Hard Candy, LLC v. Anastasia Beverly Hills, Inc.

• Decision Date: 13 January 2018
• Docket Number: CASE NO.: 16-21203-CIV-WILLIAMS/SIMONTON
• Parties: HARD CANDY, LLC, a Florida Limited Liability Company Plaintiff, v. ANASTASIA BEVERLY HILLS, INC., Defendant.
• Court: U.S. District Court — Southern District of Florida

HARD CANDY, LLC, a Florida Limited Liability Company Plaintiff, v. ANASTASIA BEVERLY HILLS, INC., Defendant.

CASE NO.: 16-21203-CIV-WILLIAMS/SIMONTON

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA

January 13, 2018

SEALED ORDER ON PLAINTIFF'S MOTION TO EXCLUDE THE EXPERT OPINION TESTIMONY AND REPORT OF CHRISTOPHER A. MARTINEZ

This matter came before the Court upon Plaintiff's Motion to Exclude the Expert Opinion Testimony and Report of Christopher A. Martinez, (sealed), ECF. No. [44]. The Defendant has filed a Response to the Motion, ECF No. [54] (sealed), and the Plaintiff has filed a Reply, (sealed) ECF No. [64]. The Honorable Kathleen M. Williams, United States District Judge, has referred the Motion to the undersigned Magistrate Judge, ECF No. [115]. For the following reasons, the Motion to Exclude is Denied.

I. BACKGROUND

This trademark infringement action was initiated when Plaintiff Hard Candy, LLC, "Hard Candy" filed a four-count Complaint against Defendant Anastasia Beverly Hills, Inc., ("Anastasia") alleging that Anastasia attempted to confuse purchasers of beauty cosmetics by using, without permission, Plaintiff's registered trademark for "Hard Candy" to describe one of the Defendant's cosmetic products, ECF No [1] at 1-3. Specifically, Plaintiff contends that the Defendant has sold a product entitled "Glow Kit" which bears the mark "Hard Candy" throughout the United States, as well as, on the internet.¹ In the Complaint, Plaintiff alleges Federal Trademark Infringement, 15 U.S.C. §§ 1114-1117, the Lanham Act § 32 (Count I); Federal Unfair Competition, False Designation of Origin and False Description, 15 U.S.C. § 1125(a); Lanham Act § 43(a) (Count II); Common Law Trademark Infringement (Count III); and, Common Law Unfair Competition (Count IV). In the Complaint, Plaintiff sought to recover actual, general, special and statutory damages, including Defendant's profits, if any, trebled pursuant to 15 U.S.C. 1117 § (b), or enhanced pursuant to 15 U.S.C. § 1117(c)(2), ECF No. [1] at 14.

II. MOTION TO EXCLUDE

In the Motion to Exclude, the Plaintiff seeks to exclude the testimony of Christopher Martinez, the Defendant's damages expert. The Plaintiff contends that Mr. Martinez, a CPA, who Defendant intends to call as a damages expert at trial, should be excluded from testifying because: 1) his opinions are directly inconsistent with Plaintiff's legal entitlement to Defendant's profits in a trademark infringement action, and 2) Mr. Martinez seeks to offer testimony that is beyond his expertise, is conclusory and unsupported by research or investigation, and is based on improper methodologies, ECF No. [44] at 2.² As to the expert's methodology, the Plaintiff specifically takes issue with Mr. Martinez's reduction of the calculation of the Defendant's profits based upon the configuration of the make-up kit, and based upon a royalty agreement between thePlaintiff and a third party who is not involved in this action.

In Response to the Motion to Exclude, Defendant Anastasia contends that if the Plaintiff proves liability at trial, it apparently seeks to obtain every dollar of profits that Anastasia earned on the "Gleam Glow Kit". ECF No. [54] at 5. Defendant contends that its expert, Christopher Martinez, evaluated and quantified the economic remedies due to Plaintiff by calculating: 1) Anastasia's costs on the Gleam Glow Kit; 2) whether it makes economic sense to award any of the profits Anastasia earned by determining whether those profits were attributable to the use of the name "Hard Candy"; and 3) the "maximum" profits potentially attributable to Anastasia's use of the shade name "Hard Candy." The Defendant thus argues that Mr. Martinez's opinions were not in conflict with the law and properly provided a reliable profit analysis, including considering apportionment and the economic equities of the case, for purposes of assessing Plaintiff's damages under the Lanham Act.

In Reply, the Plaintiff contends that Mr. Martinez admitted that he was not testifying about equities of an award of Defendant's profits to the Plaintiff and further contends that such a determination should be made by the Court and not an expert, in any event, ECF No. [64] at 1. The Plaintiff further reasserts that Mr. Martinez's opinion on attribution of profits is unreliable for the same reasons that the Plaintiff advanced in its Motion to Exclude.

III. LEGAL FRAMEWORK

A. Admissibility of Expert Testimony

Federal Evidence Rule 702 governs the admission of expert testimony in federal court, and provides:

If scientific, technical, or other specialized knowledge willassist 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 principles and methods, and (3) the witness has applied the principles and methods reliably to the facts of the case.

District courts have a duty under Rule 702 to "ensure that any and all scientific testimony or evidence admitted is not only relevant, but reliable." Wilson v. Taser Int'l, Inc., 303 F. App'x 708, 714 (11th Cir. 2008) (citing Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993)). Thus, a Court performs a "gatekeeping role" regarding admissibility of expert testimony, Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993)).

The Eleventh Circuit has set out three requirements that an expert must meet before his or her opinions may be admitted. Hughes v. Kia Motors Corp., 766 F.3d 1317, 1328 (11th Cir. 2014). First, the expert must be qualified on the matter about which he or she intends to testify. Id., citing City of Tuscaloosa v. Harcros Chemicals, Inc., 158 F.3d 548, 562 (11th Cir. 1998). Second, the expert must employ reliable methodology. Id.³ Third, the expert's testimony must be able to assist the trier of fact through the application of expertise to understand the evidence or fact in issue. Id.

At the outset, the Court notes that it is "the exclusive province of the judge in nonjury trials to assess the credibility of witnesses and to assign weight to their testimony", Axiom Worldwide, Inc., v. Excite Medical at 777, citing Childrey v. Bennett, 997 F.2d 830, 834 (11th Cir. 1993), and "[t]here is less need for the gatekeeper to keep the gate when the gatekeeper is keeping the gate only for himself." United States v. Brown, 415 F.3d 1257, 1269 (11th Cir. 2005). Accord Bristol-Myers Squibb Co. v. Andrx Pharms., Inc., 343 F.Supp. 2d 1124, 1131 (S.D. Fla. 2004) ("The Court agrees that the question of reliability and relevance in this case is merely one of degree. . . .This is especially true since this is a bench trial, where the Court must evaluate the evidence regardless of whether it ultimately decides to exclude it. . . .Thus, some courts have held that, in cases where the judge is the factfinder, the criteria for finding evidence admissible can be applied less strictly.") (internal citations omitted). Other circuits also recognize that there is a more relaxed standard of admissibility in a bench trial. Loeffel Steel Products, Inc., v. Delta Brands, Inc., 372 F. Supp. 2d 1104 1122-23 (N.D. Ill. 2005) (stating "Where, as here, the case is tried to the court, the Daubert concerns are of lesser importance"). Seaboard Lumber Co. v. United States, 308 F.3d 1283, 1301-02 (Fed. Cir. 2002) ("gatekeeping" concerns not as significant in bench trial, but Daubert standards of relevance and reliability must nevertheless be met); Gibbs v. Gibbs, 210 F.3d 491, 500 (5th Cir.2000) ("Most of the safeguards provided for in Daubert are not as essential in a case such as this where a district judge sits as the trier of fact in place of a jury."); Taubensee Steel & Wire Co. v. Macsteel Int'l USA Corp., No. 9 C 1505, 2011 WL 1651239, at *4 (N.D. Ill. May 2, 2011) ("The Court notes that while the Daubert standards apply in a bench trial, concerns about the trier of fact being fooled by evidence of dubious merit are lessened when the judge is acting in that role. The Court is capable of evaluating this evidence and giving itthe weight that it deserves.") (internal citations omitted).⁴

B. Damages under the Lanham Act, 15 U.S.C.A. § 1117(a)

The damages available under the Lanham Act, 15 U.S.C. § 1117, are set forth in the Section of that Act entitled "Recovery for violation of rights," and provides,

(a) Profits; damages and costs; attorney fees

When a violation of any right of the registrant of a mark registered in the Patent and Trademark Office, a violation under section 1125(a) or (d) of this title, or a willful violation under section 1125(c) of this title, shall have been established in any civil action arising under this chapter, the plaintiff shall be entitled, subject to the provisions of sections 1111 and 1114 of this title, and subject to the principles of equity, to recover (1) defendant's profits, (2) any damages sustained by the plaintiff, and (3) the costs of the action. The court shall assess such profits and damages or cause the same to be assessed under its direction. In assessing profits the plaintiff shall be required to prove defendant's sales only; defendant must prove all elements of cost or deduction claimed. In assessing damages the court may enter judgment, according to the circumstances of the case, for any sum above the amount found as actual damages, not exceeding three times such amount. If the court shall find that the amount of the recovery based on profits is either inadequate or excessive the court may in its discretion enter judgment for such sum as the court shall find to be just, according to the circumstances of the case. Such sum in either of the above circumstances shall constitute compensation and not a penalty. The court in exceptional cases may award reasonable attorney fees

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