United States District Court, N.D. Indiana, South Bend Division
OPINION AND ORDER
DEGUILIO JUDGE UNITED STATES DISTRICT COURT
an antitrust case in which the plaintiff, Gumwood HP Shopping
Partners, L.P., asserts claims for a restraint of trade,
monopolization, and attempted monopolization against Simon
Property Group, Inc., the defendant. In short, Gumwood claims
that Simon improperly prevented retailers from leasing at
Gumwood's new shopping center, Heritage Square, which was
poised to compete against Simon's established University
Park Mall and a new outdoor shopping area that was under
construction at that mall. The Court has denied cross motions
for summary judgment and this case is set for trial.
before the Court are motions filed by each party seeking to
strike expert testimony from the opposing party's expert
witness. In this order, the Court addresses the aspects of
those motions that relate to the experts' opinions
concerning liability. For the reasons that follow, both
motions are granted in part and denied in part. The Court
will address the aspects of those motions that relate to the
experts' damages opinions in a separate order.
STANDARD OF REVIEW
702 governs the admission of testimony by expert witnesses.
Under that rule, a witness “who is qualified as an
expert by knowledge, skill, experience, training, or
education” may offer an opinion if the following
criteria are met:
(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
(d) the expert has reliably applied the principles and
methods to the facts of the case.
Fed. R. Evid. 702. A court has a gatekeeping role to ensure
that expert testimony meets these criteria. Daubert v.
Merrell Dow Pharm., Inc., 509 U.S. 579 (1993); C.W.
ex rel. Wood v. Textron, Inc., 807 F.3d 827, 834-35 (7th
Cir. 2015). As the Seventh Circuit has emphasized, though, a
court does not assess “‘the ultimate correctness
of the expert's conclusions.'”
Textron, 807 F.3d at 834 (quoting Schultz v.
Akzo Nobel Paints, LLC, 721 F.3d 426, 431 (7th Cir.
2013)). Rather, a court must focus “solely on
principles and methodology, not on the conclusions they
generate.” Schultz, 721 F.3d at 432 (quoting
Daubert, 509 U.S. at 595). “So long as the
principles and methodology reflect reliable scientific
practice, ‘vigorous cross-examination, presentation of
contrary evidence, and careful instruction on the burden of
proof are the traditional and appropriate means of attacking
shaky but admissible evidence.'” Id.
(quoting Daubert, 509 U.S. at 596).
party has retained an expert to offer various opinions that
relate to the existence of liability in this case. The Court
first addresses Simon's objections to Gumwood's
expert, and then Gumwood's objections to Simon's
expert witness is Dr. H.E. Frech III. Dr. Frech holds a Ph.D.
in economics and is a professor of economics. He was retained
in this matter to offer opinions relating to both Simon's
liability and the resulting damages. As to his liability
opinions, Simon argues that he should not be permitted to
offer opinions concerning the tenant negotiations and the
existence of tying and coercion, and opinions that Simon has
Tenant Negotiations, Tying, and Coercion
first objects to various factual opinions by Dr. Frech
relating to the content and effect of Simon's
negotiations with prospective tenants, including Ann Taylor,
Charming Shoppes, and other retailers. In particular, Simon
objects to Dr. Frech offering factual narratives about the
parties' negotiations with the retailers, and opining
about what Simon did and said, what its intent was, and that
it coerced the retailers. For example, in his initial report,
Dr. Frech engages in an extended recitation of evidence
concerning Ann Taylor's negotiations with Simon and
Gumwood. [Frech Report ¶¶ 141-67]. In the course of
that narrative, he offers opinions such as that “Simon
threatened not to renew or grant leases at important Simon
properties unless the retailer agreed not to lease from
Heritage Square (and sometimes to instead lease at University
Park Mall), ” and that “[t]hrough its tying
activities, Simon coerced Ann Taylor to move away from its
preferred option of locating at Heritage Square.”
[Frech Report ¶¶ 153, 159]. In his supplemental
report, Dr. Frech further opines “that tying did occur
and that it was often directed at inducing tenants to either
break their relationship with Heritage Square or not to form
a relationship.” [Frech Supp. Report ¶ 34]. Simon
objects to this testimony on a number of grounds, including
that factual findings of this sort are outside of Dr.
Frech's expertise, that this testimony would not be
helpful to the jury, and that he relied on insufficient facts
in forming his opinions.
Court agrees this testimony would not help the jury “to
understand the evidence or to determine a fact in issue,
” Fed.R.Evid. 702(a), as this particular testimony
merely involves making credibility judgments and resolving
factual disputes, which the jury is capable of doing on its
own. To be helpful to the jury, as is required under rule
702(a), an expert must actually draw on their expertise in
reaching their conclusions and must testify to something more
than what the jury can understand or decide for itself.
Ancho v. Pentek Corp., 157 F.3d 512, 519 (7th Cir.
1998). Thus, expert testimony that does little more than
offer a credibility opinion is typically not admissible.
Goodwin v. MTD Prods., Inc., 232 F.3d 600, 609 (7th
Cir. 2000) (noting that, in general, “an expert cannot
testify as to credibility issues, ” since
“credibility questions are within the province of the
trier or fact”); United States v. Benson, 941
F.2d 598, 604 (7th Cir. 1991) (“Credibility is not a
proper subject for expert testimony; the jury does not need
an expert to tell it whom to believe, and the expert's
‘stamp of approval' on a particular witness'
testimony may unduly influence the jury.”). Unless the
expert uses their expertise to add something to the
jury's ability to understand the evidence or evaluate a
witness' credibility, those matters are left to the
jurors to decide for themselves. United States v.
Hall, 93 F.3d 1337, 1343- 44 (7th Cir. 1996). Likewise,
an expert typically “cannot be presented to the jury
solely for the purpose of constructing a factual narrative
upon record evidence.” Newman ex rel. Newman v.
McNeil Consumer Healthcare, No. 10 C 1541, 2013 WL
9936293, at *6 (N.D. Ill. Mar. 29, 2013).
as Dr. Frech acknowledged, and as Simon notes, the presence
of tying depends primarily on what was actually communicated
or conveyed between Simon and the retailers. In order to
establish the coercion that is essential to a tying claim,
Gumwood must show that Simon refused or threatened to refuse
to give retailers leases in other properties unless the
retailers also leased at University Park or stayed out of
Heritage Square. On that topic, Gumwood will offer documents
and testimony that it contends show that Simon did convey
such a condition to the retailers. In response, Simon will
offer testimony from other witnesses denying that Simon
conveyed such a condition. Thus, the jury will hear directly
from the individuals who actually took part in the
negotiations, will see documents related to those
discussions, and can then decide which evidence is more
credible. Dr. Frech's expertise as an economist offers
the jury no assistance in deciding who or what to believe, so
his opinions that Simon coerced the retailers, and the
factual narratives accompanying those opinions, are not
admissible as expert testimony.
defends these opinions by arguing that it is common for
economists to assimilate and characterize facts in writing
scholarly literature, so Dr. Frech has an appropriate
expertise. That argument fails to address, however, what
value Dr. Frech's expertise as an economist adds to the
jury's ability to understand this evidence and decide
these particular questions. An economist's expertise
would be valuable in deciding, for example, what effect
certain facts may have on a party's ability to exercise
market power. As to tying, an economist might also be asked
to analyze whether or how certain facts in the record meet
the applicable standard for coercion. The opinions at issue
here do not offer that sort of analysis, though, and Gumwood
has not shown that an economist has any relative advantage
over the jury in determining what parties actually said to
Frech recognized as much, too, at least in part. Before
opining in his supplemental report that Simon in fact engaged
in tying, Dr. Frech noted that “[t]his is primarily a
factual issue, to be decided by the finder of fact, mostly
based on documentary evidence and fact witnesses.”
[Frech Supp. Report ¶ 34]. After that disclaimer, he
proceeded to state that “if it is helpful to the finder
fact, it is my opinion . . . that tying did occur . . .
.” [Id.] Likewise, when asked at his
deposition about the statement in his report that Ann Taylor
preferred Heritage Square to University Park, Dr. Frech
acknowledged that “that's very . . . much a fact
thing, ” and he “doubt[ed] an economist would be
asked something like that.” [DE 194-1 p.
Moreover, even when Dr. Frech defended his opinions, his
explanations made clear that his assessment of the evidence
on these issues was not aided by his expertise as an
economist. For example, when asked why he believed that Simon
coerced Ann Taylor when even Ann Taylor's executives
denied any such coercion, Dr. Frech said that “you have
to read the tenants' testimony with a grain of
salt” because they might be embarrassed to admit that
they were “pushed around” by Simon. [DE 194-1 p.
51-53]. That is hardly the product of expertise in economics.
parties also argue over whether Dr. Frech relied on
sufficient facts in reaching his opinion, as he conceded that
he “did not spend a lot of time” reviewing the
deposition of Ann Taylor's lead negotiator, and he first
offered his opinion that Ann Taylor was coerced before he
even had access to the testimony of Ann Taylor's
representatives, as he believed “[t]he record was
strong enough without that.” [DE 194-1 p. 48-49].
Regardless of whether that would present an independent basis
for excluding this testimony, these arguments illustrate how
admitting this type of testimony would actually distract
instead of assist the jury, and would delay the trial.
Permitting Dr. Frech to offer these opinions would require a
detour into exploring what documents Dr. Frech had access to,
how thoroughly he considered them, and what weight he gave to
them and why. Laboring through that process would be wasteful
when the relevant evidence can-and will-be presented to the
jury in the first instance to decide for itself what
conclusions to draw about what Simon communicated to the
retailers. See Hall, 93 F.3d at 1343 (“If the
proffered testimony duplicates the jury's knowledge, Rule
403 might counsel exclusion of the expert testimony to avoid
the risk of unduly influencing the jury.”); see
generally Young v. James Green Mgmt., Inc., 327 F.3d
616, 624 (7th Cir. 2003) (upholding the exclusion of findings
by the EEOC where the plaintiffs “pointed to no
evidentiary material available to the EEOC that was not
otherwise available to the jury during trial”).
Moreover, the jurors will not be limited to reviewing paper
records and transcripts, as was Dr. Frech, as they will
observe the witnesses testify live or by video deposition,
making them better positioned to evaluate credibility. Thus,
even if these opinions passed Rule 702's admissibility
thresholds, the Court would exclude this evidence under Rule
403, as the prejudice and delay would substantially outweigh
the minimal value of Dr. Frech's opinions on these purely
factual matters. Accordingly, the Court grants Simon's
motion in this respect.
independent basis for excluding this testimony, Simon also
argues that Dr. Frech relied on definitions of tying and
coercion that are inconsistent with the law. Although these
opinions are already being excluded for the reasons just
explained, it is worth briefly addressing these arguments, as
tying and coercion are fundamental concepts in this case. To
establish that Simon's conduct was anticompetitive,
Gumwood relies on a per se tying claim. That claim requires
Gumwood to prove, among other elements, that Simon tied two
different products (here, properties) together-that it
required a retailer to lease at one property (a tied
property) in order to obtain a lease at another property (a
tying property) over which Simon had market power.
Reifert v. S. Cent. Wisc. MLS Corp., 450 F.3d 312,
317 (7th Cir. 2006). Stated differently, a party imposes a
tie when it coerces or forces a purchaser to buy the tied
product in order to receive the tying product. Jefferson
Parish Hosp. Dist. No. 2 v. Hyde, 446 U.S. 2, 12-14
Gumwood notes, Dr. Frech's reports define tying as
“condition[ing] the sale of one or more goods, (the
‘tying' goods) on the sale of one or more other
products (the ‘tied' goods), ” [Frech Report
¶ 138], and define “coercion” and
“forcing” as “conditioning purchases in the
tying market to purchasing a good in the tied market or to
not purchasing a good in the tied market from a rival.”
[Frech Supp. Report ¶ 18]. Those definitions are
generally consistent with the law. Eastman Kodak Co. v.
Image Tech. Servs., Inc., 504 U.S. 451, 462 (1992)
(defining a tying arrangement as “‘an agreement
by a party to sell one product but only on the condition that
the buyer also purchases a different (or tied) product, or at
least agrees that he will not purchase that product from any
other supplier'” (quoting N. Pac. Ry. Co. v.
United States, 356 U.S. 1, 5-6 (1958))). During his
deposition, however, Dr. Frech defined those concepts far
more broadly. For example, he testified that it would be
coercive for Simon to “ask a favor” of a
retailer. [DE 194-1 p. 81-82]. Further, he stated that a
portfolio negotiation where nothing is final until everything
is final would inherently constitute a tying arrangement.
[Id. p. 123]. He also testified that drawing any
connection at all between two markets, such as offering a
discount at one mall if the retailer also leases at another
mall, would constitute a coercive tying arrangement.
[Id. p. 16-17, 19-21, 116-17].
statements are inconsistent with the definitions of tying and
coercion in the context of tying claims, and will not be
permitted at trial. As the Court explained at summary
judgment, the existence of a tie requires more than just a
package deal or a request to purchase two products together.
“[T]he essential characteristic of an invalid tying
arrangement lies in the seller's exploitation of its
control over the tying product to force the buyer
into the purchase of a tied product . . . .”
Jefferson Parish, 466 U.S. at 12 (emphasis added).
“If instead the buyer is free to decline the tied
product or to purchase the two products separately, ”