Strategic Partners, Inc. v. FIGS, Inc.
Strategic Partners, Inc. v. FIGS, Inc.
2022 WL 18399950 (C.D. Cal. 2022)
September 26, 2022
Holcomb, John W., United States District Judge
Summary
The court denied all ten motions in limine filed by the defendants, which sought to exclude evidence of their prior bad acts, financial condition, communications with third parties, statements, litigation, emails, social media posts, and electronic documents. The court found that all of the ESI was relevant to the case and should be admitted.
Additional Decisions
STRATEGIC PARTNERS, INC., Plaintiff,
v.
FIGS, INC., CATHERINE (“TRINA”) SPEAR, and HEATHER HASSON, Defendants.
FIGS, INC., CATHERINE (“TRINA”) SPEAR, and HEATHER HASSON, Counterclaimants,
v.
STRATEGIC PARTNERS, INC., Counterdefendant
v.
FIGS, INC., CATHERINE (“TRINA”) SPEAR, and HEATHER HASSON, Defendants.
FIGS, INC., CATHERINE (“TRINA”) SPEAR, and HEATHER HASSON, Counterclaimants,
v.
STRATEGIC PARTNERS, INC., Counterdefendant
Case No. 2:19-cv-02286-JWH-KS
United States District Court, C.D. California
Filed September 26, 2022
Holcomb, John W., United States District Judge
ORDER REGARDING PLAINTIFF'S MOTIONS IN LIMINE [ECF Nos. 710, 720, 723, 726, & 730] AND DEFENDANTS' MOTIONS IN LIMINE [ECF Nos. 702, 703, 704, 705, 706, 707, 708, 709, 711, & 715]
*1 Before the Court are five motions in limine filed by Plaintiff and Counterdefendant Strategic Partners, Inc (“SPI”)[1] and 10 motions in limine by Defendants and Counterclaimants FIGS, Inc.; Catherine (“Trina”) Spear; and Heather Hasson (collectively, “Defendants”).[2] The parties are familiar with the factual and procedural background of this case. Accordingly, the Court relates only those facts germane to the instant Motions.
I. LEGAL STANDARD
A. Motions in Limine
Motions in limine are a well-recognized judicial practice authorized under case law. See Ohler v. United States, 529 U.S. 753, 758 (2000). The Court's power to rule on motions in limine stems from “the court's inherent power to manage the course of trials.” Luce v. United States, 469 U.S. 38, 41 n.4 (1984).
Regardless of its initial decision on a motion in limine, a court may revisit the issue at trial. See Fed. R. Evid. 103, advisory committee's note to 2000 Amendment (“Even where the court's ruling is definitive, nothing in the amendment prohibits the court from revisiting its decision when the evidence is to be offered.”); Luce, 469 U.S. at 41–42 (“[E]ven if nothing unexpected happens at trial, the district judge is free, in the exercise of sound judicial discretion, to alter a previous in limine ruling.”). “The Supreme Court has recognized that a ruling on a motion in limine is essentially a preliminary opinion that falls entirely within the discretion of the district court.” United States v. Bensimon, 172 F.3d 1121, 1127 (9th Cir. 1999) (citing Luce, 469 U.S. at 41–42).
B. Daubert Motions
Expert witness testimony is governed by Rule 702 of the Federal Rules of Evidence, which provides:
A witness who is qualified as an expert by knowledge, skill, experience, training, or education may testify in the form of an opinion or otherwise 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. The Rule should be applied consistent with the “liberal thrust” of the Federal Rules of Evidence and their “general approach of relaxing the traditional barriers to ‘opinion testimony.’ ” Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579, 588 (1993) (citing Beech Aircraft Corp. v. Rainey, 488 U.S. 153, 169 (1988)). A trial court's “gatekeeping” obligation to admit only expert testimony that is both reliable and relevant is especially important “considering the aura of authority experts often exude, which can lead juries to give more weight to their testimony.” Mukhtar v. Cal. State Univ., 299 F.3d 1053, 1063–64 (9th Cir. 2002). Nevertheless, “[s]haky but admissible evidence is to be attacked by cross examination, contrary evidence, and attention to the burden of proof, not exclusion.” Primiano v. Cook, 598 F.3d 558, 564 (9th Cir. 2010).
*2 The trial court is accorded wide discretion when acting as a gatekeeper for the admissibility of expert testimony. See Kumho Tire Co., Ltd. v. Carmichael, 526 U.S. 137, 151–52 (1999). First, the court must determine if a witness has the required expertise, whether it be through “knowledge, skill, experience, training, or education” under Rule 702(a). Fed. R. Evid. 402. Next, courts must ensure that “any and all scientific testimony or evidence admitted is not only relevant, but reliable.” Daubert, 509 U.S. at 589. The expert's opinion must be based upon “scientific knowledge”; opinions based upon unsubstantiated generalizations or opinions not derived by the scientific method must be excluded. Daubert v. Merrell Dow Pharms., Inc., 43 F.3d 1311, 1316 (9th Cir. 1995).
II. DISCUSSION
A. SPI's Motions in Limine
1. Motion in Limine No. 1 [ECF No. 720]
SPI seeks to exclude testimony from FIGS's expert witness Dr. Kusum Ailawadi that allegedly relies on lay witness Marni Penta's testimony on SPI's marketing. SPI argues that Rule 703 prohibits experts from relying on the type of anecdotal evidence proffered by Penta and that Dr. Ailawadi unreasonably relied upon Penta's testimony.[3] In the words of SPI, “speculation of a lay witness like Ms. Penta cannot be laundered through Dr. Ailawadi to reach the jury.”[4] SPI also maintains that Penta's opinions and deposition testimony are hearsay and that Dr. Ailawadi's “uncritical extrapolation uses Ms. Penta's opinions to establish the truth [of the matters].”[5]
Defendants respond that Penta's testimony was confined to her personal experiences as a retailer with SPI's advertising and distribution efforts and that that is the type of witness testimony upon which experts regularly rely.[6] FIGS also contends that Penta's testimony was not substantially more prejudicial than probative under Rule 403 and that Penta's testimony was based upon personal experience with SPI and with the use of SPI's marketing materials.[7]
Rule 703 governs SPI's arguments concerning the sources of expert opinion and reliance on hearsay sources:
An expert may base an opinion on facts or data in the case that the expert has been made aware of or personally observed. If experts in the particular field would reasonably rely on those kinds of facts or data in forming an opinion on the subject, they need not be admissible for the opinion to be admitted. But if the facts or data would otherwise be inadmissible, the proponent of the opinion may disclose them to the jury only if their probative value in helping the jury evaluate the opinion substantially outweighs their prejudicial effect.
Fed. R. Evid. 703. Additionally, the Ninth Circuit has held that “experts are entitled to rely on hearsay in forming their opinions.” Carson Harbor Vill., Ltd. v. Unocal Corp., 270 F.3d 863, 873 (9th Cir. 2001); see also United States v. McCollum, 732 F.2d 1419, 1422–23 (9th Cir. 1984) (applying Rule 703 to affirm the admission of expert testimony based upon hearsay).
Because experts are permitted to rely on hearsay to form their opinions, SPI's objections to Dr. Ailawadi and her reliance on Penta's testimony are unfounded. SPI's Rule 403 objection that Dr. Ailawadi's opinion is more prejudicial than probative fares no better—although Dr. Ailawadi may substantially base her opinion on testimony of a single retailer, this is a question better left for cross-examination, as it pertains to weight and not admissibility. See Primiano, 598 F.3d at 564 (“[s]haky but admissible evidence is to be attacked by cross examination, contrary evidence, and attention to the burden of proof, not exclusion”). Therefore, Dr. Ailawadi's testimony may be admitted, and SPI's First Motion in Limine is DENIED.
2. Motion in Limine No. 2 [ECF No. 723]
*3 SPI moves to exclude the testimony of FIGS's expert witness Dr. Christopher Pastore “because he does not have a reliable basis or sufficient evidence to support his opinions” regarding the quality of FIGS's versus SPI's scrubs and their perception by consumers.[8] SPI cites the following reasons for excluding Dr. Pastore's opinion: (1) he used the “not widely accepted” FAST Protocol;[9] (2) he used a 1988 variant of the FAST Protocol instead of the more recent 1994 variant;[10] and (3) he did not follow either of the FAST Protocols “in at least nine additional respects,” including:
• not maintaining laboratory temperature;
• failing to repeat compression tests the required number of times;
• failing to repeat stretch tests the required number of times;
• not obtaining measurements of the left/right bias for the stretch test;
• not using the required weight levels against the fabric stretch test;
• not steaming the fabric;
• declining to provide the stretch results by percentage;
• refusing to interpret data using the Protocol parameters; and
• failing to follow statistical guidelines provided by the Protocol.[11]
Under Rule 702 and the governing standard set forth in Daubert, expert opinion is admissible only if it satisfies two independent criteria: (1) reliability; and (2) relevance. Daubert, 509 U.S. at 590-91. In all instances, “[t]he judge is supposed to screen the jury from unreliable nonsense opinions, but not exclude opinions merely because they are impeachable.” City of Pomona v. SQM North Am. Corp., 750 F.3d 1036, 1044 (9th Cir. 2014).
As FIGS notes in its Opposition, the Court previously rejected all of the Daubert motions previously filed by SPI and FIGS.[12] SPI's instant Motion in Limine serves the same purpose as the previously rejected Daubert Motions; SPI argues that the Court should exclude expert testimony based upon methodological or testing-related flaws in Dr. Pastore's examination of SPI's and FIGS's scrubs. Although SPI assails Dr. Pastore's use of the FAST Protocol, SPI's own expert—Dr. den Hartog—recognized that the FAST testing method is known and used in the industry.[13]
Although SPI makes several arguments that the FAST Protocol is not widely used and that Dr. Pastore failed to adhere meticulously to its standards and procedures, those arguments “go to the weight of the evidence” and not its admissibility. City of Pomona, 750 F.3d at 1044. SPI's arguments for excluding Dr. Pastore's testimony revolve around the same types of testing and methodology deficiencies that FIGS argued in its Daubert Motion to exclude SPI's expert witness Dr. Peter J. Hauser,[14] and, therefore, SPI's Second Motion in Limine is DENIED.
3. Motion in Limine No. 3 [ECF No. 710]
4. Motion in Limine No. 4 [ECF No. 730]
In its Fourth Motion in Limine, SPI seeks to exclude any testimony or evidence relating to any of SPI's prior lawsuits, specifically the Vestagen Actions and the KOI Actions.[17] SPI maintains that the prior lawsuits are irrelevant and unfairly prejudicial, that they confuse the issues, and that their introduction will waste time and resources. Furthermore, SPI claims that its prior lawsuits will be used by FIGS to paint SPI as overly litigious and that they falsely depict SPI as trying to sue competitors out of business.[18]
*4 Rule 401 provides that evidence is relevant if “(1) it has any tendency to make a fact more of less probable than it would be without the evidence; and (b) the fact is of consequence in determining the action.” Fed. R. Evid. 401. If the evidence is not relevant, then it is not admissible. See Fed. R. Evid. 402 (irrelevant evidence is not admissible).
SPI cites three cases in support of its contention that “[w]ell-settled precedent establishes that evidence regarding lawsuits previously pursued by SPI is inadmissible because it is unrelated to the acts of Defendants that form the basis of the claims and defenses at issue in this lawsuit.”[19] The Court is not convinced.
Martin v. City of Barstow, 2015 WL 12743591 (C.D. Cal. Nov. 5, 2015), is a civil rights action in which the plaintiff alleged that the City of Barstow committed Fourth Amendment violations during its execution of a warrant at his residence. Id. at *2. The City moved to exclude “any evidence or argument concerning ... [a]ny other incident or lawsuit involving the City of Barstow, the Barstow Police Department, or any of its officers which gained media attention of any kind which are/were unrelated to the Plaintiff Michael Martin.” Id. at *3 (quotation omitted). The Martin court granted that motion on the ground that such evidence was irrelevant.
Martin is distinguishable, because here SPI seeks to exclude lawsuits that are related to its instant action against FIGS. SPI's lawsuits against Vestagen and KOI concerned false advertising by scrubs-manufacturing competitors, and they involved claims about the bacteria-killing qualities of SPI's scrubs.[20] In the Vestagen action, SPI advertised that its Silvadur-treated scrub fabric neutralized bacteria upon contact, and FIGS intends to introduce the same scientific evidence that SPI previously relied on in Vestagen.[21] FIGS also intends to assert equitable defenses relating to the Vestagen action, and it will argue that judicial estoppel acts as a bar to SPI litigating inconsistent positions across different lawsuits.[22] Martin involved none of those issues.
Next, SPI cites Henderson v. Peterson, 2011 WL 2838169, at *5-*6 (N.D. Cal. July 15, 2011), as evidence of courts in this Circuit excluding prior lawsuits under “Rules 403 and 404(b) when ... defendants fail to provide any factual or legal support for the basis of their assertions in the prior lawsuits are related to the dispute before the court.”[23] That case is facially inapposite, as FIGS has argued that the prior lawsuits are related to claims in the instant action and that they provide relevant evidence for its defense.
Finally, SPI invokes an Eighth Circuit case affirming a district court's exclusion of evidence of previous lawsuits against a manufacturer. Ahlberg v. Chrysler Corp., 481 F. 3d 630, 636-37 (8th Cir. 2007).[24] That decision is not binding on this Court, and, in any event, it involved the exclusion of unrelated prior lawsuits concerning vehicle accidents—with the notable exception of allowing evidence of lawsuits with similar fact patterns to the accident at issue in Ahlberg. See id. at 637 (“The magistrate judge excluded any evidence of a prior accident unless the accident involved (1) a Jeep or Dodge truck with an automatic transmission manufactured between 1990 and 1999, (2) with a key left in the ignition, and (3) a child under age four.”) (emphasis added).
*5 In the absence of binding authority concerning the admissibility of prior litigation, the Court turns to Rule 401 and the relevance of the prior lawsuits to the instant action. Trial courts may allow evidence of a party's prior lawsuits when they are not intended to show litigiousness, and they may admit “evidence of a party's prior acts in the course of prior litigation ... if relevant to other disputed issues such as motive, state of mind, and credibility.” Moser v. Health Ins. Innovations, Inc., 2018 WL 6735710, at *15 (S.D. Cal. Dec. 21, 2018).
FIGS maintains that it is not offering evidence of SPI's prior litigation to show SPI's litigiousness but, instead, to allow FIGS to argue its equitable defense of judicial estoppel. FIGS asserts that the lawsuits against Vestagen and KOI should be admitted because they cast doubt on SPI's credibility for its claim of damages.[25] The inconsistent positions taken by SPI's witnesses in Vestagen regarding the antimicrobial aspects of its scrubs are also relevant, and would be admissible, for impeachment purposes.[26] Accordingly, to the extent that FIGS does not introduce evidence of prior lawsuits improperly to show SPI as overly litigious, SPI's Fourth Motion in Limine is DENIED.
5. Motion in Limine No. 5 [ECF No. 726]
SPI's Fifth Motion in Limine seeks to preclude FIGS “from referring to, introducing, and/or characterizing any position and/or evidence of specific statements and/or arguments made by SPI in the Vestagen Action.”[27] This Motion is essentially duplicative of SPI's Fourth Motion in Limine, and it even recites the same case law in its attempt to justify excluding reference to the Vestagen lawsuit.[28] For the reasons stated above, this Motion is DENIED.
B. FIGS's Motions in Limine
1. Motion in Limine No. 1 [ECF No. 702]
FIGS moves to preclude SPI from arguing before the jury that FIGS's removal of the challenged “Immediate Kill and HAI Claims” was admission of culpable conduct.[29] Under Rule 407, parties may not introduce evidence of subsequent remedial measures to prove culpable conduct. FIGS maintains that SPI attempted to argue in its Motion for Summary Judgment that FIGS's removal of the contested claims from its website was a tacit admission of fault, and it believes that SPI will attempt to argue the same to the jury.[30]
SPI concedes that subsequent remedial measures may not be used to infer culpable conduct under Rule 407, but it opposes FIGS's Motion to the extent that it seeks to exclude evidence of the claim removals for other purposes; e.g., impeachment, control, and feasibility of precautionary measures.[31] FIGS similarly concedes that it does not oppose this evidence for purposes other than the admission of culpability, and it may itself rely on this evidence for damages purposes.[32]
With the parties largely in agreement about the use of subsequent remedial measures for non-culpability purposes, the Motion is GRANTED.
2. Motion in Limine No. 2 [ECF No. 703]
FIGS's next motion in limine seeks to prevent the introduction of evidence alleging that FIGS failed “to register its scrubs pursuant to EPA guidelines and FDA regulations (the Regulatory UCL Claim).”[33] FIGS argues that the Regulatory UCL claim is an equitable cause of action and that SPI's claim presents “ ‘a pure question of administrative law’ about whether the EPA guidelines and FDA regulations required FIGS to register its scrubs with either agency.”[34] FIGS asserts that allowing the jury to hear those claims would confuse the issue, mislead the jurors, waste time, and prejudice FIGS.[35]
*6 FIGS cites Merck Sharp & Dohme Corp. v. Albrecht, 139 S. Ct. 1668, 1679– 80 (2019), for the proposition that pure questions of administrative law are inappropriate for jurors. But the Court in Albrecht considered merely the question of agency disapproval and not whether a party falsely advertised its product as adhering to agency guidelines. In the instant action, SPI alleges that FIGS falsely advertised that FIGS's products had FDA and EPA regulatory approval.[36] Those allegations are central to SPI's Lanham Act and UCL claims, and they additionally support SPI's response to FIGS's unclean hands affirmative defense.[37] FIGS's reference to Albrecht is therefore inapt, as neither the jury nor the Court is being asked to consider whether the FDA or EPA would have approved FIGS's scrubs for their advertised labeling; the question is whether FIGS falsely advertised that it had obtained regulatory approval.[38]
FIGS then cites multiple lower court cases for Ninth Circuit authority on false advertisement claims and administrative law, but none of those authorities is availing. In Taylor AG Indus. v. Pure-Gro, 54 F.3d 555 (9th Cir. 1995), the Ninth Circuit considered a Federal Insecticide, Fungicide, and Rodenticide Act (“FIFRA”) lawsuit and declined to remedy the alleged poor performance of EPA administrators, holding:
[I]t is for the EPA Administrator, not a jury, to determine whether labelling and packaging information is incomplete or inaccurate, and if so what label changes, if any, should be made.... We think FIFRA leaves states with no authority to police manufacturers' compliance with the federal procedures.
Id. at 561. In SPI's lawsuit, though, there are no allegations that the EPA improperly granted FIGS regulatory approval; the issue is whether FIGS falsely advertised that its scrubs were certified by the EPA and FDA.[39] SPI's Lanham Act and UCL claims are intertwined, and the allegedly “unlawful” advertisements by FIGS are central to both claims.[40]
FIGS then states that arguments concerning EPA and FDA regulatory approval are irrelevant under Rule 401 because “[c]ompliance with FDA regulations neither disproves nor proves any element of [a] Lanham Act claim.” Pom Wonderful LLC v. Tropicana Prods., Inc., 2010 WL 11519185, at *3 (C.D. Cal. Nov. 1, 2010).[41] As with the previous case law that FIGS cites, the Pom Wonderful holding misses the point of the instant action; the question is not whether FIGS registered its scrubs with the EPA or FDA, but whether the regulations applied to FIGS and its marketing of its scrubs.[42] SPI's false advertising claims against FIGS are centered on the unauthorized statements and claims used by FIGS to promote its scrubs—including statements that legally required EPA or FDA approval prior to labeling—and, therefore, they are relevant to this lawsuit.
FIGS makes a last-ditch effort to convince the Court that allowing the jury to hear arguments about regulatory approvals “will require a separate mini-trial (or quasi-regulatory proceeding) that will confuse the issues, mislead the jury, and waste everyone's time.”[43] As stated above, SPI's Lanham Act and UCL claims largely overlap and are intertwined, and they rely upon the same false advertising allegations regarding the marketing of FIGS's scrubs. FIGS fears that:
dueling arguments and evidentiary presentations will effectively turn a false advertising suit into a mini-trial on whether FIGS adhered to various complicated regulatory requirements that would likely confuse the actual issue before the jury (whether FIGS engaged in false advertising) with an issue that is not before it (whether FIGS should have registered its scrubs).[44]
*7 Those fears are unfounded. SPI's argument that FIGS falsely advertised EPA/FDA-approved claims concerning its scrubs will be included in SPI's larger Lanham Act and UCL claims, and judicial economy dictates allowing those arguments to be heard all at once.[45] FIGS's Second Motion in Limine is DENIED.
3. Motion in Limine No. 3 [ECF No. 704]
FIGS next moves to prevent SPI from introducing any evidence, argument, or testimony at trial referencing unproduced “source documents” relating to FIGS's One-for-One Claim.[46] At issue is SPI's claim that FIGS's advertisement that it donated a set of scrubs for every set purchased was false and whether the documentary evidence and testimony supplied by FIGS was sufficient.[47] FIGS essentially argues the old adage that “the absence of evidence is not the evidence of absence” and asserts that SPI's reference to the unproduced source documents for its One-for-One Claim would be unfairly prejudicial against FIGS.[48]
This evidentiary dispute centers on Magistrate Judge Stevenson's order concerning the scope of discovery—a May 2020 ruling that FIGS was not required to produce specific evidence of its scrub donations other than the total number of scrubs donated and the list of countries to which FIGS donated the scrubs.[49] FIGS then produced the ordered documentation, which SPI challenged as insufficient. SPI moved to compel FIGS to produce additional source documentation to support the reported figures.[50] Magistrate Judge Stevenson denied that motion, concluding that SPI's request was disproportionate to the needs of the case.[51]
SPI filed another motion a year later to compel the production of the source documents, which was denied on similar grounds in August 2021.[52] Magistrate Judge Stevenson did order FIGS to produce a Rule 30(b)(6) witness to testify about the number of scrubs donated.[53] FIGS designated Devon Gago to testify as its Rule 30(b)(6) witness, and FIGS is bound by Gago's testimony.[54] SPI argues that it should be allowed to challenge the veracity of the evidence produced by FIGS, which is fundamental to its Seventh Amendment right to try the One-for-One Claim to the jury.[55]
FIGS's argument—that an adverse inference to the unproduced “source documents” would be prejudicial—is convincing. Typically, courts allow adverse inferences regarding unproduced documents only when parties are sanctioned for spoliation. See Akiona v. United States, 938 F.2d 158, 161 (9th Cir. 1991) (“Generally, a trier of fact may draw an adverse inference from the destruction of evidence relevant to a case.”). In Akiona, the Ninth Circuit held that parties should not be punished for their failure to produce documents in discovery that they were not at fault for destroying and that allowing an adverse inference with respect to the unproduced documents was reversible error. Id.
Here, FIGS produced all documentation required by Magistrate Judge Stevenson relating to SPI's One-for-One Claim, which SPI then contested through multiple motions to compel. The Court sees no reason to second-guess Magistrate Judge Stevenson's order, particularly when FIGS provided a Rule 30(b)(6) witness for SPI to depose, whose testimony binds FIGS in the instant action.[56] FIGS did not request the exclusion of Gago's testimony in its motion in limine, and SPI is fully entitled to challenge Gago's alleged “vague and unconvincing testimony” without adverse inference to the unproduced “source documents.”[57] A “conclusory, one-page document” may be unpersuasive to the jury that FIGS fulfilled its One-for-One Claim, but it is inappropriate for SPI to suggest that there are unproduced “source documents” that contain an evidentiary smoking-gun. To the extent that FIGS requests the exclusion of a reference at trial to unproduced “source documents,” the Motion is GRANTED.
4. Motion in Limine No. 4 [ECF No. 705]
*8 FIGS moves to restrict the introduction of evidence pertaining to FIGS's non-scrub products, because (1) SPI does not assert that other medical apparel products were the subject of the Challenged Claims; and (2) permitting SPI to introduce evidence about those products would distract and confuse the jury and would unduly prejudice FIGS.[58]
This Motion is easily denied, because SPI has expressly incorporated the non-scrub medical apparel in its Fifth Amended Complaint (the “ FAC”).[59] Not only does the FAC allege false and misleading advertisements for all FIGS products, but Magistrate Judge Stevenson also rejected FIGS's argument in her September 2019 order that “the claims and defenses at issue in the lawsuit are not limited to ‘scrubs’ per se [and] documents concerning other kinds of medical apparel FIGS may produce is relevant and proportionate to the needs of the case.”[60] Although FIGS may present evidentiary objections at trial relating to the relevance of non-scrub products, at this point is it premature to do so. Therefore, the Motion is DENIED.
5. Motion in Limine No. 5 [ECF No. 706]
In its Fifth Motion in Limine, FIGS requests that SPI be precluded from introducing at trial declarations by Vaidhyan and Smith, who are present or former employees of DowDuPont Inc. and Microban, Inc., respectively.[61] FIGS states that those declarations are inadmissible hearsay under Rules 801 and 802, and no hearsay exception applies.[62]
6. Motion in Limine No. 6 [ECF No. 707]
FIGS moves to preclude the introduction of four documents that allegedly contain investor-related communications on the basis that “[o]nly ‘commercial speech’ that is made ‘for the purpose of influencing consumers to buy defendant's goods or services’ is actionable under the Lanham Act.”[64] Coastal Abstract Serv., Inc. v. First Am. Title Ins. Co., 173 F.3d 725, 734–35 (9th Cir. 1999). FIGS argues that because the investor-related communications at issue cannot be characterized as commercial speech in false advertising claims, they have no probative value under Rule 401 or 402, and they should be excluded under Rule 403 because they will cause juror confusion.[65] Specifically, FIGS moves to exclude the following documents described as “Investor deck[s]”: (1) FIGS0034539, FIGS0034547; (2) FIGS0063447_DD1 at -63449; (3) FIGS0008268_DD1; and (4) FIGS0008943_DD1.[66]
In support of its contention that—as a matter of law—investor-facing communications cannot serve as commercial speech in Lanham Act actions, FIGS cites a plethora of authorities. See Genus Lifesciences Inc. v. Lannett Co., Inc., 378 F. Supp. 3d 823, 835 (N.D. Cal. 2019) (collecting cases); RPost Holdings, Inc. v. Trustifi Corp., 2012 WL 12952728, at *7–*8 (C.D. Cal. May 11, 2012); Tercica, Inc. v. Insmed Inc., 2006 WL 1626930, at *18 (N.D. Cal. June 9, 2006); Sigma Dynamics, Inc. v. E. Piphany, Inc., 2004 WL 2648370, at *3 (N.D. Cal. June 25, 2004); Cleary v. News Corp., 30 F.3d 1255, 1262–63 (9th Cir. 1994) (holding that California's Unfair Competition Law and False Advertising Law are “substantially congruent to claims made under the Lanham Act”).[67]
*9 In its Opposition, SPI does not cite a single authority holding that investor communications may serve as commercial speech in Lanham Act or UCL actions.[68] SPI essentially conceded that issue. Instead, SPI generally recites the elements of Lanham Act claims for false advertising and argues that those documents will be used to support its claims.[69] SPI also contends that not all of the documents at issue involved investors, but two of the four were exchanged with “brand builders”[70] and consultants.[71] None of those communications was directed at consumers though, and, therefore, they fail as a matter of law to support SPI's Lanham Act claims.
SPI cites Leatherman Tool Grp., Inc. v. Coast Cutlery Co., 823 F. Supp. 2d 1150 (D. Or. 2011), to support its argument that FIGS's strategy behind making false claims is relevant to the issue of materiality,[72] but a closer look at Leatherman Tool shows that the misleading statements were directed at consumers:
This comment shows that the consumer was swayed by the 440C steel description about Coast's product. Further, this is the type of reaction that David Brands, President of Coast, had hoped to achieve with the false statements about 440C steel and hardness .... Brands included these statements because he thought they would be important to the consumer and would distinguish Coast's products from competitors.
Id. at 1156 (emphasis added). Leatherman Tool does not rebut FIGS's legal argument because it concerned a CEO's statements to consumers, whereas SPI cannot show how FIGS was communicating its positions to consumers. Even if the documents at issue were aimed at brand builders and consultants, without a showing that those communications were aimed at consumers they cannot serve as commercial speech for Lanham Act purposes. Accordingly, FIGS's motion in limine is GRANTED to the extent that SPI seeks to use those documents at trial to support its Lanham Act or UCL claims.
7. Motion in Limine No. 7 [ECF No. 708]
In its Seventh Motion in Limine, FIGS requests the exclusion of all evidence related to the dismissed Blackstone Claims,[73] for two reasons: (1) evidence relating to the Blackstone Claims is irrelevant to the advertising claims; and (2) that evidence would be inadmissible character evidence if were to be introduced at trial. SPI opposes FIGS's motion by contending that, although the Blackstone-related claims were dismissed, the underlying facts are relevant to SPI's surviving claims.[74]
SPI begins by objecting to FIGS's motion in limine for overbreadth and lack of specificity,[75] but SPI later concedes that FIGS identifies the evidence that it seeks to exclude[76]:
The statements warranting exclusion include Exhibits 5 and 7 to the Deposition of Trina Spear (both of which are audio recordings that were transcribed in the deposition transcript) and related testimony. E.g., Joint Exhibit Part 63 at 11643–11655.[77]
FIGS also explains that the Blackstone Claims relate only to the following claims for relief, which have been dismissed: (3) Unfair Business Practices (against all Defendants); (6) Conversion; (7) Breach of Fiduciary Duty; and (8) Aiding and Abetting Breach of Fiduciary Duty.[78] The Court finds that the Blackstone Claims are sufficiently described.
*10 FIGS's then lays out four reasons why the Spear-related evidence is inadmissible character evidence: (1) SPI intends to use that evidence to impugn Spear's character;[79] (2) SPI cannot prove the Blackstone Claims, and, therefore, they fail as “other act” evidence under the Rule 404(b) exception;[80] (3) the probative value of the Blackstone Claims evidence is outweighed by its prejudice to FIGS;[81] and (4) use of the evidence to impeach Spear's character for truthfulness is inadmissible because it would require the introduction of extrinsic evidence.[82]
The Court is persuaded by FIGS's arguments because the surviving false advertising claims are unrelated to the Blackstone Claims.[83] SPI's allegations of theft of confidential materials may have supported a trade secret claim, or they might have been relevant to SPI's dismissed claims, but they are not relevant to commercial advertising or advertising statements. SPI maintains that Spear's alleged theft of confidential marketing information allowed FIGS to assert an unfair competitive advantage or false narrative about FIGS's origins, but at no point does SPI allege that those materials were used in commercial advertisements, nor does SPI show how they prove any of SPI's surviving claims.[84]
SPI then argues that it should be permitted to introduce the Blackstone Claims under the Rule 404 exception for opportunity, intent, preparation, or a plan.[85] “The ‘act’ in question is not ‘misappropriation,’ it is theft, conversion, and/or, at the least, asserting there was theft and receipt of valuable confidential information in order to create an air of credibility around FIGS.”[86] It is telling that SPI seeks to admit the Blackstone Claims to show conversion, which is precisely one of the claims that the Court dismissed. The Blackstone Claims are simply irrelevant to SPI's false advertising claims.
Additionally, FIGS is correct that SPI fails to meet the Ninth Circuit's test for “other acts” under Rule 404(b): (1) there must be sufficient proof for the jury to find that the defendant committed the other act; (2) the other act must not be too remote in time; (3) the other act must be introduced to prove a material issue in the case; and (4) the other act must, in some cases, be similar to the offense charged.” Holmes v. Harris, 2019 WL 12070347, at *2 (C.D. Cal. Oct. 4, 2019), aff'd, 845 F. App'x 604 (9th Cir. 2021) (citing United States v. Bibo-Rodriguez, 922 F.2d 1398, 1400 (9th Cir. 1991)). SPI did not assert a trade secret misappropriate claim, and it has admitted that the available evidence does not support such a claim.[87] The Court also finds that the alleged confidential material theft was too remote in time from the false advertising claims because the two did not temporally overlap, which causes SPI's argument to fail the second prong of the “other acts” test under Holmes.[88] Id. at *2.
In response to FIGS's position that Rule 403 permits the Court to exclude relevant evidence if its probative value is substantially outweighed by its prejudicial nature, SPI contends that: (1) FIGS used “Competitor Information” to copy SPI products; and (2) SPI needs to counter FIGS's fraudulent origin narrative.[89] Neither of those reasons supports the admission of the Blackstone Claims though, because neither is probative of SPI's remaining false advertising claims. As stated above, SPI did not make a trade secret misappropriation claim nor a patent infringement claim—FIGS's alleged copying of SPI products is not relevant to false advertising. Additionally, unless FIGS opens the door to the Blackstone Claims in its origin story, the relevance of that evidence is outweighed by its potentially prejudicial nature.
*11 Finally, FIGS asserts that Rule 608 precludes using extrinsic evidence to prove specific instances of a witness's conduct in order to impeach her character for truthfulness, and, therefore, the Blackstone Claims are inadmissible to attack Spear's character for truthfulness.[90] SPI counters that FIGS's request is premature, as trial has not yet begun, and that admission of character evidence is predicated by the witness's direct testimony.[91] Although SPI is correct that FIGS's or Spear's testimony could change this preliminary ruling, at this point evidence of the Blackstone Claims is barred by Rule 403; its admission would result in litigating collateral distractions. See Mims v. Fed. Express Corp., 2015 WL 12711651, at *9 (C.D. Cal. Jan. 15, 2015). Accordingly, FIGS's Seventh Motion in Limine is GRANTED.
8. Motion in Limine No. 8 [ECF No. 709]
In its Eighth Motion in Limine, FIGS seeks an order precluding SPI from introducing any argument, evidence, or testimony at trial referencing the “Silvadur Brand, Logo, Trademark Usage Guidelines” (the “Trademark Guidelines”) prepared by non-party Dow Chemical Company.[92] FIGS argues that the Trademark Guidelines are not probative of whether FIGS's statements about Silvadur are false or misleading,[93] nor are they probative of FIGS's intent or willfulness in disseminating false advertising.[94]
Central to FIGS's argument is that it was never licensed by Dow to use the Silvadur trademark, and, therefore, the Trademark Guidelines do not apply to its scrubs.[95] Because the Trademark Guidelines cannot prove the truth or falsity behind FIGS's advertised claims, FIGS maintains that they are at best irrelevant to SPI's action and at worse confusing to the jury and a waste of time.[96] Furthermore, FIGS states that the Trademark Guidelines actually contradict the science behind Silvadur and that testing shows that they possess anti-microbial qualities disavowed by the Trademark Guidelines—looking to the science and testing is the only relevant evidence that should be admitted.[97]
Although it would be remarkable for Dow to have inaccurately disavowed the antimicrobial properties of Silvadur in its Trademark Guidelines, the ability of FIGS to prove the antimicrobial properties of Silvadur at trial through its own scientific testing does not exclude the ability of SPI to rely on the Trademark Guidelines. Through interrogatories and depositions, Defendants FIGS and Spear relied on Dow's published descriptions of Silvadur for claims that “FIGS antimicrobial fabric reduces hospital-acquired infections by 66%.”[98] Spear also referenced “Silvadur guidance” at multiple points during her deposition when she was asked about the ability of FIGS's medical apparel to kill bacteria on contact.[99]
FIGS cannot rely on Dow's published guidance on Silvadur's antimicrobial properties and then disown it. FIGS may be correct that scientific testing has demonstrated that its claims about Silvadur are true, but SPI has relevant and admissible grounds for referencing the Trademark Guidelines. Unless and until SPI invokes the Trademark Guidelines for an inadmissible purpose at trial, this Motion is DENIED.
9. Motion in Limine No. 9 [ECF No. 715]
Next, FIGS seeks to exclude testimony at trial from SPI witnesses Deborah New and Aleisha Orr under Rule 37(c) because SPI did not disclose those witnesses until after the close of discovery and five months before trial.[100] In its Opposition, SPI stated its intention to refrain from calling New as a witness at trial, but SPI reserved its ability to call New as a rebuttal witness.[101] Accordingly, FIGS's Motion is GRANTED in part with regard to New.
*12 Orr is a different story. Rule 37(c)(1) provides that sanctions are warranted for failure to comply with Rule 26(a) in two specific situations. First, Rule 37(c)(1) essentially provides that if a witness is not disclosed by a party, then, as a sanction, that witness cannot testify on behalf of that party. See Fed. R. Civ. P. 37(c)(1) (“If a party fails to ... identify a witness as required by Rule 26(a),” the unidentified witness is not allowed to “supply evidence on a motion, at a hearing, or at a trial, unless the failure was substantially justified or is harmless.”). Next, Rule 37(c)(1) provides that if a party fails to disclose discoverable information—like documents or electronically stored information required by Rule 26(a)(1)(ii)—then the party cannot rely on that undisclosed information at trial. Id. (“If a party fails to provide information ... as required by Rule 26(a) ... the party is not allowed to use that information ... to supply evidence on a motion, at a hearing, or at a trial, unless the failure was substantially justified or was harmless.”).
Ninth Circuit caselaw interpreting Rule 37(c)(1) confirms that the exclusion of evidence under Rule 37(c)(1) is not appropriate if the “failure to disclose the required information is substantially justified or harmless.” Yeti by Molly, Ltd. v. Deckers Outdoor Corp., 259 F.3d 1101, 1106 (9th Cir. 2001). To that end, district courts have identified “[s]everal factors to guide the determination of whether substantial justification and harmlessness exist, including (1) prejudice or surprise to the party against whom the evidence is offered; (2) the ability of that party to cure the prejudice; (3) the likelihood of disruption of trial; and (4) bad faith or willfulness in not timely disclosing the evidence.” Liberty Ins. Corp. v. Brodeur, 41 F.4th 1185, 1192 (9th Cir. 2022) (citing Silvagni v. Wal-Mart Stores, Inc., 320 F.R.D. 237, 242 (D. Nev. 2017)).
Looking to the factors of whether substantial justification and harmlessness exist, FIGS raised many concerns about how long SPI has been prosecuting this case and how Orr was disclosed after the close of discovery, but it identified no particular prejudice that it would suffer or bad faith exhibited by SPI. While it is true that SPI disclosed Orr merely five months before trial, SPI only discovered the witness in April 2022, and FIGS made no attempt to depose Orr once she was disclosed in May 2022.[102]
Additionally, the inclusion of two previously undisclosed witnesses—Brian Kim and Katie Duke—by FIGS on its supplemented witness list weighs heavily against its instant Motion.[103] FIGS did not disclose those two witnesses until August 2022, and it engaged in the same conduct for which it now seeks to sanction SPI.[104] In a cases in which both parties failed to disclose witnesses pursuant to Rule 37(c)(1), the Ninth Circuit has upheld a district court that declined to impose sanctions and allowed the witnesses to testify. See Kelly v. MTS Inc., 5 F. App'x 755, *2 (9th Cir. 2001) (affirming district court's decision to admit the testimony of both parties' expert witnesses when both parties failed to disclose them and holding that the district court did not exceed its discretion in doing so). Accordingly, FIGS's Ninth Motion in Limine to exclude Orr's testimony is DENIED.
10. Motion in Limine No. 10 [ECF No. 715]
FIGS's final Motion in Limine is to exclude the March 3, 2022, examination of Seh Won Chun.[105] Chun is a Hyosung executive, and he was designated as a witness by Hyosung to testify in relation to SPI's Application for Issuance of Letters and Letters of Rogatory (the “ Application”) to authenticate the following:
• Hyosung should provide the purchase orders dated between 2013 and 2019 pursuant to which it sold scrubs to FIGS or intermediaries on behalf of FIGS.
• Hyosung should also provide the “Inspection Reports” specifying the antimicrobial treatment applied to the scrubs sold pursuant to each purchase order.
*13 • Hyosung should also provide the “Testing Reports” describing the testing of the materials used to manufacture the scrubs sold pursuant to each purchase order.[106]
SPI requested that the following questions be asked to authenticate the documents:
1. Did Hyosung receive this purchase order from an intermediary acting on behalf of FIGS on or about the date stated in the document?
2. Did Hyosung sell goods conforming to the purchase order from the intermediary acting on behalf of FIGS?
3. Did Hyosung treat the scrubs referenced in the related purchase order with the antimicrobial treatment referenced in the Inspection Report?
4. Did Hyosung manufacture products for FIGS made of the same materials as those tested in the testing report?[107]
At issue is whether the Application and Chun's interview by a South Korean court are admissible evidence. FIGS opposes their admission and argues that they are inadmissible hearsay under Rule 802.[108] FIGS makes four arguments: (1) Chun exceeded the scope of the Application and answered beyond the four questions provided by SPI; (2) SPI “procedurally foreclosed cross-examination” by not extending an invitation to FIGS to ask questions to Chun; (3) FIGS was not informed that the examination was occurring until May 12, 2022; (4) SPI failed to meet the production cut-off for the Application.[109]
Rule 28(b) governs depositions of persons in foreign countries, and “[e]vidence obtained in response to a letter of request need not be excluded merely because it is not a verbatim transcript, because the testimony was not taken under oath, or because of any similar departure from the requirements for depositions taken within the United States.” Fed. R. Civ. P. 28(b)(4). A party may use for any purpose the deposition of a witness if the court finds that the witness is more than 100 miles from the place of hearing or trial or is outside the United States, unless it appears that the witness's absence was procured by the party offering the deposition. Fed. R. Civ. P. 32(a)(4)(B).
In addition, Rule 804 governs exceptions to the hearsay rule when witnesses are unavailable. Rule 804(b)(1) concerns the admissibility of former testimony, and exceptions are made for testimony that:
(A) was given as a witness at a trial, hearing, or lawful deposition, whether given during the current proceeding or a different one; and
(B) is now offered against a party who had—or, in a civil case, whose predecessor in interest had—an opportunity and similar motive to develop it by direct, cross-, or redirect examination.
Fed. R. Evid. 804(b)(1).
Contrary to FIGS's assertions, Chun's deposition would be admissible under Rules 28(b) and 32(a)(4)(B), and, therefore, as an exception under Rule 804; Chun's testimony was obtained in response to the Application, and he is considered unavailable for trial in view of his residence in South Korea. FIGS objects that Chun's examination exceeded the scope of the Application and that FIGS was not able to cross-examine him, but that circumstance arose from the procedures under South Korean law. Courts in this Circuit have encountered similar cases, and in Fed. Trade Comm'n v. Qualcomm Inc., 2018 WL 6575550 (N.D. Cal. Dec. 12, 2018), the district court concluded that depositions taken pursuant to foreign law but in accordance with Rule 28 satisfied Rule 804(b)(1).
*14 Although FIGS objected to SPI's initial Application—which this Court issued over FIGS's objections—FIGS made no effort to add questions to the Letter of Request or to issue its own Application.[110] Furthermore, there are no indications that SPI took actions to prohibit FIGS from pursuing its own line of questioning with Chun.[111] FIGS had an independent business relationship with Hyosung, and it could have independently reached out to question Chun or to develop testimony in support of its case.[112]
Although FIGS objects that it was not given timely notice by SPI of Chun's deposition, SPI was similarly unaware and did not receive notice by the South Korean court.[113] Although Chun's deposition was not produced until six months after the production deadline, this Court acknowledged the difficulties of the international discovery process but issued the Application nonetheless.[114] FIGS points to no special prejudice because of that delay, and, as explained above, it could have taken steps to obtain discovery from Hyosung in parallel.
FIGS next objects that Chun did not possess personal knowledge of the matters to which he testified, and, as an unreliable witness, his testimony should be barred under Rule 602.[115] FIGS also points out that Chun's testimony contradicts statements made by other Hyosung employees and that those contradictions further highlight the need to exclude his testimony.[116] As a representative of Hyosung during the deposition though, Chun served as the equivalent of a Rule 30(b)(6) witness, which “explicitly requires [a company] to have persons testify on its behalf as to all matters known or reasonably available to it and, therefore, implicitly requires persons to review all matters known or reasonably available to it in preparation for the 30(b)(6) deposition. ” Bd. of Trustees of Leland Stanford Junior Univ v. Tyco Intern. Ltd., 253 F.R.D. 524, 526 (C.D. Cal. 2008) (quotation marks and citation omitted). Here, Chun reviewed the necessary records, made the necessary inquiries, and acted in the role of a representative of Hyosung.[117] Furthermore, and discrepancies and inaccuracies of Chun's testimony go to its weight rather than its admissibility. Consequently, FIGS's Tenth Motion in Limine is DENIED.
III. CONCLUSION
For the foregoing reasons, the Court hereby ORDERS as follows:
1. SPl's Third Motion in Limine is GRANTED.
2. SPI's First, Second, Fourth, and Fifth Motions in Limine are DENIED.
3. FIGS's First, Third, Sixth, and Seventh Motions in Limine are GRANTED.
4. FIGS's Second, Fourth, Fifth, Eighth, and Tenth Motions in Limine are DENIED.
5. FIGS's Ninth Motion in Limine is GRANTED in part and DENIED in part.
IT IS SO ORDERED.
Footnotes
Order 11:1-13:14.