AFL Telecommunications LLC v. SurplusEQ.com Incorporated et al

Filing 248

ORDER denying 215 Motion in Limine; denying 216 Motion in Limine; denying 217 Motion in Limine; denying 218 Motion in Limine; denying 219 Motion in Limine; granting 220 Motion in Limine; denying 221 Motion in Limine; denying [222 ] Motion in Limine; granting 223 Motion in Limine; denying 224 Motion in Limine; granting in part and denying in part 225 Motion in Limine; denying 226 Motion in Limine; denying 227 Motion in Limine; denying 228 Motion in Limine; g ranting in part and denying in part 229 Motion in Limine; denying 230 Motion in Limine. Trial shall begin on 12/2/2013 at 9:00 a.m.; final conference set for 11/26/2013 at 4:30 PM. The parties shall hold a settlement conference by 9/30/2013.. Signed by Judge David G Campbell on 7/25/2013.(DGC, nvo)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF ARIZONA

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AFL Telecommunications LLC,
Plaintiff,

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No. CV11-1086 PHX-DGC
ORDER SETTING TRIAL

vs.
SurplusEQ.com Incorporated, et al.,
Defendants.

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A Final Pretrial Conference was held on July 24, 2013. Counsel appeared on

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behalf of Plaintiff and Defendant. On the basis of the parties’ written submissions and

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the hearing,

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IT IS HEREBY ORDERED:

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1.

Trial in this matter shall begin on December 2, 2013, at 9:00 a.m.

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2.

The trial shall last 5 days (December 2-6, 2013). Plaintiff shall be allotted

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12 hours of trial time and Defendants shall be allotted 10 hours of trial time. The Court

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will keep track of each side’s time. Opening and closing statements, direct examination,

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and cross-examination shall be counted against the parties’ allotted time.

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3.

A final conference shall be held on November 26, 2013, at 4:30 p.m., in

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Courtroom 603, Sandra Day O’Connor Federal Courthouse, 401 West Washington Street,

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Phoenix, Arizona 85003. Out-of-state counsel may participate by telephone.

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4.

The parties’ proposed final pretrial order was approved by the Court as the

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final pretrial order in this case. The order shall govern the presentation of evidence and

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other trial issues, and, pursuant to Rule 16(e) of the Federal Rules of Civil Procedure,

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shall be modified only to prevent manifest injustice.

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arguments, and relief not requested or identified in the order shall not be available at trial,

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except to prevent manifest injustice.

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Evidence, objections, legal

The Court addressed Plaintiff’s motion in limine to exclude evidence of

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costs. Doc. 225. The motion was granted in part and denied in part. The Court held

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that Defendants may present evidence regarding the actual costs they incurred for

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purchasing the Fujikara splicers and evidence to support their claim that 40% of their

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annual overhead is attributable to fusion splicers. Because they did not disclose other

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costs in response to Plaintiff’s interrogatories on this subject, they may not present

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evidence of such other costs.
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The Court addressed Plaintiff’s motion in limine to exclude previously

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undisclosed opinion testimony. Doc. 226. The motion did not identify specific expert

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testimony to be excluded, and therefore was denied. The Court will, however, hold all

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parties to their Rule 26(a) expert disclosures. Expert opinions not timely disclosed under

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Rule 26(a)(2)(B) or (C) and the Court’s Case Management Order will not be permitted

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during trial.

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7.

The Court addressed Plaintiff’s motion in limine to exclude references to

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Plaintiff’s financial status and foreign ownership. Doc. 228. The motion asks the Court

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to preclude Defendants from mentioning AFL’s wealth or foreign ownership in a

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derogatory or prejudicial manner. The motion did not identify specific evidence to be

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excluded, and therefore was denied. The Court will, however, prevent all parties from

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presenting derogatory or prejudicial arguments or evidence during trial. Parties may

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object if they believe such evidence or arguments are being presented.

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The Court addressed Plaintiff’s motion in limine to exclude previously

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undisclosed documents or fact testimony. Doc. 230. The motion did not identify specific

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documents or testimony to be excluded, and therefore was denied. The Court will,

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however, preclude all parties from presenting documents or testimony that should have

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been disclosed during discovery under the Federal Rules.
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The Court addressed Defendants’ motion in limine to exclude all evidence

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relating to Entergy splicer date of sale. Doc. 215. The motion was denied. Defendants

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argue that the sale occurred before Plaintiff obtained exclusive agreements with Fujikara,

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and that the sale therefore cannot be presented in support of their copyright or trademark

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claims. The Court has already granted summary judgment on the copyright claim (Doc.

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200), so that argument was denied as moot. The Court previously ruled that Plaintiff has

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standing to make a Lanham Act claim for sales after 2003. Doc. 200 at 16-17. As a

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result, the Court denied Defendants’ request to preclude the 2006 sale. The sale is clearly

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relevant to the Lanham Act claim, and its probative value is not substantially outweighed

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by the risk of unfair prejudice.

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10.

The Court addressed Defendants’ motion in limine to exclude evidence of

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Entergy splicer due to lack of evidence regarding country of origin. Doc. 216. The

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motion was denied. The motion argues that Plaintiff’s evidence regarding the country of

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origin is inadmissible hearsay. The Court concluded that the declaration of the records

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custodian attached as Exhibit A to Plaintiff’s response (Doc. 236-1) satisfies the

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authentication requirements of Rule of Evidence 902(12) and the additional requirements

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of Rule 803(6)(A)-(E), and that the records attached to the declaration are therefore

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admissible under Rule 803(6) as records of a regularly conducted activity.

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The Court addressed Defendants’ motion in limine to exclude the Entergy

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report as hearsay.

Doc. 217.

The Court denied the motion, with the following

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observations. Whether the report qualifies as a business record under Rule 803(6) must

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be determined after testimony about the elements of Rule 803(6) has been presented at

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trial. The Court cannot conclude at this stage that those elements cannot be satisfied.

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The fact that a report is prepared infrequently does not mean that it is not a business

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record, provided the elements of Rule 803(6) are satisfied. The statements in the report

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attributable to Fujikara constitute hearsay within hearsay and must have their own basis

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for admissibility under the hearsay rules. The Court does not agree with Plaintiff’s

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argument that they too fall within 803(6) because the information contained in the

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statements is kept in the ordinary course of Fujikara’s business. Rule 803(6) concerns

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records, not information, and Plaintiff does not contend that the report is a Fujikara

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business record. The Court does not view the contents of the report as expert opinion

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under Rule 702.

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The Court addressed Defendants’ motion in limine to exclude all references

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to other gray market sellers. Doc. 218. The Court denied the motion. The Court cannot

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conclude at this stage of the case that all references to other gray market sellers would be

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irrelevant or prejudicial. In a Lanham Act case like this, the jury will be required to

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determine whether differences in the product were material and whether consumer

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confusion was likely. It is possible that evidence of other gray market activities will be

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relevant to some of these issues. That is a decision the Court can make only in the

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context of trial.

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The Court addressed Defendants’ motion in limine to exclude testimony

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regarding customer expectations and confusion. Doc. 219. The motion was denied.

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Defendants argue that testimony from AFL personnel on these subjects necessarily would

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lack personal knowledge and be based on hearsay. The Court cannot rule on personal

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knowledge and hearsay objections until it hears the testimony in question. Moreover, as

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Plaintiff notes, testimony about information obtained from consumers may be admissible

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state of mind evidence under Rule 803(3). See Lahoti v. Vericheck Inc., 636 F.3d 501,

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509 (9th Cir. 2011).

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The Court addressed Defendants’ motion in limine to exclude all evidence

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of used fusion splicers. Doc. 220. Defendants argue that used fusion splicers are not at

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issue in this case. Plaintiff filed no response. The Court will grant the motion.

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15.

The Court addressed Defendants’ motion in limine to exclude punitive and

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trebled damages.

Doc. 221.

The motion was denied.

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Punitive damages are not

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authorized by the Lanham Act, but they may be recovered under Plaintiff’s state-law

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claim for unfair competition, a claim not addressed in Defendants’ motion. Whether the

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evidence in this case justifies sending the punitive damages claim under the state-law

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count or a treble damages claim under the Lanham Act to the jury is a matter that must be

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decided at the close of Plaintiff’s evidence. The Court cannot make that determination at

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this stage of the case.

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The Court addressed Defendants’ motion in limine to exclude all evidence

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that English is not available on units made for sale in China. Doc. 222. Defendants

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contend that Stephen Althoff has no personal knowledge of this subject and that Fujikara

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witnesses on this issue have not been listed as trial witnesses. Plaintiff responds that two

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Fujikara witnesses with knowledge on this subject, Hiroshi Sugawara and Noriyuki

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Kawanishi, have been listed as possible trial witnesses and have personal knowledge on

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this subject.

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exclusion of these witnesses is not required for nondisclosure. Both were deposed during

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the course of this litigation. The Court accordingly denied the motion.

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For reasons stated in paragraph 18 below, the Court concludes that

The Court addressed Defendants’ motion in limine to exclude evidence

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relating to Daniel Parsons’ drug conviction and alleged drug use. Doc. 223. The Court

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concludes that Mr. Parsons’ drug conviction, which is more than ten years old, and

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testimony that he more recently engaged in the manufacture and distribution of drugs, is

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not relevant to this Lanham Act case.

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identified, the Court concludes that the risk of unfair prejudice would substantially

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outweigh it under Rule 403. The Court accordingly granted the motion.

Even if some marginal relevance could be

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The Court does not agree that the evidence is admissible under Rule 404(b).

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Plaintiff argues that “[t]he evidence in question tends to show that Mr. Parsons has

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intentionally and knowingly engaged in the sale of illicit items for his own personal

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benefit without regard for the interests of others. This is a material point in dispute in this

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litigation, and evidence of his prior bad acts should be admitted to establish willfulness.”

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Doc. 242. But this is precisely the kind of “propensity evidence” Rule 404 is designed to

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preclude – an assertion that Defendant sold illicit items for his own benefit in the past and

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therefore did so here as well.

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The Court also concludes that the conviction, being more than ten years old,

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cannot be used for impeachment under Rule 609. “A conviction more than 10 years old

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may be admitted only if its probative value substantially outweighs its prejudicial effect.

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Because this test is so stringent, convictions more than 10 years old should be admitted

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rarely and only in exceptional circumstances.” Vol. 4, Jack B. Weinstein & Margaret A.

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Berger, Weinstein's Federal Evidence, § 609.06[1] (Matthew Bender 2d ed.2013)

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(emphasis in original). In this Lanham Act case, the Court sees little if any probative

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value – even for impeachment – in a drug conviction more than ten years old.

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Plaintiff argues that the circumstances of departure from Defendants’ employment

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may become relevant for some former employees of Defendants, and that those

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circumstances include Defendant Parsons’ recent drug us. If Plaintiff concludes that such

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evidence becomes important during the trial, counsel for Plaintiff can raise the issue with

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Court outside the hearing of the jury.

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The Court addressed Defendants’ motion in limine to exclude undisclosed

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witnesses. Doc. 224. The motion concerns witnesses who were deposed in this case but

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never listed in a disclosure by Plaintiff under Rule 26(a)(1)(A)(i). The Court denied the

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motion. The Court concludes that the identity of these witnesses as individuals likely to

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have discoverable information (Rule 26(a)(1)(A)(i)) was made known to Defendants by

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virtue of the fact that each of them was deposed by Defendants. This eliminated the need

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for supplemental disclosure with respect to these witnesses.

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Plaintiffs complied with the trial witness disclosure obligation in Rule 26(a)(3)(A)(1) by

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listing the witnesses in the proposed final pretrial order. See Doc. 207, ¶ 2. And because

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each of these witnesses was deposed by Defendants, the Court concludes that a failure to

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disclose them, if it had occurred, would be harmless, and that exclusion of the witnesses

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See Rule 26(e)(1)(A).

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would therefore not be required under Rule 37(c)(1).
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Defendants filed a motion in limine to exclude argument and testimony

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regarding the performance and reliability of fusion splicers. Doc. 227. The motion is

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denied. Defendants argue that Plaintiff failed to produce testing documents as required

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by the Court’s July 5, 2012 order, and that the Court should sanction Plaintiff by

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precluding any evidence of splicer testing. In response, Plaintiff produces a letter with

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which it transmitted to Defendants the documents required by the Court’s July 5, 2012

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order, and assert that several hundred pages of the production included splicer testing

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information. Doc. 244-1 at 2. On this record, the Court cannot conclude that Plaintiff

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should be sanctioned for failing to comply with the Court’s order. In addition, Plaintiff

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has disclosed expert testimony concerning the condition and likely performance of the

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Entergy splicer that would not be subject to preclusion even if the documents had not

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been produced.

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The Court addressed Defendants’ motion in limine to exclude AFL’s

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undisclosed warranty and consumer copyright license agreement. Doc. 229. The motion

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is granted in part and denied in part. Defendants argue that AFL failed to produce

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warranty documents after it agreed to do so in a conference call with the Court on

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June 15, 2012, and failed to produce its consumer copyright license.

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Defendants contend, AFL should be precluded from presenting evidence regarding the

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warranty and license agreement at trial. In response, AFL does not dispute that it failed

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to produce the warranty documents, but argues that its claim is based not on the terms of

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the warranty but on the fact that customers receive warranty service from AFL and

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Fujikara for regular market items, but not for gray market items. AFL clearly agreed to

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produce warranty documents to the extent they exist (Doc. 229-1 at 15), a fact

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acknowledged and relied on by the Court (Doc. 229-1 at 25). Because it never produced

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warranty documents, AFL will be precluded at trial from presenting evidence concerning

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the terms of its warranty. AFL will not be precluded, however, from presenting evidence

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As a result,

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that it provides warranty service at its own factory and at Fujikara. That fact has been a

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part of AFL’s position in this case from the outset. With respect to the license agreement,

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AFL asserts that it produced documents containing terms of the license, including

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AFS00176. In its evidence at trial, AFL will be limited to terms of the license disclosed

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in documents produced during discovery or disclosed during deposition testimony.

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The Court provided the parties with the Court’s proposed voir dire

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questions.

These questions will be discussed during the conference to be held on

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November 26, 2013.

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The Court provided the parties with the Court’s proposed preliminary jury

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instructions to be given at the beginning of trial.

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addressed at the November 26, 2013 conference.

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These instructions will also be

The parties shall hold a settlement conference by September 30, 2013.

The parties promptly shall notify the Court if a settlement is reached.
Dated this 25th day of July, 2013.

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