Vt. Tel. Co. v. FirstLight Fiber, Inc.

• Docket Number: 216-2020-CV-00312
• Decision Date: 05 September 2023
• Parties: Vermont Telephone Company, Inc. v. FirstLight Fiber, Inc.
• Court: New Hampshire Superior Court

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Vermont Telephone Company, Inc. v. FirstLight Fiber, Inc.

No. 216-2020-CV-00312

Superior Court of New Hampshire, Hillsborough

September 5, 2023

ORDER ON DEFENDANT'S MOTION TO EXCLUDE PLAINTIFF'S EXPERT

David A. Anderson Associate Justice

Plaintiff Vermont Telephone Company, Inc. ("VTel") brought this action against Defendant FirstLight Fiber, Inc. ("FirstLight") arising out of FirstLight's termination of the parties' contract. Plaintiff's amended complaint alleges claims for breach of contract (Count I) and breach of the implied covenant of good faith and fair dealing (Count II). Defendant filed a counterclaim for breach of contract. FirstLight now moves in limine to exclude VTel from introducing Brian Pitkin's expert testimony about VTel's alleged damages at trial. (Doc. 156.) VTel objects. (Doc. 162.) Both FirstLight (Doc. 166) and VTel (Doc. 169) further respond. The Court held a hearing on July 31, 2023. For the reasons set forth below, FirstLight's motion to exclude is DENIED.

The Court incorporates the facts set forth in the Court's January 3, 2023 summary judgment order. (Doc. 144.) By way of further background, the parties entered into a Dark Fiber Lease Agreement (the "Lease") in 2014 which provided VTel with access to a dark fiber route (the "Route") between Lebanon, New Hampshire and Boston Massachusetts. FirstLight terminated the Lease, effective December 14, 2019.

VTel retained Pitkin from FTI Consulting ("FTI") as its expert to determine the damages VTel suffered as a result of FirstLight's alleged breach of the Lease. Pitkin is the senior managing director of FTI's telecommunications group. (Pl.'s Ex. 1 ¶ 5.) Pitkin has worked in the telecommunications industry for over twenty-five years and has regularly testified in front of state and federal courts the Federal Communications Commission, and state regulatory commissions. (Id.) As part of his experience, Pitkin routinely completes and evaluates detailed business case analyses to help support damage claims. (Id.)

Pitkin completed his expert report on July 9, 2021. VTel's counsel instructed Pitkin to complete his report assuming the following two things: (1) FirstLight wrongfully terminated the Lease effective December 14, 2019 and (2) VTel would have started using the fiber route in 2020 to pursue additional business opportunities. (Id. ¶ 8.) Pitkin divided his report into three sections: (1) an analysis of VTel's business opportunities over a five-year period (2) extension of the business opportunities through the end of the Lease; and (3) the financial damages that VTel suffered as a result of the lost opportunities. (Id. ¶ 9.) Ultimately, Pitkin concluded that VTel's lost profits ranged from $10.4 million to $43.9 million, with a mean outcome of $27.2 million. (Id. ¶ 10.)

Pitkin authored a rebuttal report on June 15, 2022, in response to criticisms from FirstLight's expert, Kenneth Martin. (Pl.'s Ex. 2 at 1.) Martin works for the consulting firm Altman Solon and has worked in the telecommunications industry for over twenty-four years. Pitkin's rebuttal report largely upheld the analysis and findings of his initial report. (Id.) Specifically, Pitkin rejected Martin's criticisms that (1) Pitkin's initial report was too speculative, (2) Pitkin misunderstood the Lease, (3) Pitkin should have used historical data, and (4) Pitkin relied on unreasonable assumptions, to be unfounded. (Id. at 2.) In his rebuttal report, Pitkin agreed that he initially overlooked the cost of additional equipment that VTel would need to use to realize its potential business opportunities and accordingly revised his estimate of damages down to $24.7 million. (Id. at 29.)

FirstLight now moves to exclude Pitkin's expert testimony for a variety of reasons. Broadly, FirstLight argues that Pitkin's damage calculations "are not sufficiently reliable or properly moored to actual facts to qualify as expert testimony." (Doc. 158 at 1.) More specifically, FirstLight argues that: (1) there is no evidence that VTel would have actually pursued the additional business opportunities upon which Pitkin focused; (2) Pitkin modeled VTel's telecom market share rather than using data from VTel's actual markets; (3) the industry estimations which Pitkin relied upon are unreliable; and (4) Pitkin made flawed assumptions in calculating VTel's long haul opportunities between Montreal and Boston. (Id. at 1-2.) Therefore, FirstLight argues, Pitkin's testimony is inadmissible under New Hampshire Rules of Evidence 702 and 403 because it would be unreliable and highly prejudicial. VTel argues that Pitkin's report and testimony are sufficiently reliable and that FirstLight's arguments go to the weight of the evidence, which is left to the jury to determine. (Doc. 162 ¶ 3.) VTel also contends that Pitkin's testimony is not too speculative because he properly conducted a lost future profits analysis. (Id. ¶ 4.)

Rule 702 provides: "If scientific, technical, or other specialized knowledge will assist 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." "Expert witnesses are called to give their opinions on subjects about which they have special knowledge and experience, upon the assumption that, by reason of these qualifications, they will be able to assist the jury in its search for the truth." Brown v. Bonnin, 132 N.H. 488, 494 (1989).

"[E]xpert testimony must rise to a threshold level of reliability to be admissible." Baker Valley Lumber, Inc. v. Ingersoll-Rand Co., 148 N.H. 609, 614 (2002). In determining the reliability of an expert's testimony, the court in Baker Valley adopted the framework set forth in Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579 (1993). The State legislature has since codified this framework in RSA 516:29-a, which states:

I. A witness shall not be allowed to offer expert testimony unless the court finds:

(a) Such testimony is based upon sufficient facts or data;

(b) Such testimony is the product of reliable principles and methods; and

(c) The witness has applied the principles and methods reliably to the facts of the case.

II. (a) In evaluating the basis for proffered expert testimony, the court shall consider, if appropriate to the circumstances, whether the expert's opinions were supported by theories or techniques that:

(1) Have been or can be tested;

(2) Have been subjected to peer review and publication;

(3) Have a known or potential rate of error; and

(4) Are generally accepted in the appropriate scientific literature.

(b) In making its findings, the court may consider other factors specific to the proffered testimony.

Under this analysis, "[t]he trial court functions only as a gatekeeper, ensuring a methodology's reliability before permitting the fact-finder to determine the weight and credibility to be afforded an expert's testimony." Baker Valley, 148 N.H. at 616. "While the proponent of the expert witness bears the burden of proving the admissibility of the expert's testimony, this burden is not especially onerous." Szewczyk v. Cont' Paving, Inc., __ N.H.__, __ (decided August 16, 2023) (slip op. at 8). "The overall purpose of Rule 702 and RSA 516:29-a is to ensure that a fact-finder is presented with reliable and relevant evidence, not flawless evidence." Id. "[A]s long as an expert's scientific testimony rests upon good grounds, . . . it should be tested by the adversary process- competing expert testimony and active cross-examination-rather than excluded from jurors' scrutiny for fear that they will not grasp its complexities or satisfactorily weigh its inadequacies." State v. Langill, 157 N.H. 77, 88 (2008).

As a preliminary matter, the Court notes that it found Pitkin to be credible. Pitkin provided clear and articulable reasons to support specific decisions that he made throughout his report. For example, Pitkin testified that he identified six potential business opportunities along the fiber route that VTel could have taken advantage of if FirstLight never terminated the Lease. However, Pitkin further testified that he only included two of them-enterprise and long haul opportunities between Boston and Montreal-in his damages estimation. Pitkin's knowledge and detailed rationale for limiting the scope of his report's analysis from the outset highlights his expertise and methodology. Additionally, Pitkin coherently engaged with the criticism of his report and readily admitted when he believed he made a mistake in his original report, further emphasizing Pitkin's knowledge and understanding of the telecommunications industry.

Broadly the Court agrees with VTel that the true gist of FirstLight's arguments goes to the weight and not the reliability of Pitkin's testimony. Crucially, expert testimony need not be perfect to be reliable under Rule 702. See Szewczyk, N.H. at 8. The Court agrees that Pitkin's testimony is not flawless, especially the data that Pitkin used from Montpelier, Vermont. Nevertheless, Pitkin relies on methods and facts that are "generally accepted" in the telecommunications industry. Moscicki v. Leno, 173 N.H. 121, 125 (2020) ("RSA 516:29-a, II requires courts to consider whether the proffered testimony is based upon theories or techniques that are generally accepted; it does not require courts to exclude testimony where the testimony is not supported by the theory or technique that has the most acceptance."). Indeed, Pitkin credibly testified, for example, it was standard practice in the telecommunications industry to use industry models rather than historical company data. There are no bright line rules for determining the admissibility for expert...