ARGUSH v. LPL FINANCIAL, LLC et al
OPINION filed. Signed by Judge Anne E. Thompson on 1/23/2017. (km)
NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
JAN 23 2017
WILLIAM T. WALSH
Civ. No. 13-7821
LPL FINANCIAL, LLC, LPL HOLDINGS
INC., ANDREW PUTTERMAN, and
Civ. No. 14-955
(consolidated for pretrial purposes)
LPL·FINANCIAL, LLC, LPL HOLDINGS
INC., ANDREW PUTTERMAN, and
Defendants.· NICHOLAS MARINELLO,
Civ. No. 14-956
(consolidated for pretrial purposes)
LPL FINANCIAL, LLC; LPL HOLDINGS INC., ANDREW PUTTERMAN, and
FORTIOENT, LLC~,.<. ..
This matter has come before the Court on the motion to strike Plaintiffs' Expert Reports
brought by Defendants in the above-captioned consolidated cases, LPL Financial, LLC and LPL
Holdings, Inc. (collectively, "Defendants"). (ECF No. 125). 1 Plaintiffs Lee Argush, Alan
Gavomik, and Nicholas Marinello (collectively, "Plaintiffs") oppose. (ECF No. 132). The Court
has decided the motion based on the written submissions of the parties pursuant to Local Civil
Rule 78.l(b). For the reasons stated herein, Defendants' motion will be granted.
The facts of these cases are well known to the parties and need not be recited atlength
here. This case arises out of an employment dispute between the three named Plaintiffs and
Defendant LPL Financial. Plaintiffs Argush, Gavomik and Marinello are former employees of
LPL Financial. LPL Holdings is the parent company of LPL Financial. All three Plaintiffs had
their employment terminated by LPL Finap.cial in 2013. The main issue is whether each of the
three Plaintiffs were validly terminated -"for cause.·"
. On August 5, 2014, this Court granted in part Defendants' motion to dismiss in each of
the three cases~ 2 (Civ. No. 13-7821; ECF No~ 22; Civ. No. 14-955, ECFNQ; 20; Civ. No. 14-
956, ECF No.. 20). Additionally, on August 24, 2016, this Court granted Defendants' Motion to
Dismiss Count Four of Plaintiffs' respective· Complaints, which sought a declaratory judgment
and void. (Civ. No. 1_3:-7821, ECF No~ 110). As a
· result, in eachcase, Plaintiff has two reniaining claims against Defendants: Breach of
Employment Agreement and Breach of Contract.
Unless otherwise noted, all citations to the docket in this opinion are made to Civ. No. 13-7821.
The Court dismissed each of the Plaintiffs' claims for: ( 1) violation of the Conscientious Employee Protection Act
("CEPA"); and (2) tortious interference. The Court also dismissed Plaintiff Argush' s claims for breach of the
covenant of good faith and fair dealing and conversion.
The deadline for the completion of fact discovery in these cases was June 16, 2016.
(ECF No. 74). The deadline for filing dispositive motions was July 8, 2016. (Id.). On July 19,
2016, Plaintiffs served three expert reports on Defendants which opine on economic losses
claimed by each Plaintiff as a result of the alleged breaches of contract. (Deel. Of Jakob B.
Halpern, Exs. A-C, ECF No. 125-3) ("Plaintiffs' Expert Reports"). Defendants previously filed
an application to strike Plaintiffs' expert reports before the Magistrate Judge. (ECF No. 107).
The Magistrate Judge denied the application without prejudice and directed that it be refiled and
heard before the District Court. (ECF No. 117). Defendants thereafter filed the instant motion to
strike these expert reports. (ECF No. 125). Therefore, Defendants' motion to strike Plaintiffs'
expert reports is currently before the Court.
Defendants argue that a large portion of Plaintiffs' expert reports should be stricken as
irrelev8:tlt inasmuch as the reports opin~ on damages that cannot be recovered as a matter of law.
Because the Court finds Defendants' first argument to be dispositive, Defendants' other
arguments need not be addressed.·
· .While~ the adm.issibility of expert testimony is governed by Federal Rule of Evidence 702
and Daubertv.· Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993) and its progeny, one of
the fund~ental requirements ofexpert testimony is "relevance," which should be evaluated
under the standard expressed in Fed. R .. Evid. 401. United States v. Ford, 481F.3d215, 218 (3d
· Cir. 2007). Federal Rule of Evidence 401 states that evidence is relevant if it has any tendency
to make a fact of consequence in determining an action mote or less probable than it would be
without the evidence. Fed. R. Evid. 401.
Here, a large portion of Plaintiffs' expert reports opine that front pay damages-lost
future earnings that Plaintiffs might have made if their employment with LPL Financial was
never terminated-.may be· recoverable as a result of Defendants' alleged breach of contract.
(See Plaintiffs' Expert Reports, ECF No. 125-3, Ex. A at 2-24; Ex. B at 2-25; Ex. C at 2-25).
Defendants argue that if Plaintiffs were to ultimately prevail at trial, they would be entitled to the
damages set forth in the contracts at issue in these cases, specifically the severance benefits set
forth in the offer letters signed by each of the three Plaintiffs and the cancelled stock options set
forth in the documents governing LPL equity grants. (Defs.' Mot., ECF No. 125-1at4).
However, Defendants claim that Plaintiffs' expert reports opine that Plaintiffs may also be
entitled to damages in the form of front pay damages which would greatly increase each of the
Plaintiffs' potential damages in theses cases from several hundred thousand dollars per plaintiff
to $7.0-8.2 million dollars per plaintiff. (Id. at 4-5).
In the cases before this Court, many of the Pl_aintiffs' claims, including each of the
Plaintiffs' CEPA claims, have been dismissed. As a result, the only remaining claims are for
breach C?femploymentagreement and breach of contract.
No. 13-7821, ECF Nos. 22, 110;
Civ. No. 14-955, ECF No. 20; Civ. No. 14-956, ECF No. 20). Plaintiffs do not dispute that they
were at-will employees, and as such, could have been terminated at any time with or without
:· - ·;.,,~ cause>(See?E('.FNo~l25-4; Ex.Mat 3; Ex. N. at3;.Ex. 0 atJ).};;Jbe authoriti.~s that Plaintiffs
cite to support their claim for front pay are distinguishable in that they either are not relevant or
included claims for discrimination; retaliatory discharge or promissory estoppel. See, e.g.,
Quinlan V; Curtiss-Wright Corp~ 425 N.J. Super335, 366 (App. Div. 2012) (finding that
employees maystill collect front pay in a New Jersey Law Against Discrimination case);
Maxfield v. Sinclair1nt'l., 166 F.2 788, 795-96 (3d Cir. 1985) (finding that front pay damages
are permissible in a federal ADEA claim). Tellingly, Plaintiffs do not cite any authority, which
stands for the proposition that an at-will employee can receive front pay damages .on a breach of
contract theory under New Jersey law.
Notwithstanding Plaintiffs' lack of authority, Plaintiffs argue that such front pay damages
could still possibly be within the mutual legitimate expectation interest of the parties to these
contracts. (Pls.' Opp'n at 9, ECF No. 132). Given the contractually-defined severance benefits
in the contracts at issue here, the Court finds Plaintiffs' argument unavailing. Therefore, the
Court is persuaded that a large portion of Plaintiffs' expert reports opine on economic losses in
the form of front pay damages th~t are not recoverable under Plaintiffs' remaining claims. As a
result, those sections of Plaintiffs' expert reports are irrelevant. They must be stricken and not
considered in these cases.
For the reasons discussed above, Defendants' motion will be granted. An appropriate
- order will
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