Valvetech, Inc. v. Aerojet Rocketdyne, Inc.
| Decision Date | 19 May 2023 |
| Docket Number | 17-CV-6788-FPG |
| Parties | VALVETECH, INC., Plaintiff, v. AEROJET ROCKETDYNE, INC., Defendant. |
| Court | U.S. District Court — Western District of New York |
DECISION AND ORDER
A jury trial in this matter is scheduled to begin on June 12, 2023. The parties have filed over a dozen motions in limine. The Court resolves the motions below. The parties must bear in mind, however, that they “have no inherent right to an in limine ruling and such rulings are viewed as a preliminary opinion given to allow the parties to formulate their trial strategy and allow the Court to manage the trial in the most efficient way possible.” Horn v. Med. Marijuana, Inc., No 15-CV-701, 2021 WL 1700257, at *1 (W.D.N.Y. Apr. 29, 2021). “The trial court is not bound by an in limine ruling and can change its determination during the trial where sufficient facts have developed to warrant the change or even if nothing unexpected happens at trial.” Id.
Aerojet moves to exclude portions of the expert testimony of Michael Timko, ValveTech's technical expert. ECF Nos. 217, 235; see also ECF No. 248-4 () [hereinafter “Timko Rep.”]. The Court addresses each objection below.
Aerojet moves to exclude Timko's opinions that (1) Aerojet avoided months of development delays through its access to, and use of, ValveTech's trade secrets, ECF No. 235 at 14-17; and (2) Boeing's CST-100 Starliner would have been used “4.5 missions” per year for sixty years. Timko Rep. ¶ 397. ValveTech's damages expert, Justin R. Blok, relied in part on these opinions to calculate ValveTech's damages. See, e.g., ECF No. 192-39 ¶¶ 67, 69, 81, 91 (copy of Blok's report) [hereinafter “Blok Rep.”].
First, Aerojet asserts that it is “speculative and conjectural” for Timko to believe that “an avoided delay that would have lasted mere months would justify a damages window lasting 60 years.” ECF No. 235 at 12. Aerojet's argument is not persuasive. The avoided delays and expected life of the Starliner program are distinct issues that relate to different categories of damages: unjust enrichment and lost profits, respectively. See Blok Rep. at 30-37, 38-46. One does not “justify” the other; nor do they, as Aerojet claims, conflict with each other. ECF No. 235 at 12.
Second, Aerojet contends that “[e]xclusion is also warranted for failure to identify a reliable (or indeed any) methodology by which Mr. Timko reached” his opinion that the Starliner would operate for sixty years at a rate of 4.5 missions per year. Id. at 13; see also Timko Rep. ¶ 397. The Court disagrees. As an initial matter, Aerojet does not dispute that Timko has expertise “by knowledge, skill, experience, training, or education.” Fed. R. Ev. 702; see also Timko Rep. ¶¶ 23-37. In this case, to estimate the design life of the Starliner, Timko “compar[ed] the unknown to an analogous known experience.” Alaska Rent-A-Car, Inc. v. Avis Budget Grp., Inc., 738 F.3d 960, 970 (9th Cir. 2013). Based on his education and experience, Timko believes the Russian “Soyuz manned spacecraft” is an adequate comparator with respect to the Starliner's estimated design life, as the Soyuz and the Starliner “are both manned spacecraft launched on a rocket booster and both are robust designs aimed at reliable, frequent use.” Timko Rep. ¶ 397. Timko opines that the Space Shuttle is an adequate comparator with respect to the Starliner's expected frequency of use given the similarities between the Shuttle's “operating history” and the expected operations of the Starliner. See id. ¶¶ 58-60, 69-70, 397.
Thus, contrary to Aerojet's argument, Timko did identify a methodology by which he reached his “60-year” opinion. Furthermore, the Court declines to address Aerojet's claim that these comparators involved “cherry-picking” evidence, since, aside from baldly asserting as much, Aerojet fails to meaningfully challenge the substantive reasons that Timko identified for selecting the Soyuz and Shuttle as comparators.[1]ECF No. 235 at 13; see also United States v. Zannino, 895 F.2d 1, 17 (1st Cir. 1990) (). Aerojet has developed no persuasive reason to depart from the principle that the adequacy of Timko's comparators goes to “the weight of the testimony and its credibility, not its admissibility.” Alaska, 738 F.3d at 970.
Third, Aerojet criticizes Timko's opinion regarding avoided production delays on the basis that he has no discernible methodology to estimate each delay that was avoided by using ValveTech's proprietary information. See ECF No. 235 at 14-17.
Timko was asked about his methodology at his deposition:
ECF No. 237 at 12. Read alone, the Court agrees with Aerojet that this statement is problematic. See, e.g., Gen. Elec. Co. v. Joiner, 522 U.S. 136, 146 (1997) (“[N]othing in either Daubert or the Federal Rules of Evidence requires a district court to admit opinion evidence that is connected to existing data only by the ipse dixit of the expert.”); GPNE Corp. v. Apple, Inc., No. 12-CV-2885, 2014 WL 1494247, at *5 (N.D. Cal. Apr. 16, 2014) ().
In his expert report, Timko further develops the basis for his conclusions. He takes a few different approaches when estimating an avoided delay. Timko relies on his approximation for a single “development iteration” to estimate several of the delays that Aerojet avoided by relying on ValveTech's trade secrets. See, e.g., Timko Rep. ¶¶ 403, 409. As he explains, “a development iteration of [a] design [involves] creating new drawings and the associated verification of the design, manufacturing and assembly of a revised[] design, and associated verification test of a revised design.” Id. ¶ 409. Timko states that, in the industry and based on his professional experience, one “development iteration” for a valve design takes between four to six months. Id. ¶ 403. To estimate an avoided delay, Timko also relies on his experience “resolving similar issues,” Timko Rep. ¶ 416, as well as the real-world delays incurred during the project, Timko Rep. ¶ 409 (concluding that, because Aerojet had knowledge of “the testing and development issues associated with ValveTech's Retainer Seal Design,” it was able to avoid the two-to-three month delay that ValveTech suffered from the “investigation of the damage to the retainer ring of the Retainer Seal Design”).
While the Court is able to follow Timko's chain of reasoning, it shares Aerojet's concern that many of these “avoided delay” estimates amount to objectively unverifiable conclusions grounded solely in Timko's experience. See ECF No. 235 at 16. Timko does not, for example, identify the similar projects or other objective data on which he relies to estimate that a full development iteration will take “four to six months.” Rather, Timko's deposition testimony suggests that such an estimate is less grounded on an objective methodology or comparison and more on Timko's own subjective “sense” of how long the steps in the design process could take.[2]Such expert testimony is inadmissible. An “expert is not a black box into which data is fed at one end and from which an answer emerges at the other; the Court must be able to see the mechanisms in order to determine if they are reliable and helpful.” Lawrence v. Raymond Corp., No. 09-CV-1067, 2011 WL 3418324, at *7 (N.D. Ohio Aug. 4, 2011). That is why “an expert relying solely on his experience must explain how that experience leads to the conclusion reached, why that experience is a sufficient basis for the opinion, and how that experience is reliably applied to the facts.” Potter v. United States, No. 17-CV-4141, 2020 WL 2836440, at *7 .
Having considered the parties' arguments, the Court is inclined to agree with Aerojet that some aspects of Timko's expert testimony on the avoided delays may be inadmissible. See Fed. R. Ev. 702(c), (d). Specifically, any estimates grounded in Timko's subjective view, rather than on an objective methodology or comparison, like real-world delays, may be inadmissible. The Court intends to exclude the former opinions at trial. Accord Medidata Sols., Inc. v. Veeva Sys., Inc., No. 17-CV-589, 2021 WL 3773464, at *2 (S.D.N.Y. Aug. 25, 2021) (). However, this preliminary ruling does not preclude ValveTech from seeking to admit such evidence should it be able to present the necessary foundation at trial.
Aerojet argues, for a variety of reasons, that Timko's expert opinions that certain items and materials constitute trade secrets are inadmissible under Rule 702. See ECF No 235 at 17-23. While Aerojet...
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