Fail-Safe, L.L.C. v. A.O. Smith Corp.
744 F. Supp. 2d 870
E.D. Wis.2010Background
- FS sued AOS in E.D. Wisconsin case 08-CV-310, alleging unjust enrichment among other claims; the matter had been pending for about three years.
- On Nov 24, 2010 the court issued a trial scheduling order setting a Jan 24, 2011 trial date and invited early motions in limine.
- AOS filed a Daubert/motion in limine on Dec 6, 2010 to exclude expert testimony and future damages, with a related second motion filed Dec 7, 2010 seeking to exclude portions of the same testimony.
- The court resolved entitlement to a jury trial at the outset, finding FS’s unjust enrichment claim sounds legal and should be tried to a jury.
- The court then conducted an extended Daubert analysis of FS’s damages experts (Keegan and Fox), ultimately granting the motion to exclude their testimony on future damages and related theories; the court also granted sealing requests for certain documents.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether FS is entitled to a jury trial. | FS asserts Seventh Amendment right to jury trial. | FS’s claim is equitable; no jury trial right. | FS entitled to jury trial on unjust enrichment. |
| Whether Dr. Keegan’s testimony is admissible under Daubert. | Keegan’s expert methods support damages. | Keegan’s methods are unreliable and cherry-picked. | Keegan’s testimony excluded as unreliable. |
| Whether Mr. Fox’s testimony is admissible under Daubert. | Fox’s damages analysis valid. | Fox relies on Keegan’s unreliable data and flawed discounting. | Fox’s testimony excluded as unreliable. |
Key Cases Cited
- Beacon Theatres, Inc. v. Westover, 359 U.S. 500 (1959) (right to jury trial in civil matters; scrutiny for curtailment of jury right)
- Daubert v. Merrell Dow Pharm., 509 U.S. 579 (1993) (gatekeeper for admissibility of expert testimony; reliability framework)
- Medtronic, Inc. v. Intermedics, Inc., 725 F.2d 440 (7th Cir. 1984) (origins of unjust enrichment legal/equitable mix; guidance on remedies)
- First Nat'l Bank v. Warren, 796 F.2d 999 (7th Cir. 1986) (disgorgement and legal nature of restitutionary relief sometimes treated as legal)
- Lindquist Ford, Inc. v. Middleton Motors, Inc., 557 F.3d 469 (7th Cir. 2009) (unjust enrichment damages limited to value of the benefit conferred; reasonable certainty required)
- United States v. Gardner, 211 F.3d 1049 (7th Cir. 2000) (reliability inquiry for expert testimony under Daubert)