UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF MICHIGAN

SOUTHERN DIVISION

CAO GROUP, INCORPORATED,

Plaintiff and counter-defendant, Case Number 09-11354

v. Honorable David M. Lawson

FEDERAL-MOGUL CORPORATION,

Defendant and counter-plaintiff.

______________________________________/

OPINION AND ORDER GRANTING IN PART AND DENYING IN PART

DEFENDANT’S MOTIONS TO PRECLUDE TESTIMONY OF 

JEFFREY VIOLA AND FRED G. HENDERSHOT

This matter is before the Court on two motions filed by the defendant to prevent the plaintiff

from calling at trial two expert witnesses. The core dispute arises from a contract to supply

automotive parts that eventually were installed in Chrysler products. The parts are interior lighting

assemblies that were manufactured by the plaintiff, Cao Group, Inc., according to the design

furnished by the defendant, Federal-Mogul Corporation. There does not appear to be much of a

dispute that the parts were defective: the lights would not illuminate consistently when the pushbutton switch was depressed. The defendant, who refuses to pay for the parts, contends the faulty

products result from defective manufacturing. The plaintiff, suing to collect its invoices, contends

that it manufactured the parts exactly according to the defendant’s design, and a design defect is the

cause of the problem. The plaintiff intends to call as witnesses Jeffrey Viola, a physicist, and Fred

G. Hendershot, an automotive business manager.

 The defendant bases its motions on two grounds: the disclosures required by Federal Rule

of Civil Procedure 26(a)(2) were untimely, and the purported opinion testimony of the witnesses will

not meet the requirements of Federal Rule of Evidence 702. The Court heard oral argument on the

2:09-cv-11354-DML-VMM Doc # 118 Filed 03/10/11 Pg 1 of 13 Pg ID 3116
-2-

motions on September 21, 2010. The parties sought and were granted leave to file supplemental

briefs. The Court now finds that neither witness should be prevented from testifying, but their

testimony must be limited to opinions that are helpful to the fact finder and supported by the

research and testing they actually performed. Therefore, the motions will be granted in part and

denied in part.

I.

The parties refer to the subject of the supply contract part as a POD LED lighting assembly

(Pod assembly). It appears to be intended as an interior dome light that illuminates when the outer

lens is pushed, and then deactivates when it is pushed again. Depressing the lens causes a thin metal

stamping held in tension to extend and make contact with energized pads, causing the light-emitting

diode to illuminate. A second push causes the stamping to retract from the pads, deactivating the

light. 

The parties entered into a supply contract on July 31, 2006 under which Cao agreed to

manufacture and Federal-Mogul agreed to purchase Pod assemblies. On August 28, 2006, FederalMogul issued an award letter to the plaintiff that identified the products that Cao would supply.

During contract performance, Federal-Mogul changed the specifications for the product. Those

changes allegedly led to quality issues, delays, and additional costs to both parties, for which Cao

denies responsibility. Federal-Mogul also required Cao to source its parts from certain vendors,

leading to quality issues, delays, and costs for which Cao refuses responsibility. 

During performance of the contract, Federal-Mogul paid less than the full amount owing on

the invoices, claiming set-offs because delivered Pod assemblies did not meet Federal-Mogul’s

specifications. In June 2008, Cao and Federal-Mogul communicated in order to formulate a contract

2:09-cv-11354-DML-VMM Doc # 118 Filed 03/10/11 Pg 2 of 13 Pg ID 3117
-3-

exit strategy. On August 27, 2008, Federal-Mogul sent payment of $113,300 to Cao, but cancelled

payment the next day. Federal-Mogul has not made any further payments to Cao. On September

5, 2008, Federal-Mogul informed Cao that it was exercising its rights of set-off and recoupment

against an additional $624,844.23 of the outstanding amounts owed to Cao. Cao brought suit for

breach of contract, account stated, breach of implied covenant of good faith and fair dealing, unjust

enrichment, and declaratory relief. Federal-Mogul brought a counterclaim that included claims of

breach of contract and breach of implied warranty and duty of good faith. 

The Court entered a scheduling order on September 1, 2009 that required the plaintiff and

counter-plaintiff to serve expert reports under Federal Rule of Civil procedure 26(a)(2) by March

29, 2010. Cao filed a motion to extend that date, which the defendant opposed, and the Court

entered an order on April 27, 2010 extending Cao’s disclosure date to May 4, 2010. Federal-Mogul

filed the present motions on July 12, 2010. 

According to the reports furnished and depositions taken in the matter, Jeffrey Viola will be

called as an expert witness by the plaintiff to support its contention that the product failure was due

to a design defect by testifying that (1) the Pod assembly was not ready for production at the time

of release; (2) the defendant poorly handled the design for assembly concerns; (3) the design was

defective from the start; and (4) the defendant’s design flaws, not manufacturing problems, were the

ultimate cause of the Pod assembly problems. Federal-Mogul argues that Mr. Viola’s testimony

should be precluded because it is unreliable and does not satisfy the requirements of Daubert v.

Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993), and Federal Rule of Evidence 702. The

defendant argues that Mr. Viola’s methodology is unreliable because his analysis is based entirely

on his review of what others stated about the design and its manufacturability and his “finger test,”

2:09-cv-11354-DML-VMM Doc # 118 Filed 03/10/11 Pg 3 of 13 Pg ID 3118
-4-

in which he applied pressure to the metal spring with his finger. Federal-Mogul cites several other

criticisms of Mr. Viola’s examinations of the product.

Fred Hendershot is expected to testify about industry standards relating to design changes

and dealings with sub-suppliers. His report contains opinions that Cao cannot be responsible for

defective parts because Federal-Mogul dictated the source Cao could use for parts or subassemblies;

Federal-Mogul did not use the proper channels of communication for design changes; there were

better designs available, which Federal-Mogul did not choose because of costs; and Federal-Mogul

should not collect rework charges because it did not follow industry standards. The defendant

argues that Mr. Hendershot’s testimony is irrelevant and unreliable, and the jury can decide the

issues without expert assistance. In addition, the defendant believes that some of Mr. Hendershot’s

opinions relate to questions of law, which are exclusively within the province of the court.

Federal-Mogul argues that both witnesses should be precluded from testifying because the

plaintiff did not furnish reports under Federal Rule of Civil Procedure 26(a)(2) by the first deadline

set by the Court. 

II.

Expert reports are governed by Federal Rule of Civil Procedure 26(a)(2). The reports must

be exchanged on time, and they must contain the items listed in rule 26(a)(2)(B). The failure to

serve a report timely or furnish a complete report may constitute grounds to strike the report under

Rule 37(c). See Phillips v. Cohen, 400 F.3d 388, 402 (6th Cir. 2005). Moreover, Rule 37(c)(1)

authorizes the district court to exclude from a trial information that was withheld, in violation of

Rule 26(a) or (e) without “substantial justification,” unless the failure to disclose was “harmless.”

In fact, the language of Rule 37 suggests that exclusion is mandatory in these circumstances. See

2:09-cv-11354-DML-VMM Doc # 118 Filed 03/10/11 Pg 4 of 13 Pg ID 3119
-5-

Dickenson v. Cardiac & Thoracic Surgery of E. Tenn., 388 F.3d 976, 983 (6th Cir. 2004) (citing

Musser v. Gentiva Health Servs., 356 F.3d 751, 758 (7th Cir. 2004)); see also Samos Imex Corp. v.

Nextel Commc’ns., Inc., 194 F.3d 301, 305 (1st Cir. 1999) (explaining that “as amended, the civil

procedure rules make clear that exclusion of evidence [such as an expert’s testimony] is a standard

sanction for a violation of the duty of disclosure under Rule 26(a)”).

In this case, the plaintiff did not furnish its expert reports under Rule 26(a)(2) by the initial

deadline, but it sought and obtained (over the defendant’s objections) an enlargement of time. The

reports were served within the expanded deadline. The defendant argues that the Court should

ignore the time enlargement because the facts do not support the plaintiff’s initial reasons for

seeking the extension. The defendant, in effect, is asking for reconsideration of the contested motion

for enlargement of time. 

Motions for reconsideration may be granted when the moving party shows (1) a “palpable

defect,” (2) that misled the court and the parties, and (3) that correcting the defect will result in a

different disposition of the case. E.D. Mich. LR 7.1(h)(3). A “palpable defect” is a defect which

is obvious, clear, unmistakable, manifest, or plain. Mich. Dep’t of Treasury v. Michalec, 181 F.

Supp. 2d 731, 734 (E.D. Mich. 2002) (citations omitted). The Local Rules provide that “[g]enerally

. . . the court will not grant motions for rehearing or reconsideration that merely present the same

issues ruled upon by the court, either expressly or by reasonable implication.” E.D. Mich. LR

7.1(h)(3). A motion for reconsideration must be filed within fourteen days of the entry of the order

from which reconsideration is sought. E.D. Mich. LR 7.1(h)(1). 

To the extent that the defendant’s motion asks the Court to ignore or set aside it’s previous

order enlarging time for expert reports, the motion is untimely. It was filed several months after the

2:09-cv-11354-DML-VMM Doc # 118 Filed 03/10/11 Pg 5 of 13 Pg ID 3120
-6-

enlargement order, which was entered in April 2010. Moreover, the argument merely rehashes the

debate over the plaintiff’s justifications for seeking more time.

The defendant’s second argument challenges the substantive admissibility of the expert

testimony itself. Any challenge to expert testimony must begin with Rule 702 of the Federal Rules

of Evidence, which was modified in December 2000 to reflect the Supreme Court’s emphasis in

Daubert and Kumho Tire Co. v. Carmichael, 526 U.S. 137 (1999), on the trial court’s gate-keeping

obligation to conduct a preliminary assessment of relevance and reliability whenever a witness

testifies to an opinion based on specialized knowledge. Rule 702 states:

If scientific, technical, or other specialized knowledge will assist the trier of fact to

understand the evidence or to determine a fact in issue, a witness qualified as an

expert by knowledge, skill, experience, training, or education, may testify thereto in

the form of an opinion or otherwise, if (1) the testimony is based upon sufficient

facts or data, (2) the testimony is the product of reliable principles and methods, and

(3) the witness has applied the principles and methods reliably to the facts of the

case.

The language added by the amendment to Rule 702 restates Daubert’s insistence on the

requirements that an expert’s opinion be based on a foundation grounded in the actual facts of the

case, that the opinion is valid according to the discipline that furnished the base of special

knowledge, and that the expert appropriately “fits” the facts of the case into the theories and methods

he or she espouses. See Daubert, 509 U.S. at 591-93.

In addition, expert testimony is not admissible unless it will be helpful to the fact finder.

Such testimony is unhelpful when it is unreliable or irrelevant, as the Court observed in Daubert,

see id. at 591-92, and also when it merely deals with a proposition that is not beyond the ken of

common knowledge, see, e.g., Berry v. City of Detroit, 25 F.3d 1342, 1350 (6th Cir. 1994) (“If

everyone knows this, then we do not need an expert because the testimony will not ‘assist the trier

2:09-cv-11354-DML-VMM Doc # 118 Filed 03/10/11 Pg 6 of 13 Pg ID 3121
-7-

of fact to understand the evidence or to determine a fact in issue.’”) (quoting Fed. R. Evid. 702).

Finally, before an expert may give an opinion, the witness must be qualified to do so. See id. at

1348-50; Morales v. Am. Honda Motor Co., Inc., 151 F.3d 500, 516 (6th Cir. 1998). The proponent

of expert testimony must establish all the foundational elements of admissibility by a preponderance

of proof. Nelson v. Tenn. Gas Pipeline Co., 243 F.3d 244, 251 (6th Cir. 2001) (citing Daubert, 509

U.S. at 592 n.10).

An opinion is “reliable” from an evidentiary standpoint if it is “valid” according to the

discipline upon which it is based. See Daubert, 509 U.S. at 590. In determining validity, the

Court’s focus is on principles and methodology, not results. And there is no precise formula by

which a court might deem a methodology “acceptable” or “unacceptable.” Daubert and its progeny

have therefore not created a “straitjacket,” Gross v. Comm’r, 272 F.3d 333, 339 (6th Cir. 2001), but

rather counsel a flexible approach, reconciling the “liberal thrust” of Rule 702 which “relax[es] the

traditional barriers to opinion testimony” with the responsibility to “screen[ ] such evidence” in

order to keep unreliable or invalid opinions from the jury. Daubert, 509 U.S. at 588-89; see also

Jahn v. Equine Servs., PSC, 233 F.3d 382, 388 (6th Cir. 2000).

A. Jeffrey Viola 

Jeffrey Viola is trained as a physicist. The defendant has not challenged Mr. Viola’s

qualification as an expert — his education, work experience, and training certainly pass muster. Mr.

Viola graduated from Oakland University in 1990 with a bachelor of science degree in physics and

from the University of Michigan in 1994 with a master of science degree in physics. He considers

himself an expert in physics; electro-mechanical designs; engineering, specifically the development

2:09-cv-11354-DML-VMM Doc # 118 Filed 03/10/11 Pg 7 of 13 Pg ID 3122
-8-

of materials for switches; molding operations, i.e., injection and plastic molding, casting, and

stampings; and magnetics. 

From 1990 to 1997, Mr. Viola worked as a research associate for the University of

Michigan’s Nuclear Medicine Department. There he built, designed, and assembled equipment to

measure and perform chemical reactions used in Positron Emission Tomography imaging

technology. Mr. Viola worked at Ford Motor Company from 1997 to 2004 in its Advanced Sensors

Group, where he identified and developed technologies that might be considered in future products.

While at Ford, Mr. Viola worked on inverter systems for electric vehicle drive, torque sensing for

assisted steering, engine speed sensing, and throttle position sensing. Mr. Viola currently is

employed at Allegro Microsystems as a field applications engineer; it entails helping Allegro

customers develop products for sensing switch, latch, position, speed, and current. Mr. Viola also

works part-time as a consultant. He has never worked for a thin metal stamping firm or designed

a progressive die used in connection with the metal stamping. 

In preparation for his opinions in this case, Mr. Viola reviewed one finished Pod assembly

and one circuit board assembly (collectively, the Samples), but he didn’t know who made them —

Broadway or Interplex — or when they were made. His review of the Pod assembly consisted of

visually inspecting the device; applying an unknown amount of finger pressure to the spring;

actuating the on/off switch; and analyzing the contact points, the flexibility of the spring, the

alignment, and applied forces to the device to see how far it would travel outside the contact points.

He did not measure or document the relationship between the force applied and the movement of

the end of the spring relative to the contact pads. He did not perform any analysis to determine the

metallurgical composition of the pads or whether there was any contamination of the circuit board

2:09-cv-11354-DML-VMM Doc # 118 Filed 03/10/11 Pg 8 of 13 Pg ID 3123
-9-

or the pads in the Samples. He did not know if the stampings in the Samples were within

specification, and he did not know if the Pod assembly would illuminate if connected to a power

source. Mr. Viola did not run any computer programs to analyze any aspect of the Pod LED

assembly. He did not do any analysis evaluating the manufacturability of the stamping used for the

spring, nor was he familiar with the specifics of the manufacturing process used by Broadway or

Interplex to make the stamping. He did not do any durability analysis. 

As noted earlier, the defendant’s breach of warranty claim hinges on whether a defective

design or manufacturing problems caused the Pod assemblies to fail. The defendant asserts that its

own testing of failed parts shows that the root cause of the failures was solder flux residue

contamination from the manufacturing process. The defendant challenges the sufficiency and

reliability of Mr. Viola’s opinions based on the fact that Mr. Viola did not produce any technical

data or take any dimensional measurements in preparing his report, conduct every conceivable test,

or know who made the Pod assembly he inspected. Mr. Viola’s methods were not exhaustive, but

his examination, combined with his document review, provided enough information for him to form

an opinion on the design’s deficiencies.

Mr. Viola’s testimony is relevant. The design concerns at issue are beyond the knowledge

of lay persons, and Mr. Viola’s testimony will help the trier of fact understand the science of switch

design. 

However, when it comes to the opinion that the design flaws, rather than manufacturing

flaws, were the cause of the parts failures, Mr. Viola has not gathered adequate data to support his

views. He never examined any failed parts. It does not appear that he ever investigated the

manufacturing processes of the two sub-suppliers. He has not performed any tests on any Pod

2:09-cv-11354-DML-VMM Doc # 118 Filed 03/10/11 Pg 9 of 13 Pg ID 3124
-10-

assemblies delivered to the defendant to determine the cause of their failure. Although Mr. Viola

is qualified to criticize the design of the product, his opinion that design flaws and not manufacturing

flaws caused the part failures amounts to no more than speculation. “‘[N]o matter how good’

experts’ ‘credentials’ may be, they are ‘not permitted to speculate.’” Tamraz v. Lincoln Elec. Co.,

620 F.3d 665, 671 (6th Cir. 2010) (quoting Goebel v. Denver & Rio Grande W. R.R. Co., 215 F.3d

1083, 1088 (10th Cir. 2000)). “The ‘ipse dixit of the expert’ alone is not sufficient to permit the

admission of an opinion.” Ibid. (quoting Gen. Elec. Co. v. Joiner, 522 U.S. 136, 146 (1997)). 

Mr. Viola may comment on the design features of the Pod assemblies, but he may not offer

any testimony opining that a design defect, and not manufacturing problems, caused the Pod

assemblies in question to malfunction. 

B. Fred G. Hendershot

As with Mr. Viola, the defendant does not challenge Mr. Hendershot’s qualification as an

expert. Mr. Hendershot graduated from Macomb County Community College in 1972 with an

associate’s degree in civil hydraulic engineering, and from Michigan State University in 1976 with

a bachelor’s degree in business management and a master’s degree in finance. Mr. Hendershot

received certification as a QS9000 Internal Auditor from the Automotive Industry Action Group in

1998. In 2000, Mr. Hendershot earned a master’s degree in international business from Lawrence

Technical University. Mr. Hendershot worked for thirteen years as the commercial and commodities

manager for sensors and switches for Ford Motor Company. He is qualified by experience to testify

about industry practices in this area of parts procurement.

 Mr. Hendershot’s testimony is relevant because his knowledge of industry standards may

help the trier of fact understand the issues. Although the defendant believes that Mr. Hendershot’s

2:09-cv-11354-DML-VMM Doc # 118 Filed 03/10/11 Pg 10 of 13 Pg ID 3125
-11-

testimony should be precluded because a jury would be capable of deciding the case without his

testimony, the Court is satisfied that a lay person is not familiar with the standards of the automotive

industry. To the extent that such knowledge would help the factfinder decide the case, his testimony

could be relevant.

The defendant is correct that it would be improper to allow Mr. Hendershot to comment on

either party’s obligations under the Supply Agreement or the Uniform Commercial Code. Sheet

Metal Workers, Int’l Ass’n, Local Union No. 24 v. Architectural Metal Works, Inc., 259 F.3d 418,

424 n.4 (6th Cir. 2001) (“The construction of unambiguous contract terms is strictly a judicial

function.”); Berry, 25 F.3d at 1353 (finding that expert testimony that made legal conclusions was

improper). Mr. Hendershot, however, will be allowed to testify regarding the meaning of

specialized contract terms in order to assist the factfinder in interpreting each party’s anticipated

obligations, if the other facts present a contextual dispute on those points. Transpro, Inc. v. Leggett

& Platt, Inc., 297 Fed. App’x 434, 442 (6th Cir. 2008) (citing Kona Tech. Corp. v. S. Pac. Transp.

Co., 225 F.3d 595, 611 (5th Cir. 2000) (finding expert testimony properly admitted to interpret

contract provisions having a specialized meaning in the railroad industry)).

It is difficult to assess relevancy, however, without the benefit of context. Therefore, the

Court will deny the motion to preclude Mr. Herndershot’s testimony in full and permit the defendant

to interpose an appropriate objection at trial.

However, Mr. Hendershot will not be allowed to testify that the defendant knew of the

current product’s design weakness but, due to cost concerns, stayed with the design (the third

conclusion in his report). Mr. Hendershot has not established any special knowledge as an engineer

competent in design or manufacturing. Morever, the jury is capable of reaching its own conclusion

2:09-cv-11354-DML-VMM Doc # 118 Filed 03/10/11 Pg 11 of 13 Pg ID 3126
-12-

after reviewing the same documents Mr. Hendershot relied on to form his opinion. Therefore, Mr.

Hendershot will not be allowed to comment on any decision the defendant made regarding the Pod

assembly’s design. 

III.

The defendant has not shown that either witness’s testimony should be excluded in full. The

Court will limit the testimony of the witnesses as described above.

Accordingly, it is ORDERED that the defendant’s motion to preclude Jeffrey Viola from

testifying at trial [dkt #65] is GRANTED IN PART AND DENIED IN PART.

It is further ORDERED that Jeffrey Viola may not testify as to the cause of the malfunction

of the Pod assemblies in question. 

It is further ORDERED that the defendant’s motion to preclude Fred G. Hendershot from

testifying at trial [dkt #66] is GRANTED IN PART AND DENIED IN PART. 

It is further ORDERED that Fred G. Hendershot may not testify to either party’s duties

under the Supply Agreement or the Uniform Commercial Code, draw any legal conclusions

regarding liability, or testify that the defendant knew of the current product’s design weakness but,

due to cost concerns, stayed with the design.

It is further ORDERED that counsel for the parties appear before the Court on March 21,

2011 at 10:00 a.m. to discuss further case management deadlines and schedule the matter for trial.

s/David M. Lawson 

DAVID M. LAWSON

United States District Judge

Dated: March 10, 2011

2:09-cv-11354-DML-VMM Doc # 118 Filed 03/10/11 Pg 12 of 13 Pg ID 3127
-13-

PROOF OF SERVICE

The undersigned certifies that a copy of the foregoing order was served

upon each attorney or party of record herein by electronic means or first

class U.S. mail on March 10, 2011.

s/Deborah R. Tofil 

DEBORAH R. TOFIL

2:09-cv-11354-DML-VMM Doc # 118 Filed 03/10/11 Pg 13 of 13 Pg ID 3128