Town & Country Linen Corp. v. Ingenious Designs LLC

• Decision Date: 14 July 2022
• Docket Number: 18-cv-5075 (LJL)
• Parties: TOWN & COUNTRY LINEN CORP. and TOWN & COUNTRY HOLDINGS, INC., Plaintiffs, v. INGENIOUS DESIGNS LLC, JOY MANGANO, and HSN, INC., Defendants.
• Court: U.S. District Court — Southern District of New York

TOWN & COUNTRY LINEN CORP. and TOWN & COUNTRY HOLDINGS, INC., Plaintiffs, v. INGENIOUS DESIGNS LLC, JOY MANGANO, and HSN, INC., Defendants.

No. 18-cv-5075 (LJL)

United States District Court, S.D. New York

July 14, 2022

OPINION AND ORDER

LEWIS J. LIMAN, UNITED STATES DISTRICT JUDGE

As the Court has recounted in many prior opinions, see Dkt Nos. 126, 142, 171, 331, 396, 416, this case involves a variety of disputes between plaintiffs Town & Country Linen Corp. (“TCL”) and Town & Country Holdings, Inc. (“TCH,” and collectively with TCL “TNC” or “Plaintiffs”) and defendants Ingenious Designs LLC (“IDL”), Joy Mangano, and HSN, Inc. (“HSN,” and collectively with IDL and Mangano, “Defendants”) arising out of the many years of interactions and collaborations between the parties. The case is set for trial on August 1, 2022; as set forth in the Court's opinion at Dkt. No. 416, the case will be tried to the bench. With that in mind, the Court now turns to the parties' pending Daubert motions at Dkt Nos. 348, 350, and 352.

For the following reasons, the Daubert motions are granted in part and denied in part.

BACKGROUND

The relevant facts of this case are set forth in the Court's prior opinions granting in part and denying in part Defendants' motion to dismiss the complaint, Dkt. No 126; granting Plaintiffs' motion for reconsideration, Dkt. No. 142; granting in part and denying in part Plaintiffs' motion to dismiss certain counterclaims and affirmative defenses, Dkt. No. 171; granting in part and denying in part the parties' cross-motions for summary judgment, Dkt. No. 331; denying the parties' cross-motions for reconsideration, Dkt. No. 396; and striking the jury demand, Dkt. No. 416. Familiarity with those opinions is assumed. In short, Plaintiffs and Defendants had a relationship beginning in 2012 in which they collaborated to design and develop products. Defendants would propose ideas and present specifications for certain products they wanted developed, and Plaintiffs would engage in development work, provide renderings, and arrange for the sourcing and manufacture of those products. At some point, the relationship between the parties broke down. Plaintiffs allege that, after that breakdown, Defendants misappropriated their ideas, trade secrets, intellectual property, and information conveyed subject to a non-disclosure agreement, in particular as related to two projects-the “Aramid Fiber Luggage” project and the “CloseDrier” project.

PROCEDURAL HISTORY

The lengthy procedural history of this case is recounted in full in the Court's summary judgment opinion. Dkt. No. 331. As relevant here, the Court issued its opinion granting in part and denying in part the parties' cross-motions for summary judgment-thus preserving several claims for trial-on August 5, 2021, id., and issued its opinion denying the parties' crossmotions for reconsideration on October 19, 2021, Dkt. No. 396.

Following the summary judgment ruling, the parties filed various Daubert motions to preclude several experts from testifying at trial. Both parties filed their motions on September 7, 2021. Dkt. Nos. 350, 352. The parties filed oppositions to the motions on October 5, 2021, Dkt. Nos. 380, 383, and replies on October 26, 2021, Dkt. Nos. 399, 401.

On March 4, 2022, Defendants filed a motion to strike the jury demand. Dkt. No. 409. On May 13, 2022, the Court granted the motion, converting the trial on the remaining claims from a jury trial to a bench trial. Dkt. No. 414.

On June 9, 2022, the Court held a hearing on the still-pending Daubert motions. The Court now addresses those motions, considering them in light of the fact that this case is now to be tried to the bench, rather than to a jury.

LEGAL STANDARD

Under Federal Rule of Evidence 702, a witness who is qualified as an expert by knowledge, skill, experience, training, or education may testify in the form of an opinion 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. “[T]he proponent of expert testimony has the burden of establishing by a preponderance of the evidence that the admissibility requirements of Rule 702 are satisfied.” United States v. Jones, 965 F.3d 149, 161 (2d Cir. 2020) (quoting United States v. Williams, 506 F.3d 151, 160 (2d Cir. 2007)). That rule requires the proponent to establish and the trial judge to find “that any and all scientific testimony or evidence admitted is not only relevant, but reliable.” Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 589 (1993). This “gatekeeping obligation” applies “to all expert testimony.” Kumho Tire Co., Ltd. v. Carmichael, 526 U.S. 137, 147 (1999).

“The objective of [the gatekeeping] requirement is to ensure the reliability and relevancy of expert testimony. It is to make certain that an expert, whether basing testimony upon professional studies or personal experience, employs in the courtroom the same level of intellectual rigor that characterizes the practice of an expert in the relevant field.” Id. at 152. Relevancy is determined by whether the proffered evidence “has any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable.” Amorgianos v. Amtrak, 303 F.3d 256, 265 (2d Cir. 2002). Reliability is determined by considering if (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.” Fed.R.Evid. 702; see also Amorgianos, 303 F.3d at 266 (citing this standard).

Daubert motions function somewhat differently in context of bench trials:

[T]he court's gatekeeper role is necessarily different during a bench trial. In a bench trial, the judge acts as both gatekeeper and factfinder. The judge must determine both whether expert evidence is admissible under Rule 702 and whether it is credible. When the gatekeeper and the trier of fact are the same, the court may admit evidence subject to the ability later to exclude it or disregard it, if the evidence turns out not to meet the standard of reliability under Rule 702.

4 Weinstein's Federal Evidence § 702.02; see also In re Salem, 465 F.3d 767, 777 (7th Cir. 2006) (“[W]here the factfinder and the gatekeeper are the same, the court does not err in admitting the evidence subject to the ability later to exclude it or disregard it if it turns out not to meet the standard of reliability established by Rule 702.”).

“[W]here a bench trial is in prospect, resolving Daubert questions at a pretrial stage is generally less efficient than simply hearing the evidence.” Victoria's Secret Stores Brand Management, Inc. v. Sexy Hair Concepts, LLC, 2009 WL 959775, at *6 n.3 (S.D.N.Y. Apr. 8, 2009). Although a court has general discretion to hear expert testimony and reserve on a Daubert motion until the conclusion of a bench trial, it still must perform a Rule 702 and Daubert analysis before it relies upon expert testimony. See, e.g., Joseph S. v. Hogan, 2011 WL 2848330, at *3 (E.D.N.Y. July 15, 2011) (noting that “[t]he dynamic” for Daubert motions “is slightly altered in a bench trial,” but that, nonetheless, reliability determinations still must be made in a bench trial and that courts should not “shirk [their] responsibility of performing a full Daubert analysis”).

Despite this, in the interests of efficiency, the Court wishes to avoid experts presenting at trial evidence and testimony that does not “fit” the facts of the case. See Daubert, 509 U.S. at 591 (“Rule 702 further requires that the evidence or testimony ‘assist the trier of fact to understand the evidence or to determine a fact in issue.' This condition goes primarily to relevance. Expert testimony which does not relate to any issue in the case is not relevant and, ergo, non-helpful. The consideration has been aptly described by Judge Becker as one of ‘fit.'” (internal citations and quotation marks omitted)). Under this principle, both parties' experts will be precluded from offering at trial opinions and testimony that simply state the experts' understandings of the law and the parties' factual narratives. The case is being tried to the bench; such testimony will not be helpful. Additionally, testimony that relates only to issues that are no longer in the case after the Court's summary judgment ruling-such as testimony relating to the CloseDrier and Luggage Trade Secrets and testimony relating to whether the fabric Defendants utilized was substantially similar to Plaintiffs' Luggage Idea (d)-will be excluded as no longer relevant to any issue in the case.

The Daubert motions-particularly those pertaining to Plaintiffs' damages expert- present several questions related to damages that raise legal questions that may shape the way the parties present their cases. The Court here sets forth, as a matter of law, what measures of damages are available for the remaining claims in the case, as well as how this bears on the relevance of the damages experts' proffered opinions and testimony. The remaining Daubert motions are denied without prejudice to renewal at trial. See 3DT Holdings LLC v. Bard Access Systems Inc., 2022 WL 2037853, at *1 (S.D.N.Y. May 10, 2022) (denying Daubert motions without prejudice to their renewal during trial where the case was to be tried to the bench).

DISCUSSION

On summary judgment, the Court granted Defendants...