Opinion
Civil Action No. 12-800 (RC)
2021-08-25
UNITED STATES of America EX REL. Lori MORSELL, et al., Plaintiffs, v. NORTONLIFELOCK, INC. (f/k/a Symantec Corporation), Defendant.
Christopher Bowmar Mead, Schertler Onorato Mead & Sears LLP, Deborah Bradley Clements, Lance Alan Robinson, Mark London, London & Mead, Washington, DC, for Plaintiffs. Anne B. Perry, David Lloyd Douglass, Jonathan S. Aronie, Christopher Michael Loveland, David T. Fischer, Keeley Allison McCarty, Sheppard Mullin Richter & Hampton LLP, Bradley A. Klein, Gregory Michael Luce, John Anthony James Barkmeyer, Skadden Arps Slate Meagher & Flom LLP, Alexander Wood Major, McCarter & English, LLP, Washington, DC, Matthew E. Sloan, Skadden, Arps, Slate, Meagher & Flom LLP, Los Angeles, CA, for Defendant.
Christopher Bowmar Mead, Schertler Onorato Mead & Sears LLP, Deborah Bradley Clements, Lance Alan Robinson, Mark London, London & Mead, Washington, DC, for Plaintiffs.
Anne B. Perry, David Lloyd Douglass, Jonathan S. Aronie, Christopher Michael Loveland, David T. Fischer, Keeley Allison McCarty, Sheppard Mullin Richter & Hampton LLP, Bradley A. Klein, Gregory Michael Luce, John Anthony James Barkmeyer, Skadden Arps Slate Meagher & Flom LLP, Alexander Wood Major, McCarter & English, LLP, Washington, DC, Matthew E. Sloan, Skadden, Arps, Slate, Meagher & Flom LLP, Los Angeles, CA, for Defendant.
MEMORANDUM OPINION
GRANTING IN PART AND DENYING IN PART THE UNITED STATES’ MOTION IN LIMINE ; GRANTING IN PART AND DENYING IN PART NORTON'S MOTIONS IN LIMINE ; DENYING AS MOOT NORTON'S MOTION TO BIFURCATE TRIAL
RUDOLPH CONTRERAS, United States District Judge
I. INTRODUCTION
This case concerns the Federal Government's ("Government") Federal False Claims Act ("FCA") claims, and the related state claims of California, Florida, and Relator Morsell on behalf of New York (collectively, "the States"), against Defendant NortonLifeLock Incorporated ("Norton"). The Government and Norton each filed motions in limine to exclude certain evidence from trial. The Court largely denies these motions, as explained below. However, the Court grants the Government's motion to the following extent: (1) Norton may not introduce the deposition designations of its own employees or former employees except upon further motion as explained herein; (2) Norton expert Avram Tucker may not offer opinions regarding whether sales for products having stock-keeping-unit numbers ("SKUs") not found on the relevant contract's pricelist should be included for damages; (3) Tucker may not offer opinions regarding which sales are appropriate to consider in damages calculations based on their terms and conditions; (4) Tucker may not opine on whether order-level discount calculations are required in this case; (5) Tucker may not opine that Norton did not consider individual line items to be deals; and (6) Tucker may not offer opinions criticizing Government expert Dr. David A. Gulley merely for assuming liability for damages relating to the resellers’ and distributors’ sales. The Court also grants Norton's motions to the following extent: (1) Government expert Professor Ralph C. Nash may not offer his "first opinion," as it is characterized in the briefs; (2) Nash may not opine on the meaning of the contract terms at issue in this case; (3) California may not present testimony from the four late-disclosed individuals except upon further motion as explained herein; (4) Gulley may not present calculations of the assumed 2% rebates discussed below; (5) the States’ damages experts may not offer opinions to the extent they rely upon excluded opinions of other experts; and (6) Relator expert Seth Fliegler may not opine on whether Norton failed to provide New York proper pricing discounts as required by their agreement.
The Court stated in its opinion regarding motions for summary judgment that it would refer to the company previously known as Symantec Corporation by its new name going forward. United States ex rel. Morsell v. Symantec Corp. , 471 F. Supp. 3d 257, 266 n.1 (D.D.C. 2020). However, the Court has not replaced instances of "Symantec" in quotations.
The parties consented to a bench trial during briefing of the motions. See Stip. Withdrawing Jury Demand & Dismissing Mot. Bifurcate, ECF No. 233; Minute Entry (May 13, 2021). If a party believes that a previous order of the Court should be altered due to this change, such as if the Court excluded evidence explicitly and solely to prevent juror confusion, the party may move for reconsideration. But the Court does not anticipate such reconsideration being necessary.
Norton also moved to bifurcate the trial but subsequently withdrew the motion as moot in light of the parties’ stipulation to a bench trial. See Def.’s Mot. Bifurcate Trial, ECF No. 217; Stip. Withdrawing Jury Demand & Dismissing Mot. Bifurcate, ECF No. 233. That motion is therefore denied as moot.
II. BACKGROUND
The general background of this case has been laid out in previous opinions. See United States ex rel. Morsell v. Symantec Corp. , 471 F. Supp. 3d 257, 267–76 (D.D.C. 2020) ; United States ex rel. Morsell v. Symantec Corp. , No. 12-cv-800, 2020 WL 1508904, at *1–3 (D.D.C. Mar. 30, 2020) ; United States ex rel. Morsell v. NortonLifeLock, Inc. , No. 12-cv-800, 560 F.Supp.3d 32, 36–38 (D.D.C. Aug. 3, 2021). To summarize, the Government and the States claim that Norton violated the FCA, common law, state false claims acts, and state contract law when, "in the process of setting pre-negotiated maximum prices for government purchasers with the General Services Administration, Symantec overcharged them by misrepresenting the existence of certain prices and discounts that were available to Symantec's private customers and by consequently failing to offer government purchasers the same low prices these customers received." Morsell , 471 F. Supp. 3d at 267. Norton was "required to make certain representations and to provide details about their discounting policies" in their Commercial Sales Practices Format ("CSPs") disclosures, id. at 269, which were part of Norton's contract, see id. at 281–82. Norton's contract also contained a Price Reduction Clause ("PRC"), which "ensures that the Government's prices are reduced if [an agreed-upon] customer or category of customers is given lower pricing or increased discounts." Id. at 270.
The Government moves to exclude three categories of evidence: (1) "a July 1990 Procurement Information Bulletin," referred to as Bulletin 90-24; (2) Norton's designations of depositions of its own employees or former employees; and (3) expected testimony by Norton expert Avram Tucker that supposedly addresses contract interpretation and matters beyond his expertise. U.S.’ Mot. in Lim. & Mem. Supp. Thereof ("U.S. Mot.") at 1–2, ECF No. 210. This motion is fully briefed. See Norton's Opp'n to U.S.’ Mot. in Lim. & Mem. in Supp. Thereof ("Norton Opp'n"), ECF No. 229; U.S.’ Reply Supp. Mot. in Lim. ("U.S. Reply"), ECF No. 235.
The Government withdrew two of the grounds of its motion due to the parties’ agreement to proceed by bench trial. U.S.’ Reply Supp. Mot. in Lim. at 2, ECF No. 235.
Norton moves to exclude six categories of evidence: (1) all testimony of Government expert Ralph C. Nash, Def.’s Mot. in Lim. No. 1 ("Norton Mot. 1"), ECF No. 212; (2) any "evidence in support of any alleged false statements or false claims not identified in the [operative complaint], or through discovery" (and "order Plaintiffs to identify each and every false statement and claim falsity that they intend to prove at trial"), Def.’s Mot. in Lim. No. 2 ("Norton Mot. 2"), ECF No. 213; (3) documents and testimony not properly disclosed in discovery, Def.’s Mot. in Lim. No. 4 ("Norton Mot. 4"), ECF No. 215; (4) evidence that Norton contends "is irrelevant as a matter of law to the analysis of scienter under the [FCA]," Def.’s Mot. in Lim. No. 5 ("Norton Mot. 5"), ECF No. 216; (5) certain testimony of Government expert Dr. Allison Holt, Def.’s Mot. in Lim. No. 6 ("Norton Mot. 6"), ECF No. 219; and (6) all testimony from Government expert Dr. David A. Gulley, Florida expert Dr. Jamie M. Baldwin, California expert Dr. Zachary Nye, and Relator expert Seth Fliegler, Def.’s Mem. P. & A. Supp. Mot. in Lim. No. 7 ("Norton Mot. 7"), ECF No. 220-1. These motions are fully briefed. U.S.’ Combined Opp'n Def.’s Mots. in Lim. ("U.S. Opp'n"), ECF No. 231; States’ Joint Opp'n Def.’s Mots. in Lim. Nos. 2, 4 & 7 ("States’ Opp'n"), ECF No. 228-2; Def.’s Reply Br. Supp. Mot. in Lim. Nos. 1, 2, 4 & 5 ("Norton Reply Nos. 1, 2, 4 & 5"), ECF No. 237; Def.’s Omnibus Reply Br. Supp. Mots. in Lim. Nos. 6 & 7 ("Norton Reply Nos. 6 & 7"), ECF No. 238.
Norton withdrew its motion styled as motion in limine number three due to the parties’ agreement to proceed by bench trial. Notice of Withdrawal of Def.’s Mot. in Lim. No. 3 (ECF No. 214), ECF No. 236. That motion is therefore denied as moot.
III. LEGAL STANDARD
"While neither the Federal Rules of Civil Procedure nor the Federal Rules of [E]vidence expressly provide for motions in limine , the Court may allow such motions ‘pursuant to the district court's inherent authority to manage the course of trials.’ " Barnes v. District of Columbia , 924 F. Supp. 2d 74, 78 (D.D.C. 2013) (quoting Luce v. United States , 469 U.S. 38, 41 n.4, 105 S.Ct. 460, 83 L.Ed.2d 443 (1984) ). "Motions in limine are designed to narrow the evidentiary issues at trial." Williams v. Johnson , 747 F. Supp. 2d 10, 14 (D.D.C. 2010). "[A] motion in limine should not be used to resolve factual disputes or weigh evidence." C & E Servs., Inc. v. Ashland Inc. , 539 F. Supp. 2d 316, 323 (D.D.C. 2008) (citation omitted).
"In evaluating the admissibility of proffered evidence on a pretrial motion in limine the court must assess whether the evidence is relevant and, if so, whether it is admissible, pursuant to Federal Rules of Evidence 401 and 402." Daniels v. District of Columbia , 15 F. Supp. 3d 62, 66 (D.D.C. 2014). "Evidence is relevant if: (a) it has any tendency to make a fact more or less probable than it would without the evidence; and (b) the fact is of consequence in determining the action." Fed. R. Evid. 401. Relevant evidence is admissible unless otherwise provided by the U.S. Constitution, a federal statute, the Federal Rules of Evidence, or other rules prescribed by the U.S. Supreme Court. See Fed. R. Evid. 402. "Irrelevant evidence is not admissible." Id.
Although Federal Rule of Evidence 403 provides, in relevant part, that a court may "exclude relevant evidence if its probative value is substantially outweighed by a danger of ... unfair prejudice," Fed. R. Evid. 403, this portion of the Rule has a highly limited application, if any at all, to bench trials. See Schultz v. Butcher , 24 F.3d 626, 632 (4th Cir. 1994) (holding that "in the context of a bench trial, evidence should not be excluded under 403 on the ground that it is unfairly prejudicial"); Gulf States Utils. Co. v. Ecodyne Corp. , 635 F.2d 517, 519 (5th Cir. Unit A 1981) (holding that Rule 403 "has no logical application to bench trials" and that "excluding relevant evidence on the basis of ‘unfair prejudice’ [in a bench trial] is a useless procedure").
Federal Rule of Evidence 702 provides that qualified expert testimony is admissible if "(a) the expert's scientific, technical, or other specialized knowledge will help the trier of fact to understand the evidence or to determine a fact in issue; (b) the testimony is based on sufficient facts or data; (c) the testimony is the product of reliable principles and methods; and (d) the expert has reliably applied the principles and methods to the facts of the case." Fed. R. Evid. 702. A witness may qualify as an expert through knowledge, skill, experience, training or education. Id. "In general, Rule 702 has been interpreted to favor admissibility." Khairkhwa v. Obama , 793 F. Supp. 2d 1, 10 (D.D.C. 2011) (citing Daubert v. Merrell Dow Pharms., Inc. , 509 U.S. 579, 587, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993) ; Fed. R. Evid. 702 advisory committee's note (2000)) ("A review of the caselaw after Daubert shows that the rejection of expert testimony is the exception rather than the rule."). "The degree of ‘knowledge, skill, experience, training or education’ required to qualify an expert witness ‘is only that necessary to insure that the witness's testimony ‘assist’ the trier of fact.’ " Khairkhwa , 793 F. Supp. 2d at 11 (quoting Mannino v. Int'l Mfg. Co. , 650 F.2d 846, 851 (6th Cir. 1981) (noting that the weight of the evidence is a matter to be assessed by the trier of fact)). "[I]t is not necessary that the witness be recognized as a leading authority in the field in question or even a member of a recognized professional community." 29 Charles Alan Wright & Arthur R. Miller, Federal Practice & Procedure § 6265 (2015). "The ‘assist’ requirement is satisfied where the expert testimony advances the trier of fact's understanding to any degree." Khairkhwa , 793 F. Supp. 2d at 11.
"The Rule requires trial courts to assume a ‘gatekeeping role,’ ensuring that the methodology underlying an expert's testimony is valid and the expert's conclusions are based on ‘good grounds.’ " Chesapeake Climate Action Network v. Export-Import Bank of the U.S. , 78 F. Supp. 3d 208, 219 (D.D.C. 2015) (quoting Daubert , 509 U.S. at 590–97, 113 S.Ct. 2786 ). "The trial court's gatekeeping obligation applies not only to scientific testimony but to all expert testimony." Groobert v. President & Dirs. of Georgetown Coll. , 219 F. Supp. 2d 1, 6 (D.D.C. 2002) (citing Kumho Tire Co. v. Carmichael , 526 U.S. 137, 148, 119 S.Ct. 1167, 143 L.Ed.2d 238 (1999) ). The gatekeeping analysis is "flexible" and "the law grants a district court the same broad latitude when it decides how to determine reliability as it enjoys in respect to its ultimate reliability determination." Kumho Tire Co. , 526 U.S. at 141–42, 119 S.Ct. 1167. Trial courts may apply a variety of different factors in assessing reliability, including whether the expert's technique can be tested or has been subject to peer review, the existence of maintenance of standards and controls, and whether the technique has been generally accepted in the scientific community. See Groobert , 219 F. Supp. 2d at 6 (citing Daubert , 509 U.S. at 593–94, 113 S.Ct. 2786 ). In some cases, particularly in situations involving non-scientific testimony, the factors enunciated in Daubert may not be applicable, and a court's reliability analysis focuses on the expert's personal knowledge, which "can be a reliable and valid basis for expert testimony." Id. at 7 (citing Kumho Tire Co. , 526 U.S. at 149, 119 S.Ct. 1167 ); see also Fed. R. Evid. 702. Expert testimony, however, "that rests solely on ‘subjective belief or unsupported speculation,’ is not reliable." Groobert , 219 F. Supp. 2d at 6 (citing Daubert , 509 U.S. at 590, 113 S.Ct. 2786 ). The Court is also mindful that "where a bench trial is in prospect, resolving Daubert questions at a pretrial stage is generally less efficient than simply hearing the evidence." Victoria's Secret Stores Brand Mgmt., Inc. v. Sexy Hair Concepts, LLC , No. 7-cv-5804, 2009 WL 959775, at *6, n.3 (S.D.N.Y. Apr. 8, 2009). This is because, in a bench trial, the "factfinder and the gatekeeper are the same." In re Salem , 465 F.3d 767, 777 (7th Cir. 2006). A Daubert motion, therefore, effectively asks the Court to "gate-keep expert testimony from [itself]." Joseph S. v. Hogan , No. 6-cv-1042, 2011 WL 2848330, at *2 (E.D.N.Y. July 15, 2011) ; see also Ramirez v. U.S. Immigr. & Customs Enf't , No. 18-cv-508, 2019 WL 6036121, at *4 (D.D.C. Nov. 14, 2019) ("in a bench trial, the Court can easily discount the weight of any testimony the Professors might give that goes beyond the proper scope of their expertise"); 4 J. Thomas McCarthy, McCarthy on Trademarks & Unfair Competition § 23:2.75 (4th ed. 2015) ("In a non-jury trial ... the law gives the judge a wide scope of discretion to read expert affidavits or hear expert testimony which will assist in reaching an informed decision."). If a party seeks only partial exclusion of an expert's testimony, the expert "will be testifying anyway, so the efficiency gained or time saved by granting the motion in limine would be limited." Ramirez , 2019 WL 6036121, at *4.
Rule 37(c) provides, in relevant part, that if a party fails to identify a witness as required by Rules 26(a) or 26(e), which govern required initial and pretrial disclosures, "the party is not allowed to use that ... witness ... at a trial, unless the failure was substantially justified or is harmless." Fed. R. Civ. P. 37(c)(1). The Rule also permits the Court to impose other appropriate sanctions in addition to, or instead of, exclusion. See id. ; see also Sherrod v. McHugh , 334 F. Supp. 3d 219, 269 (D.D.C. 2018) ("A Rule 37(c)(1) exclusion, however, is an ‘extreme sanction’ that should be used sparingly.") (quoting Richardson v. Korson , 905 F. Supp. 2d 193, 199 (D.D.C. 2012) ); Richardson , 905 F. Supp. 2d at 200 ("Because preclusion of evidence is an extreme sanction, ... a court must consider less drastic responses before imposing this sanction." (cleaned up)). Local Civil Rule 16.5(b)(5) further provides: "No objection shall be entertained to a witness or to testimony on the ground that the witness or testimony was disclosed for the first time in a party's Pretrial Statement, unless the party objecting has unsuccessfully sought to learn the identity of the witness or the substance of the testimony by discovery, and the court or magistrate judge finds the information to have been wrongfully withheld."
Rule 37(c) of the Federal Rules of Civil Procedure also applies to information required to be disclosed under Rules 26(a) and 26(e). Rule 26(a) provides that a party, "without awaiting a discovery request," must provide in its Initial Disclosures, among other things, "cop[ies]—or a description by category and location—of all documents ... that the disclosing party has in its possession, custody, or control and may use to support its claims or defenses, unless the use would be solely for impeachment." Fed. R. Civ. P. 26(a)(1)(A)(ii). Rule 26(e) requires a party who has made a disclosure under Rule 26(a) or who has responded to, among other things, a request for production to supplement its disclosure or response "in a timely manner" if the party learns that the disclosure or response is materially incomplete or incorrect. Fed. R. Civ. P. 26(e)(1)(A) ; see also In re Sept. 11th Liability Coverage Cases , 243 F.R.D. 114, 124 (S.D.N.Y. 2007) ("The duty to disclose that arises under Rule 26 does not terminate after the first responsive answer or production, but is a continuing obligation."). A party proposing to admit evidence that it failed to disclose pursuant to Rules 26(a) and (e) "bears the burden of showing substantial justification and lack of harm" to the opposing party. Norden v. Samper , 544 F. Supp. 2d 43, 49–50 (D.D.C. 2008) (citing Coles v. Perry , 217 F.R.D. 1, 5 (D.D.C. 2003) ). "The timeliness of a [ Rule 37(c) ] motion for sanctions depends on such factors as when the movant learned of the discovery violation, how long he waited before bringing it to the court's attention, and whether discovery has been completed." Long v. Howard Univ. , 561 F. Supp. 2d 85, 91 (D.D.C. 2008).
IV. ANALYSIS
A. The Government's Motion in Limine
1. Bulletin 90-24
The Government moves to exclude Procurement Information Bulletin 90-24 ("Bulletin 90-24") under Federal Rules of Evidence 402 and 403. U.S. Mot. at 3. The Government argues that Bulletin 90-24 is irrelevant because it "refers to a prior version of the PRC" that did not tie the reporting requirement to the basis of award, as opposed to the current PRC which does. Id. at 4–5. Therefore, according to the Government, Bulletin 90-24's guidance to contracting officers "to not base a price reduction relationship with a vendor on, among other categories, ‘all commercial customers,’ " is irrelevant to this case because the GSA's incentives regarding broad bases changed when the reporting requirement changed. Id. at 4.
Norton responds that it will not argue that Bulletin 90-24 "governed the PRC in the Contract," and that Norton agrees that Bulletin 90-24 "was issued under a prior version of the PRC." Norton Opp'n at 3–4. Norton argues that Bulletin 90-24 is relevant because it "reflects long-standing GSA policy and instruction to its contracting officers concerning how to choose the ‘basis of award’ and the ‘price-discount relationship,’ " and that the two PRC versions were "virtually identical with respect to the two terms central to the GSA and Symantec's ... agreement: ‘basis of award’ and ‘price-discount relationship.’ " Id. at 4. Norton notes that the Government has not argued that Bulletin 90-24 "was ever withdrawn or superseded when the PRC changed." Id.
The Court is not convinced that this document can serve no relevant purpose, and therefore will not grant the Government's motion to exclude it. The Court appreciates that the change in PRC reporting requirements affects the relevance of this document, but in light of Norton's arguments above, the Government has not sufficiently shown that this document could not possibly meet the low bar of Rule 401 relevance. The fact that Bulletin 90-24 provides guidance on one of the provisions at issue (albeit an older version) and has not been withdrawn or otherwise revised is enough to meet the minimal Rule 401 requirement. Thus, the Government's concerns will go to the weight, if any, to be given to the document, not its relevance. The Court similarly is not concerned with unfair prejudice from this document given that this will be a bench trial.
2. Deposition Designations of Current and Former Norton Employees
The Government moves to "exclude Symantec's deposition designations of its own employee or former employee witnesses" as hearsay under Federal Rule of Evidence 802. U.S. Mot. at 7. The Government argues that deposition testimony is hearsay unless an exception applies, and that no exceptions apply here. Id. at 7–8. The Government argues that 31 U.S.C. § 3731(a) provides for nationwide subpoenas, such that the typical rule allowing use of depositions when a deponent is located more than one hundred miles away does not apply in FCA cases. Id. at 8–9. The Government acknowledges that "as the parties move towards trial in this action factual circumstances regarding specific witnesses may cause those witnesses to become unavailable, or the parties may stipulate that certain witnesses are unavailable." Id. at 10. The Government reads Local Rule 16.5(b) to require only designation of depositions in the Joint Pretrial Statement that a party currently intends to offer as evidence, i.e., not for witnesses it presently intends to call for live testimony. U.S. Reply at 8–10.
Norton responds that it "has made no decision ... as to whether it will be calling the six identified witnesses at trial, let alone whether it will need to use the designations in question." Norton Opp'n at 8–9. Norton believes that Local Rule 16.5(b) required it to designate all depositions in the Joint Pretrial Statement that it might potentially use under any circumstance "[b]ecause the availability of these witnesses cannot be known," e.g., if a witness becomes unavailable or it would cause the witness an undue burden. Id. at 8–10.
The Government's motion to exclude Norton's deposition designations of its own employees or former employees is granted because the deposition testimony is hearsay and Norton has not yet shown that any hearsay exception is met. But, as the Government acknowledges, witnesses may become unavailable in the future based on new factual circumstances. Therefore, if a witness becomes unavailable, either party may move to admit that witness's deposition testimony within five business days of notice of such unavailability but no later than the date of the pretrial conference.
3. Certain Tucker Testimony
The Government moves to exclude testimony by Norton's expert Avram Tucker "regarding interpretation of the Contract or GSA MAS [Multiple Award Schedule] contracting industry standards." U.S. Mot. at 21. Norton does not appear to dispute that expert testimony providing legal opinions or conclusions, such as the proper interpretation of a contract, is impermissible. But Norton disagrees about whether Tucker offers such opinions. See, e.g. , Norton Opp'n at 24 ("Tucker does not seek to testify regarding legal or contract interpretations as the government contends."). Overall, the Government's view of the role of economics experts is closer to the Court's. It is generally acceptable for counsel to provide factual assumptions to an expert—without asking the expert to opine on whether those assumptions are correct—and for counsel to then attempt to prove the correctness of those assumptions with other evidence. It is also true that if it is shown that the assumptions underlying an expert's opinions are incorrect, the expert's opinions likely become unreliable and unhelpful to the jury. But making such a showing will often not be possible pre-trial if it depends on disputed issues of fact.
First, the Government seeks to prevent Tucker from testifying "regarding the contractual (or legal) significance of stock keeping numbers (‘SKUs’) not found on the Contract's pricelists." U.S. Mot. at 24. Tucker may not offer opinions regarding whether sales for products having SKUs not found on the relevant contract's pricelist should be included for damages. He may, however, offer opinions regarding the effect on damages of excluding such sales. Norton frames Tucker's testimony as "conventional challenges to an economic expert's methodology." Norton Opp'n at 24. But the underlying question is whether the contract between GSA and Norton includes such products. In other words, the important question is whether the products in question are open market items, not whether open market items should be included in damages calculations. Tucker's testimony is not helpful in making this determination. Tucker's testimony adds only that when the contract is not followed in calculating damages, the damages calculation will be incorrect. See id. at 25 (" ‘ it would not make economic sense ’ to include in a damages calculation ‘open market items ... that ... are not an MAS contract sale as I described in paragraph 43’ " (alterations in original) (quoting Tucker Tr. at 122–23, ECF No. 229-9)); see also Tucker Rpt. ¶ 74, ECF No. 221-5 ("[A]s a general consideration, economic damages must flow from the agreement. It is not economically proper to quantify PRC related damages on sales that are not Symantec GSA Schedule sales ...."). Whether the contract between GSA and Norton includes such products is not the proper subject of expert testimony because it does not require "scientific, technical, or other specialized knowledge." Fed. R. Evid. 702. Testimony regarding the typical practice in this area, such as whether it is commonly understood that these contracts do not cover sales for product SKUs not found on the contract's pricelist, could be permissible assuming all other requirements are met, e.g., the expert has sufficient relevant experience. But Tucker cannot opine on what this particular contract covers.
Second, the Government seeks to prevent Tucker from testifying "regarding the importance of terms and conditions under the Contract and as a GSA MAS contracting industry standard." U.S. Mot. at 24. Tucker may not offer opinions regarding which sales are appropriate to consider in damages calculations based on their terms and conditions. He may, however, offer opinions, based on assumptions that are provided to him, regarding the effect on the damages calculations of excluding sales that supposedly are not covered by the contract due to differences in terms and conditions—without opining that those sales in fact are not covered by the contract. Norton frames Tucker's testimony as opining that, "based on his experience, ‘[a] comparability determination would require review of (1) product similarities and differences; (2) terms and conditions of each sale; and (3) the economic impact of differing terms and conditions on the transaction.’ " Norton Opp'n at 28 (quoting Tucker Rpt. App. 3 ¶ 31). But again, the underlying question is whether these are required by the contract, and that is a function of contract interpretation. For example, Norton argues that "Tucker ... identified [a] failure to consider and compare the terms and conditions of commercial sales and GSA Schedule sales in the government's damages methodology." Id. at 29. Norton also argues that "Tucker's opinion on the economic importance of considering the terms and conditions of commercial sales" is "based on solid economic principles and Tucker's review of the relevant facts." Id. at 30. But Tucker could not truly identify a "failure" unless he also asserted that the contract required the Government's expert "to consider and compare the terms and conditions." His "opinion on the economic importance of considering the terms and conditions" is also dependent on such a comparison being required by the contract. He cannot properly testify to this legal conclusion. Moreover, if that legal conclusion were to be established in this case, expert testimony would not be required to demonstrate that a failure to perform the required comparison would undercut the Government's damages calculation. However, Tucker could, in that situation, provide helpful testimony regarding the effect on the damages calculations. Additionally, testimony regarding the typical practice in this area, such as to what extent terms and conditions typically exclude sales and how such comparisons are performed, could be permissible assuming all other requirements are met, e.g., the expert has sufficient relevant experience. But Tucker cannot opine on whether particular sales should have been considered under this contract.
Third, the Government argues that Tucker provides impermissible "[o]pinions that there are industry standards governing economically reasonable analyses of GSA MAS contracts." U.S. Mot. at 25. These include opinions such as "Plaintiffs’ experts have not performed a proper economic damages analysis," and "Dr. Holt's analysis is not reasonable from an economic business standpoint." Id. These appear to be closer to common-sense conclusions based on Tucker's other opinions, rather than unhelpful legal-conclusion testimony. Because this is a bench trial with greatly lessened danger of unduly influencing the finder of fact, the Court declines to exclude this testimony.
Fourth, the Government argues that Tucker provides impermissible "[o]pinions regarding the GSA MAS contracting industry standards of what constitutes a ‘deal’ and the reasonableness of using line item discounts as PRC triggers." U.S. Mot. at 26. These include opinions such as "an order line item discount is not representative of the discount negotiated with and provided to the customer" and "Dr. Holt's assumption that an individual order line item is a separate deal is unsupported and economically unreasonable." Id. (quoting Tucker Rpt. ¶¶ 99–100). He opines that it is necessary "to calculate discounts on the entire order, not on a line item." Id. The Government argues that this testimony is impermissible because it is "bereft of identifiable standards or reliable methods," "a sound analytical methodology, [ ]or any qualifications on the basis of his practical experience or training." Id. at 34–35. The Government further argues that Tucker's testimony is irrelevant "because the word ‘deal’ is not a term found in the Contract." Id. at 35. The Government cites Tucker's opinion that he "analyzed the Symantec commercial sales data, and other related data, relied on by Dr. Holt and determined that Symantec negotiates ‘deals’ at the order level or multiple order level." Id. at 27 (quoting Tucker Rpt. ¶ 100).
Norton responds that "Tucker has significant practical experience and training in government contracting and damages issues. And his opinions are based on solid economic analysis as well as his examination of Symantec's actual practices, not in reliance on any legal interpretation of the relevant contracts or regulations or assumptions provided by trial counsel." Norton Opp'n at 31–32 (citation removed). Norton argues that "Tucker's opinion is based on his analysis that, from an economic perspective, determining discounts on a line-item basis leads to artificially inflated discount rates." Id. at 32. Norton provides a simple example from Tucker's report, where a hypothetical order contains two items—one discounted 80% and one undiscounted—and would result in an 80%-discounted item under Holt's methodology despite the "economic realit[y]" that the discount of the entire order was 40%. Id. (quoting Tucker Rpt. ¶ 100). Norton offers another simple example of "buy three and get one free," where Norton asserts that "it would be misleading to claim that the customer got a 100% discount on one item if it had to buy the three other items at full price." Id. at 33. Again, as the Court understands it, this issue depends on a legal interpretation. See U.S. Reply at 13 ("It is Symantec's job at trial to provide admissible evidence ... that such a review is mandated by the Contract or GSA's regulations."). Therefore, Tucker may not opine on whether order-level discount calculations are required in this case. However, testimony regarding the damages impact of using line-item versus order-level calculations, or why one method is more likely to be used in practice, or the fact that one method is used more often in practice, could be admissible assuming all other requirements are met. Were this case tried to a jury, the Court would have more concern about undue prejudice from an expert coming so close to testifying to a legal conclusion. The simple examples provided by Tucker and Norton do not require an expert's explanation. But such risks are minimal or nonexistent in a bench trial, and therefore the Court declines to exclude Tucker's testimony on these points.
Additionally, Tucker may not opine that "Symantec did not consider individual line items to be deals." Norton Opp'n at 32. This conclusion would not be helpful to the Court in making such a factual determination.
Fifth and last, the Government argues that Tucker provides impermissible "[o]pinions regarding whether the United States may seek damages for overcharges of Symantec products on UNICOM and Carahsoft's GSA contracts." U.S. Mot. at 27. However, most of the quotations cited by the Government are not phrased unambiguously as opinions. They are instead more naturally read as reflecting assumptions provided by Norton's counsel. See, e.g. , id. ("I understand that the resellers’ and distributors’ GSA Multiple Award Schedules would not be subject to Symantec's PRC and Symantec's agreed-to-price relationship, but rather their own PRCs and agreed-to price relationships.... I understand that Symantec's position is that it is not liable for sales made after September 2012. Dr. Gulley included approximately $105.5 million of resellers’ and distributors’ GSA Multiple Award Schedule sales occurring between October 2012 and July 2014." (quoting Tucker Rpt. ¶¶ 94–95) (emphases added)). There is even a reference to "Symantec's position." Reading these as assumptions provided by counsel, the Court does not see the need to exclude them.
The Government also cites Tucker's criticism of Gulley for "provid[ing] no basis to claim damages related to" these sales. Id. Norton responds that this is not a legal opinion but merely a challenge to the reliability of Gulley's methodology due to his "failure to analyze resellers’ and distributors’ MAS sales to determine whether they should be subject to Symantec's GSA schedule." Norton Opp'n at 30. This criticism is not proper expert testimony because it does not draw on any of Tucker's specialized training or experience. Additionally, Gulley may properly rely on assumptions of liability provided by counsel for the purposes of damages calculations. Tucker's opinion accordingly would not be helpful to the trier of fact. Therefore, Tucker may not offer opinions criticizing Gulley merely for assuming liability for damages relating to the resellers’ and distributors’ sales.
B. Norton's Motions in Limine
1. Nash Testimony
Norton argues that the Government's expert witness, Professor Ralph C. Nash, provides impermissible legal-opinion and contract-interpretation testimony that violates the rule against experts providing legal opinions, is unhelpful to the jury, is irrelevant, and has the potential to mislead under Rule 403. Norton Mot. 1 at 1–2, 4. Specifically, Norton objects to Nash's opinions "on the ‘proper’ interpretation of Symantec's GSA Schedule contract" and "special industry usage of contract terms in Symantec's GSA Schedule contract, including ‘commercial class of customers.’ " Id. at 1. Norton also argues that Nash's industry-usage opinions were untimely disclosed because they are not proper rebuttal. Id. at 2.
Regarding contract interpretation, Norton argues that Nash "would tell the jury exactly what result to reach on this contested issue in this particular case." Id. at 4 (quoting Morsell , 2020 WL 1508904, at *6 ). Norton notes that the Government intended to withdraw these Nash opinions if Norton's experts William Gormley and Larry Allen were excluded from providing testimony as to the interpretation of the contract. Id. at 5 (quoting Nash Rpt. at 2, ECF No. 212-2). The Government "does not intend to offer Professor Nash's first opinion provided that the Court's Daubert opinion excluding the testimony of Symantec's Industry Advocates on this topic remains undisturbed." U.S. Opp'n at 12–13. Therefore, the Court grants Norton's motion to exclude Nash's first opinion. If the currently excluded Gormley and Allen testimony is ultimately included, Nash's opinions will similarly be included.
Norton next argues that Nash's second opinion—regarding industry usage of contract terms—is also impermissible because "in reality" it is "nothing more than contract interpretation." Norton Mot. 1 at 6. Norton faults Nash for opining that he is "unaware of any industry definitions or terms of art" for certain words or phrases "that would contradict the government's plain language reading of the Contract." Id. (emphasis removed) (citing Nash Rpt. at 25). Through this testimony, Norton believes that "Nash advocates for the government's interpretation of" the contract terms. Norton Reply Nos. 1, 2, 4 & 5 at 2. Norton also argues that Nash impermissibly "parrot[s] the government's legal argument that one should look to the FAR definitions of completely different terms," and that Nash should not be allowed to opine that there is "but one reasonable interpretation in the Contract" of "commercial class of customer" "based on [his] reading of the Contract." Norton Mot. 1 at 6 (quoting Nash Rpt. at 24–26). Norton continues that not only is this impermissible contract-interpretation testimony, but "Nash's testimony offers no specialized knowledge that will help the jury understand the evidence or determine a fact in evidence, the threshold requirement for Rule 702." Id. at 6–7. This is in part because Nash "asserts that the contract's plain language speaks for itself, and there is no special industry usage of ‘commercial class of customers.’ " Id. at 7. According to Norton, if the contract's plain language speaks for itself, then Nash's testimony will not be helpful to the factfinder. Last on this issue, Norton argues that the Court already held that the contract terms at issue were ambiguous and that Norton's interpretation of those terms was reasonable, which would render Nash's testimony to the contrary irrelevant and unduly prejudicial. Id.
The Government responds that Nash's second opinion merely rebuts Gormley and Allen's testimony "regarding standards and terms used in the government contracts industry." U.S. Opp'n at 13. According to the Government, Nash will properly testify, based on his decades of experience in the field, to "the lack of industry standards or terms that negate the FAR or plain language definitions" of the contract terms. Id. at 14. Nash's extensive experience in this field, including "more than six decades of government contracts industry scholarship and experience," id. , qualifies him to opine on industry usage of contract terms, and those opinions may be useful to the Court for understanding the contract terms’ usage in this case. But regardless of Nash's experience in this area, he may not opine on the meaning of the contract terms at issue in this case. It is the Court's job to analyze the evidence and determine the contract's meaning. Accordingly, Nash may opine that he is unaware of industry definitions or terms of art different from those advocated by the Government for certain contract terms. Nash may also opine generally upon what sources may be relevant for interpreting the terms at issue and why they may be relevant. But he may not opine directly on the meaning of the terms of the contract at issue, nor the proper method for interpreting those terms, because those determinations are the Court's responsibility. In light of the above, Norton's objection regarding the Court's previous determinations of ambiguity is no longer an issue because Nash may not opine on the contract's meaning.
Finally, Norton argues that Nash's opinions on industry usage of contract terms were untimely because they were disclosed in rebuttal, yet do not rebut any of Norton's affirmative expert testimony. Norton Mot. 1 at 8–9. The Government responds that Nash's testimony is proper rebuttal because Gormley and Allen will testify about "whether broad basis of awards are typical in the industry" and "industry experience that GSA has agreed on a wide variety of basis of awards," and "Nash will contradict these views" by opining that the contract terms "have no industry meaning that differs from their plain language." U.S. Opp'n at 15.
As limited above, Nash's testimony is similar enough to that of Gormley and Allen to be considered "the same subject matter," as required by Federal Rule of Civil Procedure 26(a)(2)(D)(ii). Both concern typical industry usage of contract terms relating to breadth of customers. Nash will not be permitted to "interpret[ ] contractual language and opine[ ] on its meaning, impermissibly offering ‘testimony specific to the Defendant's contract,’ " Norton Reply Nos. 1, 2, 4 & 5 at 5 (quoting Morsell , 2020 WL 1508904, at *11 ), which the Court believes addresses Norton's concern. Additionally, Norton does not demonstrate any prejudice it would suffer as a result of allowing this testimony.
2. Order to Identify All False Statements and Claim Falsities; Evidence of False Statements or False Claims Not Identified in Complaint
Norton moves the Court to order Plaintiffs to identify every false statement and false claim that they intend to prove at trial, and to exclude evidence in support of any alleged false statement or false claim not identified in the operative complaint (ECF No. 70). Norton Mot. 2 at 1. Norton accuses Plaintiffs of alleging "an evolving list of false statements and theories of claim falsity," including the Government "articulat[ing] a new False Statements theory of recovery not disclosed in its discovery responses or the Complaint; namely, that Symantec's Multiple Award Schedule (‘MAS’) pricelists constituted false statements material to the claims containing those prices." Id. Norton claims that it is prejudiced by this newly disclosed theory because it was denied the opportunity to conduct discovery on this theory of recovery. Id. The allegedly new theory of liability comes from the Government's inclusion of the following language in the pretrial statement:
Under False Claims Act, 31 U.S.C. § 3729(a)(1)(B), a False Statements Claim alleging that Symantec knowingly made, used, or caused to be made or used false records or statements that were material to false or fraudulent claims. Specifically, the United States alleges that Symantec used its false CSP disclosures and false MAS pricelists (which failed to reduce prices as required by the PRC) , and caused UNICOM and Carahsoft to use the same, and these were material to inflated claims submitted under Symantec's, UNICOM's, and Carahsoft's MAS contracts for Symantec products and services. Compl. at Counts II, IV.
Joint Pretrial Statement at 19–20, ECF No. 208 (emphasis added). Norton faults the Government for not adequately disclosing its argument that the MAS pricelists were false records or statements material to false or fraudulent claims. Norton also criticizes the Government's inclusion of the phrase "but not limited to" in its written responses because of its negative effect on the specificity of the Government's claims. Norton Mot. 2 at 4. Last, Norton suggests that there may be a legal deficiency with "an allegedly false pricelist ... serv[ing] both as a false statement and the underlying falsity in the claim to which it is material." Id. at 6 (citing 31 U.S.C. § 3729 ). Regarding the States’ claims, Norton argues that "[t]he States’ discovery responses were even less clear regarding the allegations they plan to pursue at trial," in part for also including "but are not limited to" language. Id. at 5.
Regarding Norton's request for the Court to order Plaintiffs to further identify claims and statements, it is not necessary because Plaintiffs are already limited to the claims identified in the pretrial statement. See Winmar, Inc. v. Al Jazeera Int'l , 741 F. Supp. 2d 165, 185 (D.D.C. 2010) ("A party's failure to advance a theory of recovery in a pretrial statement issued following discovery conference constitutes waiver of that theory." (quoting Gregory v. Shelby County , 220 F.3d 433, 442–43 (6th Cir. 2000) )). If Plaintiffs try to assert new claims or statements beyond those identified in the pretrial statement, Norton can move at that time to prevent Plaintiffs from advancing those theories. The pretrial statement is what governs, so Norton should not be concerned about other arguments, theories, or allegations. Because it is not possible or expected to include every detail of every claim in the pretrial statement, arguments that Plaintiffs went beyond the pretrial statement must be addressed as they arise.
Regarding Norton's request that the Court generally exclude evidence in support of false statements or claims not contained in the operative complaint or identified in discovery, Plaintiffs already cannot prevail on such statements or claims. If Plaintiffs attempt to do so, Norton can move at the appropriate time.
Norton identifies only one claim with specificity that it believes has not been sufficiently identified in the complaint or through discovery: "that Symantec's Multiple Award Schedule (‘MAS’) pricelists constituted false statements material to the claims containing those prices." Norton Mot. 2 at 1. But the Government argues persuasively that the pricelists issue stems from violations already disclosed: "the Complaint clearly alleges Symantec conveyed falsely inflated prices to the government, and the MAS pricelist was merely a conduit for that conveyance. " U.S. Opp'n at 3 (emphasis added). Norton has been on notice about this issue, and if the Government uses the pricelists for another purpose not reasonably disclosed, Norton can move for relief at that time. Additionally, Norton has not identified how it would be prejudiced even if this theory was not previously disclosed. Norton generally says that it would have conducted different discovery, but that is not specific enough; that generic justification could be proffered for any late-disclosed theory.
Norton argues that "the Joint Pretrial Statement identifies only some of the CSP falsities alleged in [the Government's] interrogatory responses," Norton Mot. 1 at 4, and seems to be concerned that the Government will try to prove falsities that are not documented in the pretrial statement. Again, if Norton later believes that the Government is pursuing falsities not fairly disclosed in the Joint Pretrial Statement, it can move for relief at that time.
Regarding whether a pricelist can serve as both a false statement and a false claim, Norton has not advanced this argument with any specificity, merely citing 31 U.S.C. § 3729, the FCA liability statute. The Court will not consider this skeletal argument at this time.
3. Documents and Testimony Not Disclosed in Discovery
Norton moves the Court to preclude California from using (1) documents produced after the close of discovery and (2) witnesses not disclosed during discovery. Norton Mot. 4 at 1. It argues that Federal Rule of Civil Procedure 37(c)(1) justifies these remedies. Id. at 2.
a. Documents
Regarding the documents, Norton notes that fact discovery closed on May 19, 2017, with expert discovery continuing until March 1, 2019. Id. at 1 n.2. California served the expert report of Dr. Zachary Nye on October 6, 2017, after the close of fact discovery, which stated that Nye considered "Various SLP Offer Letters" in forming his opinions. Id. at 5. Norton states that it "inquired about these documents" during a meet and confer with California but that "California never produced any additional documents or otherwise identified which SLP Offer Letters were reviewed by Dr. Nye." Id. at 5–6. In his March 13, 2019 deposition, "Nye testified that he did not know what SLP Letters of Offer he actually considered or how Symantec could identify those documents." Id. at 6. Norton's counsel "repeated his request during the deposition that [these documents] be produced or identified." Id. Norton asked for these documents again in an April 10, 2019 email. Id. California produced additional documents beginning around January 27, 2020, on this issue. The first production "consisted entirely of SLP contracts. " Id. California served a corrected Nye report that "no longer" referenced "Various SLP Offer Letters," but instead referenced the documents in the new production as well as six "previously undisclosed Excel files." Id. California made a second related production on November 2, 2020, consisting of invoices. Id. at 7.
Regarding harm, Norton argues that "failure to comply with the Court's discovery deadlines is, in-and-of-itself, harmful," and that Norton was prevented from deposing Nye regarding these documents, using these documents to rebut Nye's opinions, and using these documents in its summary judgment briefs. Id. at 8–9. Norton notes that it "questioned Dr. Nye about three SLP Contracts that California had timely produced, but was, of course, unable to question him about the SLP contracts that were not produced (nor disclosed in his report)." Id. at 10 (citation omitted). Norton believes that "restarting even limited discovery centered around these exhibits would be extremely disruptive to Defendant's ability to prepare for trial." Norton Reply Nos. 1, 2, 4 & 5 at 14.
Regarding justification, Norton acknowledges California's explanation that the delay was due to Nye having "erroneously listed the SLP Contracts as ‘SLP Letter Offers’ in Exhibit 2 to his Report," but does not believe this is sufficient justification because Norton raised the issue long before the documents were produced. Id. at 10–11. Norton also faults California for not searching for responsive documents earlier. Id.
California does not dispute that the documents were produced after the close of discovery but argues that its late disclosure was substantially justified and harmless. States’ Opp'n at 5–6. California recounts its efforts requesting relevant documents from the California Department of General Services ("DGS")—the California Attorney General's Office ("CAGO") is handling this suit on behalf of the state—and producing documents to Norton. See id. at 7–9. California notes that it produced "the majority of CMAS contracts at issue and more than half of the SLP contracts at issue" during fact discovery, and that Norton used only one SLP contract and no CMAS contracts or invoices to examine California's 30(b)(6) witnesses. Id. at 8. Six days after fact discovery closed, DGS sent California "additional SLP contracts not previously in the CAGO's possession." Id. at 9. Nye reviewed these contracts in connection with drafting his expert report but, erroneously and unknown to California, described them as SLP offer letters. Id. Contrary to Norton's assertion above, California asserts that during the meet and confer referenced by Norton above, "Symantec never inquired about or sought production of the ‘Various SLP Letter Offers’ listed on Nye Exhibit 2," and that California produced the expert materials that Norton did request. Id. On April 29, 2019, approximately a month and a half after Nye's deposition, California told Norton that Nye had in fact reviewed contracts, not letters, and "that the majority of the SLP contracts were publicly available on the California government website, BidSync, and provided Symantec with a link/URL." Id. at 10. Norton did not reply to this email. Id. Instead, on December 12, 2019, California told Norton "that Dr. Nye would be amending his Expert Report to correct the error" regarding the documents he reviewed and "that California would be producing all SLP contracts reviewed by Dr. Nye and erroneously referenced in Exhibit 2 as ‘various SLP Letter Offers.’ " Id. On December 17, 2019, Norton stated that it may want to re-open Nye's deposition to inquire about his use of the SLP contracts. Id. at 11. "California produced all SLP contracts reviewed by Dr. Nye" on January 27, 2020, including fourteen publicly available contracts that Nye downloaded from BidSync. Id. In 2019, after fact discovery closed, California also received "three additional CMAS contracts" from DGS and discovered that it had produced some contracts to Norton with pages missing. Id. at 16. California told Norton that DGS was continuing its search in December 2019. Id. On October 14, 2020, DGS confirmed it had provided California with all CMAS and SLP contracts it could find. Id. On November 2, 2020, California produced the additional contracts and pages. Id. Norton has not sought to re-open Nye's deposition, and California "remains willing" to do so regarding this issue. Id. at 11.
In support of its argument that its late disclosures were substantially justified, California explains that "[i]n its November 9, 2015, Rule 26(a) disclosures, the CAGO informed Symantec that DGS was a third-party to the litigation, that the CAGO would make reasonable efforts to assist Symantec in obtaining documents from DGS, and that the CAGO might rely at trial on documents in DGS's possession, custody, or control, including ‘contract files’ and ‘contracts.’ " States’ Opp'n at 7. Whether or not this is justified would not affect the Court's ruling on this issue. But the Court notes that if Norton had an issue with this that could not be resolved directly with California, as it seems to based on its reply, see Norton Reply Nos. 1, 2, 4 & 5 at 10–13, it should have brought it to Court's attention earlier. Norton appears to have been on notice of California's position for several years, and it is inappropriate to wait until well after the close of discovery and so close to trial to dispute an opposing party's fundamental discovery obligations.
Norton responds that it "did not request the SLP contracts Mr. Nye utilized in writing his report because they weren't identified as SLP contracts. " Norton Reply Nos. 1, 2, 4 & 5 at 13. But California seems to be referring to Norton's assertion that "during a meet and confer with counsel for California, Symantec's counsel specifically inquired about these documents," i.e., the "Various SLP Offer Letters." Norton Mot. 4 at 5.
California also addresses its third supplemental production in its brief, but Norton has not moved to exclude those documents specifically.
Regarding justification, California explains that it was not in possession of the documents before the close of fact discovery (because they were possessed by DGS), although it acknowledges that it should have produced the contracts "when obtained during expert discovery." Id. California also notes "that the majority of the SLP contracts were publicly available on the Bidsync website," and California had provided that link to Norton. Id. California acknowledges that pages were missing from some produced contracts due to an error. Id. at 16.
Regarding harm, California explains that the errors were corrected sufficiently before trial. "California produced the SLP contracts reviewed by Dr. Nye in January 2020, 14 months before Symantec filed this motion," and made its second late production "four months ago with no questions, response, or reaction from Symantec." Id. at 12, 16. California notes that there is still time to re-open Nye's deposition for this purpose, and any disruptions from such a deposition "could have been significantly mitigated had Symantec acted in a more timely fashion." Id. at 13. California argues that Norton's "claims of harm are generalized," Norton has not explained what it would have questioned Nye about "that it could not have asked him about using the SLP contracts it already had," and Norton has not explained what its own expert might have done differently with the additional documents. Id. at 14–15. The second late production was made four months before the instant brief was filed, "with no questions, response, or reaction from Symantec." Id. at 16.
The Court will not preclude California from using these documents. It is true that Norton was prevented from using these documents in its depositions and motions, but "preclusion of evidence is an extreme sanction." Richardson , 905 F. Supp. 2d at 200. Excluding this evidence would be too strong a remedy here given that Norton has not provided specifics about the harm it would face. The harm Norton describes could be said for any late-disclosed documents or witnesses. Additionally, Norton's delay in addressing this issue is indicative of the low degree of harm Norton perceives. If Norton believes that Nye's deposition should be reopened or that other measures should be taken to properly prepare for trial relating to these documents, Norton may seek leave as appropriate.
b. Testimony
Norton argues that Bryan Duggar, Kimberly Hettrick, Jyoti Patel-Osbey, and Marty Zubeidi should be prevented from testifying because they were not previously disclosed by California in its initial disclosures or interrogatory responses as persons likely to have discoverable information. Norton Mot. 4 at 7–8. Norton argues that it was harmed because it could not depose, or seek discovery relating to, these four witnesses. Id. at 9. Norton further argues that California's justification—that these witnesses take the place of witnesses that have retired—is insufficient because California never amended its disclosures or interrogatory response, one deposed witness "retired long before the close of fact discovery," id. at 12, and California does not explain why retirement would prevent them from testifying, Norton Reply Nos. 1, 2, 4 & 5 at 15. Norton notes that if California's witnesses were purportedly unavailable because they are in "high-risk categori[ies]" for travel, Norton could have pursued live testimony by video or designated their deposition testimony. Norton Mot. 4 at 12–13. Norton argues that it should not be forced to resume fact and expert discovery that would consume resources and distract from trial preparation. Id. at 13.
Patel-Osbey was disclosed in an interrogatory response within a list of nineteen "DGS Program Analysts who worked on CMAS contracts for Symantec authorized resellers" as someone who "had any responsibilities with respect to the purchase of Symantec products by the State of California." Id. at 8 n.7.
California argues that Norton cannot meet the requirements of Local Civil Rule 16.5(b)(5) to justify excluding these witnesses. The rule states:
No objection shall be entertained to a witness or to testimony on the ground that the witness or testimony was disclosed for the first time in a party's Pretrial Statement, unless the party objecting has unsuccessfully sought to learn the identity of the witness or the substance of the testimony by discovery, and the Court or magistrate judge finds the information to have been wrongfully withheld.
Local Civil Rule 16.5(b)(5). Regarding Patel-Osbey, California argues that its disclosure of her in an interrogatory response shows that Norton knew of her identity, and that Norton knows the substance of her testimony because the Joint Pretrial Statement describes her expected testimony with the same description as topics from Norton's 30(b)(6) notice, about which Norton deposed another witness. States’ Opp'n at 19. California argues that Norton "offers no evidence that California wrongfully withheld information about Ms. Patel-Osbey or the substance of her testimony." Id. Regarding Hettrick, Duggar, and Zubeidi, California does not contest that Norton attempted to learn of their identities by discovery. But California argues that it did not wrongfully withhold that information as shown by Norton's lack of evidence on that point and California's offer made months before the instant motion to allow depositions of these witnesses. Id. at 21. California also argues that Norton was not harmed by these late disclosures at least because these witnesses will be testifying on the same topics as witnesses Norton already deposed, and California offered the opportunity to depose the new witnesses. Id. at 20–22. California emphasizes that exclusion is an extreme sanction that is not justified here. Id. at 22. Conversely, if denied the opportunity to offer these witnesses, California would "suffer significant prejudice because it would deprive California of critical evidence needed to present its case." Id.
California argues that Rule 16.5(b)(5) requires showing that "the party objecting has unsuccessfully sought to learn" both "the identity of the witness" and "the substance of the testimony by discovery." See States’ Opp'n at 20 ("[E]ven assuming Symantec's discovery requests amount to an unsuccessful attempt to learn the identity of these witnesses, Symantec must also show that it (1) unsuccessfully sought to learn the subject of their testimony and (2) that California wrongfully withheld it."). But the rule only requires one "or" the other.
Norton's motion to exclude the witnesses is granted. For purposes of the threshold requirements of Local Civil Rule 16.5(b)(5), Norton unsuccessfully sought the identity of the witnesses and the Court finds that, as things stand today, the information was wrongfully withheld. Norton served an interrogatory requesting identification of each person having discoverable information supporting or negating California's positions in the litigation, and California did not name the four witnesses in response. Norton Mot. 4 at 7–8. California identified Patel-Osbey as a person who "had any responsibilities with respect to the purchase of Symantec products by the State of California" in response to a separate interrogatory within a list of nineteen "DGS Program Analysts." Id. at 8 n.7. But this is not sufficient identification to prevent the Court from even "entertain[ing]" an objection to a late-disclosed witness. Local Civil Rule 65(b)(5). Norton therefore unsuccessfully sought the identity of the witnesses.
Additionally, the Court finds that California wrongfully withheld the identities of the four new witnesses for purposes of Local Civil Rule 65(b)(5). California does not explain in its motion why it waited until the Joint Pretrial Statement, filed on January 15, 2021, to disclose these individuals as witnesses when the individuals whose testimony California seeks to replace retired months or years earlier. See Joint Pretrial Statement, ECF No. 208 (filed Jan. 15, 2021); Decl. of Rachel Coles ¶¶ 47–51, ECF No. 227-2 (stating that the three original witnesses retired in April 2016, June 2019, and June 2020).
With the Local Rules threshold satisfied, the question becomes whether California's "failure [to identify the witnesses] was substantially justified or is harmless." Fed. R. Civ. P. 37(c)(1). The Court holds that California's late disclosure was neither. California has not explained why, as Norton suggests, it has not considered either live testimony via video or deposition designations for the original witnesses. Norton Mot. 4 at 12–13. And as explained above, California has not explained the delay in disclosing these witnesses. California's late disclosure was therefore not substantially justified.
The Court is also not convinced that California's failure is harmless. Witnesses are not interchangeable even if they will testify on the same subject matter. California's failure to identify these individuals earlier in discovery as having discoverable information about California's positions deprived Norton of the opportunity to make informed decisions about whether and when to depose them.
However, "preclusion of evidence is an extreme sanction." Richardson , 905 F. Supp. 2d at 200. Therefore, California shall make every effort to have the original witnesses testify, despite retirement. If the original witnesses become unavailable, California can move to substitute those witnesses but, in that motion, must specify exactly why designating deposition testimony is inadequate. The Court will also consider live testimony by video.
4. Evidence Irrelevant to FCA Scienter Analysis
Norton moves to exclude evidence and argument that it contends are "irrelevant as a matter of law under Purcell ." Norton Mot. 5 at 2. Specifically, Norton seeks to exclude evidence or argument regarding (1) whether specific contract terms are ambiguous or whether Norton's interpretation of those terms was reasonable; (2) Norton's subjective interpretation of those contract terms, including intent, good faith, and the timing of Norton's interpretation; and (3) whether the Government warned Norton away from its interpretations. Id. at 2–3. As explained in the Court's opinion resolving Norton's motion for reconsideration, the Court does not agree with Norton about the irrelevance of evidence on the second issue, and therefore denies Norton's motion with respect to that issue. See Morsell , 560 F.Supp.3d at 43–46.
On the first issue, Norton argues that because the Court already held that certain contract terms "are ambiguous and that Symantec's interpretations of those provisions are reasonable," Plaintiffs should not be permitted to introduce evidence on those issues which would allow a jury to "second-guess the Court's legal holdings." Norton Mot. 5 at 7. The Court is not convinced that its previous rulings conclusively held, for all purposes, that the contract terms were ambiguous or that Norton's interpretations of them were reasonable such that all evidence on those issues is completely irrelevant. Therefore, the Court denies Norton's motion with respect to the first issue.
On the third issue, Norton argues that Plaintiffs have not proffered "the type of evidence" required to prove a legally relevant warning. Norton Mot. 5 at 6; see also id. at 10–11. Namely, "Plaintiffs may not introduce evidence of ‘informal guidance,’ such as oral remarks by agency personnel or informal letters, as evidence that the GSA ‘warned [Symantec] away’ from its reasonable interpretation of the contract." Id. at 10 (alteration in original) (quoting United States ex rel. Purcell v. MWI Corp. , 807 F.3d 281, 289–90 (D.C. Cir. 2015) ). Instead, Plaintiffs must have evidence of "authoritative guidance" from courts of appeals or a relevant agency, even if the disputed interpretation concerned a contractual term. Id. ; Norton Reply Nos. 1, 2, 4 & 5 at 21–22. Norton argues that Plaintiffs have proffered only the former, such as an email exchange between GSA and Relator when she worked for Norton, and it is consequently irrelevant. Norton Mot. 5 at 10.
The Government responds that this situation is different than those requiring guidance from courts of appeals or regulatory agencies because this case concerns contractual terms negotiated between GSA and Norton. U.S. Opp'n at 8–9. The Government contends that the authoritative guidance in this case would come from a GSA contracting officer. Id. at 9.
The Court is not so convinced of the irrelevance of the Government's evidence to justify exclusion on that ground given the low bar for Rule 401 relevance. "[A] motion in limine should not be used to resolve factual disputes or weigh evidence." C & E Servs., Inc. , 539 F. Supp. 2d at 323 (citation omitted). Norton's motion in limine number 5 is therefore denied.
5. Certain Holt Testimony
Norton moves to exclude testimony from Government expert Dr. Allison Holt regarding "her opinion that non-standard discounts should be determined on a line-by-line basis rather than a deal or order basis [and] introducing or offering any testimony about her Potential PRC Sales Chart (‘PRC Sales Chart’), which is based on that ... opinion." Norton Mot. 6 at 1. Norton provides two justifications: (1) Holt's "uncritical reliance on the directions provided by government counsel to treat each line item as a separate deal when determining the total discount amount, without conducting any independent analysis as to whether that was a sound methodology, renders her opinion unreliable" in violation of Federal Rule of Evidence 702, and (2) "Dr. Holt's PRC Sales Chart and related opinions are irrelevant and should be excluded because they will not be helpful to the jury, as the line item assumption is inconsistent with the facts of this case and Symantec's actual business practices." Id. at 1–2. Norton cites Campbell v. National Railroad Passenger Corp. , 311 F. Supp. 3d 281 (D.D.C. 2018), for the proposition that "expert opinions may be excluded for relying uncritically on inaccurate data or assumptions provided by counsel," such as when an expert " ‘blindly relied’ on counsel's summaries of depositions, without reviewing the testimony himself." Norton Mot. 6 at 9 (citing Campbell , 311 F. Supp. 3d at 301 ). In Norton's view, Holt similarly "blindly relied on" counsel's instruction to "conduct her analysis on a line-by-line basis." Id. Holt admits in her reply report that she "formulated no opinions as to whether it was more appropriate to conduct a line item or an order-level review under Symantec's GSA contract." Id. at 10 (quoting Holt Reply Rpt. at 10–11, ECF No. 219-3). Norton cites testimony of a Norton business analyst and a Norton pricing presentation that supposedly support Norton's view that "Symantec determined discounts on an order or deal basis, not based on individual line items," as well as the opinion of its expert witness, Tucker. Id. at 10; see also id. at 8–10.
The Government responds that it was proper for Holt to rely on Government counsel's instruction to assume "that a line-item review is proper." U.S. Opp'n at 17. The Government argues that the cases cited by Norton "merely stand for the proposition that if an expert's data is flawed[,] ... an expert's opinions may be deemed unreliable." Id. at 19. According to the Government, "Holt rightfully relied on the United States to provide her assumptions as to what the facts at trial will show." Id. at 20. Regarding the factual issue itself, the Government argues that "how Symantec internally viewed its discounting" is not the relevant question; instead, the question is what the contract requires. Id. The Government believes that "the pricing under the Contract depended on the category ... and type or SIN ... of the product being sold," which means "an order with many different products of many different types and categories cannot be evaluated on a whole. It must be evaluated on a line-item basis to apply the correct relationships based on combinations of product type and category." Id. at 20–21. The Government also disputes Norton's assertion "that its business operations evaluated discounts on an order-level, instead of a line-item, basis," citing, among other things, testimony showing that some Norton systems "calculated discounting and pricing on a line-item basis." Id. at 21.
The Court agrees with the Government, and this motion in limine is therefore denied. Holt may offer opinions that rely on the assumption that a line-item review is proper. Holt may not offer opinions that a line-item review is proper, but Holt has already disclaimed forming such an opinion. It would not make sense to require Holt to opine on the appropriateness of a line-item review when that question will depend on the interpretation of the contract and potentially disputed issues of fact. To the extent Norton would want Holt to opine on the general economic appropriateness of such a review, this is instead the proper subject for cross-examination and perhaps expert testimony proffered by Norton, assuming Norton can explain its relevance. Regarding the factual issue, Norton has not shown definitively that the appropriateness of a line-item review is wholly dependent on how Norton determined discounts, as opposed to depending on contract interpretation. See Norton Reply Nos. 6 & 7 at 8 (acknowledging that "liability and damages rest on factual findings and contractual interpretations , which include Symantec's business practices in recording sales transactions" (emphases added)). Norton therefore has not demonstrated the irrelevance of line-item calculations.
Campbell is not on point. In Campbell , the court found that the expert relied "on insufficient facts and data and therefore lacks the reliability required under Rule 702." 311 F. Supp. 3d at 299. Among other things, the expert "opine[d] about the human-resource management practices at Amtrak" even though "he testified that he did not review information critical to those opinions." Id. He also opined "on the selection process used by supervisors in hiring and promoting employees" without reading deposition testimony of any supervisors; he reviewed only counsel's summary of the testimony of certain supervisors without trying to "verify the accuracy of the representativeness" of the information in that document. Id. at 299–300. Critically, the court concluded that the expert "uncritically relied on documents supplied to him by plaintiffs’ counsel, cited to those pieces of evidence that supported his theories, and concluded that this selective evidence demonstrates that Amtrak's practices were inconsistent with generally-accepted human resource management practices. " Id. at 301 (emphasis added). Here, Holt has already disclaimed opining on the issue of whether a line-item review is proper, and therefore she cannot opine on the ultimate question of whether her calculations in fact show the amount of damages incurred. She may opine only conditionally, assuming the Government succeeds in proving the assumptions upon which her opinions rely. If the Government fails to prove the assumptions upon which Holt's testimony relies, the Government's damages claim may fail in whole or part.
In reply, Norton asks for Daubert hearings for Holt, Dr. David A. Gulley, and the States’ experts. Norton Reply Nos. 6 & 7 at 3. But the factual issues concerning the Government's assumptions will be best assessed after all of the evidence is presented and the parties have properly contextualized the applicable law to the facts in their respective Findings of Fact and Conclusions of Law. Of course, to the extent that the Government's damages theory is built upon a shaky house of cards and Norton successfully removes a card or two during vigorous cross-examination, the entire house of cards may collapse at trial.
6. All Gulley Testimony
Norton moves to fully exclude the testimony of Dr. David A. Gulley—one of the Government's damages experts—because his opinions "rely on improper and unjustified assumptions, are not reliably applied to the facts of this case, include improper legal opinions, and would be unhelpful to the trier of fact." Norton Mot. 7 at 1. Norton provides four categories of arguments against Gulley's testimony: (1) Gulley's opinions are based on speculative, unreliable, and irrelevant testimony and reports, (2) Gulley's opinions are based on an unsound evidentiary basis, (3) Gulley's opinions are based on an unsound methodology, and (4) Gulley provides legal conclusions. Id. at i.
a. Based on Speculative, Unreliable, and Irrelevant Testimony and Reports
Norton's first major argument—that Gulley's testimony is impermissible because it is based on speculative, unreliable, and irrelevant testimony and reports—contains three subsidiary arguments. First, Norton argues that Gulley's opinions are flawed because they rely on Holt's supposedly flawed PRC Sales Chart analysis. Id. at 16–17. The Court will not grant Norton's motion on this ground for the same reasons discussed above regarding Norton's motion to exclude the Holt testimony. Second, Norton argues that Gulley's opinions are flawed because they rely on Government expert Charles Harris's stricken opinions. Id. at 17. Norton explains that "the parties did not specifically address the admissibility of Dr. Gulley's testimony in their briefing" on the motion that excluded Harris's testimony, and "the Court's observations on this issue were simply dicta. " Id. at 17 n.13.
The Government responds that because Harris's testimony was excluded "on the grounds that its probative value was outweighed by its risk of unfair prejudice," Norton cannot now argue that Harris's testimony was so important that Gulley could not testify without relying on it. U.S. Opp'n at 27. The Government cites the Court's statements that excluding Harris's calculations will not seriously undermine the Government's ability to present its damages calculations, and that the Court would entertain a motion for reconsideration if the Government believed Harris's calculations were necessary to its case. Id. The Government says that it intends to offer evidence that the transactions Gulley considered were ones upon which damages could be sought, including Holt's testimony, "summary exhibits prepared by a GSA auditor, which tabulate purchases by Symantec's customers per year and will show that the identified commercial sales were not to strategic customers," and commercial sales data, including "lack of reasons or the ‘just because’ reasons Symantec documented to justify offering deep non-standard discounts to non-strategic customers." Id. at 27–28.
Norton raises concerns about the Government's proposed "summary exhibits prepared by a GSA auditor." Norton Reply Nos. 6 & 7 at 12–16. The Court's holding would be the same whether or not the Government included this in its list of intended evidence. There is not enough information in these briefs to know now if such exhibits would be admissible, but presumably the Government believes it has a basis to show their admissibility and this can be argued during trial.
The Court will not grant Norton's motion on this ground. Gulley appears to have relied on Harris only to determine which transactions Gulley should consider in his calculations, and the Government plans to prove that same information using different evidence. It is unnecessary for Gulley to update his report merely to clarify that the transactions he considered are now provided as an assumption by the Government—to be proved by the Government at trial—rather than provided by Harris. If the Government does fail to prove that the transactions considered by Gulley were the right ones to consider, the Government's claim may fail on its own for lack of proof.
Norton states in reply that "the government now announces that it will try to cure the absence of Harris’ opinion by asking Gulley, identified only as a damages expert, to testify as to liability." Norton Reply Nos. 6 & 7 at 12. Norton appears to be referring to statements made by the Government in its opposition brief regarding bifurcation. See id. at 15 (citing U.S.’ Opp'n Def.’s Mot. Bifurcate Trial at 7–8, ECF No. 230). Because the motion to which this opposition relates was withdrawn, see Stipulation Withdrawing Jury Demand & Dismissing Mot. Bifurcate, ECF No. 233, the Court will not consider this argument.
Third, Norton argues that Gulley's opinions are flawed because they rely on the Government's "bucket" methodology and Harris's stricken analysis of order line items. Norton Mot. 7 at 18–21. Norton argues that "Harris cherry-picked the order line items with the highest discounts in each bucket, and Dr. Gulley then used this distorted average," which "grossly inflat[ed] the average discount for all the items in each bucket." Id. at 18–19. Norton faults Gulley and Harris's uncritical reliance on the Government's bucketing methodology, and argues that the Government has not identified a witness who can testify to the methodology or who created the buckets. Id. at 19. Norton is concerned that the Government has avoided subjecting any witness to cross-examination on this bucketing methodology. Norton Reply Nos. 6 & 7 at 16. Norton also makes arguments under this heading that it has made elsewhere, including regarding failure to compare terms and conditions and the propriety of order versus line-item calculations. See Norton Mot. 7 at 20.
The Government responds that "the terms of the Contract dictated" using "a bucketing approach." U.S. Opp'n at 28. Regarding the supposed cherry-picking of high-discount sales, the Government "contends that any one sale to a commercial customer under $100,000 that disturbed the price/discount relationship would have triggered the PRC and Symantec's obligation to reduce GSA's prices," so averaging several line items from several orders was "a conservative assumption." Id. at 29.
Although this argument gives the Court concern, the Court will not grant Norton's motion on this ground. The parties have not sufficiently briefed whether the contract in fact dictates using a bucketing approach. See Norton Reply Nos. 6 & 7 at 16 (arguing for the first time, in one sentence and without citation, that the contract does not dictate a bucketing approach). Additionally, Norton did not respond to the Government's explanation that what Norton claims was cherry-picking sales was actually a conservative assumption. Norton's concerns regarding cross-examination are understandable but do not justify exclusion here. Counsel may not smuggle in testimony that should be expert testimony by providing assumptions to experts. But the only example of that here—assuming the Government is correct that bucketing is required by the contract—seems to be the method employed to average sales for a conservative assumption. At trial, the Court will gain a greater understanding of the methodology at issue and be able to determine whether the issue is simple enough that expert testimony is unnecessary. Norton's counsel may criticize this methodology in opening or closing statements, flesh out the implications of such methodology during vigorous cross-examination (as to whether it is indeed more, or less, conservative than other methods), and Norton experts may criticize it in their testimony, assuming their reports support such testimony. Norton's arguments regarding terms and conditions and order versus line-item calculations are addressed elsewhere in this opinion.
b. Based on Unsound Evidentiary Basis
Norton's second major argument—that Gulley's opinions do not have a sound evidentiary basis—also contains three subsidiary arguments. See Norton Mot. 7 at 22–24. First, Norton argues that Gulley incorrectly includes in his calculations sales of items whose "product stock keeping unit numbers (‘SKUs’) ... were not available on the GSA Schedule pricelists for Symantec's contract" because "[s]uch open market items purchased by GSA" are not covered by the contract and therefore "are not at issue in this litigation." Id. at 22. As support, Norton points out that "Holt excluded from her potential PRC analysis products that were not on the Symantec GSA Schedule pricelist." Id. at 22 n.19.
The Government does not dispute that sales for products not available on the GSA contract should be excluded but does dispute that Gulley's calculations included such open market items. U.S. Opp'n at 30–31. The Government argues that it is the product, not the assigned SKU, that governs whether a product is covered by the contract. Id. at 30. The Government also asserts that "there is no genuine dispute that all Symantec products were available on its GSA Contract," each sale in Gulley's analysis included codes used by Norton to identify its GSA sales, and each sale was identified in reports Norton "made when remitting fees collected by GSA (‘industrial funding fees’) on a percentage of contract sales." Id. at 30–31.
The Court will not grant Norton's motion on this ground. Norton marshals almost no response to the Government on this ground, merely arguing that Gulley's testimony is based on unreliable methodology because "the government bears the burden of proving which sales constitute sales under the GSA Schedule contract," and "Gulley's methodology fails to account for product SKUs sold to the government that are not included on Symantec's GSA Schedule contract." Norton Reply Nos. 6 & 7 at 17. Norton seems to be arguing only that Gulley's report does not itself contain proof that either the contract covers products as opposed to specific SKUs, or that the contract covers all Norton products. The lack of such proof in Gulley's report does not render his methodology unreliable; the Government will presumably attempt to present such proof at trial.
Norton's second argument regarding Gulley's supposedly unsound evidentiary basis is that Gulley "improperly calculated alleged damages from sales to the government made through resellers’ and distributors’ GSA Schedule contracts, rather than through Symantec's own GSA Schedule contract," including sales made after the expiration of Norton's contract. Norton Mot. 7 at 23. Norton asserts that Gulley has not provided "any factual basis to support his assumption that Symantec is liable for such sales," and that "[h]is failure to provide any basis for this illogical reading of the MAS Contracts is fatal to his damages opinion with respect to these transactions." Id. The Government responds that this theory was already rejected in the Court's summary judgment opinion, and that the pricing Norton offered in its GSA contract "guided the pricing on the resellers’ contracts." U.S. Opp'n at 31–32.
The Court will not grant Norton's motion on this ground. Norton seems to be arguing that if the Government cannot prove liability for certain transactions, then the Government's damages expert's calculations will necessarily have an unsound basis because they will be based on transactions for which Norton is not liable. This is true, but not relevant for deciding whether to exclude an expert opinion before the Government has had the opportunity to prove liability.
Norton's third argument regarding Gulley's supposedly unsound evidentiary basis is that Gulley "assumed that a 2% rebate was owed on the price of every GSA Schedule contract purchase, in addition to discounts negotiated on the GSA Schedule pricelists and the other discounts Dr. Gulley claims in damages," even though "there is no evidence in the record and no percipient witness who can testify regarding any plausible entitlement the GSA had to rebates, which Symantec provided to resellers and distributors, not end users such as GSA purchasing entities." Norton Mot. 7 at 23–24. Norton notes that two Norton 30(b)(6) witnesses testified that Norton "did not provide rebates to end users during this time." Id. at 24.
The Government appears to have not responded to this argument. The Court therefore grants Norton's motion to prohibit Gulley from presenting any calculation of such assumed 2% rebates. Norton Reply Nos. 6 & 7 at 18. c. Based on Unsound Methodology
Norton's third major argument—that Gulley's opinions are based on an unsound methodology, causing them to violate Rule 702(d) ’s requirement that an expert "reliably apply the principles and methods to the facts of the case"—contains two subsidiary arguments. Norton Mot. 7 at 24–34. First, Norton argues that Gulley's methodology is flawed because he did not "compare the terms and conditions of ‘commercial’ sales that the government claims triggered the PRC" even though "discounts would only [trigger the PRC] if they were provided on commercial sales that are comparable to corresponding government sales under the GSA contract." Id. at 25. Norton cites the GSAR, Norton's FPR, and a GSA 30(b)(6) witness in support of its contention. Id. at 25, 27. Norton asserts that the following must be analyzed to determine whether sales are comparable: "(i) product similarities and differences; (ii) terms and conditions of each sale; and (iii) the economic impact of differing terms and conditions on the transaction." Id. at 26.
The Government offers several arguments in response: (1) the FPR language cited by Norton does not affect the PRC; (2) in general, the PRC requires "an evaluation of any terms ... that directly affect price," not "that the terms of a commercial sale be comparable"; (3) the GSAR language cited by Norton does not support Norton's interpretation; (4) the Government "did evaluate the terms and conditions of potential deals that triggered the Third PRC Trigger and potentially affected prices" because "Holt evaluated terms and conditions of Symantec's commercial sales and excluded certain transactions based on assumptions provided to her by counsel" and excluded transactions for products not on Norton's GSA pricelist; (5) Norton's records show that there were no material differences in terms and conditions between Norton's GSA and commercial sales; and (6) Tucker's differing views on the matter do not render Gulley's views unreliable, and Tucker agreed the comparability issue depends on the contract. U.S. Opp'n at 32–35. Additionally, the Government argues that Gulley did not need to opine on this question because he was instructed to assume that the transactions identified by Holt were the ones to use for damages calculations. Id. at 35.
The Court will not grant Norton's motion on this ground. Like other issues addressed above, Norton's complaint is not with Gulley's methodology; it is with the Government's interpretation of the contract and their evidence, or lack thereof, demonstrating which transactions may have triggered the PRC. Those questions are not suited to a motion in limine criticizing an expert's methodology; they will be properly raised at trial.
Second, Norton argues that Gulley's methodology is flawed "because he relies on speculative extrapolations that are based on insufficient data." Norton Mot. 7 at 27; see id. at 27–34. Norton criticizes Gulley for inferring and assuming values related to sales for which he had incomplete data. Id. at 29. Norton argues that in calculating damages on Enterprise Flex ("EntFlex") transactions—a unique buying program in which high-volume customers make large up-front payments to receive certain flexibility—Gulley's method was unsound because he used data from non-EntFlex transactions to extrapolate data regarding EntFlex transactions that had incomplete data, yet these transactions were not comparable. Id. at 29–34. Because EntFlex sales have "built in discounts," Norton argues that Gulley "essentially appl[ied] two separate discounts to the same government product." Id. at 31. The Government responds that Gulley's methods were necessary because "Symantec's productions ultimately lacked data necessary to calculate damages on each of its GSA sales," and that "Gulley employed a widely accepted method" to estimate damages. U.S. Opp'n at 36. The Government notes that "Gulley opines that his methods of imputation provide reasonable estimates of damages in the small number of transactions where missing data precludes a mathematical calculation." Id. The Government also disputes Norton's assertion "that its Enterprise Flex program is so unique that using other, non-Enterprise Flex sales to project damages on missing-data Enterprise Flex sales is improper." Id. at 37. The Government notes that the calculation methods that Norton criticized, Banded MSRP method, ultimately will not form the basis for the Government's damages claim, which is based on the Base MSRP method. Id. at 39. Last, the Government explains that Holt excluded EntFlex transactions from her chart because Norton's method of recordkeeping "made it impossible to calculate" those discounts. Id. at 40.
The Court will not grant Norton's motion on this ground. The Court is not convinced that Norton has demonstrated that Gulley's extrapolations, imputations, interpolations, or the like are methodologically flawed such that their exclusion is justified. Norton's arguments regarding methodology largely depend on subsidiary issues of fact and expert opinion regarding proper methodology, such that they are best addressed via cross-examination of Gulley and testimony from Norton's experts.
d. Legal Conclusions
Norton's fourth major argument is that Gulley offers impermissible legal conclusions regarding liability. Norton Mot. 7 at 34–35. As an example, Gulley opines that "[t]he failure of Symantec to pass on commercial price discounts to government buyers was widespread." Id. at 35. The Government responds that Gulley's conclusion is merely "a factual observation based on [his] analyses." U.S. Opp'n at 40. The Court will not grant Norton's motion on this ground. Gulley's statements can be construed as summarizing the results of his calculations rather than opining on liability. Norton does not appear to have addressed this issue in reply. If Gulley does attempt to opine on liability or other legal conclusions, Norton can object at that time.
Norton moved to exclude another Gulley opinion for being an impermissible legal conclusion, but the Government withdrew that opinion "[t]o narrow the issues in dispute." U.S. Opp'n at 40 n.16.
7. All Baldwin, Nye, and Fliegler Testimony
Norton also moves to fully exclude the testimony of the States’ damages experts "due to their reliance on the impermissible opinions of Dr. Holt, Mr. Harris and Dr. Gulley," and for separate reasons. Norton Mot. 7 at 35–36. The first ground justifies excluding the States experts’ opinions only to the extent they rely upon opinions excluded above.
Norton's first separate ground concerns California's expert, Dr. Zachary Nye. Norton argues that "all of Dr. Nye's calculations are speculative because Dr. Nye does not know the actual prices California entities paid to resellers" and Nye "engage[s] in guesswork as to the actual prices paid." Norton Mot. 7 at 38–40. Norton cites Hill v. Republic of Iraq , 328 F.3d 680 (D.C. Cir. 2003), for the proposition that "damages cannot be awarded on the basis of ‘mere speculation or guesswork.’ " Id. at 684 (citing Hill , 328 F.3d at 684 ). Norton notes that Nye was instructed by counsel to use 10% as a markup. Norton Reply Nos. 6 & 7 at 23–24.
California responds that, "[b]ecause Dr. Nye did not have the actual prices paid by the agencies that included the reseller markup, Dr. Nye used a conservative estimate of the reseller markup, based on reports of Symantec reseller margins produced by Symantec." States’ Opp'n at 25. California also explains that, even if the Court did believe that Nye's estimate was improper, excluding Nye altogether would be inappropriate because he could instead provide opinions that do not use a reseller markup. Id. at 30–31.
The Court will not exclude Nye at this time. Norton's arguments largely go to the weight to be given to Nye's testimony, not the admissibility. Although, standing alone, it could have been problematic that the 10% markup value was provided by counsel, the transcript cited by Norton shows that Nye testified that it is his opinion that 10% is a reasonable estimate, and that he believed the documents he was provided by counsel to support the 10% number was a thorough set of documents. Nye Dep. Tr. 107–09, ECF No. 220-22. Additionally, California is correct that completely excluding Nye does not make sense when he could instead remove the reseller markup from his calculations. If an expert "will be testifying anyway, ... the efficiency gained or time saved by granting the motion in limine would be limited." Ramirez , 2019 WL 6036121, at *4. Last, Norton quotes the "mere speculation or guesswork" language from Hill but does not acknowledge other parts of the opinion qualifying that language. The opinion quotes a "seminal case" stating:
Where the tort itself is of such a nature as to preclude the ascertainment of the amount of damages with certainty, it would be a perversion of fundamental principles of justice to deny all relief to the injured person, and thereby relieve the wrongdoer from making any amend for his acts. In such case, while the damages may not be determined by mere speculation or guess, it will be enough if the evidence show the extent of damages as a matter of just and reasonable inference, although the result be only approximate.
328 F.3d at 684 (quoting Story Parchment Co. v. Paterson Parchment Paper Co. , 282 U.S. 555, 563, 51 S.Ct. 248, 75 L.Ed. 544 (1931) ). What is most problematic about Nye's estimate here, however, is that the data concerning the actual prices paid by the California agencies should be easily accessible to California. The lack of effort to obtain it is puzzling to the Court. But Norton has not demonstrated that Nye's calculations fall definitively on the side of mere speculation or guesswork to justify exclusion at this time. The Court will therefore not exclude Nye's testimony on this ground but is likely to view Nye's estimates that include the 10% markup with skepticism.
Norton's second separate ground concerns Relator's expert Seth Fliegler, on behalf of New York. Norton argues that Fliegler should be prevented from testifying because he "improperly included sales for which he did not accurately identify a ‘Best Pricing Offer’ trigger," referring to a provision of the New York contract. Norton Mot. 7 at 42. Norton claims that "[t]here is no evidence that Mr. Fliegler undertook any independent analysis of Symantec's discounting practices or made any effort to identify actual transactions that would have triggered the BPOC." Id. at 42–43. Instead, he assumed that certain sales to commercial entities of the same or similar product, a similar quantity, and during a defined time period with "discounts exceeding discounts offered under the NY Contract triggered the BPOC." Id. at 43. Norton argues that Fliegler's testimony would confuse a jury and is unreliable because he "never considered Symantec's actual discounting practices, never considered how to identify transactions that might actually trigger the BPOC and never asked how to identify special pricing promotions under the BPOC." Id. For example, Fliegler did not analyze the reason for discounts or whether they were "generally offered"—a term in the BPOC. See id. at 44.
Relator responds that "Fliegler did consider Symantec's actual discounting practices by analyzing thousands of Symantec's sales to commercial customers that received better discounts than New York." States’ Opp'n at 41. He also matched sales under the New York contract to other commercial sales. Id. Relator argues that "the BPOC is not limited to Symantec's commercial customers that received ‘special price promotions’ "; the BPOC also covers "special discount pricing to other customers." Id.
The Court will not grant Norton's motion on this ground. Norton seems to argue that Fliegler should have conducted his own analysis of whether the sales upon which he calculated damages were covered by the BPOC. But based on the parties’ briefs, the Court does not see a reliability problem with Fliegler following assumptions regarding which sales to include, assuming Relator eventually proves those assumptions through evidence.
Last, Norton argues that Fliegler offers an improper legal conclusion when he opines that "Symantec's failure to provide New York with proper pricing discounts as set forth in their agreement with Symantec resulted in damages to New York State in an amount equal to approximately $10.3 million." Norton Mot. 7 at 44 (emphasis removed) (quoting Fliegler Rpt. at 12, ECF No. 220-23). Relator responds that "Fliegler will not offer any opinions at trial concerning the meaning of the BPOC, Symantec's compliance with the BPOC, or Symantec's liability under the NY False Claims Act." States’ Opp'n at 42. Relator emphasizes that the quoted text was a heading followed by text clarifying that Fliegler appreciated that his report is premised on Relator's allegations of liability. Id. It appears that Fliegler has no plan to opine on liability. But for the sake of clarity, the Court holds that Fliegler may not opine on whether Norton failed to provide New York proper pricing discounts as required by their agreement.
V. CONCLUSION
For the foregoing reasons, the Government's motion (ECF No. 210) is GRANTED IN PART AND DENIED IN PART . The Government's motion is granted to the following extent: (1) Norton may not introduce the deposition designations of its own employees or former employees except upon further motion as explained herein; (2) Tucker may not offer opinions regarding whether sales for products having SKUs not found on the relevant contract's pricelist should be included for damages; (3) Tucker may not offer opinions regarding which sales are appropriate to consider in damages calculations based on their terms and conditions; (4) Tucker may not opine on whether order-level discount calculations are required in this case; (5) Tucker may not opine that Norton did not consider individual line items to be deals; and (6) Tucker may not offer opinions criticizing Gulley merely for assuming liability for damages relating to the resellers’ and distributors’ sales. Norton's motions (ECF Nos. 212, 213, 214, 215, 216, 219, 220) are also GRANTED IN PART AND DENIED IN PART . Norton's motions are granted to the following extent: (1) Nash may not offer his "first opinion," as it is characterized in the briefs; (2) Nash may not opine on the meaning of the contract terms at issue in this case; (3) California may not present testimony from the four late-disclosed individuals except upon further motion as explained herein; (4) Gulley may not present calculations of the assumed 2% rebates discussed above; (5) the States’ damages experts may not offer opinions to the extent they rely upon excluded opinions of other experts; and (6) Fliegler may not opine on whether Norton failed to provide New York proper pricing discounts as required by their agreement. Norton's motion to bifurcate the trial (ECF No. 217) is DENIED AS MOOT . An order consistent with this Memorandum Opinion is separately and contemporaneously issued.