Agsouth Genetics, LLC v. Ga. Farm Servs., LLC
| Decision Date | 24 October 2013 |
| Docket Number | CASE NO.: 1:09-CV-186 (WLS) |
| Parties | AGSOUTH GENETICS, LLC, et al., Plaintiffs, v. GEORGIA FARM SERVICES, LLC, et al., Defendants. |
| Court | U.S. District Court — Middle District of Georgia |
The Court orally ruled on the parties' pending motions: Defendant's Oral Motion to Strike Expert Testimony and the parties' Oral Motions for Judgments as a Matter of Law. The Court, as stated, enters this written order to fully state the reasons and basis of its oral rulings. For the following reasons, Defendant's Oral Motion for Judgment as a Matter of Law as to Plaintiffs' PVPA, trademark infringement, and false designation claims are DENIED, Plaintiffs' Oral Motion for Judgment as a Matter of Law as to Defendant's liability under the PVPA is DENIED, and Plaintiffs' Oral Motion for Judgment as a Matter of Law as to Defendant's tortious interference counterclaim is GRANTED. The oral rulings, by reference, are made a part of this written order.
On July 23, 2009, Plaintiffs AGSouth Genetics, LLC ("AGSouth") and University of Georgia Research Foundation, Inc. ("UGARF") filed a Complaint against Defendant Georgia Farm Services, LLC ("GFS") and others in the Athens Division of this Court, alleging violations of the Plant Variety Protection Act ("PVPA") and the Lanham Act. (Doc. 1.) District Court Judge Clay D. Land granted a Motion to Change Venue onDecember 9, 2009, and transferred the matter to this division. (Doc. 24.) Following discovery and an unsuccessful Motion for Summary Judgment by Plaintiffs, trial in this matter began on October 11, 2013. (Docs. 35, 109, 168.)
Among the witnesses tendered by Plaintiffs was Donald Davis, further tendered, and permitted to testify, as an expert witness. (Doc. 172.) Mr. Davis testified on the matter of damages under the PVPA. He testified that he had used a formula he authored to determine a reasonable royalty, purporting to use the factors set out in Georgia-Pacific Corp. v. U.S. Plywood Corp., 243 F. Supp. 500 (S.D.N.Y. 1965). Following this testimony, Defendant made an oral motion to strike the expert testimony, claiming that it did not comport with the requirements of Federal Rule of Evidence 702.
Defendant moved for a judgment as a matter of law on Plaintiffs' PVPA claim claiming that no evidence had been introduced to suggest that the protected seeds had been propagated, or that Defendant had the requisite knowledge for damages under the PVPA. Also, Defendant claimed that the evidence was insufficient to prove willfulness under the PVPA by clear and convincing evidence. Defendant argued that the expert's testimony should be stricken and, without the expert's testimony, there was no evidence in the record demonstrating damages.
Defendant moved for judgment as a matter of law on Plaintiffs' Lanham Act claims contending there was no evidence that the seeds were part of interstate commerce or to suggest likelihood of confusion, the marking requirement was not met, and no evidence of Lanham Act damages had been introduced. Plaintiffs moved for judgment as a matter of law as to PVPA infringement liability, claiming that counsel for Defendant's opening statement and Mr. Wingate's testimony at trial constituted admissions of PVPA infringement as to at least 320 bags of AGS 2000. Also, Plaintiffsargued that they were entitled to judgment as a matter of law on Defendant's tortious interference claim because Plaintiffs' actions were privileged.
The Supreme Court made "abundantly clear" in Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 589 n.7, 597 (1993), that Federal Rule of Evidence 702 ("Rule 702") compels a District Court to perform the critical gatekeeping function concerning the admissibility of expert scientific evidence. Rule 702 requires the same gatekeeping function for the admissibility of technical expert evidence. Kuhmo Tire Co. v. Carmichael, 526 U.S. 137, 147 (1999); United States v. Frazier, 387 F.3d 1244, 1260 (11th Cir. 2004).
The District Court's gatekeeping function " 'inherently require[s] the trial court to conduct an exacting analysis' of the foundations of expert opinions to ensure they meet the standards for admissibility under Rule 702." Frazier, 387 F.3d at 1260 (quoting McCorvey v. Baxter Healthcare Corp., 298 F.3d 1253, 1257 (11th Cir. 2002)) (emphasis and alteration in original). Courts in the Eleventh Circuit "engage in a rigorous three-part inquiry" in determining the admissibility of expert testimony under Rule 702. Id. Trial courts must consider whether:
(1) the expert is qualified to testify competently regarding the matters he intends to address; (2) the methodology by which the expert reaches his conclusions is sufficiently reliable as determined by the sort of inquiry mandated in Daubert; and (3) the testimony assists the trier of fact, through the application of scientific, technical, or specialized expertise, to understand that evidence or to determine a fact in issue.
Id. (quoting City of Tuscaloosa v. Harcros. Chems., Inc., 158 F.3d 548, 562 (11th Cir. 1998).
Regardless of the overlap among the three requirements of qualification, reliability, and helpfulness, "they remain distinct concepts and the courts must take care not to conflate them." Id. Furthermore, "[t]he burden of establishing qualification, reliability, and helpfulness rests on the proponent of the expert opinion." Id. Ultimately, the reliability inquiry must be tied to the particular facts of the case. Kuhmo Tire Co., 526 U.S. at 150 (internal citations omitted). Equally important to the gate-keeping function is a determination of whether the proposed testimony is relevant. Daubert, 509 U.S. at 591. Relevant testimony is that testimony that "logically advances a material aspect" of a party's case. Allison v. McGhan Medical Corp., 184 F.3d 1300, 1312 (11th Cir. 1999).
A witness may be qualified as an expert by reason of knowledge, skill, experience, training, or education. FED. R. EVID. 702. Furthermore, "[d]isputes as to the strength of [a witness's] credentials, faults in his use of differential etiology as a methodology, or lack of textual authority for his opinion, go to the weight, not the admissibility, of his testimony." McCurdy v. Ford Motor Co., No. 1:04-CV-155, 2006 WL 2793167, at *4 (M.D. Ga. Sept. 26, 2006) (quoting McCullock v. H.B. Fuller Co., 61 F.3d 1038, 1044 (2d Cir. 1995)). "Vigorous cross-examination, presentation of contrary evidence, and contrary instruction on the burden of proof are the traditional and appropriate means of attacking [debatable] but admissible evidence." Maiz v. Virani, 253 F.3d 641, 666 (11th Cir. 2001). The Court's role in addressing a Daubert motion "is not intended to supplant the adversary system or the role of the jury." Allison, 184 F.3d at 1311.
Defendant claims that Mr. Davis's methodology has not been accepted in the scientific community, will not assist the trier of fact, and is not the product of reliableprinciples and methods. Defendant argues that Mr. Davis did not link damages to the infringing acts, misinterpreted the law, and therefore produced an unreliable result.
Mr. Davis is a certified public accountant, licensed by the Arkansas, Kansas, and Missouri State Boards of Accountancy. (Doc. 93-1 at 28.) He graduated from the University of Central Arkansas with a Bachelor's Degree in Business Administration, with an emphasis in accounting in 1987. (Id. at 29.) He has worked in accounting since that time, specializing in, among other things, agriculture. (Id.) He has previously testified in matters involving the PVPA. (Id. at 31.) Based on this background and experience, the Court finds that Mr. Davis is qualified to testify as an expert as to damages under the PVPA. See FED. R. EVID. 702.
Mr. Davis claims that he based his reasonable royalty calculation on the fifteen factors deemed relevant by Georgia-Pacific Corp. v. U.S. Plywood Corp., 243 F. Supp. 500 (S.D.N.Y. 1965), referred to as the Georgia-Pacific factors. Mr. Davis started his analysis based on a retail value of $18.00 per bag of AGS 2000, and asserts that the retail value is based on the assumption that the parties are willing to settle disputes that arise in relation to that price. When there is no such meeting of the minds, Mr. Davis's reasoning continues, the reasonable royalty must compensate Plaintiffs for the damages suffered in connection with the illegal sale, offer for sale, exchange, or conditioning of AGS 2000. Mr. Davis concludes that, "at minimum Plaintiffs damages, or minimum royalty is equal to the additional gross value gained illegally as compared to generic public or lesser value seed," which is $815.40 per bag. (Doc. 93-1 at 15-16.) Mr. Davis asserts that this number does not take into consideration the nature of seed which permits repeated and exponential infringements. (Id. at 16.)
Mr. Davis arrived at the reasonable royalty of $815.40 by determining the value of a bag of wheat seed other than AGS 2000 and the value of a bag of AGS 2000, based on the expected yields of those seeds in the relevant geographical region. The expected yield of a bag of wheat other than AGS 2000 was determined by Mr. Davis to be, on average, 59.5 bushels per acre, at one acre per bag. The alleged expected yield of a bag of AGS 2000 wheat was determined to be an average of 104.8 bushels, which is an additional 45.3 bushels per acre than that produced by the average wheat seed that is not AGS 2000.
Defendant argues that this analysis should be excluded from consideration by the jury because (1) Mr. Davis' theory has never been accepted by any circuit court, (2) the theory has never been published, (3) Mr. Davis was denied the opportunity to conduct a seminar on his theory, and (4) the theory is contrary to controlling law, namely Georgia-Pacific because the reasonable royalty rate must be based on a hypothetical negotiation between a will...
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