Antitrust Law Daily Wrap Up, ANTITRUST—N.D. Cal.: Court attempts to resolve discovery dispute in U.S. challenge to Bazaarvoice acquisition of PowerReviews, (Jul 22, 2013)

By Tobias J. Gillett, J.D., LL.M.

In a Department of Justice action challenging Bazaarvoice Inc.'s consummated acquisition of PowerReviews Inc. on the ground that the transaction substantially lessened competition in the market for product ratings and reviews platforms in the United States, the federal district court in San Francisco has ordered a case management strategy to address the government’s attempt to obtain information regarding an alleged contradiction between a report issued by Bazaarvoice’s expert witness and a statement from a client identified in the report (U.S. v. Bazaarvoice, Inc., July 18, 2013, Beeler, L.).

Bazaarvoice offers product ratings and reviews platforms that permit companies to collect and display customer-generated ratings and reviews. In January, the Department of Justice filed a civil antitrust complaint against Bazaarvoice, asserting that its June 2012 acquisition of PowerReviews violated Section 7 of the Clayton Act.

Jason Goldberg is an e-commerce consultant and Bazaarvoice’s industry expert. Goldberg is presently employed by the digital marketing agency Razorfish, and he was previously employed by CrossView. In his expert report, Goldberg stated that a certain retailer had used Gigya for its social sign-in and Bazaarvoice for its ratings and reviews, and that he had recommended that the retailer should transition to Gigya for its ratings and reviews as well. The Justice Department contended that this statement contradicted a declaration from the retailer that stated that the retailer had never considered another vendor for ratings and reviews services, other than Bazaarvoice.

The Justice Department subpoenaed Razorfish and CrossView for a variety of documents, explaining that it was seeking the documents because Goldberg “had relied on his expertise working at the companies, including the work performed on behalf of particular named clients, as the basis for his expert opinion.” However, Goldberg “did not look at or consider any documents related to his engagements with particular clients in forming his opinions or preparing his report.”

Although Bazaarvoice cited cases for the proposition that, under Federal Rule of Civil Procedure 26, “an expert does not need to turn over documents he reviewed before his retention as an expert when the expert relies in part on his prior knowledge and experience,” the court observed that the experts in those cases did not mention specific past examples, instead relying on their past knowledge generally.

The court noted that Bazaarvoice’s “obligation under Rule 26 arguably is different for the past employer for information that Goldberg only recalls and did not review,” and that for the current employer “the temporal interplay among advice, documentary support for it, and expert opinion might be important and might mean that there is documentary evidence that was relied on (even if not technically reviewed by the expert in preparing his report and ultimate testimony).” However, the court also noted that “relying on memory is different than reviewing ‘facts or data’ under Rule 26(a)(2)(B)(ii), and identifying the basis for the opinion arguably passes muster as a sufficient disclosure of the ‘basis and reasons’ for the opinions under Rule 26(a)(2)(B)(i).”

The court observed that, whatever Bazaarvoice’s obligations under Rule 26 might be, the Justice Department could use “different discovery tools to illuminate and challenge expert testimony,” such as a subpoena under Rule 45. The court determined that the Justice Department should be able to “dig into the factual foundation” for Goldberg’s recollection, but that the subpoenas at issue appeared to be too broad and presented an undue burden considering their utility. The court noted that the discrepancy the Justice Department identified “seems pretty attenuated and not much of a contradiction,” but that “what needs to be illuminated seems modest.”

Therefore, the court ordered a case management strategy to balance the “limited utility” and “burden issues” with the government’s interest. Under that strategy, the counsel would “review the 10 or so clients at issue, identify potential ‘facts and data’ or the ‘basis and reasons’ for the specific opinions or recollections that Goldberg expressed or references, and identify the documents that might support the specific recollection that Goldberg identified in his report.” Goldberg would “identify what supporting documents may exist, their likely content (as specifically as possible), and their accessibility.” Goldberg “could illuminate the ‘basis and reasons for the expert opinions,” either in a formal supplement or in an informal exchange before the deposition.

The case is No. C 13-00133 WHO (LB).

Attorneys: Michael Domenic Bonanno for U.S. Department of Justice. Daniel Paul Weick (Wilson Sonsini Goodrich and Rosati) for Bazaarvoice, Inc.

Companies: Bazaarvoice, Inc.

Cases: Antitrust CaliforniaNews AntitrustDivisionNews