT: No. 1 is received. 5 MR. TINTERA: I, originally in my 6 subpoena, felt that it was their province of the 7 intent to -- if they want to quash them or comply 8 with them, that was within their province. But as 9 an after thought late last night, I thought I 10 should check the statute that authorizes the 11 issuance of these subpoenas. I know it had been 12 amended by the 1993 legislature and I hadn't 13 checked the wording and so I did. 14 When I read it, I realized that the 15 format for defense counsel issuing these subpoenas 16 had not been followed. These subpoenas, in my 17 mind, are not with authority of the court because 18 counsel has not followed the procedure as set out 19 in 136.580 Sub 2 and, as I know Your Honor is a 20 aware, there has been problems with defense counsel 21 subpoenaing broad subpoenas directed to individuals 22 to bring them to particular hearings without any 23 particular basis for that subpoena or basis for 24 them to do anything at the hearing except to bring 25 their records and to make them available to defense 10 1 counsel. 2 I believe the legislature has 3 addressed that problem when it amended 136.580 and 4 the procedure that the legislature set forth to 5 involve the parties, the State and the defendant, 6 receiving records prior to trial or hearing is set 7 out in Paragraph 2, which states, "On the motion of 8 the State or the defendant, the court may direct 9 that the books, papers or documents described in 10 the subpoena be produced before the court prior to 11 trial or prior to the time the books, papers or 12 documents are to be offered into evidence. 13 Now, what the legislature has done, 14 it has put the parties in a motion practice to have 15 the court authorize the issuance of these 16 subpoenas. 17 That has not been done in this case 18 and I think the legislature intended that the 19 parties be present on a motion filed by either one 20 for the production of these types of books, papers 21 or documents and I think the rationale of the 22 legislature was to involve the court and the 23 parties in determining what was relevant to avoid 24 undue hardship to, essentially, an ex parte 25 issuance of a subpoena by one of the parties to 11 1 bring these documents so that the court can be a 2 referee to determine, before the subpoenas are 3 issued, what should and should not be required of a 4 private individual to bring to court. 5 That procedure has not be followed 6 in this case and it's my position, having refreshed 7 myself on this statute, that the State does have an 8 interest that the procedure be followed so that we 9 can talk to a judge and the judge can authorize 10 what would be in that subpoena and the issuance of 11 the subpoena. Therefore, I think the court, should 12 defense counsel wish to call these people as actual 13 witnesses, the duces tecum part of these particular 14 subpoenas, I think, is faulty and should not, 15 and I'd ask the court to strike -- I don't know if 16 there are other subpoenas out there that have been 17 issued. 18 I believe one citizen who does not 19 work for Intel any more has been served with a 20 subpoena, Mark Morrissey. I don't know how many 21 other people have been served, but I consider it to 22 be an improper subpoena. 23 I would ask the court to strike the 24 duces tecum part of any of these particular 25 subpoenas for the fact that the defendant has not 12 1 followed the specific statutory procedure in 2 generating these subpoenas. 3 THE COURT: Okay. 4 MR. SUSSMAN: Your Honor, I also 5 read 136.580 and looked at the procedure. I would 6 disagree in two respects: First of all, the 7 statute is a permissive statute and what it did was 8 set up a procedure which would allow the parties to 9 request a time prior to the actual trial or the 10 hearing where the documents would be produced and 11 inspected instead of waiting to bring the material 12 into court with the idea that then we could 13 interrupt, would have to wait until the documents 14 were actually in the proceedings and causing delay 15 in the proceedings themselves to go through all the 16 documents, and so that the parties to the case 17 would have the opportunity to see those documents 18 on application of the court at some time prior to 19 the hearing. It did not add a requirement or make 20 or change the basic power of the subpoena to say 21 bring the documents with you to the particular 22 hearing. 23 In this particular case, we also 24 have a situation where discovery was requested of 25 the state, both by letter and in the motion, and 13 1 Mr. Tintera informed me that he had provided all 2 that Intel had agreed to provide him and any 3 further request would have -- or any further 4 information would have to be obtained through the 5 subpoena duces tecum, which was what was done and 6 became the subject of the subpoenas issued in this 7 case, particularly one directed to Mr. Pierce which 8 is the one that is, as chief counsel for Intel, 9 requiring that they bring -- that he bring with him 10 a number of documents that are of a broader nature 11 than just specifically the reports or notes that 12 any of the individual witnesses made about their 13 particular contact with my client in this case. 14 We also anticipated that this 15 hearing, because it is an omnibus hearing, would 16 provide the opportunity for Intel to raise any 17 objections to the subpoena, to the contents of the 18 subpoena and I don't believe that the statute 19 prohibits the issuance of the subpoena duces tecum 20 for Intel to bring those documents with us now and 21 they are materials which will be necessary for 22 trial and we can take care of that matter now. 23 It's not -- 24 MR. TINTERA: Well, Judge, counsel 25 just said that these documents have been subpoenaed 14 1 here for preparation for trial. There is no 2 procedure under any of the subpoena powers or 3 discovery, for that matter, to subpoena documents 4 for discovery purpose to a hearing unless it is 5 under Subsection 2 of this particular statute and 6 that hasn't been followed. 7 The court is aware that there have 8 been numerous abuses of the subpoena power by 9 defense counsel and inconveniencing private 10 citizens to bring documents to hearings, 11 arraignments, omnibus hearing, whatever they could 12 think of, release hearings, to gain access to 13 documents. That practice has been frowned upon. I 14 think the legislature has attempted to address that 15 practice and reach a compromise, but it involves 16 the court in regard to authorizing the issuance of 17 a subpoena duces tecum for discovery purposes. 18 There is no other procedure that I'm 19 aware of that allows counsel to issue subpoenas for 20 discovery purposes for anything but the hearing in 21 where the documents will be offered into evidence. 22 THE COURT: He has filed a motion to 23 controvert. I'm assuming that there will be 24 evidence produced by the defense on that. It's 25 possible that these witnesses have evidence that's 15 1 relevant to issues raised in his motion to 2 controvert. 3 MR. TINTERA: That's not what he 4 said it he did it for. He said he did it for the 5 purposes of getting these documents in preparation 6 for trial. And the motion to controvert, as the 7 court is aware, has certain threshold issues that 8 haven't been addressed at this particular point in 9 time. 10 THE COURT: We have not gotten to 11 that point yet. 12 MR. TINTERA: I'm going on what 13 he -- 14 THE COURT: There is no procedure 15 for subpoenaing documents to a hearing for 16 discovery purposes. I have not been shown where 17 that exists in the Criminal Code. If they are 18 relevant to a proceeding that the court is hearing, 19 then the subpoena duces tecum is appropriate, I 20 believe, and I think Subsection 2 does provide a 21 procedure for either side to discover documents, 22 papers, that sort of thing, pursuant to a subpoena 23 duces tecum at a time prior to the trial or 24 hearing. I think defense counsel is correct on 25 that. 16 1 Now, if the subpoena duces tecum has 2 been issued to the current and past employees of 3 Intel, requires them to bring forth evidence that 4 is somehow relevant to the proceedings that we are 5 conducting here, that is the omnibus hearing, then 6 its appropriate. If it's just for discovery, then 7 it's not appropriate. 8 Now, you did say in your statement 9 to me, I believe, that it's for the purpose of -- 10 MR. SUSSMAN: I did, Your Honor, 11 and -- well, I did. 12 THE COURT: Of course, you could go 13 through the procedure in Subsection 2 and if you 14 convince me, then do what you are seeking to do 15 with the subpoena duces tecum. In other words, 16 obtain a court order for it. Basically Subsection 17 2 is a discovery sort of procedure. 18 MR. SUSSMAN: It is, and I did 19 partially misspeak because there are a number of 20 the documents and of the materials that were 21 contained in the subpoena. It goes to a number of 22 records which would reflect my client's activities 23 showing what were authorized and what were proper 24 activities, activities which would have been 25 proposed to show, would have shown to Intel and 17 1 either were not communicated to the officers or 2 communicated and not put in the affidavit. So 3 those materials will be necessary for trial and 4 also for the underlying issue. 5 THE COURT: To show what information 6 was possibly orally communicated to the officers, 7 to the officer that signed the search warrant 8 affidavit but then were not placed in the 9 affidavit; is that it? 10 MR. SUSSMAN: That's correct. 11 THE COURT: Well, it could be 12 relevant to the motion to controvert. Good faith 13 accuracy of the affiant. 14 MR. TINTERA: Well, I don't want to 15 get into the motion to controvert too far, but I 16 think the case law is very clear that the 17 statements of someone other than the affiant cannot 18 be controverted and that seems to be what they are 19 saying, is that perhaps Intel had information of 20 various witnesses. 21 THE COURT: I think what I'm 22 suggesting, what he said, though, is that it's 23 not -- he's not seeking to controvert what they 24 say, but if it bears on the good faith or accuracy 25 of the police officer that signed the affidavit. 18 1 In other words, he somehow selectively placed 2 material in the affidavit, some material, possibly 3 substantiation of probable cause and then left out 4 material that might have affected negatively 5 probable cause. Is that what you are suggesting? 6 MR. SUSSMAN: Yes, Your Honor. 7 THE COURT: And that may reflect on 8 the officer's good faith accuracy. 9 MR. SUSSMAN: It does go to the 10 point made in our motion to controvert, that 11 material to go to the good faith accuracy of the 12 affidavit. 13 MR. TINTERA: Well, we can 14 establish, Judge, that no documents were given to 15 the investigating officer before he wrote the 16 affidavit and I believe discovery may not spell 17 that out, but I think counsel maybe didn't figure 18 that out, but that the investigation was not 19 generated through the Sheriff's Department through 20 reports. It was generated through an oral report 21 to Detective Lilley. But if he thinks he can 22 establish there were some documents given to 23 Detective Lilley that he didn't put in the 24 affidavit, I suppose have at it. 25 THE COURT: One dilemma that the 19 1 trial judge always has in these kinds of cases, and 2 I suspect that it's occurring here, is that you all 3 have lived with this case for some period of time 4 and know a lot about the case, I hope, and I know 5 nothing about it, so it's difficult for me to rule 6 in a vacuum. 7 I hate to exclude something now and 8 then find out after I know more about the case that 9 it's something that actually ought not have been 10 excluded, so I'm reluctant to exclude things now. 11 In that it's a court proceeding and 12 Mr. Tintera has been through this in my court 13 before -- couple years ago, we had a murder by 14 abuse case where it was similar, very complex case, 15 a lot of evidence and the court knows not much 16 about it. 17 My preferred procedure is to not 18 exclude things now. To hear it. If I think it's 19 inappropriate later on, strike it and not consider 20 it for the purpose of the motion or motions that 21 are being considered. Or midway through the 22 proceedings, if it appears that based upon what 23 I've heard at that time, foundational evidence, 24 historical material, that sort of thing, if it 25 appears unlikely that it's relevant or appropriate, 20 1 then sustain an objection to the material or quash 2 the subpoena or something like that. But I know 3 nothing about this case. I hear your argument, but 4 it's all in a vacuum. 5 MR. SUSSMAN: I understand that. As 6 you are commenting, I'm going through the checklist 7 in my mind of what was in the subpoena. I, 8 perhaps, can suggest a way to deal with this. I 9 would agree that there are certain materials in the 10 subpoena which would not be specifically relevant 11 to what's at issue today and we can -- might make 12 sense for us to sit down and go through that. What 13 it will put me in a position of doing is, as the 14 State suggests, of taking up with the court a 15 motion to authorize reservice of the same subpoena 16 for the same documents for a later hearing which I 17 believe that perhaps we can do, and perhaps we 18 should take a few minutes -- 19 THE COURT: I think that would be a 20 good procedure. 21 MR. SUSSMAN: Take a break for a few 22 minutes to go through that and then we can sort of 23 deal with that on the procedural level. 24 I'm prepared to address the issues 25 to the court, the relevance of the material, why we 21 1 would be seeking this in advance of the 2 proceedings. I must confess that, in part, we made 3 a broad subpoena duces tecum both for material that 4 would be relevant not only to this hearing but also 5 things relevant primarily for trial, in part 6 because the State was informed that Intel would 7 produce nothing further and that we would have to 8 require production through subpoena duces tecum. 9 THE COURT: I take it as an 10 admission now that some of the material that you 11 sought through the subpoena duces tecum, you were 12 seeking for discovery purposes. 13 MR. SUSSMAN: That's correct. 14 THE COURT: Some of it is relevant, 15 you believe, to the issues before the court in the 16 omnibus hearing? 17 MR. SUSSMAN: Yes. 18 THE COURT: So if you could sit down 19 and go through that and if there are some witnesses 20 that need not be here now or some witnesses that 21 have been required to bring information that need 22 not be brought now, then we could notify those 23 witnesses and either not require them to appear or 24 not require them to bring some of the information 25 until you go through the statutory procedure. 22 1 MR. SUSSMAN: With respect to the 2 witnesses who were subpoenaed duces tecum, the 3 duces tecum for the witnesses, other than Mr. 4 Pierce, all asked them to bring their notes and 5 records regarding their involvement in this 6 investigation because those witnesses are being 7 called to testify either about -- specifically 8 about the statements Mr. Schwartz made to these 9 people when they were accompanying the police 10 during the interrogation or these people were 11 involved in the communication with the police for 12 purposes of producing the affidavit supporting the 13 search warrant, and except for one report from one 14 witness, Rich Cower, we have no further notes or 15 documents showing any recording of statements made 16 by Mr. Schwartz or of these communications. So the 17 subpoena duces tecum for these people to bring 18 these notes or records or reports was specifically 19 to address those, see what, if anything, these 20 individuals had that would also be relevant to the 21 specific issues of this hearing on Mr. Schwartz' 22 statements and the information that was generated 23 and that we believe was -- 24 THE COURT: So that is a discovery 25 sort of -- 23 1 MR. SUSSMAN: But it is information 2 that would be necessary to litigate the issues on 3 the suppression hearing. 4 THE COURT: It may be if what you 5 discover is relevant and helpful to you, but if 6 that's the case, the procedure that Mr. Tintera 7 pointed out probably should have been complied with 8 and that is that you ought to have made that 9 showing to the court prior to this hearing and 10 given the court an opportunity to determine whether 11 or not those people should be required to bring 12 that information. 13 Well, that's a misstatement. You 14 ought to have made your application to the court, 15 as provided in Subsection 2 of 136.580, so that the 16 court could then determine whether or not that is 17 discoverable evidence in this proceeding. The 18 thing you might use in your motion to compel or -- 19 MR. SUSSMAN: Except to the extent 20 that the witness is asked to testify. Witnesses 21 were present and are -- potential -- and these are 22 witnesses noticed by the State as witnesses for the 23 trial who will testify as to Mr. Schwartz' 24 statements. 25 The court must know, in ruling on 24 1 the motion in the omnibus hearing, what statements 2 are to be suppressed and so we asked these 3 witnesses to testify about that and -- 4 THE COURT: Not necessarily. I do a 5 lot of hearings on the admissibility of statements 6 and never hear what the statements are. The 7 content of the statement frequently is not relevant 8 at all whether it's admissible. It's the 9 circumstances under which it is given. 10 Sometimes the content is relevant, 11 like a defendant may blurt out, "Stop beating me." 12 That's certainly relevant to the issue of whether 13 the statement should be received into evidence. Or 14 a statement like, "I don't want to talk until I see 15 my lawyer." That's relevant. But if it's simply 16 about the facts of the case, it usually has little 17 relevance to the issue of whether it should be 18 received. 19 We look for Miranda-type issues, 20 constitutional-type issues for the circumstances 21 under which the statement was made, statements 22 possibly made by the police officer, but the 23 content of the statements frequently is not 24 relevant to the issue of admissibility. We're not 25 looking at issues of relevance when we do 25 1 Miranda-type hearings. We're looking at 2 admissibility as examined under constitutional 3 principles, usually. So you both look dumb founded 4 now. 5 MR. TINTERA: I'm not meaning to 6 look that way. I do have a point to make. 7 THE COURT: Let Mr. Sussman 8 continue. 9 MR. SUSSMAN: I do understand that. 10 But I suppose for the sake of judicial economy, 11 those issues become important in terms of 12 addressing not only whether there will be -- there 13 is a point of which some or part of the statements 14 may or may not be admissible even under the 15 constitution and there are different statements to 16 different people. 17 THE COURT: Then we have to identify 18 which ones they are and -- 19 MR. SUSSMAN: Right. 20 THE COURT: Sometimes we can do it 21 by date or time or place, but if there are portions 22 of statements made -- some of which are admissible 23 and some aren't -- on a particular day or occasion, 24 then we have to identify them. Only way to 25 identify them is by what was said, so I agree with 26 1 that. 2 MR. SUSSMAN: At any rate, that was 3 going back to the issue of what the specific 4 subpoena, the duces tecum part of the subpoenas for 5 the witnesses who were called either for the 6 statements or for, or to specifically talk about 7 the motion to controvert because we were calling 8 witnesses who communicated with the police officers 9 about information which was related in the 10 affidavit. 11 THE COURT: If the witnesses have 12 documents that show what they said to the police 13 officers or a police officer that signed the 14 affidavit, is that Officer Lilley? 15 MR. TINTERA: Yes, Your Honor. 16 THE COURT: Does he relate what 17 other police officers were told as well? 18 MR. TINTERA: The door closed. I 19 didn't hear you. 20 THE COURT: Does Officer Lilley 21 relate what other police officers were told as 22 well? 23 MR. TINTERA: He only relates 24 information that was received directly from Paul 25 Lazenby, not what other witnesses told Paul 27 1 Lazenby. 2 THE COURT: So the affidavit that 3 Officer Lilley signed related in part, at least, 4 things that were told to him and things that were 5 told to officer Lazenby by Intel employees? 6 MR. TINTERA: No. The things that 7 Officer Lazenby interjected was his own expertise 8 in regard to computers, but was not based on 9 anything that he received from another witness. 10 THE COURT: So is it correct, then, 11 that anything that was in the affidavit, any 12 statement in the affidavit by Officer Lilley -- 13 I'll begin again. Any statements in the affidavit 14 that are statements about what Intel employees have 15 said are statements made to Officer Lilley? 16 MR. TINTERA: Yes. 17 THE COURT: Okay. 18 MR. TINTERA: Except for, I believe 19 there is one sequence where an Intel employee told 20 another Intel employee some information who then 21 told Detective Lilley. 22 THE COURT: Then it would seem if 23 they have records about the things that were said 24 to Officer Lilley, either directly or through other 25 employees, that that might be relevant and 28 1 appropriate evidence in a motion to controvert, 2 assuming somehow it bears on the good faith, 3 accuracy of Officer Lilley. 4 MR. TINTERA: I would agree with 5 you, Judge, and the court is in a position to 6 modify the subpoenas for this particular hearing to 7 reflect that. I think we are also in a position to 8 comply with a modified subpoena to bring any 9 records of any statements of the witness that they 10 made to officer or Detective Lilley. 11 THE COURT: Mr. Sussman had 12 indicated that he might be able to sit down and go 13 through the subpoenas and discuss it with you, and 14 given my guidance now about what I think would be 15 appropriate for the motion to controvert, and it 16 might be that the two of you, if there are 17 witnesses, a witness or witnesses who need not come 18 today, we could notify them and if they've been 19 commanded to bring things that they need not bring 20 today, they could be notified of that as well. 21 However you wish to proceed. 22 MR. SUSSMAN: That would be fine 23 because once we separate that out, Your Honor, I 24 think the next step is, I would move the court to 25 authorize the issuance of the subpoena that the 29 1 other materials in the subpoena be produced. 2 THE COURT: We'll take that up. 3 Let's do it one step at a time. 4 You're going to see that dazed look 5 in my eye when you overwhelm me. You overload the 6 judge here with information and I want to do it one 7 at a time. Yes, I think the statutory procedure is 8 still available to you and if you think there is 9 other material that you wish to discover, you can 10 make a case for it. Then you can go into 11 Subsection 2. 12 I'm going to take a recess here. 13 What I'm suggesting is not necessarily that you 14 enter into any form of stipulation. You can -- 15 that's troublesome sometimes. 16 Mr. Sussman, given what we have 17 discussed here and the nature of my preliminary 18 ruling, if you want to notify Mr. Tintera that 19 there are some portions of it here that you are not 20 requesting under the subpoenas today, you can 21 put -- if there are witnesses or witnesses that 22 need not come today or if there are witnesses that 23 need not bring some material that could be helpful 24 and they could be notified, then we will proceed 25 with the rest of it. 30 1 MR. SUSSMAN: That would be fine. 2 To the extent that I can look at that and we can 3 sit down and say these are things that are not -- I 4 can address that to a motion for production at a 5 later time. 6 THE COURT: Then you can file your 7 motion under Subsection 2 and I'll consider it. 8 Are we running into a time problem 9 with witnesses? 10 MR. TINTERA: Your Honor, I have the 11 police officers available and the Intel employees 12 that have been subpoenaed are on call for the noon 13 hour. They are not here. I didn't think we'd get 14 to the motion, that part of the hearing until this 15 afternoon. 16 THE COURT: Let's take about 10 17 minutes or so. Make your list. Let Mr. Tintera 18 know that which you're kind of backing off from now 19 temporarily that would be the subject of your next 20 motion under Subsection 2 of the statute and then 21 the remainder of the witnesses -- the remainder of 22 the material that you have subpoenaed under 23 subpoena duces tecum, I would expect needs to be 24 available unless when Mr. Tintera looks at the 25 list, he takes issue with some of it, I'll still 31 1 hear any objections that he has. 2 MR. TINTERA: Your Honor, as far 3 as -- okay. 4 THE COURT: Let him make his list 5 and you look at it. If you think there is some of 6 it that is not relevant to the motion to 7 controvert, I'll take it up. If not, then, we'll 8 proceed with his list. 9 (The court was in recess.) 10 THE COURT: Mr. Sussman. 11 MR. SUSSMAN: Your Honor, I've gone 12 through the subpoena and I've related to 13 Mr. Tintera the items on the subpoena that is 14 challenged which I believe could be addressed in 15 the motion for production at a later time as 16 discovery and those items which I believe contain 17 documents which are relevant to the inquiry of the 18 witnesses in the motion to controvert the search 19 warrant. 20 Mr. Tintera respectfully disagrees 21 with my assertion that, of what we want, and I 22 think is taking the position that it's all 23 discovery and other than any notes relating to 24 statements to the officers, it should all be the 25 subject of a separate motion. 32 1 THE COURT: The problem, of course, 2 is there may be, just anticipating, there may be 3 some information that you are seeking for discovery 4 purposes that once disclosed might be relevant to 5 the motion to controvert. 6 MR. SUSSMAN: It would be fair to 7 say that there is a motion which I'm seeking which 8 I expect would be relevant to the motion to 9 controvert which was also intended for discovery 10 purposes. It has a dual purpose. The fact that it 11 has a dual purpose shouldn't preclude us from being 12 able to subpoena it for the use of the hearing on 13 the motion. 14 THE COURT: Of the witnesses who 15 were subpoenaed, are there any of them that you 16 are -- that in their entirety, you are willing to 17 release from their subpoenas now because it's all 18 discovery material? Or do each of the individuals 19 that you have subpoenaed duces tecum, do you still 20 want them? 21 MR. SUSSMAN: Mr. Stites could be 22 released. Clyde Stites could be released. 23 THE COURT: Your belief is -- 24 MR. SUSSMAN: Because he would be 25 called to testify specifically about statements 33 1 made by Mr. Schwartz to him. 2 THE COURT: I'll release him from 3 his subpoena today. Anybody else? 4 MR. SUSSMAN: The other witnesses, I 5 would still need to inquire of because their 6 testimony would go to the substance of the motions, 7 whether or not the documents they have brought with 8 them, their testimony is still essential to the 9 issues. 10 THE COURT: Mr. Tintera, you take 11 issue with some of that, do you? 12 MR. TINTERA: Yes, Judge. I'm 13 looking -- if the court would like to follow 14 along -- in State's Exhibit No. 1 in regard to the 15 subpoena duces tecum for Richard D. Pierce. In 16 regard to Paragraph 1, which defense counsel has 17 characterized as contract agreements with the Intel 18 Corporation, he's requesting that that be brought 19 in regard to the motion to controvert. As I 20 understood Your Honor -- 21 THE COURT: Which subpoena are you 22 looking at? Oh, I found it. "Bring with you all 23 documents listed on the attached addendum." Then 24 there is Paragraphs 1 through 15. Which of those 25 did you just address? 34 1 MR. TINTERA: No. 1. 2 THE COURT: Now, you think that 3 clearly has no relevance to any -- 4 MR. TINTERA: To a motion to 5 controvert. What I heard you say was that any 6 documents of any statements that encapsulate what 7 an Intel witness said to Detective Lilley in regard 8 to what goes into the affidavit for the search 9 warrant. That's what I thought. 10 THE COURT: Things that weren't 11 disclosed to the officer aren't relevant to a 12 motion to suppress. If these documents somehow are 13 relevant for information that was disclosed to the 14 police officers, then it is appropriate. I can't 15 tell in a vacuum. I have to rely on what you 16 gentlemen believe. Your belief is, for instance, 17 No. 1 has no relevance to any information that was 18 given to the police officers that was then 19 considered by them in making their affidavit for 20 the motion, affidavit of the search warrant. 21 MR. TINTERA: Well, I don't know. I 22 can't say for sure whether Detective Lilley 23 received any oral information from anyone about 24 Mr. Schwartz' contractual relationship with Intel. 25 I can say that he did not review any written 35 1 contracts between the defendant and Intel. 2 THE COURT: I want to get through 3 this and sometimes it's just necessary to make 4 general rulings in pretrial matters and then with 5 the possibility of changing the ruling later on. 6 I'd like to in this case. In this 7 case, if Mr. Sussman, being an officer of the court 8 says, 'Judge, my belief is this is relevant to the 9 issues in the motion to controvert', I think I'm 10 just going to go on good faith at this time. And 11 if it develops later on that it isn't, then I still 12 would reserve the right to release the witness from 13 the subpoena or to strike the evidence, whatever. 14 But I think -- My impression is, you've spent about 15 30 minutes doing it. You went through the list. 16 You considered -- you tried to do the best you 17 could in understanding my ruling about the statute 18 and what you could do here and what you need to do 19 through the subsection of the statute and I think 20 I'm going to endorse that for now. 21 If the particular -- You have 22 released Mr. Stites from the subpoena. Have you 23 also indicated that some of the other witnesses 24 didn't need to bring with them some of the 25 information that you had included in the subpoena 36 1 duces tecum? 2 MR. SUSSMAN: I didn't understand 3 that. 4 THE COURT: We have a number of 5 witnesses who have been subpoenaed duces tecum. 6 MR. SUSSMAN: Right. 7 THE COURT: Stites, you said, 8 doesn't need to be here at all. That leaves all 9 the rest of the witnesses. Do you intend to use 10 them for two purposes: One, to testify on issues 11 on the motion to controvert. And the other is, 12 they've been asked to bring with them documents and 13 things. Having gone through those subpoenas, if 14 you decided that some of the material that you've 15 asked for with those witnesses is clearly 16 discovery, you ought to go through the statutory 17 procedure as it's all relevant to the motions. 18 MR. SUSSMAN: On the witnesses, 19 besides the subpoena to Mr. Pierce, I was accepting 20 the court's limitation previously stated which is 21 that would be limited to those documents relating 22 to their communication with the officers. 23 THE COURT: Have you made a list, 24 though, of things, then, that you had earlier 25 required them to bring in their subpoena that now 37 1 you are conceding they need not today? 2 MR. SUSSMAN: It was those other 3 witnesses. It was a single request for any of 4 their reports, records, notes regarding their 5 investigation of Mr. Schwartz' activities involving 6 this particular incident. And so accepting the 7 court's limitation, it was my understanding that it 8 would be communicated to those witnesses that the 9 only documents they need to bring for this 10 particular hearing would be of that limited nature. 11 THE COURT: Relevant to what they 12 told the police officers -- 13 MR. SUSSMAN: In the preparation of 14 the affidavit. 15 THE COURT: -- in the preparation of 16 the affidavit or prior to the preparation of the 17 affidavit. 18 MR. SUSSMAN: Yes. That's correct. 19 THE COURT: Then anything else they 20 need not bring today. 21 MR. SUSSMAN: That's correct. 22 THE COURT: That would be my ruling. 23 Any other preliminary matters? 24 MR. SUSSMAN: Not for the defense, 25 Your Honor. 38 1 THE COURT: Mr. Tintera, anything 2 else? 3 MR. PIERCE: Your Honor. 4 THE COURT: Yes, Mr. Pierce. 5 MR. PIERCE: I think what we've done 6 is, we've compiled all the evidence and we're going 7 to have to take some time to go through it. I do 8 have three categories of information that I'd like 9 to discuss in terms of how to handle that 10 information. 11 I think due to the fact that it's 12 extremely valuable business trade secret 13 information and, in addition, I do have some work 14 product information that I would like to exclude. 15 And, finally, a small subsection of attorney/client 16 privilege information. 17 Now, I haven't mapped that against 18 the current conditions that we just set forth and 19 so that may take me some time to do, but just to 20 recap what I'm really saying, I don't think that 21 Intel has any objection to delivering the trade 22 secret information to the defendant in some 23 controlled form. The information contains the very 24 access codes that the defendant illegally obtained 25 even to a greater degree and we want to make sure 39 1 somehow we can control the access to that 2 information. 3 THE COURT: You're saying that he 4 already has that information? 5 MR. PIERCE: No. He has a subset of 6 that information. If I formally comply with the 7 subpoena, he will get a larger set of that 8 information. We have no objection to delivering 9 that to his counsel, but I would like to devise 10 some scheme where that information is certainly 11 restricted to his access. 12 THE COURT: To counsel's access? 13 Are you suggesting that the defendant ought not 14 receive it then? 15 MR. PIERCE: Yes, that's correct. 16 THE COURT: Mr. Sussman, having only 17 had this issue raised on one or two prior occasions 18 before, I anticipate that that could cause 19 difficulty in representing your client when you get 20 information you can't inquire of the client about 21 its relevance or how it might be involved in the 22 case, you need to -- sometimes counsel say, 'no, 23 that's fine, I can deal with it, and I wouldn't 24 disclose it to anyone, not even my client, because 25 I think I can handle it that way unless I ask for 40 1 leave of the court and we come back and talk about 2 it some more'. 3 On the other hand, you say, 'No, 4 Judge, in order to defend my client, I need to take 5 this information and talk with my client about it 6 and develop the case and what he may or may not 7 know about this and I can't do that unless I 8 disclose it to him'. 9 MR. SUSSMAN: I have to confess that 10 I'm trying to sort, trying to process in my mind 11 what the -- precisely the larger subset we're 12 talking about here when we're talking about trade 13 secrets. Is this in written response to the 14 request for passwords that my client was authorized 15 to use? Am I misunderstanding? 16 MR. PIERCE: No. We believe that 17 what you have asked for in, shall I say, your 18 overly-broad subpoena contains password information 19 that isn't relevant to the case. It is trade 20 secret to Intel. We want to make sure that's 21 restricted. 22 We, in the interest of justice, 23 don't mind giving it to you, but we want to make 24 sure it's restricted to perhaps your access, not to 25 your client's access. 41 1 MR. SUSSMAN: The only problem I 2 have in responding is, I'm not sure what you are 3 referring to is those materials which are broader 4 or that you want restricted. It's hard for me to 5 distinguish because I'm not sure what specifically 6 you are referring to here. 7 MR. PIERCE: I apologize because 8 we've somewhat limited the scope of the subpoenas. 9 I have to map that information against what 10 information we've got. But I suggest that the user 11 activities logs that you want, the user account 12 numbers, the FTT log notes, for instance, would be 13 considered to be valuable trade secrets that we 14 certainly want to restrict. 15 I don't know about the other 16 specific issues that you've asked about, system 17 manager accounts, but I suspect would also fall 18 under that category. Then once again the entire 19 set of passwords which we've delivered in 20 accordance with the subpoena perhaps would also 21 fall under that category. 22 So just to recount, user account 23 numbers, user activity logs, FTT account logs, 24 certainly the system manager accounts and the 25 passwords. 42 1 MR. SUSSMAN: Your Honor, I'm really 2 having trouble, and in fairness to Mr. Pierce, I 3 don't want to be unnecessarily unfair about this, 4 but the difficulty that I have is some of these 5 matters, I think, become important to the issues 6 both in this hearing and at trial which are what 7 was the scope of the client's, Mr. Schwartz', 8 authorization and was that authorization 9 communicated? And it may very well -- I'm 10 reluctant to say that I will not discuss this 11 information with my client because I may need to 12 ask questions to understand what it is that I'm 13 getting. 14 THE COURT: That's the point that I 15 was suggesting early on. What I would like to do, 16 so we can get this moving, is take it one step at a 17 time. Any ruling that I have made now, I would not 18 pretend is a final ruling and if we could get 19 started with the process, that if we could agree 20 here, at lease initially, that it's not to be 21 disclosed, you could review it. If then you think 22 that you can't proceed to defend your client 23 without talking with your client, without 24 disclosing some of the information, we'd come back 25 and I'd make additional rulings. Like a civil 43 1 case, take it one step at a time. 2 Initially, we'd have a protective 3 order and that information would not be disclosed, 4 not to be shared with anyone, not even your client, 5 which is unusual, without further order of the 6 court. You could review it, come back, see what 7 he's talking about. If you have a disagreement 8 about whether it really is confidential information 9 or if you believe that due process requires that 10 you have some discussion with your client about it, 11 I can understand how that might be the case. Then 12 you'll come back here and I'll decide it. 13 MR. SUSSMAN: That makes sense 14 because we will have to come back over some of 15 these discovery issues and perhaps we can then 16 start out with the issues that seem clearly within 17 the issues that we're talking about today that Mr. 18 Pierce is not concerned about. Perhaps he can 19 separate those so we know which -- 20 THE COURT: As long as we're at it 21 now, I can foresee some problem arising during the 22 trial where the State may feel that it's necessary 23 to introduce evidence or the defense may believe 24 that it's necessary to introduce some evidence that 25 Mr. Pierce or Intel believes that's somehow 44 1 confidential information, proprietary information. 2 Nevertheless, if it gets introduced as evidence in 3 this case, it's going to be public. So everyone 4 needs to keep that in mind when you are preparing 5 this case and proceeding to offering evidence. 6 Even if it's proprietary or 7 confidential information, the State proceeds to 8 prosecute this case, if I'm convinced that it's 9 necessary and required as a part of the defense in 10 the case that it be made an exhibit, it becomes 11 public, so we need to think ahead of where we're 12 going with this case because those are issues that 13 I can see coming up in the future. 14 This is a novel sort of case and 15 probably, from what I have seen here, involves 16 proprietary information, confidential information, 17 very valuable information and maybe some of it to 18 Intel, but if we proceed with this case, it's 19 possible at some point I'm going to require that if 20 it's evidence in the case, it be made public, so 21 that's going to be one of the consequences of, 22 absent somebody showing me some authority for 23 keeping evidence confidential, non-public in a 24 criminal case, I don't know of any. 25 MR. SUSSMAN: Certainly, Your Honor, 45 1 I share the court's concerns and, in fact, I would 2 not want anything I'm doing today to be construed 3 to acquiescing in a procedure where we would be 4 agreeing not to seek introduction of evidence 5 which, I believe, is essential to my client's 6 defense. 7 THE COURT: And I'm not tying you to 8 that at this point. I prefer in these sorts of 9 matters to go slowly and I'm free to review my 10 rulings and counsel are free to suggest that I 11 might later on. These are preliminary rulings in 12 nature that I'm making now and if at any time the 13 ruling becomes inappropriate, feel free to raise it 14 again and we can talk about it. The situation may 15 change. Other issues get involved. 16 Mr. Pierce, we talked only about 17 this so-called confidential information. You 18 indicated also that some of it might be subject to 19 attorney-client privilege and some of it might be 20 work product. It dawned on me here now that one of 21 the novel things we're getting into here is, we're 22 talking about, you're talking about work product 23 and if it is, its work product of a non-party in 24 this litigation. 25 Intel isn't a party and I'm 46 1 wondering, this gets into a new area for me, is 2 there some provision in the law that permits, 3 possibly there is, a witness to exempt from 4 disclosure, a non-party witness, exempt from 5 disclosure material they believe to be work 6 product? Ordinarily work product is deemed to be 7 material developed by the parties, by their 8 counsel. And, technically, Intel isn't a party in 9 a criminal prosecution. Certainly attorney-client 10 privilege is a privilege that applies to witnesses. 11 Work product ordinarily, I think, is felt to be 12 something that applies only to the parties. 13 MR. PIERCE: I think, Your Honor, 14 it's an excellent statement of the problems that 15 we're all facing, and as you've seen this morning, 16 some unique consideration in this case. 17 I do not have a precedent to cite 18 under this particular request. I certainly -- if 19 you -- I could, perhaps at a later date, try to 20 develop a precedent. I'm not sure that I would 21 find one, once again, on a preliminary motion. 22 What I'm dealing with here is a 23 report that I prepared for my client that basically 24 provided the status to my client as the victim. 25 And then I'm also alleging work product on a 47 1 private investigator's report that as victim, we 2 requested. So that's, in general, the extent of 3 what we're requesting. 4 THE COURT: Has the private 5 investigator been subpoenaed for the hearing today? 6 MR. PIERCE: I don't believe so, 7 Your Honor. 8 THE COURT: Then that probably isn't 9 going to be a problem with regard to that, at least 10 not now. 11 Mr. Pierce, is it correct then, now 12 that I've made a preliminary ruling, you, because 13 of these things that you've told me about, your 14 belief that some of it was confidential, we've 15 talked about how to resolve that, and you've also 16 raised the concern that some of the information 17 that yet might be brought in under the subpoena 18 duces tecum is confidential, attorney/client 19 matters and some of it may be what you call work 20 product, for lack of a better term, by a non-party 21 that you'd like more time to consider raising an 22 objection or moving to quash the subpoenas in whole 23 or in part because of those problems? 24 MR. PIERCE: Yes, Your Honor, that's 25 correct. 48 1 THE COURT: If that's the case, then 2 we're not -- if I permit you that opportunity, 3 we're not going to be proceeding with the testimony 4 of those witnesses today. Is there something we 5 can do today? 6 MR. SUSSMAN: Your Honor, I would 7 really -- 8 MR. TINTERA: The only witness that 9 that affects is Mr. Pierce. So I don't know if 10 that helps Mr. Sussman at all in regard to his 11 perceived needs in regard to the motion to 12 controvert. 13 THE COURT: Well, we can take -- can 14 we take everybody else's testimony and save Mr. 15 Pierce? 16 MR. PIERCE: Mr. Pierce is only 17 available today, Your Honor. 18 THE COURT: You mean he's leaving 19 the country for the rest of his life? 20 MR. TINTERA: No. He's available 21 next week. 22 THE COURT: I've known of people to 23 do that in criminal cases. 24 MR. TINTERA: I think he has a 25 present engagement for the rest of the week that 49 1 he's got a commitment to. 2 THE COURT: The rest of the week? 3 MR. PIERCE: On a business trip, 4 yes. 5 THE COURT: If we find out where 6 he's going, maybe I can go with him. 7 MR. PIERCE: I'm going to Santa 8 Clara. 9 THE COURT: Barbados? 10 MR. PIERCE: I wish. 11 THE COURT: When is the trial set? 12 MR. SUSSMAN: November 1st. 13 THE COURT: We're not going to 14 finish this today anyway. 15 MR. SUSSMAN: As I was starting to 16 think -- 17 THE COURT: That's good. 18 MR. SUSSMAN: -- it's nice that I 19 can still do it at this hour of the morning. 20 Perhaps what we can do is at least proceed with the 21 first motion, take it through the first motion to 22 suppress based on the officer's testimony. I'm 23 really concerned about getting this discovery, the 24 issues of what is going to be disclosed in response 25 to the subpoena, getting it resolved and I can see 50 1 that we can wind up arguing much of the day over 2 which portion of that would be disclosed, and 3 perhaps it would be a better use of our time and 4 the court's time if we -- to be sensitive to the 5 concerns raised by the State, if we either do it 6 orally or if the court prefers, to have it filed in 7 writing, reset of the portion of the motions that 8 will require a portion of the testimony, get the 9 issue -- simply file a motion asking for the 10 materials with one exception to be disclosed that 11 were in the subpoena duces tecum, and allow Mr. 12 Pierce time to respond. 13 THE COURT: I think that's a good 14 way to do it. 15 MR. SUSSMAN: Then we can at least 16 take care of the motion to suppress, the first 17 portion of the motion to suppress, the statements, 18 then come back and do the rest of it at a date that 19 the court sets that would be convenient to handle 20 all of these matters. 21 THE COURT: What you are suggesting 22 is that we not take Mr. Pierce's testimony today 23 but other witnesses, we could? 24 MR. SUSSMAN: To the extent that 25 we -- if Mr. Pierce has other objections that are 51 1 going to create problems for -- 2 THE COURT: There could be other 3 witnesses that come in that could be work product 4 or discussions with him as counsel that may involve 5 attorney/client privilege. Let's do what we can 6 here and then you can file under Subsection 2 of 7 the statute your motion and ask for subpoena duces 8 tecum and then, I think appropriately then, Mr. 9 Pierce, if you believe that on behalf of your 10 client that a motion to quash or some other form of 11 limiting motion is appropriate, then we could have 12 a hearing on those issues, to be framed correctly 13 then in writing. I prefer to do it that way. 14 MR. TINTERA: Your Honor, part of 15 the reason that this is not in that posture for 16 today is that these subpoenas were only served on 17 Intel seven judicial days ago and we concentrated 18 on complying with the subpoenas as opposed to legal 19 rights, but also under the statutes. Mr. Pierce 20 can respond to those subpoenas. But I believe the 21 State is -- In vision of having some input to the 22 court, I would anticipate after I review them, I 23 may or may not address them, but I think that's 24 appropriate if I choose to. 25 THE COURT: I'm not, by my comments, 52 1 intending to limit your participation in any 2 hearings or objections that might be raised. 3 Clearly Intel could and you certainly may as well. 4 And I'm not chastising anyone for not being -- for 5 lack of a better word -- prepared to do this today. 6 Some of this stuff is pretty new and even if you 7 were prepared to present it all to me today, I 8 don't know that I would be prepared to rule on it 9 because this is pretty novel stuff, I think. Let's 10 proceed with what we can. Let's take as much 11 testimony as we can. If there are witnesses that 12 need to return later on after we've argued some of 13 these matters, objections that are raised, 14 confidential information, that it's proprietary, 15 attorney-client privilege, work product, I can rule 16 on that. 17 MR. TINTERA: Well, I need some 18 clarification. It sounds to me like we're not 19 going to do the motion to controvert today until we 20 resolve the issues as to what can and cannot be 21 subpoenaed. 22 THE COURT: It will be pretty hard. 23 MR. TINTERA: The reason I ask is 24 that we do have a number of Intel employees, Mark 25 Morrissey and Mr. Pierce, here for the motion to 53 1 controvert. 2 THE COURT: Can't we do the 3 statements portion? 4 MR. TINTERA: That's what I was 5 suggesting. Do you need any of those other 6 witnesses for the statements? I only intend to 7 produce Detective Lazenby and Detective Lilley. 8 MR. SUSSMAN: The other witnesses -- 9 Mr. Pierce is here anyway. Mr. Cower can be -- We 10 could release the other witnesses. 11 THE COURT: Then we will do this. 12 We will proceed on with the issues involving the 13 admissibility of the statements allegedly made by 14 the defendant, that is that form that we commonly 15 refer to as a Miranda rights, voluntariness issues 16 and that sort of thing, circumstances under which 17 statements may have been made. Witnesses not 18 necessary to that can be excused for today subject 19 to being recalled later on. I think that pretty 20 much says it, doesn't it? 21 MR. SUSSMAN: Yes, Your Honor. 22 MR. TINTERA: Yes. 23 THE COURT: With that understanding, 24 let's proceed. Any opening comments? 25 MR. TINTERA: In regards to the 54 1 statements, the defendant was contacted at his home 2 during the execution of the search warrant. The 3 evidence produced will show that the defendant was 4 cooperative, indicated to the police that he would 5 do whatever it took to straighten this matter out 6 with them, consented to interviews. 7 After he was advised of his 8 constitutional rights per the Miranda decision, he 9 consented to interviews with the Washington County 10 Sheriff's Department and also consented to the 11 participation of some technical assistance through 12 Intel employees to help the detectives understand 13 the computer language in regard to what actually 14 involved the defendant accessing Intel's super 15 computer division in running a program to access or 16 crack passwords which would allow him to enter 17 individual files that were responsible for both the 18 architecture and management of the super computer 19 project at Intel and detectives needed some 20 assistance in knowing what questions to ask in 21 regard to that. 22 It's our position that the 23 statements were voluntary. He wasn't in custody. 24 In fact, he was told he could leave at any time, 25 that he was not in custody and that he was not 55 1 going to be arrested. 2 So it's our position that he was not 3 in custody. He cooperated with police officers and 4 any statements he made are admissible against him. 5 THE COURT: Mr. Sussman. 6 MR. SUSSMAN: Just briefly, Your 7 Honor. It's our position that as a practical 8 matter that although these interviews took place in 9 Mr. Schwartz' home, it was during the execution of 10 a search warrant and he was, in effect, in custody. 11 And the other point that I think 12 that I'd ask the court to take note of is that the 13 Intel employees who participated in the questioning 14 did so at the request of the detectives and, 15 therefore, were acting as agents of the State and 16 so any statements to those employees of Intel 17 should be considered as statements to the -- 18 THE COURT: How many different 19 statements are you aware of? You're suggesting 20 those are statements made from -- made when police 21 officers weren't even around? 22 MR. SUSSMAN: It appears, from my 23 reading of the reports, that Intel employees were 24 present with the officers through most of the 25 questioning, but I believe -- but there was also 56 1 some questioning by the Intel employees in the 2 course of this that took place without the officers 3 present. 4 THE COURT: And it's your argument 5 that even though the police officer may not have 6 been present, that somehow they are acting as 7 agents for the police officers and, therefore, 8 Miranda warnings may be appropriate and 9 constitutional guarantees may attach and that sort 10 of thing? 11 MR. SUSSMAN: Yes, Your Honor. 12 Under the circumstances of the way the statements 13 were obtained in this particular case, where those 14 Intel employees were present at the request of the 15 State to assist in the interrogation process and 16 that was a continuation of that process during the 17 execution of the search warrant. 18 THE COURT: Proceed. Call your 19 first witness. 20 MR. TINTERA: As a preamble to 21 calling any witnesses, I would like to offer 22 State's Exhibit 2, which is a copy of the affidavit 23 and search warrant. I'll let counsel look at that 24 and see if my witnesses are here. 25 THE COURT: All right. 57 1 MR. TINTERA: Call Jim Lilly. 2 3 JAMES G.W. LILLEY 4 called as a witness on behalf of the State, having 5 been first duly sworn under oath, was examined and 6 testified as follows: 7 8 THE CLERK: State your full name and 9 spell it for the record, please. 10 THE WITNESS: James G. W. Lilley. 11 L-i-l-l-e-y. 12 MR. TINTERA: Does counsel have any 13 objection to State's Exhibit No. 2? 14 MR. SUSSMAN: No. 15 THE COURT: No. 2 is received for 16 purposes of the omnibus hearing. 17 18 DIRECT EXAMINATION 19 20 BY MR. TINTERA: 21 Q Mr. Lilley, how are you employed? 22 A Detective with the Washington County 23 Sheriff's Department. 24 Q How long have you been involved in law 25 enforcement? 58 1 A Sixteen years. 2 Q On November 1st of 1993, did you have 3 occasion to have contact with a Randall Schwartz? 4 A Yes, I did. 5 THE COURT: What date was that 6 again? 7 BY MR. TINTERA: 8 Q What date did you initially have contact 9 with Randall Schwartz? 10 A I believe that was November 1st, 1993. 11 Q And what was the occasion for your 12 contact with him? 13 A That was pursuant to service of a search 14 warrant at his residence. 15 Q And in regard to the search warrant, what 16 were you going to be searching for? 17 A We were searching for -- Do you want in 18 general or specifically? 19 Q Yes, in general. 20 A We were searching for any records, 21 computer equipment or peripherals that could 22 contain information from Intel Corporation that he 23 may not have had a right to have. 24 Q In regard to -- There were three search 25 warrants authorized by Judge Freerksen; is that 59 1 correct? 2 A That's correct. 3 Q One for a vehicle, one for a business and 4 one for a residence? 5 A That's correct. 6 Q At which area did you contact 7 Mr. Schwartz? 8 A At his residence. 9 Q And can you tell me what happened 10 initially as you were at the residence? 11 A We walked up to the front door of the 12 house and knocked on the door. A gentleman came to 13 the door, opened the door for us. That was, 14 shortly afterwards, identified as Mr. Schwartz' 15 brother. 16 Q You knocked on the door. In execution of 17 a drug search warrant, the police do what is called 18 knock and announce and if there is not a rapid 19 response, they are prepared to force the door. 20 What was the posture of the police in this 21 particular execution of the search warrant? 22 A This was the complete opposite to any 23 sort of narcotics warrant. It was extremely low 24 keyed. As a matter of fact, I don't believe we 25 even had a uniformed officer with us that night. 60 1 There was myself and another police officer. We 2 knocked on the door, waited for someone to come to 3 the door, which happened very shortly after 4 knocking, and that's when we made contact with an 5 individual that we later identified as 6 Mr. Schwartz' brother. 7 Q Was there any loud announces of police, 8 search warrant, anything like that? 9 A No, there wasn't. 10 Q So it was just as if it was the postman 11 delivering a package? 12 A Very low keyed. Very low keyed. 13 Q What happened then? You knocked on the 14 door, someone you later learned as the brother of 15 Mr. Schwartz arrived and what approximated next? 16 A We explained who we were and why we were 17 there. 18 Q Specifically what did you tell him? 19 A That we were police officers with the 20 Washington County Sheriff's Office, that we had a 21 search warrant for Randall Schwartz' house and that 22 we would like to come in and explain to them what 23 the search warrant was all about, at which point, 24 he invited us in. And as we entered -- 25 THE COURT: He being the defendant's 61 1 brother? 2 THE WITNESS: The brother. As you 3 enter into the house, off to the left is a 4 staircase that leads to an upstairs and shortly 5 after entering the main entrance way there, 6 Mr. Schwartz came down from upstairs to meet with 7 us. 8 BY MR. TINTERA: 9 Q What happened then as the defendant came 10 downstairs? 11 A Once he was downstairs, I, again, 12 explained to him who we were, why we were there and 13 at that time read the warrant to him and his 14 brother and -- 15 Q At this point, was there any show of 16 force, night sticks, guns? 17 A No. 18 Q Were or were there not any uniformed 19 officers on the scene? 20 A There were no uniformed officers with us. 21 Q How were you attired? 22 A Blue jeans, blue jacket, open neck golf 23 shirt type thing. 24 Q So Mr. Schwartz comes down the stairs, 25 his brother is in this area, what happens then? 62 1 A Again, I explained to them why we're 2 here. I then read the warrant, the contents of the 3 search warrant to both of them, immediately after 4 which I read both of them their Miranda rights, 5 which I got a verbal acknowledgement of their 6 understanding. 7 Q Now, when you say Miranda rights, did you 8 advise them of their constitutional rights per the 9 Miranda decision from memory or from a card? 10 A From a card. 11 Q And could you tell the judge specifically 12 what rights you advised both Mr. Schwartz and his 13 brother of? 14 A If I can read them from the card that 15 I -- I always read them and I don't like to trust 16 my memory to something like that, so I always carry 17 a rights card with me that I read from. 18 "You have the right -- 19 THE COURT: You're reading from your 20 card now? 21 THE WITNESS: I'm reading from the 22 rights card. 23 THE COURT: Is that the same card 24 that you had on that occasion? 25 THE WITNESS: I have several of 63 1 them, but they are all identical. They all have 2 the identical wording on them. 3 THE COURT: Proceed. 4 THE WITNESS: "You have the right to 5 remain silent. Anything you say can and will be 6 used against you in a court of law. You have the 7 right to talk to a lawyer and have him or her 8 present with you while you are being questioned. 9 If you can't afford to hire a lawyer, one will be 10 appointed to represent you before any questioning, 11 if you wish." 12 BY MR. TINTERA: 13 Q Did you do anything in regard to asking 14 Mr. Schwartz if he understood these rights? 15 A Yes, I did. 16 Q And what was that? 17 A I asked both of them, "Do you understand 18 these rights as I have read them to you?" And I 19 obtained a verbal acknowledgement from both people 20 that, in fact, they did understand those rights. 21 Q Did you say anything else about the 22 situation to Mr. Schwartz at that time? 23 A At that point, I asked Mr. Schwartz if we 24 could go into another room where I could sit down 25 with him and explain to him further why we were 64 1 here, why we had obtained a warrant and what had 2 taken place that had brought us to this point, and 3 he said certainly and invited us into a back room 4 of the house where we went, which is where we went 5 to talk with him. 6 Q Now, was that at your suggestion or his? 7 A I don't recall whose suggestion it was 8 for the back room. I know that I -- what I tried 9 to get across to Mr. Schwartz is, was there 10 somewhere quiet we could sit down and talk and 11 wouldn't be bothered by other people? Whether I 12 suggested the back room or he suggested the back 13 room, I don't recall. 14 Q Did he make any statements to you about 15 his willingness to cooperate or not cooperate in 16 this investigation? 17 A Yes, he did. 18 Q What did he say? 19 A When we went back to the back room, the 20 first thing we did when we sat down, I told him 21 that he was not under arrest, that he was not going 22 to be under arrest and that, in fact, he was free 23 to leave at any time. I just wanted to explain two 24 things, explain to him why we were there and ask 25 him some questions and his response was something 65 1 to the effect, "Anything you want to know, just ask 2 me. I'll be happy to cooperate with you, happy to 3 answer any questions that you have. I've got 4 nothing to hide," words to that effect. 5 Q Now, in regard to his constitutional 6 rights per the Miranda decision, did Mr. Schwartz 7 have any questions about those rights? 8 A Not that I recall, no. 9 Q In regard to you telling him that he 10 wasn't under arrest and that he was free to leave 11 at any time, did he have any questions to you about 12 the availability of those options? 13 A No. 14 Q Then you proceeded to interview 15 Mr. Schwartz? 16 A That's correct. 17 Q Now, was there ever a time where you 18 invited anyone else into the room that was not a 19 police officer where you were talking to 20 Mr. Schwartz? 21 A Very shortly after I began talking with 22 Mr. Schwartz in the rear room, I believe Detective 23 Lazenby and one or more of Intel personnel who had 24 accompanied us came into the back room, uninvited 25 by myself or Mr. Schwartz. They came into the 66 1 room. The reason -- but they had come into the 2 room for a specific reason. 3 Q And what was that? 4 A They had found an Apple laptop computer 5 in the kitchen area that was hooked up to a phone 6 line. The Apple laptop computer was one of the 7 items listed in the search warrant authorizing 8 seizure and they wanted to confer with Mr. Schwartz 9 as to what he was doing, what the computer was 10 doing at that time and what they would need to do 11 to unhook it and seize it without damaging anything 12 that it was doing without it adversely affecting 13 its function. In other words, we don't know what 14 you're doing but we're going to need to seize it 15 pursuant to the search warrant. Is there some 16 specific way you want this disconnected? Is there 17 anything that you don't want us to do that could 18 compromise the machine or anything that was being 19 transferred to or from it? 20 Q So it sounds like you were trying to 21 preserve the integrity and the safety of the 22 information in the machine. 23 A That's correct. 24 Q What's the level of your computer 25 knowledge in regard to -- what's the level of 67 1 your -- 2 A I own a McIntosh which draws chuckles 3 from Intel people and IBM people, but very limited. 4 I know a little bit about it. I have begun to 5 learn a lot more, but I'm still very much at a 6 basic level. My understanding is very basic. 7 Q And when they mention a laptop computer 8 hooked up to a phone line, did the laptop itself 9 have any significance to you in regards to 10 Mr. Schwartz? 11 A Only from information that I had learned 12 earlier in the day during the preparation of the 13 affidavit for the search warrant. 14 Q And what information was what? 15 A That was that Mr. Schwartz had had an 16 Apple laptop that he brought from home and took 17 back home from work. 18 Q Work being? 19 A At Intel. That he used that Apple laptop 20 at Intel when he was working there, and one of the 21 concerns was that that laptop could be being used 22 to obtain information from Intel systems to be 23 taken home and worked with at home by Mr. Schwartz. 24 Q Now, do you know who the Intel personnel 25 were that accompanied Mr. Lazenby? 68 1 A Yeah, the Intel people that were with us 2 was Mr. Stites, Mr. Cower and Mr. Morrissey, I 3 believe. If I could just check my report real 4 quickly. (Pause) Mr. Pierce, I believe, was also 5 there. 6 Q Pardon me. 7 A I believe Mr. Pierce was also there. Mr. 8 Cower, Mr. Pierce, Mr. Stites and Mr. Morrissey. 9 Q Now, after they came in to talk about the 10 laptop, did any of these people stay? 11 A Yes, they did. 12 Q Who was that? 13 A That's difficult to answer because at 14 various times there was kind of a coming and going 15 of people, both police and Intel. At various 16 times, all three of them were either there together 17 or separately. If memory serves me correct, Mr. 18 Cower was with me. Let me refer to my report to 19 see if my report reflects. (pause) My report 20 doesn't help me out too much more on that other 21 than reflects that Mr. Cower, Mr. Stites and Mr. 22 Pierce at various times were with me during the 23 conversation and I couldn't tell you who at what 24 times were necessarily present. 25 Q Did you have any conversation with 69 1 Mr. Schwartz about the presence of Intel employees 2 while he was being interviewed? 3 A Yes, I did. I explained to him that 4 there were a couple reasons why we were here. 5 Primarily that I had requested them to be present 6 while I talked with him because I was not very 7 computer literate and I was going to have to rely 8 on them to help me understand the answers to my 9 questions. 10 I had the questions, but I would not 11 necessarily be able to understand the answers and 12 assess the truthfulness of those answers without 13 their assistance. 14 Q Did Mr. Schwartz indicate one way or the 15 other whether there was agreeability to him -- 16 A He had no problem with that at all. He 17 said that it was fine. Again, words to that 18 effect. He didn't acquiesce. He said something to 19 the effect that that's fine by him. 20 Q I believe you may have already answered 21 this question, but could you tell the court why 22 Intel personnel were with you at all when you 23 executed the search warrant? 24 A There were a couple different reasons. 25 The primary reasons were one, their technical 70 1 expertise to help us evaluate answers that we would 2 be given in interviews. Secondly, to assist us in 3 identifying items listed in the search warrant as 4 being Intel equipment and stuff that were, in fact, 5 what we were looking for as it related to Intel 6 itself, and also to assist us in both the 7 preservation of any evidence that we seized and the 8 assistance in disconnecting it in such a way that 9 we would not damage the evidentiary value of it and 10 also not cause any inadvertent damage to equipment 11 that was Mr. Schwartz' and we didn't want to damage 12 any equipment of his that we weren't interested in, 13 but we didn't want to be liable for because we 14 didn't know how to unhook it properly. 15 Q Were they getting paid for assisting you? 16 A I can't answer that question. Not by the 17 Police Department, no. 18 Q That's what I meant. Were they paid by 19 the police to assist you? 20 A No. 21 Q During the course of your contact and 22 interview of Mr. Schwartz, what was the atmosphere 23 like? Sounds sort of low keyed. Is that fair? 24 A Actually, it was very amiable. It was 25 very low keyed, conversational. 71 1 Non-confrontational. I had questions. Basically, 2 I wanted Mr. Schwartz' side of the story, what he 3 believed had taken place, get his account, and in 4 order to balance that against what I had learned 5 from Intel people and I made that very clear to 6 Mr. Schwartz. 7 Mr. Schwartz had no problem with 8 that, was very cooperative, very understanding of 9 what we were doing and why we were doing it. Did 10 not appear to be offended or annoyed or alarmed by 11 our presence there. Very understanding of what we 12 were doing. 13 Q Did you make any promises to Mr. Schwartz 14 to get him to talk to you? 15 A No. 16 Q Did you make any threats to him? 17 A No. 18 Q Did he appear to be aware of his 19 circumstances? Did he appear to be intoxicated or 20 somehow mentally affected so he didn't understand 21 the circumstance that he was in? 22 A No. 23 Q What was his custody status? 24 A He was not under arrest and he was not 25 going to be arrested. 72 1 Q Free to leave? 2 A He was free to leave at any time he 3 wished. 4 Q At any point during your talking with 5 Mr. Schwartz, did he say, 'Look, I just don't want 6 to talk to you any more'? 7 A No. 8 Q Did he ever try to leave and somebody 9 kept him? 10 A No. 11 Q Did he ever say he'd like to talk to an 12 attorney? 13 A No, he didn't. 14 Q Were you present during the course of his 15 interview? 16 A Yes, I was. 17 Q Full course? 18 A I believe there were one or two instances 19 where I was called away by one of the searchers to 20 answer questions about specific things they were 21 finding, at which time I would trade off with 22 Detective Lazenby or at least another police 23 officer that would take my place. In fact, I 24 believe Detective Lazenby came in on a couple 25 different occasions and asked questions of 73 1 Mr. Schwartz. 2 Q While you were present, did anybody make 3 any threats or promises to Mr. Schwartz? 4 A No. Not that I'm aware of, no. 5 MR. TINTERA: Those are the only 6 questions I have. 7 THE COURT: Do you intend to call 8 any other witnesses today? 9 MR. TINTERA: I have Paul Lazenby 10 available. He's not sitting outside. 11 THE COURT: I'm wondering about 12 timing. It's about noon. How long do you 13 anticipate cross-examination? I'm not trying to 14 hurry you. You're here for the day. 15 MR. SUSSMAN: Probably a little 16 longer than 10 minutes. 17 THE COURT: Then you're going to 18 call Lazenby? 19 MR. TINTERA: Yes. 20 THE COURT: Let's take 21 cross-examination, see how it goes about noon or 22 after, then recess and begin again maybe at 1:00 23 o'clock. 24 MR. SUSSMAN: I don't mind 25 starting -- If we could break now, I'd appreciate 74 1 it because I would like to try to reach 2 Mr. Morrissey to call him off. 3 THE COURT: Let's do that, break now 4 and start at 1:00 o'clock. 5 MR. SUSSMAN: He -- 6 MR. TINTERA: What's the court's 7 intention in regard to the motion to controvert? 8 Do we intend to do that tomorrow or at a later 9 date? 10 THE COURT: Well, I think I'm free 11 to do it tomorrow. 12 MR. TINTERA: If we're going to work 13 through the proper subpoena channels, that's going 14 to take some time. I don't want to keep people 15 hanging around for that. 16 THE COURT: Based on our prior 17 discussion, we will give Mr. Sussman time to file a 18 motion, have the court consider what might be 19 disclosed. Mr. Pierce might want to file some sort 20 of limiting motion on his part. We get that 21 resolved and that should be resolved before we do 22 the motion. 23 MR. TINTERA: That's what my thought 24 was. 25 MR. SUSSMAN: And mine. 75 1 MR. TINTERA: Sounds like me might 2 discuss the statements aspect during this omnibus 3 hearing and reconvene for Omnibus Hearing 2 at some 4 other time. 5 THE COURT: I think that's 6 appropriate. And it does -- I can't -- I won't be 7 ready to finally rule on the admissibility of 8 statements because to some degree, it could involve 9 as well the legality of the search. In other 10 words, if there was an illegal search, then the 11 statements might fail. 12 I'll take the testimony, make my 13 notes, we'll break and then we'll go through the 14 motion, any motion to quash, that sort of thing Mr. 15 Pierce may file. Then we'll go ahead and conclude 16 with the motion to suppress, motion to controvert, 17 motion to suppress then I'll hear argument and that 18 will be at a later date. 19 Mr. Pierce will be gone for a week? 20 MR. PIERCE: Your Honor, I'll be 21 available on Monday. 22 THE COURT: Let's do what we can 23 today, then recess and pick a date and time when we 24 can reconvene. 25 MR. SUSSMAN: That will be fine. 76 1 MR. TINTERA: Thank you. 2 THE COURT: Do you intend to call 3 any witnesses today? I don't intend to conclude 4 with this today so if you wanted to call them later 5 on, you could. 6 MR. SUSSMAN: If Mr. Pierce were 7 present, I'd call Mr. Pierce and -- 8 THE COURT: About things he heard -- 9 MR. SUSSMAN: Yes. 10 THE COURT: -- during the time of 11 the search? 12 MR. SUSSMAN: During the statements. 13 And I believe the officer just testified that Mr. 14 Cower was present and we should have him present. 15 Those would be the two witnesses that I would call 16 for this hearing. 17 THE COURT: Then we'll be in recess. 18 We'll begin again at 1:00 o'clock. 19 20 21 22 23 24 25 77 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25