Oracle Corporation et al v. SAP AG et al

Filing 835

Memorandum in Opposition to 773 Plaintiff's Motion No. 6 to Exclude Expert Testimony of Bruce Spencer filed by SAP AG, SAP America Inc, Tomorrownow Inc. (Attachments: # 1 Proposed Order)(Froyd, Jane) (Filed on 9/9/2010) Modified on 9/10/2010 (vlk, COURT STAFF).

Oracle Corporation et al v. SAP AG et al

Doc. 835 Att. 1

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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: [phone] Facsimile: [phone] [e-mail] [e-mail] [e-mail] Tharan Gregory Lanier (SBN 138784) Jane L. Froyd (SBN 220776) JONES DAY 1755 Embarcadero Road Palo Alto, CA 94303 Telephone: [phone] Facsimile: [phone] [e-mail] [e-mail] Scott W. Cowan (Admitted Pro Hac Vice) Joshua L. Fuchs (Admitted Pro Hac Vice) JONES DAY 717 Texas, Suite 3300 Houston, TX 77002 Telephone: [phone] Facsimile: [phone] [e-mail] [e-mail] 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) [PROPOSED] ORDER DENYING PLAINTIFFS' MOTION NO. 6: TO EXCLUDE TESTIMONY OF DEFENDANTS' EXPERT BRUCE SPENCER

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Having considered Plaintiffs' Motion No. 6: To Exclude Testimony of Defendants' Expert Bruce Spencer, Defendants' Opposition to Plaintiffs' Motion No. 6: To exclude Testimony of Defendants' Expert Bruce Spencer, the memoranda and declarations in support, and exhibits attached thereto: IT IS HEREBY ORDERED THAT: Plaintiffs' motion is DENIED. DISCUSSION Plaintiffs seek to wholly exclude the testimony of Defendants' expert statistician, Dr. Bruce Spencer, who is the primary rebuttal expert to Plaintiffs' expert, Dr. Daniel Levy. Rule 702 permits experts qualified by "knowledge, experience, skill, expertise, training, or education" to testify "in the form of an opinion or otherwise" based on "scientific, technical, or other specialized knowledge" if that knowledge will "assist the trier of fact to understand the evidence or to determine a fact in issue." Fed. R. Evid. 702. The Court serves as the "gatekeeper" in excluding expert testimony that fails to clear the threshold hurdles of relevance and reliability. Daubert v. Merrell Dow Pharms, Inc., 509 U.S. 579, 589 (1993); see also Kumho Tire Co. v. Carmichael, 526 U.S. 137, 147 (1999). "This entails a preliminary assessment of whether the reasoning or methodology is scientifically valid and of whether that reasoning or methodology properly can be applied to the facts in issue." Daubert, 409 U.S. at 592-93. To make this determination, the Court must apply a three-part test: (1) Is the proffered expert qualified to testify in the area on which he is opining based on his knowledge, skill, experience, training, or education (qualification requirement)?; (2) Is the proffered expert testimony based on reliable scientific or specialized knowledge that is reliably applied to the facts of this case (reliability requirement)?; and (3) Will the proffered expert testimony assist the trier of fact in understanding the evidence or determining a fact in issue (relevancy requirement)? See Fed. R. Evid. 702; Daubert, 509 U.S. at 592-93. Rule 702 is applied consistent with "the `liberal thrust' of the Federal Rules and their `general approach of relaxing the traditional barriers to `opinion testimony.'" Daubert, 509 U.S. at 588 (citations omitted); see also Fed. R. Evid. 702 Advisory Committee's notes (2000 Amendments) ¶ 6 (confirming that "rejection of expert testimony is the exception rather than the
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rule"). Opining on the flaws in another expert's methodology is a common, and admissible, form of expert testimony. See generally, e.g., Kennedy v. Collagen Corp., 161 F.3d 1226, 1230-31 (9th Cir. 1998) ("In arriving at a conclusion, the fact finder may be confronted with opposing experts, additional tests, experiments, and publications, all of which may increase or lessen the value of the expert's testimony. But their presence should not preclude the admission of the expert's testimony--they go to the weight, not the admissibility."). When the threshold for admissibility is met, differences in the experts' opinions simply go to the weight of the testimony and not the admissibility. See id. Additionally, the Court must evaluate the proposed evidence under Rule 403, which requires that evidence be excluded where its probative value is substantially outweighed by the risk of unfair prejudice, confusion of the issues, and potential to mislead to the jury. See Fed. R. Evid. 403; Daubert, 409 U.S. at 595. Rule 702: Qualifications. Dr. Bruce Spencer has over 30 years of experience in the field of statistics. He has a Ph.D. from Yale University and is a tenured professor in Northwestern University's Department of Statistics, which he helped found in 1987 and for which he served as Department Chair for 17 years. Moreover, it is not disputed that he has extensive experience in both the public and private sector related to sampling. The Court finds that Spencer is qualified to provide testimony evaluating and rebutting Levy's statistical analysis. Rule 702: Relevancy and Reliability. Having alleged copyright infringement by TomorrowNow, Plaintiffs hired Levy, an economist, to try and support those allegations by having him count certain files located at TomorrowNow and purport to offer analyses regarding particular technical actions taken by TomorrowNow. In his report, Levy presents two types of counts: (1) sums where the total value is allegedly known, and (2) estimates based on sampling where the total value is not known. With regard to (2), Levy made certain choices about how he designed and selected the sample as well as how he calculated his totals from the sample. Spencer opines that these choices show a general lack of familiarity with sampling techniques, raise questions as to the sample itself, and impact some of Levy's numerical conclusions. Those
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criticisms (and others) are the subject of Spencer's 44-page rebuttal expert report. Spencer's opinions, therefore, are relevant and will assist the trier of fact. Moreover, Plaintiffs do not argue that Spencer has invented some new, untested form of statistical analysis. Rather, they simply disagree with Spencer's evaluation Levy's attempted application of statistical theories. At bottom, these are all challenges that go to the weight of the testimony and not the admissibility. The Court finds that, by relying on well-known, standard statistical practices to evaluate Levy's opinions, Spencer's opinions are reliable. Rule 403: Probative Value of the Evidence. As a catchall, Plaintiffs add in several Rule 403 challenges throughout their motion. In applying Rule 403, district courts enjoy wide latitude. Hemmings v. Tidyman's Inc., 285 F.3d 1174, 1184 (9th Cir. 2002). Much like the expert in Hemmings, all of Spencer's opinions, including those on precision ranges, sample sizes, and measurement error, are probative evidence in this case and are based on reliable methods. Further, Spencer does not opine on the burden of proof in this case, or make any legal arguments regarding what Oracle must prove at trial. There is nothing unfairly prejudicial, or misleading, in allowing Spencer to opine on his evaluation of Levy's counts, including the choices Levy made and the consequences of those choices in arriving at these counts. Plaintiffs failed to provide any specific grounds that warrant shifting the balance to exclusion. Finally, Spencer does not cast any unwarranted aspersions on Levy; he provides a relevant, statistical evaluation and rebuttal to Levy's work. CONCLUSION For the reasons stated above, the Court concludes that Plaintiffs' Motion No. 6: To Exclude Testimony of Defendants' Expert Bruce Spencer must be DENIED. IT IS SO ORDERED.

DATED: ________________________

By: Hon. Phyllis J. Hamilton

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