This matter arises from a July 30, 2022, lightning strike in Water Valley, Mississippi, which caused a fire and ultimately the destruction of a warehouse and its contents, including automotive components owned by the Plaintiff Kodaco and stored in the warehouse.
Kodaco claims “approximately $3,500,000.00 worth of business property” was stored at the subject warehouse, which was owned and operated by the Defendant Warehouse 72, at the time the warehouse burned. The Plaintiff alleged claims against the Defendants for breach of contract, negligence, breach of bailment, and negligent misrepresentation.
The parties have filed competing motions seeking to exclude or limit the testimony of experts in the areas of fire origin and cause investigation and fire protection engineering— the Plaintiff seeks to exclude or limit certain opinions of Neil Wu‘s testimony and the Defendants seek to exclude testimony expected to be offered by Phillip Keena. Both motions sought primarily to ensure that the opposing expert witness does not offer impermissible legal conclusions.
The Plaintiff objected to certain testimony and conclusions in Wu’s deposition and expert report that the Plaintiff characterized as impermissible legal conclusions. The Defendants have agreed that “Wu does not intend to offer any ‘legal opinions’ and Defendants do not intend to elicit such testimony” at trial.
The Defendants argued that Keena’s proffered testimony and conclusions veer into the realm of legal conclusions; they further argued that his testimony did not go far enough into the standards a reasonably prudent warehouser would have implemented under similar circumstances as those existing in this case. As is the case with the Defendants’ expert, the Plaintiff conceded that Keena will not offer legal conclusions at trial.
Fire Investigation Expert Witnesses
Neil Wu is a Principal at SRE and the founder of the firm. He holds a Bachelor of Science and a Master of Science degree in Fire Protection Engineering, both from the University of Maryland. He is a registered professional engineer in 14 states, including the District of Columbia. Wu is a member of the International Association of Arson Investigators (IAAI), National Association of Fire Investigators (NAFI), National Fire Protection Association (NFPA), Society of Fire Protection Engineers (SFPE), and has served on multiple technical committees.
Philip Keena holds two degrees relevant to the issue at hand, an associate degree in Fire Administration and a bachelor’s degree in Fire Protection and Safety Engineering Technology. The International Association of Arson Investigators (IAAI) has also certified him as a fire investigator, and he has been a firefighter for thirty-one years. He currently works for Rimkus, a forensic engineering company.
First, the Court holds that the concessions each party has made regarding their expert’s testimony largely renders the competing motions to exclude as moot. Both experts are highly qualified and the Court finds their knowledge will help the trier of fact to understand the evidence or to determine a fact in issue in this case, and that their testimony satisfies both Rule 702 and Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 113 S. Ct. 2786, 125 L. Ed. 2d 469 (1993). Moreover, any arguments for exclusion of testimony, particularly in light of the parties’ concessions, go to the “weight to be assigned that opinion rather than its admissibility and should be left for the jury’s consideration.”
Further, the Court is confident that it can protect against the possibility of objectionable expert testimony at trial without resorting to a blanket ban on all testimony by either side’s expert witness.
Finally, and most crucially given the parties’ primary objections, the Court notes it is axiomatic that “experts cannot ‘render conclusions of law’ or provide opinions on legal issues.” Accordingly, neither Wu nor Keena will be permitted to offer legal conclusions at trial and counsel will not seek to elicit any such testimony. The Court does note, however, that while experts cannot offer conclusions of law, “an opinion is not objectionable just because it embraces an ultimate issue.”
The parties may offer timely objections to any such testimony at trial. The Court therefore granted each party’s motion to exclude to the extent each motion seeks to prohibit testimony that constitutes a legal conclusion; to the extent that either motion seeks further limitations on testimony, that request is denied at the present juncture. The parties may offer timely objections at trial to any testimony they deem objectionable.
Held
The parties’ competing motions to exclude expert testimony of Defendant’s expert Neil Wu and Plaintiff’s expert Philip Keena is granted in part.
Key Takeaway:
Ideally, testimony and conclusions should not veer into the realm of legal conclusions. The Court does note, however, that while experts cannot offer conclusions of law, “an opinion is not objectionable just because it embraces an ultimate issue.”
Case Details:
Case Caption:
Kodaco Co., Ltd. V. Valley Tool, Inc. Et Al
Docket Number:
3:23cv211
Court:
United States District Court, Mississippi Northern
In 2007, Plaintiff Ghirardelli and Defendant, GXO Warehouse Company, signed a services agreement for Defendant to provide warehouse management services at a warehouse in Lathrop, California (the “Services Agreement”). Defendant’s role was that of a third-party logistics provider (“3PL”), and the services it was to provide included the implementation of a computerized warehouse management system (a “WMS”). The parties contemplated Defendant would utilize a proprietary WMS it had developed called WM10, but the implementation was not as successful as the parties anticipated. The parties’ business relationship soured which led to them asserting claims against each other in this case.
Defendant designated Dale Warnke as an expert to testify about various aspects of Defendant’s performance. Plaintiffs filed a motion based on Rule 702 of the Federal Rules of Evidence to exclude some of Warnke’s opinions.
Warnke’s CV stated he was a “supply chain-logistics associate” at an engineering firm. In his initial report, he offered various opinions related to (1) the impact Plaintiffs’ choices regarding construction and other matters had on Defendant’s performance, (2) other difficulties Defendant faced that were not of its making, and (3) the quality of Defendant’s performance. Plaintiffs argued that Warnke’s opinions should be struck in their entirety because he was not qualified to give them. Alternatively, they argued certain opinions were impermissible legal opinions or opinions about a party’s intent or state of mind.
Supply Chain Expert Witness
Dale Warnke began his career in 1973 at Roadway Express, one of the largest carriers in the industry. In 1995, he moved to FedEx, where he worked for about 22 years in its third party logistics provider (“3PL”) arm, rising through the ranks to senior management positions overseeing numerous warehouses. Warnke boasts of hands-on work and management experience in both warehouse and carrier operations covering all aspects of the inventory lifecycle, from inventory receipt at the inbound receiving docks, putaway, inventory control at the warehouse, picking orders, staging and loading for outbound shipping, all the way to shipment to the end customer. Warnke received a Certification on Supply Chain Modeling Management through a course taught by an M.I.T. professor. Warnke also received a Logistics Design and Application Certificate from the University of Tennessee. He was previously a member of the Council of Logistics Management, and he presented to the group during the national meeting. Warnke’s experience in the supply chain industry did not end with his departure from FedEx in mid-2017. Warnke works with professors at both Michigan State University (“MSU”) and Eastern Michigan University (“Eastern Michigan”) in the schools’ respective supply chain programs. Warnke guest lectures undergraduate classes at both universities on industry trends and on applying academic principles to the real world.
Discussion by the Court
Plaintiffs cited Warnke’s lack of experience to assert that he lacked the necessary qualifications to offer opinions in this case.
Warnke’s experience can be summarized as follows: From 1973 to 1995, Warnke worked at Roadway Express. There, he was responsible “for the operations and startup of terminals which were very, very much like warehouses” with “the biggest distinction” between them being that, in a terminal, “inventory . . . always pretty much remains in motion” with very little intentional storage. After working at Roadway Express for more than twenty years, Warnke worked for FedEx. For most of his 20-year tenure there he worked in a division that provided 3PL services to other companies. In other words, he was employed by FedEx and assigned to work on behalf of one or more of its customers, such as General Motors or Chrysler, in areas related to warehouse operations and logistical services. His work in this capacity involved both start-up of new warehouses and the operations of other warehouses. He was also involved in utilizing WMSs, and had responsibility for implementing them, although he has not designed them.
According to Plaintiffs, Warnke’s experience at Roadway Express was of no relevance considering he was responsible for terminals and not warehouses. Despite Warnke’s involvement in starting two warehouses while working at FedEx, Plaintiffs argued that the experience was of minimal value because that involvement was more than twenty years ago. Plaintiffs contested the sufficiency of Warnke’s extensive experience in operating warehouses and objected to his lack of specific experience in the food and beverage industry.
Plaintiffs asserted that in order to qualify, the expert had to have experience relevant to the recent start-up of a warehouse in the food and beverage industry. The Court held that just because a “more qualified” expert with experiences more narrowly tailored to the case can be envisioned did not mean that a “less qualified” expert cannot offer opinions on the subject. In other words, Plaintiffs have simply (1) defined the relevant topics very narrowly and (2) described Warnke’s experiences as different, without explaining why Warnke’s experiences are irrelevant or inadequate, or why his experiences are too dissimilar or too general, to permit him to testify.
The Court concluded that Warnke’s experience was sufficient for him to testify citing his extensive experience with warehouse operations and involvement in starting two warehouses. Plaintiffs were free to impeach Warnke by pointing out the details of his experience and arguing to the jury that his testimony should not be credited.
Plaintiffs also pressed for the exclusion of some of the opinions in Warnke’s supplemental report dated October 17, 2023. Warnke’s supplemental report contained nine “responsive opinions” that were intended to address opinions offered by Plaintiffs’ expert, Robert Handfield. Plaintiffs argued that Warnke’s third and ninth responsive opinions were improper legal opinions.
Warnke’s third responsive opinion was regarding the expiration of the Services Agreement that originally governed the parties’ relationship. Evidence in the Record suggested the parties’ performance continued after the Services Agreement expired. In Count I, Plaintiffs alleged Defendant breached both the Services Agreement and an implied agreement formed after the Services Agreement expired. In denying summary judgment, the Court concluded the jury would have to (1) decide if the parties had an implied agreement that continued after the Services Agreement expired and (2) ascertain the terms of any implied agreement it found was created. Warnke’s third responsive opinion stated his view regarding whether the parties agreed to certain terms after the Services Agreement expired, and to that extent, Plaintiffs argued it allegedly constituted a legal opinion that Warnke could not offer. However, within that discussion, Warnke opined that “[t]he industry does not view the WRC KPI ranges ranges as default KPIs if a customer and 3PL cannot agree.” This opinion (1) depended on Warnke’s expertise about industry standards and practices, (2) was not based on legal considerations, and (3) corresponded to Handfield’s contrary opinion, which the Court held (in a separate Order) was admissible. Accordingly, Warnke was allowed to testify about this aspect of his third responsive opinion.
In his ninth responsive opinion, Warnke disagreed with Handfield that it was reasonable for Defendant to refuse to pay Plaintiffs’ invoices. The Court had struck Handfield’s opinions on the topic, and it struck Warnke’s ninth responsive opinion for the same reasons.
In his supplemental report, Warnke offered his view of a lawsuit in which Schnucks sued Defendant and drew conclusions about the similarities between the circumstances giving rise to the two lawsuits and the implications of the outcome for this case. Plaintiffs argued this was improper because Warnke was not a lawyer and had no legal training. Defendant pointed out that Warnke explicitly stated his opinion responded to paragraph 120 in Handfield’s report, in which Handfield provided similar opinions and concluded this case and the Schnucks case were similar. Defendant contended that if Handfield could testify about the Schnucks case, then so could Warnke. In their Reply Suggestions, Plaintiffs incorrectly contended Defendant did not dispute that Warnke’s opinion was inadmissible. In the absence of an argument to the contrary, the Court agreed with Defendant: if Handfield opined about the Schnucks case, then so could Warnke.
Plaintiffs identified three instances in which they believed Warnke impermissibly testified about a party’s intent or state of mind and asked the Court to exclude such opinions. The first instance appeared in the Summary and Conclusions section of Warnke’s report, where he opined that Plaintiffs “had a clear priority and direction to implement the Tracy, California facility on a strict timeline in spite of delays and their resultant effects, and Plaintiffs did not waiver or consider alternatives or contingencies.” The Court found that this statement merely described the instructions Plaintiffs gave to Defendant and did not say anything about either party’s intent or state of mind. Moreover, as a summary or conclusion, the statement was based on the remaining portions of the Report where the parties’ actions were set forth in greater detail.
The second instance appeared in Warnke’s supplemental report, where he (1) observed a witness (G. Schlangen) testified that Defendant “remained committed to the relationship with Plaintiffs and was driving further improvements” and (2) “agreed” with Schlangen that Defendant “remained committed to the business relationship throughout its management” of the warehouse. Later, he opined that it was “a credit to Defendant that they remained committed to the operation while not being paid.” Defendant contended this testimony simply recounted Schlangen’s testimony. An expert could rely on witness testimony to support opinions within his area of expertise. Warnke mentioned Schlangen’s testimony to support his opinion that Schlangen was truthful, but the Court found that the opinion was not based on Warnke’s expertise and instead vouched for Schlangen’s truthfulness – which was clearly impermissible. Thus, it was held that Warnke could not testify that he agreed with Schlangen’s statement – and, because he could not testify that he agreed with the statement, he could not then testify that he believed Defendant should be credited for remaining committed to the project. And, given that Warnke could not offer those opinions, there remained no reason for him to recount Schlangen’s testimony.
Finally, at his deposition, Warnke testified that Defendant “did their level-headed best . . . to operate” and improve the warehouse. As demonstrated by the context, the Court held that this was not an opinion about Defendant’s state of mind or intent; instead, it was a conclusion based on Warnke’s consideration of Defendant’s attempts to make the warehouse operational.
The Court upheld the inadmissibility of the second of the three instances in which the Plaintiffs believed Warnke impermissibly testified about a party’s intent or state of mind.
Held
The Plaintiff’s motion to exclude some of Defendant’s expert Dale Warnke’s opinions was granted in part and denied in part by the Court.
The Court has not arrived on an outcome for this case since the remaining issues involved in this case still await resolution.
Key Takeaways:
The qualifications and expertise of an expert witness play a crucial role in determining the admissibility of their opinions. Despite some challenges to Warnke’s experience, the Court deemed his extensive background in warehouse operations and logistics, though not specifically tailored to the industry in question, as sufficient for him to provide testimony. Second, it’s essential that expert testimony remains within the scope of the witness’s expertise. Warnke was allowed to testify about industry standards and practices related to warehouse operations, as it fell within his area of knowledge. Finally, experts should refrain from offering legal opinions or vouching for witness truthfulness unless directly related to their expertise. The Court excluded certain opinions from Warnke’s testimony that were deemed impermissible legal opinions. Moreover, the relevance and recency of an expert’s experience are factors to consider, but do not necessarily disqualify them from testifying. Warnke’s past involvement in starting warehouses, even if more than twenty years ago, was still considered relevant. Parties have the right to challenge expert testimony, and in this case, the Plaintiffs contested some of Warnke’s opinions, leading to the court’s decision on their admissibility. Ultimately, the admissibility of expert testimony rests with the court, which considers various factors such as relevance, reliability, and the qualifications of the expert witness. The Court carefully weighed these factors in determining which opinions from Warnke were admissible.
Case Details:
Case Caption:
Lindt & Sprungli (North America), Inc. Et Al V. Gxo Warehouse Company
