Eastern Profit Corporation Limited v. Strategic Vision US LLC

Background

A bench trial was scheduled for January 19, 2021. Before trial, Eastern Profit and Strategic Vision each filed a motion in limine, meaning a request to decide in advance whether particular evidence could be presented at trial. The court ruled on the challenged evidence without deciding the underlying breach-of-contract claim or Strategic Vision’s fraudulent-misrepresentation counterclaim.

Eastern Profit’s motion

Statements about Allied Security Operations Group. Eastern Profit sought to exclude testimony from Strategic Vision’s chief executive officer, French Wallop, and representative J. Michael Waller about statements allegedly made by Strategic Vision’s independent contractor, Allied Security Operations Group. Strategic Vision said the testimony was offered to show the statements’ effect on Strategic Vision and ASOG’s state of mind, and to support an impossibility defense, rather than to prove that the investigated subjects actually had “records-protected” status. The court held that the statements could not be admitted for their truth because they would be hearsay. It granted the motion to that extent, but did not decide whether the statements could be admitted for another purpose or whether they were relevant if offered only to show state of mind.

Newspaper and online articles. Eastern Profit moved to exclude articles that Strategic Vision offered to support its allegations about Wengui Guo’s relationship with the Chinese Communist Party and other matters. The court granted the motion. It held that the articles were not suitable for judicial notice because the reported matters were disputed and were not generally known or readily verifiable from sources whose accuracy could not reasonably be questioned. The court also rejected admission under Federal Rule of Evidence 807, the residual hearsay exception, because the articles lacked sufficient demonstrated reliability and Strategic Vision had not shown why the information could not be presented through other evidence, such as testimony from Guo or expert witnesses. The court stated that the articles could not be used to prove the truth of their contents. It also excluded an identical article to the extent Eastern Profit sought to use it for that purpose.

William Je’s LinkedIn profile. The court excluded the profile to prove that Je was actually a member of the Chinese People’s Political Consultative Conference or the Hong Kong Chongqing Friendship Federation. Strategic Vision did not identify a hearsay exception for that use. The court also found that Strategic Vision had not shown how the profile was relevant to proving that Guo actually had a relationship with the Chinese Communist Party, although it could potentially relate to Eastern Profit’s claims or to whether Strategic Vision should have investigated that relationship.

Sasha Gong’s testimony. Eastern Profit sought to exclude testimony from Sasha Gong about whether Guo’s conduct was consistent with that of a Chinese dissident. The court denied this part of the motion without prejudice to renewal at trial. It explained that some testimony could be based on Gong’s firsthand experience as lay testimony, while other portions could be improper expert opinion or hearsay. If Gong was unavailable and Strategic Vision offered deposition testimony, Eastern Profit could make objections question by question, and the court would rule then.

Financial identity and ACA evidence. Eastern Profit sought to exclude evidence about its independent financial substance and Golden Springs New York’s business dealings with ACA, relying on earlier discovery rulings by Magistrate Judge Freeman. The court concluded that the evidence was relevant because Eastern Profit sought damages and rescission, while Strategic Vision argued that Eastern Profit did not pay the $1 million deposit and therefore was not the party entitled to restitution. The court explained that Judge Freeman’s earlier discovery rulings did not decide whether the evidence would be admissible at trial. The court therefore allowed the evidence to be presented.

Strategic Vision’s motion

Strategic Vision moved to exclude questions and testimony about the sources of either side’s litigation funding. Eastern Profit responded that it believed a Chinese Communist Party supporter or affiliate had paid Strategic Vision’s legal fees, which Eastern Profit said could undermine Strategic Vision’s claim that it was defrauded and would not have entered the Research Agreement if it had known Guo’s alleged views.

The court denied Strategic Vision’s motion, but made admission conditional. Before the evidence could be admitted, Eastern Profit had to show a good-faith belief that Strategic Vision was funded by a person or entity known generally or to Strategic Vision as a current or former member of, or associated or affiliated with, the Chinese Communist Party. The court reasoned that such funding could bear on whether Strategic Vision relied on statements about Guo’s opposition to the party or considered those statements important when entering the agreement. The court also rejected Strategic Vision’s attorney-client privilege, work-product, and First Amendment objections to identifying a litigation funder.

Disposition

The court ruled that Eastern Profit’s motion in limine was granted in part and denied in part. Its motion for leave to file a surreply was granted. Strategic Vision’s motion in limine was denied, subject to Eastern Profit’s required good-faith showing.