`
`
`
`PAUL J. RIEHLE (SBN 115199)
`paul.riehle@faegredrinker.com
`FAEGRE DRINKER BIDDLE & REATH LLP
`Four Embarcadero Center
`27th Floor San Francisco, CA 94111
`Telephone: (415) 591-7500
`Facsimile: (415) 591-7510
`CHRISTINE A. VARNEY (pro hac vice)
`cvarney@cravath.com
`KATHERINE B. FORREST (pro hac vice)
`kforrest@cravath.com
`GARY A. BORNSTEIN (pro hac vice)
`gbornstein@cravath.com
`YONATAN EVEN (pro hac vice)
`yeven@cravath.com
`LAUREN A. MOSKOWITZ (pro hac vice)
`lmoskowitz@cravath.com
`M. BRENT BYARS (pro hac vice)
`mbyars@cravath.com
`CRAVATH, SWAINE & MOORE LLP
`825 Eighth Avenue
`New York, New York 10019
`Telephone: (212) 474-1000
`Facsimile: (212) 474-3700
`Attorneys for Plaintiff and Counter-defendant
`Epic Games, Inc.
`
`
`
`
`
`UNITED STATES DISTRICT COURT
`NORTHERN DISTRICT OF CALIFORNIA
`OAKLAND DIVISION
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`EPIC GAMES, INC.,
`
`
`
`APPLE INC.,
`
`Plaintiff, Counter-defendant,
`v.
`
`Defendant, Counterclaimant.
`
`Case No. 4:20-cv-05640-YGR-TSH
`
`
`
`EPIC GAMES, INC.’S
`OPPOSITION TO APPLE INC.’S
`MOTION TO STRIKE WRITTEN
`AND ORAL TESTIMONY OF DR.
`MICHAEL I. CRAGG
`The Honorable Yvonne Gonzalez Rogers
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`Case 4:20-cv-05640-YGR Document 697 Filed 05/17/21 Page 2 of 6
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`Apple Inc.’s (“Apple”) Motion to Strike is an attempt to have the Court reconsider its
`prior ruling, and to allow Apple to rely on Spotify USA Inc.’s (“Spotify”) production
`offensively while denying Epic Games, Inc. (“Epic”) the opportunity to respond. The facts,
`which Apple’s motion obscures, are that both Parties subpoenaed the Spotify data at issue and
`then it was Apple, not Epic, that decided to have its experts rely on it; it was Apple, not Epic,
`that prevented Spotify from testifying in this Action; and it was Apple, not Epic, that decided to
`withhold, rather than produce, any Apple materials responsive to the Spotify
`at
`issue (to the extent such materials exist). Apple’s attempt to strike Dr. Michael Cragg’s
`testimony is both procedurally improper and substantively flawed. Apple has now stipulated
`twice to the admissibility of that specific testimony, the Court has already rejected Apple’s
`attempt to strike related portions of Dr. Cragg’s testimony (ECF No. 614 at 11), and the
`testimony is substantively sound under Rule 703—as Dr. Cragg testified,
`
`
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` (Cragg Trial
`
`Tr. 2335:20-24.) Apple’s motion therefore should be denied.
`
`First, Apple’s Motion engages in revisionist history. Apple argues that Spotify’s JFTC
`submissions are wholly irrelevant to this case, but Apple took a contrary position in discovery,
`when it requested that Spotify produce these very documents. In December 2020, Apple (as
`well as Epic) served a document subpoena on Spotify, seeking documents relating to Spotify’s
`usage data and its submissions to regulators concerning Apple’s practices. (Stuckey Decl.
`¶¶ 3-4, Ex. A (Epic RFP Nos. 3 & 12), Ex. C (Apple RFP Nos. 3 & 33).) In February 2021,
`Spotify made a series of productions in response to the Parties’ subpoenas. (Stuckey Decl.
`¶¶ 9-10, 12.) However, Spotify clawed back certain materials at the request of a foreign
`regulator, including some of the underlying data supporting the JFTC submissions, but not the
`JFTC submissions themselves. (Stuckey Decl. ¶ 11.)
`
`Apple also claims that Apple was denied an opportunity to test the accuracy of Spotify’s
`JFTC submissions because Epic did not subpoena a Spotify witness to testify about the Spotify
`documents. If Apple believed it needed to depose a Spotify witness, it was up to Apple to
`subpoena one; Apple never even tried. Epic, by contrast, did serve Spotify with a deposition
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`EPIC’S OPPOSITION TO APPLE’S MOTION TO STRIKE
`Case No. 4:20-cv-05640-YGR-TSH
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`Case 4:20-cv-05640-YGR Document 697 Filed 05/17/21 Page 3 of 6
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`subpoena in January 2021. (Stuckey Decl. ¶ 5, Ex. D.) Spotify agreed to make a witness
`available for deposition—a senior executive based in Sweden—but was unable to make that
`witness available until February 19, 2021, just four days after the close of fact discovery.
`(Stuckey Decl. ¶ 6.) Epic sought Apple’s agreement to conduct the deposition after the fact
`discovery deadline had passed, but Apple refused to accommodate the Spotify witness’s
`availability. (Stuckey Decl. ¶ 7, Ex. E.) Epic also sought to secure a trial witness from Spotify,
`but Spotify was unwilling to provide one. (Stuckey Decl. ¶ 8.) Apple made no such attempt.
`Apple’s supposed inability to cross-examine a Spotify witness about its JFTC submissions or
`the underlying data from Spotify’s
` is a result of Apple’s own refusal to
`accommodate the deposition availability of Spotify’s witness.
`Second, Apple repeats its complaint—already rejected by the Court—that Dr. Cragg
`disclosed his opinions relying on the Spotify documents only in his written rebuttal testimony.
`As Epic has previously explained (ECF No. 536 at 6-10), and as the Court previously found
`(ECF No. 614 at 11), Dr. Cragg’s response was well within the scope of permissible responses
`to new analysis offered by Prof. Lorin Hitt for the first time in Prof. Hitt’s own rebuttal report.
`Specifically, Prof. Hitt did not offer any Spotify-related opinions in his opening report. Instead,
`in March 2021, when the Parties exchanged rebuttal reports, Prof. Hitt for the first time offered
`a new analysis based on the Spotify data, claiming that data shows a lack of “friction”. Dr.
`Cragg, in his rebuttal written direct, made two modest observations about the new Spotify
`analysis offered by Prof. Hitt: (i) that Prof. Hitt (again) misrepresented the data he relied on
`(Ex. Expert 13 ¶¶ 69-70 (Cragg)); and (ii) that the Spotify
` directly contradicts Prof.
`Hitt’s opinions (Id. ¶ 71)). On April 28, 2021, Apple objected to portions of the former
`opinion, but stipulated to the admissibility of the opinion it now challenges. (ECF No. 518 at
`6-7; ECF No. 519 at 2.) On May 9, 2021, the Court overruled Apple’s objections as to all of
`Dr. Cragg’s responses concerning Spotify. (ECF No. 614 at 11.)
`Apple then again expressly waived its objection to Dr. Cragg’s reliance on the Spotify
`documents on May 12, 2021, as part of a quid pro quo between the Parties. Specifically, the
`Parties filed a stipulation and proposed order agreeing to the admission into evidence of certain
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`EPIC’S OPPOSITION TO APPLE’S MOTION TO STRIKE
`Case No. 4:20-cv-05640-YGR-TSH
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`Case 4:20-cv-05640-YGR Document 697 Filed 05/17/21 Page 4 of 6
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`documents relied on by Dr. Cragg. The stipulation stated the Parties’ “understanding that Drs.
`Barnes, Cragg, Hitt, Lafontaine, and Rubinfeld may rely on information not admitted into the
`record, consistent with Rule 703, and that the parties will not object to those experts’ reliance
`on such unadmitted materials within the scope of Rule 703 except as otherwise expressly set
`forth herein”. (ECF No. 641 at 2 (emphasis added).) Apple was well aware that this
`stipulation relinquished any objection to Dr. Cragg’s reliance on the Spotify documents
`mentioned in his written direct testimony, and Apple so stipulated because Epic withdrew
`similar objections as to Apple’s witnesses in return. By stipulating in the May 12, 2021 filing
`that it would not object to the Spotify documents on Rule 703 grounds, Apple again waived the
`very objection it now asserts. Having lost a challenge to related testimony and stipulated twice
`to the specific testimony at issue, and having agreed to drop any objections as part of an
`agreement with Epic, Apple should not be allowed another bite at the apple. Epic respectfully
`requests that the Court reject Apple’s attempt to relitigate this issue.
`Third, even if Apple’s arguments were preserved (and they were not), they would fail
`under Rule 703. “Rule 703 allows an expert witness to form an opinion based on facts or data
`either before or at the hearing”, and “[t]he facts or data relied upon need not be otherwise
`admissible if they are ‘of a type reasonably relied upon by experts in a particular field’”. Scott
`v. Ross, 140 F.3d 1275, 1286 (9th Cir. 1998); Fed. R. Evid. 703 (“An expert may base an
`opinion on facts or data in the case that the expert has been made aware of or personally
`observed.”). Courts give experts “‘great liberality’ . . . in determining the basis of their
`opinions”. K&N Eng’g, Inc. v. Spectre Performance, 2011 WL 13131157, at *10 (C.D. Cal.
`May 12, 2011). “The fact that [an expert’s] opinions are based on data collected by others is
`immaterial; [FRE] 703 expressly allows such opinion testimony.” Southland Sod Farms v.
`Stover Seed Co., 108 F.3d 1134, 1142 (9th Cir. 1997). “[H]ow [the expert’s] opinion should be
`weighed in light of his reliance on [such] data can be explored through cross-examination.”
`BladeRoom Grp. Ltd. v. Facebook, Inc., 2018 WL 1611835, at *3 (N.D. Cal. Apr. 3, 2018).
`The studies containing Spotify’s business data fall clearly within the scope of Rule 703.
`See, e.g., United States v. W.R. Grace, 504 F.3d 745, 761 (9th Cir. 2007) (reversing where
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`EPIC’S OPPOSITION TO APPLE’S MOTION TO STRIKE
`Case No. 4:20-cv-05640-YGR-TSH
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`Case 4:20-cv-05640-YGR Document 697 Filed 05/17/21 Page 5 of 6
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`district court excluded expert testimony based on data found in certain EPA studies); RePET,
`Inc. v. Zhao, 2018 WL 3372749, at *3 (C.D. Cal. Mar. 20, 2018) (holding that business records,
`including “general ledger detail, tax returns, invoices and other records including minutes of
`shareholder and board of director meetings, stock ledgers and certificates, invoices, and
`correspondence with third party companies”, were proper Rule 703 material). Data studies are
`the type of material regularly relied on by economists like Dr. Cragg, who testified at trial that
`the Spotify data
`
`
`. (Cragg Trial Tr. 2335:16-24.)
`Apple cites two decisions finding that experts cannot rely on “opinions developed by
`another expert for the purposes of litigation”, in contrast with the “facts and data” permitted by
`Rule 703. See, e.g., In re Imperial Credit Indus., Inc. Sec. Litig., 252 F. Supp. 2d 1005, 1012
`(C.D. Cal. 2003) (emphases added). But Dr. Cragg testified to his own opinions based on
`Spotify’s data.
`
`
`
` (Cragg Trial Tr. 2339:16-23.)
`Apple had ample opportunity to (and did) cross-examine Dr. Cragg about his opinions and the
`data he relied on at trial. Apple’s Motion also faults Dr. Cragg for not considering Apple’s
`response to Spotify’s JFTC submissions, but Apple never produced in this litigation any such
`responsive material (if it even exists). As noted above, it was Apple that injected this issue into
`the case by presenting an analysis based on Spotify’s usage data in Prof. Hitt’s rebuttal report.
`Yet Apple chose to ignore the Spotify
` contradicting Prof. Hitt’s opinions. Apple
`could have deposed Spotify about its
` but chose not to. Apple could have produced
`its response to Spotify’s JFTC submissions, but chose not to. Apple could have asked Prof.
`Hitt to present an analysis critiquing the Spotify
`, but chose not to. Apple could
`have refrained from using the Spotify data altogether, offensively or defensively, but chose not
`to. Apple should not be permitted to have its expert rely on cherry-picked portions of Spotify’s
`production as a sword, yet deny Epic’s expert the ability to rely on other portions of that
`production to show the fallacy of Apple’s claims.
`For these reasons, Apple’s motion to strike should be denied.
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`EPIC’S OPPOSITION TO APPLE’S MOTION TO STRIKE
`Case No. 4:20-cv-05640-YGR-TSH
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`Case 4:20-cv-05640-YGR Document 697 Filed 05/17/21 Page 6 of 6
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`Dated: May 17, 2021
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`CRAVATH, SWAINE & MOORE LLP
`
`Christine Varney (pro hac vice)
`Katherine B. Forrest (pro hac vice)
`Gary A. Bornstein (pro hac vice)
`Yonatan Even (pro hac vice)
`Lauren A. Moskowitz (pro hac vice)
`M. Brent Byars (pro hac vice)
`
`FAEGRE DRINKER BIDDLE & REATH LLP
`
`Paul J. Riehle
`
`Respectfully submitted,
`By:
`/s/ Yonatan Even
`Yonatan Even
`Attorneys for Plaintiff and Counter-defendant
`Epic Games, Inc.
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`EPIC’S OPPOSITION TO APPLE’S MOTION TO STRIKE
`Case No. 4:20-cv-05640-YGR-TSH
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