Eisen v. Day

• Court: District Court, N.D. California
• Decided: March 21, 2024
• Docket: 5:21-cv-05349
• Status: Unknown

Opinion

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 SAN JOSE DIVISION 7 8 NOAM EISEN, et al., Case No. 21-cv-05349-VKD

9 Plaintiffs, ORDER ON MOTIONS IN LIMINE v. 10 Re: Dkt. Nos. 120-126 11 EMILY DAY, Defendant. 12

13 AND RELATED COUNTERCLAIMS 14 15 The Court held a pretrial conference in this matter on March 20, 2024. Dkt. No. 141. This 16 order resolves the parties’ motions in limine. See Dkt. Nos. 120-126. 17 I. EISEN MOTIONS IN LIMINE 18 A. Motion in Limine No. 1 – Supplemental Rule 26(a)(1)(A)(iii) Disclosure 19 On March 4, 2024, the Day parties served a supplemental Rule 26(a)(1)(A)(iii) disclosure 20 describing their damages computations. See Dkt. No. 120-1, Ex. A. The Eisen parties object to 21 this disclosure, claiming that it “include[s] multiple new categories [of damages] not otherwise 22 disclosed” on which they were unable to complete discovery. Dkt. No. 120 at 4. They ask the 23 Court to “exclude any such untimely disclosed information related to Defendant’s newly alleged 24 computation of damages and any claim to damages that flow therefrom.” Id. at 1. The Day 25 parties respond that their supplemental disclosure does not contain any new theories of damages, 26 but “merely summarized and aggregated in a single place the specific damages theories and 27 calculations that had been previously disclosed to Eisen during discovery.” Dkt. No. 134 at 2. 1 Rule 26(a)(1)(A)(iii) requires parties to exchange “a computation of each category of 2 damages claimed” as part of their initial disclosures. Fed. R. Civ. P. 26(a)(1)(A)(iii). While the 3 rule “does not require damages to be calculated with precision,” it does require parties to “describe 4 on a claim-by-claim basis the nature of the damages claimed (e.g. actual damages), and how such 5 damages may be calculated (e.g. estimated value of specific lost business opportunities).” Song v. 6 Drenberg, No. 18-cv-06283-LHK (VKD), 2019 WL 1949785, at *2 (N.D. Cal. May 2, 2019). 7 The level of specificity required varies depending on the stage of the litigation and the claims at 8 issue. While a precise damages computation may not be possible at the outset of a litigation, see 9 City & Cnty. of San Francisco v. Tutor-Saliba Corp., 218 F.R.D. 219, 222 (N.D. Cal. 2003), Rule 10 26(e) requires parties to supplement their disclosures when “the party learns that in some material 11 respect the disclosure or response is incomplete or incorrect, and if the additional or corrective 12 information has not otherwise been made known to the other parties during the discovery process 13 or in writing.” Fed. R. Civ. P 26(e)(1)(A). 14 “A party that fails to provide information . . . as required by Rule 26(a) or (e) may not use 15 that information . . . to supply evidence at trial unless the failure was ‘substantially justified or is 16 harmless.’” Soverns v. Delta Air Lines Inc., No. 20-CV-06258-BLF, 2023 WL 2768431, at *2 17 (N.D. Cal. Apr. 3, 2023) (quoting Fed. R. Civ. P. 37(c)(1)). The party facing sanctions under Rule 18 37(c)(1) bears the burden of proving that their discovery violations were justified or harmless. 19 Yeti by Molly, Ltd. v. Deckers Outdoor Corp., 259 F.3d 1101, 1107 (9th Cir. 2001). In 20 determining whether a discovery violation was harmless, the court may consider “‘(1) prejudice or 21 surprise to the party against whom the evidence is offered; (2) the ability of that party to cure the 22 prejudice; (3) the likelihood of disruption of the trial; and (4) bad faith or willfulness involved in 23 not timely disclosing the evidence.’” Gryglak v. HSBC Bank USA, N.A., No. 22-15630, 2023 WL 24 3243998, at *2 (9th Cir. May 4, 2023) (quoting Lanard Toys Ltd. v. Novelty, Inc., 375 F. App’x 25 705, 713 (9th Cir. 2010)). 26 At the beginning of this litigation, the Day parties served their initial disclosures (see Dkt. 27 Nos. 3, 11), including the following disclosure regarding damages: prepare a detailed damages computation as to most of the claims 1 they assert. With respect to the claim for copyright infringement, Day seeks statutory damages up to $150,000 and attorneys’ fees. In 2 addition, Counterclaimants seek compensatory damages, restitution, disgorgement of profits, treble damages pursuant to the Lanham Act, 3 punitive damages, interest, and costs. Counterclaimants will supplement this disclosure to provide a calculation of each category 4 of recovery after obtaining the necessary information through further investigation and discovery. 5 6 Dkt. No. 134 at ECF 22 (Ex. B at 2). On December 7, 2021, Ms. Day provided the following 7 additional information about the “reputation harm, emotional distress, . . . economic harm” she 8 suffered as a result of Mr. Eisen’s alleged defamation in response to Mr. Eisen’s Interrogatory No. 9 22: 10 At present, Day lacks information sufficient to calculate all the business lost. However[,] Eisen refused to transfer deposits upon 11 client request to the Cosmo Alleycats, the band that the clients hired and the band that inevitably performed the contracts. Eisen owes 12 the band members of Cosmo Alleycats $4,900 in performed contracts and $3,050 in yet to be performed contracts. 13 14 Id. at ECF 68 (Ex. D at 18). On June 16, 2022, defendant Cosmo Alleycats LLC provided the 15 following additional information about its damages claims in response to Mr. Eisen’s 16 Interrogatory No. 20: 17 LLC has been damaged by Eisen’s diversion of clients (including but not limited to through his interference with LLC’s online 18 presence and social media account and his collection of deposits for band performances and refusal to refund such deposits to clients 19 expecting the band – i.e., the LLC members, and specifically Ms. Day – to perform). The LLC has also suffered damages in the form 20 of its proportional interest in the value of Band equipment in the possession of Eisen. 21 22 Id. at ECF 44 (Ex. C. at 17). The Day parties’ March 4, 2024 supplemental disclosure includes the 23 following information regarding six categories of damages they intend to seek at trial: 24 (1) lost revenue from prior, repeat customers, Wine Country Entertainment and Entire Productions, who no longer hire the 25 Cosmo Alleycats band due to the tortious interference of Eisen ($51,000); 26 (2) lost revenue from individual clients (Gottlieb, Bruno, Impact 27 Destinations) Eisen diverted from the Cosmo Alleycats to his new, (3) customers deposits wrongfully retained by Eisen relating to 1 contracts (Ross, Levine, Feinstein, Boland) Eisen signed on behalf of the Cosmo Alleycats for performances that were rescheduled due 2 to the Covid-19 pandemic and which Eisen ultimately did not perform at following his removal from the band ($10,100); 3 (4) PPP forgivable (and forgiven) loan proceeds Eisen obtained in 4 the name of the Cosmo Alleycats but which he exclusively retained ($20,440); 5 (5) musical and band equipment for which Day had paid half the 6 cost ($13,320); and

7 (6) damages Day suffered as a result of Eisen’s defamatory statements about her ($50,000). 8 9 Dkt. No. 134 at 5; id. at ECF 22-25 (Ex. B at 2-5). 10 Based on the record presented, it appears that the Day parties earlier disclosed the type or 11 nature of the damages they now list as categories 1, 2, 3, 5 and 6 (but not category 4). However, 12 with the exception of the amounts identified in Ms. Day’s answer to Interrogatory No. 22 (above), 13 the Day parties appear to have never disclosed the amount claimed for any of their damages 14 categories until March 4, 2024. Unless these damages amounts were disclosed as part of expert 15 discovery or otherwise, the Court concludes that the Day parties’ supplemental Rule 16 26(a)(1)(A)(iii) disclosure was not timely, and the delay was not substantially justified. 17 During the hearing on this motion in limine, the Eisen parties conceded that they are not 18 prejudiced by the Day parties’ late disclosure of damages categories 5 and 6. Thus, the Day 19 parties may present evidence in support of their damages claims as to those two categories. In 20 addition, the Court is not persuaded that the Eisen parties are prejudiced by the Day parties’ 21 belated disclosure of damages category 3, as they had notice that the Day parties claimed the 22 deposits Mr. Eisen allegedly retained as damages. Thus, the Day parties may present evidence in 23 support of their damages claim as to this category. 24 However, the Court is persuaded that the Eisen parties have been prejudiced in their 25 defense to the Day parties’ damages claims for categories 1 and 2. The Eisen parties contend that, 26 had they known the basis for the Day parties’ damages computations as to those two categories, 27 they would have sought discovery of the customers from whom the Day parties claim they lost 1 untimely disclosure, discovery is long closed and there is no realistic opportunity for the Eisen 2 parties to take the additional discovery they say would be required to rebut these claims. Thus, the 3 Day parties may not present evidence in support of their affirmative damages claims with respect 4 to categories 1 and 2, unless the damages computations were disclosed during expert discovery. 5 Finally, the Day parties may not present evidence in support of their affirmative damages 6 claim with respect to category 4, as neither the category nor any computation of it was disclosed to 7 the Eisen parties at any time prior to March 4, 2024. 8 The parties are advised that the premise for this ruling applies equally to the Eisen parties. 9 If, as the Day parties contend, see Dkt. No. 134 at 9, the Eisen parties have also failed to 10 adequately disclose the computation of each category of damages they claim, the Court will not 11 permit the Eisen parties from presenting evidence in support of those damages claims at trial. 12 In view of this order, the parties may wish to confer regarding their respective damages 13 presentations before trial. 14 B. Motion in Limine No. 2 – Band Logo 15 The Eisen parties ask the Court to exclude “any . . . reference to, or argument regarding the 16 allegations that Mr. Eisen violated Day or the LLC’s rights to [the logo that was the subject of Ms. 17 Day’s copyright claim.]” Dkt. No. 121 at 1-2 (citing Fed. R. Evid. 401, 403). The Day parties 18 oppose this motion. They argue that the band’s logo is relevant to Mr. Eisen’s ouster from the 19 Cosmo Alleycats, including his alleged refusal to cancel a trademark application for the band’s 20 name and logo. Dkt. No. 127 at 2. They also contend that Mr. Eisen used the band’s name and 21 logo after his ouster without permission, and used the name and logo to divert customers to his 22 own band. Id at 3. 23 The Court agrees with the Day parties. The motion is denied. 24 C. Motion in Limine No. 3 – Exhibits Not Disclosed in Discovery 25 The Eisen parties ask the Court to exclude the Day parties’ Exhibits 1333-1337 because 26 the documents were not disclosed during discovery. Dkt. No. 122 at 1. Exhibits 1333-1336 are 27 described as captures of portions of public websites controlled by Mr. Eisen and articles of 1 parties are not prejudiced by the Day parties’ failure to disclose these materials during discovery. 2 The motion is denied as to these exhibits. 3 Exhibit 1337 is described as “Noam N. Eisen dba The Cosmo Alleycats, a sole 4 proprietorship, business registration documents from the U.S. Virgin Islands Secretary of State.” 5 Id. However, the Day parties acknowledge that, as yet, no such exhibit exists. Id. at 8. The 6 motion is denied without prejudice with respect to this exhibit. The Eisen parties may renew this 7 motion or object to this exhibit if and when the Day parties attempt to offer it in evidence. 8 D. Motion in Limine No. 4 – Robert Bates’ Testimony 9 The Eisen parties ask the Court to limit the testimony of Robert Bates, the Day parties’ 10 valuation expert, “to the opinions and matters disclosed” in his reports. Dkt. No. 123 at 1. They 11 do not object to any particular testimony Mr. Bates is expected to offer, but rather concede that the 12 motion is directed to enforcement of the rule preventing experts from testifying beyond the scope 13 of their expert disclosures. Dkt. No. 141. The Day parties respond that Mr. Bates should be 14 allowed to testify (1) regarding his qualifications as an expert, (2) regarding matters discussed at 15 his deposition, (3) and, because Mr. Bates is a rebuttal expert, regarding matters raised by the 16 Eisen parties at trial. Dkt. No. 129 at 2. 17 The motion is denied, as it is not directed to the exclusion of any particular testimony. 18 Rule 26(a)(2)(B) requires expert witnesses to provide “a complete statement of all opinions 19 the witness will express and the basis and reasons for them,” “the facts or data considered by the 20 witness in forming them,” as well as a discussion of their qualifications. Fed. R. Civ. P. 21 26(a)(2)(B)(i), (ii), and (iv). An expert’s deposition testimony is not a substitute for adequate 22 disclosure in the expert’s original report. See Edwards Lifesciences Corp. v. Meril Life Scis. Pvt. 23 Ltd., No. 19-cv-06593-HSG, 2022 WL 254348, at *7 (N.D. Cal. Jan. 27, 2022); Asetek Danmark 24 A/S v. CMI USA, Inc., No. 13-cv-00457-JST, 2014 WL 6997670, at *1 n.1 (N.D. Cal. Dec. 9, 25 2014). An expert is not permitted to testify to matters not disclosed as required by Rule 26 26(a)(2)(B), absent a showing of substantial justification and an absence of prejudice to the 27 opposing party. This rule applies to all testifying experts. 1 E. Motion in Limine No. 5 – Conversion of Partnership into LLC 2 The Eisen parties ask the Court to exclude evidence that the Cosmo Alleycats partnership 3 was converted into an LLC in December of 2020. Dkt. No. 124 at 1. They argue that Ms. Day 4 failed to comply with California law regarding the conversion of partnerships to LLCs when she 5 filed articles of incorporation for the Cosmo Alleycats LLC. Id. at 1-2. Because of this, the Eisen 6 parties contend, testimony regarding the conversion would be an improper legal conclusion and/or 7 unqualified expert testimony. Id. at 5. They also argue that, because Ms. Day and other witnesses 8 have asserted attorney-client privilege when questioned about the decision to incorporate the LLC, 9 they will be unable to adequately impeach their testimony on this issue. Id. at 2. The Day parties 10 oppose this motion, arguing that it seeks a premature ruling on factual and legal issues to be 11 resolved at trial. Dkt. No. 130 at 2-3. 12 The motion is denied. 13 The Court agrees with the Day parties. The question of whether the conversion of the 14 Cosmo Alleycats to an LLC was proper under California law depends on other factual and legal 15 questions to be resolved at trial. 16 With respect to the Eisen parties’ concerns about privilege, Ms. Day does not rely on the 17 advice of counsel for any purpose relevant to this action. Thus, Ms. Day properly may invoke the 18 attorney-client privilege with regard to the contents of communications with her counsel, but she 19 may not refuse to testify about her own conduct and actions, nor may she rely on the fact of her 20 consultation with counsel to suggest that her conduct and actions were proper. 21 II. DAY MOTIONS IN LIMINE 22 A. Motion in Limine No. 1 – David Rouda’s Testimony 23 The Eisen parties indicate that they may call David Rouda as a witness. Dkt. No. 139 at 24 43. The Day parties ask the Court to preclude Mr. Rouda from (1) testifying about out-of-court 25 statements made to him by Mr. Eisen and (2) offering his opinion about Mr. Eisen and Ms. Day’s 26 working relationship and the Cosmo Alleycats’ legal structure. Dkt. No. 125 at 3-5. They also 27 argue that Mr. Rouda’s testimony raises ethical and other issues as he is an attorney and has 1 The Eisen parties respond that Mr. Rouda should be permitted to testify about statements 2 made by Ms. Day, which are admissible as opposing party statements. See Dkt. No. 132 at 5 3 (citing Fed. R. Evid. 801(d)(2)). They appear to concede that Mr. Rouda may not testify regarding 4 Mr. Eisen’s out of court statements, Mr. Rouda’s assessment of Mr. Eisen and Ms. Day’s working 5 relationship or the nature and existence of their alleged partnership, or his own personal opinions 6 about those matters. Id. The Eisen parties also argue that Mr. Rouda did not represent Mr. Eisen 7 as to any matter within the scope of his anticipated testimony. Id. at 2-4. 8 The motion is granted in part and denied in part. 9 Assuming a proper foundation, Mr. Rouda may testify about relevant statements by Ms. 10 Day that are within the exception to the hearsay rule. E.g. Fed. R. Evid. 801(d)(2)(A). In 11 addition, Mr. Rouda may not testify about any matters as to which he or Mr. Eisen has asserted 12 was protected from discovery because of the attorney-client privilege. The Court will defer ruling 13 on any other objections to Mr. Rouda’s testimony until trial; however, if Mr. Rouda’s testimony 14 tracks the contents of his August 6, 2023 declaration, the Court anticipates that very little of that 15 testimony will be admissible. See Dkt. No. 132, Ex. A. 16 With respect to the implications of Mr. Rouda’s role as Mr. Eisen’s attorney, the ethical 17 issues the Day parties raise do not appear to have any bearing on the admissibility of Mr. Rouda’s 18 testimony. To the extent that the Day parties’ concern is that Mr. Rouda’s testimony is likely to 19 be biased in favor of Mr. Eisen, the Court will consider evidence of bias in assessing Mr. Rouda’s 20 credibility and the weight that his testimony should be given. 21 B. Motion in Limine No. 2 – Ray Clark’s Testimony 22 The Day parties ask the Court to exclude the opinions and testimony of Ray Clark, the 23 Eisen parties’ valuation expert, because he (1) did not disclose the models and calculations 24 underlying his valuations, (2) relied on the analysis of another colleague at his firm, who was not 25 disclosed as an expert, and (3) was not prepared for his deposition. Dkt. No. 126 at 5-12. They 26 also ask the Court to sanction the Eisen parties’ counsel for making improper objections during 27 1 Mr. Clark’s deposition. Id. at 17.1 The Eisen parties oppose the motion, arguing that Mr. Clark 2 was not required to produce the materials in question because the Day parties requested them less 3 than 30 days before his deposition. Dkt. No. 131 at 2-3 (citing Fed. R. Civ. P. 34(b)(2)(A)). In 4 any event, they represent that the information in question was produced to the Day parties before 5 March 13, 2024. Dkt. No. 131-1 ¶ 5. The Eisen parties also argue that Mr. Clark was adequately 6 prepared for his deposition, see Dkt. No. 131 at 3, 5-8, and contend that their counsel’s objections 7 were proper, see id. at 8-9. 8 The motion is granted in part and denied in part. 9 Rule 26(a)(2)(B) requires expert witnesses to provide “a complete statement of all opinions 10 the witness will express and the basis and reasons for them” and “the facts or data considered by 11 the witness in forming [the opinions].” Fed. R. Civ. P. 26(a)(2)(B)(i), (ii). The rule is “worded 12 specifically to provide the opposing party with access to all materials reviewed or considered by 13 the expert.” Utne v. Home Depot U.S.A., Inc., No. 16-cv-01854-RS (SK), 2022 WL 4139256, at 14 *3 (N.D. Cal. May 9, 2022) (quoting In re Google Adwords Litig., No. 08-cv-03369 JW HRL, 15 2010 WL 5185738, at *3 (N.D. Cal. Dec. 8, 2010)). This is an affirmative disclosure obligation— 16 an adverse party need not serve discovery to obtain the information within the scope of the rule. 17 See Fed. R. Civ. P. 26(a)(2)(B). 18 As noted above, a party that fails to provide information required by Rule 26(a)(2)(B) may 19 not use that information at trial, unless the failure was “substantially justified or is harmless.” Fed. 20 R. Civ. P. 37(c)(1). Here, the Eisen parties had an affirmative obligation to disclose the datasets, 21 models, and calculations that Mr. Clark considered and relied on in forming his opinions. See 22 Fed. R. Civ. P. 26(a)(2)(B). They did not timely disclose this material when they served Mr. 23 Clark’s expert report. This failure to disclose was compounded by Mr. Clark’s inability to 24 remember and testify in detail about the datasets, models, and calculations that he considered and 25 1 The Day parties make various arguments challenging the reliability of Mr. Clark’s opinions. 26 These arguments either go to the weight of Mr. Clark’s testimony or are untimely motions pursuant to Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993). See Dkt. No. 69; 27 see also Dkt. No. 94 (denying the parties’ requests for leave to file to file additional dispositive or 1 upon which he relied. Even if, as the Eisen parties suggest, these materials have now been 2 || disclosed,” the Day parties have no realistic opportunity to review the materials and to take a 3 further deposition of Mr. Clark and his colleague, Mr. Allen, who apparently prepared the model 4 on which Mr. Clark relies. See, e.g., Dkt. No. 126 at ECF 53 (Clark dep. 115:24-116:1). 5 The Court concludes that the Eisen parties’ failure to make the disclosures required by 6 || Rule 26(a)(2)(B) was not substantially justified and was not harmless, but was in fact prejudicial 7 || to the Day parties’ ability to prepare for trial. The materials that were not timely disclosed appear 8 || to concern Mr. Clark’s analyses of the “Fair Market Value of [Mr. Eisen’s] Partnership Interest” 9 and of “Mr. Eisen’s] Unpaid Earnings.” See Dkt. No. 126 at ECF 96. If that is so, Mr. Clark may 10 || not testify to either opinion. If the Eisen parties believe that there any opinions in Mr. Clark’s 11 report that do not depend in whole or in part on the datasets, models, and calculations that were 12 || not timely disclosed, they shall so advise the Court by specifically identifying the matters as to 13 which they believe Mr. Clark should be permitted to testify. This identification shall be filed with 14 the Court no later than April 4, 2024. 3 15 The Court denies the Day parties’ request for sanctions without prejudice, as that request a 16 || does not comply with Civil Local Rule 7-8. IT IS SO ORDERED. 18 || Dated: March 21, 2024 19 □□ 28 20 VuiguinE, QeMarch VIRGINIA K. DEMARCHI 21 United States Magistrate Judge 22 23 24 25 26 27 > At the hearing on this motion, counsel for the Day parties indicated she had not yet received Mr. 28 Clark’s materials. Dkt. No. 141.