Case3:06-cr-00556-CRB Document996 Filed02/02/10 Page1 of 10

1 COOLEY GODWARD KRONISH LLP

STEPHEN C. NEAL (170085)
2 (nealsc@cooley.com)
SCOTT D. DEVEREAUX (146050)
3 (devereauxsd@cooley.com)
NEAL J. STEPHENS (152071)
4
(nstephens@cooley.com)
5 KATHLEEN GOODHART (165659)
(kgoodhart@cooley.com)
6 Five Palo Alto Square
3000 El Camino Real
7 Palo Alto, CA 94306-2155
Telephone: (650) 843-5000
8 Facsimile: (650) 857-0663
9 Attorneys for Defendant
GREGORY L. REYES
10
UNITED STATES DISTRICT COURT
11
NORTHERN DISTRICT OF CALIFORNIA
12
SAN FRANCISCO DIVISION
13

14
UNITED STATES OF AMERICA, Case No. CR06-00556 CRB
15
Plaintiff, GREGORY L. REYES’S NOTICE OF
16 MOTION AND MOTION IN LIMINE NO. 5
v. TO PRECLUDE ADMISSION OF EVIDENCE
17 DISCLOSED BY PLAINTIFF UNDER FED. R.
GREGORY L. REYES, EVID. 404(b)
18
Defendant.
19 Date: February 16, 2010
Time: 9:00 a.m.
20 Dept.: Courtroom 8, 19th Floor
Judge: Hon. Charles R. Breyer
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COOLEY GODWARD
KRONISH LLP DEF.’S MOTION IN LIMINE NO. 5
ATTORNEYS AT LAW
PALO ALTO
CASE NO. CR06-00556 CRB
 Case3:06-cr-00556-CRB Document996 Filed02/02/10 Page2 of 10

1 NOTICE OF MOTION AND MOTION

2 PLEASE TAKE NOTICE THAT on February 16, 2010, at 9:00 a.m., or as soon thereafter
3 as the matter may be heard, in the courtroom of the Honorable Charles R. Breyer, located at 450
4 Golden Gate Ave., San Francisco, California 94102, Defendant Gregory L. Reyes will, and
5 hereby does, respectfully move this Court for an order pursuant to Federal Rule of Evidence 403
6 precluding the government from discussing, eliciting testimony, or admitting any evidence
7 relating to the following evidence disclosed by the government pursuant to Rule 404(b):
8 (1) public statements by Mr. Reyes’s trial counsel on or about August 2 and August 31, 2006;
9 (2) public statements by Mr. Reyes on or about January 24, 2005; and (3) the Answer of
10 Defendant Gregory L. Reyes to Plaintiff’s Complaint in SEC v. Reyes, et al., No. C06-04435
11 (CRB), filed on or about August 14, 2006.
12 Mr. Reyes’s motion is based on this notice, the attached memorandum of points and
13 authorities, the Declaration of Neal J. Stephens and attached exhibits, the pleadings and papers
14 previously filed, the evidence presented thus far in this case, the arguments of counsel, and such
15 other matters as the Court may deem proper to consider.
16 Dated: February 2, 2010 COOLEY GODWARD KRONISH LLP
17

18 By /s
NEAL J. STEPHENS
19

20 Attorneys for Defendant

GREGORY L. REYES
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COOLEY GODWARD
KRONISH LLP DEF.’S MOTION IN LIMINE NO. 5
ATTORNEYS AT LAW
2. CASE NO. CR06-00556 CRB
PALO ALTO
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1 MEMORANDUM OF POINTS AND AUTHORITIES

2 I. INTRODUCTION
3 On January 26, 2010, the government notified the defense that it intends to introduce the
4 following categories of evidence, among others, under Federal Rule of Evidence (“Rule”) 404(b):
5 (1) public statements by Mr. Reyes on or about January 24, 2005;
6 (2) public statements by Mr. Reyes’s trial counsel on or about August 2 and
7 August 31, 2006; and
8 (3) the Answer of Defendant Gregory L. Reyes to Plaintiff’s Complaint in SEC
9 v. Reyes, et al., No. C06-04435 (CRB), filed on or about August 14, 2006.
10 (See Declaration of Neal J. Stephens (“Stephens Decl.”), ¶ 1& Ex. A at 4.)1
11 The defense objects and seeks an order excluding the government from introducing
12 evidence of statements by Mr. Reyes and his trial counsel. Any probative value this evidence
13 may have is substantially outweighed by the unfair prejudice and jury confusion its admission
14 would cause. Equally great is the risk of distraction and waste of time caused by the need for
15 extrinsic evidence relating to the context, surrounding circumstances, and interpretation of the
16 statements by Mr. Reyes and his trial counsel. Unless Mr. Reyes takes the stand, such evidence,
17 as well as any reference to it in argument or witness examinations, should be excluded as
18 irrelevant and unfairly prejudicial under Rules 402 and 403. Moreover, there is no basis for
19 admission of such evidence under Rule 404(b), as it does not constitute “proof of motive,
20 opportunity, intent, preparation, plan, knowledge, identity, or absence of mistake or accident.”
21 FED. R. EVID. 404(b).
22

23

24 1
The government’s January 26 letter also disclosed its intent to offer the following additional categories
25 of evidence under Rule 404(b): (1) evidence of certain of Mr. Reyes’s stock-option grants received while
employed with Brocade; (2) evidence of certain of Mr. Reyes’s stock sales between 1999 and 2002; and
26 (3) the Declaration of Gregory Reyes in Support of Defendant Stephanie Jensen’s Motion for Severance
filed on or about March 9, 2007. (Stephens Decl., Ex. A at 4.) The defense has filed separate motions in
27 limine seeking exclusion of these categories of evidence. (See Def.’s Motion in Limine No. 1 to Preclude
Admission of Docket No. 763-1; Def.’s Motion in Limine No. 8 to Preclude Admission of Evidence
28 Relating to His Wealth and Income.)
COOLEY GODWARD
KRONISH LLP DEF.’S MOTION IN LIMINE NO. 5
ATTORNEYS AT LAW 1. CASE NO. CR06-00556 CRB
PALO ALTO
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1 II. ARGUMENT
2 A. Evidence Offered Under Rule 404(b) Must Meet the Requirements of
Rules 402 and 403.
3
Evidence that fails to satisfy the requirements of Rules 402 and 403 of the Federal Rules
4
of Evidence is inadmissible, and Rule 404(b) does not provide an alternative basis for admission.
5
Evidence offered under Rule 404(b) as “proof of motive, opportunity, intent, preparation, plan,
6
knowledge, identity, or absence of mistake or accident” must nonetheless be excluded if its
7
probative value is substantially outweighed by undue prejudice, confusion, or waste of time. See
8
FED. R. EVID. 404(b) advisory committee’s note (trial court may exclude 404(b) evidence “on the
9
basis of those considerations set forth in Rule 403, i.e., prejudice, confusion or waste of time”).
10
The Ninth Circuit requires that evidence offered under Rule 404(b) meet the requirements of
11
Rule 403:
12
This circuit has specifically incorporated Rule 403’s probative value/unfair
13
prejudice balancing requirement into the Rule 404(b) inquiry. . . . The Supreme
14 Court, moreover, has emphasized the importance of a Rule 403 analysis in Rule
404(b) cases. . . . Thus while the trial court was not required to provide a detailed
15 or even a mechanical recitation of the Rule 403 factors . . . it was required to
apply Rule 403 at this stage.
16

17 United States v. Mayans, 17 F.3d 1174, 1183 (9th Cir. 1994) (collecting cases) (citations

18 omitted).

19 As discussed below, the probative value of the evidence relating to statements by Mr.

20 Reyes and his trial counsel offered by the government in its Rule 404(b) disclosure is

21 substantially outweighed by the resulting undue prejudice, confusion, and waste of time its

22 admission would cause, the Court should not permit its admission under Rule 404(b)

23 1. Evidence Relating to Statements by Mr. Reyes’s Trial Counsel

Is Unduly Prejudicial and Would Likely Mislead and Confuse
24 the Jury and Unfairly Prejudice Mr. Reyes.
25 Based on its January 26 disclosure letter, the government intends to use statements

26 attributed to Richard Marmaro of Skadden, Arps, Slate, Meagher & Flom LLP, on or about

27 August 2 and 31, 2006. (See Stephens Decl., ¶¶ 2, 5 & Exs. B & C.) Mr. Reyes did not make the

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COOLEY GODWARD
KRONISH LLP DEF.’S MOTION IN LIMINE NO. 5
ATTORNEYS AT LAW
2. CASE NO. CR06-00556 CRB
PALO ALTO
 Case3:06-cr-00556-CRB Document996 Filed02/02/10 Page5 of 10

1 statements at issue. They are attributed to Mr. Marmaro, lead counsel for the defense in the first
2 trial.
3 The statements include, among others:
4  “‘Mr. Reyes did not backdate options. He granted options appropriately, and
5 had the authority to do so.’” (Stephens Decl., Ex. B at 1.)
 “‘Mr. Reyes did not backdate options, nor despite media reports to the
6 contrary, did I ever say he backdated options’ . . . .” (Id., Ex. C at 1.)
7  “‘After our appearance in court yesterday, to plead not guilty to all charges,
some media outlets reported that Mr. Reyes and I in the past acknowledged
8 that he participated in backdating. That is incorrect. We never said or implied
9 that, because it did not happen.’” (Id.)
 “‘. . . . I never said . . . that backdating occurred on Mr. Reyes’s watch.’” (Id.)
10
 “‘. . . . Mr. Reyes awarded options appropriately at all times. He had the
11 proper board authority to grant options, and he did so legally and
responsibly.’” (Id.)
12

13 As an initial matter, the relevance of these statements is questionable, at best,

14 given that Mr. Reyes did not make them. In addition, unless Mr. Reyes takes the stand,

15 the government would be attempting to introduce statements by Mr. Marmaro to

16 “impeach” the government’s view of the defense’s theory of the case: i.e., that Mr. Reyes

17 knew Brocade retroactively priced options, but did not attempt to conceal that fact and

18 relied on the company’s Finance and Legal Departments, Audit Committee, and outside

19 auditors and counsel to account properly for option grants. Statements by Mr. Marmaro

20 to the media, outside the courtroom context and long before trial, simply do not relate to

21 the elements of the government’s case. Mr. Marmaro did not make these statements to

22 the court, was not under oath, and the statements reflect nothing more than counsel’s

23 attempt to minimize negative publicity surrounding the investigation into, and indictment

24 of, his client. In addition, the statements happened at the very outset of the criminal

25 proceeding, long before the government had provided any discovery. Nonetheless, the

26 government has informed the defense that it intends to reference these statements, among

27 other evidence disclosed in its January 26 letter, during opening statements. (See

28 Stephens Decl., ¶ 2, & Ex. D.)

COOLEY GODWARD
KRONISH LLP DEF.’S MOTION IN LIMINE NO. 5
ATTORNEYS AT LAW
3. CASE NO. CR06-00556 CRB
PALO ALTO
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1 Moreover, introducing this evidence converts the trial into a sideshow. Instead of
2 focusing on events that occurred during the alleged conspiracy, the government instead
3 shines the spotlight on statements attributed to Mr. Marmaro years later. The
4 government’s attempts to reference or introduce Mr. Marmaro’s statements without any
5 surrounding context would result in undue prejudice, jury confusion, and waste of time:
6 dedicating court time to conflicting interpretations of statements made by counsel for
7 public-relations purposes can only distract the jury’s attention from the government’s
8 burden to prove up the elements of the charges. See United States v. Wecht, No. 06-0026,
9 2007 WL 2702350, at *20 (W.D. Pa. Sept. 13, 2007) (“Pretrial publicity does not become
10 evidence in a court of law simply because it has been published . . . . Introduction of these
11 items would increase the chances that these legal proceedings could become a media side
12 show and that the jury pool could be corrupted.”). Even more so, the questions
13 surrounding Mr. Marmaro’s state of mind and purpose for making these statements, as
14 well as the legal and public-relations strategies involved in issuing the statements, would
15 devolve into a trial within a trial. See Petrocelli v. Gallison, 679 F.2d 286, 290 (1st Cir.
16 1982) (affirming exclusion of document absent “conclusive contextual corroboration or
17 qualifying testimony” from document’s author); see also id. at 292 n.6 (noting that it
18 would violate Rules 102 and 104 to admit evidence in manner that “invite[s] the jury to
19 speculate on the weight to be given to crucial statements, without any evidentiary basis
20 whatever to guide them.” (emphasis added)).2
21 Finally, the government was given the opportunity to supersede the indictment,
22 but has not done so; Mr. Reyes is not charged with perjury. The evidence in this case
23 must therefore be limited to facts bearing on the elements of the charges remaining in the
24 indictment. See United States v. Hodges, 770 F.2d 1475, 1479 (9th Cir. 1985) (“Under
25 our system, an individual may be convicted only for the offense of which he is charged
26
2
For the same reasons discussed in Mr. Reyes’s separately filed Motion in Limine No. 1 to Preclude
27 Admission of Docket No. 763-1, the admission of trial counsel’s statements would also effectively compel
Mr. Reyes to elect between (a) allowing the evidence to come in unrebutted as to context and purpose, and
28 (b) risking waiver of the attorney-client privilege by calling Mr. Marmaro to testify.
COOLEY GODWARD
KRONISH LLP DEF.’S MOTION IN LIMINE NO. 5
ATTORNEYS AT LAW
4. CASE NO. CR06-00556 CRB
PALO ALTO
 Case3:06-cr-00556-CRB Document996 Filed02/02/10 Page7 of 10

1 and not for other unrelated criminal acts which he may have committed.”). Because the
2 statements attributed to Mr. Reyes’s trial counsel post-dates the conspiracy period by
3 nearly two years, its probative value is minimal at best and the risk that the jury will view
4 these statements as evidence of an uncharged crime is too great. Thus, because
5 admission of Mr. Reyes’s declaration exposes Mr. Reyes to the impermissible risk the
6 jury may convict him of the uncharged crime of perjury, it must be excluded. See United
7 States v. Gonzalez-Flores, 418 F.3d 1093, 1098 (9th Cir. 2005) (defining “unfair
8 prejudice’” as “the capacity of some concededly relevant evidence to lure the factfinder
9 into declaring guilt on a ground different from proof specific to the offense charged.”)
10 (citation omitted).
11 Because the statements attributed to Mr. Marmaro are irrelevant for any purpose
12 except possibly to impeach Mr. Reyes’s own testimony, and because the admission of
13 these statements in any other context would create undue prejudice and jury confusion,
14 the Court should preclude the government from referencing the statements in opening and
15 witness examinations.
16 2. Any Probative Value of Evidence Relating to Mr. Reyes’s
Public Statements Is Substantially Outweighed by Undue
17
Prejudice, Jury Confusion, and Waste of Time.
18 Also among the evidence that the government intends to introduce are statements by Mr.
19 Reyes during an analyst call on January 24, 2005, as reflected in a transcript of the call. (See
20 Stephens Decl., ¶ 2 & Ex. E.) Effective as of the date of this call, Mr. Reyes had transitioned
21 from CEO of Brocade (succeeded by Michael Klayko) to a position as an employee-advisor to the
22 board and company; this transition occurred as a result of the Audit Committee, assisted by
23 outside counsel at Morrison & Foerster and auditors from PricewaterhouseCoopers, completing
24 its investigation into Brocade’s historical stock-option pricing practices. (See id.) In this context,
25 the transcript attributes to Mr. Reyes the following statements, among others:
26
 “. . . quite frankly this is the right time to hand over the baton . . . .”
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COOLEY GODWARD
KRONISH LLP DEF.’S MOTION IN LIMINE NO. 5
ATTORNEYS AT LAW
5. CASE NO. CR06-00556 CRB
PALO ALTO
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1  “. . . . I am totally supportive of what the audit committee has concluded, I’m

totally supportive of the board and Mike [Klayko] and quite frankly I’m
2 looking forward to moving into my new role.”
3  “Well, so you know, I am looking forward to my new role. . . .”
4  “Well, first of all, the board felt that this was somewhat of a natural transition
from the role that I had been playing on the board . . . .”
5
 “. . . . this is consistent with the ongoing discussions that other board members
6 told me we’ve had, relative to succession.”

7  “. . . . The advisors that the audit committee brought to bear were some
preeminent advisors and they brought them on very early in the process. . . .”
8
 “Morrison and Forster [sic] is who [the audit committee] used from a legal
9 standpoint and they also brought in PricewaterhouseCoopers to assist them,
from an accounting standpoint. So, strong advisors helping the audit
10 committee through a very difficult process.”
11 (Id., Ex. B at 1067-007, 010, 011.)
12 The government has not yet disclosed the purposes for which it would seek to admit these
13 statements, and the relevance and probity of Mr. Reyes’s statements is difficult to ascertain—
14 particularly unless and until he takes the stand to testify in his own defense. Mr. Reyes is no
15 longer employed by Brocade, is not accused of misrepresenting any fact relating to the
16 investigation in his public statements, and—most importantly—is not charged with perjury.
17 Even if Mr. Reyes does not testify, the defense anticipates that the government will
18 nonetheless reference and attempt to introduce Mr. Reyes’s statements as indicative of his
19 approval of the Audit Committee’s investigation, including Morrison & Foerster’s witness
20 interviews. But unless Mr. Reyes himself takes the stand and testifies in a manner inconsistent
21 with these statements, the government cannot establish relevance nor show that any probative
22 value of these statements would outweigh the potential for undue prejudice, jury confusion and
23 waste of time.
24 In short, unless and until Mr. Reyes testifies, and does so in a manner inconsistent with the
25 statements identified in the government’s Rule 404(b) disclosures, the Court should exclude any
26 reference to such evidence during openings and witness examinations. See FED. R. EVID. 611(a)
27 (“The court shall exercise reasonable control over the mode and order of interrogating witnesses
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COOLEY GODWARD
KRONISH LLP DEF.’S MOTION IN LIMINE NO. 5
ATTORNEYS AT LAW
6. CASE NO. CR06-00556 CRB
PALO ALTO
 Case3:06-cr-00556-CRB Document996 Filed02/02/10 Page9 of 10

1 and presenting evidence so as to (1) make the interrogation and presentation effective for the
2 ascertainment of the truth, [and] (2) avoid needless consumption of time . . . .”).
3 3. Burdening the Jury with Interpreting the Statements in Mr.
Reyes’s Answer to the SEC Complaint Would Result in Undue
4
Prejudice and Substantial Waste of Time.
5 The third category of evidence disclosed by the government, Mr. Reyes’s Answer in the
6 SEC case is equally irrelevant and just as likely to lead to jury confusion and waste of time. As
7 with the previous two categories, referencing or introducing Mr. Reyes’s Answer in the SEC case
8 in the absence of explanatory testimony by Mr. Reyes or his attorney would result in a distracting
9 mini-trial regarding the procedural circumstances and proper interpretation of the document. In
10 fact, Mr. Reyes’s answer would add an additional layer of complexity by requiring a paragraph-
11 by-paragraph comparison to the SEC’s complaint; by definition, under the Federal Rules of Civil
12 Procedure, an answer is a responsive pleading response to affirmative claims made by the
13 opposing party. Indeed, Mr. Reyes’s Answer asserts no affirmative counterclaims and its
14 responsive paragraphs can only be interpreted in light of the partial-denials, denials based on lack
15 of sufficient knowledge and information, and the 15 affirmative defenses raised at the end of the
16 Answer. (See Stephens Decl., ¶¶ 7–8 & Ex. F–G.)
17 Unless and until Mr. Reyes testifies, any probative value of the Answer is far outweighed
18 by the risk of jury confusion, waste of time, and resulting undue prejudice. See, e.g., E. Natural
19 Gas Corp. v. Aluminum Co. of Am., 126 F.3d 996, 1001–02 (7th Cir. 1997) (“[I]n this complex
20 jury trial, the court decided on balance that the pleadings posed a serious risk of confusing the
21 jury, and that this risk outweighed the probative value of the pleadings.”); Wolde-Giorgis v.
22 Christiansen, 438 F. Supp. 2d 1076, 1079 (D. Ariz. 2006) (“Plaintiff sought to admit his
23 Complaint and Amended Complaint and these documents were excluded on the basis of a Federal
24 Rule of Evidence 403 analysis because of the Court’s fear that they contained superfluous and
25 confusing information (including the inclusion of claims and parties which had been dismissed).
26 Thus the risk of prejudice outweighed their probative value.”).
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COOLEY GODWARD
KRONISH LLP DEF.’S MOTION IN LIMINE NO. 5
ATTORNEYS AT LAW
7. CASE NO. CR06-00556 CRB
PALO ALTO
 Case3:06-cr-00556-CRB Document996 Filed02/02/10 Page10 of 10

1 As discussed above, all of the evidence relating to statements attributed to Mr. Reyes and
2 his trial counsel are inadmissible under Rules 402 and 403 because the probative value of such
3 evidence is substantially outweighed by the undue prejudice, jury confusion, and waste of time
4 that would result from the admission of such evidence. The government cannot make an end-run
5 around Rules 402 and 403 by offering such evidence under Rule 404(b). See Mayans, 17 F.3d
6 at 1183.
7 III. CONCLUSION
8 For the reasons set forth above, Mr. Reyes respectfully requests the Court grant his motion
9 and preclude the admission of evidence relating to statements attributed to Mr. Reyes and his trial
10 counsel, as well as any references to such evidence by the government in argument or witness
11 examinations.
12 Dated: February 2, 2010 COOLEY GODWARD KRONISH LLP
13

14 By /s
NEAL J. STEPHENS
15

16 Attorneys for Defendant

GREGORY L. REYES
17
829093/HN
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COOLEY GODWARD
KRONISH LLP DEF.’S MOTION IN LIMINE NO. 5
ATTORNEYS AT LAW
8. CASE NO. CR06-00556 CRB
PALO ALTO