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

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FENNEMORE CRAIG Jordan Green (No. 001860) 3003 North Central Avenue Suite 2600 Phoenix, Arizona 85012-2913 Telephone: (602) 916-5000 Email: [email protected] Attorneys for Defendant Avnet, Inc.

UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA DAN COOGAN, doing business as Coogan Photographic, Plaintiff, No. CV2004-0621 PHX SRB

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v.
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AVNET, INC., a foreign corporation, Roy Vallee and Jane Doe Vallee, husband and wife; and ALLEN MAAG and JANE DOE MAAG, husband and wife, Defendants.

DEFENDANTS'RESPONSE TO PLAINTIFF' MOTION FOR S DISQUALIFYING DEFENDANTS' EXPERT JOHN TROTTO AS AN EXPERT WITNESS AND TO EXCLUDE HIS REPORT AND TESTIMONY FROM EVIDENCE

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(Assigned to the Honorable Susan R. Bolton) Plaintiff' Motion for Disqualifying Defendants' Expert John Trotto as an Expert s

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Witness and to Exclude his Report and Testimony from Evidence ("Motion to
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Disqualify") should be denied because:
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1.
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Mr. Trotto' testimony is relevant on the issue of Plaintiff' alleged actual s s

damages;
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2.
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Mr. Trotto is properly qualified and his opinions are based on sufficient

facts and reliable principles; and 3.
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F ENNEMORE C RAIG
PROFESSIONAL CORPORATION P HOENIX

Mr. Trotto' alleged bias is a credibility question for the trier of fact, not an s

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issue regarding his competency to testify. Plaintiff' Motion is based on inaccurate assumptions and conclusions, and s improper application of the law. Therefore, Plaintiff' Motion to Disqualify should be s denied. I. BACKGROUND In 2001, Plaintiff produced photos of Defendant Avnet' CEO, Roy Vallee ("the s Vallee Photographs"), pursuant to a photography assignment from Upside Magazine. See Plaintiff' Complaint at ¶ 10. Upside Magazine provided one of the Vallee Photographs s s to Avnet. See Plaintiff' Complaint at ¶ 11.1 Upside Magazine went out of business and failed to pay Plaintiff for the Vallee Photographs. See Plaintiff' Complaint at ¶ 12. s In April 2002, Plaintiff and Avnet entered into a Contract in which Avnet agreed to pay plaintiff $2,500 for previous uses of the Vallee Photograph and rights to use three to five additional photographs from the same photo shoot in Avnet publications for a period of one year. See Plaintiff' Complaint at ¶ 13. The Contract provided that Avnet did not s have the right to use the Vallee Photographs in Avnet' Annual Report or transfer the s photographs to third parties. Id. Avnet used the photographs in a manner that exceeded the agreed terms. See Plaintiff' Complaint at ¶ ¶ 22-49. Plaintiff filed suit on March 29, s 2004 seeking recovery for his alleged actual damages incurred as a result of the unauthorized use. See Plaintiff' Complaint at ¶ 56. s Avnet disclosed John Trotto as its expert regarding the fair market value of the Vallee Photographs. See Exhibits A and B attached to Plaintiff' Motion to Disqualify. s Mr. Trotto has 25 years of experience bidding and pricing photography as a professional photographer in Phoenix. See Exhibit B at p. 13; Deposition of John Trotto, attached as Exhibit C to Plaintiff' Motion to Disqualify, at p. 12:13-14. Plaintiff and Mr. Trotto are s
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Upside Magazine provided one Vallee Photograph to Avnet. However, Plaintiff' s Complaint alleges that Avnet "was given at least some of the Vallee Photographs." See Complaint at ¶ 11.
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direct competitors in the Phoenix market. See Exhibit C at p. 123:23-25. Mr. Trotto previously employed Plaintiff as a contract labor assistant. See Exhibit B at p. 2. Mr. Trotto' report explains the numerous factors that influence photography s licensing terms and pricing. See Exhibit B at pp. 3-8. His report also discusses Mr.

Trotto' prior pricing of projects for Avnet similar to Plaintiff' creation of the Vallee s s Photographs. See Exhibit B at pp. 6, 10-11. II. ANALYSIS A. Mr. Trotto' Testimony Is Relevant To Plaintiff' Alleged Actual Damages. s s

Mr. Trotto' testimony is offered solely on the issue of the fair market value of the s Vallee Photographs at the time of the alleged unauthorized use. In copyright infringement cases a plaintiff can recover its "actual damages" and the defendant' profits derived from the infringement. 2 s Goldwyn-Mayer, Inc., 772 F.2d 505, 512 (9th Cir. 1985). Frank Music Corp. v. Metro"Actual damages represent the

extent to which infringement has injured or destroyed the market value of the copyrighted work at the time of infringement." See Nimmer on Copyright, § 14.02[A]; see also Mackie v. Reiser, 296 F.3d 909, 917 (9th Cir. 2002). To determine a work' "market s value" at the time of the infringement, the Ninth Circuit uses a hypothetical approach: "what a willing buyer would have been reasonably required to pay to a willing seller for [the owner' work." Id. at 917, citing Frank Music, 772 F.2d 505 at 517. As explained s] in Frank Music, "the test is not what some buyer was willing to pay, but what a buyer would have been willing to pay for a use of plaintiff' work similar to defendant' use. In s s other words, the Krofft test seeks to approximate what a reasonable market price would have been at the time of the infringement, not afterwards." 772 F.2d at 513, n. 6, citing Sid & Marty Krofft Television Productions, Inc. v. McDonald' Corp., 562 F.2d 1157, s
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F ENNEMORE C RAIG
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Defendants' profits are not relevant to Plaintiff' Motion because Mr. Trotto will not s offer an opinion on that issue.
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1174 (9th Cir. 1977) (emphasis in original). Since Mr. Trotto's testimony is relevant to the amount of Plaintiff' alleged actual s damages, Plaintiff' Motion to Disqualify should be denied. s B. Mr. Trotto Is Qualified To Opine On The Fair Market Value Of The Photographs.

Plaintiff argues that Mr. Trotto is not qualified to offer an expert opinion on the fair market value of the subject photographs because he is an "assignment photographer" and
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the subject photographs are "stock photos."
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1.
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The subject photographs are not "stock photos".

Plaintiff claims that he sold the subject photos to Defendants as "stock photography." See Motion at p. 6. In support of his argument, Plaintiff cites Baker v.
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Urban Outfitters, Inc., 254 F. Supp.2d 346 (S.D.N.Y. 2003) and defines "stock
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photography" as "photography that the photographer already has on hand." Id. Plaintiff
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further claims that:
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With assignment photography, generally either the purchaser buys all rights to the photograph(s), or the purchaser is granted a limited license and the photographer retains the rights. If the photographer retains the rights, he may later sell these photographs to another purchaser as stock photography, i.e., photography already in his portfolio. Id. This is an incomplete explanation of the differences between assignment and stock photography. "Assignment photography is new photography, commissioned and paid for by a client." Michael Heron & David MacTavish, Pricing Photography, The Complete Guide to Assignment and Stock Prices (rev. ed. 1997), attached as Exhibit 1, at p. 7.3 With assignment photography, photographers sell their ability to create a photograph as well as the rights for the client to reproduce that photograph for a specific usage and time period. The Baker court cited and relied on Heron & MacTavish in analyzing the relevant differences between assignment and stock photography. 254 F. Supp. 2d at 354.
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Id. With "stock photography" a photographer sells rights to reproduce an already existing photograph. Id. One critical distinction between assignment and stock photography is who bears the cost of production of the photo. Id. at 13, 15. In assignment photography "all costs associated with production are borne by the client in exchange for the first use of the image." Id. at p. 13. The photographer typically incurs stock photography

production costs. Id. at p. 15. When a client wishes to use a photograph it purchased as an "assignment photo," beyond the original permitted use period, it pays the photographer s] a "reuse fee." Id. at 13. A "reuse fee" is "when a client reuses [the photographer' assignment photographs. If negotiated at the time of the original assignment, additional use is usually part of the Creative Fee. If done at a later date, these fees may be

negotiated and invoiced as Re-Use Fees, similar to stock reproduction fees." Id. Reuse of an assignment photo is clearly distinct from the purchase of rights to use a stock photo. The relevant dispute in this case is over Plaintiff' "actual damages" arising out of s the alleged unauthorized reuse of assignment photography, not the unauthorized use of a stock photo. 4 Comparison of the photographs at issue in this case and the stock photos in Baker makes this distinction clear. In Baker, plaintiff, a professional photographer, took a series of photographs during a road trip in 1999. 254 F. Supp. 2d at 349. During the trip, plaintiff took a photograph of a man in a cowboy hat leaping from one boxcar to another (the "Boxcar Photo"). Id. A collection of the photographs from plaintiff's trip, including the Boxcar Photo, was subsequently published in 1999 in a hardcover book entitled "66/99 An American Road Trip." Id. Between September 2000 and March 2001, the defendant used the Boxcar Photo without plaintiff' authorization as a disposable paper s insert in its 8x10 picture frame products. Id. The Boxcar Photograph was not created as
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Defendants anticipate that Plaintiff will cite Mr. Trotto' statement in his deposition that s he considered the Vallee Photographs to be stock photos because they were already in existence. See Exhibit C at p. 60:16-23. Avnet' counsel objected during the deposition s on foundation grounds. Id. As explained below, Mr. Trotto' statement is not dispositive s of the nature of the Vallee Photographs.
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an assignment photograph.

Plaintiff and defendant had no relationship prior to the

creation, publication and unauthorized use of the Boxcar Photo. Id. Defendant sought exclusion of plaintiff's expert on the calculation of damages plaintiff suffered as a result of the unauthorized use of the Boxcar Photo. Id. at 352. The court examined the differences between assignment and stock photography and excluded the expert, in part, because she had inadequate credentials and experience with regard to stock photography. Id. at 353-54. [T]he damages issue at hand is the value of [defendant' s] unauthorized use of the Photograph, a work that was indisputably in existence prior to [defendant' use. As such, s] the record is clear that it is referred to as a "stock" photograph. See ASMP, Professional Business Practices in Photography (6th ed. 2001) at 49 ("Simply stated, stock photography is existing photography...."). ... ` Assignment photography is new photography, commissioned and paid for by a client. We photographers are selling our ability to create a photograph and also the rights for the client to reproduce that photograph for a very specific usage and time period. In stock photography we are selling (licensing) rights to reproduce an already existing photograph.' Michael Heron & David MacTavish, Pricing Photography (rev. ed.1997) at 7. 254 F. Supp.2d at 353 (internal record citations omitted). Plaintiff argues that the Vallee Photographs are stock photos based on the Baker

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court' limited definition of stock photography as a work in existence prior to the s
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unauthorized use. See Motion at p. 6. Although that limited definition was sufficient for
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the Baker court to compare assignment and stock photography, it is not applicable in this
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case.
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F ENNEMORE C RAIG
PROFESSIONAL CORPORATION P HOENIX

Plaintiff created the Vallee Photographs on commission for Upside Magazine. 5
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As explained above, Upside Magazine failed to pay Plaintiff. Avnet stepped in and paid for the project, effectively assuming Upside Magazine' status as Plaintiff' client on the s s photography assignment.
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Plaintiff alleges that Defendants used the Vallee Photographs beyond the agreed scope or timeframe. He does not allege that the photographs were created for a different client or general stock purposes. Since Plaintiff is seeking damages for the unauthorized reuse of assignment photographs, the Court should reject Plaintiff' argument that Mr. Trotto is not s qualified to offer expert testimony on their fair market value and should deny Plaintiff' s Motion to Disqualify. 2. Mr. Trotto is qualified by relevant experience to offer expert testimony.

Courts may apply several factors in assessing reliability, such as (1) whether the expert's technique or theory can be or has been tested; (2) whether the technique or theory has been subject to peer review and publication; (3) the known or potential rate of error of the technique or theory when applied; (4) the existence and maintenance of standards and controls; and (5) whether the technique or theory has been generally accepted in the scientific community. See Groobert v. President & Directors of Georgetown College, 219 F. Supp. 2d 1, 6 (D.C. Cir. 2002), citing Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579, 593-94, 113 S.Ct. 2786 (1993). However, these factors are neither exclusive nor dispositive, and their application depends on the particular facts of each case. Groobert, 219 F. Supp. 2d at 6, citing Kumho Tire Co. v. Carmichael, 526 U.S. 137, 150, 119 S.Ct. 1167 (1999). In cases where these factors do not apply, reliability concerns may focus on personal knowledge or experience. Id. The gatekeeping inquiry is "flexible" and "the law grants a district court the same broad latitude when it decides how to determine reliability as it enjoys in respect to its ultimate reliability determination." Id. In Groobert, plaintiff sued for wrongful death arising out of the alleged negligent medical treatment of his wife. 219 F. Supp. 2d at 3-4. Plaintiff' wife owned a s

photography business and specialized in stock photography. Id. Plaintiff offered two experts with experience in the stock photography industry to offer opinions regarding lost

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future earnings from the photography business. Id. at 5. Defendant moved for partial summary judgment, arguing that the one of the experts lacked the requisite degree of reliability because his personal experience in stock photography was not a sufficient basis for an expert opinion regarding the lost future earnings, he lacked training or experience in evaluating the careers of other photographers, and his personal knowledge of decedent' career was incomplete and insufficient to support a valid expert opinion. Id. at s 6-8. The defendant also argued that the expert based his conclusions on "occasional anecdotal conversations with [decedent] and the photographs that she showed him," which was "the same subjective, conclusory approach disfavored under Daubert." Id. The court denied the motion, stating: [D]efendant fails to recognize, however, that the standard under Federal Rule of Evidence 702 is a liberal and ` flexible' one, and that personal experience can be a reliable and valid basis for expert testimony. This is particularly true with nonscientific testimony, where the Daubert factors may not apply because the issue is ` highly particular and has not attracted scientific scrutiny.' The Supreme Court has recognized that ` factors identified in Daubert may or may not be pertinent the in assessing reliability, depending on the nature of the issue, the expert's particular expertise, and the subject of his testimony.' Id. at 7 (internal citations omitted). The court held that personal experience was the proper method for assessing the reliability of the expert because the defendant failed to refute the plaintiff's claim that "expert opinions in an art field simply must be based in large part on the experience and understanding of the expert witness" because "there are no experiments that can be done or peer review in which to engage." Id. The court simply could not evaluate the expert' reliability "based on such Daubert factors as s ` whether the expert's technique or theory can be or has been tested' or ` whether the technique or theory has been subject to peer review and publication' due to the lack of information on the subject." Id. Similarly, in this case, pricing of photography is influenced by numerous variables

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including local market competition, the quality of the photography, the photographer's length of experience, the photographer's relationship with the client and other market forces. See Exhibit B at pp. 4-7; Exhibit C at pp. 77:2-79:7. Simply stated, there is no "industry standard" for pricing- prices are driven by supply and demand. See Exhibit C at pp. 181:11-182:9. These variables are not subject to "such Daubert factors as ` whether the expert's technique or theory can be or has been tested' or ` whether the technique or theory has been subject to peer review and publication' due to the lack of information on the subject." 219 F. Supp. 2d at 6-8. s Plaintiff' reliance on Baker to argue that Mr. Trotto' opinions are unreliable is s misplaced. Unlike this case, the Baker photos were actually stock photography. Further, the court held that plaintiff' expert testimony was unreliable because: s 1. the expert' opinions focused on pricing methods associated solely with s

commissioned photography, including a "base fee" for the license based on plaintiff's daily fee for a commissioned shoot for advertising assignments. Id. at 354. 2. The expert' report stated that the $10,000 "base fee," was "typical or low s

for [plaintiff]." However, during her deposition she admitted that those statements were inaccurate. Id. at 354-55. 3. The expert doubled the base fee to arrive at a suggested fee of $20,000, that

she claimed was "based on the usage" in contradiction to her reference to the fee as the "Pre-Usage Base License Fee" in her report. Further, the 100% increase in the base fee was entirely without support in the record. Id. at 355. 4. The expert added $200,000 for the unauthorized usage, calculated using the

"industry practice" of charging "a fee of ten (10) times the normal reproduction charge for unauthorized usage." The industry practice of using a "ten times" multiplier related to the cost of commissioning an entirely new photograph, not the normal reproduction cost of an already-existing photograph. Id.

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5.

The expert added a

$10,000 "Model fee" for which she provided no

explanation other than her assertion that the plaintiff was "contractually required to compensate the model," an assertion without any support in the record. Id. 6. Finally, the expert included a calculation, unsupported in the record, for

$40,000 based upon "industry practice" for the colorization and addition of the defendant' logo to the photograph. Id. s None of these factors are present in this case. Mr. Trotto' deposition testimony s does not contradict his report, 6 he does not offer unsupported fees or multipliers of fees and his analysis of the market value of the Vallee Photographs is based on reliable facts and methods, including comparison of prices and bids from both Plaintiff and Mr. Trotto for similar work for the same client- Avnet. C. Mr. Trotto' Alleged Bias Is A Credibility Issue For The Fact Finder. s

Plaintiff argues that Mr. Trotto should be disqualified as an expert because his "testimony is extremely prejudicial due to his extensive biases." See Motion at p. 16. "Evidence of bias goes toward the credibility of a witness, not his competency to testify, and credibility is an issue for the jury." U.S. v. Abonce-Barrera, 257 F.3d 959, 965 (9th Cir. 2001). The two cases cited by Plaintiff are readily distinguishable. See Motion at p. 16, citing Campbell Industries v. M/V Gemini, 619 F.2d 24, 27 (9th Cir. 1980) and Koch Ref. Co. v. Boudreaux M/V, 85 F.3d 1178, 1181 (5th Cir. 1196). Both Campbell and Koch involve the disqualification of experts as a discovery sanction where the party offering the expert had inappropriate ex parte contacts with the expert. See Campbell, 619 F.2d at 26-27; Koch, 85 F.3d at 1181-82 (expert preclusion affirmed due to improper Plaintiff claims that "in his deposition, Trotto was unable to substantiate dozens of statements made in his Report." See Motion to Disqualify at p. 13. Specifically, Plaintiff cites alleged inaccuracies regarding the dates of incorporation of Mr. Trotto' business s and his employment of Plaintiff. Id. These alleged inaccuracies are irrelevant to Mr. Trotto' opinions on the fair market value of the Vallee Photographs, the reliability of his s methods or his qualifications.
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ex parte contacts with opposing party' retained expert). s In Campbell, the plaintiff retained an expert to prepare a report and testify at trial. Campbell, 619 F.2d at 26. Prior to trial defendant sought an order permitting it to depose the expert. Id. An affidavit submitted by defendant in support of the motion revealed that it had made several ex parte contacts with plaintiff' expert. Id. Based on the ex parte s contacts, or otherwise, the expert had apparently agreed to testify on defendant' behalf. s Id. As a sanction for defendant' "flagrant violation" of the rules governing discovery of s expert witnesses, the trial court issued an order precluding testimony by the expert at trial. Id. The 9th Circuit affirmed, holding that preclusion of the expert was within the trial court' discretion and did not unduly prejudice defendant' case because its own hired s s experts testified on the same issues at trial. Id. at 27. The alleged bias is not a basis to disqualify Mr. Trotto. Since evidence of bias goes toward the credibility of a witness, not his competency to testify, Plaintiff is free to crossexamine Mr. Trotto about his alleged biases and let the finder of fact weigh his credibility. Abonce-Barrera, 257 F.3d at 965. Disqualification of Defendants' sole expert witness due to alleged bias will severely prejudice their case regarding Plaintiff' alleged actual s damages. See Campbell, 619 F.2d at 27. Conversely, admission of Mr. Trotto' s

testimony will not prejudice Plaintiff because he has an expert regarding damages and can cross-examine Mr. Trotto regarding his alleged bias. Id. Therefore, the Court should deny Plaintiff' Motion to Disqualify. s CONCLUSION Since Mr. Trotto' testimony is relevant on the issue of Plaintiff' alleged actual s s damages, he is properly qualified and his opinions are based on sufficient facts and reliable principles and any alleged bias is a credibility question for the fact finder, the Court should deny Plaintiff' Motion to Disqualify. s

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F ENNEMORE C RAIG
PROFESSIONAL CORPORATION P HOENIX

DATED this 24th day of February, 2006. FENNEMORE CRAIG, P.C.

By s/Jordan Green Jordan Green Attorneys for Defendant Avnet, Inc.

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CERTIFICATE OF SERVICE I hereby certify that on February 24, 2006, I electronically transmitted the attached document to the Clerk' Office using the CM/ECF System for s filing and transmittal of a Notice of Electronic Filing to the following CM/ECF registrants: Jordan Meschkow, Esq. Meschkow & Gresham, P.L.C. 5727 North Seventh Street Suite 409 Phoenix, Arizona 85014-5818

s/Jordan Green
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F ENNEMORE C RAIG
PROFESSIONAL CORPORATION P HOENIX

1766104.1

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