Free Response in Opposition to Motion - District Court of California - California

Case 3:08-cv-00060-BTM-CAB

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Roger G. Perkins, Esq., CSB #86617 Rperkins(impplaw. com
2 Kristina M.Pfeifer, Esq., CSB #234352

K pfeifer(impplaw. com

3 MORRIS POLICH & PURDY LLP 501 West Broadway, Suite 500
4 San Diego, California 92101

Telephone: (619) 557-0404
5 Facsimile: (619) 557-0460
6 Robert S. Mallin, Ilinois Bar No. 6205051

Rmallin(ibrinkshofer. com
7 Brinks Hofer Gilson & Lione

NBC Tower, Suite 3600
8 455 North Cityfront Plaza Drive Chicago, IL 60611 -5599 9 Telephone: (312) 321 -422 1 Facsimile: (312) 321-4299

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Attorneys for Defendants
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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

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lENS ERIK SORENSEN, As Trustee of SORENSEN RESEARCH AND DEVELOPMENT TRUSL
Plaintiff,
v.

CASE NO. 3:08-cv-00060-BTM-CAB

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EMERSON ELECTRIC CO., a Missouri Corporation; ONE WORLD TECHNOLOGIES, INC., a Delaware corporation; RIDGE TOOL COMPANY, an Ohio Corporation; RIDGID, INC., a Delaware corporation; and DOES 1 - 100
Defendants.

EMERSON ELECTRIC CO.'S, RIDGE TOOL COMPANY'S, RIDGID INC.'S AND ONE WORLD TECHNOLOGIES, INC.'S OPPOSITION TO PLAINTIFF'S MOTION FOR EXCEPTION TO STAY TO PRESERVE EVIDENCE
Date: August 8, 2008

Time: 1 1 :00 a.m.
Courtroom: 15

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Hon. Barry Ted Moskowitz NO ORAL ARGUMENT UNLESS REQUESTED BY THE COURT

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EMERSON ELECTRIC CO.'S, RIDGE TOOL COMPANY'S, RIDGID INC.'S AND ONE WORLD TECHNOLOGIES,INC.'S OPPOSITION TO PLAINTIFF'S MOTION FOR EXCEPTION TO STA Y TO

PRESERVE EVIDENCE 3:08-CV-00060-BTM-CAB

Case 3:08-cv-00060-BTM-CAB

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i.
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INTRODUCTION
Sorensen Research and Development Trust's ("SRDT") motion for an exception to the stay to

3 preserve evidence is both unwarranted and premature. This Court's order staying this case provides that

4 "any party may apply to the Court for an exception to the stay if it has specific, valid reasons to believe
5 that it needs to obtain

discovery in order to preserve evidence that will otherwise be unavailable after the

6 stay." SRDT's motion for a limited exception to stay has not provided any specific, valid reasons for
7 lifting the stay. Instead, SRDT rushed to file this motion in an attempt to run up defendants' costs and

8 expenses as much as possible while its suspect patent is being reexamined based on approximately 20
9 substantial new questions of

patentability.

10 SRDT's "run up the cost" strategy is exemplified by its refusal to identify the specific evidence
1 1 that it seeks to have third parties preserve. Indeed, so that there would be no confusion or

12 misunderstanding, after receiving SRDT's request to have third paries preserve evidence, defendants

13 sought an identification as to what specific evidence should be preserved. Instead of identifying what

14 evidence should be preserved, SRDT fied this instant motion. Certainly SRDT could have first
15 identified what evidence it seeks to have preserved before rushing to file this motion.

16 Moreover, while the SRDT's motion papers are rife with deposition testimony excerpts from an
17 unrelated products liability lawsuit involving a bench top miter saw that is not an accused product in this
18 case, SRDT failed to include the most important information of all - for the past two years, SRDT has
19 refused to accept the same type of information it seeks in this motion. Specifically, SRDT was offered

20 information about the overmold process used for producing the housings of the accused Ridgid-branded
21 products, but rejected that information because it originated from Chinese nationals and Chinese
22 companies instead of

U.S. citizens and U.S. companies.

23 SRDT's motion should be denied, or in the alternative, SRDT's "running up the cost strategy"
24 should not be permitted and SRDT should be required to pay defendants' attorney fees and costs
25 associated with any third party discovery.

26 III 27 III 28 III
-2EMERSON ELECTRIC CO.'S, RIDGE TOOL COMPANY'S, RIDGID INC.'S AND ONE WORLD TECHNOLOGIES, INC.'S OPPOSITION TO PLAINTIFF'S MOTION FOR EXCEPTION TO STAY TO PRESERVE EVIDENCE 3:08-CV-00060-BTM-CAB

Case 3:08-cv-00060-BTM-CAB

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II.
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SRDT'S MOTION IS PREMATURE AND DESIGNED TO INCREASE COSTS
On May 6, 2008, SRDT sent a letter to defendants requesting that certain information and things

3 be preserved and requested a response on May 27, 2008 (Mallin decl., Ex. 1). On May 27,2008, SRDT

4 was advised that the defendants would preserve information and things in their possession, custody and
5 control as required by the Federal Rules of Civil Procedure and applicable case law (Mallin decl., Ex. 2).

6 Indeed, as litigants, Defendants have instituted an appropriate litigation hold on documents and things

7 that might be relevant to this lawsuit.

8 On June 3, 2008, SRDT sent another letter requesting assurances that third parties are preserving
9 information and demanded a response by June 13, 2008 (Mallin decl., Ex. 3). On Friday, June 6, 2008,
10 only 3 days after receiving the request and 7 days before SRDT's demanded response, Defendants

11 requested a clarification and a specific identification as to what information SRDT wanted to be

12 preserved (Mallin decl., Ex. 4). This request for a clarification and identification was necessary so that
13 there would be no confusion as to what SRDT wanted preserved by the third parties and no dispute in

14 the future should SRDT attempt to argue that third party information was destroyed even though third
15 parties agreed to preserve information. For example, SRDT apparently wants third parties to preserve

16 "all design and technical documents for the Accused Products." The potential scope of this request is
1 7 limitless and certainly includes information and things that have no bearing on this case at alL. What is

1 8 SRDT really seeking to have preserved? Likewise, SRDT wants third parties to commit to preserving
19 "all prototype and production molds used in the production of the Accused Products." Which molds of
20 the many components used in the Accused Products?! However, SRDT provided no response

21 whatsoever, and instead of identifying and clarifying what information SRDT wants the third parties to
22 preserve, on Monday, June 9, 2008, SRDT filed this motion for a limited exception to the stay.2
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i According to SRDT, "prototype" and "production" molds apparently are both used in "production of

the Accused

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Products." However, there must be some difference between these types of molds since SRDT distinguished them. What is that difference and what molds does SRDT want preserved? 2 SRDT also disingenuously represented that "Defendants have failed to agree" (SRDT Memo at 2). Defendants' request for
clarification could hardly be characterized as a "failure" to do anything.

-3EMERSON ELECTRIC CO.'S, RIDGE TOOL COMPANY'S, RIDGID INC.'S AND ONE WORLD TECHNOLOGIES, INC.'S OPPOSITION TO PLAINTIFF'S MOTION FOR EXCEPTION TO STAY TO PRESERVE EVIDENCE 3:08-CV-00060-BTM-CAB

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SRDT's apparent strategy in filing this motion is to increase the defendants' cost while a stay is
2 in place, and to burden the Court with unnecessary motions. Indeed, if it were not, then SRDT would

3 have provided a clarification and listing of the information that it wanted third parties to preserve.
4 Presumably, as the party making the request, SRDT could easily provide such a list, but it did not.

5 SRDT's "running up the cost strategy" should not be rewarded and its motion should be denied. In view

6 of SRDT's failure to even attempt to clarify and identify what information it seeks to have preserved,
7 SRDT cannot credibly set forth any specific valid reasons for lifting the stay.

8 However, if the Court is inclined to a limited lift of the stay, then SRDT should be required to
9 pay all of Defendants' costs associated with lifting the stay and any third party discovery.

10 III.

SRDT REJECTED THE VERY EVIDENCE IT NOW REQUESTS

11 SRDT's "running up the cost strategy" is further evidenced by its past rejections of the very
12 same type of information it seeks here. Significantly, SRDT's request to take third party discovery of
13 suppliers in China is remarkable in view of the fact that on several occasions, SRDT was offered and

14 provided information about the process used to manufacture the housings for the Accused Products, but
15 refused to accept the information because it did not come from a U.S. citizen and a U.S. company.

16 SRDT was first offered such information approximately two years ago when Techtronic Industries
17 North America, Inc. ("TTINA") offered to provide an affdavit about the process used to produce the

1 8 overmold housing on all of the accused Ridgid-branded products. The offer explained that the
19 declaration would be based on an investigation conducted by TTINA's parent company in Hong Kong
20 (Mallin decl., Ex. 5). SRDT rejected that proposal and instead, while having knowledge that the people

21 with the best knowledge about the process were located in Hong Kong or in China, insisted that any
22 declaration be from a U.S. representative of a U.S. company. Apparently, SRDT was not concerned
23 about "preserving" any evidence and information when it refused to accept information from China two

24 years ago.
25 More recently, in November 2007, SRDT was offered a declaration from a Chinese or Hong

26 Kong national about the overmold process used to manufacture the housings for the accused Ridgid27 branded products (Mallin decl., x. 6). SRDT's counsel rejected that offer alleging that such declarations
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-4EMERSON ELECTRIC CO.'S, RIDGE TOOL COMPANY'S, RIDGID INC.'S AND ONE WORLD TECHNOLOGIES, INC.'S OPPOSITION TO PLAINTIFF'S MOTION FOR EXCEPTION TO STA Y TO PRESERVE EVIDENCE 3:08-CV-00060-BTM-CAB

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would not be admissible and could not be used in U.S. Courts3 (Mallin decl., Ex. 6). However, as SRDT
2 was advised in a letter dated November 30, 2007, 28 USC § 1746 specifically provides for the use of
3 declarations executed outside the United States and pursuant to 28 USC § 1746, courts do and have
4 accepted declarations from persons located in both Hong Kong and China (Mallin decl., Ex. 6). For

5 example, in Commodity Futures Trading Comm 'n v. Topworth Intl Ltd., 205 F.3d 1107, 1112 (9th Cir.
6 2000), the district court rejected a declaration of Mr. Yu from Hong Kong because it allegedly did not

7 meet the requirements of 28 USC § 1746. The Ninth Circuit held that that the district court's rejection
8 was improper as it did comply with § 1746, and made Mr. Yu's declaration part of

the record. Likewise,

9 in American Home Assurance Co. v. Zim Jamaica, 296 F. Supp.2d 494, 496-99 (S.D.N.Y. 2003), the
10 court accepted declarations from Assad Najm, the manager of a company in Guangzhou, China and Lao

11 Xiji, a truck driver who delivered cargo from Guangzhou to the Port of China as part of a motion for
12 summary judgment. This legal authority was expressly brought to the attention of SRDT's counsel

13 (Mallin decl., Ex. 6). Not surprisingly, SRDT never responded to this portion of the letter.
14 Most recently, in January 2008, SRDT was provided with a declaration from Mr. William Chen,

15 the tooling manager at Techtronic Industries Co. Ltd ("TTI") (Mallin decl., Ex. 7). Mr. Chen's
16 declaration sets forth the details of the overmold process used for the housings on all the Ridgid-branded

17 products identified in the complaint as well as the housings having overmolds for all other Ridgid-

18 branded products for the past six years (Mallin decl., Ex. 7). However, because this declaration makes
19 clear that the process used is plainly outside the scope of the patent claims, SRDT's counsel rejected it.

20 SRDT's counsel's purported reason for rejecting the declaration was that based on its "prior extensive
21 research into the issue of admissibility of declarations from Chinese nationals and general requirements

22 in the Federal Rules of Evidence," SRDT's counsel concluded that the declaration "does not rise to the

23 level of admissible evidence" (Mallin decl., Ex. 8). Not surprisingly, SRDT's rejection of the Chen
24 declaration did not address the court decisions in Commodity Futures Trading Comm 'n v. Topworth Int 'I
25 Ltd., 205 F.3d 1107, 1112 (9th Cir. 2000) and American Home Assurance Co. v. Zim Jamaica, 296 F.

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-5EMERSON ELECTRIC CO.'S, RIDGE TOOL COMPANY'S, RIDGID INC.'S AND ONE WORLD TECHNOLOGIES, INC.'S OPPOSITION TO PLAINTIFF'S MOTION FOR EXCEPTION TO STA Y TO PRESERVE EVIDENCE 3:08-CV-00060-BTM-CAB

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1 Supp.2d 494, 496-99 (S.D.N.Y. 2003), and the results of SRDT's "extensive research" were not
2 disclosed.4 Likewise, SRDT has not disclosed its "extensive research" in the instant motion.
3 In view ofSRDT's rejection for the past 2 years of

the very information it now seeks, SRDT's

4 claim that lifting the limited stay to preserve that information is not persuasive, and the motion should be
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5 denied.

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CONCLUSION

7 SRDT has not set forth even a single specific, valid reason for a limited exception to the stay.
8 SRDT's present motion is instead consistent with its strategy to run up defendants' costs and expenses in
9 an attempt to obtain a settement. SRDT should not be rewarded for its strategy and the motion should

lObe denied. In the alternative, if the limited stay is lifted, then SRDT should be required to pay all costs
11 and expenses incurred by defendants in connection with all of

the discovery being sought.

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14 Date: August 6, 2008

MORRS POLICH & PURDY, LLP

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By:

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slKristina M. Pfeifer Kristina M. Pfeifer Attorneys for Defendants EMERSON ELECTRIC CO.; RIDGE TOOL COMPANY; RIDGID INC.; and ONE WORLD TECHNOLOGIES, INC.

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4 The only case relied upon by SRDT was United States v. Oudevenko, 2001 WL 253027 (E.D. N.Y. Mar. 7,2001) (Mallin

dee\., Ex. 6). That case however, is not on point or even applicable here. In Oudevenko, the defendant was prohibited from
using depositions as a substitute for testimony at a criinal tra\. The court held that the defendant did not meet the
"exceptional circumstances" requiement of Rule 15(a) ofthe Federal Rules of Criminal Procedure. The Rules of

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Criminal

Procedure have nothing to do with this situation and have no bearing on a civil proceeding.

5 SRDT's claim that it has received "contradictory information" about "where and how the Accused Products are

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manufactued" is untrue. SRDT has been advised all along that the Accused Products are manufactued by Techtronic Industries Co. Ltd. ("ITl'), although ITI contracts out the fabrication of some of the many components of the Accused Products. Indeed, the declaration of Mr. Chen verifies this fact (Mallin dec\., Ex. 7). Additionally, SRDT's reliance on the deposition testimony of Robert A. Bugos provides no support for this motion. That testimony was taken in a products liability lawsuit involving a miter saw that is not one of the Accused Products in this case (Mallin dec\., Ex. 9, p. 8). In any

-6EMERSON ELECTRIC CO.'S, RIGE TOOL COMPANY'S, RIDGID INC.'S AND ONE WORLD TECHNOLOGIES, INC.'S OPPOSITION TO PLAITIFF'S MOTION FOR EXCEPTION TO STAY TO PRESERVE EVIDENCE 3:08-CV-00060-BTM-CAB