Authentic Apparel Group, LLC v. United States
134 Fed. Cl. 78
| Fed. Cl. | 2017Background
- Defendant moved in limine to exclude three plaintiff witnesses (Stock, La Lota, Setola) for failing to provide Rule 26(a)(2)(B) expert reports after plaintiff listed them as possible rebuttal witnesses to Defendant’s expert, Stuart Seltzer.
- Plaintiff disclosed the three as potential rebuttal witnesses but stated it would not elicit expert opinions; instead it would elicit testimony based on their personal observations and industry experience.
- The witnesses have extensive industry experience: Stock (50+ years in fashion/licensing), La Lota (35+ years in factoring/asset-based lending), and Setola (35+ years in apparel brand management/licensing).
- Defendant argued the disclosures either required expert reports under Rule 26(a)(2)(B) or, at minimum, a detailed summary under Rule 26(a)(2)(C) because the testimony would effectively be expert testimony under FRE 702.
- Plaintiff contended the testimony would be lay opinion admissible under FRE 701 (based on perception/experience), not expert opinion requiring Rule 26 expert disclosures.
- The Court denied Defendant’s motion: testimony is admissible only as lay opinion under Rule 701 and is limited to personal observations and knowledge derived from the witnesses’ industry experience.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Rule 26(a)(2)(B) required expert reports for the disclosed witnesses | The witnesses will not give expert opinions; no Rule 26(B) reports needed | The disclosures functioned as expert rebuttal designations and thus required reports | No — court treated witnesses as lay (Rule 701) for purposes of disclosure; no expert reports required |
| Whether testimony must meet Rule 702 (expert) or may be admitted under Rule 701 (lay) | Testimony will be personal observations from industry experience and admissible under Rule 701 | Testimony will effectively be expert opinion and should be excluded absent expert disclosure | Testimony may be admitted under Rule 701 but must be limited to personal observations and not expert-methodology or hypothetical-driven expert opinions |
Key Cases Cited
- Tokai Corp. v. Eaton Enters., Inc., 632 F.3d 1358 (Fed. Cir. 2011) (sanctions appropriate for deliberate failure to comply with expert disclosure rules)
- Union Pacific Res. Co. v. Chesapeake Energy Corp., 236 F.3d 684 (Fed. Cir. 2001) (lay testimony based on extensive industry experience admissible under Rule 701)
- United States v. Yannotti, 541 F.3d 112 (2d Cir. 2008) (insider’s opinions based on direct participation may be offered as lay testimony)
- United States v. Munoz-Franco, 487 F.3d 25 (1st Cir. 2007) (business opinions grounded in day-to-day participation qualify as lay opinions)
- RP1 Fuel Cell, LLC v. United States, 120 Fed. Cl. 288 (Fed. Cl. 2015) (discussing Advisory Committee Notes distinguishing lay and expert opinion under Rule 701)