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Civil Engineering Expert Witness’ Generic Testimony Deemed Unhelpful

A district judge in Florida decided that a civil engineering expert witness cannot testify about the alleged defects of Knauf drywalls because his testimony was generic.

Defendants Knauf Gips KG and Knauf New Building System (Tianjin) Co. Ltd.’s (“KPT”) are foreign manufacturers accused of constructing defective drywalls that have been installed in homes across the country. Plaintiff Ina Helmick is the former owner of one such home.

Because of the commonality of facts, all federal litigation involving this drywall was designated as a multidistrict litigation and consolidated for pretrial proceedings in the District Court for Eastern Louisiana. Subsequently, the cases in the MDL were remanded and transferred to the relevant district. Plaintiff Ina Helmick’s case was assigned to the District Court for the middle district of Florida.

Defendants sought to exclude two experts, Howard Ehrsam and Shawn Macomber.

Civil Engineering Expert Witness

Howard Ehrsam P.E. is a civil engineer and president of Chinese Drywall Screening, LLC. He has worked in the fields of general contracting, land development, consulting and civil engineering design. He obtained his bachelor’s degree from the University of Florida in Civil Engineering in 1995. Ehrsam is a leading resource and advocate for property owners, contractors, attorneys, and real estate agents.

Want to know more about the challenges Howard Ehrsam has faced? Get the full details with our Challenge Study report.

Construction Expert Witness

Shawn Macomber has a Master’s Degree in Construction Management from Louisiana State University. He has been certified as a Defective Drywall Consultant and Remediator as well as an inspector by several different certifying bodies. He is an ICC Certified Residential Building Inspector and the qualifying party for Healthy Home Solutions, LLC as a Louisiana State Residential Building Contractor.

Discover more cases with Shawn Macomber as an expert witness by ordering his comprehensive Expert Witness Profile report.

Discussion by the Court

Howard Ehrsam

First, Defendants sought to exclude in full the testimony and expert opinion of Ehrsam, a civil engineer and president of Chinese Drywall Screening, LLC. Plaintiff retained Ehrsam to opine on the common effects of Knauf Chinese drywall on the components of homes, including property within the home. According to Defendants, Ehrsam’s general opinions were unreliable, speculative, and otherwise unhelpful to the trier of fact.

Ehrsam Provided Generic Opinions

Ehrsam did not perform an individualized inspection or analysis of Plaintiff’s former property or any drywall allegedly within the property. Instead, he provided generic opinions on the following:

Whether defective Knauf drywall produces gasses and what gasses are emitted;
Whether defective Knauf drywall off gassing causes corrosion in the home and the extent of that corrosion;
Whether defective Knauf drywall causes damage to components in a home and which typical components (wiring, plumbing, a/c, etc.);
Whether defective Knauf drywall causes damage to personal property in the home and which items or contents are affected (computers, televisions, etc.); and,
Explain the difference between defective Knauf drywall and domestic made drywall and the off gassing that has been known to occur by each.

Ehrsam once acknowledged that there were other factors besides defective drywall that can cause corrosion or damage to property or items. In other words, he agreed that he cannot determine whether drywall caused damage in a particular Plaintiff’s home without an inspection.

Ehrsam’s generic testimony will not be helpful to the jury

The Court agrees with Defendants that this generic testimony will not be helpful to the jury considering the Plaintiff will have to prove specific and individual causation and damages at trial. As Defendants put it, “ a general opinion that KPT drywall emits gas and causes corrosion, without any correlation to the drywall or damage in Plaintiff’s property, is unhelpful and usurps the jury’s role as factfinder.” In conclusion, the potential to confuse or mislead the jury substantially outweighs the probative value of the generalized testimony.

Shawn Macomber

Defendants sought to exclude or at least limit the expert opinion and testimony of Macomber, who is a certified Chinese drywall inspector. Macomber inspected Plaintiff’s former property and estimated the cost of remediating the property. According to Defendants, “Macomber’s opinions are not relevant or helpful to the trier of fact because of the application of the economic loss rule” and “Macomber’s inspection and remediation cost opinions are unreliable and speculative.”

The Economic Loss Rule (ELR) is a legal doctrine that prevents parties from recovering economic loss in most tort actions unless the victim has also suffered personal injury or property damage.

Because of the significant limitation on damages under the economic loss rule, Macomber’s opinions on the cost of remediation are irrelevant and unhelpful to the jury.

Because of the significant limitation on damages under the economic loss rule, the Court held that Macomber’s opinions on the cost of remediation are irrelevant and unhelpful to the jury. As Defendants explain, “because Macomber’s report advances no opinion regarding damage to Plaintiff’s ‘other property,’ which is the only damage permitted pursuant to Florida’s economic loss rule, it provides no support for the damages Plaintiff may recover.”

Defendants also sought to exclude Macomber’s opinions and testimony regarding the presence of Defendants’ drywall in Plaintiff’s former home or the causes of damage to that home. Since the alleged flaws Defendants identified as to Macomber’s inspection and identification of the drywall concerned the weight to be given to the opinions and testimony, the Court denied the motion.

Held

The Court granted in part and denied in part the Defendants’ motion to exclude or limit the expert testimony of Howard Ehrsam and Shawn Macomber to the extent discussed above.

Key Takeaways:

Ehrsam cannot attach any degree of certainty to a finding that any uppercase KPT drywall impacted the property in question. In other words, a general opinion that KPT drywall emits gas and causes corrosion, without any correlation to the drywall or damage in Plaintiff’s property, is unhelpful.

Most of the damages Plaintiff seeks to qualify as economic damages are not recoverable in product liability tort claims. However, of these, only damages to ‘other property within the real property’ are recoverable. Macomber’s opinions on the cost of remediation were irrelevant and unhelpful to the jury

Case Details:

Case Caption:	Helmick V. Knauf Gips Kg Et Al
Docket Number:	8:21cv2777
Court Name:	United States District Court, Florida Middle
Order Date:	May 02, 2024

May 3, 2024

Sales Expert Witness’ Opinions Regarding Termination of a Distributorship Agreement Rejected

A district judge in Nevada held that a Sales Expert Witness’ opinions about the termination of a distributorship agreement were nothing more than common sense.

Facts:

Temsa primarily sought redress for Defendant TC Nevada, LLC’s (“TC Nevada’s”) unlawful use and possession of certain motorcoaches manufactured by Temsa.

Temsa is a leading commercial vehicle manufacturer of motorcoaches, buses, and light trucks, which are manufactured in the Republic of Turkey and sold worldwide. Prior to being terminated by Temsa, non-party CH Bus Sales, LLC (“CH Bus Sales”) was the exclusive distributor of Temsa’s motor coaches. In distributing the motorcoaches, CH would owe Temsa, as the manufacturer, approximately $209,000 to $382,000 per motorcoach. TC Nevada is currently in possession of at least seven (7) and as many as thirty (30) motorcoaches that were manufactured by Temsa, but were never paid for by CH Bus Sales. While seeking to collect the unpaid balance from CH Bus Sales, Temsa alleged that the individual defendants, Michael Haggerty, Olga F. Haggerty, and John P. Haggerty all conspired with each other and with Defendant TC Nevada to gain possession of the motorcoaches despite knowing of Temsa’s continued ownership interest in the property.

According to Temsa, neither TC Nevada nor the individual defendants have paid Temsa for the motorcoaches which TC Nevada currently uses in the operation of its shuttle service business in Las Vegas.

Temsa sought to strike the reports and testimony of Defendants’ experts, John Beck and Karl Schulze, whom Temsa contended offered opinions regarding irrelevant subject matters. Temsa further contended Defendants’ experts opined on ultimate issues of law, telling the jury what results to reach. With respect to defense expert John Beck, Temsa contended termination of agreements between Temsa and CH Bus Sales, LLC (“CH”) had no relevance to issues before the Court. Temsa further contended defense expert Karl Schulze’s opinions regarding the exercise of sound business judgment and fraudulent transfer were inadmissible because these opinions pertained to “irrelevant legal doctrines.”

Business Litigation Expert Witness

Karl J. Schulze is a Certified Public Accountant (CPA), a Certified Valuation Analyst (CVA), a Certified Fraud Examiner (CFE), and is Certified in Financial Forensics (CFF) by the AICPA. He has worked with middle-market and Fortune 500 companies on issues relating to corporate governance (he is ISS Certified in Corporate Governance and Directorship), crisis management, strategic planning, insolvency management, acquisition and feasibility analysis, debt restructuring and general management consulting, in addition to conducting fraud investigations and consulting and testifying on litigated matters. Schulze has testified in a broad variety of business-related matters, shareholder disputes, alter ego and corporate governance matters, intellectual property, real estate and employment-related litigation, and has served as consultant and expert in arbitrated and mediated matters. He has testified as expert in deposition and trial, and has qualified in numerous courts and jurisdictions.

Gain a comprehensive understanding of Karl Schulze’s qualifications and casework history with his Expert Witness Profile report.

Sales Expert Witness

John D. Beck has been involved in sales and manufacturing for his entire 40 year career. He has worked for 3 privately owned companies and enjoyed success at each of them.

Get in-depth insights into John Beck’s expert witness experience by requesting his Expert Witness Profile today.

Discussion by the Court

On January 10, 2024, Defendants designated Karl J. Schulze, CPA as an expert witness and John D. Beck as a lay expert witness. Temsa argued that both of them opined on ultimate issues of law.

Beck Does Not Offer Expert Testimony

Beck’s purported expert report is a total of two pages long. The report identifies the two questions Beck was asked to answer, includes a page summarizing the documents Beck reviewed and his experience in the manufacturing and distribution of buses, and ends with two short paragraphs (each two sentences) stating Beck’s opinions.

The Court held that Beck’s conclusions failed to offer any basis, reasons, data or analysis that underlie the opinions reached, in violation of Federal Rule of Civil Procedure 26(2)(B)(i) and (ii).

Beck opines termination of a distributorship agreement would negatively impact (1) the distributor, especially if the manufacturer sells its product directly at discounted prices, and (2) the distributor’s ability to honor any maintenance program in place. That termination of contracts to distribute and maintain a product would negatively impact the party who, before termination, distributed and maintained the product is obvious—again, simple common sense. These opinions are not beyond the knowledge of an average juror.

The Court held that Beck’s opinions will not help the jury understand facts at issue. For this reason, Beck’s opinions did not satisfy the requirements of Rule 702.

Finally, to place the “expert” moniker on Beck’s conclusions risked giving special weight to evidence that is, at best, not clearly tied to the claims raised by Temsa. That is, a review of the Complaint shows there is no dispute that Temsa terminated contracts establishing CH as the exclusive distributor for Temsa’s products. There is also no dispute that CH is not a Defendant in this action, nor is it a third party Plaintiff suing Temsa.

The Complaint does not mention either the existence of a maintenance contract between Temsa and CH or the breach of such agreement. Beck’s testimony does not demonstrably advance a material aspect of the case.

Will Beck’s Testimony be Admissible in his Capacity as a Lay Witness?

Nonetheless, the District Judge will decide at a later date whether Beck’s testimony may ultimately be admissible in his capacity as a lay witness. Although the Court notes above that CH is not a party to this action, Defendant Michael Haggerty is the alleged Chairman of the Board of CH Bus Sales, LLC, and Temsa referenced CH in its complaint. These references do not appear to relate to whether CH could continue to sell Temsa buses or whether CH could “maintain or honor any maintenance programs.”

Instead, Temsa’s allegations relate to who owned the motorcoaches, whether CH paid Temsa for the motorcoaches, whether CH had the authority to sell Temsa motorcoaches, Defendants’ alleged disruption of Temsa’s contractual relations, and Defendants’ retention of the benefit from the motorcoach sales.

Initially, Beck’s testimony seemed to have limited relevance. However, the Court cannot definitively rule out its relevance entirely and thus cannot justify its exclusion. Such a finding is premature and must await a more thorough presentation of evidence during the trial.

Court Limits Expert Opinions Offered by Karl Schulze

Schulze’s expert report offered two opinions each challenged by Temsa. The Court found Schulze’s opinion that Haggerty “exercised sound business judgment” when he paid a debt owed to U.S. Bank rather than a debt owed to Temsa, and did so in compliance with Minnesota law, was an opinion telling the jury what the outcome of this defense should be. The opinion crosses the line from reaching an ultimate issue of fact to stating a conclusion of law.

Schulze’s second opinion listed the elements of a voidable transaction (a fraudulent transfer) under Minnesota statutory law. Schulze then did an “evaluation” of facts applied to each element of the law he quotes. In doing so, Schulze stated that some elements identified for purposes of “determining actual intent” were inapplicable to the instant dispute. Schulze also offered short statements of fact supposedly applicable to the remaining “intent” factors. The Court held that Schulze did no expert analysis of these facts. He merely stated conclusions.

Even assuming Schulze is qualified to offer the opinions he does (as Temsa does not challenge Schulze’s qualifications), there is no discussion demonstrating what specialized knowledge underpins the basis for the conclusions Schulze reached.

Further, case law strongly suggests concluding a party misled another or made misrepresentations on which an opposing party relied is impermissible opinion testimony as it invades the province of the jury by drawing the ultimate inference or conclusion. Importantly, Schulze never offered an opinion regarding fraudulent intent and instead provided a set of shaky opinions regarding factual elements considered when determining whether a fraudulent transfer occurred.

Temsa does not challenge Schulze’s qualifications

Since Temsa did not challenge Schulze’s qualifications to offer these opinions, the Court found opinions applicable to fraudulent intent, attacked by Temsa, was best left to legal argument on the applicability of Minnesota law and attack through cross examination, contrary evidence, and attention to the burden of proof.

Held

The Court struck the expert report submitted by John Beck and decided that whether and to what extent Beck may offer lay opinions required a more complete presentation of evidence that will occur at trial.

The Court struck Karl Schulze’s expert report and testimony, to the extent it addressed the business judgment rule under Minnesota law but denied the request to strike Schulze’s expert report and testimony regarding whether Defendants’ conduct was consistent with a fraudulent transfer under Minnesota law.

Key Takeaways:

Expert opinion must have substance such that it would be helpful to the jury. In other words, it should address an issue beyond the common knowledge of the average layman. Beck’s opinions regarding the termination of contracts to distribute and maintain a product did not satisfy the requirements of Rule 702.

Lay opinion testimony must be helpful to the jury in acquiring a clear understanding of the witness’s testimony or the determination of a fact in issue. The Court cannot conclude Beck’s lay opinions have no relevance whatsoever.

Schulze’s opinion that Haggerty, in fact, exercised sound business judgment meeting the obligations established by law was telling the jury what the outcome of this defense should be. Schulze cannot offer a legal conclusion that would, in sum, take from the jury the job of applying facts to law even if application of the business judgment rule is a proper defense in this case.

Case Details:

Case Caption:	Temsa Ulasim Araclari Sanayi Ve Ticaret, A.S. V. Tc Nevada, Llc Et Al
Docket Number:	2:18cv1738
Court Name:	United States District Court, Nevada
Order Date:	April 30, 2024

May 2, 2024

Life Care Planning Expert Witness Deemed Qualified to Diagnose Plaintiff’s Injuries

A district judge in Missouri allowed a emergency room physician, who also happens to be a certified life care planner, to diagnose the Plaintiff’s injuries and attribute them to the vehicle accident at issue.

This matter arises from a January 2021 vehicular collision. A United States Postal Service (“USPS”) employee, driving a delivery truck, rear-ended a Plymouth Barracuda driven by Plaintiff Steven Golden. In December 2022, Plaintiff filed this lawsuit pursuant to the Federal Tort Claims Act (“FTCA”) against the United States of America. He alleged that he suffered “significant physical injuries” as a result of the collision.

On January 19, 2024, Defendant filed a motion seeking to strike the testimony of Plaintiff’s expert, Mitchell Mullins. Defendant contended the expert’s testimony must be stricken because his report fails to satisfy Rule 26(a)(2)(B) of the Federal Rules of Civil Procedure, and his opinions fail to satisfy the requirements of Rule 702 of the Federal Rules of Evidence.

Life Care Planning Expert Witness

Mitchell C. Mullins began his career in medicine in 1975 as a licensed practical nurse in Joplin, Missouri. He received his bachelor’s degree in Health Sciences from Tulsa University in 1983 and graduated from medical school at Kirksville College of Osteopathic Medicine and Surgery in 1987. While in medical school, he joined the United States Army and served as an active reservist until 1992.

Dr. Mullins completed his residency in emergency medicine at Mount Clemens Medical Center in Mount Clemens Michigan in 1990. He is board certified in emergency medicine and worked full time as an emergency physician in the St. John’s (now Mercy) Hospital system from 1990 until 2011. In 2011, he transitioned to part-time status to acquire Missouri Independent Medical Evaluations and he has been actively performing independent medical evaluations since that time.

In 2013, Dr. Mullins became certified as a Life Care Planner through the University of Florida and the International Commission on Health Care Certification and has been actively authoring Life Care Plans since that time.

Discover more cases with Mitchell C. Mullins as an expert witness by ordering his comprehensive Expert Witness Profile report.

Discussion by the Court

Whether Mullins’ Report Satisfies the Rule 26 Requirements

Defendant contended that Mullins’ report did not contain the basis of, reasons for, and facts or data he considered in forming his opinions that (1) Plaintiff’s injuries were caused by the January 2021 vehicle accident, and (2) Plaintiff would require future medical care. Defendant conceded that Mullins’ report listed the medical records he reviewed and the range of motion tests. However, Defendant contended that Mullins “did not indicate how these records and tests” led to his opinions regarding Plaintiff’s injuries and future care.

In his report, Mullins stated that his “opinions and diagnoses were based on the medical records provided to him” and “the history and physical personally completed by” him. He further represented that his opinions were based “upon the information reviewed as set forth in his report,” which included “medical records, photographs, history from the patient, physical examination, billing, and the resource materials as set forth in his report and life care plan.” According to Mullins, “medical professionals relied upon medical records, patient history, physical examination, and other resources . . . in forming medical opinions as part of the treatment, diagnosis, determining the cause of injuries, extent of injuries, and the future treatment of injuries.”

Based on its review of Mullins’ report, the Court found that the Rule 26(a)(2)(B) requirements had been met. That is, Mullins’ report identified the information he considered in forming his opinions that Plaintiff’s injuries were caused by the vehicle accident at issue in this matter, and that Plaintiff would require future medical care.

Usefulness to Finder of Fact

Defendant maintained Mullins’ report and his trial testimony were not useful to the finder of fact. In support, Defendant stated Mullins’ report, which was rendered in January 2022, is two years old, has not been updated, and since that time, Plaintiff’s leg was amputated as result of an unrelated motorcycle accident. Defendant also argued Mullins’ life care plan was “irrelevant” because Plaintiff will not have surgery, which Mullins recommended.

Upon reviewing Mullins’ report, the Court finds his testimony may be helpful. Rule 702 is satisfied where expert testimony advances the trier of fact’s understanding to any degree.

The Court will consider Mullins’ opinions and testimony, the factual bases and reasons for his opinions, assess his credibility, and afford whatever weight to his opinions as it sees fit.

Dr. Mullins’ Qualifications

Defendant maintained Mullins was not qualified to render his opinions in this matter. More specifically, Defendant asserted Mullins, who was an emergency room physician, was not qualified to diagnose Plaintiff’s injuries, attribute an injury to particular event, or opine on future medical care.

Mullins may qualify as an expert based on his “knowledge, skill, experience, training, or education.” According to Mullins’ curriculum vitae, he received his Doctor of Osteopathic Medicine and surgery in 1987. Between 1987 and 2019, he practiced emergency medicine. Since 2011, Mullins has owned his own business performing independent medical evaluations and life care plans. And since 2012, Mullins has been a certified life care planner through the University of Florida.

Based on the information in Mullins’ curriculum vitae, the Court finds he is qualified to render medical opinions in this matter. The Eighth Circuit has observed “gaps in an expert witness’s qualifications or knowledge generally go to the weight of the witness’s testimony, not its admissibility.”

Reliable Principles and Methodology

Defendant moved to strike Mullins’ testimony because his report “did not bear indicia that it is a product of reliable principles and methodology nor reflect a reliable application of such to the facts of this case.”

More specifically, Defendant argued Mullins (1) “did not factor into his analysis the effect of Plaintiff’s injuries from an unrelated motorcycle accident,” (2) conducted the physical examination of Plaintiff remotely, (3) failed to account for improvement in Plaintiff’s condition, (4) did not provide any support for his conclusion that the January 2021 collision caused injury to Plaintiff’s left shoulder, (5) did not include an analysis of the effect of Plaintiff’s failure to mitigate his injuries or non-compliance with treatment, and (6) failed to address Plaintiff’s pre-existing injuries.

Although Defendant maintained that it questioned the reliability of the principles and methodologies used by Mullins, the examples it cited in support of its argument did not pertain to principles and methodologies.

Instead, Defendant’s examples relate to the factual bases (or lack thereof) in Mullins’ report. As discussed above, “the factual basis of an expert opinion goes to the credibility of the testimony, not the admissibility.” And Defendant will have the opportunity cross-examine Mullins on those issues.

Held

The Court denied Defendant’s motion to strike Plaintiff’s expert Mitchell Mullins’ testimony.

Key Takeaways:

To determine whether a Rule 26 violation is justified or harmless, courts consider several factors including (1) prejudice or surprise to the opposing party, (2) the ability of the party to cure the prejudice, (3) the extent to which allowing the testimony would disrupt the trial, and (4) the moving party’s bad faith or willfulness. Based on its review of Mullins’ report, the Court found that the Rule 26(a)(2)(B) requirements had been met.

The Eighth Circuit has held “the factual basis of an expert opinion goes to the credibility of the testimony, not the admissibility.” If the factual basis or methodology utilized by an expert is disputed, the Court may exclude an expert when the expert’s opinion is “so fundamentally unsupported . . . it can offer no assistance to the jury.” Upon reviewing Mullins’ report, the Court finds his testimony may be helpful considering Rule 702 is satisfied where expert testimony advances the trier of fact’s understanding to any degree.

With regard to reliability and relevancy determinations, courts may consider “whether the theory or technique can be or has been tested,” “whether the theory or technique has been subjected to peer review or publication,” “whether the theory or technique has a known or potential error rate and standards controlling the technique’s operation,” and “whether the theory or technique is generally accepted in the scientific community.” Defendant argued that it questioned the reliability of Mullins’ principles and methodologies. However, the examples provided by Defendant in support of this argument did not actually pertain to principles and methodologies but rather focused on the factual bases (or lack thereof) in Mullins’ report. As discussed above, “the factual basis of an expert opinion goes to the credibility of the testimony, not the admissibility.”

Case Details:

Case Caption:	Golden v. United States
Docket Number:	6:22cv3312
Court Name:	United States District Court, Missouri Western
Order Date:	April 23, 2024

May 1, 2024

Design Engineering Expert Witness’ Product Defect Theory held to be Reliable

A district judge in New Jersey decided that a design engineering expert witness could testify about the alleged design defects of the model in question and the risks and possible outcomes of such design defects.

On August 19, 2016, William Visakay (“Visakay”) was riding his 2007 Craftsman Lawn Tractor in his backyard when it overturned and rolled, causing fuel to spill out and the lawnmower to catch on fire. After the accident, Visakay died from burn injuries. Plaintiff and her expert, Christopher Ryan, argued that there was a design defect in the lawnmower, which caused the fuel tank to become damaged when the lawnmower rolled over. Defendant and their experts claimed that Visakay had failed to properly secure the lawnmower’s gas cap, which caused the fuel to pour out of it and become ignited by a spark from an undetermined source.

The only remaining Defendant, Husqvarna Consumer Outdoor Products N.A., Inc. challenged each of the three criteria required for Ryan’s testimony to be admissible. First, HCOP contended that Ryan was not qualified to opine on the cause and origin of the fire. Second, HCOP argued that Ryan’s methodology was not sufficiently reliable to be admissible. Third, HCOP claimed that Ryan’s opinions did not fit the facts of the case.

Design Engineering Expert Witness

Christopher Ryan received his Bachelor of Science Degree in Mechanical
Engineering, with an emphasis on product design, from Iowa State University. He has over 25 years of experience working with manufacturing companies, including managing prototype testing and ensuring products, including lawnmowers, meet industry safety standards. He also worked at John Deere for 19 years, where he oversaw the testing of new mowers and small tractors.

Get the full story on challenges to Christopher Ryan’s expert opinions and testimony with an in-depth Challenge Study.

Discussion by the Court

Qualifications

HCOP asserted that Ryan was not qualified to opine on the cause and origin of the fire because of his lack of experience with fire investigation. The Court held that HCOP’s argument, asserting that Ryan was not qualified, was unavailing. Ryan possessed the “specialized expertise” necessary to opine on the issues in this case with 20 years of experience designing products and rejecting/approving designs, including specifically with lawnmowers.

He was employed for 19 years with John Deere, where he managed the labs responsible for testing all new John Deere mowers and small tractors. Notably, Ryan worked with other manufacturers to help develop an industry testing standard to validate new plastic fuel tank designs.

Defendant’s other challenges rebuffing Ryan’s qualifications, such as its argument that other witnesses with experience in fire investigation were unable to form a reliable conclusion about the cause of the fire, were unpersuasive. The Court was satisfied that with Ryan’s extensive background and experience with lawnmowers, Ryan was qualified to provide expert testimony in this case as to the alleged defect of the lawnmower and, relatedly, the cause of the fire.

Henceforth, Ryan is qualified to opine about the alleged design defects of the lawnmower and the risks and possible outcomes of such design defects, including the flammability and explosive nature of the products.

Reliability

HCOP contended that Ryan’s methodology was not sufficiently reliable. Specifically, HCOP argued that (i) Ryan lacked sufficient facts and data to form his opinions; (ii) Ryan evaluated his product defect theory using scientifically unreliable testing; and (iii) Ryan’s theory that the fire was caused by a product defect relied on no methodology.

Ryan relied on sufficient facts and data to form his opinions

First, as described in his expert report, Ryan relied on sufficient facts and data to form his opinions: he reviewed photos from the scene, police reports, medical reports, sources with information about the mower at issue (such as the Craftsman Model Operator’s Manual) and other documents from the case. He also inspected the burned mower and summarized his findings, performed tests with exemplar mowers, and conducted a three-dimensional virtual analysis.

Ryan’s employed methodology is sufficiently reliable so that it will aid the jury in reaching accurate results

Second, Ryan’s employed methodology is “sufficiently reliable so that it will aid the jury in reaching accurate results.” After inspecting the burned mower, Ryan hypothesized that the fuel tank “would have been crushed” and that “pressurized fuel would pour out uncontrollably” due to the observed damage to the crossmember. Then, to prove his theory, he purchased and examined exemplar mowers and performed tests including a static side roll over test, a mild dynamic side roll over test, and a rearward/right side roll over test. These tests are summarized in Ryan’s expert report, and yielded results that were allegedly consistent with his inspection of the burned mower. Ryan also conducted an “engineering analysis,” which included investigation of a three-dimensional model.

HCOP also contended that Ryan’s testing did not yield the damage that he expected. Ryan’s conclusion from his engineering analysis, however, stated the opposite: “The crossmember can crush the fuel tank during impact with the ground.” This was consistent with the hypothesis he formed after his examination of the burned mower. HCOP’s arguments concerned the validity of Ryan’s conclusions—which is a determination for the jury to make after the benefit of cross-examination.

Ryan’s fire causation opinions result primarily from the same methodology detailed above

Ryan’s sufficiently reliable methodology of determining the defect in turn led to his conclusions about the fire. Notably, the Operator’s Manual explicitly stated: “Gasoline is extremely flammable and the vapors are explosive,” which reinforced Ryan’s conclusions that fuel contacting the hot engine could result in a fire. The Court found Defendant’s argument, that Ryan did not follow the National Fire Protection Association (“NFPA”) fire investigation standard, unpersuasive; NFPA standards are “merely a guide to assist fire investigators, and their provisions are nonmandatory.”

Fit

HCOP challenged the fit between Ryan’s proffered testimony and the facts of the case. Specifically, it asserted that Ryan’s opinions were not applicable to the facts of the case and did not analyze “what damage a fuel tank could experience in an overturn.”

Plaintiff has demonstrated multiple ways in which Ryan’s opinions will assist the jury. Ryan’s opinions speak to the purported design defects of the Craftsman model, which Plaintiff directly relies on for her claims. Ryan opines on the risks related to certain design choices of the lawnmower, and whether there were reasonable alternative designs that could have reduced those risks. Therefore, Ryan’s “specialized knowledge will help the trier of fact to understand the evidence or to determine a fact in issue,” thus allowing for that testimony’s admissibility.

HCOP filed a motion for summary judgment concurrently with its motion to exclude Ryan’s testimony. The Court noted that genuine issues of material fact existed that precluded summary judgment considering Ryan and Defendant’s experts will present competing theories of the accident in this case.

Held

The Court denied HCOP’s motion to exclude Christopher Ryan and HCOP’s motion for summary judgment.

Key Takeaways:

The Third Circuit reads the qualification requirement broadly and interprets it liberally—a “broad range of knowledge, skills, and training qualify” as specialized expertise. Ryan has over 20 years of experience designing products and rejecting/approving designs, including specifically with lawnmowers.

Ryan’s employed methodology was “sufficiently reliable so that it will aid the jury in reaching accurate results.” His tests yielded results that were allegedly consistent with his inspection of the burned mower. Ryan also conducted an “engineering analysis,” which included investigation of a three-dimensional model.

With respect to fit, the expert’s testimony must be relevant for the purposes of the case and must assist the trier of fact by establishing a valid scientific connection to the pertinent inquiry. Plaintiff has demonstrated multiple ways in which Ryan’s opinions will assist the jury.

Case Details:

Case Caption:	Visakay V. Sears Roebuck And Co. Et Al
Docket Number:	2:17cv11570
Court:	United States District Court, New Jersey
Order Date:	April 29, 2024

April 30, 2024

Court Bars Intellectual Property Expert Witness for Opining on Straightforward Matters of Law

A district judge in New York held that the report of a intellectual property expert witness spoke to straightforward areas of the law where juries did not require assistance.

Plaintiff Medical Depot, Inc. and Defendant Med Way US, Inc. are both manufacturers of medical products, including specially designed medical air mattresses. Medical Depot, Inc. began selling various air mattress models using the descriptors “Med-Aire” and “Med Aire” in 2007. Plaintiff contended that its use of the terms “Med-Aire” and “Med Aire” since 2007 was substantial enough to merit trademark protections, while Defendant argued the opposite.

Defendant alleged that it began selling air mattress medical products using the name “MEDAIR” as early as April 1, 2019. On December 10, 2019, Defendant filed United States Trademark Application Ser. No. 88/721,827, which matured into Registration No. 6,116,976, which covered use of the MEDAIR mark for International Class 10 medical products, namely “air mattresses with pump, for medical purposes.”

Plaintiff argued that Defendant’s use of the MEDAIR mark infringed on Plaintiff’s unregistered “Med-Aire” mark, which Plaintiff argues had gained trademark protection despite its lack of registration with the USPTO. Plaintiff also brought claims for unfair competition and the cancellation of Registration No. 6,116,976.

Motion to exclude

During the course of this action, Plaintiff retained Jeremy N. Sheff to produce the Sheff Report and to provide testimony in regard to the subject matter of the Sheff Report if called to do so during pretrial proceedings.

The Sheff Report purported to opine as to three issues:

The first is whether [Medical Depot]’s marketing and sales of products under its claimed MED-AIRE trademark establish “use in commerce” under the Lanham Act sufficient to establish priority of right as of July 13, 2018. This is the date currently claimed by Defendant Med Way US, Inc. (“Med Way”) as the date of its first use in commerce of the mark MEDAIR, used on or in connection with the goods and services “air mattresses with pump, for medical purposes” in International Class 10, which is the subject of United States Patent and Trademark Office (USPTO) Trademark Registration No. 6,116,976, Serial No. 88/721,827 (“the ‘976 Registration”).

The second is whether the use by [Medical Depot] of its claimed MED-AIRE trademark on its products and associated sales materials constitutes “use as a mark” or “trademark use” under the Lanham Act as interpreted by the federal courts and the USPTO.

The third is whether alternative presentations of [Medical Depot]’s claimed MEDAIRE trademark both with and without a hyphen and with or without an intervening space defeat its claim to priority.

Defendant argued that the Sheff Report is “a legal brief masquerading as an expert report” and moved to exclude the same. Plaintiff argued that any exclusions made to Sheff’s report or testimony should correspondingly apply to Defendant’s expert, Francis Duffin.

Intellectual Property Expert Witnesses

Jeremy N. Sheff is a tenured Professor of Law at St. John’s University School of Law, where he also serves as the Founding Faculty Director of the St. John’s Intellectual Property Law Center. Sheff has taught Trademark Law and other courses at St. John’s University School of Law since 2008. He conducted doctrinal, theoretical, and empirical research on intellectual property law, with a particular focus on trademark law.

Get the full story on challenges to Jeremy N. Sheff’s expert opinions and testimony with an in-depth Challenge Study.

Francis Duffin is a Partner in the Corporate Department and Chair of the Trademark Practice Group at Wiggin and Dana LLP. He has extensive experience in domestic and international trademark law and in trade name and domain name matters, stemming from his foundation as a Trademark Examining Attorney with the U.S. Patent and Trademark Office.

Fortify your strategy by reviewing a Challenge Study detailing grounds for excluding Francis Duffin’s expert testimony.

Discussion by the Court

The Sheff Report

Defendant challenged only those portions of the Sheff Report and related testimony that: “(a) opine on what constitutes the relevant law and the significance of such law, (b) apply such supposed relevant law to the facts, (c) proffer legal opinions, (d) propound legal conclusions, and (e) offer expert testimony directed to the matters of consumer psychology, marketing, and the commercial impression purportedly created by the Med-Aire phrase on the relevant consuming public of medical air mattress products.”

Med Way US, Inc. characterized those categories of disputed topics as encompassing the entirety of the Sheff Report—noting, for example, that “Sheff admitted at the outset of his report that he was retained solely to opine on the ultimate legal issues in this case”—rendering the Defendant’s challenge as one against the Sheff Report as a whole.

The Defendant argued that Sheff usurped the role of the factfinder and of the Court in his expert report because his testimony as an expert on trademark usage under the Lanham Act concerned a subject that “juries (and factfinders) simply do not require expert assistance to competently assess.” The Defendant contended that the Sheff Report spoke to straightforward areas of the law where juries did not require assistance.

The Court, citing Highland Capital Management, L.P. v. Schneider, 551 F. Supp. 2d 173, 181 (S.D.N.Y. 2008), held that the Sheff Report’s subject matter—use in commerce, trademark usage, and the issue of alternate presentations—were straightforward matters of law that a jury can ably decide without the assistance of an expert.

In other words, the Court excluded the Sheff report because it solely concerned “matters which a jury is capable of understanding and deciding without the expert’s help.”

Sheff’s Testimony

Defendants argued that, in addition to barring the Sheff Report, the Court should preclude Sheff from testifying as to the same questions raised in the Sheff Report. Because the Court found that the subject matter of the Sheff Report solely concerned “lay matters which a jury is capable of understanding and deciding without the expert’s help,” the Court correspondingly found that Sheff may not testify to the same issues raised in the Sheff Report at trial.

The Duffin Report

Plaintiff argued that if the Court excludes Sheff’s testimony and the Sheff Report, the Court should also exclude the corresponding testimony by Defendant’s rebuttal expert, Francis Duffin (“Duffin”). Duffin’s testimony was offered solely to rebut Sheff’s testimony.

Defendant contended in response that the Court should preclude Plaintiff from seeking exclusion of the Duffin Report because Plaintiff first raised this argument in its opposition papers and failed to file a motion in limine to exclude the report by the Court’s November 2, 2023 deadline.

Federal Rule of Civil Procedure 26 defines rebuttal expert testimony as testimony ‘intended solely to contradict or rebut evidence on the same subject matter identified [in the expert testimony offered] by another party.’ ‘[T]he [rebuttal] expert’s testimony should be to ‘explain, repel, counteract or disprove evidence’ presented by the expert to whom he or she is responding.

The Court held that Duffin’s rebuttal report “must also be excluded as irrelevant,” as its sole relevance at trial was to rebut now-excluded expert testimony. That Plaintiff did not file a motion in limine to exclude the Duffin Report does not change this outcome.

Held

The Court excluded the Sheff Report and any testimony by Sheff at trial concerning the subject matters of the Sheff Report. In light of the exclusion of the Sheff Report and related testimony, the Duffin Report is likewise excluded as irrelevant.

Key Takeaways:

While the expert can make factual conclusions that embrace an ultimate issue that the fact-finder is yet to decide, the expert cannot give testimony stating ultimate legal conclusions.

An untrained layman is perfectly qualified to assess the strength or distinctiveness of a mark and/or the likelihood of consumer confusion, both of which the Court evaluates from the perspective of the consuming public.

Defendant hired rebuttal expert Francis Duffin to explain, repel, counteract or disprove evidence’ presented by Jeremy Sheff. In other words, Duffin Report would have no basis for admission without Sheff.

Case Details:

Case Caption:	Medical Depot, Inc. V. Med Way Us, Inc.
Docket Number:	2:22cv1272
Court:	United States District Court, New York Eastern
Order Date:	April 26, 2024

April 29, 2024

Trade Secrets Expert Witness’ Testimony Based on his own Experience Admitted

A district judge in Texas admitted the testimony of a trade secrets expert witness, taking into consideration his extensive and specialized experience.

Plaintiff BHI, a leader in the energy industry providing project management and staffing support to the nuclear, fossil, wind, hydro, and government energy markets accused the Defendants KVP Energy Services, Dustin Coble, Welborn “Ross” Glover, Roy Glover, and Shelby Walker of misappropriating BHI’s trade secrets by using the trade secrets in conjunction with their work at KV during their BHI employment. In other words, they allegedly committed corporate espionage, stole confidential information, trade secrets, and equipment from BHI, and wrongfully interfered with BHI’s customers and contractual relations.

On August 3, 2023, the Defendants designated James Pooley as an expert witness to offer opinions concerning whether BHI took reasonable measures to protect its alleged trade secrets. Pooley’s initial report did not include any opinions as BHI was yet to identify the purported trade secrets that it alleged were misappropriated by any Defendant(s). Pooley supplemented his report on September 18, 2023 and explained that despite BHI not identifying with particularity the purported trade secrets that it alleged were misappropriated by any Defendant(s), it had provided some limited discovery comprising information relevant to his assessment of whether BHI had implemented reasonable measures to protect those alleged trade secrets.

Although discovery closed on November 2, 2023, the parties stipulated to extend the deposition deadline beyond the close of discovery.

Pooley was deposed on November 13, 2023.

Trade Secrets Expert Witness

James Pooley has devoted the majority of his career to trade secret protection and management. Over the decades, he has gained extensive experience in designing and managing systems for trade secret protection. He has published numerous books regarding trade secrets, including his 800-page treatise “Trade Secrets,” which he has continuously updated since its publication in 1997.

In 2015, Pooley published a business book, Secrets: Managing Information Assets in the Age of Cyberespionage, which focuses on managing information asset security—the same topic he has been asked to opine on here. On the same subject, he has also written the introductory chapter (“Information Security in the Modern Enterprise”) for the Computer and Information Security Handbook Third Ed. (Morgan Kaufmann, 2017). He has published numerous articles and regular newsletters regarding trade secrets. He has taught trade secret law and litigation at law schools, including several years at Santa Clara University in the 1980s and 14 years at the University of California at Berkeley.

Pooley has also taught trade secret and patent law and procedure to state and federal judges. He was the founding Chair, and is now Chair Emeritus, of the Sedona Conference Working Group on Trade Secrets. He also co-chairs the International Chamber of Commerce’s Trade Secret Task Force; in this role, he oversaw the publication of a 2019 report, Protecting Trade Secrets, which provides guidance to businesses on what measures they should take to benefit from the protections afforded to them under US and EU law. Pooley has previously served as President of the American Intellectual Property Association and as Chairman of the National Inventors Hall of Fame.

To learn about other cases where James Pooley has been involved as an expert witness, order an Expert Witness Profile report.

Discussion by the Court

Plaintiff BHI Energy I Power Services LLC filed a motion to strike the expert report and exclude the testimony of James Pooley.

BHI argued that (1) Pooley’s opinions invaded the province of the fact finder, (2) Pooley had failed to demonstrate that his opinions and testimony were based on reliable methods, (3) Pooley’s opinions were based on insufficient facts, and (4) Pooley had failed to provide all materials and facts that he considered in forming his opinion.

On December 5, 2023, Pooley supplemented his report a second time. Specifically, he supplemented his report to incorporate additional information not available until after his first supplemental report.

Pooley’s second supplement report is his first proper expert designation

BHI added a new argument: it contended Defendants had not properly designated Pooley until December 5, 2023, when Defendants disclosed Pooley’s second supplemental report. The Court agreed and, in a separate Memorandum Opinion and Order entered that day, granted BHI’s motion to designate an expert to rebut Pooley’s second supplemental expert report and testimony. BHI further contended that this second supplemental report had been disclosed well past the August 3, 2023 deadline and suffered from the same flaws as the tentative, first supplemental report that had been BHI’s focus in the opening motion to strike.

A court generally will not consider arguments raised for the first time in a reply brief.

But the Court will exercise its discretion and consider the new arguments here because Pooley’s expert report has been a moving target. Because of the parties’ discovery disputes, Pooley has offered no opinions to tentative opinions to complete opinions. And the Defendants designated the second supplemental report with Pooley’s complete opinions while the motion to strike was pending.

According to Rule 26, the tentative, first supplemental report is not a proper expert report because it is not a “complete” statement of Pooley’s opinions. Were that all that Defendants had produced for Pooley, his reports and testimony would be subject to being stricken.

But Pooley’s second supplemental report is complete, and BHI does not challenge it as untimely – at least not beyond noting that his proper designation was first made months after the Court’s deadline.

Pooley’s opinions do not invade the province of the finder of fact

BHI contended that Pooley can testify as an expert to the measures one may take to protect trade secrets but cannot reach a conclusion as to whether BHI’s measures were reasonable because this is left for the finder of fact to determine.

The Court could not agree. BHI explained that “a determination of whether or not a party’s measures to protect its trade secrets were reasonable to guard its secrecy is a fact question.” Were it a question of law, BHI might have a winning argument.

Since experts can give their opinions on ultimate issues, the Court found that Pooley may permissibly do so here to assist the trier of fact in understanding the evidence or determining a factual issue.

Defendants have shown that Pooley’s methods are reliable

BHI asserted that Defendants provided no support as to the reliability of the methods which Pooley utilized in forming his opinions.

And, Defendants argued, “BHI did not deny the reliability of the publications Pooley authored or co-authored that contributed to the lens of expertise through which he viewed the case materials” and “did not cite any authority in support of its dubious notion that an accomplished and widely sought-out expert in the field was not entitled to rely upon his own scholarly or professional publications in rendering an opinion.”

Rule 702 did not prohibit an expert from reaching an opinion based on the expert’s experience. A witness’ experience, studies and education, combined with a review of the relevant materials can provide a reliable basis for expert testimony.

The Court found that Defendants had met their burden to show that Pooley’s expert opinion, based on his experience, training, research, scholarship, and actual practice in the field of trade secret protection, reflected a reliable application of the principles and methods that he explained he had applied to the facts of the case.

Pooley’s opinions are based on sufficient facts

BHI argued Defendants had not shown that Pooley’s testimony was based on sufficient facts or data because Pooley had not spoken with any representative of BHI regarding the measures taken by BHI to protect its trade secrets and had only interviewed two former BHI employees. In doing so, he had not discussed the actual measures that BHI was taking to protect its trade secrets.

For the reasons that Defendants persuasively explain, Pooley considered sufficient facts and data through, among other sources, deposition testimony.

Pooley sufficiently disclosed facts and data considered in forming his opinions

When Pooley supplemented his report a second time, he incorporated additional information that was not available until after his first supplemental report, including the transcripts of nineteen depositions, BHI’s supplemental interrogatory responses, and supplemental document production.

BHI describes these as only “generic statements,” complaining that “Pooley’s report did not disclose exactly what Pooley looked at and considered” to enable BHI to know “what exactly he considered in forming his opinions,” and asserted that “BHI cannot know what exactly Pooley considered without access to his file.” But BHI complained, at bottom, not of deficiencies in listing the sources on which Pooley relied but in Defendant’s failing to produce all documents and facts that Pooley considered in forming his expert opinions. The Court held that it was grounds for a motion to compel, not a motion to strike an expert’s opinion or testimony.

Held

The Court denied the Plaintiff BHI Energy I Power Services LLC’s motion to strike the expert report and exclude the testimony of James Pooley.

Key Takeaways:

For expert testimony on topics that lack “the exactness of hard science methodologies,” courts should consider factors such as the expert’s “professional experience, education, training, and observations.”

Experts can give their opinions on ultimate issues. Pooley may permissibly do so here to assist the trier of fact in understanding the evidence or determining a factual issue.

Case Details:

Case Caption:	Bhi Energy I Power Services Llc V. Kvp Holdings Llc Et Al
Docket Number:	3:22cv1981
Court Name:	United States District Court, Texas Northern
Order Date:	April 24, 2024

April 26, 2024

Accounting Expert Witness’ Opinions on Due Diligence Procedures Admitted

A district judge in Mississippi held that the accounting expert witness was more than qualified to testify about the due diligence requirements in the stock purchase agreement in question.

Facts of the case:

Casey Morgan (“Morgan”) and Jimmy Ward (“Ward”) (collectively “Plaintiffs”) previously owned and operated Bigfoot Land Services, Inc. (“Bigfoot” or “the company”), an Oklahoma-based land services company. The Plaintiffs had a long-standing business history with the Defendants, specifically, Mr. Joseph Logan Sewell, Jr. (“Sewell”)—and in approximately 2021, the parties began discussing Sewell’s purchase of Bigfoot. The culmination of those negotiations was a Purchase and Sale Agreement dated June 3, 2022 (“Purchase and Sale Agreement” or “Contract”), where the Plaintiffs sold the entirety of their shares of stock in Bigfoot to Sewell Investments, LLC, Logan N. Sewell, and Colorado Buck Family, LP. The price tag for this stock purchase totaled Two Million Seven Hundred Seventy Thousand One Hundred Forty and 96/100 Dollars.

After the acquisition, the Defendants realized that Bigfoot was operating at a loss and subsequently mailed a letter dated October 7, 2022, alleging that the Plaintiffs fraudulently misrepresented Bigfoot’s valuation and demanding that the Plaintiffs “rescind the Purchase and Sales Agreement and return all exchanged considerations on or before October 14, 2022.”

The Plaintiffs commenced this action against the Defendants on November 4, 2022, in the United States District Court for the Southern District of Mississippi, intending to enforce the Agreement.

They asserted that the Defendants breached the Agreement by failing to pay the Plaintiffs $85,000 for work Bigfoot performed prior to the sale and making purchases on the company credit card under Morgan’s credit without authorization. The Plaintiffs further contended that the Defendants defaulted on the Promissory Note executed in Ward’s favor and repudiated the Agreement with their demand to rescind the Agreement via the Demand Letter dated October 7, 2022.

Motion to exclude

The Plaintiff’s retained expert Westley “Wes” Winborne intended to testify that the Defendants did not perform relevant tasks in order to validate that the Plaintiffs’ financial records could be relied on.

The Defendants contended that Winborne’s testimony had to be based on not only experience but also some reliable, objective methodology. The Defendants also alleged that Winborne’s testimony would have been unfairly prejudicial and would have misled the jury because the testimony improperly placed a legal duty upon the Defendants that was not recognized under Oklahoma law.

It was undisputed that Winborne’s opinions did not cite to any peer-reviewed publications, potential rates of error, or controls used. Nor did he appear to have considered alternative theories in reaching his opinion on the due diligence procedures. However, his procedures could be tested.

Winborne’s relevant field is that of providing accounting services in the sale and purchase of a company, including “litigation support, contract costing, strategic planning and related services.” Winborne submitted that he employed the same kind of data and the same methodology as he had in assisting clients in the sale and purchase of similarly situated construction businesses.

Accounting Expert Witness

Wes Winborne is the managing partner of HORNE’s construction group where he offers financial guidance and advisory services to the construction industry.

Wes joined the firm in 2000 and has more than 20 years of experience providing audit, tax and client advisory services to contractors. He has served on the boards of various local and national construction associations.

Wes received his Bachelor of Accountancy and his Master of Accountancy from Mississippi State University.

To learn about other cases where Wes Winborne has been involved as an expert witness, order an Expert Witness Profile report.

Discussion by the Court

Is Winborne qualified?

According to Winborne’s Expert Witness Report, Winborne is a CPA with “over 20 plus years of experience providing audit, accounting and tax services to numerous small and medium sized businesses and their owners.”

These services included “litigation support, contract costing, strategic planning and related services.” Winborne also testified that he has provided services in transactions concerning the purchase and sale of construction businesses on approximately 80 different occasions.

The Defendants argued that despite this experience, Winborne’s theories were based on what Winborne would have done and not based on objective and reliable methodology.

Having considered the parties’ briefs on the qualifications of Winborne, the Court concluded at this stage that pursuant to Rule 702 he appeared to be qualified to render his opinions on the relevant due diligence performed in a stock purchase based on his education as well as his experience, skill, and knowledge gained from his role as a managing partner of a construction accounting firm.

Is Winborne’s testimony relevant and reliable?

In his report, Winborne laid out the due diligence procedures, based on his 20 years of experience as a certified public accountant and his review of financial documents provided by the Plaintiffs in relation to this matter.

The Defendants’ objections to Winborne’s testimony concerned the credibility of his conclusions and the level of certitude of the procedures on which he relied. The Defendants further argued that Winborne’s testimony would impose a legal duty to perform due diligence not recognized by Oklahoma law.

Upon reviewing the Expert Report, the Court was not convinced that this was the case; instead, it appeared that Winborne was only describing the due diligence procedures he performed, including the kinds of data and methodologies he relied on, in his day-to-day business, as he did when deriving his opinions in this case.

The Court held that Winborne’s opinions were consistent with the facts of the case.

The agreement included a clause indicating that the Defendants agreed to perform due diligence prior to the purchase and that the Plaintiffs would provide full access to Bigfoot’s books and records to assist in the due diligence process. Winborne is a certified public accountant with years of experience in the purchase and sale of similarly situated construction businesses. The very nature of Winborne’s testimony involved the due diligence he would have performed in his day-to-day business as the managing partner of a construction accounting firm. Accordingly, the Court concluded that Winborne’s opinions on due diligence procedures were relevant and reliable in this matter.

Held

After reviewing the Defendants’ arguments, the applicable law, and the evidence the Defendants sought to exclude, the Court found that Winborne’s proposed testimony appeared to be sufficiently relevant and reliable pursuant to Rule 702. Thus, the Court denied the Defendants’ motion to exclude the testimony of the Plaintiff’s expert Westley “Wes” Winborne.

On January 23, 2024, both parties had filed dueling motions for partial summary judgment. The Plaintiffs’ allegations rested on the Defendants’ alleged breach and anticipatory repudiation of the Agreement. The Plaintiffs further averred that the Defendants failed to assert valid fraud claims to survive summary judgment. The Defendants’ Motion sought rescission of the Agreement, contending that the Plaintiffs had committed fraud by offering alleged materially false representations prior to the agreement. The Court denied both motions for partial summary judgment.

Key Takeaway:

An expert’s testimony “must be relevant, not simply in the sense that all testimony must be relevant, but also in the sense that the expert’s proposed opinion would assist the trier of fact to understand or determine a fact in issue.” Winborne is a certified public accountant with years of experience in the purchase and sale of similarly situated construction businesses. The very nature of Winborne’s testimony involves the due diligence he would perform in his day-to-day business as the managing partner of a construction accounting firm.

Case Details:

Case Caption:	Morgan Et Al V. Sewell Et Al
Docket Number:	5:22cv89
Court Name:	United States District Court, Mississippi Southern
Order Date:	April 24, 2024

April 25, 2024

Credit Reporting Expert Witness’ Opinions Based on his Experience And Research In Understanding Credit Score Risk-Analysis Admitted

A district judge in Florida admitted the opinions of a credit reporting expert witness after ruling that his opinions were an application of industry standards to facts that, if proven, might have helped demonstrate the satisfaction of Fair Credit Reporting Act standards by implication.

Facts of the Case

Plaintiff, Pablo Antonio Garcia (“Garcia”), as the owner of Kandela Productions Inc. (“Kandela”) and Real Rebate Realty, LLC (“Real Rebate”), entered into three loan agreements with Synovus pursuant to which Synovus loaned money to his companies and those companies were obligated to repay Synovus (the “Business Loans”).

Beginning on January 29, 2021, and continuing through May 18, 2021, Garcia received notice that his Business Loans were in default and that, as a result thereof, Synovus was exercising its right to accelerate the remaining unpaid amounts due under the Business Loans.

In accordance with Synovus’s internal procedures and the default provisions of the LOC Agreement, on August 24, 2021, Synovus elected to charge off all loans encompassed in Garcia’s loan relationship with Synovus, including the Subject Account.

This case involves Garcia’s disagreement with Synovus’ decision to charge off Garcia’s account with Synovus; Garcia’s disputes as to the accuracy of such charge offs as reflected on his credit reports; and Synovus’ proper investigation and verification that, in fact, Garcia’s subject personal account was charged off.

Defendant Synovus Bank’s expert John Ulzheimer offered three general opinions in his expert report: Firstly, consumers can default on loans even if they’ve never missed a payment. As such, reporting a charged off loan to a credit reporting agency as a ‘charge off’ does not constitute incorrect information. Secondly, the Bank’s investigation responses to Garcia’s credit reporting disputes regarding the subject account were appropriate and in line with industry standards and practices; and Garcia did not experience the credit related damages as alleged.

Garcia argued that each of these opinions were impermissible for various reasons and hence outside the scope of Federal Rule of Evidence 702.

Credit Reporting Expert Witness

John Ulzheimer is the President of The Ulzheimer Group, LLC and Founder of www.creditexpertwitness.com. He specializes in credit reporting, credit scoring and identity theft.

He is twice FCRA certified by the Consumer Data Industry Association (the trade association of the credit reporting agencies) and has over 32 years of experience in the consumer credit industry including positions with Equifax Credit Information Services (6 years), Fair Isaac, which is the inventor of the FICO® credit scoring system (7 years), Credit.com (6 years), and years of concurrent work with a number of consumer credit related companies.

A nationally recognized expert, Ulzheimer currently is or was the credit blogger for the New York Times, Mint, CreditSesame, CreditSimple, CreditVersio, Zillow, JD Byrider Systems, Credit.com, SmartCredit, VantageScore Solutions, The Simple Dollar and the National Foundation for Credit Counseling. He has authored or coauthored numerous educational materials on the subject of consumer credit.

To learn about other cases where John Ulzheimer has been involved as an expert witness, order an Expert Witness Profile report.

Discussion by the Court

Opinion One

Garcia first argued that Opinion One consisted of impermissible legal conclusions about an ultimate issue because it stated that “reporting a charged off loan to a credit reporting agency as ‘charge off’ did not constitute inaccurate information.” Garcia pointed out that accuracy or inaccuracy is a threshold issue under the Fair Credit Reporting Act (“FCRA”), 15 U.S.C. § 1681s-2(b). He consequently maintained that the aforementioned statement “usurped the roles of the Court and the jury.”

While an expert cannot opine on ultimate issues of law, they “may offer their opinion as to facts that, if found, would support a conclusion that the legal standard at issue was satisfied.”

Ulzheimer, instead of opining that the Bank’s reporting was accurate under the FCRA, opined that the Bank’s reporting was not factually “inaccurate” or “incorrect” under industry standards provided by the Consumer Data Industry Association’s Credit Reporting Resource Guide (“CRRG”). The Court is capable of clearing up any jury confusion regarding the relevant meaning of “accuracy” by properly instructing them as to that term’s meaning under the FCRA.

The Court also found fault with Garcia’s second argument—that Opinion One will confuse the jury by usurping the Court’s authority to define the applicable legal standards. The fact that Opinion One failed to address whether the Bank’s reporting was misleading (a component of FCRA accuracy) provided Garcia with ammunition for cross-examination. It was not grounds for exclusion under Daubert.

Opinion Two

Legal Conclusions

Garcia contended that, like Opinion One, Opinion Two contained impermissible legal conclusions about an ultimate issue. Specifically, Garcia averred that it was improper for Ulzheimer to conclude that the Bank’s investigations of Garcia’s credit reporting disputes were ‘appropriate and in line with industry standards and practices.’ Garcia noted that this was typically a question for the jury, and that Ulzheimer’s reasoning was circular.

As an expert with significant experience, Ulzheimer was allowed to address whether the Bank’s ‘procedures matched industry standards’ as long as ‘he dissected the basis for his knowledge of industry standards, explained how he applied his experience to the facts, and how such application yielded his opinion.

Ulzheimer accomplished all these things without attempting to offer legal conclusions concerning “reasonableness” under the FCRA. Of course, the Court recognized that certain aspects of Opinion Two may be circular in nature. This, however, is another matter to be addressed by robust cross-examination.

Reliability

Garcia next argued that Opinion Two was unreliable because it failed to account for, or ignored, contradictory facts in evidence. Garcia pointed to Ulzheimer’s failure to address the deposition of William Manning as well as data discrepancies contained within the record.

Ulzheimer (an expert with over thirty years’ experience in the consumer credit industry) explained that, as a former employee of Equifax, FICO, and Credit.com, he “worked with, helped train, and supervised employees on processes and procedures involved in credit reporting, credit report dispute resolution, Fair Credit Reporting Act compliance, credit score model design and development, and consumer credit risk management.”

Ulzheimer applied this experience, and as well as his intimate knowledge of the Credit Reporting Resource Guide, to review a number of pertinent documents surrounding Garcia’s charge-off. This review of factual evidence led Ulzheimer to conclude that “there was simply no reason to believe that Garcia was not liable for the subject account” and that the charge off was proper. Accordingly, Ulzheimer opined that the Bank’s verification of the charge off to credit reporting agencies must have been technically accurate and in line with industry standards because the subject account was itself properly charged-off.

The Court held that Ulzheimer’s failure to consider the Manning Deposition and other tangential documents did not undermine the reliability of Opinion Two under Rule 702 or suggest that Ulzheimer’s experience was inadequate. It was important to note that Ulzheimer was not offering a legal opinion on whether the Bank’s investigation was ‘reasonable’ under the FCRA. Instead, his opinion was an application of industry standards to facts that, if proven, might have helped demonstrate the satisfaction of FCRA standards by implication.

Opinion Three

Qualifications

As previously mentioned, Opinion Three stated that Garcia “did not experience the credit related damages as alleged.” Garcia offered three arguments for the exclusion of this opinion: (1) Ulzheimer is unqualified to make this opinion; (2) Ulzheimer has no recognizable methodology in formulating this opinion; and (3) Ulzheimer relies on speculation, making this opinion unreliable.

The Court held that Ulzheimer is undoubtedly the type of person who should or could testify to the thought process of creditors who were evaluating Garcia’s mortgage and loan applications. As previously noted, Ulzheimer has over thirty years’ experience in the consumer credit industry. And, in his first four years at “FICO (formerly known as Fair Isaac Corporation),” Ulzheimer taught “trade associations, large national mortgage lenders, Fannie Mae, and Freddie Mac how FICO scoring worked, how consumer risk changed as deal variables changed, and how to educate their home-buying customers on the importance of solid credit management.”

His lack of experience in making mortgaged-based credit assessments himself did not render him unqualified. Nor did his apparent failure to specifically address non-qualified mortgages.

Lack of Scientific Methodology

Moreover, Ulzheimer’s lack of scientific methodology was also no reason to exclude Opinion Three on the basis of reliability. Courts have found that, where an expert’s testimony is “based on his experience and research in FCRA matters[,]” the expert’s testimony may be reliable even where “‘his method is simply an application of his experience with and understanding of the FCRA and the credit reporting industry to the facts at hand.’”

Opinion Three was based on Ulzheimer’s experience and research in understanding credit score risk-analysis. His method of reaching the conclusions expressed in Opinion Three were simply an application of this experience and research.

The Court recognized that Ulzheimer did not speak to the individuals assessing the subject loan applications. He nevertheless reviewed documents assessing Garcia’s credit and income at the time of the subject loan applications, as well as the subject loan denials, and then applied his extensive experience to opine on the thought process behind said denials.

Held

The Court denied Garcia’s Motion to Exclude the Opinions of John Ulzheimer.

Key Takeaways:

The expert’s testimony may be reliable even where his method is simply an application of his experience with and understanding of the FCRA and the credit reporting industry to the facts at hand.

Ulzheimer is not offering a legal opinion on whether the Bank’s investigation was “reasonable” under the FCRA. Instead, his opinion is an application of industry standards to facts that, if proven, might help demonstrate the satisfaction of FCRA standards by implication.

Ulzheimer’s failure to consider the Manning Deposition and other tangential documents did not undermine the reliability of Opinion Two under Rule 702 or suggest that Ulzheimer’s experience was inadequate. His opinion was an application of industry standards to facts that, if proven, might have helped demonstrate the satisfaction of FCRA standards by implication.

Case Details:

Case Caption:	Garcia V. Equifax Information Services, Llc Et Al
Docket Number:	8:22cv1987
Court Name:	United States District Court, Florida Middle
Order Date:	April 23, 2024

April 24, 2024

Architecture Expert Witness Fails to Establish the Reliability of his Stability Testing Methodology

A district judge in Louisiana limited the testimony of a renowned architect, citing a complete failure to explain the origin of his methodology or to point to scientific support for the technique that reliably predicts the likelihood that a canopy on display in a store is dangerous, despite his years of experience.

To begin with, the Plaintiff alleged that she sustained personal injuries after a canopy purportedly fell off of the shelf and struck her on the back of her neck and head while she was visiting Academy store number 171 located in Metairie, Louisiana.

To attempt to prove that the canopy display was dangerous in a manner that caused the Plaintiff to be injured, the Plaintiff retained Mark E. Williams, a licensed architect and professional litigation consultant.

Williams had two primary opinions. First, Williams opined that the vertical display of the canopies was unreasonably dangerous. Second, Williams opined that the unreasonably dangerous display of the canopies caused the Plaintiff to be struck and injured.

Academy argued Williams had no relevant experience in the retail industry and, thus, was “plainly not qualified” to testify or offer any opinions regarding retail safety. Academy further contended Williams’ methodology was neither scientific nor reliable as required under Daubert; Williams’ opinions will not assist the trier of fact in understanding the evidence or determining a fact at issue as required by Federal Rule of Evidence 702; and Williams’ opinions on causation should be excluded given his lack of medical expertise and because allowing him to testify about the ultimate issue would permit him to invade the province of the jury. Finally, Academy asserted, Williams should not be allowed to offer any testimony as to Academy’s overall store sales because this information is irrelevant in this falling merchandise lawsuit.

Architecture Expert Witness

Mark E. Williams is a broadly experienced registered architect. He has had a diverse career that includes the design and construction of fast-food restaurants, postal facilities, multi-family residential developments, hotels and motels, nursing home and assisted living facilities. Williams provides technical investigations, analysis, reports, and testimony for failure analysis, and towards the resolution of commercial and personal injury litigation involving slip, trip, and fall injuries, code compliance, accessibility, construction claims and disputes, aspects of property management, construction materials, and architectural professional liability.

He is licensed in multiple states throughout the Southeast and is certified by the National Council of Architectural Registration Boards.

To learn about other cases where Mark E. Williams has been involved as an expert witness, order an Expert Witness Profile report.

Discussion by the Court

Williams’ report offered eight opinions:

1. The canopy display with unrestrained carry bags placed upright was dangerous in a manner that caused Rome to be struck and injured.

2. The canopy display with unrestrained carry bags placed upright was dangerous because it posed a hazard to shoppers browsing merchandise that violated nationally recognized standards for safe retail displays.

3. Displaying the canopy bag with the base inverted placed the wheels pointed up, which increased the likelihood that it would lean, become unstable, and topple off the shelf, particularly if unrestrained.

4. The lack of any guard or restraining device at the canopy display made it foreseeable that the upright carry bag would topple off the shelf and strike Rome.

5. Reasonable periodic inspections of the store aisles in accordance with nationally recognized standards for safe retail practices would have reliably identified the dangerous canopy display that caused Rome to be struck and injured.

6. Those responsible for customer safety should have known that the canopy display of unrestrained carry bags placed vertically with the wheels pointed up was dangerous and taken appropriate measures to protect customers.

7. The failure of Academy Sports + Outdoors to comply with its Planogram for the canopy display violated corporate specifications for safety and exposed Rome to the dangerous condition that caused her to be struck and injured.

8. The failure of Academy Sports + Outdoors to maintain the canopy display in accordance with applicable safety practices of the retail industry violated the standard of care, and created the dangerous condition that caused Rome to be struck and injured.

Qualification as an Expert and Testimony Regarding Best Safety Practices

Academy argued that Williams’ review of best practices for retail displays did not render him an expert in that field, and the “best practices” Williams cited could be summarized as ensuring that merchandise was displayed safely.

To support its opinions regarding Academy’s canopy display vis-à-vis retail industry best practices, Williams reviewed, inter alia, the pleadings in this matter, Academy’s discovery responses and document production, surveillance videos, post-incident photographs, the National Safety Council’s Accident Prevention Manual for Business & Industry, Loss Control: A Safety Guidebook for Trades and Services, and safety publications and policies of other retailers.

Williams is a licensed architect whose education, training, and experience included the design and planning of commercial and retail buildings, including those containing shelving systems and palletized storage.

Although William did not have any credentials specific to the retail safety sector, the Court noted that his education and experience equipped him to assess and explain best safety practices.

Moreover, his synthesis of this information will assist the trier of fact in understanding safety standards in the retail space and whether Academy adhered to those standards.

Stability Testing Methodology

The Court considered three of Williams’ conclusions involving Academy’s placement and display of canopies to determine the reliability of Williams’ stability testing methodology.

Williams testified that he tested the stability of a 10-by-10 Easy Shade Canopy by weighing the object in two orientations multiple times, placing it horizontally and observing that it was stable, then placing it vertically on a hard surface and using a spring scale to apply force to the canopy to determine how much force was necessary to render the canopy unstable. Williams then placed the canopy on a hard surface for an extended period of time to confirm that the solid material of the canopy “conformed to the topography of the canvas bag,” which “added to the instability when it’s upright in a vertical position and not restrained.” The “exemplar canopy” that Williams used for his testing, unlike the canopy that purportedly struck Plaintiff, did not have wheels or feet.

Williams’ total failure to explain the origin of his methodology or point to some scientific support for the technique reliably predicting the likelihood that a canopy on display in a store is dangerous gave the Court, charged with the obligation of serving as a gatekeeper under applicable law, a great deal of pause and concern.

The methodology is unreliable in that Williams performed his test on a tent without wheels or feet, features he concluded would affect the stability of a vertically displayed canopy. Even if the Plaintiff met her burden to prove by a preponderance of the evidence that Williams’ methodology was reliable, she failed to demonstrate the relevance of Williams’ testimony.

Relevance

Williams’ testing of a canopy that did not have wheels and feet is irrelevant to the determination of whether the canopy that allegedly struck the Plaintiff, a canopy that had wheels and feet, was unreasonably dangerous based on its purported instability. Even if this mismatched analysis could provide the jury with an understanding of how the specific tent that struck Plaintiff may have fallen onto her, such an opinion is unnecessary.

A reasonable lay person, looking at a long, narrow object stood vertically, is capable of concluding how it might move based on an imbalance or applied pressure and can do so without a scientific explanation. The Court found this to be a matter of common sense, and common sense is the bailiwick and jurisdiction of the jury.

Causation

Defendant sought to preclude Williams from testifying about causation, specifically Williams’ conclusion about the allegedly dangerous design of the canopy display. Plaintiff has indicated that Williams will not testify about the extent of injuries Plaintiff allegedly sustained. However, the Court has not yet decided whether Williams may testify that Academy’s purportedly unsafe display of canopies caused one of them to fall and strike Plaintiff. Defendant argues that he may not because to do so is to invade the province of the jury by addressing the ultimate issue in this case.

The Fifth Circuit has made clear that Rule 704(a) “does not allow a witness to give legal conclusions.”

The final portion of Williams’ opinions about certain elements which caused Rome’s injuries cross into the realm of legal conclusions.

While Williams may testify about the potential danger of the canopy display due to its alleged non-compliance with the store’s planogram and industry best practices, the Court found he cannot state that such dangers caused the Plaintiff’s purported harm.

Academy’s Overall Sales

The Court deferred ruling on this issue, emphasizing the need to hear any potential testimony by Williams regarding Academy’s overall sales in context.

Held

The Court granted in part, denied in part, and deferred in part Academy’s motion in limine to exclude or limit the testimony of Mark E. Williams.

Key Takeaways:

Williams’ curriculum vitae reflects over 30 years’ experience as an architect with responsibilities including quality assurance policy and procedure, code and technical research, and safety and security installations. Although William does not have any credentials specific to the retail safety sector, his education and experience well equips him to assess and explain best safety practices. His synthesis of this information will assist the trier of fact in understanding safety standards in the retail space and whether Academy adhered to those standards.

Expert testimony is unnecessary where a jury can adeptly assess the situation using only their common experience and knowledge. A reasonable lay person, looking at a long, narrow object stood vertically, is capable of concluding how it might move based on an imbalance or applied pressure and can do so without a scientific explanation. The Court finds this is a matter of common sense, and common sense is the bailiwick and jurisdiction of the jury. That being the case, and given its lack of reliable methodology and relevance, the Court excluded Williams’ testimony regarding his testing of an exemplar tent.

While courts must conduct the Daubert analysis “flexibly” and the factors identified therein “may or may not be pertinent in assessing reliability, depending on the nature of the issue, the expert’s particular expertise, and the subject of his testimony,” Williams’ total failure to explain the origin of his methodology or point to some scientific support for the technique reliably predicting the likelihood that a canopy on display in a store is dangerous gives this Court, charged with the obligation of serving as a gatekeeper under applicable law, a great deal of pause and concern.

Case Details:

Case Caption:	Rome V. Academy Sports & Outdoors, Inc Et Al
Docket Number:	2:22cv583
Court:	United States District Court, Louisiana Eastern
Order Date:	April 15, 2024

April 23, 2024

Economics Expert Witness’ Testimony Based on Well-Tested Methods for Establishing Classwide Damages Admitted

A district judge in California refused to exclude the testimony of an expert economist despite objections raised against his methods for establishing classwide damages. The expert economist had adequately explained why his damages analysis would provide an accurate and common method to prove classwide damages.

The Plaintiff contended that the Defendant Williams-Sonoma, Inc., and its advertising and marketing subsidiaries Williams-Sonoma DTC, Inc., and Williams-Sonoma Advertising, Inc. (collectively “WSI”) advertises and markets the thread count in certain of its Bedding Products in a way that is not only contrary to industry-accepted standards, but is also false, deceptive, or misleading to reasonable consumers.

On September 28, 2022, Perlin filed a Motion for Class Certification (“Certification Motion”) seeking to certify two classes: (1) a nationwide class of persons that purchased one of the seven lines of bedding seeking injunctive relief under the UCL, FAL, and CLRA pursuant to Rule 23(b)(2); and (2) a California subclass of persons that purchased one of the Bedding Products from WSI seeking monetary (and all other available) relief under the UCL, FAL, CLRA, and common unjust enrichment under Rule 23(b)(3).

The Defendant opposed the motion for class certification and moved to exclude the testimony of Jennifer Frank Rhodes and Russell L. Lamb, pursuant to Federal Rule of Evidence 702.

Textiles Expert Witness

Jennifer Frank Rhodes is the owner of Twin Gingers LLC, a consulting company serving the textile and consumer products industries specializing in the design, development and commercialization of textiles and textile consumer products, particularly bedding products. She is also employed at Thomas Jefferson University, as the Assistant Program Director, Textile Design B.S. Program and an Adjunct Professor. Rhodes has studied textile design and textile product development for more than 25 years and has worked in this field for more than 20 years.

Economics Expert Witness

Dr. Russell L. Lamb is the President and Co-Founder of Monument Economics Group. An expert in antitrust economics and applied econometrics, Lamb has more than 25 years experience as an economic consultant and more than a dozen years’ experience developing econometric models and providing expert witness and economic consulting services in cases involving antitrust, class action, and liability and damages analysis.

Having taught economics for many years at both the undergraduate and graduate levels, Lamb specializes in explaining complex economic and econometric concepts in a clear and concise manner to non-economists, including the Courts.

Prior to his work as an expert witness, Lamb developed extensive particular expertise in international and domestic agricultural economics and has undertaken extensive original research and econometric analysis related to markets for agricultural commodities. He has authored more than 50 articles in peer-reviewed journals, trade press, and major newspapers. Lamb also regularly presents at conferences on topics including the state of the U.S. Economy and farm policy.

Discussion by the Court

Jennifer Frank Rhodes

Rhodes opined that the generally accepted method for calculating thread count for bedding products sold to consumers in the United States is to count the number of warp yarns (ends) and filling, or weft yarns, (picks) in an inch. Each yarn, or thread, is counted as one thread, even if it is two-ply. Accordingly, bedding that had 300 yarns per square inch had a thread count of 300, even if the thread is two-ply. ASTM (American Society for Testing and Materials) D3775-17 is the generally accepted industry standard for calculating thread count for woven cotton bedding products sold to consumers in the United States at all times during the proposed class period.

Her testing of the WSI seven lines of bedding revealed that WSI’s advertised thread counts are not accurate. The stated thread count of each collection is approximately double the actual thread count. Each of the collections are represented to be two-ply. Accordingly, WSI improperly counted each ply in the yarn to falsely inflate the thread count, contrary to the industry standard for calculating thread count. She concluded that the various products sold under a single line or collection of bedding, such as sheeting, cases, duvets, and shams, are made of the same fabric. She explained the practical process of thread count testing and concluded that thread count could not be done with the naked eye or by the average consumer.

Motion to exclude

WSI moved to exclude her opinions of “industry standard” and “generally accepted methods” of thread count because she referred only to “industry” insider expectations that WSI argued were irrelevant and because she testified that there were no mandated “labeling requirements” for thread count and the ASTM standard she relied on was not applicable to how textiles might be marketed. WSI also argued that because Rhodes was not a consumer perception expert, she could not testify to what consumers expected regarding thread count as that was outside her area of expertise. Finally, it challenged the reliability of her opinions regarding consumer perception of thread count, contending that she improperly relied on only “a handful of articles and non-binding legal opinions” to support her conclusions.

Court’s Ruling

The Court held that WSI equation of “industry standard” with irrelevant “insider knowledge” in this consumer case is not a reason to exclude Rhodes’ opinions. While she will need to explain how she connects the existence and use (or non-use) of industry standards to her opinions, including opinions on consumer perception and opinions on how others in the industry calculate thread count, she may opine on these issues given her work and teaching experience, as well as her reliance on industry publications and textbooks.

Considering Rhodes qualifications and given her experience in the industry, she is amply qualified to opine on the existence of industry standards and use or non-use of the ASTM standard.

Dr. Russell L. Lamb

The Plaintiffs retained Lamb to opine on whether the WSI’s “challenged conduct resulted in injury to all or nearly all proposed Class members, in that they paid higher prices for the Bedding Products they purchased from the Defendants; and whether the magnitude of damages can be calculated on a class wide basis without resorting to individualized inquiry.”

Lamb proposed the benchmark analysis to measure damages on a class-wide basis. A benchmark analysis is used to compare prices paid by customers for the Relevant Bedding Products with prices that customers paid for “benchmark” bedding products. Benchmark bedding products are products of comparison that resemble the Relevant Bedding Products but are not a part of the Challenged Conduct, i.e. bedding products with properly labeled thread counts that are materially the same as or very similar to the Relevant Bedding Products. The benchmark analysis can be done in two ways: through a direct benchmark approach or a hedonic pricing model.

He explained how he would construct and run both models to support his opinions, but did not — for class certification purposes — actually run both models.

Motion to exclude

WSI first moved to strike Lamb’s opinions that are based on the materiality of thread count to consumers. It argued that his opinions assume that thread count is material without adequate expertise and without a reliable basis, given that he relied only on “cherry-picked” industry and WSI documents as well as the challenged testimony of Rhodes, and not on empirical consumer evidence, such as a survey of actual consumers regarding WSI’s Bedding Products.

WSI next moved to exclude Lamb’s opinion that a “direct benchmark approach” can be used to determine class-wide damages, because in order to complete that benchmark analysis Lamb will rely on Rhodes’ selection of “benchmark products,” meaning products comparable to the Bedding Products at issue in this case but with “properly identified thread counts.” WSI argued that the benchmark products identified by Rhodes were not comparable to WSI’s Bedding Products in numerous ways.

They also moved to exclude Lamb’s second proposed method of showing classwide damages, his proposed hedonistic-regression model. WSI argued, first, that a hedonistic-regression model did not fit the contours of this case, offering testimony from two WSI declarants regarding “actual” WSI’s pricing practices. It argued that those declarants’ testimony demonstrate that even a reduction in demand (an assumption in the hedonic model) would not result in a lower price or vice versa in the real world because WSI sets prices at a fixed rate above the supplier’s price and does not price sheets according to demand. It asserted that Lamb’s hedonic regression model, as Lamb admits, would be “artificially constructed” and should be excluded.

Finally, WSI argued that because Lamb did not conduct his proposed hedonic-regression analysis or confirm that the data needed to run that analysis existed, his opinions regarding the hedonistic-regression model must be excluded as impermissibly vague and unreliable.

Court’s Ruling

The Court determined that how material thread count is to a reasonable consumer is, of course, subject to dispute by WSI and its experts. Whether the jury agrees that thread count is material has not yet been determined. But damages experts are allowed to assume the merits of a question in order to conduct their damages work, which is what Lamb did (although he did identify numerous sources supporting the materiality of thread count to consumers). That is particularly true here, where WSI successfully bifurcated damages discovery from class discovery and the Plaintiffs have not had the opportunity to fully engage in damages discovery.

The Court held that damages experts are not required to have run their damage analyses, but instead are required to explain how they would do so and why the resulting analysis would provide an accurate and common method to prove classwide damages at the class certification stage. Lamb has satisfied that burden here with respect to the benchmark analysis.

WSI ignored that hedonistic-regression models were based on real-world transactions and real-world data regarding price and other variables.

The Court held that Lamb’s opinions regarding the hedonistic-regression model sufficed for class certification purposes.

What the final hedonistic-regression model looks like, after damages discovery has been completed and Lamb has finalized the variables selected and run the analysis, can be tested pre-trial.

The Court granted the Plaintiffs’ motion to certify a class of California purchases but denied the Plaintiffs’ motion to certify a nationwide injunctive relief class.

Held

The Court denied the Defendant WSI’s motion to exclude the Plaintiffs’ experts Jennifer Frank Rhodes and Russell L. Lamb.

Key Takeaways:

WSI’s position that industry standards were irrelevant to consumer perception may be argued to the jury and reraised post-trial if appropriate. The Court held that WSI’s challenge to Rhodes’ opinions based on a review of too few or “cherry-picked” industry or WSI documents were classic grounds for cross-examination, not exclusion. And it may raise “legal conclusion” objections in limine or during trial to her opinions regarding whether a product was “mislabeled” or is “misleading.”

At the class certification stage, damages experts are not required to have run their damage analyses, but instead are required to explain how they would do so and why the resulting analysis would provide an accurate and common method to prove classwide damages. Lamb has satisfied that burden here with respect to the benchmark analysis.

Case Details:

Case Caption:	Rushing V. Williams-Sonoma, Inc. Et Al
Docket Number:	3:16cv1421
Court:	United States District Court, California Northern
Order Date:	February 21, 2024

April 22, 2024