Mark Stoyas v. Toshiba Corporation et al

Filing 232

ORDER DENYING PLAINTIFFS MOTION 220 TO EXCLUDE by Judge Dean D. Pregerson: Plaintiffs' Motion to exclude is DENIED. IT IS SO ORDERED. See order for more information. (shb)

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UNITED STATES DISTRICT COURT

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CENTRAL DISTRICT OF CALIFORNIA

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MARK STOYAS, NEW ENGLAND
TEAMSTERS & TRUCKING INDUSTRY
PENSION FUND, and AUTOMOTIVE
INDUSTRIES PENSION TRUST FUND,
individually and on behalf of all others
similarly situated, a Japanese Corporation

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Plaintiffs,

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v.
TOSHIBA CORPORATION, a Japanese
Corporation,
Defendants.

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Case No. 2:15ȬcvȬ04194 DDPȬJC
ORDER DENYING PLAINTIFFS’
MOTION [220] TO EXCLUDE

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Presently before the court is Plaintiff’s Motion to Exclude the Expert Opinions of

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Masao Yanaga and Hidefusa Iida. Dkt. 173. Having considered the parties’ submissions,

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the court DENIES the motion and adopts the following order.

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I. BACKGROUND
Automotive Industries Pension Trust Fund and New England Teamsters &

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Trucking Industry Pension Fund (“Plaintiffs”) bring this Motion to Exclude the Expert

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Opinions of Masao Yanaga and Hidefusa Iida in connection with Toshiba Corporation

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(“Defendant”)’s pending Motion for Summary Judgment. The facts of this action have

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been set forth in previous orders. See Dkt. 65, 79, 148.
Previously, Defendant opposed Plaintiffs’ Motion for Class Certification on

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several bases, including that Plaintiffs (1) lacked standing, and (2) excluded potentially

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valuable claims of putative class members who would not have purchased securities but

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for Defendant’s alleged misrepresentations. Defendants included in their Opposition the

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declarations of Iida and Yanaga. The court ordered further briefing on the matter at the

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summary judgment stage. Dkt. 147. In particular, the court ordered both parties to

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address:

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1) whether Plaintiffs have statutory standing to bring claims under the Financial

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Instruments & Exchange Act of Japan (“JFIEA”); and
2) whether any of the proposed class members’ claims under the JFIEA require a

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showing of damages based on the acquisition of shares.
Dkt. 147.
In support of the ensuing motion for summary judgment, Defendant resubmitted

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the aboveȬmentioned declarations of Iida and Yanaga, which were originally submitted

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to oppose class certification. Dkt. 151. Plaintiffs then moved to exclude the declarations of

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both experts under the arguments discussed below. Dkt. 222.

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II. LEGAL STANDARD
Under Rule 44.1, courts may consider any relevant material or source that may aid

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them in determining foreign law. Fed. R. Civ. P. 44.1. A determination of foreign law

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based on Rule 44.1 is treated as a ruling on a question of law, and the materials

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considered need not be otherwise admissible under the Federal Rules of Evidence.

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Accordingly, experts considered under Rule 44.1 need not meet the standards of in

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Federal Rule of Evidence 702, as applied in Daubert v. Merrell Dow Pharm., Inc., 509 U.S.

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579 (1993). See Schultz v. Royal Caribbean Cruises, Ltd., No. 18Ȭ24023ȬCIV, 2020 WL

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3035234, at *4 (S.D. Fla. June 5, 2020).

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III. DISCUSSION
Plaintiffs argue that Iida and Yanaga’s declarations “run afoul of Rule 44.1”

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because they are not relevant, not supported, not reliable, and improperly opine on

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ultimate facts. Mot. at 2, 10, 15.

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A. Payment
As a threshold matter applying to both Yanaga and Iida, Plaintiffs argue that

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Defendant improperly paid Yanaga and Iida after they wrote their declarations. Plaintiff

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reasons that “[t]his payment structure creates an undue and direct incentive to align the

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expert’s views with Toshiba’s.” Mot. at 19. The court does not weigh in on whether the

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payment structure impacts the witnesses’ credibility, because the Rule 44.1 standard does

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not require such an inquiry. Thus, Plaintiffs argument that the payment structure “calls

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into question the reliability” of Yanaga and Iida’s declarations, even if correct, does not

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mandate their exclusion under Rule 44.1. The reliability of Iida’s declaration is further

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discussed infra section III.C.

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B. Yanaga’s Credibility and Relevance
Regarding Yanaga specifically, Plaintiffs first argue that Yanaga’s testimony

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should be excluded because Yanaga plagiarized part of one of the textbooks that was

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included in the list of publications affixed to Yanaga’s declaration. Yanaga’s publisher

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received a copyright infringement claim for pages 866 to 872 of the JFIEA penalties

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section of the textbook in question. The publisher suspended sale of the textbook and

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apologized “for causing some parts [of the book] to infringe on someone else’s

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copyright.” Exhibit 7 to Radcliffe Declaration. Defendants argue that the “copyright issue

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was unintentional” and supply a new declaration of Yanaga explaining the

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circumstances of the violation. Opp. At 7; Yanaga Declaration of October 13, 2022 at ¶4.

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The court declines to weigh in on whether Yanaga willfully plagiarized seven

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pages of the textbook in question. The purportedly infringed pages do not factor into

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Yanaga’s declaration except for their inclusion in his list of publications. Even if Yanaga’s

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credibility was diminished by the copyright issue, the court would still be entitled to

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refer to his declaration to aid its determination of foreign law.

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Plaintiffs next argue that Yanaga’s opinion does not address the legal question the

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Court granted leave to be addressed judgment. Rule 44.1 does not require so narrow a

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tailoring; it only requires that Yanaga’s opinion “may aid” the Court in determining

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foreign law. Fed. R. Civ. P. 44.1. Thus, Yanaga’s opinion is relevant and the court need

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not exclude it.

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C. Iida’s Reliability
Plaintiffs argue that Iida’s opinion lacks proper support and is unreliable, because

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(1) it is based on Iida’s subjective interpretation; (2) it contains a misstatement about the

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BookȬEntry Transfer Institution; (3) it does not utilize a relevant Japanese Supreme Court

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case (Livedoor); (4) it is based on the assumption of a validly existing trust; (5) it

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improperly opines on ultimate facts; and. Although the first four issues may affect the

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weight to which the Court afford Iida’s conclusions on certain matters, none of them

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discredit him so thoroughly as to “run afoul of Rule 44.1.” As to its opinion on ultimate

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facts, that limitation does not apply to Rule 44.1 evidence, which does not need to pass

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through the standards of Federal Rule of Evidence 702. Thus, the court need not exclude

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Iida’s opinion.

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IV. CONCLUSION
For the reasons stated above, Plaintiffs’ Motion to Exclude is DENIED.
IT IS SO ORDERED.

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Dated: November 17, 2022

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___________________________________

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DEAN D. PREGERSON

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UNITED STATES DISTRICT JUDGE

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