Fairbairn v. Fidelity Investments Charitable Gift Fund

Background

The U.S. District Court for the Northern District of California issued this order after a pretrial conference held on October 1 and 2, 2020. The order records rulings made at the conference and sets logistics for a bench trial involving Plaintiffs and Fidelity Investments Charitable Gift Fund. The order does not decide the underlying claims.

Rulings on Plaintiffs’ Motions in Limine

A motion in limine is a request to decide before trial whether particular evidence or arguments may be presented.

1. FMR employees’ status as agents or employees. Plaintiffs asked the court to rule that Fidelity Management & Research employees who solicited the donation, liquidated the stock, and handled the aftermath were all agents or employees of Fidelity Charitable for purposes of Federal Rule of Evidence 801(d)(2)(D), which concerns statements by an opposing party’s agent or employee. Because Fidelity Charitable had conceded that many of the individuals acted as its agents in certain contexts, the court declined to issue a blanket ruling. At trial, Fidelity Charitable must identify any particular out-of-court statement it seeks to exclude as hearsay and must notify Plaintiffs two days before the witness’s testimony.

2. Benjamin Pierce. The court allowed Fidelity’s expert, Benjamin Pierce, to testify about his own experience liquidating donor-advised-fund donations at Vanguard, what other donor-advised funds publicly say about their liquidation policies, and why Vanguard adopted its policy for liquidating donated stock. He may not testify about whether other funds’ practices are appropriate, the relationship between Fidelity Charitable and Fidelity Management & Research, or tax and legal issues. The court also stated that his testimony must remain within his disclosed expert report.

3. Price-limit promise. Plaintiffs represented that their trial theory was a single promise that Fidelity Charitable would allow the Fairbairns to advise on a price for liquidating the stock. Plaintiffs said that the reference to keeping them informed was part of that promise, not a separate promise. The court treated the motion as a non-issue and stated that no relief was needed.

Rulings on Fidelity’s Motions in Limine

1. Evidence about PNZ-share liquidation. Fidelity moved to exclude evidence and argument about liquidation of the PNZ shares. The court denied the motion. It concluded that Fidelity’s objections concerned the weight of the evidence rather than whether the evidence could be considered, and noted that the case would be tried to the court rather than a jury.

2. Financial payments. Fidelity sought to exclude evidence about payments to other Fidelity entities and compensation of individual employees. Plaintiffs agreed not to offer evidence of bonuses unless a bonus became relevant to a hearsay objection. Fidelity clarified that it did not object to evidence about contractual, operational, or financial relationships among Fidelity entities, but objected to particular dollar amounts. The court ruled that Plaintiffs could not offer or mention dollar amounts in open court unless those amounts were already publicly disclosed and available. The court stated it would decide in context whether offered evidence was relevant.

3. Professor Galle. Fidelity sought to exclude portions of Plaintiffs’ rebuttal report from Professor Galle, a tax professor at Georgetown University Law Center. The court allowed him to rebut whatever testimony was allowed from Pierce and allowed testimony about what other donor-advised funds publicly say about handling donations. It excluded his legal and tax opinions as not relevant or helpful.

4. Dr. Harris. Fidelity sought to prevent Dr. Harris from testifying about the effect of Fidelity’s trading on WATT’s share price, arguing that parts of his analysis were unreliable. The court did not preclude the testimony. It treated Fidelity’s challenges to Harris’s estimates and statistical analysis as issues affecting the weight of the evidence, which could be tested through cross-examination and contrary testimony.

5. Damages to the donor-advised fund. Fidelity moved to prevent Plaintiffs from pursuing a claim for damages to the fund. The court allowed Plaintiffs to file a supplemental brief of no more than five pages by October 9, 2020, and Fidelity to respond with a brief of no more than five pages by October 16, 2020. The court stated that it would take the matter under submission.

Trial Logistics

The court scheduled the trial to proceed by Zoom Webinar beginning October 19, 2020, and continuing on October 20, 21, 23, 26, 27, and 28 as needed. Each side was limited to 14 hours of direct and cross-examination, excluding time spent resolving certain hearsay objections. The order also established a practice session, procedures for exchanging witness and exhibit information, deadlines for objections, procedures for testimony by declaration or deposition, exhibit-management requirements, and restrictions on witnesses observing other testimony. Fidelity designated Pamela Norley as its party representative, and the order allowed her and the Fairbairns to observe any portion of the trial while restricting other witnesses from observing or discussing testimony before their own testimony.