EXHIBIT 4 

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1 APPEARANCES:

2 Present for Plaintiff:

 Friedman Oster & Tejtel

3 David F.E. Tejtel, Esq.

 240 East 79th Street, Suite A

4 New York, New York 10075

 646-661-5881

5 dtejtel@fotpllc.com

 -and6 Caldwell Cassady & Curry, P.C.

 Daniel R. Pearson, Esq.

7 2101 Cedar Springs Road, Suite 1000

 Dallas, Texas 75201

8 214-888-4848 Fax: 214-888-4849

 dpearson@caldwellcc.com

9

10 Present for Defendant:

 Durie Tangri LLP

11 Josh H. Lerner, Esq.

 Laura E. Miller, Esq.

12 217 Leidesdorff Street

 San Francisco, California 94111

13 415-362-6666 Fax: 415-236-6300

 jlerner@durietangri.com

14 lmiller@durietangri.com

15

 ALSO PRESENT: Gabe Zeldin, Esq. (via telephone)

16 Dr. Malhotra (via telephone)

 Steven Baty, Videographer

17

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1 the break, and I performed some calculations in my

2 merits report using that number, applying

3 the diminution-in-value estimates from my model to

4 that number.

5 I don't have information on where those

6 individuals live or exactly what those data are. I

7 believe that information has been requested from

8 Apple repeatedly and has not been provided.

9 Q. So as of now you have not offered or

10 calculated diminution-in-value estimates for iPhone

11 4 and iPhone 4S users in California, correct?

12 A. Not specifically in California because I do

13 not have a list from Apple of users who were in

14 California. My model diminution-in-value estimates

15 apply equally if I were given a list of users in

16 California or if I were given a list of users in the

17 nation. I just need a list of users who were

18 affected by the break or phone owners who were

19 affected by the break and some sufficient

20 documentation to go with that list so that I can

21 correctly apply damages estimates.

22 Q. And the diminution-in-value estimates that

23 you offered in your merits report, those include

24 diminution in value for owners of jailbroken phones,

25 correct?

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1 you want to keep going?

2 THE WITNESS: I don't know. If it's a

3 natural breaking time, we can take a break.

4 MR. TEJTEL: Do you want to take a

5 break?

6 MR. LERNER: Yeah. Like I said before,

7 I'm not one of these people, "I've gotta finish this

8 line." It really doesn't matter to me. I've been

9 doing it for way too long, I could care less.

10 MR. TEJTEL: Okay, we'll take a break,

11 then.

12 VIDEOGRAPHER: The time is 10:38 and

13 we're off the record.

14 (Recess.)

15 VIDEOGRAPHER: The time is 10:55 and

16 we're on the record.

17 BY MR. LERNER:

18 Q. A couple more questions just about the

19 market so I can try and understand. Would the

20 average price that the seller of a phone, meaning an

21 individual who trades it in, like me, for example,

22 might that be higher in California than -- again,

23 I'll just use New Mexico just 'cause it's the one

24 that comes to mind. Might sellers of iPhone 4 and

25 4S's in the trade-in market get more for their phone

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1 in California than they do in New Mexico?

2 MR. TEJTEL: Object to form.

3 A. I'm sorry. So are you referring to if

4 somebody in California goes into a Best Buy and

5 trades in their phone, would they receive more from

6 Best Buy for their trade-in in California than in

7 New Mexico?

8 Q. Yeah.

9 A. They could. It would depend on Best Buy's

10 promotional incentives, what they were trying to

11 achieve with that price of the phone for their

12 larger business organization and profits, their

13 collective profits, their total profits and revenues

14 for Best Buy as a complete electronics -- you know,

15 as a large electronics retailer.

16 Q. And could it also depend on the fact that

17 the seller of the phone is in California?

18 MR. TEJTEL: Object to form.

19 A. So again, we're talking about trade-in

20 prices; we're not talking about the market value of

21 used phones; we're talking about trade-in prices --

22 Q. Mm-hm.

23 A. -- which are not prices that are used in my

24 model, in my merits report. And as is clear from

25 many industry facts and from the testimony of

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1 industry experts in this case, those prices may

2 include many features -- many factors and objectives

3 that are not a part of the value of the phone

4 itself. Those could vary from time to time and from

5 region to region based on the objectives of the

6 firm's buyback program.

7 Q. And with respect to region to region, they

8 could vary based on, for example, I assume average

9 income in a state?

10 A. I don't know. They could. I would need to

11 look into -- further into what are the models that

12 are being run by these companies, determining their

13 buyback programs. That's not something that I can

14 speak to specifically. It's not relevant for my

15 model or for my results.

16 Q. And again, with respect to regions, it

17 could vary based on the condition of the phones

18 that, on average, are traded in in a given state,

19 right?

20 MR. TEJTEL: Object to form.

21 A. Again, I don't know. I just have to

22 understand what the trade-in price function looks

23 like. I don't have information on that. It's not

24 part of my -- the specific functions are not part of

25 my model as I'm looking at the market value --

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1 Q. Do you know whether --

2 A. -- the market resale price, used market

3 resale price of phones.

4 Q. I apologize, I didn't mean to interrupt.

5 Do you know whether or not Californians

6 buy more smartphones than residents of other states?

7 MR. TEJTEL: Object to form.

8 A. I have not looked into whether Californians

9 buy more smartphones than residents in other states

10 in general as that fact is not relevant to the

11 opinions set forth in my reports.

12 Q. And I assume it's also not relevant if

13 Californians trade in their phones more often?

14 A. I don't know. It's -- again, I'm using the

15 market value of used phones and the diminution in

16 market value. I'm not looking at trade-in prices

17 for phones in my reports or trade-in -- not looking

18 at the market for trade-ins, meaning I'm not looking

19 at programs and policies specifically related to

20 trade-ins and using those for estimating diminution

21 in value to iPhone 4 and 4S's in this case.

22 Q. Right. And so the number of times, on

23 average, that Californians trade in their phones

24 versus residents of, say, New Mexico is not relevant

25 to your opinions, correct?

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1 that claims process to assess his portion of the

2 aggregate damages which I have calculated.

3 Q. Got it. So whatever money would go to

4 Mr. Potter, as far as you understand, would be based

5 on a claims process pursuant to which he would get

6 some portion of the aggregate damages that you've

7 estimated?

8 MR. TEJTEL: Object to form.

9 A. Yes, so I'm providing aggregate damage

10 estimates. There's a claims process, and that is

11 how Mr. Potter would receive his claim. Though I'm

12 not a lawyer or part of that claims process in

13 particular, that's my general understanding.

14 Q. And with respect to the regression analysis

15 that you did, you didn't restrict your analysis to

16 the resale prices of iPhone 4 and 4S devices that

17 were running only specific versions of iOS, right?

18 MR. TEJTEL: Object to form.

19 A. What do you mean by restrict my analysis?

20 Q. For example, you didn't restrict your

21 analysis to only devices that were running iOS 6 or

22 earlier?

23 A. Sorry. Do you mean by that did I only

24 estimate my model using data on devices that were

25 running iOS 6 or earlier?

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1 Q. Correct.

2 A. I did not restrict my model to be estimated

3 only on data from phones that were running iOS 6 or

4 earlier.

5 Q. And the data sets that you have don't have

6 data on what version of iOS the devices were running

7 at the time they were traded in, correct?

8 A. These three data sets here, AT&T, Best Buy

9 and ecoATM, the version of iOS is not included as a

10 field in those data sets.

11 Q. And likewise, no data on iOS at the time of

12 resale?

13 A. There's no field in these data that I am

14 aware of that records what operating system was --

15 is running on these phones that were resold.

16 Q. You're aware that the phones that were

17 resold from Best Buy, for example, were using the

18 most recent version because they were flashed,

19 correct?

20 A. I recall this from testimony in the case,

21 that Best Buy says that they upgrade -- reflash the

22 phones. I can't say I completely understand if it's

23 reflash or flash. It seems that there's a confusion

24 among those two terms in the various testimonies,

25 but they flash or reflash, whichever way you want to

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1 say it, the phone and put the newest operating

2 system on it. That's my recollection of the

3 testimony from experts, industry experts in this

4 case, at least one of them.

5 Q. And likewise, the data sets that you have

6 do not provide information on the iOS that was

7 running at the time of the certificate expiration,

8 correct?

9 MR. TEJTEL: Object to form.

10 A. So are you referring to the time of the

11 break?

12 Q. Sure. I think not surprisingly, people in

13 the case call it different things. The plaintiff

14 lawyers call it the "(Break)" in parentheses with a

15 capital B, and I call it a "certificate expiration,"

16 but we can call it whatever you want.

17 A. Okay. I just want to make sure we're

18 always talking about the same thing --

19 Q. Yeah.

20 A. -- so it's helpful to have a common name.

21 Q. Great.

22 A. So I think I refer to it in my report as

23 the "Break."

24 Q. Yeah.

25 A. And so --

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1 MR. TEJTEL: Object to form.

2 A. That is the average price, the resale

3 price, as listed in or as seen in the AT&T data

4 during the month prior to the break for iPhone 4 and

5 4S models.

6 Q. So I understand -- I don't necessarily

7 agree with it, but I understand why you use average

8 resale price before and after what you call the

9 break in order to calculate diminution in value. I

10 get it.

11 What I don't understand is then once

12 you're done and you've come up with what you are

13 saying is the diminution in value, you then multiply

14 it against, for example, AT&T's average resale price

15 as opposed to what the average trade-in value would

16 have been that would have been received by, for

17 example, somebody selling their phone to an AT&T or

18 one of those entities.

19 MR. TEJTEL: Object to form.

20 A. Okay. I'm sorry, is there a question in

21 there, or are you just stating what you don't

22 understand?

23 Q. Yeah. Can you explain to me why it is that

24 you are using, for example, AT&T's retail price to

25 multiply by the diminution in value in order to come

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1 up with your aggregate diminution-in-value estimate?

2 A. As opposed to a trade-in price?

3 Q. Yeah.

4 A. So the reason for using the resale price is

5 that we are estimating the diminution in value to

6 the market -- diminution in value to the market

7 value, the used market value of the phone.

8 The trade-in price for AT&T, as you

9 know, is -- from my rebuttal report may include

10 discounts and promotions and ties to purchases of

11 other products that I don't have data on. So, for

12 example, on page 36 of my rebuttal report, I state

13 that I considered the trade-in data carefully as

14 evidenced by detailed questions and illustrative

15 analysis of the data fields I sent to Best Buy, in

16 order to properly understand the data. I determined

17 through that process in addition to other processes

18 that the data field was not suitable for the

19 purposes for estimating diminution in value of the

20 iPhone models affected by the break because it often

21 contains discounts and tie-ins to in-store purchases

22 of new products bundled in with the trade-in price,

23 thus preventing the econometrician from being able

24 to separately determine the diminished value of the

25 phone.

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1 So I don't have an estimate of the value

2 the individual received when they traded in their

3 phone because there are many things that are tied

4 into this trade-in price that the customer is

5 receiving or not receiving that I don't have in the

6 data.

7 Q. Which would make the trade-in value to the

8 customers high, right?

9 A. I don't know. I do know that it's not the

10 value to the customer. I know that the customer --

11 the market value of the price of the phone is

12 measurable, as I've demonstrated in my reports. You

13 know, in Paragraph 37 I also say that my decision

14 follows best practices highlighted by the Federal

15 Trade Commission in a document that they wrote on

16 best practices.

17 As an example, in some industries we

18 analyze transaction level prices at the customer

19 level to understand differences in price across

20 customers as well as trends in price at the time.

21 Data maintained by companies sometimes do not

22 reflect rebates or discounts that are given in lump

23 sums rather than on an invoice. Thus the invoice

24 transaction data may not reflect the true net prices

25 the customers pay. So I state that instead of using

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1 A. What's different in the model?

2 Q. Yeah.

3 MR. TEJTEL: Object to form.

4 A. There are two different dependent variables

5 that are used, one of which is not actually picking

6 up value to the customer. It may have other factors

7 in it as I discussed. I think that this model was

8 run in comparison in the rebuttal report to address

9 concerns that Dana Trexler raised. And so -- let

10 me just actually get to 1 -- so if you notice, there

11 are also slightly fewer phones or observations in

12 Table 2 of the rebuttal report, Column 4, than there

13 are in Table 1, Column 3, of the merits report, so

14 those are two differences. And I would have to go

15 back and look at my code to understand if there are

16 any more differences.

17 Q. Okay. And isn't that because you just used

18 revised GDP data?

19 MR. TEJTEL: Object to form.

20 A. Isn't what because I used revised GDP data?

21 Q. The changes that you just described, don't

22 those reflect revisions, that GDP data?

23 A. I don't understand the question. So I

24 think I just answered your question saying that

25 there were a couple of changes, there are a couple

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1 of differences between Table 2 and Table 1, Table 2

2 in the rebuttal report, Column 4, and Table 1 in the

3 merits report, Column 3, including the dependent

4 variable. So we're using a dependent variable in

5 Table 1 which is the resale value of a phone in a

6 well-established and robust competitive market for

7 used phones. We're using the full time period.

8 And in Table 2, in the rebuttal report,

9 Column 4, we are using trade-in value that includes

10 several factors in how it is established and a time

11 period to match the Best Buy data in response to a

12 question from Dana Trexler.

13 I do also believe that when we ran the

14 models in Table 1, we did check to see if there were

15 updates to the Bureau of Economic -- U.S. Bureau of

16 Economic Analysis per capita GDP series that we

17 used -- they revise those often -- and we used the

18 most up-to-date models as we would ex -- or the most

19 up-to-date data for GDP, as one would expect to use

20 when trying to use the best data available to answer

21 the question at hand.

22 Q. And is that what accounts for the change in

23 N?

24 MR. TEJTEL: Object to form.

25 A. Is that what accounts for the change in N?

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1 CERTIFICATE OF COURT REPORTER

2 I, Joan M. Cassidy, Registered

3 Professional Reporter and Certified Realtime

4 Reporter, do certify that the deposition of Justine

5 S. Hastings, Ph.D., in the matter of C. Grace & K.

6 Potter, Individually & On Behalf of All Others

7 Similarly Situated v. Apple Inc., on September 20,

8 2018, was stenographically recorded by me; that the

9 transcript produced by me is a true and accurate

10 record of the proceedings to the best of my ability;

11 that I am neither counsel for, related to, nor

12 employed by any of the parties to the above action;

13 and further that I am not a relative or employee of

14 any attorney or counsel employed by the parties

15 thereto, nor financially or otherwise interested in

16 the outcome of the action.

17

18

 ____________________________________

19 Joan M. Cassidy, RPR, CRR

 Commissioner in the State of Rhode

20 Island and Providence Plantations

 Commission expires May 31, 2022

21

22

23

24

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