Gray et al v. FedEx Ground Package System, Inc.
MEMORANDUM AND ORDER: IT IS HEREBY ORDERED that Defendant FedEx Ground Package System, Inc.'s Motions to Exclude Testimony of Douglas Miller Wells 134 ; Gray 225 and to Strike Supplemental Reports of Expert Testimony of Douglas Miller Wells 140 ; Gray 261 are DENIED. Signed by District Judge John A. Ross on 9/27/13. (ARL)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
DAVID WELLS, et al.,
FEDEX GROUND PACKAGE
REGINALD GRAY, et al.,
FEDEX GROUND PACKAGE
MEMORANDUM AND ORDER
This matter is before the Court on Defendant FedEx Ground Package System, Inc.’s
Motions to Exclude Testimony of Douglas Miller [Wells ECF No. 134; Gray ECF No. 225] and
to Strike Supplemental Reports of Expert Testimony of Douglas Miller. [Wells ECF No. 140;
Gray ECF No. 261] The Motions are fully briefed and ready for disposition.1 For the following
The parties have extensively briefed the motions and submitted an evidentiary record
which includes Miller’s expert reports and deposition testimony. Accordingly, the Court has
determined that it can make a proper Daubert analysis without the need for additional argument.
(Doc. No. 195)
reasons, the Court will deny the motions.
Plaintiffs are former drivers/contractors with Defendant FedEx Ground Package System,
Inc. (“FedEx”). Each Plaintiff executed a “Pickup and Delivery Contractor Operating
Agreement” with FedEx Ground which Plaintiffs allege misclassified them as independent
contractors when they were in fact employees of FedEx. Plaintiffs have retained Douglas C.
Miller, CPA, to assess the amount of compensation, including benefits, that each Plaintiff would
have received had they been classified and compensated as employees of FedEx. Mr. Miller has
provided a damages report for each of the 41 Plaintiffs (Wells Doc. No. 136; Gray Doc. No. 227,
Exs. 1-41 to Cochenour Decl.),2 as well as supplemental reports based on payment and job
description information obtained from FedEx’s sister companies, FedEx Freight Corporation
(“FedEx Freight”) and FedEx Express Corporation (“FedEx Express”). FedEx has moved to
exclude Mr. Miller’s testimony and strike his supplemental reports.
Miller’s original report3
In his original reports, Miller’s hourly wage comparison was calculated by researching
Because Miller’s original reports for the Gray and Wells Plaintiffs all use the same
methodology, the parties have addressed two sample reports in their briefing - one for Gray
Plaintiff Robert Arbutti (Wells Doc. No. 136-1; Gray Doc. No. 227-1) and one for Wells Plaintiff
Alan Dees (Wells Doc. No. 136-29; Gray Doc. No. 227-29).
Miller relied on the following documents in making his damages assessment: Plaintiffs’
Amended Complaint in Wells and Sixth Amended Complaint in Gray, FedEx’s Answer,
Plaintiffs’ First and Second Interrogatories and FedEx’s Responses, FedEx’s Interrogatories and
Plaintiffs’ Responses, Plaintiffs’ tax returns, weekly Contract Settlement Statements,
Supplemental Settlement Reports, P&D Contractor Business Results, FedEx’s Employee
Benefits plans from 2004-2012, FedEx’s employee pension plan, FedEx’s employee retirement
benefits, and pay schedules information for FedEx’s sister entity FedEx Freight.
internet sites, including GlassDoor.com and CareerBliss.com, for salaries and wages of FedEx
Freight drivers. (Wells Doc. Nos. 136-1, 136-29, p. 2; Gray Doc. Nos. 227-1, 227-29, p. 2)
Because the responsibilities and job descriptions for a FedEx Freight driver was “virtually the
same,” and “almost identical,” to the job description for a FedEx Ground driver, Miller used the
wages reported for FedEx Freight drivers as a basis for determining hourly wages for Plaintiffs
as FedEx Ground drivers, and estimated an hourly wage of $22 per hour for each Plaintiff. (Id.)
To calculate overtime, Miller used Pickup and Delivery Supplemental Settlement Reports
(“DSRs”), together with Plaintiffs’ Responses to FedEx’s First Interrogatories Directed to
Plaintiffs, to determine the amount of hours each Plaintiff worked per week. (Id.) No overtime
was allotted to work weeks with a holiday or workweeks that the weekly contract settlement
statement showed less than five days of work. (Id.) If only one DSR was missing for the week, a
conservative estimate of eight hours for the day was inserted into Miller’s calculation. (Id.)
Additionally, the amount of time driven by any driver other than a named Plaintiff was excluded
when calculating overtime hours. (Id.) Based on this information, Miller calculated overtime at a
rate of $33 per hour, based on the hourly pay rate of $22 per hour at time and a half. Mo. Rev.
Stat. § 290.505(1). (Id.)
Miller calculated holiday and vacation pay based on the six holidays recognized by
FedEx and its related subsidiaries. (Id.) Because the FedEx Careers website listed “paid time off”
as one of the benefits of employment listed, Miller determined that Plaintiffs would have
received ten paid vacation days if they had properly been classified as employees of FedEx. (Id.)
From this, Miller accounted for sixteen (16) days of vacation and holiday pay for each Plaintiff,
or a pro rata portion of the year if a Plaintiff did not drive for FedEx for the whole year. (Id., pp.
2-3) Miller did not include the eight hours of each holiday in his overtime analysis. (Id., p. 3).
Miller reviewed each Plaintiff’s tax returns to determine which expenses would have
been paid by FedEx, had FedEx properly classified Plaintiffs as employees, including fuel, auto
and truck expenses, interest on a loan for a truck, FICA taxes, property taxes, licenses, permits,
vehicle depreciation, and repairs and maintenance. (Id.) To determine the amount of expenses
actually related to each Plaintiff, the total number of hours worked by the Plaintiff was added to
the total number of hours that other drivers drove for the Plaintiff, and then divided by the total
number of hours. (Id.) The resulting percentage was multiplied by fuel costs and the repairs and
maintenance expenses listed on the Plaintiff’s tax returns. (Id.)
Plaintiffs’ Weekly Contract Settlement Statements (“WSSs”) were reviewed for
adjustments to the total gross income and deductions from the total gross income. (Id.) The main
adjustments and deductions added into the damages calculation included the Business Support
Package. These amounts were pro-rated to account for any time substitute drivers drove for each
With regard to retirement benefits, FedEx employees are eligible to participate in the
company’s pension plan or portable pension plan and 401(k) plan. FedEx’s annual contribution
to the pension plan for each of its employees is actuarially determined based upon that
employee’s age and annual earnings. Given the complexity of the actuarial formula, Miller
acknowledged the difficulty of calculating with certainty the hypothetical contributed benefit for
a particular Plaintiff. (Id.) FedEx matches the employee’s deferred wages to a certain percentage
of income the employee defers into his 401(k) account. (Id.) Over the last ten years, FedEx’s
company match formula has ranged from a maximum of 7% of the employee’s wages to 50% of
the first 1% of deferred wages plus 25% of the next 5% of deferred wages. (Id.) Based on this
information, Miller estimated a yearly retirement contribution for the pension plan and 401(k)
match at $1,000 per year for each Plaintiff. (Id.)
Miller based medical, disability and life insurance benefits on industry averages, and
added them to the damages calculation. (Id., p. 4) Finally, he applied Missouri statutory
prejudgment interest amount at 3.25%, compounded annually. (Id.)
Miller’s supplemental reports
Based on documents received from FedEx’s sister entities, FedEx Freight and FedEx Express
Corporation (“FedEx Express”), containing Driving Codes and Job Titles, Job Descriptions of
FedEx Express employees, Merit Hourly Pay Schedules from 1999-2010, and information on the
employee benefits and retirement program for FedEx Express employees, Miller supplemented
his original reports for both the Wells and Gray Plaintiffs on November 8, 2012. (Wells Doc.
Nos. 142-1, 142-2; Gray Doc. Nos. 263-1, 263-2) Miller concluded that the job duties of FedEx
Freight city drivers are “nearly identical” to those of the FedEx Ground drivers and that the
duties of FedEx Express couriers are also “very similar” to those of the FedEx Ground drivers.
(Id., p. 1) Miller reviewed the pay schedules for FedEx Express employees, together with the
FedEx Express website and the job descriptions therein, and used Pay Code 8K-Courier, because
in his opinion, it fit most closely with that of a FedEx Ground delivery driver. (Id., p. 2) Because
he was not provided with information regarding the differences between the Personnel Records
and Information System (PRISM) codes on each schedule, Miller used an average of all of the
codes for each year. In his Supplemental Analysis 1 for the Wells Plaintiffs, he arrived at an
average hourly wage rate for all PRISM codes for FedEx Express delivery drivers of $22.48; for
the Gray Plaintiffs, Miller arrived at an average hourly wage rate of $21.21. (Wells Doc. No.
142-1; Gray Doc. No. 263-1, pp,. 1-2)
In his Supplemental Analysis 2, Miller reviewed the FedEx Freight pay schedules for
entry level to three years. (Id., p. 2). He used the pay schedule associated with FedEx Freight city
drivers in Missouri, Geographical Pay Differential (GPD) code B, and prepared a weightedaverage hourly rate using Plaintiffs’ actual experience driving for FedEx. (Id.) He prepared this
weighted-average on the assumption that all drivers start at entry-level pay, no matter what prior
driving experience they might have. (Id.)
To further clarify his Supplemental Report for the Wells Plaintiffs, Mr. Miller explained
it was based on documents produced by FedEx Freight for the year 2004. In 2004, the pay levels
for GPD code B for FedEx Freight were as follows: (a) entry-level: $16.70 per hour, (b) one year
of experience: $17.69 per hour, (c) two years of experience: $18.67 per hour; and (d) three years
of experience: $19.65 per hour. (Id.) For additional experience above three years, Mr. Miller
based future pay increases on the United States Security Administration’s annual Cost of Living
Adjustment (“COLA”), starting with the year 2000. (Id., pp. 2-5) In 2004, two Plaintiffs were
entry level drivers, three had one year of experience, one had two years of experience, one had
three years of experience, and seven Plaintiffs had four years experience. (Id.) Mr. Miller then
multiplied the number of drivers at each level of experience with the hourly wage rate for that
level of experience. The totals were summed and divided by the total number of drivers that
worked during the year, based on information contained in Miller’s original report. (Id.) As a
result, in his Supplemental Analysis 2, Miller determined that the average hourly rate for the
years 2004 through 2010 was $21.85. (Id., p. 3) Miller re-confirmed the reasonableness of his
original reports for the Wells Plaintiffs, including the $22 per hour wage used to calculate the
damages for the Wells Plaintiffs. (Id.)
To further clarify his Supplemental Report for the Gray Plaintiffs, Miller explained it was
based on documents for the year 2000. (Wells Doc. No. 142-2; Gray Doc. No. 263-2, pp. 2-5) In
2000, the pay levels for FedEx Freight City Drivers in Missouri were as follows: (a) Entry-level:
$14.66 per hour, (b) One year of experience: $15.53 per hour, (c) Two years of experience:
$16.39 per hour; and (d) Three years of experience: $17.25 per hour. (Id.) For additional
experience above three years, Miller based future pay increases on the United States Security
Administration’s annual COLA. (Id.) In 2000, three Plaintiffs were entry-level drivers, and
Miller multiplied the number of drivers at each level of experience with the hourly wage rate for
that level of experience. (Id.) The totals were summed and divided by the total number of drivers
that worked during the year, based on Miller’s original damage reports. (Id.) As a result, the
supplemental report for the Gray Plaintiffs shows that the average hourly wage rate for the years
2000 through 2009 was $18.98. (Id.) Miller amended his original Reports downward to use an
average hourly wage rate of $20.10 per hour for each of the Gray Plaintiffs. (Id.)
Federal Rule of Evidence 702 governs the admissibility of expert testimony. Harrington
v. Sunbeam Products, Inc., 2009 WL 701994, *1 (E.D.Mo., March 13, 2009) (citing Lauzon v.
Senco Prods., Inc., 270 F.3d 681, 686 (8th Cir.2001)). Rule 702 provides that an expert may
testify if the testimony is based on sufficient facts or data; the testimony is the product of reliable
principles and methods; and the witness has applied the principles and methods reliably to the
facts of the case. US Salt, Inc. v. Broken Arrow, Inc., 563 F.3d 687, 691 (8th Cir. 2009).
Pursuant to this rule, a district court acts as a gatekeeper “to ensure that an expert’s testimony
both rests on a reliable foundation and is relevant to the task at hand.” Russell v. Whirlpool
Corp., 702 F.3d 450, 456 (8th Cir. 2012) (quotation omitted). Further, a court is entitled to
substantial discretion in determining whether expert testimony should be allowed. Id. “There is
no single requirement for admissibility as long as the proffer indicates that the expert evidence is
reliable and relevant.” Id. at 456-57 (quotation omitted). When evaluating the sufficiency of
expert testimony, “the factual basis of an expert opinion goes to the credibility of the testimony,
not the admissibility, and it is up to the opposing party to examine the factual basis for the
opinion in cross-examination. Only if the expert’s opinion is so fundamentally unsupported that
it can offer no assistance to the jury must such testimony be excluded.” Minn. Supply Co. v.
Raymond Corp., 472 F.3d 524, 544 (8th Cir. 2006) (quotation omitted). “Rule 702 reflects an
attempt to liberalize the rules governing the admission of expert testimony.” Weisgram v. Marley
Co., 169 F.3d 514, 523 (8th Cir.1999), aff'd, 528 U.S. 440 (2000). The Rule “favors admissibility
if the testimony will assist the trier of fact.” Clark v. Heidrick, 150 F.3d 912, 915 (8th Cir.1998).
Doubt regarding “whether an expert's testimony will be useful should generally be resolved in
favor of admissibility.” Id. (citation and internal quotation omitted).
A. Motions to exclude Miller’s testimony
FedEx seeks to exclude Miller’s testimony on four grounds. First, he is not qualified to
give his opinions because he has no expertise in the small package pickup and delivery industry,
or in the area of employee compensation and benefits. (Wells Doc. No. 135; Gray Doc. No. 226,
pp. 6-9) Second, Miller’s methodology is unaccepted and unreliable. (Id., pp. 9-11) Third,
Miller’s opinions are, to a large extent, based on speculation and unfounded assumptions (Id.,
pp. 12-21), and fourth, his opinions do not “fit” Plaintiffs’ claims. In other words, Miller’s
damages theory does not relate to any legally cognizable harm Plaintiffs allege they suffered.
(Id., pp. 21-23)
FedEx does not directly challenge Miller’s expert qualifications in accounting.4 Miller
holds degrees in accounting, business administration and law. He has significant accounting
experience and has been retained to provide expert witness opinions on several occasions
regarding various business valuation matters. Rather, it is FedEx’s position that to qualify as an
expert in this case, Miller needs to have knowledge of the small package pickup and delivery
industry in which FedEx operates, as well as employee compensation and benefits. (Id., pp. 6-8 )
The Court is satisfied that Mr. Miller is qualified to testify regarding Plaintiffs’ damages
in this case based on his education, training, and knowledge as a certified public accountant for
over thirty years and experience in the fields of accounting and business valuation. The fact that
he has not had experience in the field of small package pickup and delivery industry does not
persuade the Court otherwise. See, e.g., Craftsman Limousine, Inc. v. Ford Motor Company,
As described by Plaintiffs, Mr. Miller is a certified public accountant who has been a
principal and the managing partner of the accounting firm of Miller, Haviland and Ketter PC, PA
for nearly 30 years. (Curricululm Vitae for Douglas C. Miller, CPA-ABV, Doc. No. 136-1) He
received his Bachelor of Science in Business Administration in 1971, his Juris Doctor in 1973,
and his CPA Certificate for the states of Kansas and Missouri in 1976. Mr. Miller has been
accredited in business valuation, is a member of the American Institute of Certified Public
Accountants and the Institute of Business Appraisers, and is the chairman of the Heart of
America Tax Institute. Throughout his 38-year career as a certified public accountant, Mr. Miller
has represented numerous organizations, consisting of, but not limited to, clients with industry
specializations in real estate, transportation, hospitality, retail, and insurance. Additionally,
throughout his career Mr. Miller and the other principals of his accounting firm have been
retained to provide expert witness opinions on several occasions regarding various business
2002 WL 34448786, at *1 (W.D. Mo. Aug. 28, 2002) (“Mr. Cole has been retained to testify
regarding lost profits to a company, alleged to be caused by defendants’ actions. The Court does
not believe his being qualified to do so is contingent on expertise in the field, if it exists, of antitrust economics. Accordingly, the Court finds that Mr. Cole is qualified to testify as an expert in
this case.”); Loeffel Steel Products, Inc. v. Delta Brands, Inc., 387 F.Supp.2d 794, 801-02
(N.D.Ill. 2005) (rejecting argument that in order to qualify as a damages expert, business
appraiser must have specific experience with the specific industry and type of machine at issue);
and Baisden v. I’m Ready Productions, Inc., 2010 WL 1855963, at *5 (S.D.Tex. May 7, 2010)
(finding expert qualified despite having “limited experience in the valuation of feature films”
because he “possesse[d] a significant amount of experience generally in . . . damage assessment
related to intellectual property infringement.”) Miller’s relative experience in the matter at issue
may be explored on cross-examination. Semi-Materials Co., Ltd. v. MEMC Electronic Materials,
Inc., 2011 WL 134078, at *5 (E.D.Mo. Jan. 10, 2011) (citing Allen v. Brown Clinic, P.L.L.P.,
531 F.3d 568, 574 (8th Cir.2008)). “Gaps in an expert witness's qualifications or knowledge
generally go to the weight of the witness's testimony, not its admissibility.” Robinson v. GEICO
Gen. Ins. Co., 447 F.3d 1096, 1100–01 (8th Cir.2006) (internal quotation marks and citation
omitted). See also Lauria v. Nat'l R.R. Passenger Corp., 145 F.3d 593, 598 (3d Cir.1998)
(holding trial court abused its discretion by excluding testimony simply because the trial court
did not deem proposed expert to be the best qualified or because proposed expert did not have
the specialization that the trial court considered most appropriate).
FedEx further argues that Miller’s testimony should be excluded because he is not
expressing his own opinions. Rather, he consulted with an insurance benefits industry expert, J.
Duncan McInnis, and did not reference McInnis in his report. (Wells Doc. No. 135; Gray Doc.
No. 226, p. 8) Miller admits he contacted McInnis for an evaluation of FedEx employee benefits
against a similar industry, but did not solely rely on McInnis’ opinions in calculating the hourly
wage analysis in this case. (Miller Depo., 34:6-11) (Wells Doc. No. 150; Gray Doc. No. 271, pp.
Rule 703 permits an expert to rely on facts and data that an expert in the particular field
would reasonably rely upon, including the opinion of another expert. See, Sosna v. Binnington,
321 F.3d 742, 746 (8th Cir.2003) (citing Arkwright Mut. Ins. Co. v. Gwinner Oil, Inc., 125 F.3d
1176, 1182 (8th Cir.1997)). It “is common in technical fields for an expert to base an opinion in
part on what a different expert believes on the basis of expert knowledge not possessed by the
first expert.” In re Genetically Modified Rice Litigation, 666, F.Supp.2d 1004, 1033 (E.D.Mo.
2009) (quoting Dura Auto. Sys. of Ind., Inc. v. CTS Corp., 285 F.3d 609, 613 (7th Cir.2002)).
When determining whether to allow expert testimony, courts consider whether the proffered
expert has the ability to evaluate the opinions on which he relies. Minn. Supply Co. v. Raymond
Corp., 472 F.3d 524, 544 (8th Cir. 2006) (citing Children’s Broad. Corp. v. Walt Disney Co.,
357 F.3d 860, 864 (8th Cir. 2004). Miller testified he has the expertise to know the benefits
provided to FedEx employees, as well as the knowledge that FedEx’s employee benefits were
common in the trucking industry. (Miller Depo. 34:17-35:4)
FedEx’s complaints actually relate to the factual basis of Miller’s testimony. As a general
rule, the factual basis of an expert opinion goes to the credibility of the testimony, not the
admissibility, and it is up to the opposing party to examine the factual basis for the opinion in
cross-examination. Only if the expert's opinion is so fundamentally unsupported that it can offer
no assistance to the jury must such testimony be excluded. Bonner v. ISP Tech., Inc., 259 F.3d
924, 929–30 (8th Cir.2001). Accordingly, questions of conflicting evidence are left up to the jury,
and a trial court should resolve doubts regarding an expert's testimony “in favor of admissibility.”
Marmo v. Tyson Fresh Meats, Inc., 457 F.3d 748, 758 (8th Cir. 2006). “Vigorous 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.” Kudabeck v.
Kroger Co., 338 F.3d 856, 862 (8th Cir.2003) (citing Daubert v. Merrel Dow Pharmaceuticals,
Inc., 509 U.S. 579, 596 (1993)).
Next, FedEx challenges the reliability of Miller’s methodology for calculating damages,
arguing that Miller’s reliance on a Massachusetts case, Somers v. Converged Access, Inc., 911
N.E.2d 739 (Mass. 2009), is misplaced. In Somers, the court held that an employee who has been
misclassified as an independent contractor is entitled to damages under the Massachusetts wage
statute, Mass. Gen. Laws ch. 149 §§ 148, 148B and 150. (Doc. No. 135, p. 11) FedEx maintains
that a Somers-based methodology is not generally accepted. Moreover, in Somers the court was
analyzing rights under two Massachusetts statutes, which have no bearing on Plaintiff’s Missouri
state law claims. (Id.)
In response, Plaintiffs state there is no guidance under Missouri law, state or federal, or
Eighth Circuit law, that instructs on how damages should be calculated when employees have
been improperly classified as independent contractors and that Somers is the only case to address
the issue. (Wells Doc. No. 150; Gray Doc. No. 271, pp. 18-19) In Somers, the court held that
“[a]n employee misclassified as an independent contractor, as a matter of law, is an employee; his
contract rate is his wage rate; and his ‘damages incurred’ equal the value of wages and benefits he
should have received as an employee, but did not,” including holiday pay, vacation pay, and
overtime. 911 N.E.2d at 744, 751.
FedEx also contends that Miller’s opinions are based on speculation and unfounded
assumptions. In particular, Miller assumes Plaintiffs would have been paid the same hourly rate as
employee-drivers working at FedEx Freight, Inc., despite the fact that Freight has a different
business model than FedEx. Miller assumes Plaintiffs would be paid an hourly rate of $22 per
hour, based on information about Freight employee-driver hourly rates from unverified websites
that Miller did not personally review. Miller makes assumptions about the number of hours
Plaintiffs “worked” based on data that does not indicate when Plaintiffs were actually working,
and extrapolates annual hours from small samples of data that may not be representative. Finally,
Miller assumes if Plaintiffs had been employees they would have received numerous benefits
from FedEx, even though not all FedEx employees receive such benefits, and there are no FedEx
employees with jobs comparable to Plaintiffs.
The Court has carefully reviewed Miller’s opinions, as well as the evidence and
information upon which his opinions are based, and cannot conclude that his testimony is so
fundamentally unsupported it could offer no assistance to the jury. FedEx will have the
opportunity to challenge Miller’s assumptions and methodology through cross-examination and
contrary evidence. Such opportunity for “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 Synergetics, Inc. v.
Hurst, 477 F.3d 949, 955–56 (8th Cir.2007); EFCO Corp. v.. Symons Corp., 219 F.3d 734, 739
(8th Cir.2000) (no abuse of discretion in allowing plaintiff's expert witness to testify as to
damages where defendant's expert, who disputed plaintiff's expert's methodology, also testified;
jury left with ultimate decision as to which damages theory was more sound).
Finally, FedEx argues Miller’s testimony should be excluded because his damages theory
is inconsistent with the “benefit of the bargain” approach required under Missouri law for claims
of fraud. (Wells Doc. No. 135; Gray Doc. No. 226, pp. 21-23) The Court rejected this argument in
its order denying FedEx’s motion for summary judgment on Plaintiffs’ fraudulent
misrepresentation claims. Although the primary measure of damages for fraud in Missouri is the
benefit of the bargain, the use of other measures of damages are permitted when the benefit of the
bargain rule does not accurately measure the loss sustained. Glass Design Imports, Inc. v. Import
Specialties, 867 F.2d 1139, 1143 (8th Cir. 1989) (citing Central Microfilm, 688 F.2d at 1220);
Kerr v. First Commodity Corp., 735 F.2d 281, 285 (8th Cir. 1984)).The “bargain theory” measure
is the difference between the actual value and the represented value of the subject of the
transaction. Central Microfilm, 688 F.2d at 1220 (citing Smith v. Tracy, 372 S.W.2d 925, 938
(Mo. 1963)). In this case, FedEx did not make representations as to specific values; rather, it
induced Plaintiffs to work as employees without the benefits inherent in an employer/employee
relationship. Thus, the resultant harm is best measured by what Plaintiffs would have been paid
had they been employees, as opposed to what they were actually paid while classified as
independent contractors. Central Microfilm, 688 F.2d at 1220-21.
Accordingly, FedEx’s motion to exclude Miller’s testimony will be denied.
B. Motions to strike Miller’s supplemental reports
FedEx moves to strike Miller’s supplemental reports on the grounds that they are not
permissible supplemental disclosures under Fed. R. Civ. P. 26(e). In these reports, FedEx
contends Miller offers three completely new opinions: (1) that the duties of “FedEx Express
couriers” are “very similar” to those of FedEx pick up and delivery drivers; (2) that the job
description of a “Pay Code 8K– Courier” employee at Express, “fits most closely with that of a
FedEx Ground delivery driver”; and (3) that FedEx contractors are most like Freight “City
Drivers” paid under “Geographical Pay Differential (GDP) code B.” (Wells Doc. No. 141; Gray
Doc. No. 262, pp. 4-5) Additionally, Miller provides two new bases—which he terms
“Supplemental Analysis 1” and “Supplemental Analysis 2”—to bolster his opinion regarding the
hypothetical wage rate at the center of his damages opinion for each Plaintiff. (Id. at 5)
FedEx further argues that because Plaintiffs cannot demonstrate these untimely
disclosures are substantially justified or harmless under Fed. R. Civ. P. 37(c), Miller should be
precluded from offering the testimony contained in the “supplemental” reports. (Wells Doc. No.
141; Gray Doc. No. 262, pp. 9-11) Alternatively, FedEx requests an opportunity to take another
deposition of Mr. Miller and disclose its own damages expert. (Wells Doc. No. 201; Gray Doc.
No. 323, p. 5)
Plaintiffs respond that Miller’s reports cannot be considered “new” because he was merely
updating his reports based on information he received after submitting his original reports; there
is no new theory or methodology implemented in his damages analysis. (Wells Doc. No. 193;
Gray Doc. No. 315, p. 1) To the extent FedEx claims Plaintiffs’ supplemental reports are
untimely, Plaintiffs note they repeatedly requested this information from FedEx, within the proper
dates set forth in the Court’s case management order, and served two subpoenas duces tecum on
FedEx’s sister companies, as well as a motion to compel on FedEx, in order to obtain it. (Id., p. 2)
Because FedEx was aware for months that Plaintiffs were seeking additional relevant information
pertinent to Miller’s damages analysis, Plaintiffs contend that FedEx cannot show prejudice such
that the supplemental reports should be excluded. (Id.)
Fed.R.Civ.P. 26 governs the disclosure of expert testimony. Rule 26 provides in relevant
part that a party must disclose any person whom it plans to use at trial to present expert evidence.
Fed. R. Civ. P. 26(a)(2)(A). The expert must submit a report that contains “a complete statement
of all opinions to be expressed and the basis and reasons therefor.” Fed. R. Civ. P. 26(a)(2)(B).
Under Fed. R. Civ. P. 26 (e)(1), parties have a duty to supplement expert reports to include
information later acquired if the disclosure is incomplete or incorrect.
The Court recognizes that Miller’s supplemental disclosures were made over a month
beyond the October 1, 2012 deadline set by the Court for Plaintiffs’ expert witness disclosures.
As such, a truly new expert opinion would be untimely and subject to exclusion. The key is
whether Miller’s supplemental reports are in fact “supplements” as envisioned by the Federal
Rules of Civil Procedure. Rule 26(e) allows supplemental expert opinions for the purpose of
“adding information that was not available at the time of the initial report.” American Builders &
Contractors Supply Co., Inc. v. Roofers Mart, Inc., 2012 WL 2119084, 1 (E.D.Mo. June 11, 2012)
(quoting Sancom, Inc. v. Qwest Communications Corp., 683 F.Supp.2d 1043, 1063 (D.S.D.
2010)). Here, Miller’s reports are based on discovery Plaintiffs received regarding Express and
Freight drivers that was not previously available to them due, in part, to FedEx’s actions. On
October 1, 2012, the disclosure deadline, this Court ordered FedEx to produce information
relating to the compensation, benefits and job descriptions for persons who have driven trucks for
FedEx Freight, Inc., no later than October 11, 2012. (Wells Doc. No. 99) According to Plaintiffs,
FedEx Freight provided them with additional information on October 29, 2012. The supplemental
reports were then prepared and submitted on November 8, 2012. Under these circumstances, the
Court finds the supplemental reports are not untimely.
The Court further finds there is no prejudice to FedEx because Miller has not changed his
methodology or his calculations; the reports did not result in an increase of damages or set forth
some other different theory of damages. In fact, with respect to the Gray Plaintiffs, Miller
adjusted the hourly wage rate downward to $20.10. The general rule that experts may not testify
on opinions not disclosed during the scheduled expert discovery period is usually relaxed to allow
damages calculations to be updated through the time of trial. In re Genetically Modified Rice
Litigation, 2009 WL 3336086, at *1 (E.D.Mo. Oct. 6, 2009).
Finally, these cases have not yet been re-set for trial. If FedEx wishes to reopen the
deposition of Mr. Miller to examine him regarding his supplemental reports, then Plaintiffs will
be directed to make him available for such an examination. The Court will also allow FedEx a
reasonable period of time in which to disclose its own expert on damages. FedEx’s motion to
strike the supplemental reports of Mr. Miller will be denied.
IT IS HEREBY ORDERED that Defendant FedEx Ground Package System, Inc.’s
Motions to Exclude Testimony of Douglas Miller [Wells 134; Gray 225] and to Strike
Supplemental Reports of Expert Testimony of Douglas Miller [Wells 140; Gray 261] are
Dated this 27th day of September, 2013.
JOHN A. ROSS
UNITED STATES DISTRICT JUDGE
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