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Steves and Sons, Inc. v. Jeld-Wen, Inc.

United States District Court, E.D. Virginia, Richmond Division

January 10, 2018

STEVES AND SONS, INC., Plaintiff,
v.
JELD-WEN, INC., Defendant.

          MEMORANDUM OPINION

          Robert E. Payne Senior United States District Judge

         This matter is before the Court on DEFENDANT JELD-WEN, INC.'S MOTION IN LIMINE NO. 9: TO EXCLUDE LAY WITNESS TESTIMONY CONCERNING STEVES' FUTURE VIABILITY (ECF No. 553) . For the reasons set forth below, the motion will be denied in part and denied in part subject to renewal at trial, depending on the precise questions and the foundational evidence.

         BACKGROUND

         Steves & Sons, Inc. ("Steves") alleged that JELD-WEN, Inc. ("JELD-WEN") violated Section 7 of the Clayton Act when it acquired CraftMaster Manufacturing, Inc. ("CMI") in 2012. Compl. (ECF No. 5) (Under Seal) ¶Sl 175-78. To prevail on that claim, Steves must show that "the effect of such acquisition may be substantially to lessen competition." 15 U.S.C. § 18. Among other remedies, Steves seeks damages for future lost profits as a result of the CMI acquisition, based on evidence that JELD-WEN has given notice that it will not renew the parties' 2012 long-term doorskin supply agreement ("the Supply Agreement'') when that contract expires in September 2021, leaving Steves without a stable supply of doorskins.

         Steves asserts that its witnesses will testify to the following five topics relevant to those issues:

1) "the critical importance of interior molded doorskins to Steves' ability to manufacture interior molded doors;
2) the significance of Steves' interior molded door business to Steves' business overall;
3) the witnesses' efforts to secure alternative sources of doorskin supply for the period following termination of Steves' Supply Agreement with JELD-WEN and the results of those efforts;
4) the witnesses' expectations as to whether Steves will be able to obtain a stable, reliable supply of interior molded doorskins and the bases for these expectations; and
5) the harm that uncertainty regarding Steves' ongoing ability to access a stable, reliable supply of interior molded doorskins has caused and will continue to cause Steves' business."

PI. Opp. (ECF No. 618) (Under Seal) at 1-2. In addition, Steves states that it "will present evidence from non-party witnesses that will confirm that Steves will not have a commercially viable source of interior molded doorskins" when the Supply Agreement expires in 2021. Id. at 3. JELD-WEN moves to exclude at trial any opinions or testimony speculating that Steves will not remain a viable business after the completion of the Supply Agreement in September 2021, or that Steves will liquidate or go out of business at that time.

         DISCUSSION

         JELD-WEN's primary argument is that the evidence it seeks to exclude is lay witness opinion testimony that is inadmissible under Federal Rules of Evidence 602 and 701. Rule 602 allows a witness to testify about a particular issue "only if evidence is introduced sufficient to support a finding that the witness has personal knowledge of the matter." Similarly, under Rule 701, lay opinion testimony must be "rationally based on the witness's perception" and "not based on scientific, technical, or other specialized knowledge within the scope of Rule 702."

         "The modern trend favors the admission of opinion testimony [under Rule 701], provided that it is well founded on personal knowledge as distinguished from hypothetical facts, " and the opinion is offered "on the basis of relevant historical or narrative facts that the witness has perceived." MCI Telecomms. Corp. v. Wanzer, 897 F.2d 703, 706 (4th Cir. 1990) (internal quotations omitted). As a result, "company officials may estimate future profits or losses as a lay witness if the estimates are based on personal experience." Sprint Nextel Corp. v. Simple Cell Inc., 248 F.Supp.3d 663, 675 (D. Md. 2017) (citing, inter alia, Lord & Taylor, LLC v. White Flint, L.P., 849 F.3d 567, 575 (4th Cir. 2017)); accord Von der Ruhr v. Immtech Int'l, Inc., 570 F.3d 858, 862 (7th Cir. 2009) ("In the realm of lost profits, lay opinion testimony is allowed . . . where the witness bases his opinion on particularized knowledge he possesses due to his position within the company."); Nat'l Hispanic Circus, Inc. v. Rex Trucking, Inc., 414 F.3d 546, 551-52 (5th Cir. 2005) ("Rule 701 does not exclude testimony by corporate officers or business owners on matters that relate to their business affairs, such as industry practices and pricing."); see also Fed.R.Evid. 701, Committee Notes on Rules-2000 Amendment ("[M]ost courts have permitted the owner or officer of a business to testify to the value or projected profits of the business, without the necessity of qualifying the witness as an . . . expert." (citing Lightning Lube, Inc. v. Witco Corp., 4 F.3d 1153, 1175-76 ...


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