Sumotext Corp. -v- Zoove, Inc., et al

Filing 416

ORDER RE MOTIONS IN LIMINE 384 385 386 387 388 390 391 392 . Signed by Judge Beth Labson Freeman on February 3, 2020. (mdllcS, COURT STAFF) (Filed on 2/3/2020)

1
2
3

UNITED STATES DISTRICT COURT

4

NORTHERN DISTRICT OF CALIFORNIA

5

SAN JOSE DIVISION

6
7

SUMOTEXT CORP.,
Plaintiff,

8
9
10

United States District Court
Northern District of California

11
12

Case No. 16-cv-01370-BLF
ORDER RE MOTIONS IN LIMINE

v.
ZOOVE, INC., et al.,

[Re: ECF 384, 385, 386, 387, 388, 390,
391, 392]

Defendants.
Plaintiff Sumotext Corporation (“Sumotext”) brings this suit against Defendants Zoove,

13

Inc. (“Zoove”), Virtual Hold Technology LLC (“VHT”), VHT StarStar, and StarSteve, LLC

14

(“StarSteve”), alleging that Defendants have violated the federal antitrust laws in connection with

15

the leasing and servicing of “StarStar numbers.” After substantial motion practice, two claims

16

remain in the operative third amended complaint (“TAC”): Count IV for restraint of trade in

17
18
19
20
21
22
23
24
25
26
27
28

violation of Section 1 of the Sherman Act, and Count V for conspiracy to monopolize and
monopolization in violation of Section 2 of the Sherman Act. Trial in this case is scheduled to
begin on February 24, 2020.
On January 16, 2020, in advance of the Final Pretrial Conference, Defendants jointly filed
five motions in limine, ECF 384, 385, 386, 387, 388, and Plaintiff filed three motions in limine,
ECF 390, 391, 392. Each side responded to the other’s motions on January 23, 2020. ECF 396,
397, 398, 399, 400, 401, 402, 403. The Court held the Final Pretrial Conference in this case on
January 30, 2020, during which the Court heard oral argument on the motions in limine and issued
its rulings on the record. This order memorializes those rulings. For the reasons stated on the
record, and as summarized below, the Court orders as follows:

1
2
3
4
5
6
7
8

I.

Motions in limine are a “procedural mechanism to limit in advance testimony or evidence
in a particular area.” United States v. Heller, 551 F.3d 1108, 1111 (9th Cir. 2009). Like other
pretrial motions, motions in limine are “useful tools to resolve issues which would otherwise
clutter up the trial.” City of Pomona v. SQM N. Am. Corp., 866 F.3d 1060, 1070 (9th Cir. 2017).
Accordingly, “a ruling on a motion in limine is essentially a preliminary opinion that falls entirely
within the discretion of the district court.” Id.; see Luce v. United States, 469 U.S. 38, 41 n. 4
(1984) (explaining that a court may rule in limine “pursuant to the district court’s inherent
authority to manage the course of trials”).

9
10

LEGAL STANDARD

In many instances, however, rulings “should be deferred until trial, so that questions of
foundation, relevancy, and potential prejudice may be resolved in proper context.” United States

11

United States District Court
Northern District of California

v. Pac. Gas & Elec. Co., 178 F. Supp. 3d 927, 941 (N.D. Cal. 2016). After all, in order to exclude
12

evidence on a motion in limine, “the evidence must be inadmissible on all potential grounds.”

13
McConnell v. Wal-Mart Stores, Inc., 995 F. Supp. 2d 1164, 1167 (D. Nev. 2014). Thus, denial of
14
a motion in limine to exclude certain evidence does not mean that all evidence contemplated by
15
the motion will be admitted, only that the court is unable to make a comprehensive ruling in
16
17
18
19
20

advance of trial. Id. Even if a district court does rule in limine, moreover, the court may “change
its ruling at trial because testimony may bring facts to the district court’s attention that it did not
anticipate at the time of its initial ruling.” City of Pomona, 866 F.3d at 1070; see also Ohler v.
United States, 529 U.S. 753, 758 n.3 (2000) (“[I]n limine rulings are not binding on the trial judge,
and the judge may always change his mind during the course of a trial.”).

21
22

II.

PLAINTIFF’S MOTIONS IN LIMINE
Plaintiff brings three motions in limine. The Court addresses each in turn below.

23
24

A.

Plaintiff’s Motion in Limine No. 1

Plaintiff’s first motion in limine seeks to “preclude Defendants from arguing that their

25
anticompetitive conduct is justified because they sought to make more profits and prevent Zoove
26
27

from failing.” ECF 390 (“Pl. MIL No. 1”) at 2. To provide some context, Defendants argued at
the summary judgment stage that “Zoove has never made money, Defendants made a legitimate

28
2

1

business decision to pivot to a different business model, and such a decision cannot give rise to

2

antitrust liability.” ECF 382 at 23-24; see, e.g., ECF 336 at 17, 22-23. The Court acknowledged

3

that a legitimate business justification can avert antitrust liability in some cases but concluded that

4

Defendants were not entitled to summary judgment on those grounds. ECF 382 at 24. Plaintiff

5

now contends that Defendants should not be able to present their business justification defense to

6

the jury because the business justification is not “legitimate.” Defendants, of course, disagree.

7

They maintain that “Zoove was perfectly entitled to terminate its deal with Sumotext to increase

8

Zoove’s profits and make it a more viable company.” ECF 397 (“Opp. to Pl. MIL No. 1”).
As a general matter, Plaintiff is correct that “the promotion of self-interest alone does not

9

invoke the rule of reason to immunize otherwise illegal conduct.” Otter Tail Power Co. v. United

11

United States District Court
Northern District of California

10

States, 410 U.S. 366, 380 (1973). Thus, “the desire to make Zoove profitable,” Opp. to Pl. MIL

12

No. 1 at 2, is not, by itself, enough to justify “anticompetitive uses of [a company’s] dominant

13

economic power,” Otter Tail Power Co., 410 U.S. at 380-81. It is not, in the parlance of the Rule

14

of Reason, a “procompetitive benefit.” That is because the Sherman Act “assumes that an

15

enterprise will protect itself against” unprofitability “by operating with superior service, lower

16

costs, and improved efficiency” rather than “predatory practices.” Id.

17

Plaintiff, however, mischaracterizes Defendants’ defense. The legitimate business

18

justification issue properly arises with regard to Plaintiff’s claim of actual monopolization under

19

Section 2 against VHT StarStar.1 See ECF 398 at 15. Plaintiff “alleges that after obtaining

20

monopoly power in both relevant markets, VHT StarStar maintained its monopoly power through

21

. . . a practical refusal to deal . . . or a denial of access to an essential facility.” ECF 409 at 53

22

(Plaintiff’s proposed jury instruction for claim of actual monopolization). In other words,

23

Plaintiff’s theory of liability is based on VHT StarStar’s alleged unilateral refusal to deal.2

24
25
26
27
28

1

Plaintiff stated at the Final Pretrial Conference that it has dismissed certain defendants from
certain of its claims. These changes are reflected in Plaintiff’s proposed verdict form and
proposed jury instructions. See ECF 407 (Plaintiff’s verdict form). Relevant here, Plaintiff brings
its claim for actual monopolization under Section 2 of the Sherman Act against VHT StarStar (and
its wholly-owned subsidiary, Zoove) only. Id. at 6.
2
Plaintiff originally alleged a “group boycott” in violation of Section 1 of the Sherman Act. See
TAC ¶¶ 274-75. However, Plaintiff is apparently no longer pursuing a group boycott theory,
which is a theory of per se illegality, see TAC ¶ 274, NYNEX Corp. v. Discon, Inc., 525 U.S. 128,
3

1

Aerotec Int’l, Inc. v. Honeywell Int’l, Inc., 836 F.3d 1171, 1184 (9th Cir. 2016) (“The essential

2

facilities doctrine . . . is a variation on a refusal to deal claim.”). “As a general rule, a monopolist

3

has no duty to deal with its competitors.” High Tech. Careers v. San Jose Mercury News, 996

4

F.2d 987, 990 (9th Cir. 1993). On the contrary, the Supreme Court has repeatedly emphasized the

5

“high value” it “place[s] on the right to refuse to deal with other firms.” Aspen Skiing Co. v.

6

Aspen Highlands Skiing Corp., 472 U.S. 585, 601 (1985); see also Verizon Commc’ns Inc. v. Law

7

Offices of Curtis V. Trinko, LLP, 540 U.S. 398, 408 (2004) (“[A]s a general matter, the Sherman

8

Act does not restrict the long recognized right of a trader or manufacturer engaged in an entirely

9

private business, freely to exercise his own independent discretion as to parties with whom he will
deal.”) (internal quotation marks and alterations omitted). And although that right is not

11

United States District Court
Northern District of California

10

“unqualified,” the Supreme Court has “been very cautious in recognizing . . . exceptions.” Trinko,

12

540 U.S. at 408.

13

Plaintiff apparently appeals to the “narrow exception,” Aerotec Int’l, 836 F.3d at 1184,

14

recognized by the Supreme Court in Aspen Skiing Co. v. Aspen Highlands Skiing Corp., 472 U.S.

15

585 (1985). See also Trinko, 540 U.S. at 408 (“The leading case for § 2 liability based on refusal

16

to cooperate with a rival . . . is Aspen Skiing.”). In Aspen Skiing, as here, the Court considered

17

“the defendant’s decision to cease participation” in a course of dealing with the plaintiff. Trinko,

18

540 U.S. at 408. Specifically, “the defendant—who owned three of the four ski resorts in the

19

market—discontinued a joint lift-ticket package with a smaller rival, the only other competitor in

20

the market, and then flatly refused to sell the rival any lift tickets so it could create its own

21

bundles.” Aerotec Int’l, 836 F.3d at 1184 (citing Aspen Skiing, 472 U.S. at 592-94). The jury was

22

properly instructed that the defendant’s actions did not violate Section 2 “if valid business reasons

23

exist for that refusal.” Aspen Skiing, 472 U.S. at 604-05. The Court upheld the jury’s verdict in

24

favor of the plaintiff, which implied that “the jury concluded there were no valid business reasons

25

for the refusal.” Id. at 605. The Court explained: “The jury may well have concluded that [the

26

defendant] elected to forgo these short-run benefits because it was more interested in reducing

27
28

135 (1998). Instead, Plaintiff is only pursuing its Section 1 claim under the Rule of Reason.
ECF 409 at 19 (Plaintiff’s proposed jury instruction for Section 1).
4

1
2

competition in the Aspen market over the long run by harming its smaller competitor.” Id. at 608.
The Supreme Court has since made clear, however, that “Aspen Skiing is at or near the

3

outer boundary of § 2 liability.” Trinko, 540 U.S. at 409. The key fact in Aspen Skiing was that

4

“[t]he unilateral termination of a voluntary (and thus presumably profitable) course of dealing

5

suggested a willingness to forsake short-term profits to achieve an anticompetitive end.” Id.

6

(emphasis in original). That is, because the course of dealing the defendant terminated was

7

profitable, it “was apparently motivated entirely by a decision to avoid providing any benefit to”

8

the defendant’s competitor rather than any “normal business purpose.” Aspen Skiing, 472 U.S. at

9

608, 611. Terminating (or declining to engage in) an unprofitable course of dealing, however, is
another matter. “Economic necessity” and “business acumen”—and not the acquisition or

11

United States District Court
Northern District of California

10

maintenance of monopoly power—is the rationale for ending a course of dealing that is

12

unprofitable. Oahu Gas Serv., Inc. v. Pac. Res., Inc., 838 F.2d 360, 369 (9th Cir. 1988). That a

13

course of dealing is unprofitable is therefore a valid business reason. See id. (finding no Section 2

14

liability for Pacific Resources’ refusal to produce propane to sell to Oahu Gas where “the

15

investment required of Pacific Resources to produce propane would have resulted in a negative

16

return”); MetroNet Servs. Corp. v. Qwest Corp., 383 F.3d 1124, 1132 (9th Cir. 2004)

17

(distinguishing Aspen Skiing because defendant “Qwest attempted to change this prior course of

18

dealing after it realized that the resale of Centrex by MetroNet and others was having a

19

‘significantly negative’ impact on its own profitability”); High Tech. Careers, 996 F.2d at 992 (“If

20

Mercury News can prove its assertion” “that it was actually losing money from the insert,” “it

21

should prevail.”); Four Corners Nephrology Assocs., P.C. v. Mercy Med. Ctr. of Durango, 582

22

F.3d 1216, 1225 (10th Cir. 2009) (“[T]he evidence here suggests that Mercy refused to deal with

23

Dr. Bevan to avoid an unprofitable relationship, and that the hospital pursued the course it did to

24

protect and maximize its chances of profitability in the short-term. . . . Aspen Skiing does not

25

require more economic justification than this to avoid Section 2 liability.”); see also Drinkwine v.

26

Federated Publications, Inc., 780 F.2d 735, 740 (9th Cir. 1985) (“Drinkwine argues that the

27

Statesman was merely trying to make more money. Even that motive is consistent with

28

competition and the reasoning in Aspen Skiing.”).
5

1

Put another way, “there is ‘no duty to deal under the terms and conditions preferred by a

2

competitor’s rivals,’ there is only a duty not to refrain from dealing where the only conceivable

3

rationale or purpose is to sacrifice short-term benefits in order to obtain higher profits in the long

4

run from the exclusion of competition.” Aerotec Int’l, 836 F.3d at 1184 (quoting Pac. Bell Tel.

5

Co. v. Linkline Commc’ns, Inc., 555 U.S. 438, 457 (2009)).

6

In sum, once Plaintiff has presented evidence that Defendants’ refused to deal with it in

7

order to gain or maintain monopoly power, Defendants’ will be entitled to present evidence that it

8

did so because dealing with Plaintiff was unprofitable. See Eastman Kodak Co. v. Image Tech.

9

Servs., Inc., 504 U.S. 451, 483 (1992) (explaining that once plaintiffs “have presented evidence
that Kodak took exclusionary action to maintain its parts monopoly,” “liability turns . . . on

11

United States District Court
Northern District of California

10

whether ‘valid business reasons’ can explain Kodak’s actions”). Plaintiff can certainly contest

12

whether the deal was or would be unprofitable. See, e.g., High Tech. Careers, 996 F.2d at 992

13

(whether Mercury News “was actually losing money from the insert” “will be the issue at trial”).

14

But as just explained, ending an unprofitable course of dealing is a “valid business reason” that

15

would inoculate Defendants’ refusal to deal—even if the refusal necessarily excluded competition.

16

Oahu Gas, 838 F.2d at 369 (“[T]he desire to maintain market power—even a monopolist’s market

17

power—cannot create antitrust liability if there was a legitimate business justification.”).

18

That said, Defendants cannot proffer evidence or argument that it was merely “more

19

profitable” to exclude Plaintiff. Furthermore, as just explained, the valid business reasons defense

20

has only been recognized as to unilateral refusals to deal; it is inapplicable to Plaintiff’s conspiracy

21

claims. Accordingly, Plaintiff’s motion is DENIED in part and GRANTED in part.
Plaintiff’s Motion in Limine No. 2

22

B.

23

Second, Plaintiff asks the Court to limit the use of the trade name “StarStar Mobile” to

24

refer only to Defendant VHT StarStar and not to Defendant Zoove. ECF 391 (“Pl. MIL No. 2”) at

25

2. Because “StarStar Mobile” “is the registered fictitious name for VHT StarStar,” Plaintiff

26

believes it would be confusing for the jury if Defendants also use “StarStar Mobile” to refer to

27

Zoove. Id.

28

It is undisputed that VHT StarStar and Zoove—a wholly-owned subsidiary of VHT Star6

Star—are distinct legal entities. At the Final Pretrial Conference, however, Defendants asserted

2

that “StarStar Mobile” is not a registered dba name for either entity. In Defendants’ telling, the

3

name “StarStar Mobile” “actually does refer to both” entities: “[T]hey operate a single business

4

venture that is referred to internally and holds itself out to the public as ‘StarStar Mobile.’” ECF

5

396 (“Opp. to Pl. MIL No. 2”) at 2. “VHT StarStar is the entity that pays employees and makes

6

contracts with customers, while Zoove is the entity that holds contracts with mobile phone

7

operators and owns the relevant technology.” Id. But if, say, a company wants to lease a StarStar

8

number, it would visit the website https://starstarmobile.com. Id. Employees likewise “use

9

starstarmobile.com email accounts and boast StarStar Mobile signature lines.” Id. at 2-3. Hence,

10

say Defendants, “it is logical to refer to the entities by their technical legal names when describing

11

United States District Court
Northern District of California

1

only one or the other and then to refer to them collectively by their common name.” Id. at 3.

12

In light of the foregoing, Plaintiff’s motion is DENIED as to the request to use “StarStar

13

Mobile” to refer to VHT StarStar. Nevertheless, it is eminently clear that precision will be

14

necessary to avoid confusing the jury. The parties shall use the legal names for VHT StarStar and

15

Zoove to refer to those entities; the parties shall not use “StarStar Mobile” to refer to either VHT

16

StarStar or Zoove alone. Hence, the Court agrees with Plaintiff that Defendants cannot tell the

17

jury “that StarStar Mobile . . . terminated its business relationship with Sumotext (presumably

18

referring to Zoove), but yet is also the same company that had no course of dealing with Sumotext

19

(presumably referring to VHT StarStar).” Pl. MIL No. 2 at 2. At the same time, the Court will not

20

preclude the Defendants from explaining to the jury that “StarStar Mobile” was a fictitious name

21

used by both VHT StarStar and Zoove. Plaintiff is free to clarify or contest the respective roles of

22

VHT StarStar and Zoove on cross-examination (or re-direct examination, as the case may be).

23

In addition, in order to aid the jury, the parties shall prepare a chart identifying the name

24

that will be used to refer to each of the relevant entities. That chart must make clear that “StarStar

25

Mobile” is not an independent entity. The deadline for that submission is February 12, 2020.
Plaintiff’s Motion in Limine No. 3

26

C.

27

In its third motion in limine, Plaintiff seeks to bar Defendants from (1) arguing that the

28

dismissal of the contract and tortious interference claims “impacts the legal viability of Plaintiffs’
7

1

antitrust claims” or (2) introducing evidence “that Mblox was originally named as a defendant.”

2

ECF 392 (“Pl. MIL No. 3”) at 2-3. As the Court confirmed at the Final Pretrial Conference, the

3

parties agree that the fact of the dismissals—of the contract claim, of the tortious interference

4

claim, and of Mblox—is not relevant to Defendants’ liability vel non for the antitrust claims. See

5

also ECF No. 384 (“Def. MIL No. 1”) at 1 (“To be sure, Sumotext still can claim that Zoove’s

6

termination of its contracts with Sumotext violated antitrust law.”). Defendants may have violated

7

the antitrust laws regardless of whether Plaintiff’s have claims for breach of contract or tortious

8

interference. Likewise, the current Defendants’ liability in unaffected by the Court’s dismissal of

9

Mblox. Accordingly, the Court GRANTS Plaintiff’s motion, recognizing its limited scope.
Defendants’ opposition also raises issues that exceed the scope of Plaintiff’s motion but are

10

United States District Court
Northern District of California

11

squarely presented by Defendants’ first and second motions in limine. The Court addresses those

12

issues below.

13

III.

DEFENDANTS’ MOTIONS IN LIMINE

14

The Court now turns to Defendants’ five motions in limine.

15

A.

16

First, as alluded to earlier, Defendants also make a motion regarding references at trial to

17

the parties’ stipulated dismissals of the claims for breach of contract (Count I) and breach of the

18

covenant of good faith and fair dealing (Count II) in the TAC. Defendants make two requests, one

19

concerning what Plaintiff may present and another concerning what Defendants may present. The

20

former is GRANTED but the latter is DENIED.

21

Defendants’ Motion in Limine No. 1

As to what Plaintiff may present, Defendants ask the Court to bar Plaintiff from “making

22

any argument or offering any evidence advancing the theory that Zoove’s termination of

23

Sumotext’s contracts violated either contract law or the implied covenant of good faith and fair

24

dealing.” Def. MIL No. 1 at 2. The Court agrees that such argument would be improper in light

25

of the stipulated dismissals with prejudice. Plaintiff also represents that it “does not seek to

26

relitigate its claim against Defendants for breach of contract, breach of implied covenants, or

27

tortious interference.” ECF 398 (“Opp. to Def. MIL No. 1”) at 4. As Defendants acknowledge,

28

however, “Sumotext still can claim that Zoove’s termination of its contracts with Sumotext
8

1

violated antitrust law.” Def. MIL No. 1 at 1. That is, Plaintiff will be permitted to offer evidence

2

of conduct under the contract, including Zoove’s termination of its contracts with Sumotext.
As to what Defendants may present, Defendants seek permission “to inform the jury that it

4

was entitled under contract law to terminate its agreements with Sumotext.” Def. MIL No. 1 at 1.

5

No; that would be improper for two reasons. First of all, “voluntary dismissal of a claim prior to

6

any adjudication and without any stipulated findings of fact does not actually litigate any issue.”

7

Amadeo v. Principal Mut. Life Ins. Co., 290 F.3d 1152, 1159 (9th Cir. 2002). Consequently, there

8

has been no finding that Zoove did not commit a breach of contract or a breach of the covenant of

9

good faith and fair dealing. Second, as already discussed with regard to Plaintiff’s Motion in

10

Limine No. 3, Defendants’ liability (or lack thereof) for the contract claims is not relevant to

11

United States District Court
Northern District of California

3

Defendants’ liability for the antitrust claims.

12

However, should Plaintiff introduce evidence that Zoove terminated its contracts with

13

Sumotext in the course of its antitrust case, Defendants may tell the jury that they are not being

14

sued for breach of contract or breach of the covenant of good faith and fair dealing. To be clear,

15

Defendants may not refer to the dismissal of those claims, see supra Part II.C., but they may state

16

that there are no such claims currently in the case. Moreover, Defendant is entitled to bring

17

evidence that the termination (or any other conduct under the contract) was permitted by the

18

contracts at issue.

19
20

And again, Plaintiff may respond with evidence and argument that such conduct—whether
allowed by the contract or not, violated the antitrust laws.
Defendants’ Motion in Limine No. 2

21

B.

22

Defendants’ Motion in Limine No. 2 concerns the parties’ stipulated dismissals of the

23

claim for tortious interference with contract (Count III) in the TAC. ECF 385 (“Def. MIL No. 2”).

24

As in their Motion in Limine No. 1, Defendants address the evidence Plaintiff may introduce and

25

the evidence Defendants may introduce.

26

First, as with the contract claims, Plaintiff may not present evidence or argument

27

advancing the tortious interference claim that has been dismissed with prejudice. However, the

28

Court will not bar Plaintiff from making “[a]ny reference to pre-acquisition communications with
9

1

Sumotext’s customers.” Def. MIL No. 2 at 2. Defendants believe such references are irrelevant to

2

Plaintiff’s antitrust claim, but the Court is persuaded by Plaintiff’s briefing and arguments at the

3

Final Pretrial Conference that the communications may bear on Plaintiff’s allegation of conspiracy

4

to monopolize. The Court therefore DENIES Defendant’s motion to exclude all evidence

5

regarding Defendants’ pre-acquisition communications with Sumotext’s customers. Defendants

6

may, of course, object on relevance grounds to specific questions at trial.

7

Second, Defendants seek to argue that its “pre-termination communications with

8

Sumotext’s customers were permissible and proper” and it “did not tortiously interfere with

9

Sumotext’s customer contracts.” Def. MIL No. 2 at 1-2. Again, the voluntary dismissal of the
tortious interference claim is not sufficient to support such findings—which are also irrelevant to

11

United States District Court
Northern District of California

10

Plaintiff’s antitrust claims. The Court therefore DENIES Defendants’ motion as to this request.

12

As with the contract claims, the Court will permit Defendants to tell the jury that they are not

13

currently being sued for tortious interference with contract.
Defendants’ Motion in Limine No. 3

14

C.

15

In their third motion in limine, Defendants challenge the testimony of Plaintiff’s damages

16

expert, Dr. Alan Goedde, ECF 386 (“Def. MIL No. 3”) at 5. Dr. Goedde provides two damages

17

figures: (1) $3,048,300 for “Defendants’ breach of contract” and (2) $9,223,500 for “the alleged

18

antitrust violations.” ECF 386-2 (“”) ¶¶ 5-6. Defendants contend that neither of these opinions is

19

admissible and that, consequently, Dr. Goedde should not be permitted to testify at trial.

20

Turning first to Dr. Goedde’s testimony that Plaintiff suffered $3,048,300 in damages from

21

Defendants’ alleged breach of contract, Defendants argue this testimony is irrelevant. Plaintiff

22

does not oppose exclusion; it states that it “does not intend to offer Dr. Goedde’s breach-of-

23

contract damages calculation at trial.” ECF 401 (“Opp. to Def. MIL No. 3”) at 4. The Court

24

therefore GRANTS Defendants’ motion as to Dr. Goedde’s opinion regarding breach of contract

25

damages.

26

Defendants also move to exclude Dr. Goedde’s opinion that Plaintiff suffered $9,223,500

27

in damages from Defendants’ alleged antitrust violations. Defendants make two arguments: (i)

28

that Dr. Goedde has failed to apportion damages amongst Plaintiff’s different claims and legal
10

1

theories, and (ii) that Dr. Goedde did not consider data on StarStar number usage. Def. MIL No. 3

2

at 1. As set out below, the Court DENIES Defendants’ motion on both scores.

3

i.

Failure to Apportion Damages

4

There are several dimensions to Defendants’ apportionment argument.

5

First, Defendants claim that Dr. Goedde’s “antitrust calculation includes built-in damages
for breach of contract, too” and “offers the jury no way to back out Sumotext’s breach-of-contract

7

and tortious-interference damages.” Def. MIL No. 3 at 3-4. But there is no need to “back out”

8

these damages. Dr. Goedde has made clear that the entire $9,223,500 in damages is attributable to

9

the alleged antitrust violations. It is not true that Dr. Goedde’s antitrust calculation includes

10

damages “for claims that are no longer in this case,” Opp. to Def. MIL No. 3 at 4; it simply

11

United States District Court
Northern District of California

6

includes “conduct that is separately actionable for claims of tortious interference with contract and

12

breach of contract,” Goedde Report ¶ 5. If the contract claims remained in the case, adding

13

together the $3,048,300 in contract damages and $9,223,500 in antitrust damages might create a

14

double-counting problem—but that is not the present situation.

15

Second, Defendants object that Dr. Goedde provided a single damages estimate for

16

Plaintiff’s antitrust damages, without apportioning the damages amongst Plaintiff’s different legal

17

theories under Sections 1 and 2 of the Sherman Act or between the allegedly distinct leasing and

18

servicing markets. Def. MIL No. 3 at 1. Defendants are correct that “where an antitrust plaintiff

19

challenges multiple business practices of a defendant yet fails to disaggregate its proof of

20

damages,” the jury is left “without a reasonable basis for determining the amount by which the

21

plaintiff’s damage model figure should be reduced in the event that one or more of the challenged

22

business practices are not found to be exclusionary.” Litton Sys., Inc. v. Honeywell, Inc., No. CV

23

90-4823 MRP(EX), 1996 WL 634213, at *2 (C.D. Cal. July 24, 1996). Consequently, “[e]xcept in

24

circumstances where disaggregation is shown to be impossible or impractical, an antitrust plaintiff

25

challenging a variety of conduct is required to segregate damages attributable to particular

26

business practices.” Id. In Image Tech. Servs., Inc. v. Eastman Kodak Co., for example, the Ninth

27

Circuit ordered a new trial on damages stemming from Kodak’s monopolization in the service

28

market because the plaintiff’s expert did not distinguish between sales lost “due to Kodak’s
11

1

control over the parts market” and sales “lost due to Kodak’s service monopoly.” 125 F.3d 1195,

2

1223 (9th Cir. 1997); see also Comcast Corp. v. Behrend, 569 U.S. 27, 35-37 (2013) (refusing to

3

accept a model for damages that assumed four market distortions when only one remained at issue

4

in the case).

5

Nevertheless, the Court does not believe Dr. Goedde’s aggregated damages figure must be

6

excluded, for three reasons. To begin with, the disaggregation rule pertains to conduct, not legal

7

theories. The point is that damages may be awarded only for conduct that is unlawful. Where

8

certain conduct is unlawful under multiple theories of liability, a plaintiff need not—and indeed,

9

could not—disaggregate damages across each theory.

10

Second, the Court is mindful that, once the fact of an antitrust violation is established, the

United States District Court
Northern District of California

11

jury has broad latitude in assessing the amount of damages caused by that violation. See, e.g.,

12

Zenith Radio Corp. v. Hazeltine Research, Inc., 395 U.S. 100, 123 (1969) (damages are a “matter

13

of just and reasonable inference from the proof of defendants’ wrongful acts and their tendency to

14

injure plaintiffs’ business, and from the evidence of the decline in prices, profits and values, not

15

shown to be attributable to other causes”). Defendants worry that “the jury could conclude that

16

Zoove properly terminated Sumotext (and thus did not restrain trade under Count IV) but that the

17

methods by which the defendants acquired were improper (and thus that there was a conspiracy to

18

monopolize under Count V).” Def. MIL No. 3 at 2. But the latter violation may be sufficient to

19

establish the entire damages amount. Oltz v. St. Peter’s Community Hospital, 19 F.3d 1312 (9th

20

Cir. 1994), is instructive on this issue. In that case, plaintiff Oltz proved only that an initial

21

exclusive contract between the alleged conspirators violated the antitrust laws, but not that a later,

22

renegotiated contract was also unlawful. Id. at 1314. The Ninth Circuit held that Oltz was not

23

required to separate out damages resulting from the renegotiated contract: “Because the initial

24

conspiracy destroyed his practice, Oltz is entitled to seek recovery for all damages resulting from

25

the destruction of his business in Helena.” Id.; see also Nat’l Farmers’ Org., Inc. v. Associated

26

Milk Producers, Inc., 850 F.2d 1286, 1307 (8th Cir. 1988) (“[I]f an antitrust plaintiff alleges that

27

the defendant engaged in unlawful acts A, B, C, and D, and acts C and D are later rejected as a

28

basis of liability, it does not automatically follow that the damage award must be reduced. Rather,
12

1
2

if acts A and B support the entire damage award, it must be sustained.”).
The Court is more concerned about Dr. Goedde’s failure to apportion damages between the

3

allegedly distinct markets for leasing and serving StarStar numbers in the United States. For

4

instance, the jury could conclude that there is a distinct market for servicing StarStar numbers but

5

not for leasing StarStar numbers. Moreover, “conduct found anticompetitive in one market may

6

not be anticompetitive in another market.” Image Tech. Servs, 125 F.3d at 1224. Should the jury

7

find in Plaintiff’s favor as to only one market, Defendants have a plausible argument that

8

Sumotext’s lost profits from re-leasing alone should be disaggregated from its losses from having

9

been excluded from the servicing market. See Def. MIL No. 3 at 1-2.
It is premature to litigate such possibilities at this stage, however. The evidence at trial

11

United States District Court
Northern District of California

10

will determine whether Dr. Goedde’s damages estimate is incongruous with the jury’s liability

12

findings. Furthermore, as alluded to above, it may be that disaggregation is “impossible or

13

impractical.” Litton Sys., 1996 WL 634213, at *2. Plaintiff is entitled to show that damages

14

cannot be disaggregated across the various markets or courses of conduct in the instant case, at

15

which point “the burden shifts to the defendant to demonstrate the contrary.” Spray-Rite Serv.

16

Corp. v. Monsanto Co., 684 F.2d 1226, 1243 (7th Cir. 1982), aff’d, 465 U.S. 752 (1984).

17

In sum, Defendants’ concerns are well-taken, but insufficient to justify excluding Dr.

18

Goedde’s damages opinion. If the jury renders a split verdict and awards the full $9,223,500 in

19

damages, Dr. Goedde’s damages opinion may very well prove inadequate to support the damages

20

award. But that is properly addressed in a post-trial motion. See, e.g., Litton Sys., 1996 WL

21

634213, at *4 (ordering a new trial on damages). The motion in limine is, therefore, DENIED.

22
23

ii.

Failure to Consider Data on StarStar Number Usage

Defendants also object to Dr. Goedde’s antitrust damages calculation on the ground that he

24

“did not look at usage data”—i.e., data on the degree to which the downstream customers were

25

receiving calls on each of the StarStar numbers they were leasing. Def. MIL No. 3 at 4. As

26

background, Dr. Goedde’s damages calculation projected the lease revenues Plaintiff would have

27

earned through 2033. See ECF 346-6 ¶ 39. That calculation includes an estimate of net growth in

28

lease revenues, which in turn accounts for customer attrition—i.e., customers who would not have
13

1

renewed their leases with Plaintiff. Opp. to Def. MIL No. 3 at 6; see ECF 346-6 ¶ 39. Defendants

2

complain that Dr. Goedde did not base his estimate of customer attrition on usage data. Def. MIL

3

No. 3 at 4 (citing ECF 386-4 (“Goedde Tr.”) at 8-9). This is problematic, Defendants say, because

4

Dr. Goedde purportedly acknowledged that customer attrition is affected by usage rates when he

5

testified that “if a downstream customer wasn’t getting much use of the number, they would

6

cancel it.” Def. MIL No. 3 at 4.3
Plaintiff concedes that Dr. Goedde did not consider usage data. In fact, Dr. Goedde did not

7

calculate a customer attrition rate at all; instead, he estimated “net lease growth” rates for each

9

quarter. Those rates represent net growth, which means they “already account for cancellations

10

owing to a customer’s belief that their **numbers were not getting enough usage.” Opp. to Def.

11

United States District Court
Northern District of California

8

MIL No. 3 at 6. Consequently, Dr. Goedde did not need to separately estimate customer attrition.
The Court notes that Plaintiff’s representation that Dr. Goedde’s net growth rates include

12
13

“real-world cancellations,” id., is not strictly true. According to the footnotes in his report, Dr.

14

Goedde used “actual Q1 2016 growth, with quarterly step-downs through the end of 2017” for

15

2016 and 2017, but then switched to the 4.0% annual “long term growth rate projected by the

16

Federal Reserve” for 2018 to 2033. ECF 346-6 at 26, 28. In any event, the source of Dr.

17

Goedde’s net growth rates goes to the weight of his testimony, not to its admissibility. Again,

18

Defendants’ are free challenge the accuracy of Dr. Goedde’s estimates on cross-examination and

19

using their rebuttal expert witness. The Court DENIES the motion to exclude Dr. Goedde’s

20

damages opinion for failure to consider usage rates.
Defendants’ Motion in Limine No. 4

21

D.

22

Fourth, Defendants move to exclude portions of Plaintiff’s expert, Dr. Ryan Sullivan

23

pursuant to Daubert v. Merrell Pharmaceuticals, Inc., 509 U.S. 579 (1993). ECF 387 (“Def. MIL

24

No. 4”). Dr. Sullivan is an economist who has been retained by Plaintiff to testify on the scope of

25

the relevant markets in this case. ECF 402 (“Opp. to Def. MIL No. 4”).

26
27
28

Defendants cite “Goedde Tr. 123:9-19” for this quote but have failed to attach that portion of the
deposition to their motion. In any event, the Court does not rely upon the quoted testimony to rule
on the motion.
14
3

1

Federal Rule of Evidence 702 provides that a qualified expert may testify if “(a) the

2

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

3

understand the evidence or to determine a fact in issue; (b) the testimony is based on sufficient

4

facts or data; (c) the testimony is the product of reliable principles and methods; and (d) the expert

5

has reliably applied the principles and methods to the facts of the case.”

6

In Daubert, the Supreme Court held that Rule 702 requires the district court to act as a
gatekeeper to “ensure that any and all scientific testimony or evidence admitted is not only

8

relevant, but reliable.” 509 U.S. at 589. The Supreme Court discussed four factors that may be

9

inform the reliability determination: (1) whether the theory or technique used by the expert “can

10

be (and has been) tested”; (2) “whether the theory or technique has been subjected to peer review

11

United States District Court
Northern District of California

7

and publication”; (3) “the known or potential rate of error”; and (4) whether there is “general

12

acceptance” of the theory or technique in the “relevant scientific community.” Id. at 593-94; see

13

also Estate of Barabin v. AstenJohnson, Inc., 740 F.3d 457, 463 (9th Cir. 2014) (reciting factors).

14

Then, in Kumho Tire Co., Ltd. v. Carmichael, 526 U.S. 137, 147 (1999), the Supreme Court

15

clarified that the “basic gatekeeping obligation” articulated in Daubert applies not only to

16

scientific testimony but to all expert testimony. The Supreme Court also emphasized that the

17

reliability inquiry is a flexible one, and “whether Daubert’s specific factors are, or are not,

18

reasonable measures of reliability in a particular case is a matter that the law grants the trial judge

19

broad latitude to determine.” Id. at 153.

20

Pursuant to Rule 702 and Daubert, the district court must also “ensure that the proposed

21

expert testimony is relevant and will serve to aid the trier of fact.” United States v. Finley, 301

22

F.3d 1000, 1008 (9th Cir. 2002) (citing Daubert, 509 U.S. at 592-93).

23

Importantly, however, the district judge’s role under Daubert is as “a gatekeeper, not a fact

24

finder.” Primiano v. Cook, 598 F.3d 558, 564-65 (9th Cir. 2010) (internal quotation marks and

25

citation omitted). “When an expert meets the threshold established by Rule 702 as explained in

26

Daubert, the expert may testify and the jury decides how much weight to give that testimony.” Id.

27

at 565. “Shaky but admissible evidence is to be attacked by cross examination, contrary evidence,

28

and attention to the burden of proof, not exclusion.” Id. at 564.
15

1

Here, Defendants raise three objections to Dr. Sullivan’s proffered testimony. As

2

explained below, the Court agrees with Plaintiff that none of these justifies excluding or limiting

3

Dr. Sullivan’s testimony and DENIES Defendants’ motion.

4
5

iii.

Dr. Sullivan’s Opinions Regarding the Functionality of StarStar Numbers

First, Defendants argue that Dr. Sullivan should not be able to opine on “why **numbers
are different from other consumer engagement products” because (1) he “is not an expert on

7

consumer engagement” and (2) his opinions are not “beyond the common knowledge of the

8

average layman.” Def. Mot. No. 4 at 1. The opinions at issue identify the attributes that

9

purportedly distinguish StarStar numbers from competing consumer engagement products such as

10

short codes for texting, apps and websites, and 1-800 phone numbers. See ECF 387-2 (“Sullivan

11

United States District Court
Northern District of California

6

Report”) ¶¶ 91-98. For instance, Sullivan states that (i) StarStar numbers are “short, unique, and

12

easy to remember,” (ii) they “can be used with any mobile phone, require no additional software to

13

use, are easy for the brand to set up, are easy to use and free for the consumer, offer variable

14

length namespaces, and provide text, voice, and multimedia responses,” and (iii) are consequently

15

“functionally distinct” from various alternatives. Def. Mot. No. 4 at 1 (citing Sullivan Report ¶¶

16

91, 93-95).

17

As to Defendants’ argument regarding the scope of Dr. Sullivan’s expertise, Plaintiff

18

responds that Dr. Sullivan did not need specific expertise on StarStar numbers or the consumer

19

engagement industry to provide the opinions at issue. Opp. to Def. Mot. No. 4 at 3. Rather, as an

20

economist with a Ph.D from UC San Diego, he “applied his industrial organization economic

21

training” to the relevant products. Id.; see Sullivan Report ¶¶ 6-7. The Court agrees. The

22

threshold for expert qualifications under Federal Rule of Evidence 702 is “low: a minimal

23

foundation of knowledge, skill, and experience suffices.” PixArt Imaging, Inc. v. Avago Tech.

24

Gen. IP (Singapore) Pte. Ltd., No. C 10-00544 JW, 2011 WL 5417090, at *3 (N.D. Cal. Oct. 27,

25

2011) (citing Hangarter v. Provident Life & Acc. Ins. Co., 373 F.3d 998, 1015 (9th Cir. 2004)). In

26

light of this “broad conception of expert qualifications,” the Court holds that Dr. Sullivan has the

27

requisite expertise in “the general field” of economics to review data specific to the consumer

28

engagement industry and render an opinion on product differentiation in that industry. Hangarter,
16

1

373 F.3d at 1015, 1015 n. 12; see, e.g., In re Myford Touch Consumer Litig., No. 13-CV-03072-

2

EMC, 2016 WL 7734558, at *5 (N.D. Cal. Sept. 14, 2016) (“Although he has not worked

3

specifically with automobiles,” expert’s testimony about the technical problems with Ford’s

4

infotainment system fell within his “broad engineering and human factors expertise.”); Hynix

5

Semiconductor Inc. v. Rambus Inc., No. CV-00-20905 RMW, 2008 WL 73689, at *11 (N.D. Cal.

6

Jan. 5, 2008) (finding it was “within his economic expertise” for expert to testify as to “the effect

7

alternative technologies would have had on Rambus’s ability to wield market power” in various

8

specific technology markets). In the Court’s view, Dr. Sullivan’s “lack of particularized expertise

9

goes to the weight accorded [his] testimony, not to the admissibility of [his] opinion as an expert.”

10

United States District Court
Northern District of California

11

United States v. Garcia, 7 F.3d 885, 890 (9th Cir. 1993).
The Court likewise rejects Defendants’ contention that Dr. Sullivan’s opinion will not

12

“assist the trier of fact,” Fed. R. Evid. 702, because the jury can examine the same documents and

13

testimony cited by Dr. Sullivan and form their own views on the functionality of StarStar

14

numbers. Def. Mot. No. 4 at 1. Generally, “[e]xpert testimony assists the trier of fact when it

15

provides information beyond the common knowledge of the trier of fact.” Finley, 301 F.3d at

16

1008. Critically, however, the Ninth Circuit has admonished courts “not to overstate the scope of

17

the average juror’s common understanding and knowledge” in determining whether expert

18

testimony would be helpful to the jury. Id. at 1013. Although it is certainly possible that a juror

19

could compare the relevant products in this case and identify various similarities and differences,

20

Dr. Sullivan opines on the key dimensions across which the products compete. Furthermore,

21

courts have consistently allowed expert testimony on the differences across products in antitrust

22

cases and other contexts. Hence, the Court finds that his opinions are not so obvious as to be

23

unhelpful to the jury.

24

iv.

Dr. Sullivan’s Opinions Regarding Market Definition

25

Second, Defendants argue that Dr. Sullivan’s opinion that “there are distinct antitrust

26

markets for **number re-leasing and servicing” is invalid because he did not determine the “cross-

27

elasticity of demand between **numbers and the various alternative communication methods that

28

are the equivalent of StarStar numbers.” Def. MIL No. 4 at 2.
17

It is true that cross-elasticity of demand—i.e., “whether consumers view the products as

1
2

substitutes for each other,” Rebel Oil Co. v. Atl. Richfield Co., 51 F.3d 1421, 1435 (9th Cir.

3

1995)—is a guiding principle of product market definition. Newcal Indus., Inc. v. Ikon Office Sol.,

4

513 F.3d 1038, 1045 (9th Cir. 2008) (“The outer boundaries of a product market are determined

5

by . . . the cross-elasticity of demand between the product itself and substitutes for it.”) (quoting

6

Brown Shoe v. United States, 370 U.S. 294, 325 (1962)). A common method for establishing (or

7

disproving) the substitutability of two or more products is the “SSNIP” test, which “asks whether

8

a [hypothetical] monopolist in the proposed market could profitably impose a small but significant

9

and nontransitory price increase” (or “SSNIP”) on a product in the proposed market. Theme
Promotions, Inc. v. News Am. Mktg. FSI, 546 F.3d 991, 1002 (9th Cir. 2008). As the Ninth Circuit

11

United States District Court
Northern District of California

10

explained:
If a significant number of customers would respond to a SSNIP by
purchasing substitute products, the SSNIP would not be profitable for
the hypothetical monopolist. If a monopolist could not profitably
impose a SSNIP, the market definition should be expanded to include
those substitute products that constrain the monopolist’s pricing.

12
13
14
15

Id.
Defendants contend that Dr. Sullivan’s market definition opinion is unreliable because he

16
17

failed to perform the SSNIP test or otherwise calculate the cross-elasticity of demand between

18

StarStar numbers and various potential substitutes. Def. MIL No. 4 at 4-5. Instead, Defendants

19

say, Dr. Sullivan looked only to the large price differential across the products. Id. At the outset,

20

the Court agrees with Defendants that comparing existing prices is not a “SSNIP test” and that

21

“the scope of the relevant market is not governed by the presence of a price differential between

22

competing products.” Twin City Sportservice, Inc. v. Charles O. Finley & Co., 512 F.2d 1264,

23

1274 (9th Cir. 1975). What Defendants fail to recognize, however, is that the SSNIP test is a legal

24

test; it is not a form of scientific analysis. And Dr. Sullivan’s report makes clear that he did apply

25

the SSNIP test, albeit without reference to any empirical analysis. See Sullivan Report ¶¶ 103-

26

109.

27

The heart of Defendants’ objection, then, appears to be that Dr. Sullivan failed to

28

substantiate his conclusions under the SSNIP test using empirical analysis. To be sure, it may be
18

1

desirable to collect data and construct a formal econometric model of the SSNIP test. As Plaintiff

2

correctly emphasizes, however, there is no requirement in this Circuit that an expert use any

3

particular form of analysis in developing an opinion on market definition. Courts in this district

4

and others have often admitted expert testimony on market definition where the expert did not

5

conduct an econometric study. See, e.g., Apple iPod iTunes Antitrust Litig., No. 05-CV-0037

6

YGR, 2014 WL 4809288, at *7 (N.D. Cal. Sept. 26, 2014) (denying Daubert motion where

7

economics expert looked to “internal Apple documents, employee testimony, and discovery

8

responses, third-party information such as contemporaneous financial analysis and press

9

coverage”); Hynix Semiconductor Inc., 2008 WL 73689, at *10 (admitting expert report on market
definition though expert did not use the SSNIP test to determine if the technologies are close

11

United States District Court
Northern District of California

10

economic substitutes). That Dr. Sullivan’s opinions have a foundation in qualitative data such as

12

employee testimony, third-party industry analyses, and media coverage is enough to establish their

13

admissibility. See Sullivan Report ¶¶ 89-100, 108.

14

Accordingly, the Court DENIES Defendants’ motion to exclude Dr. Sullivan’s opinions

15

regarding market definition for having failed to conduct an econometric analysis. Defendants’

16

arguments that Dr. Sullivan’s opinions are conclusory and unpersuasive are proper subjects for

17

cross-examination.

18
19

v.

Dr. Sullivan’s Opinions Regarding Market Power

Defendants’ third objection is to Dr. Sullivan’s statement in his report that “Defendants

20

have possessed and exerted market power by way of the alleged anticompetitive conduct.” Def.

21

MIL No. 4 at 4 (quoting Sullivan Report ¶ 47). Because “market definition and market power are

22

essentially questions of fact” for the jury, id. at 5, Defendants believe this statement runs afoul of

23

the rule that “an expert witness cannot give an opinion as to her legal conclusion, i.e., an opinion

24

on an ultimate issue of law,” id. (quoting Hangarter, 373 F.3d at 1016). In response, Plaintiff

25

assures the Court that Dr. Sullivan will provide “economic opinions only” and not impermissible

26

legal conclusions.

27
28

To be precise, Federal Rule of Evidence 704(a) provides that “an opinion is not
objectionable just because it embraces an ultimate issue.” Legal conclusions, however, are
19

forbidden. This prohibition recognizes that “when an expert undertakes to tell the jury what result

2

to reach, this does not aid the jury in making a decision, but rather attempts to substitute the

3

expert's judgment for the jury’s.” United States v. Diaz, 876 F.3d 1194, 1197 (9th Cir. 2017)

4

(internal quotation marks and citation omitted). “Similarly, instructing the jury as to the

5

applicable law is the distinct and exclusive province of the court.” Hangarter, 373 F.3d at 1016.

6

At the same time, the Ninth Circuit has recognized that “it is sometimes impossible for an expert

7

to render his or her opinion on a subject without resorting to language that recurs in the applicable

8

legal standard.” Diaz, 876 F.3d at 1198. In Diaz, for instance, the Ninth Circuit affirmed the

9

district court’s decision to permit the Government’s medical expert to testify that the defendant’s

10

prescribing practices were “outside the usual course of medical practice” and lacking “legitimate

11

United States District Court
Northern District of California

1

medical purpose”—phrases that also appear in the elements of the relevant criminal statute. Id. at

12

1199. In sum, although an expert witness may express facts or opinions using “legal

13

terminology,” he may not explain the law to the jury or tell the jury how to apply the law to the

14

facts of the case. Nationwide Transp. Fin. v. Cass Info. Sys., Inc., 523 F.3d 1051, 1058-59 (9th

15

Cir. 2008).

16

Based on the foregoing principles, the Court holds that Dr. Sullivan may provide his expert

17

economic opinion as to whether Defendants possessed market power, to the extent that opinion is

18

supported by economic analysis. In so doing, he may use the term “market power.” Although that

19

term is used in antitrust jurisprudence, it does not have so “separate, distinct and specialized” a

20

meaning in the law as opposed to economics that its use rises to the level of a legal conclusion.

21

Diaz, 876 F.3d at 1198 (agreeing that “legitimate medical purpose” does not have a “separate,

22

distinct and specialized meaning” in law than it has in medicine). Dr. Sullivan may not, however,

23

give the bare conclusion that “Defendants have possessed and exerted market power by way of the

24

alleged anticompetitive conduct.” See Hynix Semiconductor Inc., 2008 WL 73689, at *13 (barring

25

an expert from testifying that the defendant’s conduct is “anticompetitive” because he “merely

26

attaches the label ‘anticompetitive’ to defendant’s actions without any “economic analysis”). In

27

addition, Dr. Sullivan may not instruct the jury on how “courts have defined the requisite market

28

power for claims brought under Sections 1 and 2 of the Sherman Act,” Sullivan Report ¶ 45, or
20

1

otherwise “go beyond providing a legal framework,” for his analysis, Huawei Techs., Co, Ltd v.

2

Samsung Elecs. Co, Ltd., 340 F. Supp. 3d 934, 965 (N.D. Cal. 2018).

3

In the instant motion, the only purportedly objectionable portion of Dr. Sullivan’s report

4

that Defendants cite is a single sentence summarizing his findings; Defendants have not attached

5

the sections of the report containing Dr. Sullivan’s substantive opinions. Because this record is

6

insufficient to justify the exclusion of particular testimony at the motion in limine stage, the

7

motion is DENIED.
Defendants’ Motion in Limine No. 5

8

E.

9

Last, Defendants are concerned that “Sumotext intends to call all six defense witnesses . . .
live as adverse witnesses during Sumotext’s case in chief.” ECF 388 (“Def. MIL No. 5”) at 1.

11

United States District Court
Northern District of California

10

Defendants acknowledge the “general right of a plaintiff to call adverse witnesses,” but ask the

12

Court to prohibit Sumotext from “calling all of the defense’s witnesses adversely” for two reasons:

13

(1) it would inconvenience the five witnesses who live in Florida to travel to San Jose twice, and

14

(2) it would produce “a disjointed trial narrative that would unfairly disadvantage the defendants.”

15

Id. at 1-2.

16

The Court is sympathetic to Defendants’ concerns. However, Defendants have cited no

17

authority for the proposition that calling all—rather than merely some—of the defense’s witnesses

18

is unfairly prejudicial, and the Court sees no principled basis upon which to determine which

19

witnesses may or may not be called. Hence, the Court will not arbitrarily limit the number of

20

defense witnesses Plaintiff may call during its case-in-chief. Instead, the Court will grant

21

Defendants’ alternative request to have the option of eliciting evidence for their case-in-chief from

22

their designated witnesses at the time that Plaintiff calls those witnesses; Defendants will not be

23

limited to cross-examining on topics covered during Plaintiff’s direct examination. Defendants

24

are also free to advise the jury that it is doing so for the convenience of the witness. Plaintiff has

25

not opposed this commonly-used trial practice. ECF 403 at 2. Defendants are not, of course,

26

required to put on their full case during Plaintiff’s case-in-chief; they may call their witnesses a

27

second time if they so choose.

28

Defendants’ motion is DENIED as to the request to limit the witnesses Plaintiff may call
21

1

but GRANTED as to the request to fully examine the defense witnesses when they are called by

2

Plaintiff.

3

IV.

4
5

ORDER
For the foregoing reasons, the Court rules on Plaintiff’s motions in limine as follows:
•

Motion in Limine No. 1, ECF 390: DENIED in part without prejudice and
GRANTED in part.

6
7

•

Motion in Limine No. 2, ECF 391: DENIED without prejudice.

8

•

Motion in Limine No. 3, ECF 392: GRANTED.

9
10

The Court rules on Defendants’ motions in limine as follows:
•

prejudice in part.

11

United States District Court
Northern District of California

Motion in Limine No. 1, ECF 384: GRANTED in part and DENIED without

12

•

Motion in Limine No. 2, ECF 385: DENIED without prejudice.

13

•

Motion in Limine No. 3, ECF 386: DENIED without prejudice.

14

•

Motion in Limine No. 4, ECF 387: DENIED without prejudice.

15

•

Motion in Limine No. 5, ECF 388: DENIED as to the request to limit the witnesses

16

Plaintiff may call but GRANTED as to the request to fully examine the defense

17

witnesses when they are called by Plaintiff rather than call the witnesses a second

18

time.

19
20
21
22

IT IS SO ORDERED.
Dated: February 3, 2020
______________________________________
BETH LABSON FREEMAN
United States District Judge

23
24
25
26
27
28
22