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Bimbo Bakeries USA, Inc. v. Sycamore

United States District Court, D. Utah, Central Division

March 2, 2017

BIMBO BAKERIES USA, INC., Plaintiff,
v.
LELAND SYCAMORE, TYLER SYCAMORE, WILD GRAINS BAKERY, LLC, and UNITED STATES BAKERY, INC., Defendants.

          SEALED MEMORANDUM DECISION AND ORDER ON MOTIONS TO EXCLUDE EXPERT WITNESSES

          David Nuffer, District Judge

         The parties have many motions to exclude expert testimony. Defendant United States Bakery (U.S. Bakery) moves to exclude testimony of Plaintiff Bimbo Bakeries, Inc. (Bimbo) expert, Dr. Glenn L. Christensen[1], Richard S. Hoffman[2] and Russell Carl Hoseney, Ph.D.[3]Bimbo moves to exclude testimony of Himanshu Mishra, Ph.D., [4] and Larry Soter.[5]

         This order will address the motions in the sequence they were filed.

         Contents

         BACKGROUND FACTS.............................................................................................................2

         DISCUSSION..................................:.............................................................................................3

         LEGAL STANDARD FOR ADMISSIBILITY OF EXPERT TESTIMONY............3

         Expert Dr. Glenn L. Christensen.................................................................................................4

         (A) Dr. Christensen is Qualified to Testify to Quantitative Surveys...........................5

         (B) Dr. Christensen's Testimony is Reliable...................................................................6

         (1) The Internet is a Proper Method for Conducting Surveys................................7

         (2) The Surveys are a Representative Enough Sample for the Jury to Weigh the Credibility...................................................................................................8

         (3) Dr. Christensen's Survey Questions Do Not Make the Results Unreliable......9

         Conclusion.......................................................................................................................12

         Expert Himanshu Mishra...........................................................................................................12

         Conclusion.......................................................................................................................14

         Expert Larry Soter.......................................................................................................................14

         Conclusion.......................................................................................................................16

         Expert Richard S. Hoffman.......................................................................................................16

         (A) Mr. Hoffman's Unjust Enrichment Testimony Is Not Unreliable.......................17

         (1) Mr. Hoffman's Product Return Rate Was Not Unreliable..............................18

         (2) Mr. Hoffman's Variable Costs Are Not Unreliable........................................19

         (B) Hoffman's Lost Profit Analysis Is Not Unreliable.................................................20

         (C) Mr. Hoffman's Testimony Has Adequate Causation............................................21

         (D) Dr. Hoffman's Testimony as to Geography is Excluded in Part..........................22

         (E) Corrective Advertising Expenses Are Relevant to the Issue of Damages...........23

         (F) Dr. Christensen's Testimony is Admissible............................................................23 Conclusion.......................................................................................................................24

         Expert Russell Carl Hoseney.....................................................................................................24

         (A) Dr. Hoseney is Qualified..........................................................................................24

         (B) Dr. Hoseney's Testimony is Reliable.......................................................................25

         (1) Dr. Hoseney's Testimony Is Not Inconsistent................................................25

         (2) Dr. Hoseney's Testimony Is Not Solely Based On Secondhand Knowledge. 25

         (3) Dr. Hoseney Is Not Testifying to Common Knowledge and His Testimony Is Not Unreliable...........................................................................................26

         (4) Dr. Hoseney Is Testifying To A Matter On Which He Is Not An Expert.......27

         Conclusion.......................................................................................................................27

         ORDER........................................................................................................................................27

         BACKGROUND FACTS

         This matter centers on Bimbo's allegations that U.S. Bakery, Sycamore, and Wild Grains misappropriated its trade secret for making Grandma Sycamore's Home-Maid bread, and infringed on its trade dress related to the packaging of its bread. The motions concern the qualifications and reliability of the testimony given by Bimbo's and U.S. Bakery's experts.

         DISCUSSION

         LEGAL STANDARD FOR ADMISSIBILITY OF EXPERT TESTIMONY

         Fed. R. Evid. 702 addresses the standard for 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.[6]

         "Under the Rules the trial judge must ensure that any and all scientific testimony or evidence admitted is not only relevant, but reliable."[7] The inquiry of scientific reliability is a flexible and focuses on principles and methodology.[8] The Supreme Court has offered several non-exhaustive factors that a court may rely on for determining reliability such as, whether the testimony can be tested, has been peer reviewed, has a known or potential rate of error, and has attracted acceptance in the relevant scientific community.[9]

         District courts are tasked with the responsibility of serving as the gatekeepers of expert evidence, and must therefore decide which experts may testify and present evidence before the jury.[10] Courts are given "broad latitude" in deciding "how to determine reliability" and in making the "ultimate reliability determination."[11] The Federal Rules of Evidence, however, generally favor the admissibility of expert testimony.[12]Excluding expert testimony is the exception rather than the rule[13], and often times the appropriate means of attacking shaky but admissible evidence is through vigorous cross-examination, and the presentation of contrary evidence.[14] "[T]he Federal Rules of Evidence favor the admissibility of expert testimony, and [courts'] role as gatekeeper is not intended to serve as a replacement for the adversary system."[15]

         The inquiry into whether an expert's testimony is reliable is not whether the expert has a general expertise in the relevant field, but whether the expert has sufficient specialized knowledge to assist jurors in deciding the particular issues before the court.[16]

         Expert testimony is subject to Federal Rule of Evidence 403. "The court may exclude relevant evidence if its probative value is substantially outweighed by a danger of one or more of the following: unfair prejudice, confusing the issues, misleading the jury, undue delay, wasting time, or needlessly presenting cumulative evidence."[17]

         EXPERT DR. GLENN L. CHRISTENSEN[18]

         U.S. Bakery seeks to exclude the expert testimony of Dr. Glenn L. Christensen because he is not qualified to testify to quantitative surveys, and because his surveys are not reliable under Federal Rule of Evidence 702. Bimbo retained Dr. Christensen to give an expert report and testimony based on quantitative surveys analyzing consumers' reactions as support for Bimbo's claim of trade dress infringement and false advertising. Dr. Christensen has prepared three surveys that are the subject of his testimony.

         In determining whether expert testimony is admissible the first step is to determine whether the expert is qualified, and then if the expert is qualified determine whether the expert's opinion is reliable by assessing the underlying reasoning and methodology.[19]

         This order will first address the reasons Dr. Christensen is qualified to testify to quantitative surveys, and then will address the reasons why the surveys Dr. Christensen conducted are reliable enough for the jury to weigh the evidence.

         (A) Dr. Christensen is Qualified to Testify to Quantitative Surveys.

         U.S. Bakery argues that Dr. Christensen is unfit to testify to quantitative research studies because his training and experience is in qualitative research. U.S. Bakery's rebuttal expert, Dr. Mishra, put Dr. Christensen in "the bottom 2 percentile" of quantitative surveyors based on the methodological errors across the three surveys he reported.[20]

         The evidence supports the determination that Dr. Christensen is qualified to testify quantitative surveys. Dr. Christensen is an Associate Professor of Marketing at Brigham Young University.[21] He holds a Ph.D from Pennsylvania State University in the field of consumer psychology and marketing, a MBA with emphasis in marking management and research from Brigham Young University, and a Bachelor's degree in communications from Brigham Young University.[22] Dr. Christensen has authored four peer reviewed papers concerning trademarks and the likelihood of consumer confusion.[23]

         Dr. Christensen has designed Lanham Act surveys and offered opinions concerning those surveys on numerous occasions since 2005.[24] Dr. Christensen possesses training and experience in both qualitative and quantitative survey research, and his prior Lanham Act surveys have involved the type of quantitative survey research he performed in this case.[25]

         Based on Dr. Christensen's education, experience, and qualifications he is sufficiently credentialed to be considered an expert in the area of quantitative surveying. The next step is to review whether Dr. Christensen used appropriate methodological standards in his surveys as applied to this case.

         (B) Dr. Christensen's Testimony is Reliable.

         Dr. Christensen conducted his surveys over the Internet using pre-screened panels of respondents provided by a third-party vendor. He used digital images of the parties' respective products as the basis for his questions.

         U.S. Bakery argues that Dr. Christensen's survey design departs significantly from the marketplace conditions under which most consumers make purchasing decisions about bread. U.S. Bakery's expert, Himanshu Mishra, specifically attacks the surveys' credibility on three bases: (1) The internet is not a proper method for conducting a survey about consumers' decision making process when buying bread because consumers rarely buy bread online; (2) The surveys are not a representative sample of the population; and (3) The questions asked improperly deviate from the patterns approved by the leading cases and are designed to prompt bias responses. Each of the objections to the reliability of the surveys is discussed below.

         (1) The Internet is a Proper Method for Conducting Surveys.

         U.S. Bakery argues that the consumer surveys do not effectively recreate the consumer experience because the bread buying surveys were conducted online. Because consumers rarely buy bread online, U.S. Bakery contends that asking consumers to simulate a buying decision based on online images does not effectively re-create the buying experience. U.S. Bakeries further argues that the Internet may not be a reliable surveying form because it screens out responses from those who buy bread, but who do not use the internet.

         U.S. Bakery is unable to cite authority holding or to explain why Internet surveys are. unreliable. It is likely true consumers typically do not buy bread online and conducting an online survey may not be the best way to most accurately simulate the bread buying experience. U.S. Bakery, however, has come forth with no evidence other than speculation that the results may be different if the surveys were conducted in person. There is also no evidence in the record showing a substantial disparity in the number of people who have internet access and complete surveys online, and those who buy bread but do not use the internet.

         Conducting surveys online for the purposes of a trade dress claim in this case does not render the surveying method unreliable. As here, where the overall look of the product is at issue, online surveys can be relevant to issues involving the look of the product.[26] Arguments as to the validity of the survey and whether conducting the survey online is the most effective means can be argued to the jury. (And if U.S. Bakeries had evidence supporting the argument, it would have been admissible.) To prove that a survey technique is unreliable the party must do more than speculate that there may have been a better way of completing the survey. The surveys will therefore not be excluded because it was not unreliable to conduct them online.

         (2) The Surveys are a Representative Enough Sample for the Jury to Weigh the Credibility.

         U.S. Bakery argues that the surveys conducted by Dr. Christensen are not reliable because they are not representative of the universe they are intended to reflect. The surveys are alleged to not be representative because: (1) The surveys only include the areas of Utah and Southern Idaho when Bimbo's claims include areas extending beyond the surveyed areas; (2) The survey panels selected may be skewed because panelists frequently complete surveys on a regular basis; (3) Dr. Christensen screens out respondents using smartphones; and (4) There is a question as to whether the parameters of Survey 3 included appropriate* randomization. Each of these concerns will be briefly discussed.

         (a) Bimbo Does Not Seek to Use the Surveys for Information Outside of Utah and Southern Idaho.

         Bimbo states that its "trade dress claims are focused solely on Utah and southern Idaho so these two geographic areas are the only appropriate areas for Christiansen's trade dress surveys".[27] Because Bimbo claims to only use the surveys for Utah and southern Idaho, the question as to whether Bimbo intends to extrapolate the surveys to draw conclusions about other geographical areas not surveyed is not present. Because Dr. Christensen does not intend to testify to places other than Utah and southern Idaho, the determination of whether the surveys can be extrapolated to other jurisdictions is not necessary.

         (b) There is No Evidence the Survey Panels Selected May Be Skewed.

          U.S. Bakery claims that the use of online panels is highly prone to self-selection bias because these panelists often complete surveys on a regular basis. U.S. Bakery says Dr. Christensen should have therefore validated the responses from the panel provider.

         This objection is without merit because U.S. Bakery has failed to explain how people who participate in surveys on a regular basis may skew the results. U.S. Bakery's conclusory statement is not supported by evidence. The evidence will therefore not be excluded for being unreliable.

         (c) Screening Out Smartphone Users Does Not Render the ...


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