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Aim Recycling Florida, LLC v. Metals USA, Inc.,

United States District Court, S.D. Florida

January 14, 2020


          Valle, Judge



         THIS CAUSE is before the Court upon Defendants Metals USA, Inc. (“Metals USA”) and Obed Lendian's (“Lendian”) (collectively, “Defendants”)[1] Motion to Exclude Testimony of Richard Brady, ECF No. [223] (“Defendants' Motion”), and Plaintiffs AIM Recycling of Florida, LLC (“AIM”) and LKQ Pick Your Part Southeast, LLC's (“LKQ”) (collectively, “Plaintiffs”) Daubert[2] Motion to Exclude Certain Testimony of Defendants' Rebuttal Expert, Thomas McRee, ECF No. [255] (“Plaintiffs' Motion”), (collectively, the “Motions”). The Court has carefully reviewed the Motions, all opposing and supporting submissions, the attached exhibits, the record in this case, the applicable law, and is otherwise fully advised. For the reasons set forth below, Defendants' Motion is denied, and Plaintiffs' Motion is denied.

         I. BACKGROUND

         Plaintiffs initiated the instant RICO[3] action on February 9, 2018, ECF No. [1], and they filed their Amended Complaint on April 10, 2018, against Metals USA, Universal, Lendian, and Abreu, alleging a multi-year conspiracy to steal valuable scrap metal from Plaintiffs' facility, ECF No. [24] (“Amended Complaint”).[4] Plaintiffs' Amended Complaint asserts five counts: Count I (Civil RICO - Violations of 18 U.S.C. § 1962(c)); Count II (Civil RICO Conspiracy - Violations of 18 U.S.C. § 1962(d)); Count III (Florida Civil RICO and Remedies for Criminal Activities); Count IV (Florida Civil RICO and Remedies for Criminal Activities - Conspiracy); and Count V (Unjust Enrichment). Id.[5] Plaintiffs seek all actual and consequential damages, including treble damages, arising from the conduct alleged in the Amended Complaint. Id.

         The parties have filed the instant Motions seeking to exclude expert witness and rebuttal expert testimony. Defendants' Motion seeks to exclude the testimony of Plaintiffs' expert witness, Richard Brady (“Mr. Brady”), pursuant to Daubert, Kumho Tire Co. v. Carmichael, [6] and Federal Rules of Evidence 403 and 702. Defendants set forth three arguments as to why Mr. Brady's testimony should be excluded: (1) Mr. Brady's damages calculation is based exclusively on a spreadsheet prepared by Plaintiffs, and he did not conduct any independent investigation or analysis to confirm the accuracy of the information in the spreadsheet; (2) Mr. Brady's methodology for calculating damages is flawed and inherently unreliable; and (3) Mr. Brady's education, training, and experience do not qualify him to render a lost profit calculation. See ECF No. [223]. Plaintiffs' Motion seeks to exclude certain portions of the testimony of Defendants' rebuttal expert, Thomas McRee (“Mr. McRee”), pursuant to Daubert and its progeny, because, in addition to his rebuttal opinions, he intends to offer non-rebuttal opinions, which are unhelpful and impermissible legal conclusions for which he lacks the requisite qualifications. See ECF No. [255]. Plaintiffs also note that Mr. McRee's testimony should be excluded because, during his deposition, Mr. McRee withdrew certain opinions previously offered after reviewing translated transcripts of audio recordings of allegedly incriminating telephone conversations between Lendian and Abreu.

         The Court will address each Motion in turn.


         Federal Rule of Evidence 702 governs the admissibility of expert testimony. When a party proffers the testimony of an expert under Rule 702, the party offering the expert testimony bears the burden of laying the proper foundation, and that party must demonstrate admissibility by a preponderance of the evidence. See Rink v. Cheminova, Inc., 400 F.3d 1286, 1291-92 (11th Cir. 2005); Allison v. McGhan Med. Corp., 184 F.3d 1300, 1306 (11th Cir. 1999). To determine whether expert testimony or any report prepared by an expert may be admitted, the Court engages in a three-part inquiry, which includes whether: (1) the expert is qualified to testify competently regarding the matters he intends to address; (2) the methodology by which the expert reaches his conclusions is sufficiently reliable; and (3) the testimony assists the trier of fact, through the application of scientific, technical, or specialized expertise, to understand the evidence or to determine a fact in issue. See City of Tuscaloosa v. Harcros Chems., Inc., 158 F.3d 548, 562 (11th Cir. 1998) (citing Daubert, 509 U.S. at 589). The Court of Appeals for the Eleventh Circuit refers to each of these requirements as the “qualifications, ” “reliability, ” and “helpfulness” prongs. United States v. Frazier, 387 F.3d 1244, 1260 (11th Cir. 2004). While some overlap exists among these requirements, the court must individually analyze each concept. See id.

         An expert in this Circuit may be qualified “by knowledge, skill, experience, training, or education.” J.G. v. Carnival Corp., No. 12-21089-CIV, 2013 WL 752697, at *3 (S.D. Fla. Feb. 27, 2013) (citing Furmanite Am., Inc. v. T.D. Williamson, 506 F.Supp.2d 1126, 1129 (M.D. Fla. 2007); Fed.R.Evid. 702). “An expert is not necessarily unqualified simply because [his] experience does not precisely match the matter at hand.” Id. (citing Maiz v. Virani, 253 F.3d 641, 665 (11th Cir. 2001)). “[S]o long as the expert is minimally qualified, objections to the level of the expert's expertise go to credibility and weight, not admissibility.” See Clena Invs., Inc. v. XL Specialty Ins. Co., 280 F.R.D. 653, 661 (S.D. Fla. 2012) (citing Kilpatrick v. Breg, Inc., No. 08-10052-CIV, 2009 WL 2058384, at *1 (S.D. Fla. June 25, 2009)). “After the district court undertakes a review of all of the relevant issues and of an expert's qualifications, the determination regarding qualification to testify rests within the district court's discretion.” J.G., 2013 WL 752697, at *3 (citing Berdeaux v. Gamble Alden Life Ins. Co., 528 F.2d 987, 990 (5th Cir. 1976)).[7]

         When determining whether an expert's testimony is reliable, “the trial judge must assess whether the reasoning or methodology underlying the testimony is scientifically valid and . . . whether that reasoning or methodology properly can be applied to the facts in issue.” Frazier, 387 F.3d at 1261-62 (citation omitted) (quotation marks omitted). To make this determination, the district court examines: “(1) whether the expert's theory can be and has been tested; (2) whether the theory has been subjected to peer review and publication; (3) the known or potential rate of error of the particular scientific technique; and (4) whether the technique is generally accepted in the scientific community.” Id. (citing Quiet Tech. DC-8, Inc. v. Hurel-Dubois, UK Ltd., 326 F.3d 1333, 1341 (11th Cir. 2003)). “The same criteria that are used to assess the reliability of a scientific opinion may be used to evaluate the reliability of non-scientific, experience-based testimony.” Id. at 1262 (citing Kumho Tire Co., 526 U.S. at 152). Thus, these factors are non-exhaustive, and the Eleventh Circuit has emphasized that alternative questions may be more probative in the context of determining reliability. See Id. Consequently, trial judges are afforded “considerable leeway” in ascertaining whether a particular expert's testimony is reliable. Id. at 1258 (citing Kumho Tire Co., 526 U.S. at 152).

         The final element, helpfulness, turns on whether the proffered testimony “concern[s] matters that are beyond the understanding of the average lay person.” Edwards v. Shanley, 580 Fed.Appx. 816, 823 (11th Cir. 2014) (quoting Frazier, 387 F.3d at 1262). “[A] trial court may exclude expert testimony that is ‘imprecise and unspecific,' or whose factual basis is not adequately explained.” Id. (quoting Cook ex rel. Estate of Tessier v. Sheriff of Monroe Cty., Fla., 402 F.3d 1092, 1111 (11th Cir. 2005)). To be appropriate, a “fit” must exist between the offered opinion and the facts of the case. McDowell v. Brown, 392 F.3d 1283, 1299 (11th Cir. 2004) (citing Daubert, 509 U.S. at 591). “For example, there is no fit where a large analytical leap must be made between the facts and the opinion.” Id. (citing Gen. Elec. Co. v. Joiner, 522 U.S. 136 (1997)).

         Under Daubert, a district court must take on the role of gatekeeper, but this role “is not intended to supplant the adversary system or the role of the jury.” Quiet Tech., 326 F.3d at 1341 (citations omitted) (quotation marks omitted). Consistent with this function, the district court must “ensure that speculative, unreliable expert testimony does not reach the jury.” McCorvey v. Baxter Healthcare Corp., 298 F.3d 1253, 1256 (11th Cir. 2002). “[I]t is not the role of the district court to make ultimate conclusions as to the persuasiveness of the proffered evidence.” Quiet Tech., 326 F.3d at 1341 (citations omitted) (quotation marks omitted). Thus, the district court cannot exclude an expert based on a belief that the expert lacks personal credibility. Rink, 400 F.3d at 1293, n.7. To the contrary, “vigorous cross-examination, presentation of contrary evidence, and careful instruction on the burden of proof are the traditional and appropriate means of attacking shaky but admissible evidence.” Quiet Tech., 326 F.3d at 1341 (quoting Daubert, 509 U.S. at 596). “Thus, ‘[o]n cross-examination, the opposing counsel is given the opportunity to ferret out the opinion's weaknesses to ensure the jury properly evaluates the testimony's weight and credibility.'” Vision I Homeowners Ass'n, Inc. v. Aspen Specialty Ins. Co., 674 F.Supp.2d 1321, 1325 (S.D. Fla. 2009) (quoting Jones v. Otis Elevator Co., 861 F.2d 655, 662 (11th Cir. 1988)). Ultimately, as noted, “a district court enjoys ‘considerable leeway' in making” evidentiary determinations such as these. Cook, 402 F.3d at 1103 (quoting Frazier, 387 F.3d at 1258).

         Through this lens, the Court analyzes each Motion.


         A. Defendants' Motion

         Defendants seek to exclude the following opinions - which they characterize as either “review-based opinions”[8] or “experience-based opinions”[9] - offered by Mr. Brady:

Opinion 1: Metals USA purchased scrap from Abreu at an average freight-adjusted discount exceeding 38 percent of fair market value on a shipping point basis, Free on Board (“FOB”) Plaintiffs' facility.
Opinion 2: During the period of the alleged thefts, there was no point in time in which Plaintiffs could not have sold the finished shredded product in the open market for a price exceeding what Defendants achieved.
Opinion 3: The loss incurred by Plaintiffs is a function of the selling prices they were able to achieve in the open market on actual sales of shred during the period, considering the foregone sales resulting from the theft of 40, 000 net tons of shred.
Opinion 4: Records of comparable sales achieved by Plaintiffs during the relevant time periods demonstrates that Plaintiffs' total damages in this case are $10, 419, 636.00.
Opinion 5: Metals USA records show instances where the finished product was likely purchased by Metals USA at prices lower than the prices Plaintiffs paid for raw materials ...

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