Oracle Corporation et al v. SAP AG et al

Filing 728

MOTION in Limine Defendants' Motions in Limine filed by SAP AG, SAP America Inc, Tomorrownow Inc. Motion Hearing set for 9/30/2010 09:00 AM in Courtroom 3, 3rd Floor, Oakland. (Attachments: # 1 Proposed Order)(Froyd, Jane) (Filed on 8/5/2010)

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Oracle Corporation et al v. SAP AG et al Doc. 728 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Robert A. Mittelstaedt (SBN 060359) Jason McDonell (SBN 115084) Elaine Wallace (SBN 197882) JONES DAY 555 California Street, 26th Floor San Francisco, CA 94104 Telephone: (415) 626-3939 Facsimile: (415) 875-5700 ramittelstaedt@jonesday.com jmcdonell@jonesday.com ewallace@jonesday.com Tharan Gregory Lanier (SBN 138784) Jane L. Froyd (SBN 220776) JONES DAY 1755 Embarcadero Road Palo Alto, CA 94303 Telephone: (650) 739-3939 Facsimile: (650) 739-3900 tglanier@jonesday.com jfroyd@jonesday.com Scott W. Cowan (Admitted Pro Hac Vice) Joshua L. Fuchs (Admitted Pro Hac Vice) JONES DAY 717 Texas, Suite 3300 Houston, TX 77002 Telephone: (832) 239-3939 Facsimile: (832) 239-3600 swcowan@jonesday.com jlfuchs@jonesday.com Attorneys for Defendants SAP AG, SAP AMERICA, INC., and TOMORROWNOW, INC. UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA OAKLAND DIVISION ORACLE USA, INC., et al., Plaintiffs, v. SAP AG, et al., Defendants. Case No. 07-CV-1658 PJH (EDL) DEFENDANTS' MOTIONS IN LIMINE Date: Time: Place: Judge: September 30, 2010 9:00 am 3rd Floor, Courtroom 3 Hon. Phyllis J. Hamilton DEFS.' MOTIONS IN LIMINE Case No. 07-CV-1658 PJH (EDL) Dockets.Justia.com 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 IX. VIII. VII. VI. V. IV. III. II. I. TABLE OF CONTENTS Page MOTION IN LIMINE NO. 1 TO EXCLUDE EVIDENCE AND ARGUMENT REGARDING ALLEGED HARM TO GOODWILL........................................................ 1 A. Material Facts.......................................................................................................... 1 B. Argument ................................................................................................................ 2 MOTION IN LIMINE NO. 2 REGARDING PRECLUDED DAMAGES EVIDENCE......................................................................................................................... 3 A. Material Facts.......................................................................................................... 3 B. Argument ................................................................................................................ 4 MOTION IN LIMINE NO. 3 TO EXCLUDE EVIDENCE AND ARGUMENT OF DAMAGES FOR NONPARTY ENTITIES................................................................. 6 A. Material Facts.......................................................................................................... 6 B. Argument ................................................................................................................ 7 MOTION IN LIMINE NO. 4 TO EXCLUDE REBUTTAL TESTIMONY REGARDING THE SOMMER REPORT.......................................................................... 9 A. Material Facts.......................................................................................................... 9 B. Argument .............................................................................................................. 10 MOTION IN LIMINE NO. 5 TO EXCLUDE IMPROPER OPINION OF LAY WITNESSES AND UNDISCLOSED EXPERTS ............................................................ 10 A. Material Facts........................................................................................................ 10 B. Argument .............................................................................................................. 11 MOTION IN LIMINE NO. 6 TO EXCLUDE DEPOSITION TESTIMONY INVOKING THE ATTORNEY-CLIENT PRIVILEGE .................................................. 15 A. Material Facts........................................................................................................ 15 B. Argument .............................................................................................................. 15 MOTION IN LIMINE NO. 7 TO EXCLUDE EVIDENCE AND ARGUMENT REGARDING INVESTIGATIONS BY THE DOJ AND FBI ........................................ 16 A. Material Facts........................................................................................................ 17 B. Argument .............................................................................................................. 17 MOTION IN LIMINE NO. 8 TO EXCLUDE EVIDENCE AND ARGUMENT REGARDING THE LEGALITY OF RIMINI STREET, INC.'S BUSINESS MODEL ............................................................................................................................ 19 A. Material Facts........................................................................................................ 19 B. Argument .............................................................................................................. 20 MOTION IN LIMINE NO. 9 TO EXCLUDE EVIDENCE AND ARGUMENT REGARDING HYPERION, RETEK AND E-BUSINESS SUITE PRODUCT LINES ............................................................................................................................... 21 A. Material Facts........................................................................................................ 21 B. Argument .............................................................................................................. 22 -iDEFS.' MOTIONS IN LIMINE Case No. 07-CV-1658 PJH (EDL) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 X. TABLE OF CONTENTS (continued) Page MOTION IN LIMINE NO. 10 TO PRECLUDE PLAINTIFFS FROM REFERRING TO DEFENDANT TOMORROWNOW, INC. AS SAP/TN .................... 22 A. Material Facts........................................................................................................ 23 B. Argument .............................................................................................................. 23 - ii - DEFS.' MOTIONS IN LIMINE Case No. 07-CV-1658 PJH (EDL) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Cases TABLE OF AUTHORITIES Page(s) Aladdin Oil Corp. v. Perluss, 230 Cal. App. 2d 603 (Cal. Ct. App. 1964) ................................................................................. 7 Beachy v. Boise Cascade Corp., 191 F.3d 1010 (9th Cir. 1999).................................................................................................... 18 Disenos Artisticos E Industriales, S.A. v. Costco Wholesale Corp., 97 F.3d 377 (9th Cir. 1996).......................................................................................................... 7 Dole Food Co. v. Patrickson, 538 U.S. 468 (2003)..................................................................................................................... 7 E.E.O.C. v. Lennar Homes of Ariz., CV-03-1827-PHX-DGC, 2006 U.S. Dist. LEXIS 42865 (D. Ariz. June 23, 2006) .................. 14 Hanger Prosthetics & Orthotics, Inc. v. Capstone Orthopedic, Inc., No. 2:06-cv-2879-GEB-KJM, 2008 U.S. Dist. LEXIS 91373 (E.D. Cal. June 13, 2008)........................................................................................ 12, 13, 14, 15 In re: Imperial Credit Indus., Inc. Sec. Litig., 252 F. Supp. 2d. 1005 (C.D. Cal. 2003) .................................................................................... 15 Informatica Corp. v. Business Objects Data Integration, Inc., No. C 02-03378 EDL, 2007 U.S. Dist. LEXIS 16247 (N.D. Cal. Feb. 23, 2007)..................... 13 Knorr-Bremse Systeme Fuer Nutzfahrzeuge GmbH v. Dana Corp., 383 F.3d 1337 (Fed. Cir. 2004).................................................................................................. 16 Lanard Toys Ltd. v. Novelty Inc., 511 F. Supp. 2d 1020 (C.D. Cal. 2007) ....................................................................................... 8 Lewis v. Chicago Police Dept., 590 F.3d 427 (7th Cir. 2009)................................................................................................ 18, 19 Mars, Inc. v. Coin Acceptors, Inc., 527 F.3d 1359 (Fed. Cir. 2008).................................................................................................... 8 McKesson Info. Solutions, Inc. v. Bridge Med., Inc., 434 F. Supp. 2d 810 (E.D. Cal. 2006)........................................................................................ 16 Moseley v. Secret Catalogue, 537 U.S. 418 (2003)................................................................................................................... 16 Nabisco, Inc. v. PF Brands, Inc., 191 F.3d 208 (2d Cir. 1999)....................................................................................................... 16 Nachtsheim v. Beech Aircraft Corp., 847 F.2d 1261 (7th Cir. 1988).................................................................................................... 20 Parker v. Prudential Ins. Co. of Am., 900 F.2d 772 (4th Cir. 1990)...................................................................................................... 16 Poly-America, L.P. v. GSE Lining Tech., Inc., 383 F.3d 1303 (Fed. Cir. 2004).................................................................................................... 8 Rogers v. Raymark Indus., Inc., 922 F.2d 1426 (9th Cir. 1991).................................................................................................... 23 DEFS.' MOTIONS IN LIMINE Case No. 07-CV-1658 PJH (EDL) - iii - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Other Authorities Statutes TABLE OF AUTHORITIES (continued) Page(s) Sharer v. Tandberg, Inc., No. 1:06-cv-626, 2007 WL 983849 (E.D. Va. Mar. 27, 2007).................................................. 16 Tennison v. Circus Circus Enters., Inc., 244 F.3d 684 (9th Cir. 2001)...................................................................................................... 20 Therasense, Inc. v. Becton, Dickinson & Co., No. C 04-02123 WHA, 2008 WL 2323856 (N.D. Cal. May 22, 2008)....................................... 8 THK Am., Inc. v. NSK, Ltd., 917 F. Supp. 563 (N.D. Ill. 1996) .............................................................................................. 16 United States v. Bailleaux, 685 F.2d 1105 (9th Cir. 1982).................................................................................................... 18 United States v. Bussell, 414 F.3d 1048 (9th Cir. 2005).................................................................................................... 20 United States v. Moore, 936 F.2d 1508 (7th Cir. 1991).................................................................................................... 18 United States v. Smith, 199 Fed. App'x. 759, 761 (11th Cir. 2006)................................................................................ 18 United States. v. Curtain, 489 F.3d 935 (9th Cir. 2007)...................................................................................................... 17 Warth v. Seldin, 422 U.S. 490 (1975)..................................................................................................................... 7 Yeti by Molly, Ltd. v. Deckers Outdoor Corp., 259 F.3d 1101 (9th Cir. 2001).................................................................................................... 12 Fed. R. Civ. P. 16 ........................................................................................................................... 10 Fed. R. Civ. P. 26 ................................................................................................................... 2, 3, 12 Fed. R. Civ. P. 37 .................................................................................................................... passim Fed. R. Evid. 401 ..................................................................................................................... 17, 22 Fed. R. Evid. 402 ..................................................................................................................... 17, 22 Fed. R. Evid. 403 .................................................................................................................... passim Fed. R. Evid. 701 ............................................................................................................... 12, 14, 15 Fed. R. Evid. 702 ..................................................................................................................... 12, 15 1 William Meade Fletcher, Fletcher Cyclopedia of the Law of Corporations 36 (Apr. 2010) .... 7 - iv - DEFS.' MOTIONS IN LIMINE Case No. 07-CV-1658 PJH (EDL) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 I. MOTION IN LIMINE NO. 1 TO EXCLUDE EVIDENCE AND ARGUMENT REGARDING ALLEGED HARM TO GOODWILL The Court should preclude Plaintiffs from offering any evidence and argument on alleged harm to Plaintiffs' goodwill. A. 1. Material Facts On July 14, 2009, Defendants filed a motion for sanctions with Judge Laporte, requesting preclusion of certain damages evidence. See D.I. 342 (Defs.' Mot. for Sanctions). Judge Laporte held a hearing on the motion on August 18, 2009 ("Sanctions Hearing") and granted the motion on September 17, 2009. See D.I. 482 ("Sanctions Order"). This Court adopted the Sanctions Order on November 2, 2009. See D.I. 532 ("Adopting Order"). 2. At the Sanctions Hearing, Judge Laporte asked Plaintiffs to clarify which forms of damages they intended to quantify or seek, including whether Plaintiffs intended to quantify or seek damages for alleged harm to goodwill. See Declaration of Jason McDonell ("McDonell Decl.") 6, Ex. D (8/18/09 Sanctions Hearing Tr.) at 38:18-25; 41:18-24. Plaintiffs responded that they did not intend to quantify "anything on goodwill" or to seek damages related to goodwill. Id. at 43:11-22. 3. Further, when Plaintiffs objected to the Sanctions Order and sought this Court's clarification concerning its scope, they expressly acknowledged that the Sanctions Order precludes any claim for damages to goodwill. See D.I. 499 (Pls.' Objs.) at 2 ("The damages that arguably fit Magistrate Laporte's premise are ... damages to Oracle's goodwill ...."). 4. Plaintiffs' damages expert Mr. Meyer did not provide an opinion on alleged harm to goodwill in his report. In deposition, Mr. Meyer confirmed that he has not quantified alleged harm to goodwill. See McDonell Decl. 5, Ex. C (5/12/10 Paul K. Meyer Deposition ("5/12/10 Meyer Tr.")) at 255:9-260:25. 5. Plaintiffs have not produced evidence relating to alleged harm to goodwill. The evidence required to prove such a claim is the same evidence at issue in the Sanctions Order. For example, Mr. Meyer testified that goodwill largely consists of the opportunity to cross-sell and up-sell software licenses. See id. at 257:11-258:1. Plaintiffs' failure to provide discovery on -1DEFS.' MOTIONS IN LIMINE Case No. 07-CV-1658 PJH (EDL) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 cross-sell and up-sell of software licenses was one basis for the Sanctions Order, which expressly precludes evidence of alleged lost license sales. See D.I. 482 (Sanctions Order) at 26. 6. Despite their representation at the Sanctions Hearing and in their objections to the Sanctions Order, Plaintiffs have indicated in their proposed jury instructions that they intend to seek damages for alleged harm to goodwill. See McDonell Decl. 7, Ex. E (Pls.' Instr.) Nos. 35, 36, 60. Plaintiffs have not disclosed how much they intend to seek or what evidence they intend to present in support of their claim. B. Argument Plaintiffs have admitted that evidence of alleged harm to goodwill is precluded by the Sanctions Order. Such evidence is therefore precluded and irrelevant. Rule 26 of the Federal Rules of Civil Procedure ("Rule 26") requires a computation of each category of damages claimed and production of the documents on which the computation is based. See Fed. R. Civ. P. 26(a)(1)(A)(iii). Rule 26(e)(1) requires timely supplementation of disclosures and discovery responses whenever it becomes known that a disclosure or response is incomplete. See Fed. R. Civ. P. 26(e)(1). Rule 26(a)(2)(B) requires that an expert report "contain a complete statement of all opinions to be expressed and the basis and reasons therefor," as well as "the data or other information considered by the witness in forming the opinions." Fed. R. Civ. P. 26(a)(2)(B). Plaintiffs have not complied with any of these rules. To the extent that they disclosed an initial intent to seek damages for alleged harm to goodwill, it was superseded by the express representations to the Court and Defendants that they did not intend to quantify or seek damages relating to goodwill. See McDonell Decl. 6, Ex. D (8/18/09 Sanctions Hearing Tr.) at 43:11-22. Plaintiffs have never supplemented their disclosures or discovery responses to provide a computation of goodwill damages, and their damages expert has never quantified or provided an opinion on it. Their failure to provide the discovery relevant to goodwill is established in the Sanctions Order. When a party fails to disclose information required by Rules 26(a) and (e), Rule 37 of the Federal Rules of Civil Procedure ("Rule 37") precludes use of the information at trial unless the -2DEFS.' MOTIONS IN LIMINE Case No. 07-CV-1658 PJH (EDL) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 failure is substantially justified or harmless. See Fed. R. Civ. P. 37(c)(1). Plaintiffs' failure to provide a computation of goodwill damages, the basis for the claim, or any documents in support of the claim is neither justified nor harmless. Defendants reasonably relied on Plaintiffs' representation that they would not quantify or seek damages relating to harm to goodwill. Defendants cannot adequately prepare at this late stage, since Plaintiffs have failed--even now-- to provide any information on the amount or basis for the claim. This harm is compounded by the fact that goodwill damages are hard to quantify. Indeed, the reason Plaintiffs gave at the Sanctions Hearing for not seeking goodwill damages was that "it is a very difficult thing to quantify." See McDonell Decl. 6, Ex. D (8/18/09 Sanctions Hearing Tr.) at 43:11-22. The purpose of Rule 26 is to prevent unfair surprise at trial and to prevent experts from "lying in wait" to express new opinions at the last minute, thereby denying the opposing party a fair opportunity to respond. It is manifestly unfair to permit Plaintiffs to present evidence on or to seek damages for alleged harm to goodwill. Nor should this evidence be admitted through the "back door" as purported context for Plaintiffs' claims, even if Plaintiffs contend that they are not seeking such damages. See D.I. 532 (Adopting Order) at 2. II. MOTION IN LIMINE NO. 2 REGARDING PRECLUDED DAMAGES EVIDENCE Plaintiffs continue to attempt to offer precluded damages evidence "through the back door," despite the Court's ruling that they may not do so. The Court should confirm its prior ruling and exclude the precluded evidence for all purposes. A. 1. Material Facts On July 14, 2009, Defendants filed a motion for sanctions with Magistrate Judge Laporte, requesting preclusion of certain damages evidence. See D.I. 342 (Defs.' Mot. for Sanctions). Magistrate Judge Laporte held a hearing on August 18, 2009 and granted the motion on September 17, 2009. See D.I. 482 (Sanctions Order). The Sanctions Order precludes Plaintiffs from presenting evidence of: (1) alleged lost profits relating to customers that did not become customers of TomorrowNow; (2) alleged lost profits relating to licensing revenue, as opposed to support revenue and (3) alleged lost profits relating to products that were not supported by TomorrowNow. Id. at 26. -3DEFS.' MOTIONS IN LIMINE Case No. 07-CV-1658 PJH (EDL) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 2. On October 1, 2009, Plaintiffs filed objections to the Sanctions Order with this Court. See D.I. 499 (Pls.' Objs.). In addition to asserting objections, Plaintiffs requested clarification that their damages expert and other witnesses be permitted to offer the precluded evidence for purposes other than proving lost profits damages, including in support of their expert's hypothetical license calculation and other, unspecified, alleged "impacts." Id. at 14-15. 3. In response, Defendants argued that Plaintiffs should not be permitted to offer the precluded evidence to bolster their other damages claims. See D.I. 526 (Defs.' Resp. to Pls.' Objs.) at 21-22. Specifically, Defendants argued that the prejudice finding on which the Sanctions Order is based applies with equal force to Plaintiffs' other damage claims. Id. ("If Oracle's expert is permitted to testify on the amount of the precluded lost profits damages for purposes of, for example, supporting his opinion on the value of the hypothetical license (or any other damage theory), the prejudice to Defendants is the same as if he was testifying for purposes of the lost profits claim. Defendants will have been deprived of a full and fair opportunity to rebut that evidence by Oracle's discovery misconduct."). 4. On November 2, 2009, the Court overruled Plaintiffs' objections and adopted the Sanctions Order in its entirety. See D.I. 532 (Adopting Order). The Court further ruled that the precluded evidence would not be admitted for any other purpose. See id. at 1 ("the precluded evidence will NOT be admitted through the back door . . . .").1 5. Despite the Court's ruling, Plaintiffs have indicated their intent to offer the precluded evidence in support of their other damage theories. B. Argument Plaintiffs plainly intend to rely on precluded evidence in support of other damage theories. For example, the Sanctions Order precludes evidence relating to alleged lost software license sales, often referred to by the parties as alleged lost "cross-sell" and "up-sell" opportunities. D.I. 482 (Sanctions Order) at 26. Nonetheless, Plaintiffs' damages expert expressly relies on alleged lost cross-sell and up-sell opportunities in his calculation of fair market value damages. Mr. The Court stated that Plaintiffs would be permitted a jury instruction regarding the precluded evidence, the specific language of which would be determined during the pretrial process. See D.I. 532 (Adopting Order) at 1-2 (emphasis in original). -4DEFS.' MOTIONS IN LIMINE Case No. 07-CV-1658 PJH (EDL) 1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Meyer attempts to draw a distinction between the use of up-sell and cross-sell evidence to quantify lost profits (which he concedes is forbidden) and his consideration of it in his fair market value calculation, which he describes as follows: I consider the value of the copyrighted materials in suit in terms of their ability to generate sales of other Oracle products not to quantify the lost profits associated with Oracle's lost cross-sell and up-sell opportunities to TomorrowNow support customers, but as considerations that would inform and be relevant to the fair market value of Defendants' use of the allegedly infringed materials. See McDonell Decl. 3, Ex. A (2/23/10 Supp. Expert Report of Paul K. Meyer ("Meyer Report")) at 121 n.302 (describing his "market approach" to fair market value).2 This is nothing more than an attempt to admit the evidence through the "back door." In fact, in his so-called "income approach" to quantifying fair market value, Mr. Meyer explicitly relies on evidence of up-sell and cross-sell: . . . revenues and profits from PeopleSoft's support customers lost to TomorrowNow and SAP (post-October 2008), lost incremental license revenue (up-sell) and related support, and lost new license revenue (cross-sell) and related support. Id. at 129 (describing his "income approach" to fair market value); see also McDonell Decl. 4, Ex. B (5/13/10 Paul Meyer Deposition) at 440:1-441:7 ("And so I basically took the potential lost customers for maintenance, cross-sell and upsell, from SAP's strategic plans and then put that back into Oracle's models."). The Sanctions Order also precludes evidence relating to customers that did not become TomorrowNow customers. See D.I. 482 (Sanctions Order) at 26. These non-TomorrowNow customers include Plaintiffs' prospective customers.3 Plaintiffs represented at the hearing on the Sanctions Motion that they would not quantify or seek damages relating to "potential customers." See McDonell Decl. 6, Ex. D (8/18/09 Sanctions Hearing Tr.) at 43:11-22. Nonetheless, Plaintiffs proposed jury instructions on damage claims based on alleged harm to prospective In his market approach, Meyer also relies on the value of the goodwill from Plaintiffs' acquisition of PeopleSoft, Inc. See McDonell Decl. 3, Ex. A (Meyer Report) at 121. He testified that goodwill consists largely of the opportunity to cross-sell and up-sell software licenses. See McDonell Decl. 5, Ex. C 5/12/10 Meyer Tr. at 257:11-258:1. 3 Since TomorrowNow's customers were all former customers of Plaintiffs, any prospective customer of Plaintiffs would, by definition, be a non-TomorrowNow customer. -5DEFS.' MOTIONS IN LIMINE Case No. 07-CV-1658 PJH (EDL) 2 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 customer relationships. See McDonell Decl. 7 Ex. E (Pls.' Instr.) Nos. 46-49, 52. This Court should reject Plaintiffs' "back door" attempt to present precluded damages evidence. Magistrate Judge Laporte held that Defendants would be prejudiced if Plaintiffs were permitted to offer the precluded evidence in connection with their lost profits claim. Specifically, Magistrate Judge Laporte held that Plaintiffs' belated disclosure of new damage theories constituted "a vastly expanded scope of damages" and that Defendants could not conduct "a meaningful analysis of Plaintiffs' far more complicated and extensive new damage claims within the current pretrial schedule ...." D.I. 482 (Sanctions Order) at 18, 24. These findings apply with equal force to Plaintiffs' other damage claims. If Plaintiffs' expert is permitted to testify on alleged lost cross-sell and up-sell opportunities to support his fair market value opinion, the prejudice to Defendants is the same as if he was testifying for purposes of the lost profits claim. Defendants will have been deprived of a meaningful opportunity to rebut that evidence as a result of Oracle's discovery misconduct. This Court recognized that fact when it held that the precluded evidence would not be permitted "through the back door . . . ." D.I. 532 (Adopting Order) at 1. Plaintiffs should not be permitted to avoid that ruling and the consequences of their misconduct. III. MOTION IN LIMINE NO. 3 TO EXCLUDE EVIDENCE AND ARGUMENT OF DAMAGES FOR NONPARTY ENTITIES The Court should preclude Plaintiffs from offering evidence and argument in support of a claim for damages calculated for the Oracle organization as a whole as such evidence is irrelevant. Although this issue has been addressed in Defendants' pending motion for partial summary judgment and although Plaintiffs subsequently conceded that they are not entitled to seek damages for nonparties, Plaintiffs failed to withdraw this claim or the evidence on which it is based, obliging Defendants to seek exclusion of such evidence with this motion. A. 1. Material Facts Plaintiffs in this case consist of four Oracle entities--Oracle International Corp. ("OIC"), Oracle USA, Inc. ("OUSA"), Oracle EMEA Limited ("OEMEA") and Siebel Systems, Inc. ("SSI"). 2. On February 23, 2010, Plaintiffs served the Supplemental Expert Report of Paul K. -6DEFS.' MOTIONS IN LIMINE Case No. 07-CV-1658 PJH (EDL) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Meyer ("Meyer Report"). In his report, Meyer indicated that he performed two separate calculations of Plaintiffs' lost profits. See McDonell Decl. 3, Ex. A (Meyer Report) at 355. One of these calculations included determining "the lost profits of the Oracle organization as a whole." Id. He includes this figure, consisting of lost profits from nonparty entities, in his "Summary of Oracle's Lost Profits" chart in the Meyer Report. See id. at 433 (Table 16). B. Argument Corporate plaintiffs may recover only their own lost profits; they cannot assert the rights of third parties--even affiliated entities. As addressed in Defendants' Motion for Partial Summary Judgment (D.I. 640), two basic legal principles decide this issue. First, corporations are considered separate legal entities even if they are closely related. See Dole Food Co. v. Patrickson, 538 U.S. 468, 474 (2003) ("A basic tenet of American corporate law is that the corporation and its [corporate] shareholders are distinct entities."). Second, a plaintiff may sue for damages only on its own behalf--not on behalf of nonparties. See Warth v. Seldin, 422 U.S. 490, 499 (1975) ("[A] plaintiff generally must assert [its] own legal rights and interests, and cannot rest [its] claim to relief on the legal rights or interests of third parties."). Taken together, these rules dictate that a corporate plaintiff "generally must assert [its] own legal rights," not the rights of a sister or subsidiary corporation. Warth, 422 U.S. at 499; see also 1 William Meade Fletcher, Fletcher Cyclopedia of the Law of Corporations 36 (Apr. 2010) ("Nor does a corporation have independent standing to sue for injuries done to a sister or subsidiary corporation, despite the fact that their businesses are intertwined and the success of one is dependent on that of the other."). Permitting a plaintiff to recover the damages of its affiliates allows it to "establish and use its affiliates' separate legal existence for some purposes"--such as limited liability and tax advantages--"yet have their separate corporate existence disregarded for its own benefit against third parties." Disenos Artisticos E Industriales, S.A. v. Costco Wholesale Corp., 97 F.3d 377, 380 (9th Cir. 1996). Neither federal nor California law permits such a result, id.; see also Aladdin Oil Corp. v. Perluss, 230 Cal. App. 2d 603, 614 (Cal. Ct. App. 1964) ("Parties who determine to avail themselves of the right to do business by means of the establishment of a corporate entity must assume the burdens thereof as well as the privileges."), -7DEFS.' MOTIONS IN LIMINE Case No. 07-CV-1658 PJH (EDL) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 including in the copyright context. See Lanard Toys Ltd. v. Novelty Inc., 511 F. Supp. 2d 1020, 1033 (C.D. Cal. 2007) (rejecting copyright plaintiffs' argument that it could assert the intellectual property rights of a "related compan[y]"). Applying these principles in the patent law context, courts have foreclosed plaintiffs from recovering the lost profits of a related company. In Poly-America, L.P. v. GSE Lining Tech., Inc., for example, the court held that the patent holder, Poly-America, could "recover only its own lost profits"--not those of its sister corporation, Poly-Flex. 383 F.3d 1303, 1311 (Fed. Cir. 2004). Poly-America applies with equal force to bar a parent corporation from recovering the lost profits of a subsidiary. See Mars, Inc. v. Coin Acceptors, Inc., 527 F.3d 1359, 1367 (Fed. Cir. 2008), amended on unrelated grounds by 557 F.3d 1377 (Fed. Cir. 2009) (failing to find that the theory of a parent company recovering the profits that flow inexorably up from subsidiaries is a valid one); Therasense, Inc. v. Becton, Dickinson & Co., No. C 04-02123 WHA, 2008 WL 2323856, at *4-5 (N.D. Cal. May 22, 2008) (where subsidiary lacked standing, parent was "prohibited from presenting any evidence of [the subsidiary's] lost profits"). Plaintiffs' "organization as a whole" approach impermissibly seeks lost profits of related nonparties. The Oracle organization established separate "corporate identities and functions to suit its own goals and purposes, but it must take the benefits with the burdens." Poly-America, 383 F.3d at 1311. Plaintiffs' effort to seek lost profits of the Oracle organization as a whole impermissibly includes nonparty lost profits and disregards the very corporate distinctions that Oracle uses to its advantage elsewhere. See id. Furthermore, Plaintiffs have not explained how the calculation of lost profits of nonparties "is a relevant consideration for Oracle's [fair market value] license amount," and Plaintiffs' expert did not use this evidence to support his fair market value license calculation. D.I. 677. (Pls.' Opp.) at 11. At the May 5, 2010 summary judgment hearing, Plaintiffs claimed that with regard to nonparties, they plan to seek damages based only on lost profits that "inexorably flow up from [nonparty] entities." See McDonell Decl. 8, Ex. F (5/5/10 Summ. J. Hearing Tr.) at 50:15. However, their expert report does not make this distinction. Plaintiffs are attempting to use the -8DEFS.' MOTIONS IN LIMINE Case No. 07-CV-1658 PJH (EDL) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 "organization as a whole" damages approach to circumvent this Court's November 2, 2009 order regarding the admissibility of particular damages evidence, and should not be permitted to do so. See D.I. 532 (Adopting Order). IV. MOTION IN LIMINE NO. 4 TO EXCLUDE REBUTTAL TESTIMONY REGARDING THE SOMMER REPORT The Court should preclude Plaintiffs from offering any rebuttal testimony regarding the Expert Report of Brian S. Sommer ("Sommer Report"). A. 1. Material Facts On March 26, 2010, Defendants served the Sommer Report rebutting portions of the Meyer Report. 2. Plaintiffs insisted, and the parties agreed, that expert witnesses would provide sur- rebuttal testimony in their depositions. See McDonell Decl. 9, Ex. G (01/25/2010 Email from Jason McDonell to Holly House) ("Now that the deposition will cover Plaintiffs' experts' opinions in response to Defendants' experts reports, it is essential that Defendants be permitted three days (seven hours record time each day) for the depositions of Mr. Meyer and Mr. Mandia."). Thus, Plaintiffs designated Meyer as a sur-rebuttal expert regarding the Sommer Report. Id. No other individual was designated by Plaintiffs to rebut the Sommer Report. See McDonell Decl. 1. 3. On May 12-14, 2010, Defendants deposed Meyer. During the first day of his deposition, Defendants asked Meyer about his rebuttal opinions of the Sommer Report. Meyer stated in part, "Obviously, I need to read Mr. Sommer's report in detail and interface with what he says with my opinions, and at some point I'll get to that." See McDonell Decl. 5, Ex. C (5/12/10 Meyer Tr.) at 39:17-20. He also testified that he "just glanced through" the Sommer Report, and did not develop any responses to it. Id. at 37:21-22. Simply put, he did not provide any direct rebuttal to the Sommer Report. See id. at 37:19-41:17; 56:23-57:15; see also McDonell Decl. 10, Ex. H (5/14/10 Paul K. Meyer Deposition ("5/14/10 Meyer Tr.")) at 828:11-22; 829:12-831:8; 856:25-857:18. Meyer explained, "I don't feel like . . . where [Sommer] comes out in his opinions are [sic] going to have impact on [my] opinions." See McDonell Decl. -9DEFS.' MOTIONS IN LIMINE Case No. 07-CV-1658 PJH (EDL) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 5, Ex. C (5/12/10 Meyer Tr.). at 38:18-39:3. By the conclusion of Meyer's three-day deposition, he still had not read the Sommer Report. See McDonell Decl. 10, Ex. H (5/14/10 Meyer Tr.) at 828:11-22. When asked on the final day of his deposition whether he had read the Sommer Report and was prepared to respond to it, Meyer answered, "No. I've already responded to that." Id. Accordingly, Defendants timely objected that Meyer was not prepared to testify on the Sommer Report. See id. at 934:13-19. B. Argument With discovery closed and expert depositions concluded, Defendants are left wholly unaware of Plaintiffs' rebuttal evidence or testimony regarding the Sommer Report to the extent they have any. Accordingly, Meyer should be precluded from providing rebuttal testimony regarding the Sommer Report. Further, any rebuttal of Sommer's opinion, whether offered by another expert or an unidentified fact witness, should also be precluded because Plaintiffs failed to abide by the parties' agreement and the Pretrial Order. This failure should "result in sanctions pursuant to Federal Rule of Civil Procedure 16(f)." See D.I. 83 (5/2/08 Order) at 4. The appropriate remedy is to prohibit Plaintiffs "from introducing designated matters in evidence." Fed. R. Civ. P. 37(b)(2)(B).4 V. MOTION IN LIMINE NO. 5 TO EXCLUDE IMPROPER OPINION OF LAY WITNESSES AND UNDISCLOSED EXPERTS The Court should preclude Plaintiffs from offering improper opinion testimony on technical or specialized matters, and any evidence thereof, rendered by Plaintiffs' employees, former TomorrowNow employees and other individuals Plaintiffs did not disclose as experts. A. 1. Material Facts The deadline to designate expert witnesses was October 2, 2009. See D.I. 325 (6/11/09 Order) at 1. On that date, Plaintiffs disclosed six experts: Daniel S. Levy, Ph.D., Kevin Mandia, Douglas Gary Lichtman, Paul K. Meyer, Paul C. Pinto and Francoise Tourniaire. See McDonell Decl. 11, Ex. I (Pls.' Initial Expert Disclosures) at 1-3. On October 16, 2009, Under Rule 16(f) of the Federal Rules of Civil Procedure the Court may sanction a party with any sanctions provided in Rule 37(b)(2)(B), (C) and (D). - 10 DEFS.' MOTIONS IN LIMINE Case No. 07-CV-1658 PJH (EDL) 4 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Plaintiffs supplemented these disclosures but did not disclose any additional experts. See McDonell Decl. 12, Ex. J (Pls.' Supp. Expert Disclosures) at 1-3. 2. On November 16, 2009, Plaintiffs served the expert report of Kevin Mandia, which was revised and/or supplemented several times, the latest version of which was served on May 12, 2010. The report contains references to opinions of various deponents and Oracle employees, none of whom were listed in Plaintiffs' expert disclosures. 3. The deadline to designate rebuttal experts was January 22, 2010. See D.I. 325 (6/11/09 Order) at 1. At that time, Plaintiffs did not designate any additional expert witnesses. Plaintiffs have not updated their disclosures or provided an expert report for any individuals beyond those listed in Plaintiffs' initial and supplemental expert disclosures. 4. On March 3, 2010, Plaintiffs filed the Declaration of Norm Ackermann in Support of Plaintiffs' Motion for Partial Summary Judgment ("Ackermann Decl."), which describes Ackermann's opinions regarding the results of a code comparison of computer files performed by Ackermann. See McDonell Decl. 13, Ex. K (Ackermann Decl.). 5. On March 3, 2010, Plaintiffs also filed the Declaration of Uwe Koehler in Support of Plaintiffs' Motion for Partial Summary Judgment ("Koehler Decl."), which contains Koehler's opinions regarding computer server logs. See D.I. 652 (Koehler Decl.). 6. On May 17, 2010, Plaintiffs served "sur-rebuttal" documents in support of Paul Pinto's expert report, including a native Excel spreadsheet labeled with production number ORCLX-PIN-000108. Table 1 of ORCLX-PIN-000108 refers to "Neuendorf's Hand-count." McDonell Decl. 14, Ex. L (ORCLX-PIN-000108 marked as Defs.' Depo. Ex. 2052) at Table 1. 7. At his deposition, Pinto testified that "Neuendorf's Hand-count" is an analysis by Stephen Neuendorf, a function point expert hired by Plaintiffs to rebut Defendants' function point expert's report. See McDonell Decl. 15, Ex. M (5/19/10 Paul Pinto Deposition ("Pinto Tr.")) at 51:5-52:16. Plaintiffs have not designated Neuendorf as an expert. B. Argument The Court should preclude Plaintiffs from presenting any testimony or other evidence relating to improper technical opinions of lay witnesses or opinions of undisclosed experts under - 11 DEFS.' MOTIONS IN LIMINE Case No. 07-CV-1658 PJH (EDL) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Rule 701 of the Federal Rules of Evidence ("Rule 701") and Rules 26 and 37. Rule 701 states that a lay witness may only provide testimony that is "rationally based on the perception of the witness" and is "not based on scientific, technical, or other specialized knowledge within the scope of Rule 702." Fed. R. Evid. 701. One purpose of this limitation is to eliminate the risk that the disclosure and reliability requirements for expert testimony would be "evaded through the simple expedient of proffering an expert in lay witness clothing." Fed. R. Evid. 701 advisory committee's notes (2000). Additionally, Rule 26 requires that all expert witnesses must be disclosed "at the times and in the sequence that the court orders." Fed. R. Civ. P. 26(a)(2)(C). If a party fails to disclose an expert as required by Rule 26, that "party is not allowed to use that information or witness to supply evidence on a motion, at a hearing, or at a trial, unless the failure was substantially justified or is harmless." Fed. R. Civ. P. 37(c)(1). In the Ninth Circuit, this sanction is "automatic" and "self-executing" to encourage full and early disclosure and proper adherence to the Rules. Yeti by Molly, Ltd. v. Deckers Outdoor Corp., 259 F.3d 1101, 1106-07 (9th Cir. 2001) (upholding the exclusion of expert testimony for failure to comply with Rule 26). Because Plaintiffs did not serve their witness list prior to Defendants filing this motion in limine, Defendants cannot specifically object to every witness who might provide such evidence. However, both expert discovery and motion practice in this case contain examples of impermissible technical opinions given by numerous individuals that Plaintiffs failed to disclose as experts. Plaintiffs may not use such witnesses to provide prohibited lay or expert opinions on these technical matters. See Hanger Prosthetics & Orthotics, Inc. v. Capstone Orthopedic, Inc., No. 2:06-cv-2879-GEB-KJM, 2008 U.S. Dist. LEXIS 91373, at *4-14 (E.D. Cal. June 13, 2008) (granting motion in limine to exclude witness under Rule 37 as not timely disclosed as an expert as required by Rule 26, where witness' testimony constituted expert testimony, not lay opinion). Oracle Employees. Plaintiffs should be precluded from introducing improper technical opinion testimony of Oracle employees not disclosed as experts, including Norm Ackermann, Uwe Koehler, Buffy Ransom, Jason Rice, Edward Screven, Greg Story and Dan Vardell. Plaintiffs and their experts have already purported to rely on technical analysis performed by - 12 DEFS.' MOTIONS IN LIMINE Case No. 07-CV-1658 PJH (EDL) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 these employees. For example, Plaintiffs' computer forensics expert, Kevin Mandia, relied on the opinions of multiple Oracle employees that certain computer code objects were "creative" or the "result of creative expression" under copyright law. See McDonell Decl. 16, Ex. N (5/12/10 Suppl. Expert Report of Kevin Mandia) at 112-113; 120-121. Additionally, Mandia relied on opinions by employees regarding whether certain releases of software products allegedly covered by copyright registrations included "all or virtually all" or "vast amounts" of the same code. Id. at 270 n.130; 280 n.139. And Plaintiffs previously submitted affidavits from two employees that contain improper opinions, regarding server logs, code comparisons and the creativity of certain software products. See D.I. 650 (Ackermann Decl.); D.I. 652 (Koehler Decl.). The employees who provided these opinions were never designated as experts in this case; yet, their opinions are not "rationally based on the perception of the witness," but are impermissibly "based on scientific, technical, or other specialized knowledge." The opinions that "virtually all" of a software product is found in another software product, that server logs demonstrate a certain level of website activity or that a code comparison demonstrates similarity between two pieces of source code all require "technical" analysis and other "specialized knowledge" about software. See, e.g., Hanger Prosthetics, 2008 U.S. Dist. LEXIS 91373 at *3, *8-9 (finding that a witness who performed a forensic analysis of a computer was not providing evidence of "matters he personally perceived," but rather expert opinion). For this reason, none of Plaintiffs' employees who testify should be permitted to testify regarding such improper lay opinions on these technical matters. See Informatica Corp. v. Business Objects Data Integration, Inc., No. C 02-03378 EDL, 2007 U.S. Dist. LEXIS 16247, at *9-10 (N.D. Cal. Feb. 23, 2007) (Laporte, J.) (cautioning that employees not designated as expert witnesses are not permitted to give expert testimony, including comparing newer and older versions of the software at issue). Former TomorrowNow Employee John Ritchie. John Ritchie was a developer at TomorrowNow and testified at deposition that he believed that his access to Plaintiffs' website with an automated downloading tool caused Plaintiffs' servers to reject his logon attempts or to disconnect his access.5 See McDonell Decl. 17, Ex. O (12/2/09 John Ritchie Deposition) at Plaintiffs relied on Ritchie's testimony in their Motion for Partial Summary Judgment, and Defendants objected on similar grounds. See D.I. 672 (Defs.' Obj. to Evid.) at 5-6. - 13 DEFS.' MOTIONS IN LIMINE Case No. 07-CV-1658 PJH (EDL) 5 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 169:5-170:7. Mandia relied on Ritchie's testimony to conclude that TomorrowNow had crashed Plaintiffs' website. See McDonell Decl. 18, Ex. P (5/21/10 Kevin Mandia Deposition) at 379:616; 383:16-384:22. Mandia specifically noted Ritchie's "experience" and "perspective" that Ritchie purportedly used to "diagnose" alleged website crashes. Id. The "diagnosis" of a website crash is the product of a "technical" analysis and "specialized knowledge," because, as Mandia himself acknowledged, Ritchie's opinions are purportedly based on 15 years of training in computer software development. Id; see also Hanger Prosthetics & Orthotics, Inc., 2008 U.S. Dist. LEXIS 91373 at *5 (finding expert testimony is that "which results from a process of reasoning which can be mastered only by specialists in the field," including computer forensic analysis). Moreover, the "diagnosis" of a website crash falls far outside the "prototypical" examples of opinions permitted by Rule 701. See Fed. R. Evid. 701 advisory committee's notes (2000) (listing "appearance of persons or things, identity, the manner of conduct, competency of a person, degrees of light or darkness, sound, size, weight, distance, and an endless number of items that cannot be described factually in words apart from inferences"). Because Ritchie was not properly disclosed as an expert, the Court should exclude evidence or testimony related to Ritchie's improper opinions on the technical question of the existence or cause of any purported crashes of Plaintiffs' websites. See Fed. R. Evid. 701; Fed. R. Civ. P. 37(c)(1). Stephen Neuendorf: Neuendorf is a certified function point specialist hired by Plaintiffs to perform function point analysis, a sophisticated process of estimating the size and complexity of computer software; as Pinto admitted in his deposition, such analysis must be done by a "trained individual." See McDonell Decl. 15, Ex. M (Pinto Tr.) at 51:6-52:16; 56:20-57:2. Because Pinto is not a certified function point specialist, Plaintiffs hired Neuendorf to rebut portions of Defendants' function point expert's report. See id. at 52:21-53:10. Although Neuendorf performed "technical analysis" requiring "specialized knowledge," Plaintiffs never disclosed Neuendorf as an expert, never provided an expert report and did not provide Defendants an opportunity to take Neuendorf's deposition. See Fed. R. Evid. 701; E.E.O.C. v. Lennar Homes of Ariz., CV-03-1827-PHX-DGC, 2006 U.S. Dist. LEXIS 42865, at *11-14 (D. Ariz. June 23, 2006) (excluding expert witness for failure to comply with the 26 disclosure requirements - 14 DEFS.' MOTIONS IN LIMINE Case No. 07-CV-1658 PJH (EDL) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 because opposing party was deprived of "the opportunity to depose, evaluate, and file motions" concerning the expert). Instead, Neuendorf performed the specialized function point analysis and Pinto adopted Neuendorf's opinions as his own. Defendants were not allowed to test the soundness of Neuendorf's approach or conclusions, because Pinto had no independent knowledge or understanding of them. Such conduct impermissibly evades the expert disclosure and reliability requirements of Rule 702. Cf. Fed. R. Evid. 701 advisory committee's notes (2000); see also In re: Imperial Credit Indus., Inc. Sec. Litig., 252 F. Supp. 2d. 1005, 1012-13 (C.D. Cal. 2003) (holding that the Federal Rules of Evidence "do not permit an expert to rely upon excerpts from opinions developed by another expert for purposes of litigation," and that one expert may not rely on the opinions of another expert that does not testify). The Court should preclude Plaintiffs from presenting Neuendorf as a witness and from admitting his opinions, as well as preclude Pinto from relying upon Neuendorf's opinion. See id.; Hanger Prosthetics & Orthotics, Inc., 2008 U.S. Dist. LEXIS 91373, at *8-14. VI. MOTION IN LIMINE NO. 6 TO EXCLUDE DEPOSITION TESTIMONY INVOKING THE ATTORNEY-CLIENT PRIVILEGE The Court should preclude Plaintiffs from offering any deposition testimony wherein Defendants' witnesses invoke the attorney-client privilege in response to a question. A. Material Facts During the discovery period, several of Defendants' witnesses who sat for deposition invoked the attorney-client privilege when asked about certain topics and events. Plaintiffs have now designated much of this testimony as part of their case-in-chief. B. Argument Rule 403 of the Federal Rules of Evidence ("Rule 403") states that evidence, although relevant, "may be excluded if its probative value is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or misleading the jury, or by considerations of undue delay, waste of time, or needless presentation of cumulative evidence." Fed. R. Evid. 403. Moreover, a number of federal courts have ruled it improper for parties to draw adverse inferences from their opponents' refusal to answer questions based on the attorney-client - 15 DEFS.' MOTIONS IN LIMINE Case No. 07-CV-1658 PJH (EDL) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 privilege. See Knorr-Bremse Systeme Fuer Nutzfahrzeuge GmbH v. Dana Corp., 383 F.3d 1337, 1344-45 (Fed. Cir. 2004); Nabisco, Inc. v. PF Brands, Inc., 191 F.3d 208, 225-26 (2d Cir. 1999), overruled on other grounds by Moseley v. Secret Catalogue, 537 U.S. 418 (2003); Parker v. Prudential Ins. Co. of Am., 900 F.2d 772, 775-76 (4th Cir. 1990). Such adverse inferences interfere with the attorney-client privilege, thus discouraging litigants from having frank discussions with their attorneys and more or less compelling litigants to reveal privileged information. See Knorr, 383 F.3d at 1344; THK Am., Inc. v. NSK, Ltd., 917 F. Supp. 563, 566-67 (N.D. Ill. 1996). With deposition designations of testimony where Defendants' witnesses invoke the attorney-client privilege in response to Plaintiffs' questions, Plaintiffs are clearly trying to force negative inferences against Defendants. These designations are highly improper and cannot be allowed. Doing so invades the attorney-client privilege and leads the jury to assume the witnesses are admitting to the substance of the Plaintiffs' questions. While Plaintiffs' questions may have some relevance, admitting them before the jury significantly prejudices Defendants because of the inferences they raise. The danger of this prejudice substantially outweighs the probative value of this testimony. It must be excluded. See Sharer v. Tandberg, Inc., No. 1:06cv-626, 2007 WL 983849, at *2 (E.D. Va. Mar. 27, 2007) (citing Rule 403 and Parker, excluding references to invocation of attorney-client privilege during deposition); McKesson Info. Solutions, Inc. v. Bridge Med., Inc., 434 F. Supp. 2d 810, 812 (E.D. Cal. 2006) (citing Knorr and concerns about negative inferences, excluding testimony that would inform jury that party asserted attorney-client privilege over patent opinion). For these reasons, the Court should exclude all deposition testimony where Defendants' witnesses invoke the attorney-client privilege. VII. MOTION IN LIMINE NO. 7 TO EXCLUDE EVIDENCE AND ARGUMENT REGARDING INVESTIGATIONS BY THE DOJ AND FBI The Court should preclude the parties from offering: (1) any and all references, questions, statements or proffers of evidence regarding the DOJ's and FBI's investigation into any of the facts and circumstances that are involved in this matter; (2) any and all references, questions, statements or proffers of evidence regarding the DOJ's and FBI's current investigation into - 16 DEFS.' MOTIONS IN LIMINE Case No. 07-CV-1658 PJH (EDL) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Oracle Corporation and (3) any and all references, questions, statements or proffers of evidence regarding any action(s), including, but not limited to, plea bargains and criminal/civil sanctions, stemming from the result of such investigations. A. 1. Material Facts There is an ongoing investigation by the DOJ/FBI into some facts and circumstances that are involved in this matter. 2. There is an ongoing investigation and current litigation by the DOJ/FBI over some of Oracle Corporation's licensing practices for its E-Business Suite software line. B. Argument Evidence of DOJ/FBI investigations and/or any resulting actions is not relevant under Rule 401 and therefore should be excluded under Rule 402 of the Federal Rules of Evidence ("Rule 401" and "Rule 402" respectively). See Fed. R. Evid. 401, 402. To determine whether references to a DOJ/FBI investigation, or any actions stemming from such an investigation, are relevant, the threshold question that must be answered is whether the fact that there is an investigation or action tends to make the existence of any fact that is of consequence to the determination of this case more probable or less probable than without this evidence. See Fed. R. Evid. 401; United States v. Curtain, 489 F.3d 935, 943 (9th Cir. 2007). Here, Plaintiffs' claims do not hinge on whether or not the DOJ or FBI investigated any of the facts and circumstances involved in this matter, and there is no element of any of Plaintiffs' causes of action that require proof of such an investigation. It is clear that any reference to the DOJ/FBI investigation or any action stemming from such an investigation would be offered for the mere conclusory allegation that implies that: "There is an investigation/action, so the party must have done something wrong." This sentiment is problematic for numerous reasons, not the least of which is that the investigation is probative only of the fact that these agencies wish to evaluate and assess information related to this matter and does not make it more probable that any of the alleged actions in this case, including claimed copyright violations, occurred. Further, any action arising for the DOJ/FBI investigations by itself has no relevance to this case without first showing that such an action ties to a specific material fact at issue here. - 17 DEFS.' MOTIONS IN LIMINE Case No. 07-CV-1658 PJH (EDL) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Pointing out to the jury that the DOJ/FBI is investigating the facts and circumstances at issue in this case, that the DOJ/FBI is currently investigating Oracle Corporation over licensing issues for its E-Business software line or that some action resulted from these investigations in no way assists the jury in determining its verdict. It would only serve to improperly influence and inflame the jury. See, e.g., Lewis v. Chicago Police Dept., 590 F.3d 427, 442 (7th Cir. 2009) (upholding a District Court's decision that evidence that provides only conclusory statements about an internal police department employment investigation is irrelevant); United States v. Moore, 936 F.2d 1508, 1521-22 (7th Cir. 1991) (upholding a District Court's decision to bar testimony regarding a local police department's preliminary investigation that resulted in the accused being released without charges even though he later faced federal charges stemming from that arrest); United States v. Smith, 199 Fed. App'x. 759, 761, 763-64 (11th Cir. 2006) (unpublished) (upholding a District Court's decision that a state prosecutor's decision not to prosecute the accused for violations of state law after he was arrested by local police was not relevant to whether the accused was guilty of the federal gun charges he faced even though the gun charge stemmed from the same arrest). Even if the Court determines there is some probative value in allowing evidence of these investigations, or references to any actions stemming from such investigations, this probative value is substantially outweighed by the danger of unfair prejudice to Defendants and Plaintiffs, and, therefore, should be excluded. See Fed. R. Evid. 403. It is well-established that admitting testimony regarding a government investigation may create such unfair prejudice. See, e.g., Beachy v. Boise Cascade Corp., 191 F.3d 1010, 1015 (9th Cir. 1999) (explaining how using a governmental agency's determination can create unfair prejudice because it could lead to the jury accepting the results of the investigation instead of undertaking an independent evaluation of the claims themselves). Moreover, excluding this type of testimony protects the fundamental fairness of a trial. See United States v. Bailleaux, 685 F.2d 1105, 1111 n.2 (9th Cir. 1982). Allowing Plaintiffs to refer to the investigation or any actions stemming from such investigation, either expressly or by implication, creates a very high risk that the jury will automatically assume that Defendants engaged in misconduct and assume that Plaintiffs' - 18 DEFS.' MOTIONS IN LIMINE Case No. 07-CV-1658 PJH (EDL) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 allegations are accurate without any proof related to the elements of Plaintiffs' claims. That would be fundamentally unfair and exactly what the rule is designed to protect against. Given the lack of probative value of the investigation itself, the risk of unfair prejudice is simply too great to allow this evidence. This same reasoning applies to the ongoing investigation and litigation concerning Oracle Corporation, and, requires the same conclusion. Likewise, references to either investigation will also confuse the jury and, therefore, should be excluded. See Fed. R. Evid. 403; see, e.g., Lewis, 590 F.3d at 442 (7th Cir. 2009) (affirming the District Court's decision to exclude evidence of prior investigations related to the same facts because the risk of confusing the jury as to their role in the current case). Similar to Lewis, the jury may incorrectly understand that the matters in this case have already been decided. See id. Given the minimal probative value of referring to either investigation, the risk of confusion also warrants exclusion of this evidence. VIII. MOTION IN LIMINE NO. 8 TO EXCLUDE EVIDENCE AND ARGUMENT REGARDING THE LEGALITY OF RIMINI STREET, INC.'S BUSINESS MODEL This Court should preclude Plaintiffs from offering any evidence concerning the legality of the business model of nonparty Rimini Street, Inc. ("Rimini Street"). A. 1. Material Facts Rimini Street is a third party support provider, providing many of the same support services, for the same Oracle software products that TomorrowNow provided when it was in business. See McDonell Decl. 20, Ex. Q (7/21/10 Seth Ravin Deposition ("7/21/10 Ravin Tr.")) at 332:3-339:13. 2. Rimini Street competes with Plaintiffs and SAP for support services customers, and competed with TomorrowNow when it was in business. Id. Many former TomorrowNow customers are now, or have been, Rimini Street customers. See McDonell Decl. 19-20 Ex. Q (7/21/10 Ravin Tr.) at 366:14-368:21; Ex. R (5/21/09 Seth Ravin Deposition ("5/21/09 Ravin Tr.")) at 252:22-257:14. 3. One of the disputed issues in this case is the extent to which alternatives to TN existed for customers who wished to cancel Plaintiffs' support services and go to a third party - 19 DEFS.' MOTIONS IN LIMINE Case No. 07-CV-1658 PJH (EDL) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 provider. Defendants contend that numerous alternatives existed, including Rimini Street and multiple other third party support providers. Plaintiffs contend there were no viable alternatives. The issue is relevant to causation of damages, i.e. whether, but for TN, customers would not have cancelled their support agreements with Plaintiffs. 4. Plaintiffs contend that Rimini Street should not be considered a viable alternative because Rimini Street's business model is unlawful. Plaintiffs have obtained discovery in this case regarding Rimini Street's business model and have also filed suit against Rimini Street in the District of Nevada. See McDonell Decl. 21-22, Ex. S (D.I. 1 in Oracle USA, Inc. v. SAP AG, et al., No. 2:09-cv-01591-KJD-GWF (D. Nev.)); Ex. T (D.I. 38 in Oracle USA, Inc. v. SAP AG, et al., No. 2:09-cv-01591-KJD-GWF (D. Nev.)). B. Argument Rule 403 states that evidence, although relevant, "may be excluded if its probative value is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or misleading the jury, or by considerations of undue delay, waste of time, or needless presentation of cumulative evidence." Fed. R. Evid. 403. The Ninth Circuit has upheld exclusion of evidence of collateral matters, similar events and other acts of alleged wrongdoing when its introduction would result in "a trial within a trial." See, e.g., United States v. Bussell, 414 F.3d 1048, 1059-60 (9th Cir. 2005); Tennison v. Circus Circus Enters., Inc., 244 F.3d 684, 690 (9th Cir. 2001). Allowing "mini-trials" on such matters can lead to confusion, delays in the proceedings and prejudice to the other party, outweighing any probative value the evidence may have. See id. If Plaintiffs are permitted to present evidence that Rimini Street's business model is unlawful, Defendants will have no choice but to defend Rimini Street in addition to themselves. See Nachtsheim v. Beech Aircraft Corp., 847 F.2d 1261, 1269 (7th Cir. 1988). That would require a substantial amount of additional evidence, much of it highly technical, consume a great deal of time and unnecessarily burden and confuse the jury. See id. ("[I]f the district court had permitted this evidence, the defendant would have had to defend ... not only against the present suit, but also against the St. Anne crash. The jury would be confronted with additional technical evidence on a collateral issue that would have unnecessarily prolonged the trial and created a risk - 20 DEFS.' MOTIONS IN LIMINE Case No. 07-CV-1658 PJH (EDL) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 of confusion of the issues."). Moreover, Defendants would be prejudiced by having to defend the business model of an unrelated nonparty, since Defendants have no knowledge of the details of Rimini Street's business model and the evidence required to defend against such a claim. Whether Rimini Street's business model is unlawful also has little or no relevance. It is undisputed that Rimini Street competed with TN for customers, continues to compete with Plaintiffs and has done so since 2006. See McDonell Decl. 19, Ex. Q (7/21/10 Ravin Tr.) at 332:3-339:13. This is sufficient to establish, for causation of damages purposes, that customers considered Rimini Street a viable alternative to TN. Plaintiffs' claim that Rimini Street operates unlawfully does not change that fact. Indeed, permitting evidence on the issue would merely open the door to additional evidence and argument as to whether any of the multiple other third party providers that competed with TN were operating lawfully. The jury in this case already will be required to consider an enormous amount of complex evidence. The difficulty of this task will be unnecessarily compounded if it is forced to also consider how a separate and unrelated nonparty conducts its own business. This, in addition to the undue prejudice, delay, and risk of confusion warrant exclusion under Rule 403. IX. MOTION IN LIMINE NO. 9 TO EXCLUDE EVIDENCE AND ARGUMENT REGARDING HYPERION, RETEK AND E-BUSINESS SUITE PRODUCT LINES The Court should preclude Plaintiffs from offering any evidence and argument regarding whether Defendants supported or proposed to support the Hyperion, Retek and E-Business Suite product lines ("HRE Products") owned by Plaintiffs. Plaintiffs explicitly agreed, through a joint scheduling order signed by this Court, that they would not pursue any claims re

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