Case Information
*1 Cypress Insurance Company v. SK Hynix America, Inc.
C17-467 RAJ Court’s Rulings on Cypress’ Objections to Hynix’s Counter-Designations (Dkt. # 251) SHERRIL KIST PAGE / NATURE OF REASON RESPONSE COURT’S RULING LINE OBJECTION
41:4 – 16 Foundation; Premiums not relevant to Ms. Kist’s answer relates to OVERRULED Relevance coverage of the underlying the issue of voluntary payor claim and the witness has no and is thus relevant. basis as the claims preparer Moreover, she is being to testify regarding premiums questioned on an email Microsoft paid or Cypress (Exhibit 196) that was received. F.R.E. 401, 602 directed to her. Additionally,
parties have stipulated admissibility to that email on March 4, 2019.
43:1 – 11 Relevance Premiums not relevant to Ms. Kist’s answer relates to OVERRULED coverage of the underlying the issue of voluntary payor claim and the witness has no and is thus relevant. basis as the claims preparer to testify regarding premiums Q. Were reinsurance Microsoft paid or the premiums relevant to this Reinsurers received. F.R.E. particular policy? 401, 602 . . .
A. Because reinsurance premiums are part of what makes up the policy.
PAGE / NATURE OF REASON RESPONSE COURT’S RULING LINE OBJECTION (Kist Dep., 43:1-6.) 45:19 – Relevance Business impact analysis has Ms. Kist’s answer relates to OVERRULED *2 46:7 no relevance to any issues in the issue of voluntary payor the case including the and Cypress’ evidence of insurance claim, payment of damages. the underlying contingent business interruption claim to Q. Can you tell me what this Cypress, or the voluntary analysis is for? payment defense of Hynix. A. Yes. It’s a business F.R.E. 401 impact analysis that actually
reviews Microsoft’s, you know, revenues and impacts to their revenues throughout the year. Q. Impact of what? A. It could be the impact of a loss. Q. Do you know who came up with the data that’s contained in this document? A. Yes. Q. Who was it? A. Microsoft. (Kist Dep., 45:22-46:7.)
48:13 – 20 Relevance Pre-loss conduct has no Per the Court’s ruling on OVERRULED relevance to any issues in the Limiting Instruction Nos. 58 case including the insurance and 59, it follows that pre- claim, coverage of the loss conduct is relevant to the
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OBJECTION underlying contingent issues in the case. (Dkt. No. business interruption claim to 245.) Here, such testimony Cypress, or the voluntary goes to whether Microsoft payment defense of Hynix. acted in a commercially F.R.E. 401 reasonable manner or
whether payments made by Cypress to Microsoft were properly made under the insurance policy.
54:18 – Relevance Microsoft claim history has Ms. Kist’s testimony is part OVERRULED 54:24 no relevance to any issues in of a longer line of
the case including the questioning (including the insurance claim, payment of below), which goes to the underlying contingent Microsoft’s pre-fire conduct *3 business interruption claim to vis-à-vis Hynix’s voluntary Cypress, or the voluntary payor defense. payment defense of Hynix. F.R.E. 401 Per the Court’s ruling on
Limiting Instruction Nos. 58 and 59, pre-loss conduct is relevant to the issues in the case. (Dkt. No. 245.) Such testimony goes to whether Microsoft acted in a commercially reasonable manner or whether payments made by Cypress to Microsoft were properly
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OBJECTION made under the insurance policy.
57:3 – 5 Relevance Warehouse locations has no Ms. Kist’s testimony is part SUSTAINED relevance to any issues in the of a longer line of case including the insurance questioning (including the claim, payment of the below), which goes to underlying contingent Microsoft’s pre-fire conduct business interruption claim to vis-à-vis Hynix’s voluntary Cypress, or the voluntary payor defense. payment defense of Hynix. F.R.E. 401 Per the Court’s ruling on
Limiting Instruction Nos. 58 and 59, pre-loss conduct is relevant to the issues in the case. (Dkt. No. 245.) Such testimony goes to whether Microsoft acted in a commercially reasonable manner or whether payments made by Cypress to Microsoft were properly made under the insurance policy.
59:15 – Relevance Microsoft risk in its Ms. Kist’s testimony is part OVERRULED 61:16 insurance program has no of a longer line of
relevance to any issues in the questioning (including the *4 case including the insurance below), which goes to claim or coverage of the Microsoft’s pre-fire conduct underlying contingent
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OBJECTION business interruption claim to vis-à-vis Hynix’s voluntary Cypress as the issues are pre- payor defense. loss. F.R.E. 401
Per the Court’s ruling on Limiting Instruction Nos. 58 and 59, pre-loss conduct is relevant to the issues in the case. (Dkt. No. 245.) Such testimony goes to whether Microsoft acted in a commercially reasonable manner or whether payments made by Cypress to Microsoft were properly made under the insurance policy.
62:9 – Relevance Suppliers named in the Ms. Kist’s testimony is part SUSTAINED 63:2 Cypress policy has no of a longer line of
relevance to any issues in the questioning, which goes to case including the insurance Microsoft’s pre-fire conduct claim, payment of the vis-à-vis Hynix’s voluntary underlying contingent payor defense. business interruption claim to Cypress, or the voluntary Per the Court’s ruling on payment defense of Hynix. Limiting Instruction Nos. 58 F.R.E. 401 and 59, pre-loss conduct is
relevant to the issues in the case. (Dkt. No. 245.) Such testimony goes to whether
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OBJECTION Microsoft acted in a commercially reasonable manner or whether payments made by Cypress to Microsoft were properly made under the insurance policy.
65:13 – 17 Relevance Business Impact Analysis has Exhibit 199, to which parties OVERRULED no relevance to any issues in stipulated to admissibility on the case including the March 4, 2019, is Microsoft’s insurance claim, payment of internal report risk analysis the underlying contingent on the launch of the Xbox business interruption claim to One, discussing its Cypress, or the voluntary contingent business payment defense of Hynix. interruption of its Xbox One F.R.E. 401 console and its “key”
suppliers. Such documents are relevant to the issues of commercially reasonable efforts and/or voluntary payor.
67:3 – 11 Relevance Suppliers names in the Exhibit 199, to which parties SUSTAINED Cypress policy has no stipulated to admissibility on relevance to any issues in the March 4, 2019, is Microsoft’s case including the insurance internal report risk analysis claim or coverage of the on the launch of the Xbox underlying contingent One, discussing its business interruption claim to contingent business Cypress. F.R.E. 401 interruption of its Xbox One
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OBJECTION console and its “key” suppliers. Such documents are relevant to the issues of commercially reasonable efforts and/or voluntary payor.
*6 73:1 – 10 Relevance Business Impact Analysis has Exhibit 199, to which parties OVERRULED no relevance to any issues in stipulated to admissibility on the case including the March 4, 2018, is Microsoft’s insurance claim or coverage internal report risk analysis of the underlying contingent on the launch of the Xbox business interruption claim to One, discussing its Cypress. F.R.E. 401 contingent business
interruption of its Xbox One console and its “key” suppliers. Such documents are relevant to the issues of commercially reasonable efforts and/or voluntary payor.
77:5 – 16 Foundation; No foundation and not Hynix’s counter-designation SUSTAINED Relevance relevant as the civil authority establishes what Ms. Kist provision of the Cypress knows or does not know, policy was not at issue in the which goes to the foundation adjustment of the claim. of Cypress’ designations.
F.R.E. 401
91:11 – 25 Relevance Testimony has no relevance Ms. Kist is being question on OVERRULED to any issues in the case Exhibit 200, to which parties including the insurance claim stipulated admissibility on
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OBJECTION or coverage of the underlying March 4, 2019, and it goes to contingent business Hynix’s defense of voluntary interruption claim to payor as it is part of how the Cypress. F.R.E. 401 insurance claim was handled.
95:20 – Foundation; No foundation and has no Hynix’s counter-designation SUSTAINED 96:1 Relevance relevance to the insurance establishes what Ms. Field claim or coverage of the knows or does not know, underlying contingent which goes to the foundation business interruption claim to of Cypress’ designations. Cypress. F.R.E. 401
LAUREN FIELD
*7
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OBJECTION 47:8 – Foundation The testimony was provided Ms. Field’s response was not OVERRULED 47:16 in response to an incomplete in response to an incomplete
hypothetical and thus, is an hypothetical but a line of improper opinion. F.R.E. 701 questioning based off of a
document that she was being question on: Q And did you review any materials other than what Microsoft provided you directly? A With respect to this particular bullet point? Q Yes. A No. Q And submitting a claim for incremental freight expenses would only have been appropriate if the incremental expenses were caused by the fire, right? A Correct. Q If those extra expenses were caused by reasons other than the fire, then submitting a claim for that amount
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OBJECTION would not have been appropriate? A Correct. (Field Dep., 47:2-16.)
64:15 – 16 Foundation The question posed lacks Ms. Field’s answer is OVERRULED foundation as to whether the permissible under FRE 701 witness is qualified to offer an as it is based on her opinion re: “best practice” and perception as someone who submission to an insurance has substantial experience. company as she is employed Her answer puts in context by a claim preparation her other testimony regarding company, not an insurance the handling of the insurance company. F.R.E. 701 claim and is thus helpful.
Moreover, it is not based on any specialized knowledge as prohibited under FRE 701.
66:16 – Relevance Ex. 207 related to negotiations Ms. Field’s answer goes to OVERRULED 67:22 in 2014 and is not relevant to the calculation of
the fire that occurred in 2013 consequential incremental or to any issue in the case. chip costs that Cypress F.R.E. 401 potentially paid for and is
therefore relevant. Q. When you say what amount is incremental, you wanted to get an idea of what the baseline to compare it against it was.
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OBJECTION A. Yes. (Field Dep., 66:15-18.)
67:23 – Relevance Issues of sole source and Ms. Field’s answer relating to OVERRULED 69:1 primary sourcing are not sole sourcing and primary
relevant to the payment of the sourcing goes to the issue of insurance claim. F.R.E. 401 voluntary payor. Moreover,
her testimony discusses consequential incremental chip costs that Cypress potentially paid for and is therefore relevant. Q. And when calculating the incremental chip costs, was it your understanding that the incremental cost was based on a comparison between what Microsoft paid for Samsung chips compared to what they would have paid for Hynix chips? A. Yes. (Field Dep., 68:10-15.)
69:10 – Foundation and The email relates to a Ms. Field’s testimony goes to OVERRULED 71:19 Relevance Samsung part that was the both voluntary payor and the
next generation and was not consequential incremental available prior to or at the chip costs. Furthermore, Ms.
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OBJECTION time of the fire. The fact that Field’s testimony is also Microsoft was going to based on an email, (Exhibit consider purchasing these 207)—to which parties chips from Samsung in 2014 stipulated admissibility on regardless of whether the fire March 4, 2019—where she occurred is not relevant to this was a recipient, litigation and no foundation has been provided by Hynix. Q. So if we look back at the F.R.E. 401 document at Exhibit 207, Mr.
King tells you (reading) . . . . *10 A. Right. (Field Dep., 70:24-71:6.)
82:25 – Foundation; This is not relevant to the fire Ms. Field’s answer relates to OVERRULED 84:1 relevance and the claim as submitted to the issue of voluntary payor
the insurers. F.R.E. 401 and is thus relevant. Moreover, the questions are an attempt to establish foundation through her memory: Q. Do you recall ever seeing . . . . . . Q. Do you recall ever asking Microsoft to provide you . . . . (Field Dep., 82:25-83:11.)
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OBJECTION 84:8 – 25 Foundation; This is not relevant to the fire Ms. Field’s answer relates to OVERRULED relevance and the claim as submitted to the issue of voluntary payor the insurers. F.R.E. 401 and is thus relevant. Moreover, her answer is based on her recollection of discussions. Q. What basis do you have to conclude that it was an immaterial amount then? A. My recollection of the discussion. (Field Dep., 84:18-20.)
89:12 – 17 Foundation Witness has no recollection of Hyinx’s counter-designation OVERRULED the question posed. is being used to establish what Ms. Field knows or does not know, which goes to the foundation of Cypress’ designations. See Fed R. Evid. 602 (“A witness may testify to a matter only if *11 evidence is introduced sufficient to support a finding that the witness has personal knowledge of the matter.”).
91:6 – 16 Incomplete The testimony was provided Ms. Field’s testimony is not OVERRULED Hypothetical in response to an incomplete an incomplete hypothetical and is based on a document
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OBJECTION hypothetical and thus, is an (Exhibit 212)—to which improper opinion. F.R.E. 701 parties stipulated
admissibility on March 4, 2019—that was presented to her. Her testimony is rationally based on her perception of that document and the situation surrounding that document, is helpful to clearly understanding the rest of her testimony, and is not based on scientific, technical, or other specialized knowledge. Thus, it is admissible. Fed. R. Evid. 701.
92:14 – 25 Foundation and The witness had never seen Ms. Field’s testimony goes to OVERRULED No Knowledge the email shown to her and the her knowledge of whether email does not state what she had seen information Hynix claims it does, i.e. similar to what was contained inconsistent with the ability of in the document presented Hynix to supply 30.6 million before her. In other words, DRAM chips. F.R.E. 801 her knowledge regarding the
exact document before her is not at issue. Moreover, this counter-designation is meant to establish what Ms. Field knows or does not know,
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OBJECTION which goes to the foundation of Cypress’ designations.
93:1 – Foundation and The witness has not seen the As explained in the previous OVERRULED 95:19 Hearsay email and therefore, the response, Ms. Field’s
testimony is hearsay as Hynix testimony goes to her is offering it for the truth of knowledge of whether she the matter asserted, that the had seen information similar September support plan does to what was contained in the not support the contract document presented before values. F.R.E. 602, 801 her. Thus, because her
testimony is about her knowledge and is not testifying as to the document before her, her testimony is not hearsay and is admissible. Fed. R. Evid. 701, 801. Moreover, Hynix’s counter- designation is meant to establish what Ms. Field knows or does not know, which goes to the foundation of Cypress’ designations.
98:5 – 23 Foundation The witness has not seen the As explain in the previous OVERRULED email and therefore, the responses, Ms. Field’s testimony is hearsay as Hynix testimony goes to her is offering it for the truth of knowledge of whether she the matter asserted, that the had seen information similar September support plan does to what was contained in the not support the contract document presented before
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OBJECTION values. Moreover, the witness her. Thus, because her indicated that the email was testimony is about her *13 not within the scope of knowledge and is not information that she reviewed testifying as to the document in preparation for the before her, her testimony is deposition. F.R.E. 602, 801 not hearsay and is admissible.
Fed. R. Evid. 701, 801. 101:4 – 6 Argumentative Improper question as The question is not OVERRULED argumentative. argumentative as is meant to clarify her preceding testimony. Q. If a determination had been made that the limits would have been exhausted, how does that affect the disposition of the remaining portion of the claim? A. Generally we’ll cease working. Q. So it’s kind of like a mercy rule in effect? A. Exactly. (Field Dep., 100:25-101:6.)
105:19 – Relevance; The questioning relates to Ms. Field’s testimony goes to OVERRULED 112:23 Prejudicial whether Microsoft ever the issue of voluntary payor,
provided email such as what type of communications to Cypress or
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OBJECTION Re-Insurers. Such information was provided by documentation was not Cypress to its reinsurers: relevant to the claim. Moreover, Hynix cannot Q. And was it Aon’s view identify any email that email correspondence communications between from Hynix to Microsoft in Microsoft and Hynix in which relation to the fire was not Hynix advised Microsoft that related to getting this claim Hynix would not have approved? supplied the DRAM chips to A. If it wasn’t an item that Microsoft even if the fire had was requested, then we not occurred. The one wouldn’t have pulled it. document shown to the witness does not contain that (Field Dep., 108:6-13.) *14 information. In fact, the email indicates that Hynix noted that Moreover, Ms. Field is being they were still ramping up and questioned on documents to that yields would improve. which parties have stipulated Since there is no Hynix- admissibility on March 4, Microsoft email that would 2019. support Hynix’s position that they would not have supplied Microsoft with the DRAM chips had the fire not occurred, it is prejudicial for Hynix to submit this line of questioning to the jury.
F.R.E. 401, 403
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OBJECTION 114:13 – Foundation Witness has no recollection of This counter-designation is OVERRULED 115:9 the questions posed to her meant to establish what Ms.
relating to information to Field knows or does not support the claim. know, which goes to the
foundation of Cypress’ designations.
129:15 – Foundation Witness has no recollection of This counter-designation is OVERRULED 130:2 the questions posed to her meant to establish what Ms.
relating to information to Field knows or does not support the claim. know, which goes to the
foundation of Cypress’ designations.
S.W. JEONG
*15
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OBJECTION 57:19 – 24 Relevance Number of lines at Icheon Icheon is the facility listed in OVERRULED has no relevance to the issues the Ninth Amendment that in the case. F.R.E. 401 produced Microsoft’s 2133
DRAM chips. Given that Cypress’ claim is that Hynix did not produce enough 2133 DRAM chips when Hynix allegedly could have, such information goes to the core of the litigation and is thus relevant. Q. Okay. How many lines were there at Icheon for the manufacture of the DRAM chip? A. Are you talking about the 2013? Q. Yes. A. One. (Jeong Dep., 57:19-24.)
58:25 – Foundation; The witness said that he is Hynix is providing its OVERRULED 59:7 Relevance not related to production and counter-designations to
cannot address capacity establish what Mr. Jeong changes. F.R.E. 401, 602 knows or does not know,
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OBJECTION which goes to the foundation of Cypress’ designations.
60:11 – 24 Foundation; The testimony has no Hynix is providing its OVERRULED Relevance relevance to the issues and counter-designations to the witness has no establish what Mr. Jeong recollection of the issue of knows or does not know, capacity. F.R.E. 401, 602 which goes to the foundation
of Cypress’ designations. 133:20 – Foundation; The testimony has no Cypress only partially OVERRULED 134:5 Relevance relevance to the issues and designates Mr. Jeong’s
the witness has no response. To address the recollection of the document. omission of Mr. Jeong’s full F.R.E. 401, 602 answer, Hynix has counter
designated the rest of his answer. Moreover, Hynix is providing its counter- designations to establish what Mr. Jeong knows or does not know, which goes to the foundation of Cypress’ designations.
SAM LEE
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OBJECTION 43:25 – Duplicative Witness previously answered Witness did not previously SUSTAINED
44:4 this question answer the line of questioning: Q: Do you recall when the *17 first time Hynix was able to Q. As you sit here today, do produce 2133 megahertz you know what percentage of chip? chips – DRAM chips
produced by Hynix in 2013 A: No. I do not. were 2133 megahertz? A. I don’t quite recall. (Sam Lee, 23:15 – 17) (Lee Dep., 44:5-12.) Furthermore, Hynix is providing its counter- designations to establish what Mr. Jeong knows or does not know, which goes to the foundation of Cypress’ designations.
PETER JONES
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OBJECTION 32:10 – 20 Relevance and Reinsurance of Hynix and the Cypress only partially SUSTAINED prejudicial market of reinsurers is not designates Mr. Jones’
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OBJECTION relevant to any issue in the response. To address the case. Further, the testimony omission of Mr. Jones’ full is prejudicial because it answer, Hynix has counter- identifies AIG as a member designated the rest of his of the market of Hynix answer. reinsurers, which is a reinsurer of Cypress. F.R.E. Q. And do you know who 401, 403 the reinsurance carrier was?
A. It was a market panel. Q. Any U.S. insurers that made up part of the reinsurance panel relative to this loss? A. There were U.S. based parent companies – insurance companies involved. I don’t – I don’t know if there was a separate *18 legal entity in Hong Kong that handled it or something. Q. Which local – which U.S. parent companies are you aware of that were involved in the reinsurance market? Q. Let’s see. AIG. (Jones Dep., 31:11-32:2)
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OBJECTION Thus, the testimony is relevant to provide the full answer of what Cypress has designated and is not prejudicial for that reason.