Massimo Motor Sports LLC v. Shandong Odes Industry Co et al

Filing 272

MEMORANDUM OPINION AND ORDER granting in part 148 Motion to Exclude; denying 179 Motion to Clarify/Amend the Court's Scheduling Order and to Strike Christopher Earle's 7/14/2023 Expert Reports. (Ordered by Judge Brantley Starr on 2/6/2024) (axm)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
MASSIMO MOTOR SPORTS, LLC,
Plaintiff,
v.
SHANDONG ODES INDUSTRY
CO., LTD., et al.,
Defendants.

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Civil Action No. 3:21-CV-2180-X

MEMORANDUM OPINION AND ORDER
Before the Court are Plaintiff Massimo Motor Sports, LLC’s motion to exclude
Christopher Earle’s expert testimony and motion to clarify/amend the Court’s
scheduling order and strike Christopher Earle’s July 14, 2023 expert reports. (Docs.
148, 179). Having carefully considered the motions, the underlying facts, and the
applicable caselaw, the Court GRANTS IN PART and DENIES IN PART
Massimo’s motion to exclude (Doc. 148) and DENIES the motion to clarify/amend the
Court’s scheduling order and strike Christopher Earle’s July 14, 2023 expert reports
(Doc. 179).
I. Background
The motions at issue here concern expert reports from Christopher Earle,
Defendants Lil Pick Up, Inc., Nathan D. Threet, Shandong Odes Industry Co., Ltd.,
14078 Meridian Parkway, Inc., SMG Distribution & Associates, Inc., and Odes USA
Inc. (Cal.)’s damages expert. On November 15, 2022, the parties exchanged their
experts’ opening reports regarding damages.
1

On January 17, 2023, the parties

exchanged their rebuttal expert reports. On April 4, 2023, the defendants served
Earle’s first amended supplemental report, and on April 17, 2023, Massimo served
its supplemental report and supplemental rebuttal report. (Earle’s opening report on
November 15, 2022, rebuttal report on January 17, 2023, and first amended
supplemental report on April 4, 2023, will be collectively referred to as “Earle’s Initial
Reports”). The Court’s scheduling orders required the parties to complete discovery
by May 26, 2023 and file any Daubert motions by July 21, 2023.
Then things went sideways.

On May 24, 2023 and May 26, 2023, the

defendants produced to Massimo nearly 500 new documents containing financial
data. Massimo deposed Earle on May 31, 2023. On July 14, 2023, defendants served
Massimo with Earle’s seconded amended report and a new rebuttal report (“Earle’s
July 2023 Reports”). Massimo did not have the opportunity to depose Earle on these
new reports, and it believes they are untimely. But the defendants contend that the
Court’s scheduling order permitted exchanging reports until September 6, 2023.
On July 21, 2023, Massimo filed a motion to exclude, in Earle’s Initial Reports,
(1) Earle’s affirmative testimony on Shandong’s breach of contract counterclaim and
(2) Earle’s rebuttal testimony regarding the defendants’ costs associated with selling
vehicles that Massimo alleges infringe its trademarks.

Massimo then filed a motion

to strike Earle’s July 2023 Reports contending that they are untimely and based on
entirely new opinions and new documents. The motions are ripe for review.

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II. Legal Standard
Federal Rule of Evidence 702 governs the admissibility of expert testimony as
evidence. Rule 702 permits opinion testimony from a witness “qualified as an expert
by knowledge, skill, experience, training, or education” if the expert’s knowledge will
assist the trier of fact, and (1) “the testimony is based on sufficient facts or data;”
(2) “the testimony is the product of reliable principles and methods;” and (3) “the
expert has reliably applied the principles and methods to the facts of the case.”1 As
a gatekeeper, this Court must permit only reliable and relevant testimony from
qualified witnesses to be admitted as expert testimony. 2 The party offering the expert
testimony has the burden of proof, by a preponderance of evidence, to show that the
testimony is reliable and relevant. 3
Expert testimony is relevant if it assists the trier of fact in understanding the
evidence or determining a fact in issue.4 Federal Rule of Evidence 401 further
clarifies that relevant evidence is evidence that has “any tendency to make a fact
more or less probable than it would be without evidence” and “is of consequence in
determining the action.”5

1

FED. R. EVID. 702.

Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579, 589 (1993); Wilson v. Woods, 163 F.3d
935, 937 (5th Cir. 1999).
2

3

Mathis v. Exxon Corp., 302 F.3d 448, 459–60 (5th Cir. 2002).

4

Daubert, 509 U.S. at 591.

5

See Mathis, 302 F.3d at 460 (applying Rule 401 to expert testimony).

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Expert testimony is reliable if “the reasoning or methodology underlying the
testimony is scientifically valid.” 6 Such testimony must be “more than subjective
belief or unsupported speculation.” 7 In other words, this Court need not admit
testimony “that is connected to existing data only by the ipse dixit of the expert.” 8
The Court also does not need to admit testimony based on indisputably wrong facts. 9
In conducting its analysis, the Court focuses on the reasonableness of the expert’s
approach regarding the matter to which his testimony is relevant and not on the
conclusions generated by the expert’s methodology. 10 The Court normally analyzes
questions of reliability using the five nonexclusive factors known as the Daubert
factors. 11
III. Analysis
The Court must first address the timeliness issue regarding Earle’s July 2023
Reports.

Unfortunately, the Court’s prior amended scheduling order placed the

parties in a quagmire—expert disclosures were due by September 6, 2023, well after
the deadline for motions to strike (July 21, 2023) and the close of discovery (May 26,
2023). The Court finds in fairness it must allow Massimo the opportunity to redepose
Knight v. Kirby Inland Marine Inc., 482 F.3d 347, 352 (5th Cir. 2007) (citing Daubert, 509
U.S. at 592–93).
6

7

Daubert, 509 U.S. at 590.

8

Gen. Elec. Co. v. Joiner, 522 U.S. 136, 146 (1997).

9

Guillory v. Domtar Indus. Inc., 95 F.3d 1320, 1331 (5th Cir. 1996).

10

Daubert, 509 U.S. at 595; Kumho Tire Co. v. Carmichael, 526 U.S. 137, 153–54 (1999).

11 The five nonexclusive Daubert factors are: (1) whether the expert’s technique can be or has
been tested; (2) whether the method has been subjected to peer review and publication; (3) the known
or potential rate of error of a technique or theory when applied; (4) the existence and maintenance of
standards and controls; and (5) the degree to which the technique or theory has been generally
accepted in the scientific community. Daubert, 509 U.S. at 593–94.

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Earle on Earle’s July 2023 Reports. Massimo may then file any motion to strike or
exclude after it has had the opportunity to depose Earle, and Massimo’s own expert
may serve a rebuttal report to Earle’s second amended report.

Thus, the Court

DENIES motion to clarify/amend the Court’s scheduling order and strike
Christopher Earle’s July 14, 2023 expert reports. (Doc. 179).
Turning to Massimo’s motion to exclude, the parties agree that Earle’s July
2023 Reports materially altered his Initial Reports. In fact, the defendants contend
that these new reports moot a lot of the issues raised in Massimo’s motion to exclude
because Earle’s July 2023 Reports address errors raised in Massimo’s motion and are
based on new information and documents.

Massimo’s motion to exclude first

addresses Earle’s affirmative testimony on Shandong’s breach of contract
counterclaim. Specifically, Massimo argues that the Court should exclude (1) Earle’s
relief from royalty opinion because it is irrelevant and unreliable, and (2) Earle’s
unjust enrichment calculation because is not available for breach of contract. Then,
Massimo’s motion seeks to exclude Earle’s rebuttal testimony as to the defendants’
costs associated with selling products that Massimo alleges infringed its trademarks.
First, regarding Earle’s relief from royalty calculation, the parties agree that
Earle’s July 2023 Reports substantially altered his relief from royalty opinion in the
Initial Reports. In light of this, the Court concludes that Earle’s relief from royalty
opinion in his Initial Reports is superseded, not supplemented, by his relief from
royalty opinions in Earle’s July 2023 Reports. Therefore, the Court finds Massimo’s
motion to exclude Earle’s relief from royalty opinion as moot. As discussed above,

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Massimo may redepose Earle on Earle’s July 2023 Reports and subsequently file a
motion to strike or exclude, if it chooses to do so.
Second, Earle’s report analyzes the defendants’ damages for their breach-ofcontract counterclaim using an unjust enrichment calculation—Massimo’s estimated
profits from sales that allegedly occurred because of Massimo’s improper use of the
defendants’ confidential information. The issue is whether Texas law permits this
disgorgement remedy for breach-of-contract claims as restitution damages even
though it prohibits unjust enrichment claims when an express contract covers the
parties’ dispute. The Fifth Circuit held that the Supreme Court of Texas would reject
a disgorgement remedy for a breach-of-contract claim. 12

It explained that the

universal rule for measuring breach-of-contract damages is compensation for the
claimant’s actual losses. 13 Conversely, disgorgement looks to divest the wrongdoer of
its ill-gotten gains, not to compensate the victim. 14 Thus, disgorgement is not a viable
remedy for the defendants’ breach-of-contract counterclaim here.

The Court

therefore GRANTS IN PART Massimo’s motion to exclude Earle’s expert testimony
as it pertains to his unjust enrichment methodology for the defendants’ breach-ofcontract counterclaim. (Doc. 148).
Finally, regarding Earle’s rebuttal testimony as to the defendants’ costs
associated with selling products that Massimo alleges infringed its trademarks, the

12

Hoffman v. L & M Arts, 838 F.3d 568, 585 (5th Cir. 2016).

13

Id.

14

Id.

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defendants respond that Earle’s July 2023 Reports supplement and correct the issues
Massimo raises here because the new reports are based on cost data for all 20 of the
accused products, not the partial data Massimo seeks to exclude. Massimo also
agrees that Earle’s July 2023 Reports addressing this issue are based on new
information. As with the reasonable royalty opinion, the Court finds Massimo’s
motion to exclude Earle’s testimony as to the defendants’ costs associated with selling
products that Massimo alleges infringed its trademarks as moot based on his opinions
in Earle’s July 2023 Reports. As discussed above, Massimo may redepose Earle on
Earle’s July 2023 Reports and subsequently file a motion to strike or exclude, if it
chooses to do so.
IV. Conclusion
The Court DENIES Massimo’s motion to clarify/amend the Court’s scheduling
order and strike Christopher Earle’s July 14, 2023 expert reports.

(Doc. 179).

Additionally, the Court GRANTS IN PART Massimo’s motion to exclude Earle’s
unjust enrichment methodology for the defendants’ breach-of-contract counterclaim
and otherwise DENIES the motion. (Doc. 148). Massimo may redepose Earle on
Earle’s July 2023 Reports and may subsequently file a motion to strike or exclude.15
IT IS SO ORDERED this 6th day of February, 2024.

___________________________________
BRANTLEY STARR
UNITED STATES DISTRICT JUDGE
15 The deadlines for these depositions and motions are set forth in the Court’s order resolving
the defendants’ motion to strike and exclude certain expert opinions of Bryan Van Uden.

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