Oracle Corporation et al v. SAP AG et al

Filing 935

Joint Letter Brief re Oracle's Objection to SAP Proposed Witnesses Carey, Kobliska, McCloskey, Shander, and Subramanian and SAP's Objection to Oracle Proposed Expert Witness Dr. Levy filed by Oracle International Corporation, Oracle USA Inc., Siebel Systems, Inc.. (Attachments: # 1 Exhibit A, # 2 Exhibit B, # 3 Exhibit C, # 4 Exhibit D, # 5 Exhibit E, # 6 Exhibit F, # 7 Exhibit G)(House, Holly) (Filed on 10/18/2010) Modified on 10/19/2010 (vlk, COURT STAFF).

Oracle Corporation et al v. SAP AG et al

Doc. 935 Att. 6

EXHIBIT F

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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) DEFENDANTS' OBJECTIONS TO THE DECLARATIONS OF DANIEL LEVY FILED IN SUPPORT OF PLAINTIFFS' MOTIONS TO EXCLUDE Date: September 30, 2010 Time: 2:30 p.m. Courtroom: 3, 3rd Floor Judge: Hon. Phyllis J. Hamilton
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Defendants SAP AG, SAP America, Inc., and TomorrowNow, Inc. ("Defendants") object to the following declarations submitted by Plaintiffs Oracle USA, Inc., Oracle International Corporation, and Siebel Systems, Inc.1 ("Plaintiffs") in support of their motions to exclude testimony of Defendants' experts Clarke and Spencer because the declarations contain untimely disclosed expert opinions: · Declaration of Daniel S. Levy, Ph.D. In Support of Motion No.1: To Exclude Testimony of Defendants' Expert Stephen Clarke (declaration filed under seal in support of D.I. 781) ("Levy Declaration In Support of Motion No. 1 to Exclude Clarke"); and · Declaration of Daniel S. Levy In Support of Oracle's Motion No. 6: To Exclude Testimony of Defendants' Expert Bruce Spencer (declaration filed as D.I. 779 in support of D.I. 773) ("Levy Declaration In Support of Motion No. 6 to Exclude Spencer"). In the Levy Declaration In Support of Motion No. 1 to Exclude Clarke, Levy provides a complex, 32-page declaration espousing opinions related to regression analysis in the field of econometrics as sur-rebutal to Clarke's damages opinions. But Levy did not list any of these opinions in his report, provide them in any supplemental materials, or testify about them at his deposition. In fact, Plaintiffs did not even disclose him as an expert in the field of econometrics or on the topic of damages, and Levy expressly stated at his deposition that he was not offering opinions about damages. Additionally, although Plaintiffs disclosed Levy as an expert for sampling, the Levy Declaration In Support of Motion No. 6 to Exclude Spencer (D.I. 779) contains new opinions never previously disclosed anywhere, including his report, deposition, or his supplemental reports. Plaintiffs did not disclose these new opinions of Levy until: · · ·
1

276 days after the deadline to serve expert reports; 146 days after the deadline to serve rebuttal reports; 111 days after Dr. Levy's deposition;

Oracle EMEA Ltd. is no longer a plaintiff. See D.I. 762 (8/17/10 Order) at 25. -1DEFS.' OBJS. TO LEVY DECLARATIONS Case No. 07-CV-1658 PJH (EDL)

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· · · · ·

76 days after Spencer's deposition; 70 days after Clarke's deposition; 62 days after the close of expert discovery; Only 42 days before the Pretrial Conference; and Approximately 10 weeks before trial.2

The rules require automatic exclusion of this evidence. If Plaintiffs wished to add new opinions, then Plaintiffs should have approached Defendants and the Court in the time period allowed and explained the need for such additional opinions. Plaintiffs should not, and cannot, be allowed to lay behind the log and suddenly spring forth wielding new expert opinions at the Daubert stage.3 A. Legal Standard.

Rule 26 requires parties to disclose the identity of each expert witness "accompanied by a written report prepared and signed by the witness." Fed. R. Civ. P. 26(a)(2)(B). The disclosures and the reports must be made "at the times and in the sequence that the court orders." Fed. R. Civ. P. 26(a)(2)(C). The report must contain: "(i) a complete statement of all opinions the witness will express and the basis and reasons for them; (ii) the data or other information considered by the witness in forming them; (iii) any exhibits that will be used to summarize or support them. . . ." In fact, Rule 26(a)(2)(B) "imposes an additional duty to disclose information regarding expert testimony sufficiently in advance of trial that opposing parties have a reasonable opportunity to prepare for effective cross examination and perhaps arrange for expert testimony from other witnesses . . . ." Fed. R. Civ. P. 26 Advisory Committee note (1993 Amendments) at ¶ 15. Rule 37(c)(1) gives teeth to these requirements by forbidding the use of any information required to be disclosed by Rule 26(a) that is not properly disclosed. See Yeti By Molly Ltd. v. Deckers Outdoor Corp., 259 F.3d 1101, 1106 (9th Cir. 2001). Rule 37(c)(1) states: "If a party fails to provide information or identify a witness as required by Rule 26(a) or (e), the party is not For these date calculations, see the Declaration of Scott Cowan in Support of Defendants' Objections to the Declarations from Daniel Levy ("Cowan Decl.") ¶¶ 2-10. For a timeline detailing the events at issue, see Cowan Decl. ¶¶ 11- 25. 3 If Plaintiffs raise any of these new opinions at trial or in any other hearing or filing, then Defendants reserve the right to raise these same objections and move to strike this evidence.
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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) (emphasis added). "The Advisory Committee Notes describe it as a `self-executing,' `automatic' sanction to `provide[]a strong inducement for disclosure of material . . . .'" Yeti, 259 F.3d at 1106 citing Fed. R. Civ. P. 37 advisory committee's note (1993). The burden is on the party who failed to disclose such information to show that an exception to automatic exclusion applies. Yeti, 259 F.3d at 1107. B. New Opinions.

With regard to Levy's new opinions submitted in support of Plaintiffs' Motion to Exclude Stephen Clarke, in this new declaration--for the very first time--Levy states that "I have been retained by counsel . . . to provide a declaration in support of Oracle's motion to exclude certain of Mr. Clarke's opinions related to his regression analyses." Levy Declaration In Support of Motion No. 1 to Exclude Clarke at ¶ 2. Clarke's opinions in this case all relate to damages. Levy then offers a host of new opinions, including new graphs, charts, and data. See Levy Declaration In Support of Motion No. 1 to Exclude Clarke. The declaration contains Levy's views and opinions related to damages opinions on: the zero intercept technique; RČ values; variable, fixed, and total costs; fixed effects regression technique; autocorrelations; and a "significant number of other statistical conditions." Id. The sheer breadth and range of these opinions and supporting materials requires an extensive effort to evaluate. Likewise, in the Levy Declaration In Support of Motion No. 6 to Exclude Spencer, Levy adds new sur-rebuttal opinions on: (1) significance levels and their use in hypothesis testing for random chance; and (2) generally accepted documentation of sampling. See D.I. 779. This includes opinions on alpha levels and the Vietnam draft as well as citations to new articles and materials in an effort to support these opinions. See id. Both of these issues are new, untimely attempts by Dr. Levy to try to rebut Dr. Spencer's opinions. C. Exclusion of the New Opinions Is Warranted.

In a very similar case, the Ninth Circuit addressed this issue and found that untimely disclosed expert opinions filed in a supporting declaration were properly excluded. See Luke v.
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Family Care and Urgent Med. Clinics, 323 Fed. Appx. 496, 498-499 (9th Cir. 2009) (affirming district court's exclusion of an expert declaration submitted by plaintiffs in opposition to defendants' summary judgment motion that presented a new theory on a key element of plaintiffs' claim). In Luke, the plaintiffs disclosed the expert declarations "more than three months after the deadline for initial expert disclosures and more than two months after the deadline for rebuttal disclosures." Id. at 499. Moreover, the declarations were submitted only ten weeks before trial and four days before the close of discovery. See id. As a threshold matter, the court found these declarations "were not timely under Rule 26(a)(2)(C)." Id. The court further concluded that no exception to the automatic exclusion provision applied as the plaintiffs did not show substantial justification or that the delay was harmless. See id. Just as in Luke, all of the expert deadlines have passed, there are 10 weeks until trial, and discovery is already closed; there can be no dispute that Levy's new opinions are untimely, and there are no grounds for an exception to the automatic exclusion rule. Levy expressly disavowed during his deposition that he intended to offer damages opinions in this case, and now he is doing just that--offering damages opinions in this case. Moreover, Levy had every opportunity to submit sur-rebuttal opinions to Spencer's report, and, in fact, did so. There is simply no justification for waiting until the Daubert stage to raise these opinions. This failure to disclose is harmful to Defendants. By waiting until the Daubert stage, Plaintiffs ensured that Defendants would have less than 3 weeks to respond to these new opinions, an almost unfathomable task. This is not an instance where an expert inadvertently failed to produce some tangential materials, or needed to briefly clarify existing opinions. These are entirely new opinions that require time, resources, and effort to fully evaluate; resources that even if it were possible, Defendants should not be required to expend on new expert opinions at this point in the case. If Levy's new opinions were timely made, Defendants would have had "a reasonable opportunity to prepare for effective cross examination and perhaps arrange for expert testimony from other witnesses evaluated . . . ." Fed. R. Civ. P. 26 Advisory Committee note (1993 Amendments) at ¶ 15. Defendants have been deprived of such opportunity. Plaintiffs should not be able to engage in such gamesmanship at this stage of the case. Like Luke, the Court
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should sustain Defendants objections and strike the declarations of Levy and all opinions contained therein. * * *

For the reasons stated above, the Court should sustain Defendants' evidentiary objections and strike: (a) the Levy Declaration In Support of Motion No. 1 to Exclude Clarke, including all opinions therein; and (b) the Levy Declaration In Support of Motion No. 6 to Exclude Spencer, including all opinions therein. Defendants reserve the right to object on additional grounds to any of the statements made in any of the declarations or any of the exhibits attached thereto, should that evidence be offered by Plaintiffs at trial or for any other purpose in this litigation.

Dated: September 9, 2010

JONES DAY By: /s/ Tharan Gregory Lanier Tharan Gregory Lanier Counsel for Defendants SAP AG, SAP AMERICA, INC., and TOMORROWNOW, INC.

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