Plaintiff Rickey Martin is a Florida resident who purchased corrective contact lenses from Defendant Lens.com’s website on five separate occasions between January and October, 2021.
When making these online purchases, Plaintiff alleged that Lens.com charged him an undisclosed, unreasonable, and unlawful processing fee in violation of Florida’s Unfair and Deceptive Trade Practices Act (the “FUDTPA”).
Plaintiff further alleged that Lens.com advertised one price for its contact lenses but charged 50% more than the advertised price at checkout. According to Plaintiff, purchasers can only recoup the additional 50% charge by completing a mail-in rebate which is disclosed at checkout for the first time.
Plaintiff also alleged that Lens.com charged Florida customers “Taxes and Fees,” even though the State of Florida exempts contact lens purchases from sales tax.
Plaintiff thus sought to represent a class of “all Florida residents and consumers who, within the applicable statute of limitations preceding the filing of this action to the date of class certification, purchased products from Defendant and paid a charge labeled “Taxes & Fees” (known to Defendant as a “Processing” fee).” Lens.com denied that its “Taxes and Fees” are deceptive charges in violation of the FDUTPA.
Lens.com proffered the testimony of four retained expert witnesses: (1) Joshua Gifford; (2) Mark T. Keegan; (3) Peter Kent; and (4) Michele Jowdy. Plaintiff filed a consolidated motion to strike Defendant Lens.com, Inc.’s expert witnesses under Daubert.
Accounting Expert Witness
Joshua J. Gifford is a Certified Public Accountant, Accredited in Business Valuation by the AICPA and is a Certified Fraud Examiner. He has spent the majority of his career performing business valuations for litigation purposes in construction, engineering, retail, wholesale, professional services and agriculture related industries.
Gifford also has experience in forensic investigations, lost profits and economic damages analyses, and bankruptcy related tax work.
Mark Thomas Keegan has over 24 years of experience conducting consumer survey research. Over the course of his career, he has personally conducted over 1,000 consumer surveys reaching more than 250,000 consumers.
Keegan maintains a number of professional certifications and memberships that are directly related to his work as an expert in marketing and consumer research. He is a graduate of the University of Georgia’s Principles of Market Research Program, a professional certification program for marketing industry professionals covering all aspects of the survey research process. He is also a Professional Certified Marketer (PCM), an American Marketing Association certification conferred upon individuals who have demonstrated a mastery of comprehensive and core marketing knowledge and principles.
Peter Kent is an e-commerce and SEO (“Search Engine Optimization”) consultant who provides online e-commerce strategies to companies seeking to improve their business online. He has written many books about the Internet and technology in general.
Kent has been working with computer technology since early 1979 and has extensive experience in the e-commerce arena.
Gifford proffers his opinion, from an accounting perspective, that Lens.com’s “‘Taxes and Fees’ description is generic indicating there are a broad range of activities being covered by the charge.” In sum, Gifford opined on the “meaning and connotation of the ‘Taxes and Fees’ description from a financial or business perspective.”
B. Mark Keegan
Keegan’s study of 459 relevant consumers shows that most consumers understand the pricing presented during Lens.com’s online purchase checkout process and are not deceived or confused by Lens.com’s representations.
C. Peter Kent
According to Kent, customers are generally driven by price. Some customers seeking the best price for their contact lenses are benefitting from a low overall price from online sellers like Lens.com, even after the additional fee is added at the end of the transaction.
D. Michele Jowdy
Jowdy compared Lens.com’s final prices (inclusive of all applicable fees and rebates) to the final prices of Lens.com’s competitors. Jowdy also compared Lens.com’s price to the average price for 16 different brand-name contact lenses. Although Jowdy does not proffer an opinion, her report seems designed to show a jury that Lens.com charges a competitive final price for its prescription contact lenses.
Analysis
Plaintiff contended that offering their expert opinion is an improper attempt to “reframe this lawsuit as a dispute about overcharging, price comparison, consumer confusion, or industry norms,” when the case is instead about whether Lens.com’s “Taxes and Fees” are deceptive or misleading to the reasonable consumer in violation of the FDUTPA.
Plaintiff observed that Lens.com’s “four experts share the same flaw: each is directed at a substitute issue that would distract the jury from the only one that matters,” i.e., whether the net impression of Lens.com’s “Taxes and Fees” is misleading to the reasonable consumer under the circumstances, which deception caused Plaintiff actual damage. The Court agreed with Plaintiff on this point and goes one step further. All four experts improperly intrude into the province of the jury.
The testimony of Gifford, Kent, and Keegan constitute opinion on whether reasonable consumers would find Lens.com’s “Taxes and Fees” deceptive. Clearly, that is an issue (perhaps the critical issue) for the fact finder, not an expert.
The jury did not need an expert to assist its factual determination of whether the net impression of Lens.com’s “Taxes and Fees” is objectively misleading to the reasonable consumer. Nor did a jury need an expert to opine as to whether Plaintiff suffered actual damages by paying those charges.
Held
The Court granted the Plaintiff’s consolidated motion to strike Defendant Lens.com, Inc.’s expert witnesses, Joshua Gifford, Mark Keegan, Peter Kent, and Michele Jowdy.
Key Takeaway
In this case, Lens.com’s proffered expert opinions would not only not assist the trier of fact, they would affirmatively confuse the jury. The Court is disinclined to allow experts, even qualified, reliable, and helpful ones, to supplant and interfere with the jury’s role in this kind of case.
This putative class action involves claims that a manufacturer falsely marketed its pediatric nutrition beverage as helping children grow taller. Joanne Noriega sued Abbott Laboratories (“Abbott”), claiming that the packaging and marketing of its beverage, PediaSure Grow & Gain (“PediaSure”), has thus misled consumers. Noriega claimed that she purchased PediaSure for her grandson based on Abbott’s representation that PediaSure is “Clinically Proven to Help Kids Grow (the “challenged statement”). That claim, she alleged, allowed Abbott to charge a price premium for the product.
Abbott filed motions to exclude the testimony of Dr. Gita Johar (as to consumer perception of the challenged statement), Dr. Daniel Hoffman (as to scientific studies of PediaSure’s effects on growth), and Dr. William Ingersoll (as to the price premium attributable to the challenged statement). Noriega filed motions to exclude the testimony of Dr. Ran Kivetz (as to the materiality of the challenged statement) and Dr. Melvin Heyman (as to scientific studies).
Marketing Expert Witnesses
Dr. Gita V. Johar is a professor at Columbia Business School, where she has taught classes on marketing, branding, and research methods since 1992. She earned her PhD in marketing from the New York University School of Business. She has served as a fellow and president of the Society for Consumer Psychology, and as an editor of the Journal of Consumer Research, Journal of Marketing, and Journal of Consumer Psychology. Johar has published papers on topics including deceptive advertising, corrective advertising, refutation of false beliefs formed based on advertisements, effectiveness of disclosures in advertising, and inferences and false beliefs based on advertising claims.
Dr. Ran Kivetz is a marketing professor at Columbia Business School, where he teaches courses related to marketing strategy, consumer acquisition and retention, and behavioral economics. He earned his PhD in business from Stanford Graduate School of Business and a master’s degree in psychology from Stanford University. His research focuses on buyers’ purchasing behavior, survey design, and the effect of product characteristics on purchase decisions. He has published numerous articles on topics related to consumer behavior and decision-making.
Kivetz has achieved recognition for his contributions to consumer research, including from the Journal of Marketing Research and Society of Consumer Psychology. He serves on the editorial boards of three journals, evaluating marketing research surveys for publication.
Dr. Daniel J. Hoffman is a professor in the Department of Nutritional Sciences at Rutgers University, where he has taught for the last 25 years. He earned his PhD in human nutrition from Tufts University, a certificate in epidemiology from the World Health Organization, and a master’s degree in cell biology from The Catholic University of America. Between 2012 and 2022, in addition to teaching, he served as director of the Center for Childhood Nutrition Research at the New Jersey Institute for Food, Nutrition and Health.
Dr. William Robert Ingersoll is an associate professor and chair of business and entrepreneurship at Azusa Pacific University, where he teaches courses in industrial organization, econometrics, and microeconomic theory. He earned a PhD and master’s degree in economics from the University of Arizona. He represents that he has testified as an economic damages expert in a variety of state and federal cases.
Dr. Melvin Bernard Heyman is a professor in the Department of Pediatrics at the University of California, San Francisco School of Medicine (“UCSF”). He earned his medical degree from the University of California, Los Angeles (“UCLA”); completed a residency in pediatrics at Los Angeles County-University of Southern California Medical Center; and completed a fellowship at UCLA in pediatric gastroenterology and nutrition. Since 1981, he has worked in pediatric health and medicine, conducting thousands of clinical visits during his career, many of which addressed children’s nutritional needs. Between 1990 and 2016, Heyman served as chief of UCSF’s pediatric gastroenterology division and organized nutritional support services for pediatric patients. He has held leadership roles on local and national committees, including the American Board of Pediatrics and the American Academy of Pediatrics Committee on Nutrition, and has served as editor-in-chief of the Journal of Pediatric Gastroenterology and Nutrition.
Johar was retained by Noriega to opine on whether the PediaSure label and commercials would lead a reasonable consumer to believe that the product is clinically proven to help kids grow in height.
Johar’s expert report assesses whether the PediaSure label and commercials would lead a reasonable consumer to believe that the product is clinically proven to help kids grow in height. Based on her assessment of the PediaSure label and commercials, Johar opined that Abbott has misled consumers to believe that PediaSure has been clinically proven to help kids grow in height.Â
a. Reliability of Johar’s Methodology
Abbott argued that Johar’s methodology is unreliable because she did not undertake an empirical consumer survey, which it contended departed both from “accepted practice” in the field and from Johar’s own academic research practices.
The Court held that Johar’s education and experience, taken together with the relevant academic literature on which she relied, supplied an adequate basis for the testimony she proposed to give.
Abbott noted that Johar lacked specific expertise as to children’s nutrition drinks. Given her extensive experience in consumer product marketing, however, that fact, though fair game for cross-examination, did not support precluding her as unqualified to testify here.
b. Relevance of Johar’s Consumer Perception Opinions
Abbott argued that Johar’s testimony would not be helpful to the jury because “her opinions are purely subjective.”
The Court found that Johar’s testimony would be helpful to the jury. Notwithstanding Abbott’s portrait of her testimony, she did not propose to set out her personal beliefs, as a consumer, about the meaning of the challenged statement on the label. Instead, she proposed to opine, as a marketing professor, based on her experience and research, about how a reasonable consumer would view and process the challenged statement in the context of PediaSure’s packaging.
Daniel Hoffman
Hoffman was retained by Noriega as a nutrition and growth expert to opine as to whether PediaSure has been—as the challenged statement represents—clinically proven to help kids grow.
Hoffman addressed Abbott’s claims substantiation guidance (“CSG”)—an internal manual that addresses health benefit claims, the evidence necessary to substantiate such claims, and the claims development process. He opined that the CSG “sets mandates to be followed” by Abbott and is not “merely aspirational.”
a. Opinions About the CSG
Abbott sought to preclude Hoffman’s testimony about the CSG on the grounds that he is unqualified to opine on an internal Abbott document and cannot properly opine on Abbott’s state of mind.
To begin with, the Court found that Hoffman is not an expert in marketing, claims substantiation, or Abbott’s internal practices. When asked at his deposition what qualified him to interpret the CSG, he answered his “research education.”
Moreover, the CSG’s guidance, if relevant at trial, would not be “beyond the ken of the average juror” to grasp.
Finally, Hoffman’s proposed opinion testimony that Abbott failed to comply with the CSG’s ostensibly mandatory guidance is not the province of an expert.
b. Reliability of Hoffman’s Analysis of Abbott’s Studies
Abbott argued that Hoffman employed an unreliable methodology in finding Abbott’s studies of PediaSure unsound.
A fair-minded review of Hoffman’s report supported the reliability of his methodology in evaluating Abbott’s studies. He drew upon his experience (both as a researcher in the field of pediatric growth and nutrition, and as an editor of scientific journals) and academic articles about standards applicable to clinical studies, randomized trials, and medical research involving human subjects.
c. Relevance of Hoffman’s Opinions on Abbott’s Studies
Abbott next argued that Hoffman’s opinions as to the scientific rigor of Abbott’s studies are irrelevant because they are based on “academic publication standards.”
However, the Court found that Hoffman’s report sets out standards that must be satisfied for a study to be considered “transparent,” “objective,” Â “scientifically vetted,” “scientifically rigorous,” and “unbiased.”
Few of the 36 journal articles on which Hoffman relied in support of those standards appear to relate to “academic publishing,” and even those appear to be generally applicable.
That Hoffman’s analysis of Abbott’s studies tracks analyses he conducted in his editorial roles is no impediment to the admissibility his testimony.
d. Opinions Not Stated in Expert Report
Abbott sought to preclude Hoffman’s opinions related to (1) Abbott’s compliance with Federal Trade Commission (“FTC”) health claims guidance and (2) how a reasonable consumer would interpret the challenged statement.
It was in his deposition that Hoffman articulated for the first time his opinions about Abbott’s compliance with FTC guidance and consumers’ perceptions of the challenged statement.
Noriega did not contend that these opinions were disclosed earlier or justify the failure to do so. The Court thus cannot find their non-disclosure substantially justified.
Moreover, Hoffman’s education and experience is in “nutritional sciences and growth,” he is therefore unqualified to opine on FTC compliance or consumer perception.
Because Noriega failed to timely disclose Hoffman’s opinions on FTC compliance and consumer perception, and because they are independently inadmissible, the Court excluded such testimony.
William Ingersoll
Noriega’s expert, Ingersoll, proposed to opine that: (1) products bearing the label “Clinically Proven to Help Kids Grow” are on average “more favorably viewed” than ones that state, “Helps Kids Grow”, or that make no statement about growth; and (2) consumers are willing to pay more—in the amounts above—for the product bearing the challenged statement than the growth-only statement or no statement.
a. Relevance of Ingersoll’s Survey Results
Abbott argued that Ingersoll’s survey failed to calculate a price premium keyed to Noriega’s theory of consumer deception.
Because Noriega’s theory is that the challenged statement misled consumers to believe that PediaSure promotes height growth, Abbott argued, the survey, to be helpful, needed to “isolate a price premium traceable to Abbott’s purported misrepresentation about height.”
Ingersoll’s survey tested the premiums attributable to the label statements, “Clinically Proven to Help Kids Grow,” and “Helps Kids Grow.” But on their faces, those statements do not exclusively concern height. Their references to growth can also—or alternatively—be read to encompass other forms of growth (e.g., weight, body composition, and/or muscular development).
As a result, the Court held that Ingersoll’s survey aimed at quantifying price-premium damages did not “fit” Noriega’s theory of liability.Â
Ingersoll could have tested the price premium traceable to a hypothetical height-growth-specific statement. Or he could have tested the value that respondents place on various promised health benefits (e.g., height growth compared to weight gain). Either approach might have enabled him to isolate the price associated with the alleged misrepresentation about height. Ingersoll’s failure to do so resulted in a broad conclusion—that consumers are willing to pay more when PediaSure contains the challenged statement—that is not tailored to Noriega’s theory of the case nor helpful to a jury tasked with isolating the damages (via a price premium theory) attributable to a misrepresentation about height. This flaw is sufficiently fundamental to require exclusion of his proposed testimony.
b. Reliability of Ingersoll’s Survey Methodology
Abbott argued that Ingersoll’s conclusions are separately irrelevant because the survey he used showed a “truncated version of the challenged statement” which excluded the footnote disclaimer.
The Court found that Ingersoll’s failure to test the disclaimer undermined the reliability of his conclusions as to the price premium attributable to the challenged statement. As Abbott noted, the disclaimer supplied context for the statement’s claim of clinical proof: a person who read and understood the disclaimer could be alerted to the fact that the evidence of PediaSure’s growth benefits “came not in studies of all children but rather those who were ‘at risk of malnutrition.’”Â
More broadly, Ingersoll’s election not to address the disclaimer in his report is strong evidence of motivated reasoning—that his analysis was not “reliable at every step,” but instead was result-driven.
Ran Kivetz
Kivetz was retained by Abbott to assess whether the challenged statement, as modified by the disclaimer, was a driver of consumers’ decisions to purchase and/or pay a price premium for PediaSure.Â
Kivetz conducted an empirical consumer materiality survey to test the effect of the challenged statement on consumers’ likelihood of purchasing and willingness to pay for PediaSure, and to ascertain the reasons and motivations driving consumers’ purchase of the products.
He drew two conclusions based on the survey’s results. First, Kivetz concluded that the challenged statement did not drive consumers to purchase PediaSure. Second, Kivetz concluded that consumers are not willing to pay more for PediaSure when the challenged statement is present compared to when it is absent.
a. Reliability of Kivetz’s Survey Design
Noriega argued that, for three reasons, the design of Kivetz’s consumer survey was unreliable.
First, Noriega argued that Kivetz erred in conducting a between-group, rather than within-group, study. Even if a within-group study would have been more effective for assessing materiality, the Court held that Kivetz’s decision to conduct a between-group study did not render his survey unreliable.
Second, Noriega claimed that Kivetz’s study “suffers from . . . the ceiling effect.” Because approximately 90% of individuals in both the test and control groups stated that they were probably or definitely likely to purchase PediaSure, Noriega argues, there was “no room” to perceive the effect of the challenged statement. Â That his survey might have been better designed, however, does not render it unreliable.
Third, Noriega argued that Kivetz’s use of open-ended questions “produced incorrect and unreliable data.”
The survey asked consumers why they were definitely/probably likely or unlikely to buy the product, and instructed respondents to “be specific and include details.” It then asked for “any other reason or reasons” for their purchase likelihood, and again instructed them to be specific. Respondents were thus prompted to provide a fulsome explanation for their purchase decision—not just the first reason that occurred to them. The survey also asked respondents closed-ended questions in addition to the two open-ended questions. Respondents were asked about their purchase likelihood (which required choosing between six answer choices) and willingness to pay (which required a numeric response). Accordingly, the questions here do not come close to requiring exclusion of the survey.
b. Reliability of Survey Coding
Noriega next argued that Kivetz’s methodology for coding the survey responses was unreliable, and that the responses did not support his conclusions. She argued that Kivetz failed to provide instructions to anonymous assistants, who made “highly subjective” coding decisions, and to keep data that would allow Noriega to determine how each response was coded. But Kivetz provided the coders with a “coding frame,” which contained a list of specific categories in which the responses could be classified. And Noriega did not dispute that Abbott produced the raw survey data, which was also attached to Kivetz’s report. Noriega accordingly could have, based on the raw data, coding frame, and results, reconstructed how responses were coded. The Court found her objections on this basis unavailing.
c. Opinions Based on Caselaw
Noriega argued that Kivetz’s testimony should be excluded insofar as it “offers legal conclusions.” Kivetz references caselaw once in his report.
In support of his statement that the survey he conducted is “routinely used in academic, industry, and litigation settings,” he cited cases that accepted his consumer surveys and found that they “conclusively showed that the challenged claims were not material.” It should be noted that an expert’s testimony on issues of law is inadmissible.
Melvin Heyman
Abbott’s expert Heyman opined that there is ample clinical support for a claim that PediaSure helps kids grow, including in both height and weight.
a. Qualifications to Opine on Height Growth
Noriega argued that Heyman is unqualified to opine on pediatric height growth because he lacked specialized training or experience in the field.
Although Heyman did not appear to have expertise in pediatric height growth specifically, that does not render his qualifications inadequate. Courts admit testimony of experts who have “educational and experiential qualifications in a general field closely related to the subject matter in question,” but lack expertise in “the specialized areas that are directly pertinent.”
b. Reliability of Heyman’s Methodology
Noriega argued that Heyman’s analysis is unreliable due to a lack of textual support for his assessment of Abbott’s studies. The Court held that Heyman’s testimony is reliable because he has shown how his experience led to his conclusion. Although Heyman’s failure to cite relevant authority might undermine the strength of his conclusions, it does not invalidate them.
Second, Noriega argued that Heyman’s analysis is unreliable because he failed to rely on the CSG, which constitutes “considerable contradictory evidence.” As noted, however, the CSG is an internal Abbott document that supplies guidance for substantiating marketing claims. It was unnecessary for Heyman to consider it in analyzing the findings of Abbott’s studies, or whether the studies were scientifically rigorous.
Heyman also addressed the AL-48 study, which he opined was a “scientifically rigorous clinical study that affirms . . . the height-related findings of prior PediaSure studies.” Noriega argued that Heyman’s analysis is unreliable because it is premised on the AL-48 study, which is “unfinished, unwritten, and unpublished.”
The Court found the AL-48 study was not relevant, because it was completed after the time period on which Noriega’s claims are based (and after the proposed class period). Accordingly, the Court excluded Heyman’s testimony insofar as it references or relies on that study.
c. Relevance of Opinions About Non-Height Growth
Noriega argued that Heyman’s testimony would be unhelpful to jurors because he “avoids opining on height growth specifically,” instead addressing other forms of growth that are “wholly irrelevant” to Noriega’s claims.
The Court found this argument unavailing because Heyman did opine on height growth. His conclusions as to the height findings of Abbott’s studies are central to his proposed testimony.
d. Relevance of Opinions About L.V ‘s Medical Records
Noriega argued that Heyman’s testimony related to L.V.’s medical records is irrelevant. The Court agreed.
Even taking as true Heyman’s assessment that L.V. grew while he consumed PediaSure, such would not make it more likely that PediaSure helps kids grow. There are myriad reasons why L.V. might have grown during the relevant period, such as his genetics, age, diet, sleep, and physical activity. Heyman did not opine that PediaSure caused L.V.’s height growth, nor could he responsibly do so.
If L.V. grew during the relevant period, that fact would be fair game to use to impeach that aspect of Noriega’s testimony. But a medical expert is not necessary to establish it. L.V.’s medical records, which reflect the weight and height recorded at his appointments in July 2021 and March 2023, are comprehensible to a layperson. Abbott has not contended that expert testimony is needed to decode them on this point. Accordingly, such testimony would be improper.
Held
The Court denied in full Abbott’s motion to exclude Dr. Gita Johar’s testimony.
The Court granted in part and denied in part Abbott’s motion to exclude Dr. Daniel Hoffman’s testimony.
The Court granted in full Abbott’s motion to exclude Dr. William Ingersoll’s testimony.
The Court granted in part and denied in part Noriega’s motion to exclude Dr. Ran Kivetz’s testimony.
The Court granted in part and denied in part Noriega’s motion to exclude Dr. Melvin Heyman’s testimony.Â
Key Takeaway
Trial courts serve as gatekeepers, responsible for ‘ensuring that an expert’s testimony both rests on a reliable foundation and is relevant to the task at hand.
Whether a witness is qualified as an expert is a threshold question that precedes the Court’s relevance and reliability inquiries. It is critical that an expert’s analysis be reliable at every step. To ensure relevance, the Court must assess whether the expert’s testimony fits the facts of the case.
The Federal Trade Commission (“FTC”) alleged that Defendant Doxo’s website and ads were confusing to some consumers and that Doxo committed certain technical disclosure violations.
David True is a consumer payments expert with over 35 years of experience working with card issuers, networks, merchants, processors, and financial technology firms. Over the course of his career, he has gained experience in payments strategy, marketing, new product development, operations, and finance.
Ann Schlosser, Ph.D., is a marketing professor whose research focuses on consumer behavior, Internet and digital marketing, and communication in technology-mediated environments.
Schlosser received her Ph.D. and M.A. in social psychology with a double minor in advertising and quantitative psychology.
Schlosser has over thirty publications in academic journals, conference proceedings, and book chapters.
Brian Sowers is a market research consultant. Over the course of his career, he has personally designed and conducted thousands of market research surveys across a broad range of modalities and a broad range of populations.
David True, a consumer payments expert, summarized his opinions as follows: (1) Defendant Doxo, Inc. (“Doxo”) allows consumers to choose from a wide variety of funding mechanisms for bill pay; (2) Doxo remits payments to billers either through direct deposit, the Mastercard Remote Payment and Presentment Service (“RPPS”), or check; (3) Doxo’s remittance methods are commonly used, including by bank bill pay services; (4) convenience fees are ubiquitous in bill pay and are routinely charged by billers and/or their preferred payment channels; (5) Doxo’s practices of disputing non-fraudulent chargebacks is normal and an expected part of being a merchant that accepts card payments; and (6) although a small number of billers have posted warnings about Doxo, the substance of those warnings is often questionable, potentially self-interested, or the product of misunderstanding.
(i) True’s Qualifications
The FTC did not appear to challenge True’s qualifications, noting only that, although True “has industry experience advising businesses about payments,” he has limited experience and “identifies no experience or expertise related to consumers’ perceptions of advertisements or businesses’ compliance with consumer protection law.”
The Court found that True is qualified, based on his knowledge and experience, to give relevant and reliable expert testimony. The FTC cited no cases in support of its proposal to define True’s prior experience in the payments industry so narrowly. True possesses “at least the minimal foundation of knowledge, skill, and experience required in order to give ‘expert’ testimony” on the consumer payments industry.
Whether True has the “knowledge and experience” to offer relevant reliable expert testimony is not, however, the end of the inquiry; the Court must further evaluate whether he is able to do so in this case.
(ii) The relevance of True’s proffered testimony
The FTC argued that True’s report consisted of irrelevant matters that have no bearing on whether Defendants violated the FTC Act, Gramm-Leach-Bliley Act, and the Restore Online Shoppers’ Confidence Act.
True’s testimony in his report concerning industry standards about the U.S. consumer bill pay market (Section VII) and bill pay methods (Section VIII) sets the foundation for his testimony. This testimony is relevant because it supported Defendants’ theory that Doxo’s business practices are normal and expected. True then applied these principles to his interpretation of Doxo’s operations (Section IX), discussing payment funding and remittance, payment validation processes, and biller directory quality assurance practices.
True’s recitation of Doxo’s business model and business case for a centralized bill pay platform are necessary to lay the factual foundation for this analysis and is therefore relevant. True’s explanation of Mastercard’s RPPS (Section X) is relevant to the FTC’s theories that Doxo collects money from consumers without paying the biller or pays the biller late, thereby causing consumers to incur late fees or other negative outcomes. Finally, True opined on the fees and costs associated with bill payments (Section XI), Doxo’s chargeback procedures and rates (Section XII), and biller warnings about Doxo (Section XIII). The FTC relied on Doxo’s practices in this area and external evidence to support its claims, thereby making these portions of True’s testimony relevant.
(iii) The reliability of True’s testimony
The FTC argued that True’s conclusions about Doxo’s practices (Sections IX—XII of True’s report) are improper as expert testimony because True identified no methodology or specialized knowledge or experience that explained how he reached them.
True opined that “Doxo has robust processes for minimizing chargebacks,” Doxo’s chargeback rate is “well below industry thresholds for fines or monitoring programs,” and Doxo’s “win rate of approximately 80% on bill payments and about 50% on its subscription (doxoPLUS) products” compares to “an industry average success rate of roughly 45%.” In discussing Doxo’s “multi-layered payment validation framework,” True stated that the validation criteria “are based on a combination of industry standards (e.g., financial institution formatting norms) and direct input from billers.”
The Court deems an expert’s testimony reliable where he identifies applicable industry standards in his report and contrasts them with an atypical case, like this one.
The FTC also argued that True’s conclusions about biller warnings concerning Doxo (Section XIII of True’s report) are not reliable because he offered a definitive conclusion that a “small minority” and “tiny portion” of billers have issued such warnings, despite not asking Doxo whether a spreadsheet upon which he based this conclusion was comprehensive. The FTC did not, however, point the Court to a more comprehensive list of billers who have issued warnings that would support a conclusion that True’s testimony on biller warnings is unreliable because he “failed to consider the relevant underlying facts necessary to support his opinions and conclusions.”
Dr. Ann Schlosser
In her report, Schlosser reached the following conclusions: (1) reasonable consumers would correctly interpret search engine results for Doxo and are not likely to be misled; (2) reasonable consumers would correctly interpret the website and accompanying disclosures to understand that Doxo is not the biller and does not have a formal affiliation with their biller; (3) reasonable consumers would understand that Doxo charges a fee for certain transactions; (4) the option to pay for free by using a linked bank account is stated clearly and repeatedly throughout the payment process; (5) reasonable consumers would understand that doxoPLUS is a subscription service; and (6) isolated consumer complaints do not alter the foregoing conclusions.
(i) The Relevance of Schlosser’s Proffered Testimony
The FTC also did not appear to challenge the relevance of Schlosser’s testimony, but instead questioned its helpfulness.
The topics about which Schlosser opined included the following: (1) how consumers navigate a purchase decision-making process, (2) application of the decision-making process to Doxo customers, and (3) whether a reasonable consumer would be confused or misled as to fees, affiliation, or the nature of Doxo’s bill pay or subscription services. All of these topics are clearly relevant to the issues in this case.
(ii) The Reliability of Schlosser’s testimony
Schlosser’s testimony that consumers are not deceived by Doxo’s advertisements and website is unreliable
The FTC contended that Schlosser’s testimony that consumers are not deceived by Doxo’s advertisements and website is unreliable.
Schlosser analyzes a consumer’s experience using Doxo’s service by walking through the process from encountering Doxo’s advertisements on Google through each step of Doxo’s bill payflow. Rather than simply regurgitating what she can read on each webpage, Schlosser pauses to explain why certain aspects of these webpages are not misleading or confusing, weaving in principles within her expertise and data not present on the face of any webpage. Although the FTC may disagree with Schlosser’s opinions or critique how she reached them, such arguments bear not on the admissibility of Schlosser’s testimony, but instead their weight, which can be appropriately addressed during cross-examination.
Schlosser’s methodology is unreliable because she failed to consider the actual facts at issue
The FTC also argued that Schlosser’s methodology is unreliable because “she failed to consider the actual facts at issue” and “due to her failure to account for the overwhelming evidence contrary to her opinion.” Almost invariably, Schlosser testified that she would need more information to determine whether any of the documents shown to her or information shared with her would be relevant to her opinions in this case.
Schlosser’s opinions are unhelpful
The FTC challenged three other broad categories of Schlosser’s opinions based on their alleged unreliability and unhelpfulness: (1) Doxo has “satisfied consumers and a loyal following,” (2) certain payment data indicates that consumers were not deceived; and (3) consumers do not care about the affiliation between Doxo and their billers.
The Court rejected all these challenges, because (1) Schlosser’s comment on Doxo consumer satisfaction is relevant to bridge the gap between her application of the consumer decision-making process and external data about Doxo’s consumers; (2) the FTC may cross-examine her about the strength of these opinions, which do not make them inadmissible on their face; and (3) Schlosser stated that “paying on time, without extra fees, is important to consumers,” but explained that “consumers are unlikely to know who is handling the payment or make decisions on whether to buy or not based on who is handling the payment.”
(iv) Ultimate Issue Testimony
The FTC argued that Schlosser’s opinion on deception is an impermissible legal conclusion. Schlosser concluded that “the evidence does not support the conclusion that Doxo’s practices are misleading, confusing, or deceiving a significant number of consumers acting reasonably.” She used the term “deception” or “deceived” a handful of times in the rest of her report.
The Court concluded that Schlosser has not offered an opinion on an ultimate issue of law.
Brian Sowers
(i)Relevance and reliability of Sowers’ opinions on Doxo’s internal surveys
The FTC argued that Sowers relies exclusively on guidance regarding the design of surveys conducted specifically for litigation and failed to explain why or how that literature applied to the Doxo internal surveys that Sowers analyzed.
Sowers testified that he reviewed about nineteen Doxo surveys and agreed that companies’ internal surveys are often not conducted according to the “Shari Diamond Chapter,” a reference guide on survey research, if they are never intended for use in litigation.
According to that reference guide, “the content and execution of a survey must be scrutinized whether or not the survey was designed to provide relevant data on the issue before the court.”
The FTC offered no authority to suggest, however, that an analysis of proper survey design and implementation varies based on the purpose for which the surveys are used. To the extent the FTC disagrees with Sowers’s methodology, the FTC is free to address such concerns during cross-examination.
The FTC also contended that Sowers’ conclusions are “pure ipse dixit.” Sowers identified from treatises and applied ten guidelines for reliable survey design throughout his analysis.
The Court concluded that Sowers’ testimony on Doxo’s internal surveys was relevant and reliable.
(ii) Relevance of the Awareness Survey
The FTC argued that Sowers’ Awareness Survey should be excluded under Rules 702 and 403 as unhelpful to the trier of fact for failing to advance any material issue in the case.
Sowers stated that the Awareness Survey results showed 13.3% of respondents indicated that they are aware they can pay a bill online through a third-party website not authorized by the biller.
The Awareness Survey did not survey Doxo consumers. With the relevant period of liability being February 2021 through October 2024, a survey conducted years later of general consumers’ preexisting beliefs on paying bills through a third-party is not relevant.
Defendants have made no showing, through Sowers or otherwise, about how results may differ (or not) over time and how the survey Sowers conducted could bear on perceived consumer confusion two to five years ago.
Held
The Court denied the motions to exclude expert witnesses David True and Ann Schlosser brought by the Federal Trade Commission.
The Court denied in part and granted in part the FTC’s motion to exclude expert witness Brian Sowers.
Key Takeaway
Trial judges are tasked with ensuring that an expert’s testimony rests on a reliable foundation and is relevant to the task at hand. Generally, expert opinion testimony is relevant if the knowledge underlying it has a valid connection to the pertinent inquiry and reliable if the knowledge underlying it has a reliable basis in the knowledge and experience of the relevant discipline. Expert testimony is inadmissible if it concerns factual issues within the knowledge and experience of ordinary lay people because it would not assist the trier of fact in analyzing the evidence. Nevertheless, expert testimony need only provide appreciable help to the jury to be admissible.
Plaintiff Alycia Johns brought this action under the Fair Credit Reporting Act and Fair Debt Collection Practices Act following several years of disputing various tradelines with credit reporting agencies based on her claim of identity theft.
Johns relied on her expert, Douglas Hollon, to assert that Nelnet failed to conduct an adequate investigation of the disputes.
Defendant Nelnet Servicing, LLC, along with Equifax, TransUnion, LVNV, Resurgent, and First Premier, filed motions to limit or exclude the testimony of Hollon
Consumer Credit Expert Witness
Douglas A. Hollon holds a Bachelor of Science in Business Finance. He has received FCRA certifications from the Consumer Data Industry Association, has a Credit Analysis Certification from the New York Institute of Finance, has certifications in Credit Risk Modeling and Credit Scorecard Development from SASInstitute, Inc., and has completed the American Bankers Association Certification in Lending Compliance for Compliance Professionals.
He worked at Experian from 2005 until 2019, where he began in a position assisting consumers with their disputes, and then handled escalated credit report disputes for his remaining years with Experian. While at Experian, he received specialized training involving fraud and “mixed file” disputes. Prior to his time at Experian, he was an investigator with the U.S. Army CID, where he conducted investigations for sixteen years.
Defendants asserted that Hollon is not qualified to opine on their investigations, or their policies or procedures. They argued that his opinions are based on the dictionary definition of “investigation” and his personal experience as an investigator with the U.S. Army Criminal Investigation Division (“CID”).
Hollon’s expertise is based primarily on his experience. In his report, Hollon explained that his experience at Experian involved handling disputes, assisting tens of thousands of customers, explaining credit score factors, and understanding information received from Public Record Vendors.
While Hollon’s explanation of how his experience led to the conclusions reached in this respect is minimal, the Court found that Hollon is sufficiently qualified to testify as an expert regarding investigations and reinvestigations of credit disputes by CRAs and furnishers.
The Court also found that Hollon is qualified to speak, “in general terms and as found relevant at trial, about the sort of damages that are typically caused on consumer reports.”
C. Reliability
Defendants argued that Hollon’s opinions on Defendants’ investigations, and their policies and procedures, are not reliable. Specifically, they argued that his opinions on policies and procedures are based on prior knowledge of Experian’s procedures, regulatory agency publications, case law, deposition transcripts, and “company manuals or publications and other related documents” that he is unable to identify.
Johns asserted that there is no standard procedure for a reasonable investigation under the FCRA, and so Hollon’s experience “is the closest the jury will get to a standard, industry-wide practice.”
While Johns suggested that it is the Defendants’ burden to show why Hollon’s CID investigative experience is not applicable to the FCRA context, that disregarded the burden imposed under Rule 702 on the proponent of the expert testimony.
Hollon’s reliability further falters as he is unable to identify what he relied on. For instance, he references deposition transcripts involving these Defendants in other cases, but cannot identify what cases they came from.
Hollon’s opinions are rendered more unreliable because they do not dependably flow from the facts. He asserts: “I believe that she submitted a police report which is — and she was a victim of identity theft. That is my opinion.” His report opens with, “Plaintiff, Alycia Johns, is a victim of identity theft.” But the alleged identity theft in this case is not so clearly established. Rather, it is only Johns’ testimony and the police report—based on her statement, which does not specify which tradelines she asserted are the result of identity theft—which support this conclusion. It is the province of the jury, not an expert, to make credibility determinations.
The Court found that Hollon’s opinions are unreliable because generalized statements from Hollon regarding the harm other consumers have faced when their consumer reports contained inaccuracies is not relevant to the present case.
Held
The Court granted the Defendants’ motions to exclude the testimony of Douglas Hollon.
Key Takeaway
An expert’s experience, without an explanation of how that experience supports the conclusion, cannot be a substitute for reliable principles or methods. Hollon repeatedly stated that his opinions are based on his “experience, skills, and knowledge,” yet he offered no explanation of what aspects of that experience, skills, or knowledge he drew upon in reaching his conclusions. An expert’s opinion cannot be deemed reliable when it rests solely on the expert’s ipse dixit.
Case Details:
Case Caption:
Johns V. Nelnet
Docket Number:
2:22cv4791
Court Name:
United States District Court, Pennsylvania Eastern
This class action lawsuit arises out of Amazon’s practice of using smart-speaker technology (“Alexa”) to surreptitiously: (a) intercept; (b) eavesdrop; (c) record; (d) disclose; or (e) use millions of Americans’ voices and communications, all without their knowledge or consent. Such conduct blatantly violates Washington’s wiretapping law, which applies nationwide to Plaintiffs and all members of the Class.
Defendants here, Amazon.com, Inc. and Amazon.com Services LLC (collectively, “Amazon” or “Defendants”), are therefore liable as a result of their egregious violations of the State Wiretapping laws – and are also liable for their violations of the Washington Consumer Protection Act (“CPA”), the Electronic Communications Privacy Act of 1986 (“Federal Wiretap Act”), and the Stored Communications Act of 1986 (“SCA”). Plaintiffs Kaeli Garner, Jodi Brust, Diane McNealy, Michael McNealy, Ricky Babani, Jeffrey Hoyt, Lorlie Tesoriero, Ronald Johnson, Selena Johnson and Caron Watkins (collectively, “Plaintiffs”) brought this action individually, and on behalf of a Class of similarly situated individuals, to redress those violations of law.
Plaintiffs sought to exclude Amazon’s expert, Dr. Dominique Hanssens‘ opinions because he is not qualified to opine on privacy issues or the law and because the surveys he conducted are neither scientifically valid nor relevant to the issues in this case.
Marketing Expert Witness
Dominique Hanssens is a Distinguished Research Professor of Marketing at the UCLA Anderson School of Management and has been on the UCLA faculty since 1977. Hanssens’ undergraduate degree in applied economics was earned at the University of Antwerp. His M.S. and Ph.D. degrees are in Management from Purdue University. His focus is on strategic marketing problems, and both his research and his legal consultations have involved surveys and analysis regarding consumer perceptions and their response to alternative information disclosures.
Plaintiffs argued that, because Hanssens’ expertise is in marketing, not privacy, he should not be permitted to assess consumers’ understanding of Amazon’s privacy policies. But Hanssens does not opine regarding how or whether consumers understood Amazon’s disclosures. Rather, he designed and conducted two surveys, one to see whether providing additional information related to Amazon’s use of Alexa voice recordings impacted consumers’ decisions to register an Alexa device (“Materiality Survey”) and the second to test consumers’ awareness of information regarding how Alexa works and their satisfaction regarding the ease of finding that information (the “Awareness Survey”). Hanssens has knowledge and expertise in consumer marketing and survey design sufficient to offer an expert opinion in this case.
Plaintiffs also objected to Hanssens’ opinion that “individualized inquiry is needed to assess a particular Proposed Class Member’s awareness of and attitude toward a particular Alexa feature.”
The objection was abandoned in reply and is overruled. Hanssens describes the data and evidence that led him to that conclusion, including his own survey results.
B. Materiality Survey
Plaintiffs argued that Hanssens’ Materiality Survey is irrelevant because it tests a factual scenario that does not apply to any potential class member, one in which the Alexa-enabled device has already been purchased and the consumer must now decide whether to register the device. Although it is possible that a consumer could review Amazon’s policies before purchasing a device, the scenario Hanssens tested appears to be the most common way in which a user becomes familiar with those policies.
Hanssens ultimately concluded that “the likelihood to register an Alexa Device was statistically indistinguishable between the Test Group (which was shown additional information about Amazon’s practices) and the Control Group.” While the survey results and the conclusion drawn therefrom do not definitively resolve the issue of whether consumers would alter their behavior in the face of effective disclosures, they do suggest that the specific alterations Hanssens tested would not impact consumer behavior. To that extent, they are relevant.
The problem is that the survey that generated the data underlying Hanssens’ conclusions is unreliable. Hanssens used a participant panel that was already predisposed to share information, excluded anyone who had never purchased or lived with an Alexa device (decisions that may correlate with a heightened concern for privacy), excluded anyone who was uncomfortable sharing personal information (a defect compounded by the fact that demographic information was requested at the beginning of the survey), and excluded anyone who took the time to read the disclosures. Having disqualified 95% of the respondent pool, many for reasons that could bias the responses to the main question of the survey, the results of the survey did not reliably reflect consumer reaction to the tested changes in disclosures.
C. Awareness Survey
Hanssens’ awareness survey was designed to test Plaintiffs’ contention that consumers are unaware that Alexa records, transcribes, and stores voice interactions even when the recordings are not intended for Alexa, that the recordings and transcriptions are stored and used by Amazon forever, and that human reviewers listen to and annotate the voice recordings. The survey also assesses whether consumers find these practices acceptable and whether consumers are satisfied with the availability of information regarding Alexa’s features. Plaintiffs argued that the survey results are irrelevant because it is based on consumer knowledge in 2024 and/or at the time they registered their first Alexa device (if in or after 2019).
While this choice means that the survey results reflect consumer knowledge that has been bolstered by five to ten years of disclosures and may not accurately reflect consumer knowledge when Alexa devices were first introduced, it did not make the results irrelevant. The proposed classes undoubtedly include individuals who first purchased their devices in the studied time frame. While the survey is not coextensive with the class period and cannot reflect the information known to all class members, the results shed light on consumer awareness of the practices covered by the survey.
Plaintiffs further argued that the Awareness Survey is unreliable because Hanssens did no research or follow-up questioning to confirm the respondents’ recollections, as represented in their survey responses. He did, however, limit the time frame of the questions to five years. As long as a “survey was conducted in accordance with generally accepted survey principles and that the results were used in a statistically correct manner . . ., technical inadequacies in the survey, including the format of the questions or the manner in which it was taken, bear on the weight of the evidence, not its admissibility.”
Held
The Court granted in part and denied in part Plaintiffs’ Daubert motion regarding Dr. Dominique Hanssens’ opinions.
Key Takeaway:
Shaky but admissible evidence is to be attacked by cross examination, contrary evidence, and attention to the burden of proof, not exclusion. That the opposing party can poke holes in a survey’s design and construction is not surprising: surveys are a scientifically constructed sampling method and, like any scientific method applied in the social sciences, there are bound to be limitations, restrictions, and flaws.
Please refer to the blog previously published about this case:
Plaintiffs Hyundai Motor Company and Hyundai Motor America, Inc. (collectively “Hyundai Motor” or “Plaintiffs”) are one of the largest automobile manufacturers worldwide, with vehicle sales in over 150 countries.
Defendant Hyundai Technology is a manufacturer and seller of consumer electronics products including tablets, laptop computers/notebooks, desktop computers, monitors, digital storage, cell phones, and accessories.
The Plaintiffs filed a trademark infringement suit against the Defendants for “using” the Hyundai name to sell their technology products.
Defendants offered Mark Keegan‘s testimony to refute Plaintiffs’ allegations that Defendants’ conduct dilutes Plaintiffs’ HYUNDAI Mark. Plaintiffs filed a motion in limine to exclude the testimony of Keegan.
Marketing Expert Witness
Mark Thomas Keegan has over 23 years of experience conducting consumer research, including being deposed and testifying at trial. Keegan earned his juris doctorate degree from Brooklyn Law School, has certifications in marketing knowledge and principles, and has completed post-graduate programs addressing market research processes.
Keegan concluded that Plaintiffs’ allegations of dilution by tarnishment with respect to Defendant Hyundai Technology’s product user reviews do not “materially impact relevant consumer perceptions of Hyundai Motor, and as such, do not substantively impact the marketplace in which Hyundai Motor operates.” Keegan’s opinion relied on a study he conducted involving 850 participants identified as “likely purchasers of the Defendants’ products” based on their prior technology purchases.
Keegan stated that he designed his survey in accordance with a combination of guiding principles, including survey research conducted for litigation purposes, relevant treatises in the field, including those from the American Bar Association, and industry leaders in market research.
Plaintiffs argued that Keegan’s survey failed to employ well-established or reliable methodologies and did not rely on a representative sample because, among other things, 41.8% of respondents were age 61 or older.
The Court, however, found that Keegan’s opinions are relevant as they address “consumer impressions of the Hyundai Motor brand,” which is a central issue to the underlying case. The arguments made by Plaintiffs are all issues to be decided by the jury based on credibility and weight.
Held
The Court denied Plaintiffs’ motion in limine to exclude the testimony of Mark Keegan.
Key Takeaway
Expert opinion testimony is relevant if the knowledge underlying it has a valid connection to the pertinent inquiry. And it is reliable if the knowledge underlying it has a reliable basis in the knowledge and experience of the relevant discipline.
Case Details:
Case Caption:
Hyundai Motor Company V. Hyundai Technology Group, Inc.
State of Connecticut and Federal Trade Commission, sued Chase Nissan LLC, d/b/a Manchester City Nissan (“MCN) and multiple individuals, alleging that MCN, along with others, acted together to defraud thousands of consumers. The Plaintiffs alleged that the Defendants charged consumers for additional products or services (“addons”) that consumers never agreed to purchase. The Plaintiffs claimed that the Defendants effected unauthorized charges in multiple ways, including add-ons inserted into unaware consumers’ closing documents or charging consumers for add-ons that MCN told consumers were free.
Plaintiffs’ expert, Dr. Jessica Broome, conducted a customer experience survey about add-on products or services offered at MCN (the “Broome Survey”).
The Defendants argued that the methodology Broome applied to her survey was significantly flawed, and therefore, the results and conclusions were insufficiently probative.
Survey Research Expert Witness
Dr. Jessica Broome received a PhD in Survey Methodology from the University of Michigan, an MS in Applied Social Research from Hunter College of the City University of New York, and a BA in Sociology from Connecticut College. She has worked as a primary researcher for the past 24 years, designing and conducting quantitative (survey) and qualitative (focus groups, ethnographies, interviews) research for clients in a range of sectors.
Specifically, the Defendants argued that (1) the Broome Survey included misleading questions; (2) the Survey disclosed the FTC as the sponsor and the purpose of the survey; (3) that respondents were able to change their previous answers; and (4) that the population selected was underinclusive.
A. Question A1 is Clear and Unambiguous
Question A1 stated: “Did you agree to pay extra for any of the following add-on products or services when purchasing this vehicle?” Respondents were then presented with a list of eleven possible add-on products and services and, for each, asked to answer “Yes,” “No,” or “Not Sure.”
Based upon the responses received to Question A1, Broome concluded that “Manchester City Nissan charged the vast majority of customers surveyed (88%) for at least one add-on that they did not agree to pay extra for or led customers to believe that the add-on was required rather than optional.”
Broome further concluded, based upon respondents’ answers to Question A1, that “Manchester City charged a substantial percentage of customers surveyed (42%) for multiple add-ons that they did not agree to pay extra for or led customers to believe that the add-ons were required rather than optional.”
The Defendants asserted that this is an ambiguous question and unclear about the very thing that the survey was trying to measure: whether consumers paid for an add-on product or service without agreeing to do so.
When an unclear question is included in a survey, it may threaten the validity of the survey by distorting the responses or by error if the respondents do not understand. However, there is no indication that the questions were misleading or that the respondents did not understand the question.
As explained by Broome, her team conducted two rounds of cognitive interviews to check the understanding of the questions. After a pretest respondent completed each survey question online or over the phone, the interviewer posed a series of follow-up questions, called “probes”, aimed at determining whether the survey questions were understood by respondents as intended.
Additionally, small ambiguities in surveys go to the weight of the survey as evidence, not to its admissibility.
B. Disclosure of the FTC as Sponsor is Consistent with Reliable Survey Methodology
Second, the Defendants argued that the survey disclosed the FTC as the sponsor and thus is unreliable. The Defendants asserted that all the individuals who made up Broome’s survey population knew that the FTC sought the information regarding car purchases. The Defendants claimed that identifying the FTC as a sponsor injects potential bias into the survey by suggesting certain preferred responses.
Courts from across the country have repeatedly accepted as reliable consumer surveys that disclose the FTC as a sponsor where the surveyor has taken steps to hide the purpose of the survey. Broome asserted that she took steps to hide the purpose of the survey. The invitation included no references to litigation against MCN and stated that the purpose was to learn about general car purchases over the past five years.
The survey did not focus on MCN but showed a randomized list of four local dealerships. Additionally, the FTC may bring litigation before a consumer survey is published.
C. Backwards Navigation is Consistent with Reliable Survey Methodology
Third, the Defendants argued that the backward navigation allowed consumers to change their answers and thus is unreliable. The Defendants claimed that later questions could suggest certain conclusions regarding whether the consumer agreed to pay extra for the add-ons. Because the consumers had the ability to navigate backwards on the survey, the responses potentially could be skewed.
The defense, however, presented no evidence that the backward navigation is a design flaw. The defense retained a survey expert to prepare a rebuttal of Broome’s work, yet they did not use their expert’s opinion in their motion. Plaintiffs argued that Broome utilized standardized and approved methodology.
The Court held that Broome’s work is consistent with reliable methodology. Further, issues raised by the Defendant would go to weight rather than admissibility.
D. The Survey Population Selected is Consistent with Reliable Survey Methodology
Fourth, the Defendants argued that the consumer population was underinclusive; thus, the survey is unreliable.
The Defendants asserted that the target population was adults who purchased a vehicle from MCN between January 2019 and December 2023 and were charged for at least one add-on. The defense claimed that Broome pulled potential participants from lists provided to her by the FTC for all add-on transactions at MCN, and this population excludes all customers who purchased a vehicle and did not purchase an add-on. They asserted that this population, by design, intentionally excluded customers who, if included, would have greatly decreased Broome’s numbers.
Broome’s survey was not intended to represent consumers who were not charged for add-ons so there is no reason to include such consumers in the target population. Even if Plaintiffs were to expand the target population as suggested the methodology would find similar results. The Defendants’ argument that Broome should have surveyed all consumers is, therefore, without basis.
The Court held that Broome’s survey is designed with methodology consistent with the Reference Guide on Survey Research and legal precedent regarding FTC surveys. In other words, Broome’s technique used reliable survey methodology.
Held
The Court denied the Defendants’ motion to preclude the testimony of Jessica Broome.
Key Takeaway
Broome’s survey followed correct methodology and legal best practices. Sponsorship by a governmental third party may not automatically suggest a certain kind of preferred response. Moreover, courts have repeatedly accepted consumer surveys that disclose the FTC as the sponsor.
This case involves alleged violations of the Fair Credit Reporting Act. The Plaintiff, Fabian Huizar, claims that Experian Information Solutions repeatedly reported inaccurate information on his credit report relating to a car loan that was the subject of a judgment rendered in state court. Huizar hired experts, Douglas Hollon and Evan Hendricks to help him prove his case, and Experian filed a motion to exclude or limit their testimony.
Consumer Credit Expert Witness
Douglas A. Hollon holds a Bachelor of Science in Business Finance. He has received FCRA certifications from the Consumer Data Industry Association, and he has earned additional certifications.
He has worked in the consumer finance reporting industry since 2005, when he began working for Experian. His work for Experian spanned 14 years from 2005 through 2019 in the National Consumer Assistance Center—Experian’s main dispute processing center—where he helped consumers “resolve their issues” and “[p]rovid[ed] leadership advice to current supervisors.”
He handled “escalated credit report disputes” submitted on consumers’ behalf by attorneys and government entities. He has also received “specialized training involving fraud (identity theft) disputes” and testified on Experian’s behalf as a Rule 30(b)(6) witness. In addition to his experience at Experian, he has studied “regulatory agency publications, case law, deposition transcripts, company manuals or publications, and other related documents,” contributing to his “extensive knowledge of other Consumer Reporting Agencies’ (CRAs) and Data Furnishers’ credit dispute operations.” Since 2020, Hollon has been the owner of Credit Experts of North Texas, LLC. Over the course of his career, he has “assisted tens of thousands of customers.”
Evan D. Hendricks has worked in the field of data privacy and credit reporting for over forty years. He was the Editor and Publisher of Privacy Times from 1981-2013.
He has consulted on FCRA cases for over 30 years and has served as an expert witness well over 100 times. Hendricks has testified before Congress and the Federal Trade Commission dozens of times on issues relating to credit reporting and the importance of credit scores. He is the author of a book on how credit scores work and credit reports work.
First, Experian stated that Hollon is unqualified to provide his opinion on the correct interpretation of the Tippecanoe Circuit Court orders which are the subject of this litigation. The Court held that Hollon’s decade-plus experience working on credit reporting at Experian qualifies him to opine on how Experian would have read and understood the legal orders as well as how reporting should have been conducted following a review of the orders.
Experian next argued that Hollon is unqualified to opine on whether Experian’s processes and procedures resulted in inaccurate, damaging information remaining in Huizar’s Experian file. Because the jury can assess Huizar’s own damages testimony and Hollon adds no specialized knowledge or experience related to damages, he will not be allowed to provide expert testimony on Huizar’s damages, emotional or otherwise. Accordingly, any statements concerning damages, emotional or otherwise, included in Hollon’s report will not be considered by the Court.
Experian’s motion to exclude also attacked Hollon’s methodology and argued that the Hollon Report “totally failed to outline any reliable principles or methods.” However, Hollon drew on his decade of experience working on credit reporting at Experian to review the materials in this case and form an expert opinion on Experian’s alleged actions. Although his methodology was not highly technical, the Court considered it reliable for forming an expert opinion.
B. Evan Hendricks
Experian argued that Hendricks is unqualified to provide expert opinion on several topics for which he opined. First, Experian argued that, like Hollon, Hendricks was unqualified to provide his opinion regarding how Experian should have interpreted the Tippecanoe Circuit Court orders.
However, the Court held that Hendricks’ extensive knowledge of credit reporting and credit reporting agencies will be helpful to the trier of fact. And while Experian is correct that Hendricks does not have a specialized background in law, he is qualified to opine as to how Experian, a consumer reporting agency, should have viewed the legal orders at issue in this case.
Hendricks’ experience and expertise also qualify him to provide his opinion on how Experian’s reporting would have impacted Huizar. In 2003, Hendricks provided testimony to the House Financial Services Subcommittee on Financial Institutions & Consumer Credit regarding “The Role of FCRA in the Credit Granting Process.”
While Hendricks will be allowed to offer his opinion on how creditors would have viewed Experian’s reporting, he will be prohibited from offering opinions on any emotional or psychological harm suffered by Huizar.
As for the reliability of Hendricks’ methodology, the Court found Hendricks’ methodology of applying his experience to the facts and evidence reliable. However, Hendricks was not permitted to provide testimony about prior cases, administrative actions, and consent decrees because an information dump from long ago cases will more likely confuse the jury than provide helpful information relevant to this case.
Finally, Experian argued that Hendricks should be precluded from testifying about Experian’s knowledge, motivations, intentions, objective state of mind, and subjective beliefs. As the parties agreed that Hendricks should not testify as to the CRAs’ state of mind, Hendricks will not be permitted to provide testimony on that topic.
Held
The Court granted in part and denied in part Experian’s motion to exclude or limit the testimony of Plaintiff’s expert witnesses, Douglas Hollon and Evan Hendricks.
Key Takeaway:
When a qualified expert uses their expertise and experience to arrive at an opinion based on an assumed set of relevant facts, that is a reliable methodology. An expert’s reliance upon his or her experience to assess the relevant documents has been repeatedly viewed as a reliable methodology in various settings.
This matter arises out of Plaintiff Tyler Oatway’s July 2023 ill-fated attempt to purchase a car from used car dealer Definitive Motors. Definitive Motors obtained Oatway’s credit reports from the three major credit reporting agencies (“CRAs”) through Defendant 700 Credit, LLC, which is a reseller of consumer information.
According to Oatway, 700 Credit and Experian Information Solutions, Inc. (“Experian”) falsely reported him as “deceased,” and Oatway was unable to purchase the vehicle. Subsequently, Oatway filed suit under the Fair Credit Reporting Act (“FCRA”).
700 Credit filed a motion to exclude the opinions of Oatway’s expert Douglas Hollon.
Consumer Credit Expert Witness
Douglas A. Hollon holds a Bachelor of Science in Business Finance. He has received FCRA certifications from the Consumer Data Industry Association, and he has earned additional certifications.
He has worked in the consumer finance reporting industry since 2005, when he began working for Experian. His work for Experian spanned 14 years from 2005 through 2019 in the National Consumer Assistance Center—Experian’s main dispute processing center—where he helped consumers “resolve their issues” and “[p]rovid[ed] leadership advice to current supervisors.”
He handled “escalated credit report disputes” submitted on consumers’ behalf by attorneys and government entities. He has also received “specialized training involving fraud (identity theft) disputes” and testified on Experian’s behalf as a Rule 30(b)(6) witness. In addition to his experience at Experian, he has studied “regulatory agency publications, case law, deposition transcripts, company manuals or publications, and other related documents,” contributing to his “extensive knowledge of other Consumer Reporting Agencies’ (CRAs) and Data Furnishers’ credit dispute operations.” Since 2020, Hollon has been the owner of Credit Experts of North Texas, LLC. Over the course of his career, he has “assisted tens of thousands of customers.”
Hollon opined that 700 Credit “failed to maintain adequate procedures to ensure accuracy in its reports regarding Plaintiff.” Hollon also opined that 700 Credit “does not have any policies or procedures to review consumer reports with a deceased notation before sending the reports to third parties.”
Hollon’s Opinion is Excluded in Part
700 Credit’s Arguments
700 Credit filed a motion to exclude Hollon’s opinions in their entirety for two reasons. First, it contended that Hollon “improperly offers a legal opinion that the Red Flag Summary qualifies as a ‘consumer report’—a statutory term whose interpretation is reserved for the Court.” Second, 700 Credit avers that Oatway “failed to make [Hollon] available for a deposition after 700 Credit timely noted his deposition to occur before the discovery cutoff.”
Because the characterization of the Red Flag Report as a consumer report is a legal issue as set forth above, the Court excluded Hollon’s opinion on that issue. However, since the Court found that the Red Flag Report is a consumer report, it did not exclude his opinions as unreliable solely because they flow from that conclusion.
The Court also excluded as a legal conclusion Hollon’s opinion that 700 Credit is legally responsible “for the data they report” and did not fulfill its legal obligation by simply forwarding what it receives from another CRA.
Turning to 700 Credit’s request that Hollon be excluded as a discovery sanction, the Court found that 700 Credit is not entitled to such relief. 700Credit relies only on Federal Rule of Civil Procedure 37(d)(1)(A)(i) in support of its request, but as the language it quotes makes clear, that rule applies only when “a party or a party’s officer, director, or managing agent . . . fails . . . to appear for that person’s deposition.” Hollon is not a party or other listed person, so this section is inapplicable.
Even if 700 Credit had relied on an applicable rule—which it did not—it would not be entitled to exclusion. True enough, Rule 26(b) requires parties to make their experts available for deposition. However, “the Rule 37(c)(1) sanction” of exclusion “is not triggered by a violation of Rule 26(b).”
Oatway has not met his burden under Rule 702
The Court found that Oatway has not met his burden under Rule 702 with respect to much of Hollon’s proposed testimony.
First, much of Hollon’s report is commentary on other evidence in the record. The Court also found that some of Hollon’s opinions are obvious and thus not helpful to the trier of fact, including that 700 Credit had inconsistent information about Oatway because “dead persons do not apply for credit or make payments on loans.”
Hollon also failed to explain how he reached his conclusions. To begin with, Hollon did not explain what 700 Credit should have done—or required its customers (the furnishers of the information) to do—or whether its process deviated from industry standards. He failed to address altogether the reliability or trustworthiness of the sources from whom 700 Credit obtained its resold information (e.g., Experian and the Social Security Administration). Instead, Hollon pronounced in conclusory fashion that 700 Credit’s practice of transmitting information it received from “various sources” “failed to assure maximum possible accuracy.”
In addition, Hollon opined that 700 Credit did not conduct a reasonable investigation when Oatway complained, but again, he did not explain his methodology or his conclusory opinion.
Last, Hollon opined to some limited degree on the harm Oatway suffered and the harm consumers typically suffer as a result of inaccuracies on consumer reports. Oatway can speak to his own damages, and Hollon’s recitation of his damages is unhelpful (especially considering that Hollon is not qualified to opine on Oatway’s emotional distress), so the Court excluded that portion of Hollon’s damages opinion. The Court found, however, that Hollon is qualified to speak, in general terms and as found relevant at trial, about the sort of damages that are typically caused by errors on consumer reports.
Held
The Court granted in part and denied in part 700 Credit’s motion to exclude the opinions of Oatway’s expert Douglas Hollon.
Key Takeaway:
The role of an expert is not to “simply comment on all the evidence,” and an expert’s mere recitation of facts, detached from accompanying analysis, is improper under Rule 701.
Case Details:
Case Caption:
Oatway V. Experian Information Solutions Inc Et Al
Linda Sunderland and Benjamin Binder, amongst others, filed this putative class action against Defendant PharmaCare U.S., Inc., asserting consumer protection and breach of warranty claims based on its Sambucol product, a dietary supplement that is alleged to contain a proprietary extract of black elderberry.
Defendant filed a motion to exclude Plaintiffs’ experts, Dr. J. Michael Dennis (“Dr. Dennis”) and Mr. Colin Weir (“Mr. Weir”). Dennis performed a consumer perception survey, a materiality survey, and opined on damages. Weir helped to design and support Dennis’ methodology on damages.
Survey Research Expert Witness
J. Michael Dennis is the Senior Vice President of the National Opinion Research Center, which is a survey research organization affiliated with the University of Chicago. Also, Dennis has worked in survey research for more than 20 years, has authored more than 60 articles, and has been found qualified by numerous courts to provide expert opinions on consumer surveys.
Colin B. Weir is President at Economics and Technology, Inc., a research and consulting firm specializing in economics, statistics, regulation and public policy. He conducts economic, statistical, and regulatory research and analysis and often testifies as an expert witness before state and federal courts.
Moreover, his experience includes work on a variety of issues, including: “calculating economic harm and damage, and analyzing liquidated damages provisions; lost profits; false claims; diminution in value; merger/antitrust analysis; Early Termination Fees (ETFs); Late Fees; determination of Federal Excise Tax burden; and development of macroeconomic analyses quantifying the economic impact of corporate actions upon the US economy and job markets.”
To begin with, Defendant raised several grounds for why these experts’ opinions should be excluded. First, Defendant argued that Dennis’ consumer perception survey was unreliable, biased, and misleading because the statements used in the survey did not match the Products’ labels (i.e., “this is the unique black elderberry extract” as opposed to “Sambucol is the unique black elderberry extract”). Thus, Defendant argued that the questions posed to survey participants do not match Plaintiffs’ theory of liability.
Second, Defendant argued that Dennis’ materiality survey is similarly unreliable because the design shown to the survey participants was manufactured for the survey and not an image of the actual product or packaging.
Third, Defendant argued that Dennis’ damages model is irrelevant and unreliable because it is based on the tested claim, not the class claims.
Finally, Defendant argued that Dennis’ price premium model is irrelevant because it fails to distinguish between injured and uninjured class members, it is not sufficiently defined, and it is based on a “willingness-to-pay” benchmark rather than measuring an actual price premium.
After reviewing the parties’ arguments and briefing on these issues, the Court agreed with the many district courts in this circuit that the more appropriate place to consider these arguments is on how much weight to give to the competing expert testimony, rather than their admissibility.
Held
The Court denied the Defendant’s motion to exclude the testimony of J. Michael Dennis and Colin Weir.
Key Takeaway:
Many of the arguments for exclusion of the testimony is not on whether the types of surveys are acceptable, but whether certain criteria used in the respective surveys pass muster. However, the Ninth Circuit has stated that as a general matter, “challenges to survey methodology go to the weight given the survey, not its admissibility.”
