QVC, INC. v. MJC AMERICA, LTD.

Filing 73

MEMORANDUM AND OPINION. SIGNED BY HONORABLE THOMAS N. ONEILL, JR ON 1/4/12. 1/4/12 ENTERED AND COPIES MAILED, E-MAILED.(fdc)

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
QVC, INC.
v.
MJC AMERICA, LTD.
d/b/a SOLEUS INTERNATIONAL, INC.

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O’NEILL, J.

CIVIL ACTION
NO. 08-3830

January 4, 2012
MEMORANDUM

Plaintiff and counterclaim-defendant QVC, Inc. moves to exclude certain opinion
testimony of Harry Ehrlich, a liability expert proffered by defendant and counterclaim-plaintiff
MJC America, Ltd., d/b/a Soleus International, Inc. QVC contends that certain of Ehrlich’s
opinions and testimony do not satisfy the requisites of Rule 702 of the Federal Rules of Evidence
and/or the standards set forth in Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579
(1993) and its progeny. For the reasons that follow, I will grant in part and deny in part QVC’s
motion.
BACKGROUND1
Among QVC’s claims against Soleus is a claim seeking to recover costs and damages
allegedly attributable to QVC’s voluntary recall of 19,000 SoleusAir model HM5-15A-32 space
heaters. After receiving customer reports that certain heaters distributed by Soleus had emitted
smoke and sparks, overheated, melted and/or caught fire, QVC implemented a voluntary recall of
the heaters. The purchase orders for the heaters provided that:
In the event [QVC] reasonably determines that any Merchandise
1

This case is to be tried as a bench trial.

sold by [QVC] to its customers contains any defect, [QVC] may, in
its sole discretion (taking into account [QVC’s] standards for
customer satisfaction), subject to applicable law, determine
whether [to conduct] a voluntary recall or other action (including
the determination as to whether [QVC’s] customers will be offered
a replacement item of Merchandise or a refund of their purchase
price and shipping and handling charges).
Compl. ¶ 20. QVC asserts that it reasonably determined that the heaters were defective and that
it properly exercised its discretion to recall them. Compl. ¶ 32. Soleus contends that QVC’s
recall of the heaters was unreasonable. Dkt. No. 71 at 2.
Soleus retained Ehrlich to review QVC’s decision to recall the heaters. Ehrlich submits
that he is an engineer with expertise in “industrial and manufacturing areas, human factors,
product design, equipment design, [and] warnings.” Dkt. No. 68-3 at 7:13-15; 127:7-13. Ehrlich
has experience in the investigation of product failures. Dkt. 68-2 at 11.2 His past experience also
includes responsibility for quality control, manufacturing processes, and compliance with
Underwriters Laboratory standards. Id. He considers himself to be an expert in manufacturing
processes that involve the crimping of electrified wires within consumer appliances including
humidifiers, vaporizers, heating pads, coffee makers and convection ovens. Dkt. No. 68-3 at
15:6-16:23.
Ehrlich has submitted two expert reports, dated January 11, 2011 and February 25, 2011.
In his reports, he concludes, inter alia, that “the cause of overheating is attributed to an isolated
condition related to the crimping of wires,” Dkt. No. 68-1 at 8, and that “a loose crimp
connection was responsible for the failure.” Dkt. No. 68-2 at 2. Ehrlich’s reports also criticize

2

Because Ehrlich’s CV does not include page numbers, this reference is to page
numbers generated by the electronic case filing system.
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the rigor of QVC’s investigation into possible defects in the heaters. His reports ultimately
conclude that QVC’s recall decision had “no basis,” was “arbitrary,” “not justified” and “not
substantiated”; and that QVC had no “right” to issue the recall, Dkt. No. 68-1 at 13, Dkt. No. 683 at 29:21-23; 78:7-12; and that QVC’s recall failed to “comport with the [Consumer Product
Safety Commission] requirements for a product safety recall.” Dkt. No. 68-2 at 5. QVC
contends that these conclusions are improper legal opinions and seeks to exclude them. QVC
also asserts that Ehrlich lacks the requisite specialized knowledge to offer his opinion that QVC’s
recall decision was not reasonable because the recall decision was overbroad in scope and
premature. Dkt. No. 68-1 at 12-13. QVC further contends that Ehrlich lacks the requisite
expertise to render an opinion that the defects present in the heaters were “not statistically
significant” and constituted “an isolated problem.” Id. at 11-12.
LEGAL STANDARD
Expert testimony may not be admitted at trial unless the proffered testimony is “not only
relevant, but reliable.” Daubert, 509 U.S. at 589, see also Kumho Tire Co. v. Carmichael, 526
U.S. 137, 147-48 (1999) (holding that a district court’s “gate keeping obligation” under Daubert
and Rule 702 applies to “all experts, not just to ‘scientific ones’”). Rule 702 of the Federal Rules
of Evidence governs the admissibility of expert opinion testimony at trial and provides that
If scientific, technical, or other specialized knowledge will assist
the trier of fact to understand the evidence or to determine a fact in
issue, a witness qualified as an expert by knowledge, skill,
experience, training, or education may testify thereto in the form of
an opinion or otherwise, if (1) the testimony is based upon
sufficient facts or data, (2) the testimony is the product of reliable
methods, and (3) the witness has applied the principles and
methods reliably to the facts of this case.

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Fed. R. Evid. 702. Rule 702 thus mandates “three distinct substantive restrictions on the
admission of expert testimony: qualifications, reliability and fit.” Elcock v. Kmart Corp., 233
F.3d 734, 741 (3d Cir. 2000). The party offering the expert testimony has the burden of
establishing that the proffered testimony meets each of the three requirements by a
preponderance of the evidence. Padillas v. Stork-Gamco, Inc., 186 F.3d 412, 418 (3d Cir. 1999).
DISCUSSION
I.

Legal Conclusions
One disputed issue to be determined at trial is whether, under Section 5 of the purchase

orders, QVC reasonably determined that the heaters contained any defect. If so, QVC, in its sole
discretion, had the right under the terms of its contract with Soleus to determine whether to
proceed with a recall, taking into account QVC’s standards for customer satisfaction. In the
context of this dispute, Ehrlich’s opinions as to the reasonableness of QVC’s determination that
the heaters were defective serve to do nothing more than inform the factfinder what result it
should reach. Expert testimony that “merely tells the [factfinder] what result to reach is
improper.” Burger v. Mays, 176 F.R.D. 153, 156 (E.D. Pa. 1997) (alterations omitted), citing
Fed. R. Evid. 704, advisory committee’s note. Experts “may not . . . apply the resulting law to
the facts of [a] case to draw a legal conclusion. In essence, the experts may testify as to their
factual conclusions so long as they do not offer a legal opinion as to the legal implications of
those conclusions.” Langbord v. U.S. Dep’t of the Treasury, No. 06-05315, 2009 WL 1312576,
at *8 (E.D. Pa. May 7, 2009); see also Berckeley Inv. Grp., Ltd. v. Colkitt, 455 F.3d 195, 217 (3d
Cir. 2006) (An “expert witness is prohibited from rendering a legal opinion.”), Jackson v. City of
Pittsburgh, No. 07-111, 2011 WL 3443951, at *18 n. 24 (W.D. Pa. Aug. 8, 2011) (same).
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Because it is the role of the factfinder and not Mr. Ehrlich to determine whether QVC’s
determination to recall the heaters was reasonable, I will grant QVC’s motion to the extent that
QVC seeks to preclude Ehrlich’s conclusions that QVC’s recall decision had no basis, was
arbitrary, not justified, or not substantiated or that QVC lacked a right to issue a recall. See
Berckeley Inv. Grp., 455 F.3d at 218 (excluding expert testimony “opining that in light of the
apparent routine industry practice it was reasonable for [plaintiff] to have believed” that it was
entitled to an exemption from federal securities laws); Hygh v. Jacobs, 961 F.2d 359, 364 (2d
Cir. 1992) (holding expert’s conclusory condemnations of defendant’s actions merely told the
jury what result to reach and should have been excluded).
I will also grant QVC’s motion to the extent that QVC seeks to preclude Ehrlich’s
testimony as to his conclusion that “QVC’s letters to the CPSC confirm that their recall does not
comport with the CPSC’s requirements for a product safety recall.” Dkt. No. 68-2 at 5. This
conclusion also crosses over the line from admissible testimony to inadmissible legal opinion.
See Payne v. A.O. Smith Corp., 627 F. Supp 226, 227-28 (finding that “[t]he Court cannot
abdicate its role as finder of law” and excluding expert opinion that a product recall should have
been performed by defendants under the requirements of the Consumer Product Safety Act) (S.D.
Ohio 1985).
II.

Qualifications
At a minimum, a proffered expert witness “must possess skill or knowledge greater than

the average layman.” Elcock, 233 F.3d at 741. However, as the Court of Appeals has held, “it is
an abuse of discretion to exclude testimony simply because the trial court does not deem the
proposed expert to be the best qualified or because the proposed expert does not have the
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specialization that the court considers most appropriate.” Holbrook v. Lykes Bros. S.S. Co., Inc.,
80 F.3d 777, 782 (3d Cir. 1996). “Because of our liberal approach to admitting expert testimony,
most arguments about an expert’s qualifications relate more to the weight to be given the
expert’s testimony than to its admissibility.” Id. “Vigorous 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 96.
A.

Product Recalls

QVC contends that Ehrlich is not qualified to testify as an expert on product recalls.
Indeed, neither Ehrlich’s resume, Dkt. No. 68-2 at 11-143, nor his deposition testimony, Dkt.
Nos. 68-3 and 68-4, identify any specific experience or knowledge with respect to handling
product recalls.4 Contra In re Stand N’ Seal, Products Liab. Litig., No. 07-1804, 2009 WL
1772585, at *5 (holding former CPSC employee was qualified to testify as an expert on product
recalls where, during her employment, she was privy to the “product recall and notice practices
of hundreds of different companies”).
In response, Soleus asserts that
Ehrlich will testify from specialized knowledge that: (1) the results
of QVC’s investigation disclosed no design flaws and pointed to a
potential crimping error; (2) by its nature, a potential crimping
error is likely isolated or intermittent; (3) the isolated nature of the
defect indicated the need to further investigate whether the
problems are isolated to particular lots; and (4) QVC’s decision to
recall all of the Heaters as defective given this factual predicate

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This reference is to page numbers generated by the electronic case filing system.

4

In Nisanov v. Black & Decker (U.S.) Inc., No. 05-5911, 2008 WL 906708, at *6
(E.D.N.Y. Apr. 03, 2008), the Court found that “Ehrlich [was] qualified to opine on whether a
recall is necessary.” I decline to adopt this finding for the reasons stated in this opinion.
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was unsupported from a quality control perspective.
Dkt. No. 71 at 15. With respect to the first, second and third points, Ehrlich’s experience, as
reflected in his curriculum vitae and though his deposition testimony, qualifies him to testify
about design flaws, crimping errors and their implications for subsequent product defect
investigations. An expert who testifies primarily from experience must “explain ‘how that
experience leads to the conclusion reached, why that experience is a sufficient basis for the
opinion, and how that experience is reliably applied to the facts.’” Suter v. Gen. Acc. Ins. Co. of
Am., 424 F. Supp.2d 781, 788 (D.N.J. 2006), quoting Fed. R. Evid. 702 advisory committee’s
note, 2000 amendments). Regarding the fourth point, because neither Ehrlich’s curriculum vitae
nor his deposition testimony identify any experience specific to making a determination as to
whether a product should be recalled, I find that Ehrlich is not qualified to testify as to whether
QVC’s decision to recall all of the Heaters as defective was supported from a quality control
perspective.
B.

Statistical Analysis

QVC contends that Ehrlich should be precluded from offering opinions based on his
findings relating to the number or percentage of defective heaters that Soleus sold to QVC.
Erhlich’s January 11 report includes a conclusion that “any defects present in the shipments were
not statistically significant.” Dkt. No. 68-1 at 4, 11. Ehrlich testified that he considers himself to
be an expert in the field of statistical analysis “when it comes to quality control.” Dkt. No. 68-4
at 100:11-13. However, QVC asserts that Ehrlich lacks advanced education and experience in
statistical analysis. His educational background includes only courses in probability and
statistics taken “probably 40 years ago.” Dkt. No. 68-4 at 98-18-99:24. Although Ehrlich
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testified at his deposition that the field of quality control incorporates statistics, Dkt. No. 68-4 at
101:1-102:9, his resume provides no details as to his practical experience in conducting
statistical analysis. I find that Soleus has not demonstrated that Ehrlich possesses sufficient
“knowledge, skill, experience, training, or education” to provide testimony on statistical issues
that will “assist the trier of fact.” Fed. R. Evid. 702; see also Arista Records LLC v. Lime Group
LLC, No. 06-5936, 2011 WL 1674796, at *5-6 (S.D.N.Y. May 2, 2011) (precluding expert
testimony that depended on statistical analysis where the expert did not “have a degree in
statistics, does not teach statistics, has never published articles on statistics” and, although he
“claimed to use statistical methods in his . . . work, at his deposition, he was unable to provide
specifics about the particular statistical methodologies he has used”).
Further, even if Soleus could establish Ehrlich were sufficiently qualified to testify with
respect to statistical analysis, I would still exclude his conclusions because he has not explained
the methods he used to arrive at a statistical analysis of relevant data. An expert’s opinions may
not be based “on subjective belief or unsupported speculation.” In re Paoli Railroad Yard PCB
Litigation, 35 F.3d 717, 742 (3d Cir. 1994) (citations and internal quotations omitted).
Neither Erhlich’s testimony nor his reports provide any details as to how he conducted the
analysis that allowed him to arrive at his conclusion regarding the lack of statistical significance
of any defects present in the shipments of heaters. Instead, his testimony speaks only generally
about how quality control analysis may incorporate statistics:
So you do a sampling based on the ASQC tables, which are
derived from the original MIL tables, and you develop what’s
called an AQL, or an acceptable quality level. . . . The accepted
quality level and the size of the lot which you’re looking at
determined how many pieces you’re going to pick to look at. And
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then you have a criteria, which is the AQL, that may say accept on
zero defects, reject on one. . . . And this is really based on the
probability that you’re getting a picture of the entire lot, usually
with a 95 percent confidence level. . . . So it’s based on statistics.
It’s based on probability. And it’s – actually it’s a standard.
Dkt. No. 68-4 at 101:9-102:9. Ehrlich did not testify that he in fact undertook the sampling he
described. Likewise, although his January 11 report concludes that “any defects present in the
shipments were not statistically significant,” Dkt. No. 68-1 at 4, 11, his report provides no
explanation of the methodology he applied in reaching this conclusion. Instead, he testified that
“through sampling QVC could have determined which lots were bad, which lots were good.” Id.
at 102:15-17.
Accordingly, I will grant QVC’s motion to the extent that it seeks to exclude opinions
that purport to be based on statistical analysis.
An appropriate Order follows.

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