City of Fort Collins v. Open Int'l

1

CITY OF FORT COLLINS, a Colorado home rule municipality, Plaintiff, v. OPEN INTERNATIONAL, LLC, a Florida limited liability company and OPEN INVESTMENTS, LLC, a Florida limited liability company, Defendants.

Civil Action No. 1:21-cv-02063-CNS-SP

United States District Court, D. Colorado

May 3, 2023

ORDER

Charlotte N. Sweeney, United States District Judge.

Before the Court are: (1) Defendants' Motion to Exclude Opinion Testimony by City's Proffered Non-Retained Expert Michelle Frey (ECF No. 122); (2) Defendants' Motion to Exclude Testimony by City's Damages Expert Ronald Seigneur (ECF No. 150); (3) Defendants' Motion to Exclude Testimony and Opinions of the City's Expert Jon Brock (ECF No. 151); (4) Plaintiff's Motion to Exclude and Limit Opinions of Peter Schulman (ECF No. 152); and (5) Plaintiff's Motion to Exclude Expert Opinion of Defendant's Expert John Hutchinson (ECF No. 153).

I. FACTS

This is a breach-of-contract case arising from Defendants' alleged failure to deliver Open SmartFlex (OSF), a Customer Information System (CIS) software product intended for use in administering Plaintiff's broadband utility services. The instant motions were all filed on January 6, 2023 (ECF Nos. 150, 151, 152, 153), save for one filed on December 19, 2022 (ECF No. 122). A ten-day jury trial is set to commence on October 23, 2023 (ECF No. 214).

Of note, while Defendants' motion pertaining to expert witness Michelle Frey was styled as a “motion to exclude” (see ECF No. 122), the relief Defendants seek really amounts to striking the expert for failure to comply with Federal Rule of Civil Procedure 26's disclosure requirements. As such, while the Court will analyze the motion pertaining to Ms. Frey under Rule 26, it will assess the remaining motions to exclude under Federal Rule of Evidence 702 as well as the standards set forth in Daubert v. Merrell Dow Pharms., Inc., 509 U.S. 579, 590-91 (1993).

II. LEGAL STANDARDS

A. Federal Rule of Civil Procedure 26

Under Rule 26(a)(2), a party must disclose the identity of any witness it may use at trial to present expert testimony. Pertinent here, if the expert witness is not required to provide a written report, the party's disclosure must state: “(i) the subject matter on which the witness is expected to present evidence under Federal Rule of Evidence 702, 703, or 705; and (ii) a summary of the facts and opinions to which the witness is expected to testify.” Fed. R. Civ. Proc. 26(a)(2)(C).

Under Rule 37(c)(1), if a party fails to disclose an expert witness per the requirements of Rule 26(a)(2), the party may not use that witness to supply evidence at trial unless the failure to disclose was substantially justified or harmless. Fed.R.Civ.P. 37(c)(1). The Court has broad discretion in determining whether the Rule 26 violation was substantially justified or harmless, and the court need not make explicit findings on this issue. Woodworker's Supply, Inc. v. Principal Mut. Life Ins. Co., 170 F.3d 985, 993 (10th Cir. 1999) (citations omitted). When exercising its discretion, the Court looks to several factors: “(1) the prejudice and surprise to the party against whom the testimony is offered; (2) the ability of the party to cure the prejudice; (3) the extent to which introducing such testimony would disrupt the trial; and (4) the moving party's bad faith or willfulness.” Id. “A trial court has considerable discretion to determine an appropriate sanction under Rule 37 and the particular circumstances of a given case.” Cartel Asset Mgmt. v. Ocwen Fin. Corp., No. 01-CV-01644-REB-CBS, 2010 WL 502721, at *17 (D. Colo. Feb. 8, 2010) (citation omitted).

B. Federal Rule of Evidence 702

Federal Rule of Evidence 702 governs the admissibility of expert testimony:

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.

Fed. R. Evid. 702; see also Daubert, 509 U.S. at 590-91. The party submitting the expert's testimony must show by a preponderance of the evidence that the testimony is admissible. See, e.g., Bethel v. Berkshire Hathaway Homestate Ins. Co., No. 17-CV-01456-CMA-KLM, 2022 WL 1037572, at *2 (D. Colo. Apr. 1, 2022). To determine whether expert testimony is admissible, a court must determine whether: (1) the expert is qualified; (2) the expert's proffered opinion is reliable; (3) the expert's testimony is relevant; and (4) the proffered testimony will assist the trier of fact. See id. at *2; 103 Invs. I, L.P. v. Square D Co., 470 F.3d 985, 990 (10th Cir. 2006); United States v. Rodriguez-Felix, 450 F.3d 1117, 1122-23 (10th Cir. 2006).

An expert is qualified if they have the “knowledge, skill, experience, training, or education” to render an opinion. Roe v. FCA U.S. LLC, 42 F.4th 1175, 1180 (10th Cir. 2020) (citing Fed.R.Evid. 702).

An expert's testimony is reliable if the methodology employed by the expert is based on “sufficient data, sound methods, and the facts of the case.” Id. (citation omitted). The expert's testimony must be scientifically sound, but “absolute certainty” is not required. Dodge v. Cotter Corp., 328 F.3d 1212, 1222 (10th Cir. 2003) (quotation omitted). Testimony is relevant if it “logically advances a material aspect” of the case and has a “valid scientific connection” to the case's disputed facts. Norris v. Baxter Healthcare Corp., 397 F.3d 878, 884 n.2 (10th Cir. 2005) (citation omitted). The court looks to other non-exclusive factors to determine if the testimony will assist the jury: (1) whether the testimony is relevant; (2) whether it is within the juror's common knowledge and experience; and (3) whether it will usurp the juror's role of evaluating a witness's credibility. Rodriguez-Felix, 450 F.3d at 1123 (citation omitted). Doubts about the testimony's usefulness should be resolved in favor of admissibility unless such factors (e.g., time or surprise) weigh in favor of exclusion. See Robinson v. Missouri Pac. R. Co., 16 F.3d 1083, 1090 (10th Cir. 1994) (quotation omitted).

III. ANALYSIS

A. Plaintiff's Non-Retained Hybrid Expert Michelle Frey (ECF No. 122)

Defendants move to strike Plaintiff's non-retained expert, Michelle Frey, because Plaintiff failed to disclose her opinions per Rule 26(a)(2)(C)(ii) (ECF No. 122 at 2-4). Specifically, Defendants argue that, while Plaintiff properly disclosed “the subject matter on which the [Dr. Frey] is expected to present,” Plaintiff failed to provide “a summary of the facts and opinions to which [Dr. Frey] is expected to testify,” leaving Defendants unable to prepare to cross-examine her (id. at 2). Plaintiff counters that Defendants are already well familiar with Dr. Frey's opinions and involvement in this case-both parties listed Dr. Frey as a fact witness in their initial disclosures, Defendants made numerous allegations related to Dr. Frey's opinions in their counterclaims, and Defendants participated in a deposition of Dr. Frey on October 12, 2022 (ECF No. 155 at 2-7).

Although Defendants appear to have prior familiarity with Dr. Frey's opinions, Rule 26(a)(2)(C) disclosure obligations nevertheless “cannot be ignored or dismissed as a mere formality, and while less demanding [than the disclosure requirements for retained experts], these requirements must still be met.” Nosewicz v. Janosko, No. 1:16-cv-00447-PAB-KLM, 2019 WL 4248895, at *5 (D. Colo. Aug. 19, 2019) (citation omitted). There is, however, “scant case law outlining what constitutes a sufficient disclosure under Rule 26(a)(2)(C).” Seeley v. Home Depot U.S.A., Inc., No. 1:16-cv-00584-PAB-NYW, 2018 WL 4275375, at *4 (D. Colo. Sept. 7, 2018) (citation omitted). At a minimum, though, while a disclosure need not “outline each and every fact to which the non-retained expert will testify or outline the anticipated opinions in great detail,” it must “provide a brief account of the principal facts supporting [the expert's] opinions” in order to “obviate the danger of unfair surprise” regarding the expert's testimony. Id. at *4, *5 (citations and internal quotation marks omitted).

Here, Plaintiff's disclosure outlines the broad contours of Dr. Frey's opinions in six bullet points (see ECF No. 122-1), but it lacks any “account of the principal facts” underlying her opinions. Seeley, 2018 WL 4275375, at *5. Plaintiff is amenable to supplementing its disclosure, however, and the Court agrees with Plaintiff that Defendants have not been prejudiced by the disclosure's insufficiency (ECF No. 155 at 10-14). Accordingly, Defendants' motion to exclude the testimony of Dr. Frey is DENIED. Plaintiff is ORDERED to supplement its disclosure by May 26, 2023, and may not exceed the original scope of the disclosure.

B. Plaintiff's Retained Damages Expert Ronald Seigneur (ECF No. 150)

Ronald Seigneur's expert report identifies and calculates eight categories of damages Plaintiff purportedly suffered due to Defendants' failure to deliver OSF: (1) the replacement cost of the broadband billing solution; (2) the replacement cost of the utilities CIS solution; (3) lost staffing efficiencies for tasks that OSF was supposed to automate; (4) annual overhead expenses that would not exist if OSF worked (5) payments to consulting firms for assistance with the OSF project; (6) lost net revenue; (7) payments to Defendants for OSF's partial development; and (8) labor costs related to OSF's implementation (see ECF No....