Brown v. West Corporation

Filing 239

MEMORANDUM AND ORDER denying 200 Motion to Strike the opinions and exclude the testimony of Donald L. Frankenfeld. Ordered by Senior Judge Lyle E. Strom. (JSF)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEBRASKA
REX BROWN,
Plaintiff,
V.
WEST CORPORATION, a Delaware
Corporation,
Defendant.

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8:11CV284

MEMORANDUM & ORDER

This matter is before the Court on the motion of the
defendant West Corporation (“West”) to exclude the testimony of
Donald L. Frankenfeld (Filing No. 200).

Plaintiff Rex Brown

intends to use Frankenfeld’s testimony and expert report to
establish damages in the form of lost wages.

Defendant West

Corporation seeks the exclusion of the testimony and report on the
basis that the factual basis and methodology used by Frankenfeld in
forming his expert opinion are unreliable.
A. Legal Standard
Federal Rule of Evidence 702 places limitations on the
admission of expert testimony:
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.
Trial courts “must ensure that any and all scientific testimony or
evidence admitted is not only relevant, but reliable.”
Merrell Dow Pharm., Inc., 509 U.S. 579, 589 (1993).

Daubert v.

“This entails

a preliminary assessment of whether the reasoning or methodology
underlying the testimony is scientifically valid and of whether
that reasoning or methodology properly can be applied to the facts
in issue.”

Id. at 592-93.

Specifically, the court should consider

where applicable the factors set forth in Daubert: whether the
experts method 1) has been or can be tested, 2) “has been subjected
to peer review,” 3) “has a known or potential rate of error,” and
4) have gained general acceptance in the relevant community.
Tire Co., Ltd. v. Carmichael, 526 U.S. 137, 149 (1999).

Kumho

However,

the factors should be applied in a flexible manner that takes into
consideration the circumstances of the case.

Daubert, 509 U.S. at

594-95.
The Court must also consider other applicable rules,
including Federal Rule of Evidence 403 which balances the probative
value of certain evidence against its potential to prejudice the
trier of fact.

Id. at 595.
B. Analysis

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The central premise of the disputed testimony is
Frankenfeld’s opinion that:
The principal measure of Mr. Brown’s loss is
his diminished earning capacity. At West, his
earnings were substantial and on an upward
trajectory, reaching $338,064 (annualized) in
2010. Using his three-year average earnings of
$290,282, and deducting estimated mitigation
earnings of $85,000 per year, I conclude that
his losses, reduced to present value, are
$3,964,838.
Defendant takes issue with Frankenfeld’s method for calculating
both the amount Brown might have been expected to earn at West and
the amount Brown is expected to earn in other employment until his
retirement.
To calculate the amount Brown would have earned at West
if he had continued working there, Frankenfeld used an average of
Brown’s last three years of earnings at West as a baseline to
project annual income going forward.

The annual salary for the

third and final year used in that calculation was itself an
estimate of a whole year’s salary based on Brown’s earnings for the
partial year for which he was employed.

West asserts that this

method failed to take into account other variables that would have
affected Brown’s compensation.
First, Frankenfeld did not do an analysis of West’s
compensation structure in relation to Brown’s sales history.

While

there is no question that Brown’s compensation varied based on his
sales and how West compensated those sales, Frankenfeld relied on
the ultimate result of those factors: the amount West actually

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compensated Brown over the course of his employment.

Notably, for

comparison, Frankenfeld also calculated average annual compensation
for Brown’s previous five years at West, which was not
substantially different at $291,227.

Checking for this kind

consistency adds a degree of reliability to Frankenfeld’s
methodology.

Further, Frankenfeld’s affidavit points to scholarly

references indicating that averaging past annual earnings is a
common method for economists who are estimating future earnings for
purposes of litigation.
Next, defendant contends that Frankenfeld did not
consider the compensation of comparable positions in the industry
or the experience of comparable employees at West in the years
after Brown separated from West.

West also complains that

Frankenfeld did not consider other economic factors that might have
impacted Brown’s compensation.

In deposition testimony Frankenfeld

explained that though he researched other factors such as West’s
competitive position, he found no reason to include them in his
analysis because his research did not uncover any factors that
would indicate any deviation from his three-year-average based
projection.

Frankenfeld also filed a supplemental affidavit

indicating that after he reviewed comparable compensation data that
was later presented to him, his opinion was not affected.

Though

some of the factors defendant raises were not used to calculate
Brown’s expected compensation, the possible effects were considered
in the larger framework.

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West also argues that Frankenfeld’s estimation of the
amount Brown will actually earn between his termination at West and
retirement is deficient because it fails to take into account
potential commissions that Brown might have earned at his
subsequent employer Aegis.

However, Brown worked for Aegis for

less than a year and Frankenfeld’s estimation is based on Brown’s
current employment which does not have the opportunity for
additional commission-based compensation.
The Court is satisfied that Frankenfeld’s expert
testimony meets the minimum standards of sufficient facts and
reliable methods set forth in Daubert.

In addition, West has

failed to show any prejudice or confusion that might flow from
allowing the expert to testify regarding his opinion before the
jury.

The Court finds that Frankenfeld’s expert opinion could

assist the jury in calculating damages, tipping the scales of Rule
403 in favor of admission.

Accordingly,

IT IS ORDERED: Defendant’s motion to strike the opinions and
exclude the testimony of Donald L. Frankenfeld (Filing No. 200) is
denied.

DATED this 29th day of April, 2014.
BY THE COURT:
/s/ Lyle E. Strom
____________________________
LYLE E. STROM, Senior Judge
United States District Court

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