Squire Patton Boggs | December 29, 2015
In an opinion filed on December 16, the Sixth Circuit discussed a Daubert question that the court declared to be a “close call,” but ultimately agreed with the district court’s finding that the expert testimony was admissible. The Daubert issue was on appeal as part of a complex case that involved a claim made by Contract Design Group, Inc. (CDG), a commercial floor covering company, claiming that Wayne State University and various university officials breached a contract and violated CDG’s procedural due process. The facts involve a decision by Wayne State to suspend a contract with CDG and bar CDG from doing work for Wayne State in the future because Wayne State became concerned that CDG was in violation of Michigan’s prevailing wage laws.
At trial, CDG used expert testimony from Ted Funke to explain the methodology used by the plaintiffs to estimate damages and to demonstrate the reasonableness of the approach. Funke explained that his calculation of damages was based on information obtained from representatives of CDG and that the final damage total was based on lost gross profits during 41 months following the disbarment of CDG from future Wayne State work. On cross-examination, Funke admitted that his projections for profits from future work with Wayne State were not based on actual contracts between the university and CDG, but were rather based on an assumption that the historical patterns of dealing between the two parties would continue into the future. Wayne State argued that Funke’s testimony should be excluded due to “flawed methodology” and that Funke’s testimony: 1) ignored factors such as the economic downturn or actual order placements; 2) assumed continued work from Wayne State despite a strained relationship; and 3) inappropriately considered gross profits rather than net profits.
Despite admitting that it “wouldn’t say [Funke] was the best expert,” the district court considered the issues with Funke’s testimony impacted the weight of the evidence rather than the admissibility. In its review, the Sixth Circuit explained that the decision rested on a determination of whether the expert testimony was “overtly speculative,” and referenced its past decision in Multimatic, Inc. v. Faurecia Interior Systems USA, Inc. (excluding testimony that involved a ten-year prediction about the fortunes of the automotive industry) and the Fourth Circuit’s decision in MyGallons LLC v. US Bancorp to exclude testimony based on inappropriate credentials and disregard for “real circumstances.”
Despite pointing out that Funke was “hardly a model of precision, the Sixth Circuit determined that the district court had not abused its discretion, finding that “Funke’s failure to consider certain factors… could have reasonably been understood to go to weight rather than admissibility.” This holding illustrates some of the challenges in attacking “‘shaky but admissible evidence’” and the need for appellants in those situations to do more than simply criticize someone as a bad expert.