Weather Underground, Incorporated v. Navigation Catalyst Systems, Incorporated et al

Filing 251

RESPONSE to 236 MOTION in Limine to Exclude Discussion of Plaintiff's Actual Damages and of Defendants' Monetary Gain and Brief in Support filed by Connexus Corporation, Firstlook, Incorporated, Navigation Catalyst Systems, Incorporated. (Delgado, William)

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF MICHIGAN

THE WEATHER UNDERGROUND, INC.,
a Michigan corporation,
Plaintiff,
Case No. 2:09-CV-10756
Hon. Marianne O. Battani

vs.
NAVIGATION CATALYST SYSTEMS, INC.,
a Delaware corporation; CONNEXUS CORP.,
a Delaware corporation; FIRSTLOOK, INC.,
a Delaware corporation; and EPIC MEDIA
GROUP, INC., a Delaware corporation,

Defendants.
______________________________________________________________________
Enrico Schaefer (P43506)
Brian A. Hall (P70865)
TRAVERSE LEGAL, PLC
810 Cottageview Drive, Unit G-20
Traverse City, MI 49686
231-932-0411
[e-mail]
[e-mail]
Lead Attorneys for Plaintiff

William A. Delgado
WILLENKEN WILSON LOH & LIEB LLP
707 Wilshire Boulevard, Suite 3850
Los Angeles, CA 90017
[phone]
[e-mail]
Lead Counsel for Defendants

Nicholas J. Stasevich (P41896)
Benjamin K. Steffans (P69712)
Anthony P. Patti (P43729)
BUTZEL LONG, P.C.
HOOPER HATHAWAY, PC
150 West Jefferson, Suite 100
126 South Main Street
Detroit, MI 48226
Ann Arbor, MI 48104
[phone]
734-662-4426
[e-mail]
[e-mail]
[e-mail]
Attorneys for Plaintiff
Local Counsel for Defendants
______________________________________________________________________
CONNEXUS, FIRSTLOOK, AND NCS’S EVIDENTIARY OBJECTIONS AND
RESPONSE TO PLAINTIFF’S MOTION TO EXCLUDE EVIDENCE OF PLAINTIFF’S
ACTUAL DAMAGES AND DEFENDANTS’ ACTUAL PROFITS

121061.1

MEMORANDUM OF POINTS AND AUTHORITIES
I.

INTRODUCTION.
Defendants’ Motion in Limine No. 6 addresses the same issue as Plaintiff’s Motion on

Actual Damages; to wit, the admissibility of Plaintiff’s actual harm/damages and Defendants’
actual profits. For that reason, and in the interest of judicial efficiency, this response to
Plaintiff’s Motion will incorporate Defendants’ own Motion. However, Plaintiff’s Motion
advances a handful of arguments which merit their own response, and those arguments are
addressed below.
II.

ARGUMENT.
A.

THE COURT SHOULD IGNORE PLAINTIFF’S STRAWMAN ARGUMENTS.

In support of its motion, Plaintiff offers various strawman arguments that are, quite
simply, inapposite. For example, Plaintiff argues that “proof of actual damages is unnecessary”
because the ACPA allows Plaintiff to elect statutory damages. No one contests that. Defendants
are not arguing (and do not intend to argue) that proof of actual damages is necessary. As
explained, infra, however, that does not mean that actual damages are irrelevant.
Plaintiff also argues that proving actual damages is “often” extremely difficult. Perhaps
that is true in many other cases. Defendants express no opinions as to other cases. Nevertheless,
that is not true in this case. Plaintiff’s method of revenue generation is straightforward: it makes
money when visitors to its websites click on the advertisements on the websites. One method of
calculating the lost revenue from “misdirected visitors” (as Plaintiff alleges) is easy and simply
requires the multiplication of three numbers. First, Defendants have produced documents and
information which show the number of visitors to the domain names at issue in this case.

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Second, Plaintiff likely knows the conversion rate for their own website (i.e., how many visitors
to their website click on one of their advertisements) (or, if they do not know, can certainly
figure it out). Third, they certainly know (or can figure out) the average revenue per click. From
there, figuring out lost revenue is just a matter of multiplying these three numbers:
Number of Defendants’ visitors1 x Conversion Rate x Average Revenue Per Click.
Clearly, determining lost revenue is not nearly as difficult as Plaintiff would have the Court
believe. Indeed, it would likely take less than 1 hour to assemble this information and perform
the calculation.
The reality, though, is that Plaintiff never so much as made an effort to quantify its actual
damages, and Plaintiff’s own motion makes it clear why. Plaintiff purposefully avoiding
calculating its own actual damages—not because it was difficult—but because Defendants’
alleged actions result in “only a few cents per click on each domain” rendering Plaintiff’s actual
damages “de minimous [sic].” Mot. at 1. As Plaintiff readily admits, “only a large group of
plaintiffs banding together…would be able to successfully demonstrate substantial damages.”
Mot. 2. Plaintiff’s argument as to the difficulty of determining actual damages is simply not
true, but it serves as a nice distraction from the truth that Plaintiff never calculated its actual
damages because it does not want the jury to hear that it has suffered “only a few cents” worth of
harm.
But, most importantly, Plaintiff’s argument about “difficult” is merely that: an argument.

1

Assuming that all of Defendants’ visitors meant to go to Plaintiff’s websites is actually a very
generous assumption, and it is untrue. But, since the question is how Plaintiff might have
calculated its own actual damages, it is safe to say that Plaintiff would have made this
assumption.
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It is not a basis to exclude relevant evidence. Based on this argument, Congress provided ACPA
plaintiffs with opportunity to elect statutory damages. It did not, however, render actual
damages inadmissible or altogether irrelevant.
B.

ACTUAL DAMAGES CAN AND SHOULD BE CONSIDERED IN
DETERMINING STATUTORY DAMAGES.

Plaintiff’s motion makes its fatal leap of logic when it concludes that because actual
damages are not necessary, they are irrelevant, or otherwise should be excluded as prejudicial.
That is simply not the case. As explained in Plaintiff’s own motion in limine, the factfinder can
and should consider actual damages in making a statutory damages award. The ACPA’s
statutory damages provision is broad, ranging from $1,000 to $100,000, yet it provides no real
guidance as to how to make an award within that range. Clearly, as other courts have held with
respect to statutory damages provision similar to the ACPA’s, a Plaintiff’s actual damages (or a
Defendant’s actual profit) can be one factor to consider in awarding statutory damages. See, e.g.,
Charter Communications Entertainment I, LLC v. Burdulis, 367 F. Supp. 2d 16 (D. Mass. 2005)
(analyzing various methods of awarding statutory damages under 47 U.S.C. § 553(c)(3), which is
similar to 15 U.S.C. § 1117(d), and settling on an award of statutory damages that most closely
estimates actual damages) .
More importantly, as Defendants explain in their own Motion in Limine No. 6,
consideration of actual damages is not just proper, it is constitutionally necessary. Statutory
damages are constrained by due process. St. Louis, I.M. & S. Ry. Co. v. Williams, 251 U.S. 63,
66 (1919) (announcing the test as whether the “prescribed penalty is so severe and oppressive as
to be wholly disproportionate to the offense and obviously unreasonable.”). So, while Plaintiff

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may posit that the ACPA does not contain a “no harm, no foul” provision, the Constitution does
contain a “no disproportionate damages” provision.2 But, in order to determine whether a
statutory damages award is “disproportionate,” the Court must have evidence of actual harm.
Otherwise, it cannot adequately conduct an analysis on proportionality. For that reason, both
Fed. R. Evid. 402 and 403 are inapplicable. Presentation of Plaintiff’s actual damages and
Defendant’s actual profit are not irrelevant; they are constitutionally required.
C.

PLAINTIFF’S LAST DITCH ARGUMENT ABOUT THE PRODUCTION OF
DOCUMENTS HIGHLIGHTS ITS DESPARATION.

In a last ditch effort to have relevance damages evidence excluded, Plaintiff argues that
Defendants provided incomplete information (i.e., only limited information for the first 35
domain names) and that this information is inadmissible because it is a “summary.” The flaws in
this argument are numerous.
First, it is patently untrue. Defendants provided a full spreadsheet with all traffic and
revenue information for all identified domains. Its Bates number is NCS124632-NCS124640.
Second, it represents a fundamental misunderstanding of the rules of evidence. Because the
spreadsheet is a query of the Firstlook database (which is, itself, maintained in the ordinary
course of business), the spreadsheet is admissible. U-Haul Intern., Inc. v. Lumbermens Mut.
Cas. Co., 576 F.3d 1040, 1045-46 (9th Cir. 2009) (explaining admissibility of computer
2

Plaintiff’s focus on the “punitive” and “deterrence” aspect of the ACPA only strengthens
Defendants’ position. The more “punitive” a statute, the more likely that a damages award
pursuant to that statute will be viewed as “punitive damage” which are constrained to a greater
degree than statutory damages. See BMW of North America, Inc. v. Gore, 517 U.S. 559, 116 S.
Ct. 1589, 134 L. Ed. 2d 809 (1996), and State Farm Mutual Automobile Insurance Co. v.
Campbell, 538 U.S. 408, 123 S. Ct. 1513, 155 L. Ed. 2d 585 (2003).
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generated documents); Health Alliance Network, Inc. v. Continental Cas. Co., 245 F.R.D. 121,
129-30 (S.D.N.Y. 2007) (explaining admissibility of database queries). Lastly, as this Court well
knows, Defendants produced a 2 TB hard drive containing Firstlook’s entire database. Indeed,
Plaintiff has vociferously argued for the admissibility of queries run on the hard drive by Chris
Schwerzler. Just as Chris Schwerzler ran queries that benefitted Plaintiff’s case, he had the
ability to run queries on the traffic and financial information contained in the database;
apparently, he simply did not. However, Plaintiff cannot now complain that it was not provided
the data. It was given the data in a spreadsheet and in a database, (which was produced more
than one year ago so Plaintiff has had plenty of time to run its queries).
III.

CONCLUSION.
Plaintiff’s arguments are fatally flawed. The jury in this case should be allowed to

consider Plaintiff’s actual damages (or lack thereof) and Defendants’ actual profits as part of any
statutory damages calculation. Plaintiff is certainly free to argue to the jury that they should not
pay these numbers any mind, but that Plaintiff’s argument does not render this evidence
inadmissible. In fact, this evidence is necessary as a benchmark for any damages award to
determine whether or not an award in this case passes constitutional muster.
Dated: February 24, 2012

Respectfully Submitted,

/s/William A. Delgado
William A. Delgado
WILLENKEN WILSON LOH & LIEB LLP
707 Wilshire Boulevard, Suite 3850
Los Angeles, CA 90017
[phone]
[e-mail]
Lead Counsel for Defendants
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CERTIFICATE OF SERVICE

I hereby certify that on February 24, 2012, I electronically filed the foregoing
paper with the Court using the ECF system which will send notification of such filing to
the following:
Enrico Schaefer (P43506)
Brian A. Hall (P70865)
TRAVERSE LEGAL, PLC
810 Cottageview Drive, Unit G-20
Traverse City, MI 49686
231-932-0411
[e-mail]
[e-mail]
Lead Attorneys for Plaintiff

Nicholas J. Stasevich (P41896)
Benjamin K. Steffans (P69712)
BUTZEL LONG, P.C.
150 West Jefferson, Suite 100
Detroit, MI 48226
[phone]
[e-mail]
[e-mail]
Local Counsel for Defendants

Anthony P. Patti (P43729)
HOOPER HATHAWAY, PC
126 South Main Street
Ann Arbor, MI 48104
734-662-4426
[e-mail]
Attorneys for Plaintiff

William A. Delgado
WILLENKEN WILSON LOH & LIEB LLP
707 Wilshire Boulevard, Suite 3850
Los Angeles, CA 90017
[phone]
[e-mail]
Lead Counsel for Defendants

/s/William A. Delgado
William A. Delgado
WILLENKEN WILSON LOH & LIEB LLP
707 Wilshire Boulevard, Suite 3850
Los Angeles, CA 90017
[phone]
[e-mail]
Lead Counsel for Defendants

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121061.1