SB Liquidation Trust v. AU Optronics Corporation et al

Filing 170

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)

1
2
3
IN THE UNITED STATES DISTRICT COURT
4
FOR THE NORTHERN DISTRICT OF CALIFORNIA
5
6
7

IN RE: TFT-LCD (FLAT PANEL) ANTITRUST
LITIGATION
/

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

8
9
United States District Court
For the Northern District of California

10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

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
/

ORDER GRANTING DEFENDANTS’
MOTION TO EXCLUDE TESTIMONY
OF DAVID P. STOWELL PURSUANT TO
FED. R. EVID. 702

1

Currently before the Court is defendants’ motion to exclude certain testimony of expert witness

2

David P. Stowell. Pursuant to Civil Local Rule 7-1(b), the Court finds this matter suitable for

3

disposition without oral argument and therefore VACATES the hearing currently scheduled for

4

September 12, 2014. Having considered the parties’ papers, and for good cause appearing, the Court

5

hereby GRANTS defendants’ motion.

6
7

BACKGROUND
Plaintiffs hired Professor David P. Stowell “to provide an opinion as to whether the prices

9

implied by the Bernheim Report overcharge estimates (‘but-for prices’) would have caused the

10
United States District Court
For the Northern District of California

8

Defendants to curtail investments in their production facilities (‘fabs’) during the Conspiracy Period.”

11

Declaration of Emmet P. Ong in Support of Defendants’ Motion (“Ong Decl.”) Ex. A. During Track

12

1 discovery in this MDL, the Court considered the admissibility of Professor Stowell’s testimony.

13

See MDL Master Dkt. No. 8102 at 4-5. In that Order, the Court found that Professor Stowell’s

14

testimony regarding governmental policies in certain Asian countries was inadmissible because “he was

15

unable to provide any instance in which a Defendant company actually received government support

16

or explain how [his cited] examples were representative of the rest of Defendant companies.” Id. at 5.

17

The Court concluded that the proposed testimony was too speculative and therefore excluded it. Id.

18

In Track 2 discovery, Professor Stowell identifies two additional examples of purported

19

governmental support to defendants during the relevant period. Ong Decl. Ex. A ¶ 64; Ex. F ¶ 57. First,

20

Professor Stowell states that, during the relevant period in Taiwan, certain industrial parks were

21

maintained wherein the government had the option of investing in projects or providing tax incentives.

22

Id. Ex. A ¶ 64. He further notes that CMO, HannStar, and Chunghwa Picture Tubes all operated fabs

23

in industrial parks.

24

Second, Professor Stowell states that, in 2003, AUO signed a contract for a syndicated loan from

25

35 banks to finance fabs. Id. Ex. F ¶ 57. However, only one of the banks was government-affiliated,

26

id. Ex. A, and he is unaware of whether the Taiwanese government influenced, or attempted to

27

influence, that bank with respect to AUO’s loan, id. Ex. G.

28

Plaintiffs also plan to question Professor Stowell regarding the ownership structure of Asian
2

1

companies. Professor Stowell is expected to opine that the ownership structures of some Asian

2

companies are different from American companies, which in turn permits Asian companies to focus

3

more on long-term goals. Id. Ex. A ¶ 56.

4
5

Defendants now move to exclude Professor Stowell’s opinions regarding Asian government
support and ownership structures.

6
7

LEGAL STANDARD
Federal Rule of Evidence 702 permits the introduction of expert testimony only if: (1) “the

9

expert’s scientific, technical, or other specialized knowledge will help the trier of fact to understand the

10
United States District Court
For the Northern District of California

8

evidence or to determine a fact in issue,” (2) “the testimony is based on sufficient facts or data,” (3) “the

11

testimony is the product of reliable principles and methods,” and (4) “the expert has reliably applied the

12

principles and methods to the facts of the case.” Rule 702 requires courts to act as gatekeepers by

13

“making a preliminary determination of whether the expert’s testimony is reliable.” Elsayed Mukhtar

14

v. Cal. State Univ., Hayward, 299 F.3d 1053, 1063 (9th Cir. 2002); see Daubert v. Merrell Dow

15

Pharms., Inc., 509 U.S. 579, 597 (1993). The proponent of the expert testimony has the burden of

16

proving the proposed expert testimony is admissible. Lust ex rel. Lust v. Merrell Dow Pharm., Inc., 89

17

F.3d 594, 598 (9th Cir. 1996). Additionally, the decision whether to admit or exclude expert testimony

18

is soundly committed to the district court’s discretion. See GE v. Joiner, 522 U.S. 136, 141-42 (1997);

19

United States v. Calderon–Segura, 512 F.3d 1104, 1109 (9th Cir. 2008).

20
21

DISCUSSION

22

Defendants move to exclude Professor Stowell’s proposed testimony regarding Asian

23

governmental support, and Asian company structures, arguing that admission would violate Rule 702.

24

The Court finds that the proposed testimony suffers from the same flaws the Court identified in

25

the Track 1 cases: Professor Stowell’s opinions are not supported by evidence that applies specifically

26

to these defendants. The Court does not doubt Professor Stowell’s statement that the Taiwanese

27

government sometimes invested in, or offered tax incentives to, companies located in industrial parks,

28

or that CMO, HannStar, and Chunghwa Picture Tubes operated fabs in industrial parks during the
3

1

relevant period. However, there is no evidence that the Taiwanese government ever invested in these

2

companies or that these companies were offered tax incentives. Similarly, while the Court accepts as

3

true that AUO received a bank loan from a government-affiliated bank, plaintiffs present no evidence

4

that the government influenced that bank in any way, or that AUO could not have obtained this loan

5

without government influence.

6

With respect to Professor Stowell’s proposed testimony regarding Asian company structure, the

7

Court finds that this is also inadmissible, for the same reason. Even if many or most Asian companies

8

utilize a different ownership structure from the typical American company, this evidence is not helpful

9

to the jury because Professor Stowell cannot link it specifically to defendants’ companies.

United States District Court
For the Northern District of California

10

The Court finds that Professor Stowell’s proposed testimony regarding Asian government

11

support and Asian ownership structures is of limited probative value, and that any value it has is

12

substantially outweighed by the potential for prejudicial speculation. Accordingly, defendants’ motion

13

is GRANTED.

14
15

CONCLUSION

16

For the foregoing reasons and for good cause shown, and on the basis of the record before it, the

17

Court hereby GRANTS defendants’ motion to exclude. This Order resolves MDL Master Docket No.

18

9070.

19
20

IT IS SO ORDERED.

21
22

Dated: September 4, 2014
SUSAN ILLSTON
UNITED STATES DISTRICT JUDGE

23
24
25
26
27
28
4