Habr v. RXMAPPER, LLC

Background

This is Pretrial Order No. 3 concerning scheduling and jury instructions in an action brought by Edwar Habr and other plaintiffs against RXMAPPER, LLC and other defendants, with related counterclaims. The court issued the order because its trial calendar included a separate criminal matter and because the parties had made additional submissions requested in an earlier pretrial order.

Trial Schedule

The court revised the trial schedule. Jury selection remained scheduled for Friday, August 15, 2025. The parties were required to proceed directly to opening statements and, if time permitted, the first witness. After that, the trial would follow the previously stated daily schedule, totaling 6 hours and 10 minutes.

The court also stated that, if both parties agreed, the trial could be advanced to August 11, 2025, with the trial day ending at 1:40 p.m. The parties were directed to notify the court jointly within three business days if they preferred that option.

Fraud Damages

The court ruled that plaintiffs’ fraud claim, if successful, would be limited to out-of-pocket damages concerning the promise of equity in RxMapper, LLC. Out-of-pocket damages measure the difference between what a defrauded person gave up and what the person received. The court treated the equity interest as property and applied California Civil Code section 3343(a).

The court distinguished those damages from benefit-of-the-bargain, or expectation, damages, which seek to provide the value of what a party expected to receive. The court stated that plaintiffs could not recover benefit-of-the-bargain damages because they had not shown the required fiduciary relationship and intentional misrepresentations. The court denied plaintiffs’ request for a jury instruction on benefit-of-the-bargain damages and stated that proposed jury instruction 42.1-D would be given instead.

Mitigation of Damages

The parties disputed whether defendants could assert an affirmative defense based on mitigation of damages. Mitigation generally concerns whether a claimant took reasonable steps to limit losses. The court agreed with defendants that this defense raised a factual issue for the jury. It stated that plaintiffs could make at trial the arguments raised in their supplemental briefing and ordered that proposed jury instruction 34 would be given.

Conversion of Source Code

Plaintiffs disputed whether intellectual property—in this case, RxMapper’s source code—could be the subject of a conversion claim. Conversion is a claim alleging wrongful control over another’s property. The court preliminarily agreed with defendants that source code can be converted, although it noted that not all intellectual property can be the subject of conversion.

The court stated that the applicable test requires an interest capable of precise definition, capable of exclusive possession or control, and supported by a legitimate claim to exclusivity. If the trial evidence supported all three requirements, defendants would be permitted to submit their conversion counterclaim to the jury. The court preliminarily allowed proposed jury instructions 62 through 64 on that issue.

Defendants’ Trademark Claim

The court had previously raised concerns about whether defendants could prove actual confusion for their claim under the Lanham Act, the federal trademark statute. The parties disputed the sufficiency of their evidence but did not provide specific authority addressing the court’s concern.

The court deferred until the charging conference—the stage when the court and parties finalize jury instructions—whether the trial evidence would support giving an instruction on that claim. If the evidence was sufficient, the court stated that proposed instructions 65 through 68 would be included preliminarily.

Late Summary-Judgment Motion

The court denied leave to file a summary-judgment motion concerning this issue or the Lanham Act claim. It stated that the deadline for such a motion was November 22, 2024, and had already passed.

Disposition and Scope

The order revises the trial schedule, denies plaintiffs’ requested fraud-damages jury instruction, permits the specified mitigation instruction, preliminarily allows the conversion instructions, defers the Lanham Act instruction decision until trial, and denies leave to file a late summary-judgment motion. It is a pretrial order and does not resolve the parties’ ultimate claims or counterclaims.