Elizabeth Holmes Prosecutor Seeks to Undo Secrecy on Mental Defense

(Bloomberg) -- A federal prosecutor urged the judge handling Elizabeth Holmes’s criminal fraud case to open up sealed court records concerning the Theranos Inc. founder’s preparation of a mental-health defense as she heads toward trial.

Assistant U.S. Attorney Kelly Volkar said Tuesday the government supports a media request to make the documents public, saying that if Holmes’s lawyers intend to present a mental defense to jurors in a few weeks, prosecutors need to be ready to respond.

“As we barrel toward trial, the government is not sure what if anything it can say,” Volkar said. “At a certain point in time it becomes not pragmatic to seal at this level.”

Volkar spoke during a hearing in San Jose, California, as U.S. District Judge Edward Davila weighed a request by Dow Jones & Co., publisher of the Wall Street Journal, to unseal prosecutors’ psychological evaluation of Holmes. Health records of defendants are often kept confidential in court proceedings.

Davila said he welcomed the opportunity “to review appropriately what should be unsealed and what should remain sealed.” The judge said he’s sympathetic to the public’s right to certain information, and that he has already, on his own, started to sort through what can be unsealed.

He ordered lawyers for Holmes and co-defendant Ramesh “Sunny” Balwani, the former president of Theranos, to do the same by the end of the week to discuss at an Aug. 16 hearing.

John Cline, a lawyer for Holmes, told the judge “a significant part” of the sealed records can be made public, “but not all by any means.” Cline asked the judge to give him until Sept. 7, a week after trial is scheduled to start, to identify what documents could be unsealed.

“It’s a lengthy and difficult process and I want to get it right,” Cline said. “ I wish I had an army behind me but I don’t.” Davila rejected the proposed date and told Cline it needs to be done more quickly.

Davila last year authorized prosecutors to commission an evaluation of Holmes after she indicated she may want a trauma expert to testify about a “mental disease or defect.” Legal experts reading between the lines said Holmes was perhaps testing a legal argument that she was traumatized from a relationship.

Dow Jones has surmised that prosecutors sought to block the defense expert from testifying at Holmes’s trial scheduled to start at the end of the month. The company argues in a court filing that while Davila has presumably made a decision whether the expert can testify, details of the tussle as well as his ruling remain improperly shielded from the public, in violation of free-speech rights.

“Those judicial documents are subject to the First Amendment right of presumed public access,” Steven D. Zansberg, a lawyer for Dow Jones, said in the filing.

Read More: Holmes’s Silence on Mental Defense Spurs Prosecutors’ Questions

The company goes further in its demand, arguing that documents in the case that describe the psychological condition Holmes raised as a defense to the fraud charges against her should also be unsealed.

There are no grounds to “keep under seal, as supposedly ‘privileged,’ any portion of those documents that describe or discuss the defendant’s claimed mental or psychological condition,” according to the filing.

John Carreyrou, a Wall Street Journal reporter, broke a series of stories about Theranos that provoked regulatory and media scrutiny that eventually led the company’s unraveling.

Holmes and Balwani face charges they lied to doctors, patients and investors about the accuracy and capabilities of Theranos blood-testing machines. Both have pleaded not guilty.

The case is U.S. v. Holmes, 18-cr-00258, U.S. District Court, Northern District of California (San Jose).

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