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GPI AL, Inc. v. Nissan North America, Inc.

United States District Court, S.D. Alabama, Southern Division

October 16, 2019

GPI-AL, INC., Plaintiff,



         This matter comes before the Court on plaintiff's Motion to Exclude Expert Testimony of Sharif Farhat (doc. 96). The Motion has been extensively briefed and is now ripe.

         I. Relevant Background.

         This action arises from Nissan North America, Inc.'s decision to establish a new Nissan automotive dealership by declaring an “open point” in west Mobile, Alabama. The existing Nissan dealership in Mobile, GPI AL-N, Inc. d/b/a Nissan of Mobile (“Nissan of Mobile”), brought this action alleging that Nissan North America's (“NNA”) attempt to establish a new dealership in this market violated Alabama Code § 8-20-4 in multiple respects as an unfair and deceptive trade practice, and that it also breached several provisions of the Dealer Agreement between Nissan of Mobile and NNA.

         In reaching its decision to declare an open point in west Mobile, NNA hired a consulting and software development company called Urban Science Applications, Inc. (“USAI”) to perform a study of the Mobile, Alabama market. USAI is the automotive industry's leading provider of dealer network analysis, which may involve evaluating and determining the proper number and location of automotive dealers in a particular market area for adequate brand representation. (PageID.2134-35.) The resulting market study in the fall of 2015 was performed primarily by USAI analyst Dan Hopfensperger. (PageID.1104.) In carrying out this study, Hopfensperger applied USAI's eight-step methodology for market studies, to-wit:

“[T]he first step is defining an area that's relevant to study for the issue at hand or the market that's being studied. The second step is determining a market share standard to assess the area or the relevant areas. The third step is to measure the performance of the areas based on that standard. The fourth step would be to assess the likely causes of that performance. The fifth step would be to propose a solution …. The sixth step would be to measure the impact of that solution. The seventh step would be to identify comparable experiences to confirm or help explain the basis for the solution and the results. And the eighth step would be to … finalize the recommendations and the market study.”

(PageID.1105.) The conclusion of USAI's fall 2015 study was a recommendation that west Mobile should be deemed a “monitored market, ” meaning that it would be monitored on a going-forward basis for possible future representation (i.e., for potential establishment of an additional Nissan dealership). (PageID.1112, 2137.)

         Following that initial recommendation from USAI, NNA continued to monitor the Mobile market and, in early 2017, decided to establish a new dealer in west Mobile. Upon commencement of this litigation by Nissan of Mobile, NNA retained USAI to perform further analysis of the Mobile market, using additional years of data not available in 2015 and early 2016 when USAI's prior recommendation was made. (PageID.2137.) For this project, NNA designated Sharif Farhat, Vice President of Expert Analytical Services for USAI, as an expert witness. Over the course of his 30-year career at USAI, Farhat has personally managed hundreds of dealer network analysis projects. (PageID.2165.) Farhat has provided expert testimony in more than 100 litigated matters before various courts and boards, including matters involving dealer network analysis, and has never been excluded from providing such opinions and analysis. (PageID.2135.) Among Farhat's conclusions from his analysis of the Mobile market in this litigation were that the Nissan brand suffered from “deficient market penetration (e.g., inadequate representation)” in the Mobile market, and that the “primary cause” of that shortcoming was that “there are too few Nissan sales and service facilities available in the Mobile Metro. … This can be solved by adding another Nissan dealer in the Mobile Metro.” (PageID.2161.)[1]

         Nissan of Mobile now moves for exclusion of Farhat's expert opinions and analysis in this case in their entirety. As grounds for this Motion, Nissan of Mobile argues that Farhat's methodology is too subjective because it “makes no adjustments for local market conditions, ” “fails to account for differences in competitive environment, ” involves the use of an “unreasonable performance standard, ” and conflicts with the conclusions reached by USAI less than three years earlier in the Hopfensperger study. (PageID.2021-22.)

         II. Analysis.

         A. Legal Standard for Admissibility of Expert Testimony.

         The Federal Rules of Evidence, as construed by the Supreme Court in the landmark case of Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993), “require[] expert scientific evidence to be both reliable and relevant pursuant to Rule 702, ” such that it “appropriately assists the trier of fact.” United States v. Henderson, 409 F.3d 1293, 1302 (11th Cir. 2005). In that regard, “[t]he court serves as a gatekeeper, charged with screening out experts whose methods are untrustworthy or whose expertise is irrelevant to the issue at hand.” Corwin v. Walt Disney Co., 475 F.3d 1239, 1250 (11th Cir. 2007). “The proponent of the expert testimony carries a substantial burden under Rule 702” to show admissibility by a preponderance of the evidence. Cook ex rel. Estate of Tessier v. Sheriff of Monroe County, Fla., 402 F.3d 1092, 1107 (11th Cir. 2005); see also Boca Raton Community Hosp., Inc. v. Tenet Health Care Corp., 582 F.3d 1227, 1232 (11th Cir. 2009) (“The offering party must show that the opinion meets the Daubert criteria, including reliable methodology and helpfulness to the factfinder …, by a preponderance of the evidence.”).

         As a general proposition, “[i]n determining the admissibility of expert testimony under Rule 702, a district court considers whether (1) the expert is qualified to testify competently regarding the matter he intends to address; (2) the methodology by which the expert reaches his conclusions is sufficiently reliable as determined by the sort of inquiry mandated in Daubert; and (3) the testimony assists the trier of fact, through the application of scientific, technical, or specialized expertise, to understand the evidence or to determine a fact in issue.” United States v. Douglas, 489 F.3d 1117, 1124-25 (11th Cir. 2007); see also Knight through Kerr v. Miami-Dade County, 856 F.3d 795, 808 (11th Cir. 2017) (similar). “While there is inevitably some overlap among the basic requirements - qualification, reliability, and helpfulness - they remain distinct concepts and the courts must take care not to conflate them.” Rosenfeld v. Oceana Cruises, Inc., 654 F.3d 1190, 1193 (11th Cir. 2011) (citation omitted).

         Courts have emphasized that “[t]he rules relating to Daubert issues are not precisely calibrated and must be applied in case-specific evidentiary circumstances that often defy generalization.” United States v. Brown, 415 F.3d 1257, 1266 (11th Cir. 2005). Moreover, a district court's gatekeeper role “is not intended to supplant the adversary system or the role of the jury.” United States v. Alabama Power Co., 730 F.3d 1278, 1282 (11th Cir. 2013) (citations omitted). Even in the wake of Daubert, “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. (citations omitted). “[I]n most cases, objections to the inadequacies of a[n opinion] are more appropriately considered an objection going to the weight of the evidence rather than its admissibility.” Id. (citations omitted). Thus, disagreements as to the manner in which an expert performs an analysis may best “be aired out in front of the jury and tested by the crucible of cross-examination, ” without implicating the Daubert gatekeeping function. Tampa Bay Water v. HDR Engineering, Inc., 731 F.3d 1171, 1185 (11th ...

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