Baker v. Seaworld Entertainment, Inc.

Opinion

1 2 3 4 5 6 7 8 9 UNITED STATES DISTRICT COURT 10 SOUTHERN DISTRICT OF CALIFORNIA 11 LOU BAKER, individually and on behalf Case No.: 14cv2129-MMA (AGS) 12 of all others similarly situated, NOTICE AND ORDER PROVIDING 13 TENTATIVE RULINGS RE: Plaintiff, DAUBERT MOTIONS AND 14 v. DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT 15 SEAWORLD ENTERTAINMENT, INC., et al., [Doc. Nos. 344, 347, 351, 355, 358, 359] 16 17 Defendants. 18 19 20 On October 11, 2019, the parties in this action will appear before the Court for a 21 hearing on the parties’ Daubert motions and Defendants’ motion for summary judgment. 22 See Doc. Nos. 344, 347, 351, 355, 358, 359. In anticipation of the hearing, the Court 23 issues the following tentative rulings on the pending motions: 24 1. The Court tentatively DENIES Defendants’ motion to exclude the testimony 25 of Dr. Steven Feinstein [Doc. No. 344]. The Court tentatively finds that Dr. Feinstein’s 26 opinions are not subject to exclusion under the standards of Federal Rule of Evidence 702 27 and Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993). 28 2. The Court tentatively DENIES Defendants’ motion to exclude the testimony 1 of Chad Coffman, CFA [Doc. No. 347]. The Court tentatively finds that Mr. Coffman’s 2 opinions are not subject to exclusion under the standards of Federal Rule of Evidence 702 3 and Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993). 4 3. The Court tentatively GRANTS Defendants’ motion to exclude the 5 testimony of Dr. James Gibson [Doc. No. 351]. The Court tentatively finds that Dr. 6 Gibson’s opinions are subject to exclusion under the standards of Federal Rule of 7 Evidence 702 and Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993). 8 4. The Court tentatively GRANTS IN PART and DENIES IN PART 9 Plaintiffs’ motion to exclude the testimony of Dr. Craig Lewis [ Doc. No. 355]. The 10 Court tentatively grants Plaintiffs’ motion in part, and tentatively finds that Dr. Lewis 11 should be precluded from offering any market analysis opinion or testimony, set forth in 12 Section III of his expert report. The Court tentatively denies Plaintiffs’ motion in part, 13 and tentatively finds that any corrective disclosure opinion or testimony, as well as any 14 rebuttal opinion or testimony regarding disaggregation, the price maintenance theory of 15 inflation, and the constant dollar inflation methodology, are not subject to exclusion 16 under the standards of Federal Rule of Evidence 702 and Daubert v. Merrell Dow 17 Pharmaceuticals, Inc., 509 U.S. 579 (1993). 18 5. The Court tentatively GRANTS Plaintiffs’ motion to exclude the testimony 19 of Dr. Randolph Bucklin [Doc. No. 358]. The Court tentatively finds that Dr. Bucklin’s 20 opinions are subject to exclusion under the standards of Federal Rule of Evidence 702 21 and Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993). 22 6. The Court tentatively DENIES Defendants’ motion for summary judgment 23 [Doc. No. 359]. 24 a. The Court tentatively denies Defendants’ motion for summary 25 judgment as to Plaintiffs’ Section 10(b) claim. 26 i. The Court tentatively finds that Plaintiffs raise a genuine 27 dispute of material fact as to loss causation. The Court tentatively finds that a rational 28 jury could conclude that the August 13, 2014 disclosure constituted a corrective 1 disclosure. 2 ii. The Court tentatively finds that Plaintiffs raise a triable issue of 3 material fact on the element of damages, as the appropriateness of the constant dollar 4 inflation methodology is a question for the jury. 5 iii. The Court tentatively finds that a rational jury could conclude 6 that each of the challenged statements were false or misleading at the time they were 7 made. S.E.C. v. Todd, 642 F. 3d 1207, 1220 (9th Cir. 2011) (“Generally, whether a 8 public statement is misleading, or whether adverse facts were adequately disclosed is a 9 mixed question to be decided by the trier of fact[.]”) (internal quotation marks omitted). 10 iv. The Court tentatively finds that Plaintiffs raise a triable issue of 11 material fact on the element of materiality based in part upon Mr. Coffman’s expert 12 testimony and analyst feedback. See Retail Wholesale & Dep’t Store Union Local 338 13 Ret. Fund v. Hewlett-Packard Co., 845 F.3d 1268, 1277 (9th Cir. 2017) (“[M]ateriality is 14 generally an issue of mixed fact and law, best left to the fact-finder[.]”). 15 v. The Court tentatively finds that Plaintiffs raise a genuine 16 dispute of material fact on the element of scienter. The Court tentatively finds that a 17 rational jury could conclude that the Individual Defendants made each of the challenged 18 statements either “intentionally or with deliberate recklessness.” Zucco Partners, LLC v. 19 Digimarc Corp., 552 F.3d 981, 991 (9th Cir. 2009) (quoting In re Dauo Sys., Inc., 411 20 F.3d 1006, 1015 (9th Cir. 2005)). Additionally, the Court tentatively finds that a rational 21 jury could conclude that the Individual Defendants’ scienter confers scienter on 22 Defendant SeaWorld Entertainment, Inc. See In re Apple Computer, Inc., 127 F. App’x 23 296, 303 (9th Cir. 2005). 24 b. The Court tentatively denies Defendants’ motion for summary 25 judgment as to Plaintiffs’ Section 20(a) claims. 26 i. The Court tentatively finds that a rational jury could conclude 27 that there has been a primary violation of federal securities law. 28 ii. The Court tentatively finds that whether Blackstone and the 1 Individual Defendants are controlling persons within the meaning of Section 20(a) are 2 questions for the jury. See Todd, 642 F.3d at 1223 (“Whether [the defendant] is a 3 controlling person is an intensely factual question”) (quoting Kaplan v. Rose, 49 F.3d 4 1363, 1382 (9th Cir. 1994)). 5 As these rulings are tentative, the Court looks forward to the oral arguments of 6 counsel. 7 IT IS SO ORDERED. 8 9 Dated: October 9, 2019 _____________________________ 10 HON. MICHAEL M. ANELLO United States District Judge 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28