United States District Court, D. Arizona
ORDER
DOMINIC W. LANZA UNITED STATES DISTRICT JUDGE.
On
October 9, 2019, the Court issued a lengthy order in which it
ruled upon seven motions in limine, two motions to exclude
expert opinions, and Maricopa County's request for a jury
trial. (Doc. 203.) Now pending before the Court are a pair of
motions for reconsideration, filed by Maricopa County, that
challenge certain aspects of that order. (Docs. 206, 207.)
For the following reasons, the Court will require further
briefing on the first motion and deny the second motion.
I.
Motion to Reconsider-Krivoshia
In the
first motion for reconsideration (Doc. 206), Maricopa County
challenges the portion of the October 9, 2019 order that
denied Maricopa County's motion to exclude some of the
opinions of Office Depot's expert, Patrick Krivoshia.
As
background, Maricopa County had argued, in its original
motion to exclude, that Krivoshia's decision to apply an
across-the-board discount of 20% to all purchases before
February 3, 2007 and a 5% across-the-board discount to all
subsequent purchases had “no basis in reality”
and thus violated Rule 702(b)'s requirement that an
expert's opinion be based upon “sufficient facts or
data.” (Doc. 171 at 6-8.) In response, Office Depot
argued that a particular set of pricing data, known as the
MC-OD0000009 data set, supplied the foundation for
Krivoshia's application of these discounts. (Doc. 176 at
3-4, 9, 14.) And during oral argument, in response to
questioning by the Court about why neither party actually
provided the MC-OD0000009 data set as an attachment to its
brief, Office Depot's counsel stated: “[W]hile
we're happy to provide it to you, the reason that we
didn't attach it to our brief is that it is literally
thousands and thousands of lines of structured data. And
given that there was no challenge to the substance of it, as
we understood Maricopa's challenge, we didn't think
it was relevant.” (Rough Transcript at 89.)
Based
in part on this explanation, the Court denied Maricopa
County's motion to exclude. (Doc. 203 at 31-35.)
Specifically, the Court began by noting that Krivoshia's
expert report contained an assertion that “the
MC-OD0000009 data set provided factual support for his
decision to apply a 20% discount to purchases before February
13, 2007 and a 5% discount to purchases after that
date” and stated that the presence of this assertion
“suggest[ed] Krivoshia wasn't simply making up the
5% and 20% figures, which is what [Gen. Elec. Co. v.
Joiner, 522 U.S. 136 (1997)] prohibits, and instead was
grounding his opinions in historical pricing data.”
(Id. at 33.) Next, the Court noted that it was
“odd that Office Depot failed to submit the actual
MC-OD0000009 data set in support of its response brief”
but further noted that “Maricopa County also declined
to submit the MCOD0000009 data set.” (Id. at
33-34.) The Court ultimately concluded that, because
Krivoshia claimed he was relying on historical pricing data
and the parties hadn't submitted any evidence to prove or
disprove this assertion, Office Depot had done just enough to
satisfy Rule 702. (Id. at 34.)
As an
attachment to the motion for reconsideration, Maricopa County
supplies a copy of what it claims is the actual MC-OD0000009
data set. (Doc. 206 at 8.) It is a one-page document that
contains only a few lines of text. (Id.) Maricopa
County argues this document cannot possibly provide a valid
foundation for Krivoshia's opinions under Rule 702
because, inter alia, “[t]here is no testimony
of record in this case that sets the foundation for,
authenticates or explains the cryptic content of
MC-OD000009-the only explanation of its meaning that has been
provided in this case is the description by counsel during
the October 4, 2019 argument.” (Id. at 3.)
Maricopa County thus contends that reconsideration is
warranted because “Office Depot's counsel for the
first time introduced issues at oral argument which plaintiff
believes misled the Court into an erroneous ruling.”
(Id. at 1.)
Soon
after Maricopa County filed its motion, Office Depot filed a
“Notice of Errata.” (Doc. 210.) In this document,
Office Depot acknowledges that the statements made by its
counsel during the hearing about the size of the MC-OD0000009
data set were inaccurate, provides an explanation for why
counsel, in good faith, believed the statements were accurate
at the time they were made, and concludes by stating that
“[i]t does not appear from the Court's decision
that counsel's inadvertent error had any bearing on the
Court's determination of the motion, but if the Court
requests a substantive response to Maricopa's
reconsideration motion pursuant to Local Civil Rule
7.2(g)(2), Office Depot will provide one.”
(Id. at 2.)
The
Court fully accepts Office Depot's explanation that the
misstatements during the hearing were made in good faith.
Mistakes happen. Nevertheless, the Court would like to
receive further briefing on the issues raised by Maricopa
County. Accordingly, Office Depot is ordered to file a
response (not to exceed 11 pages) by November 4, 2019, and
Maricopa County may file a reply (not to exceed seven pages)
by November 12, 2019. Although Office Depot is free to invoke
the high standard for reversal that applies to motions for
reconsideration (see Part II infra), it should also
attempt to explain, on the merits, why the MC-OD0000009 data
set provides an adequate foundation for Krivoshia's
opinions under Rule 702(b) and Joiner.
II.
Motion to Reconsider-CCSF Audit
In the
second motion for reconsideration (Doc. 207), Maricopa County
challenges the portion of the October 9, 2019 order that
granted Office Depot's motion in limine to exclude
evidence of an audit that had been conducted by CCSF.
As
background, the contract between CCSF and Office Depot was in
effect from January 2005 to November 2009. After learning
that other entities had conducted audits of their contracts
with Office Depot, which subsequently resulted in
settlements, CCSF conducted its own audit and found millions
of dollars in overcharges. In its motion in limine, Office
Depot moved to exclude evidence concerning the CCSF audit on
three grounds: (1) Rule 408 (settlement evidence); (2)
hearsay; and (3) Rule 403 (unfair prejudice and jury
confusion). (Doc. 158.)[1]
In the
October 9, 2019 order, the Court agreed with Office Depot in
part and thus granted its motion in part. (Doc. 203 at
17-23.) Specifically, although the Court clarified that Rule
408 did not bar the admission of the CCSF audit (id.
at 19-20), the Court concluded the audit didn't fall
within Rule 803(8)'s hearsay exception for public records
because it was prepared in anticipation of litigation (and
without a hearing) and thus wasn't trustworthy.
(Id. at 20-21). The Court also held that the audit
wasn't admissible under Rule 703 because Maricopa
County's expert stated during his deposition that he
didn't rely on the audit when formulating his opinions.
(Id. at 22.) Given these determinations, the Court
concluded under Rule 403 that Maricopa County could merely
refer to the fact that CCSF conducted an audit but
could not introduce the audit contents.
(Id. at 22-23.)
In its
motion for reconsideration, Maricopa County takes issue with
the Court's trustworthiness analysis. (Doc. 207.)
Specifically, Maricopa County argues that the key
consideration in this context is the reliability of the
methodology underlying the audit, that the audit here
employed an “exemplary” methodology (it was
conducted in compliance with government auditing standards by
a team led by a highly experienced auditor), and that the
audit was initiated well before litigation was anticipated.
(Id. at 2-3.) Thus, although Maricopa County
acknowledges that the CCSF City Attorney became involved in
the audit process before the audit was finalized, and further
acknowledges that no hearing was ever held, it argues these
factors don't render the audit untrustworthy for purposes
of Rule 803(8). (Id. ...