(Bloomberg) -- Theranos Inc. founder Elizabeth Holmes may be the star of the documentary HBO is making about the unraveling of her once-superstar company, but that doesn’t mean she savors the spotlight.
Lawyers for the blood-testing startup were in court Wednesday trying to block Academy Award-winning filmmaker Alex Gibney from getting access to videotapes of depositions in two lawsuits filed against Theranos by investors who claimed it was a massive fraud. But the judge sided with Gibney and ordered the company to work with his lawyer to figure out which excerpts of recordings will be released.
U.S. Magistrate Judge Nathanael Cousins dismissed the company’s concern that release of the videos could color jurors’ views with a one-sided narrative if the case goes to trial. He noted that the fallen unicorn already has garnered plenty of media attention, including a book by a Wall Street Journal reporter and a CBS News “60 Minutes” segment.
“We already have an issue of potential jury taint,” he said.
HBO has said the film will draw on “extraordinary access to never-before-seen footage and testimony from key insiders” to “tell a Silicon Valley tale that was too good to be true.”
Holmes became a media darling -- and was touted as the world’s youngest female self-made billionaire in 2014 -- when Theranos soared in value on the promise that it could test people for hundreds of diseases using just a pinprick of blood. But the company’s $9 billion valuation evaporated when its technology was discredited and it voided thousands of lab test results. Holmes faces an ongoing criminal probe after agreeing to pay $500,000, without admitting wrongdoing, to resolve an investigation by the Securities and Exchange Commission.
Gibney, whose credits include “Enron: The Smartest Guys in the Room,” may now be able to get a hold of at least portions of video depositions of Holmes and former Theranos president Ramesh “Sunny” Balwani that were set for this month in a suit in San Jose, California.
Cousins said he wants the two sides to work out what will remain confidential and what will become public so that Holmes and Balwani know before they are questioned by a lawyer for investors.
Depositions are conducted in private and recordings and transcripts of them they usually don’t become part of the public record, at least in full, unless they are used at trial.
The judge said that in deciding to rule on the side of transparency he was also considering the interests of other people who may be considering suing Theranos. The videos could help them decide what to do, he said.
Gibney tried and failed in Delaware state court to get recordings of depositions from a suit there by investors who alleged they’d been hoodwinked into giving the company millions of dollars. The judge in the case ruled in February that he couldn’t release the videos because they had never been filed with the court and the case had settled.
But Gibney got another chance to go after the videos when the depositions became part of the pretrial evidence sharing in the California case.
The attorneys for the investors in San Jose have said they’d be happy to share the videos with Gibney but couldn’t because Theranos had designated them as confidential.
Gibney pursued the recordings in Delaware without a lawyer, arguing that the public has a right to see them. The lawyer representing him in San Jose had asked Cousins in a filing to reject the company’s blanket confidentiality designation on the grounds that Theranos was just trying to avoid embarrassment.
Jessica Lewis, a lawyer for Theranos, questioned Gibney’s motives for seeking the videos. She told the judge that Gibney has a “point of view” and would use the videos to slam the company and its principals.
“This is a case in which he has said that he believes deception occurred and he wants to explore the psychology of that deception,” she said.
Gibney will “slice and dice” the video with a desire “to make a lot of money,” Lewis said.
“The only reason to release this video now is to meet his production schedule."
The case is Colman v. Theranos Inc., 16-cv-06822, U.S. District Court, Northern California (San Jose).
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