CellMark, Inc. v. Robert Webster, et al.

Summary

The United States District Court for the Eastern District of Kentucky addresses motions by Robert Webster and the Fortex defendants to exclude the damages testimony of CellMark’s expert, Jay Cunningham. The court excludes Cunningham’s disgorgement calculation as unhelpful basic arithmetic and excludes his unsupported seven-month transition period for lost-profit damages, but declines to exclude his overall lost-profits methodology or his opinions concerning Camelot/Integrity and Multi-Color Corporation. The motions are granted in part and denied in part.

Holdings

1. Cunningham may not testify as an expert about the amount of disgorgement because his analysis consisted of adding figures from a payroll spreadsheet, a task within the jury's common knowledge and not helpful to the jury.
2. Cunningham's overall lost-profits testimony is not subject to wholesale exclusion because his but-for methodology was generally reliable and the asserted weaknesses concerning causation, market conditions, inflation, customer attrition, and assumptions primarily affect the weight of the testimony.
3. Cunningham may not testify about a seven-month transition period following expiration of Webster's noncompete or present damages opinions incorporating that period.
4. The court declined to exclude Cunningham's lost-profits testimony concerning Camelot Paper and Integrity Fiber Supply because the opinion had some evidentiary foundation and was debatable rather than demonstrably unreliable.
5. The court declined to exclude Cunningham's testimony concerning Multi-Color Corporation, inflation, industry conditions, and paper-industry customs and standards, while preserving Defendants' ability to challenge the assumptions and reliability at trial.

Questions Presented

1. Whether Cunningham's disgorgement opinion was inadmissible because it merely performed arithmetic that was within the jury's common knowledge.
2. Whether Cunningham's overall but-for lost-profits methodology was so unreliable that all of his lost-profits testimony should be excluded.
3. Whether Cunningham's seven-month post-noncompete transition period was based on sufficient facts or data and a reliable application of methodology.
4. Whether Cunningham's lost-profits opinions concerning Camelot Paper/Integrity Fiber Supply and Multi-Color Corporation were too speculative to be admitted.
5. Whether Cunningham could testify about inflation, industry customs, and standards affecting his lost-profits analysis.

Disposition

other