Winfield Grain, Inc v. Marquette Transportation Co., LLC

Filing 60

MEMORANDUM AND ORDER - IT IS HEREBY ORDERED that Defendants Motion for Partial Summary Judgment (Doc. No. 34 ) is DENIED. IT IS FURTHER ORDERED that Defendants Motion to Strike Exhibits A, B, C, D, and H to Plaintiffs Opposition to Summary Judgment (Doc. No. 47 ) is DENIED. IT IS FINALLY ORDERED that the Court shall hold a hearing on Defendants Motion to Exclude the Testimony of Plaintiffs Expert Leroy Grossman on Wednesday, August 28, 2013, at 11:00 a.m. in Courtroom 15 South. This hearing shall be held in conjunction with the final pre-trial conference, for which the parties shall be notified by separate Order. Signed by Magistrate Judge Terry I. Adelman on 7/17/13. (KJS)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
WINFIELD GRAIN, INC., et al.,
Plaintiffs,
v.
MARQUETTE TRANSPORTATION CO., LLC,
Defendant.

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No. 4:11CV2244 TIA

MEMORANDUM AND ORDER
This matter is before the Court on Defendant’s Motion for Partial Summary Judgment,
Motion to Exclude the Testimony of Plaintiffs’ Expert Leroy Grossman, and Motion to Strike
Exhibits A, B, C, D, and H to Plaintiffs’ Opposition to Summary Judgment (Doc. Nos. 34, 45, and
47). The parties consented to the jurisdiction of the undersigned pursuant to 28 U.S.C. § 636(c).
Background
This case stems from alleged incidents occurring on the Mississippi River. Plaintiffs Winfield
Grain and Kevin and Phyllis James, who are the owners of Winfield Grain and own a dock and cargo
terminal located on the Missouri bank of the Mississippi River, filed an Amended Complaint against
Defendant Marquette Transportation Co., LLC (“Marquette”), alleging that barges attached to river
tow boats owned and/or operated by Marquette broke loose and damaged Plaintiffs’ dock and
terminal. (Am. Compl., ECF No. 27) As a result, Plaintiffs contend that they have been unable to
perform their function of mooring barges and operating the grain terminal and have suffered monetary
losses for the cost of repairing the damages, lost profits, surveying costs, bidding and construction
supervision costs, and interest. (Id.) The lost profits calculation includes loss of use of the conveyor
belt to move grain from silo to barges and to move sand dredged from the Mississippi River. (Pls.’

Statement of Facts, Ex. J, ECF No. 39-10) To support their claim for damages, Plaintiffs have
employed Leroy Grossman, an economist from St. Louis University, to testify as an expert. (Id.)
On March 28, 2013, Defendant Marquette filed a Motion for Partial Summary Judgment,
arguing that Plaintiffs are unable to establish lost profits by more than sheer speculation. On May 21,
2013, Defendant also filed a Motion to Exclude the Testimony of Plaintiffs’ Expert Leroy Grossman,
arguing that his opinions are unreliable in that they merely repeat Plaintiffs’ estimates for lost profits,
are unsupported by the requisite “knowledge, skill, experience, training, or education,” and are
otherwise irrelevant. Defendant also argues that the probative value of Mr. Grossman’s opinion is
outweighed by its potential for confusion and unfair prejudice. Finally, on that same date, Defendant
filed a Motion to Strike Exhibits filed by Plaintiffs in support of their Memorandum in Opposition to
Defendant’s Motion for Partial Summary Judgment. The Court held oral arguments on the motions
on June 26, 2013, but the parties confined their arguments to the motion for partial summary
judgment.
Legal Standards
Pursuant to Federal Rule of Civil Procedure 56(c), a court may grant a motion for summary
judgment only if all of the information before the court show “there is no genuine issue of material
fact and the moving party is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(c). See
Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). The court must view the evidence and all
reasonable inferences in the light most favorable to the non-moving party. Hutson v. McDonnell
Douglas Corp., 63 F.3d 771, 775 (8th Cir. 1995).
The moving party has the initial burden to establish the non-existence of any genuine issue of
fact that is material to a judgment in its favor. City of Mt. Pleasant, Iowa v. Associated Elec. Co-op.,
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Inc., 838 F.2d 268, 273 (8th Cir. 1988). Once this burden is discharged, if the record does in fact
bear out that no genuine dispute exists, the burden then shifts to the non-moving party, who must
set forth affirmative evidence and specific facts showing there is a genuine dispute on that issue.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986).
When the burden shifts, the non-moving party may not rest on the allegations in its pleadings,
but by affidavit and other evidence must set forth specific facts showing that a genuine issue of
material fact exists. Fed. R. Civ .P. 56(e). The non-moving party “must do more than simply show
that there is some metaphysical doubt as to the material facts.” Matsushita Elec. Indus. Co. v. Zenith
Radio Corp., 475 U.S. 574, 586 (1986).
Discussion
Defendant Marquette argues that partial summary judgment is appropriate in this case
because Plaintiffs are unable to establish lost profits beyond mere speculation. In support, Defendant
asserts that Plaintiffs never loaded or moored a barge at the grain facility and never used the conveyor
to move grain product. Further, Plaintiffs have no confirmed customers. Additionally, Defendant
contends that Plaintiffs have never dredged any sand from the Mississippi River. Defendant relies
primarily on two cases from the Eighth Circuit Court of Appeals to support its motion for partial
summary judgment. Plaintiffs, on the other hand, argue that this is an admiralty case heard in equity
and that the Court is adequately equipped to determine reasonable damages in light of the
circumstances. The Court finds that partial summary judgment in favor of the Defendant is not
warranted at this time.
Defendant argues that Plaintiffs have not and cannot show lost profits because the grain and
sand-dredging business was never operational, thus entitling Defendant to summary judgment on
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Plaintiffs’ claim of lost profits. In Cargill, Inc. v. Taylor Towing Serv., Inc., an admiralty case, the
Eighth Circuit Court of Appeals held, “[t]o warrant a recovery for lost profits, the plaintiff must
present proof sufficient to bring the issue outside the realm of conjecture, speculation or opinion
unfounded on definite facts.” 642 F.2d 239, 241 (8th Cir. 1981). The Cargill court affirmed the
district court’s finding after a bench trial that plaintiff’s alleged loss of profit was speculative and
unwarranted. Id. The court reasoned that, “[a]nticipated profits are recoverable only when the claim
is substantiated on proof of income and expenses prior to interruption of the business enterprise. Id.
(citation omitted). The Cargill court also noted, however, that “the question of lost profits as an item
of damages is primarily a problem of proof and it is for the district court initially to determine whether
the moving party has produce the quantum and quality of evidence sufficient to establish the claim
in a sum certain.” Id.
Similarly, in ConAgra, Inc. v. Inland River Towing Co., the district court conducted a fourday admiralty bench trial and awarded loss-of-use damages. 252 F.3d 979, 980, 982 (8th Cir. 2001).
The Eighth Circuit Court of Appeals noted that proving loss-of-damages in an admiralty case involves
two elements: 1) proof that profits have actually been or may reasonably supposed to have been lost;
and 2) the amount of lost profits proven with reasonable certainty. Id. at 893 (citations omitted).
In ConAgra, the appellant argued, inter alia, that the testimonial evidence from two officers of the
plaintiff barge company, standing alone, was “insufficient to take the loss-of-use claim ‘outside the
realm of conjecture, speculation, or opinion unfounded on definite facts.’” Id. at 982 (quoting Cargill,
Inc. v. Taylor Towing Serv., Inc., 642 F.2d 239, 241 (8th Cir. 1981)). The court, however, found
that the statements from the witnesses were unequivocal and based on their general experience with
barge demand before and after the period in question. Id. at 984. Thus, the ConAgra court held that
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it could not conclude the district court clearly erred in finding that the plaintiff presented satisfactory
proof of lost profits. Id. at 985.
The undersigned notes that in both of these admiralty cases, the courts made their
determinations regarding the award of lost profits after holding bench trials and hearing testimony,
not at the summary judgment stage. While Defendant may ultimately be correct that Plaintiffs are
unable to prove lost profits, the Court finds that at this point in the litigation, Plaintiffs’ allegations
of lost profits, including its exhibits and deposition excerpts showing customer interest in use of
Plaintiffs’ grain and sand dredging operations and estimates from market demand, are sufficient to
survive a motion for summary judgment. Indeed, courts will award lost profit damages even where
the enterprise is new and has no proven track record. See, e.g., South Port Marine, LLC v. Gulf Oil
Ltd. Partnership, 234 F.3d 58, 66 (1st Cir. 2000) (finding testimony establishing marina’s plan to
dredge the cove and to expand the marina was sufficient to support an award for lost slip revenues);
Miller Indus. v. Caterpillar Tractor Co., 733 F.2d 813, 822 (11th Cir. 1984) (allowing plaintiffs to
prove their lost profits through evidence of three other fishing vessels during plaintiffs’ downtime);
Rogers Terminal & Shipping Corp. v. Int’l Grain Transfer, Inc., 672 F.2d 464, 467 (5th Cir. 1982)
(considering volume of business available in New Orleans and witnesses’ testimonies as to how much
they anticipated the vessel would have handled in determining lost profit damages). Further, the
Court notes that the standard for calculating lost profits set forth in Cargill pertains to the interruption
of an operational business, not a new enterprise, as in the case now before this Court. Cargill, 642
F.2d at 241.
The Eighth Circuit Court of Appeals has stated that it trusts the trial judge’s decision-making
responsibility in deciding which facts to consider and which to ignore. United States v. Abanatha,
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999 F.2d 1246, 1250 (8th Cir. 1993) (“Sometimes this responsibility requires difficult mental
gymnastics – as in a bench trial where the judge decides both what facts to admit into evidence and
how to weigh that evidence – but trial judges manage such feats of objectivity all the time.”). In the
present case, the Court is fully capable of weighing the evidence and determining whether Plaintiffs’
have established lost profits to a reasonable certainty. Thus, the Court finds that summary judgment
on Plaintiffs’ claim for lost profits is not warranted, and the Court will instead hold a bench trial in
this matter.
Defendant has also filed a motion to exclude testimony from the economic expert and a
motion to exclude certain exhibits filed in support of Plaintiffs’ opposition to the motion for partial
summary judgment. With regard to the exhibits, as previously stated, the Court can determine during
the trial which evidence to admit and how to weigh that evidence. Striking the exhibits at this time
would be premature.
As for the expert opinion, the undersigned notes that Dr. Leroy Grossman is a retired
economist, previously employed by St. Louis University. The crux of Defendant’s Daubert argument
for exclusion is that Mr. Grossman relied on the estimates provided by Plaintiff Kevin James and not
on scientific verification, rendering his opinion unreliable. The undersigned finds that, in light of this
Court’s denial of Defendant’s Motion for Partial Summary Judgment, the parties should further
address the Daubert motion in oral arguments. As stated above, the Court will consider and weigh
Plaintiffs’ evidence of lost profits from market demand and prospective customer estimates. Given
this ruling, the Court will give the parties an additional opportunity to present argument for and
against excluding Mr. Grossman’s expert testimony.

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Accordingly,
IT IS HEREBY ORDERED that Defendant’s Motion for Partial Summary Judgment (Doc.
No. 34) is DENIED.
IT IS FURTHER ORDERED that Defendant’s Motion to Strike Exhibits A, B, C, D, and
H to Plaintiffs’ Opposition to Summary Judgment (Doc. No. 47) is DENIED.
IT IS FINALLY ORDERED that the Court shall hold a hearing on Defendant’s Motion to
Exclude the Testimony of Plaintiffs’ Expert Leroy Grossman on Wednesday, August 28, 2013, at
11:00 a.m. in Courtroom 15 South. This hearing shall be held in conjunction with the final pre-trial
conference, for which the parties shall be notified by separate Order.

/s/ Terry I. Adelman
UNITED STATES MAGISTRATE JUDGE
Dated this 17th day of July, 2013.

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