Soltesz v. Rushmore Plaza Civic Center

Filing 83

ORDER denying 72 Motion to Exclude; denying 77 Motion to Strike. Signed by Chief Judge Jeffrey L. Viken on 3/18/14. (SB)

UNITED STATES DISTRICT COURT
DISTRICT OF SOUTH DAKOTA
WESTERN DIVISION
KYLE SOLTESZ, d/b/a, TOP DOG
ENTERPRISES,
Plaintiff,
vs.
RUSHMORE PLAZA CIVIC
CENTER, a political subdivision of
the City of Rapid City, and
CITY OF RAPID CITY, a political
subdivision of the State of South
Dakota,
Defendants.

)
)
)
)
)
)
)
)
)
)
)
)
)
)
)

CIV. 11-5012-JLV

ORDER

Pending before the court are defendants’ motion to exclude the
testimony of Richard Putnam (Docket 72) and motion to strike plaintiff’s
responsive pleadings in opposition to defendants’ motion to exclude Mr.
Putnam’s testimony. (Docket 77). Because the court’s ruling on
defendants’ motion to strike impacts the court’s evaluation of defendants’
motion to exclude Mr. Putnam’s testimony, the court must first address
defendants’ motion to strike.
DEFENDANTS’ MOTION TO STRIKE PLAINTIFF’S FILINGS
Defendants filed a motion to strike plaintiff’s memorandum and
affidavits in opposition to defendants’ motion to exclude the expert
testimony of Mr. Putnam. (Docket 77). Defendants’ motion to exclude Mr.
Putnam’s testimony was filed on December 21, 2012. (Docket 72).

Plaintiff’s memorandum and affidavits in opposition to defendants’ motion
to exclude Mr. Putnam’s testimony was filed on January 14, 2013. (Dockets
74, 75 & 76). Defendants submit plaintiff’s responsive pleadings were filed
outside the 21 calendar days required by D.S.D. Civ. L.R. 7.1B. (Docket
77). By defendants’ calculation, plaintiff’s responsive pleadings were due on
or before January 11, 2013. Id. at pp. 1-2. Defendants argue because
plaintiff’s responsive pleadings were not timely filed, the court “is clearly
within the Court’s discretion” to strike plaintiff’s submissions and rule on
defendants’ motion to exclude Mr. Putnam’s testimony as an unopposed
motion. Id. at p. 4.
The civil local rules of practice require that a party’s responsive
pleading must be filed “[o]n or before 21 calendar days after service of a
motion and brief . . . all opposing parties will serve and file with the clerk of
court a responsive brief . . . . in opposition to the motion.” D.S.D. Civ. L.R.
7.1B. If defendants’ motion to strike plaintiff’s responsive pleading were
considered in isolation based solely upon Local Rule 7.1B, defendants’
argument would have merit. However, the local rules must be read in
conjunction with the Federal Rules of Civil Procedure. “When a party . . .
must act within a specified time after service and service is made under
Rule 5(b)(2)(C), (D), (E) or (F), 3 days are added after the period would
otherwise expire under Rule 6(a).” Fed. R. Civ. P. 6(d). Service by electronic
means, including the court’s CM/ECF facilities, is included in Rule
5(b)(2)(E). See Fed. R. Civ. P. 5(b)(3). Rule 6(d) added three days to the

2

deadline for plaintiff’s response to defendants’ motion to exclude Mr.
Putnam’s testimony. Read together, D.S.D. Civ. LR 7.1B and Fed. R. Civ. P.
6(d) extended plaintiff’s deadline until January 14, 2013. Plaintiff’s filings
in opposition to defendants’ motion to exclude Mr. Putnam’s testimony were
timely filed.
Defendants’ motion to strike (Docket 77) is denied.
DEFENDANTS’ MOTION TO STRIKE MR. PUTNAM’S TESTIMONY
Defendants’ move to exclude the testimony of plaintiff’s expert
witness, Richard Putnam, under Fed. R. Civ. P. 702. (Docket 72 at pp. 2-3).
Defendants argue “Putnam’s testimony is not based on sufficient facts or
data and it is not the product of reliable principles and methods.” Id. at p.
4. Defendants argue Mr. Putnam “could not opine, with a reasonable degree
of professional certainty, whether his report actually reflects the sales
increase[s] that the Plaintiff would have incurred.” Id. “Damages for future
lost profits must be proven with a reasonable degree of certainty and
exactness and must be supported by specific, concrete evidence, rather than
speculation and conjecture.” Id. Based on these asserted infirmities,
defendants submit plaintiff’s expert “has not provided any opinions which
would be useful for a trier of fact.” Id. at p. 5.
Rule 702 of the Federal Rules of Evidence governs testimony by expert
witnesses and states:
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:

3

(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.
Fed. R. Evid. 702. Rule 703 describes the bases for expert testimony.
An expert may base an opinion on facts or data in the case that
the expert has been made aware of or personally observed. If
experts in the particular field would reasonably rely on those
kinds of facts or data in forming an opinion on the subject, they
need not be admissible for the opinion to be admitted. But if the
facts or data would otherwise be inadmissible, the proponent of
the opinion may disclose them to the jury only if their probative
value in helping the jury evaluate the opinion substantially
outweighs their prejudicial effect.
Fed. R. Evid.703.
As a preliminary matter, “[t]he proponent of the expert testimony
must prove its admissibility by a preponderance of the evidence.” Lauzon v.
Senco Products, Inc., 270 F.3d 681, 686 (8th Cir. 2001) (citing Daubert v.
Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 592 (1993); see also
Marmo v. Tyson Fresh Meats, Inc., 457 F.3d 748, 757-58 (8th Cir. 2006)
(same).

4

The trial judge “must ensure that any and all scientific testimony or
evidence admitted is not only relevant, but reliable.”1 Daubert, 509 U.S. at
589. The subject of an expert’s testimony must be scientific, technical, or
other specialized knowledge. Id. at 589-90. This requirement “establishes a
standard of evidentiary reliability.”2 Id. at 590; see also Kumho, 526 U.S. at
147 (noting it is the word “knowledge” in Rule 702 that “ ‘establishes a
standard of evidentiary reliability’ ”) (citing Daubert, 509 U.S. at 589-90).
Although Daubert deals specifically with expert testimony based on
scientific knowledge, the Supreme Court extended the principles in Daubert
to all expert testimony. Kumho Tire Co. Ltd. v. Carmichael, 526 U.S. 137,
141 (1999). “Proposed testimony must be supported by appropriate
validation–i.e., ‘good grounds,’ based on what is known.” Id.
Expert evidence is unreliable, and thus inadmissible, “if it is
speculative, unsupported by sufficient facts, or contrary to the facts of the
case.” United States v. Bailey, 571 F.3d 791, 803 (8th Cir. 2009); see also
United States v. Two Elk, 536 F.3d 890, 904 (8th Cir. 2008) (“ ‘[N]othing in

1

Rule 402 states, in pertinent part, “All relevant evidence is
admissible . . . .” Rule 401 defines “relevant evidence” as evidence which has
“any tendency to make the existence of any fact that is of consequence to the
determination of the action more probable or less probable than it would be
without the evidence.” Fed. R. Evid. 401.
2

An expert witness, unlike a lay witness, may offer opinions not based
on firsthand knowledge or observation. Daubert, 509 U.S. at 592. It is
presumed the expert’s opinion “will have a reliable basis in the knowledge and
expertise of his discipline.” Id.
5

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.’ ”) (quoting
Kudabeck v. Kroger Co., 338 F.3d 856, 861 (8th Cir. 2003)).
Rule 702 requires expert testimony to be relevant, that is, to
“ ‘assist the trier of fact to understand the evidence or to determine a fact in
issue.’ ” Daubert, 509 U.S. at 591. “Rule 702’s ‘helpfulness’ standard
requires a valid scientific connection to the pertinent inquiry as a
precondition to admissibility.” Id. at 591-92. The issue is one of “fit.” Id. at
591.
In sum, “[f]aced with a proffer of expert scientific testimony, then, the
trial judge must determine at the outset, pursuant to Rule 104(a),3 whether
the expert is proposing to testify to (1) scientific knowledge that (2) will
assist the trier of fact to understand or determine a fact in issue.” Id. at
592. “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.

3

The rule provides “[p]reliminary questions concerning the qualification of
a person to be a witness, the existence of a privilege, or the admissibility of
evidence shall be determined by the court, subject to the provisions of
subdivision (b) [pertaining conditional admissions]. In making its
determination it is not bound by the rules of evidence except those with respect
to privileges.” Fed. R. Evid. 104(a). “These matters should be established by a
preponderance of proof.” Daubert, 509 U.S. at 592, n. 10 (citing Bourjaily v.
United States, 483 U.S. 171, 175-76 (1987)).
6

To make this determination, a district court may evaluate one or all of
a number of non-exclusive factors. Those include whether a theory or
technique
(1) can be (and has been) tested;
(2) has been subjected to peer review and publication;
(3) [has a] known or potential error rate . . . and the existence
and maintenance of standards controlling the technique’s
operation . . . ; and
(4) is generally accepted by the scientific community.4
Daubert, 509 U.S. at 593-94. A district court may consider all or none of
these factors; a court should consider them in cases “where they are
reasonable measures of the reliability of expert testimony.” Kumho, 526
U.S. at 152. The applicability of these factors will depend on the particular
facts of the case. Id. at 150-51.
The United States Court of Appeals for the Eighth Circuit gives “great
latitude” to district courts in determining whether expert testimony satisfies
the requirements of Rule 702. Allen v. Brown Clinic, P.L.L.P., 531 F.3d 568,

4

“ ‘General acceptance’ is not a necessary precondition to the
admissibility of scientific evidence under the Federal Rules of Evidence, but the
Rules of Evidence–especially Rule 702–do assign to the trial judge the task of
ensuring that an expert’s testimony both rests on a reliable foundation and is
relevant to the task at hand.’ ” United States v. Rodriguez, 581 F.3d 775, 794
(8th Cir. 2009) (quoting Daubert, 509 U.S. at 597). “ ‘Pertinent evidence based
on scientifically valid principles will satisfy those demands.’ ” Id. (quoting
Daubert, 509 U.S. at 597).
7

573 (8th Cir. 2008) (citing Craftsmen Limousine, Inc. v. Ford Motor Co., 363
F.3d 761, 776 (8th Cir. 2004)). Regardless of what factors are evaluated,
the main inquiry is whether the proffered expert’s testimony is sufficiently
reliable. Id. at 574 (citing Unrein v. Timesavers, Inc., 394 F.3d 1008, 1011
(8th Cir. 2005) (“There is no single requirement for admissibility as long as
the proffer indicates that the expert evidence is reliable and relevant.”)).
Rule 702 requires a flexible approach. Daubert, 509 U.S. at 594. The
focus of Rule 702 “must be solely on principles and methodology, not on the
conclusions that they generate.” Id. at 595. “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.” Id. at 596; see also Two Elk, 536 F.3d at 903 (A
district court “ ‘must exclude expert testimony if it is so fundamentally
unreliable that it can offer no assistance to the jury, otherwise, the factual
basis of the testimony goes to the weight of the evidence.’ ”) (emphasis in
original) (quoting Larson v. Kempker, 414 F.3d 936, 940-41 (8th Cir. 2005)).
The Eighth Circuit reviews under an abuse of discretion standard a
district court’s ruling admitting expert testimony. United States v. Eagle,
515 F.3d 794, 800 (8th Cir. 2008); see also Kuhmo, 526 U.S. at 152 (A
“court of appeals is to apply an abuse-of-discretion standard when it

8

‘review[s] a trial court’s decision to admit or exclude expert testimony.’ ”)
(quoting General Elec. Co. v. Joiner, 522 U.S. 136, 138-39 (1997)).
Mr. Putnam has been a certified public accountant since 2005.
(Docket 75 at ¶ 1). His work includes preparing “accounting projections of
lost profits and income for businesses for the past 9 years.” Id. at ¶ 3. The
calculations he prepared “in this case are based on standard accounting
principles.” Id. “In making my projections in this case, I utilized the
percentages of growth in sales, actual profits, and other historical data
(such as cost of goods sold, number of days open, and other historical
average). This is consistent with standard accounting principles.” Id. at
¶ 4. Mr. Putnam’s testimony is that his opinions “are based on the
application of standard accounting principles for lost profits to the facts and
circumstances of this case.” Id. at ¶ 5. He represents being “particularly
familar” with plaintiff’s business since he has “done their accounting and
tax work since 2007 and [is] familiar with all their relevant historical tax
and accounting data.” Id. Contrary to defendants’ argument attacking his
calculations, Mr. Putnam testified “[i]t would not be appropriate to consider
income tax consequences or Medicare/Social Security taxes in calculating
lost profits because these are not deductions and do not reduce net profit;
rather, social security and Medicare taxes are based on net profit.” Id. at
¶ 6.

9

Defendants also attack Mr. Putnam’s qualifications to testify as an
expert witness because of “the information not considered by” him. (Docket
80 at p. 2). They argue the witness “did not consider the difference in the
Plaintiff’s net profits as shown on his Schedule C . . . the attendance figures
for future events at the Civic Center . . . [and] whether attendance increased
at events from 2010 to 2011.” Id.
“[T]he factual basis of an expert’s opinion generally relates to the
weight a jury ought to accord that opinion. . . . Thus, unless the factual or
methodological basis for the testimony is fundamentally unreliable, its
admission is not an abuse of discretion.” Margolies v. McCleary, Inc., 447
F.3d 1115, 1121 (8th Cir. 2006). Challenges to the factual basis for an
expert’s opinion does not generally affect its admissibility. “As a general
rule, the factual basis of an expert opinion goes to the credibility of the
testimony, not the admissibility, and it is up to the opposing party to
examine the factual basis for the opinion in cross-examination. Only if the
expert’s opinion is so fundamentally unsupported that it can offer no
assistance to the jury must such testimony be excluded.” Children’s
Broadcasting Corp. v. Walt Disney Co., 357 F.3d 860, 865 (8th Cir. 2004)
(citing Bonner v. ISP Technologies, Inc., 259 F.3d 924, 929-30 (8th Cir.
2001) (quoting Hose v. Chicago Northwestern Transportation Co., 70 F.3d
968, 974 (8th Cir. 1996)). Whether Mr. Putnam’s conclusions are accurate

10

or should be accepted by the jury may be tested by vigorous crossexamination. Moran v. Ford Motor Co., 476 F.2d 289, 291 (8th Cir. 1973).
The court finds Mr. Putnam’s proposed testimony qualifies under Fed.
R. Evid. 702. Defendants’ motion (Docket 72) is denied.
ORDER
Based on the above analysis, it is hereby
ORDERED that defendants’ motion to strike (Docket 77) is denied.
IT IS FURTHER ORDERED that defendants’ motion to exclude Mr.
Putnam’s testimony (Docket 72) is denied.
Dated March 18, 2014.
BY THE COURT:
/s/ Jeffrey L. Viken
JEFFREY L. VIKEN
CHIEF JUDGE

11