Mathew Enter., Inc. v. Chrysler Grp. LLC, Case No. 13-cv-04236-BLF

• Decision Date: 21 September 2016
• Docket Number: Case No. 13-cv-04236-BLF
• Parties: MATHEW ENTERPRISE, INC., Plaintiff, v. CHRYSLER GROUP LLC, Defendant.
• Court: U.S. District Court — Northern District of California

MATHEW ENTERPRISE, INC., Plaintiff, v. CHRYSLER GROUP LLC, Defendant.

Case No. 13-cv-04236-BLF

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA SAN JOSE DIVISION

September 21, 2016

ORDER RE MOTIONS IN LIMINE

[Re: ECF 242, 243, 244, 246, 248, 249, 250, 251, 252]

Plaintiff Mathew Enterprise, Inc., a Chrysler, Jeep, Dodge, and Ram ("CJDR") dealer operating at Stevens Creek CJDR ("Stevens Creek") brings this action alleging that Defendant Chrysler Group LLC ("Chrysler") offered incentive payments to other CJDR dealers in Northern California but not to Stevens Creek in violation of § 2(a) of the Robinson-Patman Act ("RPA"). Stevens Creek initially brought four claims, but only the § 2(a) claim for damages remains. The Court held a pretrial conference on September 19, 2016, at which time it addressed a number of trial issues and heard argument on the parties' motions in limine. The Court hereby orders as follows:

I. SCHEDULING

Stevens Creek and Chrysler are each allotted a total of 18 hours of trial time, to include examination and cross-examination of witnesses and presentation of evidence. Each party will have an additional 45 minutes for opening statements and 90 minutes for closing arguments.

II. JURY QUESTIONNAIRE

The Court will allow the jury questionnaire as modified on the record. The parties are ORDERED to provide the Courtroom Deputy with a revised questionnaire on or before September 21, 2016. Each party will be allotted 30 minutes for voir dire.

III. MOTIONS IN LIMINE

For the reasons explained below and on the record at the September 19, 2016 pretrial conference, the motions are decided as follows:

Stevens Creek's Motion in Limine No. 1: DENIED.

Stevens Creek's Motion in Limine No. 2: GRANTED IN PART AND DENIED IN PART.

Stevens Creek's Motion in Limine No. 3: DENIED.

Chrysler's Motion in Limine No. 1: DENIED.

Chrysler's Motion in Limine No. 2: GRANTED IN PART AND DEFERRED.

Chrysler's Motion in Limine No. 3: GRANTED IN PART AND DENIED IN PART.

Chrysler's Motion in Limine No. 4: DENIED.

Chrysler's Motion in Limine No. 5: GRANTED.

Chrysler's Motion in Limine No. 6: GRANTED.

A. Stevens Creek's Motions In Limine

i. Stevens Creek's Motion in Limine No. 1 to Exclude Evidence Relating to Events and Circumstances Outside the Price Discrimination Period. DENIED.

Stevens Creek moves "to exclude evidence of events that occurred and circumstances that existed outside the asserted Price Discrimination Period" ("PDP"). Pl.'s Mot. in Lim. No. 1, at 1, ECF 242. Plaintiff states that its "asserted period of price discrimination is the twelve month period from July 2012 through June 2013," and thus, evidence of events that occurred outside that period is irrelevant and inadmissible. Id. Stevens Creek further states that it does not object to the use of evidence from outside the relevant twelve month period "for the purpose of making a comparison to circumstances that existed during the PDP," but argues that "Chrysler has not offered any evidence that would support such comparison of the [relevant] exhibits and anticipated testimony to internet promotional activity during the PDP." Id. at 2. Accordingly, Stevens Creek contends that absent such an offer of proof, evidence of promotional activity outside of the PDP has no bearing on the case. Id.

Chrysler responds that evidence from events occurring prior to the PDP "is plainly relevant to show non-price competition during the relevant period." Def.'s Opp. to Pl.'s Mot. in Lim. No.1, at 1, ECF 278. Chrysler contends that evidence from after the relevant period is relevant because (1) "a proper foundation has been laid to show that there has been no material change that could render the evidence not probative of the relevant period" and (2) in some cases, "it is the best available evidence to illuminate other aspects of non-price competition during the discrimination period, or the plausibility of Stevens Creek's claim that vehicles at the same model level (versus trim level) are of like grade and quality." Id. at 2.

The Court agrees with Chrysler and finds that this evidence is relevant to Chrysler's attempt to provide alternate reasons for any alleged diversion of sales, and is thus admissible. Accordingly, the Court DENIES Stevens Creek's motion in limine no. 1. The Court notes, however, that Defendant must lay a proper foundation before introducing this evidence.

ii. Stevens Creek's Motion in Limine No. 2 to Exclude Evidence Relating to Yelp! Postings After 2013, Including Unsubstantiated Claims of Possible Manipulation of Yelp! Ratings in 2015. GRANTED IN PART AND DENIED IN PART.

Plaintiff seeks to exclude "evidence relating to Yelp! postings after 2013, including unsubstantiated claims of possible manipulation of Yelp! ratings in 2015" because it violates Federal Rules of Evidence 401, 402, and 403, and is inadmissible hearsay. Pl.'s Mot. in Lim. No. 2, at 1, 4, ECF 243. Plaintiff argues that the Yelp! evidence "has no demonstrable relation to pricing, negotiations, or consumer behavior during the asserted [relevant time period], [and] . . . is rank hearsay based on mere speculation built on inferences from anonymous online activity." Id. Plaintiff also argues that Chrysler has not demonstrated the evidence's "relevance to a disputed matter being tried in this matter or a proper purpose for this supposed evidence." Id. Additionally, Stevens Creek contends that "Chrysler intends to introduce this evidence to the jury for no other purpose than to paint Stevens Creek as generally a bad actor," and is thus inadmissible character evidence. Id. at 3.

Chrysler responds that the post-2013 Yelp! pages are "relevant to whether online reviews, and not price, impacted sales." Def.'s Opp. to Pl.'s Mot. in Lim. No. 2, at 1, ECF 279. Chrysler contends that the post-2013 "ratings are probative of [the] comparative performance of Stevens Creek and Fremont during the relevant period, because each dealership's performance [was]nearly identical during and after the relevant period." Id. Chrysler also contends that Yelp! reviews are either not hearsay or fall under the present sense impression exception to the hearsay rule. Id. at 3. As to the Yelp! Consumer Alert, Chrysler argues that contrary to Plaintiff's claim, it can show that the "artificial positive reviews came from Stevens Creek." Id. at 4-5. Moreover, Defendant states that it will only use the alert to demonstrate Yelp's importance and to impeach claims by Mathew Zaheri, the owner and operator of Stevens Creek, regarding the importance of Yelp. Id. at 5.

The Court finds that the Yelp! pages and ratings are out of court statements, which, if being offered for the truth of the matter asserted, are inadmissible under Fed. R. Evid. 801. Cameron v. Werner Enters., Inc., No. 12-cv-243, 2016 WL 3030181, at *3 (S.D. Miss. May 25, 2016). The Court disagrees with Chrysler's contention that the present sense impression exception to the rule against hearsay applies. The present sense impression exception applies to "[a] statement describing or explaining an event or condition, made while or immediately after the declarant perceived it." Fed. R. Evid. 803(1). At the pretrial conference, Defendant conceded that it did not have any evidence that the pages and ratings were made while or immediately after the declarant perceived it. Therefore, the exception cannot apply. Additionally, as discussed at the pretrial conference, anonymous internet reviews lack the requisite "circumstantial guarantees of trustworthiness" to fall under the residual exception to the rule against hearsay. See Fed. R. Evid. 807; Doe v. Kamehameha Schs./Bernice Pauahi Bishop Estate, No. 08-00359, 2008 WL 5423191, at *4 (D. Hawai'i Dec. 31, 2008) ("[U]nder the cloak of anonymity, people will make outrageous, offensive, and even nonsensical statements."). Therefore, Defendant may not use the Yelp! pages and ratings as evidence of how Stevens Creek treats its customers. Defendant may, however, use the pages and ratings to show the effect on future customers.

Additionally, the Court finds that the evidence relating the Yelp! Consumer Alert has little probative value and is highly prejudicial to Stevens Creek. Thus, any evidence relating to the Consumer Alert is inadmissible pursuant to Fed. R. Evid. 403. However, the Court will allow the evidence if Plaintiff opens the door by referring to review manipulation.

Accordingly, the Court GRANTS IN PART AND DENIES IN PART Stevens Creek's

motion in limine no. 2 as set forth above.

iii. Stevens Creek's Motion in Limine No. 3 to Exclude Evidence of Alleged Irrational Behavior by Stevens Creek by Not Maintaining its New Vehicle Prices During the Price Discrimination Period. DENIED.

Stevens Creek moves to exclude evidence of its alleged irrational behavior, as demonstrated by it "not maintaining its new vehicle prices during the [PDP] when it received no incentives at the same levels as they were when it was receiving incentives from Chrysler." Pl.'s Mot. in Lim. No. 3, at 1, ECF 244. According to Plaintiff, Chrysler seeks to introduce exhibits 289 and 290 entitled "Stevens Creek Acted Irrationally by Raising Price," which

purport to show that a rational dealer would have ignored the increase in its cost of goods arising from the loss of the incentives and accepted lower profits on the vehicles it sold in the hope that it would eventually earn more profits from related sales of used vehicles, service and parts tied to the sale of new vehicles.

Id. at 2. Stevens Creek contends that "[t]hese exhibits, and the testimony that Chrysler is expected to attempt to elicit regarding them, are solely for the purpose of influencing the jury to deny Stevens Creek damages . . . ." Id. Thus, Plaintiff argues that "[b]ecause the victim of price discrimination has no duty to ignore its true cost of goods in competing with its favored competitors, this evidence should be excluded" under Fed. R. Evid. 401, 402, and 403. Id.

Chrysler responds that...