MARY ELLEN COSTER WILLIAMS, Judge.
This matter comes before the Court on Defendant's motion
Because Plaintiff's witnesses may testify based upon their industry experience to the extent allowed under Federal Rule of Evidence 701, Defendant's motion in limine is denied.
For purposes of this litigation, Defendant has retained Stuart Seltzer, a purported expert in the licensing industry, to provide his opinions on whether the Army's position on Plaintiff's use of its trademarks was commercially reasonable and consistent with trademark licensing practice. Mr. Seltzer also opined on whether the Army prevented Plaintiff from fully utilizing the trademarks or rendered Plaintiff's products unmerchantable, and on whether the Army's rejection of 8.4% of Plaintiff's submissions was reasonable and consistent with the approval ratio in trademark licensing arrangements within Mr. Seltzer's experience. Additionally, Defendant asked for Mr. Seltzer's opinion regarding the extent to which factoring agreements are used by Licensees who sell licensed products. Mr. Seltzer's expert report containing his opinions was sent to Plaintiff.
On July 13, 2017, Plaintiff sent Defendant its "Notice of Expert Disclosure." In it, Plaintiff identified three witnesses — Robert Stock, John La Lota, and Michael Setola — some or all of whom Plaintiff "may call" at trial as rebuttal witnesses to Mr. Seltzer. Although Plaintiff denominated this filing as an "Expert Disclosure," Plaintiff does not intend to elicit expert opinion testimony from these witnesses. Rather, depending on Mr. Seltzer's testimony, Plaintiff may call these witnesses "to testify about their personal observations in the industries in which they have worked for their entire lives." Pl.'s Resp. 2.
According to Plaintiff's disclosure, Robert Stock is currently CEO of Robert Graham and has worked in the fashion industry, including as an award-winning designer, for over 50 years. Since 1979, Mr. Stock has been involved with the licensing of clothing, menswear accessories, and home goods around the world. John La Lota is currently President of the Factoring and Trade Finance Division at Sterling National Bank. He has overseen the acquisition of two factoring businesses in recent years and has previously held positions at Heller Financial and Congress Talcott. He is an active member of the International Factoring Association and has over 35 years of experience in the factoring and asset based lending industry. Michael Setola is President and CEO of Tharanco Lifestyles, LLC. He has over 35 years of experience in consumer brands, primarily in the apparel sector. Since 2009, he has served as a Partner and President/CEO of Lifestyle Brands Holdings and Tharanco Lifestyles LLC. Among other services, his company provides brand management and licensing consultation. Previously, Mr. Setola served as President of Oxford Industries, whose brands held licenses for Tommy Hilfiger, Nautica, and other designer labels.
Plaintiff represented that these three rebuttal witnesses would "testify about matters that they have rationally perceived during the courses of their respective careers in the apparel, licensing and/or finance industries, including without limitation what they have personally observed to be the ordinary custom and practice in those industries." Def.'s Mot. Ex. A, at 1.
On July 14, 2017, Defendant's counsel asked Plaintiff's counsel to clarify whether Plaintiff intended to provide expert rebuttal reports for these witnesses by the July 19, 2017 deadline. Def.'s Ex. B. After Plaintiff confirmed that it would not provide expert rebuttal reports, Defendant filed the instant motion in limine.
Defendant asserts that Plaintiff was required to provide expert rebuttal reports for the three witnesses Plaintiff identified in its "Notice of Expert Disclosure," under Rule 26(a)(2)(B), and because Plaintiff failed to do so, the Court should preclude testimony from these witnesses. Alternatively, Defendant argues that even if Plaintiff's "experts" are not required to provide written reports under Rule 26(a)(2)(B), Plaintiff's disclosure was deficient, because, under Rule 26(a)(2)(C), Plaintiff was required to include in its disclosure the (i) subject matter on which each witness is expected to present evidence under Federal Rules of Evidence 702, 703, or 705, and (ii) a summary of the facts and opinions to which each witness is expected to testify.
In response, Plaintiff asserts that it was not required to provide expert rebuttal reports for its "Rule 701 Expert Witnesses,"
1. Plaintiff represents that none of its three potential rebuttal witnesses "have (a) read any papers filed in this action; (b) read any pre-trial testimony of any witness; or (c) been asked to express any opinion about any matter relating to this case." Id. Additionally, Plaintiff attached to its response the first 30 pages of Defendant's Expert Witness, Mr. Seltzer's report, and with it included an example of the kind of testimony that these rebuttal witnesses would provide. Plaintiff points to Mr. Seltzer's statement in his report, that in his experience, factoring agreements "rarely come[] up in the Licensee-Licensor relationship" and that in his 25 years of experience, his involvement has been limited to "one factoring agreement which was a broader, more complex, financing arrangement that required consent from the Licensor." Id. at 2 (emphasis omitted). Plaintiff represents that it anticipates that Mr. La Lota would testify that, according to his observations, factoring agreements are quite common in the License-Licensor relationship. Id. at 2-3. Plaintiff argues that this type of testimony, is "not an opinion" but rather is "personal observation and experience of an industry professional" and is thus admissible under Federal Rule of Evidence 701. In its reply, Defendant argues that Plaintiff's "reliance upon Rule 701 of the Federal Rules of Evidence is unavailing" because Plaintiff's witnesses "are being called upon to testify as experts." Def.'s Reply 2.
Rule 26(a)(2) governs the disclosure of expert testimony. Specifically, Rule 26(a)(2)(A) provides that "a party must disclose to the other parties the identity of any witness it may use at trial to present evidence under Federal Rule of Evidence 702, 703, or 705." Rule 26(a)(2)(B) further provides for a written expert report stating:
In circumstances where an expert witness is not required to provide a written report, the disclosure must state "the subject matter on which the witness is expected to present evidence under Federal Rule of Evidence 702, 703, or 705" and "a summary of the facts and opinions to which the witness is expected to testify." RCFC 26(a)(2)(C).
Federal Rules of Evidence 701 and 702 govern the admissibility of opinion testimony offered by lay witnesses and expert witnesses respectively. While the line between lay witness opinion testimony and expert witness testimony is not always clear, drawing such a distinction is crucial in order to ensure that Rule 26's disclosure requirements for experts are properly applied.
Federal Rule of Evidence 701 provides:
Fed. R. Evid. 701. If a witness's testimony fails to meet any one of the three foundational requirements, it is not admissible.
Conversely, Federal Rule of Evidence 702 provides:
Fed. R. Evid. 702.
The Advisory Committee Notes to the 2000 Amendment of Rule 701 provide additional guidance on the distinction between lay witness opinion testimony and expert testimony, stating that "the distinction between lay and expert witness testimony is that lay testimony `results from a process of reasoning familiar in everyday life,' while expert testimony `results from a process of reasoning which can be mastered only by specialists in the field.'"
It appears that Plaintiff anticipates eliciting these witnesses' personal observations based upon their experience in the industry to counter or clarify factual assumptions made by Defendant's expert. This type of lay testimony is acceptable under Rule 701. The fact that a witness has specialized knowledge does not necessarily preclude the witness from testifying under Rule 701, but the testimony must not be "rooted exclusively in [the witness's] expertise . . . ."
The Federal Circuit, in
In a similar vein, the Second Circuit held that where "a witness derives his opinion solely from insider perceptions of a conspiracy of which he was a member, he may share his perspective as to aspects of the scheme about which he has gained knowledge as a lay witness subject to Rule 701, not as an expert subject to Rule 702."
Courts have admitted opinion testimony from lay witnesses even when based on the witnesses' experience or knowledge obtained in their profession, rather than on their own "observations and personal perceptions respecting the incident in question . . . ." 4 Jack B. Weinstein & Margaret A. Berger, Weinstein's Federal Evidence § 701.03[1].
Defendant's motion
Plaintiff's motion for sanctions is