Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-1_04-cv-06111/USCOURTS-caed-1_04-cv-06111-4/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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IN THE UNITED STATES DISTRICT COURT FOR THE

EASTERN DISTRICT OF CALIFORNIA

CFM COMMUNICATIONS, LLC, ) 

 )

Plaintiff, )

)

vs. )

)

MITTS TELECASTING COMPANY )

 )

 )

Defendant. )

)

) 

No. CV-F-04-6111 REC DLB

ORDER DENYING PLAINTIFF’S

MOTION TO STRIKE

DESIGNATION OF DEFENDANT’S

EXPERT AND GRANTING IN PART

AND DENYING IN PART

PLAINTIFF’S MOTION TO

EXCLUDE TESTIMONY OF

DEFENDANT’S EXPERT AT

TRIAL. (Doc. 67) 

 

On October 3, 2005, the Court heard oral argument regarding

Plaintiff’s Motion to Strike Designation of Defendant’s Expert

and to Exclude Testimony of Defendant’s Expert at Trial. Upon

due consideration of the written and oral arguments of the

parties and the record herein, the Court GRANTS IN PART and

DENIES IN PART the motion as set forth below. 

I. Factual Background

Pappas Telecasting of the Midlands (“Pappas” or “PTM”) held

the FCC license for television station KXVO(TV) Channel 15 in

Omaha, Nebraska. Because current FCC regulations prohibit one

owner from holding more than one license in any given area Pappas

Case 1:04-cv-06111-DLB Document 80 Filed 10/11/05 Page 1 of 24
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has had to employ middlemen to “own” the station. Gary Cocola

held the station for Pappas from 1994 to 1999, during which time

Pappas held a promissory note in its favor (the “Cocola Note”). 

The Cocola Note provided that the note holder could require Mr.

Cocola to form a limited partnership with the note holder and

that the note holder, who would be the general partner, could

require Mr. Cocola to convey his interest in the station at any

time with proper notice.

In 1999, Pappas assigned its interest in the Cocola Note to

Defendant MTC via a “Note Power and Assignment.” The Note Power

and Assignment gave MTC the right to force Mr. Cocola to form a

limited partnership and then sell to MTC his share of the limited

partnership, which would effectively result in MTC purchasing the

Station. MTC paid $972,500 for the assignment.

At the same time, Pappas also executed an “Option Agreement”

with MTC. The Option Agreement is the focus of this litigation. 

It provided for three scenarios by which Pappas could exercise a

purchase option. MTC had a put option that contained the same

language, which is as follows:

(a) MTC [Defendant] hereby grants to Pappas or its

assignee an exclusive and irrevocable option (the

“Purchase Option”) as follows:

(i) If, at the time the Purchase Option is exercised,

MTC has not acquired any interest in the Partnership or

the assets used in connection with the Station pursuant

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to the 97% Option or the 3% Option, then Pappas shall

have the option to acquire from MTC the Note, including

all of MTC’s rights under the 97% Option and the 3%

Option, for a price equal to $425,000, plus or minus

the CPI Adjustment as defined below (the “Note Exercise

Price”); or

(ii) If, at the time the Purchase Option is exercised,

MTC has acquired, pursuant to the 97% Option, the 97%

general partner interest in the Partnership, but has

not acquired the 3% limited partner interest in the

Partnership, then Pappas shall have the option to

acquire from MTC all of MTC’s interest in the

Partnership, plus MTC’s rights under the 3% Option, for

a price equal to $425,000, plus or minus the CPI

Adjustment as defined below (the “Partnership Interest

Exercise Price”); or

(iii) If, at the time the Purchase Option is exercised,

MTC has acquired, pursuant to the 97% Option and the 3%

Option, all of the FCC authorizations and other assets

used by Cocola in the operation of the Station, then

Pappas shall have the option to acquire from MTC all of

such authorizations and other assets for a price equal

to $425,000, plus the amount for which MTC acquired the

3% interest in the Partnership from Cocola, plus or

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minus the CPI Adjustment (the “Station Assets Exercise

Price”).

The Option Agreement provides that the purchase option is

exercisable for seven years after the effective date, on or about

November 5, 1999.

After the assignment was completed, MTC notified Mr. Cocola

of its intent to exercise its rights under the Cocola Note such

that the limited partnership would be formed and then MTC would

exercise its right to compel Mr. Cocola to sell his interest,

approximately 3% to MTC. The partnership was never formed and

Mr. Cocola separately conveyed his interest in the station to

MTC. One of the conditions of the single step transaction was

the approval of Pappas, which was given. The transaction was

finalized on August 4, 2000.

In August of 2003, Pappas sent a letter to MTC purporting to

exercise the purchase option. In February of 2004, Pappas

assigned its rights under the Option Agreement to Plaintiff CFM. 

Sometime after MTC was notified of Pappas’ assignment, MTC

informed CFM that the Option Agreement was unenforceable. The

station has an appraised value of approximately $18 million. 

The case is set for trial on November 8, 2005. Joint

Pretrial Statement at 1. CFM and MTC have withdrawn their

demands for a jury trial. Joint Pretrial Statement at 2.

///

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II. The Current Motion

CFM moves to strike the designation of Dennis P. Corbett as

an expert, to strike his expert report, and to exclude his

testimony at trial. CFM argues that 1) Mr. Corbett’s expert

report (the “Report”) features improper legal conclusions, 2) the

Report is irrelevant because the issue of FCC approval is not

before the Court, and 3) the FCC, not the district court, has

exclusive authority to decide an applicant’s qualifications.

MTC argues in response that 1) Mr. Corbett’s testimony is

relevant, 2) Mr. Corbett will not offer improper legal

conclusions, and 3) Mr. Corbett will not invade the Court’s role

as sole arbiter of the law. 

III. Legal standard 

Federal Rule of Evidence 702 governs the admissibility of

expert testimony:

If scientific, technical, or other

specialized knowledge will assist the trier

of fact to understand the evidence or to

determine a fact in issue, a witness

qualified as an expert by knowledge, skill,

experience, training, or education, may

testify thereto in the form of an opinion or

otherwise, if (1) the testimony is based upon

sufficient facts or data, (2) the testimony

is the product of reliable principles and

methods, and (3) the witness has applied the

principles and methods reliably to the facts

of the case.

The district court acts as a “gatekeeper” and preliminarily

determines whether the expert testimony is reliable and whether

the methodology can be applied to the facts of the case and is

relevant to the task at hand. Daubert v. Merrell Dow Pharms.,

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509 U.S. 579, 582, 592-93, 125 L. Ed. 2d 469, 113 S. Ct. 2786

(1993). Pursuant to Federal Rule of Evidence 104(a), the

proponent of expert testimony bears the burden to establish

admissibility by a preponderance of proof. Daubert, 509 U.S. at

592 n. 10 (citing Bourjaily v. U.S., 483 U.S. 171, 175-76, 107 S.

Ct. 2775, 97 L. Ed. 2d 144 (1987)).

To the extent CFM seeks a final determination of the

admissibility of all or part of Mr. Corbett’s testimony, what it

offers is a definitive motion in limine. See 21 Charles Alan

Wright & Kenneth W. Graham, Jr., Federal Practice and Procedure

§ 5037.10 (2d ed. 2005). Federal Rule of Evidence 103 empowers a

court to make “a definitive ruling on the record admitting or

excluding evidence, either at or before trial.” A pretrial

motion in limine forces a court to decide the merits of

introducing a piece of evidence without the benefit of the

context of trial. Id.; see United States v. Marino, 200 F.3d 6,

11 (1st Cir. 1999) (recognizing that proffered evidence can be

more accurately assessed in the context of other evidence). 

Regardless of a court’s initial decision on a motion in limine it

may revisit the issue at trial. See Fed. R. Evid. 103 advisory

committee’s note to 2000 Amendment (“Even where the court’s

ruling is definitive, nothing in the amendment prohibits the

court from revisiting its decision when the evidence is to be

offered.”); Luce v. United States, 469 U.S. 38, 41-42, 83 L. Ed.

2d 443, 105 S. Ct. 460 (1984) (“[E]ven if nothing unexpected

happens at trial, the district judge is free, in the exercise of

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sound judicial discretion, to alter a previous in limine

ruling.”) “The Supreme Court has recognized that a ruling on a

motion in limine is essentially a preliminary opinion that falls

entirely within the discretion of the district court.” United

States v. Bensimon, 172 F.3d 1121, 1127 (9th Cir. 1999) (citing

Luce, 469 U.S. at 41-42). Rule 103 does not require a court to

rule on a motion in limine. Wright & Graham, supra, § 5037.18.

IV. Discussion

A. Mr. Corbett’s Qualifications

CFM conceded at oral argument that it does not challenge Mr.

Corbett’s qualifications as an expert in the field of

communications regulatory law or FCC matters. The Court will

presume for purposes of this motion that Mr. Corbett’s

specialized knowledge qualifies him to give expert opinions

concerning the FCC.

B. Legal Opinion

Though expert testimony is appropriate where “scientific,

technical, or other specialized knowledge will assist the trier

of fact,” expert testimony consisting of legal conclusions is

generally inappropriate. Aguilar v. Int’l Longshoremen's Union

Local #10, 966 F.2d 443,447 (9th Cir. 1992) (upholding district

court’s exclusion of expert legal opinion as “utterly

unhelpful”). While expert testimony may be permissible to

describe a complicated agency process, such testimony should not

prescribe legal standards to apply to the facts of the case. 

Marx & Co., Inc. v. Diners’ Club, Inc., 550 F.2d 505, 508-09 (2d

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Cir. 1977) (permitting expert testimony regarding SEC

registration practices but excluding testimony interpreting legal

effect of contract terms). 

The concerns about admitting expert legal opinion may be

lessened where, as here, a court sits as trier of fact. Martin

v. Ind. Mich. Power Co., 292 F. Supp. 2d 947, 959 (W.D. Mich.

2002) (concluding that dangers that legal expert testimony

presents are “minimal if not nonexistent” where a court is the

trier of fact); see also Volk v. United States, 57 F. Supp. 2d

888, 896 (N.D. Cal. 1999) (“[T]he Daubert gatekeeping obligation

is less pressing in connection with a bench trial.”); Gibbs v.

Gibbs, 210 F.3d 491, 500 (5th Cir. 2000) (“Most of the safeguards

provided for in Daubert are not as essential in a case such as

this where a district judge sits as the trier of fact in place of

a jury.”). Nevertheless, the trial judge acting as trier of fact

has “broad discretion to admit or exclude” expert testimony that

is not helpful to its decision. Beech Aircraft Corp. v. United

States, 51 F.3d 834, 842 (9th Cir. 1995) (holding that the court

properly excluded from a bench trial expert opinion concerning

what could be heard in a tape recorded conversation because the

trial judge was in a better position to make that determination). 

The meaning of federal regulations is a question of law, not

a question of fact. Bammerlin v. Navistar Int’l Transp. Corp.,

30 F.3d 898, 900 (7th Cir. 1994) (excluding expert testimony

regarding compliance with Federal Motor Vehicle Safety

Standards); United States v. S. Ind. Gas & Elec. Co., 55 Env’t

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Rep. Cas. (BNA) 1597, 2002 U.S. Dist. LEXIS 20936, at *23-24

(S.D. Ind. Oct. 24, 2002) (excluding expert testimony

interpreting the Clean Air Act and its accompanying regulations). 

One district court has excluded expert testimony reviewing “FCC

rulings and regulations” on the ground that it “usurps the role

of the trial judge in determining the relevant law.” TC Systems

Inc. v. Town of Colonie, 213 F. Supp. 2d 171, 182 (N.D.N.Y.

2002). Noting that a portion of the expert’s report “reads more

like a legal brief than an expert opinion,” the court refused to

consider it in deciding a motion for summary judgment. Id. 

Though the FCC leaves determination of state-law contractual

rights to the courts, it has exclusive authority over licensing

matters. Dale J. Parsons, Jr., 10 FCC Rcd 2718, 2720 (1995);

Arecibo Radio Corp., 101 F.C.C.2d 545, 548 (1985).

Plaintiff contends that a number of the Report’s contentions

are impermissible legal conclusions:

“Under 47 C.F.R. § 73.3555, Larry Miller’s

Lincoln application is therefore still

‘pending’ at the FCC within the meaning of 47

C.F.R. § 1.65(a). Larry Miller may not

lawfully own attributable ownership interests

in television stations on both Channel 51 and

Channel 45 in Lincoln, Nebraska. Given this

prohibition, and given Larry Miller’s pending

application for Channel 45 in Lincoln, Larry

Miller could not, consistent with 47 C.F.R.

§ 73.3518, also propose to acquire and hold a

second attributable ownership interest in the

permittee of Channel 51 in Lincoln.” 

(Report, at 3-4.)

“FCC analysis of the issue . . . typically

focuses on three aspects of broadcast station

operation: finances, personnel, and

programming. Stated most simply, the

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individual(s) demonstrated to be in control

of these three aspects of operation are

deemed to be in control of a licensed

station. . . . In my review of the Lincoln 51

Application and the Transcript, I evaluated

evidence that bears on the issue of Carol

Miller’s deposition that bears on CFM’s

control of CFM and the Lincoln 51

Application.” (Report, at 4.)

“Given the representations and certifications

made under Carol Miller’s signature to the

FCC in the Lincoln 51 Application, I reviewed

the Transcript for evidence that the person

represented to be the sole member of the

limited liability company, who had been

solely responsible for all certifications in

CFM’s Lincoln 51 Application, was familiar

with basic details concerning the applicant

and its application.” (Report, 6-7)

“In light of Carol Miller’s answers as

reflected in the Transcript, the multiple

representations and certifications in the

Lincoln 51 Application under Carol Miller’s

signature as CFM’s sole member constitute

disqualifying misrepresentations under

relevant FCC case law, of a magnitude

sufficient to render CFM unfit to hold any

FCC license under FCC precedent.” (Report,

at 10)

“In addition to this fundamental overall

misrepresentation, Carol Miller’s testimony

indicates that the Lincoln 51 Application

contains multiple individual false

certifications.” (Report, at 11) 

“The applicant, CFM, ultimately must suffer

the consequences of these stark, intentional

misrepresentations, exacerbated by CFM’s

attempt to forestall a [FCC] inquiry by

aggressively claiming, in the face of Gray’s

challenge at the FCC, that Carol Miller was

in total control of CFM and the Lincoln 51

Application. [FCC] case law is replete with

examples of applicants for FCC authorizations

who were disqualified on the basis of

evidence presented at a hearing similar to or

even less compelling than that presented

here.” (Report at 12-13)

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“Under this test, CFM’s false certifications

and misrepresentations in the Lincoln 51

Application are so egregious as to disqualify

CFM from becoming the license[e] of Omaha

Channel 15.” (Report, at 14) 

“The ‘total delegation’ of authority over

CFM’s affairs to her husband evident from her

deposition testimony in fact constitutes an

impermissible abrogation of the complete

authority she is held out to the FCC as

possessing over CFM.” (Report, at 14)

“The FCC’s recent grant of the Lincoln 51

Application calls attention to another issue

relating to CFM’s basic qualifications to

hold an FCC authorization. . . . 47 C.F.R.

§ 1.65(a) obligated CFM to amend the Lincoln

51 Application as promptly as possible . . .

CFM’s failure to do so significantly

compounded its original infraction by

depriving the [FCC] of a full record

concerning the Lincoln 51 Application before

the FCC acted on May 24, 2005. The

withholding of this material, which has a

substantial bearing on the application’s bona

fides, constitutes a lack of candor and is

itself a separate, disqualifying offense

under [FCC] precedent.” (Report, at 15-16)

The Report does read “like a legal brief” arguing that CFM

is not qualified to operate KXVO(TV) under FCC regulations and

case law. Whitney Decl. Ex. A. The Report features numerous

citations to federal court opinions, FCC case law, and the Code

of Federal Regulations. The Report applies a variety of

regulatory law to facts concerning CFM, focusing especially on

CFM’s application (the “Lincoln Application”) for FCC consent to

transfer Lincoln Broadcasting, LLC, (“Lincoln”) and a transcript

of the deposition of Carol Miller on April 13, 2005.

In conjunction with its opposition, MTC submitted a

Supplement to the Report of Dennis P. Corbett (the “Supplement”). 

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Owdom Decl. Ex. A. The Supplement, dated September 7, 2005, is

based on developments since Mr. Corbett composed the Report. The

Supplement focuses on three letter rulings the FCC has issued

regarding a different case concerning CFM. The first letter

ruling of May 24, 2005, (“Letter Ruling I”) granted the Lincoln

Application to transfer control of Lincoln from World

Investments, Inc. (“World”) to CFM. Owdom Decl. Ex. A at 4. The

second letter ruling of June 20, 2005, (“Letter Ruling II”)

rescinded the consent to transfer that Letter Ruling I had

granted. Owdom Decl. Ex. A at 11. On August 25, 2005, the FCC

issued a third letter ruling (“Letter Ruling III”) that required

CFM to relinquish control of Lincoln and required World to resume

control. Owdom Decl. Ex. A at 13.

Mr. Corbett opines in the Supplement that the FCC’s recision

of its grant of consent in Letter Ruling II was “an extraordinary

event.” Owdom Decl. Ex. A at 1. According to the Supplement,

“the FCC’s actions in Letter Rulings II and II are extremely

reliable indicators that the FCC would not approve CFM’s

acquisition of any broadcast station license, including KXVO(TV),

Omaha, Nebraska, without the FCC’s first resolving in a manner

favorable to CFM, all qualifications issues raised by the

transcript.” Owdom Decl. Ex. A at 2. Mr. Corbett further

alleges in the Supplement that Letter Rulings II and III are

“extremely reliable indicators of the seriousness with which the

FCC regards this matter.” Owdom Decl. Ex. A at 3. The

Supplement concludes that the FCC “is virtually certain to

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refrain from granting any application that may be filed by CFM to

acquire Station KXVO(TV) unless and until the qualifications

issues raised by the Transcript are resolved favorably to CFM.” 

Owdom Decl. Ex. A at 3 (emphasis in original; footnote omitted).

In the Supplement, Mr. Corbett does not invoke FCC case law

as he did in the Report. Instead, he substitutes vague

assertions of the FCC’s “typical” course. Without citing any

authority, the Supplement states that the “far more typical

course” is for the FCC to leave initial rulings in place while it

considers reconsideration requests and applications for review. 

Owdom Decl. Ex. A at 2. Mr. Corbett writes that based on his

“opinion and experience” the letter rulings are “reliable

indicators” and that the FCC’s rescission has been “highly

unusual and abrupt.” Owdom Decl. Ex. A at 2. He bases his

certainty of the outcome on the “extraordinary and dramatic

action” that the FCC has taken. Owdom Decl. Ex. A at 2.

To the extent that the Supplement substitutes a vague

invocation of “opinion and experience” for legal sources, its

admission for the purpose of guessing what the FCC will do next

does not become any more appropriate. Where Mr. Corbett abandons

the legal sources that supported the initial Report, his opinion

as to the likely outcome becomes mere unsupported speculation. 

See GE v. Joiner, 522 U.S. 136, 143-47 (U.S. 1997). A district

court may exclude as speculative expert opinion testimony that

lacks a reliable basis. Id. at 146-47. “Otherwise admissible

expert testimony may be excluded under Fed. R. Evid. 403 if its

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probative value is substantially outweighed by the danger of

unfair prejudice, confusion of the issues, or undue delay.” 

United States v. Hoac, 990 F.2d 1099, 1103 (9th Cir. 1993). 

Expert testimony may be excluded where it “would inject

collateral matters with weak probative value.” Id. 

Mr. Corbett’s opinions in the Report and Supplement about

how the FCC will likely apply statutory and case law precedent to

CFM’s application, whether based on his interpretations of the

law or his experience, are in any circumstances “utterly

unhelpful” to the Court. See Aguilar, 966 F.2d at 447. The

Court is perfectly able to review FCC decisions and regulations

to decide how the law applies to the present facts. See TC

Systems Inc., 213 F. Supp. 2d at 182. MTC remains free to use

briefing to persuade the Court that MTC’s interpretation of the

law is superior. To the extent Mr. Corbett’s opinions about the

FCC’s likely actions rest merely on vague claims regarding his

experience of practicing before the FCC, they amount to mere

speculation. The ultimate disposition of any legal proceeding is

by nature unpredictable. The FCC has already once reversed

itself in the case on which Mr. Corbett has based his opinions. 

See Owdom Decl. Ex. A at 11. Mr. Corbett’s stated basis for his

opinion is simply that the FCC’s actions have been “highly

unusual and abrupt” and “extraordinary and dramatic.” Owdom

Decl. Ex. A at 3. These cursory descriptions do not meet MTC’s

burden to show that Mr. Corbett’s opinion about the outcome of

FCC proceedings is reliable. See Daubert, 509 U.S. at 592 n. 10. 

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Mr. Corbett’s opinions will not help the trier of fact

decide how the FCC would likely decide the propriety of CFM

acquiring KXVO. Mr. Corbett is therefore prohibited from

testifying about how FCC law applies to the facts of this case. 

He is also barred from testifying to any conclusions the basis of

which, in whole or in part, is his opinion about the likely

outcome of any future decision of the FCC. The Court hereby

excludes opinion testimony concerning, or opinion testimony that

has as a premise opinions concerning:

• whether any entity may now or in the future lawfully have an

ownership interest in any broadcast station.

• what factors the FCC considers in deciding control of a

broadcast station and how such factors apply to this case.

• whether and how any past, present, or future conduct,

including but not limited to Carol Miller’s deposition and

the Lincoln Application, will affect any future FCC

decision.

• whether and how any FCC action, including but not limited to

letter rulings, indicates its likely decision on any legal

issue.

• how the FCC will decide any legal issue.

• any other application of law to the facts of the case.

Therefore, with respect to this testimony CFM’s motion is

GRANTED.

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C. Relevance

A district court’s gatekeeping function requires that it

“ensure that the proposed expert testimony is ‘relevant to the

task at hand,’ i.e., that it logically advances a material aspect

of the proposing party’s case.” Daubert v. Merrell Dow Pharms.,

43 F.3d 1311, 1315 (9th Cir. 1995) (quoting Daubert, 509 U.S. at

597) (internal citation omitted). The party advancing the expert

testimony therefore bears the burden of showing that it is

relevant to advancing a claim or defense. Daubert, 509 U.S. at

592 n. 10; see Fed. R. Evid. 402; see also Bourjaily, 483 U.S. at

175-76. “‘Relevant evidence’ means evidence having 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. 401.

In determining whether Mr. Corbett can provide relevant

opinion testimony, the Court looks to his Report and Supplement. 

An expert report should contain “a complete statement of all

opinions to be expressed and the basis and reasons therefor.” 

Fed. R. Civ. P. 26(a)(2)(B). The report should “set forth the

substance of the direct examination.” Fed. R. Civ. P. 26(a)(2)

advisory committee’s note to 1993 Amendment. Federal Rule of

Civil Procedure 37(c)(1) automatically excludes from trial any

opinions that should have been disclosed in the report but were

not, unless the failure to disclose was substantially justified

or harmless. Yeti by Molly, Ltd. v. Deckers Outdoor Corp., 259

F.3d 1101, 1106 (9th Cir. 2001).

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1. Unclean Hands Doctrine

One ground that MTC asserts for relevance of Mr. Corbett’s

testimony is in support of its unclean hands defense to CFM’s

claim for specific performance. Def.’s Opp’n at 5. In support,

MTC cites only one case, In re Marriage of Fogarty and Rasbeary,

78 Cal. App. 4th 1353, 1366 (2000), for the general rule that “a

party requesting equitable relief must come into court with clean

hands.” In that case, the ex-husband invoked the defense of

laches against a claim brought by his ex-wife for past-due child

support payments. Id. The ex-husband’s failure to pay child

support did not bar under the unclean hands doctrine his use of

the equitable defense of laches. Id. Marriage of Fogarty

provides no support to MTC’s assertion that Mr. Corbett’s expert

testimony is relevant to its unclean hands defense.

MTC faces two problems in establishing the relevance of Mr.

Corbett’s testimony to an unclean hands defense. First, the

unclean hands defense only applies to misconduct in the

particular transaction or concerning the subject matter of the

litigation. Wilson v. S.L. Rey, Inc., 17 Cal. App. 4th 234, 244

(1993) (holding that doctrine of unclean hands barred recovery

where evidence showed plaintiff committed waste on land that was

the subject of the suit). Courts should look to how intimately

the alleged misconduct relates to the present action: “What is

material is not that the plaintiff’s hands are dirty, but that he

dirtied them in acquiring the right he now asserts, or that the

manner of dirtying renders inequitable the assertion of such

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rights against the defendant.” Republic Molding Corp. v. B.W.

Photo Utilities, 319 F.2d 347, 350 (9th Cir. 1963); see Newman v.

Checkrite Cal., 912 F. Supp. 1354, 1376 (E.D. Cal. 1995) (holding

that doctrine of unclean hands did not prevent plaintiffs, who

had written bad checks for retail purchases, from obtaining

equitable relief against defendant collection agencies for

improper collection practices).

MTC alleges that misconduct in connection with the transfer

of a different television station, Channel 51 in Lincoln,

Nebraska, bars CFM’s claim for specific performance. Whitney

Decl. Ex. A. at 4; Owdom Decl. Ex. A at 1. MTC does not assert

that CFM’s purchase of a different television station is part of

the same transaction or the same litigation as that involved in

this case. The Supplement does explain how CFM’s conduct in

other proceedings could affect its future acquisition of

KXVO(TV). Owdom Decl. Ex. A at 3. Even if the two transactions

may affect one another, CFM did not dirty its hands “in acquiring

the right [it] now asserts.” See Republic Molding Corp., 319

F.2d at 350. CFM’s attempt to acquire Channel 51 appears to be

completely unrelated to the contractual rights at issue here

regarding KXVO(TV). Nor has MTC explained how in any other way

“the manner of dirtying renders inequitable the assertion of”

CFM’s contractual rights. See id. 

The second hurdle that MTC faces is that an unclean hands

defense is appropriate only where the alleged misconduct, if

unchecked, would have prejudiced the other party. Soon v.

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Beckman, 234 Cal. App. 2d 33, 36 (1965). For the doctrine to

apply, the “‘conduct must be so intimately connected to the

injury of another with the matter for which he seeks relief, as

to make it inequitable to accord him such relief. It must have

been conduct which, if permitted, inequitably affects the

relationship between the plaintiff and the defendant, . . .’” 

Estate of Blanco, 86 Cal. App. 3d 826, 833 (1978) (quoting

Bradley Co. v. Bradley, 165 Cal. 237, 242 (1913)). In Pleasant

Valley Canal Co. v. Borror, 61 Cal. App. 4th 742 (1998), the

court addressed the effect of a plaintiff’s past submission of

untruthful information to a government agency. Id. at 785 n. 31. 

The case concerned the parties’ respective riparian rights and

depended in part upon plaintiff’s allegedly inflated reports to

the state regarding its water use. Id. Acknowledging

defendant’s assertions that plaintiff was “fully clothed in bad

faith and inequitable conduct,” the court nevertheless refused to

apply the unclean hands doctrine where defendant had not been

prejudiced by any alleged improper reporting practices. Id.

(citing Soon, 234 Cal. App. 2d at 36).

MTC asserts that if the Court orders specific performance,

it will be “required to join with CFM in an application that

would be filed with the FCC in which MTC would be requesting the

consent of the FCC to transfer the license for Station KXVO in

Omaha, Nebraska, from MTC to CFM.” Def.’s Opp’n at 2-3. For the

first time at oral argument, MTC argued that it would be

prejudiced by a decree of specific performance because any

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application would be held “in limbo.” MTC also claimed that a

decree of specific performance, combined with FCC’s denial of

CFM’s licence, would be prejudicial because it would require more

litigation in this Court. 

In any event, it appears that courts are free to resolve

issues of state law prior to an FCC licensing inquiry. Radio

Station WOW, Inc. v. Johnson, 326 U.S. 120, 131-32 (1945)

(recognizing the power of the states to resolve issues of fraud

concerning FCC-licensed facilities); see also Minn.-Iowa

Television Co. v. Watonwan T.V. Improvement Ass’n, 294 N.W.2d

297, 305 (Minn. 1980) (holding that FCC’s opposition to a

contract provision did not bar the enforcement of the contract

under state law). A district court deciding a case similar to

this one awarded specific performance under an option contract

despite uncertainty about the likelihood of FCC approval. Media

Gen. Broad. of S.C. Holdings, Inc. v. Pappas Telecasting of the

Carolinas, 152 F. Supp. 2d 865, 868 (W.D.N.C. 2001). The court

entered judgment requiring defendant to file FCC documents for

transfer pursuant to the option. Id. Acknowledging defendants’

assertion that the FCC would not approve the sale, the court

granted specific performance and noted that it would “revisit the

question of remedies if the FCC blocks said sale.” Id.

Accordingly, the Court is unable to discern how Mr.

Corbett’s testimony could be relevant to an unclean hands

defense. Divining the outcome of FCC proceedings or interpreting

the law that applies to such actions cannot establish that

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specific performance is barred by the doctrine of unclean hands. 

The Court can grant specific performance regardless of the FCC’s

predisposition toward CFM’s alleged misconduct or any other

licensing issues. Nevertheless, because the merits of the

unclean hands defense were not fully briefed in the context of

this motion, the Court declines at this time to exclude on this

ground any of Mr. Corbett’s testimony. 

2. Superiority of Specific Performance

A second ground of relevance MTC asserts is that Mr.

Corbett’s testimony is relevant to the Court’s determination of

whether specific performance is the superior remedy. Specific

performance is a discretionary remedy. Petersen v. Hartell, 40

Cal. 3d 102, 110 (1985). Specific performance may be refused

where granting it would cause “unreasonable hardship or loss to

the party in breach or to third persons.” Restatement (Second)

of Contracts § 364 (1981); see Cal. Civ. Code § 3391 (“Specific

performance cannot be enforced against a party to a contract . .

. [i]f it is not, as to him, just and reasonable . . .”); United

States v. Georgia-Pacific Co., 421 F.2d 92, 104 (9th Cir. 1970)

(“Courts of equity have long refused to decree specific

performance where the result would be unconscionable, unjust,

inequitable, oppressive or unduly harsh.”); Blackburn v.

Charnley, 117 Cal. App. 4th 758, 765 (2004) (upholding trial

court grant of specific performance based on balancing the

hardships of enforcement).

It is not, at this point, clear what factors will be

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relevant to determine whether to grant specific performance. 

MTC’s claims that it will be prejudiced by being held “in limbo”

pending a licensing decision or by being compelled to engage in

further litigation following the denial of a license may impact a

remedial decision of the Court.

The Court’s decision does not preclude Mr. Corbett from

giving nonopinion testimony or from giving relevant nonlegal

opinion testimony disclosed in the Report and Supplement. Where

complex administrative processes are at issue, expert testimony

can be helpful to explain them to the trier of fact. See Marx,

550 F.2d at 508-09 (2d Cir. 1977). In Marx, the court excluded

expert testimony about whether a party’s conduct violated a term

of a contract regarding the registration of stock. Id. at 509. 

The court decided, however, that the expert in securities

regulation “was competent to explain to the jury the step-by-step

practices ordinarily followed by lawyers and corporations in

shepherding a registration statement through the SEC.” Id. at

508-09; see also TC Systems Inc., 213 F. Supp. 2d at 182

(excluding portions of expert report regarding the FCC that read

“like a legal brief” but declining to exclude the expert’s

testimony at trial if the party could establish “a nexus between

the FCC criteria and the facts here”). 

Testimony about the process of obtaining FCC approval may

prove relevant to a decision about whether to award specific

performance. Though the Court is capable of applying FCC law to

any relevant facts, Mr. Corbett may give relevant expert

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testimony regarding the nature of FCC procedures and practices

apart from the law that underlies them. Such testimony could be

factual or could be in the form of any nonlegal opinion that he

has already disclosed in the Report and Supplement. The Court is

not in a position to determine at this stage whether MTC can

establish a relevant “nexus” between Mr. Corbett’s testimony and

this case. Excluding all of Mr. Corbett’s testimony on a

relevance ground is therefore premature. 

ACCORDINGLY:

1. Plaintiff’s motion to exclude Mr. Corbett’s opinion

testimony concerning the following subjects is GRANTED:

a. whether any entity may now or in the future lawfully

have an ownership interest in any broadcast station.

b. what factors the FCC considers in deciding control of a

broadcast station and how such factors apply to this

case.

c. whether and how any past, present, or future conduct,

including but not limited to Carol Miller’s deposition

and the Lincoln Application, will affect any future FCC

decision.

d. whether and how any FCC action, including but not

limited to letter rulings, indicates its likely

decision on any legal issue.

e. how the FCC will decide any legal issue.

f. any other application of law to the facts of the case.

///

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2. Plaintiff’s motion to exclude the remainder of Mr. 

Corbett’s testimony is DENIED.

3. Plaintiff’s motion to strike Mr. Corbett’s designation as an

expert and to strike his expert report is DENIED.

IT IS SO ORDERED.

Dated: October 11, 2005 /s/ Robert E. Coyle 

810ha4 UNITED STATES DISTRICT JUDGE

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