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  • Shelly Albaum

Elysium's Rely Briefs on Evidentiary Issues


So now we have Elysium's Reply Briefs in support of its three evidentiary motions. You can read them here:

Of these, we're almost certainly going to be most interested in the Personal Conduct evidence, but let's look at them each in turn.

If you're just here for the personal conduct evidence, scroll down to "Personal Conduct Evidence."

But if you are a connoisseur of legal argument related to evidentiary issues, come with me.

Lance Gunderson Testimony

Lance Gunderson is ChromaDex's damages expert, and Elysium said his testimony has to be excluded because Mr. Gunderson did not apportion damages among the various trade secrets. ChromaDex says nuh-uh.

Elysium's primary point is:

Gunderson’s opinions are not just incorrect, but also based on an unsound methodology—calculating aggregate damages for each of ChromaDex’s claims arising from the totality of Elysium’s alleged wrongful acts— that renders them unhelpful to a jury, the Court should exclude them in accordance with its gatekeeper role.

However, we're already heard in ChromaDex's Opposition Brief why the methodology is permissible, and why the testimony is helpful to the jury. Does Elysium have anything new to add, or can it rebut ChromaDex's authority?

I don't think so. Elysium tries to distinguish all of ChromaDex's authority on the grounds that the trade secrets in question here are so wildly different that they could not possibly have caused the same damages, which was (allegedly) not the case in the authorities cited by ChromaDex.

But I don't think the argument works, because Elysium is mischaracterizing Gunderson's testimony. Gunderson didn't say that everyone one of the secrets caused the same damages. What Gunderson said was that if any single secret, or any combination of secrets stolen was sufficient to allow Elysium to stay in business when it otherwise would have had to stop selling its only product, then that single secret or group of secrets caused the damages.

In other words, Gunderson is not requiring the jury to determine that every secret was equally valuable, but only to determine whether any combination of wrongfully taken information allowed Elysium to stay in business. Therefore, it doesn't matter whether the secrets represent "widely disparate facts." It only matters whether they individually or in aggregate caused one particular harm.

Elysium next rearticulates its argument that Gunderson's "total failure to apportion or differentiate ChromaDex's alleged damages renders Gunderson's methodology fatally flawed," as if saying it enough times made it true.

I find highly disingenuous Elysium's argument that the Court's prior dismissal of ChromaDex's fraudulent deceit claim precludes recovery of damages for Elysium's false claim that it was "ramping up its business."

If you remember back two years ago, Elysium improperly used the Economic Loss Rule to knock out that claim. The Economic Loss Rule says that you can't turn contract damages into fraud damages, which is why ChromaDex is now pursuing these damages as part of its breach of contract claim, not its fraud claim. The Economic Loss Rule does not immunize fraud in the context of contractual relations. So ChromaDex is not attempting "an end-run around this Court's prior ruling." It is instead complying with the ruling. If Elysium's position were the law, then a written agreement would be a license to defraud. That's not the law, and I suspect even Baker Hostetler knows it.

Similarly confused is Elysium's assertion that "Elysium cannot be held liable for not making minimum purchases that were rendered impossible by virtue of ChromaDex's own conduct in terminating the NR Supply Agreement." Elysium casts this as a methodological error by Gunderson that requires exclusion of his testimony.

The methodological error, however, appears to be Elysium's. Why can't the expert consider anticipated order quantities from ChromaDex or projections given to Grace in trying to understand the alternate reality that allowed Elysium to sell a stolen version of ChromaDex's product without buying it at all? The damages are all the profits that went to Elysium and not to ChromaDex if Elysium's misdeeds allowed it to profit. Those damages aren't limited to ChromaDex's contractual obligation to pay for goods ordered. Regardless of whether these damages are couched as contract damages or trade secret damages, the number is the number, and these seem like good enough ways of determining it.

Carla Kagel Testimony

In the blizzard of filings, we actually did not get around to looking at ChromaDex's Opposition Brief on the Carla Kagel testimony. So here it is, belatedly:

CDXC Opposition Brief ISO Carla Kagel Testimony

ChromaDex's Argument

ChromaDex says, we didn't do anything wrong, and even if we did it wouldn't warrant exclusion of this report:

The premise of Defendants’ motion is that the July Report was not actually “supplemental,” but was, in fact, an additional report submitted past the deadline. Defendants are wrong. Dr. Kagel properly supplemented her report pursuant to Federal Rule of Civil Procedure 26(e) by using new information to fill in the gaps and interstices of her previous report. And, in any event, even if the July Report went beyond proper supplementation, any prejudice here is slight...

ChromaDex explains that Rule 26(e)

"not only anticipates that an expert’s report may need to be supplemented, it requires supplementation “if the party learns that in some material respect the disclosure or response is incomplete or incorrect, and if the additional or corrective information has not otherwise been made known to the other parties during the discovery process or in writing...Here, Dr. Kagel properly supplemented her report by incorporating data that was previously unavailable. She did not alter her prior opinions or apply a new methodology—but rather used the new information to fill in the gaps of her prior opinion about ChromaDex’s testing of raw NR. Thus, there is no basis to exclude the July Report.

ChromaDex characterizes Elysium's claim that the July Report introduces "entirely new opinions" as "empty hyberbole." Dr. Kagel simply added three pages to her report describing new data that jibed completely with her prior opinions; hence, nothing to exclude.

And as for prejudice,

"Defendants could have deposed her at any time; they just chose not to....In any event, if a deposition is what Defendants want, ChromaDex's offer is still on the table: ChromaDex will make Dr. Kagel available at a mutually acceptable time to answer questions about the July Report. This can and should end the dispute."

That might end the dispute, but it doesn't end the brief. This does:

[Elysium's] claim to have been sandbagged is facetious [ED: s/b "frivolous"?] and should be disregarded. Rather, Elysium’s goal is to keep relevant evidence away from the jury conclusively demonstrating that the NIAGEN it received from ChromaDex never had acetamide at the levels that Elysium’s faulty and knowingly invalid testing suggested. That is not a sufficient ground on which to exclude Dr. Kagel's testimony.

So what can Elysium possibly say to that?

Elysium's Reply Brief on Carla Kagel Testimony

Elysium's Argument

Elysium says that the information in the July Report could have been developed in time for the June Report, and therefore should be excluded. That doesn't seem to map to the words in the rule. It doesn't sound like the law. And without a showing of prejudice, it's hard to imagine how that argument wins the day.

Elysium lists all the ways in which it was allegedly prejudiced -- other kinds of discovery it might have done -- but the prejudice resulting from the lack of such discovery feels more theoretical than real.

Personal Conduct Evidence

And now we come to the main event. Here is the brief we really care about:

Elysium's Reply Brief on Personal Conduct

ChromaDex said that all that redacted misconduct in the redacted text messages goes to the credibility of Marcotulli and Alminana, which is the central issue in the case, so it has to be admitted. What does Elysium say?

Interestingly, even some of the case names and other authorities Elysium cites are redacted from this brief, apparently to prevent us from getting any inkling of the kinds of things discussed in the messages. Pretty prejudicial stuff, I guess.

There really appears to be a lot at stake. Elysium comes out breathing fire:

ChromaDex’s intended strategy of turning the trial of this case into a circus, with the irrelevant personal conduct of Elysium personnel in the center ring and the merits of the case relegated to a sideshow. The idea, of course, is to distract the jury from the business dispute that’s actually at issue by launching a sustained ad hominem attack on Elysium’s personnel, in particular Eric Marcotulli and Dan Alminana. The whole point is to enlist the jury’s passions against Elysium, encourage it to cast judgment on the case by introducing personal and private conduct on what is at most a collateral issue unrelated to the merits of any claim or defense, fatally prejudice Elysium, and inflict pain and punishment on Elysium and its personnel for their personal lives and even health issues. The Court should not allow itself to be used as a tool of personal destruction and should not allow its authority to be hijacked to preside over a mockery of justice.

I'm not convinced that that is "the whole point," but Elysium is signaling here that if this evidence gets admitted, they're dead.

I don't think I believe that, either, though. First, I think they're dead anyway, because the evidence in general is not falling in line with the story they told in their pleadings.

But second, I'm not convinced that the secret evidence is THAT prejudicial. All we really have to go on is Elysium's bare assertion that the sky will fall. They haven't given a hint as to why -- at least not where we can see it.

It is important to note, though, that we can't see hardly anything. This brief is so ridiculously redacted that even the citations are redacted. Even citations that are unredacted in prior briefs, like ChromaDex's Opposition brief, are redacted in this one. How crazy is that?

Check out the Table of Authorities:

Cases, and even secondary sources, are redacted. And not just a few. What's THAT about???

The short answer is, we don't know, can't know, and won't know, because the redaction pen was dragged wantonly (and, as we shall see, perhaps carelessly) throughout the brief. Check out the first page of argument:

Who knows what they are talking about? Not me. It says:

"ChromaDex cannot attack credibility or capacity with [REDACTED]. Presumably evidence of some sort, but there's no hint what type.

Or maybe there's a little hint.

There might even be enough clues in the brief to make some educated guesses.

For example, the phrase in the heading that has been redacted is very short. What phrase would be short enough to fit under that short black redaction bar, and still potentially make sense? "Banana" is the right length, but would make no sense. What about... "Drug Use"?

Maybe.

Then we have this:

What is it that might affect a witness's memory or perceptions, but courts have recognized that expert testimony would be required to show that?

Hard to say. Drug use? Possibly a blow to the head?

It's once again time to pay the Match Game!

Hardly definitive. "Evidence of Dog Food" would fit just as well.

And yet, the more Elysium protests, the more they give of what they are protesting against. For example, we have footnote 6 in Elysium's brief, which says:

Does that footnote make you wonder what is on Page 23 of ChromaDex's Opposition Brief? Me too. Let's take a look.

Oh, I bet the thing that Elysium is not liking is this, on the bottom of Page 23:

But the roadmap really snaps into focus when Elysium reviews ChromaDex's cases. Here is an example:

In the Brief excerpt above, Elysium tells Judge Carney that ChromaDex has cited "this Court's decision" -- that is, Judge Carney's decision -- in a products liability case involving burns, and a relevant part is found on Page 911.

Let's just check back to the Table of Authorities in ChromaDex's Opposition Brief and see how many cases ChromaDex cited that were products liability cases involving burns written by Judge Carney and published somewhere around page 911 of a case reporter...let's see...

Oh! Just one!

Elysium is apparently directing our attention to

What happened in Englebrick v. Worthington that might have caused ChromaDex to find it relevant to OUR case, even though Englebrick involves products liability? Here's what Judge Carney wrote in that case:

...Plaintiffs repeatedly lied under oath during the entire pretrial process about their extensive meth use and addiction...It is now impossible for the Court to believe a word that Plaintiffs have to say at trial...

Interesting -- case turned out to involve evidence of drug use.

Continuing to draw us a road map, Elysium says that most of the other cases ChromaDex cites on this issue are claims against police officers for the use of excessive force when arresting. Arresting...for what? What kind of evidence might have been involved in those cases?

We COULD look at all these cases that ChromaDex cites to see what's going on in each one, or we could just randomly choose the one where Elysium left a partial cite unredacted; Elysium's brief reads as follows:

"ChromaDex cites dicta from United [REDACTED]...but it ignores the Seventh Circuit's holding that the district court properly excluded evidence of [REDACTED] Id. at 405."

Back to the Table of Authorities in ChromaDex's Opposition Brief:

How many cases did ChromaDex cite in which the first named party begins with "United," the case is on appeal from the Seventh Circuit, and one of the published reporter pages is 405?

Just one!

What evidence is United States v. Cameron discussing the exclusion of on page 405?

"...the defense sought to impeach Yeatts' credibility by introducing evidence that Yeatts had used the hallucinogenic drug LSD. The defense's theory was that evidence of drug use is probative of credibility because individuals who use illegal drugs are engaged in “a lifestyle of crime and disrespect for law” and, therefore, are likely to have no compunction about lying under oath. The district court refused to admit evidence of Yeatts' prior drug use for this purpose. The court did, however, offer to allow the defense to introduce evidence of the effect that Yeatts' drug use might have had on his memory..."

Hard to know what to make of that.

Elysium says, "In sum, the authorities cited by ChromaDex are plainly inapposite to this case."

Maybe that's because all of the authorities cited by ChromaDex involve evidence of drug use, and the personal conduct in this case is something else? There's no way for us to know.

But IF this is just about drug use, geez, this trial is being held in California. California INVENTED recreational drug use. The New York Times writes about the pervasiveness of LSD microdosing in Silicon Valley. Big deal. They got me all excited.

Okay, that was fun, but let's get serious.

Does Elysium have a good argument to exclude whatever this personal conduct evidence is?

The thrust of Elysium's argument is that this evidence (1) is insanely prejudicial, (2) it's not relevant to any of substantive issue in the case, (3) ChromaDex can't use it to suggest impaired memory without expert testimony that does not yet exist, and that (4) it is also inadmissible to impeach the witnesses because it is forbidden impeachment on a collateral matter.

I can't even guess. We can't see all the kinds of misconduct at issue (even though we might make a very rough guess about one of them). We don't know whether to believe Elysium when they say it's not relevant, or that ChromaDex didn't explain the relevance, because ChromaDex's brief contained redactions, too.

There is a rule about impeachment on collateral matters -- the fact that someone lied about stealing apples from their neighbors' tree doesn't mean they can't be trusted when they say that they were told expressly that in order to buy a health supplement ingredient they had to pay for the trademarks instead of pay for the supplement itself.

But for all we know, the personal conduct in question is highly probative of whether the defendants might grow agitated, angry, and aggressive, and "declare war" on ChromaDex in ways that are entirely consistent with ChromaDex's story of the case, and the opposite of Elysium's story that they were trustworthy partners and exemplary customers.

So there's no WAY I'm making a guess on this one.

And I wish that we would be entitled to a surrebuttal brief in which ChromaDex might answer Elysium's assertions on collateral impeachment, because I'd be curious to know.

But it is not to be.

We'll have to content ourselves with the knowledge that this dispute is on the front burner for Judge Carney and a ruling is coming sooner rather than later.

However, if I might engage in a little collateral impeachment myself, I would bring your attention to Elysium's Footnote 3:

Is Elysium no longer thinking in straight lines? ChromaDex speculates that it was Marcotulli's idea to place a large supply order, but it is undisputed that Alminana placed the order. How on earth does the fact that Alminana placed the order refute ChromaDex's speculation that it was Marcotulli's IDEA to do so? If this is representative of the quality of the parts of the brief we can't see, there might be issues.

Then in the following sentence, Elysium complains that "Chromadex never even questioned Mr. Marcotulli about the "CDXC idea" at his deposition. The significance of this alleged failure is unclear to me, but it IS clear to me that ChromaDex ran out of time at the end of the Marcotulli deposition, and that just MIGHT have been because Marcotulli was not forthcoming in his responses. Moreover, even if ChromaDex had asked the question, we can all recite in unison what Marcotulli's response would have been: "I don't recall." So to the extent that Elysium is trying to extract some substantive significance from the failure to ask the question, it seems like the inference would be unconvincing.

We'll see what Judge Carney says.

#CDXC #ChromaDex #ElysiumHealth #Litigation

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