SB Liquidation Trust v. AU Optronics Corporation et al
Filing
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ORDER GRANTING DEFENDANTS' MOTION TO EXCLUDE TESTIMONY OF DAVID P. STOWELL PURSUANT TO FED. R. EVID. 702 9070 in case 3:07-md-01827-SI (Illston, Susan) (Filed on 9/4/2014)
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IN THE UNITED STATES DISTRICT COURT
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FOR THE NORTHERN DISTRICT OF CALIFORNIA
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IN RE: TFT-LCD (FLAT PANEL) ANTITRUST
LITIGATION
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No. M 07-1827 SI
MDL No. 1827
This Order Relates To:
Nos. 3:10-cv-05458-SI; 3:11-cv-00829-SI;
3:11-cv-02225-SI; 3:11-cv-03763-SI; 3:11-cv03856-SI; 3:11-cv-04119-SI; 3:11-cv-05765SI; 3:11-cv-05781-SI; 3:11-cv-06241-SI 3:12cv-01426-SI; 3:10-cv-05625-SI
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United States District Court
For the Northern District of California
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SB Liquidation Trust v. AU Optronics Corp., et
al., 3:10-cv-05458-SI
MetroPCS Wireless, Inc. v. AU Optronics Corp.,
et al., 3:11-cv-00829-SI
Office Depot, Inc. v. AU Optronics Corp., et al.,
3:11-cv-02225-SI
Interbond Corp. of America v. AU Optronics
Corp., et al., 3:11-cv-03763-SI
Schultze Agency Services, LLC, on behalf of
Tweeter Opco, LLC and Tweeter Newco, LLC, v.
AU Optronics Corp., et al., 3:11- cv-03856-SI
P.C. Richard & Son Long Island Corp., et al. v.
AU Optronics Corp., et al., 3:11-cv-04119-SI
Tech Data Corp., et al. v. AU Optronics Corp., et
al., 3:11-cv-05765-SI
The AASI Creditor Liquidating Trust, by and
through Kenneth A. Welt, Liquidating Trustee v.
AU Optronics Corp., et al., 3:11- cv-05781-SI
CompuCom Systems, Inc. v. AU Optronics Corp.,
et al., 3:11-cv-06241-SI
NECO Alliance LLC v. AU Optronics Corp., et
al., 3:12-cv-01426-SI
Alfred H. Siegel, as Trustee of the Circuit City
Stores, Inc. Liquidating Trust v. AU Optronics
Corp., et al., 3:10-cv-05625-SI
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ORDER GRANTING DEFENDANTS’
MOTION TO EXCLUDE TESTIMONY
OF DAVID P. STOWELL PURSUANT TO
FED. R. EVID. 702
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Currently before the Court is defendants’ motion to exclude certain testimony of expert witness
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David P. Stowell. Pursuant to Civil Local Rule 7-1(b), the Court finds this matter suitable for
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disposition without oral argument and therefore VACATES the hearing currently scheduled for
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September 12, 2014. Having considered the parties’ papers, and for good cause appearing, the Court
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hereby GRANTS defendants’ motion.
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BACKGROUND
Plaintiffs hired Professor David P. Stowell “to provide an opinion as to whether the prices
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implied by the Bernheim Report overcharge estimates (‘but-for prices’) would have caused the
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United States District Court
For the Northern District of California
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Defendants to curtail investments in their production facilities (‘fabs’) during the Conspiracy Period.”
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Declaration of Emmet P. Ong in Support of Defendants’ Motion (“Ong Decl.”) Ex. A. During Track
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1 discovery in this MDL, the Court considered the admissibility of Professor Stowell’s testimony.
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See MDL Master Dkt. No. 8102 at 4-5. In that Order, the Court found that Professor Stowell’s
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testimony regarding governmental policies in certain Asian countries was inadmissible because “he was
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unable to provide any instance in which a Defendant company actually received government support
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or explain how [his cited] examples were representative of the rest of Defendant companies.” Id. at 5.
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The Court concluded that the proposed testimony was too speculative and therefore excluded it. Id.
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In Track 2 discovery, Professor Stowell identifies two additional examples of purported
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governmental support to defendants during the relevant period. Ong Decl. Ex. A ¶ 64; Ex. F ¶ 57. First,
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Professor Stowell states that, during the relevant period in Taiwan, certain industrial parks were
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maintained wherein the government had the option of investing in projects or providing tax incentives.
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Id. Ex. A ¶ 64. He further notes that CMO, HannStar, and Chunghwa Picture Tubes all operated fabs
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in industrial parks.
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Second, Professor Stowell states that, in 2003, AUO signed a contract for a syndicated loan from
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35 banks to finance fabs. Id. Ex. F ¶ 57. However, only one of the banks was government-affiliated,
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id. Ex. A, and he is unaware of whether the Taiwanese government influenced, or attempted to
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influence, that bank with respect to AUO’s loan, id. Ex. G.
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Plaintiffs also plan to question Professor Stowell regarding the ownership structure of Asian
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companies. Professor Stowell is expected to opine that the ownership structures of some Asian
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companies are different from American companies, which in turn permits Asian companies to focus
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more on long-term goals. Id. Ex. A ¶ 56.
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Defendants now move to exclude Professor Stowell’s opinions regarding Asian government
support and ownership structures.
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LEGAL STANDARD
Federal Rule of Evidence 702 permits the introduction of expert testimony only if: (1) “the
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expert’s scientific, technical, or other specialized knowledge will help the trier of fact to understand the
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United States District Court
For the Northern District of California
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evidence or to determine a fact in issue,” (2) “the testimony is based on sufficient facts or data,” (3) “the
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testimony is the product of reliable principles and methods,” and (4) “the expert has reliably applied the
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principles and methods to the facts of the case.” Rule 702 requires courts to act as gatekeepers by
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“making a preliminary determination of whether the expert’s testimony is reliable.” Elsayed Mukhtar
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v. Cal. State Univ., Hayward, 299 F.3d 1053, 1063 (9th Cir. 2002); see Daubert v. Merrell Dow
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Pharms., Inc., 509 U.S. 579, 597 (1993). The proponent of the expert testimony has the burden of
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proving the proposed expert testimony is admissible. Lust ex rel. Lust v. Merrell Dow Pharm., Inc., 89
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F.3d 594, 598 (9th Cir. 1996). Additionally, the decision whether to admit or exclude expert testimony
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is soundly committed to the district court’s discretion. See GE v. Joiner, 522 U.S. 136, 141-42 (1997);
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United States v. Calderon–Segura, 512 F.3d 1104, 1109 (9th Cir. 2008).
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DISCUSSION
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Defendants move to exclude Professor Stowell’s proposed testimony regarding Asian
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governmental support, and Asian company structures, arguing that admission would violate Rule 702.
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The Court finds that the proposed testimony suffers from the same flaws the Court identified in
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the Track 1 cases: Professor Stowell’s opinions are not supported by evidence that applies specifically
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to these defendants. The Court does not doubt Professor Stowell’s statement that the Taiwanese
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government sometimes invested in, or offered tax incentives to, companies located in industrial parks,
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or that CMO, HannStar, and Chunghwa Picture Tubes operated fabs in industrial parks during the
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relevant period. However, there is no evidence that the Taiwanese government ever invested in these
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companies or that these companies were offered tax incentives. Similarly, while the Court accepts as
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true that AUO received a bank loan from a government-affiliated bank, plaintiffs present no evidence
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that the government influenced that bank in any way, or that AUO could not have obtained this loan
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without government influence.
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With respect to Professor Stowell’s proposed testimony regarding Asian company structure, the
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Court finds that this is also inadmissible, for the same reason. Even if many or most Asian companies
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utilize a different ownership structure from the typical American company, this evidence is not helpful
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to the jury because Professor Stowell cannot link it specifically to defendants’ companies.
United States District Court
For the Northern District of California
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The Court finds that Professor Stowell’s proposed testimony regarding Asian government
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support and Asian ownership structures is of limited probative value, and that any value it has is
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substantially outweighed by the potential for prejudicial speculation. Accordingly, defendants’ motion
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is GRANTED.
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CONCLUSION
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For the foregoing reasons and for good cause shown, and on the basis of the record before it, the
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Court hereby GRANTS defendants’ motion to exclude. This Order resolves MDL Master Docket No.
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9070.
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IT IS SO ORDERED.
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Dated: September 4, 2014
SUSAN ILLSTON
UNITED STATES DISTRICT JUDGE
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