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Trane U.S. Inc. v. Yearout Service LLC

United States District Court, M.D. Georgia, Macon Division

June 20, 2019

TRANE U.S. INC., Plaintiff,
v.
YEAROUT SERVICE, LLC, et al., Defendants.

          ORDER

          MARC T. TREADWELL, JUDGE

         Defendants GSC Construction, Inc. and Allied World Specialty Insurance Company moved to exclude expert testimony by Randy P. Lynn, proffered by Defendant Yearout Service, LLC. Docs. 82; 129. Yearout then moved to exclude GSC's and Allied World's expert, Robert Colby. Doc. 127. Both motions were untimely because they were filed or renewed shortly before the pretrial conference, long after the deadline for filing Daubert motions. Yearout's motion was particularly irksome because it was filed as a routine motion in limine. The Court summarily denied Yearout's motion. Doc. 131. GSC's Daubert motion was untimely only because it had not been timely renewed after the Court dismissed the motion without prejudice upon the cancellation of a previous trial setting. But at least it had been fully briefed. Still, the late renewal of the motion allowed little time for consideration of the significant issues it raised. So while the Court could have ignored both motions, the parties' respective expert disclosures contained so many problematic opinions that the Court could not allow their experts to take the stand without some vetting. Accordingly, there unfolded the rather truncated events discussed in this Order.

         I. BACKGROUND

         This case concerns a dispute between GSC, the general contractor on a design-build hangar renovation at Robins Air Force Base, and Yearout, a subcontractor responsible for providing a “turnkey mechanical and plumbing system.” Docs. 18-1 at 10; 109 at 1.[1] The trial had long been specially set to begin the week of June 3, 2019, and the parties filed their Daubert motions shortly before the May 15, 2019 pretrial conference. Docs. 116; 127; 129; 137. Because of the Court's doubts about both experts, it ordered the parties to designate the particular expert opinions which they believed, consistent with the obligations of Rule 11, were admissible. Id. In response to that Order, GSC and Allied World made clear that they only intended to use Colby to rebut Lynn's opinions. Doc. 142. Yearout withdrew some, but not all, of Lynn's opinions. Specifically, Yearout maintained that Lynn's opinions on the following costs incurred by Yearout were admissible: (1) the actual cost of the expedited delivery of fans, (2) the estimated cost of “extended general conditions, ” (3) the actual cost of overtime, (4) inefficiency “costs” due to overtime, and (5) inefficiency “costs” due to working two shifts. Doc. 147 at 3; see Doc. 158-2. Yearout also maintained that Lynn's testimony regarding certain claims by GSC against Yearout was admissible. Doc. 147 at 3. The Court convened a Daubert hearing on May 29, 2019, and as Lynn took the stand, Yearout withdrew his testimony regarding GSC's claims. After Lynn's testimony, the Court excluded his opinions on expedited fan delivery, extended general conditions, and actual overtime costs because those opinions did not even purport to be based on any specialized knowledge or methodology; rather, Lynn just provided his interpretation of the facts and, frequently, his opinion on legal issues, such as contract interpretation. See Doc. 158. His opinions on inefficiency “costs” from overtime and shift work, by contrast, at least purported to be based on some methodology. Accordingly, although the Court made an oral ruling excluding his opinions on those inefficiency “costs, ” it noted that a written order would follow.

         II. DISCUSSION

         A. Daubert Standard

         Rule 702 of the Federal Rules of Evidence provides:

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.

         Trial courts are to act as “gatekeepers” to ensure that speculative and unreliable opinions do not reach the jury. Daubert v. Merrell Dow Pharms, Inc., 509 U.S. 579, 589, n.7 (1993). Trial courts must (1) determine whether the expert has the qualifications to offer his opinions, Poulis-Minott v. Smith, 388 F.3d 354, 359 (1st Cir. 2004); see also United States v. Frazier, 387 F.3d 1244, 1260 (11th Cir. 2004); (2) “‘conduct an exacting analysis' of the foundations of expert opinions to ensure they meet the standards of admissibility, ” Frazier, 387 F.3d at 1260 (quoting McCorvey v. Baxter Healthcare Corp., 298 F.3d 1253, 1257 (11th Cir. 2002)) (emphasis in original); and (3) ensure that the expert testimony is relevant and will assist the jury, see Daubert, 509 U.S. at 591.

         B. Analysis

         Lynn opined that Yearout incurred expenses of $281, 481.96 due to overtime inefficiency and $50, 390.59 due to shift work inefficiency. Doc. 158-2 at 69-70. Lynn used one methodology to calculate Yearout's loss due to overtime inefficiency and another to calculate its loss due to shift work inefficiency. Both methodologies are seriously flawed.

         1. Overtime inefficiency

         Lynn estimated Yearout's overtime inefficiency costs simply by using payroll records and a “‘productivity index' table” from “Management Methods Bulletin OT1 - 2011, ” a publication of the Mechanical Contractors Association of America, or MCAA. Docs. 158-2 at 67-68; 158-4. This trade bulletin attempts to quantify two ideas: first, that as a construction worker works more hours, productivity can diminish. A person working 60 hours per week may perform more total work than someone working forty hours per week, but still perform less work per hour. Second, a person working overtime may suffer diminished productivity in consecutive overtime weeks. A person placed on a fifty-hours-per-week schedule may be more productive in the first week than in the second, and more productive in the second than in the third.

         It is helpful at the outset to address what the MCAA attempts to do in this bulletin and in its bulletin addressing shift work inefficiency, discussed below. The MCAA is a trade organization for mechanical contractors. The overarching purpose of the MCAA bulletins is to provide mechanical contractors with negotiating tools: primarily prospectively, to obtain more favorable contract terms, but also retrospectively, to support claims for additional compensation. The bulletins are not, nor do they purport to be, peer-reviewed studies determining whether overtime and shift work “inefficiencies” exist and, if they do, how these “costs” can be calculated. Significantly, as Lynn acknowledged, there is in the industry a methodology for precisely determining such costs when they are established to exist. It is called the “measured mile.” The ...


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