Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

United Services Automobile Association v. Wells Fargo Bank, N.A.

United States District Court, E.D. Texas, Marshall Division

December 17, 2019

UNITED SERVICES AUTOMOBILE ASSOCIATION, Plaintiff,
v.
WELLS FARGO BANK, N.A., Defendant.

          MEMORANDUM OPINION AND ORDER

          ROY S. PAYNE UNITED STATES MAGISTRATE JUDGE.

         Defendant Wells Fargo Bank, N.A. (“Wells Fargo”) filed a Motion to Exclude and/or Strike Expert Testimony Provided by Mr. Calman (the “Motion to Strike Calman”), which is now before the Court. (Dkt. No. 83.) After consideration, the Motion to Strike Calman is GRANTED-IN-PART. The Motion to Strike Calman is GRANTED as to paragraphs 54-73, 85-133, and 322-329, and those portions of Mr. Calman's report are STRICKEN. The Motion to Strike Calman is otherwise DENIED.

         Also before the Court is Part II(a) of Wells Fargo's Motion to Strike Portions of the Conte Report (the “Motion to Strike Conte”), which seeks to exclude portions of Dr. Conte's report that incorporate by reference portions of Mr. Calman's report challenged in the Motion to Strike Calman. (Dkt. No. 84 at 2.) After consideration, the Motion to Strike Conte is GRANTED-IN-PART. The Motion to Strike Conte is GRANTED to the extent Dr. Conte's report incorporates the stricken paragraphs of Mr. Calman's report, and such incorporations are likewise STRICKEN. Part II(a) of the Motion to Strike Conte is otherwise DENIED.

         I. DISCUSSION

         a. Mr. Calman's Apportionment Opinion

         Wells Fargo offers three reasons why Mr. Calman's apportionment opinions should be excluded. The Court finds none persuasive.

         Wells Fargo first argues that Mr. Calman's apportionment theories should be struck because they directly contradict Plaintiff United Services Automobile Association's (“USAA”) 30(b)(6) testimony. According to Wells Fargo, Mr. Calman opines that “Wells Fargo does not have commercially viable non-infringing alternatives to the patents-in-suit, ” whereas USAA's 30(b)(6) witness admitted that several non-infringing alternatives exist. (Dkt. No. 83 at 3-4.)

         Even if Mr. Calman's opinions and USAA's testimony were directly contradictory, as Wells Fargo contends, this would not be a sufficient basis to exclude Mr. Calman's testimony. “A Rule 30(b)(6) deposition is admissible against the party designating the representative but is not ‘binding' on the entity for which the witness testifies in the sense of preclusion or judicial admission. . . . Testimony given in a Rule 30(b)(6) deposition is evidence, which, like other deposition testimony, can be contradicted and used for impeachment purposes.” Crompton Greaves, Ltd. v. Shippers Stevedoring Co., 776 F.Supp.2d 375, 392 n.11 (S.D. Tex. 2011); accord Med. Components, Inc. v. Osiris Med., Inc., 226 F.Supp.3d 753, 765 n.5 (W.D. Tex. 2016). USAA is free to elicit testimony from Mr. Calman that contradicts its own prior testimony, and if Wells Fargo believes the testimony is contradictory, it is free to cross-examine Mr. Calman accordingly.

         Wells Fargo relies upon DAC Surgical Partners P.A. v. United Healthcare Services, Inc. for the proposition that a party may not later contradict its own 30(b)(6) testimony. No. 4:11-cv-1355, 2016 WL 7157522, at *3 (S.D. Tex. Dec. 7, 2016). However, DAC addressed a motion to strike summary judgment evidence and thus relied upon an exception to the general rule-that a party may contradict its prior testimony-applicable only in the summary judgment context. See id. at 5. “It is well settled that this court does not allow a party to defeat a motion for summary judgment using an affidavit that impeaches, without explanation, sworn testimony.” S.W.S. Erectors, Inc. v. Infax, Inc., 72 F.3d 489, 495 (5th Cir. 1996). This exception is not applicable here.

         Wells Fargo next argues that Mr. Calman has violated the entire market value rule because “Mr. Calman . . . attributes all of the profit saved from avoided duplicate check deposits to the Asserted patents.” (Dkt. No. 83 at 3 (emphasis in original).) “[A] patentee may assess damages based on the entire market value of the accused product only where the patented feature creates the basis for customer demand or substantially creates the value of the component parts.” Virnetx, Inc. v. Cisco Sys., Inc., 767 F.3d 1308, 1326 (Fed. Cir. 2014) (emphasis in original). But Mr. Calman does not claim the entire market value of the accused product, which is Wells Fargo's Mobile Deposit system. Rather, as Wells Fargo itself states, he claims “the profit saved from avoided duplicate check deposits.” (Dkt. No. 83 at 3.) The Court is satisfied that Mr. Calman has done enough “to estimate what portion of the value of [the accused] product is attributable to the patented technology.” Virnetx, 767 F.3d at 1327. Mr. Calman has not violated the entire market value rule because he does not claim the entire value of Wells Fargo's Mobile Deposit system.

         The Court agrees with USAA that “Wells Fargo's complaint appears to be that, once Mr. Calman apportioned down to the specific duplicate check-detection technique claimed by the asserted patents, he attributed all of the value of that feature to the asserted patents.” (Dkt. No. 93 at 3.) Wells Fargo argues that this is inappropriate because other non-infringing alternatives are available to avoid duplicate check fraud. (Dkt. No. 83 at 4-5; Dkt. No. 103 at 3-4.) This goes to the weight rather than the admissibility of the evidence.

         Finally, Wells Fargo argues that Mr. Calman's apportionment opinion improperly relies upon the “rule of thumb” because he “attributes 25% of non-duplicate, non-on-us MRDC fraud prevention to the Asserted patents.” (Dkt. No. 83 at 5.) USAA disagrees with Wells Fargo that Mr. Calman “fails to provide any analytical support-or any justification whatsoever-for this 25% factor.” Rather, USAA argues, Mr. Calman analyzed data and Wells Fargo's corporate testimony related to other non-fraud, non-on-us avenues of loss prevention and found that each relied heavily, if not entirely, on the Asserted patents. (Dkt. No. 94 at 4-5; see also Dkt. No. 94-2 ¶ 425.) Accordingly, Mr. Calman “conservatively estimate[d] that at least a further 25%, and likely more, of the ‘other losses' category is attributable to the patented inventions.” (Dkt. No. 94-2 ¶ 425.)

         The Federal Circuit has held that “[e]vidence relying on the 25 percent rule of thumb is . . . inadmissible under Daubert and the Federal Rules of Evidence, because it fails to tie a reasonable royalty base to the facts of the case at issue.” Uniloc USA, Inc. v. Microsoft Corp., 632 F.3d 1292, 1315 (Fed. Cir. 2011). It has not held that any apportionment of 25% necessarily violates this rule or even that there should be such a presumption. Rather, it reiterated the general rule that “the patentee must ‘sufficiently [tie the expert testimony on damages] to the facts of the case.” Id. (alteration in original) (citing Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579, 591 (1993)). The Court finds that Mr. Calman has sufficiently tied his analysis to the facts of this case and thus has not improperly relied upon the 25 percent rule of thumb.

         b. Mr. Calman's ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.