Health & Sun Research, Inc. et al v. Designer Skin LLC

Filing 57

ORDER: Defendant Australian Gold, LLC's Motion to Exclude Testimony of Gary L. Raines (Doc. # 44) is DENIED WITHOUT PREJUDICE. See Order for details. Signed by Judge Virginia M. Hernandez Covington on 11/19/2013. (KAK)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
HEALTH & SUN RESEARCH, INC.
d/b/a Kava Kava Intl. and
Vegas Tan,
Plaintiff,
v.

Case No. 8:12-cv-2319-T-33MAP

AUSTRALIAN GOLD, LLC,
Defendant,
________________________________/
AUSTRALIAN GOLD, LLC,
Counter-Plaintiff,
v.
HEALTH & SUN RESEARCH, INC.
d/b/a Kava Kava Intl. and
Vegas Tan,
Counter-Defendant.
______________________________/
ORDER
This cause is before the Court pursuant to Defendant
Australian Gold, LLC’s Sealed Motion to Exclude Testimony of
Gary L. Raines (Doc. # 44), filed on August 16, 2013.
Plaintiff Health and Sun Research, LLC filed a sealed Response
in Opposition to the Motion (Doc. # 49), and on September 27,
2013, Australian Gold filed a sealed Reply (Doc. # 54).

For

the reasons that follow, the Court denies the Motion without
prejudice.1
I.

Background
On October 11, 2012, Health and Sun filed a three count

Complaint against Australian Gold asserting violation of the
Lanham

Act,

15

infringement

U.S.C.

under

§

Florida

competition. (Doc. # 1).
the

Complaint

and

1125(a),
Law,

common

and

law

common

trademark

law

unfair

Australian Gold filed an Answer to

asserted

the

affirmative

defenses

of

abandonment, laches, and trademark misuse. (Doc. # 27).

In

addition, Australian Gold lodged counterclaims against Health
and

Sun

for

trademark

infringement

and

abuse

of

process/trademark misuse. (Id.).
Health

and

Sun

has

retained

a

Certified

Public

Accountant, Gary Raines, to offer expert testimony at trial.
Raines’s resume (Doc. # 44-2 at 5), initial Expert Report
(Doc. # 44-2), rebuttal Expert Report (Doc. # 44-4), and

1

Although the parties’ submissions before the Court were
filed under seal, the Court declines to file the present Order
under seal. “The operations of the courts and the judicial
conduct of judges are matters of utmost public concern and the
common-law right of access to judicial proceedings, an
essential component of our system of justice, is instrumental
in securing the integrity of the process.” Romero v. Drummond
Co., 480 F.3d 1234, 1245 (11th Cir. 2007)(internal citations
omitted).
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deposition transcript (Doc. # 44-1) are before the Court.
Raines

does

not

purport

to

be

an

expert

on

trademark

infringement law. Nor does Health and Sun offer his testimony
on the issue of whether Australian Gold’s products infringe
Health and Sun’s marks.

Rather, Raines’s reports address the

issue of Health and Sun’s damages in the instance that
Australian Gold is found to have infringed Health and Sun’s
marks.
At this juncture, Australian Gold seeks an Order striking
Raines’s testimony based on a plethora of grounds, including
that “Raines fails every requirement of Rule 702.” (Doc. # 44
at 1).
II.

Discussion
The admissibility of expert testimony is governed by

Federal Rule of Evidence 702, which states that:
A witness who is qualified as an expert by
knowledge,
skill,
experience,
training,
or
education may testify in the form of an opinion or
otherwise
if:
(a)
the
expert’s
scientific,
technical, or other specialized knowledge will help
the trier of fact to understand the evidence or to
determine a fact in issue; (b) the testimony is
based on sufficient facts or data; (c) the
testimony is the product of reliable principles and
methods, and (d) the expert has reliably applied
the principles and methods to the facts of the
case.
Fed. R. Evid. 702.

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Rule 702 is a codification of the Court’s landmark case
of Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579
(1993).

In Daubert, the Court described the gatekeeping

function of the district court to ensure expert testimony and
evidence “is not only relevant, but reliable.” Id. at 589. As
stated in the Advisory Committee Notes accompanying Rule 702
of the Federal Rules of Evidence, “A review of the case law
after Daubert shows that the rejection of expert testimony is
the exception rather than the rule.”

See Advisory Committee

Notes to the 2000 Amendment to Rule 702.

In addition, the

trial judge is afforded broad discretion in deciding Daubert
issues. See Kuhmo Tire Co. v. Carmichael, 526 U.S. 137, 152
(1999).
In Rink v. Cheminova, Inc., 400 F.3d 1286 (11th Cir.
2005), the Eleventh Circuit set forth a three-pronged approach
for doing so:
To fulfill their obligation under Daubert, district
courts must engage in a rigorous inquiry to
determine whether: (1) the expert is qualified to
testify competently regarding the matters he
intends to address; (2) the methodology by which
the expert reaches his conclusions is sufficiently
reliable as determined by the sort of inquiry
mandated in Daubert; and (3) the testimony assists
the trier of fact, through the application of
scientific, technical, or specialized expertise, to
understand the evidence or to determine a fact in
issue.

-4-

Id. at 1291 (internal citations omitted).

The party offering

an expert has the burden of satisfying each of these elements
by a preponderance of the evidence. Id. at 1292; see also
Allison v. McGhan Med. Corp., 184 F.3d 1300, 1306 (11th Cir.
1999).
A.

Raines is Qualified

Raines is a decorated military veteran who, after serving
in

the

Vietnam

War,

obtained

a

Bachelor

of

Science

in

Accounting at Fairleigh Dickinson University and became a
Certified Public Accountant. (Doc. # 44-2 at 5).

He has been

employed as the Controller of a number of corporations, and,
at this time, he is the CFO of Nu-Meat Technology, Inc. (Id.).
Raines has prepared the financial statements of Health and Sun
for the past eight years.
In support of the Motion to Strike, Australian Gold
highlights

Raines’s

Australian

Gold

inexperience

focuses

on

the

with

trademark

following

law.

testimony

Raines’s deposition:
Q:
A:
Q:
A:
...
Q:
A:

Have you ever prepared a trademark valuation?
No.
Have you ever prepared, previously prepared a
trademark damages analysis?
No.
Have you studied the trademark statute at all?
No.

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from

Q:
A:
Q:
A:
Q:
A:
Q:
A:
Q:
A.

Have you studied the trademark damages
statute?
No.
Have you read any court [d]ecisions on
trademark infringement?
No.
Have you read any court [d]ecisions on
trademark infringement damages?
No.
Have you read any books or treatises or
articles on trademark infringement damages?
None that I specifically remember.
Have you taken any classes on how to calculate
trademark infringement damages?
Not specifically, no.

(Raines Dep. Doc. # 44-1 at 10:9-13, 13:9-24).
Australian Gold emphasizes that Raines has never offered
expert testimony before and that he has never previously
testified in a courtroom.
After reviewing the parties’ submissions, the Court
determines that Raines possesses the qualifications necessary
to offer expert testimony.

Raines has held a CPA license for

over forty years and has served as the Controller of a number
of corporations.

In addition, he has particular familiarity

with Health and Sun’s financial information owing to the fact
that he has conducted annual reviews of Health and Sun’s
financial statements for the past eight years.
The

Court

trademark law.

agrees

that

Raines

is

not

an

expert

on

However, because Raines has not been offered

in that capacity, his lack of expertise in that area is not
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dispositive of his qualifications.

Furthermore, the Court

gives short shrift to Australian Gold’s contention that Raines
is unqualified because he has never offered expert testimony
in the past.

“The mere fact that [the expert] never has been

retained as an expert is irrelevant.

By that logic, no

witness could ever qualify as an expert for the first time
because that would require being retained previously as an
expert.” Catapult Commc’ns Corp. v. Foster, No. 06-cv-6112,
2010 WL 659072, at *2 (N.D. Ill. Feb. 19, 2010)(emphasis in
original).

As aptly stated in United States v. Parra, 402

F.3d 752, 758 (7th Cir. 2005), “[t]here is a first time in
court for every expert.”
Rather, the Court determines that Raines’s CPA license,
relevant work experience, and familiarity with Health and
Sun’s financial data render him sufficiently qualified to
offer expert testimony in this case. See QBE Ins. Corp. v.
Jorda Enters., Inc., No. 10-21107, 2012 WL 913248, at *3 (S.D.
Fla. Mar. 16, 2012)(“The qualification standard for expert
testimony is not stringent, and so long as the expert is
minimally qualified, objections to the level of the expert’s
expertise

go

to

credibility

admissibility.”)(internal
individual

satisfies

the

citation

and
omitted).

relatively
-7-

weight,

low

“[A]fter

threshold

not
an
for

qualification, the depth of one’s qualification may be the
subject of vigorous cross-examination.” Id.
On

cross-examination,

Australian

Gold

may

elicit

testimony from Raines highlighting that Raines has never
offered expert testimony before and that he has not studied
the relevant trademark statutes. However, these points do not
render Raines unqualified for the purposes of the Court’s
Daubert analysis.
B.

Raines’s Methodology

To summarize Raines’s methodology, Raines has calculated
Health and Sun’s potential damages by analyzing Australian
Gold’s sales of its allegedly infringing products known as
Purple Reign and Royal Flush.
excluding

Raines’s

Australian Gold seeks an Order

testimony

methodology as unreliable.

by

characterizing

Raines’s

Australian Gold tends to argue

that Raines should have used a different formula to calculate
damages – for instance, that Raines should have included data
about Australian Gold’s costs and expenses in formulating its
competing products.

Australian Gold also asserts that Raines

did not analyze any baseline to show lost sales or analyze
Health and Sun’s capacity to make sales.
Australian Gold’s arguments can be boiled down to the
contention that Raines should have used different formulas in
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computing his damages calculation. The Court is not convinced
by Australian Gold’s position.

In Taylor, Bean & Whitaker

Mortgage Corp. v. GMAC Mortgage Corp., No. 5:05-cv-260-Oc-GRJ,
2008 WL 3819752, at *5 (M.D. Fla. Aug. 12, 2008), when
evaluating the admissibility of an accounting expert’s damages
testimony, the court rejected the argument that the expert’s
testimony should be excluded because his opinions differed
from the other party’s experts, including using a different
formula.

The court noted:

[T]hese arguments go more to the weight of the
evidence, than the admissibility of the evidence
under Daubert. The Court need not determine that
the expert [defendant] seeks to offer into evidence
is irrefutable or certainly correct. The certainty
and correctness of [the expert’s] opinion will be
tested through cross-examination and presentation
of contrary evidence and not by a Daubert
challenge. Indeed the Court’s role as gatekeeper
is not intended to supplant the adversary system or
the role of the jury.
Id.
The Court is in accordance with the reasoning espoused in
Taylor, Bean & Whitaker. While Australian Gold has identified
variables

that

are

absent

from

Raines’s

calculations,

Australian Gold has not shown that Raines’s testimony rests on
an infirm foundation. The Court determines that Raines’s
methodology is sufficiently sound and reliable to withstand
Australian Gold’s Daubert challenge.

-9-

Australian Gold is

reminded that “vigorous cross-examination, presentation of
contrary evidence, and careful instruction on the burden of
proof are the traditional and appropriate means of attacking
shaky but admissible evidence.” Allison, 184 F.3d at 1311-12
(quoting Daubert, 509 U.S. at 596).
C.

Raines Will Assist the Trier of Fact

Expert testimony is helpful to the trier of fact “if it
concerns matters that are beyond the understanding of the
average lay person.” United States v. Frazier, 387 F.2d 1260,
1262 (11th Cir. 2004). In other words, “[p]roffered expert
testimony generally will not help the trier of fact when it
offers nothing more than what lawyers for the parties can
argue in closing arguments.” Id. at 1262-63.
As asserted by Health and Sun, “Raines applied his
knowledge, skill, experience, training, and education as a CPA
with more than forty years of experience to offer his opinion
as to the value of Health and Sun’s lost sales.” (Doc. # 49 at
18).

As persuasively noted in De Jager Construction, Inc. v.

Schleininger,

938

F.

Supp.

446,

449

(W.D.

Mich.

1996):

“certified public accountancy is a skilled profession which
requires, in many instances, considerable education, training,
experience, judgment and skill beyond that which an ordinary
juror would possess.”

Thus, “a CPA generally possesses the
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specialized knowledge to qualify as a helpful expert witness
under the proper circumstances.” Id. The Court finds that the
present case is such a case, where a CPA may offer expert
testimony to assist the trier of fact.

The Court accordingly

denies the Motion to Exclude Raines’s testimony. However, the
Court notes that, during the trial, the Court may revisit this
ruling in the instance that Australian Gold demonstrates that
any prong of Rule 702 is unfulfilled.
Accordingly, it is
ORDERED, ADJUDGED, and DECREED:
Defendant Australian Gold, LLC’s Sealed Motion to Exclude
Testimony of Gary L. Raines (Doc. # 44) is DENIED WITHOUT
PREJUDICE.
DONE and ORDERED in Chambers in Tampa, Florida, this 19th
day of November, 2013.

Copies:

All Counsel of Record

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