5 UNITED STATES DISTRICT COURT AT SEATTLE 7
8 SPEARMAN CORPORATION Case No. C20-13RSM 9 MARYSVILLE DIVISION and SPEARMAN CORPORATION KENT ORDER DENYING MOTION TO 10 DIVISION, EXCLUDE CERTAIN TESTIMONY OF Plaintiff, LORRAINE BARRICK 12 13 v.
15 Defendant. 16 I. INTRODUCTION 17 This matter comes before the Court on Plaintiff Spearman Corporation Marysville 18 19 Division and Spearman Corporation Kent Division (“Spearman”)’s Motion to Exclude Certain 20 Testimony of Boeing Proposed Expert Lorraine Barrick. Dkt. #131. Defendant Boeing opposes 21 Plaintiff’s Motion. Dkt. #145. The Court has determined that oral argument is unnecessary. For 22 the following reasons, the Court DENIES Plaintiff’s Motion to Exclude. 23 II. BACKGROUND 24 25 This is a contract dispute involving Spearman and Boeing. This Court has previously 26 dismissed several of the Plaintiff’s claims, and its breach of good faith and fair dealing claim is 27 still remaining. Dkt. #190. 28 Defendant provides Lorraine Barrick as an expert to opine on Spearman’s financial 1 2 conditions and analyze Boeing’s counterclaim damages. See Dkt. #132-2. Ms. Barrick is a 3 Certified Public Accountant, with experience in analyzing financial records and evaluating claims 4 for financial damages. Id. at 8. 5 Ms. Barrick summarized her opinions as follows: 6 1. Spearman was losing money even before its contract with 7 Boeing and its financial problems are not attributable to Boeing. 8 2. Financial statements provided to Boeing were inadequate and 9 misrepresented Spearman’s financial health.
10 3. Mr. Spearman comingled his personal and business assets and 11 liabilities.
12 4. Boeing’s damages claim includes Boeing’s cost to cover undue 13 balances for material sold to Spearman, and to cover excess costs to manufacture products internally and through other 14 suppliers.
15 5. Plaintiffs’ damages claims are inadequately presented. 16 See Dkt. #132-2 at 13. 17 III. DISCUSSION 18 19 A. Legal Standard 20 Federal Rule of Evidence 702 provides that a witness who is qualified as an expert by 21 knowledge, skill, experience, training, or education may testify in the form of an opinion or 22 otherwise if: 23 (a) the expert’s scientific, technical, or other specialized knowledge will help the trier of 24 fact to understand the evidence or to determine a fact in issue; 25 (b) the testimony is based on sufficient facts or data; (c) the testimony is the product of reliable principles and methods; and 26 (d) the expert has reliably applied the principles and methods to the facts of the case.
27 28 Under Rule 702, the trial court acts as a gatekeeper and ensures that the proffered scientific 1 2 testimony meets certain standards of both relevance and reliability before it is admitted. Daubert 3 v. Merrell Dow Pharm., Inc. ("Daubert I"), 509 U.S. 579, 590, 113 S. Ct. 2786, 125 L. Ed. 2d 4 469 (1993). The party proffering expert testimony has the burden of showing the admissibility 5 of the testimony by a preponderance of the evidence. Daubert I, 509 U.S. at 592 n.10. “[J]udges 6 are entitled to broad discretion when discharging their gatekeeping function” related to the 7 8 admission of expert testimony. United States v. Hankey, 203 F.3d 1160, 1168 (9th Cir. 2000) 9 (citing Kumho Tire Co. v. Carmichael, 526 U.S. 137, 150-53, 119 S. Ct. 1167, 143 L. Ed. 2d 238 10 (1999)). The Court considers four factors to determine if expert testimony will assist the trier of 11 fact: “(i) whether the expert is qualified; (ii) whether the subject matter of the testimony is proper 12 13 for the jury’s consideration; (iii) whether the testimony conforms to a generally accepted 14 explanatory theory; and (iv) whether the probative value of the testimony outweighs its prejudicial 15 effect.” Scott v. Ross, 140 F.3d 1275, 1285-86 (9th Cir. 1998). 16 As an initial matter, this Court must determine whether the proffered witness is qualified 17 as an expert by “knowledge, skill, experience, training or education.” Fed. R. Evid. 702. Because 18 19 the Rule “contemplates a broad conception of expert qualifications,” only a “minimal foundation 20 of knowledge, skill, and experience” is required. Hangarter v. Provident Life & Accident Ins. 21 Co., 373 F.3d 998, 1015-16 (9th Cir. 2004) (emphasis in original) (quoting Thomas v. Newton 22 Int’l Enters., 42 F.3d 1266, 1269 (9th Cir. 1994)). A “lack of particularized expertise goes to the 23 weight of [the] testimony, not its admissibility.” United States v. Garcia, 7 F.3d 885, 890 (9th 24 25 Cir. 1993) (citing United States v. Little, 753 F.2d 1420, 1445 (9th Cir. 1984)); Daubert v. Merrell 26 Dow Pharm., Inc. (“Daubert II”), 43 F.3d 1311, 1315 (9th Cir. 1995). 27 28 The trial court must also ensure that the proffered expert testimony is reliable. Generally, 1 2 to satisfy Rule 702’s reliability requirement, “the party presenting the expert must show that the 3 expert’s findings are based on sound science, and this will require some objective, independent 4 validation of the expert’s methodology.” Daubert II, 43 F.3d at 1316. Toward this end, the 5 Supreme Court in Daubert I set forth the following factors for the trial court to consider when 6 assessing the reliability of proffered expert testimony: (1) whether the expert’s method, theory, 7 8 or technique is generally accepted within the relevant scientific community; (2) whether the 9 method, theory, or technique can be (and has been) tested; (3) whether the method, theory, or 10 technique has been subjected to peer review and publication; and (4) the known or potential rate 11 of error of the method, theory, or technique. Daubert I, 509 U.S. at 593-94. An expert opinion 12 13 is reliable if it is based on proper methods and procedures rather than “subjective belief or 14 unsupported speculation.” Id. at 590. The test for reliability “‘is not the correctness of the 15 expert’s conclusions but the soundness of his methodology.’” Stilwell v. Smith & Nephew, Inc., 16 482 F.3d 1187, 1192 (9th Cir. 2007) (quoting Daubert II, 43 F.3d at 1318). 17 Alternative or opposing opinions or tests do not “preclude the admission of the expert’s 18 19 testimony – they go to the weight, not the admissibility.” Kennedy v. Collagen Corp., 161 F.3d 20 1226, 1231 (9th Cir. 1998). Furthermore, “‘[d]isputes as to the strength of [an expert’s] 21 credentials, faults in his use of [a particular] methodology, or lack of textual authority for his 22 opinion, go to the weight, not the admissibility, of his testimony.’” Id. (quoting McCullock v. 23 H.B. Fuller Co., 61 F.3d 1038, 1044 (2d Cir. 1995)). 24 25 Finally, the Court must ensure that the proffered expert testimony is relevant.
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5 UNITED STATES DISTRICT COURT AT SEATTLE 7
8 SPEARMAN CORPORATION Case No. C20-13RSM 9 MARYSVILLE DIVISION and SPEARMAN CORPORATION KENT ORDER DENYING MOTION TO 10 DIVISION, EXCLUDE CERTAIN TESTIMONY OF Plaintiff, LORRAINE BARRICK 12 13 v.
15 Defendant. 16 I. INTRODUCTION 17 This matter comes before the Court on Plaintiff Spearman Corporation Marysville 18 19 Division and Spearman Corporation Kent Division (“Spearman”)’s Motion to Exclude Certain 20 Testimony of Boeing Proposed Expert Lorraine Barrick. Dkt. #131. Defendant Boeing opposes 21 Plaintiff’s Motion. Dkt. #145. The Court has determined that oral argument is unnecessary. For 22 the following reasons, the Court DENIES Plaintiff’s Motion to Exclude. 23 II. BACKGROUND 24 25 This is a contract dispute involving Spearman and Boeing. This Court has previously 26 dismissed several of the Plaintiff’s claims, and its breach of good faith and fair dealing claim is 27 still remaining. Dkt. #190. 28 Defendant provides Lorraine Barrick as an expert to opine on Spearman’s financial 1 2 conditions and analyze Boeing’s counterclaim damages. See Dkt. #132-2. Ms. Barrick is a 3 Certified Public Accountant, with experience in analyzing financial records and evaluating claims 4 for financial damages. Id. at 8. 5 Ms. Barrick summarized her opinions as follows: 6 1. Spearman was losing money even before its contract with 7 Boeing and its financial problems are not attributable to Boeing. 8 2. Financial statements provided to Boeing were inadequate and 9 misrepresented Spearman’s financial health.
10 3. Mr. Spearman comingled his personal and business assets and 11 liabilities.
12 4. Boeing’s damages claim includes Boeing’s cost to cover undue 13 balances for material sold to Spearman, and to cover excess costs to manufacture products internally and through other 14 suppliers.
15 5. Plaintiffs’ damages claims are inadequately presented. 16 See Dkt. #132-2 at 13. 17 III. DISCUSSION 18 19 A. Legal Standard 20 Federal Rule of Evidence 702 provides that a witness who is qualified as an expert by 21 knowledge, skill, experience, training, or education may testify in the form of an opinion or 22 otherwise if: 23 (a) the expert’s scientific, technical, or other specialized knowledge will help the trier of 24 fact to understand the evidence or to determine a fact in issue; 25 (b) the testimony is based on sufficient facts or data; (c) the testimony is the product of reliable principles and methods; and 26 (d) the expert has reliably applied the principles and methods to the facts of the case.
27 28 Under Rule 702, the trial court acts as a gatekeeper and ensures that the proffered scientific 1 2 testimony meets certain standards of both relevance and reliability before it is admitted. Daubert 3 v. Merrell Dow Pharm., Inc. ("Daubert I"), 509 U.S. 579, 590, 113 S. Ct. 2786, 125 L. Ed. 2d 4 469 (1993). The party proffering expert testimony has the burden of showing the admissibility 5 of the testimony by a preponderance of the evidence. Daubert I, 509 U.S. at 592 n.10. “[J]udges 6 are entitled to broad discretion when discharging their gatekeeping function” related to the 7 8 admission of expert testimony. United States v. Hankey, 203 F.3d 1160, 1168 (9th Cir. 2000) 9 (citing Kumho Tire Co. v. Carmichael, 526 U.S. 137, 150-53, 119 S. Ct. 1167, 143 L. Ed. 2d 238 10 (1999)). The Court considers four factors to determine if expert testimony will assist the trier of 11 fact: “(i) whether the expert is qualified; (ii) whether the subject matter of the testimony is proper 12 13 for the jury’s consideration; (iii) whether the testimony conforms to a generally accepted 14 explanatory theory; and (iv) whether the probative value of the testimony outweighs its prejudicial 15 effect.” Scott v. Ross, 140 F.3d 1275, 1285-86 (9th Cir. 1998). 16 As an initial matter, this Court must determine whether the proffered witness is qualified 17 as an expert by “knowledge, skill, experience, training or education.” Fed. R. Evid. 702. Because 18 19 the Rule “contemplates a broad conception of expert qualifications,” only a “minimal foundation 20 of knowledge, skill, and experience” is required. Hangarter v. Provident Life & Accident Ins. 21 Co., 373 F.3d 998, 1015-16 (9th Cir. 2004) (emphasis in original) (quoting Thomas v. Newton 22 Int’l Enters., 42 F.3d 1266, 1269 (9th Cir. 1994)). A “lack of particularized expertise goes to the 23 weight of [the] testimony, not its admissibility.” United States v. Garcia, 7 F.3d 885, 890 (9th 24 25 Cir. 1993) (citing United States v. Little, 753 F.2d 1420, 1445 (9th Cir. 1984)); Daubert v. Merrell 26 Dow Pharm., Inc. (“Daubert II”), 43 F.3d 1311, 1315 (9th Cir. 1995). 27 28 The trial court must also ensure that the proffered expert testimony is reliable. Generally, 1 2 to satisfy Rule 702’s reliability requirement, “the party presenting the expert must show that the 3 expert’s findings are based on sound science, and this will require some objective, independent 4 validation of the expert’s methodology.” Daubert II, 43 F.3d at 1316. Toward this end, the 5 Supreme Court in Daubert I set forth the following factors for the trial court to consider when 6 assessing the reliability of proffered expert testimony: (1) whether the expert’s method, theory, 7 8 or technique is generally accepted within the relevant scientific community; (2) whether the 9 method, theory, or technique can be (and has been) tested; (3) whether the method, theory, or 10 technique has been subjected to peer review and publication; and (4) the known or potential rate 11 of error of the method, theory, or technique. Daubert I, 509 U.S. at 593-94. An expert opinion 12 13 is reliable if it is based on proper methods and procedures rather than “subjective belief or 14 unsupported speculation.” Id. at 590. The test for reliability “‘is not the correctness of the 15 expert’s conclusions but the soundness of his methodology.’” Stilwell v. Smith & Nephew, Inc., 16 482 F.3d 1187, 1192 (9th Cir. 2007) (quoting Daubert II, 43 F.3d at 1318). 17 Alternative or opposing opinions or tests do not “preclude the admission of the expert’s 18 19 testimony – they go to the weight, not the admissibility.” Kennedy v. Collagen Corp., 161 F.3d 20 1226, 1231 (9th Cir. 1998). Furthermore, “‘[d]isputes as to the strength of [an expert’s] 21 credentials, faults in his use of [a particular] methodology, or lack of textual authority for his 22 opinion, go to the weight, not the admissibility, of his testimony.’” Id. (quoting McCullock v. 23 H.B. Fuller Co., 61 F.3d 1038, 1044 (2d Cir. 1995)). 24 25 Finally, the Court must ensure that the proffered expert testimony is relevant. As 26 articulated in Rule 702, expert testimony is relevant if it assists the trier of fact in understanding 27 evidence or in determining a fact in issue. Daubert I, 509 U.S. at 591. Thus, the party proffering 28 such evidence must demonstrate a valid scientific connection, or “fit,” between the evidence and 1 2 an issue in the case. Id. Expert testimony is inadmissible if it concerns factual issues within the 3 knowledge and experience of ordinary lay people because it would not assist the trier of fact in 4 analyzing the evidence. In the Ninth Circuit, “[t]he general test regarding the admissibility of 5 expert testimony is whether the jury can receive ‘appreciable help’ from such testimony.” United 6 States v. Gwaltney, 790 F.2d 1378, 1381 (9th Cir. 1986). Because unreliable and unfairly 7 8 prejudicial expert witness testimony is not helpful to the trier of fact, the trial court should exclude 9 such evidence. Jinro Am., Inc. v. Secure Invs., Inc., 266 F.3d 993, 1004 (9th Cir. 2001). Likewise, 10 expert testimony that merely tells the jury what result to reach is inadmissible. Fed. R. Evid. 704, 11 Advisory Committee Note (1972); see, e.g., United States v. Duncan, 42 F.3d 97, 101 (2d Cir. 12 13 1994) (“When an expert undertakes to tell the jury what result to reach, this does not aid the jury 14 in making a decision, but rather attempts to substitute the expert’s judgment for the jury’s”). 15 B. Analysis 16 Plaintiff seeks to exclude portions of Ms. Barrick’s testimony arguing that her opinions 17 regarding Spearman’s financial status and cover damages are incomplete, irrelevant, and rely on 18 19 flawed methodology. See Dkt. #131 at 2. 20 1. Qualification 21 Plaintiff argues that while Ms. Barrick has expertise in accounting principles, she does not 22 have specific knowledge related to decision-making practices in the aerospace industry. See Dkt. 23 #131 at 5. After reviewing the submitted materials, the Court finds Ms. Barrick qualified to opine 24 25 regarding Plaintiff’s financial condition prior to contracting with Boeing and the counterclaim 26 damages. Because Rule 702 contemplates a broad conception of expert qualifications, only a 27 “minimal foundation of knowledge, skill, and experience” is required. Hangarter, supra. The 28 Court’s review of the attached exhibits demonstrates Ms. Barrick has the necessary foundation as 1 2 to this issue. 3 2. Reliability and Relevance 4 i. Barrick’s opinion about Spearman’s financial status 5 Plaintiff asserts that Ms. Barrick’s opinion regarding Spearman’s financial condition is 6 prejudicial and irrelevant. Spearman opines that Boeing chose to award the contracts in dispute 7 8 to Spearman—knowing about its unstable financial situation, business model, and comingling of 9 assets— simply because Spearman was offering lower prices. Thus, they argue, it is irrelevant if 10 Spearman’s financials were “really high risk instead of just high risk.” See Dkt. #131 at 11. 11 The Court disagrees. Ms. Barrick’s opinions related to Spearman’s financial position, 12 13 financial misstatements to Boeing, and comingling of assets and liabilities are relevant because 14 they relate to the outstanding claims for damages and Spearman’s claim that Boeing caused its 15 financial problems. Daubert I, 509 U.S. at 591. As a Certified Public Accountant, Ms. Barrick 16 analyzes and summarizes Plaintiff’s financial data, which will help the jury in evaluating any 17 evidence related to the outstanding claims in the case. 18 19 Next Plaintiff argues that Ms. Barrick’s opinions are unreliable, and her methodology is 20 flawed. They point to Barrick’s deposition admissions, asserting that Ms. Barrick was neither 21 knowledgeable about Boeing’s internal practices (related to contract awards), nor did she rely on 22 them in forming her opinion. See Dkt. #131 at 7. Plaintiff argues that Ms. Barrick ignored 23 evidence of Boeing’s knowledge of Spearman’s financial condition, failed to conduct a complete 24 25 audit of Spearman’s books and records, and speculates to make Spearman’s financial data worse 26 than it was. Id. at 8-11. Additionally, Spearman contests Ms. Barrick’s methodology in valuing 27 its assets. Id. 28 The Court will not question Ms. Barrick’s use of accounting principles to assess 1 2 Spearman’s financials. Ms. Barrick does not appear to be basing her opinions solely on subjective 3 belief. The parties’ opposing opinions about Ms. Barrick’s conclusions will also not serve as a 4 basis to exclude opinion testimony. The alleged “flaws” all go to the weight, not admissibility of 5 the testimony. Plaintiff is free to attack Ms. Barrick’s opinion on cross-examination and make 6 relevance objections. 7 8 ii. Barrick’s opinion about “cover” damages
9 Plaintiff also contests Ms. Barrick’s methodology in calculating damages by comparing 10 prices for parts awarded to Spearman with those awarded to cover suppliers, opining that her 11 underlying data was incomplete, unadjusted, and unverified. See Dkt. #131 at 12. The Court will 12 13 not question the accuracy of Ms. Barrick’s data at this stage because such challenges go to the 14 weight, not admissibility of the testimony. 15 17 Given all of the above, the Court finds no basis to exclude Ms. Barrick’s testimony. 18 Having reviewed the above Motions and the remainder of the record, the Court hereby finds and 19 ORDERS that Plaintiff’s Motion to Exclude Certain Testimony of Boeing Proposed Expert 20 Lorraine Barrick, Dkt. #131, is DENIED. 21 22 23 DATED this 20th day of October 2022.
24 A 25 UNITED STATES DISTRICT JUDGE 27 28