United States District Court, N.D. California, San Jose Division
SECOND ORDER RE MOTION IN LIMINE AND OTHER PRETRIAL
MOTIONS RE: DKT. NOS. 258, 321, 324, 329
J. DAVILA UNITED STATES DISTRICT JUDGE
holding the final pretrial conference on October 10 and 11,
2019, the court issued an order addressing certain of the
motions in limine and other pretrial motions (Dkt.
No. 403) and continued the conference to October 16, 2019.
This order addresses the four motions that remain pending:
Orion's Motion to Exclude the Testimony of Mr. Redman
(Dkt. No. 258), Defendants' Motion In Limine No.
6 (Dkt. No. 321), Defendants' Motion In Limine
No. 8 (Dkt. No. 324), and Orion's Motion In
Limine No. 1 (Dkt. No. 329).
Orion's Motion to Exclude the Testimony of Mr. Redman
(Dkt. No. 258)
seeks to exclude the testimony of Defendants' expert Mr.
Jeffrey Dean Redman to the extent that he seeks to rebut the
testimony of Dr. J. Douglas Zona, Orion's damages expert.
In an earlier order, the court excluded his testimony offered
in rebuttal of Orion's technical expert Dr. José
Sasian. Dkt. No. 314 at 9-10. While Mr. Redman may be well
qualified to testify as a damages expert in some cases, the
court finds that he is not qualified to offer rebuttal
testimony to Dr. Zona's specific analyses. The court
grants Orion's motion for the reasons discussed below.
Defendants, of course, may still rely on the rebuttal
testimony of their other damages expert, Dr. Celeste Saravia.
Zona's testimony is based on econometric analyses that
employ regression models to calculate Orion's purported
damages. The methodology Dr. Zona uses is known as the
“dominant firm” model. Defendants do not dispute
that the dominant firm model is a noncontroversial means of
calculating antitrust damages. However, these analyses are
outside of Mr. Redman's experience and training. He has
35 years of experience as an expert related to financial
matters, has a B.S. in Management, and is a certified fraud
examiner. He currently leads his own financial forensics firm
and has previously worked at the financial consulting and
accounting firm Ernst & Young. However, Mr. Redman has no
training in econometrics and is neither an economist nor an
accountant. Redman Dep. 29:6-11. He testified that for
antitrust cases he could not remember ever calculating
damages, running a regression, or calculating price
elasticity or overcharges. Id. at 29:6-11, 48:12-19,
49:6-19, 55:8-10, 66:7-14, 98:10-21.
Redman's general lack of relevant experience and training
is apparent in his failure to understand Dr. Zona's
specific calculations and analyses. Mr. Redman does not run
his own regression nor criticize Dr. Zona's application
of the model. Rather, he criticizes Dr. Zona for not using
certain, case-specific data to calculate damages for
overcharges. Redman Rep. ¶¶ 11, 19-24, 58. But, Mr.
Redman does not appear to understand the methods and models
that Dr. Zona used. Mr. Redman concedes that prior to this
case he had not heard of the dominant firm model, that he
could not explain the equation Dr. Zona used to calculate the
damages rate used in the empirical model, that he does not
understand what “pass through” means, that he is
unfamiliar with the private cartel data Dr. Zona used, and
that Dr. Zona's structural model are “outside [his]
area of expertise.” Redman Dep. at 231:1-13;
241:4-242:13; 251:15-252:18; 255:5-7; 257:16-24; 258:10-17.
Without understanding Dr. Zona's models and methods, Mr.
Redman's rebuttal cannot be reliable. Fed.R.Evid. 702.
Virginia Vermiculite Ltd. v. W.R. Grace &
Co.-Conn , a district court excluded damages testimony
in an antitrust case because the expert lacked the requisite
expertise. 98 F.Supp.2d 729, 732 (W.D. Va. 2000). The court
noted that the witness at issue had experience with
determining markets for investment purposes, but that did not
transfer to determining markets for antitrust analyses:
“Though related to a relevant market determination in
an antitrust issue, there are differences between an analysis
for business investment and an analysis for antitrust
purposes.” Id. The court further noted that
the at-issue witness “lack[ed] a clear understanding of
basic economic principles. For instance, [the witness]
admitted he was unfamiliar with the dominant firm theory in
economics.” Id. at 734. In Rothe Dev.,
Inc. v. Dep't of Def., the district court excluded
the testimony of a witness seeking to rebut two expert
reports from economists, one of which used regression
analyses. 107 F.Supp.3d 183, 203 (D.D.C. 2015), aff'd
sub nom. Rothe Dev., Inc. v. United States Dep't of
Def., 836 F.3d 57 (D.C. Cir. 2016). The court noted that
the witness had never run a regression before, and found that
“[b]ased on [the witness's] own admissions
regarding his lack of training, education, knowledge, skill,
and experience in any statistical or econometric methodology,
[he] is plainly unqualified to testify as an expert with
respect to [the opposing experts'] reports.”
Id.; see also In re Worldcom, Inc., 371
B.R. 33, 42 (Bankr. S.D.N.Y. 2007) (excluding testimony of a
witness because “[t]here is no nexus between his
credentials and the subject matter of his testimony.”).
Redman has impressive credentials, but he is not qualified to
rebut Dr. Zona's testimony because it addresses issues
outside of Mr. Redman's expertise and understanding. The
court grants the motion to exclude Mr. Redman's testimony
offered in rebuttal of Dr. Zona.
Defendants' Motion In Limine No. 6 (Dkt. No.
seek an order to prevent Orion from offering evidence or
argument related to punitive damages. Orion does not dispute
that it may not seek punitive damages on its claims under
federal law or California's Unfair Competition Law. The
parties disagree as to whether punitive damages are available
to Orion on its claim under California's Cartwright Act.
initial matter, Orion objects to this motion on the ground
that it is a motion for summary judgment masquerading as a
motion in limine. Federal courts in California,
though, have considered whether to allow the introduction of
evidence going to remedies-including punitive damages-in
motions in limine. See, e.g., Carpenter
v. Forest Meadows Owners Ass'n, 2011 WL 3207778, at
*15-19 (E.D. Cal. July 27, 2011). The court finds this motion
is properly before the court.
Cartwright Act allows a victorious plaintiff to obtain treble
damages, injunctive relief, and reasonable attorneys'
fees. Cal. Bus. & Prof. Code § 16750(a). This array
of remedies arises from the Cartwright Act's
“focus on the punishment of violators for the larger
purpose of promoting free competition.” Clayworth
v. Pfizer, Inc., 49 Cal.4th 758, 783 (2010).
“Private damage awards are just a tool by which the
procompetitive purposes [of the Cartwright Act] are carried
out: The main purpose of the anti-trust laws is to protect
the public from monopolies and restraints of trade, and the
individual right of action for treble damages is incidental
and subordinate to that main purpose.” Id.
(citations and quotations omitted).Under the Cartwright Act,
the award of treble damages is “mandatory.”
Uneedus v. Cal. Shoppers, Inc., 86 Cal.App.3d 932,
court finds that because treble damages are mandatory,
punitive damages are precluded under the Cartwright Act.
Under California law, punitive damages, like treble damages,
are a “way of punishing the defendant.” Cal. Civ.
Code § 3294(a). “[W]here a statute provides a
remedy that is punitive in nature, a plaintiff may not
recover punitive damages in addition to the punitive
statutory damages.” Doran v. Embassy Suites
Hotel, 2002 WL 1968166, at *2 (N.D. Cal. Aug. 26, 2002).
In Turnbull & Turnbull v. ARA Transp., Inc., the
Court of Appeal held that where a plaintiff was entitled to
mandatory treble damages on predatory pricing claims based on
California's Unfair Practices Act, that plaintiff was
“not entitled to both remedies, ” -i.e.,
punitive and treble damages-and could only receive the
mandatory treble damages. 219 Cal.App.3d 811, 826-27 (1990),
reh'g denied and opinion modified (May 19,
1990). If Orion prevails on its Cartwright Act claim, then it
will be entitled to mandatory treble damages; thus, punitive
damages would not be available to Orion. Defendants'
motion in limine No. 6 is granted.
Defendants' Motion In Limine No. ...