Goldberg v. 401 N. Wabash Venture LLC
| Decision Date | 18 January 2013 |
| Docket Number | Case No. 09 C 6455 |
| Parties | JACQUELINE GOLDBERG, Plaintiff, v. 401 NORTH WABASH VENTURE LLC and TRUMP CHICAGO MANAGING MEMBER LLC, Defendants. |
| Court | U.S. District Court — Northern District of Illinois |
AMY J. ST. EVE, District Court Judge:
On June 4, 2010, Jacqueline Goldberg ("Goldberg") filed an Amended Complaint in this case against 401 North Wabash Venture LLC and Trump Chicago Managing Member LLC (collectively, the "Trump Defendants") asserting claims against both Trump Defendants under the Illinois Condominium Property Act, the Illinois Consumer Fraud and Deceptive Business Practices Act, Illinois Securities Act, and the Federal Interstate Land Sales Full Disclosure Act, and asserting a single claim for breach of contract against Defendant 401 North Wabash Venture LLC. The Court granted summary judgment for the Trump Defendants on the Illinois Securities Act claim (Count IV), but denied summary judgment as to the other claims. Before ruling on the summary judgment motion, the Court addressed the Trump Defendant's motion ("Original Daubert Motion") to exclude the testimony of Goldberg's expert, Robert Levin ("Levin") to the extent that his opinions related to the pending summary judgment. (R. 160, Daubert Op.) The Court addressed five of Levin's opinions and granted Trump Defendant's motion in part and denied it in part without prejudiceto renew after the summary judgment ruling. (Id.)
The Court set the case for trial May 13, 2013. (R. 174.) In anticipation of trial, the Trump Defendants filed a renewed motion to exclude the opinions and testimony by Levin which the Court did not address in ruling on the Original Daubert Motion. The Court held a Daubert hearing on January 9, 2013, during which the parties had the opportunity to conduct direct and cross examination of Levin. For the following reasons, the Court grants the motion in part and denies it in part.
This action arises out of a dispute over the sale of two hotel condominium units in the Trump International Hotel and Tower in Chicago, Illinois. Goldberg "claims that the Trump defendants unlawfully lured her into signing Purchase Agreements by misrepresenting that [hotel condominium units] included the ownership and control of [] condominium common elements the hotel property and business operations, such as the ball rooms and food beverage operation." (R. 178, Pl.'s Resp. at 1.) The Court presumes familiarity with the factual and procedural background of this litigation, and incorporates herein by reference the background information set forth in the Court's written opinions dated August 24, 2012 (R. 160) and October 15, 2012 (R. 170).
"The admissibility of expert testimony is governed by Federal Rule of Evidence 702 and the Supreme Court's opinion in Daubert[.]" Lewis v. CITGO Petroleum Corp., 561 F.3d 698, 705 (7th Cir. 2009). "The district court functions as a gatekeeper with respect to testimony proffered under Rule 702 to ensure that the testimony is sufficiently reliable to qualify foradmission." Mihailovich v. Laatsch, 359 F.3d 892, 918 (7th Cir. 2004) (citing Kumho Tire Co. v. Carmichael, 526 U.S. 137, 147, 119 S. Ct. 1167, 143 L. Ed. 2d 238 (1999)); see also Lapsley v. Xtek, Inc., 689 F.3d 802, 804 (7th Cir. 2012) () (quoting Fed. R. Evid. 702)). Whether to admit expert testimony rests within the discretion of the district court. See General Elec. Co. v. Joiner, 522 U.S. 136, 142, 118 S. Ct. 512, 139 L. Ed. 2d 508 (1997); Lapsley, 689 F.3d at 810 () (quoting Bielskis v. Louisville Ladder, Inc., 663 F.3d 887, 894 (7th Cir. 2011)). "The proponent of the expert bears the burden of demonstrating that the expert's testimony would satisfy the Daubert standard" by a preponderance of the evidence. Lewis, 561 F.3d at 705.
Under Rule 702, "[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: (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; see also Ortiz v. City of Chi., 656 F.3d 523, 526 (7th Cir. 2011).
District courts employ a three-part analysis before admitting expert testimony: (1) the expert must be qualified as an expert by knowledge, skill, experience, training, or education; (2)the expert's reasoning or methodology underlying his testimony must be scientifically reliable; and (3) the expert's testimony must assist the trier of fact in understanding the evidence or to determine a factual issue. See Myers v. Ill. Cent. R.R. Co., 629 F.3d 639, 644 (7th Cir. 2010). "The purpose of the Daubert inquiry is to scrutinize proposed expert witness testimony to determine if it has "the same level of intellectual rigor that characterizes the practice of an expert in the relevant field" so as to be deemed reliable enough to present to a jury." Lapsley, 689 F.3d at 805 (quoting Kumho Tire Co., 526 U.S. at 152).
In his expert report, Levin disclosed ten summary opinions. (R. 173-1, Defs.' Mem., Ex. A, Levin Report at 7-9.) The Trump Defendants seek to exclude testimony on five of those opinions, specifically Opinions One, Two, Four, Five and Eight.1 (R. 173, Defs.' Mem. at 6-13.)
The Trump Defendants seek to exclude Opinions One and Two, which describe what Levin believes the Trump Tower Chicago Property Reports and marketing materials "were designed to" accomplish. In relevant part, Opinion One states:
. . . the Trump Tower Chicago Property Reports and marketing materials . . . were designed to lead reasonably prudent buyers to conclude and, in fact, reasonably prudent buyers would conclude, that they were purchasing and would own as condominium property an undivided percentage interest in a luxury hotel which was operated on behalf of the owners by the Trump Organization as a Trump-branded luxury hotel.
(Levin Report at 4 (emphasis added).) Opinion Two states:
. . . the Trump Tower Chicago Property Reports and marketing materials . . . were designed to lead reasonably prudent buyers to conclude and, in fact, reasonably prudent buyers would conclude, that the undivided percentage ownership interest they were purchasing included the ownership and operation of the significant features and amenities of the Trump-branded luxury hotel, such as the meeting rooms, function rooms and ballrooms, the food and beverage operations to service the hotel, and revenue generated from the luxury hotel operations, such as Spa Services and Valet Parking.
(Id (emphasis added).)
The Trump Defendants object to these two opinions on three grounds: (1) these opinions are inadmissible because they relate to the Trump Defendants' state of mind; (2) Levin is not qualified to express these opinions; and (3) these opinions are unreliable because Levin fails to explain how his experiences, when applied to the facts, compel his conclusions. (Defs.' Mem. at 7-10.) The Court finds that these two opinions are admissible in part.
Opinions One and Two, as drafted, are not state of mind opinions, as Levin specifically states in his report. (Levin Report at 3.) Rather, Levin provides opinions about the significance of information contained in and portrayed by the marketing materials and property reports. Courts regularly permit expert testimony pertaining to the designed effect of marketing materials on a potential consumer. See, e.g., Merisant Co. v. McNeil Nutritionals, LLC, 515 F. Supp. 2d 509, 541 (E.D. Pa. 2007) (); Schwab v. Philip Morris USA, Inc., 2005WL 2401647, at *4-5 (E.D.N.Y. Sept. 29, 2005) (); see also Agrigenetics, Inc. v. Pioneer Hi-Bred Intern., Inc., No. 08-cv-802-TWP-TAB, 2010 WL 4683936, at *5 (S.D. Ind. Nov. 10, 2010) (). Additionally, Levin may testify about the practices within the industry regarding what type of information condominium developers put in these materials and for what purposes. In other words, Levin can testify regarding how developers design these materials, and opine on the significance of the Trump materials having been designed in a certain way, based on the customs and practices of the industry, without reaching the issue of the Trump Organization's intent when designing the materials.
Notably, the cases which the Trump Defendants cite for the proposition that "state of mind and intent are not appropriate areas of expert opinion" are inapposite as they do not relate to experts opining on the effect marketing materials are designed to have. (See Defs.' Mem. at 7 (...
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