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Boltex Manufacturing Company, L.P. v. Ulma Piping USA Corp.

United States District Court, S.D. Texas, Houston Division

June 28, 2019

ULMA PIPING USA CORP., et al., Defendants.



         Before the Court is Ulma Forja, S. Coop, also known as Ulma Piping, and Ulma Piping USA Corp.'s (hereinafter collectively referred to as "Ulma" or "Defendants") Motion to Exclude the testimony of Thomas W. Britven ("Britven") (Doc. No. 95). Boltex Manufacturing Company L.P. and Weldbend Corporation (hereinafter collectively referred to as "Plaintiffs") have filed a response (Doc. Nos. 115 [redacted], 116 [sealed]) to which Defendants have replied (Doc. No. 130).


         Britven, a certified public accountant ("CPA"), is Plaintiffs' damages expert. Defendants allege that his testimony should be excluded on the basis of his qualifications (or lack thereof) and also that his opinion is not well-grounded. Daubert v. Merrill Dow Pharms., Inc., 509 U.S. 579 (1993); Kumho Tire Co., Ltdv. Carmichael, 526 U.S. 137 (1999); Fed.R.Evid. 702.


         Defendants' attack on Britven's qualifications and opinions is twofold. First, they argue that in his report he offers legal opinions and conclusions and that, as a CPA, his training does not qualify him to offer such testimony.[1]

         This Court turns first to the fact that in its motion, many of Ulma's complaints are directed specifically at the content of Britven's report. The purpose of an expert's report is to inform and educate the opposing parties about that witness's opinions and the underlying basis for that opinion. The fact that a report contains facts, opinions, conclusions, and/or hearsay that are otherwise inadmissible is not a primary concern to this Court. Absent the agreement of the parties, this Court will not admit the report of any expert into evidence. Reports are, by definition, hearsay. More often than not, reports are filled with other inadmissible facts, opinions, or references. That being the case, the Court is not concerned about extraneous statements included in the report of Britven or any other expert.

         Nevertheless, the Court must be concerned about areas of purported testimony which are clearly inadmissible or outside the scope of an individual's competency. Some of Ulma's complaints about Britven clearly fall into this category. In his report, Britven discusses various legal cases which, in turn, discuss various damage theories and he offers opinions about the appropriate measure of damages in an unfair competition case. These are not proper topics for the jury to consider. Neither Britven nor any other individual (absent extraordinary and currently unforeseen circumstances) will be allowed to offer testimony about the law. This Court, with the appropriate input from the parties, will decide what law controls this case, and it will, at the appropriate time, so instruct the jury. To the extent that Ulma's motion articulates these concerns and seeks to prevent Britven from testifying about applicable law and other legal issues, its motion is granted.

         Defendants voice another more relevant and more substantive concern about Britven's report and anticipated testimony. They contend that many of the opinions Britven purports to offer contain certain conclusions that stray far away from his training and experience as a CPA. They claim that Britven's training is insufficient to enable him to define the complex market for flanges, much less determine whether the market is segmented, or decree which products compete. Ulma claims that one must be an economist to make that kind of analysis. While this Court questions whether merely being an economist qualifies one to testify about the market for steel flanges, it need only decide whether Britven is competent to do so.

         Initially, this Court finds that as a CPA, Britven has the requisite experience to analyze the relevant market numbers. He is clearly competent to testify concerning costs, sales, profit figures, and market share figures. His training as CPA qualifies him to analyze these numbers and make and explain the appropriate comparisons and calculations. While this area falls within the overall scope of Ulma's objection, the main thrust of their complaint is aimed at the underlying assumptions that buttress and set the parameters of his evaluation calculations. For example, Ulma complains that Britven is not capable of defining (and has in fact mis-defined) the market for flanges. Further, they argue he has overlooked the fact that the market is segmented and wrongly reaches the conclusion that the Plaintiffs' and Defendants' products compete with each other.

         The Court sustains these objections to the extent that Britven purports to testify about market share and/or market segmentation (outside of his analysis of financial data and sales figures). This is clearly outside his area of expertise and experience. Nevertheless, if this evidence is derived from other individuals who are competent and experienced in this area, or from separate but otherwise reliable sources, his ultimate conclusions regarding damages and damage calculations would be admissible because (1) as an expert, he is entitled to relay upon these and (2) as a CPA, he has the necessary ability, training, and experience to analyze the data and make the calculations that undergird his ultimate conclusions as to damages.


         The next objection to Britven's testimony is based upon his use of the precepts laid out in Panduit Corp. v. Stahlin Bros. Fibre Works, Inc.,575 F.2d 1152 (6th Cir. 1978) and State Indus., Inc. v. Mor-Flo Indus., Inc., 883 F.2d 1573 (Fed. Cir. 1989). Both of these cases were patent cases in which the party claiming infringement prevailed. The ...

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