Connectus LLC v. Ampush Media, Inc.
Filing
209
ORDER: Defendants DGS Edu, LLC and Ampush Media, Inc.'s Joint Motion to Strike/Exclude the Report, Opinions, and Testimony of Plaintiff's Designated Expert Witness Brita D. Strandberg (Doc. # 109 ), is GRANTED. Defendants' Joint M otion to Strike/Exclude the Report, Opinions, and Testimony of Plaintiff's Designated Expert Witness Douglas Kidder (Doc. # 143 ), is DENIED WITHOUT PREJUDICE. Defendants may reassert arguments as to why Kidder's report should be excluded if it becomes necessary after the disposition of summary judgment motions. Plaintiff Connectus LLC's Motion to Strike the Expert Report of Thomas P. Moroney (Doc. # 147 ), is GRANTED IN PART AND DENIED IN PART to the extent set forth herein. Signed by Judge Virginia M. Hernandez Covington on 2/13/2017. (DRW)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
CONNECTUS LLC,
Plaintiff,
v.
Case No. 8:15-cv-2778-T-33JSS
AMPUSH MEDIA, INC., et al.,
Defendants.
_____________________________/
ORDER
This matter comes before the Court upon consideration of
Defendants DGS Edu, LLC and Ampush Media, Inc.’s Joint Motion
to Strike/Exclude the Report, Opinions, and Testimony of
Plaintiff’s Designated Expert Witness Brita D. Strandberg
(Doc. # 109), filed on November 18, 2016; Defendants’ Joint
Motion to Strike/Exclude the Report, Opinions, and Testimony
of Plaintiff’s Designated Expert Witness Douglas Kidder (Doc.
# 143), filed on December 19, 2016; and Plaintiff Connectus
LLC’s Motion to Strike the Expert Report of Thomas P. Moroney
(Doc. # 147), filed on December 20, 2016. Connectus filed its
responses in opposition to the Motions relating to Strandberg
and Kidder on December 19, 2016, and January 19, 2017,
respectively. (Doc. ## 145, 187). Defendants filed their
response to Connectus’s Motion regarding Moroney on January
19, 2017. (Doc. # 186). Defendants filed replies in support
of their Motions relating to Strandberg and Kidder on January
3, 2017, and February 1, 2017, respectively. (Doc. ## 174,
203). Connectus filed its reply in support of its Motion
relating to Moroney on January 26, 2017. (Doc. # 197). All
three Motions are ripe for review.
I.
Background
Connectus provides an informational service that seeks
to
connect
prospective
students
with
post-high
school
educational institutions, such as universities. (Doc. # 200
at ¶ 12). To do so, Connectus engages in lead generation, a
process which generates data on prospective students through
the use of opt-in websites. (Id. at ¶ 13). The data generated
during
lead
generation
is
“extraordinarily
proprietary.”
(Id.). If, during the lead generation process, a prospective
student agrees to be contacted, a Connectus representative
from its call center contacts the prospective student to
collect more information. (Id. at ¶ 14). The goal is to match
a prospective student to a university or universities and
then
sell
that
“lead”
to
the
matched
university
or
universities. (Id. at ¶¶ 14, 18).
Connectus has its own list of universities with which it
directly does business; however, if a prospective student
2
does not match with one of the universities that directly do
business with Connectus, Connectus turns to an aggregator.
(Id. at ¶ 15). An aggregator is an intermediary that has
business relationships with one or several universities;
Ampush
is
one
such
aggregator.
(Id.).
Each
aggregator
maintains its own database, or portal, detailing the programs
offered
by
its
affiliate
universities.
(Id.
at
¶
16).
Connectus will “ping,” i.e., search, an aggregator’s portal
to determine if that aggregator has a business relationship
with
a
university
that
is
a
potential
match
for
the
prospective student. (Id. at ¶ 17). If a potential match is
found,
Connectus
prospective
gathers
student,
more
confirms
information
the
match,
from
the
obtains
the
prospective student’s consent to “various disclosures,” and
then sells the lead to the aggregator, which in turn sells
the lead to the matched university. (Id. at ¶¶ 17-18). “Under
no circumstances does [Connectus] submit or sell Leads to
Aggregators at the Ping/Search Stage.” (Id. at ¶ 19).
To govern the sale of its leads to aggregators, Connectus
enters into contracts with its aggregators. (Id. at ¶ 20).
Connectus entered into one such contract with Ampush. In
relevant part, the contract stated:
3
1.1
Scope
This
Service
Level
Agreement
(this
“Agreement”), entered into on May 31, 2013, by and
between
Ampush
Media,
Inc.
(“AMPUSH”)
and
1](“VENDOR”) governs the rights
EDegreeAdvisor, LLC[
and responsibilities of the foregoing parties with
respect to the call center services provided by
VENDOR to AMPUSH at all times throughout the course
of their business relationship (the “Service
Period”).
. . . .
1.4
Definitions
. . . .
Confidential Information:
Means
any
confidential or proprietary information, source
code, software tools, designs, schematics, plans or
any other information relating to any research
project, work in process, future development,
scientific, engineering, manufacturing, marketing
or business plan or financial or personnel matter
relating to either party, its present or future
products, sales, supplies, clients, client lists or
other client information, employees, investors or
business, disclosed by one party to the other
party, whether in oral, written, graphic or
electronic
form,
and
whose
confidential
or
proprietary nature is identified at the time of
such
disclosure
or
by
the
nature
of
the
circumstances
surrounding
disclosure
should
reasonably be understood to be confidential.
. . . .
2.1
Service Description
During the Service Period, VENDOR shall make
outbound telephone calls in an effort to generate
leads on behalf of AMPUSH.
1
Connectus does business as EDegreeAdvisor.
4
. . . .
5.1
Non-Disclosure
Each party agrees that it will not make use
of, disseminate or in any way disclose the other
party’s Confidential Information to any person,
firm or business, except as authorized in this
Agreement and to the extent necessary for
performance of this Agreement. Each party agrees
that it will disclose Confidential Information only
to those of its employees and contractors who need
to know such information and who have previously
agreed to be bound by the terms and conditions of
this Agreement. Each party agrees that it will
treat all Confidential Information of the other
party with the same degree of care as it accords
its own confidential information; each party
represents that it exercises reasonable care to
protect its own confidential information.
. . . .
6.
GOVERNING LAW & ATTORNEYS’ FEES
The interpretation and construction of this
Agreement and all matters relating hereto shall be
governed by the laws of the State of California. .
. . Each of the parties agrees that it shall not
seek a jury trial in any proceeding based upon or
arising out of or otherwise related to this
Agreement or any of the other documents and
instruments contemplated hereby and each of the
parties hereto waives any and all right to such
jury trial. . . .
. . . .
13.
LIABILITY
IN NO EVENT SHALL EITHER VENDOR OR AMPUSH BE
LIABLE FOR ANY LOST PROFITS, LOST REVENUES OR ANY
INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL OR
EXEMPLARY DAMAGES ARISING OUT OF OR RELATED TO THIS
5
AGREEMENT, EVEN IF SUCH DAMAGES ARE FORESEEABLE AND
WHETHER OR NOT THE OTHER PARTY HAS BEEN ADVISED OF
THE POSSIBILITY OF SUCH DAMAGES. IN NO EVENT WILL
EITHER PARTY’S LIABILITY HEREUNDER EXCEED THE
PAYMENTS MADE BY AMPUSH TO VENDOR IN THE TWELVE
(12) MONTHS PRECEEDING THE EVENT GIVING RISE TO THE
CLAIM.
(Doc. # 200-1 at ¶¶ 1.1, 1.4, 2.1, 5.1, 6, 13).
On October 31, 2013, DGS Edu acquired Ampush’s education
business, including the agreement entered into by Connectus
and Ampush. (Doc. # 200 at ¶ 21). After DGS Edu acquired
Ampush’s
education
business,
Connectus
began
receiving
complaints from its universities and other aggregators that
the leads being sold to them had been called multiple times
before the lead could be utilized by the purchaser. (Id. at
¶ 22). As such, Connectus began to investigate what was
causing the complaints. (Id. at ¶ 23). Connectus’s
investigation revealed that rather than purchasing
the Leads at the end of the client verification
process, [Ampush and DGS Edu] had been scraping,
digitally copying or otherwise misappropriating
[Connectus’s] proprietary Lead generation data
early in [Connectus’s] Lead generation process, at
the Ping/Search Stage, but before [Connectus] had
submitted or sold the Lead to [Ampush or DGS Edu].
(Id. at ¶ 25). The investigation also “revealed that [Ampush
and DGS Edu] . . . sold the misappropriated Lead generation
data to several of [their] third party partners”; Ampush and
DGS Edu, “and entities to which [they] sold . . . Lead
6
generation data, had been calling every Prospective Student
whose
information
[Connectus]
had
utilized
to
conduct
a
Ping/Search on [Ampush and DGS Edu’s] portal, regardless of
whether the Lead had ultimately been submitted or sold to
[Ampush or DGS Edu]”; and Ampush and DGS Edu, along with the
entities to which they sold the lead generation data, “have
called
as
improperly
many
as
838,853
obtaining
Prospective
after
proprietary
[Connectus’s]
Students
Lead
generation data . . . .” (Id. at ¶¶ 27-29).
While
Ampush
and
DGS
Edu
paid
Connectus
for
“approximately 39,975” leads, they did not pay Connectus for
any of the 838,853 leads alleged to have been misappropriated.
(Id. at ¶ 31). Furthermore, Connectus values each lead as
being worth between $18 and $24 and calculates its damages as
“exceed[ing] $19,000,000.00, without taking into account the
damage to [its] reputation and goodwill.” (Id.).
Connectus
instituted
this
action
against
Ampush
on
December 3, 2015, (Doc. # 1), and shortly thereafter amended
its Complaint to include DGS Edu (Doc. # 9). With leave of
Court,
Connectus
filed
its
Second
Amended
Complaint
on
November 11, 2016. (Doc. ## 105, 106). The Second Amended
Complaint
brought
claims
for
conversion
(Count
I),
misappropriation of trade secrets under Florida law (Count
7
II), unfair competition (Count III), unjust enrichment (Count
IV), breach of contract (Count V), and injunctive relief
(Count VI) against both Ampush and DGS Edu. (Doc. # 106).
Then, on November 22, 2016, DGS Edu and Ampush filed
Rule 12(c) motions. (Doc. ## 114, 115). Connectus shortly
thereafter filed a conditional motion, seeking leave to amend
its trade-secrets claim (switching it from one based on
Florida law to one based on California law) in the event the
Court determined that California law governed. (Doc. # 167).
After extensive briefing, the Court granted the Rule 12(c)
motions in part and granted Connectus leave to file a third
amended complaint. (Doc. # 188). In particular, the Court
held that, in light of the plain language of the choice-oflaw
provision
in
the
parties’
agreement,
California
law
governed this action; that Connectus’s common-law claims
(Counts
I,
III,
and
IV)
were
preempted
and
therefore
dismissed; that any damages awarded for breach of contract
must
be
limited
in
accordance
with
the
agreement’s
limitation-of-liability clause; and that Connectus’s standalone
claim
for
injunctive
relief
was
dismissed,
but
Connectus could seek injunctive relief with respect to its
breach-of-contract claim. (Id. at 31-32).
8
Connectus filed its Third Amended Complaint on January
30, 2017. (Doc. # 200). The Third Amended Complaint asserts
a claim under California’s Uniform Trade Secrets Act, Cal
Civ. Code § 3426.1(d), (CUTSA) (Count I), and breach of
contract (Count II). (Id.). Prior to the Court’s disposition
of the Rule 12(c) motions, the parties filed the three pending
Motions, seeking to exclude certain expert testimony. And,
although Defendants assert grounds for striking Connectus’s
experts’ reports that are not based on Rule 702 and Daubert,
the Motions should be treated as Daubert motions. Indeed, all
three Motions contain arguments for why this Court should
exclude the particular expert’s testimony under Federal Rule
of Evidence 702 and the progeny of Daubert v. Merrell Dow
Pharmaceuticals, Inc., 509 U.S. 579 (1993). (Doc. ## 109 at
11, 143 at 9, 147 at 5). The Court turns to those Motions
now.
II.
Standard
Federal Rule of Evidence 702 allows “[a] witness who is
qualified
as
an
expert
by
knowledge,
skill,
experience,
training, or education [to] . . . testify in the form of an
opinion or otherwise,” if certain criteria are satisfied;
namely,
9
(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. “Rule 702 compels the district courts to
perform the critical ‘gatekeeping’ function concerning the
admissibility of expert” testimony. United States v. Frazier,
387
F.3d
1244,
1260
(11th
Cir.
2004).
“This
function
‘inherently require[s] the trial court to conduct an exacting
analysis’ of the foundations of expert opinions to ensure
they meet the standards for admissibility under Rule 702.”
Id. (quoting McCorvey v. Baxter Healthcare Corp., 298 F.3d
1253, 1257 (11th Cir. 2002)) (emphasis in original).
“[I]n determining the admissibility of expert testimony
under Rule 702, [a court] engage[s] in a rigorous three-part
inquiry.” Id. The district court must consider 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.
10
City of Tuscaloosa v. Harcros Chems., Inc., 158 F.3d 548, 562
(11th Cir. 1998). “[A]lthough there is some overlap among the
inquiries into an expert’s qualifications, the reliability of
his proffered opinion[,] and the helpfulness of that opinion,
these are distinct concepts that courts and litigants must
take care not to conflate.” Quiet Tech. DC-8, Inc. v. HurelDubois UK Ltd., 326 F.3d 1333, 1341 (11th Cir. 2003). “The
proponent of expert testimony always bears ‘the burden . .
.’” of satisfying the Court’s three-part inquiry, Frazier,
387 F.3d at 1260, by a preponderance of the evidence. Allison
v. McGhan Med. Corp., 184 F.3d 1300, 1306 (11th Cir. 1999).
As
to
the
qualification
inquiry,
an
expert
can
be
qualified “by knowledge, skill, experience, training, or
education.” Fed. R. Evid. 702; see also Frazier, 387 F.3d at
1260 (“we observe that experts may be qualified in various
ways”). But, “[i]f the [expert] witness is relying solely or
primarily on experience, then,” in establishing reliability,
“the witness must explain how that experience leads to the
conclusion reached, why that experience is a sufficient basis
for the opinion, and how that experience is reliably applied
to the facts.” Frazier, 387 F.3d at 1261 (citation and
internal quotation marks omitted). “Exactly how reliability
is evaluated may vary from case to case, but what remains
11
constant is the requirement that the trial judge evaluate the
reliability of the testimony before allowing its admission at
trial.” Id. at 1262 (citing Fed. R. Evid. 702 advisory
committee’s note (2000 amends.) (“The trial judge in all cases
of proffered expert testimony must find that it is properly
grounded, well-reasoned, and not speculative before it can be
admitted.”)) (emphasis in original).
There
are
four
recognized,
yet
non-exhaustive,
considerations—
“(1) whether the expert’s methodology has been
tested or is capable of being tested; (2) whether
the technique has been subjected to peer review and
publication; (3) the known and potential error rate
of the methodology; and (4) whether the technique
has been generally accepted in the proper
scientific community”
—a district court may use in evaluating reliability. Seamon
v. Remington Arms Co., LLC, 813 F.3d 983, 988 (11th Cir. 2016)
(citations omitted). A district court can take other relevant
factors into account as well. Id. (citations omitted). The
Court’s analysis as to reliability “focus[es] ‘solely on
principles and methodology, not on the conclusions that they
generate.’” Id. (citation omitted).
Expert testimony must also assist the trier of fact.
Fed. R. Evid. 702. “By this requirement, expert testimony is
admissible
if
it
concerns
matters
12
that
are
beyond
the
understanding of the average lay person.” Frazier, 387 F.3d
at 1262 (citation omitted). “[T]he court must ‘ensure that
the proposed expert testimony is “relevant to the task at
hand,” . . . i.e., that it logically advances a material
aspect of the proposing party’s case.’” Allison, 184 F.3d at
1312 (citation omitted). So, while “[t]he ‘basic standard of
relevance . . . is a liberal one,’ Daubert, 509 U.S. at 587,
.
.
.[,]
if
an
expert
opinion
does
not
have
a
‘valid
scientific connection to the pertinent inquiry[,]’ it should
be excluded because there is no ‘fit.’” Boca Raton Cmty.
Hosp., Inc. v. Tenet Health Care Corp., 582 F.3d 1227, 1232
(11th Cir. 2009) (citations omitted).
Moreover, “[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.”
Frazier, 387 F.3d at 1262-63 (citation omitted). Similarly,
pure questions of law are “not a matter subject to expert
testimony.” Myers v. Bowman, 713 F.3d 1319, 1328 (11th Cir.
2013) (citing Freund v. Butterworth, 165 F.3d 839, 863 n.34
(11th Cir. 1999) (en banc)).
13
III. Analysis
A.
Preliminary Matters
1.
Trier of Fact: A Jury or the Bench?
In their response to Connectus’s Motion, Defendants note
that “[t]he Court has not yet stated whether this matter, if
it goes to trial, will be a bench trial as set forth in the
Parties’ contract . . . or a jury trial as requested by
Plaintiff . . . .” (Doc. # 186 at 2 n.1). The parties’
agreement does contain a clause addressing demands for a jury
trial (Doc. # 200-1 at ¶ 6), and, based on the Court’s
recollection (as neither party provided the transcript of the
Case Management Hearing), the issue of this waiver provision
did
come
up
at
the
Case
Management
Hearing.
The
Court
indicated at the hearing that it would address the issue if
and when the Court was squarely faced with the issue by way
of motion, as required under Local Rule 3.01(f). Because
neither of the Defendants have moved to strike Connectus’s
jury
demand,
enforceability
the
of
Court
the
declines
agreement’s
to
opine
as
jury-waiver
to
the
provision
without the benefit of a proper motion and sufficiently
focused briefing.
14
2.
New Arguments
In their reply in support of the Motion seeking to
exclude Kidder’s testimony, Defendants raise a new argument.
In particular, Defendants argue the agreement’s limitationof-liability clause should cap any damages awarded under
Connectus’s CUTSA claim. (Doc. # 203 at 6). While the Court
did rule in favor of Ampush with respect to the enforceability
of the agreement’s limitation-of-liability clause in its
January 20, 2017, Order, that ruling was made in the context
of
Ampush’s
argument.
Notably,
Ampush’s
argument
only
addressed the applicability of the limitation-of-liability
clause as to the the breach-of-contract claim. (Doc. ## 115
at 12; 188 at 23-25).
This
Court
ordinarily
does
not
consider
arguments
asserted for the first time on reply, Grasso v. Grasso, 131
F. Supp. 3d 1303, 1309 (M.D. Fla. 2015), and sees no reason
why it should handle this matter any differently. To be sure,
case law requires as much. Herring v. Sec’y, Dep’t of Corr.,
397 F.3d 1338, 1342 (11th Cir. 2005) (“As we repeatedly
admonished, ‘[a]rguments raised for the first time in a reply
brief are not properly before a reviewing court.’” (quoting
United States v. Coy, 19 F.3d 629, 632 n.7 (11th Cir. 1994);
citing United States v. Whitesell, 314 F.3d 1251, 1256 (11th
15
Cir. 2002); United States v. Dicter, 198 F.3d 1284, 1289 (11th
Cir. 1999); United States v. Martinez, 83 F.3d 371, 377 n.6
(11th Cir. 1996))).
3.
Violations of Local Rules
Connectus argues that Defendants’ Motion seeking the
exclusion
of
Strandberg’s
testimony
should
be
summarily
denied for failure to comply with Local Rule 3.01(g). (Doc.
# 145 at 24). In their reply, Defendants admit their opening
brief does not comply with Local Rule 3.01(g). (Doc. # 174 at
8
n.8).
But,
Connectus
also
violated
the
Local
Rules.
Specifically, Connectus violated Local Rule 3.01(b), which
limits a response in opposition to a motion to twenty pages.
Connectus’s response is twenty-six pages long. (Doc. # 145).
The parties also dispute whether Connectus timely filed its
response to Defendants’ Motion seeking to exclude Kidder’s
testimony. (Doc. ## 203, 204). Faced with parties that have
not complied with the Local Rules, but all of which have had
an opportunity to be fully heard on the merits, the Court
declines to summarily deny Defendants’ Motion seeking to
exclude
Strandberg’s
Connectus’s
response
testimony
to
the
and
Motion
declines
seeking
Kidder’s testimony. M.D. Fla. L.R. 1.01(c).
16
to
to
strike
exclude
The Court takes this opportunity to remind counsel they
must
comply
Notably,
with
the
all
Local
Rules,
Rules
including
require
the
Local
attorneys
Rules.
admitted
to
practice before this Court to have read and be familiar with
the Local Rules. M.D. Fla. L.R. 2.01(b), 2.02(c).
4.
Mooted Issues and Arguments
The Court’s January 20, 2017, Order dismissed Counts I,
III, and IV of the Second Amended Complaint; dismissed Count
II of the Second Amended Complaint, but granted Connectus
leave to refile the trade-secrets claim under California law;
and dismissed Count VI of the Second Amended Complaint insofar
as
Connectus
sought
to
plead
a
stand-alone
claim
for
injunctive relief. (Doc. # 188 at 31-32). As such, only two
claims remain, a claim under CUTSA (Count I) and a claim for
breach of contract (Count II). (Doc. # 200). Arguments made
in
the
instant
boundaries
set
Motions
by
the
addressing
Third
issues
Amended
beyond
the
Complaint
are
consequently irrelevant and denied as moot.2
2
The remaining, now irrelevant arguments are a by-product of
the parties’ declination of the Court’s invitation to refile
the instant Motions, which has shifted the burden of culling
these irrelevancies from the parties to the Court.
17
B.
Motion to Exclude the Testimony of Strandberg
Strandberg was retained by Connectus to opine on how the
Telephone Consumer Protection Act, 47 U.S.C. § 227, et seq.,
pertains to
First, whether Ampush Media, Inc. and DGS Edu,
LLC’s (“defendants”) took reasonable and commonly
employed steps to prevent data, which it allegedly
unlawfully acquired from eDegree (“disputed data”),
from being used in a manner that violates the
TCPA[;]
Second, whether defendants should have understood
eDegree lead information to be confidential[;]
Third, whether eDegree may incur costs related to
TCPA violations involving the disputed data[;]
Fourth, whether eDegree is an intended beneficiary
of the TCPA[; and]
Fifth, whether defendants’ actions with respect to
the disputed data interfered with eDegree’s ability
to benefit from the TCPA.
(Doc. # 109-1 at 4). As stated in her report, Strandberg’s
“analysis and conclusions are based on [her] experience as a
lawyer
in
private
practice
representing
technology
and
communications companies before the Federal Communications
Commission
.
.
.
and
federal
courts
in
the
area
of
telecommunications regulation and policy.” (Id.). For the
past
eleven
years,
Strandberg’s
practice
has
included
“regularly counsel[ing] companies that provide call center
and similar services . . . and other entities subject to TCPA
18
requirements.”
(Id.).
In
addition,
Strandberg’s
practice
includes “assist[ing] in contractual and compliance matters
concerning
the
protection
of
confidential
information.”
(Id.).
Furthermore, Strandberg received her law degree in 1995
and received her undergraduate degree, although she does not
specify her major or any minors, magna cum laude in 1990.
(Id.). Although she has not testified as an expert in the
last
four
years,
she
has
co-authored
nine
publications
relating to telecommunications, seven of which were articles
relating to regulations of telecommunications. (Id. at 5,
21).
1.
Subject-Matter Jurisdiction Argument
Rather than bringing a 12(b)(1) or 12(b)(6) motion,
Defendants embed a jurisdictional challenge within their
Daubert Motion pertaining to Strandberg. (Doc. # 109 at 7 n.4
(citing Nicklaw v. Citimortgage, Inc., No. 15-14216, 2016 WL
5845682, at *2 (11th Cir. Oct. 6, 2016)). In particular,
Defendants argue this Court lacks subject-matter jurisdiction
to adjudicate claims involving or leading to damages incurred
by
Connectus
in
defending
against
TCPA
suits
because
Connectus lacks Article III standing to seek such damages.
(Id. at 7-11). Defendants also argue prudential standing
19
concerns militate against the exercise of jurisdiction with
respect to any TCPA claim or a damages award arising from a
TCPA violation. (Id.).
The Court need not expound upon the requirements of
Article III standing or the doctrine of prudential standing
in order to dispose of Defendants’ arguments for an elementary
reason: Connectus’s pleading neither asserts a TCPA claim,
nor seeks damages arising from liability under the TCPA.
Strandberg’s proffered expert report does discuss the TCPA
and the damages Connectus might incur from forecasted TCPA
suits; however, as discussed below, such opinion testimony is
irrelevant to this action. Had Connectus’s pleading asserted
a
TCPA
claim
or
a
claim
for
indemnification,
vicarious
liability, or the like, for damages arising from a TCPA
violation, then perhaps standing concerns would arise. As
pled, though, no such damages are involved and therefore
Defendants’ standing arguments are inapposite.
In an abundance of caution, the Court addresses subjectmatter jurisdiction. Indeed, a federal court is obligated to
ensure jurisdiction exists at all stages of a proceeding.
Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 94,
101 (1998); In re Bayou Shore SNF, LLC, 828 F.3d 1297, 1328
20
(11th Cir. 2016); Atlanta Gas Light Co. v. Aetna Cas. & Sur.
Co., 68 F.3d 409, 414 (11th Cir. 1995).
Connectus
relies
on
28
U.S.C.
§
1332
to
establish
subject-matter jurisdiction. (Doc. # 200 at ¶ 10). Section
1332
requires
complete
diversity
of
citizenship
and
the
amount in controversy to exceed $75,000. 28 U.S.C. § 1332;
Univ. of S. Ala. v. Am Tobacco Co., 168 F.3d 405, 412 (11th
Cir. 1999). The party invoking jurisdiction bears the burden
of establishing that the Court’s exercise of jurisdiction is
proper. Bishop v. Reno, 210 F.3d 1295, 1298 (11th Cir. 2000).
Connectus is a limited liability company. (Doc. # 200 at
¶ 2). Connectus’s sole member is Digital Media Solutions,
LLC. (Id. at ¶ 4). The members of Digital Media Solutions are
“an individual who is domiciled[3] in Florida, and Prism Data,
LLC.” (Id. at ¶ 5). Prism Data, in turn, is composed of three
members; two members are domiciled in Florida and one is
domiciled
in
Pennsylvania.
(Id.
at
¶
6).
Accordingly,
Connectus is a citizen of Florida and Pennsylvania. Rolling
Greens MHP, L.P. v. Comcast SCH Holdings L.L.C., 627 Fed.
Appx. 755, 757-58 (11th Cir. 2015).
3
Citizenship of a natural person is determined by domicile.
McCormick v. Aderholt, 239 F.3d 1254, 1257-58 (11th Cir.
2002).
21
DGS Edu is also a limited liability company. (Id. at ¶
9). DGS Edu is wholly owned by Digital Globe Services, Inc.,
which is a Delaware corporation with its principal place of
business in California. (Id.). Therefore, DGS Edu is a citizen
of Delaware and California. 28 U.S.C. § 1332(c)(1); Rolling
Greens MHP, 627 Fed. Appx. at 757-58.
For its part, Ampush is a Delaware corporation with its
principal place of business in California. (Doc. # 200 at ¶
8). Thus, Ampush is a citizen of Delaware and California. 28
U.S.C. § 1332(c)(1).
As to the amount in controversy, Connectus alleges it
has been damaged by Defendants’ misappropriation of 838,853
leads and each lead is worth between $18 and $24. (Id. at ¶
31). In addition, Connectus pleads damages in excess of
$19,000,000,
“without
taking
into
account
the
damage
to
Plaintiff’s reputation and goodwill.” (Id.). The amount in
controversy therefore exceeds $75,000.
In
summation,
Connectus
is
completely
diverse
from
Defendants and the amount in controversy exceeds $75,000. As
such, the Court has subject-matter jurisdiction to hear the
claims brought in this diversity action, which are a CUTSA
claim (Count I) and a breach-of-contract claim (Count II).
Defendants’ arguments that the Court lacks jurisdiction on
22
the theory that Connectus does not have standing with respect
to a TCPA claim or TCPA damages lack merit because Connectus
is not asserting a TCPA claim. (Doc. # 200).
2.
Exclusion of Strandberg’s Testimony
Keeping in mind that Connectus bears the burden of
persuasion by a preponderance of the evidence, the Court
summarizes Connectus’s arguments for why Strandberg should be
allowed to opine as an expert. And, those two reasons4 are
(1)
her
opinions
as
to
TCPA
compliance
and
Defendants’
putative noncompliance with the TCPA show that Defendants
should have known the scrap data was confidential and (2) her
opinions on Defendants’ alleged noncompliance with the TCPA
are “relevant to show the damages that Plaintiff is entitled
to for its existing claims.” (Doc. # 145 at 19).
With
respect
to
the
first
reason—i.e.,
that
noncompliance with the TCPA can be used to show Defendants
should
have
known
the
scrapped
data
was
confidential—
Defendants argue Strandberg is not qualified to opine on the
educational lead-generation industry’s customs or practices
and that her proffered testimony is unreliable, unhelpful,
4
Connectus also argues Strandberg’s opinions are relevant in
support of its (now dismissed) unfair competition claim.
(Doc. # 145 at 16-19). But, that claim has been dismissed and
so the argument is irrelevant.
23
and irrelevant. Moreover, Defendants correctly point out that
the agreement governing the parties’ relationship was signed
in May of 2013, whereas the current version of the TCPA was
not in force until October 16, 2013. (Doc. # 174 at 6-7); see
also Murphy v. DCI Biologicals Orlando, LLC, No. 6:12-cv1459-Orl-36KRS, 2013 WL 6865772, at 6 n.7 (M.D. Fla. Dec. 31,
2013).
The
Court
agrees
with
Defendants
that
Strandberg
satisfies neither Rule 702, nor Daubert and its progeny. In
particular, Connectus failed to show by a preponderance of
the evidence that Strandberg is qualified to opine as to
whether Defendants should have known the scrapped data was
confidential, a term defined by the parties’ agreement. The
only
evidence
in
the
record
concerning
Strandberg’s
qualifications to testify on the educational lead-generation
industry’s customs or practices is that she “assist[s] in
contractual and compliance matters concerning the protection
of confidential information.” (Doc. # 109-1 at 4).
That vague statement, however, does not explain the
extent of her experience. Furthermore, Connectus failed to
respond
with
additional
evidence
showing
Strandberg
is
qualified by experience, e.g., the number of clients she has
advised, whether those clients were in the educational lead-
24
generation industry, and the extent to which she assisted
those clients. In addition, the reliability of her opinions
on
the
industry’s
customs
and
practices
has
not
been
adequately established because Strandberg does not explain
why her experience is a sufficient basis for her opinion and
how her experience is reliably applied to the facts of this
case. Rather, Strandberg’s opinion on whether Defendants
should have known the scrapped data was confidential consists
of single paragraph totaling two conclusory sentences in
length. (Doc. # 109-1 at 12) (“Based on my experience working
with call center providers and other entities engaged in
telemarketing
and
customer
resource
management,
it
is
important to maintain the confidentiality of leads in order
to maintain their value, and lead information is not shared
in
the
absence
Similarly,
in
of
my
compensation
experience
for
that
entities
in
information.
this
industry
understand information derived from leads and potential leads
to
be
proprietary
information
that
should
be
accorded
confidential treatment.”).
Moreover,
Strandberg’s
the
Court
proffered
agrees
with
testimony
Defendants
regarding
that
Defendants’
supposed noncompliance with the TCPA would not be helpful to
the
trier
of
fact.
In
particular,
25
Conntecus
failed
to
demonstrate by a preponderance of the evidence that showing
a violation of the TCPA would help the trier of fact determine
whether scrapped lead data is confidential. In addition, the
Court agrees that whether Defendants violated the TCPA or
failed to implement a compliance program for the TCPA is
irrelevant to whether Defendants violated CUTSA or breached
the parties’ agreement.
The elements for a CUTSA claim are “(1) the plaintiff
owned a trade secret, (2) the defendant acquired, disclosed,
or used the plaintiff’s trade secret through improper means,
and
(3)
the
defendant’s
actions
damaged
the
plaintiff.”
Language Line Servs., Inc. v. Language Servs. Assocs., Inc.,
944 F. Supp. 2d 775, 779 (N.D. Cal. 2013) (citations omitted);
see also Cal. Civ. Code § 3426.1 (defining trade secret and
improper means). And the elements for a breach-of-contract
claim are “(1) a contract, (2) plaintiff’s performance or
excuse for nonperformance, (3) defendant’s breach, and (4)
damage to plaintiff.” Neal v. Quality Loan Serv. Corp., 301
Fed. Appx. 679, 680 (9th Cir. 2008) (citing Walsh v. W. Valley
Mission Cmty. Coll. Dist., 78 Cal. Rptr. 2d 725, 733 (Cal.
Dist. Ct. App. 1998)).
As can be seen, none of the elements for the causes of
action at issue in this suit are advanced by showing a
26
violation of the TCPA. The putative misconduct in this case
is
not
calling
third
parties,
it
is
allegedly
taking
proprietary information—the lead data—without paying for it.
Thus, when answering the questions of whether scrapped lead
data is confidential and whether CUTSA was violated, what
happened
with
the
information
after
it
was
supposedly
misappropriated is inconsequential.
Furthermore,
Strandberg’s
report
does
not
just
tangentially touch upon the TCPA, it is centered entirely on
the TCPA. Introducing evidence of whether Defendants violated
the TCPA, which would require an in-depth discussion of the
TCPA’s requirements, is substantially likely to confuse the
issues in this case. The TCPA regulates when a telemarketer
or other entity may contact a person and there is nothing in
Strandberg’s report explaining how those regulations affect
what information the parties agreed by private contract to
keep confidential.
As for Connectus’s argument that Strandberg’s opinions
on
Defendants’
alleged
noncompliance
with
the
TCPA
are
relevant to show the damages to which Connectus is entitled,
the Court disagrees. To begin, the Court is cognizant that a
plaintiff only needs to place a defendant on notice of the
claim being brought against it. Fed. R. Civ. P. 8. To be sure,
27
“[a] complaint need not specify in detail the precise theory
giving rise to recovery, . . . all that is required is that
the defendant be on notice as to the claim . . . and the
grounds on which it rests.” Brisk v. Shoreline Found., Inc.,
654 Fed. Appx. 415, 417 (11th Cir. 2016) (citing Sams v.
United Food & Commercial Workers Int’l Union, AFL-CIO, CLC,
866 F.2d 1380, 1384 (11th Cir. 1989)). At the same time
though, “a defendant is not required to infer all possible
claims that could arise out of the facts set forth in the
complaint . . . .” Id. (citing Gilmour v. Gates, McDonald &
Co., 382 F.3d 1312, 1315 (11th Cir. 2004)).
Here, not a single iteration of Connectus’s pleadings
(and there have been four at this point) contain even the
most oblique reference to the TCPA. (Doc. # 1, 9, 106, 200).
Rather, a fair reading of each complaint is that Connectus
alleges Defendants did not pay for 838,853 leads and breached
the parties’ agreement by selling scrap data generated when
Connectus searched Defendants’ portal. Further, to the extent
Connectus could have used its claim for unfair competition to
seek
damages
resulting
from
costs
incurred
in
defending
against TCPA suits caused by Defendants’ alleged actions,
that avenue has been foreclosed by the Court’s January 20,
2017, Order, which dismissed the unfair competition claim as
28
preempted. In short, Connectus’s pleadings have never once
even implied that damages rested on yet-to-have-occurred TCPA
suits caused by Defendants’ alleged actions.
On the basis of the foregoing, Strandberg’s proffered
testimony as to damages Connectus might incur from defending
against TCPA suits caused by Defendants’ alleged misconduct
would not help the trier of fact in determining if liability
has been established and, if so, what amount should be awarded
in damages. There is simply no fit between Strandberg’s TCPAdamages theory and the issues in this case. Furthermore,
allowing Strandberg to testify on such irrelevant and unripe
damages would confuse the issues.
In sum, the Court finds that it should exercise its
gatekeeper
function
and
exclude
Strandberg’s
proffered
testimony. Connectus has not demonstrated by a preponderance
of the evidence that Strandberg is qualified to opine on the
educational lead-generation industry’s customs and practices.
Connectus
also
failed
to
demonstrate
that
Strandberg’s
opinions are reliable because Strandberg failed to explain
why her experience is a sufficient basis for her opinion and
how her experience is reliably applied to the facts of this
case.
Additionally,
Connectus
failed
to
sufficiently
establish that Strandberg’s testimony would be helpful and
29
failed to show that her testimony would not confuse the trier
of fact.
C.
Motion to Exclude the Testimony of Kidder
Defendants seek to exclude the testimony of Kidder,
Connectus’s designated damages expert. (Doc. # 143). Kidder
was retained by Connectus to “quantify damages arising from”
Defendants’ “alleged misappropriation of leads . . . .” (Doc.
# 201-1 at 4). In particular, Kidder’s report indicates he
exclusively
calculated
enrichment.
(Id.
at
damages
19-38;
in
Doc.
the
#
form
201-2
of
unjust
(noting
the
supplemental report did not alter Kidder’s methodology or his
conclusions)).
Of course, Connectus’s stand-alone claim for unjust
enrichment was dismissed as preempted by the Court’s January
20, 2017, Order. (Doc. # 188). That then leaves only the
possibility
of
using
unjust
enrichment
as
a
theory
of
liability attached to some viable cause of action. Under
California law, a party may recover damages in the form of
unjust enrichment under CUTSA. Cal. Civ. Code § 3426.3(a);
Cellular Accessories for Less, Inc. v. Trinitas LLC, No. CV
12-06736, 2014 WL 4627090, at *2 (C.D. Cal. Sept. 16, 2014);
Digital Envoy, Inc. v. Google, Inc., No. 5:04-cv-1497 RS,
2005 WL 2999364, at *5 (N.D. Cal. Nov. 8, 2005). But, CUTSA
30
“does not affect . . . contractual remedies, whether or not
based upon misappropriation of a trade secret . . . .” Cal.
Civ. Code § 3426.7(b)(1).
In its January 20, 2017, Order, the Court found the
agreement’s limitation-of-liability clause enforceable with
respect to the breach-of-contract claim. (Doc. # 188). In
reaching that decision, the Court was only faced with the
argument of enforceability of the limitation-of-liability
clause vis-à-vis the breach-of-contract claim, ostensibly
because Defendants were focused on having the trade-secrets
claim dismissed for being improperly brought under Florida
law. Now, in the context of a Daubert motion, the question of
enforceability has returned, this time with respect to the
CUTSA claim.
While the Court will not entertain arguments raised for
the first time in a reply brief, Defendants are free to argue
the applicability of the limitation-of-liability clause to
the CUTSA claim at summary judgment. Accordingly, addressing
the Motion seeking exclusion of Kidder’s testimony would be
premature at this juncture. The Motion seeking to exclude
Kidder’s testimony is therefore denied without prejudice. If
it becomes necessary, after the disposition of Defendants’
motions for summary judgment, to hear arguments as to why
31
Kidder’s
testimony
should
be
excluded,
the
Court
will
entertain those arguments at the appropriate juncture.
D.
Motion to Exclude the Testimony of Moroney
Defendants proffer the testimony of Moroney as an expert
in the call center industry to opine on the customs and
practices applicable to this case. (Doc. # 186). Accordingly,
it is Defendants that bear the burden of persuasion by a
preponderance
of
the
evidence.
In
sum,
Defendants
argue
Moroney is qualified to offer his opinion on the customs and
practices of the educational lead-generation industry based
on his experience and his opinions are not impermissible legal
conclusions. (Id. at 11-18). Connectus disagrees and argues
that Moroney is not qualified to testify as an expert because
there
is
a
distinction
between
the
educational
lead-
generation industry and the call center industry. (Doc. # 147
at 9-13). Connectus further argues that Moroney should not be
permitted to opine as to matters of contract interpretation.
(Id. at 7-9).
As to qualifications, Moroney has twenty-five years’
experience in the “Contact Center industry,” with the first
twelve
years
focused
on
operations
management
and
the
following thirteen years focused on business development
activities.
(Doc.
#
147-3
at
32
4).
Furthermore,
Moroney
attended Christian Brothers College, Co. in Dublin, Ireland.
(Id. at 5).
Connectus’s argument for why Moroney is not qualified to
provide expert testimony boils down to its assertion that a
sufficiently large difference exists between the educational
lead-generation industry and the “Contact Center” or call
center industry such that opinions as to one industry are
inapplicable to the other industry.
Moroney’s report notes that “the subject matter of this
contract involves the generation of leads, which is, in and
of itself, a unique industry,” and as such he “review[ed]
several articles related specifically to the Lead Generation
Industry, to determine” if his opinions based on experience
in the call center industry “should substantively be modified
by the particularity of the industry.” (Id. at 5). While
Moroney’s
preceding
statement
gives
the
Court
pause,
Defendants’ response is well-taken.
Citing to the parties’ agreement, Defendants point out
that the agreement explicitly states in the first paragraph
that it “governs the rights and responsibilities of the
foregoing parties with respect to the call center services
provided by VENDOR to AMPUSH . . . .” (Doc. # 200-1 at ¶ 1.1)
(emphasis added). Moreover, section two of the agreement,
33
labeled “Services and Service Levels,” lays out a detailed
framework indicating, among other things, that Connectus was
obligated to “make outbound calls in an effort to generate
leads on behalf of AMPUSH.” (Id. at ¶ 2.1).
When viewed against the agreement’s terms, Moroney’s
statement
that
the
engagement
models
with
which
he
is
familiar, “i.e., a vendor provid[ing] call center services on
behalf of a client to offer services or products to existing
or potential consumer/customers,” (Doc. # 147-3 at 5), is, to
be sure, a match. In light of the agreement’s terms and
Moroney’s experience, the Court finds exclusion under Daubert
is not warranted. Instead, a thorough and vigorous crossexamination will afford Connectus the proper and sufficient
means of challenging the weight and certainty of Moroney’s
opinions. Health & Sun Research, Inc. v. Australian Gold,
LLC, No. 8:12-cv-2319-T-33MAP, 2013 WL 6086457, at *4 (M.D.
Fla. Nov. 19, 2013) (“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.” (quoting Taylor, Bean & Whitaker Mortg. Corp. v. GMAC
34
Mortg. Corp., No. 5:05-cv-260-Oc-GRJ, 2008 WL 3819752, at *5
(M.D. Fla. Aug. 12, 2008))).
Connectus also argues that Moroney should not be allowed
to opine as to matters relating to contract interpretation.
The Court agrees. Myers, 713 F.3d at 1328. Moroney may not
opine, for example, as to his opinion that Connectus has, for
the most part, ignored the plain terms of the agreement.
However, that does not mean Moroney may not rely on the
agreement to form his opinions. Likewise, that does not mean
Moroney is barred from mentioning the agreement. Fed. R. Evid.
703, 704. Connectus is free to raise specific objections at
trial, if this case should proceed that far.
Accordingly, it is
ORDERED, ADJUDGED, and DECREED:
(1)
Defendants DGS Edu, LLC and Ampush Media, Inc.’s Joint
Motion
to
Strike/Exclude
the
Report,
Opinions,
and
Testimony of Plaintiff’s Designated Expert Witness Brita
D. Strandberg (Doc. # 109), is GRANTED.
(2)
Defendants’ Joint Motion to Strike/Exclude the Report,
Opinions, and Testimony of Plaintiff’s Designated Expert
Witness Douglas Kidder (Doc. # 143), is DENIED WITHOUT
PREJUDICE. Defendants may reassert arguments as to why
Kidder’s
report
should
be
35
excluded
if
it
becomes
necessary after the disposition of summary judgment
motions.
(3)
Plaintiff Connectus LLC’s Motion to Strike the Expert
Report of Thomas P. Moroney (Doc. # 147), is GRANTED IN
PART AND DENIED IN PART to the extent set forth herein.
DONE and ORDERED in Chambers in Tampa, Florida, this
13th day of February, 2017.
36
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