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Spoliation Sanctions Are Proper When “(1) a Party Judgment

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Spoliation Sanctions Are Proper When “(1) a Party Judgment Christou v. Beatport, LLC, Not Reported in F.Supp.2d (2013) 2013-1 Trade Cases P 78,230 Unopposed Motion to Supplement Response to Motion to Exclude Jay E. Freedberg, CPA [# 189]. 2013 WL 248058 United States District Court, D. Colorado. FACTS 1 Regas CHRISTOU, R.M.C. Holdings, L.L.C. 1 A more extensive recitation of the facts cans be d/b/a The Church, Bouboulina, Inc. d/b/ found in the Court's order of March 14, 2012 which a Vinyl, Molon Lave, Inc. d/b/a 2 A.M., City addressed defendants' motions to dismiss and a previous defense motion for sanctions. Hall, LLC, 1037 Broadway, Inc. d/b/a Bar Standard f/k/a The Shelter, 776 Lincoln St., In the 1990's Regas Christou founded several nightclubs Inc. d/b/a Funky Buddha Lounge, and 1055 in Denver's “South of Colfax Nightlife District.” Two of these nightclubs, The Church and Vinyl, developed Broadway, Inc. d/b/a The Living Room, Plaintiffs. national reputations as venues for “Electronic Dance v. Music” (sometimes referred to as “EDM”). Electronic BEATPORT, LLC, Bradley Roulier, and Dance Music features live performances by disc jockeys BMJ & J, LLC d/b/a Beta Nightclub who mix songs or “tracks” on expensive synthesizers and and Beatport Lounge, Defendants. other computer based equipment and are viewed as artists in their own right. Each year DJ Magazine produces a list Civil Action No. 10–cv–02912–RBJ–KMT. of the “Top 100” DJ's in the EDM world. These “A–List | DJ's” command larger audiences and are in high demand Jan. 23, 2013. by nightclubs. They also perform in other venues such as, Attorneys and Law Firms in Colorado, the Ogden and Fillmore theaters and the Red Rocks amphitheater. Dale R. Harris, John Allen Francis, Kenzo Sunao Kawanabe, Davis Graham & Stubbs, Llp, Denver, From 1998 to 2007 Bradley Roulier was employed by Mr. Co, Jeffrey S. Vail, The Law Office Of Jeff Vail Llc, Christou as a “talent buyer.” As such, and apparently with Englewood, CO, for Plaintiffs. considerable success, he assisted in booking A–List DJ's and other DJ's for Mr. Christou's clubs. Mr. Roulier and Kenzo Sunao Kawanabe Davis Graham & Stubbs, LLP, others also conceived of the idea of creating an online Denver, CO, Judy Bradshaw Snyder, Katherine M.L. marketplace for promoting and selling (downloading) Pratt, Patrick Michael Haines, Berg Hill Greenleaf & Electronic Dance Music. Mr. Christou liked the idea and Ruscitti, LLP, Joe L. Silver, Martin Dean Beier, Silver & provided both financial and promotional support to Mr. Deboskey, P.C., George Vernon Berg, Jr., Boulder, CO, Roulier and his partners. This idea led to the creation for Defendants. of Beatport in 2003. Beatport was enormously successful and has grown to become the largest online site that caters essentially exclusively to producers and consumers ORDER of Electronic Dance Music. R. BROOKE JACKSON, District Judge. Anyone can download music from the Beatport website. *1 This matter is before the Court on (1) Defendants' However, the tracks sold on Beatport are designed Motion to Exclude Plaintiffs' Expert Owen R. Phillips, especially for DJ's. They are free of Digital Rights Ph.D. [docket # 122]; (2) Plaintiffs' Motion for Sanctions Management or “DRM,” which means they can be mixed for Spoliation [# 123]; (3) Defendants' Motion to Exclude and re-mixed on the types of equipment used by DJ's. Plaintiffs' Expert Witness Jay E. Freedberg [# 134]; (4) They are meant to be played at loud volume on very Defendant Beatport's Supplemental Motion for Sanctions expensive, high fidelity equipment that is available in the Pursuant to Federal Rule of Civil Procedure 11 [# 137]; (5) venues in which these DJ's work. Accordingly, the average Defendants' Combined Motion for Summary Judgment cost of a single track is higher than tracks that can be [# 148]; (6) Renewed Stipulated Motion to Set Dates downloaded on mass-market sites such as Apple's iTunes. Certain for Pre-trial Deadlines [# 174]; and (7) [Plaintiffs'] Although many of the same DJ's do sell tracks on iTunes © 2016 Thomson Reuters. No claim to original U.S. Government Works. 1 Christou v. Beatport, LLC, Not Reported in F.Supp.2d (2013) 2013-1 Trade Cases P 78,230 and various other online sites, Beatport considers itself to set the standard in the market that it serves. A. Rule 702. Federal Rule of Evidence 702 provides, In 2007 Mr. Christou and Mr. Roulier had a falling out, A witness who is qualified as the cause of which is immaterial to the pending motions. an expert by knowledge, skill, Mr. Roulier left Mr. Christou, and in 2008 he founded his experience, training, or education own competing club called Beta in the Lower Downtown may testify in the form of an area of Denver. The gist of the present suit is plaintiff's opinion if: (a) the expert's scientific, claim that Mr. Roulier has been threatening A–List DJ's technical, or other specialized that their tracks will not be promoted on Beatport if they knowledge will help the trier of fact perform in Mr. Christou's clubs, and as a result, Beta has to understand the evidence or to largely taken over the Denver market. determine a fact in issue; (b) the testimony is based on sufficient facts PROCEDURAL HISTORY or data; (c) the testimony is the *2 Plaintiffs filed this lawsuit on December 1, 2010. product of reliable principles and They originally asserted nine claims for relief: (1) illegal methods; and (d) the expert has tying in violation of section one of the Sherman Act reliably applied the principles and against all defendants; (2) monopolization (section two methods to the facts of the case. of the Sherman Act against defendants Beta and Mr. Roulier; (3) attempt to monopolize against Beta and Thus, Rule 702 assigns the trial judge “the task of Mr. Roulier; (4) conspiracy to monopolize against all ensuring that an expert's testimony both rests on a reliable defendants; (5) conspiracy to eliminate competition by foundation and is relevant to the task at hand.” Daubert unfair means in violation of section one of the Clayton v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 597 Act; (6) theft of trade secrets; (7) violation of the (1993). An opinion is reliable if the witness is qualified to Racketeer Influenced and Corrupt Organizations Act; give it, and it is based upon reliable scientific principles (8) intentional interference with prospective business and sufficient facts. The Court may consider such factors expectancies against Mr. Roulier; and (9) civil conspiracy as whether the expert's theories or methods can be tested; against all defendants. whether they have been subjected to peer review and publication; whether there is a known error rate; and In its order of March 14, 2012 [# 146] the Court dismissed whether they have gained a degree of acceptance in the RICO claim and found that that Mr. Christou the relevant community. Daubert, 509 U.S. at 593–94. personally lacked standing to assert the antitrust claims. Opinions are relevant if they will be of assistance to the With those exceptions, however, the Court denied the jury, that is, is there a “fit” or logical relationship between motions to dismiss. It also denied defendants' motion for the proffered testimony and the factual issues in the case. sanctions. *3 The objective of Daubert's gatekeeping requirement is Defendants filed their motion for summary judgment “to make certain that an expert, whether basing testimony on March 15, 2012. The Court heard oral argument on upon professional studies or personal experience, employs summary judgment on July 11, 2012. However, plaintiffs' in the courtroom the same level of intellectual rigor that claims rested in part on the testimony of expert witnesses. characterizes the practice of an expert in the relevant Defendants had filed “Daubert” motions challenging the field.” Kumho Tire Co., Ltd. v. Carmichael, 526 U.S. admissibility of the experts' opinions, and they requested 137, 152 (1999). The plaintiff need not “prove that the an evidentiary hearing on those motions. That hearing was expert is undisputably correct or that the expert's theory is held on January 15, 2013. The Court now is in a position ‘generally accepted’ in the scientific community. Instead, to rule on those motions, the summary judgment motion, the plaintiff must show that the method employed by and the other pending motions. the expert in reaching the conclusion is scientifically sound and that the opinion is based on facts that satisfy Rule 702's reliability requirements.” Goebel v. Denver & I. THE DAUBERT MOTIONS. Rio Grande Western R. Co., 346 F.3d 987, 991 (10th © 2016 Thomson Reuters. No claim to original U.S. Government Works. 2 Christou v. Beatport, LLC, Not Reported in F.Supp.2d (2013) 2013-1 Trade Cases P 78,230 Cir.2003) (internal citations omitted). However, the Court is mindful that Rule 702 was intended to create a liberal 7. The defendants' anticompetitive behavior has caused standard for the admissibility of expert testimony, not to The Church and Vinyl to experience significant create new barriers. See Cook v. Rockwell Intern. Corp., revenue declines on the evenings they devote to 580 F.Supp.2d 1071, 1082 (D.Colo.2006). Electronic Dance Music performances. *4 See Report [# 122–3] at 8–9. B. Defendants' Motion to Exclude Plaintiffs' Expert Witness Owen R. Phillips, Ph.D. [# 122]. Reliability. Dr. Phillips' opinions are expressed in his report of Dr. Phillips' qualifications were not contested. Briefly, he August 31, 2011 [# 122–3]. He was deposed on November received his Ph.D.
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