TimesLines, Inc v. Facebook, Inc.

Filing 141

MEMORANDUM by Facebook, Inc. in support of motion in limine 139 to Exclude Evidence, Testimony, and Argument Relating to Facebook, Inc.'s Overall Financial Condition and Net Worth (Attachments: # 1 Declaration of Brendan Hughes, # 2 Exhibit A)(Willsey, Peter)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
TIMELINES, INC.
Plaintiff,
v.
FACEBOOK, INC.
Defendant.

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Civil Action No.: 11 CV 6867
HONORABLE JOHN W. DARRAH

FACEBOOK, INC.’S MOTION IN LIMINE NO. 5: TO EXCLUDE EVIDENCE,
TESTIMONY, AND ARGUMENT RELATING TO FACEBOOK, INC.’S
OVERALL FINANCIAL CONDITION AND NET WORTH
I.

INTRODUCTION
Defendant Facebook, Inc. (“Facebook”) respectfully moves this Court in limine for an

order excluding evidence, testimony, and argument relating to Facebook’s overall financial
condition and net worth – e.g., the valuation of the company as a whole, the ability of Facebook
to pay damages, proceeds and any other facts related to Facebook’s initial public offering,
revenues and profits from anything other than advertising on users’ “profile/timeline” pages, and
other indicators of the size and value of Facebook’s entire business. Facebook anticipates that
Plaintiff Timelines, Inc. (“Plaintiff”) will attempt to reference Facebook’s overall financial
condition and net worth at trial. This evidence is irrelevant to any issue in this case and should
be excluded under Federal Rules of Evidence 401 and 402. In the alternative, this evidence
should be excluded under Federal Rule of Evidence 403 because its probative value is
substantially outweighed by the likelihood that it will unfairly prejudice Facebook and waste the
Court’s time.
II.

BACKGROUND
Plaintiff purports to own “Timelines,” “Timelines.com,” and a stylized version of

“Timelines” as trademarks. (Dkt. No. 27, Am. Compl. ¶ 19.) Plaintiff alleges that Facebook’s

use of the term “timeline” in connection with a feature on its social media website that organizes
user content in chronological order constitutes forward and reverse trademark infringement, false
designation, and unfair competition under the Lanham Act (Counts I-IV of Plaintiff’s Amended
Complaint), unfair and deceptive acts and practices under the Illinois Consumer Fraud and
Deceptive Practices Act (Count V), and deceptive trade practices under the Illinois Uniform
Deceptive Trade Practices Act (Count VI). (Id. at ¶¶ 40-42, 48-49, 55-56, 68, 74.)
In support of its efforts to obtain a monetary award, Plaintiff relies on one expert witness
(Declaration of Brendan J. Hughes in Support of Defendant Facebook, Inc.’s Motion in Limine
No. 5 (“Hughes Decl.”), Ex. A (Hand Depo.) at 250:10-14.), who bases his theory for monetary
recovery exclusively on the profits Facebook allegedly gained from using the term “timeline.”
(Hughes Decl., Ex. B (Haas Report) ¶ 16.) Plaintiff’s expert did not opine on any actual
damages sustained by Plaintiff, as there is no evidence whatsoever to suggest that there were
any.
Facebook has provided Plaintiff with financial data relating to advertising displayed on
the Facebook user pages previously known as “profile” and subsequently known as “timeline.”
Plaintiff does not need to use any evidence relating to Facebook’s overall financial condition and
net worth for its profits calculation.
III.

ARGUMENT
A.

Evidence Relating to Facebook’s Overall Financial Condition and Net Worth
Is Inadmissible Because It Is Irrelevant.

Federal Rule of Evidence 401 provides that evidence is relevant if it “has any tendency to
make a fact more or less probable than it would be without the evidence.” FED. R. EVID. 401.
Evidence that is not relevant is inadmissible. FED. R. EVID. 402.

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As a general rule, evidence of a party’s financial condition is inadmissible unless punitive
damages are at issue. Van Bumble v. Wal-Mart Stores, Inc., 407 F.3d 823, 826-827 (7th Cir.
2005) (punitive damages were not at issue and the court affirmed the district court’s decision to
exclude evidence relating to plaintiffs’ financial situation because it was irrelevant and would be
prejudicial to the jury’s determination of damages); U.S. v. Fuesting, 845 F.2d 664, 673 (7th Cir.
1988) (affirming the district court’s decision to exclude evidence relating to the defendant’s
financial transactions and general financial status under Rules 401 and 402 because they were
irrelevant to the offenses with which he was charged); Pivot Point Int’l, Inc. v. Charlene Prods.,
Inc., 932 F.Supp. 220, 223 (N.D. Ill 1996) (finding a party’s financial information irrelevant
except perhaps to the issue of punitive damages under a state law claim); Fopay v. Noveroske, 31
Ill.App.3d 182, 199 (1975) (citing Hedge v. Midwest Contractors Equip. Co., 53 Ill.App.2d 365
(1964)) (“when [only] compensatory damages are in issue, evidence of a party’s wealth is clearly
inadmissible”); see also Whiteley v. OKC Corp., 719 F.2d 1051, 1055 (10th Cir. 1983) (citing 22
Am.Jur.2d Damages § 322 (1965)) (“To admit financial condition evidence, the damages to be
determined must be punitive in nature.”).
Punitive damages are not at issue in this case. For five of Plaintiff’s six alleged counts,
punitive damages are not available under applicable law. Plaintiff’s Counts I-IV assert alleged
violations of the Lanham Act, which the courts have consistently held prohibits an award of
punitive damages. BASF Corp. v. Old World Trading Co., 41 F.3d 1081, 1096 (7th Cir. 1994)
(the Lanham Act has been construed to expressly forbid the award of damages to punish an
infringer, i.e., punitive damages). Plaintiff’s Count VI claims an alleged violation of the Illinois
Uniform Deceptive Trade Practices Act, which only permits injunctive relief — not damages,
punitive or otherwise. See Fedders Corp. v. Elite Classics, 279 F.Supp.2d 965, 972 (S.D. Ill.

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2003) (citing Greenberg v. United Airlines, 206 Ill.App.3d 40 (1990)) (the Illinois Uniform
Deceptive Trade Practices Act “does not provide a cause of action for damages….”).
Under Plaintiff’s remaining cause of action (Count V), for an alleged violation of the
Illinois Consumer Fraud and Deceptive Practices Act (“Consumer Fraud Act”), Plaintiff is not
entitled to punitive damages because it has not suffered actual damages. Dubey v. Public
Storage, Inc., 395 Ill.App.3d 342, 356 (2009) (plaintiff must prove that it sustained actual
damage in order to recover damages under the Consumer Fraud Act); Kirkpatrick v. Strosberg,
385 Ill.App.3d 119, 132 (2008) (citing 815 ILCS 505/10a) (if a person cannot show it suffered
actual damage an award of punitive damages is not unavailable); Keefe v. Allied Home Mortg.
Corp., 393 Ill.App.3d 226, 235 (2009) (citing Farm Mutual Automobile Ins. Co. v. Campbell,
538 U.S. 402 (2002)) (punitive damages cannot be awarded unless actual damages are proven).
Plaintiff relies exclusively on one expert witness to attempt to establish a basis for
monetary relief in this case. (Hughes Decl., Ex. A (Hand Depo.) at 250:10-14.) Plaintiff’s
expert’s theory for relief is based only on Facebook’s alleged profits attributable to its allegedly
infringing use of the term “timeline,” not any actual damages suffered by Plaintiff. (Hughes
Decl., Ex. B (Haas Report), ¶ 16.) Plaintiff has not and cannot prove it has sustained any actual
damages – nor has it tried. See id. Given that Plaintiff has not produced any evidence that it
suffered actual damages, Plaintiff is not entitled to punitive damages under the Consumer Fraud
Act.
Because punitive damages are not at issue in this case, evidence, testimony, and argument
relating to Facebook’s financial condition or its overall net worth is irrelevant and thus
inadmissible. See Fuesting, 845 F.2d at 673; Pivot Point Int’l, 932 F.Supp. at 223. Accordingly,
the Court should exclude any such evidence from trial, including facts, testimony, and argument

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concerning the valuation of the company as a whole, the ability of Facebook to pay damages,
proceeds and any other facts related to Facebook’s initial public offering, revenues, and profits
from anything other than advertising on users’ “profile/timeline” pages, and other indicators of
the size and value of Facebook’s entire business.
B.

Evidence Regarding Facebook’s Overall Financial Condition and Net Worth
Should Also Be Excluded Under Federal Rule of Evidence 403.

Federal Rule of Evidence 403 provides that even relevant evidence should be excluded if
its probative value is substantially outweighed by the danger of unfair prejudice, confusing the
issues, wasting time, and misleading and inflaming the jury. FED. R. EVID. 403. See also Empire
Gas Corp. v. American Bakeries Co., 646 F.Supp. 269, 276 (N.D. Ill 1986) (citing Fed. R. Evid.
403) (courts are empowered to exclude even relevant evidence “if its probative value is
substantially outweighed by the danger of unfair prejudice or confusion of the issues, or
…wasting time….”). The Supreme Court has cautioned that “the presentation of evidence of a
defendant's net worth creates the potential that juries will use their verdicts to express biases
against big businesses, particularly those without strong local presences.” Honda Motor Co. v.
Oberg, 512 U.S. 415, 423 (1994).
Evidence, testimony, and argument relating to Facebook’s overall financial condition and
net worth should be excluded from this case under Federal Rule of Evidence 403. See Rebolledo
v. Herr-Voss Corp., 101 F.Supp.2d 1034, 1037 (N.D. Ill. 2000) (excluding evidence relating to
the defendant’s financial position under Fed. R. Evid. 403 because it only would appeal to the
sympathy of the jury). Information regarding Facebook’s financial condition and overall net
worth would only encourage the jury to take money from a large, non-local corporate defendant
and award it to Plaintiff – even though Plaintiff cannot prove any wrongdoing by Facebook or
that Plaintiff is entitled to any monetary recovery. Federal Rule of Evidence 403 is meant to
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protect against this type of unfair prejudice. FED. R. EVID. 403, Advisory Committee Notes
(unfair prejudice “means an undue tendency to suggest decision on an improper basis”). Further,
this evidence will unnecessarily waste the Court's time as it has no bearing on the merits of the
dispute.
IV.

CONCLUSION
Based on the foregoing, Facebook respectfully requests that the Court exclude any

evidence, testimony, or argument relating to Facebook’s financial condition and overall net
worth, specifically including the valuation of the company as a whole, the ability of Facebook to
pay damages, proceeds and any other facts related to Facebook’s initial public offering, revenues
and profits from anything other than advertising on users’ “profile/timeline” pages, and other
indicators of the size and value of Facebook’s entire business.

Respectfully submitted,

Dated: April 8, 2013
COOLEY LLP
By:

/s/ Peter J. Willsey
Peter J. Willsey (pro hac vice)
Brendan Hughes (pro hac vice)
1299 Pennsylvania Ave., NW Suite 700
Washington, DC 20004
Tel: [phone]
Fax: [phone]
Email: [e-mail]
[e-mail]

Steven D. McCormick (#1824260)
KIRKLAND & ELLIS LLP
300 North LaSalle
Chicago, IL 60654-3406
Tel: [phone]; Fax: [phone]
Email:[e-mail]

Michael G. Rhodes (pro hac vice)
101 California Street, 5th Floor
San Francisco, CA 94111-5800
Tel: [phone]
Fax: [phone]
Email: [e-mail]
Counsel for Facebook, Inc.
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CERTIFICATE OF SERVICE
The undersigned, an attorney, hereby certifies that he served the foregoing FACEBOOK,
INC.’S MOTION IN LIMINE NO. 5: TO EXCLUDE EVIDENCE, ARGUMENT, AND
TESTIMONY RELATING TO FACEBOOK, INC.’S FINANCIAL CONDITION AND
OVERALL NET WORTH by means of the Court’s CM/ECF System, which causes a true and
correct copy of the same to be served electronically on all CM/ECF registered counsel of record,
on April 8, 2013.

Dated: April 8, 2013
/s/ Brendan J. Hughes
Brendan J. Hughes (pro hac vice)
COOLEY LLP
1299 Pennsylvania Ave., NW Suite 700
Washington, DC 20004-2400
Tel: [phone]
Fax: [phone]
Email: [e-mail]

1113681 HN

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