Opinion
CV 01-1168-BR
July 9, 2003
CRAIG A. NICHOLS, Nichols Associates, Portland, OR, for Plaintiff
DUANE A. BOSWORTH, Davis Wright Tremaine LLP, Portland, OR, for Plaintiff
RANDOLPH C. FOSTER, STEVEN T. LOVETT, DAVID L. SILVERMAN, Stoel Rives LLP, Portland, OR, for Defendant
OPINION AND ORDER (REDACTED FOR PUBLIC REVIEW)
The following is a redacted version of the Court's Opinion and Order (#121) that was issued under seal on June 18, 2003. The redacted form of the Opinion and Order omits factual material of a proprietary nature and subject to a Protective Order previously issued by this Court. The legal analysis has not been redacted.
This matter comes before the Court on Defendant Jiffy Lube International, Inc.'s Motion for Summary Judgment and Alternative Motions for Partial Summary Adjudication (#68); Jiffy Lube's Motion to Exclude Lanphere Enterprises' Expert Testimony, Reports, and Surveys (#75); Plaintiff Lanphere Enterprises, Inc.'s Motion to Strike Portions of Defendant's Concise Statement of Material Facts (#101); and Lanphere's Motion for Leave to File Amended Complaint (#82).
For the following reasons, the Court GRANTS Jiffy Lube's Motion to Exclude Lanphere's expert testimony, reports, and surveys. In addition, the Court GRANTS Jiffy Lube's Motion for Summary Judgment, DISMISSES with prejudice Lanphere's claims against Defendant, and DENIES as moot Lanphere's Motion to Strike. Finally, the Court DENIES Lanphere's Motion for Leave to File Amended Complaint.
JIFFY LUBE'S MOTION FOR SUMMARY JUDGMENT JIFFY LUBE'S MOTION TO EXCLUDE LANPHERE'S MOTION TO STRIKE Factual Background
The following facts are undisputed unless otherwise noted:
Jiffy Lube offers oil-change services in the Portland, Oregon, area through independently owned and operated franchises. Lanphere is a franchised motor-vehicle dealer in Portland, Oregon, that operates through the Beaverton Chrysler, Beaverton Infiniti, Beaverton Kia, Beaverton Honda, and Newberg Dodge dealerships. The service departments of Lanphere's dealerships offer oil-change services to consumers in the Portland area, and, Lanphere, therefore, is Jiffy Lube's competitor.
Jiffy Lube "created and/or authorized" six radio advertisements that aired in the Portland area during 2001: #1056R, #1076R, #H03R, #1203R, #1226R, and #1866R. Each of these advertisements referred in some manner to Jiffy Lube's "certified technicians" or "Jiffy Lube trained and certified technicians." Advertisements #1056R and 1076R contained the following statement:
You don't have to go back to where you bought your car for crying out loud. Jiffy Lube work meets all car warranty requirements. Their certified technicians have changed American's oil over 250 million times, and they check your fluids, vacuum, wash your windows — you're out of there in minutes.
Nichols Decl., Ex. 1-2. In addition, advertisements #H03R and 1203R contained the following exchange:
Woman: Oh yea, you need an oil change.
Man: I know, I'm going back to where I bought the car.
Woman: Well, gosh, you don't have to. Jiffy Lube has certified technicians. They meet your car's warranty requirements.
Nichols Decl., Ex. 3-4. Advertisement #1226R contained the following statement regarding "certified technicians":
You don't have to go back to where you bought your car for crying out loud. The Jiffy Lube Signature Service Oil Change meets all car warranty requirements. Their certified technicians have changed American's oil over 250 million times, and they check your fluids, vacuum, wash your windows — you're out of there in minutes.
Nichols Decl., Ex. 5. Finally, advertisement #1866R contained the following statement:
In fact, if it has an engine the Jiffy Lube trained and certified technicians know and meet the manufacturer's recommendation so you can be assured that their work will meet your car's warranty requirements.
Nichols Decl., Ex. 6. Advertisement #1866R also contained the following statements:
1. "In short, they [Jiffy Lube] help me protect my investment, and unlike your dealer they're conveniently located, open on the weekends and you don't need an appointment."
2. "And you know what, it doesn't help that the dealership is only open when I'm working."
Nichols Decl., Ex. 6.
Although the parties seem to agree Jiffy Lube is responsible for the airing of these advertisements, the import of this conduct is highly disputed.
First, Lanphere asserts the references to "certified technicians" in the advertisements were literally false because the majority of employees at the Portland-area Jiffy Lube service centers were not certified to perform oil-change services in 2001. In addition, Lanphere contends the statement that Jiffy Lube "unlike your dealer" is "open on the weekends" was literally false with respect to Lanphere's dealerships because some of those dealerships were open on weekends. Lanphere also asserts the statement regarding dealerships only being open "when I'm working" was literally false with respect to Lanphere's dealerships because some or all of those dealerships were open before and after working hours.
Lanphere further maintains "customers were diverted from dealers to Jiffy Lube" because of the statements regarding Jiffy Lube's purported certified technicians in the six identified advertisements. Lanphere also asserts "customers were diverted from Lanphere dealers to Jiffy Lube service centers" because of the statement in advertisement #1866R to the effect that Jiffy Lube "unlike your dealer" is "open on weekends." Lanphere has not asserted in its Concise Statement of Other Relevant Facts or its Statement of Additional Facts that customers were diverted from Lanphere dealers to Jiffy Lube or from car dealers in general because of the statement in advertisement #1866R that dealerships are only open "when I'm working." Lanphere, however, argues in its Opposition to Jiffy Lube's Motion for Summary Judgment that this statement, in fact, diverted Lanphere's existing or prospective customers to Jiffy Lube.
Finally, Lanphere asserts it suffered a loss of profits in the amount of $407,977 because of the allegedly false statements in Jiffy Lube's six identified advertisements.
Jiffy Lube denies any of the statements on which Lanphere bases its claims were literally false. In any event, Jiffy Lube argues Lanphere's causation and damages allegations are not supported by any admissible evidence.
Summary Judgment Sta.nda.3rd
Fed.R.Civ.P. 56(c) authorizes summary judgment if no genuine issue exists regarding any material fact and the moving party is entitled to judgment as a matter of law. The moving party must show the absence of an issue of material fact. Leisek v. Brightwood Corp., 278 F.3d 895, 898 (9th Cir. 2002). In response to a properly-supported motion for summary judgment, the nonmoving party must go beyond the pleadings and show there is a genuine issue of material fact for trial. Id.
An issue of fact is genuine "`if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.'" Villiarmo v. Aloha Island Air, Inc., 281 F.3d 1054, 1061 (9th Cir. 2002) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). The Court must draw all reasonable inferences in favor of the nonmoving party. Id. A mere disagreement about a material issue of fact, however, does not preclude summary judgment. Jackson v. Bank of Haw., 902 F.2d 1385, 1389 (9th Cir. 1990). When the nonmoving party's claims are factually implausible, that party must come forward with more persuasive evidence than otherwise would be required. Blue Ridge Ins. Co. v. Stanewich, 142 F.3d 1145, 1147 (9th Cir. 1998) (citation omitted).
The substantive law governing a claim or a defense determines whether a fact is material. Addisu v. Fred Meyer, Inc., 198 F.3d 1130, 1134 (9th Cir. 2000). If the resolution of a factual dispute would not affect the outcome of the claim, the court may grant summary judgment. Arpin v. Santa Clara Valley Transp. Agency, 261 F.3d 912, 919 (9th Cir. 2001).
Standard for Interpreting State Law
When a plaintiff asserts a claim that arises under Oregon state law, this Court must interpret and apply Oregon law as the Oregon Supreme Court would apply it. See S.D. Myers, Inc. v. City and County of San Francisco, 253 F.3d 461, 473 (9th Cir. 2001). If no decision by the Oregon Supreme Court is available to guide the Court's interpretation of state law, the Court must predict how the Oregon Supreme Court would decide the issue by using intermediate appellate court decisions, decisions from other jurisdictions, statutes, treatises, and restatements as guidance. Id.
Discussion
In its Complaint, Lanphere asserts Jiffy Lube violated various provisions of Oregon's Unlawful Trade Practices Act (UTPA), Or. Rev. Stat. § 646.605, et seq., and tortiously and intentionally interfered with Lanphere's existing or prospective business relations through improper means when it "created and/or authorized" certain radio advertisements that contained allegedly false statements of fact. Lanphere seeks damages for lost profits that it asserts it suffered as a result of Jiffy Lube's allegedly unlawful conduct. Jiffy Lube moves for summary judgment on each of Lanphere's claims.I. Elements of Lanphere's Claims
A. UTPA Claim
Or. Rev. Stat. § 646.638(1) establishes a private party's right to bring an action for damages for an UTPA violation:
[A]ny person who suffers any ascertainable loss of money or property, real or personal, as a result of willful use or employment by another person of a method, act or practice declared unlawful by ORS 646.608 or 646.648, may bring an individual action in an appropriate court to recover actual damages or $200, whichever is greater.
Thus, to prevail on an UTPA claim, a plaintiff must show: 1) a statutory unlawful trade practice, 2) causation, and 3) damage in the form of an ascertainable loss. Feitler v. Animation Celection, Inc., 170 Or. App. 702, 708, 13 P.3d 1044 (2000).
Unlawful trade practices include the following acts if done in the course of the person's business, vocation, or occupation:
1. Causing a likelihood of confusion or of misunderstanding as to the source, sponsorship, approval, or certification of real estate, goods or services. Or. Rev. Stat. § 646.608(1)(b).
2. Representing that real estate, goods or services have sponsorship, approval, characteristics, ingredients uses, benefits, quantities, or qualities that they do not have or that a person has a sponsorship, approval, status, qualification, affiliation, or connection that the person does not have. Or. Rev. Stat. § 646.608(1)(e).
3. Disparaging the real estate, goods, services, property or business of a customer or another by false or misleading representations of fact. Or. Rev. Stat. § 646.608(1)(h).
4. Advertising real estate, goods or services with intent not to provide them as advertised, or with intent not to supply reasonably expectable public demand, unless the advertisement discloses a limitation of quantity. Or. Rev. Stat. § 646.608(1) (i).
5. Engaging in any other unfair or deceptive conduct in trade or commerce. Or. Rev. Stat. § 646.608(1)(u).
An "ascertainable loss" is one that is "capable of being discovered, observed, or established." Scott v. Western Int'l Surplus Sales, Inc., 267 Or. 512, 515, 517 P.2d 661 (1973).
Because the legislature was as concerned with "devising sanctions for the prescribed standards of trade and commerce as with remedying private losses" when it enacted UTPA, the Oregon Supreme Court has viewed the term "ascertainable loss" broadly to include losses "so small that the common law likely would reject" them. Weigel v. Ron Tonkin Chevrolet Co., 298 Or. 127, 135-36, 690 P.2d 488 (1984). As a result, a plaintiff may recover the full amount of statutory damages for an ascertainable loss even if the amount of the plaintiff's actual damages is far less. See Crooks v. Payless Drug Stores Northwest, Inc., 285 Or. 481, 592 P.2d 196 (1979) (plaintiff suffered an ascertainable loss because he had been charged $2.89 for a razor that erroneously was advertised at 89 cents and, therefore, could recover the full statutory amount of $200). Some ascertainable loss or actual damage, however, must be shown before statutory damages may be awarded. Id. See also Feitler, 170 Or. App. at 708.
B. Intentional Interference with Existing or Prospective Business Relations Claim
In order to prevail on a claim for intentional interference with existing or prospective business relations under Oregon law, a plaintiff must show: 1) the existence of a professional or business relationship, which could include a contract or a prospective economic advantage; 2) intentional interference with that relationship or advantage; 3) the interference was by a third party; 4) the interference was accomplished through improper means or for an improper purpose; 5) a causal effect between the interference and the harm to the relationship or prospective advantage; and 6) damages. Allen v. Hall, 328 Or. 276, 281 (1999).
C. Lost Profits Damages
To recover damages for lost profits or sales under Oregon law, a plaintiff must prove these damages with "reasonable certainty." Willamette Quarries, Inc. v. Wodtli, 308 Or. 406, 412, 781 P.2d 1196 (1989). A plaintiff must establish, with reasonable certainty, both the existence and the amount of lost profits. Pearson v. Schmitt, 259 Or. 439, 442, 487 P.2d 84 (1976). Only net lost profits may be recovered. Jenks v. Larimer, 268 Or. 37, 41-42, 518 P.2d 1301 (1974).
"Reasonable certainty" means reasonable "probability" and generally refers to the kind of evidence required rather than the quantum of proof. Husky Lumber Co., Inc. v. D.R. Johnson Lumber Co., 282 Or. 481, 488, 579 P.2d 235 (1978). Supporting data is the "essential ingredient" of proof of lost profits or good will to a reasonable certainty. Ferret v. Leagjeld, 263 Or. 112, 115-16, 501 P.2d 780 (1972).
Oregon courts have held loss of future profits may be established by proof of past profits of an established business or by expert projections based on tests performed under substantially similar conditions. Willamette Quarries, 308 Or. at 412. Lost profits, however, cannot be proven merely by testimony of unverifiable expectations of profits. Id. Moreover, a plaintiff cannot prove lost profits by showing what the defendant may have gained from the defendant's unlawful conduct. Id. In other words, the plaintiff must show existing or prospective customers would have purchased goods or services from the plaintiff rather than from the defendant but for the defendant's alleged unlawful conduct. Id.
II. Defendant's Motion to Exclude
In support of Lanphere's assertions of causation and damages, Lanphere relies on the July 19, 2002, Expert Report of Randall J. Pozdena; the September 30, 2002, Supplemental Expert Report of Randall J. Pozdena; and the exhibits attached to these documents.
Jiffy Lube moves to exclude Dr. Pozdena's testimony, reports, and exhibits pursuant to Fed.R.Evid. 402, 403, 702, and Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579, 591 (1993). Jiffy Lube further argues it is entitled to summary judgment on both claims because Lanphere has failed to provide any admissible evidence from which a reasonable juror could conclude Jiffy Lube's allegedly unlawful or improper conduct caused Lanphere any ascertainable loss/damages.
A. Standards for Motion to Exclude Expert Reports, Testimony, and Surveys
Generally all relevant evidence is admissible unless otherwise excludable under the Federal Rules of Evidence. Fed.R.Evid. 402. "Evidence which is not relevant is not admissible." Fed.R.Evid. 402. Relevant evidence is
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.
Nonetheless, Rule 403 provides:
Although relevant, evidence may be excluded if its probative value is substantially outweighed by danger of unfair prejudice, confusion of the issues, or misleading the jury or by considerations of undue delay, waste of time, or needless presentation of cumulative evidence.
Rule 702 provides specific guidelines for the admission 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 Supreme Court has held in a trilogy of cases that Rule 702 imposes "a special obligation" on a trial court to act as a "gatekeeper" and to ensure that all expert testimony is "not only relevant, but reliable." See Kumho Tire Co., Ltd. v. Carmichael, 526 U.S. 137, 147-48 (1999); Gen. Elec. Co. v. Joiner, 522 U.S. 136, 141-42 (1997); and Daubert, 509 U.S. at 592-93. In addition, the trial court must ensure the proffered expert testimony will be helpful to the trier of fact. Daubert, 509 U.S. at 591.
The Ninth Circuit has held survey evidence in trademark cases is "sufficiently reliable" to withstand a Daubert challenge as long as the survey was conducted according to accepted principles. See Southland Sod Farms v. Stover Seed Co., 108 F.3d 1134, 1143 n. 8 (9th Cir. 1997) (citing E. J. Gallo Winery v. Gallo Cattle Co., 967 F.2d 1280, 1292 (9th Cir. 1992)). To be admissible, however, survey evidence also must meet the relevance and helpfulness tests of Rules 402 and 702. See Daubert, 509 U.S. at 591. See also Southland Sod Farms, 108 F.3d at 1142 (although the trial court could have the survey if the survey was not probative on an ultimate question of fact, the court could not have excluded the survey based on technical objections regarding the reliability of the survey).
Whether proffered expert testimony or survey evidence is helpful or "fits" in a given case is essentially a relevance inquiry. Id. Any proffered expert testimony or survey evidence must be sufficiently tied to the facts of the case so that it would aid the jury in resolving a factual dispute. Id. In addition, "Rule 702's helpfulness standard requires a valid scientific connection to the pertinent inquiry as a precondition to admissibility." Id. at 591-92.
Opinion evidence "that is connected to existing data only by the ipse dixit of the expert" is excludable under Rule 702. Gen. Elec., 522 U.S. at 146. Rule 702 enables a court to exclude proffered expert evidence if "there is simply too great an analytical gap between the data and the opinion proffered." Id.
B. Summary of Dr. Pozdena's Testimony, Reports, and Surveys
Dr. Pozdena is the managing director of the Portland, Oregon, office of ECONorthwest, an economics and financial consulting firm. Lanphere hired Dr. Pozdena
to determine whether and to what extent Lanphere has suffered a loss of revenue and profits for services that Plaintiff would have performed for customers and potential customers but for certain actions of Defendant. Specifically, Plaintiff asserts that there are certain products and services that customers and potential customers would have purchased from Plaintiff but for Defendant's radio advertisements that purportedly contain language that is false and disparaging to the Plaintiff.
Lovett Decl., Ex. A at 53.
Dr. Pozdena developed a survey instrument that allegedly was "designed to determine whether certain, former customers of Lanphere were aware of the specific, allegedly offending representations made by the Jiffy Lube's advertisements, and that they acted on those representations." Dr. Pozdena provided the Oregon Survey Research Laboratory (OSRL) with a copy of his survey questions and a list of 153 names and corresponding telephone numbers of "customers who had been to Lanphere for service in the past and had a Jiffy Lube sticker on their vehicle." During June 2002, OSRL interviewers were able to complete 37 surveys.
The survey included the following question:
When [the vehicle you use most] needs routine servicing, to what type of place do you usually take it?
The interviewer had the discretion to read the words or phrases contained in brackets or parentheses as theinterviewer saw fit in the context of a given interview.
Twenty-five respondents indicated they usually took their cars to a car dealership for routine service. The survey instrument did not instruct the interviewer to ask whether the respondent's dealership of choice for routine service was, in fact, one of Lanphere's dealerships rather than another car dealership. Eight respondents indicated they usually took their car to Jiffy Lube for routine service.
The interviewers later asked the respondents the following question designated as JLAD1:
In the past two or three years, do you recall hearing any advertisements on the radio for Jiffy Lube?
If a respondent answered "Yes" to JLAD1, the interviewer further explained:
I need to ask you about statements you may have heard in Jiffy Lube ads. For each one, please tell me if you recall hearing the statement, and if so, whether you believe it is true or false.
The interviewers then asked the respondents whether they recalled hearing each of six "statements" ostensibly found in Jiffy Lube's advertisements. The "statements" were loose paraphrases of the advertisements and were created by Dr. Pozdena and/or Lanphere's counsel. The interviewers specifically asked the respondents whether they recalled hearing the following three statements:
In its Opposition to Jiffy Lube's Motion for Summary Judgment, Lanphere asserts only three of the statements were literally false and, thus, concedes the remaining three statements are no longer at issue.Those statements are: 1) car dealerships require you to make an appointment to get an oil change; 2) you have to leave your car with the dealer overnight or longer when you get an oil change at the dealer;and 3) Jiffy Lube service meets all of your vehicle's warranty requirements.
JLAD2: " [T]he service departments in car dealerships are not open in the evening to do oil changes."
JLAD3: "[S]ervice departments in car dealerships are not open weekends."
JLAD6: "Jiffy Lube has certified technicians."
Five respondents answered they had heard an advertisement regarding evening service. Four of those respondents stated they believed the statement.
Four respondents answered they had heard an advertisement regarding weekend service. All four believed the statement.
Nineteen respondents answered they had heard an advertisement regarding Jiffy Lube's certified technicians.
Sixteen respondents believed the statement.
The interviewers then posed the following question only to those respondents who had recalled hearing any of the statements:
Did any of the things I just asked you about lead you to go to Jiffy Lube instead of the dealer?
The interviewers asked the people who responded affirmatively to identify the statements that led them to go to Jiffy Lube instead of the dealer. The interviewers recorded the following results:
1. 1 person, Respondent #31, answered the statement regarding dealers not being open evenings led him to go to Jiffy Lube instead of the dealer.
2. 2 people, Respondents #24 and 31, answered the statement regarding dealers not being open on weekends led them to go to Jiffy Lube instead of the dealer.
3. 1 person, Respondent #31, answered the statement regarding Jiffy Lube's certified technicians led him to go to Jiffy Lube instead of the dealer.
Thus, only two of the 37 respondents indicated one of the allegedly offending statements led them to go to Jiffy Lube instead of the dealer. Respondent #31, however, told the interviewer that he did not recall hearing either of the statements regarding dealers' hours of operation in Jiffy Lube ads. In addition, Respondent #24 told the interviewer that she did not believe the statement in the Jiffy Lube advertisements that dealers were not open on weekends.
Three additional respondents indicated one or more of the statements that are not at issue led them to go to Jiffy Lube instead of the dealer.
Based on these survey results, Dr. Pozdena concluded the following:
I conclude that some customers selected Jiffy Lube over Plaintiff on the basis of the allegedly-offending statements in Jiffy Lube's advertisements. Consequently, in my opinion, Lanphere suffered a loss of revenue and associated profits for products and services that would have been sold but for Jiffy Lube's advertisements.
Lovett Decl., Ex. A at 54. Dr. Pozdena, however, declined to provide an opinion regarding the amount of Lanphere's damages because Lanphere had not provided him with any information regarding Jiffy Lube's sales activities.
On September 30, 2002, Dr. Pozdena submitted a Supplemental Expert Report, in which he indicated the June Survey was conducted only to determine "the potential of `ascertainable loss' as defined in Oregon law Or. Rev. Stat. § 646.638(1)." On the other hand, the follow-up survey and Dr. Pozdena's Supplemental Expert Report were designed to "measure damages over the period December 1, 2000 to September 30, 2002, using a similar survey of Jiffy Lube customers."
Jiffy Lube's customer information is contained in a database that is organized by transaction. Jiffy Lube has records of 1.9 million sales by the Portland-area Jiffy Lube service centers between November 1, 2000, and December 31, 2002. To limit the survey population to Jiffy Lube customers, Dr. Pozdena reviewed this transactional information.
Dr. Pozdena further limited the population to those customers whose records indicated they had vehicles of a make and a model that Lanphere's dealerships sell as new. In addition, Dr. Pozdena limited the population to those customers with telephone numbers having an area code of 503, 541, 971, or 360 (limited to Vancouver, Washington, only).
Dr. Pozdena then collapsed the records by telephone number so only one customer record remained for each relevant telephone number. Dr. Pozdena referred to this collapsed customer record as a "Household." Ultimately, the relevant population consisted of 66,279 Households. Many of these records contained incomplete or "obviously incorrect" information and, thus, were eliminated from the sample. Dr. Pozdena provided a total of 28,293 Household records to OSRL for the September Survey.
Dr. Pozdena developed the survey instrument for the September Survey with the "technical assistance" of his staff and the staff of OSRL. According to Dr. Pozdena, the "logic" of the survey instrument was as follows:
1. The interviewer asked "the survey respondents if they consider [ed] one of the Plaintiff's dealerships to be their dealership alternative to Jiffy Lube services."
2. If a respondent considered a Lanphere dealership as her "dealer alternative", the interviewers asked the respondent whether she heard the allegedly offending statements in the advertisements.
3. If a respondent recalled hearing the statements, the interviewer asked the respondent if she "chose to obtain service at Jiffy Lube instead of their dealer alternative because of one or more" of the allegedly offending statements.See Lovett Decl., Ex. A at 79.
The survey questions posed to Jiffy Lube's customers, however, did not track this language or this logic. The interviewers began each of the interviews by introducing the survey topic as "where people get their [cars/vehicles] serviced and how radio advertising affects those decisions." The interviewers then told the respondents, "To begin, I need to ask a few questions about dealerships that you would consider taking your (car/vehicle) to for servicing." The interviewers then ran through a list of Lanphere's five dealerships. Specifically, the interviewers first asked, "Would you take your (car/vehicle) to Beaverton Chrysler?" If the respondent answered "Yes" or "It depends," the interviewer skipped the remaining questions regarding Lanphere's other dealerships and moved to the questions pertaining to Jiffy Lube's advertisements. If the respondent answered "No," the interviewer asked the respondent "What about Newberg Dodge?" or "Would you take your (car/vehicle) to Newberg Dodge?" Again, if the respondent answered "Yes," the interviewer skipped the remaining questions regarding Lanperhe's dealers. If the respondent answered "No," the interviewer asked the respondent about Lanphere's remaining dealerships. If the respondent answered "No" to all five questions and, thus, indicated she would not take her car to any of Lanphere's five dealerships, the interviewer asked generally if the respondent would take her car to a Bob Lanphere dealership.
Of the 690 people surveyed by OSRL, 237 respondents stated they would take their vehicle to one of Lanphere's dealerships or "a Bob Lanphere dealership" for servicing. The interviewers then asked only those respondents if they had taken their car to Jiffy Lube for an oil change in the past two years. Of those respondents, 223 respondents indicated they had taken their car to Jiffy Lube in the past two years. The interviewers then asked only those 223 respondents whether they recalled hearing any radio advertisements for Jiffy Lube in the past two years. One hundred thirty respondents answered "Yes," and six respondents indicated they did not know. Although the survey instrument seems to require the elimination of respondents who did not know whether they had heard the advertisements, a review of the survey responses reveals these six respondents were not eliminated.
The interviewers then asked the 136 respondents about statements in the advertisements. Again, the interviewers asked about certain statements that are no longer at issue. In addition, the interviewers referred to paraphrases rather than direct quotations of the statements in Jiffy Lube's advertisements.
Thirteen respondents recalled hearing a Jiffy Lube radio advertisement that included a statement to the effect that service departments in car dealerships are not open in the evening to do oil changes. Twenty-three respondents recalled hearing a Jiffy Lube radio advertisement that included a statement to the effect that service departments in car dealerships are not open on weekends. One hundred seven of the respondents recalled hearing a Jiffy Lube radio advertisement that included the statement that Jiffy Lube has certified technicians. The interviewers then asked all of the 136 respondents the following question:
JLAD8: "Did any of the things I just asked you about cause you to go to Jiffy Lube instead of a car dealership [for an oil change]?"
Thirty-five of the respondents indicated one or more of the statements caused them to go to Jiffy Lube instead of "a car dealership." Only 18 car dealership." Only 18 respondents, however, indicated at least one of the three statements at issue caused them to go to Jiffy Lube instead of "a car dealership." Specifically, five respondents indicated the statement to the effect that service departments in car dealerships are not open in the evening to do oil changes caused them to choose Jiffy Lube instead of a car dealership, nine respondents indicated the statement to the effect that service departments in car dealerships are not open on weekends caused them to choose Jiffy Lube instead of a car dealership, and twelve respondents indicated the statement that Jiffy Lube has certified technicians caused them to choose Jiffy Lube instead of a car dealership.
In his Supplemental Expert Report, Dr. Pozdena states 38 respondents indicated they chose to go to Jiffy Lube rather than to a car dealership. In his Declaration submitted in conjunction with Lanphere's Opposition to the Motion to Exclude, Dr. Pozdena acknowledges the actual number of respondents was 35.
Eight respondents indicated more than one of the relevant statements caused them to choose Jiffy Lube instead of a car dealership.
Dr. Pozdena calculated the percentage of survey respondents who indicated the statements caused them to choose Jiffy Lube instead of a car dealership based on a total of 38 respondents out of 690 surveyed. Thus, Dr. Pozdena calculated the percentage as 5.5%.
As noted, the correct number of respondents is 18, and, therefore, the correct percentage is 2.6%.
Dr. Pozdena then extrapolated this percentage to the Relevant Population of 66,279 Households by multiplying the total number of Households by 5.5%. Dr. Pozdena concluded the sample expansion indicated "the Statements in the Advertisements caused
3,645 Households to get their vehicles serviced at Jiffy Lube rather than Lanphere."
If the proper percentage is applied, the number of Households actually would be 1,723.
Dr. Pozdena then calculated Lanphere's lost revenues based on the number of "lost customers." First, Dr. Pozdena examined the Jiffy Lube customer database and calculated the average amount spent per Household in the Relevant Population during the 13-month period from December 1, 2000, to December 31, 2001. Dr. Pozdena then determined the average amount spent per Household during the additional months of January 2002 through September 2002. Finally, Dr. Pozdena multiplied the amount of money spent by the average Household over the relevant period [REDACTED] by the total number of Households that he considered Lanphere "lost" to Jiffy Lube (3,645).
Accordingly, Dr. Pozdena concluded Lanphere lost [REDACTED] in service revenues as a result of the Jiffy Lube advertisements.
Dr. Pozdena then converted those lost sales into lost profits by examining the monthly financial statements of Lanphere's dealerships. Applying "ordinary least squares regression techniques" and combining the results of each of Lanphere's individual dealerships, Dr. Pozdena determined the appropriate net profit margin for Lanphere's oil-change services is [REDACTED] of service department revenues. Multiplying this percentage by the total lost revenues, Dr. Pozdena concluded Lanphere suffered $408,977 in lost profits as a result of the allegedly false statements in Jiffy Lube's advertisements.
C. Analysis
Each of Dr. Pozdena's reports is based on different underlying data. The Court, therefore, will address each report and its factual bases separately.
1. Expert Report Dated July 19, 2002
In his Expert Report, Dr. Pozdena concluded:
Based on the information reviewed to date and my analysis of survey results, I conclude that some customers selected Jiffy Lube over Plaintiff on the basis of the allegedly-offending statements in Jiffy Lube's advertisements. Consequently, in my opinion, Lanphere suffered a loss of revenue and associated profits for products and services that would have been sold but for Jiffy Lube's advertisements.
Lovett Decl., Ex. A at 54.
The Court finds Dr. Pozdena's ultimate opinions, on their face, tend to show Lanphere suffered damages and/or an ascertainable loss of profits as a result of Jiffy Lube's allegedly false statements in its advertisements and, therefore, are relevant to Plaintiff's claims. The Court's analysis, however, does not end with the relevance inquiry. Pursuant to General Electric, the Court need not admit as evidence Dr. Pozdena's opinions if there is "too great an analytical gap" between his conclusions and the underlying data on which he relies.
Dr. Pozdena ultimately concluded some customers selected Jiffy Lube over Lanphere and Lanphere suffered a loss of some amount of profits as a result of Jiffy Lube's advertisements. Dr. Pozdena based his conclusions on the fact that several respondents to the June Survey answered the following question designated JLAD8 in the affirmative:
Did any of the things I just asked you about lead you to go to Jiffy Lube instead of the dealer?
Notably, this question does not refer explicitly to Lanphere's dealerships. Nonetheless, in an attempt to support Dr. Podzena's "but for" conclusion, Lanphere filed the Declaration of Dr. Pozdena and the Declaration of the Founding Director of OSRL, Dr. Patricia A. Gwartney, in support of its Opposition to Jiffy Lube's Motion to Exclude.
Lanphere also submitted the Declaration of Dr. John Tarnai. Although Dr. Tarnai addresses the reliability of the methodology underlying the June and September surveys in his Declaration, he does not offer an opinion regarding whether the surveys are relevant to the issues of causation and damages. The Court, therefore, need not address Dr. Tarnai's testimony at this time.
Dr. Pozdena asserts in his Declaration that "the dealer" in this question is "obviously" one of Lanphere's dealerships. Apparently Dr. Pozdena's assumption is based on the fact that the sample in the June Survey included only people who had taken their car to one of Lanphere's dealerships for servicing in the past. In other words, Dr. Pozdena seems to have assumed a person who previously took his car to one of Lanphere's dealerships for some type of servicing would consider that dealership to be his "dealer alternative" or "dealer of choice." Thus, Dr. Pozdena also assumed any respondent who answered JLAD8 in the affirmative would have taken his car to that "dealer alternative" rather than to any other service center but for the false statements in Jiffy Lube's advertisements.
The Court finds these assumptions involve leaps of logic that are not supported by any facts beyond Dr. Pozdena's testimony itself. None of the survey questions that precede JLAD8 establish whether the June Survey respondents took their cars to one of Lanphere's dealerships on a routine basis or for oil changes. Moreover, none of those preceding questions otherwise would lead the respondents to equate "the dealer" in question JLAD8 with Lanphere's dealerships. The interviewers never mentioned Lanphere's dealerships or tested Dr. Pozdena's assumptions.
Dr. Gwartney, on the other hand, testified the June Survey "clearly and effectively" established the allegedly false statements in Jiffy Lube's advertisements caused "existing Lanphere customers to go to Jiffy Lube for oil change services." Dr. Gwartney, however, does not testify the survey was designed to test or, in fact, determined whether the existing Lanphere customers would have had their oil changed by one of Lanphere's dealerships but for the allegedly false statements in Jiffy Lube's advertisements. Thus, Dr. Gwartney seems to acknowledge the limitations of the survey and does not join in Dr. Pozdena's unwarranted assumptions.
In any event, even if the Court were to accept Dr. Pozdena's assumptions as reasonable without any factual support, the Court notes only two respondents indicated one of the allegedly offending statements led them to go to Jiffy Lube instead of "the dealer." One of those respondents (#31), however, did not recall hearing and, therefore, could not have relied on any of the allegedly false statements. In addition, the remaining Respondent (#24) did not believe the allegedly false statement that "led" her to choose Jiffy Lube rather than "the dealer." These inconsistent statements cannot be reconciled unless Respondent #24 misunderstood one or both of the questions asked.
For these reasons, the Court finds the June Survey results do not tend to prove Lanphere suffered a loss of profits because of Jiffy Lube's allegedly unlawful conduct. Accordingly, the Court concludes the June Survey results are inadmissible because they are irrelevant and would not assist the trier of fact in deciding or understanding any question of fact at issue.
The Court also finds the June Survey results are based on imprecise, confusing, and vague questions, and the only responses that arguably support Lanphere's claim are internally inconsistent and legally unsupportable. Applying the balancing test of Rule 403, the Court concludes the probative value of the June Survey, to the extent it could be deemed to have any minimal probative value on the issues of causation and damages and/or ascertainable loss, is substantially outweighed by the danger that the June Survey results would confuse the issues and mislead the jury because the survey fails to address explicitly the specific matters at issue. The Court, therefore, also excludes the June Survey on that basis.
As noted, Dr. Pozdena's conclusions in his July 19, 2002, Expert Report are based solely on the June Survey results. Because the Court finds the underlying data is irrelevant and misleading and does not support Dr. Pozdena's opinions, the Court concludes the "analytical gap" between Dr. Pozdena's conclusions and the underlying data on which he relies is too great. See Gen. Elec., 522 U.S. at 146. The Court, therefore, grants Jiffy Lube's Motion to Exclude Dr. Pozdena's July 19, 2002, Expert Report, the exhibits thereto, and any testimony based on those documents. Accordingly, the Court strikes those documents from the summary judgment record.
2. Supplemental Expert Report Dated September 30, 2002
In his Supplemental Expert Report, Dr. Pozdena concluded:
[M]y analysis indicates that Plaintiff suffered a loss of [REDACTED] in revenues and a loss of $408,977 in service department net income for products and services that would have been sold by Plaintiff's dealers but were not because of Jiffy Lube's Statements in the Advertisements.
Lovett Decl., Ex. A at 76.
The Court finds Dr. Pozdena's ultimate opinions, on their face, tend to show Lanphere suffered damages and/or an ascertainable loss as a result of Jiffy Lube's false statements in its advertisements and his opinions, and, therefore, are relevant to Lanphere's claims. As noted, the Court's inquiry does not end there, and the Court may exclude an expert's opinion if there is "too great an analytical gap" between the expert's conclusions and the underlying data on which he relies. See Gen. Elec., 522 U.S. at 146.
Dr. Pozdena's opinions regarding causation and damages in his Supplemental Expert Report are based on the surveys completed by OSRL in September, 2002. In particular, Dr. Pozdena based his conclusions on the fact that several respondents answered the following question [designated JLAD8] in the affirmative:
Did any of the things I just asked you about cause you to go to Jiffy Lube instead of a car dealership [for an oil change]?
On its face, JLAD8 does not identify Lanphere's car dealerships and, therefore, does not support Dr. Pozdena's conclusion that Lanphere's dealerships would have sold certain goods and services to the respondents if Jiffy Lube had not aired the allegedly false advertisements. Nonetheless, in an attempt to support Dr. Pozdena's expert opinions, Lanphere again relies on the Declarations of Dr. Pozdena and Dr. Gwartney filed in conjunction with Lanphere's Opposition to Jiffy Lube's Motion to Exclude.
The Court does not consider Dr. Tarnai's Declaration because he did not address the relevance issue.
Dr. Pozdena states in his Declaration that it is "his firmly held professional opinion that the structure of the survey" as a whole shows the persons who responded affirmatively to JLAD8 would have taken their cars to Lanphere's dealerships for oil changes but for the false statements in Jiffy Lube's advertisements. Dr. Gwartney also states, in her "professional experience," the survey accurately determined whether particular statements in radio advertisements caused the respondents to go to Jiffy Lube instead of a Lanphere dealership to obtain oil-change services. Drs. Pozdena and Gwartney offer three reasons for their "professional opinions."
First, Drs. Pozdena and Gwartney note Dr. Pozdena designed the survey to be limited to respondents who had vehicles of the type sold new by Lanphere's dealerships and who were "relatively near" Lanphere's dealerships as indicated by their area codes. Drs. Pozdena and Gwartney apparently contend these restrictions effectively limited the survey respondents to those persons likely to consider one of Lanphere's dealerships as their one and only service alternative. The geographical limitations imposed by Dr. Pozdena, however, encompassed nearly the entire state of Oregon and part of southwest Washington even though Lanphere's dealerships are located in a small area of northwest Oregon. Moreover, the record does not indicate the number of other dealerships within the geographical limitations or in the pertinent area of northwest Oregon that also sold new cars of the makes and models owned by the respondents. In other words, Dr. Pozdena did not test whether his limitations were effective in focusing the survey sample. The Court, in fact, finds the effectiveness of the limitations imposed by Dr. Pozdena is doubtful.
Second, Drs. Pozdena and Gwartney testified the "nature" of the survey questions "emphasized" Lanphere's dealerships because the interviewers posed JLAD8 only to those persons who previously indicated they "would take" their car his car to Lanphere's dealership rather than to any to one of Lanphere's dealerships for servicing. Drs. Pozdena and Gwartney further testified it was her "considered judgment" that an affirmative response to JLAD8 actually meant the respondent would take his car to Lanphere's dealership rather than to any other dealership if he or she were to take his car to a dealer for servicing. In other words, an affirmative response to JLAD8
meant one of Lanphere's dealerships was the respondent's "dealer alternative" or "dealer of choice."
The Court, however, finds this conclusion glosses over the introductory statement to the September Survey, in which the interviewer advised the respondents that he was going to "ask a few questions about dealerships that you would consider taking your (car/vehicle) to for servicing." After making this general statement, the interviewer then launched into a series of questions regarding whether the respondent "would take" his car to one of Lanphere's dealerships. Although the language in the specific questions is stronger than the language in the introductory statement, the combined meaning of these statements is ambiguous because a person who merely responds that he "would consider taking" his car to one of Lanphere's dealerships does not necessarily view that "dealer of choice."
In addition, Dr. Pozdena testified in his deposition that the six questions regarding whether the respondent "would take" his car to one of Lanphere's dealerships were designed to determine the following:
They're designed to isolate out of the larger population of potential respondents people who did not consider plaintiff's dealerships as reasonable alternatives to other sources of maintenance.
They are eliminated — These questions, if you get to the bottom of these questions and Lanphere is not even — didn't have a prayer of being your customer, of being your vendor, then you're out of the questionnaire, skip logic takes you out of the question.
Lovett Decl., Ex. A at 19. Dr. Pozdena further testified in his deposition that he did not conclude the people who answered these questions in the affirmative considered one of Lanphere's dealerships to be their only service alternative. Dr. Pozdena indicated he expected the persons who answered "Yes" to one of the questions in this series to "have other alternatives as well" as Lanphere's dealerships.
Dr. Pozdena's testimony in his Declaration to the effect that the six questions were designed to isolate those persons who considered one of Lanphere's dealerships to be their "dealer alternative" or "dealer of choice" is in direct conflict with Dr. Pozdena's prior deposition test.
Generally a party cannot create an issue of fact by submitting a subsequent declaration that contradicts prior deposition testimony. Orr v. Bank of America, NT SA, 285 F.3d 764, 780 (9th Cir. 2002). Dr. Pozdena does not offer an explanation for this particular contradiction.
In his subsequent Declaration, Dr. Pozdena explains he misunderstood some of defense counsel's questions because the questions incorrectly applied statistical analysis to individuals. The colloquy described above, however, did not involve a discussion of statistics. Defense counsel merely asked Dr. Pozdena what the questions in his survey were designed to do and what they, in fact, determined. Dr. Pozdena does not assert in his Declaration that he was confused by the specific questions nor does he offer an alternative explanation for his answers.
Dr. Gwartney does not offer any opinion regarding Dr. Pozdena's prior testimony and merely defers to Dr. Pozdena's ability to respond on his own.
Finally, Drs. Pozdena and Gwartney assert the respondents' collective responses to the questions regarding whether the respondents "would take" their cars to one of Lanphere's dealerships support Dr. Pozdena's conclusion that the respondents understood those questions as referring to whether the respondents would take their car to one of Lanphere's dealerships rather than any other dealer if the respondent were to go to a dealer for servicing. Drs. Pozdena and Gwartney note the majority of respondents answered all of the questions in the negative and, therefore, indicated they would not take their car to one of Lanphere's dealerships.
Thus, the experts argue, the respondents understood the question referred to the respondents' "dealer of choice" rather than to one of several possible dealer alternatives. In addition, Drs. Pozdena and Gwartney point out the respondents who answered in the affirmative carefully chose the dealership to which they would take their cars. The respondents' answers varied widely: 98 persons indicated they would take their cars to Beaverton Chrysler, eight to Newberg Dodge, 102 to Beaverton Honda, two to Beaverton Infiniti, three to Beaverton Kia, and 24 to "a Bob Lanphere dealership." Drs. Pozdena and Gwartney assert this pattern is "exactly what one would expect" if the respondents answered the question by choosing their "dealer of choice" because the ratios roughly correspond to the size of the dealerships involved.
Drs. Pozdena and Gwartney, however, fail to account for the fact that each dealership specializes in a certain make of car, and that persons who own Hondas are more likely to answer they "would take" their car to Beaverton Honda for servicing than to Beaverton Kia. If more people own Hondas than Kias, it is reasonable to assume more persons would be willing to take their car to a dealership named Beaverton Honda than to a dealership named Beaverton Kia. This fact, however, does not necessarily indicate the Honda owner considered Beaverton Honda its dealer of choice.
Moreover, the assumption that respondents who answered JLAD8 in the affirmative considered one of Lanphere's dealerships to be their dealer of choice is contradicted by the narrative responses to question VEHIC7 in the September Survey: "Where do you take your (car/vehicle) to be serviced?" A review of the responses to that question reveals few if any respondents indicated they took their cars to one of Lanphere's dealerships for servicing. In fact, the respondents indicated they have their cars serviced by various other dealerships, independent mechanics, Jiffy Lube, and Jiffy Lube's competitors in the quick oil-change business.
The interviewers recorded the narrative answers verbatim. The Court was unable to find a single response in which a respondent specifically named one of Lanphere's dealerships. Several respondents indicated they took their cars to a dealer in the Portland area, but they did not name the dealership. The Court cannot determine whether any of the dealers listed by location correspond to one of Lanphere's dealerships. In any event, the Court notes many of the respondents identified dealers by names or locations that clearly are not associated with one of Lanphere's dealerships.
In the exercise of its gate-keeping functions, the Court finds insufficient the explanations of Drs. Pozdena and Gwartney regarding their conclusions that persons who answered JLAD8 in the affirmative were indicating one of Lanphere's dealerships was their dealer of choice.
The Court, therefore, concludes JLAD8, on its face and in the context of the survey instrument as a whole, does not address the question whether the respondents would have taken their cars to one of Lanphere's dealerships for an oil change but for the false statements in Jiffy Lube's advertisements. Consequently, the Court concludes the September Survey does not tend to show Lanphere suffered a loss of profits as a result of Jiffy Lube's allegedly unlawful conduct. Accordingly, the Court finds the September Survey results are inadmissible because they are irrelevant and would not assist the trier of fact in deciding or understanding any question of fact at issue in this matter.
In addition, applying the balancing test of Rule 403, the Court concludes the probative value of the September Survey, to the extent it could be deemed to have any minimal probative value on the issues of causation and damages, is substantially outweighed by the danger that the September Survey would confuse the issues and mislead the jury because the questions fail to address explicitly the specific matters at issue. The Court, therefore, also excludes the September Survey on that basis.
Dr. Pozdena's ultimate conclusions in his September 30, 2002, Supplemental Expert Report flow directly from his assumptions regarding the scope of the September Survey and JLAD8 in particular. Because the Court finds the underlying data is irrelevant and misleading and does not support Dr. Pozdena's opinions, the Court concludes there is simply "too great an analytical gap" between the conclusions in Dr. Pozdena's Supplemental Expert Report and the underlying data on which he relies. See Gen. Elec., 522 U.S. at 146. The Court, therefore, grants Jiffy Lube's Motion to Exclude Dr. Pozdena's September 30, 2002, Supplemental Expert Report, the exhibits thereto, and any testimony based on those documents. Accordingly, the Court strikes those documents from the summary judgment record.
The Court does not reach Jiffy Lube's alternative grounds for the exclusion of Dr. Pozdena's reports and underlying data.
III. Defendant's Motion for Summary Judgment
A. Intentional Interference with Existing or Prospective Business Relations Claim
As noted, in order to prevail at trial on its intentional interference claim, Lanphere must show existing or prospective customers would have purchased goods or services from Lanphere rather than from Jiffy Lube but for Jiffy Lube's alleged unlawful conduct. See Willamette Quarries, 308 Or. at 412. Although Lanphere need not show such damages to an absolute certainty, Lanphere must provide data to support its claims. See Ferret, 263 Or. at 115-16.
Lanphere's proof in support of the elements of causation and damages consists of Dr. Pozdena's July 19, 2002, Expert Report; his September 30, 2002, Supplemental Expert Report; and the surveys attached thereto. For the reasons previously stated, the Court has granted Jiffy Lube's Motion to Exclude those reports and surveys. As a result, Lanphere has not presented any admissible evidence to support this claim. In any event, for the same reasons the Court set out regarding Jiffy Lube's Motion to Exclude, the Court concludes such evidence, even if admissible, does not raise a genuine issue of fact regarding causation and damages. The Court, therefore, concludes Lanphere has failed to provide sufficient evidence from which a reasonable juror could conclude Lanphere suffered a loss of profits as a result of the allegedly false statements in Jiffy Lube's advertisements. Accordingly, the Court grants Jiffy Lube's Motion for Summary Judgment as to Lanphere's intentional interference claim and dismisses that claim with prejudice.
B. UTPA Claim
1. Ascertainable Loss
As noted, to prevail on Lanphere's UTPA claim, Lanphere must show it suffered an ascertainable loss (damages) as a result of Jiffy Lube's unlawful conduct (causation). See Or. Rev. Stat. § 646.638(1). See also Feitler, 170 Or. App. at 708.
The only evidence that Lanphere offers to show it suffered any ascertainable loss as a result of Jiffy Lube's allegedly unlawful conduct are Dr. Pozdena's reports and the surveys underlying them. For the reasons previously stated, the Court has granted Jiffy Lube's Motion to Exclude those reports and surveys. As a result, Lanphere has not presented any admissible evidence to support this claim. In any event, for the same reasons the Court set out regarding Jiffy Lube's Motion to Exclude, the Court concludes such evidence, even if admissible, does not raise a genuine issue of fact regarding causation and damages. The Court, therefore, concludes Lanphere has failed to provide sufficient evidence from which a reasonable juror could conclude Lanphere suffered an ascertainable loss as a result of the allegedly false statements in Jiffy Lube's advertisements. Accordingly, the Court grants Jiffy Lube's Motion for Summary Judgment as to Lanphere's UTPA claim and dismisses that claim with prejudice.
2. Standing
Jiffy Lube also argues it is entitled to summary judgment on Lanphere's UTPA claim on the ground that Lanphere does not have standing because Lanphere is Jiffy Lube's competitor in the sale of certain goods and services rather than a consumer of those goods and services. Lanphere, however, contends UTPA does not limit recovery to consumers or otherwise prevent recovery by a competitor. In addition, Lanphere argues Jiffy Lube's Motion is untimely, and the Court should deny it for that reason.
First, the Court finds Jiffy Lube's Motion for Summary Judgment based on Lanphere's lack of standing under the UTPA is not untimely. The defense of failure to state a claim on which relief can be granted can be made in a responsive pleading, by a motion on the pleadings, or even at trial on the merits. See Fed.R.Civ.P. 12(h)(2). The Court, therefore, concludes Jiffy Lube did not waive its legal defense to Lanphere's UTPA claim by failing to raise the standing issue before the Court-imposed deadline for dispositive motions.
As noted, this Court must interpret and apply Oregon law regarding the UTPA as the Oregon Supreme Court would apply it. See S.D. Myers, Inc., 253 F.3d at 473. The Oregon Supreme Court has not stated definitively whether a business may bring an UTPA claim against a competing business. The Court, therefore, must predict how the Oregon Supreme Court would decide this issue.
Lanphere argues, under the plain meaning of the statute, Or. Rev. Stat. § 646.638(1) provides a civil right of action to a competitor who suffers an ascertainable loss as a result of a competing business's unlawful trade practices. In CollegeNet, Inc. v. Embark.Com, Inc., the court held otherwise. 230 F. Supp.2d 1167, 1175 (D. Or. 2001). After conducting a thorough analysis of Oregon law, the court concluded UTPA provides a cause of action only for consumers. Id. This Court finds the reasoning in CollegeNet to be persuasive and predicts the Oregon Supreme Court would interpret UTPA in a similar fashion. The Court, therefore, concludes Lanphere's claim against Jiffy Lube for UTPA violations fails in any event because Lanphere is a competitor rather than a consumer of Jiffy Lube's goods and services. Accordingly, the Court also grants Jiffy Lube's Motion for Summary Judgment as to Lanphere's UTPA claim on this alternative ground and, therefore, dismisses Lanphere's UTPA claim with prejudice.
The Court does not reach Jiffy Lube's remaining arguments in support of its Motion for Summary Judgment
IV. Lanphere's Motion to Strike
Lanphere moves the Court for an order striking certain statements from Jiffy Lube's Concise Statement of Facts in support of Jiffy Lube's Motion for Summary Judgment. In particular, Lanphere asks the Court to strike paragraph 9 in its entirety, the second sentence of paragraph 10, and a portion of paragraph 11.
The contested statements are not relevant to the summary judgment issues decided by the Court. The Court, therefore, did not rely on or otherwise consider any of the contested statements. The Court concluded Jiffy Lube is entitled to summary judgment as to Lanphere's claims even absent such "fact" statements. The Court, therefore, denies Lanphere's Motion to Strike as moot. IV. Defendant's Request for Attorneys' Fees
The Court notes Lanphere failed to comply with Local Rule (LR) 7.1(a)(1), which requires a moving party to certify in the first paragraph of every motion except a motion for a temporary restraining order that the parties made a good faith effort to resolve the dispute but were unable to do so. LR 7.1(b) provides the court may deny any motion that fails to comply with LR 7.1(a). Because the Court denies Lanphere's Motion to Strike as moot, the Court does not address this issue.
UTPA provides the court "may award reasonable attorneys fees to the prevailing party" in an UTPA civil action unless the prevailing party is the defendant in a class action. Or. Rev. Stat. § 646.638 (3) — (4).
In a two-paragraph section at the end of Jiffy Lube's Motion for Summary Judgment, Jiffy Lube asserts UTPA entitles Jiffy Lube to an award of "all of its" attorneys' fees incurred in its defense of both of Lanphere's claims. Jiffy Lube seems to assert in its short argument that the Court 1) should exercise its discretion to award attorneys' fees to Jiffy Lube, 2) should not attempt to disaggregate the fees that Jiffy Lube incurred in its defense of Lanphere's UTPA claim from its defense of Lanphere's tort claim, and 3) should find all of Jiffy Lube's unidentified and unenumerated attorneys' fees and costs incurred in this action to be reasonable. In response to Jiffy Lube's request for attorneys' fees, Lanphere merely states Jiffy Lube is not entitled to an award of attorneys' fees because Jiffy Lube should not prevail on its Motion for Summary Judgment. Lanphere does not address any of Jiffy Lube's specific arguments regarding Jiffy Lube's request for attorneys' fees.
Or. Rev. Stat. § 20.075(1) enumerates certain factors that the Court "shall consider" when determining whether to award attorneys' fees in a case in which fees are authorized by Oregon statute but still discretionary with the Court.
In addition, § 20.075(2) lists certain factors the Court "shall consider" in addition to those listed in subsection (1) when determining the amount of any such award of attorneys' fees. Jiffy Lube has not addressed the statutory factors that the Court must consider. In addition, Jiffy Lube has failed to provide evidentiary support for its requested attorneys' fees or, indeed, even indicated the total amount of those fees. As a result, the Court declines to award Jiffy Lube any attorneys' fees at this time. Jiffy Lube, however, may file no later than July 2, 2003, a petition for attorneys' fees that addresses whether the Court should exercise its discretion under § 646.638(3) to award attorneys' fees to Jiffy Lube and the reasonable amount of such fees.
Fed.R.Civ.P. 54(d)(2) and LR 54.4 provide general guidance regarding attorneys' fees petitions. The Court's website contains additional specific information regarding attorneys' fees petitions that may be helpful to the parties Seehttp://ord.uscourts.gov/attorney — fee — statement.pdf.
PLAINTIFF'S MOTION TO AMEND Background
Lanphere first filed this action in Washington County Circuit Court on June 12, 2001. Lanphere asserted claims for violations of UTPA and for intentional interference with existing or prospective business relations. Lanphere alleged Jiffy Lube caused certain advertisements that contained "false," "disparaging," and "misleading" statements to be aired in the Portland area. In particular, Lanphere complained of the following statement:
Your dealer already lubed you when you bought the car, do you really want to go there again?
Lanphere also complained of statements in the advertisements that referred to Jiffy Lube's employees as "certified technicians" because Jiffy Lube's employees "are not certified by any recognized national or state certification program."
Lanphere further alleged it suffered an ascertainable loss and actual damages of lost revenue for goods and services it would have provided to existing and potential. In addition, Lanphere alleged it suffered damage to its reputation as a result of the statements in Jiffy Lube's advertisements.
On July 31, 2001, Jiffy Lube removed the action to this Court on diversity grounds.
On October 9, 2001, the Court held a scheduling conference pursuant to Fed.R.Civ.P. 16 and, with the agreement of counsel, set a February 15, 2002, deadline for the completion of discovery. Beginning in January 2002 with the filing of Jiffy Lube's first Motions to Compel, for Award of Expenses, and for Modification of Scheduling Order, counsel have been engaged in an ongoing struggle regarding discovery and, in particular, Jiffy Lube's attempts to flesh out Lanphere's theories of causation and damages. The Court has refereed these disputes as Jiffy Lube filed multiple motions to compel and motions for sanctions and both parties filed repeated motions for extensions of case management deadlines. The Court, in fact, has entertained five motions to extend the deadlines in this matter, four of which were filed by Lanphere or by Jiffy Lube as a result of Lanphere's failure to respond to discovery requests or to comply with this Court's discovery orders.
On May 15, 2002, the Court entered a scheduling order based, in part, on the parties' joint statement regarding case management deadlines. As part of that Order, the Court directed the parties to file any motions to amend the pleadings by July 8, 2002. The Court did not extend this deadline at any time.
On May 20, 2002, Lanphere filed a Motion for Leave to Amend its Complaint to join as defendants certain Portland — area Jiffy Lube franchisees that allegedly created and authorized the airing of some of the advertisements containing allegedly false statements. Lanphere's Proposed First Amended Complaint included claims for violations of UTPA and for intentional interference with existing and prospective business relations against Jiffy Lube and nine entities that were organized under the laws of Oregon and that maintained their principal places of business in Oregon.
On August 2, 2002, the Court held a hearing on Lanphere's motion to amend and Lanphere's motion to extend case management deadlines, which was also pending at that time. Because the joinder of the proposed defendants would have destroyed subject matter jurisdiction, the Court concluded it had discretion under 28 U.S.C. § 1447 (e) to deny the joinder or to allow the joinder and to remand the action to state court. The Court exercised its discretion to deny joinder for several reasons. First, the Court concluded Lanphere failed to show that it could not obtain complete relief in the absence of the additional franchisees and that it would be prevented from bringing a separate action against those franchisees in state court. In addition, the Court noted the discovery problems in the case were ongoing, and the case, therefore, was not fit to be transferred to a new forum. The Court explained it was simply "too late to change the scope of this case, particularly since we're this far with so little done and so much to do." The Court, therefore, concluded joinder was not warranted because the "core case" against Defendant should stay in federal court for prompt resolution "without any further delay."
On January 22, 2003, Lanphere; Beaverton Chrysler-Plymouth, Inc.; and Newberg Dodge Jeep Chrysler-Plymouth, Inc., filed a separate action against Defendant's nine franchisees in Washington County Circuit Court. The complaint included claims for UTPA violations, intentional interference, and violations of the Lanham Act. The franchisees removed that action to federal court on March 3, 2003, on the ground that this Court has federal question jurisdiction over the Lanham Act claims. The related matter, designated Lanphere Enterprises, Inc. v. Doorknob Enterprises, L.L.C., CV 03-273 BR, subsequently was assigned to this Court and remains pending.
The Court granted in part Lanphere's motion to extend the case management deadlines. The Court ordered the parties to file dispositive motions no later than November 22, 2002. The parties later stipulated to a further extension of that deadline to December 20, 2002, and the Court granted their stipulated request.
On December 20, 2002, Jiffy Lube filed its Motion for Summary Judgment and Motion to Exclude Lanphere's expert testimony, reports, and surveys. On that same date, Lanphere filed a second Motion for Leave to File Amended Complaint. In the Proposed Amended Complaint, Lanphere seeks to:
1. add as plaintiffs two of Lanphere's car dealerships, Beaverton Chrysler-Plymouth, Inc., and Newberg Dodge Jeep Chrysler-Plymouth, Inc.;
2. "clarify" Lanphere's allegations regarding the substance of the allegedly false statements in Jiffy Lube's advertisements; and
3. add a claim for violations of the Lanham Act, 15 U.S.C. § 1125(a).
Standards
Fed.R.Civ.P. 15(a) provides a party may amend a pleading only by leave of court after a responsive pleading has been filed unless the opposing party consents to the amendment. Rule 15(a), however, also provides that leave to amend "shall be freely given when justice so requires." "This policy is to be applied with extreme liberality." Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1051 (9th Cir. 2003). The Supreme Court has recognized several factors that a district court should consider when determining whether justice requires the court to grant leave to amend. Those factors include:
undue delay, bad faith or dilatory motive on the part of the tnovant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, futility of the amendment.Id. at 1052 (quoting Foman v. Davis, 371 U.S. 178, 182 (1962)). "Absent prejudice or a strong showing of any of the remaining Foman factors, there exists a presumption under Rule 15(a) in favor of granting leave to amend." Id.
When a court enters a pretrial scheduling order that includes a deadline for filing amended pleadings, however, a party seeking leave to amend after that deadline expires must satisfy the requirements of Fed.R.Civ.P. 16(b). Coleman v. Quaker Oats Co., 232 F.3d 1271, 1294 (9th Cir. 2000), cert. denied, 533 U.S. 950 (2001). Under Rule 16(b), the party seeking leave to amend must show "good cause for not having amended . . . [the] complaint before the time specified in the scheduling order expired." Id. The "good cause" standard "primarily considers the diligence of the party seeking the amendment." Id. (internal quotations and citations omitted). In addition, the party opposing the amendment need not show it will suffer any prejudice if the Court grants the amendment. Id.
Discussion
Lanphere concedes its allegations in the Proposed Amended Complaint generally "do not bring any new conduct of any kind into this case." Lanphere, however, fails to explain why it did not move to amend the Complaint to add these new allegations and claims before the Court-imposed deadline for filing any motions to amend. Lanphere has known the scope and extent of Jiffy Lube's conduct for quite some time. In addition, Lanphere certainly knew or should have been aware of its own corporate structure and the separate identities of the proposed plaintiff dealerships. After repeated extensions and various court orders compelling Lanphere to produce adequate discovery responses and to reveal to Jiffy Lube the nature of its claims, Lanphere failed to articulate a viable theory of recovery based on that conduct before the deadline for doing so.Under Rule 16(b), the Court's primary concern is whether Lanphere diligently asserted its rights and not whether the late amendment will cause Jiffy Lube any prejudice. For the foregoing reasons and the additional reasons given by the Court during the August 2, 2002, hearing on Lanphere's previous motion to amend, the Court finds Lanphere has not diligently asserted its rights in this matter and its motion to amend is not timely. The Court also finds Lanphere has not shown good cause for its failure to file a timely motion for leave to amend before the deadline imposed by this Court. The Court, therefore, denies Lanphere's Motion for Leave to File Amended Complaint.
CONCLUSION
For these reasons, the Court GRANTS Jiffy Lube's Motion to Exclude Lanphere Enterprises' Expert Testimony, Reports, and Surveys (#75). In addition, the Court GRANTS Jiffy Lube's Motion for Summary Judgment (#68), DISMISSES with prejudice Lanphere's claims against Jiffy Lube, and DENIES as moot Lanphere's Motion to Strike Portions of Defendant's Concise Statement of Material Facts (#101). Finally, the Court DENIES
Lanphere's Motion for Leave to File Amended Complaint (#82)
IT IS SO ORDERED.