Oracle Corporation et al v. SAP AG et al

Filing 791

Defendants' Oppositions to Plaintiffs' Motions in Limine filed by SAP AG, SAP America Inc, Tomorrownow Inc. Motion Hearing set for 9/30/2010 02:30 PM in Courtroom 3, 3rd Floor, Oakland. (Attachments: # 1 Proposed Order)(Froyd, Jane) (Filed on 8/19/2010) Modified on 8/20/2010 (vlk, COURT STAFF).

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Oracle Corporation et al v. SAP AG et al Doc. 791 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' OPPOSITIONS TO PLAINTIFFS' MOTIONS IN LIMINE Date: Time: Place: Judge: September 30, 2010 2:30 p.m. 3rd Floor, Courtroom 3 Hon. Phyllis J. Hamilton SVI-84026v1 DEFS.' OPPS. TO PLS.' 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 V. VI. VII. III. IV. II. I. TABLE OF CONTENTS Page OPPOSITION TO PLAINTIFFS' MOTIONS IN LIMINE NOS. 1 AND 2 "IMPLIED BUT UNPLED ADVICE OF COUNSEL DEFENSE" AND "SELECTIVE ATTORNEY/CLIENT COMMUNICATIONS"........................................ 1 A. Magistrate Judge Laporte Ruled Against Plaintiffs on This Very Issue................. 1 B. Defendants Are Not Relying on an Advice of Counsel Defense ............................ 1 C. Defendants Have Not Selectively Waived the Attorney-Client Privilege Regarding the Board Directive ............................................................................... 4 OPPOSITION TO PLAINTIFFS' MOTION IN LIMINE NO. 3 "CUSTOMER STATEMENTS IN AT RISK REPORTS"......................................................................... 7 A. The At Risk Report's Relevance............................................................................. 7 B. Customer Statements in the At Risk Report Are Adoptive Admissions................. 9 C. Customer Statements Reveal Existing State of Mind ........................................... 10 D. Meyer Relies on the At Risk Report ..................................................................... 10 E. Procedural Errors Also Justify Denying Motion in Limine No. 3 ........................ 11 OPPOSITION TO PLAINTIFFS' MOTION IN LIMINE NO. 4 "EVIDENCE OF SETTLEMENT DISCUSSIONS" .............................................................................. 11 OPPOSITION TO PLAINTIFFS' MOTION IN LIMINE NO. 5 "EVIDENCE NOT IN INTERROGATORY RESPONSES" ................................................................. 13 A. Evidence of License Agreements Should Not Be Excluded................................. 13 B. Evidence of Customer Credentials Used to Download Software and Support Materials Should Not Be Excluded ......................................................... 16 OPPOSITION TO PLAINTIFFS' MOTION IN LIMINE NO. 6 "HEARSAY CONCERNING LOCKHEED MARTIN" ....................................................................... 18 OPPOSITION TO PLAINTIFFS' MOTION IN LIMINE NO. 7 "EVIDENCE OF OTHER LITIGATION".............................................................................................. 22 OPPOSITION TO PLAINTIFFS' MOTION IN LIMINE NO. 8 "UNTIMELY DEPOSITION DESIGNATIONS" ................................................................................... 23 A. The Parties Intended to Permit Counter and Optional Completeness Designations Through the Court's August 5, 2010 Deadline ............................... 23 B. Plaintiffs' Questionable Designation Practice Created the Need for Defendants to Make Further Limited Designations .............................................. 24 -i- 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) Abbott Diabetes Care Inc. v. Roche Diagnostics Corp., No. C05-03117 MJJ, 2007 WL 4166030 (N.D. Cal. Nov. 19, 2007) ........................................ 12 Atkinson v. Kofoed, No. CIV S-06-2652 RRB EFB P, 2008 WL 508410 (E.D. Cal. Feb. 22, 2008)........................ 14 Baxter Healthcare Corp. v. Fresenius Med. Care Holding, No. C 07-1359 PJH (JL), 2008 U.S. Dist. LEXIS 104329 (N.D. Cal. Dec. 15, 2008).............. 14 BoDeans Cone Co., L.L.C. v. Norse Dairy Sys., L.L.C., 678 F. Supp. 2d 883 (N.D. Iowa 2009)...................................................................................... 11 Bourne v. Walt Disney Co., 68 F.3d 621 (2d Cir. 1995)......................................................................................................... 16 Bradbury v. Phillips Petroleum Co., 815 F.2d 1356 (10th Cir. 1987).................................................................................................. 13 Brown v. Chertoff, No. 406CV002, 2009 U.S. Dist. LEXIS 691 (S.D. Ga. Jan. 6, 2009) ....................................... 16 C & E Servs., Inc. v. Ashland Inc., 539 F. Supp. 2d 316 (D.D.C. 2008) ........................................................................................... 18 Callahan v. A.E.V., Inc., 182 F.3d 237 (3d Cir. 1999)....................................................................................................... 10 Cambridge Elecs. Corp. v. MGA Elecs., Inc., 227 F.R.D. 313 (C.D. Cal. 2004) ............................................................................................... 15 Cazares v. Pacific Shore Funding, No. CV04-2548DSF(SSX), 2006 WL 149106 (C.D. Cal. Jan. 3, 2006) ................................... 13 Chevron Corp. v. Pennzoil Co., 974 F.2d 1156 (9th Cir. 1992)...................................................................................................... 2 CIT Group/Equip. Fin., Inc. v. Taylor, No. C-91-1848 SBA (PJH), 1991 U.S. Dist. LEXIS 18171 (N.D. Cal. Dec. 16, 1991)............ 12 Columbia Pictures Television, Inc. v. Krypton Broad. of Birmingham, Inc., 259 F.3d 1186 (9th Cir. 2001)...................................................................................................... 4 Compana, LLC v. Aetna, Inc., No. C05-0277RSL, 2006 WL 1319456 (W.D. Wash. May 12, 2006) ...................................... 14 Cox v. Administrator U.S. Steel & Carnegie, 17 F.3d 1386 (11th Cir. 1994)...................................................................................................... 4 Dodson v. Morgan Stanley DW, Inc., Case No. C 06-5669 RJB, 2007 U.S. Dist. LEXIS 85535 (W.D. Wash. Nov. 8, 2007)............ 15 Dong Ah Tire & Rubber Co. v. Glasforms, Inc., No. C 06-3359 JF (RS), 2008 U.S. Dist. LEXIS 90708 (N.D. Cal. Oct. 29, 2008)............. 14, 15 Edwards v. GuideOne Mut. Ins. Co., No. 4:09cv35-HTW-LRA, 2010 WL 1416471 (S.D. Miss. Apr. 7, 2010) ................................ 22 Genentech, Inc. v. Insmed Inc., 236 F.R.D. 466 (N.D. Cal. 2006)................................................................................................. 4 - ii - 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 TABLE OF AUTHORITIES (continued) Page(s) Hearn v. Rhay, 68 F.R.D. 574 (E.D. Wash. 1975)............................................................................................ 2, 6 Hsieh v. Peake, No. C 06-5281 PJH, 2008 U.S. Dist. LEXIS 23649 (N.D. Cal. Mar. 25, 2008) ....................... 21 In re Bay Area Material Handling, Inc., No. 94-15815, 1996 WL 29262 (9th Cir. Jan. 25, 1996) ........................................................... 12 In re Wells Fargo Residential Mortgage Lending Discrimination Litig., No. C 08-1930 MMC (JL), 2009 WL 1578920 (N.D. Cal. June 4, 2009)................................... 6 Insurance Co. of the State of Penn. v. City of San Diego, No. 02cv693 BEN (CAB), 2008 WL 926558 (S.D. Cal. Apr. 4, 2008) ...................................... 4 Iskander v. Rodeo Sanitary Dist., No. 95-16914, 1997 WL 469636 (9th Cir. Aug. 18, 1997) ....................................................... 12 Itron, Inc. v. Benghiat, No. Civ.99-501 (JRT/FLN), 2003 WL 22037710 (D. Minn. Aug. 29, 2003) ........................... 13 Knight v. Deere & Co., No. 2:08-cv-01903-GEB-EFB, 2010 U.S. Dist. LEXIS 56736 (E.D. Cal. May 11, 2010) ....... 17 Laser Indus., Ltd. v. Reliant Tech., Inc., 167 F.R.D. 417 (N.D. Cal. 1996)................................................................................................. 6 Licciardi v. TIG Ins. Group, 140 F.3d 357 (1st Cir. 1998) ...................................................................................................... 15 Mannick v. Kaiser Found. Health Plan, Inc., No. C 03-5905 PJH, 2006 U.S. Dist. LEXIS 38430 (N.D. Cal. June 9, 2006).......................... 21 Mastec N. Am., Inc. v. Coos County, No. 04-278-AA, 2007 WL 2027011 (D. Or. July 6, 2007)........................................................ 12 Metro-Goldwyn-Mayer Studios, Inc. v. Grokster, Ltd., 454 F. Supp. 2d 966 (C.D. Cal. 2006) ....................................................................................... 10 Meyer v. Christie, No. 07-2230-CM, 2009 WL 4782118 (D. Kan. Dec. 8, 2009) .................................................. 22 Nationwide Life Ins. Co. v. Richards, 541 F.3d 903 (9th Cir. 2008)...................................................................................................... 18 Quiksilver, Inc. v. Kymsta Corp., 247 F.R.D. 579 (C.D. Cal. 2007) ................................................................................................. 4 Rano v. Sipa Press, Inc., 987 F.2d 580 (9th Cir. 1993)...................................................................................................... 16 Realnetworks, Inc. v. DVD Copy Control Ass'n, 641 F. Supp. 2d 913 (N.D. Cal. 2009) ....................................................................................... 16 Rhoades v. Avon Prods., 504 F.3d 1151 (9th Cir. 2007).................................................................................................... 12 Sasser v. Amen, No. C 99-3604 SI, 2001 WL 764953 (N.D. Cal. July 2, 2001) ................................................... 6 - 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 TABLE OF AUTHORITIES (continued) Page(s) Sea-Land Serv., Inc. v. Lozen Int'l, LLC, 285 F.3d 808 (9th Cir. 2002)................................................................................................ 10, 19 Smith v. Genstar Capital LLC, No. C 01-3936MMC, 2001 WL 1658315 (N.D. Cal. Dec. 20, 2001) ....................................... 13 Sulit v. Slep-Tone Entm't, No. C06-00045 MJJ, 2007 WL 4169762 (N.D. Cal. Nov. 20, 2007) ........................................ 12 Tracinda Corp. v. Daimler-Chrysler AG, 362 F. Supp. 2d 487 (D. Del. 2005)........................................................................................... 10 United States v. Demopoulos, 506 F.2d 1171 (7th Cir. 1974).................................................................................................... 20 United States v. Harris, 942 F.2d 1125 (7th Cir. 1991).............................................................................................. 19, 21 United States v. Hatcher, 496 F.2d 529 (9th Cir. 1974)...................................................................................................... 20 United States v. Morgan, 385 F.3d 196 (2d Cir. 2004)....................................................................................................... 21 Vinieris v. Byzantine Maritime Corp., 731 F.2d 1061 (2d Cir. 1984)..................................................................................................... 19 Walker & Zanger, Inc. v. Paragon Indus., No. C-04-1946 VRW (JCS), 2006 WL 1581969 (N.D. Cal. June 6, 2006) .............................. 14 Williamson v. Cook Composites and Polymers Co., No. CV 08-8069 AHM (VBKx), 2009 U.S. Dist. LEXIS 120457 (C.D. Cal. Dec. 7, 2009) .... 20 Yeti by Molly Ltd. v. Deckers Outdoor Corp., 259 F.3d 1101 (9th Cir. 2001).................................................................................................... 15 Rules Fed. R. Civ. P. 26 ............................................................................................................... 14, 15, 16 Fed. R. Civ. P. 30 ............................................................................................................................. 5 Fed. R. Civ. P. 32 ........................................................................................................................... 19 Fed. R. Civ. P. 37 ......................................................................................................... 13, 14, 16, 21 Fed. R. Evid. 401 ........................................................................................................................... 20 Fed. R. Evid. 403 ........................................................................................................................... 21 Fed. R. Evid. 408 ............................................................................................................... 11, 12, 13 Fed. R. Evid. 703 ....................................................................................................................... 9, 11 Fed. R. Evid. 705 ..................................................................................................................... 10, 11 Fed. R. Evid. 801 ................................................................................................................. 9, 11, 19 Fed. R. Evid. 803.......................................................................................................... 10, 11, 18, 19 Fed. R. Evid. 804 ........................................................................................................................... 18 Fed. R. Evid. 807 ........................................................................................................... 7, 11, 18, 20 - iv - 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. OPPOSITION TO PLAINTIFFS' MOTIONS IN LIMINE NOS. 1 AND 2 "IMPLIED BUT UNPLED ADVICE OF COUNSEL DEFENSE" AND "SELECTIVE ATTORNEY/CLIENT COMMUNICATIONS" The Court should deny Plaintiffs' Motions in Limine Nos. 1 and 2 because both simply rehash the same "sword and shield" arguments that were defeated on August 28, 2008 when Magistrate Judge Laporte denied Plaintiffs' motion to compel similar privileged documents. See D.I. 136 (Pls.' Mot. to Compel Production of Clawed Back Documents); D.I. 170 (Order Granting in Part Pls.' Mot. to Compel Production of Clawed Back Documents) at 2:11-23. These motions are an attempted end run around Magistrate Judge Laporte's previous order. A. Magistrate Judge Laporte Ruled Against Plaintiffs on This Very Issue. In their Motions in Limine Nos. 1 and 2, Plaintiffs recycle defeated arguments to claim that Defendants are improperly using the attorney-client privilege as both a sword and a shield with respect to the legality of TomorrowNow, Inc.'s ("TN") business model and a directive issued by the SAP AG Executive Board (the "Board Directive"). However, just as before, Defendants have asserted the attorney-client privilege only as a shield and not as a sword. Defendants repeat the same representation they made two years ago: Defendants will not affirmatively use the advice of counsel as a defense or justification for any of their actions related to this lawsuit. See D.I. 151 (Defs.' Opp. to Pls.' Mot. to Compel Clawed Back Documents) at 3:8-10, 9:12-14, 14:15-19. All of the documents and testimony Plaintiffs cite as examples of Defendants' alleged selective attorney-client privilege waiver are simply non-privileged data and testimony that Defendants produced in response to Plaintiffs' numerous discovery requests, and are akin to the data and testimony on which Magistrate Judge Laporte previously ruled. See D.I. 170 (Order Granting in Part Pls.' Mot. to Compel Production of Clawed Back Documents). Defendants' production of that data and testimony does not represent an affirmative act by Defendants to put the substance of their attorneys' advice into play in this lawsuit. In fact, as Plaintiffs themselves acknowledge in their motions, Defendants have never put forward any sort of advice of counsel defense in any pleading in this case. B. Defendants Are Not Relying on an Advice of Counsel Defense. Plaintiffs claim that Defendants selectively waived the attorney-client privilege "through SVI-84026v1 -1- DEFS.' OPPS. TO PLS.' 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 documents and testimony that imply favorable legal advice" regarding the legality of TN's business model. D.I. 737 (Pls.' Mots. in Limine) at 3 (emphasis added). Even though the premise of Plaintiffs' argument rests solely on an implication they themselves create, Plaintiffs seek to exclude certain documents and testimony on the grounds that Defendants have not pled advice of counsel as an affirmative defense and instead allegedly are using the attorney-client privilege as both a sword and a shield. Plaintiffs assert that Defendants introduced favorable information relating to legal advice regarding TN's business model but claimed attorney-client privilege and refused to allow cross-examination regarding the substance of that advice. "The privilege which protects attorney-client communications may not be used as both a sword and a shield." Chevron Corp. v. Pennzoil Co., 974 F.2d 1156, 1162 (9th Cir. 1992). The test set forth in Hearn v. Rhay is widely used to evaluate whether a litigant impliedly waived the attorney-client privilege through his or her own affirmative conduct. 68 F.R.D. 574, 581 (E.D. Wash. 1975). The factors considered are: "(1) assertion of the privilege was a result of some affirmative act, such as filing suit, by the asserting party; (2) through this affirmative act, the asserting party put the protected information at issue by making it relevant to the case; and (3) application of the privilege would have denied the opposing party access to information vital to his defense." Id. (emphasis added). Plaintiffs contend that Defendants "waived" or "disclosed" privileged information, but the only disclosures to which they point are the same type of non-privileged information that is routinely disclosed on a privilege log without waiving privilege (e.g., the parties and persons involved, dates, general descriptions regarding nature of advice, etc.). As a result, the documents and testimony Defendants produced are not privileged. Prior to production, Defendants reviewed the documents and determined there was no privileged basis for withholding the documents or unredacted portions thereof. Likewise, the deposition transcripts attached to Plaintiffs' motion show Defendants' counsel's close supervision in real time during the depositions to serve as a gatekeeper, permitting testimony regarding non-privileged matters and providing the witnesses instructions not to testify in a manner that would reveal privileged information. With regard to the specific documents and testimony at issue in Plaintiffs' motion, SVI-84026v1 -2- DEFS.' OPPS. TO PLS.' 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 Plaintiffs first seek to exclude a risk report prepared by Luka Mucic, a non-lawyer employee of SAP AG, containing analysis and conclusions about TN from Arlen Shenkman, a non-lawyer employee of SAP America. See D.I. 738-4 (Ex. D to the Declaration of Thomas S. Hixson in Support of Pls.' Mot. in Limine ("Hixson Decl.")). On its face, this document is a business risk assessment and does not contain legal advice. Defendants produced this document because it was responsive to Plaintiffs' requests, and it is not privileged. Plaintiffs also seek to exclude e-mails sent by TN account executives Spencer Phillips and Eric Osterloh to customers, which state that SAP's attorneys concluded TN's business model was legal, but do not provide the substance or details of any advice sought or received from counsel. See D.I. 738-12 and 738-14 (Exs. L and N to Hixson Decl.). These non-privileged e-mails were between TN employees and third parties and were produced in response to Plaintiffs' discovery requests. Similarly, Plaintiffs seek to exclude an article posted on <eweek.com> where a nonSAP employee discusses the legality of TN's business model. See D.I. 738-15 (Ex. O to Hixson Decl.). Plaintiffs introduced this non-privileged, publicly available document as a deposition exhibit at Seth Ravin's first deposition in 2009. See Declaration of Tharan Gregory Lanier ("Lanier Decl.") 1, Ex. 1 (5/21/09 Ravin Tr.) at 172:18-173:4. Plaintiffs provide no example of Defendants' affirmative assertions of any defenses or justifications in this case of TN's business model by using their attorneys' advice. As indicated in the deposition transcripts attached to Plaintiffs' motions in limine, Defendants and their witnesses properly invoked the attorney-client privilege when Plaintiffs asked them questions seeking revelation of discussions regarding legal advice sought or received from counsel. It is Plaintiffs, through their incessant questioning into matters they clearly know are privileged, who have attempted to inject into this case the substance of legal advice sought or received from Defendants' counsel. And to the extent that Plaintiffs have learned collateral, nonprivileged information regarding advice sought or received by Defendants, it is simply the result of Plaintiffs' affirmative acts and tireless probing that continue to knock at and around the privilege door so that Plaintiffs can gain as much information in discovery as they can. Although Plaintiffs have thoroughly circled the outside perimeters of Defendants' privileged information, SVI-84026v1 -3- DEFS.' OPPS. TO PLS.' 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 Defendants have remained steadfast in maintaining the integrity of the privilege.1 The cases on which Plaintiffs rely are easily distinguishable. The only similarity between Columbia Pictures Television, Inc. v. Krypton Broad. of Birmingham, Inc., 259 F.3d 1186 (9th Cir. 2001) and this case is that Columbia involved allegations of copyright infringement. In that case, however, the defendant argued that he continued his infringing activities on the advice of his attorney. Defendants have not made and will not make that argument. In Cox v. Administrator U.S. Steel & Carnegie, 17 F.3d 1386 (11th Cir. 1994), one of the defendants argued in pleadings, including a motion to dismiss, that it believed in the legality of the policies that were disputed in the lawsuit, affirmatively placing its attorneys' advice at issue. Defendants have not put forth that argument in any of their pleadings filed with this Court. Moreover, Plaintiffs even make the selfdefeating admission that Defendants have never pled an advice-of-counsel affirmative defense. See D.I. 737 (Pls.' Mot. in Limine) at 4. C. Defendants Have Not Selectively Waived the Attorney-Client Privilege Regarding the Board Directive. Plaintiffs' Motion in Limine No. 2 fails for the same reasons as their Motion in Limine No. 1. The only instances Plaintiffs cite in support of their "sword" assertion are Defendants' production of non-privileged documents and testimony in response to Plaintiffs' discovery requests, which, as a matter of law, are not affirmative acts by Defendants. See Insurance Co. of the State of Penn. v. City of San Diego, No. 02cv693 BEN (CAB), 2008 WL 926558, at *2 (S.D. Cal. Apr. 4, 2008) (holding no waiver of attorney-client privilege in insurance dispute, where defendant's produced documents showed attorney involvement in lawsuit investigation); Quiksilver, Inc. v. Kymsta Corp., 247 F.R.D. 579, 583-84 (C.D. Cal. 2007) (holding no waiver of attorney-client privilege in trademark dispute, where deponent testified that counsel provided legal advice regarding a marketing campaign without providing information on substance of that advice); Genentech, Inc. v. Insmed Inc., 236 F.R.D. 466, 469 (N.D. Cal. 2006) (holding no waiver In their deposition designations, Defendants designated testimony in which Plaintiffs asked Defendants' witnesses questions about legal advice and the witnesses then invoked the attorney-client privilege. These designations were appropriately qualified in the preamble cover filing that attached Defendants' designations and are simply included as context for the parties and the Court to use to the extent that Plaintiffs challenge Defendants' privilege assertions. SVI-84026v1 1 -4- DEFS.' OPPS. TO PLS.' 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 attorney-client privilege in patent dispute, where deponent testified that counsel provided legal advice regarding patent without providing information on substance of that advice). Throughout this litigation, Plaintiffs served several interrogatory requests and requests for production, seeking documents and information regarding the steps Defendants took to protect Plaintiffs' intellectual property.2 One step was a directive issued by the SAP AG executive board to TN, ordering TN to remove all local customer environments from its systems. Like the Rules of Engagement document (which was the subject of Magistrate Judge Laporte's August 2008 ruling), the Board Directive was an SAP business decision. See Lanier Decl. 2, Ex. 2 (9/26/08 Kagermann Tr.) at 341:5-342:7. Chris Faye, an SAP employee and in-house lawyer, notified TN of the Board Directive. See Lanier Decl. 3, Ex. 3 (10/22/08 Faye Tr.) at 64:11-65:21. The existence, content and facts surrounding communication of the Board Directive--information that Defendants produced--are not privileged. The legal advice that SAP AG's executive board sought regarding that decision is privileged, and Defendants properly withheld that information. Plaintiffs depict the depositions of Faye and Tim Crean (also an SAP employee and inhouse lawyer), both of whom provided legal advice regarding the Board Directive, as attempts by Defendants to inject SAP's attorneys' advice into this lawsuit. Plaintiffs noticed and took those depositions presumably because they knew from the non-privileged information Defendants produced that both witnesses could give relevant, non-privileged testimony. See Lanier Decl. 4-6, Ex. 4 (8/25/08 Amended Notice of Deposition of Christopher Faye); Ex. 5 (1/7/09 Amended Notice of Deposition of Tim Crean); Ex. 6 (2/25/09 Amended Notice of Deposition of SAP AG and SAP America Pursuant to Fed. R. Civ. P. 30(b)(6) re: Project Blue). Defendants designated Faye as SAP's Rule 30(b)(6) fact witness on the subject of the Board Directive and Project Blue (TN's name for the project to implement the Board's directive), primarily because Faye is the SAP employee with the most personal knowledge regarding the non-privileged information responsive to Plaintiffs' deposition notice. Regardless, responding to a deposition notice and/or designating an individual--even a lawyer--as a Rule 30(b)(6) witness do not See, e.g., Lanier Decl. 7-8, Ex. 7 (7/28/08 Pls.' 2nd Set of Reqs. for Prod. of Documents to Defs., Req. No. 1); Ex. 8 (7/28/08 Pl. Oracle Corp.'s 3rd Set of Interrogatories to TN and 2nd Set of Interrogatories to Defs. SAP AG and SAP America, Interrogatory No. 4). SVI-84026v1 2 -5- DEFS.' OPPS. TO PLS.' 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 constitute affirmative acts by Defendants under the test set forth in Hearn v. Rhay. That Faye and Crean are in-house attorneys at SAP does not advance Plaintiffs' argument. The Board Directive was a business decision on which some in-house attorneys provided advice. In-house attorneys frequently provide advice on their company's business decisions, a fact Magistrate Judge Laporte noted during the hearing on Plaintiffs' previous motion to compel production of Defendants' privileged documents related to the Rules of Engagement (SAP rules regarding working with TN). See Lanier Decl. 9, Ex. 9 (D.I. 176, 8/28/08 Hrg. Tr.) at 71:4-10; cf. In re Wells Fargo Residential Mortgage Lending Discrimination Litig., No. C 08-1930 MMC (JL), 2009 WL 1578920, at *3 (N.D. Cal. June 4, 2009) (holding no waiver of attorney-client privilege when bank relied on fair lending procedure documents as affirmative defense even though documents were drafted with assistance of counsel). Were disclosure of business advice or the general fact that Defendants sought and received legal advice (without, of course, revealing the subject of that legal advice) enough to force a waiver of the attorney-client privilege whenever the business purposes of a particular decision came into question during litigation or other legal proceedings, this would unreasonably constrain corporate rule-making and self-policing. Defendants also have neither revealed the substance of Faye and Crean's advice about the Board Directive nor argued that Defendants' reliance in good faith on that advice is a defense to Plaintiffs' claims in this case. See, e.g., Sasser v. Amen, No. C 99-3604 SI, 2001 WL 764953, at *3-4 (N.D. Cal. July 2, 2001) (holding no waiver of attorney-client privilege concerning production of letter containing legal advice where defendant never made any legality or good faith arguments based on contents of letter); Laser Indus., Ltd. v. Reliant Tech., Inc., 167 F.R.D. 417, 446 (N.D. Cal. 1996) (finding waiver of attorney-client privilege unlikely where statements allegedly effecting a waiver do not disclose contents of a specific communication between client and attorney). Both witnesses simply offered their recollection of the events surrounding the Board Directive and, following Defendants' counsels' timely and proper instructions at their depositions, either refused to answer or otherwise limited their answers when Plaintiffs' questions would have required them to disclose privileged information. Because Defendants are not offering their attorneys' advice on the Board Directive as a defense to their conduct related to this SVI-84026v1 -6- DEFS.' OPPS. TO PLS.' 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 lawsuit, Defendants' counsels' instructions and Faye's and Crean's corresponding refusal to answer or limiting of their answers on the basis of the attorney-client privilege were proper. No waiver occurred, no sword has been wielded, and the privilege has remained a shield. II. OPPOSITION TO PLAINTIFFS' MOTION IN LIMINE NO. 3 "CUSTOMER STATEMENTS IN AT RISK REPORTS" The Court should deny Plaintiffs' Motion in Limine No. 3 for four reasons: (1) Plaintiffs' assertions, in open court and through their damages expert Paul C. Meyer, confirm the probative value of the At Risk report; (2) the customer statements are adoptive admissions and not hearsay; (3) the statements are offered for other non-hearsay purposes including the customer's state of mind, notice and in support of Defendants' mitigation of damages defense; and (4) Meyer relied on the At Risk report, and thus, it is admissible to explore the bases of his opinions. A. The At Risk Report's Relevance. A customer's reasons for not renewing support contracts with Plaintiffs are central to this case. Specifically, Plaintiffs claim that TN's customers would have continued to purchase Oracle support services had TN not existed, while Defendants claim that a large percentage of those customers would have left Oracle even had TN not existed. The At Risk report, a report of information regarding customers "at risk" of not renewing Oracle support services, is the single most comprehensive compilation of customers' reasons for leaving Oracle. Given that there are 358 customers at issue, the parties' ability to rely on this compilation is particularly important. The At Risk report should be admitted in its entirety because of its probative value. See Fed. R. Evid. 807 (statement is admissible if "the statement is more probative on the point for which it is offered than any other evidence which the proponent can procure through reasonable efforts"). Plaintiffs' attorneys confirmed the probative value of the At Risk report early in this case, initially arguing that it was so great that Defendants' damages discovery should be limited. See Lanier Decl. 10, Ex. 10 (2/13/08 Hearing Transcript) at 153:22-154:11 ("[T]he notion that we need to go any farther afield than this incredibly detailed document . . . is highly premature."). Plaintiffs' attorney further explained: MS. HOUSE: Moreover, I think it is very important that you understand that one SVI-84026v1 -7- DEFS.' OPPS. TO PLS.' 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 the key documents that we're going to be producing--we call it internally, or Oracle calls it internally, an "at-risk report." . . . [I]t is actually a vibrant electronic . . . document that is sort of a historical compilation of all of the losses to third parties . . . has detailed notes about every single one of those customers that was lost, and what was the perception about why they were lost . . . JUDGE LEGGE: What is it called? MS HOUSE: Third-party risk analysis. And this is a document that is not specific to the 69 customers; has enormous detail about all customers lost to all third parties. This is a gift. . . . This is something that is an internal Oracle document, that is goes a very long way in compiling, and in one unit . . . the various customers that were actually in play; what happened to them; what kind of financial losses on a oneyear period were associated with those customers. Lanier Decl. 10, Ex. 10 (2/13/08 Hrg. Tr.) at 152:24-154:3. One month later, Plaintiffs again went to great lengths to explain the probative value of the At Risk report in an effort to limit other discovery: JUDGE LEGGE: Define it for me, would you? MR. HOWARD: It's a compilation, Oracle's compilation of all of the different reasons that customers give for leaving Oracle when they go to TomorrowNow or other third-party support providers, and that's not limited to the 69. It's all of the information that Oracle has in that form relating to those customers. . . JUDGE LEGGE: That's pretty darn comprehensive. MR. HOWARD: It is very comprehensive. Lanier Decl. 11, Ex. 11 (3/4/08 Hrg. Tr.) at 105:13-24. Plaintiffs' damages expert agreed that the report is relevant and probative. In his report, Meyer wrote, "Oracle established a formal `At Risk' reporting process for sales personnel to report support renewal customers that they felt were `at risk'" of not renewing" (emphasis added). Lanier Decl. 12, Ex. 12 (Meyer Report) 88. Additionally, he relied upon the At Risk report-- without any qualification about the customer statements--to form his opinions. Id. 381 ("Where applicable, the results of my analysis were compared, by customer, to Oracle or PeopleSoft contemporaneous reports of support renewals lost or at risk of being lost ("At Risk" reports).") Thus, Meyer's reliance upon the document confirms its probative value and SVI-84026v1 DEFS.' OPPS. TO PLS.' MOTIONS IN LIMINE Case No. 07-CV-1658 PJH (EDL) -8- 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 admissibility under Rule 703 of the Federal Rules of Evidence. Indeed, even in their motion, Plaintiffs effectively acknowledge the indicia of reliability of the report, including the customer statements within the report. See D.I. 737 (Pls.' Mots. in Limine) at 14 (At Risk report designed and maintained by Oracle's Director of North American Support Sales, "updated and modified over time," and "distributed internally within Oracle"). B. Customer Statements in the At Risk Report Are Adoptive Admissions. Plaintiffs have "manifested an adoption or belief in [the] truth" of the customer statements in the At Risk report; thus, they are adoptive admissions. See Fed. R. Evid. 801(d)(2)(B). For example, when the creator of the report (Rick Cummins, Oracle's Director of North American Support Sales) was asked about the very type of statement that Plaintiffs now seek to exclude (an email sent from a customer in the notes section of the At Risk report, (Lanier Decl. 13, Ex. 13 (Defs.' Ex. 311)), he testified that he relied upon the customer statements. See Lanier Decl. 14, Ex. 14 (4/21/09 Cummins Tr.) at 234:1-15 ("Q. And you relied on that for keeping track of customers that were at risk of cancelling support. A. Yes.").3 Cummins also confirmed that the notes section was a critical part of the report. See Lanier Decl. 15, Ex. 15 (9/16/08 Cummins Tr.) at 225:2-4 ("I was most reliant on the notes column."). Indeed, support sales representatives were warned that "[t]his data is provided to Oracle executives and needs to be accurately, succinctly, and regularly updated." Lanier Decl. 15-16, Ex. 16 (Defs.' Ex. 217) at ORCL00130710; Ex. 15 (9/16/08 Cummins Tr.) at 216:13-23. Indeed, a multitude of documents confirm Oracle's routine use and reliance upon the customer statements.4 Plaintiffs argue that an email from Cummins to Robert Lachs shows that "[s]ometimes customers gave inaccurate information to Oracle. . . ." D.I. 737 (Pls.' Mots. in Limine) at 15 (citing D.I. 738-26 (Ex. Z to the Hixson Decl.)). This document actually confirms that Oracle made sure that it accurately updated the At Risk report. See D.I. 738-26 (Ex. Z to the Hixson Decl.) (Cummins requested that "`at risk' is updated appropriately to reflect this one this week"). 4 Information in the At Risk report, including customer statements, was regularly distributed within Oracle in native form, (Lanier Decl. 17-18, Ex. 17 (Defs.' Ex. 61) ("Attached is the latest third party risk analysis."); Ex. 18 (Defs. Dep. Ex. 58) (same)) and as portions adopted and incorporated into emails, reports and presentations. See Lanier Decl. 15, 19-23, Ex. 15 (9/16/08 Cummins Tr.) at 212:4-213:25 (stating that At Risk report used for information in updates regularly sent to Juergen Rottler); Ex. 19 (9/23/08 Cummins Tr.) at 316:19-317:8 (stating that Cummins sent out At Risk report monthly); Ex. 20 (Defs.' Ex. 299) at ORCL00188697 (incorporating and adopting part of At Risk report in PeopleSoft and Siebel Q207 YTD Cancellation Review); Ex. 21 (Defs.' Ex. 334) at ORCL00131374 (incorporating and adopting "Notes" section of At Risk report in North America Support Review); Ex. 22 (Defs.' Ex. SVI-84026v1 3 -9- DEFS.' OPPS. TO PLS.' 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's routine use of and reliance upon the customer statements far exceed the use and reliance other courts have held "manifest[] an adoption or belief in [the] truth" of a statement. Metro-Goldwyn-Mayer Studios, Inc. v. Grokster, Ltd., 454 F. Supp. 2d 966, 973 (C.D. Cal. 2006) ("To the extent other content is incorporated into these emails, and to the extent [Plaintiffs'] agent[s] express[] approval thereof, the incorporated content is admissible as vicarious adoptions."); see also Sea-Land Serv., Inc. v. Lozen Int'l, LLC, 285 F.3d 808, 821 (9th Cir. 2002) (forwarding memo written by another employee to opposing party "manifested an adoption" of its truth); Tracinda Corp. v. Daimler-Chrysler AG, 362 F. Supp. 2d 487, 500 (D. Del. 2005) ("An adoptive admission can be found in the circumstances where a party forwards a document to another in response to a request for information contained in the document."). C. Customer Statements Reveal Existing State of Mind. The customer statements reveal Oracle's customers' then existing mental condition. See Fed. R. Evid. 803(3). The statements may be admitted to show customer motive, opportunity and intent to terminate Oracle support services for reasons other than TN. See Callahan v. A.E.V., Inc., 182 F.3d 237, 252 (3d Cir. 1999) (reversing district court and concluding "statements of a customer as to his reasons for not dealing with a supplier are admissible for this limited purpose, i.e., the purpose of proving customer motive") (citation omitted).5 D. Meyer Relies on the At Risk Report. The At Risk report is admissible under Rule 705 of the Federal Rules of Evidence to explore the underlying facts and data relied upon by Plaintiffs' damages expert Meyer. See Lanier Decl. 12, Ex. 12 (Meyer Report) at 381. Defendants can introduce the entire At Risk report to explore the basis of his opinions. See Fed. R. Evid. 705. (continued...) 309) at ORCL00126452 (incorporating and adopting portions of At Risk report in email about "notable PSFT cancellations"); Ex. 23 (Defs.' Ex. 214) (incorporating and adopting sections of At Risk report in email about customer calls). In fact, Oracle personnel made "[p]roactive customer visits to key customers identified `At Risk.'" Lanier Decl. 24, Ex. 24 (Defs.' Ex. 63) at ORCL00088229. Similarly, the customer statements may be admitted to show Oracle notice of its malcontented customers and, correspondingly, on the need to take steps to mitigate its damages. SVI-84026v1 5 - 10 - DEFS.' OPPS. TO PLS.' 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 In sum, the customer statements are admissible under Rules 703, 705, 801(d)(2), 803(3), and 807 of the Federal Rules of Evidence because they are reliable and accurate recordings of Oracle's customer's then existing mental conditions. Cf., e.g., BoDeans Cone Co., L.L.C. v. Norse Dairy Sys., L.L.C., 678 F. Supp. 2d 883, 906-07 (N.D. Iowa 2009) (rejecting argument to exclude "double hearsay" customer statements in a business record because of Rules 801(d), 803(3), 803(6) and 807 of the Federal Rules of Evidence).6 E. Procedural Errors Also Justify Denying Motion in Limine No. 3. Plaintiffs' motion should also be denied for procedural reasons. Plaintiffs have not provided a copy of the At Risk report to review, instead electing to cherry pick a few excerpts from it. See D.I. 738-24 (Ex. X to the Hixson Decl.). Moreover, buried in a footnote, Plaintiffs request that an entire group of unidentified other documents should also be excluded. See D.I. 737 (Pls.' Mots. in Limine) at 17 n.3. The Court cannot exclude evidence that has not been identified, let alone shown, to Defendants or the Court. III. OPPOSITION TO PLAINTIFFS' MOTION IN LIMINE NO. 4 "EVIDENCE OF SETTLEMENT DISCUSSIONS" The Court should deny Plaintiffs' Motion in Limine No. 4 because Rule 408 ("Rule 408") of the Federal Rules of Evidence does not bar evidence of compromise negotiations when used to establish failure to mitigate damages or to contest whether punitive damages are appropriate. Plaintiffs seek to preclude Defendants from introducing evidence of informal settlement discussions that occurred in November 2007, separate and apart from the Court-ordered mediation process. See D.I. 737 (Pls.' Mots. in Limine) at 17-18. Plaintiffs rely on Rule 408, which states that evidence of compromise negotiations is not admissible "when offered to prove liability for, invalidity of, or amount of a claim that was disputed as to validity or amount, or to impeach through a prior inconsistent statement or contradiction." Fed. R. Evid. 408. Although Plaintiffs properly cite the language of this rule, they fail to appreciate its meaning. Rule 408 does not entirely disallow evidence of compromise negotiations; rather, it prohibits this evidence For this reason, the cases Plaintiffs cite in their Motion are inapposite because they do not consider the multiple other reasons the customer statements are admissible. SVI-84026v1 6 - 11 - DEFS.' OPPS. TO PLS.' 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 if offered for one of the enumerated purposes; it does not bar admission for other purposes. See id.; Abbott Diabetes Care Inc. v. Roche Diagnostics Corp., No. C05-03117 MJJ, 2007 WL 4166030, at *3 (N.D. Cal. Nov. 19, 2007). Rule 408 "is designed to ensure that parties may make offers during settlement negotiations without fear that those same offers will be used to establish liability should settlement efforts fail. When statements made during settlement are introduced for a purpose unrelated to liability, the policy underlying the Rule is not injured." Rhoades v. Avon Prods., 504 F.3d 1151, 1161-62 (9th Cir. 2007). Evidence does not violate Rule 408 if it is introduced for non-liability purposes, such as proving that a third party is "necessary," showing when particular conduct occurred, or revealing a conflict of interest. See Iskander v. Rodeo Sanitary Dist., No. 95-16914, 1997 WL 469636, at *1 (9th Cir. Aug. 18, 1997); In re Bay Area Material Handling, Inc., No. 94-15815, 1996 WL 29262, at *3 (9th Cir. Jan. 25, 1996); Sulit v. Slep-Tone Entm't, No. C06-00045 MJJ, 2007 WL 4169762, at *3 n.1 (N.D. Cal. Nov. 20, 2007). Evidence relating to the November 2007 settlement discussion is relevant both to Defendants' argument that Plaintiffs failed to mitigate damages and to contest Plaintiffs' theory that punitive damages are appropriate in this case. With regard to mitigation, evidence of settlement negotiations that proves that a party "may have incurred more damage than necessary" does not raise Rule 408 concerns and does not render the evidence inadmissible on Rule 408 grounds. CIT Group/Equip. Fin., Inc. v. Taylor, No. C-91-1848 SBA (PJH), 1991 U.S. Dist. LEXIS 18171, at *12-14 (N.D. Cal. Dec. 16, 1991) (Hamilton, J.). "[S]everal courts have ruled that Rule 408 does not exclude evidence of settlement negotiations if relevant to mitigation of damages." Mastec N. Am., Inc. v. Coos County, No. 04-278-AA, 2007 WL 2027011, at *8 (D. Or. July 6, 2007) (emphasis added). Plaintiffs appear to argue that the Court should grant this motion in limine because allowing settlement negotiation evidence for purposes of proving failure to mitigate would render all rejected settlement proposals admissible. See D.I. 737 (Pls.' Mots. in Limine) at 17-18. Plaintiffs' argument fails for several reasons: (1) it ignores case law that allowed settlement evidence for this specific purpose; (2) it erroneously assumes all settlement discussions implicate mitigation; and (3) it fails to explain why the Court should be concerned SVI-84026v1 - 12 - DEFS.' OPPS. TO PLS.' 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 with setting a precedent that allows for the introduction of relevant and admissible evidence. With regard to punitive damages, courts allow evidence of compromise negotiations where introduced to show a party's state of mind, intent or knowledge. See Smith v. Genstar Capital LLC, No. C 01-3936MMC, 2001 WL 1658315, at *2 (N.D. Cal. Dec. 20, 2001) (holding that Rule 408 is not implicated where "defendants rely on the statement to establish their state of mind and lack of notice"); Cazares v. Pacific Shore Funding, No. CV04-2548DSF(SSX), 2006 WL 149106, at *11 (C.D. Cal. Jan. 3, 2006) (holding that Rule 408 does not bar admission of settlement agreements that illustrate a defendant's "intent or knowledge"). Courts in the Eighth and Tenth Circuits specifically held that the "other purposes" exception under Rule 408 includes the purposes of proving willfulness and assisting the jury in making punitive damages determinations. See Bradbury v. Phillips Petroleum Co., 815 F.2d 1356, 1364 (10th Cir. 1987); Itron, Inc. v. Benghiat, No. Civ.99-501 (JRT/FLN), 2003 WL 22037710, at *9-10 (D. Minn. Aug. 29, 2003). Thus, Rule 408 does not prohibit Defendants from offering evidence that will tend to disprove willfulness for the purpose of opposing punitive damages. IV. OPPOSITION TO PLAINTIFFS' MOTION IN LIMINE NO. 5 "EVIDENCE NOT IN INTERROGATORY RESPONSES" The Court should deny Plaintiffs' Motion in Limine No. 5 to exclude evidence not in interrogatory responses because it lacks merit, as Defendants' disclosures provide ample notice of the evidence on which Defendants' license defense will rely and comport with Defendants' obligations under the Federal Rules of Civil Procedure (the "Rules"). A. Evidence of License Agreements Should Not Be Excluded. Plaintiffs move under Rule 37(c)(1) of the Federal Rules of Civil Procedure ("Rule 37") to exclude evidence of agreements that Defendants will argue authorized TN's allegedly infringing conduct. Plaintiffs base their sanctions request on the claim that Defendants failed to "supplement" their response to Interrogatory No. 4 ("Rog. 4")7 with information linking each Rog. 4 asks Defendants to "[i]dentify all `agreements between Plaintiffs and their customers and/or former customers' on which you base the contentions made in Your Answer's Affirmative Defenses, including but not limited to Identifying which terms of those agreements form the basis of Your contentions." D.I. 737 (Pls.' Mots. in Limine) at 19. SVI-84026v1 7 - 13 - DEFS.' OPPS. TO PLS.' 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 allegedly infringing download or copy of software to the specific license(s) authorizing that download or copy.8 See D.I. 737 (Pls.' Mots. in Limine) at 19-20. Plaintiffs' request is inconsistent with the Rules and with the parties' burdens at trial. First, Defendants gave an appropriate and complete response by identifying 27 illustrative Oracle customer licenses (not four, as Plaintiffs state) for the various software lines at issue and citing the representative terms on which their license defense will rely.9 See Lanier Decl. 25, Ex. 25 (12/4/09 TN's 7th Am. and Supp. Resp. to OUSA's 1st Set of Rogs., Resp. to Rog. 4) at 19-26. Such citation to exemplars, in this case to the "thousands of license agreements and related contract documents for the hundreds of customers at issue," (D.I. 737 (Pls.' Mots. in Limine) at 21) is permitted and considered complete under the Rules. See Dong Ah Tire & Rubber Co. v. Glasforms, Inc., No. C 06-3359 JF (RS), 2008 U.S. Dist. LEXIS 90708, at *11-12 (N.D. Cal. Oct. 29, 2008) (holding that plaintiff adequately responded to interrogatory requesting that it "(1) identify every document and thing relating to any complaint Glasforms has received in the past five years" by producing "a sample of these materials to defendants"). Defendants are not required to undertake the burden of mapping each of the alleged millions of downloads and thousands of copies of software applications on TN's computers to the thousands of license agreements at issue--that is Plaintiffs' job. See D.I. 737 (Pls.' Mots. in Limine) at 21; Baxter Healthcare Corp. v. Fresenius Med. Care Holding, No. C 07-1359 PJH (JL), 2008 U.S. Dist. LEXIS 104329, at *5, 8-9 (N.D. Cal. Dec. 15, 2008) (holding that once defendant identified documents responsive to interrogatory, it was not required "to prepare massive charts correlating If Plaintiffs deemed Defendants' discovery responses incomplete, they were required to move to compel. See Fed. R. Civ. P. 37(a); Atkinson v. Kofoed, No. CIV S-06-2652 RRB EFB P, 2008 WL 508410, at *1 (E.D. Cal. Feb. 22, 2008) ("The remedy when a party fails to respond to properly served, timely discovery requests and refuses to correct the omission through informal means is to file a motion to compel pursuant to Rule 37(a)."). Instead, Plaintiffs attempt to circumvent the rule by requesting Rule 37(c)(1) sanctions for Defendants' alleged failure to "supplement" per Rule 26(e)(1). Plaintiffs' failure to timely move to compel by the December 11, 2009 deadline alone justifies denying this motion in limine. See Walker & Zanger, Inc. v. Paragon Indus., No. C-04-1946 VRW (JCS), 2006 WL 1581969, at *3 (N.D. Cal. June 6, 2006); Compana, LLC v. Aetna, Inc., No. C05-0277RSL, 2006 WL 1319456, at *1-2 (W.D. Wash. May 12, 2006) (holding that "the sanction of exclusion [was] not warranted" where party had not timely filed motion to compel). 9 Contrary to Plaintiffs' assertion, Defendants supplemented their response after April 15, 2010 to include Siebel agreements. Id. at 23-26. SVI-84026v1 8 - 14 - DEFS.' OPPS. TO PLS.' 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 the thousands of documents" to "each distinct--and potentially infringing--version" of accused product); Dong Ah Tire & Rubber Co., 2008 U.S. Dist LEXIS 79172, at *5, 8-9 (holding that plaintiff was not required to specifically identify documents showing "each instance of insulating rod failure," where it had identified responsive documents and "answering the question would require the responding party to engage in burdensome or expensive research"). Second, no supplementation was required because Defendants did not learn that "in some material respect the disclosure or response [was] incomplete or incorrect . . . . " (Fed. R. Civ. P. 26(e)(1)(A) (emphasis added)) and because the licenses on which Defendants will rely at trial will be consistent with the exemplars identified in their response.10 See Dodson v. Morgan Stanley DW, Inc., Case No. C 06-5669 RJB, 2007 U.S. Dist. LEXIS 85535, at *34 (W.D. Wash. Nov. 8, 2007) (noting that although "Rule 26(e) imposes a duty upon a party to supplement corrective or incomplete information, it does not impose a duty to supplement information that is consistent"). That Plaintiffs never requested that Defendants supplement their response prior to the close of discovery confirms that the response was sufficient. See id. at *10. The authority on which Plaintiffs rely to support exclusion confirms that Defendants did not violate Rule 26(e)(1). In those cases, courts held that exclusion sanctions were appropriate where failure to timely produce relevant information prejudiced the other party. See Cambridge Elecs. Corp. v. MGA Elecs., Inc., 227 F.R.D. 313, 321-24 (C.D. Cal. 2004) (excluding declaration for failure to disclose declarant as a witness before fact discovery closed and not providing information in response to interrogatory); Yeti by Molly Ltd. v. Deckers Outdoor Corp., 259 F.3d 1101, 1105-07 (9th Cir. 2001) (excluding expert, whose report was filed 28 days before trial, because late disclosure hampered plaintiffs' ability to respond to opinion); Licciardi v. TIG Ins. Group, 140 F.3d 357, 361-62, 364, 367 (1st Cir. 1998) (holding expert's undisclosed opinion should have been excluded and noting "this is an extreme case, both in the prejudice wrought and the apparent deliberateness of the behavior"). Defendants provided a detailed roadmap of their license defense; Plaintiffs cannot credibly contend that they will be "forced to guess which To the extent Plaintiffs suggest that Defendants had a separate obligation to disclose during the meet and confer process the specific agreements on which Defendants plan to rely at trial, Plaintiffs cite no authority for this novel proposition. SVI-84026v1 10 - 15 - DEFS.' OPPS. TO PLS.' 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 sentences in which agreements and for which customers" Defendants will rely upon at trial. D.I. 737 (Pls.' Mots. in Limine) at 21. Indeed, Plaintiffs appear familiar enough with the license agreements to proclaim that "[n]one . . . authorized SAP TN's conduct." Id. Because Defendants complied with Rule 26(e)(1), sanctions under Rule 37(c)(1) are not warranted.11 See Brown v. Chertoff, No. 406CV002, 2009 U.S. Dist. LEXIS 691, at *15 (S.D. Ga. Jan. 6, 2009). Finally, requiring Defendants to identify a specific license that authorizes each instance of accused conduct does not comport with the parties' respective burdens of proof. A valid copyright license is an affirmative defense to infringement. See Rano v. Sipa Press, Inc., 987 F.2d 580, 585 (9th Cir. 1993); Bourne v. Walt Disney Co., 68 F.3d 621, 631 (2d Cir. 1995). Once a defendant identifies a relevant license, the copyright owner must prove that the copying was unauthorized; it is not the defendant's burden to show that the copying was authorized by the identified agreement. See Bourne, 68 F.3d at 631, Realnetworks, Inc. v. DVD Copy Control Ass'n, 641 F. Supp. 2d 913, 945 (N.D. Cal. 2009). Plaintiffs do not dispute that TN's access to and use of its customers' Oracle software and support materials is governed by customer licenses with Oracle. See D.I. 418 (Fourth Amended Complaint) 53; Lanier Decl. 26, Ex. 26 (12/4/09 Pls.' 5th Am. and Supp. Resp. to TN's 1st Set of Rogs., 2nd Supp. Resp. to Rog. No. 10) at 64-66. Thus, it is Plaintiffs' burden--not Defendants'--to prove that TN's allegedly infringing conduct exceeded the scope of each applicable license. See RealNetworks, 641 F. Supp. 2d at 945. B. Evidence of Customer Credentials Used to Download Software and Support Materials Should Not Be Excluded. Plaintiffs also move to preclude Defendants from presenting evidence "that purports to tie specific downloads by SAP TN to particular license agreements." Plaintiffs' motion is based only on the unsupported assertion that Defendants contended during discovery that it is impossible to determine the customer credentials used to download a particular item from Oracle's support websites. See D.I. 737 (Pls.' Mots. in Limine) at 19. Plaintiffs also ask that evidence of implied agreements be excluded because Defendants' response to Rog. 4 did not identify such agreements. See D.I. 737 (Pls.' Mots. in Limine) at 21. Rog. 4 does not seek information regarding implied agreements; rather, Interrogatory No. 2, to which Defendants gave a detailed response, does. See Lanier Decl. 25, Ex. 25 (12/4/09 TN's 7th Am. and Supp. Resp. to OUSA's 1st Set of Rogs., Resp. to Rog. 2) at 9-17. SVI-84026v1 11 - 16 - DEFS.' OPPS. TO PLS.' 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 Defendants have never taken this position. Defendants acknowledged that there is "no known technical way to specifically tie a downloaded item on TomorrowNow's systems to a Customer Connection ID and password," in that "the downloaded files neither contain any physical electronic tagging in the file itself, nor any file-based metadata associated with each file that provides both the exact username and password that was used to download each file." Lanier Decl. 27, Ex. 27 (11/23/09 Defs.' Resp. to Pls.' 5th Set of RFAs to Defs., Resp. to Req. No. 1) at 7 (emphasis added). In other words, an individual downloaded file--once downloaded--does not have a technical "fingerprint" that reflects the customer ID and password used to obtain it. However, throughout the case, Defendants have always maintained that, for most of the relevant timeframe, TN's typical procedure was to download materials for a customer using that customer's Customer Connection ID and password and to store those downloads in a customerspecific folder. See id. at 7-8; Lanier Decl. 28, Ex. 28 (12/4/09 TN's 8th Am. and Supp. Resp. to Oracle Corp.'s 1st Set of Rogs, Resp. to Rogs. 3, 7, 12, 16) at 11-20, 24-27, 55-57, 73-77; D.I. 334 (Defs.' Opp. to Pls.' Mot. to Compel) at 7 n.9. Based on this practice, and by reviewing TN's business records that contain the customer credentials each customer provided and the materials to which each customer represented it was entitled, one can reconstruct which customer credentials likely were used to obtain a download. In fact, as Plaintiffs are aware, Defendants undertook this analysis to identify the likely customer credentials used to download certain software and support materials identified in the First Amended Complaint. See Lanier Decl. 28, Ex. 28 (TN's 8th Am. and Supp. Resp. to Oracle Corp.'s 1st Set of Rogs, Resp. to Rogs. 10 and 13) at 34-42, 57-71. Former TN Vice President Shelley Nelson's testimony, on which Plaintiffs rely, actually confirms that TN was able to determine the likely credentials used to obtain certain downloads. See D.I. 738 (Hixson Decl.) 34, Ex. BB at 570:2-23; see also Lanier Decl. 29, Ex. 29 (12/6/07 S. Nelson Tr.) at 153:11-154:22. To the extent that Plaintiffs take issue with the type of evidence on which Defendants will rely to tie downloads to customer credentials, that is a matter of evidentiary weight, not a basis on which to exclude evidence. See Knight v. Deere & Co., No. 2:08-cv-01903-GEB-EFB, 2010 U.S. Dist. LEXIS 56736, at *14-15 (E.D. Cal. May 11, 2010) SVI-84026v1 - 17 - DEFS.' OPPS. TO PLS.' 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 (noting that "a motion in limine should not be used to resolve factual disputes or weigh evidence"); C & E Servs., Inc. v. Ashland Inc., 539 F. Supp. 2d 316, 323 (D.D.C. 2008) (same). Because Defendants have never contended that it is impossible to determine the customer credentials used to download a particular item or group of items from Oracle's support websites and, in fact, have identified the types of evidence that can be used to make this determination, Plaintiffs have no basis on which to move to exclude evidence that would tie specific downloads to customer credentials or, ultimately, to particular license agreements. V. OPPOSITION TO PLAINTIFFS' MOTION IN LIMINE NO. 6 "HEARSAY CONCERNING LOCKHEED MARTIN" The Court should deny Plaintiffs' Motion in Limine No. 6 because the statements of PeopleSoft employee Gregory Stevenson are admissible under Rules 803(d)(2)(C) and (d)(2)(D) of the Federal Rules of Evidence, while the related TN statements are admissible under Rules 804(b)(1) and 807, as well as for various non-truth purposes. Plaintiffs specifically seek to exclude: (1) an email from Seth Ravin to Shelley Nelson and Andrew Nelson recounting Ravin's conversation with Stevenson during which Stevenson said "he was going to let Lockheed Martin know that there were no issues with them sending [TN] the CDs . . . ." (D.I. 738-30 (Ex. DD to the Hixson Decl.) ("Ravin email")); (2) an email from Andrew Nelson stating that a senior PeopleSoft executive (clearly Stevenson) referred the customer to TN (D.I. 738-32 (Ex. FF to the Hixson Decl.) ("Nelson email"));12 (3) Ravin's deposition testimony about the conversation with Stevenson (D.I. 738-30 (Ex. EE to the Hixson Decl.) ("Ravin testimony")); and (4) Shelley Nelson's deposition testimony about the Ravin-Stevenson exchange (D.I. 738-30 (Ex. BB to the Hixson Decl.) ("Nelson testimony")). The deposition testimony: Plaintiffs contend that the Ravin and Nelson testimony is hearsay because it is deposition testimony. However, "a party may use the deposition of a witness at a hearing or trial if the court finds `that the witness is more than 100 miles from the place of hearing or trial.'" Nationwide Life Ins. Co. v. Richards, 541 F.3d 903, 914 (9th Cir. 2008) In the Ravin email, Lockheed Martin wrote to Stevenson stating "Lockheed Martin has contacted the supplier you recommended . . . ." D.I. 738-30 (Ex. DD to the Hixson Decl.) at TNOR00614960. SVI-84026v1 12 - 18 - DEFS.' OPPS. TO PLS.' 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 (quoting Fed. R. Civ. P. 32). Ravin is a Nevada resident (see Lanier Decl. 30, Ex. 30 (3/31/09 Hrg. Tr.) at 7:19-8:1, and Shelley Nelson lives in Texas. See Lanier Decl. 29, Ex. 29 (12/6/07 S. Nelson Tr.) at 241 (deposition errata sheet signed and notarized in Texas). Thus, their deposition testimony is admissible. See Fed. R. Evid. 804(b)(1). The Stevenson statements, within both the deposition testimony and the emails, are admissions of a party-opponent per Rule 801(d)(2) of the Federal Rules of Evidence ("Rule 801(d)(2)"). Plaintiffs argue that Stevenson's statements are not admissions under Rule 801(d)(2)(C) because there is no evidence he was authorized to make them. However, all of the objective indications are that Stevenson was authorized. He was in direct communication with a major customer, fielding and responding to questions about the customer's permission to provide CDs to TN. See D.I. 738-30 (Ex. DD to the Hixson Decl.). In addition, there is an independent basis for finding his statements to be admissions: Stevenson was clearly acting within the scope of his employment within the meaning of Rule 803(d)(2)(D). Stevenson's

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