Oculus Innovative Sciences, Inc. v. Prodinnv, S.A. de C.V. et al

Filing 70

ORDER DEFERRING RULING ON APPLICATION FOR DEFAULT JUDGMENT; AFFORDING PLAINTIFF OPPORTUNITY TO SUPPLEMENT APPLICATION; DENYING REQUEST FOR HEARING; CONTINUING CASE MANAGEMENT CONFERENCE. The Court defers ruling on Oculus's application for defau lt judgment, and gives Oculus leave to file, no later than October 8, 2010, supplemental declarations and a form of injunction. Oculus's request for a hearing on its application for default is denied; the case management conference is continued to December 10, 2010. Signed by Judge Maxine M. Chesney on September 8, 2010. (mmclc2, COURT STAFF) (Filed on 9/8/2010)

Oculus Innovative Sciences, Inc. v. Prodinnv, S.A. de C.V. et al

Doc. 70

1 2 3 4 5 6 7 8 9 10 For the Northern District of California 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Pursuant to Civil Local Rule 7-3(a), any opposition was to be filed no later than June 18, 2010.
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IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA

OCULUS INNOVATIVE SCIENCES, INC., Plaintiff, v. PRODINNV, S.A. DE C.V., and CESAR MANGOTICH PACHECO, Defendants. /

No. C 08-4707 MMC ORDER DEFERRING RULING ON APPLICATION FOR DEFAULT JUDGMENT; AFFORDING PLAINTIFF OPPORTUNITY TO SUPPLEMENT APPLICATION; DENYING REQUEST FOR HEARING; CONTINUING CASE MANAGEMENT CONFERENCE

United States District Court

Before the Court is plaintiff Oculus Innovative Sciences, Inc.'s ("Oculus") Application for Entry of Default Judgment against defendants Prodinnv, S.A. de C.V. and Cesar Mangotich Pacheco ("defendants"), pursuant to Rule 55(b)(2) of the Federal Rules of Civil Procedure, filed June 1, 2010. Although defendants have not appeared in the action, defendants were served with a copy of the motion, (see Attachment to Motion ("Certificate of Service by Mail") at 2), and no opposition has been filed.1 On September 2, 2010, Oculus filed a Request for Continuance of Case Management Statement and for a Hearing Date on Application for Entry of Default Judgment. Upon entry of default,2 "the factual allegations of the complaint, except those relating to the amount of damages, will be taken as true." See Televideo Systems, Inc. v.

The Clerk entered the default of each defendant on April 28, 2010.

Dockets.Justia.com

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Heidenthal, 826 F.2d 915, 917-18 (9th Cir. 1987). In its complaint, Oculus alleges that defendants misappropriated and wrongfully used, both in the United States and Mexico, Oculus's confidential information relating to Oculus's Microcyn technology and product. (See Compl. ¶¶ 11-14, 22-29.) Based thereon, Oculus asserts state law claims for breach of contract, misappropriation of trade secrets, interference with contract and with prospective economic advantage, and unfair competition. In its Application, Oculus seeks an award of damages "in the amount of $15,078,327," as well as "a permanent injunction against Defendants, prohibiting them from continued misappropriation of Plaintiff's Confidential Information and continued infringement of Plaintiff's products." (See Pl.'s Appl., filed June 1, 2010, at 2:23-27.) I. Calculation of Oculus's Losses In support of its claim for damages, Oculus offers the declaration of Robert Miller ("Miller"), who attests therein that "Oculus has suffered damages in the amount of $15,078,327, including past historical, future damages and capitalized continuing loss" (see Miller Decl. ¶ 6); attached to Miller's declaration are spreadsheets purporting to detail Oculus's losses (see Ex. A. to Miller Decl.). Oculus's showing is deficient in several respects. First, although Miller states he has personal knowledge of the matters contained in his declaration, that he has been Oculus's Chief Financial Officer since 2003, and that he prepared the spreadsheets attached to his declaration (id. at ¶¶ 1-3), he does not establish a sufficient foundation for how he arrived at the figures therein. See, e.g., KW Plastics v. U.S. Can Co., 131 F. Supp. 2d 1265, 1274 (M.D. Ala. 2001) (holding, witness testifying as to lost profits "cannot simply assert conclusions; his testimony must rest upon an antecedent predicate and foundation"; finding, general manager's "conclusory statements about [plaintiff's] profit margin, costs of production, equipment and labor costs, depreciation, total cost, and the like are inadmissible without a better foundation"). Miller's spreadsheets contain, inter alia, figures for the following line items for fiscal years 2003 through 2010: (1) "Loss of units" each fiscal year, reflecting "units not sold due to 2

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competition" (Miller Decl. Ex. A at 1 and n. 6); (2) "Average Price Per Unit" sold each fiscal year (id. and n. 7); and (3) "Target Price per Unit," which "refers to the $25 list price of [Oculus's] 5L units Oculus was bidding on and receiving in the past" (id. and n. 8). Miller, however, does not identify the type of records he reviewed to obtain such figures, nor does he explain how he calculated the losses claimed. Second, the spreadsheets appear to contain mathematical errors. In particular, the figures given for "Total Sales," a line item that purportedly "represents the total number of 5L units multiplied by the average price" (see id. and n. 4), appear to be inconsistent with the product of "Total 5L units" and "Average Price per Unit" as listed on the spreadsheet. For Fiscal Year 2006, for example, the "Total 5L units" listed is "18,792," and the "Average Price per Unit" listed is "7.0," the product of which is 131,544; the figure for "Total Sales" as listed on the spreadsheet, however, is "396,569." (Ex. A at 1.) Similarly, for Fiscal Year 2010, the "Total 5L units" listed is "78,304," and the "Average Price per Unit" listed is "14.0," the product of which is 1,096,256; the figure for "Total Sales" as listed on the spreadsheet, however, is "1,224,395." (Id.)3 II. Propriety of Award of Both Injunctive Relief and Damages for Future Losses Oculus seeks damages for future "projected losses" and future "continuing losses" for fiscal years 2011 through 2025 (Miller Decl. ¶¶ 4-6, and Ex. A, 2-4) while at the same time seeking injunctive relief prohibiting "continued misappropriation of Plaintiff's Confidential Information and continued infringement of Plaintiff's products." (See Pl.'s Appl., 2.) Oculus cites to no authority in support of its position that a party may obtain both injunctive relief and a damages award for future losses stemming from the enjoined conduct. Indeed, relevant authority would appear to be to the contrary. See Lemat Corp. v. Barry, 275 Cal. App. 2d 671, 679 (1969) (noting, "[t]he general rule is that a plaintiff in an injunction suit is entitled to no more than relief consisting of an injunction against future injury and damages for past injury"). The Court will, however, afford Oculus leave to file The above examples are provided for illustrative purposes and are not intended to set forth all matters requiring further elaboration. 3
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supplemental briefing regarding its entitlement, if any, to an award of both such forms of relief. III. Form of Permanent Injunction Oculus has not submitted a proposed permanent injunction. The Court will, however, afford Oculus leave to file a proposed injunction. CONCLUSION For the reasons stated above, the Court hereby DEFERS ruling on Oculus's application for default judgment, and will afford Oculus an opportunity to supplement its motion. Specifically, Oculus is hereby afforded leave to file, no later than October 8, 2010, a supplemental memorandum and one or more supplemental declarations to address the above-referenced deficiencies. Oculus's request for a hearing is hereby DENIED, and, as of October 8, 2010, the matter will stand submitted. If Oculus fails to file a timely supplement to its application, the Court will deny Oculus's application for default judgment in its entirety. If Oculus files a timely supplement but fails to submit therewith a proposed injunction, the Court will deem such failure an abandonment of the request for injunctive relief. In light of the above, the Case Management Conference scheduled for September 10, 2010 is CONTINUED to December 10, 2010. IT IS SO ORDERED.

Dated: September 8, 2010

MAXINE M. CHESNEY United States District Judge

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