Justin Guy, a former employee of Absopure where he worked as a driver transporting products within the state of Michigan, had filed a collective action lawsuit on behalf of himself and 25 opt-in Plaintiffs, alleging that Absopure violated the Fair Labor Standards Act (FLSA) by not paying overtime for hours worked in excess of 40 per week. Throughout the litigation, Absopure contended that its drivers, including some of the Plaintiffs, were exempt from FLSA’s overtime provisions under the Motor Carrier Act (MCA) exemption.
One of the key points of contention in the case was whether the “small vehicle exception” to the MCA exemption applicable to the Plaintiffs. This exception would entitle them to overtime pay if they drove trucks weighing less than 10,001 pounds, regardless of the MCA exemption.
The parties had ongoing disputes related to discovery, particularly concerning the weight of the vehicles driven by the Plaintiffs and the hours worked by them. Following a Court order, Absopure was required to furnish Plaintiff with information it possessed relevant to the topics of Absopure’s discovery requests to Plaintiff , while the Plaintiffs were instructed to respond with any agreements or disagreements they might have with the information furnished by Absopure.
Absopure had submitted an interrogatory to the Plaintiffs requesting that they identify each day they drove a vehicle weighing 10,000 pounds or less and each day they drove a vehicle weighing 10,001 pounds or more during the relevant time period. As per the Court’s order, Absopure provided a statement and additional information about the weights of vehicles it claimed were driven by the Plaintiffs. Plaintiffs’ counsel reported that they were conferring with opt-in Plaintiffs regarding their vehicle usage. Subsequently, the Plaintiffs provided Absopure with a summary chart detailing the estimated number of times that 18 opt-in Plaintiffs had driven vehicles weighing 10,000 pounds or less. Notably, only five of those 18 Plaintiffs had submitted declarations stating the number of times they drove small vehicles and similar declarations for the remaining 13 Plaintiffs on the chart were missing.
The parties also disputed the number of hours worked by the Plaintiffs. Plaintiffs initially provided Absopure with a chart estimating the daily start and end times for 22 Plaintiffs, although this chart was not sworn to by any of the Plaintiffs. Additionally, Plaintiffs’ expert, Martin K. Williams, calculated the Plaintiffs’ asserted damages based in part on his review of this estimated hours-worked chart.
Absopure had submitted a motion in limine seeking several specific actions from the Court. These requests included, first, the request to prohibit the Plaintiffs from offering any testimony or evidence related to the small vehicle exception to the Motor Carrier Act (MCA) as a sanction under Federal Rule of Civil Procedure 37 due to the Plaintiffs’ failure to respond to Absopure’s interrogatories.
Additionally, Absopure asked the Court to exclude from evidence the Plaintiffs’ estimated hours-worked chart, which had been attached as Exhibit A to the Plaintiffs’ third supplemental initial disclosures. Absopure had argued that this chart consisted of inadmissible hearsay and hence warranted exclusion.
Finally, Absopure also requested the Court to exclude the testimony of the Plaintiffs’ proffered damages expert, Martin Williams.
However, after Absopure filed its motion, the Plaintiffs subsequently provided Absopure with sworn declarations from 19 Plaintiffs, which contained estimates of the hours they had worked.
Forensic Accounting Expert Witness
Martin K. Williams, CPA/CFF, CFE is a twenty-two year Certified Public Accountant and sixteen-year seasoned forensic accountant/expert witness. He specializes in economic damages and lost profits in cases pertaining to breach of contract, shareholder disputes, personal injury and marital dissolution. He holds a Bachelor’s and Master’s degree in Business Administration from University of Miami Herbert Business School.
Discussions by the Court
The Court first addressed Absopure’s request to prohibit Plaintiffs from presenting any evidence or testimony related to the small vehicle exception to the MCA exemption as a sanction under Rule 37. The Court recognized that the small vehicle exception was highly relevant to the parties’ claims and defenses. The Court also acknowledged that Plaintiffs failed to adequately respond to Absopure’s interrogatory asking them to specify which vehicles under 10,000 pounds they drove. However, the Court determined that imposing sanctions at this stage would be premature if Plaintiffs promptly supplemented their discovery responses as required.
Instead of imposing sanctions immediately, the Court ordered Plaintiffs to produce for every Plaintiff for whom recovery is sought, a declaration, affidavit, or sworn testimony by October 31, 2023 specifying the number of times the Plaintiffs drove vehicles under 10,000 pounds. The Court stated that reasonable estimates could be used if Plaintiffs attested exact numbers were unknown. The Court warned that any Plaintiff who failed to timely provide the required sworn statement without showing good cause would be barred from presenting evidence or testimony regarding the small vehicle exception. This potential sanction would apply unless there was some other evidentiary basis for establishing a Plaintiff’s invocation of the exception.
Next, the Court addressed the admissibility of Plaintiffs’ estimated hours-worked chart attached to their supplemental disclosures. The Court agreed with Absopure that the chart constituted inadmissible hearsay under Rule 801, noting that Plaintiffs did not dispute this characterization or indicate an intent to admit the chart into evidence. Because the chart was hearsay and did not fall under any recognized hearsay exception, the Court ruled the chart inadmissible as evidence at trial. However, the Court stated Plaintiffs could potentially use the chart as a demonstrative exhibit to illustrate evidence properly admitted at trial. If Plaintiffs wished to use the chart for this limited purpose, the Court instructed them to file a motion setting forth the proposed use and supporting authority.
Absopure had argued that Plaintiffs’ expert, Martin Williams, should not be allowed to testify because his expert report summarizing his likely testimony regarding Plaintiffs’ damages relied on their inadmissible hours-worked chart and was based on what they considered “pure speculation.” The Court had agreed with Absopure to some extent, noting that Martin Williams’ intended testimony would lack a proper evidentiary basis at trial.
Plaintiffs had correctly asserted that, according to Federal Rules of Evidence 703, an expert’s opinion did not necessarily need to rely on admissible evidence to be admissible. However, the Courts had discretion under the Federal Rules of Evidence to exclude expert opinion testimony if it was based entirely on speculation. In this case, the expert report of Martin Williams had generated calculations based on (i) the expert’s review of the estimated hours-worked chart and (ii) assumed workdays ranging from 9 to 12 hours. The report had calculated Plaintiffs’ “total unpaid overtime premiums and liquidated damages” based on this estimated hours-worked chart.
The Court had emphasized that expert testimony must have an evidentiary basis to be considered sufficiently reliable and not speculative. Therefore, the Court had determined that it should wait to see what evidence would be presented at trial. If evidence establishing a factual basis was presented, the expert’s testimony might be deemed reliable. At that point, it was considered premature to bar him from testifying.
Held
The Court granted in part and denied in part Defendant Absopure Water Company, LLC’s motion to exclude Plaintiffs from presenting at trial 1) any testimony or evidence related to the Small Vehicle Exception to the Motor Carrier Act, 2) Exhibit A to their Third Supplemental Initial Disclosures consisting of Plaintiffs’ estimated hours-worked chart, and 3) the purported expert testimony of Martin Williams.
The Court has not arrived on an outcome for this case since the remaining issues involved in this case still await resolution.
Key Takeaways:
- Expert opinions must have a reliable factual basis to be admissible. If the facts underlying the opinion are too speculative or unreliable, the testimony must be excluded.
- According to Federal Rules of Evidence 703, an expert’s opinion need not rely on admissible evidence to be admissible. An expert may base an opinion on facts or data in the case that the expert has been made aware of or personally observed. If experts in the particular field would reasonably rely on those kinds of facts or data in forming an opinion on the subject, they need not be admissible for the opinion to be admitted.
- Because the expert’s testimony must have an evidentiary basis to take it out of the realm of speculative testimony and render it sufficiently reliable, the Court must await what evidence is presented at trial. If evidence is presented that establishes a factual basis, the expert’s testimony may well be reliable.
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