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In Re: Homestore.Com

January 25, 2011

IN RE: HOMESTORE.COM, INC. SECURITIES LITIGATION


The opinion of the court was delivered by: Honorable Ronald S.W. Lew Senior, U.S. District Court Judge

This Document Relates To: All Actions

ORDER

Before the Court are Lead Plaintiff California State Teachers Retirement System's ("Plaintiff") Omnibus Motions in Limine [1220] and Defendant Stuart H. Wolff's ("Defendant") Motions in Limine Numbers 1 through 17 [1218, 1219, 1223, 1224, 1225, 1226, 1228, 1229, 1230, 1231, 1232, 1233, 1234, 1235, 1236, 1237, 1238.] After considering all papers and arguments submitted, the Court NOW FINDS AND RULES AS FOLLOWS:

I. Plaintiff's Motion in Limine

Plaintiff brings these Omnibus Motions in Limine, requesting the Court exclude eight types of evidence from Trial and issue an Order affirming Plaintiff's right to admit former trial and deposition testimony from unavailable witnesses at Trial.

1. Plaintiff's Motion in Limine No. 1 The Court GRANTS Plaintiff's Motion in Limine Number 1 to exclude reference to or evidence of Plaintiff's financial condition and other litigation.

Evidence of a party's financial condition is generally not relevant and can be unduly prejudicial, as it can distract the jury from the real issues in the case. See, e.g., Utility Trailer Sales of Kansas City, Inc. v. MAC Trailer Mfg., Inc., 2010 WL 1946625 (D. Kan., May 14, 2010). Accordingly, the Court finds that references to and evidence of Plaintiff's financial condition should be excluded. Further, reference to or evidence of Plaintiff's involvement in other litigation prior to this Action is also irrelevant and carries with it a high risk of prejudice. See, e.g., Ritten v. Lapeer Regional Medical Center, 2010 WL 374163, *8 (E.D. Mich., Jan. 25, 2010). As such, the Court also excludes reference to or evidence of Plaintiff's involvement in prior lawsuits.

Therefore, the Court GRANTS Plaintiff's Motion in Limine Number 1 to exclude reference to or evidence of Plaintiff's financial condition and other litigation.

2. Plaintiff's Motion in Limine No. 2 The Court GRANTS Plaintiff's Motion in Limine Number 2 to exclude settlement communications. Defendant does not oppose this Motion, and evidence of settlement communications is inadmissible under Federal Rule of Evidence 408. Fed. R. Evid. 408.

3. Plaintiff's Motion in Limine No. 3 The Court GRANTS Plaintiff's Motion in Limine Number 3 to exclude reference to or evidence of amount of settlement with previous defendants.

Federal Rule of Evidence 408 excludes complete compromises with third parties and prior defendants. Fed. R. Evid. 408. See Young v. Verson Allstate Press Co., 539 F. Supp. 193, 195-96 (D.C. Pa. 1982). Moreover, the Court finds that evidence of the amount of prior settlements is not relevant here and is prejudicial. See Pucci v. Litwin, 1993 WL 405448, *1 (N.D. Ill., Oct. 4, 1993).

Accordingly, the Court GRANTS Plaintiff's Motion in Limine Number 3 to exclude reference to or evidence of amount of settlement with previous defendants.

However, the Court cautions the Parties that evidence of prior settlements is not excluded for purposes of making a determination as to whether to offset any damages that the jury may assign to Defendant.

4. Plaintiff's Motion in Limine No. 4 The Court DENIES Plaintiff's Motion in Limine Number 4 to exclude character evidence regarding Defendant Wolff pursuant to Federal Rule of Evidence 404(a).

The Court finds Plaintiff's request as over-broad and vague, and therefore inappropriate for review at the motion in limine stage. See Colton Crane Co., LLC v. Terex Cranes Wilmington, Inc., 2010 WL 2035800, (C.D. Cal. May 19, 2010) (holding that motions in limine should "rarely seek to exclude broad categories of evidence, as the court is almost always better situated to rule on evidentiary issues in their factual context during trial").

Accordingly, the Court DENIES Plaintiff's Motion in Limine Number 4 to exclude character evidence regarding Defendant Wolff pursuant to Federal Rule of Evidence 404(a).

5. Plaintiff's Motion in Limine No. 5 The Court DENIES Plaintiff's Motion in Limine Number 5 to exclude Defendant from offering expert testimony through deposition testimony rather than through live witness testimony.

The Court finds that Plaintiff has not met its burden here to show that the deposition testimony of all experts should be excluded at this time. See Pucci v. Litwin, 1993 WL 405448 (N.D. Ill., Oct. 4, 1993)(denying plaintiffs' motion in limine to exclude all deposition testimony because plaintiff had not proven that under any circumstances the testimony would be admissible).

Therefore, the Court DENIES Plaintiff's Motion in Limine Number 5 to exclude Defendant from offering expert testimony through deposition testimony rather than live witness testimony.

6. Plaintiff's Motion in Limine No. 6 The Court GRANTS Plaintiff's Motion in Limine Number 6 to exclude John Costello's ("Costello") deposition testimony. Plaintiff had previously designated Costello as an expert leading up to the previously scheduled Trial in this Action, but now does not plan on calling Costello to testify at this Trial [1202]. However, Defendant seeks to introduce the deposition testimony of Costello at Trial [1200].

The Court finds that Federal Rule of Civil Procedure 26(b)(4)(B) precludes the use of this deposition testimony by Defendant, as Plaintiff had previously designated Costello as an expert witness, is no longer calling him to testify, and Defendant has not demonstrated that "exceptional circumstances" exist here to enable Defendant to use this deposition testimony. Fed. R. Civ. P. 26(b)(4)(B). See Otsuka v. Polo Ralph Lauren Corp., 2010 U.S. Dist. LEXIS 25017 (N.D. Cal. Mar. 17, 2010); FMC Corp. v. Vendo Co., 196 F. Supp. 2d 1023, 1036 (E.D. Cal. 2002)(applying the "exceptional circumstances" test under Rule 26(b)(4)(B) to determine whether to exclude plaintiff's request to depose and offer testimony from defendant's previously disclosed expert witness). Defendant states that Costello's testimony concerns the auditing practices of PricewaterhouseCoopers, but the Court finds that this is not a unique field of expertise and Defendant could have designated other experts to testify on this matter. See Rubel v. Eli Lilly & Co., 160 F.R.D. 458, 460 (S.D.N.Y. 1995)(noting that "[i]f this were a case in which the expert sought to be called possessed unique evidence, plaintiff's case [to admit expert testimony previously designated by defendant] would have considerabl[y] [more] appeal").

Therefore, the Court GRANTS Plaintiff's Motion in Limine Number 6 to exclude John Costello's ("Costello") deposition testimony.

7. Plaintiff's Motion in Limine No. 7 The Court DENIES Plaintiff's Motion in Limine Number 7 to exclude evidence relating to individualized issues of the Class Representative. Plaintiff seeks to exclude any evidence regarding Plaintiff's individual reliance, arguing that it will be able to use the "fraud on the market" theory to show that the class of Homestore shareholders, as a whole, suffered damages as a result of Defendant's conduct.

The Court finds that this Motion is pre-mature, as Plaintiff must first establish it is entitled to use the "fraud on the market" theory in order to establish that the class, as a whole, suffered damages here before it can show that evidence relating to Plaintiff's individualized proof of reliance is not relevant. See Basic Inc. v. Levison, 485 U.S. 224, 247 (1988).

Accordingly, the Court DENIES Plaintiff's Motion in Limine Number 7 to exclude evidence relating to individualized issues of the Class Representative.

8. Plaintiff's Motion in Limine No. 8 The Court DENIES Plaintiff's Motion in Limine Number 8 to exclude arguments or evidence by Defendant that he is not liable for 10b-5 violations between May 15, 2001 to December 21, 2001 and that the jury be instructed that Defendant must be found liable for 10b-5 violations between May 15, 2001 to December 21, 2001.

The Court finds that Plaintiff has failed to establish that Defendant's guilty plea meets all of the criteria that must be satisfied in order to enable Plaintiff to utilize the collateral estoppel doctrine here to establish Defendant's Section 10(b) violation for the requested period of time. See United States v. Real Prop. Located at Section 18, 976 F.2d 515, 519 (9th Cir. 1992).

Specifically, Plaintiff has failed to show that the issue on which it now offers Defendant's conviction and plea agreement, the issue of his liability for the Section 10(b) violations, is identical to those issues decided by Defendant's plea agreement and conviction. The Court finds that the plea agreement and conviction did not address all the required elements in Plaintiff's 10b-5 claim, such as reliance or economic loss.

As such, the Court DENIES Plaintiff's Motion in Limine Number 8 to exclude arguments or evidence by Defendant that he is not liable for 10b-5 violations between May 15, 2001 to December 21, 2001 and that the jury be instructed that Defendant must be found liable for 10b-5 violations between May 15, 2001 to December 21, 2001.

9. Plaintiff's Motion in Limine No. 9 Plaintiff's Motion in Limine Number 9 for an Order that testimony given during Defendant's 2006 criminal trial is admissible is DENIED AS MOOT, as Plaintiff has now withdrawn this Motion.

10. Plaintiff's Motion in Limine No. 10 Plaintiff's Motion in Limine Number 10 for an Order that deposition testimony given in this Case is admissible where the witness is shown to be unavailable is DENIED AS MOOT, as Plaintiff has now withdrawn this Motion.

II. Defendant's Motions in Limine

Defendant Stuart H. Wolff brings the following 17 ...


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