Free Motion in Limine - District Court of Delaware - Delaware

Case 1 :04-cv-01380—Gl\/IS Document 56 Filed 08/29/2005 Page 1 gf 4
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
) Chapter 11
. )
I" ‘”°‘ ) case N0. 00-1982 (cms)
)
GST TELECOM INC" EE gb ) Jointly Administered
Debtors. )
)
)

)
GST TELECOM INC., gt gl, )
) Civil Docket N0. 04-CV—1380
Counterplaintiffs, )
)
v. )
)
JOHN WARTA, )
)
Countcrdefendant. )
GST’S MOTION IN LIMINE REGARDING NEWSPAPER OR OTHER REPORTING
OF LITIGATION BETWEEN GST AND WARTA
GST Telecom Inc. and the other debtors and debtors—in-possession in the above-
captioned cases (collectively, "GST"), by their attorneys, hereby submit this motion in limine for
an order barring claimant John Warta from presenting any evidence or argument regarding
newspaper articles, magazine articles or other reporting of litigation between GST and Warta.
Such articles and reporting are entirely irrelevant to any of Warta’s claims or to GST’s
counterclaims. Moreover allowing any such evidence into this case would be unfairly prejudicial
to GST. Accordingly, it must be barred under Rules 40l and 403, Fed. R. Evid.
Warta has three claims in this action: (1) breach of his employment contract, (2) breach
of his indemnity agreements, and (3) "Detrimental Reliance/Bad Faith." GST’s counterclaims
against Warta include breach of his employment contract, breach of fiduciary duty and fraud.
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Case 1:04-cv-01380—Gl\/IS Document 56 Filed 08/29/2005 Page 2 gf 4
Nothing that may have been said in the press about Warta or his litigation with GST has any
bearing on any of those claims.
As to the contract claims, the only issue is whether GST or Warta breached their contract.
Press reports are not probative of any contract issue. They are, to the contrary, at most
inadmissible hearsay. The same is true regarding Warta’s breach of indemnity claim and GST’s
fraud and breach of fiduciary duty claims. All of those claims will have to be proven with
admissible, non—hearsay, evidence. Press reports can be of no assistance.
Nor are press reports relevant to Warta’s claim for "Detrimental Reliance/Bad Faith."
According to Warta, GST breached its contract with Warta and then embarked on a campaign of
meritless litigation against him to avoid paying Warta what he claims to have been owed under
his contract. Warta apparently intends to offer into evidence press reports regarding that
litigation to somehow prove his contentions. How those reports are either admissible or relevant
is not clear.
First, press reports regarding the litigation between GST and Warta would be
inadmissible hearsay. Warta camiot attempt to prove anything about GST’s supposed "bad faith"
with reference to what a reporter may have said about Warta’s litigation with GST.
Second, even if such press reports were somehow found to be admissible, what possible
relevance would they have? The only potential relevance would be to Warta’s claimed damages
to his "business reputation." It is possible that Warta intends to offer press reports about the
litigation in hopes of proving that his reputation was somehow damaged.
But there is simply no connection between newspaper articles and any measure of
damages that Warta has offered in this case. As is set forth more fully in GST’s Motion ln
Limine Regarding Warta’s Purported Detrirnental Reliance/Bad Faith Damages, Waita’s
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business reputation damage claim has two components: loss of his GST stock and loss of his
PF.Net stock. As is discussed more fully in GST’s damages motion, Warta is not entitled to
either measure of damages.
Even if Warta could be entitled to one or the other of his measures of damages, the
newspaper articles that he seeks to offer into evidence would still be irrelevant and potentially
prejudicial. Warta claims to have been damaged by the loss in value of GST stock. This had
nothing to do with GST’s litigation against Warta, however, let alone any press coverage of such
litigation. Similarly, Warta claims to have been damaged by the loss in value of his PF.Net
stock, which Warta claims came about as a result of his inability to raise funds for PF.Net. As
Warta himself admitted, however, PF.Net was able to raise all the funding it ever sought: $1.2 to
$1.4 billion. Warta admitted further that there were no "signiticant dislocations in the timing of
the raising of that capital.°’ See Waita Dep. at 50:18-51 :6 (Ex. 1 hereto). Accordingly, Warta
has not identified any measure of damages to which the newspaper reports at issue could
possibly relate.
Finally, if Warta had wished to establish that GST was liable for damage to his business
reputation, he would have had to bring an action for defamation. In that case, he also would
have had to prove all the elements of a defamation claim, including, among other things, that
GST was responsible for the publication and that the publication was materially false. Warta has
not pled or attempted to prove any such claim.
Warta simply has no claim —· for liability or damages —- relating to the alleged
newspaper reporting of litigation with GST. To allow Warta nonetheless to present this evidence
would confuse the jury to the prejudice of GST.
Wilmington, Delaware
Cl·l\784597.3

Case 1:04-cv-01380—Gl\/IS Document 56 Filed 08/29/2005 Page 4 of 4
Date: August 29, 2005
Steven der (No. 3885)
Christopher A. Ward (No. 3877)
THE BAYARD FIRM
222 Delaware Avenue, Suite 900
PO. Box 25130
Wilmington, Delaware 19899
(302) 655-5000
-and-
David S. Heller
William J. Gibbons
Josef S. Athanas
Michael J. Faris
Danielle S. Kemp
LATHAM & WATKJNS LLP
Suite 5800 Sears Tower
233 South Wacker Drive
Chicago, Illinois 60606
(312) 876—7700
Attorneys for the Debtors
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