## Facts

- The United States charged Rubin/Chambers, Dunhill Insurance Services, Inc. and individual defendants with crimes arising from an alleged conspiracy to rig bids, fix prices, and manipulate the municipal-derivatives market.
- As part of its proof, the government possessed recorded conversations among alleged conspirators and others connected to the bidding process.
- The recordings included jargon and allegedly coded language used to discuss bids and coordination without speaking openly.
- Before trial, the government moved for a ruling permitting it to call cooperating witnesses who had participated in the charged conspiracy.
- The cooperating witnesses were expected to testify about the contents of recorded conversations and to explain, from their own experience in the scheme, what particular codewords and phrases meant.
- Defendants opposed or sought limits on that testimony, arguing that having cooperators “interpret” recordings risked speculation, improper opinion testimony, and unfair prejudice, and could invade the jury’s role in deciding what the recordings meant.

## Issues

1. Whether cooperating witnesses who participated in the alleged conspiracy may testify, based on personal knowledge, about the meaning of coded or ambiguous language used in recorded conversations admitted at trial.
2. Whether such interpretive testimony is admissible as lay opinion under Federal Rule of Evidence 701 (rather than expert testimony under Rule 702), and what limits are required to ensure the testimony remains grounded in the witness’s own perceptions and does not usurp the jury’s function.

## Decision

- The court allowed the government to present cooperating witnesses to testify about recorded conversations and the meaning of codewords to the extent the testimony was based on the witnesses’ personal participation and first-hand understanding gained during the conspiracy.
- The court imposed limits: cooperating witnesses could not offer interpretations untethered to personal knowledge, could not speculate about what other speakers meant if the witness lacked an adequate foundation, and could not offer legal conclusions about the defendants’ guilt or the ultimate meaning the jury must decide.
- The court indicated that admissibility would depend on proper foundation at trial and that specific objections to particular interpretations could be addressed as the testimony developed.

## Legal Principles

- Lay opinion testimony is admissible under Federal Rule of Evidence 701 only when it is (a) rationally based on the witness’s perception, (b) helpful to understanding the witness’s testimony or determining a fact in issue, and (c) not based on scientific, technical, or other specialized knowledge that would bring Rule 702 into play.
- A cooperating participant in recorded conversations may explain the participant’s own understanding of ambiguous or coded statements when that understanding comes from first-hand involvement in the events and communications.
- Interpretations that are not grounded in what the witness personally saw, heard, or understood during the charged events risk becoming improper narration, argument, or second-hand summary, and may be excluded or limited.
- Even when otherwise admissible, interpretive testimony may be restricted under Rule 403 to reduce the risk of unfair prejudice, confusion, or testimony that effectively tells the jury what result to reach.

## Conclusion

In this pretrial evidentiary ruling in the municipal-derivatives bid-rigging prosecution, the court held that cooperating coconspirators could testify as lay witnesses about the meaning of codewords and ambiguous recorded statements when their explanations stemmed from first-hand participation, while making clear that the government must lay an adequate foundation and that the witnesses could not speculate, narrate beyond personal knowledge, or give conclusions reserved for the jury.


United States v. Rubin/Chambers, Dunhill Insurance Services, 828 F. Supp. 2d 698 (2011)