Lincoln Rock, LLC v. City of Tampa

Filing 74

ORDER: Defendant's Motion to Strike and Exclude Declaration of Henry H. Fishkind, PhD 64 is granted. Defendant's Daubert Motion to Exclude Opinion Testimony of Plaintiff's Economic Expert Henry H. Fishkind, PhD 49 is granted. Signed by Judge James S. Moody, Jr on 11/18/2016. (LN)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION

LINCOLN ROCK, LLC, a Florida
Limited Liability Company,
Plaintiff,
v.

Case No: 8:15-cv-1374-T-30JSS

CITY OF TAMPA, a Florida
municipal corporation,
Defendant.

ORDER
THIS CAUSE comes before the Court upon Defendant’s Daubert Motion to
Exclude Opinion Testimony of Plaintiff’s Economic Expert Henry H. Fishkind, Ph.D.
(Dkt. 49), Plaintiff’s Response in Opposition thereto (Dkt. 58), Defendant’s Motion to
Strike and Exclude Declaration of Henry H. Fishkind, Ph.D. (Dkt. 64), and Plaintiff’s
Response in Opposition thereto (Dkt. 73). The Court, upon review of the motions,
responses, the record evidence in support of same, and, being otherwise advised in the
premises, concludes that Defendant’s motions should be granted. As explained further
below, the Court excludes the expert testimony of Dr. Fishkind because it is unreliable
under Daubert and would not assist the trier of fact in this case.
BACKGROUND
This is an action by Plaintiff Lincoln Rock, LLC against Defendant City of Tampa
for alleged violations of the Fair Housing Act (“FHA”) and the Americans with

Disabilities Act (“ADA”) arising from the City’s denial of Lincoln Rock’s request for a
SU-II permit to allow Lincoln Rock to operate a Residential Treatment Facility (“RTF”)
in a west Tampa neighborhood for persons recovering from alcohol and drug addiction.
Lincoln Rock is a Florida limited liability company that was formed in 2012, and
has one member, Bernard Rock.

Lincoln Rock was formed for the purpose of

establishing a RTF within the City of Tampa to treat those addicted to alcohol or
controlled substances. In 2012, Lincoln Rock purchased property that was located in a
City of Tampa mixed-use neighborhood with surrounding residential, commercial, and
social/club uses (the “Property”).
Lincoln Rock purchased the Property with the intention of opening and operating a
state licensed RTF for recovering addicts. The Property was improved with a residential
structure that had multiple, self-contained units that could be made available to
individuals seeking housing during the course of their treatment. Lincoln Rock had no
prior experience operating a RTF. The Property is zoned RO-1. The Tampa City Code
provides that certain land uses in the City are not allowed in the RO-1 zoning district.
Other uses not allowed as a matter of right may be allowed upon approval of a SU-II
permit by the Tampa City Council; these uses include a RTF.
The Tampa City Code vests the sole authority to approve or deny a SU-II permit
with the City Council: “The city council shall be solely responsible for decisions on all
applications for S-2 special use permits.” The process of obtaining a SU-II permit

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includes meeting with professional staff at the City; submitting an application to the City;
undergoing review by the City’s Development Review Committee (“DRC”); presenting
evidence at a public hearing before the City Council; and obtaining approval for the SU-II
permit from the City Council.
At the public hearing for a SU-II permit before the City Council, the burden is on
the landowner to bring forth sufficient evidence to establish that the proposed use meets
the requirements for the use under the Tampa City Code: “It shall be the responsibility of
the applicant to present evidence in the form of testimony, exhibits, documents, models,
plans and the like to support the application for approval of a special use permit.”
Lincoln Rock needed to obtain a SU-II permit to operate the RTF on the Property.
On February 25, 2013, Lincoln Rock applied for the special use permit with the City.
The application sought approval to operate a twenty-one bed RTF. The residents who
would have lived at the RTF could not be active in their addiction; rather, they must have
been seeking treatment to cure their disease. Such individuals would live together as a
group while simultaneously receiving treatment (such as group and individual
counseling).
Upon receipt of Lincoln Rock’s application, the City’s planning and zoning staff
reviewed it for completeness. The DRC determined that the proposal met the objective
criteria of Sec. 27-132, Tampa City Code. The application was thereafter brought before
the City Council for a public hearing. On June 13, 2013, the City Council heard the

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application.

At the public hearing, some members of the City Council expressed

concerns regarding the public health, safety and welfare; with compatibility with the
Comprehensive Plan; and with compatibility with the surrounding neighborhood. In
addition, a number of neighbors expressed concerns. In a vote of six to one, the City
Council denied Lincoln Rock’s application for the SU-II permit.
Lincoln Rock sold the Property. According to Lincoln Rock, the sales price was
less than the price would have been as a residential drug and alcohol treatment facility.
Lincoln Rock claims that the City’s denial of its application for the SU-II permit
was based on discriminatory reasons. Lincoln Rock contends that the neighborhood
opposition to Lincoln Rock’s application was almost entirely premised on discriminatory
reasons, i.e., that Lincoln Rock’s drug-addicted clients would be a danger to the elderly
and children in the neighborhood and would cause crime to increase, and that the City
adopted these discriminatory views when it denied the application.
Lincoln Rock has listed Henry H. Fishkind, Ph.D. as its damages’ expert in this
case. The City moves to exclude Dr. Fishkind’s opinion in its entirety. The City also
moves to strike Dr. Fishkind’s Declaration, filed in support of Lincoln Rock’s response in
opposition to the City’s motion to exclude Dr. Fishkind. As explained further below, the
Court grants the City’s motions. To understand the Court’s reasoning, it is necessary to
first provide an overview of the events that have occurred in this case with respect to the
filing of Dr. Fishkind’s initial expert report, supplemental report, and declaration, and

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address the City’s motion to strike. The Court will then analyze Dr. Fishkind’s expert
opinion in detail under Daubert to explain why his opinion is too unreliable to pass
muster in this case.
DR. FISHKIND’S INITIAL AND SUPPLEMENTAL OPINIONS1
On September 4, 2015, the Court entered a Case Management and Scheduling
Order, setting Plaintiff’s deadline for expert disclosures as April 18, 2016, and
Defendant’s deadline for expert disclosures as May 2, 2016 (Dkt. 17). On April 25, 2016,
the Court, upon Defendant’s motion, entered an Amended Case Management and
Scheduling Order, extending Defendant’s expert disclosures deadline until June 16, 2016,
and setting Plaintiff’s expert rebuttal disclosure deadline for June 30, 2016 (Dkt. 25). The
discovery deadline was August 29, 2016, and the deadline for dispositive and Daubert
motions was September 23, 2016 (Dkt. 30).
Plaintiff’s expert, Henry Fishkind, Ph.D., prepared an expert report dated April 18,
2016 (“Initial Report”) (Dkt. 44-1). In the Initial Report, Dr. Fishkind gave the opinion
that Plaintiff suffered nearly $5 million in damages. Dr. Fishkind based this conclusion
on his opinion that “Plaintiff reasonably expected to have 21 licensed beds” at the
residential treatment facility it sought to establish on the Property. (Dkt. 44-1 ¶ 18.0).
Because the sales of comparable facilities, which are “often purchased on the basis of the

1

A large portion of this section is taken directly from the Magistrate Judge’s Order on the
City’s motion to strike Dr. Fishkind’s supplemental report. (Dkt. 63).

5

number of licensed beds,” yielded $236,998 per bed, Dr. Fishkind concluded that Plaintiff
suffered damages in the amount of $4,976,956. (Dkt. 44-1 ¶ 18.0). Dr. Fishkind stated
that, because he could not measure it to a reasonable degree of economic certainty, he
“decided not to quantify the Plaintiff’s damages based on the potential profitability of the
[residential treatment facility] as the Plaintiff had planned” and, instead, “valued the
damages based on the market value of the licensed beds that the Plaintiff reasonably
expected to be approved.” (Dkt. 44-1 ¶ 24.0).
On June 16, 2016, Defendant served its Rule 26(a)(2) expert disclosures,
disclosing Stephen E. Durham, Ph.D. as its expert and attaching Dr. Durham’s written
report. (Dkt. 53-2). In his report, Dr. Durham concluded that Plaintiff suffered economic
damages totaling $90,000, assuming wrongdoing by Defendant.

(Dkt. 53-2).

Dr.

Durham based this conclusion on the difference in value of the Property with and without
a special use permit. (Dkt. 53-2 at 2). Dr. Durham’s report addressed Dr. Fishkind’s
report, noting, among other things, (1) in reaching his average cost per bed, Dr. Fishkind
included a facility in the United Kingdom in the calculus despite Dr. Fishkind stating that
this facility should not be considered as a comparable facility (See Dkt. 44-1 ¶ 30.0); (2)
that Dr. Fishkind failed to account for the $1,000,000 Plaintiff received from the sale of
the Property in his damages; and (3) Dr. Fishkind’s comparable facilities offered
outpatient services, unlike Plaintiff’s proposed facility, thus challenging the
appropriateness of their use as comparable facilities. (Dkt. 53-2 at 3-4).

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On August 29, 2016, which was the discovery deadline, Plaintiff served a
supplemental Rule 26 disclosure, attaching a supplemental expert report by Dr. Fishkind,
dated August 29, 2016 (“Supplemental Report”). (Dkt. 44-9). In the Supplemental
Report, Dr. Fishkind stated that the purpose of the Supplemental Report was to
supplement his Initial Report and update his opinions because, since the time of the
report, “additional information has become available.”

(Dkt. 44-9 ¶ 1.0).

In the

Supplemental Report, Dr. Fishkind: (1) corrected his value per bed to $214,992, from
$236,998 in the Initial Report, based on “a coding error that Dr. Durham identified” (Dkt.
44-9 ¶¶ 3.0, 10.0); (2) corrected the Initial Report’s failure to deduct Plaintiff’s net
proceeds from Plaintiff’s sale of the Property (Dkt. 44-9 ¶¶ 4.0, 10.0); (3) rebutted Dr.
Durham’s criticism of the Initial Report’s damages calculation (of multiplying the
number of licensed beds by the market rate per bed), by stating that it is an “industry”
standard to “value facilities on the basis of licensed beds” (Dkt. 44-9 ¶ 9.0); and (4)
rebutted Dr. Durham’s opinion (See Dkt. 53 at 4) that Dr. Fishkind did not give proper
consideration to the use of comparable facilities that have outpatient services (Dkt. 44-9
¶¶ 5.0-8.0).
As to his rebuttal of Dr. Durham’s opinion regarding the comparable facilities
having outpatient services, Dr. Fishkind defended his use of the comparable facilities,
opining that “the market places little value on outpatient facilities” and residential
treatment facilities are more valuable. (Dkt. 44-9 ¶¶ 5.0-6.0). Dr. Fishkind based this

7

conclusion on his consultation with treatment providers “[o]ver the last five years,” who
informed him that “outpatient services are generally only marginally profitable” and the
deposition testimony of Jackie Krone, taken on July 22, 2016, in which Ms. Krone
testified that insurance companies provide higher reimbursements for residential
treatment facilities than outpatient services. (Dkt. 44-9 ¶¶ 7.0-8.0).
The City moved to strike the Supplemental Report and argued that the
Supplemental Report was not “supplemental” because it advanced a new methodology for
calculating damages and was untimely because “Dr. Fishkind had all the information
available to him at the time he prepared his initial opinion.” (Dkt. 44 ¶¶ 1-2, 13, 14, 29).
Further, Defendant contended that portions of the Supplemental Report rebutted Dr.
Durham’s opinions, which was an untimely rebuttal because the deadline for rebuttal
reports was June 30, 2016. (Dkt. 44 ¶ 15). This rebuttal, Defendant argued, also offered
new opinions regarding “insurance reimbursement, the prevalence of [residential
treatment facilities] over outpatient facilities in Florida, and the profitability of residential
(high) versus outpatient (low) services in Florida” and introduced new research upon
which these new opinions relied. (Dkt. 44 ¶ 15).
The Magistrate Judge granted the City’s motion to strike in part. The Magistrate
Judge allowed Dr. Fishkind to supplement his Initial Report only to the extent that (1) he
had made an error when calculating the cost-per-bed by including a facility that was not
comparable to Lincoln Rock and (2) he was allowed to correct another error, which was

8

the failure to deduct the net proceeds from the sale of the Lincoln Rock property from the
damages calculations. The Magistrate Judge reasoned that: “These corrections did not
advance a new theory of damages, but instead corrected Dr. Fishkind’s calculation under
the method of calculating damages he espoused in his Initial Report.” (Dkt. 63).
The Magistrate Judge struck five paragraphs of the Supplemental Report as
untimely rebuttal. Specifically, the Magistrate Judge ruled as follows:
In part C of his Supplemental Report, which is paragraphs 5.0 through 9.0,
Dr. Fishkind addresses Dr. Durham’s opinion that the Initial Report “did
not give proper consideration to the fact that some of the comparable sales
included both [residential] and outpatient activities.” (Dkt. 44-9 ¶ 5.0.) In
paragraphs 5.0 and 6.0 of the Supplemental Report, Dr. Fishkind presents
opinions that outpatient facilities are not as valuable in the marketplace as
residential treatment facilities because residential facilities are “relatively
rare compared to outpatient facilities.” (Dkt. 44-9 ¶¶ 5.0-6.0.) In Paragraphs
7.0 and 8.0 of the Supplemental Report, Dr. Fishkind states treatment
providers he has consulted “[o]ver the last five years” inform him that
residential treatment facilities yield higher insurance coverage or incidences
of self-payment and that “outpatient services are generally only marginally
profitable,” which Ms. Krone’s testimony also reflected. (Dkt. 44-9 ¶¶ 7.08.0.) Finally, in paragraph 9.0 of the Supplemental Report, Dr. Fishkind
rebuts Dr. Durham’s report’s questioning of the Initial Report’s
methodology by stating that it is the “industry” standard to value facilities
by the number of licensed beds. (Dkt. 44-9 ¶ 9.0.)
The Court concludes that paragraphs 5.0 through 9.0 of the Supplemental
Report are untimely rebuttal opinions.
(Dkt. 63). The Magistrate Judge also concluded that the City was unfairly prejudiced by
the untimely rebuttal opinions and therefore Lincoln Rock was “not allowed to use that
information . . . to supply evidence on a motion, at a hearing, or at a trial.” Id.

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Subsequently, and in response to the City’s Daubert motion to exclude Dr.
Fishkind, Lincoln Rock offered Dr. Fishkind’s Declaration. The City argues, in its
motion to strike, that this constitutes an untimely third expert opinion, which greatly
prejudices the City because this case is on the eve of trial. The Court agrees and turns to
this issue next.
MOTION TO STRIKE DR. FISHKIND’S DECLARATION
I.

Standard
An expert report may be supplemented, pursuant to Rule 26(e), when the party

learns that the original disclosure was incomplete or incorrect, but may not be
supplemented in order to cure a major omission or to remedy an expert’s inadequate or
incomplete preparation. See Goodbys Creek, LLC v. Arch Ins. Co., No. 3:07-CV-947-J34HTS, 2009 WL 1139575, at *2 (M.D. Fla. Apr. 27, 2009); see, e.g., Mobile Shelter Sys.
USA, Inc. v. Grate Pallet Sols., LLC, 845 F. Supp. 2d 1241, 1248-52 (M.D. Fla. 2012)
(excluding expert’s second report, served on the last day of discovery, which included
opinions regarding claims that were not addressed in the initial report); K & H Dev. Grp.,
Inc. v. Howard, 255 F.R.D. 562, 567-68 (N.D. Fla. 2009) (striking an expert’s
“supplemental” report that included a new theory of damages, which was based on
information that was available when the expert prepared his initial report).
Rule 26(e) “permits supplemental reports only for the narrow purpose of
correcting inaccuracies or adding information that was not available at the time of the

10

initial report.” Companhia Energetica Potiguar v. Caterpillar Inc., No. 14-CV-24277,
2016 WL 3102225, at *6 (S.D. Fla. June 2, 2016) (internal quotations omitted). Rule
26(e) “is not a device to allow a party’s expert to engage in additional work, or to annul
opinions or offer new ones to perfect a litigating strategy.” Cochran v. Brinkmann Corp.,
No. 1:08-cv-1790-WSD, 2009 WL 4823858, at *5 (N.D. Ga. Dec. 9, 2009). “Rather,
Rule 26 imposes a duty on parties to comply with the disclosure deadlines. It grants them
no right to produce information in a belated fashion.” Mobile Shelter, 845 F. Supp. 2d at
1250 (internal citations and quotations omitted). “Courts have broad discretion to exclude
untimely-disclosed expert witness testimony—even when they are designated as
‘supplemental’ reports...[c]onsequently, a party cannot abuse Rule 26(e) to merely bolster
a defective or problematic expert witness report.” Companhia, 2016 WL 3102225, at *5*6 (striking an expert’s declaration filed in defense of a Daubert motion seeking to
exclude him because the declaration was a “late supplemental expert report” and
“contains additional opinions and explanations for his opinions that are the ‘hallmark of
expert evidence,’ which should have been disclosed in his original reports.”) (quoting
Cooper v. S. Co., 390 F.3d 695, 728 (11th Cir. 2004)); see also Thames v. City of
Pensacola, No. 303-CV-586, 2005 WL 1876175, at *5 (N.D. Fla. Aug. 1, 2005) (striking
an expert affidavit filed in opposition to a motion for summary judgment where, after
reviewing deposition testimony of another witness in the case, the expert modified his
opinion).

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II.

Discussion
Dr. Fishkind’s Declaration attempts to rebut nearly every argument made by the

City in its Daubert motion seeking to exclude him.

The Declaration contains new

opinions, opinions previously struck by the Magistrate Judge, and untimely rebuttal. For
example, Dr. Fishkind’s Initial Report referenced his selection of Acadia’s U.S.
acquisitions of RTFs based only on the fact that the acquisitions had 100-beds or fewer.
He used no other criterion for inclusion in this subset. The Initial Report is silent as to
any investigation or analysis of the specifics of the RTFs that comprised this 100-bed or
fewer subset. His Declaration, however, offers new opinions based on new research and
analysis:
I reviewed information on Acadia’s web site about the residential treatment
facilities acquired by Acadia to determine that they were not unusually
grandiose in comparison to Lincoln Rock’s proposed facility.
...
. . . to select the proper set of data necessary to support estimating the value
of Lincoln Rock’s RTF via the market approach to value requires expert
study, analysis, and judgment. It is far more than a simple exercise in
arithmetic. Instead, I had to first (i) use my professional judgment to
conduct research and obtain data on residential treatment facilities and the
market value for their beds; (ii) analyze and review this data to identify
information that should be excluded or included; (iii) review the data to
insure comparability to Lincoln Rock; and (iv) determine an appropriate
and sufficiently large sample size that could reliably be the basis of the
mathematical calculation. There was nothing random or arbitrary about this
process, as the City falsely contends.
(Dkt. 58-1 ¶¶ 13, 14).

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Dr. Fishkind’s Declaration further opines that:
there is no basis for assuming that per bed value is directly correlated with
the number of beds in a facility. Thus, it was appropriate for me to include
facilities with beds under 100 to ensure: (a) appropriate comparability and
(b) a sufficient sample size and to control for variability in per bed value at
particular facilities across various locations.
...
The price per bed at residential treatment facilities is essentially a function
of the following common characteristics: (a) a typical lengthy stay often
lasting twenty-eight days; (b) generally paid for through insurance; and (c)
predicated on the cost of room and board, therapy, and medical supervision
where needed. The latter are the cost components of essentially any
residential treatment program, whether for treatment of residential drug and
alcohol treatment, or other ailments.
(Dkt. 58-1 ¶¶ 15, 16).
As the City points out, Dr. Fishkind’s Initial and Supplemental Reports did not
offer any analysis, explanation, or opinion that the valuation of a RTF was somehow a
function of factors other than the number of licensed beds.
In paragraph 19 of the Declaration, Dr. Fishkind discusses his opinion on the
profitability of outpatient services, noting that they are “only marginally profitable,”
presumably in rebuttal of Dr. Durham’s opinion that Dr. Fishkind’s Initial Report failed
to explain why the comparable facilities had outpatient services when Lincoln Rock
planned on offering only inpatient services. Notably, the Magistrate Judge already struck
Dr. Fishkind’s untimely rebuttal on this issue, so this portion of the Declaration is already
excluded from this case.

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The Court concludes that Dr. Fishkind’s Declaration is an untimely supplemental
report. The Declaration adds additional layers of analysis, research, and background
which were available to him at the time that he served his Initial Report.

As the

Magistrate Judge previously concluded, any supplementation at this late stage is highly
prejudicial to the City. Moreover, the Court does not agree, as Lincoln Rock appears to
contend, that an expert’s declaration filed in response to a motion challenging that expert
is somehow immune from being stricken merely because it was filed in response to a
Daubert motion. “It is hardly surprising that a party would seek to bolster its expert’s
opinions after a Daubert motion points out significant flaws.” Companhia, 2016 WL
3102225, at *9. “A contrary rule would mean that the experienced expert could simply
lie in wait so as to express his genuine opinions only after the opposing party discloses
hers.” Id. (internal quotations and citations omitted). The Court will not condone such a
litigation strategy because doing so “would be to invite the proverbial fox into the
henhouse.” Id. (citing Keener v. United States, 181 F.R.D. 639, 641 (D. Mont. 1998)).2

2

It is also not relevant to the inquiry to consider the City’s failure to depose Dr. Fishkind in
this case as Lincoln Rock so vehemently points out. The City made a strategic decision not to
depose Dr. Fishkind, presumably because the City viewed his Initial Report as severely deficient
under Daubert and thus subject to exclusion. This strategy, on the City’s part, did not prevent
Lincoln Rock from submitting a rebuttal opinion or otherwise supplementing Dr. Fishkind’s Initial
Report earlier in this case, before the expiration of the relevant deadlines. Lincoln Rock cannot, at
this late hour, attempt to rehabilitate Dr. Fishkind simply because he was not deposed in this case.

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Accordingly, the Court strikes Dr. Fishkind’s Declaration. The Court now turns to
the City’s Daubert motion to exclude the entirety of Dr. Fishkind’s expert testimony in
this case.
DAUBERT MOTION TO EXCLUDE DR. FISHKIND
I.

Standard
In federal court, expert opinions must meet the admissibility guidelines announced

by the Supreme Court in Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579
(1993), and Federal Rule of Evidence 702. Under Rule 702:
If scientific, technical, or other specialized knowledge will assist the
trier of fact to understand the evidence or to determine a fact in issue,
a witness qualified as an expert by knowledge, skill, experience,
training, or education, may testify thereto in the form of an opinion
or otherwise, if (1) the testimony is based upon sufficient facts or
data, (2) the testimony is the product of reliable principles and
methods, and (3) the witness has applied the principles and methods
reliably to the facts of the case.
Before permitting expert opinion testimony, the court must make certain that the
expert employs “in the courtroom the same level of intellectual rigor that characterizes
the practice of the expert in the field.” Kumho Tire Co. v. Carmichael, 526 U.S. 137, 152
(1999). The court must act as gatekeeper to prevent speculative and unreliable “expert”
testimony from reaching the jury. See Rink v. Cheminova, Inc., 400 F.3d 1286, 1291
(11th Cir. 2005) (noting that the “task of evaluating the reliability of expert testimony is

15

uniquely entrusted to the district court under Daubert”).

The gatekeeping role is

“significant” because an “expert’s opinion ‘can be both powerful and quite misleading.’”
U.S. v. Frazier, 387 F.3d 1244, 1260 (11th Cir. 2004) (quoting Daubert, 509 U.S. at 595).
As gatekeeper, the court makes three inquiries: (1) first, whether the expert is
qualified to testify competently regarding the matters that he intends to address; (2)
second, whether the methodology by which the expert reaches his conclusions is
sufficiently reliable as determined by the sort of inquiry mandated in Daubert; and (3)
third, whether the testimony will assist the trier of fact, through the application of
scientific, technical, or specialized expertise, to understand the evidence or to determine a
fact in issue. See City of Tuscaloosa v. Harcros Chems., Inc., 158 F.3d 548, 562-63 (11th
Cir. 1998); see also Cooper v. Marten Transp., Ltd., 539 F. App’x 963, 965-67 (11th Cir.
2013). The party offering the expert opinion testimony bears the burden of establishing,
by a preponderance of the evidence, the expert’s qualification, reliability, and helpfulness.
See Kilpatrick v. Breg, Inc., 613 F.3d 1329, 1335 (11th Cir. 2010) (citing McCorvey v.
Baxter Healthcare Corp., 298 F.3d 1253, 1256 (11th Cir. 2002)); see also Sumner v.
Biomet, Inc., 434 F. App’x 834, 841 (11th Cir. 2011); Frazier, 387 F.3d at 1260.
Importantly, although rulings on admissibility under Daubert inherently require
the court to conduct an exacting analysis of the proffered expert’s methodology, it is not
the court’s role to make ultimate conclusions as to the persuasiveness of the proffered

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evidence. Quiet Tech. DC-8, Inc. v. Hurel-Dubois UK Ltd., 326 F.3d 1333, 1341 (11th
Cir. 2003). Indeed, the gatekeeper role is not intended to supplant the adversary system
or the role of the jury. See id. “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.” Daubert, 509 U.S. at 596; see also
U.S. v. Ala. Power Co., 730 F.3d 1278, 1282-85 (11th Cir. 2013) (explaining that the
Daubert inquiry “is not intended to supplant” cross-examination and presentation of
contrary evidence); Costa v. Wyeth, Inc., No. 8:04-cv-2599-T-27MAP, 2012 WL
1069189, at *2 (M.D. Fla. Mar. 29, 2012).
II.

Discussion
As the Court noted above, Dr. Fishkind’s Initial Report gave the opinion that

Plaintiff suffered nearly $5 million in damages. He based this conclusion on his opinion
that “Plaintiff reasonably expected to have 21 licensed beds” at the RTF it planned to
establish on the Property. (Dkt. 44-1 ¶ 18.0). Because the sales of comparable facilities,
which are “often purchased on the basis of the number of licensed beds,” yielded
$236,998 per bed, Dr. Fishkind concluded that Plaintiff suffered damages in the amount
of $4,976,956. (Dkt. 44-1 ¶ 18.0).3 Dr. Fishkind stated that, because he could not
measure it to a reasonable degree of economic certainty, he “decided not to quantify the
3

Dr. Fishkind lowered this amount in his Supplemental Report (Dkt. 49-2) to $3,557,674,
which this Court accepts per the Magistrate Judge’s prior Order on this issue, permitting him to
correct certain errors contained in his Initial Report (Dkt. 63).

17

Plaintiff’s damages based on the potential profitability of the [residential treatment
facility] as the Plaintiff had planned” and, instead, “valued the damages based on the
market value of the licensed beds that the Plaintiff reasonably expected to be approved.”
(Dkt. 44-1 ¶ 24.0).
The City argues that Dr. Fishkind’s “comparable sales” approach is unreliable
because it is based on a single criterion, i.e., the acquisition costs that a $4-billion-dollar
international healthcare conglomerate, Acadia Healthcare, incurred for the purchase of
U.S. residential treatment facilities with 100 beds or fewer from 2013-2015. The City
argues that Dr. Fishkind arbitrarily selected this subset without including any factors that
would assure that the RTFs in this subset demonstrated some reliable indicia of
comparability with each other and with Lincoln Rock. The Court agrees.
The Initial Report contains no data point, research document, analysis, factfinding, or investigation materials offered to support Dr. Fishkind’s methodology of
valuing Lincoln Rock based on Acadia’s acquisition of RTFs in the United States that
have 100-beds or fewer. As the City argues, this methodology is “akin to using the
average price per room of all 100-room or fewer hotels to value a small Motel 6 facility
by taking the average of the price per-room of The Ritz Carlton, the Hilton, and the Motel
6.” (Dkt. 49). The Initial Report does not discuss factors like the underlying value of the
real property, the location of the underlying real estate, the services offered by these
facilities, whether the facilities were profitable and for how long, the daily rates charged

18

by these facilities versus the daily rates Lincoln Rock would be able to charge, and the
length of time the facilities were in business.
To illustrate the unreliability of Dr. Fishkind’s methodology, the comparator with
the closest number of beds to Lincoln Rock’s proposed RTF, Skyway, which had 28 beds,
sold at a price of $10,714.00 per-bed. Yet, Dr. Fishkind’s methodology, as corrected in
his Supplemental Report, is based on a value per-bed of $214,922.00. Most of the RTFs
included in his valuation are larger than twice the size of Lincoln Rock’s proposed RTF.
For instance, one of the comparators used by Dr. Fishkind is the 68-bed facility Pacific
Grove Hospital in Riverside, California. Pacific Grove is located on a 4.5-acre campus
with three separate treatment units for medical detoxification, psychiatric services, and
partial hospitalization. It offers private courtyards, patient lounges, and semi-private
rooms. In comparison, Lincoln Rock’s proposed RTF was to be located on 0.63-acres in
West Tampa, in a 8,905-square-foot building, in which patients would be lodged three-toa-room.

The price per-bed that Acadia Healthcare paid for Pacific Grove was

$154,412.00, yet Dr. Fishkind opined the price per-bed for Lincoln Rock’s proposed RTF
would be $214,922.00.
As the City contends, for a methodology utilizing the average acquisition cost of
comparators to be reliable, the methodology must include, at a minimum, more than just
the single arbitrary criterion of RTFs with a certain number of beds. The comparators
should include RTFs of similar size with similar services and amenities offered, located in

19

a comparable geographic location, charging comparable fees and accepting comparable
types of insurance, and demonstrating comparable future profit margin projections.
Dr. Fishkind’s methodology also assumes that Lincoln Rock would have opened
its doors, would have generated enough revenue to survive, would have achieved
profitability, and would have been an appealing acquisition target for Acadia.

Dr.

Fishkind’s only opinion on Lincoln Rock’s purported profitability is that it “purchased the
Property. This demonstrates the Plaintiff’s capacity to finance the RTF.” (Dkt. 49-1
¶21). Although Lincoln Rock “had no experience operating an RTF,” Dr. Fishkind noted
that Lincoln Rock had developed a business plan, identified staff, who had developed
operating manuals and protocols, and had assembled a professional team. (Dkt. 49-1 ¶¶
22, 23).

These conclusory observations, combined with the flawed price-per-bed

methodology, are too speculative to support Dr. Fishkind’s damage estimate of
$3,557,674.

Daubert.

In other words, Dr. Fishkind’s testimony fails the reliability-prong of
Presenting the jury with Dr. Fishkind’s flawed methodology would be

inappropriate and highly misleading on the issue of Lincoln Rock’s damages.

As

gatekeeper, the Court must exclude this testimony. Accordingly, the Court grants the
City’s Daubert motion to exclude Dr. Fishkind’s testimony in this case.
It is therefore ORDERED and ADJUDGED that:
1.

Defendant’s Motion to Strike and Exclude Declaration of Henry H.
Fishkind, PhD (Dkt. 64) is granted.

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2.

Defendant’s Daubert Motion to Exclude Opinion Testimony of Plaintiff’s
Economic Expert Henry H. Fishkind, PhD (Dkt. 49) is granted.

DONE and ORDERED in Tampa, Florida on November 18, 2016.

Copies furnished to:
Counsel/Parties of Record

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