LLC v. LLC (2023)

PROCEEDINGS: Order Granting In Part and Denying in Part Motions in Limine [95], [96], [97], [99], [100], [102], ]104], [105], [106], [107], [108], [109], [110], [111] and Sustaining Defendants' Objections to Plaintiffs' Amended Witness List [132], [133]

Before the court are motions in limine (collectively, “Motions”) filed by Plaintiffs Altaa Investments, LLC, 18150 Tiger, LLC, and Pacific Venture Partners, LLC (collectively, “Plaintiffs”) and Defendants Production Capital, LLC, Kevin Robl, and Ibrahim Mohammed (collectively, “Defendants”). (Dkts. 95-97, 99, 100, 102, 104-11, 123.) Defendants' Motion for Leave for a Witness to Appear Remotely (“Motion for Leave”) is also pending before the court. (Dkt. 124.) The Motions are fully briefed. (Dkts. 95-97, 99, 100, 102, 104-11, 118, 121-23.) On June 1, 2023, the court held a Final Pretrial Conference in this matter. (Dkt. 130.) On June 6, 2023, the court held a Further Pretrial Conference in this matter. (Dkt. 134.) Based on the law, as applied to the applicable facts, the Motions are GRANTED IN PART AND DENIED IN PART. The court's rulings on each individual Motion are summarized at the end of this Order.

In addition, before the court is Plaintiffs' Amended Witness List and Defendants' Objections to Plaintiffs' Amended Witness List (“Defendants' Objections”). (Dkts. 132, 133.) Based on the law, as applied to the applicable facts, Defendants' Objections are SUSTAINED.

I. Legal Standards

a. Motions in Limine

“A motion in limine is a procedural mechanism to limit in advance testimony or evidence in a particular area.” United States v. Heller, 551 F.3d 1108, 1111 (9th Cir. 2009). However, “[a] motion in limine is not the proper vehicle for seeking a dispositive ruling on a claim, particularly after the deadline for filing such motions has passed.” Hana Fin., Inc. v. Hana Bank, 735 F.3d 1158, 1162 n.4 (9th Cir. 2013), aff'd, 574 U.S. 418 (2015). Moreover, “[a] motion in limine is not a proper vehicle by which to seek summary judgment on all or a portion of a claim.” Bakst v. Cmty. Mem'l Health Sys., Inc., 2011 WL 13214315, at *3 (C.D. Cal. Mar. 7, 2011).

Motions in limine are vehicles by which a court may exclude inadmissible or prejudicial evidence before it is “actually offered.” See Luce v. United States, 469 U.S. 38, 40 n.2 (1984). Motions in limine “avoid the futile attempt of unringing the bell when jurors have seen or heard inadmissible evidence, even when stricken from the record”; “streamline trials, by settling evidentiary disputes in advance and by minimizing side-bar conferences and other disruptions at trial”; and “permit more thorough briefing and argument on evidentiary issues than would be likely during trial.” Altair Instruments, Inc. v. Telebrands Corp., 2021 WL 5238787, at *1 (C.D. Cal. Feb. 18, 2021) (cleaned up). “[M]otions in limine must identify the evidence at issue and state with specificity why such evidence is inadmissible.” United States v. Lewis, 493 F. Supp. 3d 858, 861 (C.D. Cal. 2020) (cleaned up) (citation omitted); Jackson v. Cnty. of San Bernardino, 194 F. Supp. 3d 1004, 1008 (C.D. Cal. 2016) (“Motions in limine that seek exclusion of broad and unspecific categories of evidence, however, are generally disfavored.”). “The ‘failure to specify the evidence’ that a motion in limine ‘seek[s] to exclude constitutes a sufficient basis upon which to deny th[e] motion.’ ” Lewis, 493 F. Supp. 3d at 861 (alterations in original) (quoting Bullard v. Wastequip Mfg. Co. LLC, 2015 WL 13757143, at *7 (C.D. Cal. May 4, 2015)).

A ruling on a motion in limine “is essentially a preliminary opinion that falls entirely within the discretion of the district court.” City of Pomona v. SQM N. Am. Corp., 866 F.3d 1060, 1070 (9th Cir. 2017) (citations and internal quotation marks omitted). Because “testimony may bring facts to the district court's attention that it did not anticipate at the time of its initial ruling,” a “district court may change its ruling at trial.” Id. (citations and internal quotation marks omitted); see also Fed. R. Evid. 103, advisory committee's note to 2000 amendment (“Even where the court's ruling is definitive, nothing ․ prohibits the court from revisiting its decision when the evidence is to be offered.”).

b. Admissibility of Relevant Evidence under Federal Rules of Evidence 401, 402, and 403

Federal Rule of Evidence 402 provides that “[r]elevant evidence is admissible” unless the U.S. Constitution, a federal statute, the Federal Rules of Evidence, or “other rules prescribed by the Supreme Court” provide otherwise. Fed. R. Evid. 402. Evidence is “relevant” if: (1) “it has any tendency to make a fact more or less probable than it would be without the evidence”; and (2) “the fact is of consequence in determining the action.” Fed. R. Evid. 401. “Irrelevant evidence is not admissible.” Fed. R. Evid. 402. Federal Rule of Evidence 403 permits a court to exclude relevant evidence “if its probative value is substantially outweighed by a danger of one or more of the following: unfair prejudice, confusing the issues, misleading the jury, undue delay, wasting time, or needlessly presenting cumulative evidence.” Fed. R. Evid. 403.

c. Admissibility of Expert Testimony under Federal Rule of Evidence 702

Federal Rule of Evidence 702 permits “[a] witness who is qualified as an expert by knowledge, skill, experience, training, or education” to “testify in the form of an opinion or otherwise” if: (1) “the expert's scientific, technical, or other specialized knowledge will help the trier of fact to understand the evidence or to determine a fact in issue”; (2) “the testimony is based on sufficient facts or data”; (3) “the testimony is the product of reliable principles and methods”; and (4) “the expert has reliably applied the principles and methods to the facts of the case.” Fed. R. Evid. 702. The court serves as a “gatekeep[er]” by “ensuring that an expert's testimony both rests on a reliable foundation and is relevant to the task at hand.” See Daubert v. Merrell Dow Pharms., Inc., 509 U.S. 579, 597 (1993) (“Daubert”); Kumho Tire Co. v. Carmichael, 526 U.S. 137, 147-49 (1999) (expanding Daubert to “all expert testimony”). The Ninth Circuit has provided a roadmap for courts to evaluate expert testimony under these principles:

Under Daubert and Kumho Tire, only relevant and reliable expert opinion testimony is admissible. Expert opinion testimony is relevant if the knowledge underlying it has a valid connection to the pertinent inquiry. And it is reliable if the knowledge underlying it has a reliable basis in the knowledge and experience of the relevant discipline.

․

[I]n evaluating the reliability of scientific expert opinion testimony, trial courts may consider: (1) whether the scientific theory or technique can be (and has been) tested, (2) whether the theory or technique has been subjected to peer review and publication, (3) whether there is a known or potential error rate, and (4) whether the theory or technique is generally accepted in the relevant scientific community.

United States v. Sandoval-Mendoza, 472 F.3d 645, 654-55 (9th Cir. 2006) (citations and internal quotation marks omitted).

While this “list of specific factors neither necessarily nor exclusively applies to all experts or in every case,” the court may consider “one or more” of the Daubert factors to evaluate the reliability of nonscientific expert testimony. Kumho Tire, 526 U.S. at 141 (emphasis removed).

In City of Pomona v. SQM N. Am. Corp., the Ninth Circuit also described Rule 702 and provided a summary of the application of Daubert:

Rule 702 of the Federal Rules of Evidence provides that expert opinion evidence is admissible if: (1) the witness is sufficiently qualified as an expert by knowledge, skill, experience, training, or education; (2) the scientific, technical, or other specialized knowledge will help the trier of fact to understand the evidence or to determine a fact in issue; (3) the testimony is based on sufficient facts or data; (4) the testimony is the product of reliable principles and methods; and (5) the expert has reliably applied the relevant principles and methods to the facts of the case. Fed. R. Evid. 702.

Under Daubert and its progeny, including Daubert II, a district court's inquiry into admissibility is a flexible one. Alaska Rent–A–Car, Inc. v. Avis Budget Grp., Inc., 738 F.3d 960, 969 (9th Cir.2013). In evaluating proffered expert testimony, the trial court is “a gatekeeper, not a fact finder.” Primiano v. Cook, 598 F.3d 558, 565 (9th Cir.2010) (citation and quotation marks omitted).

“[T]he trial court must assure that the expert testimony ‘both rests on a reliable foundation and is relevant to the task at hand.’ ” Id. at 564 (quoting Daubert, 509 U.S. at 597, 113 S. Ct. 2786). “Expert opinion testimony is relevant if the knowledge underlying it has a valid connection to the pertinent inquiry. And it is reliable if the knowledge underlying it has a reliable basis in the knowledge and experience of the relevant discipline.” Id. at 565 (citation and internal quotation marks omitted). “Shaky but admissible evidence is to be attacked by cross examination, contrary evidence, and attention to the burden of proof, not exclusion.” Id. at 564 (citation omitted). The judge is “supposed to screen the jury from unreliable nonsense opinions, but not exclude opinions merely because they are impeachable.” Alaska Rent–A–Car, 738 F.3d at 969. Simply put, “[t]he district court is not tasked with deciding whether the expert is right or wrong, just whether his testimony has substance such that it would be helpful to a jury.” Id. at 969–70.

The test of reliability is flexible. Estate of Barabin v. AstenJohnson, Inc., 740 F.3d 457, 463 (9th Cir. 2014) (en banc). The court must assess the expert's reasoning or methodology, using as appropriate criteria such as testability, publication in peer-reviewed literature, known or potential error rate, and general acceptance. Id.; see also Primiano, 598 F.3d at 564. But these factors are “meant to be helpful, not definitive, and the trial court has discretion to decide how to test an expert's reliability as well as whether the testimony is reliable, based on the particular circumstances of the particular case.” Primiano, 598 F.3d at 564 (citations and quotation marks omitted); see also Barabin, 740 F.3d at 463. The test “is not the correctness of the expert's conclusions but the soundness of his methodology,” and when an expert meets the threshold established by Rule 702, the expert may testify and the fact finder decides how much weight to give that testimony. Primiano, 598 F.3d at 564–65. Challenges that go to the weight of the evidence are within the province of a fact finder, not a trial court judge. A district court should not make credibility determinations that are reserved for the jury.

750 F.3d 1036, 1043–44 (9th Cir. 2014).

II. Plaintiffs' Motions in Limine

a. Plaintiffs' Motion in Limine No. 1 (Dkt. 95)

Plaintiffs seek to preclude Defendants from introducing into evidence an email produced after the discovery cut-off. (See generally Dkt. 95.) Plaintiffs argue the email in question is an August 13, 2021, email between Ibrahim Mohammed and Kevin Robl (Bates number IBRAHIM017092) that was only produced after the discovery cut-off on February 2, 2023, after Mr. Mohammed's deposition, after counsel had confirmed under oath and penalty of perjury that all communications with Mr. Robl had been produced, and after Plaintiffs moved for summary judgment. (Id. at 1-6.) Defendants argue the email only confirms an argument that Defendants have long asserted, the document was produced “after the close of document discovery but well within fact discovery,” Federal Rule of Civil Procedure 26(e)(1) permits supplemental disclosures, and Federal Rule of Civil Procedure 37(c)(1) excuses discovery violations that are “substantially justified” or “harmless.” (Dkt. 123 at 1-11.)

In this case, the court finds that Defendants, in their own words, produced the email “after the close of document discovery.” (Dkt. 123 at 3.) Under Federal Rule of Civil Procedure 37(c)(1), “[i]f a party fails to provide information or identify a witness as required by Rule 26(a) or (e), the party is not allowed to use that information or witness to supply evidence on a motion, at a hearing, or at a trial, unless the failure was substantially justified or is harmless.” The court finds Defendants have not sufficiently demonstrated why the discovery violation was substantially justified or is harmless under Federal Rule of Civil Procedure 37(c)(1). (See generally Dkt. 123.) Accordingly, the court GRANTS Plaintiffs' Motion in Limine No. 1 (Dkt. 95).

b. Plaintiffs' Motion in Limine No. 2 (Dkt. 96)

Plaintiffs seek to preclude Defendants from introducing any evidence or testimony regarding SEC v. Rashid, Case No. 17-CV-8223 (PKC), (S.D.N.Y. 2020) (see Dkt. 135), a Securities and Exchange Commission (“SEC”) action against Ali Rashid, one of Plaintiffs' principals. (See generally Dkt. 96.) Plaintiffs argue evidence regarding the SEC action, which concerns Mr. Rashid's alleged fraud in a prior job, should be excluded under Federal Rule of Evidence 403 and the judgment is currently on appeal. (Id. at 1-4.) Defendants argue the Motion is premature and Federal Rule of Evidence 608(b) permits inquiry on cross-examination into specific instances of conduct “if they are probative of the character for truthfulness or untruthfulness of ․ the witness,” subject to the balancing of Rule 403. (Dkt. 121 at 1-6 (citing Fed. R. Evid. 608(b)(1).)

Under Federal Rule of Evidence 608(a), “[a] witness's credibility may be attacked or supported by testimony about the witness's reputation for having a character for truthfulness or untruthfulness, or by testimony in the form of an opinion about that character.” Fed. R. Evid. 608(a). Under Federal Rule of Evidence 608(b), “extrinsic evidence is not admissible to prove specific instances of a witness's conduct in order to attack or support the witness's character for truthfulness” but “the court may, on cross-examination, allow them to be inquired into if they are probative of the character for truthfulness or untruthfulness of: (1) the witness; or (2) another witness whose character the witness being cross-examined has testified about.” Fed R. Evid. 608(b). Under Federal Rule of Evidence 403, a court may exclude relevant evidence “if its probative value is substantially outweighed by a danger of one or more of the following: unfair prejudice, confusing the issues, misleading the jury, undue delay, wasting time, or needlessly presenting cumulative evidence.” Fed. R. Evid. 403.

In this case, Defendants proffered proposed impeachment questions during the Further Pretrial Conference on June 6, 2023, regarding Mr. Rashid's SEC action and any judicial findings made during that action.¹ The court finds limited cross-examination regarding the SEC action, if used to impeach Mr. Rashid's character for truthfulness under Rule 608(b), does not warrant a blanket exclusion under Rule 403 or Rule 608. The court finds that certain questioning done pursuant to Rule 608(b) is proper and, on balance, the probative value of that evidence relevant to credibility is not substantially outweighed by the dangers enumerated in Rule 403. See Fed. R. Evid. 403.² Accordingly, the court DENIES Plaintiffs' Motion in Limine No. 2 (Dkt. 96) and will allow questioning consistent with Rule 608(b). However, counsel are reminded of the confines of Rule 608(b), including that extrinsic evidence is not permitted, and the confines of Rule 608(a).

c. Plaintiffs' Motion in Limine No. 3 (Dkt. 97)

Plaintiffs seek to preclude Defendants from introducing witnesses and exhibits that were not timely disclosed. (See generally Dkt. 97.) Plaintiffs argue Defendants did not make their Initial Disclosures by April 18, 2022, and instead served the Initial Disclosures on January 17, 2023, shortly before the close of discovery and after the deadline for motions to compel had passed. (Id. at 1.) Plaintiffs argue Defendants' untimely disclosures left Plaintiffs no time to conduct depositions, serve discovery, or seek information about witnesses Matthew Roozee, Michelle Bratcher, Andrew Roque, Paul Salvail, Paul Liang, and Dr. Guy Baker, or any previously undisclosed exhibits. (Id.) Defendants state they do not intend to call Andrew Roque and that consequently, only witnesses Matthew Roozee, Michelle Bratcher, Paul Salvail, Paul Liang, and Dr. Guy Baker remain at issue. (Dkt. 122 at 2.) Defendants argue new counsel appeared in the case on January 5, 2023, the witnesses were disclosed on January 17, 2023, and Plaintiffs could have deposed these individuals between the date of disclosure and the present. (Id. at 3-19.)

During the Final Pretrial Conference on June 1, 2023, the court discussed potential alternative trial dates with the parties in the event of a brief continuance of the trial date and re-opening of fact discovery. On June 4, 2023, Plaintiffs filed a statement regarding the trial date and pending motions in limine stating that Plaintiffs “do not want a continuance of the trial date regardless of how the Court rules on MIL No. 3.” (Dkt. 131 at 2.)

In this case, the court observes the parties were ordered to comply with Federal Rule of Civil Procedure 26 and to file a Joint Report on or before March 21, 2022. (Dkt. 25.) Plaintiffs made their initial disclosures on March 16, 2022. (Dkt. 98 at 2.) The parties' Joint Report notes that Defendants had not served initial disclosures as of March 21, 2022. (Dkt. 39 at 5.) Current defense counsel sought leave to replace prior defense counsel on January 5, 2023 (Dkts. 60, 61, 63), and the court granted those requests on January 6, 2023 (Dkt. 64-66.) Defense counsel made their initial disclosures on January 17, 2023. (Dkt. 97 at 2-3.) The non-expert discovery cut-off was February 2, 2023. (Dkt. 47.) The record does not reflect any request to conduct depositions of or subpoena documents from the witnesses at issue between the date of disclosure on January 17, 2023, and the Final Pretrial Conference on June 1, 2023. (See generally Dkt.)

Based on the record before the court, the court finds at the time Defendants made their initial disclosures, the disclosures were untimely under Federal Rule of Civil Procedure 26 but the discovery cut-off had not yet passed. Moreover, defense counsel made the initial disclosures within approximately two weeks of being retained as substitute counsel and appearing in the case. (See Dkts. 60, 61, 63, 64-66, 97.) Accordingly, the court finds Defendants have sufficiently demonstrated that the discovery violation was substantially justified and/or is harmless under Federal Rule of Civil Procedure 37(c)(1). Additionally, Plaintiffs represent that they would prefer to maintain the current trial date of June 13, 2023, rather than continue the trial date to permit limited discovery regarding the witnesses. (See Dkt. 131 at 2 (“Plaintiffs have decided that they do not want a continuance of the trial date regardless of how the Court rules on MIL No. 3.”)). Accordingly, in its discretion, the court DENIES the Motion.

III. Defendants' Motions in Limine

a. Defendants' Motion in Limine No. 1 (Dkt. 99)

Defendants seek to preclude Plaintiffs from using the terms “Ponzi scheme” or “long con” in argument or testimony at trial or alluding to unrelated corporate scandals such as the Bernie Madoff scandal. (Dkt. 99 at 2.) Defendants do not sufficiently cite to the rule of evidence that would bar use of these terms or references, and instead argue that these terms must be excluded to protect Defendants' right to a fair trial and avoid prejudice. (Id. at 3-7.) Plaintiffs argue the term “Ponzi scheme” accurately describes the scheme alleged in this case. (Dkt. 118 at 10-13.) At the Final Pretrial Conference on June 1, 2023, Plaintiffs' counsel indicated that counsel would not discuss unrelated corporate scandals or use the term “long con” at trial but would use the term “Ponzi scheme.”

The court DENIES Defendants' Motion in Limine No. 1 (Dkt. 99) as to the term “Ponzi scheme.” See United States v. Ruskjer, 2011 WL 3841854, at *4 (D. Haw. Aug. 29, 2011) (denying motion in limine to exclude use of term “Ponzi scheme” because “[t]he term ‘Ponzi scheme’ directly describes the underlying nature of [Defendant's] alleged criminal conduct and is fundamentally relevant to his mail and wire fraud charges”).

b. Defendants' Motion in Limine No. 2 (Dkt. 100)

Defendants seek to preclude Plaintiffs from introducing evidence about Remington Chase and Knightsbridge Entertainment, Inc. on the grounds that this evidence concerns unrelated parties and frauds. (Dkt. 100 at 2.) Plaintiffs argue their theory of the case depends, in part, on the allegation that Mr. Mohammed failed to disclose Production Capital's relationship to Knightsbridge and Chase and that had he done so, Plaintiffs would not have invested in the deals. (Dkt. 118 at 13-18.) Plaintiffs argue that, for example, Production Capital's marketing materials to investors touted that Knightsbridge Capital was a co-investing partner and by the time Mr. Mohammed pitched the finance deals at issue in this case, he knew that Knightsbridge had been exposed as a Ponzi scheme in a separate SEC action. (Id. at 14-18.)

The court DENIES Defendants' Motion in Limine No. 2 (Dkt. 100). The court finds evidence about Remington Chase and Knightsbridge Entertainment, Inc. is relevant to Plaintiffs' fraud and RICO claims. See CACI No. 1900 (the elements of intentional misrepresentation include that the defendant represented that a fact was true, the representation was false, defendant knew that the representation was false or made the representation recklessly without regard for its truth). Moreover, on balance, the court finds the probative value of the evidence is not substantially outweighed by the dangers enumerated in Rule 403. See Fed. R. Evid. 403.

c. Defendants' Motion in Limine No. 3 (Dkt. 102)

Defendants seek to preclude Plaintiffs from introducing testimony as to whether a particular statement was “material” on the grounds that such testimony is an improper legal conclusion. (See generally Dkt. 102.) Defendants argue that Plaintiffs intend to improperly use the testimony of Mr. Mohammed and his expert witness, Ellen Pittleman, to establish materiality. (Id. at 5-6.) Plaintiffs argue Mr. Mohammed and Ms. Pittleman both testified at their depositions about the materiality of certain misrepresentations and that their testimony can be considered by the jury. (Dkt. 118 at 18-20.)

In this case, the court finds that permitting Mr. Mohammed and Ms. Pittleman to testify on whether a misrepresentation was “material” would constitute testimony on an ultimate legal conclusion. See United States v. Bilzerian, 926 F.2d 1285, 1294 (2d Cir. 1991) (“[A]lthough an expert may opine on an issue of fact within the jury's province, he may not give testimony stating ultimate legal conclusions based on those facts.”); In re Blech Sec. Litig., 2003 WL 1610775, at *21 (S.D.N.Y. Mar. 26, 2003) (holding that an expert could “testify from the records that there was a delay in settling the trade․ and what in his opinion the delay might have caused” but “cannot determine the legal significance of documentary evidence”). Mr. Mohammed and Ms. Pittleman may testify as to why a statement may have been a consideration in an investing decision but may not testify and/or offer the conclusion as to whether any alleged misrepresentation was “material.” Accordingly, Defendants' Motion in Limine No. 3 (Dkt. 102) is GRANTED.

d. Defendants' Motion in Limine No. 4 (Dkt. 104)

Defendants seek to preclude Plaintiffs from introducing evidence about the liability or damages owed by defaulted Defendants Kevin Robl and Production Capital. (See generally Dkt. 104.) Defendants argue this evidence is irrelevant, cumulative, and has no probative value to the claims against Mr. Mohammed. (Id. at 9-12.) Plaintiffs oppose any blanket exclusion of any evidence related to Mr. Robl and Production Capital because the wrongdoing of these parties is directly related to Plaintiffs' claims against Mr. Mohammed. (Dkt. 118 at 20-21.) Plaintiffs argue certain claims, such as the RICO conspiracy claim, requires the showing of an agreement between two or more persons, and necessarily requires evidence of Mr. Mohammed and Mr. Robl's agreement and conduct. (Id. at 21.)

The court DENIES Defendants' Motion in Limine No. 4 (Dkt. 104). See, e.g., Oki Semiconductor Co. v. Wells Fargo Bank, Nat. Ass'n, 298 F.3d 768, 774 (9th Cir. 2002) (a RICO conspiracy requires an agreement to violate RICO). On balance, the court finds the probative value of the evidence is not substantially outweighed by the dangers enumerated in Rule 403. See Fed. R. Evid. 403.

e. Defendants' Motion in Limine No. 5 (Dkt. 105)

Defendants request that the court give a “specific unanimity” instruction so that the jury must unanimously agree on each finding against Mr. Mohammed and on what alleged misrepresentation satisfies each element of each claim. (See generally Dkt. 105.) Defendants argue there is a risk that the jury will conflate statements made by other parties and translate that into findings that Mr. Mohammed is liable. (Id. at 6-7.) Plaintiffs argue Defendants are requesting a jury instruction instead of presenting a proper motion in limine, and Defendants' arguments do not track the law on unanimity. (Dkt. 118 at 21-22.)

The court DENIES Defendants' Motion in Limine No. 5 (Dkt. 105). See Aslan v. Ferrari N. Am., Inc., 2018 WL 6321635, at *1 (C.D. Cal. Oct. 19, 2018) (“A motion in limine is not the proper vehicle for requesting jury instructions.”).

f. Defendants' Motion in Limine No. 6 (Dkt. 106)

Defendants seek to preclude Plaintiffs from introducing evidence of “cash flow problems” at Production Capital. (See generally Dkt. 106.) Defendants argue any such evidence is not probative of Mr. Mohammed's conduct being an intentional fraud or conspiracy and did not put him on notice of potential fraud. (Id. at 10-11.) Plaintiffs argue Mr. Mohammed himself described Production Capital as having “cash flow” problems and Plaintiffs' claims rely, in part, on the allegation that Mr. Mohammed failed to disclose these issues to Plaintiffs. (Dkt. 118 at 22-25.)

The court DENIES Defendants' Motion in Limine No. 6 (Dkt. 106). The court finds evidence about Production Capital's “cash flow” problems is relevant to Plaintiffs' fraud and RICO claims. See, e.g., CACI No. 1900; Fed. R. Evid. 401; Fed. R. Evid. 402. Additionally, on balance, the court finds the probative value of the evidence is not substantially outweighed by the dangers enumerated in Rule 403. See Fed. R. Evid. 403.

g. Defendants' Motion in Limine No. 7 (Dkt. 107)

Defendants request that the court bifurcate the trial so that evidence about the RICO claims and punitive damages will be presented only if liability is found as to intentional fraud. (See generally Dkt. 107.) Plaintiffs argue this action is a RICO case with attendant fraud claims and there is significant overlap between the evidence that supports these claims. (Dkt. 118 at 25-28.) Plaintiffs further argue bifurcation does not promote judicial economy because it will require Plaintiffs to prove that Mr. Mohammed acted with “oppression, fraud, or malice” per California Civil Code Section 3294, which relies on the same evidence relevant to Plaintiffs' case in chief. (Id. at 28-29.)

Federal Rule of Civil Procedure 42(b) authorizes the court to order a separate trial of claims or issues “[f]or convenience, to avoid prejudice, or to expedite and economize.” Fed. R. Civ. P. 42(b). Pursuant to this Rule, the court may bifurcate a trial “to avoid[ ] a difficult question by first dealing with an easier, dispositive issue,” or to avoid risk of prejudice. Danjaq LLC v. Sony Corp., 263 F.3d 942, 961 (9th Cir. 2001). In addition, “Rule 42(b) gives courts the authority to separate trials into liability and damages phases.” DeAnda v. City of Long Beach, 7 F.3d 1418, 1421 (9th Cir. 1993); see also Motley v. City of Fresno, 2020 WL 3642502, at *2 n.1 (E.D. Cal. Jan. 4, 2016) (“Courts routinely bifurcate liability and punitive damages claims in actions arising under 42 U.S.C. § 1983.”). The moving party bears the burden of showing bifurcation is appropriate. Clark v. I.R.S., 772 F. Supp. 2d 1265, 1269 (D. Haw. 2009).

The court GRANTS IN PART AND DENIES IN PART Defendants' Motion in Limine No. 7 (Dkt. 107). The court DENIES Defendants' Motion in Limine No. 7 (Dkt. 107) as to the RICO claim because based on the facts and issues in this case, bifurcating the RICO claim would result in the duplicative presentation of evidence. See Fed. R. Civ. P. 42(b). The court GRANTS Defendants' Motion in Limine No. 7 (Dkt. 107) as to punitive damages. See Motley, 2020 WL 3642502, at *2 n.1. Accordingly, the trial will proceed in two phases: (1) a liability phase in which all claims are tried together; and (2) a punitive damages phase, if applicable.

h. Defendants' Motion in Limine No. 8 (Dkt. 108)

Defendants seek to preclude Plaintiffs from introducing communications by Mr. Mohammed after the completion of the alleged transactions at issue. (See generally Dkt. 108.) Defendants argue post-transaction communications are not relevant to showing that Mr. Mohammed knew the transactions were inaccurate at the time of the representations made to Plaintiffs. (Id. at 6-8.) Plaintiffs argue evidence of post-deal communications is highly relevant to Plaintiffs' RICO claims and admissible under Federal Rule of Evidence 404(b)(2) to show “motive, opportunity, intent, preparation, plan, knowledge, identity, absence of mistake, or lack of accident.” See Fed. R. Evid. 404(b)(2).

“In the Ninth Circuit, a four-part test is used to determine the admissibility of evidence pursuant to Rule 404(b),” under which “[s]uch evidence may be admitted if: (1) the evidence tends to prove a material point; (2) the other act is not too remote in time; (3) the evidence is sufficient to support a finding that defendant committed the other act; and (4) (in certain cases) the act is similar to the offense charged.” United States v. Bailey, 696 F.3d 794, 799 (9th Cir. 2012). “If the evidence meets this test under Rule 404(b), the court must then decide whether the probative value is substantially outweighed by the prejudicial impact under Rule 403.” Id., see also United States v. Ramos-Atondo, 732 F.3d 1113, 1123 (9th Cir. 2013) (“Even if relevant, Rule 404(b) evidence may be excluded if its probative value is substantially outweighed by the danger of unfair prejudice.”).

In this case, the court finds this evidence is relevant to Plaintiffs' RICO claim. See Allwaste, Inc. v. Hecht, 65 F.3d 1523, 1527 (9th Cir. 1995) (internal quotation marks omitted) (“To prevail under RICO, a plaintiff must establish a pattern of criminal activity ․ At a minimum, a pattern” requires that the predicate criminal acts be related and continuous ․ Where long-term criminal conduct cannot be established, open-ended continuity may be proved ․ Open-ended continuity is the threat that criminal conduct will continue into the future.”); United States v. Romero, 282 F.3d 683, 688 (9th Cir. 2002) (citation omitted) (evidence under Federal Rule of Evidence 404(b) may be admitted if “(1) the evidence tends to prove a material point; (2) the other act is not too remote in time; (3) the evidence is sufficient to support a finding that defendant committed the other act; and (4) (in certain cases) the act is similar to the offense charged”). The court finds this evidence: (1) tends to prove a material point in terms of intent, plan, and knowledge; (2) the evidence is not too remote in time; (3) assuming the proper foundation is laid and established, testimony may be sought regarding communications by Mr. Mohammed after the completion of the alleged transactions at issue; and (4) the content of the communications is sufficiently similar to the applicable causes of action. See Bailey, 696 F.3d at 799. Finally, on balance, the court finds the probative value of evidence is not substantially outweighed by a danger of unfair prejudice, confusing the issues, misleading the jury, and wasting time, or needlessly presenting cumulative evidence. See Fed. R. Evid. 403. Moreover, the court intends to utilize a limiting instruction regarding the evidence and set forth procedures regarding the evidence during the various stages of the trial. See United States v. O'Brien, 601 F.2d 1067, 1070 (9th Cir. 1979) (In the context of Rule 404(b) evidence, “[l]imiting instructions may reduce or eliminate prejudice which would otherwise occur.”).

Therefore, the court DENIES Defendants' Motion in Limine No. 8 (Dkt. 108). The court will utilize a limiting instruction regarding this Rule 404(b) evidence. See Fed. R. Evid. 105. Consistent with Ninth Circuit Model Jury Instruction 1.11, the parties are ORDERED to jointly propose and file an agreed-upon limiting instruction regarding the specific communications alleged to have been made by Mr. Mohammed after the completion of the alleged transactions at issue for the limited purpose of establishing intent, plan, and knowledge, on or before June 9, 2023, at 12:00 p.m., consistent with the court's ruling. Once the court has reviewed and finalized an appropriate limiting instruction, the court will issue further orders regarding the procedures regarding the introduction of this evidence subject to a limiting instruction.

i. Defendants' Motion in Limine No. 9 (Dkt. 109)

Defendants seek to preclude Plaintiffs from calling Mr. Mohammed's expert, Ellen Pittleman, as a witness or using her expert report. (See generally Dkt. 109.) Defendants argue under Federal Rule of Civil Procedure 26(b)(4)(B),³ if the party designating an expert witness is not calling the witness at trial, the opposing party may not call the witness except in “exceptional circumstances” and no such exceptional circumstances exist here. (Id. at 3-5.) Plaintiffs argue the rule only applies to retained experts and does not apply where, as here, an expert has been designated, generated a report, and has been deposed. (Dkt. 118 at 33-34.) Under these circumstances, Plaintiffs argue they have a right to call Ms. Pittleman as part of Plaintiffs' case in chief. (Id. at 34.)

In this case, the parties dispute the legal standard that applies when a designated expert is withdrawn by the original retaining party and then called by the opposing party in its case-in-chief. The court observes that district courts have applied different approaches in these circumstances.

Some district courts rely on the balancing test of Federal Rule of Evidence 403 to determine whether the testimony of an expert witness should be permitted over the objection of the party who originally retained the expert. See Hous. Auth. of the City of Los Angeles v. PCC Tech. Indus., Inc., 2015 WL 13757602, at *6 (C.D. Cal. Apr. 28, 2015) (“Accordingly, the court concludes that the proper standard under which to evaluate [plaintiff's] introduction of the [expert report] and related testimony is Rule 403's balancing test: whether the probative value of the expected testimony is substantially outweighed by the risk of unfair prejudice to defendants or needless presentation of cumulative evidence.”); House v. Combined Ins. Co. of Am., 168 F.R.D. 236, 249 (N.D. Iowa 1996) (“[D]esignation of the expert as likely to testify at trial invokes the court's discretionary balancing of probative value versus prejudice articulated in Fed. R. Evid. 403 to determine whether or not to allow the opposing party access to the expert once the designation has been withdrawn.”); Brigham Young Univ. v. Pfizer, Inc., 2012 WL 1029304, at *5 (D. Utah Mar. 26, 2012) (“[T]he court looks to the balancing test of probative value versus prejudice articulated in Rule 403.”); Agron v. Trustees of Columbia Univ. in City of New York, 176 F.R.D. 445, 450 (S.D.N.Y. 1997) (applying balancing test under Rule 403 to admission of a withdrawn expert's testimony and report).

Other courts have held that such a decision is “committed to the sound discretion of the district court” and reviewed for abuse of discretion. See Peterson v. Willie, 81 F.3d 1033, 1037-38 n.4 (11th Cir. 1996) (affirming district court's decision to permit testimony because “[o]nce a witness has been designated as expected to testify at trial, there may be situations when the witness should be permitted to testify for the opposing party” but noting that “a party should not generally be permitted to establish that the witness had been previously retained by the opposing party.”).

Yet other courts have applied the “exceptional circumstances” test under Rule 26 to determine whether the testimony of an expert witness should be permitted over the objection of the party who originally retained the expert. See FMC Corp. v. Vendo Co., 196 F. Supp. 2d 1023, 1046-48 (E.D. Cal. 2002) (applying both the “exceptional circumstances” test under Rule 26 and the balancing test of Rule 403).

Finally, other courts have held that such testimony is permissible based on the structure of Rule 26, which distinguishes between the protections afforded to testifying and consulting experts. See S.E.C. v. Koenig, 557 F.3d 736, 744 (7th Cir. 2009) (“A witness identified as a testimonial expert is available to either side; such a person can't be transformed after the report has been disclosed, and a deposition conducted, to the status of a trial-preparation expert whose identity and views may be concealed․ Disclosure of the report ends the opportunity to invoke confidentiality.”).

In this case, the court observes that Ms. Pittleman is a purported expert in film finance. (Dkts. 94, 101.) The court further observes that apart from Ms. Pittleman, there is no expert regarding film finance who can aid the finder of fact on that particular topic. (Id.) Additionally, at this juncture, Ms. Pittleman has produced a report and been deposed. (Id.) Given these circumstances, the court finds the various approaches discussed above—the balancing test of Rule 403, the discretionary authority of courts to control the mode and order of examining witnesses, the “exceptional circumstances” test under Rule 26, and the plain language of Rule 26 itself—all weigh in favor of permitting Plaintiffs to call Ms. Pittleman as a witness. However, the court will not permit testimony or argument as to which party originally retained Ms. Pittleman. See Brigham Young Univ., 2012 WL 1029304, at *5 (“Defendants, however, are cautioned against eliciting and using testimony at trial regarding the fact that [the expert] was originally hired and then dropped by Plaintiffs. Such testimony is potentially very prejudicial and may confuse a jury.”); Peterson, 81 F.3d at 1037 (“Several courts have noted the prejudice that results from informing a jury that an expert had been originally consulted by the opposing party.”).

Subject to this limitation, the court DENIES Defendants' Motion in Limine No. 9 (Dkt. 109). See In re Taco Bell Wage & Hour Actions, 2016 WL 815634, at *3 (E.D. Cal. Mar. 2, 2016) (“There is no per se rule prohibiting a party from calling the opposing party's expert in their case in chief ․ Courts have found that the weight of authority favors allowing a party to introduce opinion testimony of the opposing party's expert during their case in chief.”).

j. Defendants' Motion in Limine No. 10 (Dkt. 110)

Defendants seek to exclude evidence of Mr. Mohammed's compensation on the grounds that the evidence is irrelevant and prejudicial. (See generally Dkt. 110.) Defendants argue any evidence of how much Mr. Mohammed was compensated by Production Capital is irrelevant and carries a high risk of unfair prejudice. (Id. at 6-7.) Plaintiffs argue Mr. Mohammed's compensation was directly tied to the amount of money he raised for Production Capital and is highly relevant to Plaintiffs' fraud and RICO claims. (Dkt. 118 at 34-37.)

In this case, the court finds evidence about whether Mr. Mohammed's compensation was tied to his fundraising is relevant to evaluating Mr. Mohammed's knowledge and/or intent for Plaintiffs' fraud and RICO claims, and on balance, for this purpose, the court finds the probative value of the evidence is not substantially outweighed by the dangers enumerated in Rule 403. See, e.g., CACI No. 1900; see also Fed. R. Evid. 403. However, the court will not permit evidence as to the numerical amount of Mr. Mohammed's compensation unless Defendants open the door to that line of questioning. Accordingly, the court DENIES IN PART AND GRANTS IN PART Defendants' Motion in Limine No. 10 (Dkt. 110).

k. Defendants' Motion in Limine No. 11 (Dkt. 111)

Defendants seek to exclude any evidence of damages from Mr. Robl's embezzlement because Plaintiffs' evidence should be limited to damages that Plaintiffs can prove were caused by Mr. Mohammed facilitating their investment. (See generally Dkt. 111.) In other words, Defendants argue any harm from Mr. Robl's embezzlement cannot be traced back to Mr. Mohammed's arrangement of the investment, and such evidence is irrelevant and highly prejudicial. (Id. at 9-12.) Plaintiffs argue Defendants are improperly attempting to negate the damages element of Plaintiffs' claims and the Motion should be denied because “Plaintiffs' losses were caused by [Mr. Mohammed's] knowing misrepresentations of fact about the supposed deals in which Plaintiffs were investing.” (Dkt. 118 at 37-39.)

In this case, the court finds evidence about Mr. Robl's embezzlement is relevant to Plaintiffs' damages based on Plaintiffs' theory that but for Mr. Mohammed's representations, Plaintiffs would not have invested in the deals. See, e.g., CACI No. 1900; Fed. R. Evid. 401; Fed. R. Evid. 402. In addition, on balance, the court finds the probative value of the evidence is not substantially outweighed by the dangers enumerated in Rule 403. See Fed. R. Evid. 403. Therefore, the court DENIES the Motion.

IV. Plaintiffs' Amended Witness List and Defendants' Objections

On June 5, 2023, Plaintiffs filed an Amended Witness List listing three new witnesses, Sajid Veera, Habib Veera, and Yasser El-Gamal. (Dkt. 132.) Plaintiffs state these witnesses will testify about communications between Mr. Mohammed and Plaintiffs' principal and Defendants' “ongoing scheme.” (Id.) Defendants object to the inclusion of these additional witnesses on the grounds that these witnesses are being specifically disclosed for the first time one week before trial. (Dkt. 133.)

During the Further Pretrial Conference on June 6, 2023, the court heard oral argument from the parties regarding Plaintiffs' Amended Witness List and Defendants' Objections. In summary, Plaintiffs argued the witnesses were previously disclosed under the category of other investors, Plaintiffs' counsel waited to disclose their names until he had confirmed that they would provide testimony, and Plaintiffs' counsel chose not to disclose or provide their names based on concerns of witness intimidation.

In this case, the court observes Plaintiffs made their initial disclosures on March 16, 2022. (Dkt. 98, Exh. L.) Plaintiffs' initial disclosures did not list Sajid Veera, Habib Veera, and Yasser El-Gamal as witnesses and only listed a catch-all category of “additional unknown investors.” (Id.) The non-expert discovery cut-off was February 2, 2023. (Dkt. 47.) Plaintiffs filed a pre-trial witness list on May 11, 2023. (Dkt. 94.) Plaintiffs' pre-trial witness list did not list Sajid Veera, Habib Veera, and Yasser El-Gamal as witnesses, nor did it include a catch-all category of “additional unknown investors.” (Id.) The docket does not reflect Plaintiffs disclosed Sajid Veera, Habib Veera, and Yasser El-Gamal as witnesses prior to June 5, 2023. (See generally Dkt.) Moreover, prior to the June 6, 2023, hearing, and outside of the Amended Witness List (Dkt. 132) and Objections to the Amended Witness List (Dkt. 133), the docket does not demonstrate any actions (filings, notices, requests, motions, applications, etc.) have been undertaken by either party specifically as to Sajid Veera, Habib Veera, and Yasser El-Gamal. (Id.)

Based on the record before the court, the court finds Plaintiffs' disclosure of witnesses Sajid Veera, Habib Veera, and Yasser El-Gamal is untimely under Federal Rule of Civil Procedure 26. Nor does the court find Plaintiffs have sufficiently demonstrated that the discovery violation was substantially justified or is harmless under Federal Rule of Civil Procedure 37(c)(1). (Dkt. 132.) Accordingly, in its discretion, the court SUSTAINS Defendants' Objection. See Ollier v. Sweetwater Union High Sch. Dist., 768 F.3d 843, 864 (9th Cir. 2014) (holding that “[t]he district court did not abuse its discretion when it excluded [Defendant's] 38 untimely disclosed witnesses from testifying at trial” where the discovery violations were “neither substantially justified nor harmless”). Sajid Veera, Habib Veera, and Yasser El-Gamal are each precluded from testifying at the trial.

V. Disposition

For the reasons set forth above, and consistent with the court's analysis above, the court summarizes its rulings as follows:

1. The court GRANTS Plaintiffs' Motion in Limine No. 1 (Dkt. 95);

2. The court DENIES Plaintiffs' Motion in Limine No. 2 (Dkt. 96);

3. The court DENIES Plaintiffs' Motion in Limine No. 3 (Dkt. 97);

4. The court DENIES Defendants' Motion in Limine No. 1 (Dkt. 99);

5. The court DENIES Defendants' Motion in Limine No. 2 (Dkt. 100);

6. The court GRANTS Defendants' Motion in Limine No. 3 (Dkt. 102);

7. The court DENIES Defendants' Motion in Limine No. 4 (Dkt. 104);

8. The court DENIES Defendants' Motion in Limine No. 5 (Dkt. 105);

9. The court DENIES Defendants' Motion in Limine No. 6 (Dkt. 106);

10. The court DENIES IN PART AND GRANTS IN PART Defendants' Motion in Limine No. 7 (Dkt. 107);

11. The court DENIES Defendants' Motion in Limine No. 8 (Dkt. 108);

12. The court DENIES Defendants' Motion in Limine No. 9 (Dkt. 109);

13. The court DENIES IN PART AND GRANTS IN PART Defendants' Motion in Limine No. 10 (Dkt. 110);

14. The court DENIES Defendants' Motion in Limine No. 11 (Dkt. 111);

15. The court SUSTAINS Defendants' Objections to Plaintiffs' Amended Witness List (Dkt. 133.)

The court reiterates that evidence may change during trial and this Order may be subject to the court's reconsideration at trial. See Fed. R. Evid. 103, advisory committee's note to 2000 amendment (“Even where the court's ruling is definitive, nothing ․ prohibits the court from revisiting its decision when the evidence is to be offered.”); Luce, 469 U.S. at 41-42 (“[E]ven if nothing unexpected happens at trial, the district judge is free, in the exercise of sound judicial discretion, to alter a previous in limine ruling.”).

IT IS SO ORDERED.

Initials of Deputy Clerk: mku

FOOTNOTES

1.   During the Further Pretrial Conference on June 6, 2023, Defendants informally proffered the questions in writing that they would ask on cross-examination of Mr. Rashid. The court observes no questions regarding the written proffers have been filed at this time. (See generally Dkt.) The court ORDERS Defendant to file the written proffered questions submitted during the Further Pretrial Conference by 12:00 p.m. on June 8, 2023.

2.   The court will make specific rulings as to any proffer questioning under Rule 608(b) at the Further Pretrial Conference, scheduled on June 12, 2023, at 9:30 a.m., in Courtroom 10D (see Dkt. 134).

3.   The court understands Plaintiffs to refer to Federal Rule of Civil Procedure 26(b)(4)(D). See id. (“Ordinarily, a party may not, by interrogatories or deposition, discover facts known or opinions held by an expert who has been retained or specially employed by another party in anticipation of litigation or to prepare for trial and who is not expected to be called as a witness at trial. But a party may do so only: (i) as provided in Rule 35(b); or (ii) on showing exceptional circumstances under which it is impracticable for the party to obtain facts or opinions on the same subject by other means.”).

HONORABLE FRED W. SLAUGHTER, UNITED STATES DISTRICT JUDGE