Oracle Corporation et al v. SAP AG et al

Filing 852

Proposed Order re 851 Memorandum in Opposition, [Proposed] Order Denying Plaintiffs' Motion No. 1 To Exclude Expert Testimony Of Stephen K. Clarke by SAP AG, SAP America Inc, Tomorrownow Inc. (McDonell, Jason) (Filed on 9/9/2010)

Oracle Corporation et al v. SAP AG et al

Doc. 852

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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. 1 TO EXCLUDE EXPERT TESTIMONY OF STEPHEN K. CLARKE

[PROPOSED] ORDER DENYING PLAINTIFFS' MOTION TO EXCLUDE CLARKE Case No. 07-CV-1658 PJH (EDL)

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Having considered Plaintiffs' Motion No. 1 to Exclude Testimony of Defendants' Expert Stephen K. Clarke, Defendants' Opposition to Plaintiffs' Motion No. 1 to Exclude Expert Testimony of Defendants' Expert Stephen K. Clarke, the memoranda and declarations in support, and exhibits attached thereto: IT IS HEREBY ORDERED THAT: Plaintiffs' motion is DENIED.

Plaintiffs' arguments to exclude Clarke's analysis go to weight, not admissibility. Clarke is qualified to offer the opinions at issue and his methodology satisfies the requirements of Rule 702. Clarke's rebuttal report, supplemental report, and accompanying disclosures were timely and did not prejudice Plaintiffs. For these reasons, the Court denies Plaintiffs' motion in its entirety. Further, Defendants have been prejudiced by Plaintiffs' untimely disclosure of the Levy declaration. For these reasons, the Court excludes the Levy declaration. Clarke's Georgia-Pacific Analysis: First, Plaintiffs argue that Clarke goes beyond the scope of permissible rebuttal testimony by performing his own Georgia-Pacific analysis. However, Clarke's analysis is appropriate because it rebuts evidence "on the same subject matter identified by another party . . . ." Fed. R. Civ. P. 26(a)(2)(C)(ii); see also, In re REMEC Inc. Sec. Litig., No. 04-CV-1948, 2010 U.S. Dist. LEXIS 48415, at *28-29 (S.D. Cal. Apr. 21, 2010); Humphreys v. Regents of Univ. of Cal., No. C-04-03808, 2006 U.S. Dist. LEXIS 47822, at *1718 (N.D. Cal. Jul. 6, 2006). Therefore, Clarke may perform his own Georgia-Pacific analysis on rebuttal because it is the "same subject matter." Second, Plaintiffs challenge the reliability of Clarke's Georgia-Pacific analysis and allege that it is unsupported by the facts. Although Plaintiffs may disagree with Clarke's approach, this does not make it unreliable. It is "not the role of the trial court to evaluate the correctness of facts underlying one's expert testimony." DSU Med. Corp. v. JMS Co., Ltd, 296 F. Supp. 2d 1140, 1147-48 (N.D. Cal. 2003) (internal citation omitted); see also Fed. R. Evid. 702 Advisory Committee Note (trial court may not "exclude an expert's testimony on the ground that the court
[PROPOSED] ORDER DENYING PLAINTIFFS' MOTION TO EXCLUDE CLARKE Case No. 07-CV-1658 PJH (EDL)

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believes one version of the facts and not the other"). When experts rely on conflicting facts, "an expert may testify on his party's version of the disputed facts," DSU Med., at 1148. Finally, Plaintiffs assert that they have been prejudiced by the alleged untimely disclosure of Clarke's Georgia-Pacific analysis. However, Clarke's Georgia-Pacific analysis was disclosed at the appropriate time for rebuttal opinions and, in any event, Plaintiffs have suffered no prejudice because they have had ample time and notice to prepare for Clarke's rebuttal analysis. Clarke's Causation Analysis: Plaintiffs similarly challenge the reliability of Clarke's causation analysis. Again, although Plaintiffs may disagree with Clarke's approach and conclusions, this does not make Clarke's analysis unreliable. DSU Med., at 1147-48; Salinas v. Amteck of Ky., Inc., 682 F.Supp. 2d 1022, (N.D. Cal. 2010) ("[R]eliability is not determined based on the `correctness of the expert's conclusions but the soundness of his methodology.'"). Plaintiffs' disagreement with Clarke's approach and conclusions do not justify the exclusion of Clarke's analysis on this point. Plaintiffs also allege that they suffered prejudice because five of the declarations upon which Clarke relies were produced after his expert report. Changes or additions to expert reports may be made up until the date of pre-trial disclosures, provided they do not include new theories or opinions. Fed. R. Civ. P. 26(e)(2); see also Capitol Justice LLC v. Wachivia Bank, N.A., No.07-2095, 2009 U.S. Dist. LEXIS 126573, at *6-10 (D.D.C. Apr. 8, 2010); United States v. 14.3 Acres of Land, No. 07CV886, 2008 U.S. Dist. LEXIS 66667, at *15-24 (S.D. Cal. Aug. 29, 2008). Pre-trial disclosures were due on August 5, 2010. All of the declarations, and Clarke's related supplementation of his report, were produced prior to that date. Therefore, Plaintiffs cannot claim they were prejudiced. Clarke's Database Value of Use Analysis: Plaintiffs seek to exclude Clarke's analysis of the fair market value of Defendants' use of Oracle's database software. Despite Plaintiffs' arguments, however, Clarke's analysis on this point is not is an improper legal interpretation of Oracle's standard database end user license. Instead, Clarke attempts to compare Defendants' use with other comparable conduct in an effort to define an established royalty. DSU Med., at 114748 (citing Monsanto v. McFarling, 488 F.3d 973, 979 (Fed. Cir. 2007). Although Plaintiffs -2[PROPOSED] ORDER DENYING PLAINTIFFS' MOTION TO EXCLUDE CLARKE Case No. 07-CV-1658 PJH (EDL)

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disagree with the evidence upon which Clarke bases his analysis, any such arguments go to weight, and not admissibility, of Clarke's analysis. Clarke's Regression Analysis: Plaintiffs challenge Clarke's qualifications to perform his regression analysis and contend that his methods and results are unreliable. However, Clarke's education and experience sufficiently qualify him to provide a regression analysis on this issue. Plaintiffs fail to establish that Clarke's regression analysis should be excluded. Clarke's Legal Opinions: Plaintiffs contend that Clarke provides impermissible expert legal opinion. However, Plaintiffs have failed to establish that Clarke's analysis is legal in nature and should be excluded. Clarke's Qualifications to Provide Expert Testimony: Throughout their motion, Plaintiffs contend that Clarke is not qualified to provide expert testimony. Clarke is an economist, damages expert, and a CPA accredited in business valuation. Clarke's education and experience sufficiently qualify him to provide analysis regarding the aforementioned topics. To the extent Plaintiffs argue that Clarke is otherwise unqualified, "courts routinely allow experts to testify as to subject areas related to, although not conterminous, with their expertise." Industrial Automation Supply, LLC v. United Rentals Highway Techs., No. 3:04-CV-99, 2006 WL 5219390, at * 1-2 (D.N.D. Feb. 8, 2006). Plaintiffs fail to establish that Clarke's qualifications warrant excluding him or his analysis. The Levy Declaration: Further, Plaintiffs rely on a declaration by Levy, a witness Plaintiffs have not previously disclosed on the subject of regression analysis, econometrics, or damages. Plaintiffs' failure to disclose the Levy until now is untimely. Luke v. Family Care and Urgent Med. Clinics, 323 Fed. Appx. 496, 498-499 (9th Cir. 2009) (affirming exclusion of expert declaration in opposition to summary judgment). The Levy declaration will require significant time and effort in order for Defendants to evaluate and respond. Defendants have been prejudiced as a result. The Court hereby excludes the Levy declaration. IT IS SO ORDERED.

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[PROPOSED] ORDER DENYING PLAINTIFFS' MOTION TO EXCLUDE CLARKE Case No. 07-CV-1658 PJH (EDL)

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DATED: ________________________

By: Hon. Phyllis J. Hamilton

SFI-649457v1

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[PROPOSED] ORDER DENYING PLAINTIFFS' MOTION TO EXCLUDE CLARKE Case No. 07-CV-1658 PJH (EDL)