Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_13-cv-04156/USCOURTS-cand-3_13-cv-04156-23/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Other Contract

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

AI-DAIWA, LTD.,

Plaintiff,

v.

APPARENT, INC., et al.,

Defendants.

Case No. 13-cv-04156-VC 

ORDER GRANTING AI-DAIWA'S 

MOTION TO STRIKE

Re: Dkt. No. 162

AI-Daiwa's motion to strike the rebuttal expert report of Rosemary Coates is granted. AIDaiwa's primary complaint is that Ms. Coates' report does not actually rebut the report of Devinder 

Grewal, AI-Daiwa's technical expert, and therefore Apparent's disclosure of Rosemary Coates is 

untimely, because she should have been disclosed as a primary expert by the Court-imposed 

deadline of June 29, 2015, rather than as a rebuttal expert one month later, on July 29, 2015. This 

seems correct, because Dr. Grewal, who is a mechanical engineer, focused most of his report on 

the technical aspects of the microgrid inverters at issue in this case, describing the various 

laboratory tests that he ran on the inverters. Ms. Coates, by contrast, has no technical background, 

and her rebuttal report offered no technical discussion about the inverters.

But Ms. Coates' proposed testimony is inadmissible for a more fundamental reason as well. 

Under Federal Rule of Evidence 702, a qualified expert witness may testify if the following 

conditions are met:

(a) the expert's scientific, technical, or other specialized knowledge will help the trier of 

fact to understand the evidence or to determine a fact issue;

(b) the testimony is based on sufficient facts or data;

(c) the testimony is the product of reliable principles and methods;

(d) the expert has reliably applied the principles and methods to the facts of the case.

F.R.E. 702. A district judge has a basic gatekeeping function to "to ensure that any and all 

scientific testimony . . . is not only relevant, but reliable," Daubert v. Merrell Dow 

Case 3:13-cv-04156-VC Document 192 Filed 09/09/15 Page 1 of 3
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United States District Court

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Pharmaceuticals, Inc., 509 U.S. 579, 589, (1993) and the same is true with respect to nonscientific expert testimony. Kumho Tire Co., Ltd. v. Carmichael, 526 U.S. 137, 141 (1999). The 

Court's job is to determine "whether an expert's testimony has a reliable basis in the knowledge 

and experience of the relevant discipline," Estate of Barbarin v. AstenJohnson, Inc., 740 F.3d 

457, 463 (9th Cir. 2014) (internal citations omitted), which the Court may do by considering 

several factors, including the following: "1) whether a theory or technique can be tested; 2) 

whether it has been subjected to peer review and publication; 3) the known or potential error rate 

of the theory or technique; and 4) whether the theory or technique enjoys general acceptance 

within the relevant scientific community." United States f. Hankey, 203 F.3d 1160, 1167 (9th Cir. 

2000) (citing Daubert, 509 U.S. at 592-94). But ultimately the Court has broad discretion and 

flexibility in assessing an expert's reliability. Estate of Barbarin, 740 F.3d at 463.

Here, regardless of what factors the Court considers, it is impossible to say that Ms. 

Coates' testimony is reliable, because it is unclear what methods or principles or data she is 

applying to the facts of the case. Ms. Coates is an expert in global supply chains and, in particular, 

in sourcing and manufacturing in China. Her expert report indicates that she has "been asked to 

explain the practices and processes that business engage in, when selecting and using supply chain 

partners and outsourced contract manufacturers [and] . . . to opine specifically on the business 

practices and responsibilities for testing when using a contract manufacturer." ¶ 11-12. But rather 

than providing any detailed discussion of what these standards are and how they relate to the 

relationship between Apparent and AI-Daiwa, her rebuttal report consists mostly of a rehashing of 

Apparent's version of events, of statements for which there is no reason an expert would be 

needed, and of broad conclusions about how Apparent followed generally-accepted business 

practices for this type of contract. ¶¶ 17- 20, 22-23, 27-31, 36-40. 

Even the two potentially relevant areas where her report seems to build off her expertise 

are lacking the information the court would need to determine their reliability. First, Ms. Coates' 

report includes a lengthy quote describing the "Stage-Gate System," which, according to her, is a 

process that "allows for incremental development steps to assure that the product being developed 

meets internal and external requirements" and "is a standard approach in engineering and is widely 

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United States District Court

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adopted across industries." ¶ 32, 34. But rather than applying each of the steps of the Stage-Gate 

System to Apparent's product development, Ms. Coates simply concludes that because Apparent 

allegedly follows the Stage-Gate process, then, almost by definition, the defects in the microgrid 

inverters must have been the fault and responsibility of AI-Daiwa. Without any real analysis by 

Ms. Coates, the Court cannot assess whether she reliably applied the Stage-Gate process to the 

facts of the case.

Second, Ms. Coates opines that it is standard industry practice for the manufacturer of a 

device to be responsible for testing. Paragraph 24 of her expert report states as follows:

The Expert Report of Devinder Grewal (Fathom Engineering), 

wrongly draws conclusions regarding the expectations for 

outsourced contract manufacturing. Through outsourcing to a 

contract manufacturer, companies routinely identify requirements 

for passing test specifications but hand-off the responsibility for 

developing and implementing testing of the product to the contract 

manufacturer and manufacturing site. This is what occurred here. 

Mr. Grewall's conclusions about the test processes focuses on the 

failure causes of products. Identifying these failures is the 

responsibility of AI-Daiwa, as specified in the contract between 

Apparent and AI and as incorporated in Addendum no. 1.

¶ 24. Ms. Coates acknowledges that, in this case, the responsibility for testing the microgrid 

inverters is identified in the agreement between AI-Daiwa and Apparent, so it is unclear why 

routine industry practice is relevant. And to the extent that Ms. Coates is suggesting that AIDaiwa is necessarily responsible for testing because the norm in the industry is for the 

manufacturer to be responsible, such a conclusion is obviously incorrect. 

For these reasons, AI-Daiwa's motion to strike Rosemary Cotes as an expert witness is 

granted. 

IT IS SO ORDERED.

Dated: September 8, 2015

______________________________________

 VINCE CHHABRIA

 United States District Judge

Case 3:13-cv-04156-VC Document 192 Filed 09/09/15 Page 3 of 3