United States Gypsum Co. v. Lafarge North America Inc.

670 F. Supp. 2d 737, 2009 U.S. Dist. LEXIS 99769, 2009 WL 3598329
CourtDistrict Court, N.D. Illinois
DecidedOctober 27, 2009
DocketNo. 03 C 6027
StatusPublished
Cited by7 cases

This text of 670 F. Supp. 2d 737 (United States Gypsum Co. v. Lafarge North America Inc.) is published on Counsel Stack Legal Research, covering District Court, N.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States Gypsum Co. v. Lafarge North America Inc., 670 F. Supp. 2d 737, 2009 U.S. Dist. LEXIS 99769, 2009 WL 3598329 (N.D. Ill. 2009).

Opinion

MEMORANDUM OPINION AND ORDER

REBECCA R. PALLMEYER, District Judge.

In this lawsuit, pending since 2003, Plaintiff United States Gypsum Company (“USG”) claims that Defendants Lafarge North America, Inc. (“Lafarge”), Lafarge’s parent company, and several Lafarge employees, have infringed USG’s patents and stolen confidential information relating to wallboard manufacture. Before the court are motions to bar the testimony of the [739]*739parties’ expert witnesses pursuant to Federal Rule of Evidence 702 and the Supreme Court’s opinion in Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993).

DISCUSSION

Plaintiff has moved in limine (No. 3)[598] to exclude the testimony of Defendants’ proffered damages expert, Mark Peterson. The court simultaneously considers Defendants’ substituted motion in limine (No. 7)[566] to preclude the testimony of Plaintiffs proffered damages expert Julie Davis. For the reasons set forth here, Plaintiffs motion [598] is denied, and Defendants’ motion [566] is granted in part and denied in part. The factual background has been presented earlier, see United States Gypsum Co. v. LaFarge North America, Inc., 508 F.Supp.2d 601 (N.D.Ill.2007), and the standards governing the pending motions were presented in a companion ruling of today’s date. Those facts, and the legal standards, will not be repeated here, but the court assumes familiarity with those previous orders.

I. Expert Qualifications

Under Rule 702, a witness can be qualified as an expert by “knowledge, skill, experience, training, or education.... ” Fed.R.Evid. 702. “Accordingly, [courts] consider a proposed expert’s full range of practical experience as well as academic or technical training when determining whether that expert is qualified to render an opinion in a given area.” Smith v. Ford Motor Co., 215 F.3d 713, 718 (7th Cir.2000). The parties here do not contest the qualifications of either prospective damages expert as a general matter. Rather, each party suggests that the other’s proffered expert is ill-suited or unqualified to reliably render some specific facet of his or her expert opinion. The court will address these arguments in the next section, but first merely summarizes the proposed experts’ general qualifications.

A. Julie Davis’s Qualifications

Julie Davis is a qualified expert in computation and assessment of damages in intellectual property cases. She has been providing audit and financial consulting services for nearly thirty years. (Davis 06/18/007 Expert Report at 1.) Ms. Davis graduated summa cum laude from Kansas State University with a Bachelor of Science degree in Business Administration and Accounting in 1978. (Id.) She is a Certified Public Accountant, earning the Gold Key for the highest score on the CPA exam in Kansas in 1978. (Id.) She has previously testified in numerous intellectual property cases and has conducted professional studies evaluating lost sales, lost profits, incremental profits, manufacturing and marketing capacities, fixed and variable costs, product line profitability, price erosion, reasonable royalty, unjust enrichment, and prejudgment interest. (Id.) She has coauthored a book on best practices in managing intellectual property and several other publications (Id.) She is a member of the American Institute of Certified Public Accountants, the American Bar Association, and the Licensing Executives Society. (Id.)

B. Mark Peterson’s Qualifications

The court is similarly satisfied that Mark Peterson is qualified to give expert testimony concerning the computation and assessment of damages in intellectual property cases. For over 15 years, Peterson has been the chief executive officer of Robinwood Consulting, a firm specializing in dispute analysis and litigation support. (Peterson Dep. 6:6-15; Peterson 8/24/07 Expert Report at 3.) Prior to founding Robinwood Consulting in 1994, Peterson [740]*740was Vice-President of Peterson Consulting Limited. In both positions, Peterson consulted on valuation of intellectual property. (Id.) He has previously testified in approximately 15 trials as an expert on lost profits, reasonable royalties, price erosion, convoyed sales,1 market share and other economic considerations affecting intellectual property valuation. (Peterson 8/24/07 Expert Report at 3.) Peterson was also formerly an auditor with the Chicago Board of Trade’s Office of Investigations and Audits. (Peterson Dep. 6-7.) He is a Certified Public Accountant in Illinois. (Id.) He holds degrees in accounting and economics from Ohio University. (Id.) He helped create a training program and has conducted educational seminars on intellectual property for the Licensing Executive Society, an organization in which he has served as Trustee, Treasurer, and Executive Committee Member. (Id. at 8; Peterson 8/24/07 Expert Report at 3.)

II. The Daubert Standard: Reliability and Relevancy

The admissibility of expert testimony depends on more than just whether the potential witness qualifies as an expert. The court must also determine that the proffered expert opinions are more than mere speculation or conjecture, but have at their core some reliable basis.2 In addition to reliability, the court must decide whether expert testimony is relevant by determining “whether evidence or testimony assists the trier of fact in understanding the evidence or in determining a fact in issue.” Cummins v. Lyle Indus., 93 F.3d 362, 368 (7th Cir.1996) (internal citations and quotations omitted); see also Daubert, 509 U.S. at 591, 113 S.Ct. 2786. The court turns to the question of whether the opinions offered by Peterson and Davis are reliable and will assist the trier of fact.

A. Julie Davis’s Opinions

1. Unjust Enrichment and Lafarge’s Viability

Plaintiff retained Julie Davis to opine on the extent of Plaintiffs damages, assuming Plaintiff prevailed on its various claims. Davis’s assessment presents several alternative damage calculations based on different assumptions and legal standards of recovery, ranging from lost profits to reasonable royalties to unjust enrichment. Initially, Davis posits a scenario in which “Lafarge would have been unable to sell any of its wallboard without the use of USG’s confidential, proprietary and trade secret information.” (Davis 06/18/07 Expert Report at 28.) In scenario # 2, Davis assumes Lafarge would only have been able to sell wallboard “based on production levels experienced at its [low-speed] Buchanan and Wilmington plants prior to [the] use of USG” information. (Id.

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Bluebook (online)
670 F. Supp. 2d 737, 2009 U.S. Dist. LEXIS 99769, 2009 WL 3598329, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-gypsum-co-v-lafarge-north-america-inc-ilnd-2009.