Thomas ATENCIO, et al. v. TUNECORE, INC Case No. CV 16-1925-DMG (MRWx) United States District Court, C.D. California Filed November 13, 2018 Counsel Jason A. Archinaco, The Archinaco Firm LLC, Los Angeles, CA, Michael A. O’Leary, Pro Hac Vice, The Archinaco Firm LLC, Pittsburgh, PA, for Thomas Atencio, et al. Eric Jordan Amdursky, OMelveny and Myers LLP, Menlo Park, CA, Kelly S. Wood, Ryan W. Rutledge, OMelveny and Myers LLP, Newport Beach, CA, Jessica J. Mead, Ryan Joseph Kohler, Erica B. Row, Collins Collins Muir and Stewart LLP, South Pasadena, CA, for TuneCore, Inc. Gee, Dolly M., United States Magistrate Judge ORDER RE PARTIES’ MOTIONS IN LIMINE AND PLAINTIFFS’ MOTION FOR RECONSIDERATION [99, 103, 105–106, 108, 110–112, 121] *1 The parties have filed their respective motions in limine (“MILs”) and oppositions thereto. [Doc. ## 99 (Plaintiffs’ MIL), 121 (Plaintiffs’ Motion for Reconsideration), 103, 105–106, 108, 110–112 (Defendant’s MILs), 124, 143 (Defendants’ Oppositions), 138–142, 144–145 (Plaintiffs’ Oppositions) ]. The Court has duly considered the moving papers and supporting documentation and now renders the following rulings. I. DISCUSSION A. Plaintiffs’ Motion for Reconsideration [Doc. # 121] On October 17, 2018, Plaintiffs moved the Court to reconsider its decision to grant summary judgment in favor of Defendant on Plaintiffs’ fraud claims. [Doc. # 121-1 (“Motion”).] Reconsideration under Federal Rule of Civil Procedure 59 “is appropriate if the district court (1) is presented with newly discovered evidence, (2) committed clear error or the initial decision was manifestly unjust, or (3) if there is an intervening change in controlling law.” Sch. Dist. No. 1J, Multnomah Cty., Or. v. ACandS, Inc., 5 F.3d 1255, 1263 (9th Cir. 1993). Plaintiffs’ Motion requests reconsideration only on the basis of “newly discovered evidence.” They argue that two new emails between Jeffrey Price and Gil Cogan from 2008, which they claim Defendant improperly failed to produce to Plaintiffs, show that Cogan “intended to take or adversely [sic] the options of all the option holders such that the option holders would feel misled as early as 2008 when [Cogan] first invested.” Motion at 5. In the “key” email, sent from Price to Cogan on July 19, 2008, Price states that “[i]f we change those terms on them, there is a possibility they will feel misled. At no point did I tell them that these terms or options grant would change. I always sincerely believed, as did they, that these terms, and their commitment in return for them, were the ‘agreement.’ ”[1] Archinaco Decl., Ex. 110. The Court DENIES Plaintiffs’ Motion because Plaintiffs could have obtained these emails before summary judgment, the emails constitute inadmissible hearsay, and even if the Court had known of these emails before granting summary judgment on Plaintiffs’ fraud claims, the outcome would have been the same. 1. Newly-Discovered Evidence For a plaintiff requesting reconsideration based on newly discovered evidence, the plaintiff must “show that the evidence was discovered after the judgment, that the evidence could not be discovered earlier through due diligence, and that the newly discovered evidence is of such a magnitude that had the court known of it earlier, the outcome would likely have been different.” Dixon v. Wallowa Cty., 336 F.3d 1013, 1022 (9th Cir. 2003); Far Out Prods., Inc. v. Oskar, 247 F.3d 986, 992–93 (9th Cir. 2001). Evidence cannot be “newly discovered” if it was “in the moving party’s possession” before the judgment “or could have been discovered with reasonable diligence.” Coastal Transfer Co. v. Toyota Motor Sales, U.S.A., 833 F.2d 208, 212 (9th Cir. 1987). *2 At oral argument, Plaintiffs made the following representations that were not made clear in their written submissions: i.e., Defendants requested documents from Price in connection with his deposition, and Price either (1) produced some documents, but did not produce the email at issue here, or (2) did not produce any documents at all. Plaintiffs assert that, to the extent that Price did produce documents, Plaintiffs relied on that production as Price’s full production of responsive documents, which Plaintiffs claim should have encompassed the newly discovered email. Plaintiffs also claim that they asked Price for documents on a separate occasion, but Price stated that he was unable to produce documents because of restrictions related to another litigation. As a result of these events, Plaintiffs maintain that they were unable to discover the email, despite acting diligently, until Price decided to offer the email during an October 11, 2018 conversation (well after the Court’s Summary Judgment Order). The Court accepts Plaintiffs’ representations of these events, despite Defendant’s position that Plaintiffs should have been able to obtain the emails from Price before summary judgment because he is a friendly witness for Plaintiffs. Even assuming Plaintiffs’ diligence, however, they have not done enough to establish that the Court must reconsider its Summary Judgment Order because, as discussed below, the emails are inadmissible hearsay and do not establish the necessary elements of Plaintiffs’ fraud claims. 2. The Emails Would Not Have Changed the Summary Judgment Outcome i. The Emails are Inadmissible Hearsay Assuming Plaintiffs exercised reasonable diligence in attempting to obtain relevant documents from Price, the Court could not have considered the emails at summary judgment because they are inadmissible hearsay under Federal Rules of Evidence (“FRE”) 801 and 802. The same is true for Plaintiffs’ counsel’s declaration regarding the emails’ contents. Plaintiffs attempt to use Price’s email to show Price’s understanding of Cogan’s previous email. This is double hearsay. The first layer is Price’s statements in his email, and the second layer is Cogan’s previous statement that Price’s email interprets. First, Price’s statements in the email are out-of-court statements which Plaintiffs offer to prove the truth of the assertion—that Price believed Atencio and Caterine would “feel misled” if Price and Cogan “changed the terms on them.” This is textbook hearsay. Similarly, the second layer, Price’s interpretation of Cogan’s statements to Price is also an out-of-court statement offered to prove that Cogan considered “changing the terms” of Plaintiffs’ agreements. Rules 801 and 802 exclude that statement as well. Although Plaintiffs do not invoke any hearsay exemptions or exceptions in their Motion, the Court notes that Cogan’s statements are not an admission of a party opponent under FRE 801(d)(2)(A) or (C). Those rules make admissible an opposing party’s statement that was “made by the party in an individual or representative capacity” or was “made by a person whom the party authorized to make a statement on the subject.” At the time of Cogan and Price’s conversation, Cogan was still only a potential TuneCore investor and did not yet hold a seat on TuneCore’s Board of Directors. He was neither a TuneCore representative nor authorized to make statements on TuneCore’s behalf. See Cogan Decl. at ¶¶ 4, 7, 8. Both statements are therefore inadmissible. Plaintiffs’ counsel’s statements in his declaration that (1) “Price advised [him] that Cogan had not been truthful in his deposition,” (2) “Price advised [him] he had documentary evidence that established Mr. Cogan had intended on altering the terms of the options agreements,” and (3) “Price advised ... that TuneCore possessed [the emails] because they had been produced in his litigation with TuneCore” are also all hearsay. In each case, Plaintiff’s counsel is relaying an out-of-court statement Price made to him in an effort to establish the truth of Price’s statements. 3. The Emails Do Not Establish Cogan’s or TuneCore’s Fraudulent Intent Finally, assuming Plaintiffs exercised reasonable diligence, and even if Plaintiffs could cure the hearsay problem, the emails do not create a genuine dispute of material fact as to Cogan’s or TuneCore’s intent to defraud Plaintiffs in 2013 or 2015. See Dixon, 336 F.3d at 1022(requiring newly discovered evidence forming the basis for a motion for reconsideration to be of “such a magnitude that had the court known of it earlier, the outcome would likely have been different”). Assuming the emails’ truth arguendo, Cogan’s 2008 discussion with Price about changing the terms of Plaintiffs’ stock option agreements does not establish Cogan’s intent to defraud Plaintiffs. And it certainly does not show that he maintained that intent for five years until he emailed Plaintiffs about their stock options’ expiration dates in 2013, or that Defendant carried out Cogan’s fraudulent intent in 2015 when it sent Plaintiffs the letters of transmittal. *3 The Court granted summary judgment on Plaintiffs’ fraud claims not only because of a lack of fraudulent intent, but also because Caterine could not have justifiably relied on Cogan’s email and because Plaintiffs failed to show that the transmittal letter amounted to a fraudulent misrepresentation. Plaintiffs make no effort to explain how these emails cure those defects in their claims. 4. An Adverse Inference Sanction is Unwarranted Finally, Plaintiffs request that the Court sanction Defendant for not producing the emails by instructing the jury to adopt an adverse inference against Defendant. Plaintiffs do not cite any authority under which such a sanction would be proper. To the extent Defendant’s failure to produce the emails was a result of the loss or deletion of electronically stored information, Plaintiffs have not shown that Defendants were under any sort of duty to preserve emails from eight years before the litigation began. See Ryan v. Editions Ltd. W., Inc., 786 F.3d 754, 766 (9th Cir. 2015) (party seeking sanctions had “burden of establishing spoliation by demonstrating that [other party] destroyed documents and had some notice that the documents were potentially relevant to the litigation before they were destroyed.”) (internal quotations omitted). Nor have Plaintiffs shown that Defendant failed to produce this email in violation of a court order. See United States v. Sumitomo Marine & Fire Ins. Co., 617 F.2d 1365, 1369 (9th Cir. 1980) (“Rule 37(b) of the Federal Rules of Civil Procedure provides a wide range of sanctions for a party’s failure to comply with court discovery orders.”). Instead, it appears that Plaintiffs’ position is that the Court should sanction Defendant merely because it did not produce documents that Plaintiffs believe were responsive to its discovery requests—without providing the Court with any evidence that Defendant intentionally withheld the emails. Furthermore, an adverse inference sanction is inappropriate because Plaintiffs ultimately suffered no prejudice from Defendant’s nondisclosure. Ryan, 786 F.3d at 766 (decision to award sanctions is discretionary); Sumitomo Marine & Fire Ins. Co., 617 F.2d at 1369(same). Plaintiffs have the emails now, and any delay they suffered is at least equally the result of their own failure to obtain relevant materials from Price in a timely manner. Plaintiffs’ Motion for Reconsideration and request for an adverse inference jury instruction are DENIED. If Mr. Cogan testifies as a witness, however, Plaintiffs may use the newly discovered email to cross-examine him. B. Plaintiffs’ MIL [Doc. # 99] Plaintiffs seek further adverse inference jury instructions pertaining to Defendant’s alleged spoliation of two pieces of evidence: (1) a second email;[2] and (2) minutes from a 2012 TuneCore board meeting. Pls.’ MIL at 3. Defendant argues that Plaintiffs are unable to establish the elements necessary to require adverse inference instructions. Opp. to Pls.’ MIL at 13. *4 Without pausing to analyze whether spoliation sanctions are appropriate, Plaintiffs dive straight into a discussion of what type ofspoliation sanction the Court should impose. Pls.’ MIL at 3. But the Court need not choose a particular sanction, because no adverse inference sanctions are appropriate. Although the Ninth Circuit approves of the use of adverse inference instructions as a sanction for spoliation of evidence, it has not expressly set forth a test for determining when they are appropriate. See Apple Inc. v. Samsung Elecs. Co., 888 F. Supp. 2d 976, 989 (N.D. Cal. 2012); see also Akiona v. United States, 938 F.2d 158, 161 (9th Cir. 1991). In light of that, federal courts in California consistently apply the Second Circuit’s three-part test. See, e.g., Apple, 888 F. Supp. 2d at 989–90; UMG Recordings, Inc. v. Hummer Winblad Venture Partners (In re Napster, Inc. Copyright Litig.), 462 F. Supp. 2d 1060, 1078 (N.D. Cal. 2006). The party seeking an adverse inference instruction due to the spoliation of evidence must establish: “(1) the party having control over the evidence had an obligation to preserve it at the time it was destroyed; (2) the records were destroyed with a culpable state of mind; and (3) the evidence was relevant to the party’s claim or defense such that a reasonable trier of fact could find that it would support that claim or defense.” Apple Inc., 888 F. Supp. 2d at 989–90 (citing standard from Residential Funding Corp. v. DeGeorge Fin. Corp., 306 F.3d 99, 107 (2d Cir. 2002) ) (internal quotations omitted). Regarding Defendant’s control over the evidence and obligation to preserve it, “a litigant is under a duty to preserve evidence which it knows or reasonably should know is relevant to the action” once a potential claim is identified. In re Napster, 462 F. Supp. 2d at 1067. Here, Plaintiffs merely state that “TuneCore has asserted as early as 2012 (when Mr. Sieben was involved) that litigation with Mr. Caterine was potentially foreseeable, including by causing him to enter into an arbitration agreement.” Pls.’ MIL at 4. Plaintiffs do not explain, however, what Mr. Sieben’s “involvement” entailed, what exactly he was “involved” in, or why that involvement matters here. Nor do they cite to any particular arbitration agreement. Plaintiffs do not elaborate on how either Sieben’s “involvement” or Caterine’s entry into an arbitration agreement put Defendant on notice of a potential claim or created a duty for Defendant to preserve documents in anticipation of litigation. Indeed, Plaintiffs can cite no authority for the proposition that requiring an employee or consultant to sign an arbitration provision is evidence that an employer anticipates litigation. Plaintiffs also fail to establish that anyone at TuneCore destroyed the emails or the 2012 board meeting minutes “with a culpable mind.”[3]Plaintiffs state simply that the documents “are believed to be destroyed.” Pls.’ MIL at 4. Plaintiffs have not come close to showing that an adverse inference is warranted. Thus, the Court DENIES Plaintiffs’ MIL. C. Defendant’s MIL No. 2 [Doc. # 103] *5 Defendant moves to exclude evidence of the services Caterine provided as Chief Financial Officer (“CFO”) in support of his quantum meruit claim because Caterine’s claims are allegedly time-barred. Def.’s MIL No. 2 at 3-4. Defendant argues that the “statute of limitations begins to accrue upon termination of services because that is usually when payment is normally expected.” Id. at 4 (citing Maglica v. Maglica, 66 Cal. App. 4th 442, 452-54 (1998). In its Summary Judgment Order, however, the Court addressed a substantially similar, if not identical, argument and determined that there remains an open question as to whether the services for which Caterine’s stock option agreements were intended as compensation terminated upon his resignation as CFO. [Doc. # 96 at 22.] If these services continued up to the merger, the statute of limitations on his quantum meruit claim did not run. The parties may not relitigate the summary judgment motion using motions in limine. [Doc. # 70 (“Scheduling and Case Management Order”) at 7 (“[m]otions in limine should not be disguised as motions for summary adjudication of issues”) ]. Defendant’s MIL No. 2 is DENIED. D. Defendants’ MIL No. 9 [Doc. # 110] Defendant moves to exclude evidence and argument pertaining to TuneCore’s capitalization tables because Defendant claims the capitalization tables are irrelevant and that admitting them would violate the parol evidence rule. Defendant makes a two-part relevance argument. First, Defendant argues that because Plaintiffs’ “options expired years prior to Believe’s April 2015 purchase of TuneCore” the Court should not admit evidence regarding the capitalization tables. Def.’s MIL No. 9 at 3-4. This boils down to another attempt to relitigate issues decided at the summary judgment stage. The Court explicitly concluded that whether Plaintiffs’ options expired before they attempted to redeem them in connection with the Believe merger is an open factual question to be resolved at trial. [Doc. # 96 at 16, 19.] Second, Defendant argues that the capitalization tables are irrelevant because “they did not govern any of Defendant’s stock option agreements; they were an internal ledger.” Id. at 4. This argument strikes the Court as peculiar because the parties agree that the capitalization table did not “govern” the stock agreements. [Doc. # 139 at 16.] Regardless, as Plaintiffs point out, evidence concerning Defendant’s internal stock ownership ledger is relevant to the question of Plaintiffs’ alleged continued association with Defendant. For example, if Defendant continued to list Plaintiffs in its capitalization table as securities owners in the company up to or near the time of the merger, it is more probable that Defendant understood Plaintiffs’ association with the company to have continued to at least that point. Defendant’s understanding of Plaintiffs’ continued association (or lack thereof), in turn, is relevant circumstantial evidence of whether Plaintiffs continued to associate with TuneCore. The Court also concludes the capitalization table does not pose enough danger of confusing or misleading the jury to substantially outweigh its probative value as circumstantial evidence of Plaintiffs’ continued association with TuneCore. The table does not present an overly complicated concept and will not require an abnormal amount of effort to authenticate and explain. The Court therefore declines to exclude the table under Rule 403. Defendant’s parol evidence argument is meritless. Defendant argues that the capitalization table is inadmissible parol evidence because it “varies” the terms of the agreements insofar as it suggests that Plaintiffs continued associating with Defendant when, in fact, they may have ceased their association. But that is not the parol evidence rule’s purpose. New York’s parol evidence rule provides that “[w]hen two parties have made a contract and have expressed it in a writing ... evidence, whether parol or otherwise, of antecedent understandings and negotiations will not be admitted for the purpose of varying or contradicting the writing.” Garza v. Marine Transp. Lines, Inc., 861 F.2d 23, 26 (2d Cir. 1988).[4] *6 First, the Court fails to see how the capitalization table, merely a list of stock and securities ownership, could “vary” or “contradict” the terms of the stock option agreements. While Plaintiffs’ continued presence on the capitalization table may be at odds with Defendant’s perspective of the case—i.e., that Plaintiffs’ options expired well before the Believe merger because they ceased associating with Defendant in 2011 and 2012—that does not mean that the table varies or contradicts the terms of the agreements themselves. Second, the parol evidence rule only excludes extrinsic prior or contemporaneous evidence. See Aratari v. Chrysler Corp., 35 A.D.2d 1077, 1077 (N.Y. App. Div. 1970) (“[T]he parol evidence rule operates to exclude evidence of prior or contemporaneous agreements when offered to contradict, vary or subtract from the terms of the writing.”) (emphasis added). As a matter of common sense, a stock ownership ledger that includes Plaintiffs’ stock options could not have existed before or at the same time as the agreements that created their ownership. And finally, even if the capitalization table implicates the parol evidence rule in some way, the rule likely cuts in Plaintiffs’ favor since “parol evidence may be admitted to explain a writing when its terms are ambiguous.” Care Travel Co. v. Pan Am. World Airways, Inc., 944 F.2d 983, 988 (2d Cir. 1991). As discussed in the Court’s summary judgment order, the meaning of “associate” and “association” in Plaintiffs’ stock option agreements is highly ambiguous. [Doc. # 96 at 12-13.] Therefore, Plaintiffs’ presence in or absence from the capitalization tables (to the extent it constitutes parol evidence at all) may shed light on the proper interpretation of “association” because a reasonable jury might find that it shows how long Defendant acknowledged Plaintiffs’ stock option ownership due to their continued association. Defendant’s MIL No. 9 is DENIED. E. Defendant’s MIL No. 4 [Doc. # 105] With MIL No. 4, Defendant seeks to accomplish three things: (1) exclude evidence and argument about Plaintiffs’ theory that Defendant’s counsel, in particular lawyers and staff from the O’Melveny & Myers law firm, conspired against Plaintiffs and are the “architect[s] of” and “reason” for this lawsuit; (2) preemptively oppose a motion to disqualify some or all of Defendant’s counsel that Plaintiff has not filed; and (3) exclude references to the size, makeup, and reputations of Defendant’s counsel’s firms. Defendant first moves to prevent Plaintiff from introducing evidence of a purported conspiracy between Gil Cogan, Opus Capital, and O’Melveny & Myers lawyers Eric Amdursky and Paul Sieben to “zero out” Plaintiffs’ stock options to benefit Cogan and Opus. Def.’s MIL No. 4 at 4; Opp. to Def.’s MILs Nos. 4 and 9 at 16. Even though Plaintiff devotes around 17 prolix and meandering pages of its 20-page Opposition to recounting the facts giving rise to the “conspiracy,” the scope and timeline of this alleged scheme continues to puzzle the Court. The Court’s best guess at Plaintiffs’ theory is that they believe Cogan and O’Melveny convinced Opus (whom Cogan represented) and Defendant to sign a conflict waiver allowing O’Melveny to represent both companies. Once O’Melveny became counsel for both Opus and Defendant, O’Melveny gained access to Defendant’s capitalization table and intentionally altered or manipulated the table (or at least attempted to intentionally do so) so that Opus or Cogan would unfairly receive the value of Plaintiffs’ stock options. Plaintiff claims O’Melveny did this because it sought to benefit Opus, a long-term O’Melveny client. Plaintiffs’ Opposition makes clear that they intend to call Amdursky, Sieben, and O’Melveny paralegal Suzette Clay to testify as witnesses to these events. *7 First, to the extent that Plaintiffs intend to elicit testimony painting Defense counsel as ultimately responsible for Plaintiffs’ alleged injuries, such evidence must be excluded under FRE 403 as irrelevant, confusing, and a waste of time. Defense counsel are not parties to this action and therefore any evidence aimed at proving their unlawful or unethical behavior is beyond the scope of this suit, absent evidence that their clients specifically authorized their actions with the intent to harm Plaintiffs.[5] Furthermore, although Plaintiffs’ theory is ill-defined and ill-communicated, it strikes the Court as remarkably similar to the fraud causes of action against Defendant that the Court resolved at summary judgment, only this time with Defendant’s lawyers playing the role of fraudsters. The Court will not permit Plaintiffs to resuscitate their dismissed fraud allegations by simply switching the named Defendant out for its non-party lawyers. Similarly, Plaintiffs may not use trial as a way to conduct factual discovery into Defense counsel’s actions. Even assuming Plaintiffs do not intend to use trial as an occasion to conduct a fishing expedition, evidence pertaining to the “conspiracy” as Plaintiffs have described it is almost certain to confuse or mislead the jury, delay proceedings, and otherwise unfairly prejudice Defendant. Discussion of the “conspiracy” would inject legal issues regarding attorney-client privilege, attorney conflicts of interest, and attorneys’ ability to testify at trial, as well as a slew of new facts and competing testimony, into a case that now involves only breach of contract and quantum meruit claims, and no claims in which Defendant’s state of mind is at issue. The Court therefore excludes arguments of a conspiracy between Defendant and its counsel under Rule 403. The lack of clarity surrounding Plaintiffs’ exact intentions at this stage prevent the Court from completely barring Amdursky, Sieben, and Clay from testifying during trial about any percipient non-privileged facts. But Plaintiffs may not call them to elicit testimony that would be subject to attorney-client privilege or attorney work product objections (e.g., the O’Melveny conflicts waiver, O’Melveny’s purported manipulation of the capitalization table). Defendant’s MIL is GRANTED as to Plaintiffs’ lawyer conspiracy claims. Regarding the second argument—Defendant’s opposition to a non-existent motion to disqualify—the Court declines to rule on an issue that is not before it. Plaintiffs’ counsel may have threatened to file such a motion during meet and confer correspondence, but unless he actually does so, the Court need not consider the issue. Defendant’s MIL is DENIED as to the disqualification arguments. Finally, Defendant seeks to exclude evidence or argument pertaining to the demographics and reputation of the O’Melveny & Myers and Collins Collins Muir + Stewart law firms. Plaintiffs state in their Opposition to Defendant’s MIL Nos. 4 and 9 that they do not intend to introduce such evidence at trial. Opp. to Def.’s MILs No. 4 and 9 at 22 n. 10. Plaintiffs repeated that representation at oral argument. Based on Plaintiffs’ representations, Defendant’s MIL No. 4 is DENIED without prejudice as moot as to evidence regarding the size and reputation of Defendant’s counsel’s law firms. F. Defendants’ MIL No. 5 [Doc. # 106] Defendant’s MILs Nos. 5, 7, and 10 are interrelated and, to a large extent, overlapping. They each pertain to Plaintiffs’ anticipated effort to introduce evidence that their recovery should far exceed the stock option agreements’ combined value of $245,920.04, the value that Plaintiffs ascribed to them in the SAC. Defendant’s MIL No. 5 seeks to exclude evidence of damages “beyond the value of the stock options.” Def.’s MIL No. 5 at 7. To the extent Defendant moves to prevent Plaintiffs from arguing for a breach of contract recovery exceeding Plaintiffs’ stock options’ value, the motion is GRANTED. But, as discussed in connection with Def.’s MIL No. 7, below, Plaintiffs may introduce evidence of the reasonable value of Plaintiffs’ services, even if that evidence demonstrates a reasonable value exceeding the stock options’ value, because it is probative of whether Plaintiffs would have allowed stock options to expire without exercising them. In that respect, their motion is DENIED. G. Defendant’s MIL No. 7 [Doc. # 108] *8 Defendant seeks to preclude Atencio from introducing any evidence or argument about how his employers typically compensate him for his work. Defendant argues that evidence of his past compensation or his entitlement to a percentage of Defendant’s total sale price is irrelevant, misleading, and unduly prejudicial because there is uncontroverted evidence that Atencio agreed to the stock options as compensation for his services and the Court previously capped Atencio’s recovery at the value of his stock options. Quantum meruit recovery is based on the reasonable value of the plaintiff’s services. In re De Laurentiis Entm’t Grp. Inc., 963 F.2d 1269, 1272 (9th Cir. 1992). “The burden is on the person making the quantum meruit claim to show the value of his or her services.” Miller v. Campbell, Warburton, Fitzsimmons, Smith, Mendel & Pastore, 162 Cal. App. 4th 1331, 1344 (2008) (citing Hocker v. Glover, 113 Cal. App. 152, 157 (1931) ). The Court concludes Atencio may demonstrate his reasonable value by introducing evidence of past or typical compensation. See Valentine v. Read, 50 Cal. App. 4th 787, 795 (1996) (affirming the trial judge’s decision to deny defendant’s motion in limine and allow evidence of plaintiff’s prior experience and compensation as it pertained to the evaluation of plaintiff’s services). Atencio’s work history, including how other companies compensated him, is relevant to and probative of his services’ reasonable value because it clearly demonstrates how other companies in the open market valued his services. It also would be probative of Plaintiffs’ assertion that they would not have agreed to a stock option agreement that could expire without providing them with any compensation. This evidence carries no risk of unfair prejudice in light of the Court’s decision to cap quantum meruit recovery at the value of the stock option agreements. If the jury values Atencio’s services’ reasonable value higher than the stock option agreements’ value, the Court will reduce the award accordingly. This approach would also permit the Court to make an appropriate adjustment without a retrial if, for example, Plaintiffs prevail on appeal as to whether the quantum meruit recovery should have been capped. Thus, the Court DENIES Defendant’s MIL No. 7. H. Defendants’ MIL No. 10 [Doc. # 111] Defendant’s MIL No. 10 seeks to prevent Plaintiffs from introducing evidence showing that, even though Believe Media purchased TuneCore at a set price, TuneCore was in fact worth far more than what Believe paid, meaning that Plaintiffs’ options are worth far more than the $245,920.04 alleged in the SAC. The Court GRANTS Defendant’s motion for two reasons. First, evidence regarding TuneCore’s actual valuation is the type of technical or specialized knowledge that falls outside the scope of permissible lay testimony under FRE 701. Second, Plaintiffs have judicially admitted the value of their breach of contract claims by specifically alleging their contract damages in the SAC. 1. Plaintiffs’ Alternate Valuation is Based on Speculative Layperson Testimony Although Plaintiffs’ Opposition did not make clear exactly what evidence they intend to put forth to establish TuneCore’s value, it appears they intend to show it is worth upwards of $1 billion by comparing TuneCore to other companies. See Opp. to Def.’s MIL No. 10 at 7 (speculating as to a $7 billion dollar valuation by comparing TuneCore to Spotify and a valuation of “higher than” $3.5 billion by comparing TuneCore to Beats by Dre). These valuation arguments rely exclusively on declarations from Caterine and Atencio, but it does not appear that Plaintiffs intend to qualify themselves as business valuation experts.[6] Even if they do, Atencio provides no evidence regarding his qualifications to testify about TuneCore’s actual value. See Parlour Enterprises, Inc. v. Kirin Grp., Inc., 152 Cal. App. 4th 281, 289 (2007)(When determining whether damages are speculative, courts inquire as to whether the person testifying to the amount “testified to any particular qualifications that would allow [him] to predict income, expenses, or profits” of the particular business at issue). Caterine did state that he is “intimately familiar with start-ups, their finances and valuations” [Doc. 140-2 at ¶ 8], but establishing TuneCore’s value does not appear to fall within the scope of his expected trial testimony. [Doc. # 98 (“Plaintiffs’ Witness List”) at 2.] Plaintiffs make no mention of any intention to qualify another person as an expert to establish TuneCore’s value at the time of the merger. *9 Moreover, testimony regarding complicated financial valuations does not fall within the realm of acceptable layperson testimony under FRE 701. United States v. Preston, 873 F.3d 829, 836 (9th Cir. 2017) (“while expert witnesses may testify in the form of opinion as to general matters based on specialized knowledge, Fed. R. Evid. 702, lay witnesses may not.”); James River Ins. Co. v. Rapid Funding, LLC, 658 F.3d 1207, 1214 (10th Cir. 2011) (“testimony based on technical or specialized knowledge [was] inadmissible under Rule 701(c)”); see also United States v. Lloyd, 807 F.3d 1128, 1153 (9th Cir. 2015) (“The admissibility of lay opinion testimony under Rule 701 is committed to the sound discretion of the trial judge”). Rule 701 “allows lay witnesses to offer “observations [that] are common enough and require ... a limited amount of expertise, if any.” James River Ins. Co., 658 F.3d at 1214 (quoting United States v. VonWillie, 59 F.3d 922, 929 (9th Cir. 1995) ).[7] The Court concludes that providing an accurate and reliable alternative valuation of TuneCore would require technical or specialized knowledge. Plaintiffs’ alternative valuation evidence, without a qualified witness to properly introduce it, is so abstract and speculative that it poses a danger of misleading the jury and prejudicing Defendant. Lueter v. State of California, 94 Cal. App. 4th 1285, 1302 (2002) (“damages which are speculative, remote, imaginary, contingent, or merely possible cannot serve as a legal basis for recovery”). 2. The SAC is a Judicial Admission Defendant also argues that because Plaintiffs alleged in their SAC that “Plaintiffs were entitled to the following compensation for their options: ... Atencio total recoverable damages = $49,103.36 ... Caterine total recoverable damages = $196,816.68 ... Combined total of Plaintiffs’ damages = $245,920.04,” Plaintiffs cannot introduce evidence of contract damages beyond that amount because they judicially admitted the value of their options.[8] SAC at ¶ 149. The Court agrees. See Am. Title Ins. Co. v. Lacelaw Corp., 861 F.2d 224, 226 (9th Cir. 1988) (“Factual assertions in pleadings and pretrial orders, unless amended, are considered judicial admissions”); see also In re Barker, 839 F.3d 1189, 1195 (9th Cir. 2016) (“Judicial admissions are conclusively binding on the party who made them.”) (internal quotations omitted); United States v. Davis, 332 F.3d 1163, 1168 (9th Cir. 2003) (judicial admissions “have the effect of withdrawing a fact from issue and dispensing wholly with the need for proof of the fact”) (internal quotations omitted). Plaintiffs unambiguously alleged the value of the stock option agreements in their SAC. That constitutes a judicial admission of the options’ value and dispenses with the need for proof of that fact. *10 Plaintiffs request that, should the Court conclude their allegations are judicial admissions, the Court grant them leave to amend the SAC. Opp. at 11 n. 2. The deadline to amend pleadings in this case was January 26, 2018 and trial is set to begin on November 27, 2018, three weeks from the date of this Order. When a plaintiff seeks leave to amend after the deadline to amend has expired, that plaintiff must satisfy the “good cause” requirement of Fed. R. Civ. P. 16(b)(4). Johnson v. Mammoth Recreations, Inc., 975 F.2d 604, 608-609 (9th Cir. 1992). The Rule 16(b) analysis “primarily considers the diligence of the party seeking the amendment.” Id. at 609. If the plaintiff “was not diligent, the inquiry should end.’ ” Wholesale Natural Gas, 715 F.3d at 737 (quoting Johnson, 975 F.2d at 609). Plaintiff has made no effort to show Rule 16(b) diligence and the Court sees no obvious reason why Plaintiff could not have sought leave to amend before the deadline. Plaintiffs’ request to amend is DENIED. Defendant’s MIL No. 10 is GRANTED. I. Defendants’ MIL No. 11 [Doc. # 112][9] Defendant seeks to exclude under the attorney work product doctrine one email that it inadvertently disclosed to Plaintiffs.[10] Def.’s MIL No. 11 at 3–4. The email consists of a discussion among TuneCore’s counsel as to whether TuneCore gave Plaintiffs notice of the termination of their services. Plaintiffs counter that Defendant’s delay in seeking return of the email constitutes a waiver of the protection, and even absent waiver, the email is not protected as work product. Opp. to MIL No. 11 at 5 [Doc. # 141]. The Court concludes that even though the email likely qualifies as protected attorney work product, counsel waived any existing protection through their dilatory conduct.[11] A disclosure of material with work product protection does not operate as a waiver if: “(1) the disclosure is inadvertent; (2) the holder of the privilege or protection took reasonable steps to prevent disclosure; and (3) the holder promptly took reasonable steps to rectify the error, including (if applicable) following Federal Rule of Civil Procedure 26(b)(5)(B).” Fed. R. Evid. 502(b). The Ninth Circuit has held that “[w]hen the disclosure is involuntary, [the court] will find the privilege preserved if the privilege holder has made efforts ‘reasonably designed’ to protect and preserve the privilege.” United States v. de la Jara, 973 F.2d 746, 750 (9th Cir. 1992). But “if the privilege holder fails to pursue all reasonable means of preserving the confidentiality of the privileged matter,” he waives the privilege. Id.; Gomez v. Vernon, 255 F.3d 1118, 1131 (9th Cir. 2001) (“Inadvertent disclosure can also result in a waiver of the privilege ... if the privilege holder fails to pursue all reasonable means of preserving the confidentiality of the privileged matter.”); United States v. Deloitte LLP, 610 F.3d 129, 140 (D.C. Cir. 2010) (“disclosing work product to a third party can waive protection if “such disclosure, under the circumstances, is inconsistent with the maintenance of secrecy from the disclosing party’s adversary”). *11 Plaintiffs contend Defendant waived work product protection because it failed to take reasonable steps to rectify its mistaken disclosure. Plaintiffs argue that Defendant’s inaction during the nearly five months since the email was disclosed constitutes a waiver because Defendant did not “promptly” take steps to rectify its error. Opp. to Def.’s MIL No. 11 at 6. But FRE 502 does not demand “the producing party to engage in a post-production review to determine whether any protected communication or information has been produced by mistake.” Fed. Rule of Evid. 502 Advisory Committee Notes 2007. Rather, the producing party must “follow up on any obvious indications that a protected communication or information has been produced inadvertently.” Id. Defendant’s counsel asserts that she first learned of the inadvertent disclosure “on or around August 24, 2018 when Plaintiffs filed their opposition to TuneCore’s motion for summary judgment and attached” the email as an exhibit. Def.’s MIL at 8. Thus, the relevant date for this analysis is August 24, 2018, when Defendant’s counsel first became aware of the disclosure. After learning of the disclosure, Defendant’s counsel took no action for 14 days before making an objection to Plaintiffs’ use of the email on September 7, 2018 in Defendant’s Objections to Declaration of Jason A. Archinaco [Doc. # 94-1]. It then took counsel another 33 days to send a letter to Plaintiffs’ counsel on October 10, 2018 attempting to rectify the disclosure. Def.’s MIL No. 11, Ex. 2. Defendant sought no relief from the Court to seal the disclosed email. Courts have held that “once a party realizes a document has been accidentally produced, it must assert privilege with virtual immediacy.” Sikorsky Aircraft Corp. v. United States, 106 Fed. Cl. 571, 585 (2012) (collecting cases); U.S. ex rel. Bagley v. TRW, Inc., 204 F.R.D. 170, 180 (C.D. Cal. 2001) (holding counsel’s requested return of inadvertently disclosed documents one day after receiving notification letter counseled toward nonwaiver); Preferred Care Partners Holding Corp. v. Humana, Inc., 258 F.R.D. 684, 700 (S.D. Fla. 2009) (holding privilege waived when privilege holder took no action for almost two months after disclosure, including a three-week lag after opponent used document in support of motion for sanctions); Securities and Exch. Comm’n v. Cassano, 189 F.R.D. 83, 86 (S.D.N.Y. 1999) (concluding that passage of 12 days before attempting to rectify inadvertent disclosure results in waiver). The Court concludes that objecting to Plaintiffs’ attachment of the inadvertently disclosed email 14 days after discovering the disclosure does not satisfy the Ninth Circuit’s requirement that a party must pursue “all reasonable means” of preserving confidentiality. Nor does first requesting that Plaintiffs’ counsel return the allegedly privileged email 33 days after making the objection and 47 days after learning about the disclosure. Defendant argues in its Reply that, for several reasons, Plaintiffs’ counsel should have known the email was protected and informed Defendant sooner that he possessed the inadvertently produced emails. See Reply in Support of MIL No. 11. But even if Plaintiffs’ counsel was aware of the email’s protected nature, that awareness does not cure Defendant’s failure to timely attempt to claw the email back. Accordingly, Defendant waived work product protection through inaction. Regardless of the work product protection issue, however, the Court struggles to fully grasp the email’s significance and relevance to Plaintiffs’ case. Sieben’s statements in the email regarding Caterine strike the Court as harmful to Plaintiffs because it lists the reasons why Defendant regarded Plaintiffs as having been terminated. If Defendant intends to argue that TuneCore did, in fact, notify Atencio it had terminated him, then Plaintiff will be permitted to introduce the email in rebuttal. Even then, the email would be evidence only of TuneCore’s understanding that TuneCore never notified Atencio of his termination. Otherwise, unless Plaintiffs can edify the Court at oral argument as to the email’s relevance to their case in chief, the Court will exclude it as a waste of time under Rule 403. *12 The Court therefore GRANTS Defendant’s MIL No. 11 in part and DENIES it in part. II. CONCLUSION In light of the foregoing, the Court issues the following orders: 1. Plaintiffs’ Motion for Reconsideration [121] is DENIED; 2. Plaintiffs’ MIL No. 1 [99] requesting an adverse inference due to spoliation of evidence is DENIED; 3. Defendant’s MIL No. 2 [103] to exclude evidence of Caterine’s services is DENIED; 4. Defendant’s MIL No. 4 [105] to exclude evidence of the purported attorney conspiracy is GRANTED. The MIL to oppose an unfiled motion to disqualify counsel is DENIED. The MIL to exclude evidence of Defendant’s law firms’ sizes and reputations is DENIED without prejudice; 5. Defendant’s MIL No. 5 [106] is GRANTED insofar as it seeks to prohibit Plaintiffs from arguing that they may recover under a breach of contract theory more than the value of the stock option agreements and DENIED insofar as it seeks to exclude evidence that the reasonable value of Plaintiffs’ services is more than the stock option agreements’ value; 6. Defendant’s MIL No. 7 [108] to exclude evidence of the reasonable value of Plaintiffs’ service in excess of the stock option agreements’ value is DENIED; 7. Defendant’s MIL No. 9 [110] to exclude evidence related to TuneCore’s capitalization table is DENIED; 8. Defendant’s MIL No. 10 [111] to exclude evidence of Plaintiffs’ alternative, increased valuation of TuneCore is GRANTED; and 9. Defendant’s MIL No. 11 [112] to exclude Plaintiffs’ introduction of an inadvertently produced email, “Exh. 100,” is GRANTED in part and DENIED in part. IT IS SO ORDERED. Footnotes [1] “Them” presumably refers to Caterine and Atencio, but the email itself does not specify. [2] Plaintiffs are unclear and inconsistent as to which email they are referencing. They did not bother to attach a copy of the “missing email.” The Court will assume Plaintiffs’ are referring to an email dated January 7, 2011. Throughout the MIL, Plaintiffs’ refer to “the 2012 email,” or “the missing 2012 email,” but the deposition Plaintiffs cite and attach as Exhibit 1 to their MIL, specifically mentions the January 7, 2011 email. Pls. MIL, Ex. 1 at 56:5–10. [3] At oral argument, Plaintiffs stated that Price told Plaintiffs’ counsel that the board minutes likely existed, but could not conclusively state that Price had actually seen the minutes or knew TuneCore had destroyed them. Although Price’s understanding may tend to show that TuneCore kept board minutes as a matter of practice, and that those minutes may have existed in 2012, it does not show that TuneCore subsequently destroyed them with a “culpable” state of mind, especially given that the language in the stock option agreements themselves is the best evidence of the parties’ intent. [4] Federal courts sitting in diversity generally apply the same parol evidence rule that is applicable in the forum state. Jinro Am. Inc. v. Secure Investments, Inc., 266 F.3d 993, 999 (9th Cir.), opinion amended on denial of reh’g, 272 F.3d 1289 (9th Cir. 2001) (applying Arizona parol evidence rule); Bourke v. Dun & Bradstreet Corp., 159 F.3d 1032, 1036 (7th Cir. 1998) (“In a diversity case, a federal court applies federal procedural but state substantive law”). The stock option agreements at issue here, however, contain an express choice of law provision stating that the agreements “shall be governed by, and interpreted pursuant to, the laws of the State of New York.” [Doc. # 82-2 (Rowe Decl. in Support of Defendant’s Motion for Summary Judgment, Ex. 18) at 4.] Therefore, even though California is the forum state, New York’s parol evidence rule applies. [5] According to Plaintiffs, “[a]lthough Caterine’s options did not permit their cancellation while he was working for the company, [O’Melveny] noted them as cancelled on January 5 without any authority of direction from TuneCore itself.” Opp. to Def.’s MIL 4 and 9 at 10 (emphasis added). [6] At oral argument Plaintiffs conceded that they had not designated any experts as required by Rule 26. Indeed, the Court’s Scheduling Order set the deadline for expert disclosures as July 31, 2018. [Doc. # 70-1.] Plaintiff did not designate themselves, or anyone else, as experts in this area before that deadline passed. [7] The Advisory Committee Notes to Rule 701 suggest that layperson testimony about the value of a business from someone with “knowledge and participation in the day-to-day affairs of the business,” such as an “owner or officer” is admissible. Fed. R. Evid. 701 Advisory Committee’s Notes to 2000 Amendments (citing Lightning Lube, Inc. v. Witco Corp., 4 F.3d 1153 (3d Cir. 1993). Plaintiffs have given the Court no reason to believe that either Caterine or Atencio would have had sufficient knowledge of the day-to-day affairs of TuneCore at the time of the merger to give lay testimony on the company’s “true” value at that time. See James River Ins. Co., 658 F.3d at 1214 (holding that, despite the Advisory Committee notes, Rule 701 “does not permit a lay witness to express an opinion as to matters which are beyond the realm of common experience and which require the special skill and knowledge of an expert witness.”). [8] At oral argument, Plaintiffs asserted that during discovery they made other allegations of different, higher valuations of their stock option agreements’ worth. Plaintiffs were unable, however, to cite to specific instances where this occurred. Conversely, Defendant cited to multiple instances in Plaintiffs’ Rule 26 disclosures where they describe the options’ value as the same amount Plaintiffs claimed in the SAC. See Plaintiff’s Initial Rule 26(a) Disclosure [Doc. # 147-1] at 6. In the “Computation of Damages” section, Plaintiffs stated that: Alternatively, damages are calculated at the face value of the options provided to Mr. Atencio and/or their appreciation since the sale of TuneCore. The last information Mr. Atencio possessed valued the options at approximately $49,103.36. and that: Alternatively, damages are calculated at the face value of the options provided to Mr. Caterine and/or their appreciation since the sale of TuneCore. The last information Mr. Caterine possessed valued the options at approximately $196,816.68. Id. Plaintiffs also failed to timely supplement their disclosures as to contract damages calculations. Accordingly, Plaintiffs are bound by the judicial admissions doctrine as to the contract damages identified in their SAC and Rule 26 disclosures. [9] Defendant filed an ex parte application for leave to file a Reply in Support of MIL No. 11. [Doc. # 146.] Although the Court generally disfavors reply briefing in support of motions in limine, the Court GRANTS Defendant’s application because, even in light of Defendant’s arguments in reply, the Court’s conclusion remains the same. [10] In its Reply, Defendant refers to the email at issue as “Exhibit 106,” but the citation to the accompanying attorney declaration describes “Exhibit 100.” Reply at 4. Because MIL No. 11 is directed at an email attached as “Exh. 100” to Plaintiffs’ Opposition to Defendant’s Motion for Summary Judgment, the Court will assume there is no second “Exhibit 106” email and analyze only the events surrounding the “Exhibit 100” email. Def.’s MIL No. 11 at 3. [11] Defendant refers to the email as both “attorney work product” and “privileged.” See Def.’s MIL No. 11 at 3. Although Defendant may at times conflate the attorney work product protection with attorney-client privilege, the confusion does not affect this analysis because the standard “for determining waiver of the attorney-client privilege and the work product doctrine are essentially the same.” In re Syncor ERISA Litig., 229 F.R.D. 636, 646 (C.D. Cal. 2005).