Analysis of Elysium's Evidentiary Motions
Elysium has filed three motions in limine to exclude evidence that ChromaDex might offer at trial. Please:
1. Exclude Expert Testimony of Lance Gunderson
2. Exclude Expert Testimony of Carla Kagel
3. Exclude Evidence of Personal Conduct by Elysium Personnel
Let's take a look. (All the supporting evidentiary Exhibits are here.)
We saw with the summary judgment motions that Elysium wanted ChromaDex's trade secret claims dismissed because ChromaDex's expert did not say which damages came from which confidential breaches. I said that if this was a problem with ChromaDex's expert's testimony, summary judgment wasn't the right solution to that problem, BUT (I also said),
Elysium seems to have raised a legitimate question about how damages get calculated. Although summary judgment isn't the right answer, we don't know what the right answer is yet, and we're likely to see the question again at Motions in Limine...
And here we are in Motions in Limine, and as expected we see EXACTLY the same argument.
Elysium's general complaint is that you have to know which damage was caused by which theft, or else when the jury decides that some of the things stolen weren't trade secrets, you won't know how much damage was caused by the things that were trade secrets. Elysium rearticulates this theme many different ways.
I do think that Elysium is onto something here, but the problem is, it's not clear what.
Last round, they told us that this defect warrants summary judgment, which was clearly not the case -- their own authorities didn't even say that.
Now they say it requires exclusion of the expert report, which would seem to leave ChromaDex without any way of proving damages.
I don't know if that's true, though.
Maybe there is enough evidence in the expert report for the jury to draw a reasonable conclusion as to how much harm was caused by the trade secrets actually stolen and used, even if the expert doesn't connect every dot in every conceivable combination.
Or maybe it is permissible for the jury to conclude that without stealing at least one Trade Secret Elysium would not have been able to continue selling Basis, and so all the damages are the same, regardless of whether they stole 3 or 30 or 300 trade secrets to make the illegal thing happen. Because even though there are a hundred trade secrets, there is only one important result: competition with Mystery NR. I think that was Gunderson's point.
Or maybe the solution is to have Gunderson issue a new report that has enough detail to satisfy Elysium. That seems to be the solution favored by Judge Tigar in LivePerson. Elysium quotes LivePerson favorably, but inexplicably fails to reveal that Judge Tigar did not throw out the plaintiff's case, as Elysium intimates, but instead Judge Tigar allowed the same expert to issue a new report that was admitted into evidence.
ChromaDex seems to have identified 140 pieces of information that were allegedly wrongfully taken, and Elysium's suggestion that each one has to be valued individually, when in fact they get used in combination, is counterintuitive. And their further suggestion that if the plaintiff's proof of damages doesn't fit this counterintuitive form then the case gets thrown out seems to be wishful thinking.
I am expecting Cooley to burst through the saloon doors with guns blazing on this issue, and we'll wait to see what they say.
Caral Kagel is ChromaDex's expert on whether there was Acetamide in Niagen or Basis. Elysium is only upset about Kagel's supplemental report, and Elysium's complaint is technical: The supplemental report was not supplemental, but in fact introduced new information that should have been in the original report.
Apparently Kagel tested some old Niagen after she wrote her report. That was "new data" because it came into existence after the initial report was writen, and so ChromaDex issued a supplemental report.
Elysium says that new data could have and should have been created earlier and included in the initial report, and that Elysium was prejudiced because they did not have time to issue an expert report rebutting the methodology Kagel used in the supplemental testing.
At first glance, Elysium's complaint seems reasonable.
On the other hand, the supplemental report did in fact contain new data that was not in existence earlier, and I'm not sure that Elysium is prejudiced if their expert can challenge the methodology at trial.
We'll see what Cooley says.
We have no idea what Elysium is concerned about here, because all the Exhibits are entirely redacted. All we know is that:
In discovery, ChromaDex requested that Elysium produce documents relating to the parties’ claims and defenses and specifically requested the production of text messages from several of Elysium personnel. [REDACTED] The personal conduct reflected in these messages has nothing to do with the merits of this commercial litigation over alleged breach of contract and misappropriation of trade secrets. [REDACTED] And that is exactly how ChromaDex’s counsel has used these messages in the past. During depositions, ChromaDex’s counsel relentlessly questioned [REDACTED] The admission of these texts or any use of their contents at trial would be highly prejudicial to Elysium... (emphasis added)
The balance here is going to be PROBATIVE VALUE -- is this information relevant to help resolve the issues in the case -- versus PREJUDICIAL EFFECT, which would make it more difficult for the jury to evaluate the issues fairly.
For example, if there were evidence that in their spare time Elysium personnel took candy from babies, that would make a jury want to rule against them, but wouldn't be probative at all in terms of helping the jury decide whether either party had breached the Niagen supply contract.
That's what Elysium says is happening:
Here, there is a complete disconnect—really, a chasm—between the elements of the claims and the Personal Conduct Evidence.
Without knowing what the personal conduct evidence is, we have no way of evaluating whether Elysium is right about there being a chasm between the elements of the claims and the Personal Conduct Evidence.
I don't think that Elysium personnel were texting each other about their exploits in stealing candy or mistreating animals. I think it is FAR more likely that they were texting each other about their desires to destroy ChromaDex. Indeed, there is already some evidence of that in other text messages.
And if THAT is the kind of personal conduct that Elysium is trying to exclude, I'm not sure they will succeed, because Elysium's theory of the case has been from the start, and continues to be, that Elysium was an exemplary customer until ChromaDex lied to it in an attempt to cut Elysium out of the market and take Elysium's customers.
Elysium's most recent articulation of this theory occurs in last week's Summary Judgment motion, in which Elysium said,
Unbeknownst to Elysium, starting in 2015, ChromaDex had devised a plan to sell an NR-containing product directly to consumers, in competition with Elysium...ChromaDex intended to phase out its ingredient business – including by eliminating NR sales to customers, like Elysium...
If Elysium's theory of the case is that it should recover on its breach of contract claims because ChromaDex's breaches of contract were part of a nefarious plan to cut Elysium out of the market, and ChromaDex's theory of the case is that it should recover on its breach of contract claims because ELYSIUM was the one plotting to destroy ChromaDex and not the inverse, then text message showing who was trying to destroy whom and how and when are going to be highly probative of the factual issues in dispute, even if they are prejudicial.
But I am just speculating, because I don't know what the messages say. Maybe it is about Elysium personnel misbehaving at offsite retreats, or wearing out-of-fashion clothing, and for some reason Elysium is worried that ChromaDex will try to tell the jury about that in this case that involves theft of trade secrets and breach of contract.
We'll see what Cooley has to say.
Elysium might get all three of these motions granted, or they might all get denied. It's hard to say. Elysium seems to have valid points about both of the expert reports, but it's not as clear that the defects they identify warrant exclusion. As for the personal conduct information, it's entirely redacted, so we don't know, but my intuition is that Elysium is whistling past the graveyard when they suggest that the secret text messages are completely unrelated to the claims in the case.