JOINT STATEMENT: RE FAILURE TO AGREE ON COURT-APPOINTED EXPERT AND ORDER

VINCE CHHABRIA, District Judge.

I.

INTRODUCTION

At a Case Management Conference, held on April 7, 2014, the Honorable Yvonne Gonzalez Rogers ordered the parties to meet and confer to provide recommendations for (1) an expert to serve as a Joint Court Appointed Expert related to the solar power microgrid inverters or "MGi devices" (the "Products-at-Issue"), and (2) protocols and procedures for the expert's opinion related to the Products-at-Issue, including their design, manufacturing, and testing. The Parties filed a Stipulation on April 9, 2014, and requested more time to select an expert. (Docket No. 43.) On April 30, 2014, the Honorable Vince Chhabria denied the Stipulation and ordered the Parties to file a Stipulation for Court-Appointed Expert by May 14, 2014, which included the name of a particular person the parties agree should be appointed to serve as a technical expert or two names if the parties cannot agree. (Docket No. 47.) The Parties are unable to agree to the proposed experts, each of whom is an engineer at Exponent.

II.

PROPOSED COURT EXPERT

Plaintiff's Section:

On April 9, 2014, Plaintiff proposed two experts from Exponent, John Loud, P.E., CFEI, and Mark McNeely, P.E., CFEI. Defendants proposed one expert, also from Exponent, Ray Huang, Ph.D., P.E., CFEI. Attached hereto as Exhibit A, B, and C are the professional profiles from the Exponent website for Loud, McNeely, and Huang, respectively. Their proposed rates for this matter are as follows: Loud ($495), McNeely ($310), and Huang ($295).

All three are experts at Exponent in Electrical Engineering & Computer Science and have experience in this field of technology, however, only the experts Plaintiff proposed have experience providing expert reports in Federal Court.

Loud, a Principal Engineer is the most experienced of the three. Loud has been deposed numerous times. McNeely and Huang are Managing Engineers. McNeely has been at Exponent since 2002, and has experience testifying and has written numerous expert reports, pursuant to Federal Rules, as has Loud. McNeely has relevant experience regarding solar power infrastructure, solar panels, and solar arrays, as stated on his profile, and has performed analysis of microinverters and related software. McNeely has slightly more experience relevant to the subject matter of this case, but, more importantly, Plaintiff anticipates that this expert's analysis and report could be dispositive of key issues in this case and a lack of experience will be of utmost concern, considering any expert will likely be deposed.

Huang has been at Exponent since approximately 2010. Huang informed Plaintiff's counsel that he has little to no experience drafting reports or testifying in court. Plaintiff objects to Huang being the lead Court-Appointed Expert based on the fact that he is the least experienced and most junior of the three proposed experts. Plaintiff finds it incumbent to have an expert familiar with communicating these complex technical issues and concepts consistent with the Federal Rules. Both McNeely and Loud have more experience than Huang with respect to reports and testifying. Defendants have failed to articulate why McNeely or Loud would not be appropriate experts for this case and have only provided Huang's name.

Based on the foregoing, Plaintiff proposes McNeely as the lead Court-Appointed Expert. Plaintiff has confirmed that McNeely is amenable to discussing his qualifications with the Court. He can be contacted at (650) 688-7224.

Ironically, despite Defendant's contention that Loud is the least qualified of these experts, both McNeely and Huang would concede that Loud is the most experienced and they both often report to him associated with work in this field. Rather than dispute this fact, Plaintiff has offered McNeely as Plaintiff's proposed expert, and have articulated to Defendants several times why Plaintiff would object to Huang serving in this lead role. Although Plaintiff does not object to Huang working with McNeely or Loud, Plaintiff objects to Huang being the lead and testifying expert on this matter.

Defendants' Section:

At the initial case management conference on April 7th, both parties' stipulated to a Court-appointed expert to resolve discovery issues by conducting joint testing. The Court asked the parties to agree on an expert or each submit a name for the Court to select. (See, Docket No. 41 minute order confirming action taken at CMC.) Pursuant to the Court's order, the parties agreed to the scope of joint testing but could not agree to an expert. Defendants proposed Ray Huang, Ph.D., P.E., CFEI as the Court-appointed expert. The Plaintiff proposed Mark McNeely, P.E., CFEI or John Loud, P.E., CFEI, although the Court asked for one expert to be submitted by each party. All experts work at Exponent. When neither party accepted the other's proposed expert, Defendants proposed listing Dr. Huang and Mr. McNeeley (whom the plaintiff's counsel identified as their proposed choice) as two experts for the Court's choice and offering to provide additional information to support their choices. Plaintiff's counsel refused stating that he could not accept Dr. Huang as the Court-appointed expert regardless of the stipulation Plaintiff's counsel entered into. Instead, Plaintiff's counsel elects to submit both Mr. McNeeley and Mr. Loud as well as argument against Dr. Huang. With regret, Defendants are forced to respond.

The Defendants propose Dr. Huang based on his higher education and on his specialty which is described as "specializing in supplier and manufacturer quality, reliability as well as product failure and compliance analysis in the area of analog/digital consumer electronics both at component and system level." (See, Exhibit C, Dr. Huang's professional profile.) Dr. Huang's specialty focuses on root cause of failures of power supply electronics. A solar microinverter is a power supply used in a solar energy system. Dr. Huang's specialty encompasses the claims made in this litigation, to wit., whether defects in the microinverter were due to Apparent's poor design, either by configuration or selection of components, or AI-Daiwa's poor workmanship. These are questions that Dr. Huang addresses in his area of work.

Mr. McNeeley has described experience with power supplies, design, and component failure analysis, but his stated area of specialty is in radio frequency analysis (See, Exhibit B.), indicating less direct focus to the issues in this case than Dr. Huang. Mr. Loud's specialty is with large power components and devices (such as transformers) and electrocutions caused by such devices. (See, Exhibit A.) This case presents no issue relating to electrocutions or large power components. Contrary to statements made in the Plaintiff's section above, Defendants' counsel has explained on more than one occasion that a comparison of each person's specialties and experience indicates Dr. Huang is better suited for this assignment.

The Plaintiff's counsel also states that Dr. Huang has `little to no experience' with regard to drafting expert reports and testifying regarding matters of specialized knowledge, as with regard to expert opinion. Dr. Huang has not provided trial testimony but he has been identified as an expert on several occasions, provided deposition testimony, and written several expert reports individually as well as part of a team with regard to state and federal litigation. Dr. Huang may be contacted by the Court at (650) 688-6908.

III.

STIPULATION OF THE PARTIES RELATING TO THE SCOPE OF JOINT TESTING

The Parties by and through their counsel of record stipulated at the Initial Case Management Conference to joint testing by a Court-appointed expert. While the Parties are unable to stipulate to the specific expert, they submit the following stipulation as to the standards and scope of joint testing.

A. STANDARDS

The Federal Rules of Evidence allow a court to appoint an expert either "on its own motion or on the motion of any party." Fed. R. Evid. 706(a). Rule 706(a) provides:

B. PROPOSED ORDER OF APPOINTMENT

Based on the Parties consent at the April 7th Case Management Conference, the Court appoints an expert as a "Court Expert" under the following terms:

1. The Court Expert shall serve as a neutral, independent expert regarding the following: (a) whether the MGi delivered by AI-Daiwa to Apparent met the specifications and testing the Parties agreed to under the Agreement at issue, the November 15, 2011 "Test Plan for Apparent System REV D," or any subsequently agreed-upon quality and testing standards; and, (b) Identify the extent and basis of the MGi failures that Defendants have attributed to manufacturing defects and AI-Daiwa has attributed to improper design, including selection of component(s).

2. The Court Expert's duties shall include the following: (a) to develop, with input from both parties, a process to complete the steps identified in paragraph 1; (b) conduct testing to complete the steps identified in paragraph 1; (c) to prepare a report to document the testing procedure, the tests performed, and the results of the tests; (d) submit to deposition and provide testimony at court; (e) provide a basic tutorial to the Court and the jury on the underlying technology at issue in the case related to the Products-at-Issue; (f) to provide a tutorial, expert analysis and opinions as to the operation of the Products-at-Issue; and (g) to provide expert analysis and opinions as to the technical issues in this case regarding the operability of the Products-at-Issue.

3. The Parties will provide the Court Expert with Materials as described in paragraph 4 as the Court Expert may require for the use in forming his/her opinions. The materials will be provided to the Court Expert within thirty (30) days of the entry of an order appointing him/her. Other materials will be provided on a rolling basis as they are required by the expert and/or become available during the course of the litigation. The Court Expert is not limited to these materials, and may request additional information that he/she believes is necessary.

4. Materials

a. The following Materials shall be provided to the Court Expert within thirty days of entry of an order appointing him/her:

(i) Apparent shall provide 10 samples of delivered MGi devices that do not operate and that were not previously used or sold by Apparent, or otherwise modified by Apparent; and 10 samples of MGi devices that failed in the field;

(ii) AI and AI-Daiwa shall provide 10 samples of MGi devices produced in the period 2011-2012 and have completed the required testing but have not been delivered to Apparent;

(ii) A Bill of Materials use for the manufacture of the MGi devices;

(iii) Specification sheets for manufacture of the MGi devices;

(iv) The Supply Chain Agreement, Addendum, and Quality and Testing Standards provided to AI and AI-Daiwa for the manufacture of the MGi devices;

5. The Parties shall meet and confer to determine what additional information to provide the Court Expert. If the Parties disagree about the propriety of providing a certain document or thing to the Court Expert, and the Parties cannot resolve the dispute through a meet and confer, the Parties will seek the Court's assistance, and neither party shall provide that document or thing to the Court Expert until and unless the Court has resolved the issue.

6. The Court Expert may look to the expert reports and the deposition transcripts of the Parties' experts for guidance as to what the experts and the Parties believe are the key issues to be address in this case. His/her conclusions are to be his/her own independent opinions.

7. The Court reserves the right to have informal verbal communications with the Technical Expert which are not included in any formal written report.

8. In determining the testing procedures, the Court Expert shall engage both Parties but shall retain his/her sole discretion as to how to proceed. All testing shall be videotaped and, subject to the Court Expert's consent, each Party shall be entitled to observe testing but not participate in any step, discussion, or procedure related to testing.

9. After concluding all testing and reviewing material submitted to him/her, the Court Expert will provide a written report describing the testing procedures, the results of the tests, and the expert's conclusions, a copy of which shall be provided to the Court and the Parties. The Court Expert's report should be sent to the Parties by express mail within 30 days of completing testing and reviewing all submitted material. Within twenty-one (21) days of the submission of the expert report, the Parties may ask the Court Expert to appear for a deposition at a time and location that is convenient. At the deposition, the Parties can ask the Court Expert questions, and he/she will be given the opportunity to explain his/her opinions in greater detail prior to his/her testimony at trial. Each Party may depose the Court Expert for up to seven (7) hours.

10. In the Court Expert's Report:

11. The Court Expert will testify at trial on his/her opinions.

12. In order to accept this appointment, the Court Expert must give his/her consent to serve as the Court-appointed expert in this case and declare that he/she will adhere to the terms of his appointment, by signing below and returning the signed original to the Court in the enclosed envelope.

13. The Court Expert must also confirm that he/she has no conflicts of interest.

14. Upon the Court Expert's consent and the Court's appointment, the Parties will retain the Court Expert. The costs of the Court Expert shall be borne equally by AI-Daiwa, Apparent Inc, and Advanced Innovations. Within ten (10) days of the appointment, the Court Expert shall provide an estimate of the cost of this assignment and shall specify a retainer against which fees and costs shall be billed. The parties shall deposit their share of the costs of the Court Expert within 10 days of receipt of the retainer. The retainer shall be supplemented as designated by the Court Expert, subject to a Party's right to request that the Court review and adjust any fees and costs.

15. The Technical Expert shall report to the Court on a periodic basis, every sixty (60) days, regarding the state of his fees and expenses and make a recommendation to the Court as to whether the trust account needs additional deposits from the parties as the case progresses. All matters pertaining to the fees of the Technical Expert are referred to the assigned Judge.

IT IS SO STIPULATED, THROUGH COUNSEL OF RECORD, AS TO SECTION III.

PURSUANT TO STIPULATION AS SET FORTH IN SECTION III, AND COURT ORDER UPON GOOD CAUSE, IT IS SO ORDERED AS FOLLOWS:

The Court appoints Mark McNeely of Exponent as the Court appointed expert to perform the scope of joint testing stipulated to by the Parties.

Exhibit A

Exhibit B

Exhibit C