Prime Finish, LLC v. ITW Deltar IPAC
Filing
181
MEMORANDUM OPINION AND ORDER: Dft's 138 Motion to Exclude Mr. Bacon and Mr. Hurley Under Federal Rule of Evidence 702 is DENIED. Signed by Judge Gregory F. VanTatenhove on May 5, 2017. (AWD) cc: COR
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF KENTUCKY
CENTRAL DIVISION
LEXINGTON
PRIME FINISH, LLC,
Plaintiff,
and
CAMEO, LLC,
Intervenor Plaintiff,
V.
ITW DELTAR IPAC,
Defendant.
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Civil No. 5:08-cv-0438-GFVT
MEMORANDUM OPINION
&
ORDER
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“No one will deny that the law should in some way effectively use expert knowledge
wherever it will aid in settling disputes. The only question is as to how it can do so best.”
Learned Hand, Historical & Practical Considerations Regarding Expert Testimony, 15 HARV. L.
REV. 40, 40 (May 1901). As the above-styled civil jury trial approaches, Defendant seeks to
exclude both expert witnesses noticed by the opposite side, alleging the proposed experts are
unreliable, their findings lack a sufficient factual basis, and they will not assist the trier of fact.
Specifically, the Defendant seeks to exclude both Plaintiff’s experts, Mr. Hurley and Mr. Bacon.
After reviewing the case law, record, and filings, and for the reasons that follow, the Court finds
both experts should be allowed to testify and DENIES the pending motion to exclude.
I
This lawsuit was initiated when Prime Finish LLC brought suit against Defendant ITW
Deltar IPAC in 2008. [See R. 1.] The action was removed by Defendant from Bourbon Circuit
Court. Cameo, LLC, intervened, and following a settlement agreement between Prime and ITW,
became the only remaining party with claims against Defendant ITW. The factual predicate
behind the instant action is set forth in greater detail in previous orders of the Court, and the most
recent ruling on Defendant’s Motions for Partial Summary Judgment. [See R. 180.] In short,
Defendant ITW is accused of breaching a Product Supply Agreement that was made between
ITW and Prime Finish. Cameo, as intended creditor beneficiary of the supply agreement, now
sues ITW for the contract’s early termination penalty and damages arising from ITW’s alleged
breach. Trial by jury is currently set to begin on May 16, 2017. [R. 120.]
Several months ago the parties exchanged expert reports, prompting admissibility
challenges from the Defendant, ITW. Defendant moves to exclude the testimony of Mr. David
Bacon and Mr. Paul Hurley pursuant to Federal Rule of Evidence 702 and the legal standard
established in Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993). [R. 138.]
Neither party requested an oral argument to discuss the expert’s qualifications or the data used to
formulate the expert reports.
II
A
The admissibility of expert testimony is governed by Federal Rule of Evidence 702,
which states:
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. From Rule 702 comes a two part test for admitting expert testimony. First, is
2
the expert qualified and the testimony reliable? And, second, is the evidence relevant and helpful
to the trier of fact? See, e.g., United States v. Jones, 107 F.3d 1147, 1156 (6th Cir. 1997).
The seminal case applying the first prong of the test is Daubert v. Merrell Dow Pharm.,
Inc., 509 U.S. 579 (1993). In that decision, the Supreme Court explained that a district court’s
gatekeeping responsibility is implicit in Rule 702, “ensuring that an expert’s testimony both rests
on a reliable foundation and is relevant to the task at hand.” Daubert, 509 U.S. at 597. Further,
the Supreme Court listed several specific factors to help determine the reliability of expert
testimony based on scientific knowledge. See id. at 590, n. 8. These factors include whether a
theory or technique can be or has been tested; whether the theory has been subjected to peer
review and publication; whether there is a high known or potential error rate; whether there are
certain operation standards that should have been or were followed; and whether the theory or
technique is generally accepted within the scientific community. Id. at 592-94. Later, in Kumho
Tire Co. v. Carmichael, 526 U.S. 137 (1999), the Supreme Court determined that the
gatekeeping obligation and subsequent factors established in Daubert apply with equal force to
non-scientific experts. However, those factors are not definitive and district courts “must have
considerable leeway in deciding in a particular case how to go about determining whether
particular expert testimony is reliable.” Kumho, 526 U.S. at 152.
As for the second prong of the test, district courts “must ensure that the proposed expert
testimony is relevant to the task at hand and will serve to aid the trier of fact.” United States v.
Smithers, 212 F.3d 306, 313 (6th Cir. 2000). The Supreme Court in Daubert referred to this
prong as the “fit” requirement. See id.; Daubert, 509 U.S. at 591-93. Because “scientific
validity for one purpose is not necessarily scientific validity for other, unrelated purposes,”
courts must consider whether a particular expert’s testimony will truly assist the trier of fact to
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understand the evidence in the case at hand. Daubert, 509 U.S. at 591.
Notably, the Court’s gatekeeping role under the case law “is not intended to supplant the
adversary system or the role of the jury.” Allison v. McGhan Medical Corp., 184 F.3d 1300,
1311 (11th Cir. 1999). Instead, “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. Whether or not to admit
expert testimony is a matter over which the district court ultimately enjoys broad discretion. See,
e.g., Tamraz v. Lincoln Elec. Co., 620 F.3d 665, 672 (6th Cir. 2010).
B
Defendant challenges the reliability and helpfulness of the experts noticed by Cameo: Mr.
Hurley and Mr. Bacon. For the reasons explained below, both experts will be allowed to testify,
as the Court finds the experts’ testimony will, indeed, assist the trier of fact.
1
Cameo seeks to elicit testimony from Mr. Hurley about “a single narrow issue: how mold
defects in injection molded parts provided by ITW impacted Prime Finish’s ability to
consistently apply a painted finish to those parts.” 1 [R. 141 at 7.] Defendant clarifies that Mr.
Hurley will not opine as to the “general quality of Prime Finish’s painting work, or a statistical
analysis of the number of parts rejected due to painting issues.” Id. After reviewing roughly
one-hundred pages of documents, Mr. Hurley’s expert testimony will address inconsistencies in
the molded product and the resulting defects such as: short shots, gate blush, surface blemish,
1
See R. 138-5 at 4, Paul Hurley’s report states, “[i]n Conclusion it is my opinion that
there was [sic] ongoing molding issues and the contributing root causes were not fully
investigated . . . it is further my opinion that Prime Finish’s ability to consistently produce a
cosmetic and aesthetic painted part was substantially and continuously hindered.”
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dented parts, molded in black specks, foreign substance/contamination on raw molded parts,
rough surfaces on molded parts, sinks, splay, mold strings, shiny spots, and parting line issues.
[See R. 138-5 at 2-4.] Mr. Hurley believes the parts supplied by ITW and their mold defects
negatively impacted paint quality.
Mr. Dave Bacon, the paint quality expert, has been hired by Cameo to opine as to
“whether a serious continuing Quality/Delivery issue existed in the painting work performed by
Prime Finish.” [R. 141 at 11.] Mr. Bacon’s Expert Report concludes in a “Summary” that has
four findings: (1) he found no evidence that there was a serious continuing quality or delivery
issue, (2) Prime responded to all quality issues in a timely manner, (3) he found no evidence that
Prime was notified or evaluated using formal Supplier Quality Procedures, and (4) it is his
opinion that “Raw Molded Part Quality” was a factor in Prime’s “overall performance.” R. 1415 at 3.]
Defendant ITW has multiple complaints about the experts’ proposed testimony but they
do not attack either experts’ qualifications or expertise. First, Defendant argues that Mr. Hurley
and Mr. Bacon’s opinions are based on insufficient facts because they failed to consider relevant
information and only reviewed information given by Mr. Herbert-Jones (the sole owner of
Cameo). [See R. 138 at 11-12.] Similarly, Defendant complains that the experts’ testimony
would be inherently unreliable because Mr. Herbert-Jones provided the experts with “cherrypicked data and information.” [R. 138 at 12.] Defendant ITW also believes that the experts
failed to consider alternative explanations for quality problems and that this “myopic lens”
precluded consideration of painting-related quality issues. [R. 138 at 15.]
2
First, will the expert testimony be reliable? In determining whether the proposed
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testimony is reliable, the Court must assess the experts’ qualifications. Here, however, it does
not appear that the either of the Plaintiff experts’ qualifications are in dispute. According to Mr.
Hurley’s deposition, he has worked with injection molding since the 1970s. [R. 141 at 6.] Mr.
Hurley worked for many years at a molding and paint finishing company as the Finishing
Manager, he started two companies that either provided consulting for the plastics industry or
constructed plastics assembly machinery, and more recently he has performed product testing
and painting services. [Id. 6-7.] Similarly, Mr. Bacon worked in the plastics industry “since the
late 1970s.” [Id. at 10.] He was previously a Director of Quality at Dott Industries, Inc., a
plastics painting company, and now he is the General Manager/President of Plasti-Paint, a
company where he began working in 1990. Id.
The Court “must make a preliminary assessment of whether the testimony’s underlying
reasoning or methodology is scientifically valid and properly can be applied to the facts at issue.”
Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579, 580 (1993). Part of this preliminary
assessment requires the court to consider whether the testimony is based on sufficient facts or
data. See Fed. R. Evid. 702. ITW believes that both expert opinions lack a sufficient factual
basis. ITW suggests that Mr. Hurley only reviewed the documents Mr. Herbert-Jones provided
and every document supported Cameo’s position “as none referenced Prime’s painting defects
unless that same document contained apparent evidence of ITW’s molding defects.” [R. 138 at
11.] Mr. Hurley admits that he did not receive a complete set of analytical data regarding
painting defect to molding defect ratios. Id. ITW also argues that Mr. Bacon did not receive
“comprehensive data on percentage yields” and that his review was limited to six months of
Prime’s measurement of percentage yields. [Id. at 10.]
In determining what information to provide to his expert witnesses, Mr. Herbert-Jones
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personally reviewed 24,000 pages of materials in forty binders over four days to identify relevant
documents from ITW. [R. 141 at 5.] Documents were categorized based on content, with labels
such as “quality” for general quality issues that were further grouped as “PFQ” or “ITWQ” to
denote Prime Finish Quality or ITW Quality. Mr. Bacon, who will provide more expansive
testimony concerning Prime paint quality, was given 400 pages of materials from all documents
that were labeled with both the PFQ and ITWQ tags. [R. 141 at 15.] These documents range in
time from August 8, 2005, through August 1, 2008. [Id. at 6.] Mr. Hurley was only given one
hundred (100) ITWQ documents because the scope of his opinion is “much narrower” than Mr.
Bacon’s testimony and is limited to ITW mold defects. [R. 141 at 15.] The documents provided
to Mr. Hurley range from December 2006 to May 2008. [Id. at 10.]
Defendant suggests that, like Davison v. Cole Sewell Corp., 231 F. App’x 444, 449 (6th
Cir. 2007), Mr. Hurley and Mr. Bacon’s opinions lack a sufficient factual basis such that the
Court, in its role as gatekeeper, should sustain this motion and prevent the jury from even
considering what weight to give the expert’s testimony. [R. 138 at 9.] In Davison, the District
Court began its opinion by complaining that the record was scarce on facts. Davison, 231 F.
App’x at 447 (6th Cir. 2007). Richard Silverman, an engineer that was plaintiff’s expert witness,
prepared an expert report that attributed an accident that injured plaintiff to sixteen possible
causes. Id. at 448. In this case the Plaintiff was injured by an Ohio Home Depot store display
that struck Plaintiff in the head. Mr. Silverman’s investigation focused on unreliable and
attenuated evidence that was based on a picture of the display from the Ohio Home Depot where
the plaintiff was injured, trips made by the expert to a different Home Depot store in Boston,
Massachusetts, to view similar displays, testimony by plaintiff’s wife that a screw might have
been missing, and “internet research about screws.” Davison v. Cole Sewell Corp., 231 F. App'x
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444, 449 (6th Cir. 2007). Mr. Silverman’s opinions were appropriately found to be factually and
legally insufficient. Id.
Unlike the limited and unrepresentative information gathered by Mr. Silverman in
Davison, in the instant action Plaintiff’s experts have been provided with at least one hundred
and up to four hundred pages of materials detailing quality issues with ITW’s plastic molds and
Prime’s painted products. Mr. Hurley stated that “[a]ll the defects listed [in his expert report] are
what was [sic] in the emails by ITW and Prime Finish,” and “I have reviewed so many
documents related to molding-related defects that I came to the conclusion that it was impossible
for Prime Finish to provide quality product consistently.” [R. 141 at 8-9.]
Mr. Bacon’s expert opinion is based on a brief provided by Cameo and hundreds of pages
of exhibits. Due to volume, only the seven-page spreadsheet that lists the exhibits to be reviewed
(including “PAINTING YIELD REPORTS & GRAPHS”) and a limited number of documents
are included in the record. [R. 141 at 13.] There are chronological gaps in the documents and
email correspondence provided to the experts concerning the Product Supply Agreement vehicle
programs. [See R. 138-1 at 5, n. 1.] But, as explained by Cameo, these gaps logically exist
because communications concerning program details and product quality were only exchanged
between the parties when vehicle programs were actually being run on the paint line. Since the
paint line was not continually running, there are many chronological gaps. [See R. 141 at 11.]
The instant action is similar to United States v. L.E. Cooke Co., 991 F.2d 336, 342 (6th
Cir. 2007). The expert testimony does not “amount to mere guess or speculation” rather Mr.
Hurley and Mr. Bacon’s opinions “ha[ve] a reasonable factual basis” and “should not be
excluded.” United States v. L.E. Cooke Co., 991 F.2d 336, 342 (6th Cir. 1993). In these
instances, “it is up to opposing counsel to inquire into the expert’s factual basis.” Id. It is always
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possible for an expert witness to expend additional resources to form their opinion and draft an
expert report. But, eventually, the testimony should be admitted by the court and “any
weaknesses in the factual basis of an expert witness’ opinion . . . bear on the weight of the
evidence rather than its admissibility.” Id. Further, as illustrated by Daubert, “[v]igorous crossexamination, 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
v. Merrell Dow Pharm., Inc., 509 U.S. 579, 596 (1993) (referencing Rock v. Arkansas, 483 U.S.
44, 61 (1987).
Defendant alleges that the Plaintiff’s expert witnesses are providing unreliable expert
opinions because the data they are considering has been cherry-picked. [R. 138 at 12.] As
detailed above, Mr. Herbert-Jones attempted to perform a systematic review of 24,000 pages of
materials to provide his experts with relevant and useful data. Defendant accuses Mr. HerbertJones of only providing Mr. Bacon with data on percentage yields for six months of the three
year production period. [R. 138 at 13.] Cameo responds that this assertion “is false” and details
the multiple charts of data concerning program yields for January and February 2008, January
through December 2007, July through December 2006, and an additional report beginning
“11/1/06.” [See R. 141 at 12.] Similarly, with Mr. Hurley, ITW objects to his opinion because
the information he was provided by Mr. Herbert-Jones only relates to production from December
2006 to May 2008. [R. 138 at 13.] It is not the court’s role to “supplant the adversary system.”
Allison v. McGhan Medical Corp., 184 F.3d 1300, 1311 (11th Cir. 1999). The court is unable to
ascertain, specifically, how Mr. Hurley’s opinion has been formed on a “fundamentally skewed
basis,” [see R. 138 at 13] but, if ITW believes that Mr. Hurley and Mr. Bacon’s opinions are so
obviously skewed it should undertake “vigorous cross-examination” and “presentation of
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contrary evidence.” Daubert, 509 U.S. at 596.
3
Continuing with the Court’s inquiry into the reliability of Mr. Bacon and Mr. Hurley’s
testimony, ITW argues that neither expert “considered alternative, painting-related explanations
for the quality problems.” [R. 138 at 15.] Cameo provided Mr. Bacon with all documents that
were classified as responsive to Prime Finish Quality “PFQ” and ITW Quality “ITWQ.” [R. 141
at 15.] Mr. Hurley was only provided documents labeled “ITWQ” because Mr. Hurley’s
testimony is limited to the quality issues with ITW plastic molds and mold defects. Id.
Defendant ITW contests that, the “reason for this one-sided view [by Plaintiff’s Experts] is
obvious: they only looked at the information Mr. Herbert-Jones chose to give them.” [R. 138 at
15.]
It is true that Mr. Herbert-Jones was the only source to provide documents for Mr. Hurley
and Mr. Bacon to review, this is standard practice just as ITW has given documents to its own
expert witness, Mr. Lewachirk. While being deposed, Mr. Bacon stated that he had reviewed
“correspondence and issues for . . . a mold-related issue, paint related, okay light or blush or
runs…” [R. 141 at 18.] Mr. Bacon admitted there were issues with Prime’s painting quality at
times, that Prime had missed shipment deadlines, and that his review showed the 180L armrest
had “a paint-related issue.” [Id. at 19.] Similarly, Mr. Hurley also considered alternative reasons
for problems with quality as he noted there were paint issues but “that a lot of those listed as
paint defects were actually underlying mold-related defects.” [R. 141 at 20; see e.g. R. 141-8 at
9, (Mr. Hurley discussing “warped parts” and stating that “[i]t’s possible” when asked if this
could have been a “Prime Finish issue”); id. (Mr. Hurley testifying that contamination “could be
a paint defect or it could be a molded-related defect” and later confirming that “contamination,”
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“dry spray,” and “scratches” could all have been painter issues.)]
Upon review, the opinions of Mr. Bacon and Mr. Hurley are sufficiently reliable. As the
experts conducted their analysis of the documents that were provided to them, they underwent a
logical process that considered alternative explanations, admitted fault with some of ITW’s
painted products, but both experts ultimately concluded that mold defects were a substantial
factor that significantly affected paint quality. Defendant’s recourse is to present contrary
evidence as to these conclusions and conduct cross examination in a manner that leads jurors to
question the weight that should be given Mr. Bacon and Mr. Hurley’s opinions. See Fed. R.
Evid. 611(b) (explaining that matters of a witness’s credibility may be addressed through crossexamination); see also Jahn v. Equine Servs., PSC, 233 F.3d 382, 390 (6th Cir. 2000) (finding
that an expert testifying as to causation need not eliminate all other possible causes and “[t]he
fact that several possible causes might remain ‘uneliminated’ ... only goes to the accuracy of the
conclusion, not to the soundness of the methodology.”)
C
Next, if reliable, is the testimony helpful or relevant? To be relevant, the testimony must
help the jury understand the evidence or determine a fact at issue. Daubert, 509 U.S. at 591;
United States v. Smithers, 212 F.3d 306, 313 (6th Cir. 2000) (district courts “must ensure that the
proposed expert testimony is relevant to the task at hand and will serve to aid the trier of fact.”)
The Supreme Court in Daubert referred to this prong as the “fit” requirement. See Smithers, 212
F.3d at 313; Daubert, 509 U.S. at 591-93. Apart from Defendant’s initial argument, ITW
maintains that Mr. Hurley and Mr. Bacon’s opinions are inadmissible, pursuant to Rule 702,
because “it will be unhelpful for the jury to hear an expert summarize a limited subset of
available evidence . . . the jury is fully capable of reviewing and understanding.” [R. 138-1 at
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15-16.] With these assertions, ITW grossly mischaracterizes the expert’s analysis, going so far
as to suggest that Mr. Hurley’s “simplistic approach[]” and “methodology consists of creating a
summary of bullet notes that highlights specific issues.” [R. 138 at 16.] Even the most cursory
review of the record shows that the Defendant’s characterization of the Mr. Hurley’s
methodology is highly inaccurate. 2
It is clear from the briefing, depositions in the record, and submitted evidence, that the
fact-finder must determine whether breach of the Product Supply Agreement occurred. This
finding will undoubtedly require expert testimony as to the quality of the painted products,
plastic molds, and the impact of defects on this highly technical process. The Product Supply
Agreement allows for early termination of the agreement if “Seller [Prime] fails to meet the
Quality Standard defined by the Boundary Limits agreed between the parties” but neither
“quality standard” nor “boundary limits” are defined. [R. 130-3 at 3.] The Exhibit B “Penalty
for Early Termination of Contract” allows for ITW to escape payment of the penalty if there is a
“serious, continuing quality or Delivery issue.” [Id. at 4.] These terms were “subjective,” “everchanging,” and require the fact-finder to answer “complex and highly technical” questions. [R.
141 at 22.]
As experts, Mr. Hurley and Mr. Bacon will shed valuable light on this complicated
industrial plastic painting process that is certainly unfamiliar to the average juror or layperson. 3
2
The deposition testimony clearly demonstrates that Mr. Hurley’s methodology does not
culminate in a list of simplistic bullet points. See R. 141-8 at 5 (“Q: What was your purpose in
preparing these summary notes? A. The way I review documents is I review them several times.
I do research. I do evaluation. I do analysis, and then I create a summary of bullet notes that
highlights specific issues that needed to be addressed or related [sic] my final report.”
3
Mr. Hurley and Mr. Bacon have prepared reports that address multiple complex and
technical issues. Defendant can present contrary evidence and cross examine these witnesses. It
is difficult for this Court to believe that jurors of ordinary experience and knowledge would have
understanding of or familiarity with industrial plastic painting terms or concepts such as: Q1
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Consequently, this testimony is relevant, and helpful to the trier of fact. Under Rule 702,
Daubert, and subsequent case law, “rejection of expert testimony is the exception, rather than the
rule.” Fed. R. Evid. 702, advisory committee’s note, 2000 amend.; see also In re Scrap Metal
Antitrust Litigation, 527 F.3d 517, 530 (6th Cir. 2008). The Plaintiff’s experts are qualified, the
testimony is sufficiently reliable, and the evidence is relevant and helpful to the trier of fact. See
Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579 (1993); United States v. Jones, 107 F.3d
1147, 1156 (6th Cir. 1997); Fed. R. Evid. 702.
III
Accordingly, and the Court being otherwise sufficiently advised, it is hereby ORDERED
that the Defendant’s Motion to Exclude Mr. Bacon and Mr. Hurley Under Federal Rule of
Evidence 702 [R. 138] is DENIED.
This the 5th day of May, 2017.
targets, acceptable yields, acceptable fallouts, the efficacy of visual inspections, the degree of
gloss of paint, how the flame process reduces blush, gate blush, warp parts, hairline flash, sink,
warped parts, off-color bronze, or surface blemish. See R. 141 at 21-22.
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