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Wal-Mart Stores, Inc. v. Cuker Interactive, LLC

United States District Court, W.D. Arkansas, Fayetteville Division

November 29, 2016

WAL-MART STORES, INC. PLAINTIFF/ COUNTER-DEFENDANT
v.
CUKER INTERACTIVE, LLC DEFENDANT/ COUNTER-CLAIMANT

          MEMORANDUM OPINION AND ORDER

          TIMOTHY L. BROOKS UNITED STATES DISTRICT JUDGE

         Currently before the Court are Plaintiff Wal-Mart Stores, Inc.'s ("Walmart") Motion to Disqualify Dr. Patrick Kennedy as an Expert and to Exclude His Testimony (Doc. 137) and Brief in Support (Doc. 138-1), Defendant Cuker Interactive, LLC's ("Cuker") Response in Opposition (Doc. 152-3), and Walmart's Reply (Doc. 160). For the reasons given below, Walmart's Motion is DENIED.

         I. BACKGROUND

         In January 2014, Walmart and Cuker signed a contract under which Walmart agreed to pay Cuker a fixed fee of $577, 719, in exchange for Cuker's provision of certain services to help make the website for Walmart's "ASDA Groceries" business responsive irrespective of the device on which it is being viewed, such as a desktop or a mobile phone. See Doc. 124-7, pp. 8, 17. The relationship between Walmart and Cuker quickly soured, with recriminations being exchanged, and ultimately the instant lawsuit was filed. Among the claims at issue in this case are counterclaims by Cuker against Walmart for breach of contract, fraudulent inducement, and unjust enrichment. Essentially, Cuker seeks to recover damages from Walmart for work it provided Walmart that Cuker contends is outside the contract's scope of work. Cuker has retained Dr. Kennedy, an economist, to provide expert opinions in support of its claims for damages. Walmart has moved to disqualify Dr. Kennedy as an expert in this case; this motion has been fully briefed and is now ripe for decision.

         II. LEGAL STANDARD

         The decision whether to exclude expert testimony is committed to a district court's discretion-subject, of course, to the Federal Rules of Evidence, including Rule 702. Johnson v. Mead Johnson & Co., LLC, 754 F.3d 557, 561 (2014). Rule 702 states that:

A witness who is qualified as an expert by knowledge, skill, experience, training, or education may testify in the form of an opinion or otherwise 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.

         The Eighth Circuit has "boiled down" these requirements into a three-part test:

First, evidence based on scientific, technical, or other specialized knowledge must be useful to the finder of fact in deciding the ultimate issue of fact. This is the basic rule of relevancy. Second, the proposed witness must be qualified to assist the finder of fact. Third, the proposed evidence must be reliable or trustworthy in an evidentiary sense, so that, if the finder of fact accepts it as true, it provides the assistance the finder of fact requires.

Johnson, 754 F.3d at 561 (quoting Polski v. Quigley Corp., 538 F.3d 836, 839 (8th Cir. 2008)).

         The proponent of expert testimony bears the burden of showing by a preponderance of the evidence that these requirements are satisfied, but "[c]ourts should resolve doubts regarding the usefulness of an expert's testimony in favor of admissibility." See Marmo v. Tyson Fresh Meats, Inc., 457 F.3d 748, 757-58 (8th Cir. 2006). Nevertheless, "a court should not admit opinion evidence that 'is connected to existing data only by the ipse dixit of the expert.'" Id. at 758 (quoting Gen. Elec. Co. v. Joiner, 522 U.S. 136, 146(1997)).

         III. DISCUSSION

         Walmart contends that Dr. Kennedy should be disqualified as an expert because his report is (1) not based on any scientific, technical, or other specialized knowledge, (2) based on unfounded assumptions and speculation, and (3) not relevant or useful to any ultimate issue of fact. As to the absence of specialized knowledge, Walmart argues that Dr. Kennedy "does not have any expertise in the field of software development, " and that he has "no specialized knowledge . .. regarding the pricing of responsive website development services." (Doc. 138-1, p. 7). This would be a fine argument against permitting an economist to provide opinion testimony about software. Cf. Hartford Fire Ins. Co. v. Harris Co. of Ft. Smith, Inc., 2015 WL 7067806, at *3 (W.D. Ark. Nov. 12 2015) (holding that an architect was not competent to provide expert testimony on certain structural engineering matters). But software is not the subject on which Dr. Kennedy would opine; his opinion is being offered on damages, which is obviously a matter for which economic expertise can be useful. Walmart also argues that "[n]one of Dr. Kennedy's analysis relies on his economic background, " but that rather he has simply "performed a series of simple arithmetic calculations." (Doc. 138-1, p. 7). However, the Eighth Circuit has explicitly held that "[t]here is not... an implicit requirement in Fed.R.Evid. 702 for the proffered expert to make complicated mathematical calculations." WWP, Inc. v. Wounded Warriors Family Support, Inc., 628 F.3d 1032, 1040 (8th Cir. 2011) (emphasis in original).

         As to the issue of unfounded assumptions and speculation, Walmart makes two specific arguments: first, that Dr. Kennedy made an unfounded assumption of how much time Cuker spent working on the project at issue in this case, (Doc. 138-1, pp. 8-13), and second, that Dr. Kennedy unreasonably relied on only one comparator contract when forming his opinion on the value of Cuker's work for Walmart, see Id. at 13-14. The first of these arguments is easily disposed of. While Walmart contends Dr. Kennedy failed to consider Cuker's internal records of how many hours were spent on the project, it is perfectly clear from Dr. Kennedy's report and his deposition testimony that he did consider them and concluded they were unreliable because they had been incompletely and lackadaisically compiled (due to the instant contract being a fixed-fee arrangement rather than one for hourly compensation), and accordingly grounded his calculations instead ...


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