Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_00-cv-20905/USCOURTS-cand-5_00-cv-20905-62/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1331 Fed. Question: Breach of Contract

---

United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

ORDER GRANTING IN PART AND DENYING IN PART RAMBUS'S RENEWED MOTION TO STRIKE JURY DEMANDS

REGARDING THE FRAUD CLAIMS—C-00-20905; C-05-00334; C-06-00244 RMW

United States District Court

For the Northern District of California

E-filed: February 2, 2008

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

HYNIX SEMICONDUCTOR INC., HYNIX

SEMICONDUCTOR AMERICA INC.,

HYNIX SEMICONDUCTOR U.K. LTD., and

HYNIX SEMICONDUCTOR

DEUTSCHLAND GmbH,

Plaintiffs,

v.

RAMBUS INC.,

Defendant.

No. CV-00-20905 RMW

ORDER GRANTING IN PART AND

DENYING IN PART RAMBUS'S RENEWED

MOTION TO STRIKE JURY DEMANDS

WITH RESPECT TO THE FRAUD CLAIMS

[Re Docket No. 2945]

Case 5:00-cv-20905-RMW Document 3133 Filed 02/02/08 Page 1 of 7
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

ORDER GRANTING IN PART AND DENYING IN PART RAMBUS'S RENEWED MOTION TO STRIKE JURY DEMANDS

REGARDING THE FRAUD CLAIMS—C-00-20905; C-05-00334; C-06-00244 RMW

2

RAMBUS INC.,

Plaintiff,

v.

HYNIX SEMICONDUCTOR INC., HYNIX

SEMICONDUCTOR AMERICA INC.,

HYNIX SEMICONDUCTOR

MANUFACTURING AMERICA INC., 

SAMSUNG ELECTRONICS CO., LTD.,

SAMSUNG ELECTRONICS AMERICA,

INC., SAMSUNG SEMICONDUCTOR, INC.,

SAMSUNG AUSTIN SEMICONDUCTOR,

L.P., 

NANYA TECHNOLOGY CORPORATION,

NANYA TECHNOLOGY CORPORATION

U.S.A.,

Defendants.

No. C-05-00334 RMW

[Re Docket No. 966]

RAMBUS INC.,

Plaintiff,

v.

MICRON TECHNOLOGY, INC., and

MICRON SEMICONDUCTOR PRODUCTS,

INC.

Defendants.

 No. C-06-00244 RMW

[Re Docket No. 594]

I. THE RENEWED MOTION TO STRIKE

The court previously denied without prejudice Rambus's motion to strike the jury demands of

 Hynix, Micron and Nanya ("the Manufacturers") on their fraud claims. See Hynix Semiconductor

Inc. v. Rambus. Inc., 2007 WL 3284069 (N.D. Cal. Nov. 4, 2007) at *16. The court stated that it

would entertain a renewed motion to strike the jury demands if, after the close of discovery, the

Manufacturers failed to produce evidence of their claimed actual, but unquantifiable, damages. The

court suggested that it would follow the procedure set forth in the Sixth Circuit case of Hildebrand

v. Board of Trustees of Mich. St. Univ., 607 F.2d 705 (6th Cir. 1979):

If it becomes clear prior to trial that no genuine issue exists as to any material facts,

Case 5:00-cv-20905-RMW Document 3133 Filed 02/02/08 Page 2 of 7
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

ORDER GRANTING IN PART AND DENYING IN PART RAMBUS'S RENEWED MOTION TO STRIKE JURY DEMANDS

REGARDING THE FRAUD CLAIMS—C-00-20905; C-05-00334; C-06-00244 RMW

3

a district court can grant summary judgment as to some or all issues. This standard

can operate to eliminate meritless damages requests and thus moot a jury demand.

Under this standard, the district court is free to examine all of the record and not just

the pleadings. If a demand for damages is so insubstantial that it cannot meet the

standard contained in Rule 56, then it should not be allowed to convert equitable

issues into legal ones.

Id. at 10.

With trial about to start, Rambus now renews its motion to strike the jury demands of the

Manufacturers' with respect to their fraud claims because they have not produced evidence of actual

damages on those claims. For the reasons set forth below, the court denies Rambus's motion with

respect to the fraud claims of Hynix and Micron and grants the motion with respect to Nanya's

claim. However, the court elects to try the fraud issue as to Nanya with an advisory jury. See Fed.

R. Civ. P. 39(c).

II. ANALYSIS

 In the prior Hynix order, the court explained that the Manufacturers could not claim their

attorneys' fees as compensatory damages for a fraud claim. The "American rule" requires each party

to bear its own legal fees. See Cal. Civ. Code § 1021. The California Supreme Court closely guards

this principle, and is loathe to expand the contexts in which a party can recover its attorneys' fees

unless authorized by a statute. Gray v. Don Miller & Associates, Inc., 35 Cal. 3d 498, 507 (1984)

(reversing attorneys' fees award in fraud case); see also Prentice v. N. Am. Title Guar. Corp., 59 Cal.

3d 618, 620 (1963) ("This section undoubtedly prohibits the allowance of attorney fees against a

defendant in an ordinary two-party lawsuit.").

The Manufacturers claim, however, that they have a right to a jury because they suffererd

actual but unquantifiable damages. Fraud requires proof of injury. See Cal. Civ. Code § 1709;

Furia v. Helm, 111 Cal. App. 4th 945, 956 (2003). Nominal damages can be awarded where a

plaintiff has proven actual damage has occurred (and therefore has satisfied fraud's damages

element), but the plaintiff cannot prove the amount of the actual damage. See, e.g., Oates v. Glover,

154 So. 786, 787 (Ala. 1934); McLaughlin v. National Union Fire Ins. Co., 23 Cal. App. 4th 1132,

1163 (1994); Sterling Drug v. Benatar, 99 Cal. App. 2d 393, 400 (1950). Rambus maintains that

the Manufacturers have not shown in opposition to Rambus's renewed motion that they have

Case 5:00-cv-20905-RMW Document 3133 Filed 02/02/08 Page 3 of 7
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

ORDER GRANTING IN PART AND DENYING IN PART RAMBUS'S RENEWED MOTION TO STRIKE JURY DEMANDS

REGARDING THE FRAUD CLAIMS—C-00-20905; C-05-00334; C-06-00244 RMW

4

suffered any such "actual but unquantifiable" damage.

The court finds Hynix's showing marginal but sufficient to support its jury demand. O.C.

Kwon, Hynix's senior vice-president, testified that significant management time and efforts was

expended as a result of Rambus's conduct which could have otherwise been used for more

productive opportunities. This time was spent by the CEO and the "patent team." Kwon Depo. at

79:16-20. Kwon also implied that management had to respond to investors' concerns. Id. at 83:14-

84:20. 

The Restatement Second of Torts § 914, comment c provides that "a successful party in an

action of tort is not entitled to compensation for loss of time, attorney fees or other expenses in the

conduct of the litigation." This rule bars recovery for time spent "in the conduct of litigation," but 

not for time spent dealing with the consequences of an alleged fraud. Indeed, the exclusion of

recovery for time spent on litigation implies that one can recover for time spent dealing with other

consequences of a tortious act. California law recognizes this distinction, and permits one to recover

compensation for time and effort expended in reliance on a defendant's misrepresentation. Cf. Black

v. Tobin, 45 Cal. App. 3d 214, 219-220 (1975) ("it cannot be seriously contended that appellants

would have devoted time and energy to prepare for the sale if they had known that the

announcement of a public sale was spurious."). Here, Kwon's testimony suggests that some time

was spent dealing with Rambus's alleged conduct and not just spent addressing the lawsuits. The

sufficiency of Kwon's testimony in supporting a damage claim must be evaluated in light of the

principle that "[m]aintenance of the jury, as a fact-finding body is of such importance and occupies

so firm a place in our history and jurisprudence that any seeming curtailment of the right to a jury

trial should be scrutinized with the utmost care." Beacon Theatres, Inc. v. Westover, 359 U.S. 500,

501 (1959). Given this strong preference for trying cases to juries, the court finds that Kwon's

testimony could support a finding of "actual but unquantifiable" damages, and hence a right to jury.

Micron has offered some evidence that it spent money looking into the possibility of

alternatives to the allegedly infringing technologies. Lee Depo. at 81:17-82:17; 120:13-23. The

inference is that, at least to some extent, this time and effort was to avoid Rambus's patents and not

Case 5:00-cv-20905-RMW Document 3133 Filed 02/02/08 Page 4 of 7
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

ORDER GRANTING IN PART AND DENYING IN PART RAMBUS'S RENEWED MOTION TO STRIKE JURY DEMANDS

REGARDING THE FRAUD CLAIMS—C-00-20905; C-05-00334; C-06-00244 RMW

5

just an effort to enhance performance of products. Similar to Hynix, Micron has sufficiently

demonstrated that it is entitled to a jury on its fraud claim.

On the other hand, Nanya offered only attorney argument in opposition to Rambus's renewed

motion. The court's prior order, as well as the Sixth Circuit's opinion in Hildebrand, are clear in

requiring a party to set forth admissible evidence in response to a challenge to their right to a jury. 

Hynix, 2007 WL 3284069, at *16. Attorney argument is not admissible evidence. As Nanya's only

evidence of claimed damages are attorneys' fees, which are not recoverable in a fraud action,

Nanya's jury request is stricken.

III. ADVISORY JURY

The court has the power to try any issue with an advisory jury. Fed. R. Civ. P. 39(c). The

court exercises its discretion to do so on Nanya's fraud claim for several reasons. First, many of the

facts underlying the fraud claim will be decided by the jury in deciding the antitrust claims. Even if

the Manufacturers are not entitled to a jury, the court will be required to decide the merits of the

fraud claim in accordance with the jury's factual findings. See Beacon Theatres, 359 U.S. 500

(1959); Shum v. Intel Corp., __ F.3d __, 2007 2404718 (Fed. Cir. 2007). Second, it could be

confusing to the jury if Hynix and Micron present fraud claims but Nanya does not. Third,

evaluation of a fraud claim involves judgments of credibility for which a jury is particularly suited. 

Finally, the law is not entirely clear as to the extent of a showing of damages that must be made to

support a jury demand. With an advisory jury, Nanya will be able to point to the jury's verdict if it is

more favorable than the court's and perhaps be able to receive the benefit of it should the court's

decision that Nanya is not entitled to a jury turn out later to have been wrong. See Alexander v.

Gerhardt Enterprises, Inc., 40 F.3d 187, 192 (7th Cir. 1994) (approving of the use of an advisory

jury to minimize the cost of litigation in cases of uncertainty as to jury entitlement).

//

//

//

//

Case 5:00-cv-20905-RMW Document 3133 Filed 02/02/08 Page 5 of 7
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

ORDER GRANTING IN PART AND DENYING IN PART RAMBUS'S RENEWED MOTION TO STRIKE JURY DEMANDS

REGARDING THE FRAUD CLAIMS—C-00-20905; C-05-00334; C-06-00244 RMW

6

IV. ORDER

Rambus's Renewed Motion to Strike the Jury Demands with Respect to the Fraud Claims is

denied as to the jury demands of Hynix and Micron and granted as to the demand of Nanya. 

However, the court elects to try the fraud issue as to Nanya with an advisory jury as authorized by

Fed. R. Civ. P. 39(c).

DATED: 2/2/2008 

RONALD M. WHYTE

United States District Judge

Case 5:00-cv-20905-RMW Document 3133 Filed 02/02/08 Page 6 of 7
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

ORDER GRANTING IN PART AND DENYING IN PART RAMBUS'S RENEWED MOTION TO STRIKE JURY DEMANDS

REGARDING THE FRAUD CLAIMS—C-00-20905; C-05-00334; C-06-00244 RMW

7

Notice of this document has been electronically sent to:

Counsel for Plaintiff(s):

Craig N. Tolliver ctolliver@mckoolsmith.com 

Pierre J. Hubert phubert@mckoolsmith.com

Gregory P. Stone gregory.stone@mto.com 

Carolyn Hoecker Luedtke luedtkech@mto.com 

Peter A. Detre detrepa@mto.com 

Burton Alexander Gross burton.gross@mto.com, 

Steven McCall Perry steven.perry@mto.com

Counsel for Defendant(s):

Matthew D. Powers matthew.powers@weil.com 

David J. Healey david.healey@weil.com 

Edward R. Reines Edward.Reines@weil.com

John D Beynon john.beynon@weil.com

Jared Bobrow jared.bobrow@weil.com

Leeron Kalay leeron.kalay@weil.com

Theodore G. Brown, III tgbrown@townsend.com

Daniel J. Furniss djfurniss@townsend.com

Jordan Trent Jones jtjones@townsend.com

Kenneth L. Nissly kennissly@thelenreid.com 

Geoffrey H. Yost gyost@thelenreid.com 

Susan Gregory van Keulen svankeulen@thelenreid.com

Patrick Lynch plynch@omm.com 

Jason Sheffield Angell jangell@orrick.com

Vickie L. Feeman vfeeman@orrick.com

Mark Shean mshean@orrick.com 

Kai Tseng hlee@orrick.com

Counsel are responsible for distributing copies of this document to co-counsel that have not

registered for e-filing under the court's CM/ECF program.

Dated: 2/2/2008 TSF

Chambers of Judge Whyte

Case 5:00-cv-20905-RMW Document 3133 Filed 02/02/08 Page 7 of 7