FTC v. Meta Platforms Inc.
FTC v. Meta Platforms Inc.
2022 WL 17553006 (N.D. Cal. 2022)
December 9, 2022
Davila, Edward J., United States District Judge
Summary
The Federal Trade Commission (FTC) filed a motion in limine to exclude evidence from three third-party witnesses, Eric Janszen, Jaime Pichardo Garcia, and Preston Lewis, due to untimely disclosure. The Court granted the motion in part, finding that Defendants had failed to disclose Lewis in a timely manner and that the disclosure was not harmless. As a result, the Court excluded Lewis's live testimony, declaration, and deposition transcript.
FEDERAL TRADE COMMISSION, Plaintiff,
v.
META PLATFORMS INC., et al., Defendants
v.
META PLATFORMS INC., et al., Defendants
Case No. 22-cv-04325-EJD
United States District Court, N.D. California, San Jose Division
Signed December 09, 2022
Counsel
Adam Michael Pergament, Andrew Lowdon, Anthony Saunders, Erika Meyers, Ernest Eric Elmore, James Harris Weingarten, Joshua M. Goodman, Justin Epner, Kristian Rogers, Lincoln Mayer, Michael Barnett, Peggy Femenella, Sean Hughto, Susan Musser, Timothy Patrick Singer, Abby Lauren Dennis, Bradley Dax Grossman, Frances Anne Johnson, Jeanine Balbach, Federal Trade Commission Office of the General Counsel, Washington, DC, Erika Ruth Wodinsky, Federal Trade Commission, San Francisco, CA, for Plaintiff.Aaron M. Panner, Pro Hac Vice, Alex Atticus Parkinson, Pro Hac Vice, Ana Nikolic Paul, Pro Hac Vice, Collin R. White, Pro Hac Vice, Daniel G. Bird, Pro Hac Vice, Evan Todd Leo, Pro Hac Vice, Jacob Edwin Hartman, Pro Hac Vice, James M. Webster, III, Pro Hac Vice, Julius Taranto, Pro Hac Vice, Kimberly Varadi Hamlett, Pro Hac Vice, Li Wei Vivian Dong, Pro Hac Vice, Mark C. Hansen, Hannah Carlin, Pro Hac Vice, Samuel A. Martin, Pro Hac Vice, Jared Beim, Pro Hac Vice, Kellogg, Hansen, Todd, Figel and Frederick, P.L.L.C., Washington, DC, Chantale Fiebig, Pro Hac Vice, Jeffrey H. Perry, Pro Hac Vice, Michael Moiseyev, Pro Hac Vice, Weil, Gotshal & Manges LLP, Washington, DC, Geoffrey M. Klineberg, Washington, DC, Molly Maureen Jennings, Pro Hac Vice, Wilmer Cutler Pickering Hale and Dorr LLP, Washington, DC, Bambo Obaro, Pro Hac Vice, Weil, Gotshal and Manges, Redwood Shores, CA, Diane P. Sullivan, Pro Hac Vice, Weil, Gotshal and Manges LLP, Princeton, NJ, Elizabeth Y. Ryan, Pro Hac Vice, Weil, Gotshal & Manges LLP, Dallas, TX, Eric S. Hochstadt, Pro Hac Vice, Weil Gotshal & Manges LLP, New York, NY, Sonal N. Mehta, Wilmer Cutler Pickering Hale and Dorr LLP, Palo Alto, CA, for Defendant Meta Platforms Inc.
Christopher J. Cox, Joseph Taylor Spoerl, Hogan Lovells U.S. LLP, Menlo Park, CA, Benjamin Frederick Holt, Pro Hac Vice, Charles A. Loughlin, Pro Hac Vice, Christopher Fitzpatrick, Pro Hac Vice, Daniel Tyler Mader, Pro Hac Vice, Jonathan Elsasser, Pro Hac Vice, Lauren Battaglia, Pro Hac Vice, Liam Phibbs, Pro Hac Vice, Logan Michael Breed, Pro Hac Vice, Eric Richard Sega, Pro Hac Vice, Hogan Lovells U.S. LLP, Washington, DC, Jamie Lee, Pro Hac Vice, Columbia Square, Washington, DC, for Defendant Within Unlimited, Inc.
Adam R. Fox, Squire Patton Boggs (US) LLP, Los Angeles, CA, for Defendant Lululemon Athletica, Inc.
Henry Bluestone Smith, NYS Office of the Attorney General, New York, NY, for Amici State of New York, State of Alaska, State of California, State of Connecticut, State of Delaware, State of Hawaii, State of Idaho, State of Maryland, Commonwealth of Massachusetts, State of Minnesota, State of Mississippi, State of Montana, State of Nebraska, State of Nevada, State of New Jersey, State of New Mexico, State of North Carolina, State of North Dakota, State of Oregon, State of Rhode Island, State of Utah, State of Washington, District of Columbia, Territory of Guam, State of Illinois.
Davila, Edward J., United States District Judge
ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFF FTC'S MOTION IN LIMINE TO EXCLUDE EVIDENCE CONCERNING THIRD-PARTY WITNESSES Re: ECF No. 280
*1 Plaintiff Federal Trade Commission (the “FTC”) moves in limine to exclude all evidence concerning third-party witnesses Eric Janszen, Jaime Pichardo Garcia, and Preston Lewis on the basis that these witnesses were untimely disclosed. ECF No. 280 (“Motion”). Having considered the arguments presented in the Parties’ briefs and oral arguments, the Court GRANTS IN PART and DENIES IN PART the FTC's Motion.
I. Legal Standard
Rule 26(a) of the Federal Rules of Civil Procedure requires parties to make initial disclosures providing “the name and, if known, the address and telephone number of each individual likely to have discoverable information—along with the subjects of that information—that the disclosing party may use to support its claims or defenses.” Fed. R. Civ. P. 26(a)(1)(A)(i). Parties must supplement their disclosures in a timely manner. Fed. R. Civ. P. 26(e)(1)(A). Rule 37(c)(1) provides that “[i]f a party fails to provide information or identify a witness as required by Rule 26(a) or (e), the party is not allowed to use that information ... at a trial, unless the failure was substantially justified or is harmless.” Hoffman v. Constr. Protective Serv., Inc., 541 F.3d 1175, 1179 (9th Cir. 2008). “The party facing sanctions bears the burden of proving that its failure to disclose the required information was substantially justified or is harmless.” Unicolors, Inc. v. H&M Hennes & Mauritz L.P., 52 F.4th 1054, 1073 (9th Cir. 2022) (citation omitted).
II. Discussion
The disclosures of Mr. Janszen and Mr. Garcia are differently situated than that of Mr. Lewis. The Court addresses each in turn.
The FTC identified Mr. Janszen and Mr. Garcia in its initial disclosures, and Defendants indirectly disclosed them by identifying those individuals disclosed by the FTC in their initial disclosures. Mr. Janszen and Mr. Garcia were therefore timely disclosed by Defendants. Even if the disclosures were untimely, the FTC's prior identification would render harmless any tardiness. Hauschild v. City of Richmond & Magnus, No. C 15-01556 WHA, 2015 WL 7351384, at *3 (N.D. Cal. Nov. 20, 2015); Townsend v. Monster Beverage Corp., 303 F. Supp. 3d 1010, 1041 (C.D. Cal. 2018). Accordingly, the FTC's Motion is DENIED as to Mr. Janszen and Mr. Garcia.
In contrast, the FTC had no knowledge of Mr. Lewis prior to Defendants’ service of his declaration and deposition notice on November 5, 2022, despite Defendants’ repeatedly contacts with Mr. Lewis after September 6, 2022. ECF No. 280-2 at 10. Defendants’ contention that supplemental disclosure was not required until they had subjectively and definitively decided to use Mr. Lewis's declaration is unavailing. Guzman v. Bridgepoint Educ., Inc., 305 F.R.D. 594, 605 (S.D. Cal. 2015) (“Requiring parties to disclose only those witnesses they subjectively intend to use in substantiating their claims, rather than those they merely ‘may use’ as Rule 26 explicitly requires, would erode the efficacy of the rule's disclosure requirements.”); Lopez v. UPS General Serv. Corp., No. CV-S-04-0732-JCM-GWF, 2006 WL 8441568, at *3 (D. Nev. Jan. 19, 2006) (“Rule 26(a)(1)(A), however, is not so narrow as to only require disclosure of witnesses that the party actually intends, at the time of disclosure, to use in the case. Disclosure should be made if the party reasonably knows that it may use the person as a witness in support of its claims or defenses.”). Here, Defendants would have known they might use Mr. Lewis's evidence prior to his execution of the declaration, and were obligated to disclose him then.
*2 Additionally, Defendants served Mr. Lewis's declaration one day past the November 4, 2022 deadline to serve third-party declarations. As articulated by the Court on December 5, 2022, although one day may appear a small delay, and despite the technological error that caused the last step of the delay, timing is important. Arbitrarily extending discovery deadlines serves only to render those deadlines meaningless. See, e.g., United States v. Ornelas, 906 F.3d 1138, 1151 (9th Cir. 2018). The disclosure of Mr. Lewis was therefore untimely.
Defendants’ untimeliness was not substantially justified. Courts in this circuit weigh five factors in analyzing substantial justification: (1) the surprise to the party against whom the evidence would be offered; (2) the ability of that party to cure the surprise; (3) the extent to which allowing the evidence would disrupt the trial; (4) the importance of the evidence, and (5) the nondisclosing party's explanation for its failure to disclose the evidence. See, e.g., Moua v. IBM Corp., No. 5:10-cv-01070-EJD, 2019 WL 917422, at *1 (N.D. Cal. Feb. 25, 2019). The factors here weigh in favor of exclusion. First, the disclosure of Mr. Lewis was a surprise; Defendants had not identified Mr. Lewis in their disclosures. Second, because the declaration and service of Mr. Lewis's deposition notice occurred only five days prior to the deposition, there was insufficient time for the FTC to cure the surprise by conducting fulsome document discovery in advance of the deposition. Third, given the compressed timeline for the hearing on the preliminary injunction, an additional witness will have a significant impact on the Court's hearing schedule. As for the fifth factor, Defendants stated in their oral and written arguments that they did not disclose Mr. Lewis because they had not yet decided to use his testimony, and the work product doctrine protected against disclosure. Opp. at 8-9. But certainty is not the standard for disclosure. And allowing litigants to evade their initial and supplemental disclosure obligations by simply claiming they had not yet made up their minds would eviscerate the meaning of Rule 26 disclosures. Although the fourth factor is more neutral, the nature of Mr. Lewis's evidence, which Defendants say will concern the VR dedicated fitness market, does not outweigh the other factors, especially given that Mr. Janszen and Mr. Garcia will testify about the same topic. See Opp. at 1-3.
Nor was the untimely disclosure harmless. Defendants’ delay in disclosing Mr. Lewis precluded the FTC from obtaining information from him during party discovery, which concluded on October 26, 2022 (ECF No. 86), and required the FTC to “make last-minute preparations and decisions on the run.” Ollier v. Sweetwater Union High School Dist., 768 F.3d 843, 863 (9th Cir. 2014) (affirming conclusion that untimely disclosure 10 months before trial was not harmless). The FTC's motion in limine to exclude Mr. Lewis's live testimony, declaration (DX1289), and deposition transcript (DX1218) is therefore GRANTED.
III. Conclusion
The Court GRANTS IN PART and DENIES IN PART the FTC's Motion, as follows:
1. The Motion is DENIED as to Mr. Janszen and Mr. Garcia.
2. The Motion is GRANTED as to Mr. Lewis. Defendants shall not submit any declaration, testimony, or other evidence from Mr. Lewis in this action.
IT IS SO ORDERED.