Pearlstein v. Blackberry Limited

District Court, S.D. New York·Decided March 11, 2022·No. 1:13-cv-07060·Unknown

Opinion

_ |} USDC SDNY UNITED STATES DISTRICT COURT || DOCUMENT SOUTHERN DISTRICT OF NEW YORK i! ELECTRONICALLY FILED ce a ee {| DOC #: (| ATE FILED: o39- MARVIN PEARLSTEIN, Individually and on behalf of All Others Similarly Situated, ‘ Plaintiff, -against- 13 Civ. 7060 (CM)(KHP) BLACKBERRY LIMITED (f/k/a/RESEARCH IN MOTION LIMITED), THORSTEN HEINS, BRIAN BIDULKA, and STEVE ZIPPERSTEIN, Defendants. DECISION ON MOTIONS IN LIMINE McMahon, J.: The court, for its rulings on the parties’ motions in limine, decides as follows: Plaintiffs’ Motions Motion No. 1: Plaintiffs move to exclude any evidence or argument relating to a defense of advice of counsel. (Docket #642). For the reasons outlined at page 3 of the brief in support of the motion (Docket #643), any such defense has been waived and no testimony or argument concerning same will be permitted. This does not mean that Defendants cannot introduce evidence that lawyers attended meetings or reviewed disclosure documents. Jn re Veeco Instruments Inc. Securities Litigation, 2007 WL 7630569, at *7-8 (S.D.N.Y. 2007). Those are simply facts. However, the jury will be instructed that there is no evidence in the case that defendants actually relied on the advice of any attorneys who attended meetings or reviewed documents. The jurors will also be told that it that they cannot infer that any attorney signed off on or approved of the decisions and disclosures that were eventually taken or made from the fact of attendance or review. Defendants are free to argue that the attendance of lawyers is evidence that they acted in good faith — that they would not have lawyers around if they were not acting in good faith — but more than that they simply cannot say, or even suggest. Motion No. 2: Plaintiffs move to exclude testimony from class representatives Mary Dinzik and Todd Cox, evidence or argument “regarding the class representatives,” including their failure to testify or absence from the trial. (Docket #645). The motion is denied. The named plaintiffs are parties to this lawsuit. The defendants have every right to call them to the stand. It is true that the issue of class-wide damages will not be resolved at this trial — neither party has indicated any

intention to offer evidence on the subject — and if the jury concludes that there was a fraud on the market, the named plaintiffs are no less entitled to the benefit of the presumption raised by that theory than are absent class members. However, fraud on the market merely raises a presumption of reliance, and defendants are entitled to elicit evidence that the named plaintiffs did not in fact rely on market conditions in connection with their trading activity. If, however, this evidence can be elicited from Mr. Cox, because he made the trading decisions for both named plaintiffs, defense counsel will not be allowed to ask the jury to draw any negative inference from the fact that Ms. Dinzik did not testify, since a civil plaintiff, unlike a criminal defendant, has no obligation to be present during her trial. Motion No. 3: Plaintiffs move to exclude argument concerning aggregate damages, defendants’ ability to pay, and/or the effect of a judgment for plaintiffs. (Docket #648). The motion is granted, for substantially the reasons set forth in the moving brief (see Docket #649), with this exception: assuming the number of outstanding shares is in evidence, defendants may point out to the jury the total amount of damages sought by plaintiffs in this lawsuit. That is all they may do. They may not offer any evidence of defendants’ ability to pay or of the effect that a judgment of that magnitude would have on BlackBerry the corporation or any of the individual defendants. Motion No. 4: Plaintiffs move to limit the cross-examination of their experts by precluding defendants from questioning them about rulings made by other judges in other cases concerning the scope of their expertise. (Docket #653). If the motion is intended to preclude defendants from introducing the rulings of other judges on other Daubert motions, it is granted. There is no way, short of a mini-trial on collateral matters, to know whether any other court’s decision to preclude a particular expert from testifying in some other matter rested on the judge’s conclusion that the expert was unqualified in the same way that this court found the experts to be qualified, or that the opinions the expert was not allowed to give were the same types of opinions that the experts are giving in this case. We are not going to get into such time-consuming mini-trials or elicit any testimony that would undermine this court’s Daubert rulings — which are law of the case. However, juries are routinely instructed that they may consider an expert’s qualifications and experience when evaluating his or her testimony. Therefore, experts may always be asked on cross- examination whether they have ever been tendered as an expert and not deemed qualified — a yes or no question — and how many times that has happened. I have never seen a case in which a party presenting an expert did not elicit on direct the fact that the individual had been qualified and testified as an expert in previous cases; the bare fact that the individual was proffered as an expert but was not allowed to testify is certainly fair game for cross-examination. Similarly, it is possible that instances in which an expert was criticized by a court are fair game for cross-examination; I cannot possibly decide that in a vacuum. Jury verdicts in other cases that went against an expert’s client are not fair game for cross-examination; there are too many reasons, aside from the expert’s testimony, why such verdicts might have been rendered. Nothing in this ruling precludes vigorous cross-examination about the expert’s opinions in this case. Motion No. 5: Plaintiffs move to exclude evidence or argument concerning post-class period changes in generally accepted accounting principles — specifically, changes announced eight months after the close of the class period, to go into effect four years later. (Docket #656). The motion is granted, as any such evidence has little probative value and tremendous unfair

prejudicial impact. I reject defendants’ argument that the change means there was no “bright line” rule in effect at the time of the alleged misstatements in this case. Motion No. 6: Plaintiffs move to exclude character testimony concerning the three individual defendants and other Blackberry witnesses. (Docket #658). The motion is granted in part and denied in part. With limited exceptions, the usual rule is that character testimony is inadmissible in civil cases as proof that a person acted in conformity therewith on a particular occasion (Fed. R. Ev. 404(a)). That rule will be followed. However, if the veracity of the individual defendants is attacked, they are free to offer character evidence that they enjoy a good reputation in the community for truthfulness. I emphasize that it is a reputation in the community that is relevant — not the opinion of one testifying individual that a defendant is truthful person. Appropriate limiting instructions will of course be given. Motion No. 7: Plaintiffs move to exclude evidence or argument concerning the SEC’s inquiry into Blackberry’s Revenue Recognition Practices and its Failure to Pursue Charges against Blackberry. (Docket #663). The motion is granted. The SEC’s declination to add Blackberry’s revenue recognition practices — already the subject of class litigation — to its busy docket does not constitute a finding that Blackberry’s practices were correct or an endorsement of those practices. It could simply reflect an administrative priorities allocation on the agency’s part. Since the jury could not possibly draw any conclusions from the Commission’s taking no action whatever without giving any reason therefor, any such evidence would be entirely without probative value and would encourage speculation.

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Pearlstein v. Blackberry Limited, (S.D.N.Y. 2022).

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