Complete Entertainment Resources LLC v. Live Nation Entertainment, Inc. et al

REPLY in Support of NOTICE OF MOTION AND MOTION to Exclude Testimony of Plaintiff's Damage Expert David Yurkerwich 278 [Redacted]

C.D. Cal.October 9, 2017

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ATTORNEYS AT LAW SAN FRANCISCO DEFS. AND COUNTER-CLAIMANT’S REPLY ISO MOT. TO EXLCUDE TESTIMONY D. YURKERWICH CASE NO. 2:15-CV-09814 DSF (AGRX) LATHAM & WATKINS LLP Daniel M. Wall (SBN 102580) dan.wall@lw.com Timothy L. O’Mara (SBN 212731) tim.o’mara@lw.com Andrew M. Gass (SBN 259694) andrew.gass@lw.com Kirsten M. Ferguson (SBN 252781) kirsten.ferguson@lw.com 505 Montgomery Street, Suite 2000 San Francisco, California 94111-6538 Telephone: +1.415.391.0600 Facsimile: +1.415.395.8095 Attorneys for Defendant Live Nation Entertainment, Inc. and Defendant and Counter-Claimant Ticketmaster LLC UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA WESTERN DIVISION JUDICIAL DISTRICT Complete Entertainment Resources LLC d/b/a Songkick, Plaintiff, v. Live Nation Entertainment, Inc.; Ticketmaster LLC, Defendants. CASE NO. 2:15-CV-09814 DSF (AGRX) DEFENDANTS AND COUNTER- CLAIMANT’S REPLY IN SUPPORT OF MOTION TO EXCLUDE TESTIMONY OF PLAINTIFF’S DAMAGE EXPERT DAVID YURKERWICH The Honorable Dale S. Fischer Date: October 23, 2017 Time: 3:00 p.m. Place: Courtroom 7D REDACTED VERSION OF DOCUMENT PROPOSED TO BE FILED UNDER SEAL Ticketmaster LLC, Counter-Claimant, v. Complete Entertainment Resources LLC d/b/a Songkick, Counter-Defendant. Case 2:15-cv-09814-DSF-AGR Document 382 Filed 10/09/17 Page 1 of 16 Page ID #:53343 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 AT T ORNEYS AT LAW SAN FRA NCI SCO i DEFS. AND COUNTER-CLAIMANT’S REPLY ISO MOT. TO EXLCUDE TESTIMONTY D. YURKERWICH CASE NO. 2:15-CV-09814 DSF (AGRX) TABLE OF CONTENTS Page INTRODUCTION .................................................................................................... 1 ARGUMENT ............................................................................................................ 3 I. MR. YURKERWICH’S ESTIMATE OF LOST PROFITS IS UNSUPPORTED BY ANY SOUND METHODOLOGY ............................ 3 A. Mr. Yurkerwich Has No Basis For Grounding His Analysis In The Loss Of 139 Identified Artists ................................... 3 B. Mr. Yurkerwich’s “Probability of Success Factors” Are Baseless ................................................................................................ 7 C. Mr. Yurkerwich Measures Harm From Conduct Not At Issue...................................................................................................... 9 II. MR. YURKERWICH’S ESTIMATE OF LOST BUSINESS VALUE IS UNSUPPORTED BY ANY SOUND METHODOLOGY ....................................................................................... 10 III. MR. YURKERWICH’S ESTIMATE OF UNJUST ENRICHMENT IS UNSUPPORTED BY ANY SOUND METHODOLOGY ....................................................................................... 11 CONCLUSION ....................................................................................................... 12 Case 2:15-cv-09814-DSF-AGR Document 382 Filed 10/09/17 Page 2 of 16 Page ID #:53344 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 AT T ORNEYS AT LAW SAN FRA NCI SCO ii DEFS. AND COUNTER-CLAIMANT’S REPLY ISO MOT. TO EXLCUDE TESTIMONY D. YURKERWICH CASE NO. 2:15-CV-09814 DSF (AGRX) TABLE OF AUTHORITIES Page(s) CASES Ayers v. Robinson, 887 F. Supp. 1049 (N.D. Ill. 1995) ....................................................................... 2 Bigelow v. RKO Radio, 327 U.S. 251 (1946) ............................................................................................. 9 Blue Cross & Blue Shield of N.J., Inc. v. Philip Morris, Inc., 141 F. Supp. 2d 320 (E.D.N.Y. 2001) ................................................................ 11 City of Vernon v S. Cal. Edison Co., 955 F.2d 1361 (9th Cir. 1992) ............................................................................ 10 Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579 (1993) .................................................................................... passim ID Sec. Sys. Canada v. Checkpoint Sys, 249 F. Supp. 2d 622 (E.D. Pa. 2003).................................................................... 6 Microstrategy Inc. v. Bus. Objects, S.A., 429 F.3d 1344 (Fed. Cir. 2005) .......................................................................... 11 Stokes v. John Deere Seeding Grp., 2014 WL 675820 (C.D. Ill. Feb. 21, 2014) .......................................................... 2 U.S. Football League v. NFL, 842 F.2d 1335 (2d Cir. 1988) ............................................................................... 9 RULES Fed. R. Evid. 702 .............................................................................................. passim Fed. R. Evid. 703 .............................................................................................. passim TREATISES 29 Charles Alan Wright et al., Federal Practice and Procedure § 6264.2 (online ed. 2017) .................................................................................... 5 29 Charles Alan Wright et al., Federal Practice and Procedure § 6274 (online ed. 2017) ....................................................................................... 6 Case 2:15-cv-09814-DSF-AGR Document 382 Filed 10/09/17 Page 3 of 16 Page ID #:53345 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 AT T ORNEYS AT LAW SAN FRA NCI SCO 1 DEFS. AND COUNTER-CLAIMANT’S REPLY ISO MOT. TO EXLCUDE TESTIMONTY D. YURKERWICH CASE NO. 2:15-CV-09814 DSF (AGRX) INTRODUCTION Songkick, seeking a multi-billion dollar treble damages award, has zero non- hearsay evidence that any artist refused to do business with it on account of something Defendants did. It is trying to make up for that failure of proof by having Mr. Yurkerwich—an accountant with no arguable expertise in determining causation—talk to Songkick’s self-interested employee-shareholders, take whatever they say about why 139 musicians did not work with Songkick (and how that was the Defendants’ fault), run it through a numerical formula for predicting causation that Mr. Yurkerwich simply made up, and then estimate damages. The issue presented by this motion is whether that expert testimony is admissible under Rules 702 and 703 and Daubert. It is not. Mr. Yurkerwich’s testimony fails to satisfy the standard of Rule 702, which requires that an expert testify on the basis of expertise in the field on which he is opining. The Court should not let an accountant’s view of causation go to the jury—especially one based on nothing more than the most unreliable hearsay. Mr. Yurkerwich’s testimony also fails to satisfy the standard of Rule 703, which requires that expert opinions be based on “those kinds of facts or data” that “experts in the particular field would reasonably rely on.” Accountants don’t just take an interested party’s word for something, and without more run with it. Moreover, Mr. Yurkerwich’s formula for capturing the probability of loss is quintessential “junk science,” constructed to appear scientific when there is no science to it whatsoever. It is plainly inadmissible under Daubert. Songkick’s principal response is pure misdirection. While this is a Daubert motion based on evidentiary principles, Songkick seeks refuge in the standard of proof that applies to antitrust damages generally. Its argument is essentially that because antitrust damages claims are subject to a relaxed standard of proof, antitrust damages experts can testify to pretty much anything once they establish that the plaintiff was harmed in any way at all. That is absurd, of course. “High” Case 2:15-cv-09814-DSF-AGR Document 382 Filed 10/09/17 Page 4 of 16 Page ID #:53346 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 AT T ORNEYS AT LAW SAN FRA NCI SCO 2 DEFS. AND COUNTER-CLAIMANT’S REPLY ISO MOT. TO EXLCUDE TESTIMONY D. YURKERWICH CASE NO. 2:15-CV-09814 DSF (AGRX) or “low,” the applicable standard of proof can be met only with admissible evidence, and if that evidence is expert testimony, it needs to pass muster under Rules 702 and 703 and under Daubert. There is no loophole that allows Songkick to sponsor methodologically unsound expert testimony. Songkick also makes the usual plaintiff’s argument that Mr. Yurkerwich’s damages estimates are “conservative,” as if that cures all possible deficiencies. First, there is nothing conservative about Mr. Yurkerwich’s approach or calculations, which estimate hundreds of millions of dollars in losses for a tiny company that never turned a profit. Nor is it “conservative” for an expert to claim that a certain loss has a probability lower than some other equally arbitrary number he might have picked. Regardless, “the fact that an opinion is conservative does not make it scientific” or “validated by reliable methods.” Stokes v. John Deere Seeding Grp., 2014 WL 675820, at *4 (C.D. Ill. Feb. 21, 2014); Ayers v. Robinson, 887 F. Supp. 1049, 1060–61 (N.D. Ill. 1995) (“Someone who states on the basis of a dull pain in his right knee that he thinks it is going to rain less than .1 inch expresses a conservative, but surely unscientific opinion.”). Mr. Yurkerwich’s testimony lacks any scientific basis, and is therefore inadmissible. Songkick further argues that the Court need not intervene because Mr. Yurkerwich’s damages model is “modular,” allowing the jury to make adjustments if they do not believe, for example, that Songkick lost an artist due to Defendants’ unlawful conduct. Once again, the premise of this argument is false. Mr. Yurkerwich has not separately calculated Songkick’s lost profits artist-by-artist, but rather has used data for all 139 artists to calculate various average statistics that drive all of his calculations. There is no way a jury could “back out” anything except through sheer guesswork. But more importantly, it turns Daubert upside down to say that the jury could fix things, since the core Daubert policy, now embodied in Rule 702, is that courts must act as gatekeepers to ensure that unreliable expert testimony never gets to the jury. Case 2:15-cv-09814-DSF-AGR Document 382 Filed 10/09/17 Page 5 of 16 Page ID #:53347 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 AT T ORNEYS AT LAW SAN FRA NCI SCO 3 DEFS. AND COUNTER-CLAIMANT’S REPLY ISO MOT. TO EXLCUDE TESTIMONY D. YURKERWICH CASE NO. 2:15-CV-09814 DSF (AGRX) ARGUMENT I. MR. YURKERWICH’S ESTIMATE OF LOST PROFITS IS UNSUPPORTED BY ANY SOUND METHODOLOGY A. Mr. Yurkerwich Has No Basis For Grounding His Analysis In The Loss Of 139 Identified Artists The foundation of Mr. Yurkerwich’s testimony is the group of 139 artists that he claims were lost to Songkick due to the Defendants’ conduct. Not only does he opine that Defendants’ wrongdoing caused these particular lost business opportunities, but he uses the group in the aggregate to calculate various averages and multipliers (such as the average sell-through rate for concert tickets specifically for the artists on this list) that affect all of his damages calculations. See Decl. of W. Friedman in Supp. of Defs’ Mot. to Exclude Testimony (“Friedman Decl.”) Ex. 1, Expert Report of David Yurkerwich (“Report”) ¶¶ 87, 93 & Exs. 9.1, 9.4, ECF 277-3. Without a proper basis to create and use that group as he does, Mr. Yurkerwich’s testimony collapses. The first problem is that Mr. Yurkerwich is attempting to offer an expert opinion on causation. See Decl. of A. Gass in Supp. of Defs.’ Reply in Supp. of Mot. to Exclude Testimony (“Gass Decl.”) Ex. 1, D. Yurkerwich Dep. (“Dep.”) at 20:5-8, 20:15-17 (“Q. [A]re you offering an opinion in this case regarding whether Live Nation or Ticketmaster’s conduct caused Songkick’s alleged damages? … A. So based on my review of the business activity, it would appear that -- to me that Live Nation has caused harm to Songkick.”). He testified: “[B]ased on reviewing the information that was available … I made a determination whether there was a reasonable basis to include them in the analysis.” Dep. at 94; see also id. at 106:7- 16 (“I did an independent analysis and looked at contemporaneous information and made a judgment as to whether it was reasonable to include” the artist). These opinions—about why we are talking about these 139 artists in the first place—must reflect a sound, scientific methodology, consistent with professional Case 2:15-cv-09814-DSF-AGR Document 382 Filed 10/09/17 Page 6 of 16 Page ID #:53348 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 AT T ORNEYS AT LAW SAN FRA NCI SCO 4 DEFS. AND COUNTER-CLAIMANT’S REPLY ISO MOT. TO EXLCUDE TESTIMONY D. YURKERWICH CASE NO. 2:15-CV-09814 DSF (AGRX) standards in a relevant field, undertaken by someone with the expertise to make these determinations. See Fed. R. Evid. 702. They do not. Mr. Yurkerwich has no relevant expertise for this task at all. He is not an expert in artist presale ticketing. See Dep. at 22:7-23:1, 44:19-45:13. He professes no expertise in the live entertainment field, let alone special knowledge about why bands might choose to do business with one service provider rather than another. He is an accountant by training. His selection of artists is thus replete with substantive conclusions about the alleged mechanism of harm that make no sense at all. He concludes, for example that Songkick is entitled to profits it would have earned by conducting presales for the artist Beyoncé, but for a harmed relationship with her. Report ¶ 49 & Ex. 9.5 at 55. The source of that harmed relationship, according to Mr. Yurkerwich, is that Live Nation has a relationship with the artist Jay-Z, and Jay-Z in turn has a relationship with Beyoncé. Id. What kind of relationship—and what could it possibly have to do with the issues in this case? At his deposition, Mr. Yurkerwich couldn’t say; he did not know how Jay-Z and Beyoncé were related at all, when it is common knowledge that they are married (and his Report says so).1 This accountant is therefore opining, in substance, that Defendants owe Songkick damages because Live Nation’s relationship with Jay-Z soured his wife on Songkick. Later, he even assigns a numerical probability (75%) to the odds that this relationship he did not know about caused Songkick to lose business. Report ¶ 83. Mr. Yurkerwich’s lack of appropriate expertise to offer the causation 1 Dep. at 109:15-110:4 (“Q: Did Beyonce in 2016 tour with Jay Z? A: I mean, I’m not sure. Q: Isn’t that relevant? A: Well, I think the Jay Z/Beyonce relationship is relevant, and I believe I have written about it elsewhere in one of these reports. Q: And what do you believe that relationship is? A: Let’s see. So I’m not finding it at the moment. … I mean, I can only say that my understanding is that there is a relationship between Beyonce and Jay Z such that Jay Z influences Beyonce’s presales.”). Case 2:15-cv-09814-DSF-AGR Document 382 Filed 10/09/17 Page 7 of 16 Page ID #:53349 Case 2:15-cv-09814-DSF-AGR Document 382 Filed 10/09/17 Page 8 of 16 Page ID #:53350 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 AT T ORNEYS AT LAW SAN FRA NCI SCO 6 DEFS. AND COUNTER-CLAIMANT’S REPLY ISO MOT. TO EXLCUDE TESTIMONY D. YURKERWICH CASE NO. 2:15-CV-09814 DSF (AGRX) Despite that obvious conflict of interest, Songkick seeks to present these interested opinions to a jury dressed up under the guise of expert analysis. “Rule 703 provides that expert opinions based on otherwise inadmissible hearsay are to be admitted only if the facts or data are ‘of a type reasonably relied upon by experts in the particular filed in forming opinions or inferences upon the subject.” Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579, 595 (1993). “[C]ourts have used Rule 703 to reject expert opinion where it is based on … uncorroborated hearsay from biased witnesses.” Wright & Miller § 6274. An expert in the “particular field” that is relevant here—assessing the reasons why some of the biggest acts in the world like U2, Madonna, Guns ‘N’ Roses, Beyoncé, and Jay-Z chose not to conduct artist presales through a start-up company—would not base his report on the self-interested answers to interview questions by employees of the allegedly spurned company, reporting what someone allegedly told them about those artists’ interest in Songkick. Mr. Yurkerwich’s effort to do so violates Rule 703. See, e.g., ID Sec. Sys. Canada v. Checkpoint Sys, 249 F. Supp. 2d 622, 694–96 (E.D. Pa. 2003) (excluding expert opinion when only basis for lost profits was the financial projections of the Plaintiff’s president). Finally, Songkick argues that the Court need not intervene because Mr. Yurkerwich’s damages model is “modular,” allowing the jury to correct any problems by backing out the damages for artists who (despite his testimony) were not lost to Songkick by unlawful acts. This is simply not the case. Mr. Yurkerwich has not separately calculated Songkick’s lost profits by artist, such that a jury could make yes/no decisions and tally up the damages thereafter. He has calculated aggregate lost profits for six groups of the at-issue artists through the application of various average statistics, derived from studying the 139 at-issue artists as a whole. See Report ¶¶ 87, 93 & Exs. 9.1, 9.4 (deriving sell-through rate, and other key metrics that are used to calculate the ultimate damages figure, by reference to data from the full suite of 139 artists). Songkick cannot point to any Case 2:15-cv-09814-DSF-AGR Document 382 Filed 10/09/17 Page 9 of 16 Page ID #:53351 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 AT T ORNEYS AT LAW SAN FRA NCI SCO 7 DEFS. AND COUNTER-CLAIMANT’S REPLY ISO MOT. TO EXLCUDE TESTIMONY D. YURKERWICH CASE NO. 2:15-CV-09814 DSF (AGRX) “schedule,” back-up data, or other document that actually lists how much money it claims was lost from, say, Beyoncé—because he did not in fact conduct that analysis. As a result, any removal of a specific artist necessitates a complete re- running of Mr. Yurkerwich’s entire analysis. The jury certainly could not do so. B. Mr. Yurkerwich’s “Probability of Success Factors” Are Baseless Mr. Yurkerwich’s “probability of success factors” are a key step in his analysis. He divides the 139 artists into six categories, and then assigns probabilities to each category reflecting how likely he thinks it is that Defendants caused Songkick to lose the business of the artists in each category. Importantly, Mr. Yurkerwich testified that the probabilities are “intended to account for the possibility that an artist may not have ended up doing a presale for some reason unrelated to Ticketmaster, or Ticketmaster’s interference, and/or the possibility that Songkick would not have won the business[.]” Dep. at 157:7-12. In other words, in express recognition of the fact that Songkick’s failure to win the 139 artists’ business could have been the product of lots of things other than wrongdoing by Defendants, Mr. Yurkerwich’s analysis includes a numerical opinion on the probability of causal loss. The opening brief on this motion explained why Mr. Yurkerwich’s “probability of success factors” are essentially random—just numbers plucked from thin air, with no discernible methodology to support them. Mem. in Supp. of Defs.’ Mot. to Exclude Testimony (“Opening Br.”) at 16-18, ECF No. 277-1. In opposition, Songkick has not meaningfully contested that point. Instead, Songkick says, there is no problem here because these are “discounts,” meaning factors that reduce damages, and as such basically just a gift to Defendants. If we don’t like them, we can give them back, Mr. Yurkerwich can opine on his damages calculations without applying the “discounts” at all, and Defendants can be on the hook for $2.5 billion, not $1.8 billion. Pl.’s Opp’n to Defs.’ Mot. to Exclude Case 2:15-cv-09814-DSF-AGR Document 382 Filed 10/09/17 Page 10 of 16 Page ID #:53352 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 AT T ORNEYS AT LAW SAN FRA NCI SCO 8 DEFS. AND COUNTER-CLAIMANT’S REPLY ISO MOT. TO EXLCUDE TESTIMONY D. YURKERWICH CASE NO. 2:15-CV-09814 DSF (AGRX) David Yurkerwich (“Opp.”) at 17-18, ECF No. 335-1. The probability of success factors are not “discounts.” They are a core step in the analysis Mr. Yurkerwich uses to quantify the lost ticket sales that are attributable in his view to Defendants’ wrongdoing. For example, Mr. Yurkerwich estimates that there are approximately 8.6 million tickets related to the 35 artists that might have been affected by what he calls “LN/TM Relationship/Restrictions.” But, he says, it is only 75% likely that Songkick’s failure to sell those tickets was Defendants’ fault. Report ¶ 83. So to quantify the damages he says Songkick is entitled to in this litigation, he opines that Defendants caused Songkick to lose profits on 6.45 million tickets. Report Ex. 9.0. He thus uses the probability factors as a core driver of the number of tickets he says Songkick is entitled to be compensated for failing to sell. The questions therefore are whether Mr. Yurkerwich (a) is qualified to testify and (b) had a proper foundation for testifying that 6.45 million tickets in this category were lost to Songkick because of Defendants’ conduct. Not a chance. For one thing, he has no expertise at all that would justify having him present the jury with his perspective on that question. For another, he employed no remotely sound methodology to generate his answer. Keep in mind that Mr. Yurkerwich claims these factors are meant to “account[] for the possibility that all 139 artist- clients may not have ultimately had presales with Songkick for reasons other than Defendants’ conduct.” Friedman Decl. Ex. 3, Reply Expert Report of David Yurkerwich (“Reply”) ¶ 18 (emphasis added). He therefore is really opining on two things without foundation: first, that the probability of loss due to wrongdoing is very high (e.g., 75% or 90%); and second, that the probability of an innocent explanation for the loss is very low (e.g., 25% or 10%). He has no basis or scientific technique for addressing either side of that coin. Songkick attaches great significance to the suggestion that Mr. Yurkerwich is certain (they say) that it is at least more likely than not that Defendants’ Case 2:15-cv-09814-DSF-AGR Document 382 Filed 10/09/17 Page 11 of 16 Page ID #:53353 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 AT T ORNEYS AT LAW SAN FRA NCI SCO 9 DEFS. AND COUNTER-CLAIMANT’S REPLY ISO MOT. TO EXLCUDE TESTIMONY D. YURKERWICH CASE NO. 2:15-CV-09814 DSF (AGRX) interference was the cause of these artists’ choice not to do business with Songkick. See Opp. at 8; Reply ¶ 18. The theory here seems to be grounded in the “relaxed” standard of proof applicable to the amount of damages under cases such as Bigelow v. RKO Radio, 327 U.S. 251 (1946). In the first place, that standard does not apply to the requirement to show causation at all. See U.S. Football League v. NFL, 842 F.2d 1335, 1378 (2d Cir. 1988) (“Whatever latitude is afforded antitrust plaintiffs as to proof of damages … is … circumscribed by the need for proof of causation.”). And more to the point, it does not provide any kind of license for expert testimony that runs afoul of Rules 702 and 703, or Daubert. But in any event, there is no remotely sound basis for Mr. Yurkerwich to assert a 51% probability of loss either. The problem here is not that he is an expert qualified to opine on 51% probabilities but not 75% or 90% probabilities, and with a foundation sufficient to address the former but not the latter. Mr. Yurkerwich’s testimony is wholly outside his expertise, and there is no reasoned methodology whatsoever behind his selection of probabilities, let alone one that satisfies Daubert’s strictures. C. Mr. Yurkerwich Measures Harm From Conduct Not At Issue In the Opening Brief, Defendants explained that yet another problem with Mr. Yurkerwich’s lost profits analysis is that Songkick has no antitrust or other claims that would make it illegal for Live Nation, a concert promoter, to have a “relationship” with Jay-Z, even if that relationship makes him not want to work with Songkick, a ticketing service provider. Opening Br. at 18-19. In response, Songkick has simply missed the point. It argues that Live Nation “can be liable in a market in which it does not operate” because it is the “parent” company of Ticketmaster. Opp. at 19:12-13. Regardless of whether or not that is true, it is a non-answer. Our point here is not that Live Nation should escape liability for Ticketmaster’s conduct, but instead that Songkick’s remaining claims are all Case 2:15-cv-09814-DSF-AGR Document 382 Filed 10/09/17 Page 12 of 16 Page ID #:53354 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 AT T ORNEYS AT LAW SAN FRA NCI SCO 10 DEFS. AND COUNTER-CLAIMANT’S REPLY ISO MOT. TO EXLCUDE TESTIMONY D. YURKERWICH CASE NO. 2:15-CV-09814 DSF (AGRX) targeted at Ticketmaster’s conduct. There is accordingly no basis on which an expert can opine that other things—including but not limited to Live Nation’s own, independent conduct as a concert promoter—caused damages relevant to this case. See City of Vernon v S. Cal. Edison Co., 955 F.2d 1361, 1373 (9th Cir. 1992) (excluding damages report for intermingling cognizable and non-cognizable harm). II. MR. YURKERWICH’S ESTIMATE OF LOST BUSINESS VALUE IS UNSUPPORTED BY ANY SOUND METHODOLOGY First, Songkick does not contest that Mr. Yurkerwich’s lost business value estimate is derivative of his lost profits estimate. If the latter is methodologically unsound, then so is the former. Second, in response to the separate point that Mr. Yurkerwich indefensibly assigned a real-world value to Plaintiff’s business of zero dollars, Songkick has responded largely by reference to facts that appear nowhere in Mr. Yurkerwich’s reports. Specifically, Songkick contends in its brief that Mr. Yurkerwich’s approach was substantially justified because over the summer, it sold certain assets for $5 million and thereby exhausted the value of its business for a small amount of money. Opp. at 10:17-11:2. Songkick sought to bolster that argument by serving a “Supplemental Report” from Mr. Yurkerwich on Wednesday, October 4—five days after filing its opposition brief. This is not how litigation works. The present motion addresses the testimony that Mr. Yurkerwich timely disclosed consistent with Rule 26. We will address belated efforts to supplement those disclosures in a separate forthcoming motion. Third, Songkick has failed to carry its burden to show that any expert in the field of business valuation would assess the worth of a company solely by reference to its GTV. If experts in the field did so, there would be some evidence of that practice—but Songkick has adduced none. Instead, it has pointed to reams of material in which Live Nation, investors in the industry, and others use GTV as a data point that provides relevant information about a company’s performance. Case 2:15-cv-09814-DSF-AGR Document 382 Filed 10/09/17 Page 13 of 16 Page ID #:53355 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 AT T ORNEYS AT LAW SAN FRA NCI SCO 11 DEFS. AND COUNTER-CLAIMANT’S REPLY ISO MOT. TO EXLCUDE TESTIMONY D. YURKERWICH CASE NO. 2:15-CV-09814 DSF (AGRX) But none of the material Songkick cites—much of which was not actually attached to its filing—uses GTV as the sole company-specific data to value the business. It would be professional malpractice to do so, ignoring considerations like the company’s profit margin on the tickets sold, its costs of selling them, and so on. See Friedman Decl. Ex. 5, Expert Rebuttal Report of Paul Meyer ¶¶ 199-200, ECF 277-7. Valuation, which is the endeavor Mr. Yurkerwich is ostensibly embarked on here, requires all kinds of additional data. Id. ¶¶ 194-200. III. MR. YURKERWICH’S ESTIMATE OF UNJUST ENRICHMENT IS UNSUPPORTED BY ANY SOUND METHODOLOGY Mr. Yurkerwich’s method for estimating unjust enrichment damages is to pick a particular point in time and then assert that the delta between two divergent potential business projections as of then is 100% attributable to alleged trade secret theft—without accounting for any other factors. That is not a sound methodology for identifying and calculating what damages flowed from the Defendants’ allegedly unlawful conduct. See Opening Br. at 24:26-25:23. It is the same infirm approach that led the Federal Circuit in Microstrategy to agree that Mr. Yurkerwich’s report did “not pass the red face test.” Microstrategy Inc. v. Bus. Objects, S.A., 429 F.3d 1344, 1354-55 (Fed. Cir. 2005) (affirming exclusion of Mr. Yurkerwich’s report because “Yurkerwich attributed all of the company’s post 2000 losses solely to the alleged tortious conduct by Business Objects” and “provided no basis for assuming that all of MicroStrategy’s financial struggles and corporate restructuring, which were far reaching in scope and breadth, had no lingering effects beyond 1999”).3 3 Songkick suggests that in evaluating a Daubert motion, the Court should not consider other instances in which the same expert’s opinions were rejected by other judges. That is incorrect as a matter of law. See Blue Cross & Blue Shield of N.J., Inc. v. Philip Morris, Inc., 141 F. Sup. 2d 320, 325 (E.D.N.Y. 2001) (“After a witness has been repeatedly rejected by courts … it is appropriate to take judicial notice of lack of credibility to reject a witness on Daubert grounds.”). Case 2:15-cv-09814-DSF-AGR Document 382 Filed 10/09/17 Page 14 of 16 Page ID #:53356 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 AT T ORNEYS AT LAW SAN FRA NCI SCO 12 DEFS. AND COUNTER-CLAIMANT’S REPLY ISO MOT. TO EXLCUDE TESTIMONY D. YURKERWICH CASE NO. 2:15-CV-09814 DSF (AGRX) Songkick seems to have misunderstood Defendants’ challenge here, and so has presented no meaningful opposition. It has targeted its response at identifying evidence that, it claims, would be good enough at trial to show that Defendants were unjustly enriched in some measure. See Opp. at 24. But that is not a defense of the arbitrary methods Mr. Yurkerwich relied upon to estimate the value of those gains, let alone a satisfactory basis to permit Mr. Yurkerwich to present that estimate to a jury. Those methods are indefensible, and they fatally infect both his “New Business Model” and “New Artist-Clients” approaches. It would be one thing if Mr. Yurkerwich’s testimony were something like: “Assuming that 10% annual gains in Ticketmaster’s presale business (compared to a baseline of 10% annual losses) are attributable to trade secret misappropriation, here is the value of that misappropriation.” That would potentially be a sound opinion for an accountant like Mr. Yurkerwich to offer. But for him to go further and affirmatively opine that, in fact, the calculations he conducts do reflect amounts attributable to trade secret misappropriation is both (a) beyond his expertise to begin with, and (b) based on a fundamentally arbitrary methodology. The new documents Songkick cites in its Opposition change nothing. They do indeed suggest Ticketmaster was motivated to compete with Songkick by developing comparable business offerings. Cf. Decl. of A. Wolfson in Supp. of Pl.’s Opp’n to Defs.’ Mot. to Exclude David Yurkerwich (“Wolfson Decl.”), ECF No. 338-1, Exs. 5, 19, 20, 28, 35, 36. But none of these documents provide any basis to conclude anything about what portion of Ticketmaster’s post-2014 presale profits are attributable to its supposedly wrongful acts. Mr. Yurkerwich has no sound methodology for opining that the unjust enrichment damages he measures were caused by Defendants’ wrongdoing. CONCLUSION For the foregoing reasons, the Court should exclude any testimony or opinions of the Plaintiff’s proffered damages expert David Yurkerwich. Case 2:15-cv-09814-DSF-AGR Document 382 Filed 10/09/17 Page 15 of 16 Page ID #:53357 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 AT T ORNEYS AT LAW SAN FRA NCI SCO 13 DEFS. AND COUNTER-CLAIMANT’S REPLY ISO MOT. TO EXLCUDE TESTIMONY D. YURKERWICH CASE NO. 2:15-CV-09814 DSF (AGRX) Dated: October 9, 2017 LATHAM & WATKINS LLP By: /s/ Daniel M. Wall Daniel M. Wall Timothy L. O’Mara Andrew M. Gass Kirsten M. Ferguson Attorneys for Defendant LIVE NATION ENTERTAINMENT, INC. and Defendant and Counter- Claimant TICKETMASTER LLC Case 2:15-cv-09814-DSF-AGR Document 382 Filed 10/09/17 Page 16 of 16 Page ID #:53358