Hogan Logistics, Inc. v. Davis Transfer Co.
| Decision Date | 09 January 2018 |
| Docket Number | No. 4:16-CV-1541 CAS,4:16-CV-1541 CAS |
| Parties | HOGAN LOGISTICS, INC., Plaintiff, v. DAVIS TRANSFER COMPANY, INC., Defendant. |
| Court | U.S. District Court — Eastern District of Missouri |
This matter is before the Court on plaintiff Hogan Logistics, Inc.'s ("Hogan" or "plaintiff') motion to exclude the testimony of defendant's expert witness Henry E. Seaton pursuant to Federal Rule of Evidence 702 and Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993). Defendant Davis Transfer Company, Inc. ("Davis" or "defendant") opposes the motion and it is fully briefed. Neither party has requested an evidentiary hearing or oral argument, and the parties have submitted an evidentiary record including exhibits and deposition testimony. The Court finds it can make a proper Daubert analysis without the need for a hearing or argument.
For the following reasons, Hogan's motion to exclude defendant's expert witness will be granted in part and denied in part.
Plaintiff Hogan is a freight broker and third-party logistics company that provides nationwide shipping services for its customers, which at one time included Imperial Sugar Company ("ISC"). Hogan contracts with freight carriers, such as defendant Davis, to complete the actual transport of its customers' goods. The parties entered into a Broker-Carrier Agreement (the "Agreement") in October 2013, pursuant to which Davis agreed to ship freight for Hogan's customers, primarily from two ISC facilities in Georgia to destinations across the southeastern United States.
Section 10 of the Agreement is titled "Traffic Solicitation" and is referred to by the parties as a "back-solicitation clause." Hogan contends this clause prohibits Davis from soliciting or accepting any freight traffic from Hogan's customers directly. Hogan asserts that in May 2016, Davis wrongfully solicited freight traffic from ISC in violation of the Agreement's back-solicitation clause. As a result, Hogan lost the portion of ISC's freight traffic that Davis previously carried on Hogan's behalf, and Davis carried freight directly for ISC rather than as a contract carrier for Hogan.
Section 10 of the Agreement provides:
(Doc. 10 at 4, § 10.)
The parties offer competing interpretations of the back-solicitation clause that focus on the meaning of the term "traffic," as modified by "first became known" and "first tendered."1 In rulingon Davis's motion for judgment on the pleadings, the Court stated that the parties' arguments were based on two different meanings for the term "traffic," the Agreement does not define the term, and the parties did not cite any case law, regulation, or industry standard to supply a commonly understood meaning for it. The Court concluded as a matter of law that the term "traffic" as used in the Agreement was ambiguous because "[a]s a matter of plain language, both interpretations are plausible." See Mem. and Order of April 27, 2017, at 5-6 (Doc. 32) (Judge Carol E. Jackson, presiding).
Davis states it has disclosed Mr. Seaton as an expert witness to testify concerning transportation industry trade usage and custom of terms in connection with back-solicitation clauses in freight brokerage contracts. Mr. Seaton has more than forty years' experience as a freight broker, freight carrier, and transportation lawyer.
The admission of expert testimony in federal court is governed by Federal Rule of Evidence 702. In Daubert, the United States Supreme Court interpreted Rule 702 to require district courts to be certain that expert evidence based on scientific, technical or other specialized knowledge is "not only relevant, but reliable." Daubert, 509 U.S. at 589. The district court must make 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.
The Eighth Circuit Court of Appeals has stated that proposed expert testimony must meet three criteria to be admissible under Rule 702. Lauzon v. Senco Prods., Inc., 270 F.3d 681, 686 (8th Cir.2001). "Second, the proposed witness must be qualified to assist the finder of fact." Id. (citation omitted). "Third, the proposed evidence must be reliable or trustworthy in an evidentiary sense, so that, if the finder of fact accepts it as true, it provides the assistance the finder of fact requires." Id. (internal quotation marks omitted). To meet the third requirement, the testimony must be "based on sufficient facts or data" and be "the product of reliable principles and methods," and the expert must have "reliably applied the principles and methods to the facts of the case." Fed. R. Evid. 702(b)-(d).
"Rule 702 reflects an attempt to liberalize the rules governing the admission of expert testimony[,]" Weisgram v. Marley Co., 169 F.3d 514, 523 (8th Cir. 1999), and "favors admissibility if the testimony will assist the trier of fact." Clark ex rel. Clark v. Heidrick, 150 F.3d 912, 915 (8th Cir. 1998). Doubt regarding "whether an expert's testimony will be useful should generally be resolved in favor of admissibility." Id. (citation and internal quotation omitted).
Under Rule 702, the trial court has gatekeeping responsibility to "ensur[e] that an expert's testimony both rests on a reliable foundation and is relevant to the task at hand." Kumho Tire Co. v. Carmichael, 526 U.S. 137, 141 (1999) (citing Daubert, 509 U.S. at 597). "When making the reliability and relevancy determinations, a district court may consider: (1) whether the theory or technique can be or has been tested; (2) whether the theory or technique has been subjected to peer review or publication; (3) whether the theory or technique has a known or potential error rate and standards controlling the technique's operation; and (4) whether the theory or technique is generally accepted in the scientific community." Russell v. Whirlpool Corp., 702 F.3d 450, 457 (8th Cir. 2012) (citing Daubert, 509 U.S. at 593-94). "This evidentiary inquiry is meant to be flexible and fact specific, and a court should use, adapt, or reject Daubert factors as the particular case demands." Unrein v. Timesavers, Inc., 394 F.3d 1008, 1011 (8th Cir. 2005). "There is no single requirementfor admissibility as long as the proffer indicates that the expert evidence is reliable and relevant." Id.
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." Nebraska Plastics, Inc. v. Holland Colors Am., Inc., 408 F.3d 410, 416 (8th Cir. 2005) (quoted case omitted). However, "if the expert's opinion is so fundamentally unsupported that it can offer no assistance to the jury, it must be excluded." Id. (quoted case omitted). An expert opinion is fundamentally unsupported when it "fails to consider the relevant facts of the case." Id.
Hogan asserts that Mr. Seaton's opinions are inadmissible under Rule 702 and Daubert. It does not challenge Mr. Seaton's qualifications to testify, or argue that his testimony would not be relevant or helpful to the fact-finder. Hogan argues that Mr. Seaton's testimony must be excluded because it (1) usurps the Court's function by offering legal conclusions about the meaning of the Agreement's back-solicitation clause; (2) usurps the jury's function by opining on what the parties intended in a July 15, 2009 email exchange; (3) usurps the Court's and the jury's functions by applying his interpretation of the back-solicitation clause to the facts of the case and concluding that Davis did not breach the Agreement and was incapable of breaching it; and (4) offers inadmissible opinions on the meanings of the terms "traffic," "first tendered," and "first became known," because Mr. Seaton admitted these terms do not have an accepted meaning in the industry.
Davis responds that Mr. Seaton does not offer legal conclusions or opinions. Davis states that Mr. Seaton offers admissible opinions, based on his extensive, specialized knowledge and experience, concerning industry custom and usage of terms as used in the Agreement's back-solicitation clause. Davis notes that the Court previously determined the back-solicitation clause was ambiguous, and asserts that Mr. Seaton's testimony is relevant and helpful to a jury because the specialized transportation terms on which he opines are not common knowledge.
As a general principle, "expert testimony on legal matters is not admissible." Southern Pine Helicopters, Inc....
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