Custom Hair Designs by Sandy, LLC et al v. Central Payment Co., LLC

Filing 297

MEMORANDUM AND ORDER: Motion to Exclude the Proposed Testimony of Steve W. Browne, Filing No. 227, filed by defendant, is denied. Motion for Partial Summary Judgment on Defendant's Liability for Express Breach of Contract, Filing No. 232, filed by plaintiffs, is denied. Motion to Exclude All Testimony of Patrick Moran and Limited Testimony of Ian Ratner, Filing No. 234, filed by plaintiffs, is denied. Motion for Partial Summary Judgment, Filing No. 238, filed by defendant, is denied. Motion to Decertify the Class, Filing No. 242, filed by defendant, is denied. Motion to continue trial, Filing No. 287, Filed by defendant, is denied. Ordered by Senior Judge Joseph F. Bataillon. (ADB)

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IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEBRASKA

CUSTOM HAIR DESIGNS BY SANDY, LLC,
on behalf of themselves and all others
similarly situated; and SKIP'S PRECISION
WELDING, LLC, on behalf of themselves
and all others similarly situated;

8:17CV310
MEMORANDUM AND ORDER

Plaintiffs,
vs.
CENTRAL PAYMENT CO., LLC,
Defendant.

This matter is before the Court on the following motions:
1. Motion to Exclude the Proposed Testimony of Steve W. Browne, Filing No.
227, filed by defendant;
2. Motion for Partial Summary Judgment on Defendant's Liability for Express
Breach of Contract, Filing No. 232, filed by plaintiffs;
3. Motion to Exclude All Testimony of Patrick Moran and Limited Testimony of Ian
Ratner, Filing No. 234, filed by plaintiffs;
4. Motion for Partial Summary Judgment, Filing No. 238, filed by defendant;
5. Motion to Decertify the Class, Filing No. 242, filed by defendant; and
6. Motion to continue trial, Filing No. 287, filed by defendant.
STANDARD OF REVIEW
A. Summary Judgments
Summary judgment should be granted “if the movant shows that there is no
genuine dispute as to any material fact and the movant is entitled to judgment as a matter
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of law.” Fed. R. Civ. P. 56. “Summary judgment is appropriate [*6] when, construing the
evidence most favorably to the nonmoving party, there is no genuine issue of material
fact and the moving party is entitled to judgment as a matter of law.” Crozier v. Wint, 736
F.3d 1134, 1136 (8th Cir. 2013). “Summary judgment is not disfavored and is designed
for ‘every action.’” Torgerson v. City of Rochester, 643 F.3d 1031, 1043 (8th Cir. 2011)
(en banc) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 327 (1986)). In reviewing a
motion for summary judgment, the court will view “all evidence and mak[e] all reasonable
inferences in the light most favorable to the nonmoving party.” Inechien v. Nichols
Aluminum, LLC, 728 F.3d 816, 819 (8th Cir. 2013).

Credibility determinations, the

weighing of evidence, and the drawing of legitimate inferences from the facts are jury
functions, not those of a judge. Torgerson, 643 F.3d at 1042 (quoting Reeves v.
Sanderson Plumbing Prod., Inc., 530 U.S. 133, 150 (2000). But the nonmovant must do
more than simply show that there is some metaphysical doubt as to the material facts.
Torgerson, 643 F.3d at 1042; and see Briscoe v. Cty. of St. Louis, Missouri, 690 F.3d
1004, 1011 (8th Cir. 2012) (stating that the nonmoving party “must come forward with
‘specific facts showing that there is a genuine issue for trial.’”).
Where the nonmoving party will bear the burden of proof at trial on a dispositive
issue, the moving party need not negate the nonmoving party's claims by showing “the
absence of a genuine issue of material fact.” Celotex Corp., 477 U.S. at 325 (quoting
Adickes v. S. H. Kress & Co., 398 U.S. 144, 159 (1970)). Instead, “the burden on the
moving party may be discharged by ‘showing’ [*7] . . . that there is an absence of evidence
to support the nonmoving party's case.” Celotex Corp., 477 U.S. at 325. In response to
the movant's showing, the nonmoving party’s burden is to produce specific facts

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demonstrating “‘a genuine issue of material fact’ such that [its] claim should proceed to
trial.” Nitro Distrib., Inc. v. Alticor, Inc., 565 F.3d 417, 422 (8th Cir. 2009) (quoting
Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986)). “The mere
existence of a scintilla of evidence in support of the [nonmovant's] position will be
insufficient; there must be evidence on which the jury could reasonably find for the
[nonmovant].” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986)); see also Quinn
v. St. Louis Cty., 653 F.3d 745, 751 (8th Cir. 2011) (stating “‘[T]he mere existence of some
alleged factual dispute between the parties’” will not defeat an otherwise properly
supported motion for summary judgment) (quoting Anderson, 477 U.S. at 247–48).
Where the record taken as a whole could not lead a rational trier of fact to find for the
nonmoving party, there is no genuine issue for trial. Torgerson, 643 F.3d at 1042.
B. Testimony of Experts
Admissibility of expert testimony is governed by Fed. R. Evid. 702. See Daubert
v. Merrell Dow Pharms., Inc., 509 U.S. 579, 588 (1993). Trial judges are the gatekeepers
to exclude unreliable scientific testimony. Id. at 597. This gatekeeper function applies to
all expert testimony, not just testimony based in science. Kumho Tire Co. v. Carmichael,
526 U.S. 137, 147 (1999).
Proposed expert testimony must meet three prerequisites in order to be admitted
under Rule 702: first, evidence based on scientific, technical, or other specialized
knowledge must be useful to the finder of fact in deciding the ultimate issue of fact;
second, the proposed witness must be qualified to assist the finder of fact; and third, the
proposed evidence must be reliable or trustworthy in an evidentiary sense. Lauzon v.
Senco Prod., Inc., 270 F.3d 681, 686 (8th Cir. 2001). Expert testimony assists the triers

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of fact when it provides information beyond their common knowledge. Kudabeck v.
Kroger Co., 338 F.3d 856, 860 (8th Cir. 2003).
Daubert established a non-exclusive checklist for trial courts to use in assessing
the reliability of expert testimony,1 but not all of the Daubert factors necessarily apply to
non-scientific evidence. United States v. Holmes, 751 F.3d 846, 850 (8th Cir. 2014)
(finding the reliability of non-scientific expert testimony must rest on reliable principles and
methods, but the “relevant reliability concerns may focus upon personal knowledge or
experience” rather than scientific foundations) (quoting Kumho Tire Co., 526 U.S. at 150).
“[N]othing in Rule 702, Daubert, or its progeny requires ‘that an expert resolve an ultimate
issue of fact to a scientific absolute in order to be admissible.’” Kudabeck, 338 F.3d at
861 (quoting Bonner v. ISP Techs., Inc., 259 F.3d 924, 929 (8th Cir. 2001)).
“[C]ases are legion that, correctly, under Daubert, call for the liberal admission of
expert testimony.” Johnson v. Mead Johnson & Co., LLC, 754 F.3d 557, 562 (8th Cir.
2014). “As long as the expert’s scientific testimony rests upon ‘good grounds, based on
what is known’ it should be tested by the adversary process with competing expert
testimony and cross-examination, rather than excluded by the court at the outset.” Id. at
562 (quoting Daubert, 509 U.S. at 590). Generally, if the methodology employed by an
expert is scientifically valid and could properly be applied to the facts of the case, it is
reliable enough to assist the trier of fact. Id. at 564.

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Those factors are: whether the theory or technique can be and has been tested; whether the theory or
technique has been subjected to peer review and publication; the known or potential rate of error; whether
the theory has been generally accepted; whether the expertise was developed for litigation or naturally
flowed from the expert’s research; whether the proposed expert ruled out other alternative explanations;
and whether the proposed expert sufficiently connected the proposed testimony with the facts of the case.
Lauzon, 270 F.3d at 687.

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DISCUSSION
A. Defendant’s Motions:
1.

With regard to the motion to continue trial, Filing No. 287, the Court agrees

with the plaintiff that this case has been lingering for over four years. The plaintiff opposes
the continuance, so long as all motions are decided by January 18th, prior to the pretrial
conference. The Court intends to try this case as scheduled, absent any priority criminal
cases on its docket. The parties should prepare for trial. It is time to move this case
along. Filing No. 287 is denied.
2.

Defendant has filed to decertify this case, Filing No. 242. Defendant raises

the same issues previously decided by the Court with regard to class certification. The
Court has again reviewed this material, and the motion is again denied. The factual
issues discussed in the brief and the submitted evidence are issues for trial. Filing No.
242 is denied.
3.

In the motion for partial judgment, Filing No. 238, defendant asks this Court

to grant summary judgment as to certain claims, including, fraud, RICO, and various other
issues. After reviewing the briefs for both sides, the Court is of the opinion that there are
significant and material facts that must be decided at trial. The Court must hear and
review the evidence as it is submitted at trial. If, thereafter, the defendant feels a motion
is appropriate, the defendant is free to submit the same. The defendant’s motion for
partial summary judgment, Filing No. 238, is denied.
4.

With regard to the motion to exclude the proposed testimony of Steve W. Browne,

Filing No. 227, filed by defendant, defendant contends that pursuant to Daubert and its
progeny, such testimony should be excluded. Specifically, defendant contends that

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Browne’s reports should be excluded for failure to comply with Rule 26; should be
excluded because it is inadmissible under Rule 702; should be excluded because it is an
inadmissible factual narrative; and should be excluded as Browne is not qualified to offer
an opinion regarding the propriety of payment processing fees.

Defendant states:

“[Browne] is a certified public accountant (“CPA”), a certified information technology
professional (“CITP”), a certified fraud examiner (“CFE”), and a certified information
systems auditor (“CISA”). See Ex. 1 at 1. He is also certified in financial forensics (“CFF”)
and accredited in business valuation (“ABV”). Id. He has served as an expert witness
for many years and has been retained by both public and private entities. Id. His firm,
Meara Welch Browne, P.C., has “worked [with] and consulted for . . . multiple businesses
that accept credit and debit card payments” (as does every modern business in the United
States). Id. (emphasis added). However, he has never provided expert testimony in a
case related to payment processing. See Ex. 4 at 84:3–9. This case would be his first.”
Filing No. 229 at 2. However, thereafter, defendant argues against the methodology used
by Browne as well as the numbers he uses to calculate his resulting opinions.
Mr. Browne is a qualified expert. He has many areas of expertise, most of which
appear to be relevant to this case. He is offering opinions connected to the evidence,
and it does not appear that he intends to testify via a “factual narrative.” Further, the
defendant has an expert on these issues. The opinions will most likely be hotly contested
by both sides. That is a product of the trial process. It is not for this Court to make
advance decisions regarding factual issues. Such arguments go to the weight of the
testimony and not to its admissibility. That is what defendant is asking this Court to do.
Th Court will allow Mr. Browne’s testimony. If, during the trial, defendant determines that

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an objection is needed, defendant is free to make the appropriate objection or motion.
Defendant’s motion to exclude the testimony of Mr. Browne, Filing No. 227, is denied.
B. Plaintiff’s motions:
1. Plaintiff files a motion for Partial Summary Judgment on Defendant's Liability
for Express Breach of Contract, Filing No. 232. Again, the Court after reviewing the briefs
and evidence finds this to be both a legal and factual issue. The Court must hear the
evidence presented at trial and see the context of the facts as they relate to the
contractual terms. If, after offering that evidence, the plaintiff still believes a motion is
appropriate, it may offer one at the appropriate time. Accordingly, Filing No. 232, will be
denied.
2.

Plaintiff’s move to Exclude All Testimony of Patrick Moran2 and Limited

Testimony of Ian Ratner3, Filing No. 234. The “[c]onflicting [but admissible] views of
different experts” must ultimately be decided, not by the Court, but by the trier of fact. Id.
(quoting Kumho Tire Co., 526 U.S. at 153). These issues must be determined at trial by
“[v]igorous cross-examination, presentation of contrary evidence, and careful instruction
on the burden of proof.” Daubert, 509 U.S. at 596. It appears that much of this testimony
will be offered to challenge the methodology of plaintiff’s expert. This goes to weight and

As stated by the defendant, “Mr. Moran is an electronic payments consultant with “over 21 years of
experience in the payment processing and electronic payments industries.” Moran Rep. ¶¶ 2, 5. He has
served as “Vice President of Interchange Strategy at Visa USA,” where he was “a member of Visa’s
Interchange Strategy team,” and Senior Vice President at “Vantiv, a large payment processor in the
electronic payments industry.” Id. ¶¶ 3–4. He has also testified numerous times as an expert in “paymentrelated litigation.” Id. ¶ 2 & Appx. B. Filing No. 254 at 7-8.
3
Ian Ratner is a CPA with approximately 30 years of experience in public accounting and forensic
accounting, including the quantification of damages. See Ratner Rep. ¶ 9. He also has “significant
experience in the payment card industry” dating back to the 1990s and he has conducted “damages
[analyses] in [other] credit card industry related class action[s].” Id. ¶ 12. In total, over the course of the last
several decades, Mr. Ratner has testified as an expert on damages issues in dozens of cases. See id. ¶ 9
& Appx. 2. Filing No. 254 at 14-15.
2

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credibility. The Court will permit these two experts to testify, and if the plaintiff believes
the testimony wanders from that which is permissible, an appropriate objection can be
made at that time. The motion to exclude, Filing No. 234, is denied.
THEREFORE, IT IS ORDERED THAT THE:
1. Motion to Exclude the Proposed Testimony of Steve W. Browne, Filing No. 227,
filed by defendant, is denied.
2. Motion for Partial Summary Judgment on Defendant's Liability for Express
Breach of Contract, Filing No. 232, filed by plaintiffs, is denied.
3. Motion to Exclude All Testimony of Patrick Moran and Limited Testimony of Ian
Ratner, Filing No. 234, filed by plaintiffs, is denied.
4. Motion for Partial Summary Judgment, Filing No. 238, filed by defendant, is
denied.
5. Motion to Decertify the Class, Filing No. 242, filed by defendant, is denied.
6. Motion to continue trial, Filing No. 287, Filed by defendant, is denied.

Dated this 20th day of December, 2021.

BY THE COURT:
s/ Joseph F. Bataillon
Senior United States District Judge

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