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Entrata, Inc. v. Yardi Systems, Inc.

United States District Court, D. Utah, Central Division

September 3, 2019

ENTRATA, INC., a Delaware corporation, Plaintiff,
v.
YARDI SYSTEMS, INC., a California corporation, Defendant.

          ORDER ON MOTIONS IN LIMINE

          Clark Waddoups, United States District Court Judge.

         Before the court are a total of sixteen Motions In Limine. The court heard oral argument on these motions on August 30, 2019, and ruled from the bench. This written order is meant to provide additional guidance for the parties at trial.

         Entrata's Motion in Limine # 1 (ECF No. 690)

         Entrata argues that the court “should exclude any argument and evidence about the supposed [procompetitive] benefits of the SIPP under Rules 402 and 403” of the Federal Rules of Evidence. Yardi's expert submitted an expert report on procompetitive effects. The court struck that report in its entirety. The court GRANTS Entrata's Motion In Limine #1, (ECF No. 690). If Yardi attempts to introduce other evidence of SIPP's procompetitive effects by witnesses other than Yardi's expert, the court will rule on the admissibility of that evidence at trial.

         Entrata's Motion in Limine # 2 (ECF No. 693)

         Entrata argues that “this Court should exclude evidence of conduct and statements by Entrata involving” a June 15, 2015, settlement meeting under Rule 408 of the Federal Rules of Evidence. (ECF No. 696 at 4.) Rule 408 of the Federal Rules of Evidence provides in relevant part that “conduct or a statement made during compromise negotiations about [a disputed] claim” are not admissible. Fed.R.Evid. 408(a)(2). But “[t]he court may admit this evidence for another purpose, such as . . . negating a contention of undue delay, or proving an effort to obstruct a criminal investigation or prosecution.” Fed.R.Evid. 408(b).

         Yardi argues that evidence of the parties' divorce “is admissible to explain Yardi's actions and rebut Entrata's incorrect accusations.” (ECF No. 737 at 9.) But a 2006 amendment to Rule 408 provides: “[t]he amendment prohibits the use of statements made in settlement negotiations when offered to impeach by prior inconsistent statement or through contradiction. Such broad impeachment would tend to swallow the exclusionary rule and would impair the public policy of promoting settlements.”

         As the court provided at oral argument, it GRANTS Entrata's Motion In Limine # 2, (ECF No. 693). The court holds that evidence of conduct and statements made during the June 15, 2015, settlement meeting are excluded under Rule 408 of the Federal Rules of Evidence. As stated at oral argument, the 2006 amendment prohibits the evidence that Yardi seeks to admit.

         Entrata's Motion in Limine # 3 (ECF No. 698)

         Entrata argues that “[t]he Court should exclude any evidence or argument that Yardi was excused from performing its obligations under the parties' 2006 Non-Disclosure Agreement . . . .” (ECF No. 698 at 4.) Entrata's argument relates to Entrata's contract claim against Yardi for Breach of Express Contract. The court granted Yardi's Motion for Summary Adjudication of Entrata's claim. (See ECF No. 837 at 10.) Entrata Motion In Limine # 3 is therefore DENIED as MOOT.

         Entrata's Motion in Limine # 4 (ECF No. 699)

         Entrata argues that this court “should exclude any evidence and argument regarding Entrata's or any other vendors' products, customers, or sales beyond the conventional multifamily property management marketplace in the United States, such as vendors' total sales, revenue, and unit counts.” (ECF No. 702 at 4.) Entrata largely seeks to exclude business press releases related to the success of Entrata Core. (See ECF No. 702 at 6.) Entrata specifically seeks exclusion of other companies' “10-K filings” that Yardi seeks to admit to support its argument of competition. (See ECF No. 702 at 8.) Entrata argues that these exhibits are overbroad because they are not specific to Entrata's conventional multifamily business, and argues that “Entrata's success-or lack thereof-in launching Entrata Core beyond the relevant market has no bearing on whether ‘competition is effective' or has been harmed in the relevant markets for this case . . . .” (ECF No. 702 at 6.)

         Yardi argues that “[t]he documents that Entrata is seeking to exclude speak to Entrata's success in growing Entrata Core in the multifamily space, which includes conventional multifamily.” (ECF No. 741 at 8.) Yardi further argues that the exhibits it seeks to introduce are relevant-even if they are overbroad. (See ECF No. 741 at 7.)

         As the court provided at oral argument, the court GRANTS in part and DENIES in part Entrata's Motion In Limine # 4, (ECF No. 699). As a general matter, the court will sustain an objection and will not allow evidence that goes to the question of Entrata's overall success as a company that is not confined carefully to the relevant market at issue in this case. With respect to any specific exhibit, the court will expect a careful foundation to be laid, and if it possible from that foundation to tease out relevant evidence that goes to Entrata's success in the relevant market, the court will admit that evidence. If the evidence as presented in the document or testimony would be so confusing that there is no way for the jury to sort out what its relevance would be with respect to the relevant market, the court will sustain an objection. Regarding the 10-K filings and statements about competition, the court will require careful foundation to be laid before the court will allow the evidence about competition to be admitted. The court will require foundation as to the knowledge of the witness to testify about the content of the document and relevance to an issue to be decided by the jury.

         Entrata's Motion in Limine # 6 (ECF No. 708)

         Entrata argues that “[t]his Court should exclude any evidence or argument related to Yardi's intellectual property allegations, which are the basis of its California case.” (ECF No. 708 at 4.) Yardi responds that “Entrata's misconduct is central to the issues in this litigation.” (ECF No. 748 at 5.) In Reply, Entrata argues that “Yardi's [intellectual property] allegations would require an all-consuming side-trial.” (ECF No. 827 at 6.)

         As provided at oral argument, the court GRANTS Entrata's Motion # 6, (ECF No. 708). Rule 403 of the Federal Rules of Evidence provides that 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.” The court finds that introducing evidence of the California allegations would require a trial within a trial. The probative value of this evidence is outweighed by the undue delay that would result from Entrata having to rebut Yardi's proposed evidence. The court excludes evidence related to the California case. The allegations made in the California case remain simply allegations, not proven facts. The allegations will best be resolved in the California case where they are still pending.

         Further, the court is persuaded by Entrata's argument that Yardi previously sought to restrict discovery related to the California case based on the argument that it was not relevant to this case. Additionally, Yardi's Answer did not raise any of the California issues as a defense to this case. This provides further support for the court's conclusion that the evidence from the California case should be excluded at trial.

         Entrata's Motion in Limine # 8 (ECF No. 847)

         Entrata seeks to preclude Yardi under Federal Rules of Civil Procedure 26(e) and 37(c) from arguing at trial that Yardi refused to deal with Entrata to protect copyrights in its standard interface specifications (APIs) and standalone databases. (See ECF No. 850 at 7.) Federal Rule 26(e) provides, in relevant part:

A party who . . . has responded to an interrogatory . . . must supplement or correct its disclosure or response . . . in a timely manner if the party learns that in some material respect the disclosure or response is incomplete or incorrect, and if the additional or corrective information has not otherwise been made known to the other parties during the discovery process or in writing . . . .

Fed. R. Civ. P. 26(e)(1)(A). Federal Rule of Civil Procedure 37(c) provides, in relevant part:

If a party fails to provide information . . . as required by Rule 26(a) or (e), the party is not allowed to use that information . . . to supply evidence on a motion, at a hearing, or at a trial, unless the failure was substantially justified or is harmless

Fed. R. Civ. P. 37(c)(1).

         Entrata argues that “Yardi failed to assert or disclose its new copyright theory in discovery, summary judgment briefing, or elsewhere in this case.” (ECF No. 850 at 4.) Entrata argues that “Yardi's response to Entrata's interrogatories” “omit[ted] any mention of copyrights.” (ECF No. 850 at 5.) On this point, Yardi responds that “[n]one of Entrata's 58 interrogatories asks Yardi to identify the specific IP rights Yardi invoked for its SolidFX Defense.” (ECF No. 873 at 7.)

         The court rejects Yardi's argument and finds that Yardi was required to include its copyright defense in response to Entrata's interrogatories. Interrogatory # 33 provided: “[d]escribe with specificity every occasion on which You told any PM Vendor that it could not participate in SIPP or otherwise Integrate its software or services with Your software . . . describing the form of each such communication, describing your reasons for not allowing the PM vendor to Integrate its software or services with Your software . . . .” (ECF No. 871-2 at 7 (bold added).) Similarly, Interrogatory # 11 provided: “[i]dentify all facts relating to the creation, development, and implementation of the Yardi Standard Interface Program, including Yardi's decision to bar third-party vendors from joining the Standard Interface Program . . . .” (ECF No. 871-1 at 28 (bold added).) These interrogatories required Yardi to describe its reasons for not allowing Entrata to integrate its products with Yardi's products. If Yardi's protection of its copyrights in its standard interface specifications and Voyager databases was its reason, it should have responded to Entrata's interrogatories accordingly. It did not. Rule 37(c)(1) bars Yardi from using that information at trial.

         Yardi also argues that it “raised its SolidFX Defense at the Outset of the Case.” (ECF No. 873 at 6.) In support, Yardi points to its counsel's oral argument from a November 16, 2016 hearing on Yardi's Motion to Dismiss. (See ECF No. 873 at 6 (citing (ECF No. 81 at 18-19).) The court rejects this argument. This brief reference to SolidFX was not sufficient to put Entrata on notice of Yardi's copyright defense. Further, ...


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