JBrick, LLC v. Chazak Kinder, Inc.

District Court, E.D. New York·Decided September 28, 2023·No. 1:21-cv-02883·Unknown

Opinion

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK

JBRICK, LLC, Plaintiff, v. MEMORANDUM & ORDER 21-CV-02883 (HG) (CLP) CHAZAK KINDER, INC., CHAZAK DISTRIBUTION, INC., YAACOV SCHWARTZ, and MARAV USA LLC.

Defendants.

HECTOR GONZALEZ, United States District Judge:

Plaintiff JBrick, LLC (“Plaintiff” or “JBrick”) brings this action against Defendants Chazak Kinder, Inc. (“Chazak Kinder”), Chazak Distribution, Inc. (“Chazak Distribution”), Marav USA, LLC (“Bingo Wholesale”), and Yaacov Schwartz (together, “Defendants”) alleging copyright infringement pursuant to 17 U.S.C. §§ 101–1511. ECF No. 46 (Second Amended Complaint). Presently before the Court are: (i) Defendants’ Motion to Strike the Opinions of Michael Pakter, and (ii) Plaintiff’s Motion to Strike Certain Opinions and Testimony of Trevor McClain- Duer. ECF Nos. 91, 92. For the reasons set forth below, Defendants’ Motion to Strike the Opinions of Michael Pakter is granted in part and denied in part, and Plaintiff’s Motion to Strike Certain Opinions and Testimony of Trevor McClain-Duer is granted. BACKGROUND The Court assumes familiarity with the facts and history of this litigation and only provides a summary of the pertinent facts and procedural history. See JBrick, LLC v. Chazak Kinder, Inc., No. 21-cv-2883, 2022 WL 17177854 (E.D.N.Y. Nov. 23, 2022); JBrick, LLC v. Chazak Kinder, Inc., No. 21-cv-2883, 2023 WL 6158694 (E.D.N.Y. Sept. 21, 2023). Plaintiff alleges that JBrick was established by Yitzchok and Channie Kasowitz in 2014. ECF No. 46 at 4. Plaintiff further alleges that Mr. Kasowitz’s “true passion project” was the creation of a “unique, accurately scaled, genuine LEGO®-brick interpretation” of the Second Beit Hamikdash, or Second Holy Temple (“Second Holy Temple”). ECF No. 46 at 4–5.

Plaintiff alleges that in November 2018, Mr. Kasowitz met Defendant Schwartz at a convention where JBrick’s Second Holy Temple set (the “Second Holy Temple Product”) was “on full display.” ECF No. 46 at 14. Plaintiff alleges that thereafter Defendants produced “almost an exact replica” of the Second Holy Temple Product, containing “all of the unique features that set the JBrick . . . [product] apart from its competitors.” ECF No. 46 at 13. On May 21, 2021, JBrick filed a complaint asserting a claim for copyright infringement against Defendants. ECF No. 1. On April 25, 2022, Plaintiff filed its second amended complaint. ECF No. 46. On August 19, 2022, the parties completed expert discovery. ECF No. 58. On February 20 and February 21, 2023, Defendants filed a motion to strike the opinions of Plaintiff’s expert Michael Pakter and Plaintiff filed a motion to strike certain opinions of

Defendants’ expert Trevor McClain-Duer. ECF Nos. 91, 92. On March 20, 2023, the parties filed their oppositions. ECF Nos. 99, 100. The Court did not permit replies. See Text Order dated January 4, 2023. LEGAL STANDARD The admissibility of expert testimony is governed by Rule 702 of the Federal Rules of Evidence, which was further clarified by Daubert v. Merrell Dow Pharms., Inc., 509 U.S. 579 (1993).1 Rule 702 provides, in pertinent part, that an expert, qualified by “knowledge, skill,

1 Unless noted, case law quotations in this Order accept all alterations and omit all internal quotation marks, citations and footnotes. experience, training, or education” may testify 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. In other words, “the Court must determine: (1) whether the witness is a qualified expert; (2) whether the opinion is based on application of reliable data and methodology to the facts of the case; and (3) whether the expert’s testimony will assist the trier of fact to understand the evidence or determine an issue of fact.” Boateng v. Bayerische Motoren Werke Aktiengesellschaft, No. 17-cv-209, 2022 WL 4357555, at *10 (E.D.N.Y. Sept. 20, 2022). “Under Daubert, the district court must perform the gatekeeping function to ensure that: any and all scientific testimony or evidence admitted is not only relevant, but reliable.” Beruashvili v. Hobart Corp., No. 05-cv-1646, 2010 WL 11622750, at *5 (E.D.N.Y. July 15, 2010). DISCUSSION Plaintiff offers the testimony of Mr. Michael D. Pakter as an expert on damages incurred as a result of Defendants’ sales of their alleged infringing product. ECF No. 104-2 (Pakter Expert Report). Defendants offer the testimony of Mr. Trevor McClain-Duer as a rebuttal expert on damages. ECF No. 104-7 (McClain-Duer Expert Report). I. Admissibility of Michael Pakter’s Testimony A. Qualifications Michael D. Pakter is a certified public accountant, registered and licensed in the State of Illinois, with over 40 years of experience in accounting and forensic accounting. ECF No. 104-2 at 5 (Pakter Expert Report). He holds a Bachelor of Commerce and a Bachelor of Accountancy from Witwatersrand University, in South Africa. Id. at 41. The American Institute of Certified Public Accountants has recognized Mr. Pakter as “Certified in Financial Forensics” and as a “Chartered Global Management Accountant.” Id. at 5. Mr. Pakter has earned several other certifications including as a “Certified Valuation Analyst” and “Master Analyst in Financial Forensics” from the National Association of Certified Valuators and Analysts, and as a

“Certified Insolvency and Restructuring Advisor” from the Association of Insolvency and Restructuring Advisors. Id. Mr. Pakter has over 20 years of experience in determining economic damages and performing business valuations. ECF No. 104-2 at 41. He is currently the Managing Member of Gould & Pakter Associates, LLC (“G&P”), a certified public accounting firm founded in 2004 which provides, among other things, “financial forensics, commercial litigation services, internal investigations and financial analysis of disputes; calculates lost profits, economic damages, insurance claims, and earn-outs.” Id. at 3. Mr. Pakter has previously testified in proceedings in federal (both district and bankruptcy), and state courts where he was qualified as an expert in the field of economic damages. Id. at 5. G&P and Mr. Pakter were engaged by Plaintiff’s counsel

“to determine Plaintiff’s damages assuming Defendants’ liability” including Plaintiff’s actual damages, and Defendants’ “profits attributable to their infringement that are not taken into account in calculating JBrick’s actual damages.” Id. at 3. Considering his significant experience in accounting and determining economic damages, and because Defendants do not dispute that Mr. Pakter is a qualified expert, this Court concludes that Mr. Pakter has the “knowledge, skill, experience, training, [and] education” required by Rule 702 to offer opinions on economic damages in this case. B. Reliability and Relevance Defendants argue that the damages calculations in Mr. Pakter’s report are “based almost exclusively on speculation and not on objective, documented evidence or on any reliable methodology.” ECF No. 91 at 3. Specifically, Defendants take issue with Mr. Pakter’s: (i)

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