v. Hon. Arthur J. Tarnow MOTION IN LIMINE TO EXCLUDE IRRELEVANT EVIDENCE RELATED TO VALASSIS' BUSINESS PRACTICES
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1 VALASSIS COMMUNICATIONS, INC., UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION Plaintiff, Case No. 2:06-cv v. Hon. Arthur J. Tarnow NEWS AMERICA INCORPORATED, a/k/a NEWS AMERICA MARKETING GROUP, NEWS AMERICA MARKETING FSI, INC. a/k/a NEWS AMERICA MARKETING FSI, LLC and NEWS AMERICA MARKETING IN-STORE SERVICES, INC. a/k/a NEWS AMERICA MARKETING IN-STORE SERVICES, LLC, Defendants. MOTION IN LIMINE TO EXCLUDE IRRELEVANT EVIDENCE RELATED TO VALASSIS' BUSINESS PRACTICES Valassis moves this Court to exclude News' irrelevant evidence related to Valassis' business practices. As more fully set forth in the accompanying brief in support, such evidence is completely irrelevant to Valassis' claims or News' defenses in this action. Neither contributory negligence nor unclean hands is a defense to an antitrust claim. All of News' "Valassis does it or something similar too" evidence is improper, even if it were correct. Valassis has met and conferred with News as required by Local Rule 7.1, but such concurrence was rejected. WHEREFORE Valassis respectfully requests that this Court grant its motion to exclude News' irrelevant evidence related to Valassis' business practices.
2 Respectfully submitted, MILLER, CANFIELD, PADDOCK & STONE, PLC By: s/ Gregory L. Curtner Gregory L. Curtner (P12414) Carl H. von Ende (P21867) A. Michael Palizzi (P47262) Robert J. Wierenga (P59785) Kimberly L. Scott (P69706) 150 W. Jefferson, Suite 2500 Detroit, MI (313) Henry Baskin (P10520) The Baskin Law Firm David S. Mendelson (P53572) Law Offices of David Mendelson, P.C. 322 N. Old Woodward Avenue Birmingham, MI (248) /(248) Dated: January 12, 2010 Attorneys for Plaintiff Valassis Communications, Inc. 2
3 VALASSIS COMMUNICATIONS, INC., UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION Plaintiff, Case No. 2:06-cv v. Hon. Arthur J. Tarnow NEWS AMERICA INCORPORATED, a/k/a NEWS AMERICA MARKETING GROUP, NEWS AMERICA MARKETING FSI, INC. a/k/a NEWS AMERICA MARKETING FSI, LLC and NEWS AMERICA MARKETING IN-STORE SERVICES, INC. a/k/a NEWS AMERICA MARKETING IN-STORE SERVICES, LLC, Defendants. BRIEF IN SUPPORT OF MOTION IN LIMINE TO EXCLUDE IRRELEVANT EVIDENCE RELATED TO VALASSIS' BUSINESS PRACTICES
4 CONCISE STATEMENT OF THE ISSUES PRESENTED Should News be permitted to introduce irrelevant and misleading evidence relating to Valassis' business practices? Valassis answers: No.
5 CONTROLLING OR MOST APPROPRIATE AUTHORITIES Fed. R. Evid Fed. R. Evid Fed. R. Evid Kiefer-Stewart Co. v. Joseph E. Seagram & Sons, Inc., 340 U.S. 211 (1950). Bubis v. Blanton, 885 F.2d 317 (6th Cir. 1989).
6 I. INTRODUCTION News apparently intends to introduce argument and evidence that its bundles are, somehow, procompetitive because "Valassis bundles too." News also plans to argue that Valassis is not entitled to damages because it is, in general, a poorly run company with greedy executives. News should be precluded from attempting to mislead the jury, and waste the jury's time, with argument or evidence on these issues, which have no conceivable relevance to Valassis' claims or News' defenses in this action. II. STANDARD District courts may rule on motions in limine under their authority to manage trials. Luce v. United States, 469 U.S. 38, 41 n. 4 (1984). District courts have broad discretion over matters involving the admissibility of evidence at trial. U.S. v. Seago, 930 F.2d 482, 494 (6th Cir. 1991). Under the Federal Rules of Evidence, relevant evidence is that which has "any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence." Fed. R. Evid "Evidence which is not relevant is not admissible." Fed. R. Evid Further, relevant evidence "may be excluded if its probative value is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or misleading the jury, or by considerations of undue delay, waste of time, or needless presentation of cumulative evidence." Fed. R. Evid See Dunn ex rel. Albery v. State Farm Mut. Auto Ins. Co., No , 2009 WL , at *2 (E.D. Mich. Dec. 23, 2009). III. EVIDENCE TO BE EXCLUDED Valassis moves to exclude as irrelevant any evidence or argument that Valassis sells FSIs together with other products (such as coupon clearing services offered by NCH, a Valassis subsidiary), or that Valassis offers packaged or bundled pricing on multiple products. 1
7 IV. ARGUMENT A. Evidence or argument that "Valassis bundles too" should not be admitted At the Wayne County trial, News spent considerable time arguing to the jury that its bundles of free-standing inserts and in-store products must be acceptable because, in short, "Valassis bundles too." See, e.g., Ex. A, 6/10/09 Trial Transcript at 69:22-71:22 (News counsel examining Robert Recchia about Valassis' supposed "bundles"). Indeed, at one point News counsel told the jury that Valassis' bundles were a CPG "roach motel": Now I talked about the Valassis bundles and one of the things you saw from the Sara Lee example, they bundle NCH, which was the coupon clearing thing, but this is like bundling on steroids. Let me show you their own document, T This is the plan that was devised by Tom Murry and it says: Where possible, connect FSI deals to NCH deals. This will make them harder to undo. This is like the CPG roach motel. CPGs check in but they don't check out. They have a bundle that latches them to the CPGs. That's a pretty potent bundle and it worked for Sara Lee. Ex. B, 7/21/09 Trial Transcript at 186:1-12 (News closing argument; emphasis added). News should be prevented from presenting any such argument or evidence in the coming trial because it is wholly irrelevant and likely to mislead the jury. The "evidence" is irrelevant. First, the fact that Valassis and other companies, for that matter sell products in combination, or offer bundle or package discounts, has no relevance on the legality of News' alleged conduct in this case. News is on trial, not Valassis. The legality of News' alleged wrongdoing has nothing whatsoever to do with Valassis' claims, or News' defenses. For this reason alone, News should be precluded from offering evidence or argument on this point. Moreover, News' attempt to offer evidence or argument on Valassis' supposed "bundles" will only serve to mislead the jury. Valassis' tying, bundling, monopoly leveraging and exclusive dealing theories are all based on Valassis' evidence that News has market or monopoly 2
8 power in the market for third-party in-store products, and has used that power to take FSI business from Valassis in an attempt to monopolize the FSI market. See generally Valassis Summ. Judg. Br. News has no similar argument, or evidence, with respect to Valassis' supposed "bundles." The presence of News' monopoly power in the ISP market is a critical distinguishing factor that makes News' conduct very different than Valassis' conduct from an antitrust perspective. See id. News should not be permitted to blur the issues on this point, or to mislead the jury into believing that tying or bundling is either always legal or always illegal. These antitrust concepts can be difficult enough for jurors to grasp; News should not be allowed to muddy the waters further with specious comparisons of its conduct to Valassis' alleged conduct. Nor can News justify its use of this evidence by reference to its unclean hands defense. There is no unclean hands defense in a federal antitrust action. The Supreme Court held in Kiefer-Stewart Co. v. Joseph E. Seagram & Sons, Inc. that "unclean hands" cannot be asserted as a defense to a treble damage antitrust action. 340 U.S. 211 (1950). The Sixth Circuit has recognized that "[t]he federal courts have uniformly rejected the defense of unclean hands in antitrust actions." Bubis v. Blanton, 885 F.2d 317, 321 (6th Cir. 1989). 1 The "evidence" would waste time. News should also be prevented from introducing evidence or argument that "Valassis bundles too" because allowing News to do so requires Valassis to respond by explaining to the jury why its (legally irrelevant) bundles or integrated offerings differ from those made by News. This has the result of creating a trial within a trial on 1 Unclean hands would not support admission of News' argument or evidence even if the defense did exist in antitrust cases. The unclean hands doctrine "is a self-imposed ordinance that closes the doors of a court of equity to one tainted with inequitableness or bad faith relative to the matter in which he seeks relief." Two Men and a Truck/Int'l Inc. v. Two Men and a Truck/Kalamazoo, Inc., 955 F. Supp. 784, 786 (W.D. Mich. 1997), quoting Stachnik v. Winkel, 394 Mich. 375, 382; 230 N.W.2d 529, 532 (1975) (emphasis added). The unclean hands doctrine concerns only "'willful act[s] concerning the cause of action' presently before the court." JPMorgan Chase Bank, N.A. v. Winget, 510 F.3d 577, 585 (6th Cir. 2007) quoting Stachnik, 230 N.W.2d at
9 the wholly irrelevant issue of what types of business practices Valassis engages in. This will already be a long and complex trial; the Court should not permit News to add to both needlessly by injecting irrelevant issues. B. Evidence or argument relating to Valassis' "contributory negligence" should not be admitted News also spent considerable time at the Wayne County trial offering argument or evidence that Valassis is not entitled to recover damages from News because Valassis is a poorly-run company with greedy executives. To cite just one example, News counsel offered the followin argument in closing: Look at what [Valassis] spent their money, the two years leading up to the lawsuit they spent more money than ever on stock repurchases. And they come in here and say we've harmed and we can't compete and then blew 228 million in cash. And then Mr. Schultz, his [compensation] is tied to company performance. You have a big jump in his compensation from 2007 to the end of 2008, which is six months before we started this trial. And then they come in here and say the company is in dire trouble, going out of business. Gee, how do you get the $800,000 bonus or bump up I should say. Ex. B, 7/21/09 Trial Transcript at 133:24-134:11. While News is free to attempt to show that News' illegal behavior did not cause Valassis' damages, News should not permitted to raise this argument to the level of character attack on greedy Valassis executives, or a short-sighted corporate culture as it did at the Wayne County trial. News should be precluded from arguing, or offering "evidence," that Valassis in general is a poorly-run company, or that it made what News regards as "mistakes" during the period of News' wrongdoing, or that its own negligence or poor management contributed to its loss of FSI market share and profits. 4
10 Respectfully submitted, MILLER, CANFIELD, PADDOCK & STONE, PLC By: s/ Gregory L. Curtner Gregory L. Curtner (P12414) Carl H. von Ende (P21867) A. Michael Palizzi (P47262) Robert J. Wierenga (P59785) Kimberly L. Scott (P69706) 150 W. Jefferson, Suite 2500 Detroit, MI (313) Henry Baskin (P10520) The Baskin Law Firm David S. Mendelson (P53572) Law Offices of David Mendelson, P.C. 322 N. Old Woodward Avenue Birmingham, MI (248) /(248) Dated: January 12, 2010 Attorneys for Plaintiff Valassis Communications, Inc. CERTIFICATE OF SERVICE I hereby certify that on January 12, 2010, I electronically filed the foregoing paper with the Clerk of the Court using the ECF system which will send notification of such filing to all attorneys of record. MILLER, CANFIELD, PADDOCK AND STONE, P.L.C. By: s/ Gregory L. Curtner Gregory L. Curtner (P12414) Carl H. von Ende (P21867) A. Michael Palizzi (P47262) Robert J. Wierenga (P59785) Kimberly L. Scott (P69706) 150 W. Jefferson, Suite 2500 Detroit, MI (313)
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