Direct Marketing Association, The v. Huber

Filing 74

REPLY to Response to 72 Plantiff's Motion to Strike filed by Plaintiff Direct Marketing Association, The. (Schaefer, Matthew) Modified on 1/6/2011 to create linkage (sah, ).

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Civil Action No. 10-CV-01546-REB-CBS

The Direct Marketing Association,
Plaintiff,
v.
Roxy Huber, in her capacity as Executive
Director, Colorado Department of Revenue,
Defendant.

PLAINTIFF’S REPLY TO DEFENDANT’S RESPONSE TO
“PLAINTIFF’S MOTION TO STRIKE DEFENDANT’S ADDITIONAL, SURREPLY
BRIEFING ON PLAINTIFF’S MOTION FOR PRELIMINARY INJUNCTION,
FILED BY THE DEFENDANT AS AN UNTIMELY AND NON-CONFORMING MOTION
TO EXCLUDE THE TESTIMONY OF PLAINTIFF’S EXPERT WITNESSES” [#73]
______________________________________________________________________
Plaintiff, the Direct Marketing Association submits this reply to the Defendant’s
Response to “Plaintiff’s Motion to Strike Defendant’s Additional, Surreply Briefing
on Plaintiff’s Motion for Preliminary Injunction, Filed by the Defendant as an
Untimely and Non-Conforming Motion to Exclude the Testimony of Plaintiff’s
Expert Witnesses” [#73], filed on January 5, 2011 (“Defendant’s Response”).
In Defendant’s Response to the Plaintiff’s motion to strike, the Defendant argues
that her underlying amended motion to exclude Plaintiff’s experts from testifying at trial
under Fed. R. Evid. 702 [#71] is appropriate at this time, and should not be stricken,

because “there is no reason to wait to file 702 motions.” See Defendant’s Response at
2. But there are several reasons why the Defendant’s Rule 702 motion is not proper at
this stage of the proceedings, even taking it at face value as a motion filed in
anticipation of trial:


The Defendant’s motion is unripe. As the Defendant herself acknowledges, the
expert disclosures made by Plaintiff to date were expressly made in connection with
the Plaintiff’s motion for preliminary injunction, and not for trial. See Defendant’s
Response at 1-2. Whether the Plaintiff will rely upon these same expert opinions at
the time of trial (indeed, whether a trial will even be required) remains to be seen,
and could be influenced by countless factors and developments in the case.1

1

For example, two developments have already occurred, after the Plaintiff made its
expert disclosures on October 1, 2010, that may ultimately change, in certain respects, the
expert opinions presented by the Plaintiff at trial, although they in no way compromise the
Plaintiff’s right to a preliminary injunction at this time:
First, on or about November 4, 2010, the Department of Revenue (“Department”)
published new guidance (which was, incidentally, based on the input of the Defendant’s
litigation expert, Dieter Gable) as to the manner and form of the required Transactional Notices,
Annual Purchase Summaries to customers, and yearly Customer Information Reports to be
submitted to the Department. (The new Department guidance appears at
http://www.colorado.gov/cs/Satellite?c=Page&childpagename=Revenue%2FREVXLayout&cid=
1251581935261&pagename=REVXWrapper.) The Defendant’s expert, Gable, relied on such
guidance in providing his estimates of the cost of compliance for retailers, disclosed to the
Plaintiff on November 10, 2010, and presented in connection with the motion for preliminary
injunction. Because the new Department guidance was not yet published as of October 1, the
Plaintiff’s expert, Curt Barry, did not have the opportunity to review such Department
publications in preparing his report. Such guidance, however, may well be relevant to the
opinions Barry would ultimately offer at the time of trial. For present purposes, the new
guidance changes nothing: even Gable, who considered the new guidance in preparing his
opinions, estimates that the costs of compliance for affected retailers will be substantial, and
well in excess of the $1,000 per association member required under Chamber of Commerce v.
Edmondson, 594 F.3d 742, 756, 770-71 (10th Cir. 2010).
Second, on or about November 22, 2010, the Colorado State Auditor issued a report
regarding the security of confidential data maintained by Colorado government agencies, which
concluded that “the State is at high risk of a system compromise and/or data breach by
malicious individuals, including individuals both internal and external to the State.” See PUBLIC

2



Because it is unripe, the Defendant’s motion wastes judicial resources. Simply put,
the Defendant demands action from the Court now that may never be required, or
may require modification prior to trial.



The motion likewise causes unnecessary litigation expense. The Plaintiff is required
to expend time and resources to oppose a motion challenging trial evidence the
Plaintiff has not even offered for use at trial.



The motion violates the Court’s Practice Standards and basic pre-trial procedure,
which call for the filing of Rule 702 motions (and other pre-trial motions) under a Trial
Preparation Conference Order, issued only after discovery closes and trial is
imminent.
In fact, the Defendant’s motion to exclude is so out-of-time as a pre-trial motion

that it can only be understood as an attempt to secure additional, surreply briefing on
the motion for preliminary injunction, in violation of the Local Rules and the Court’s
October 1 Scheduling order. The Court should not sanction such gamesmanship.
REPORT, “Office of Cyber Security, Governor’s Office of Information Technology, Performance
Audit, November 2010” (Nov. 22, 2010) at 49. The Auditor reported that his office was “able to
compromise several state government networks and systems and gain unauthorized access to
thousands of individuals’ records. . . containing confidential data”. Id. (The Report appears at
http://www.leg.state.co.us/OSA/coauditor1.nsf/All/BD6BC417A140102C872577F3005B9705/$FI
LE/2068A%20IT%20Pentest%20Gov%20Office%20Nov%202010.pdf.) This information
regarding the lack of adequate security for confidential data maintained by the State could
directly affect the opinions offered by the Plaintiff’s marketing expert, Professor Kevin Keller,
regarding the impact on consumer purchasing decisions of the new law challenged by the
Plaintiff. Colorado consumers who learn through press reports or other sources (see, e.g.,
http://www.denverpost.com/legislature/ci_16852217) that the State Auditor believes data
maintained by the State is vulnerable to security breach may well alter their purchasing from
out-of-state retailers who are required to turn over confidential customer information to the
Department. Professor Keller rendered his opinions that the law will alter consumer purchasing
behavior in August 2010, without the benefit of the State Auditor’s recent report.

3

Because the motion is inappropriate at this point in the proceedings, it should be
stricken.
WHEREFORE, the DMA requests that the Court strike the Defendant’s Amended
Motion to Exclude the Testimony of Plaintiff’s Expert Witnesses F. Curtis Barry, Thomas
Adler, and Kevin Lane Keller, without prejudice.

Respectfully submitted,
Dated: January 6, 2010
s/ Matthew P. Schaefer
George S. Isaacson
Matthew P. Schaefer
BRANN & ISAACSON
184 Main Street, P. O. Box 3070
Lewiston, ME 04243−3070
Tel.: (207) 786−3566
Fax: [phone]
E-mail: [e-mail]
[e-mail]
Attorneys for The Direct Marketing
Association

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CERTIFICATE OF SERVICE
I hereby certify that on January 6, 2011, I electronically filed the foregoing,
Plaintiff’s Reply to Defendant’s Response to “Plaintiff’s Motion to Strike Defendant’s
Additional, Surreply Briefing on Plaintiff’s Motion for Preliminary Injunction, Filed By the
Defendant as an Untimely and Non-Conforming Motion to Exclude the Testimony of
Plaintiff’s Expert Witnesses” [#73] using the CM/ECF system, which will send
notification of such filing to counsel of record:
Jack Wesoky
Senior Assistant Attorney General
State of Colorado
1525 Sherman Street, 7th Floor
Denver, CO 80203
[e-mail]
Stephanie Lindquist Scoville
Senior Assistant Attorney General
State of Colorado
1525 Sherman Street, 7th Floor
Denver, CO 80203
[e-mail]
Melanie J. Snyder
Assistant Attorney General
State of Colorado
1525 Sherman Street, 7th Floor
Denver, CO 80203
[e-mail]
Attorneys for Defendant

s/ Matthew P. Schaefer
Matthew P. Schaefer

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