Antitrust Law Daily Wrap Up, FRANCHISING & DISTRIBUTION—EDMo: Motions to Exclude Damages Testimony Denied, (Jun 19, 2013)

By Jody Coultas, J.D.

The federal district court in St. Louis denied a Nissan Forklift’s motions to exclude testimony on damages in a Missouri Franchise Act suit filed by forklift dealer Lift Truck Lease and Service, Inc. against Nissan (Lift Truck Lease and Service, Inc. v. Nissan Forklift Corporation, N.A., June 18, 2013, Shaw, C.).

In a previous decision, the court held that Lift Truck’s Missouri Franchise Act and Missouri Power Equipment Act were without merit because the dealer could not show that the franchisor failed to provide it with 90 days’ notice of termination. However, the court found genuine issues of material fact precluded summary judgment on the dealer’s claim that Nissan violated the “good cause” for termination provision of the Power Equipment Act. Thus, Lift Truck’s motion for summary judgment on the dealer’s claims under the two statutes was granted in part and denied in part.

The court denied Nissan’s motion to exclude the testimony of Lift Truck’s witness pursuant to Daubert. Nissan’s motion to exclude testimony argued that Lift Truck did not designate the witness as an expert, even though his opinions required scientific, technical, or other specialized knowledge not within the ordinary experience of lay persons. Lift Truck countered that the witness was not an expert and not designated as such. Rather, the witness was a controller responsible for financial matters, and was testifying on Lift Truck’s damages. Nissan also argued that the witness’s methodology was flawed.

The witness’s testimony was not expert testimony but instead was based on personal knowledge acquired through the review of records prepared in the ordinary course of his employment as controller. Therefore, Lift Truck was not required to identify and disclose him as an expert witness, and his testimony was not subject to a Daubert analysis, according to the court.

The limitation of liability provision in the parties’ agreement was unenforceable to the extent it limited the statutory protections afforded to Lift Truck under the Missouri Power Equipment Act. Nissan argued in its motion in limine that the limitation of liability provision in the parties’ agreement precluded the damages Lift Truck sought under the Power Equipment Act. Nissan contention that the court had held that a limitation of liability clause could be enforced in a case invoking the Missouri Franchise Act was incorrect. Although a sophisticated commercial entity may waive even fundamental rights such as the right to a jury trial and statutory rights such as forum selection, the protections provided by the Power Equipment Act may not be stripped away by the franchisor securing contractual agreement to avoid or limit its liability under the Act, because to do so would be contrary to public policy.

Nissan’s allegations that the witness’s testimony failed to meet the standards of Federal Rule of Evidence 701 was more appropriate for exploration on cross examination and did not warrant exclusion of the testimony, according to the court. The witness’s testimony allegedly failed to account for revenues earned by mechanics hired in order to service Nissan equipment, failed to verify assumptions about certain expenses for employees who worked on non-Nissan brand equipment, and failed to consider relevant reductions in cost. The court noted that the testimony would be helpful to the jury’s determination of damages and that was, at least in part, rationally based on the witness’s perceptions. However, the court also noted that Nissan’s objections to the methodology concerning the 24-month recoupment period may be correct. The court urged both parties to address the appropriate measure of damages, and provide the court with citation to relevant legal authority from other jurisdictions addressing the correct measure of damages in the context of franchise terminations on a renewed motion in limine.

The case is No. 4:12-CV-153 CAS.

Attorneys: Adam D. Hirtz (Lowenbaum Partnership, L.L.C.) for Lift Truck Lease and Service, Inc. Adrienne N. Russell (Hartline And Dacus) for Nissan Forklift Corporation, N.A.

Companies: Lift Truck Lease and Service, Inc.; Nissan Forklift Corporation, N.A.

Cases: FranchisingDistribution MissouriNews